Friday should have been a day to celebrate at Zions Bancorp. as the Salt Lake City banking companys stock was added to the Standard & Poors 500 index.
But any morale boost the company could have expected from the event was probably mired in the news that Dale Gibbons, chief financial officer for the $24 billion-asset banking company, had been suspended after his arrest by local police the previous day. Mr. Gibbons, who was charged with possession of a controlled substance and child abuse in Salt Lake City, has been suspended from his duties pending an investigation. The bank has said there is no plan to replace him even on an interim basis until all the facts are known.
The news, bad for any banking company at any time of the year, came at a particularly awkward time a few weeks before earnings season. But analysts and Zions executives said that Mr. Gibbons absence will not interfere with day-to-day business at the company.
In an interview with American Banker after news of Mr. Gibbons arrest, Harris H. Simmons, Zions president and chief executive officer, said that he and Clark Hinckley, head of investor relations, will oversee Mr. Gibbons responsibilities. The company will report second-quarter earnings on July 19. It becomes crunch time next week, Mr. Simmons said.
Mr. Gibbons was active in negotiating merger and acquisition deals. However, Mr. Simmons said that his absence should not slow down any potential deal. Its an area where I feel reasonably capable, Mr. Simmons said.
And observers said that Zions should be able to get along without Mr. Gibbons and weather this controversy, at least for now.
Zions, for a company its size, is a flat organization with a lot of talented executives, said David Winton, an analyst at Keefe, Bruyette & Woods Inc. He is valuable, but I dont think it fundamentally impacts the company. Mr. Winton maintained his buy rating for the company.
Lori Appelbaum, an analyst at Goldman Sachs Group, agreed and said she has confidence in the companys ability to weather the storm.
The businesses of the company remain quite strong, Ms. Appelbaum said. Personal circumstances are distinct from the business.
Mr. Gibbons was arrested on Thursday.
After learning of the arrest, Zions informed employees and issued a statement announcing that Mr. Gibbons was suspended from his duties pending further investigation.
The Nasdaq stock exchange halted after-hours trading in Zions stock Thursday when it learned of the suspension. Mr. Gibbons, 41, became CFO at Zions in 1996 after leaving First Interstate Bancorp. He was well liked and accessible on Wall Street. He was often the face to the Street, Mr. Winton said. This was a face everyone knew.
Mr. Gibbons played a key role for Zions when the company announced it was seeking to acquire First Security Corp., a Salt Lake City competitor. And though the deal was aborted, he was very important to that process, Mr. Winton said.
In trading on Friday, Zions stock ended the session down 3.34%, in a day when the S&P 500 lost some ground. Zions stock, however, got a boost Wednesday, the day after S&P announced it would add the company to its the index.
Laura Mandaro contributed to this article.