If you'll take your places, we'd like to call the meeting to order. I'd like to welcome you to Zions Bancorporation, National Association's 2019 Annual Meeting of Shareholders. Before we begin, we'd request that you turn off cell phones, pagers, recorders, and other electronic devices. Rules of conduct for the meeting were distributed at the door. Please raise your hand if you need a copy. I think they're on the seats as well. The meeting will please come to order. I'm Harris Simmons. I'm the Chairman and Chief Executive Officer of the bank. Sharing the platform with me is Thomas Laursen, the General Counsel of the bank and Secretary of the meeting. Mr. Laursen, do you have affidavits of the notice of meeting and mailing of the notices?
Yes, I do.
Thank you. The notice and affidavits will be filed with the minutes. The meeting has been legally called and a quorum is present. Our directors who are here with us today, and I'd ask them to stand as their names are called, are Jerry Atkin, Gary Crittenden, Suren Gupta, David Heaney, Vivian Lee, Scott McLean, Edward Murphy, Stephen Quinn, Barbara Yassine, and nominee Aaron Skonnard. I want to recognize Director Roger Porter, who is retiring from service on our board after 29 years. He's been a really fabulous board member for many years, and has added greatly to this company and in serving all of us as shareholders. During Roger's tenure, he's served as our Lead Director for 6 years, chaired the Audit Committee for 14 years, and has been a longtime member of the Compensation and Nominating and Corporate Governance Committees.
Dr. Porter is one of the nation's leading presidential historians and scholars, having taught for many years at Harvard University's Kennedy School of Government and served our country as a senior official in 3 different presidential administrations. We're really grateful for his many years of service and his contributions to Zions Bancorporation, and I'd ask you to join me in thanking him for his service. I also want to welcome our newest board member, Aaron Skonnard. Aaron is an extraordinary entrepreneur and a great leader in the information technology industry. He's CEO of Pluralsight, a Utah company that Aaron co-founded in 2004. He's built, very quickly, one of the premier businesses in the Intermountain West. A company that provides state-of-the-art technology skill development solutions to over 17,000 businesses around the globe, including two-thirds of all of the Fortune 500 companies.
In the 15 years since this business' founding, Aaron has built a company with a market value of over four and a half billion dollars, which is a phenomenal accomplishment. We're really pleased to welcome Aaron to our board of directors. Many of the principal officers of the bank and its subsidiaries are also here today. I may call on some of them later to help answer your questions. Representatives from EY are also present. They'll also be available to respond to appropriate questions. Michael Medow and Brandon Bird have been appointed Inspectors of Election. Neither is a nominee for the office of Director. The first item of business is the election of directors for a term of one year. Shareholder Paul Kelly will present this resolution. Mr. Kelly, would you please state your name and the fact of your stock ownership for the record?
Mr. Chairman, my name is Paul Kelly. I'm a shareholder director. I move the following resolution. Resolve that each of the following persons be nominated for director of the bank for a term of one year: Jerry C. Atkin, Gary L. Crittenden, Suren K. Gupta, J. David Heaney, Vivian S. Lee, Scott J. McLean, Edward F. Murphy, Stephen E. Quinn, Harris H. Simmons, Aaron B. Skonnard, and Barbara A. Yassine.
Thank you very much, Mr. Kelly. Is there a second to the motion?
Second.
The board recommends voting for these nominees. We're not aware of any shareholders who have complied with the bank's procedures for making any additional nominations. Accordingly, the nominations are closed. Proposal is now open for discussion. Is there any discussion? There being none, shareholders who have not yet voted on the nominees may do so by marking an appropriate entry after item number one on the ballot. Proposal two is to ratify the appointment of Ernst & Young LLP as the bank's independent auditors. Shareholder Diane James will present this resolution. Ms. James, would you please state your name and the fact of your stock ownership for the record?
Mr. Chairman, my name is Diane James, I am a shareholder director. I move the following resolution. Resolve to ratify the appointment of Ernst & Young LLP as the bank's independent auditors for fiscal 2019.
Thank you very much, Ms. James. Before you sit down, I also want to thank Diane James is retiring here in the next couple of weeks, something like that.
End of the month.
Yeah, end of the month. As our Head of Human Resources, we want to thank her for her service. She's done a wonderful job. Is there a second to vote motion?
