6th straight Zions loss is less than expected

SALT LAKE CITY — Zions Bancorp on Monday reported its sixth straight quarterly loss, but it was a loss well below that predicted by a group of analysts and less than half the loss in the previous quarter.

According to its first-quarter 2010 financial report, Zions had a net loss applicable to common shareholders of $86.5 million, or 57 cents per diluted share. The consensus Wall Street expectation was for Zions to lose 95 cents per share in the quarter.

Most of the loss was from non-cash impairment charges on goodwill, showing reduced value for assets it had acquired.

The net loss for the fourth quarter of 2009 was $176.5 million, or $1.26 per diluted share.

"Even we are a bit pleasantly surprised by this quarter," Zions chief financial officer Doyle Arnold said during a late afternoon conference call Monday with reporters and analysts.

Zions officials said loan charge-offs fell considerably, contributing to better-than-expected results. But Arnold noted that it's "hard to believe that pace can continue."

Chairman and CEO Harris H. Simmons said things are looking up.

"Credit conditions in our franchise and, I think, across the industry are improving," he said. "These results have strengthened the view we should return to profitability on a pretax basis later this year."

The first-quarter 2010 loss includes a 23-cent loss for taxes and penalties from the surrender of specific bank-owned life insurance contracts, partially offset by a gain for the exchange of non-convertible subordinated debt to common stock.

Arnold said the bank expects to see declining loan balances in the second quarter and that instability also is likely in the near term.

The quarterly financial report was released after stock markets closed. Zions' stock price closed at $25.43 Monday, down 10 cents for the day. It has ranged from $8.88 to $27.11 during the past 12 months.

e-mail: lois@desnews.com