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Zions Bancorp(ZION - Get Report) have dropped nearly 10% over the past month. Year-to-date the stock is still up 14%.
The Salt Lake City, Utah-based bank reported first-quarter net income available to common shareholders of $25.5 million, or 14 cents a share, which came in below expectations.
But Zion's earnings routinely have a
fair bit of noise
, due to one-time items arising out of conversion of debt to preferred stock and the repayment of bailout money.
Excluding "the noncash effects of the discount amortization on conversion of subordinated debt and additional accretion (net of expense) on acquired loans ($15.0 million, $0.08 per share), and the accelerated amortization of discount on the $700 million redemption of Troubled Asset Relief Program ("TARP") preferred stock ($19.6 million, $0.11 per share) in the first quarter," Zions said its net operating earnings were $60.1 million or 33 cents a share.
Still, analysts remain concerned about future earnings power from the company. "The credit part of the ZION story remains one with good momentum. The tougher part is on revenue generation," Sandler O'Neill analysts wrote in a report following first quarter results. "The lending recovery ZION is experiencing is still pretty muted. In fact, line utilization is about as low as it has ever been. This contrasts with the substantial traction many other large regionals have gained in the last couple of quarters."