Second.
The board recommends a vote for this proposal. The proposal is now open for discussion. Is there any discussion? There being none, shareholders who have not yet voted or wish to change their vote on this proposal may do so by marking an appropriate entry after item number 2 on the ballot. The next item on the agenda is a vote on a non-binding advisory basis to approve the 2018 compensation paid to the bank's executive officers named in the proxy statement. Shareholder Rick Maracami will present this resolution. Mr. Maracami, would you please state your name and the fact of your stock ownership for the record?
Mr. Chairman, my name is Rick Maracami. I am a shareholder of record. I move the following resolution: resolved that the shareholders hereby approve on a non-binding basis the 2018 compensation of the named executive officers as disclosed in this proxy statement. Reflections and compensation disclosures of the SEC, including the compensation discussion and analysis, compensation tables, and related material.
Thank you very much, Mr. Maracami. Is there a second on the motion?
Second.
There's a second. The board recommends a vote for this proposal, which is now open for discussion. Is there any discussion? There being no further discussion, shareholders who have not yet voted or who wish to change their vote on this proposal may do so by marking an appropriate entry after item number 3 on the ballot. Item number 4 is to establish the preference of our shareholders regarding the frequency of the non-binding advisory vote on executive compensation. The options available to shareholders are a vote held annually every two years or every three years. Shareholders may also abstain from voting on this proposal. Shareholder Jennifer Erickson will present this resolution. Ms. Erickson, would you please state your name and the fact of your stock ownership for the record?
Mr. Chairman, my name is Jennifer Erickson. I am a shareholder of record. I move the following resolution: resolved that the frequency option that receives the highest number of votes cast in response to this resolution will be determined to be the frequency preferred by shareholders for the bank's shareholders non-binding vote to approve executive compensation.
Thank you very much, Ms. Erickson. The board of directors recommends that the advisory vote on executive compensation be held annually. The proposal is now open for discussion. Is there any discussion about the proposal? There being none, I would invite anyone who has not yet turned in a ballot and wishes to do so to raise your hand. Is there anybody that needs a ballot? If you're not is there anyone remaining who has not yet voted his or her shares and wishes to do so? There being none, I declare the polls closed. I'd like to give just a brief report on the company's performance this past year and some of the things we're focused on currently. It was a very good year for us. I think all of you are generally familiar with the company's footprint or operations.
We operate across the Western United States under actually eight different brand names, as banks from Texas up through the Pacific Northwest and everything west of that kind of line, an imaginary line, if you will. This has been a very successful community-focused way to conduct our business over many years. We ended the year just under $70 billion in total assets and with very strong capital and solid earnings. If you look at just reputationally, we think that we enjoy a great reputation in every market that we serve. We're one of only six banks to have averaged 15 Greenwich Excellence Awards since 2009, when Barlow Research Associates, which is the nation's premier market research firm in the financial services industry, began surveying small and middle-market customers with respect to the experiences they were having with their banks.
We're very proud of a long string of accomplishment in being recognized by our customers through these branch surveys. As we've pointed out before, we also are recognized as having some of the great women in this industry. We have consistently been recognized by American Banker as having one of the top teams of women bankers in the industry and various local awards for banks around our system. In terms of financial performance this past year, earnings per share of $4.08 was $850 million in net income. That was up 57% on an earnings per share basis from 2017. Over the last five years, we've had a 43% total shareholder return. That's share price appreciation plus dividends. This past year, we achieved a new record in terms of pre-tax, pre-provision income. This is our pre-tax income before credit costs.
Because as we account for loan losses, there are timing differences between when we set aside money for a loan loss and when it may actually occur, but we build a reserve for it, and there can be fluctuations in that reserve. We tend to look at this in terms of pre-tax income before those credit costs, and I tend to then focus on a cash basis on what kind of charge-offs did we have. Before credit costs, we had pre-tax income that increased 13% to a record $1.126 billion. Our pre-tax income was actually higher than that because we had net recoveries in our loan portfolio. We had four basis points, four hundredths of a percentage point, and $16 million of recoveries of previously charged-off loans.
