Zions Bancorp.'s net earnings dropped 70 percent in the last quarter of 2007, compared to the last quarter of 2006, after the Salt Lake City-based bank lost millions in real-estate investments.
Net earnings applicable to common shareholders was $42.2 million, or 39 cents per share, in the fourth quarter of 2007, which compares with $142.7 million, or $1.32 per share, for the fourth quarter of 2006.
The bank recorded $158.2 million, or 89 cents per share, in impairment and valuation losses on securities, resulting from a pre-tax $109 million charge or balance sheet write-off of collateralized debt obligations that the bank is trying to sell and $49 million in repurchases of securities from its off-balance sheet Lockhart Funding LLC.
For the full year 2007, Zions reported $479.4 million, or $4.42 per share. That compares with $579.3 million, or $5.36 per share, for 2006.
Wall Street analysts had predicted the company would earn 48 cents per share for the 2007 fourth quarter and $4.51 for the full year.
Zions' stock price rose $2.09 on Thursday to close at $48.68. During the past year, the price has ranged from $39.31 to $88.56.
Zions owns banks in 10 states, including California and Arizona, where housing construction slowed and land values declined. The bank had to write off millions in bad loans.
In December, Zions' chairman and chief executive officer, Harris H. Simmons, told the Salt Lake Rotary Club that banks need to learn to tell people "no" when a loan will hurt them. Although Simmons said that Zions doesn't make sub-prime mortgage loans, the company lends to homebuilders.
The bank also accrued $8.1 million, or 5 cents per share, in an antitrust lawsuit against Visa Inc.The bank's board of directors said Thursday that a regular quarterly dividend of 43 cents per common share will be paid Feb. 20 to shareholders of record on Feb. 6.