Zions Bancorp, Western Alliance plunge on exposure to fraudulent relationships

Western Alliance Bancorporation

16/10/2025 15:41

** Shares of regional lenders Zions Bancorp ZION.O and Western Alliance Bancorp WAL.N down 5% and 7.7%, respectively

** Late Wednesday, ZION disclosed it would be taking a $50 million charge-off in Q3 as part of a $60 million provision for two related commercial and industrial loans extended by the bank’s California Bank & Trust division

** ZION recently became aware of legal actions taken by several banks and other lenders following which it commenced an internal review of the borrowers

** Stephens analyst Terry McEvoy said in a note that ZION is looking to recover $60+ million in unpaid loans related to investment funds—Cantor Group II and Cantor Group IV —where the security interest is in mortgage loans.

** On Thursday, WAL in a filing says the bank in August initiated a lawsuit against borrower Cantor Group for failing to provide collateral loans in first position

** Bank's response comes after investor inquiries about a recent peer bank 8-K filing

 (Reporting by Arasu Kannagi Basil in Bengaluru)

 ((ArasuKannagi.Basil@thomsonreuters.com;))