ZIONS BANCORPORATION /UT/
S-4, 1997-12-29
NATIONAL COMMERCIAL BANKS
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    As filed with the Securities and Exchange Commission on December __, 1997
                                                Registration No. 333-___________
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 -------------
                                    FORM S-4
                             REGISTRATION STATEMENT
                                      Under
                           THE SECURITIES ACT OF 1933
                                 -------------

                              ZIONS BANCORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                 <C>                                <C>
            Utah                               6712                       87-0227400
- -------------------------------     ----------------------------       -------------------
(State or other jurisdiction of     (Primary Standard Industrial         (IRS Employer
 incorporation or organization)      Classification Code Number)       Identification No.)
</TABLE>

                           One South Main, Suite 1380
                           Salt Lake City, Utah 84111
                                 (801) 524-4787
    ------------------------------------------------------------------------
    (Address, including zip code, and telephone number, including area code,
                  of registrant's principal executive offices)


                                Harris H. Simmons
                      President and Chief Executive Officer
                              Zions Bancorporation
                           One South Main, Suite 1380
                           Salt Lake City, Utah 84111
                                 (801) 524-4787
            ---------------------------------------------------------
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)
                              --------------------
                                   Copies to:

      Brian D. Alprin, Esq.                    Thomas H. Maxfield, Esq.
      Laurence S. Lese, Esq.                   Baker & Hostetler LLP
      Duane, Morris & Heckscher LLP            303 East Seventeenth Avenue
      Suite 700                                         Suite 1100
      1667 K Street, N.W.                      Denver, CO  80203-1264
      Washington, D.C.  20006-1608             (303) 861-0600
      (202) 776-7800

Approximate date of commencement of the proposed sale of the securities to the
public: The date of mailing the Proxy Statement/Prospectus contained herein.

<PAGE>

- --------------------------------------------------------------------------------
                         CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
====================================================================================================================================
                                                              Proposed maximum         Proposed maximum          Amount of
                                           Amount to be      offering price per       aggregate offering       registration
 Title of securities to be registered      registered               share                  price(1)                 fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                      <C>                   <C>                     <C>
Common Stock, no par value                 710,000
                                           Shares                    NA                   $8,511,107              $2,511
====================================================================================================================================
</TABLE>

(1)  Estimated solely for the purpose of calculating the registration fee and
     calculated in accordance with Rule 457(f)(2) on the basis of the book value
     of the outstanding shares of Common Stock, $1.00 par value, of Tri-State
     Finance Corporation on September 30, 1997 (the latest practicable date
     prior to filing the registration statement) of $8,511,107, such stock to be
     canceled upon effectiveness of the Reorganization described herein.
                              --------------------
         The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

================================================================================

<PAGE>

                          TRI-STATE FINANCE CORPORATION
                                 Proxy Statement
                                       For
                         Special Meeting of Shareholders
                          To be Held on January , 1998

                                       and

                              ZIONS BANCORPORATION
                                   Prospectus
                             Up to 710,000 Shares of
                                  Common Stock


         This Proxy Statement/Prospectus is being furnished to the shareholders
of Tri-State Finance Corporation, a Colorado corporation ("the Company"), in
connection with the solicitation of proxies by its Board of Directors for use at
a Special Meeting of Shareholders of the Company to be held on January __, 1998
(the "Special Meeting") and at any adjournments or postponements thereof. This
Proxy Statement/Prospectus and accompanying form of proxy ("Proxy") are first
being mailed to the shareholders of the Company of record as of December __,
1997 (the "Record Date") on or about December __, 1997.

         At the Special Meeting, the holders of each outstanding share of Class
A Company common stock, par value $1.00 per share (the "Class A Company Common
Stock") and Class B Company common stock, par value $1.00 per share (the "Class
B Company Common Stock"; collectively, with the Class A Company Common Stock,
the "Company Common Stock") will consider and vote upon a proposal to approve
and adopt the Agreement and Plan of Reorganization dated as of September 23,
1997, among the Company, Tri-State Bank, the Company's wholly-owned subsidiary,
a banking corporation organized under the laws of the State of Colorado (the
"Bank"), Zions Bancorporation, a Utah corporation ("Zions"), Zions' wholly-owned
subsidiary, Val Cor Bancorporation, Inc., a Colorado corporation ("Val Cor"),
and Val Cor's 99.7% owned subsidiary, Valley National Bank of Cortez, a national
banking association organized under the laws of the United States ("Valley"), an
accompanying Agreement of Merger between the Company and Val Cor, and an
Agreement of Merger between the Bank and Valley (collectively the "Plan of
Reorganization"). Pursuant to the Plan of Reorganization, the Company will merge
with and into Val Cor with Val Cor being the surviving corporation (the "Holding
Company Merger") and the Bank will merge with and into Valley, with Valley being
the surviving banking corporation (the "Bank Merger"; collectively the
"Reorganization"). The holders of Class A Company Common Stock and the holders
of Class B Company Common Stock will vote on the Reorganization separately as
different classes. The approval of the Reorganization by each separate class is
required for the Reorganization to be consummated and for the Holding Company
Merger and the Bank Merger to be effectuated.

         Upon consummation of the Reorganization, the holders of each
outstanding share of Company Common Stock will receive, in exchange for each
share of Company Common Stock, shares of Zions common stock, no par value
("Zions Common Stock"). At the Effective Date (as defined) of the
Reorganization, the shares of Company Common Stock will be canceled and
immediately converted into the right for holders of Company Common Stock to
receive, in exchange for each share of Company Common Stock, that number of
shares of Zions Common Stock calculated by dividing the Merger Consideration (as
defined) of 710,000 shares of Zions Common Stock by the total number of shares
of Company Common Stock issued and outstanding as of the Effective Date of the
Reorganization. In accordance with this formula, the shareholders of the Company
will receive approximately .9484 of a share of Zions Common Stock for each share
of Company Common Stock. Zions will not issue fractional shares of its common
stock in the Reorganization. In lieu of fractional shares of Zions Common Stock,
if any, each shareholder of the Company who is entitled to a fractional share of
Zions Common Stock will receive an amount of cash equal to the product of such
fraction times $40.625. Such fractional share interest shall not include the
right to vote or to receive dividends or any interest thereon.

<PAGE>


         On December __, 1997, the closing price of Zions Common Stock was
$_____ per share. On that date the Company had 748,631 shares of its Common
Stock issued and outstanding. Assuming that the Reorganization had been
consummated as of December __, 1997 and the closing price of Zions Common Stock
had been $______ on that date, shareholders of the Company under such
circumstances would have received .9484 of a share of Zions Common Stock for
each share of Company Common Stock, or an equivalent value of $ per share of
Company Common Stock.

         The Zions Common Stock to be distributed to Company shareholders will
be registered with the Securities and Exchange Commission and for all
shareholders, other than shareholders who are affiliates of the Company or who
become affiliates of Zions, will be immediately tradable. See "Plan of
Reorganization--Restrictions on Resales by Company Affiliates." Zions has filed
this Proxy Statement/Prospectus with the Securities and Exchange Commission as
part of a Registration Statement under the Securities Act of 1933, as amended,
with respect to the shares of Zions Common Stock which may be issued in the
Reorganization to the shareholders of the Company. This Proxy
Statement/Prospectus also constitutes the prospectus of Zions filed as part of
the Registration Statement.

                              --------------------

         FOR THE ACTION OF THE SHAREHOLDERS TO BE EFFECTIVE, HOLDERS OF
TWO-THIRDS OF THE ISSUED AND OUTSTANDING SHARES OF CLASS A COMPANY COMMON STOCK
OF THE COMPANY AND HOLDERS OF TWO-THIRDS OF THE ISSUED AND OUTSTANDING SHARES OF
CLASS B COMMON STOCK OF THE COMPANY, EACH CLASS VOTING AS A SEPARATE CLASS, MUST
VOTE IN FAVOR OF THE REORGANIZATION. REGULATORY APPROVALS HAVE NOT YET BEEN
OBTAINED.

                              --------------------

         THE SHARES OF ZIONS COMMON STOCK TO BE ISSUED IN THE REORGANIZATION
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

         THE SHARES OF ZIONS COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.

<PAGE>


         No person has been authorized to give any information or to make any
representation not contained in this Proxy Statement/Prospectus, and, if given
or made, any such information or representation should not be relied upon as
having been authorized by Zions or the Company. This Proxy Statement/Prospectus
does not constitute an offer or solicitation by any person in any state in which
such offer or solicitation is not authorized by the laws thereof or in which the
person making such offer or solicitation is not qualified to make the same.
Neither the delivery of this Proxy Statement/Prospectus at any time nor the
distribution of Zions Common Stock hereunder shall imply that the information
contained herein is correct as of any time subsequent to its date.

         The information contained in this Proxy Statement/Prospectus with
respect to Zions has been supplied by Zions. The information contained in this
Proxy Statement/Prospectus with respect to the Company has been supplied by the
Company. Neither Zions nor the Company warrants the accuracy or completeness of
information relating to the other.

                           Forward-looking Statements

         Certain statements contained herein are not based on historical facts,
but are forward-looking statements that are based upon numerous assumptions
about future conditions that could prove not to be accurate. Actual events,
transactions and results may materially differ from the anticipated events,
transactions or results described in such statements. Zions' ability to
consummate such transactions and achieve such events or results is subject to
certain risks and uncertainties. Such risks and uncertainties include, but are
not limited to, the existence of demand for and acceptance of Zions' products
and services, regulatory approvals and developments, economic conditions, the
impact of competition and pricing, results of financing efforts and other
factors affecting Zions' business that are beyond Zions' control. Factors that
could cause future results to vary from current management expectations include,
but are not limited to, general economic conditions, legislative and regulatory
changes, monetary and fiscal policies of the federal government, changes in tax
policies, rates and regulations of federal and local tax authorities, changes in
interest rates, deposit flows, the cost of funds, demand for loan products,
demand for financial services, competition, changes in the quality or
composition of Zions' loan and investment portfolios, changes in accounting
principles, policies or guidelines, and other economic, competitive,
governmental and technological factors affecting Zions' operations, markets,
products, services and prices.

         The date of this Proxy Statement/Prospectus is December __, 1997.


<PAGE>


                              AVAILABLE INFORMATION

         Zions has filed with the Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933 (the "Securities Act") a Registration Statement
on Form S-4 (the "Registration Statement") covering the shares of Zions Common
Stock issuable in the Reorganization. As permitted by the rules and regulations
of the SEC, this Proxy Statement/Prospectus omits certain information, exhibits
and undertakings contained in the Registration Statement. The statements
contained in this Proxy Statement/Prospectus as to the contents of any contract
or other document filed as an exhibit to the Registration Statement are of
necessity brief descriptions and are not necessarily complete. Each such
statement is qualified in its entirety by reference to the copy of such contract
or document filed as an exhibit to the Registration Statement. The Registration
Statement and the exhibits thereto can be inspected at the public reference
facilities of the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C.,
and copies of such material can be obtained at prescribed rates by mail
addressed to the SEC, Public Reference Section, Washington, D.C. 20549.

         Zions is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the SEC. Such reports,
proxy statements and other information can be inspected and copied at the public
reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C.; and at the following regional offices of the SEC: 7 World
Trade Center, Suite 1300, New York, NY 10048; and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can also be obtained at prescribed rates by mail addressed to the SEC,
Public Reference Section, Washington, D.C. 20549. Zions Common Stock is quoted
on the NASDAQ National Market System (hereinafter, the "NASDAQ-NMS"), and such
reports, proxy statements and other information can also be inspected at the
offices of NASDAQ Operations, 1735 K Street, N.W., Washington, D.C. The SEC
maintains a Web site that contains reports, proxy and information statements,
and other information regarding registrants that file electronically with the
SEC (http://www.sec.gov).

         This Proxy Statement/Prospectus incorporates by reference certain
documents relating to Zions which are not presented herein or delivered
herewith, including the Plan of Reorganization (as described herein). See
"Information Concerning Zions -- Zions Documents Incorporated by Reference."
Copies of such documents are available upon request and without charge to any
person to whom this Proxy Statement/Prospectus has been delivered. Requests for
the Plan of Reorganization or Zions documents should be directed to Zions
Bancorporation, One South Main, Suite 1380, Salt Lake City, Utah 84111,
Attention: Dale M. Gibbons, Senior Vice President, (telephone: 801/524-4787). In
order to ensure timely delivery of the Plan of Reorganization or Zions
documents, any request should be made not later than January __, 1998.


<PAGE>



                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
SUMMARY ...................................................................    1

INTRODUCTION ..............................................................   15
         Record Date; Voting Rights .......................................   15
         Purpose of the Special Meeting ...................................   15
         Opinion of the Company's Financial Advisor .......................   16
         Voting and Revocation of Proxies .................................   17
         Solicitation of Proxies ..........................................   17

PLAN OF REORGANIZATION ....................................................   17
         The Reorganization ...............................................   17
         Background of and Reasons for the Reorganization .................   19
         Voting Agreements ................................................   21
         Required Vote; Management Recommendation .........................   21
         Opinion of the Company's Financial Advisor .......................   22
         Conversion of Company Shares .....................................   25
         Federal Income Tax Consequences of the Reorganization ............   27
         Rights of Dissenting Shareholders ................................   28
         Interests of Certain Persons in the Transaction ..................   30
         Inconsistent Activities ..........................................   31
         Conduct of Business Pending the Reorganization ...................   31
         Conditions to the Reorganization .................................   32
         Representations and Warranties ...................................   34
         Amendment and Waiver .............................................   34
         Authorized Termination and Damages for Breach ....................   34
         Restrictions on Resales by Company Affiliates ....................   35
         Expenses .........................................................   35
         Government Approvals .............................................   35
         Effective Date of the Reorganization .............................   36
         Accounting Treatment .............................................   36
         Relationship Between Zions and the Company .......................   36
         Unaudited Pro Forma Condensed Combined Financial Information .....   36

SUPERVISION AND REGULATION ................................................   38
         Zions ............................................................   38
         Regulatory Capital Requirements ..................................   39
         Other Regulatory and Supervisory Issues ..........................   42
         Deposit Insurance and Other Assessments ..........................   43
         Interstate Banking ...............................................   44

MONETARY POLICY ...........................................................   45

INFORMATION CONCERNING ZIONS BANCORPORATION ...............................   46
         Selected Financial Data ..........................................   47
         Stock Prices and Dividends on Zions Common Stock .................   49
         Principal Holders of Zions Common Stock ..........................   50
         Zions Documents Incorporated By Reference ........................   51

INFORMATION CONCERNING THE COMPANY AND THE BANK ...........................   52
         General ..........................................................   52
         The Bank .........................................................   53
         Market Areas Served ..............................................   53
         Loans ............................................................   54
         Non-Performing Assets ............................................   55
         Analysis of Allowance for Loan Losses ............................   56
         Investment Securities ............................................   58
         Deposits .........................................................   60
         Return on the Bank Equity and Assets .............................   61
         Competition ......................................................   61
         The Bank Facilities ..............................................   62
         Employees ........................................................   62
         Regulatory Matters ...............................................   62
         Selected Financial Data ..........................................   62
         Stock Prices and Dividends on Company Common Stock ...............   64
         Information Concerning the Chairman, President and Chief
          Executive Officer of the Company and the Bank ...................   64
         Certain Transactions of the Company ..............................   65
         Stockholdings of Directors, Officers and Certain Others ..........   65

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         RESULTS OF OPERATIONS OF TRI-STATE FINANCE CORPORATION ...........   67

<PAGE>

COMPARISON OF THE RIGHTS OF SHAREHOLDERS OF ZIONS AND THE COMPANY .........   76

LEGAL OPINIONS ............................................................   82

EXPERTS ...................................................................   82

OTHER MATTERS .............................................................   83

CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY ..........................   84

Appendix A - Fairness Opinion of The Wallach Company, Inc.

Appendix B - Form of opinion of Baker & Hostetler LLP as to Tax Matters

Appendix C - Rights of Dissenters under ss.ss. 7-113-101 to 701-113-302 of the
             Colorado Business Corporation Act



                                       ii

<PAGE>


                                     SUMMARY


         The following is a brief summary of certain information which may also
be contained elsewhere in this Proxy Statement/Prospectus. This summary is
provided for convenience and should not be considered complete. It is qualified
in its entirety by the more detailed information contained in this Proxy
Statement/Prospectus and in the Appendices hereto.

The Parties

         Zions Bancorporation ("Zions") is a bank holding company registered
under the Bank Holding Company Act of 1956, as amended (the "Bank Holding
Company Act"), and organized under the laws of Utah, engaged primarily in the
commercial banking business through its banking subsidiaries. Zions' principal
executive offices are at One South Main, Suite 1380, Salt Lake City, Utah 84111
(telephone: 801/524-4787). Zions is the second largest bank holding company
headquartered in Utah. Zions First National Bank, Salt Lake City, Utah ("ZFNB"),
founded in 1873, is a wholly-owned subsidiary of Zions (except for directors'
qualifying shares) and currently has 114 offices located throughout the state of
Utah as well as fifteen offices in various communities in Idaho, plus one
foreign office, for a total of 130 banking offices, including its Head Office.
ZFNB is the second largest banking organization in the state of Utah. Zions also
owns Nevada State Bank, Las Vegas, Nevada, and National Bank of Arizona, Tucson,
Arizona ("NBA"). NBA currently has 28 offices in Arizona and is the fifth
largest banking organization in Arizona. On May 16, 1997, Zions acquired Aspen
Bancshares, Inc. ("Aspen"), a bank holding company headquartered in Aspen,
Colorado. The operations acquired in the Aspen merger are conducted through 13
offices/branches in western Colorado and one branch in northeastern New Mexico.
As of December 31, 1996, Aspen had total consolidated assets of $451 million,
deposits of $399 million, and shareholders' equity of $31 million. On July 11,
1997, Zions also acquired Zions Bank (formerly Tri-State Bank) in Montpelier,
Idaho. Subsequent to the acquisition by Zions of Zions Bank, Zions Bank acquired
10 branches from Wells Fargo Bank, N.A., located in Idaho, and opened two de
novo branches in Idaho. On July 19, 1997, Zions completed its acquisition of 27
former branches of Wells Fargo Bank in Arizona (11 branches), Idaho (10
branches), Nevada (5 branches), and Utah (1 branch). The acquisition included
$378 million in deposit accounts and the branch offices. On September 20, 1997,
Zions Bank completed its acquisition of four additional branches from Wells
Fargo in Utah. The acquisition included $56 million in deposit accounts and the
branch offices. On August 15, 1997, Zions Bank merged with ZFNB. As a result,
ZFNB now operates 15 branches in Idaho. On October 17, 1997, Zions acquired Sun
State Capital Corporation ("Sun State"), a Nevada bank holding company and
parent company of Sun State Bank. In the transaction, Sun State merged with and
into Zions, and Sun State Bank merged with and into Nevada State Bank. As a
result of the acquisition, Nevada State Bank added four offices in the Las Vegas
and one office in the Reno, Nevada areas to its franchise. As of September 30,
1997, Sun State had total assets of $171.1 million, deposits of $151.0 million,
and shareholders' equity of $13.9 million. Nevada State Bank currently has 37
offices. On November 14, 1997, Zions and GB Bancorporation ("Grossmont"), the
parent company of Grossmont Bank, completed their merger whereby Grossmont
merged with and into Zions. Grossmont Bank had approximately $720 million in
assets and 14 offices in San Diego County, California. On September 24, 1997,
Zions and Vectra Banking Corporation ("Vectra") announced that a definitive
agreement had been signed under which Vectra will merge with and into Zions in
exchange for common shares of Zions. As of August 31, 1997, Vectra had assets of
$660 million. The merger is subject to approval by banking regulators and the
shareholders of Vectra. See "Summary--Recent Developments," below. This
acquisition is pending. As of December 31, 1996 Zions had total consolidated
assets of $6.49 billion, deposits of $4.55 billion, and shareholders' equity of
$507.5 million; as of September 30, 1997, Zions had total consolidated assets of
$9.06 billion, deposits of $5.67 billion, and shareholders' equity of $581.1
million. See "Information Concerning Zions Bancorporation."


<PAGE>


         Val Cor Bancorporation, Inc. ("Val Cor"), a Colorado corporation, is a
bank holding company registered under the Bank Holding Company Act. Zions
acquired Val Cor as part of the Aspen acquisition in May 1997. Val Cor's
principal asset consists of its ownership interest in over 99% of the common
stock of Valley. Val Cor's main office is located at 350 W. Montezuma, Cortez,
Colorado, and its telephone number is (970) 565-4411.

         Valley National Bank of Cortez ("Valley") is a national banking
association organized in 1979. Valley Bank offers traditional banking services
to customers in its primary market area of Montezuma County, Colorado. Valley
also conducts business through its two branch offices located in Cortez and
Dolores, Colorado. At December 31, 1996, Valley had total assets of $80.2
million, total deposits of $68.8 million, and shareholders' equity of $11.2
million. At September 30, 1997, Valley had total assets of $95.1 million, total
deposits of $70.6 million, and shareholders' equity of $23.6 million. Valley's
main office is located at 350 W. Montezuma, Cortez, Colorado, and its telephone
number is 970-565-4411.

         Tri-State Finance Corporation (the "Company") is a bank holding company
registered under the Bank Holding Company Act whose sole activity is the
ownership and operation of Tri-State Bank. The Company has no other
subsidiaries. The Company's principal asset consists of its 100% ownership
interest in the Bank. The Company's main office is located on the premises of
the Bank at 616 East Speer Boulevard, Denver, Colorado, and its telephone number
at that address is (303) 778-0303. As of September 30, 1997, the Company had
total consolidated assets of $124 million and shareholders' equity of $8.5
million. The Company's annualized return on average assets in the nine months
ended September 30, 1997, was 1.78%, and the annualized return on average equity
during that period was 26.63%.

         Tri-State Bank (the "Bank") is a Colorado state bank and has operated
at its current location in Denver since the late 1970s, first as an industrial
bank and then, since the mid 1980s, as a Colorado state commercial bank. In
addition to its main location in Denver, the Bank has a full-service branch
office in Boulder, Colorado. At September 30, 1997, the Bank had total assets of
$124 million, total deposits of $113 million and shareholders' equity of $10.4
million. Over the period from 1991 to September 30, 1997, assets and deposits
grew at a 11.43% and 11.16% compound annual rate, respectively, and loans grew
at a compound annual rate of 10.43%. The Bank's main office is located at 616
East Speer Boulevard, Denver, Colorado, and its telephone number at that address
is (303) 778-0303.


                                       2

<PAGE>


The Special Meeting; Purpose

         The Special Meeting of Shareholders of the Company (the "Special
Meeting") will be held at 9:00 a.m., local time, on January __, 1998 at the
offices of the Company, 255 Washington Street, Denver, Colorado.

         The purpose of the Special Meeting is to consider and vote upon a
proposal to approve the Plan of Reorganization and the Reorganization. Only
holders of record of Class A Common Stock, $1.00 par value, of the Company (the
"Class A Company Common Stock") and Class B Common Stock, $1.00 par value, of
the Company (the "Class B Company Common Stock"; collectively, with the Class A
Company Common Stock, the "Company Common Stock") at the close of business on
December , 1997, the record date, will be entitled to vote at the Special
Meeting. Each of the holders of Class A Company Common Stock and the holders of
Class B Company Common Stock will vote at the Special Meeting separately as a
class. At that date, 100,000 shares of Class A Company Common Stock were
outstanding, each share being entitled to one vote and 648,631 shares of Class B
Company Common Stock were outstanding, each share being entitled to one vote.
See "Introduction."

Vote Required for Approval

         Approval of the Plan of Reorganization requires the affirmative vote of
two-thirds of the outstanding shares of Class A Company Common Stock entitled to
vote and of two-thirds of the outstanding shares of Class B Company Common
Stock, entitled to vote. Each class will vote separately as a group at the
Special Meeting. A failure to vote, an abstention, or a failure by a broker to
vote shares held in street name will have the same legal effect as a vote
against approval of the Plan of Reorganization. See "Plan of
Reorganization--Required Vote; Management Recommendation."

         As of December __, 1997, four individuals beneficially owned an
aggregate of 100% of the outstanding shares of Class A Company Common Stock and
fifteen persons, including affiliated entities, beneficially owned an aggregate
of approximately 75.34% of the outstanding shares of Class B Company Common
Stock. As an inducement to Zions to enter into the Plan of Reorganization, these
various shareholders of the Company, including affiliated entities, have entered
into agreements with Zions under which they have agreed, in their capacity as
shareholders, to vote their shares in favor of the Reorganization. Some of these
shareholders are officers and directors of the Company; all of the Company's
directors and executive officers have so agreed. See "Plan of
Reorganization--Voting Agreements; Information Concerning the Company and the
Bank--Stockholdings of Directors, Officers and Certain Others." Such a vote by
each class of Company Common Stock will be sufficient to approve the Plan of
Reorganization and the Reorganization. If each of these shareholders votes his
or her shares in favor of the Plan of Reorganization and the Reorganization as
each has agreed, the Plan of Reorganization and the Reorganization will be
approved by the Company's shareholders notwithstanding the vote of other
shareholders of the Company.


                                       3

<PAGE>

Opinion of the Company's Financial Advisor

         The Company has retained an independent financial advisor, The Wallach
Company, Inc. Denver, Colorado ("Wallach Company"), to evaluate the merger
consideration offered to the Company's shareholders by Zions. The financial
advisor has rendered an opinion that the Merger Consideration to be paid
pursuant to the Plan of Reorganization is fair to the shareholders of the
Company from a financial point of view. See "Plan of Reorganization--Opinion of
the Company's Financial Advisor."

Proposed Reorganization

         At the Special Meeting, the holders of each class of Company Common
Stock will be asked to consider and approve an Agreement and Plan of
Reorganization among Zions, Val Cor, Valley, the Company and the Bank, an
Agreement of Merger between the Company and Zions and an Agreement of Merger
between the Bank and Valley (collectively, the "Plan of Reorganization"). The
Plan of Reorganization provides for the merger of the Company into Val Cor,
whereby Val Cor will be the surviving corporation (the "Holding Company
Merger"), and for the merger of the Bank into Valley, with Valley being the
surviving entity (the "Bank Merger"; collectively, the "Reorganization"). See
"Plan of Reorganization."

         Upon consummation of the Reorganization, the holders of each
outstanding share of Company Common Stock will receive, in exchange for each
share of Company Common Stock, shares of Zions Common Stock. At the Effective
Date of the Reorganization, the shares of Company Common Stock will be canceled
and immediately converted into the right for holders of Company Common Stock to
receive, in exchange for each share of Company Common Stock, that number of
shares of Zions Common Stock calculated by dividing the Merger Consideration of
710,000 shares of Zions Common Stock by the total number of shares of Company
Common Stock issued and outstanding as of the Effective Date. In accordance with
this formula, the shareholders of the Company will receive approximately .9484
of a share of Zions Common Stock for each share of Company Common Stock. Zions
will not issue fractional shares of its common stock in the Reorganization. In
lieu of fractional shares of Zions Common Stock, if any, each shareholder of the
Company who is entitled to a fractional share of Zions Common Stock will receive
an amount of cash equal to the product of such fraction times $40.625. Such
fractional share interest will not include the right to vote or to receive
dividends or any interest thereon.

         On December __, 1997, the closing price of Zions Common Stock was
$__________ per share and the Company had issued and outstanding 748,631 shares
of its Common Stock. Assuming that the Reorganization had been consummated as of
December __, 1997 and the closing price of Zions Common Stock had been $_____,
shareholders of the Company under such circumstances would have received .9484
of a share of Zions Common Stock for each share of Company Common Stock, or an
equivalent value of $__________ per share of Company Common Stock.

Certain Definitions

         In connection with the description of the Reorganization in this Proxy
Statement/Prospectus, shareholders of the Company should be aware of the
following terms. The following definitions may not be complete. For a complete
definition of each term, please refer to the Plan of Reorganization.

                                       4

<PAGE>

         "Bank Merger" means the merger of the Bank with and into Valley, with
Valley being the surviving entity.

         "Effective Date" means the date which is the latest of (a) the later of
(1) the day upon which the holders of the Class A Company Common Stock approve,
ratify, and confirm the Holding Company Merger or (2) the day upon which the
holders of the Class B Company Common Stock approve, ratify, and confirm the
Holding Company Merger; (b) the day upon which the shareholders of Valley
approve, ratify, and confirm the Bank Merger, as defined herein; (c) the first
to occur of (i) the date thirty days following the date of the order of the
Board of Governors of the Federal Reserve System or the Federal Reserve Bank of
San Francisco acting pursuant to delegated authority delegated to it by the
Board of Governors of the Federal Reserve System (collectively, the "Board of
Governors") approving the Holding Company Merger, as defined herein; or (ii) if,
pursuant to section 321(a) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (the "Riegle Act"), the Board of Governors shall have
prescribed a shorter period of time with the concurrence of the Attorney General
of the United States, the date on which such shorter period of time shall
elapse; or (iii) the date ten days following the date on which the Board of
Governors indicates its waiver of jurisdiction over the Holding Company Merger;
(d) the first to occur of (1) the date thirty days following the date of the
order of the Comptroller of the Currency (the "Comptroller") approving the Bank
Merger, or (2) if, pursuant to section 321(b) of the Riegle Act, the Comptroller
shall have prescribed a shorter period of time with the concurrence of the
Attorney General of the United States, the date on which such shorter period of
time shall elapse; (e) if such an order shall be required by law, the date ten
days following the date of the order of the Commissioner of Financial
Institutions of the State of Utah (the "Commissioner") approving the
transactions contemplated by the Plan of Reorganization; (f) if such an order
shall be required by law, the date ten days following the date of the order of
the Colorado Division of Banking (the "Division") approving the transactions
contemplated by the Plan of Reorganization; (g) the date upon which any other
material order, approval, or consent of a federal or state regulator of
financial institutions or financial institution holding companies authorizing
consummation of the transactions contemplated by the Plan of Reorganization is
obtained or any waiting period mandated by such order, approval, or consent has
run; (h) ten days after any stay of the approvals of the Board of Governors, the
Comptroller, the Commissioner, or the Division of the transactions contemplated
by the Plan of Reorganization, or any injunction against closing of such
transactions is lifted, discharged, or dismissed; or (i) such other date as
shall be mutually agreed upon by Zions and the Company.

         "Holding Company Merger" means the merger of the Company with and into
Val Cor, with Val Cor being the surviving corporation.

         "Merger Consideration" means the aggregate of 710,000 shares of Zions
Common Stock to be issued to the holders of Company Common Stock upon
consummation of the Holding Company Merger.

                                       5

<PAGE>


Reasons for the Reorganization

         Management and the directors of the Company believe that it is in the
best interest of the Company and its shareholders for the Company to merge with
a larger financial institution in a tax-free reorganization (with respect to the
receipt by the Company shareholders of shares of Zions Common Stock). Management
and the directors of the Company believe that the proposed merger with Zions in
an exchange whereby the Company shareholders will receive Zions Common Stock in
exchange for their Company Common Stock provides the Company's shareholders with
the greatest available monetary value based upon Zions' offer as compared to
other offers received as well as increased liquidity for their investment,
prospects for greater yield of their investment through increased dividends and
prospects for growth in their investment due to the prospects for Zions
generally. In addition, management and the directors of the Company believe the
combined institution will be more competitive in the Company's market area due
to Zions' greater resources. See "Plan of Reorganization--Background of and
Reasons for the Reorganization" for a description of the factors considered by
the Company's board of directors in determining to recommend the Reorganization
to shareholders for their approval.

         For Zions, the Reorganization will provide the opportunity to further
expand its franchise in the Denver Metropolitan area. Zions proposes to broaden
its geographical base in the Colorado market and thereby diversify its banking
operations, and expand the banking services it is able to provide. The
combination of the different skills, resources and services offered by the
Company and Zions, together with the additional skills and resources available
in the broader Zions organization, will make the resulting banking group better
able to effectively compete in its markets with other full-service financial
institutions. See "Plan of Reorganization--Background of and Reasons for the
Reorganization."

Board of Directors Recommendation

         The Board of Directors of the Company unanimously believes that the
Reorganization is in the best interests of the Company, its shareholders, and
customers of the Company and those of the Bank and recommends that the
shareholders of the Company vote "FOR" approval of the Plan of Reorganization
and the Reorganization. See "Plan of Reorganization--Background of and Reasons
for the Reorganization." The Company has retained The Wallach Company, an
independent financial advisor, to render an opinion regarding the fairness to
the Company shareholders of the consideration provided in the Plan of
Reorganization. The Wallach Company has opined that the merger consideration to
be paid to the shareholders of the Company by Zions is fair to the shareholders
of the Company from a financial point of view.

         SHAREHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, DATE, AND SIGN
THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.

Interests of Certain Persons in the Transaction

         The Plan of Reorganization provides that, following the Reorganization,
Richard C. Tucker, currently Chairman, President and Chief Executive Officer of
the Bank, will become an executive officer of Valley. Mr. Tucker will enter into
an employment agreement with Valley effective as of the Effective Date. The
Company Board of Directors was aware of these interests when it considered and
approved the Plan of Reorganization. See "Plan of Reorganization--Interests of
Certain Persons in the Transaction."


                                       6

<PAGE>

Tax Consequences

         The Company will receive an opinion from Baker & Hostetler LLP, special
counsel to the Company (the "Baker Opinion") that, based upon the facts,
representations, and assumptions set forth or referred to in such opinion, the
Holding Company Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code. As a result,
the Company shareholders, who receive Zions Common Stock, will recognize no gain
or loss upon the exchange of their shares of Company Common Stock for Zions
Common Stock in the Holding Company Merger (except with respect to cash received
by such shareholders in lieu of fractional shares). For further discussion, see
"Plan of Reorganization--Federal Income Tax Consequences of the Reorganization."
A copy of the Baker Opinion is attached as Appendix B to this Proxy
Statement/Prospectus.

Dissenters' Rights

         Under Colorado law, shareholders of the Company will be entitled to
dissenters' rights. The Colorado Business Corporation Act (ss.ss. 7-113-101 et
seq.) permits a shareholder to dissent to a merger and to receive the fair value
for such shares in accordance with procedures established by Colorado law.
Company shareholders will be entitled under Colorado law to exercise their
dissenters' rights with respect to the Plan of Reorganization. Since exercise
and preservation of dissenters' rights are conditioned on strict observance of
the applicable section of the Colorado Business Corporation Act, each Company
shareholder who might exercise dissenters' rights should consult and strictly
observe the statute, a copy of which is attached as Appendix C to this Proxy
Statement/Prospectus. Failure to follow the statutory provisions precisely may
result in loss of such shareholder's dissenters' rights under Colorado law. See
"Plan of Reorganization--Rights of Dissenting Shareholders," "Comparison of
Zions Common Stock and Company Common Stock--Rights of Dissenting Shareholders"
and Appendix C to this Proxy Statement/Prospectus.

Conditions; Regulatory Approval

         Consummation of the Reorganization is subject to satisfaction of a
number of conditions, including (i) obtaining requisite approval from the
Company shareholders, (ii) obtaining regulatory approvals from the Board of
Governors, the Comptroller, the Commissioner, and the Division, (iii) the
receipt of an opinion of counsel with respect to certain tax aspects of the
Reorganization, (iv) the absence of any material adverse change with respect to
the Company, (v) a determination by Zions' independent auditors that the
Reorganization will be treated for accounting purposes as a pooling of
interests, and (vi) the satisfaction of other customary closing conditions. See
"Plan of Reorganization--Conditions to the Reorganization." Regulatory approvals
have not yet been obtained.

Amendment; Termination

         Notwithstanding prior shareholder approval, the Plan of Reorganization
may be amended at any time prior to the Effective Date of the Reorganization in
any respect that would not prejudice the economic interests of the Company
shareholders.

                                       7

<PAGE>

         The Plan of Reorganization may be terminated and abandoned at any time
prior to the Effective Date, notwithstanding approval of the shareholders, as
follows: (i) by mutual consent of the parties to the Plan of Reorganization;
(ii) unilaterally, by Zions if any of the representations and warranties of the
Company or the Bank was materially incorrect when made or in the event of a
material breach or material failure by the Company or the Bank of any covenant
or agreement of the Company or the Bank contained in the Plan of Reorganization
which has not been, or cannot be, cured within thirty days after written notice
has been given; (iii) unilaterally, by the Company if any of the representations
and warranties of Zions, Val Cor or Valley was materially incorrect when made or
in the event of a material breach or material failure by Zions, Val Cor or
Valley of any covenant or agreement of Zions, Val Cor or Valley contained in the
Plan of Reorganization which has not been, or cannot be, cured within thirty
days after written notice has been given; (iv) by either Zions or the Company if
the Holding Company Merger has become inadvisable or impracticable by reason of
federal or state litigation to restrain or invalidate the Reorganization; or (v)
by either party on or after June 30, 1998, if the Effective Date has not
occurred on or before that date.

Effective Date of the Reorganization

         It is presently anticipated that if the Plan of Reorganization is
approved by the shareholders of the Company, the Reorganization will become
effective in the first quarter of 1998. However, there can be no assurance that
all conditions necessary to the consummation of the Reorganization will be
satisfied or, if satisfied, that they will be satisfied in time to permit the
Reorganization to become effective at the anticipated time. See "Plan of
Reorganization--Effective Date of the Reorganization."

Accounting Treatment

         It is intended that the Reorganization will be treated for accounting
purposes as a "pooling of interests" in accordance with ABP Opinion No. 16. See
"Plan of Reorganization--Accounting Treatment."

Comparison of Shareholders' Rights

         See "Comparison of Zions Common Stock and Company Common Stock" for a
summary of the material differences between the rights of holders of shares of
Company Common Stock and holders of shares of Zions Common Stock.

"Anti-Takeover" Provisions

         The Articles of Incorporation and Bylaws of Zions contain provisions
which may be considered to be anti-takeover in nature, including staggered terms
of office for directors, absence of cumulative voting and special shareholder
vote requirements for certain types of extraordinary corporate transactions.
Additionally, Zions has adopted a shareholders' rights plan which will have the
effect of encouraging entities interested in acquiring Zions to negotiate any
such transactions with Zions' management and of deterring or discouraging
unfriendly takeovers by making any such takeover substantially more expensive to
the entity sponsoring the unfriendly takeover. The Company's Articles of
Incorporation and Bylaws do not contain any similar provision. See "Comparison
of the Rights of Shareholders of Zions and the Company."

                                       8

<PAGE>


Exchange of Certificates

         Instructions on how to effect the exchange of Company Common Stock
certificates for Zions Common Stock certificates or for cash in lieu of
fractional shares of Zions Common Stock will be sent, as promptly as practicable
after the Reorganization becomes effective, to each shareholder of record of the
Company. Shareholders should not send in stock certificates until they receive
written instructions to do so.

Trading Markets; Pre-Announcement Prices

         The outstanding shares of Zions Common Stock currently are traded on
the Nasdaq National Market ("NASDAQ-NM") under the symbol "ZION." The shares of
Zions Common Stock to be issued in the Reorganization will be listed on
NASDAQ-NMS, subject to official notice of issuance. The closing sale price for
Zions Common Stock on the NASDAQ-NM on September 23, 1997, the last trading day
prior to the first public announcement of the Reorganization, was $_______.

         The outstanding shares of Company Common Stock are not listed or traded
on any market or stock exchange. Such shares when traded are traded infrequently
in privately-negotiated transactions. The Company has no reliable information as
to the prices at which the shares have traded. See "Information Concerning the
Company and the Bank--Stock Prices and Dividends on Company Common Stock."

                                       9

<PAGE>


Selected Financial Information

         The following table sets forth certain historical financial information
for Zions and the Company. With respect to pro forma condensed combined
financial information for Zions giving effect to the Reorganization using the
pooling of interests method of accounting, see "Plan of
Reorganization--Unaudited Pro Forma Condensed Combined Financial Information."
This information is based on the respective historical financial statements of
Zions incorporated herein by reference and of the Company which are included in
this Proxy Statement/Prospectus and should be read in conjunction with such
statements and information and the related notes.





                                       10


<PAGE>


<TABLE>
<CAPTION>
                                       Nine Months Ended
                                          September 30,                           Year Ended December 31,
                                       ------------------    ---------------------------------------------------------------
                                       1997          1996        1996         1995         1994         1993         1992
                                       ----          ----        ----         ----         ----         ----         ----
                                                                   (In Thousands, Except Per Share Amounts)
<S>                                <C>          <C>          <C>         <C>           <C>          <C>          <C>
Zions
Earnings 
  Net interest income ..........   $  225,404   $  189,207   $  260,473   $  227,094   $  198,606   $  174,657   $  157,282 
  Provision for loan losses ....        2,905        2,200        3,540        2,800        2,181        2,993       10,929 
  Net income ...................       84,121       74,495      101,350       81,328       63,827       58,205       47,209 

Per Share
  Net income ...................   $     1.41   $     1.26   $     1.71   $     1.38   $     1.09   $     1.02   $      .86
  Cash Dividends ...............          .35          .32          .43          .35          .29          .25          .19

Statement of Condition at Period
  End
  Assets .......................   $9,059,721   $6,783,341   $6,484,964   $5,620,646   $4,934,095   $4,801,054   $4,107,924
  Deposits .....................    5,666,336    4,572,555    4,552,017    4,097,114    3,705,976    3,432,289    3,075,110
  Long-term debt ...............      251,134       55,702      251,620       56,229       58,182       59,587       99,223
  Shareholders' equity .........      581,129      490,485      507,452      428,506      365,770      312,592      260,070

The Company
Earnings
  Net interest income ..........   $    4,514   $    4,015   $    5,530   $    4,914   $    4,310
  Provision for loan losses.....           --           --           --          450          718
   Net losses ..................        1,577        1,283        1,829        1,212          867

Per Share
  Net income ...................   $     2.11   $     1.72   $     2.45   $     1.66   $     1.21
  Cash Dividends ...............          .30          .30          .30          .15          .15

Statement of Condition at Period
  End
  Assets .......................   $  124,352   $  107,819   $  114,278   $  101,374
  Deposits .....................      112,721       97,909      104,037       93,037
  Long-term debt ...............        2,113        2,195        2,119        1,878
  Shareholders' equity .........        8,511        6,603        7,169        5,440
</TABLE>


Comparative Per Share Data

         The following table sets forth for the periods indicated historical
earnings, book values and dividends per share for Zions and Company Common
Stock. The following data are based on the respective historical financial
statements of Zions incorporated herein by reference and of the Company included
herein and should be read in conjunction with such financial statements and such
information and the related notes to each.


                                       11

<PAGE>


<TABLE>
<CAPTION>
                                            Nine Months ended                        Year Ended
                                              September 30,                          December 31,
                                          ---------------------        ------------------------------------
                                             1997       1996                  1996       1995         1994
                                             ----       ----                  ----       ----         ----
<S>                                          <C>        <C>                 <C>        <C>          <C>
Net Income Per Common Share
     Zions.........................          $1.41      $1.26                $1.71       $1.38        $1.09
     Tri-State ....................           2.11       1.72                 2.45        1.66         1.21
Book Value Per Common Share                                                                        
     Zions.........................          $9.78      $8.30                $8.61       $7.36        $6.28
     Tri-State.....................          11.37       8.82                 9.58        7.44         5.71
Cash Dividends Declared Per Common                                                                 
  Share                                                                                            
     Zions (1).....................          $ .35      $ .32                $ .43       $ .35        $ .29
     Tri-State....................             .30        .30                  .30         .15          .15
</TABLE>

(1)  While Zions is not obligated to pay cash dividends, the Board of Directors
     presently intends to continue its policy of paying quarterly cash
     dividends. Future dividends will depend, in part, upon the earnings and
     financial condition of Zions.


Unaudited Pro Forma Condensed Combined Financial Information

         The following unaudited pro forma condensed combined financial
information reflects the application of the pooling of interests method of
accounting. The following tables, which show comparative historical per Common
Share data for Zions and the Company (separately and pro forma combined) and
equivalent pro forma per share data for the Company, should be read in
conjunction with the financial information as incorporated herein by reference
to other documents and as included herein. The pro forma data in the table,
presented as of and for each of the years in the three year period ended
December 31, 1996, and as of and for the nine months ended September 30, 1997,
are presented for comparative and illustrative purposes only and are not
necessarily indicative of the combined financial position or results of
operations in the future or what the combined financial position or results of
operations would have been had the Reorganization been consummated during the
period or as of the date for which the information in the table is presented:


                                       12

<PAGE>



<TABLE>
<CAPTION>
                                         Historical                            Pro Forma
                                   -----------------------         --------------------------------
                                                                   Zions and
                                                                   Tri-State           Tri-State
                                                                   Pro-Forma           Equivalent
Per Common Share                   Zions         Tri-State         Combined(4)         Pro-Forma(5)
- ----------------                   -----         ---------         -----------         ------------
<S>                                <C>             <C>                <C>                 <C>
NET INCOME(1)
 For the nine months
 ended September 30, 1997           $ 1.41         $  2.11            $ 1.42              $ 1.35

 For the years ended
 December 31, 1996                    1.71            2.45              1.72                1.63
 December 31, 1995                    1.38            1.66              1.39                1.32
 December 31, 1994                    1.09            1.21              1.09                1.03

CASH DIVIDENDS(2)
 For the nine months
 ended September 30, 1997           $  .35         $   .30            $  .35              $  .33

 For the years ended
 December 31, 1996                     .43             .30               .43                 .41
 December 31, 1995                     .35             .15               .35                 .33
 December 31, 1994                     .29             .15               .29                 .28

BOOK VALUE:(3)
 As of September 30, 1997           $ 9.78         $ 11.37            $ 9.81              $ 9.30
 As of December 31, 1996              8.61            9.58              8.63                8.18
 As of December 31, 1995              7.36            7.41              7.36                6.98
 As of December 31, 1994              6.28            5.71              6.28                5.96
</TABLE>

- ----------------------
(1)  Net income per share is based on weighted average common and common
     equivalent shares outstanding.
(2)  Pro forma cash dividends per share represent historical cash dividends of
     Zions.
(3)  Book value per common share is based on total period-end of shareholders'
     equity.
(4)  Pro-forma combined net income per share represents historical net income of
     Zions and the Company computed using historical weighted average common and
     common equivalent shares of Zions adjusted by computed common and common
     equivalent shares to be issued in the transaction. Pro-forma combined book
     value per share represents historical total shareholders' equity of Zions
     and the Company computed using Zions' historical common shares outstanding
     adjusted by computed common shares to be issued in the transaction.
(5)  Pro forma equivalent amounts are computed by multiplying the pro forma
     combined amounts by the exchange ratio of .9484 of a share of Zions Common
     Stock for each share of Company Common Stock.


                                       13

<PAGE>


Recent Developments

         On November 14, 1997, GB Bancorporation ("Grossmont"), the parent
company of Grossmont Bank, merged with and into Zions, with Grossmont
shareholders receiving common shares of Zions. Grossmont Bank had approximately
$780 million in assets and 14 offices in San Diego County, California. It is
both the largest and oldest independent bank in the San Diego area. The merger
is structured to be tax-free and was accounted for as a pooling-of-interests.
Zions owned approximately 4.5% of Grossmont since October 1995. Zions has
exchanged 4.7 million shares of Zions Common Stock for the remaining 95.5% of
Grossmont common stock that it did not own. Zions will incur approximately $2
million ($0.03 per share) in merger related charges in conjunction with this
transaction.

         On July 25, 1997, Zions and Sky Valley Bank Corp. ("Sky Valley"), the
parent company of The First National Bank in Alamosa, announced that a
definitive agreement had been signed under which Sky Valley and its banking
subsidiary will merge with subsidiaries of Zions, with Sky Valley shareholders
receiving common shares of Zions. The First National Bank in Alamosa has
approximately $120 million in assets in three offices in southern Colorado. The
merger is subject to the approval of Sky Valley shareholders and banking
regulators and is expected to close in the fourth quarter of 1997. The merger is
structured to be tax-free and is intended to be accounted for as a
pooling-of-interests. The agreement provides for the issuance of 573,134 shares
of Zions Common Stock for all of the equity interests of Sky Valley. Based upon
Zions' July 24, 1997 closing price of $35.50 per share, the transaction is
valued at $20.3 million, which is 2.7 times Sky Valley's book value at June 30,
1997.

         On September 24, 1997, Zions and Vectra Banking Corporation ("Vectra")
announced that a definitive agreement had been signed under which Vectra will
merge with and into Zions, in exchange for common shares of Zions. At August 31,
1997 Vectra had assets of $660 million. The merger is subject to the approval of
banking regulators and the shareholders of Vectra. The transaction is expected
to close in early 1998. The merger is structured to be tax-free and is intended
to be accounted for as a pooling-of-interests. The agreement with Vectra
provides for the exchange of each common share of Vectra for 0.685 common shares
of Zions and each preferred share of Vectra for approximately 7.75 common shares
of Zions. The merger is subject to a floor arrangement which would be triggered
if Zions' stock price both declines and results in a price at closing which has
decreased more than 18% relative to the KBW 50 index. Vectra has given Zions an
option to acquire up to 19.9% of Vectra's common stock which is exercisable in
certain circumstances related generally to the acquisition of Vectra by a third
party. Based upon Zions' stock price of $41 per share, in aggregate the
transaction is valued at approximately $171 million, which is ____ times
Vectra's book value or ____ times Vectra's estimated 1998 earnings. Vectra has
18 offices in Colorado. The merger is expected to be immediately accretive to
Zions' earnings per share. Zions will incur $____ million in merger-related
charges in the first quarter of 1998 in conjunction with closing this
transaction.


                                       14

<PAGE>


                          TRI-STATE FINANCE CORPORATION
                                 Proxy Statement
                                       for
                         Special Meeting of Shareholders
                        of Tri-State Finance Corporation
                                  to be held on
                                 January , 1998

                                       and

                              ZIONS BANCORPORATION
                                   Prospectus
                             Up to 710,000 Shares of
                                  Common Stock


                                  INTRODUCTION

         This Proxy Statement/Prospectus is furnished in connection with the
solicitation by the Board of Directors of Tri-State Finance Corporation (the
"Company") of proxies to be voted at the Special Meeting of Shareholders of the
Company to be held on January __, 1998 and at any postponements or adjournments
thereof. The Special Meeting will be held at 9:00 a.m., local time, at the
offices of the Company, 255 Washington Street, Denver, Colorado. The approximate
date on which this Proxy Statement/Prospectus will first be mailed to the
shareholders of the Company is December __, 1997.

Record Date; Voting Rights

         The Board of Directors of the Company has fixed the close of business
on December , 1997 as the record date for determining the shareholders of the
Company entitled to notice of and to vote at the Special Meeting or any
postponements or adjournments thereof. At that date, 100,000 shares of Class A
common stock, $1.00 par value, of the Company (the "Class A Company Common
Stock") were outstanding, held by four shareholders of record, and 648,631
shares of Class B common stock, $1.00 par value, of the Company (the "Class B
Company Common Stock") were outstanding, held by approximately 54 shareholders
of record (collectively, the "Company Common Stock"). Each such share of Company
Common Stock entitles its holder of record at the close of business on the
record date to one vote on each matter properly submitted to the shareholders
for action at the Special Meeting. The holders of shares of Class A Company
Common Stock and the holders of shares of Class B Company Common Stock will vote
their respective shares of Company Common Stock separately as a class. Each
class of Company Common Stock voting separately must approve the Plan of
Reorganization, as defined, and the Reorganization, as defined, in order for the
Reorganization to be effectuated. See "Plan of Reorganization -- Required Vote;
Management Recommendation."


                                       15

<PAGE>

Purpose of the Special Meeting

         At the Special Meeting, the holders of Company Common Stock will be
asked to consider and vote upon a proposal to approve an Agreement and Plan of
Reorganization dated as of September 23, 1997, among the Company, the Company's
wholly-owned subsidiary, Tri-State Bank, a banking corporation organized under
the laws of the State of Colorado (the "Bank"), Zions Bancorporation, a Utah
corporation ("Zions"), Zions' wholly-owned subsidiary, Val Cor Bancorporation,
Inc., a Colorado corporation ("Val Cor"), and Val Cor's 99.7% owned subsidiary,
Valley National Bank of Cortez, a national banking association organized under
the laws of the United States ("Valley"), and accompanying Agreement of Merger
between the Company and Val Cor, and an Agreement of Merger between the Bank and
Valley (collectively the "Plan of Reorganization"). As more fully described
below under "Plan of Reorganization," the Plan of Reorganization provides that
the Company will merge with and into Val Cor, with Val Cor being the surviving
corporation (the "Holding Company Merger") and the Bank will merge with and into
Valley, with Valley being the surviving banking corporation (the "Bank Merger";
collectively the "Reorganization"). Upon consummation of the Reorganization, the
holders of each outstanding share of Company Common Stock will receive, in
exchange for each share of Company Common Stock, their pro rata share of the
Merger Consideration, consisting of shares of Zions Common Stock, no par value
("Zions Common Stock"). Upon consummation of the Reorganization, the shares of
Company Common Stock will be canceled and immediately converted into the right
for holders of Company Common Stock to receive, in exchange for each share of
Company Common Stock, that number of shares of Zions Common Stock calculated by
dividing the Merger Consideration of 710,000 shares of Zions Common Stock by the
total number of share of Company Common Stock issued and outstanding as of the
Effective Date (as defined in "Summary" above) of the Reorganization. In
accordance with this formula, the shareholders of the Company will receive
approximately .9484 of a share of Zions Common Stock for each share of Company
Common Stock.

         On December __, 1997, the closing price of Zions Common Stock was
$________ per share. On that date the Company had issued and outstanding 748,631
shares of its Common Stock. Assuming that the Reorganization had been
consummated as of December __, 1997 and the closing price of Zions Common Stock
had been $____ on that date, shareholders of the Company under such
circumstances would have received .9484 of a share of Zions Common Stock for
each share of Company Common Stock, or an equivalent value of $________ per
share of Company Common Stock.

Opinion of the Company's Financial Advisor

         In order to evaluate the Merger Consideration offered to the Company's
shareholders by Zions, the Company retained the investment banking firm, The
Wallach Company, Denver, Colorado ("Wallach Company") which is unrelated to the
Company or Zions or any of their respective affiliates, to render an opinion on
the fairness of Zions' offer from a financial point of view. The Company has
received an opinion from Wallach Company that the Merger Consideration to be
paid pursuant to the Plan of Reorganization is fair to the shareholders of the
Company from a financial point of view. The Company has also utilized the
services of Wallach Company to advise the Company Board of Directors with
respect to the Reorganization and to assist the Company in negotiating the terms
of the Plan of Reorganization. The opinion of Wallach Company is attached as
Appendix A to this Proxy Statement/Prospectus and should be read in its entirety
for information as to the matters considered and assumptions made in rendering
such opinion. See "Plan of Reorganization--Opinion of the Company's Financial
Advisor."

                                       16

<PAGE>


         THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY BELIEVES THAT THE
REORGANIZATION IS IN THE BEST INTERESTS OF THE SHAREHOLDERS OF THE COMPANY AND
RECOMMENDS THAT THE COMPANY SHAREHOLDERS VOTE TO APPROVE THE PLAN OF
REORGANIZATION.

Voting and Revocation of Proxies

         All properly executed proxies not theretofore revoked will be voted at
the Special Meeting or any postponements or adjournments thereof in accordance
with the instructions thereon. Company proxies which have been properly executed
but which contain no voting instructions will be voted in favor of approval of
the Plan of Reorganization. As to any other matter brought before the Special
Meeting and submitted to a shareholder vote, proxies will be voted in accordance
with the judgment of the proxyholders named thereon.

         A shareholder who has executed and returned a proxy may revoke it at
any time before it is voted by filing with the Secretary of the Company written
notice of such revocation or a later dated and properly executed proxy or by
attending the Special Meeting and voting in person. Attendance at the Special
Meeting will not, of itself, constitute a revocation of a proxy.

Solicitation of Proxies

         In addition to solicitation by mail, directors, officers and employees
of the Company may solicit proxies from the shareholders of the Company in
person or by telephone or otherwise for no additional compensation. The Company
will pay all expenses in connection with the printing and solicitation of
proxies for the Special Meeting. Zions will pay for all costs attributable to
registering the Zions Common Stock under applicable federal and state law. See
"Plan of Reorganization--Expenses."

                             PLAN OF REORGANIZATION

         This section of the Proxy Statement/Prospectus describes certain
important aspects of the Plan of Reorganization. The following description does
not purport to be complete and is qualified in its entirety by reference to the
Plan of Reorganization. The Plan of Reorganization has been filed with the SEC
as an exhibit to the Registration Statement. The Plan of Reorganization is
incorporated into this Proxy Statement/Prospectus by reference to such filing
and is available upon request to Dale M. Gibbons, Senior Vice President, Zions
Bancorporation. See "Available Information."

The Reorganization

         The Plan of Reorganization provides for the merger of the Company into
Val Cor, with Val Cor being the surviving corporation (the "Holding Company
Merger"), and for the merger of the Bank into Valley, with Valley being the
surviving entity (the "Bank Merger"). Val Cor is a bank holding company
incorporated in Colorado. Val Cor is a wholly-owned subsidiary of Zions. The
principal subsidiaries of Zions are Zions First National Bank with 112 offices
located throughout the state of Utah, as well as 15 offices in various
communities in Idaho and one foreign office, Nevada State Bank with 37 offices
in Nevada, and National Bank of Arizona with 28 offices in Arizona.
Additionally, in May 1997, Zions acquired Aspen Bancshares, Inc., whose
operations are conducted through 12 offices/branches in western Colorado and one
branch in northeastern New Mexico; on July 11, 1997, Zions also acquired Zions
Bank (formerly Tri-State Bank) in Montpelier, Idaho. Subsequent to the
acquisition by Zions of Zions Bank, Zions Bank acquired 10 branches from Wells
Fargo Bank, N.A., located in Idaho, and opened two de novo branches in Idaho;
Zions Bank currently operates 15 branches in Idaho; and in July 1997, Zions
completed its purchase of 27 former branches of Wells Fargo Bank in Arizona (11
branches), Idaho (10 branches), Nevada (5 branches), and Utah (1 branch). On
September 20, 1997, Zions Bank completed its acquisition of four additional
branches from Wells Fargo in Utah.

                                       17

<PAGE>


         Val Cor, a Colorado corporation, is a bank holding company registered
under the Bank Holding Company Act. Zions acquired Val Cor in May 1997 as a part
of the Aspen acquisition. Val Cor's principal asset consists of its ownership
interest in over 99% of the common stock of Valley.

         Valley is a national banking association organized in 1979. Valley
offers traditional banking services to customers in its primary market area of
Montezuma County, Colorado. Valley also conducts business through its two branch
offices located in Cortez and Dolores, Colorado.

         The Company is a bank holding company incorporated in Colorado. The
Company operates through its wholly-owned subsidiary, Tri-State Bank (the
"Bank"). The Bank operates a commercial banking business through two
offices/branches in Denver and Boulder, Colorado.

         Upon consummation of the Reorganization, the holders of each
outstanding share of Company Common Stock will receive, in exchange for each
share of Company Common Stock, their pro rata share of the Merger Consideration,
consisting of 710,000 shares of Zions Common Stock. The shares of Company Common
Stock will be canceled and immediately converted into the right for holders of
Company Common Stock to receive, in exchange for each share of Company Common
Stock, that number of shares of Zions Common Stock calculated by dividing the
Merger Consideration of 710,000 shares of Zions Common Stock by the total number
of shares of Company Common Stock issued and outstanding as of the Effective
Date of the Reorganization or approximately .9484 of a share of Zions Common
Stock for each share of Company Common Stock. Zions will not issue fractional
shares of its Common Stock in the Reorganization. In lieu of fractional shares
of Zions Common Stock, if any, each shareholder of the Company who is entitled
to a fractional share of Zions Common Stock will receive an amount of cash equal
to the product of such fraction times $40.625. Such fractional share of interest
will not include the right to vote or to receive dividends or any interest
thereon.

         On December __, 1997, the closing price of Zions Common Stock was
$_____ per share. On that date the Company had issued and outstanding 748,631
shares of its Common Stock. Assuming that the Reorganization had been
consummated as of December __, 1997 and the closing price of Zions Common Stock
had been $______ on that date, shareholders of the Company under such
circumstances would have received .9484 of a share of Zions Common Stock for
each share of Company Common Stock, or an equivalent value of $__________ per
share of Company Common Stock.


                                       18

<PAGE>


Background of and Reasons for the Reorganization

        Tri-State.

        Background. On April 1, 1997, the Wallach Company met with Richard C.
Tucker and his wife, Patricia T. Tucker, to present its analysis of valuation
and strategic options for the Company. Mr. Tucker is Chairman, President and
Chief Executive Officer of the Company and the Bank and, with his wife and
family, is a principal stockholder of the Company. Wallach Company was formally
engaged on April 10, 1997, to approach a selected group of prospective
purchasers, assist in structuring and negotiating a possible business
combination transaction, and render its opinion regarding the fairness, from a
financial point of view, of the consideration proposed to be paid to the
shareholders of the Company in such transaction.

        Wallach Company contacted six potential merger candidates to determine
their interest in the Company and based on discussions with Wallach Company,
four parties elected to receive additional information about the Company, meet
with management and submit indications of interest. An analysis of the proposals
was presented by Wallach Company to the Board in two meetings on September 9,
1997, and September 11, 1997. The Board engaged in a comprehensive discussion
and analysis of the following factors in determining with which merger candidate
to proceed: (a) the Board's obligation to maximize the benefit to the Company's
shareholders; (b) the market risk and opportunity associated with a
stock-for-stock transaction; (c) the wherewithal of the parties to complete the
transactions; (d) the tax consequences of the transaction to the Company's
shareholders; (e) the proposed terms of a definitive agreement; and (f) the
effect of the proposed transaction on employees, customers and the community.
After completing its analysis, the Board authorized moving forward with
negotiations with Zions.

        After negotiating the terms of a definitive agreement, the Board met
again on September 23, 1997, to review the agreement and consider the
transaction with Zions. The Board determined that the Zions offer would produce
the maximum benefit to the Company's shareholders based primarily upon its being
a stock-for-stock merger in which income taxes could be deferred, its being the
highest value in nominal terms, the good prospects for long-term growth in
Zion's stock, and Zion's history of completing acquisitions. Further, the Board
felt that the proposed transaction with Zions offered a greater likelihood of
stability in the operations of the Bank, thereby benefiting employees, customers
and the community. As a result, the Board authorized signing the definitive
merger agreement.

        The Company Board's Reasons for the Reorganization. The Company Board
believes that the Reorganization is fair to, and in the best interests of, the
Company and its shareholders. Accordingly, the Board unanimously approved the
Plan of Reorganization and recommends that the Company shareholders vote FOR the
approval and adoption of the Plan of Reorganization.

        In reaching its determination that the Reorganization is fair to, and in
the best interests of, the Company and its shareholders, the Board considered a
number of factors including, without limitation, the following:


                                       19

<PAGE>



         o       the current condition and growth prospects of the Company and
                 the Bank, their historical results of operations and their
                 prospective results of operations were the Company to remain
                 independent;

         o       the economic, business and competitive climate for banking and
                 financial institutions in Colorado, with special consideration
                 given to recent transactions that have increased the
                 competitive environment in the financial services and banking
                 industry, including the adoption by Congress of interstate
                 branch banking;

         o       the monetary value of the stock offered to the Company
                 shareholders by Zions (i) in absolute terms, (ii) as compared
                 to the value of other offers received by the Company by
                 qualified and informed potential acquirers, whose offers were
                 each less than Zions' offer, and (iii) as compared to recent
                 mergers and acquisitions involving other banking and financial
                 institutions in Colorado;

         o       the potential market value, liquidity and dividend yield of
                 Company Common Stock if the Company were to remain independent;

         o       the historically greater liquidity and dividend yield
                 represented by the Zions Common Stock to be received in the
                 Reorganization;

         o       the greater financial and management resources and customer
                 product offerings of Zions which could increase the
                 competitiveness of the combined institution in the Company's
                 market area and its ability to serve the depositors, customers
                 and communities currently served by the Company;

         o       the historical results of operations and financial condition of
                 Zions and the future prospects for Zions, including anticipated
                 benefits of the Reorganization;

         o       the future growth prospects of Zions following the
                 Reorganization; and

         o       the fact that the Reorganization will be a tax-free
                 reorganization to the Company shareholders for federal income
                 tax purposes with respect to shareholders of the Company who
                 receive shares of Zions Common Stock in the Reorganization (but
                 not with respect to any cash received in the Reorganization).

        THE COMPANY BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
APPROVAL OF THE PLAN OF REORGANIZATION.

        Zions. For Zions, the Reorganization will provide the opportunity to
continue its recent expansion. In acquiring the Company, Zions will be expanding
its presence into the Denver, Colorado market. Zions does not currently have any
offices in the Denver area. The expansion will be evidenced by Zions' both
broadening its geographical base in Colorado by establishing a presence in this
market and expanding the banking services it is able to provide. Additionally,
the Zions' expansion in the Denver, Colorado region will allow Zions further to
diversify its banking operations.

                                       20

<PAGE>


        The acquisition by Zions of the Company will bring together the
different skills and resources of the two organizations and, together with the
additional skills and resources available in the broader Zions organization,
will result in the ability to make a wider spectrum of banking services
available to consumers, businesses and professionals in the Company's geographic
area.

Voting Agreements

         In connection with the Plan of Reorganization, four shareholders of the
Company, whose common share holdings aggregate 100% of the outstanding Class A
Company Common Stock as of December __, 1997, and fifteen various shareholders
of the Company, including their affiliated entities, whose common share holdings
aggregate approximately 75.34% of the outstanding Class B Company Common Stock
as of December __, 1997, have entered into agreements with Zions under which
they have agreed, in their capacity as shareholders, to vote their shares in
favor of the Plan of Reorganization and to support the Plan of Reorganization
and to recommend its adoption by the other shareholders of the Company. Various
of such shareholders are officers and directors of the Company. All of the
directors and executive officers of the Company have so agreed. Such vote will
be sufficient to approve the Plan of Reorganization and the Reorganization. If
these individuals vote their shares of Company Common Stock in accordance with
the requirements of the voting agreements, approval of the Reorganization by the
Company shareholders is assured, notwithstanding the vote of other Company
shareholders.

        The voting agreements are applicable to the shareholders only in their
capacities as shareholders and do not legally affect the exercise of their
responsibilities if a member of the Board of Directors of the Company. The
shareholder-directors also agreed in their capacity as directors, until the
earlier of consummation of the Reorganization or termination of the Plan of
Reorganization, to refrain from soliciting or, subject to their fiduciary duties
to shareholders, negotiating or accepting any offer of merger, consolidation, or
acquisition of any of the shares or all or substantially all of the assets of
the Company or any of its subsidiaries.

        The form of the voting agreements has been filed with the SEC as an
exhibit to the Registration Statement and is incorporated herein by reference.
The foregoing summary of the agreements is qualified in its entirety by
reference to such filing.

Required Vote; Management Recommendation

        Approval of the Plan of Reorganization requires the affirmative vote of
the holders of two-thirds of the outstanding shares of Class A Company Common
Stock entitled to vote at the Special Meeting and of the holders of two-thirds
of the outstanding shares of Class B Company Common Stock entitled to vote at
the Special Meeting. The holders of Class A Company Common Stock and the holders
of Class B Company Common Stock will vote their respective shares of Company
Common Stock separately as a class. Because approval requires the affirmative
votes of two-thirds of all outstanding shares of each class of Company Common
Stock, a failure to vote, an abstention, or a broker's failure to vote shares
held in street name will have the same legal effect as a vote against approval
of the Plan of Reorganization. See "Voting Agreements" immediately above for a
discussion of the ownership of Company Common Stock by various officers,
directors, and shareholders of the Company. THE BOARD OF DIRECTORS OF THE
COMPANY UNANIMOUSLY RECOMMENDS THAT THE COMPANY SHAREHOLDERS VOTE "FOR" APPROVAL
OF THE PLAN OF REORGANIZATION.


                                       21

<PAGE>

        The Board of Directors of Zions has approved the Plan of Reorganization.
In addition, Zions, as the sole shareholder of Val Cor, has approved the merger
of Val Cor with the Company (the "Holding Company Merger"). Under the Utah
Business Corporation Act no approval of the Plan of Reorganization by the
shareholders of Zions is required.

Opinion of the Company's Financial Advisor

        The Company has received an opinion from Wallach Company that, as of the
date of this Proxy Statement/Prospectus, the Merger Consideration to be received
from Zions was fair to the Company's shareholders from a financial point of
view. The full text of Wallach Company's opinion dated as of the date of this
Proxy Statement/Prospectus, which sets forth matters considered in connection
with such opinion, is attached hereto as Appendix A and should be read in its
entirety by the Company's shareholders. This summary of the opinion is qualified
in its entirety by reference to the full text of the opinion.

        The Company's Board retained Wallach Company as its financial advisor on
the basis of the firm's experience and expertise with the financial services and
banking industry and with transactions similar to the Reorganization.

        In connection with delivering its fairness opinion, Wallach Company,
among other things, did the following:

              i.     reviewed certain financial statements and other financial
                     information of the Company;

              ii.    reviewed the current condition and growth prospects for the
                     Company and its subsidiary bank, including financial
                     projections prepared by the Company's management;

              iii.   discussed the past and current operations and financial
                     conditions and the prospects of the Company with the
                     Company's management;

              iv.    evaluated the economic, banking and competitive climate for
                     banking institutions in Colorado, with special
                     consideration given to recent transactions that may have
                     increased the competitive environment in the financial
                     services and banking industry;

              v.     reviewed the process used leading to the Zions offer,
                     including a review of the potential acquirors contacted and
                     their responses relative to a potential acquisition of the
                     Company;

              vi.    compared the various offers received from interested
                     parties and determined that the terms of the Agreement
                     represented the highest value in absolute terms;

                                       22

<PAGE>

              vii.   compared the Zions offer to recent transactions involving
                     other institutions of similar size, to the extent publicly
                     available;

              viii.  examined the price and trading activity for Zions;

              ix.    reviewed the implications for the Company shareholders
                     receiving Zions common stock with regards to prospects for
                     value, liquidity, dividend yield and growth;

              x.     met with Zions' management and reviewed certain publicly
                     available financial statements of Zions; and

              xi.    reviewed the Agreement.

