ZIONS BANCORPORATION /UT/
10-K, 1998-03-27
NATIONAL COMMERCIAL BANKS
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<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20459

                                    FORM 10-K

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 

For the fiscal year ended December 31, 1997

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 

      For the transition period from ___________ to ___________

COMMISSION FILE NUMBER 0-2610

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

                  UTAH                                    87-0227400
  (State of other jurisdiction of             (Internal Revenue Service Employer
  incorporation or organization)                    Identification Number)

       One South Main, Suite 1380
          Salt Lake City, Utah                              84111
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code:  (801) 524-4787

Securities registered pursuant to Section 12(b) of the act:  None

Securities registered pursuant to Section 12(g) of the act:

                        Common Stock - without par value
- --------------------------------------------------------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X]  No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Aggregate Market Value of Common Stock Held by Nonaffiliates at February 27, 
1998..............................................................$2,447,725,000

Number of Common Shares Outstanding at February 27, 1998 ......69,053,648 Shares

Documents Incorporated by Reference:

Definitive Proxy Statement (See Part III, Item 10, Item 11, Item 12, and Item
13).

<PAGE>   2
                              ZIONS BANCORPORATION
   

                       ANNUAL REPORT FOR 1997 ON FORM 10-K
    

                                TABLE OF CONTENTS


<TABLE>
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                                                                                         PAGE
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<S>     <C>                                                                              <C>


PART I

Item 1. Business                                                                           1
Item 2. Properties                                                                        11
Item 3. Legal Proceedings                                                                 12
Item 4. Submission of Matters to a Vote of Security Holders                               12
Executive Officers of the Registrant                                                      12

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters             14
Item 6. Selected Consolidated Financial Data                                              15
Item 7. Management's Discussion and Analysis of Financial Condition and Results of        16
        Operations
Item 8. Financial Statements and Supplementary Data                                       55
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial         93
     Disclosure

PART III

Item 10. Directors and Executive Officers of the Registrant                               93
Item 11. Executive Compensation                                                           93
Item 12. Security Ownership of Certain Beneficial Owners and Management                   93
Item 13. Certain Relationships and Related Transactions                                   93

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                 93
</TABLE>


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PART I

ITEM 1. BUSINESS

Zions Bancorporation (the Parent) is a multibank holding company organized under
the laws of Utah in 1955, registered under the Bank Holding Company Act of 1956,
as amended. Zions Bancorporation and its subsidiaries (the Company), is the
second largest bank holding company headquartered in Utah. In 1997, the Company
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 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.

The Company has focused in recent years on maintaining strong liquidity, strong
risk-based capital and on developing strong internal controls. An increasing
focus is currently being placed on strengthening the Company's core businesses
of retail banking, small- and medium-sized business lending, residential
mortgage and investment activities by maintaining a competitive cost structure.
In addition to these core businesses, the Company has built specialized lines of
business in institutional investments and public finance, and provides financing
to small businesses and Farmer Mac agricultural loans to improve revenue growth
and profitability while attempting to minimize risk. The Company's general
operating objectives include enhancing the Company's market position in its
broadened seven western state primary market area through acquisitions and
through the continued development of the Company's present lines of business by
providing new products and services through the use of new technology to reduce
cost and provide new and innovative ways to reach and serve customers.

The Company is committed to improving the communities it serves now and in the
years to come. The Company engages in a variety of loan programs which benefit
low to moderate income individuals, ranging from housing and business loans to
automobile loans and credit card programs.

At December 31, 1997, the Company had assets of $9.5 billion, loans of $4.9
billion, deposits of $6.9 billion, and shareholders' equity of approximately $.7
billion. A more detailed discussion concerning the Company's financial condition
is contained in Part II of this report.

The Banking Subsidiaries

The banks provide a wide variety of commercial and retail banking and
mortgage-lending financial services. Commercial loans, lease financing, cash
management, lockbox, customized draft processing, and other special financial
services are provided for business and other commercial banking customers. A
wide range of personal banking services are provided to individuals, including
bankcard, student and other installment loans and home equity lines of credit,
checking accounts, savings accounts, time certificates of various types and
maturities, trust services and safe deposit facilities. In addition, direct
deposit of payroll, social security and various other government checks are
offered. Automated teller machines provide 24-hour access and availability to
customers' accounts and to many consumer banking services through statewide,
regional, and nationwide ATM networks. Customer transactions are processed
through the Company's ATMs, point-of-sale terminals, and ATMs operated by other
financial institutions.

Zions First National Bank in Utah has developed special packages of financial
services designed to meet the financial needs of particular market niches. The
Bank has also established a Private Banking group to 


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service the financial needs of wealthy individuals; an Executive Banking program
to service the needs of corporate executives of commercial clients, and an
Affinity program which offers discounted financial services to employees of
commercial accounts on a group basis. Zions Bank has also developed a series of
products geared to the lower-income customer, including the Flex Loan (a
low-income personal loan), and several low-income housing programs.

Zions First National Bank offers an electronic bill paying service activated
through a touch tone telephone. Home banking products are available on the
VISA(R) platform, using Quicken(R), Microsoft Money(R) and Macintosh(R) personal
financial management software programs, and over the internet which allows a
retail customer to use a home computer to access and transfer account balances,
pay bills, and maintain and reconcile accounts. Zions Bank also delivers
electronically State of Utah benefits through the use of an electronic card
system "Utah Horizon EBT" at statewide merchant locations. "Reddi-Banker," an
interactive video banking platform, allows customers to obtain product
information, open deposit accounts, obtain loans, buy insurance, and purchase
investment products.

Zions First National Bank is a primary dealer in United States Treasury
Securities. Zions is a major underwriter and distributor of municipal
securities, federal agency securities and specialized securities such as the
government-guaranteed portions of U.S. Small Business Administration (SBA)
loans. Zions' Capital Markets group provides executable quotes on odd-lot
government and agency securities via Bloomberg and the internet. Zions also
provides financial advisory services to municipalities and other public
entities.

Through Zions Small Business Finance division, Zions Bank provides SBA 7(a)
loans to small businesses throughout the United States. Zions Bank's SBA 504
department works with Certified Development Companies and correspondent banks
throughout the country, providing the nation's largest source of secondary
market financing for this loan program. Zions Agricultural Finance, a new
division, specializes in originating, underwriting, and servicing long-term farm
and ranch loans.

Zions First National Bank provides correspondent banking services such as cash
letter processing, wire services, federal funds facilities, and loan
participations. Zions Bank's International Banking Department issues letters of
credit and handles foreign exchange transactions for customers, but it does not
take a trading position in foreign exchange. Zions Bank's Grand Cayman branch
accepts Eurodollar deposits from qualified customers. Zions' banking
subsidiaries, however, do not engage in any foreign lending.

Zions First National Bank, Nevada State Bank and National Bank of Arizona have
established trust divisions. Clients in Utah, Nevada, Arizona and Colorado are
offered a variety of fiduciary services ranging from the administration of
estates and trusts to the management of funds held under pension and profit
sharing plans. They also offer custodian, portfolio, and management services.
The Trust Division of Zions First National Bank also acts as fiscal and payment
agent, transfer agent, registrar, and trustee under corporate and trust
indentures for corporations, governmental bodies, and public authorities.

Other Subsidiaries

The Company conducts various other bank-related business activities through
subsidiaries owned by Zions First National Bank and subsidiaries of the Parent.
Zions Mortgage Company, a subsidiary of Zions First National Bank, conducts a
mortgage banking operation in Utah, Nevada and Arizona. Zions Credit
Corporation, a subsidiary of Zions First National Bank, engages in lease
origination and servicing operations primarily in Utah, Nevada, and Arizona.
Zions Investment Securities, Inc., also a subsidiary of the Bank, provides
discount investment brokerage services on a nonadvisory basis to both commercial
and consumer customers. Personal investment officers employed by the discount
brokerage subsidiary in many larger branch offices provide customers with a wide
range of investment products, including municipal bond, mutual funds and
tax-deferred annuities. Zions First National Bank's Small Business Investment
Corporation, Wasatch Venture Corporation, provides early-stage capital,
primarily for technology companies located in the West.


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Zions Life Insurance Company underwrites, as reinsurer, credit-related life and
disability insurance. Zions Insurance Agency, Inc., operates an insurance
brokerage business which administers various credit-related insurance programs
in the Company's subsidiaries and sells general lines of insurance. The
Company's insurance subsidiaries offer customers a full range of insurance
products through licensed agents. The products include credit life products,
collateral protection products, life policies, homeowners policies, property and
casualty policies, and commercial business owner type policies. Cash Access,
Inc. provides an ATM network for cash dispensing ATMs to be installed in
convenience stores, service stations, hotels and other businesses. Zions Data
Service Company provides data processing services to all subsidiaries of the
Company.

Supervision and Regulation

Bank holding companies and banks are extensively regulated under both federal
and state law. The information contained in this section summarizes portions of
the applicable laws and regulations relating to the supervision and regulation
of Zions Bancorporation 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. Any change in applicable law or
regulation may have a material effect on the business and prospects of Zions
Bancorporation and its subsidiaries.

Bank Holding Company Regulation

Zions Bancorporation is a bank holding company within the meaning of the Bank
Holding Company Act and is registered as such with the Federal Reserve Board.
Under the current terms of that Act, activities of Zions Bancorporation, 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 Federal Reserve Board 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 Federal Reserve Board 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 the 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 Bancorporation, are required to file with
the Federal Reserve Board certain reports and information and are required to
obtain prior approval of the Board to engage in a 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 ("Riegle-Neal Act"),
subject to approval by the Federal Reserve Board, 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 which are mentioned in the discussion on "Interstate
Banking" which follows. 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.

The Federal Reserve Board has authorized the acquisition and control by bank
holding companies of savings and loan associations and certain other savings
institutions without regard to geographic restrictions applicable to acquisition
of shares of a bank.

The Federal Reserve Board is authorized to adopt regulations affecting various
aspects of the operation 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 Federal Reserve Board
has adopted capital adequacy guidelines prescribing both risk-based capital and
leverage ratios.


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<PAGE>   6
Regulatory Capital Requirements

Risk-Based Capital Guidelines

The Federal Reserve Board has established risk-based capital guidelines for bank
holding companies. The guidelines define Tier I Capital and Total Capital. Tier
I 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 I Capital plus qualifying mandatory
convertible debt, perpetual debt, certain hybrid capital instruments, certain
preferred stock not qualifying as Tier I 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
Federal Reserve Board, certain intangible assets, a portion of limited-life
capital instruments approaching maturity and reciprocal holdings of banking
organizations' capital instruments. The Tier I component must constitute at
least 50% of qualifying Total Capital.

Risk-based capital ratios are calculated with reference to risk-weighted assets,
which include both on-balance sheet and off-balance sheet exposures. The
risk-based capital framework contains four risk-weighted 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 I Capital. At
December 31, 1997, the Company's Tier I 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, beginning on or before
January 1, 1998, include in its risk-based capital ratio analysis charges for,
and hold capital against, general market risk of all positions held in its
trading accounting 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 Bancorporation and its bank
subsidiaries are not required to include a risk-based capital charge for its
market risk.


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Minimum Leverage Ratio

The Federal Reserve Board 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.

The Federal Reserve Board 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
Federal Reserve Board 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. At December
31, 1997, the Company's Tier I leverage ratio was 6.75%.

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 of the Currency, the FDIC, and the
Federal Reserve Board have issued regulations establishing the capital
requirements for banks under federal law. The regulations, which apply to Zions
Bancorporation's banking subsidiaries, establish minimum risk-based and leverage
ratios which are substantially similar to those applicable to the Company. As of
December 31, 1997, the risk-based and leverage ratios of each of Zions
Bancorporation's banking subsidiaries exceeded the minimum requirements.

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 established five capital
tiers: "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized," and "critically undercapitalized."
Implementing regulations adopted by the federal banking agencies define the
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.

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 significantly undercapitalized,
critically undercapitalized and certain undercapitalized banks may be required
to obtain the approval of the Federal Reserve Board before paying capital
distributions to their shareholders. Moreover, a bank that is not well
capitalized is generally subject to various restrictions on "pass through"
insurance coverage for certain of its accounts and is generally prohibited from
accepting brokered deposits and offering interest rates on any deposits
significantly higher than the prevailing rate in its normal market area or
nationally (depending upon where the deposits are solicited). Such banks and
their holding companies are also required to obtain regulatory approval prior to
their retention of senior executive officers.


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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

The depository institution subsidiaries are supervised and regularly examined by
various federal and state regulatory agencies. Deposits, reserves, investments,
loans, consumer law compliance, issuance of securities, payment of dividends,
mergers and consolidations, electronic funds transfers, management practices,
and other aspects of operations are subject to regulation. In addition, numerous
federal, state, and local regulations set forth specific restrictions and
procedural requirements with respect to the extension of credit, credit
practices, the disclosure of credit terms, and discrimination in credit
transactions. The various regulatory agencies, as an integral part of their
examination process, periodically review the banking subsidiaries' allowances
for loan losses. Such agencies may require the depository institution
subsidiaries to recognize additions to such allowances based on their judgments
using information available to them at the time of their examinations.

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, earnings and stock valuation, as
well as other operational and managerial standards deemed appropriate by the
agencies. Upon a determination by a federal banking agency that an insured bank
has failed to satisfy any such standard, the bank will be required to file an
acceptable plan to correct the deficiency. If the bank fails to submit or
implement an acceptable plan, the federal banking agency may, and in some
instances must, issue an order requiring the institution to correct the
deficiency, restrict its asset growth or increase its ratio of tangible equity
to assets, or imposing other operating restrictions.


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<PAGE>   9
FDICIA also contains provisions which, among other things, restrict investments
and activities as principal by state nonmember banks to those eligible for
national banks, impose limitations on deposit account balance determinations for
the purpose of the calculation of interest, and require the federal banking
regulators to prescribe, implement or modify standards for extensions of credit
secured by liens on interests in real estate or made for the purpose of
financing construction of a building or other improvements to real estate, loans
to bank insiders, regulatory accounting and reports, internal control reports,
independent audits, exposure on interbank liabilities, contractual arrangements
under which institutions receive goods, products or services, deposit
account-related disclosures and advertising as well as to impose restrictions on
federal reserve discount window advances for certain institutions and to require
that insured depository institutions generally be examined on-site by federal or
state personnel at least once every 12 months.

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

The Community Reinvestment Act (CRA) requires banks to help serve the credit
needs in their communities, including credit to low and moderate income
individuals and geographies. Should the Company or its subsidiaries fail to
adequately serve the community, there are penalties which might be imposed.
Corporate applications to expand branches, relocate, add subsidiaries and
affiliates, and merge with or purchase other financial institutions could be
denied. Community groups are encouraged through the regulation to protest
applications for any bank subject to this regulation if they feel that the bank
is not serving the credit needs of the community in which it serves. The Company
and its subsidiaries have been deemed by regulators in the past to be adequately
serving its communities.

There are many other regulations requiring detailed compliance procedures which
increase costs and require additional time commitments of employees. Regulators
and the Congress continue to put in place rules and laws to protect consumers,
which have a cumulative additional impact on the cost of doing business. At this
point, management cannot completely assess how much earnings might be affected
from these consumer laws.

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
Bancorporation or its subsidiaries.

In addition, cases are pending before federal and state courts that seek to
expand or restrict interpretations of existing law and regulation affecting bank
holding companies and their subsidiaries. It is not possible to predict the
extent to which Zions Bancorporation and its subsidiaries may be affected by any
of these initiatives.


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<PAGE>   10
Deposit Insurance Assessments

The insured bank subsidiaries of Zions Bancorporation are required to make
quarterly deposit insurance assessment payments to the Bank Insurance Fund
("BIF"), and most savings associations to the Savings Associations Insurance
Fund ("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 basis points without public comment. The FDIC Board of Directors
also possesses authority to impose special assessments from time to time.

In addition to the payment of deposit insurance assessments, depository
institutions are required to make quarterly assessment payments to the FDIC on
both their BIF and SAIF assessable deposits which will be paid to the Financing
Corporation to enable it to pay interest and certain other expenses on bonds
which it issued pursuant to FIRREA to facilitate the resolution of failed
savings associations. Pursuant to the Federal Home Loan Bank Act, the Financing
Corporation, with the approval of the FDIC Board of Directors, establishes
assessment rates based upon estimates of (i) expected operating expenses, case
resolution expenditures and income of the Financing Corporation; (ii) the effect
of assessments upon members' earnings and capital; and (iii) any other factors
deemed appropriate by it. Additionally, the Financing Corporation is required to
assess BIF-assessable deposits at a rate one-fifth the rate applicable to
SAIF-assessable deposits until the first to occur of the merger of the BIF and
SAIF funds or January 1, 2000. Assessment rates for the first semi-annual period
of 1998 have been set at 1.256 basis points annually for Quarter 1 and 1.244 for
Quarter 2 for BIF-assessable deposits, and 6.28 and 6.22 basis points annually,
respectively, for SAIF-assessable deposits.


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<PAGE>   11
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 Federal Reserve Board 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 if 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 its offices into branches of the
resulting 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, 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 lower deposit concentration limits, so long as those
limits apply to all bank holding companies equally. Additional requirements
placed on mergers include conformity with state law branching requirements and
compliance with "host state" merger filing requirements to the extent that those
requirements do not discriminate against out-of-state banks or out-of-state bank
holding companies.

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 under Utah law to
acquire control of depository institutions located in other states. The laws of
Arizona, California and in certain instances Nevada permit the acquisition of
banks headquartered in those states by out-of-state bank holding companies
irrespective of the age of the institution to be acquired, upon receipt of state
regulatory approval, and the laws of Colorado, Idaho and in certain instances
Nevada permit the acquisition of banks located in those states by bank holding
companies only if the institution to be acquired has been in continuous
operation as a bank for at least five years prior to the acquisition, upon
receipt of state regulatory approval. These jurisdictions also authorize certain
banks headquartered within their borders to engage in interstate merger
transactions either as resulting or disappearing institution.


                                       9
<PAGE>   12
Government Monetary Policies and Economic Controls

The earnings and business of the Company are affected by general economic
conditions. In addition, fiscal or other policies that are adopted by various
governmental authorities can have important consequences on the financial
performance of the Company. The Company is particularly affected by the policies
of the Federal Reserve Board which regulate the national supply of bank credit.
The instruments of monetary policy available to the Federal Reserve Board
include open-market operations in United States government securities;
manipulation of the discount rates of member bank borrowings; imposing or
changing reserve requirements against member bank deposits; and imposing or
changing reserve requirements against certain borrowings by banks and their
affiliates. These methods are used in varying combinations to influence the
overall growth of bank loans, investments and deposits, and the interest rates
charged on loans or paid for deposits.

In view of changing conditions in the economy and the effect of the credit
policies of monetary authorities, it is difficult to predict future changes in
loan demand, deposit levels and interest rates, or their effect on the business
and earnings of Zions Bancorporation and its subsidiaries. Federal Reserve Board
monetary policies have had a significant effect on the operating results of
commercial banks in the past and are expected to continue to do so in the
future.

Competition

Zions Bancorporation and its subsidiaries operate in a highly competitive
environment. The banking subsidiaries compete with other banks, thrift
institutions, credit unions and money market, and other mutual funds for
deposits and other sources of funds. In addition, Zions Bancorporation and its
bank and nonbank subsidiaries face increased competition with respect to the
diverse financial services and products they offer. Competitors include not only
other banks, thrift institutions, and mutual funds, but also insurance
companies, leasing companies, finance companies, brokerage firms, investment
banking companies, and a variety of other financial services and advisory
companies. Many of these competitors are not subject to the same regulatory
restrictions and regulation- or supervision-derived costs as are bank holding
companies and banks such as Zions Bancorporation and its banking subsidiaries.

The Company expects that competitive conditions will continue to intensify as a
result of technological advances. Technological advances have, for example, made
it possible for nondepository institutions to offer customers automatic transfer
systems and other automated-payment systems services that have been traditional
banking products.

Employees

The Company employs approximately 4,908 full- and part-time people with
approximately 4,681 being employed by the banking subsidiaries. The Company had
4,347 full-time equivalent employees at December 31, 1997, compared to 3,343 at
December 31, 1996. Banking subsidiaries had 4,136 full-time equivalent employees
at the end of 1997, compared to 3,130 a year earlier. The Company believes that
it enjoys good employee relations. In addition to competitive salaries and
wages, Zions Bancorporation and its subsidiaries contribute to group medical
plans, group insurance plans, pension, stock ownership and profit sharing plans.


                                       10
<PAGE>   13
Supplementary Information

The following supplementary information, which is required under Guide 3
(Statistical Disclosure by Bank Holding Companies), is found in this report on
the pages indicated below, and should be read in conjunction with the related
financial statements and notes thereto.

Statistical Information

<TABLE>
<CAPTION>
                                                                                         Page
<S>                                                                                      <C>  

I.    Distribution of Assets, Liabilities and Shareholders' Equity,
      Average Balance Sheets, Yields and Rates                                           25-27
      Analysis of Interest Changes Due to Volume and Rates                                28

II.   Investment Securities                                                               34
      Maturities and Average Yields of Investment Securities                              35

III.  Loan Portfolio                                                                      36
      Loan Maturities and Sensitivity to Changes in Interest Rates                        37
      Loan Risk Elements                                                                 44-47

IV.   Summary of Loan Loss Experience                                                     49

V.    Deposits                                                                            39

VI.   Return on Equity and Assets                                                         41

VII.  Short-term Borrowings                                                               40

VIII. Foreign Operations                                                                  43
</TABLE>


ITEM 2. PROPERTIES

In Utah and Idaho, seventy (70) of Zions First National Bank's one hundred and
twenty-nine (129) offices are located in buildings owned by the Company and the
other fifty-nine (59) are on leased premises. In Nevada, twelve (12) of Nevada
State Bank's forty (40) offices are located in buildings owned and the other
twenty-eight (28) are on leased premises. In Arizona, National Bank of Arizona
owns thirteen (13) offices and leases seventeen (17) offices. In Colorado, ten
(10) of the Company's fourteen (14) offices are located in buildings owned and
the other four (4) are on leased premises. In California, Grossmont Bank owns
two (2) offices and leases thirteen (13) offices. The annual rentals under
long-term leases for such banking premises are determined under various formulas
and include as various factors, operating costs, maintenance and taxes.

The Company's subsidiaries conducting lease financing, insurance, and discount
brokerage activities operate from leased premises. Zions Mortgage Company, a
mortgage banking subsidiary of Zions First National Bank, operates its principal
office in a building owned by the bank.

For information regarding rental payments, see note 13 of Notes to Consolidated
Financial Statements, which appears in Part II, Item 8, on page 78 of this
report.


                                       11
<PAGE>   14
ITEM 3. LEGAL PROCEEDINGS

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


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of 1997.

EXECUTIVE OFFICERS OF THE REGISTRANT

The names, ages, positions, and backgrounds of the Company's executive officers
as of February 27, 1998, are set forth as follows:

<TABLE>
<CAPTION>
                                       Positions and Offices Held With Zions            Officer
Name                    Age          Bancorporation and Principal Subsidiaries           since
- ----                    ---          -----------------------------------------          -------

<S>                     <C>    <C>                                                      <C> 
Roy W. Simmons          82     Chairman of the Company, and Member of the Board of       1961
                               Directors of Zions First National Bank.

Harris H. Simmons       43     President & Chief Executive  Officer of the Company;      1981
                               Chairman  of the Board of  Directors  of Zions First
                               National Bank.

A. Scott Anderson       51     Executive  Vice  President of the Company,  President     1997(1)
                               and Chief  Executive  Officer of Zions First National
                               Bank.   Prior  to  January   1998,   Executive   Vice
                               President of Zions First National Bank.

Danne L. Buchanan       40     Executive   Vice   President  of  the  Company,   and     1995
                               President  of Zions Data  Service  Company.  Prior to
                               March  1995,   Senior  Vice   President  and  General
                               Manager  of  Zions  Data  Service  Company.  Prior to
                               January 1998, Senior Vice President of the Company.

Gerald J. Dent          56     Executive  Vice   President  of  the  Company,   and      1987
                               Executive  Vice  President  of Zions First  National
                               Bank.  Prior to January 1998,  Senior Vice President
                               of the Company.

Dale M. Gibbons         37     Executive Vice President,  Chief  Financial  Officer      1996
                               and  Secretary  of  the  Company;   Executive   Vice
                               President  and  Secretary  of Zions  First  National
                               Bank.  Prior to August 1996,  Senior Vice  President
                               of  First  Interstate  Bancorp.   Prior  to  January
                               1998, Senior Vice President of the Company.

W. David Hemingway      50     Executive Vice  President of the Company;  Executive      1997(2)
                               Vice President of Zions First National Bank.
</TABLE>


                                       12
<PAGE>   15
<TABLE>
<S>                     <C>    <C>                                                      <C> 
John J. Gisi            52     Senior Vice  President of the Company,  and Chairman      1994
                               and Chief  Executive  Officer  of  National  Bank of
                               Arizona since 1987.

Clark B. Hinckley       50     Senior  Vice  President  of the  Company.  Prior  to      1994
                               March 1994, President of a Company subsidiary,
                               Zions First National Bank of Arizona.

George B. Hofmann III   48     Senior Vice President of the Company,  and President      1995
                               and Chief  Executive  Officer of Nevada  State Bank.
                               Prior to April 1995,  Senior Vice President of Zions
                               First National Bank.

Gary Judd               57     Senior Vice  President of the Company;  President and     1998
                               Chief Executive Officer of Vectra Bank.

Walter E. Kelly         65     Controller of the Company                                 1980

Ronald L. Johnson       42     Vice President of the Company                             1989

John B. D'Arcy          55     Executive  Vice  President  of Zions  First  National     1989
                               Bank

Peter K. Ellison        55     Executive Vice President of Zions First National Bank     1968

Nolan X. Bellon         49     Controller of Zions First National Bank                   1987
</TABLE>

(1)  Officer of Zions First National Bank since 1990.
(2)  Officer of Zions First National Bank since 1977.


                                       13
<PAGE>   16
PART II


ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Principal market where common stock is traded:

Nasdaq     National Market       Symbol "ZION"

High and low bid quotations on a quarterly basis for the past three years:

<TABLE>
<CAPTION>
                           1997                      1996                      1995
                  ----------------------    ----------------------    ----------------------
                     HIGH         LOW          HIGH         LOW          HIGH         LOW
                  ---------    ---------    ---------    ---------    ---------    ---------
<S>               <C>          <C>          <C>          <C>          <C>          <C>      
1st Quarter       $   33.25    $   25.69    $   19.81    $   16.69    $   10.13    $    8.88
2nd Quarter           37.63        28.38        19.75        17.00        12.50         9.53
3rd Quarter           41.13        34.69        22.44        18.00        15.38        12.38
4th Quarter           46.00        37.63        26.00        21.94        20.28        15.22
</TABLE>

Number of common shareholders of record as of latest practicable date:

5,523 common shareholders as of February 27, 1998

Frequency and amount of dividends paid during three years:

<TABLE>
<CAPTION>
               1ST          2ND          3RD          4TH
               QTR          QTR          QTR          QTR
           -----------  -----------  -----------  -----------
<S>        <C>          <C>          <C>          <C>        
1997       $     .1100  $     .1200  $     .1200  $     .1200
1996             .1025        .1025        .1100        .1100
1995             .0750        .0875        .0875        .1025
</TABLE>

Description of any restrictions on the issuer's present or future ability to pay
dividends:

Funds for the payment of dividends by Zions Bancorporation have been obtained
primarily from dividends paid by the commercial banking and other subsidiaries.
In addition to certain statutory limitations on the payment of dividends,
approval of federal and/or state banking regulators may be required in some
instances for any dividend to Zions Bancorporation by its banking subsidiaries.
The payment of future dividends therefore is dependent upon earnings and the
financial condition of the Company and its subsidiaries as well as other
factors.


                                       14
<PAGE>   17
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data is derived from the audited
consolidated financial statements of the Company. It should be read in
conjunction with the Company's consolidated financial statements and the related
notes and with management's discussion and analysis of financial condition and
results of operations and other detailed information included elsewhere herein.


<TABLE>
<CAPTION>
                                                                                Years ended December 31,
                                                       ---------------------------------------------------------------------------
(Amounts in thousands, except per share and ratio data)   1997            1996            1995            1994           1993
                                                       ------------    ------------    ------------    ------------   ------------
<S>                                                    <C>             <C>             <C>             <C>            <C> 
                                                     
RESULTS OF OPERATIONS                                
                                                     
Interest income                                        $    682,296    $    518,991    $    439,495    $    353,989   $    293,616
                                                     
Interest expense                                            330,497         229,825         205,948         155,383        118,959
                                                       ------------    ------------    ------------    ------------   ------------
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 interest income after provision for loan                345,624         284,526         230,547         196,425        171,664
losses                                               
Noninterest income                                          143,167         114,270          88,811          73,202         79,880
Noninterest expense                                         301,218         235,272         195,186         174,900        167,750
                                                       ------------    ------------    ------------    ------------   ------------
Income before income taxes and cumulative            
  effect of changes in accounting principles                187,573         163,524         124,172          94,727         83,794
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                                                     --              --              --              --            1,659
                                                       ------------    ------------    ------------    ------------   ------------
Net income                                             $    122,362    $    107,423    $     82,385    $     63,827   $     58,205
                                                       ============    ============    ============    ============   ============
COMMON SHARE DATA                                    
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
Operating cash earnings (diluted)                              2.01            1.72            1.41            1.12           1.04
Dividends declared                                            .4700           .4250           .3525           .2900          .2450
Book value - year end                                         10.25            8.72            7.46            6.28           5.50
Market price - year end                                       45.38           26.00           20.06            8.97           9.25

YEAR END BALANCES                                    
                                                     
Assets                                                 $  9,521,770    $  7,116,413    $  6,095,515    $  4,934,095   $  4,801,054
Loans and leases                                          4,871,650       3,837,149       3,068,057       2,391,278      2,486,346
Deposits                                                  6,854,462       5,119,692       4,511,184       3,705,976      3,432,289
Shareholders' equity                                        655,460         554,610         469,678         365,770        312,592

RATIOS                                               
                                                     
Return on average assets                                       1.33%           1.55%           1.43%           1.17%          1.25%
Return on average assets operating cash basis                  1.43%           1.60%           1.47%           1.20%          1.29%
Return on average common equity                               19.88%          20.95%          20.22%          18.82%         20.33%
Return on average common equity operating cash basis          25.34%          23.26%          22.08%          20.54%         21.94%
Average equity to average assets                               6.68%           7.42%           7.05%           6.22%          6.17%
Tier I leverage - year end                                     6.75%           8.70%           6.33%           6.24%          5.44%
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%
Net interest margin                                            4.27%           4.68%           4.53%           4.07%          4.23%
Nonperforming assets to total assets - year end                 .17%            .19%            .21%            .38%           .64%
Nonperforming assets to net loans and leases,        
   other real estate owned and other nonperforming 
   assets at year end                                           .33%            .36%            .41%            .79%          1.23% 
Net charge-offs (recoveries) to average loans                  
   and leases                                                   .19%            .11%            .10%            .19%         (.23)% 
                                           
Allowance for loan losses to net loans and           
   leases outstanding at year end                              1.65%           2.00%           2.39%           2.80%          2.75%
Allowance for loan losses to nonperforming                  
   loans at year end                                         638.84%         566.35%         660.17%         471.89%        250.13%
</TABLE>


                                       15
<PAGE>   18
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The following analysis of the Company's financial condition and results of
operations as of and for the years ended December 31, 1997, 1996, and 1995
should be read in conjunction with the consolidated financial statements of the
Company and detailed information presented elsewhere herein.

PERFORMANCE SUMMARY

Zions Bancorporation achieved record earnings of $122.4 million or $1.89 per
share in 1997. Net income and earnings per share increased 13.9% and 12.5%,
respectively over the $107.4 million or $1.68 per share for 1996 which were up
30.4% and 22.6%, respectively over the $82.4 million or $1.37 per share earned
in 1995. Dividends per share were $.47 per share in 1997, an increase of 10.6%
over $.425 in 1996, which were up 20.6% over $.3525 in 1995. Financial results
have been restated for prior periods to reflect the acquisition of GB
Bancorporation during the last quarter of 1997, which was accounted for as a
pooling of interests, and a four-for-one split of the Company's common stock
during the second quarter of 1997.

The return on average shareholders' equity was 19.88% and the return on average
assets was 1.33% for 1997, compared with 20.95% and 1.55%, respectively, in
1996, and 20.22% and 1.43%, respectively, in 1995.

The Company is also providing its earnings performance on an operating cash
basis since it believes that its cash operating performance is a better
reflection of its financial position and shareholder value creation as well as
its ability to support growth, pay dividends, and repurchase stock than reported
net income. Operating cash earnings are earnings before the amortization of
goodwill and core deposit intangible assets and merger expense.

Operating cash earnings for 1997 were $130.0 million or $2.01 per share for
1997, an increase of 18.0% and 16.9%, respectively, over the $110.2 or $1.72 per
share for 1996 which was up 30.1% and 22.0% over the $84.7 million or $1.41 per
share in 1995. The return on average shareholders' equity and the return on
average assets on an operating cash basis were 25.34% and 1.43%, respectively,
for 1997 compared to 23.26% and 1.60% for 1996 and 22.08% and 1.47% for 1995.

The record performance of the Company was driven by a 26.5% growth in average
loans and leases and a 32.7% growth in total earning assets that led to a 21.0%
increase in taxable-equivalent net interest income to $358.7 million in 1997.
Noninterest income increased 25.3% to $143.2 million in 1997, with strong growth
in service charges, trust income, trading account income, and loan sales and
servicing income. Noninterest expense increased 28.0% to $301.2 million in 1997.
The increase in noninterest expense is mainly attributable to the record growth
of the Company during 1997 through acquisitions and expansion, and increased
expenditures related to technology initiatives. The number of full-time
equivalent employees increased to 4,347 at year end 1997 from 3,343 at the end
of 1996, banking offices increased to 229 from 154 and ATMs increased to 485
from 339. The increased expenses related primarily to expansion and technology
initiatives resulted in an increase in the Company's efficiency ratio, or
noninterest expenses as a percentage of total taxable-equivalent net revenues to
60.02% for 1997 compared to 57.29% for 1996 and 59.56% for 1995. The operating
cash performance efficiency ratio was 58.32% for 1997 compared to 56.60% for
1996 and 58.77% for 1995.

The Company's provision for loan losses totaled $6.2 million for 1997 compared
to $4.6 million for 1996. Net charge-offs were $8.0 million, or .19% of average
loans and leases in 1997 compared to $3.8 million or .11% in 1996. Nonperforming
assets increased slightly to $16.0 million or .33% of loans and other real
estate owned on December 31, 1997 from $13.7 million or .36% on December 31,
1996.


                                       16
<PAGE>   19
REVIEW OF OPERATIONS

Commercial Banking

The year 1997 has been a year of unparalleled growth, and a year in which a
foundation has been established for a great deal of future growth. The Company
has achieved a significant expansion of its branch system of commercial banking
operations in Utah, Nevada and Arizona and has expanded its franchise by adding
banking operations in Colorado, New Mexico, Idaho and California. Acquisitions
consisted of Aspen Bancshares and its affiliate banks with branches in Colorado
and New Mexico; Tri-State Bank in Montpelier, Idaho; 31 Wells Fargo branches in
Utah, Idaho, Arizona and Nevada; Sun State Bank in Las Vegas, Nevada; Grossmont
Bank in San Diego, California; and the public finance firms of Howarth &
Associates in Nevada and Kelling, Northcross & Nobriga, Inc. in California.

Zions First National Bank and Subsidiaries

Zions First National Bank and subsidiaries experienced growth in 1997 as
operating cash earnings increased 7.0% to $89.5 million as compared to $83.6
million in 1996 and net income increased 6.5% to $88.6 million compared to $83.1
million in 1996. The increase was a result of a $18.1 million increase in net
interest income and a $20.0 million increase in noninterest income partially
offset by a $28.2 million increase in noninterest expense, a $4.1 million
increase in income taxes and a $.4 million increase in net after tax expense for
amortization of goodwill and core deposit intangibles. Zions First National Bank
and subsidiaries operating cash efficiency ratio was 56.85% in 1997 as compared
to 54.50% in 1996.

Zions First National Bank opened twelve new grocery store banking centers in
Utah and acquired three traditional branches, bringing the total number of
banking centers in Utah to 38 and total offices in Utah to 114. During 1997,
Zions First National Bank also acquired twelve traditional branches, and opened
two new grocery store banking centers and one new traditional branch for a total
of 15 offices in Idaho.

Zions Mortgage Company, a subsidiary of Zions First National Bank, contributed
net income of $.8 million in 1997 compared to $1.4 million in 1996. Zions
Mortgage Company experienced mortgage origination volume of $396.1 million in
1997, approximately the same as in 1996. On December 31, 1997, Zions Mortgage
Company serviced for others long-term first mortgage real estate loans in the
amount of $1,896.8 million compared to $1,542.0 million on December 31, 1996.

Zions Credit Corporation, also a subsidiary of Zions First National Bank,
contributed net income of $46 thousand in 1997. Zions Credit Corporation
generated $63.1 million in new lease volume and brokered to third parties an
additional $8.5 million in leases in 1997 compared to $78.6 million and $3.1
million, respectively, in 1996. Average lease receivables and conditional sales
contracts serviced by Zions Credit Corporation increased 10.2% to $187.3 million
in 1997 compared to $170.0 million in 1996.

Zions Investment Securities, Inc. contributed $1.2 million in pretax income and
revenue sharing to the Company's banking operations in 1997 compared to $.9
million in 1996. Net income, which is included as a subsidiary of Zions First
National Bank, was $506 thousand in 1997, a 41.6% increase from $358 thousand in
1996. Zions Investment Securities, Inc. has 42 registered investment advisors
who offer a full range of brokerage services and products.

Wasatch Venture Corporation, a small business investment company which is a
subsidiary of Zions First National Bank and an affiliated company of National
Bank of Arizona, contributed net income of $1.2 million in 1997 as compared to
$.4 million in 1996. On December 31, 1997 Wasatch had equity investments in 28
entities for which it has provided venture capital.


                                       17
<PAGE>   20
Nevada State Bank

Nevada State Bank achieved operating cash earnings of $11.0 million in 1997, an
increase of 50.8% over $7.3 million in 1996 and net income increased 47.4% to
$10.7 million as compared to $7.3 million in 1996. The increase resulted from a
net revenue increase of $14.4 million, partially offset by a $.3 million
increase in the provision for loan losses, a $8.6 million increase in
noninterest expense, a $1.8 million increase in income taxes and a $.3 million
increase in net after tax expense for amortization of goodwill and core deposit
intangibles. Nevada State Bank's operating cash performance efficiency ratio
improved to 63.10% in 1997 as compared to 64.67% in 1996. During 1997, Nevada
State Bank opened one new grocery store banking center and four traditional
branches and added ten traditional branches from acquisitions, bringing the
total number of banking centers in Nevada to 19 and total offices in Nevada to
40.

National Bank Of Arizona

Operating cash earnings at National Bank of Arizona increased 21.9% to $19.2
million in 1997 as compared to $15.8 million in 1996 and net income was $17.8
million in 1997 as compared to $14.7 million in 1996, a 21.5% increase. The
increase resulted from a net revenue increase of $13.8 million partially offset
by a $.1 million increase in the provision for loan losses, a $7.9 million
increase in noninterest expense, a $2.4 million increase in income taxes and a
$.3 million increase in net after tax expense for amortization of goodwill and
core deposit intangibles. National Bank of Arizona's operating cash performance
efficiency ratio was 49.86% in 1997 as compared to 47.97% in 1996. In 1997,
National Bank of Arizona opened two new branches and added eleven by
acquisition, bringing the total offices in Arizona to 30.

Colorado Banks

Colorado banks are the banking entities acquired on May 16, 1997 in the merger
with Aspen Bancshares, Inc., namely, Pitkin County Bank and Trust, Centennial
Savings Bank, F.S.B., and Valley National Bank of Cortez. Colorado combined
operating cash earnings were $3.7 million and net income was $2.2 million after
deducting $1.5 million of expense for amortization of goodwill for the period
May 17 through December 1997. The Colorado combined operating cash performance
efficiency ratio in 1997 since acquisition was 60.62%. The combined branches
include one banking center office and twelve traditional branches in Colorado
and one traditional branch in New Mexico.

Grossmont Bank

Grossmont Bank experienced strong growth in 1997 as operating cash earnings
increased 69.5% to $11.9 million as compared to $7.0 million in 1996 and net
income increased 74.7% to $11.4 million as compared to $6.6 million in 1996. The
increase resulted from a net revenue increase of $13.2 million partially offset
by a $1.4 million increase in the provision for loan losses, a $3.9 million
increase in noninterest expense and a $3.0 million increase in income taxes.
Grossmont Bank's operating cash performance efficiency ratio improved to 52.76%
in 1997 as compared to 60.73% in 1996. During 1997, the number of Grossmont
Bank's branches increased by three for a total of 15 offices.