That doesn't happen very often, and it can't happen consistently by definition, because you can't recover what you haven't charged off, as nice as that would be. It was more than a stellar year in terms of credit quality and income. Classified loans that have defined problems, decreased 38%. Our efficiency ratio, how many dollars it takes to earn $100 of revenue, declined from 62.3% in 2017 to 59.6% this past year. We had a 4% increase in our total loans outstanding. Deposits increased 2%, up to $53.2 billion. Our capital and liquidity are in very strong shape, among the best in the regional bank space. We increased our common dividends per share 136%, from $0.44 in 2017 to $1.04 in 2018. At the same time, we repurchased just short of 13 million shares, or about 6.6% of our beginning share count.
I mentioned capital, this shows what is the most highly focused on capital ratio by regulators and by investors, which is our Common Equity Tier 1 ratio, which is essentially common shareholders' equity divided by risk-weighted assets. You'll see there that this is at the end of the first quarter, we've updated this beyond year-end. Relative to a group of peer banks, we're in very strong shape. This is the case even as we've increased our dividend and been buying back shares and trying to rightsize our capital accounts somewhat, still remaining very conservative. We have a very strong deposit base. This is part of the liquidity story of this company. Our deposits composition disproportionately comes from retail, which is to say consumer and small business accounts. It's a very attractive deposit franchise we have.
On the right side of this slide, you can see non-interest-bearing deposits. These are checking accounts as a percentage of total deposits. The green line on top is our percentage, the gray line right below it is the top quartile of our peer group. The blue line at the bottom there is the bottom quartile. You can see that we're performing way beyond the top quartile in terms of the portion of our deposits that are non-interest-bearing and largely operating accounts. These are used by businesses largely to run their businesses for all their transaction activity, it's a very attractive deposit franchise. The bottom line is showing the fed funds rate going back to 2007 and how it was very low for a long time. It's been ticking back up.
As that's happened, these demand deposits will tend to slump off as depositors start looking for yield. Credit quality, like I said, has been exceptional. On the right side of this chart, you can see the net charge-offs to average loans for the last 12 months was the best among our defined peer group with net recoveries. On the left side, you can see non-performing assets and problem loans as a percentage of total loans. Closer to the middle of the pack, although when we have problems, and this slide is showing loan loss severity. When we define a problem as a non-accrual loan, a loan that we put on non-accrual status, the likelihood that we have a loss is much less than it is for other banks in the industry. We tend to have a lot of collateral behind our loans.
We're a secured lender, and that limits the loss we have when we have problems. You can see that that's been the case for a very long period of time here on the right side, going back to 14 years, the data that we have. We have a kind of a belt-and-suspender approach to how we lend money around here, and that's served us well. We're spending a lot of time and money investing in digital capabilities, especially to serve small and mid-sized businesses, which is a really important target market for us. We've been revamping what we call the front door of our customers' digital experiences, with the introduction of new products and services, including an upgrade to our Treasury Internet Banking software.
A lot of new digital products that you're starting to see just in the market here locally, starting to advertise a new online mortgage, a Zip Mortgage that Zions Bank is offering. We'll be offering that throughout the enterprise. That is highly competitive with any digital mortgage experience you can find in the marketplace. We're very excited about that. We're doing a real revamp of all of our digital offerings. Over the course of the next two years, you'll see a lot of new capabilities coming to our customers. We've made onboarding easier. We have a five-minute open a checking account online in as little as five minutes. We're putting in place capabilities that really dramatically improve our ability to look at our customers, kind of a 360-degree view of our customers' relationships with us.
An underlying technology platform and core systems that's going to allow us to be really agile and very competitive with any bank that we compete with. This is a little bit of a busy slide, but it'll give you just an idea of some of the things that we're working through, and implementing over the course of the next couple of years. Starting with foundational software down at the bottom. We've just completed the second release of three releases of our Core Transformation Project, replacing all of our core loan and deposit software, which was done very successfully back in February. We're in about the sixth inning of a nine-year project to replace all of that software, and it's a highly complex undertaking. It's going to leave us in very solid shape for the future.
A variety of other initiatives that will benefit customers in the months and years ahead. We're very focused on a lot of improvement, what we call simple, easy, fast, and safe initiatives that streamline how we do business. Part of this, as we said last year and was accomplished last year, was the merger of our bank. We merged all of the individual banks into a single charter. We now merged the holding company into that charter, so we have really one legal entity for the most part. We have a couple of subsidiaries to the bank now, but we're now a publicly traded bank that has dramatically simplified the regulatory requirements that we deal with. It's left us with a very strong regulator in the Office of the Comptroller of the Currency. That's working out very well.
