FINANCIAL HIGHLIGHTS
00/99
FOR THE YEAR (in millions) Change 2000 1999 1998 1997 1996
------ ------ ------ ------ ------ ------

Net income ........................................ -17% 161.7 194.1 143.4 131.4 112.8
Operating cash earnings(1) ........................ +16% 281.4 242.8 194.4 138.3 115.0

PER SHARE
Net income (diluted) .............................. -18% 1.86 2.26 1.75 1.92 1.69
Net income (basic) ................................ -18% 1.87 2.29 1.77 1.95 1.71
Operating cash earnings (diluted)(1) .............. +14% 3.23 2.83 2.37 2.03 1.73
Dividends declared ................................ +24% .89 .72 .54 .47 .43
Book value(2) ..................................... +5% 20.42 19.39 17.39 12.50 9.00
Market price - end ................................ 62.44 59.19 62.38 45.38 26.00
Market price - high ............................... 62.75 75.88 62.38 46.00 26.00
Market price - low ................................ 36.44 49.00 38.38 25.69 16.69

AT YEAR END
Assets ............................................ +8% 21,939 20,281 18,050 10,794 7,353
Loans and leases .................................. +12% 14,378 12,791 11,219 5,463 3,942
Loans sold being serviced(3) ...................... +40% 1,750 1,252 1,040 1,050 868
Deposits .......................................... +7% 15,070 14,062 14,221 7,830 5,301
Shareholders' equity .............................. +7% 1,779 1,660 1,453 857 569

PERFORMANCE RATIOS
Return on average assets .......................... .74% .97% 1.00% 1.35% 1.58%
Return on average common equity ................... 9.65% 12.42% 10.98% 19.40% 21.54%
Efficiency ratio .................................. 64.91% 66.55% 70.10% 59.33% 56.50%
Net interest margin ............................... 4.27% 4.31% 4.56% 4.29% 4.69%

OPERATING CASH PERFORMANCE RATIOS(1)
Return on average assets .......................... 1.34% 1.26% 1.41% 1.45% 1.62%
Return on average equity .......................... 27.40% 26.77% 26.56% 25.40% 23.36%
Efficiency ratio .................................. 57.46% 60.33% 61.32% 57.99% 55.96%

CAPITAL RATIOS(2)
Equity to assets .................................. 8.11% 8.18% 8.05% 7.94% 7.73%
Tier 1 leverage ................................... 6.38% 6.16% 5.91% 6.92% 8.91%
Tier 1 risk-based capital ......................... 8.53% 8.64% 8.40% 11.96% 14.36%
Total risk-based capital .......................... 10.83% 11.29% 11.34% 13.85% 16.71%

SELECTED INFORMATION
Average common-equivalent shares (in thousands) 87,120 85,695 81,918 68,258 66,547
Common dividend payout ratio ...................... 34.65%(4) 29.33% 28.40% 22.10% 22.20%
Full-time equivalent employees .................... 6,915 6,833 7,099 4,652 3,327
Commercial banking offices ........................ 373 362 345 241 153
ATMs .............................................. 509 484 476 495 337

(1) Before amortization of goodwill and core deposit intangible assets and
merger charges.
(2) At year end.
(3) Amount represents the outstanding balance of loans sold and being serviced
by the Company, excluding long-term first mortgage residential real-estate
loans.
(4) Before impairment loss on First Security Corporation common stock.

[GRAPHIC OF "UNCLE SAM" ANTIQUE BANK APPEARS HERE]

UNCLE SAM
Designer: C G. SHEPARD AND PETER ADAMS
Manufacturer: SHEPARD HARDWARE CO., BUFFALO, NY
Patented: 1886
Original price: $0.50
Current Value: $4,000

Instructions: Place a coin in Uncle Sam's extended hand and press the lever.
Watch as Uncle Sam's jaw swings open as if he were talking. The carpetbag pops
open and Uncle Sam simultaneously lowers his hand, depositing the coin.

ZIONS BANCORPORATION

QUICK FACTS

Assets at Year End: $21.9 billion
Deposits at Year End: $15.1 billion
TOTAL Offices: 374
TOTAL New Branches in 2000: 10
Total ATMs: 509
TOTAL BANKS ACQUIRED in 2000: 1 (+3 ANNOUNCED FOR 2001)
Full-Time Employees: 6,915

A COLLECTION OF GREAT BANKS

In 1886, "Uncle Sam" mechanical banks were sold for $6 a dozen. Back then, the
bank was merely a novelty. Its cleverness was designed to engender thrift in
American youth, to reward a child's modest investment with a unique action.

Things have changed since then. If you'd like to invest in an Uncle Sam bank
today, it will cost you $4,000. In fact, the value of mechanical banks has
increased so much, it's rare to find someone who can assemble a quality
collection. "I have about ten banks in my collection," says Dan Morphy,
mechanical bank collector and owner of Adamstown Antique Gallery in Denver,
Pennsylvania. "And since I only collect banks in good condition, that's quite a
few."

But Morphy understands the value of a collection of great banks. Of course,
Zions Bancorporation has understood that for quite some time, which is why Zions
has carefully selected banks over the past decade that enhance the overall value
of its franchise. Now that collection includes six banks and several subsidiary
companies, almost 7,000 employees, and more than 370 banking offices spread
across eight western states.

Zions philosophy of "collection" is a rare one in today's market. By contrast,
most of Zions' competitors acquire banks to, in essence, melt them down and cast
them in their own image.

By doing so, they also destroy the cultural and community associations which
create a good portion of the banks' value.

Much of Uncle Sam's value is tied to both its history and uniqueness. The same
holds true for Zions' subsidiary banks, which is why Zions maintains their
identities and regional flavors. As far as the customer is concerned, these
banks stay essentially the same--same employees, same management. But behind the
scenes, each bank enjoys the efficiencies of merged back-room operations, as
well as a depth of resources and talent typically unavailable to small community
banks.

Zions employs a management model that lets employees who are familiar with a
client's needs make the decisions regarding that client's relationship. This
"local decision making" model helps ensure that clients receive the services
they truly need.

Under this unique philosophy, Zions Bancorporation has become one of the
nation's premier financial services companies, with locations in some of the
country's best growth markets. In fact, Forbes magazine recently named Zions one
of America's best big companies.

Zions has also received notice for its technological focus. In 2000, Zions
introduced several new Internet-related products. For online banking customers,
MyAlerts(TM) provides a customizable service that sends

encrypted e-mail notification about account information. Zions also introduced
customers to online safe deposit boxes, allowing them to securely store digital
documents online. And GovRate.com(TM) now offers customers real-time,
electronically executable U.S. Government securities quotes from Zions Bank
Capital Markets.

But of all the technological innovations Zions introduced in 2000, the most
significant may be TrustID(R) digital certificates. Developed by Zions'
affiliate, Digital Signature Trust Co., in partnership with the American Bankers
Association, TrustID promises to infuse Internet transactions with a higher
level of trust than was ever possible before. The results could revolutionize
the way people conduct business online.

The value of Zions' collection will continue to rise as customers enjoy the
benefits of local decision making, quality service, innovative banking products,
and greater technological conveniences. It's as certain as the rising value of
antique mechanical banks--which, by the way, is accelerating, thanks to online
auctions. And who keeps driving up the market value? Dan Morphy is kind enough
to reveal the identity of these new collectors.

"It's bankers."

[RETURN ON EQUITY GRAPH APPEARS HERE]

RETURN ON EQUITY (IN PERCENT)

Year 91 92 93 94 95 96 97 98 99 00
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Cash Basis 15.3 20.0 21.9 19.4 22.1 23.4 25.4 26.6 26.8 27.4
Reported 14.6 18.8 20.3 17.9 20.5 21.5 19.4 11.0 12.4 9.7

[DILUTED EARNINGS PER SHARE GRAPH APPEARS HERE]

DILUTED EARNINGS PER SHARE (IN DOLLARS)

Year 91 92 93 94 95 96 97 98 99 00
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Cash Basis .57 .87 1.01 1.12 1.46 1.73 2.03 2.37 2.83 3.23
Reported .56 .86 .99 1.09 1.42 1.69 1.92 1.75 2.26 1.86

TO OUR SHAREHOLDERS,

Zions Bancorporation's performance during 2000 demonstrated the tremendous
strength of our franchise, the resilience and professionalism of our people, and
the soundness of our banking philosophy and operating strategy.

After spending ten months engaged in detailed preparations for the merger of
First Security Corporation with Zions, shareholders voted the deal down on the
last day of the first quarter, following an announcement by First Security that
their first quarter earnings would fall materially short of expectations.
Although the pending transaction had been the focus of much of our senior
management team's efforts for the prior three quarters, and the source of
uncertainty for many of our employees and customers due to planned branch
divestitures, branch and department consolidations, and systems conversions, our
employees and officers were simply incredible in their determination to put the
distractions of the failed merger behind them and move forward to complete a
year of record performance.

FINANCIAL RESULTS

Zions Bancorporation's operating cash earnings (which excludes merger expenses,
amortization of goodwill and core deposit intangible assets, and impairment
losses on the company's holdings of First Security Corporation common stock)
were $281.4 million or $3.23 per diluted share, an increase of 15.9% and 14.1%,
respectively, over the $242.8 million or $2.83 per share earned in 1999. Net
income was $161.7 million or $1.86 per diluted share, down 16.7% and 17.7% from
$194.1 million or $2.26 per share in 1999. Included in net income are $45.5
million in merger expenses, primarily related to the failed First Security
transaction, $37.2 million amortization of goodwill and core deposit intangible
assets, and a $96.9 million impairment loss on First Security Corporation stock.

The company's cash return on tangible common equity remained strong at 27.4%, as
compared to 26.8% in 1999. The cash "efficiency ratio," or operating costs as a
percentage of revenues, was 57.5% in 2000, an improvement from 60.3% in 1999.

Total dividends per share rose 23.6% to $.89 in 2000 from $.72 in 1999. The
company adjusted its quarterly dividend to $.29 subsequent to the announcement
of the First Security transaction in 1999 in order to bring the two companies'
dividends into conformance. Upon the dissolution of the transaction, the
quarterly dividend was adjusted to $.20, a 42.9% increase over the dividend
level prevailing in the first half of 1999. Zions Bancorporation has
traditionally maintained a conservative dividend payout in order to provide
capital funds for the strong earning asset growth experienced in recent years.

Zions experienced strong loan growth in 2000, as average loans and leases
outstanding rose 15.5% to $13.6 billion from $11.8 billion the previous year.
Average deposits rose a modest 3.5% to $14.6 billion from $14.1 billion in 1999.
The company's net interest margin was 4.27%, down slightly from 4.31% in 1999.

Credit quality remained strong, as nonperforming assets decreased 5.4% to $70.5
million from $74.6 million in 1999. Nonperforming assets as a percentage of net
loans, leases and other real estate owned decreased to .49% from .58% a year
ago. Net charge-offs as a percentage of average outstanding loans and leases
were .31%, up from .25% in 1999.

BUILDING THE BUSINESS

Zions continued its pattern of expansion through the acquisition of quality
community banking franchises during 2000. County Bank, headquartered in
Prescott, Arizona, was acquired in July, adding approximately $240 million in
assets to National Bank of Arizona's resources and providing a strong presence
in fast-growing north central

Arizona. Three other transactions were announced during the year, as follows:

o Draper Bancorp, with approximately $250 million in assets and locations in
the south Salt Lake Valley and in Park City, Utah. This transaction was
completed in the first quarter of 2001, and the bank was merged with Zions
First National Bank.

o Eldorado Bancshares, Inc., with assets of approximately $1.3 billion and
locations throughout southern California and in Sacramento. This
transaction, which was announced in the fourth quarter of 2000, is expected
to be completed in the first quarter of 2001. The bank will be merged into
California Bank & Trust.

o Arizona branches of Pacific Century Financial Corporation, with
approximately $400 million in deposits and $225 million in loans. This
transaction, announced in the fourth quarter, will further strengthen
National Bank of Arizona's franchise in Maricopa County and in Yuma. It is
expected that the transaction will be completed in the second quarter of
2001.

Zions continued its efforts to streamline the management of certain of its
business lines during 2000. The company has developed a "Centers of Excellence"
approach to the delivery of certain services requiring a heightened degree of
sophistication and oversight. Under this program, functional leadership is
provided from one of the company's banking subsidiaries or centralized support
entities for the delivery of services across the entire corporation. Products
and services such as Cash Management, Employee Benefit Trust, Trust Operations,
International Banking, SBA Operations, Call Centers, and Internet Banking were
the subjects of reorganization under this program during the past year.

Management team reorganizations were undertaken at Nevada State Bank and at
Vectra Bank Colorado. William Martin, formerly CEO of Pioneer Bancorporation,
assumed the CEO position at Nevada State Bank. Bruce Alexander, formerly head of
the Denver Urban Renewal Agency, took over the leadership of Vectra Bank
Colorado. Both are talented bankers and leaders capable of building strong
franchises in these markets.

ELECTRONIC COMMERCE

Zions remains recognized as a leader in providing trust solutions to the world
of online commerce. Our Digital Signature Trust Co. ("DST") subsidiary won
important contracts during the year, particularly in the federal government
arena. In June, President Clinton signed into law--using a digital certificate
provided by DST--the Electronic Signatures in Global and National Commerce Act,
paving the way for the use of digital signatures and other electronic
technologies to provide a legal substitute for written signatures in online
commerce.

DST became the first vendor certified as operationally prepared to offer digital
certificate services to the federal government under the General Services
Administration's Access Certificates for Electronic Services ("ACES") program.
DST has, to date, won the largest share of the contracts awarded under the ACES
program, including contracts with the Environmental Protection Agency, the
Federal Emergency Management Agency, the Department of Veterans Affairs, and a
major contract with the Social Security Administration to implement online wage
and tax reporting for the nation's employers. DST also won contracts from the
states of Washington and Utah for state government initiatives and, in the
private sector, DST was selected by VISA(R) as a provider of certificate
services for the VISA Access smart card program.

Together with the American Bankers Association, DST has introduced the
TrustID(R) certificate, an inter-operable online identification and encryption
product which is available to banks throughout the nation.

Zions partnered with NetVoyage Corporation to develop and introduce online safe
deposit boxes to our customers. We expect to participate in filling a growing
need for online data storage, and believe that banks, with their heritage of
trust and regulatory oversight, are well suited as long-term repositories for
our customers' electronic files.

OUR FUTURE GROWTH

We continue to see numerous opportunities for growth in the West. Each of the
eight states in which Zions Bancorporation has its primary operations is among
the top third of the states in expected population growth over the next two
decades as projected by the U.S. Census Bureau. We have strong management teams
in place in each of the markets we serve, and we believe the company is capable
of not only keeping pace with the growth in these extraordinary markets, but
also of gaining market share as a result of our relatively unique organizational
structure, which has been proven to be appealing to our customers and our
employees, as well as to many of the community banks which we have acquired in
recent years.

Zions Bancorporation's "Collection of Great Banks" represents an approach to the
financial services business that emphasizes local responsiveness and
responsibility. Our decision makers are close to the customers and the
communities we serve. Our employees are associated with locally chartered and
managed banking institutions, creating a greater sense of "ownership" in their
franchises. We believe this sets us apart in an industry increasingly
characterized by large, monolithic institutions with little local identity or
authority.

The economy in the West has continued to remain relatively strong, despite the
slowdown in the "dot-com" sector and disruptions in California's power supply.
Recent concerns about energy availability in the West and throughout the nation
also contain the promise of opportunity: this region of the country contains an
abundance of energy resources waiting to be tapped. The capital investment
necessary to provide the nation's energy infrastructure with additional capacity
can be expected to include substantial expenditures on resource development in
the West. We nevertheless remain alert to the possibility of a slowing economy
in the West, are cautious in our approach to underwriting, and hopeful that
recent interest rate cuts and the prospect of significant tax relief will
provide the foundation for continued strong growth over the next several
quarters.

We look forward to the challenges of continuing to build the premier locally
oriented banking organization in the western United States. We appreciate your
loyal support.

Respectfully,

/s/ Harris H. Simmons
Harris H. Simmons
President and Chief Executive Officer

/s/Roy W. Simmons
Roy W. Simmons
Chairman

February 9, 2001

[GRAPHIC OF "MILKING COW" ANTIQUE BANK APPEARS HERE]

MILKING COW
Designer: Charles Bailey
Manufacturer: J. and E. Stevens Company, Cromwell, CT
Patented: Circa 1888
Original Value: $0.71
Current Value: $9,500

Instructions: Place a coin in the slot on the cow's back, then press the
flower-shaped lever. The cow flips her tail while kicking over the milking boy,
knocking his hands into the air and spilling the bucket on his face.

ZIONS BANK

As far as collectors are concerned, the "Milking Cow" bank is a
classic--practically a standard--among mechanical banks. Its sophisticated
action, remarkable workmanship, and nostalgic quality make it highly
collectible. Although it has been reproduced several times, any true collector
recognizes that the value of the original can never be duplicated. Nor can the
value of Zions Bank. Founded by Mormon pioneers in 1873, there is an element of
nostalgia about the bank. But in terms of modern banking, Zions is hardly
nostalgic. Through its subsidiary, Digital Signature Trust Co., Zions continues
to pioneer digital identity authentication. In addition, Zions continues to
offer customers ever more sophisticated banking services and technology,
including MyAlerts.(TM) Products like this have made Zions Bank both highly
collectible and frequently imitated. But in the end, nothing matches the value
of the original. Just ask any bank collector.

SELECTED HIGHLIGHTS

LOCAL AUTHORITY In Utah, Zions Bank stands alone as the only locally
headquartered financial institution with a statewide network of branches.

DIGITAL SIGNATURE TRUST DST was the first bank subsidiary to receive approval
from the Office of the Comptroller of the Currency to verify digital signatures,
and Zions was the first bank in the country to offer TrustID(R) digital
certificates to customers.

MYALERTS Customers are able to have personal account information, such as
account balances, e-mailed to them.

"SELF-ENTRY" SAFE DEPOSIT BOX Zions installed the first-ever "self-entry" safe
deposit box system in its marketplace. A fingerprint reader, coupled with a
personal identification number, allows bank customers to access their safe
deposit boxes at their convenience.

ONLINE SAFE DEPOSIT BOX Customers can encrypt important documents, such as wills
or financial records, and securely upload them into an online safe deposit box.

7 AM to 7 PM DRIVE-UP BANKING In an effort to offer more convenience, Zions
extended drive-up banking hours at thirteen branch locations to twelve hours per
day--7 AM to 7 PM.

SBA LENDING Zions Bank was ranked as the number one provider of U.S. Small
Business Administration (SBA) government guaranteed loans in Utah and number two
in Idaho for the SBA's fiscal year 2000.

ACQUISITIONS Zions announced the acquisition of Draper Bank, a $250 million
community bank headquartered in the southern part of the Salt Lake Valley. The
acquisition was completed on January 26, 2001.

QUICK FACTS

Market Share of bank Deposits (UTAH/IDAHO): 18%/2%
State Rank by bank Deposits (UTAH/IDAHO): 2nd/9th
Assets at Year End: $8.1 billion
Deposits at Year End: $4.2 billion
Domestic Offices: 142
In-Store Offices: 49
New Branches in 2000: 3
ATMs: 211
Acquisitions: Draper Bank (completed 1/26/01)
Full-Time Employees: 1,909

DEAR SHAREHOLDER,

In 1873, Zions First National Bank was founded by the pioneer settlers of the
Utah territory on the principle of service to its customers and its communities.
Today, this same pioneering spirit continues to guide us as we explore and
implement new technologies that will make banking easier, more convenient, and
safer for our clients.

MAINTAINING OUR CORE MISSION

As the bank prepares to move into its 129th year, we continue to hold true to
our core mission of assisting in the economic growth of our clients by ensuring
safety for their funds, offering quality products that meet their needs,
providing personalized service and competitive pricing, providing convenient
access to funds and account information, and demonstrating an uncompromising
commitment to the communities we serve. We take our role in the economy, and in
each community we serve, very seriously. Our business is built on the trust
established with our clients over decades. Maintaining that trust is no small
matter to us.

Today, Zions Bank is a strong, diversified franchise and is well situated to
benefit from market disruptions created by mergers and acquisitions affecting
some of the largest banking enterprises in our marketplace. Through a strategy
of decentralized decision making, community bank responsiveness, and
consolidated operational and administration functions, coupled with an ability
to offer the resources and product array available only through a major regional
banking enterprise, Zions Bank expects to see continued growth in 2001.

GREATER RESOURCES AND CONVENIENCES

Loan growth in all sectors--consumer, construction, real estate, and small
business--was exceptional in 2000, growing at a rate of 19.6 percent. Credit
quality remained strong. But deposit growth was slower, as there was intense
competition for core deposits during the year.

With a focus on offering greater convenience for our customers, Zions Bank
continued to grow its branch network in 2000, adding a new branch in West Valley
City, Utah, and two offices in Ammon and Pocatello, Idaho. Additionally, in
November, Zions Bank announced an agreement to acquire Draper Bank, a $250
million community bank headquartered in the southern part of the Salt Lake
Valley. (The Draper Bank acquisition was completed on January 26, 2001.) The
addition of four former Draper Bank offices, combined with the new branches,
brings Zions Bank's domestic branch total to 146, with 125 branches in Utah and
21 in Idaho. And, in Utah, Zions Bank stands alone as the only locally
headquartered financial institution with a statewide network of branches.

Of the 146 branches in the Zions Bank branch network, 49 are located inside
grocery stores. These offices not only provide customers with the convenience of
banking where they shop, they also provide extended evening and weekend hours.

In response to requests from customers for the convenience of drive-up banking
during the hours before and after work, Zions Bank recently extended the
drive-up banking hours from 7 AM to 7 PM at thirteen of its branch locations
located along significant traffic routes.

LEADER IN SBA LENDING, GOVERNMENT SECURITIES, AND TECHNOLOGY

2000 was also a year of firsts for Zions Bank. Zions ranked as the number one
provider of U.S. Small Business Administration (SBA) government guaranteed loans
in Utah, and number two in Idaho for the SBA's fiscal year 2000. Zions also
topped the list in providing SBA loans to minority- and women-owned businesses
in Utah.

Zions is the only primary government securities dealer headquartered west of the
Mississippi. And Zions Bank Capital Markets group established itself this year
as a leading dealer on the Bloomberg Bondtrader(R) electronic bond trading
system.

Zions Bank continued to excel in 2000 as a leader in the use of technology to
offer greater convenience to customers. On the heels of President Clinton's
signing of the "E-SIGN Bill" into law in June, Zions Bank was the first bank in
the country to offer TrustID(R) digital certificates to its customers through a
program sponsored by the American Bankers Association. Utilizing the digital
certificate technology, Zions Bank introduced two innovative services for
customers. With MyAlerts,(TM) customers can receive personal data regarding
their account in an encrypted form via e-mail, and the customers determine what
information they receive and how often they receive it. Zions Bank also
introduced its customers to the secure, online storage of important documents.
Using a personal digital certificate, customers are able to encrypt important
documents (e.g. wills, financial records, images, etc.) and securely place them
into an online safe deposit box. Documents can be uploaded and retrieved at any
time, providing a convenient way to store and back up sensitive information.

In keeping with our goal of giving clients increased access to information on
their accounts and greater convenience in dealing with the bank, Zions Bank
added a variety of enhancements to its Internet Banking site at
www.zionsbank.com. Zions Bank's Internet Banking customers are able to access
account information, transfer funds, pay bills, get insurance quotes, apply for
an insurance policy, order foreign currency, and apply for consumer loans and
credit cards from the convenience of their own homes or offices. Mortgage rate
monitoring, mortgage loan tracking, online stock trading, and much more are also
available to Zions Internet Banking customers.

Another example of Zions Bank's use of technology to better serve the customer
is found in the bank's installment of the first-ever "self-entry" safe deposit
box system in its marketplace. Using a personal identification number (PIN),
along with biometrics in the form of a fingerprint reader for identification,
bank customers can access their safe deposit boxes without having to wait for
the availability of a bank employee, and with the use of only one key.

LOOKING AHEAD

Looking forward to 2001, loan growth is expected to remain strong. Deposit
growth should continue to rebound. In Utah, where Zions Bank enjoys a 14 percent
market share among all financial institutions, loan and deposit growth should be
in the double digits, as clients who want to deal with a locally headquartered
bank with local decision-making ability switch their banking relationship to
Zions.

Idaho presents a tremendous growth opportunity for Zions Bank. Our market share
of deposits in Idaho is currently about 2 percent. However, the Zions Bank name
has good recognition in the state, and our 21 branches provide a solid base from
which to grow, particularly in the important markets of Boise and Idaho Falls.

STRONG COMMITMENT TO COMMUNITY

Zions Bank operates under the philosophy that banking is primarily a local
business. Zions' bankers live and work in each of the communities in which we
have a branch. Accordingly, we have a stake in how our communities prosper. This
same philosophy guides our view on community involvement. We are committed to
doing our part for our communities' future. It is a commitment we honor every
time a local loan officer approves a loan, every time a local manager makes a
decision, and every time an employee participates or officiates in a community
meeting or event. It is why we donate thousands of dollars to community
activities, charities, and nonprofit organizations. It is why our employees
donate thousands of volunteer hours each year, serving in local civic
organizations, school boards, charitable groups, and even political office.

This past year, Zions Bank received the American Bankers Association Center for
Community Development's Action Award in the Community Projects category. The
award recognized Zions Bank for its annual Paint-a-Thon project, which has
resulted in Zions Bank employees painting the homes of more than 330 low-income,
elderly, and disabled homeowners in the past 10 years.

We are committed to the communities we serve, and we are committed to meeting
the individual needs of our customers. And we know that those who are best able
to identify and meet those needs are our local managers and employees. Because
of this, Zions Bank branch managers and loan officers are empowered to make
decisions regarding how to best meet the needs of their customers.

All of these things together demonstrate one thing--that we haven't forgotten
who keeps us in business. We value the trust our customers place in us when they
deposit their hard-earned money with us, but we also recognize whose money it
is. If our customers want to access their accounts over the Internet, they can.
If they want to do their banking at 7 AM on their way to work, they can. If they
want to check their account balances, withdraw some cash, buy some stamps, or
make a deposit at an ATM, they can. If they want to get account information over
the telephone at midnight, they can. And, if they want to walk into or call a
Zions Bank branch and talk to someone who has the authority to help them with
their banking needs, they can. After all, it's their money.

2000 once again brought results that proved the Zions Bank strategy successful,
and set the foundation for even greater success well into the future.

/s/A. Scott Anderson
A. Scott Anderson
President and CEO

[GRAPHIC OF "ORGAN GRINDER AND PERFORMING BEAR" ANTIQUE BANK APPEARS HERE]

ORGAN GRINDER AND PERFORMING BEAR
Designers: L. Kyser and A.C. Rex
Manufacturer: Kyser & Rex Company, Philadelphia, PA
Patented: 1882
Original price: $35 in 1939
Current Value: $7,500

Instructions: Wind the key on the outside of the building. Place a coin in
the slot on the organ, then press the lever on the base. The bear revolves as
the organ grinder turns the crank, sounding the bells inside.

CALIFORNIA BANK & TRUST

For antique collectors, the "Organ Grinder and Performing Bear" bank is a must.
Its spring-wound motor--rare among mechanical banks--is unique in its sustained
motion. Equally unique is the sustained motion of the bank from the state
symbolized by the grizzly bear. From a collector's standpoint, the value is
obvious: California Bank & Trust is the sixth largest bank in California, which
has the ninth largest economy in the world. Just as compelling is CB&T's
commitment to shareholder value. And once you consider CB&T's scheduled
acquisition of Eldorado Bancshares, as well as its continued growth prospects,
it becomes obvious why this bank is such a valuable part of the Zions
Bancorporation collection.

SELECTED HIGHLIGHTS

RELATIONSHIP-STYLE BANKING CB&T is dedicated to providing personal,
relationship-style banking to businesses, real estate companies, professional
communities, and individuals.

EXEMPLARY PORTFOLIO MANAGEMENT AWARD Presented to CB&T, chosen from the field of
local banks with SBA loan portfolios.

SUPPORTING COMMUNITIES The U.S. Department of Treasury presented CB&T with its
Bank Enterprise Award in recognition of the bank's ongoing commitment to offer
full-service banking in distressed communities. The fact that CB&T increased SBA
lending by over 150% in 2000 has also gained some notice. The U.S. Small
Business Administration's San Diego office presented CB&T its Largest
Hispanic-American 7(a) Lender Award as the region's top SBA lender to Latino
small businesses. The bank was also presented with the SBA Lender Achievement
Award for exemplary community service and special achievements in assisting the
SBA in reaching lending goals.

ACQUISITIONS CB&T continues to grow. Regency Bancorporation merged with CB&T in
November of 1999, and the acquisition of Eldorado Bancshares is expected to be
completed during the first quarter of 2001.

QUICK FACTS

Acquired by Zions: 1997
Market Share of Bank Deposits: 2%
State Rank by bank Deposits: 6th
Assets at Year End: $7.0 billion
Deposits at Year End: $5.6 billion
Offices: 75
New Branches in 2000: 4
ATMs: 88
Acquisitions: Eldorado Bancshares (announced)
Full-Time Employees: 1,703

DEAR SHAREHOLDER,

The expansion of CB&T over the last two and a half years has provided Zions
Bancorporation with a meaningful banking presence in the world's ninth largest
economy, the state of California. With total assets just shy of $7 billion, CB&T
now comprises approximately one-third of the Zions total asset base.

IMPROVED PERFORMANCE

Cash operating earnings for year 2000 increased 35% from 1999. Just as Zions has
done for the last ten plus years, CB&T achieved above-market revenue growth of
15%, which fueled this strong earnings increase. CB&T was also successful in
controlling costs, limiting the increase in non interest expenses to under 1%.
The combination of revenue growth and expense control generated tremendous
operating leverage for the year.

The bank cash operating efficiency ratio declined from 61% in 1999 to under 54%
in 2000.

Shareholder value added (SVA) for CB&T increased 76%. CB&T is the first Zions
affiliate to adopt SVA as a performance measurement tool. Incentive compensation
for all CB&T associates is based upon it.

In nine short quarters since the merger of Sumitomo Bank of California into
Grossmont Bank, CB&T has:

o Doubled the quarterly earnings run rate.

o Increased revenues by 29%.

o Reduced the number of full-time equivalent employees, resulting in a
doubling of net income per FTE.

o Restructured both sides of the balance sheet, resulting in an expansion of
the net interest margin by over 40 basis points.

o Decreased nonperforming assets from 1.23% of total loans to 0.40%.

o Reduced Other Real Estate Owned to under $100,000.

The good news for Zions shareholders is that CB&T is now performing at the
median of its peer group and has turned the Sumitomo Bank of California
acquisition into an outstanding investment. The better news is that "median" is
not a commonly used term at Zions. Improving CB&T's operating performance to the
top 10% of its peer group is both a priority and attainable. There are three
areas that CB&T will address:

o Retail Banking Revenue: CB&T has yet to develop any meaningful retail
banking revenue. However, with the closing of the Eldorado Bancshares
acquisition scheduled for the second quarter of this year, the bank will
have approximately 100 banking offices concentrated in the San Francisco
Bay area, metro Los Angeles, Orange County, and San Diego. This provides an
opportunity to market to perhaps the most attractive retail customer base
in the country.

o Fee Income: Fee income at CB&T for 2000 represented just 11% of revenue and
0.58% of average assets. These numbers are less than half of both the
bank's peer group average and that of Zions'.

o Consolidation and Efficiency: Finally, there are still many back-office
functions at CB&T that have yet to be attacked for consolidation and
efficiency.

While on the surface, cash operating efficiency of 54% for 2000 looks good,
given the bank's focus on business, real estate, and private banking, combined
with a large average branch deposit size, this number can be reduced to the
mid-40s over the next eight quarters.

In 2000, CB&T also took responsibility for stewarding Zions Bancorporation's SBA
lending, cash management, and international banking activities through the
creation of "Centers of Excellence." Significant opportunity for increased
income to the corporation for 2001 and beyond exists through the sales of newly
developed, state-of-the-art, Internet-based products in these areas.

VALUED BANKING RELATIONSHIPS

We take pride in the look and feel of our banking offices. During the year, we
remodeled twenty of our banking offices, relocated four banking offices to
significantly better locations, and expanded our footprint by opening new
offices in Walnut Creek, North Oakland, Irvine, and in Kearny Mesa, San Diego.

The vision at CB&T is to create California's best banking relationships. That
includes developing relationships that create outstanding value not only for our
shareholders, clients, and our associates, but also for the communities we
serve. In that regard, in 2000, CB&T increased its SBA lending by over 150%,
instituted a statewide initiative for acquisition/rehab of residential housing
for nonprofits, received the Department of Treasury's "Bank Enterprise Award"
for servicing distressed areas in California, and opened up a full-service
banking facility in the under-served Temescal district of North Oakland. In
addition, the bank received regulatory approval for the opening of a new
full-service banking office in East Palo Alto, another under-served community
that has been without a full-service banking office for 20 years. This office is
scheduled to open in the 3rd quarter of 2001.

CB&T thanks Zions for both the opportunity and the pleasure of being a part of
its "Collection of Great Banks."

