ZIONS BANCORPORATION /UT/
424B3, 1998-05-01
NATIONAL COMMERCIAL BANKS
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             [Letterhead of Routt County National Bank Corporation]


                                 April 30, 1998


Shareholders of Routt County National Bank Corporation


Dear Shareholder:

         A Special Meeting of the shareholders of Routt County National Bank
Corporation ("the Company") has been called for 9:00 a.m., Colorado time, on
May 29, 1998, at the Company's offices at 2155 Resort Drive, Steamboat
Springs, Colorado. The accompanying proxy statement/prospectus is being
furnished to all holders of the Company's Common Stock.

         The purpose of the Special Meeting is to consider and vote upon an
Agreement and Plan of Reorganization dated January 21, 1998 among the Company,
its wholly-owned subsidiary First National Bank of Colorado (the "Bank"), Zions
Bancorporation ("Zions"), Val Cor Bancorporation, Inc. ("Val Cor"), a
wholly-owned subsidiary of Zions, and Bank Colorado, National Association ("Bank
Colorado"), Val Cor's wholly-owned subsidiary, an Agreement of Merger between
the Company and Val Cor and an Agreement of Merger between the Bank and Bank
Colorado (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 Bank
Colorado, with Bank Colorado being the surviving national banking association.
Bank Colorado intends to change its name to Vectra Bank Colorado, National
Association prior to the Special Meeting.

         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 650,000 shares of Zions Common Stock, which may be
adjusted downward if Transaction Expenses (as defined) exceed $100,000, 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 $43.9375. Such fractional share interest will
not include the right to vote or to receive dividends or any interest thereon.

         On April 27, 1998, the closing price of Zions Common Stock was $48.0625
per share. On that date there were 318,664.47 shares of Company Common Stock
issued and outstanding. Assuming that the Reorganization had been consummated as
of April 27, 1998, that the closing price of Zions Common Stock had been
$48.0625 on that date, and that Transaction Expenses had not exceeded $100,000,
shareholders of the Company under such circumstances would have received
approximately 2.04



<PAGE>


Shareholders of Routt County National Bank Corporation 
April 30, 1998 
Page 2



shares of Zions Common Stock for each share of Company Common Stock, or an
equivalent value of approximately $98.0475 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 Bank Colorado 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 a majority of the issued and outstanding shares
of the Company's 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, all of which approvals have been
received, and to certain other conditions, including maintenance of the
Company's financial condition. If approved, the Plan of Reorganization will most
likely be consummated sometime in the second 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 Routt County National Bank Corporation stock
certificate for the Reorganization consideration.

         Please do not send your certificates to the Company prior to receiving
these instructions.

                                                    Sincerely,



                                                    _________________________
                                                    Timothy S. Borden
                                                    Chairman of the Board


<PAGE>



                     ROUTT COUNTY NATIONAL BANK CORPORATION

                            NOTICE OF SPECIAL MEETING
                                 OF SHAREHOLDERS

         A Special Meeting of shareholders of Routt County National Bank
Corporation (the "Company") will be held at 9:00 a.m., Colorado time, on May 29,
1998, at the Company's offices at 2155 Resort Drive, Steamboat Springs,
Colorado, to consider and vote upon an Agreement and Plan of Reorganization
dated as of January 21, 1998 among the Company, its wholly-owned subsidiary
First National Bank of Colorado (the "Bank"), Zions Bancorporation ("Zions"),
Val Cor Bancorporation, Inc. ("Val Cor"), a wholly-owned subsidiary of Zions,
and Bank Colorado, National Association ("Bank Colorado"), Val Cor's
wholly-owned subsidiary, an Agreement of Merger between the Company and Val Cor
and an Agreement of Merger between Bank Colorado and the Bank (collectively, the
"Plan of Reorganization"), and the transactions contemplated thereby. 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 Bank
Colorado, with Bank Colorado being the surviving national banking association
(the aforementioned mergers being referred to herein collectively as the
"Reorganization"). Bank Colorado intends to change its name to Vectra Bank
Colorado, National Association prior to the Special Meeting.

         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
(as defined) 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 April 28, 1998, 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: April 30, 1998.


                                                ______________________________
                                                Timothy S. Borden
                                                Chairman of the Board


         Please mark, sign and return the enclosed proxy in the envelope
provided.


<PAGE>



                     ROUTT COUNTY NATIONAL BANK CORPORATION
                                 Proxy Statement
                                       For
                         Special Meeting of Shareholders
                           To be Held on May 29, 1998


                                       and

                              ZIONS BANCORPORATION
                                   Prospectus
                             Up to 650,000 Shares of
                                  Common Stock



         This Proxy Statement/Prospectus is being furnished to the shareholders
of Routt County National Bank 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 May 29, 1998 (the "Special Meeting") and at any adjournments or
postponements thereof. This Proxy Statement/Prospectus and accompanying notice
of special meeting and form of proxy ("Proxy") are first being mailed on or
about April 30, 1998 to the shareholders of the Company of record as of
April 28, 1998 (the "Record Date").


         At the Special Meeting, the holders of each outstanding share of
Company common stock, par value $0.01 per share (the "Company Common Stock")
will consider and vote upon a proposal to approve and adopt the Agreement and
Plan of Reorganization, dated as of January 21, 1998, among the Company, the
Company's wholly-owned subsidiary, First National Bank of Colorado, a national
banking association organized under the laws of the United States (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 wholly-owned subsidiary, Bank Colorado, National Association, a
national banking association organized under the laws of the United States
("Bank Colorado"), an accompanying Agreement of Merger between the Company and
Val Cor, and an accompanying Agreement of Merger between the Bank and Bank
Colorado (collectively the "Plan of Reorganization"), and the transactions
contemplated by 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 Bank Colorado, with Bank Colorado being the surviving national
banking association (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"). 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 650,000 shares of Zions Common Stock, subject to downward adjustment
if Transaction Expenses, as defined, exceed $100,000, 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 and assuming that
Transaction Expenses do not exceed $100,000, the shareholders of the Company
will receive approximately 2.04 shares of Zions


<PAGE>


Common Stock for each share of Company Common Stock. Zions will not issue
fractional shares of its common stock in the Reorganization.


         On April 27, 1998, the closing price of Zions Common Stock was
$48.0625 per share. On that date the Company had 318,664.47 shares of its
Common Stock issued and outstanding. Assuming that the Reorganization had been
consummated as of April 27, 1998, that the closing price of Zions Common
Stock had been $48.0625 per share on that date, and that Transaction Expenses
had not exceeded $100,000, shareholders of the Company under such circumstances
would have received approximately 2.04 shares of Zions Common Stock for each
share of Company Common Stock, or an equivalent value of approximately
$98.0475 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 A
MAJORITY OF THE ISSUED AND OUTSTANDING SHARES OF COMPANY COMMON STOCK MUST VOTE
IN FAVOR OF THE REORGANIZATION. ALL REGULATORY APPROVALS HAVE 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.

         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


<PAGE>



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, within the meaning of Section 27A of the
Securities Act of 1933, as amended, 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 April 29, 1998.



<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 (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, Executive 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 May 21, 1998.




<PAGE>



                                TABLE OF CONTENTS

                                                                       Page
                                                                       ----

SUMMARY  ................................................................1
         The Parties.....................................................1
         The Special Meeting; Purpose....................................2
         Record Date; Voting Rights......................................3
         Voting and Revocation of Proxies................................3
         Quorum; Vote Required for Approval..............................3
         Proposed Reorganization.........................................4
         Certain Definitions.............................................4
         Reasons for the Reorganization..................................6
         Board of Directors Recommendation...............................6
         Interests of Certain Persons in the Transaction.................6
         Tax Consequences................................................7
         Dissenters' Rights..............................................7
         Conditions; Regulatory Approval.................................7
         Amendment; Termination..........................................8
         Effective Date of the Reorganization............................8
         Accounting Treatment............................................8
         Comparison of Shareholders' Rights..............................8
         "Anti-Takeover" Provisions......................................9
         Exchange of Certificates........................................9
         Trading Markets; Pre-Announcement Prices........................9
         Selected Financial Information..................................9
         Comparative Per Share Data......................................11
         Unaudited Pro Forma Combined Financial Information..............11
         Recent Developments.............................................12

PLAN OF REORGANIZATION...................................................16
         The Reorganization..............................................16
         Background of and Reasons for the Reorganization................17
         Voting Agreements...............................................19
         Required Vote; Management Recommendation........................20
         No Opinion of a Financial Advisor...............................20
         Conversion of Company Shares....................................21
         Federal Income Tax Consequences of the Reorganization...........22
         Rights of Dissenting Shareholders...............................23
         Interests of Certain Persons in the Transaction.................25
         Inconsistent Activities.........................................26
         Conduct of Business Pending the Reorganization..................27
         Conditions to the Reorganization................................28
         Representations and Warranties..................................30
         Amendment and Waiver............................................30
         Authorized Termination and Damages for Breach...................30
         Restrictions on Resales by Company Affiliates...................31
         Expenses .......................................................31
         Government Approvals............................................32
         Effective Date of the Reorganization............................32
         Accounting Treatment............................................32
         Relationship Between Zions and the Company......................32
         Unaudited Pro Forma Combined Financial Information..............32

SUPERVISION AND REGULATION...............................................34
         Zions    .......................................................34
         Regulatory Capital Requirements.................................35
         Other Regulatory and Supervisory Issues.........................39
         Deposit Insurance and Other Assessments.........................40
         Interstate Banking..............................................41

MONETARY POLICY..........................................................42

INFORMATION CONCERNING ZIONS BANCORPORATION..............................43
         Selected Financial Data.........................................43
         Stock Prices and Dividends on Zions Common Stock................46
         Principal Holders of Zions Common Stock.........................46
         Zions Documents Incorporated By Reference.......................48

INFORMATION CONCERNING THE COMPANY AND THE BANK..........................49
         General  .......................................................49
         Investment Securities...........................................54
         Deposits .......................................................56
         Competition.....................................................57
         The Bank's Facilities...........................................57
         Legal Proceedings...............................................57
         Employees.......................................................58
         Regulatory Matters..............................................58

                                        i

<PAGE>


         Selected Financial Data.........................................58
         Certain Transactions of the Company.............................60

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS OF ROUTT COUNTY NATIONAL BANK 
         CORPORATION.....................................................62

COMPARISON OF THE RIGHTS OF SHAREHOLDERS OF ZIONS AND THE COMPANY........68

LEGAL OPINIONS...........................................................75

EXPERTS  ................................................................75

OTHER MATTERS............................................................75

CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY.........................77


Appendix A -Opinion of Slivka Robinson Waters & O'Dorisio, P.C. as to Tax 
            Matters


Appendix B -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 multi-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.

         In 1997, Zions achieved a significant expansion of commercial banking
operations in Utah, Nevada, and Arizona, and expanded its franchise by adding
banking operations in Colorado, New Mexico, Idaho and California. Its principal
subsidiaries are banking subsidiaries which include Zions First National Bank,
the second largest commercial banking organization in the state of Utah; Nevada
State Bank, the fifth largest commercial bank in Nevada; and National Bank of
Arizona, the fifth largest commercial bank in Arizona. Acquisitions consisted of
Aspen Bancshares and its affiliate banks with branches in Colorado and New
Mexico; Tri-State Bank in Idaho, which was merged into Zions First National
Bank; 31 Wells Fargo branches in Utah, Idaho, Arizona and Nevada; Sun State Bank
in Nevada which was merged into Nevada State Bank; Grossmont Bank in San Diego,
California; and the public finance firms of Howarth & Associates in Nevada and
Kelling, Northcross and Nobriga, Inc. in California.

         On December 29, 1997, Zions and FP Bancorp, Inc. ("FP Bancorp"), the
holding company of First Pacific National Bank ("First Pacific"), announced that
a definitive agreement had been signed under which FP Bancorp will merge with
and into Zions, and First Pacific with and into Grossmont Bank, in exchange for
common shares of Zions. As of December 31, 1997, First Pacific had assets of
$353 million. The merger is subject to approval by banking regulators and the
shareholders of FP Bancorp. This acquisition is pending. On January 6, 1998,
Zions acquired Vectra Banking Corporation ("Vectra"), the parent company of
Vectra Bank which has 9 offices in the Denver metropolitan area. In the
transaction, Vectra merged with and into Zions in exchange for common shares of
Zions. As of December 31, 1997, Vectra had assets of $701 million. On January
23, 1998, Zions wholly-owned subsidiary, Val Cor, and Sky Valley Bank
Corporation ("Sky Valley"), parent company of The First National Bank in Alamosa
("FNBA"), completed their merger whereby Sky Valley merged with and into Val
Cor. As of September 30, 1997, Sky Valley had assets of approximately $122
million and FNBA had three offices in Alamosa, Center, and Saguache, Colorado.
On February 27, 1998, Val Cor and Tri-State Finance Corporation ("Tri-State"),
the parent of Tri-State Bank, completed their merger whereby Tri-State merged
with and into Val Cor and Tri-State Bank, with offices in Denver and Boulder,
Colorado, merged with and into Bank Colorado. As of September 30, 1997,
Tri-State had assets of approximately $124 million. On March 25, 1998, Zions and
Sumitomo Bank of California ("Sumitomo") entered into a definitive agreement
whereby Sumitomo will merge with a subsidiary of Zions. Zions will pay
approximately $546 million in



<PAGE>



cash for Sumitomo. Sumitomo is currently California's sixth largest bank, with
assets of approximately $5.1 billion as of December 31, 1997, and with 47
branches. Zions will combine its present Grossmont Bank subsidiary with Sumitomo
and First Pacific when these acquisitions have been completed. See "Summary--
Recent Developments," below. As of December 31, 1997 Zions had total
consolidated assets of $9.5 billion, deposits of $6.9 billion, and shareholders'
equity of $655 million. See "Information Concerning Zions Bancorporation."

         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 in May 1997.  Val Cor's principal asset consists of its 100%
ownership interest in Bank Colorado, National Association.


         Bank Colorado, National Association ("Bank Colorado") is a national
banking association with its primary market areas located in Denver, Boulder,
Montezuma, Alamosa, and Saguache Counties, Colorado. Bank Colorado is the result
of the merger of Valley National Bank of Cortez, The First National Bank in
Alamosa, and Tri-State Bank. Bank Colorado offers traditional banking services
through offices in Denver, Boulder, Alamosa, Center, Cortez, Delores, and
Saguache, Colorado. At January 31, 1998, Bank Colorado had total assets of $213
million, total deposits of $175 million, and shareholders' equity of $32
million. Bank Colorado's main office is located at 616 East Speer Boulevard,
Denver, Colorado 80203, and its telephone number is 303/782-7440. Bank Colorado
intends to change its name to Vectra Bank Colorado, National Association prior
to the Special Meeting.


         Routt County National Bank Corporation (the "Company"), a Colorado
corporation, is a bank holding company registered under the Bank Holding Company
Act whose sole activity is the ownership and operation of First National Bank of
Colorado (the "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 at 2155 Resort Drive, Steamboat Springs,
Colorado 80477, and its telephone number is 970/879-4949. As of December 31,
1997, the Company had total consolidated assets of $92.9 million and
shareholders' equity of $6.8 million.

         First National Bank of Colorado (the "Bank") is a national banking
association organized under the laws of the United States and has operated at
its current location in Steamboat Springs since November 1986. In addition to
its main location in Steamboat Springs, the Bank has a full-service branch
office located at 803 Lincoln Avenue, Steamboat Springs, Colorado. At December
31, 1997, the Bank had total assets of $92.9 million, total deposits of $83.4
million and shareholders' equity of $6.8 million. The Bank's main office is
located at 2155 Resort Drive, Steamboat Springs, Colorado 80477, and its
telephone number at that address is 970/879-4949.

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 May 29, 1998 at the
offices of the Company, 2155 Resort Drive, Steamboat Springs, Colorado.


         The purpose of the Special Meeting is to consider and vote upon a
proposal to approve the Plan of Reorganization and the Reorganization.

                                        2

<PAGE>



Record Date; Voting Rights


         The Board of Directors of the Company has fixed the close of business
on April 28, 1998 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. Only holders of record of Common Stock,
$0.01 par value, of the Company (the "Company Common Stock") at the close of
business on the record date will be entitled to vote at the Special Meeting. At
that date, 318,664.47 shares of Company Common Stock were outstanding, held by
eighteen shareholders of record. 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. See "Plan of Reorganization -- Required Vote; Management
Recommendation."


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.

Quorum; Vote Required for Approval

         The presence in person or by proxy of the holders of a majority of the
issued and outstanding shares of Company Common Stock is necessary to constitute
a quorum at the Special Meeting. Approval of the Plan of Reorganization requires
the affirmative vote of a majority of the outstanding shares of Company Common
Stock entitled to vote 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 April 28, 1998, fifteen individuals and their affiliated entities
beneficially owned all 318,664.47 shares, or 100% of the outstanding shares of
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 Plan of
Reorganization and 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" and
"Information Concerning the Company and the Bank--Stockholdings of Directors,
Officers and Certain Others." Such a vote will be sufficient to approve the Plan
of Reorganization and the Reorganization. If each of these shareholders votes
his, her or its shares in favor of the Plan of Reorganization and the


                                        3

<PAGE>



Reorganization as each has agreed, approval of the Plan of Reorganization and
the Reorganization is assured.

Proposed Reorganization

         At the Special Meeting, the holders of Company Common Stock will be
asked to consider and approve the Plan of Reorganization and the Reorganization.
The Plan of Reorganization provides for the merger of the Company into Val Cor,
whereby Val Cor will be the surviving corporation, and for the merger of the
Bank into Bank Colorado, with Bank Colorado being the surviving national banking
association. 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
650,000 shares of Zions Common Stock, which may be adjusted downward if
Transaction Expenses exceed $100,000, by the total number of shares of Company
Common Stock issued and outstanding as of the Effective Date. In accordance with
this formula, assuming that Transaction Expenses do not exceed $100,000, the
shareholders of the Company will receive approximately 2.04 shares 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 (after aggregating
all shares of Zions Common Stock to which such shareholder is entitled) will
receive an amount of cash equal to the product of such fraction times $43.9375.
Such fractional share interest will not include the right to vote or to receive
dividends or any interest thereon.


         On April 27, 1998, the closing price of Zions Common Stock was
$48.0625 per share and the Company had issued and outstanding 318,664.47
shares of its Common Stock. Assuming that the Reorganization had been
consummated as of April 27, 1998, that the closing price of Zions Common
Stock had been $48.0625 per share, and that Transaction Expenses had not
exceeded $100,000, shareholders of the Company under such circumstances would
have received approximately 2.04 shares of Zions Common Stock for each share of
Company Common Stock, or an equivalent value of approximately $98.0475 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.

         "Bank Merger" means the merger of the Bank with and into Bank Colorado,
with Bank Colorado being the surviving national banking association.

         "Effective Date" means the date which is the latest of (a) the day upon
which the shareholders of the Company approve, ratify, and confirm the Holding

                                        4

<PAGE>



Company Merger; (b) the day upon which the shareholder of Bank Colorado
approves, ratifies, and confirms the Bank Merger; (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 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 (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 Office 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 State Banking Board (the "State
Banking Board") 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 State Banking Board 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 650,000 shares of Zions
Common Stock to be issued to the holders of Company Common Stock upon
consummation of the Holding Company Merger, except that if the Transaction
Expenses determined on a pre-tax basis in accordance with generally accepted
accounting principles exceed $100,000, then the "Merger Consideration" shall be
the difference between 650,000 and the number calculated by dividing such
excess, net of any associated tax benefit, by $43.9375.

