Good day, ladies and gentlemen, and thank you for standing by. Welcome to Zions Bancorporation's First Quarter 2017 Earnings Results Webcast. At this time, all participants are in a listen-only mode to prevent background noise. We will have a question-and-answer session later and the instructions will be given at that time. Now, it's my pleasure to turn the call to your host, Director of Investor Relations, Mr. James Abbott.

Good evening, everyone. Thank you, Carmen. We welcome you to this conference call to discuss our 2017 first quarter earnings. To begin, we will hear prepared remarks from Harris Simmons, Chairman and Chief Executive Officer; and Paul Burdiss, Chief Financial Officer. We are also joined by Scott McLean, President and Chief Operating Officer; Ed Schreiber, Chief Risk Officer; Michael Morris, Chief Credit Officer, as well as other Zions executives who are available to address your questions during the question-and-answer session. 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. 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 prominently throughout the disclosures. A full reconciliation of the difference between such measures and GAAP financials is provided within the published documents, and participants are encouraged to carefully review this doc reconciliation. We intend to limit the length of this call to one hour. During the question-and-answer section of the call, we ask you to limit your questions to one primary and one related follow-up question to enable all the participants to ask questions. With that, I will now turn the time over to our Chairman and CEO, Harris Simmons.

Thank you very much James and welcome to all of you today to our call to discuss our first quarter results. I'm going to go to the slides that accompany the earnings release on slide 3 are some highlights for the quarter. I would characterize the quarter as a healthy performance in terms of deposit growth and containment of the cost of deposits and credit performance with the exception of one large loan that I'll discuss more in a few minutes. At the same time, we're not entirely satisfied with total loan growth although we did outperform the industry relative to the December level. I'll cover the rest of the key indicators listed on this page as we move through the presentation. On slide 4, our adjusted pre-provision net revenue reflects steady improvement, up 17% year-over-year, the result of both solid net interest income growth which increased 8% over the first quarter a year ago, and expense controls that limited adjusted noninterest expense growth to 3.8%. Much of the improvement in the net interest income came from the growth of income from the securities portfolio, as we worked to trim our asset sensitivity in exchange for more income today, while simultaneously reducing risk. Looking forward, we expect that interest income on loans will shoulder more of the burden of growth for 2017 and beyond. Year-over-year, GAAP noninterest expense increased 4.5%, while adjusted noninterest expense increased a lesser 3.8%. I'm encouraged that salary and benefits excluding severance only increased about 1% over the year ago period. Outside of our direct control, we experienced a more than 70% increase in deposit insurance costs as the FDIC instituted a surcharge to rebuild the Deposit Insurance Fund. Turning to slide 5, we posted an efficiency ratio of 65.9% in the first quarter, declining 2.6…

Thank you, Harris, and good evening, everyone. I'll begin on slide 9. For the first quarter of 2017, Zions reported net earnings applicable to common shareholders of $129 million, or $0.61 per share, up from $0.38 per share in the year ago period. There are some items within this quarter that are lumpy including securities gains and dividends primarily from Small Business Investment Company investments adding to about $7 million in the quarter, severance expense of about $5 million, and income tax benefits that include a one-time adjustments to state taxes of about $14 million in addition to a $4 million benefit from the tax – in the tax line related to the new stock-based compensation accounting guidance. We've adjusted pre-provision net revenue. We've highlighted adjusted pre-provision net revenue which increased 17% from the year ago period, as Harris discussed earlier, although it dipped slightly from the prior quarter primarily due to seasonal factors. The last item highlighted on this page is the efficiency ratio, which as Harris has already discussed in detail. Let me make a few comments about revenue first, about three quarters of our revenue comes from net interest income primarily driven by loan and securities growth, coupled with solid customer related deposit funding. Slide 10 depicts the recent trend in net interest income, which continued to demonstrate growth in the first quarter. On a year-over-year basis, net interest income was up 8%. I'll highlight the key volume drivers of this revenue item first and then discuss the rate component. The most significant factor in the year-over-year increase in net interest income is the $7 billion period end balance and $6.2 billion average balance, increase in investment securities. If you'll turn to slide 12 (sic) [slide 11], as we suggested at our January report, we continued to…

Certainly. And our first question is from the line of Brad Milsaps with Sandler O'Neill. Your line is now open. Bradley Jason Milsaps - Sandler O'Neill & Partners LP: Hey, good afternoon.