/s/Robert G. Sarver
Robert G. Sarver
Chairman and CEO

TRUST ID

Need some ID for an online transaction? Want to sign the mortgage papers via
e-mail? With just one TrustID(R) digital certificate, you'll be able to do
that--and more. Digital Signature Trust Co., an affiliate of Zions
Bancorporation, developed TrustID in partnership with the American Bankers
Association. It is the first digital certificate designed to be universally
accepted for online transactions. It's only appropriate that Zions became the
first bank in the country to issue TrustID digital certificates to banking
customers. Visit www.abatrustid.com for more information.

[GRAPHIC OF HALL'S EXCELSIOR BANK ANTIQUE BANK APPEARS HERE]

HALL'S EXCELSIOR BANK
Designer: John Hall
Manufacturer: J. & E. Stevens Company, Cromwell, CT
Patented: 1869
Original price: $0.60
Current Value: $1,000

Instructions: Pull the doorbell. The cupola's top lifts and a small wooden
monkey emerges, wagging his head. Place a coin on the desk. The monkey and desk
disappear, depositing the money.

NEVADA STATE BANK

"Hall's Excelsior Bank" is considered the first cast iron mechanical bank and an
essential piece to complete any serious bank collection. As one of the earliest
mechanical banks, "Hall's Excelsior" proved to be immediately popular. The same
could be said for Nevada's oldest state-chartered bank, Nevada State Bank.
Nevada State Bank's clients have long appreciated the statewide branches that
offer consumer, small business, real estate, and corporate banking services in
over 60 locations. They've also enjoyed the convenience of NSB's 31 supermarket
branches with extended and weekend hours. It just goes to show you that, in the
end, it doesn't take a collector to appreciate a classic that's built to last.

SELECTED HIGHLIGHTS

INCREASED STATEWIDE BANKING Nevada State Bank's merger with Pioneer Citizens
Bank was completed in 1999, increasing the bank's presence in the growing
northern Nevada market. The merger gave NSB nearly $2 billion in deposits
and--with a statewide 12% market share--made Nevada State Bank the third largest
bank in Nevada.

COMMUNITY BANKING AND MORE Nevada State Bank, founded in 1959 in Las Vegas, and
Pioneer Citizens Bank, founded in 1965 in Reno, attribute their success to their
community bank roots. Thanks to their staffs' continued focus on personal
service, as well as their commitment to local communities, Nevada State Bank is
Nevada's largest community bank. And thanks to the resources and backing of
Zions Bancorporation, NSB has become much more.

INCREASED WEB PRESENCE NSB already offers a full array of online banking
services. In addition, the bank recently established a premier partnership with
America Online. NSB will be the exclusive financial service sponsor of Digital
City Las Vegas, an interactive search engine offering in-depth overviews of
cities throughout the U.S. The strategic partnership provides direct links to
Nevada State Bank's web site.

QUICK FACTS

Market Share of bank Deposits: 12%
State Rank by Bank Deposits: 3rd
Assets at Year End: $2.4 billion
Deposits at Year End: $2.0 billion
Offices: 60
In-Store Offices: 31
New Branches in 2000: 3
ATMs: 84
Full-Time Employees: 701

DEAR SHAREHOLDER,

Nevada State Bank falls under Zions Bancorporation's guiding principle of a
"Collection of Great Banks." That perhaps serves as an efficient way to condense
our feelings about the bank today, and what we strive to be tomorrow--a great
bank, and a great contributor.

INCREASED GROWTH, INCREASED CONVENIENCE

For several years, Nevada has been the fastest-growing state in the nation. We
have seen population gains, increasing employment, and a booming business
expansion that has led or competed for the top spot in these, and a host of
other, economic and business-health indices. Clearly, our objective is to
continue to capitalize on this vibrant situation.

Nevada State Bank, with $2.4 billion in assets, now ranks as the third-largest
bank in the state, a direct result of the merger at the end of 1999 of the
42-year-old Nevada State Bank and the 37-year-old Pioneer Citizens Bank. The
banks were nearly equal in size, but had somewhat differing business plans when
it came to target markets.

With 46 banking offices spanning from Elko in eastern Nevada, Reno in the
northern part of the state, and Las Vegas/Henderson/North Las Vegas in the
south, NSB is truly statewide. A recent survey we conducted among bank customers
in Nevada determined that 51% of the respondents bank where they do for
convenience. NSB's wide branch network offered this convenience and caused the
bank to cast itself as a "retail-oriented" bank, with some 138,000 accounts. It
should be noted that "convenience" today, in this technology-driven world, isn't
only equated to geographic location of branch offices, but also to the
availability of step-saving, time-saving electronic conveniences--and that is
supported by 85 NSB ATMs and state-of-the-art electronic products offered by the
Zions Bancorporation parent.

Pioneer Citizens Bank, with 14 offices in northern and southern Nevada and
38,000 accounts, can best be characterized as a "commercial or business" bank.
It was clear to those seeking the merger that the two banks complemented each
other.

COMMUNITY BANKING

Both NSB and Pioneer Citizens Bank, each with their long histories as local
state-chartered banks, built their assets and reputations on being "community"
banks. Community banks can be defined as local banks with limited geographic
service areas, under independent ownership, whose personal service focus is the
driving force in obtaining and retaining customers. In that sense, not much has
changed for the two banks. Although a member of the Zions' "Collection of Great
Banks," the new NSB enjoys and markets itself on the autonomy derived from
having its name and operations being largely distinct from a large holding
company structure. This more decentralized management and organizational style
is atypical of large banking companies, and should be viewed as a genuine
strength and competitive advantage. In short, NSB is to a great extent operated
as a local business.

Once you examine what has made NSB and Pioneer Citizens Bank successful, it's
easy to remember that banking is still a people business. We want all employees
to take ownership of a client's needs or problems; selling a

product is less important than developing a relationship. We recognize that when
you treat a person with respect, you receive respect in return. In the end, only
the customer can define a job well done.

Although by strict definition, the size and ownership of NSB may disqualify
it as a "community bank," everything else suggests otherwise. Our philosophy,
our mode of doing business, attitude, and approach to customer service--all
these things define us as "a bank for the community."

MOVING FORWARD

Nevada State Bank has history. Lots of it. It also has a lot of pride. These are
intangibles that don't appear in our product list or financial statements, but
they remain a part of the foundation on which we continue to build the bank.
These intangibles, combined with the competitive advantage of 60 banking
offices, will continue to make Nevada State Bank a better way to bank.

2000 was a challenging year. Our efforts were heavily devoted to untangling the
fallout from the protracted and unsuccessful local First Security Bank merger,
and that meant returning to the basics, the fundamentals of banking. It was a
challenge. Our staff performed well and met the challenge, and we are proud of
our standing today.

In 2001, we will continue to make improvements to better serve our clients. We
have introduced streamlined processes and procedures that make our work easier
and that raise the convenience factor for our clients, including the opening of
three branches last year. Five more are scheduled for 2001. We have a keen eye
on the expense side of our operations and are making a concerted effort to
improve our earnings performance. We have the people to get the job done, and
done right. Our outlook on 2001? In a word, optimistic.

Nevada State Bank of today is really a collection of two great banks. We are
proud to be part of the Zions Bancorporation organization.

Sincerely,

/s/William E. Martin
William E. Martin
Chairman, President and CEO

ENTERVAULT

Soon there will be plenty of places to store digital documents online, but very
few will be subject to federal oversight. In 2000, Zions announced the founding
of EnterVault,(TM) a secure, long-term storage provider for electronic data and
documents. Customers can store important items such as financial records, wills,
or personal documents.

The service has multiple levels of access security, including digital signatures
issued by Digital Signature Trust. If approved by the Office of the Comptroller
of the Currency (OCC), EnterVault will become the first national bank subsidiary
to receive regulatory sanction for Internet storage. For more information, visit
us at www.entervault.com.

[GRAPHIC OF "INDIAN SHOOTING BEAR" ANTIQUE BANK APPEARS HERE]

INDIAN SHOOTING BEAR
DESIGNER: Charles Bailey
Manufacturer: J. & E. Stevens Company, Cromwell, CT
PATENTED: Circa 1883
ORIGINAL PRICE: $0.70
CURRENT VALUE: $2,700

Instructions: Draw back the gun sight, insert a paper cap and press the button.
The gun fires and the coin is shot into the bear's chest. Originally advertised
as the "Bear Hunt Bank," it was a popular seller for many years. However, the
Indian's back feathers are fragile, making a complete model a rare find.

NATIONAL BANK OF ARIZONA

National Bank of Arizona was added to the Zions collection in 1994. Since then,
NBA has seen a 443% increase in assets, a 412% increase in deposits, and a 566%
increase in net income. As part of Zions' "Collection of Great Banks," NBA
maintains its flexibility to operate as a community bank while offering its
customers greater depth of resources. Much like the "Indian Shooting Bear" bank,
its value in the collection is assured due to a rare quality in
banking--completeness.

SELECTED HIGHLIGHTS

BUSINESS FOCUS Although NBA continues to expand retail branch operations, its
primary focus remains on business and professional banking segments.

ACQUISITION In the fall of 2000, NBA strengthened its presence in northern
Arizona with the acquisition of five new branches from the Prescott-based County
Bank. Later in December, NBA reached a definitive agreement to purchase the nine
Arizona branches of Pacific Century Bank (approximately $400 million in
deposits, $225 million in loans).

STRONG LOAN PORTFOLIO NBA's net loan losses totaled less than .02% of loans. The
national average is near .20%.

EXPANSION NBA projects six new branches for 2001.

CUSTOMER SERVICE NBA's commitment to its founding principle--that banking is a
local business--enables it to meet the needs of all its customers in all of the
communities it serves.

BUSINESS SUPPORT Focus groups in 2000 reaffirmed that NBA bankers know their
customers and their customers' businesses. NBA works closely to help them manage
their businesses by providing financial counseling and structuring sound
financing programs.

EXPERIENCE & LOYALTY Low employee turnover allows customers to build long-term
relationships with experienced bankers. Consequently, NBA maintains a strong
base of loyal customers.

QUICK FACTS

Market Share of bank Deposits: 4%
State Rank by bank Deposits: 4th
Assets at Year End: $2.0 billion
Deposits at Year End: $1.6 billion
Offices: 41
ATMs: 38
Acquisitions in 2000: County Bank;
Pacific century branches (announced)
Full-Time Employees: 619

DEAR SHAREHOLDER,

Consistency has been the hallmark of National Bank of Arizona. Since joining the
"Collection of Great Banks" in 1994, National Bank of Arizona ("NBA") has
remained committed to increased value for our shareholders. In fact, in our
16-year history, National Bank of Arizona has built a reputation of consistent,
profitable growth.

CONSISTENT VALUE

Year after year, NBA has consistently and dramatically increased in
profitability and size. The value we have brought to you, the shareholder, has
been increased profitability in a growth market every year for the past seven
years of our relationship with Zions Bancorporation.

CONSISTENT FOCUS

We were founded as a small, community bank, with a focus on a distinct market
niche. Specifically, NBA serves small to mid-sized businesses, real estate
development, construction firms, and professional service firms. Today, we
continue our unwavering focus on that niche, recognizing that we can't be all
things to all people. But by serving this defined market, we have created a
recipe for success that has proven effective year in and year out.

We continue to remain loyal to our founding principle of serving our customers
with the quality and service of a community bank, but also recognizing that we
have the resources and support of a much larger bank in Zions. Services such as
cash management technology and an experienced trust and investment team allow us
to further enhance our business banking services at a local level.

CONSISTENT CREDIT STANDARDS

NBA has nurtured a strong credit culture with year 2000 loan losses totaling
less than two basis points--some 18 basis points under the national average. The
quality of our loans can be attributed to three areas of emphasis: 1) strict
adherence to documentation control, 2) sound underwriting standards that are
well understood and observed, and 3) the expertise and experience of our
officers, who are close to the customers, enabling them to anticipate financial
weaknesses and to address the potential frailty before it becomes unmanageable.

CONSISTENT GROWTH

Positioned as one of the top states for growth during the next 25 years, Arizona
has been a particularly fertile environment for growth. The year 2000 saw a
continued pace of balanced growth for the bank. The acquisition of
Prescott-based County Bank fortified NBA's presence in northern Arizona. NBA now
has 41 offices in 26 Arizona communities and 619 full-time employees. NBA is
Arizona's fourth-largest bank, with nearly $2 billion in assets.

CONSISTENT COMMUNITY CARE

NBA remains true to its founding principle of local banking with local people.
Recognizing that we serve many local communities, we have continued a tradition
of commitment to caring for the communities where we are located. That's why NBA
continues to donate significantly to nonprofit organizations, charities and
community events. Our employees have volunteered admirably in charitable groups,
local civic organizations, and school boards. Their dedication to community and
company stands as a testament to our success.

CONSISTENT PATH TO 2001

Our success and profitability in 2000 warrant reflection and a certain amount of
pride, but NBA has not become so successful by resting on our laurels. It is
with even greater dedication and enthusiasm that I look forward to 2001. For the
upcoming year, NBA has positioned itself to continue our profitability without
compromising the strategic focus we have preserved--especially in establishing
and maintaining quality, one-on-one relationships with our customers.

In December 2000, we announced that we reached a definitive agreement to acquire
the assets of nine Arizona offices of Pacific Century Bank. The Pacific Century
acquisition will provide NBA with approximately $400 million in deposits and
$225 in loans. The acquisition should be completed at the beginning of the
second quarter of 2001 and will mark a milestone of 50 statewide locations for
the bank.

In addition to the Pacific Century acquisition, NBA will open six new offices
throughout the state during 2001. With the addition of new offices, we continue
to celebrate the value of our employees with renewed vigor. NBA will continue to
support our employees' fundamental character of high-energy, quality work and
independent thinking. We will continue to develop programs to foster and nurture
training and development. Our employees have been the determining factor in our
consistent profitability and deserve to be recognized as such.

Strategic restructuring of senior management in 2001 will enable NBA to better
facilitate future growth opportunities, as well as positioning senior management
at a local level. Like Zions Bank, NBA will continue to stress local management
and decision making. Despite the size of the bank, we are regarded throughout
the state as a local bank with locally known management. It has been a major
strength of the bank for years and will clearly continue to be imperative to our
future success.

Much like Zions, NBA is a progressive company and active acquirer. We remain
open to in-state bank acquisitions that are compatible with our strategic market
focus and complementary to our growth goals.

CONSISTENT

Consistency has been the backbone of our bank. NBA has built a reputation as one
of Arizona's premier banks because of our ability to consistently perform--a
result of our consistent market focus, consistent management team, and the
consistent delivery of financial expertise.

/s/John J. Gisi
John J. Gisi
Chairman and CEO

GOVRATE.COM

Zions' new GovRate.com(TM) is one of the most comprehensive Internet trading
systems in the fixed income market. This unique Internet site provides
real-time, electronically executable U.S. Government securities quotes from
Zions Bank Capital Markets. Online trading is revolutionizing the government
securities market. With Zions' GovRate.com, now any institution can trade
odd-lots and round-lots with a primary dealer, from one bond to thousands. The
site also provides real-time pricing on discount, corporate, and municipal
securities. Visit us at www.GovRate.com.

[GRAPHIC OF "LEAP FROG" ANTIQUE BANK APPEARS HERE]

LEAP FROG
Designers: Charles G. Shepard & Peter Adams
Manufacturer: Shepard Hardware Co., Buffalo, NY
Patented: 1891
Original price: $20 in 1939
Current Value: $7,000

Instructions: Position the leaping boy behind the stooping boy. Place a coin in
the slot located in the tree trunk, then depress the lever at the rear of the
bank. The boy jumps over his companion and triggers a lever on the tree to make
the coin drop.

VECTRA BANK COLORADO

The premise behind a mechanical bank is simple: offer a sophisticated action to
encourage continued investment. To a large extent, a "Leap Frog" bank has a high
market value because its action is so sophisticated and unique. But if the bank
still performs--as this one does--its value skyrockets. Vectra Bank Colorado
understands the correlation between action and investment, performance and
value. That's why it offers sophisticated banking services, yet still maintains
a community banking orientation. By creating new lines of business which
emphasize corporate banking and corporate real estate lending, Vectra offers
stiff competition for the large national banks. In addition, Vectra offers
enhanced cash management services through its partnerships with other Zions
affiliates. With each added service, Vectra Bank Colorado continues to become
more valuable--and continues to leap ahead of its competition.

SELECTED HIGHLIGHTS

STRATEGIC INITIATIVES In an effort to drive long-term results, Vectra has
improved infrastructure, updated and enhanced the credit culture, and improved
earnings by a combination of cost containment and creation of new revenue
opportunities.

UNIQUE FOCUS Vectra has carved out its unique position in its marketplace by
organizing its branches to serve three distinct economic markets in Colorado:
the urban Front Range, the agricultural communities, and the mountain resorts.

LENDING LIMIT Vectra's $20 million lending limit meets the financing needs of
most Colorado companies. In addition, customers who need loans or credit lines
work directly with bankers holding approval authority.

TECHNOLOGY Check imaging allows customers to receive scanned images of each
cleared check, along with a monthly statement; and monthly statements on CD-ROM
add convenience for commercial account holders.

GROWTH REGION Colorado's workforce is one of the most highly educated in the
nation and continues to grow rapidly. Since 1994, Colorado's annual rate of
population growth has averaged 2.4%, well above the national average of .9%.

QUICK FACTS

Market Share of Bank Deposits: 3%
State Rank by bank Deposits: 5th
Assets at Year End: $2.2 billion
Deposits at Year End: $1.4 billion
Offices: 54
In-Store Offices: 4
ATMs: 88
Full-Time Employees: 874

DEAR SHAREHOLDER,

Vectra Bank is the fifth-largest bank in Colorado and is uniquely positioned to
be one of Colorado's premier banks. With 54 offices and assets of approximately
$2.2 billion, Vectra Bank is strategically poised to take advantage of
Colorado's continuing economic growth and prosperity. By organizing our branches
to serve three distinct economic markets--the urban Front Range, Colorado's
agricultural communities, and its mountain resorts--we have been able to carve
out a unique position in the marketplace. Unlike the large national banks that
have organized themselves around national lines of business, or small community
banks that can only serve a select market, Vectra Bank can provide the most
sophisticated banking services while maintaining a community banking
orientation.

THE GROWING COLORADO ECONOMY

Colorado's economic growth and prosperity serve to enhance our potential for
future growth and increased shareholder value. The Colorado economy remained
strong in 2000, helped by growth in major sectors such as high-tech
manufacturing, construction, tourism, agriculture, and the energy industry.
Colorado's workforce is one of the most highly educated in the nation and
continues to grow at twice the national average. Since 1994, Colorado's annual
rate of population growth has averaged 2.4%--well above the national average of
.9%. In 2001, Colorado's population is expected to grow to 4.35 million. The
cost of living in Colorado continues to increase annually, reflecting this
strong statewide growth.

ORGANIZED FOR COLORADO'S THREE DISTINCT MARKETS

To take full advantage of Colorado's robust, yet diverse economy, we have
organized our bank to emphasize the products and services that meet the unique
needs of the regional markets we serve.

The urban Front Range market encompasses the Denver/Boulder metro area and
the Colorado Springs metro area. There are significant business and retail
opportunities in this heavily populated market. We have increased our ability to
compete with large national banks by creating new lines of business emphasizing
Corporate Banking, Corporate Real Estate lending, and by partnering with other
Zions affiliates to offer enhanced cash management services. In addition to our
business banking initiatives, we continue to emphasize retail banking and strive
to give our branch personnel the tools they need to service their customers
effectively.

Vectra Bank's presence in Colorado's agricultural communities and its mountain
resorts continues to be a strong one. Our agricultural market segment includes
the farming communities of northeastern Colorado and southwestern Colorado.
Vectra Bank's mountain resort market includes the popular tourist areas of Aspen
and the Roaring Fork Valley, Steamboat Springs, Durango, and the Grand Junction/
Montrose area. Longstanding community relationships forged by our regional and
market presidents in these areas continue to allow us to compete effectively
against local community banks and take advantage of the unique opportunities in
these specialized markets.

STRATEGIC INITIATIVES TO INCREASE SHAREHOLDER VALUE

Today's Vectra Bank is the product of multiple acquisitions, with systems
conversions completed in the latter half of 1999. During the year 2000, the
management team identified a series of strategic initiatives to drive long-term
results for the bank. These initiatives included improving infrastructure,
updating and enhancing the credit culture, accelerating improvements in earnings
by a combination of cost containment, and creating new revenue opportunities.

The initiative to transform Vectra Bank's infrastructure included consolidating
back-office operations, developing consistent procedures, improving internal
controls, and minimizing operating losses. These initiatives resulted in
increased efficiencies while preserving and enhancing decision making at the
customer contact level.

Updating and improving the credit culture was also a critical initiative for
Vectra Bank. During the last year, we reorganized the credit approval function,
formalized written policies and procedures for problem loan administration,
built a formal special assets group, improved loan information reporting,
adopted a formal appraisal review process, and created a new construction risk
management position. We're already seeing significant improvements in all
aspects of loan administration.

To accelerate earnings gains, Vectra Bank put several cost management and non
interest income initiatives into place. Infrastructure improvements allowed for
a staff reduction of 50 FTE. Additionally, projects to resolve operational
issues, reduce waivers of fees on deposit accounts and loans, and improve the
check collection process were pursued. These initiatives improved the quality of
our service and contributed to substantial operating income improvements
realized throughout the year.

We established several new business units in 2000 to enable the bank to compete
more effectively in markets with significant revenue opportunities. These new
units were designed to capitalize on larger real estate loan opportunities and
middle market customer relationships. Both these lines of business allow Vectra
Bank to leverage the sophistication of our Zions banking partners in Utah and
California. Similarly, our international banking, Small Business Administration
lending, and cash management services all benefit from synergies derived from
Zions' partnerships.

2001 OUTLOOK

Vectra Bank is proud to be a part of the Zions' "Collection of Great Banks" and
is committed to making significant contributions to Zions Bancorporation
shareholders in the years ahead. The Colorado economy is strong, and we believe
the bank is strongly positioned to capitalize on today's opportunities.

/s/Bruce K. Alexander
Bruce K. Alexander
President and CEO

INTERNET BANKING

As a leader in Internet technology, Zions has one of the most functional banking
sites on the web. Customers can access account information, transfer funds, pay
bills, get insurance quotes, or order foreign currency. Zions Internet Banking
also allows customers to apply for insurance policies, consumer loans, and
credit cards online. Mortgage rate monitoring, mortgage loan tracking, and
online stock trading are also available. And for added convenience, account
information can be downloaded and imported into applications like Quicken,(TM)
Microsoft(R) Money, Microsoft(R) Excel or Lotus 1-2-3.(TM)

[GRAPHIC OF "TWO FROGS" ANTIQUE BANK APPEARS HERE]

TWO FROGS
Designer: James H. Bowen
Manufacturer: J. & E. Stevens Company, Cromwell, CT
Patented: 1882
Original price: $0.95
Current Value: $4,000

Instructions: Place a coin on the extended front feet of the small frog and
press the lever. The larger frog opens his mouth while the smaller frog kicks
the coin inside. The bank's patent originally called for a "sound producing
mechanism" to make the frog croak, but the mechanism was never implemented.

THE COMMERCE BANK OF WASHINGTON

As mechanical banks go, the "Two Frogs" bank is rather small. Its value,
however, is anything but. A combination of design, style, and clever action have
made it a desirable piece for any antique bank collector. The Commerce Bank of
Washington is equally collectible. If considered only in terms of offices and
employees, the bank is deceptively small. Its value, however, is not. TCB's
assets per employee ratio and efficiency ratio are remarkable. In addition, the
bank offers a degree of customer service that larger retail banks can never
match. That's the advantage of a smaller bank with a niche focus. Add to that
the depth of resources Zions provides, and you've got an amazing bank worthy of
any quality collection.

SELECTED HIGHLIGHTS

NARROW MARKET FOCUS The Commerce Bank of Washington focuses only on businesses
and high net worth individuals. Clients are carefully targeted before being
approached. Consequently, relationship managers become familiar with their
clients before a formal banking relationship is even established.

TAILORED SERVICE TCB ensures quality service by servicing fewer (approximately
2,500) but larger clients and maintaining a high employee-to-client ratio. This
allows TCB to tailor products and services for each client, resulting in
satisfied clients who feel their banking needs have been personally and
professionally addressed.

EXPERIENCED PROFESSIONALS TCB's relationship managers are senior professionals
with an average of 28 years of banking experience and a deep commitment to their
clients.

LOCALLY MANAGED All decisions are made in Seattle by people familiar with their
clients and their clients' needs. Because bankers at TCB are granted significant
authority, they can become more intimately knowledgeable about their clients'
financial activities. This allows them to make more accurate assessments of
banking requirements.

QUICK FACTS

Market Share of Bank Deposits: 1%
State Rank by bank Deposits: 12th
Assets at Year End: $0.5 billion
Deposits at Year End: $0.4 billion
Offices: 1
Full-Time Employees: 52

DEAR SHAREHOLDER,

The Commerce Bank of Washington (TCB) services the Puget Sound region of
Washington State for Zions Bancorporation. The bank was founded by a group of
seasoned local bankers in 1988 and became part of the Zions family in September
1998.

CREATED TO SERVE A UNIQUE MARKET SEGMENT

TCB was established to address the banking needs of two under-served local
market segments--small- to medium-sized local businesses and the private banking
market. It was the feeling of the bank's founders that these two segments were
losing their traditional local bank support due to the substantial bank
consolidation taking place in the greater Seattle marketplace.

In designing a business plan committed to reintroducing "an extraordinary level
of service" to these two segments, it was the belief of the bank founders that
they should design a bank solely around the needs of these two markets and not
try to "be all things to all people." Specifically, rather than deliver the
bank's products from the traditional branch network found in banks also serving
the broad consumer market, TCB operates from only one office location--off the
street in a downtown Seattle high-rise--and offers its clients a courier system
in lieu of branches to handle bank transactions.

Knowing that these two market segments expect experienced bankers in whom they
can entrust their most important financial decisions, the bank has hired
commercial bankers averaging 28 years of banking experience in the Puget Sound
region. These bankers are supported by an equally experienced group of customer
service personnel and support staff. These experienced relationship managers and
support staff have successfully built a reputation for the bank in Seattle for
providing a truly extraordinary level of service.

RAPID ASSET GROWTH

Interestingly, even though TCB ranks ninth in Puget Sound in total assets with
over $520 million, its staff numbers only 52 people, about one-quarter the staff
size of a traditional community bank of comparable asset size. By choosing not
to utilize a branch system and outsourcing some of its other activities, the
bank has succeeded in growing rapidly in asset size and capability while
remaining small enough internally to assure consistent delivery of products and
services.

What does all of this mean to the Zions shareholder? The concept of TCB has been
received very well in its marketplace. Since its inception, the bank has
experienced an asset growth rate in excess of 30% annually. Loans grew by over
27% in 2000, while deposits were up 43% over the average in 1999. With its
nontraditional delivery system and outsourcing of selected back-office
activities, the bank's business model has proven to be very profitable. In the
year 2000, the bank recorded a 40% gain in pre-tax earnings over the prior year.
Return on assets was 1.78% and return on equity 27.8%. The bank's efficiency
ratio of under 41% in 2000 demonstrates the power of its business model.

INCREASED RESOURCES

The Commerce Bank has benefited significantly from its merger into Zions. TCB
now has access to more sophisticated cash management and short-term investment
products for its business and high net worth clients. The needs of commercial
real estate construction in the market are now met by a team of real estate
lenders from Zions, co-located with the TCB office in Seattle. International
trade financing products and services are available through affiliate California
Bank & Trust. Our lending capacity has been enhanced by the investment of
subordinated debt into TCB from our parent. Our clients' out-of-state banking
needs throughout the West can be referred to our sister banks in Colorado, Utah,
Nevada, Idaho, Arizona, and California. We have benefited from the broader
product line and financial strength of Zions, while retaining the local
decision-making authority that we had before the merger. To us it is the best of
all worlds.

COMMUNITY COMMITMENT

Commitment to the community is an important part of our philosophy in building a
local bank for the Puget Sound marketplace. A corporate willingness to allow our
people the time for community organizations, as well as providing the financial
support for those organizations, is an essential part of that commitment.

The Commerce Bank has strongly held that corporate commitment since its
founding, and Zions has reinforced its support of the concept. Each senior
manager and relationship manager at TCB is expected to be meaningfully involved
in at least two community organizations of their own choosing. That individual's
time commitment is matched with financial support from the bank. TCB has a
reputation in its market of providing leadership for community organizations far
in excess of its staff size. We are very proud of our commitment to the
betterment of our community and the willingness of our staff to give of their
time to key community organizations.

While our bank is represented by the leadership positions in most of our
community's civic and cultural organizations, we are particularly proud of an
award we received this year for our efforts on behalf of the Compass Center, a
social services organization in downtown Seattle targeting the homeless
population. This organization provides the homeless with a variety of life
services, including banking accounts. Through some other volunteer support
provided by TCB staff, we learned of their need to automate the Center's banking
office to allow them to serve their homeless clients more efficiently. Three
members of TCB's management designed a hardware/software solution and then
united several major Washington banks, the City of Seattle, and several private
vendors in delivering the solution.

The joint effort solved a need (banking services for the homeless) that would
have been difficult for any one of the sectors to provide. By completion of the
project, the Compass Center went from a paper-based operation running literally
out of a shoebox to an automated office, including its own Fed routing number, a
newly upgraded computer network, an up-to-date banking software platform, and an
automated cash dispensing unit. The Center now receives a large percentage of
deposits for homeless clients via electronic entry from the federal government,
increasing safety and efficiency. TCB provides the Center with ongoing support
in the form of computer and ACH processing, training, and coordination of
donated services. A member of the original project team from TCB has become a
member of the Compass Center's Board of Directors. For its efforts in taking
leadership in this innovative program, TCB received the 2000 CRA Award for
Community Development from the Federal Reserve Bank of San Francisco and the
Federal Home Loan Bank of San Francisco.

The Commerce Bank is very proud to be a member of the "Collection of Great
Banks." It is a concept that allows us to continue to manage our bank to the
needs of our local clients and changing local market conditions while benefiting
from the substantial financial and product resources of Zions Bancorporation.
Most importantly, we continue to act and think like a small local bank, meeting
the banking and community needs of our local market.

/s/James C. Hawkanson
James C. Hawkanson
Managing Director and CEO

MYALERTS

For those who want to know when the balance on their checking account is low, or
if a CD just hit a good rate, Zions now offers MyAlerts.(TM) Using TrustID(R)
technology, MyAlerts automatically sends an encoded e-mail notice regarding the
customer's account information. Users have the option of receiving e-mails about
account transactions on a monthly, weekly, or daily basis. MyAlerts can even be
used to notify customers of personal events such as birthdays and anniversaries.
Zions Bank customers can sign up now at www.zionsbank.com.

[GRAPHIC OF "PROFESSOR PUG FROG'S GREAT BICYCLE FEAT"
ANTIQUE BANK APPEARS HERE]

PROFESSOR PUG FROG'S GREAT BICYCLE FEAT
Designer: Charles Bailey
Manufacturer: J. and E. Stevens Co., Cromwell, CT
Manufactured: Circa 1890 (No patent)
Original Price: $0.71
Current Value: $9,500

Instructions: First, wind the spring, then place a coin on the rear wheel of the
bicycle and press the lever. The frog on the bicycle makes one full revolution,
catapulting the coin into the clown's basket. While returning to its original
position, the frog kicks Mother Goose's book up, sending her tongue wagging.

OTHER AFFILIATES

Even the most sophisticated people react to "Professor Pug Frog's Great Bicycle
Feat" essentially the same way. You explain to them how it is going to work and
what is going to happen. You point to the pieces that will move, the parts that
will wind. You point and talk and explain, and they nod. Then you put a penny on
the rear wheel of the bicycle, press the lever, and SNAP! They jump. Finally,
they understand why this mechanical bank is so valuable. It's also true for many
of Zions' affiliates. You can explain TrustID(R), talk about GovRate.com,(TM) or
explain the processes handled by Zions Management Services, but in the end, they
must be seen and experienced. Only then do people step back and say, "Wow!"

ZIONS MANAGEMENT SERVICES COMPANY

Zions Management Services Company was formed in 1998 to provide cost-effective
back-office support to the Zions banks. The primary services provided by ZMS are
Customer Service, Bank Operations, Investment Management, Finance and Human
Resources, and Credit and Compliance.

CUSTOMER SERVICE The Customer Service division allows clients quick, convenient
access to account information 24 hours a day, seven days a week, from any phone
or PC. Zions' Call Center, which works in conjunction with Zions' Reddi-Response
automated telephone service, allows customers to obtain account information and
process requests anywhere at any time. During 2000, Reddi-Response delivered
21,769,148 minutes of service, and Call Center operators provided an additional
12,836,152 minutes--equivalent to nearly 66 years of telephone customer service.
By consolidating affiliate call centers to an efficient central location,
cost-per-minute expenses declined by 17% from 1999.

BANK OPERATIONS Bank Operations includes Items Processing, Corporate Services,
System Support, ATM Operations, and Bankcard Operations. As Zions continues to
consolidate its operations, these departments have become responsible for
servicing various combinations of Zions First National Bank, Nevada State Bank,
National Bank of Arizona, and Vectra Bank Colorado. During the year 2000, Bank
Operations processed a total of 215,889,267 items, 11,716,631 pieces of mail,
and 10,068,622 ATM transactions.

