form8-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of
1934
Date
of Report (Date of earliest event reported) December 19,
2007
ZIONS
BANCORPORATION
(Exact
name of registrant as specified in its charter)
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UTAH
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001-12307
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87-0227400
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(State
of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification
No.)
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ONE
SOUTH MAIN, 15th
Floor,
SALT
LAKE CITY, UTAH
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84111
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code 801-524-4787
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N/A
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(Former
name or former address, if changed since last
report.)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13a-4(c))
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Item
7.01 Regulation FD Disclosure
In
light
of the significant declines in dealer price quotes in recent weeks of various
securities owned by Zions, the company has undertaken a review of its securities
available for sale. As a result of that review, seven of twelve REIT trust
preferred CDO securities have been deemed as other than temporarily impaired
(OTTI), resulting in an estimated pretax charge to income in the fourth quarter
of about $94 million or approximately $0.52 per common diluted share
after-tax.
Five
of
these seven securities are rated investment grade by both agencies rating
them;
a sixth is rated investment grade by one agency. These six securities
have paid their scheduled fourth quarter cash payment. The collateral
in these securities includes debt issued by commercial income REITs, commercial
mortgage-backed securities, residential mortgage REITs, and home builders.
The
decision to deem these securities OTTI was based on a specific analysis of
each
security, including an evaluation of the underlying collateral using information
and industry knowledge available to Zions.
The
securities deemed other than temporarily impaired are among the twelve REIT
trust preferred CDO securities reported in our third quarter SEC Form 10-Q
(page
27) with an aggregate book value of $229 million and fair value of $144 million
as of September 30, 2007. The difference between book value and fair value
($85
million) was recorded at the end of the third quarter as a reduction to capital
through Other Comprehensive Income. As of December 18, the fair
value of these twelve securities had further declined to $58 million based
on
dealer marks, or $171 million less than book value.
At
September 30, 2007, the seven securities now deemed OTTI had a total book
value
of $116.8 million and an aggregate fair value of $58.5 million. As of December
18, we are writing these seven securities down to current fair value of $22.7
million. As required by GAAP for securities deemed OTTI, the Accumulated
Other
Comprehensive Income recorded in the third quarter for these seven securities
will be reversed and the entire impairment amount of $94.1 million will be
charged through the income statement as an expense in the fourth
quarter.
The
remaining $112 million of REIT trust preferred CDO securities that have not
been
deemed OTTI will be valued at $35.6 million as of this date; the difference
will
be recorded in OCI.
Zions
does not expect any material changes in its capital ratios at December 31,
2007
compared to September 30, 2007.
As
previously disclosed, a security owned by Lockhart Funding LLC, an off-balance
sheet commercial paper conduit sponsored by Zions Bank, was downgraded below
AA-
by one rating agency in November. As required under the liquidity agreement,
Zions Bank purchased the security at book value of $30 million from Lockhart
Funding LLC. The purchased security was written down to fair value, resulting
in
a pretax expense of approximately $9.7 million or approximately $0.058 per
diluted common share after-tax.
Zions
also will record its share of the Visa anti-trust settlement as a pretax
expense
of approximately $3.9 million in the fourth quarter, or approximately $0.022
per
common diluted share after-tax.
This
current report on form 8-K contains statements that relate to the projected
performance of Zions Bancorporation and elements of or affecting such
performance, including statements with respect to the beliefs, plans,
objectives, goals, guidelines, expectations, anticipations and estimates of
management. These statements constitute forward-looking information
within the meaning of the Private Securities Litigation Reform
Act. Actual facts, determinations, results or achievements may differ
materially from the statements provided in this 8-K since such statements
involve significant known and unknown risks and
uncertainties. Factors that might cause such differences include, but
are not limited to: competitive pressures among financial
institutions; economic, market and business conditions, either nationally or
locally in areas in which Zions Bancorporation conducts its operations, being
less favorable than expected; changes in the interest rate environment reducing
expected interest margins; changes in debt, equity and securities markets;
adverse legislation or regulatory changes and other factors described in Zions
Bancorporation’s Annual Report on Form 10-K for the year ended December 31,
2006. In addition, the statements contained in this 8-K are based on
facts and circumstances as understood by management of the company on the date
of this 8-K, which may change in the future. Zions Bancorporation
disclaims any obligation to update any statements or to publicly announce the
result of any revisions to any of the forward-looking statements included herein
to reflect future events, developments, determinations or
understandings.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Zions
Bancorporation |
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December
19,
2007
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By:
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/s/ Thomas
E. Laursen |
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Name:
Thomas E. Laursen |
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Title:
Executive Vice
President and General Counsel |
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