              Neither Zions nor the Company imposed any limitations upon the
scope of the investigation performed by Wallach Company in formulating its
opinion. In rendering its opinion, Wallach Company did not independently verify
the asset quality and financial condition of Zions or the Company, but instead
relied upon the data provided by or on behalf of Zions and the Company to be
true and accurate in all material respects.

              Wallach Company relied without independent verification upon the
accuracy and completeness of all the financial and other information reviewed by
it for purposes of the fairness opinion. The fairness opinion is necessarily
based on information as of the date thereof. The fairness opinion is directed
only to the consideration to be received by the Company's shareholders for their
shares if the Reorganization is consummated and does not constitute a
recommendation to any Company shareholder as to how such shareholder should vote
at the Special Meeting.

              Following is a brief summary of the material analyses utilized by
Wallach Company in arriving at its fairness opinion. This summary does not
purport to be a complete description of the analyses performed by Wallach
Company.

              Implied Zions Offer Price. The closing stock price of Zions was
$41.125 on September 23, 1997, the date for which the Board of Directors
evaluated Zions' final proposal. Based on the anticipated Company/Zions exchange
ratio of .9484, the resulting Zions offer price for each share of the Company
Common Stock was $39.00. The implied multiple of trailing 12-month earnings of
the Company for the year ended June 30, 1997, was 15.9. The implied multiple of
book value at June 30, 1997, was 364.9%.

              Comparison with the Other Offers. Wallach Company compared the
Zions offer to the other offers received from three major bank holding
companies. The other offers involved stock-for-stock mergers, pursuant to which
the Company's shareholders would receive stock of the acquiror having a value
less than Zions' offer. Wallach Company's examination of the offers included,
but was not limited to, a comparison of pricing, the underlying securities and
the implications for liquidity.

                                       23

<PAGE>

              Analysis of Selected Bank Mergers. Wallach Company reviewed
publicly available information on the two bank merger and acquisition
transactions known by Wallach Company to have occurred since April 1, 1997, in
Colorado, for which Wallach Company believed the sellers were similar to the
Company in size, market and financial performance. Wallach Company compared
certain percentages and multiples implied by the Zions offer with comparable
percentages and multiples for these transactions. The average price offered in
the three transactions as a multiple of trailing earnings was 13.5 as compared
to 15.9 associated with the Zions offer at the time of the September 23 Company
Board of Directors Meeting. The average multiple of book value in these
transactions was 288.0% as compared to 364.3% associated with the Zions offer at
the time of the September 23 Company Board Meeting.

              Wallach Company also reviewed publicly available information on
four national bank merger and acquisition transactions known by Wallach Company
to have occurred since December 1, 1996, for which Wallach Company believed the
sellers were similar to the Company in size, market and financial performance.
Wallach Company compared certain percentages and multiples implied by the Zions
offer with comparable percentages and multiples for these transactions. The
average price offered in these transactions as a multiple of trailing earnings
was 13.1 as compared to 15.9 associated with the Zions offer at the time of the
September 23 Company Board of Directors Meeting. Since several of the acquired
companies had higher capital levels than the Company, Wallach Company chose to
use the adjusted capital method when comparing price to book value ratios. The
adjusted capital method adjusts the banks capital level to a normalized level of
7.5% of assets, under the assumption that an acquirer will not assign a multiple
of value for excess capital. The average multiple of adjusted book value in
these transactions was 244.5%, as compared to 364.3% associated with the Zions
offer at the time of the September 23 Company Board of Directors Meeting.

              Since the signing of the definitive merger agreement on September
23, 1997, one transaction in Colorado has been announced which, although not
directly comparable, should be noted. On November 7, 1997, Pioneer Bank of
Longmont announced its sale to Community First Bankshares. On December 9, 1997,
the price-to-earnings multiple was reported as 16.99 and the price-to-book value
multiple was reported as 424%.

              Zions Stock Trading History and Valuation. Wallach Company
examined the history of trading prices for Zions compared to a select group of
eight other large regional bank holding companies who are active in acquisitions
in the Rocky Mountain region. The "Index Group" is comprised of Banc One
Corporation, Community First Bankshares, First Security Corporation, KeyCorp,
Norwest Corporation, TCF Financial Corporation , U.S. Bancorp and Wells Fargo &
Co. Wallach Company also examined the valuation of Zions relative to the Index
Group in relation to earnings, book value, dividend yield and other factors. For
projected earnings Wallach Company used the average of published analyst
estimates. The analysis showed, among other things, that for the trailing
12-month period ended June 30, 1997, and projected 1997 and 1998 calendar years,
based on stock prices at September 23, 1997, the price to earnings ratio for
Zions was 22.9, 21.6 and 18.7, respectively, compared to 21.4, 18.1 and 15.2 for
the Index Group, respectively. Based on Zions stock price on September 23, 1997,
the price to book value for Zions was 419% compared to 320% for the Index Group
and the common dividend yield for Zions was 1.2% compared to 2.1% for the Index
Group. As of September 23, 1997, the consensus of research analysts' projections
of five years' earnings growth rate was 13.0% for Zions compared to 12.2% for
the Index Group. The return on average equity for the six months ended June 30,
1997, was 24.7% for Zions compared to 18.5% for the Index Group. The ratio of
equity to assets for Zions was 7.3% compared to 8.6% for the Index Group.

                                       24

<PAGE>

              Recent Zions Offer Price. The closing stock price of Zions common
stock was $43.00 on December 19, 1997, the date of Wallach Company's fairness
opinion. Based on the anticipated Company/Zions exchange ratio of .9484, the
resulting Zions offer price for each share of the Company's Common Stock was
$40.78. The implied multiple of trailing 12-month earnings of the Company for
the year ended June 30, 1997, was 16.6. The implied multiple of book value at
June 30, 1997, was 381.5%.

              Wallach Company is of the opinion that the Company/Zions Merger
Consideration is fair to the Company's shareholders from a financial point of
view.

              Wallach Company believes that its analyses and the summary set
forth above must be considered as a whole and that selecting portions of its
analyses and the factors considered by them could create an incomplete view of
the process underlying the preparation of its fairness opinion. No company or
transaction used in the company comparable transaction analysis is identical to
the Company, Zions or the Reorganization. Accordingly, in its analysis Wallach
Company used complex considerations and judgments concerning differences in
financial and operating characteristics of the companies and other factors that
could affect the public trading value or the acquisition value of the companies
to which they are being compared.

              For Wallach Company's services in connection with preparing a plan
for obtaining acquisition offers for the Company, soliciting and negotiating
such acquisition offers, rendering its opinion as to the fairness of the Merger
Consideration to the Company's shareholders from a financial point of view and
for certain other advisory services in connection therewith, the Company has
agreed to pay Wallach Company certain fees. Wallach Company will receive a cash
fee upon the effectiveness of the Reorganization equal to 2.25% of the first
$19.5 million and 4.50% of the amount in excess of $19.5 million received by the
Company's shareholders in the transaction based on the value of the Zions common
stock issued to the Company's shareholders in the Reorganization. From May 1997
to the effective date of the Reorganization, Wallach Company has or will receive
a monthly retainer of $7,500, which amounts will be credited against the
transaction fee due at the effectiveness of the Reorganization. Wallach Company
has also received reimbursement of its actual out-of-pocket expenses and the
Company has agreed to indemnify Wallach Company against certain liabilities,
including liabilities under securities laws.


                                       25

<PAGE>

Conversion of Company Shares

         Under the Plan of Reorganization, holders of shares of Company
Common Stock will receive shares of Zions Common Stock. Upon consummation of the
Reorganization, the shares of Company Common Stock will be canceled and
immediately converted into the right for holders of Company Common Stock to
receive, in exchange for each share of Company Common Stock, that number of
shares of Zions Common Stock calculated by dividing the Merger Consideration of
710,000 shares of Zions Common Stock by the total number of shares of Company
Common Stock issued and outstanding as of the Effective Date of the
Reorganization. In accordance with this formula, the shareholders of the Company
will receive approximately .9484 of a share of Zions Common Stock for each share
of Company Common Stock. Zions will not issue fractional shares of its common
stock in the Reorganization. In lieu of fractional shares of Zions Common Stock,
if any, each shareholder of the Company who is entitled to a fractional share of
Zions Common Stock will receive an amount of cash equal to the product of such
fraction times $40.625. Such fractional share interest will not include the
right to vote or to receive dividends or any interest thereon.

         On December , 1997, the closing price of Zions Common Stock was
$__________ per share. On that date the Company had _________ issued and
outstanding shares of its Common Stock. Assuming that the Reorganization had
been consummated as of December __, 1997 and the closing price of Zions Common
Stock had been $_____ on that date, shareholders of the Company under such
circumstances would have received .9484 of a share of Zions Common Stock for
each share of Company Common Stock, or an equivalent value of $ per share of
Company Common Stock.

         Exchange of Stock Certificates. Zions First National Bank, a national
banking association with its head office located in Salt Lake City, Utah and a
subsidiary of Zions ("Zions Bank"), is the exchange agent designated by the
parties in the Plan of Reorganization (the "Exchange Agent"), and as Exchange
Agent will, promptly after the Effective Date, mail to each holder of one or
more stock certificates formerly representing shares of Company Common Stock
except to such holders who shall have waived the notice of exchange, a notice
specifying the Effective Date and notifying such holder to surrender his or her
certificate or certificates to Zions Bank for exchange. Such notice will be
mailed to holders by regular mail at their addresses on the records of the
Company. Company shareholders should not send in their certificates until they
receive such written instructions. However, certificates should be surrendered
promptly after instructions to do so are received.

         Any dividends declared on Zions Common Stock after the Effective Date
of the Reorganization will apply to all whole shares of Zions Common Stock into
which shares of Company Common Stock will have been converted in the
Reorganization. However, no former Company shareholder will be entitled to
receive any such dividend until such shareholder's Company Common Stock
certificates have been surrendered for exchange as provided in the letter of
transmittal sent by the Exchange Agent. Upon such surrender, the shareholder
will be entitled to receive all such dividends payable on the whole shares of
Zions Common Stock represented by the surrendered certificate(s) (without
interest thereon and less the amount of taxes, if any, which may have in fact
been imposed or paid thereon).

         Payment for Fractional Shares. No fractional shares of Zions Common
Stock will be issued in connection with the Reorganization. Instead, each
Company shareholder who surrenders for exchange Company Common Stock
certificates representing a fraction of a share of Zions Common Stock will
receive, in addition to a certificate for the whole shares of Zions Common Stock
represented by the surrendered certificates, cash in an amount equal to the
product of such fraction times $40.625. Such fractional share interest will not
include the right to vote or to receive dividends or any interest thereon.

                                       26

<PAGE>

         Unexchanged Certificates. On the Effective Date of the Reorganization,
the stock transfer books of the Company will be closed, and no further transfers
of Company Common Stock will be made or recognized. Certificates for Company
Common Stock not surrendered for exchange will entitle the holder to receive,
upon surrender as provided in the letter of transmittal, a certificate for whole
shares of Zions Common Stock, plus payment of any amount for a fractional share
or dividends to which such holder is entitled as outlined above, and without any
interest thereon.

Federal Income Tax Consequences of the Reorganization

         The following discussion is a summary of the material federal income
tax consequences of the merger of the Company with and into Val Cor (herein, the
"Merger") to the Company and to the existing shareholders of the Company, but
does not purport to be a complete analysis of all the potential tax effects of
the Merger. The discussion is based upon the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations, Internal Revenue Service ("IRS")
rulings and judicial decisions now in effect, all of which are subject to change
at any time by legislative, judicial, or administrative action. Any such change
may be applied retroactively. No information is provided herein with respect to
foreign, state or local tax laws or estate and gift tax considerations.
Shareholders of the Company are urged to consult their own tax advisors as to
specific tax consequences to them of the Merger.

         The Company will receive an opinion from Baker & Hostetler LLP, special
counsel to the Company (the "Baker Opinion") that, based upon the facts and
representations set forth or referred to in such opinion, the Merger will be
treated for federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code. No ruling will be requested from the IRS with
respect to the federal income tax consequences of the Merger. An opinion of
counsel only represents counsel's best judgment and is not binding on the IRS or
the courts. Accordingly, no assurance can be given that the IRS will agree with
counsel's conclusions, that the IRS will not challenge the tax treatment of the
Merger, or that such a challenge, if made, will not be successful.

         Based upon the facts and representations which will be set forth or
referred to in the Baker Opinion, such opinion will provide, among other things,
that the Company will not recognize gain or loss for federal income tax purposes
upon the Merger and that the shareholders of the Company will have the following
federal income tax consequences upon the Merger: (i) no taxable gain or loss
will be recognized upon the receipt of Zions Common Stock; (ii) the tax basis of
the Company Common Stock surrendered in the Merger will be allocated to the
Zions Common Stock to be received in the Merger; (iii) the holding period of the
Zions Common Stock to be received in the Merger will include the holding period
of the Company Common Stock surrendered in exchange therefor; and (iv) if any
cash is received in lieu of a fractional share of Zions Common Stock, gain (or
loss) will be recognized in an amount equal to the difference between the cash
received and the shareholder's basis in that fractional share.

                                       27

<PAGE>

         The foregoing is intended only as a summary of certain federal income
tax consequences of the Reorganization under existing law and regulations, as
presently interpreted by judicial decisions and administrative rulings, all of
which are subject to change without notice, and any such change might be
retroactively applied to the Reorganization. Among other things, the summary
does not address state income tax consequences, local taxes, or the federal or
state income tax considerations that may affect the treatment of a shareholder
who acquired his Company Common Stock pursuant to an employee stock option or
other special circumstances. Accordingly, it is recommended that Company
shareholders consult their own tax advisors for specific advice concerning their
own tax situations, potential changes in the applicable tax law and all federal,
state and local tax matters in connection with the Reorganization.

         A copy of the Baker Opinion to be rendered as to the material federal
income tax consequences relating to the Reorganization is attached and set forth
in Appendix B of the Proxy Statement/Prospectus.

Rights of Dissenting Shareholders

         A holder of shares of Company Common Stock is entitled to exercise the
rights of a dissenting shareholder under the Colorado Business Corporation Act,
ss.ss. 7-113-101 et seq., to object to the Plan of Reorganization and make
written demand that Val Cor pay in cash the fair value of the shares of Company
Common Stock held as determined in accordance with such statutory provisions.
The following summary does not purport to be a complete statement of the
provisions of Colorado law and is qualified in its entirety by reference to such
statutory provisions, which are set forth in full as Appendix C to this Proxy
Statement/Prospectus.

         Colorado law requires that holders of Company Common Stock follow
certain prescribed procedures in the exercise of their statutory right to
dissent in connection with the Reorganization. The failure by a shareholder to
follow such procedures on a timely basis and in the precise manner required by
Colorado law may result in a loss of that shareholder's dissenters' rights.

         Overview. Holders of Company Common Stock have the right under the
Colorado Business Corporation Act to dissent from the Reorganization and obtain
payment of the fair value of their shares. Fair value means the value of the
shares immediately before the Effective Date, excluding any appreciation or
depreciation in anticipation of the corporate action except to the extent
exclusion would be inequitable. If Val Cor and a shareholder who has exercised
his or her right to dissent (a "Dissenting Shareholder") are not able to agree
on a fair value, Val Cor must petition a court in Denver County, Colorado for a
determination of fair value.

         Procedure for Dissenting. A shareholder wishing to dissent from the
Reorganization must deliver to the Company, before the Special Meeting, written
notice of his or her intent to demand payment for his or her shares if the
Reorganization is consummated. The written notice should be sent to the Company
at 616 East Speer Boulevard, Denver, Colorado 80203 long enough before the
Special Meeting so that the Company receives it before the Special Meeting. A
shareholder wishing to dissent must also not vote in favor of the
Reorganization. If a shareholder's written notice of intent to demand payment is
not received by the Company before the Special Meeting, or if the shareholder
votes in favor of the Reorganization, such shareholder will not have the right
to dissent and will be required to participate in the Reorganization.


                                       28

<PAGE>

         Within 10 days after the Effective Date, Val Cor will deliver to each
Dissenting Shareholder a written notice instructing the Dissenting Shareholder
to demand payment and send his or her Company Common Stock certificates to Val
Cor. The notice will include a form for demanding payment and will show the
deadline for submitting the payment demand form and the Company Common Stock
certificates. The form will also show the date that the Reorganization was first
announced to the news media or the shareholders, and the Dissenting Shareholder
will be required to state whether or not he or she acquired his or her shares
before that date.

         The Dissenting Shareholder must then properly complete and sign the
payment demand form, and submit it to Val Cor along with his or her Company
Common Stock certificates by the deadline shown in the notice from Val Cor. If
the payment demand form and the Company Common Stock certificates are not
submitted by the deadline, the shareholder will no longer be a Dissenting
Shareholder and will not be entitled to receive payment of the fair value of his
or her shares under the dissenters' rights provisions of Colorado law. Such a
shareholder will be required to participate in the Reorganization. The payment
demand form and Company Common Stock certificates should be sent to Val Cor at
350 W. Montezuma, Cortez, Colorado 81321.

         Payment for Shares. Within 30 days after receiving a Dissenting
Shareholder's payment demand form and Company Common Stock certificates, Val Cor
will pay such Dissenting Shareholder Val Cor's estimate of the fair value of the
Company Common Stock for which certificates were submitted, plus accrued
interest. Accompanying the payment will be financial information for the Company
as of the end of its most recent fiscal year, as well as the latest available
interim financial information. Also accompanying the payment will be a statement
of Val Cor's estimate of the fair value of the shares, an explanation of how the
interest was calculated, a statement of the Dissenting Shareholder's rights if
such shareholder is dissatisfied with Val Cor's payment, and a copy of the
relevant Colorado statute.

         If a Dissenting Shareholder estimates the fair value of his or her
shares and the amount of accrued interest to be higher than the amount paid by
Val Cor, the Dissenting Shareholder may send a notice to Val Cor demanding
payment of the difference between the Dissenting Shareholder's estimate and the
amount paid by Val Cor. The Dissenting Shareholder may reject Val Cor's offer to
pay fair value and demand payment of the Dissenting Shareholder's estimate of
the fair value of his or her shares and accrued interest. If a Dissenting
Shareholder does not send a notice demanding payment within 30 days after Val
Cor has made its payment or offer, the Dissenting Shareholder will not have the
right to receive any amount in excess of the fair value plus interest already
paid or offered by Val Cor.

         Court Proceeding to Determine Fair Value. If a demand for payment
remains unsettled for 60 days following Val Cor's receipt of the demand, Val Cor
may petition a court in Denver County to determine the fair value of the shares
and accrued interest. Court costs will be paid by Val Cor unless the court finds
that one or more Dissenting Shareholders acted arbitrarily, vexatiously or not
in good faith in demanding payment, in which case some or all court costs may be
allocated to such Dissenting Shareholder or Shareholders. Attorneys' and
experts' fees may be assessed against Val Cor if the court finds that Val Cor
did not comply with the applicable statute or acted arbitrarily, vexatiously or
not in good faith, or such fees may be assessed against one or more Dissenting
Shareholders if the same acted arbitrarily, vexatiously or not in good faith.


                                       29

<PAGE>

         Holders of Company Common Stock considering seeking appraisal by
exercising their dissenters' rights should be aware that the fair value of their
Company Common Stock determined pursuant to Colorado law could be more than, the
same as, or less than their pro rata share of the Merger Consideration that they
are entitled to receive pursuant to the Plan of Reorganization if they do not
seek appraisal of their Company Common Stock.

         THE FOREGOING DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE
PROCEDURES TO BE FOLLOWED BY HOLDERS OF COMPANY COMMON STOCK DESIRING TO
EXERCISE APPRAISAL RIGHTS AND, IN VIEW OF THE FACT THAT EXERCISE OF SUCH RIGHTS
REQUIRES STRICT ADHERENCE TO THE RELEVANT PROVISIONS OF THE COLORADO BUSINESS
CORPORATION ACT, EACH SHAREHOLDER WHO MAY DESIRE TO EXERCISE APPRAISAL RIGHTS IS
ADVISED INDIVIDUALLY TO CONSULT THE LAW (AS SET FORTH IN APPENDIX C TO THIS
PROXY STATEMENT/PROSPECTUS) AND COMPLY WITH THE PROVISIONS THEREOF.

         HOLDERS OF COMPANY COMMON STOCK WISHING TO EXERCISE DISSENTERS' RIGHTS
ARE ADVISED TO CONSULT THEIR OWN COUNSEL TO ENSURE THAT THEY FULLY AND PROPERLY
COMPLY WITH THE REQUIREMENTS OF COLORADO LAW.

Interests of Certain Persons in the Transaction

         The Plan of Reorganization provides that after the Reorganization
becomes effective, Richard C. Tucker, currently chairman, president and chief
executive officer of the Company and the Bank, will become an executive officer
of Valley. Mr. Tucker will enter into an Employment Agreement with Valley
effective as of the Effective Date. The Board of Directors of the Company was
aware of these interests when it considered and approved the Plan of
Reorganization. The terms of the agreement will continue until the first
anniversary of the commencement of the agreement. The agreement provides that
Mr. Tucker will receive an initial annual salary not less than the aggregate
salary paid to Mr. Tucker by the Bank as of June 30, 1997. Mr. Tucker will be
eligible to be considered for salary increases, upon review, and will be
entitled to other benefits normally afforded executive employees, including
employee benefit plan participation, retirement and life insurance policies, and
consideration for periodic raises, based upon performance and responsibility.

         The employment agreement provides for severance benefits for Mr. Tucker
upon the termination of his employment agreement for reasons other than his
death or disability or "for cause" (as defined in his employment agreement). In
the event of termination for reasons other than set forth in the preceding
sentence, Mr. Tucker will receive salary (as defined in the employment
agreement) payable at the rate established in his employment agreement for the
year in which termination occurs, payable until the first anniversary of the
commencement of the agreement. Mr. Tucker will also receive such rights as he
will have accrued as of the termination date of his employment under the terms
of any plans or arrangements in which he participates, reimbursement for
expenses accrued as of such termination date, and the cash equivalent of paid
annual leave and sick leave accrued as of such termination date.


                                       30

<PAGE>

         Under his employment agreement, Mr. Tucker has agreed that he will not
during the term of two years commencing with his employment by Valley pursuant
to the employment agreement (i) engage in the banking business other than on
behalf of Valley or its affiliates within a prescribed market area; (ii)
directly or indirectly own, manage, operate, control, be employed by, or provide
management or consulting services in any capacity to any firm, corporation, or
other entity (other than Valley or its affiliates) engaged in the banking
business in such market area, or (iii) directly or indirectly solicit or
otherwise intentionally cause any employee, officer, or member of the respective
Boards of Directors of Zions or Valley or any of their affiliates to engage in
any action prohibited under (i) or (ii) above. The employment agreement has
described the prescribed market area as the Colorado counties of Adams,
Arapahoe, Boulder, Denver, Douglas, Jefferson and Weld.

         Mr. Tucker's employment agreement further provides that for the period
of one year after the first anniversary of the commencement of the agreement,
Mr. Tucker will become a consultant of Valley. Mr. Tucker's duties as a
consultant will include efforts to retain Valley's customer relationships to
which Mr. Tucker devoted attention during and until the first anniversary of the
commencement of the agreement. Mr. Tucker will devote a minimum of the
equivalent of one day per week to his duties as a consultant. In consideration
for performing these consultancy services, Mr. Tucker will receive cash
compensation at a rate of $60,000 per annum, but will be entitled to no other
compensation or benefits from Valley.

Inconsistent Activities

         The Company has agreed in the Plan of Reorganization that unless and
until the Reorganization has been consummated or the Plan of Reorganization has
been terminated in accordance with its terms, neither the Company nor the Bank
will (i) solicit or encourage any inquiries or proposals by any third person to
acquire more than 1% of the Company Common Stock or any capital stock of the
Bank or any significant portion of the Company's or the Bank's assets (whether
by tender offer, merger, purchase of assets or otherwise), (ii) afford any third
party which may be considering any such transaction access to its properties,
books or records except as required by law, (iii) enter into any discussions,
negotiations, agreement or understanding with respect to any such transaction or
(iv) authorize or permit any of its directors, officers, employees or agents to
do any of the foregoing. If the Company or the Bank becomes aware of any offer
or proposed offer to acquire any of its shares or any significant portion of its
assets or of any other matter which could adversely affect the Plan of
Reorganization, the Holding Company Merger, or the Bank Merger, the Company and
the Bank are required to give immediate notice thereof to Zions and to keep
Zions informed of the matter.

Conduct of Business Pending the Reorganization

         The Plan of Reorganization contains covenants, representations and
warranties by the Company and the Bank as to matters which are typical in
transactions similar to the Reorganization.


                                       31

<PAGE>

         Prior to the Effective Date, the Company and the Bank have each agreed
that neither will without Zions' prior written consent: (i) declare or pay cash
dividends or property dividends with the exception of customary periodic cash
dividends paid by the Company or the Bank in a manner consistent with past
practice;(ii) declare or distribute any stock dividend, authorize any stock
split, authorize, issue or make any distribution of its capital stock or other
securities except for the issuance of Company Common Stock already subscribed
for or upon exercise of existing stock options, or grant any options to acquire
such securities; (iii) except as contemplated by the Plan of Reorganization,
merge into, consolidate with or sell its assets to any other person, or enter
into any other transaction or agree to effect any other transaction not in the
ordinary course of its business or engage in any discussions concerning such a
possible transaction; (iv) convert the charter or form of entity of the Bank to
any other charter or form of entity; (v) make any direct or indirect redemption,
purchase or other acquisition of any of its capital stock; (vi) incur any
liability or obligation, make any commitment or disbursement, acquire or dispose
of any property or asset, make any agreement or engage in any transaction, in an
amount exceeding $10,000, except in the ordinary course of its business; (vii)
subject any of its properties or assets to any lien, claim, charge, option or
encumbrance, except in the ordinary course of its business; (viii) institute or
agree to any increase in the compensation of any employee, except for ordinary
increases in accordance with past practices not to exceed (when aggregated with
all other such increases) 5% per annum of the aggregate payroll as of July 1,
1997; (ix) create or modify any pension or profit-sharing plan, bonus, deferred
compensation, death benefit or retirement plan, or the level of benefits under
any such plan, or increase or decrease any severance or termination pay benefit
or any other fringe benefit; (x) enter into any employment or personal services
contract with any person except to directly facilitate the Reorganization or to
hire one or more tellers, customer service representatives, or similar branch
personnel each of whose annual salary shall not exceed $25,000 and each of whose
hiring is necessary for normal bank operations; or (xi) purchase any loans or
loan-participation interests from, or participate in any loan originated by, any
person other than the Company or the Bank.

         The Company and the Bank have also agreed to carry on their businesses
and manage their assets and property diligently in the same manner as they have
previously done and to use their best efforts to preserve their business
organization. Pending completion of Reorganization or termination of the Plan of
Reorganization, the Company and the Bank have agreed to provide Zions with
certain information and reports and access to other information.

Conditions to the Reorganization

         The obligations of the Company, the Bank, Zions, Val Cor and Valley to
consummate the Reorganization are subject to, among other things, the
satisfaction of the following conditions: (i) the parties shall have received
all orders, consents and approvals from all requisite governmental authorities
for the completion of the Reorganization; (ii) the shareholders of the Company
and the Bank shall have authorized the Holding Company Merger and Bank Merger,
respectively; (iii) certain litigation, as specified in the Plan of
Reorganization, shall not have been instituted or threatened; (iv) Zions shall
have determined to its satisfaction that the Reorganization contemplated by the
Plan of Reorganization will be treated for accounting purposes as a "pooling of
interests" in accordance with APB Opinion No. 16; (v) the registration statement
to be filed by Zions pursuant to the Securities Act in connection with the
registration of the shares of Zions Common Stock to be used as consideration in
connection with the Reorganization shall have become effective under the
Securities Act, and Zions shall have received all required state securities laws
permits and other required authorizations or confirmations of the availability
of exemption from registration requirements necessary to issue Zions Common
Stock in the Reorganization, and neither the registration statement nor any such
required permit, authorization or confirmation shall be subject to a stop-order
or threatened stop-order by the SEC or any state securities authority; (vi) the
Company and Zions shall have determined that the Reorganization shall qualify as
a tax free reorganization under the Code and the regulations and rulings
promulgated thereunder; and (vii) there shall be no adverse legislation or
government regulation which would make the transaction contemplated impossible.

                                       32

<PAGE>


         The obligations of Zions, Val Cor and Valley to consummate the
Reorganization are subject to satisfaction or waiver of certain additional
conditions, including: (i) all representations and warranties made by the
Company and the Bank in the Plan of Reorganization shall be true and correct in
all material respects on the Effective Date and the Company and the Bank shall
have performed all of their respective obligations under the Plan of
Reorganization on or prior to the Effective Date; (ii) Baker & Hostetler LLP,
special counsel to the Company, shall have rendered a legal opinion to Zions in
form and substance as set forth in the Plan of Reorganization; (iii) Overton &
Feeley, P.C., counsel to the Company, shall have rendered a legal opinion to
Zions in form and substance as set forth in the Plan of Reorganization; (iv)
Zions shall have received a favorable opinion from litigation counsel for the
Company and the Bank substantially in form and substance as set forth in the
Plan of Reorganization; (v) the Company shall have delivered to Zions all
regulatory authorizations entitling the Bank to operate its branches; (vi)
during the period from June 30, 1997 to the Effective Date, there shall have
been no material adverse change in the financial position or results of
operations of the Company or the Bank nor shall the Company or the Bank have
sustained any material loss or damage to its properties which materially affects
its ability to conduct its business; (vii) on and as of the Effective Date the
consolidated net worth of the Company as determined in accordance with generally
accepted accounting principles shall not be less than the sum of (a) $8,002,474,
and (b) the aggregate contributions to capital caused by the payments
accompanying the exercise of any stock options on or after June 30, 1997; (viii)
on and as of the Effective Date, the aggregate reserve for loan losses of the
Bank as determined in accordance with generally accepted accounting principles
shall not be less than $1,077,457; (ix) the CRA rating of the Bank shall be no
lower than "satisfactory"; and (x) Mr. Tucker shall have entered into an
employment agreement with Valley in the form set forth in the Plan of
Reorganization.

         The obligations of the Company and the Bank to consummate the
Reorganization are subject to the satisfaction or waiver of certain additional
conditions, including: (i) the shareholders of Valley shall have authorized the
Bank Merger; (ii) all representations and warranties made by Zions, Val Cor and
Valley in the Plan of Reorganization shall be true and correct in all material
respects on the Effective Date and Zions, Val Cor and Valley shall have
performed all of their respective obligations under the Plan of Reorganization
on or prior to the Effective Date; (iii) receipt of a legal opinion of Duane,
Morris & Heckscher LLP, special counsel to Zions, in form and substance as set
forth in the Plan of Reorganization; (iv) receipt of a fairness opinion of
Wallach Company, investment bankers; (v) during the period from June 30, 1997 to
the Effective Date, there shall be no material adverse change in the financial
position or results of operations of Zions nor shall Zions have sustained any
material loss or damage to its properties which materially affects its ability
to conduct its business; and (vi) Zions Common Stock shall be quoted on NASDAQ
or shall be listed on a national securities exchange.


                                       33

<PAGE>

Representations and Warranties

         The representations and warranties of Zions, Val Cor, Valley, the
Company and the Bank contained in the Plan of Reorganization relate, among other
things, to the organization and good standing of the parties; the capitalization
of the parties; the authorization by the parties of the Plan of Reorganization
and the absence of conflict with laws or other agreements; the accuracy and
completeness of the financial statements and other information furnished to the
other party; the absence of material adverse changes since June 30, 1997 with
respect to Zions, the Company and the Bank; the absence of undisclosed
liabilities; and compliance with laws. The Company has additionally warranted
that there has been since June 30, 1997 no material deterioration in the quality
of its consolidated loan portfolio and no material increase in the consolidated
level of its nonperforming assets or non-accrual loans or in the level of its
consolidated provision for credit losses or its consolidated reserve for
possible credit losses. The Company has also warranted that its consolidated
reserve for possible credit losses is adequate to absorb reasonably anticipated
losses in the consolidated loan and lease portfolios of the Company in view of
the size and character of such portfolios, current economic conditions, and
other factors.

         Zions and the Company have additionally warranted that there are no
facts known to them respectively which reasonably might materially adversely
affect their respective business, assets, liabilities, financial condition,
results of operations or prospects which have not been disclosed in their
respective financial statements or a certificate delivered to the other party.

Amendment and Waiver

         Notwithstanding prior approval by the shareholders of the Company or
Valley, the Plan of Reorganization may be amended in any respect by written
agreement between the parties, except that after such shareholder approval no
amendment may prejudice the economic interests of the shareholders of the
Company or Valley unless shareholder approval of the amendment is procured.
Zions or the Company may also, at any time prior to the Effective Date, waive
any condition or term of the Plan of Reorganization provided that any such
waiver must be in writing signed by the party entitled to the benefit thereof
and will be permitted only if it will not have a materially adverse effect on
the benefits intended under the Plan of Reorganization to the shareholders of
its or his corporation.

Authorized Termination and Damages for Breach

         The Plan of Reorganization may be terminated and abandoned at any time
prior to the Effective Date, notwithstanding approval of the shareholders of the
Company and Valley, as follows: (i) by mutual consent of the parties to the Plan
of Reorganization; (ii) unilaterally, by Zions if any of the representations and
warranties by the Company or the Bank was materially incorrect when made or in
the event of a material breach or material failure by the Company or the Bank of
any covenant or agreement of the Company or the Bank which has not been, or
cannot be, cured within thirty days after written notice has been given; (iii)
unilaterally, by the Company if any of the representations and warranties of
Zions, Val Cor or Valley was materially incorrect when made or in the event of a
material breach or material failure by Zions, Cal Cor or Valley of any covenant
or agreement of Zions, Val Cor or Valley contained in the Plan of Reorganization
which has not been, or cannot be, cured within thirty days after written notice
has been given; (iv) by either the Company or Zions if the Holding Company
Merger has become inadvisable or impracticable by reason of federal or state
litigation to restrain or invalidate the transactions contemplated by the Plan
of Reorganization; or (v) by any party on or after June 30, 1998, if the
Effective Date has not occurred on or before that date.


                                       34

<PAGE>

         If either party terminates the Plan of Reorganization because any of
the representations and warranties of a party was materially incorrect when
made, or because of a material breach or material failure by a party of a
covenant or agreement made under the Plan of Reorganization, then such party
whose representations and warranties were materially incorrect or who materially
breached or failed to perform its covenant or agreement shall be liable to the
other party or parties to the Plan of Reorganization not affiliated with it in
the amount of the actual, reasonable out-of-pocket expenses, not to exceed
$250,000.

Restrictions on Resales by Company Affiliates

         The shares of Zions Common Stock issuable in the Reorganization have
been registered under the Securities Act, and such shares will generally be
freely tradable by Company shareholders who receive Zions shares as a result of
the Reorganization. However, the registration does not cover resales by Company
shareholders who may be deemed to control, controlled by, or be under common
control with the Company or Zions and who therefore may be deemed "affiliates"
of the Company or Zions as that term is defined in Rule 144 under the Securities
Act. Such affiliates are not permitted to sell their shares of Zions Common
Stock acquired in the Reorganization except pursuant to (i) an effective
registration statement under the Securities Act covering the shares to be sold;
(ii) the conditions contemplated by Rules 144 and 145 under the Securities Act;
or (iii) another applicable exemption from the registration requirements of the
Securities Act. The management of the Company will notify those persons who it
believes may be such affiliates.

Expenses

         Each party to the Plan of Reorganization will pay its own expenses,
including those of its own counsel, accountants, and tax advisors, incurred in
connection with the Plan of Reorganization. The Company will pay the cost of
printing and delivering this Proxy Statement/Prospectus and other material to
the Company shareholders. Zions will pay the costs attributable to registering
its stock issuable pursuant to this Proxy Statement/Prospectus under federal and
state securities laws.

Government Approvals

         Applications for approval (or requests for waiver of application
requirements) of the Reorganization must be made to, and approvals and consents
must be obtained from, appropriate federal, Utah, and Colorado regulators,
including the Board of Governors, the Comptroller, the Commissioner, and the
Division. Submissions have been made to each of these regulatory authorities.
Federal law prohibits consummation of the Reorganization until thirty days after
the approvals of the federal regulators have been obtained, except that this
period may be shortened with the concurrence of the Attorney General of the
United States. Regulatory approvals have not yet been obtained.


                                       35

<PAGE>

Effective Date of the Reorganization

         It is presently anticipated that if the Plan of Reorganization is
approved by the shareholders of the Company, the Reorganization will become
effective in the first quarter of 1998. However, as noted above, consummation of
the Reorganization is subject to the satisfaction of a number of conditions,
some of which cannot be waived. There can be no assurance that all conditions to
the Reorganization will be satisfied or, if satisfied, that they will be
satisfied in time to permit the Reorganization to become effective in the first
quarter of 1998. In addition, as also noted above, Zions and the Company retain
the power to abandon the Reorganization or to extend the time for performance of
conditions or obligations necessary to its consummation, notwithstanding prior
shareholder approval.

Accounting Treatment

         The Reorganization will be treated for accounting purposes as a
"pooling of interests" in accordance with ABP Opinion No. 16. A condition to
consummation of the Plan of Reorganization is that Zions shall have received a
letter to the above effect from KPMG Peat Marwick, LLP, certified public
accountants. This method of accounting views the Reorganization as a uniting of
the separate ownership interests through an exchange of shares. As such, the pro
forma financial information represents the combined historical financial data of
Zions and the Company, subject only to certain adjustments described in the
notes to the data presented.

Relationship Between Zions and the Company

         Neither Zions nor the Company is aware of any material relationship
between Zions, its directors or officers or their affiliates, and the Company,
its directors or executive officers or their affiliates, except as contemplated
by the Plan of Reorganization or as described herein.

Unaudited Pro Forma Condensed Combined Financial Information

         The following unaudited pro forma condensed combined financial
information reflects the application of the pooling of interests method of
accounting. The following tables, which show comparative historical per Common
Share data for Zions and the Company (separately and pro-forma combined) and
equivalent pro-forma per share data for the Company, should be read in
conjunction with the financial information included herein or incorporated
herein by reference to other documents. The pro-forma data in the table,
presented as of and for each of the years in the three year period ended
December 31, 1996, and as of and for the nine months ended September 30, 1997,
are presented for comparative and illustrative purposes only and are not
necessarily indicative of the combined financial position or results of
operations in the future or what the combined financial position or results of
operations would have been had the Reorganization been consummated during the
periods or as of the dates for which the information in the table is presented.


                                       36
<PAGE>

<TABLE>
<CAPTION>
                                              Historical                           Pro Forma
                                        -----------------------         ------------------------------
                                                                        Zions and
                                                                        Tri-State         Tri-State
                                                                        Pro-Forma         Equivalent
Per Common Share                        Zions         Tri-State         Combined(4)       Pro-Forma(5)
- ----------------                        -----         ---------         -----------       ------------
<S>                                     <C>            <C>               <C>               <C>
NET INCOME(1)
 For the nine months
 ended September 30, 1997               $1.41          $ 2.11            $ 1.42            $ 1.35

 For the years ended
 December 31, 1996                       1.71            2.45              1.72              1.63
 December 31, 1995                       1.38            1.66              1.39              1.32
 December 31, 1994                       1.09            1.21              1.09              1.03

CASH DIVIDENDS(2)
 For the nine months
 ended September 30, 1997               $ .35          $  .30            $  .35            $  .33

 For the years ended
 December 31, 1996                        .43             .30               .43               .41
 December 31, 1995                        .35             .15               .35               .33
 December 31, 1994                        .29             .15               .29               .28


BOOK VALUE:(3)
 As of September 30, 1997               $9.78          $11.37            $ 9.81            $ 9.30

 As of December 31, 1996                 8.61            9.58              8.63              8.18
       December 31, 1995                 7.36            7.41              7.36              6.98
       December 31, 1994                 6.28            5.71              6.28              5.96
</TABLE>

- -----------------
(1)  Net income per share is based on weighted average common and common
     equivalent shares outstanding.
(2)  Pro forma cash dividends per share represent historical cash dividends of
     Zions.
(3)  Book value per common share is based on total period-end of shareholders'
     equity.
(4)  Pro forma combined net income per share represents historical net income of
     Zions and the Company computed using historical weighted average common and
     common equivalent shares of Zions adjusted by computed common and common
     equivalent shares to be issued in the transaction. Pro forma combined book
     value per share represents historical total shareholders' equity of Zions
     and the Company computed using Zions' historical common shares outstanding
     adjusted by computed common shares to be issued in the transaction.
(5)  Pro forma equivalent amounts are computed by multiplying the pro forma
     combined amounts by the exchange ratio of one share of Company Common Stock
     for each .9484 of a share of Zions Common Stock.



                                       37
<PAGE>

                           SUPERVISION AND REGULATION

         The information contained in this section summarizes portions of the
applicable laws and regulations relating to the supervision and regulation of
Zions and its subsidiaries. These summaries do not purport to be complete, and
they are qualified in their entirety by reference to the particular statutes and
regulations described.

Zions

         Zions is a bank holding company within the meaning of the Bank Holding
Company Act and is registered as such with the Board of Governors. Under the
current terms of that Act, Zions' activities, and those of companies which it
controls or in which it holds more than 5% of the voting stock, are limited to
banking or managing or controlling banks or furnishing services to or performing
services for its subsidiaries, or any other activity which the Board of
Governors determines to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto. In making such
determinations, the Board of Governors is required to consider whether the
performance of such activities by a bank holding company or its subsidiaries can
reasonably be expected to produce benefits to the public such as greater
convenience, increased competition or gains in efficiency that outweigh possible
adverse effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest or unsound banking practices.

         Bank holding companies, such as Zions, are required to obtain prior
approval of the Board of Governors to engage in any new activity or to acquire
more than 5% of any class of voting stock of any company. Pursuant to the
Riegle-Neal Interstate Branching and Efficiency Act of 1994, as amended
("Riegle-Neal Act"), subject to approval by the Board of Governors, bank holding
companies are authorized to acquire either control of, or substantial assets of,
a bank located outside the bank holding company's home state. These acquisitions
are subject to limitations, the most significant of which include adequate
capitalization and management of the acquiring bank holding company, existence
of the acquired bank for up to five years before purchase where required under
state law, existence of state laws that condition acquisitions on institutions
making assets available to a "state-sponsored housing entity," limitations on
control by the acquiring bank holding company of not more than 10% of the total
amount of deposits in insured depository institutions in the United States or
not more than 30% of the deposits in insured depository institutions within that
state. States may impose more stringent deposit concentration limits, so long as
those limits apply to all bank holding companies equally. The Riegle-Neal Act
reaffirms the right of states to segregate and tax separately incorporated
subsidiaries of a bank or bank holding company. The Riegle-Neal Act also affects
interstate branching and mergers.
See "Interstate Banking" below.

         The Board of Governors is authorized to adopt regulations affecting
various aspects of bank holding companies. Pursuant to the general supervisory
authority of the Bank Holding Company Act and directives set forth in the
International Lending Supervision Act of 1983, the Board of Governors has
adopted capital adequacy guidelines prescribing both risk-based capital and
leverage ratios.




                                       38
<PAGE>

Regulatory Capital Requirements

         Risk-Based Capital Guidelines. The Board of Governors has established
risk-based capital guidelines for bank holding companies. The guidelines define
Tier 1 Capital and Total Capital. Tier 1 Capital consists of common and
qualifying preferred shareholders' equity and minority interests in equity
accounts of consolidated subsidiaries, less goodwill and 50% (and in some cases
up to 100%) of investment in unconsolidated subsidiaries. Total Capital consists
of Tier 1 Capital plus qualifying mandatory convertible debt, perpetual debt,
certain hybrid capital instruments, certain preferred stock not qualifying as
Tier 1 Capital, subordinated and other qualifying term debt up to specified
limits, and a portion of the allowance for credit losses, less investments in
unconsolidated subsidiaries and in other designated subsidiaries or other
associated companies at the discretion of the Board of Governors, certain
intangible assets, a portion of limited-life capital instruments approaching
maturity and reciprocal holdings of banking organizations' capital instruments.
The Tier 1 component must constitute at least 50% of qualifying Total Capital.

         Risk-based capital ratios are calculated with reference to
risk-weighted assets, which include both on-balance sheet and off-balance sheet
exposures. The risk-based capital framework contains four risk weight categories
for bank holding company assets -- 0%, 20%, 50% and 100%. Zero percent
risk-weighted assets include, generally, cash and balances due from federal
reserve banks and obligations unconditionally guaranteed by the U.S. government
or its agencies. Twenty percent risk-weighted assets include, generally, claims
on U.S. banks and obligations guaranteed by U.S. government sponsored agencies
as well as general obligations of states or other political subdivisions of the
United States. Fifty percent risk-weighted assets include, generally, loans
fully secured by first liens on one-to-four family residential properties,
subject to certain conditions. All assets not included in the foregoing
categories are assigned to the 100% risk-weighted category, including loans to
commercial and other borrowers. As of year-end 1992, the minimum required ratio
for qualifying Total Capital became 8%, of which at least 4% must consist of
Tier 1 Capital. At December 31, 1996, Zions' Tier 1 and Total Capital ratios
were 14.38% and 18.31%, respectively.

         The current risk-based capital ratio analysis establishes minimum
supervisory guidelines and standards. It does not evaluate all factors affecting
an organization's financial condition. Factors which are not evaluated include
(i) overall interest rate exposure; (ii) quality and level of earnings; (iii)
investment or loan portfolio concentrations; (iv) quality of loans and
investments; (v) the effectiveness of loan and investment policies; (vi) certain
risks arising from nontraditional activities; and (vii) management's overall
ability to monitor and control other financial and operating risks, including
the risks presented by concentrations of credit and nontraditional activities.
The capital adequacy assessment of federal bank regulators will, however,
continue to include analyses of the foregoing considerations and in particular,
the level and severity of problem and classified assets. Market risk of a
banking organization -- risk of loss stemming from movements in market prices --
is not evaluated under the current risk-based capital ratio analysis (and is
therefore analyzed by the bank regulators through a general assessment of an
organization's capital adequacy) unless trading activities constitute 10 percent
or $1 billion or more of the assets of such organization. Such an organization
(unless exempted by the banking regulators) and certain other banking
organizations designated by the banking regulators must, beginning on or before
January 1, 1998, include in its risk-based capital ratio analysis charges for,
and hold capital against, general market risk of all positions held in its
trading account and of foreign exchange and commodity positions wherever
located, as well as against specific risk of debt and equity positions located
in its trading account. Currently, Zions does not calculate a risk-based capital
charge for its market risk.



                                       39
<PAGE>

          The following table presents Zions' regulatory capital position at
September 30, 1997 under the risk-based capital guidelines.

                               Risk-Based Capital
                             (Dollars in thousands)

                                                                    Percent
                                                                    of Risk-
                                                                    Adjusted
                                                     Amount          Assets
                                                     ------          ------
Tier 1 Capital.............................         $ 596,625         12.45%
Minimum Requirement........................           191,706          4.00
                                                    ---------         -----
  Excess...................................         $ 404,919          8.45%
                                                    =========         =====

Total Capital..............................         $ 725,036         15.13%
Minimum Requirement........................           383,412          8.00
                                                    ---------         -----
  Excess...................................         $ 341,624          7.13%
                                                    =========         =====

Risk-Adjusted Assets,
  net of goodwill, excess deferred
  tax assets and excess allowance..........        $4,792,652        100.00%
                                                   ==========        ======


Minimum Leverage Ratio. The Board of Governors has adopted capital standards and
leverage capital guidelines that include a minimum leverage ratio of 3% Tier 1
Capital to total assets (the "leverage ratio"). The leverage ratio is used in
tandem with a risk-based ratio of 8% that took effect at the end of 1992. At
September 30, 1997, Zions' leverage ratio was 6.96%.

         The Board of Governors has emphasized that the leverage ratio
constitutes a minimum requirement for well-run banking organizations having
well-diversified risk, including no undue interest rate exposure, excellent
asset quality, high liquidity, good earnings, and a composite rating of 1 under
the Interagency Bank Rating System. Banking organizations experiencing or
anticipating significant growth, as well as those organizations which do not
exhibit the characteristics of a strong, well-run banking organization described
above, will be required to maintain strong capital positions substantially above
the minimum supervisory levels without significant reliance on intangible
assets. Furthermore, the Board of Governors has indicated that it will consider
a "tangible Tier I Capital Leverage Ratio" (deducting all intangibles) and other
indices of capital strength in evaluating proposals for expansion or new
activities.


                                       40
<PAGE>


         The following table presents Zions' leverage ratio at September 30,
1997. A leverage ratio of 3% will be the minimum required for the most highly
rated banking organizations, and according to the Board of Governors, other
banking organizations would be expected to maintain capital at higher levels.

                                                  (Dollars in thousands)

                                                                   Percent
                                                                 of Average
                                                                 Assets, Net
                                                  Amount         of Goodwill
                                                  ------         -----------
Tier 1 Capital.............................     $  596,625           6.96%
Minimum Requirement........................        257,122           3.00
                                                ----------         ------

Excess.....................................     $  339,503           3.96%
                                                ==========         ======

Average Assets, net of goodwill and
  deferred tax assets......................     $8,570,738         100.00%
                                                ==========         ====== 


         Other Issues and Developments Relating to Regulatory Capital. Pursuant
to such authority and directives set forth in the International Lending
Supervision Act of 1983, the Comptroller, the FDIC and the Board of Governors
have issued regulations establishing the capital requirements for banks under
federal law. The regulations, which apply to Zions' banking subsidiaries,
establish minimum risk-based and leverage ratios which are substantially similar
to those applicable to Zions.

         The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") requires the federal banking regulators to take "prompt corrective
action" in respect of banks that do not meet minimum capital requirements and
imposes certain restrictions upon banks which meet minimum capital requirements
but are not "well capitalized" for purposes of FDICIA. FDICIA establishes five
capital tiers: "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized," and "critically undercapitalized."
Implementing regulations adopted by the federal banking agencies define the
capital categories for banks which will determine the necessity for prompt
corrective action by the federal banking agencies. A bank may be placed in a
capitalization category that is lower than is indicated by its capital position
if it receives an unsatisfactory examination rating with respect to certain
matters except that it may not be categorized as critically undercapitalized
unless actually indicated by its capital position.

         Failure to meet capital guidelines could subject a bank to a variety of
restrictions and enforcement remedies. All insured banks are generally
prohibited from making any capital distributions and from paying management fees
to persons having control of the bank where such payments would cause the bank
to be undercapitalized. Holding companies of critically undercapitalized,
significantly undercapitalized and certain undercapitalized banks are required
to obtain the approval of the Board of Governors before paying capital
distributions to their shareholders. Moreover, a bank that is not well
capitalized is generally subject to various restrictions on "pass through"
insurance coverage for certain of its accounts and is generally prohibited from
accepting brokered deposits and offering interest rates on any deposits
significantly higher than the prevailing rate in its normal market area or
nationally (depending upon where the deposits are solicited). Such banks and
their holding companies are also required to obtain regulatory approval prior to
their retention of senior executive officers.


                                       41
<PAGE>


         Banks which are classified undercapitalized, significantly
undercapitalized or critically undercapitalized are required to submit capital
restoration plans satisfactory to their federal banking regulator and guaranteed
within stated limits by companies having control of such banks (i.e., to the
extent of the lesser of five percent of the institution's total assets at the
time it became undercapitalized or the amount necessary to bring the institution
into compliance with all applicable capital standards as of the time the
institution fails to comply with its capital restoration plan, until the
institution is adequately capitalized on average during each of four consecutive
calendar quarters), and are subject to regulatory monitoring and various
restrictions on their operations and activities, including those upon asset
growth, acquisitions, branching and entry into new lines of business and may be
required to divest themselves of or liquidate subsidiaries under certain
circumstances. Holding companies of such institutions may be required to divest
themselves of such institutions or divest themselves of or liquidate
nondepository affiliates under certain circumstances. Critically
undercapitalized institutions are also prohibited from making payments of
principal and interest on debt subordinated to the claims of general creditors
as well as to the mandatory appointment of a conservator or receiver within 90
days of becoming critically undercapitalized unless periodic determinations are
made by the appropriate federal banking agency, with the concurrence of the
FDIC, that forbearance from such action would better protect the affected
deposit insurance fund. Unless appropriate findings and certifications are made
by the appropriate federal banking agency with the concurrence of the FDIC, a
critically undercapitalized institution must be placed in receivership if it
remains critically undercapitalized on average during the calendar quarter
beginning 270 days after the date it became critically undercapitalized.

Other Regulatory and Supervisory Issues

         Pursuant to FDICIA, the federal banking agencies have adopted
regulations or guidelines prescribing standards for safety and soundness of
insured banks and in some instances their holding companies, including standards
relating to internal controls, information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, fees and benefits, asset quality and earnings, as well as other
operational and managerial standards deemed appropriate by the agencies. Upon a
determination by a federal banking agency that an insured bank has failed to
satisfy any such standard, the bank will be required to file an acceptable plan
to correct the deficiency. If the bank fails to submit or implement an
acceptable plan, the federal banking agency may, and in some instances must,
issue an order requiring the institution to correct the deficiency, restrict its
asset growth or increase its ratio of tangible equity to assets, or imposing
other operating restrictions.



                                       42
<PAGE>

         FDICIA also contains provisions which, among other things, restrict
investments and activities as principal by state nonmember banks to those
eligible for national banks, impose limitations on deposit account balance
determinations for the purpose of the calculation of interest, and require the
federal banking regulators to prescribe, implement or modify standards for
extensions of credit secured by liens on interests in real estate or made for
the purpose of financing construction of a building or other improvements to
real estate, loans to bank insiders, regulatory accounting and reports, internal
control reports, independent audits, exposure on interbank liabilities,
contractual arrangements under which institutions receive goods, products or
services, deposit account-related disclosures and advertising as well as to
impose restrictions on federal reserve discount window advances for certain
institutions and to require that insured depository institutions generally be
examined on-site by federal or state personnel at least once every 12 months.

         In connection with an institutional failure or FDIC rescue of a
financial institution, the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 ("FIRREA") grants to the FDIC the right, in many
situations, to charge its actual or anticipated losses against commonly
controlled depository institution affiliates of the failed or rescued
institution (although not against a bank holding company itself).

         The nature of the banking and financial services industry, as well as
banking regulation, may be further affected by various legislative and
regulatory measures currently under consideration. The most important of such
measures include legislation designed to permit increased affiliations between
commercial and financial firms (including securities firms) and
federally-insured banks, reduce regulatory burdens on financial institutions and
eliminate or revise the features of the specialized savings association charter.
It is impossible to predict whether or in what form these proposals may be
adopted in the future and, if adopted, what the effect of their adoption will be
on the Zions or its subsidiaries.

Deposit Insurance and Other Assessments

         Insured banks (including the bank subsidiaries of Zions) are required
to make quarterly deposit insurance assessment payments to the Bank Insurance
Fund (the "BIF"), and most savings associations to the Savings Association
Insurance Fund (the "SAIF"), under a risk-based assessment system established by
the FDIC. (In addition, certain banks must also pay deposit insurance
assessments to the SAIF and certain savings associations, to the BIF alone or to
both funds.) Under this system, each institution's insurance assessment rate is
determined by the risk assessment classification into which it has been placed
by the FDIC. The FDIC places each insured institution in one of nine risk
assessment classifications based upon its level of capital and supervisory
evaluations by its regulators: "well capitalized," "adequately capitalized" or
"less than adequately capitalized" institutions, with each category of
institution divided into subcategories of institutions which are either
"healthy," of "supervisory concern" or of "substantial supervisory concern."
Those institutions deemed weakest by the FDIC are subject to the highest
assessment rates; those deemed strongest are subject to the lowest assessment
rates. The FDIC establishes semi-annual assessment rates with the objective of
enabling the affected insurance fund to achieve or maintain a
statutorily-mandated target reserve ratio of 1.25% of insured deposits. In
establishing assessment rates, the FDIC Board of Directors is required to
consider (i) expected operating expenses, case resolution expenditures and
income of the FDIC; (ii) the effect of assessments upon members' earnings and
capital; and (iii) any other factors deemed appropriate by it.



                                       43
<PAGE>

         Until December 31, 1997, both BIF- and SAIF-assessable deposits will be
subject to an assessment schedule providing for an assessment range of 0% to
 .27% (with intermediate rates of .03%, .10%, .17% and .24%, depending upon an
institution's supervisory risk group). Both BIF and SAIF assessment rates are
subject to semi-annual adjustment by the FDIC Board of Directors within a range
of up to five basis points without public comment. The FDIC Board of Directors
also possesses authority to impose special assessments from time to time.

         In addition to the payment of deposit insurance assessments, depository
institutions are required to make quarterly assessment payments to the FDIC on
both their BIF and SAIF assessable deposits which will be paid to the Financing
Corporation to enable it to pay interest and certain other expenses on bonds
which it issued pursuant to FIRREA to facilitate the resolution of failed
savings associations. Pursuant to the Federal Home Loan Bank Act, the Financing
Corporation, with the approval of the FDIC Board of Directors, establishes
assessment rates based upon estimates of (i) expected operating expenses, case
resolution expenditures and income of the Financing Corporation; (ii) the effect
of assessments upon members' earnings and capital; and (iii) any other factors
deemed appropriate by it. Additionally, the Financing Corporation is required to
assess BIF-assessable deposits at a rate one-fifth the rate applicable to
SAIF-assessable deposits until the first to occur of the merger of the BIF and
SAIF funds or January 1, 2000. Assessment rates for the second semi-annual
period of 1997 have been set at .63 basis points annually for BIF-assessable
deposits and 3.15 basis points annually for SAIF-assessable deposits, subject to
quarterly review and adjustment.

Interstate Banking

         Existing laws and various regulatory developments have allowed
financial institutions to conduct significant activities on an interstate basis
for a number of years. During recent years, a number of financial institutions
have expanded their out-of-state activities and various states and the Congress
have enacted legislation intended to allow certain interstate banking
combinations.

         The Riegle-Neal Act dramatically affects interstate banking activities.
As discussed previously, the Riegle-Neal Act allows the Board of Governors to
approve the acquisition by a bank holding company of control or substantial
assets of a bank located outside the bank holding company's home state. Since
June 1, 1997, and earlier where permitted by applicable state law, an insured
bank has been authorized to apply to the appropriate federal agency for
permission to merge with an out-of-state bank and convert the branch offices of
the out-of-state bank to those of its own or, alternatively, convert its branch
offices to those of the out-of-state bank, unless its home state or the home
state of the out-of-state bank had adopted qualifying legislation barring this
form of interstate expansion by June 1, 1997.

         Interstate mergers authorized by the Riegle-Neal Act are subject to
conditions and requirements, the most significant of which include adequate
capitalization and management of the acquiring bank or bank holding company,
existence of the acquired bank for up to five years before purchase where
required under state law, and limitations on control by the acquiring bank
holding company of not more than 10% of the total amount of deposits in insured
depository institutions in the United States or not more than 30% of the
deposits in insured depository institutions within that state. States may impose
more stringent deposit concentration limits, so long as those limits apply to
all bank holding companies equally. Additional requirements placed on mergers
include conformity with state law branching requirements and compliance with
"host state" merger filing requirements to the extent that those requirements do
not discriminate against out-of-state banks or out-of-state bank holding
companies.



                                       44
<PAGE>

         The Riegle-Neal Act also permits banks to establish and operate a "de
novo branch" in any state that expressly permits all out-of-state banks to
establish de novo branches in such state, if the law applies equally to all
banks. (A "de novo branch" is a branch office of a national bank or state bank
that is originally established as a branch and does not become a branch as a
result of an acquisition, conversion, merger, or consolidation.) Utilization of
this authority is conditioned upon satisfaction of most of the conditions
applicable to interstate mergers under the Riegle-Neal Act, including adequate
capitalization and management of the branching institution, satisfaction with
certain filing and notice requirements imposed under state law and receipt of
federal regulatory approvals.

         Pursuant to FIRREA, bank holding companies may acquire savings
associations (including savings and loan associations and federal savings banks)
without geographic restriction under the Bank Holding Company Act.

         Bank holding companies whose home state is Utah are authorized to
acquire control of depository institutions and depository institution holding
companies located in other states. Colorado law authorizes an out-of-state bank
holding company, with the prior approval of the Division, to acquire a Colorado
bank holding company whose operations are principally conducted within the state
irrespective of the number of years the depository institution subsidiaries of
the Colorado bank holding company have been in operation provided that at the
time of acquisition, the out-of-state bank holding company will not control more
than 25 percent of the aggregate deposits made in federally-insured banks,
savings and loan associations, federal savings banks, industrial banks, bank
holding companies, thrift holding companies and industrial bank holding
companies located in the state. Zions knows of no basis on which the Division is
likely to withhold its approval of the Reorganization.

                                 MONETARY POLICY

         The earnings of Zions and the Company are directly affected by the
monetary and fiscal policies of the federal government and governmental
agencies. The Board of Governors has broad powers to expand and constrict the
supply of money and credit and to regulate the reserves which its member banks
must maintain based on deposits. These broad powers are used to influence the
growth of bank loans, investments and deposits, and may affect the interest
rates which will prevail in the market for loans and investments and deposits.
Governmental and Federal Reserve Board monetary policies have had a significant
effect on the operating results of commercial banks in the past and are expected
to do so in the future. The future impact of such policies and practices on the
growth or profitability of Zions and the Company cannot be predicted.



                                       45
<PAGE>

                   INFORMATION CONCERNING ZIONS BANCORPORATION

Selected Financial Data

         The following unaudited table of selected financial data should be read
in conjunction with the related notes included herein and Zions' consolidated
financial statements and the related notes thereto incorporated by reference
herein. The per share information presented reflects Zions' May 9, 1997 stock
split. See "Zions Documents Incorporated by Reference."









                                       46
<PAGE>





ZIONS BANCORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA


(Dollars in thousands, except per share and ratio data)

<TABLE>
<CAPTION>
                                                 As of, and for the Nine                       As of, and for the
                                                  Months Ended Sept. 30,                     Year Ended December 31,
                                                 ----------------------- ---------------------------------------------------------
                                                    1997        1996        1996        1995        1994        1993         1992
                                                    ----        ----        ----        ----        ----        ----         ----
                                                      (Unaudited)
<S>                                             <C>         <C>         <C>         <C>         <C>          <C>        <C>
EARNINGS SUMMARY
- ----------------
Taxable-equivalent net interest income          $  230,406  $  194,081  $  267,583  $  232,417  $  203,313  $  178,636  $  160,854
Net interest income                                225,404     189,207     260,473     227,094     198,606     174,657     157,282
Noninterest income                                 100,309      81,596     110,891      88,014      73,202      79,880      62,849
Provision for loan losses                            2,905       2,200       3,540       2,800       2,181       2,993      10,929
Noninterest expense (1)                            193,861     155,578     214,332     190,030     174,900     167,750     139,069
Income taxes                                        44,826      38,530      52,142      40,950      30,900      27,248      22,924
Income before cumulative effect of changes
     in accounting principles                       84,121      74,495     101,350      81,328      63,827      56,546      47,209
Cumulative effect of changes in
     accounting principles (2)                           -           -           -           -           -       1,659           -
Net income                                          84,121      74,495     101,350      81,328      63,827      58,205      47,209

COMMON STOCK DATA
- -----------------
Earnings per common share:
Income before cumulative effect of
     changes in accounting principles           $     1.41  $     1.26  $     1.71  $     1.38  $     1.09  $      .99  $      .86
Net income                                            1.41        1.26        1.71        1.38        1.09        1.02         .86
Dividends paid per share                               .35         .32         .43         .35         .29         .25         .19
Dividend payout ratio (%)                            24.63%      24.86%      24.66%      25.27%      27.06%      21.81%      20.31%
Book value per share at period end                    9.78        8.30        8.61        7.36        6.28        5.50        4.74
Market to book value at period end (%)              383.44%     266.49%     301.89%     272.59%     142.83%     168.11%     200.53%
Weighted average common and common
     equivalent shares outstanding during
     the period                                 59,792,000  59,072,000  59,228,000  58,868,000  58,404,000  57,120,000  55,160,000
Common shares outstanding at period end         59,426,300  59,068,860  58,918,880  58,223,680  58,238,208  56,805,468  54,910,176

AVERAGE BALANCE SHEET DATA
- --------------------------
Money market investments                        $1,545,892  $  926,035  $  909,470  $  936,846  $  869,709  $  788,694  $  469,062
Securities                                       2,282,914   1,807,806   1,827,300   1,632,253   1,545,704   1,209,165     927,976
Loan and leases, net                             3,773,847   3,055,062   3,126,899   2,599,071   2,574,995   2,222,182   2,104,679
Total interest-earning assets                    7,602,653   5,788,903   5,863,669   5,168,170   4,990,408   4,220,041   3,501,717
Total assets                                     8,259,593   6,297,615   6,377,695   5,658,690   5,456,613   4,643,918   3,807,832
Interest-bearing deposits                        3,795,194   3,289,330   3,324,536   3,021,060   2,744,976   2,449,275   2,356,384
Total deposits                                   4,899,591   4,203,711   4,258,270   3,858,271   3,583,094   3,178,926   2,912,860
FHLB advances and other borrowings                 136,204      98,781      96,496     114,270     151,164     195,097     128,856
Long-term debt                                     251,199      55,938      58,466      57,506      59,493      75,623      82,219
Total interest-bearing liabilities               6,476,829   4,821,129   4,872,070   4,320,229   4,197,865   3,556,746   2,962,079
Shareholders' equity                               543,606     455,492     468,573     397,268     339,181     286,331     240,411

PERIOD END BALANCE SHEET DATA
- -----------------------------
Money market investments                        $1,407,200  $  992,846  $  613,429  $  687,251  $  403,446  $  597,680  $  616,180
Securities                                       2,584,089   1,886,533   1,809,688   1,540,489   1,663,433   1,258,939     981,695
Loans and leases, net                            4,190,664   3,313,932   3,452,543   2,806,956   2,391,278   2,486,346   2,107,433
Allowance for loan losses                           70,290      69,337      69,954      67,555      67,018      68,461      59,807
Total assets                                     9,059,721   6,783,341   6,484,964   5,620,646   4,934,095   4,801,054   4,107,924
Total deposits                                   5,666,336   4,572,555   4,552,017   4,097,114   3,705,976   3,432,289   3,075,110
FHLB advances and other borrowings                 266,750      90,997      87,194     101,084     127,319     288,249     205,222
Long-term debt                                     251,134      55,702     251,620      56,229      58,182      59,587      99,223
Shareholders' equity                               581,129     490,485     507,452     428,506     365,770     312,592     260,070
</TABLE>


                                       47
<PAGE>

<TABLE>
<CAPTION>
                                                 As of, and for the Nine                       As of, and for the
                                                  Months Ended Sept. 30,                     Year Ended December 31,
                                                 ----------------------- ---------------------------------------------------------
                                                    1997        1996        1996        1995        1994        1993         1992
                                                    ----        ----        ----        ----        ----        ----         ----
                                                      (Unaudited)
<S>                                              <C>         <C>         <C>          <C>      <C>         <C>         <C>
Nonperforming assets:
     Nonaccrual loans                             $10,617     $10,139     $11,526     $ 7,438    $ 13,635    $ 23,364    $ 21,556
     Restructured loans                               693         204         857         249         567       4,006       4,003
     Other real estate owned and other
          nonperforming assets                      4,734         256         138       1,609       4,741       3,267       5,971
     Total nonperforming assets                    16,044      10,599      12,521       9,296      18,943      30,637      31,530
Accruing loans past due 90 days or more             7,997       8,740       3,553       5,232       3,041      10,821       6,409

SELECTED RATIOS
- ---------------
Net interest margin (3)                              4.05%       4.48%       4.56%       4.50%       4.07%       4.23%       4.59%
Return on average assets                             1.36%       1.58%       1.59%       1.44%       1.17%       1.25%       1.24%
Return on average common equity                     20.69%      21.85%      21.63%      20.47%      18.82%      20.33%      19.64%
Ratio of average common equity to average assets     6.58%       7.23%       7.35%       7.02%       6.22%       6.17%       6.31%
Tier I risk-based capital - period end              12.45%      11.05%      14.38%      11.38%      11.81%      10.85%      10.23%
Total risk-based capital - period end               15.13%      13.67%      18.31%      14.23%      14.96%      14.12%      15.13%
Leverage ratio - period end                          6.96%       6.47%       8.77%       6.28%       6.24%       5.44%       6.21%
Ratio of nonperforming assets to total
     assets - period end                              .18%        .16%        .19%        .17%        .38%        .64%        .77%
Ratio of nonperforming assets to net loans and
     leases and other real estate owned and
     other nonperforming assets at period end         .38%        .32%        .36%        .33%        .79%       1.23%       1.49%
Ratio of net charge-offs (recoveries) to average
     loans and leases                                 .22%        .13%        .12%        .10%        .19%       (.23)%       .44%
Ratio of allowance for loan losses to net loans
     and leases outstanding at period end            1.68%       2.09%       2.03%       2.41%       2.80%       2.75%       2.84%
Ratio of allowance for loan losses to
     nonperforming loans at period end             621.49%     670.38%     564.92%     878.82%     471.89%     250.13%     234.00%
</TABLE>

(1)  Noninterest expenses for the year ended December 31, 1993 included a
     one-time expense of $6,022,000 in the first quarter of 1993, related to the
     early extinguishment of debt which was necessitated by the decision in
     March 1993, to notify holders of floating rate notes totaling $37,450,000
     and industrial revenue bonds totaling $4,720,000 that the debt would be
     redeemed during the second quarter of 1993. The expense consisted of
     marking to market an interest rate exchange agreement entered into several
     years ago in conjunction with the issuance of the floating rate notes and
     writing off deferred costs associated with the notes and bonds. Early
     redemption of the bonds and notes in the second quarter of 1993, allowed
     Zions to avail itself of lower cost funding.