INVESTMENT PORTFOLIO Managing a bank investment portfolio requires increasingly
sophisticated techniques. Consequently, Zions Management Services manages the
portfolio of each individual bank. Not only is it more efficient, but it also
provides each bank with greater investment expertise than a community bank would
typically have.

FINANCE AND HUMAN RESOURCES Zions has reduced the expenses of its affiliate
banks and enhanced services and benefits by centralizing many corporate finance
and human resources functions.

CREDIT ADMINISTRATION AND COMPLIANCE Zions' model of individual community banks
allows each bank to make credit decisions based on their knowledge of the
customer. To assist in that process, Zions' Credit Administration supports
hundreds of Zions' bankers across eight states to help ensure consistently high
credit quality while facilitating fast response times.

Credit Administration includes a retail loan center for efficient processing and
underwriting of retail loans for affiliate banks. The center also provides
automated services, such as Loan-by-Phone. In addition, Credit Administration
provides a corporate compliance function to assist each bank in meeting the
numerous demands of regulatory compliance.

DIGITAL SIGNATURE TRUST CO.

Digital Signature Trust Co. (DST), an affiliate of Zions Bancorporation, was
established in 1996 as the first licensed certificate authority in the United
States. Since then, DST has been both a pioneer in digital identity
authentication and a leading-edge provider of digital certificate services. With
the support of the American Bankers Association, combined with comprehensive
risk management warranties, DST has transformed technology-based digital
security solutions.

DST specializes in Universal Digital IDs, a platform that employs
technology-based solutions utilizing Public Key Infra-structure (PKI). In
essence, the technology allows an organization to positively identify its
patrons. This in turn enables reliable e-commerce and cross-enterprise
interoperability. Consequently, Universal Digital IDs are ideal for streamlining
financial, healthcare, e-business, or government transactions.

After President Clinton signed the federal "E-SIGN Bill" in June of 2000, Zions
Bank was the first bank in the country to offer TrustID(R) digital certificates
to its customers.

As the only PKI service provider subject to federal regulatory oversight, DST
has secured several federal, state, and local contracts. Currently, DST supports
a number of government organizations, including the States of California, Utah,
and Washington; the Social Security Administration; the Department of Veterans
Affairs (VA); and the Federal Emergency Management Agency (FEMA). In July of
2000, DST entered into a sole agency agreement with Nippon System Development
Co. Ltd., entitling NSD to be the exclusive reseller of DST's certificate-based
solutions in Japan. In December, VISA(TM) U.S.A. also selected DST to provide
certificate services for its smart VISA Access application, a component of
VISA's smart VISA technology platform.

ZIONS SMALL BUSINESS FINANCE

During fiscal 2000, Zions Bancorporation was the seventh largest SBA 7(a) lender
in the nation, generating 705 loans totaling $108 million. Zions Bank was
recognized as the leading SBA lender in Utah for both total loans and minority
lending. In fact, the number of SBA loans Zions granted to women alone was
greater than the total number of SBA loans granted by any other Utah bank.

Zions Bank is also the largest provider of SBA 504 financing in the nation.
Zions created the secondary market for SBA 504 loans and completed the
first-ever sale of these loans in 1994.

CAPITAL MARKETS

Zions Bank Capital Markets is one of only 26 primary U.S. Government securities
dealers and the only primary dealer headquartered west of the Mississippi River.
Its customer base is comprised of global institutions such as major
corporations, banks, insurance companies, municipalities, and foreign central
banks. As a primary dealer, Zions makes markets in U.S. Treasuries, Agencies,
Municipals, Small Business Administration (SBA) Pools,
Mortgage-Backed/Asset-Backed Securities, and Repurchase Agreements. Zions also
offers Liquid Asset Management, an investment service that enhances earnings on
cash while maintaining liquidity.

Zions provides online trading through Zions Direct Online Brokerage
(www.zionsdirect.com), the online brokerage arm of Zions Investment Securities,
Inc. (ZISI), a member of the NASD and SIPC. Zions Direct offers free real-time
quotes, free news, free access for reviewing personal portfolios, and
inexpensive online trading of stocks, options, and over 6,000 mutual funds.
Other services include estate planning, investment management, financial
planning, registered investment advisors services, and retirement planning.

Electronic trading of U.S. Treasury and Agency issues is available through Zions
on five electronic delivery platforms. Institutional investors with the
Bloomberg system can access Zions at BBT (GO) and Zions (GO), or via the
Internet at GovRate.com,(TM) OddLot.com, or MoneyLine.com. Zions' proprietary
site, GovRate.com, also provides a search engine for municipal, corporate, and
agency securities. On average, Zions expedites over $2 billion in trades a day.

PUBLIC FINANCE

Not only does Zions Bank underwrite and purchase municipal bonds, it also
provides financial advisory service. For four consecutive years, the combined
financial advisory business of Zions has been ranked in the nation's top ten
municipal financial advisors.

Zions' top ten ranking includes the combined financial advisory business of
Zions Bank Public Finance (Utah and Idaho), Howarth & Associates (Nevada),
National Bank of Arizona, and Kelling, Northcross & Nobriga (California).

ZIONS INSURANCE AGENCY

Established in 1984, Zions Insurance Agency is an independent agency
representing numerous insurance carriers. Insurance offerings capitalize on a
tremendous opportunity to develop and sell fee income products to existing
clients. In addition, insurance products complement existing bank products while
using very little capital or overhead. Consider the results: For the year 2000,
Zions increased the number of clients served to over 35,000, while salary costs
were down 12.5%.

ZIONS AGRICULTURAL FINANCE

Zions Agricultural Finance is the nation's top originator of secondary market
agricultural real estate mortgage loans through the Federal Agricultural
Mortgage Corporation (Farmer Mac). Zions provides financing for capital
expansion, farm and ranch land acquisitions, and refinances existing debt. Since
1996, Zions Agricultural Finance has held a primary contract with Farmer Mac to
underwrite and service loans sold by financial institutions to the secondary
market. In addition, Zions offers proprietary agricultural finance products to
over 150 brokerages and banks in 48 states. Consequently, over the year 2000,
Zions serviced 1,114 loans totaling over $463 million and closed 128 loans
totaling over $58 million.

INTERNATIONAL BANKING GROUP

The International Banking Group offers a full range of international banking
services, including trade financing, letters of credit, documentary collections,
and foreign exchange. During 2000, the group handled over $2 billion in
international transactions.

In 2000, a new, state-of-the-art Internet based system, CBTrade(R), was
developed and installed. With CBTrade, customers can now initiate international
trade transactions from their own offices, avoiding the traditional paper
application. The new system also allows the customer to determine the status of
documentary collections and letters of credit from their own PC at any time. Our
Trade Payment Wizard$(TM) are used over the Internet by a host of companies
worldwide to initiate and complete international payments. Customers have found
this state-of-the-art tool easy to use, reliable, and fast.

[GRAPHIC OF COINS APPEARS HERE]

MANAGEMENT'S COMMENTS

PERFORMANCE SUMMARY

Zions Bancorporation and subsidiaries (the Company) reported net income of
$161.7 million or $1.86 per diluted share in 2000. Net income decreased 16.7%
from the $194.1 million earned in 1999, which was up 35.4% over the $143.4
million earned in 1998. On a diluted net income per share basis, earnings
decreased 17.7% to $1.86 in 2000, compared to $2.26 in 1999. Per share earnings
increased from $1.75 to $2.26, a 29.1% increase, from 1998 to 1999. Earnings for
2000 included pre-tax merger-related charges of $45.5 million related primarily
to a terminated merger with First Security Corporation and an impairment loss on
First Security Corporation common stock of $96.9 million. Excluding the
merger-related expense and impairment loss, net income for 2000 was $249.7
million, an increase of 17.5% over the $212.5 million of net income before
merger-related charges earned in 1999. Net income before merger-related charges
for 1999 increased 26.9% over the $167.5 million earned in 1998. On a diluted
net income per share basis, net income before merger-related charges was $2.87
per diluted share for 2000, an increase of 15.7% over $2.48 earned in 1999,
which was up 21.6% over the $2.04 earned in 1998.

Operating cash earnings were $281.4 million or $3.23 per share for 2000, an
increase of 15.9% and 14.1%, respectively, over the $242.8 or $2.83 per share
for 1999, which was up 24.9% and 19.4% over the $194.4 million or $2.37 per
share for 1998. The return on average shareholders' equity and the return on
average assets on an operating cash basis were 27.40% and 1.34%, respectively,
for 2000, compared to 26.77% and 1.26% for 1999 and 26.56% and 1.41% for 1998.

The Company is providing its earnings performance on an operating cash basis
since it believes that its cash operating performance is a better reflection of
its financial position and shareholder value creation as well as its ability to
support growth and return capital to shareholders than reported net income.
Operating cash earnings are earnings before the amortization of goodwill and
core deposit intangible assets and merger-related charges.

Return on average shareholders' equity was 9.65% and the return on average
assets was 0.74% for 2000, compared with 12.42% and 0.97%, respectively, in
1999, and 10.98% and 1.00%, respectively, in 1998. Dividends per share were
$0.89 in 2000, an increase of 23.6% over $0.72 in 1999, which were up 33.3% from
$0.54 in 1998.

During 1999 the Company acquired Regency Bancorp in a transaction accounted for
as a purchase. Results of operations for Regency are included from October 1,
1999. The acquisitions of Vectra Banking Corporation, FP Bancorp, Inc., and The
Sumitomo Bank of California during 1998 were accounted for as purchases. The
results of operations for Vectra Banking Corporation and FP Bancorp, Inc. were
included from the effective dates of acquisition, January 1, 1998 and April 1,
1998, respectively, which resulted in immaterial differences to results of
operations. Results of operations for The Sumitomo Bank of California are
included from October 1, 1998, the actual date of acquisition. Results of
operations cannot be compared directly between periods because of these
transactions. The Company's acquisitions and related merger charges are further
described in Note 3 of the Notes to Consolidated Financial Statements.

The performance of the Company was driven by a 15.5% growth in average loans and
leases and a 9.5% growth in average total earning assets resulting in an 8.4%
increase in taxable-equivalent net interest income to $821.5 million in 2000.
Noninterest income, excluding the impairment loss on the First Security
Corporation common stock, increased 8.5% to $289.1 million in 2000, with strong
growth in trust income and loans sales and servicing income. Noninterest
expense, including merger expenses, increased 5.8% to $720.8 million in 2000.
Excluding merger expenses, noninterest expense increased 3.3% over 1999 to
$675.3 million. The Company's operating cash "efficiency ratio", or noninterest
expenses, excluding amortization of goodwill and core deposit intangibles and
merger-related expenses, as a percentage of total taxable-equivalent net
revenues, improved to 57.5% in 2000, compared to 60.3% in 1999 and 61.3% in
1998.

The Company's provision for loan losses totaled $31.8 million for 2000, compared
to $18.0 million for 1999 and $14.0 million for 1998. The increased provision
for loan losses for 2000 is mainly the result of the robust loan growth
experienced by the Company. Net charge-offs were $42.4 million, or 0.31% of
average loans and leases in 2000, compared to $29.0 million or 0.25% in 1999 and
$15.8 million or 0.21% in 1998. Nonper-forming assets decreased to $71 million
or .49% of loans and other real estate owned as of December 31, 2000 from $75
million or .58% as of December 31, 1999.

BUSINESS SEGMENT RESULTS

The Company manages its operations and prepares management reports with a
primary focus on geographical area. Operating segment information is presented
in Schedule 1 and Note 20 of the Notes to Consolidated Financial Statements. The
Company allocates centrally provided services to the business segments based
upon estimated usage of those services. The operating segment identified as
"Other" includes Zions Bancorporation (the Parent), several smaller business
units and inter-segment eliminations.

ZIONS FIRST NATIONAL BANK AND SUBSIDIARIES

Zions First National Bank and Subsidiaries (ZFNB) includes the Company's
operations in Utah and Idaho. ZFNB experienced strong loan growth in 2000, with
loans increasing 19.6% over 1999 to $4.9 billion. Deposits increased 9.5% during
the year to $4.2 billion. Operating cash earnings were $107.4 million in 2000, a
decrease of 7.2% from $115.7 million earned in 1999, which were up 30.1% over
$89.0 million earned in 1998. Net income decreased 8.6% to $104.4 million
compared to $114.2 million for 1999, which was up 31.2% from the $87.1 million
earned in 1998. The decrease in net income for 2000 compared to 1999 results
mainly from decreased pre-tax income of $50.9 million from investments in
venture capital entities and increased pre-tax losses of $7.6 million from a
subsidiary, Digital Signature Trust Company. The increase in net income for 1999
compared to 1998 results mainly from a $27.2 million increase in noninterest
income and a $8.0 million decrease in other noninterest expense. The increase in
noninterest income for 1999 compared to 1998 is mainly attributable to gains
experienced by a venture capital subsidiary, Wasatch Venture Corporation, and
increased income from investments in bank-owned life insurance. The decrease in
noninterest expense for 1999 included a $4.6 million decrease in amortization of
mortgage servicing rights resulting from the sale of mortgage servicing rights
during the first quarter of 1999.

CALIFORNIA BANK & Trust

Results of operations for California Bank & Trust for the years presented are
not directly comparable because of acquisitions accounted for as purchases
during 1999 and 1998. See Note 3 of the Notes to Consolidated Financial
Statements for further information about the acquisitions.

Operating cash earnings were $92.9 million for 2000, up 34.6% from the $69.0
million earned in 1999, which were up 79.7% from the $38.4 million earned in
1998. California Bank & Trust reported net income of $74.1 million for 2000
compared to $49.4 million for 1999 and $16.4 million for 1998. In 2000 net loans
and leases increased 6.5% to $4.9 billion and deposits increased 3.0% to $5.6
billion from year end 1999. Net interest income for 2000 increased $33.5 million
or 12.9% from 1999, while other noninterest income increased $7.8 million or
21.7%. Noninterest expense excluding merger-related expense and amortization of
intangibles increased a modest 0.8%. The increase in earnings for 1999 compared
to 1998 resulted mainly from the acquisitions consummated during those years and
increased efficiencies attained during 1999. Net income for 1998 included income
only for the last three months of 1998 from the acquisition of The Sumitomo Bank
of California. The Bank incurred pre-tax merger charges of $5.6 million during
2000, $9.4 million during 1999 and $27.5 million during 1998.

NEVADA STATE BANK

Operating cash earnings for Nevada State Bank were $27.5 million for 2000, down
5.2% from the $29.0 million earned in 1999, which were up 2.5% from $28.3
million earned in 1998. Net income increased 23.2% to $22.8 million as compared
to $18.5 million in 1999 and $27.0 million for 1998. Earnings for 2000 included
a provision for loan losses of $10.1 million compared to provisions of $3.7
million in both 1999 and 1998, which covered increased credit losses in 2000.
During 2000 Nevada State Bank incurred $5.3 million of pre-tax merger expense
related to the terminated First Security Corporation merger and the conversion
of Pioneer Bancorporation compared to $12.6 million of merger-related expense
incurred during 1999. Net loans at year end 2000 increased 3.2% from 1999, while
total deposits increased 5.9%.

NATIONAL BANK OF ARIZONA

Operating cash earnings at National Bank of Arizona were $32.0 million for 2000,
up 15.9% from the $27.6 million earned in 1999, which were up 16.5% from the
$23.7 million of cash earnings in 1998. Net income was up 15.4% to $30.2 million
in 2000, compared to $26.2 million in 1999 and $22.2 million for 1998. The
increases for both 2000 and 1999 were driven by strong loan growth. Net loans
increased 22.8% to $1.5 billion at year end 2000, and net loans increased 19.8%
during 1999. Net interest income for 2000 was up 20.0% from 1999. The provision
for loan losses was increased to $3.6 million for 2000, a 48.8% increase from
the $2.4 million provided for in 1999.

VECTRA BANK COLORADO

In January 1998 the Company acquired Vectra Banking Corporation in a transaction
accounted for as a purchase. During 1998 the Company also acquired eight smaller
banks in Colorado. The acquired banks, along with previously owned Colorado
banking organizations, were merged during 1998 under the name of Vectra Bank
Colorado, National Association. See Note 3 of the Notes to Consolidated
Financial Statements for further information about the acquisitions.

Operating cash earnings for Vectra Bank Colorado were $18.3 million for 2000, up
18.8% from the $15.4 million earned in 1999, which were down 13.0% from the
$17.7 million earned in 1998. Net income increased 190.0% to $5.8 million from
$2.0 million in 1999, which was down 44.4% from the $3.6 million earned in 1998.
Improved earnings for 2000 resulted primarily from improved operating
efficiencies. Noninterest expense excluding merger-related expense and
amortization of intangibles decreased 4.9%, while net interest income increased
7.2% and noninterest income increased 17.5% from 1999 levels. The provision for
loan losses was increased to $9.1 million for 2000, compared to $2.6 million for
1999. The increased provision for 2000 was made to cover increased credit
losses. The decreased earnings for 1999 compared to 1998 were, in part,
attributable to the expenses related to the conversion of acquired banks to
Zions' systems.

THE COMMERCE BANK OF WASHINGTON

The Commerce Bank of Washington was acquired in September, 1998 and accounted
for as a pooling of interests. Net income for 2000 was $7.9 million compared to
net income of $5.7 million for 1999. The Bank experienced loan growth of 20.8%
for 2000, which contributed to a 26.6% increase in net interest income.

OTHER

Other includes the Parent only and other various nonbanking subsidiaries. The
$61.6 million increase in net loss for 2000, compared to 1999, is mainly due to
the recognition of a $96.9 million pre-tax impairment loss during the first
quarter on First Security Corporation common stock and $28.2 million of pre-tax
merger expense mainly related to the terminated First Security Corporation
merger, offset in part by gains of $23.6 million from the subsequent sale of the
First Security Corporation common stock. The increased net loss of $9.1 million
for 1999 compared to 1998 is mainly attributable to increased net interest loss
incurred by the Company of $10.4 million related to increased borrowings for the
purchase of First Security Corporation common stock and other matters.

INCOME STATEMENT ANALYSIS

NET INTEREST INCOME, MARGIN, AND INTEREST RATE SPREADS

Net interest income on a taxable-equivalent basis is the difference between
interest earned on assets and interest paid on liabilities, with adjustments
made to present income on assets exempt from income taxes comparable to other
taxable income. Changes in the mix and volume of earning assets and
interest-bearing liabilities, their related yields and overall interest rates
have a major impact on earnings. In both 2000 and 1999, taxable-equivalent net
interest income provided 74.0% of the Company's net revenues, excluding the
impairment loss on the First Security Corporation common stock, compared with
73.5% in 1998.

The Company's taxable-equivalent net interest income increased by 8.4% to $821.5
million in 2000, as compared to $757.7 million in 1999 and $583.9 million in
1998. The increased level of taxable-equivalent net interest income was driven
by a 9.5% and 37.1% growth in average earning assets for 2000 and 1999,
respectively. The Company manages its earnings sensitivity to interest rate
movements, in part, by matching the repricing characteristics of its assets and
liabilities and, to a lesser extent, through the use of off-balance sheet
arrangements such as caps, floors and interest rate exchange contracts. Net
interest income from the use of such off-balance sheet arrangements for 2000 was
$2.6 million, compared to $8.3 million in 1999 and $6.9 million in 1998.

The increase in net interest income was partially offset by the continued
securitization and sale of loans. Securitized loan sales convert net interest
income from loans to gains on loan sales and servicing revenue reported in
noninterest income. Loan sales improve the Company's liquidity, limit its
exposure to credit losses, and may reduce its capital requirements.

The net interest margin, the ratio of taxable-equivalent net interest income to
average earning assets, was 4.27% in 2000, 4.31% in 1999 and 4.56% in 1998. The
decrease in the margins for 2000 and 1999 was primarily due to continued robust
loan growth financed by short-term funding sources instead of traditional core
deposit growth previously experienced by the Company.

Schedule 2 analyzes the average balances, the amount of interest earned or paid,
and the applicable rates for the various categories of earning assets and
interest-bearing funds that represent the components of net interest income.
Schedule 3 analyzes the year-to-year changes in net interest income on a fully
taxable-equivalent basis for the years shown. In the schedules, the principal
amounts of nonaccrual and renegotiated loans have been included in the average
loan balances used to determine the rate earned on loans. Interest income on
nonaccrual loans is included in income only to the extent that cash payments
have been received and not applied to principal reductions. Interest on
restructured loans is generally accrued at reduced rates. The incremental tax
rate used for calculating the taxable-equivalent adjustment was 35% for all
years presented.

SCHEDULE 1
OPERATING SEGMENTS INFORMATION

Zions First National Bank California Nevada State Bank
and Subsidiaries Bank & Trust and Subsidiaries
------------------------------ -------------------------------- ------------------------------
(Amounts in millions) 2000 1999 % Change 2000 1999 % Change 2000 1999 % Change
------- ------- -------- ------- ------- -------- ------- ------- --------
CONDENSED INCOME STATEMENT

Net interest income ........... $ 227.1 $ 220.0 3 % $ 297.2 $ 263.7 13 % $ 101.7 $ 99.9 2 %
Noninterest income ............ 152.0 169.9 (11) 43.6 35.8 22 23.5 23.9 (2)
------- ------- ------- ------- ------- -------
Total revenue ................. 379.1 389.9 (3) 340.8 299.5 14 125.2 123.8 1
Provision for loan losses ..... 8.2 9.0 (9) -- -- -- 10.1 3.7 173
Noninterest expense(1)......... 219.2 208.1 5 183.6 182.1 1 74.2 78.5 (5)
------- ------- ------- ------- ------- -------
Pretax cash earnings .......... 151.7 172.8 (12) 157.2 117.4 34 40.9 41.6 (2)
Income tax expense (benefit) .. 46.4 54.0 (14) 64.3 48.4 33 13.4 12.6 6
Minority interest ............. (2.1) 3.1 (168) -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Cash earnings(1)............... 107.4 115.7 (7) 92.9 69.0 35 27.5 29.0 (5)
Merger expense ................ 2.6 0.2 1,200 5.6 9.4 (40) 5.3 12.6 (58)
Impairment loss on First Security
Corporation common stock ... -- -- -- -- -- -- -- -- --
Amortization of goodwill and
core deposit intangibles ... 1.9 1.9 -- 18.1 16.5 10 1.5 1.5 --
Minority interest adjustment .. -- -- -- -- -- -- -- -- --
Income tax expense (benefit) .. (1.5) (0.6) (150) (4.9) (6.3) 22 (2.1) (3.6) 42
------- ------- ------- ------- ------- -------
Net income (loss) ........ $ 104.4 $ 114.2 (9)% $ 74.1 $ 49.4 50 % $ 22.8 $ 18.5 23 %
======= ======= ======= ======= ======= =======

YEAR END BALANCE SHEET DATA

Total assets .................. $ 8,095 $ 7,157 13 % $ 6,953 $ 6,567 6 % $ 2,374 $ 2,277 4 %
Net loans and leases .......... 4,885 4,085 20 4,856 4,559 7 1,383 1,341 3
Allowance for loan losses ..... 61 65 (6) 71 86 (17) 17 14 21
Goodwill and core deposit
intangibles ................ 19 21 (10) 307 325 (6) 25 27 (7)
Total deposits ................ 4,173 3,809 10 5,589 5,426 3 1,993 1,882 6
Common equity ................. 460 444 4 714 679 5 176 163 8

OPERATING CASH
PERFORMANCE RATIOS(1)
Return on average assets ...... 1.30% 1.60% 1.45% 1.15% 1.19% 1.30%
Return on average common equity 25.31% 29.26% 23.88% 20.30% 19.35% 22.10%
Efficiency ratio .............. 56.24% 52.25% 53.65% 60.52% 58.48% 61.71%

OTHER INFORMATION
Full-time equivalent employees 1,909 1,822 1,703 1,659 701 803
Domestic offices
Traditional branches ..... 93 91 75 74 29 31
Banking centers in
grocery stores ........ 49 46 -- -- 31 27
Foreign office ................ 1 1 -- -- -- --
------- ------- ------- ------- ------- -------
Total offices ............ 143 138 75 74 60 58

ATMs .......................... 211 207 88 84 84 73

(1) Before amortization of goodwill and core deposit intangible assets and
merger expense.

National Bank Vectra Bank The Commerce Bank
of Arizona Colorado of Washington
--------------------------------- -------------------------------- ---------------------------
(Amounts in millions) 2000 1999 % Change 2000 1999 % Change 2000 1999 % Change
--------- --------- -------- --------- --------- -------- ------- ------- --------

CONDENSED INCOME STATEMENT
Net interest income .......... $ 92.3 $ 76.9 20% $ 89.1 $ 83.1 7 % $ 20.0 $ 15.8 27%
Noninterest income ........... 14.1 13.0 8 20.2 17.2 17 1.5 0.7 114
--------- --------- --------- --------- ------- -------
Total revenue ................ 106.4 89.9 18 109.3 100.3 9 21.5 16.5 30
Provision for loan losses .... 3.6 2.4 50 9.1 2.6 250 0.8 0.6 33
Noninterest expense(1)........ 50.4 42.9 17 72.5 74.8 (3) 8.8 7.4 19
--------- --------- --------- --------- ------- -------
Pretax cash earnings ......... 52.4 44.6 17 27.7 22.9 21 11.9 8.5 40
Income tax expense (benefit) . 20.4 17.0 20 9.4 7.5 25 4.0 2.8 43
Minority interest ............ -- -- -- -- -- -- -- -- --
--------- --------- --------- --------- ------- -------
Cash earnings(1).............. 32.0 27.6 16 18.3 15.4 19 7.9 5.7 39
Merger expense ............... 0.5 -- -- 0.5 1.6 (69) -- -- --
Impairment loss on First Security
Corporation common stock .. -- -- -- -- -- -- -- -- --
Amortization of goodwill and
core deposit intangibles .. 1.8 1.8 -- 13.2 13.7 (4) -- -- --
Minority interest adjustment . -- -- -- -- -- -- -- -- --
Income tax expense (benefit) . (0.5) (0.4) (25) (1.2) (1.9) 37 -- -- --
--------- --------- --------- --------- ------- -------
Net income (loss) ....... $ 30.2 $ 26.2 15% $ 5.8 $ 2.0 190 % $ 7.9 $ 5.7 39%
========= ========= ========= ========= ======= ======= ==

YEAR END BALANCE SHEET DATA

Total assets ................. $ 1,944 $ 1,600 22% $ 2,156 $ 2,161 -- $ 553 $ 408 36%
Net loans and leases ......... 1,489 1,213 23 1,475 1,373 7 % 242 200 21
Allowance for loan losses .... 23 18 28 18 18 -- 4 3 33
Goodwill and core deposit
intangibles ............... 23 25 (8) 244 257 (5) -- -- --
Total deposits ............... 1,551 1,206 29 1,385 1,490 (7) 405 289 40
Common equity ................ 161 131 23 390 384 2 33 25 32

OPERATING CASH
PERFORMANCE RATIOS(1)
Return on average assets ..... 1.87% 1.86% 0.96% 0.81% 1.78% 1.54%
Return on average common
equity .................... 25.69% 27.42% 13.36% 12.64% 27.79% 24.30%
Efficiency ratio ............. 46.81% 46.97% 65.64% 73.51% 40.57% 44.30%

OTHER INFORMATION
Full-time equivalent employees 619 561 874 955 52 50
Domestic offices
Traditional branches ...... 41 37 50 51 1 1
Banking centers in
grocery stores ......... -- -- 4 4 -- --
Foreign office ............... -- -- -- -- -- --
--------- --------- --------- --------- ------- -------
Total offices ........... 41 37 54 55 1 1

ATMs ......................... 38 30 88 90 -- --

(1) Before amortization of goodwill and core deposit intangible assets and
merger expense.

Consolidated
Other Company
----------------------------- -------------------------------------
(Amounts in millions) 2000 1999 % Change 2000 1999 % Change
------- ------- -------- ---------- ---------- --------

CONDENSED INCOME STATEMENT
Net interest income ................ $ (24.0) $ (17.9) (34)% $ 803.4 $ 741.5 8 %
Noninterest income ................. 34.2 6.0 470 289.1 266.5 8
------- ------- ---------- ----------
Total revenue ...................... 10.2 (11.9) 186 1,092.5 1,008.0 8
Provision for loan losses .......... -- (0.3) 100 31.8 18.0 77
Noninterest expense(1).............. 29.5 24.0 23 638.2 617.8 3
------- ------- ---------- ----------
Pretax cash earnings ............... (19.3) (35.6) 46 422.5 372.2 14
Income tax expense (benefit) ....... (19.2) (18.8) (2) 138.7 123.5 12
Minority interest .................. 4.5 2.8 61 2.4 5.9 (59)
------- ------- ---------- ----------
Cash earnings(1).................... (4.6) (19.6) 77 281.4 242.8 16
Merger expense ..................... 31.0 3.9 695 45.5 27.7 64
Impairment loss on First Security
Corporation common stock ........ 96.9 -- -- 96.9 -- --
Amortization of Goodwill and
core deposit intangibles ........ 0.7 0.6 17 37.2 36.0 3
Minority interest adjustment ....... (0.9) (1.0) 10 (0.9) (1.0) 10
Income tax expense (benefit) ....... (48.8) (1.2) (3,967) (59.0) (14.0) (321)
------- ------- ---------- ----------
Net income (loss) ............. $ (83.5) $ (21.9) (281)% $ 161.7 $ 194.1 (17)%
======= ======= ========== ==========
YEAR END BALANCE SHEET DATA

Total assets ....................... $ (136) $ 111 (223)% $ 21,939 $ 20,281 8%
Net loans and leases ............... 48 20 140 14,378 12,791 12
Allowance for loan losses .......... 2 -- -- 196 204 (4)
Goodwill and core
deposit intangibles ............. 23 11 109 641 666 (4)
Total deposits ..................... (26) (40) 35 15,070 14,062 7
Common equity ...................... (155) (166) 7 1,779 1,660 7

OPERATING CASH
PERFORMANCE RATIOS(1)
Return on average assets ........... 1.34% 1.26%
Return on average common equity .... 27.40% 26.77%
Efficiency ratio ................... 57.46% 60.33%

OTHER INFORMATION
Full-time equivalent employees 1,057 983 6,915 6,833
Domestic offices
Traditional branches ............ -- -- 289 285
Banking centers in
grocery stores ................ -- -- 84 77
Foreign office ..................... -- -- 1 1
------- ------- ---------- ----------
Total offices ................. -- -- 374 363

ATMs ............................... -- -- 509 484

(1) Before amortization of goodwill and core deposit intangible assets and
merger expense.

41 [continued]

SCHEDULE 2
DISTRIBUTION OF ASSETS, LIABILITIES, AND SHAREHOLDERS' EQUITY
AVERAGE BALANCE SHEETS, YIELDS AND RATES

2000 1999
------------------------------------ ------------------------------------
Average Amount of Average Average Amount of Average
(Amounts in millions) balance interest(1) rate balance interest(1) rate
--------- --------- ---------- --------- --------- ----------

ASSETS:
Money market investments ............ $ 1,061 $ 67.4 6.35% $ 1,185 $ 67.2 5.67%
Securities:
Held to maturity ............... 3,254 222.1 6.83% 3,277 204.6 6.24%
Available for sale ............. 685 44.8 6.53% 741 42.4 5.72%
Trading account ................ 574 36.3 6.32% 538 30.1 5.59%
--------- --------- --------- ---------
Total securities .......... 4,513 303.2 6.72% 4,556 277.1 6.08%
--------- --------- --------- ---------

Loans:
Loans held for sale ............ 192 14.5 7.52% 178 12.2 6.85%
Net loans and leases(2) ........ 13,457 1,259.2 9.36% 11,641 1,019.0 8.75%
--------- --------- --------- ---------
Total loans ............... 13,649 1,273.7 9.33% 11,819 1,031.2 8.72%
--------- --------- --------- ---------
Total interest-earning assets ....... $ 19,223 $ 1,644.3 8.55% $ 17,560 $ 1,375.5 7.83%
--------- ---------
Cash and due from banks ............. 826 856
Allowance for loan losses ........... (203) (211)
Goodwill and core
deposit intangibles .............. 648 655

Other assets ........................ 1,228 1,052
--------- ---------
Total Assets .............. $ 21,722 $ 19,912
========= =========
LIABILITIES:
Interest-bearing deposits:
Savings and NOW deposits ....... $ 1,783 $ 40.0 2.24% $ 1,812 $ 44.1 2.43%
Money market and super NOW
deposits .................... 6,210 289.4 4.66% 5,521 203.6 3.69%
Time deposits
under $100,000 .............. 1,719 87.7 5.10% 2,085 98.5 4.72%
Time deposits $100,000
or more ..................... 1,408 80.4 5.71% 1,257 61.1 4.86%
Foreign deposits ............... 138 6.3 4.56% 165 7.2 4.36%
--------- --------- --------- ---------
Total interest-
bearing deposits ....... 11,258 503.8 4.48% 10,840 414.5 3.82%
--------- --------- --------- ---------
Borrowed funds:
Securities sold, not
yet purchased ............... 311 19.7 6.32% 271 15.6 5.76%
Federal funds purchased
and security repurchase
agreements .................. 2,747 159.7 5.81% 2,369 108.5 4.58%
Commercial paper .............. 316 20.7 6.55% 194 10.8 5.57%
FHLB advances and other
borrowings:
less than one year ...... 1,161 76.2 6.56% 545 28.5 5.23%
over one year ........... 140 8.5 6.06% 76 4.8 6.32%
Long-term debt ................ 429 34.2 7.98% 453 35.1 7.75%
--------- --------- --------- ---------
Total borrowed funds ...... 5,104 319.0 6.25% 3,908 203.3 5.20%
--------- --------- --------- ---------
Total interest-bearing
liabilities ...................... $ 16,362 $ 822.8 5.03% $ 14,748 $ 617.8 4.19%
--------- ---------
Noninterest-bearing deposits ........ 3,316 3,249
Other liabilities ................... 329 316
--------- ---------
Total liabilities ................... 20,007 18,313
Minority interest ................... 40 37
Total shareholders' equity .......... 1,675 1,562
--------- ---------
Total liabilities and
shareholders equity .............. $ 21,722 $ 19,912
========= =========

Spread on average interest-
bearing funds .................... 3.52% 3.64%
==== ====
Net interest income and net yield
on interest-earning assets ....... $ 821.5 4.27% $ 757.7 4.31%
========= ==== ========= ====

(1) Taxable-equivalent rates used where applicable.
(2) Net of unearned income and fees, net of related costs. Loans include
nonaccrual and restructured loans.

