Shares of Zions Bancorp. fell Tuesday after comments in a regulatory filing raised concerns about the regional banking company’s liquidity.

In filing its quarterly report with the Securities and Exchange Commission on Monday, the Salt Lake City company said most of its subsidiary banks have reported lower profits or losses in recent quarters and are unable to pay dividends.

Cash earnings from the units and investments do not cover Zions’ interest and dividend payments and likely will not cover those for the rest of 2009, meaning Zions will have to rely on its existing cash to fund the shortfall.

Its shares fell 8.1%, to $16.48.

“In addition, the parent has had to increase its investment in several of its bank subsidiaries in order to maintain their ‘well capitalized’ status,” Zions said in the filing.

Morgan Stanley analyst Ken Zerbe said recent liquidity concerns are a headwind for the stock, though he said he still sees considerable upside for the bank given its aggressive approach at addressing credit problems, among other factors.

“Given recent filings, it seems increasingly likely that Zions may need to raise debt or additional equity to bolster holding company cash needs, which would put downward pressure on earnings,” Zerbe said.

A representative from Zions was not immediately available to comment Tuesday.

Zions’ shares have lost about 50% of their value in the past 12 months but have climbed nearly 20% in August, even with Tuesday’s losses.

Morningstar analyst Maclovio Pina said Zions shares could be readjusting from recent gains. The stock ended in the black for the previous eight consecutive trading days.

Last month Zions reported it swung to a second-quarter loss as its provision for loan losses soared. Regional banks have struggled during the economic downturn because they are tied to local real estate markets. Zions operates in Western states, which include some areas hit hardest by the housing downturn.

Zerbe said Zions currently has about $1 billion of cash and securities, with an estimated $800 million quickly accessible. He said its cash needs are about $100 million in annual preferred dividend payments and a nearly $300 million debt maturity in December. He said that implies Zions’ liquid cash position would still be about $355 million by the end of 2010.

“The primary risk, of course, is that Zions needs to push additional capital into the bank subsidiaries to fund greater-than-expected credit losses,” Zerbe said.

To improve liquidity, Zerbe said Zions could issue new debt, roll its nearly $300 million in maturing debt at a higher rate or issue equity or convertible preferred shares.

“While new debt would likely come at a fairly steep cost, given debt market conditions, and common equity would be dilutive, they are viable options, in our view,” he said. The most likely action is the issuance of more stock, he said.

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