The following table presents operating segments information for each of the
Company's major operating segments on December 31, 1997 and 1996 and for the
years then ended.


                                       18

<PAGE>   21
Operating Segments Information


<TABLE>
<CAPTION>
                                           ZIONS FIRST NATIONAL BANK                              NEVADA STATE
                                               AND SUBSIDIARIES                                        BANK
                                  ----------------------------------------------   ----------------------------------------------
(Amounts in thousands)               1997              1996            % Change       1997              1996            % Change
                                  ----------        ----------        ----------   ----------        ----------        ----------
<S>                               <C>               <C>               <C>          <C>               <C>               <C>  
CONDENSED INCOME STATEMENT
Net interest income               $  206,009        $  187,900             9.6 %   $   37,076        $   25,694              44.3%
Noninterest income                   113,756            93,737            21.4 %       11,884             8,807              34.9%
                                  ----------------------------                     ----------------------------                  
Total revenue                        319,765           281,637            13.5 %       48,960            34,501              41.9%
Provision for loan losses               --                --                --          1,560             1,240              25.8%
Noninterest expense                  184,758           156,535            18.0 %       31,400            22,813              37.6%
                                  ----------------------------                     ----------------------------                  
Pretax cash earnings                 135,007           125,102             7.9 %       16,000            10,448              53.1%
Income tax expense (benefit)          45,549            41,499             9.8 %        4,954             3,123              58.6%
                                  ----------------------------                     ----------------------------                  
Operating cash earnings               89,458            83,603             7.0 %       11,046             7,325              50.8%
Merger expense                          --                --                --           --                --                --
Amortization of goodwill and
core                                   1,132               502           125.5 %          450               103             336.9%
    deposits
Income tax (benefit)                    (254)              (39)          551.3 %          (91)              (29)            213.8%
                                  ----------------------------                     ----------------------------                  
     Net income (loss)            $   88,580        $   83,140             6.5 %   $   10,687        $    7,251              47.4%
                                  ============================                     ============================                  

AVERAGE BALANCE SHEET DATA
Total assets                      $6,341,489        $4,944,651            28.2 %   $  715,596        $  526,138              36.0%
Money market investments           1,460,605           892,847            63.6 %       26,393            23,680              11.5%
Securities                         1,848,069         1,441,321            28.2 %      257,437           210,580              22.3%
Net loans and leases               2,604,027         2,276,461            14.4 %      351,874           230,403              52.7%
Loans sold being serviced(2)         957,813           855,574            21.0 %         --                --                --
Allowance for loan losses             49,374            53,537              (7.8)%      4,698             3,117              50.7%
Goodwill and core deposit             12,166             3,857           215.4 %        7,283                51          14,180.4%
  intangibles
Total deposits                     3,280,531         3,010,965             9.0 %      629,294           466,129              35.0%
Common equity                        418,274           355,402            17.7 %       46,330            44,179               4.9%

PERFORMANCE RATIOS
Return on average assets                1.40%             1.68%                          1.49%             1.38%
Return on average common equity        21.18%            23.39%                         23.07%            16.41%
Efficiency ratio                       57.20%            54.67%                         64.01%            64.96%
                                                                                                       
OPERATING CASH                                                                                         
PERFORMANCE RATIOS(1)                                                                                    
Return on average assets                1.41%             1.69%                          1.56%             1.39%
Return on average common equity        22.03%            23.78%                         28.29%            16.60%
Efficiency ratio                       56.85%            54.50%                         63.10%            64.67%
                                                                                                       
REGULATORY CAPITAL RATIOS                                                                              
Tier I leverage ratio                   5.66%             6.61%                          6.39%             7.86%
Tier I risk-based capital ratio        10.94%            11.36%                          9.15%            12.58%
Total risk-based capital ratio         18.22%            19.47%                         10.19%            13.62%
                                                                                                       
OTHER INFORMATION                                                                                      
Full-time equivalent employees         2,538             2,091                            570               359
                                                                                                       
Domestic offices                                                                                       
   Traditional branches                   89                73                             21                 7
   Banking centers in grocery             40                26                             19                18
      stores                                                                                                 
Foreign office                             1                 1                           --                --
                                  ----------------------------                     ----------------------------                  
   Total offices                         130               100                             40                25
                                                                                                       
ATMs                                     224               203                             69                70
</TABLE>
- ------------
(1)   Before amortization of goodwill and core deposit intangible assets and
      merger expense.

(2)   Amount represents outstanding balance of loans and receivables sold and
      being serviced by the Company, excluding long-term first mortgage
      residential real estate loans.


                                       19
<PAGE>   22

Operating Segments Information (continued)

<TABLE>
<CAPTION>
                                                   NATIONAL BANK
                                                    OF ARIZONA                                         COLORADO BANKS
                                  ----------------------------------------------   ----------------------------------------------
(Amounts in thousands)               1997              1996            % Change       1997              1996            % Change
                                  ----------        ----------        ----------   ----------        ----------        ----------
<S>                               <C>               <C>               <C>          <C>               <C>               <C>  
CONDENSED INCOME STATEMENT                                                                                            
Net interest income               $   61,577        $   50,485            22.0 %   $   12,980              --                 --
Noninterest income                     6,272             3,575            75.4 %        1,668              --                 --
                                  ----------------------------                     ----------------------------                  
Total revenue                         67,849            54,060            25.5 %       14,648              --                 --
Provision for loan losses              2,400             2,300             4.3 %          (70)             --                 --
Noninterest expense                   34,168            26,284            30.0 %        8,928              --                 --
                                  ----------------------------                     ----------------------------                  
Pretax cash earnings                  31,281            25,476            22.8 %        5,790              --                 --
Income tax expense (benefit)          12,069             9,715            24.2 %        2,046              --                 --
                                  ----------------------------                     ----------------------------                  
Operating cash earnings               19,212            15,761            21.9 %        3,744              --                 --
Merger expense                          --                --                --           --                --                 --
Amortization of goodwill and                                                                                          
     core deposits                     1,568             1,096            43.1 %        1,556              --                 --
Income tax (benefit)                    (173)             --                --           --                --                 --
                                  ----------------------------                     ----------------------------                  
     Net income (loss)            $   17,817        $   14,665            21.5 %   $    2,188              --                 --
                                  ============================                     ============================                  
                                                                                                                      
AVERAGE BALANCE SHEET DATA                                                                                            
Total assets                      $1,122,243        $  907,706            23.6 %   $  310,162              --                 --
Money market investments              16,032            21,081             (24.0)%      9,918              --                 --
Securities                           229,211           170,743            34.2 %       52,497              --                 --
Net loans and leases                 747,209           616,178            21.3 %      194,533              --                 --
Loans sold being serviced(2)            --                --                --           --                --                 --
Allowance for loan losses             13,688            10,677            28.2 %        2,052              --                 --
Goodwill and core deposit             24,754            14,496            70.8 %       38,852              --                 --
   intangibles                                                                                                           
Total deposits                       989,468           800,231            23.6 %      243,167              --                 --
Common equity                         99,094            93,099             6.4 %       60,177              --                 --
                                                                                                                      
PERFORMANCE RATIOS                                                                                                    
Return on average assets               1.59%             1.62%                          0.71%              --
Return on average common equity       17.98%            15.75%                          3.64%              --
Efficiency ratio                      52.15%            49.97%                         71.19%              --
                                                     
OPERATING CASH                                       
PERFORMANCE RATIOS(1)                                  
Return on average assets               1.75%             1.76%                          1.38%              --
Return on average common equity       25.84%            20.05%                         17.56%              --
Efficiency ratio                      49.86%            47.97%                         60.62%              --
                                                     
REGULATORY CAPITAL RATIOS                            
Tier I leverage ratio                  6.07%             8.85%                          8.32%              --
Tier I risk-based capital ratio        9.04%            12.39%                         12.35%              --
Total risk-based capital ratio        10.30%            13.65%                         13.50%              --
                                                     
OTHER INFORMATION                                    
Full-time equivalent employees           519               414                            190              --
                                                     
Domestic offices                                     
   Traditional branches                   30                17                             13              --
   Banking centers in grocery             --                --                              1              --
      stores                                               
Foreign office                            --                --                             --              --
                                  ----------------------------                     ----------------------------                 
   Total offices                          30                17                             14              --

ATMs                                      21                14                             12              --
</TABLE>
- ---------------
(1)   Before amortization of goodwill and core deposit intangible assets and
      merger expense.

(2)   Amount represents outstanding balance of loans and receivables sold and
      being serviced by the Company, excluding long-term first mortgage
      residential real estate loans.


                                       20
<PAGE>   23
Operating Segments Information (continued)


<TABLE>
<CAPTION>
                                                    GROSSMONT      
                                                       BANK                                            OTHER                       
                                  ----------------------------------------------   ----------------------------------------------
(Amounts in thousands)               1997              1996            % Change       1997              1996            % Change
                                  ----------        ----------        ----------   ----------        ----------        ----------
<S>                               <C>               <C>               <C>          <C>               <C>               <C>  
CONDENSED INCOME STATEMENT
Net interest income               $   40,447        $   29,428              37.4%  $   (6,290)       $   (4,341)           (44.9)%
Noninterest income                     5,522             3,359            64.4 %        4,065             4,792            (15.2)%
                                  ----------------------------                     ----------------------------                 
Total revenue                         45,969            32,787            40.2 %       (2,225)              451           (593.3)%
Provision for loan losses              2,460             1,100           123.6 %         (175)             --               --
Noninterest expense                   24,306            20,368            19.3 %        9,091             6,421           41.6 %
                                  ----------------------------                     ----------------------------                 
Pretax cash earnings                  19,203            11,319            69.7 %      (11,141)           (5,970)           (86.6)%
Income tax expense (benefit)           7,316             4,307            69.9 %       (5,784)           (2,475)          (133.7)%
                                  ----------------------------                     ----------------------------                 
Operating cash earnings               11,887             7,012            69.5 %       (5,357)           (3,495)           (53.3)%
Merger expense                          --                --                --          2,707              --               --
Amortization of goodwill and 
    core deposits                        440               458              (3.9)%        714               692            3.2 %
Income tax (benefit)                    --                --                --           (421)             --               --
                                  ----------------------------                     ----------------------------                 
     Net income                   $   11,447        $    6,554            74.7 %   $   (8,357)       $   (4,187)           (99.6)%
                                  ============================                     ============================                 

AVERAGE BALANCE SHEET DATA
Total assets                      $  721,039        $  534,441            34.9 %   $    3,626        $    1,277            183.9 %
Money market investments              16,139            14,200            13.7 %      (38,315)          (28,138)           (36.2)%
Securities                           181,282           150,185            20.7 %        6,799             5,046           34.7 %
Net loans and leases                 440,697           305,448            44.3 %        3,334             3,857            (13.6)%
Loans sold being serviced(2)            --                --                --           --                --               --
Allowance for loan losses              8,062             6,311            27.7 %        1,132             1,306            (13.3)%
Goodwill and core deposit              7,325             7,861              (6.8)%     12,104            12,598             (3.9)%
   intangibles
Total deposits                       652,437           473,619            37.8 %      (11,527)          (19,055)           (39.5)%
Common equity                         59,791            49,370            21.1 %      (68,131)          (29,311)          (132.4)%

PERFORMANCE RATIOS
Return on average assets               1.59%             1.23%                           --                --
Return on average common equity       19.15%            13.28%                           --                --
Efficiency ratio                      53.72%            62.12%                           --                --
                                                                                                             
OPERATING CASH                                                                                               
PERFORMANCE RATIOS(1)                                                                                          
Return on average assets               1.67%             1.33%                           --                --
Return on average common equity       22.66%            16.89%                           --                --
Efficiency ratio                      52.76%            60.73%                           --                --
                                                                                                             
REGULATORY CAPITAL RATIOS                                                                                    
Tier I leverage ratio                  7.23%             7.60%                           --                --
Tier I risk-based capital ratio       10.11%            10.53%                           --                --
Total risk-based capital ratio        11.36%            11.78%                           --                --
                                                                                                                  
OTHER INFORMATION
Full-time equivalent employees           319               266                            211               213

Domestic offices
   Traditional branches                   15                12                            --                --
   Banking centers in grocery             --                --                            --                --
      stores
Foreign office                            --                --                            --                --
                                  ----------------------------                     ----------------------------                  
   Total offices                          15                12                            --                --

ATMs                                      14                12                            145               40
</TABLE>
- ---------------
(1)   Before amortization of goodwill and core deposit intangible assets and
      merger expense.

(2)   Amount represents outstanding balance of loans and receivables sold and
      being serviced by the Company, excluding long-term first mortgage
      residential real estate loans.


                                       21
<PAGE>   24
Operating Segments Information (continued)

<TABLE>
<CAPTION>
                                                              CONSOLIDATED
                                                                COMPANY
                                         -----------------------------------------------------
(Amounts in thousands)                       1997                 1996              % Change
                                         -----------          -----------          -----------
<S>                                      <C>                  <C>                  <C>     
CONDENSED INCOME STATEMENT
Net interest income                      $   351,799          $   289,166                 21.7%
Noninterest income                           143,167              114,270                 25.3%
                                         --------------------------------
Total revenue                                494,966              403,436                 22.7%
Provision for loan losses                      6,175                4,640                 33.1%
Noninterest expense                          292,651              232,421                 25.9%
                                         --------------------------------
Pretax cash earnings                         196,140              166,375                 17.9%
Income tax expense (benefit)                  66,150               56,169                 17.8%
                                         --------------------------------
Operating cash earnings                      129,990              110,206                 18.0%
Merger expense                                 2,707                 --                   --
Amortization of goodwill and core
    deposits                                   5,860                2,851                105.5%
Income tax (benefit)                            (939)                 (68)              1280.9%
                                         --------------------------------
     Net income                          $   122,362          $   107,423                 13.9%
                                         ================================

AVERAGE BALANCE SHEET DATA
Total assets                             $ 9,214,155          $ 6,914,213                 33.3%
Money market investments                   1,490,772              923,670                 61.4%
Securities                                 2,575,295            1,977,875                 30.2%
Net loans and leases                       4,341,674            3,432,347                 26.5%
Loans sold being serviced(2)                 957,813              855,574                 21.0%
Allowance for loan losses                     79,006               74,948                  5.4%
Goodwill and core deposit                    102,484               38,863                163.7%
   intangibles
Total deposits                             5,783,370            4,731,889                 22.2%
Common equity                                615,535              512,739                 20.0%
   

PERFORMANCE RATIOS
Return on average assets                        1.33%                1.55%
Return on average common equity                19.88%               20.95%
Efficiency ratio                               60.02%               57.29%

OPERATING CASH
PERFORMANCE RATIOS(1)
Return on average assets                        1.43%                1.60%
Return on average common equity                25.34%               23.26%
Efficiency ratio                               58.32%               56.60%

REGULATORY CAPITAL RATIOS
Tier I leverage ratio                           6.75%                8.70%
Tier I risk-based capital ratio                11.74%               14.16%
Total risk-based capital ratio                 13.75%               17.52%
    

OTHER INFORMATION
Full-time equivalent employees                 4,347                3,343

Domestic offices
   Traditional branches                          168                  109
   Banking centers in grocery                     60                   44
      stores
Foreign office                                     1                    1
                                         --------------------------------
   Total offices                                 229                  154

ATMs                                             485                  339
</TABLE>
- ---------------
(1)   Before amortization of goodwill and core deposit intangible assets and
      merger expense.

(2)   Amount represents outstanding balance of loans and receivables sold and
      being serviced by the Company, excluding long-term first mortgage
      residential real estate loans.


                                       22
<PAGE>   25
Other Subsidiaries

Zions Insurance Agency, Inc. and Zions Life Insurance Company produced net
income of $1.0 million in 1997 as compared to $1.4 million in 1996. Zions Data
Service Company engaged in a number of significant projects in 1997, including
the installation of a new general ledger system based upon client server
technology. The data company also installed a new cash management system and new
consumer lending and ATM systems in 1997. Cash Access, Inc., a new subsidiary of
Zions Bancorporation created in 1996 to provide an ATM network for cash
dispensing ATMs to be installed in convenience stores, service stations, hotels
and other businesses, installed an additional 105 ATMs in 1997 for a total of
145 ATMs.

Subsequent Acquisitions

On January 6, 1998, the Company acquired Vectra Banking Corporation and its
banking subsidiary, Vectra Bank, located in Denver, Colorado for 4,021,303
shares of common stock. This transaction will be accounted for as a pooling of
interests. Vectra Banking Corporation total assets were approximately $728
million on the acquisition date.

On January 23, 1998, the Company acquired Sky Valley Bank Corp. in Alamosa,
Colorado, and its banking subsidiary, The First National Bank in Alamosa, for
572,817 shares of common stock. The acquisition will be accounted for as a
pooling of interests. Sky Valley Bank Corp. total assets were approximately $122
million on the acquisition date.

On February 27, 1998 the Company acquired Tri-State Finance Corporation and its
banking subsidiary, Tri-State Bank, in Denver, for 709,963 shares of common
stock. On December 31, 1997, Tri-State Finance Corporation had total assets of
approximately $128 million. The transaction will be accounted for as a pooling
of interests.

On December 22, 1997 the Company announced a definitive agreement had been
reached to acquire SBT Bankshares, Inc. in Colorado Springs, Colorado, and its
banking subsidiary, State Bank and Trust of Colorado Springs, in exchange for
Zions Bancorporation common stock. On December 31, 1997 SBT Bankshares, Inc. had
total assets of approximately $86 million. The transaction is intended to be
accounted for as a pooling of interests and is expected to close in the second
quarter of 1998.

On December 29, 1997 the Company announced a definitive agreement had been
reached to acquire FP Bancorp, Inc. in Escondido, California, and its banking
subsidiary, First Pacific National Bank, in exchange for Zions Bancorporation
common stock. Total assets of FP Bancorp, Inc. were approximately $353 million
on December 31, 1997. The transaction is intended to be accounted for as a
pooling of interests and is expected to close in the second quarter of 1998.


On January 22, 1998 the Company announced a definitive agreement to acquire
Routt County National Bank Corporation in Steamboat Springs, Colorado, and its
banking subsidiary, First National Bank of Colorado, in exchange for Zions
Bancorporation common stock. On December 31, 1997 Routt County National Bank
Corporation had total assets of approximately $93 million. The transaction is
intended to be accounted for as a pooling of interests and is expected to close
in the second quarter of 1998.


                                       23
<PAGE>   26
INCOME STATEMENT ANALYSIS

Net Interest Income, Margin and Interest Rate Spreads

Net interest income on a tax-equivalent basis is the difference between interest
earned on assets and interest paid on liabilities, with adjustments made to
present yields on assets exempt from income taxes comparable to other taxable
income. Changes in the mix and volume of earning assets and interest-bearing
liabilities, their related yields and overall interest rates have a major impact
on earnings. In 1997, taxable-equivalent net interest income provided 71.5% of
the Company's net revenues, compared with 72.2% in 1996 and 72.9% in 1995.

The Company's taxable-equivalent net interest income increased by 21.0% to
$358.7 million in 1997 as compared to $296.4 million in 1996 and $238.9 million
in 1995. The increased level of taxable-equivalent net interest income was
driven by growth in average earning assets for both 1997 and 1996. The Company
manages its earnings sensitivity to interest rate movements, in part, by
matching the repricing characteristics of its assets and liabilities and, to a
lesser extent, through the use of off-balance sheet arrangements such as caps,
floors and interest rate exchange contracts. Net interest income from the use of
such off-balance sheet arrangements for 1997 was $2.5 million compared to $2.0
million in 1996 and $.7 million in 1995.

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

The net interest margin, the ratio of taxable-equivalent net interest income to
average earning assets, was 4.27% in 1997, 4.68% in 1996 and 4.53% in 1995. The
decrease in the margin in 1997 was due primarily to interest expense on the $200
million in trust preferred securities issued in December 1996, and increased
arbitrage activity in money market investments and short-term borrowings to
mitigate the reduction in net interest income from the preferred securities.

Consolidated average balances, the amount of interest earned or paid, the
applicable interest rate for the various categories of earning assets and
interest-bearing funds which represent the components of net interest income for
the year 1997 and the previous four years, and interest differentials on a
taxable-equivalent basis and the effect on net interest income of changes due to
volume and rates for the years 1997 and 1996 are shown in tables on pages which
follow.

In the tables, the principal amounts of nonaccrual and renegotiated loans have
been included in the average loan balances used to determine the rate earned on
loans. Interest income on nonaccrual loans is included in income only to the
extent that cash payments have been received and not applied to principal
reductions. Interest on restructured loans is generally accrued at reduced
rates.

The tax rate used for calculating the taxable-equivalent adjustment was 30% in
years 1994 through 1997 and 32% in 1993.


                                       24
<PAGE>   27

Distribution of Assets, Liabilities, and Shareholders' Equity,
Average Balance Sheets, Yields and Rates


<TABLE>
<CAPTION>
                                                              1997                                      1996
                                             --------------------------------------------------------------------------------
                                                             Amount                                     Amount
(Amounts in thousands)                         Average         of         Average        Average          of        Average
                                               balance     interest(1)    rate(1)        balance      interest(1)    rate(1)
                                             -----------   -----------  -----------    -----------    -----------  ----------
<S>                                          <C>           <C>          <C>            <C>            <C>          <C>  
ASSETS:
Money Market Investments
   Interest-bearing deposits                 $    56,015   $     3,032         5.41%   $    41,175    $     1,954       4.75%
   Federal funds sold and security
         resell agreements                     1,434,757        81,575         5.69%       882,495         49,758       5.64%
   Other money market investments                   --            --            --            --             --           --
                                             -----------   -----------                 -----------    -----------            
         Total money market investments        1,490,772        84,607         5.68%       923,670         51,712       5.60%
                                             -----------   -----------                 -----------    -----------            
Securities:
   Held to maturity:
         Taxable                               1,643,187       112,930         6.87%     1,155,133         76,631       6.63%
         Nontaxable                              199,381        16,160         8.11%       215,540         20,791       9.65%
   Available for sale:
         Taxable                                 419,523        28,798         6.86%       410,043         26,573       6.48%
         Nontaxable                               37,570         2,986         7.95%        40,794          3,229       7.92%
   Trading account                               275,634        16,211         5.88%       156,365          9,172       5.87%
                                             -----------   -----------                 -----------    -----------            
         Total securities                      2,575,295       177,085         6.88%     1,977,875        136,396       6.90%
                                             -----------   -----------                 -----------    -----------            
Loans:
   Loans held for sale                           163,303        11,874         7.27%       150,990         11,509       7.62%
   Net loans and leases(2)                      4,178,371       415,607         9.95%     3,281,357        326,580       9.95%
                                             -----------   -----------                 -----------    -----------            
         Total loans                           4,341,674       427,481         9.85%     3,432,347        338,089       9.85%
                                             -----------   -----------                 -----------    -----------            
Total interest-earning assets                $ 8,407,741   $   689,173         8.20%   $ 6,333,892    $   526,197       8.31%
                                                           -----------                                -----------            
Cash and due from banks                          450,223                                   361,020
Allowance for loan losses                        (79,006)                                  (74,948)
Goodwill and core deposit intangibles            102,484                                    38,863
Other assets                                     332,713                                   255,386
                                             -----------                               -----------
Total assets                                 $ 9,214,155                               $ 6,914,213
                                             ===========                               ===========


LIABILITIES:
Interest-bearing deposits:
   Savings and NOW deposits                  $   729,503   $    21,492         2.95%   $   646,375    $    19,924       3.08%
   Money market and super NOW deposits         2,353,577        89,390         3.80%     1,945,683         71,941       3.70%
   Time deposits under $100,000                  871,650        45,070         5.17%       725,039         37,838       5.22%
   Time deposits $100,000 or more                314,250        18,065         5.75%       215,541         12,212       5.67%
   Foreign deposits                              141,511         6,354         4.49%       120,782          5,391       4.46%
                                             -----------   -----------                 -----------    -----------            
         Total interest-bearing deposits       4,410,491       180,371         4.09%     3,653,420        147,306       4.03%
                                             -----------   -----------                 -----------    -----------            
Borrowed funds:
   Securities sold, not yet purchased             91,963         5,350         5.82%        76,518          4,475       5.85%
   Federal funds purchased and security
         repurchase agreements                 2,136,547       111,293         5.21%     1,316,786         66,068       5.02%
   FHLB advances and other borrowings:
         Less than one year                       34,163         2,295         6.72%        18,707          1,180       6.31%
         Over one year                           136,381         8,206         6.02%        87,700          5,557       6.34%
   Long-term debt                                257,779        22,982         8.92%        55,187          5,239       9.49%
                                             -----------   -----------                 -----------    -----------            
         Total borrowed funds                  2,656,833       150,126         5.65%     1,554,898         82,519       5.31%
                                             -----------   -----------                 -----------    -----------            
Total interest-bearing liabilities           $ 7,067,324   $   330,497         4.68%   $ 5,208,318    $   229,825       4.41%
                                                           -----------                                -----------            
Noninterest-bearing deposits                   1,372,879                                 1,078,469
Other liabilities                                158,417                                   114,687
                                             -----------                               -----------
Total liabilities                              8,598,620                                 6,401,474
Total shareholders' equity                       615,535                                   512,739
                                             -----------                               -----------
Total liabilities and shareholders' equity   $ 9,214,155                               $ 6,914,213
                                             ===========                               ===========
Spread on average interest-bearing funds                                       3.52%                                    3.90%
                                                                               ====                                     ==== 

Net interest income and net  yield on
   Interest-earning assets                                 $   358,676         4.27%                  $   296,372       4.68%
                                                           ===========         ====                   ===========       ==== 
</TABLE>
- ---------------
(1)   Taxable-equivalent rates used where applicable.

(2)   Net of unearned income and fees, net of related costs. Loans include
      nonaccrual and restructured loans.


                                       25
<PAGE>   28
Distribution of Assets, Liabilities, and Shareholders' Equity,
Average Balance Sheets, Yields And Rates

<TABLE>
<CAPTION>
   
                                                                 1995                                       1994
    
                                           ----------------------------------------------------------------------------------------
                                                                Amount                                      Amount
(Amounts in thousands)                       Average              of           Average        Average         of          Average
                                             balance          interest(1)      rate(1)        balance     interest(1)      rate(1)
                                           -----------        -----------    -----------    -----------   -----------    ----------
<S>                                        <C>                <C>            <C>            <C>           <C>            <C>  
ASSETS:
Money Market Investments
   Interest-bearing deposits               $    26,539        $     1,288          4.85%    $    24,389   $       814         3.34%
   Federal funds sold and security
         resell agreements                     919,303             54,852          5.97%        845,320        34,231         4.05%
   Other money market investments                 --                 --              --%           --            --              -%
                                           -----------        -----------                   -----------   -----------              
         Total money market investments        945,842             56,140          5.94%        869,709        35,045         4.03%
                                           -----------        -----------                   -----------   -----------              
Securities:
   Held to maturity:
         Taxable                               939,834             66,165          7.04%        726,925        41,269         5.68%
         Nontaxable                            211,218             17,748          8.40%        193,810        15,689         8.10%
   Available for sale:
         Taxable                               367,143             24,726          6.73%        334,044        19,916         5.96%
         Nontaxable                                460                 30          6.52%           --            --              -%
   Trading account                             146,845              9,248          6.30%        290,925        16,516         5.68%
                                           -----------        -----------                   -----------   -----------              
         Total securities                    1,665,500            117,917          7.08%      1,545,704        93,390         6.04%
                                           -----------        -----------                   -----------   -----------              
Loans:
   Loans held for sale                         115,939              9,259          7.99%        187,506        12,303         6.56%
   Net loans and leases(2)                   2,546,814            261,512         10.27%      2,387,489       217,958         9.13%
                                           -----------        -----------                   -----------   -----------              
         Total loans                         2,662,753            270,771         10.17%      2,574,995       230,261         8.94%
                                           -----------        -----------                   -----------   -----------              
Total interest-earning assets              $ 5,274,095        $   444,828          8.43%    $ 4,990,408   $   358,696         7.19%
                                                              -----------                                 -----------              
Cash and due from banks                        330,477                                          333,290
Allowance for loan losses                      (69,247)                                         (68,248)
Goodwill and core deposit intangibles           24,012                                           20,303
Other assets                                   219,688                                          180,860
                                           -----------                                      -----------
Total assets                               $ 5,779,025                                      $ 5,456,613
                                           ===========                                      ===========
LIABILITIES:
Interest-bearing deposits:
   Savings and NOW deposits                $   729,098        $    22,705          3.11%    $   740,339   $    22,262         3.01%
   Money market and super NOW deposits       1,467,068             60,375          4.12%      1,284,697        39,938         3.11%
   Time deposits under $100,000                627,182             32,653          5.21%        516,877        20,469         3.96%
   Time deposits $100,000 or more              133,154              7,930          5.96%         94,680         3,845         4.06%
   Foreign deposits                            139,212              7,179          5.16%        108,383         4,444         4.10%
                                           -----------        -----------                   -----------   -----------              
         Total interest-bearing deposits     3,095,714            130,842          4.23%      2,744,976        90,958         3.31%
                                           -----------        -----------                   -----------   -----------              
Borrowed funds:
   Securities sold, not yet purchased           90,206              5,619          6.23%        184,405        10,976         5.95%
   Federal funds purchased and security
         repurchase agreements               1,037,197             56,645          5.46%      1,057,827        41,089         3.88%
   FHLB advances and other borrowings:
         Less than one year                     20,654              1,414          6.85%         32,557         1,770         5.44%
         Over one year                          96,305              6,307          6.55%        118,607         5,831         4.92%
   Long-term debt                               57,506              5,121          8.91%         59,493         4,759         8.00%
                                           -----------        -----------                   -----------   -----------              
         Total borrowed funds                1,301,868             75,106          5.77%      1,452,889        64,425         4.43%
                                           -----------        -----------                   -----------   -----------              
Total interest-bearing liabilities         $ 4,397,582        $   205,948          4.68%    $ 4,197,865   $   155,383         3.70%
                                                              -----------                                 -----------              
Noninterest-bearing deposits                   867,988                                          838,118
Other liabilities                              105,957                                           81,449
                                           -----------                                      -----------
Total liabilities                            5,371,527                                        5,117,432
Total shareholders' equity                     407,498                                          339,181
                                           -----------                                      -----------
Total liabilities and shareholders' equity $ 5,779,025                                      $ 5,456,613
                                           ===========                                      ===========
Spread on average interest-bearing funds                                           3.75%                                      3.49%
                                                                                   ====                                       ==== 
Net interest income and net yield on
   Interest-earning assets                                    $   238,880          4.53%                  $   203,313         4.07%
                                                              ===========          ====                   ===========         ==== 
</TABLE>
- ---------------
(1)   Taxable-equivalent rates used where applicable.

(2)   Net of unearned income and fees, net of related costs. Loans include
      nonaccrual and restructured loans.


                                       26
<PAGE>   29

Distribution of Assets, Liabilities, and Shareholders' Equity,
Average Balance Sheets, Yields And Rates


<TABLE>
<CAPTION>
                                                                                  1993
                                                      --------------------------------------------------------------
                                                                                Amount
       (Amounts in thousands)                           Average                   of                        Average
                                                        balance               interest(1)                   rate(1)
                                                      -----------             -----------                   --------
<S>                                                   <C>                     <C>                           <C>  
ASSETS:
Money Market Investments
   Interest-bearing deposits                          $   103,982              $     3,682                    3.55%
   Federal funds sold and security
         resell agreements                                656,204                   22,918                    3.49%
   Other money market investments                          28,508                      827                    2.90%
                                                      -----------             -----------
         Total money market investments                   788,694                   27,427                    3.48%
                                                      -----------             -----------
Securities:
   Held to maturity:
         Taxable                                          958,776                   56,347                    5.88%
         Nontaxable                                       147,549                   12,434                    8.43%
   Available for sale:
         Taxable                                             --                       --                         -%
         Nontaxable                                          --                       --                         -%
   Trading account                                        102,840                   7,555                     7.35%
                                                      -----------             -----------
                                                                                                           
         Total securities                               1,209,165                  76,336                     6.31%
                                                      -----------             -----------
Loans:
   Loans held for sale                                    185,899                  11,273                     6.06%
   Net loans and leases(2)                              2,036,283                 182,559                     8.97%
                                                      -----------             -----------
         Total loans                                    2,222,182                 193,832                     8.72%
                                                      -----------             -----------
Total interest-earning assets                         $ 4,220,041              $  297,595                     7.05%
                                                                              -----------
Cash and due from banks                                   315,577
Allowance for loan losses                                 (64,911)
Goodwill and core deposit intangibles                      14,793
Other assets                                              158,418
                                                      -----------
Total assets                                          $ 4,643,918
                                                      ===========

LIABILITIES:
Interest-bearing deposits:
   Savings and NOW deposits                           $   648,178              $    19,222                    2.97%
   Money market and super NOW deposits                  1,117,016                   31,109                    2.79%
   Time deposits under $100,000                           548,816                   23,501                    4.28%
   Time deposits $100,000 or more                          79,442                    3,010                    3.79%
   Foreign deposits                                        55,823                    1,484                    2.66%
                                                      -----------             -----------
         Total interest-bearing deposits                2,449,275                   78,326                    3.20%
                                                      -----------             -----------
Borrowed funds:
   Securities sold, not yet purchased                      69,442                    3,039                    4.38%
   Federal funds purchased and security
         repurchase agreements                            767,309                   22,376                    2.92%
   FHLB advances and other borrowings:
         Less than one year                                83,123                    3,196                    3.84%
         Over one year                                    111,974                    4,599                    4.11%
   Long-term debt                                          75,623                    7,423                    9.82%
                                                      -----------             -----------
         Total borrowed funds                           1,107,471                   40,633                    3.67%
                                                      -----------             -----------
Total interest-bearing liabilities                    $ 3,556,746              $   118,959                    3.34%
                                                                              ===========
Noninterest-bearing deposits                              729,651
Other liabilities                                          71,190
                                                      -----------
Total liabilities                                       4,357,587
Total shareholders' equity                                286,331
                                                      -----------
Total liabilities and shareholders' equity            $ 4,643,918
                                                      ===========
Spread on average interest-bearing funds                                                                      3.71%
                                                                                                              ==== 
Net interest income and net yield on
   Interest-earning assets                                                     $   178,636                    4.23%
                                                                               ===========                    ==== 
</TABLE>
- --------------
(1)   Taxable-equivalent rates used where applicable.

(2)   Net of unearned income and fees, net of related costs. Loans include
      nonaccrual and restructured loans.


                                       27
<PAGE>   30

Analysis of Interest Changes Due to Volume and Rate


<TABLE>
<CAPTION>
                                                         1997 over 1996                          1996 over 1995
                                                  Changes due to                           Changes due to 
                                             -----------------------       Total       -----------------------       Total
(Amounts in Thousands)                         Volume       Rate(1)       Changes        Volume       Rate(1)       Changes
                                             ---------     ---------     ---------     ---------     ---------     ---------
<S>                                          <C>           <C>           <C>           <C>           <C>           <C>      
Interest-earning assets:
Money market investments:
      Interest-bearing deposits              $     777     $     301     $   1,078     $     693     $     (27)    $     666
      Federal funds sold and security
         resell agreements                      31,358           459        31,817        (2,091)       (3,003)       (5,094)
      Other money market investments              --            --            --            --            --            --
                                             ---------     ---------     ---------     ---------     ---------     ---------
         Total money market investments         32,135           760        32,895        (1,398)       (3,030)       (4,428)
                                             ---------     ---------     ---------     ---------     ---------     ---------
Securities:
      Held to maturity:
         Taxable                                33,474         2,825        36,299        14,320        (3,854)       10,466
         Nontaxable                             (1,320)       (3,311)       (4,631)          363         2,680         3,043
      Available for sale:
         Taxable                                   628         1,597         2,225         2,782          (935)        1,847
         Nontaxable                               (253)           10          (243)        3,191             8         3,199
      Trading account                            7,017            22         7,039           552          (628)          (76)
                                             ---------     ---------     ---------     ---------     ---------     ---------
         Total securities                       39,546         1,143        40,689        21,208        (2,729)       18,479
                                             ---------     ---------     ---------     ---------     ---------     ---------
Loans:
      Loans held for sale                          897          (532)          365         2,674          (424)        2,250
      Net loans and leases (2)                  89,112           (85)       89,027        73,172        (8,104)       65,068
                                             ---------     ---------     ---------     ---------     ---------     ---------
         Total loans                            90,009          (617)       89,392        75,846        (8,528)       67,318
                                             ---------     ---------     ---------     ---------     ---------     ---------
Total interest-earning assets                $ 161,690     $   1,286     $ 162,976     $  95,656     $ (14,287)    $  81,369
                                             ---------     ---------     ---------     ---------     ---------     ---------

Interest-bearing liabilities:
Deposits:
      Savings and NOW deposits               $   2,424     $    (856)    $   1,568     $  (2,532)    $    (249)    $  (2,781)

      Money market and super NOW deposits       15,418         2,031        17,449        17,659        (6,093)       11,566
      Time deposits under $100,000               7,585          (353)        7,232         5,099            86         5,185
      Time deposits $100,000 or more             5,669           184         5,853         4,662          (380)        4,282
      Foreign deposits                             931            32           963          (818)         (970)       (1,788)
                                             ---------     ---------     ---------     ---------     ---------     ---------
         Total interest-bearing deposits        32,027         1,038        33,065        24,070        (7,606)       16,464
                                             ---------     ---------     ---------     ---------     ---------     ---------
Borrowed funds:
      Securities sold, not yet purchased           897           (22)          875          (802)         (342)       (1,144)
      Federal funds purchased and
         security repurchase agreements         42,601         2,624        45,225        14,001        (4,578)        9,423
      FHLB advances and other borrowings:
         Less than one year                      1,033            82         1,115          (123)         (111)         (234)
         Over one year                           2,926          (277)        2,649          (549)         (201)         (750)
      Long-term debt                            18,059          (316)       17,743          (204)          322           118
                                             ---------     ---------     ---------     ---------     ---------     ---------
         Total borrowed funds                   65,516         2,091        67,607        12,323        (4,910)        7,413
                                             ---------     ---------     ---------     ---------     ---------     ---------
Total interest-bearing liabilities           $  97,543     $   3,129     $ 100,672     $  36,393     $ (12,516)    $  23,877
                                             ---------     ---------     ---------     ---------     ---------     ---------
Change in net interest income                $  64,147     $  (1,843)    $  62,304     $  59,263     $  (1,771)    $  57,492
                                             =========     =========     =========     =========     =========     =========
</TABLE>

(1)   Taxable-equivalent rates used where applicable.

(2)   Net of unearned income and fees, net of related costs. Loans include
      nonaccrual and restructured loans.

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


                                       28
<PAGE>   31
Provision for Loan Losses

The provision for loan losses reflects management's judgment of the expense to
be recognized in order to maintain an adequate allowance for loan losses. The
provision for loan losses was $6.2 million in 1997 compared to $4.6 million in
1996 and $3.0 million in 1995. No provision was recognized by the Company's Utah
bank in 1997, 1996 and 1995. Although the provision has increased in recent
years, it comprised only .14% of average loans for 1997 and 1996 and .11% for
1995.

Noninterest Income

Noninterest income is a growing portion of the Company's net revenue comprising
28.5% of revenue in 1997 compared to 27.8% in 1996 and 27.1% in 1995.
Noninterest income was $143.2 million in 1997, an increase of 25.3% over $114.3
million in 1996, which was up 28.7% over $88.8 million in 1995. Primary
contributors to the increase in noninterest income in 1997 and 1996 were service
charges on deposit accounts; other services charges, commissions and fees, loan
sales and servicing income and trading account income.

Deposit service charges increased 24.3% to $43.7 million in 1997 and 21.8% in
1996 reflecting continued expansion of the Company's deposit base as well as
price adjustments. Other service charges, commissions and fees were $38.3
million in 1997, an increase of 33.4% over 1996 which was 17.8% above 1995. Loan
sales and servicing income rose 10.4% in 1997 to $38.8 million over $35.1
million in 1996 which was 44.8% above 1995. Trading account income increased
110.1% to $5.7 million in 1997 from $2.7 million in 1996. A net loss of $1.2
million was incurred in 1995.

Trust income increased to $6.8 million in 1997, up 30.1% from 1996 which was up
19.3% from 1995. Other income, which includes certain fees, income from
unconsolidated subsidiaries and associated companies; net gains on sales of
fixed assets, mortgage servicing and other assets; and other items was $9.1
million in 1997 an increase of 26.4% from 1996.

The following table presents the components of noninterest income for the years
indicated and a year-to-year comparison expressed in terms of percent changes.