1998 1997
------------------------------------ ------------------------------------
Average Amount of Average Average Amount of Average
(Amounts in millions) balance interest(1) rate balance interest(1) rate
--------- --------- ---------- --------- --------- ----------
ASSETS:
Money market investments ............ $ 1,629 $ 92.3 5.67% $ 1,558 $ 88.3 5.67%
Securities:
Held to maturity ............... 2,271 154.8 6.82% 1,790 126.5 7.07%
Available for sale ............. 849 48.6 5.72% 671 46.0 6.86%
Trading account ................ 430 24.0 5.58% 276 16.2 5.87%
--------- --------- --------- ---------
Total securities .......... 3,550 227.4 6.41% 2,737 188.7 6.89%
--------- --------- --------- ---------
Loans:
Loans held for sale ............ 202 14.3 7.08% 163 11.9 7.30%
Net loans and leases(2) ........ 7,430 708.8 9.54% 4,384 437.6 9.98%
--------- --------- --------- ---------
Total loans ............... 7,632 723.1 9.47% 4,547 449.5 9.89%
--------- --------- --------- ---------
Total interest-earning assets ....... $ 12,811 $ 1,042.8 8.14% $ 8,842 $ 726.5 8.22%
--------- ---------
Cash and due from banks ............. 657 471
Allowance for loan losses ........... (132) (81)
Goodwill and core
deposit intangibles .............. 573 132

Other assets ........................ 488 341
--------- ---------
Total Assets .............. $ 14,397 $ 9,705
========= =========

LIABILITIES:
Interest-bearing deposits:
Savings and NOW deposits ....... $ 1,338 $ 39.4 2.94% $ 860 $ 24.6 2.86%
Money market and super NOW
deposits .................... 3,712 134.5 3.62% 2,532 100.5 3.97%
Time deposits
under $100,000 .............. 1,651 85.7 5.19% 866 44.9 5.18%
Time deposits $100,000
or more ..................... 894 49.3 5.51% 310 18.0 5.81%
Foreign deposits ............... 182 8.2 4.51% 142 6.4 4.51%
--------- --------- --------- ---------
Total interest-
bearing deposits ....... 7,777 317.1 4.08% 4,710 194.4 4.13%
--------- --------- --------- ---------
Borrowed funds:
Securities sold, not
yet purchased ............... 202 10.0 4.95% 92 5.3 5.76%
Federal funds purchased
and security repurchase
agreements .................. 1,908 90.5 4.74% 2,206 114.7 5.20%
Commercial paper .............. 28 1.6 5.71% -- --
FHLB advances and other
borrowings:
less than one year ...... 63 4.0 6.35% 34 2.4 7.06%
over one year ........... 114 6.6 5.79% 136 8.2 6.03%
Long-term debt ................ 347 29.1 8.39% 253 22.4 8.85%
--------- --------- --------- ---------
Total borrowed funds ...... 2,662 141.8 5.33% 2,721 153.0 5.62%
--------- --------- --------- ---------
Total interest-bearing
liabilities ...................... $ 10,439 $ 458.9 4.40% $ 7,431 $ 347.4 4.68%
--------- ---------
Noninterest-bearing deposits ........ 2,448 1,439
Other liabilities ................... 196 158
--------- ---------
Total liabilities ................... 13,083 9,028
Minority interest ................... 9 --
Total shareholders' equity .......... 1,305 677
--------- ---------
Total liabilities and
shareholders equity............... $ 14,397 $ 9,705
========= =========
Spread on average interest-
bearing funds .................... 3.74% 3.54%
==== ====
Net interest income and net yield
on interest-earning assets ....... $ 583.9 4.56% $ 379.1 4.29%
========= ==== ========= ====

(1) Taxable-equivalent rates used where applicable.
(2) Net of unearned income and fees, net of related costs. Loans include
nonaccrual and restructured loans.

1996
------------------------------------
Average Amount of Average
(Amounts in millions) balance interest(1) rate
--------- --------- ----------
ASSETS:
Money market investments ............ $ 946 $ 52.9 5.59%
Securities:
Held to maturity ............... 1,314 93.9 7.15%
Available for sale ............. 566 38.7 6.84%
Trading account ................ 156 9.2 5.90%
--------- ---------
Total securities .......... 2,036 141.8 6.96%
--------- ---------
Loans:
Loans held for sale ............ 151 11.5 7.62%
Net loans and leases(2) ........ 3,409 340.5 9.99%
--------- ---------
Total loans ............... 3,560 352.0 9.89%
--------- ---------
Total interest-earning assets ....... $ 6,542 $ 546.7 8.36%
---------
Cash and due from banks ............. 368
Allowance for loan losses ........... (75)
Goodwill and core
deposit intangibles .............. 31

Other assets ........................ 257
---------
Total Assets .............. $ 7,123
=========
LIABILITIES:
Interest-bearing deposits:
Savings and NOW deposits ....... $ 730 $ 21.7 2.97%
Money market and super NOW
deposits .................... 2,017 78.9 3.91%
Time deposits
under $100,000 .............. 713 37.2 5.22%
Time deposits $100,000
or more ..................... 223 12.8 5.74%
Foreign deposits ............... 121 5.4 4.46%
--------- ---------
Total interest-
bearing deposits ....... 3,804 156.0 4.10%
--------- ---------
Borrowed funds:
Securities sold, not
yet purchased ............... 77 4.5 5.84%
Federal funds purchased
and security repurchase
agreements .................. 1,358 67.9 5.00%
Commercial paper .............. --
FHLB advances and other
borrowings:
less than one year ...... 18 1.3 7.22%
over one year ........... 79 4.8 6.08%
Long-term debt ................ 58 5.2 8.97%
--------- ---------
Total borrowed funds ...... 1,590 83.7 5.26%
--------- ---------
Total interest-bearing
liabilities ...................... $ 5,394 $ 239.7 4.44%
---------
Noninterest-bearing deposits ........ 1,098
Other liabilities ................... 107
---------
Total liabilities ................... 6,599
Minority interest ................... --
Total shareholders' equity .......... 524
---------
Total liabilities and
shareholders equity............... $ 7,123
=========
Spread on average interest-
bearing funds .................... 3.92%
====
Net interest income and net yield
on interest-earning assets ....... $ 307.0 4.69%
========= ====

(1) Taxable-equivalent rates used where applicable.
(2) Net of unearned income and fees, net of related costs. Loans include
nonaccrual and restructured loans.

43 [Continued]

SCHEDULE 3
ANALYSIS OF INTEREST CHANGES DUE TO VOLUME AND RATE

2000 over 1999 1999 over 1998
------------------------------ ------------------------------
Changes due to Changes due to
------------------- Total ------------------- Total
(Amounts in millions) Volume Rate(1) changes Volume Rate(1) changes
-------- -------- -------- -------- -------- --------

INTEREST-EARNING ASSETS:
Money market investments ................... $ (6.9) $ 7.1 $ 0.2 $ (25.3) $ 0.2 $ (25.1)

Securities:
Held to maturity ...................... (1.6) 19.1 17.5 62.9 (13.1) 49.8
Available for sale .................... (3.2) 5.6 2.4 (6.1) (0.1) (6.2)
Trading account ....................... 2.1 4.1 6.2 6.1 -- 6.1
-------- -------- -------- -------- -------- --------
Total securities ................. (2.7) 28.8 26.1 62.9 (13.2) 49.7
-------- -------- -------- -------- -------- --------
Loans:
Loans held for sale ................... 1.0 1.2 2.2 (1.6) (0.5) (2.1)
Net loans and leases(2)................ 166.2 74.0 240.2 368.9 (58.7) 310.2
-------- -------- -------- -------- -------- --------
Total loans ...................... 167.2 75.2 242.4 367.3 (59.2) 308.1
-------- -------- -------- -------- -------- --------
Total interest-earning assets .............. $ 157.6 $ 111.1 $ 268.7 $ 404.9 $ (72.2) $ 332.7
-------- -------- -------- -------- -------- --------

INTEREST-BEARING LIABILITIES:
Interest-bearing deposits:
Savings and NOW deposits .............. $ (0.6) $ (3.5) $ (4.1) $ 11.5 $ (6.8) $ 4.7
Money market and super NOW deposits ... 27.7 58.1 85.8 66.6 2.5 69.1
Time deposits under $100,000 .......... (17.4) 6.6 (10.8) 20.6 (7.8) 12.8
Time deposits $100,000 or more ........ 7.9 11.4 19.3 17.7 (5.9) 11.8
Foreign deposits ...................... (1.2) 0.3 (0.9) (0.7) (0.3) (1.0)
-------- -------- -------- -------- -------- --------
Total interest-bearing deposits .. 16.4 72.9 89.3 115.7 (18.3) 97.4
-------- -------- -------- -------- -------- --------
Borrowed funds:
Securities sold, not yet purchased .... 2.4 1.6 4.0 3.8 1.8 5.6
Federal funds purchased and
security repurchase agreements ..... 19.1 32.1 51.2 21.1 (3.1) 18.0
Commercial paper ...................... 7.7 2.2 9.9 9.3 (0.1) 9.2
FHLB advances and other borrowings:
Less than one year ............... 38.9 8.8 47.7 25.2 (0.7) 24.5
Over one year .................... 3.9 (0.2) 3.7 (2.2) 0.4 (1.8)
Long-term debt ........................ (1.8) 0.9 (0.9) 8.1 (2.1) 6.0
-------- -------- -------- -------- -------- --------
Total borrowed funds ............. 70.2 45.4 115.6 65.3 (3.8) 61.5
-------- -------- -------- -------- -------- --------
Total interest-bearing liabilities ......... $ 86.6 $ 118.3 $ 204.9 $ 181.0 $ (22.1) $ 158.9
-------- -------- -------- -------- -------- --------
Change in net interest income .............. $ 71.0 $ (7.2) $ 63.8 $ 223.9 $ (50.1) $ 173.8
======== ======== ======== ======== ======== ========

(1) Taxable-equivalent income used where applicable.
(2) Net of unearned income and fees. Loans include nonaccrual and restructured
loans.

In the analysis of interest changes due to volume and rate, the changes due to
the volume/rate variance have been allocated to volume with the following
exceptions: when volume and rate have both increased, the variance has been
allocated proportionately to both volume and rate; when the rate has increased
and volume has decreased, the variance has been allocated to rate.

PROVISION FOR LOAN LOSSES

The provision for loan losses reflects management's judgment of the expense to
be recognized in order to maintain an adequate allowance for loan losses. See
the discussion on allowance for loan losses under Risk Elements. The provision
for loan losses was $31.8 million in 2000, compared to $18.0 million in 1999 and
$14.0 million in 1998. The provision was .23% of average loans for 2000, .15% in
1999 and .18% for 1998.

NONINTEREST INCOME

Noninterest income, excluding the impairment loss recognized on the First
Security Corporation common stock, comprised 26.5% of net revenue in 2000,
compared to 26.4% in 1999 and 26.8% in 1998. Noninterest income excluding the
impairment loss was $289.1 million in 2000, an increase of 8.5% over $266.5
million in 1999, which was up 26.8% over $210.2 million in 1998. Noninterest
income from The Sumitomo Bank of California for 1998 included only income for
the last quarter of the year, following the acquisition. Schedule 4 shows the
major components of noninterest income.

SCHEDULE 4
NONINTEREST INCOME

Percent Percent Percent Percent
(Amounts in millions) 2000 change 1999 change 1998 change 1997 change 1996
-------- -------- -------- -------- -------- -------- -------- ------- --------

Service charges on deposit accounts . $ 78.3 2.0% $ 76.8 25.7% $ 61.1 36.7% $ 44.7 25.6% $ 35.6
Other service charges,
commissions and fees ............. 65.3 (1.2) 66.1 16.0 57.0 39.4 40.9 32.8 30.8
Trust income ........................ 18.2 15.2 15.8 43.6 11.0 35.8 8.1 37.3 5.9
Investment securities
gains (losses), net .............. 14.8 593.3 (3.0) (173.2) 4.1 355.6 0.9 800.0 0.1
Impairment loss on First Security
Corporation common stock ......... (96.9) -- -- -- -- -- -- -- --
Underwriting and trading
income ........................... 10.1 (12.2) 11.5 25.0 9.2 61.4 5.7 111.1 2.7
Loan sales and servicing income ..... 51.7 27.7 40.5 (19.6) 50.4 30.2 38.7 10.3 35.1
Other income ........................ 50.7 (13.8) 58.8 237.9 17.4 87.1 9.3 27.4 7.3
-------- -------- -------- -------- --------
Total ............................... $ 192.2 (27.9)% $ 266.5 26.8% $ 210.2 41.7% $ 148.3 26.2% $ 117.5
======== ======== ======== ======== ========

Service charges for 2000, compared with 1999, were relatively flat, reflecting
the modest deposit growth experienced by the Company during 2000 and a
competitive service charge environment in the Company's markets. The 25.7%
increase in deposit service charges for 1999, compared to 1998, resulted from
the increase of the Company's deposit base through acquisitions and internal
growth and the inclusion of fees from the 1998 acquisition of The Sumitomo Bank
of California for only the last quarter of 1998.

Other service charges, commissions and fees, which include investment, brokerage
and fiscal agent fees, electronic delivery system fees, insurance commissions,
merchant fee income and other miscellaneous fees, were $65.3 million in 2000,
down 1.2% from the $66.1 million of fees earned in 1999, which were up 16.0%
from 1998. The decrease in fees for 2000 results from a decrease in brokerage
and fiscal agent fees of $1.1 million and a decrease in commissions and fees
from insurance products of $1.4 million.

Trust income for 2000 was up 15.2% over 1999, which was up 43.6% over 1998. The
Company has significantly expanded its trust services in Arizona and Colorado.
Investment securities gains for 2000 include gains of $23.6 million on the sale
of First Security Corporation common stock and an impairment loss of $13.4
million on a technology company investment by the Company's venture funding
group.

Underwriting and trading income decreased 12.2% to $10.1 million in 2000 from
$11.5 million in 1999, which was up 25.0% over $9.2 million earned in 1998. The
decrease for 2000 reflects the slow-down in capital markets transactions. During
1998, the Company commenced the provision of online executable government bond
sales using Bloomberg and the Internet, which resulted in increased revenues for
1999 and 1998.

Loan sales and servicing income increased 27.7% in 2000 to $51.7 million over
$40.5 million in 1999, which was down 19.6% from $50.4 million in 1998. The
increase for 2000 over 1999 resulted mainly from gains and servicing fees from
SBA 504 loan securitizations completed during 2000 and 1999. The decrease in
loan sales and servicing income for 1999 was the result of a Company decision to
decrease its mortgage origination and servicing activities, resulting in
decreased loan servicing income and gains on sales as well as decreased expense.

Other income, which includes income from investments in bank-owned life
insurance, income recognized on nonmarketable equity securities from the
Company's venture funding operations, income from unconsolidated subsidiaries
and associated companies, net gains on sales of fixed assets and other assets,
and other items, was $50.7 million in 2000, a decrease of 13.8% from 1999, which
was up $41.4 million or 237.9% from 1998. The significant increase for 1999 was
mainly due to increased income from venture funding operations. Included in
other noninterest income for 1999 was $42.6 million of income from the Company's
venture funding operations. During 1999, the Company also recognized impairment
and other losses related to SBA interest-only strips of $8.3 million.

NONINTEREST EXPENSE

The Company's noninterest expense was $720.8 million in 2000, an increase of
5.8% over $681.6 million in 1999, which was up 22.4% over the $556.7 million in
1998. Included in 2000, 1999 and 1998 expense was $45.5 million, $27.7 million
and $38.1 million, respectively, in merger-related expenses. Excluding
merger-related expense and amortization of goodwill and core deposit
intangibles, noninterest expense increased 3.3% for 2000 compared to 1999.
Schedule 5 shows the major components of noninterest expense.

SCHEDULE 5
NONINTEREST EXPENSE

Percent Percent Percent Percent
(Amounts in millions) 2000 change 1999 change 1998 change 1997 change 1996
------- ------- ------- ------- ------- ------- ------- ------ -------

Salaries and benefits .............. $ 348.3 0.5% $ 346.7 32.6% $ 261.5 58.6% $ 164.9 25.9% $ 131.0
Occupancy, net ..................... 51.7 4.7 49.4 47.9 33.4 85.6 18.0 33.3 13.5
Furniture and equipment ............ 52.7 16.1 45.4 18.5 38.3 56.3 24.5 41.6 17.3
Other real estate expense (income) . 0.3 400.0 (0.1) (114.3) 0.7 133.3 0.3 250.0 (0.2)
Legal and professional services .... 19.7 21.6 16.2 (0.6) 16.3 101.2 8.1 50.0 5.4
Supplies ........................... 11.0 (1.8) 11.2 (5.9) 11.9 41.7 8.4 23.5 6.8
Postage ............................ 10.9 (6.8) 11.7 6.4 11.0 50.7 7.3 23.7 5.9
Advertising ........................ 25.4 37.3 18.5 46.8 12.6 70.3 7.4 27.6 5.8
FDIC premiums ...................... 3.4 54.5 2.2 46.7 1.5 114.3 0.7 -- --
Merger-related expense ............. 45.5 64.3 27.7 (27.3) 38.1 4,662.5 0.8 -- --
Amortization of goodwill and
core deposit intangibles .. 37.2 3.3 36.0 13.6 31.7 346.5 7.1 208.7 2.3
Other expenses ..................... 114.7 (1.7) 116.7 17.1 99.7 52.4 65.4 25.8 52.0
------- ------- ------- ------- -------
Total .............................. $ 720.8 5.8% $ 681.6 22.4% $ 556.7 77.9% $ 312.9 30.5% $ 239.8
======= ======= ======= ======= =======

The increase in furniture and equipment expense for 2000 compared to 1999
includes increased expenses related to upgrading branch and administrative
facilities of California Bank & Trust branches and increased expenses related to
technology upgrades, including Internet security and authentification systems.
The increased advertising expense for 2000 reflects efforts to promote Internet
banking products and reestablish the Company's presence in critical markets
subsequent to the terminated merger with First Security Corporation.

In 1999 salaries and employee benefits increased primarily as a result of
increased staffing from acquisitions and the opening of new offices, as well as
general salary increases and bonuses which are based on increased profitability.
The occupancy, furniture and equipment expense increase resulted primarily from
the addition of office facilities, installation of personal computers and local
area networks, and expenses related to technology initiatives. The increase in
all other expenses resulted primarily from increases related to acquisitions and
expansion and increased expenditures in selected areas to enhance revenue
growth. Also, expenses for 1998 only include operations of The Sumitomo Bank of
California for the last quarter of the year, since the bank was acquired in a
purchase transaction on October 1, 1998.

On December 31, 2000, the Company had 6,915 full-time equivalent employees and
373 domestic offices compared to 6,833 employees and 362 offices at year-end
1999 and 7,099 full-time equivalent employees and 345 offices at year-end 1998.

The Company's operating cash "efficiency ratio", or noninterest expenses,
excluding amortization of goodwill and core deposit intangibles and
merger-related expenses, as a percentage of total taxable-equivalent net
revenues, improved to 57.5% in 2000, compared to 60.3% in 1999 and 61.3% in
1998.

INCOME TAXES

The Company's income tax expense for 2000 was $79.7 million, compared to $109.5
million in 1999 and $69.6 million in 1998. The Company's effective income tax
rate was 32.8% in 2000, 35.5% in 1999 and 32.6% in 1998. The lower effective tax
rate for 2000 results mainly from a higher percentage of nontaxable income and a
reduction in nondeductible merger-related expenses. The higher rate for 1999 is
mainly due to a higher percentage of the Company's income being generated in
states with higher tax rates and increased nondeductible goodwill amortization.
The lower effective tax rate for 1998 resulted primarily from decisions
regarding a corporate reorganization.

BALANCE SHEET ANALYSIS

EARNING ASSETS
Earning assets consist of money market investments, securities and loans. A
comparative average balance sheet report, including earning assets, is presented
in Schedule 2.

Average earning assets increased 9.5% to $19,223 million in 2000, compared to
$17,560 million in 1999. Earning assets comprised 88.5% of total average assets
in 2000, compared with 88.2% in 1999.

Average money market investments, consisting of interest-bearing deposits,
federal funds sold and security resell agreements, decreased 10.5% to $1,061
million in 2000, compared to $1,185 million in 1999.

Average securities decreased .9% to $4,513 million in 2000, compared to $4,556
million in 1999. Average held-to-maturity securities decreased .7% to $3,254
million, available-for-sale securities decreased 7.6% to $685 million, and
trading account securities increased 6.7% to $574 million.

Average net loans and leases increased 15.5% to $13,649 million in 2000,
compared to $11,819 million in 1999, representing 71.0% of earning assets in
2000 compared to 67.3% in 1999. Average net loans and leases were 93.7% of
average total deposits in 2000, as compared to 83.9% in 1999.

INVESTMENT SECURITIES PORTFOLIO
Schedule 6 presents the Company's year-end investment securities on December 31,
2000, 1999, and 1998. Schedule 7 presents the Company's maturities and average
yields on securities on December 31, 2000. See Note 4 of the Notes to
Consolidated Financial Statements for additional information about securities.

SCHEDULE 6
INVESTMENT SECURITIES PORTFOLIO

December 31,
---------------------------------------------------------------------
2000 1999 1998
--------------------- --------------------- ---------------------
Amortized Market Amortized Market Amortized Market
(Amounts in millions) cost value cost value cost value
--------- --------- --------- --------- --------- ---------

HELD TO MATURITY:
U.S. Treasury securities ................... $ 1 $ 1 $ 1 $ 1 $ 63 $ 63
U.S. government agencies
and corporations:
Small Business
Administration loan-
backed securities ................. 560 563 440 445 358 356
Other agency securities .............. 1,269 1,285 1,270 1,233 940 944
States and political subdivisions .......... 292 296 314 309 331 340
Mortgage-backed securities ................. 1,003 1,008 1,305 1,303 1,159 1,166
--------- --------- --------- --------- --------- ---------
3,125 3,153 3,330 3,291 2,851 2,869
--------- --------- --------- --------- --------- ---------
AVAILABLE FOR SALE:
U.S. Treasury securities ................... 51 52 93 93 98 100
U.S. government agencies and corporations .. 94 94 51 50 362 346
States and political subdivisions .......... 185 190 102 97 67 68
Mortgage- and other asset-backed
securities .............................. 274 273 147 143 179 180
--------- --------- --------- --------- --------- ---------
604 609 393 383 706 694
--------- --------- --------- --------- --------- ---------
Equity securities:
Mutual funds:
Accessor Funds, Inc. ................. 159 160 141 139 117 118
Other stock ............................. 18 13 242 257 137 142
--------- --------- --------- --------- --------- ---------
177 173 383 396 254 260
--------- --------- --------- --------- --------- ---------
781 782 776 779 960 954
--------- --------- --------- --------- --------- ---------
Total ...................................... $ 3,906 $ 3,935 $ 4,106 $ 4,070 $ 3,811 $ 3,823
========= ========= ========= ========= ========= =========

SCHEDULE 7
MATURITIES AND AVERAGE YIELDS ON SECURITIES
ON DECEMBER 31, 2000

After one but After five but
Total securities Within one year within five years within ten years After ten years
----------------- ----------------- ----------------- ----------------- ----------------
(Amounts in millions) Amount Yield* Amount Yield* Amount Yield* Amount Yield* Amount Yield*
------ ------ ------ ------ ------ ------ ------ ------ ------ ------

HELD TO MATURITY:
U.S. Treasury securities ....... $ 1 6.2% $ 1 6.2% $ -- $ -- $ --
U.S. government agencies
and corporations:
Small Business
Administration loan-
backed securities ..... 560 8.2% 49 8.1% 354 8.1% 82 8.3% 75 8.3%
Other agency securities .. 1,269 6.4% 33 6.2% 1,057 6.2% 41 7.3% 138 7.7%
States and political
subdivisions ................ 292 8.3% 59 8.3% 108 8.3% 63 8.3% 62 8.3%
Mortgage-backed securities ..... 1,003 6.8% 295 6.8% 590 6.8% 65 7.2% 53 7.1%
------ ------ ------ ------ ------
3,125 7.0% 437 7.1% 2,109 6.8% 251 7.9% 328 7.8%
------ ------ ------ ------ ------

AVAILABLE FOR SALE:
U.S. Treasury securities ....... 51 5.9% 21 5.1% 28 6.4% 2 6.5% --
U.S. government agencies
and corporations ............ 94 6.1% 8 6.2% 86 6.1% -- --
States and political
subdivisions ................ 185 8.6% 30 9.0% 50 8.6% 54 8.1% 51 8.9%
Mortgage- and other
asset-backed securities ..... 274 7.1% 10 7.0% 46 6.7% 59 6.4% 159 7.5%
------ ------ ------ ------ ------
604 7.3% 69 7.2% 210 6.9% 115 7.2% 210 7.8%
------ ------ ------ ------ ------
Equity securities:
Mutual funds:
Accessor Funds, Inc. ..... 159 6.2% -- -- -- 159 6.2%
Other stock ................. 18 1.0% -- -- -- 18 1.0%
------ ------ ------ ------ ------
177 5.7% -- -- -- 177 5.7%
------ ------ ------ ------ ------
781 6.9% 69 7.2% 210 6.9% 115 7.2% 387 6.9%
------ ------ ------ ------ ------
Total .......................... $3,906 7.0% $ 506 7.1% $2,319 6.8% $ 366 7.6% $ 715 7.3%
====== ====== ====== ====== ======

*Taxable-equivalent rates used where applicable.

LOAN PORTFOLIO

During 2000, the Company consummated securitized loan sales of automobile loans,
credit card receivables, home equity credit lines, Small Business Administration
(SBA) and Federal Agricultural Mortgage Corporation ("Farmer Mac") loans
totaling $1,141 million. The Company also sold $533 million of long-term
residential mortgage loans, SBA loans, Farmer Mac loans, and student loans
classified as held for sale. After these sales, gross loans and leases on
December 31, 2000 totaled $14,458 million, an increase of 12.5% compared to
$12,853 million on December 31, 1999.

Schedule 8 sets forth the amount of loans outstanding by type on December 31 for
the years indicated and the maturity distribution and sensitivity to changes in
interest rates of the portfolio on December 31, 2000.

SCHEDULE 8
LOAN PORTFOLIO BY TYPE

December 31, 2000
-------------------------------------
One year Over December 31,
One year through five -------------------------------------
(Amounts in millions) or less five years years Total 1999 1998 1997 1996
------- ------- ------- ------- ------- ------- ------- -------

Loans held for sale ..................... $ 145 $ 11 $ 25 $ 181 $ 205 $ 232 $ 179 $ 150

Commercial, financial and agricultural .. 1,369 1,701 545 3,615 3,036 2,844 1,406 949

Real estate:
Construction ....................... 1,026 1,221 26 2,273 1,722 960 576 387
Other:
Home equity credit line ....... 30 27 206 263 232 232 165 188
1-4 family residential ........ 278 297 2,336 2,911 2,503 2,207 742 560
Other real estate-secured ..... 482 1,058 2,650 4,190 4,168 3,894 1,678 1,213
------- ------- ------- ------- ------- ------- ------- -------
1,816 2,603 5,218 9,637 8,625 7,293 3,161 2,348
------- ------- ------- ------- ------- ------- ------- -------
Consumer:
Bankcard ........................... 93 42 -- 135 107 99 73 47
Other .............................. 102 269 101 472 490 472 417 286
------- ------- ------- ------- ------- ------- ------- -------
195 311 101 607 597 571 490 333
------- ------- ------- ------- ------- ------- ------- -------

Lease financing ......................... 16 213 88 317 275 214 176 160

Foreign loans ........................... 3 16 7 26 53 44 -- --

Other receivables ....................... 69 3 3 75 62 72 95 41
------- ------- ------- ------- ------- ------- ------- -------
Total loans ........................ $ 3,613 $ 4,858 $ 5,987 $14,458 $12,853 $11,270 $ 5,507 $ 3,981
======= ======= ======= ======= ======= ======= ======= =======

Loans maturing in more than one year:
With fixed interest rates .......... $ 1,638 $ 2,989 $ 4,627
With variable interest rates ....... 3,220 2,998 6,218
------- ------- -------
Total ......................... $ 4,858 $ 5,987 $10,845
======= ======= =======

SOLD LOANS BEING SERVICED

On December 31, 2000, long-term first mortgage real estate loans serviced for
others amounted to $198 million, compared to $237 million on December 31, 1999,
and $1,995 million on December 31, 1998. During 1999, the Company merged Zions
Mortgage Company, its wholly owned mortgage company, into Zions First National
Bank and sold most of its mortgage servicing and outsourced servicing retained
on long-term first mortgage real estate loans.

Consumer and other loan securitizations serviced, which relate primarily to
loans sold under revolving securitization structures, totaled $1,750 million,
$1,252 million, and $1,040 million on December 31, 2000, 1999 and 1998,
respectively.

Schedule 9 summarizes the Company's activity in its portfolio of sold loans
being serviced (excluding long-term first mortgage real estate loans).

SCHEDULE 9
SOLD LOANS BEING SERVICED

2000 1999 1998
------------------------- ------------------------- -------------------------
Outstanding Outstanding Outstanding
(Amounts in millions) Sales at year end Sales at year end Sales at year end
----------- ----------- ----------- ----------- ----------- -----------

Auto loans ................ $ 164 $ 310 $ 195 $ 326 $ 198 $ 345
Home equity credit lines .. 248 312 255 274 261 261
Bankcard receivables ...... 169 61 194 67 282 134
Home refinance loans ...... -- 6 -- 10 -- 23
SBA 504 loans ............. 494 722 212 275 -- 100
SBA 7(a) loans ............ 1 52 15 67 33 73
Farmer Mac ................ 65 287 111 233 110 104
----------- ----------- ----------- ----------- ----------- -----------
Total ................ $ 1,141 $ 1,750 $ 982 $ 1,252 $ 884 $ 1,040
=========== =========== =========== =========== =========== ===========

DEPOSITS AND BORROWED FUNDS

Total deposits increased 7.2% to $15,070 million on December 31, 2000, as
compared to $14,062 million on December 31, 1999. Comparing December 31, 2000 to
December 31, 1999, demand deposits increased 9.4%, savings and money market
deposits increased 8.0%, and time deposits under $100,000 decreased 11.3%, while
time deposits over $100,000 increased 34.3% and foreign deposits decreased
35.0%.

As derived from Schedule 2, total average deposits increased 3.4% to $14,574
million in 2000 from $14,089 million in 1999. Average noninterest-bearing
deposits increased 2.1%, average savings and NOW deposits decreased 1.6%,
average money market and super NOW deposits increased 12.5%, and average time
deposits under $100,000 decreased 17.6%. Average time deposits over $100,000
increased 12.0% over 1999 average balances, and average foreign deposits
decreased 16.4% for 2000, as compared with 1999.

See Notes 9, 10 and 11 of the Notes to Consolidated Financial Statements and the
discussion under Liquidity Risk Management for information on borrowed funds.

CAPITAL

The Company's basic financial objective is to consistently produce superior
risk-adjusted returns on its shareholders' capital. The Company believes that a
strong capital position is vital to continued profitability and to promote
depositor and investor confidence. The Company's goal is to steadily achieve a
high return on shareholders' equity, while at the same time maintaining
"risk-based capital" of not less than the "well-capitalized" threshold, as
defined by federal banking regulators.

Total shareholders' equity on December 31, 2000 was $1,779 million, an increase
of 7.2% over total shareholders' equity of $1,660 million on December 31, 1999.
The ratio of average equity to average assets for 2000 was 7.71%, compared to
7.85% for 1999.

During 2000, 1999 and 1998, the Company repurchased and retired 80,174, 115,769
and 591,009 shares of its common stock at a cost of $3.9 million, $6.7 million
and $25.7 million, respectively.

