Good day, ladies and gentlemen, and welcome to your Zions Second Quarter Earnings Results Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded. I would like to introduce your host for today's conference, James Abbott, Director of Investor Relations. Sir, you may begin.

Thank you, Esther, and good evening. We welcome you to this conference call to discuss our 2016 second quarter earnings. Our primary participants today will be Harris Simmons, Chairman and Chief Executive Officer; Scott McLean, President and Chief Operating Officer; and Paul Burdiss, Chief Financial Officer. I would like to remind you that during this call, we will be making forward-looking statements, although actual results may differ materially. We encourage you to review the disclaimer in the press release or the slide deck dealing with forward-looking information, which applies equally to statements made in this call. A copy of the full earnings release, as well as a supplemental slide deck, are available at zionsbancorporation.com, and we will be referring to the slides during this call. The earnings release, the related slide presentation, and this earnings call contain several references to non-GAAP measures, including pre-provision net revenue and the efficiency ratio, which are common industry terms used by investors and financial services analysts. Certain of these non-GAAP measures are key inputs into Zions' management compensation and are used in Zions' strategic goals that have been and may continue to be articulated to investors. Therefore, the use of such non-GAAP measures are believed by management to be of substantial interest to the consumers of these financial disclosures and are used predominantly throughout the disclosures. A full reconciliation of the difference between such measures and GAAP financials is provided within the published document, and participants are encouraged to carefully review this reconciliation. We intend to limit the length of this call to one hour, which will include a question-and-answer section. We ask each of you to limit your questions to one primary and one related follow-up question, in order to enable other participants to ask questions also. I will now turn the time…

Absolutely. Our first question comes from the line of Geoffrey Elliott with Autonomous Research. Your line is now open.

Hello. Thank you for taking the question. Could you give a bit more detail about the growth in commercial real estate that you saw this quarter? Are there particular geographies that have been driving that? Are there particular types of loan, and it looks like the yield stepped up a bit, so where would be opportunities to add yield? Thank you. Harris H. Simmons - Chairman & Chief Executive Officer: Go ahead. Michael P. Morris - Chief Credit Officer & Executive Vice President: This is Michael Morris. I'm the Chief Credit Officer. I'll comment on that briefly. The term commercial real estate growth that we saw in Q2 was driven partly by slower paydowns, some conversion of construction to term loan and other value-add transactions in the income property space, all of which are well underwritten, safe DCRs, well-defined and lower LTBs (28:24), equity and transaction. So it was a little bit unusual, but we're very satisfied with the credit quality of that particular portion of the loan growth in CRE.

And, Geoff, this is James Abbott. I just might add a couple, we looked at the underwriting statistics of the production for the quarter, and just kind of as a general comment, the average loan-to-value was in the mid-50%s, and the average debt service coverage ratio would be around two times coverage, so very good underwriting statistics on the growth that we did see, but again, as we mentioned earlier, we're concerned about too much in one vintage (29:05) or one particular loan classification. Scott J. McLean - President & Chief Operating Officer: Geoff, this is Scott. I would also note that geographically, there was really nice dispersion across California, Arizona, and Nevada and Washington, with a small, modest amount of growth in Texas on the term side, but the term has been pretty well-balanced across the portfolio.

And the step-up in yield on CRE? Michael P. Morris - Chief Credit Officer & Executive Vice President: Yes. I'll comment briefly on that as well. The capital markets have backed up a little bit in CMBS. Borrowers are finding it a little tougher to place CRE terms, so in response, the line bankers and the business units facilitating CRE have upped the pricing of the overall coupon.

Great. Thank you very much. Harris H. Simmons - Chairman & Chief Executive Officer: Thank you.

And our next question comes from the line of Joe Morford with RBC Capital. Your line is now open.

Thanks. Good afternoon, everyone. Harris H. Simmons - Chairman & Chief Executive Officer: Joe. Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Joe.

I thought it was a pretty solid performance on the fee side. Is it still early yet, or are you starting to see some results from some of your initiatives there? And, excluding the loan sale valuation thing you talked about, is this a pretty good base to build off, going forward here? Scott J. McLean - President & Chief Operating Officer: Joe, this is Scott, and, yes, I think our initiatives are showing nice progress. Our treasury management activities are still – it's our largest fee income stream. It's about 30%, and it's growing in the mid-single-digit to high single-digit rates, which is really good for that business. Our other bank card products, business card, consumer card, are growing at high single-digit rates, which is – we've talked about repeatedly over the last couple of years, basically trying to get the same sort of penetration in our other markets that we currently achieve for those products in Zions First National Bank, our bank in Utah. And then wealth management, which we've been concentrating on, it's growing high single digits. Mortgage, the fee income component is not growing, even though our origination volume is up, it was up 30% last year. Our origination volume will be up about 30% this year, but we are keeping more of that on the books, and consequently, it's not having the fee income benefit that we thought it would. But those would be just some things I would highlight.