         "Transaction Expenses" means (i) all expenses incurred through the
Effective Date with respect to attorneys, accountants, investment bankers,
consultants, brokers and finders who will have rendered services to the Company
or the Bank in connection with the transactions contemplated by the Plan of
Reorganization, and (ii) all of the other expenses incurred through the
Effective Date outside of the ordinary course of business of the Company and the
Bank, but does not include expenses of the annual audit of the Company and the
Bank for the year ended December 31, 1997.

                                        5

<PAGE>



Reasons for the Reorganization

         Management and the Board of Directors of the Company believe that it is
in the best interests of the Company and its shareholders for the Company to
merge with Zions. In considering the Plan of Reorganization and the transactions
contemplated thereby, the Board determined that the Zions offer would maximize
value for the Company's shareholders, while providing a favorable structure for
the transaction in which the Company's shareholders will receive liquid
securities without triggering tax consequences (except for shareholders
receiving cash in the Reorganization). Further, the Board believes that the
Zions transaction will result in positive effects for the employees of the
Company and the Bank, the customers of the Bank, and the communities in which
the Bank operates. 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 Plan of Reorganization and
the Reorganization to the Company's shareholders for their approval.

         For Zions, the Reorganization will provide the opportunity to further
broaden its franchise in Colorado through its expansion into the Steamboat
Springs market, wherein Zions has not previously had a presence. Zions proposes
to broaden its geographical base in the Colorado market and thereby diversify
its banking operations. 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 compete more effectively 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
the employees and customers 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."

         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,
James A. Simon, currently president and chief executive officer of the Bank,
will become an executive officer of Bank Colorado. Mr. Simon will enter into an
employment agreement with Bank Colorado effective as of the Effective Date. The
Plan of Reorganization further provides that, following the Reorganization,
Timothy S. Borden, currently chairman of the board and a significant shareholder
of the Company, and John R. Adams, currently a director and a significant
shareholder of the Company, will each enter into a non-competition agreement
with Bank Colorado effective as of the Effective Date. Mr. Borden at the
Effective Date will also acquire the trade mark "First National Bank of
Colorado" from Bank Colorado. Mr. Borden will agree at the Effective Date not to
use that trade mark in Routt County or Craig, Colorado for three years after the
Effective Date. The

                                        6

<PAGE>



Company Board of Directors was aware of these interests when it considered and
approved the Plan of Reorganization and the Reorganization.  See "Plan of
Reorganization--Interests of Certain Persons in the Transaction."

Tax Consequences

         The Company will receive an opinion from Slivka Robinson Waters &
O'Dorisio, P.C., legal counsel to the Company (the "Slivka 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 in the
Reorganization 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 Slivka Opinion is attached as
Appendix A 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 cash equal to
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 B 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 B to this Proxy Statement/Prospectus, where the
statutory provisions are set forth.

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 State Banking Board, (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." All regulatory
approvals have been obtained.





                                        7

<PAGE>



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.


         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 Bank Colorado was materially incorrect when
made or in the event of a material breach or material failure by Zions, Val Cor
or Bank Colorado of any covenant or agreement of Zions, Val Cor or Bank Colorado
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 board of directors of either has determined in good faith
that 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 Zions or the Company after May 31, 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 second 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. Receipt of a determination by Zions' independent auditors that the
Reorganization should be treated as a pooling of interests is a condition of
closing of the Reorganization. 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.

                                        8

<PAGE>




"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."

Exchange of Certificates

         Instructions on how to effect the exchange of Company Common Stock
certificates for Zions Common Stock certificates and cash in lieu of any
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-NMS") 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-NMS on January 21, 1998, the last trading day prior
to the first public announcement of the Reorganization, was $44.00.

         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."

Selected Financial Information

         The following table sets forth certain historical financial information
for Zions and the Company. With respect to pro forma 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
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.

                                        9

<PAGE>



<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                         -----------------------------------------------------------------------
                                             1997          1996           1995           1994          1993
                                             ----          ----           ----           ----          ----
                                                        (In Thousands, Except Per Share Amounts)
<S>                                      <C>           <C>            <C>            <C>           <C>       
Zions
Earnings
  Net interest income...........         $  351,799    $  289,166     $  233,547     $  198,606    $  174,657
  Provision for loan losses.....              6,175         4,640          3,000          2,181         2,993
  Net income....................            122,362       107,423         82,385         63,827        58,205

Per Share
  Net income (diluted) .........         $     1.89    $     1.68     $     1.37     $     1.09    $     1.02
  Cash Dividends................              .4700         .4250          .3525          .2900         .2450

Statement of Condition at Period
  End
  Assets........................         $9,521,770    $7,116,413     $6,095,515     $4,934,095    $4,801,054
  Deposits......................          6,854,462     5,119,692      4,511,184      3,705,976     3,432,289
  Long-term debt................            258,566       251,620         56,229         58,182        59,587
  Shareholders' equity..........            655,460       554,610        469,678        365,770       312,592

Routt County
Earnings
  Net interest income...........         $    4,535    $    4,073     $    3,520
  Provision for loan losses.....                 --            --             --
    Net income....................            1,769         1,788          1,188

Per Share
  Net income ...................         $     5.56    $     5.70     $     3.84
  Cash Dividends................               1.86          3.00           1.60

Statement of Condition at Period
  End
  Assets........................         $   92,854    $   81,271     $   71,456
  Deposits......................             83,437        74,108         64,323
  Long-term debt................                 --            --             --
  Shareholders' equity..........              6,809         5,566          4,738
</TABLE>



                                       10

<PAGE>



Comparative Per Share Data

         The following table sets forth for the periods indicated historical net
income, book values and dividends per share for Zions Common Stock 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.
<TABLE>
<CAPTION>

                                                                          Year Ended December 31,
                                                                          -----------------------
                                                                      1997             1996           1995
                                                                      ----             ----           ----

<S>                                                                  <C>              <C>            <C>   
  Net Income Per Common Share (diluted)
       Zions......................................................   $ 1.89           $ 1.68         $ 1.37
       Routt County...............................................     5.56             5.70           3.84
  Book Value Per Common Share
       Zions......................................................   $10.25           $ 8.72         $ 7.46
       Routt County...............................................    21.37            17.57          15.20
  Cash Dividends Declared Per Common Share
       Zions (1)..................................................   $.4700           $.4250         $.3525
       Routt County...............................................     1.86             3.00           1.60
</TABLE>
- ----------
  (1)    While Zions is not obligated to pay cash dividends, the Board of
         Directors presently intends to continue its policy of paying quarterly
         dividends. Future dividends will depend, in part, upon the earnings and
         financial condition of Zions.

Unaudited Pro Forma Combined Financial Information

         The following unaudited pro forma 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 of Zions as incorporated herein by reference to other
documents and of the Company 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, 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.



                                       11

<PAGE>


<TABLE>
<CAPTION>


                                         Historical                            Pro Forma
                                  -----------------------        ------------------------------------
                                                                 Zions and
                                                                 Routt County            Routt County
                                                                 Pro-Forma               Equivalent
Per Common Share                  Zions      Routt County        Combined(4)             Pro-Forma(5)
- ----------------                  -----      ------------        -----------             ------------
<S>                                <C>          <C>                  <C>                   <C>   
NET INCOME (diluted)(1)
 For the years ended
 December 31, 1997                  $1.89      $ 5.56               $ 1.90                 $ 3.88
 December 31, 1996                   1.68        5.70                 1.69                   3.46
 December 31, 1995                   1.37        3.84                 1.38                   2.81

CASH DIVIDENDS(2)
 For the years ended
 December 31, 1997                 $.4700      $ 1.86               $  .4700               $  .9588
 December 31, 1996                  .4250        3.00                  .4250                  .8670
 December 31, 1995                  .3525        1.60                  .3525                  .7191

BOOK VALUE:(3)
 As of December 31, 1997           $10.25      $21.37               $10.25                 $20.91
 As of December 31, 1996             8.72       17.57                 8.74                  17.82
 As of December 31, 1995             7.46       15.20                 7.48                  15.26
</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 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 2.04 shares of Zions Common
     Stock for each share of Company Common Stock.

Recent Developments

      On December 29, 1997, Zions and FP Bancorp, Inc.("FP Bancorp"), the parent
company of First Pacific National Bank ("First Pacific") announced that a
definitive agreement had been signed under which FP Bancorp will merge with and
into Zions, with FP Bancorp shareholders receiving common shares of Zions. First
Pacific has approximately $359 million in assets in eight offices in San Diego
and Riverside Counties in California. The merger is subject to the approval of
FP Bancorp shareholders and banking regulators and is expected to close in the
second quarter of 1998. 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
exchange of each common share of FP Bancorp for 0.627 of a share of Zions Common
Stock. Based upon Zions' stock price of $43.50 per share as of December 29,
1997, the transaction is valued at approximately $90 million. Zions will incur
approximately $2 million in after-tax, merger-related charges in the second
quarter of 1998 in conjunction with this transaction.

      On January 23, 1998, Zions and Sky Valley Bank Corp.("Sky Valley"), the
parent company of The First National Bank in Alamosa ("FNBA"), completed their

                                       12

<PAGE>



reorganization pursuant to which Sky Valley merged with Val Cor, and Val Cor's
wholly-owned subsidiary Bank Colorado (formerly known as Valley National Bank of
Cortez) merged with Sky Valley's wholly-owned subsidiary, FNBA, which was the
surviving corporation and which upon consummation of its merger with Bank
Colorado adopted the name Bank Colorado, National Association. Sky Valley
shareholders received 572,836 shares of Zions Common Stock. Sky Valley had
approximately $120 million in assets at September 30, 1997, and FNBA had three
offices in southern Colorado. The merger was structured as a tax-free
reorganization and has been accounted for as a pooling-of-interests.

      On February 27, 1998, Zions and Tri-State Finance Corporation
("Tri-State") completed their reorganization whereby Tri-State merged with and
into Val Cor and the subsidiary bank of Tri-State merged with and into Bank
Colorado. At September 30, 1997, Tri-State had assets of approximately $124
million. Upon consummation of the reorganization Zions issued a total of 710,000
shares of Zions Common Stock to the former shareholders of Tri-State. Tri-State
had one office in Denver and one office in Boulder, Colorado.

      Zions and SBT Bankshares, Inc. ("SBT"), the holding company of State Bank
and Trust of Colorado Springs ("SBTCS"), announced on December 22, 1997 that a
definitive agreement had been signed under which SBT will merge with and into
Val Cor in exchange for an estimated 615,000 shares of Zions Common Stock. The
merger is structured to be tax-free and is intended to be accounted for as a
pooling-of-interests. The merger is subject to the approval of banking
regulators and the shareholders of SBT. SBTCS operates through two banking
offices in Colorado Springs, Colorado. At September 30, 1997, SBT had assets of
$88 million. The transaction is expected to close in the [second] quarter of
1998.

      On March 25, 1998, Zions and Sumitomo Bank of California ("Sumitomo")
entered into a definitive agreement whereby Sumitomo will merge with a
subsidiary of Zions. Zions will pay approximately $546 million in cash for
Sumitomo. Sumitomo is currently California's sixth largest bank, with assets of
approximately $5.1 billion as of December 31, 1997, and with 47 branches. Zions
will combine its present Grossmont Bank subsidiary with Sumitomo and First
Pacific when these acquisitions have been completed. The combined subsidiary,
with California assets of over $6 billion and 71 banking offices in California,
will rank as the fifth largest commercial bank in the state. The merger is
subject to the approval of Sumitomo shareholders and banking regulators and is
expected to close in the third quarter of 1998. Zions expects to finance the
purchase with existing resources as well as the issuance of securities in the
capital markets. The acquisition will be accounted for as a purchase. Zions
expects to name Robert Sarver, currently chairman of Grossmont and a director of
Zions, as chief executive officer of the combined company. In order to provide
an appropriate incentive to Mr. Sarver to expand Zions' California franchise,
Zions has agreed to sell him a portion of Sumitomo at Zions' cost basis. When
Sumitomo is combined with Grossmont Bank and First Pacific, he will control 5%
of the combined company at a purchase price of approximately $34 million. Zions
will retain the exclusive right to repurchase this ownership interest.


                                       13

<PAGE>



                             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, Executive 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 Bank Colorado, with Bank Colorado
being the surviving national banking association (the "Bank Merger"). Val Cor is
a bank holding company incorporated in Colorado. Val Cor is a wholly-owned
subsidiary of Zions.

      Val Cor, a Colorado corporation, is a bank holding company registered
under the Bank Holding Company Act. Val Cor's principal asset consists of its
100% ownership interest in its wholly-owned subsidiary, Bank Colorado, which
operates a commercial banking business in Colorado through seven offices.

      Bank Colorado is a national banking association. Bank Colorado is the
result of the merger of Valley National Bank of Cortez, with operations
primarily in Montezuma County, Colorado, The First National Bank in Alamosa,
with operations in Alamosa and Saguache Counties, Colorado, and Tri-State Bank,
with offices in Denver and Boulder Colorado. Bank Colorado offers traditional
banking services to customers through its seven branch offices located in
Denver, Boulder, Alamosa, Center, Cortez, Dolores, and Saguache, Colorado. As of
February 28, 1998, Bank Colorado had assets of $348.3 million.

      The Company is a bank holding company incorporated in Colorado. The
Company operates through its wholly-owned subsidiary, First National Bank of
Colorado (the "Bank"). The Bank operates a commercial banking business through
two offices in Steamboat Springs, Colorado.

      Upon consummation of the Reorganization, the holders of each outstanding
share of Company Common Stock participating in the Reorganization will receive,
in exchange for each share of Company Common Stock, their pro rata share of the
Merger Consideration, consisting of 650,000 shares of Zions Common Stock, which
may be adjusted downward if Transaction Expenses exceed $100,000 and cash in
exchange for any fractional shares. 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 650,000 shares of Zions Common Stock, which may be adjusted
downward if Transaction Expenses exceed $100,000, by the total number of shares
of Company Common Stock issued and outstanding as of the Effective Date of the
Reorganization or, assuming that Transaction Expenses do not exceed $100,000,
approximately 2.04 shares of Zions Common Stock for each share of Company Common
Stock. Zions will not issue fractional shares of its Common Stock in the

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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 (after aggregating all shares of Zions Common Stock to which such
shareholder is entitled) will receive an amount of cash equal to the product of
such fraction times $43.9375. Such fractional share interest will not include
the right to vote or to receive dividends or any interest thereon.


         On April 27, 1998, the closing price of Zions Common Stock was $48.0625
per share. On that date there were issued and outstanding 318,664.47 shares of
Company Common Stock. Assuming that the Reorganization had been consummated as
of April 27, 1998, that the closing price of Zions Common Stock had been
$48.0625 per share on that date, and that Transaction Expenses had not exceeded
$100,000, shareholders of the Company under such circumstances would have
received approximately 2.04 shares of Zions Common Stock for each share of
Company Common Stock, or an equivalent value of approximately $98.0475 per share
of Company Common Stock.



Background of and Reasons for the Reorganization

      The Company. During the fall of 1997, Directors John R. Adams and James A.
Simon discussed with the Board of Directors of the Bank that the economic,
business and competitive climate for banking and financial institutions had
reached a state that might warrant consideration by the shareholders of the
Company of a business combination transaction with a major regional banking
organization. After consideration of research of bank merger and acquisition
transactions, a select number of potential acquirors were identified, including,
but not limited, to Zions. In evaluating potential acquirors, the Board of
Directors of the Company considered a variety of factors, including, but not
limited to, the following: (a) maximizing value to the Company's shareholders;
(b) potential transaction structures offered by potential acquirors; (c) the
risks and benefits (including tax benefits) of associating with an acquiror in a
stock-for-stock transaction; (d) the ability of potential acquirors to complete
the transaction, (e) the tax consequences to the Company's shareholders of a
cash transaction; and (f) the effect of any proposed transaction on employees,
customers, and the local community. In considering the effect of any proposed
transaction on employees, customers, and the local community, the Board of
Directors of the Company gave due consideration to whether a proposed
transaction would result in improved banking services for the community or
branch closings and employee layoffs.

      It was learned through marketplace research that Zions was in a favorable
acquisition mode for high performing commercial banking institutions in the
mountain states, including Colorado. Research of Zions and other potential
acquirors was conducted, including research in filings with the SEC pursuant to
the Exchange Act and research in other market sources. Based on the results of
such research, the prices Zions had paid for similarly performing financial
institutions in the past, and Zions' status as one of the nation's
top-performing banking organizations, Mr. Adams identified Zions as a favored
potential acquiror. Subsequently, contact was initiated with management of
Zions. Several rounds of discussions resulted in an initial offer in October
1997 for an exchange of the stock of the Company for stock of Zions. After
discussing the initial offer, the Board authorized Timothy S. Borden, Chairman
of the Company, to negotiate a definitive agreement with Zions.


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      In November and December 1997, Mr. Borden and the Board negotiated the
terms of a definitive agreement with Zions. The Board met again during December
1997, to review and vote upon the Plan of Reorganization and the transactions
contemplated thereby. In considering the Plan of Reorganization and the
transactions contemplated thereby, the Board determined that the Zions offer
would maximize value for the Company's shareholders, while providing a favorable
structure for the transaction in which the Company's shareholders would receive
liquid securities without triggering tax consequences (except for shareholders
receiving cash in the Reorganization). Further, the Board believes that Zions is
fully capable of consummating the Reorganization. Moreover, the Board believes
that the Zions transaction will result in positive effects for the employees of
the Company and the Bank, the customers of the Bank, and the communities in
which the Bank operates. Based on the foregoing, the Board of Directors of the
Company approved the Plan of Reorganization, and the Plan of Reorganization was
executed on behalf of the Company and the Bank effective January 21, 1998.

       The Company Board believes that the Reorganization is fair to, and in the
best interests of, the Company and its shareholders. Accordingly, the Board of
Directors of the Company 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 of Directors
of the Company considered a number of factors, including, without limitation,
the following:

      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 and the Bank
             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 merger and acquisition pricing reported by
             qualified and informed investment banking organizations, 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 the
             Company Common Stock if the Company were to remain independent;

      o      the historically greater liquidity 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

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             combined institution in the Company's market area and its ability
             to serve the depositors, customers and communities currently
             served by the Company and the Bank;

      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 AND ADOPTION OF THE PLAN OF REORGANIZATION AND THE REORGANIZATION.

      Zions. For Zions, the Reorganization will provide the opportunity to
continue its recent expansion. In acquiring the Company, Zions will be
broadening its Colorado presence into Northwest Colorado and into Steamboat
Springs, Colorado. Zions does not currently have any offices in Northwest
Colorado or Steamboat Springs. The expansion will be evidenced by Zions'
broadening its geographical base in Colorado by establishing a presence in this
market. Additionally, the Zions' expansion in the Northwest Colorado region will
allow Zions further to diversify its banking operations.

      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


         All of the directors and executive officers of the Company have agreed
to support the Plan of Reorganization and to recommend its adoption by the other
shareholders of the Company. As of April 28, 1998, fifteen individuals and their
affiliated entities beneficially owned 100% of the outstanding shares of Company
Common Stock. All of such shareholders, including all Board members, and such
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 Plan of Reorganization. Various of such shareholders are officers and
directors of the Company. 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 Plan of Reorganization and the Reorganization by the
Company shareholders is assured.


      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

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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 and the Reorganization requires the
affirmative vote of the holders of a majority of the outstanding shares of
Company Common Stock entitled to vote at the Special Meeting. Because approval
requires the affirmative vote of a majority of all outstanding shares 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 and the 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 AND THE
REORGANIZATION.

      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.

No Opinion of a Financial Advisor

      The Company's Board of Directors has not retained an independent financial
advisor to evaluate the Merger Consideration offered to the Company's
shareholders by Zions. However, management and the directors of the Company
believe 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--Background of and Reasons for the
Reorganization."