On December 31, 2000, the Company's Tier 1 leverage ratio was 6.38%, as compared
to 6.16% on December 31, 1999. On December 31, 2000, the Company's Tier 1
risk-based capital ratio was 8.53%, as compared to 8.64% on December 31, 1999.

On December 31, 2000, the Company's total risk-based capital ratio was 10.83%,
as compared to 11.29% on December 31, 1999. Regulatory minimum capital adequacy
ratios for Tier 1 leverage, Tier 1 risk-based capital and total risk-based
capital are 3%, 4% and 8%, respectively. Ratios to be considered
well-capitalized are 5%, 6% and 10%, respectively. See Note 17 of the Notes to
Consolidated Financial Statements for additional information on risk-based
capital.

DIVIDENDS

Dividends per share were $.89 in 2000, an increase of 23.6% over $.72 in 1999,
which were up 33.3% over $.54 in 1998. The Company's quarterly dividend rate was
$.12 for the first quarter of 1998, increasing to $.14 per share for the second,
third and fourth quarters of 1998 and the first quarter of 1999. For the second
and third quarters of 1999 the dividend rate was increased to $.29 per share to
bring it into parity with the dividend rate of First Security Corporation. No
dividend was declared during the fourth quarter of 1999. Dividends for 2000 were
$.29 per share for the first quarter and were reduced to $.20 for the second,
third and fourth quarters after the merger agreement with First Security
Corporation was terminated.

FOREIGN OPERATIONS

Zions First National Bank opened a foreign office located in Grand Cayman, Grand
Cayman Islands, B.W.I. in 1980. The office accepts Eurodollar deposits from
qualified customers and places deposits with foreign banks and foreign branches
of other U.S. banks. Foreign deposits at December 31, 2000, 1999 and 1998
totaled $136 million, $210 million and $204 million, respectively; and averaged
$138 million for 2000, $165 million for 1999 and $182 million for 1998. See
Schedule 8 Loan Portfolio by Type for details of foreign loans outstanding.

RISK ELEMENTS

CREDIT RISK MANAGEMENT

Management of credit risk is essential in maintaining a safe and sound
institution. The Company has structured its organization to separate the lending
function from the credit administration function to strengthen the control and
independent evaluation of credit activities. Loan policies and procedures
provide the Company with a framework for consistent underwriting and a basis for
sound credit decisions. In addition, the Company has well-defined standards for
grading its loan portfolio, and management utilizes a comprehensive loan grading
system to determine risk potential in the portfolio. A separate internal credit
examination department periodically conducts examinations of the quality,
documentation and administration of the Company's lending departments, and
submits reports thereon to a committee of the Board of Directors. Emphasis is
placed on early detection of potential problem credits so that action plans can
be developed on a timely basis to mitigate losses.

Another aspect of the Company's credit risk management strategy is the
diversification of the loan portfolio. At year end, the Company had 1% of its
portfolio in loans held for sale, 25% in commercial loans, 67% in real estate
loans, 4% in consumer loans, and 2% in lease financing. The Company's real
estate portfolio is also diversified. Of the total real estate loan portfolio,
24% is in real estate construction loans, 3% is in home equity credit lines, 30%
is in 1-4 family residential loans and 43% is in commercial loans secured by
real estate. The Company's commercial real estate concentration is in part
mitigated by its emphasis of lending programs sponsored by the Small Business
Administration, which carries the preponderance of credit risk on these types of
loans. The Company also focuses on the provision of commercial real estate
credit to borrowers that occupy the facility. In addition, the Company attempts
to avoid the risk of an undue concentration of credits in a particular industry
or trade group. See Note 6 of the Notes to Consolidated Financial Statements for
further information on concentrations of credit risk. The Company has no
significant exposure to highly leveraged transactions. Most of the Company's
business activity is with customers located within the states of Utah, Idaho,
California, Nevada, Arizona, Colorado, and Washington. Also, the Company limits
its exposure to any individual customer or counterparty.

NONPERFORMING ASSETS

Nonperforming assets include nonaccrual loans, restructured loans and other real
estate owned. Loans are generally placed on nonaccrual status when the loan is
90 days or more past due as to principal or interest, unless the loan is in the
process of collection and well-secured. Consumer loans are normally not placed
on a nonaccrual status, inasmuch as they are generally charged off when they
become 120 days past due. Loans are restructured to provide a reduction or
deferral of interest or principal payments when the financial condition of the
borrower deteriorates and requires that the borrower be given temporary or
permanent relief from the original contractual terms of the credit. Other real
estate owned is primarily acquired through or in lieu of foreclosure on credits
secured by real estate.

The Company's nonperforming assets were $71 million on December 31, 2000, down
from $75 million on December 31, 1999. Such nonperforming assets as a percentage
of net loans and leases, other real estate owned and other nonperforming assets
were .49% on December 31, 2000, compared to .58% on December 31, 1999.

Accruing loans past due 90 days or more totaled $27 million on December 31,
2000, up from $21 million on December 31, 1999. These loans equaled .19% of net
loans and leases on December 31, 2000, as compared to .16% on December 31, 1999.

No loans were considered potential problem loans on December 31, 2000 or 1999.
Potential problem loans are defined as loans currently on accrual and not
contractually past due 90 days or more and not restructured, but about which
management has serious doubt as to the future ability of the borrower to comply
with present repayment terms and which may result in the reporting of the loans
as nonperforming assets in the future.

The Company's total recorded investment in impaired loans included in nonaccrual
loans and leases amounted to $45.9 million and $57.1 million on December 31,
2000 and 1999, respectively. The Company considers a loan to be impaired when
the accrual of interest has been discontinued and the loan meets certain other
criteria. The amount of the impairment is measured based on the present value of
expected cash flows, the observable market price of the loan, or the fair value
of the collateral. Impairment losses are included in the allowance for loan
losses through a provision for loan losses. Included in the allowance for loan
losses on December 31, 2000 and 1999, is an allowance of $10.1 million and $16
million, respectively, on $16.2 million and $22.5 million, respectively, of the
recorded investment in impaired loans. See Note 5 of the Notes to Consolidated
Financial Statements for additional information on impaired loans.

SCHEDULE 10
NONPERFORMING ASSETS

December 31,
------------------------------------
<(Amounts in millions) 2000 1999 1998 1997 1996
---- ---- ---- ---- ----

Nonaccrual loans:
Commercial, financial and agricultural .............. $ 20 $ 29 $ 12 $ 4 $ 5
Real estate ......................................... 34 34 39 7 6
Consumer ............................................ 2 1 1 1 1
Lease financing ..................................... 2 1 3 1 1
Other ............................................... -- -- -- -- --
Restructured loans:
Commercial, financial and agricultural .............. 2 -- -- -- --
Real estate ......................................... 1 1 5 1 1
Other real estate owned:
Commercial, financial and agricultural:
Improved ....................................... 6 5 -- 2 --
Unimproved ..................................... 2 3 -- -- --
Residential:
1-4 Family ..................................... 2 1 2 1 --
Multi-family ................................... -- -- -- -- --
Other ............................................... -- -- 3 -- --
---- ---- ---- ---- ----
Total .......................................... $ 71 $ 75 $ 65 $ 17 $ 14
==== ==== ==== ==== ====
% of net loans* and leases, other real estate owned and
other nonperforming assets .......................... .49% .58% .58% .31% .36%

Accruing loans past due 90 days or more:
Commercial, financial and agricultural .............. $ 8 $ 4 $ 5 $ 2 $ 1
Real estate ......................................... 18 15 20 7 2
Consumer ............................................ 1 2 1 1 1
---- ---- ---- ---- ----
Total .......................................... $ 27 $ 21 $ 26 $ 10 $ 4
==== ==== ==== ==== ====
% of net loans* and leases ............................... .19% .16% .23% .18% .09%

*Includes loans held for sale.

ALLOWANCE FOR LOAN LOSSES

The Company's allowance for loan losses was 1.36% of net loans and leases on
December 31, 2000, compared to 1.60% on December 31, 1999. Net charge-offs in
2000 were $42 million, or .31% of average loans and leases, compared to net
charge-offs of $30 million, or .25% of average net loans and leases in 1999 and
net charge-offs of $16 million, or .21% of average net loans and leases in 1998.

The allowance, as a percentage of nonaccrual loans and restructured loans, was
320.7% on December 31, 2000, compared to 310.9% on December 31, 1999 and 354.9%
on December 31, 1998. The allowance, as a percentage of nonaccrual loans and
accruing loans past due 90 days or more, was 229.4% on December 31, 2000,
compared to 238.1% on December 31, 1999 and 264.2% on December 31, 1998.

On December 31, 2000, 1999 and 1998, the allowance for loan losses includes an
allocation of $22 million, $23 million and $20 million, respectively, related to
commitments to extend credit on loans and standby letters of credit. Commitments
to extend credit on loans and standby letters of credit on December 31, 2000,
1999, and 1998 totaled $7,254 million, $6,001 million, and $5,090 million,
respectively. The Company's actual future credit exposure is much lower than the
contractual amounts of the commitments because a significant portion of the
commitments is expected to expire without being drawn upon.

In analyzing the adequacy of the allowance for loan losses, management utilizes
a comprehensive loan grading system to determine risk potential in the
portfolio, and considers the results of independent internal credit reviews. To
determine the adequacy of the allowance, the Company's loan and lease portfolio
is broken into segments based on loan type.

Historical loss experience factors by segment, adjusted for changes in trends
and conditions, are used in determining the required allowance for each segment.
Historical loss factors are evaluated and updated using migration analysis
techniques and other considerations based on the makeup of the specific
portfolio segment. Other considerations, such as volumes and trends of
delinquencies, nonaccruals, repossessions and bankruptcies, criticized and
classified loan trends, current and anticipated foreclosure losses, new products
and policies, economic conditions, concentrations of credit risk, and experience
and abilities of lending personnel, are also considered in establishing the loss
factors.

All loans graded substandard in the amount of $1 million or more and all credits
graded doubtful in the amount of $100 thousand or more are individually
evaluated based on facts and circumstances of the loan and a specific allowance
amount designated. Specific allowances may also be established for loans in
amounts below the specified thresholds when it is determined that the risk
differs significantly from factor amounts established for the category. Although
management has allocated a portion of the allowance to specific loan categories
using the methods described, the adequacy of the allowance must be considered in
its entirety. To mitigate the imprecision in most estimates of expected credit
losses, the allocated component of the allowance is supplemented by an
unallocated component. The unallocated portion of the allowance includes
management's judgmental determination of the amounts necessary for subjective
factors such as economic uncertainties and concentration risks. Accordingly, the
relationship of the unallocated component to the total allowance for loan losses
may fluctuate from period to period. Schedule 11 provides a breakdown of the
allowance for loan losses by loan category, and Schedule 12 summarizes loan loss
experience.

SCHEDULE 11
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

2000 1999 1998 1997 1996
---------------- --------------- --------------- --------------- ---------------
% of Allocation % of Allocation % of Allocation % of Allocation % of Allocation
total of total of total of total of total of
(Amounts in millions) loans allowance loans allowance loans allowance loans allowance loans allowance
----- --------- ----- --------- ----- --------- ----- --------- ----- ---------

Type of loan
Loans held for sale .................. 1.3% $ -- 1.6% $ -- 2.1% $ -- 3.3% $ -- 3.8% $ --
Commercial, financial and agricultural 25.1% 53 23.8% 46 25.4% 83 25.5% 17 23.8% 16
Real estate .......................... 66.7% 107 67.4% 100 64.9% 52 57.4% 28 59.0% 28
Consumer ............................. 4.2% 8 4.6% 12 5.1% 12 8.9% 10 8.4% 8
Lease financing ...................... 2.2% 4 2.1% 6 1.9% 6 3.2% 2 4.0% 2
Other receivables .................... 0.5% -- 0.5% -- 0.6% -- 1.7% -- 1.0% --
----- ----- ----- ----- -----
Total loans ..................... 100.0% 100.0% 100.0% 100.0% 100.0%
----- ----- ----- ----- -----
Off-balance sheet
unused commitments and
standby letters of credit ......... 22 23 20 9 6
--------- --------- --------- --------- ---------
Total allocated ...................... 194 187 173 66 60
Unallocated .......................... 2 17 40 23 17
--------- --------- --------- --------- ---------
Total allowance for loan losses . $ 196 $ 204 $ 213 $ 89 $ 77
========= ========= ========= ========= =========

SCHEDULE 12
SUMMARY OF LOAN LOSS EXPERIENCE

(Amounts in millions) 2000 1999 1998 1997 1996
-------- -------- -------- -------- --------

Loans* and leases outstanding on December 31,
(net of unearned income) ................. $ 14,378 $ 12,791 $ 11,219 $ 5,463 $ 3,941
======== ======== ======== ======== ========
Average loans* and leases outstanding
(net of unearned income) ................. $ 13,649 $ 11,819 $ 7,632 $ 4,547 $ 3,560
======== ======== ======== ======== ========

Allowance for loan losses:
Balance at beginning of year ................... $ 204 $ 213 $ 89 $ 77 $ 73

Allowance of companies acquired ................ 2 3 126 14 3

Provision charged against earnings ............. 32 18 14 6 5

Loans and leases charged off:
Commercial, financial and agricultural .... (38) (32) (9) (6) (1)
Real estate ............................... (4) (3) (6) -- --
Consumer .................................. (9) (9) (9) (8) (8)
Lease financing ........................... (2) (2) (1) -- --
-------- -------- -------- -------- --------
Total ................................ (53) (46) (25) (14) (9)
-------- -------- -------- -------- --------
Recoveries:
Commercial, financial and agricultural .... 6 6 3 2 2
Real estate ............................... 1 7 3 2 --
Consumer .................................. 3 3 3 2 2
Lease financing ........................... 1 -- -- -- 1
-------- -------- -------- -------- --------
Total ................................ 11 16 9 6 5
-------- -------- -------- -------- --------
Net loan and lease charge-offs ................. (42) (30) (16) (8) (4)
-------- -------- -------- -------- --------
Balance at end of year ......................... $ 196 $ 204 $ 213 $ 89 $ 77
======== ======== ======== ======== ========

Ratio of net charge-offs to
average loans and leases .................. .31% .25% .21% .19% .11%
Ratio of allowance for loan losses to loans
and leases outstanding on December 31, .... 1.36% 1.60% 1.89% 1.62% 1.95%
Ratio of allowance for loan losses to
nonperforming loans on December 31, ....... 320.69% 310.87% 354.94% 655.59% 546.81%
Ratio of allowance for loan losses to
nonaccrual loans and accruing loans past
due 90 days or more on December 31, ....... 229.35% 238.07% 264.20% 389.19% 458.91%

*Includes loans held for sale.

MARKET RISK MANAGEMENT

Market risk is the possibility that changes in interest rates or equity
securities prices will impair the fair value of the Company's financial
instruments. The Asset/Liability Committee (ALCOM) measures and reviews the
market risk of the Company and establishes policies and procedures to limit its
exposure to changes in interest rates. These policies are reviewed and approved
by the Boards of Directors of the Company's subsidiary banks. ALCOM objectives
are summarized as follows: ensure the safety and soundness of bank deposits,
while providing an appropriate return to shareholders; provide the basis for
integrated balance sheet, net interest income and liquidity management;
calculate the duration, dollar duration, and convexity of each class of assets,
liabilities, and net equity given defined interest rate scenarios; manage the
Company's exposure to changes in net interest income and market value of equity
due to interest rate fluctuations; quantify the effect of hedging instruments on
the market value of equity and net interest income under defined interest rate
scenarios; and identify and report any risk exposures that exceed limitations
approved by the Board of Directors.

Interest rate risk is the most significant market risk regularly undertaken by
the Company. This risk is monitored through the use of two complementary
measurement methods: equity duration and income simulation.

Equity duration is derived by first calculating the dollar duration of all
assets, liabilities and off-balance sheet investments. Dollar duration is
determined by calculating the market value of each instrument assuming interest
rates sustain immediate and parallel movements up 1% and down 1%. The average of
these two changes in market value is the dollar duration, which incorporates the
value of embedded and explicit options within each instrument. Subtracting the
dollar duration of liabilities from the dollar duration of assets and adding the
net dollar duration of off-balance sheet items results in the dollar duration of
equity. Duration of equity is computed by dividing the dollar duration of equity
by the market value of equity.

Income simulation is an estimate of the net interest income which would be
recognized under different rate environments. Net interest income is measured
under several parallel and non-parallel interest rate environments and considers
the possible exercise of options within the portfolio.

At year end 2000 and 1999, the Company's duration of equity was estimated to be
approximately 4.0 years and 3.4 years, respectively. A 200-basis-point immediate
increase in rates was estimated to increase the duration of equity to 4.6 years
in 2000 and 4.4 years in 1999. Conversely, an immediate decrease in rates of
similar magnitude was estimated to decrease the duration of equity to 3.2 years
in 2000 and 2.5 years in 1999. Company policy requires that all three of these
measures be between 0 and 7 years.

For income simulation, Company policy requires that net interest income not be
expected to decline by more than 10% during one year if rates were to
immediately rise or fall by 200 basis points. At year-end 2000 and 1999, net
interest income was expected to decline 0.4% and 0.6%, respectively, if interest
rates were to sustain an immediate increase of 200 basis points. If interest
rates were to similarly decline 200 basis points, net interest income would be
expected to decrease 1.6% and 2.3%, respectively. These estimates include
management's assumptions regarding loan and deposit pricing, security and loan
prepayments, and changing relationships to market rates.

Management exercises its best judgment in making assumptions regarding loan and
security prepayments, early deposit withdrawals, and other non-controllable
events in managing the Company's exposure to changes in interest rates. The
interest rate risk position is actively managed and changes daily as the
interest rate environment changes; therefore, positions at the end of any period
may not be reflective of the Company's position in any subsequent period.

At year end the one-year gap for the Company was negative $1,140 million: i.e.,
the $12,522 million of assets that mature or reprice during 2001 was less than
the sum of $12,065 million of liabilities and the negative $1,597 million net
effect of off-balance sheet swaps that mature or reprice during the same period.
This gap represented 5.2% of total assets. Detail of the repricing
characteristics of the balance sheet as of year end are presented in Schedule
13. The Company does not have policy limits regarding its gap position.

SCHEDULE 13
MATURITIES AND INTEREST RATE SENSITIVITY
ON DECEMBER 31, 2000

Rate sensitive
------------------------------------------------------
After three After one
Within months year but
three but within within After five Not rate
(Amounts in millions) months one year five years years sensitive Total
---------- ---------- ---------- ---------- ---------- ----------

USES OF FUNDS
Earning Assets:
Interest-bearing deposits ........... $ 9 $ 4 $ 8 $ 21
Federal funds sold .................. 51 51
Security resell agreements .......... 456 456
Securities:
Held to maturity ............... 974 862 1,087 $ 202 3,125
Available for sale ............. 155 209 259 159 782
Trading account ................ 280 280
Loans and leases .................... 7,989 1,533 3,522 1,139 14,183
Nonearning assets ........................ $ 3,041 3,041
---------- ---------- ---------- ---------- ---------- ----------
Total uses of funds ....... $ 9,914 $ 2,608 $ 4,876 $ 1,500 $ 3,041 $ 21,939
---------- ---------- ---------- ---------- ---------- ----------
SOURCES OF FUNDS
Interest-bearing deposits and liabilities:
Savings and money market deposits ... $ 2,822 $ 860 $ 4,014 $ 574 $ 8,270
Time deposits under $100,000 ........ 380 836 403 9 1,628
Time deposits $100,000 or more ...... 549 694 200 6 1,449
Foreign ............................. 136 136
Securities sold, not yet purchased .. 291 291
Federal funds purchased ............. 1,069 1,069
Security repurchase agreements ...... 1,328 1,328
Commercial paper .................... 173 25 198
FHLB advances and other borrowings:
Less than one year ............. 1,036 255 1,291
Over one year .................. 2 14 128 144
Long-term debt ...................... 118 302 420
Noninterest-bearing deposits ............. 1,608 1 280 $ 1,697 3,586
Other liabilities ........................ 310 310
Minority interest ........................ 40 40
Shareholders' equity ..................... 1,779 1,779
---------- ---------- ---------- ---------- ---------- ----------
Total sources of funds .... $ 9,392 $ 2,673 $ 5,029 $ 1,019 $ 3,826 $ 21,939
---------- ---------- ---------- ---------- ---------- ----------
Off-balance sheet items affecting
interest rate sensitivity ............. $ (2,022) $ 425 $ 1,587 $ 10
Interest rate sensitivity gap ............ $ (1,500) $ 360 $ 1,434 $ 491 $ (785)
Percent of total assets .................. (6.84)% 1.64 % 6.54% 2.24% (3.58)%
Cumulative interest rate sensitivity gap . $ (1,500) $ (1,140) $ 294 $ 785
Cumulative as a % of total assets ........ (6.84)% (5.20)% 1.34% 3.58%

The Company, through the management of maturities and repricing of its assets
and liabilities and the use of off-balance sheet arrangements, including
interest rate caps, floors, futures, options and exchange agreements, attempts
to manage the effect on net interest income of changes in interest rates. The
prime lending rate is the basis used for pricing many of the Company's loans,
and the 91-day Treasury bill rate is the index used for pricing many of the
Company's deposits. The Company, however, is unable to economically hedge the
prime/T-bill spread risk through the use of derivative financial instruments.
Interest rate swap maturities and average rates are presented in Schedule 14.
For additional information regarding off-balance sheet financial contracts,
refer to Notes 1, 12 and 19 of the Notes to Consolidated Financial Statements.

SCHEDULE 14
INTEREST RATE SWAP MATURITIES AND AVERAGE RATES

(Amounts in millions) 2001 2002 2003 2004 Thereafter Total
--------- --------- --------- --------- --------- ---------

Receive fixed rate/pay variable rate:
Notional amount ................... $ 425 $ 668 $ 302 $ 324 $ 303 $ 2,022
Weighted average rate received .... 7.05% 7.06% 6.68% 6.73% 7.16% 6.96%
Weighted average rate paid ........ 6.73% 6.75% 6.71% 6.73% 6.74% 6.74%

LIQUIDITY RISK MANAGEMENT

The Company manages its liquidity to provide adequate funds to meet its
financial obligations, including withdrawals by depositors and debt service
requirements as well as to fund customers' demand for credit. Liquidity is
primarily provided by the regularly scheduled maturities of the Company's
investment and loan portfolios. Management of the maturities of these portfolios
is an important source of medium to long-term liquidity. The Company's ability
to raise funds in the capital markets through the securitization process allows
it to take advantage of market opportunities to meet funding needs at a
reasonable cost.

The Parent's cash requirements consist primarily of debt service, dividends to
shareholders, operating expenses, income taxes and share repurchases. The
Parent's cash needs are routinely met through dividends from subsidiaries,
proportionate shares of current income taxes, management and other fees,
unaffiliated bank lines, and debt issuance.

At December 31, 2000, $117.6 million of dividend capacity was available from
subsidiaries to pay to the Parent without having to obtain regulatory approval.
During 2000, dividends from subsidiaries were $164.0 million. During 1998 the
Company started a program to issue short-term commercial paper. At December 31,
2000, outstanding commercial paper was $198.2 million. At December 31, 2000, the
Parent had revolving credit facilities with two banks totaling $65 million and
borrowing on the facilities of $65 million.

FORWARD-LOOKING INFORMATION

Statements in Management's Discussion and Analysis that are not based on
historical data are forward-looking, including, for example, the projected
performance of the Company and its operations. These statements constitute
forward-looking information within the meaning of the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from the
projections discussed in Management's Discussion and Analysis since such
projections involve significant risks and uncertainties. Factors that might
cause such differences include, but are not limited to: the timing of closing
proposed acquisitions being delayed or such acquisitions being prohibited;
competitive pressures among financial institutions increasing significantly;
economic conditions, either nationally or locally in areas in which the Company
conducts its operations, being less favorable than expected; and legislation or
regulatory changes which adversely affect the Company's operations or business.
The Company disclaims any obligation to update any factors or to publicly
announce the result of revisions to any of the forward-looking statements
included herein to reflect future events or developments.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

The following consolidated condensed statements of income present earnings and
operating cash earnings information.

(Amounts in millions) 2000 1999 1998 1997 1996
--------- --------- --------- --------- ---------

Net interest income ......................................... $ 803.4 $ 741.5 $ 573.9 $ 369.6 $ 297.1
Noninterest income(2) ....................................... 289.1 266.5 210.1 148.3 117.5
--------- --------- --------- --------- ---------
Total revenue .......................................... 1,092.5 1,008.0 784.0 517.9 414.6
Provision for loan losses ................................... 31.8 17.9 14.0 5.9 4.8
Noninterest expense(1) ...................................... 638.2 617.9 486.8 305.1 237.5
--------- --------- --------- --------- ---------
Pretax cash earnings ................................... 422.5 372.2 283.2 206.9 172.3
Income tax expense .......................................... 138.7 123.5 88.4 68.6 57.3
Minority interest ........................................... 2.4 5.9 0.4 -- --
--------- --------- --------- --------- ---------
Cash earnings(1) ....................................... 281.4 242.8 194.4 138.3 115.0
Amortization of goodwill and core deposit intangibles ....... 37.2 36.0 31.7 7.1 2.3
Merger expense .............................................. 45.5 27.7 38.1 0.7 --
Impairment loss on First Security Corporation common stock .. 96.9 -- -- -- --
Income tax benefit .......................................... (59.0) (14.0) (18.8) (0.9) (0.1)
Minority interest operating cash adjustment ................. 0.9 1.0 -- -- --
--------- --------- --------- --------- ---------
Net income ............................................. $ 161.7 $ 194.1 $ 143.4 $ 131.4 $ 112.8
========= ========= ========= ========= =========
Operating cash earnings per share (diluted) (1).............. $ 3.23 $ 2.83 $ 2.37 $ 2.03 $ 1.73
========= ========= ========= ========= =========
Net income per share (diluted) .............................. $ 1.86 $ 2.26 $ 1.75 $ 1.92 $ 1.69
========= ========= ========= ========= =========

(1) Before amortization of goodwill and core deposit intangible assets and
merger expense.
(2) Excluding impairment loss on First Security Corporation common stock.

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 AND 1999

(In thousands, except share amounts) 2000 1999
------------ ------------

ASSETS
Cash and due from banks .............................................................. $ 1,047,252 898,300
Money market investments:
Interest-bearing deposits ....................................................... 21,237 17,371
Federal funds sold .............................................................. 50,426 85,898
Security resell agreements ...................................................... 456,404 421,900
Investment securities:
Held to maturity, at cost (approximate market value $3,152,740 and $3,290,508) .. 3,125,433 3,330,444
Available for sale, at market (2000 - includes $151,424 pledged as collateral for
security repurchase agreements) ............................................ 782,466 778,930
Trading account, at market (2000 - includes $15,096 pledged as collateral for
security repurchase agreements) ............................................ 280,410 327,845
------------ ------------
4,188,309 4,437,219
Loans:
Loans held for sale ............................................................. 181,159 204,800
Loans, leases, and other receivables ............................................ 14,276,999 12,648,325
------------ ------------
14,458,158 12,853,125
Less:
Unearned income and fees, net of related costs ............................. 80,125 62,480
Allowance for loan losses .................................................. 195,535 204,114
------------ ------------
Net loans ............................................................. 14,182,498 12,586,531
Premises and equipment, net .......................................................... 314,938 287,448
Goodwill ............................................................................. 571,365 583,849
Core deposit intangibles ............................................................. 70,075 82,370
Other real estate owned .............................................................. 9,574 8,939
Other assets ......................................................................... 1,027,365 871,075
------------ ------------
$ 21,939,443 20,280,900
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing ............................................................. $ 3,585,672 3,276,097
Interest-bearing:
Savings and money market ................................................... 8,270,122 7,660,786
Time:
Under $100,000 ........................................................ 1,628,890 1,836,645
Over $100,000 ......................................................... 1,448,905 1,078,631
Foreign .................................................................... 136,394 209,780
------------ ------------
15,069,983 14,061,939
Securities sold, not yet purchased ................................................... 291,102 237,020
Federal funds purchased .............................................................. 1,069,124 825,997
Security repurchase agreements ....................................................... 1,327,721 1,366,653
Accrued liabilities .................................................................. 310,287 247,406
Commercial paper ..................................................................... 198,239 238,660
Federal Home Loan Bank advances and other borrowings:
Less than one year .............................................................. 1,290,960 1,038,045
Over one year ................................................................... 143,776 112,622
Long-term debt ....................................................................... 419,550 453,471
------------ ------------
Total liabilities .......................................................... 20,120,742 18,581,813
------------ ------------
Minority interest .................................................................... 39,857 39,249
Shareholders' equity:
Capital stock:
Preferred stock, without par value; authorized 3,000,000 shares;
issued and outstanding, none .......................................... -- --
Common stock, without par value; authorized 200,000,000 shares;
issued and outstanding, 87,100,188 shares and 85,592,643 shares ....... 907,604 888,231
Accumulated other comprehensive loss ............................................ (3,644) (4,158)
Retained earnings ............................................................... 874,884 775,765
------------ ------------
Total shareholders' equity ....................................... 1,778,844 1,659,838
------------ ------------
$ 21,939,443 20,280,900
============ ============

See accompanying notes to consolidated financial statements.

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

(In thousands, except per share amounts) 2000 1999 1998
---------- ---------- -----------

Interest income:
Interest and fees on loans .................................. $1,236,588 1,001,741 694,338
Interest on loans held for sale ............................. 14,477 12,194 14,256
Lease financing ............................................. 17,222 13,293 12,630
Interest on money market investments ........................ 67,353 67,234 92,248
Interest on securities:
Held to maturity:
Taxable ........................................... 196,917 175,701 131,712
Nontaxable ........................................ 16,398 18,784 16,154
Available for sale:
Taxable ........................................... 33,792 36,480 44,735
Nontaxable ........................................ 7,147 3,844 2,733
Trading account ........................................ 36,289 30,067 24,043
---------- ---------- -----------
Total interest income ........................ 1,626,183 1,359,338 1,032,849
---------- ---------- -----------
Interest expense:
Interest on savings and money market deposits ............... 329,373 247,729 173,833
Interest on time and foreign deposits ....................... 174,460 166,749 143,313
Interest on borrowed funds .................................. 318,972 203,371 141,761
---------- ---------- -----------
Total interest expense ................................. 822,805 617,849 458,907
---------- ---------- -----------
Net interest income .................................... 803,378 741,489 573,942
Provision for loan losses ........................................ 31,811 17,956 14,034
---------- ---------- -----------
Net interest income after provision for loan losses .... 771,567 723,533 559,908
---------- ---------- -----------
Noninterest income:
Service charges on deposit accounts ......................... 78,269 76,756 61,131
Other service charges, commissions, and fees ................ 65,315 66,098 57,027
Trust income ................................................ 18,205 15,762 10,969
Investment securities gain (loss), net ...................... 14,804 (2,970) 4,055
Impairment loss on First Security Corporation common stock .. (96,911) -- --
Underwriting and trading income ............................. 10,065 11,551 9,239
Loan sales and servicing income ............................. 51,741 40,516 50,365
Other ....................................................... 50,676 58,832 17,411
---------- ---------- -----------
Total noninterest income ............................... 192,164 266,545 210,197
---------- ---------- -----------
Noninterest expense:
Salaries and employee benefits .............................. 348,293 346,710 261,531
Occupancy, net .............................................. 51,671 49,393 33,387
Furniture and equipment ..................................... 52,704 45,477 38,256
Other real estate expense (income) .......................... 356 (66) 656
Legal and professional services ............................. 19,707 16,156 16,345
Supplies .................................................... 10,972 11,168 11,904
Postage ..................................................... 10,916 11,656 11,030
Advertising ................................................. 25,416 18,502 12,613
Merger-related expense ...................................... 45,492 27,691 38,128
FDIC premiums ............................................... 3,349 2,152 1,528
Amortization of goodwill .................................... 25,715 24,295 19,829
Amortization of core deposit intangibles .................... 11,508 11,713 11,812
Other ....................................................... 114,728 116,720 99,681
---------- ---------- -----------
Total noninterest expense .............................. 720,827 681,567 556,700
---------- ---------- -----------
Income before income taxes and minority interest ................. 242,904 308,511 213,405
Income taxes ..................................................... 79,661 109,498 69,632
---------- ---------- -----------
Net income before minority interest .................... 163,243 199,013 143,773
Minority interest ................................................ 1,534 4,949 420
---------- ---------- -----------
Net income ............................................. $ 161,709 194,064 143,353
=========== ========== ===========
Weighted-average common and common-equivalent
shares outstanding during the year ............................ 87,120 85,695 81,918
=========== ========== ===========
Net income per common share:
Basic ....................................................... $ 1.87 2.29 1.77
=========== ========== ===========
Diluted ..................................................... $ 1.86 2.26 1.75
=========== ========== ===========

See accompanying notes to consolidated financial statements.