Hi, Brad. Bradley Jason Milsaps - Sandler O'Neill & Partners LP: Paul, just wanted to ask a question about the balance sheet, maybe specifically the bond portfolio and the overall size of it. What's kind of your biggest driver there? Is it the rate environment or do you look at it as a percentage of earning assets? It looked like this quarter you maybe added some leverage through some borrowings maybe to support the bond portfolio. Just curious, would you continue to do that if rates move further in your favor, or kind of what your thinking would be around kind of a larger bond book?

The size of the portfolio, as we've discussed previously, the size of the portfolio has really been – and the increasing size of the portfolio has been based upon our need due to the change in liquidity rules and other things to maintain a permanent store of liquidity on the balance sheet. That's kind of primary. Secondary is, the management of interest rate risk as you alluded to, and sort of converting possible income into certain income in the current period. So, all of those items have conspired to increase the size of the portfolio. And as I said in my prepared remarks, we do not expect, Brad, for the securities portfolio to increase really from the March 31 levels. Bradley Jason Milsaps - Sandler O'Neill & Partners LP: Okay. Great. And then just one follow-up, maybe for Scott, I know all the energy metrics, they're moving the right way. But I did notice the ratio of non-current NPLs in the energy books slipped from maybe 86% to down to 73%. Do you read anything into that, anything to be concerned about there? Is that just kind of getting down to the – maybe the worst NPL that you got in that book, or any other trends you're seeing there that we should be concerned about? Thank you.

Thank you, Brad. Specifically no, I'm not worried about the decline in that ratio. It's actually still higher than that ratio for our entire portfolio. So, it was unusually high to start with, unusually favorable to start with, and the decline is not something we're concerned about. As Harris noted, and Paul as well, the fundamental conditions in the industry are improving. You can see that externally in the first quarter earnings releases of Schlumberger and Halliburton. Access to capital is really good both through public markets, sales, private equity firm interaction. And so we're going to continue to watch the portfolio very closely. But all the trends are really positive with the exception of the one statistical trend you noted and the fact that NPAs were up slightly, but we're seeing good solid improvement. Bradley Jason Milsaps - Sandler O'Neill & Partners LP: Very good. Thank you.

Thank you. And our next question is from the line of Geoffrey Elliott with Autonomous Research. Your line is now open.

Hello. Thank you for taking the question. On the reduction in asset sensitivity, can you give us a sense of how much further you'd like to continue bringing that down?

Hey, Geoff. This is Paul. I'll take that. We have managed that down over time, and I think again over time, we will continue to see that decline. Although, I'll say that the pace is a little undefined and we'll be opportunistic based on what we see as kind of the shape of the curve and sort of the relative value. As mentioned, the securities portfolio isn't really going to grow from here, and so any incremental management of our balance sheet positioning, our interest rate risk positioning, will really be managed through the swaps portfolio. And as you know the curve is relatively flat today, but not to say that we won't continue to manage that down. But ultimately that's going to be an Alco discussion item and we haven't really provided a whole lot of guidance on the pace of continued reductions in asset sensitivity.

Thanks. And then just to follow-up on that, last quarter you talked about moving away from the fast and slow disclosures to something more consistent with what most peers are giving just kind of a single number, and then sensitivities around that. Where have you got to with that process?

Yeah, Jeff. Thank you for remembering that and for that question. We are – as you would imagine, any change like that requires a lot of model redevelopment and that requires a lot of data analytics and a lot of validation and other items. And so we have worked through that process almost entirely at this point. And so, I would expect to see that no later than the next quarterly disclosure.

