Zions records lower charges in 4th quarter, narrowing loss; restates 2nd & 3rd quarter results

Zions posts narrower 4Q loss on lower charges

SALT LAKE CITY — Regional bank Zions Bancorp. on Monday said it substantially narrowed its fourth-quarter loss as it recorded a fraction of the impairment charges it took the year earlier.

The company also said it revised its results for the second and third quarters of 2009 to reflect a change in accounting for certain debt modifications.

Its shares gained in aftermarket trading.

For the final three months of 2009, Zions said its loss attributable to common shareholders was $176.5 million, or $1.26 per share, compared with a loss of $498.1 million, or $4.37 per share, in the year-earlier period. The per-share results reflect a 23 percent increase in the number of shares outstanding in the latest quarter, following a stock offering.

Analysts polled by Thomson Reuters, on average, expected a loss of $1.64 per share.

Net interest income, or money earned from deposits and loans, fell to $456.9 million, from $508.4 million the prior year.

Non-interest income, or earnings from fees and charges, was $65.9 million, reversing a year-ago loss of $82.3 million. That included recognition of credit-related net impairment losses on certain securities of $99.3 million, or 44 cents per share.

Total deposits rose more than 8 percent, to $42.94 billion, from $39.58 billion at the end of 2008.

The bank increased its provision for loan losses, or money set aside to cover souring loans, to $390.7 million, from $285.2 million in the same period a year earlier.

Zions recorded an impairment charge of $2.2 million, tiny compared to the charge in the 2008 fourth quarter of $353.8 million, or $2.97 per diluted share.

Nonperforming assets, or loans that are substantially past due, rose to $2.33 billion, from $1.14 billion last year.

Net loan and lease charge-offs, or loans written off as uncollectable, rose to $292.1 million, from $179.7 million in the 2008 period. The most recent quarter included a $39.3 million recovery on a commercial credit that was written off in the second quarter.

Zions said charge-offs related to construction development loans subsided during the period.

“We enter into 2010 feeling increasingly confident that peak levels of loan losses are behind us, and that economic conditions in the majority of our markets have begun to stabilize,” said Chairman and CEO Harris H. Simmons. While the economic and political environment remains in flux, he said, the company will likely see lower loan losses and provision expenses in coming quarters.

Separately, Zions said it expects to amend its second and third quarter 2009 financial statements to reflect accounting changes related to modifications of its outstanding debt. According to an SEC filing, the company now says its loss for the three months ended June 30 was $23.8 million, or 21 cents per share, versus the previously reported $40.7 million, or 35 cents per share. For the three months ended Sept. 30, Zions now says its loss was $179.5 million, or $1.41 per share, instead of $181.9 million, or $1.43 per share.

Zions shares jumped 68 cents, or 3.8 percent, to $18.60 in aftermarket electronic trading, from their close up 26 cents at $17.92 in Monday’s regular session.