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

(In thousands) 2000 1999 1998
------------- ------------- -------------

Cash flows from operating activities:
Net income ............................................................ $ 161,709 194,064 143,353
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Provision for loan losses ........................................ 31,811 17,956 14,034
Depreciation of premises and equipment ........................... 50,186 39,155 29,861
Amortization ..................................................... 64,786 51,367 50,506
Accretion of unearned income and fees, net of related costs ...... 16,983 18,437 (5,695)
Income to minority interest ...................................... 1,534 4,949 420
Proceeds from sales of trading account securities ................ 184,357,455 188,710,001 175,432,243
Increase in trading account securities ........................... (184,310,020) (188,845,991) (175,540,070)
Investment securities (gain) loss, net ........................... (14,804) 2,970 (4,055)
Impairment loss on First Security Corporation
common stock .................................................. 96,911 -- --
Proceeds from loans held-for-sale ................................ 533,285 878,638 1,237,514
Increase in loans held-for-sale .................................. (509,644) (852,309) (1,296,803)
Net gain on sales of loans, leases and other assets .............. (36,240) (31,674) (43,644)
Change in accrued income taxes ................................... 30,078 4,792 22,916
Change in accrued interest receivable ............................ (34,447) (15,457) 1,420
Change in accrued interest payable ............................... 11,342 201 1,183
Other, net ....................................................... (101,738) (155,462) (53,285)
------------- ------------- -------------
Net cash provided by (used in) operating activities ......... 349,187 21,637 (10,102)
------------- ------------- -------------
Cash flows from investing activities:
Net decrease (increase) in money market investments ................... (348) 135,386 874,130
Proceeds from maturities of investment securities held to maturity .... 881,175 804,139 3,466,594
Purchases of investment securities held to maturity ................... (663,948) (1,360,049) (3,519,660)
Proceeds from sales of investment securities available for sale ....... 1,245,192 367,345 573,197
Proceeds from maturities of investment securities available for sale .. 134,785 353,714 275,785
Purchases of investment securities available for sale ................. (1,442,094) (652,017) (789,738)
Proceeds from sales of loans and leases ............................... 1,175,687 1,005,530 918,948
Net increase in loans and leases ...................................... (2,665,154) (2,469,077) (2,033,560)
Payments on leveraged leases .......................................... (8,125) (8,118) (3,840)
Principal collections on leveraged leases ............................. 8,125 8,118 3,840
Proceeds from sales of premises and equipment ......................... 12,079 17,441 5,370
Purchases of premises and equipment ................................... (82,288) (93,769) (75,461)
Proceeds from sales of other assets ................................... 13,927 7,892 10,299
Net cash received (paid) for acquisitions ............................. 11,886 8,847 (246,485)
------------- ------------- -------------
Net cash used in investing activities ............................ (1,379,101) (1,874,618) (540,581)
------------- ------------- -------------
Cash flows from financing activities:
Net increase (decrease) in deposits ................................... 784,806 (365,695) 782,325
Net change in short-term funds borrowed ............................... 470,771 2,193,152 (91,272)
Proceeds from FHLB advances over one year ............................. 600,000 365,000 4,665
Payments on FHLB advances over one year ............................... (568,846) (309,755) (167,886)
Proceeds from issuance of long-term debt .............................. -- -- 195,041
Payments on long-term debt ............................................ (33,921) (264) (20,556)
Proceeds from issuance of common stock ................................ 6,717 9,753 137,404
Payments to redeem common stock ....................................... (3,899) (6,650) (25,744)
Dividends paid ........................................................ (76,762) (56,914) (41,600)
------------- ------------- -------------
Net cash provided by financing activities ........................ 1,178,866 1,828,627 772,377
------------- ------------- -------------
Net increase (decrease) in cash and due from banks ......................... 148,952 (24,354) 221,694
Cash and due from banks at beginning of year ............................... 898,300 922,654 700,960
------------- ------------- -------------
Cash and due from banks at end of year ..................................... $ 1,047,252 898,300 922,654
============= ============= =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest .............................................................. $ 812,018 617,610 459,700
Income taxes .......................................................... 63,825 28,300 55,400
Loans transferred to other real estate owned ............................... 13,872 11,282 5,055

See accompanying notes to consolidated financial statements.

Zions Bancorporation and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity
and Comprehensive Income
Years ended December 31, 2000, 1999 and 1998

Accumulated
Common stock other Total
------------------------- Comprehensive comprehensive Retained shareholders'
(In thousands, except share amounts) Shares Amount income income (loss) earnings equity
---------- ----------- ----------- ----------- ----------- -----------

BALANCE, DECEMBER 31, 1997 ................ 69,964,518 $ 292,383 4,537 559,686 856,606
Net income ................................ -- -- 143,353 -- 143,353 143,353
Other comprehensive loss, net of tax:
Realized and unrealized holding loss
arising during the year, net of tax
benefit of $3,595 ................. -- -- (5,803) -- -- --
Reclassification for realized gain
recorded in the income statement,
net of tax expense of $1,551 ...... -- -- (2,504) -- -- --
-----------
Other comprehensive loss ............. -- -- (8,307) (8,307) -- (8,307)
-----------
Total comprehensive income ................ -- -- $ 135,046 -- -- --
===========
Cash dividends:
Common, $.54 per share .............. -- -- -- (40,715) (40,715)
Preferred dividends of acquired
companies prior to merger ........ -- -- -- (887) (887)
Stock dividend of acquired company ........ 446,452 21,000 (21,009) (9)
Net proceeds from stock offering .......... 2,760,000 130,131 -- -- 130,131
Issuance of common shares for acquisitions 10,041,306 368,259 363 19,091 387,713
Exercise of acquired company warrants
prior to acquisition ................... 257,056 1,852 -- -- 1,852
Stock redeemed and retired ................ (591,009) (25,696) -- -- (25,696)
Stock options exercised, net of shares
tendered and retired ................... 676,307 8,590 -- -- 8,590
---------- ----------- ----------- ----------- -----------

BALANCE, DECEMBER 31, 1998 ................ 83,554,630 796,519 (3,407) 659,519 1,452,631
Net income ................................ -- -- 194,064 -- 194,064 194,064
Other comprehensive loss, net of tax:
Realized and unrealized holding loss
arising during the year, net of tax
benefit of $5,405 ................. -- -- (8,726) -- -- --
Reclassification for realized loss
recorded in the income statement,
net of tax benefit of $4,940 ...... -- -- 7,975 -- -- --
-----------
Other comprehensive loss ............. -- -- (751) (751) -- (751)
-----------
Total comprehensive income ................ -- -- $ 193,313 -- -- --
===========
Cash dividends:
Common, $.72 per share ............... -- -- -- (56,914) (56,914)
Stock dividend of acquired company ........ 107 21,694 -- (21,701) (7)
Issuance of common shares for acquisitions 1,571,143 58,358 -- 797 59,155
Stock redeemed and retired ................ (115,769) (6,650) -- -- (6,650)
Stock options exercised, net of shares
tendered and retired ................... 582,532 18,310 -- -- 18,310
---------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1999 ................ 85,592,643 888,231 (4,158) 775,765 1,659,838

Zions Bancorporation and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity
and Comprehensive Income (continued)
Years ended December 31, 2000, 1999 and 1998

Net income ................................. -- $ -- 161,709 -- 161,709 161,709
Other comprehensive loss, net of tax:
Realized and unrealized holding loss
arising during the year, net of tax
benefit of $31,088 ................. -- -- (50,187) -- -- --
Reclassification for realized loss
recorded in the income statement,
net of tax benefit of $31,406 ...... -- -- 50,701 -- -- --
-----------
Other comprehensive income ............ -- -- 514 514 -- 514
-----------
Total comprehensive income ................. -- -- $ 162,223 -- -- --
===========
Cash dividends:
Common, $.89 per share ................ -- -- -- (76,762) (76,762)
Issuance of common shares for
acquisitions .......................... 1,202,593 13,103 -- 14,172 27,275
Stock redeemed and retired ................. (80,174) (3,899) -- -- (3,899)
Stock options exercised, net of shares
tendered and retired .................... 385,126 10,169 -- -- 10,169
---------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 2000 ................. 87,100,188 $ 907,604 (3,644) 874,884 1,778,844
========== =========== =========== =========== ===========

See accompanying notes to consolidated financial statements.

Zions Bancorporation
and Subsidiaries
Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

BUSINESS Zions Bancorporation (the Parent) is a multibank holding company
organized under the laws of Utah in 1955, which provides a full range of banking
and related services through its subsidiaries operating primarily in Utah,
Idaho, California, Nevada, Arizona, Colorado, and Washington.

BASIS OF FINANCIAL STATEMENT PRESENTATION
The consolidated financial statements include the accounts of Zions
Bancorporation and its subsidiaries (the Company). All significant intercompany
accounts and transactions have been eliminated in consolidation. Certain prior
year amounts have been reclassified to conform to the current financial
statement presentation.

The consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States and prevailing
practices within the financial services industry. In preparing the consolidated
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the date of the
balance sheet and revenues and expenses for the period. Actual results could
differ from those estimates.

SECURITY RESELL AGREEMENTS Security resell agreements represent overnight and
term agreements, the majority maturing within 30 days. Either the Company or, in
some instances, third parties on behalf of the Company take possession of
underlying securities. The market value of such securities is monitored
throughout the contract term to ensure that asset values remain sufficient to
protect against counterparty default. The Company is permitted by contract to
sell or repledge certain securities it accepts as collateral for security resell
agreements. If sold, the Company's obligation to return the collateral is
recorded as a liability and included in the consolidated balance sheet as
"Securities sold, not yet purchased." Security resell agreements averaged
approximately $976 million during 2000, and the maximum amount outstanding at
any month-end during 2000 was $1,453 million.

INVESTMENT SECURITIES The Company classifies its securities according to their
purpose and holding period. Gains or losses on the sale of securities are
recognized using the specific identification method and recorded in noninterest
income.

Held-to-maturity securities, primarily debt securities, are stated at cost, net
of unamortized premiums and unaccreted discounts. The Company has the intent and
the ability to hold such securities until maturity. Upon adoption on January 1,
2001 of Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities, issued by the Financial Accounting Standards Board (FASB), the
Company will transfer substantially all held-to-maturity securities to either
the available-for-sale or trading category (see additional discussion in Note
2).

Debt securities that may not be held until maturity and marketable equity
securities are classified as available-for-sale and are reported at fair value,
with unrealized gains and losses, after applicable taxes, reported as a
component of other comprehensive income. Any declines in the value of debt
securities and marketable equity securities that are considered other than
temporary are recorded in noninterest income.

Securities acquired for short-term appreciation or other trading purposes are
classified as trading securities and are recorded at fair value. Realized and
unrealized gains and losses resulting from such fair value adjustments and from
recording the results of sales are recorded in trading income.

The market values of available-for-sale and trading securities are generally
based on quoted market prices or dealer quotes. If a quoted market price is not
available, market value is estimated using quoted market prices for similar
securities.

NONMARKETABLE SECURITIES Nonmarketable securities include certain venture
capital securities and securities acquired for various debt and regulatory
requirements. Nonmarketable venture capital securities are reported at estimated
fair values, in the absence of readily ascertainable market values. Changes in
fair value and gains and losses from sales are recognized in noninterest income.
The values assigned to the securities where no market quotations exist are based
upon available information and may not necessarily represent amounts that will
ultimately be realized. Such estimated amounts depend on future circumstances
and will not be realized until the individual securities are liquidated. The
valuation procedures applied include consideration of economic and market
conditions, current and projected financial performance of the investee company,
and the investee company's management team. Management believes that the cost of
an investment is initially considered the best indication of estimated fair
value unless there have been significant subsequent positive or negative
developments that justify an adjustment in the fair value estimate. Other
nonmarketable securities acquired for various debt and regulatory requirements
are accounted for at cost. These nonmarketable securities are included in other
assets on the Company's balance sheet.

LOANS Loans are reported at the principal amount outstanding, net of unearned
income. Unearned income, which includes deferred fees net of deferred direct
incremental loan origination costs, is amortized to interest income generally
over the life of the loan using principally an interest method.

Loans held for sale are carried at the lower of cost or market value because the
Company does not intend to hold these loans until maturity or sales of loans are
pending. Gains and losses are recorded in noninterest income, based on the
difference between sales proceeds and carrying value.

NONACCRUAL LOANS Loans are generally placed on a nonaccrual status when
principal or interest is past due 90 days or more unless the loan is both
well-secured and in the process of collection or when, in the opinion of
management, full collection of principal or interest is unlikely. Generally,
consumer loans are not placed on nonaccrual status, inasmuch as they are
normally charged off when they become 120 days past due. A loan may be returned
to accrual status when all delinquent interest and principal become current in
accordance with the terms of the loan agreement or when the loan is both
well-secured and in the process of collection.

IMPAIRED LOANS Loans, other than those included in large groups of
smaller-balance homogeneous loans, are considered impaired when, based on
current information and events, it is probable that the Company will be unable
to collect all amounts due according to the contractual terms of the loan
agreement, including scheduled interest payments. For a loan that has been
restructured, the contractual terms of the loan agreement refer to the
contractual terms specified by the original loan agreement, not the contractual
terms specified by the restructuring agreement.

This assessment for impairment occurs when and while such loans are on
nonaccrual, or the loan has been restructured. When a loan with unique risk
characteristics has been identified as being impaired, the amount of impairment
will be measured by the Company using discounted cash flows, except when it is
determined that the sole (remaining) source of repayment for the loan is the
operation or liquidation of the underlying collateral. In such cases, the
current fair value of the collateral, reduced by costs to sell, will be used in
place of discounted cash flows.

If the measurement of the impaired loan is less than the recorded investment in
the loan (including accrued interest, net deferred loan fees or costs and
unamortized premium or discount), an impairment is recognized by creating or
adjusting an existing allocation of the allowance for loan losses.

RESTRUCTURED LOANS In cases where a borrower experiences financial difficulties
and the Company makes certain concessionary modifications to contractual terms,
the loan is classified as a restructured (accruing) loan. Loans restructured at
a rate equal to or greater than that of a new loan with comparable risk at the
time the contract is modified may be excluded from the impairment assessment and
may cease to be considered impaired loans in the calendar years subsequent to
the restructuring if they are not impaired based on the modified terms.

Generally, a nonaccrual loan that is restructured remains on nonaccrual for a
period of six months to demonstrate that the borrower can meet the restructured
terms. However, performance prior to the restructuring, or significant events
that coincide with the restructuring, are included in assessing whether the
borrower can meet the new terms and may result in the loan being returned to
accrual at the time of restructuring or after a shorter performance period. If
the borrower's ability to meet the revised payment schedule is uncertain, the
loan remains classified as a nonaccrual loan.

ALLOWANCE FOR LOAN LOSSES In analyzing the adequacy of the allowance for loan
and lease losses, management utilizes a comprehensive loan grading system to
determine risk potential in the portfolio, and considers the results of
independent internal credit reviews. To determine the adequacy of the allowance,
the Company's loan and lease portfolio is broken into segments based on loan
type. Historical loss experience factors by segment, adjusted for changes in
trends and conditions, are used in determining the required allowance for each
segment. Historical loss factors are evaluated and updated using migration
analysis techniques and other considerations based on the makeup of the specific
portfolio segment. Other considerations, such as volumes and trends of
delinquencies, nonaccruals, repossessions and bankruptcies, criticized and
classified loan trends, current and anticipated foreclosure losses, new products
and policies, economic conditions, concentrations of credit risk, and experience
and abilities of lending personnel, are also considered in establishing the loss
factors.

All loans graded substandard in the amount of $1 million or more and all credits
graded doubtful in the amount of $100 thousand or more are individually
evaluated based on facts and circumstances of the loan and a specific allowance
amount may be designated. Specific allowances may also be established for loans
in amounts below the specific thresholds when it is determined that the risk
differs significantly from factor amounts established for the category. Although
management has allocated a portion of the allowance to specific loan categories
using the methods described, the adequacy of the allowance must be considered in
its entirety. To mitigate the imprecision in most estimates of expected credit
losses, the allocated component of the allowance is supplemented by an
unallocated component. This is accomplished by assigning high and low loss
ranges for each portfolio segment. The low range sets the minimum required
reserve and the high range provides a best estimate for risks and uncertainties.
The unallocated portion of the allowance incorporates management's judgmental
determination of the amounts necessary for subjective factors such as economic
uncertainties and concentration risks. Accordingly, the relationship of the
unallocated component to the total allowance for loan losses may fluctuate from
period to period.

ASSET SECURITIZATIONS When the Company sells receivables in securitizations of
automobile loans, credit card receivables, home equity loans and small business
loans, it may retain a cash reserve account, an interest-only strip, and in some
cases a subordinated tranche, all of which are retained interests in the
securitized receivables. Gain or loss on sale of the receivables depends in part
on the previous carrying amount of the financial assets involved in the
transfer, allocated between the assets sold and the retained interests based on
their relative fair value at the date of transfer. Quoted market prices are
generally not available for retained interests. To obtain fair values, the
Company estimates the present value of future expected cash flows using
management's best judgment of key assumptions, including credit losses,
prepayment speeds, forward yield curves, and discount rates commensurate with
the risks involved.

PREMISES AND EQUIPMENT Premises and equipment are stated at cost, net of
accumulated depreciation and amortization. Depreciation, computed on the
straight-line method, is charged to operations over the estimated useful lives
of the properties. Leasehold improvements are amortized over the terms of
respective leases or the estimated useful lives of the improvements, whichever
is shorter.

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS Goodwill results from acquisitions
made by the Company, and represents the excess of the purchase price over the
fair value of net assets acquired. Substantially all of the Company's goodwill
is amortized using the straight-line method over 25 years. Core deposit
intangibles are amortized on an accelerated basis using an estimated useful life
up to 10 years.

The Company reviews its intangible assets periodically for other-than-temporary
impairment. If such impairment is indicated, recoverability of the asset is
based on expected undiscounted net cash flows.

COMMITMENTS AND LETTERS OF CREDIT In the ordinary course of business, the
Company enters into commitments to extend credit, commercial letters of credit,
and standby letters of credit. Such financial instruments are only recorded in
the consolidated financial statements when they become payable. The credit risk
associated with these commitments is considered in management's determination of
the allowance for possible losses.

DERIVATIVE FINANCIAL INSTRUMENTS The Company enters into a variety of
off-balance sheet derivative financial instruments including interest rate
exchange contracts (swaps), cap agreements, and spread maintenance agreements,
as part of its overall asset and liability duration and interest rate risk
management strategy. The objective of these financial instruments is to match
estimated repricing periods of interest-sensitive assets and liabilities in
order to reduce interest rate exposure and/or manage desired asset and liability
duration. These instruments are generally used to hedge asset and liability
portfolios and, therefore, are not marked to market. Fees associated with these
financial instruments are accreted into interest income or amortized to interest
expense on a straight-line basis over the lives of the contracts and agreements.
Gains or losses on early termination of a swap are amortized over the remaining
term of the contract when the underlying assets or liabilities still exist.
Otherwise, such gains or losses are fully recorded as income or expense at the
termination of the contract. The net interest received or paid on these
contracts is reflected on a current basis in interest income or expense related
to the hedged obligation or asset. The Company also enters into foreign exchange
derivative financial instruments primarily as an accommodation to customers.
These contracts are carried at fair market value with unrealized gains and
losses recorded in noninterest income. Upon adoption of FASB Statement No. 133,
the Company will modify its accounting for derivative financial instruments as
appropriate to comply with the provisions of the Statement (see additional
discussion in Note 2).

INCOME TAXES Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

NET INCOME PER COMMON SHARE Diluted net income per common share is based on the
weighted-average outstanding common shares during each year, including common
stock equivalents. Basic net income per common share is based on the
weighted-average outstanding common shares during each year.

2. Recent Accounting Pronouncements

FASB Statement No. 133, as amended by Statement Nos. 137 and 138, is
effective for the Company as of January 1, 2001. Statement No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities.
The Statement requires that the Company recognize all derivatives on the balance
sheet at fair value. The accounting for changes in the fair value of a
derivative depends on the intended use of the derivative and the resulting
designation.

Derivative instruments used to hedge the exposure to changes in the fair value
of an asset, liability, or firm commitment attributable to a particular risk,
such as interest rate risk, are considered fair value hedges under Statement No.
133, while derivative instruments used to hedge the exposure to variability in
expected future cash flows, or other types of forecasted transactions, are
considered cash flow hedges. If the derivative is designated as a fair value
hedge, the gain or loss on the derivative is recognized in earnings together
with the offsetting loss or gain on the hedged asset, liability, or firm
commitment attributable to the risk being hedged. If the derivative is
designated as a cash flow hedge, the effective portion of the derivative's gain
or loss is initially reported as a component of other comprehensive income and
is subsequently recognized in earnings when the hedged forecasted transaction
affects earnings. The ineffective portion of a derivative's gain or loss will be
immediately recognized in earnings. Derivatives that are not hedges must be
adjusted to fair value through earnings. On January 1, 2001, all hedging
relationships were designated anew by the Company in accordance with the
provisions of the new Statement.

Upon adoption of Statement No. 133, the Company estimates that the
transition adjustment to establish the fair value of derivative instruments on
the balance sheet will be a decrease in net income of approximately $.3

million (net of tax benefit of $.2 million) and an increase in accumulated other
comprehensive income of approximately $21.3 million (net of tax expense of $13.2
million). In addition, in accordance with the transition provisions of the
Statement, the Company estimates that the effect of transferring
held-to-maturity securities to either the trading or available-for-sale category
will be a decrease in net income of approximately $.2 million (net of tax
benefit of $.1 million) and an increase in accumulated other comprehensive
income of approximately $17.7 million (net of tax expense of $9.9 million),
respectively. Accordingly, the total transition adjustment related to the
adoption of Statement No. 133 will be a decrease in net income of approximately
$.5 million (net of tax benefit of $.3 million) and an increase in accumulated
other comprehensive income of approximately $39.0 million (net of tax expense of
$23.1 million). The transition adjustments will be presented as cumulative
effect adjustments, as described in Accounting Principles Board Opinion No. 20,
Accounting Changes, in the Company's 2001 consolidated financial statements. The
transition will also affect assets and liabilities reported on the balance
sheet. The transition amounts were determined based on the interpretive guidance
issued by the FASB to date. However, the FASB continues to issue interpretive
guidance, which could change the Company's application of Statement No. 133 and
require adjustments to the transition amounts.

Statement No. 133, as applied to the Company's risk management strategies, will
impact assets and liabilities reported on the balance sheet and may increase or
decrease reported net income and shareholders' equity prospectively, but will
have no effect on cash flows or economic risk. The ongoing effects of Statement
No. 133 will depend on future market conditions and the Company's hedging
activities.

FASB Statement No. 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities, was issued in September 2000 and
replaces Statement No. 125. Statement No. 140 revises the standards for
accounting for securitizations and other transfers of financial assets and
collateral and requires certain additional disclosures related to transferred
assets. The provisions of Statement No. 140 relating to the recognition and
reclassification of collateral, as well as the disclosures relating to
collateral and securitization transactions, became effective for the Company as
of December 31, 2000 (see disclosures related to asset securitizations in Note
21). Other provisions related to the transfer and servicing of financial assets
and extinguishments of liabilities are effective for transactions occurring
after March 31, 2001.

Based on the Company's current position with respect to securitization
transactions, including any planned revisions to existing agreements, management
does not believe the new guidance will materially impact the Company's results
of operations, financial position, or liquidity.

3. Mergers and Acquisitions Activity

On June 6, 1999, the Company entered into a definitive Agreement and Plan of
Merger (the "Agreement"), with First Security Corporation. First Security
Corporation's stockholders unilaterally approved an alternative structure for
the transaction at a meeting held on March 22, 2000. In a special meeting of
shareholders held on March 31, 2000, the Company's shareholders declined to
adopt the Agreement and the Company was notified the next day by First Security
Corporation that it was terminating the Agreement. Included in merger-related
expenses for 2000 are approximately $40.5 million of pre-tax merger expenses
related to the termination of the merger and related disengagement. Also
included in results of operations for 2000 are a pre-tax impairment loss on
First Security Corporation common stock of $96.9 million recognized during the
first quarter of the year and gains from the subsequent sale of the common stock
of $23.6 million.

On July 28, 2000, the Company completed the acquisition of County Bank,
headquartered in Prescott, Arizona, in exchange for approximately 1.1 million
shares of the Company's common stock. County Bank had assets of approximately
$247 million and total shareholders' equity of $23 million. The acquisition was
accounted for as a pooling of interests and was not considered material to the
historical results of the Company and, accordingly, the Company's financial
statements were not restated.

On October 5, 1999, the Company acquired all of the outstanding shares of
Regency Bancorp ("Regency"), a bank holding company headquartered in Fresno,
California, in exchange for approximately one million shares of the Company's
common stock. The acquisition was accounted for as a purchase and, accordingly,
the Company's financial statements reflect its operations from the date of
acquisition. Goodwill of approximately $33 million was recorded in the fourth
quarter of 1999. The pro forma effect on prior period results of operations is
not significant.

On October 15, 1999, the Company completed its acquisition of Pioneer
Bancorporation ("Pioneer"), located in Reno, Nevada, resulting in the issuance
of approximately 5.4 million shares of the Company's common stock for all the
outstanding shares of Pioneer common stock in a tax-free exchange. The
acquisition of Pioneer was accounted for as a pooling of interests and,
accordingly, financial information for all periods presented prior to the date
of acquisition was restated to present the combined financial condition and
results of operations as if the acquisition had been in effect for all such
periods. At September 30, 1999, Pioneer had assets of approximately $1 billion,
net loans of $675 million, deposits of $941 million, shareholders' equity of $73
million, and net income for the nine months applicable to common shareholders of
$10.6 million.

On January 6, 1998, the Company completed its acquisition of Vectra Banking
Corporation ("Vectra") and its banking subsidiary, Vectra Bank, located in
Denver, Colorado, in exchange for 4.0 million shares of the Company's common
stock. The acquisition was accounted for using the purchase method of
accounting. The results of the acquisition are included in the periods
subsequent to the acquisition date. Goodwill of $129 million was recorded in the
first quarter of 1998 in connection with this purchase.

On May 22, 1998, the Company acquired all the outstanding shares of FP Bancorp,
Inc. ("FP") of Escondido, California, and its banking subsidiary, First Pacific
National Bank. The Company issued 1.9 million shares of the Company's common
stock. The acquisition was accounted for as a purchase; the results of the
acquisition are included in the periods subsequent to the acquisition date.
Goodwill of $57 million was recorded in the second quarter of 1998 in connection
with this purchase.

On September 8, 1998, the Company acquired The Commerce Bancorporation
("Commerce"), and its banking subsidiary, The Commerce Bank of Washington, N.A.
for 1.9 million shares of the Company's common stock. On the date of
acquisition, Commerce had total assets of $318 million and total shareholders'
equity of $24 million. The acquisition was accounted for as a pooling of
interests and, accordingly, financial information for all periods presented
prior to the date of acquisition has been restated to present the combined
financial condition and results of operations as if the acquisition had been in
effect for all such periods.

On October 1, 1998, the Company acquired The Sumitomo Bank of California
("Sumitomo"), located in San Francisco, California. Cash consideration of
approximately $546.0 million was paid for the acquisition. Sumitomo had total
assets of $4.5 billion and total shareholders' equity of $427 million at the
date of acquisition. The acquisition was accounted for using the purchase method
of accounting and, accordingly, the results of the acquisition are included in
the periods subsequent to the acquisition date. The Company recorded $107
million of goodwill with this transaction. Sumitomo and FP were merged with
Grossmont Bank and the name was changed to California Bank & Trust ("CB&T"). The
Company sold a minority interest in CB&T to a limited partnership and Director
of the Company for its cost basis of approximately $33 million.

During 1998, the Company completed the acquisition of four additional banking
organizations in Colorado, namely Sky Valley Bank Corp., Tri-State Finance
Corporation, Routt County National Bank Corporation, and SBT Bankshares, for an
aggregate of 2.4 million shares of common stock. These acquisitions were
accounted for as purchases and, accordingly, the Company's financial statements
reflect them from the date of acquisition. The Company recorded $69 million in
goodwill in connection with these purchases.

During 1998, the Company issued 1.7 million shares of the Company's common
stock to acquire four additional banking organizations in Colorado, namely
Kersey Bancorp., N.A., Eagle Holding Company, Citizens Banco, Inc., and Mountain
Financial Holding Company. Each of these acquisitions was accounted for as a
pooling of interests and was not considered material to the historical results
of the Company and, accordingly, the Company's financial statements were not
restated.

On November 20, 2000, the Company announced a definitive agreement to acquire
Draper Bancorp ("Draper"), headquartered in Draper, Utah, and its banking
subsidiary, Draper Bank, in exchange for Company common stock. At December 31,
2000, Draper had total assets of approximately $242 million (unaudited). This
transaction will be accounted for as a pooling of interests and will close in
the first quarter of 2001.

On December 14, 2000, the Company announced a definitive agreement to acquire
Eldorado Bancshares, Inc. ("Eldorado"), headquartered in Laguna Hill,
California, and its banking subsidiaries, Eldorado Bank and Antelope Valley
Bank. As of December 31, 2000, Eldorado had total assets of approximately $1.3
billion (unaudited). The transaction will be accounted for as a purchase and is
expected to close during the first quarter of 2001.

On December 27, 2000, the Company announced a definitive agreement with Pacific
Century Financial Corporation to purchase nine Arizona branches. The purchase
will include approximately $225 million (unaudited) in loans, and approximately
$400 million (unaudited) in deposits, and branch facilities, and is expected to
close during the second quarter of 2001.

Merger-related expenses for each of the years in the three-year period ended
December 31, 2000 are presented below (in thousands):

2000 1999 1998
------- ------- -------
Severance and other employee benefits .. $ 6,206 12,363 11,762
Equipment and occupancy expense ........ 5,057 1,722 7,773
Integration of business operations ..... 9,674 451 5,834
Integration of information systems ..... 6,232 3,403 1,668
Legal and other professional fees ...... 12,815 4,810 5,957
Other integration costs ................ 5,508 4,942 5,134
------- ------- -------
$45,492 27,691 38,128
======= ====== ======

In connection with the terminated First Security Corporation merger, the Company
incurred pre-tax merger expenses of $40.5 million during 2000. These costs were
comprised of $5.0 million in severance and other employee benefits, $3.1 million
in equipment and occupancy related expense, $9.7 million in integration of
business operations, $5.2 million in integration of information systems, $12.4
million in legal and other professional fees, and $5.1 million in other
integration costs. In 2000, the Company paid $.7 million of pre-tax expense in
connection with the acquisition of County Bank, which consisted of $.3 million
in information system integration expense and $.4 million in legal and
professional fees.

During 2000, the Company also incurred $4.3 million in merger-related expenses
relating to previously consummated acquisitions of Sumitomo and Vectra. The
expenses consisted of $1.2 million in severance and other employee benefits,
$2.0 million in equipment and occupancy related expense, $.7 million in
integration of information systems, and $.4 million in other integration related
costs. As of December 31, 2000, $1.4 million in severance, $.1 million in
equipment and occupancy expense, and $.2 million in other integration costs
related to the terminated First Security Corporation merger remain accrued. Also
at December 31, 2000, approximately $2.9 million in severance remains accrued
relating to the acquisitions of Sumitomo, Regency and Vectra. The Company
expects that substantially all of the unpaid merger expenses at December 31,
2000 will be paid in 2001.

In connection with the Regency and Pioneer mergers, the Company recorded pre-tax
merger expenses of $14.3 million in 1999. These costs were comprised of $9.6
million in severance and other employee benefits, $.3 million in integration of
information systems, $3.5 million in expenses for legal and other professional
fees, and $.9 million in other integration costs. During 1999, the Company paid
$4.5 million in accrued severance and other employee benefits and $3.5 million
in legal and other professional fees and other integration costs. As a result of
the consolidation effort associated with Sumitomo, the Company recorded
additional pre-tax merger expenses of $8.4 million during 1999. Those costs were
comprised of $2.3 million in severance and other employee benefits, $1.7 million
in equipment and occupancy costs, $.5 million in integration of business
operations, $3.1 million in integration of information systems, $.3 million in
legal and professional fees, and $.5 million in other integration costs. During
1999, the Company paid $.5 million in severance and other employee benefits,
$1.1 million in legal and other professional fees, and $3.5 million in other
integration costs associated with earlier acquisitions.

The Company recorded pre-tax merger expenses of $38.1 million in 1998 in
connection with the Sumitomo and eleven other mergers. The Sumitomo merger
expenses included $5.3 million in severance and other employee benefits, $7.8
million in real property lease terminations, $5.8 million in integration of
business systems, and $1.7 million in integration of information systems. In
connection with the other eleven mergers, the Company incurred $6.3 million in
severance and other employee benefits, $6.0 million in legal and other
professional fees, and $5.2 million in other integration costs. As a result of
these twelve mergers, a liability of $22.1 million was recorded in 1998 and was
paid in total during 1999.