Great. Thank you.

Okay.

Thank you. And our next question is from the line of Marty Mosby with Vining Sparks. Your line is now open. Mr. Mosby, your line is open.

Good afternoon, can you hear me now?

Yes.

Yes, sir, Marty.

Perfect. I just want to do a little bit of ticking and time (30:32), because you do have a lot of pieces that you kind of threw in there. It seems like to me when you start off with the $0.61 and you take the security gains and the severance, they kind of offset each other. And then you start looking at the tax adjustments versus the bigger charge-off and you get a little bit of a net pull down of a couple of pennies, and then you start to add back the seasonal expenses as that starts to roll forward. So, what I'm looking at it and you're looking at the efficiency ratio improving from first quarter to second quarter, while you could look at the security gains and the tax adjustment isolated from the other pieces and think, well, maybe you need to round down in earnings, really when you kind of look to these moving pieces, you can see a step-up even from the reported number as you move into the second quarter, and just wanted to kind of get a feel for how you see those moving pieces all come together like that.

Hey, I'll start and look at my compatriots to kind of add some color. Marty, this is Paul. The – first of all as you know, there's a lot of focus on GAAP reporting and so, we just want to ensure that our investors understand the GAAP financials which is what we reported. As you said, there are a lot of moving parts, and for me personally, it would be I think hard for me to provide sort of an – a near-term quarterly outlook. As you know, our outlook is really more of a – kind of a 12-month nature. We try to provide all the pieces that will allow our investors to kind of look through and sort of decide what's important and what's not important on a quarter-to-quarter basis. And so I don't know that we can give a whole lot more guidance in addition to that.

It just feels like that as you look at the reported number, if you do kind of take into account all those pieces that we talked about that there is the opportunity the step-up from here as further efficiencies and seasonality comes out in the next couple of quarters, because that efficiency ratio was 65% and you're low – going to the low-60s. That's a pretty big step-up in profitability just there.

Yeah. And so, we Marty this is Scott, we would anticipate though as has been indicated that we're going to – we're staying on track with our efficiency ratio objective in the low-60s and expense growth in the 2% to 3% range. So, there's a lot of – there are so many moving parts and I think we highlighted very specifically the expense difference between the first quarter and the fourth quarter of last year, a lot of that is very one-time oriented. The other – there are other changes too in areas like fee income where we had some, what I would describe as sort of one-time events in the first quarter of last year and then there's seasonality that you pickup in the first quarter too. And so there are a lot of moving parts and I think our messaging would be that we feel – continue to feel confident about the projections that we've given, the guidance that we've given about efficiency ratio and expenses.

And then Paul you mentioned that the securities portfolio would start to kind of stabilize. When we talked before you've talked about kind of now transitioning to a little bit more use of interest rate swaps as a balancing factor in the sense of asset sensitivity. So, do you feel like you're going to start transitioning there and start adding a little bit more in the swap book as you move forward?

Well, yeah Marty, clearly as I said, the securities portfolio we just don't expect to grow from here. So, to the extent the Asset Liability Management Committee here continues to manage our interest sensitivity down and my expectation is that will happen. But I'm kind of one of many votes, but my expectation is that over time we will continue to manage our asset sensitivity down and swaps are the next tool in the tool box after we've exhausted the use of the securities portfolio. So, kind of a squishy answer to your question Marty because we haven't provided a lot of guidance on that topic specifically. But I think generally the direction that you laid out is correct and the direction that we've discussed previously is correct. And that is, once the securities portfolio has been sort of fully bought out, we will look to the next tool in the tool box which is interest rate swaps as we think about continuing to manage down our interest sensitivity.

And just the impact of restructuring doesn't end with the portfolio. You have another tool that you'll be able to start using so, thanks for your answers, appreciate it.

Yeah. Thanks, Marty.

Thank you. And our next question is from the line of Dave Rochester with Deutsche Bank. Please go ahead. Your line is open.

Hey, good afternoon, guys.