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
650,000 shares of Zions Common Stock, which may be adjusted downward if
Transaction Expenses exceed $100,000, 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 and assuming that Transaction

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Expenses do not exceed $100,000, the shareholders of the Company will receive
approximately 2.04 shares of Zions Common Stock for each share of Company Common
Stock.


         On April 27, 1998, the closing price of Zions Common Stock was $48.0625
per share. On that date there were 318,664.47 issued and outstanding shares of
Company Common Stock. Assuming that the Reorganization had been consummated as
of April 27, 1998, that the closing price of Zions Common Stock had been
$48.0625 per share on that date, and that Transaction Expenses had not exceeded
$100,000, shareholders of the Company under such circumstances would have
received approximately 2.04 shares of Zions Common Stock for each share of
Company Common Stock, or an equivalent value of approximately $98.0475 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 $43.9375. Such fractional share interest will not include the
right to vote or to receive dividends or any interest thereon.

      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

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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 Slivka Robinson Waters &
O'Dorisio, P.C., legal counsel to the Company (the "Slivka 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 Slivka 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.

      The foregoing is intended only as a summary of certain federal income tax
consequences of the Merger 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 Merger. Among other things, this 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

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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 Slivka Opinion to be rendered as to the material federal
income tax consequences relating to the Reorganization is attached and set forth
in Appendix A of this 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 B 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 Routt 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 vote is taken at 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 2155 Resort Drive, Steamboat Springs, Colorado 80477-
4747 long enough before the Special Meeting so that the Company receives it
before the vote is taken at 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. A vote by a shareholder at the Special
Meeting against the Plan of Reorganization and the Reorganization will not
constitute notice under Colorado law of an intent to exercise appraisal rights.

      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

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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 Routt 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.


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      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 B 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, James A. Simon, currently president and chief executive officer of
the Bank, will become an executive officer of Bank Colorado. Mr. Simon will
enter into an employment agreement with Bank Colorado 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 third anniversary of the commencement
of the agreement. The agreement provides that Mr. Simon will receive a salary
not less than the aggregate salary paid to Mr. Simon by the Bank as of September
30, 1997. Mr. Simon 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. Mr. Simon will have exclusive use of a Ford Explorer vehicle
which the Bank purchased for his use in 1997, and the reasonable expenses of
maintaining, insuring and garaging the vehicle will be paid by Bank Colorado.

      The employment agreement provides for severance benefits for Mr. Simon
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. Simon 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 third anniversary of the
commencement of the agreement. Mr. Simon 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.

      Under his employment agreement, Mr. Simon has agreed that he will not
during the term of his employment and until the second anniversary of the date
of termination of his employment by Bank Colorado pursuant to the employment
agreement (i) engage in the banking business other than on behalf of Zions or

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Bank Colorado or their affiliates within the market area of Routt County,
Colorado and the town of Craig, Colorado; (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
Zions or Bank Colorado or their 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 Bank Colorado or any of its affiliates to engage in any action
prohibited under (i) or (ii) above.

      The Plan of Reorganization further provides that after the Reorganization
becomes effective, Timothy S. Borden, currently chairman of the board and a
significant shareholder of the Company, and John R. Adams, currently a director
and a significant shareholder of the Company, will each enter into a
non-competition agreement with Bank Colorado effective of the Effective Date.
The Company Board of Directors was aware of these interests when it considered
and approved the Plan of Reorganization. Mr. Borden's non-competition agreement
also governs the assignment of the trademark "First National Bank of Colorado,"
and the associated logo wherein for $1,000 to be paid by Mr. Borden, Bank
Colorado will assign to Mr. Borden all right, title and interest in and to the
trademark and logo, and goodwill of the business associated with the trademark.
Mr. Borden has agreed that he will not during the term of three years commencing
with the date of his non-competition agreement use the trademark "First National
Bank of Colorado" and associated logo within the prescribed market area of Routt
County, Colorado and the town of Craig, Colorado.

      Under their non-competition agreements, Mr. Borden and Mr. Adams have
agreed that they will not during the term of 16 months after January 21, 1998,
(i) engage in the banking business other than on behalf of Zions or Bank
Colorado or their affiliates within the prescribed market area of Routt County,
Colorado and the town of Craig, Colorado; (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
Zions or Bank Colorado or their 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 Bank Colorado or any of its affiliates to engage in any action
prohibited under (i) or (ii) above.

Inconsistent Activities

      The Company has agreed in the Plan of Reorganization that unless and until
the Holding Company Merger 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

                                       24

<PAGE>



assets or of any other matter which could adversely affect the Plan of
Reorganization, the Holding Company Merger, or the Bank Merger, the Company is
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.

         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 (a) cash dividends paid by
the Company to holders of its Common Stock in amounts not to exceed $0.48 per
share with respect to the fourth quarter of 1997 and $0.49 per share with
respect to subsequent quarters or (b) cash dividends paid by the Bank to the
Company to fund any cash dividend paid pursuant to the foregoing clause (a);
(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,
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) 4.5% per annum of the aggregate payroll as of November 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 or firm except to directly facilitate the
Reorganization; nor (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 the 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.


                                       25

<PAGE>



Conditions to the Reorganization

         The obligations of the Company, the Bank, Zions, Val Cor and Bank
Colorado 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) certain litigation,
as specified in the Plan of Reorganization, shall not have been instituted or
threatened; (iii) 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; (iv) 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 (v) there shall be no adverse legislation or
government regulation which would make the transaction contemplated impossible.

         The obligations of Zions, Val Cor and Bank Colorado to consummate the
Reorganization are subject to satisfaction or waiver of certain additional
conditions, including: (i) the shareholders of the Company and the Bank shall
have authorized the Holding Company Merger and Bank Merger, respectively; (ii)
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; (iii) Slivka Robinson Waters & O'Dorisio, P.C., legal 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 October
31, 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) $6,570,000 and (b) the aggregate contributions
to capital caused by the payments accompanying the exercise of any stock options
on or after October 31, 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 $441,000; (ix)
the CRA rating of the Bank shall be no lower than "satisfactory"; (x) Mr. Simon
shall have entered into an employment agreement with Bank Colorado in the form
set forth in the Plan of Reorganization; (xi) Bank Colorado and the lessor of
the Bank premises located at 2155 Resort Drive, Steamboat Springs, Colorado (the
"Lessor") shall have executed and delivered such consents, lease agreements,

                                       26

<PAGE>



lease amendments, assignments, assumptions, estoppel certificates, and other
documents, in form and substance reasonably acceptable to Bank Colorado, as are
necessary to secure to Bank Colorado a leasehold interest in such premises
pursuant to the following terms: (a) an initial lease term of five years
commencing on the Effective Date, (b) a weighted rental rate during such initial
lease term not exceeding fair market value for such term in the Steamboat
Springs, Colorado real estate market generally, and (c) four five-year renewals,
at the option of the tenant, at a weighted rental rate during each of such
option periods whose increase over the weighted rental rate of the prior
five-year period shall not exceed the lesser of (1) rental-rate increases
prevailing in the Steamboat Springs, Colorado real estate market generally for a
similar period or (2) 75% of the change in the Colorado Consumer Price Index (or
in the absence thereof such other price inflation index upon which Zions and the
Lessor shall mutually agree) for a similar period; (xii) Mr. Borden and Mr.
Adams shall have each entered into a non-competition agreement with Bank
Colorado in the form set forth in the Plan of Reorganization; (xiii) 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; and (xiv) the audit of the
consolidated accounts of the Company and the Bank by Fortner, Bayens, Levkulich
and Co., P.C. as of December 31, 1997 and for the year then ended shall have
been completed, and no material adverse change to the financial condition of the
Company shall have been revealed, nor shall any material adjustments to the
financial accounts of the Company or the Bank have been recorded, as a result
thereof.

         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 Bank Colorado shall have
authorized the Bank Merger; (ii) all representations and warranties made by
Zions, Val Cor and Bank Colorado in the Plan of Reorganization shall be true and
correct in all material respects on the Effective Date and Zions, Val Cor and
Bank Colorado 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, legal counsel to Zions, in form
and substance as set forth in the Plan of Reorganization; (iv) during the period
from September 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 (v) Zions Common
Stock shall be quoted on NASDAQ or shall be listed on a national securities
exchange.

Representations and Warranties

         The representations and warranties of Zions, Val Cor, Bank Colorado,
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
October 31, 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 October 31, 1997 no material deterioration
in the

                                       27

<PAGE>



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
Bank Colorado, 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 Bank Colorado 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 its
shareholders.

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 Bank Colorado, 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 Bank Colorado was materially incorrect when
made or in the event of a material breach or material failure by Zions, Val Cor
or Bank Colorado of any covenant or agreement of Zions, Val Cor or Bank Colorado
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 May 31, 1998 if the Effective Date has not occurred on or before
that date.


         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

                                       28

<PAGE>



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
$500,000.

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, be 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. Additionally, such Company affiliates will not be permitted to
sell any shares of Company Common Stock or Zions Common Stock during the 30 day
period preceding the Effective Date, nor will they be permitted to sell any
shares of Zions Common Stock following the Effective Date until such time as
financial results covering at least 30 days of post-Holding Company Merger
combined operations shall have been published by Zions. 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. All regulatory approvals have been obtained.



                                       29

<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 [second] 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
[second] 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, and the Company shall have received a letter to the above effect
from Fortner, Bayens, Levkulich & Co., P.C., 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 Combined Financial Information

         The following unaudited pro forma 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, 1997 is presented for
comparative and illustrative purposes only and is 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.


                                       30

<PAGE>

<TABLE>
<CAPTION>



                                                      Historical                                 Pro Forma
                                             ---------------------------            -----------------------------------
                                                                                      Zions and
                                                                                     Routt County         Routt County
                                                                                     Pro-Forma            Equivalent
Per Common Share                             Zions          Routt County             Combined(4)          Pro-Forma(5)
- ----------------                             -----          ------------             -----------          ------------
<S>                                           <C>             <C>                     <C>                    <C>
NET INCOME (diluted)(1)
 For the years ended
 December 31, 1997                            $ 1.89          $ 5.56                  $ 1.90                 $ 3.88   
 December 31, 1996                              1.68            5.70                    1.69                   3.46   
 December 31, 1995                              1.37            3.84                    1.38                   2.81   
                                                                                                                    
CASH DIVIDENDS(2)                                                                                                   
 For the years ended                                                                                                
 December 31, 1997                            $.4700          $ 1.86                  $  .4700               $  .9588 
 December 31, 1996                             .4250            3.00                     .4250                  .8670 
 December 31, 1995                             .3525            1.60                     .3525                  .7191 
                                                                                                                    
BOOK VALUE:(3)                                                                                                      
 As of December 31, 1997                      $10.25          $21.37                  $10.25                 $20.91   
       December 31, 1996                        8.72           17.57                    8.74                  17.82   
       December 31, 1995                        7.46           15.20                    7.48                  15.26   
</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 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 2.04 shares of Zions Common Stock.

                           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

                                       31

<PAGE>



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," 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. 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.

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

                                       32

<PAGE>



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, 1997, Zions' Tier 1 and Total Capital ratios were 11.74% and
13.75%, 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 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.

          The following table presents Zions' regulatory capital position at
December 31, 1997 under the risk-based capital guidelines.


                                       33

<PAGE>



                               Risk-Based Capital
                             (Dollars in thousands)

                                                                     Percent
                                                                     of Risk-
                                                                     Adjusted
                                                    Amount            Assets
                                                    ------            ------

Tier 1 Capital.............................        $  660,446          11.74%
Minimum Requirement........................           224,975           4.00
                                                   ----------        -------
  Excess...................................        $  435,471           7.74%
                                                   ==========        =======

Total Capital..............................        $  773,245          13.75%
Minimum Requirement........................           449,950           8.00
                                                   ----------        -------
  Excess...................................        $  323,295           5.75%
                                                   ==========        =======

Risk-Adjusted Assets,
  net of goodwill, excess deferred
  tax assets and excess allowance..........        $5,624,373         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
December 31, 1997, Zions' leverage ratio was 6.75%.

         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.

         The following table presents Zions' leverage ratio at December 31,
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.



                                       34

<PAGE>




                                                                      Percent
                                                                    of Average
                                                                    Assets, Net
                                                     Amount         of Goodwill
                                                     ------         -----------

                                                     (Dollars in thousands)
Tier 1 Capital.............................        $  660,446           6.75%
Minimum Requirement........................           293,537           3.00
                                                   ----------         ------

Excess.....................................        $  366,909           3.75%
                                                   ==========         ======

Average Assets, net of goodwill and
  deferred tax assets......................        $9,784,570         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 hiring of senior executive officers.


                                       35

<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 impose other
operating restrictions.

         FDICIA also contains provisions which, among other things, restrict
investments and activities as principal by state nonmember banks to those for
which national banks are eligible, 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

                                       36

<PAGE>


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 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.

         Until June 30, 1998, 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

                                       37

<PAGE>



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, established by the Federal Housing Finance Board pursuant to
FIRREA, to enable it to pay interest and certain other expenses on bonds which
it issued 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 first semi-annual period of 1998 have been set at
1.256 basis points annually for the first quarter and 1.211 basis points for the
second quarter for BIF-assessable deposits and 6.28 and 6.22 basis points
annually, respectively, for SAIF-assessable deposits.

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 and 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

                                       38

<PAGE>



"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.

         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 and certain other requirements are satisfied.

                                 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.


                                       39

<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."

                                       40

<PAGE>



ZIONS BANCORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except per share and ratio data)
<TABLE>
<CAPTION>

                                                                                  As of, and for the
                                                                                Year Ended December 31,
                                                         --------------------------------------------------------------------
                                                             1997         1996         1995           1994           1993
                                                             ----         ----         ----           ----           ----
EARNINGS SUMMARY
- ----------------
<S>                                                      <C>          <C>          <C>            <C>            <C>        
Taxable-equivalent net interest income                   $   358,676  $   296,372  $   238,880    $   203,313    $   178,636
Net interest income                                          351,799      289,166      233,547        198,606        174,657
Noninterest income                                           143,167      114,270       88,811         73,202         79,880
Provision for loan losses                                      6,175        4,640        3,000          2,181          2,993
Noninterest expenses (1)                                     301,218      235,272      195,186        174,900        167,750
Income taxes                                                  65,211       56,101       41,787         30,900         27,248
Income before cumulative effect of changes
     in accounting principles                                122,362      107,423       82,385         63,827         56,546
Cumulative effect of changes in
     accounting principles (2)                                     -            -            -              -          1,659
Net income                                                   122,362      107,423       82,385         63,827         58,205

COMMON STOCK DATA
- -----------------
Earnings per common share:
Income before cumulative effect of
     changes in accounting principles - diluted          $      1.89  $      1.68  $      1.37    $      1.09    $       .99
Net income - basic                                              1.92         1.70         1.39           1.11           1.03
Net income - diluted                                            1.89         1.68         1.37           1.09           1.02
Dividends declared per share                                   .4700        .4250        .3525          .2900          .2450
Dividend payout ratio (%)                                      23.20%       23.27%       24.95%         27.06%         21.81%
Book value per share at year end                               10.25         8.72         7.46           6.28           5.50
Market to book value at year end (%)                          442.73%      298.17%      268.90%        142.83%        168.18%
Average common shares outstanding                         63,868,000   63,194,000   59,435,000     57,754,000     56,636,000
Weighted average common and common
     equivalent shares outstanding during the year        64,629,000   63,787,000   60,013,000     58,404,000     57,120,000
Common shares outstanding at year end                     63,962,100   63,468,480   62,773,280     58,238,208     56,805,468
                                                                        6201,3672        7,544

AVERAGE BALANCE SHEET DATA
- --------------------------
Money market investments                                 $ 1,490,772  $   923,670  $   945,842    $   869,709    $   788,694
Securities                                                 2,575,295    1,977,875    1,665,500      1,545,704      1,209,165
Loan and leases, net                                       4,341,674    3,432,347    2,662,753      2,574,995      2,222,182
Total interest-earning assets                              8,407,741    6,333,892    5,274,095      4,990,408      4,220,041
Total assets                                               9,214,155    6,914,213    5,779,025      5,456,613      4,643,918
Interest-bearing deposits                                  4,410,491    3,653,420    3,095,714      2,744,976      2,449,275
Total deposits                                             5,783,370    4,731,889    3,963,702      3,583,094      3,178,926
FHLB advances and other borrowings over one                  136,381       87,700       96,305        118,607        111,974
year
Long-term debt                                               257,779       55,187       57,506         59,493         75,623
Total interest-bearing liabilities                         7,067,324    5,208,318    4,397,582      4,197,865      3,556,746
Shareholders' equity                                         615,535      512,739      407,498        339,181        286,331

YEAR END BALANCE SHEET DATA
- ---------------------------
Money market investments                                 $   814,088  $   613,429  $   687,251    $   403,446    $   597,680
Securities                                                 2,712,094    1,983,643    1,694,669      1,663,433      1,258,939
Loans and leases, net                                      4,871,650    3,837,149    3,068,057      2,391,278      2,486,346
Allowance for loan losses                                     80,481       76,803       73,437         67,018         68,461
Total assets                                               9,521,770    7,116,413    6,095,515      4,934,095      4,801,054
Total deposits                                             6,854,462    5,119,692    4,511,184      3,705,976      3,432,289
FHLB advances and other borrowings over one                  210,681       81,875       95,817        101,571        152,109
year
Long-term debt                                               258,566      251,620       56,229         58,182         59,587
Shareholders' equity                                         655,460      554,610      469,678        365,770        312,592
</TABLE>




                                       41

<PAGE>



<TABLE>
<CAPTION>

                                                                                As of, and for the
                                                                              Year Ended December 31,
                                                         ----------------------------------------------------------------------
                                                                1997         1996         1995           1994           1993
                                                                ----         ----         ----           ----           ----
<S>                                                      <C>          <C>          <C>            <C>            <C>        
Nonperforming assets:
     Nonaccrual loans                                    $    11,907  $    12,704  $    10,875    $    13,635    $    23,364
     Restructured loans                                          691          857          249            567          4,006
     Other real estate owned and other
          nonperforming assets                                 3,371          138        1,609          4,741          3,267
     Total nonperforming assets                               15,969       13,699       12,733         18,943         30,637
Accruing loans past due 90 days or more                        9,944        3,563        5,309          3,041         10,821

SELECTED RATIOS
- ---------------
Net interest margin (3)                                         4.27%        4.68%        4.53%          4.07%          4.23%
Return on average assets                                        1.33%        1.55%        1.43%          1.17%          1.25%
Return on average common equity                                19.88%       20.95%       20.22%         18.82%         20.33%
Ratio of average common equity to average assets                6.68%        7.42%        7.05%          6.22%          6.17%
Tier I risk-based capital - year end                           11.74%       14.16%       11.33%         11.81%         10.85%
Total risk-based capital - year end                            13.75%       17.52%       14.03%         14.96%         14.12%
Leverage ratio - year end                                       6.75%        8.70%        6.33%          6.24%          5.44%
Ratio of nonperforming assets to total
     assets - year end                                           .17%         .19%         .21%           .38%           .64%
Ratio of nonperforming assets to net loans and
     leases and other real estate owned and
     other nonperforming assets at year end                      .33%         .36%         .41%           .79%          1.23%
Ratio of net charge-offs (recoveries) to average
     loans and leases                                            .19%         .11%         .10%           .19%         (.23)%
Ratio of allowance for loan losses to net loans
     and leases outstanding at year end                         1.65%        2.00%        2.39%          2.80%          2.75%
Ratio of allowance for loan losses to
     nonperforming loans at year end                          638.84%      566.35%      660.17%        471.89%        250.13%
</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 earlier 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 Bancorporation 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.

