Zions Bancorp. in Salt Lake City said Monday that its fourth-quarter profit increased 42%, to $124.9 million, over the same period in 2015 as credit quality improved and the company reported gains in both interest and noninterest income. Earnings per share rose 40% to 60 cents.

The $63 billion-asset company reported net interest income of $483.2 million for the quarter, a 13% increase that it attributed to largely to increased loan demand and strong gains in income tied to securities. Total loans increased 5% year over year, to $43 billion, due primarily to growth in commercial real estate and residential mortgage lending. Interest from its securities portfolio rose 59% year over year to $60 million.

Zions' income was also aided by a sharp drop in the provision for credit losses as chargeoffs on energy loans continued to decline. Zions set aside just $1 million for credit losses in the quarter, compared to $16 million in both the third quarter and last year's fourth quarter. Net chargeoffs tied to energy loans fell 156% to $16 million from three months earlier. Zions said it has reached an agreement to sell $40 million of energy-sector loans.

In a news release Chairman and CEO Harris Simmons said credit quality should continue to improve in 2017 "as the energy industry continues to heal." He added that credit metrics for non-energy loans, which make up about 95% of Zions' portfolio, "are strong and generally stable."

Noninterest income rose 8% to $128.2 million on higher income from wealth management and from dividends and other investment income. That was offset by a $3.4 million loss from equity securities.

Noninterest expenses rose 2% to $404.5 million. Costs for personnel, professional services, occupancy, and Federal Deposit Insurance Corp. premiums all rose. Zions also recorded a $3.3 million provision for unfunded lending commitments.

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