4. Investment Securities

Investment securities as of December 31, 2000 are summarized as follows (in
thousands):

Held to maturity
-------------------------------------------------
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
---------- ---------- ---------- ----------
U.S. Treasury
securities ........... $ 1,145 14 2 1,157
U.S. government
agencies and
corporations:
Small Business
Administration
loan-backed
securities ...... 560,328 6,644 3,816 563,156
Other agency
securities ...... 1,268,763 24,732 8,350 1,285,145
States and
political
subdivisions ......... 292,521 4,357 1,127 295,751
Mortgage-
backed
securities ........... 1,002,676 7,119 2,264 1,007,531
---------- ---------- ---------- ----------
$3,125,433 42,866 15,559 3,152,740
========== ========== ========== ==========

Available for sale
-------------------------------------------------
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
---------- ---------- ---------- ----------
U.S. Treasury
securities ........... $ 51,036 1,566 43 52,559
U.S. government
agencies and
corporations ......... 93,924 353 403 93,874
States and political
subdivisions ......... 184,714 5,842 435 190,121
Mortgage- and
other asset-
backed
securities ........... 274,307 447 1,725 273,029
---------- ---------- ---------- ----------
603,981 8,208 2,606 609,583
Equity securities:
Mutual funds:
Accessor
Funds, Inc. ....... 159,264 1,245 798 159,711
Stock ................ 17,417 4,810 9,055 13,172
---------- ---------- ---------- ----------
$ 780,662 14,263 12,459 782,466
========== ========== ========== ==========

Investment securities as of December 31, 1999 are summarized as follows (in
thousands):

Held to maturity
-------------------------------------------------
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
---------- ---------- ---------- ----------
U.S. Treasury
securities ........... $ 1,497 -- 2 1,495
U.S. government
agencies and
corporations:
Small Business
Administration
loan-backed
securities ...... 439,818 7,077 2,284 444,611
Other agency
securities ...... 1,269,677 445 36,903 1,233,219
States and
political
subdivisions ......... 313,743 1,265 6,146 308,862
Mortgage-
backed
securities ........... 1,305,709 4,448 7,836 1,302,321
---------- ---------- ---------- ----------
$3,330,444 13,235 53,171 3,290,508
========== ========== ========== ==========

Available for sale
-------------------------------------------------
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
---------- ---------- ---------- ----------
U.S. Treasury
securities ........... $ 93,106 178 455 92,829
U.S. government
agencies and
corporations ......... 50,682 28 920 49,790
States and political
subdivisions ......... 102,108 165 5,025 97,248
Mortgage- and
other asset-
backed
securities ........... 146,920 350 4,453 142,817
---------- ---------- ---------- ----------
392,816 721 10,853 382,684
Equity securities:
Mutual funds:
Accessor
Funds, Inc. ....... 140,935 186 2,447 138,674
Stock ................ 242,700 14,921 49 257,572
---------- ---------- ---------- ----------
$ 776,451 15,828 13,349 778,930
========== ========== ========== ==========

The amortized cost and estimated market value of investment securities as of
December 31, 2000 by contractual maturity, excluding equity securities, are
shown below. Expected maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without call
or prepayment penalties (in thousands):

Held to maturity Available for sale
----------------------- -----------------------
Estimated Estimated
Amortized market Amortized market
cost value cost value
---------- ---------- ---------- ----------
Due in one
year or less ... $ 435,938 437,910 69,444 69,537
Due after one
year through
five years ..... 2,110,156 2,109,913 209,293 211,306
Due after five
years through
ten years ...... 250,940 255,717 114,787 114,784
Due after
ten years ...... 328,399 349,200 210,457 213,956
---------- ---------- ---------- ----------
$3,125,433 3,152,740 603,981 609,583
========== ========== ========== ===========

Gross gains of $27.5 million, $2.4 million, and $9.4 million and gross losses of
$12.7 million, $5.4 million, and $5.3 million were recognized in "Investment
securities gain (loss), net" on sales and write-downs of investment securities
for the years ended December 31, 2000, 1999, and 1998, respectively. The Company
also recognized a pre-tax impairment loss of $96.9 million in 2000 on a
write-down of First Security Corporation common stock.

Net gains from securities held by the Company's venture capital subsidiaries,
and included in other noninterest income, were $.9 million in 2000 and $42.6
million in 1999. Consolidated net income includes a net loss of approximately
$1.5 million in 2000 and net income of approximately $22.9 million in 1999 from
the Company's venture capital subsidiaries.

As of December 31, 2000 and 1999, securities with an amortized cost of $2,130
million and $1,730 million, respectively, were pledged to secure public and
trust deposits, advances, and for other purposes as required by law.

5. Loans and Allowance for Loan Losses

Loans are summarized as follows at December 31
(in thousands):

2000 1999
----------- -----------
Loans held for sale ...................... $ 181,159 204,800
Commercial, financial, and agricultural .. 3,614,977 3,036,229
Real estate:
Construction ......................... 2,273,191 1,722,295
Other ................................ 7,363,070 6,902,855
Consumer ................................. 607,079 597,375
Lease financing .......................... 317,292 274,732
Foreign .................................. 26,263 52,697
Other receivables ........................ 75,127 62,142
----------- -----------
$14,458,158 12,853,125
=========== ==========

As of December 31, 2000 and 1999, loans with a carrying value of $1,426 million
and $1,140 million, respectively, were pledged as security for Federal Home Loan
Bank advances.

Sales of loans held for sale were $533 million in 2000, $879 million in 1999,
and $1,238 million in 1998. Gain on the sales, excluding servicing, of both
loans held for sale and loan securitizations was $33.5 million in 2000, $24.2
million in 1999, and $36.2 million in 1998.

Changes in the allowance for loan losses are summarized as follows (in
thousands):
2000 1999 1998
--------- --------- ---------
Balance at beginning of year .... $ 204,114 212,557 88,622
Allowance for
loan losses of
companies acquired ........... 1,961 2,623 125,691
Additions:
Provision for loan losses .. 31,811 17,956 14,034
Recoveries ................. 10,290 16,544 9,416
Deductions:
Loan charge-offs ........... (52,641) (45,566) (25,206)
--------- --------- ---------
Balance at end of year .......... $ 195,535 204,114 212,557
========= ========= =========

At December 31, 2000, 1999, and 1998, the allowance for loan losses includes an
allocation of $22 million, $23 million, and $20 million, respectively, related
to commitments to extend credit and standby letters of credit.

The Company's total recorded investment in impaired loans was $46 million and
$57 million at December 31, 2000 and 1999, respectively. Impaired loans of $16
million and $22 million at December 31, 2000 and 1999 required an allowance of
$10 million and $16 million, respectively, which is included in the allowance
for loan losses. Contractual interest due and interest foregone on impaired
loans were $9.1 million and $6.7 million, respectively, for 2000, $5.3 million
and $3.2 million, respectively, for 1999, and $3.8 million and $2.1 million,
respectively, for 1998. The average recorded investment in impaired loans was
$57 million in 2000, $27 million in 1999, and $18 million in 1998.

6. Concentrations of Credit Risk

Credit risk includes the loss that would be recognized subsequent to the
reporting date if counterparties failed to perform as contracted. Concentrations
of credit risk from financial instruments (whether on- or off-balance sheet)
occur when groups of customers or counterparties having similar economic
characteristics are unable to meet contractual obligations when similarly
affected by changes in economic or other conditions. The Company limits its
exposure to any individual customer or counterparty.

Most of the Company's business activity is with customers located in the states
of Utah, Idaho, California, Nevada, Arizona, Colorado, and Washington. The
commercial loan portfolio is well diversified, consisting of 11 major industry
classification groupings. As of December 31, 2000, the larger concentrations of
risk in the commercial loan and leasing portfolio are represented by the real
estate, construction, business services and transportation industry groupings.
The Company has minimal credit exposure from lending transactions with highly
leveraged entities. The majority of foreign loans are supported by domestic real
estate or letters of credit.

7. Premises and Equipment

Premises and equipment are summarized as follows at December 31 (in thousands):

2000 1999
-------- --------
Land ............................ $ 53,884 50,209
Buildings ....................... 166,607 150,399
Furniture and equipment ......... 288,882 263,270
Leasehold improvements .......... 71,160 64,887
-------- --------
Total ........................... 580,533 528,765
Less accumulated depreciation
and amortization ............. 265,595 241,317
-------- --------
Net book value .................. $314,938 287,448
======== =======

8. Deposits

At December 31, 2000, the scheduled maturities of all time deposits are as
follows (in thousands):

2001 $2,459,550
2002 393,390
2003 120,812
2004 44,849
2005 and thereafter 59,194
----------
$3,077,795
==========

At December 31, 2000, the contractual maturities of time deposits with a
denomination of $100,000 or more were as follows: $549 million in 3 months or
less, $295 million over 3 months through 6 months, $399 million over 6 months
through 12 months and $206 million over 12 months.

Deposit overdrafts that have been reclassified as loan balances were $43 million
and $21 million at December 31, 2000 and 1999, respectively.

9. Short-Term Borrowings

Short-term borrowings generally mature in less than 30 days. The following table
shows selected information for these borrowings (in thousands):

2000 1999 1998
---------- ---------- ----------
Federal funds
purchased:
Average amount
outstanding ........... $ 851,465 717,085 401,412
Weighted average rate .... 6.12% 4.91% 4.61%
Highest month end
balance ............... 1,069,124 866,716 594,503
Year-end balance ......... 1,069,124 825,997 337,283
Weighted average
rate on outstandings
at year-end ........... 6.28% 4.69% 4.58%

Security repurchase
agreements:
Average amount
outstanding ........... $1,895,421 1,651,514 1,507,196
Weighted average rate .... 5.68% 4.44% 4.77%
Highest month end
balance ............... 2,664,768 2,462,928 1,771,702
Year-end balance ......... 1,327,721 1,366,653 992,671
Weighted average
rate on outstandings
at year-end ........... 5.56% 4.53% 4.40%

The Company participates in overnight and term security repurchase agreements.
Most of the overnight agreements are performed with sweep accounts in
conjunction with a master repurchase agreement. In this case, securities under
the Company's control are pledged for and interest is paid on the collected
balance of the customers' accounts. For term repurchase agreements, securities
are transferred to the applicable counterparty. The counterparty, in certain
instances, is contractually entitled to sell or repledge securities accepted as
collateral. The carrying amount of such securities is disclosed in the
consolidated balance sheet as of December 31, 2000.

10. Federal Home Loan Bank Advances
and Other Borrowings

Federal Home Loan Bank (FHLB) advances and other borrowings over one year are
summarized as follows at December 31 (in thousands):

2000 1999
-------- --------
FHLB advances, 5.52%-8.32% .. $131,276 100,622
Notes payable, 5.66%-8.08% .. 12,500 12,000
-------- --------
$143,776 112,622
======== =======

The FHLB advances are borrowed by Zions First National Bank (ZFNB) and Vectra
Bank Colorado, N.A. (Vectra), wholly owned subsidiaries, under their lines of
credit with the Federal Home Loan Banks of Seattle and Topeka, respectively. The
lines of credit are secured under a blanket pledge whereby ZFNB and Vectra
maintain unencumbered collateral with a carrying amount, which has been adjusted
using a pledge requirement percentage based upon the types of collateral
pledged, equal to at least 100 percent of outstanding advances.

Interest expense on FHLB advances and other borrowings over one year was $8.5
million, $4.8 million, and $6.6 million for the years ended December 31, 2000,
1999, and 1998, respectively.

Maturities of FHLB advances and other borrowings with original maturities over
one year are as follows at December 31, 2000 (in thousands):

2001 $103,316
2002 3,005
2003 3,754
2004 2,570
2005 5,833
Thereafter 25,298
--------
$143,776
========

11. Long-Term Debt

Long-term debt at December 31 is summarized as follows (in thousands):

2000 1999
-------- --------
Guaranteed preferred beneficial
interests in junior subordinated
deferrable interest debentures ...... $189,575 223,000
Subordinated notes:
Floating rate subordinated notes,
maturity in 2005 and 2008 ........ 177,000 177,000
8.625% subordinated note,
maturity in 2002 ................. 50,000 50,100
Capital leases and other
notes payable ....................... 2,975 3,371
-------- --------
$419,550 453,471
======== =======

The guaranteed preferred beneficial interests in junior subordinated deferrable
interest debentures include $170.1 million of 8.536 percent debentures issued by
Zions Institutional Capital Trust A (ZICTA), $2.0 million of 10.25 percent
debentures issued by GB Capital Trust (GBCT), and $17.5 million of 9.50 percent
debentures issued by VBC Capital I Trust (VBCCIT).

The ZICTA debentures are direct and unsecured obligations of ZFNB and are
subordinate to the claims of depositors and general creditors. The Company has
irrevocably and unconditionally guaranteed all of ZFNB's obligations under the
debentures. The GBCT and VBCCIT debentures are direct and unsecured obligations
of the Company through the acquisition of GB Bancorporation and Vectra Banking
Corporation, and are subordinate to other indebtedness and general creditors of
the Company. ZICTA, GBCT, and VBCCIT debentures have the right, with the
approval of banking

regulators, to early redemption in 2006, 2007, and 2002, respectively. ZICTA and
GBCT debentures require semiannual interest payments and mature on December 15,
2026 and January 15, 2027, respectively. VBCCIT debentures require quarterly
interest payments and mature on April 30, 2027.

Floating-rate subordinated notes consist of $67 million callable quarterly
beginning in 2000 and $110 million callable in 2003. These notes require
quarterly interest payments. The 8.625 percent subordinated note is not
redeemable prior to maturity and requires semiannual interest payments. All
subordinated notes are unsecured.

Interest expense on long-term debt was $34.2 million, $35.1 million and $29.1
million for the years ended December 31, 2000, 1999, and 1998, respectively.

Maturities and sinking fund requirements on long-term debt are as follows for
the years succeeding December 31, 2000 (in thousands):

Consoli- Parent
dated only
-------- --------
2001 $ 378 --
2002 50,415 50,000
2003 450 --
2004 446 --
2005 67,354 67,000
Thereafter 300,507 110,000
-------- --------
$419,550 227,000
======== =======

12. Commitments and Contingent Liabilities

The Company is a party to financial instruments with off-balance sheet risk in
the normal course of business to meet the financing needs of its customers, to
reduce its own exposure to fluctuations in interest rates, and to make a market
in U.S. government, agency, and municipal securities. These financial
instruments involve, to varying degrees, elements of credit, liquidity, and
interest rate risk in excess of the amount recognized in the balance sheets.

Contractual amounts of the off-balance sheet financial instruments used to meet
the financing needs of the Company's customers are as follows (in thousands):

2000 1999
---------- ----------
Commitments to extend credit .. $6,991,330 5,810,745
Standby letters of credit:
Performance .............. 81,607 79,184
Financial ................ 180,826 110,676
Commercial letters of credit .. 11,831 17,689

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require the payment of a fee. The amount of collateral obtained, if deemed
necessary by the Company upon extension of credit, is based on management's
credit evaluation of the counterparty. Collateral varies but may include
accounts receivable, inventory, property, plant and equipment, and
income-producing properties.

Establishing commitments to extend credit gives rise to credit risk. As of
December 31, 2000, a significant portion of the Company's commitments is
expected to expire without being drawn upon; commitments totaling $4.9 billion
expire in 2001. As a result, the Company's actual future credit exposure or
liquidity requirements will be lower than the contractual amounts of the
commitments. The Company uses the same credit policies and procedures in making
commitments to extend credit and conditional obligations as it does for
on-balance sheet instruments. These policies and procedures include credit
approvals, limits, and monitoring.

Standby and commercial letters of credit are conditional commitments issued by
the Company generally to guarantee the performance of a customer to a third
party. The guarantees are primarily issued to support public and private
borrowing arrangements, including commercial paper, bond financing, and similar
transactions. Standby letters of credit include commitments in the amount of
$217.5 million expiring in 2001 and $44.9 million expiring thereafter through
2009. The credit risk involved in issuing letters of credit is essentially the
same as that involved in extending loan facilities to customers. The Company
generally holds marketable securities and cash equivalents as collateral
supporting those commitments for which collateral is deemed necessary.

The Company enters into interest rate caps, spread maintenance agreements,
exchange contracts (swaps), and forward agreements as part of its overall asset
and liability duration and interest rate risk management strategy. These
transactions enable the Company to manage asset and liability durations, and
transfer, modify, or reduce its interest rate risk. The notional amounts of the
contracts are used to express volume, but the amounts potentially subject to
credit risk are much smaller. Exposure to credit risk arises from the
possibility of nonperformance by counterparties to the interest rate contracts.
The Company controls this credit risk (except futures contracts and interest
rate cap contracts written, for which credit risk is de minimus) through credit
approvals, limits, and monitoring procedures. No losses associated with
counterparty nonperformance on interest rate contracts have occurred.
Nevertheless, the related credit risk is considered and measured when and where
appropriate.

Notional values of interest rate and foreign exchange contracts are summarized
as follows (in thousands):

2000 1999
---------- ----------
Caps and spread maintenance
agreements ................. $2,073,827 875,634
Interest rate swaps .......... 2,022,011 711,228
Basis swaps .................. 2,537,860 --
Foreign exchange forwards .... 41,214 14,885

Interest rate caps and spread maintenance agreements obligate one of the parties
to the contract to make payments to the other if an interest rate index exceeds
a specified upper "capped" level or if contractual interest rate spreads fall
below specified levels. These derivative instruments, to which the Company is a
party at December 31, 2000, have remaining terms of less than one year to
twenty-six years.

Interest rate swaps generally involve the exchange of fixed and variable rate
interest payment obligations based on an underlying notional value, without the
exchange of the notional value. Entering into interest rate swap agreements
involves not only the risk of dealing with counterparties and their ability to
meet the terms of the contract, but also the interest rate risk associated with
unmatched positions. Interest rate swaps, to which the Company is a party at
December 31, 2000, have remaining terms ranging from under one year to six
years.

Forwards are contracts for the delayed delivery of financial instruments in
which the seller agrees to deliver on a specified future date, a specified
instrument, at a specified price or yield. As of December 31, 2000, the
Company's forward contracts have remaining terms ranging from under one month to
four months.

As a market maker in U.S. government, agency, and municipal securities, the
Company enters into agreements to purchase and sell such securities. As of
December 31, 2000 and 1999, the Company had outstanding commitments to purchase
securities of $299 million and $240 million, respectively, and outstanding
commitments to sell securities of $181 million and $243 million, respectively.
These agreements at December 31, 2000 have remaining terms of one month or less.

The contractual or notional amount of financial instruments indicates a level of
activity associated with a particular class of financial instrument and is not a
reflection of the actual level of risk. As of December 31, 2000 and 1999, the
regulatory risk-weighted values assigned to all off-balance sheet financial
instruments described herein totaled $1,452 million and $1,389 million,
respectively.

At December 31, 2000, the Company has drawn the total $65 million available in
lines of credit from two separate institutions, with interest rates ranging from
7.00 percent to 7.18 percent. There were no compensating balance arrangements on
either of these lines of credit.

At December 31, 2000, the Company was required to maintain a cash balance of $32
million with the Federal Reserve Banks to meet minimum balance requirements in
accordance with Federal Reserve Board regulations.

The Company is a defendant in various legal proceedings arising in the normal
course of business. The Company does not believe that the outcome of any such
proceedings will have a material adverse effect on its consolidated financial
position, operations, or liquidity.

The Company has commitments for leasing premises and equipment under the terms
of noncancelable capital and operating leases expiring from 2001 to 2067.
Premises leased under capital leases were recorded at $13.7 million, net of
$12.4 million accumulated amortization at December 31, 2000. Amortization
charges applicable to premises leased under capital leases are included in
depreciation expense. Future aggregate minimum rental payments under existing
noncancelable operating leases at December 31, 2000 are as follows (in
thousands):

2001 $ 27,332
2002 25,849
2003 24,065
2004 22,179
2005 19,497
Thereafter 103,395
--------
$222,317
========

Future aggregate minimum rental payments have been reduced by noncancelable
subleases as follows: 2001, $1.2 million; 2002, $1.1 million; 2003, $1.0
million; 2004, $.9 million; 2005, $.6 million; and thereafter $2.2 million.
Aggregate rental expense on operating leases amounted to $40.0 million, $40.3
million, and $33.3 million for the years ended December 31, 2000, 1999, and
1998, respectively.

13. Stock Options

The Company adopted a qualified stock option plan in 1981, under which stock
options may be granted to key employees, and a nonqualified plan under which
options may be granted to nonemployee directors. Under the qualified and
nonqualified plans, 3,244,000 and 400,000 shares, respectively, of common stock
were reserved. During 2000 the qualified plan was amended and options equal to
2% of the issued and outstanding shares of the Company's common stock as of the
first day of the year are automatically reserved for issuance under the plan.

No compensation expense was recorded for the qualified and nonqualified option
plans, as the exercise price was equal to the quoted market price of the stock
at the time of grant. Under the qualified plan, options are exercisable in
increments from one to three years after the date of grant and expire seven
years after the date of grant. Options granted previous to 2000 are generally
exercisable in increments from one to four years after the date of grant and
expire six years after the date of grant. Under the nonqualified plan, options
are exercisable in increments from six months to three and a half years after
the date of grant and expire ten years after the date of grant. At December 31,
2000, there were 787,406 and 223,000 additional shares available for grant under
the qualified and nonqualified plans, respectively.

In 1998, the Company adopted a broad-based employee stock option plan in
substitution of an employee profit-sharing plan. Substantially all participants
of the employee profit-sharing plan are eligible to participate in this plan.
Participation in this plan requires employment for a full year prior to the
option grant date with service of 20 hours a week or more. However, executive
officers of the Company are not eligible to participate in this plan. Stock
options are granted to eligible employees based on an internal job grade
structure. All options vest at the rate of one third each year with expiration
at four years after date of grant. At December 31, 2000, there were 1,500,000
options authorized with 788,432 options outstanding. The plan is noncompensatory
and results in no compensation expense recognized by the Company, as the
exercise price of the options is equal to the quoted market price of the stock
at the option grant date.

The per share weighted-average fair value of stock options granted during 2000,
1999, and 1998 was $13.09, $19.20, and $14.95, respectively, on the date of
grant as valued using the Black-Scholes option-pricing model. The following
weighted-average assumptions were used in 2000, 1999, and 1998: expected
dividend yield of 1.5%, expected volatility ranging from 26.6% to 39.4%,
risk-free interest rates ranging from 4.1% to 6.8%, and expected life ranging
from 2 to 7.5 years.

Had the Company determined compensation cost based on the fair value at the
grant date for its stock options under FASB Statement No. 123, the Company's net
income and net income per common share would have been reduced to the pro forma
amounts indicated below:

2000 1999 1998
----------- ----------- -----------
Net income
(in thousands):
As reported .............. $ 161,709 194,064 143,353
Pro forma ................ 145,773 183,689 133,863

Net income per common share:
As reported:
Basic ............... $ 1.87 2.29 1.77
Diluted ............. 1.86 2.26 1.75
Pro forma:
Basic ............... 1.69 2.17 1.65
Diluted ............. 1.67 2.14 1.63

Pro forma amounts reflect only stock-based compensation grants made after 1994.
The full impact of calculating compensation cost for stock options under
Statement No. 123 is not reflected in the pro forma amounts presented previously
because compensation cost is reflected over the options' vesting period, and
compensation cost of options granted prior to January 1, 1995 is not considered.

The following table is a summary of the Company's stock option activity and
related information for the three years ended December 31, 2000:

Weighted-
Number average
of exercise
shares price
--------- ----------
Balance at
December 31, 1997 .. 1,877,123 $ 16.57
Acquired ...... 430,998 11.35
Granted ....... 1,343,612 45.62
Exercised ..... (659,168) 11.38
Forfeited ..... (25,964) 32.82
- --------------------------------------

Balance at
December 31, 1998 .. 2,966,601 29.98
Acquired ...... 64,652 27.26
Granted ....... 1,172,542 65.29
Exercised ..... (625,537) 20.06
Forfeited ..... (232,567) 42.32
- --------------------------------------

Balance at
December 31, 1999 .. 3,345,691 43.30
Acquired ...... 132,097 11.48
Granted ....... 1,993,961 43.38
Exercised ..... (409,935) 18.25
Forfeited ..... (328,223) 51.03
- --------------------------------------

Balance at
December 31, 2000 .. 4,733,591 43.98
======================================

Outstanding options
exercisable as of:
December 31, 2000 .. 1,701,254 36.55
December 31, 1999 .. 1,222,187 26.62
December 31, 1998 .. 1,116,087 14.90

Selected information on stock options as of December 31, 2000 follows:

Outstanding options Exercisable options
--------------------------------- ---------------------
Weighted-
Weighted- average Weighted-
Exercise Number average remaining Number average
price of exercise contractual of exercise
range shares price life (years) shares price
- --------- --------- --------- --------- --------- ---------
$2.37 to
$ 6.91 36,484 $ 4.10 6.40 36,484 $ 4.10
$6.92 to
$13.83 206,363 11.15 3.30 201,290 11.10
$13.84 to
$20.74 263,860 17.31 3.30 241,997 17.36
$20.75 to
$27.65 155,967 24.39 4.20 121,716 24.77
$27.66 to
$34.56 343,707 30.86 2.70 250,001 30.81
$34.57 to
$41.48 31,695 40.25 6.20 23,195 40.34
$41.49 to
$48.39 1,962,364 42.62 5.60 235,911 43.18
$48.40 to
$55.30 899,094 49.90 3.50 354,339 49.63
$55.31 to
$62.21 23,484 55.79 4.60 1,046 55.98
$62.22 to
$69.13 810,573 68.69 4.20 235,275 68.45
--------- ---------
4,733,591 $ 43.98 4.50 1,701,254 $ 36.55
========= =========

14. Net Income Per Common Share

Basic and diluted net income per common share, based on the weighted-average
outstanding shares, are summarized as follows (in thousands, except per share
amounts):

2000 1999 1998
-------- -------- --------
Basic:
Net income ................... $161,709 194,064 143,353
Less preferred
dividends ............... -- 34 46
-------- -------- --------
Net income applicable
to common stock ......... 161,709 194,030 143,307
Average common
shares outstanding ...... 86,320 84,613 80,788
Net income per
common share - basic .... $ 1.87 2.29 1.77

Diluted:
Net income applicable
to common stock ......... $161,709 194,030 143,307
Average common
shares outstanding ...... 86,320 84,613 80,788
Stock option adjustment ...... 800 1,082 1,130
-------- -------- --------
Average common shares
outstanding - diluted ... 87,120 85,695 81,918
Net income per
common share - diluted .. $ 1.86 2.26 1.75

15. Shareholder Rights Protection Plan

The Company has in place a Shareholder Rights Protection Plan. The Shareholder
Rights Protection Plan contains provisions intended to protect shareholders in
the event of unsolicited offers or attempts to acquire the Company, including
offers that do not treat all shareholders equally, acquisitions in the open
market of shares constituting control without offering fair value to all
shareholders, and other coercive or unfair takeover tactics that could impair
the Board of Directors' ability to represent shareholders' interests fully. The
Shareholder Rights Protection Plan provides that attached to each share of
common stock is one right (a "Right") to purchase one one-hundredth of a share
of participating preferred stock for an exercise price of $90, subject to
adjustment.

The Rights have certain anti-takeover effects. The Rights may cause substantial
dilution to a person who attempts to acquire the Company without the approval of
the Board of Directors. The Rights, however, should not affect offers for all
outstanding shares of common stock at a fair price and, otherwise, in the best
interests of the Company and its shareholders as determined by the Board of
Directors. The Board of Directors may, at its option, redeem all, but not fewer
than all, of the then outstanding Rights at any time until the 10th business day
following a public announcement that a person or a group has acquired beneficial
ownership of 10 percent or more of the Company's outstanding common stock or
total voting power.

16. Income Taxes

Income taxes are summarized as follows (in thousands):

2000 1999 1998
-------- -------- --------
Federal:
Current .... $ 59,038 46,485 64,855
Deferred ... 6,342 43,648 (4,978)
State ........... 14,281 19,365 9,755
-------- -------- --------
$ 79,661 109,498 69,632
======== ======== ========

A reconciliation between income tax expense computed using the statutory federal
income tax rate of 35 percent and actual income tax expense is as follows (in
thousands):

2000 1999 1998
-------- -------- --------
Income tax expense at
statutory federal rate .. $ 85,016 107,979 74,694
State income taxes, net .... 9,283 12,587 6,341
Nondeductible expenses ..... 10,944 11,232 8,643
Nontaxable interest ........ (17,217) (13,893) (9,125)
Tax credits and other
taxes ................... (1,874) (1,819) (1,877)
Corporate reorganization ... (6,416) (6,416) (6,117)
Decrease in valuation
allowance ............... -- -- (1,992)
Other items ................ (75) (172) (935)
-------- -------- --------
Income tax expense .... $ 79,661 109,498 69,632
======== ======== ========

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities as of December 31, 2000
and 1999, are presented below (in thousands):

2000 1999
--------- ---------
Gross deferred tax assets:
Book loan loss deduction in
excess of tax ......................... $ 75,388 78,979
Postretirement benefits .................. 1,365 722
Deferred compensation .................... 9,862 8,996
Deferred loan fees ....................... 1,829 2,498
Deferred agreements ...................... 2,261 2,650
Capital leases ........................... 516 1,648
Other real estate owned .................. 260 4,584
Accrued severance costs .................. 252 1,685
Capital loss carryforward ................ 27,470 --
Other .................................... 19,259 23,452
--------- ---------
Total deferred tax assets ........... 138,462 125,214
--------- ---------
Gross deferred tax liabilities:
Core deposits and purchase
accounting ...................... (23,358) (27,609)
Premises and equipment, due
to differences in depreciation .. (5,690) (4,566)
FHLB stock dividends ..................... (25,276) (21,320)
Leasing operations ....................... (46,511) (33,416)
Security investments ..................... (20,139) (20,192)
Prepaid pension reserves ................. (1,730) (2,559)
Mortgage servicing ....................... (112) (202)
Other .................................... (6,401) (1,377)
--------- ---------
Total deferred tax liabilities ...... (129,217) (111,241)
--------- ---------
FASB Statement No. 115 market
equity adjustment .......................... 2,174 2,628
--------- ---------
Net deferred tax assets ............. $ 11,419 16,601
========= =========

The Company has determined that it is not required to establish a valuation
reserve for the net deferred tax assets since it is "more likely than not" that
such net assets will be principally realized through future taxable income and
tax planning strategies. The Company's conclusion that it is "more likely than
not" that the net deferred tax assets will be realized is based on history of
growth in earnings and the prospects for continued growth and profitability.

The exercise of stock options under the Company's nonqualified stock option
plan, and nonqualified exercises of options under the qualified plan, resulted
in tax benefits reducing the Company's current income tax payable and increasing
common stock by $3.4 million, $8.6 million, and $3.4 million in 2000, 1999, and
1998, respectively.

17. Regulatory Matters

The Company is subject to various regulatory capital requirements administered
by the federal banking agencies. Failure to meet minimum capital requirements
can initiate certain mandatory--and possibly additional

discretionary--actions by regulators that, if undertaken, could have a direct
material effect on the Company's consolidated financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Company must meet specific capital guidelines that involve
quantitative measures of the Company's assets, liabilities, and certain
off-balance sheet items as calculated under regulatory accounting practices. The
Company's capital amounts and classification are also subject to qualitative
judgments by the regulators about components, risk weightings, and other
factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Company to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined). Management believes, as of December 31, 2000, that the
Company meets all capital adequacy requirements to which it is subject.

As of December 31, 2000, the Company's capital ratios significantly exceed the
minimum capital levels, and the Company is considered well-capitalized under the
regulatory framework for prompt corrective action. To be categorized as
well-capitalized, the Company must maintain minimum total risk-based, Tier I
risk-based, and Tier I leverage ratios as set forth in the table. There are no
conditions or events that management believes have changed the Company's
category.

Dividends declared by the Company's national banking subsidiaries in any
calendar year may not, without the approval of the appropriate federal
regulator, exceed their net earnings for that year combined with their net
earnings less dividends paid for the preceding two years. At December 31, 2000,
the Company's subsidiaries had approximately $117.6 million available for the
payment of dividends under the foregoing restrictions.