Hey, Dave.

Good afternoon.

Could you guys give some of the numbers behind the factors that put downward pressure on the loan yield this quarter? You mentioned the lower accretion, the lower prepays et cetera, any numbers you can give there?

Well, what I can say is, there's a lot of little things that kind of add up to something significant. There's the kind of the headwind of reduced kind of FDIC related contribution. That was probably a couple of basis points. We had kind of non-accrual related items, interest reversals that were also a couple of basis points, maybe 1 basis point on that, 1 to 2 basis points prepayments or maybe 1 basis point. So it's a bunch of little things, Dave, that kind of add up into that headwind that I tried to describe, which is why I didn't break it out more eloquently in my prepared remarks, because there's a bunch of dogs and cats in there.

Right. No, I appreciate the color. I'm just trying to get at basically where the loan yield can go from here with the March rate hike. It sounds like that can move decently higher versus the change that you saw in the first quarter, so just any thoughts there?

Yeah, Dave, that's why we've tried to provide – we've got some new color as you know, as I'm sure you've noted from slide 13 of the earning slides.

Yeah.

Where we're being a lot more specific around sort of the index and the timing of reprice. So you can kind of take a look at that. The other thing I'll notice is or I'll note that we've got swaps and floors in there. The swaps portfolio relatively modest at I think it's $1.4 billion. We've also got some caps in there. A lot of those caps are actually at 100 basis points on LIBOR. So the next rate move, we expect most of those caps to no longer be in the money. So there's several factors that to your point, we expect with the next rate move to continue to be additive to net interest income and certainly as it relates to the March move, we have yet to see that fully priced through here in the first quarter.

And Paul, where are your new loan yields post the March hike in your securities reinvestment rates, can you just talk about those? Thanks.

The securities reinvestment is probably 2.25ish, which hasn't changed a lot because the yield curve, as you know, has stayed fairly flat even if the short rates have come up. New loan yields are on the floating rate stuff will be a little bit higher. The fixed rate stuff just aren't going to change a lot because, as you know, the fixed rate – fixed rate part of the curve just hasn't changed much.

Yeah, Dave this is...

Would you say new loan yields are – go ahead. Sorry.

This is James. I'll just add a little bit. The coupon of the portfolio of the loan production during the quarter was just on a touch under 4% for the quarter, and that's up about 15 basis points from the prior quarter. That's obviously not the production we had in the very last week of December – I'm sorry, the very last week of March. But it is – does give you some sense as to where we were for the quarter on average.

Would you say that just given the production today, that's above where the book's yield is on well the loan side, James?

Yeah. It's – it is – well, the whole book yield is moving up because of the variable rate nature of the book.

Yeah.

So, yeah, it's...

But the loan – average loan yield is 4.14% in the quarter, right.

Yeah.

Right.

And so, the other thing to consider, Dave, is the kind of the composition of the portfolio, what's growing and what's not. So, residential mortgages for example have a lower overall rate than the total portfolio yield, so – and we are growing that. So I think you – there are several factors to consider, just thinking about trying to look forward at the loan yields.

Yeah. Great. Thanks guys.

Yeah.

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

Good afternoon.

Hi, John.

Back to the margin on the loan yield again, the – I know you mentioned, Paul, the 40% of your loans float with prime or LIBOR inclusive of your floors and everything. If you did ex the floors and swaps, what is that variable rate percentage? And then separately just wanted to see if you can kind of give us more of an overall thought process around where your margin, what type of trajectory you could expect this – through the end of the year?

Sure. I'll start with the first question. Again referring to slide 13, you can see, John, we've tried to break out so for example all prime and one month LIBOR floating rate loans are about 47% – or 47% of the portfolio. We showed the effect of hedges and floors there. That's what gets you down to the 41% or about 40% as I said in my remarks. So, that 47% I think is the number that you're looking for, which is sort of a 30-day reprice. When you add up all the pieces though and kind of go down the list, you've got two to three months LIBOR, 6 to 12 months LIBOR kind of all those pieces together and you can see there's kind of a 66% that's tied to those shorter-term indices.

