SALT LAKE CITY- Zions Bancorp has more than doubled its provision for loan losses in the second quarter due in large part to commercial real estate. The news was part of the locally based public bank’s second quarter report, released Monday, in which it reported a $40.7-million ($0.35-per-share) quarterly loss. Last year’s second quarter produced a $69.7-million ($0.65-per-share) profit.
The loss was substantially less than expected by analysts, who on average expected a loss of around $1.00 per share. Shares of Zions finished the day up $0.66 (5.7%) to $12.22. Its 52-week range is $5.90-$54.90.
Zions said it set aside $762.7 million for loan losses during the second quarter of 2009. That is up approximately 85% from $114.2 million in the second quarter of 2008 and up approximately 65% from $297.6 million in the first quarter of 2009.
“The increased provision resulted from continued deterioration in commercial real estate and commercial and industrial loan portfolios; re-estimation of certain of the company’s loss reserve factors based on a newly updated migration analysis reflecting more recent loss experience; and to incorporate the possibility of a more protracted credit cycle,” Zions said in a statement.