Zions (ZION.US) reported a rise in third-quarter profits on Monday, driven by increased interest income, despite facing significant losses from two loans. The financial report indicated that Zions' revenue for Q3 reached $872 million, an 8.5% year-over-year increase, surpassing market expectations. Earnings per share were $1.48, exceeding the anticipated $1.39. Last week, Zions disclosed that its California branch incurred a loss of $50 million in Q3 due to two commercial and industrial loans. The bank also noted that disclosures from Western Union and Jefferies regarding fraud litigation involving Cantor Group V and risks associated with the bankruptcy of auto parts manufacturer First Brands contributed to a decline in bank stocks last Thursday, as investor concerns over credit intensified. CEO Harris Simmons stated, "Excluding this loss, the remaining net charge-offs were only $6 million, annualized at 4 basis points of average loans, which is quite mild." U.S. bank stocks rebounded on Friday, recovering some of the substantial losses from the previous day, easing market tensions regarding the sector. Analyst Trey McEvoy from Stephens remarked, "The third-quarter earnings reports from several regional banks in the U.S. did not reflect any unusual or unexpected credit losses, and management's outlook for Q4 is reassuring. These trends support the view that the pressures faced by a few companies are more isolated incidents than emerging trends." Broader loan growth has enabled banks to profit more from interest income. The bank's net interest income—the difference between what banks earn from loans and what they pay on deposits—rose from $620 million a year earlier to $672 million. For the three months ending September 30, net profit applicable to shareholders stood at approximately $221 million, or $1.48 per share, compared to about $204 million, or $1.37 per share, in the same period last year.