Zions Bancorp Inc. swung to a first-quarter net loss on a big writedown of goodwill and other charges.
Shares sank 11% to $11.50 in after-hours trading as the regional bank posted its second consecutive loss.
Chief Executive Harris H. Simmons pointed out the bank's balance sheet is strong and goodwill writedowns don't affect regulatory and tangible capital ratios.
"After several quarters of significant increases, net loan charge-offs actually declined this quarter," he added.
While big banks have reported first-quarter profits, regional banks are more tied to local real estate markets, and Zions operates in Western states, which include some areas hardest hit by the housing downturn.
The Utah-based bank reported a net loss of $806.5 million, or $7.29 a share, compared with net income of $104.3 million, or 97 cents a share, a year earlier.
The results included a $634 million writedown of goodwill at Amegy Bank and $249 million in impairment and valuation losses on securities. Excluding those charges, the loss was 39 cents a share.
Analysts estimated a loss of $1.77 a share, according to a poll by Thomson Reuters.
The provision for loan losses rose 4.3% to $297.6 million in the fourth quarter and more than tripled from a year earlier. Net charge-offs - loans the bank no longer thinks are collectible - dropped 16% to $151.7 million from the fourth quarter but nearly tripled from a year earlier. Nonperforming assets, those in danger of going bad, jumped 55% to $1.77 billion from the fourth quarter and quadrupled from a year earlier.
The tangible common equity ratio, which measures how much of a bank's hard assets its common shareholders own, fell to 5.26% from 5.89% in the fourth quarter and 5.73% a year earlier. Investors have focused on the figure because it does not take into account the preferred stock investments that the government has made. Zions has received $1.4 billion from the federal government under the Treasury Department's Troubled Asset Relief Program.
Total assets at the end of the quarter grew 2.1% to $54.55 billion.
Zions said it extended $3.8 billion of credit during the quarter, including $1.9 billion in new loans.
The company has bought two failed banks since last fall.
Zions' stock has lost about two-thirds of its value in the past five months but more than doubled since hitting a seven-year low last month.
