Zions reports loss on rising loan defaults

Zions Bancorp., the Salt Lake-based lender operating in 10 Western states, reported a fourth-quarter loss of $483 million because of rising defaults on real estate loans and the declining value of securities.

The net loss of $4.36 a share compares with a profit of $45.5 million, or 39 cents, a year earlier, Zions said Monday in a statement. The company's provision for loan losses rose to $285.2 million.

Zions announced a "goodwill" impairment of $353.8 million because of soured loans at banks in Arizona, Nevada and Colorado. The company also reported a loss on securities of $204.3 million, primarily related to collateralized debt obligations. The lender had previously weathered the financial crisis better than its competitors by avoiding the riskiest types of loans.

To bolster capital and its ability to lend, Zions this month sold $255 million of government-backed notes under the Federal Deposit Insurance Corp.'s guarantee program. Zions also won approval in October to receive $1.4 billion as part of the U.S. Treasury's Troubled Asset Relief Program.

Zions stock fell $1.37, or 10 percent, to $12.19 at 4 p.m. New York time on the Nasdaq Stock Market. The shares, down 50 percent this year, rose 56 cents to $12.75 in extended trading after the report.

Deposits at Zions increased 8.8 percent to $39.6 billion from a year earlier. Net interest margin, or the difference between interest income generated and the amount paid, fell to 4.2 percent from 4.27 percent, the bank said.