Zions Bancorporation, N.A. (ZION.US) Q3 profits exceed expectations Analyst: Credit pressure for banks in the U.S. region still remains an isolated issue.

Despite suffering significant losses from two loans, Zions Bancorporation, N.A. (ZION.US) reported an increase in profit for the third quarter thanks to growth in interest income. The financial report shows that Zions Bancorporation, N.A. generated revenue of $8.72 billion in the third quarter, an 8.5% year-on-year increase, surpassing market expectations. Earnings per share were $1.48, higher than market expectations of $1.39. Zions Bancorporation, N.A. disclosed last week that two commercial and industrial loans at its California branch will result in a $50 million loss in the third quarter. The bank stated that in addition to this, revelations from Westlake Bank and Jefferies Financial Group Inc. about fraud lawsuits involving Cantor Group V and the risk exposure to bankrupt auto parts manufacturer First Brands caused bank stocks to fall last Thursday, as investor concerns about credit intensified. CEO Harris Simmons stated in a declaration that, "Excluding this loss, the remaining net charge-offs amounted to only $6 million, which is very modest when annualized as 4 basis points of average loans outstanding." Bank of America Corp shares rebounded last Friday, recovering some of the significant losses from the previous day, easing market tension in the industry. Analyst Terry McEvoy from Stephens stated that, "Several U.S. regional banks' third-quarter financial reports did not show abnormal or unexpected credit losses, and management's outlook for the fourth quarter is reassuring. These trends support the view that the pressure facing a few companies is more an isolated event rather than an emerging trend." Broader loan growth helped banks profit more from interest income. The bank's net interest income (the difference between income earned from loans and interest paid on deposits) rose from $620 million in the same period last year to $672 million. For the three-month period ending on September 30, net profit applicable to the bank's shareholders was approximately $221 million, or $1.48 per share, compared to approximately $204 million, or $1.37 per share in the same period last year.