zb_8k.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 31,
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
2.04 Triggering Events
That Accelerate or Increase a Direct Financial Obligation or an Obligation
Under
an Off-Balance Sheet Arrangement
The
information related to Lockhart Funding, LLC that is contained in Item 8.01
is
incorporated into this item by reference.
Item
8.01 Other
Items
Lockhart
Funding
Due
to
ongoing disruptions in and contraction of the market for asset-backed commercial
paper (“ABCP” or “CP”), on December 26 and 27 Zions First National Bank (“Zions
Bank”) purchased $840 million of U. S. Government agency-guaranteed and
AAA-rated securities from Lockhart Funding, LLC (“Lockhart”) at a price equal to
book value plus accrued and unpaid interest, and the amount of outstanding
commercial paper issued by Lockhart was reduced by the same
amount. These actions were taken pursuant to the Liquidity Agreement
between Zions Bank and Lockhart (the “Liquidity Agreement”), which requires
securities purchases in the absence of sufficient CP funding. Since
the fair value of the assets purchased was less than their book value, a pretax
write-down of approximately $33 million (about $0.19 per diluted common share
after-tax) will be recorded in conjunction with the purchase of these
securities.
On
December 21, 2007, Fitch Ratings downgraded from “AAA” to “A-” a $25 million
REIT Collateralized Debt Obligation (“REIT CDOs”) held by Lockhart. Under the
terms of the Liquidity Agreement, Zions Bank purchased this security at book
value; a pretax write-down of approximately $7 million (about $0.04 per diluted
common share after-tax) will be recorded in marking this security to fair value.
The security continues to be rated “AAA” by the two other agencies which rate
it.
After
these purchases, total assets held and commercial paper issued by Lockhart
are
approximately $2.1 billion. The current book value of these $2.1 billion of
assets exceeds their fair value by approximately $22 million. Zions’ affiliates
currently own approximately $710 million of Lockhart’s
CP. Lockhart is an off-balance sheet commercial paper conduit
sponsored by Zions Bank. For further information on Lockhart and the Liquidity
Agreement, refer to Zions Bancorporation’s most recent SEC Forms 10-K and
10-Q.
Available
For Sale Securities
Due
to a
number of downgrades of REIT CDOs announced by Fitch Ratings on December 21,
as
well as additional recently released information regarding several underlying
components of some REIT CDOs, Zions Bancorporation (“Zions” or “the Company”)
has determined to add one additional REIT CDO to the list of REIT CDOs deemed
to
be Other Than Temporarily Impaired (“OTTI”) as announced on December 19,
2007. This additional security had an original book value of
$25 million and a Fitch rating of “A”. Fitch downgraded the security to
“BB-”. This security is currently rated “A” by Standard & Poor’s.
As required by GAAP for securities deemed OTTI, a pretax expense of
approximately $15 million (about $0.08 per diluted common share after-tax)
will
be recognized in marking this security to fair value.
Other
Comments
Combining
the information in this announcement with the Form 8-K filed on December 19,
2007, the pretax charge for REIT CDOs deemed OTTI in the fourth quarter will
be
approximately $109 million or $0.60 per diluted common share after-tax. In
addition, the pretax charge for securities purchased from Lockhart will be
approximately $49 million or $0.28 per diluted common share
after-tax.
Following
these actions, Zions has REIT CDOs with a book value of approximately $156
million, of which $123 million has not been deemed OTTI. Additional information
on the composition of the Available For Sale portfolio is found in Zions’ most
recent SEC Form 10-Q.
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
31,
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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