We have a number of initiatives that we're pursuing that are making a big difference. It's showing up in the numbers. If you look at the top left-hand slide or chart here is showing net revenue indexed to 100, going back to the end of 2014. The gray bar there at the top is the pure top quartile. The blue bar is the bottom quartile. We're kind of in between. We're someplace in between. Our revenue hasn't grown quite as fast as, say, top quartile peers. The middle top slide there is showing the index non-interest expense. You can see there that gradually, our experience has been much better than the top quartiles. So this is one where being low is better. Further to the right, the indexed pre-provision net revenue.
There we've dramatically surpassed our peers. You see that as well in the bottom left-hand slide, which is this net revenue operating income before credit losses, subtracting out actual charge-offs. There and in earnings per share growth, we've had some very strong experience over the last several years. The last year was no exception. That shows in our efficiency ratio, which is you want to have a low efficiency ratio. It's how much it takes to earn $1 of revenue. That has been coming down very significantly over the last few years. For the full year last year, dipped under 60%. The first quarter is ticked back up. The first quarter always tends to tick up for some seasonal reasons. Our determination is to drive that down into the mid-fifties kind of range.
The return on assets, you can see we're about median for the group. As we look ahead into 2020, the rest of this year, 2020, we're really focused on continued operating leverage, having revenue grow a little faster than expenses. A lot of these initiatives, simplification initiatives, are feeding into that. We are really focused on trying to reduce the volatility in our results. We have adjusted our balance sheet so that in a period of changing rates, we are likely to be a little more neutral than we've been in the past. That should provide some protection against both a lower interest rate environment and won't give us as much upside in a rising rate environment. We don't think that that's likely to see that here in the near future. We're working really hard.
We have a lot of people working on technology upgrades and digital strategies, as mentioned. We are right-sizing our capital. We talk a lot about return on capital and return of capital. Our capital levels are somewhat high. We are working on getting that to still probably a little high relative to our peer group, but not as high as they've been. That will free up capital that we can distribute either as dividends or in buying back shares. At the heart of it all is continuing to maintain this very local approach that we have that really differentiates us from the large national banks, has us feel a lot more like a community bank, but with a lot more capability, balance sheet, and product set. Part of that determination is a lot of training of our bankers.
We want to ensure that the experience our customers have in our branches is materially different than they have with other banks. By providing our bankers with more training, we hope with greater longevity, that their tenure there in the branch, that they'll see that as a place they can have a great career. We have some fabulous bankers in this organization who've done that, and it means the world to us in terms of the quality of the customer base that we develop. We're determined that we're going to have really seasoned bankers in our branches at a time when a lot of banks are really trying to cut back and slim down what happens in the branch. We're really grateful for your support. We think we've got a solid year ahead of us. The markets are challenging.
The shape of the yield curve suggests that we might have a recession coming at us. We don't see indications of that yet, but that's a real risk. We think we're really well-positioned for any recession that we might experience in the economy, and that we'll make it through that in quite good shape. With that, let me ask if there are any questions that I could answer from any of you. Okay. That was pleasant.
Enjoy these good years.
Yeah. Yeah, where's Gerald Armstrong when we need him? That being the case, I'll ask the secretary to give the results of voting as contained in the report of the Inspectors of Election. Mr. Laursen?
Thanks, Harris. The results are good as well. Each of the nominees for director has received 94% or more of the votes cast, has been elected director for a one-year term. Can you hear me?
We can hear but come a little closer to your mouth.
Okay. Proposal two, the resolution to ratify Scott J. McLean has been approved by approximately 98% of the votes cast and has passed. Proposal three, the resolution to approve, on a non-binding basis, the compensation paid to the bank's executive officers, has received approximately 95% of the votes cast and has been approved. Proposal four, the resolution to recommend the frequency of the non-binding advisory votes on executive compensation. The one-year option has received over 97% of the votes cast and has been approved.
Thank you very much, Mr. Laursen. There being no further business, the annual meeting is now concluded and a motion for adjournment is in order.
Moved.
A motion, is there a second?
Second.
All in favor say aye.
Aye.
Any opposed, no. Meeting is adjourned. Thank you very much for being with us today.