In a bad day for banking stocks in general, Zions shares fell despite efforts by Chief Financial Officer Doyle Arnold to present an upbeat report on the company at an investors conference.

Zions is among a number of regional and national banking and financial services companies that have taken a hit on Wall Street for their exposure to real estate and construction lending in certain areas.

The company has seen rising defaults on loans to builders and developers in Arizona, Nevada and California as those states remain mired in the worst downturn in decades.

Zions Bancorp, which once traded at more than $80 per share, fell to under $20 one month ago after a Goldman Sachs analyst issued a "sell" recommendation. Since then, shares have climbed.

Zions Bank CEO and President Scott Anderson said Tuesday that the banking company has in recent weeks worked to reassure customers, investors and employees that its "core business is solid and strong" despite its lower profit in recent quarters.

Clark Hinckley, senior vice president of investor relations at Zions Bancorp, stressed that share prices today are not a good gauge of a how banks are performing.

"Capital markets are so distorted." A bank's share price often "is a terrible proxy . . . for safety and soundness."

Hinckley said that because of the distortion - and because of some investors' uneasiness with the industry - the bank probably will not cut its dividend because that could be viewed as a "negative signal."

Plus, he said, the bank's dividend payout has traditionally been fairly low, compared with other banks.

Overall, Hinckley doesn't see matters getting much worse for the U.S. banking industry in coming months, but he isn't ready to say it has hit bottom in the wake of the collapse of IndyMac and other institutions.

He said he wouldn't be surprised to see more banking failures, but that he would "expect to see a turnaround in the next quarter or two."

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* BLOOMBERG NEWS contributed to this article.