Judging by its reaction to Zions Bancorp.'s $5.9 billion agreement to buy First Security Corp., Wall Street may be souring on banking consolidation.

Zions is widely respected, and it estimated that savings and additional revenue from the deal would exceed the premium being paid by 10% in the first year. Yet Zions' share price fell 10% Monday, the first trading day after the deal was announced, and another 1.65% Tuesday, to $57.625.

"Some of the acquisitions we've seen recently didn't get the cost saves and revenue as quickly as they said would be possible," said Lehman Brothers analyst Michael Plodwick. "And the buyers, like Zions, were good, solid companies."

The selloff "implies some kind of investor doubt" about the projected earnings accretion, said Thomas Smith, banking analyst at Standard & Poor's Equity Group. "This is a larger deal than Zions has done before."

In a merger this size, the acquirer has "a large number of assets to coordinate," Mr. Plodwick said. "That leads to uncertainty."

Harris H. Simmons, president and chief executive officer of Zions, said the merger will make the new company stronger in part by creating a larger California presence. But if it also makes the shares cheaper, it would be easier for a larger banking company to get a boost by buying First Security Corp., as the new company would be known.

Wells Fargo & Co. is an example of one that was ultimately acquired after its merger performance disappointed Wall Street. First Union Corp., one of the most acquisitive banks this decade, has been pegged lately as a takeover candidate because it had to lower earnings projections.

"The market is punishing companies that seem to be using their currencies to buy underperforming institutions," said a banking analyst who declined to be quoted by name. Regardless of the claims of management, "investors seem to think mergers are diluting the earnings of the acquirer."

The deal between the two Utah rivals would create a $40 billion-asset company with banking offices in 10 states. Of banking companies with headquarters in the West, only the $201 billion-asset Wells would be larger.

"There is integration risk for any transaction where you combine two large companies," said Mr. Plodwick of Lehman Brothers.

The same kind of falloff in stock price was seen after Amsouth Bancorp. said it would acquire First American Corp., and when Firstar Corp. made its deal for Mercantile Bancshares. Both acquirers are viewed as solid.

Zions, though, may be in a different category, said Peyton H. Green, an analyst at Sterne, Agee & Leach.

"What you're seeing is the takeover premium dissipating somewhat out of Zions' stock," he said. "Now, people are taking a step back, waiting to see things unfold."

Some analysts expect Zions to continue to buy, though perhaps not right away. It is a high-performing bank with a high price/earnings ratio. Last year alone, Zions completed 12 purchases, including Sumitomo Bank of California.

Zions is an example of a split that is going on in the banking industry, Mr. Green said. "The cluster of high-performing banks have the ability to make purchases, while the lower-performing banks have fewer alternatives.

"They are only attaching cost savings of $108 million to the merger," he said. "That represents 15% of First Security's non interest expense and 8% of the combined companies. And that is pretty low."

"Once put together, it is going to be a tremendous franchise," Mr. Green added.

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