Zions Bancorporation (ZION) shares are trading at a discount to tangible book value growth prospects amid credit concerns, BofA Securities said in a note Thursday.

"We believe 19% P/E discount to historical avg is overdone, neglects TBV & PPNR growth prospects," the report said. PPNR refers to pre-provision net revenue.

The report said recent fraud-related loan write-down does paint its risk management in poor light, but it does not represent systemic issues. It also pointed to the bank's use of a third party to review its risk management processes.

"We could see this act as an overhang on the stock until the review is complete in ~3-6mo," the note said.

BofA upgraded the stock to neutral from underperform and raised its price objective to $62 from $59.

Price: 51.70, Change: +0.01, Percent Change: +0.02