The actual capital amounts and ratios of the Company and significant banking
subsidiaries are as follows (in thousands):

Minimum for capital To be
Actual adequacy purposes well capitalized
------------------ ------------------ ------------------
Amount Ratio Amount Ratio Amount Ratio
---------- ----- ---------- ----- ---------- -----

As of December 31, 2000:
Total capital (to risk-weighted assets)
The Company .......................... $1,737,176 10.83% $1,282,874 8.00% $1,603,593 10.00%
Zions First National Bank ............ 680,382 12.30 442,604 8.00 553,255 10.00
California Bank & Trust .............. 584,124 10.71 436,446 8.00 545,558 10.00
Tier I capital (to risk-weighted assets)
The Company .......................... 1,368,041 8.53 641,437 4.00 962,156 6.00
Zions First National Bank ............ 448,729 8.11 221,302 4.00 331,953 6.00
California Bank & Trust .............. 405,891 7.44 218,223 4.00 327,335 6.00
Tier I capital (to average assets)
The Company .......................... 1,368,041 6.38 643,265 3.00 1,072,108 5.00
Zions First National Bank ............ 448,729 5.36 251,323 3.00 418,871 5.00
California Bank & Trust .............. 405,891 6.20 196,278 3.00 327,130 5.00

As of December 31, 1999:
Total capital (to risk-weighted assets)
The Company .......................... $1,646,581 11.29% $1,167,056 8.00% $1,458,820 10.00%
Zions First National Bank ............ 692,026 14.73 375,744 8.00 469,680 10.00
California Bank & Trust .............. 527,964 10.32 409,093 8.00 511,367 10.00
Tier I capital (to risk-weighted assets)
The Company .......................... 1,260,090 8.64 583,528 4.00 875,292 6.00
Zions First National Bank ............ 432,845 9.22 187,872 4.00 281,808 6.00
California Bank & Trust .............. 353,777 6.92 204,547 4.00 306,820 6.00
Tier I capital (to average assets)
The Company .......................... 1,260,090 6.16 613,398 3.00 1,022,331 5.00
Zions First National Bank ............ 432,845 5.61 231,406 3.00 385,676 5.00
California Bank & Trust .............. 353,777 5.68 186,973 3.00 311,622 5.00

18. Retirement Plans

The Company has a noncontributory defined benefit pension plan for eligible
employees. Plan benefits are based on years of service and employees'
compensation levels. Benefits vest under the plan upon completion of five years
of service. Plan assets consist principally of corporate equity and debt
securities and cash investments. Plan benefits are defined as a lump-sum cash
value or an annuity at age 65. The following table presents the change in the
plan's benefit obligation for the years ended December 31, 2000 and 1999 (in
thousands):

2000 1999
--------- ---------
Benefit obligation at
beginning of year ............... $ 106,390 108,973
Service cost ....................... 7,026 8,294
Interest cost ...................... 8,137 7,397
Actuarial (gain) loss .............. 5,274 (7,379)
Benefits paid ...................... (9,313) (10,895)
--------- ---------
Benefit obligation at end of year .. $ 117,514 106,390
========= =========

Plan assets include 123,142 shares of Company common stock as of December 31,
2000 and 88,558 shares as of December 31, 1999. The following table presents the
change in plan assets for the years ended December 31, 2000 and 1999 (in
thousands):

2000 1999
--------- ---------
Fair value of plan assets at
beginning of year .......... $ 138,989 107,245
Actual return on plan assets .. (9,918) 25,595
Employer contributions ........ -- 17,044
Benefits paid ................. (9,313) (10,895)
--------- ---------
Fair value of plan assets at
end of year ................ $ 119,758 138,989
========= =========

The following table presents the plan's funded status reconciled with amounts
recognized in the Company's consolidated balance sheets at December 31, 2000 and
1999 (in thousands):

2000 1999
-------- -------
Funded status ................ $ 2,244 32,599
Unrecognized net
actuarial (gain) loss ..... 6,581 (21,302)
Unrecognized prior
service cost .............. (2,243) (2,646)
-------- -------
Net prepaid benefit cost .. $ 6,582 8,651
======== =======

Net periodic benefit cost recognized for the years ended December 31, 2000,
1999, and 1998 includes the following components (in thousands):

2000 1999 1998
-------- -------- --------
Service cost ........................ $ 7,026 8,294 5,587
Interest cost ....................... 8,137 7,397 5,192
Expected return on
plan assets ...................... (12,059) (9,300) (6,851)
Amortization of prior
service cost ..................... (403) (385) (385)
Amortization of
transitional asset ............... -- (431) (625)
Recognized actuarial (gain) loss .... (632) -- 39
-------- -------- --------
Net periodic benefit
cost recognized ............... $ 2,069 5,575 2,957
======== ======== ========

The weighted average discount rate used in determining the pension benefit
obligation was 7.50 percent in 2000 and 8.00 percent in 1999. The rate of
compensation increase was 5.00 percent and the expected long-term rate of return
was 9.00 percent for both 2000 and 1999. Any net transition asset or obligation
and any unrecognized prior service cost are being amortized on a straight-line
basis. Unrecognized gains and losses are amortized using the minimum recognition
method.

The Company also sponsors three unfunded nonqualified supplemental executive
retirement plans, which restore pension benefits limited by federal tax law. At
December 31, 2000 and 1999, the Company's liability, included in accrued
expenses, totaled $7.1 million and $5.7 million, respectively.

In addition to the Company's defined benefit pension plan, the Company sponsors
a defined benefit health care plan that provides postretirement medical benefits
to full-time employees hired before January 1, 1993, who meet minimum age and
service requirements. The plan is contributory, with retiree contributions
adjusted annually, and contains other cost-sharing features such as deductibles
and coinsurance. Plan coverage is provided by self-funding or health maintenance
organizations (HMOs) options. Reductions in the Company's obligations to provide
benefits resulting from cost sharing changes have been applied to reduce the
plan's unrecognized transition obligation. During 1999 and 2000, the Company
adopted several plan revisions that changed the liability for retiree medical
coverage. In 1999 the Company eliminated retiree medical coverage for future
California Bank & Trust employees and capped the Company's contributions for
current California Bank & Trust employees to make these benefits consistent with

benefits provided to other employees of the Company. In 2000 the
Company increased its contribution toward retiree medical coverage and
permanently froze the Company contributions. In the future, retirees will pay
the difference between the full premium rates and the capped Company
contribution.

The following table presents the change in the plan's benefit obligation for the
years ended December 31, 2000 and 1999 (in thousands):

2000 1999
------- -------
Benefit obligation at beginning of year .. $ 5,683 12,306
Service cost ............................. 265 91
Interest cost ............................ 767 852
Plan amendments .......................... 2,376 (1,950)
Actuarial (gain) loss .................... 39 (1,874)
Benefits paid ............................ (1,156) (148)
Curtailments ............................. 940 (3,594)
------- -------
Benefit obligation at end of year ........ $ 8,914 5,683
======= =======

The following table presents the plan's funded status reconciled with amounts
recognized in the Company's consolidated balance sheets at December 31, 2000 and
1999 (in thousands):

2000 1999
-------- --------
Benefit obligation at end of year .. $ 8,914 5,683
Unamortized prior service cost ..... (341) 1,950
Unrecognized net actuarial gain .... 2,896 3,377
-------- --------
Accrued benefit cost ............... $ 11,469 11,010
======== ========

Net periodic benefit cost recognized for the years ended December 31, 2000,
1999, and 1998 includes the following components (in thousands):

2000 1999 1998
-------- -------- --------
Service cost ........................ $ 265 91 114
Interest cost ....................... 767 852 230
Recognized prior service cost ....... 85 -- --
Recognized net gain ................. (441) (317) (515)
-------- -------- --------
Net periodic benefit cost ...... 676 626 (171)
Recognized curtailment (gain) loss .. 940 (3,594) --
Recognized liability due to
acquisitions ................... -- -- 8,833
-------- -------- --------
Net periodic benefit cost
(credit) after recognition
of extraordinary items ......... $ 1,616 (2,968) 8,662
======== ======== ========

The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.5 percent at December 31, 2000 and 8.0
percent at December 31, 1999.

Because the Company's contribution rate is capped, there is no effect from
assumed increases or decreases in healthcare cost trend rates.

The Company has an Employee Stock Savings Plan and an Employee Investment
Savings Plan (PAYSHELTER). Under PAYSHELTER, employees select from a
nontax-deferred or tax-deferred plan and several investment alternatives.
Employees can contribute from 1 to 15 percent of compensation, which is matched
up to 50 percent by the Company for contributions up to 5 percent and 25 percent
for contributions greater than 5 percent up to 10 percent. The Company's
contributions to the plans amounted to $5.5 million, $5.3 million, and $3.7
million for the years ended December 31, 2000, 1999, and 1998, respectively.

19. Fair Value of Financial Instruments

The carrying value and estimated fair value of principal financial instruments
are summarized as follows (in thousands):

December 31, 2000 December 31, 1999
---------------------------- --------------------------
Estimated Estimated
Carrying value fair value Carrying value fair value
------------ ---------- ---------- ----------

Financial assets:
Cash and due from banks ..................... $ 1,047,252 1,047,252 898,300 898,300
Money market investments .................... 528,067 528,067 525,169 525,169
Investment securities ....................... 4,188,309 4,215,616 4,437,219 4,397,283
Loans, net .................................. 14,182,498 14,682,170 12,586,531 12,627,743
------------ ---------- ---------- ----------
Total financial assets ................. $ 19,946,126 20,473,105 18,447,219 18,448,495
============ ========== ========== ==========
Financial liabilities:
Demand, savings, and money market deposits .. $ 11,855,794 11,855,794 10,936,883 10,936,883
Time deposits ............................... 3,077,795 3,092,466 2,915,276 2,898,930
Foreign deposits ............................ 136,394 136,131 209,780 209,726
Securities sold, not yet purchased .......... 291,102 291,102 237,020 237,020
Federal funds purchased and
security repurchase agreements ........... 2,396,845 2,396,845 2,192,650 2,192,650
FHLB advances and other borrowings .......... 1,632,975 1,634,383 1,389,327 1,379,127
Long-term debt .............................. 419,550 443,553 453,471 446,056
------------ ---------- ---------- ----------
Total financial liabilities ............ $ 19,810,455 19,850,274 18,334,407 18,300,392
============ ========== ========== ==========
Off-balance sheet instruments:
Caps and spread maintenance agreements ...... $ -- -- (7,671) (7,671)
Swaps ....................................... -- 33,936 -- (9,641)
Foreign exchange forwards ................... (31) (31) -- --
------------ ---------- ---------- ----------
Total off-balance sheet instruments .... $ (31) 33,905 (7,671) (17,312)
============ ========== ========== ==========

FINANCIAL ASSETS The estimated fair value approximates the carrying value of
cash and due from banks and money market investments. For investment securities,
the fair value is based on quoted market prices where available. If quoted
market prices are not available, fair values are based on quoted market prices
of comparable instruments or a discounted cash flow model based on established
market rates. The fair value of fixed-rate loans is estimated by discounting
future cash flows using the London Interbank Offered Rate (LIBOR) yield curve
adjusted by a factor which reflects the credit and interest rate risk inherent
in the loan. Variable-rate loans reprice with changes in market rates. As such,
their carrying amounts are deemed to approximate fair value.

FINANCIAL LIABILITIES The estimated fair value of demand and savings deposits,
securities sold not yet purchased, and federal funds purchased and security
repurchase agreements, approximates the carrying value. The fair value of time
and foreign deposits is estimated by discounting future cash flows using the
LIBOR yield curve. The fair value of fixed-rate FHLB advances is estimated by
discounting future cash flows using the LIBOR yield curve. Variable rate FHLB
advances reprice with changes in market rates. As such, their carrying amounts
approximate their fair value. Other borrowings are not significant. The
estimated fair value of the subordinated notes is based on a quoted market
price. The remaining long-term debt is not significant.

OFF-BALANCE SHEET FINANCIAL INSTRUMENTS The fair value of the caps and
swaps reflects the estimated amounts that the Company would receive or pay to
terminate the contracts at the reporting date based upon pricing or valuation
models applied to current market information and taking into account the current
unrealized gains or losses of open contracts. The carrying amounts include
unamortized fees paid or received and any deferred gains or losses.

The fair value of commitments to extend credit and letters of credit, based
on fees currently charged for similar commitments, is not significant.

LIMITATIONS These fair value disclosures represent management's best estimates,
based on relevant market information and information about the financial
instruments. Fair value estimates are based on judgments regarding future
expected loss experience, current economic conditions, risk characteristics of
the various instruments, and other factors. These estimates are subjective in
nature and involve uncertainties and matters of significant judgment, and
therefore cannot be determined with precision. Changes in the above
methodologies and assumptions could significantly affect the estimates.

Further, the calculations do not represent the underlying value of the Company.
Other significant assets and liabilities, which are not considered financial
assets or liabilities and for which no fair values have been estimated, include
premises and equipment, goodwill and other intangibles, deferred taxes, and
other liabilities.

20. Operating Segment Information

Operating segments represent components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance.

The Company evaluates segment performance internally based on geography, and
thus the operating segments are so defined. All segments, except for the segment
defined as "Other," are based on commercial banking operations. The operating
segment defined as "Other" includes the parent company, smaller nonbank
operating units, and eliminations of transactions between segments.

The accounting policies of the individual operating segments are the same as
those of the Company described in Note 1. Transactions between operating
segments are primarily conducted at fair value, resulting in profits that are
eliminated for reporting consolidated results of operations. Expenses for
centrally provided services are allocated based on the estimated usage of those
services.

The following is a summary of selected operating segment information for the
years ended December 31, 2000, 1999, and 1998 (in thousands):

Zions First Nevada
National California State Bank National
Bank and Bank & and Bank of
Subsidiaries Trust Subsidiaries Arizona
----------- ----------- ----------- -----------

2000:
Net interest income ............ $ 227,057 297,153 101,685 92,300
Provision for loan losses ...... 8,250 -- 10,060 3,570
----------- ----------- ----------- -----------
Net interest income after
provision for loan losses ... 218,807 297,153 91,625 88,730
Noninterest income ............. 151,966 43,585 23,488 14,082
Merger expense and
amortization of goodwill
and core deposit
intangibles ................. 4,470 23,677 6,798 2,315
Other noninterest expense ...... 219,114 183,581 74,226 50,396
----------- ----------- ----------- -----------
Income before income taxes
and minority interest ....... 147,189 133,480 34,089 50,101
Income taxes ................... 44,917 59,401 11,337 19,885
Minority interest .............. (2,142) -- -- --
----------- ----------- ----------- -----------
Net income ..................... $ 104,414 74,079 22,752 30,216
----------- ----------- ----------- -----------
Assets ......................... $ 8,095,001 6,952,940 2,373,585 1,943,675
Net loans and leases ........... 4,885,246 4,855,632 1,383,142 1,488,773
Deposits ....................... 4,173,002 5,588,601 1,992,947 1,551,182
Shareholders' equity ........... 459,951 714,322 176,168 160,925
=========== =========== =========== ===========
1999:
Net interest income ............ $ 220,018 263,682 99,885 76,928
Provision for loan losses ...... 9,000 -- 3,660 2,400
----------- ----------- ----------- -----------
Net interest income after
provision for loan losses ... 211,018 263,682 96,225 74,528
Noninterest income ............. 169,902 35,806 23,933 13,022
Merger expense and
amortization of goodwill
and core deposit
intangibles ................ 2,135 25,909 14,070 1,831
Other noninterest expense ...... 208,159 182,034 78,596 42,909
----------- ----------- ----------- -----------
Income before income
taxes and minority interest 170,626 91,545 27,492 42,810
Income taxes ................... 53,327 42,101 9,001 16,617
Minority interest .............. 3,065 -- -- --
----------- ----------- ----------- -----------
Net income ..................... $ 114,234 49,444 18,491 26,193
----------- ----------- ----------- -----------
Assets ......................... $ 7,156,888 6,566,985 2,277,356 1,600,135
Net loans and leases ........... 4,085,175 4,559,136 1,340,534 1,212,531
Deposits ....................... 3,809,258 5,425,928 1,882,349 1,206,366
Shareholders' equity ........... 444,401 679,288 163,422 131,322
=========== =========== =========== ===========
1998:
Net interest income ............ $ 222,044 112,726 90,518 70,687
Provision for loan losses ...... 23,000 (18,717) 3,685 1,800
----------- ----------- ----------- -----------
Net interest income after
provision for loan losses .. 199,044 131,443 86,833 68,887
Noninterest income ............. 142,654 14,284 25,298 9,312
Merger expense and
amortization of goodwill
and core deposit
intangibles ............... 2,717 37,363 1,490 1,867
Other noninterest expense ...... 216,405 78,596 71,856 40,131
----------- ----------- ----------- -----------
Income before income
taxes and minority interest 122,576 29,768 38,785 36,201
Income taxes ................... 35,477 13,360 11,835 14,013
Minority interest .............. -- -- -- --
----------- ----------- ----------- -----------
Net income ..................... $ 87,099 16,408 26,950 22,188
----------- ----------- ----------- -----------
Assets ......................... $ 6,047,071 6,183,044 2,150,095 1,451,866
Net loans and leases ........... 3,509,319 4,180,999 1,133,680 1,012,038
Deposits ....................... 3,933,823 5,348,694 1,829,117 1,225,796
Shareholders' equity ........... 383,350 606,195 152,530 116,262
=========== =========== =========== ===========

The
Commerce
Vectra Bank Bank of Consolidated
Colorado Washington Other Company
----------- ----------- ----------- -----------
2000:
Net interest income ............ 89,094 19,991 (23,902) 803,378
Provision for loan losses ...... 9,112 819 -- 31,811
----------- ----------- ----------- -----------
Net interest income after
provision for loan losses ... 79,982 19,172 (23,902) 771,567
Noninterest income ............. 20,223 1,472 (62,652) 192,164
Merger expense and
amortization of goodwill
and core deposit
intangibles ................. 13,702 -- 31,753 82,715
Other noninterest expense ...... 72,593 8,817 29,385 638,112
----------- ----------- ----------- -----------
Income before income taxes
and minority interest ....... 13,910 11,827 (147,692) 242,904
Income taxes ................... 8,103 3,965 (67,947) 79,661
Minority interest .............. -- -- 3,676 1,534
----------- ----------- ----------- -----------
Net income ..................... 5,807 7,862 (83,421) 161,709
----------- ----------- ----------- -----------
Assets ......................... 2,155,929 552,661 (134,348) 21,939,443
Net loans and leases ........... 1,475,166 242,042 48,032 14,378,033
Deposits ....................... 1,385,271 404,864 (25,884) 15,069,983
Shareholders' equity ........... 390,252 33,226 (156,000) 1,778,844
=========== =========== =========== ===========
1999:
Net interest income ............ 83,103 15,792 (17,919) 741,489
Provision for loan losses ...... 2,586 610 (300) 17,956
----------- ----------- ----------- -----------
Net interest income after
provision for loan losses ... 80,517 15,182 (17,619) 723,533
Noninterest income ............. 17,206 735 5,941 266,545
Merger expense and
amortization of goodwill
and core deposit
intangibles ................ 15,228 -- 4,526 63,699
Other noninterest expense ...... 74,877 7,452 23,841 617,868
----------- ----------- ----------- -----------
Income before income
taxes and minority interest 7,618 8,465 (40,045) 308,511
Income taxes ................... 5,616 2,788 (19,952) 109,498
Minority interest .............. -- -- 1,884 4,949
----------- ----------- ----------- -----------
Net income ..................... 2,002 5,677 (21,977) 194,064
----------- ----------- ----------- -----------
Assets ......................... 2,161,216 408,409 109,911 20,280,900
Net loans and leases ........... 1,372,710 200,320 20,239 12,790,645
Deposits ....................... 1,490,468 289,182 (41,612) 14,061,939
Shareholders' equity ........... 384,398 25,329 (168,322) 1,659,838
=========== =========== =========== ===========
1998:
Net interest income ............ 73,447 13,939 (9,419) 573,942
Provision for loan losses ...... 4,588 78 (400) 14,034
----------- ----------- ----------- -----------
Net interest income after
provision for loan losses .. 68,859 13,861 (9,019) 559,908
Noninterest income ............. 14,844 1,702 2,103 210,197
Merger expense and
amortization of goodwill
and core deposit
intangibles ............... 17,076 7,702 1,554 69,769
Other noninterest expense ...... 57,310 7,453 15,180 486,931
----------- ----------- ----------- -----------
Income before income
taxes and minority interest 9,317 408 (23,650) 213,405
Income taxes ................... 5,745 346 (11,144) 69,632
Minority interest .............. -- -- 420 420
----------- ----------- ----------- -----------
Net income ..................... 3,572 62 (12,926) 143,353
----------- ----------- ----------- -----------
Assets ......................... 2,151,029 337,351 (270,833) 18,049,623
Net loans and leases ........... 1,216,359 154,892 12,199 11,219,486
Deposits ....................... 1,688,719 221,403 (26,642) 14,220,910
Shareholders' equity ........... 388,506 23,159 (217,371) 1,452,631
=========== =========== =========== ===========

82 [Continued]

21. Asset Securitizations

During 2000 the Company sold $164 million of auto loans, $169 million of credit
card receivables and $248 million of home equity loans in revolving
securitization transactions for cash. New loans or receivable balances are sold
monthly into the revolving securitization facilities. In these revolving
securitizations the Company retains servicing responsibilities and receives
servicing fees. Annualized servicing fees approximate 1% of the outstanding loan
balances for the auto loans securitization, 2% for the credit card receivables
securitization and 0.5% for the home equity loans securitization. The Company
also has rights to future cash flows arising after the investors in the
securitizations have received the return for which they contracted and
administrative and other expenses have been paid. The Company retains
subordinated tranche interests or cash reserve accounts that serve as credit
enhancements on the securitizations. The Company's retained interests are
subordinate to the investors' interests. The investors and the securitization
vehicles have no recourse to the Company's other assets for failure of debtors
to pay when due. The Company's retained interests are subject to credit,
prepayment, and interest rate risks on the transferred loans and receivables.

The Company recognized pre-tax gains from the transfer of the loans and
receivables of $3.1 million for the auto loans, $6.1 million for the credit card
receivables and $13.2 million for the home equity loans during 2000, which is
included in loan sales and servicing income. Also during 2000, the Company
completed the sale of $494 million of Small Business Administration (SBA) 504
and other low loan-to-value commercial mortgages in a securitization
transaction. Except for the revolving features, the general characteristics of
the securitizations and rights of the Company described previously also pertain
to this transaction. Annualized servicing fees received by the Company
approximate 1% of the outstanding loan balance for this securitization. The
Company recognized a pre-tax gain from this securitization of $2.8 million,
which is included in loan sales and servicing income.

Residual cash flows paid to the Company's subsidiary, Zions First National Bank
(ZFNB), from retained interests on revolving securitizations were $16.6 million,
$5.8 million, and $7.7 million for the automobile, credit card, and home equity
programs, respectively, and $.4 million on the securitization of SBA loans
during 2000. Total servicing fees related to the securitization programs were
$5.4 million in 2000.

Key economic assumptions used for measuring the retained interests at the date
of securitization for sales during 2000 were as follows:

Automobile Credit Card Home Equity SBA 504
Loans Receivables Loans Loans
----------- ----------- ----------- ------------
Prepayment
method ABS ABS ABS CPR

Annualized
prepayment
speed 16.20 5.00 4.00 4, 8, 12
Ramp up
Weighted average
life (in months) 54 4 64 83

Expected annual
net loss rate 1.00% 4.50% .25% 0.50%

Residual cash flows
discounted at 12.00% 12.00% 12.00% 12.00%

The ABS prepayment model developed by Credit Suisse First Boston is used for the
automobile, credit card, and home equity loan securitizations. The constant
prepayment rate (CPR) method was used for the SBA 504 securitization.

At December 31, 2000, key economic assumptions and the sensitivity of the
current fair value of residual cash flows to immediate 10% and 20% adverse
changes in those assumptions are as follows for significant Company
securitizations (in millions of dollars and annualized percentage rates):

Credit Home
Automobile Card Equity SBA 504
Loans Receivables Loans Loans
----------- ----------- ----------- -----------
Carrying amount/
fair value of retained
interests $5.7 0.9 14.7 35.8
Weighted-average
life (in months) 54 4 64 47-83

Prepayment speed
assumption 16.20 5.00 4.00 4.00-15.00
Decrease in fair value
due to adverse change

-10% $0.1 0.0 0.1 1.2
-20% $0.2 0.0 0.1 2.3

Expected
credit losses 1.00% 4.50% 0.25% 0.50%
Decrease in fair value
due to adverse change

-10% $0.4 0.1 0.2 1.5
-20% $0.8 0.1 0.3 2.9

Residual cash flows
discount rate 12.00% 12.00% 12.00% 12.00%
Decrease in fair value
due to adverse change

-10% $0.1 0.0 0.2 1.7
-20% $0.1 0.0 0.3 2.9

These sensitivities are hypothetical and should be used with caution. As the
figures indicate, changes in fair value based on variations in assumptions
cannot be extrapolated, as the relationship of the change in assumption to the
change of fair value may not be linear. Also, the effect of a variation in one
assumption is likely to further cause changes in other assumptions, which might
magnify or counteract the sensitivities.

As of December 31, 2000, the weighted-average expected static pool credit losses
for SBA loans securitized in 2000 were 3.33%. Static pool losses are calculated
by summing the actual and projected future credit losses and dividing them by
the original balance of each pool of assets.

The table below presents quantitative information about delinquencies and net
credit losses. The Company only securitizes loans originated or purchased by
ZFNB. Therefore, only loans and related delinquencies and net credit losses of
commonly managed ZFNB loans are included (in millions):

Loans Past
Due
30+ Days(1)
Principal Principal
Balance Balance
December 31, December 31, Net Credit
Loan Type 2000 2000 Losses(2)
- --------- ------------ ------------ ------------
Automobile loans .......... $ 506.8 10.0 4.1
Credit card
receivables ............. 140.7 2.3 3.1
Home equity loans ......... 365.1 1.9 0.1
SBA 504 loans ............. 1,185.2 29.6 1.4
------------ ------------ ------------
Total loans managed
or securitized .......... 2,197.8 43.8 8.7
Less loans securitized(3).. 1,406.1
------------
Loans held in portfolio ... $ 791.7
============

(1) Loans 30 days or more past due based on end of period total loans.
(2) Net credit losses are charge-offs net of recoveries and are based on total
loans outstanding, both on-balance sheet and securitized.
(3) Represents the principal amount of the loans. Interest-only strips and
other retained interests held for securitized assets are excluded from this
table because they are recognized separately.

22. Quarterly Financial Information (Unaudited)

Financial information by quarter for the years ended December 31, 2000 and 1999
is as follows (in thousands, except per share amounts):

Income
(loss)before
income Diluted net
Gross Net Non- Non- Provision taxes and income(loss)
interest interest interest interest for loan minority Net per common
income income income expense losses interest income(loss) share
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

2000:
First quarter $ 379,555 190,992 (36,311) 200,312 5,248 (50,879) (28,492) (0.33)
Second quarter 396,623 194,598 70,599 167,312 6,214 91,671 59,583 0.69
Third quarter 424,482 208,029 75,349 173,926 8,119 101,333 64,644 0.74
Fourth quarter 425,523 209,759 82,527 179,277 12,230 100,779 65,974 0.75
---------- ---------- ---------- ---------- ---------- ---------- ----------
$1,626,183 803,378 192,164 720,827 31,811 242,904 161,709 1.86
========== ========== ========== ========== ========== ========== ==========
1999:
First quarter $ 318,170 176,855 65,480 162,605 4,741 74,989 46,904 0.55
Second quarter 333,524 185,303 63,007 165,886 4,143 78,281 50,832 0.59
Third quarter 344,284 187,817 63,591 163,038 4,517 83,853 53,779 0.63
Fourth quarter 363,360 191,514 74,467 190,038 4,555 71,388 42,549 0.49
---------- ---------- ---------- ---------- ---------- ---------- ----------
$1,359,338 741,489 266,545 681,567 17,956 308,511 194,064 2.26
========== ========== ========== ========== ========== ========== ==========

In the first quarter of 2000, noninterest income (loss) includes the $96.9
million impairment loss on First Security Corporation common stock as discussed
in Note 3, and noninterest expense includes $41.5 million of pre-tax merger
expenses mainly related to the terminated First Security Corporation merger.

23. Parent Company Financial Information

Condensed financial information of Zions Bancorporation (parent only) follows:

Condensed Balance Sheets
December 31, 2000 and 1999
(In thousands) 2000 1999
----------- -----------
ASSETS
Cash and due from banks ................ $ 1,959 3,509
Interest-bearing deposits .............. 5,354 22,899
Investment securities .................. 8,763 251,949
Loans, lease financing, and other
receivables, net .................... 15,164 15,794
Investments in subsidiaries:
Commercial banks .................. 1,900,774 1,795,889
Other ............................. 167,208 84,160
Receivables from subsidiaries:
Commercial banks .................. 125,000 110,000
Other ............................. 14,044 9,565
Other assets ........................... 85,477 63,092
----------- -----------
$ 2,323,743 2,356,857
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued liabilities .................... $ 30,437 32,486
Borrowings less than one year .......... 267,239 413,660
Subordinated debt to subsidiary ........ 20,223 23,773
Long-term debt ......................... 227,000 227,100
----------- -----------
Total liabilities ............ 544,899 697,019
----------- -----------
Shareholders' equity:
Common stock ...................... 907,604 888,231
Net unrealized holding losses on
securities available for sale .. (3,644) (4,158)
Retained earnings ................. 874,884 775,765
----------- -----------
Total shareholders' equity ... 1,778,844 1,659,838
----------- -----------
$ 2,323,743 2,356,857
=========== ===========

Condensed Statements of Income
Years ended December 31, 2000, 1999, and 1998

(In thousands) 2000 1999 1998
--------- --------- ---------

Interest income - interest and fees on loans and securities .......................... $ 18,034 11,846 7,066
Interest expense - interest expense on borrowed funds ................................ 48,641 32,529 17,307
--------- --------- ---------
Net interest loss .................................................. (30,607) (20,683) (10,241)
--------- --------- ---------
Other income:
Dividends from consolidated subsidiaries:
Commercial banks ........................................................... 163,046 109,868 210,890
Other ...................................................................... 1,000 -- 1,430
Investment securities gain (loss), net .......................................... 25,076 800 --
Impairment loss on First Security Corporation common stock ...................... (96,911) -- --
Other income .................................................................... 10,236 3,168 7,064
--------- --------- ---------
102,447 113,836 219,384
--------- --------- ---------
Expenses:
Salaries and employee benefits .................................................. 9,311 8,659 5,504
Merger-related expense .......................................................... 28,291 884 1,191
Operating expenses .............................................................. 5,661 1,633 7,321
--------- --------- ---------
43,263 11,176 14,016
--------- --------- ---------
Income before income tax benefit and undistributed income of consolidated subsidiaries 28,577 81,977 195,127
Income tax benefit ................................................................... 60,661 14,471 8,304
--------- --------- ---------
Income before equity in undistributed income of consolidated subsidiaries ............ 89,238 96,448 203,431
Equity in undistributed income of consolidated subsidiaries:
Commercial banks and bank holding company ....................................... 78,628 103,767 (55,306)
Other ........................................................................... (6,157) (6,151) (4,772)
--------- --------- ---------
Net income ........................................................................... $ 161,709 194,064 143,353
========= ========= =========

Condensed Statements of Cash Flows
Years ended December 31, 2000, 1999, and 1998

(In thousands) 2000 1999 1998
--------- --------- ---------

Cash flows from operating activities:
Net income ............................................................. $ 161,709 194,064 143,353
Adjustments to reconcile net income to net cash provided by operating
activities:
Undistributed net (income) losses of consolidated subsidiaries .... (72,471) (97,616) 60,078
Depreciation of premises and equipment ............................ 117 145 160
Investment securities gain ........................................ (25,076) (800) --
Impairment loss on First Security Corporation common stock ........ 96,911 -- --
Amortization ...................................................... 660 663 644
Other ............................................................. (23,615) (14,219) 16,272
--------- --------- ---------
Net cash provided by operating activities .................... 138,235 82,237 220,507
--------- --------- ---------
Cash flows from investing activities:
Net (increase) decrease in interest-bearing deposits ................... 17,545 (2,155) (17,895)
Collection of advances to subsidiaries ................................. 12,846 9,890 8,054
Advances to subsidiaries ............................................... (32,325) (16,590) (118,261)
Proceeds from sale of investment securities available for sale ......... 162,282 20,664 --
Purchase of investment securities available for sale ................... (1,065) (250,780) --
Increase of investment in subsidiaries ................................. (75,674) (88,725) (335,340)
Other .................................................................. 621 178 (18,344)
--------- --------- ---------
Net cash provided by (used in) investing activities .......... 84,230 (327,518) (481,786)
--------- --------- ---------
Cash flows from financing activities:
Net change in commercial paper and other borrowings under one year ..... (146,421) 302,443 38,167
Payment on borrowings over one year .................................... -- -- (25,000)
Proceeds from issuance of long-term debt ............................... -- -- 177,267
Payments on long-term debt ............................................. (3,650) -- (2,000)
Proceeds from issuance of common stock ................................. 6,717 9,753 139,974
Payments to redeem common stock ........................................ (3,899) (6,650) (26,741)
Dividends paid ......................................................... (76,762) (56,914) (41,600)
--------- --------- ---------
Net cash provided by (used in) financing activities .......... (224,015) 248,632 260,067
--------- --------- ---------
Net increase (decrease) in cash and due from banks .......................... (1,550) 3,351 (1,212)
Cash and due from banks at beginning of year ................................ 3,509 158 1,370
--------- --------- ---------
Cash and due from banks at end of year ...................................... $ 1,959 3,509 158
========= ========= =========

The parent company paid interest of $50.1 million, $30.7 million, and $16.4
million for the years ended December 31, 2000, 1999, and 1998, respectively.

REPORT OF INDEPENDENT AUDITORS

THE BOARD OF DIRECTORS AND SHAREHOLDERS
ZIONS BANCORPORATION:

We have audited the accompanying consolidated balance sheet of Zions
Bancorporation and subsidiaries as of December 31, 2000, and the related
consolidated statements of income, cash flows, and changes in shareholders'
equity and comprehensive income for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Zions Bancorporation as of December 31,
1999 and for each of the years in the two-year period then ended, were audited
by other auditors whose report dated February 7, 2000, expressed an unqualified
opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the 2000 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Zions
Bancorporation and subsidiaries at December 31, 2000, and the consolidated
results of their operations and their cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States.

/s/ERNST & YOUNG LLP

Salt Lake City, Utah
January 24, 2001