                                       42

<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-NMS. 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.


                                                                      Cash
                                                                    Dividends
                                            High         Low        Declared
                                            ----         ---        --------

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       21.94          .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...........................   46.00       37.63          .12
                                                                     --------
                                                                     $ .47
                                                                     ========
                                                                
1998                                                            
First Quarter............................  $55.69      $39.56        $ .12
Second Quarter (through April 27, 1998)..   53.13       48.06           --
                                           

         On January 21, 1998, the last NASDAQ-NMS trading day prior to the
public announcement of the Reorganization, the closing sale price for the Zions
Common Stock was $44.00. On April 27, 1998, the last trading date before this
Proxy Statement/Prospectus was sent to the printers, the closing sale price for
the Zions Common Stock was $48.0625. On April 27, 1998, there were
approximately 69,138,844 shares of Zions Common Stock outstanding, held by
approximately 5,438 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.

Principal Holders of Zions Common Stock

         The following table sets forth as of February 27, 1998, the record and
beneficial ownership of Zions Common Stock by the principal common shareholders
of Zions.


                                       43

<PAGE>


<TABLE>
<CAPTION>

                                                                                     No. of            % of
Name and Address                                     Type of Ownership               Shares            Class
- ----------------                                     -----------------               ------            -----
<S>                                                 <C>                              <C>               <C>  
Roy W. Simmons                                      Record and Beneficial            2,279,815         3.30%
         One South Main                             Beneficial(1)                    1,991,376         2.88%
         Salt Lake City, Utah  84111                                                 ---------         ----
                                                                                     4,271,191         6.18%

Zions First National Bank                           Record(2)                        4,581,741         6.60%
         One South Main
         Salt Lake City, Utah  84111
</TABLE>

- ---------- 

(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 February 17, 1998, 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 3,296,197
     shares (4.7% 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 1,007,804 shares (1.4% of the class) and the
     Zions Bancorporation PAYSOP Plan, which holds 277,740 shares (.4% 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 February 27, 1998,
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                           9,800                     * (1)

Grant R. Caldwell                        7,000                     * (1)

R.D. Cash(3)                            27,000                     * (1)

Richard H. Madsen                      197,622                     * (1)

Roger B. Porter(3)                       3,000                     * (1)

Robert G. Sarver(3)                    818,124                      1.18

Harris H. Simmons                    2,498,662(2)                   3.62

L. E. Simmons(3)                     2,296,229(2)                   3.33

Roy W. Simmons(3)                    4,271,191(2)                   6.19


                                       44

<PAGE>



I. J. Wagner(3)                         285,000(2)                  * (1)

All directors and officers
  as a group (31 persons)             7,945,288                    11.44

- ----------
(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.
(3)      These individuals also own phantom stock through the Company's Deferred
         Compensation Plan for Directors which are not included in the above
         totals. The amount of phantom stock held as of December 31, 1997 was as
         follows: Mr. Cash, 24,134 shares; Mr. Porter, 8,313 shares; Mr. Sarver,
         3,545 shares; Mr. L.E. Simmons, 5,193 shares; Mr. Roy Simmons, 20,137
         shares; and Mr. Wagner, 2,891 shares.

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,
              1997 ("Zions Form 10-K");

       2.     Zions' Current Reports on Form 8-K filed by Zions on February
              6, 1998 and April 15, 1998;

       3.     The description of Zions Common Stock which is contained in
              Zions' registration statement on Form 10, and any amendment or
              report filed for the purpose of updating such description; and

       4.     The description of the Zions Rights Plan contained in Zions'
              registration statement on Form 8-A dated October 10, 1996, and
              any amendment or report filed for the purpose of updating such
              description.

         The Company shareholders who wish to obtain copies of any Zions
document incorporated by reference herein may do so by following the
instructions under the section titled "Available Information" in the initial
pages of this Proxy Statement/Prospectus.

         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

                                       45

<PAGE>



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.

                 INFORMATION CONCERNING THE COMPANY AND THE BANK

General

         The First National Bank of Colorado (formerly known as the First
National Bank of Steamboat Springs) was organized under national law on November
1, 1984. The Bank is a wholly-owned subsidiary of the Company. The Company
became a registered bank holding company under the Bank Holding Company Act in
May 1991. The outstanding common stock of the Company is owned by eighteen
shareholders of record with 318,664.47 shares issued and outstanding. Since its
formation, the activities of the Company have been limited to ownership and
operation of the Bank. As a registered bank holding company, the Company is
subject to regulation and examination by the Federal Reserve Bank. The Bank is
subject to regulation and examination by the Office of the Comptroller of the
Currency (the "OCC").

         Since its inception, the Bank has grown to become a strong community
banking franchise, with over $92 million in assets. Over the past 13 years, the
bank has prospered by establishing and maintaining beneficial relationships with
large and small commercial businesses and increasing the Bank's visibility as a
construction, permanent mortgage and real estate lending bank in the Bank's
geographic area.

         The Bank serves its depositors and customers by delivering a broad
range of traditional retail deposit and loan services through its two locations.
The main office of the Bank is located at 2155 Resort Drive, Steamboat Springs,
Colorado, and the Bank's only branch facility is located in downtown Steamboat
Springs at the corner of 8th and Lincoln Avenue.

Business

         The Bank is the second largest bank in Routt County, Colorado and is
one of three banks with operations in Steamboat Springs, Colorado. As of
December 31, 1997, the Bank had total assets of $92.9 million, total deposits of
$83.5 million, and total stockholders' equity of $6.8 million.

         Strategy. The Bank's strategy has been to build and maintain profitable
relationships while continuing its focus on the community banking market segment
and improving services through adoption of new technologies.

         Marketing/Customer Service. The Bank seeks to build and maintain
profitable relationships by instituting programs such as: a four-tiered program
to prioritize the bank's customer base; a referral and cross-marketing program;
various training programs; and a performance evaluation, incentive and reward
program for employees.

     Technology. Management of the Bank believes that investments in technology
improve the service provided by the Bank to depositors and customers. In
furtherance of this belief, the Bank has installed automated teller machines

                                       46

<PAGE>



("ATMs") at each of its two locations. In addition to furnishing ATMs, the Bank
has introduced a voice response unit (VRU) that provides inquiry, balance and
loan transfer capabilities. Further, the bank has invested in computers and
network capabilities. However, management of the Bank believes that affiliation
with a larger banking organization is necessary to keep pace with rapidly
changing technologies and services.

         Market Areas Served. The Bank's two facilities are both located within
the Steamboat Springs area. The main office (with attached drive-up facility) is
located at the corner of Pine Grove and Mt. Wemer Road, and the downtown branch,
is located at the corner of 8th and Lincoln. The Bank's primary market area, as
defined by the Bank's Community Reinvestment Plan, is Steamboat Springs and
Routt County, Colorado.

         Loans. 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 62% of the Bank's loan portfolio at December 31, 1997, had
interest rates that float with the Bank's base rate or some other published
reference rate.

         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 in underwriting these
commitments as it uses in all its lending activities and includes 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 $1,073,848 at December 31,
1997.

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


(In Thousands)

                                                       December 31,
                                                 1997              1996
                                                 ----              ----

Commercial                                      $36,570           $29,283
Construction                                      8,844             9,916
Real Estate Mortgage                              5,316             5,625
Consumer                                          4,736             3,900
                                                -------           -------
Total Loans                                      55,466            48,724

Less Unearned Income                                 (2)              (10)
Less Allowance for Loan Losses                     (443)             (438)
                                                -------           -------

Net Loans                                        55,021            48,276
                                                =======           =======

                                       47

<PAGE>



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

         The real estate loan category consists principally of improved real
estate loans. The Bank makes some land loans but is not actively engaged in the
origination of first mortgage loans for single family homes. The Bank does have
a mortgage loan department which brokers and sells conventional first mortgage
loans to the secondary market.

         Personal loans and credit lines represent a small percentage of total
loans. These loans are typically to individuals for non-business purposes (such
as household, family and other personal purposes), including new and used car
loans. The Bank has minimal student loans. For the past seven years, the Bank's
strategy has been to focus on floating rate loans with maturities up to five
years. Accordingly, a majority of the Bank's existing loans are floating rate
loans. Most floating rate loans have interest rates from 1.5% to 2% over prime
as reported in the Wall Street Journal. Of the Bank's $56 million of outstanding
credit commitments and $19 million of unfunded commitments at December 31, 1997,
the majority were loans with floating rates.

         The following table presents at December 31, 1997, and December 31,
1996, loans by maturity. Actual maturities may differ from the contractual
maturities as a result of renewals and prepayments. In addition, all loans due
after one year that have predetermined interest rates and that have floating or
adjustable rates are shown below:


(In Thousands)

Maturity                                    December 31, 1997
- --------                                    -----------------

Less than 1 year                                 $20,549

One year to 5 years                               24,479

Over 5 years                                      10,438
                                                 -------

          Total                                  $55,466
                                                 =======


Loans due after one year
- ------------------------

Fixed interest rate                              $15,796

Floating rate                                     19,121

         Approximately $25,463,000 at December 31, 1997, and $19,924,000 at
December 31, 1996, represent loans collateralized by commercial real estate.

         Non-Performing Assets. The Bank knows of no material loans that are now
current where there are serious doubts as to the ability of the borrower to

                                       48

<PAGE>



comply with present loan repayment terms. At December 31, 1997, the Bank had
total criticized assets (i.e. non-performing, doubtful, substandard, or loss
loans) of $487,000, representing 0.9% of total loans and 6.75% of capital.
<TABLE>
<CAPTION>

                                                                                   December 31,
                                                                                   ------------
                                                                                 1997        1996
                                                                                 ----        ----
                                                                              (Dollars in thousands)
Non performing loans:
<S>                                                                              <C>         <C> 
  Loans 90 days or more delinquent and still accruing...............             $ 10        $ 33
  Nonaccrual loans..................................................              161          --
  Troubled debt restructurings......................................               --          --
                                                                                 ----        ----
                  Total nonperforming loans.........................             $171        $ 33
                                                                                 ====        ====

Other real estate owned.............................................               --          --
Other assets acquired by foreclosure................................               --          --
                                                                                 ----        ----
                  Total nonperforming assets........................             $171        $ 33
                                                                                 ====        ====

Allowance for loan losses...........................................             $442        $438
                                                                                 ====        ====

Ratio of total nonperforming assets to total assets.................             0.18%       0.04%
Ratio of total nonperforming loans to total loans...................             0.31%       0.07%
Ratio of allowance for loan losses to total loans...................             0.80%       0.90%
Ratio of allowance for loan losses to total nonperforming loans.....              258%      1,327%
</TABLE>

         Non-performing loans. Non-performing loans consist of loans 90 days or
more delinquent and still accruing interest, non-accrual loans and troubled debt
restructurings. At December 31, 1997, the recorded investment in loans for which
impairment has been recognized totaled $161,000. There were no impaired loans at
December 31, 1996. The average recorded investment in impaired loans was
approximately $160,000 for 1997.

         Non-accrual 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 or interest income is discontinued
and all interest previously accrued, but not collected, is reversed against
current period interest income. While the loan is on a non-accrual status,
interest income is recognized only upon receipt and only if, in the judgment of
management, future collection of principal is probable. Loans 90 days or more
delinquent are changed to non-accrual 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 re-negotiated to
provide a reduction or deferral of interest or principal balance because of a
deterioration in the financial position of the borrower.

         Additional interest income on non-accrual loans that would have been
recognized in 1997 had the loans been current in accordance with their original
terms was not material. No interest income was collected in 1997 on non-accrual
loans.


                                       49

<PAGE>




         Other Real Estate Owned. Other real estate owned ("OREO") includes
property acquired in foreclosure proceedings or under agreements with delinquent
borrowers. As of December 31, 1997 and 1996, the Bank had no OREO.


         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 off(s) or recoveries are charged or credited directly to the
allowance. In general, the amount charged to earnings each year, if any, by the
Bank is based on the Bank management's judgment, which takes into consideration
a number of factors, including: (a) the Bank's historic loss experience in
relation to outstanding loans and the existing level of the allowance; (b)
recommendations by the Bank's external auditors; and (c) estimates by lending
officers of the true dollar loss exposure on classified loans. At December 31,
1997, the Bank had an allowance for loan losses of $442,000.

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


                                                      Year ended December 31,
                                                      -----------------------
                                                       1997             1996
                                                       ----             ----
                                                       (Dollars in thousands)
Balance of allowance for loan losses at
         beginning of period                           $438             $359
Charge Offs:
  Real Estate loans                                      --               --
  Installment loans                                      --                2
  Credit cards and related plans                          8                7
  Commercial and all other loans                          6                0
  Lease financing receivables                            --               --
                                                       ----             ----

         Total charge-offs                               14                9
                                                       ----             ----

Recoveries:
  Real Estate loans                                      --               --
  Installment loans                                       1                1
  Credit cards and related plans                          1               --
  Commercial and all other loans                         16               87
  Lease financing receivables                            --               --
                                                       ----             ----

         Total recoveries                                18               88
                                                       ----             ----

Net (charge-offs) recoveries                              4               79
Provision for loan losses                                --               --
                                                       ----             ----

Balance of allowance for loan losses
         at end of period                              $442             $438
                                                       ====             ====

Ratio of net (charge-offs) recoveries
  to average loans                                     0.01%            0.19%
Average loans outstanding during period             $51,960          $42,126


                                       50

<PAGE>



Investment Securities

         The Bank maintains a portfolio of investment securities to provide
additional diversification and earnings on funds not being utilized for loan
activity or other purposes. The Bank has formalized an investment policy that
the Bank may invest in direct obligations of the U.S. Treasury; securities
backed by Federal agencies; state, county and municipal securities that
represent general obligations of the issuer; revenue bonds rated Baa or higher
by Moody's or Standard & Poor's; money market instruments of federally insured
institutions; and corporate securities rated Baa or higher. To reduce investment
risk and ensure that investments do not exceed legal investment limits, the
Bank's Asset Liability Committee meets at least monthly to consider the
investment securities portfolio and its quality, maturity, marketability and
risk diversification. The Asset Liability Committee reports to the Board of
Directors of the Bank on a monthly basis.

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

<TABLE>
<CAPTION>
                                                        December 31, 1997                  December 31, 1996
                                                        -----------------                  -----------------
                                                   Amortized           Market          Amortized          Market
                                                      Cost             Value              Cost             Value
                                                      ----             -----              ----             -----
                                                                         (Dollars in thousands)
<S>                                                  <C>               <C>               <C>              <C>   
Securities available for sale:
U.S. Treasury                                        $3,244            $3,251            $4,727           $4,750
U.S. Agency                                           1,479             1,483             1,487            1,506
Mortgage-backed                                       6,047             6,127             7,795            7,802
Federal Home Loan Bank and
  Federal Reserve Bank Stock                            405               405               405              405
                                                    -------           -------           -------          -------
Total securities available for sale                 $11,175           $11,266           $14,414          $14,463
                                                    =======           =======           =======          =======

Securities held to maturity:
U.S. Treasury                                        $1,003            $1,007              $501             $493
U.S. Agency                                           7,603             7,623             2,654            2,670
Mortgage-backed                                       4,547             4,624             6,379            6,412
States & political subdivisions                          40                40               135              135
                                                    -------           -------            ------           ------
Total securities available for sale                 $13,193           $13,294            $9,669           $9,710
                                                    =======           =======            ======           ======

</TABLE>



                                       51

<PAGE>



         The following table sets forth the carrying values, maturities and
weighted average yields of the Bank's securities portfolio at December 31, 1997.

<TABLE>
<CAPTION>
                                                                                 Due after 
                                      Due in one        Due after one year       five years           Due after
                                     year or less       through five years    through 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 available for sale:                                                
U.S. Treasury                       $2,750      6.10%    $  501     6.17%       $ --     0.00%    $   --     0.00%   $ 3,251   6.11%
U.S. government agencies               507      8.03%       976     6.39%         --     0.00%        --     0.00%     1,483   6.95%
Mortgage backed securities             188      6.50%       567     6.62%        331     8.80%     5,041     6.76%     6,127   6.84%
State and political subdivisions        --      0.00%        --     0.00%         --     0.00%        --     0.00%        --   0.00%
Federal Home Loan Bank and                                                    
  Federal Reserve Bank Stock            --      0.00%        --     0.00%         --     0.00%       405     0.00%       405   0.00%
                                    ------               ------                 ----              ------             -------
     TOTAL                          $3,445      6.40%    $2,044     6.40%       $331     8.80%    $5,446     6.76%   $11,266   6.64%
                                    ======               ======                 ====              ======             =======
                                                                              
Securities held to maturity:                                                  
U.S. Treasury                       $  501      5.07%    $  502     6.61%       $ --     0.00%    $   --     0.00%   $ 1,003   5.84%
U.S. government agencies             1,100      5.91%     6,503     6.67%         --     0.00%        --     0.00%     7,603   6.56%
Mortgage backed securities             149      7.75%       714     6.65%        538     7.65%     3,146     7.17%     4,547   7.17%
State and political subdivisions        20      4.25%        20     4.45%         --     0.00%        --     0.00%        40   4.35%
                                    ------               ------                 ----              ------             -------
     TOTAL                          $1,770      5.81%    $7,739     6.66%       $538     7.65%    $3,146     7.17%   $13,193   6.71%
                                    ======               ======                 ====              ======             =======
</TABLE>



                                       52

<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>
                                                        Years ended December 31,
                                    ---------------------------------------------------------
                                              1997                            1996
                                    ---------------------------    --------------------------
                                                     Weighted                     Weighted
                                     Average         Average       Average         Average
                                     Balance      Interest Rate    Balance      Interest Rate
                                     -------      -------------    -------      -------------
                                                   (Dollars in thousands)
<S>                                    <C>            <C>            <C>           <C>   
NOW and MMDA                         $24,748          3.409%       $19,595         3.077%
Savings                                4,041          2.731%         4,397         2.731%
Time Cd's < 100k                      12,215          5.882%        13,174         5.423%
Time Cd's > 100k                      20,415          6.114%        14,850         6.049%
                                     -------                       -------
Total Interest Bearing Deposits       61,419          4.755%        52,016         4.490%
Non-interest bearing DDA              15,341                        14,035
                                     -------                       -------
Total Deposits                       $76,760                       $66,051
                                     =======                       =======
</TABLE>


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

                                              
                                              
                                               December 31, 1997  
                                               -----------------  
         Remaining maturity                      (In thousands)   
         Under 3 months                              $ 7,476
         3 to 6 months                                 4,823
         6 to 12 months                                6,299
         Over 12 months                                2,938
                                                     -------

         Total                                       $21,536
                                                     =======


         Return on Bank Assets and Equity. The following table sets forth for
the Bank as of December 31, 1997, 1996 and 1995 returns on assets, returns on
equity and certain related ratios:


                                       53

<PAGE>



                                         Years ended December 31,
                                 --------------------------------------------
                                 1997                1996                1995
                                 ----                ----                ----

Return on assets*                2.08%               2.41%                1.80%
Return on equity**              28.59%              34.48%               28.29%
Equity to assets ratio***        7.26%               7.00%                6.37%
Dividend payout ratio****       33.45%              52.63%               41.67%
- ----------
*        Net income divided by average total assets.
**       Net income divided by average stockholders' equity.
***      Average total equity divided by average total assets.
****     Dividends paid per share divided by net income per share.


Competition

         The banking industry in the Steamboat Springs area is highly
competitive. The Bank faces competition from regional bank holding companies,
such as Community First Bankshares, Inc. and Norwest Corporation. Additionally,
there is competition from savings and loan companies, credit unions, investment
companies and other types of financial services companies and from smaller
independent banks located in nearby communities.