Okay. And how did that gross number change quarter-to-quarter, that 46% number?

It hasn't really changed a lot. I think what we've disclosed in the past, John, which is why we tried to provide some incremental disclosure this quarter, is more of the sort of what floats under a year and that gets us to that kind of 60% to 66% sort of number. That's the number that we've talked about, because for a long time rates just weren't changing, so it was kind of an academic exercise. Now that the target rate is changing with a little more frequency, we thought it important for investors to understand kind of where the key points were in the portfolio, as it relates to interest sensitivity, which is why we've provided this incremental breakout. So the short answer is, it hasn't really changed, but we're just trying to provide a little more detail to be a little more transparent as it relates to the floating rate nature of the portfolio.

Okay. Thanks, Paul. And just as a follow-up on credit, the charge-off, I know you couldn't talk too much more about it. But could you just give us what sector, what industry it is? And then separately the inflows into non-accruals looked relatively elevated given that NPAs are up despite the big charge-offs, and what drove that?

It's a healthcare related credit. I don't know if Michael if you want to say anything more about it?

Well, no. All I'd say is that, it's an isolated event. It's non-systemic we believe. And we don't believe that it represents or is reflective of any other adverse trend in healthcare, if that's helpful. And then on the NPAs, slight uptick in NPAs for the quarter, some positive things already in the works this quarter. So, no real concern around that uptick and no real specific industry to point to.

I mean it was though a little bit more of an uptick when you consider the big charge-off though, right?

Yeah. Although – it wasn't nonperforming at the end of December.

Right.

It was a performing loan at December, John.

Okay. All right. All right. Thank you.

Thank you. And our next question comes from the line of Steven Alexopoulos with JPMorgan. Your line is now open.

Hey, good afternoon, everybody.

Hey.

I wanted to ask on expenses. If we look at the $411 million of adjusted expenses in the quarter and we think about the run rate for the second quarter, Paul, if I look at the three items you're calling out on slide 16, so the $7 million of stock-based comp, $6 million of payroll taxes, and then $4 million contribution to the 401(k)...

Yeah.

...can you walk through how much of each of those should come out of the run rate in 2Q?

Well, the way I think about it is this, and this is kind of one way to think about it. But these are sort of annual expenses and so you've got sort of a full-year's effect have all shown up in the first quarter effectively. So these items, the reason we call them out specifically is that these are not items that we would expect to show up again in the second quarter.

Okay.

I think the math of it is basically if you take three quarters of that number and subtract it from $411 million, it gets you to where the run rate probably should be.

Right.

Got it. Okay. Thank you. And then just one follow-up, many banks here are calling out a need to ramp their tech spend, and you guys have obviously invested very heavily in technology over the past few years. Are you, in your mind, ahead of the curve or do you also need to ramp your spending in tech here to think about digital...

I hope so.

...and some of these other things?

I think we believe we're ahead of the curve. Because we're trying to address our core loan and deposit systems, which for literally almost every other bank in the United States are 25 to 30-year old systems. And it is a many year project to address both of those. And the primary pressure driving that is obviously the pace of technology change, but the onset of the digital – just the digital requirements of customers and everybody that we interact with. And so you fundamentally cannot take 20 to 30-year old core loan and deposit systems and adapt them to a digital world. You just – the money you would spend on middleware would be astounding. So we're trying to address the core problem. Cyber security is also another key driver of this, and I think the industry as a whole is driving hard in terms of technology spend around cyber. But almost all banks have put off this investment in core and we are well into that process right now.

Okay. That's good color. Thanks, guys.

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

Thanks. Guys, wondering if you could just talk a little bit about deposit pricing. It was obviously very stable and you didn't really have any change this quarter. But any competitive dynamics or just a notable sense of change in your client base?