Okay. And I guess, as a follow-up along those lines, I saw you purchased $104 million of loans or so in the quarter. I was curious what drove that decision, and do you see doing more of that going forward? Scott J. McLean - President & Chief Operating Officer: It was a modest purchase with a really strong correspondent that we have a lot of respect for. We are, as you know, still significantly underweighted on exposure to 1-4 Family, and even though we're originating really nice volumes with our mortgage initiative, we thought at least having this as an alternate source is a good thing. The yields are significantly higher than what we could buy into our investment portfolio, and the credit statistics are on par with our own originations, with yields principally on par with our own originations. So it's just a real nice relationship, and we'll probably continue it at a very modest pace. But it's clearly not a key driver of our results.

Yes, no, I understand. Okay. Thanks so much, Scott.

And our next question comes from the line of David Eads with UBS. Your line is now open.

Hello. Harris H. Simmons - Chairman & Chief Executive Officer: Hey.

Just kind of curious, obviously you've had good deposit growth, kind of kept the cash balance pretty high. At this point, how much further do you expect the cash balance to come down? Paul E. Burdiss - Chief Financial Officer & Executive Vice President: I'm sorry? Harris H. Simmons - Chairman & Chief Executive Officer: How much further do you expect the cash balance to come down? Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Oh, right. So, we're going to continue to work that down as we invest. Obviously, deposit ebbs and flows are going to impact that. It's hard for me to give you a precise number, although I will say that, despite the very good loan growth we've had in the first half of the year, we continue to be on track with respect to our investment portfolio target, which is purchasing another, sort of, $1.5 billion or so over the next two quarters.

Right. With respect to, if you keep having the deposit growth, would you expect to increase that? Or would you be kind of happy where that, you know, just getting to that point? Paul E. Burdiss - Chief Financial Officer & Executive Vice President: If the question is about the cash balance, I would expect to continue to whittle that down. Ultimately, as I said in my prepared remarks, I do expect for us to get into a position where we are going to incrementally go out and need to fund loan growth. When that happens, then you can assume that our cash balance has reached sort of its low point, and the point that we're most comfortable with.

Okay. Thanks. Then just a quick one on the mortgage book, or particularly in the (34:51), it looks like you kind of have broad-based growth in all the geographies. I'm curious, you know, is that just kind of a function of growing off of a low base? Or is there something you guys are, you know, doing to generate that loan growth in a – where most of the peers are struggling, to generate that loan growth there? Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Now, that's been kind of the focus of the very specific campaign to, that's been focused on home equity lines of credit. So I think you're seeing results of that kind of marketing push.

All right. Thanks. Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Yes.

And our next question comes from the line of Ken Usdin with Jefferies. Your line is now open.

Hey, thanks. Good afternoon. On the expense side, you guys are doing a great job and certainly marching towards that sub-$1.58 billion this year, and I was just wondering, you gave that plus-$1.58 billion number for next year a long while ago and you've tracked so much better already. Just wondering what kind of line of sight you have on that at this point and if you think you can maybe have more flexibility than you had originally thought on any increases that would have come after this year? Scott J. McLean - President & Chief Operating Officer: Right. This is Scott. And basically what we said was $1.58 billion for this year, slightly increasing in 2017, and I think fundamentally we feel we're going to be able to stay fairly close to the $1.58 billion next year as well. So we're continuing to find new ways to reduce expense in light of – and fund those areas that are growing.

Yes. And has... Harris H. Simmons - Chairman & Chief Executive Officer: I expect we'll have a little more to say about it as we get closer toward the end of the year, so I would agree with what Scott just said. I mean I – to the extent that it's north of $1.58 billion, it won't be much in excess of that, maybe better than it, but I think it's a little early still.

Yes. Okay. Well, I'll ask my follow-up just related to it, which is if you were to do better than it, do you think it's because you're finding more or is it because the cresting of some of the prior spend is just coming in better than expected? Scott J. McLean - President & Chief Operating Officer: I think it would principally be because we're finding more opportunities to simplify how we do business, and those opportunities we're digging into literally every day, we have been. The adoption of common practices in back office activities and middle office activities is just continuing to show us opportunities to reduce cost. So it'll be more related to that than any kind of cresting of previous activities.