         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. Some 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. Furthermore, because larger
financial institutions frequently benefit from economies of scale, many of the
Bank's competitors are able to offer more attractive interest rates, lower cost
services and a wider range of services and products.

         The Bank believes that it has been successful in the past in competing
due to its focus in the community banking market segment on building and
maintaining comprehensive banking relationships. However, in light of
competitive trends in the industry and the Bank's geographic area, management of
the Company and the Bank believe that the Bank will face increasing competitive
pressure from larger, regional bank holding companies that currently have
acquired or will acquire banks or branches serving the Routt County market.

The Bank's Facilities

         The Bank's main office facility, and the attached drive-up facility,
are leased from the First National Land Company, which is principally owned by
the Bank's major shareholders, John R. Adams and Timothy S. Borden. Lease costs
are considered competitive with the local marketplace. The downtown Steamboat
Springs branch is leased from an unaffiliated landlord at competitive rates.


                                       54

<PAGE>



Legal Proceedings

         From time to time, the Bank is involved in routine litigation,
including foreclosure proceedings, in the ordinary course of its business. Other
than one foreclosure proceeding, the Bank is not involved in any litigation as
of the date of this Proxy Statement/Prospectus. The Company is involved in no
litigation as of the date of this Proxy Statement/Prospectus.

Employees

         At December 31, 1997, the Company and Bank had 34 full-time equivalent
employees. None of the employees is covered by a collective bargaining
agreement. Management of the Bank and Company believe that their relationships
with their employees are 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 national banking association organized under the laws of
the United States. 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 OCC.

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.



                                       55

<PAGE>



ROUTT COUNTY NATIONAL BANK CORPORATION AND SUBSIDIARY
SELECTED CONSOLIDATED FINANCIAL DATA
- --------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                             As of, and for the Year Ended December 31,
                                                             ------------------------------------------
                                                            1997                 1996                1995
                                                            ----                 ----                ----
                                                                          (Dollars in thousands)
<S>                                                          <C>                  <C>                  <C>   
Earnings Summary
- ----------------
Net interest income                                          $4,535               $4,073               $3,520
Provisions for loan losses                                       --                   --                   --
Noninterest income                                              889                  946                  505
Noninterest expense                                           2,638                2,263                2,145
Income taxes                                                  1,017                  968                  692
Net income                                                    1,769                1,788                1,188

Common Stock Data
- -----------------
Net income per common share                                 $  5.56              $  5.70              $  3.84
Dividends per common share                                     1.86                 3.00                 1.60
Book value per share outstanding
  at period end                                               21.37                17.57                15.20
Weighted average common shares
  outstanding during the period                          317,908.01           313,711.69           309,621.54

Average Balance Sheet Data
- --------------------------
Securities                                                  $25,347              $26,012              $24,164
Loans and leases, net                                        51,517               41,710               34,070
Total interest-earning assets                                80,787               70,039               62,036
Total assets                                                 85,187               74,136               65,933
Interest-bearing deposits                                    61,419               52,016               46,542
Total deposits                                               76,735               66,021               58,398
Equity                                                        6,188                5,186                4,200

End of Period Balance Sheet Data
- --------------------------------
Securities                                                  $24,459              $24,132              $25,707
Loans and leases, net                                        55,021               48,276               36,296
Allowance for loan losses                                       442                  438                  359
Total assets                                                 92,854               81,271               71,456
Total deposits                                               83,437               74,108               64,323
Shareholders' equity                                          6,809                5,566                4,738

Nonperforming assets:
  Nonaccrual loans and loans past
    due 90 days or more                                     $   171              $    33              $    23
  Other real estate owned                                        --                   --                   --
                                                            -------              -------              -------
Total non performing assets                                 $   171              $    33              $    23
                                                            =======              =======              =======

Selected Ratios
- ---------------
Net interest margin                                            5.61%                5.82%                5.67%
Return on average assets                                       2.08%                2.41%                1.80%
Return on average equity                                      28.59%               34.48%               28.29%
Ratio of ending equity to ending                   
  assets                                                       7.33%                6.85%                6.63%
Ratio of nonperforming assets to                   
  total assets                                                 0.18%                0.04%                0.03%
Ratio of allowance for loan losses                 
  to loans and leases outstanding                  
  at period end                                                0.80%                0.90%                0.98%
Ratio of allowance for loan losses                 
  to nonperforming loans                                     258.48%             1327.27%             1560.87%
</TABLE>




                                       56

<PAGE>



Stock Prices and Dividends on Company Common Stock

         No established trading market for the Company Common Stock exists. Over
the years, little trading in the Company Common Stock has occurred. Reliable
information concerning the prices at which the Company 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 in private transactions. Information concerning those trading
prices has been omitted based on the Company's belief that such prices are not
necessarily representative of a fair market price for the Company Common Stock
during any particular period. Since January 21, 1998, the date the Plan of
Reorganization was executed and publicly announced, there have been no trades in
the Company's Common Stock.

         The following table sets forth the per share cash dividends declared
and paid by the Company during each of the last three years.


         1995...................................................... $1.60

         1996...................................................... $3.00

         1997...................................................... $1.86


         As of April 28, 1998 there were eighteen holders of record of the 
Company Common Stock.


Certain Transactions of the Company

         James A. Simon, president and chief executive officer of the Bank, will
serve as an executive officer of Bank Colorado 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 and other matters relating to Mr. Simon and the transaction.

         Timothy S. Borden, chairman of the board and a principal shareholder of
the Company, and John R. Adams, a director and a principal shareholder of the
Company, each will execute a non-competition agreement at Closing. Mr. Borden
will also acquire the trademark "First National Bank of Colorado" from Bank
Colorado at the Effective Date. Mr. Borden will agree at the Effective Date not
to use that trade mark in Routt County or Craig, Colorado for three years after
the Effective Date. See "Plan of Reorganization--Interests of Certain Persons
in the Transaction."

         The Bank's main office facility is leased from the First National Land
Company. The First National Land Company is principally owned by John R. Adams
and Timothy S. Borden, major shareholders of the Company. Following the
Reorganization, Bank Colorado will continue to lease such facility from the
First National Land Company pursuant to the existing lease agreement.

         The Bank has had banking transactions in the ordinary course of its
business with directors, officers, principal shareholders and their associates
on substantially 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

                                       57

<PAGE>


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 December 31, 1997, the Company's directors and executive officers and their
related parties were indebted to the Bank in the aggregate amount of $1,610,664,
none of which loans were delinquent.

Stockholdings of Directors, Officers and Certain Others

         The following table sets forth as of March 31, 1998, the beneficial
ownership of the Company's Common Stock (i) by each person known by the Company
to own beneficially more than 5% of the outstanding shares of such class, (ii)
by each executive officer of the Company, (iii) by each director of the Company,
and (iv) by all directors and executive 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.


<TABLE>
<CAPTION>

Name and Title (and address of 5%                                 
Beneficial Owners)                                                          Number of Shares              Percent of Class
- ------------------                                                          ----------------              ----------------
<S>                                                                         <C>                               <C>     
Timothy S. Borden
Chairman of the Board
P.O. Box 770570
Steamboat Springs, Colorado  80477...........................               97,535.99                         30.6077%

John R. Adams
Director
P.O. Box 770298
Steamboat Springs, Colorado  80477...........................               97,535.99(1)                      30.6077%

James A. Simon
President and Chief Executive Officer of
the Bank
P.O. Box 880789
Steamboat Springs, Colorado 80488............................               28,714.00(2)                       9.0108%

J. Edwin Hill
Director.....................................................                7,845.70                          2.4621%

Steven A. Dawes
Director.....................................................               13,183.12                          4.1370%
</TABLE>
- ----------
(1)  Includes 97,335.99 shares held in trust.
(2)  Includes 25,711 shares held by Mr. Simon and his wife as tenants in
     common, 1,003 shares held by the James A. Simon Profit Sharing Trust with
     Mr. Simon as sole Trustee, and 2,000 shares held by Mr. Simon as custodian
     for his minor children.

                                       58

<PAGE>



<TABLE>
<S>                                                                         <C>                                <C>     
Donald D. Valentine
Director
P.O. Box 881090
Steamboat Plaza, Colorado  80488.............................               21,879.843                         6.8661%

Peter L. Kurtz
Director
25545 Routt County Road, #56
Steamboat Springs, Colorado  80487...........................               21,679.84                          6.8033%

Mark A. McElhinney
Director
P.O. Box 775223
Steamboat Springs, Colorado  80477...........................               13,170.01                          4.1329%
All directors and executive officers as a                                  301,544.49
group (8 persons)............................................
</TABLE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
                     ROUTT COUNTY NATIONAL BANK CORPORATION

         The following analysis of the Company's financial condition and the
results of operations for the years ended December 31, 1997, 1996, and 1995
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.

         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.


- --------
(3)  Includes 200 shares owned by Mr. Valentine's wife; Mr. Valentine disclaims
     beneficial interest over these shares.

                                       59

<PAGE>

<TABLE>
<CAPTION>
                                                         1997                          1996                         1995
                                           -----------------------------  ----------------------------    -------------------------
                                            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>       <C>       <C>        <C>  
INTEREST-EARNING ASSETS                                                              
Securities - Taxable.....................   $25,225   $1,680    6.66%    $25,832    $1,707     6.61%     $23,898   $1,476     6.18%
Securities - Nontaxable..................       122        6    4.92%        180         8     4.44%         266       12     4.51%
Federal Funds Sold.......................     3,732      205    5.49%      2,215       120     5.42%       3,487      201     5.76%
Other investments........................       199       11    5.53%        201        11      5.4%         265       16     6.04%
Loans....................................    51,960    5,639   10.85%     42,127     4,685    11.12%      34,442    4,039    11.73%
Less allowance for loan losses...........      (443)                        (417)                           (372)
Less unrealized gain (loss) on                                                     
  securities available for sale..........        (8)                         (99)                             50
                                            -------    -----             -------     -----               -------    -----          
Net interest-earning assets..............    80,787    7,541    9.33%     70,039     6,531     9.32%      62,036    5,744     9.26%
Noninterest earning assets...............     4,400                        4,097                           3,897
                                            -------    -----             -------     -----               -------    -----          
Total Assets.............................   $85,187    7,541    8.85%    $74,136     6,531     8.81%     $65,933    5,744     8.71%
                                            =======    -----             =======     -----               =======    -----          
                                                                                   
LIABILITIES                                                                        
Interest-bearing DDA.....................   $ 7,939      225    2.83%    $ 6,572       166     2.53%     $ 7,463      195     2.61%
MMDA.....................................    16,809      619    3.68%     13,023       437     3.36%      12,104      408     3.37%
Savings..................................     4,041      110    2.72%      4,397       120     2.73%       4,989      155     3.11%
Time Deposits $100,000 & over............    20,415    1,248    6.11%     14,850       898     6.05%       8,349      554     6.64%
Other time deposits......................    12,215      719    5.89%     13,174       715     5.43%      13,637      768     5.63%
                                            -------    -----             -------     -----               -------    -----          
Total Interest-bearing deposits..........    61,419    2,921    4.76%     52,016     2,336     4.49%      46,542    2,080     4.47%
Fed funds & repurchase agreements........     1,592       85    5.34%      2,301       122     5.30%       2,888      145     5.02%
                                            -------    -----             -------     -----               -------    -----          
Total interest-bearing liabilities.......    63,011    3,006    4.77%     54,317     2,458     4.53%      49,430    2,225     4.50%
Non-interest bearing DDA.................    15,316                       14,005                          11,856
                                            -------    -----             -------     -----               -------    -----          
Total Deposits and Interest-                                                       
  Bearing Liabilities....................   $78,327    3,006    3.84%    $68,322     2,458     3.60%     $61,286    2,225     3.63%
                                            =======    -----             =======     -----               =======    -----          
Net Interest Income......................             $4,535                        $4,073                         $3,519
                                                      ======                        ======                         ======
Interest Rate Spread.....................                       4.56%                          4.79%                          4.76%
Net Interest Rate Margin.................                       5.61%                          5.82%                          5.67%
</TABLE>


                                       60

<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 to the
change due to volume.

<TABLE>
<CAPTION>

                                                           December 31,                    December 31,
                                                         1997 over 1996                   1996 over 1995
                                                         --------------                   --------------
                                                      Due to      Due to                Due to      Due to
                                                      Volume       Rate      Total      Volume       Rate    Total
                                                      ------       ----      -----      ------       ----     ----
                                                                             (Dollars in thousands)
<S>                                                   <C>            <C>      <C>         <C>        <C>      <C> 
Interest-earning assets
Securities- Taxable...........................        $  (40)        $13      $(27)       $128       $103     $231
Securities-Nontaxable.........................            (3)          1        (2)         (4)        --       (4)
Federal Funds Sold............................            83           2        85         (69)       (12)     (81)
Other investments.............................            --          --        --          (4)        (1)      (5)
Loans.........................................         1,067        (113)      954         855       (209)     646
                                                      ------       -----    ------        ----      -----     ----

Total interest income.........................        $1,107       $ (97)   $1,010        $906      $(119)    $787
                                                      ------       -----    ------        ----      -----     ----

Interest-bearing liabilities
Interest-bearing DDA..........................           $39         $20       $59        $(23)       $(6)    $(29)
MMDA..........................................           139          43       182          31         (2)      29
Savings accounts..............................           (10)         --       (10)        (16)       (19)     (35)
Time deposits $100,000 and over...............           320          30       350         394        (49)     345
Other time deposits...........................           (29)         33         4         (25)       (28)     (53)
                                                      ------       -----    ------        ----      -----     ----
Total interest-bearing deposits...............           459         126       585         361       (104)     257

Fed funds & repurchase agreements.............           (38)          1       (37)        (31)         8      (23)
                                                      ------       -----    ------        ----      -----     ----
Total interest-bearing liabilities............        $  421       $ 127    $  548        $330       $(96)    $234
                                                      ------       -----    ------        ----      -----     ----

Increase (decrease) in net interest income....        $  686       $(224)   $  462        $576      $ (23)    $553
                                                      ======       =====    ======        ====      =====     ====
</TABLE>

         The change in interest income/expense attributable to volume reflects
the change in volume times the current year's rate and the change in interest
income/expense attributable to rate reflects the change in rates times the prior
year's volume.

                                       61

<PAGE>




General

         The Company's Consolidated Financial Statements show its financial
condition and information on a consolidated basis. The Company's sole business
is ownership and operation of the Bank.

Results of Operations

Years ended December 31, 1997 and 1996

         Overview. Net income decreased by $19,000 for 1997 to $1,769,000 from
$1,788,000 for 1996. The principal component of the Bank's net income, net
interest income (i.e., the difference between interest income, principally from
loans, and interest expense, principally on customer deposits and borrowings),
increased $462,000 to $4,535,000 for 1997 from $4,073,000 for 1996. Noninterest
income decreased $57,000 from $946,000 for 1996 to $889,000 for 1997.
Noninterest expense increased by $375,000 for 1997 to $2,638,000 from $2,263,000
for 1996. Income tax expense increased $49,000 for 1997 to $1,017,000 from
$968,000 for 1996. Return on average assets and return on average equity were
2.08% and 28.59%, respectively, for 1997 compared to 2.41% and 34.48%,
respectively, for 1996.

         Interest Income. Interest income increased $1,010,000 to $7,541,000 for
1997 from $6,531,000 for 1996. Interest income on loans increased $954,000 and
interest income on securities and federal funds sold increased $56,000 for 1997
compared to 1996. The increase in interest income on loans was due to a
prosperous local economy and the Bank's business development efforts. The
increase in interest income from securities was the result of the overall growth
of the Bank and interest income generated from the sale of federal funds. The
rates earned on loans and investments have remained relatively stable.

         Interest Expense. Interest expense increased $548,000 to $3,006,000 for
1997 from $2,458,000 for 1996. The increase in interest expense was primarily
due to increased interest-bearing deposits. Interest-bearing deposits were up
$9,403,000 for 1997 to $61,419,000 from $52,016,000 for 1996. Rates paid on
interest-bearing deposits have remained relatively stable.

         Net Interest Income. Net interest income increased $462,000 to
$4,535,000 for 1997 from $4,073,000 for 1996. During 1997, average loans
outstanding increased $9,833,000, average securities, including federal funds
sold, increased $850,000, while net interest margin (i.e., net interest income
divided by average interest-earning assets) decreased 0.21% (from 5.82% for 1996
to 5.61% for 1997).

         Noninterest Income. Noninterest income decreased $57,000 to $889,000
for 1997 from $946,000 for 1996. The decrease was due primarily to the sale in
1996 of the Bank's MasterCard/Visa merchant portfolio for $373,000, which
resulted in abnormally high noninterest income for 1996, and a $21,000 decrease
in service charges and fee income during 1997.

         Noninterest Expense. Noninterest expense increased $375,000 to
$2,638,000 for 1997 from $2,263,000 for 1996. The increase was primarily the
result of an increase in salaries and employee benefits of $218,000 during 1997.


                                       62

<PAGE>



         Allowance for Loan Losses. Although the Company made no provisions to
its loan loss reserves in 1997, allowance for loan losses increased $4,000 in
1997 to $442,000 from $438,000 in 1996 because recoveries on previously
charged-off loans credited to the loan loss allowance exceeded charges thereto.

         Income Taxes.  The Company's income tax expense increased $49,000 to
$1,017,000 for 1997 from $968,000 for 1996.

Years ended December 31, 1996 and 1995

         Overview. Net income increased by $600,000 for 1996 to $1,788,000 from
$1,188,000 for 1995. Net interest income increased $553,000 to $4,073,000 for
1996 from $3,520,000 for 1995. Noninterest income increased $441,000 from
$505,000 for 1995 to $946,000 for 1996. Noninterest expense increased by
$118,000 for 1996 to $2,263,000 from $2,145,000 for 1995. Income tax expense
increased $276,000 for 1996 to $968,000 from $692,000 for 1995. Return on
average assets and return on average equity were 2.41% and 34.48%, respectively,
for 1996 compared to 1.80% and 28.29%, respectively, for 1995.

         Interest Income. Interest income increased $787,000 to $6,531,000 for
1996 from $5,744,000 for 1995. Interest income on loans increased $646,000 and
interest income on securities increased $141,000 for 1996 compared to 1995. The
increase in interest income on loans was due to a prosperous local economy and
the Bank's business development efforts. The increase in interest income from
securities was the result of the overall growth of the Bank and a shift from
investing in federal funds sold to short term investment securities. The rates
earned on loans and investments increased slightly from 1995 to 1996.

         Interest Expense. Interest expense increased $233,000 to $2,458,000 for
1996 from $2,225,000 for 1995. The increase in interest expense was primarily
due to increased interest-bearing deposits. Interest-bearing deposits were up
$5,474,000 for 1996 to $52,016,000 from $46,542,000 for 1995. Rates paid on
interest-bearing deposits increased slightly from 1995 to 1996.

         Net Interest Income. Net interest income increased $554,000 to
$4,073,000 for 1996 from $3,519,000 for 1996. During 1996, average loans
outstanding increased $7,685,000, average securities increased $512,000, and net
interest margin increased 0.15% (from 5.67% for 1995 to 5.82% for 1996).

         Noninterest Income. Noninterest income increased $441,000 to $946,000
for 1996 from $505,000 for 1995. The increase was due primarily to the sale in
1996 of the Bank's MasterCard/Visa merchant portfolio for $373,000, which
resulted in abnormally high noninterest income for 1996. Service charges and fee
income decreased $69,000 during 1996.

         Noninterest Expense. Noninterest expense increased $118,000 to
$2,263,000 for 1996 from $2,145,000 for 1995. The increase was primarily the
result of an increase in salaries and employee benefits of $89,000 during 1996.