Hey, Ken. It's Paul. I'll start and ask anyone else to sort of join in. I was at a conference – I spoke at a conference here in the last quarter, and we talked a lot about deposit pricing, and kind of how – my opinion is that the liquidity coverage rules are kind of defining (46:36) deposit value right now. And I think there we are starting to see that impact deposit pricing. So I'll just remind everyone on the call that our portfolio, deposit portfolio looks a lot different. It's very granular, it is commercially oriented. It is very sort of client-based and deep relationship-based deposits. And so, we are not seeing, and I'm not hearing of pressure on those deposits yet. So, we're keeping an eye on it, and we've got our ear to the rail as we think about that. But in fact, so far we're just not feeling a lot of pressure on deposit price.

Okay. And then secondly, just wondering in terms of funding the securities purchases, you had a big increase in the short-term borrowings which you said you might use, but the cost of those borrowings actually went up a good amount off of a low base. Now that you're approaching more of a level set for the investment portfolio, do those borrowings level out? Because you're kind of paying a little bit more incrementally for the borrowings than you are getting, at least in this quarter incrementally on the securities.

I don't think we're paying more on the borrowings than we're earning on the securities. The securities are yielding over 2% and the borrowings are I think around 80 if I remember correctly. I can pull it out if you want.

I'm talking about sequentially. I'm talking about the delta, sorry, the delta between the two, not – you're right, of course there's a margin on them, but I meant the delta between your securities was up 20 basis points, but the borrowings was up 35 basis points.

I'm sorry, I misunderstood your question.

No problem.

Yeah. So, in order to really affect interest sensitivity, we basically need to invest long and borrow short, and that's kind of what you're seeing there. I mean, that's ultimately sort of the driver of the interest sensitivity change. And ultimately the net value or the net volume we have associated with that incremental funding, is just going to be heavily dependent on kind of loan and deposit growth. And that, as you know, is sort of the balancing mechanism, as is the investment portfolio. So as we move through time, as everyone has heard me say previously, deposits really drive the value of a banking franchise and so deposit – incrementally, deposit growth is going to largely drive the incremental need for funding clearly, as we think about loan growth increasing throughout the rest of the year.

Okay.

And so (49:11) deposit growth, that short-term funds will be affected. But I'll also remind you that we can also manage the investment portfolio as sort of a balancing factor also.

Got it. Thanks, Paul.

Thank you, Ken.

Thank you. And our next question comes from the line of Ken Zerbe with Morgan Stanley. Your line is now open. Ken Zerbe - Morgan Stanley & Co. LLC: Okay. Thanks. Actually, I had sort of a similar question, just on the $2.9 billion of short-term borrowings. So Paul, are you saying that this – that ultimately this gets replaced with core deposits as it grows or is this like just an intentional strategy to add – whatever it was $2 billion plus worth of short-term borrowings and maintain it on your balance sheet to make sure that your asset sensitivity stays low?

I will characterize this as an intentional strategy. As a bank, and as you know, it is completely normal to be in sort of a net borrowed position. And so, we kind of – over time, we've had so many deposits that we haven't had that line item on our balance sheet in quite some time. I'm frankly very comfortable with the level of kind of that incremental wholesale borrowing of $3 billion on our balance sheet. I think it is totally normal and I'm completely comfortable with it. So I would characterize it as clearly intentional. Ken Zerbe - Morgan Stanley & Co. LLC: Got it. Okay. And then just a follow-up, on the non-customer related fees, so the $17 million that you got this quarter. That, I guess, combined numbers has just been all over the place. Is there any right number that we should think about going forward, is any part of that sustainable or recurring or is that all just insanely volatile? Thanks.

There is a lot of – there is volatility in that. As I laid out, what I tried to do in my prepared remarks were to talk about kind of some of the key items that were impacting that. And at the very beginning of my prepared remarks, you may recall I said securities gains and dividends, this is largely driven by the Small Business Investment Company investment, we're about to add at about $7 million this quarter.