Okay. Understood. Thank you.

And our next question comes from the line of Marty Mosby with Vining Sparks. Your line is now open.

Thanks. Good afternoon. Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Hi, Marty. Scott J. McLean - President & Chief Operating Officer: Hey.

Wanted to ask you, as you think back over the last year in your incremental purchase of $5 billion, how much do you think you've increased the benefit from that versus doing it today? So since you had higher rates over the last year, if you're looking at 10 basis points for every $5 billion, it would be $5 million that you'd be able to generate annually. So how much do you think now you're buying compared to what you were buying yield about a year ago? Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Are you asking about the incremental yield of bonds we're putting on?

The difference between what you bought over the last year and what you're buying today. Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Yes. There are a couple of things there; one is rate and one is volume. And I think you can probably look at MBS rates in the marketplace or kind of the 5-year treasury and kind of come up with an estimate of that differential in yield, between what we're buying then and what we're buying now. The other thing I would point out, though, and I'm sure you've noticed, is that we bought a lot of bonds in the second half of last year. We did okay in the first quarter; in the second quarter, we really slowed that down. We slowed it down because of the shape of the curve, and I think we've been pretty clear about telegraphing our intentions. While we need to continue to put money to work, we are going to try to be thoughtful around the timing of those purchases. And I think your question kind of points specifically to any incremental value we may have created there. So I can't give you kind of a specific dollar amount, Marty, but I think it's probably pretty easy to triangulate on, when you look at the change in the market and the volume of what we bought over the course of the last year.

Yes. When I triangulate it, I get $20 million to $25 million annual earnings that you actually generated by starting about a year ago. So the other thing I was wondering is it looks like you're starting to use a little bit of municipals. Is that something you're adding more of? Or are you finding some opportunities there? It'd be kind of an interesting little twist on what you've been doing in the securities portfolio and kind of alleviates some of the pressure on yields that you would be getting right now. Paul E. Burdiss - Chief Financial Officer & Executive Vice President: We have a very long and successful history in dealing with municipalities and providing credit to the local markets. This is critically important to what we do as a very locally-oriented bank. I think we're successful across our footprint, have been for a very long time, decades, and continue to be. So I think that what you're seeing there, Marty, is just a continuation of the success that we've had as an organization. Harris H. Simmons - Chairman & Chief Executive Officer: I would add that it is something that we are very focused on trying to step up somewhat, and do more of this particularly with smaller municipalities, where we think the risk/reward kind of trade-off is quite nice. And whereas Paul indicates, we have a very long, solid track record. So yes, there's some focus there. The growth you're seeing isn't primarily a result of that push yet, but I'm hoping that over the next couple of years, you'll start to see more of them.

And then, Harris, one last question. When you look at the excess capital, we estimate it to be about $1 billion. Now that we're going into the next phase, which is being able to pull some of that capital and give it back to shareholders, if you had a free rein, let's say we went back to the days where you could pretty much look at your excess capital and do something with it, it would add 150 basis points to your returns if you could deal with that $1 billion. What would you do if you didn't have the constraints that you have today? I mean how would you strategically deal with that at this point? Harris H. Simmons - Chairman & Chief Executive Officer: Well, I think the first thing I'd say is clearly this, the world has changed a lot from the days when you had free rein. But you're posing a hypothetical. I guess I would say, clearly, we would use everything we've done in building capabilities to stress test in a model to think about risk particularly in a downturn, to inform how we think about capital, and there are a lot of things that we have built risk management-wise here in the last five years or six years or seven years that I think are actually really useful tools. Yes. I think we would agree that we got more capital and we're at the north end of where our peers are. I would note that we'll always want to be probably kind of to the strong side so long as we have somewhat higher exposures to both commercial real estate and energy. We know that those are both segments where you can see maybe a little more cyclicality than some other things. And so this – if you took all of the limits off, this wouldn't be a race to the bottom, if you will, in terms of draining the capital. But we want to kind of thoughtfully try to right size our capital and to grow into it, and I think we've got – it gives us a lot of flexibility in terms of what we can do. I don't know, I hope that's helpful. We know that we have more preferred than we probably need right now. That's something we've talked about and that we continue to opportunistically deal with, but on the common equity too, we're heavy and that's something that increasingly I think you'll see us working at. It's very much on our minds.

Thanks. Harris H. Simmons - Chairman & Chief Executive Officer: Yes.