(2)  Cumulative effect of changes in accounting principles for the year ended
     December 31, 1993 resulted from the cumulative effect of changes in
     accounting principles in the first quarter of 1993, arising from the
     adoption as of January 1, 1993, of Statement of Financial Accounting
     Standards (SFAS) No. 106, "Employers' Accounting for Postretirement
     Benefits Other than Pensions," and SFAS No. 109, "Accounting for Income
     Taxes." The election of immediate recognition of the cumulative effect
     (transition obligation) of such change in accounting method for
     postretirement benefit other than pensions of SFAS No. 106 decreased pretax
     and after-tax net income by $5,760,000 and $3,631,000, respectively. In
     addition to the $2,129,000 deferred tax benefit resulting from the adoption
     of SFAS No. 106 the election to apply SFAS No. 109 prospectively and not
     restate prior years resulted in net deferred tax benefits of $5,290,000 for
     the expected future tax consequences of temporary differences between the
     carrying amounts and the tax bases of other assets and liabilities.

(3)  Net interest margin represents net interest income on a taxable-equivalent
     basis as a percentage of average earning assets.



                                       48
<PAGE>


Stock Prices and Dividends on Zions Common Stock

         Zions Common Stock is traded in the over-the-counter market under the
symbol "ZION" and is listed in the NASDAQ National Market. The following table
has been adjusted to reflect Zions' May 9, 1997 stock split and sets forth the
high and low daily sales prices for Zions Common Stock for the periods
indicated, in each case as reported by NASDAQ, and the cash dividends per share
declared on Zions Common Stock for such periods.
<TABLE>
<CAPTION>

                                                                Cash
                                                                Dividends
                                             High       Low     Declared
                                            -----       ---     --------
<S>                                         <C>        <C>      <C> 

1995
First Quarter............................. $ 10.13    $ 8.88    $ .075
Second Quarter............................   12.50      9.53     .0875
Third Quarter.............................   15.38     12.38     .0875
Fourth Quarter............................   20.28     15.22     .1025
                                                                ------
                                                                $.3525
                                                                ======

1996
First Quarter............................. $ 19.81    $16.69    $.1025
Second Quarter ...........................   19.75     17.00     .1025
Third Quarter.............................   22.44     18.00       .11
Fourth Quarter............................   26.00     21.69       .11
                                                                ------
                                                                $ .425
                                                                ======

1997
First Quarter............................. $ 33.25    $25.69    $  .11
Second Quarter............................   37.63     28.38       .12
Third Quarter.............................   41.13     34.69       .12
Fourth Quarter (through
December 15, 1997)........................   45.63     37.63       .12
                                                                ------
                                                                $  .47
                                                                ======

</TABLE>

         On September 23, 1997, the last NASDAQ-NM trading day prior to the
public announcement of the Reorganization, the closing sale price for the Zions
Common Stock was $______. On December __, 1997, the last trading date before
this Proxy Statement/Prospectus was sent to the printers, the closing sale price
for the Zions Common Stock was $______. On December __, 1997, there were shares
of Zions Common Stock outstanding, held by approximately shareholders of record.

         While Zions is not obligated to pay cash dividends, Zions' Board of
Directors presently intends to continue the policy of paying quarterly cash
dividends. Future dividends will depend, in part, upon the earnings and
financial condition of Zions.


                                       49
<PAGE>



Principal Holders of Zions Common Stock

         The following table sets forth as of June 30, 1997, the record and
beneficial ownership of Zions Common Stock by the principal common shareholders
of Zions.

                                                             No. of      % of
Name and Address                  Type of Ownership          Shares      Class
- ----------------                  -----------------          ------      -----
Roy W. Simmons                    Record and Beneficial     2,291,911    3.82%
   One South Main                 Beneficial(1)             1,991,376    3.32%
                                                            ---------    ---- 
   Salt Lake City, Utah 84111                               4,283,287    7.14%

Zions First National Bank         Record(2)                 4,581,822    7.60%
   One South Main
   Salt Lake City, Utah 84111

- ---------------------

(1)  Represents Roy W. Simmons' ownership interest in 1,991,376 shares held by a
     company in which Mr. Simmons serves as a director.

(2)  These shares are owned of record as of June 30, 1997, by Zions First
     National Bank, a subsidiary of Zions, in its capacity as fiduciary for
     various trust and advisory accounts. Of the shares shown, Zions First
     National Bank has sole voting power with respect to a total of 3,286,821
     shares (5.45% of the class) it holds as trustee for the Zions
     Bancorporation Employee Stock Savings Plan, the Zions Bancorporation
     Employee Investment Savings Plan, and the Zions Bancorporation Profit
     Sharing Plan. Zions First National Bank also acts as trustee for the Zions
     Bancorporation Dividend Reinvestment Plan, which holds 998,864 shares
     (1.66% of the class) and the Zions Bancorporation PAYSOP Plan, which holds
     296,137 shares (.49% of the class) as to which Zions First National Bank
     does not have or share voting power.

         Set forth below is the beneficial ownership, as of June 30, 1997, of
Zions' common stock by each of Zions' directors, and all directors and officers
as a group.

                                      No. of Shares                 % of
Directors                          Beneficially Owned               Class
- ---------                          ------------------               -----

Jerry C. Atkin                             8,800                    * (1)

R.D. Cash                                 26,000                    * (1)

Grant R. Caldwell                          6,000                    * (1)

Richard H. Madsen                        197,372                    * (1)

Roger B. Porter                            2,000                    * (1)

Robert G. Sarver                         300,194                    * (1)

Harris H. Simmons                      2,400,179(2)                 4.00

L. E. Simmons                          2,219,837(2)                 3.70

Roy W. Simmons                         4,283,287(2)                 7.14

I. J. Wagner                             284,000(2)                 * (1)

Dale W. Westergard                       163,022                    * (1)

All directors and officers
  as a group (31 persons)              7,243,523                   12.02

- --------------------
(1)  Immaterial percentage of ownership.
(2)  Totals include 1,991,376 shares attributed to each individual through
     serving as a director in a company holding such shares in Zions. Of such
     1,991,376 shares attributed to Harris H. Simmons, Mr. Simmons holds an
     option to acquire 186,792 shares, all of which are vested and presently
     exercisable.


                                       50
<PAGE>

Zions Documents Incorporated By Reference

         The following documents previously filed by Zions with the SEC pursuant
to the Exchange Act are hereby incorporated by reference in this Proxy
Statement/Prospectus:

         1. Zions' Annual Report on Form 10-K for the year ended December 31,
1996 ("Zions Form 10-K");

         2. Zions' Quarterly Reports on Form 10-Q for the quarters ended March
31, 1997, June 30, 1997, and September 30, 1997;

         3. Zions' Current Reports on Form 8-K filed by Zions on March 11, 1997,
July 9, 1997 and October 3, 1997; and

         4. Zions' Form 8-A Registration Statement dated October 10, 1996.

         For the convenience of the Company shareholders, a copy of Zions' 1996
Annual Report to Shareholders ("Zions Annual Report") and Zions' press release
relating to the quarter ended September 30, 1997 ("Press Release") are being
mailed to the Company shareholders along with this Proxy Statement/Prospectus.
The Zions Annual Report and the Press Release are not part of this Proxy
Statement/Prospectus. The Zions Annual Report does not contain all of the
information contained in the Zions Form 10-K. The Company shareholders who wish
to obtain copies of any Zions document incorporated by reference herein may do
so by following the instructions under "Available Information" above.

         All documents filed by Zions with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Proxy
Statement/Prospectus and prior to the Effective Date shall be deemed to be
incorporated by reference in this Proxy Statement/Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained herein
or in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Proxy
Statement/Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Proxy Statement/Prospectus.


                                       51
<PAGE>

                 INFORMATION CONCERNING THE COMPANY AND THE BANK

General

         The Company was organized under Colorado law in January 1963. From that
time until approximately 1973, it was engaged primarily in the consumer finance
business, with as many as eight offices located variously in the greater Denver
Metropolitan area, Colorado Springs, Boulder and Longmont, Colorado. In 1973,
the Company organized Tri-State Industrial Bank, an industrial bank located in
Denver, and in 1974, it organized Boulder Tri-State Industrial Bank, an
industrial bank located in Boulder, Colorado. By 1975, all of the consumer
finance companies had been dissolved and the Company's activities were limited
to operating its two wholly-owned industrial bank subsidiaries. In January 1984,
Tri-State Industrial Bank was converted to a state commercial bank (Tri-State
Bank), and in January 1986, Boulder Tri-State Industrial Bank was converted to a
state commercial bank (Boulder Tri-State Bank). In 1992, the Boulder bank was
converted to a branch of Tri-State Bank in Denver.

         The Company became a registered bank holding company under the Bank
Holding Company Act in October 1984 at the time of the conversion of its
industrial banks into commercial banks. The outstanding capital stock of the
Company is owned by approximately 54 shareholders of record. Since its formation
in 1963, the activities of the Company have been limited to ownership and
operation of the Bank since 1984 and, prior to that, the predecessor industrial
banks and consumer finance companies. The Company's principal assets are its
investment in the Bank and the land and building occupied by the Bank on 616
East Speer Boulevard, and its primary sources of income are Bank dividends and
rental payments from the Bank on the land and building at 616 East Speer
Boulevard. At September 30, 1997, the Company had total consolidated assets of
$124 million and stockholders' equity of $8.5 million. As a registered bank
holding company, the Company is subject to regulation and examination by the
Federal Reserve Bank.

         The Bank and its predecessors have operated at its current location on
Speer Boulevard in Central Denver since the late 1970s, and at its current
location in Boulder, Colorado since the early 1970's. The Bank offers general
commercial banking services to its customers and caters to small and
medium-sized businesses by providing a comprehensive banking relationship. The
Bank engages in most banking activities, including accepting savings and
checking deposits and making commercial, installment, construction and real
estate mortgage loans. It also offers a variety of other banking products
including safe deposit boxes, VISA credit cards, debit cards, cashier's checks,
24-hour ATM access, 24-hour telephone banking, U.S. Savings Bonds and
Treasuries, foreign monetary services, ACH credit transfers, wire transfers,
safekeeping for municipalities and other banks, and money orders. The Bank does
not offer trust, investment management and insurance services. Although the Bank
has trust powers granted by the Colorado Division of Banking, the Bank has not
chosen to pursue this business.


                                       52
<PAGE>

The Bank

         The Bank is the fourteenth largest independent bank in Metropolitan
Denver and is one of only sixteen banks in Metropolitan Denver with
assets over $100 million. At September 30, 1997, the Bank had total assets of
$124 million, total deposits of $113 million, and total stockholders' equity of
$10.4 million. Over the period from 1991 to September 30, 1997, the Bank
experienced continued growth. Assets and deposits grew at an 11.43% and 11.16%
compound annual rate, respectively. Over that same period, the compound annual
loan growth was 10.43%. The Company has continually improved its profitability
over the last several years achieving a 1.78% annualized return on average
assets in the first nine months of 1997. The Bank is a member of the FDIC and
the Federal Reserve Bank and is subject to examination by the Colorado Division
of Banking and the Federal Reserve Bank.

         Total assets of the Bank have grown from $114 million at December 31,
1996, to $124 million at September 30, 1997. For the nine months ended September
30, 1997, the Bank's net income after taxes was $1,577,000, compared to
$1,283,000 for the same period in 1996. On September 30, 1997, deposits were
$112,721,000 and net loans were $ 71,034,000 compared to $97,909,000 and
$64,193,000, respectively, at September 30, 1996. Net interest income for the
nine months ended September 30, 1997, was $4,514,000 as compared to $4,015,000
for the same period in 1996.

Market Areas Served

         The Bank's two facilities are both located within the Denver
Metropolitan area. The main location and a detached drive-up facility are
located in Central Denver on opposite sides of Speer Boulevard, a major
thoroughfare that connects Downtown Denver to Cherry Creek. Central Denver
continues to experience redevelopment with several large scale hotel, retail and
residential projects in various stages of completion. The Central Business
District is Metropolitan Denver's largest employment center. Cherry Creek is an
upscale retail, business and residential district that has experienced
substantial development of both commercial and residential projects. The Bank's
location in Central Denver benefits from its proximity to affluent Denver
Country Club and Cherry Creek neighborhoods. Boulder, although considered part
of the Metropolitan area, is an employment center and not a suburb of Denver.
Boulder is also an affluent area with an average home price of almost $280,000.
The Bank's primary market area at its main location in Denver consists of the
four county area of Adams, Arapahoe, Denver and Jefferson Counties, while the
primary market area for its branch facility in Boulder consists primarily of
Boulder County.

Loans

         General. The Bank follows a uniform credit policy for its loans, which
sets forth underwriting and loan administration criteria, including levels of
loan commitments, loan types, credit criteria, concentration limits, loan
administration, loan review and grading and related matters. The Bank monitors
asset quality utilizing an internal and external loan review program. Interest
rates charged on loans vary with the degree of risk, maturity, underwriting and
servicing costs, loan amount and extent of other banking relationships
maintained with customers, and are further subject to competitive pressures,
money market rates, availability of funds and government regulations.
Approximately 57% of the Bank's loan portfolio at September 30, 1997, had
interest rates that float with the Bank's base rate or some other reference
rate.
                                       53

<PAGE>

         In the ordinary course of business, the Bank enters into various types
of transactions that include commitments to extend credit and standing letters
of credit. The Bank uses the same credit policies to these commitments as it
uses in all its lending activities and has included these commitments in its
lending risk evaluations. The Bank's exposure to credit loss under commitments
to extend credit is represented by the amount of the commitments. Under
applicable federal and state law, permissible loans by the Bank to one borrower
were limited to an aggregate of $1,680,000 at September 30, 1997.

         Loan Portfolio. The following table sets forth the classification of
loans of the Bank by a major category at the dates indicated.

                                             September 30,     December 31,
                                                1997         1996        1995
                                             ------------   -----       ------ 
                                                        (In Thousands)

Commercial and industrial                       $17,150    $14,385      $13,678
Real estate:
   Construction mortgage                          8,276      5,986        6,421
   Commercial                                    44,220     47,551       42,622
Installment                                       2,449        940        1,306
                                             ----------    -------      -------
     Total loans                                 72,095     68,862       64,027
Less allowance for loan and lease losses          1,061      1,009          834
     Net loans                               ----------    -------      -------
                                                $71,034    $67,853      $63,193
                                             ==========    =======      =======

         The Bank's focus has been on commercial loans for small to medium-size
businesses; consequently, this category represent a large percentage of the
Bank's loan portfolio. The Bank primarily accepts real estate as collateral for
these loans, but also accepts accounts receivable and inventory.

         The real estate loan category consists principally of improved real
estate loans. The Bank makes very few land loans and is not actively engaged in
the origination of first mortgage loans for single-family homes.

         Installment loans represent the smallest percentage of total loans.
These loans to individuals for non-business purposes (household, family and
other personal purposes) include new and used car loans, VISA and credit reserve
lines. The Bank has very few student loans. Although the Bank's loan portfolio
is focused on loans to commercial enterprises, it is diversified in terms of
business and industry exposure. For the past approximate ten years, the Bank's
strategy was to focus on fixed rate loans with maturities of up to five years.
Accordingly, a majority of the Bank's existing loans are fixed rate loans.
Recently, the Bank changed its focus to floating rate loans with interest of
from 1% to 2% above prime. Of the Bank's total $22.4 million of credit
commitments outstanding at September 30, 1997, a majority were loans with
floating rates.

         The following table presents at September 30, 1997, and December 31,
1996, loans by maturity. Actual maturities may differ from the contractual
maturities shown below as a result of renewals and prepayments. In addition, all

                                       54
<PAGE>

loans due after one year that have predetermined interest rates and that have
floating or adjustable rates are shown below:

<TABLE>
<CAPTION>

             Maturity                              September 30,      December 31,
             --------                                  1997               1996
                                                      -----              ------
                                                        (Dollars in Thousands) 
<S>                                                   <C>                  <C>  

           One year or less.........................  $40,870            $39,214
           One to five years........................   30,955             29,529
           Over five years..........................      270                119
                                                      -------            -------
           Total....................................  $72,095            $68,862
                                                      =======            =======
           Loans due after one year
           Fixed interest rate.....................   $31,225            $29,648
           Floating rate                                  ---                ---

</TABLE>

         The Bank makes primarily commercial, real estate and consumer loans to
businesses and individuals in Colorado. Although the loan portfolio is
diversified, approximately $44,220,000 at September 30, 1997, and $47,551,000 at
December 31, 1996, represent loans collateralized by commercial real estate.

Non-Performing Assets

         The following table sets forth information concerning the Bank's
non-performing assets at the dates indicated:
<TABLE>
<CAPTION>

                                                                        September 30         December 31
                                                                           1997           1996         1995
                                                                           ----           ----         ----
                                                                              (Dollars in Thousands)
<S>                                                                       <C>            <C>          <C>

Non performing loans:
  Loans 90 days or more delinquent and still accruing..............       $   ---        $  ---       $  ---
                                                                              
  Nonaccrual loans.................................................            76             7          555
  Troubled debt restructurings.....................................           ---           ---          ---
                                                                          -------        ------       ------
      Total nonperforming loans....................................       $    76        $    7       $  555
                                                                          =======        ======       ======

Other real estate owned............................................      
Other assets acquired by foreclosure...............................           ---           ---          ---
                                                                          -------        ------       ------
      Total nonperforming assets...................................       $   ---        $  ---       $  ---
                                                                          =======        ======       ======
Allowance for loan losses..........................................       $ 1,061        $1,009       $  834
                                                                          =======        ======       ======


Ratio of total nonperforming assets to total assets................          --- %         --- %        --- %
Ratio of total nonperforming loans to total loans..................          0.10%         0.01%        0.86%
Ratio of allowance for loan losses to total loans..................          1.47%         1.47%        1.30%
Ratio of allowance for loan losses to total nonperforming loans....         1,396%       14,414%         150%
</TABLE>


         The Bank knows of no material loans that are now current where there
are serious doubts as to the ability of the borrower to comply with present loan
repayment terms.

         Non-Performing Loans. Non-performing loans consist of loans 90 days or
more delinquent and still accruing interest, nonaccrual loans and troubled debt
restructurings. There were no material non-performing loans at either December
31, 1996, or September 30, 1997. Non-performing loan balances in 1995 related
primarily to one loan which was subsequently collected.

                                       55
<PAGE>

         Nonaccrual loans are loans on which the accrual of interest has been
discontinued. When, in the opinion of the Bank management, a reasonable doubt
exists as to the full, timely collection of interest or principal, regardless of
the delinquency status of a loan, the accrual of interest income is discontinued
and all interest previously accrued, but not collected, is reversed against
current period interest income. While the loan is on nonaccrual status, interest
income is recognized only upon receipt and then only if, in the judgment of
management, future collection of principal is probable. Loans 90 days or more
delinquent are changed to nonaccrual status unless the loan is in the process of
collection and management determines that full collection of principal and
accrued interest is probable. Interest accruals are resumed on non-accrual loans
only when, in the judgment of the Bank management, the loans are estimated to be
fully collectible as to both principal and interest.

         Troubled debt restructurings are loans that have been renegotiated to
provide a reduction or deferral of interest or principal balance because of a
deterioration in the financial position of borrower.

         Additional interest income on nonaccrual loans that would have been
recognized in 1996 had the loans been current in accordance with their original
terms was not material. No interest income was collected in 1996 on nonaccrual
loans.

         Other Real Estate Owned. Other real estate owned includes property
acquired in foreclosure proceedings or under agreements with delinquent
borrowers. The Bank had no other real estate owned at December 31, 1996 or
September 30, 1997.

Analysis of Allowance for Loan Losses

         The allowance for loan losses is established through charges to
earnings in the form of provisions for loan losses. Charge offs or recoveries
are charged or credited directly to the allowance. In general, the amount
charged to earnings each year by the Bank is based on the Bank management's
judgment, which takes into consideration a number of factors, including: (a) the
Bank's loss experience in relation to outstanding loans and the existing level
of the allowance; (b) a continuing review of problem loans, related uncollected
interest and overall portfolio quality; (c) regular examinations and appraisals
of loan portfolios conducted by the Bank's internal and external auditors and
state and federal supervisory authorities; and (d) current economic conditions.

         The following table sets forth the historical relationship between the
Bank's loan charge offs and recoveries and allowance for loan losses at the
dates indicated:

                                       56
<PAGE>

<TABLE>
<CAPTION>


                                                                 Nine Months ended       Year Ended December 31,
                                                                 September 30,1997        1996          1995    
                                                                 -----------------       ------        ------
                                                                              (Dollars in Thousands)
<S>                                                               <C>                     <C>          <C>    


Balance of allowance for loan losses at beginning of period                 $ 1,009       $  834       $  637
Charge Offs:
  Commercial and industrial..................................                    (2)         (55)        (246)
Real Estate:
  Construction mortgage......................................                   ---          ---          ---
  Commercial.................................................                   ---          ---           (1)
Installment..................................................                   (83)         (86)         (50)
                                                                          ---------     --------      -------
         Total charge-offs..................................                    (85)        (141)        (297)
                                                                          ---------     --------      -------
Recoveries:
Commercial and industrial...................................                      4           62           18
Real estate:
  Construction mortgage....................................                     ---          ---          ---
  Commercial...............................................                     ---          ---           11
Installment................................................                     133          254           15
                                                                          ---------     --------      -------
         Total Recoveries..................................                     137          316           44

Net (charge-offs) recoveries...............................                      52          175         (253)
Provision for loan losses charged to operations............                     ---          ---          450
                                                                          ---------     --------      -------
Balance of allowance for loan losses at end of period......                  $1,061       $1,009        $ 834
                                                                          =========     ========      =======
</TABLE>


<TABLE>
<CAPTION>


                                                              Nine Months ended              December 31,
                                                             September 30, 1997           1996        1995
                                                            --------------------         ------     -------
                                                                             (Dollars in Thousands)
<S>                                                           <C>                       <C>           <C>
Ratio of net charge-offs (recoveries) average loans
(annualized for September 30, 1997)...................              (0.07)%               (0.26)%       0.41%
                                                                  -------               -------      -------
Average loans outstanding during the period...........            $70,869               $66,810      $61,880
                                                                  =======               =======      =======


</TABLE>

                                       57

<PAGE>



Investment Securities

         The following table sets forth the amortized cost and market value of
the Bank's investment securities by class of security at the dates indicated.

<TABLE>
<CAPTION>




                                         September 30, 1997      December 31, 1996      December 31, 1995
                                         ------------------      -----------------      -----------------
                                         Amortized    Market    Amortized     Market    Amortized    Market
                                            Cost       Value      Cost        Value       Cost       Value
                                         ---------    ------    ----------    ------    ---------    -------
                                                                (Dollars in Thousands)
<S>                                     <C>        <C>          <C>           <C>       <C>           <C>

Securities held to maturity:
   U.S. Treasury.....................   $   999   $  1,003       $   997      $ 1,000    $ 1,298     $1,300
   U.S. agencies.....................    24,999     25,071        17,177       17,157      8,199      8,123
   Mortgage-backed...................     2,366      2,372         3,131        3,093      3,231      3,198
   State and political subdivisions..       349        355           259          263        314        319
   Other.............................       701        701           413          414        516        513
                                        -------   --------      --------      -------    -------     ------
Total securities held to maturity....   $29,414   $ 29,502       $21,977      $21,927    $13,558    $13,453
                                        =======   ========      ========      =======    =======    =======

Securities available for sale:
   U.S. Treasury......................  $   ---    $   ---       $   ---      $   ---    $   ---     $  ---
   U.S. agencies......................    7,250      7,220         8,950        8,937      2,655      2,618
   States and political subdivisions..      ---        ---           ---          ---        ---        ---
   Other..............................      ---        ---           ---          ---        ---        ---
                                        -------   --------      --------      -------    -------     ------
Total securities available for sale...  $ 7,250    $ 7,220       $ 8,950      $ 8,937    $ 2,655     $2,618
                                        =======   ========      ========      =======    =======    =======

</TABLE>

                                       58

<PAGE>



         The following tables set forth the carrying values, maturities and
weighted average yields of the Bank's securities portfolio at September 30,
1997, and December 31, 1996, respectively.

<TABLE>
<CAPTION>

                                                                            September 30, 1997
                                      --------------------------------------------------------------------------------------------
                                                              Due after one    Due after five
                                      Due in one year or     year through     years through       Due after
                                             less              five years       ten  years         ten years            Total
                                          ---------            ----------     -------------      -----------          --------
                                         Amount   Yield   Amount    Yield     Amount   Yield   Amount    Yield    Amount    Yield
                                         ------   -----   ------    -----    -------   -----   ------   -------  --------   ------
                                                                            (Dollars in Thousands)
<S>                                       <C>       <C>     <C>       <C>      <C>       <C>     <C>     <C>      <C>        <C>
                     
Securities held to
 maturity:
  U.S. Treasury.................          $2,400  5.76%   $15,940   6.50%   $ 6,649     7.04%   $ ---      ---%   $24,989    6.57%
  U.S. government agencies......             499  5.68%       500   6.20%       ---      ---      ---      ---%       999    5.94%
  Mortgage backed securities....             580  4.94%       663   5.54%       245     7.08%    1,189    6.73%     2,677    6.08%
  State and political              
    subdivisions................             ---   ---%       249   4.97%       100     4.85%     ---      ---%       349    4.94%
Other securities................             200  5.60%       200   7.13%       ---      ---%     ---      ---%       400    6.36%
                                        --------          -------           -------             ------            -------    ----
  Total.........................          $3,679  5.61%   $17,552   6.44%   $ 6,994     7.01%   $1,189    6.73%   $29,414    6.48%
                                        ========          =======           =======             ======            =======    ====
Securities available for
 sale:
   U.S. government agencies.....          $  200  4.75%    $5,397   6.36%   $ 1,623     6.50%   $  ---     ---%   $ 7,220    6.34%
                                        ========          =======           =======             ======            =======    ====
</TABLE>


<TABLE>
<CAPTION>


                                                                 December 31, 1996
                          -------------------------------------------------------------------------------------------
                                                                 
                               Due in         Due after one     Due after five      
                            one year or       year through      years through       Due after 
                                less           five years          ten years        ten years             Total
                            ----------        ------------      -------------      -----------            -----
                            Amount   Yield   Amount    Yield     Amount   Yield   Amount    Yield    Amount    Yield
                           -------  ------  -------    -----    -------   -----   ------   -------  -------    -----
                                                             (Dollars in Thousands)

<S>                         <C>       <C>      <C>       <C>      <C>        <C>    <C>      <C>      <C>        <C>

Securities held to 
 maturity:
 U.S. Treasury............. $  516     7.13%   $16,062    6.43%   $  599     6.86%  $  ---      ---%   $17,177     6.67%
 U.S. government agencies..    ---      ---%       997    5.94%      ---      ---      ---      ---%       997     5.94%
 Mortgage backed              
  securities...............    241     6.00%     1,266    6.44%      297     7.30%   1,327     7.01%     3,131     6.73%
 State and political           
  subdivisions(1)..........    ---      ---%       249    4.97%      ---      ---%      10     7.25%       259     5.06%
Other securities...........     10     5.50%       403    6.36%      ---      ---%     ---      ---%       413     6.34%
                             -----             -------            -------             -----              -----          
                                                                                         
  Total                     $  767     6.76%   $18,977    6.38%    $ 896     7.01%  $1,337     7.01%   $21,977     6.46%
                            ======             =======            =======           ======             =======          

Securities available for
  sale:
 U.S. government 
     agencies.............  $1,000     8.55%   $ 5,739    6.34%   $2,198     6.74%  $  ---      ---%   $ 8,937     7.64%
                            ======             =======            =======           ======             =======          

</TABLE>
                                       59


<PAGE>

Deposits

         The following table presents the average balances of the Bank for each
major category of deposits and the weighted average interest rate paid for
interest-bearing deposits for the periods indicated:

<TABLE>
<CAPTION>

                                        Nine months ended                       Years ended December 31,
                                       September 30, 1997          ----------------------------------------------
                                  -----------------------------        1996                           1995
                                                                      -------                        -------      
                                                    Weighted                   Weighted                     Weighted
                                     Average         average       Average      average        Average      average
                                     balance      interest rate    balance   interest rate     balance   interest rate
                                  -----------    ---------------  --------- --------------     -------   -------------
                                                                   (Dollars in Thousands)
<S>                               <C>            <C>              <C>        <C>               <C>       <C>

NOW and money market
   accounts.......................    $ 38,372         2.91%      $38,819        2.88%      $35,018        3.08%
Savings...........................      12,171         3.43%       13,212        3.63%       12,107        3.90%
Time certificates of deposit
   under $100,000.................      28,831         5.70%       20,966        5.70%       16,248        5.35%
Time certificates of deposit
   $100,000 and over..............       6,139         6.07%        6,129        6.11%        5,647        6.13%
                                      --------                    --------                 --------             
Total interest bearing deposits...      85,513         4.14%       79,126        4.00%       69,020        4.01%
Non-interest bearing demand
   deposits.......................      22,098                     20,282                    17,079  
                                      --------                    --------                 --------  
   Total deposits.................    $107,611                    $99,408                   $86,099
                                      ========                    ========                 ========
</TABLE>


           The following table sets forth the amount and maturity of
certificates of deposit with balances of more than $100,000 at September 30,
1997 and December 31, 1996.

<TABLE>
<CAPTION>


                                                                                      September 30,     December 31,
                                                                                           1997            1996
                                                                                       -----------      ------------
                                                                                          (Dollars in Thousands)
<S>                                                                                    <C>              <C>    

Remaining maturity
   Under 3 months..................................................................         $ 5,322      $ 1,484
   3 to 6 months...................................................................           2,244          920
   6 to 12 months..................................................................           1,319        3,203
   Over 12 months..................................................................           7,978        4,873
                                                                                            -------      -------
         Total                                                                              $16,863      $10,480
                                                                                          =========     ========
</TABLE>

                                       60



<PAGE>



Return on the Bank Equity and Assets

         The following table sets forth return on the Company's average assets
and equity and various other ratios for the periods indicated:

<TABLE>
<CAPTION>

                                                       Year ended December 31
                               Nine months ended       ----------------------
                               September 30, 1997         1996           1995
                               ------------------        -----           -----
<S>                             <C>                     <C>             <C>   

Return on assets1                     1.78%               1.67%          1.27%
Return on equity2                    26.63%              28.76%         25.00%
Equity to assets ratio3               6.84%               6.27%          5.37%
Dividend payout ratio4                 .30%                .30%           .15%

</TABLE>
- ----------

1 Net income divided by average total assets (annualized for September 30,
  1997). 

2 Net income divided by average stockholders' equity (annualized for September
  30, 1997). 

3 Average total equity divided by average total assets.

4 Dividends paid per share divided by net income per share.


Competition

        The banking industry in the Denver Metropolitan area is highly
competitive. Throughout the late 1980s and 1990s, major regional publicly-traded
bank holding companies such as Norwest, First Bank System, BancOne, KeyCorp,
Wells Fargo, Community First Bancshares and Zions Bancorporation established a
presence in the Colorado banking market by acquiring financial institutions in
the Denver Metropolitan area and throughout Colorado. Currently, the banking
environment in the Denver Metropolitan area can be characterized by three
different groups of banks: (i) regional bank holding companies headquartered
outside of Colorado; (ii) two large financial institutions with local
headquarters (First Bank Holding of Colorado and First Colorado Bancorp), and
(iii) a decreasing number of smaller local banks.

        The Bank has competition within its markets from both the locally-owned
financial institutions and the major regional banks. Additionally, there is
competition from savings and loan companies, credit unions, investment companies
and other types of financial services companies. Many of the Bank's competitors
are larger and substantially more capitalized than the Bank for lending and to
pay for mass advertising, technology and physical facilities. The primary
factors affecting competition for deposits are interest rates, cost of services,
the quality and range of financial products offered and the convenience of
locations and office hours. The primary factors in competing for loans are
interest rates, loan origination fees and the quality and range of lending
products offered. Other factors which affect competition include the general
availability and reliability of lendable funds/credit, general and local
economic conditions and the quality of service and loan approval turn-around
provided to the customers.

        The Bank believes that it has been successful in developing a niche of
catering to small and medium-sized businesses by providing a comprehensive
banking relationship. It further believes that this success is attributable in
part to personal service and by striving to meet all of the customers' essential
banking needs.

                                       61

<PAGE>

The Bank Facilities

        The Bank owns all of the banking facilities, other than the main
facility at 616 East Speer Boulevard, which is owned by the Company. The
following table sets forth information concerning the Bank facilities other than
two parking lots at the main facility which are not meaningful in size.
<TABLE>
<CAPTION>


      Facility                                   Address                      Square Footage
     ---------                                -----------                    -----------------
<S>                                       <C>                                 <C>    

Boulder Banking Office                    1611 Canyon Boulevard                      6,432
Denver Banking Office                     616 East Speer Boulevard                  10,678
Denver Drive-Up Facility                  401 East Speer Boulevard              Not Meaningful
Data Processing                           247 Washington Street                      2,128
Executive Offices*                        255 Washington Street                      7,449

</TABLE>

- -------------
*   The second floor of this building is an apartment which is the
    residence of the President of the Bank and is provided as part of his
    compensation package.


         The Bank also owns a total of four ATMs, two of which are located in
the Denver banking office, one in the Denver drive-up facility and one in the
walk-up ATM located in the Boulder banking office.

Employees

         At September 30, 1997, the Company and Bank had 54 full-time equivalent
employees. None of the employees is covered by a collective bargaining agreement
and management of the Bank and Company believe that their relationships with
their employees is good.


Regulatory Matters

         As a registered bank holding company under the Bank Holding Company
Act, the Company is subject to the regulations and supervision of the Board of
Governors. The Bank Holding Company Act requires the Company to file reports
with the Board of Governors and provide any additional information requested
thereby.

         The Bank is a banking corporation organized under the laws of the State
of Colorado. The Bank is a member of the Federal Reserve System and its deposits
are insured by the FDIC. The Bank is subject to regulation, supervision and
regular examination by the Comptroller and the Division.

Selected Financial Data

         The following selected financial data should be read in conjunction
with the Company's consolidated financial statements and the related notes and
with the Company's management's discussion and analysis of financial condition
and results of operations, which are included in this Proxy
Statement/Prospectus.


                                       62

<PAGE>



TRI-STATE FINANCE CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                         As of and for the Nine Months                As of and for the
                                                 Ended September 30,               Year Ended December 31,
                                         -----------------------------         -----------------------------------------
                                             1997             1996               1996             1995             1994
                                         -----------       -----------          -------         -------          -------
                                                                (in thousands except share and per share data)
<S>                                       <C>               <C>             <C>               <C>               <C>     

Earnings Summary
Net interest income                       $  4,514          $ 4,015          $  5,530          $  4,914         $  4,309
Provisions for loan losses                       -                -                 -               450              718
Noninterest income                             660              640               853               888              864
Noninterest expense                          2,699            2,547             3,610             3,454            3,104
Income taxes                                   898              825               944               686              484
                                          --------          -------          --------          --------         --------
Net income                                $  1,577          $ 1,283          $  1,829          $  1,212         $    867
                                          ========          =======          ========          ========         ========

Common Stock Data
Earnings per common share                     2.11             1.72              2.45              1.66             1.21
Book value per share at period
  End                                        11.37             8.82              9.58              7.41             5.71
Weighted average common
  Shares outstanding during
  the period                               748,631          744,172           745,131           731,414          718,327

Average Balance Sheet Data
Securities                                  32,981           20,617            22,747            15,800           18,175
Loans and leases, net                       69,826           65,583            65,850            61,083           60,696
Total interest-earning assets              108,494           98,911            98,452            84,276           85,871
Total assets                               118,106          108,388           109,237            95,477           94,566
Interest-bearing deposits                   85,513           78,883            79,126            69,020           68,396
Total deposits                             107,611           98,998            99,408            86,099           87,698
Equity                                       7,896            6,020             6,360             4,848            3,878

End of Period Balance Sheet Data
Securities                                  37,090           27,433            31,339            16,288           17,968
Loans and leases, net                       71,034           64,193            67,853            63,193           60,366
Allowance for loan losses                    1,061            1,015             1,009               834              637
Total assets                               124,352          107,819           114,278           101,374           94,635
Total deposits                             112,721           97,909           104,037            93,037           87,618
Shareholders' equity                         8,511            6,603             7,169             5,440            4,102

Nonperforming assets:
  Nonaccrual loans and loans past
    due 90 days or more                         76               17                 7               555              164
  Other real estate owned                        -                -                 -                 -              141
                                          --------          -------          --------          --------         --------

Total non performing assets                     76               17                 7               555              305

Selected Ratios
Net interest margin                           5.54%            5.47%             5.62%             5.83%            5.30%
Return on average assets                      1.78%(a)         1.58%(a)          1.67%             1.27%            0.92%
Return on average equity                     26.63%(a)        28.41%(a)         28.76%            25.00%           22.35%
Ratio of ending equity to ending                                                             
  assets                                      6.84%            6.12%             6.27%             5.37%            4.33%
Ratio of nonperforming assets to                                                             
  total assets                                0.06%            0.02%             0.01%             0.55%            0.32%
Ratio of allowance for loan losses                                                           
  to loans and leases                                                                        
  outstanding at period end                   1.47%            1.56%             1.47%             1.30%            1.04%
Ratio of allowance for loan losses                                                           
  to nonperforming loans                     1,396%           5,970%           14,414%              150%             209%
</TABLE>

(a) Annualized.

                                       63
<PAGE>

Stock Prices and Dividends on Company Common Stock

        No established trading market for the Company's Common Stock exists.
Over the years, little trading in the Common Stock has occurred. Reliable
information concerning the prices at which the Company's Common Stock has traded
in private, negotiated transactions, is not publicly available or generally
known to the Company. On occasion, the Company has become aware of the trading
price of its stock and private transactions. Information concerning those
trading prices has been omitted based on the Company's belief that such prices
are not necessarily representative of the market price for the Company's Common
Stock during any particular period. Since September 23, 1997, the date the Plan
of Reorganization was publicly announced, there have been no trades in the
Company's Common Stock.

        The Company has paid cash dividends on its Common Stock each year since
1968. The following table sets forth the per share dividends declared and paid
during each of the last two years and the first three quarters of 1997.

   1995....................................................      $.15
   1996....................................................      $.30
   1997 first, second and third quarters...................      $.30

        As of November 15, 1997, there were approximately 54 holders of record
of the Company's Common Stock.

Information Concerning the Chairman, President and Chief Executive Officer of
the Company and the Bank

        Richard C. Tucker, Chairman, President and Chief Executive Officer of
the Company and the Bank will serve as an executive officer of Valley pursuant
to an Employment Agreement to be executed at Closing. See "Plan of
Reorganization --- Interests of Certain Persons in the Transaction" for
information concerning the Employment Agreement, a Covenant Not to Compete and
other matters relating to Mr. Tucker and the transaction.

        Richard C. Tucker, Chairman, President, Chief Executive Officer and
Chairman of the Bank and the Company, age 67, founded the Company in 1963: he
has served as Chairman, President and Chief Executive Officer of the Company and
the Bank since their respective inceptions. Mr. Tucker has over 43 years of
banking experience, starting his career in 1953 with a national finance company.
Through his career, Mr. Tucker has been actively involved with the banking
industry serving on numerous boards, including founding the Industrial Bank
Savings Guaranty Corporation in the early 1970's and serving for over 20 years
on the Board of Directors and as President of American Financial Services
Association (previously National Consumer Finance Association). He is a past
President of the Independent Bankers Association of Colorado and a past Board
member of the IBAA Bancard Board of Directors. Mr. Tucker has been involved with
community activities for many years and has received numerous community service
awards. He recently retired from the National Board of the Salvation Army after
having serving as a board member for the past 43 years.

        The total compensation paid to Mr. Tucker by the Bank for his services
for each of the years in the three-year period ended December 31, 1996, was
$126,000, $122,000 and $129,000, respectively, in each case consisting of salary
and bonus and, for the year ended December 31, 1996, $7,000 attributable to use
by Mr. Tucker on a rent-free basis of the apartment on the second floor of the
Bank's Executive Offices as his family residence. The Executive Offices are
located adjacent to the Bank's main facility on 616 East Speer Boulevard.

                                       64

<PAGE>

Certain Transactions of the Company

        The Bank has had banking transactions in the ordinary course of its
business with directors, officers, principal shareholders and their associates
on the same terms, including interest rates and collateral on loans, as those
prevailing at the same time for comparable transactions with unaffiliated
parties. To the extent that such transactions consisted of extensions of credit,
they did not, in the opinion of management, involve more than a normal risk of
collectibility or present other unfavorable features. As of September 30, 1997,
the Company's directors, executive officers, employees and their affiliates were
indebted to the Bank in the aggregate amount of $241,592, none of which such
loans were delinquent.

Stockholdings of Directors, Officers and Certain Others

        The following table sets forth as of November 30, 1997, the beneficial
ownership of (i) the Company's Class A Common Stock and Class B Common Stock by
each person known by the Company to own beneficially more than 5% of the
outstanding shares of such class and by Richard C. Tucker, the Company's Chief
Executive Officer, and (ii) the Company's Class A and Class B Common Stock by
each director of the Company and by directors and officers of the Company as a
group. Except as set forth in the notes to the table, each person, to the
Company's knowledge, has sole voting and investment power over the shares stated
as beneficially owned.

                                       65

<PAGE>

<TABLE>
<CAPTION>
                                                    Amount and Nature
                                                            of
                                                  Beneficial Ownership(1)          Percent of Class
                                                  -----------------------          ----------------
Name                                                Class A      Class B        Class A        Class B
<S>                                                <C>          <C>               <C>          <C>
Richard C. Tucker
616 East Speer Boulevard
Denver, Colorado 80203 ..........................    60,000(2)   220,838(3)        60.0%(2)    34.05%(3)
Richard D. Amen
4021 South Ivanhoe Lane
Englewood, Colorado 80110 .......................    40,000(4)    38,450(4)(5)     40.0%(4)     5.93%(4)(5)
Merrill R. Fie ..................................        --       80,147(6)        --          12.36%
Robert D. Baker .................................        --           --           --             --
James H. Downey .................................        --           --           --             --
Jesse B. Carraway ...............................        --       25,000           --           3.95%
Donald H. Schurr ................................        --       22,208           --           3.42%
All directors and officers as a group (9 persons)    60,000      395,141           60.0%       60.92%
</TABLE>
- ----------
(1)  Beneficial ownership includes shares over which the indicated beneficial
     owner exercises voting and/or investment powers.
(2)  Includes 30,000 shares of Common Stock Class A held by Mr. Tucker's wife,
     as to which Mr. Tucker disclaims beneficial ownership.
(3)  Includes 110,525 shares held by the Company's Profit Sharing Plan with Mr.
     Tucker as the sole Trustee and 35,565 shares held by Mr. Tucker's wife as
     to which he disclaims beneficial ownership.
(4)  Includes 1,000 shares held by Mr. Amen's wife.
(5)  Includes 16,950 shares held by Investments, Incorporated, a Colorado
     corporation in which, to the knowledge of the Company, Mr. Amen is a
     director, officer and shareholder.
(6)  Shares are held by Doraco (29,074 shares) and Merrillco (50,073 shares),
     each of which is a Colorado general partnership in which Mr. Fie and his
     wife are the partners.


                                       66


<PAGE>



                      MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
                          TRI-STATE FINANCE CORPORATION

         The following analysis of the Company's financial condition and the
results of operations for the nine months ended September 30, 1997 and 1996 and
for the years ended December 31, 1996, 1995 and 1994 should be read in
conjunction with the audited Consolidated Financial Statements of the Company
and notes thereto, and information presented elsewhere herein. Average balance
sheet data are based on average daily balances outstanding for the period.

General

         The Company's Consolidated Financial Statements show its financial
condition and information on a consolidated basis. The Bank is the only
operating unit of the Company. The differences between the Company's financial
condition and results of operations and those of the Bank have historically
consisted of the short-term notes payable and the subordinated long-term debt.

Net Interest Income

         For most financial institutions, the primary components of earnings are
net interest income. Net interest income is the difference between interest
income, principally from loan and investment securities portfolios, and interest
expense, principally on customer deposits and borrowings. Changes in net
interest income results from changes in volume, spread and margin. Volume refers
to the average dollar level of interest-earning assets and interest-bearing
liabilities. Spread refers to the difference between the average yield on
interest-earning assets and the average cost of interest-bearing liabilities.
Margin refers to net interest income divided by average interest-earning assets
and is influenced by the level and relative mix of interest-earning assets and
interest-bearing liabilities. During the fiscal years ended December 31, 1996,
1995, and 1994, average interest earning assets were $98.5 million, $84.3
million and $85.9 million, respectively. During these same periods, net interest
margin was 5.62%, 5.83% and 5.30% respectively. At September 30, 1997, average
interest-earning assets were $108.5 million and net interest margin was 5.54%.
See "Results of Operations."

         The following tables set forth for the periods indicated information
with regard to average balances of assets and liabilities, as well as the total
dollar amounts of interest income from interest earning assets and interest
expense on interest-bearing liabilities, resultant yields or costs, net interest
income, net interest spread, and net interest margin.


                                       67
<PAGE>

<TABLE>
<CAPTION>
                                                    September 30, 1997                           September 30, 1996
                                         ------------------------------------   ---------------------------------------------
                                                                            (Dollars in thousands)

                                          Average                     Average    Average                       Average
                                          Balance                       Rate     Balance        Interest        Rate
                                          -------                       ----     -------        --------        ----
<S>                                      <C>              <C>        <C>        <C>              <C>            <C>

INTEREST-EARNING ASSETS
Securities - Taxable .............       $ 31,872         1,539        6.44%    $ 19,886            907          6.08%
Securities - Nontaxable ..........            318            12        5.22%         315             12          5.14%
Federal Funds Sold ...............          5,687           233        5.47%      11,712            502          5.71%
Other investments ................            844            42        6.69%         458             14          4.19%
Loans ............................         70,869         5,503       10.35%      66,510          5,128         10.28%
Less allowance for loan losses ...         (1,043)                                  (927)
Less unrealized loss on securities
  available for sale .............            (53)                                   (42)
                                         --------         -----                  -------          -----
Net interest-earning assets ......        108,494         7,329        9.01%      97,912          6,563          8.94%

Noninterest earning assets .......          9,612            --                   10,476             --
                                         --------         -----                  -------          -----

Total Assets .....................        118,106         7,329        8.27%     108,388          6,563          8.07%
                                         ========         -----                  =======          -----

LIABILITIES
Interest-bearing DDA .............         15,613           252        2.15%      14,867            228          2.04%
MMDA .............................         22,759           586        3.43%      24,158            619          3.41%
Savings ..........................         12,171           309        3.39%      13,020            362          3.70%
Time Deposits $100,000 & over ....          6,139           279        6.07%       6,546            300          6.11%
Other time deposits ..............         28,831         1,232        5.70%      20,292            861          5.66%
                                         --------         -----                  -------          -----

Total Interest-bearing deposits ..         85,513         2,658        4.14%      78,883          2,370          4.01%

Notes Payable ....................          2,155           145        8.99%       2,036            133          8.74%

Other Borrowings .................            202            12        7.94%         607             45          9.81%
                                         --------         -----                  -------          -----
Total interest-bearing liabilities         87,870         2,815        4.27%      81,526          2,548          4.17%

Non-interest bearing DDA .........         22,098            --                   20,115             --
                                         --------         -----                   ------          -----

Total Deposits and Interest-        
  Bearing Liabilities.............        109,968         2,815        3.41%     101,641          2,548          3.34%
                                         ========         -----                  =======          ----- 
Net Interest Income ..............                        4,514                                   4,015
                                                          =====                                   =====
Interest Rate Spread .............                                     4.74%                                     4.77%
Net Interest Rate Margin .........                                     5.54%                                     5.47%

</TABLE>

                                       68
<PAGE>


<TABLE>
<CAPTION>

                                                                December 31, 1996                     December 31, 1995
                                                         ------------------------------      ------------------------------------
                                                                                (Dollars in thousands)
                                                         Average                  Average    Average                      Average
                                                         Balance     Interest      Rate      Balance       Interest        Rate
                                                         -------     --------      ----      -------       --------        ----
<S>                                                      <C>          <C>         <C>        <C>            <C>           <C>
INTEREST-EARNING ASSETS
Securities - Taxable..............................       $ 21,933     $1,359       6.20%     $14,414           821         5.70%
Securities - Nontaxable...........................            308         15       5.07%         429            22         5.22%
Federal Funds Sold................................          9,845        531       5.39%       7,393           428         5.79%
Other investments.................................            547         59      10.74%       1,080            52         4.85%
Loans.............................................         66,810      6,949      10.40%      61,880         6,607        10.68%
Less allowance for loan losses....................           (950)                              (797)
Less unrealized loss on securities                                                          
  available for sale..............................            (41)                              (123)
                                                         --------     ------                 -------         -----
                                                                                            
Net interest-earning assets.......................         98,452      8,913       9.05%      84,276         7,930         9.41%
                                                                                            
Noninterest earning assets........................         10,785                             11,201
                                                         --------     ------                 -------         -----
                                                                                            
Total Assets......................................        109,237      8,913       8.16%      95,477         7,930         8.31%
                                                         ========     ------                 =======         -----
LIABILITIES                                                                                 
Interest-bearing DDA..............................         14,746        301       2.04%      14,265           336         2.35%
MMDA..............................................         24,073        819       3.41%      20,753           743         3.58%
Savings...........................................         13,212        479       3.63%      12,107           473         3.90%
Time Deposits $100,000 & over.....................          6,129        374       6.11%       5,647           346         6.13%
Other time deposits...............................         20,966      1,195       5.70%      16,248           869         5.35%
                                                         --------     ------       ----      -------         -----
                                                                                            
Total Interest-bearing deposits...................         79,126      3,168       4.00%      69,020         2,767         4.01%
                                                                                            
Notes Payable.....................................          2,038        182       8.94%       2,058           205         9.97%
                                                                                            
Other Borrowings..................................            385         33       8.50%         511            44         8.69%
                                                         --------     ------       ----       ------         ----- 
                                                                                            
Total interest-bearing liabilities................         81,549      3,383       4.15%      71,589         3,016         4.21%
                                                                                            
Non-interest bearing DDA..........................         20,282                             17,079
                                                         --------     ------                  ------         -----
Total Deposits and Interest-                                                                
  Bearing Liabilities.............................        101,831      3,383       3.32%      88,668         3,016         3.40%
                                                         ========     ------                  ======         ----- 
Net Interest Income...............................                     5,530                                 4,914
                                                                       -----                                 =====
Interest Rate Spread..............................                                 4.90%                                   5.20%
Net Interest Rate Margin .........................                                 5.62%                                   5.83%
                                                                                        
</TABLE>

                                       69
<PAGE>


         The following table illustrates the changes in the net interest income
due to changes in volume and changes in interest rate. Changes attributable to
the combined effect of volume and interest rate have been allocated
proportionately to the change due to volume and the change due to interest rate.

<TABLE>
<CAPTION>
                                                September 30,                            December 31,
                                               1997 over 1996                          1996 over 1995
                                               --------------                          --------------

                                                                                       (Dollars in thousands)

                                          Due to        Due to                  Due to       Due to
                                          Volume         Rate      Total        Volume        Rate      Total
                                          ------         ----      -----        ------        ----      -----
 <S>                                      <C>          <C>         <C>         <C>           <C>          <C>
Interest-earning assets
Securities-Taxable ...............       $ 579         $ 53        $ 632       $  466        $  72        $ 538
Securities-Nontaxable ............          --           --           --           (6)          (1)          (7)
Federal Funds Sold ...............        (247)         (22)        (269)         132          (29)         103
Other investments ................          19            9           28          (57)          64            7
Loans ............................         338           37          375          513         (171)         342
                                         -----         ----        -----       ------        -----          ---

Total interest income ............         689           77          766        1,048          (65)         983
                                         -----         ----        -----       ------        -----        -----

Interest-bearing liabilities
Interest-bearing DDA .............         (12)         (12)         (24)         (10)          45           35
MMDA .............................          36           (3)          33         (113)          37          (76)
Savings accounts .................          21           32           53          (40)          34           (6)
Time deposits $100,000 and over ..          19            2           21          (29)           1          (28)
Other time deposits ..............        (365)          (6)        (371)        (269)         (57)        (326)
                                         -----         ----        -----       ------        -----         ---- 
Total interest-bearing liabilities        (301)          13         (288)        (461)          60         (401)

Notes payable ....................          (8)          (4)         (12)           2           21           23
Other borrowings .................          24            9           33           10            1           11
                                         -----         ----        -----       ------        -----         ----
Total interest-bearing liabilities        (285)          18         (267)        (449)          82         (367)
                                         -----         ----        -----       ------        -----         ----

Net interest income ..............         404           95          499          599           17          616
                                         =====         ====        =====       ======        =====         ====
</TABLE>

                                       70
<PAGE>


Results of Operations

Nine Months ended September 30, 1997 and 1996

         Overview. Net interest income increased $499,000 for the nine months
ended September 1997 to $4,514,000 from $4,015,000 for the nine months ended
September 30, 1996. There was no provision for loan losses in either the nine
months ended September 30, 1997 or 1996. Noninterest income remained relatively
stable, while noninterest expenses increase $152,000 to $2,699,000 from
$2,547,000 for the 1996 period. Income tax expense also increased $73,000 for
1997 to $898,000 from $825,000 for the 1996 period. Return on average assets and
return on average equity were 1.78% and 26.63%, respectively for the nine months
ended September 30, 1997 compared to 1.58% and 28.41%, respectively, for 1996.

         Interest and Fee Income. Interest income increased $767,000 to
$7,330,000 for the nine months ended September 30, 1997 from $6,563,000 for the
nine months ended September 30, 1996. Interest income on loans increased
$375,000 and interest income on securities increased $632,000 for the nine
months ended September 30, 1997 compared to the same period in 1996. These
increases were somewhat offset by a decrease in interest on federal funds sold
of $268,000 to $233,000 for the nine months ended September 30, 1997 from
$502,000 for the same period in 1996. These increases in loans were the result
of the Bank's strong marketing efforts. The growth in investment securities is
also a result of the overall growth of the Bank as well as a shift from
investing in federal funds sold to short-term investment securities. The rates
earned on loans and investments have remained relatively stable.

          Interest Expense. Interest expense increased $288,000 to $2,815,000
for the nine months ended September 30, 1997 from $2,548,000 for the nine months
ended September 30, 1996. Interest expense on interest-bearing deposits
increased $288,000 in the nine month period caused primarily by a $371,000
increase in interest expense on other time deposits which includes certificates
of deposit less than $100,000. Expense on other deposits types including
interest-bearing DDA, money market, savings and certificates of deposit accounts
greater than $100,000 were down $130,000 in 1997 when compared to the nine
months ending September 30, 1996. Interest expense on notes payable and other
borrowings decreased $19,000 to $157,000 from $176,000. The increase in interest
expense on interest-bearing deposits was primarily due to greater deposit volume
in the nine months ended September 30, 1997 when compared to 1996, and due to a
shift from other deposit types to higher yielding certificates of deposit less
than $100,000. Rates paid on deposits have remained relatively stable. The
decrease in expense on notes payable and other borrowings was due to the Company
paying off a mortgage note payable in 1996.

         Net Interest Income. Net interest income increased $499,000 to
$4,514,000 for the nine months ending September 30, 1997 from $4,015,000 for the
same period in 1996. During the nine months ending September 30, 1997, average
loans outstanding increased $4,359,000, average securities increased $11,989,000
while net interest spread decreased from 4.77% for 1995 to 4.74% for the period
ending September 30, 1997 when compared to the same period in 1996.

                                       71


<PAGE>

         Noninterest Income. Noninterest income increased $20,000 to $660,000
for the nine months ended September 30, 1997 from $640,000 for 1996. This
relates to a $22,000 increase in service charge income. Other income was down
$2,000 in this period.

         Noninterest Expense. Noninterest expense increased $152,000 to
$2,699,000 in the nine months ended September 30, 1997 from $2,547,000 for the
same period in 1996. The increase is the result of an increase in salaries and
employee benefits of $147,000 for the nine months ended September 30, 1997.

Provision for Loan Losses

         The Company's provision for loan losses for the period ended September
30, 1997 and 1996 was zero.

Income Taxes

         The Company's income tax expense for the nine months ended
September 30, 1997 and 1996, was $898,000 and $825,000, respectively.

Year ended December 31, 1996 and 1995

         Overview. Net income increased $617,000 for 1996 to $1,829,000 from
$1,212,000 in 1995. Net interest income increased $616,000. The Bank's provision
for loan loss was down from $450,000 in 1995 to $0 in 1996. Noninterest income
remained relatively unchanged, while noninterest expenses increased $156,000 to
$3,610,000 from $3,454,000 in 1995. Income tax expense also increased $258,000
for 1996 to $944,000 from $686,000. Return on average assets and return on
average equity were 1.67% and 28.76%, respectively for 1996 compared to 1.69%
and 25.00%, respectively, for 1995.

         Interest and Fee Income. Interest income increased $982,000 to
$8,913,000 for 1996 from $7,931,000 for 1995. Interest income from loans
increased $343,000 and interest income on securities increased $532,000 in 1996.
Interest income on federal funds sold also increased $103,000 in 1996. This
increase in net interest income from loans was primarily due to an increase in
the total loans outstanding, as the interest rates were relatively stable in
1996. The increases in interest income on securities and federal funds sold were
also due primarily to increases in the total balances outstanding as these rate
were also relatively stable.

         Interest Expense. Interest expense increased $366,000 to $3,383,000 for
1996 from $3,017,000 in 1995. Interest expense on interest-bearing deposits
increased $400,000. Interest expense on notes payable and subordinated long-term
debt decreased $35,000 from $248,000 to $215,000. The increase in interest
expense on interest-bearing deposits was primarily due to greater deposit volume
in 1996, as the rates paid on interest-bearing deposits were relatively
unchanged. The volume of notes payable and subordinated debt were up slightly as
were the rates paid on these borrowings.

         Net Interest Income. Net interest income increased $616,000 to
$5,530,000 for 1996 from $4,914,000 for 1995. During 1996, average loans
outstanding increased $4,930,000, average securities increased $6,947,000 and
net interest spread decreased from 5.20% for 1995 to 4.90% for 1996. The
increase in net interest income resulted from the Bank's ability to increase the
percentage of loans to total assets.


                                       72

<PAGE>

         Noninterest Income. Noninterest income decreased $35,000 to $853,000
for 1996 from $888,000 for 1995. This reflects a $43,000 decrease in service
charge income. Other income was up $8,000 in 1996.

         Noninterest Expense. Noninterest expense increased $156,000 to
$3,610,000 in 1996 from $3,454,000 for 1995. The increase is the result of the
following factors: (1) Salaries and wages increased $206,000 primarily due to
increased staffing and annual wage increases; (2) Net occupancy expenses
increased $130,000 due to the additional depreciation on significant purchases
of computer and customer service equipment which has always been charged to
occupancy expense; (3) FDIC assessments decreased $114,000 due to a decrease in
the premiums paid by banks; (4) Other operating expenses decreased $67,000 as
depreciation expense decreased $113,000 due to leased vehicles that were
acquired in 1995 and subsequently sold as the Bank discontinued this leasing
program. Licenses and taxes expense decreased $39,000. Increases in computer,
office and supplies expense of $68,000 in 1996 somewhat offset the other
decreases.

Provision for Loan Losses

         The Company's provision for loan losses for the period ended December
31, 1996 and 1995 was $0 and $450,000, respectively.

Income Taxes

         The Company's income tax expense for the years ended December 31, 1996
and 1995 $944,000, and $686,000, respectively.

Year ended December 31, 1995 and 1994

         Overview. Net income increased $345,000 for 1995 to $1,212,000 from
$867,000. Net interest income increased $605,000. The Bank's provision for loan
loss was down from $718,000 in 1994 to $450,000 in 1995. Noninterest income
remained unchanged, while noninterest expenses increased $350,000 to $3,454,000
from $3,104,000 in 1994. Income tax expense also increased $202,000 for 1995 to
$686,000 from $484,000. Return on average assets and return on average equity
were 1.69% and 25.00%, respectively for 1995 compared to 0.92% and 22.35% ,
respectively, for 1994.

         Interest and Fee Income. Interest income increased $1,082,000 to
$7,931,000 for 1995 from $4,848,000 for 1994. Interest income from loans
increased $1,108,000 and interest income on securities decreased $85,000 in
1995. Interest income on federal funds sold increased $84,000 in 1995. This
increase in net interest income from loans was primarily due to an increase in
rates earned loans outstanding, as the loan volume were relatively stable in
1995. The increases in interest income on federal funds sold were also due
primarily to an increase in rates as volumes were also relatively stable. The
decrease in earnings on investments was due primarily to a $1,823,000 decrease
in the outstanding securities volume in 1995.

                                       73

<PAGE>

         Interest Expense. Interest expense increased $478,000 to $3,017,000 for
1995 from $2,539,000 in 1994. Interest expense on interest-bearing deposits
increased $478,000. Interest expense on notes payable and subordinated long-term
debt was unchanged. This increase in interest expense on interest-bearing
deposits was primarily due to greater deposit volume in 1995, as the rates paid
on interest-bearing deposits decreased. The volume of notes payable and
subordinated debt were up slightly but were fully offset by a decrease in the
rates paid on these borrowings.

         Net Interest Income. Net interest income increased $604,000 to
$4,914,000 for 1995 from $4,310,000 for 1994. During 1995, the average rates on
loans outstanding increased from 8.96% to 10.68%, and average rates earned on
federal funds sold increased 4.91% to 5.79%. Net interest spread decreased from
3.91% for 1994 to 5.2% for 1995.

         Noninterest Income. Noninterest income increased $24,000 to $888,000
for 1995 from $864,000 for 1994. This relates to a $22,000 increase in service
charge income. Other income was up $2,000 in 1995.

         Noninterest Expense. Noninterest expense increased $350,000 to
$3,454,000 in 1995 from $3,104,000 for 1994. The increase is the result of the
following factors: (1) Salaries and wages increased $121,000 primarily due to
increased staffing and annual wage increases; (2) Other operating expenses
increased $326,000 as computer expense increased $42,000, license and taxes
increased $62,000, credit card fees increased $28,000, and depreciation expense
on leases increased $85,000.
Other miscellaneous items account for the rest of the difference from year to
year.

Provision for Loan Losses

         The Company's provision for loan losses for the period ended December
31, 1995 and 1994 was $450,000 and $718,000, respectively.

Income Taxes

         The Company's income tax expense for the years ended December 31, 1995
and 1994 was $686,000, and $484,000, respectively. The Company's effective tax
rate differs from the expected 34% exacted tax rate due to state income taxes on
income which serves to increase tax expense and which is partially offset by
interest income received on tax-exempt securities.

Liquidity and Sources of Funds

         The Company's primary sources of funds are customer deposits, sales and
maturities of investment securities loan repayments, and increase in borrowing
on notes payable and long-term subordinated debt. These funds are used to make
loans to acquire investment securities and other assets and to fund the
operations of the Company. During the year ended December 31, 1996, deposits
increased to $104,037,000 from $93,037,000 and $87,618,000 at December 31, 1995
and 1994, respectively. None of the deposits at December 31, 1996, 1995 or 1994
were brokered funds. Management believes the increases in the deposits in 1995
and 1996 were from (1) the success of the Bank's officer call program, (2) the
referrals from existing customers and (3) overall growth in the Denver/Boulder
metropolitan area, which remains a very strong economy. At December 31, 1996 net
loans were $67,853,000 compared to $63,193,000 and $60,356,000 at December 31,
1995 and 1994, respectively. Notes payable and subordinated long-term debt
totaled $2,791,000 at December 31, 1996 compared to $2,447,000 and $2,690,000 at
December 31, 1995 and 1994, respectively. This serves as a secondary source of
liquidity at the holding company.

                                       74

<PAGE>

         Management anticipates that the Company will continue to rely primarily
of customer deposits, sales of investment securities, loan sales, and loan
repayments as well as retained earnings to provide liquidity, and will use the
funds so provided to make loans and purchase securities. The Company believes
the customer deposits provide a strong source of liquidity because of the high
percentage of core deposits. As a secondary source of funds, management uses
federal funds purchased.

Capital Resources

         The Company's total stockholders' equity increased to $7,169,000 at
December 31, 1996 from $5,481,000 at December 31, 1995. This is an increase of
$1,688,000 and is the result of increased retained earnings. At December 31,
1996, stockholders' equity was 6.27% of total assets compared to 5.37% of total
assets at December 31, 1995. Dividends paid were $222,000 and $110,000 in 1996
and 1995, respectively. Management expects no material change in this dividend
policy.

         The Federal Reserve Board and FDIC guidelines call for a 4% Tier 1
capital to risk-weighted asset ratio, 8% total capital to risk-weighted asset
ratio, and a 5% leverage ratio. The Company and the Bank currently exceed the
applicable regulatory capital requirements. The following table sets forth the
Company's and the Bank's capital ratios at December 31, 1996.

Bank

Tier 1 Capital..............................................      $ 8,813,000
Total Capital ..............................................      $ 9,755,000
Risk-Weighted Assets........................................      $79,210,000
Tier 1 Capital to Risk-Weighted Assets......................             11.1%
Total Capital to Risk-Weighted Assets.......................             12.3%
Leverage Ratio..............................................              7.8%

The Company anticipates no material capital expenditures.

Effects of Inflation and Changing Prices

         The primary impact of inflation on the Company's operation is the
effect it has on operating costs. Unlike most industrial companies, almost all
of the Company's resources are monetary in nature. As a result, increases in
interest rates have more of an impact on the Company that does the effects of
inflation. Although interest rates do not necessarily track with inflation, the
Federal Reserve has generally used an increase in interest rates to dampen
inflation. The effects of inflation can magnify the growth of assets in the
banking industry. This could serve to cause the demands on capital to be greater
than would otherwise be necessary.

                                       75

<PAGE>

New Accounting Principles

         The Financial Accounting Standard Board recently adopted Statement No.
125 (FAS 125), "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities". FAS 125, which is effective for transactions
that occur after December 31, 1996, imposes new rules for determining when
transfers of financial assets are accounted for as sales versus when transfers
are accounted for as borrowings. Management believes that the adoption of FAS
125 will have no material impact on the financial statements.

                    COMPARISON OF THE RIGHTS OF SHAREHOLDERS
                            OF ZIONS AND THE COMPANY

General

         Upon consummation of the Reorganization, shareholders of the Company, a
Colorado corporation, will become shareholders of Zions, a Utah corporation.
Thus, the Utah Revised Business Corporation Act and Zions' Articles of
Incorporation ("Articles") and Bylaws will govern the rights of the Company
shareholders who become Zions shareholders. In addition, since the Articles and
Bylaws of Zions and the Company are not the same, the Reorganization will result
in certain differences in the rights of the holders of Company Common Stock.
Following is a summary of certain significant differences.

         General. The Company's Articles of Incorporation have authorized the
Company to issue 100,000 shares of Class A Common Stock ("Class A Company Common
Stock") and 900,000 shares of Class B Common Stock ("Class B Company Common
Stock"). Each holder of Class A Company Common Stock is entitled to one vote for
each share held on all matters submitted to the shareholders for a vote, except
as stated below. Holders of a majority of the voting power of the Company
constitute a quorum for the transaction of business. Holders of Class B Company
Common Stock have no right to vote their shares of Class B Company Common Stock.
Each holder of Zions Common Stock is generally entitled to one vote for each
share held of record on all matters submitted to a shareholder vote, and holders
of a majority of the outstanding shares of Zions Common Stock constitute a
quorum for the transaction of business.

         Cumulative Voting. Zions shareholders do not have cumulative voting
rights in the election of directors. The holders of Class A Company Common Stock
have cumulative voting rights. The absence of cumulative voting means that a
nominee for director must receive the votes of a plurality of the shares voted
in order to be elected. Possession of cumulative voting rights means that in the
election of directors a shareholder will have total votes equal to his or her
number of shares multiplied by the number of directors being elected and the
shareholder will have the right to cast all of his or her votes for one
candidate or distribute his or her votes among two or more of the candidates for
director in whatever proportion the shareholder determines. If there are more
candidates for election than director slots available to be filled, those
persons receiving the most votes will be elected as directors.

         Special Votes for Certain Transactions. The Articles of Zions contain
provisions requiring special shareholder votes to approve certain types of
transactions. In the absence of these provisions, either the transactions would
require approval by a majority of the shares voted at a meeting or no
shareholder vote would be required.

                                       76


<PAGE>

         Zions' Articles require that certain "business transactions" between
Zions or a subsidiary and a "related person" be approved by the affirmative
votes of the holders of not less than 80 percent of the voting power of all
outstanding voting stock of Zions. A "related person" is generally defined by
Zions' Articles to mean a person, corporation, partnership, or group acting in
concert that beneficially owns 10 percent or more of the voting power of Zions'
outstanding voting stock.

         The "business transactions" with a "related person" which are subject
to Zions' special vote requirements include (1) a merger or consolidation
involving Zions or a subsidiary of Zions with a related person; (2) the sale,
lease, exchange, transfer or other disposition of all or any substantial part of
the assets of either Zions or a subsidiary of Zions to, with or for the benefit
of a related person; (3) the issuance, sale, exchange or other disposition by
Zions or a subsidiary of Zions to a related person of securities of Zions or a
subsidiary of Zions having an aggregate fair market value of $5 million or more;
(4) any liquidation, spinoff, splitoff, splitup, or dissolution of Zions by or
on behalf of a related person; (5) any recapitalization or reclassification of
the securities of Zions or other transaction that would have the effect of
increasing the voting power of a related person or reducing the number of shares
of each class of voting securities outstanding; and (6) any agreement, contract,
or other arrangement providing for any of the transactions set forth above.

         Zions' special shareholder vote requirements for business transactions
with related persons do not apply to any transaction approved by a majority of
the continuing directors, or if various specified conditions are met. A
continuing director is any member of the Zions Board who is not a related person
or an interested shareholder or an affiliate or associate of a related person
and who (1) was a director on February 21, 1986 or (2) became a director
subsequent to that date and whose election or nomination for election by Zions'
shareholders was approved by a majority of the continuing directors then on the
Board.

         The Company's Articles provide that the Company may, by a vote of the
majority of its directors, sell, lease, exchange and/or convey all of its
property and assets upon terms the board shall determine. The consideration for
such assets may consist of shares of stock or other securities of another
corporation or corporations provided that in all such cases the holders of at
least two-thirds of the stock of the Company issued and outstanding must vote to
ratify such action.

Shareholder Rights Plan

         The Board of Directors of Zions in September 1996 adopted a Shareholder
Protection Rights Plan and declared a dividend of one Right on each outstanding
share of Zions Common Stock. The Rights Plan was not adopted in response to any
specific effort to acquire control of Zions. Rather, it was adopted to deter
abusive takeover tactics that can be used to deprive shareholders of the full
value of their investment.