         Allowance for Loan Losses. Although the Company made no provisions to
its loan loss reserves in 1996, allowance for loan losses increased $79,000 in
1996 to $438,000 from $359,000 for 1995 because recoveries on previously
charged-off loans credited to the loan loss allowance exceeded charges thereto.


                                       63

<PAGE>



     Income Taxes. The Company's income tax expense increased $276,000 for 1996
to $968,000 from $692,000 for 1995.

Liquidity and Sources of Funds

         The Bank's primary sources of funds are customer core deposits, sales
and maturities of investment securities, loan repayments, and federal funds
purchased or borrowings from the Federal Home Loan Bank of Topeka, Kansas. These
funds are used to make loans, acquire investment securities and other assets,
and to fund the operations of the Bank. During 1997, deposits increased to
$83,454,000 at December 31, 1997 from $74,142,000 at December 31, 1996 and
$64,348,000 at December 31, 1995. None of the deposits at December 31, 1997,
1996 or 1995 were brokered funds. Management believes the increases in deposits
in 1997, 1996 and 1995 were from (1) referrals from existing customers, (2) the
opening of the downtown branch, and (3) the overall growth in Steamboat Springs
and Routt County. At December 31, 1997, net loans were $55,021,000 compared to
$48,276,000 at December 31, 1996 and $36,296,000 at December 31, 1995.

         Management believes that the Bank will continue to rely primarily on
core customer deposits, sales of investment securities, loan repayments, and
retained earnings to provide liquidity, and will use the funds so provided to
make loans and purchase securities. The Bank believes that 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 and borrowings from the Federal Home Loan Bank of Topeka, Kansas.

Capital Resources

         The Company's total shareholders' equity increased to $6,809,000 at
December 31, 1997 from $5,566,000 at December 31, 1996. This is an increase of
$1,243,000 and is the result of increased retained earnings. At December 31,
1997 shareholders' equity was 7.33% of total assets compared to 6.85% of total
assets at December 31, 1996. Dividends paid were $592,000 in 1997 and $950,000
in 1996.

         The Federal Reserve Board and the FDIC call for a 4% Tier 1 capital to
risk weighted assets ratio, 8% total capital to risk weighted assets ratio, and
a 5% leverage ratio. The Bank currently exceeds the applicable regulatory
capital requirements. The following table sets forth the Bank's capital ratios
at December 31, 1997.

                                             Company               Bank
                                             -------               ----

Tier 1 Capital                             $ 6,749,000          $ 6,717,000
Tier 2 Capital                               7,251,000            7,219,000
Risk Weighted Assets                        62,493,000           62,479,000

Tier 1 Capital to Risk Weighted Assets            10.8%                10.8%
Total Capital to Risk Weighted Assets             11.6%                11.6%
Leverage Ratio                                     7.9%                 7.9%

The Company anticipates no material capital expenditures during calendar year
1998.


                                       64

<PAGE>


Effects of Inflation and Changing Prices

         The primary impact of inflation on the Bank's operations is the effect
it has on operating costs. Unlike most industrial companies, almost all of the
Bank's resources are monetary in nature. As a result, increases in interest
rates have more of an impact on the Bank (and therefore the Company) than does
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.

         For the Bank, as with most financial institutions, the primary
component of earnings is net interest income. Net interest income is the
difference between interest income and interest expense. Changes in net interest
income result from changes in volume, net interest spread and net interest
margin. Volume refers to the average dollar level of interest-earning assets and
interest-bearing liabilities. Net interest spread refers to the difference
between the average yield on interest-earning assets and the average cost of
interest-bearing liabilities. Net interest 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.

                    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. Zions' Articles have authorized Zions to issue a total of
103,000,000 shares of capital stock, divided into two classes: 100,000,000
shares of common stock, without par value ("Zions Common Stock"), and 3,000,000
shares of preferred stock, without par value. Zions' Board of Directors has
proposed that Zions shareholders consider and vote on a proposal at the Zions
annual meeting of shareholders to be held on April 24, 1998 to amend Zions'
Articles to increase the number of authorized shares of Zions Common Stock from
100,000,000 to 200,000,000. The Company's Articles of Incorporation have
authorized the Company to issue 500,000 shares of common stock, with par value
of $0.01 per share ("Company Common Stock"), and 500,000 shares of preferred
stock, which may be issued in one or more series as may be determined from time
to time by the Board of Directors ("Company Preferred Stock"). Each holder of
Company Common Stock is entitled to one vote for each share held on all matters
submitted to the shareholders for a vote. Holders of a majority of the voting
power of the Company constitute a quorum for the transaction of business. 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

                                       65

<PAGE>



majority of the outstanding shares of Zions Common Stock constitute a quorum for
the transaction of business.

         Cumulative Voting. Neither Zions nor the Company's shareholders have
cumulative voting rights in the election of directors. 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.

Anti-takeover Matters

         Utah and Colorado Law. Utah's only anti-takeover statute is the Control
Shares Acquisitions Act, which is discussed below. Colorado law, on the other
hand, does not include any anti-takeover statutes.

         Utah law provides that the voting rights to be accorded Control Shares
(as defined below) of a Utah corporation that has (i) one hundred or more
shareholders, (ii) its principal place of business, its principal office, or
substantial assets in Utah, and (iii) either (a) more than 10% of its
shareholders reside in Utah, (b) more than 10% of its shares owned by Utah
residents, or (c) 10,000 shareholders residing in Utah, must be approved by a
majority of each class of voting securities of the corporation, excluding those
shares held by interested persons, before the Control Shares will be granted any
voting rights.

         "Control Shares" are defined under Utah law to be shares acquired by a
person, either directly or indirectly, that when added to all other shares of
the issuing corporation owned by such a person, would entitle such person to
exercise, either directly or indirectly, voting power of 20% or more of all
voting power of the corporation's voting securities. Such provisions do not
apply to shares acquired pursuant to, among other things, an agreement or plan
of merger or share exchange effected in compliance with the relevant provisions
of Utah's Revised Business Corporation Act and to which the corporation is a
party or an acquisition of shares previously approved by the board of directors
of the corporation.

         In addition, unless otherwise provided in a corporation's articles of
incorporation or bylaws, in the event Control Shares acquired in a control share
acquisition are accorded full voting rights and the acquiring person has
acquired Control Shares with a majority or more of all voting power, all
shareholders of the issuing public corporation will have dissenters' rights.

         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.

         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.

                                       66

<PAGE>



         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 do not contain any provision requiring a special
shareholder vote to approve such related party transactions referred to above.
Rather, the Company's Articles provide that holders of a majority of the issued
and outstanding shares of Company Common Stock must vote in favor of significant
transactions. Therefore, were a related party transaction to occur, approval of
such a transaction would require the affirmative vote of a majority of the
issued and outstanding shares of Company Common Stock.

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.

         Until it is announced that a person or group has acquired 10 percent or
more of Zions Common Stock (an "Acquiring Person") or commenced 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

                                       67

<PAGE>



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 provide that the personal liability of a
director for monetary damages for breach of fiduciary duty as a director is
limited to the full extent provided by Colorado law.

         The Company's Bylaws provide that the Company has the power to
indemnify current or former directors to the fullest extent provided by Colorado
law.

         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.

         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.

                                       68

<PAGE>



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 Bylaws provide for a Board of Directors
consisting of not less than three individuals, who are to be elected by the
shareholders annually. Any vacancy occurring on 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.

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 of shareholders to be
called for any purpose or purposes by the President or the Board of Directors,
and shall be called by the President at the request of not less than 10 percent
of all outstanding shares of the Company entitled to vote at such meeting.

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 Articles may be amended by the Company's shareholders at
any annual or special meeting of the shareholders by the affirmative vote of a
majority of the shares present in person or by proxy at the meeting. The
Company's Bylaws may be amended at the annual meeting of the Board or at any
special meeting of the Board called for that purpose at which a quorum is
present, or at the annual shareholders meeting or any special meeting.

                                       69

<PAGE>



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 NASDAQ-NMS 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 NASDAQ-NMS 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 NASDAQ-NMS and has more than 2,000 shareholders of record.
See "Plan or Reorganization--Rights of Dissenting Shareholders" for a more
detailed discussion of dissenters' rights under Colorado law.

         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 previous paragraph.

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

                                       70

<PAGE>



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 authorize the Company to issue up to 500,000
shares of preferred stock. The authorized shares of preferred stock are issuable
in one or more series on the terms set by the Board of Directors of the Company
providing for the issuance thereof. The Board of Directors would give each
series of preferred stock a distinctive designation so as to distinguish it from
the shares of all other series and classes and would fix the number of shares in
such series. All shares of any one series of preferred stock would be the same,
except that there may be variation as to the following preferences, rights, and
restrictions: the distribution rate; the redemption price, terms and conditions;
the amount payable upon shares for distributions of any kind; sinking fund
provisions; conversion rights; and voting rights. No shares of preferred stock
are issued and outstanding.

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 have 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.


                                       71

<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 or Company 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 Slivka Robinson Waters & O'Dorisio, P.C.,
Denver, Colorado, as counsel for the Company.

                                     EXPERTS

         The consolidated financial statements of Zions as of December 31, 1997
and 1996, and for each of the years in the three-year period ended December 31,
1997, incorporated by reference herein have been incorporated by reference
herein as 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,
1997 and 1996, and for each of the years in the three-year period ended December
31, 1997, incorporated by reference herein have been incorporated by reference
herein as reliance upon the report of Fortner, Bayens, Levkulich & Co.,
independent certified public accountants, incorporated by reference herein, and
upon the authority of such firm as experts in auditing and accounting.

         The balance sheets at December 31, 1997 and 1996 and the related
statements of income, changes in shareholders' equity and cash flows for the
years ended December 31, 1997, 1996 and 1995 for Sumitomo Bank of California
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report (dated January 16, 1998) with respect thereto, and
have been incorporated by reference herein in reliance upon the report of said
firm, and upon the authority of such firm as experts in accounting and auditing.


                                       72

<PAGE>



                                  OTHER MATTERS

         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."

         The Company's principal accountants are not expected to be present at
the Special Meeting.

         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.




                                        By Order of the Board of Directors



April 30, 1998                          -------------------------------------
                                        Timothy S. Borden
                                        Chairman of the Board
                                        Routt County National Bank Corporation



                                       73
<PAGE>






                        CONSOLIDATED FINANCIAL STATEMENTS
                        AND INDEPENDENT AUDITORS' REPORT

                     ROUTT COUNTY NATIONAL BANK CORPORATION
                                 AND SUBSIDIARY


                           December 31, 1997 and 1996


<PAGE>



                          INDEPENDENT AUDITORS' REPORT

Board of Directors
Routt County National Bank Corporation
Steamboat Springs, Colorado

         We have audited the accompanying consolidated balance sheets of Routt
County National Bank Corporation as of December 31, 1997 and 1996 and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1997. 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 audits.

         We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 financial statements referred to above present
fairly, in all material respects, the financial position of Routt County
National Bank Corporation at December 31, 1997 and 1996 and the results of its
operations and cash flows for the three years in the three-year period ended
December 31, 1997, in conformity with generally accepted accounting principles.



                                      /s/ Fortner, Bayens, Levkulich & Co., P.C.



Denver, Colorado
February 5, 1998


<PAGE>

              Routt County National Bank Corporation and Subsidiary

                           CONSOLIDATED BALANCE SHEETS

                                  December 31,


<TABLE>
<CAPTION>
                                                                                1997          1996
                                                                            -----------    -----------
                    ASSETS

<S>                                                                         <C>            <C>        
Cash and due from banks                                                     $ 4,064,935    $ 4,378,573
Interest bearing deposits with banks                                            199,000        199,000
Federal funds sold and overnight deposits at Federal
  Home Loan Bank                                                              7,900,000      2,900,000
Securities available for sale                                                11,266,214     14,463,004
Securities held to maturity                                                  13,193,350      9,669,456
Loans, net of unearned income and allowance for loan losses                  55,021,072     48,275,503
Leasehold improvements and equipment                                            284,300        428,278
Accrued income receivable                                                       704,581        607,186
Deferred income tax asset                                                       107,365        105,640
Other assets                                                                    112,963        244,330
                                                                           ------------   ------------

          Total assets                                                     $ 92,853,780   $ 81,270,970
                                                                           ============   ============

       LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
  Deposits                                                                 $ 83,436,887   $ 74,108,086
  Securities sold under agreements to repurchase                              2,009,131      1,068,893
  Accrued interest payable                                                      490,571        411,973
  Income taxes payable                                                           13,315         40,877
  Other liabilities                                                              94,962         75,391
                                                                           ------------   ------------
          Total liabilities                                                  86,044,866     75,705,220

Commitments (notes G and H)

Stockholders' equity
  Common stock - 500,000 shares of $0.01 par value
    authorized, 318,664.47 and 316,733.65 shares issued
    and outstanding in 1997 and 1996, respectively                                3,187          3,168
  Paid in capital                                                             2,443,798      2,405,529
  Retained earnings                                                           4,301,860      3,124,992
  Unrealized gain on securities available for sale,
     net of taxes                                                                60,069         32,061
                                                                           ------------   ------------ 
         Total stockholders' equity                                           6,808,914      5,565,750
                                                                           ------------   ------------

         Total liabilities and stockholder's equity                        $ 92,853,780   $ 81,270,970
                                                                           ============   ============ 
</TABLE>

       The accompanying notes are an integral part of these consolidated
                              financial statements.

                                        3



<PAGE>

              Routt County National Bank Corporation and Subsidiary

                        CONSOLIDATED STATEMENTS OF INCOME

                            Years ended December 31,


<TABLE>
<CAPTION>


                                                        1997             1996            1995
                                                    -----------      -----------     -----------
<S>                                                 <C>              <C>             <C>
Interest income
  Interest and fees on loans                        $ 5,638,926      $ 4,684,891     $ 4,039,471
  Interest and fees on loans                          1,680,169        1,706,794       1,476,144
  Interest on non-taxable investment securities           5,604            8,119          11,925
  Interest on federal funds sold and overnight 
    deposits at Federal Home Loan Bank                  204,627          119,843         200,737
  Interest on deposits in banks                          11,491           11,520          16,321
                                                     ----------      -----------     -----------
          Total interest income                       7,540,817        6,523,048       5,744,598

Interest expense
  Interest on deposits                                2,920,738        2,335,909       2,080,201
  Interest on federal funds purchased and 
    securities sold under agreements to 
    repurchase                                           85,115          122,378         144,762
                                                    -----------      -----------     -----------
          Total interest expense                      3,005,853        2,458,287       2,224,963
                                                    -----------      -----------     -----------

Net interest income                                   4,534,964        4,064,761       3,519,635

Provision for loan losses                                     -                -               -
                                                    -----------      -----------     -----------

Net interest income after provision for loan losses   4,534,964        4,064,761       3,519,635

Other income
  Service charges on deposit accounts                   368,580          390,169         321,561
  Gain on sale of merchant credit card accounts               -          373,000               -
  Mortgage referral fees                                394,061           37,660               -
  Other income                                          126,715          145,703         183,506
                                                    -----------      -----------     -----------
                                                        889,356          946,532         505,067

Other expenses
  Salaries and employee benefits                      1,339,040        1,121,046       1,031,676
  Occupancy expense of premises                         296,020          287,568         287,508
  Furniture and equipment expense                       264,573          238,084         225,904
  Other expenses                                        738,702          616,540         599,929
                                                    -----------      -----------     -----------
                                                      2,638,335        2,263,238       2,145,017
                                                    -----------      -----------     -----------

Income before income taxes                            2,785,985        2,748,055       1,879,685
Income tax expense                                    1,017,270          968,495         691,709
                                                    -----------      -----------     -----------

NET INCOME                                          $ 1,768,715      $ 1,779,560     $ 1,187,976
                                                    ===========      ===========     ===========

Net income per share of common stock                     $ 5.56           $ 5.70          $ 3.84
                                                    ===========      ===========     ===========
Average shares outstanding                           317,908.01       313,711.69      309,621.54
                                                    ===========      ===========     ===========
</TABLE>


 The accompanying notes are an integral part of these consolidated statements.


                                       4
<PAGE>



             Routt County National Bank Corporation and Subsidiary

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                       Three years ended December 31, 1997
<TABLE>
<CAPTION>

                                                                                   Unrealized
                                                                                  gain (loss) on
                                                                                   securities         Common stock
                                  Common                                            available         in treasury
                                  stock      Common       Paid-in      Retained     for sale      ------------------- 
                                  issued      stock       capital      earnings    net of taxes     Shares     Amount       Total
                                  ------      -----       -------      --------    ------------     ------     ------       -----
<S>                              <C>          <C>       <C>           <C>           <C>           <C>        <C>        <C>        
Balance at January 1, 1995       318,664.47   $ 3,187   $ 2,341,975   $1,598,484    $ (238,255)   12,872.41  $(98,989)  $ 3,606,402
Sale of common stock in treasury       -            -        34,730            -             -    (5,974.68)   45,945        80,675
Net income for 1995                    -            -             -    1,187,976             -         -            -     1,187,976
Cash dividends paid - $1.60 per
  common share                         -            -             -     (498,755)            -         -            -      (498,755)
Change in unrealized gain (loss)
  on securities available for sale     -            -             -            -       362,003         -            -       362,003
                                 ----------   -------   -----------   ----------    ----------    ---------  --------   ----------

Balance at December 31, 1995     318,664.47     3,187     2,376,705    2,287,705       123,748     6,897.73   (53,044)    4,738,301
Sale of common stock in treasury       -            -        43,653            -             -    (4,966.91)   38,196        81,849
Retirement of common stock
  in treasury                     (1,930.82)      (19)      (14,829)           -             -    (1,930.82)   14,848             -
Net income for 1996                                 -             -    1,787,679             -                            1,787,679
Cash dividends paid - $3.00 per
  common share                                      -             -     (950,392)            -                             (950,392)
Change in unrealized gain (loss)
  on securities available for sale                  -             -            -       (91,687)                             (91,687)
                                 ----------   -------    ----------   ----------    ----------   ----------   -------   -----------
Balance at December 31, 1996     316,733.65     3,168     2,405,529    3,124,992        32,061         -            -     5,565,750
Sale of common stock               1,930.82        19        38,269            -             -         -            -        38,288
Net income for 1997                                 -             -    1,768,715             -                            1,768,715
Cash dividends paid - $1.86 per
  common share                                      -             -     (591,847)            -                             (591,847)
Change in unrealized gain (loss)
  on securities available for sale                  -             -            -        28,008                               28,008
                                 ----------   -------    ----------   ----------    ----------   ---------    -------   -----------
Balance at December 31, 1997     318,664.47   $ 3,187    $2,443,798   $4,301,860    $   60,069         -      $     -   $ 6,808,914
                                 ==========   =======    ==========   ==========    ==========   =========    =======   ===========
</TABLE>


  The accompanying notes are an integral part of this consolidated statement.