And our next question comes from the line of Paul Miller with FBR & Company [Capital Markets]. Your line is now open. Paul J. Miller - FBR Capital Markets & Co.: Yes. I'm following a question on capital. I mean, you've done a great job over the last 12 months, 18 months getting your expenses down, getting the preferred down and whatnot, but your ROEs – and you do have more capital, I think, than you need, but your ROEs tend to still be stuck in that middle single-digit, and some of that I think is the credit costs associated with the oil and gas. But what is your ultimate goal? What is your ultimate goal relatively speaking with your ROEs, to get it into the – how are you going to get it into the 10% to 12% range? Harris H. Simmons - Chairman & Chief Executive Officer: Well I think, and I'd say that our goal is, over the next couple of years, to get it up into up around 10%, and we think that that's doable. There is some additional reduction in preferred that will help. I mean, obviously the cost of preferred is a drag on the ROE. I would expect that as we continue to see better results through CCAR, that we'll be able to be a little more aggressive in our capital repatriation ask. And then there's still a lot of operating leverage. I think it's really important to focus on what we're accomplishing. If you look at pre-provision net revenue as operating leverage that you see playing out over the last few quarters, it takes not a whole lot of additional work in that area to start to make a real difference. And then finally, I would say that as we get through…

Thank you.

And our next question comes from the line of Brad Milsaps with Sandler O'Neill. Your line is now open. Brad Milsaps - Sandler O'Neill & Partners LP: Hey. Good evening. Harris H. Simmons - Chairman & Chief Executive Officer: Hey, Brad. Brad Milsaps - Sandler O'Neill & Partners LP: I guess I'll ask maybe the first energy question, but just curious, Scott. I appreciate your comments on – it sounds like people became more positive, whether it be your borrowers or investors. We had a nice move in oil during the quarter, up close to $50. We've since come back I guess into the low $40s. What level in your mind, I guess, did you start to get concerned again, or do you think it starts to maybe lock – maybe create more gridlock or call into question maybe some of the deals that have been put in place thus far? Just kind of curious, any color around the more recent move, and I know it's been a short period of time, but just kind of curious what your thoughts would be there? Scott J. McLean - President & Chief Operating Officer: Sure, Brad. Happy to respond to that. The other thing that I would note, we don't comment about it enough, but natural gas prices also have rallied significantly since early March. Recall that they declined quite a bit in the fourth quarter of last year and through the middle of March. Oil prices really declined kind of January-February and the first part of March, and then both have really made a very nice recovery since then. I only note that because, recall that in our reserve-based lending activity, about 50% of the reserve is – I mean of the borrowing bases are natural gas reserves. So you really…

And our next question comes from the line of John Pancari with Evercore. Your line is now open.

Thank you, guys. Good afternoon. Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Hi, John.

On the loan production side, I just want to see if you can elaborate a little bit on where exactly are you intentionally tempering production, given concentration limits? I mean is it all term CRE, or is it certain types of CRE underwriting, and is it by market, and is there certain concentration measures that you're looking at? If you can help us with how you quantify that. Thanks. Michael P. Morris - Chief Credit Officer & Executive Vice President: Yes. This is Michael again. We have very well-defined concentration limits by asset class and asset types, and there are some historic assets that have proven not to do so well, and we obviously have low concentration limits set for those. We're not doing anything necessarily to stimulate production in any one of those categories. We think we might be a little heavy on multi-family, so we're tempering production there, both construction and term. And I hope that answers your question.

Okay. Yes, all right. So what parts of commercial real estate are you still willing to put on the portfolio? Michael P. Morris - Chief Credit Officer & Executive Vice President: Well, selectively, any transaction that has a really strong metric, solid sponsor, guarantor support, good market, deeper MSA that can prove as a worthy takeout source. The retail is obviously, the online sales, has kind of tempered our belief, and we aren't too excited about putting on a lot of new retail. Industrial is an asset class that is in favor right now to us, especially in the markets that we serve. Hospitality we have historically de-emphasized, but we do select hospitality transactions. I would say, anything that is horizontal development like A&D, land, lots, that aren't associated with homebuilder production and vertical construction, is an asset class that we're definitely steering away from. Historically it was in our mix, but today and going forward, it's a relatively small piece of the book.

