Zions Bancorp's second-quarter loss widened more than expected amid a prior-year gain as the Utah-based regional bank reported its seventh straight quarter in the red.

Shares were down 3.1% at $20.75 after hours. The stock had risen 67% this year, through the market close.

The worsened bottom line came as the bank — like others — has been reporting easing charge-offs and loan-loss provisions, leading the company to anticipate swinging to profitability this year.

Set-asides for potential loan losses plunged 70% to $228.7 million from a year earlier and 14% from the first quarter. While net charge-offs, loans the bank doesn't expect to collect, fell to 2.64% of annualized average loans from 3.33% last year, they rose from 2.29% sequentially. Nonperforming assets, or loans in danger of going bad, were 6.59%, compared with 4.92% and 7.03%, respectively.

Meanwhile, the amount of net loans and leases were up 2.5% sequentially, contrasting with declines exhibited thus far by most other banks that have reported second-quarter results.

Regional banks' fates in the economic downturn were often linked to the real-estate market in areas they serve. Zions operates in 10 Western and Southwestern states, which include markets that were among the hardest hit in the housing downturn.

Zions turned to the government's Troubled Asset Relief Program to get through the worst of the downturn, taking $1.4 billion from the federal government. The company has been boosting capital levels. In March, it revealed equity-distribution deals with Deutsche Bank AG and Goldman Sachs Group Inc. for $250 million in stock following a similar effort with them in September.

Zions reported a loss of $113 million, or 84 cents a share, compared with a year-earlier loss of $50.7 million, or 21 cents a share. The company had 40% more shares outstanding. Analysts surveyed by Thomson Reuters predicted a 54-cent loss.

Total interest income fell 8.4% to $583.7 million, while noninterest income plunged 82% to $109.4 million after a big gain on subordinated debt modification the prior year.

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