And I would just add, Ken, this is James, that it's – one of the major sources of volatility over the last several quarters, I think three quarters now, has been a singular investment, which is actually a publicly traded company at this point. And so, it's not Level 3 accounting. It is observed prices in the market, and it is an investment that we've been involved in for years. And so, that's unfortunately the stock market is volatile from time-to-time and it's just – we've just – you've just seen the result of that.

And I'll just say, since James brought it up, it is a publicly traded investment. And it's not our practice to kind of hold on to those for extended period of time. So, we are – this is again out of our SBIC portfolio. It blossomed into a publicly traded company, which is a great outcome. And now, we are kind of disposing of that investment as quickly as we can. Ken Zerbe - Morgan Stanley & Co. LLC: Got it. Okay. Thank you.

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

Hey. Good afternoon. There's been a ton of questions about kind of the nitty-gritty on NIM and NII and maybe just kind of circling back, I guess the overall arching theme that you guys are talking about is sort of mid-single-digit-ish NII growth for the four quarters ending 1Q 2018 versus 4Q quarter – four quarters ending 1Q 2017, correct? And when I, I guess, when I look at the details that 1Q 2017 was up about 8.5% year-over-year, it looks like there's a couple of tailwinds sequentially for NII in 2Q from the balance sheet growth led (53:10) securities at the average securities coming on and then some benefit from loan yield. So I guess the bottom line, is there opportunities for that mid single-digit guide to be conservative or are there headwinds that we should be aware of or is there anything we're missing there?

I think the key tailwind or key opportunity there is increased or increased short-term interest rates. So to the extent that that as I said in that outlook really don't have any assumed additional tightenings, fed tightenings in there. So that's clearly an opportunity. The other kind of opportunity and headwind, I think, is – or potential headwind is loan growth. And ultimately we've got a loan growth outlook here that accompanies that net interest income outlook, and we fully intend to achieve the loan growth. And if it's better than we are expecting, then that could be helpful and vice versa. Scott, I don't know if you want to add to that.

No, I agree with both of those points, and loan growth is really a key for us. We've said, we're going to keep the investment portfolio pretty stable at this point, and we started out a little soft on the loan growth side. But as you look at slide 12, as Paul noted when he talked about it, the fundamental areas of loan generation for us are growing and have the potential to grow at a faster rate. And we will hit the bottom of the oil and gas declines and National Real Estate declines. So that will taper at some point.

All right. Thanks. And maybe on that loan growth point, it looks like the – in the energy book, the unfinished equipment (54:55) went up, I think you mentioned it was related to the midstream part of the portfolio. And I just wanted to kind of get your updated thoughts on potentially taking on more energy loans, whether it would be kind of focused in the E&P and midstream space or a little bit more broad?

Good question. We will definitely see the portfolio grow again. We've been a long-standing leader in energy lending in the country and we'll continue to be that. The growth will primarily come on the reserve-based side and on midstream. And on the reserve-based side as well as in the services sector, you're going to see revolvers being utilized again. And so we think that'll have a positive impact as well there is new underwriting going on both in the midstream and in the reserve-based side.

Great. Thanks.

Thank you. And our next question is from the line of Bob Ramsey with FBR. Your line is now open. Bob H. Ramsey - FBR Capital Markets & Co.: Hey, hello there. Just given the positive commentary around energy trends, is it your expectation that as you go through the redetermination process that loan upgrades are likely which could result in additional reserve releases?

Well, we're just starting in – this is Scott, we're just starting into the spring redeterminations and I think it's going to be kind of a flattish experience to the fall redetermination. And I think more important than the redeterminations, I think the financial results of our reserve-based borrowers is improving at a steady pace, and you're seeing drilling pick up as a result of the – you see the rig count increasing. And so I think the fundamentals in reserve-based lending are going to improve and you'll see that benefit in the reserve-based side, and you will absolutely see it in the services sector. Bob H. Ramsey - FBR Capital Markets & Co.: Okay. Great.

And also – and so as it relates to the reserve, we'll just have to watch charge-offs and the general credit parameters, but as we've said previously that reserve will continue to come down. Assuming characteristics – the industry characteristics stay as they are today or improve.