Okay. That's helpful. And then, sorry if this was already discussed. I might have missed it. But just want to get your overall thoughts on the NIM trajectory here, in terms of, should we expect that, given where the new production is coming on and competitive pressures that we see erosion from here, or could you see some relative stability? Thanks. Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Yes, John, this is Paul. What I tried to convey in my remarks is that we've got some countervailing influences. One as you described is sort of the ongoing grinding of margins that we see, and that obviously adversely impacts the net interest margin. In our case, though, we are helped by the fact that we continue to deploy cash into our highly liquid investment portfolio. And the result of that obviously is no increase in earning assets, the denominator, but an increase in net interest income. So net-net, that's helpful to the margin. So as I was trying to say in prepared remarks, we're looking at maybe a couple of basis points, we think, over the next couple of quarters. But as you know as an experienced observer of banks, that can be pretty hard to predict sometimes.

Got it. All right. Thanks, Paul. Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Okay.

And your next question comes from the line of Jack Micenko with SIG. Your line is now open.

Hey. Good afternoon. You talked about turning a little more cautiously optimistic on energy. Commodity prices are up. I think your exposure is down. But the cumulative charge-off number, it looks like it's been walking up. I think you were $75 million to $100 million, end of last year, and then kind of $100 million to $125 million. And it looks like on slide 18, we're now looking at $125 million. So is it a frequency issue? Is it a severity issue? I'm just trying to figure out what's changed there to kind of move that number higher. Scott J. McLean - President & Chief Operating Officer: Sure, Jack. This is Scott. We had said $75 million to $100 million area. We comment on $125 million today. And as you noted, our energy net charge-offs were about $75 million through the first half of the year. And we're simply saying we think they will start to go down. We think they'll be less in the second half of the year. But it's very hard to know. We don't have a clear line of sight right now to those second half of the year charge-offs. We can see about half of them and then we're assuming others will materialize. So there is an opportunity for a favorable performance relative to the $125 million. The other comment that I think is really important is how does this fit, as both Harris and Paul noted in their comments, how does this fit in terms of our overall thoughts about net charge-offs this year. Recall that we guided to 30 basis points to 35 basis points, $125 million to $150 million in net charge-offs. And clearly our energy charge-offs are going to be larger than what we thought, but we've only had $1 million…

Okay.

That's helpful.

As to we're out of time on the debt part of the – so we'd like to take the last few questions, but just limit it to one question at this point, and we'll try to keep our answers concise as well.

Our next question comes from the line of Gary Tenner with D. A. Davidson. Your line is now open. Gary Peter Tenner - D. A. Davidson & Co.: Thanks. Paul, I was just hoping to clarify the comment you made on the margin. I would've thought that would be ongoing improving mix of earning assets that would certainly support stable, if not an expanding margin. Does that assume that the securities yields stay under pressure in the third quarter and fourth quarter, as they were in the second quarter from prepayment speeds? Paul E. Burdiss - Chief Financial Officer & Executive Vice President: Yes. That's precisely correct. Not only are we buying new bonds, which is helpful, but the bonds that we do have are prepaying faster. There's premium attached to those bonds that decrease in the yield, and that happens, as you know. And so there's a little headwind there that we're dealing with, in addition to ongoing kind of grinding tighter of credit spreads. Gary Peter Tenner - D. A. Davidson & Co.: All right. Thank you.

Our next question comes from the line of Terry McEvoy with Stephens. Your line is now open.

Hi. Thanks. Good afternoon. I was wondering if you could expand on the compensation comments, where you say tighter incentive comp is linked to achieving the efficiency ratio target. I guess on mortgage wealth management, that's pretty clear. So my question is, how are you driving your commercial bankers to be more efficient? Is it something that we can track on the balance sheet, the pricing yields? Or is it also a function of some of the fee businesses, capital markets, treasury, et cetera? Harris H. Simmons - Chairman & Chief Executive Officer: Well, I think what we're fundamentally referring to there is we've got an incentive plan that covers top, roughly 450 or so officers of the company, that is effectively very closely linked to how we do in terms of cost control and continuing to develop operating leverage, et cetera. But the cost control is just kind of a central theme to how we think about payouts under that plan. So some of you have heard me say before, but I'd tell all of our people here that every nickel they spend, consider it it's not coming out of shareholders' money, it's coming out of kind of the top 450 people in the company, because to the extent that we don't hit those targets, the funding for that incentive plan is reduced to the point that we do. So there's a very, very tight linkage in that respect.

Thank you. Harris H. Simmons - Chairman & Chief Executive Officer: Yes.

At this time, I'm showing no further questions. I would like to turn it back over to management for any closing remarks. Harris H. Simmons - Chairman & Chief Executive Officer: I just want to thank all of you for your time and for your interest, and we look forward to talking to you the next time we see you or next quarter. Thanks so much.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may all disconnect. Everyone, have a wonderful day.