                               Noninterest Income

<TABLE>
<CAPTION>
                                                       Percent                   Percent               
(Amounts in thousands)                     1997         Change       1996         Change        1995   
                                         --------      --------    --------      --------     -------- 
<S>                                      <C>           <C>         <C>           <C>          <C>      
Service charges on deposit accounts      $ 43,732          24.3%   $ 35,195          21.8%    $ 28,884 
Other service charges,
     commissions and fees                  38,274          33.4      28,701          17.8       24,370 
Trust income                                6,757          30.1       5,195          19.3        4,355 
Investment securities
     gains (losses), net                      797         593.0         115         177.7         (148)
Trading account income (loss)               5,716         110.1       2,721         318.2       (1,247)
Loan sales and servicing income            38,768          10.4      35,128          44.8       24,254 
Other income                                9,123          26.4       7,215         (13.5)       8,343 
   
                                         --------                  --------                   -------- 
    
Total                                    $143,167          25.3%   $114,270          28.7%    $ 88,811 
                                         ========      ========    ========      ========     ======== 
</TABLE>


<TABLE>
<CAPTION>
                                          Percent                     Percent
(Amounts in thousands)                     Change        1994          Change          1993
                                          --------     --------       --------       --------
<S>                                       <C>          <C>            <C>            <C>     
Service charges on deposit accounts           20.1%    $ 24,058            5.2%      $ 22,875
Other service charges,
     commissions and fees                     10.7       22,008            2.9         21,392
Trust income                                    .5        4,334           (6.2)         4,622
Investment securities
     gains (losses), net                      50.5         (299)      (1,658.8)           (17)
Trading account income (loss)               (245.0)         860          (63.4)         2,350
Loan sales and servicing income               66.2       14,596          (32.0)        21,471
Other income                                   9.1        7,645            6.4          7,187
   
                                                       --------                      --------
    
Total                                         21.3%    $ 73,202           (8.4)%     $ 79,880
                                          ========     ========       ========       ========
</TABLE>


                                       29
<PAGE>   32
Noninterest Expense

The Company's noninterest expense was $301.2 million in 1997, an increase of
28.0% over $235.3 million in 1996, which was up 20.5% over the $195.2 million in
1995. Comparing significant noninterest expense categories in 1997 to 1996,
salaries and employee benefits increased 23.3% to $160.0 million, occupancy
expense increased 23.7% to $16.9 million, furniture and equipment expense
increased 38.3% to $23.7 million, and the total of all other expenses increased
34.6% to $100.6 million. The increase in other expenses included significant
increases in legal and professional services, supplies, postage, advertising,
merger expense, amortization of intangible assets and other expenses.

Comparing significant noninterest expense categories in 1996 to 1995, salaries
and employee benefits increased 22.9% to $129.7 million, occupancy expense
increased 24.6% to $13.7 million, furniture and equipment expense increased
27.0% to $17.1 million, FDIC premiums decreased 99.7% to $11 thousand and the
total of all other expenses increased 22.4% to $74.8 million.

In 1997 and 1996, salaries and employee benefits increased primarily as a result
of increased staffing, resulting from the acquisition and opening of new offices
and additional investment in personnel in selected areas, as well as general
salary increases and bonuses, commissions and profit-sharing costs which are
based on increased profitability. The occupancy, furniture and equipment expense
increase resulted primarily from the addition of office facilities, the
expansion of ATM networks, installation of personal computers and local area
networks and expenses related to technology initiatives. The increase in all
other expenses resulted primarily from increases in supplies, postage, merger
expense, amortization of goodwill and core deposit intangibles, and other
expenses related to acquisitions and expansion and increased expenditures in
selected areas to enhance revenue growth.

On December 31, 1997, the Company had 4,347 full-time equivalent employees, 229
offices and 485 ATMs for increases of 30.0%, 48.7% and 43.5%, respectively,
compared to year-end 1996. On December 31, 1996, the Company had 3,343 full-time
equivalent employees, 154 offices and 338 ATMs for increases of 8.2%, 8.5% and
27.5%, respectively, compared to year-end 1995.

The Company's operating cash "efficiency ratio," or noninterest expenses,
excluding amortization of goodwill and core deposit intangibles and merger
expenses, as a percentage of total taxable-equivalent net revenues, increased to
58.32% in 1997 compared to 56.60% in 1996 and 58.77% in 1995.


                                       30
<PAGE>   33
The following table presents the components of noninterest expense for the years
indicated and a year-to-year comparison expressed in terms of percent changes.


                               Noninterest Expense

<TABLE>
<CAPTION>
                                                      Percent                       Percent             
(Amounts in thousands)                  1997          Change         1996           Change        1995  
                                     ---------      ---------     ---------       ---------    ---------
<S>                                  <C>            <C>           <C>             <C>          <C>      
Salaries and employee benefits       $ 159,973           23.3%    $ 129,708            22.9%   $ 105,527
Occupancy, net                          16,911           23.7        13,668            24.6       10,972
Furniture and equipment                 23,695           38.3        17,133            27.0       13,486
Other real estate expense                  251          184.2          (298)         (467.9)          81
Legal and professional services          7,789           48.0         5,263            19.7        4,395
Supplies                                 8,108           23.2         6,582            24.1        5,305
Postage                                  6,823           20.6         5,658             9.0        5,190
Advertising                              7,380           27.5         5,789             9.7        5,276
F.D.I.C. premiums                          737        6,600.0            11           (99.7)       4,123

Merger expense                           2,707           --            --              --           --  
Amortization of goodwill
and core deposit intangibles             5,860          105.5         2,851             9.2        2,612

Amortization of mortgage
     servicing assets                    2,152           65.7         1,299            13.2        1,148
Loss on early extinguishment
     of debt                              --             --            --              --           --  
Other expenses                          58,832           23.6        47,608            28.4       37,071
   
                                     ---------                    ---------                    ---------
Total                                $ 301,218           28.0%    $ 235,272            20.5%   $ 195,186
                                     =========        =======     =========           =====    =========
    
</TABLE>
<TABLE>
<CAPTION>
                                       Percent                      Percent
(Amounts in thousands)                 Change        1994           Change       1993
                                     ---------    ---------       ---------    ---------
<S>                                  <C>          <C>             <C>          <C>      
Salaries and employee benefits            13.1%   $  93,331             9.1%   $  85,549
Occupancy, net                            13.7        9,647            18.1        8,168
Furniture and equipment                   19.6       11,276            21.3        9,294
Other real estate expense                192.0          (88)         (119.6)         450
Legal and professional services          (14.5)       5,142              .1        5,136
Supplies                                  10.1        4,819             6.2        4,537
Postage                                    9.9        4,723             9.0        4,334
Advertising                               53.1        3,447            (1.9)       3,515
F.D.I.C. premiums                        (45.4)       7,547             4.0        7,257

Merger expense                            --           --              --           --
Amortization of goodwill
and core deposit intangibles              30.4        2,003            10.7        1,810

Amortization of mortgage
     servicing assets                    (32.0)       1,689           (35.6)       2,622
Loss on early extinguishment
     of debt                              --           --            (100.0)       6,022
Other expenses                            18.2       31,364             7.9       29,056
   
                                                  ---------                    ---------
Total                                     11.6%   $ 174,900             4.3%   $ 167,750
                                         =====    =========          ======    =========  
    
</TABLE>

                         Full-Time Equivalent Employees

<TABLE>
<CAPTION>
                                                          1997       1996       1995       1994       1993
                                                         -----      -----      -----      -----      -----
<S>                                                      <C>        <C>        <C>        <C>        <C>  
Commercial banking
    Utah and Idaho                                       2,538      2,091      1,975      1,911      2,044
    Nevada                                                 570        359        351        286        286
    Arizona                                                519        414        324        309        243
    Colorado and New Mexico                                190       --         --         --         -- 
    California                                             319        266        234       --         --
                                                         -----      -----      -----      -----      -----
                                                         4,136      3,130      2,884      2,506      2,573
    Other                                                  211        213        205        189        188
                                                         -----      -----      -----      -----      -----
       Total                                             4,347      3,343      3,089      2,695      2,761
</TABLE>

                      Commercial Banking Offices and ATM's

<TABLE>
<CAPTION>
                                                          1997       1996       1995       1994       1993
                                                         -----      -----      -----      -----      -----
<S>                                                      <C>        <C>        <C>        <C>        <C> 
Domestic offices
    Traditional branches                                   168        109        102         84         84
    Banking centers in grocery stores                       60         44         39         33         29
Foreign office                                               1          1          1          1          1
                                                         -----      -----      -----      -----      -----
    Total                                                  229        154        142        118        114

ATMs                                                       485        339        266        215        175
</TABLE>

Income Taxes

The Company's income tax expense for the year 1997 was $65.2 million compared to
$56.1 million in 1996 and $41.8 million in 1995. The increases in income taxes
were primarily due to the increases in taxable income. The Company's effective
income tax rate was 34.8% in 1997, up slightly from 34.3% in 1996, which was up
from 33.7% in 1995.


                                       31
<PAGE>   34
Quarterly Summary

The following table presents a summary of earnings and end-of-period balances by
quarter for the years ended December 31, 1997, 1996 and 1995:


                   Quarterly Financial Information (Unaudited)

<TABLE>
<CAPTION>
                                                                                                     Income
                      Gross            Net            Non-          Provision         Non-           before             
(Amounts in         interest        interest        interest        for loan        interest         income            Net
thousands)           income          income          income          losses         expenses         taxes           income
                    --------        --------        --------        --------        --------        --------        --------
<S>                 <C>             <C>             <C>             <C>             <C>             <C>             <C>     
Quarter
1997:
    First           $149,159        $ 76,343        $ 33,015        $  1,605        $ 63,397        $ 44,356        $ 28,913
    Second           169,225          85,751          33,394           1,435          70,242          47,468          30,561
    Third            177,844          92,053          37,647           1,710          79,642          48,348          31,533
    Fourth           186,068          97,652          39,111           1,425          87,937          47,401          31.355
                    --------        --------        --------        --------        --------        --------        --------
       Total        $682,296        $351,799        $143,167        $  6,175        $301,218        $187,573        $122,362
                    ========        ========        ========        ========        ========        ========        ========

1996:
    First           $122,194        $ 66,140        $ 26,894        $    700        $ 54,445        $ 37,889        $ 24,940
    Second           125,520          70,271          27,287             960          56,573          40,025          26,376
    Third            132,480          73,283          29,829           1,330          59,723          42,059          27,333
    Fourth           138,797          79,472          30,260           1,650          64,531          43,551          28,774
                    --------        --------        --------        --------        --------        --------        --------
       Total        $518,991        $289,166        $114,270        $  4,640        $235,272        $163,524        $107,423
                    ========        ========        ========        ========        ========        ========        ========

1995:
    First           $ 97,779        $ 53,201        $ 17,341        $    600        $ 46,118        $ 23,824        $ 16,001
    Second           105,436          55,897          22,105             850          45,882          31,270          20,521
    Third            113,579          57,923          23,936             800          47,015          34,044          22,291
    Fourth           122,701          66,526          25,429             750          56,171          35,034          23,572
                    --------        --------        --------        --------        --------        --------        --------
       Total        $439,495        $233,547        $ 88,811        $  3,000        $195,186        $124,172        $ 82,385
                    ========        ========        ========        ========        ========        ========        ========
</TABLE>


<TABLE>
<CAPTION>
                                      Money
                     Gross            market                                           Allowance                           Share-
(Amounts in          Total           invest-                          Net loans         for loan          Total           holders'
thousands)           assets            ments         Securities       and leases         losses          deposits          equity
                   ----------       ----------       ----------       ----------       ----------       ----------       ----------
<S>                <C>              <C>              <C>              <C>              <C>              <C>              <C>       
End of Quarter
1997:
    First          $7,926,419       $1,046,465       $2,088,754       $4,117,389       $   76,802       $5,288,584       $  553,260
    Second          8,766,162          831,176        2,728,092        4,378,203           79,645        5,799,304          641,468
    Third           9,823,149        1,428,021        2,766,927        4,656,606           79,062        6,359,112          635,586
    Fourth          9,521,770          814,088        2,712,094        4,871,650           80,481        6,854,462          655,460

1996:
    First          $6,691,883       $1,054,431       $1,763,217       $3,239,994       $   73,718       $4,598,760       $  480,947
    Second          6,615,567          386,382        2,090,253        3,516,903           75,547        4,806,223          517,092
    Third           7,356,130          992,846        2,039,080        3,663,767           75,953        5,081,249          535,690
    Fourth          7,116,413          613,429        1,983,643        3,837,149           76,803        5,119,692          554,610

1995:
    First          $5,105,608       $  639,101       $1,555,577       $2,474,801       $   67,372       $3,786,428       $  380,975
    Second          5,664,339          927,646        1,594,203        2,651,732           67,753        3,890,180          392,285
    Third           6,149,763          799,498        1,841,186        2,932,688           74,262        4,516,763          449,966
    Fourth          6,095,515          687,251        1,694,669        3,068,057           73,437        4,511,184          469,678
</TABLE>


                                       32
<PAGE>   35
BALANCE SHEET ANALYSIS

Earning Assets

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

Average earning assets increased 32.7% to $8,407.7 million in 1997 compared to
$6,333.9 million in 1996. Earning assets comprised 91.2% of total average assets
in 1997 compared with 91.6% in 1996.

Average money market investments, consisting of interest-bearing deposits,
federal funds sold and security resell agreements increased 61.4% to $1,490.8
million in 1997 compared to $923.7 million in 1996.

Average securities increased 30.2% to $2,575.3 million in 1997, compared to
$1,977.9 million in 1996. Average held to maturity securities increased 34.4% to
$1,842.6 million, available for sale securities increased 1.4% to $457.1 million
and trading account securities increased 76.3% to $275.6 million.

Zions First National Bank is one of 37 U.S. Government Securities dealers
designated as a primary dealer by the Federal Reserve Bank of New York.

Average net loans and leases increased 26.5% to $4,341.7 million in 1997
compared to $3,432.3 million in 1996, representing 51.6% of earning assets in
1997 compared to 54.2% in 1996. Average net loans and leases were 75.1% of
average total deposits in 1997, as compared to 72.5% in 1996.


                                       33
<PAGE>   36
Investment Securities

The tables that follow present the Company's year-end investment securities for
the years indicated and maturities and average yields on held to maturity and
available for sale investment securities on December 31, 1997.


                              Investment Securities

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                    ---------------------------------------------------------------------------
                                                             1997                      1996                      1995
                                                    -----------------------   -----------------------   -----------------------
                                                     Amortized      Market     Amortized    Market      Amortized      Market 
(Amounts in thousands)                                 Cost         Value        Cost        Value        Cost         Value
                                                    ----------   ----------   ----------   ----------   ----------   ----------
<S>                                                 <C>          <C>          <C>          <C>          <C>          <C>       

Held to maturity:
        U.S. Treasury securities                    $     --     $     --     $   29,573   $   29,779   $   44,151   $   44,701
        U.S. government agencies
               and corporations:
                      Small Business
                             Administration loan-
                             backed securities         440,615      448,867      487,748      491,785      529,376      541,014
                      Other agency securities        1,409,835    1,415,600      629,271      629,154      325,115      323,261
        States and political subdivisions              210,675      215,251      260,963      265,161      230,442      235,302
        Mortgage-backed securities                      81,602       82,870       67,854       68,875       58,546       59,249
                                                    ----------   ----------   ----------   ----------   ----------   ----------
                                                     2,142,727    2,162,588    1,475,409    1,484,754    1,187,630    1,203,527
                                                    ----------   ----------   ----------   ----------   ----------   ----------
Available for sale:
        U.S. Treasury securities                        31,387       31,706       19,580       19,626       27,743       27,853
        U.S. government agencies                       169,767      166,609      135,530      131,463      105,903      105,935
        States and political subdivisions               25,858       26,932       39,118       40,766       40,153       42,084
        Mortgage and other
               asset-backed securities                  27,815       28,248       86,007       84,865       69,469       69,333
                                                    ----------   ----------   ----------   ----------   ----------   ----------
                                                       254,827      253,495      280,235      276,720      243,268      245,205
                                                    ----------   ----------   ----------   ----------   ----------   ----------
        Equity securities:
               Mutual funds:
                      Accessor Funds, Inc.             109,530      110,958      109,071      109,100      118,899      119,971
                      Other                               --           --           --           --            564          564
               Stock:
                      Federal Home Loan
                      Bank                              90,537       90,537       79,593       79,593       71,988       71,988
                      Other                             26,459       30,696        8,168        8,745        5,386        5,580
                                                    ----------   ----------   ----------   ----------   ----------   ----------
                                                       226,526      232,191      196,832      197,438      196,837      198,103
                                                    ----------   ----------   ----------   ----------   ----------   ----------
                                                       481,353      485,686      477,067      474,158      440,105      443,308
                                                    ----------   ----------   ----------   ----------   ----------   ----------
Trading:
        U.S. Treasury Securities                           346          346       21,959       21,959       22,353       22,353
        U.S. government agencies
               and corporations:
                      Small Business
                             Administration loan-
                             backed securities              14           14           10           10        1,007        1,007
                      Other agency securities           44,493       44,493        9,478        9,478       38,290       38,290
        States and political subdivisions                8,498        8,498        2,607        2,607        2,056        2,056
        Mortgage-backed securities                         630          630           22           22         --           --
        Certificates of Deposit                         29,700       29,700         --           --           --           --
                                                    ----------   ----------   ----------   ----------   ----------   ----------
                                                        83,681       83,681       34,076       34,076       63,706       63,706
                                                    ----------   ----------   ----------   ----------   ----------   ----------
Total                                               $2,707,761   $2,731,955   $1,986,552   $1,992,988   $1,691,441   $1,710,541
                                                    ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>


                                       34
<PAGE>   37
                   Maturities and Average Yields on Securities
                              on December 31, 1997


<TABLE>
<CAPTION>
                                                                                  After one       
                                    Total                  Within                 but within      
                                 securities               one year                five years      
                             -------------------    ---------------------    ---------------------
(Amounts in Millions)         Amount      Yield*     Amount       Yield*      Amount       Yield* 
                             --------   --------    --------     --------    --------     --------
<S>                          <C>        <C>         <C>          <C>         <C>          <C>     
HELD TO MATURITY:                                                                                 
U. S. government agencies                                                                         
  and corporations:                                                                               
    Small Business                                                                                
    Administration loan-                                                                          
    backed securities        $  440.6      7.2%     $   54.0        7.2%     $  161.5        7.2% 
  Other agency securities     1,409.8      6.8%         34.9        5.5%        518.6        6.7% 
States and political                                                                              
  Subdivisions                  210.7      8.0%         36.0        7.6%         84.0        8.0% 
Mortgage-backed securities       81.6      7.0%         23.4        6.5%         39.1        7.1% 
                             --------               --------                 --------             
                              2,142.7      7.0%        148.3        6.7%        803.2        7.0% 
                             --------               --------                 --------             
AVAILABLE FOR SALE:                                                                               
U.S. Treasury securities         31.4      6.1%          3.5        6.3%         27,4        6.0% 
U.S. government agencies        169.8      7.1%         62.1        6.1%         59.4        7.4% 
States and political                                                                              
  subdivisions                   25.9      8.1%          4.0        6.8%         11.7        8.3% 
Mortgage- and other                                                                               
asset-backed securities          27.8      7.6%          3.5        6.8%         18.8        7.9% 
                             --------               --------                 --------             
                                254.9      7.2%         73.1        6.2%        117.3        7.2% 
                             ========               ========                 ========             
Equity securities:                                                                                
  Mutual funds:                                                                                   
    Accessor Funds Inc.         109.5      5.7%                                                   
Stock:                                                                                            
  Federal Home                                                                                    
    Loan Bank                    90.5      8.0%                                                   
  Other                          26.5     11.6%                                                   
                             --------                                                             
                                226.5      7.3%                                                   
                             --------               --------                 --------             
                                481.4      7.2%         73.1        6.2%        117.3        7.2% 
                             --------               --------                 --------             
Total                        $2,624.1      7.0%     $  221.4        6.6%     $  920.5        7.0% 
                             --------               --------                 --------             
</TABLE>                                        


<TABLE>
<CAPTION>
                                   After five
                                   but within                  After
                                    ten years                ten years
                             -----------------------    ---------------------
(Amounts in Millions)         Amount         Yield*      Amount       Yield*
                             --------       --------    --------     --------
<S>                          <C>            <C>         <C>          <C> 
HELD TO MATURITY:            
U. S. government agencies    
  and corporations:          
    Small Business                                     
    Administration loan-                               
    backed securities        $  117.3          7.2%     $  107.8        7.2%
  Other agency securities       836.4          6.9%         19.9        7.8%
States and political                                   
  Subdivisions                   57.2          8.2%         33.5        8.0%
Mortgage-backed securities       14.7          7.3%          4.4        7.0%
                             --------                   --------           
                              1,025.6          7.0%        165.6        7.5%
                             --------                   --------           
AVAILABLE FOR SALE:                                    
U.S. Treasury securities           .1          8.3%           .4        8.3%
U.S. government agencies         31.2          8.0%         17.1        8.3%
States and political                                   
  subdivisions                   10.2          8.4%         --           -%
Mortgage- and other                                    
asset-backed securities           3.0          7.4%          2.5        7.4%
                             --------                   --------           
                                 44.5          8.1%         20.0        8.2%
                             --------                   --------           
Equity securities:                                     
  Mutual funds:                                        
    Accessor Funds Inc.                                    109.5        5.7%
Stock:                                                 
  Federal Home                                         
    Loan Bank                                               90.5        8.0%
  Other                                                     26.5       11.6%
                                                        --------           
                                                           226.5        7.3%
                             --------                   --------           
                                 44.5          8.1%        246.5        7.4%
                             --------                   --------           
Total                        $1,070.1          7.0%     $  412.1        7.4%
                             ========                   ========           
</TABLE>                                               


*     Taxable equivalent rates used where applicable.                          
                                                                               
At December 31, 1997, the value of the Accessor Funds Inc. and the Federal Home
Loan Bank stock each exceeded ten percent of shareholders' equity.             


                                       35
<PAGE>   38
Loan Portfolio

During 1997, the Company consummated securitized loan sales of automobile loans,
credit card receivables, home equity credit lines, Small Business Administration
and Federal Agricultural Mortgage Corporation (Farmer Mac) loans totaling $951.0
million. The Company also sold $733.2 million of long-term residential mortgage
loans, SBA loans, Farmer Mac loans and student loans classified as held for
sale. After these sales, loans and leases on December 31, 1997 totaled $4,914.4
million, an increase of 26.7% compared to $3,877.7 million on December 31, 1996.
Included in this increase are loans from acquisitions totaling $465.3 million.
Loans held for sale on December 31, 1997 increased 18.7% from year-end 1996.
Comparing year-end 1997 with year-end 1996, commercial loans, real estate loans,
consumer loans and lease financing increased 34.6%, 22.0%, 34.5% and 10.4%,
respectively.

The tables that follow set forth the amount of loans outstanding by type on
December 31 for the years indicated and the maturity distribution and
sensitivity to changes in interest rates of the portfolio on December 31, 1997.


                             Loan Portfolio by Type

<TABLE>
<CAPTION>
                                                                    December 31,
                                          ------------------------------------------------------------------
(Amounts in thousands)                       1997          1996          1995          1994          1993
                                          ----------    ----------    ----------    ----------    ----------
<S>                                       <C>           <C>           <C>           <C>           <C>       

Loans held for sale                       $  178,642    $  150,467    $  126,124    $  108,649    $  238,206
                                          ----------    ----------    ----------    ----------    ----------
Commercial, financial and agricultural     1,216,591       904,076       780,021       495,647       511,982
                                          ----------    ----------    ----------    ----------    ----------
Real estate:
        Construction                         482,907       346,796       285,497       218,244       213,114
        Other:
             Home equity credit line         139,755       183,300       108,040        40,007       159,998
             1-4 family residential          711,993       579,894       451,341       452,131       367,001
             Other real estate-secured     1,490,702     1,206,401       848,202       570,285       495,889
                                          ----------    ----------    ----------    ----------    ----------
                                           2,825,357     2,316,391     1,693,080     1,280,667     1,236,002
                                          ----------    ----------    ----------    ----------    ----------
Consumer:
        Bankcard                              59,506        42,313        56,189        41,035        27,522
        Other                                390,916       292,451       301,521       349,998       351,157
                                          ----------    ----------    ----------    ----------    ----------
                                             450,422       334,764       357,710       391,033       378,679
                                          ----------    ----------    ----------    ----------    ----------
Lease financing                              176,419       159,825       132,520       129,547       130,450
                                          ----------    ----------    ----------    ----------    ----------
Other receivables                             66,994        12,167        10,944        10,509        12,857
                                          ----------    ----------    ----------    ----------    ----------
             Total loans                  $4,914,425    $3,877,690    $3,100,399    $2,416,052    $2,508,176
                                          ==========    ==========    ==========    ==========    ==========
</TABLE>


The Company has no foreign loans in its loan portfolio.


                                       36
<PAGE>   39
                                 Loan Maturities
                              On December 31, 1997


<TABLE>
<CAPTION>
                                                                           Maturities
                                                     --------------------------------------------------------
                                                        One          One year          Over
                                                      year or         through          five
(Amounts in millions)                                  less         five years         years          Total
                                                     --------       ----------       --------        --------
<S>                                                  <C>             <C>             <C>             <C>     

Loans held for sale                                  $  178.6        $   --          $   --          $  178.6
                                                     --------        --------        --------        --------
Commercial, financial, and agricultural                 732.8           314.5           169.3         1,216,6
                                                     --------        --------        --------        --------
Real estate:
               Construction                             422.4            60.5            --             482.9
               Other:
                    Home equity credit line              44.6             2.3            92.9           139.8
                    1-4 family residential               91.9           148.0           472.1           712.0
                    Other real estate-secured           270.5           298.0           922.2         1,490.7
                                                     --------        --------        --------        --------
                                                        829.4           508.8         1,487.2         2,825.4
                                                     --------        --------        --------        --------
Consumer:
               Bankcard                                  --              59.5            --              59.5
               Other                                    106.6           181.5           102.8           390.9
                                                     --------        --------        --------        --------
                                                        106.6           241.0           102.8           450.4
                                                     --------        --------        --------        --------
Lease financing                                          12.3           128.8            35.3           176.4
                                                     --------        --------        --------        --------
Other receivables                                        42.6            10.7            13.7            67.0
                                                     --------        --------        --------        --------
               Total                                 $1,902.3        $1,203.8        $1,808.3        $4,914.4
                                                     ========        ========        ========        ========
Loans maturing in more than one year:
               With fixed interest rates                             $  651.9        $  818.4        $1,470.3
               With variable interest rates                             551.9           989.9         1,541.8
                                                                     --------        --------        --------
                             Total                                   $1,203.8        $1,808.3        $3,012.1
                                                                     ========        ========        ========
</TABLE>


                                       37
<PAGE>   40
Sold Loans Being Serviced

On December 31, 1997, long-term first mortgage real estate loans serviced for
others amounted to $1,896.8 million compared to $1,542.0 million on December 31,
1996, and $1,447.9 million on December 31, 1995.

Consumer and other loan securitizations serviced, which relate primarily to
loans sold under revolving securitization structures, totaled $1,050.3 million
on December 31, 1997, $867.9 million on December 31, 1996, and $831.5 million on
December 31, 1995.

The Company's activity in its sold loans being serviced portfolio (excluding
long-term first mortgage real estate loans) is summarized as follows:

                            Sold Loans Being Serviced


<TABLE>
<CAPTION>
                                            1997                               1996                                1995
                                ----------------------------        ----------------------------        ----------------------------
                                                 Outstanding                         Outstanding                         Outstanding
(Amounts in thousands)             Sales         at year end           Sales         at year end           Sales         at year end
                                ----------       -----------        ----------       -----------        ----------       -----------
<S>                             <C>               <C>               <C>               <C>               <C>               <C>       

Auto loans                      $  201,249        $  389,199        $  283,542        $  433,831        $  263,997        $  419,158
Home equity credit lines           341,433           327,245           180,173           220,501           195,569           219,750
Bankcard receivables               232,189            79,156           238,287            85,442           155,574            55,000
Home refinance loans                  --              44,887              --              67,582              --              99,008
SBA 504 loans                      115,271           131,153              --              30,635              --              38,573
SBA 7(a) loans                      37,640            55,806            41,095            29,896              --                --
Farmer MAC                          23,235            22,847              --                --                --                --
                                ----------        ----------        ----------        ----------        ----------        ----------
               Total            $  951,017        $1,050,293        $  743,097        $  867,887        $  615,140        $  831,489
                                ==========        ==========        ==========        ==========        ==========        ==========
</TABLE>

Other Assets

Included in other assets are the Company's investments in affiliated companies.
The Company or its subsidiaries owns stock of the Federal Agricultural Mortgage
Corporation (Farmer Mac) and MACC Private Equities Inc. (MACC) that it accounts
for using the equity method. On December 31, 1997, the book and market value of
the Farmer MAC stock was $15.0 million and $36.3 million, respectively. The book
and market value of the MACC stock was $1.7 million and $1.6 million,
respectively, on December 31, 1997. For 1997 the Company recognized income of
$459 thousand from its Farmer Mac investment and a loss of $273 thousand from
its investment in MACC.


                                       38
<PAGE>   41
Deposits

Total average deposits increased 22.2% to $5,783.4 million in 1997 from $4,731.9
million in 1996. Average noninterest-bearing deposits increased 27.3%, average
savings and NOW deposits increased 12.9%, average money market and super NOW
deposits increased 21.0%, and average time deposits under $100,000 increased
20.2%. Average time deposits over $100,000 increased 45.8% over 1996 average
balances and average foreign deposits increased 17.2% during 1997, as compared
with 1996.

Total deposits increased 33.9% to $6,854.5 million on December 31, 1997 as
compared to $5,119.7 million on December 31, 1996. Included in this increase are
deposits from acquisitions totaling $980.9 million. Comparing December 31, 1997
to December 31, 1996, demand deposits increased 32.5%, savings and money market
deposits increased 28.3%, time deposits under $100,000 increased 41.5%, while
time deposits over $100,000 increased 69.4% and foreign deposits increased
60.2%.


                    Average Deposit Amounts and Average Rates


<TABLE>
<CAPTION>
(Amounts in millions)                                                      1997              1996              1995
                                                                         ---------         ---------         ---------
<S>                                                                      <C>               <C>               <C>      
Average amounts:
      Noninterest-bearing demand deposits                                $ 1,372.9         $ 1,078.5         $   868.0
      Savings and NOW deposits                                               729.5             646.4             729.1
      Money market and super NOW deposits                                  2,353.6           1,945.7           1,467.1
      Time deposits of less than $100,000                                    871.7             725.0             627.2
      Time deposits $100,000 or more                                         314.2             215.5             133.1
      Foreign deposits                                                       141.5             120.8             139.2
                                                                         ---------         ---------         ---------
           Total average amounts                                         $ 5,783.4         $ 4,731.9         $ 3,963.7
                                                                         =========         =========         =========

Average rates:
      Noninterest-bearing demand deposits                                       -%                -%                -%
      Savings and NOW deposits                                                2.95%             3.08%             3.11%
      Money market and super NOW deposits                                     3.80%             3.70%             4.12%
      Time deposits under $100,000                                            5.17%             5.22%             5.21%
      Time deposits $100,000 or more                                          5.75%             5.67%             5.96%
      Foreign deposits                                                        4.49%             4.46%             5.16%
           Total                                                              4.09%             4.03%             4.23%
Maturities of time deposits $100,000 or more at December 31, 1997
 (Amounts in millions):
      Under three months                                                 $   147.4
      Over three  months and less than six months                             82.5
      Over six months and less than twelve months                            103.4
      Over twelve months                                                      75.4
                                                                         ---------
           Total time deposits $100,000 or more                          $   408.7
                                                                         =========
</TABLE>


Most foreign deposits are in denominations of $100,000 or more.


                                       39
<PAGE>   42
Short-term Borrowings

The following table sets forth data pertaining to the Company's short-term
borrowings for each year indicated:

(Amounts in thousands, except rates)

<TABLE>
<CAPTION>
At December 31,                                  
- ---------------                                                                                                     Weighted 
                                                                                                    Average          average 
                                                                Weighted           Maximum          balance            rate  
Category of aggregate                                            average          month-end        during the      during the
short-term borrowings                             Balance          rate            balance            year             year  
- ---------------------                            --------       --------         ----------        ----------      ----------
<S>                                              <C>            <C>              <C>               <C>             <C>  
Securities sold, not yet purchased              
           1997                                  $ 45,067         5.47%          $  212,617        $   91,963         5.82%
           1996                                  $ 76,831         5.52%          $  197,848        $   76,518         5.85%
           1995                                  $117,005         6.58%          $  241,219        $   90,206         6.23%

Federal funds purchased(a)
           1997                                  $294,109         6.54%          $  487,098        $  298,752         5.46%
           1996                                  $155,407         6.68%          $  454,857        $  206,061         5.44%
           1995                                  $134,048         5.38%          $  354,565        $  134,683         5.90%

Security repurchase agreements(b)
           1997                                  $976,766         5.24%          $2,219,006        $1,837,795         5.18%
           1996                                  $771,361         5.28%          $1,341,414        $1,110,725         4.94%
           1995                                  $614,284         5.07%          $1,530,887        $  902,514         5.40%

Federal Home Loan Bank advances and 
other borrowings less than one year(c)
           1997                                  $ 59,883         6.05%          $   69,387        $   34,163         6.72%
           1996                                  $ 14,349         5.82%          $   19,009        $   18,707         6.31%
           1995                                  $ 16,059         5.95%          $   25,972        $   20,654         6.85%
</TABLE>

(a)   Federal funds purchased are on an overnight or demand basis. Rates on
      overnight and demand funds reflect current market rates.

(b)   Security repurchase agreements are primarily on an overnight or demand
      basis. Rates on overnight and demand funds reflect current market rates.
      Rates on fixed-maturity borrowings are set at the time of the borrowings.

(c)   Federal Home Loan Bank advances less than one year are overnight and
      reflect current market rates or reprice monthly based on one-month LIBOR
      as set by the Federal Home Loan Bank of Seattle. Other borrowings are
      primarily variable rate and reprice based on changes in the prime rate
      which reflect current market.


                                       40
<PAGE>   43
Long-Term Debt

Long-term debt is primarily comprised of $200 million of 8.536% Guaranteed
Preferred Beneficial Interests in Junior Subordinated Deferrable Interest
Debentures issued by Zions Institutional Capital Trust A in December 1996, and
$7.5 million of 10.25% debentures issued by GB Capital Trust in January 1997.
With the approval of banking regulators, the Company has the right to redeem
these issues beginning in 2006 and 2007, respectively. These debts mature on
December 15, 2026 and January 27, 2027, respectively. Also included in long-term
debt is $50 million of 8-5/8% unsecured subordinated notes that mature in 2002.
The subordinated notes are not redeemable prior to maturity.

The Company has plans to retire a portion of both the $50 million, 8-5/8%
subordinated notes and the $7.5 million, 10.25% GB Capital Trust Junior
Subordinated Debentures. It is anticipated that the Company will recognize a
loss on the debt retirements. As of December 31, 1997, this loss is not
determinate.

Return on Equity and Assets

<TABLE>
<CAPTION>
                                                       1997            1996            1995
                                                     -------         -------         -------
<S>                                                  <C>             <C>             <C>  
Return on average assets                                1.33%           1.55%           1.43%
Return on average common shareholders' equity          19.88%          20.95%          20.22%
Common dividend payout ratio                           23.20%          23.27%          24.95%
Average equity to average assets ratio                  6.68%           7.42%           7.05%
</TABLE>


                                       41
<PAGE>   44
Capital

The Company's basic financial objective is to consistently produce superior
risk-adjusted returns on its shareholders' capital. The Company believes that a
strong capital position is vital to continued profitability and to promote
depositor and investor confidence. The Company's consolidated capital levels are
a result of its capital policy, which establishes guidelines for its
subsidiaries based on industry standards, regulatory requirements and an attempt
at balancing perceived risks with expected returns for various activities. The
Company's goal is to steadily achieve a high return on shareholders' equity,
while at the same time maintaining "risk-based capital" of not less than the
"well-capitalized" threshold, as defined by federal banking regulators.

During 1997, 1996 and 1995, the Company repurchased and retired 3,572,603,
1,096,992 and 1,500,160 shares of its common stock at a cost of $119.7 million,
$21.6 million and $18.5 million, respectively.

Total shareholders' equity on December 31, 1997 was $655.5 million, an increase
of 18.2% over the $554.6 million on December 31, 1996. The ratio of average
equity to average assets for the year 1997 was 6.68%, compared to 7.42% for the
year 1996.

On December 31, 1997, the Company's Tier 1 leverage ratio was 6.75%, as compared
to 8.70% on December 31, 1996. On December 31, 1997, the Company's Tier 1
risk-based capital ratio was 11.74%, as compared to 14.16% on December 31, 1996.
On December 31, 1997 the Company's total risk-based capital ratio was 13.75%, as
compared to 17.52% on December 31, 1996. The Company's regulatory capital ratios
on December 31 for the years 1997, 1996 and 1995 are shown in the table that
follows:

                  Regulatory Risk-Based Capital on December 31


<TABLE>
<CAPTION>
                                                                                                     Ratios for  Ratios to be
                                                                                                       Minimum    Considered
                                                                                                       Capital       "Well 
(Amounts in thousands)                         1997               1996               1995             Adequacy    Capitalized"
                                            ----------         ----------         ----------         ----------  -------------
<S>                                         <C>                <C>                <C>                <C>         <C>  
Tier 1 Capital                              $  660,446         $  628,261         $  403,852
Total Capital                               $  773,245         $  777,430         $  500,375

Risk-adjusted assets,
      net of goodwill and excess
      deferred tax assets                   $5,624,373         $4,436,681         $3,565,355
Average Assets, net of goodwill
      and excess deferred tax assets        $9,784,570         $7,225,247         $6,378,015

Tier 1 Leverage Ratio                             6.75%              8.70%              6.33%              3.00%        5.00%
Tier 1 Risk-based Capital Ratio                  11.74%             14.16%             11.33%              4.00%        6.00%
Total Risk-based Capital Ratio                   13.75%             17.52%             14.03%              8.00%       10.00%
</TABLE>


                                       42
<PAGE>   45
Dividends

Dividends per share were $.47 in 1997, an increase of 10.6% over $.425 in 1996,
which were up 20.6% over $.3525 in 1995. The Company's quarterly dividend rate
was $.075 per share for the first quarter of 1995, increasing to $.0875 per
share for the second and third quarters of 1995, increasing to $.1025 per share
for the fourth quarter of 1995 and the first and second quarters of 1996,
increasing to $.11 per share for the third and fourth quarters of 1996 and the
first quarter of 1997, and increasing to $.12 per share for the second, third
and fourth quarters of 1997.

                                 Dividends Paid

<TABLE>
<CAPTION>
(Amounts in thousands)          1997             1996             1995             1994             1993
                              --------         --------         --------         --------         --------
<S>                           <C>              <C>              <C>              <C>              <C>     
Net income                    $122,362         $107,423         $ 82,385         $ 63,827         $ 58,205
Common dividends paid           28,387           24,997           20,554           17,271           12,692
Payout/net income                23.20%           23.27%           24.95%           27.06%           21.81%
</TABLE>

Shareholders' Rights Plan

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

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

Foreign Operations

Zions First National Bank opened a foreign office located in Grand Cayman, Grand
Cayman Islands, B.W.I. in 1980. This office has no foreign loans outstanding.
The office accepts Eurodollar deposits from qualified customers of the Bank and
places deposits with foreign banks and foreign branches of other U.S. banks.
Foreign deposits at December 31, totaled $183.0 million in 1997, $114.3 million
in 1996, and $106.1 million in 1995; and averaged $141.5 million for 1997,
$120.8 million for 1996, and $139.2 million for 1995.


                                       43
<PAGE>   46
RISK ELEMENTS

Credit Risk Management

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

Another aspect of the Company's credit risk management strategy is the
diversification of the loan portfolio. At year end, the Company had 4% of its
portfolio in loans held for sale, 25% in commercial loans, 57% in real estate
loans, 9% in consumer loans, 4% in lease financing and 1% in other loans. The
Company's real estate portfolio is also diversified. Of the total portfolio, 10%
is in real estate construction loans, 3% is in home equity credit lines, 14% is
in 1-4 family residential loans and 30% is in commercial loans secured by real
estate. In addition, the Company attempts to avoid the risk of an undue
concentration of credits in a particular industry or trade group. The commercial
loan and lease portfolio consists of approximately 11 industry classification
groupings. On December 31, 1997, the larger concentrations of risk in the
commercial loan and leasing portfolio were represented by real estate and
construction, business services and transportation, manufacturing, and retail
industry groupings, which comprised approximately 29%, 19%, 9% and 7%,
respectively, of the portfolio. The Company has a well-diversified loan
portfolio with no significant exposure to highly leveraged transactions. Most of
the Company's business activity is with customers located within the states of
Utah, Idaho, Nevada, Arizona, Colorado and California and it has no foreign
credits in its loan portfolio. Also, the Company does not have significant
exposure to any individual customer or counterparty.


