Zions net loss narrows in second quarter

(Salt Lake Tribune) Zions Bancorp's losses in the second quarter narrowed noticeably over the prior six months, but the bank holding company still struggled with loans that borrowers can't repay.

The $40.7 million loss in the April-through-June period was driven largely by Zions' need to cover more than a 400 percent increase in bad loans since the second quarter of 2008. It also felt obliged to build up its reserve for additional bad loans expected in the future, the company said Monday.

Even so, the net loss, equal to 35 cents per diluted share, was better than Wall Street expected. Analysts surveyed by Thomson Reuters had predicted a loss of $1.02 per share.

The results were released after the stock markets closed Monday. Zions stock ended the day at $12.22 per share, up 66 cents.

Zions' loss was both bad news and good for the Salt Lake City-based company. In the second quarter of last year, although the recession was under way, the credit crisis had not fully developed, and Zions produced a profit of $69.7 million, or 65 cents a share.

But by year's end, with the recession raging, credit markets frozen and housing prices collapsing, Zions posted a fourth-quarter loss of $483 million. Three months later, the company reported $806.5 million in more red ink, citing loan losses, write-downs of some investments and a huge write-off of good will at its Texas bank subsidiary.

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