October 16, 2008 / 9:06 PM / 10 years ago

UPDATE 1-Zions Bancorp profit falls on real estate exposure

* Profit falls 75 pct from a year ago

* Loss reserves nearly triple

* Bank says remains well capitalized

* Shares slide 8.8 percent in extended trading

NEW YORK, Oct 16 (Reuters) - Zions Bancorp (ZION.O), a large U.S. regional bank, said on Thursday its quarterly profit fell 75 percent, citing deterioration in real estate, development and construction loans, sending its shares down nearly nine percent.

Third-quarter net income at the Salt Lake City-based bank fell to $33.4 million, or 31 cents per share, from $132 million or $1.22, a year ago. Results included losses of 16 cents per share on structured debt investments.

Analysts on average expected profit of 65 cents per share, according to Reuters Estimates. It was not immediately clear on what basis the analysts’ made their forecasts.

The bank nearly tripled loan loss reserves to $156.6 million from $55.4 million last year, while net charge-offs more than quintupled to $95.3 million from $18.1 million.

Harris Simmons, Zions’ chief executive, said in a statement that the bank remains well-capitalized, despite the increase in reserves, at a time of “severe financial stress” in the industry.

Also in the quarter, Zions said it acquired all $737 million of the insured deposits at Silver State Bank, a Henderson, Nevada-based lender that failed Sept. 5.

Zions shares slid 8.8 percent to $36.65 in late trading. The stock had closed 6.9 percent higher at $40.20 on Nasdaq prior to the posting of its results. (Reporting by Elinor Comlay; Editing by Tim Dobbyn)

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