This excerpt taken from the ZION 10-K filed Mar 15, 2006.
Effectively Manage Interest Rate Risk
Our focus in managing interest rate risk is not to take positions based upon managements forecasts of interest rates, but rather to maintain a position of slight asset-sensitivity. This means that our assets tend to reprice more quickly than our liabilities. This practice has enabled us to achieve a relatively stable net interest margin during periods of volatile interest rates, which is depicted in Chart 5.
Taxable-equivalent net interest income in 2005 increased 16.9% over 2004. Excluding $25.9 million from Amegy, taxable-equivalent net interest income increased 14.8%. The net interest margin increased to 4.58% for 2005, up from 4.27% for 2004. An improved asset and liability mix and strong loan and noninterest-bearing deposit growth contributed to the improved margin and the increased net interest income.
See the section Interest Rate Risk on page 69 for more information regarding the Companys asset-liability management (ALM) philosophy and practice and our interest rate risk management.