                                       77


<PAGE>

         Until it is announced that a person or group has acquired 10 percent or
more of Zions Common Stock (an "Acquiring Person") or commences a tender offer
that will result in such person or group owning 10 percent or more of Zions
Common Stock, the Rights will be evidenced by the Common Stock certificates,
will automatically trade with the Common Stock and will not be exercisable.
Thereafter, separate Rights certificates will be distributed and each Right will
entitle its holder to purchase Participating Preferred Stock having economic and
voting terms similar to those of Zions Common Stock for an exercise price of
$90.00.

         Upon announcement that any person or group has become an Acquiring
Person, then 10 days thereafter (or such earlier or later date as the Board may
decide) (the "Flip-in Date") each Right (other than Rights beneficially owned by
any Acquiring Person or transferees thereof, which Rights become void) will
entitle its holder to purchase, for the exercise price, a number of shares of
Zions Common Stock or Participating Preferred Stock having a market value of
twice the exercise price.

         Also, if after an Acquiring Person controls Zions' Board of Directors
Zions is involved in a merger or sells more than 50 percent of its assets or
earning power (or has entered an agreement to do any of the foregoing) and, in
the case of a merger, the Acquiring Person will receive different treatment than
all other shareholders or the person with whom the merger occurs is the
Acquiring Person or a person affiliated or associated with the Acquiring Person,
each Right will entitle its holder to purchase, for the exercise price, a number
of shares of common stock of the Acquiring Person having a market value of twice
the exercise price. If any person or group acquires between 10 percent and 50
percent of the Zions Common Stock, Zions' Board of Directors may, at its option,
exchange one share of Zions Common Stock for each Right.

         The Rights may be redeemed by the Board of Directors for $0.01 per
Right prior to the Flip-in Date.

         The Company has no shareholder rights plan.

Board of Directors

         Director Liability and Indemnification. Zions' Articles contain a
"director liability" provision. The provision generally shields a director from
monetary damages to Zions or its shareholders for a breach of fiduciary duty as
a director other than (i) a breach of a director's duty of loyalty, (ii) acts or
omissions not taken in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) authorizing the unlawful payment of dividends,
and (iv) transactions in which a director receives an improper benefit.

         The Company's Articles do not contain a director liability provision.

         The Company's Bylaws provide that the Company shall indemnify a
director or officer against expenses incurred in any proceeding to which he may
be a party by reason of his being or having been a director or officer of the
Company, except in relation to matters as to which he shall be finally adjudged
in such proceeding to be liable for negligence or misconduct.

         Classified Board. Zions' Articles divide the Board of Directors into
three classes, each consisting of one-third (or as near as may be) of the whole
number of directors. Utah law requires that each class contain as equal a number
of directors as possible. One class of directors is elected at each annual
meeting of shareholders, and each class serves for a term of three years.

                                       78



<PAGE>

         The number of directors which constitute Zions' full Board of Directors
may be increased or decreased only by amendment of the Bylaws, which requires
the affirmative vote of two-thirds of the total number of directors constituting
the entire Board, or by the shareholders of Zions at a regular or special
meeting by the affirmative vote of two-thirds of the outstanding and issued
shares entitled by statute to vote. Except as otherwise required by law,
vacancies on Zions' Board of Directors, including vacancies resulting from an
increase in the size of the Board, may be filled by the affirmative vote of a
majority of the remaining directors even though less than a quorum of the Board
of Directors. Zions' directors elected by the Board to fill vacancies serve for
the full remainder of the term of the class to which they have been elected. Any
directorship filled by reason of an increase in the number of directors may be
filled for a term of office continuing only until the next election of directors
by the shareholders.

         The Company's Articles and Bylaws do not provide for a classified Board
of Directors. Instead, the Company's Articles provide for a Board of Directors
consisting of six individuals, who are to be elected by the shareholders
annually. Any vacancy occurring in the Company's Board may be filled by the
affirmative vote of a majority of the remaining directors though less than a
quorum of the Board.

         Removal of Directors. Zions' Articles provide that any director (or the
entire Board of Directors) may be removed from office by shareholder vote only
if such removal is approved by the holders of two-thirds of the issued and
outstanding shares then entitled to vote at an election of directors.

         The Company's Bylaws provide that the shareholders may remove directors
at a meeting called for the express purpose of removing directors, by a majority
vote of the shares entitled to vote at an election of directors, with or without
cause, provided that if less than the entire board is to be removed, no one
director may be removed if the votes of a sufficient number of shares are cast
against his removal which, if then cumulatively voted at an election of the
entire board of directors would be sufficient to elect him.

Special Shareholders' Meetings

         Utah law provides that special meetings of a corporation's shareholders
may be called by the board of directors or such other persons authorized by the
bylaws to call a special meeting or by the holders of at least 10 percent of all
the votes entitled to be cast on any issue proposed to be considered at the
special meeting.
Under Zions' Bylaws, special meetings may be called by the president or by the
Board of Directors.

         The Company's Bylaws permit special meetings to be called by the Board
of Directors, the president (or in the president's absence by a vice president),
or by the holders of shares entitled to cast not less than 10 percent of all
shares entitled to vote on the subject matter for which the meeting is called.
The Company's Bylaws also permit special meetings to be called by the
shareholders for the purpose of filling a vacancy in the Board of Directors.


                                       79


<PAGE>

Amendment of Articles and Bylaws

         Zions' Articles require the affirmative votes of the holders of
two-thirds of all outstanding voting stock of Zions to approve certain
amendments to Zions' Articles, except that to repeal or amend the provisions in
the Articles regarding business transactions with related persons requires the
affirmative vote of 80% of the issued and outstanding stock entitled to vote.
Zions' Bylaws may be amended by an affirmative vote of two-thirds of the total
number of directors constituting the entire Board or by the affirmative vote of
two-thirds of the issued and outstanding shares entitled to vote.

         The Company's Bylaws may be amended by the affirmative vote of a
majority of the Board of Directors at the annual meeting of the Board or at any
special meeting called for that purpose.

Dissenters' Rights

         Zions is incorporated under the laws of Utah. Utah law provides for
dissenters' rights in a variety of transactions including: (i) consummation of
any plan of merger to which a corporation is a party (other than mergers or
consolidations not requiring a shareholder vote); (ii) consummation of certain
sales, leases, exchanges or other dispositions of all or substantially all of
the assets of a corporation; and (iii) consummation of certain share exchanges.
However, shareholders of a Utah business corporation are not entitled to
dissenters' rights in any of the transactions mentioned above if their stock is
either listed on a national securities exchange or on the National Market System
of NASDAQ or held of record by 2,000 or more shareholders. The aforementioned
provisions do not apply if the shareholder will receive for his shares anything
except (a) shares of the corporation surviving the consummation of the plan of
merger or share exchange, (b) shares of a corporation whose shares are listed on
a national securities exchange or the National Market System of NASDAQ or held
of record by not less than 2,000 holders, or (c) cash in lieu of fractional
shares. Zions Common Stock currently is listed for trading in the National
Market System of NASDAQ and has more than 2,000 shareholders of record.

         The Company is incorporated under Colorado law. Colorado law provides
for dissenters' rights to any shareholder of a Colorado corporation in the event
of any of the following corporate actions: (i) consummation of a merger to which
the corporation is a party if approval by the shareholders is required for the
merger or the corporation is a subsidiary that is merged with its parent
corporation; (ii) consummation of a plan of exchange where the corporation is a
party as the corporation whose subject owner's interests will be acquired; (iii)
consummation of a disposition of all or substantially all of the property of the
corporation for which a shareholder vote is required; (iv) consummation of a
disposition of all or substantially all of the property of an entity controlled
by the corporation if the shareholders of the corporation were entitled to vote
upon the consent of the corporation to such disposition; or (v) in the event of
any corporate action to the extent provided by the bylaws or a board resolution.
Colorado law regarding dissenters' rights contains the same provisions as Utah
law described in the third and fourth sentences of the prior paragraph.


                                       80



<PAGE>

Preemptive Rights

         Holders of Zions Common Stock do not have the preemptive right to
purchase unissued or treasury shares of Zions Common Stock or any other
securities of Zions in the event of an issuance of Zions Common Stock or such
other securities.

         Holders of Company Common Stock do not have the preemptive right to
acquire additional shares of Company Common Stock.

Preferred Stock

         Zions' Articles authorize Zions to issue up to 3,000,000 shares of
Zions preferred stock, no par value.

         The authorized shares of preferred stock are issuable in one or more
series on the terms set by the resolution or resolutions of the Board of
Directors of Zions providing for the issuance thereof. Each series of preferred
stock would have such dividend rate, which might or might not be cumulative,
such voting rights, which might be general or special, and such liquidation
preferences, redemption and sinking funds provisions, conversion rights or other
rights and preferences, if any, as the Board of Directors may determine. Except
for such rights as may be granted to the holders of any series of preferred
stock in the resolution establishing such series or as required by law, all of
the voting and other rights of the shareholders of Zions belong exclusively to
the holders of common stock.

         Zions has reserved 160,000 shares of Participating Preferred Stock for
issuance upon exercise of the Rights under Zions' Shareholder Rights Plan.

         The Company's Articles do not authorize the Company to issue any shares
of preferred stock.

Dividend Rights

         Utah law generally allows a corporation, subject to restrictions in its
articles of incorporation, to declare and pay dividends in cash or property, but
only if the corporation is solvent and payment would not render the corporation
insolvent. Zions' Articles place no further restrictions on distributions. Thus,
the holders of Zions Common Stock are entitled to dividends when, as and if
declared by the Board of Directors out of funds legally available therefor.
However, if Zions preferred stock is issued, the Board of Directors of Zions may
grant preferential dividend rights to the holders of such stock which would
prohibit payment of dividends on Zions Common Stock unless and until specified
dividends on the preferred stock had been paid.

         Colorado law generally allows a corporation to make distributions to
its shareholders in cash, property or its own shares. However, no distribution
may be made if, after giving it effect: (i) the corporation would not be able to
pay its debts as they become due in the usual course of business; or (ii) except
as otherwise specifically allowed by the corporation's articles of
incorporation, the corporation's total assets would be less than the sum of its
total liabilities plus the amount that would be needed, if the corporation were
to be dissolved at the time of distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
receiving the distribution. The Company's Articles do not contain any other
specific allowance. Thus, holders of Company Common Stock are entitled to
distributions when, as and if declared by the Board of Directors out of funds
legally available therefor.


                                       81

<PAGE>

Liquidation Rights

         Upon liquidation, dissolution or winding up of Zions, whether voluntary
or involuntary, the holders of Zions Common Stock are entitled to share ratably
in the assets of the corporation available for distribution after all
liabilities of the corporation have been satisfied. However, if preferred stock
is issued by Zions, the Board of Directors may grant preferential liquidation
rights to the holders of such stock which would entitle them to be paid out of
the assets of Zions available for distribution before any distribution is made
to the holders of Zions Common Stock.

         Upon liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, the holders of Company Common Stock are entitled to
share ratably in the assets of the corporation available for distribution after
all liabilities of the corporation have been satisfied.

Miscellaneous

         There are no sinking fund provisions, conversion rights, or redemption
provisions applicable to Zions Common Stock. Holders of fully paid shares of
Zions Common Stock and Company Common Stock are not subject to any liability for
further calls or assessments.

                                 LEGAL OPINIONS

         An opinion with respect to certain legal matters in connection with the
Reorganization will be rendered by Duane, Morris & Heckscher LLP, Washington,
D.C., as counsel for Zions, and by Baker & Hostetler LLP, Denver, Colorado, as
counsel for the Company.

                                     EXPERTS

         The consolidated financial statements of Zions as of December 31, 1996
and 1995, and for each of the years in the three-year period ended December 31,
1996, incorporated by reference herein have been incorporated by reference
herein in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of such firm as experts in auditing and accounting.

         The consolidated financial statements of the Company as of December 31,
1996, and for the year then ended, have been included herein in reliance upon
the report of Baird, Kurtz & Dobson, independent certified public accountants,
appearing elsewhere herein, such report having been given upon their authority
as experts in auditing and accounting.


                                       82


<PAGE>

         The consolidated financial statements of the Company as of December 31,
1995, and for the year then ended, included herein have been included herein in
reliance upon the report of McGladrey & Pullen LLP, independent certified public
accountants, appearing elsewhere herein, and upon their authority as experts in
auditing and accounting.

         The consolidated financial statements of the Company for the year ended
December 31, 1994, included herein have been included in reliance upon the
report of KPMG Peat Marwick LLP, independent certified public accountants,
appearing elsewhere herein, and upon the authority of such firm as experts in
auditing and accounting.

         The fairness opinion, attached hereto as Appendix A, was prepared by
The Wallach Company, Inc., Denver, Colorado, an investment banking firm engaged
in the valuation of businesses and their securities in connection with mergers
and acquisitions, private placements, and valuations for corporate and other
purposes.

                                  OTHER MATTERS

         The management of the Company does not know of any other matters
intended to be presented for shareholder action at the Special Meeting. If any
other matter does properly come before the Special Meeting and is put to a
shareholder vote, the proxies solicited hereby will be voted in accordance with
the judgment of the proxyholders named thereon.


                                       83

<PAGE>



                CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY




















                                       84


<PAGE>



                          Tri-State Finance Corporation

                       Independent Accountants' Report and
                        Consolidated Financial Statements

                          September 30, 1997 and 1996,
                                       and
                        December 31, 1996, 1995, and 1994






                                     [LOGO]

<PAGE>






                          TRI-STATE FINANCE CORPORATION

                          SEPTEMBER 30, 1997 AND 1996,
                                       AND
                        DECEMBER 31, 1996, 1995, AND 1994



                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----


INDEPENDENT ACCOUNTANTS' REPORTS                                      F-1 to F-3


CONSOLIDATED FINANCIAL STATEMENTS
  Balance Sheets                                                           F-4
  Statements of Income                                                     F-5
  Statements of Changes in Stockholders' Equity                       F-6, F-7
  Statements of Cash Flows                                            F-8, F-9
  Notes to Financial Statements                                            F-10



<PAGE>


                         Independent Accountants' Report
                         -------------------------------


To the Board of Directors and Stockholders
Tri-State Finance Corporation
Denver, Colorado

    We have audited the accompanying consolidated balance sheet of TRI-STATE
FINANCE CORPORATION as of December 31, 1996, and the related consolidated
statements of income, stockholders' equity, and cash flows 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.

    We conducted our audit in accordance with generally accepted auditing
standards. 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of TRI-STATE
FINANCE CORPORATION as of December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.


                                         /s/ Baird, Kurtz & Dobson
                                         -------------------------
                                         Baird, Kurtz & Dobson

January 24, 1997


                                       F-1
<PAGE>


                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors
Tri-State Finance Corporation
Denver, Colorado

We have audited the accompanying consolidated balance sheet of Tri-State Finance
Corporation and its wholly-owned Subsidiary (Tri-State Bank), as of December 31,
1995, and the related consolidated statements of income, stockholders' equity
and cash flows for the year then ended. These consolidated 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.

We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financials 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 1995 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Tri-State
Finance Corporation and Subsidiary as of December 31, 1995, and the results of
their operations and their cash flows for the year then ended, in conformity
with generally accepted accounting principles.

                                     /s/ McGladrey & Pullen, LLP
                                     ---------------------------
                                     McGladrey & Pullen, LLP

Denver, Colorado
January 13, 1996

                                      F-2

<PAGE>


                          Independent Auditors' Report





The Board of Directors
Tri-State Finance Corporation:


We have audited the accompanying consolidated statements of income,
stockholder's equity and cash flows of Tri-State Finance Corporation and
subsidiary for the year ended December 31, 1994. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audit in accordance with generally accepted auditing
standards. 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 audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Tri-State Finance Corporation and subsidiary for the year ended December 31,
1994 in conformity with generally accepted accounting principles.



                                     /s/ KPMG Peat Marwick LLP

Denver, Colorado
April 21, 1995



                                      F-3


<PAGE>



                          TRI-STATE FINANCE CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                               SEPTEMBER 30, 1997
                                       AND
                           DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
                                                                           (UNAUDITED)
                      ASSETS                                           September 30, 1997          1996             1995
                      ------                                           ------------------          ----             ----

<S>                                                                        <C>                 <C>             <C>         
Cash and due from banks                                                    $   4,937,678       $ 7,337,429     $  6,185,948
Federal funds sold                                                             7,260,000         3,695,000       11,835,000
                                                                           -------------       -----------     ------------
                  Total cash and cash equivalents                             12,197,678        11,032,429       18,020,948

Held-to-maturity securities                                                   29,413,695        21,976,950       13,557,755
Available-for-sale securities                                                  7,220,089         8,936,919        2,617,547
Other investments                                                                455,750           425,750          112,550
Loans, net                                                                    71,034,409        67,852,783       63,193,300
Bank premises and equipment, net                                               2,770,631         3,014,698        3,023,483
Accrued interest receivable                                                      923,721           753,653          578,837
Other assets                                                                     335,955           284,912          269,340
                                                                            ------------      ------------     ------------
                                                                            $124,351,928      $114,278,094     $101,373,760
                                                                            ============      ============     ============

           LIABILITIES AND STOCKHOLDERS' EQUITY
           ------------------------------------

LIABILITIES
  Deposits:
    Demand                                                                  $ 23,325,002      $ 22,112,179     $ 21,270,096
    NOW and Money Market                                                      38,912,734        37,224,811       34,713,825
    Savings                                                                   12,082,176        13,903,350       12,211,754
    Certificates of deposit, other                                            31,238,108        25,904,212       17,675,973
    Certificates of deposit $100,000 and over                                  7,163,032         4,892,327        7,165,216
                                                                            ------------      ------------     ------------
                  Total deposits                                             112,721,052       104,036,879       93,036,864

  Short-term notes payable to related parties                                    201,653           201,653          569,117
  Accrued interest expense                                                       749,988           592,045          331,348
  Other liabilities                                                               55,083            79,640          119,049
  Subordinated long-term debt:
    Senior subordinated notes                                                  1,097,016         1,098,000        1,098,000
    Junior subordinated notes                                                  1,016,029         1,100,920          779,746
                                                                            ------------      ------------     ------------
                  Total liabilities                                          115,840,821       107,109,137       95,934,124
                                                                            ------------      ------------     ------------

STOCKHOLDERS' EQUITY
  Class A Common, $1 par value; authorized, issued and
    outstanding 100,000 shares                                                   100,000           100,000          100,000
  Class B Common, $1 par value nonvoting; authorized
    900,000 shares, issued 648,631 shares                                        648,631           648,631          648,631
  Surplus                                                                        778,024           778,024          710,605
  Retained earnings                                                            7,004,193         5,651,581        4,045,548
  Unrealized depreciation on available-for-sale securities,
    net of income tax benefits of $10,170 at September 30, 1997 and
    $3,608, $13,188 at December 31, 1996 and 1995, respectively                  (19,741)           (9,279)         (23,367)
                                                                            ------------       -----------      ----------- 
                                                                               8,511,107         7,168,957        5,481,417
  Less cost of treasury stock, 14,000 of Class B shares at
    December 31, 1995                                                                 --                --          (41,781)
                                                                            ------------       -----------     ------------ 
                  Total stockholders' equity                                   8,511,107         7,168,957        5,439,636
                                                                            ------------       -----------     ------------

                                                                            $124,351,928      $114,278,094     $101,373,760
                                                                            ============      ============     ============
</TABLE>
See Notes to Consolidated Financial Statements


                                      F-4


<PAGE>

                          TRI-STATE FINANCE CORPORATION

                        CONSOLIDATED STATEMENTS OF INCOME

                  NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                       AND
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
                                             (UNAUDITED)
                                          ------------------
                                            September 30,                       December 31,
                                          ------------------         --------------------------------
                                          1997          1996         1996          1995          1994
                                          ----          ----         ----          ----          ----
<S>                                    <C>           <C>          <C>           <C>          <C>
INTEREST INCOME
  Interest and fees on loans           $5,502,730    $5,127,733   $6,948,687    $6,606,479   $5,497,856
  Interest on taxable investments       1,593,689       933,748    1,393,417       866,958      960,667
  Interest on nontaxable investments                                  15,608        22,388       39,382
  Federal funds sold                      233,398       501,637      531,084       428,227      343,925
  Other                                        --            --       24,458         6,640        6,590
                                       ----------    ----------   ----------    ----------   ----------
           Total interest income        7,329,815     6,563,118    8,913,254     7,930,692    6,848,420
                                       ----------    ----------   ----------    ----------   ----------

INTEREST EXPENSE
  Interest on deposits                  2,658,051     2,369,565    3,168,213     2,767,063   2,288,425
  Interest on short-term notes
    payable                                12,010        27,458       32,775        44,370      44,947
  Interest on subordinated long-term
    debt                                  145,426       150,649      182,248       205,112      205,372
                                       ----------    ----------   ----------    ----------   ----------
           Net interest expense         2,815,487     2,547,672    3,383,236     3,016,545    2,538,744
                                       ----------    ----------   ----------    ----------   ----------

NET INTEREST INCOME                     4,514,328     4,015,446    5,530,018     4,914,147    4,309,676

PROVISION FOR LOAN LOSSES                      --            --           --       450,000      717,795

NET INTEREST INCOME AFTER
  PROVISION FOR LOAN
  LOSSES                                4,514,328     4,015,446    5,530,018     4,464,147    3,591,881
                                       ----------    ----------   ----------    ----------   ----------

NONINTEREST INCOME
  Service charges                         439,236       417,220      570,703       613,536      591,734
  Other income                            220,874       222,914      282,286       274,195      271,968
                                       ----------    ----------   ----------    ----------   ----------
           Total noninterest income       660,110       640,134      852,989       887,731      863,702
                                       ----------    ----------   ----------    ----------   ----------

NONINTEREST EXPENSE
  Salaries, wages and employee
    benefits                            1,632,056     1,485,488    2,005,273     1,798,741    1,677,927
  Net occupancy expense                   405,892       406,950      557,443       426,850      438,462
  Other real estate owned losses and
    expenses, net                              --            --           --            --       19,582
  FDIC assessment                           8,981         1,500        2,000       116,115      181,581
  Other                                   652,307       653,509    1,045,309     1,111,972      786,401
                                       ----------    ----------   ----------    ----------   ----------
           Total noninterest expense    2,699,236     2,547,447    3,610,025     3,453,678    3,103,953
                                       ----------    ----------   ----------    ----------   ----------

INCOME BEFORE INCOME
  TAXES                                 2,475,202     2,108,133    2,772,982     1,898,200    1,351,630

INCOME TAXES                              898,000       825,000      944,460       685,928      484,209
                                       ----------    ----------   ----------    ----------   ----------

NET INCOME                             $1,577,202    $1,283,133   $1,828,522    $1,212,272   $  867,421
                                       ==========    ==========   ==========    ==========   ==========

EARNINGS PER SHARE
  Net income                           $     2.11    $     1.72   $     2.45    $     1.66   $     1.21
  Weighted average number of
    common shares outstanding             748,631       744,172      745,131       731,414      718,327

</TABLE>

See Notes to Consolidated Financial Statements

                                      F-5



<PAGE>

                          TRI-STATE FINANCE CORPORATION

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                      NINE MONTHS ENDED SEPTEMBER 30, 1997
                                       AND
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994


<TABLE>
<CAPTION>
                                                               Common Stock  
                                                --------------------------------------------- 
                                                      Class A                 Class B 
                                                ------------------       -------------------- 
                                                Shares                   Shares                             Retained 
                                                Issued     Amount        Issued        Amount    Surplus    Earnings 
                                                ------     ------        ------        ------    -------    -------- 

<S>                                            <C>        <C>            <C>         <C>        <C>         <C>           
BALANCE, DECEMBER 31, 1993                     100,000    $100,000       648,631     $648,631   $656,221    $2,183,799    

NET INCOME                                         --           --            --           --         --       867,421
DIVIDENDS PAID                                     --           --            --           --         --      (107,749)

NET CHANGE IN UNREALIZED DEPRECIATION
ON AVAILABLE-FOR-SALE SECURITIES, net
  of income taxes of $80,065                       --           --            --           --         --            -- 
                                              -------     --------       -------      --------   -------    -----------

BALANCE, DECEMBER 31, 1994                    100,000     $100,000       648,631      $648,631   656,221    $2,943,471

SALE OF TREASURY STOCK                             --           --            --            --    54,384            -- 

NET INCOME                                         --           --            --            --        --     1,212,272

DIVIDENDS PAID                                     --           --            --            --        --      (110,195)

NET CHANGE IN UNREALIZED DEPRECIATION
  ON AVAILABLE-FOR-SALE SECURITIES, net
  of income taxes of $66,877                       --           --            --            --        --            -- 
                                              -------    ---------       -------      --------   --------   ----------

BALANCE, DECEMBER 31, 1995                    100,000      100,000       648,631       648,631    710,605    4,045,548



                                                 Unrealized      
                                                Depreciation    
                                                on Available-   
                                                  for-Sale      Treasury
                                                 Securities       Stock          Total
                                                 ----------       -----          ----- 
                                                                                                                  
<S>                                             <C>             <C>          <C>               
BALANCE, DECEMBER 31, 1993                      $      --       $(90,438)    $3,498,213        
                                                                                                 
NET INCOME                                             --             --        867,421            
                                                                                                 
DIVIDENDS PAID                                         --             --       (107,749)           
                                                                                                 
NET CHANGE IN UNREALIZED DEPRECIATION                                                          
ON AVAILABLE-FOR-SALE SECURITIES, net                                                          
  of income taxes of $80,065                     (155,420)            --       (155,420)      
                                                                                                 
BALANCE, DECEMBER 31, 1994                      $(155,420)      $(90,438)    $4,102,465             
                                                ---------       --------     ----------             
                                                                                                 
SALE OF TREASURY STOCK                                 --         48,657        103,041            
                                                                                                 
NET INCOME                                             --             --      1,212,272            
                                                                                                    
DIVIDENDS PAID                                         --             --       (110,195)           
                                                                                                 
NET CHANGE IN UNREALIZED DEPRECIATION                                                            
  ON AVAILABLE-FOR-SALE SECURITIES, net                                                          
  of income taxes of $66,877                      132,053             --        132,053          
                                                ---------       --------     ----------             

BALANCE, DECEMBER 31, 1995                        (23,367)       (41,781)     5,439,636
</TABLE>

See Notes to Consolidated Financial Statements


                                      F-6

<PAGE>


<TABLE>
<CAPTION>
                                                               Common Stock                                                
                                                ---------------------------------------------                              
                                                      Class A                 Class B                                 
                                                ------------------       --------------------                         
                                                Shares                   Shares                              Retained  
                                                Issued     Amount        Issued        Amount    Surplus     Earnings  
                                                ------     ------        ------        ------    -------     --------  
                                                                                                                      
<S>                                            <C>        <C>            <C>         <C>        <C>         <C>       
BALANCE, DECEMBER 31, 1995                      100,000   $100,000       $648,631    $648,631   $710,605    $4,045,548

SALE OF TREASURY STOCK                               --         --             --          --     67,419            --
          
NET INCOME                                           --         --             --          --         --     1,828,522

DIVIDENDS PAID                                       --         --             --          --         --      (222,489)

NET CHANGE IN UNREALIZED DEPRECIATION
  ON AVAILABLE-FOR-SALE SECURITIES, net
  of income taxes of $10,293                         --         --             --          --         --            --
                                               --------    --------      --------     --------   --------   ----------

BALANCE, DECEMBER 31, 1996                      100,000     100,000       648,631      648,631   778,024     5,651,581

NET INCOME                                           --          --            --           --        --     1,577,202

DIVIDENDS PAID                                       --          --            --           --        --      (224,590)

NET CHANGE IN UNREALIZED DEPRECIATION
  ON AVAILABLE FOR SALE SECURITIES, net
  of income taxes of $7,274                          --          --            --           --        --           --
                                               --------    --------      --------     --------   --------   ----------

BALANCE, SEPTEMBER 30, 1997
  (UNAUDITED)                                  $100,000    $100,000      $648,631     $648,631   $778,024   $7,004,193
                                               ========    ========      ========     ========   ========   ==========
</TABLE>

<TABLE>
<CAPTION>
                                                             Unrealized
                                                            Depreciation
                                                            on Available-
                                                Retained      for-Sale     Treasury
                                                Earnings      Securities     Stock       Total
                                                --------     ----------      -----       -----
<S>                                           <C>            <C>          <C>          <C>
BALANCE, DECEMBER 31, 1995                    $4,045,548     $(23,367)    $(41,781)    $5,439,636

SALE OF TREASURY STOCK                                --           --       41,781        109,200

NET INCOME                                     1,828,522           --           --      1,828,522

DIVIDENDS PAID                                  (222,489)          --           --       (222,489)

NET CHANGE IN UNREALIZED DEPRECIATION
  ON AVAILABLE-FOR-SALE SECURITIES, net
  of income taxes of $10,293                          --       14,088           --         14,088
                                              ----------      --------    --------      ----------

BALANCE, DECEMBER 31, 1996                     5,651,581       (9,279)          --      7,168,957

NET INCOME                                     1,577,202           --           --      1,577,202

DIVIDENDS PAID                                  (224,590)          --           --       (224,590)

NET CHANGE IN UNREALIZED DEPRECIATION
  ON AVAILABLE FOR SALE SECURITIES, net
  of income taxes of $7,274                           --      (10,462)          --        (10,462)
                                              ----------      --------    --------     ----------

BALANCE, SEPTEMBER 30, 1997
  (UNAUDITED)                                $7,004,193      $(19,471)    $     --     $8,511,107
                                             ==========      ========     ========     ==========
</TABLE>

See Notes to Consolidated Financial Statements



                                      F-7
<PAGE>




                          TRI-STATE FINANCE CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                       AND
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994


<TABLE>
                                                            (UNAUDITED)
                                                        ---------------------
                                                            September 30,                            December 31,
                                                        ---------------------            -------------------------------------
                                                        1997             1996            1996            1995             1994
                                                        ----             ----            ----            ----             ----
<S>                                                 <C>             <C>             <C>             <C>             <C>
CASH FLOWS FROM OPERATING
  ACTIVITIES
    Net income                                      $  1,577,202    $  1,283,133    $  1,828,522    $  1,212,272    $    867,421
    Adjustments to reconcile net income to net
      cash provided by operating activities:
        Depreciation                                     308,722         285,042         391,308         324,284         242,545
        Amortization/Accretion                             9,674          (3,364)         34,340              --              --
        Loss on sale and provision for loss on
         other real estate owned                              --              --              --         (53,948)          3,335
        Loss on securities                                    --              --              --           9,776              --
        Loss on disposal of equipment                         --              --              --          25,219              --
        Provision for loan losses                             --              --              --         450,000         717,795
        Deferred taxes                                    (6,561)        (65,426)         26,478         (46,394)        110,559
        Changes in:
          Accrued interest receivable                   (170,068)       (221,885)        (51,630)         26,384        (134,388)
          Other assets                                   (37,920)       (166,007)       (174,816)        361,933        (250,382)
          Accrued interest payable and other
            liabilities                                  133,386         315,949         221,288         225,897        (509,316)
                                                    ------------    ------------    ------------     -----------    ------------ 
           Net cash provided by operating
             activities                                1,814,435       1,427,442       2,275,490       2,535,423       1,047,569
                                                    ------------    ------------    ------------     -----------    ------------ 

CASH FLOWS FROM INVESTING
  ACTIVITIES
    Purchase of available-for-sale securities         (1,300,000)             --      (6,484,591)             --      (1,400,000)
    Proceeds from maturities, calls and principal
      paydowns of available-for-sale securities          600,000              --         189,600       2,019,429       1,900,164
    Purchase of held-to-maturity securities          (14,550,000)    (17,319,302)    (19,682,049)     (5,826,993)    (11,000,000)
    Proceeds on maturities, calls and principal
      paydown of held-to-maturity securities           9,473,387       6,172,956      11,227,801       5,676,870       5,800,113
    Purchase of other investments                             --        (323,600)             --              --
    Proceeds from sale of other investments                   --          10,400              --              --
    Loan originations and repayments, net             (3,181,626)       (999,723)     (4,659,483)     (3,287,421)     (6,694,708)
    Proceeds from sale of other real estate owned             --              --              --         195,000         213,750
    Purchase of equipment                                (64,655)       (319,950)       (382,523)       (554,994)       (290,908)
                                                    ------------    ------------    ------------     -----------    ------------ 
           Net cash used in investing
             activities                               (9,022,894)    (12,466,019)    (20,104,445)     (1,778,109)    (11,471,589)
                                                    ------------    ------------    ------------     -----------    ------------ 
</TABLE>

See Notes to Consolidated Financial Statements


                                      F-8

<PAGE>

                          TRI-STATE FINANCE CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                       AND
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
                                                          (UNAUDITED)
                                                       -------------------
                                                          September 30,                              December 31,
                                                       -------------------             -----------------------------------
                                                       1997           1996             1996            1995           1994
                                                       ----           ----             ----            ----           ----

<S>                                              <C>              <C>             <C>             <C>             <C>
CASH FLOWS FROM FINANCING
  ACTIVITIES
    Net increase (decrease) in demand deposit,
      money market, NOW and savings account         8,684,173       4,871,780       5,044,665      (7,031,313)      1,305,559
    Net increase in certificates of deposit         5,955,350      12,450,366        (752,186)
    (Decrease) increase in short-term notes
      payable, net                                         --        (222,130)       (367,464)        116,824         (77,912)
    Issuance of subordinated debt                          --         316,762         321,174         192,746       1,420,000
    Payment of subordinated debt                      (85,875)             --              --        (553,000)     (1,365,000)
    Payment of dividends                             (224,590)       (222,489)       (222,489)       (110,195)       (107,749)
    Proceeds from sale of treasury stock                   --         109,200         109,200         103,041              --
                                                  -----------     -----------     -----------     -----------    ------------
           Net cash provided by financing
             activities                             8,373,708       4,853,123      10,840,436       5,168,469         422,712
                                                  -----------     -----------     -----------     -----------    ------------

NET (DECREASE) INCREASE IN CASH
  AND CASH EQUIVALENTS                              1,165,249      (6,185,454)     (6,988,519)      5,925,783     (10,001,308)

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF YEAR                                11,032,429      18,020,948      18,020,948      12,095,165      22,096,473
                                                  -----------     -----------     -----------     -----------    ------------

CASH AND CASH EQUIVALENTS AT
  END OF YEAR                                     $12,197,678     $11,835,494     $11,032,429     $18,020,948    $ 12,095,165
                                                  ===========     ===========     ===========     ===========    ============
</TABLE>

See Notes to Consolidated Financial Statements

                                      F-9
<PAGE>

                          TRI-STATE FINANCE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Tri-State Finance Corporation (the "Company") and its wholly-owned subsidiary,
Tri-State Bank (the "Bank"), are primarily engaged in providing a full range of
banking services to individual and corporate customers through the Bank's
branches in Denver and Boulder, Colorado. The Bank is subject to competition
from other financial institutions. The Bank also is subject to the regulation of
certain federal and state agencies and undergoes periodic examinations by those
regulatory authorities. The consolidated financial statements as of September
30, 1997 and for the nine months ended September 30, 1997 and 1996 are
unaudited, but in the opinion of Management reflect all adjustments, consisting
of only normal recurring items, necessary for fair presentation. These notes to
consolidated financial statements do not reflect unaudited September 30, 1997
and 1996 data. Interim results are not necessarily indicative of annual results.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for loan losses. In connection with
the determination of the allowance for loan losses, management obtains
independent appraisals for significant properties.

Management believes that the allowance for losses on loans is adequate. While
management uses available information to recognize losses on loans, changes in
economic conditions may necessitate revision of these estimates in future years.
In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowances for losses on
loans. Such agencies may require the Bank to recognize additional losses based
on their judgments of information available to them at the time of their
examination.


                                      F-10
<PAGE>

                          TRI-STATE FINANCE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1996, 1995, AND 1994


NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
        ACCOUNTING POLICIES (continued)

Principles of Consolidation

The consolidated financial statements include the accounts of Tri-State Finance
Corporation and its wholly-owned subsidiary Tri-State Bank. Significant
intercompany accounts and transactions have been eliminated in consolidation.

Cash Equivalents

The Company considers all liquid investments with original maturities of three
months or less to be cash equivalents. At December 31, 1996 and 1995, cash
equivalents consisted of federal funds sold.

Investments in Debt and Equity Securities

Available-for-sale securities, which include any security for which the Bank has
no immediate plan to sell but which may be sold in the future, are carried at
fair value. Realized gains and losses, based on specifically identified
amortized cost of the specific security, are included in other income.
Unrealized gains and losses are recorded, net of related income tax effects, in
stockholders' equity. Premiums and discounts are amortized and accreted,
respectively, to interest income using the level-yield method over the period to
maturity.

Held-to-maturity securities, which include any security for which the Bank has
the positive intent and ability to hold until maturity, are carried at
historical cost adjusted for amortization of premiums and accretion of
discounts. Premiums and discounts are amortized and accreted, respectively, to
interest income using the level-yield method over the period to maturity.

Interest and dividends on investments in debt and equity securities are included
in income when earned.

Loans

Loans that management has the intent and ability to hold for the foreseeable
future or until maturity or pay-off are reported at their outstanding principal
adjusted for any charge-offs, the allowance for loan losses, and any deferred
fees or costs on originated loans and unamortized premiums or discounts on
purchased loans.


                                      F-11
<PAGE>

                          TRI-STATE FINANCE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
        ACCOUNTING POLICIES (continued)

Allowance for Loan Losses

The allowance for loan losses is increased by provisions charged to expense and
reduced by loans charged off, net of recoveries. The allowance is maintained at
a level considered adequate to provide for potential loan losses, based on
management's evaluation of the loan portfolio, as well as on prevailing and
anticipated economic conditions and historical losses by loan category. General
allowances have been established, based upon the aforementioned factors, and
allocated to the individual loan categories. Allowances are accrued on specific
loans evaluated for impairment for which the basis of each loan, including
accrued interest, exceeds the discounted amount of expected future collections
of interest and principal or, alternatively, the fair value of loan collateral.

A loan is considered impaired when it is probable that the Bank will not receive
all amounts due according to the contractual terms of the loan. This includes
loans that are nonaccrual loans and certain other loans classified by
management. Interest is recognized for nonaccrual loans only upon receipt and
only after all principal amounts are current according to the terms of the
contract.

Premises and Equipment

Depreciable assets are stated at cost less accumulated depreciation.
Depreciation is charged to expense using the straight-line method over the
estimated useful lives of the assets. Leasehold improvements are capitalized and
amortized using the straight-line method over the terms of the respective leases
or the estimated useful lives of the improvements, whichever is shorter.

Foreclosed Assets Held for Sale

Assets acquired by foreclosure or in settlement of debt and held for sale are
valued at estimated fair value as of the date of foreclosure, and a related
valuation allowance is provided for estimated costs to sell the assets.
Management evaluates the value of foreclosed assets held for sale periodically
and increases the valuation allowance for any subsequent declines in fair value.
Changes in the valuation allowance are charged or credited to other expense.

Fee Income

Loan origination fees, net of direct origination costs, are recognized as income
using the level-yield method over the term of the loans.

                                      F-12
<PAGE>

                          TRI-STATE FINANCE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
        ACCOUNTING POLICIES (continued)

Required Reserve Balances

Pursuant to normal banking practices, the Bank is required to maintain certain
balances (reserves) with the Federal Reserve Bank. Included in cash and due from
banks in the accompanying consolidated balance sheets are required reserve
balances of approximately $976,000 at December 31, 1996.

Income Taxes

Deferred tax liabilities and assets are recognized for the tax effect of
differences between the financial statement and tax bases of assets and
liabilities. A valuation allowance is established to reduce deferred tax assets
if it is more likely than not that a deferred tax asset will not be realized.

Earnings Per Common Share

Earnings per share of common stock has been computed on the basis of the
weighted average number of shares of common stock outstanding. The Class B
common shares are considered common stock equivalents for purposes at computing
the weighted average number of shares of common stock outstanding as their right
to participate in earnings and dividends are the same as Class A common shares.

                                      F-13
<PAGE>

                          TRI-STATE FINANCE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 2:            INVESTMENTS IN DEBT AND EQUITY SECURITIES

The amortized cost and approximate fair value of held-to-maturity securities are
as follows at December 31, 1996 and 1995:

<TABLE>
                                                                      Gross        Gross
                                                    Amortized    Unrealized   Unrealized        Approximate
                                                         Cost         Gains      (Losses)        Fair Value
                                                         ----         -----      --------        ----------
<C>                                                <S>             <S>         <S>              <S>
1996:

U.S. Treasury                                      $   997,477     $ 3,231     $    (608)       $ 1,000,100
U.S. Government agencies                            17,176,979      34,149       (54,402)        17,156,726
Mortgage-backed securities                           3,130,622       5,153       (42,568)         3,093,207
State and political subdivisions                       259,202       3,329            --            262,531
Other securities                                       412,670       2,300        (1,034)           413,936
                                                   -----------     -------     ---------        -----------
                                                                                              
                                                   $21,976,950     $48,162     $ (98,612)       $21,926,500
                                                   ===========     =======     =========        ===========
1995:                                                                                         
                                                                                              
U.S. Treasury                                      $ 1,298,328     $ 1,526     $    (294)       $ 1,299,560
U.S. Government agencies                             8,199,270      19,076       (95,716)         8,122,630
Mortgage-backed securities                           3,230,552       5,592       (37,848)         3,198,296
State and political subdivisions                       314,035       5,493            --            319,528
Other securities                                       515,570          --        (2,767)           512,803
                                                   -----------     -------     ---------        -----------
                                                                                              
                                                   $13,557,755     $31,687     $(136,625)       $13,452,817
                                                   ===========     =======     =========        ===========
                                                                                          
</TABLE>
Maturities of held-to-maturity securities at December 31, 1996: 
<TABLE>
                                                                       Amortized       Approximate
                                                                            Cost        Fair Value
                                                                       ---------        ----------
<S>                                                                   <C>            <C>

One year or less                                                      $   525,000    $   525,476
After one through five years                                           17,712,225     17,707,297
After five through ten years                                              599,103        590,220
After ten years                                                            10,000         10,300
Mortgage-backed securities not due on a
   single maturity date                                                 3,130,622      3,093,207
                                                                      -----------    -----------

                                                                      $21,976,950    $21,926,500
                                                                      ===========    ===========
</TABLE>


                                      F-14
<PAGE>

                          TRI-STATE FINANCE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 2: INVESTMENTS IN DEBT AND EQUITY SECURITIES (continued)

The amortized cost and approximate fair value of available-for-sale securities
are as follows at December 31, 1996 and 1995:

                                               Gross        Gross
                               Amortized   Unrealized   Unrealized   Approximate
                                    Cost        Gains     (Losses)    Fair Value
                                    ----        -----     --------    ----------
1996:

U.S. Government agencies       $8,950,472   $ 4,236     $(17,749)    $8,936,919
                               ==========   ========    =========    ==========

1995:

U.S. Government agencies       $2,654,814   $20,566     $(57,834)    $2,617,547
                               ==========   ========    =========    ==========


Maturities of available-for-sale securities at December 31, 1996:
                                                        Amortized   Approximate
                                                           Cost     Fair Value
                                                         -------    ----------

One year or less                                       $1,000,513    $  999,900
After one through five years                            5,747,052     5,739,449
After five through ten years                            2,202,907     2,197,570
                                                       ----------    ----------

                                                       $8,950,472    $8,936,919
                                                       ==========    ==========

The book value of securities pledged as collateral, to secure public deposits,
and for other purposes amounted to $2,199,004 at December 31, 1996, and
$2,598,562 at December 31, 1995. Gross losses of $9,776 resulting from sales of
available-for-sale securities were realized for 1995.

The Bank held structured notes that are classified as held-to-maturity and
available-for-sale securities in its investment portfolio as of December 31,
1996, with an amortized cost of $2,099,006 and $1,450,463 and approximate market
values of $2,088,000 and $1,450,000, respectively. The yield on these securities
is based on specified levels of published indices. The fair value of these
securities may be more volatile than conventional fixed or variable rate
securities as interest rates fluctuate.


                                      F-15
<PAGE>

                          TRI-STATE FINANCE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 3: LOANS AND ALLOWANCE FOR LOAN LOSSES

Categories of loans at December 31, 1996 and 1995, include:

                                                    1996            1995
                                                    ----            ----

Real estate loans                                $53,535,897    $49,042,717
Commercial loans                                  14,385,629     13,678,000
Installment loans                                    940,206      1,282,779
Leases                                                    --         23,681
                                                 -----------    -----------
                                                  68,861,732     64,027,177
Allowance for loan losses                          1,008,949        833,877
                                                 -----------    -----------

                                                 $67,852,783    $63,193,300
                                                 ===========    ===========

The Bank grants primarily commercial, real estate, and consumer loans to
businesses and individuals in Colorado. Although the loan portfolio is
diversified, approximately $47,551,000 represents loans collateralized by
commercial real estate.

The following reflects activity in the allowance for loan losses for the year
ended December 31:

<TABLE>
                                                   1996         1995          1994
                                                   ----         ----          ----

<S>                                            <C>            <C>          <C>
Balance, beginning                             $  833,877    $  637,125    $  880,948
Provision for loan losses                              --       450,000       717,795
                                               ----------    ----------    ---------- 
                                                  833,877     1,087,125     1,598,743
Recoveries of amounts previously charged off      316,211        43,387        20,651
Charged-off loans                                (141,139)     (296,635)     (982,269)
                                               ----------    ----------    ---------- 

Balance, ending                                $1,008,949    $  833,877    $  637,125
                                               ==========    ==========    ==========
</TABLE>

Impaired loans totaled $434,438 and $554,628 at December 31, 1996 and 1995,
respectively. An allowance for loan losses of $65,166 and $-0- relates to
impaired loans at December 31, 1996 and 1995, respectively. Interest of $75,000
and $108,000 was recognized on average impaired loans of $701,000 and $980,000
for 1996 and 1995, respectively. No interest was recognized on a cash basis on
impaired loans during 1996 and 1995.


                                      F-16

<PAGE>

                          TRI-STATE FINANCE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 4: BANK PREMISES AND EQUIPMENT

Major classifications of bank premises and equipment stated at cost, and total
accumulated depreciation as of December 31, are as follows:

                                                         1996           1995
                                                         ----           ----

Bank premises                                         $3,211,683    $3,242,703
Furniture, fixtures, and equipment                     1,625,008     1,318,293
                                                      ----------    ----------
                                                       4,836,691     4,560,996
Accumulated depreciation                               1,821,993     1,537,513
                                                      ----------    ----------
                                                      $3,014,698    $3,023,483
                                                      ==========    ==========

NOTE 5: DEPOSITS

Interest expense on certificates of deposit of $100,000 or more amounted to
approximately $374,000, $346,000, and $183,000 for the years ended December 31,
1996, 1995, and 1994, respectively.


NOTE 6: SHORT-TERM NOTES PAYABLE

Short-term borrowings at December 31, 1996 and 1995, are unsecured and had
remaining maturities of 90 days or less and interest rates of 6.0%. Upon
maturity, short-term notes payable are generally refinanced by the issuance of
additional short-term notes for similar amounts and terms.


                                      F-17

<PAGE>

                          TRI-STATE FINANCE CORPORATION                     
                                                                            
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS               
                                                                            
                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 7: INCOME TAXES

The tax effects of temporary differences related to deferred taxes shown on the
December 31, 1996 and 1995, balance sheets are:

                                                               1996       1995
                                                               ----       ----

Deferred tax assets:
  Allowance for loan losses                                 $68,000    $68,000
  Net unrealized loss on securities available for sale        3,608     13,188
  Other                                                       1,392      6,870
                                                            -------    -------
          Total deferred tax assets                          73,000     88,058
                                                            -------    -------

Deferred tax liabilities:
  Bank premises and equipment, primarily due to
    differences in bases and depreciation                    73,000     52,000
                                                            -------    -------
          Total deferred tax liabilities                     73,000     52,000
                                                            -------    -------

Net deferred tax asset                                      $     -    $36,058
                                                            =======    =======

The provision for income taxes consists of:

                                               1996       1995        1994
                                               ----       ----        ----

Current tax expense                        $917,982   $732,322    $373,650
Deferred tax expense (benefit)               26,478    (46,394)    110,559
                                           --------   --------    --------

                                           $944,460   $685,928    $484,209
                                           ========   ========    ========

                                      F-18
<PAGE>

                          TRI-STATE FINANCE CORPORATION            
                                                                   
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS      
                                                                   
                        DECEMBER 31, 1996, 1995, AND 1994          


NOTE 7: INCOME TAXES (continued)

A reconciliation of income tax expense at the statutory rate to the Bank's
actual income tax income expense is shown below:

<TABLE>
                                                                     1996       1995        1994
                                                                     ----       ----        ----

<S>                                                              <C>        <C>         <C>     
Computed at the statutory rate (34%)                             $943,000   $645,388    $459,554
Increase (decrease) resulting from:
  Tax exempt interest income on loans and securities               (5,500)    (7,800)    (13,390)
  State income taxes, net of federal income tax effect             86,000     62,700      35,053
  Other                                                           (79,040)   (14,360)      2,992
                                                                 --------   --------    --------

Actual tax provision                                             $944,460   $685,928    $484,209
                                                                 ========   ========    ========

</TABLE>

NOTE 8: SUBORDINATED LONG-TERM DEBT

Subordinated long-term debt outstanding is as follows:
<TABLE>
                                                                          1996         1995
                                                                           ----         ----
<S>                                                                 <C>           <C>
Senior subordinated notes, interest rates vary from
  8.5% to 9.00%; principal due
  at maturity which
  ranges from May 1997 to May 1998                                  $1,098,000    $1,098,000

Junior subordinated notes, interest rates vary from
  8.5% to 9.00%; principal due
  at maturity which
  ranges from April 1997 to July 1999                                1,100,920       779,746
                                                                    ----------    ----------

Total subordinated long-term debt                                   $2,198,920    $1,877,746
                                                                    ==========    ==========
</TABLE>

                                      F-19

<PAGE>

                          TRI-STATE FINANCE CORPORATION
                                                                          
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                          
                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 8: SUBORDINATED LONG-TERM DEBT (continued)

The combined aggregate maturities of subordinated long-term debt as of
December 31, 1996, was as follows:

Years ending December 31:
  1997                                                       $1,390,000
  1998                                                          202,148
  1999                                                          606,772
                                                             ----------

                                                             $2,198,920
                                                             ==========

The junior subordinated debt is subordinated to the senior subordinated debt.

Interest on subordinated long-term debt totaled $182,248, $205,112, and $205,372
for the years ended December 31, 1996, 1995, and 1994, respectively.

NOTE 9: EMPLOYEE PROFIT SHARING TRUST

The Bank participates with the Parent in a profit sharing plan which provides
retirement benefits to its employees with one or more years and a minimum of
1,000 hours per year of service. Contributions are calculated as a percentage of
earnings before income taxes with certain adjustments and are deposited with a
trustee annually. Contributions of $180,000, $120,000, and $100,000 were made
during 1996, 1995, and 1994, respectively.

NOTE 10: COMMITMENTS AND CREDIT RISK

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 payment of a fee. Since a portion of the commitments may expire without
being drawn upon, the total commitment amounts do not necessarily represent
future cash requirements. Each customer's creditworthiness is evaluated on a
case-by-case basis. The amount of collateral obtained, if deemed necessary, is
based on management's credit evaluation of the counterparty. Collateral held
varies, but may include accounts receivable, inventory, property, plant and
equipment, commercial real estate and residential real estate.

                                      F-20

<PAGE>

                          TRI-STATE FINANCE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 10: COMMITMENTS AND CREDIT RISK (continued)

At December 31, 1996 and 1995, the Bank had outstanding commitments to originate
loans aggregating approximately $19,789,000 and $20,052,000, respectively. The
commitments extended over varying periods of time with the majority being
disbursed within a one-year period. Loan commitments at fixed rates of interest
amount to $2,275,000 and $2,306,000 at December 31, 1996 and 1995, respectively,
with the remainder at floating market rates.

Letters of credit are conditional commitments issued by the Bank to guarantee
the performance of a customer to a third party. Those guarantees are primarily
issued to support public and private borrowing arrangements, including
commercial paper, bond financing and similar transactions. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loans to customers.

The Bank had total outstanding letters of credit amounting to $767,000 and
$589,000, at December 31, 1996 and 1995, respectively, with terms not exceeding
one year.

NOTE 11: TRANSACTIONS WITH RELATED PARTIES

At December 31, 1996 and 1995, the Bank had loans outstanding to executive
officers, directors and companies in which the Bank's executive officers or
directors were principal owners, in the amount of $206,000 and $743,000,
respectively.

In management's opinion, such loans and other extensions of credit and deposits
were made in the ordinary course of business and were made on substantially the
same terms (including interest rates and collateral) as those prevailing at the
time for comparable transactions with other persons. Further, in management's
opinion, these loans did not involve more than normal risk of collectability or
present other unfavorable features.

Transactions related to the loans to officers and directors are summarized as
follows:

                                                    1996         1995
                                                    ----         ----

         Balance, beginning of year            $ 743,000    $ 506,000
         Additions to principal                  160,000      448,000
         Less payments received                 (697,000)    (211,000)
                                               ---------    --------- 

         Balance, end of year                  $ 206,000    $ 743,000
                                               =========    =========

                                      F-21

<PAGE>

                          TRI-STATE FINANCE CORPORATION
                                                                          
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                          
                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 11: TRANSACTIONS WITH RELATED PARTIES (continued)

At December 31, 1996 and 1995, the Company has short-term notes payable due to
officers and directors of $201,653 and $569,117, respectively.

At December 31, 1996 and 1995, $1,060,920 and $884,746, of the Company's
subordinated long-term debt was due to officers and directors.


NOTE 12: REGULATORY CAPITAL REQUIREMENTS

The Bank 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
Bank's financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must meet specific
capital guidelines that involve quantitative measures of the Bank's assets,
liabilities, and certain off balance-sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and classification are also
subject to qualitative judgments by the regulators about components, risk
weighting, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Bank 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
adjusted total assets (as defined). Management believes, as of December 31,
1996, that the Bank meets all capital adequacy requirements to which it is
subject.

As of December 31, 1996, the most recent notification from the Federal Deposit
Insurance Corporation (FDIC) categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as well
capitalized, the Bank 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 since that notification that management believes have changed the
institution's category.


                                      F-22

<PAGE>

                          TRI-STATE FINANCE CORPORATION
                                                                          
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                          
                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 12: REGULATORY CAPITAL REQUIREMENTS (continued)

The Bank's actual capital amounts and ratios are also presented in the table. No
amount has been deducted from capital for interest-rate risk.

<TABLE>
                                                                                                To be Well
                                                                                             Capitalized Under
                                                                          For Capital       Prompt Corrective
                                                      Actual           Adequacy Purposes    Action Provisions
                                                  ----------------     -----------------    -----------------
                                                  Amount     Ratio       Amount    Ratio     Amount     Ratio
                                                  ------     -----       ------    -----     ------     -----
<S>                                             <C>           <C>     <C>          <C>    <C>           <C>
As of December 31, 1996:
  Total risk-based capital
    (to risk-weighted assets)                   $9,754,938    12.3%   $6,336,770   8.0%   $7,920,962    10.0%
  Tier I risk-based capital
    (to risk-weighted assets)                   $8,813,416    11.1%   $3,168,385   4.0%   $4,725,577     6.0%
  Tier I leverage capital
    (to adjusted total assets)                  $8,813,416     7.8%   $4,548,400   4.0%   $5,685,500     5.0%

As of December 31, 1995:
  Total risk-based capital
    (to risk-weighted assets)                   $8,106,416    10.9%   $5,931,808   8.0%   $7,414,760    10.0%
  Tier I risk-based capital
    (to risk-weighted assets)                   $7,272,416     9.8%   $2,965,904   4.0%   $4,448,856     6.0%
  Tier I leverage capital
    (to adjusted total assets                   $7,272,416     7.2%   $4,046,240   4.0%   $5,057,800     5.0%
</TABLE>

The Bank is subject to certain restrictions on the amount of dividends that it
may declare without prior regulatory approval. At December 31, 1996,
approximately $2,900,000 of retained earnings were available for dividend
declaration to the Company without prior regulatory approval.

                                      F-23

<PAGE>

                          TRI-STATE FINANCE CORPORATION
                                                                          
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                          
                        DECEMBER 31, 1996, 1995, AND 1994


NOTE 13: OTHER NONINTEREST EXPENSE

Significant components of other noninterest expense for the years ended
December 31, 1996, 1995, and 1994, were as follows:

<TABLE>
                                                                       1996         1995        1994
                                                                       ----         ----        ----
<S>                                                              <C>          <C>           <C>

                  Computer expense                               $  177,556   $  153,754    $105,470
                  Office expense                                     91,041       73,142      85,449
                  Stationery and supplies                            86,183       60,491      73,511
                  Postage                                            68,495       65,292      57,758
                  Licenses and taxes                                 64,668      104,334      41,909
                  Committee meetings                                 64,150       35,700      41,850
                  Advertising expense                                59,691       54,709      62,392
                  Donations                                          57,498       49,962      29,953
                  Telephone                                          57,395       46,610      38,841
                  Depreciation                                       53,742      166,525      51,331
                  Insurance                                          51,820       36,526      33,906
                  Attorney fees                                      41,295       51,034      52,181
                  Accounting fees                                    39,936       56,788      54,448
                  State audit fees                                   28,797       26,709      16,863
                  Subscriptions                                      20,082       12,737      15,180
                  Other                                              82,960      117,659      25,359
                                                                 ----------   ----------    --------

                                                                 $1,045,309   $1,111,972    $786,401
                                                                 ==========   ==========    ========
</TABLE>

NOTE 14: ADDITIONAL CASH FLOW INFORMATION

Supplemental Disclosures of Cash Flow Information

<TABLE>
                                                                      1996         1995          1994
                                                                       ----         ----          ----
<S>                                                              <C>          <C>           <C>
Cash payments for:
  Interest                                                       $3,274,995   $3,023,426    $2,537,416
                                                                 ==========   ==========    ==========
  Taxes                                                          $  896,500   $  758,873    $  885,600
                                                                 ==========   ==========    ==========

Transfers of securities from held-to-maturity to
  available-for-sale classification                              $       --   $  696,303    $       --
                                                                 ==========   ==========    ==========
</TABLE>

                                      F-24
<PAGE>


                          TRI-STATE FINANCE CORPORATION
                                                                          
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                          
                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:

Cash and Cash Equivalents

For these short-term instruments, the carrying amount approximates fair value.

Available-for-Sale Securities

Fair values for available-for-sale securities, which also are the amounts
recognized in the balance sheet, equal quoted market prices, if available. If
quoted market prices are not available, fair values are estimates based on
quoted market prices of similar securities.

Held-to-Maturity Securities

Fair values for investment securities equal quoted market prices, if available.
If quoted market prices are not available, fair values are estimated based on
quoted market prices of similar securities.

Loans

The fair value of loans is estimated by discounting the future cash flows using
the current rates at which similar loans would be made to borrowers with similar
credit ratings and for the same remaining maturities. Loans with similar
characteristics were aggregated for purposes of the calculations. The carrying
amount of accrued interest approximates its fair value.

Deposits

The fair value of demand deposits, savings accounts, NOW accounts, and certain
money market deposits is the amount payable on demand at the reporting date
(i.e., their carrying amount). The fair value of fixed-maturity time deposits is
estimated using a discounted cash flow calculation that applies the rates
currently offered for deposits of similar remaining maturities. The carrying
amount of accrued interest payable approximates its fair value.

Short-Term Note Payable

The fair values of all short-term borrowings approximate their carrying amounts.

                                      F-25
<PAGE>


                          TRI-STATE FINANCE CORPORATION
                                                                          
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                          
                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Subordinated Debt

Fair values of subordinated debt are based on the discounted cash flows using
rates currently offered debt with similar terms.

Commitments to Extend Credit, Letters of Credit, and Lines of Credit

The fair value of commitments is estimated using the fee currently charged to
enter into similar agreements, taking into account the remaining terms of the
agreements and the present creditworthiness of the counterparties. For
fixed-rate loan commitments, fair value also considers the difference between
current levels of interest rates and the committed rates. The fair value of
letters of credit and lines of credit is based on fees currently charged for
similar agreements or on the estimated cost to terminate or otherwise settle the
obligations with the counterparties at the reporting date.

The following table presents estimated fair values of the Bank's financial
instruments. The fair values of certain of these instruments were calculated by
discounting expected cash flows, which method involves significant judgments by
management and uncertainties. Fair value is the estimated amount at which
financial assets or liabilities could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale. Because no
market exists for certain of these financial instruments and because management
does not intend to sell these financial instruments, the Bank does not know
whether the fair values shown below represent values at which the respective
financial instruments could be sold individually or in the aggregate.


                                      F-26
<PAGE>


                          TRI-STATE FINANCE CORPORATION
                                                                          
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                          
                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Commitments to Extend Credit, Letters of Credit, and Lines of Credit (continued)


<TABLE>
<CAPTION>
                                                           December 31, 1996                  December 31, 1995
                                                       ------------------------          -------------------------

                                                       Carrying                          Carrying
                                                         Amount      Fair Value            Amount       Fair Value
                                                         ------      ----------            ------       ----------

<S>                                               <C>             <C>               <C>             <C>
Financial assets:
  Cash and cash equivalents                       $  11,032,429   $  11,032,429     $  18,020,948   $   18,020,948
  Available-for-sale securities                       8,936,919       8,936,919         2,617,547        2,617,547
  Held-to-maturity securities                        21,976,950      21,926,500        13,557,755       13,452,817
  Interest receivable                                   753,653         753,653           578,837          578,837
  Loans, net of allowance for loan losses            67,852,783      68,187,302        63,193,300       63,215,753

Financial liabilities:
  Deposits                                          104,036,879     104,217,957        93,036,864       93,367,945
  Interest payable                                      592,045         592,045           331,348          331,348
  Short-term note payable                               201,653         201,653           569,117          569,117
  Senior subordinated debt                            1,098,000       1,142,694         1,098,000        1,105,819
  Junior subordinated debt                            1,100,920       1,105,274           779,746          782,049
  Unrecognized financial instruments
    (net of contract amount):
      Commitments to external credit                         --              --                --               --
      Letter of credit                                       --              --                --               --
      Lines of credit                                        --              --                --               --
</TABLE>

NOTE 16: FUTURE CHANGES IN ACCOUNTING PRINCIPLE

The Financial Accounting Standards Board recently adopted Statement No. 125 (FAS
125), Accounting for Transfers and Servicing of Financial Assets and
Extinquishments of Liabilities. FAS 125, which is effective for transactions
that occur after December 31, 1996, imposes new rules for determining when
transfers of financial assets are accounted for as sales versus when transfers
are accounted for as borrowings. Management believes that FAS 125 will have no
significant impact on the Company's financial statements.


                                      F-27

<PAGE>

                          TRI-STATE FINANCE CORPORATION
                                                                          
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                          
                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 17: PARENT COMPANY FINANCIAL INFORMATION

Condensed financial information for Tri-State Finance Corporation (Parent
Company Only) is as follows:

                            Condensed Balance Sheets

                           December 31, 1996 and 1995


                                                           1996        1995
                                                           ----        ----
Assets                                                      (in thousands)

Cash and due from banks                                   $  260    $  230
Investment in subsidiary, at equity                        8,813     7,272
Bank premises and equipment, net                             444       475
Other                                                        254       229
                                                          ------    ------

                                                          $9,771    $8,206
                                                          ======    ======
Liabilities and Stockholders' Equity

Notes payable                                             $  202    $  569
Mortgage payable to subsidiary                                --       298
Subordinated long-term debt                                2,199     1,878
Other liabilities                                            201        22
                                                          ------    ------
                                                           2,602     2,767

Stockholders' equity                                       7,169     5,439
                                                          ------    ------

                                                          $9,771    $8,206
                                                          ======    ======

                                      F-28

<PAGE>

                          TRI-STATE FINANCE CORPORATION
                                                                          
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                          
                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 17: PARENT COMPANY FINANCIAL INFORMATION (continued)

                       Condensed Statements of Operations

                     Years Ended December 31, 1996 and 1995

<TABLE>
<CAPTION>
                                                                   1996     1995     1994
                                                                   ----     ----     ----
                                                                        (in thousands)
<S>                                                              <C>      <C>      <C>
Income:
  Interest from loans                                            $    3   $    4    $   2
  Other                                                             120      116      112
                                                                 ------   ------    -----
                  Total income                                      123      120      114
                                                                 ------   ------    -----

Expenses:
  Interest on debt                                                  232      282      286
  Other                                                              38       39       39
                                                                 ------   ------    -----
                  Total expenses                                    270      321      325
                                                                 ------   ------    -----

Loss before equity in earnings of subsidiary and
  income taxes                                                     (147)    (201)    (211)

Equity in earnings of subsidiary                                  2,027    1,287      996
                                                                 ------   ------    -----
                  Net income before income taxes                  1,880    1,086      785

Income tax (expense) benefit                                        (51)     126       82
                                                                 ------   ------    -----

                  Net income                                     $1,829   $1,212    $ 867
                                                                 ======   ======    =====

</TABLE>

                                      F-29

<PAGE>

                          TRI-STATE FINANCE CORPORATION
                                                                          
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                          
                        DECEMBER 31, 1996, 1995, AND 1994

NOTE 17: PARENT COMPANY FINANCIAL INFORMATION (continued)

                       Condensed Statements of Cash Flows

                     Years Ended December 31, 1996 and 1995

<TABLE>
<CAPTION>
                                                             1996       1995        1994
                                                           -------     ------     ------
                                                                      (in thousands)
<S>                                                         <C>        <C>        <C>    
Cash flows from operating activities:                     
  Net income                                                $ 1,829    $ 1,212    $   867
  Depreciation and amortization                                  31         31         31
  Equity in undistributed earnings of subsidiary             (1,527)      (787)      (596)
  Other, net                                                    154        (22)      (119)
                                                            -------    -------    ------- 
              Net cash provided by operating activities         487        434        183
                                                            -------    -------    ------- 
                                                          
Cash flows from financing activities:                     
  Increase (decrease) in short-term notes payable, net         (367)       117        (78)
  Repayments of mortgage payable                               (298)       (36)       (33)
  Issuance of subordinated debt                                 321        193      1,420
  Repayment of subordinated debt                                 --       (553)    (1,365)
  Sale of treasury stock                                        109        103         --
  Dividends paid                                               (222)      (110)      (108)
                                                            -------    -------    ------- 
              Net cash used by financing activities            (457)      (286)      (164)
                                                            -------    -------    ------- 
                                                          
              Net increase in cash                               30        148         19
                                                          
Cash and due from banks at beginning of year                    230         82         63
                                                            -------    -------    ------- 
                                                          
Cash and due from banks at end of year                      $   260    $   230    $    82
                                                            =======    =======    =======
</TABLE>

Dividends paid by the Bank to the Company were $500,000, $500,000, and $400,000
for the years ended December 31, 1996, 1995, and 1994, respectively.

The Company is subject to regulatory requirements regarding the adequacy of the
bank's total capital in relation to its deposits and other considerations. Such
capital adequacy requirements limit the availability of undistributed earnings.


                                      F-30


<PAGE>

                                   APPENDIX A





<PAGE>


                        [The Wallach Company Letterhead]


                                                     December  , 1997

The Board of Directors
Tri-State Finance Corporation
616 E. Speer Boulevard
Denver, CO  80203

Members of the Board:

         You have requested our opinion as to the fairness, from a financial
point of view, to the common stockholders of Tri-State Finance Corporation ("the
Company") of the merger consideration (as defined below) in the proposed merger
(the "Merger") of the Company with and into Zions Bancorporation ("Zions"),
pursuant to the Merger Agreement dated September 23, 1997 (the "Agreement").
Under the terms of the Agreement 710,00 shares of Zions Common Stock, no par
value, will be issued to the holders of the Company's Class A and Class B Common
Stock. The shares of Zions Common Stock to be issued in the merger and pursuant
to the Agreement are herein referred to as the "Merger Consideration."

         In arriving at our opinion, we have, among other things:

              i.      reviewed certain financial statements and other financial
                      information of the Company;

              ii.     reviewed the current condition and growth prospects for
                      the Company and its subsidiary bank, including financial
                      projections prepared by the Company's management;

              iii.    discussed the past and current operations and financial
                      conditions and the prospects of the Company with the
                      Company's management;

              iv.     evaluated the economic, banking and competitive climate
                      for banking institutions in Colorado, with special
                      consideration given to recent transactions that may have
                      increased the competitive environment in the financial
                      services and banking industry;

              v.      reviewed the process used leading to the Zions offer,
                      including a review of the potential acquirors contacted
                      and their responses relative to a potential acquisition of
                      the Company;

              vi.     compared the various offers received from interested
                      parties and determined that the terms of the Agreement
                      represented the highest value in absolute terms;

                                      A-1



<PAGE>

              vii.    compared the Zions offer to recent transactions involving
                      other institutions of similar size, to the extent publicly
                      available;

              viii.   examined the price and trading activity for Zions;

              ix.     reviewed the implications for the Company shareholders
                      receiving Zions common stock with regards to prospects for
                      value, liquidity, dividend yield and growth;

              x.      met with Zions' management and reviewed certain publicly
                      available financial statements of Zions;

              xi.     reviewed the Agreement.

         We have assumed without independent verification the accuracy and
completeness of the financial and other information regarding the Company that
was provided to us or obtained from publicly available sources. We have not
prepared or acquired an independent valuation or appraisal of any of the assets
of the Company and we have assumed without independent verification that the
aggregate allowances for loan losses of the Company and Zions are adequate to
cover such losses. With respect to business plans and forecasts, we have assumed
that they have been reasonably prepared on a basis reflecting the best currently
available estimates and judgments of the management of the Company as to the
future performance of the Company and its subsidiary bank. Furthermore, we have
assumed that the Merger will be consummated on a timely basis in accordance with
its terms and pursuant to the Agreement. We have also taken into account our
assessment of general economic, market and financial conditions as they exist,
as well as our experience in connection with similar transactions and securities
valuations generally. Our opinion necessarily is based upon conditions as they
exist and can be evaluated as of the date of this opinion.

