Zions Bancorp.'s second-quarter net income was down by more than 50 percent compared with the same period a year ago, largely due to housing-market stresses.

Zions, which has banks in 10 Western states, on Thursday reported net income of $69.7 million, or 65 cents per diluted common share, compared with $155.6 million, or $1.43 per diluted common share, a year ago.

The Salt Lake City-based company took a $67.8 million hit in loan losses in the second quarter, primarily due to housing-market troubles in California, Arizona and Nevada, as well as some weakening in Utah residential construction. The loan-loss amount represents less than 1 percent of Zions' total loans.

Zions executives noted that the bank is reporting a profit at a time when a number of other financial institutions are reporting losses.

"The growth is slowed, but we are still making good money," executive vice president of marketing and communications Rob Brough said.

Zions stock closed at $27.51 Thursday, up more than 39 percent from Monday's market close of $19.73.

On Monday, Zions and two other banks led the steepest-ever decline in the two-decade history of an index of bank stocks after IndyMac Bancorp Inc.'s collapse spurred concern that more lenders are vulnerable to bad home loans.

Goldman Sacs on Monday had changed its recommendation on Zions stock from "hold" to "sell." The FDIC now has 90 banks on its watch list, signaling performance concerns. The list is not made public. But Brough said Zions is not on the list.

Harris H. Simmons, Zions chairman and chief executive officer, also offered reassurances Thursday in a prepared statement.

"In what continues to be a turbulent and difficult environment in which a number of financial institutions have posted losses, we are pleased that our banks continue to be profitable and well-capitalized," he said. "Our core business is strong, our balance sheet remains healthy, and our net credit costs remain very reasonable compared to the industry, even as we continue to strengthen our reserves."

Zions reports $300 million in average core deposit growth and $1.1 billion in loan growth, excluding $897 million from purchases of Lockhart securities related to loan securitizations.

Other banks also posted profits on Thursday. JPMorgan Chase & Co., the biggest U.S. bank by market value, PNC Financial Services Group Inc., Pennsylvania's biggest bank, and Huntington Bancshares Inc. of Ohio led lenders to a second day of gains after earnings beat estimates.

JPMorgan gained 14 percent in New York trading after reporting second-quarter net income of 54 cents a share, topping the 44-cent estimate in a Bloomberg survey of analysts. Huntington's stock jumped 40 percent, and PNC rose 14 percent after both said profit rose.

The earnings reports helped extend Wednesday's rally, when Wells Fargo & Co. sparked the biggest one-day gain for bank stocks in two decades by beating estimates and raising its dividend 10 percent.

The Standard & Poor's 500 Banks Index gained 8.7 percent Thursday, after climbing 23 percent Wednesday.

Contributing: Bloomberg News.

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