Zions Bancorp's fourth-quarter loss — its fifth quarterly loss in a row — narrowed on prior-year writedowns while loan-loss provisions continued to climb.
Shares rose 9.8% to $19.69 in after-hours trading as the regional bank's loss was smaller than Wall Street expected. The stock has almost tripled from a 15-year low in March.
"We enter into 2010 feeling increasingly confident that peak levels of loan losses are behind us, and that economic conditions in the majority of our markets have begun to stabilize," said chairman and chief executive Harris Simmons.
Regional banks have struggled during the economic downturn because they're tied to local real-estate markets. Utah-based Zions operates in 10 Western and Southwestern states, which include markets among the hardest-hit by the housing downturn. But Zions recently said it saw some signs of stabilization and more moderate increases in credit costs.
For the latest quarter, Zions reported a loss of $184.1 million, or $1.26 a share, compared with a year-earlier loss of $483 million, or $4.37 a share. The latest results included a $99.3 million writedown on collateralized debt obligations. The prior-year quarter included $353.8 million in writedowns on acquisitions and investments.
Analysts estimated a loss of $1.64, according to a poll by Thomson Reuters.
Loan-loss provisions climbed 37% to $390.7 million from a year earlier but dropped 31% from the third quarter. Net charge-offs — loans the bank no longer thinks are collectible — rose to 2.98% of annualized average loans from 1.72% a year earlier but fell from 3.79% in the third quarter. Nonperforming assets — loans on the verge of going bad — grew to 5.93% from 2.71% a year earlier and from 5.4% in the third quarter.