I mean, I just – Bob, I'll just jump on here, this is James. One of the interesting factoids that I've found as I looked through some of the statistics this quarter on the services portfolio is that the rapid pace at which the services companies are returning to positive EBITDA and positive free cash flow. It's not to overstate it a little bit but 10 to 15 percentage points of the portfolio per quarter, not annualized, is how fast they're coming back into profitability. So it is a nice trend and certainly that's one of the trends that's causing the capital markets to be very interested in supplying capital to these companies.

I think the other thing that's important to note that, generally the outstandings on the services side are term loans and those term loans generally we're amortizing on a three to five year basis. Today, we have about $630 million in energy services outstandings. 15 months ago, that number was a bit over $1 billion. So the exposure is coming down rapidly and it will continue to decline just through natural amortization of the credits that we had. Bob H. Ramsey - FBR Capital Markets & Co.: Great. Thank you.

Thank you. And our next question...

Carmen.

...go ahead.

Carmen, this is James. We're going to probably shift over to the lightning round here, so just one question now and we'll try to avoid the follow-up. And we'll try to keep our answers quote or quick rather and we'll move quickly through the last two or three minutes.

Thank you, sir. And our next question is from the line of Scott Valentin with Compass Point. Your line is open. Scott Valentin - Compass Point Research & Trading LLC: Thanks for taking my question. Just Harris, you mentioned growth accelerated. I think you said that quarter-to-date you've already outgrown percentage-wise all the first quarter, just wondering where you're seeing that growth come in, if it's C&I or other parts of the portfolio.

Quarter-to-date, it's been C&I, and it's been consumer primarily, a little bit of commercial real estate, but not very much. It's been primarily commercial and then some consumer. Scott Valentin - Compass Point Research & Trading LLC: Okay. Thanks.

And our next question is from the line of Gary Tenner with D. A. Davidson. Your line is open. Gary Peter Tenner - D. A. Davidson & Co.: Thanks, guys. Scott actually just had the question I was going to ask, but while I'm on the line here, just one more question on the healthcare loan. Can you confirm whether or not it was a Shared National Credit?

It was not a Shared National Credit. Gary Peter Tenner - D. A. Davidson & Co.: Thank you.

And our final question is from the line of Brian Klock with KBW. Your line is open. Brian Klock - Keefe, Bruyette & Woods, Inc.: Hey. Good afternoon, guys. Thanks for taking my question.

Hey, Brian.

Hey, Brian. Brian Klock - Keefe, Bruyette & Woods, Inc.: So, I just – I guess the last thing with guidance and NII, Paul, I guess can you just remind us then with the new balance sheet where we are if we get a fed hike that maybe comes in June. I guess, what's the next 25 basis point hike impact on your net interest income?

Brian, we estimated in accordance with the slide there, we estimate that it's worth, if you take the midpoint between the fast and the slow, we estimate that to be worth about $15 million. Brian Klock - Keefe, Bruyette & Woods, Inc.: Okay. Thank you for your time.

And Brian, I'd just add, that that is a one year, so that shocks rates up. Brian Klock - Keefe, Bruyette & Woods, Inc.: Right.

But then it – and then we – and then it takes a year for us to season before that effect happens. So, it'd be less than that if you just looked at the quarterly effect from the one month LIBOR...

But the full-year effect is about $50 million.

But the full year effect is for the $50 million.

Yeah. Brian Klock - Keefe, Bruyette & Woods, Inc.: Got it. Appreciate it. Thank you.

And ladies and gentlemen, this concludes our Q&A session for today. I will turn the call back to management for final remarks.

Okay. Thank you very much for joining the call today. We appreciate your time, and your interest in Zions. We look forward to taking any follow-up questions through the normal channels. I'll be available throughout this afternoon and this evening, and throughout the day tomorrow. And we'll see you at a conference, hopefully, sometime soon.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program, and you may all disconnect. Have a wonderful day.