         The Wallach Company is an investment banking firm engaged in the
valuation of businesses and their securities in connection with mergers and
acquisitions, private placements, and valuations for corporate and other
purposes. The Wallach Company, as the Company's financial adviser, assisted with
the financial evaluation and negotiations leading to the Agreement for which it
has and will receive compensation.

         Based on our analysis of the foregoing, the assumptions described above
and upon such other factors we deem relevant, it is our opinion that, as of the
date hereof, the Merger Consideration is fair to the Company's shareholders from
a financial point of view.


                                      A-2


<PAGE>


January    , 1998
Page 1
                                   APPENDIX B


                                January ___, 1998



Board of Directors
Zions Bancorporation
One South Main Street
Salt Lake City, Utah 84111

Board of Directors
Tri-State Finance Corporation
616 East Speer Boulevard
Denver, Colorado 80203

Members of the Boards:

                  This is in response to your request for our tax opinion on the
proposed transactions pursuant to an Agreement and Plan of Reorganization (the
"Agreement") dated as of September 23, 1997 by and among Zions Bancorporation
("Zions Bancorp"), a Utah corporation, Val Cor Bancorporation, Inc. ("Val Cor"),
a Colorado corporation, Valley National Bank of Cortez ("Valley"), a national
banking association, Tri-State Finance Corporation (the "Company"), a Colorado
corporation, and Tri-State Bank, (the "Bank") a Colorado banking association,
pursuant to which the Company will merge with and into Val Cor ("the Holding
Company Merger") and Bank will merge with and into Valley (the "Bank Merger").
The conclusions presented herein are based on the facts and representations in
the Agreement and the Proxy Statement-Prospectus included as a part of the
Registration Statement on Form S-4 filed by Zions Bancorp with the Securities
and Exchange Commission ("SEC") on December , 1997 (collectively, the
"Documents"). The opinions expressed herein are conditioned on and subject to
the following:

         1.       the receipt by us of letters in the forms of Exhibits A and B
                  dated the Effective Date (the "Representation Letters"); and

         2.       the facts and representations set forth in the Documents and
                  the Representation Letters are true and correct.


<PAGE>


Board of Directors
January __, 1998
Page 2

FACTS
- -----

                  Zions Bancorp is a corporation duly incorporated and existing
in good standing under the laws of the State of Utah and is a bank holding
company registered under the Bank Holding Company Act of 1956, as amended. Zions
Bancorp is engaged primarily in the commercial banking business through its
banking subsidiaries in Utah, Nevada, Arizona, Colorado and Idaho. The common
stock of Zions Bancorp is traded over-the-counter in the NASDAQ National Market
System.

                  The authorized capital stock of Zions Bancorp consists of (i)
100,000,000 shares of common stock, without par value ("Zions Bancorp Common
Stock"), of which 59,426,300 shares were outstanding as of September 30, 1997,
and (ii) 3,000,000 shares of preferred stock, without par value, of which no
shares were outstanding as of September 30, 1997. Zions Bancorp and its
subsidiaries, including Val Cor and Valley, file a consolidated federal income
tax return.

                  Val Cor, a wholly-owned subsidiary of Zions Bancorp, is a
corporation organized under the laws of the State of Colorado and is a bank
holding company duly registered under the Bank Holding Company Act of 1956, as
amended. Val Cor is engaged in the commercial banking business in Colorado
through its subsidiary Valley.

                  The authorized capital stock of Val Cor is 500,000 shares of
common stock, $5.00 par value per share, of which 306,259 shares are issued and
outstanding and all of which are owned by Zions Bancorp.

                  Valley, a 99.7% subsidiary of Val Cor, is a national banking
association. Valley is engaged in the commercial banking business in Colorado.

                  The authorized capital stock of Valley is 600,000 shares of
common stock, $5.00 par value, of which 354,000 shares are issued and
outstanding and 99.7% of which are owned by Val Cor.

                  Company is a corporation duly incorporated and existing in
good standing under the laws of the State of Colorado and is a bank holding
company duly registered under the Bank Holding Company Act of 1956, as amended.
Company is engaged in the commercial banking business in Colorado through its
subsidiary, Bank. The common stock of Company is not traded on any market.

                  As of September 23, 1997, the authorized capital stock of
Company consisted of (i) 100,000 shares of Class A Voting Common Stock, par
value $1.00 per share, of which 100,000 shares were issued and outstanding and
(ii) 900,000 shares of Class B Non-Voting Common Stock, $1.00 par value, of
which 648,631 shares were issued and outstanding. Company has 4 Class A
shareholders and 54 Class B shareholders. Company and its subsidiary, Bank, file
a consolidated federal income tax return.

                  Bank, a wholly-owned subsidiary of Company, is a Colorado
banking corporation. Bank is engaged in the commercial banking business in
Colorado.

<PAGE>

Board of Directors
January __, 1998
Page 3


                  The authorized capital stock of the Bank is 20,000 shares of
common stock, $100.00 par value, of which 20,000 shares are issued and
outstanding and all of which are owned by Company.

THE TRANSACTION
- ---------------

                  Zions Bancorp and Company will combine their respective
businesses through a transaction (the "Transaction") intended to be two tax-free
reorganizations so that the Company may be more competitive in its market area
due to Zions' greater resources and Zions will be able to broaden its
geographical base in the Colorado market and expand its banking services.

                  The Agreement provides for the acquisition of Company by Zions
Bancorp through the merger of Company with and into Val Cor with Val Cor being
the surviving corporation (the "Holding Company Merger"). As a result of the
Holding Company Merger, the separate existence of Company shall cease, and all
of its assets, properties, obligations and liabilities shall become the assets,
properties, obligations and liabilities of Val Cor as the surviving corporation
in the Holding Company Merger. The affirmative vote of the holders of at least
66 2/3% of the outstanding Company Class A and Class B Common Stock, voting
separately by class, is required for approval of the Agreement.

                  At the Holding Company Merger Effective Date, by virtue of the
Holding Company Merger automatically and without any action on the part of the
holders thereof, each share of Company Class A Common Stock and Class B Common
Stock (collectively, the "Company Common Stock") issued and outstanding at the
Holding Company Merger Effective Date shall become and be converted into .9484
of a share of Zions Bancorp Common Stock, which is voting stock, with the
exception of shares which have not been voted in favor of the approval of this
Agreement with respect to which appraisal rights have been perfected in
accordance with the Colorado Business Corporation Act (the "Dissenting Shares").

                  On the Holding Company Merger Effective Date the holders of
certificates representing shares of Company Common Stock, including holders of
Dissenting Shares, shall cease to have any rights as stockholders of Company.

                  No fractional shares of Zions Bancorp Common Stock will be
issued in exchange for any shares of Company Common Stock. In lieu of such
fractional share interest, any holder of Company Common Stock who would
otherwise be entitled to a fractional share of Zions Bancorp Common Stock will,
upon surrender of his, her or its certificate or certificates representing
Company Common Stock, be paid the applicable cash value of such fractional share
interest, which shall be equal to the product of the fraction multiplied by
$40.625.

<PAGE>

Board of Directors
January __, 1998
Page 4

                  The Agreement also provides that immediately after the Holding
Company Merger, Bank will be merged with and into Valley with Valley being the
surviving corporation (the "Bank Merger"). As a result of the Bank Merger, the
separate existence of the Bank shall cease and all of its assets, properties,
obligations and liabilities shall become the assets, properties, obligations and
liabilities of Valley as surviving corporation in the Bank Merger.

                  At the Bank Merger Effective Date, by virtue of the Bank
Merger automatically and without any action on the part of the holders thereof,
each share of Bank Stock issued and outstanding at the Bank Merger Effective
Date shall become and converted into a number of shares of Valley stock, which
is voting stock, based on their relative tangible book values per share.

                  No fractional shares of Valley Common Stock will be issued in
exchange for any shares of Bank Common Stock. In lieu of such fractional share
interest, Val Cor, the holder of Bank Common Stock who would otherwise be
entitled to a fractional share of Valley Common Stock will, upon surrender of
its certificate or certificates representing Bank Common Stock, be paid the
applicable cash value of such fractional share interest, which shall be equal to
the product of the fraction multiplied by the tangible book value of a share of
Valley Common Stock on the Effective Date.


REPRESENTATIONS
- ---------------

                  In order to determine the consequences of the Transaction for
federal income tax purposes, you have directed us to rely on the following
assumptions and representations:

         (1)      The fair market value of the Zions Bancorp Common Stock
                  received by each Company shareholder pursuant to the Holding
                  Company Merger will be approximately equal to the fair market
                  value of the Company Common Stock surrendered in the exchange.

         (2)      There is no plan or intention by the shareholders of Company
                  who own 1 percent or more of the Company Common Stock, and to
                  the best of the knowledge of the management of Company, there
                  is no plan or intention on the part of the remaining
                  shareholders of Company to sell, exchange or otherwise dispose
                  of a number of shares of Zions Bancorp Common Stock received
                  in the Holding Company Merger that would reduce the Company
                  shareholders' ownership of Zions Bancorp Common Stock to a
                  number of shares having a value, as of the Holding Company
                  Merger Effective Date, of less than 50 percent of the value of
                  all of the formerly outstanding Company Common Stock as of the
                  same date. For purposes of this representation, shares of
                  Company Common Stock surrendered by dissenters or exchanged
                  for cash in lieu of fractional shares of Zions Bancorp Common
                  Stock are treated as outstanding Company Common Stock at the
                  Holding Company Merger Effective Date. Moreover, shares of
                  Company Common Stock and Zions Bancorp Common Stock held by
                  Company shareholders and otherwise sold, redeemed, or disposed
                  of prior or subsequent to the Holding Company Merger are
                  considered in making this representation.

<PAGE>

Board of Directors
January __, 1998
Page 5


         (3)      Val Cor will acquire at least 90 percent of the fair market
                  value of the net assets and at least 70 percent of the fair
                  market value of the gross assets held by Company immediately
                  prior to the Holding Company Merger. For purposes of this
                  representation, amounts paid by Company to holders of
                  Dissenting Shares, amounts paid by Company to shareholders who
                  receive cash or other property, amounts used by Company to pay
                  its reorganization expenses, and all redemptions and
                  distributions (except for regular, normal dividends) made by
                  Company immediately preceding the Holding Company Merger will
                  be included as assets of Company held immediately prior to the
                  Holding Company Merger.

         (4)      Prior to the Holding Company Merger, Zions Bancorp will be in
                  control of Val Cor within the meaning of Section 368(c) of the
                  Internal Revenue Code of 1986, as amended (the "Code").

         (5)      Following the Holding Company Merger, Val Cor will not issue
                  additional shares of its stock that would result in Zions
                  Bancorp losing control of Val Cor within the meaning of
                  Section 368(c) of the Code.

         (6)      Zions Bancorp and Val Cor have no plan or intention to
                  reacquire any of Zions Bancorp Common Stock issued in the
                  Holding Company Merger.

         (7)      Zions Bancorp has no plan or intention to liquidate Val Cor,
                  to merge Val Cor with and into another corporation, or to sell
                  or otherwise dispose of the stock of Val Cor, and Zions
                  Bancorp and Val Cor have no plan or intention to sell or
                  otherwise dispose of any of the assets of Company acquired in
                  the transaction, except for the merger of Bank into Valley,
                  dispositions made in the ordinary course of business and
                  transfers described in Section 368(a)(2)(C) of the Code.

         (8)      The liabilities of Company assumed by Val Cor and the
                  liabilities to which the transferred assets of Company are
                  subject were incurred by Company in the ordinary course of its
                  business.

         (9)      Following the Holding Company Merger, Val Cor will continue
                  the historic business of Company or use a significant portion
                  of Company's business assets in a business.

<PAGE>

Board of Directors
January __, 1998
Page 6

         (10)     Zions Bancorp, Val Cor, Company and the shareholders of
                  Company will pay their respective expenses, if any, incurred
                  in connection with the Holding Company Merger.

         (11)     There is no intercorporate indebtedness existing between Zions
                  Bancorp and Company or between Val Cor and the Company that
                  was issued, acquired, or will be settled at a discount.

         (12)     No two parties to the Holding Company Merger are "investment
                  companies" as defined in Sections 368(a)(2)(F)(iii) and (iv)
                  of the Code.

         (13)     Company is not under the jurisdiction of a court in a Title 11
                  or similar case within the meaning of Section 368(a)(3)(A) of
                  the Code.

         (14)     The fair market value of the assets of Company transferred to
                  Val Cor will equal or exceed the sum of the liabilities
                  assumed by Val Cor plus the amount of liabilities, if any, to
                  which the transferred assets are subject.

         (15)     No stock of Val Cor will be issued in the Holding Company
                  Merger.

         (16)     The payment of cash in lieu of fractional shares of Zions
                  Bancorp Common Stock is solely for the purpose of avoiding the
                  expense and inconvenience to Zions Bancorp of issuing
                  fractional shares and does not represent separately
                  bargained-for consideration. The total cash consideration that
                  will be paid in the Holding Company Merger to shareholders of
                  Company instead of issuing fractional shares of Zions Bancorp
                  Common Stock will not exceed 1 percent of the total
                  consideration that will be issued in the Holding Company
                  Merger to the shareholders of Company in exchange for their
                  shares of Company Common Stock. The fractional share interests
                  of each shareholder of Company will be aggregated, and no
                  shareholder of Company will receive cash in an amount equal to
                  or greater than the value of one full share of Zions Bancorp
                  Common Stock.

         (17)     None of the compensation to be received by any
                  shareholder-employees of Company will be separate
                  consideration for, or allocable to, any of their shares of
                  Company Common Stock; none of the shares of Zions Bancorp
                  Common Stock received by any shareholder-employees will be
                  separate consideration for, or allocable to, any employment
                  agreement; and the compensation paid to any
                  shareholder-employees will be for services actually rendered
                  and will be commensurate with amounts paid to third parties
                  bargaining at arm's-length for similar services.

         (18)     The merger of Company into Val Cor will qualify as a statutory
                  merger under the laws of Colorado.

<PAGE>

Board of Directors
January __, 1998
Page 7

         (19)     The fair market value of the Valley Common Stock received
                  pursuant to the Bank Merger by Val Cor, as Bank shareholder
                  immediately after the Holding Company Merger, will be
                  approximately equal to the fair market value of the Bank stock
                  surrendered in the exchange.

         (20)     There is no plan or intention by Val Cor to sell, exchange, or
                  otherwise dispose of any shares of Valley Common Stock
                  received in the Bank Merger.

         (21)     Valley has no plan or intention to reacquire any of its stock
                  issued in the Bank Merger.

         (22)     Valley has no plan or intention to sell or otherwise dispose
                  of any of the assets of Bank acquired in the Bank Merger,
                  except for dispositions made in the ordinary course of
                  business and transfers described in Section 368(a)(2)(C) 
                  of the Code.

         (23)     Following the Bank Merger, Valley will continue the historic
                  business of the Bank or use a significant portion of Bank's
                  historic business assets in a business.

         (24)     Valley, Bank, and Val Cor will pay their respective expenses,
                  if any, incurred in connection with the Bank Merger.

         (25)     There is no intercorporate indebtedness existing between Bank
                  and Valley that was issued, acquired, or will be settled at a
                  discount.

         (26)     No two parties to the Bank Merger are investment companies as
                  defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.

         (27)     Bank is not under the jurisdiction of a court in a Title 11 or
                  similar case within the meaning of Section 368(a)(3)(A) of the
                  Code.

         (28)     The fair market value and total adjusted basis of the assets
                  of Bank transferred to Valley will equal or exceed the sum of
                  the liabilities assumed by Valley plus the amount of
                  liabilities, if any, to which the transferred assets are
                  subject.

         (29)     The payment of cash in lieu of fractional shares of Valley
                  Common Stock is solely for the purpose of avoiding the expense
                  and inconvenience to Valley of issuing fractional shares and
                  does not represent separately bargained-for consideration. The
                  total cash consideration that will be paid in the Bank Merger
                  to the shareholder of Bank instead of issuing fractional
                  shares of Valley Common Stock will not exceed 1 percent of the
                  total consideration that will be issued in the Bank Merger to
                  the shareholder of Bank in exchange for its shares of Bank
                  Common Stock.

<PAGE>

Board of Directors
January __, 1998
Page 8

         (30)     The merger of Bank into Valley will qualify as a statutory
                  merger under the laws of Colorado.

         (31)     Zions Bancorp, Val Cor, Valley, the Company and Bank will not
                  take any position on any Federal, state or local income or
                  franchise tax return, or take any other action or reporting
                  position that is inconsistent with the treatment of the
                  Holding Company Merger and the Bank Merger as reorganizations
                  within the meaning of Section 368(a) of the Code.

APPLICABLE LAW
- --------------

A.       Holding Company Merger
         ----------------------

                  Section 368(a)(1)(A) of the Code provides that the term
"reorganization" means a statutory merger or consolidation. Under Section
1.368-2(b)(1) of the Regulations, in order to qualify as a reorganization under
Section 368(a)(1)(A) of the Code, the transaction must be a merger or
consolidation effected pursuant to the corporation laws of the United States or
a State or Territory or the District of Columbia ("Statutory Merger
Requirement"). It is represented that the Holding Company Merger will qualify as
a statutory merger under the laws of Colorado. Accordingly, the Holding Company
Merger will satisfy the Statutory Merger Requirement.

                  Section 368(a)(2)(D) of the Code provides that the acquisition
by one corporation, in exchange for stock of a corporation (referred to as the
"controlling corporation") which is in control of the acquiring corporation, of
substantially all of the properties of another corporation shall not disqualify
a transaction under Section 368(a)(1)(A) if (i) no stock of the acquiring
corporation is used in the transaction, and (ii) in the case of a transaction
under Section 368(a)(1)(A), such transaction would have qualified under Section
368(a)(1)(A) had the merger been into the controlling corporation.

                  Section 368(c) of the Code provides that the term "control"
means the ownership of stock possessing at least 80 percent of the total
combined voting power of all classes of stock entitled to vote and at least 80
percent of the total number of shares of all other classes of stock of the
corporation. At the time of the Transaction, Zions Bancorp will directly own
100% of the issued and outstanding stock of Val Cor; therefore, Zions Bancorp
will be in control of Val Cor within the meaning of Section 368(c) of the Code.

                  Rev. Proc. 77-37, 1977-2 C.B. 568, provides that the
"substantially all" requirement of Section 368(a)(2)(D) is satisfied if there is
a transfer of assets representing at least 90 percent of the fair market value
of the net assets and at least 70 percent of the fair market value of the gross
assets held by the corporation immediately prior to the transfer (the
"Substantially All Requirement"). Amounts paid by Company to dissenters, amounts
paid by Company to shareholders who receive cash or other property, amounts used
by Company to pay reorganization expenses and all redemptions and distributions
(except for regular, normal distributions) made by the Company immediately
preceding the transfer and which are part of the plan of reorganization will be
considered as assets held by the Company immediately prior to the transfer. It
is represented that Val Cor will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair market value of the
gross assets held by Company immediately prior to the Holding Company Merger and
that no stock of Val Cor will be issued in the Holding Company Merger. After the
merger of Bank, the wholly-owned subsidiary of Company, with and into Valley,
the 99.7% owned subsidiary of Val Cor, Val Cor will continue to own directly and
indirectly substantially all the assets of Company. Thus, the Holding Company
Merger will satisfy the Substantially All Requirement.

<PAGE>

Board of Directors
January __, 1998
Page 9

                  Section 1.368-2(b)(2) of the Regulations, in discussing the
requirement of Section 368(a)(2)(D)(ii) of the Code that the merger of the
target corporation into the acquiring corporation would have qualified as a
statutory merger under Section 368(a)(1)(A) of the Code had the merger been into
the controlling corporation, states:

                  "The foregoing test of whether the transaction would have
                  qualified under Section 368(a)(1)(A) if the merger had been
                  into the controlling corporation means that the general
                  requirements of a reorganization under Section 368(a)(1)(A)
                  (such as a business purpose, continuity of business enterprise
                  and continuity of interest) must be met in addition to the
                  special requirements of Section 368(a)(2)(D). Under this test,
                  it is not relevant whether the merger into the controlling
                  corporation could have been effected pursuant to State or
                  Federal corporation law."

                  In addition to the definitional requirements set forth in the
statute, in order for a transaction to be a tax-free reorganization, certain
requirements set forth under Section 1.368-1(b) of the Regulations must be
satisfied. The Regulations provide that the purpose of the reorganization
provisions of the Code is to except from the general rule of taxability certain
specifically described exchanges incident to such readjustments of corporate
structures made in one of the particular ways specified in the Code, as are
required by business exigencies and which effect only a readjustment of
continuing interest in property under the modified corporate forms. Requisite to
a reorganization under the Code are a continuity of the business enterprise
under the modified corporate form and a continuity of interest therein on the
part of those persons who, directly or indirectly, were the owners of the
enterprise prior to the reorganization.

                  To be treated as a reorganization, the transaction must be
planned and carried out reasons germane to the continuance of the business of
the corporation (the "Business Purpose Requirement"). The Company believes that
it will be more competitive in its market area due to Zions' greater resources
and Zions believes that it will be able to broaden its geographical base in the
Colorado market and expand its banking services. This should satisfy the
Business Purpose Requirement for the Holding Company Merger.

<PAGE>

Board of Directors
January __, 1998
Page 10

                  Section 1.368-1(d) of the Regulations provides that continuity
of business enterprise requires that the acquiring corporation either (i)
continue the acquired corporation's historic business or (ii) use a significant
portion of the acquired corporation's historic business assets in a business
(the "Continuity of Business Enterprise Requirement"). It is represented that
after the Holding Company Merger, Val Cor will continue the historic business of
Company or use a significant portion of such historic business assets in its
business. Accordingly, the Holding Company Merger will satisfy the Continuity of
Business Enterprise Requirement. The merger of Bank into Valley, an existing
subsidiary bank of Val Cor, will not adversely affect the Continuity of Business
Enterprise Requirement.

                  Under Section 1.368-1(b) of the Regulations, the continuity of
interest doctrine requires that in a reorganization there must be a continuing
interest through stock ownership on the part of those persons who, directly or
indirectly, were the owners of the stock of the acquired corporation prior to
the reorganization (the "continuity of interest requirement"). Rev. Proc. 77-37
(supra) provides that the continuity of interest requirement of Section
1.368-1(b) of the Regulations is satisfied if there is continuing interest
through the stock ownership in the acquiring or transferee corporation on the
part of the former shareholders of the acquired or transferor corporation which
is equal in value, as of the effective date of the reorganization, to at least
50 percent of the value of all of the formerly outstanding stock of the acquired
or transferor corporation as of the same date.

                  It is not necessary that each shareholder of the acquired or
transferor corporation receive in the exchange stock of the acquiring or
transferee corporation, or a corporation in "control" thereof, which is equal in
value to at least 50 percent of the value of his former stock interest in the
acquired or transferor corporation, so long as one or more shareholders of the
acquired or transferor corporation have a continuing interest through stock
ownership in the acquiring or transferee corporation (or a corporation in
"control" thereof) which is, in the aggregate, equal in value to at least 50
percent of the value of all of the formerly outstanding stock of the acquired or
transferor corporation. Sales, redemptions, and other dispositions of stock
occurring prior or, if planned or intended by the shareholder at the time of the
transaction, subsequent to the exchange which are part of the plan of
reorganization will be considered in determining whether there is a 50 percent
continuing interest through stock ownership as of the effective date of the
reorganization.

                  The 50 percent continuity of interest standard set forth in
Rev. Proc. 77-37 is a guideline utilized by the Internal Revenue Service in
determining whether to issue an advance ruling, and does not represent how much
continuity of interest is needed in a reorganization as a matter of law. In
fact, in Nelson v. Helvering, 296 U.S. 374 (1936), the Supreme Court held that
         -------------------

<PAGE>

Board of Directors
January __, 1998
Page 11

there was a valid reorganization when the continuity of interest was equal to 38
percent.

                  It is represented that there is no plan or intention by the
shareholders of Company who own 1 percent or more of Company Common Stock and,
to the best of the knowledge of the management of Company, there is no plan or
intention on the part of remaining shareholders of Company Common Stock to sell,
exchange, or otherwise dispose of a number of shares of Zions Bancorp Common
Stock that will reduce Company shareholders' ownership of such stock to a number
of shares having, as of the date of the Holding Company Merger, a value of less
than 50 percent of the total value of all the formerly outstanding shares of
Company Common Stock as of the same date. Accordingly, the Holding Company
Merger will satisfy the Continuity of Interest Requirement.

                  Based upon the analysis set forth above, the Holding Company
Merger will qualify as a reorganization as described under Sections 368(a) of
the Code.

B.       Bank Merger
         -----------

                  Section 368(a)(1)(A) of the Code provides that the term
"reorganization" means a statutory merger or consolidation. Under Section
1.368-2(b)(1) of the Regulations, in order to qualify as a reorganization under
Section 368(a)(1)(A) of the Code, the transaction must be a merger or
consolidation effected pursuant to the corporation laws of the United States or
a State or Territory or the District of Columbia (the "Statutory Merger
Requirement"). It is represented that the Bank Merger will qualify as a
statutory merger under the laws of Colorado. Accordingly, the Bank Merger will
satisfy the Statutory Merger Requirement.

                  In addition to the definitional requirements set forth in the
statute, in order for a transaction to be a tax-free reorganization, the
Business Purpose Requirement, Continuity of Business Enterprise Requirement and
Continuity of Interest Requirement must be satisfied.

                  Bank and Valley believe the Bank Merger will permit expansion
of their business operations in Colorado. This should satisfy the Business
Purpose Requirement for the Bank Merger.

                  It is represented that after the Bank Merger, Valley will
continue the historic business of Bank or use a significant portion of such
historic business assets in its business. Accordingly, the Bank Merger will
satisfy the Continuity of Business Enterprise Requirement.

                  It is represented that there is no plan or intention by the
shareholders of Company who own 1 percent or more of Company Common Stock and,
to the best of the knowledge of the management of Company, there is no plan or
intention on the part of remaining shareholders of Company Common Stock to sell,
exchange, or otherwise dispose of a number of shares of Zions Bancorp Common
Stock that will reduce Company shareholders' ownership of such stock to a number
of shares having, as of the date of the Holding Company Merger, a value of less
than 50 percent of the total value of all the formerly outstanding shares of
Company Common Stock as of the same date. It is represented that there is no
plan or intention by Val Cor, the sole shareholder of Bank as a result of the
Holding Company Merger, to sell, exchange, or otherwise dispose of any of the
shares of Valley Common Stock. Accordingly, the Bank Merger will satisfy the
Continuity of Interest Requirement.

<PAGE>

Board of Directors
January __, 1998
Page 12

                  Based on the analysis set forth above, the Bank Merger will
qualify as a reorganization under Section 368(a) of the Code.

C.       Tax Consequences of Reorganization Status
         -----------------------------------------

                  Section 368(b)(2) of the Code provides that the term "a party
to a reorganization" includes both corporations, in the case of a reorganization
resulting from the acquisition by one corporation of stock or properties of
another corporation. In the case of a reorganization qualifying under Section
368(a)(1)(A) by reason of Section 368(a)(2)(D), the term "a party to a
reorganization" also includes the controlling corporation referred to in Section
368(a)(2)(D). Accordingly, Zions Bancorp, Val Cor and Company will each be "a
party to a reorganization" in connection with the Holding Company Merger and
Valley and Bank will each be "a party to a reorganization" in connection with
the Bank Merger.

                  Section 361(a) of the Code provides that no gain or loss shall
be recognized to a corporation if such corporation is "a party to a
reorganization" and exchanges property, in pursuance of the plan of
reorganization, solely for stock or securities in another corporation, "a party
to the reorganization."

                  Section 361(b) of the Code provides that if Section 361(a)
would apply to an exchange but for the fact that the property received in
exchange consists not only of stock or securities permitted by Section 361(a) to
be received without the recognition of gain, but also of other property or
money, then

         (A)      Property distributed - If the corporation receiving such other
                  property or money distributes it in pursuance of the plan of
                  reorganization, no gain to the corporation shall be recognized
                  from the exchange, but

         (B)      Property not distributed - If the corporation receiving such
                  other property or money does not distribute it in pursuance of
                  the plan of reorganization, the gain, if any, to the
                  corporation shall be recognized.

                  The amount of gain recognized under subparagraph (B) shall not
exceed the sum of the money and the fair market value of the property so
received which is not so distributed.

                  Section 357(a) of the Code provides that if the taxpayer
receives property which would be permitted to be received under Section 361
without the recognition of gain if it were the sole consideration, and as a part
of the consideration, another party to the exchange assumes a liability of the
taxpayer, or acquires from the taxpayer property subject to a liability , then
such assumption or acquisition shall not be treated as money or other property,
and shall not prevent the exchange from being within the provisions of Section
361.

<PAGE>

Board of Directors
January __, 1998
Page 13

                  Since the Holding Company Merger is a reorganization under
Section 368(a) of the Code and Company is exchanging its property solely for
Zions Bancorp Common Stock and Zion Bancorp's assumption of its liabilities, no
gain or loss will be recognized by Company by reason of the Holding Company
Merger under Sections 361(a) and 357(a) of the Code. Since the Bank Merger is a
reorganization under Section 368(a) of the Code and the Bank is exchanging its
property solely for Valley Common Stock and Valley's assumption of its
liabilities, no gain or loss will be recognized by Bank as a result of the Bank
Merger.

                  Section 1032(a) of the Code provides that no gain or loss
shall be recognized to a corporation on the receipt of money or other property
in exchange for stock of such corporation. Accordingly, no gain or loss will be
recognized by Valley as a result of the Bank Merger.

                  Section 1.032-2 of the Regulations provides rules for certain
triangular reorganizations, such as a Section 368(a)(2)(D) transaction, when the
acquiring corporation ("S") acquires property or stock of another corporation
("T") in exchange for stock of the corporation ("P") in control of S. For
purposes of Section 1032 in the case of a Section 368(a)(2)(D) transaction, P
stock provided by P to S, or directly to T or T's shareholders on behalf of S,
pursuant to the plan of reorganization is treated as a disposition by P of
shares of its own stock for T's assets or stock as applicable. Section
1.1032-2(b) of the Regulations states that the P stock provided by P pursuant to
the plan of reorganization is treated for purposes of Section 1032 as disposed
of by P for the T assets required by S in the merger, and consequently, neither
P nor S has taxable gain or deductible loss on the exchange. In the case at
hand, Company will merge with and into Val Cor in exchange for Zions Bancorp
Common Stock, and cash in lieu of fractional shares pursuant to a reorganization
of Section 368(a)(2)(D) of the Code. Accordingly, no gain or loss will be
recognized by Val Cor or Zions Bancorp as a result of the Holding Company
Merger.

                  Section 362(b) of the Code provides that if property was
acquired by a corporation in connection with a reorganization, then the basis of
such property shall be the same as it would be in the hands of the transferor,
increased by the amount of gain recognized to the transferor on such transfer.
Since Val Cor will receive property (i.e., the assets) from Company and Valley
will receive property from the Bank in connection with a reorganization within
the meaning of Section 368(a) of the Code, the basis of the assets to be
received by Val Cor and Valley, respectively, will be the same as the basis of
those assets in the hands of Company and Bank, respectively, immediately prior
to the transfer.

<PAGE>

Board of Directors
January __, 1998
Page 14

                  Section 1223(2) of the Code provides that, in determining the
period for which the taxpayer has held property, however acquired, there shall
be included the period for which such property was held by any other person, if
such property has, for purposes of determining gain or loss from a sale or
exchange, the same basis (in whole or in part) in his hands as it would have in
the hands of such other person. Because the basis of the assets to be received
by Val Cor and Valley, respectively, will be the same as the basis of those
assets in the hands of Company and Bank, respectively, immediately prior to the
transfer, the holding period for the assets of Company and Bank, respectively,
to be received by Val Cor and Valley, respectively, will include the period
during which such assets were held by Company and Bank, respectively.

                  Section 354(a) provides that no gain or loss will be
recognized if stock in a corporation a party to a reorganization is, in
pursuance of the plan of reorganization, exchanged solely for stock in another
corporation a party to the reorganization. Therefore, since the shareholders of
Company, a party to the reorganization, will receive solely Zions Bancorp Common
Stock, another party to the reorganization, no gain or loss will be recognized
by the shareholders of Company (other than a Dissenting Shareholder), except
with respect to fractional share interests and since Val Cor, the shareholder of
Bank, will receive solely Valley Common Stock, another party to the
reorganization, no gain or loss will be recognized by Val Cor, except with
respect to fractional share interests.

                  Section 358(a)(1) of the Code provides that, in the case of an
exchange to which Section 354 applies, the basis of the property permitted to be
received under Section 354 without the recognition of gain or loss shall be the
same as that of the property exchanged, decreased by (i) the fair market value
of any other property (except money) received by the taxpayer, (ii) the amount
of any money received by the taxpayer, and (iii) the amount of loss to the
taxpayer which was recognized on such exchange, and increased by (i) the amount
which was treated as a dividend, and (ii) the amount of gain to the taxpayer
which was recognized on such exchange (not including any portion of such gain
which was treated as a dividend).

                  Since the Holding Company Merger and the Bank Merger each
constitute an exchange to which Section 354 of the Code applies, the basis of
the Zions Bancorp Common Stock (including the fractional share interests that
they would otherwise be entitled to receive) in the hands of the Company
shareholders will be the same as the basis of the Company Common Stock
surrendered in the exchange and similarly, the basis of the Valley Common Stock
received by Val Cor in the Bank Merger in the hands of Val Cor will be the same
as the basis of the Bank Common Stock surrendered in the exchange.

                  Section 1223(1) of the Code provides that, in determining the
period for which the taxpayer has held property received in an exchange, there
shall be included the period for which the taxpayer held the property exchanged
if the property has, for the purpose of determining gain or loss from a sale or
exchange, the same basis (in whole or in part) in his hands as the property
exchanged, provided the property exchanged at the time of such exchange is a
capital asset as defined in Section 1221 or property described in Section 1231.
Since the basis of the Zions Bancorp Common Stock held by the Company
shareholders and the Valley Common Stock held by Val Cor will have the same
basis (in whole or in part) as the stock exchanged, the holding period of the
Zions Bancorp Common Stock and Valley Common Stock, respectively, (including the
fractional share interests that they would otherwise be entitled to receive)
will include the period for which the Company Common Stock and Bank Common
Stock, respectively, was held, provided that such stock was held as a capital
asset on the date of the exchange.

<PAGE>

Board of Directors
January __, 1998
Page 15

                  Section 302(b)(3) of the Code provides that if a distribution
to a dissenting shareholder is in complete redemption of all of the stock of a
corporation owned by such shareholder actually or constructively, such
redemption shall be treated as a distribution in part or full payment in
exchange for such stock. Under Rev. Rul. 73-102, 1973-1 C.B. 186, because of the
operation of Section 302 of the Code, where cash is received by a Dissenting
Shareholder who will not receive actually or constructively any Zions Bancorp
Common Stock in the Transaction, such cash will be treated as received by the
Dissenting Shareholder as a distribution in redemption of his, her or its stock,
subject to the provisions and limitations of Section 302 of the Code.

OPINION
- -------


                  Based upon and subject to the foregoing, our opinion as to the
federal income tax consequences of the Transaction is as follows:

o        The Holding Company Merger will qualify as a reorganization under
         Section 368(a) of the Code. Zions Bancorp, Val Cor and Company will
         each be "a party to a reorganization" within the meaning of Section
         368(b) of the Code.

o        No gain or loss will be recognized to Company upon the transfer of its
         assets to Val Cor in exchange for Zions Bancorp Common Stock, the
         assumption by Val Cor of the liabilities of Company, and the cash to be
         paid in lieu of fractional shares. Sections 361(a) and 357(a) of the
         Code.

o        No gain or loss will be recognized to Zions Bancorp or Val Cor on the
         receipt of Company's assets by Val Cor and the assumption by Val Cor of
         Company's liabilities. Section 1.1032-2 of the Regulations.

o        The basis of the assets of Company in the hands of Val Cor will be the
         same as the basis of such assets in the hands of Company immediately
         prior to the Holding Company Merger. Section 362(b) of the Code.

<PAGE>

Board of Directors
January __, 1998
Page 16

o        The holding period of the property acquired by Val Cor from Company
         will include the holding period of such property in the hands of
         Company immediately prior to the Holding Company Merger. Section
         1223(2) of the Code.

o        No gain or loss will be recognized by a Company shareholder on the
         receipt of Zions Bancorp Common Stock (including any fractional share
         interest to which such holder may be entitled) solely in exchange for
         his shares of Company Common Stock. Section 354(a) of the Code.

o        The basis of Zions Bancorp Common Stock (including fractional share
         interest to which such holder may be entitled) received by a Company
         shareholder who exchanges Company Common Stock for Zions Bancorp Common
         Stock will be the same as the basis of the Company Common Stock
         surrendered in the exchange therefor.
         Section 358(a)(1) of the Code.

o        The holding period of the Zions Bancorp Common Stock (including
         fractional share interest to which such holder may be entitled)
         received by a Company shareholder will include the holding period of
         the Company Common Stock surrendered in exchange therefor, provided
         that such Company Common Stock was held as a capital asset at the
         Holding Company Merger Effective Date. Section 1223(1) of the Code.

o        Cash received by a Company shareholder in lieu of a fractional share
         interest of Zions Bancorp Common Stock will be treated as having been
         received as a distribution in full payment in exchange for the
         fractional share interest of Zions Bancorp Common Stock which such
         shareholder would otherwise be entitled to receive. This receipt of
         cash will result in gain or loss measured by the difference between the
         basis of such fractional share interest and the cash received. Such
         gain or loss will be capital gain or loss to the Company shareholder,
         provided the Company Common Stock was a capital asset in such
         shareholder's hands and, as such, will be subject to the provisions and
         limitations of Subchapter P of Chapter 1 of the Code. Rev. Rul. 66-365,
         1966-2 C.B. 116, and Rev. Proc. 77-41, 1977-2 C.B. 574.

o        Where cash is received by a Dissenting Shareholder in the Holding
         Company Merger, such cash payment will be treated as received by that
         shareholder as a distribution in redemption of his, her or its Company
         Common Stock, subject to the provisions and limitations of Section 302
         of the Code. Rev. Rul. 73-102, 1973-1 C.B. 186.

o        The Bank Merger will qualify as a reorganization under Section 368(a)
         of the Code. Valley and Bank will each be "a party to a reorganization"
         within the meaning of Section 368(b) of the Code.

<PAGE>

Board of Directors
January __, 1998
Page 17

o        No gain or loss will be recognized to Bank upon the transfer of its
         assets to Valley in exchange for Valley Common Stock, the assumption by
         Valley of the liabilities of Bank, and the cash to be paid in lieu of
         fractional shares. Sections 361(a) and 357(a) of the Code.

o        No gain or loss will be recognized to Valley on the receipt of Bank's
         assets by Valley and the assumption by Valley of Bank's liabilities.
         Section 1032(a) of the Code.

o        The basis of the assets of Bank in the hands of Valley will be the same
         as the basis of such assets in the hands of Bank immediately prior to
         the Bank Merger. Section 362(b) of the Code.

o        The holding period of the property acquired by Valley from Bank will
         include the holding period of such property in the hands of Bank
         immediately prior to the Bank Merger. Section 1223(2) of the Code.

o        No gain or loss will be recognized by Val Cor, the Bank shareholder, on
         the receipt of Valley Common Stock (including any fractional share
         interest to which such holder may be entitled) solely in exchange for
         its shares of Bank Common Stock. Section 354 of the Code.

o        The basis of Valley Common Stock (including fractional share interest
         to which such holder may be entitled) received by Val Cor, the Bank
         shareholder, on the exchange of Bank Common Stock for Valley Common
         Stock will be the same as the basis of the Bank Common Stock
         surrendered in the exchange therefor. Section 358(a)(1) of the Code.

o        The holding period of the Valley Common Stock (including fractional
         share interest to which such holder may be entitled) received by Val
         Cor, the Bank shareholder, will include the holding period of the Bank
         Common Stock surrendered in exchange therefor, provided that such Bank
         Common Stock was held as a capital asset at the Bank Merger Effective
         Date. Section 1223(1) of the Code.

                  Our opinion is not the equivalent of a ruling from the
Internal Revenue Service and may upon audit be challenged by the Internal
Revenue Service. Our opinion is based on the understanding that the relevant
facts are, and will be at the Merger Effective Date, as set forth in this
letter. It is also based on the Code, Regulations, case law and Internal Revenue
Service rulings as they now exist. These authorities are all subject to change
and such change may be made with retroactive effect. Were there to be such
changes either before or after the Merger Effective Date, or should the relevant
facts prove to be other than as we have reviewed, our opinion could be affected.

<PAGE>

Board of Directors
January __, 1998
Page 18

                  We hereby consent to the reference to us under the heading
"Tax Consequences" and "Plan of Reorganization Federal Income Tax Consequences
of the Reorganization" in the Proxy Statement-Prospectus and to the filing of
this opinion as an exhibit to the Registration Statement. In giving this
consent, we do not hereby admit that we are within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.

                                                     Very truly yours,



                                                     Baker & Hostetler LLP


<PAGE>


- -------------------------------------------------------------------------------
                                   APPENDIX C
- -------------------------------------------------------------------------------

                        COLORADO BUSINESS CORPORATION ACT
                           Rights of Dissenting Owners


         7-113-101  DEFINITIONS.--For purposes of this article:

         1. "Beneficial shareholder" means the beneficial owner of shares held
in a voting trust or by a nominee as the record shareholder.

         2. "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring domestic or foreign
corporation, by merger or share exchange of that issuer.

         3. "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 7-113-102 and who exercises that right at the
time and in the manner required by part 2 of this article.

         4. "Fair value", with respect to a dissenter's shares, means the value
of the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action except to the extent that exclusion would
be inequitable.

         5. "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at the legal rate as
specified in section 5-12-101, C.R.S.

         6. "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
that are registered in the name of a nominee to the extent such owner is
recognized by the corporation as the shareholder as provided in section
7-107-204.

         7. "Shareholder" means either a record shareholder or a beneficial
shareholder.

         7-113-102 RIGHT TO DISSENT.-- 1. A shareholder, whether or not entitled
to vote, is entitled to dissent and obtain payment of the fair value of the
shareholder's shares in the event of any of the following corporate actions:

         (a) Consummation of a plan of merger to which the corporation is a
party if:

         (I) Approval by the shareholders of that corporation is required for
the merger by section 7-111-103 or 7-111-104 or by the articles of
incorporation; or

         (II) The corporation is a subsidiary that is merged with its parent
corporation under section 7-111-104;

         (b) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired;


                                      C-1


<PAGE>


         (c) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of the corporation for which a
shareholder vote is required under section 7-112-102(1); and

         (d) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of an entity controlled by the
corporation if the shareholders of the corporation were entitled to vote upon
the consent of the corporation to the disposition pursuant to section
7-112-102(2).

         1.3. A shareholder is not entitled to dissent and obtain payment, under
subsection (1) of this section, of the fair value of the shares of any class or
series of shares which either were listed on a national securities exchange
registered under the federal "Securities Exchange Act of 1934", as amended or on
the national market system of the national association of securities dealers
automated quotation system, or were held of record by more than two thousand
shareholders, at the time of:

         (a) The record date fixed under section 7-107-107 to determine the
shareholders entitled to receive notice of the shareholders' meeting at which
the corporate action is submitted to a vote;

         (b) The record date fixed under section 7-107-104 to determine
shareholders entitled to sign writings consenting to the corporate action; or

         (c) The effective date of the corporate action if the corporate action
is authorized other than by a vote of shareholders.

         1.8. The limitation set forth in subsection (1.3) of this section shall
not apply if the shareholder will receive for the shareholder's shares, pursuant
to the corporate action, anything except:

         (a) Shares of the corporation surviving the consummation of the plan of
merger or share exchange;

         (b) Shares of any other corporation which at the effective date of the
plan of merger or share exchange either will be listed on a national securities
exchange registered under the federal "Securities Exchange Act of 1934", as
amended, or on the national market system of the National Association of
Securities Dealers Automated Quotation System, or will be held of record by more
than two thousand shareholders;

         (c) Cash in lieu of fractional shares; or

         (d) Any combination of the foregoing described shares or cash in lieu
of fractional shares.

         2.

         2.5. A shareholder, whether or not entitled to vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's shares in the
event of a reverse split that reduces the number of shares owned by the
shareholder to a fraction of a share or to scrip if the fractional share or
scrip so created is to be acquired for cash or the scrip is to be voided under
section 7-106-104.


                                      C-2

<PAGE>

         3. A shareholder is entitled to dissent and obtain payment of the fair
value of the shareholder's shares in the event of any corporate action to the
extent provided by the bylaws or a resolution of the board of directors.

         4. A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this article may not challenge the corporate action
creating such entitlement unless the action is unlawful or fraudulent with
respect to the shareholder or the corporation.

         7-113-103 DISSENT BY NOMINEES AND BENEFICIAL OWNERS.--1. A record
shareholder may assert dissenters' rights as to fewer than all the shares
registered in the record shareholder's name only if the record shareholder
dissents with respect to all shares beneficially owned by any one person and
causes the corporation to receive written notice which states such dissent and
the name, address, and federal taxpayer identification number, if any, of each
person on whose behalf the record shareholder asserts dissenters' rights. The
rights of a record shareholder under this subsection (1) are determined as if
the shares as to which the record shareholder dissents and the other shares of
the record shareholder were registered in the names of different shareholders.

         2. A beneficial shareholder may assert dissenters' rights as to the
shares held on the beneficial shareholder's behalf only if:

         (a) The beneficial shareholder causes the corporation to receive the
record shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and

         (b) The beneficial shareholder dissents with respect to all shares
beneficially owned by the beneficial shareholder.

         3. The corporation may require that, when a record shareholder dissents
with respect to the shares held by any one or more beneficial shareholders, each
such beneficial shareholder must certify to the corporation that the beneficial
shareholder and the record shareholder or record shareholders of all shares
owned beneficially by the beneficial shareholder have asserted, or will timely
assert, dissenters' rights as to all such shares as to which there is no
limitation on the ability to exercise dissenters' rights. Any such requirement
shall be stated in the dissenters' notice given pursuant to section 7-113-203.

         7-113-201 NOTICE OF DISSENTERS' RIGHTS.--1. If a proposed corporate
action creating dissenters' rights under section 7-113-102 is submitted to a
vote at a shareholders' meeting, the notice of the meeting shall be given to all
shareholders, whether or not entitled to vote. The notice shall state that
shareholders are or may be entitled to assert dissenters' rights under this
article and shall be accompanied by a copy of this article and the materials, if
any, that, under articles 101 to 117 of this title, are required to be given to
shareholders entitled to vote on the proposed action at the meeting. Failure to
give notice as provided by this subsection (1) shall not affect any action taken
at the shareholders' meeting for which the notice was to have been given, but
any shareholder who was entitled to dissent but who was not given such notice
shall not be precluded from demanding payment for the shareholder's shares under
this article by reason of the shareholder's failure to comply with the
provisions of section 7-113-202(1).


                                      C-3


<PAGE>


         2. If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant to
section 7-107-104, any written or oral solicitation of a shareholder to execute
a writing consenting to such action contemplated in section 7-107-104 shall be
accompanied or preceded by a written notice stating that shareholders are or may
be entitled to assert dissenters' rights under this article, by a copy of this
article, and by the materials, if any, that, under articles 101 to 117 of this
title, would have been required to be given to shareholders entitled to vote on
the proposed action if the proposed action were submitted to a vote at a
shareholders' meeting. Failure to give notice as provided by this subsection (2)
shall not affect any action taken pursuant to section 7-107-104 for which the
notice was to have been given, but any shareholder who was entitled to dissent
but who was not given such notice shall not be precluded from demanding payment
for the shareholder's shares under this article by reason of the shareholder's
failure to comply with the provisions of section 7-113-202(2).

         7-113-202 NOTICE OF INTENT TO DEMAND PAYMENT.--1. If a proposed
corporate action creating dissenters' rights under section 7-113-102 is
submitted to a vote at a shareholders' meeting and if notice of dissenters'
rights has been given to such shareholder in connection with the action pursuant
to section 7-113-201(1), a shareholder who wishes to assert dissenters' rights
shall:

         (a) Cause the corporation to receive, before the vote is taken, written
notice of the shareholder's intention to demand payment for the shareholder's
shares if the proposed corporate action is effectuated; and

         (b)    Not vote the shares in favor of the proposed corporate action.

         2. If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant to
section 7-107-104 and if notice of dissenters' rights has been given to such
shareholder in connection with the action pursuant to section 7-113-201(2) a
shareholder who wishes to assert dissenters' rights shall not execute a writing
consenting to the proposed corporate action.

         3. A shareholder who does not satisfy the requirements of subsection
(1) or (2) of this section is not entitled to demand payment for the
shareholder's shares under this article.

         7-113-203 DISSENTERS' NOTICE.--1. If a proposed corporate action
creating dissenters' rights under section 7-113-102 is authorized, the
corporation shall give a written dissenters' notice to all shareholders who are
entitled to demand payment for their shares under this article.

         2. The dissenters' notice required by subsection (1) of this section
shall be given no later than ten days after the effective date of the corporate
action creating dissenters' rights under section 7-113-102 and shall:

         (a) State that the corporate action was authorized and state the
effective date or proposed effective date of the corporate action;

         (b) State an address at which the corporation will receive payment
demands and the address of a place where certificates for certificated shares
must be deposited;


                                      C-4

<PAGE>


         (c) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;

         (d) Supply a form for demanding payment, which form shall request a
dissenter to state an address to which payment is to be made;

         (e) Set the date by which the corporation must receive the payment
demand and certificates for certificated shares, which date shall not be less
than thirty days after the date the notice required by subsection (1) of this
section is given;

         (f) State the requirement contemplated in section 7-113-103(3), if such
requirement is imposed; and

         (g) Be accompanied by a copy of this article.

         7-113-204 PROCEDURE TO DEMAND PAYMENT.--1. A shareholder who is given a
dissenters' notice pursuant to section 7-113-203 and who wishes to assert
dissenters' rights shall, in accordance with the terms of the dissenters'
notice:

         (a) Cause the corporation to receive a payment demand, which may be the
payment demand form contemplated in section 7-113-203(2)(d), duly completed, or
may be stated in another writing; and

         (b) Deposit the shareholder's certificates for certificated shares.

         2. A shareholder who demands payment in accordance with subsection (1)
of this section retains all rights of a shareholder, except the right to
transfer the shares, until the effective date of the proposed corporate action
giving rise to the shareholder's exercise of dissenters' rights and has only the
right to receive payment for the shares after the effective date of such
corporate action.

         3. Except as provided in section 7-113-207 or 7-113-209(1)(b), the
demand for payment and deposit of certificates are irrevocable.

         4. A shareholder who does not demand payment and deposit the
shareholder's share certificates as required by the date or dates set in the
dissenters' notice is not entitled to payment for the shares under this article.

         7-113-205 UNCERTIFICATED SHARES.--1. Upon receipt of a demand for
payment under section 7-113-204 from a shareholder holding uncertificated
shares, and in lieu of the deposit of certificates representing the shares, the
corporation may restrict the transfer thereof.

         2. In all other respects, the provisions of section 7-113-204 shall be
applicable to shareholders who own uncertificated shares.

         7-113-206 PAYMENT.--1. Except as provided in section 7-113-208, upon
the effective date of the corporate action creating dissenters' rights under
section 7-113-102 or upon receipt of a payment demand pursuant to section
7-113-204, whichever is later, the corporation shall pay each dissenter who
complied with section 7-113-204, at the address stated in the payment demand, or
if no such address is stated in the payment demand, at the address shown on the
corporation's current record of shareholders for the record shareholder holding


                                      C-5


<PAGE>


the dissenter's shares, the amount the corporation estimates to be the fair
value of the dissenter's shares, plus accrued interest.

         2. The payment made pursuant to subsection (1) of this section shall be
accompanied by:

         (a) The corporation's balance sheet as of the end of its most recent
fiscal year or, if that is not available, the corporation's balance sheet as of
the end of a fiscal year ending not more than sixteen months before the date of
payment, an income statement for that year, and, if the corporation customarily
provides such statements to shareholders, a statement of changes in
shareholders' equity for that year and a statement of cash flow for that year,
which balance sheet and statements shall have been audited if the corporation
customarily provides audited financial statements to shareholders, as well as
the latest available financial statements, if any, for the interim or full-year
period, which financial statements need not be audited;

         (b) A statement of the corporation's estimate of the fair value of the
shares;

         (c) An explanation of how the interest was calculated;

         (d) A statement of the dissenter's right to demand payment under
section 7-113-209; and

         (e) A copy of this article.

         7-113-207 FAILURE TO TAKE ACTION.--1. If the effective date of the
corporate action creating dissenters' rights under section 7-113-102 does not
occur within sixty days after the date set by the corporation by which the
corporation must receive the payment demand as provided in section 7-113-203,
the corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.

         2. If the effective date of the corporate action creating dissenters'
rights under section 7-113-102 occurs more than sixty days after the date set by
the corporation by which the corporation must receive the payment demand as
provided in section 7-113-203, then the corporation shall send a new dissenters'
notice, as provided in section 7-113-203, and the provisions of sections
7-113-204 to 7-113-209 shall again be applicable.

         7-113-208 SPECIAL PROVISIONS RELATING TO SHARES ACQUIRED AFTER
ANNOUNCEMENT OF PROPOSED CORPORATE ACTION.--1. The corporation may, in or with
the dissenters' notice given pursuant to section 7-113-203, state the date of
the first announcement to news media or to shareholders of the terms of the
proposed corporate action creating dissenters' rights under section 7-113-102
and state that the dissenter shall certify in writing, in or with the
dissenter's payment demand under section 7-113-204, whether or not the dissenter
(or the person on whose behalf dissenters' rights are asserted) acquired
beneficial ownership of the shares before that date. With respect to any
dissenter who does not so certify in writing, in or with the payment demand,
that the dissenter or the person on whose behalf the dissenter asserts
dissenters' rights acquired beneficial ownership of the shares before such date,
the corporation may, in lieu


                                      C-6


<PAGE>

of making the payment provided in section 7-113-206, offer to make such payment
if the dissenter agrees to accept it in full satisfaction of the demand.

         2. An offer to make payment under subsection (1) of this section shall
include or be accompanied by the information required by section 7-113-206(2).

         7-113-209 PROCEDURE IF DISSENTER IS DISSATISFIED WITH PAYMENT OR
OFFER.--1. A dissenter may give notice to the corporation in writing of the
dissenter's estimate of the fair value of the dissenter's shares and of the
amount of interest due and may demand payment of such estimate, less any payment
made under section 7-113-206, or reject the corporation's offer under section
7-113-208 and demand payment of the fair value of the shares and interest due,
if:

         (a) The dissenter believes that the amount paid under section 7-113-206
or offered under section 7-113-208 is less than the fair value of the shares or
that the interest due was incorrectly calculated;

         (b) The corporation fails to make payment under section 7-113-206
within sixty days after the date set by the corporation by which the corporation
must receive the payment demand; or

         (c) The corporation does not return the deposited certificates or
release the transfer restrictions imposed on uncertificated shares as required
by section 7-113-207(1).

         2. A dissenter waives the right to demand payment under this section
unless the dissenter causes the corporation to receive the notice required by
subsection (1) of this section within thirty days after the corporation made or
offered payment for the dissenter's shares.

         7-113-301 COURT ACTION.--1. If a demand for payment under section
7-113-209 remains unresolved, the corporation may, within sixty days after
receiving the payment demand, commence a proceeding and petition the court to
determine the fair value of the shares and accrued interest. If the corporation
does not commence the proceeding within the sixty-day period, it shall pay to
each dissenter whose demand remains unresolved the amount demanded.

         2. The corporation shall commence the proceeding described in
subsection (1) of this section in the district court of the county in this state
where the corporation's principal office is located or, if the corporation has
no principal office in this state, in the district court of the county in which
its registered office is located. If the corporation is a foreign corporation
without a registered office, it shall commence the proceeding in the county
where the registered office of the domestic corporation merged into, or whose
shares were acquired by, the foreign corporation was located.

         3. The corporation shall make all dissenters, whether or not residents
of this state, whose demands remain unresolved parties to the proceeding
commenced under subsection (2) of this section as in an action against their
shares, and all parties shall be served with a copy of the petition. Service on
each dissenter shall be by registered or certified mail, to the address stated
in such dissenter's payment demand, or if no such address is stated in the
payment demand, at the address shown on the corporation's current record of


                                      C-7


<PAGE>


shareholders for the record shareholder holding the dissenter's shares, or as
provided by law.

         4. The jurisdiction of the court in which the proceeding is commenced
under subsection (2) of this section is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend a
decision on the question of fair value. The appraisers have the powers described
in the order appointing them, or in any amendment to such order. The parties to
the proceeding are entitled to the same discovery rights as parties in other
civil proceedings.

         5. Each dissenter made a party to the proceeding commenced under
subsection (2) of this section is entitled to judgment for the amount, if any,
by which the court finds the fair value of the dissenter's shares, plus
interest, exceeds the amount paid by the corporation, or for the fair value,
plus interest, of the dissenter's shares for which the corporation elected to
withhold payment under section 7-113-208.

         7-113-302 COURT COSTS AND COUNSEL FEES.--1. The court in an appraisal
proceeding commenced under Section 7-113-301 shall determine all costs of the
proceeding, including the reasonable compensation and expenses of appraisers
appointed by the court. The court shall assess the costs against the
corporation; except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the court finds
the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding
payment under section 7-113-209.

         2. The court may also assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable:

         (a) Against the corporation and in favor of any dissenters if the court
finds the corporation did not substantially comply with the requirements of part
2 of this article; or

         (b) Against either the corporation or one of more dissenters, in favor
of any other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this article.

         3. If the court finds that the services of counsel for any dissenter
were of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to said counsel reasonable fees to be paid out of the amounts
awarded to the dissenters who were benefitted.


                                      C-8


<PAGE>


                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.  Indemnification of Directors and Officers

         Utah law provides for indemnification of directors and officers as
follows:

16-10a-902  AUTHORITY TO INDEMNIFY DIRECTORS.

      (1)Except as provided in Subsection (4), a corporation may indemnify an
individual made a party to a proceeding because he is or was a director, against
liability incurred in the proceeding if:

         (a) his conduct was in good faith; and

         (b) he reasonably believed that his conduct was in, or not opposed to,
the corporation's best interests; and

         (c) in the case of any criminal proceeding, he had no reasonable cause
to believe his conduct was unlawful.

      (2) A director's conduct with respect to any employee benefit plan for a
purpose he reasonably believed to be in or not opposed to the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of Subsection (1)(b).

      (3) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this section.

      (4) A corporation may not indemnify a director under this section:

         (a) in connection with a proceeding by or in the right of the
      corporation in which the director was adjudged liable to the corporation;
      or

         (b) in connection with any other proceeding charging that the director
      derived an improper personal benefit, whether or not involving action in
      his official capacity, in which proceeding he was adjudged liable on the
      basis that he derived an improper personal benefit.

      (5) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.

16-10a-903  MANDATORY INDEMNIFICATION OF DIRECTORS.

      Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was successful, on the merits or otherwise, in the
defense of any proceeding, or in the defense of any claim, issue, or matter in
the proceeding, to which he was a party because he is or was a director of the
corporation, against reasonable expenses incurred by him in connection with the
proceeding or claim with respect to which he has been successful.


                                      II-1


<PAGE>


16-10a-907  INDEMNIFICATION OF OFFICERS, EMPLOYEES, FIDUCIARIES, AND AGENTS.

      Unless a corporation's articles of incorporation provide otherwise:

      (1) an officer of the corporation is entitled to mandatory indemnification
under Section 16-10a-903, and is entitled to apply for court-ordered
indemnification under Section 16-10a-905, in each case to the same extent as a
director;

      (2) the corporation may indemnify and advance expenses to an officer,
employee, fiduciary, or agent of the corporation to the same extent as to a
director; and

      (3) a corporation may also indemnify and advance expenses to an officer,
employee, fiduciary, or agent who is not a director to a greater extent, if not
inconsistent with public policy, and if provided for by its articles of
incorporation, bylaws, general or specific action of its board of directors, or
contract.

16-10a-908  INSURANCE.

      A corporation may purchase and maintain liability insurance on behalf of a
person who is or was a director, officer, employee, fiduciary, or agent of the
corporation, or who, while serving as a director, officer, employee, fiduciary,
or agent of the corporation, is or was serving at the request of the corporation
as a director, officer, partner, trustee, employee, fiduciary, or agent of
another foreign or domestic corporation or other person, or of an employee
benefit plan, against liability asserted against or incurred by him in that
capacity or arising from his status as a director, officer, employee, fiduciary,
or agent, whether or not the corporation would have power to indemnify him
against the same liability under Sections 16-10a-902, 16-10a-903, or 16-10a-907.
Insurance may be procured from any insurance company designated by the board of
directors, whether the insurance company is formed under the laws of this state
or any other jurisdiction of the United States or elsewhere, including any
insurance company in which the corporation has an equity or any other interest
through stock ownership or otherwise.

16-10a-909   LIMITATIONS OF INDEMNIFICATION OF DIRECTORS.

      (1) A provision treating a corporation's indemnification of, or advance
for expenses to, directors that is contained in its articles of incorporation or
bylaws, in a resolution of its shareholders or board of directors, or in a
contract (except an insurance policy) or otherwise, is valid only if and to the
extent the provision is not inconsistent with this part. If the articles of
incorporation limit indemnification or advance of expenses, indemnification and
advance of expenses are valid only to the extent not inconsistent with the
articles of incorporation.

      (2) This part does not limit a corporation's power to pay or reimburse
expenses incurred by a director in connection with the director's appearance as
a witness in a proceeding at a time when the director has not been made a named
defendant or respondent to the proceeding.


                                      II-2



<PAGE>



Item 21.  Exhibits and Financial Statement Schedules.

      (a) Exhibits. An Exhibit Index, containing a list of all exhibits filed
with this Registration Statement, is included beginning on page II-7.

      (b) Financial Statement Schedules.  Not applicable.

      (c) Report, Opinion or Appraisal.  Not applicable.

Item 22.  Undertakings.

      The undersigned registrant hereby undertakes as follows:

      (1) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

      (2) to deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X is not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.

      (3) that prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.

      (4) that every prospectus (i) that is filed pursuant to paragraph (3)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act of 1933, as amended, and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

      (5) that insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 20


                                      II-3


<PAGE>


above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

      (6) to respond to requests for information that is incorporated by
reference into the Proxy Statement/Prospectus pursuant to Items 4, 10(b), 11 or
13 of Form S-4, within one business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
Effective Date of the registration statement through the date of responding to
the request.

      (7) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.


                                      II-4



<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Salt Lake City, Utah,
on the 22nd day of December, 1997.


                                          Zions Bancorporation



                                          By:  /s/ Harris H. Simmons
                                              ------------------------------
                                              Harris H. Simmons, President
                                                and Chief Executive Officer


                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Harris H. Simmons, Roy W. Simmons, and
Dale M. Gibbons, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or either of
them, or their or his substitutes, may lawfully do or cause to be done by virtue
thereof.

         Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature                  Capacity                             Date
- ---------                  --------                             ----

/s/ Harris M. Simmons
- ---------------------      President, Chief Executive
Harris H. Simmons          Officer and Director            December 22, 1997

/s/ Dale M. Gibbons
- ---------------------      Senior Vice President 
Dale M. Gibbons            Chief Financial Officer         December 22, 1997

/s/ Walter E. Kelly
- ---------------------      Controller                      December 22, 1997
Walter E. Kelly


___________________        Chairman and Director           _____________, 1997
Roy W. Simmons


                                II-5


<PAGE>





/s/ Jerry C. Atkin
- ----------------------     Director                        December 22, 1997
Jerry C. Atkin

/s/ R. D. Cash
- ----------------------     Director                        December 22, 1997
R. D. Cash

/s/ L. E. Simmons
- ----------------------     Director                        December 22, 1997
L. E. Simmons

/s/ Grant R. Caldwell
- ----------------------     Director                        December 22, 1997
Grant R. Caldwell

/s/ I. J. Wagner
- ----------------------     Director                        December 22, 1997
I. J. Wagner

/s/ Roger B. Porter
- ----------------------     Director                        December 22, 1997
Roger B. Porter


- ----------------------     Director                                   , 1997
Dale W. Westergard

/s/ Richard H. Madsen
- ----------------------     Director                        December 22, 1997
Richard H. Madsen

/s/ Robert G. Sarver
- ----------------------     Director                        December 22, 1997
Robert G. Sarver



                                      II-6


<PAGE>



                                 EXHIBIT INDEX

                    (Pursuant to Item 601 of Regulation S-K)
<TABLE>
<CAPTION>

                                                                                     Page Number
                                                                                    in Sequential
Exhibit                                                                               Numbering
  No.            Description and Method of Filing                                       System
- -------          --------------------------------                                   -------------
<S>               <C>                                                                   <C>

2.1               Agreement and Plan of Reorganization dated as of September 23,
                  1997 among Zions Bancorporation, Val Cor Bancorporation, Inc.,
                  Valley National Bank of Cortez, Tri-State Finance Corporation,
                  and Tri-State Bank (filed herewith)

3.1               Restated Articles of Incorporation of Zions Bancorporation             *
                  dated November 8, 1993, and filed with the Department of
                  Business Regulation, Division of Corporations of the State of
                  Utah on November 9, 1993 (incorporated by reference to Exhibit
                  3.1 to the Registrant's Form S-4 Registration Statement, File
                  No. 33-51145, filed on November 22, 1993)

3.2               Restated Bylaws of Zions Bancorporation, dated November 8,             *
                  1993 (incorporated by reference to Exhibit 3.2 to the
                  Registrant's Form S-4 Registration Statement, File No.
                  33-51145, filed November 22, 1993)

3.3               Articles of Amendment to the Restated Articles of                      *
                  Incorporation of Zions Bancorporation dated April 30, 1997 and
                  filed with the Department of Business Regulation, Division of
                  Corporations of the State of Utah on May 2, 1997 (incorporated
                  by reference to Exhibit 3.1 of Zions Bancorporation's
                  Quarterly Report on Form 10-Q for the quarter ended June 30,
                  1997, File No. 0-2610)

5                 Opinion of Duane, Morris & Heckscher LLP regarding the 
                  legality of the shares of Common Stock being registered (filed
                  herewith)

8                 Form of opinion of Baker & Hostetler LLP regarding tax matters
                  (filed herewith as Appendix B to the Proxy
                  Statement/Prospectus)

10.1              Amended and Restated Zions Bancorporation Pension Plan                 *
                  (incorporated by reference to Exhibit 10.1 of Zions
                  Bancorporation's Annual Report on Form 10-K for the year ended
                  December 31, 1994, File No. 0-2610)

</TABLE>

                                      II-7

<PAGE>



<TABLE>

<S>               <C>                                                                    <C>
10.2              Amendment to Zions Bancorporation Pension Plan effective               *
                  December 1, 1994 (incorporated by reference to Exhibit 10.2 of
                  Zions Bancorporation's Annual Report on Form 10-K for the year
                  ended December 31, 1994, File No. 0-2610)

10.3              Zions Utah Bancorporation Supplemental Retirement Plan Form            *
                  (incorporated by reference to Exhibit 19.4 of Zions Utah
                  Bancorporation's Quarterly Report on Form 10-Q for the quarter
                  ended September 30, 1985, File No. 0-2610)

10.4              Zions Utah Bancorporation Key Employee Incentive Stock Option          *
                  Plan approved by the shareholders of the Company on April 28,
                  1982 (incorporated by reference to Exhibit 10.1 of Zions
                  Bancorporation's Quarterly Report on Form 10-Q for the quarter
                  ended June 30, 1995, File No. 0-2610)

10.5              Amendment No. 1 to Zions Bancorporation Key Employee Incentive         *
                  Stock Option Plan approved by the shareholders of the Company
                  on April 27, 1990 (incorporated by reference to Exhibit 10.2
                  of Zions Bancorporation's Quarterly Report on Form 10-Q for
                  the quarter ended June 30, 1995, File No. 0-2610)

10.6              Amendment No. 2 to Zions Bancorporation Key Employee Incentive         *
                  Stock Option Plan approved by the shareholders of the Company
                  of April 28, 1995 (incorporated by reference to Exhibit 10.3
                  of Zions Bancorporation's Quarterly Report on Form 10-Q for
                  the quarter ended June 30, 1995, File No. 0-2610)

10.7              Zions Bancorporation Deferred Compensation Plan for Directors,         *
                  as amended May 1, 1991 (incorporated by reference to Exhibit
                  19 of Zions Bancorporation's Annual Report on Form 10-K for
                  the year ended December 31, 1991, File No.
                  0-2610)

10.8              Zions Bancorporation Senior Management Value Sharing Plan,             *
                  Award Period 1991-1994 (incorporated by reference to Exhibit
                  19 of Zions Bancorporation's Annual Report on Form 10-K for
                  the year ended December 31, 1992, File No.
                  0-2610)

10.9              Zions Bancorporation Senior Management Value Sharing Plan,             *
                  Award Period 1992-1995 (incorporated by reference to Exhibit
                  10.6 of Zions Bancorporation's Annual Report on Form 10-K for
                  the year ended December 31, 1992, File No.
                  0-2610)

10.10             Zions Bancorporation Senior Management Value Sharing Plan,              *
                  Award Period 1993-1996 (incorporated by reference to Exhibit
                  10.8 of Zions Bancorporation's Annual Report on Form 10-K for
                  the year ended December 31, 1993, File No.
                  0-2610)
</TABLE>

                                      II-8


<PAGE>

<TABLE>
<S>               <C>                                                                    <C>
10.11             Zions Bancorporation Senior Management Value Sharing Plan,             *
                  Award Period 1994-1997 (incorporated by reference to exhibit
                  10.9 of Zions Bancorporation's Annual Report on Form 10-K for
                  the year ended December 31, 1994, File No. 0-2610)

10.12             Zions Bancorporation Senior Management Value Sharing Plan              *
                  Award Period 1995-1998 (incorporated by reference to Exhibit
                  10.14 of Zions Bancorporation's Annual Report on Form 10-K for
                  the year ended December 31, 1995, File No. 0-2610)

10.13             Zions Bancorporation Executive Management Pension Plan                 *
                  (incorporated by reference to Exhibit 10.10 of Zions
                  Bancorporation's Annual Report on Form 10-K for the year ended
                  December 31, 1994, File No. 0-2610)

10.14             Zions Bancorporation Non-Employee Directors Stock Option Plan          *
                  approved by the shareholders of the Company on April 26, 1996
                  (incorporated by reference to Exhibit 10 of Zions
                  Bancorporation's Quarterly Report on Form 10-Q for the quarter
                  ended June 30, 1996, File No. 0-2610)

10.15             Form of Employment Agreement between Pitkin County Bank &              *
                  Trust Company and Charles B. Israel (incorporated by reference
                  to Exhibits 10.16 to the Registrant's Form S-4 Registration
                  Statement, File No. 333-23839, filed on March 24, 1997)

10.16             Form of Employment Agreement between Nevada State Bank and             *
                  John Dedolph (incorporated by reference to Exhibit 10.17 to
                  the Registrant's Form S-4 Registration Statement, File No.
                  333-34951, filed on September 4, 1997)

10.17             Zions Bancorporation Pension Plan amended and restated                 *
                  effective April 1, 1997 (incorporated by reference to Exhibit
                  10 of Zions Bancorporation's Quarterly Report on Form 10-Q for
                  the quarter ended March 31, 1997, File No. 0-2610)

10.18             Form of Employment Agreement between The First National Bank           *
                  in Alamosa and David E. Broyles (incorporated by reference to
                  Exhibit 10.17 to the Registrant's S-4 Registration Statement,
                  File No. 333-41821, filed on December 10, 1997)

</TABLE>

                                      II-9


<PAGE>

<TABLE>



<S>               <C>                                                                    <C>
10.19             Form of Advisory Agreement between The First National                  *
                  Bank in Alamosa and Ralph H. Outcalt (incorporated by
                  reference to Exhibit 10.18 to the Registrant's Form S-4
                  Registration Statement, File No. 333-41821, filed on December
                  10, 1997)

10.20             Form of Advisory Agreement between The First National Bank in          *
                  Alamosa and Donald J. Wuckert (incorporated by reference to
                  Exhibit 10.19 to the Registrant's Form S-4 Registration
                  Statement, File No. 333-41821, filed on December 10, 1997)

10.21             Form of Employment Agreement between Valley National Bank of
                  Cortez and Richard C. Tucker (filed as Exhibit VII to the
                  Agreement and Plan of Reorganization, incorporated by
                  reference as Exhibit 2.1 above)

21                List of subsidiaries of Zions Bancorporation (incorporated by
                  reference to Exhibit 21 of Zions Bancorporation's Annual
                  Report on Form 10-K for the year ended December 31, 1995, File
                  No. 0-2610)

23.1              Consent of KPMG Peat Marwick LLP, independent certified public
                  accountants for Zions Bancorporation (filed herewith)

23.2              Consent of Baird, Kurtz & Dobson, independent certified public
                  accountants for Tri-State Finance Corporation (filed herewith)

23.3              Consent of McGladrey and Pullen LLP, independent certified
                  public accountants for Tri-State Financial Corporation (filed
                  herewith)

23.4              Consent of KPMG Peat Marwick LLP, independent certified public
                  accountants for Tri-State Financial Corporation (filed
                  herewith)

23.5              Consent of The Wallach Company, Inc. (filed herewith)

23.6              Consent of Duane, Morris & Heckscher LLP (contained in their
                  opinion filed as Exhibit 5)

23.7              Consent of Baker & Hostetler LLP (contained in their opinion
                  filed as Appendix B)

24.1              Power of Attorney (set forth on Page II-5 of the Registration 
                  Statement)

99.1              Preliminary copy of letter to shareholders of Tri-State
                  Finance Corporation (filed herewith)

</TABLE>

                                     II-10


<PAGE>

<TABLE>


<S>               <C>                                                          
99.2              Preliminary copy of Notice of Special Meeting of Shareholders
                  of Tri-State Finance Corporation (filed herewith)

99.3              Preliminary copy of form of proxy for use by Class A
                  shareholders of Tri-State Finance Corporation (filed herewith)

99.4              Preliminary copy of form of proxy for use by Class B
                  shareholders of Tri-State Finance Corporation (filed herewith)

99.5              Form of Voting Agreement between Zions Bancorporation and
                  various shareholders of Tri-State Finance Corporation (filed
                  herewith as part of Agreement and Plan of Reorganization,
                  filed as Exhibit 2.1)

99.6              Fairness Opinion of The Wallach Company, Inc. (filed herewith
                  as Appendix A)


</TABLE>

_________________
* incorporated by reference






                                     II-11





                                   EXHIBIT 2.1

                      AGREEMENT AND PLAN OF REORGANIZATION





<PAGE>



                      AGREEMENT AND PLAN OF REORGANIZATION


         THIS AGREEMENT AND PLAN OF REORGANIZATION made as of the twenty-third
day of September, 1997, among ZIONS BANCORPORATION ("Zions Bancorp"), a Utah
corporation having its principal office in Salt Lake City, Utah, VAL COR
BANCORPORATION, INC. ("Val Cor"), a Colorado corporation having its principal
office in Cortez, Colorado, VALLEY NATIONAL BANK OF CORTEZ ("Valley"), a
national banking association organized under the laws of the United States,
TRI-STATE FINANCE CORPORATION (the "Company"), a Colorado corporation having its
principal office in Denver, Colorado, and TRI-STATE BANK (the "Bank"), a banking
corporation organized under the laws of the State of Colorado

                          W I T N E S S E T H     T H A T :

         WHEREAS, the Company is a bank holding company and the sole shareholder
of the Bank;

         WHEREAS, Zions Bancorp is a bank holding company and the sole
shareholder of Val Cor;

         WHEREAS, Val Cor is a bank holding company which owns in excess of 99
percent of the outstanding capital stock of Valley as of the date of this
Agreement;

         WHEREAS, Zions Bancorp and Val Cor each desire to affiliate with the
Company through the merger of the Company with and into Val Cor, with Val Cor to
be the surviving corporation (the "Holding Company Merger") and, in addition, to
cause the merger of the Bank with and into Valley, with Valley to be the
surviving national banking association (the "Bank Merger");

         WHEREAS, the Board of Directors of the Company has determined that it
would be in the best interests of the Company, its shareholders, its customers
and those of the Bank and the areas served by the Company and the Bank to become
affiliated with Zions Bancorp through the Holding Company Merger and to cause
the Bank Merger;

         WHEREAS, the respective boards of directors of Valley and the Bank have
determined that it would be in the best interests of Valley or the Bank, as the
case may be, its shareholders and customers, for Valley and the Bank to merge
with each other;

         WHEREAS, the respective Boards of Directors of Zions Bancorp, Val Cor,
and the Company have agreed to cause the Holding Company Merger pursuant to the
provisions of section 7-111-101 et seq. of the Colorado Business Corporation
Act; and to cause the Bank Merger pursuant to the provisions of section 215a of
the National Bank Act (12 U.S.C. ss. 215a) and section 11-4-102 of the Colorado
Revised Statutes;


<PAGE>



         WHEREAS, the respective Boards of Directors of Valley and the Bank have
agreed to cause the Bank Merger pursuant to the provisions of section 215a of
the National Bank Act and section 11-4-102 of the Colorado Revised Statutes; and

         WHEREAS, the parties intend that the Holding Company Merger and the
Bank Merger qualify as one or more tax-free reorganizations under section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code");

         NOW, THEREFORE, in consideration of these premises and the mutual
agreements hereinafter set forth, the parties agree as follows:

1.       Combinations.

         1.1.  Form of Combinations.

               (a) Val Cor and the Company will execute a merger agreement (the
"Holding Company Merger Agreement") substantially in the form of Exhibit I
annexed hereto. Subject to the provisions of the Holding Company Merger
Agreement, the Company will be merged with and into Val Cor in the Holding
Company Merger and Val Cor shall be the surviving corporation. The shares of
Class A Common Stock, $1.00 par value, of the Company (the "Class A Common
Stock") and the shares of the Class B Common Stock, $1.00 par value, of the
Company (the "Class B Common Stock") (together, the "Company Common Stock")
shall be canceled and immediately converted into the right to receive, subject
to the terms, conditions, and limitations set forth herein, such consideration
as is provided in section 1.2(a) hereof.

               (b) Valley and the Bank will execute a merger agreement (the
"Bank Merger Agreement") substantially in the form of Exhibit II annexed hereto.
Immediately following the effectiveness of the Holding Company Merger, and
subject to the provisions of the Bank Merger Agreement, the Bank will be merged
with and into Valley in the Bank Merger and Valley shall be the surviving
national banking association. The shares of common stock of the Bank shall be
canceled and immediately converted into the right to receive, subject to the
terms, conditions, and limitations set forth herein, such consideration as is
provided in section 1.2(b) hereof.


                                      -2-


<PAGE>


         1.2. Consideration for Mergers. Subject to the terms, conditions, and
limitations set forth herein, upon surrender of his or her certificate or
certificates in accordance with Section 1.1 hereof:

               (a) each holder of shares of Company Common Stock shall be
entitled to receive, in exchange for each share of Company Common Stock held of
record by such stockholder as of the Effective Date, that number of shares of
the common stock of Zions Bancorp, no par value (the "Zions Bancorp Stock")
calculated by dividing 710,000 by the total number of shares of Company Common
Stock that shall be issued and outstanding at the Effective Date; and

               (b) each holder of shares of the Common Stock, $100.00 par value,
of the Bank (the "Bank Common Stock") shall be entitled to receive, in exchange
for each share of Bank Common Stock held of record by such stockholders as of
the Effective Date, that number of shares of the common stock of Valley, $5.00
par value (the "Valley Common Stock") calculated by, first, dividing the
tangible book value of Valley at the close of business on the business day
before the Effective Date by the number of shares of Valley Common Stock that
shall be issued and outstanding at the Effective Date, and second, dividing the
tangible book value of the Bank at the close of business on the business day
before the Effective Date by the number so reached, and third, dividing the
number so reached by the total number of shares of Bank Common Stock that shall
be issued and outstanding at the Effective Date.

         1.3.  No Fractional Shares.

               (a) Zions Bancorp will not issue fractional shares of its stock.
In lieu of fractional shares of Zions Bancorp Stock, if any, each shareholder of
the Company who is entitled to a fractional share of Zions Bancorp Stock shall
receive an amount of cash equal to the product of such fraction times $40.625.
Such fractional share interest shall not include the right to vote or to receive
dividends or any interest thereon.

               (a) Valley will not issue fractional shares of its stock. In lieu
of fractional shares of Valley Common Stock, if any, each shareholder of the
Bank who is entitled to a fractional share of Valley Common Stock shall receive
an amount of cash equal to the product of such fraction times the tangible book
value per share of Valley Common Stock immediately preceding the Effective Date.
Such fractional share interest shall not include the right to vote or to receive
dividends or any interest thereon.


                                      -3-

<PAGE>


         1.4.  Dividends; Interest.

               (a) No shareholder of the Company will be entitled to receive
dividends on his or her Zions Bancorp Stock until he or she exchanges his or her
certificates representing Company Common Stock for Zions Bancorp Stock. Any
dividends declared on Zions Bancorp Stock (which stock is to be delivered
pursuant to this Agreement) to holders of record on or after the Effective Date
shall be paid to the Exchange Agent (as designated in Section 1.5 of this
Agreement) and, upon receipt of the certificates representing shares of Company
Common Stock, the Exchange Agent shall forward to the former shareholders
entitled to receive Zions Bancorp Stock (i) certificates representing their
shares of Zions Bancorp Stock, (ii) dividends declared thereon subsequent to the
Effective Date (without interest) and (iii) the cash value of any fractional
shares determined in accordance with Section 1.3(a) hereof.

               (a) No shareholder of the Bank will be entitled to receive
dividends on his or her Valley Common Stock until he or she exchanges his or her
certificates representing Bank Common Stock for Valley Common Stock. Any
dividends declared on Valley Common Stock (which stock is to be delivered
pursuant to this Agreement) to holders of record on or after the Effective Date
shall be paid to the Exchange Agent (as designated in Section 1.5 of this
Agreement) and, upon receipt of the certificates representing shares of Bank
Common Stock, the Exchange Agent shall forward to the former shareholders
entitled to receive Valley Common Stock (i) certificates representing their
shares of Valley Common Stock, (ii) dividends declared thereon subsequent to the
Effective Date (without interest) and (iii) the cash value of any fractional
shares determined in accordance with Section 1.3(b) hereof.

         1.5.  Designation of Exchange Agent.

               (a) The parties of this Agreement hereby designate Zions First
National Bank, a national banking association with its head office located in
Salt Lake City, Utah ("Zions Bank") as Exchange Agent to effect the exchanges
contemplated hereby.

               (b) Zions Bancorp will, promptly after the Effective Date, issue
and deliver to Zions Bank the share certificates representing shares of Zions
Bancorp Stock and the cash to be paid to holders of Company Common Stock in
accordance with this Agreement.

               (c) Valley will, promptly after the Effective Date, issue and
deliver to Zions Bank the share certificates representing shares of Valley
Common Stock and the cash to be paid to holders of Bank Common Stock in
accordance with this Agreement.

         1.6. Notice of Exchange. Promptly after the Effective Date, Zions Bank
shall mail to each holder of one or more certificates formerly representing
Company Common Stock or Bank Common Stock, as the case may be, except to such
holders as shall have waived the notice required by this Section 1.6, a notice
specifying the Effective Date and notifying such holder to surrender his or her
certificate or certificates to Zions Bank for exchange. Such notice shall be
mailed to holders by regular mail at their addresses on the records of the
Company or the Bank, as the case may be.

                                      -4-

<PAGE>


         1.7. Treatment of Stock Options. Each stock option to purchase Company
Common Stock or Bank Common Stock not exercised prior to the Effective Date
shall automatically be canceled on and as of the Effective Date.

         1.8. Voting Agreements. Simultaneously herewith, each shareholder of
the Company who is listed on Schedule 1.8 annexed hereto shall enter into an
agreement with Zions Bancorp, substantially in form and substance as that set
forth as Exhibit III attached hereto, in which he or she agrees to vote all
shares of Company Common Stock which may be voted, or whose vote may be
directed, by him or her, in favor of the transactions contemplated by this
Agreement at the meeting of shareholders at which such transaction shall be
considered.

         1.9. Employee Benefits. If any employee of the Company or of the Bank
becomes a participant in any employment benefit plan, practice, or policy of
Zions Bancorp, such employee shall be given credit under such plan, practice, or
policy for all service prior to the Effective Date with the Company or the Bank
for purposes of eligibility and vesting, but not for benefit accrual purposes,
for which such service is taken into account or recognized, provided that there
be no duplication of such benefits as are provided under any employee benefit
plans, practices, or policies of the Company or the Bank that continue in effect
following the Effective Date.


2.       Effective Date.

         The Effective Date shall be the date which is the latest of:

         2.1. Shareholder Approval. The later of (a) the day upon which the
holders of the Class A Common Stock approve, ratify, and confirm the Holding
Company Merger or (b) the day upon which the holders of the Class B Common Stock
approve, ratify, and confirm the Holding Company Merger; or

         2.2. Valley Shareholder Approval. The day upon which the shareholders
of Valley approve, ratify, and confirm the Bank Merger; or

         2.3. Federal Reserve Approval. The first to occur of (a) the date
thirty days following the date of the order of the Board of Governors of the
Federal Reserve System or the Federal Reserve Bank of San Francisco acting
pursuant to authority delegated to it by the Board of Governors of the Federal
Reserve System (collectively, the "Board of Governors") approving the Holding
Company Merger, or (b) if, pursuant to section 321(a) of the Riegle Community
Development and Regulatory Improvement Act of 1994 (the "Riegle Act"), the Board
of Governors shall have prescribed a shorter period of time with the concurrence
of the Attorney General of the United States, the date on which such shorter
period of time shall elapse, or (c) the date ten days following the date on
which the Board of Governors indicates its waiver of jurisdiction over the
Holding Company Merger; or


                                      -5-

<PAGE>

         2.4. OCC Approval. The first to occur of (a) the date thirty days
following the date of the order of the Office of the Comptroller of the Currency
(the "OCC") approving the Bank Merger, or (b) if, pursuant to section 321(b) of
the Riegle Act, the OCC shall have prescribed a shorter period of time with the
concurrence of the Attorney General of the United States, the date on which such
shorter period of time shall elapse; or

         2.5. Utah Commissioner Approval. If such an order shall be required by
law, the date ten days following the date of the order of the Commissioner of
Financial Institutions of the State of Utah (the "Commissioner") approving the
transactions contemplated by this Agreement; or

         2.6. Colorado Division Approval. If such an order shall be required by
law, the date ten days following the date of the order of the Colorado Division
of Banking (the "Division") approving the transactions contemplated by this
Agreement; or

         2.7. Other Regulatory Approvals. The date upon which any other material
order, approval, or consent of a federal or state regulator of financial
institutions or financial institution holding companies authorizing consummation
of the transactions contemplated by this Agreement is obtained or any waiting
period mandated by such order, approval, or consent has run; or

         2.8. Expiration of Stays. Ten days after any stay of the approvals of
any of the Board of Governors, the OCC, the Commissioner, or the Division of the
transactions contemplated by this Agreement or any injunction against closing of
said transactions is lifted, discharged, or dismissed; or

         2.9. Mutual Agreement. Such other date as shall be mutually agreed to
by Zions Bancorp and the Company.


3.       Conditions Precedent to Performance of Obligations of the Parties.

         The obligations of Zions Bancorp, Val Cor, and the Company to
consummate the Holding Company Merger and the obligations of Valley Bank and the
Bank to consummate the Bank Merger shall be subject to the conditions that on or
before the Effective Date:


                                      -6-

<PAGE>



         3.1. Regulatory Approvals. Orders, consents, and approvals, in form and
substance reasonably satisfactory to Zions Bancorp and the Company, shall have
been entered by the requisite governmental authorities, granting the authority
necessary for consummation of the transactions contemplated by this Agreement
and the operation by Zions Bancorp and Val Cor of the business of the Company,
and the operation by Valley of the business of the Bank and each of the branches
of the Bank, pursuant to the provisions of applicable law; and all other
requirements prescribed by law or by the rules and regulations of any other
regulatory authority having jurisdiction over such transactions shall have been
satisfied.

         3.2.  Approval by Shareholders of the Company and the Bank.

               (a) The holders of the Class A Common Stock and the holders of
the Class B Common Stock, acting pursuant to a proxy statement in form and
substance satisfactory to Zions Bancorp and its counsel, shall each have
authorized, ratified, and confirmed the Holding Company Merger by not less than
the requisite percentage of the outstanding voting stock of each class of the
Company, in accordance with the applicable laws of the State of Colorado.

               (b) The shareholder of the Bank shall have authorized, ratified,
and confirmed the Bank Merger by not less than the requisite percentage of the
outstanding voting stock of each class of the Bank, in accordance with the
applicable laws of the State of Colorado.

         3.3. Absence of Litigation. No action, suit, or proceeding shall have
been instituted or shall have been threatened before any court or other
governmental body or by any public authority to restrain, enjoin, or prohibit
the Holding Company Merger or the Bank Merger, or which would reasonably be
expected to restrict materially the operation of the business of the Company or
that of the Bank or the exercise of any rights with respect thereto or to
subject either of the parties hereto or any of their subsidiaries, directors, or
officers to any liability, fine, forfeiture, divestiture, or penalty on the
ground that the transactions contemplated hereby, the parties hereto, or their
subsidiaries, directors, or officers have breached or will breach any applicable
law or regulation or have otherwise acted improperly in connection with the
transactions contemplated hereby and with respect to which the parties hereto
have been advised by counsel that, in the opinion of such counsel, such action,
suit, or proceeding raises substantial questions of law or fact which could
reasonably be decided materially adversely to either party hereto or its
subsidiaries, directors, or officers.

         3.4. Accounting Treatment. It shall have been determined to the
satisfaction of Zions Bancorp that the reorganization contemplated by this
Agreement will be treated for accounting purposes as a "pooling of interests" in
accordance with APB Opinion No. 16, and Zions Bancorp shall have received a
letter to the above effect from KPMG Peat Marwick, certified public accountants.


                                      -7-

<PAGE>


         3.5.  Registration Statement.

               (a) Effectiveness. The registration statement to be filed by
Zions Bancorp with the Securities and Exchange Commission (the "SEC") pursuant
to the Securities Act of 1933 (the "Securities Act") in connection with the
registration of the shares of Zions Bancorp Stock to be used as consideration in
connection with the Holding Company Merger (the "Registration Statement") shall
have become effective under that Act, and Zions Bancorp shall have received all
required state securities laws or "blue sky" permits and other required
authorizations or confirmations of the availability of exemptions from
registration requirements necessary to issue Zions Bancorp Stock in the Holding
Company Merger.

               (b) Absence of Stop-Order. Neither the Registration Statement nor
any such required permit, authorization, or confirmation shall be subject to a
stop-order or threatened stop-order by the SEC or any state securities
authority.

         3.6. Federal Income Taxation. Zions Bancorp and the Company shall have
received a written opinion of Baker & Hostetler LLP, or of Duane, Morris &
Heckscher LLP, or of another firm mutually agreeable to Zions Bancorp and the
Company, applying existing law, that the Holding Company Merger and Bank Merger
contemplated by this Agreement shall each qualify as one or more reorganizations
under section 368(a)(1) of the Code and the regulations and rulings promulgated
thereunder.

         3.7. Adverse Legislation. Subsequent to the date of this Agreement no
legislation shall have been enacted and no regulation or other governmental
requirement shall have been adopted or imposed that renders or will render
consummation of any of the material transactions contemplated by this Agreement
impossible.


4.       Conditions Precedent to Performance of the Obligations of Zions 
         Bancorp, Val Cor, and Valley.

         The obligations of Zions Bancorp, Val Cor, and Valley hereunder are
subject to the satisfaction, on or prior to the Effective Date, of all the
following conditions, compliance with which or the occurrence of which may be
waived in whole or in part by Zions Bancorp in writing unless not so permitted
by law:

            4.1. Representations and Warranties; Performance of Obligations. All
representations and warranties of the Company and the Bank contained in this
Agreement shall be true and correct in all material respects as of the Effective
Date with the same effect as if such representations and warranties had been
made or given at and as of such date, except that representations and warranties
of the Company or the Bank contained in this Agreement which


                                      -8-

<PAGE>


specifically relate to an earlier date shall be true and correct in all material
respects as of such earlier date. All covenants and obligations to be performed
or met by the Company or the Bank on or prior to the Effective Date shall have
been so performed or met. On the Effective Date, the president and chief
executive officer and the chief financial officer of each of the Company and the
Bank shall deliver to Zions Bancorp a certificate to that effect. The delivery
of such certificates shall in no way diminish the warranties, representations,
covenants, and obligations of the Company and the Bank made in this Agreement.

         4.2. Opinion of Company Special Counsel. Zions Bancorp shall have
received a favorable opinion from Baker & Hostetler LLP, dated the Effective
Date, substantially in form and substance as that set forth as Exhibit IV
attached hereto.

         4.3. Opinion of Company Counsel. Zions Bancorp shall have received a
favorable opinion from Overton & Feeley, P.C., dated the Effective Date,
substantially in form and substance as that set forth as Exhibit V attached
hereto.

         4.4. Opinion of Company Litigation Counsel. Zions Bancorp shall have
received a favorable opinion from legal counsel handling litigation matters for
the Company and the Bank, dated the Effective Date, substantially in form and
substance as that set forth as Exhibit VI attached hereto.

         4.5. Delivery of Branch Authorizations. The Company shall have
delivered to Zions Bancorp originals or certified copies of all of the
regulatory authorizations entitling the Bank to operate each of its branch
offices, together with a certification by the president and chief executive
officer and the chief financial officer of the Bank dated the Effective Date,
certifying that such branch certificates have not been revoked or threatened to
be revoked and that such certificates are in full force and effect.

         4.6.  No Adverse Developments.

                (a) During the period from June 30, 1997 to the Effective Date,
(i) there shall not have been any material adverse change in the financial
position or results of operations of the Company or the Bank taken as a whole,
nor shall the Company or the Bank have sustained any material loss or damage to
its properties, whether or not insured, which materially affects its ability to
conduct its business; and (ii) none of the events described in clauses (a)
through (f) of Section 6.16 of this Agreement shall have occurred, and each of
the practices and conditions described in clauses (x) through (z) of that
section shall have been maintained.

                (b) As of the Effective Date, the capital structure of the
Company and the capital structure of the Bank shall be as stated in section 6.9.


                                      -9-

<PAGE>


               (c) As of the Effective Date, other than liabilities incurred in
the ordinary course of business subsequent to December 31, 1996, there shall be
no liabilities of the Company or the Bank which are material to the Company on a
consolidated basis which were not reflected on the consolidated statement of
condition of the Company as of December 31, 1996 or in the related notes to the
consolidated statement of condition of the Company as of December 31, 1996.

               (d) No adverse action shall have been instituted or threatened by
any governmental authority, or referred by a governmental authority to another
governmental authority, for the enforcement or assessment of penalties for the
violation of any laws of regulations relating to equal credit opportunity, fair
housing, or fair lending.

               (e) Zions Bancorp shall have received a certificate dated the
Effective Date, signed by the president and the chief financial officer of the
Company and the president and the chief financial officer of the Bank,
certifying to the matters set forth in paragraphs (a), (b), (c), and (d) of this
section 4.6. The delivery of such officers' certificate shall in no way diminish
the warranties and representations of the Company or those of the Bank made in
this Agreement.

         4.7. Consolidated Net Worth. On and as of the Effective Date, the
consolidated net worth of the Company as determined in accordance with generally
accepted accounting principles shall not be less than the sum of (a) $8,002,474
and (b) the aggregate contributions to capital caused by the payments
accompanying the exercise of any stock options on or after June 30, 1997.

         4.8. Loan Loss Reserve. On and as of the Effective Date, the aggregate
reserve for loan losses of the Bank as determined in accordance with generally
accepted accounting principles shall not be less than $1,077,457.

         4.9. CRA Rating. The CRA rating of the Bank shall be no lower than
"satisfactory."

         4.10. Employment Agreements. Richard C. Tucker shall have entered into
an employment agreement with Valley substantially in form and substance as that
set forth as Exhibit VII attached hereto.


5.       Conditions Precedent to Performance of Obligations of the Company and 
         the Bank.

         The obligations of the Company and the Bank hereunder are subject to
the satisfaction, on or prior to the Effective Date, of all the following
conditions, compliance with which or the occurrence of which may be waived in
whole or in part by the Company in writing unless not so permitted by law:


                                      -10-

<PAGE>


         5.1. Approval by Shareholders of Valley. The shareholders of Valley
shall have authorized, ratified, and confirmed the Bank Merger by not less than
the requisite percentage of the outstanding voting stock of each class of
Valley, in accordance with the applicable laws of the United States.

         5.2. Representations and Warranties; Performance of Obligations. All
representations and warranties of Zions Bancorp, Val Cor, and Valley contained
in this Agreement shall be true and correct in all material respects as of the
Effective Date with the same effect as if such representations and warranties
had been made or given at and as of such date, except that representations and
warranties of Zions Bancorp, Val Cor, and Valley contained in this Agreement
which specifically relate to an earlier date shall be true and correct in all
material respects as of such earlier date. All covenants and obligations to be
performed or met by Zions Bancorp, Val Cor, or Valley on or prior to the
Effective Date shall have been so performed or met. On the Effective Date,
either the President or an Executive Vice President of Zions Bancorp and either
the Chairman of the Board or the President of each of Val Cor and Valley shall
deliver to the Company a certificate to that effect. The delivery of such
officer's certificate shall in no way diminish the warranties, representations,
covenants, and obligations of Zions Bancorp, Val Cor, and Valley made in this
Agreement.

         5.3. Opinion of Zions Bancorp Counsel. The Company shall have received
a favorable opinion of Duane, Morris & Heckscher LLP, dated the Effective Date,
substantially in form and substance as that set forth as Exhibit VIII attached
hereto.

         5.4 Fairness Opinion. The Company shall have received a favorable
opinion of The Wallach Company, Investment Bankers, dated as of the date of the
proxy statement referred to in section 3.2(a) of this Agreement, as to the
fairness, from a financial point of view, of the consideration to be paid by
Zions Bancorp in the Holding Company Merger pursuant to this Agreement.

         5.5. No Adverse Developments. During the period from June 30, 1997 to
the Effective Date, there shall not have been any material adverse change in the
financial position or results of operations of Zions Bancorp nor shall Zions
Bancorp have sustained any material loss or damage to its properties, whether or
not insured, which materially affects its ability to conduct its business; and
the Company shall have received a certificate dated the Effective Date signed by
either the President of Zions Bancorp or an Executive Vice President of Zions
Bancorp to the foregoing effect. The delivery of such officer's certificate
shall in no way diminish the warranties and representations of Zions Bancorp
made in this Agreement.

         5.6. Status of Zions Bancorp Stock. Zions Bancorp Stock shall be listed
on the National Association of Securities Dealers' Automated Quotation System
(or else shall become listed on a national securities exchange).


                                      -11-

<PAGE>


6.       Representations and Warranties of the Company and the Bank.

         The Company (with respect to the Company and the Bank) and the Bank
(solely with respect to itself) each represent and warrant to Zions Bancorp, Val
Cor, and Valley as follows:

         6.1. Organization, Powers, and Qualification. Each of the Company and
the Bank is a corporation which is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business
as now conducted. Each of the Company and the Bank owns or possesses in the
operation of its business all franchises, licenses, permits, branch
certificates, consents, approvals, waivers, and other authorizations,
governmental or otherwise, which are necessary for it to conduct its business as
now conducted, except for those where the failure of such ownership or
possession would not adversely affect the operation and properties of the
Company or the Bank in any material respect. Each of the Company and the Bank is
duly qualified and licensed to do business and is in good standing in every
jurisdiction with respect to which the failure to be so qualified or licensed
could result in material liability or adversely affect the operation and
properties of the Company or the Bank in any material respect.

         6.2. Execution and Performance of Agreement. Each of the Company and
the Bank has all requisite corporate power and authority to execute and deliver
this Agreement and to perform its respective terms.

         6.3. Absence of Violations. Except as set forth on Schedule 6.3 hereof:

               (a) neither the Company nor the Bank is in violation of its
respective charter documents or bylaws, nor of any applicable federal, state, or
local law or ordinance nor any order, rule, or regulation of any federal, state,
local, or other governmental agency or body, in any material respect, or in
default with respect to any order, writ, injunction, or decree of any court, or
in default under any order, license, regulation, or demand of any governmental
agency, any of which violations or defaults could reasonably be expected to have
a materially adverse effect on its business, properties, liabilities, financial
position, results of operations, or prospects; and neither the Company nor the
Bank has received any claim or notice of violation with respect thereto;

               (b) neither the Company nor the Bank nor any member of the
management of either of them is a party to any assistance agreement, supervisory
agreement, memorandum of understanding, consent order, cease and desist order or
condition of any regulatory order or decree with or by the Board of Governors,
the OCC, the Federal Deposit Insurance Corporation (the "FDIC"), any other
banking or securities authority of the United States or the State of


                                      -12-

<PAGE>


Colorado, or any other regulatory agency that relates to the conduct of the
business of the Company or the Bank or their assets; and except as previously
disclosed to Zions Bancorp in writing, no such agreement, memorandum, order,
condition, or decree is pending or threatened;

               (c) each of the Company and the Bank has established policies and
procedures to provide reasonable assurance of compliance in a safe and sound
manner with the federal banking, credit, housing, consumer protection, and civil
rights laws and with all other laws applicable to the operations of the Company
and the Bank and the regulations adopted under each of those laws, so that
transactions be executed and assets be maintained in accordance with such laws
and regulations; and the policies and practices of each of the Company and the
Bank with respect to all such laws and regulations reasonably limit
noncompliance and detect and report noncompliance to its management; and

               (d) the Bank has established a CRA policy which provides for (i)
goals and objectives consistent with CRA; (ii) a methodology for self-assessment
by the board of directors of the Bank; (iii) ongoing CRA training of all
personnel of the Bank, including the members of its board of directors; and (iv)
procedures whereby all significant CRA-related activity is documented; and the
Bank has officially designated a CRA officer who reports directly to the board
of directors and is responsible for the CRA program of the Bank.

         6.4. Compliance with Agreements. Neither the Company nor the Bank is in
violation of any material term of any material security agreement, mortgage,
indenture, or any other contract, agreement, instrument, lease, or certificate.
The capital ratios of each of the Company and the Bank comply fully with all
terms of all currently outstanding supervisory and regulatory requirements and
with the conditions of all regulatory orders and decrees.

         6.5. Binding Obligations; Due Authorization. Subject to the approval of
its shareholders, this Agreement constitutes valid, legal, and binding
obligations of each of the Company and the Bank, enforceable against it in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, moratorium or similar law, or by general principles of
equity. The execution, delivery, and performance of this Agreement and the
transactions contemplated thereby have been duly and validly authorized by the
board of directors of each of the Company and the Bank. Subject to approval by
its shareholders of this Agreement, no other corporate proceedings on the part
of either the Company or the Bank are necessary to authorize this Agreement or
the carrying out of the transactions contemplated hereby.

         6.6. Absence of Default. None of the execution or the delivery of this
Agreement, the consummation of the transactions contemplated thereby, or the
compliance with or fulfillment of the terms thereof will conflict with, or
result in a breach of any of the terms, conditions, or provisions of, or
constitute a default under the organizational documents or bylaws of the Company
or the Bank. Such execution, consummation, or fulfillment will not (a) conflict
with,


                                      -13-


<PAGE>


or result in a material breach of the terms, conditions, or provisions of, or
constitute a material violation, conflict, or default under, or, except as set
forth on Schedule 6.6 hereof, give rise to any right of termination,
cancellation, or acceleration with respect to, or result in the creation of any
lien, charge, or encumbrance upon, any property or assets of the Company or the
Bank pursuant to any material agreement or instrument under which the Company or
the Bank is obligated or by which any of its properties or assets may be bound,
including without limitation any material lease, contract, mortgage, promissory
note, deed of trust, loan, credit arrangement, or other commitment or
arrangement of the Company or the Bank in respect of which it is an obligor; (b)
if the Holding Company Merger is approved by the Board of Governors under the
Bank Holding Company Act of 1956, as amended (the "BHC Act"), or if the Board of
Governors waives its jurisdiction over the Holding Company Merger, and if the
Bank Merger is approved by the OCC, the Commissioner, and the Division, violate
any law, statute, rule, or regulation of any government or agency to which the
Company or the Bank is subject and which is material to its operations; or (c)
violate any judgment, order, writ, injunction, decree, or ruling to which the
Company or the Bank or any of its properties or assets is subject or bound. None
of the execution or delivery of this Agreement, the consummation of the
transactions contemplated thereby, or the compliance with or fulfillment of the
terms thereof will require any authorization, consent, approval, or exemption by
any person which has not been obtained, or any notice or filing which has not
been given or done, other than approval of or waiver of jurisdiction over the
transactions contemplated by this Agreement by the Board of Governors, the OCC,
the Commissioner, and the Division.

         6.7.  Compliance with BHC Act.

               (a) The Company is registered as a bank holding company under the
BHC Act. All of the activities and investments of the Company conform to the
requirements applicable generally to bank holding companies under the BHC Act
and the regulations of the Board of Governors adopted thereunder.

               (b) No corporation or other entity, other than the Company, is
registered or is required to be registered as a bank holding company under the
BHC Act by virtue of its control over the Bank or over any company that directly
or indirectly has control over the Bank.

         6.8.  Subsidiaries.

               (a) Other than the Bank, which is a direct, wholly-owned
subsidiary of the Company, the Company does not have any direct or indirect
subsidiaries and does not directly or indirectly own, control, or hold with the
power to vote any shares of the capital stock of any company (except shares held
by the Bank for the account of others in a fiduciary or custodial capacity in
the ordinary course of its business). There are no outstanding subscriptions,
options, warrants, convertible securities, calls, commitments, or agreements
calling for or requiring the issuance, transfer, sale, or other disposition of
any shares of the capital stock of the Bank, or calling for or requiring the


                                      -14-

<PAGE>


issuance of any securities or rights convertible into or exchangeable for shares
of capital stock of the Bank. There are no other direct or indirect subsidiaries
of the Company which are required to be consolidated or accounted for on the
equity method in the consolidated financial statements of the Company or the
financial statements of the Bank prepared in accordance with generally accepted
accounting principles.

               (b) Except as specified in the previous subsection, neither the
Company nor the Bank has a direct or indirect equity or ownership interest which
represents 5 percent or more of the aggregate equity or ownership interest of
any entity (including, without limitation, corporations, partnerships, and joint
ventures).

         6.9.  Capital Structure.

               (a) The authorized capital stock of the Company consists of (i)
100,000 shares of Class A Common Stock, of which, as of the date of this
Agreement, 100,000 shares have been duly issued and are validly outstanding,
fully paid, and held by four shareholders of record, and no additional shares
are issued and held in the treasury of the Company; and (ii) 900,000 shares of
Class B Common Stock, of which, as of the date of this Agreement, 648,631 shares
have been duly issued and are validly outstanding, fully paid, and held by
approximately 54 shareholders of record, and no additional shares are issued and
held in the treasury of the Company. The aforementioned shares of Class A Common
Stock are the only voting securities of the Company authorized, issued, or
outstanding as of such date; and except as set forth on Schedule 6.9 hereof, no
subscriptions, warrants, options, rights, convertible securities, or similar
arrangements or commitments in respect of securities of the Company are
authorized, issued, or outstanding which would enable the holder thereof to
purchase or otherwise acquire shares of any class of capital stock of the
Company. No shares of Company Common Stock are held by the Company as treasury
shares. None of the Company Common Stock is subject to any restrictions upon the
transfer thereof under the terms of the corporate charter or bylaws of the
Company.

               (b) Schedule 6.9 hereof lists all options to purchase Company
securities currently outstanding and, for each such option, the date of
issuance, date of exercisability, exercise price, type of security for which
exercisable, and date of expiration. Schedule 6.9 hereof further lists all
shares of Company Common Stock reserved for issuance pursuant to stock option
plans, agreements, or arrangements but not yet issued and all options upon
shares of Company Common Stock designated or made available for grant but not
yet granted.

               (c) The authorized capital stock of the Bank consists of [______]
shares of Bank Common Stock, of which, as of the date of this Agreement, [_____]
shares have been duly issued and are validly outstanding, fully paid, and all of
which are held of record and beneficially by the Company. The aforementioned
shares of Bank Common Stock are the only


                                      -15-


<PAGE>


voting securities of the Bank authorized, issued, or outstanding as of such
date; and no subscriptions, warrants, options, rights, convertible securities,
or similar arrangements or commitments in respect of securities of the Bank are
authorized, issued, or outstanding which would enable the holder thereof to
purchase or otherwise acquire shares of any class of capital stock of the Bank.
None of the Bank Common Stock is subject to any restrictions upon the transfer
thereof under the terms of the corporate charter or bylaws of the Bank.

               (d) None of the shares of Company Common Stock or Bank Common
Stock has been issued in violation of the preemptive rights of any shareholder.

               (e) As of the date hereof, to the best of the knowledge of the
Company and the Bank, and except for this Agreement, there are no shareholder
agreements, or other agreements, understandings, or commitments relating to the
right of any holder or beneficial owner of more than 1 percent of the issued and
outstanding shares of any class of the capital stock of either the Company or
the Bank to vote or to dispose of his or its shares of capital stock of that
entity.

               (f) The Company has not granted any shareholders' rights to
dissent from any merger.

               (g) The shareholders of the Company who are listed on Schedule
1.8 annexed hereto may, in the aggregate, vote or direct the vote of more than
50 percent of the Class A Common Stock and more than 50 percent of the Class B
Common Stock.

         6.10. Articles of Incorporation, Bylaws, and Minute Books. The copies
of the articles of incorporation and all amendments thereto and of the bylaws,
as amended, of the Company and the Bank that have been provided to Zions Bancorp
and certified by the Company as complete and true copies are true, correct, and
complete copies thereof. The minute books of the Company and the Bank which have
been made available to Zions Bancorp for its continuing inspection until the
Effective Date contain accurate minutes of all meetings and accurate consents in
lieu of meetings of the board of directors (and any committee thereof) and of
the shareholders of the Company and the Bank since their respective inceptions.
These minute books accurately reflect all transactions referred to in such
minutes and consents in lieu of meetings and disclose all material corporate
actions of the shareholders and boards of directors of the Company and the Bank
and all committees thereof. Except as reflected in such minute books, there are
no minutes of meetings or consents in lieu of meetings of the board of directors
(or any committee thereof) or of shareholders of the Company or the Bank.

         6.11. Books and Records. The books and records of each of the Company
and the Bank fairly reflect the transactions to which it is a party or by which
its properties are subject or bound. Such books and records have been properly
kept and maintained and are in compliance 


                                      -16-


<PAGE>


in all material respects with all applicable legal and accounting requirements.
Except as set forth on Schedule 6.11 hereof, each of the Company and the Bank
follows generally accepted accounting principles applied on a consistent basis
in the preparation and maintenance of its books of account and financial
statements, including but not limited to the application of the accrual method
of accounting for interest income on loans, leases, discounts, and investments,
interest expense on deposits and all other liabilities, and all other items of
income and expense. Except as set forth on Schedule 6.11 hereof, the Company and
the Bank have made all accruals in amounts which fairly report income and
expense in the proper periods in accordance with generally accepted accounting
principles. Each of the Company and the Bank has filed all material reports and
returns required by any law or regulation to be filed by it.

         6.12. Regulatory Approvals and Filings, Contracts, Commitments, etc.
The Company has made or will, no later than ten business days after the date
hereof, make available to Zions Bancorp or grant to Zions Bancorp continuing
access until the Effective Date to originals or copies of the following
documents relating to the Company and the Bank:

               (a) All regulatory approvals received since January 1, 1992, of
the Company and the Bank relating to all bank and nonbank acquisitions or the
establishment of de novo operations;

               (b) All employment contracts, election contracts, retention
contracts, deferred compensation, non-competition, bonus, stock option,
profit-sharing, pension, retirement, consultation after retirement, incentive,
insurance arrangements or plans (including medical, disability, group life or
other insurance plans), and any other remuneration or fringe benefit
arrangements applicable to employees, officers, or directors of the Company or
the Bank, accompanied by any agreements, including trust agreements, embodying
such contracts, plans, or arrangements, and all employee manuals and memoranda
relating to employment and benefit policies and practices of any nature
whatsoever (whether or not distributed to employees or any of them), and any
actuarial reports and audits relating to such plans;

               (c) All material contracts, agreements, leases, mortgages, and
commitments, except those entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound; or, if any of the same
be oral, true, accurate, and complete written summaries of all such oral
contracts, agreements, leases, mortgages, and commitments;

               (d) All material contracts, agreements, leases, mortgages, and
commitments, whether or not entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound and which require the
consent or approval of third parties to the execution and delivery of this
Agreement or to the consummation or performance of any of the transactions
contemplated thereby, or, if any of the same be oral, true, accurate, and
complete written summaries of all such oral contracts, agreements, leases,
mortgages, and commitments;


                                      -17-

<PAGE>


               (e) All deeds, leases, contracts, agreements, mortgages, and
commitments, whether or not entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound and which relate to
land, buildings, fixtures, or other real property upon or within which the
Company or the Bank operates its businesses or is authorized to operate its
businesses, or with respect to which the Company or the Bank has any application
pending for authorization to operate its businesses;

               (f) Any pending application, including any documents or materials
related thereto, which has been filed by the Company or the Bank with any
federal or state regulatory agency with respect to the establishment of a new
office or the acquisition or establishment of any additional banking or
nonbanking subsidiary; and

               (g) All federal, state, and local tax returns, including any
amended returns, filed by the Company or the Bank for the years 1991 through
1996, a copy of the most recent audit examination of each of the Company and the
Bank by the Internal Revenue Service ("IRS"), and a copy of all correspondence
or other documents with respect to any examination that has not yet been
resolved, a copy of the most recent state or local tax agency examination, if
any, of each of the Company and the Bank, and a copy of all correspondence or
other documents with respect to any examination that has not yet been resolved,
and all tax rulings, closing agreements, settlement agreements, or similar
documents with respect to the Company or the Bank received from or entered into
with the IRS or any other taxing authority since January 1, 1988 or that would
have continuing effect after the Effective Date.

         6.13. Financial Statements. The Company has furnished to Zions Bancorp
its consolidated statement of condition as of each of December 31, 1994,
December 31, 1995, and December 31, 1996, and its related consolidated statement
of income, consolidated statement of changes in financial position, and
consolidated statement of changes in stockholders' equity for each of the
periods then ended, and the notes thereto, and its consolidated statement of
condition as of June 30, 1997 and its related consolidated statement of income
for the period then ended (collectively, the "Company Financial Statements").
All of the Company Financial Statements, including the related notes, (a) were
prepared in accordance with generally accepted accounting principles applied in
all material respects, and (b) are in accordance with the books and records of
the Company and the Bank which have been maintained in accordance with generally
accepted accounting principles or the requirements of financial institution
regulatory authorities, as the case may be, and (c) fairly reflect the
consolidated financial position of the Company as of such dates, and the
consolidated results of operations of the Company for the periods ended on such
dates, and do not fail to disclose any material extraordinary or out-of-period
items, and (d) reflect, in accordance with generally accepted accounting
principles applied in all material respects, adequate provision for, or reserves
against, the possible loan losses of the Company as of such dates.


                                      -18-


<PAGE>



         6.14.  Call Reports; Bank Holding Company Reports.

               (a) The Bank has made available to Zions Bancorp its Consolidated
Reports of Condition and Consolidated Reports of Income for the calendar
quarters dated March 31, 1995 and thereafter. All of such Consolidated Reports
of Condition and Consolidated Reports of Income, including the related schedules
and memorandum items, were prepared in accordance with generally accepted
accounting principles applied in all material respects or, to the extent
different from generally accepted accounting principles, accounting principles
mandated by the applicable instructions to such Consolidated Reports of
Condition or Consolidated Reports of Income.

               (b) No adjustments are required to be made to the equity capital
account of the Bank as reported on any of the Consolidated Reports of Condition
referred to in Subsection 6.14(a) hereof, in any material amount, in order to
conform such equity capital account to equity capital as would be determined in
accordance with generally accepted accounting principles as of such date.

               (c) The Company has furnished to Zions Bancorp (i) its annual
report on Form FR Y-6 as filed with the Board of Governors as of December 31,
1996, and (ii) its semiannual report on Form FR Y-9SP as filed with the Board of
Governors as of June 30, 1997.

         6.15. Absence of Undisclosed Liabilities. At June 30, 1997, neither the
Company nor the Bank had any obligation or liability of any nature (whether
absolute, accrued, contingent, or otherwise, and whether due or to become due)
which was material, or which when combined with all similar obligations or
liabilities would have been material, to the Company, except (a) as disclosed in
the Company Financial Statements, or (b) as set forth on Schedule 6.15 hereof,
or (c) for unfunded loan commitments made by the Company or the Bank in the
ordinary course of their business consistent with past practice. The amounts set
up as current liabilities for taxes in the Company Financial Statements are
sufficient in all material respects for the payment of all taxes (including,
without limitation, federal, state, local, and foreign excise, franchise,
property, payroll, income, capital stock, and sales and use taxes and any
interest, penalties, or additions to tax with respect thereto ("Tax" or "Taxes")
accrued in accordance with generally accepted accounting principles and unpaid
at June 30, 1997. Since June 30, 1997, neither the Company nor the Bank has
incurred or paid any obligation or liability that would be material (on a
consolidated basis) to the Company, except (x) for obligations incurred or paid
in connection with transactions by it in the ordinary course of its business
consistent with past practices, or (y) as set forth on Schedule 6.15 hereof, or
(z) as expressly contemplated herein.

         6.16. Absence of Certain Developments. Since June 30, 1997, except as
set forth on Schedule 6.16 hereof, there has been (a) no material adverse change
in the condition, financial or otherwise, or to the assets, properties,
liabilities, or businesses of the Company and the Bank, (b)


                                      -19-


<PAGE>


no material deterioration in the quality of the consolidated loan portfolio of
the Company, and no material increase in the consolidated level of nonperforming
assets or non-accrual loans at the Company or in the level of its consolidated
provision for credit losses or its consolidated reserve for possible credit
losses; (c) no declaration, setting aside, or payment by the Company or the Bank
of any regular dividend, special dividend, or other distribution with respect to
any class of capital stock of the Company or the Bank, other than customary cash
dividends paid by the Company or the Bank whose amounts have not exceeded past
practice and the intervals between which dividends have not been more frequent
than past practice; (d) no repurchase by the Company of any of its capital
stock; (e) no material loss, destruction, or damage to any material property of
the Company or the Bank, which loss, destruction, or damage is not covered by
insurance; and (f) no material acquisition or disposition of any asset, nor any
material contract outside the ordinary course of business entered into by the
Company or the Bank nor any substantial amendment or termination of any material
contract outside the ordinary course of business to which the Company or the
Bank is a party, nor any other transaction by the Company or the Bank involving
an amount in excess of $25,000 other than for fair value in the ordinary course
of its business. Since June 30, 1997, except as set forth on Schedule 6.16
hereof, (x) each of the Company and the Bank has conducted its business only in
the ordinary course of such business and consistent with past practice; (y) the
Company, on a consolidated basis, has maintained the quality of its loan
portfolio and that of each of its major components at approximately the same
level as existed at June 30, 1997; and (z) the Company, on a consolidated basis,
has administered its investment portfolio pursuant to essentially the same
policies and procedures as existed during 1995 and 1996 and the first six months
of 1997, and has taken no action to lengthen the average maturity of the
investment portfolio, or of any significant category thereof, to any material
extent.

         6.17. Reserve for Possible Credit Losses. The Company's consolidated
reserve for possible credit losses is adequate to absorb reasonably anticipated
losses in the consolidated loan and lease portfolios of the Company, in view of
the size and character of such portfolios, current economic conditions, and
other pertinent factors. Management periodically reevaluates the adequacy of
such reserve based on portfolio performance, current economic conditions, and
other factors.

         6.18.  Tax Matters.

               (a) Except as set forth on Schedule 6.18 hereof, all Tax returns
and reports required to be filed by or on behalf of the Company or the Bank have
been timely filed with the appropriate governmental agencies in all
jurisdictions in which such returns and reports are required to be filed, or
requests for extensions have been timely filed, granted, and have not expired
for periods ending on or before December 31, 1996, and all returns filed are
complete and accurate and properly reflect its Taxes for the periods covered
thereby. All Taxes shown or required to be shown on filed returns have been
paid. As of the date hereof, there is no audit


                                      -20-

<PAGE>


examination, deficiency, or refund litigation or tax claim or any notice of
assessment or proposed assessment by the IRS or any other taxing authority, or
any other matter in controversy with respect to any Taxes that might result in a
determination adverse to the Company or the Bank, except as reserved against in
the Company Financial Statements. All Taxes due with respect to completed and
settled examinations or concluded litigation have been properly accrued or paid.

               (b) Neither the Company nor the Bank has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due that is currently in effect.

               (c) To the extent any Taxes are due from, but have not yet been
paid by, the Company or the Bank for the period or periods beginning January 1,
1997 or thereafter through and including the Effective Date, adequate provision
on an estimated basis has been or will be made for the payment of such taxes by
establishment of appropriate tax liability accounts on the last monthly
financial statements of the Company prepared before the Effective Date.

               (d) Except as set forth on Schedule 6.18 hereof, deferred Taxes
of the Company and the Bank have been provided for in accordance with generally
accepted accounting principles as in effect on the date of this Agreement.

               (e) The deductions of the Bank for bad debts taken and the
reserve of the Bank for loan losses for federal income tax purposes at December
31, 1996, were not greater than the maximum amount permitted under the
provisions of section 585 of the Code.

               (f) Other than liens arising under the laws of the State of
Colorado with respect to taxes assessed and not yet due and payable, there are
no tax liens on any of the properties or assets of the Company or the Bank.

               (g) The Company and the Bank (A) have timely filed all
information returns or reports required to be filed with respect to Taxes,
including but not limited to those required by sections 6041, 6041A, 6042, 6045,
6049, 6050H, and 6050J of the Code, (B) have properly and timely provided to all
persons, other than taxing authorities, all information reports or other
documents (for example, Form 1099s, Form W-2s, and so forth) required to be
provided to such persons under applicable law, and (C) have exercised due
diligence in obtaining certified taxpayer identification numbers as required
under applicable law.

               (h) The taxable year end of the Company for federal income tax
purposes is, and since the inception of the Company has continuously been,
December 31.


                                      -21-


<PAGE>


               (i) The Company and the Bank have in all material respects
satisfied all federal, state, local, and foreign withholding tax requirements
including but not limited to income, social security, and employment tax
withholding.

               (j) Neither the Company nor the Bank (A) is, or has been, a
member of a group filing a consolidated, combined, or unitary tax return, other
than a group the common parent of which is or was the Company, or (B) has any
liability for the Taxes of any person (other than the Company and the Bank)
under Treas. Reg. Sec. 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise.

         6.19. Consolidated Net Worth. The consolidated net worth of the Company
on the date of this Agreement, as determined in accordance with generally
accepted accounting principles, is not less than $8,002,474.

         6.20. Examinations. To the extent consistent with law, the Company has
heretofore disclosed to Zions Bancorp relevant information contained in the most
recent safety-and-soundness, compliance, Community Reinvestment Act, and other
Reports of Examination with respect to the Company issued by the Board of
Governors and the most recent safety-and-soundness, compliance, Community
Reinvestment Act, and other Reports of Examination with respect to the Bank
issued by the Board of Governors. Such information so disclosed consists of all
material information with respect to the financial, operational, and legal
condition of the entity under examination which is included in such reports, and
does not omit or will not omit any information necessary to make the information
disclosed not misleading.

         6.21. Reports. Since January 1, 1994, each of the Company and the Bank
has effected all registrations and filed all reports and statements, together
with any amendments required to be made with respect thereto, which it was
required to effect or file with (a) the Board of Governors, (b) the FDIC, (c)
the United States Department of the Treasury, (d) the Division, and (e) any
other governmental or regulatory authority or agency having jurisdiction over
its operations. Each of such registrations, reports, and documents, including
the financial statements, exhibits, and schedules thereto, does not contain any
statement which, at the time and in the light of the circumstances under which
it was made, is false or misleading with respect to any material fact or which
omits to state any material fact necessary in order to make the statements
contained therein not false or misleading.

         6.22. FIRA Compliance and Other Transactions with Affiliates. Except as
set forth on Schedule 6.22 hereof, (a) none of the officers, directors, or
beneficial holders of 5 percent or more of the common stock of the Company or
the Bank and no person "controlled" (as that term is defined in the Financial
Institutions Regulatory and Interest Rate Control Act of 1978) by the Company or
the Bank (collectively, "Insiders") has any ongoing material transaction with
the Company or the Bank on the date of this Agreement; (b) no Insider has any
ownership interest in

                                      -22-

<PAGE>


any business, corporate or otherwise, which is a party to, or in any property
which is the subject of, business arrangements or relationships of any kind with
the Company or the Bank not in the ordinary course of business; and (c) all
other extensions of credit by the Company or the Bank to any Insider have
heretofore been disclosed in writing by the Company to Zions Bancorp.

         6.23. SEC Registered Securities. No equity or debt securities of the
Company or the Bank are registered or required to be registered under the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act")).

         6.24. Legal Proceedings. Except as disclosed in the Company Financial
Statements or as set forth on Schedule 6.24 hereof, there is no claim, action,
suit, arbitration, investigation, or other proceeding pending before any court,
governmental agency, authority or commission, arbitrator, or "impartial
mediator" (of which the Company or the Bank has been served with process or
otherwise been given notice) or, to the best of the knowledge of the Company and
the Bank, threatened or contemplated against or affecting it or its property,
assets, interests, or rights, or any basis therefor of which notice has been
given, which, if adversely determined, would have a material adverse effect
(financial or otherwise) on the business, operating results, or financial
condition of the Company or which otherwise could prevent, hinder, or delay
consummation of the transactions contemplated by this Agreement.

         6.25. Absence of Governmental Proceedings. Except as set forth on
Schedule 6.25 hereof, neither the Company nor the Bank is a party defendant or
respondent to any pending legal, equitable, or other proceeding commenced by any
governmental agency and, to the best of the knowledge of the Company and the
Bank, no such proceeding is threatened.

         6.26. Federal Deposit Insurance.

               (a) The deposits held by the Bank are insured within statutory
limits by the Bank Insurance Fund of the FDIC pursuant to the provisions of the
Federal Deposit Insurance Act, as amended (12 U.S.C. ss. 1811 et seq.), and the
Bank has paid all assessments and filed all related reports and statements
required under the Federal Deposit Insurance Act.

               (b) The Bank is a member of and pay insurance assessments to the
Bank Insurance Fund of the FDIC ("BIF"), and its deposits are insured by the
BIF. None of the deposits of the Bank are insured by the Savings Association
Insurance Fund of the FDIC ("SAIF"), and the Bank pays no insurance assessments
to the SAIF.

         6.27. Other Insurance. Each of the Company and the Bank carries
insurance with reputable insurers, including blanket bond coverage, in such
amounts as are reasonable to cover such risks as are customary in relation to
the character and location of its properties and the nature of its businesses.
All such policies of insurance are in full force and effect, and no notice of
cancellation has been received. All premiums to date have been paid in full.
Neither the Company nor the Bank is in default with respect to any such policy
which is material to it.


                                      -23-

<PAGE>


         6.28. Labor Matters. Neither the Company nor the Bank is a party to or
bound by any collective bargaining contracts with respect to any employees of
the Company or the Bank. Since their respective inceptions there has not been,
nor to the best of the knowledge of the Company and the Bank was there or is
there threatened, any strike, slowdown, picketing, or work stoppage by any union
or other group of employees against the Company or the Bank or any of its
premises, or any other labor trouble or other occurrence, event, or condition of
a similar character. As of the date hereof, neither the Company nor the Bank is
aware of any attempts to organize a collective bargaining unit to represent any
of its employee groups.

         6.29. Employee Benefit Plans.

               (a) Schedule 6.29 hereto contains a list or brief descriptions of
all pension, retirement, stock purchase, stock bonus, stock ownership, stock
option, performance share, stock appreciation right, phantom stock, savings, or
profit-sharing plans, any employment, deferred compensation, consultant, bonus,
or collective bargaining agreement, or group insurance contract or any other
incentive, welfare, life insurance, death or survivor's benefit, health
insurance, sickness, disability, medical, surgical, hospital, severance, layoff
or vacation plans, contracts, and arrangements or employee benefit plans or
agreements sponsored, maintained, or contributed to by the Company or the Bank
for the employees or former employees of the Company or the Bank. The Company
has previously made available and will continue to make available to Zions
Bancorp for its continuing review until the Effective Date true, complete, and
accurate copies of all plans and arrangements listed on Schedule 6.29, together
with (i) the most recent actuarial and financial report prepared with respect to
any such plans which constitute "qualified plans" under section 401(a) of the
Code, and (ii) the most recent annual reports, if any, filed with any government
agency and all IRS rulings and determination letters and any open requests for
such rulings and letters that pertain to any such plan.

               (b) Except for liabilities to the Pension Benefit Guaranty
Corporation ("PBGC") pursuant to section 4007 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), all of which have been fully paid,
and except for liabilities to the IRS under section 4971 of the Code, all of
which have been fully paid, neither the Company nor the Bank has any liability
with respect to any pension plan qualified under section 401 of the Code.
Neither the Company nor the Bank sponsors or maintains any defined benefit plan
and has never sponsored or maintained any defined benefit plan.

               (c) All "employee benefit plans," as defined in section 3(3) of
ERISA, that cover one or more employees employed by the Company or the Bank
(each individually a "Plan" and collectively the "Plans"), comply in all
material respects with ERISA and, where applicable


                                      -24-


<PAGE>


for tax-qualified or tax-favored treatment, with the Code. As of June 30, 1997,
neither the Company nor the Bank had any material liability under any Plan which
is not reflected on the Company Financial Statements as of such date (other than
such normally unrecorded liabilities under the Plans for sick leave, holiday,
education, bonus, vacation, incentive compensation, and anniversary awards,
provided that such liabilities are not in any event material). None of the
Plans, the Company, the Bank, nor any trustee or administrator of the Plans has
ever engaged in a "prohibited transaction" with respect to the Plans within the
meaning of section 406 of ERISA or, where applicable, section 4975 of the Code
for which no exemption is applicable, nor have there been any "reportable
events" within section 4043 of ERISA for which the thirty-day notice therefor
has not been waived. Neither the Company nor the Bank has incurred any liability
under section 4201 of ERISA for a complete or partial withdrawal from a
multi-employer plan.

               (d) No action, claim, or demand of any kind has been brought or
threatened by any potential claimant or representative of such a claimant under
any plan, contract, or arrangement referred to in Subsection (a) of this
section, where the Company or the Bank may be either (i) liable directly on such
action, claim, or demand; or (ii) obligated to indemnify any person, group of
persons, or entity with respect to such action, claim, or demand which is not
fully covered by insurance maintained with reputable, responsible financial
insurers or by a self-insured plan.

         6.30. Employee Relations. As of the date hereof, each of the Company
and the Bank is, to the best of its knowledge, in compliance in all material
respects with all federal and state laws, regulations, and orders respecting
employment and employment practices (including Title VII of the Civil Rights Act
of 1964), terms and conditions of employment, and wages and hours; and neither
the Company nor the Bank is engaged in any unfair labor practice. As of the date
hereof, except as set forth on Schedule 6.30 hereof, no dispute exists between
the Company or the Bank and any of its employee groups regarding any employee
organization, wages, hours, or conditions of employment which would materially
interfere with the business or operations of the Company or the Bank.

         6.31. Fiduciary Activities. The Bank is duly qualified and registered
and in good standing in accordance with the laws of each jurisdiction in which
it is required to so qualify or register as a result of or in connection with
its fiduciary or custodial activities as conducted as of the date hereof. The
Bank is duly registered under and in compliance with all requirements of the
federal Investment Advisers Act of 1940 as amended, or is exempt from
registration thereunder and from compliance with the requirements thereof. Since
January 1, 1994, the Bank has conducted, and currently is conducting, all
fiduciary and custodial activities in all material respects in accordance with
all applicable law.


                                      -25-

<PAGE>


         6.32.  Environmental Liability.

               (a) Except as set forth on Schedule 6.32 hereof, neither the
Company nor the Bank is in material violation of any judgment, decree, order,
law, license, rule or regulation pertaining to environmental matters, including
those arising under the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, the
Federal Water Pollution Control Act, the Federal Clean Air Act, the Toxic
Substances Control Act or any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the environment ("Environmental
Laws").

               (b) Except as set forth on Schedule 6.32 hereof, neither the
Company, the Bank, nor, to the best of the knowledge of either of them, any
borrower of the Company or of the Bank has received notice that it has been
identified by the United States Environmental Protection Agency as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B, nor has the Company or the Bank
or, to the best of the knowledge of either of them, any borrower of the Company
or of the Bank received any notification that any hazardous waste, as defined by
42 U.S.C. ss. 6903(5), any hazardous substances, as defined by 42 U.S.C. ss.
9601(14), any "pollutant or contaminant," as defined by 42 U.S.C. ss. 9601(33),
or any toxic substance, hazardous materials, oil, or other chemicals or
substances regulated by any Environmental Laws ("Hazardous Substances") that it
has disposed of has been found at any site at which a federal or state agency is
conducting a remedial investigation or other action pursuant to any
Environmental Law.

               (c) No portion of any real property at any time owned or leased
by the Company or the Bank (collectively, the "Company Real Estate") has been
used by the Company or the Bank for the handling, processing, storage or
disposal of Hazardous Substances in a manner which violates any Environmental
Laws and, to the best of the knowledge of the Company and the Bank, no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any of the Company Real Estate. In the course of its
activities, neither the Company nor the Bank has generated or is generating any
hazardous waste on any of the Company Real Estate in a manner which violates any
Environmental Laws. There has been no past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping (collectively, a "Release") of Hazardous
Substances by the Company or the Bank on, upon, or into any of the Company Real
Estate. In addition, to the best of the knowledge of the Company and the Bank,
except as set forth on Schedule 6.32 hereof, there have been no such Releases
on, upon, or into any real property in the vicinity of any of the Company Real
Estate that, through soil or groundwater contamination, may be located on any of
such Company Real Estate.


                                      -26-

<PAGE>


               (d) With respect to any real property at any time held as
collateral for any outstanding loan by the Company or the Bank (collectively,
the "Collateral Real Estate"), except as set forth on Schedule 6.32 hereof,
neither the Company nor the Bank has since January 1, 1988 received notice from
any borrower thereof or third party, and has no knowledge, that such borrower
has generated or is generating any hazardous waste on any of the Collateral Real
Estate in a manner which violates any Environmental Laws or that there has been
any Release of Hazardous Substances by such borrower on, upon, or into any of
the Collateral Real Estate, or that there has been any Release on, upon, or into
any real property in the vicinity of any of the Collateral Real Estate that,
through soil or groundwater contamination, may be located on any of such
Collateral Real Estate.

               (e) As used in this Section 6.32, each of the terms "Company" and
"Bank" includes the applicable entity and any partnership or joint venture in
which it has an interest.

         6.33. Intangible Property. To the best of the knowledge of the Company
and the Bank, each of the Company and the Bank owns or possesses the right, free
of the claims of any third party, to use all material trademarks, service marks,
trade names, copyrights, patents, and licenses currently used by it in the
conduct of its business. To the best of the knowledge of the Company and the
Bank, no material product or service offered and no material trademark, service
mark, or similar right used by the Company or the Bank infringes any rights of
any other person, and, as of the date hereof, neither the Company nor the Bank
has received any written or oral notice of any claim of such infringement.

         6.34. Real and Personal Property. Except for property and assets
disposed of in the ordinary course of business, each of the Company and the Bank
possesses good and marketable title to and owns, free and clear of any mortgage,
pledge, lien, charge, or other encumbrance or other third party interest of any
nature whatsoever which would materially interfere with the business or
operations of either the Company or the Bank, its real and personal property and
other assets, including without limitation those properties and assets reflected
in the Company Financial Statements as of June 30, 1997, or acquired by the
Company or the Bank subsequent to the date thereof. The leases pursuant to which
the Company and the Bank lease real or personal property are valid and effective
in accordance with their respective terms; and there is not, under any such
lease, any material existing default or any event which, with the giving of
notice or lapse of time or otherwise, would constitute a material default. The
real and personal property leased by either the Company or the Bank is free from
any adverse claim which would materially interfere with its business or
operation taken as a whole. The material properties and equipment owned or
leased by the Company and the Bank are in normal operating condition, free from
any known defects, except such minor defects as do not materially interfere with
the continued use thereof in the conduct of its normal operations.


                                      -27-

<PAGE>



         6.35.  Loans, Leases, and Discounts.

               (a) To the best of the knowledge of the Company and the Bank,
each loan, lease, and discount reflected as an asset of the Company in the
Company Financial Statements as of June 30, 1997, or acquired since that date,
is the legal, valid, and binding obligation of the obligor named therein,
enforceable in accordance with its terms; and no loan, lease, or discount having
an unpaid balance (principal and accrued interest) in excess of $25,000 is
subject to any asserted defense, offset, or counterclaim known to the Company or
the Bank.

               (b) Except as set forth on Schedule 6.35 hereof, neither the
Company nor the Bank holds any loans or loan-participation interests purchased
from, or participates in any loans originated by, any person other than the
Company or the Bank.

         6.36. Material Contracts. Neither the Company nor the Bank nor any of
the assets, businesses, or operations of either of them is as of the date hereof
a party to, or is bound or affected by, or receives benefits under any material
agreement, arrangement, or commitment not cancelable by it without penalty,
other than (a) the agreements set forth on Schedule 6.36 hereof, and (b)
agreements, arrangements, or commitments entered into in the ordinary course of
its business consistent with past practice, or, if there has been no past
practice, consistent with prudent banking practices.

         6.37. Employment and Severance Arrangements. Schedule 6.37 hereof sets
forth

               (a) all employment contracts granted by the Company or the Bank
to any of its officers, directors, shareholders, consultants, or other
management officials and any officer, director, shareholder, consultant, or
management official of any affiliate providing for increased or accelerated
compensation in the event of a change of control with respect to the Company or
the Bank or any other event affecting the ownership, control, or management of
the Company or the Bank; and

               (b) all employment and severance contracts, agreements, and
arrangements between the Company or the Bank and any officer, director,
consultant, or other management official of any of them.

         6.38. Material Contract Defaults. All contracts, agreements, leases,
mortgages, or commitments referred to in Section 6.12(c) hereof are valid and in
full force and effect on the date hereof. As of the date of this Agreement and
as of the Effective Date, neither the Company nor the Bank is or will be in
default in any material respect under any material contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument to which
it is a party or by which its assets, business, or operations may be bound or
affected or under which it or its assets, business, or operations receive
benefits; and there has not occurred any event that with the lapse of time or
the giving of notice or both would constitute such a default.


                                      -28-


<PAGE>

         6.39. Capital Expenditures. Except as set forth on Schedule 6.39
hereof, neither the Company nor the Bank has any outstanding commitments in the
nature of capital expenditures which in the aggregate exceed $25,000.

         6.40. Repurchase Agreements. With respect to all agreements pursuant to
which the Company or the Bank has purchased securities subject to an agreement
to resell, it has a valid, perfected first lien or security interest in the
securities securing the agreement, and the value of the collateral securing each
such agreement equals or exceeds the amount of the debt secured by such
collateral under such agreement.

         6.41. Internal Controls. Each of the Company and the Bank maintains
internal controls to provide reasonable assurance to its board of directors and
officers that its assets are safeguarded, its records and reports are prepared
in compliance with all applicable legal and accounting requirements and with its
internal policies and practices, and applicable federal, state, and local laws
and regulations are complied with. These controls extend to the preparation of
its financial statements to provide reasonable assurance that the statements are
presented fairly in conformity with generally accepted accounting principles or,
in the case of the Bank and to the extent different from generally accepted
accounting principles, accounting principles mandated by the Board of Governors.
The controls contain self-monitoring mechanisms, and appropriate actions are
taken on significant deficiencies as they are identified.