                                       44
<PAGE>   47
Loan Risk Elements

The following table shows the principal amounts of nonaccrual, past due 90 days
or more, restructured loans, and potential problem loans at December 31 for each
year indicated:


<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                        --------------------------------------------------
(Amounts in thousands)                                                    1997       1996       1995       1994      1993
                                                                        -------    -------    -------    -------   -------
<S>                                                                     <C>        <C>        <C>        <C>       <C>    
Nonaccrual loans                                                        $11,907    $12,704    $10,875    $13,635   $23,364

Loans contractually past due 90 days or more (not included
    in nonaccrual loans above)                                            9,944      3,563      5,309      3,041    10,821

Restructured loans (not included in nonaccrual loans or loans
    contractually past due 90 days or more)                                 691        857        249        567     4,006

Potential problem loans (loans presently current by their terms, but
    about which management has serious doubt as to the future ability
    of the borrower to comply with present repayment terms)                --         --         --         --       1,114

Includes loans held for sale
</TABLE>

Impact of Nonperforming Loans on Interest Income

The following table presents the gross interest income on nonaccrual and
restructured loans that would have been recorded if these loans had been current
in accordance with their original terms (interest at original rates), and the
amount of interest income on these loans that was included in income for each
year indicated:

<TABLE>
<CAPTION>
                                                     1997                          1996                         1995
                                           --------------------------    --------------------------    --------------------------
                                            Non-    Restruc-              Non-    Restruc-              Non-    Restruc-
(Amounts in thousands)                     accrual   tured      Total    accrual   tured      Total    accrual   tured     Total
                                           -------  -------    ------    -------  -------    ------    -------  -------    ------
<S>                                        <C>      <C>        <C>       <C>      <C>        <C>       <C>      <C>        <C>   

Gross amount of interest that would
    have been recorded at original rate    $1,180    $   70    $1,250    $1,361    $   92    $1,453    $1,073    $   27    $1,100

Interest that was included
    in income                                 742        67       809       629        91       720       449        25       474
                                           ------    ------    ------    ------    ------    ------    ------    ------    ------
Net impact on interest income              $  438    $    3    $  441    $  732    $    1    $  733    $  624    $    2    $  626
                                           ======    ======    ======    ======    ======    ======    ======    ======    ======
</TABLE>


                                       45
<PAGE>   48
Nonperforming Assets

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

The Company's nonperforming assets were $16.0 million on December 31, 1997, up
from $13.7 million on December 31, 1996. Such nonperforming assets as a
percentage of net loans and leases, other real estate owned and other
nonperforming assets were .33% on December 31, 1997, as compared to .36% on
December 31, 1996.

Accruing loans past due 90 days or more totaled $9.9 million on December 31,
1997, up from $3.6 million on December 31, 1996. These loans equaled .20% of net
loans and leases on December 31, 1997, as compared to .09% on December 31, 1996.

No loans were considered potential problem loans on December 31, 1997 or 1996.
Potential problem loans are defined as loans presently on accrual and not
contractually past due 90 days or more and not restructured, but about which
management has serious doubt as to the future ability of the borrower to comply
with present repayment terms and which may result in the reporting of the loans
as nonperforming assets.

The Company's total recorded investment in impaired loans, in accordance with
Financial Accounting Standard statements and included in nonaccrual loans and
leases, amounted to $7.1 million and $7.8 million on December 31, 1997 and 1996,
respectively. The Company considers a loan to be impaired when the accrual of
interest has been discontinued and meets other criteria under the statements.
The amount of the impairment is measured based on the present value of expected
cash flows, the observable market price of the loan, or the fair value of the
collateral. Impairment losses are included in the allowance for loan losses
through a provision for loan losses. Included in the allowance for loan losses
on December 31, 1997 and 1996, is a required allowance of $46 thousand and $25
thousand respectively, on $.3 million and $1.0 million, respectively, of the
recorded investment in impaired loans.


                                       46
<PAGE>   49
The following table sets forth the composition of nonperforming assets at
December 31 for the years indicated.


                              Nonperforming Assets

<TABLE>
<CAPTION>
                                                                            December 31,
                                                   ---------------------------------------------------------------
(Amounts in thousands)                               1997          1996          1995          1994          1993
                                                   -------       -------       -------       -------       -------
<S>                                                <C>           <C>           <C>           <C>           <C>    
Nonaccrual loans:
      Commercial, financial and agricultural       $ 3,563       $ 4,999       $ 2,338       $ 5,736       $ 6,969
      Real estate                                    7,073         6,160         6,129         5,290        12,277
      Consumer                                         572           765           883           862           607
      Lease financing                                  691           779         1,395         1,747         3,511
      Other                                              8             1           130          --            --
                                                   -------       -------       -------       -------       -------
         Total                                      11,907        12,704        10,875        13,635        23,364
                                                   -------       -------       -------       -------       -------
Restructured loans:
      Commercial, financial and agricultural          --             144          --            --               8
      Real estate                                      691           713           249           567         3,998
                                                   -------       -------       -------       -------       -------
         Total                                         691           857           249           567         4,006
                                                   -------       -------       -------       -------       -------
Other real estate owned:
      Commercial, financial and agricultural:
         Improved                                    2,453          --             425           415           844
         Unimproved                                    405            30           200         1,018           904
      Residential:
         1-4 Family                                    500            84           439            63         1,182
         Multi-family                                 --            --            --            --            --
         Lots                                            7             6             6             6           163
      Recreation property                                6             8             9            42           110
      Other                                           --              10            13            18            64
                                                   -------       -------       -------       -------       -------
         Total                                       3,371           138         1,092         1,562         3,267
Other nonperforming assets                            --            --             517         3,179          --
                                                   -------       -------       -------       -------       -------
         Total                                       3,371           138         1,609         4,741         3,267
                                                   -------       -------       -------       -------       -------

         Total                                     $15,969       $13,699       $12,733       $18,943       $30,637
                                                   =======       =======       =======       =======       =======
% of Net loans* and leases, other real estate
      owned and other nonperforming assets             .33%          .36%          .41%          .79%         1.23%

Accruing loans past due 90 days or more:
      Commercial, financial and agricultural       $ 1,456       $   477       $   730       $   431       $ 1,612
      Real estate                                    6,967         2,205         3,529         1,975         8,881
      Consumer                                       1,357           881         1,044           631           327
      Lease financing                                  164          --               6             4             1
                                                   -------       -------       -------       -------       -------
         Total                                     $ 9,944       $ 3,563       $ 5,309       $ 3,041       $10,821
                                                   =======       =======       =======       =======       =======

% of Net loans* and leases                             .20%          .09%          .17%          .13%          .44%
</TABLE>

*     Includes loans held for sale.


                                       47
<PAGE>   50
Allowance for Loan Losses

The Company's allowance for loan losses was 1.65% of net loans and leases on
December 31, 1997 compared to 2.00% on December 31, 1996. Net charge-offs in
1997 were $8.0 million, or .19% of average loans and leases, compared to net
charge-offs of $3.8 million, or .11% of average net loans and leases in 1996 and
net charge-offs of $2.8 million, or .10% of average net loans and leases in
1995.

The allowance, as a percentage of nonaccrual loans and restructured loans, was
638.84% on December 31, 1997, compared to 566.35% on December 31, 1996, and
660.17% on December 31, 1995. The allowance, as a percentage of nonaccrual loans
and accruing loans past due 90 days or more was 368.32% on December 31, 1997,
compared to 472.14% on December 31, 1996, and 453.76% on December 31, 1995.

On December 31, 1997, 1996 and 1995, the allowance for loan losses includes an
allocation of $8.9 million, $6.2 million and $8.0 million respectively, related
to commitments to extend credit on loans and standby letters of credit.
Commitments to extend credit on loans and standby letters of credit on December
31, 1997, 1996 and 1995, totaled $2,533.7 million, $2,075.8 million, and
$1,722.9 million, respectively. The Company's actual future credit exposure is
much lower than the contractual amounts of the commitments because a significant
portion of the commitments is expected to expire without being drawn upon.

In analyzing the adequacy of the allowance for loan and lease losses, management
utilizes a comprehensive loan grading system to determine risk potential in the
portfolio, and considers the results of independent internal and external credit
review, historical charge-off experience, and changes in the composition and
volume of the portfolio. Other factors, such as general economic conditions and
collateral values, are also considered. Larger problem credits are individually
evaluated to determine appropriate reserve allocations. Additions to the
allowance are based upon the resulting risk profile of the portfolio developed
through the evaluation of the above factors.


                                       48
<PAGE>   51
Summary of Loan Loss Experience

The following table shows the change in the allowance for losses for each year
indicated.

<TABLE>
<CAPTION>
(Amounts in thousands)                                 1997             1996             1995             1994             1993
                                                   -----------      -----------      -----------      -----------      -----------
<S>                                                <C>              <C>              <C>              <C>              <C>        
Loans* and leases outstanding on December
   31 (net of unearned  income)                    $ 4,871,650      $ 3,837,149      $ 3,068,057      $ 2,391,278      $ 2,486,346
                                                   ===========      ===========      ===========      ===========      ===========
Average loans* and leases outstanding
    (net of unearned  income)                      $ 4,341,674      $ 3,432,347      $ 2,662,753      $ 2,574,995      $ 2,222,182
                                                   ===========      ===========      ===========      ===========      ===========

Allowance for possible losses:
Balance at beginning of year                       $    76,803      $    73,437      $    67,018      $    68,461      $    59,807

Allowance of companies acquired                          5,544            2,566            6,202            1,308              546

Provision charged against earnings                       6,175            4,640            3,000            2,181            2,993

Loans and leases charged off:
    Loans held for sale                                   --               --               --               --               --
    Commercial, financial and agricultural              (5,472)          (1,342)          (1,208)          (5,158)          (1,804)
    Real estate                                           (329)            (539)            (587)            (573)          (1,179)
    Consumer                                            (8,277)          (7,814)          (6,847)          (4,756)          (5,461)
    Lease  financing                                      (279)            (228)             (41)          (1,174)            (360)
    Other receivables                                     --               --               --               --               --
                                                   -----------      -----------      -----------      -----------      -----------
        Total                                          (14,357)          (9,923)          (8,683)         (11,661)          (8,804)
                                                   -----------      -----------      -----------      -----------      -----------
Recoveries:
    Loans held for sale                                   --               --               --               --               --
    Commercial, financial and agricultural               2,003            2,606            2,584            2,180           10,117
    Real estate                                          1,854              537              491              676              611
    Consumer                                             2,313            2,398            2,549            3,732            3,043
    Lease financing                                        146              542              276              141              148
    Other receivables                                     --               --               --               --               --
                                                   -----------      -----------      -----------      -----------      -----------
        Total                                            6,316            6,083            5,900            6,729           13,919
                                                   -----------      -----------      -----------      -----------      -----------

Net loan and lease (charge-offs) recoveries             (8,041)          (3,840)          (2,783)          (4,932)           5,115
                                                   -----------      -----------      -----------      -----------      -----------

Balance at end of year                             $    80,481      $    76,803      $    73,437      $    67,018      $    68,461
                                                   ===========      ===========      ===========      ===========      ===========

Ratio of net charge-offs (recoveries) to
    average loans  and leases                              .19%             .11%             .10%             .19%            (.23)%
Ratio of allowance for possible losses to loans
    and leases outstanding on December 31                 1.65%            2.00%            2.39%            2.80%            2.75%
Ratio of allowance for possible losses to
    nonperforming loans on December 31                  638.84%          566.35%          660.17%          471.89%          250.13%
Ratio of allowance for possible losses to
    nonaccrual loans and accruing loans past
    due 90 days or more on December 31                  368.32%          472.14%          453.76%          401.88%          200.27%
</TABLE>

*     Includes loans held for sale


                                       49
<PAGE>   52
Review of nonperforming loans and evaluation of the quality of the loan
portfolio, as previously mentioned, results in the identification of certain
loans with risk characteristics which warrant specific reserve allocations in
the determination of the amount of the allowance for loan losses. The allowance
is not allocated among all loan categories, and amounts allocated to specific
categories are not necessarily indicative of future charge-offs. An amount in
the allowance not specifically allocated by loan category is necessary in view
of the fact that, while no loans were made with the expectation of loss, some
loan losses inevitably occur. The following is a categorization of the allowance
for loan losses for each year indicated:


<TABLE>
<CAPTION>
                                                           1997                         1996
                                               ----------------------------     ----------------------
                                                 % of            Allocation       % of      Allocation 
                                                 total               of           total         of
(Amounts in thousands)                           loans            allowance       loans      allowance
                                               ---------         ----------     ---------   ----------
<S>                                            <C>               <C>            <C>         <C>    
Type of loan
- ------------
Loans held for sale                                3.6%            $     -          3.9%      $     -
Commercial, financial and agricultural            24.7               2,028         23.3         3,455
Real estate                                       57.5               3,616         59.8         4,609
Consumer                                           9.2                 910          8.6            80
Lease financing                                    3.6                 115          4.1           204
Other receivables                                  1.4                   -           .3             -
                                                 -----                            ----- 
      Total loans                                100.0%                           100.0%
                                                 =====                            ===== 
Off-balance sheet unused commitments                                            
     and standby letters of credit                                   8,852                      6,218
                                                                   -------                      -----
Allocated                                                           15,521                     14,566
Unallocated                                                         64,960                     62,237
                                                                    ------                     ------
      Total allowance for loan losses                              $80,481                    $76,803
                                                                   =======                    =======
</TABLE>


<TABLE>
<CAPTION>
                                                           1995                         1994                       1993          
                                               ----------------------------     ----------------------     ----------------------
                                                 % of            Allocation       % of      Allocation       % of      Allocation 
                                                 total               of           total         of           total         of    
(Amounts in thousands)                           loans            allowance       loans      allowance       loans      allowance
                                               ---------         ----------     ---------   ----------     ---------   ----------
<S>                                            <C>               <C>            <C>         <C>            <C>         <C>       
(Amounts in thousands)
Type of loan
- ------------
Loans held for sale                                4.1%             $ --            4.4%       $ --            9.5%       $ --
Commercial, financial and agricultural            25.1                 778         20.5         2,920         20.4         3,094
Real estate                                       54.6               2,397         53.0         1,594         49.3         4,032
Consumer                                          11.5                  32         16.2           946         15.1         2,366
Lease financing                                    4.3                 425          5.4           981          5.2         1,043
Other receivables                                   .4                --             .4          --             .5          --
                                                 -----                            -----                      ----- 
      Total loans                                100.0%                           100.0%                     100.0%
                                                 =====                            =====                      ===== 
                                                                   
Off-balance sheet unused commitments and
    standby letters of credit                                        7,954                      3,674                      1,972
                                                                   -------                    -------                    -------
Allocated                                                           11,586                     10,115                     12,507
Unallocated                                                         61,851                     56,903                     55,954
                                                                   -------                    -------                    -------
      Total allowance for loan losses                              $73,437                    $67,018                    $68,461
                                                                   =======                    =======                    =======
</TABLE>


                                       50
<PAGE>   53
Liquidity Risk Management

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

To meet the Company's short-term liquidity needs, on December 31, 1997 the
Company had cash, money market investments, and liquid securities net of
short-term or "purchased" liabilities and foreign deposits, of $2.0 billion or
32.2% of core deposits. The Company's core deposits, consisting of demand,
savings, money market, and time deposits under $100,000, constituted 91.4% of
total deposits at year-end.

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

At January 1, 1998, $60.9 million of dividend capacity was available from
subsidiaries to pay to the Parent without having to obtain regulatory approval.
During 1997, dividends from subsidiaries were $98.7 million. In October, the
Parent issued a $50 million senior note to a third party in a private
transaction. The note matures in October 1999. At December 31, 1997 the Parent
had revolving credit facilities with two banks totaling $50 million. On that
date, the balance outstanding on these bank lines was $44 million.


                                       51
<PAGE>   54
Market Risk Management

Market risk is the possibility that changes in interest rates or equity
securities prices will impair the fair value of the Company's financial
instruments. The Asset/Liability Committee (ALCOM) measures and reviews the
market risk of the Company and establishes policies and procedures to limit its
exposure to changes in interest rates. These policies are reviewed and approved
by the Boards of Directors of the Company's subsidiary banks.

Interest rate risk is the most significant market risk regularly undertaken by
the Company. This risk is monitored through the use of three complementary
measurement methods: equity duration, income simulation, and gap analysis.
Equity duration is the residual average life of the Company's equity determined
by subtracting the weighted average life of the discounted expected cash flows
of its liabilities from its assets. Income simulation is an estimate of the net
interest income which would be recognized under different rate environments. Gap
analysis compares the amount of assets which mature or are subject to an
interest rate reset during a specified period to the amount of liabilities with
similar rate change characteristics.

At year-end, the equity duration of the Company was estimated to be 1.3 years. A
200 basis point immediate increase in rates was estimated to increase the
duration of equity to 5.2 years. Conversely, an immediate decrease in rates of
similar magnitude was estimated to decrease the duration of equity to 0.2 years.
Company policy requires that all three of these measures be between 0 and 7
years.

For income simulation, Company policy requires that net interest income not be
expected to decline by more than 10% during one year if rates rise or fall by
200 basis points during the period. At year-end, net interest income was
expected to decline by 0.23% during 1998 in a rising rate environment relative
to projected net interest income in a stable rate environment. If rates declined
by 200 basis points during 1998, net interest income was forecasted to be 1.25%
lower than if rates are stable. Net interest income was expected to be modestly
lower in either a rising or declining rate scenario for a variety of factors,
including management's assumptions regarding loan and deposit pricing, security
and loan prepayments, and changes in relationships between market rates.

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

At year end, the one year gap for the Company was negative $312.6 million; i.e.,
the $6,023.6 million of assets that mature or reprice during 1998 was estimated
to be less than the $5,749.9 million of liabilities and the $586.3 million net
effect of off-balance sheet swaps that mature or reprice during the same period.
This gap represented 3.3% of total assets. Details of the repricing
characteristics of the balance sheet as of year-end are presented in the
accompanying table. The Company does not have policy limits regarding its gap
position.


                                       52
<PAGE>   55
                    Maturities and Interest Rate Sensitivity
                              on December 31, 1997

<TABLE>
<CAPTION>
                                                                  Rate Sensitive
                                                ----------------------------------------------------
                                                                  After
                                                                  three        After one
                                                 Within          months         year but
                                                 three         but within        within    After five       Not rate
(Amounts in millions)                            months         one year       five years     years         sensitive    Total
                                                --------       ----------      ----------  ----------       ---------   --------
<S>                                             <C>            <C>             <C>         <C>              <C>         <C>
Uses of Funds
Earning Assets:
      Interest-bearing deposits                 $    7.6        $   19.2        $   35.0    $     .1                    $   61.9
      Federal funds sold                           402.9                                                                   402.9
      Security resell agreements                   349.3                                                                   349.3
      Securities:                                                                                                   
         Held to maturity                          843.6           433.3           507.2       358.6                     2,142.7
         Available for sale                        194.2            50.7           121.2       119.6                       485.7
         Trading account                            83.7                                                                    83.7
      Loans and leases                           3,033.5           605.6           987.6       245.0                     4,871.7
Nonearning assets                                                                                           $1,123.9     1,123.9
                                                --------        --------        --------    --------        --------    --------
           Total uses of funds                  $4,914.8        $1,108.8        $1,651.0    $  723.3        $1,123.9    $9,521.8
                                                ========        ========        ========    ========        ========    ========
Sources of Funds
Interest-bearing deposits and liabilities:
      Savings and money market
       deposits                                 $2,100.5        $   23.7        $   65.9    $1,288.2                    $3,478.3
      Time deposits under $100,000                 273.1           479.6           247.4         1.6                     1,001.7
      Time deposits over $100,000                  148.8           199.2            60.8                                   408.8
      Foreign                                      183.0                                                                   183.0
      Securities sold, not yet
       purchased                                    45.1                                                                    45.1
      Federal funds purchased                      294.1                                                                   294.1
      Security repurchase agreements               976.7                                                                   976.7
      FHLB advances and other
        borrowings:
         Less than one year                         59.9                                                                    59.9
         Over one year                              36.5            51.8            14.0       108.4                       210.7
      Long-term debt                                                  .1            50.4       208.0                       258.5
Noninterest-bearing deposits                       877.8                                                    $  904.9     1,782.7
Other liabilities                                                                                              166.8       166.8
Shareholders' equity                                                                                           655.5       655.5
                                                --------        --------        --------    --------        --------    --------
            Total sources of funds              $4,995.5        $  754.4        $   38.5    $1,606.2        $1,727.2    $9,521.8
                                                ========        ========        ========    ========        ========    ========
Off-balance sheet items affecting
      interest rate sensitivity                 $ (661.3)       $   75.0        $  578.1    $    8.2
Interest rate sensitivity gap                   $ (742.0)       $  429.4        $1,790.6    $ (874.7)       $ (603.3)
Percent of total assets                             (7.8)%           4.5%           18.8%       (9.2)%          (6.3)%
Cumulative interest rate
      sensitivity gap                           $ (742.0)       $ (312.6)       $1,478.0    $  603.3
                                               
Cumulative as a % of total assets                   (7.8)%          (3.3)%          15.5%        6.3%
</TABLE>


                                       53
<PAGE>   56
The Company, through the management of maturities and repricing of its assets
and liabilities and the use of off-balance sheet arrangements, including
interest rate caps, floors, futures, options, and exchange agreements, attempts
to manage the effect on net interest income of changes in interest rates. The
prime lending rate is the primary basis used for pricing the Company's loans and
the 91-day Treasury bill rate is the index used for pricing many of the
Company's deposits. The Company, however, is unable to economically hedge the
prime/T-bill spread risk through the use of derivative financial instruments.
Interest rate swap maturities and average rates are presented in the following
table. For a further discussion and information regarding off-balance sheet
financial contracts, refer to Notes 1, 13 and 19 to the Financial Statements.

Interest Rate Swap Maturities and Average Rates

<TABLE>
<CAPTION>
(Amounts in millions)                       1998           1999           2000           2001        Thereafter     Total
                                          --------       --------       --------       --------      ----------    --------
<S>                                       <C>            <C>            <C>            <C>            <C>          <C>     
Receive fixed rate
      Notional amount                     $  115.0       $  300.0       $  220.4       $    1.2       $   64.7     $  701.3
      Weighted-average rate received          5.84%          6.19%          6.28%          6.75%          6.53%        6.19%
      Weighted-average rate paid              5.92%          5.91%          5.92%          6.02%          5.89%        5.91%
</TABLE>

Year 2000

A number of electronic systems utilize a two-digit field for year references,
e.g., 98 instead of 1998. Such systems may determine the year 2000, if
represented as 00, to be 98 years ago rather than two years hence. The Company
is in the process of modifying or replacing certain computer software and
hardware and other systems to ensure proper processing of transactions after
1999. The Company is also in contact with external service providers to
ascertain that their systems, upon which the Company depends, will also be
upgraded, if necessary.

The Company anticipates that all of its major systems for which it conducts its
own processing will be compliant with Year 2000 processing by the end of 1998.
It expects to test each of its systems to confirm compliance late this year. The
Company believes that all of its third-party service providers will also be
compliant by the end of this year, except for its trust and mortgage processing
systems, which it believes will be able to appropriately handle transactions
after 1999 by the end of the first quarter of next year.

A review is also being undertaken of the Company's other systems to confirm
proper functionality after 1999; including security cameras, alarm systems,
voice mail, and elevators, among others. Finally, the Company inquires about
Year 2000 preparedness being undertaken by its customers to which it has
significant credit exposure. The Company estimates that the cumulative
incremental cost it will incur to address the Year 2000 issue to be
approximately $3 million. The cost estimate excludes the expense outlays the
Company is making to replace its processing systems in the ordinary course of
business to improve its products and services. Many of these new systems also
correct deficiencies that the Company's present software has in processing
transactions after 1999. The preponderance of this expense will be recognized in
1998.

Forward-Looking Statements

Statements in Management's Discussion and Analysis that are not based on
historical data may constitute forward looking information within the meaning of
the Private Securities Litigation Reform Act of 1995. Actual results may differ
materially from the projections discussed in Management's Discussion and
Analysis since such projections involve significant risks and uncertainties.
Factors that might cause such differences include, but are not limited to: (1)
timing of closing proposed acquisitions being delayed or such acquisitions being
prohibited; (2) competitive pressures among financial institutions increasing
significantly; (3) economic conditions, either nationally or locally in areas in
which Zions conducts its operations, being less favorable than expected; (4)
legislation or regulatory changes which adversely affect the ability of the
Company to conduct, or the accounting for, business combinations.


                                       54
<PAGE>   57
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA




                          Independent Auditors' Report



The Board of Directors and Shareholders
Zions Bancorporation:


We have audited the accompanying consolidated balance sheets of Zions
Bancorporation and subsidiaries as of December 31, 1997 and 1996, and the
related consolidated statements of income, retained earnings, and cash flows for
each of the years in the three-year period ended December 31, 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Zions Bancorporation
and subsidiaries as of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1997, in conformity with generally accepted accounting
principles.


                                                           KPMG Peat Marwick LLP

Salt Lake City, Utah
January 26, 1998


                                       55
<PAGE>   58
                      ZIONS BANCORPORATION AND SUBSIDIARIES

                           Consolidated Balance Sheets

                           December 31, 1997 and 1996

                      (In thousands, except share amounts)


<TABLE>
<CAPTION>
   

                                                                                               1997            1996
                                                                                            ----------      ----------
<S>                                                                                         <C>             <C>    
ASSETS                                                                                                             
    
Cash and due from banks                                                                     $  626,814         453,990
Money market investments:
      Interest-bearing deposits                                                                 61,871          47,746
      Federal funds sold                                                                       402,879         260,023
      Security resell agreements                                                               349,338         305,660
Investment securities:
      Held to maturity, at cost (approximate market value $2,162,588 and $1,484,754)         2,142,727       1,475,409
      Available for sale, at market                                                            485,686         474,158
      Trading account                                                                           83,681          34,076
Loans:
      Loans held for sale at cost, which approximates market                                   178,642         150,467
      Loans, leases, and other receivables                                                   4,735,783       3,727,223
                                                                                            ----------      ----------
                                                                                             4,914,425       3,877,690
      Less:
           Unearned income and fees, net of related costs                                       42,775          40,541
           Allowance for loan losses                                                            80,481          76,803
                                                                                            ----------      ----------
                          Net loans                                                          4,791,169       3,760,346
Premises and equipment                                                                         135,980         102,701
Goodwill and core deposit intangibles                                                          158,836          44,885
Other real estate owned                                                                          3,371             138
Other assets                                                                                   279,418         157,281
                                                                                            ----------      ----------
                          Total assets                                                      $9,521,770       7,116,413
                                                                                            ==========      ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
      Noninterest-bearing                                                                   $1,782,716       1,345,698
      Interest-bearing:
           Savings and money market                                                          3,478,275       2,710,312
           Time:
               Under $100,000                                                                1,001,710         708,077
               Over $100,000                                                                   408,717         241,313
           Foreign                                                                             183,044         114,292
                                                                                            ----------      ----------
                                                                                             6,854,462       5,119,692
Securities sold, not yet purchased                                                              45,067          76,831
Federal funds purchased                                                                        294,109         155,407
Security repurchase agreements                                                                 976,766         771,361
Accrued liabilities                                                                            166,776          90,668
Federal Home Loan Bank advances and other borrowings:
      Less than one year                                                                        59,883          14,349
      Over one year                                                                            210,681          81,875
Long-term debt                                                                                 258,566         251,620
                                                                                            ----------      ----------
                          Total liabilities                                                  8,866,310       6,561,803
                                                                                            ----------      ----------
Shareholders' equity:
      Capital stock:
           Preferred stock, without par value; authorized 3,000,000 shares; issued and
               outstanding, none                                                                  --              --
           Common stock, without par value; authorized 100,000,000 shares; issued and
               outstanding, 63,962,100 shares and 63,468,480 shares                            122,222         119,791
      Net unrealized gain (loss) on securities available for sale                                2,678          (1,807)
      Retained earnings                                                                        530,560         436,626
                                                                                            ----------      ----------
                          Total shareholders' equity                                           655,460         554,610
                                                                                            ----------      ----------
                                                                                            $9,521,770       7,116,413
                                                                                            ==========      ==========
</TABLE>


See accompanying notes to consolidated financial statements.


                                       56
<PAGE>   59
                      ZIONS BANCORPORATION AND SUBSIDIARIES

                        Consolidated Statements of Income

                  Years ended December 31, 1997, 1996, and 1995

                    (In thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                                        1997          1996           1995
                                                                                      --------      --------       --------
<S>                                                                                   <C>            <C>            <C>    
Interest income:
      Interest and fees on loans                                                      $401,284       314,695        251,521
      Interest on loans held for sale                                                   11,874        11,509          9,259
      Interest on money market investments                                              84,607        51,712         56,140
      Interest on securities:
           Held to maturity:
                Taxable                                                                112,930        76,631         66,165
                Nontaxable                                                              11,312        14,554         12,424
           Available for sale:
                Taxable                                                                 28,798        26,573         24,726
                Nontaxable                                                               2,090         2,260             21
           Trading account                                                              16,211         9,172          9,248
      Lease financing                                                                   13,190        11,885          9,991
                                                                                      --------      --------       --------
                  Total interest income                                                682,296       518,991        439,495
                                                                                      --------      --------       --------
Interest expense:
      Interest on savings and money market deposits                                    110,882        91,865         83,080
      Interest on time and foreign deposits                                             69,489        55,441         47,762
      Interest on borrowed funds                                                       150,126        82,519         75,106
                                                                                      --------      --------       --------
                  Total interest expense                                               330,497       229,825        205,948
                                                                                      --------      --------       --------
                  Net interest income                                                  351,799       289,166        233,547
Provision for loan losses                                                                6,175         4,640          3,000
                                                                                      --------      --------       --------
                  Net interest income after provision for loan losses                  345,624       284,526        230,547
                                                                                      --------      --------       --------
Noninterest income:
      Service charges on deposit accounts                                               43,732        35,195         28,884
      Other service charges, commissions, and fees                                      38,274        28,701         24,370
      Trust income                                                                       6,757         5,195          4,355
      Investment securities gain (loss), net                                               797           115           (148)
      Trading account income (loss)                                                      5,716         2,721         (1,247)
      Loan sales and servicing income                                                   38,768        35,128         24,254
      Other                                                                              9,123         7,215          8,343
                                                                                      --------      --------       --------
                  Total noninterest income                                             143,167       114,270         88,811
                                                                                      --------      --------       --------
Noninterest expense:
      Salaries and employee benefits                                                   159,973       129,708        105,527
      Occupancy, net                                                                    16,911        13,668         10,972
      Furniture and equipment                                                           23,695        17,133         13,486
      Other real estate expense (income)                                                   251          (298)            81
      Legal and professional services                                                    7,789         5,263          4,395
      Supplies                                                                           8,108         6,582          5,305
      Postage                                                                            6,823         5,658          5,190
      Advertising                                                                        7,380         5,789          5,276
      FDIC premiums                                                                        737            11          4,123
      Merger expense                                                                     2,707          --             --
      Amortization of goodwill and core deposit intangibles                              5,860         2,851          2,612
      Amortization of mortgage servicing assets                                          2,152         1,299          1,148
      Other                                                                             58,832        47,608         37,071
                                                                                      --------      --------       --------
                  Total noninterest expense                                            301,218       235,272        195,186
                                                                                      --------      --------       --------
Income before income taxes                                                             187,573       163,524        124,172
Income taxes                                                                            65,211        56,101         41,787
   
                                                                                      --------      --------       --------
    
                  Net income                                                          $122,362       107,423         82,385
                                                                                      ========      ========       ========
Weighted-average common and common-equivalent shares outstanding during the year        64,629        63,787         60,013
                                                                                      ========      ========       ========
Net income per common share:
      Basic                                                                           $   1.92          1.70           1.39
                                                                                      ========      ========       ========
      Diluted                                                                         $   1.89          1.68           1.37
                                                                                      ========      ========       ========
</TABLE>


See accompanying notes to consolidated financial statements 


                                       57
<PAGE>   60
                      ZIONS BANCORPORATION AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                  Years ended December 31, 1997, 1996, and 1995

                                 (In thousands)


<TABLE>
<CAPTION>
                                                                                 1997            1996            1995
                                                                            -------------   -------------   -------------
<S>                                                                         <C>             <C>             <C>   
Cash flows from operating activities:
      Net income                                                            $     122,362         107,423          82,385
      Adjustments to reconcile net income to net cash provided by
        operating activities:
             Provision for loan losses                                              6,175           4,640           3,000
             Write-downs of other real estate owned                                   324            --               180
             Depreciation of premises and equipment                                18,027          14,315          10,998
             Amortization of intangible assets                                      8,012           4,150           3,760
             Amortization of net premium/discount on investment securities          5,498           5,421           3,821
             Accretion of unearned income and fees, net of related costs            1,953           7,632           6,324
             Proceeds from sales of trading account securities                119,209,754      80,374,843     112,293,128
             Increase in trading account securities                          (119,259,359)    (80,345,212)   (112,157,509)
             Net loss (gain) on sales of investment securities                       (797)           (115)            148
             Proceeds from loans held for sale                                    742,244         664,327         440,245
             Increase in loans held for sale                                     (764,066)       (671,343)       (454,532)
             Net gain on sales of loans, leases, and other assets                 (27,948)        (26,866)        (16,195)
             Net gain on sales of other real estate owned                            (214)           (265)           (169)
             Change in accrued income taxes                                           677           4,677          (7,231)
             Change in accrued interest receivable                                (19,776)         (6,938)         (2,389)
             Change in other assets                                               (94,960)         18,181          (3,410)
             Change in accrued interest payable                                     4,360            (661)            890
             Change in accrued liabilities                                         70,398           5,067           7,279
                                                                            -------------   -------------   -------------
                  Net cash provided by operating activities                        22,664         159,276         210,723
                                                                            -------------   -------------   -------------
Cash flows from investing activities:
      Net decrease (increase) in money market investments                        (186,534)         97,897        (241,328)
      Proceeds from sales of investment securities held to maturity                  --              --             6,950
      Proceeds from maturities of investment securities held to maturity          982,883         377,736         291,157
      Purchases of investment securities held to maturity                      (1,626,404)       (667,657)       (342,874)
      Proceeds from sales of investment securities available for sale             282,383         133,590         192,071
      Proceeds from maturities of investment securities available for sale        100,180         134,401         302,443
      Purchases of investment securities available for sale                      (315,014)       (303,745)       (472,171)
      Proceeds from sales of loans and leases                                     968,717         765,341         627,855
      Net increase in loans and leases                                         (1,510,682)     (1,422,625)     (1,013,932)
      Purchases of assets to be leased                                               --            (8,514)           --
      Principal collections on leveraged leases                                     5,748            --                38
      Proceeds from sales of premises and equipment                                 2,850             806             726
      Purchases of premises and equipment                                         (38,562)        (22,303)        (17,963)
      Proceeds from sales of other real estate owned                                3,317           1,594           1,899
      Proceeds from sales of mortgage-servicing rights                              1,771           1,339           1,547
      Purchases of mortgage-servicing rights                                       (3,123)         (1,625)           (423)
      Proceeds from sales of other assets                                             415             773             479
      Purchase of other assets                                                       --           (18,887)           (218)
      Cash paid for acquisition, net of cash received                             (33,273)          3,540           1,568
                                                                            -------------   -------------   -------------
                  Net cash used in investing activities                        (1,365,328)       (928,339)       (662,176)
                                                                            -------------   -------------   -------------
Cash flows from financing activities:
      Net increase in deposits                                                  1,185,585         494,514         352,321
      Net change in short-term funds borrowed                                     349,884         138,733         252,083
      Proceeds from FHLB advances over one year                                   180,000           4,201            --
      Payments on FHLB advances over one year                                     (56,194)        (18,143)        (16,861)
      Payments on leveraged leases                                                 (5,748)           --              --
      Proceeds from issuance of long-term debt                                      7,500         200,000            --
      Payments on long-term debt                                                     (554)         (4,969)         (1,953)
      Proceeds from issuance of common stock                                        3,168           1,178           1,291
      Payments to redeem common stock                                            (119,725)        (21,635)        (18,523)
      Dividends paid                                                              (28,428)        (25,033)        (20,592)
                                                                            -------------   -------------   -------------
                  Net cash provided by financing activities                     1,515,488         768,846         547,766
                                                                            -------------   -------------   -------------
Net increase (decrease) in cash and due from banks                                172,824            (217)         96,313
Cash and due from banks at beginning of year                                      453,990         454,207         357,894
   
                                                                            -------------   -------------   -------------
    
Cash and due from banks at end of year                                      $     626,814         453,990         454,207
                                                                            =============   =============   =============
</TABLE>


See accompanying notes to consolidated financial statements.


                                       58
<PAGE>   61
                      ZIONS BANCORPORATION AND SUBSIDIARIES

                  Consolidated Statements of Retained Earnings

                  Years ended December 31, 1997, 1996, and 1995

                                 (In thousands)


<TABLE>
<CAPTION>
                                                                                  1997        1996        1995
                                                                               ---------   ---------   ---------
<S>                                                                            <C>         <C>         <C>    
Balance at beginning of year                                                   $ 436,626     354,236     292,443
Net income                                                                       122,362     107,423      82,385
Cash dividends:
      Preferred, paid by subsidiaries to minority shareholders                       (41)        (36)        (38)
      Common, per share of $.4700 in 1997, $.4250 in 1996, and $.3525 in 1995    (28,387)    (24,997)    (20,554)
   
                                                                               ---------   ---------   ---------
    
Balance at end of year                                                         $ 530,560     436,626     354,236
                                                                               =========   =========   =========
</TABLE>


See accompanying notes to consolidated financial statements.


                                       59
<PAGE>   62
                      ZIONS BANCORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                  Years ended December 31, 1997, 1996, and 1995


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Basis of Financial Statement Presentation - The consolidated financial
statements include the accounts of Zions Bancorporation and its subsidiaries
(the Company). All significant intercompany accounts and transactions have been
eliminated in consolidation. Certain prior year amounts have been reclassified
to conform to the 1997 presentation. Prior year amounts have also been restated
for a significant acquisition accounted for under the pooling of interest
method. (See Note 2)

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

Security Resell Agreements - Security resell agreements represent overnight and
term agreements, the majority maturing within 30 days. Either the Company or, in
some instances, third parties on behalf of the Company take possession of
underlying securities. The market value of such securities is monitored
throughout the contract term to ensure that asset value remains sufficient to
protect against counterparty default. Security resell agreements averaged
approximately $1,321,763,000 during 1997, and the maximum amount outstanding at
any month-end during 1997 was $1,675,714,000.

Investment Securities - The Company classifies its investment securities in one
of three categories: trading, available for sale, or held to maturity. Trading
securities are bought and held principally for the purpose of selling them in
the near term. Held to maturity securities are those securities which the
Company has the ability and intent to hold until maturity. All other securities
not included in trading or held to maturity are classified as available for
sale.

Trading securities (including futures and options used to hedge trading
positions against interest rate risk) and available for sale securities are
recorded at fair value. Held to maturity securities are recorded at cost,
adjusted for the amortization or accretion of premiums or discounts. Unrealized
holding gains and losses on trading securities are included in earnings.
Unrealized holding gains and losses, net of related tax effect, on available for
sale securities are excluded from earnings and are reported as a separate
component of shareholders' equity until realized. Transfers of securities
between categories are recorded at fair value at the date of transfer.
Unrealized holding gains and losses are recognized in earnings for transfers
into trading securities. Unrealized holding gains or losses associated with
transfers of securities from held to maturity to available for sale are recorded
as a separate component of shareholders' equity. The unrealized holding gains or
losses included in the separate component of equity for securities transferred
from available for sale to held to maturity are maintained and amortized into
earnings over the remaining life of the security as an adjustment to yield in a
manner consistent with the amortization or accretion of premium or discount on
the associated security.


                                       60
<PAGE>   63
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

A decline in the market value of any available for sale or held to maturity
security below cost that is deemed other than temporary is charged to earnings
resulting in the establishment of a new cost basis for the security.

Premiums and discounts are amortized or accreted over the life of the related
held to maturity security as an adjustment to yield using the effective-interest
method. Dividend and interest income are recognized when earned. Realized gains
and losses for securities classified as available for sale and held to maturity
are included in earnings and are derived using the specific-identification
method of determining the cost of securities sold.

Loan Fees - Nonrefundable fees and related direct costs associated with the
origination of loans are deferred. The net deferred fees and costs are
recognized in interest income over the loan term using methods that generally
produce a level yield on the unpaid loan balance. Other nonrefundable fees
related to lending activities other than direct loan origination are recognized
as other operating income over the period the related service is provided.
Bankcard discounts and fees charged to merchants for processing transactions
through the Company are shown net of interchange discounts and fees expense and
are included in other service charges, commissions, and fees.