                                       5

<PAGE>


              Routt County National Bank Corporation and Subsidiary

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                            Years ended December 31,



<TABLE>
<CAPTION>

                                                                         1997           1996            1995  
                                                                      -----------    -----------   -----------
<S>                                                                   <C>            <C>           <C>
Cash flows from operating activities
  Net income                                                          $ 1,768,715    $ 1,787,679   $ 1,187,976
  Adjustments to reconcile net income to net cash
    provided by operating activities
      Provision for deferred income taxes                                 (16,153)       (11,776)      (10,968)
      Depreciation and amortization                                       230,391        217,630       198,025
      Premium amortization - net                                           80,794         57,364       126,318
      Changes in accruals and deferrals
        Income receivable                                                 (97,395)       (68,747)      (96,497)
        Other assets                                                      131,367       (167,601)       98,374
        Interest payable                                                   78,598         97,584       124,162
        Taxes payable                                                     (27,562)         6,492           526
        Other liabilities                                                  19,571        (10,337)       50,513
                                                                      -----------    -----------   -----------
          Net cash provided by operating activities                     2,168,326      1,908,288     1,678,429

Cash flows from investing activities
  Change in federal funds sold and overnight deposits at
    Federal Home Loan Bank                                             (5,000,000)     2,100,000    (3,400,000)
  Purchase of interest bearing deposits in other banks                   (199,000)             -      (198,000)
  Maturities of interest bearing deposits in other banks                  199,000         99,000             -
  Purchase of securities held to maturities                            (6,986,035)    (2,222,900)   (4,405,475)
  Proceeds from maturities of securities held to maturity               3,447,192      5,160,015     3,675,293
  Purchase of securities available for sale                            (1,479,688)    (5,973,165)   (6,487,346)
  Proceeds from maturities of securities available for sale             4,653,068      4,414,787     2,472,699
  Change in assets purchased under agreement to resell                          -              -       300,000
  Change in loans made to customers                                    (6,745,569)   (11,979,148)   (2,312,430)
  Expenditures for premises and equipment                                 (86,412)      (226,483)     (107,706)
                                                                      -----------    -----------   ----------- 
          Net cash applied to investing activities                    (12,197,444)    (8,627,894)  (10,462,965)

 Cash flows from financing activities
  Change in deposits                                                    9,328,801      9,785,379     8,532,746
  Change in securities sold under agreements to
    repurchase                                                            940,238       (838,946)     (419,046)
  Sale of common stock                                                     38,288         81,849        80,675
  Dividends paid                                                         (591,847)      (950,392)     (498,755)
                                                                      ---------- -   ------------  ------------
          Net cash provided by financing activities                     9,715,480      8,077,890     7,695,620
                                                                      -----------    ------------  ------------
Net increase (decrease) in cash and due from banks                       (313,638)     1,358,284    (1,088,916)

Cash and due from banks at beginning of year                            4,378,573      3,020,289     4,109,205
                                                                      -----------    ------------  ------------

Cash and due from banks at end of year                                $ 4,064,935    $ 4,378,573   $ 3,020,289
                                                                      ===========    ============  ============

Supplemental Disclosures of Cash Flow Information
  Cash paid during the year for:
    Interest                                                          $ 2,927,255    $ 2,360,703   $ 2,100,801
    Income taxes                                                          770,244      1,111,653       611,000
</TABLE>


 The accompanying notes are an integral part of these consolidated statements.




                                       6




<PAGE>


              Routt County National Bank Corporation and Subsidiary

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 1997 and 1996









NOTE A - SUMMARY OF ACCOUNTING POLICIES

    Nature of Operations

       Routt County National Bank Corporation (the Company) and it's subsidiary
       provide a full range of banking services to individual and corporate
       customers principally in the northwest Colorado area. A majority of the
       Company's loans are related to real estate activities. Borrowers'
       abilities to honor their loans are dependent upon the continued economic
       viability of the area. The Company is subject to competition from other
       financial institutions for loans and deposit accounts. The Company is
       also subject to regulation by certain governmental agencies and undergoes
       periodic examinations by those regulatory agencies.

    Basis of Financial Statement Presentation

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

        Material estimates that are particularly susceptible to significant
        change in the near-term 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 and assesses estimated future cash flows from borrowers'
        operations and the liquidation of loan collateral.



                                       7



<PAGE>


              Routt County National Bank Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                           December 31, 1997 and 1996



NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

    Basis of Financial Statement Presentation (Continued)

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

    Basis of Consolidation

        The accompanying consolidated financial statements include Routt County
        National Bank Corporation and its subsidiary, First National Bank of
        Colorado. All significant intercompany transactions have been
        eliminated.

    Investment Securities

       The Company revalues securities designated as available for sale at each
       reporting period with the unrealized gain or loss, net of tax effect
       recorded as an element of stockholders' equity.

       The designation of a security as held to maturity or available for sale
       is made at the time of acquisition. The held to maturity classification
       includes debt securities that the Company has the positive intent and
       ability to hold to maturity which are carried at amortized cost. The
       available for sale classification includes debt and equity securities
       which are carried at fair value. Unrealized gains and losses on
       securities available for sale are included as a separate component of
       stockholders' equity, net of tax effect. Gains or losses on sales of
       securities are recognized by the specific identification method.


                                       8


<PAGE>

             Routt County National Bank Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                           December 31, 1997 and 1996



NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

    Loans

        The Company recognizes substantially all income and expense on the
        accrual method of accounting. Loan fees are recognized over the term of
        the loan. Loan origination and commitment fees and certain costs are
        being deferred, and the net amount is amortized as an adjustment of the
        related loans yield.

        The accrual of interest on loans is discontinued when management
        believes that interest or principal may not be collectible in the normal
        course of business. When placing a loan in nonaccrual status, interest
        accrued to date is generally reversed unless the net realizable value of
        the underlying collateral is sufficient to cover principal and accrued
        interest. When such a reversal is made, interest accrued during prior
        years is charged to the allowance for loan losses. All other interest
        reversed on nonaccrual loans is charged against current year interest
        income.

    Allowance for Loan Losses

        The Company provides for possible loan losses by a charge to operations
        based on the character of the loan portfolio, current economic
        conditions, past loan loss experience and such other factors as, in
        management's best judgement, deserve current recognition in estimating
        loan losses.

    Leasehold Improvements and Equipment

        Leasehold improvements and equipment are stated at cost, less
        accumulated depreciation. Depreciation is provided for in amounts
        sufficient to relate the cost of depreciable assets to operations over
        their estimated service lives. Leasehold improvements are amortized over
        the life of the lease. Depreciation is computed generally on the
        straight-line method.

     Cash Flows

        For purposes of the statement of cash flows, the Company has defined
        cash equivalents as those amounts included in the balance sheet caption
        "Cash and Due from Banks."


                                       9


<PAGE>


             Routt County National Bank Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                           December 31, 1997 and 1996



NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

    Net Income Per Share

        Net income per share of common stock has been computed on the basis of
        the weighted-average number of shares of common stock outstanding.

    Income Taxes

        Current and deferred income tax assets or liabilities are recognized
        subject to certain limitations, for the tax consequences of all events
        that have been recognized in the financial statements. The deferred
        income tax asset or liability is measured by the provisions of enacted
        tax laws.


NOTE B - INVESTMENT SECURITIES

    The following presents information related to the Company's portfolio of
    securities held to maturity and available for sale.

<TABLE>
<CAPTION>

                                                                                1997
                                                      ---------------------------------------------------------
                                                      Amortized        Unrealized     Unrealized        Market
                                                        Cost             Gains          Losses          Value
                                                      ---------        ----------     ----------        -----
  <S>                                                 <C>               <C>             <C>           <C>
  Securities available for sale
    U.S. Treasury                                     $ 3,243,826       $  7,691        $    -       $ 3,251,517
    Mortgage-backed securities                          7,526,591        104,843         21,520        7,609,914
    Federal Home Loan Bank and
    Federal Reserve Bank stock                            404,783             -              -           404,783
                                                      -----------       --------        -------      -----------

                                                      $11,175,200       $112,534        $21,520      $11,266,214
                                                      ===========       ========        =======      ===========
</TABLE>


                                       10


<PAGE>


Routt County National Bank Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                           December 31, 1997 and 1996


NOTE B - INVESTMENT SECURITIES (CONTINUED)

<TABLE>
<CAPTION>

                                                                                1997
                                                       -------------------------------------------------------
                                                       Amortized       Unrealized     Unrealized        Market
                                                         Cost             Gains         Losses          Value
                                                       ----------      ----------     ----------        ------
   <S>                                                <C>               <C>             <C>          <C> 
   Securities held to maturity
     U.S. Treasury                                    $ 1,002,895       $  3,792        $    -       $ 1,006,687
     Mortgage-backed securities                        12,150,480        115,379         18,720       12,247,139
     States and municipal                                  39,975             -             152           39,823
                                                      -----------       --------        -------      -----------

                                                      $13,193,350       $119,171        $18,872      $13,293,649
                                                      ===========       ========        =======      ===========
</TABLE>


<TABLE>
<CAPTION>

                                                                                  1996
                                                       --------------------------------------------------------
                                                       Amortized       Unrealized     Unrealized        Market
                                                         Cost             Gains         Losses          Value
                                                       ---------       ----------     ----------        -----
   <S>                                                <C>               <C>             <C>          <C>
   Securities available for sale
     U.S. Treasury                                    $ 4,726,994       $ 26,986        $ 4,006      $ 4,749,974
     U.S. government agencies                           1,487,485         18,573             -         1,506,058
     Mortgage-backed securities                         7,795,164         59,858         52,833        7,802,189
     Federal Home Loan Bank and
     Federal Reserve Bank stock                           404,783            -               -           404,783
                                                      -----------       --------        -------      -----------

                                                      $14,414,426       $105,417        $56,839      $14,463,004
                                                      ===========       ========        =======       ==========

   Securities held to maturity
     U.S. Treasury                                    $   501,067       $      -        $ 7,667      $   493,400
     U.S. government agencies                           2,653,942         16,212            238        2,669,916
     States and municipal                                 134,949            148            568          134,529
     Mortgage-backed securities                         6,379,498         78,077         45,804        6,411,771
                                                      -----------       --------        -------      -----------

                                                      $ 9,669,456       $ 94,437        $54,277      $ 9,709,616
                                                      ===========       ========        =======      ===========

</TABLE>


                                       11


<PAGE>

             Routt County National Bank Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                           December 31, 1997 and 1996



NOTE B - INVESTMENT SECURITIES (CONTINUED)

   The amortized cost and estimated market value of investment securities at
   December 31, 1997 by contractual maturity are shown below. Expected
   maturities will differ from contractual maturities because borrowers may have
   the right to call or prepay obligations with or without call or prepayment
   penalties.


<TABLE>
<CAPTION>

                                                      Available for Sale                 Held to Maturity
                                                    ----------------------           ------------------------
                                                    Amortized       Market           Amortized         Market
                                                      Cost          Value              Cost            Value
                                                    ----------      -----            ---------         -----
    <S>                                           <C>             <C>               <C>              <C>        
    Due in one year or less                       $ 2,744,553     $ 2,750,277       $   520,524      $   517,302
    Due after one year through
      five years                                      499,273         501,240           522,346          529,208
    Due after five years through
      ten years                                            -               -                 -                -
    Due after ten years                                    -               -                 -                -
                                                  -----------     -----------       -----------      ----------
                                                    3,243,826       3,251,517         1,042,870        1,046,510

    Mortgage-backed securities                      7,526,591       7,609,914        12,150,480       12,247,139
                                                  -----------     -----------       -----------      -----------

                                                  $10,770,417     $10,861,431       $13,193,350      $13,293,649
                                                  ===========     ===========       ===========      ===========
</TABLE>



                                       12



<PAGE>


             Routt County National Bank Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                           December 31, 1997 and 1996




NOTE B - INVESTMENT SECURITIES (CONTINUED)

    The Company realized no gains or losses on the sales and early redemptions
    of investment securities for the years ending December 31, 1997 and 1996.

    Investment securities with amortized cost of $4,331,879 and $5,579,849 were
    pledged at December 31, 1997 and 1996, respectively, as collateral for
    public deposits and for other purposes as required or permitted by law.
    Securities sold under repurchase agreements of $6,647,035 and $1,068,893 as
    of December 31, 1997 and 1996, respectively, are collateralized by related
    securities.

NOTE C - LOANS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES

    Major classifications of loans at December 31, are as follows:

<TABLE>
<CAPTION>


                                                           1997                  1996
                                                        -----------           -----------

        <S>                                             <C>                   <C>        
        Commercial                                      $36,569,920           $29,282,908
        Construction                                      8,844,022             9,915,533
        Real estate mortgage                              5,315,709             5,625,193
        Consumer                                          4,736,127             3,900,413
                                                        -----------           -----------
                                                         55,465,778            48,724,047

        Less unearned income                                 (2,323)              (10,960)
        Less allowance for loan losses                     (442,383)             (437,584)
                                                        -----------           -----------

        Loans, net of unearned income                   $55,021,072           $48,275,503
                                                        ===========           ===========
</TABLE>


                                       13


<PAGE>


             Routt County National Bank Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                           December 31, 1997 and 1996



NOTE C - LOANS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES (CONTINUED)

    Transactions in the allowance for possible loan losses for the three years
ended December 31, are as follows:

<TABLE>
<CAPTION>

                                                              1997                1996             1995
                                                            ---------          ---------          -------

        <S>                                                  <C>                <C>               <C>     
        Balance at beginning of year                         $437,584           $358,721          $418,748
        Provision for loan losses                                  -                  -                 -
                                                             --------           --------          -------
               Total                                          437,584            358,721           418,748

        Loans charged off                                     (13,746)            (9,336)          (78,886)
        Recoveries                                             18,545             88,199            18,859
                                                             --------           --------          --------
               Net recoveries (charge-offs)                     4,799             78,863           (60,027)
                                                             --------           --------          --------

        Balance at end of year                               $442,383           $437,584          $358,721
                                                             ========           ========          ========
</TABLE>

    The principal balance of loans having payments delinquent more than sixty
    days at December 31, 1997 and 1996 amounted to $181,161 and $72,944,
    respectively. At December 31, 1997, the loans outstanding where the accrual
    of interest had been discontinued was $160,725. There were no loans
    outstanding where the accrual of interest had been discontinued as of
    December 31, 1996.

    At December 31, 1997, the recorded investment in loans for which impairment
    has been recognized totaled $160,725. There were no impaired loans at
    December 31, 1996 or during 1996. The average recorded investment in
    impaired loans in 1997 was $160,000. No interest income was recognized on
    impaired loans in 1997 and 1996.


                                       14


<PAGE>


             Routt County National Bank Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                           December 31, 1997 and 1996



NOTE D - LEASEHOLD IMPROVEMENTS AND EQUIPMENT

    At December 31, leasehold improvements and equipment, less accumulated
    amortization and depreciation, consisted of the following:


<TABLE>
<CAPTION>

                                                                                     1997
                                                                 ----------------------------------------------
                                                                                 Accumulated
                                                                               amortization and           Net
                                                                   Cost          depreciation           amount
                                                                   ----          ------------           ------
        <S>                                                     <C>                <C>                 <C>     
        Leasehold improvements                                  $  384,596         $  293,168          $ 91,428
        Furniture and equipment                                  1,181,488            988,616           192,872
                                                                ----------         ----------          --------

                                                                $1,566,084         $1,281,784          $284,300
                                                                ==========         ==========          ========

</TABLE>


<TABLE>
<CAPTION>
                                                                                     1996
                                                                 -----------------------------------------------
                                                                                   Accumulated
                                                                                 amortization and         Net
                                                                   Cost            depreciation          amount
                                                                   ----            ------------          ------
        <S>                                                     <C>                <C>                 <C>     
        Leasehold improvements                                  $  381,028         $  228,841          $152,187
        Furniture and equipment                                  1,120,537            844,446           276,091
                                                                ----------         ----------          --------

                                                                $1,501,565         $1,073,287          $428,278
                                                                ==========         ==========          ========
</TABLE>


                                       15

<PAGE>



             Routt County National Bank Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                           December 31, 1997 and 1996



NOTE E - DEPOSITS

    Deposits are comprised of the following at December 31:

<TABLE>
<CAPTION>
                                                                              1997                      1996
                                                                         --------------            ---------
        <S>                                                                <C>                      <C>        
        Non-interest bearing                                               $17,844,282              $16,006,492
        NOW accounts                                                         8,846,547                7,542,368
        Savings                                                              3,703,176                4,193,546
        Money market accounts                                               20,118,671               14,792,185
        Other time deposits under $100,000                                  11,405,109               13,001,103
        Other time deposits - $100,000 and over                             21,535,848               18,606,589
                                                                            ----------               ----------

                                                                           $83,453,633              $74,142,283
                                                                            ==========               ==========
</TABLE>

    At December 31, 1997, the scheduled maturities of certificates of deposit
are as follows:

<TABLE>
                                    <S>                                    <C>
                                    1998                                   $27,826,986
                                    1999                                     3,029,306
                                    2000                                       819,955
                                    2001                                       587,812
                                    2002 and thereafter                        676,898
                                                                           -----------

                                                                           $32,940,957
                                                                           ===========
</TABLE>

NOTE F - INCOME TAXES

    Following is an analysis of income taxes included in the statements of
    income for the three years ended December 31:

<TABLE>
<CAPTION>

                                                                  1997                  1996             1996
                                                               ----------             --------         --------

        <S>                                                    <C>                    <C>              <C>     
        Current federal tax provision                          $1,033,423             $980,271         $702,677
        Deferred federal tax benefit                              (16,153)             (11,776)         (10,968)
                                                               ----------             --------         --------

                                                               $1,017,270             $968,495         $691,709
                                                               ==========             ========         ========
</TABLE>

                                       16


<PAGE>


             Routt County National Bank Corporation and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                           December 31, 1997 and 1996



NOTE F - INCOME TAXES (CONTINUED)

    A deferred tax asset or liability is recognized for the tax consequences of
    temporary differences in the recognition of revenue and expense for
    financial reporting and tax purposes.
    Listed below are the components of the net deferred tax asset.

<TABLE>
<CAPTION>
                                                                            1997             1996
                                                                          ---------         -------
        <S>                                                               <C>              <C>
        Deferred tax assets
        Allowance for loan losses                                         $ 33,084         $ 33,084
        Deferred loan fees                                                   7,461           11,191
        Branch costs                                                         6,462              809
        Depreciation                                                        91,302           77,073
                                                                          --------         --------

               Total deferred tax assets                                   138,309          122,157

        Deferred tax liabilities
          Unrealized gain on securities available for sale                  30,944           16,517
                                                                          --------         --------

         Net deferred tax asset                                           $107,365         $105,640
                                                                          ========         ========
</TABLE>


                                       17

<PAGE>


             Routt County National Bank Corporation and Subsidiary
                                                       
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                                       
                           December 31, 1997 and 1996

NOTE F - INCOME TAXES (CONTINUED)

    The effective income tax rate varies from the statutory federal rate because
    of several factors, the most significant being nontaxable interest income
    earned on obligations of state and municipalities and Colorado income taxes.
    The following table reconciles the Company's effective tax rate to the
    statutory federal rate.

<TABLE>
<CAPTION>

                                                      1997                     1996             1995
                                                -----------------       --------------        ------------
                                                  Amount       %          Amount     %        Amount     %
                                                  ------       -          ------     -        ------     -
  <S>                                           <C>           <C>       <C>         <C>      <C>        <C>
  Tax expense at statutory rate                 $  947,235    34%       $937,099    34%      $639,093   34%
  Increase (decrease) in taxes due to:
    Colorado income taxes                           96,964     3          50,504     2         55,588    3
     Other                                         (26,929)   (1)        (19,108)   (1)        (2,972)   -
                                                ----------    --        --------    --       --------   --

   Total provision for income taxes             $1,017,270    36%       $968,495    35%      $691,709   37%
                                                ==========    ==        ========    ==       ========   ==
</TABLE>



NOTE G - FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK

    The Company is a party to financial instruments with off balance sheet risk
    in the normal course of business to meet the financing needs of its
    customers. These financial instruments include commitments to extend credit
    and stand-by letters of credit.

    Those instruments involve, to a varying degree, elements of credit risk in
    excess of the amount recognized in the statement of financial position. The
    contract amounts of those instruments reflect the extent of involvement the
    Company has in particular classes of financial instruments.


