Zions Bancorp., Washington Mutual Inc. and National City Corp. led the steepest-ever decline in the two-decade history of an index of bank stocks after IndyMac Bancorp Inc.'s collapse spurred concern more lenders are vulnerable to bad home loans.

Zions' shares fell $5.96 to close at $19.73. WaMu slid $1.72, or 35 percent, to close at $3.23, and National City dropped 65 cents, or 14 percent, to $3.77.

"IndyMac's failure has people worried about others," said Mark Fitzgibbon, a principal at Sandler O'Neill & Partners LP.