Zions stock price fell 6.08% to $42.48 after the Salt Lake City-based bank missed Wall Street earnings estimates.
Zions' earnings per share of 99 cents for the second quarter represented a significant increase over the 89 cents per share the bank earned during the same period a year ago. But EPS fell well short of the $1.09-a-share estimate of analysts surveyed by Zacks Investment Research.
Zions also missed the mark on revenue. While the bank reported a 2.2% increase in net revenue for the quarter, rising to $701 million, it was more than $20 million short of the $723.2 million estimate of analysts polled by Zacks.
Wells Fargo and KBW both reportedly lowered their ratings of the bank's stock.
While overall Zions' balance sheet remained strong, increased expenses, a drop in non-interest income, and higher provisions for credit losses all helped put a drag on the bank's second-quarter results, according to Zacks.
Zions boosted its provisions for credit losses to $21 million, a 75% increase over the same period a year ago. Zions also wrote off loan and lease losses of $14 million during the quarter.
However, Harris H. Simmons, Zions' chairman and CEO, said in a statement that "credit quality remained very clean," noting that "annualized net charge-offs" were "only 0.12% of average loans and leases."
He also pointed to "strong" economic conditions "throughout the Western United States."
"Operating expenses continued to be well controlled, rising less than 1% from the prior year's second quarter, and credit quality remained very clean," Simmons said in a statement.