Mortgage Servicing Rights and Amortization - Mortgage servicing rights are
accounted for under the provisions of Statement of Financial Accounting
Standards (Statement) No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities, which became effective
January 1, 1997. Statement No. 125 superseded Statement No. 122, Accounting for
Mortgage Servicing Rights, but did not significantly change the methodology used
to account for servicing rights. The Company adopted Statement No. 122 as of
January 1, 1996 and at that time began capitalizing originated servicing rights.
The adoption did not have a material impact on financial position or results of
operations. Prior to 1996, capitalization was limited to purchased servicing.
The total cost of loans originated or purchased is allocated between loans and
servicing rights based on the relative fair values of each. The servicing rights
capitalized are amortized in proportion to and over the period of estimated
servicing income. Management stratifies servicing rights based on origination
period and interest rate and evaluates the recoverability in relation to the
impact of actual and anticipated loan portfolio prepayment, foreclosure and
delinquency experience.

Statement No. 122 also requires that all capitalized mortgage servicing rights
(MSRs) be evaluated for impairment based on the excess of the carrying amount of
MSRs over their fair value. For purposes of measuring impairment, MSRs are
stratified on the basis of interest rate, type of interest rate (fixed or
variable), and the type of loan (conventional or government).

Allowance for Loan Losses - The allowance for loan losses is based on
management's periodic evaluation of the loan portfolio and reflects an amount
that, in management's opinion, is adequate to absorb losses in the existing
portfolio. In evaluating the portfolio, management takes into consideration
numerous factors, including current economic conditions, prior loan loss
experience, the composition of the loan portfolio, and management's estimate of
anticipated credit losses. Management believes that the allowance for loan
losses is adequate. While management uses available information to recognize
losses on loans, future additions to the allowance may be necessary based on
changes in economic conditions. 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
additions to the allowance based on their judgments using information available
to them at the time of their examination.


                                       61
<PAGE>   64
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impaired Loans - The Company considers a loan to be impaired when the accrual of
interest has been discontinued and based upon other criteria under the
statements. The amount of the impairment is measured based on the present value
of expected cash flows, the observable market price of the loan, or the fair
value of the collateral. An allowance for impairment losses is included in the
allowance for loan losses through a provision for loan losses. The Company
primarily uses a cost recovery accounting method to recognize interest income on
impaired loans.

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

Nonperforming Assets - Nonperforming assets are comprised of loans for which the
accrual of interest has been discontinued, loans for which the terms have been
renegotiated to less than market rates due to a weakening of the borrower's
financial condition (restructured loans), and other real estate acquired
primarily through foreclosure that is awaiting disposition.

Loans are generally placed on a nonaccrual status when principal or interest is
past due 90 days or more unless the loan is both well secured and in the process
of collection, or when in the opinion of management, full collection of
principal or interest is unlikely. Generally, consumer loans are not placed on a
nonaccrual status, inasmuch as they are generally charged off when they become
120 days past due.

Other real estate owned is carried at the lower of cost or net realizable value.
Real estate may be considered to be in-substance foreclosed and included herein
when specific criteria are met. When property is acquired through foreclosure,
or substantially foreclosed, any excess of the related loan balance over net
realizable value is charged to the allowance for loan losses. Subsequent write
downs or losses upon sale, if any, are charged to other real estate expense.

Goodwill and Core Deposit Intangibles - The Company assesses the recoverability
of these intangible assets by determining whether the amortization of the
balance over its remaining life can be recovered through future operating cash
flows of the acquired operation. The amount of goodwill impairment, if any, is
measured based on projected future operating cash flows using a discount rate
reflecting the Company's average cost of funds. Goodwill and core deposit
intangibles are amortized using the straight-line method over 25 and 10 year
periods, respectively.

Off-Balance Sheet Financial Instruments - In the ordinary course of business,
the Company has entered into off-balance sheet financial instruments consisting
of commitments to extend credit, commercial letters of credit, and standby
letters of credit. Such financial instruments are recorded in the consolidated
financial statements when they become payable. The credit risk associated with
these commitments is considered in management's determination of the allowance
for such items.


                                       62
<PAGE>   65
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Interest Rate Exchange Contracts and Cap and Floor Agreements - The Company
enters into interest rate exchange contracts (swaps) and cap and floor
agreements as part of its overall asset and liability duration and interest rate
risk management strategy. The objective of these financial instruments is to
match estimated repricing periods of interest-sensitive assets and liabilities
in order to reduce interest rate exposure and or manage desired asset and
liability duration. With the exception of interest rate caps, these instruments
are used to hedge asset and liability portfolios and, therefore, are not marked
to market. Fees associated with these financial instruments are accreted into
interest income or amortized to interest expense on a straight-line basis over
the lives of the contracts and agreements. Gains or losses on early termination
of a swap are amortized on the remaining term of the contract when the
underlying assets or liabilities still exist. Otherwise, such gains or losses
are fully recorded as income or expense at the termination of the contract. The
net interest received or paid on these contracts is reflected on a current basis
in the interest income or expense related to the hedged obligation or asset.

Statement of Cash Flows- The Company paid interest of $332.5 million, $230.0
million, and $205.5 million, respectively, and income taxes of $61.6 million,
$46.4 million, and $45.9 million, respectively, for the years ended December 31,
1997, 1996, and 1995. Loans transferred to other real estate owned totaled $6.6
million, $.4 million, and $1.2 million, respectively, for the years ended
December 31, 1997, 1996, and 1995.

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

The exercise of stock options under the Company's nonqualified stock option
plan, during 1997 and 1996, resulted in tax benefits reducing the Company's
current income tax payable and increasing common stock in the amounts of $1.2
million and $.6 million in 1997 and 1996, respectively.

Pension and Other Postretirement Plans - The Company has a defined benefit
pension plan covering substantially all of its employees. The benefits are based
on years of service and employees' compensation levels. The cost of this program
is being funded currently. The Company sponsors a defined benefit health care
plan for substantially all retirees and employees. The Company has other trustee
retirement plans covering all qualified employees who have at least one year of
service.

Trust Assets - Assets held by the Company in a fiduciary or agency capacity for
customers are not included in the consolidated financial statements as such
items are not assets of the Company.

Stock Options - The Company's stock-based compensation plans are accounted for
under the provisions of Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees, and related interpretations. Statement No. 123,
Stock-Based Compensation, issued in 1995, allows a company to recognize
stock-based compensation using a fair value based method of accounting if it so
elects. The Company has elected not to adopt the recognition provisions of
Statement No. 123.


                                       63
<PAGE>   66
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Net Income Per Common Share - Diluted net income per common share is based on
the weighted-average outstanding common shares during each year, including
common stock equivalents. Net income per common share is based on the
weighted-average outstanding common shares during each year.

Stock Split - On April 25, 1997, the Company's Board of Directors approved a
four-for-one split of the common stock. This action was effective on May 14,
1997 for shareholders of record as of May 9, 1997. A total of 43,347,903 shares
of common stock were issued. All references to the number of common shares and
per common share amounts have been restated to reflect the split.

Accounting Standards Not Adopted - In June 1997, the Financial Accounting
Standards Board issued Statement No. 130, Reporting Comprehensive Income. This
statement establishes standards for reporting the components of comprehensive
income and requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be included in a
financial statement that is displayed with the same prominence as other
financial statements. Comprehensive income includes net income as well as
certain items that are reported directly within a separate component of
stockholders' equity and bypass net income. The provisions of this statement are
effective beginning with 1998 interim reporting. These disclosure requirements
will have no impact on financial position or results of operations.

In June 1997, the Financial Accounting Standards Board issued Statement No. 131,
Disclosures about Segments of an Enterprise and Related Information. The
provisions of this statement require disclosure of financial and descriptive
information about an enterprise's operating segments in annual and interim
financial reports issued to shareholders. The statement defines an operating
segment as a component of an enterprise that engages in business activities that
generate revenue and incur expense, whose operating results are reviewed by the
chief operating decision maker in the determination of resource allocation and
performance, and for which discrete financial information is available. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. This statement is effective for fiscal
years beginning after December 15, 1997, however, it is not required to be
applied for interim reporting in the initial year of application.


2.    MERGERS AND ACQUISITIONS

On May 16, 1997, the Company acquired Aspen Bancshares, Inc. in Colorado, and
its banking subsidiaries, Pitkin County Bank and Trust, Centennial Savings Bank,
F.S.B. and Valley National Bank of Cortez for 2,750,594 shares of common stock.
This acquisition was not significant to the Company's consolidated financial
statements and was accounted for as a purchase.

On July 11, 1997, the Company acquired Tri-State Bank in Idaho for 253,955
shares of common stock. Tri-State was subsequently merged into Zions
Bancorporation's wholly-owned subsidiary Zions First National Bank. The
acquisition was not significant to the Company's consolidated financial
statements and was accounted for as a pooling of interests.

On July 18, 1997, the Company acquired 27 Wells Fargo Bank Offices in Arizona,
Nevada, and Utah and on September 20, 1997, the Company acquired 4 additional
Wells Fargo Branches in Utah. The acquisitions were not significant to the
consolidated financial statements and were accounted for as purchases.


                                       64
<PAGE>   67
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


2.    MERGERS AND ACQUISITIONS (continued)

On October 17, 1997, the Company acquired Sun State Capital Corporation in
Nevada and merged its subsidiary, Sun State Bank, into the Company's
wholly-owned subsidiary, Nevada State Bank. The Company issued 584,236 shares of
common stock and paid $16.1 million in cash in the acquisition. The acquisition
was not significant and was accounted for as a purchase.

On November 14, 1997, the Company acquired GB Bancorporation and its banking
subsidiary Grossmont Bank, in San Diego, California for 4,702,048 shares of
common stock. The merger was accounted for as a pooling of interests. GB
Bancorporation's total assets were approximately $814 million on the acquisition
date. Total interest and noninterest income and net income of GB Bancorporation
for the year ended December 31, 1996 were $43,412,000 and $6,073,000,
respectively. The Company's total interest and noninterest income and net
income, prior to restatement for the acquisition of GB Bancorporation, were
$589,849,000 and $101,350,000, respectively, for the year ended December 31,
1996. Total GB Bancorporation interest and noninterest income and net income for
the period January 1 through November 14, 1997 were $52,254,000 and $8,447,000,
respectively. Total interest and noninterest income and net income of GB
Bancorporation for the year ended December 31, 1997 were $61,608,000 and
$10,530,000, respectively. The acquisition was considered significant and prior
year amounts have been restated.

On January 6, 1998, the Company acquired Vectra Banking Corporation and its
banking subsidiary Vectra Bank located in Denver, Colorado for 4,021,303 shares
of common stock. Vectra Banking Corporation had total assets of approximately
$728 million (unaudited) at the date of acquisition. This transaction will be
accounted for as a pooling of interests.

On January 23, 1998, the Company acquired Sky Valley Bank Corp. in Alamosa,
Colorado, and its banking subsidiary, The First National Bank in Alamosa for
572,817 shares of common stock. Sky Valley Bank Corp. had total assets of
approximately $122 million (unaudited) at the date of acquisition. The
acquisition will be accounted for as a pooling of interests.

On September 4, 1997, the Company announced the definitive agreement to acquire
Tri-State Finance Corporation and its banking subsidiary Tri-State Bank in
Denver, Colorado in exchange for Zions Bancorporation common stock. As of
December 31, 1997, Tri-State Finance Corporation had total assets of
approximately $128 million (unaudited). The transaction is intended to be
accounted for as a pooling of interests, and is expected to close in the first
quarter of 1998.

On December 22, 1997, the Company announced a definitive agreement had been
reached to acquire SBT Bankshares, Inc. in Colorado Springs, Colorado, and its
banking subsidiary State Bank and Trust of Colorado Springs in exchange for
Zions Bancorporation common stock. At December 31, 1997, SBT Bankshares, Inc.
had total assets of approximately $86 million (unaudited). The transaction is
intended to be accounted for as a pooling of interests and is expected to close
in the second quarter of 1998.

On December 29, 1997, the Company announced a definitive agreement had been
reached to acquire FP Bancorp, Inc. in Escondido, California, and its banking
subsidiary First Pacific National Bank in exchange for Zions Bancorporation
common stock. Total assets of FP Bancorp, Inc. were approximately $353 million
(unaudited) as of December 31, 1997. This transaction is intended to be
accounted for as a pooling of interests and is expected to close in the second
quarter of 1998.


                                       65
<PAGE>   68
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


2.    MERGERS AND ACQUISITIONS (continued)

On January 22, 1998, the Company announced a definitive agreement to acquire
Routt County National Bank Corporation in Steamboat Springs, Colorado, and its
banking subsidiary First National Bank of Colorado in exchange for Zions
Bancorporation common stock. As of December 31, 1997, Routt County National Bank
Corporation had total assets of approximately $93 million (unaudited). This
transaction is intended to be accounted for as a pooling of interests and is
expected to close in the second quarter of 1998.


3.    INVESTMENT SECURITIES

Investment securities as of December 31, 1997, are summarized as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                             Held to maturity
                                                              ----------------------------------------------
                                                                             Gross      Gross     Estimated
                                                              Amortized   unrealized  unrealized    market
                                                                 cost        gains      losses      value
                                                              ----------  ----------  ----------  ----------
<S>                                                           <C>         <C>         <C>         <C>    
U.S. government agencies and corporations:
        Small Business Administration loan-backed securities  $  440,615       8,728         476     448,867
        Other agency securities                                1,409,835       6,844       1,079   1,415,600
States and political subdivisions                                210,675       5,384         808     215,251
Mortgage-backed securities                                        81,602       1,319          51      82,870
                                                              ----------  ----------  ----------  ----------
                                                              $2,142,727      22,275       2,414   2,162,588
                                                              ==========  ==========  ==========  ==========
</TABLE>


<TABLE>
<CAPTION>
                                                                   Available for sale
                                                 ----------------------------------------------------
                                                                  Gross        Gross       Estimated
                                                 Amortized     unrealized    unrealized      market
                                                    cost          gains        losses        value
                                                 ----------    ----------    ----------    ----------
<S>                                              <C>           <C>           <C>           <C>    
U.S. Treasury securities                         $   31,387           319          --          31,706
U.S. government agencies                            169,767           171         3,329       166,609
State and political subdivisions                     25,858         1,082             8        26,932
Mortgage- and other asset-backed securities          27,815           468            35        28,248
                                                 ----------    ----------    ----------    ----------

                                                    254,827         2,040         3,372       253,495
Equity securities:
      Mutual funds:
           Accessor Funds, Inc.                     109,530         1,456            28       110,958
      Federal Home Loan Bank stock                   90,537          --            --          90,537
      Other stock                                    26,459         4,273            36        30,696
   
                                                 ----------    ----------    ----------    ----------
    
                                                 $  481,353         7,769         3,436       485,686
                                                 ==========    ==========    ==========    ==========
</TABLE>

Investment securities as of December 31, 1996, are summarized as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                                    Held to maturity
                                                                  ----------------------------------------------------
                                                                                   Gross        Gross       Estimated
                                                                  Amortized     unrealized    unrealized      market
                                                                     cost          gains        losses        value
                                                                  ----------    ----------    ----------    ----------
<S>                                                               <C>           <C>           <C>           <C>    
U.S. Treasury securities                                          $   29,573           230            24        29,779
U.S. government agencies and corporations:
        Small Business Administration loan-backed securities         487,748         5,269         1,232       491,785
        Other agency securities                                      629,271         2,292         2,409       629,154
States and political subdivisions                                    260,963         5,136           938       265,161
Mortgage-backed securities                                            67,854         1,143           122        68,875
                                                                  ----------    ----------   -----------    ----------
                                                                  $1,475,409        14,070         4,725     1,484,754
                                                                  ==========    ==========    ==========    ==========
</TABLE>


                                       66
<PAGE>   69
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


3.    INVESTMENT SECURITIES (continued)


<TABLE>
<CAPTION>
                                                                   Available for sale
                                                 ----------------------------------------------------
                                                                  Gross        Gross       Estimated
                                                 Amortized     unrealized    unrealized      market
                                                    cost          gains        losses        value
                                                 ----------    ----------    ----------    ----------
<S>                                              <C>           <C>           <C>           <C>    
U.S. Treasury securities                         $   19,580            54             8        19,626
U.S. government agencies                            135,530           330         4,397       131,463
State and political subdivisions                     39,118         1,652             4        40,766
Mortgage- and other asset-backed securities          86,007           722         1,864        84,865
                                                 ----------    ----------    ----------    ----------

                                                    280,235         2,758         6,273       276,720
Equity securities:
      Mutual funds:
           Accessor Funds, Inc.                     109,071           390           361       109,100
      Federal Home Loan Bank stock                   79,593          --            --          79,593
      Other stock                                     8,168           577          --           8,745
                                                 ----------   -----------    ----------   -----------
                                                 $  477,067         3,725         6,634       474,158
                                                 ==========    ==========    ==========    ==========
</TABLE>

The change in net unrealized holding gains (losses) on securities available for
sale for the years ended December 31, 1997, 1996, and 1995, was $4,485,000,
($3,772,000), and $7,831,000, respectively, after related tax effect. These
gains (losses) are collectively reported as a separate component of
shareholders' equity with December 31, 1997 and 1996, balances of $2,678,000 and
($1,807,000), respectively, after related tax effect.

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

<TABLE>
<CAPTION>
                                                 Held to maturity              Available for sale
                                            --------------------------     ---------------------------
                                                            Estimated                       Estimated
                                            Amortized         market        Amortized         market
                                               cost           value            cost            value
                                            ----------      ----------      ----------      ----------
<S>                                         <C>             <C>             <C>             <C>   
Due in one year or less                     $  148,359         149,776          73,111          72,824
Due after one year through five years          803,195         811,934         117,302         116,834
Due after five years through ten years       1,025,697       1,033,464          44,452          44,328
Due after ten years                            165,476         167,414          19,962          19,509
                                            ----------      ----------      ----------      ----------
                                            $2,142,727       2,162,588         254,827         253,495
                                            ==========      ==========      ==========      ==========
</TABLE>

Gross gains of $8,996,000, $372,000, and $1,129,000 and gross losses of
$8,199,000, $257,000, and $1,277,000 were realized on sales and write downs of
investment securities for the years ended December 31, 1997, 1996, and 1995,
respectively.

As of December 31, 1997 and 1996, securities with an amortized cost of
$744,339,000 and $605,114,000, respectively, were pledged to secure public and
trust deposits, advances, and for other purposes as required by law.


                                       67
<PAGE>   70
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


4. LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are summarized as follows (in thousands):
<TABLE>
<CAPTION>
                                                      1997            1996
                                                   ----------      ----------
<S>                                                <C>                <C>    
Loans held for sale                                $  178,642         150,467
Commercial, financial, and agricultural             1,216,591         904,076
Real estate:                                     
      Construction                                    482,907         346,796
      Other                                         2,342,450       1,969,595
Consumer                                              450,422         334,764
Lease financing                                       176,419         159,825
Other receivables                                      66,994          12,167
                                                   ----------      ----------
                                                   $4,914,425       3,877,690
                                                   ==========      ==========
</TABLE>

As of December 31, 1997 and 1996, loans with a carrying value of $153,661,000
and $73,661,000, respectively, were pledged as security for Federal Home Loan
Bank advances.

During 1997, 1996, and 1995, sales of loans held for sale totaled $733 million,
$654 million, and $437 million, respectively. Consumer and other loan
securitizations totaled $951 million in 1997, $743 million in 1996, and $615
million in 1995, and relate primarily to loans sold under revolving
securitization structures. Gain on the sales, excluding servicing, of both loans
held for sale and loan securitizations amounted to $26.7 million in 1997, $24.4
million in 1996, and $14.0 million in 1995. Income related to securitizations is
recognized on the basis of cash flows received from the securitized assets,
which does not differ materially from immediate gain recognition.

The allowance for loan losses is summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                       1997           1996           1995
                                                     --------       --------       --------
<S>                                                  <C>            <C>            <C>   
Balance at beginning of year                         $ 76,803         73,437         67,018
Allowance for loan losses of companies acquired         5,544          2,566          6,202
Additions:
      Provision for loan losses                         6,175          4,640          3,000
      Recoveries                                        6,316          6,083          5,900
Deductions:
      Loan charge-offs                                (14,357)        (9,923)        (8,683)
                                                     --------       --------       --------
Balance at end of year                               $ 80,481         76,803         73,437
                                                     ========       ========       ========
</TABLE>

At December 31, 1997, 1996, and 1995, the allowance for loan losses includes an
allocation of $8,852,000, $6,218,000, and $7,954,000, respectively, related to
commitments to extend credit and standby letters of credit.


                                       68
<PAGE>   71
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


4.    LOANS AND ALLOWANCE FOR LOAN LOSSES (continued)

Nonperforming loans, leases, and related interest foregone are summarized as
follows (in thousands):


<TABLE>
<CAPTION>
                                     1997         1996         1995
                                   -------      -------      -------
<S>                                <C>          <C>          <C>   
Nonaccrual loans and leases        $11,907       12,704       10,875
Restructured loans and leases          691          857          249
                                   -------      -------      -------
        Total                      $12,598       13,561       11,124
                                   =======      =======      =======
Contractual interest due           $ 1,250        1,453        1,100
Interest recognized                    809          720          474
                                   -------      -------      -------
        Net interest foregone      $   441          733          626
                                   =======      =======      =======
</TABLE>

The Company's total recorded investment in impaired loans included in nonaccrual
loans and leases above, amounted to $7,117,000 and $7,752,000 as of December 31,
1997 and 1996, respectively. Included in the allowance for loan losses as of
December 31, 1997 and 1996, is a required allowance of $46,000 and $25,000,
respectively, on $290,000 and $1,030,000, respectively, of the recorded
investment in impaired loans. Contractual interest due and interest foregone on
impaired loans, both included in the calculations for nonperforming loans and
leases above, totaled $554,000 and $204,000, respectively, for the year ended
December 31, 1997, and $846,000 and $372,000, respectively, for the year ended
December 31, 1996. The average recorded investment in impaired loans amounted to
$6,421,000 in 1997 and $5,450,000 in 1996.


5.    CONCENTRATIONS OF CREDIT RISK

Credit risk represents the accounting loss that would be recognized at the
reporting date if counterparties failed completely to perform as contracted.
Concentrations of credit risk (whether on- or off-balance sheet) that arise from
financial instruments exist for groups of customers or counterparties when they
have similar economic characteristics that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic or other
conditions. The Company does not have significant exposure to any individual
customer or counterparty.

Most of the Company's business activity is with customers located within the
states of Utah, Idaho, Nevada, Arizona, Colorado, and California. The commercial
loan portfolio is well diversified, consisting of approximately 11 industry
classification groupings. As of December 31, 1997, the larger concentrations of
risk in the commercial loan and leasing portfolio are represented by the real
estate and construction, business services and transportation, manufacturing,
and retail industry groupings, which comprise approximately 29 percent, 19
percent, 9 percent, and 7 percent, respectively, of the portfolio. The Company
has minimal credit exposure from lending transactions with highly leveraged
entities and has no foreign loans.


                                       69
<PAGE>   72
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


6.    PREMISES AND EQUIPMENT

The following table presents comparative data for premises and equipment (in
thousands):


<TABLE>
<CAPTION>
                                      1997          1996
                                    --------      --------
<S>                                 <C>           <C>   
Land                                $ 27,651        21,065
Buildings                             74,313        57,292
Furniture and Equipment              125,378        99,764
Leasehold Improvements                15,342        13,204
                                    --------      --------
    Total                            242,684       191,325
 Less accumulated depreciation
    and amortization                 106,704        88,624
                                    --------      --------
                                    $135,980       102,701
                                    ========      ========
</TABLE>

Depreciation and amortization expense totaled $18.0 million, $14.3 million and
$11.0 million in 1997, 1996 and 1995, respectively.


7.    MORTGAGE SERVICING RIGHTS

Mortgage servicing rights are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                    1997           1996           1995
                                  --------       --------       --------
<S>                               <C>               <C>            <C>  
Balance at beginning of year      $  5,447          2,023          2,748
Additions                            7,300          4,723            423
Amortization                        (2,152)        (1,299)        (1,148)
                                  --------       --------       --------
Balance at end of year            $ 10,595          5,447          2,023
                                  ========       ========       ========
</TABLE>

At December 31, 1997 and 1996, the estimated fair value of mortgage servicing
rights was $14.2 million and $8.9 million, respectively. Fair value is
determined by discounting net estimated cash flows from mortgage servicing
activities using discount rates, current market rates, and estimated prepayment
rates among other assumptions. The Company did not incur any impairment of
mortgage rights.


8.    DEPOSITS

Deposits are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                         1997            1996
                                      ----------      ----------
<S>                                   <C>              <C>      
Noninterest-bearing                   $1,782,716       1,345,698
Interest-bearing:
      Savings and NOW                    812,019         630,568
      Money market and super NOW       2,666,256       2,079,744
      Time under $100,000              1,001,710         708,077
      Time over $100,000                 408,717         241,313
      Foreign                            183,044         114,292
                                      ----------      ----------
                                      $6,854,462       5,119,692
                                      ==========      ==========
</TABLE>


                                       70
<PAGE>   73
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


8.    DEPOSITS (continued)

Interest expense on deposits is summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                          1997          1996          1995
                                        --------      --------      --------
<S>                                     <C>           <C>           <C>   
Savings and money market deposits:
      Savings and NOW                   $ 21,492        19,924        22,705
      Money market and super NOW          89,390        71,941        60,375
                                        --------      --------      --------
                                        $110,882        91,865        83,080
                                        ========      ========      ========
Time deposits:
      Under $100,000                    $ 45,070        37,838        32,653
      Over $100,000                       18,065        12,212         7,930
Foreign                                    6,354         5,391         7,179
                                        --------      --------      --------
                                        $ 69,489        55,441        47,762
                                        ========      ========      ========
</TABLE>

At December 31, 1997, the scheduled maturities of time deposits are as follows
(in thousands):

<TABLE>
<S>                                         <C>       
            1998                            $1,089,353
            1999                               176,053
            2000                                91,076
            2001                                24,966
            2002 and thereafter                 28,979
                                            ----------
                                            $1,410,427
                                            ==========
</TABLE>


9.    SECURITY REPURCHASE AGREEMENTS

Security repurchase agreements represent funds borrowed on a short-term basis
through the sale of securities to counterparties under agreements to repurchase
the same securities. The Company participates in overnight and term repurchase
agreements. Most of the overnight agreements are performed with sweep accounts
in conjunction with a master repurchase agreement. In this case, securities are
pledged for and interest is paid on the collected balance of the customers'
accounts. The average interest rates pertaining to outstanding repurchase
agreements at December 31, 1997 were 5.8 percent for U.S. Treasuries, 4.9
percent for U.S. government agencies, and 5.2 percent for Small Business
Administration pools. The average interest rates at December 31, 1996 were 5.8
percent for U.S. Treasuries, and 5.1 percent for U.S. government agencies, Small
Business Administration pools, and mortgage - and other asset-backed securities.

Repurchase agreements as of December 31, 1997 are summarized as follows (in
thousands):


<TABLE>
<CAPTION>
                                                                                   Market value
                                            Carrying      Accrued        Total     of underlying
                                             amount       interest     liability      assets
                                          -----------   -----------   -----------  -------------
<S>                                       <C>           <C>           <C>          <C>   
U.S. Treasuries:
      On demand                           $    25,770            10        25,780        25,604
      Up to 30 days                           198,228            80       198,308       197,208
      30 to 60 days                             2,940            31         2,971         2,868
                                          -----------   -----------   -----------   -----------
                                              226,938           121       227,059       225,680

U.S. government agencies - overnight          748,291            98       748,389       763,691
SBA pools - on demand                           1,537            10         1,547         2,140
                                          -----------   -----------   -----------   -----------
                  Total                   $   976,766           229       976,995       991,511
                                          ===========   ===========   ===========   ===========
</TABLE>


                                       71
<PAGE>   74
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


9.    SECURITY REPURCHASE AGREEMENTS (continued)

Repurchase agreements as of December 31, 1996 are summarized as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                                 Market value
                                         Carrying       Accrued       Total     of underlying
                                          amount       interest     liability       assets
                                       -----------   -----------   -----------  ------------
<S>                                    <C>           <C>           <C>          <C>    
U.S. Treasuries:
      Overnight                        $   156,909            30       156,939       157,014
      On demand                             28,000             9        28,009        27,712
      Up to 30 days                          1,335             2         1,337         1,315
      30 to 60 days                         13,011            84        13,095        13,042
                                       -----------   -----------   -----------   -----------
                                           199,255           125       199,380       199,083
U.S. government agencies:
      Overnight                            375,672            45       375,717       375,914
      On demand                              2,263           117         2,380         2,060
      30 to 60 days                          1,903            33         1,936         1,956
                                       -----------   -----------   -----------   -----------
                                           379,838           195       380,033       379,930
SBA pools:
      Overnight                            177,352            21       177,373       177,824
      On demand                             14,056           583        14,639        14,253
                                       -----------   -----------   -----------   -----------
                                           191,408           604       192,012       192,077
Mortgage- and other asset-
    backed securities - overnight              860          --             860           860
                                       -----------   -----------   -----------   -----------
                  Total                $   771,361           924       772,285       771,950
                                       ===========   ===========   ===========   ===========
</TABLE>

The average amount of outstanding repurchase agreements was approximately
$1,837,795,000 during 1997, and the maximum amount outstanding at any month-end
during 1997 was approximately $2,219,006,000.


10.   INCOME TAXES

Income taxes are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                      1997         1996         1995
                    -------      -------      -------
<S>                 <C>          <C>          <C>   
Federal:
      Current       $54,168       43,050       32,988
      Deferred        2,939        4,695        2,856
State                 8,104        8,356        5,943
                    -------      -------      -------
                    $65,211       56,101       41,787
                    =======      =======      =======
</TABLE>

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

<TABLE>
<CAPTION>
                                                    1997           1996           1995
                                                  --------       --------       --------
<S>                                               <C>            <C>            <C>   
Income tax expense at statutory federal rate      $ 65,651         57,336         43,460
State income tax, net                                5,268          5,430          3,863
Nondeductible expenses                               2,832          1,611          1,159
Nontaxable interest                                 (5,720)        (5,881)        (4,317)
Tax credits                                         (1,826)        (1,597)        (1,446)
Deferred tax assets realized                          --             --             (766)
Decrease in valuation allowance                       (761)           (66)          --
Other items                                           (233)          (732)          (166)
                                                  --------       --------       --------
           Income tax expense                     $ 65,211         56,101         41,787
                                                  ========       ========       ========
</TABLE>


                                       72
<PAGE>   75
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


10.   INCOME TAXES (continued)

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities as of December 31, 1997
and 1996, are presented below (in thousands):

<TABLE>
<CAPTION>
                                                                        1997           1996
                                                                      --------       --------
<S>                                                                   <C>            <C>   
Gross deferred tax assets:
      Book loan loss deduction in excess of tax                       $ 30,441         29,045
      Postretirement benefits                                            2,517          3,641
      Deferred compensation                                              6,148          3,931
      Deferred loan sales                                                1,767          1,458
      Deferred agreements                                                3,427           --
      Capital leases                                                       291            322
      Acquired net operating losses                                      2,759          4,008
      Other                                                              8,586          7,997
                                                                      --------       --------
         Total deferred tax assets                                      55,936         50,402
      Less valuation allowance                                            --             (761)
                                                                      --------       --------
         Total deferred tax assets net of valuation allowance           55,936         49,641
Gross deferred tax liabilities:
      Premises and equipment, due to differences in depreciation        (5,226)        (5,031)
      FHLB stock dividends                                             (15,536)       (12,655)
      Leasing operations                                               (21,396)       (15,116)
      Prepaid pension reserves                                            (818)        (1,119)
      Mortgage servicing                                                (1,513)          (959)
      Other                                                             (1,992)          (452)
                                                                      --------       --------
         Total deferred tax liabilities                                (46,481)       (35,332)
                                                                      --------       --------

Statement No. 115 market equity adjustment                              (1,655)         1,102
                                                                      --------       --------
         Net deferred tax assets                                      $  7,800         15,411
                                                                      ========       ========
</TABLE>

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

The Company has net operating loss carryforwards totaling $16,825,000 that
expire in the years 2006 and 2007.


                                       73
<PAGE>   76
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


11.   FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

The following table presents comparative data for FHLB advances and other
borrowings over one year:

<TABLE>
<CAPTION>
                                                                         1997          1996
                                                                       --------      --------
<S>                                                                    <C>           <C>                 
Medium Term Note payable by parent, 6.03%, due in 1999                 $ 50,000          --
FHLB advances payable by subsidiaries, 5.46%-7.30%, due 1998-2014       153,681        73,661
Notes payable, 7.84%-8.08%, due 2005-2006                                 7,000         8,214
   
                                                                       --------      --------
    
                                                                       $210,681        81,875
                                                                       ========      ========
</TABLE>

Federal Home Loan Bank advances as of December 31, 1997 and 1996, include
$148,610,000 and $73,661,000, respectively, borrowed by Zions First National
Bank (ZFNB), a wholly-owned subsidiary, under its line of credit with the
Federal Home Loan Bank of Seattle. The line of credit provides for borrowing of
amounts up to ten percent of total assets. The line of credit is secured under a
blanket pledge whereby ZFNB maintains unencumbered security with par value,
which has been adjusted using a pledge requirement percentage based upon the
types of securities pledged, equal to at least 100 percent of outstanding
advances, and Federal Home Loan Bank stock.

Federal Home Loan Bank advances, as of December 31, 1997 also include $5,000,000
borrowed by Centennial Savings Bank, F.S.B. (Centennial), a wholly-owned
subsidiary, from the Federal Home Loan Bank of Topeka. The note is secured with
a blanket pledge whereby Centennial maintains unencumbered security with par
value equal to at least 100 percent of the note outstanding and Federal Home
Loan Bank stock. There are no withdrawal and usage restrictions on advances from
the Federal Home Loan Bank of either Seattle or Topeka.

Maturities of Federal Home Loan Bank advances and other borrowings over one year
are as follows (in thousands):

<TABLE>
<S>                                       <C>     
              1998                        $ 16,638
              1999                          71,657
              2000                           9,440
              2001                           2,427
              2002                           2,121
              Thereafter                   108,398
   
                                          --------
    
                                          $210,681
                                          ========
</TABLE>


12.   LONG-TERM DEBT

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

<TABLE>
<CAPTION>
                                                                         1997          1996
                                                                      --------      --------
<S>                                                                   <C>           <C>    
Guaranteed preferred beneficial interests in junior subordinated
   deferrable interest debentures                                     $207,500       200,000
Subordinated notes                                                      50,000        50,000
Capital leases and other notes payable                                   1,066         1,620
                                                                      --------      --------
                                                                      $258,566       251,620
                                                                      ========      ========
</TABLE>

The Guaranteed Preferred Beneficial Interests in Junior Subordinated Deferrable
Interest Debentures include $200 million of 8.536 percent debentures issued by
Zions Institutional Capital Trust A (ZICTA) and $7.5 million of 10.25 percent
debentures issued by GB Capital Trust (GBCT).


                                       74
<PAGE>   77
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


12.   LONG-TERM DEBT (continued)

The ZICTA debentures are direct and unsecured obligations of ZFNB and are
subordinate to the claims of depositors and general creditors. The Company has
irrevocably and unconditionally guaranteed all of ZFNB's obligations under the
debentures. The GBCT debentures are direct and unsecured obligations of the
Company through the acquisition of GB Bancorporation, and are subordinate to
other indebtedness and general creditors of the Company. Both ZICTA and GBCT
debentures have the right, with the approval of banking regulators, to early
redemption in 2006 and 2007, respectively. ZICTA and GBCT debentures require
semiannual interest payments and mature on December 15, 2026 and January 15,
2027, respectively.

Subordinated notes consists of $50,000,000 of 8-5/8 percent notes that mature in
2002. These notes are not redeemable prior to maturity. The subordinated notes
are unsecured and require semiannual interest payments in April and October.

The Company has plans to retire a portion of both the $50.0 million, 8-5/8
percent subordinated notes and the $7.5 million, 10.25 percent GBCT Junior
Subordinated Debentures. It is anticipated that the Company will recognize a
loss on these retirements. As of December 31, 1997, this loss is indeterminate.

Maturities and sinking fund requirements on long-term debt at December 31, 1997
for each of the succeeding five years are as follows (in thousands):

<TABLE>
<CAPTION>
                                          Consoli-dated        Parent only
                                          -------------       -------------
<S>                                       <C>                 <C>
               1998                       $         152                   -
               1999                                  97                   -
               2000                                 107                   -
               2001                                  83                   -
               2002                              50,091              50,000
               Thereafter                       208,036               7,732
   
                                          -------------       ------------- 
    
                                         $     258,566              57,732
                                          =============       =============
</TABLE>


13.   COMMITMENTS AND CONTINGENT LIABILITIES

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

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


<TABLE>
<CAPTION>
                                      1997            1996
                                  ----------      ----------
<S>                               <C>             <C>      

Commitments to extend credit      $2,417,229       1,958,995
Standby letters of credit:
      Performance                     79,216          80,281
      Financial                       27,903          31,261
Commercial letters of credit           9,336           5,252
</TABLE>


                                       75
<PAGE>   78
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


13.   COMMITMENTS AND CONTINGENT LIABILITIES (continued)

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

Establishing commitments to extend credit gives rise to credit risk. As of
December 31, 1997, a significant portion of the Company's commitments is
expected to expire without being drawn upon; commitments totaling $1,974,106,000
expire in 1998. As a result, the Company's actual future credit exposure or
liquidity requirements will be lower than the contractual amounts of the
commitments. The Company uses the same credit policies and procedures in making
commitments to extend credit and conditional obligations as it does for
on-balance sheet instruments. These policies and procedures include credit
approvals, limits, and monitoring.

Standby and commercial letters of credit are conditional commitments issued by
the Company generally to guarantee the performance of a customer to a third
party. The guarantees are primarily issued to support public and private
borrowing arrangements, including commercial paper, bond financing, and similar
transactions. Standby letters of credit include commitments in the amount of
$102,752,000 expiring in 1998 and $4,367,000 expiring thereafter through 2006.
The credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers. The Company generally
holds marketable securities and cash equivalents as collateral supporting those
commitments for which collateral is deemed necessary.

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

<TABLE>
<CAPTION>
                                  1997            1996
                               ----------      ----------
<S>                            <C>             <C>    
Caps and floors - written      $1,052,000         825,000
Swaps - fixed                     701,331         285,000
Forwards                           87,565          44,961
Options                             3,000            --
</TABLE>

The Company enters into interest rate caps, floors, exchanges contracts (swaps),
forwards, and options agreements as part of its overall asset and liability
duration and interest rate risk management strategy. These transactions enable
the Company to manage asset and liability durations, and transfer, modify, or
reduce its interest rate risk. With the exception of interest rate caps, these
instruments are used to hedge asset and liability portfolios and, therefore, are
not marked to market. The notional amounts of the contracts are used to express
volume, but the amounts potentially subject to credit risk are much smaller.
Exposure to credit risk arises from the possibility of nonperformance by
counterparties to the interest rate contracts. The Company controls this credit
risk (except futures contracts and interest rate cap and floor contracts
written, for which credit risk is de minimus) through credit approvals, limits,
and monitoring procedures. As the Company generally enters into transactions
only with high-quality counterparties, losses associated with counterparty
nonperformance on interest rate contracts have been immaterial. Nevertheless,
the related credit risk is considered and, if material, will be provided for in
an allowance for losses on off-balance sheet financial instruments and included
in other liabilities.


                                       76
<PAGE>   79
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


13.   COMMITMENTS AND CONTINGENT LIABILITIES (continued)

Interest rate caps and floors obligate one of the parties to the contract to
make payments to the other if an interest rate index exceeds a specified upper
"capped" level or if the index falls below a specified "floor" level. The
interest rate caps and floors to which the Company is a party at December 31,
1997, have remaining terms of four years.

Interest rate swaps generally involve the exchange of fixed and variable rate
interest payment obligations based on an underlying notional value, without the
exchange of the notional value. Entering into interest rate swap agreements
involves not only the risk of dealing with counterparties and their ability to
meet the terms of the contract but also the interest rate risk associated with
unmatched positions. Swaps to which the Company is a party at December 31, 1997,
have remaining terms ranging from 1 to 6 years.

Forwards are contracts for the delayed delivery of financial instruments in
which the seller agrees to deliver on a specified future date, a specified
instrument, at a specified price or yield. As of December 31, 1997, the
Company's forward contracts have remaining terms ranging from one to four
months. An option contract is an agreement that conveys to the purchaser the
right, but not the obligation, to buy or sell a quantity of a financial
instrument or commodity at a predetermined rate or price on a specified future
date.

