Zions Bancorporation

• Type: Bank; PPP lender of record and Main Street Lending Program lender
• Legal entity: Zions Bancorporation, National Association, which operates as seven locally branded affiliate banks, among them Zions Bank
• Headquarters: Salt Lake City, Utah

In the archive

• Lender page → Zions Bank
• Case: In re Paycheck Protection Program (PPP) Agent Fees Litigation — MDL No. 2950

Zions lent well above its size in PPP. SBA's loan-level file credits Zions Bank, a division of Zions Bancorporation, N.A., with 76,531 loans and $9.9 billion in approved dollars, 13th among all lenders by dollars.¹ The company's 10-K for 2021 says it funded $10.2 billion of PPP loans, $7.3 billion in 2020 and $2.9 billion in 2021, "for approximately 77,000 customers," and ranked 10th among all originators in SBA's disclosures.² A December 2020 J.P. Morgan analyst report said Zions was "the 21st largest bank in the US (based on assets)" but "the 9th largest issuer of PPP loans."³

The PPP book

The loans averaged $129,089 and went to 69,141 borrowers, who reported 1,018,797 jobs. Modeled loan by loan from SBA's published fee schedule, Zions' processing fees come to $361.4 million: $220.7 million on 2020 first-draw loans, $20.2 million on 2021 first-draw loans and $120.5 million on 2021 second-draw loans, 20th of 4,688 originating lenders.¹ SBA never published what it paid each lender.

Zions reported the PPP loans' fees through their yield: in 2020 an average $4.5 billion of PPP loans, 6 percent of earning assets, earned 3.22 percent, against 3.96 percent on the rest of the loan book, and $102 million of net origination fees were still unamortized at year-end. When SBA forgave a loan early, the unamortized fee was recognized at once; forgiveness of about 9,900 loans worth $1.3 billion in 2020 brought in $26 million that way.⁴ In 2021 PPP loans produced $235 million of interest income, $138 million of it from accelerated fees on $6.5 billion of forgiven loans.²

The loans also brought customers. Zions said PPP let it provide relief to more than 47,000 customers in 2020, 14,700 of them new to the bank, and counted more than 20,000 new-to-bank PPP customers a year later.⁴² The J.P. Morgan report credited the bank's early-2019 upgrade of its core loan systems and noted that PPP loans made up about 9 percent of Zions' assets, nearly twice the 4.7 percent median of the banks it covered.³

Pay for the PPP effort

Zions' 2020 annual report describes how it paid the staff who processed the loans: "We were also heavily involved in supporting customers with PPP loans, rewarding employees directly involved in the effort with meaningful incentives, and paying $1,000 bonuses to all our employees with salaries less than $150,000 for supporting this important effort." The same year the company made a $30 million charitable contribution, and net earnings applicable to common shareholders fell 35 percent, to $505 million.⁴

Senate letter, agents' suit and Main Street

On April 23, 2020, Senate Small Business Committee Chairman Marco Rubio wrote to Zions Bank and eleven other large banks asking whether they had taken PPP applications first-come, first-served or through filters that favored certain borrowers.⁵ Zions Bancorporation, N.A. was among the defendants in ImpAcct, LLC's agent-fee class action in the District of Colorado, No. 1:20-cv-01344, with KeyBank, JPMorgan Chase, Bank of America and Wells Fargo.⁶ The Judicial Panel on Multidistrict Litigation declined to centralize the agent suits on August 5, 2020.⁷

Zions sold 20 loans into the Federal Reserve's Main Street Lending Program; the program's participations in them came to $140.5 million, 24th of the 320 lender entries in the Fed's disclosure.⁸

In the fraud files

A federal information in Utah charged that applications for Epic Rentals UT LLC overstated its payroll and employees and misstated its ownership and the applicant's criminal history. It states that Zions Bank funded and then cancelled a $198,800 loan to the company, while another Utah lender funded $239,091.67.⁹

Sources

1. Zions Bank PPP lender page, computed from SBA PPP FOIA loan-level data. Original: https://data.sba.gov/dataset/ppp-foia SBA PPP FOIA loan-level data (stored capture) ↩
2. Zions Bancorporation, N.A., Form 10-K for 2021 (filed Feb. 25, 2022). Original: https://www.sec.gov/Archives/edgar/data/109380/000010938022000072/zions-20211231.htm ↩
3. J.P. Morgan, Mid- and Small-Cap Banks Tech Disruption report (Dec. 15, 2020). ↩
4. Zions Bancorporation, N.A., Form 10-K for 2020 (filed Feb. 25, 2021). Original: https://www.sec.gov/Archives/edgar/data/109380/000010938021000082/zions-20201231.htm ↩
5. Senate Small Business Committee, "Rubio Sends Letters to Large Banks Participating in the Paycheck Protection Program" (Apr. 23, 2020). Original: https://www.sbc.senate.gov/public/index.cfm/pressreleases?ID=D1C1F214-DEA1-4F78-8D13-C95B7904BD7A ↩
6. Schedule of Actions, In re Paycheck Protection Program (PPP) Agent Fees Litigation, MDL No. 2950, Dkt. 1-2 (J.P.M.L., filed May 22, 2020). ↩
7. Order Denying Transfer, In re PPP Agent Fees Litigation, MDL No. 2950, Doc. 356 (J.P.M.L. Aug. 5, 2020). Original: https://storage.courtlistener.com/recap/gov.uscourts.jpml.1161172/gov.uscourts.jpml.1161172.356.0.pdf ↩
8. Main Street Lending Program: 25 banks by participations sold. ↩
9. Felony information, United States v. Douros, No. 2:20-cr-00259 (D. Utah), Dkt. 1. Original: https://archive.org/download/gov.uscourts.utd.121401/gov.uscourts.utd.121401.1.0.pdf ↩