Oct. 20--The nationwide recession continued to batter Zions Bancorporation, the parent of Utah-based Zions First National Bank, which Monday posted its fourth straight quarterly loss.

The bank-holding company reported that it lost $179.5 million, or $1.41 per share, for the third quarter of its 2009 fiscal year. A year ago, Zions recorded a 2008 third-quarter profit of $33.3 million, or 31 cents per share.

"Results ... were mixed," Zions Chief Executive Officer Harris H. Simmons said in a statement announcing the company's latest quarterly results. "We again augmented our capital, reserves and liquidity positions -- even as we saw some signs of stabilization in some geographies and markets."

Zions operates in 10 Western

states, including California and Nevada, that have been particularly hard hit by the national recession.

Simmons said he was encouraged by the stability of the company's "pre-tax, pre-provision" earnings of approximately $1 billion on an annualized basis. These, along with Zions' actions to beef up its capital and reserves, position the company to weather the tough economic climate.

To help it preserve capital, Zions during the third quarter trimmed its dividend to 1 cent per share, down from 4 cents per share in the second quarter and 32 cents in the fourth quarter of 2008.

On a more positive note, Zions built up its allowance for loan losses during the recently completed third quarter to 3.61 percent of its net loans, compared to 3.08 percent in the second quarter and 1.46 percent in the third quarter of last year.

"We now have one of the strongest reserve levels of any of the regional banks," Doyle Arnold, Zions' chief financial officer said in a conference call with securities analysts on Monday afternoon.

Yet the Utah-based bank-holding company also was forced to charge off $381.3 million in bad loans during the third quarter of 2009, compared with $347.5 million in the second quarter of this year.

In a research note released in late September, JP Morgan Chase analyst Steven Alexopoulos pointed out that Zions recently indicated that subsidiary banks were unable to pay dividends to the holding company and that their earnings were not enough to cover the holding company's interest and dividend payments.

But Alexopoulos added: "In our recent visit to the company ... management indicated it felt the challenge to maintain liquidity at the holding company was manageable, particularly given nearly $800 million in cash at the parent and annual cash-flow requirements approximating $160 million."

Zions shares, which are listed on the Nasdaq market, closed on Monday at $18.33, up 16 cents for the day. Zions released its third-quarter financial results after the market closed for the day.

steve@sltrib.com

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