As a market maker in U.S. government, agency, and municipal securities, the
Company enters into agreements to purchase and sell such securities. As of
December 31, 1997 and 1996, the Company had outstanding commitments to purchase
securities of $76,870,000 and $96,487,000, respectively, and outstanding
commitments to sell securities of $75,717,000 and $68,772,000, respectively.
These agreements at December 31, 1997, have remaining terms of one month or
less.

The contract or notional amount of financial instruments indicates a level of
activity associated with a particular class of financial instrument and is not a
reflection of the actual level of risk. As of December 31, 1997 and 1996, the
regulatory risk-weighted values assigned to all off-balance sheet financial
instruments described herein totaled $296,823,000 and $263,029,000,
respectively.

The Company has $50.0 million available in lines of credit from two separate
institutions. At December 31, 1997, ZFNB had drawn $44.0 million on these lines,
with interest rates ranging from 6.21 percent to 6.27 percent. There were no
compensating balance arrangements on either of these lines of credit.

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

In connection with loans sold to (or serviced for) others, the Company is
subject to recourse obligations on approximately $26 million as of December 31,
1997.


                                       77
<PAGE>   80
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


13.   COMMITMENTS AND CONTINGENT LIABILITIES (continued)

The Company has commitments for leasing premises and equipment under the terms
of noncancelable operating leases expiring from 1997 to 2031. Future aggregate
minimum rental payments under existing noncancelable leases at December 31, 1997
are as follows (in thousands):

<TABLE>
<CAPTION>
                                                          Real
                                           Real         property
                                         property,         and
                                         capital-       equipment,
                                           ized         operating
                                        ----------      ---------
<S>                                     <C>             <C>  
               1998                     $     171           8,012
               1999                           171           6,579
               2000                           171           5,165
               2001                           173           4,119
               2002                           173           3,098
               Thereafter                     337           2,575
                                        ----------      ---------
                                        $   1,196          29,548
                                        ==========      =========
</TABLE>

Future aggregate minimum rental payments have been reduced by noncancelable
subleases as follows: 1998, $304,000; 1999, $216,000; 2000, $183,000; 2001,
$162,000; 2002, $162,000; and thereafter $7,129,000. Aggregate rental expense on
operating leases amounted to $9,970,000, $8,292,000, and 6,832,000 for the years
ended December 31, 1997, 1996, and 1995, respectively.


14.   STOCK OPTIONS

The Company adopted a qualified stock option plan in 1981, under which stock
options may be granted to key employees; and a nonqualified plan under which
options may be granted to nonemployee directors. Under the qualified plan and
nonqualified plan, respectively, 3,244,000 and 400,000 shares of common stock
were reserved. In connection with the acquisition of Aspen in 1997, Aspen's
outstanding qualified stock options were converted into 184,991 qualified stock
options of the Company, effectively increasing the number of common stock shares
reserved.

Qualified options are granted at a price not less than 100 percent of the fair
market value of the stock at the date of grant. Options granted are generally
exercisable in increments from one to four years after the date of grant and
expire six years after the date of grant. Under the nonqualified plan, options
expire five to ten years from the date of grant. At December 31, 1997, there
were 227,812 and 320,000 additional shares available for grant under the
qualified plan and nonqualified plan, respectively.

The per share weighted-average fair value of stock options granted during 1997,
1996, and 1995 was $10.74, $5.06, and $2.34, respectively, on the date of grant
using the Black-Scholes option-pricing model with the following weighted-average
assumptions:

<TABLE>
<CAPTION>
                                  1997          1996          1995
                               ---------     ---------     ---------
<S>                            <C>           <C>           <C>  
Expected dividend yield            1.55%         2.24%         3.27%
Risk-free interest rate            6.54%         6.00%         6.10%
Expected volatility               22.18%        23.29%        27.04%
Expected life                  3.5 years     3.5 years     3.5 years
</TABLE>


                                       78
<PAGE>   81
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


14.   STOCK OPTIONS (continued)

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

<TABLE>
<CAPTION>
                                    1997             1996            1995
                                -----------      -----------     -----------
<S>                             <C>              <C>             <C>   
Net income (in thousands):
    As reported                 $   122,362          107,423          82,386
    Pro forma                       120,396          106,868          82,315

Earnings per share:
    As reported:
        Basic                   $      1.92             1.70            1.39
        Dilutive                       1.89             1.68            1.37
    Pro forma:
        Basic                          1.89             1.69            1.38
        Dilutive                       1.86             1.68            1.37
</TABLE>

Pro forma net income reflects only options granted in 1997, 1996, and 1995.
Therefore, the full impact of calculating compensation cost for stock options
under Statement No. 123 is not reflected in the pro forma net income amounts
presented above because compensation cost is reflected over the options' vesting
period and compensation cost of options granted prior to January 1, 1995 is not
considered.

The following table is a summary of the Company's stock option activity and
related information for the three years ended December 31, 1997:
                                                              
<TABLE>
<CAPTION>
                                                               Weighted-
                                              Number           average 
                                              of               exercise
                                              shares            price  
                                            ----------       ----------
<S>                                         <C>              <C>       
Balance at December 31, 1994                 1,575,284       $     6.22
      Granted                                  280,900            10.66
      Exercised                               (525,528)            4.64
      Forfeited                                (33,260)            7.71
                                            ----------
Balance at December 31, 1995                 1,297,396             7.79
      Granted                                  740,520            14.01
      Exercised                               (395,920)            5.83
      Forfeited                                (72,200)            3.53
      Expired                                  (10,000)            6.03
                                            ----------
Balance at December 31, 1996                 1,559,796            10.97
      Acquired                                 184,991            12.54
      Granted                                  528,304            29.86
      Exercised                               (644,967)            9.40
      Forfeited                                (46,032)           13.25
   
                                            ----------
    
Balance at December 31, 1997                 1,582,092            18.04
                                            ==========
Outstanding options exercisable as of:
      December 31, 1997                        540,608            11.01
      December 31, 1996                        343,308             7.41
      December 31, 1995                        530,372             5.28
</TABLE>


                                       79
<PAGE>   82
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


14.   STOCK OPTIONS (continued)

Selected information on stock options as of December 31, 1997 follows:

<TABLE>
<CAPTION>
                                          Outstanding options                                       Exercisable options
                     --------------------------------------------------------------         ----------------------------------
   
                                                                       Weighted-
    
                                              Weighted-                 average                                   Weighted-
 Exercise price                                average               remaining life         Number of         average exercise 
    range            Number of options      exercise price              (years)              options                price
 --------------      -----------------      --------------           --------------         ---------         ----------------
<S>                  <C>                    <C>                      <C>                    <C>               <C>     
 $2.38 to $3.81           156,800              $   2.55                  4.60                106,400              $   2.44
 $6.50 to $14.73          545,716                 10.56                  3.32                319,904                 10.70
$18.13 to $31.00          879,576                 25.43                  5.18                114,304                 19.85
   
                        ---------                                                            -------
    
                        1,582,092                $18.04                  4.48                540,608                $11.01
                        =========                                                            =======
</TABLE>


15.   COMMON STOCK

Changes in common stock are summarized as follows (amounts in thousands, except
share amounts):

<TABLE>
<CAPTION>
                                          Shares            Amount
                                       -----------       -----------
<S>                                    <C>               <C>        
Balance at December 31, 1994            58,238,208       $    79,193

Stock redeemed and retired              (1,500,160)          (18,523)
Stock options:
      Shares tendered and retired          (86,340)             --
      Exercised                            525,528             2,081
Acquisition                              5,596,044            50,726
                                       -----------       -----------
Balance at December 31, 1995            62,773,280           113,477

Stock redeemed and retired              (1,096,992)          (21,635)
Stock options:
      Shares tendered and retired          (58,520)             --
      Exercised                            395,920             1,749
Acquisition                              1,454,792            26,200
                                       -----------       -----------
Balance at December 31, 1996            63,468,480           119,791

Stock redeemed and retired              (3,572,603)         (119,725)
Stock options:
      Shares tendered and retired          (28,553)             --
      Exercised                            421,991             4,321
Acquisitions                             3,672,785           117,835
   
                                       -----------       -----------
    
Balance at December 31, 1997            63,962,100       $   122,222
                                       ===========       ===========
</TABLE>


                                       80
<PAGE>   83
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


15.   COMMON STOCK (continued)

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

<TABLE>
<CAPTION>
(in thousands)                                         1997          1996          1995
                                                     --------      --------      --------
<S>                                                  <C>           <C>           <C>   
Basic:
    Net income                                       $122,362       107,423        82,385
    Less preferred dividends                               41            36            38
                                                     --------      --------      --------
    Net income applicable to common stock             122,321       107,387        82,347
                                                     ========      ========      ========
    Average common shares outstanding                  63,868        63,194        59,435
                                                     ========      ========      ========
    Net income per common share - basic                  1.92          1.70          1.39
                                                     ========      ========      ========
Diluted:
    Net income applicable to common stock             122,321       107,387        82,347
                                                     ========      ========      ========
    Average common shares outstanding                  63,868        63,194        59,435
    Stock option adjustment                               761           593           578
                                                     --------      --------      --------
    Average common shares outstanding - diluted        64,629        63,787        60,013
                                                     ========      ========      ========
    Net income per common share - diluted                1.89          1.68          1.37
                                                     ========      ========      ========
</TABLE>


16.   SHAREHOLDERS' PROTECTION RIGHTS PLAN

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

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


                                       81
<PAGE>   84
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


17.   REGULATORY MATTERS

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

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

As of December 31, 1997, the most recent notification from the Office of the
Comptroller of the Currency categorized the Company as well capitalized under
the regulatory framework for prompt corrective action. To be categorized as well
capitalized, the Company must maintain minimum total risk-based, Tier I
risk-based, and Tier I leverage ratios as set forth in the table. There are no
conditions or events since that notification that management believes have
changed the Company's category.

The Company's and its largest banking subsidiary, Zions First National Bank's,
actual capital amounts and ratios are as follows (in thousands):


<TABLE>
<CAPTION>
                                                                               For capital adequacy
                                                             Actual                  purposes          To be well capitalized
                                                    ----------------------    ----------------------   ----------------------
                                                     Amount        Ratio       Amount        Ratio      Amount        Ratio
                                                    --------      --------    --------      --------   --------      --------
<S>                                                 <C>           <C>         <C>           <C>        <C>           <C>   
As of December 31, 1997:
      Total capital (to risk-weighted assets)
           The Company                              $773,245         13.75%   $449,950          8.00%  $562,437         10.00%
           Largest subsidiary                        604,475         18.22     265,430          8.00    331,788         10.00
      Tier I capital (to risk-weighted assets)
           The Company                               660,446         11.74     224,975          4.00    337,462          6.00
           Largest subsidiary                        362,951         10.94     132,715          4.00    199,073          6.00
      Tier I capital (to average assets)
           The Company                               660,446          6.75     293,537          3.00    489,229          5.00
           Largest subsidiary                        362,951          5.66     192,417          3.00    320,695          5.00
</TABLE>


                                       82
<PAGE>   85
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


17.   REGULATORY MATTERS (continued)

<TABLE>
<CAPTION>
                                                                               For capital adequacy
                                                             Actual                  purposes          To be well capitalized
                                                    ----------------------    ----------------------   ----------------------
                                                     Amount        Ratio       Amount        Ratio      Amount        Ratio
                                                    --------      --------    --------      --------   --------      --------
<S>                                                 <C>           <C>         <C>           <C>        <C>           <C>   
As of December 31, 1996:
      Total capital (to risk-weighted assets)
           The Company                              $777,430         17.52%   $354,934        8.00%    $443,668       10.00%
           Largest subsidiary                        568,159         19.47     233,485        8.00      291,857       10.00
      Tier I capital (to risk-weighted assets)                                                        
           The Company                               628,261         14.16     177,467        4.00      266,201        6.00
           Largest subsidiary                        331,484         11.36     116,743        4.00      175,114        6.00
      Tier I capital (to average assets)                                                              
           The Company                               628,261          8.70     216,758        3.00      361,262        5.00
           Largest subsidiary                        331,484          6.61     150,456        3.00      250,759        5.00
</TABLE>


Dividends declared by the Company's national banking subsidiaries in any
calendar year may not, without the approval of the appropriate federal
regulator, exceed their net earnings for that year combined with their net
earnings less dividends paid for the preceding two years. At December 31, 1997,
the Company's subsidiaries had approximately $60.9 million available for the
payment of dividends under the foregoing restrictions. In addition, the banking
subsidiaries must meet various requirements and restrictions under the laws of
the United States and state laws, including requirements to maintain cash
reserves against deposits and limitations on loans and investments with
affiliated companies. During 1997, cash reserve balances held with the Federal
Reserve banks averaged approximately $34.2 million.


18.   RETIREMENT PLANS

The Company has a noncontributory defined benefit pension plan for eligible
employees. Plan benefits are based on years of service and employees'
compensation levels. Benefits vest under the plan upon completion of five years
of service. Plan assets consist principally of corporate equity and debt
securities, government fixed income securities, and cash investments.

The components of the net pension cost for the years ended December 31, 1997 and
1996, are as follows (in thousands):

<TABLE>
<CAPTION>
                                                        1997           1996
                                                      --------       --------
<S>                                                   <C>            <C>  
Service cost - benefits earned during the period      $  3,316          3,575
Interest cost on projected benefit obligation            4,246          4,042
Actual return on assets                                (14,956)        (8,282)
Net amortization and deferrals                           9,065          3,666
Income from curtailment                                 (1,551)          --
   
                                                      --------       --------
    
           Net pension cost                           $    120          3,001
                                                      ========       ========
</TABLE>


                                       83
<PAGE>   86
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


18.   RETIREMENT PLANS (continued)

Primary actuarial assumptions used in determining the net pension cost are as
follows:

<TABLE>
<CAPTION>
                                                                          1997            1996
                                                                        --------        --------
<S>                                                                     <C>             <C>  
Assumed discount rate                                                       7.50%           7.00%
Assumed rate of increase in compensation levels                             5.00            5.00
Expected long-term rate of return on assets                                 9.00            9.00
</TABLE>

The funded status of the plan as of December 31, 1997 and 1996, is as follows
(in thousands):

<TABLE>
<CAPTION>
                                                                          1997            1996
                                                                        --------        --------
<S>                                                                     <C>              <C>     
Actuarial present value of benefit obligations:

      Vested benefit obligation                                         $(56,713)        (46,838)
                                                                        ========        ========

      Accumulated benefit obligation                                    $(59,903)        (52,546)
                                                                        ========        ========
Projected benefit obligation                                            $(65,083)        (60,542)
Plan assets at fair value                                                 71,972          59,127
                                                                        --------        --------

Overfunded (unfunded) projected benefit obligation                         6,889          (1,415)
Unrecognized net loss                                                      1,555           6,782
Unrecognized prior service cost                                           (3,804)           (807)
Unrecognized net transition asset                                         (1,147)         (1,782)
                                                                        --------        --------
Prepaid pension cost                                                    $  3,493           2,778
                                                                        ========        ========

Primary actuarial assumptions (future periods):
      Assumed discount rate                                                 7.00%           7.50%
      Assumed rate of increase in compensation levels                       5.00            5.00
</TABLE>

Effective January 1, 1997, the plan was amended such that plan benefits are now
defined as a lump-sum cash value rather than an annuity at age 65. The 1997
income from curtailment resulted from the merger of Grossmont Bank plan
participants into the Company's plan at December 31, 1997.

The Company also sponsors an unfunded, nonqualified executive management pension
plan, which restores pension benefits limited by federal tax law.

In addition to the Company's defined benefit pension plan, the Company sponsors
a defined benefit health care plan that provides postretirement medical benefits
to full-time employees hired before January 1, 1993, who meet minimum age and
service requirements. The plan is contributory, with retiree contributions
adjusted annually, and contains other cost-sharing features such as deductibles
and coinsurance. Plan coverage is provided by self-funding or health maintenance
organizations (HMOs) options. Reductions in the Company's obligations to provide
benefits resulting from cost sharing changes have been applied to reduce the
plans unrecognized transition obligation. The Company's retiree premium
contribution rate is frozen at 50 percent of 1996 dollar amounts. The Company's
policy is to fund the cost of medical benefits in amounts determined at the
discretion of management.


                                       84
<PAGE>   87
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


18.   RETIREMENT PLANS (continued)

The following table presents the plan's funded status reconciled with amounts
recognized in the Company's consolidated balance sheets at December 31, 1997 and
1996, as follows (in thousands):

<TABLE>
<CAPTION>
                                                                         1997          1996
                                                                       -------       -------
<S>                                                                    <C>            <C>    
Accumulated postretirement benefit obligation:
        Retirees                                                       $(1,653)       (2,181)
        Fully eligible active plan participants                         (1,052)         (836)
        Other active plan participants                                    (484)         (535)
                                                                       -------       -------

                                                                        (3,189)       (3,552)
Plan assets at fair value                                                 --            --
                                                                       -------       -------
Accumulated postretirement benefit obligation in
    excess of plan assets                                               (3,189)       (3,552)
Unrecognized net loss (gain)                                            (2,575)       (2,628)
                                                                       -------       -------
Accrued postretirement benefit cost included in other liabilities
                                                                       $(5,764)       (6,180)
                                                                       =======       =======
</TABLE>

Net periodic postretirement benefit cost for 1997 and 1996, includes the
following components (in thousands):

<TABLE>
<CAPTION>
                                                            1997        1996
                                                           -----       -----
<S>                                                        <C>         <C>
Service cost                                               $ 111         195
Interest cost                                                269         414
Net actuarial gain                                          (486)       --
                                                           -----       -----
             Net periodic postretirement benefit cost      $(106)        609
                                                           =====       =====
</TABLE>

The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.5 percent at both December 31, 1997 and
1996.

The actuarial assumed health care cost trend rate is 7.5 percent for 1998,
decreasing to an ultimate level of 5 percent for the years 2003 and thereafter.
The effect of a one-percentage point increase in the assumed health care cost
trend rate at December 31, 1997 would be a $1,000 increase to the aggregate
service and interest cost components of the net periodic postretirement health
care benefit cost and a $22,000 increase to the accumulated postretirement
benefit obligation for health care benefits.

The Company has an Employee Stock Savings Plan and an Employee Investment
Savings Plan (PAYSHELTER). Under PAYSHELTER, employees select from a
nontax-deferred or tax-deferred plan and several investment alternatives.
Employees can contribute from 1 to 15 percent of compensation, which is matched
up to 50 percent by the Company for contributions up to 5 percent and 25 percent
for contributions greater than 5 percent up to 10 percent. The Company's
contributions to the plans amounted to $2,189,362, $1,726,000, and $1,404,000
for the years ended December 31, 1997, 1996, and 1995, respectively.

The Company has an employee profit-sharing plan. Contributions to the plan are
determined per a formula based on the Company's annual return on equity modified
for certain effects related to business combinations (required minimum return of
14 percent). Accrued contributions to the plan amounted to $2,330,000,
$1,835,000, and $1,592,000 for the years ended December 31, 1997, 1996, and
1995, respectively.


                                       85
<PAGE>   88
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


19.   FAIR VALUE OF FINANCIAL INSTRUMENTS

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

<TABLE>
<CAPTION>
                                                              December 31, 1997                  December 31, 1996
                                                      -------------------------------     -------------------------------
                                                        Carrying         Estimated          Carrying         Estimated
                                                          value          fair value          value           fair value
                                                      -------------     -------------     -------------     -------------
<S>                                                   <C>               <C>               <C>               <C>    
Financial assets:
      Cash and due from banks                         $     626,814           626,814           453,990           453,990
      Money market investments                              814,088           814,088           613,429           613,429
      Investment securities                               2,712,094         2,731,955         1,983,643         1,992,988
      Loans, net                                          4,791,169         4,827,998         3,760,346         3,772,392
                                                      -------------     -------------     -------------     -------------
             Total financial assets                   $   8,944,165         9,000,855         6,811,408         6,832,799
                                                      =============     =============     =============     =============
Financial liabilities:
      Demand, savings, and money market deposits      $   5,260,991         5,260,991         4,056,010         4,056,010
      Time deposits                                       1,410,427         1,407,243           949,390           950,751
      Foreign deposits                                      183,044           183,156           114,292           114,406
      Securities sold, not yet purchased                     45,067            45,067            76,831            76,831
      Federal funds purchased and security
         repurchase agreements                            1,270,875         1,270,875           926,768           926,768
      FHLB advances and other borrowings                    270,564           278,375            96,224            96,224
      Long-term debt                                        258,566           268,181           251,620           255,646
                                                      -------------     -------------     -------------     -------------

             Total financial liabilities              $   8,699,534         8,713,888         6,471,135         6,476,636
                                                      =============     =============     =============     =============
Off-balance sheet instruments:
      Caps and floors:
           Written                                    $      (1,099)           (1,099)           (4,372)           (4,372)
           Purchased                                           --                --                --                --
      Swaps - fixed                                            --               4,642              --               1,360
      Forwards                                                 --                (442)             --                  53
                                                      -------------     -------------     -------------     -------------
             Total off-balance sheet instruments      $      (1,099)            3,101            (4,372)           (2,959)
                                                      =============     =============     =============     =============
</TABLE>

Financial assets and financial liabilities other than investment securities of
the Company are not traded in active markets. The above estimates of fair value
require subjective judgments and are approximate. Changes in the following
methodologies and assumptions could significantly affect the estimates.

Financial Assets - The estimated fair value approximates the carrying value of
cash and due from banks and money market investments. For securities, the fair
value is based on quoted market prices where available. If quoted market prices
are not available, fair values are based on quoted market prices of comparable
instruments or using a discounted cash flow model based on established market
rates. The fair value of fixed-rate loans is estimated by discounting future
cash flows using the London Interbank Offered Rate (LIBOR) yield curve adjusted
by a factor which reflects the credit and interest rate risk inherent in the
loan. Variable-rate loans reprice with changes in market rates. As such their
carrying amounts are deemed to approximate fair value. The fair value of the
allowance for loan losses of $80,481,000 and $76,803,000 at December 31, 1997
and 1996, respectively, are the present value of estimated net charge-offs.


                                       86
<PAGE>   89
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements


19.  FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Financial Liabilities - The estimated fair value of demand and savings deposits,
securities sold not yet purchased, and federal funds purchased and security
repurchase agreements approximates the carrying value. The fair value of time
and foreign deposits is estimated by discounting future cash flows using the
LIBOR yield curve. Substantially all FHLB advances reprice with changes in
market interest rates or have short terms to maturity. The carrying value of
such indebtedness is deemed to approximate market value. Other borrowings are
not significant. The estimated fair value of the subordinated notes is based on
a quoted market price. The remaining long-term debt is not significant.

Off-Balance Sheet Financial Instruments - The fair value of the caps, floors,
and swaps reflects the estimated amounts that the Company would receive or pay
to terminate the contracts at the reporting date based upon pricing or valuation
models applied to current market information, thereby taking into account the
current unrealized gains or losses of open contracts. The carrying amounts
include unamortized fees paid or received and deferred gains or losses.

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


20. QUARTERLY FINANCIAL INFORMATION  (UNAUDITED)

Financial information by quarter for the three years ended December 31, 1997, is
as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                       Provision        Income                          Diluted net 
                           Net            for           before                           income per 
                        interest         loan            income         Net             common share
                         income         losses           taxes         income             share
                         ------       ----------        -------        ------           ------------
<S>                    <C>                <C>            <C>             <C>               <C>
1997:
 First quarter         $ 76,343           1,605          44,356          28,913            .45
 Second quarter          85,751           1,435          47,468          30,561            .47
 Third quarter           92,053           1,710          48,348          31,533            .48
 Fourth quarter          97,652           1,425          47,401          31,355            .48
   
                       --------           -----         -------         -------        
    
                       $351,799           6,175         187,573         122,362           1.89
   
                       ========           =====         =======         =======           
    
1996:
 First quarter         $ 66,140             700          37,889          24,940            .39
 Second quarter          70,271             960          40,025          26,376            .41
 Third quarter           73,283           1,330          42,059          27,333            .43
 Fourth quarter          79,472           1,650          43,551          28,774            .45
   
                       --------           -----         -------         -------           
    
                       $289,166           4,640         163,524         107,423           1.68
   
                       ========           =====         =======         =======           
    
</TABLE>




                                       87
<PAGE>   90
                              ZIONS BANCORPORATION

                   Notes to Consolidated Financial Statements

20. QUARTERLY FINANCIAL INFORMATION  (UNAUDITED) (continued)

<TABLE>
<S>                                          <C>            <C>    <C>      <C>         <C>
    1995:
     First quarter                           $  53,201      600    23,824   16,001      .27
     Second quarter                             55,897      850    31,270   20,521      .35
     Third quarter                              57,923      800    34,044   22,291      .38
     Fourth quarter                             66,526      750    35,034   23,572      .37
   
                                             ---------    -----   -------   ------     
    
                                             $ 233,547    3,000   124,172   82,385     1.37
   
                                             =========    =====   =======   ======     
    
</TABLE>


21. PARENT COMPANY FINANCIAL INFORMATION

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



                                       88
<PAGE>   91
                              ZIONS BANCORPORATION

                            Condensed Balance Sheets

                           December 31, 1997 and 1996
                                 (In thousands)



<TABLE>
<CAPTION>
                                                                          1997            1996
                                                                        --------        --------
<S>                                                                    <C>                <C>  
ASSETS               
Cash and due from banks                                                $    938           1,932
Interest-bearing deposits                                                 2,241           3,528
Investment securities                                                    10,494           4,952
Loans, lease financing, and other receivables                             1,420              55
Investments in subsidiaries:
   Commercial banks and bank holding company                            787,359         597,932
   Other                                                                  5,828           6,191
Receivables from subsidiaries:
   Commercial banks                                                          --             176
   Other                                                                  2,945           1,433
Real estate held for rental purposes, at cost, less accumulated
 depreciation                                                             1,187           1,286
Premises and equipment, at cost, less accumulated depreciation              212             211
Other real estate owned                                                      13              54
Other assets                                                             17,758          16,254
                                                                       --------        --------
     Total assets                                                      $830,395         634,004
                                                                       ========        ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued liabilities                                                    $ 23,203          21,175
Borrowings less than one year                                            44,000              --
Borrowings over one year                                                 50,000           8,214
Subordinated debt to subsidiary                                           7,732              --
Long-term debt                                                           50,000          50,005
                                                                       --------        --------
     Total liabilities                                                  174,935          79,394
                                                                       --------        --------
Shareholders' equity:
   Common stock                                                         122,222         119,791
   Net unrealized holding gains and losses on securities
      available for sale                                                  2,678          (1,807)

   Retained earnings                                                    530,560         436,626
                                                                       --------        --------
     Total shareholders' equity                                         655,460         554,610
                                                                       --------        --------
                                                                       $830,395         634,004
                                                                       ========        ========
</TABLE>



                                       89
<PAGE>   92
                              ZIONS BANCORPORATION

                         Condensed Statements of Income

                  Years ended December 31, 1997, 1996, and 1995
                                 (In thousands)



<TABLE>
<CAPTION>
                                                                       1997              1996             1995
                                                                    ---------         ---------         ---------
<S>                                                                 <C>                     <C>             <C>  
Interest income - interest and fees on loans and securities         $     940               895             2,419
Interest expense - interest on borrowed funds                           7,238             5,509             5,314
                                                                    ---------         ---------         ---------
    Net interest loss                                                  (6,298)           (4,614)           (2,895)
                                                                    ---------         ---------         ---------
Other income:
  Dividends from consolidated subsidiaries:
    Commercial banks                                                   98,234            48,438            30,095
    Other                                                                 500             1,000                --
  Other income                                                          5,404             4,010             3,131
                                                                    ---------         ---------         ---------
                                                                      104,138            53,448            33,226
                                                                    ---------         ---------         ---------
Expenses:
  Salaries and employee benefits                                        7,768             6,472             5,262
  Operating expenses                                                    6,029             1,847               495
                                                                    ---------         ---------         ---------
                                                                       13,797             8,319             5,757
                                                                    ---------         ---------         ---------

Income before income tax benefit                                       84,043            40,515            24,574
Income tax benefit                                                     (6,185)           (3,110)           (2,157)
                                                                    ---------         ---------         ---------

Income before equity in undistributed income of consolidated
 subsidiaries                                                          90,228            43,625            26,731
                                                                    ---------         ---------         ---------

Equity in undistributed income of consolidated subsidiaries:
   Commercial banks and bank holding company                           32,485            63,172            54,751
   Other                                                                 (351)              626               903
                                                                    ---------         ---------         ---------
                                                                       32,134            63,798            55,654
                                                                    ---------         ---------         ---------
    Net income                                                      $ 122,362           107,423            82,385
                                                                    =========         =========         =========
</TABLE>



                                       90
<PAGE>   93
                              ZIONS BANCORPORATION

                       Condensed Statements of Cash Flows

                  Years ended December 31, 1997, 1996, and 1995
                                 (In thousands)



<TABLE>
<CAPTION>
                                                                   1997              1996               1995
                                                                 ---------         ---------         ---------
<S>                                                              <C>                 <C>                <C>   
  Cash flows from operating activities:
  Net income                                                     $ 122,362           107,423            82,385
  Adjustments to reconcile net income  to
   net cash provided by operating activities:
    Undistributed net income of consolidated subsidiaries          (32,134)          (63,798)          (55,654)
    Depreciation of premises and equipment                             161               440               678
    Amortization of intangibles                                        714               692               612
    Other                                                           (5,811)            8,815             3,441
                                                                 ---------         ---------         ---------

      Net cash provided by operating activities                     85,292            53,572            31,462
                                                                 ---------         ---------         ---------

Cash flows from investing activities:
 Net decrease (increase) in interest-bearing deposits                1,287            12,975           (13,677)
 Collection of advances to subsidiaries                              2,890             1,176            34,683
 Advances to subsidiaries                                           (4,226)           (1,921)           (7,755)
 Increase of investment in subsidiaries                            (31,430)              (30)             (386)
 Purchase of other assets                                               --           (12,000)               --
 Other                                                              (3,376)           (3,611)            3,625
                                                                 ---------         ---------         ---------

      Net cash provided by (used in) investing activities          (34,855)           (3,411)           16,490
                                                                 ---------         ---------         ---------

Cash flows from financing activities:
 Net change in borrowings under one year                            44,000                --            (8,001)
 Proceeds from borrowings over one year                             50,000                --                --
 Payments on borrowings over one year                               (8,214)           (1,429)             (357)
 Proceeds from issuance of long-term debt                            7,732                --                --
 Payments on long-term debt                                             (5)           (4,715)           (1,469)
 Proceeds from issuance of common stock                              3,168             1,178             1,291
 Payments to redeem common stock                                  (119,725)          (21,635)          (18,523)
 Dividends paid                                                    (28,387)          (24,997)          (20,554)
                                                                 ---------         ---------         ---------

     Net cash used in financing activities                         (51,431)          (51,598)          (47,613)
                                                                 ---------         ---------         ---------

Net increase (decrease) in cash and due from banks                    (994)           (1,437)              339

Cash and due from banks at beginning of year                         1,932             3,369             3,030
                                                                 ---------         ---------         ---------

Cash and due from banks at end of year                           $     938             1,932             3,369
                                                                 =========         =========         =========
</TABLE>

The parent company paid interest of $6,179,000, $5,282,000, and $5,797,000 for
the years ended December 31, 1997, 1996, and 1995, respectively.



                                       91
<PAGE>   94
                              ZIONS BANCORPORATION

                    Condensed Statements of Retained Earnings

                  Years ended December 31, 1997, 1996, and 1995
                                 (In thousands)




<TABLE>
<CAPTION>
                                                                      1997              1996              1995
                                                                   ---------           -------           -------
<S>                                                                <C>                 <C>               <C>    
Balance at beginning of year                                       $ 436,626           354,236           292,443
Net income                                                           122,362           107,423            82,385
Cash dividends:
   Preferred, paid by subsidiaries to minority shareholders              (41)              (36)              (38)
   Common, per share of $.4700 in 1997, $.4250 in 1996, and
     $.3525 in 1995                                                  (28,387)          (24,997)          (20,554)
                                                                   ---------           -------           -------
Balance at end of year                                             $ 530,560           436,626           354,236
                                                                   =========         =========         =========
</TABLE>


<PAGE>   95
The selected quarterly financial data information required by this item appears
on pages 32 and 87 under the caption "QUARTERLY FINANCIAL INFORMATION
(UNAUDITED)."

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.

PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item, to the extent not included under the
caption "Executive officers of the registrant" in Part I of this report, will
appear on pages 2 through 6 of the definitive Proxy Statement. Information
relating to the directors and executive officers on pages 2 through 6, and
information required by Item 405 of Regulation S-K as set forth beginning in the
last paragraph on page 7 of the definitive Proxy Statement relating to the 1998
Annual Meeting of Shareholders to be held April 24, 1998, is incorporated herein
by reference.

ITEM 11.   EXECUTIVE COMPENSATION

The information required by this item appearing on pages 8 through 16 of the
definitive Proxy Statement relating to the 1998 Annual Meeting of Shareholders
to be held April 24, 1998, is incorporated herein by reference.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item appearing on pages 6 and 7 of the
definitive Proxy Statement relating to the 1997 Annual Meeting of Shareholders
to be held April 24, 1998, is incorporated herein by reference.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item appearing on page 17 of the definitive
Proxy Statement relating to the 1998 Annual Meeting of Shareholders to be held
April 24, 1998, is incorporated herein by reference.

PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are part of this report and appear on the pages
indicated:

<TABLE>
<CAPTION>
                                                                                          Page
<S>                                                                                       <C>
    (1)  Financial Statements:

         Independent Auditors' Report                                                       55

         Consolidated Balance Sheets - December 31, 1997 and 1996                           56

         Consolidated Statements of Income - Years ended December 31, 1997, 
         1996, and 1995                                                                     57

         Consolidated Statements of Cash Flows - Years ended December 31, 1997, 1996, and
         1995                                                                               58

         Consolidated Statements of Retained Earnings Years ended December 31, 1997, 1996,
           and 1995                                                                         59

         Notes to Consolidated Financial Statements                                         60
</TABLE>


<PAGE>   96
     (2) Financial Statement Schedules:

         Schedules are omitted because the information is either not required,
         not applicable, or is included in Part II, Items 6-8 of this report.

     (3) Exhibits:

         The exhibits listed on the Exhibit Index which follow this report are
         filed or are incorporated herein by reference.

(b)   Reports on Form 8-K

         Zions Bancorporation did not file any reports on Form 8-K during the
         quarter ended December 31, 1997

For the purposes of complying with the amendments to the rules governing Form
S-8 (effective July 13, 1990) under the Securities Act of 1993, the undersigned
Registrant hereby undertakes as follows, which undertaking shall be incorporated
by reference into Registrant's Registration Statements on Form S-8 Nos. 33-58845
(filed on April 26, 1995) and 33-58855 (filed on April 26, 1995).

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.


<PAGE>   97
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



March 20, 1998                                 ZIONS BANCORPORATION

                                      By         /s/ Harris H. Simmons
                                          -------------------------------------
                                           HARRIS H. SIMMONS, President and
                                               Chief Executive Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.

                                 March 20, 1998


<TABLE>
<S>                                             <C>
       /s/ Harris H. Simmons                          /s/ Dale M. Gibbons
- --------------------------------------------    -------------------------------------------
HARRIS H. SIMMONS, President, Chief             DALE M. GIBBONS, Secretary, Executive
Executive Officer and Director                  Vice President, and Chief Financial
                                                Officer


      /s/ Roy W. Simmons                              /s/ Walter E. Kelly
- --------------------------------------------    -------------------------------------------
ROY W. SIMMONS, Chairman and Director           WALTER E. KELLY, Controller


- --------------------------------------------    -------------------------------------------
JERRY C. ATKIN, Director                        ROBERT G. SARVER, Director


      /s/ Grant R. Caldwell
- --------------------------------------------    -------------------------------------------
GRANT R. CALDWELL, Director                     L.E. SIMMONS, Director


      /s/ R. D. Cash                                  /s/ I. J. Wagner
- --------------------------------------------    -------------------------------------------
R. D. CASH, Director                            I. J. WAGNER, Director


     /s/ Richard H. Madsen
- --------------------------------------------    -------------------------------------------
RICHARD H. MADSEN, Director                     ROGER B. PORTER, Director
</TABLE>


<PAGE>   98
                                  EXHIBIT INDEX
                    FILED AS PART OF THIS REPORT ON FORM 10-K
                    (Pursuant to Item 601 of Regulations S-K)

<TABLE>
<CAPTION>
Exhibit no.   Description and method of filing
- ------------  -----------------------------------------------------------------
<S>           <C>                                                                     <C>  
    3.1       Restated Articles of Incorporation of Zions Bancorporation dated
              November 8, 1993, and filed with the Department of Business
              Regulation, Division of Corporations of the State of Utah on
              November 9, 1993 (incorporated by reference to Exhibit 3.1 to the
              Registrant's Form S-4 Registration Statement, File No. 33-51145,
              filed on November 22, 1993)                                             *

    3.2       Restated Bylaws of Zions Bancorporation, dated November 8, 1993
              (incorporated by reference to Exhibit 3.2 to the Registrant's Form
              S-4 Registration Statement, File No. 33-51145, filed November 22,
              1993)                                                                   *

    3.3       Articles of Amendment to the Restated Articles of Incorporation of
              Zions Bancorporation dated April 30, 1997 and filed with the
              Department of Business Regulation, Division of Corporations of the
              State of Utah, on May 2, 1997 (incorporated by reference to
              Exhibit 3.1 of Zions Bancorporation's Quarterly Report on Form
              10-Q for the quarter ended June 30, 1997, File No. 0-2610)              *

     4        Shareholder Protection Rights Agreement, dated as of September 27,
              1996, between Zions Bancorporation and Zions First National Bank
              as Rights Agent (incorporated by reference to Exhibit 1 to the
              Registrant's Form 8-K, filed  October 12, 1996)                         *

   10.1       Amended and Restated Zions Bancorporation Pension Plan
              (incorporated by reference to Exhibit 10.1 of Zions
              Bancorporation's Annual Report on Form 10-K for the year ended
              December 31, 1994)                                                      *

   10.2       Amendment to Zions Bancorporation Pension Plan effective December
              1, 1994 (incorporated by reference to Exhibit 10.2 of Zions
              Bancorporation's Annual Report on Form 10-K for the year ended
              December 31, 1994)                                                      *

   10.3       Zions Utah Bancorporation Supplemental Retirement Plan Form
              (incorporated by reference to Exhibit 19.4 of Zions Utah
              Bancorporation's Quarterly Report on Form 10-Q for the quarter
              ended September 30, 1985)                                               *

   10.4       Zions Utah Bancorporation Key Employee Incentive Stock Option Plan
              approved by the shareholders of the Company on April 28, 1982
              (incorporated by reference to Exhibit 10.1 of Zions
              Bancorporation's Quarterly Report on Form 10-Q for the quarter
              ended June 30, 1995)                                                     *

   10.5       Amendment No. 1 to Zions Bancorporation (formerly Zions Utah
              Bancorporation) Key Employee Incentive Stock Option Plan approved
              by the shareholders of the Company on April 27, 1990 (incorporated
              by reference to Exhibit 10.2 of Zions Bancorporation's Quarterly
              Report on Form 10-Q for the quarter ended June 30, 1995)                *

   10.6       Amendment No. 2 to Zions Bancorporation (formerly Zions Utah
              Bancorporation) Key Employee Incentive Stock Option Plan approved
              by the shareholders of the Company on April 28, 1995 (incorporated
              by reference to Exhibit 10.3 of Zions Bancorporation's Quarterly
              Report on Form 10-Q for the quarter ended June 30, 1995)                *
</TABLE>


<PAGE>   99
                                  EXHIBIT INDEX
              FILED AS PART OF THIS REPORT ON FORM 10-K (continued)

<TABLE>
<CAPTION>
Exhibit no.   Description and method of filing
- ------------  -----------------------------------------------------------------
<S>           <C>                                                                     <C>  
    10.7       Zions Bancorporation Deferred Compensation Plan for Directors, as
               amended May 1, 1991 (incorporated by reference to Exhibit 19 of
               Zions Bancorporation's Annual Report on Form 10-K for the year
               ended December 31, 1991)                                               *

    10.8       Zions Bancorporation Senior Management Value Sharing Plan, Award
               Period 1993-1996 (incorporated by reference to Exhibit 10.8 of
               Zions Bancorporation's Annual Report on Form 10-K for the year
               end December 31, 1993)                                                 *

    10.9       Zions Bancorporation Senior Management Value Sharing Plan, Award
               Period 1994-1997 (incorporated by reference to Exhibit 10.9 of
               Zions Bancorporation's Annual Report on Form 10-K for the year
               end December 31, 1994)                                                 *

   10.10       Zions Bancorporation Senior Management Value Sharing Plan, Award
               Period 1995-1998 (incorporated by reference to Exhibit 10.14 of
               Zions Bancorporation's Annual Report on Form 10-K for the year
               ended December 31, 1995)                                               * 

   10.11       Zions Bancorporation Senior Management Value Sharing Plan, Award
               Period 1996-1999 (incorporated by reference to Exhibit 10.16 of
               Zions Bancorporation's Annual Report on Form 10-K for the year
               ended December 31, 1996)                                               * 

   10.12       Zions Bancorporation Executive Management Pension Plan
               (incorporated by reference to Exhibit 10.10 of Zions
               Bancorporation's Annual Report on Form 10-K for the year ended
               December 31, 1994)                                                     *

   10.13       Employment Agreement between Zions Bancorporation and 
               Mr. John Gisi (incorporated by reference to Exhibit 10.13 of 
               Zions Bancorporation's Annual Report on Form 10-K for the year 
               ended December 31, 1995)                                               *

   10.14       Zions Bancorporation Non-Employee Directors Stock Option Plan
               approved by the shareholders of the Company on April 26, 1996
               (incorporated by reference to Exhibit 10 of Zions
               Bancorporation's Quarterly Report on Form 10-Q for the quarter
               ended June 30, 1996)                                                   *

   10.15       Zions Bancorporation Pension Plan amended and restated effective
               April 1, 1997 (incorporated by reference to Exhibit 10 of Zions
               Bancorporation's Quarterly Report on Form 10-Q for the quarter
               ended March 31, 1997, File No. 0-2610)                                 *
</TABLE>


<PAGE>   100
                                  EXHIBIT INDEX
              FILED AS PART OF THIS REPORT ON FORM 10-K (continued)

<TABLE>
<CAPTION>
Exhibit no.   Description and method of filing
- ------------  -----------------------------------------------------------------
<S>           <C>
   10.16       Zions Bancorporation Senior Management Value Sharing Plan, Award
               Period 1997-2000 (filed)

     21        List of subsidiaries of Zions Bancorporation (filed)

     23        Consent of KPMG Peat Marwick, LLP independent certified public 
               accountants (filed)

    27.1       Article 9 Restated Financial Data Schedule for the year ended
               December 31, 1995 (filed)

    27.2       Article 9 Restated Financial Data Schedule for the three months
               ended March 31, 1996 (filed)

    27.3       Article 9 Restated Financial Data Schedule for the year ended six
               months ended June 30, 1996 (filed)

    27.4       Article 9 Restated Financial Data Schedule for the nine months
               ended September 30, 1996 (filed)

    27.5       Article 9 Restated Financial Data Schedule for the year ended
               December 31, 1996 (filed)

    27.6       Article 9 Restated Financial Data Schedule for the three months
               ended March 31, 1997 (filed)

    27.7       Article 9 Restated Financial Data Schedule for the six months
               ended June 30, 1997 (filed)

    27.8       Article 9 Restated Financial Data Schedule for the nine months
               ended September 30, 1997 (filed)

    27.9       Article 9 Financial Data Schedule for the year ended December 31,
               1997 (filed)

    99.1       Form 11-K Annual Report of Zions Bancorporation Employee Stock 
               Savings Plan (filed)

    99.2       Form 11-K Annual Report of Zions Bancorporation Employee 
               Investment Savings Plan (filed)
</TABLE>

*  incorporated by reference.