         6.42. Dividends. Neither the Company nor the Bank has paid any dividend
to its shareholders which caused its regulatory capital to be less than the
amount then required by applicable law, or which exceeded any other limitation
on the payment of dividends imposed by law, agreement, or regulatory policy.

         6.43. Brokers and Advisers. Except as set forth on Schedule 6.43
hereof, (a) there are no claims for brokerage commissions, finder's fees, or
similar compensation arising out of or due to any act of the Company or the Bank
in connection with the transactions contemplated by this Agreement or based upon
any agreement or arrangement made by or on behalf of the Company or the Bank,
and (b) neither the Company nor the Bank has entered into any agreement or
understanding with any party relating to financial advisory services provided or
to be provided with respect to the transactions contemplated by this Agreement.


                                      -29-

<PAGE>


         6.44.  Interest Rate Risk Management Instruments.

               (a) Schedule 6.44 contains a true, correct, and complete list of
all interest-rate swaps, caps, floors, and options agreements and other
interest-rate risk management arrangements to which the Company or the Bank is a
party or by which any of its properties or assets may be bound.

               (b) All interest rate swaps, caps, floors, and option agreements
and other interest rate risk management arrangements to which the Company or the
Bank is a party or by which any of its properties or assets may be bound were
entered into in the ordinary course of its business and, to the best of its
knowledge, in accordance with prudent banking practice and applicable rules,
regulations, and regulatory policies and with counterparties believed to be
financially responsible at the time and are legal, valid, and binding
obligations enforceable in accordance with their terms (except as may be limited
by bankruptcy, insolvency, moratorium, reorganization, or similar laws affecting
the rights of creditors generally and the availability of equitable remedies),
and are in full force and effect. The Company and the Bank have duly performed
in all material respects of all of their respective obligations thereunder to
the extent that such obligations to perform have accrued; and to the best of the
knowledge of the Company and the Bank, there are no breaches, violations or
defaults or allegations or assertions of such by any party thereunder.

         6.45. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by the Company or the Bank
hereunder or in connection with this Agreement or any of the transactions
contemplated thereunder contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein, in light of the circumstances under which they were made, not
misleading. There is no fact known to the Company which reasonably might
materially adversely affect the business, assets, liabilities, financial
condition, results of operations, or prospects of the Company or the Bank which
has not been disclosed in the Company Financial Statements or a certificate
delivered to Zions Bancorp by the Company. Copies of all documents referred to
in this Agreement, unless prepared solely by Zions Bancorp, Val Cor, or Valley
or solely by Zions Bancorp, Val Cor, or Valley and third parties hereto, are
true, correct, and complete copies thereof and include all amendments,
supplements, and modifications thereto and all waivers thereunder.

         6.46. Regulatory and Other Approvals. As of the date hereof, except as
set forth on Schedule 6.46 hereof, neither the Company nor the Bank is aware of
any reason why all material consents and approvals shall not be procured from
all regulatory agencies having jurisdiction over the transactions contemplated
by this Agreement, as shall be necessary for (a) consummation of the
transactions contemplated by this Agreement, and (b) the continuation after the
Effective Date of the business of the Company and the Bank as such business is
carried on immediately prior to the Effective Date, free of any conditions or
requirements which, in the reasonable opinion of the Company, could have a
material adverse effect upon the business, operations, activities, earnings, or
prospects of the Company. As of the date hereof, neither the Company nor the
Bank is aware of any reason why all material consents and approvals shall not be
procured from all other persons and entities whose consent or approval shall be
necessary for


                                      -30-

<PAGE>


(y) consummation of the transactions contemplated by this Agreement, or (z) the
continuation after the Effective Date of the business of the Company and the
Bank as such business is carried on immediately prior to the Effective Date.


7.       Covenants of the Company and the Bank.

         The Company (on behalf of itself and the Bank) and the Bank (on behalf
of itself) each hereby covenant and agree as follows:

         7.1. Rights of Access. In addition and not in limitation of any other
rights of access provided to Zions Bancorp, Val Cor, and Valley herein, until
the Effective Date the Company and the Bank will give to Zions Bancorp, Val Cor,
and Valley and to their representatives, including their certified public
accountants, KPMG Peat Marwick, full access during normal business hours to all
of the property, documents, contracts, books, and records of the Company and the
Bank, and such information with respect to their business affairs and properties
as Zions Bancorp, Val Cor, or Valley from time to time may reasonably request.

         7.2.  Corporate Records, Contracts, etc.

               (a) The Company and the Bank will make available to Zions
Bancorp, Val Cor, and Valley copies of their respective articles of
incorporation and bylaws, and will make available their respective minute books,
all of which shall be certified to be complete and true copies.

               (b) The Company and the Bank will make available copies of all
contracts or agreements involving amounts in excess of $25,000 to which the
Company or the Bank is a party, including but not limited to data processing
contracts, service contracts, contracts to purchase or lease real property or
equipment, guaranties, employment contracts, and insurance contracts pertaining
to fire, accident, indemnity, fidelity, health, life, hospitalization, or other
employee benefits.

               (c) The Company and the Bank will furnish to Zions Bancorp, Val
Cor, and Valley the following information with respect to properties owned by
the Company and the Bank: (i) a brief description and location of each parcel of
real property owned by the Company or the Bank, (ii) a brief description of real
property covered by lease or other rental arrangements to which the Company or
the Bank is a party, including a copy of the relevant leases; and (iii) a brief
description of personal property with a value in excess of $25,000 covered by
lease or other rental arrangements to which the Company or the Bank is a party,
including a copy of the relevant leases.


                                      -31-


<PAGE>


         7.3.  Monthly and Quarterly Financial Statements; Minutes of Meetings
 and Other Materials.

               (a) The Company and the Bank will continue to prepare all of the
monthly and quarterly financial statements and financial reports to regulatory
authorities for the months and quarterly periods ending between July 1, 1997 and
the Effective Date which it customarily prepared during the period between
January 1, 1995 and June 30, 1997 and shall promptly provide Zions Bancorp with
copies of all such financial statements and reports. Such financial statements
and reports shall be verified by the chief financial officer of the reporting
entity. All of such financial statements and reports, including the related
notes, schedules, and memorandum items, will have been prepared in accordance
with generally accepted accounting principles applied in all material respects
(except that Consolidated Reports of Condition and Consolidated Reports of
Income required to be filed by the Bank under federal law may be prepared in
accordance with the official instructions applicable thereto at the time of
filing).

               (b) The Company and the Bank shall promptly provide Zions Bancorp
with (i) copies of all of its periodic reports to directors and to shareholders,
whether or not such reports were prepared or distributed in connection with a
meeting of the board of directors or a meeting of the shareholders, prepared or
distributed between the date of this Agreement and the Effective Date, and (ii)
complete copies of all minutes of meetings of its board of directors and
shareholders which meetings take place between the date of this Agreement and
the Effective Date, certified by the secretary or cashier or an assistant
secretary or assistant cashier of the Company or the Bank, as the case may be.

         7.4. Extraordinary Transactions. Without the prior written consent of
Zions Bancorp, neither the Company nor the Bank will, on or after the date of
this Agreement: (a) declare or pay any cash dividends or property dividends with
respect to any class of its capital stock, with the exception of customary
periodic cash dividends paid by the Company or the Bank to holders of its common
stock at such intervals and in such amounts as are in every case consistent with
the amounts and intervals characteristic of that payer; (b) declare or
distribute any stock dividend, authorize a stock split, or authorize, issue or
make any distribution of its capital stock or any other equity or debt
securities or debentures (except for issuances of Company Common Stock upon
exercise of stock options outstanding on the date of this Agreement), or grant
any options to acquire such additional securities; (c) merge into, consolidate
with, or sell its assets to any other corporation or person, or enter into any
other transaction or agree to effect any other transaction not in the ordinary
course of its business except as explicitly contemplated herein, or engage in
any discussions concerning such a possible transaction except as explicitly
contemplated herein; (d) convert the charter or form of entity of the Bank from
that in existence on the date of this Agreement to any other charter or form of
entity; (e) make any direct or indirect redemption, purchase, or other
acquisition of any of its capital stock; (f) except in the ordinary course of
its business or to accomplish the transactions contemplated by this Agreement


                                      -32-


<PAGE>


or, if not in the ordinary course of business or to accomplish the transactions
contemplated by this Agreement, in an amount not exceeding $10,000 in the
aggregate, incur any liability or obligation, make any commitment or
disbursement, any transaction; (g) other than in the ordinary course of
business, subject any of its properties or assets to any lien, claim, charge,
option, or encumbrance; (h) except for increases in the ordinary course of
business in accordance with past practices, which together with all other
compensation rate increases do not exceed 5 percent per annum of the aggregate
payroll as of July 1, 1997, increase the rate of compensation of any employee or
enter into any agreement to increase the rate of compensation of any employee;
(i) create or modify any pension or profit sharing plan, bonus, deferred
compensation, death benefit, or retirement plan, or the level of benefits under
any such plan, nor increase or decrease any severance or termination pay benefit
or any other fringe benefit; (j) enter into any employment or personal services
contract with any person or firm, including without limitation any contract,
agreement, or arrangement described in Section 6.37(a) hereof, except directly
to facilitate the transactions contemplated by this Agreement or to hire one or
more tellers, customer service representatives, or similar branch personnel each
of whose annual or annualized salaries in no case shall be above $25,000 and
each of whose hiring is, in the reasonable judgment of the Bank, necessary or
advisable to provide for normal bank operations; nor (k) except with respect to
transactions initiated prior to the date of this Agreement and set forth on
Schedule 6.35 hereof, purchase any loans or loan-participation interests from,
or participate in any loans originated by, any person other than the Company or
the Bank.

         7.5. Preservation of Business. Each of the Company and the Bank will
(a) carry on its business and manage its assets and properties diligently and
substantially in the same manner as heretofore; (b) maintain the ratio of its
loans to its deposits at approximately the same level as existed at June 30,
1997, as adjusted to allow for seasonal fluctuations of loans and deposits of a
kind and amount experienced traditionally by it; (c) manage its investment
portfolio in substantially the same manner and pursuant to substantially the
same investment policies as in 1995 and 1996, and will take no action to change
the percentage which its investment portfolio bears to its total assets, or to
lengthen the average maturity of its investment portfolio, or of any significant
category thereof, to any material extent; (d) continue in effect its present
insurance coverage on all properties, assets, business, and personnel; (e) use
its best efforts to preserve its business organization intact; except as
otherwise consented to by Zions Bancorp, to keep available its present
employees; and to preserve its present relationships with customers and others
having business dealings with it; (f) not do anything and not fail to do
anything which will cause a breach of or default in any contract, agreement,
commitment, or obligation to which it is a party or by which it may be bound;
(g) not amend its articles of incorporation or bylaws; and (h) not grant or
expand any shareholders' rights to dissent from any merger.


                                      -33-


<PAGE>


         7.6 Comfort Letter. At the time of the effectiveness of the
Registration Statement, but prior to the mailing of the proxy materials, and at
the Effective Date, the Company shall furnish Zions Bancorp with a letter from
Baird, Kurtz & Dobson, Certified Public Accountants, in form and substance
acceptable to Zions Bancorp, stating that (a) they are independent accountants
with respect to the Company within the meaning of the 1933 Act and the published
rules and regulations thereunder, (b) in their opinion the consolidated
financial statements of the Company included in the Registration Statement and
examined by them comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the published rules and regulations
thereunder, and (c) a reading of the Company's audited consolidated financial
statements and the latest available unaudited consolidated financial statements
of the Company and unaudited financial statements of the Bank and inquiries of
certain officials of the Company and the Bank responsible for financial and
accounting matters as to transactions and events since the date of the most
recent consolidated statement of condition included in their most recent audit
report with respect to the Company did not cause them to believe that (i) the
Company's audited consolidated financial statements and such latest available
unaudited consolidated financial statements are not stated on a basis consistent
with that followed in the Company's audited consolidated financial statements;
or (ii) except as disclosed in the letter, at a specified date not more than
five business days prior to the date of such letter, there was any change in the
Company's capital stock or any change in consolidated long-term debt or any
decrease in the consolidated net assets of the Company as compared with the
respective amounts shown in the most recent Company audited consolidated
financial statements. The letter shall also cover such other matters pertaining
to the Company's and the Bank's financial data and statistical information
included in the Registration Statement as may reasonably be requested by Zions
Bancorp.

         7.7 Affiliates' Agreements. The Company will furnish to Zions Bancorp a
list of all persons known to the Company who at the date of the Company's
special meeting of shareholders to vote upon the transactions contemplated by
this Agreement may be deemed to be "affiliates" of the Company within the
meaning of Rule 145 under the 1933 Act and for purposes of qualifying the
Holding Company Merger for "pooling of interests" accounting treatment. The
Company will use its best efforts to cause each such "affiliate" of the Company
to deliver to Zions Bancorp not later than thirty days prior to the Effective
Date a written agreement providing that such person will not sell, pledge,
transfer or otherwise dispose of (a) the shares of Company Common Stock
beneficially owned by such person, or the shares of Zions Bancorp Stock to be
received by such person in the Holding Company Merger (the "Company Merger
Shares") or any other shares of Zions Bancorp Stock held by such person during
the period commencing thirty days prior to the Effective Date and ending at such
time as financial results covering at least thirty days of post-Holding Company
Merger combined operations have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies or (b) the
Company Merger Shares except in compliance with the applicable provisions of the
1933 Act and the rules and regulations thereunder.


                                      -34-

<PAGE>


         7.8 Inconsistent Activities. Unless and until the Holding Company
Merger has been consummated or this Agreement has been terminated in accordance
with its terms, neither the Company nor the Bank will (a) solicit or encourage,
directly or indirectly, any inquiries or proposals to acquire more than 1
percent of the Company Common Stock or any capital stock of the Bank or any
significant portion the assets of either of them (whether by tender offer,
merger, purchase of assets, or other transactions of any type); (b) afford any
third party which may be considering any such transaction access to its
properties, books or records except as required by mandatory provisions of law;
(c) enter into any discussions or negotiations for, or enter into any agreement
or understanding which provides for, any such transaction, or (d) authorize or
permit any of its directors, officers, employees or agents to do or permit any
of the foregoing. If the Company or the Bank becomes aware of any offer or
proposed offer to acquire any shares of its capital stock or any significant
portion of its assets (regardless of the form of the proposed transaction) or of
any other matter which could adversely affect this Agreement, the Holding
Company Merger, or the Bank Merger, the Company and the Bank shall immediately
give notice thereof to Zions Bancorp.


8.       Representations and Warranties of Zions Bancorp, Val Cor, and Valley.

         Zions Bancorp (with respect to itself, Val Cor, and Valley), Val Cor
(with respect to itself and Valley), and Valley (solely with respect to itself)
each represent and warrant to the Company and the Bank as follows:

         8.1. Organization, Powers, and Qualification. Each of Zions Bancorp,
Val Cor, and Valley is a corporation which is duly organized, validly existing,
and in good standing under the laws of its jurisdiction of incorporation and has
all requisite corporate power and authority to own and operate its properties
and assets, to lease properties used in its business, and to carry on its
business as now conducted. Each of Zions Bancorp, Val Cor, and Valley owns or
possesses in the operation of its business all franchises, licenses, permits,
branch certificates, consents, approvals, waivers, and other authorizations,
governmental or otherwise, which are necessary for it to conduct its business as
now conducted, except for those where the failure of such ownership or
possession would not adversely affect its operation and properties in any
material respect. Each of Zions Bancorp, Val Cor, and Valley is duly qualified
and licensed to do business and is in good standing in every jurisdiction in
which such qualification or license is required or with respect to which the
failure to be so qualified or licensed could result in material liability or
adversely affect its operation and properties in any material respect.

         8.2. Execution and Performance of Agreement. Each of Zions Bancorp, Val
Cor, and Valley has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its respective terms.


                                      -35-

<PAGE>


         8.3. Binding Obligations; Due Authorization. This Agreement constitutes
the valid, legal, and binding obligations of each of Zions Bancorp, Val Cor, and
Valley enforceable against it in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or
similar law, or by general principles of equity. The execution, delivery, and
performance of this Agreement and the transactions contemplated thereby have
been duly and validly authorized by the board of directors of each of Zions
Bancorp, Val Cor, and Valley. No other corporate proceedings on the part of any
of them are necessary to authorize this Agreement or the carrying out of the
transactions contemplated hereby.

         8.4. Absence of Default. None of the execution or the delivery of this
Agreement, the consummation of the transactions contemplated hereby, or the
compliance with or fulfillment of the terms hereof will conflict with, or result
in a breach of any of the terms, conditions, or provisions of, or constitute a
default under the organizational documents or bylaws of Zions Bancorp, Val Cor,
or Valley. None of such execution, consummation, or fulfillment will (a)
conflict with, or result in a material breach of the terms, conditions, or
provisions of, or constitute a material violation, conflict, or default under,
or give rise to any right of termination, cancellation, or acceleration with
respect to, or result in the creation of any lien, charge, or encumbrance upon,
any of the property or assets of Zions Bancorp, Val Cor, or Valley pursuant to
any material agreement or instrument under which it is obligated or by which any
of its properties or assets may be bound, including without limitation any
material lease, contract, mortgage, promissory note, deed of trust, loan, credit
arrangement or other commitment or arrangement of it in respect of which it is
an obligor, or (b) if the Holding Company Merger is approved by the Board of
Governors under the BHC Act, or if the Board of Governors waives its
jurisdiction over the Holding Company Merger, and if the transactions
contemplated by this Agreement are approved by the OCC, the Commissioner, and
the Division, violate any law, statute, rule, or regulation of any government or
agency to which Zions Bancorp, Val Cor, or Valley is subject and which is
material to its operations, or (c) violate any judgment, order, writ,
injunction, decree, or ruling to which it or any of its properties or assets is
subject or bound. None of the execution or delivery of this Agreement, the
consummation of the transactions contemplated thereby, or the compliance with or
fulfillment of the terms thereof will require any authorization, consent,
approval, or exemption by any person which has not been obtained, or any notice
or filing which has not been given or done, other than approval of or waiver of
jurisdiction over the transactions contemplated by this Agreement by the Board
of Governors, the OCC, the Commissioner, and the Division.

         8.5.  Brokers and Advisers.

               (a) There are no claims for brokerage commissions, finder's fees,
or similar compensation arising out of or due to any act of Zions Bancorp, Val
Cor, or Valley in connection with the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by or on behalf of any
of them.


                                      -36-


<PAGE>




               (b) None of Zions Bancorp, Val Cor, nor Valley has entered into
any agreement or understanding with any party relating to financial advisory
services provided or to be provided with respect to the transactions
contemplated by this Agreement.

         8.6. Books and Records. The books and records of each of Zions Bancorp,
Val Cor, and Valley fairly reflect the transactions to which it is a party or by
which its properties are subject or bound. Such books and records have been
properly kept and maintained and are in compliance in all material respects with
all applicable legal and accounting requirements. Each of Zions Bancorp, Val
Cor, and Valley follows generally accepted accounting principles applied on a
consistent basis in the preparation and maintenance of its books of account and
financial statements, including but not limited to the application of the
accrual method of accounting for interest income on loans, leases, discounts,
and investments, interest expense on deposits and all other liabilities, and all
other items of income and expense. Each of Zions Bancorp, Val Cor, and Valley
has made all accruals in amounts which accurately report income and expense in
the proper periods in accordance with generally accepted accounting principles.
Each of Zions Bancorp, Val Cor, and Valley has filed all material reports and
returns required by any law or regulation to be filed by it.

         8.7. Financial Statements. Zions Bancorp has furnished to the Company
its consolidated statement of condition as of each of December 31, 1994,
December 31, 1995, December 31, 1996, and June 30, 1997, and its related
consolidated statement of income, consolidated statement of changes in financial
position, and consolidated statement of changes in stockholders' equity for each
of the periods then ended, and the notes thereto (collectively, the "Zions
Bancorp Financial Statements"). All of the Zions Bancorp Financial Statements,
including the related notes, (a) were prepared in accordance with generally
accepted accounting principles applied in all material respects, and (b) are in
accordance with the books and records of Zions Bancorp which have been
maintained in accordance with generally accepted accounting principles, and (c)
fairly reflect the consolidated financial position of Zions Bancorp as of such
dates, and the consolidated results of operations of Zions Bancorp for the
periods ended on such dates, and do not fail to disclose any material
extraordinary or out-of-period items, and (d) reflect, in accordance with
generally accepted accounting principles applied in all material respects,
adequate provision for, or reserves against, the possible loan losses of Zions
Bancorp as of such dates.

         8.8. Outstanding Shares. The shares of Zions Bancorp stock that are
issued and outstanding have been duly authorized and are validly issued and
outstanding, fully paid and non-assessable.

         8.9. Securities Filings. Since January 1, 1994, Zions Bancorp has filed
all periodic and current reports it was required to file pursuant to section 13
of the Exchange Act. Such reports do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make such
reports, in light of the circumstances under which they were filed, not
misleading.

         8.10. Absence of Certain Developments. Since June 30, 1997, there has
been (a) no material adverse change in the condition, financial or otherwise,
assets, properties, liabilities, or businesses of Zions Bancorp, and (b) no
material deterioration in the quality of the loan portfolio of Zions Bancorp or
of any major component thereof, and no material increase in the level of
nonperforming assets or nonaccrual loans at Zions Bancorp or in the level of its
provision for credit losses or its reserve for possible credit losses.


                                      -37-


<PAGE>


         8.11. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by it hereunder or in
connection with this Agreement or any of the transactions contemplated
thereunder contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein, in
light of the circumstances under which they were made, not misleading. There is
no fact known to it which might materially adversely affect its business,
assets, liabilities, financial condition, results of operations, or prospects
which has not been disclosed in the Zions Bancorp Financial Statements or a
certificate delivered by it to the Company. Copies of all documents referred to
in this Agreement, unless prepared solely by the Company and the Bank or solely
by the Company and the Bank and third parties hereto, are true, correct, and
complete copies thereof and include all amendments, supplements, and
modifications thereto and all waivers thereunder.


9.       Closing.

         9.1. Place and Time of Closing. Closing shall take place at the offices
of Zions Bancorp, One South Main Street, Suite 1380, Salt Lake City, Utah, or
such other place as the parties choose, commencing at 10:00 a.m., local time, on
the Effective Date, provided that all conditions precedent to the obligations of
the parties hereto to close have then been met or waived.

         9.2. Events To Take Place at Closing. At the Closing, the following
actions will be taken:

               (a) Such certificates and other documents as are required by this
Agreement to be executed and delivered on or prior to the Effective Date and
have not been so executed and delivered, and such other certificates and
documents as are mutually deemed by the parties to be otherwise desirable for
the effectuation of the Closing, will be so executed and delivered; and then

               (b) the Holding Company Merger and the issuance of shares
incident thereto shall be effected; provided, however, that the administrative
and ministerial aspects of the issuance of shares incident to the Holding
Company Merger will be settled as soon thereafter as shall be reasonable under
the circumstances; and then


                                      -38-

<PAGE>

               (c) the Bank Merger shall be effected.


10.      Termination, Damages for Breach, Waiver, and Amendment.

         10.1. Termination by Reason of Lapse of Time. This Agreement may be
terminated by any party on or after June 30, 1998, by instrument duly authorized
and executed and delivered to the other parties, unless the Effective Date shall
have occurred on or before such date.

         10.2. Grounds for Termination. This Agreement may be terminated by
written notice of termination at any time before the Effective Date (whether
before or after action by shareholders of the Company):

               (a) by mutual consent of the parties hereto;

               (b) by Zions Bancorp, upon written notice to the Company given at
any time (i) if any of the representations and warranties of the Company or the
Bank contained in Section 6 hereof was materially incorrect when made, or (ii)
in the event of a material breach or material failure by the Company or the Bank
of any covenant or agreement of the Company or the Bank contained in this
Agreement which has not been, or cannot be, cured within thirty days after
written notice of such breach or failure is given to the Company or the Bank, as
the case may be;

               (c) by the Company, upon written notice to Zions Bancorp given at
any time (i) if any of the representations and warranties of Zions Bancorp, Val
Cor, or Valley contained in Section 8 hereof was materially incorrect when made,
or (ii) in the event of a material breach or material failure by Zions Bancorp,
Val Cor, or Valley of any covenant or agreement of Zions Bancorp, Val Cor, or
Valley contained in this Agreement which has not been, or cannot be, cured
within thirty days after written notice of such breach or failure is given to
Zions Bancorp, Val Cor, or Valley, as the case may be; or

               (d) by either Zions Bancorp or the Company upon written notice
given to the other if the board of directors of either Zions Bancorp or the
Company shall have determined in its sole judgment made in good faith, after due
consideration and consultation with counsel, that the Holding Company Merger has
become inadvisable or impracticable by reason of the institution of litigation
by the federal government or the government of the State of Colorado or the
State of Utah to restrain or invalidate the transactions contemplated by this
Agreement.


                                      -39-

<PAGE>


         10.3. Effect of Termination. In the event of the termination and
abandonment hereof pursuant to the provisions of Section 10.1 or Section 10.2,
this Agreement shall become void and have no force or effect, without any
liability on the part of Zions Bancorp, Val Cor, Valley, the Company, the Bank,
or their respective directors or officers or shareholders, in respect of this
Agreement. Notwithstanding the foregoing, (a) as provided in Section 11.4 of
this Agreement, the confidentiality agreement contained in that section shall
survive such termination, and (b) if such termination is a result of any of the
representations and warranties of a party being materially incorrect when made
or a result of the material breach or material failure by a party of a covenant
or agreement hereunder, such party whose representations and warranties were
materially incorrect or who materially breached or failed to perform its
covenant or agreement shall be liable to the other party or parties hereto that
are not affiliated with it in the amount of the actual, reasonable out-of-pocket
expenses, not to exceed $250,000, incurred by the other party in connection with
the negotiation and preparation of this Agreement and the carrying out of the
transactions contemplated hereby.

         10.4. Waiver of Terms or Conditions. Any of the terms or conditions of
this Agreement may be waived at any time prior to the Effective Date by the
party which is, or whose shareholders are, entitled to the benefit thereof, by
action taken by that party (if an individual) or by the board of directors of
such party (if a corporation), or by its chairman, or by its president; provided
that such waiver shall be in writing and shall be taken only if, in the judgment
of the party, board of directors, or officer taking such action, such waiver
will not have a materially adverse effect on the benefits intended hereunder to
it or to the shareholders of its or his corporation; and the other parties
hereto may rely on the delivery of such a waiver as conclusive evidence of such
judgment and the validity of the waiver.

         10.5.  Amendment.

               (a) Anything herein or elsewhere to the contrary notwithstanding,
to the extent permitted by law, this Agreement and the exhibits hereto may be
amended, supplemented, or interpreted at any time prior to the Effective Date by
written instrument duly authorized and executed by each of the parties hereto;
provided, however, that this Agreement may not be amended after the action by
shareholders of the Company or shareholders of Valley in any respect that would
prejudice the economic interests of such Company shareholders or Valley
shareholders, as the case may be, or any of them, except as specifically
provided herein or by like action of such shareholders.

               (b) If Zions Bancorp and the Company should mutually determine
(following receipt of advice of legal or other counsel) that it has become
inadvisable or inexpedient to effectuate the transactions contemplated by this
Agreement through means of a sequence of mergers such as is contemplated herein,
then the parties hereto agree to effect such change in the form of transaction
as described especially in Sections 1.1 and 9.2 of this Agreement by written
instrument in amendment of this Agreement.


                                      -40-


<PAGE>



               (c) The parties to this Agreement acknowledge that Valley is a
party to an unrelated agreement and plan of reorganization pursuant to which
Valley is scheduled to be merged with and into The First National Bank in
Alamosa, a national banking association with its head office located in Alamosa,
County of Alamosa, State of Colorado (the "Alamosa Merger"). The parties hereto
agree that nothing in this Agreement shall preclude or condition the right of
Valley to participate in the Alamosa Merger. The parties hereto further agree
that, if the Alamosa Merger shall have occurred prior to the Effective Date,
then the parties hereto will effect such change in the form of transaction, by
written instrument in amendment of this Agreement and of such other agreements
between or among the parties hereto or any of them as shall be implicated
herein, as shall be necessary or advisable to cause the Bank to merge into the
resulting bank in the Alamosa Merger.


11.      General Provisions.

         11.1. Allocation of Costs and Expenses. Except as provided in this
Section, each party hereto shall pay its own fees and expenses, including
without limitation the fees and expenses of its own counsel and its own
accountants and tax advisers, incurred in connection with this Agreement and the
transactions contemplated thereby. For purposes of this Section, (i) the cost of
printing and delivering the proxy statement and other material to be transmitted
to shareholders of the Company shall be deemed to be incurred on behalf of the
Company, (ii) the cost of printing and delivering the proxy statement or
information statement and other materials to be transmitted to shareholders of
Valley shall be deemed to be incurred on behalf of Valley, and (iii) the cost of
registering under federal and state securities laws the stock of Zions Bancorp
to be received by the shareholders of the Company shall be deemed to be incurred
on behalf of Zions Bancorp.

         11.2.  Mutual Cooperation.

               (a) General. Subject to the terms and conditions herein provided,
each party shall use its best efforts, and shall cooperate fully with the other
party, in carrying out the provisions of this Agreement and in making all
filings and obtaining all necessary governmental approvals, and shall execute
and deliver, or cause to be executed and delivered, such governmental
notifications and additional documents and instruments and do or cause to be
done all additional things necessary, proper, or advisable under applicable law
to consummate and make effective the transactions contemplated hereby.


                                      -41-

<PAGE>


               (b) Prior to the Effective Date, the parties shall cooperate, and
shall make all reasonable efforts to cause their respective data processing
service providers to cooperate, to complete all reasonable steps for an orderly
transfer of all applicable data tapes and processing information, and to
facilitate an electronic and systematic conversion of all applicable data
regarding the Bank to Zions Bancorp's own system of electronic data processing.
Each party shall bear its own costs associated with the transfer of tapes and
information and the conversion of data. Prior to the Effective Date, the Bank
will provide all test tapes and reports necessary to complete the transfer and
will provide a test tape and deconversion reports within fifteen days of the
date of this Agreement, a preliminary tape and set of deconversion reports six
weeks prior to the Effective Date, and an updated preliminary tape and set of
deconversion reports no more than two weeks prior to the Effective Date. The
Bank shall also arrange the delivery to Zions Bancorp at the main office of
Zions Bancorp (or at such other location as has been designated in writing by
Zions Bancorp no later than five business days before the Effective Date) no
later than 6:00 a.m. Mountain time on the day immediately following the
Effective Date, two duplicate final data processing conversion file packages and
deconversion reports in an industry standard format.

         11.3. Form of Public Disclosures. Zions Bancorp and the Company shall
mutually agree in advance upon the form and substance of all public disclosures
concerning this Agreement and the transactions contemplated hereby.

         11.4. Confidentiality. Zions Bancorp, Val Cor, Valley, the Company, the
Bank, and their respective subsidiaries shall use all information that each
obtains from the other pursuant to this Agreement solely for the effectuation of
the transactions contemplated by this Agreement or for other purposes consistent
with the intent of this Agreement. Neither Zions Bancorp, Val Cor, Valley, the
Company, the Bank, nor their respective subsidiaries shall use any of such
information for any other purpose, including, without limitation, the
competitive detriment of any other party. Zions Bancorp, Val Cor, and Valley, on
the one hand, and the Company and the Bank, on the other hand, shall maintain as
strictly confidential all information each of them learns from the other and
shall, at any time, upon the request of the other, return promptly to it all
documentation provided by it or made available to third parties. Each of the
parties may disclose such information to its respective affiliates, counsel,
accountants, tax advisers, and consultants. The confidentiality agreement
contained in this Section 11.4 shall remain operative and in full force and
effect, and shall survive the termination of this Agreement.

         11.5.  Claims of Brokers.

               (a) Each of the Company and the Bank shall indemnify, defend, and
hold Zions Bancorp, Val Cor, and Valley harmless for, from, and against any
claim, suit, liability, fees, or expenses (including, without limitation,
attorneys' fees and costs of court) arising out of any claim for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
of its or his acts in connection with the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by it or him or on its
or his behalf with respect to Zions Bancorp, Val Cor, or Valley.


                                      -42-

<PAGE>


               (b) Each of Zions Bancorp, Val Cor, and Valley shall indemnify,
defend, and hold the Company and the Bank harmless for, from, and against any
claim, suit, liability, fees, or expenses (including, without limitation,
attorneys' fees and costs of court) arising out of any claim for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
of its acts in connection with any of the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by it or on its behalf
with respect to the Company or the Bank.

         11.6.  Information for Applications and Registration Statement.

               (a) Each party represents and warrants that all information
concerning it which is included in any statement and application (including the
Registration Statement) made to any governmental agency in connection with the
transactions contemplated by this Agreement shall not, with respect to such
party, omit any material fact required to be stated therein or necessary to make
the statements made, in light of the circumstances under which they were made,
not misleading. The party so representing and warranting will indemnify, defend,
and hold harmless the other, each of its directors and officers, each
underwriter and each person, if any, who controls the other within the meaning
of the Securities Act, for, from and against any and all losses, claims, suits,
damages, expenses, or liabilities to which any of them may become subject under
applicable laws (including, but not limited to, the Securities Act and the
Exchange Act) and rules and regulations thereunder and will reimburse them for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any actions whether or not resulting in liability,
insofar as such losses, claims, damages, expenses, liabilities, or actions arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any such application or statement or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary in order to make the statements
therein not misleading, but only insofar as any such statement or omission was
made in reliance upon and in conformity with information furnished in writing by
the representing and warranting party expressly for use therein. Each party
agrees at any time upon the request of the other to furnish to the other a
written letter or statement confirming the accuracy of the information contained
in any proxy statement, registration statement, report, or other application or
statement, and confirming that the information contained in such document was
furnished expressly for use therein or, if such is not the case, indicating the
inaccuracies contained in such document or draft or indicating the information
not furnished expressly for use therein. The indemnity agreement contained in
this Section 11.6(a) shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any of the other
parties, and shall survive the termination of this Agreement or the consummation
of the transactions contemplated thereby.


                                      -43-



<PAGE>



               (b) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement contained in Section 11.6(a) of
this Agreement is for any reason held by a court of competent jurisdiction to be
unenforceable as to any or every party, then the parties in such circumstances
shall contribute to the aggregate losses, claims, damages and liabilities
(including any investigation, legal and other expenses incurred in connection
with, and any amounts paid in settlement of, any action, suit or proceeding or
any claims asserted) to which any party may be subject in such proportion as the
court of law determines based on the relative fault of the parties.

         11.7.  Standard of Materiality.

               (a) For purposes of Sections 4, 6, and 7 of this Agreement, the
terms "material" and "materially," when used with reference to items normally
expressed in dollars, shall be deemed to refer to amounts individually and in
the aggregate in excess of 3 percent of the shareholders' equity of the Company
as of June 30, 1997, as determined in accordance with generally accepted
accounting principles.

               (b) For purposes of Sections 5 and 8 of this Agreement, the terms
"material" and "materially," when used with reference to items normally
expressed in dollars, shall be deemed to refer to amounts individually and in
the aggregate in excess of 3 percent of the shareholders' equity of Zions
Bancorp as of June 30, 1997, as determined in accordance with generally accepted
accounting principles.

               (c) For other purposes and, notwithstanding subsections (a) and
(b) of this section 11.7, when used anywhere in this Agreement with explicit
reference to any of the federal securities laws or to the Registration
Statement, the terms "material" and "materially" shall be construed and
understood in accordance with standards of materiality as judicially determined
under the federal securities laws.

         11.8.  Covenants of Zions Bancorp.

               (a) From the date hereof to the Effective Date, Zions Bancorp
shall, contemporaneously with the filing with the SEC of any periodic or current
report pursuant to section 13 of the Exchange Act, deliver a copy of such report
to the Company.

               (b) From the date hereof to the Effective Date, Zions Bancorp
shall give to the Company and the Bank and to their representatives reasonable
access during normal business hours to such information, property, documents,
contracts, books, and records of Zions Bancorp with respect to its business
affairs and properties as the Company or the Bank from time to time may
reasonably request.


                                      -44-

<PAGE>


               (c) Following the Effective Date none of Zions Bancorp, Val Cor,
nor Valley shall take any action to abrogate or diminish any right accorded
under the articles of incorporation or by-laws of the Company or the Bank as
they existed immediately prior to the Effective Date to any person who, on or
prior to the Effective Date, was a director or officer of the Company or the
Bank to indemnification from or against losses, expenses, claims, demands,
damages, liabilities, judgments, fines, penalties, costs, expenses (including
without limitation reasonable attorneys fees) and amounts paid in settlement
pertaining to or incurred in connection with any threatened or actual action,
suit, claim, or proceeding (whether civil, criminal, administrative,
arbitration, or investigative) arising out of events, matters, actions, or
omissions occurring on or prior to the Effective Date. To the extent not
provided by the foregoing, following the Effective Date and to the extent
permitted by law, all rights to such indemnification accorded under the articles
of incorporation and by-laws of the Company or the Bank to any person who, on or
prior to the Effective Date, was a director or officer of the Company or the
Bank shall survive the Effective Date and, following the Holding Company Merger
and the Bank Merger, to the extent permitted by law, Val Cor and Valley will
honor such obligations, and Zions Bancorp shall cause Val Cor and Valley and
their successors in interest, if any, to honor such obligations, in accordance
with their terms with respect to events, acts, or omissions occurring prior to
the Effective Date, and Zions Bancorp hereby guarantees, to the extent permitted
by law, that such obligations will be honored.

         11.9. Adjustments for Certain Events. Anything in this agreement to the
contrary notwithstanding, all prices per share and exchange ratios referred to
in this Agreement shall be appropriately adjusted to account for stock
dividends, split-ups, mergers, recapitalizations, combinations, conversions,
exchanges of shares or the like, but not for normal and recurring cash dividends
declared or paid in a manner consistent with the established practice of the
payer.

         11.10. Stock Repurchases. The Company and the Bank acknowledge that
from time to time Zions Bancorp repurchases shares of its common stock in the
open market in accordance with market conditions. Nothing in this Agreement
shall be construed to abridge the right of Zions Bancorp to continue to do so in
compliance with Exchange Act rules and regulations and pursuant to advice of
independent securities counsel for Zions Bancorp.

         11.11. Name of Resulting Bank. The parties acknowledge that it is their
mutual intent that the historical business of the Bank continue to be conducted
from and after the Effective Date under a name that will suit the needs of the
Bank and its customers within its market area. The parties further acknowledge
and agree that any trade name containing a geographically based delimiter that
is inappropriate for a bank operating in Denver and Boulder, Colorado, including
without limitation any trade name containing the words "Cortez" and "Alamosa,"
will


                                      -45-


<PAGE>



not suit the needs of the Bank and its customers within its market area. The
parties agree that prior to or on the Effective Date and subject to the
requirements of applicable bank regulatory agencies, the surviving bank in the
Bank Merger will adopt, and Zions Bancorp and Val Cor will cause such bank to
adopt, a corporate or trade name for use in advertising, marketing, signage, and
similar purposes that is not inappropriate for a bank operating in Denver and
Boulder, Colorado.

         11.12. Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original, but such
counterparts together shall be deemed to be one and the same instrument and to
become effective when one or more counterparts have been signed by each of the
parties hereto. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for the other counterpart.

         11.13. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to their commitments to one
another and their undertakings vis-a-vis one another on the subject matter
hereof. Any previous agreements or understandings among the parties regarding
the subject matter hereof are merged into and superseded by this Agreement.
Nothing in this Agreement express or implied is intended or shall be construed
to confer upon or to give any person, other than Zions Bancorp, Val Cor, Valley,
the Company, the Bank, and their respective shareholders, any rights or remedies
under or by reason of this Agreement.

         11.14. Survival of Representations, Warranties, and Covenants. The
respective representations, warranties, and covenants of each party to this
Agreement are hereby declared by the other parties to have been relied on by
such other parties and shall survive for one year following the Effective Date,
provided that if either party should breach a representation, warranty, or
covenant contained in this Agreement through fraud, deliberate
misrepresentation, or other intentional tortious conduct, then the
representation, warranty, or covenant so breached shall be deemed to have
survived for six years following the Effective Date. Each party shall be deemed
to have relied upon each and every representation and warranty of the other
parties regardless of any investigation heretofore or hereafter made by or on
behalf of such party.

         11.15. Section Headings. The section and subsection headings herein
have been inserted for convenience of reference only and shall in no way modify
or restrict any of the terms or provisions hereof. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.

         11.16. Notices. All notices, consents, waivers, or other communications
which are required or permitted hereunder shall be in writing and deemed to have
been duly given if delivered personally or by messenger, transmitted by telex or
telegram, by express courier, or




                                      -46-

<PAGE>


sent by registered or certified mail, return receipt requested, postage prepaid.
All communications shall be addressed to the appropriate address of each party
as follows:

If to Zions Bancorp, Val Cor, or Valley:

           Zions Bancorporation
           One South Main Street, Suite 1380
           Salt Lake City, Utah  84111

           Attention:     Mr. Harris H. Simmons
                          President and Chief Executive Officer

With a required copy to:

           Brian D. Alprin, Esq.
           Duane, Morris & Heckscher LLP
           1667 K Street, N.W., Suite 700
           Washington, D.C.  20006

If to the Company or the Bank:

           Tri-State Finance Corporation
           616 East Speer Boulevard
           Denver, Colorado  80203

           Attention:     Mr. Richard C. Tucker
                          Chairman, President and Chief Executive Officer

With a required copy to:

           Thomas H. Maxfield, Esq.
           Baker & Hostetler LLP
           303 East Seventeenth Avenue, Suite 1100
           Denver, Colorado  80203-1264


           All such notices shall be deemed to have been given on the date
delivered, transmitted, or mailed in the manner provided above.


                                      -47-



<PAGE>



           11.17. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah and Denver County, Colorado to be proper
jurisdictions and venues for any suit or action arising out of this Agreement.
Each of the parties consents to personal jurisdiction in each of such venues for
such a proceeding and agrees that it may be served with process in any action
with respect to this Agreement or the transactions contemplated thereby by
certified or registered mail, return receipt requested, or to its registered
agent for service of process in the state of Utah or Colorado. Each of the
parties irrevocably and unconditionally waives and agrees, to the fullest extent
permitted by law, not to plead any objection that it may now or hereafter have
to the laying of venue or the convenience of the forum of any action or claim
with respect to this Agreement or the transactions contemplated thereby brought
in the courts aforesaid.

           11.18. Knowledge of a Party. References in this Agreement to the
knowledge of a party shall mean the knowledge possessed by any of such parties
or the present executive officers of such party including, without limitation,
information which is or has been in the books and records of such party.

           11.19. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.

           IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.

                                                ZIONS BANCORPORATION



Attest: ___________________________             By:_________________________
            Dale M. Gibbons                            Harris H. Simmons
        Senior Vice President                            President and
            and Secretary                           Chief Executive Officer




                                      -48-



<PAGE>


                                                VAL COR BANCORPORATION, INC.



Attest:____________________________             By:____________________________
                                                         Wayne D. Glazner
                                                          President and
                                                     Chief Executive Officer





                                                VALLEY NATIONAL BANK OF CORTEZ



Attest:____________________________             By:____________________________
                                                        R. Lance Michaels
                                                   Executive Vice President and
                                                      Chief Executive Officer





                                                TRI-STATE FINANCE CORPORATION



Attest:____________________________             By:____________________________
          Donald H. Schurr, Jr.                         Richard C. Tucker
        Executive Vice President,                    Chairman, President and
         Secretary and Treasurer                     Chief Executive Officer



                                      -49-


<PAGE>

                                                TRI-STATE BANK



Attest:____________________________             By:____________________________
                                                        Richard C. Tucker
                                                     Chairman, President and
                                                     Chief Executive Officer













                                      -50-


<PAGE>




____________________________
                            )
                            )
State of Utah               )
                            )       ss.
County of Salt Lake         )
                            )
____________________________)


          On this twenty-third day of September, 1997, before me personally
appeared Harris H. Simmons, to me known to be the President and Chief Executive
Officer of Zions Bancorporation, and acknowledged said instrument to be the free
and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed is the corporate seal of said corporation.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                                    _________________________
                                                          Notary Public





                                      -51-


<PAGE>


____________________________
                            )
                            )
State of Colorado           )
                            )       ss.
County of Montezuma         )
                            )
____________________________)


          On this twenty-third day of September, 1997, before me personally
appeared Wayne D. Glazner, to me known to be the President and Chief Executive
Officer of Val Cor Bancorporation, Inc., and R. Lance Michaels, to me known to
be the Executive Vice President and Chief Executive Officer of Valley National
Bank of Cortez, and acknowledged said instrument to be the free and voluntary
act and deed of each of said corporations, for the uses and purposes therein
mentioned, and on oath each stated that he was authorized to execute said
instrument and that the respective seals affixed are the respective corporate
seals of said corporations.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                                    _________________________
                                                          Notary Public



                                      -52-


<PAGE>




____________________________
                            )
                            )
State of Colorado           )
                            )       ss.
County of Denver            )
                            )
____________________________)



          On this twenty-third day of September, 1997, before me personally
appeared Richard C. Tucker, to me known to be the Chairman, President and Chief
Executive Officer of Tri-State Finance Corporation, and acknowledged said
instrument to be the free and voluntary act and deed of said corporation, for
the uses and purposes therein mentioned, and on oath stated that he was
authorized to execute said instrument and that the seal affixed is the corporate
seal of said corporation.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                                    _________________________
                                                          Notary Public


                                      -53-

<PAGE>


____________________________
                            )
                            )
State of Colorado           )
                            )       ss.
County of Denver            )
                            )
____________________________)



          On this twenty-third day of September, 1997, before me personally
appeared Richard C. Tucker, to me known to be the Chairman, President and Chief
Executive Officer of Tri-State Bank, and acknowledged said instrument to be the
free and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed is the corporate seal of said corporation.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                                    _________________________
                                                         Notary Public



                                      -54-



<PAGE>



         The undersigned members of the Board of Directors of Tri-State Finance
Corporation (the "Company"), acknowledging that Zions Bancorporation ("Zions
Bancorp") has relied upon the action heretofore taken by the board of directors
in entering into the Agreement, and has required the same as a prerequisite to
Zions Bancorp's execution of the Agreement, do individually and as a group
agree, subject to their fiduciary duties to shareholders, to support the
Agreement and to recommend its adoption by the other shareholders of the
Company.

         The undersigned do hereby, individually and as a group, until the
Effective Date or termination of the Agreement, further agree to refrain from
soliciting or, subject to their fiduciary duties to shareholders, negotiating or
accepting any offer of merger, consolidation, or acquisition of any of the
shares or all or substantially all of the assets of the Company or Tri-State
Bank.



_____________________________          ______________________________


_____________________________          ______________________________


_____________________________          ______________________________


_____________________________          ______________________________



                                      -55-

<PAGE>




                                  SCHEDULE 1.8
                                  ------------


                                 Richard D. Amen
                                 Robert D. Baker
                                Sharon L. Bennett
                             Jesse B. Carraway, Jr.
                           Consolidated Equities, Ltd.
                                  James Downey
                          Katherine A. Tucker Faulkner
                                   Dora O. Fie
                                 Merrill R. Fie
                                J. Barry McCallan
                              Donald H. Schurr, Jr.
                                William O. Schurr
                               Patricia T. Tucker
                                Richard C. Tucker
                             Richard C. Tucker, Jr.
                                 Susan L. Tucker


<PAGE>


                                   EXHIBIT I

                        HOLDING COMPANY MERGER AGREEMENT




<PAGE>




                               AGREEMENT OF MERGER


         This Agreement of Merger is made and entered into as of
[               ], 1997, between VAL COR BANCORPORATION, INC. ("Val Cor"), a
corporation organized under the laws of the State of Colorado, and TRI-STATE
FINANCE CORPORATION (the "Company"), a corporation organized under the laws of
the State of Colorado. Val Cor and the Company are hereinafter sometimes
individually called a "Constituent Corporation" and collectively called the
"Constituent Corporations."

                                    RECITALS

         Val Cor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. As of [               ], 1997,
the authorized capital stock of Val Cor consisted of [          ] shares of
Common Stock, [      ] par value, of which [       ] shares were issued and
outstanding; no shares of capital stock were held in its treasury on such date.
All of the capital stock of Val Cor is owned of record and beneficially by Zions
Bancorporation, a corporation organized under the laws of the State of Utah
("Zions Bancorp").

         The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado. As of [               ],
1997, the authorized capital stock of the Company consisted of [____] shares of
Class A Common Stock, $1.00 par value (the "Class A Common Stock"), of which 
[______] shares were issued and outstanding, and [ ] shares of Class B Common
Stock, $1.00 par value (the "Class B Common Stock"), of which [___________]
shares were issued and outstanding; no shares of capital stock were held in its
treasury on such date. The Class A Common Stock and the Class B Common Stock are
referred to collectively in this Agreement as the "Company Common Stock."

         Val Cor and the Company have entered into an Agreement and Plan of
Reorganization, dated September 23, 1997 (the "Plan of Reorganization"), setting
forth certain representations, warranties, and agreements in connection with the
transactions therein and herein contemplated, which contemplates the merger of
the Company with and into Val Cor (the "Merger") in accordance with this
Agreement of Merger (the "Agreement").

         The Boards of Directors of each of Val Cor and the Company deem the
Merger advisable and in the best interests of each corporation and its
stockholders. The Boards of Directors of each of Val Cor and the Company, by
resolutions duly adopted, have approved the Plan of Reorganization. The Boards
of Directors of each of Val Cor and the Company, by resolutions duly adopted,
have approved this Agreement. The Boards of Directors of each of Val Cor and the
Company have directed that this Agreement, and authorization for the
transactions contemplated hereby, be submitted to stockholders of Val Cor and
the Company respectively for approval.


<PAGE>




         At the Effective Date (as defined in Section 1.1 below) shares of
Company Common Stock shall be converted into the right to receive shares of the
common stock of Zions Bancorp, no par value (the "Zions Bancorp Stock"), as
provided herein.

         In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:

                                    ARTICLE I

         1.1. Merger of the Company into Val Cor. The Company shall be merged
with and into Val Cor on the date and at the time to be specified in the
Articles of Merger to be filed with the Secretary of State of the State of
Colorado pursuant to section 7-111-105 of the Colorado Business Corporation Act
(such date and time being referred to herein as the "Effective Date").

         1.2. Effect of the Merger. At the Effective Date:

                  (a) The Company and Val Cor shall be a single corporation,
which shall be Val Cor. Val Cor is hereby designated as the surviving
corporation in the Merger and is hereinafter sometimes called the "Surviving
Corporation."

                  (b) The separate existence of the Company shall cease.

                  (c) The Surviving Corporation shall have all the rights,
privileges, immunities, and powers and shall assume and be subject to all the
duties and liabilities of a corporation organized under the Colorado Business
Corporation Act.

                  (d) The Surviving Corporation shall thereupon and thereafter
possess all of the rights, privileges, immunities, and franchises, of a public
as well as of a private nature, of each of the Constituent Corporations; and all
property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares and all other choses in action, and all and
every other interest of and belonging to or due to each of the Constituent
Corporations shall be taken and deemed to be transferred to and vested in the
Surviving Corporation without further act or deed; and the title to any real
estate, or any interest therein, vested in either of the Constituent
Corporations shall not revert or be in any way impaired by reason of the Merger.

                  (e) The Surviving Corporation shall thenceforth be responsible
and liable for all the liabilities and obligations of each of the Constituent
Corporations; and any claim existing or action or proceeding pending by or
against either of the Constituent Corporations may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted


                                      -2-


<PAGE>


in its place. The Surviving Corporation expressly assumes and agrees to perform
all of the Company's liabilities and obligations. Neither the rights of
creditors nor any liens upon the property of either Constituent Corporation
shall be impaired by the Merger.

                  (f) The Articles of Incorporation of Val Cor as they exist
immediately prior to the Effective Date shall be the Articles of Incorporation
of the Surviving Corporation until later amended pursuant to Colorado law.

                  (g) At the Effective Date and until surrendered for exchange
and payment, each outstanding stock certificate which, prior to the Effective
Date, represents shares of Company Common Stock shall, without further action,
cease to be an issued and existing share and shall be converted into a right to
receive from Zions Bancorp, and shall for all purposes represent the right to
receive, upon surrender of the certificate representing such shares, the number
of shares of Zions Bancorp Stock specified in Article III; provided that, with
respect to any matters relating to stock certificates representing Company
Common Stock, Zions Bancorp may rely conclusively upon the record of
stockholders maintained by the Company containing the names and addresses of the
holders of record of the Company's Common Stock at the Effective Date.

         1.3. Acts to Carry Out This Merger Plan.

                  (a) The Company and its proper officers and directors shall
and will do all such acts and things as may be necessary or proper to vest,
perfect, or confirm title to such property or rights in Val Cor and otherwise to
carry out the purposes of this Agreement.

                  (b) If, at any time after the Effective Date, Val Cor shall
consider or be advised that any further assignments or assurances in law or any
other acts are necessary or desirable to (i) vest, perfect, or confirm, of
record or otherwise, in Val Cor its right, title, or interest in or under any of
the rights, properties, or assets of the Company acquired or to be acquired by
Val Cor as a result of, or in connection with, the Merger, or (ii) otherwise
carry out the purposes of this Agreement, the Company and its proper officers
and directors shall be deemed to have granted to Val Cor an irrevocable power of
attorney to execute and deliver all such proper deeds, assignments, and
assurances in law and to do all acts necessary or proper to vest, perfect, or
confirm title to and possession of such rights, properties, or assets in Val Cor
and otherwise to carry out the purposes of this Agreement; and the proper
officers and directors of Val Cor are fully authorized in the name of the
Company or otherwise to take any and all such action.


                                      -3-

<PAGE>

                                   ARTICLE II

         2.1. Capitalization. The authorized shares of capital stock of Val Cor
as of the Effective Date shall be [__________] shares of Common Stock,
[________] par value.

         2.2. By-Laws. The By-Laws of Val Cor as they exist immediately prior to
the Effective Date shall be the By-Laws of Val Cor until later amended pursuant
to Colorado law.


                                   ARTICLE III

         3.1. Manner of Converting Shares. Subject to the terms, conditions, and
limitations set forth herein, upon surrender of his or her certificate or
certificates, each holder of shares of Company Common Stock shall be entitled to
receive, in exchange for each share of Company Common Stock held of record by
such stockholder as of the Effective Date, that number of shares of the common
stock of Zions Bancorp, no par value (the "Zions Bancorp Stock") calculated by
dividing 710,000 by the total number of shares of Company Common Stock that
shall be issued and outstanding at the Effective Date.

         3.2. No Fractional Shares. Zions Bancorp will not issue fractional
shares of its stock. In lieu of fractional shares of Zions Bancorp Stock, if
any, each shareholder of the Company who is entitled to a fractional share of
Zions Bancorp Stock shall receive an amount of cash equal to the product of such
fraction times $40.625. Such fractional share interest shall not include the
right to vote or to receive dividends or any interest thereon.

         3.3. Dividends; Interest. No shareholder of the Company will be
entitled to receive dividends on his or her Zions Bancorp Stock until he or she
exchanges his or her certificates representing Company Common Stock for Zions
Bancorp Stock. Any dividends declared on Zions Bancorp Stock (which stock is to
be delivered pursuant to this Agreement) to holders of record on or after the
Effective Date shall be paid to the Exchange Agent (as designated in Section 3.4
of this Agreement) and, upon receipt of the certificates representing shares of
Company Common Stock, the Exchange Agent shall forward to the former
shareholders entitled to receive Zions Bancorp Stock (i) certificates
representing their shares of Zions Bancorp Stock, (ii) dividends declared
thereon subsequent to the Effective Date (without interest) and (iii) the cash
value of any fractional shares determined in accordance with Section 3.2 hereof.

         3.4. Designation of Exchange Agent.

                  (a) The parties of this Agreement hereby designate Zions First
National Bank, a national banking association with its head office located in
Salt Lake City, Utah ("Zions Bank") as Exchange Agent to effect the exchanges
contemplated hereby.


                                      -4-

<PAGE>


                  (b) Zions Bancorp will, promptly after the Effective Date,
issue and deliver to Zions Bank the share certificates representing shares of
Zions Bancorp Stock and the cash to be paid to holders of Company Common Stock
in accordance with this Agreement.

         3.5. Notice of Exchange. Promptly after the Effective Date, Zions Bank
shall mail to each holder of one or more certificates formerly representing
Company Common Stock, except to such holders as shall have waived the notice
required by this Section 3.5, a notice specifying the Effective Date and
notifying such holder to surrender his or her certificate or certificates to
Zions Bank for exchange. Such notice shall be mailed to holders by regular mail
at their addresses on the records of the Company.

         3.6. Treatment of Stock Options. Each stock option to purchase Company
Common Stock not exercised prior to the Effective Date shall automatically be
canceled on and as of the Effective Date.


                                   ARTICLE IV

         4.1. Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original, but such
counterparts together shall be deemed to be one and the same instrument and to
become effective when one or more counterparts have been signed by each of the
parties hereto. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for the other counterpart.

         4.2. Section Headings. The section and subsection headings herein have
been inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.

         4.3. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah and Denver County, Colorado to be proper
jurisdictions and venues for any suit or action arising out of this Agreement.
Each of the parties consents to personal jurisdiction in each of such venues for
such a proceeding and agrees that it may be served with process in any action
with respect to this Agreement or the transactions contemplated thereby by
certified or registered mail, return receipt requested, or to its registered
agent for service of process in the state of Utah or Colorado. Each of the
parties irrevocably and unconditionally waives and agrees, to the fullest extent
permitted by law, not to plead any objection that it may now or hereafter have
to the laying of venue or the convenience of the forum of any action or claim
with respect to this Agreement or the transactions contemplated thereby brought
in the courts aforesaid.


                                      -5-

<PAGE>


         4.4. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.

         4.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto, provided
that this Agreement may not be amended after the action by shareholders of the
Company in any respect that would prejudice the economic interests of such
Company shareholders, or any of them, except as specifically provided herein or
by like action of such shareholders.

         4.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of Val
Cor and the Company at any time prior to the Effective Date, and there shall be
no liability on the part of either of the parties hereto (or any of their
respective officers or directors) except to the extent provided in the Plan of
Reorganization.





                                      -6-


<PAGE>



         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                             VAL COR BANCORPORATION, INC.



Attest:___________________________           By:_____________________________
                                                     Wayne D. Glazner
                                                     President and
                                                  Chief Executive Officer





                                             TRI-STATE FINANCE CORPORATION



Attest:___________________________          By:______________________________
          Donald H. Schurr, Jr.                        Richard C. Tucker
        Executive Vice President,                   Chairman, President and
        Secretary and Treasurer                     Chief Executive Officer






                                      -7-


<PAGE>


_________________________
                         )
                         )
State of Colorado        )
                         )       ss.
County of Montezuma      )
                         )
_________________________)




          On this ________ day of [____________], 1997, before me personally
appeared Wayne D. Glazner, to me known to be the President and Chief Executive
Officer of Val Cor Bancorporation, Inc., and acknowledged said instrument to be
the free and voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
said instrument and that the seal affixed is the corporate seal of said
corporation.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                                  ________________________
                                                        Notary Public







                                      -8-



<PAGE>



__________________________
                          )
                          )
State of Colorado         )
                          )       ss.
County of Denver          )
                          )
__________________________)




          On this ________ day of [____________], 1997, before me personally
appeared Richard C. Tucker, to me known to be the Chairman, President and Chief
Executive Officer of Tri-State Finance Corporation, and acknowledged said
instrument to be the free and voluntary act and deed of said corporation, for
the uses and purposes therein mentioned, and on oath stated that he was
authorized to execute said instrument and that the seal affixed is the corporate
seal of said corporation.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                                  _____________________
                                                      Notary Public




                                      -9-


<PAGE>





                                   EXHIBIT II

                             BANK MERGER AGREEMENT


<PAGE>


                              AGREEMENT OF MERGER


         This Agreement of Merger is made and entered into as of
[_______________], 1997, between VALLEY NATIONAL BANK OF CORTEZ ("Valley"), a
national banking association organized under the laws of the United States, and
TRI-STATE BANK (the "Bank"), a banking corporation organized under the laws of
the State of Colorado. Valley and the Bank are hereinafter sometimes
individually called a "Constituent Association" and collectively called the
"Constituent Associations."

                                    RECITALS

         Valley is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. As of
[_______________], 1997, the authorized capital stock of Valley consisted of
600,000 shares of Common Stock, $5.00 par value, of which 354,000 shares were
issued and outstanding; no shares of capital stock were held in its treasury on
such date.

         The Bank is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. As of [_______________], 1997,
the authorized capital stock of the Bank consisted of [         ] shares of Bank
Common Stock, $100.00 par value (the "Bank Common Stock"), of which [__________]
shares were issued and outstanding; no shares of capital stock were held in its
treasury on such date.

         Valley and the Bank have entered into an Agreement and Plan of
Reorganization, dated September 23, 1997 (the "Plan of Reorganization"), setting
forth certain representations, warranties, and agreements in connection with the
transactions therein and herein contemplated, which contemplates the merger of
the Bank with and into Valley (the "Merger") in accordance with this Agreement
of Merger (the "Agreement").

         The Boards of Directors of each of Valley and the Bank deem the Merger
advisable and in the best interests of each association and its stockholders.
The Boards of Directors of each of Valley and the Bank, by resolutions duly
adopted, have approved the Plan of Reorganization. The Boards of Directors of
each of Valley and the Bank, by resolutions duly adopted, have approved this
Agreement. The Boards of Directors of each of Valley and the Bank have directed
that this Agreement, and authorization for the transactions contemplated hereby,
be submitted to stockholders of Valley and the Bank respectively for approval.

         At the Effective Date (as defined in Section 1.1 below) shares of Bank
Common Stock shall be converted into the right to receive shares of the common
stock of Valley, $5.00 par value (the "Valley Common Stock"), as provided
herein.



<PAGE>


         In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:

                                    ARTICLE I

         1.1. Merger of the Bank into Valley. The Bank shall be merged with and
into Valley on the date and at the time to be specified in the Articles of
Merger to be filed with the Comptroller of the Currency pursuant to the National
Bank Act (such date and time being referred to herein as the "Effective Date").

         1.2. Effect of the Merger. At the Effective Date:

                  (a) The Bank and Valley shall be a single association, which
shall be Valley. Valley is hereby designated as the surviving association in the
Merger and is hereinafter sometimes called the "Surviving Association."

                  (b) The separate existence of the Bank shall cease.

                  (c) The currently outstanding 354,000 shares of common stock
of Valley, each of $5.00 par value, will remain outstanding as shares of the
$5.00 par value common stock of the Surviving Association, and the holders of
such stock shall retain their present rights.

                  (d) Each holder of shares of Bank Common Stock shall be
entitled to receive, in exchange for each share of Bank Common Stock held of
record by such stockholders as of the Effective Date, that number of shares of
Valley Common Stock calculated by, first, dividing the tangible book value of
Valley at the close of business on the business day before the Effective Date by
the number of shares of Valley Common Stock that shall be issued and outstanding
at the Effective Date, and second, dividing the tangible book value of the Bank
at the close of business on the business day before the Effective Date by the
number so reached, and third, dividing the number so reached by the total number
of shares of Bank Common Stock that shall be issued and outstanding at the
Effective Date.

                  (e) The Surviving Association will not issue fractional shares
of its stock. In lieu of fractional shares of Valley Common Stock, if any, each
shareholder of the Bank who is entitled to a fractional share of Valley Common
Stock shall receive an amount of cash equal to the product of such fraction
times the tangible book value per share of Valley Common Stock at the close of
business on the business day before the Effective Date. Such fractional share
interest shall not include the right to vote or to receive dividends or any
interest thereon.


                                      -2-

<PAGE>


                  (f) The Surviving Association shall have all the rights,
privileges, immunities, and powers and shall assume and be subject to all the
duties and liabilities of a national banking association organized under the
National Bank Act.

                  (g) The Surviving Association shall thereupon and thereafter
possess all of the rights, privileges, immunities, and franchises, of a public
as well as of a private nature, of each of the Constituent Associations; and all
property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares and all other choses in action, and all and
every other interest of and belonging to or due to each of the Constituent
Associations shall be taken and deemed to be transferred to and vested in the
Surviving Association without further act or deed; and the title to any real
estate, or any interest therein, vested in either of the Constituent
Associations shall not revert or be in any way impaired by reason of the Merger.

                  (h) The Surviving Association shall thenceforth be responsible
and liable for all the liabilities and obligations of each of the Constituent
Associations; and any claim existing or action or proceeding pending by or
against either of the Constituent Associations may be prosecuted as if the
Merger had not taken place, or the Surviving Association may be substituted in
its place. The Surviving Association expressly assumes and agrees to perform all
of the liabilities and obligations of the Bank. Neither the rights of creditors
nor any liens upon the property of either Constituent Association shall be
impaired by the Merger.

                  (i) The name of the Surviving Association shall be "[______]."

                  (j) The Articles of Association of Valley as they exist
immediately prior to the Effective Date shall be the Articles of Association of
the Surviving Association until later amended pursuant to the laws of the United
States, except that:

                           (i) Article FIRST of the articles of association of
the Surviving Association shall read as follows:

                           FIRST.  The name of the Association is:

                                     [_________________].

                           (ii) Article SECOND of the articles of association of
the Surviving Association shall read as follows:

                           SECOND. The main office of the Association shall be
                  in Denver, County of Denver, State of Colorado.


                                      -3-


<PAGE>




                           The general business of the Association shall be
                  conducted at its main office and its branches.

                           (iii) Article FIFTH of the articles of association of
the Surviving Association shall read as follows:

                           FIFTH. The authorized amount of capital stock of this
                  Association shall be 1,000,000 shares of common stock of the
                  par value of five dollars ($5.00) each; but said capital stock
                  may be increased or decreased from time to time, in accordance
                  with the provisions of the laws of the United States.

                           No holder of shares of the capital stock of any class
                  of the Association shall have any pre-emptive or preferential
                  right of subscription to any shares of any class of stock of
                  the Association, whether now or hereafter authorized, or to
                  any obligations convertible into stock of the Association,
                  issued or sold, nor any right of subscription to any thereof
                  other than such, if any, as the Board of Directors, in its
                  discretion, may from time to time determine and at such price
                  as the Board of Directors may from time to time fix.

                           The Association, at any time and from time to time,
                  may authorize an issue debt obligations, whether or not
                  subordinated, without the approval of the shareholders.

                           (iv) Article SEVENTH of the articles of association
of the Surviving Association shall read as follows:

                           SEVENTH. The Board of Directors shall have the power
                  to change the location of the main office to any other place
                  within the limits of Denver, Colorado, without the approval of
                  the shareholders but subject to the approval of the
                  Comptroller of the Currency; and shall have the power to
                  establish or change the location of any branch or branches of
                  the Association to any other location, without the approval of
                  the shareholders but subject to the approval of the
                  Comptroller of the Currency.


                                      -4-


<PAGE>


                  (k) The By-Laws of Valley as they exist immediately prior to
the Effective Date shall be the By-Laws of the Surviving Association until later
amended pursuant to the laws of the United States.

         1.3. Acts to Carry Out This Merger Plan.

                  (a) The Bank and its proper officers and directors shall and
will do all such acts and things as may be necessary or proper to vest, perfect,
or confirm title to such property or rights in the Surviving Association and
otherwise to carry out the purposes of this Agreement.

                  (b) If, at any time after the Effective Date, the Surviving
Association shall consider or be advised that any further assignments or
assurances in law or any other acts are necessary or desirable to (i) vest,
perfect, or confirm, of record or otherwise, in the Surviving Association its
right, title, or interest in or under any of the rights, properties, or assets
of the Bank acquired or to be acquired by the Surviving Association as a result
of, or in connection with, the Merger, or (ii) otherwise carry out the purposes
of this Agreement, the Bank and its proper officers and directors shall be
deemed to have granted to the Surviving Association an irrevocable power of
attorney to execute and deliver all such proper deeds, assignments, and
assurances in law and to do all acts necessary or proper to vest, perfect, or
confirm title to and possession of such rights, properties, or assets in the
Surviving Association and otherwise to carry out the purposes of this Agreement;
and the proper officers and directors of the Surviving Association are fully
authorized in the name of the Bank or otherwise to take any and all such action.


                                   ARTICLE II

         2.1. Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original, but such
counterparts together shall be deemed to be one and the same instrument and to
become effective when one or more counterparts have been signed by each of the
parties hereto. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for the other counterpart.

         2.2. Section Headings. The section and subsection headings herein have
been inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.



                                      -5-


<PAGE>


         2.3. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah and Denver County, Colorado to be proper
jurisdictions and venues for any suit or action arising out of this Agreement.
Each of the parties consents to personal jurisdiction in each of such venues for
such a proceeding and agrees that it may be served with process in any action
with respect to this Agreement or the transactions contemplated thereby by
certified or registered mail, return receipt requested, or to its registered
agent for service of process in the state of Utah or Colorado. Each of the
parties irrevocably and unconditionally waives and agrees, to the fullest extent
permitted by law, not to plead any objection that it may now or hereafter have
to the laying of venue or the convenience of the forum of any action or claim
with respect to this Agreement or the transactions contemplated thereby brought
in the courts aforesaid.

         2.4. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.

         2.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto.

         2.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of
Valley and the Bank at any time prior to the Effective Date, and there shall be
no liability on the part of either of the parties hereto (or any of their
respective officers or directors) except to the extent provided in the Plan of
Reorganization.




                                      -6-


<PAGE>



         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                              VALLEY NATIONAL BANK OF CORTEZ



Attest:_______________________                By:_____________________________
                                                        R. Lance Michaels
                                                    Executive Vice President and
                                                      Chief Executive Officer





                                              TRI-STATE BANK



Attest:_________________________              By:_____________________________
                                                       Richard C. Tucker
                                                    Chairman, President and
                                                    Chief Executive Officer




                                      -7-


<PAGE>




________________________
                        )
State of Colorado       )
                        )       ss.
County of Montezuma     )
                        )
________________________)


          On this ________ day of [____________], 1997, before me personally
appeared R. Lance Michaels, to me known to be the Executive Vice President and
Chief Executive Officer of Valley National Bank of Cortez, and acknowledged said
instrument to be the free and voluntary act and deed of said association, for
the uses and purposes therein mentioned, and on oath stated that he was
authorized to execute said instrument and that the seal affixed is the corporate
seal of said association.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                                     _________________________
                                                            Notary Public




                                      -8-


<PAGE>



________________________
                        )
State of Colorado       )
                        )       ss.
County of Denver        )
                        )
________________________)




          On this ________ day of [____________], 1997, before me personally
appeared Richard C. Tucker, to me known to be the Chairman, President and Chief
Executive Officer of Tri-State Bank, and acknowledged said instrument to be the
free and voluntary act and deed of said association, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed is the corporate seal of said association.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.