                                       18

<PAGE>


             Routt County National Bank Corporation and Subsidiary
                                                       
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                                       
                           December 31, 1997 and 1996


NOTE G - FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK (CONTINUED)

    The Company's exposure to credit loss in the event of non-performance by the
    other party to the financial instrument for commitments to extend credit and
    stand-by letters of credit is represented by the contractual notional amount
    of those instruments. The Company uses the same credit policies in making
    commitments and conditional obligations as it does for on balance sheet
    instruments.

<TABLE>
<CAPTION>

                                                             1997            1996
                                                        --------------    ------------
     <S>                                                  <C>              <C>
     Financial instruments whose contract amounts
        represent credit risk
          Commitments to extend credit                    $18,701,656      $12,403,000
          Stand-by letters of credit                          515,593          736,000
</TABLE>

    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 many of the commitments may
    expire without being drawn upon, the total commitment amounts do not
    necessarily represent future cash requirements. The Company evaluates each
    customer's credit worthiness on a case-by-case basis. The amount of
    collateral obtained if deemed necessary by the Company upon extension of
    credit is based on management's credit evaluation. Collateral held varies,
    but may include accounts receivable, inventory, property, plant and
    equipment and income-producing commercial properties.

    Stand-by letters of credit are conditional commitments issued by the Company
    to guarantee the performance of a customer to a third party. The credit risk
    involved in issuing letters of credit is essentially the same as that
    involved in extending loan facilities to customers.


                                       19


<PAGE>


             Routt County National Bank Corporation and Subsidiary
                                                       
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                                       
                           December 31, 1997 and 1996


NOTE H - COMMITMENTS

    The Company leases it's main premises under an operating lease which expires
    December 31, 2000. Rent may be raised annually by the lessor at a rate not
    to exceed 10% of the previous year's rental rate. The lease is with a
    partnership related through common major ownership of the Company. The
    Company also leases a branch facility under an operating lease which expires
    December 31, 2002. The total future minimum rental commitments at December
    31, 1997 are as follows:


                    Year ended
                   December 31,
                   ------------

                        1998                              $163,476
                        1999                               163,476
                        2000                               163,476
                        2001                                24,000
                        2002                                24,000
                                                          --------

                                                          $538,428
                                                          ========



    Total rent expense for 1997, 1996 and 1995 was $155,724, $156,928 and
    $157,729, respectively.

NOTE I - RELATED PARTIES

    At December 31, 1997 and 1996, the Company had loans receivable from
    directors, officers and principal owners and their related business
    interests aggregating $1,610,664 and $1,419,000, respectively.

    The Company participates in loan transactions and repurchase agreements with
    banks related through common major ownership. Loan participations sold by
    the Company to Rawlins National Bank were $-0- and $111,000 at December 31,
    1997 and 1996, respectively. Loan participations sold by the Company to
    First National Bank of Wyoming - Laramie were $-0- and $92,511 at December
    31, 1997 and 1996, respectively.


                                       20


<PAGE>


             Routt County National Bank Corporation and Subsidiary
                                                       
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                                       
                           December 31, 1997 and 1996


NOTE I - RELATED PARTIES (CONTINUED)

    Loan participations purchased from Rawlins National Bank were $244,861 and
    $277,872 at December 31, 1997 and 1996. Loans purchased from First National
    Bank of Wyoming - Laramie were $732,314 and $204,872 at December 31, 1997
    and 1996.

NOTE J - EMPLOYEE BENEFIT PLANS

    The Company established a defined contribution plan in the form of a
    qualified 401(K) profit sharing plan during 1989 for the benefit of its
    employees. Eligible employees may elect to defer a portion of their salary
    as contributions to the plan. At the discretion of the Board of Directors,
    the Company may elect to make additional contributions. Contributions of
    $37,245, $11,914 and $11,608 were made to the plan for the years ended
    December 31, 1997, 1996 and 1995, respectively, and is included in salaries
    and benefits expense.

    During 1991, the Company implemented an Employee Stock Option profit sharing
    plan that covers all of the Company's eligible employees. The amount of the
    contribution to the plan is determined by the Board of Directors. The
    Company may choose not to contribute to the plan for a particular year;
    however, its contribution shall not exceed 25% of compensation paid to the
    participants under the plan in the year for which the contribution is being
    determined. No contributions were made for 1997 and 1996. The Company's
    contribution to the plan during 1995 was $25,000.

 NOTE K - DIVIDENDS

    Various restrictions limit the extent to which dividends may be paid by the
    Company's subsidiary.

    The approval of the Comptroller of the Currency is required for a bank to
    pay dividends in any calendar year which exceed the bank's net profit for
    that year combined with its retained profits for the preceding two years.

    Contributions to the Employee Stock Option plan of $12,550, $18,000, and
    $25,000 were made for the years ended December 31, 1997, 1996, and 1995,
    respectively.


                                       21


<PAGE>


             Routt County National Bank Corporation and Subsidiary
                                                       
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                                       
                           December 31, 1997 and 1996

NOTE L - REGULATORY MATTERS

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

   Quantitative measures established by regulation to ensure capital adequacy
   require the Company to maintain minimum amounts and ratios (set forth in the
   table below) of total and Tier 1 capital (as defined in the regulations) to
   risk-weighted assets (as defined), and of Tier 1 capital (as defined) to
   average assets (as defined). Management believes, as of December 31, 1997,
   that the Company meets all capital adequacy requirements to which it is
   subject.

   As of March 31, 1996, the most recent notification from the Office of the
   Comptroller of the Currency categorized the Company's subsidiary 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 1 risk-based, and Tier 1 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.


                                       22



<PAGE>



             Routt County National Bank Corporation and Subsidiary
                                                       
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                                       
                           December 31, 1997 and 1996

NOTE L - REGULATORY MATTER (CONTINUED)

<TABLE>
<CAPTION>

                                                                                             To be well
                                                                                          capitalized under
                                                                     For capital          prompt corrective
                                                  Actual          adequacy purposes       action provisions
                                             ---------------      -----------------       -----------------
                                             Amount    Ratio       Amount      Ratio        Amount       Ratio
                                             ------    -----       ------      -----        ------       -----

<S>                                        <C>          <C>     <S>             <S>      <S>             <S> 
   As of December 31, 1997
     Total capital
       (to risk weighted assets)           $7,251,000   11.6%   =>$4,999,000    =>8.0%   =>$6,249,000    =>10.0%
     Tier 1 capital
       (to risk weighted assets)            6,749,000   10.8    => 2,500,000    =>4.0    => 3,750,000     =>6.0
     Tier 1 capital
       (to average assets)                  6,749,000    7.9    => 3,408,000    =>4.0    => 4,260,000     =>5.0
   As of December 31, 1996
     Total capital
       (to risk weighted assets)            6,003,000   11.6    => 4,134,000    =>8.0    => 5,168,000    =>10.0
     Tier 1 capital
       (to risk weighted assets)            5,534,000   10.7    => 2,067,000    =>4.0    => 3,101,000     =>6.0
     Tier 1 capital
       (to average assets)                 5,5534,000    7.5    => 2,965,000    =>4.0    => 3,707,000     =>5.0
</TABLE>


NOTE M - SUBSEQUENT EVENT

   During January, 1998, the Company signed an Agreement and Plan of
   Reorganization (Agreement) with Val Cor Bancorporation, Inc. and Zions
   Bancorporation. Under the Agreement, shareholders of the Company will
   exchange their stock for stock of Zions Bancorporation. The exchange is
   expected to be completed during the second quarter of 1998.


                                       23

<PAGE>


             Routt County National Bank Corporation and Subsidiary
                                                       
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                                       
                           December 31, 1997 and 1996



NOTE N - PARENT COMPANY FINANCIAL INFORMATION

   Condensed parent company only financial information follows:

                                                    Balance Sheets
                                                     December 31,
                                                (Amounts in thousands)

<TABLE>
<CAPTION>


                                                                                           1997          1996
                                                                                          ------        ------
                                      ASSETS

         <S>                                                                               <C>          <C>   
         Cash                                                                             $   17        $   34
         Investment in subsidiary - First National Bank of Colorado
         Equity in net assets                                                              6,777         5,529
         Other assets                                                                         15             3
                                                                                          ------        ------

                                                                                          $6,809        $5,566
                                                                                          ======        ======
                        STOCKHOLDERS' EQUITY

         Stockholders' equity                                                             $6,809        $5,566
                                                                                          ======        ======
</TABLE>


                                       24


<PAGE>



             Routt County National Bank Corporation and Subsidiary
                                                       
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                                       
                           December 31, 1997 and 1996


NOTE N - PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

                                                 Statements of Income
                                               Years ended December 31,
                                                (Amounts in thousands)


<TABLE>
<CAPTION>

                                                                               1997        1996          1995
                                                                             -------      -------       -----

         <S>                                                                  <C>          <C>          <C>
         Revenue
           Dividends from subsidiary                                          $  562       $  875       $  455

         Expense
           Professional fees                                                      20            5           19
                                                                              ------       ------       ------

                  Income before income taxes and equity
                    in undistributed earnings of subsidiary                      542          870          436

         Income tax benefit                                                        7            2            6
                                                                              ------       ------       ------

                  Income before equity in undistributed
                    earnings of subsidiary                                       549          872          442

         Equity in undistributed earnings of subsidiary                        1,220          916          746
                                                                              ------       ------       ------

         NET INCOME                                                           $1,769       $1,788       $1,188
                                                                              ======       ======       ======
</TABLE>


                                       25


<PAGE>



             Routt County National Bank Corporation and Subsidiary
                                                       
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                                       
                           December 31, 1997 and 1996


NOTE N - PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

                                               Statements of Cash Flows
                                               Years ended December 31,
                                                (Amounts in thousands)
<TABLE>
<CAPTION>

                                                                               1997        1996          1995
                                                                             --------     -------       -----

   <S>                                                                        <C>          <C>             <C>
   Cash flows from operating activities
     Net income                                                               $1,769       $1,788       $1,188
     Adjustments to reconcile net loss to net
       cash provided by operating activities
         Equity in undistributed earnings of subsidiary                       (1,220)        (916)        (746)
         Changes in accruals not requiring cash                                   (5)          -            -
         Income taxes due from unconsolidated subsidiary                           1            5           (5)
                                                                              ------       ------       ------

                  Net cash provided by operating activities                      545          877          437

   Cash flows from investing activities
     Increase in other assets                                                     (8)          -            -

   Cash flows from financing activities
     Sale of common stock                                                         38           82           81
     Dividends paid                                                             (592)        (950)        (499)
                                                                              ------      -------       ------

                  Net cash used in financing activities                         (554)        (868)        (418)
                                                                              ------      -------       ------

   Net increase (decrease) in cash                                               (17)           9           19

   Cash, beginning of year                                                        34           25            6
                                                                              ------      -------       ------

   Cash, end of year                                                          $   17      $    34       $   25
                                                                              ======      =======       ======

</TABLE>


                                       26

<PAGE>




                                   APPENDIX A

                                 LAW OFFICES OF
                       SLIVKA ROBINSON WATERS & O'DORISIO
                           A Professional Corporation


                                 April 22, 1998


Zions Bancorporation
Attn: Mr. Harris Simmons, President
         and Chief Executive Officer
One South Main, Suite 1380
Salt Lake City, Utah 84111

Ladies and Gentleman:

         This letter sets forth the opinion of Slivka Robinson Waters &
O'Dorisio, P.C., regarding material Federal income tax consequences of the
merger (the "Holding Company Merger") of Routt County National Bank Corporation,
a Colorado corporation ("RCNB"), with and into Val Cor Bancorporation, Inc., a
Colorado corporation ("VCBI"), and the merger (the "Bank Merger") of the First
National Bank of Colorado ("Bank") with and into Valley National Bank of Cortez
("Valley"), in the manner and on the terms described in the Agreement and Plan
of Reorganization dated January 21, 1998 ("Plan of Merger"). Zions
Bancorporation ("Zions") is a bank holding company and the sole shareholder of
VCBI. The holders of RCNB Common Stock shall be entitled to receive, in exchange
for each share of RCNB Common Stock held of record by such stockholder as of the
Effective Date, that number of shares of Zions Common Stock as set forth in the
Plan of Merger. Capitalized terms used herein and not otherwise defined shall
have the meaning assigned to them in the Plan of Merger.

         In rendering the opinions expressed in this letter, Slivka Robinson
Waters & O'Dorisio, P.C. has, without verification, relied upon and assumed the
accuracy of all of the information contained in the following documents (the
"Relevant Documents"): (1) the Plan of Merger; (2) the RCNB 1998 statement of
facts and representations provided to us by the management of RCNB (the "RCNB
Statement of Facts and Representation"); and (3) other documents we considered
relevant. Slivka Robinson Waters & O'Dorisio, P.C. also has assumed, without
independent verification, that the parties to the Plan of Merger have acted (and
will continue to act) in accordance with all of the information and descriptions
contained in the Relevant Documents. Further, Slivka Robinson Waters &
O'Dorisio, P.C. has assumed, without independent verification, that the Holding
Company Merger and the Bank Merger will be consummated as mergers in accordance
with applicable Colorado law and the National Banking Act.

         Based on our analysis of Federal income tax law in light of the facts,
representations and other information stated in the Relevant Documents, and
subject to and contingent upon the accuracy of the RCNB Statement of Facts and
Representations and of the assumptions identified in this letter, Slivka
Robinson Waters & O'Dorisio, P.C. is of the opinion that, for Federal income tax
purposes:


                                                                            SRWO
           1099 18th STREET, SUITE 2600 o DENVER, COLORADO 80202-1926
                  TELEPHONE (303) 297-2600    FAX (303) 297-2750


<PAGE>



Slivka Robinson Waters & O'Dorisio, P.C.
Legal Tax Opinion
April 15, 1998
Page 2

     (1)  The Holding Company Merger will be treated as a reorganization within
          the meaning of Section 368(a)(1)(A) of the Internal Revenue Code of
          1986, as amended (the "Code");

     (2)  Zions, VCBI and RCNB will each be a party to the reorganization within
          the meaning of Section 368(b) of the Code;

     (3)  Shareholders of RCNB who exchange their shares of RCNB Common Stock
          for shares of Zions Common Stock will not recognize gain or loss,
          except to the extent of the cash received in lieu of fractional
          shares;

     (4)  The tax basis of the RCNB Common Stock surrendered in the Holding
          Company Merger will be allocated to the Zions Common Stock to be
          received in the Holding Company Merger (including any fractional share
          to which that shoulder may be entitled);

     (5)  The holding period of the Zions Common Stock to be received in the
          Holding Company Merger by a shareholder of RCNB will include the
          holding period of the RCNB Common Stock surrendered in exchange
          therefor provided the RCNB Common Stock is held as a capital asset by
          the shareholder on the Effective Date of the Holding Company Merger;

     (6)  RCNB will not recognize gain or loss as a result of the Holding
          Company Merger;

     (7)  Neither Zions nor VCBI will recognize gain or loss as a result of the
          Holding Company Merger;

     (8)  The basis of RCNB's assets in the hands of VCBI will be the same as
          the basis of those assets in the hands of RCNB immediately prior to
          the Holding Company Merger;

     (9)  The holding period of RCNB's assets received by VCBI will include the
          period during which such assets were held by RCNB immediately prior to
          the Holding Company Merger;

     (10) A shareholder of RCNB who receives cash in lieu of a fractional share
          of Zions Common Stock will recognize gain or loss equal to the
          difference between the cash received and the shareholder's basis in
          that fractional share, and that gain or loss will be capital gain or
          loss if the fractional share would



                                      -2-

<PAGE>



Slivka Robinson Waters & O'Dorisio, P.C.
Legal Tax Opinion
April 15, 1998
Page 3

          have been a capital asset in the hands of the shareholder (Rev. Rul.
          66-365, 1966-2 C.B. 116; Rev. Proc. 77-41, 1977-2 C.B. 574) ; and

     (11) Cash received by a shareholder of RCNB who has perfected dissenters'
          rights under the provisions of sections 7-113-101 et seq. of the
          Colorado Business Corporation Act as to his or her RCNB Common Stock
          will be treated as a distribution in redemption of such shares,
          subject to the provisions and limitations of Section 302 of the Code.

         The scope of this opinion letter is expressly limited to the Federal
income tax issues directly addressed in the eleven (11) enumerated paragraphs
above. Slivka Robinson Waters & O'Dorisio, P.C. expresses no opinion regarding
any other issue.

         The opinions expressed herein are based upon the provisions of the Code
and the Treasury Regulations promulgated thereunder, as well as upon the
Internal Revenue Service rulings and guidelines and court decisions, all valid
as of the date of this letter. However, these opinions are not binding upon the
Internal Revenue Service or any court, and no ruling confirming these opinions
will be sought from the Internal Revenue Service or any court. Moreover, the
provisions, rulings, guidelines and court decisions upon which Slivka Robinson
Waters & O'Dorisio, P.C. has relied in forming its opinions are subject to
revision, and in come cases such revisions may be given effect retroactively. In
the event of such a retroactive revision, the opinions expressed in this letter
may be invalidated. Slivka Robinson Waters & O'Dorisio, P.C. assumes no
obligation to update this opinion letter to reflect changes in facts or law
occurring after the date of this letter.

         The opinions expressed in this letter are provided solely for the
benefit of VCBI and RCNB, and their respective shareholders. This letter should
not be distributed to, nor may it be relied upon by, and other organization or
person.

         We consent to the filing of this opinion letter as an exhibit to the
Registration Statement pertaining to the registration of shares of Zions Common
Stock to be issued to the shareholders of RCNB upon consummation of the Merger
and to all references to us therein. In giving this consent, we do not admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules or regulations
of the SEC thereunder.

                                   Very truly yours,

                                   /s/ SLIVKA ROBINSON WATERS & O'DORISIO, P.C.

                                   SLIVKA ROBINSON WATERS & O'DORISIO, P.C.


                                      -3-


<PAGE>


                                   APPENDIX B

                        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;



                                       B-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.


                                       B-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).



                                       B-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;


                                       B-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


                                       B-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


                                       B-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


                                       B-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.



                                       B-8

<PAGE>


                                      PROXY

                         SPECIAL MEETING OF SHAREHOLDERS
                    OF ROUTT COUNTY NATIONAL BANK CORPORATION

                                  May 29, 1998


           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS



         The undersigned hereby appoints Timothy S. Borden and Don Lenocker, and
either of them, as proxies of the undersigned to vote as designated below on
behalf of the undersigned as a holder of the Common Stock of Routt County
National Bank Corporation ("Company Common Stock") and to vote as designated
below all shares of Company Common Stock that the undersigned held of record on
April 28, 1998, which the undersigned is entitled to vote, at the special
meeting of shareholders of Routt County National Bank Corporation (the
"Company") to be held on May 29, 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 January 21, 1998, among the
Company, its wholly-owned subsidiary First National Bank of Colorado (the
"Bank"), Zions Bancorporation ("Zions"), Val Cor Bancorporation, Inc. ("Val
Cor"), a wholly-owned subsidiary of Zions, and Bank Colorado, National
Association ("Bank Colorado"), Val Cor's wholly-owned subsidiary, an Agreement
of Merger between the Company and Val Cor and an Agreement of Merger between
Bank Colorado 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 Bank Colorado, with Bank Colorado
being the surviving national banking association (the aforementioned mergers
being referred to collectively as the "Reorganization"). Bank Colorado intends
to change its name to Vectra Bank Colorado, National Association prior to the
Special Meeting. Pursuant to the Plan of Reorganization, if the Transaction
Expenses (as defined) do not exceed $100,000, the holders of shares of Company
Common Stock will receive approximately 2.04 shares 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 a majority of the
outstanding shares of the Company Common Stock.

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
                                    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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