<PAGE>   1
                                                                   Exhibit 10.16



                              Zions Bancorporation
                      Senior Management Value Sharing Plan
                             Award Period: 1997-2000

Objective:

        To provide an ongoing multi-year incentive for the senior managers of
Zions Bancorporation and its subsidiaries which:

        A. Focuses managers' attention on the creation of long-term shareholder
value;

        B. Creates an incentive that promotes teamwork across departments and
subsidiaries, and which encourages managers to balance profit center
accountability with Company-wide goals; and,

        C. Complements the short-range annual bonuses which reflect the
achievement of annual objectives and the Company's short-term profitability.

Eligibility:

        Participants in the Plan shall consist of the senior management group
(and certain other key managers) of the Company and its major subsidiaries.
Participants for each Award Period shall be specifically identified by the
Company's Board of Directors (the "Board") or its Executive Compensation
Committee (the "Committee").

Allocation of Awards:

        It is anticipated that during the first quarter of each year in which
the Plan operates, the Board of Directors shall approve the establishment of a
pool of Award Funds to be generated during the Award Period, according to the
general formula outlined below. Participants shall be designated by the Board or
the Committee. Claims against the pool of Award Funds for each Award Period
shall be represented by Participation Units ("PU's"), and each participant shall
be allocated a specific number of PU's by the Committee. The PU's shall
represent a pro-rata claim, in proportion to the total PU's designated for that
Award Period, on any Award Funds generated by the Plan during the Award Period.

Term:

        Each Award Period shall consist of a continuous four-calendar-year
period. The Plan is intended to constitute a "moving four-year-average"
incentive plan, with the anticipation that a new Award Period would be
designated each year, with multiple Award Periods overlapping one another.
Nevertheless, the establishment of a new Award Period each year is subject to
the Board's discretion.



<PAGE>   2
Determination of Award Funds:

        The amount of Award Funds in the pool for each Award Period shall be a
function of the Aggregate Cash Earnings Per Share ("ACEPS") during the Award
Period, together with the mathematical Average Modified Cash Return on
Shareholders' Equity ("AMCROE") for each of the four years in the Award Period,

        Aggregate Cash Earnings Per Share ("ACEPS") shall be defined as the
aggregate, over the four year Award Period, of each year's earnings per share
available to common shareholders, plus the current period after-tax-equivalent
cost per share of amortization of goodwill and core deposit intangible assets
for such goodwill and core deposit intangible assets created subsequent to
December 31, 1996.

        Average Modified Cash Return on Equity ("AMCROE") shall be defined as
the average, for each of the four years in the Award Period, of the Company's
Net Cash Income divided by the average Modified Tangible Equity. Net Cash Income
shall mean the net income available to common shareholders, plus the current
period after-tax equivalent cost of the amortization of goodwill and core
deposit intangible assets for such goodwill and core deposit intangible assets
created subsequent to December 31, 1996. Modified Tangible Equity shall mean
total common shareholders' equity, less goodwill and core deposit intangible
assets created subsequent to December 31, 1996 with the exception of such
goodwill or core deposit intangible assets as arise as a result of acquisitions
of businesses, stock or deposits for cash. (In cases where businesses, stock or
deposits are acquired for a combination of cash or Zions' stock, goodwill or
core deposit intangible assets created shall be deducted from total common
shareholders' equity only to the extent that such items exceed the total value
of Zions' shares issued in the transaction).

        Each year, the Committee shall establish minimum targets for AMCROE and
ACEPS for the Award Period. These minimum targets would both be required to be
reached in order for any Award Funds to be earned. Additionally, the Committee
may designate Award Fund allocation amounts based upon the achievement of higher
levels of AMCROE, with upward adjustments possible if higher levels of ACEPS are
achieved. The Committee may also designate other conditions and adjustment
factors to ensure the Plan's integrity and consistency with shareholder and
depositor interests.

        The 1997-2000 Award Period formula for the determination of the value of
PU's is as indicated in the Appendix.

        For the 1997-2000 Award Period, the following parameters shall be
established, and adjustments made to the Company's earnings calculations, for
purposes of determining Award Funds available under the Plan:

        1) The Plan is intended to create an incentive for increasing
shareholder value. However, this is not to be accomplished by reducing capital
levels or assuming extraordinary or unwarranted risks. Accordingly, it is
expected that total risk-based capital levels shall be maintained at a level at
least 125% of regulatory requirements.



<PAGE>   3

        2) The Company's reserve levels are to be conservatively maintained. To
the extent that the consolidated Allowance for Loan and Lease Losses is less
than 110% of the peer group level, as expressed in terms of reserves/non-current
loans as reported in the most current Uniform Bank Performance Report available
at December 31, 2000, an appropriate adjustment shall be made to after-tax
earnings (for purposes of calculating Award Funds only) to compensate for any
deficit relative to the 110% minimum target level. Actual reserve levels are, of
course, subject to the Board and/or regulatory decisions. No upward adjustments
shall be made in "pro forma" earnings in the event actual reserve levels exceed
110% of the peer group target.

        3) Unless determined otherwise by the Board, in the event of any merger
involving an acquisition by Zions for the exchange of Zions' shares in a
pooling-of-interests transaction, earnings per share prior to the acquisition
date shall, for the purpose of calculating AEPS during the Award Period, be
determined using Zions' un-restated numbers.

Other Terms and Conditions:

        The Plan is to be governed and interpreted by the Committee, whose
decisions shall be final. The terms of the Plan are subject to change or
termination at their sole discretion.

        The Company shall retain the right to withhold payment of Award Funds to
participants in the event of a significant deterioration in the Company's
financial condition, or if so required by regulatory authorities, or for any
other reason considered valid by the Board in its sole discretion.

        Participants shall not vest in any benefits available under the Plan
until the conclusion of each Award Period. Nevertheless, upon death, permanent
disability, or normal or early retirement (unless upon early retirement the
participant becomes employed by an entity which competes with Zions
Bancorporation), participants (or their estates) shall be eligible to receive a
proportionate share of Award Funds based upon the number of PU's granted, and
the number of full calendar quarters the participant was engaged as an officer
of the Company or its subsidiaries prior to death, disability, or retirement.

        The PU's shall not transferable without the express approval of the
Committee.

        In the event of the merger or acquisition of the Company, the Plan may
be terminated as of the end of the fiscal quarter preceding the first full
quarter before the transaction is consummated. The Board may make any reasonable
estimates or adjustments necessary in calculating Award Funds for any Award
Period. The Board may also, at its sole discretion, alter the terms of the Plan
at any time during an Award Period.

        This document is intended to provide a guideline for the creation and
distribution of incentive compensation. Nothing herein creates a contractual
obligation binding on the Board, and no Participant shall have any legal rights
with respect to an Award until such Award is distributed.


<PAGE>   4

        Earnings per share calculations shall be adjusted to reflect any stock
splits, stock dividends, or other such changes in capitalization, at the
discretion of the Committee.

        The award of PU's to any participant shall not confer any right with
respect to continuance of employment by the Company or its subsidiaries, nor
limit in any way the right of the Company to terminate his or her employment at
any time, with or without cause.



<PAGE>   5
                                    APPENDIX

               ZIONS BANCORPORATION VALUE-SHARING PLAN: 1997-2000

                     Calculation of Participation Unit Value

Aggregate Cash Earnings Per Share ("ACEPS")

If the ACEPS is:

<TABLE>
<CAPTION>
                                                 The basic value of a
Over-                    But not over-           Participation Unit is-
- -----------------------------------------------------------------------
<S>                      <C>                     <C>                     <C>
$7.74                    $7.93                   $.347 plus $.037        per each cent of the
                                                                         amount over $7.74

$7.93                    $8.13                   $1.053 plus $.054       per each cent of the
                                                                         amount over $7.93

$8.13                    $8.33                   $2.140 plus $.074       per each cent of the
                                                                         amount over $8.13

$8.33                    $8.53                   $3.607 plus $.094       per each cent of the
                                                                         amount over $8.33

$8.53                    $8.74                   $5.487 plus $.109       per each cent of the
                                                                         amount over $8.53

$8.74                    $8.95                   $7.780 plus $.130       per each cent of the
                                                                         amount over $8.74

$8.95                    $9.16                   $10.507 plus $.151      per each cent of the
                                                                         amount over $8.95

$9.16                    $9.38                   $13.680 plus $.165      per each cent of the
                                                                         amount over $9.16

$9.38                    $9.60                   $17.327 plus $.187      per each cent of the
                                                                         amount over $9.38

$9.60                    $9.83                   $21.447 plus $.201      per each cent of the
                                                                         amount over $9.60

$9.83                    $10.06                  $26.067 plus $.223      per each cent of the
                                                                         amount over $9.83

$10.06                   $10.29                  $31.207 plus $.246      per each cent of the
                                                                         amount over $10.06

$10.29                   $10.53                  $36.873 plus $.216      per each cent of the
                                                                         amount over $10.29

$10.53                   $10.77                  $42.067 plus $.201      per each cent of the
                                                                         amount over $10.53

$10.77                   $11.02                  $46.873 plus $.176      per each cent of the
                                                                         amount over $10.77

$11.02                   $11.28                  $51.287 plus $.154      per each cent of the
                                                                         amount over $11.02

$11.28                   $11.53                  $55.273 plus $.142      per each cent of the
</TABLE>
<PAGE>   6
<TABLE>
<S>                      <C>                     <C>                     <C>
                                                                         amount over $11.28
$11.53                   $11.79                  $58.883 plus $.119      per each cent of the
                                                                         amount over $11.53

$11.79                   $12.06                  $61.933 plus $.098      per each cent of the
                                                                         amount over $11.79

$12.06                   $12.33                  $64.567 plus $.079      per each cent of the
                                                                         amount over $12.06

$12.33                                           $66.707
</TABLE>


Average Modified Cash Return on Equity ("AMCROE") Modifier:

        The basic Participation Unit value determined above shall be adjusted as
follows:

o       If AMCROE for 1997-2000 is less than 14.00%, the Participation Units
        shall have no value.

o       If AMCROE is equal to or greater than 14.00% but less than 17.00%, the
        basic value of a Participation Unit shall be multiplied by a factor of
        1.00.

o       If AMCROE is equal to or greater than 17.00% but less than 22.00%, the
        basic value of a Participation Unit shall be multiplied by the following
        factor: 1+(AMCROE-.17)6.60.

o       If AMCROE is 22.00% or more, the basic value of a Participation Unit
        shall be multiplied by 1.33.

Example: If ACEPS is $10.03 and AMCROE is 20.07, each Participation Unit would
be worth $36.71.

          [$26.067+100($10.03-$9.83)$.223]X[1+(.2007-.17)6.6] = $36.71

<PAGE>   1
                                                                      EXHIBIT 21


                      ZIONS BANCORPORATION AND SUBSIDIARIES

                              AT DECEMBER 31, 1997



<TABLE>
<CAPTION>
             SUBSIDIARY                                                  STATE
             ----------                                                  -----
<S>                                                    <C> 
Zions First National Bank                              Federally chartered doing business in Utah

Nevada State Bank                                                        Nevada

National Bank of Arizona                                 Federally chartered doing business in
                                                                        Arizona

Pitkin County Bank and Trust Company                                    Colorado

Centennial Savings Bank, F.S.B.                          Federally chartered doing business in
                                                                        Colorado

ValCor Bancorporation, Inc.                                             Colorado

Grossmont Bank                                                         California

Cash Access, Inc.                                                         Utah

GB Capital Trust                                                        Delaware

Great Western Financial Corporation                                       Utah

Lockhart Realty Company                                                   Utah

Zions Data Service Company                                                Utah

Zions Insurance Agency, Inc.                                              Utah

Zions Life Insurance Company                                            Arizona
</TABLE>


<PAGE>   1
                                                                      EXHIBIT 23


                         CONSENT OF INDEPENDENT AUDITORS



Zions Bancorporation:


We consent to the incorporation by reference in Zions Bancorporation's (i)
Registration Statement (Form S-3 No. 33-58801) and related Prospectus pertaining
to the Zions Bancorporation Dividend Reinvestment and Common Stock Purchase
Plan, (ii) Registration Statement (Form S-8 No. 33-58845) and related Prospectus
pertaining to Zions Bancorporation Employee Stock Savings Plan, and (iii)
Registration Statement (Form S-8 No. 33-58855) and related Prospectus pertaining
to Zions Bancorporation Employee Investment Savings Plan, of our report dated
January 26, 1998, relating to the consolidated balance sheets of Zions
Bancorporation and subsidiaries as of December 31, 1997 and 1996, and the
related consolidated statements of income, retained earnings, and cash flows for
each of the years in the three-year period ended December 31, 1997, which report
appears in this annual report on Form 10-K for the year ended December 31, 1997.

We also consent to the incorporation by reference in Zions Bancorporation's
Registration Statement (Form S-8 No. 33-58845) of Zions Bancorporation Employee
Stock Savings Plan of our report dated March 13, 1998, relating to the
statements of net assets available for benefits of Zions Bancorporation Employee
Stock Savings Plan as of December 31, 1997 and 1996, and the related statements
of changes in net assets available for benefits for each of the years in the
three-year period ended December 31, 1997, which report appears in the annual
report on Form 11-K for the year ended December 31, 1997, which is included as
an exhibit in this annual report on Form 10-K.

We also consent to the incorporation by reference in Zions Bancorporation's
Registration Statement (Form S-8 No. 33-58855) of Zions Bancorporation Employee
Investment Savings Plan of our report dated March 13, 1998, relating to the
statements of net assets available for benefits of Zions Bancorporation Employee
Investment Savings Plan as of December 31, 1997 and 1996, and the related
statements of changes in net assets available for benefits for each of the years
in the three-year period ended December 31, 1997, which report appears in the
annual report on Form 11-K for the year ended December 31, 1997, which is
included as an exhibit in this annual report on Form 10-K.




                                                KPMG Peat Marwick LLP


Salt Lake City, Utah
March 20, 1998

<TABLE> <S> <C>

<ARTICLE> 9
<LEGEND>
THIS RESTATED SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1995 AND RELATED CONSOLIDATED
STATEMENT OF INCOME FO THE YEAR ENDED DECEMBER 31, 1995 WHICH HAVE BEEN RESTATED
AS A RESULT OF POOLING OF INTERESTS.
</LEGEND>
<RESTATED> 
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1995
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               DEC-31-1995
<CASH>                                         454,207
<INT-BEARING-DEPOSITS>                          34,580
<FED-FUNDS-SOLD>                               652,671
<TRADING-ASSETS>                                63,706
<INVESTMENTS-HELD-FOR-SALE>                    443,333
<INVESTMENTS-CARRYING>                       1,187,630
<INVESTMENTS-MARKET>                         1,203,527
<LOANS>                                      3,068,057
<ALLOWANCE>                                     73,437
<TOTAL-ASSETS>                               6,095,515
<DEPOSITS>                                   4,511,184
<SHORT-TERM>                                   881,896
<LIABILITIES-OTHER>                             81,211
<LONG-TERM>                                    152,046
                                0
                                          0
<COMMON>                                       113,477
<OTHER-SE>                                     356,201
<TOTAL-LIABILITIES-AND-EQUITY>               6,095,515
<INTEREST-LOAN>                                270,771
<INTEREST-INVEST>                              168,724
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                               439,495
<INTEREST-DEPOSIT>                             130,842
<INTEREST-EXPENSE>                             205,948
<INTEREST-INCOME-NET>                          233,547
<LOAN-LOSSES>                                    3,000
<SECURITIES-GAINS>                               (148)
<EXPENSE-OTHER>                                195,186
<INCOME-PRETAX>                                124,172
<INCOME-PRE-EXTRAORDINARY>                      82,385
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    82,385
<EPS-PRIMARY>                                     1.39
<EPS-DILUTED>                                     1.37
<YIELD-ACTUAL>                                    4.48
<LOANS-NON>                                     10,875
<LOANS-PAST>                                     5,309
<LOANS-TROUBLED>                                   249
<LOANS-PROBLEM>                                      0
<ALLOWANCE-OPEN>                                67,018
<CHARGE-OFFS>                                    8,683
<RECOVERIES>                                     5,900
<ALLOWANCE-CLOSE>                               73,437
<ALLOWANCE-DOMESTIC>                            11,586
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                         61,851
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 9
<LEGEND>
THIS RESTATED SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1996 AND RELATED CONSOLIDATED
STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1996 WHICH HAVE BEEN
RESTATED AS A RESULT OF POOLING OF INTERESTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S.
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               MAR-31-1996
<EXCHANGE-RATE>                                      1
<CASH>                                         432,046
<INT-BEARING-DEPOSITS>                          37,002
<FED-FUNDS-SOLD>                             1,017,429
<TRADING-ASSETS>                                81,888
<INVESTMENTS-HELD-FOR-SALE>                    429,668
<INVESTMENTS-CARRYING>                       1,251,661
<INVESTMENTS-MARKET>                         1,264,773
<LOANS>                                      3,239,994
<ALLOWANCE>                                     73,718
<TOTAL-ASSETS>                               6,691,883
<DEPOSITS>                                   4,598,760
<SHORT-TERM>                                 1,375,677
<LIABILITIES-OTHER>                             88,892
<LONG-TERM>                                    147,607
                                0
                                          0
<COMMON>                                       107,569
<OTHER-SE>                                     373,378
<TOTAL-LIABILITIES-AND-EQUITY>               6,691,883
<INTEREST-LOAN>                                 76,936
<INTEREST-INVEST>                               45,258
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                               122,194
<INTEREST-DEPOSIT>                              34,793
<INTEREST-EXPENSE>                              56,054
<INTEREST-INCOME-NET>                           66,140
<LOAN-LOSSES>                                      700
<SECURITIES-GAINS>                                 (6)
<EXPENSE-OTHER>                                 54,445
<INCOME-PRETAX>                                 37,889
<INCOME-PRE-EXTRAORDINARY>                      24,940
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    24,940
<EPS-PRIMARY>                                      .40
<EPS-DILUTED>                                      .39
<YIELD-ACTUAL>                                    4.37
<LOANS-NON>                                     12,207
<LOANS-PAST>                                     6,689
<LOANS-TROUBLED>                                   245
<LOANS-PROBLEM>                                      0
<ALLOWANCE-OPEN>                                73,437
<CHARGE-OFFS>                                    2,546
<RECOVERIES>                                     2,127
<ALLOWANCE-CLOSE>                               73,718
<ALLOWANCE-DOMESTIC>                            12,016
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                         61,702
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 9
<LEGEND>
THIS RESTATED SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996 AND RELATED CONSOLIDATED
STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 WHICH HAVE BEEN
RESTATED AS A RESULT OF POOLING OF INTERESTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               JUN-30-1996
<CASH>                                         390,201
<INT-BEARING-DEPOSITS>                          40,996
<FED-FUNDS-SOLD>                               345,386
<TRADING-ASSETS>                               175,259
<INVESTMENTS-HELD-FOR-SALE>                    466,011
<INVESTMENTS-CARRYING>                       1,448,983
<INVESTMENTS-MARKET>                         1,452,127
<LOANS>                                      3,516,903
<ALLOWANCE>                                     75,547
<TOTAL-ASSETS>                               6,615,567
<DEPOSITS>                                   4,806,223
<SHORT-TERM>                                 1,071,249
<LIABILITIES-OTHER>                             77,672
<LONG-TERM>                                    143,331
                                0
                                          0
<COMMON>                                       124,604
<OTHER-SE>                                     392,488
<TOTAL-LIABILITIES-AND-EQUITY>               6,615,567
<INTEREST-LOAN>                                159,616
<INTEREST-INVEST>                               88,098
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                               247,714
<INTEREST-DEPOSIT>                              70,981
<INTEREST-EXPENSE>                             111,303
<INTEREST-INCOME-NET>                          136,411
<LOAN-LOSSES>                                    1,660
<SECURITIES-GAINS>                                  62
<EXPENSE-OTHER>                                111,018
<INCOME-PRETAX>                                 77,914
<INCOME-PRE-EXTRAORDINARY>                      51,316
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    51,316
<EPS-PRIMARY>                                      .82
<EPS-DILUTED>                                      .81
<YIELD-ACTUAL>                                    4.48
<LOANS-NON>                                      9,258
<LOANS-PAST>                                     6,154
<LOANS-TROUBLED>                                   206
<LOANS-PROBLEM>                                  1,275
<ALLOWANCE-OPEN>                                73,437
<CHARGE-OFFS>                                    5,308
<RECOVERIES>                                     3,187
<ALLOWANCE-CLOSE>                               75,547
<ALLOWANCE-DOMESTIC>                            12,254
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                         63,293
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 9
<LEGEND>
THIS RESTATED SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996 AND RELATED CONSOLIDATED
STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 WHICH HAVE BEEN
RESTATED AS A RESULT OF POOLING OF INTERESTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               SEP-30-1996
<CASH>                                         426,916
<INT-BEARING-DEPOSITS>                          44,488
<FED-FUNDS-SOLD>                               948,358
<TRADING-ASSETS>                               150,200
<INVESTMENTS-HELD-FOR-SALE>                    460,543
<INVESTMENTS-CARRYING>                       1,428,337
<INVESTMENTS-MARKET>                         1,431,268
<LOANS>                                      3,663,767
<ALLOWANCE>                                     75,953
<TOTAL-ASSETS>                               7,356,130
<DEPOSITS>                                   5,081,249
<SHORT-TERM>                                 1,511,481
<LIABILITIES-OTHER>                             88,183
<LONG-TERM>                                    139,527
                                0
                                          0
<COMMON>                                       123,788
<OTHER-SE>                                     411,902
<TOTAL-LIABILITIES-AND-EQUITY>               7,356,130
<INTEREST-LOAN>                                246,653
<INTEREST-INVEST>                              133,541
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                               380,194
<INTEREST-DEPOSIT>                             109,156
<INTEREST-EXPENSE>                             170,500
<INTEREST-INCOME-NET>                          209,694
<LOAN-LOSSES>                                    2,990
<SECURITIES-GAINS>                                  62
<EXPENSE-OTHER>                                170,741
<INCOME-PRETAX>                                119,973
<INCOME-PRE-EXTRAORDINARY>                      78,649
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    78,649
<EPS-PRIMARY>                                     1.24
<EPS-DILUTED>                                     1.23
<YIELD-ACTUAL>                                    4.49
<LOANS-NON>                                     11,419
<LOANS-PAST>                                     8,856
<LOANS-TROUBLED>                                   204
<LOANS-PROBLEM>                                      0
<ALLOWANCE-OPEN>                                73,437
<CHARGE-OFFS>                                    7,517
<RECOVERIES>                                     4,477
<ALLOWANCE-CLOSE>                               75,953
<ALLOWANCE-DOMESTIC>                            14,143
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                         61,810
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 9
<LEGEND>
THIS RESTATED SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1996 AND RELATED CONSOLIDATED
STATEMENT OF INCOME FOR THE PERIOD ENDED DECEMBER 31, 1996 WHICH HAVE BEEN
RESTATED AS A RESULT OF POOLING OF INTERESTS AND INCLUDED IN THE COMPANY'S 10-K
FOR THE YEAR ENDED DECEMBER 31, 1997.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               DEC-31-1996
   
<CASH>                                         453,990
    
<INT-BEARING-DEPOSITS>                          47,746
<FED-FUNDS-SOLD>                               565,683
<TRADING-ASSETS>                                34,076
<INVESTMENTS-HELD-FOR-SALE>                    474,158
<INVESTMENTS-CARRYING>                       1,475,409
<INVESTMENTS-MARKET>                         1,484,754
<LOANS>                                      3,837,149
<ALLOWANCE>                                     76,803
<TOTAL-ASSETS>                               7,116,413
<DEPOSITS>                                   5,119,692
<SHORT-TERM>                                 1,017,948
<LIABILITIES-OTHER>                             90,668
<LONG-TERM>                                    333,495
                                0
                                          0
<COMMON>                                       119,791
<OTHER-SE>                                     434,819
<TOTAL-LIABILITIES-AND-EQUITY>               7,116,413
<INTEREST-LOAN>                                338,089
<INTEREST-INVEST>                              180,902
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                               518,991
<INTEREST-DEPOSIT>                             147,306
<INTEREST-EXPENSE>                             229,825
<INTEREST-INCOME-NET>                          289,166
<LOAN-LOSSES>                                    4,640
<SECURITIES-GAINS>                                 115
<EXPENSE-OTHER>                                235,272
<INCOME-PRETAX>                                163,524
<INCOME-PRE-EXTRAORDINARY>                     107,423
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   107,423
<EPS-PRIMARY>                                     1.70
<EPS-DILUTED>                                     1.68
<YIELD-ACTUAL>                                    4.57
<LOANS-NON>                                     12,704
<LOANS-PAST>                                     3,563
<LOANS-TROUBLED>                                   857
<LOANS-PROBLEM>                                      0
<ALLOWANCE-OPEN>                                73,437
<CHARGE-OFFS>                                    9,923
<RECOVERIES>                                     6,083
<ALLOWANCE-CLOSE>                               76,803
<ALLOWANCE-DOMESTIC>                            14,566
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                         62,237
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 9
<LEGEND>
THIS RESTATED SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATIN EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1997 AND RELATED CONSOLIDATED
STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1997 WHICH HAVE BEEN
RESTATED AS A RESULT OF POOLING OF INTERESTS.
</LEGEND>
<RESTATED> 
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-START>                             JAN-01-1997
<PERIOD-END>                               MAR-31-1997
<CASH>                                         419,541
<INT-BEARING-DEPOSITS>                          51,037
<FED-FUNDS-SOLD>                               995,428
<TRADING-ASSETS>                               157,957
<INVESTMENTS-HELD-FOR-SALE>                    432,908
<INVESTMENTS-CARRYING>                       1,497,889
<INVESTMENTS-MARKET>                         1,498,996
<LOANS>                                      4,117,389
<ALLOWANCE>                                     76,802
<TOTAL-ASSETS>                               7,926,419
<DEPOSITS>                                   5,288,584
<SHORT-TERM>                                 1,654,546
<LIABILITIES-OTHER>                            101,796
<LONG-TERM>                                    328,234
                                0
                                          0
<COMMON>                                        96,598
<OTHER-SE>                                     456,661
<TOTAL-LIABILITIES-AND-EQUITY>               7,926,419
<INTEREST-LOAN>                                 93,268
<INTEREST-INVEST>                               55,891
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                               149,159
<INTEREST-DEPOSIT>                              38,137
<INTEREST-EXPENSE>                              72,816
<INTEREST-INCOME-NET>                           76,343
<LOAN-LOSSES>                                    1,605
<SECURITIES-GAINS>                                  60
<EXPENSE-OTHER>                                 63,397
<INCOME-PRETAX>                                 44,356
<INCOME-PRE-EXTRAORDINARY>                      28,913
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    28,913
<EPS-PRIMARY>                                      .46
<EPS-DILUTED>                                      .45
<YIELD-ACTUAL>                                    4.06
<LOANS-NON>                                     10,981
<LOANS-PAST>                                     3,883
<LOANS-TROUBLED>                                   852
<LOANS-PROBLEM>                                      0
<ALLOWANCE-OPEN>                                76,803
<CHARGE-OFFS>                                    2,803
<RECOVERIES>                                     1,197
<ALLOWANCE-CLOSE>                               76,802
<ALLOWANCE-DOMESTIC>                            17,824
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                         58,978
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 9
<LEGEND>
THIS RESTATED SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1997 AND RELATED CONSOLIDATED
STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1997 WHICH HAVE BEEN
RESTATED AS A RESULT OF POOLING OF INTERESTS.
</LEGEND>
<RESTATED> 
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-START>                             JAN-01-1997
<PERIOD-END>                               JUN-30-1997
<CASH>                                         477,411
<INT-BEARING-DEPOSITS>                          51,264
<FED-FUNDS-SOLD>                               779,912
<TRADING-ASSETS>                               437,994
<INVESTMENTS-HELD-FOR-SALE>                    470,711
<INVESTMENTS-CARRYING>                       1,819,387
<INVESTMENTS-MARKET>                         1,831,482
<LOANS>                                      4,378,203
<ALLOWANCE>                                     79,645
<TOTAL-ASSETS>                               8,766,162
<DEPOSITS>                                   5,799,304
<SHORT-TERM>                                 1,852,834
<LIABILITIES-OTHER>                            103,754
<LONG-TERM>                                    368,803
                                0
                                          0
<COMMON>                                       158,187
<OTHER-SE>                                     683,280
<TOTAL-LIABILITIES-AND-EQUITY>               8,766,162
<INTEREST-LOAN>                                197,739
<INTEREST-INVEST>                              120,645
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                               318,384
<INTEREST-DEPOSIT>                              80,334
<INTEREST-EXPENSE>                             156,290
<INTEREST-INCOME-NET>                          162,094
<LOAN-LOSSES>                                    3,040
<SECURITIES-GAINS>                                 492
<EXPENSE-OTHER>                                133,639
<INCOME-PRETAX>                                 91,824
<INCOME-PRE-EXTRAORDINARY>                      59,474
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    59,474
<EPS-PRIMARY>                                      .94
<EPS-DILUTED>                                      .93
<YIELD-ACTUAL>                                    4.08
<LOANS-NON>                                     13,645
<LOANS-PAST>                                     7,160
<LOANS-TROUBLED>                                   830
<LOANS-PROBLEM>                                  2,527
<ALLOWANCE-OPEN>                                76,803
<CHARGE-OFFS>                                    5,846
<RECOVERIES>                                     2,425
<ALLOWANCE-CLOSE>                               79,645
<ALLOWANCE-DOMESTIC>                            17,785
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                         61,860
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 9
<LEGEND>
THIS RESTATED SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1997 AND RELATED CONSOLIDATED
STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 WHICH HAVE BEEN
RESTATED AS A RESULT OF POOLIN OF INTERESTS.
</LEGEND>
<RESTATED> 
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-START>                             JAN-01-1997
<PERIOD-END>                               SEP-30-1997
<CASH>                                         581,778
<INT-BEARING-DEPOSITS>                          59,554
<FED-FUNDS-SOLD>                             1,368,467
<TRADING-ASSETS>                               223,561
<INVESTMENTS-HELD-FOR-SALE>                    418,961
<INVESTMENTS-CARRYING>                       2,124,385
<INVESTMENTS-MARKET>                         2,144,069
<LOANS>                                      4,656,606
<ALLOWANCE>                                     79,062
<TOTAL-ASSETS>                               9,823,149
<DEPOSITS>                                   6,359,112
<SHORT-TERM>                                 2,256,364
<LIABILITIES-OTHER>                            115,550
<LONG-TERM>                                    456,538
                                0
                                          0
<COMMON>                                       128,976
<OTHER-SE>                                     506,607
<TOTAL-LIABILITIES-AND-EQUITY>               9,823,149
<INTEREST-LOAN>                                308,489
<INTEREST-INVEST>                              187,739
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                               496,228
<INTEREST-DEPOSIT>                             128,867
<INTEREST-EXPENSE>                             242,081
<INTEREST-INCOME-NET>                          254,147
<LOAN-LOSSES>                                    4,750
<SECURITIES-GAINS>                                 652
<EXPENSE-OTHER>                                213,281
<INCOME-PRETAX>                                140,172
<INCOME-PRE-EXTRAORDINARY>                      91,007
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    91,007
<EPS-PRIMARY>                                     1.43
<EPS-DILUTED>                                     1.41
<YIELD-ACTUAL>                                    4.14
<LOANS-NON>                                     10,992
<LOANS-PAST>                                     8,021
<LOANS-TROUBLED>                                   693
<LOANS-PROBLEM>                                      0
<ALLOWANCE-OPEN>                                76,803
<CHARGE-OFFS>                                    9,964
<RECOVERIES>                                     3,805
<ALLOWANCE-CLOSE>                               79,062
<ALLOWANCE-DOMESTIC>                            17,181
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                         61,881
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1997 AND RELATED CONSOLIDATED
STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBE 31, 1997 INCLUDED IN THE
COMPANY'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED> 
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-START>                             JAN-01-1997
<PERIOD-END>                               DEC-31-1997
<CASH>                                         626,814
<INT-BEARING-DEPOSITS>                          61,871
<FED-FUNDS-SOLD>                               752,217
<TRADING-ASSETS>                                83,681
<INVESTMENTS-HELD-FOR-SALE>                    485,686
<INVESTMENTS-CARRYING>                       2,142,727
<INVESTMENTS-MARKET>                         2,162,588
<LOANS>                                      4,871,650
<ALLOWANCE>                                     80,481
<TOTAL-ASSETS>                               9,521,770
<DEPOSITS>                                   6,854,462
<SHORT-TERM>                                 1,375,825
<LIABILITIES-OTHER>                            166,776
<LONG-TERM>                                    469,247
                                0
                                          0
<COMMON>                                       122,222
<OTHER-SE>                                     533,238
<TOTAL-LIABILITIES-AND-EQUITY>               9,521,770
<INTEREST-LOAN>                                426,348
<INTEREST-INVEST>                              255,948
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                               682,296
<INTEREST-DEPOSIT>                             180,371
<INTEREST-EXPENSE>                             330,497
<INTEREST-INCOME-NET>                          351,799
<LOAN-LOSSES>                                    6,175
<SECURITIES-GAINS>                                 797
<EXPENSE-OTHER>                                301,218
<INCOME-PRETAX>                                187,573
<INCOME-PRE-EXTRAORDINARY>                     122,362
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   122,362
<EPS-PRIMARY>                                     1.92
<EPS-DILUTED>                                     1.89
<YIELD-ACTUAL>                                    4.18
<LOANS-NON>                                     11,907
<LOANS-PAST>                                     9,944
<LOANS-TROUBLED>                                   691
<LOANS-PROBLEM>                                      0
<ALLOWANCE-OPEN>                                76,803
<CHARGE-OFFS>                                   14,357
<RECOVERIES>                                     6,316
<ALLOWANCE-CLOSE>                               80,481
<ALLOWANCE-DOMESTIC>                            15,521
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                         64,960
        

</TABLE>

<PAGE>   1
                                                                    EXHIBIT 99.1




                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549




                                   ----------
                                    FORM 11-K
                                   ----------




                                  ANNUAL REPORT



                        Pursuant to Section 15(d) Of The
                         Securities Exchange Act of 1934


                      For the Year Ended December 31, 1997





                              ZIONS BANCORPORATION
                           EMPLOYEE STOCK SAVINGS PLAN




                              ZIONS BANCORPORATION
                           One South Main, Suite 1380
                           Salt Lake City, Utah 84111


<PAGE>   2
ITEM 1.    CHANGES IN THE PLAN

The Plan was completely amended and restated as of October 1, 1992, with certain
provisions retroactively effective as of January 1, 1989. In 1994, the Plan was
amended for the purpose of maintaining its qualification under the Internal
Revenue Code pursuant to the Tax Reform Act of 1986 and, in order to conform the
Plan to the requirements of the Unemployment Compensation Act of 1992 and the
Omnibus Budget Reconciliation Act of 1993. No changes were made in the Plan
during the year 1996.

ITEM 2.    CHANGES IN INVESTMENT POLICY

No material changes were made during the fiscal year in the policy with respect
to the kind of securities and other investments in which funds held under the
plan may be invested.

ITEM 3.    CONTRIBUTIONS UNDER THE PLAN

The Company's contributions are measured by reference to employee contributions
and are not discretionary.

ITEM 4.    PARTICIPATING EMPLOYEES

There were 3,240 participating employees in the Plan on December 31, 1997.

ITEM 5.    ADMINISTRATION OF THE PLAN

(a)   Zions Bancorporation is the Plan administrator. The Company's Board of
      Directors has appointed an Administrative Committee consisting of seven
      persons. The Committee has full power and authority to administer the Plan
      and to interpret its provisions. The present members of the Committee and
      their positions held are:

<TABLE>
<CAPTION>
                     Member                               Position - Company
          ---------------------------  --------------------------------------------------
<S>                                    <C>
          Clark B. Hinckley, Chairman  Senior Vice President of Zions Bancorporation

          Harris H. Simmons            President and Chief Executive Officer of Zions
                                       Bancorporation

          Dale M. Gibbons              Executive Vice President of Zions Bancorporation

          Peter K. Ellison             Executive Vice President of Zions First National Bank

          W. David Hemingway           Executive Vice President of Zions Bancorporation

          Richard G. Crandall          Vice President of Zions First National Bank

          Russell W. Miller            President of Zions Insurance Agency, Inc.
</TABLE>

      The address of each fiduciary listed above is One South Main, Suite 1380,
      Salt Lake City, Utah 84111.

(b)   No compensation is paid to the Committee members by the Plan. All expenses
      of the Plan and its administration are paid by the Company.

<PAGE>   3
ITEM 6.    CUSTODIAN OF INVESTMENTS

(a)   Zions First National Bank, One South Main, Salt Lake City, Utah 84111 is
      the custodian and trustee.

(b)   The custodian and trustee receive no compensation from the Plan.

ITEM 7.    REPORTS TO PARTICIPATING EMPLOYEES

Participating employees are furnished an annual statement reflecting the status
of their accounts as of the end of the fiscal year.

ITEM 8.    INVESTMENT OF FUNDS

Substantially all of the assets of the Plan are invested in securities of the
Company.

ITEM 9.    FINANCIAL STATEMENTS AND EXHIBITS

(a)   Financial Statements

        Independent Auditors' Report

        Statements of Net Assets Available for Benefits - December 31, 1997 and
        1996

        Statements of Changes in Net Assets Available for Benefits - Years ended
           December 31, 1997, 1996, and 1995

        Notes to Financial Statements

        Schedules - Schedules I, II, and III have been omitted for the reasons
           that they are not required or are not applicable, or the required
           information is shown in the financial statements or notes thereto.