                                                     _________________________ 
                                                            Notary Public      




                                      -9-


<PAGE>



                                   EXHIBIT III

                                VOTING AGREEMENT


<PAGE>







                               September 23, 1997


Zions Bancorporation
One South Main Street, Suite 1380
Salt Lake City, Utah  84111

Mesdames and Gentlemen:

         The undersigned understands that Zions Bancorporation ("Zions Bancorp")
is about to enter into an Agreement and Plan of Reorganization with Tri-State
Finance Corporation (the "Company") (the "Agreement"). The Agreement provides
for the merger of the Company with and into Val Cor Bancorporation, Inc., a
wholly-owned subsidiary of Zions Bancorp (the "Merger") and the conversion of
outstanding shares of Company Stock into Zions Bancorp Common Stock and cash in
lieu of fractional shares in accordance with the formula therein set forth.

         In order to induce Zions Bancorp to enter into the Agreement, and
intending to be legally bound hereby, the undersigned, subject to the conditions
hereinafter stated, represents, warrants, and agrees that at the Company
Shareholders' Meeting contemplated by Section 4.1 of the Agreement and Plan of
Reorganization (the "Meeting"), and any adjournment thereof, the undersigned
will, in person or by proxy, vote or cause to be voted in favor of the Agreement
and the Merger the shares of Company Common Stock beneficially owned by the
undersigned individually or, to the extent of the undersigned's proportionate
voting interest, jointly with other persons, as well as, to the extent of the
undersigned's proportionate voting interest, any other shares of Company Common
Stock over which the undersigned may hereafter acquire beneficial ownership in
such capacities (collectively, the "Shares"). Subject to the final paragraph of
this agreement, the undersigned further agrees that [he] [she] will use [his]
[her] reasonable best efforts to cause any other shares of Company Common Stock
over which [he] [she] has or shares voting power to be voted in favor of the
Agreement and the Merger.

         The undersigned further represents, warrants, and agrees that beginning
upon the authorization and execution of the Agreement by the Company until the
earlier of (i) the consummation of the Merger or (ii) the termination of the
Agreement in accordance with its terms, the undersigned will not, directly or
indirectly:




<PAGE>

Zions Bancorporation
September 23, 1997
Page 2




         (a) vote any of the Shares, or cause or permit any of the Shares to be
voted, in favor of any other sale of control, merger, consolidation, plan of
liquidation, sale of assets, reclassification, or other transaction involving
the Company or any of its subsidiaries which would have the effect of assisting
or facilitating the acquisition of control by any person other than Zions
Bancorp or an affiliate thereof over the Company or any substantial portion of
its assets or assisting or facilitating the acquisition of control by any person
other than Zions Bancorp or an affiliate, or the Company or a wholly-owned
subsidiary of the Company, of any subsidiary of the Company or any substantial
portion of its assets. As used herein, the term "control" means (1) the ability
to direct the voting of 10 percent or more of the outstanding voting securities
of a person having ordinary voting power in the election of directors or in the
election of any other body having similar functions or (2) the ability to direct
the management and policies of a person, whether through ownership of
securities, through any contract, arrangement, or understanding or otherwise.

         (b) voluntarily sell or otherwise transfer any of the Shares, or cause
or permit any of the Shares to be sold or otherwise transferred (i) pursuant to
any tender offer, exchange offer, or similar proposal made by any person other
than Zions Bancorp or an affiliate thereof, (ii) to any person seeking to obtain
control (as the term "control" is defined in paragraph (a), above) of the
Company, any of its subsidiaries or any substantial portion of the assets of the
Company or any subsidiary thereof or to any other person (other than Zions
Bancorp or an affiliate thereof) under circumstances where such sale or transfer
may reasonably be expected to assist a person seeking to obtain such control,
(iii) for the purpose of avoiding the obligations of the undersigned under this
agreement, or (iv) to any transferee unless such transferee expressly agrees in
writing to be bound by the terms of this agreement in all events.

         It is understood and agreed that this agreement relates solely to the
capacity of the undersigned as a shareholder or other beneficial owner of the
Shares and does not prohibit the undersigned, if a member of the Board of
Directors of the Company or a member of the Board of Directors of Tri-State
Bank, from acting, in his or her capacity as a director, as the undersigned may
determine to be appropriate in light of the obligations of the undersigned as a
director. It is further understood and agreed that the term "Shares" shall not
include any securities beneficially owned by the undersigned as a trustee or
fiduciary for another (unless such other person is affiliated with the
undersigned or is bound by an agreement with Zions Bancorp substantially




<PAGE>

Zions Bancorporation
September 23, 1997
Page 3





similar to this agreement), and that this agreement is not in any way intended
to affect the exercise by the undersigned of the undersigned's fiduciary
responsibility in respect of any such securities.

                                                 Very truly yours,



                                                 __________________________

Accepted and Agreed to:
ZIONS BANCORPORATION


By:__________________________

Title:_______________________



<PAGE>



Zions Bancorporation
September 23, 1997
Page 4




Name of Shareholder:


             Shares of Common Stock of Tri-State Finance Corporation
                               Beneficially Owned
                            As of September 23, 1997


  Name(s) of                                            Number and Class of
Record Owner(s)          Beneficial Ownership(1)              Shares
- ---------------          -----------------------           -------------






















- --------
(1) For purposes of this Agreement, shares are beneficially owned by the
shareholder named above if held in any capacity other than a fiduciary capacity
(other than a revocable living trust and other than a fiduciary capacity on
behalf of a person who is affiliated with the shareholder or is bound by an
agreement with Zions Bancorp substantially similar to this agreement) and if the
shareholder named above has the power (alone or, in the case of shares held
jointly with his or her spouse, together with his or her spouse) to direct the
voting of such shares.





<PAGE>




                                   EXHIBIT IV

                        OPINION OF BAKER & HOSTETLER LLP













<PAGE>















                          [____________________], 1997


Zions Bancorporation
One South Main Street, Suite 1380
Salt Lake City, Utah  84111

Val Cor Bancorporation, Inc.
350 West Montezuma Avenue
Cortez, Colorado  81321-2750

Valley National Bank of Cortez
350 West Montezuma Avenue
Cortez, Colorado  81321-2750

         Re:      Merger of Tri-State Finance Corporation With Val Cor
                  Bancorporation, Inc., In Exchange for Stock of Zions
                  Bancorporation; Merger of Valley National Bank of Cortez With
                  Tri-State Bank

Mesdames and Gentlemen:

         We are special counsel to Tri-State Finance Corporation, a Colorado
corporation (the "Company"), and its subsidiary, Tri-State Bank, a banking
corporation organized under the laws of the State of Colorado with its head
office located at Denver, County of Denver, State of Colorado (the "Bank"), in
connection with the merger (the "Holding Company Merger") of the Company with
Val Cor Bancorporation, Inc. ("Val Cor"), in exchange for which shareholders of
the Company will receive shares of the common stock of Zions Bancorporation
("Zions Bancorp") and cash, and the merger (the "Bank Merger") of the Bank with
Valley National Bank of Cortez ("Valley"), pursuant to an Agreement and Plan of
Reorganization dated September 23,


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[               ], 1997
Page 2


1997 (the "Agreement") and certain additional agreements whose execution is
contemplated in the Agreement, including the Agreement of Merger by and between
Val Cor and the Company (the "Holding Company Merger Agreement") and the
Agreement of Merger by and between the Bank and Valley (the "Bank Merger
Agreement") (the Agreement, the Holding Company Merger Agreement, and the Bank
Merger Agreement to be referred to collectively as the "Agreements").

         This opinion is provided to you pursuant to Section 4.2 of the
Agreement.

         In our capacity as special counsel, we have participated in the
preparation of a Registration Statement filed with the Securities and Exchange
Commission on Form S-4 covering the shares of Zions Bancorp stock to be issued
in connection with the Holding Company Merger (the "Registration Statement")
including the Prospectus/Proxy Statement for the shareholders of the Company
(the "Prospectus/Proxy Statement"). In addition, in rendering the opinions that
follow, we have examined the Agreements and the exhibits and schedules appended
thereto; the articles of incorporation and by-laws of the Company and the
articles of incorporation or association and by-laws of the Bank; the minutes of
certain meetings of the respective boards of directors of the Company and the
Bank; and such other corporate documents and corporate records of the Company
and the Bank as we have deemed necessary or appropriate for the purpose of
rendering the following opinions. In addition, we have interviewed officers of
the Company and the Bank and undertaken and performed such other procedures as
we have deemed necessary or appropriate for the purpose of rendering the
following opinions. In these regards, we have examined and relied upon
representations of Zions Bancorp, Val Cor, and Valley contained in the
Agreements, and, where we have deemed appropriate, representations or
certifications of officers or public officials.

         We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties other than the Company and the Bank had the corporate power and
authority to enter into and perform all obligations thereunder and, as to such
parties other than the Company and the Bank, we have also assumed the execution
and delivery of such documents and the validity and binding effect and
enforceability thereof. We have also assumed that the Agreements have not been
otherwise amended by oral or written agreement or by conduct of the parties
thereto. We have assumed that the certifications and representations dated
earlier than the date hereof on which we have expressed reliance herein continue
to remain accurate, insofar as material to our opinions, from such earlier date
through the date hereof.


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[               ], 1997
Page 3




         Based on the foregoing, and solely in reliance thereon, we are of the
opinion that:

         (a) Binding Obligations; Due Authorization. Each of the Agreements to
which it is a party has been duly authorized by all necessary corporate action
on the part of each of the Company and the Bank, has been duly executed and
delivered by each of the Company and the Bank, and constitutes a valid, legal,
and binding obligation of the Company and the Bank, enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, receivership, conservatorship, or
similar laws or judicial decisions relating to or affecting creditors' rights
generally or the rights of creditors, or of the FDIC as insurer, regulator,
conservator, or receiver, of banks the accounts of which are insured by the FDIC
in particular, or by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law) as to whose
availability we express no opinion. No other corporate proceedings on the part
of either the Company or the Bank are necessary to authorize any of the
Agreements to which it is a party or the carrying out of the transactions
contemplated thereby.

         (b) Compliance with Securities Laws. The Prospectus/Proxy Statement
complies on its face as to form in all material respects with the requirements
of the federal securities laws and published rules and regulations of the
Securities and Exchange Commission as of the date thereof.

         In connection with our participation in the preparation of the
Prospectus/Proxy Statement, we have not independently verified the accuracy,
completeness, or fairness of the statements contained therein or of documents
incorporated by reference therein, and we make no representation to you as to
the accuracy or completeness of statements of fact contained or incorporated by
reference in the Prospectus/Proxy Statement or the Registration Statement.
Nothing, however, has come to our attention that would lead us to believe that
the Prospectus/Proxy Statement as of its issue date or the date hereof, or the
Registration Statement as of the effective date or the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than the
financial statements and schedules and other financial and statistical data
included or incorporated by reference therein, as to which we make no statement)
or that any event has occurred which should have been set forth in an amendment
or supplement to the Prospectus/Proxy Statement or Registration Statement which
has not been set forth in such amendment or supplement.


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[               ], 1997
Page 4



         This opinion is given solely for your benefit in connection with the
transactions contemplated by the Agreements, and no other person or entity is
entitled to rely thereon, nor may copies be delivered or furnished to any other
party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior consent.

                                                     Respectfully submitted,


<PAGE>



                                    EXHIBIT V

                        OPINION OF OVERTON & FEELEY, P.C.


<PAGE>









                          [____________________], 1997


Zions Bancorporation
One South Main Street, Suite 1380
Salt Lake City, Utah  84111

Val Cor Bancorporation, Inc.
350 West Montezuma Avenue
Cortez, Colorado  81321-2750

Valley National Bank of Cortez
350 West Montezuma Avenue
Cortez, Colorado  81321-2750

         Re:      Merger of Tri-State Finance Corporation With Val Cor
                  Bancorporation, Inc., In Exchange for Stock of Zions
                  Bancorporation; Merger of Valley National Bank of Cortez With
                  Tri-State Bank

Mesdames and Gentlemen:

         We are counsel to Tri-State Finance Corporation, a Colorado corporation
(the "Company"), and its subsidiary, Tri-State Bank, a banking corporation
organized under the laws of the State of Colorado with its head office located
at Denver, County of Denver, State of Colorado (the "Bank"), in connection with
the merger (the "Holding Company Merger") of the Company with Val Cor
Bancorporation, Inc. ("Val Cor"), in exchange for which shareholders of the
Company will receive shares of the common stock of Zions Bancorporation ("Zions
Bancorp") and cash, and the merger (the "Bank Merger") of the Bank with Valley
National Bank of Cortez ("Valley"), pursuant to an Agreement and Plan of
Reorganization dated September 23,


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[               ], 1997
Page 2



1997 (the "Agreement") and certain additional agreements whose execution is
contemplated in the Agreement, including the Agreement of Merger by and between
Val Cor and the Company (the "Holding Company Merger Agreement") and the
Agreement of Merger by and between the Bank and Valley (the "Bank Merger
Agreement") (the Agreement, the Holding Company Merger Agreement, and the Bank
Merger Agreement to be referred to collectively as the "Agreements").

         This opinion is provided to you pursuant to Section 4.3 of the
Agreement.

         In rendering the opinions that follow, we have examined the Agreements
and the exhibits and schedules appended thereto; the articles of incorporation
and by-laws of the Company and the articles of incorporation or association and
by-laws of the Bank; the minutes of certain meetings of the respective boards of
directors of the Company and the Bank; and such other corporate documents and
corporate records of the Company and the Bank as we have deemed necessary or
appropriate for the purpose of rendering the following opinions. In addition, we
have interviewed officers of the Company and the Bank and undertaken and
performed such other procedures as we have deemed necessary or appropriate for
the purpose of rendering the following opinions. In these regards, we have
examined and relied upon representations of Zions Bancorp, Val Cor, and Valley
contained in the Agreements, and, where we have deemed appropriate,
representations or certifications of officers or public officials.

         We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties other than the Company and the Bank had the corporate power and
authority to enter into and perform all obligations thereunder and, as to such
parties other than the Company and the Bank, we have also assumed the execution
and delivery of such documents and the validity and binding effect and
enforceability thereof. We have also assumed that the Agreements have not been
otherwise amended by oral or written agreement or by conduct of the parties
thereto. We have assumed that the certifications and representations dated
earlier than the date hereof on which we have expressed reliance herein continue
to remain accurate, insofar as material to our opinions, from such earlier date
through the date hereof.


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[               ], 1997
Page 3





         Based on the foregoing, and solely in reliance thereon, we are of the
opinion that:

         (a)      Organization, Powers and Qualifications.

                  (i) The Company is a corporation which is duly organized,
validly existing and in good standing under the laws of the State of Colorado
and has all requisite corporate power and authority to own and operate its
properties and assets, to lease properties used in its business, and to carry on
its business as now conducted. The Company is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended. All outstanding
shares of capital stock of the Company have been duly and validly authorized and
issued, and are fully paid and non-assessable.

                  (ii) The Bank is duly organized, validly existing and in good
standing under the laws of the State of Colorado and has all requisite corporate
power and authority to own and operate its properties and assets, to lease
properties used in its business, and to carry on its business as now conducted.
The deposit accounts of the Bank are insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation (the "FDIC") and, to the best of our
knowledge, no proceedings for the termination of such insurance are pending or
threatened. All outstanding shares of capital stock of the Bank have been duly
and validly authorized and issued and are fully paid and non-assessable. All
issued and outstanding shares of the Bank are held of record by the Company
directly, free and clear of any adverse claims.

         (b) Execution and Performance of Agreements. Each of the Company and
the Bank has the corporate power and authority to execute, deliver, and perform
each of the Agreements to which it is a party and to carry out the terms thereof
and the transactions contemplated thereby.

         (c) Absence of Violations. To the best of our knowledge, neither the
Company nor the Bank is in violation of its articles of incorporation or its
bylaws, or any law, regulation, ordinance, order, or restriction imposed by the
United States, any state, municipality, or other political subdivision or agency
thereof, or any order of any court or other competent tribunal having
jurisdiction over it in respect of the conduct of its business or the ownership
of its properties, which, either individually or in the aggregate with all such
other violations, would materially and adversely affect the business,
operations, or condition (financial or otherwise) of the Company or the Bank or
the observance or performance by the Company or the Bank of the terms of any of
the Agreements to which it is a party.

         (d) Compliance with Corporate Documents and Agreements. Neither the
execution, delivery, or performance by either the Company or the Bank of any of
the Agreements to which it is a party nor the consummation of the transactions
contemplated therein will violate, conflict with, constitute a breach of or
default under the respective articles of incorporation or by-laws of


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[               ], 1997
Page 4




the Company or the Bank, or any agreement or instrument to which the Company or
the Bank is a party (or which is binding on either of them or its assets) or by
which the Company or the Bank is bound, and will not result in the creation of
any lien on, or security interest in, any of the assets of either of them.

         (e) Absence of Default. Except for those consents (including, but not
limited to, approvals, licenses, registrations, or declarations) that have been
obtained, the execution and delivery by the Company and the Bank of each of the
Agreements to which it is a party and consummation of the transactions
contemplated thereby do not require the approval or consent of any governmental
authority or third party. The execution and delivery by the Company and the Bank
of each of the Agreements to which it is a party, the consummation of the
transactions contemplated thereby, and the compliance with and fulfillment of
the terms thereof by the Company and the Bank will not require any
authorization, consent, approval, or exemption by any person which has not been
obtained or any notice or filing which has not been given or done.

         This opinion is given solely for your benefit in connection with the
transactions contemplated by the Agreements, and no other person or entity is
entitled to rely thereon, nor may copies be delivered or furnished to any other
party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior consent.

                                             Respectfully submitted,


<PAGE>







                                   EXHIBIT VI

                 OPINION OF COMPANY AND BANK LITIGATION COUNSEL


<PAGE>






















                          [____________________], 1997



Zions Bancorporation
One South Main Street, Suite 1380
Salt Lake City, Utah  84111

Val Cor Bancorporation, Inc.
350 West Montezuma Avenue
Cortez, Colorado  81321-2750

Valley National Bank of Cortez
350 West Montezuma Avenue
Cortez, Colorado  81321-2750

         Re:      Merger of Tri-State Finance Corporation With Val Cor
                  Bancorporation, Inc., In Exchange for Stock of Zions
                  Bancorporation; Merger of Valley National Bank of Cortez With
                  Tri-State Bank

Mesdames and Gentlemen:

         We are counsel to Tri-State Finance Corporation, a Colorado corporation
(the "Company"), and its subsidiary, Tri-State Bank, a banking corporation
organized under the laws of the State of Colorado with its head office located
at Denver, County of Denver, State of Colorado (the "Bank"), in connection with
the merger (the "Holding Company Merger") of the Company with Val Cor
Bancorporation, Inc. ("Val Cor"), in exchange for which shareholders of the
Company will receive shares of the common stock of Zions Bancorporation ("Zions
Bancorp") and cash, and the merger (the "Bank Merger") of the Bank with Valley
National Bank


<PAGE>

Zions Bancorporation

Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[____________________], 1997
Page 2



of Cortez ("Valley"), pursuant to an Agreement and Plan of Reorganization dated
September 23, 1997 (the "Agreement") and certain additional agreements whose
execution is contemplated in the Agreement, including the Agreement of Merger by
and between Val Cor and the Company (the "Holding Company Merger Agreement") and
the Agreement of Merger by and between the Bank and Valley (the "Bank Merger
Agreement") (the Agreement, the Holding Company Merger Agreement, and the Bank
Merger Agreement to be referred to collectively as the "Agreements"). We have
been requested by the Company and the Bank to furnish to you our opinion
pursuant to Section 4.4 of the Agreement. 

         In rendering the opinion that follows, we have examined the Agreements
and such other documents and records as we have deemed necessary or appropriate
for the purpose of rendering the following opinion. In addition, we have
interviewed officers of the Company and the Bank and undertaken and performed
such other procedures as we have deemed necessary or appropriate for the purpose
of rendering the following opinion. In these regards, we have examined and
relied upon representations of Zions Bancorp, Val Cor, and Valley contained in
the Agreements, and, where we have deemed appropriate, representations or
certifications of officers or public officials.

         We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. We have also assumed that the Agreements have not been otherwise amended
by oral or written agreement or by conduct of the parties thereto. We have
assumed that the certifications and representations dated earlier than the date
hereof on which we have expressed reliance herein continue to remain accurate,
insofar as material to our opinions, from such earlier date through the date
hereof.

         Based on the foregoing, and solely in reliance thereon, we are of the
opinion that: (a) there is no action, suit, or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or threatened,
against the Company or the Bank which might result in any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs, or business prospects of the Company or the Bank, or which might
materially and adversely affect the properties or assets thereof or which might
prevent, hinder or delay the consummation of the transactions contemplated in
the Agreements; and (b) all pending legal or governmental proceedings to which
the Company or the Bank is a party or to which any of its property or assets is
the subject, including ordinary routine litigation incidental to its business,
are, considered in the aggregate, not material.


<PAGE>

Zions Bancorporation

Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[____________________], 1997
Page 3

         This opinion is given solely for your benefit in connection with the
transactions contemplated by the Agreements, and no other person or entity is
entitled to rely thereon, nor may copies be delivered or furnished to any other
party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior consent.

                                                     Respectfully submitted,


<PAGE>







                                   EXHIBIT VII

                              EMPLOYMENT AGREEMENT


<PAGE>


                              EMPLOYMENT AGREEMENT


         This EMPLOYMENT AGREEMENT (the "Agreement") made and entered into this
[____] day of [___], 1997, by and between RICHARD C. TUCKER ("Executive") and
VALLEY NATIONAL BANK OF CORTEZ, a national banking association organized under
the laws of the United States ("Resulting Bank")

                          W I T N E S S E T H  T H A T :

         WHEREAS, the Agreement and Plan of Reorganization (the "Plan") dated as
of September 23, 1997 by and among Zions Bancorporation, a Utah corporation
having its principal office in Salt Lake City, Utah, Val Cor Bancorporation,
Inc., a Colorado corporation having its principal office in Cortez, Colorado,
Resulting Bank, Tri-State Finance Corporation, a Colorado corporation having its
principal office in Denver, Colorado, and Tri-State Bank, a banking corporation
organized under the laws of the State of Colorado (the "Bank"), provides that
the Bank will be merged with and into Resulting Bank;

         WHEREAS, Executive is Chairman, President and Chief Executive Officer
of the Bank;

         WHEREAS, Resulting Bank desires to secure the employment of Executive
upon consummation of the transactions contemplated in the Plan;

         WHEREAS, Executive is desirous of entering into the Agreement for such
periods and upon the terms and conditions set forth herein; and

         WHEREAS, to assist in achieving the objectives of the transactions
described in the Plan, section 4.10 of the Plan contemplates that Executive will
enter into an employment agreement as a condition to the consummation of the
transactions described therein.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements hereinafter set forth, the parties agree as follows:

         1.       Employment; Responsibilities and Duties.

         (a) Resulting Bank hereby agrees to employ Executive, and Executive
hereby agrees to serve as [__________] of Resulting Bank and of any depository
institution which is successor-in-interest thereto ("Resulting Bank" hereafter
to include any depository institution which is successor-in-interest thereto)
during the Term of Employment. Executive shall have such duties,
responsibilities, and authority as shall be set forth in the bylaws of Resulting
Bank on the date of this Agreement or as may otherwise be determined by
Resulting Bank.


<PAGE>


         (b) Executive shall devote his full working time and best efforts to
the performance of his responsibilities and duties hereunder and to the
retention of the customer relationships to which the Bank has been a party prior
to the date of this Agreement. During the Term of Employment, Executive shall
not, without the prior written consent of the Board of Directors of Resulting
Bank, render services as an employee, independent contractor, or otherwise,
whether or not compensated, to any person or entity other than Resulting Bank or
its affiliates; provided that Executive may, where involvement in such
activities does not individually or in the aggregate significantly interfere
with the performance by Executive of his duties or violate the provisions of
section 4 hereof, (i) render services to charitable organizations, (ii) manage
his personal investments, and (iii) with the prior permission of the Board of
Directors of Resulting Bank, hold such other directorships or part-time academic
appointments or have such other business affiliations as would otherwise be
prohibited under this section 1.

         2.  Term of Employment.

         (a) The term of this Agreement ("Term of Employment") shall be the
period commencing on the date hereof (the "Commencement Date") and continuing
until the Termination Date, which shall mean the earliest to occur of:

                  (i) the first anniversary of the Commencement Date, unless the
Term of Employment shall be extended by mutual written agreement of Executive
and Resulting Bank;

                  (ii) the death of Executive;

                  (iii) Executive's inability to perform his duties hereunder,
as a result of physical or mental disability as reasonably determined by the
personal physician of Executive, for a period of at least 180 consecutive days
or for at least 180 days during any period of twelve consecutive months during
the Term of Employment; or

                  (iv) the discharge of Executive by Resulting Bank "for cause,"
which shall mean one or more of the following:

                           (A) any willful or gross misconduct by Executive with
respect to the business and affairs of Resulting Bank, or with respect to any of
its affiliates for which Executive is assigned material responsibilities or
duties;

                           (B) the conviction of Executive of a felony (after
the earlier of the expiration of any applicable appeal period without perfection
of an appeal by Executive or the denial of any appeal as to which no further
appeal or review is available to Executive) whether or not committed in the
course of his employment by Resulting Bank;


                                      -2-


<PAGE>


                           (C) Executive's willful neglect, failure, or refusal
to carry out his duties hereunder in a reasonable manner; or

                           (D) the breach by Executive of any representation or
warranty in section 6(a) hereof or of any agreement contained in section 1, 4,
5, or 6(b) hereof, which breach is material and adverse to Resulting Bank or any
of its affiliates for which Executive is assigned material responsibilities or
duties; or

                  (v) Executive's resignation from his position as [___________]
of Resulting Bank; or

                  (vi) the termination of Executive's employment by Resulting
Bank "without cause," which shall be for any reason other than those set forth
in subsections (i), (ii), (iii), or (iv) of this section 2(a), at any time, upon
the thirtieth day following notice to Executive.

         (b) In the event that the Term of Employment shall be terminated for
any reason other than that set forth in section 2(a)(vi) hereof, Executive shall
be entitled to receive, upon the occurrence of any such event:

                  (i) any salary (as hereinafter defined) payable pursuant to
section 3(a)(i) hereof which shall have accrued as of the Termination Date; and

                  (ii) such rights as Executive shall have accrued as of the
Termination Date under the terms of any plans or arrangements in which he
participates pursuant to section 3(b) hereof, any right to reimbursement for
expenses accrued as of the Termination Date payable pursuant to section 3(e)
hereof, and the right to receive the cash equivalent of paid annual leave and
sick leave accrued as of the Termination Date pursuant to section 3(c) hereof.

         (c) In the event that the Term of Employment shall be terminated for
the reason set forth in section 2(a)(vi) hereof, Executive shall be entitled to
receive:

                  (i) for the period commencing on the date immediately
following the Termination Date and ending upon and including the first
anniversary of the Commencement Date, salary payable at the rate established
pursuant to section 3(a)(i) hereof, in a manner consistent with the normal
payroll practices of Resulting Bank with respect to executive personnel as
presently in effect or as they may be modified by Resulting Bank from time to
time; and

                  (ii) such rights as Executive may have accrued as of the
Termination Date under the terms of any plans or arrangements in which he
participates pursuant to section 3(b) hereof, any right to reimbursement for
expenses accrued as of the Termination Date payable pursuant to section 3(e)
hereof, and the right to receive the cash equivalent of paid annual leave and
sick leave accrued as of the Termination Date pursuant to section 3(c) hereof.


                                      -3-


<PAGE>


         (d) For the period of one year after the first anniversary of the
Commencement Date, Executive shall serve as a paid consultant of Resulting Bank,
with duties that shall include efforts to retain the customer relationships of
the Resulting Bank to which Executive devoted attention during the Term of
Employment. Executive shall devote a minimum of the equivalent of one day per
week to the discharge of his responsibilities under this paragraph. In return
for performing these consultancy services, Executive shall be entitled to
receive cash compensation at a rate of $60,000 per annum; Executive shall be
entitled to no other compensation or benefits from the Resulting Bank in return
for the performance of these consultancy services.

         3. Compensation. For the services to be performed by Executive for
Resulting Bank under this Agreement, Executive shall be compensated in the
following manner:

         (a) Salary.

                  (i) During the Term of Employment Resulting Bank shall pay
Executive a salary which shall not be less than the aggregate salary paid to
Executive by the Bank as of June 30, 1997. Salary shall be payable in accordance
with the normal payroll practices of Resulting Bank with respect to executive
personnel as presently in effect or as they may be modified by Resulting Bank
from time to time.

                  (ii) During the Term of Employment Executive shall be eligible
to be considered for salary increases, upon review, in accordance with the
compensation policies of Zions Bancorp with respect to executive personnel as
presently in effect or as they may be modified by Zions Bancorp from time to
time.

         (b) Employee Benefit Plans or Arrangements. During the Term of
Employment, Executive shall be entitled to participate in all employee benefit
plans of Zions Bancorp, as presently in effect or as they may be modified by
Zions Bancorp from time to time, under such terms as may be applicable to
officers of Executive's rank employed by Zions Bancorp or its subsidiaries,
including, without limitation, plans providing retirement benefits, medical
insurance, life insurance, disability insurance, and accidental death or
dismemberment insurance.

         (c) Vacation and Sick Leave. During the Term of Employment, Executive
shall be entitled to paid annual vacation periods and sick leave in accordance
with the policies of Zions Bancorp as in effect as of the Commencement Date or
as may be modified by Zions Bancorp from time to time as may be applicable to
officers of Executive's rank employed by Zions Bancorp or its subsidiaries, but
in no event less than that provided to Executive by the Bank at June 30, 1997.


                                      -4-

<PAGE>


         (d) Withholding. All compensation to be paid to Executive hereunder
shall be subject to required withholding and other taxes.

         (e) Expenses. During the Term of Employment, Executive shall be
reimbursed for reasonable travel and other expenses incurred or paid by
Executive in connection with the performance of his services under this
Agreement, upon presentation of expense statements or vouchers or such other
supporting information as may from time to time be requested, in accordance with
such policies of Zions Bancorp as are in effect as of the Commencement Date and
as may be modified by Zions Bancorp from time to time, under such terms as may
be applicable to officers of Executive's rank employed by Zions Bancorp or its
subsidiaries.

         4. Confidential Business Information; Non-Competition.

         (a) Executive acknowledges that certain business methods, creative
techniques, and technical data of Zions Bancorp and Resulting Bank and their
affiliates and the like are deemed by Resulting Bank to be and are in fact
confidential business information either of Zions Bancorp or Resulting Bank or
their affiliates or are entrusted to third parties. Such confidential
information includes but is not limited to procedures, methods, sales
relationships developed while in the service of Resulting Bank or its
affiliates, knowledge of customers and their requirements, marketing plans,
marketing information, studies, forecasts, and surveys, competitive analyses,
mailing and marketing lists, new business proposals, lists of vendors,
consultants, and other persons who render service or provide material to Zions
Bancorp or Resulting Bank or their affiliates, and compositions, ideas, plans,
and methods belonging to or related to the affairs of Zions Bancorp or Resulting
Bank or their affiliates. In this regard, Resulting Bank asserts proprietary
rights in all of its business information and that of its affiliates except for
such information as is clearly in the public domain. Notwithstanding the
foregoing, information that would be generally known or available to persons
skilled in Executive's fields shall be considered to be "clearly in the public
domain" for the purposes of the preceding sentence. Executive agrees that he
will not disclose or divulge to any third party, except as may be required by
his duties hereunder, by law, regulation, or order of a court or government
authority, or as directed by Resulting Bank, nor shall he use to the detriment
of Resulting Bank or its affiliates or use in any business or on behalf of any
business competitive with or substantially similar to any business of Zions
Bancorp or Resulting Bank or their affiliates, any confidential business
information obtained during the course of his employment by Resulting Bank. The
foregoing shall not be construed as restricting Executive from disclosing such
information to the employees of Zions Bancorp or Resulting Bank or their
affiliates.

         (b) Executive hereby agrees that from the Commencement Date until the
second anniversary of the Commencement Date, Executive will not (i) engage in
the banking business other than on behalf of Zions Bancorp or Resulting Bank or
their affiliates within the Market Area (as hereinafter defined), (ii) directly
or indirectly own, manage, operate, control, be


                                      -5-

<PAGE>


employed by, or provide management or consulting services in any capacity to any
firm, corporation, or other entity (other than Zions Bancorp or Resulting Bank
or their affiliates) engaged in the banking business in the Market Area, or
(iii) directly or indirectly solicit or otherwise intentionally cause any
employee, officer, or member of the respective Boards of Directors of Resulting
Bank or any of its affiliates to engage in any action prohibited under (i) or
(ii) of this section 4(b); provided that the ownership by Executive as an
investor of not more than five percent of the outstanding shares of stock of any
corporation whose stock is listed for trading on any securities exchange or is
quoted on the automated quotation system of the National Association of
Securities Dealers, Inc., or the shares of any investment company as defined in
section 3 of the Investment Company Act of 1940, as amended, shall not in itself
constitute a violation of Executive's obligations under this section 4(b).

         (c) Executive acknowledges and agrees that irreparable injury will
result to Resulting Bank in the event of a breach of any of the provisions of
this section 4 (the "Designated Provisions") and that Resulting Bank will have
no adequate remedy at law with respect thereto. Accordingly, in the event of a
material breach of any Designated Provision, and in addition to any other legal
or equitable remedy Resulting Bank may have, Resulting Bank shall be entitled to
the entry of a preliminary and permanent injunction (including, without
limitation, specific performance) by a court of competent jurisdiction in Salt
Lake County, Utah, Denver County, Colorado, or elsewhere, to restrain the
violation or breach thereof by Executive or any affiliates, agents, or any other
persons acting for or with Executive in any capacity whatsoever, and Executive
submits to the jurisdiction of such court in any such action.

         (d) It is the desire and intent of the parties that the provisions of
this section 4 shall be enforced to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular provision of this section 4 shall be
adjudicated to be invalid or unenforceable, such provision shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made. In
addition, should any court determine that the provisions of this section 4 shall
be unenforceable with respect to scope, duration, or geographic area, such court
shall be empowered to substitute, to the extent enforceable, provisions similar
hereto or other provisions so as to provide to Resulting Bank, to the fullest
extent permitted by applicable law, the benefits intended by this section 4.

         (e) As used herein, "Market Area" shall mean the Colorado Counties of
Adams, Arapahoe, Boulder, Denver, Douglas, Jefferson, and Weld.


                                      -6-

<PAGE>


         5. Life Insurance. In light of the unusual abilities and experience of
Executive, Resulting Bank in its discretion may apply for and procure as owner
and for its own benefit insurance on the life of Executive, in such amount and
in such form as Resulting Bank may choose. Resulting Bank shall make all
payments for such insurance and shall receive all benefits from it. Executive
shall have no interest whatsoever in any such policy or policies but, at the
request of Resulting Bank, shall submit to medical examinations and supply such
information and execute such documents as may reasonably be required by the
insurance company or companies to which Resulting Bank has applied for
insurance.

         6.  Representations and Warranties.

         (a) Executive represents and warrants to Resulting Bank that his
execution, delivery, and performance of this Agreement will not result in or
constitute a breach of or conflict with any term, covenant, condition, or
provision of any commitment, contract, or other agreement or instrument,
including, without limitation, any other employment agreement, to which
Executive is or has been a party.

         (b) Executive shall indemnify, defend, and hold harmless Resulting Bank
for, from, and against any and all losses, claims, suits, damages, expenses, or
liabilities, including court costs and counsel fees, which Resulting Bank has
incurred or to which Resulting Bank may become subject, insofar as such losses,
claims, suits, damages, expenses, liabilities, costs, or fees arise out of or
are based upon any failure of any representation or warranty of Executive in
section 6(a) hereof to be true and correct when made.

         7. Notices. All notices, consents, waivers, or other communications
which are required or permitted hereunder shall be in writing and deemed to have
been duly given if delivered personally or by messenger, transmitted by telex or
telegram, by express courier, or sent by registered or certified mail, return
receipt requested, postage prepaid. All communications shall be addressed to the
appropriate address of each party as follows:

If to Resulting Bank:

         [_______________________]
         616 East Speer Boulevard
         Denver, Colorado  80203

         Attention:        Chief Executive Officer



                                      -7-

<PAGE>

With a required copy to:

         Brian D. Alprin, Esq.
         Duane, Morris & Heckscher LLP
         1667 K Street, N.W., Suite 700
         Washington, D.C.  20006

If to Executive:

         Mr. Richard C. Tucker
         [                           ]
         [                           ]

All such notices shall be deemed to have been given on the date delivered,
transmitted, or mailed in the manner provided above.

         8. Assignment. Neither party may assign this Agreement or any rights or
obligations hereunder without the consent of the other party.

         9. Governing Law. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Utah, without giving effect
to the principles of conflict of law thereof. The parties hereby designate Salt
Lake County, Utah and Denver County, Colorado to be proper jurisdictions and
venues for any suit or action arising out of this Agreement. Each of the parties
consents to personal jurisdiction in each of such venues for such a proceeding
and agrees that he or it may be served with process in any action with respect
to this Agreement or the transactions contemplated thereby by certified or
registered mail, return receipt requested, or to its registered agent for
service of process in the state of Utah or Colorado. Each of the parties
irrevocably and unconditionally waives and agrees, to the fullest extent
permitted by law, not to plead any objection that it may now or hereafter have
to the laying of venue or the convenience of the forum of any action or claim
with respect to this Agreement or the transactions contemplated thereby brought
in the courts aforesaid.

         10. Entire Agreement. This Agreement constitutes the entire
understanding between Resulting Bank and Executive relating to the subject
matter hereof. Any previous agreements or understandings between the parties
hereto or between Executive and the Bank or any of its affiliates or Resulting
Bank or any of its affiliates regarding the subject matter hereof, including
without limitation the terms and conditions of employment, compensation,
benefits, retirement, competition following employment, and the like, are merged
into and superseded by this Agreement. Neither this Agreement nor any provisions
hereof can be modified, changed, discharged, or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge, or termination is sought.


                                      -8-

<PAGE>


         11. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal, or unenforceable for any reason
whatsoever:

         (a) the validity, legality, and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of any
section of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable) shall not in any way be affected or impaired thereby;
and

         (b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any section of this Agreement
containing any such provisions held to be invalid, illegal, or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal, or unenforceable.

         12. Arbitration. Subject to the right of each party to seek specific
performance (which right shall not be subject to arbitration), if a dispute
arises out of or related to this Agreement, or the breach thereof, such dispute
shall be referred to arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"). A dispute subject to the
provisions of this section will exist if either party notifies the other party
in writing that a dispute subject to arbitration exists and states, with
reasonable specificity, the issue subject to arbitration (the "Arbitration
Notice"). The parties agree that, after the issuance of the Arbitration Notice,
the parties will try in good faith to resolve the dispute by mediation in
accordance with the Commercial Rules of Arbitration of AAA between the date of
the issuance of the Arbitration Notice and the date the dispute is set for
arbitration. If the dispute is not settled by the date set for arbitration, then
any controversy or claim arising out of this Agreement or the breach hereof
shall be resolved by binding arbitration and judgment upon any award rendered by
arbitrator(s) may be entered in a court having jurisdiction. Any person serving
as a mediator or arbitrator must have at least ten years' experience in
resolving commercial disputes through arbitration. In the event any claim or
dispute involves an amount in excess of $100,000, either party may request that
the matter be heard by a panel of three arbitrators; otherwise all matters
subject to arbitration shall be heard and resolved by a single arbitrator. The
arbitrator shall have the same power to compel the attendance of witnesses and
to order the production of documents or other materials and to enforce discovery
as could be exercised by a United States District Court judge sitting in the
District of Colorado. In the event of any arbitration, each party shall have a
reasonable right to conduct discovery to the same extent permitted by the
Federal Rules of Civil Procedure, provided that such discovery shall be
concluded within ninety days after the date the matter is set for arbitration.
Any provision in this Agreement to the contrary notwithstanding, this section
shall be governed by the Federal Arbitration Act and the parties have entered
into this Agreement pursuant to such Act.


                                      -9-

<PAGE>


         13. Costs of Litigation. In the event litigation is commenced to
enforce any of the provisions hereof, or to obtain declaratory relief in
connection with any of the provisions hereof, the prevailing party shall be
entitled to recover reasonable attorney's fees. In the event this Agreement is
asserted in any litigation as a defense to any liability, claim, demand, action,
cause of action, or right asserted in such litigation, the party prevailing on
the issue of that defense shall be entitled to recovery of reasonable attorney's
fees.

         14. Affiliation. A company will be deemed to be "affiliated" with Zions
Bancorp, Resulting Bank, or the Bank according to the definition of "Affiliate"
set forth in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended.

         15. Headings. The section and subsection headings herein have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof.

         IN WITNESS WHEREOF, the parties hereto executed or caused this
Agreement to be executed as of the day and year first above written.

                                           VALLEY NATIONAL BANK OF CORTEZ



Attest:________________________            By:_______________________________
                                                      R. Lance Michaels
                                                 Executive Vice President and
                                                    Chief Executive Officer

                                           RICHARD C. TUCKER



Witness: ______________________            __________________________________




                                      -10-



<PAGE>



                                  EXHIBIT VIII

                    OPINION OF DUANE, MORRIS & HECKSCHER LLP


<PAGE>





                          [____________________], 1997



Tri-State Finance Corporation
616 East Speer Boulevard
Denver, Colorado  80203

Tri-State Bank
616 East Speer Boulevard
Denver, Colorado  80203


         Re:      Merger of Tri-State Finance Corporation With Val Cor
                  Bancorporation, Inc., In Exchange for Stock of Zions
                  Bancorporation

Mesdames and Gentlemen:

         We are special counsel to Zions Bancorporation, a corporation organized
under the laws of the State of Utah with its head office located at Salt Lake
City, County of Salt Lake, State of Utah ("Zions Bancorp"), its wholly-owned
subsidiary, Val Cor Bancorporation, Inc., a corporation organized under the laws
of the State of Colorado with its head office located at Cortez, County of
Montezuma, State of Colorado ("Val Cor"), and its subsidiary, Valley National
Bank of Cortez, a national banking association organized under the laws of the
United States with its head office located at Cortez, County of Montezuma, State
of Colorado ("Valley"), in connection with the merger (the "Holding Company
Merger") of Tri-State Finance Corporation, a corporation organized under the
laws of the State of Colorado with its head office 

                                      -1-

<PAGE>


Tri-State Finance Corporation
Tri-State Bank
[____________________], 1997
Page 2




located at Denver, County of Denver, State of Colorado (the "Company"), with and
into Val Cor in exchange for which shareholders of the Company will receive
shares of the common stock of Zions Bancorp and cash pursuant to an Agreement
and Plan of Reorganization dated September 23, 1997 (the "Agreement") and an
Agreement of Merger dated as of [            ], 1997 (the "Merger Agreement"),
and in connection with the merger (the "Bank Merger") of Tri-State Bank, a
banking corporation organized under the laws of the State of Colorado, with its
head office located at Denver, County of Denver, State of Colorado and a
wholly-owned subsidiary of the Company (the "Bank"), with Valley pursuant to the
Agreement and an Agreement of Merger dated as of [            ], 1997 (the "Bank
Merger Agreement") (the Agreement, the Merger Agreement, and the Bank Merger
Agreement to be referred to collectively as the "Agreements").


         This opinion is provided to you pursuant to Section 5.3 of the
Agreement.

         In our capacity as special counsel, we have participated in the
preparation of a Registration Statement filed with the Securities and Exchange
Commission on Form S-4 covering the shares of Zions Bancorp stock to be issued
in connection with the Holding Company Merger (the "Registration Statement")
including the Prospectus/Proxy Statement for the shareholders of the Company
(the "Prospectus/Proxy Statement"). In addition, in rendering the opinions that
follow, we have examined executed copies of the Agreements and the exhibits and
schedules appended thereto; the articles of incorporation or association and
by-laws of Zions Bancorp, Val Cor, and Valley; the minutes of certain meetings
of the board of directors of Zions Bancorp, Val Cor, and Valley; and such other
corporate documents and corporate records of Zions Bancorp, Val Cor, and Valley
as we have deemed necessary or appropriate for the purpose of rendering the
following opinions. We have also examined [set forth regulatory approvals,
consents and waivers]. In addition, we have interviewed officers of Zions
Bancorp, Val Cor, and Valley and undertaken and performed such other procedures
as we have deemed necessary or appropriate for the purpose of rendering the
following opinions. In these regards, we have examined and relied upon
representations of the Company and the Bank contained in the Agreements, and,
where we have deemed appropriate, representations or certifications of officers
or public officials.

         We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties other than Zions Bancorp, Val Cor, and Valley had the corporate power
and authority to enter into and perform all obligations thereunder and, as to
such parties other than Zions Bancorp, Val Cor, and Valley, we have also assumed
the execution


                                      -2-

<PAGE>


Tri-State Finance Corporation
Tri-State Bank
[____________________], 1997
Page 3


and delivery of such documents and the validity and binding effect and
enforceability thereof. We have also assumed that the Agreements have not been
otherwise amended by oral or written agreement or by conduct of the parties
thereto. We have assumed that the certifications and representations dated
earlier than the date hereof on which we have expressed reliance herein continue
to remain accurate, insofar as material to our opinions, from such earlier date
through the date hereof. In rendering the opinion set forth in paragraph (e)
hereof, we have assumed that neither the Company nor the Bank is subject to any
order or directive from, or memorandum of understanding or similar supervisory
agreement entered into with, any bank regulatory authority which would
necessitate the receipt of approvals or consents from any such bank regulatory
authority prior to consummation of the transactions contemplated in the
Agreements other than those approvals and consents contemplated in the Agreement
and Plan of Reorganization and those generally applicable to such transactions.

         Based on the foregoing, and solely in reliance thereon, we are of the
opinion that:

         (a) Organization, Powers and Qualifications.

                  (i) Zions Bancorp is a corporation which is duly organized,
validly existing, and in good standing under the laws of the State of Utah and
has the corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business
as now conducted.

                  (ii) Val Cor is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Colorado and has
the corporate power and authority to own and operate its properties and assets,
to lease properties used in its business, and to carry on its business as now
conducted.

                  (iii) Valley is a national banking association which is duly
organized, validly existing, and in good standing under the laws of the United
States and has the corporate power and authority to own and operate its
properties and assets, to lease properties used in its business, and to carry on
its business as now conducted. The deposit accounts of Valley are insured by the
Bank Insurance Fund of the Federal Deposit Insurance Corporation and, to the
best of our knowledge, no proceedings for the termination of such insurance are
pending or threatened.

         (b) Execution and Performance of Agreements. Each of Zions Bancorp, Val
Cor, and Valley has the corporate power and authority to execute, deliver, and
perform each of the Agreements to which it is a party and to carry out the terms
thereof and the transactions contemplated thereby.



<PAGE>

Tri-State Finance Corporation
Tri-State Bank
[____________________], 1997
Page 4



         (c) Compliance with Corporate Documents. Neither the execution,
delivery, or performance by Zions Bancorp, Val Cor, or Valley of the Agreements
nor the consummation of the transactions contemplated therein will violate,
conflict with, or constitute a breach of or default under the respective
articles of incorporation or association or by-laws of Zions Bancorp, Val Cor,
or Valley.

         (d) Binding Obligations; Due Authorization. Each of the Agreements to
which it is a party has been duly authorized by all necessary corporate action
on the part of each of Zions Bancorp, Val Cor, and Valley, has been duly
executed and delivered by each of Zions Bancorp, Val Cor, and Valley, and
constitutes a valid, legal, and binding obligation of Zions Bancorp, Val Cor, or
Valley, as the case may be, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship, or similar laws or judicial decisions
relating to or affecting creditors' rights generally or the rights of creditors,
or of the FDIC as insurer, regulator, conservator or receiver, of banks the
accounts of which are insured by the FDIC in particular, or by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law) as to whose availability we express no opinion. No other
corporate proceedings on the part of any of Zions Bancorp, Val Cor, or Valley
are necessary to authorize any of the Agreements to which it is a party or the
carrying out of the transactions contemplated thereby.

         (e) Regulatory Approvals. All approvals or waivers required to be
obtained from the Federal Reserve Bank of San Francisco, the Board of Governors
of the Federal Reserve System, the Comptroller of the Currency, the Colorado
Division of Banking, and the Department of Financial Institutions of the State
of Utah to consummate the transactions contemplated by the Agreement have been
obtained. Except for those approvals or waivers, the execution and delivery by
Zions Bancorp, Val Cor, and Valley of each of the Agreements to which it is a
party and consummation of the transactions contemplated thereby do not require
the approval or consent of any bank regulatory authority.

         (f) Issuance of Zions Bancorp Common Stock. The shares of the Common
Stock of Zions Bancorp, no par value, to be issued by Zions Bancorp pursuant to
the Agreement and the Holding Company Merger Agreement, when issued pursuant to
and in accordance with the Agreement and the Holding Company Merger Agreement,
will be duly authorized and legally issued, fully paid, and non-assessable.

         (g) Compliance with Securities Laws.


<PAGE>

Tri-State Finance Corporation
Tri-State Bank
[____________________], 1997
Page 5




                  (i) The Registration Statement has become effective under the
Securities Act of 1933, as amended (the "Act"), and, to the best of our
knowledge, no stop order proceedings with respect thereto have been instituted
or are pending or threatened under the Act with respect to the Registration
Statement.

                  (ii) The Registration Statement complies on its face as to
form in all material respects with the requirements of the federal securities
laws and published rules and regulations of the Securities and Exchange
Commission as of the date thereof.

         In connection with our participation in the preparation of the
Registration Statement, we have not independently verified the accuracy,
completeness, or fairness of the statements contained therein or of documents
incorporated by reference therein, and we make no representation to you as to
the accuracy or completeness of statements of fact contained or incorporated by
reference in the Registration Statement or the Prospectus/Proxy Statement.
Nothing, however, has come to our attention that would lead us to believe that
the Registration Statement as of the effective date or the date hereof, or the
Prospectus/Proxy Statement as of the issue date or the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than the
financial statements and schedules and other financial and statistical data
included or incorporated by reference therein, as to which we make no statement)
or that any event has occurred which should have been set forth in an amendment
or supplement to the Registration Statement or Prospectus/Proxy Statement and
which has not been set forth in such amendment or supplement.

         This opinion is given to you for your sole benefit in connection with
the transactions contemplated in the Agreements, and no other person or entity
is entitled to rely thereon, nor may copies be delivered or furnished to any
other party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior written consent.


                                            Very truly yours,


<PAGE>




                                    EXHIBIT 5

                    OPINION OF DUANE, MORRIS & HECKSCHER LLP


                          Duane, Morris & Heckscher LLP
                         1667 K Street, N.W., Suite 700
                           Washington, D.C. 20006-1608
                                 (202) 776-7800



                                December 22, 1997



Zions Bancorporation
Suite 1380
One South Main
Salt Lake City, Utah  84111

Gentlemen:

         We have acted as counsel to Zions Bancorporation ("Zions") in
connection with the Agreement and Plan of Reorganization dated as of September
23, 1997, among Tri-State Finance Corporation (the "Company"), Tri-State Bank
(the "Bank"), Zions, Val Cor Bancorporation, Inc. ("Val Cor"), and Valley
National Bank of Cortez ("Valley"), a related Plan of Merger between the Company
and Val Cor, and a related Plan of Merger between the Bank and Valley
(collectively, the "Plan of Reorganization"), whereby the Company will be merged
into Val Cor, with Val Cor being the surviving corporation (the "Holding Company
Merger") and the Bank will be merged into Valley, with Valley being the
surviving entity (the "Bank Merger"; collectively the "Reorganization"). Upon
consummation of the Reorganization, the holders of each outstanding share of
Company Common Stock will receive, in exchange for each share of Company Common
Stock, shares of Zions Common Stock, no par value ("Zions Common Stock"). Upon
the effective date of the Reorganization, the shares of Company Common Stock
will be canceled and immediately converted into the right for holders of Company
Common Stock to receive, in exchange for each share of Company Common Stock,
that number of shares of Zions Common Stock calculated by dividing the Merger
Consideration of 710,000 shares of Zions Common Stock by the total number of
shares of Company Common Stock issued and outstanding as of the Effective Date
of the Reorganization.

         We are also acting as counsel to Zions in connection with the
Registration Statement on Form S-4 (the "Registration Statement") to be filed by
Zions with the Securities and Exchange Commission for the purpose of registering
under the Securities Act of 1933, as amended, the aggregate maximum of 710,000
shares of Zions Common Stock into which outstanding Company Common Stock will be
converted upon effectiveness of the Reorganization. This opinion is being
furnished for the purpose of being filed as an exhibit to the Registration
Statement.


<PAGE>


Zions Bancorporation
December 22, 1997
Page 2




         In connection with this opinion, we have examined, among other things:

         (1)      an executed copy of the Plan of Reorganization;

         (2)      a copy certified to our satisfaction of the Restated Articles
                  of Incorporation of Zions as in effect on the date hereof;

         (3)      copies certified to our satisfaction of resolutions adopted by
                  the Board of Directors of Zions on September 19, 1997,
                  including resolutions approving the Plan of Reorganization;
                  and

         (4)      such other documents, corporate proceedings, and statutes as
                  we considered necessary to enable us to furnish this opinion.

         We have assumed for the purpose of this opinion that:

         (1)      the Plan of Reorganization has been duly and validly
                  authorized, executed, and delivered by the Company and the
                  Bank and such authorization remains fully effective and has
                  not been revised, superseded or rescinded as of the date of
                  this opinion; and

         (2)      the Reorganization will be consummated in accordance with the
                  terms of the Plan of Reorganization.

         We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties other than Zions, Val Cor, Valley, the Company, and the Bank had the
corporate power and authority to enter into and perform all obligations
thereunder and, as to such parties, we have also assumed the execution and
delivery of such documents and the validity and binding effect and
enforceability thereof. We have also assumed that the Plan of Reorganization has
not been otherwise amended by oral or written agreement or by conduct of the
parties thereto. We have assumed that the certifications and representations
dated earlier than the date hereof on which we have expressed reliance herein
continue to remain accurate, insofar as material to our opinions, from such
earlier date through the date hereof.

         Based upon the foregoing, we are of the opinion that the shares of
Zions Common Stock into which the outstanding shares of Company Common Stock
will be converted in the Reorganization will, when issued in accordance with the
terms of the Plan of Reorganization, be duly authorized, validly issued, fully
paid and nonassessable shares of Zions Common Stock.


<PAGE>


Zions Bancorporation
December 22, 1997
Page 3



         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Opinions" in Proxy Statement/Prospectus forming a part of the Registration
Statement.

                                               Very truly yours,


                                               DUANE, MORRIS & HECKSCHER LLP





                                  EXHIBIT 23.1


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


The Board of Directors
Zions Bancorporation:


We consent to the use of our report dated January 16, 1997 with respect to the
consolidated financial statements of Zions Bancorporation as of December 31,
1996 and 1995, and for each of the years in the three-year period ended December
31, 1996 incorporated herein by reference, and to the reference to our firm
under the heading "Experts" in the prospectus.


                                             /s/ KPMG PEAT MARWICK LLP


                                             KPMG PEAT MARWICK LLP

Salt Lake City, Utah
December 24, 1997







                                  EXHIBIT 23.2


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors
Tri-State Finance Corporation


We consent to the use in the registration statement on Form S-4 of our report
dated January 24, 1997, with respect to the consolidated balance sheets of
TRI-STATE FINANCE CORPORATION as of December 31, 1996, and the related
consolidated statements of income, stockholders' equity and cash flows for the
year then ended

                                            /s/ Baird, Kurtz & Dobson

                                            BAIRD, KURTZ & DOBSON

December 22, 1997







                                  EXHIBIT 23.3


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-4 of our
report dated January 13, 1996, with respect to the consolidated financial
statements of Tri-State Finance Corporation and subsidiary for the year ending
December 31, 1995. We also consent to the reference to our firm under the
heading "Experts" in the prospectus.


                                            /s/ McGladrey & Pullen LLP

                                            McGLADREY & PULLEN LLP

Charlotte, North Carolina
December 22, 1997






                                  EXHIBIT 23.4


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-4 of our
report dated April 21, 1995 with respect to the consolidated statements of
income, stockholder's equity and cash flows of Tri-State Finance Corporation and
subsidiary for the year ended December 31, 1994. We also consent to the
reference to our firm under the heading "Experts" in the registration statement.


                                            /s/ KPMG Peat Marwick LLP

                                            KPMG PEAT MARWICK LLP

Denver, Colorado
December 24, 1997







                                  EXHIBIT 23.5


                      CONSENT OF THE WALLACH COMPANY, INC.

                               December 22, 1997

The Board of Directors
Tri-State Finance Corporation
616 E. Speer Boulevard
Denver, CO 80203

Members of the Board;

We hereby consent to the use in this Registration Statement on Form S-4 of our
opinion as to the fairness, from a financial point of view, to the common
stockholders of Tri-State Finance Corporation of the Merger Consideration, to
the inclusion of our opinion as Appendix A to the proxy statement/prospectus
portion of the Registration Statement, and to the reference to our firm under
the heading "Experts" in the proxy statement/prospectus.


                                            /s/ The Wallach Company, Inc.

                                            THE WALLACH COMPANY, INC.






                                  EXHIBIT 99.1

                            [Letterhead of Tri-State]



                               December ___, 1997



Shareholders of Tri-State Finance Corporation


Dear Shareholder:

         A Special Meeting of the shareholders of Tri-State Finance Corporation
("the Company") has been called for 9:00 a.m., Colorado time, on January , 1998,
at the Company's offices at 255 Washington Street, Denver, Colorado. The
accompanying proxy statement/prospectus is being furnished to all holders of the
Company's Class A Common Stock ("Class A Common Stock") and to all holders of
the Company's Class B Common Stock ("Class B Common Stock"). The Class A Common
Stock and the Class B Common Stock will be voted separately as a class.

         The purpose of the Special Meeting is to consider and vote upon an
Agreement and Plan of Reorganization dated September 23, 1997 among the Company,
Tri-State Bank (the "Bank"), Zions Bancorporation ("Zions"), Val Cor
Bancorporation, Inc. ("Val Cor"), a wholly-owned subsidiary of Zions, and Valley
National Bank of Cortez ("Valley"), Val Cor's 99.7% owned subsidiary, which
includes an Agreement to Merge between the Company and Val Cor and an Agreement
to Merge between the Bank and Valley (collectively, the "Plan of
Reorganization"). If the Plan of Reorganization is approved, and all conditions
are met, the Plan of Reorganization will result in the merger of the Company
into Val Cor, with Val Cor being the surviving corporation and the merger of the
Bank into Valley, with Valley being the surviving entity.

         Upon consummation of the Plan of Reorganization, each holder of Company
Common Stock will receive shares of Zions Common Stock in exchange for each
share of Company Common Stock. The terms and conditions of the Plan of
Reorganization are summarized in the accompanying Proxy Statement/Prospectus.
See "Summary--Certain Definitions" in the Proxy Statement/Prospectus.

         At the Effective Date (as defined), the shares of Company Common Stock
will be canceled and immediately converted into the right for holders of Company
Common Stock to receive, in exchange for each share of Company Common Stock,
that number of shares of Zions Common Stock calculated by dividing the Merger
Consideration (as defined) of 710,000 shares of Zions Common Stock by the total
number of shares of Company Common Stock issued and outstanding as of the
Effective Date of the Reorganization. Zions will not issue fractional shares of
its common stock in the Reorganization. In lieu of fractional shares of Zions
Common Stock, if any, each shareholder of the Company who is entitled to a
fractional share of Zions Common Stock will receive an amount of cash equal to
the product of such fraction times $40.625. Such fractional share interest will
not include the right to vote or to receive dividends or any interest thereon.


<PAGE>

Shareholders of Tri-State Finance Corporation
December __, 1997
Page 2




         On December ____, 1997, the closing price of Zions Common Stock was
$____ per share. On that date the Company had 748,631 shares of its Common Stock
issued and outstanding. Assuming that the Reorganization had been consummated as
of December ___, 1997 and the closing price of Zions Common Stock had been $___
on that date, shareholders of the Company under such circumstances would have
received .9484 of a share of Zions Common Stock for each share of Company Common
Stock, or an equivalent value of $_____ per share of Company Common Stock.

         The accompanying Proxy Statement/Prospectus details the terms of the
proposed Plan of Reorganization and provides information concerning the Company,
the Bank, Zions, Val Cor and Valley as well as the Plan of Reorganization. The
Proxy Statement/Prospectus contains important information necessary for the
shareholders to make a decision about how to vote at the Special Meeting. Please
read it carefully.

         The affirmative vote of two-thirds of the issued and outstanding shares
of each of the Class A Common Stock and the Class B Common Stock is required for
approval of the Plan of Reorganization. Failure to vote will have the same
effect as a vote against the Reorganization. Consequently, please mark, sign,
date and return the enclosed proxy as soon as possible.

         Any holder of Company Common Stock may attend the Special Meeting and
vote in person if he or she desires, even if he or she has already submitted a
proxy.

         Consummation of the Plan of Reorganization is subject to approval by
federal and state bank regulatory agencies which approvals have [not yet] been
received and to certain other conditions, including the maintenance of the
Company's financial condition. If approved, the Plan of Reorganization will most
likely be consummated sometime in first quarter of 1998.

         The Board of Directors has unanimously approved the Plan of
Reorganization and determined that the Reorganization is in the best interests
of the Company, its shareholders, employees and the community it serves. The
Board of Directors unanimously recommends that the shareholders vote to approve
the Plan of Reorganization.

         Instructions describing the procedure to be followed to receive shares
of Zions Common Stock are included with the accompanying Proxy
Statement/Prospectus. If the Plan of Reorganization is approved by the
shareholders, on or shortly after the effective date of the Plan of
Reorganization, Zions will send you instructions describing the procedure to be
followed to exchange your Tri-State Finance Corporation stock certificate for
the Reorganization consideration.


<PAGE>


Shareholders of Tri-State Finance Corporation
December __, 1997
Page 3



Please do not send your certificates to the Company prior to receiving these
instructions.


                                                     Sincerely,



                                                     Richard C. Tucker
                                                     President







                                  EXHIBIT 99.2

                          TRI-STATE FINANCE CORPORATION


                            NOTICE OF SPECIAL MEETING
                                 OF SHAREHOLDERS


                  A Special Meeting of shareholders of Tri-State Finance
Corporation (the "Company") will be held at 9:00 a.m., Colorado time, on January
, 1998, at the Company's offices at 255 Washington Street, Denver, Colorado, to
consider and vote upon an Agreement and Plan of Reorganization dated as of
September 23, 1997 among the Company, Tri-State Bank (the "Bank"), Zions
Bancorporation ("Zions"), Val Cor Bancorporation, Inc. ("Val Cor"), a
wholly-owned subsidiary of Zions, and Valley National Bank of Cortez ("Valley"),
Val Cor's 99.7% owned subsidiary, an Agreement to Merge between the Company and
Val Cor and an Agreement to Merge between Valley and the Bank (collectively, the
"Plan of Reorganization"). The Plan of Reorganization provides for the merger of
the Company into Val Cor, with Val Cor being the surviving corporation and for
the merger of the Bank into Valley, with Valley being the surviving entity (the
aforementioned mergers being referred to herein collectively as the
"Reorganization").

                  Upon the consummation of the Plan of Reorganization, each
holder of shares of Company Common Stock will receive shares of Zions Common
Stock in exchange for each share of Company Common Stock held as of the
effective date of the Plan of Reorganization. The terms and conditions of the
Reorganization are set forth in the accompanying Proxy Statement/Prospectus.

                  The Board of Directors has set December ____, 1997, as the
record date for determining shareholders entitled to notice of and to vote at
the Special Meeting.

                  Holders of Company Common Stock are entitled to assert
dissenters' rights under Colorado law.

                  By order of the Board of Directors

Dated: December ____, 1997.



                                                   Richard C. Tucker
                                                   President

         Please mark, sign and return the enclosed proxy in the envelope
provided.






                                  EXHIBIT 99.3


                                      PROXY

                         SPECIAL MEETING OF SHAREHOLDERS
                        OF TRI-STATE FINANCE CORPORATION

                                 January , 1998

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS


                  The undersigned hereby appoints Richard C. Tucker as proxy of
the undersigned to vote as designated below on behalf of the undersigned as a
holder of the Class A Common Stock of Tri-State Finance Corporation ("Class A
Common Stock") and to vote as designated below all shares of Class A Common
Stock that the undersigned held of record on December ___, 1997, which the
undersigned is entitled to vote, at the special meeting of shareholders of
Tri-State Finance Corporation (the "Company") to be held on January ____, 1998,
or at any postponement or adjournment thereof, for the purpose of considering
and acting on the proposal to approve the Agreement and Plan of Reorganization
dated September 23, 1997, among the Company, Tri-State Bank(the "Bank"), Zions
Bancorporation ("Zions"), Val Cor Bancorporation, Inc. ("Val Cor"), a
wholly-owned subsidiary of Zions, and Valley National Bank of Cortez ("Valley"),
Val Cor's 99.7% owned subsidiary, an Agreement to Merge between the Company and
Val Cor and an Agreement to Merge between Valley and the Bank (collectively, the
"Plan of Reorganization"), whereby the Company will merge into Val Cor, with Val
Cor being the surviving corporation, and the Bank will merge into Valley, with
Valley being the surviving entity (the aforementioned mergers being referred to
collectively as the "Reorganization"). Pursuant to the Plan of Reorganization,
the holders of shares of the Company's Class A Common Stock and Class B Common
Stock (collectively the "Company Common Stock") will receive .9484% of a share
of Zions Common Stock in exchange for each share of Company Common Stock. The
terms and conditions of the Plan of Reorganization are set forth in the
accompanying Proxy Statement/Prospectus. Each Proxy shall have full power of
substitution. Approval of the Plan of Reorganization requires the affirmative
vote of two-thirds of the outstanding shares of the Class A Common Stock and the
Class B Common Stock voting separately as a class.

The Directors recommend a vote FOR Proposal 1.

    1.  Approval of the Plan of Reorganization and the Reorganization.

           [ ] FOR         [ ] AGAINST               [ ] ABSTAIN

    2.  The Proxy, in his discretion, is authorized to vote on such other
business as may properly come before the meeting.


<PAGE>





       When properly completed, this proxy will be voted in the manner directed
herein by the undersigned. If no direction is given, this proxy will be voted
FOR the approval of the Plan of Reorganization and the Reorganization.

                           (Each person whose name is on the Company Class A
                           Common Stock certificate should sign below in the
                           same manner in which such person's name appears. If
                           signing as a fiduciary, give title.)

                                   ____________________________________
                                   Signature



                                   ____________________________________
                                   Printed Name


                                   Dated: _____________________________
                                          Please date, sign,
                                          and return promptly




                                  EXHIBIT 99.4


                                      PROXY

                         SPECIAL MEETING OF SHAREHOLDERS
                        OF TRI-STATE FINANCE CORPORATION

                                 January , 1998

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS


                  The undersigned hereby appoints Richard C. Tucker as proxy of
the undersigned to vote as designated below on behalf of the undersigned as a
holder of the Class B Common Stock of Tri-State Finance Corporation ("Class B
Common Stock") and to vote as designated below all shares of Class B Common
Stock that the undersigned held of record on December ____, 1997, which the
undersigned is entitled to vote, at the special meeting of shareholders of
Tri-State Finance Corporation (the "Company") to be held on January ____, 1998,
or at any postponement or adjournment thereof, for the purpose of considering
and acting on the proposal to approve the Agreement and Plan of Reorganization
dated September 23, 1997, among the Company, Tri-State Bank (the "Bank"), Zions
Bancorporation ("Zions"), Val Cor Bancorporation, Inc. ("Val Cor"), a
wholly-owned subsidiary of Zions, and Valley National Bank of Cortez ("Valley"),
Val Cor's 99.7% owned subsidiary, an Agreement to Merge between the Company and
Val Cor and an Agreement to Merge between Valley and the Bank (collectively, the
"Plan of Reorganization"), whereby the Company will merge into Val Cor, with Val
Cor being the surviving corporation, and the Bank will merge into Valley, with
Valley being the surviving entity (the aforementioned mergers being referred to
collectively as the "Reorganization"). Pursuant to the Plan of Reorganization,
the holders of shares of the Company's Class A Common Stock and Class B Common
Stock (collectively the "Company Common Stock") will receive .9484% of a share
of Zions Common Stock in exchange for each share of Company Common Stock. The
terms and conditions of the Plan of Reorganization are set forth in the
accompanying Proxy Statement/Prospectus. Each Proxy shall have full power of
substitution. Approval of the Plan of Reorganization requires the affirmative
vote of two-thirds of the outstanding shares of the Class A Common Stock and the
Class B Common Stock voting separately as a class.

The Directors recommend a vote FOR Proposal 1.

    1.  Approval of the Plan of Reorganization and the Reorganization.

           [ ] FOR         [ ] AGAINST               [ ] ABSTAIN

    2.  The Proxy, in his discretion, is authorized to vote on such other
business as may properly come before the meeting.


<PAGE>



       When properly completed, this proxy will be voted in the manner directed
herein by the undersigned. If no direction is given, this proxy will be voted
FOR the approval of the Plan of Reorganization and the Reorganization.

                           (Each person whose name is on the Company Class B
                           Common Stock certificate should sign below in the
                           same manner in which such person's name appears. If
                           signing as a fiduciary, give title.)


                              _______________________________
                              Signature



                              _______________________________
                              Printed Name


                              Dated:_________________________
                                    Please date, sign,
                                    and return promptly




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