July 23, 2012 / 9:31 PM / 5 years ago

UPDATE 1-Regional lender Zions Bancorp's profit doubles

* Q2 EPS $0.30 vs $0.16 last year

* Net interest income rises 4 pct to $416.2 mln

* Loan loss provision up eight-fold to $10.9 mln

July 23 (Reuters) - Zions Bancorp’s quarterly profit nearly doubled as the regional lender paid less in dividends following the partial repayment of bailout funds it received from the U.S. treasury.

Net income rose to $55.2 million, or 30 cents per share, from $29 million, or 16 cents per share, a year earlier.

The lender, which operates about 500 branches in 10 western and southwestern states of the United States and has a market capitalization of about $3.5 billion, said its business customers remained cautious, constraining revenue growth.

Zions, which received $1.4 billion in bailout funds as part of the Troubled Asset Relief Program, repaid $700 million in TARP funds in the first quarter.

The company said it was on track to repay the remaining amount by the end of the year.

Net interest income at Zions, which traces its origin to the early days of settlement in Utah in the late 19th century, rose 4 percent to $416.2 million.

Provision for loan losses increased eight-fold to $10.9 million for the quarter.

The bank’s shares, which have fallen about 9 percent in the last three months and underperformed the S&P 500 Index, closed at $18.57 on Monday on the Nasdaq.

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