What Happened?
Shares of regional banking company Zions Bancorporation (NASDAQ: ZION) fell 8.3% in the afternoon session as the company disclosed it would charge off $50 million after discovering issues with two commercial loans from its California Bank & Trust division.
The charge-off, which is when a lender writes off a debt as a loss, stemmed from what the bank described as "apparent misrepresentations and contractual defaults" by two related borrowers. The loans in question totaled approximately $60 million. In response, Zions decided to set aside funds to cover the full $60 million amount and reflect the $50 million charge-off in its third-quarter 2025 financial results. The company also noted it was pursuing legal action to recover the funds.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Zions Bancorporation? Access our full analysis report here.
What Is The Market Telling Us
Zions Bancorporation’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 3.5% on the news that the earnings season got off to a strong start as several big banks reported third-quarter results that surpassed Wall Street's expectations.
The positive results were driven by a rebound in investment banking and strong trading desk performance. JPMorgan Chase reported a significant jump in profit and revenue, boosted by increased trading and dealmaking. Similarly, Wells Fargo saw its shares climb after reporting strong net interest income and raising its guidance. Citigroup also exceeded revenue estimates across all its business lines. While Goldman Sachs also beat expectations, its shares dipped slightly on news of potential job cuts aimed at curbing costs. Overall, the strong reports from these financial giants suggest a healthy pickup in corporate activity and trading.
Also, Fed Chair Jerome Powell gave investors a major reason for optimism by suggesting the Fed could soon stop its quantitative tightening (QT) program. For months, this policy acted like a brake on the economy, systematically draining cash from the financial system to cool inflation. Powell's comments signal that the Fed may be ready to ease its pressure, which would leave more liquidity in the market to flow into assets like stocks.
Zions Bancorporation is down 10.5% since the beginning of the year, and at $48.40 per share, it is trading 21.6% below its 52-week high of $61.73 from November 2024. Investors who bought $1,000 worth of Zions Bancorporation’s shares 5 years ago would now be looking at an investment worth $1,554.
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