Zions Bancorp. to Close 23 Branches and Reduce Headcount
Jun 2 15
Zions Bancorp. announced that it will close almost two dozen branches and lay off up to 7% of its employees as it works to cut costs. The moves are part of an effort by the company to get its efficiency ratio below 65% by 2017 and hold noninterest expenses steady at $1.6 billion for this year and 2016. The company would close 23 branches and reduce its headcount by 6% to 7%, with cuts split evenly between the branch closures and reductions elsewhere. Based on Zions' March 31 employment totals, the company could cut up to 725 jobs.
Zions Bancorporation Announces Corporate Restructuring; Announces Management Changes
Jun 1 15
Zions Bancorporation announced a corporate restructuring in conjunction with several expense and revenue initiatives that are expected to substantially improve the company's profitability metrics. The organizational changes outlined below are designed to: Improve the customer experience (e.g. faster turnaround times); Simplify the corporate structure and remove associated costs; Drive substantial positive operating leverage. Key elements of organizational changes: Consolidate seven bank charters into a single legal charter (subject to regulatory approval), yet maintain local decision-making CEOs, local pricing of products and services, local credit authority, and local branding. Create a Chief Banking Officer position, with responsibility for retail banking, wealth management, and residential mortgage lending. Consolidate risk functions and various non-customer facing operations. As was previously announced, Zions is continuing to invest in the overhaul and simplification of its technology infrastructure, which is integral to achieving the improved customer experience and certain gross cost savings and efficiency ratio targets announced. The following are the targeted financial performance outcomes of these organizational changes, and associated operational and technological initiatives: Achieve an efficiency ratio in the low 60s by fiscal year 2017 driven by expense and revenue initiatives detailed below; the announced target assumes a slight increase in interest rates. Increase returns on tangible common equity over the long term to double digit levels. Maintain noninterest expense below $1.60 billion in 2015 and 2016, and increasing somewhat in 2017; this target excludes severance and other restructuring-related items. Achieve gross pre-tax cost savings of $120 million annually from operational expense initiatives by fiscal year 2017: overhaul technology, consolidate legal charters, and improve operating efficiency across the company. In addition to the aforementioned cost savings, the company intends to achieve moderate growth in revenue through loan and fee income growth. Consistent with previous announcements, Zions intends to moderately extend the duration of its balance sheet by deploying low-yielding cash into mortgage-backed securities and interest rate swaps. As has been previously communicated, the company expects to achieve pre-tax cost savings of approximately $30 million annually through the maturity of subordinated debt in the second half of 2015. Additionally, as has also been previously communicated, over the next several quarters the company expects to achieve a reduction of approximately $20 million of annual dividends on preferred equity. These financial elements are important components in achieving the stated profitability objectives.
In conjunction with the organizational changes, management changes have also been made: Scott J. McLean, who has served over the past year as President of Zions Bancorporation, has been additionally given the title of Chief Operating Officer, reflecting his continuing responsibilities for the oversight of Technology and Operations, Legal, Human Resources, the execution of transformational change projects, chairman of Amegy Bank, and his leadership in a variety of other corporate initiatives. Keith D. Maio, who has served as President and CEO of National Bank of Arizona, assumes the position of EVP and Chief Banking Officer for Zions Bancorporation, with overall responsibility for the company's Retail Banking, Residential Mortgage and Wealth Management businesses. Mr. Maio will continue to hold the title of Chairman of National Bank of Arizona. LeeAnne B. Linderman, who has served as EVP and Executive Director of Retail and Omni-channel Banking at Zions Bank, assumes the title of EVP, Retail Banking, for Zions Bancorporation, and has been named a new member of Zions Bancorporation's Executive Management Committee. Mark Young, who has served as EVP and Executive Director of Real Estate at National Bank of Arizona, becomes President and CEO of National Bank of Arizona, and has been named a new member of Zions Bancorporation's Executive Management Committee.
Zions Bancorporation Staying Out Of M&A
May 27 15
Zions Bancorporation (NasdaqGS:ZION) is staying out of M&A. Harris Simmons, Chairman and Chief Executive of Zions Bancorporation, said, “Many of the smaller banks that could be potential takeover targets are heavily involved in commercial real estate lending. Zions has set concentration limits for different lending categories and is already bumping up against those. Zions Bancorp., once an active acquirer, is likely to remain on the sidelines of M&A for a while.”
Zions Bancorporation Announces Management Changes
May 8 15
Zions Bancorporation announced that Doyle L. Arnold intended to retire from his positions of vice chairman and chief financial officer of the company. Paul Burdiss was expected to succeed Arnold and assume the roles of executive vice president and chief financial officer upon Arnold's retirement. Arnold's retirement and Burdiss' appointment as executive vice president and chief financial officer by the company's board of directors is effective as of May 8, 2015.