(b)   Exhibits - None


<PAGE>   4
                          Independent Auditors' Report



The Trust Committee
Zions Bancorporation
   Employee Stock Savings Plan:


We have audited the accompanying statements of net assets available for benefits
of Zions Bancorporation Employee Stock Savings Plan as of December 31, 1997 and
1996, and the related statements of changes in net assets available for benefits
for each of the years in the three-year period ended December 31, 1997. These
financial statements are the responsibility of the plan administrator. 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
plan administrator, 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 net assets available for benefits of Zions
Bancorporation Employee Stock Savings Plan as of December 31, 1997 and 1996, and
the changes in net assets available for benefits for each of the years in the
three-year period ended December 31, 1997, in conformity with generally accepted
accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and Reportable Transactions for the year ended December
31, 1997, are presented for purpose of additional analysis and are not a
required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in the audit of the basic 1997 financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.


                                                     KPMG Peat Marwick LLP
March 13, 1998


<PAGE>   5
                              ZIONS BANCORPORATION
                           EMPLOYEE STOCK SAVINGS PLAN

                 Statements of Net Assets Available for Benefits

                           December 31, 1997 and 1996


<TABLE>
<CAPTION>
                                                                   1997             1996
                                                                -----------     -----------
<S>                                                             <C>             <C>
Assets:
   Cash                                                         $        --              --
   Investments, at market value:
     Zions Bancorporation common stock (approximate cost of
       $18,067,701 in 1997 and $13,775,899 in 1996)              63,033,316      34,433,048
     Short-term investments                                         173,627          99,353
                                                                -----------     -----------
                                                                 63,206,943      34,532,401
   Contributions receivable:
     Employees                                                       50,449          19,840
     Zions Bancorporation                                            25,224          12,542
   Dividends receivable                                             166,700              --
   Interest receivable                                                  333             243
                                                                -----------     -----------
         Total assets                                            63,449,649      34,565,026
                                                                -----------     -----------
Liabilities:
   Accounts payable                                                  56,614              --
   Excess contribution refunds                                       19,730          50,622
                                                                -----------     -----------
         Total liabilities                                           76,344          50,622
                                                                -----------     -----------
Net assets available for benefits                               $63,373,305      34,514,404
                                                                ===========     ===========
</TABLE>


See accompanying notes to financial statements.


<PAGE>   6
                              ZIONS BANCORPORATION
                           EMPLOYEE STOCK SAVINGS PLAN

           Statements of Changes in Net Assets Available for Benefits

                  Years ended December 31, 1997, 1996, and 1995



<TABLE>
<CAPTION>
                                                              1997            1996             1995
                                                           -----------     -----------     -----------
<S>                                                        <C>               <C>            <C>       
Additions to net assets attributed to:
   Investment income:
     Net appreciation in market value of investment in
       Zions Bancorporation common stock                   $26,586,307       7,966,631      13,215,084
     Dividends                                                 793,341         389,789         410,080
     Interest                                                    4,113           3,979           5,239
                                                           -----------     -----------     -----------
                                                            27,383,761       8,360,399      13,630,403
                                                           -----------     -----------     -----------
   Contributions:
     Employees                                               3,331,020       2,674,067       2,191,527
     Zions Bancorporation                                    1,645,785       1,295,816       1,062,640
                                                           -----------     -----------     -----------
                                                             4,976,805       3,969,883       3,254,167
                                                           -----------     -----------     -----------
       Rollover from affiliated plan                            89,279              --              --
                                                           -----------     -----------     -----------
         Total additions                                    32,449,845      12,330,282      16,884,570

Deductions from net assets attributed to:
   Benefits paid directly to participants                    3,590,944       2,109,580       2,620,037
   Rollover to affiliated plan                                      --         183,050              --
                                                           -----------     -----------     -----------
         Net increase                                       28,858,901      10,037,652      14,264,533
Net assets available for benefits:
   Beginning of year                                        34,514,404      24,476,752      10,212,219
                                                           -----------     -----------     -----------
   End of year                                             $63,373,305      34,514,404      24,476,752
                                                           ===========     ===========     ===========
</TABLE>


See accompanying notes to financial statements.


<PAGE>   7

                              ZIONS BANCORPORATION
                           EMPLOYEE STOCK SAVINGS PLAN

                          Notes to Financial Statements

                        December 31, 1997, 1996, and 1995


(1)     Description of the Plan

        (a)  General

             Zions Bancorporation Employee Stock Savings Plan (the Plan) is a
             single employer contributory plan that is designed to provide
             retirement benefits for eligible employees under either a pre-tax
             or post-tax salary reduction arrangement by offering employees an
             opportunity to acquire stock ownership in Zions Bancorporation (the
             Company). The Plan is subject to the provisions of the Employee
             Retirement Income Security Act of 1974 .

        (b)  Eligibility

             Participation in the Plan is voluntary. An employee is eligible to
             participate on January 1, or July 1, whichever coincides with, or
             immediately follows, the latter of the date on which the employee
             completes at least 1,000 hours of service during 12 continuous
             months and attains the age of 21. As of December 31, 1997 and 1996,
             there were 3,240 and 1,930 participants, respectively, in the Plan.

        (c)  Employee and Company Contributions

             Each eligible employee who elects to participate makes
             contributions ranging from one to five percent of their total
             compensation. Company contributions are equal to 50 percent of the
             amount contributed by the employee. The maximum amount a
             participant may contribute to the Plan in a calendar year, in
             conjunction with the Employee Investment Savings Plan, is $9,500
             for 1997.

        (d)  Allocation of Income or Loss

             Investment income is allocated to each participant's account in
             proportion to the investment shares held in that participant's
             account to the total of investment shares held in the Plan.


(2)     Summary of Significant Accounting Policies

        The following is a summary of significant accounting policies followed
        by the Plan in the preparation of its financial statements:

        (a)  Basis of Presentation

             The Plan's financial statements are presented on the accrual basis
             of accounting.


<PAGE>   8
                                       2

                              ZIONS BANCORPORATION
                           EMPLOYEE STOCK SAVINGS PLAN

                          Notes to Financial Statements


(2)     Summary of Significant Accounting Policies (continued)

        (b)  Use of Estimates

             In preparing the financial statements, the Company is required to
             make estimates and assumptions that affect the reported amounts of
             assets and liabilities as of the date of the statement of net
             assets available for benefits and additions to and deductions from
             net assets for the period. Actual results could differ from those
             estimates.

        (c)  Investments

             The investment in common stock of the Company is carried at its
             quoted market price in the accompanying financial statements. The
             investment in the short-term investment fund represents a cash
             equivalent. Purchases and sales of investments are recorded on a
             settlement-date basis which does not materially differ from using
             the trade-date basis required by generally accepted accounting
             principles.

        (d)  Costs of Administration

             All costs of administration are absorbed by the Company.

        (e)  Vesting and Payment of Benefits

             Employee contributions and the employees' share of the Company
             contributions are 100 percent vested at all times. Benefits are
             paid upon death, disability, retirement, or earlier subject to
             certain restrictions. Benefits are paid in shares of stock.


(3)     Income Taxes

        The Plan obtained its latest determination letter on June 5, 1996, in
        which the Internal Revenue Service stated that the Plan, as then
        designed, was in compliance with the applicable requirements of the
        Internal Revenue Code. The Plan has not been amended since receiving the
        determination letter.


(4)     Investments

        At December 31, 1997 and 1996, investment in common stock of the Company
        consisted of 1,389,164 and 331,087 shares, respectively.




<PAGE>   9
                              ZIONS BANCORPORATION
                           EMPLOYEE STOCK SAVINGS PLAN

           Item 27a - Schedule of Assets Held for Investment Purposes

                                December 31, 1997




<TABLE>
<CAPTION>
     Shares/                                                               Approxi-       Market
    Units held                        Description                          mate cost      value
   ------------  ----------------------------------------------------   ------------   ---------
<S>              <C>                                                    <C>            <C>
*  1,389,164     Zions Bancorporation common stock, without par value   $ 36,635,176   63,033,316
     173,627     Short-term investments                                      173,627   173,627
</TABLE>

* Party in interest



<PAGE>   10
                              ZIONS BANCORPORATION
                          EMPLOYEE STOCK SAVINGS PLAN

                 Item 27d - Schedule of Reportable Transactions

                          Year ended December 31, 1997



<TABLE>
<CAPTION>
                                            Shares
                                          purchased       Cost
                                          ---------     ---------
<S>                                       <C>
Purchase of investments -
   Zions Bancorporation common stock        107,427     $5,600,231
</TABLE>


<TABLE>
<CAPTION>
                                                          Shares                      Market
                                                       distributed     Cost (1)       value
                                                       -----------   -----------    ----------
<S>                                                    <C>           <C>            <C>
Distribution of investments -
   Zions Bancorporation common stock                       79,556     $3,424,151     3,424,151
</TABLE>


(1) Cost determined using the average-cost method applied on a
participant-by-participant basis.

<PAGE>   1
                                                                    EXHIBIT 99.2




                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549




                                   ----------
                                    FORM 11-K
                                   ----------




                                  ANNUAL REPORT



                        Pursuant to Section 15(d) Of The
                         Securities Exchange Act of 1934


                      For the Year Ended December 31, 1997





                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN




                              ZIONS BANCORPORATION
                           One South Main, Suite 1380
                           Salt Lake City, Utah 84111


<PAGE>   2
ITEM 1.  CHANGES IN THE PLAN

The Plan was completely amended and restated as of October 1, 1992, with certain
provisions retroactively effective as of January 1, 1989. In 1994, the Plan was
amended for the purpose of maintaining its qualification under Internal Revenue
Code pursuant to the Tax Reform Act of 1986 and, in order to conform the Plan to
the requirements of the Unemployment Compensation Act of 1992 and the Omnibus
Budget Reconciliation Act of 1993 and to facilitate the merger of the National
Bank of Arizona Savings and Retirement Plan and the Rio Salado Bancorp. Inc.
Retirement Plan into the Plan. No changes were made in the Plan during the year
1997.

ITEM 2.  CHANGES IN INVESTMENT POLICY

During 1997 the Plan increased the number of investment fund types it maintains
from four to nine. The separate types of investment funds maintained by the Plan
are as follows: (I) Company securities, which consists of Company common stock
and short-term investments pending the acquisition of Company securities; (ii)
Accessor Growth Portfolio, which seeks capital growth by investing primarily in
companies and industries from the 500 U.S. issuers with the largest market
capitalization and well-established records of growth in profits and earnings;
(iii) Accessor Value and Income Portfolio, which seeks a high level of current
income and capital growth by investing primarily in companies and industries
from the 500 U.S. issuers with the largest market capitalization and attractive
valuation levels; (iv) Accessor Small to Mid Cap Portfolio which seeks capital
growth by investing primarily in equity securities of small-to-medium-sized
companies with high growth potential; (v) Accessor International Equity
Portfolio which seeks the growth of capital by investing primarily in equity
securities of companies domiciled in countries other than the United States;
(vi) Accessor Intermediate Fixed-Income Portfolio which seeks the generation of
current income by investing in fixed-income securities; (vii) Accessor
Short-Intermediate Fixed-Income Portfolio which seeks preservation of capital
and generation of current income by investing primarily in fixed-income
securities, including government bonds, corporate bonds and mortgage-backed
securities; (viii) Accessor Mortgage Securities Portfolio which seeks a high
level of current income by investing in mortgage-related securities; and (ix)
U.S. Government Money Portfolio which seeks maximum current income consistent
with the preservation of principal and liquidity, investing primarily in
short-term obligations issued by or guaranteed by the U.S. Government, its
agencies or instrumentalities.

ITEM 3.  CONTRIBUTIONS UNDER THE PLAN

The Company's contributions are measured by reference to employee contributions
and are not discretionary.

ITEM 4.  PARTICIPATING EMPLOYEES

There were 3,240 participating employees in the Plan on December 31, 1997.



<PAGE>   3
ITEM 5.  ADMINISTRATION OF THE PLAN

(a)      Zions Bancorporation is the Plan administrator. The Company's Board of
         Directors has appointed an Administrative Committee consisting of six
         persons. The Committee has full power and authority to administer the
         Plan and to interpret its provisions. The present members of the
         Committee and their positions held are:

<TABLE>
<CAPTION>
            Member                                Position - Company
- ---------------------------       --------------------------------------------------------------
<S>                               <C>
Clark B. Hinckley, Chairman       Senior Vice President of Zions Bancorporation

Harris H. Simmons                 President and Chief Executive Officer of Zions Bancorporation

Dale M. Gibbons                   Executive Vice President of Zions Bancorporation

Peter K. Ellison                  Executive Vice President of Zions First National Bank

W. David Hemingway                Executive Vice President of Zions Bancorporation

Richard G. Crandall               Vice President of Zions First National Bank

Russell W. Miller                 President of Zions Insurance Agency, Inc.
</TABLE>

         The address of each fiduciary listed above is One South Main, Suite
         1380, Salt Lake City, Utah 84111.

(b)      No compensation is paid to the Committee members by the Plan. All
         expenses of the Plan and its administration are paid by the Company.

ITEM 6.  CUSTODIAN OF INVESTMENTS

(a)      Zions First National Bank, One South Main, Suite 1380, Salt Lake City,
         Utah 84111 is the custodian and trustee.

(b)      The custodian and trustee receive no compensation from the Plan.

ITEM 7.  REPORTS TO PARTICIPATING EMPLOYEES

Participating employees are furnished an annual statement reflecting the status
of their accounts as of the end of the fiscal year.

ITEM 8.  INVESTMENT OF FUNDS

As elected by participants, approximately seventy-eight percent of the assets of
the Plan are invested in securities of the Company, and approximately twenty
percent in Accessor Funds.



<PAGE>   4
ITEM 9.  FINANCIAL STATEMENTS AND EXHIBITS

(a)      Financial Statements

         Independent Auditors' Report

         Statements of Net Assets Available for Benefits - December 31, 1997 and
           1996

         Statements of Changes in Net Assets Available for Benefits - Years
           ended December 31, 1997, 1996, and 1995

              Notes to Financial Statements

              Schedules - Schedules I, II, and III have been omitted for the
                reasons that they are not required or are not applicable, or 
                the required information is shown in the financial statements or
                notes thereto.

(b)      Exhibits - None


<PAGE>   5
                          Independent Auditors' Report



The Trust Committee
Zions Bancorporation Employee
   Investment Savings Plan:


We have audited the accompanying statements of net assets available for benefits
of Zions Bancorporation Employee Investment Savings Plan as of December 31, 1997
and 1996, and the related statements of changes in net assets available for
benefits for each of the years in the three-year period ended December 31, 1997.
These financial statements are the responsibility of the plan administrator. 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
plan administrator, 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 net assets available for benefits of Zions
Bancorporation Employee Investment Savings Plan as of December 31, 1997 and
1996, and the changes in net assets available for benefits for each of the years
in the three-year period ended December 31, 1997, in conformity with generally
accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
For Investment Purposes and Reportable Transactions for the year ended December
31, 1997, are presented for the purpose of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in the audit of the basic 1997 financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.



                                                           KPMG Peat Marwick LLP

March 13, 1998


<PAGE>   6
                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

                 Statements of Net Assets Available for Benefits

                           December 31, 1997 and 1996



<TABLE>
<CAPTION>
                                                                         1997            1996
                                                                    ------------     ------------
<S>                                                                 <C>                    <C>   
Assets:
     Cash                                                           $    101,589           23,258
     Investments, at market value:
        Zions Bancorporation common stock (approximate cost
           $17,287,725 in 1997 and $12,542,694 in 1996)               83,746,551       48,439,248
        Fidelity mutual fund (approximate cost of $-0- in 1997
           and $8,098,504 in 1996)                                            --        8,316,142
        Money market fund                                                     --        4,682,245
        Fixed income fund (approximate cost of $-0- in 1997
           and $1,078,544 in 1996)                                            --        1,067,450
        Accessor funds (approximate cost of $21,575,897 in 1997
           and $-0- in 1996)                                          21,787,158               --
        Short-term investments                                            34,522           58,356
                                                                    ------------     ------------
                                                                     105,669,820       62,586,699
     Contributions receivable:
        Employees                                                         35,855           18,581
        Zions Bancorporation                                               6,737            3,883
     Participant loans receivable                                      1,581,233        1,366,918
     Dividends receivable                                                221,478          647,356
     Interest receivable                                                   3,227           20,340
     Wires receivable                                                     10,679               --
                                                                    ------------     ------------
               Total assets                                          107,529,029       64,643,777
Liabilities:
     Accounts payable                                                     40,483               --
     Excess contribution refunds                                              --          145,645
                                                                    ------------     ------------
               Total liabilities                                          40,483          145,645
                                                                    ------------     ------------
Net assets available for benefits                                   $107,488,546       64,498,132
                                                                    ============     ============
</TABLE>




See accompanying notes to financial statements.


<PAGE>   7
                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

           Statements of Changes in Net Assets Available for Benefits

                  Years ended December 31, 1997, 1996, and 1995



<TABLE>
<CAPTION>
                                                                1997             1996             1995
                                                            ------------     ------------     ------------
<S>                                                         <C>                <C>              <C>       
Additions to net assets attributed to:
     Investment income:
        Net appreciation in market value of investments     $ 36,818,202       11,544,479       22,676,536
        Dividends                                              3,053,076          732,045          826,171
        Capital gain distributions                                    --          560,791          645,849
        Interest                                                 279,067          361,768          312,332
                                                            ------------     ------------     ------------
                                                              40,150,345       13,199,083       24,460,888
                                                            ------------     ------------     ------------
     Contributions:
        Employees                                              2,715,037        2,049,269        1,639,255
        Zions Bancorporation                                     543,577          430,015          341,868
        Plan rollovers:
               Nonaffiliated plans                             4,132,145          342,799        1,050,327
               Affiliated plan                                        --          183,050               --
                                                            ------------     ------------     ------------
                                                               7,390,759        3,005,133        3,031,450
                                                            ------------     ------------     ------------

                     Total additions                          47,541,104       16,204,216       27,492,338
Deductions from net assets attributed to
     benefits paid directly to participants                    4,550,690        3,337,348        4,562,431
                                                            ------------     ------------     ------------

                     Net increase                             42,990,414       12,866,868       22,929,907
Net assets available for benefits:
     Beginning of year                                        64,498,132       51,631,264       28,701,357
                                                            ------------     ------------     ------------
     End of year                                            $107,488,546       64,498,132       51,631,264
                                                            ============     ============     ============
</TABLE>



See accompanying notes to financial statements.
<PAGE>   8

                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

                          Notes to Financial Statements

                        December 31, 1997, 1996, and 1995



(1)      Description of the Plan

         (a)  General

              Zions Bancorporation Employee Investment Savings Plan (the Plan)
              is a single employer contributory plan that is designed to provide
              retirement benefits for eligible employees under a pretax salary
              reduction (deferral) arrangement and, if employees so elect, an
              opportunity to acquire stock ownership in Zions Bancorporation
              (the Company). The Plan is subject to the provisions of the
              Employee Retirement Income Security Act of 1974.

       (b)    Eligibility

              Participation in the Plan is voluntary. An employee is eligible to
              become a participant on January 1 or July 1, whichever coincides
              with, or immediately follows, the latter of the date on which the
              employee completes at least 1,000 hours of service during 12
              continuous months and attains the age of 21. At December 31, 1997
              and 1996, there were 3,240 and 1,647 participants, respectively,
              in the Plan.

       (c)    Employee and Company Contributions

              Participants may elect to contribute one to fifteen percent of
              their compensation to the Employee Investment Savings Plan,
              limited by participant contributions made to the Zions
              Bancorporation Employee Stock Savings Plan. The Company
              contributes an amount equal to 25 percent of the contribution made
              by each participant up to ten percent of their compensation with
              no match made on contributions in excess thereof. The maximum
              amount a participant may contribute to the Plan in a calendar year
              is the lesser of fifteen percent of their compensation, or $9,500
              for 1997.

       (d)    Allocation of Income or Loss

              Investment income is allocated to each participant's account in
              proportion to the investment shares held in that participant's
              account to the total investment shares held in the Plan.

       (e)    Vesting and Payment of Benefits

              Employee contributions and the employees' share of the Company
              contributions are 100 percent vested at all times. Benefits are
              paid upon death, disability, retirement, or earlier, subject to
              certain restrictions. Benefits are paid in shares of stock and/or
              cash pursuant to the nature of the investment vehicle selected by
              the participant.
<PAGE>   9
                                       2

                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

                         Notes to Financial Statements


       (f)    Investment Options

              As of December 31, 1997, the Plan maintains two separate types of
              investment funds: (i) Company securities, which consist of Company
              stock; and (ii) Accessor Funds, which invests primarily in a
              diversified portfolio of U.S. common stocks, government, mortgage,
              and corporate bonds, and other short-term investments. During 1997
              Fidelity mutual fund, money market fund, and fixed income fund
              investment options were replaced with the Accessor Funds, which
              contain eight investment options.

       (g)    Participant Loans

              Beginning October 1, 1992, a participant who is an active employee
              may apply for and obtain a loan of up to 50 percent of the
              eligible amounts in their account. Loan terms may not exceed five
              years and must be secured by the participant's account. Loan
              repayment is made through payroll deduction.


(2)    Summary of Significant Accounting Policies

       The following is a summary of significant accounting policies followed by
       the Plan in the preparation of its financial statements:

       (a)    Basis of Presentation

              The Plan's financial statements are presented on the accrual basis
              of accounting.

              In preparing the financial statements, the Company is required to
              make estimates and assumptions that affect the reported amounts of
              assets and liabilities as of the date of the statement of net
              assets available for benefits and additions to and deductions from
              net assets for the period. Actual results could differ from those
              estimates.

       (b)    Investments

              Investments in common stock of Zions Bancorporation, Fidelity
              mutual fund, and fixed income fund shares are carried at market
              value in the accompanying financial statements. The investments in
              the money market fund and short-term investments represent cash
              equivalents. Purchases and sales of investments are recorded on a
              settlement-date basis, which does not materially differ from using
              the trade-date basis required by generally accepted accounting
              principles.

       (c)    Cost of Administration

              All costs of administration are absorbed by the Company.
<PAGE>   10
                                       3

                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

                          Notes to Financial Statements


(3)    Income Taxes

       The Plan obtained its latest determination letter on June 5, 1996, in
       which the Internal Revenue Service stated that the Plan, as then
       designed, was in compliance with the applicable requirements of the
       Internal Revenue Code. The Plan has not been amended since receiving the
       determination letter.


(4)    Investments

       The investments in common stock of the Company and the Fidelity mutual
       fund, consist of 1,845,654 and 1,863,048 shares and -0- and 377,320
       shares at December 31, 1997 and 1996, respectively. The investment in the
       fixed income fund consists of -0- and 50,855 shares and the investment in
       the Accessor Funds consists of 3,460,159 and -0- shares at December 31,
       1997 and 1996, respectively.

       The net appreciation in market value for each of the years in the
       three-year period ended December 31, 1997, in comparison to the market
       value at the beginning of each year is as follows:

<TABLE>
<CAPTION>
                  Investment                                     1997              1996               1995
                                                             ------------      ------------      ------------
<S>                                                          <C>                 <C>               <C>       
         Zions Bancorporation common stock                   $ 35,955,118        11,090,943        21,983,923
         Fidelity mutual fund                                   2,009,330           478,254           625,633
         Fixed income fund                                         10,674           (24,718)           66,980
         Accessor fund                                         (1,156,920)               --                --
                                                             ------------      ------------      ------------
                        Net appreciation in market value     $ 36,818,202        11,544,479        22,676,536
                                                             ============      ============      ============
</TABLE>
<PAGE>   11
                                       4

                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

                         Notes to Financial Statements



(5)    Financial Information by Fund Type

       Financial information by fund type as of December 31, 1997 and 1996, and
       for each of the years in the three-year period ended December 31, 1997,
       are as follows:

           Statement of Net Assets Available for Benefits by Fund Type
                                December 31, 1997


<TABLE>
<CAPTION>
                                                             Zions
                                                            Bancorp-
                                                            oration          Partici-
                                                             common            pant        Accessor
                                                             stock            loans          funds           Total
                                                          -----------     -----------     -----------     -----------
<S>                                                       <C>             <C>             <C>             <C>    
         Assets:
              Cash                                        $        39          47,005          54,545         101,589
              Investments, at market value:
                    Zions Bancorporation common stock      83,746,551              --              --      83,746,551
                    Accessor fund                                  --                      21,787,158      21,787,158
                    Short-term investments                     34,522              --              --          34,522
                                                          -----------     -----------     -----------     -----------
                                                           83,781,112          47,005      21,841,703     105,669,820

              Contributions receivable:
                    Employees                                  15,626              --          20,229          35,855
                    Zions Bancorporation                        3,049              --           3,688           6,737
              Participant loans receivable                         --       1,581,233              --       1,581,233
              Dividends receivable                            221,478              --              --         221,478
              Interest receivable                                 818           2,409              --           3,227
              Wires receivable                                     --                          10,679          10,679
                                                          -----------       ---------      ----------     -----------

                        Total assets                       84,022,083       1,630,647      21,876,299     107,529,029

         Liabilities  - accounts payable                       21,847           1,810          16,826          40,483
                                                          -----------       ---------      ----------     -----------

         Net assets available for benefits                $84,000,236       1,628,837      21,859,473     107,488,546
                                                          ===========     ===========     ===========     ===========
</TABLE>



<PAGE>   12
                                       5

                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

                         Notes to Financial Statements


(5)    Financial Information by Fund Type (continued)

           Statement of Net Assets Available for Benefits by Fund Type
                                December 31, 1996

<TABLE>
<CAPTION>
                                            Zions
                                           Bancorp-
                                           oration         Fidelity                                         Partici-
                                           common           mutual          Money          Fixed            pant
                                           stock             fund           market         income           loans          Total
                                         -----------     -----------     -----------    -----------     -----------     -----------
<S>                                      <C>               <C>             <C>            <C>             <C>            <C>       
   Assets:
     Cash                                $    20,157              --              --             --           3,101          23,258
     Investments, at market value:
           Zions Bancorporation
               common stock               48,439,248              --              --             --              --      48,439,248
           Fidelity mutual fund                   --       8,316,142              --             --              --       8,316,142
           Money market fund                      --              --       4,682,245             --              --       4,682,245
           Fixed income fund                      --              --              --      1,067,450              --       1,067,450
           Short-term investments             33,112          23,166              --          2,078              --          58,356
                                         -----------     -----------     -----------    -----------     -----------     -----------

                                          48,472,360       8,339,308       4,682,245      1,069,528              --      62,563,441

     Contributions receivable:
           Employees                           5,442           8,986           2,195          1,958              --          18,581
           Zions Bancorporation                1,112           1,911             508            352              --           3,883
     Participant loans receivable                 --              --              --             --       1,366,918       1,366,918
     Dividends receivable                         --         647,356              --             --              --         647,356
     Interest receivable                          86             127          20,098             29              --          20,340
                                         -----------     -----------     -----------    -----------     -----------     -----------

               Total assets               48,499,157       8,997,688       4,705,046      1,071,867       1,370,019      64,643,777

Liabilities-excess contribution refunds       54,658          59,471          24,887          6,629              --         145,645
   
                                         -----------     -----------     -----------    -----------     -----------     -----------
    

Net assets available for benefits        $48,444,499       8,938,217       4,680,159      1,065,238       1,370,019      64,498,132
                                         ===========     ===========     ===========    ===========     ===========     ===========
</TABLE>


<PAGE>   13
                                       6

                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN
                                        
                         Notes to Financial Statements


(5)    Financial Information by Fund Type (continued)

     Statement of Changes in Net Assets Available for Benefits by Fund Type
                          Year ended December 31, 1997


<TABLE>
<CAPTION>
                                                   Zions
                                                  Bancorp-
                                                  oration        Fidelity                                              Partici- 
                                                  common          mutual             Money              Fixed             pant     
                                                  stock            fund              market             income           loans     
                                              ------------      ------------      ------------      ------------      ------------ 
<S>                                           <C>               <C>               <C>               <C>               <C>          
    Additions to net assets
       attributed to:
      Investment income:
           Net appreciation
               (depreciation) in
              market value of
              investments                     $ 35,955,118         2,009,330                --            10,674                -- 
           Dividends                             1,081,318                --                --            39,451                -- 
           Interest                                  6,377               665           137,608               721           132,316 
                                              ------------      ------------      ------------      ------------      ------------ 

                                                37,042,813         2,009,995           137,608            50,846           132,316 
                                              ------------      ------------      ------------      ------------      ------------ 

     Contributions:
        Employees                                1,209,640           597,263           137,829            65,191                -- 
        Zions Bancorporation                       256,049           129,112            12,726            11,954                -- 
        Plan rollovers                           1,559,859           102,668            38,611            39,018                -- 
                                              ------------      ------------      ------------      ------------      ------------ 

                                                 3,025,548           829,043           189,166           116,163                -- 
                                              ------------      ------------      ------------      ------------      ------------ 

     Principal loan payments                       455,302            74,763            42,000             3,000          (716,095)
                                              ------------      ------------      ------------      ------------      ------------ 

               Total additions                  40,523,663         2,913,801           368,774           170,009          (583,779)

Deductions from net assets attributed to:
        Benefits paid directly to
           participants                          3,069,345           242,982           199,921            51,330            99,474 
        Loans disbursed                            552,521           169,997            69,472                --          (942,071)
                                              ------------      ------------      ------------      ------------      ------------ 

               Total deductions                  3,621,866           412,979           269,393            51,330          (842,597)
                                              ------------      ------------      ------------      ------------      ------------ 

Interfund transfers                             (1,346,059)      (11,439,039)       (4,779,540)       (1,183,917)               -- 
                                              ------------      ------------      ------------      ------------      ------------ 

               Net increase
                  (decrease)                    35,555,738        (8,938,217)       (4,680,159)       (1,065,238)          258,818 

Net assets available for benefits:
        Beginning of year                       48,444,499         8,938,217         4,680,159         1,065,238         1,370,019 
                                              ------------      ------------      ------------      ------------      ------------ 
        End of year                           $ 84,000,237                --                --                --         1,628,837 
                                              ============      ============      ============      ============      ============ 
</TABLE>




<TABLE>
<CAPTION>
                                           
                                           
                                           
                                                 Accessor
                                                   funds*          Total
                                               ------------      ------------
<S>                                            <C>               <C>
    Additions to net assets
       attributed to:
      Investment income:
           Net appreciation
               (depreciation) in
              market value of
              investments                        (1,156,920)       36,818,202
           Dividends                              1,932,307         3,053,076
           Interest                                   1,380           279,067
                                               ------------      ------------

                                                    776,767        40,150,345
                                               ------------      ------------

     Contributions:
        Employees                                   705,114         2,715,037
        Zions Bancorporation                        133,736           543,577
        Plan rollovers                            2,391,989         4,132,145
                                               ------------      ------------

                                                  3,230,839         7,390,759
                                               ------------      ------------

     Principal loan payments                        141,030                --
                                               ------------      ------------

               Total additions                    4,148,636        47,541,104

Deductions from net assets attributed to:
        Benefits paid directly to
           participants                             887,638         4,550,690
        Loans disbursed                             150,081                --
                                               ------------      ------------

               Total deductions                   1,037,719         4,550,690
                                               ------------      ------------

Interfund transfers                              18,748,555                --
                                               ------------      ------------

               Net increase
                  (decrease)                     21,859,472        42,990,414

Net assets available for benefits:
        Beginning of year                                --        64,498,132
                                               ------------      ------------
        End of year                              21,859,472       107,488,546
                                               ============      ============
</TABLE>



















*   Accessor funds shown in detail at note 6.

<PAGE>   14
                                       7

                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

                         Notes to Financial Statements

(5)    Financial Information by Fund Type (continued)

     Statement of Changes in Net Assets Available for Benefits by Fund Type
                          Year ended December 31, 1996


<TABLE>
<CAPTION>
                                                   Zions
                                                   Bancorp-
                                                   oration          Fidelity                                           Partici-
                                                   common            mutual           Money            Fixed             pant
                                                   stock             funds            market           income            loans     
                                                ------------      ------------     ------------     ------------      ------------ 
<S>                                             <C>                  <C>              <C>              <C>               <C>       
Additions to net assets attributed to:
     Investment income:
        Net appreciation (depreciation) in
           market value of investments          $ 11,090,943           478,254               --          (24,718)               -- 
        Dividends                                    581,303            75,331               --           75,411                -- 
        Capital gain distributions                        --           560,791               --               --                -- 
        Interest                                       1,972             1,695          222,032              456           135,613 
                                                ------------      ------------     ------------     ------------      ------------ 
                                                  11,674,218         1,116,071          222,032           51,149           135,613 
                                                ------------      ------------     ------------     ------------      ------------ 

     Contributions:
        Employees                                    829,922           898,971          220,000          100,376                -- 
        Zions Bancorporation                         172,015           188,689           51,176           18,135                -- 
        Plan rollovers                               250,017            80,839           15,152          179,841                -- 
                                                ------------      ------------     ------------     ------------      ------------ 
                                                   1,251,954         1,168,499          286,328          298,352                -- 
                                                ------------      ------------     ------------     ------------      ------------ 
Principal loan payments                              462,897           119,887          131,170           25,426          (739,380)
                                                ------------      ------------     ------------     ------------      ------------ 

                  Total additions                 13,389,069         2,404,457          639,530          374,927          (603,767)
Deductions from net assets attributed to:
     Benefits paid directly to participants        2,332,669           453,309          317,861          137,634            95,875 
     Loans disbursed                                 465,087           179,736           81,083           11,244          (737,150)
                                                ------------      ------------     ------------     ------------      ------------ 

                  Total deductions                 2,797,756           633,045          398,944          148,878          (641,275)
                                                ------------      ------------     ------------     ------------      ------------ 

Interfund transfers                                 (313,598)          499,516           69,855         (255,773)               -- 
                                                ------------      ------------     ------------     ------------      ------------ 

                  Net increase (decrease)         10,277,715         2,270,928          310,441          (29,724)           37,508 
Net assets available for benefits:
     Beginning of year                            38,166,784         6,667,289        4,369,718        1,094,962         1,332,511 
                                                ------------      ------------     ------------     ------------      ------------ 

     End of year                                $ 48,444,499         8,938,217        4,680,159        1,065,238         1,370,019 
                                                ============      ============     ============     ============      ============ 
</TABLE>



<TABLE>
<CAPTION>
                                                     Total
                                                  ------------
<S>                                                 <C>       
Additions to net assets attributed to:
     Investment income:
        Net appreciation (depreciation) in
           market value of investments              11,544,479
        Dividends                                      732,045
        Capital gain distributions                     560,791
        Interest                                       361,768
                                                  ------------
                                                    13,199,083
                                                  ------------

     Contributions:
        Employees                                    2,049,269
        Zions Bancorporation                           430,015
        Plan rollovers                                 525,849
                                                  ------------
                                                     3,005,133
                                                  ------------
Principal loan payments                                     --
                                                  ------------

                  Total additions                   16,204,216
Deductions from net assets attributed to:
     Benefits paid directly to participants          3,337,348
     Loans disbursed                                        --
                                                  ------------

                  Total deductions                   3,337,348
                                                  ------------

Interfund transfers                                         --
                                                  ------------

                  Net increase (decrease)           12,866,868
Net assets available for benefits:
     Beginning of year                              51,631,264
                                                  ------------

     End of year                                    64,498,132
                                                  ============
</TABLE>

<PAGE>   15
                                       8


                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

                         Notes to Financial Statements


(5)    Financial Information by Fund Type (continued)


     Statement of Changes in Net Assets Available for Benefits by Fund Type
                          Year ended December 31, 1995


<TABLE>
<CAPTION>
                                                    Zions
                                                   Bancorp-
                                                   oraton          Fidelity                                                   
                                                   common           mutual            Money             Fixed        Participant
                                                    stock            fund             market            income           loans    
                                                ------------      ------------     ------------     ------------     ------------ 
<S>                                             <C>                  <C>              <C>              <C>              <C>       
Additions to net assets attributed to:
     Investment income:
        Net appreciation in market value of
           investments                          $ 21,983,923           625,633               --           66,980               -- 
        Dividends                                    690,743            83,833               --           51,595               -- 
        Capital gain distributions                        --           645,183               --              666               -- 
        Interest                                      70,994            12,278          226,088            2,972               -- 
                                                ------------      ------------     ------------     ------------     ------------ 

                                                  22,745,660         1,366,927          226,088          122,213               -- 
                                                ------------      ------------     ------------     ------------     ------------ 
     Contributions:
        Employees                                    630,280           698,809          231,990           78,176               -- 
        Zions Bancorporation                         126,185           148,775           54,166           12,742               -- 
        Plan rollovers                               598,919           164,479          260,825           26,104               -- 
                                                ------------      ------------     ------------     ------------     ------------ 

                                                   1,355,384         1,012,063          546,981          117,022               -- 
                                                ------------      ------------     ------------     ------------     ------------ 

     Principal loan payments                         527,843            60,499           96,658           10,522         (695,522)
                                                ------------      ------------     ------------     ------------     ------------ 

               Total additions                    24,628,887         2,439,489          869,727          249,757         (695,522)

Deductions from net assets attributed to:
     Benefits paid directly to participants        2,793,649           787,468          846,207          135,107               -- 
     Loans disbursed                                 327,738           135,213          126,318           12,750         (602,019)
                                                ------------      ------------     ------------     ------------     ------------ 

               Total deductions                    3,121,387           922,681          972,525          147,857         (602,019)
                                                ------------      ------------     ------------     ------------     ------------ 
Interfund transfers                               (1,984,548)          762,242          839,181          383,125               -- 
                                                ------------      ------------     ------------     ------------     ------------ 

               Net increase (decrease)            19,522,952         2,279,050          736,383          485,025          (93,503)

Net assets available for benefits:
     Beginning of year                            18,643,832         4,388,239        3,633,335          609,937        1,426,014 
                                                ------------      ------------     ------------     ------------     ------------ 

     End of year                                $ 38,166,784         6,667,289        4,369,718        1,094,962        1,332,511 
                                                ============      ============     ============     ============     ============ 
</TABLE>




<TABLE>
<CAPTION>
                                                       Total
                                                   ------------
<S>                                                  <C>       
Additions to net assets attributed to:
     Investment income:
        Net appreciation in market value of
           investments                               22,676,536
        Dividends                                       826,171
        Capital gain distributions                      645,849
        Interest                                        312,332
                                                   ------------

                                                     24,460,888
                                                   ------------
     Contributions:
        Employees                                     1,639,255
        Zions Bancorporation                            341,868
        Plan rollovers                                1,050,327
                                                   ------------

                                                      3,031,450
                                                   ------------

     Principal loan payments                                 --
                                                   ------------

               Total additions                       27,492,338

Deductions from net assets attributed to:
     Benefits paid directly to participants           4,562,431
     Loans disbursed                                         --
                                                   ------------

               Total deductions                       4,562,431
                                                   ------------
Interfund transfers                                          --
                                                   ------------

               Net increase (decrease)               22,929,907

Net assets available for benefits:
     Beginning of year                               28,701,357
                                                   ------------

     End of year                                     51,631,264
                                                   ============
</TABLE>
<PAGE>   16
                                       9


                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

                         Notes to Financial Statements


(6)    Financial Information by Accessor Funds Investment Option



          Statement of Changes in Accessor Funds Net Assets Available
                       for Benefits by Investment Option
                          Year ended December 31, 1997


<TABLE>
<CAPTION>
                                                                                                                                    
                                                                                                                                    
                                                                                                             Inter-                 
                                                              Value                         Inter-           mediate                
                                                               and           Small to      national          fixed         Mortgage 
                                                Growth        income          mid-cap       equity           income       securities
                                              ----------     ----------     ----------     ----------      ----------     ----------
<S>                                           <C>            <C>            <C>            <C>             <C>            <C>       
Additions to net assets
   attributed to:
     Investment income                        $  118,302        220,511        394,169       (157,230)         17,908        110,284
     Contributions                               652,443        465,441        575,766        454,634         175,634        421,771
     Principal loan
        payments                                  36,217         16,821         26,259         22,879           3,549         11,886
                                              ----------     ----------     ----------     ----------      ----------     ----------

               Total
                  additions                      806,962        702,773        996,194        320,283         197,091        543,941

Deductions from net assets attributed to:
        Benefits paid
           directly to
           participants                          108,867         31,295         47,247         44,652          13,516         33,046
        Loans disbursed                           38,541         17,901         27,944         24,347           3,777         12,649
                                              ----------     ----------     ----------     ----------      ----------     ----------

               Total deductions
                                                 147,408         49,196         75,191         68,999          17,293         45,695
                                              ----------     ----------     ----------     ----------      ----------     ----------

Interfund transfers                            3,620,877      2,732,600      3,192,599      2,477,724       1,047,455      2,572,749
                                              ----------     ----------     ----------     ----------      ----------     ----------

               Net increase                    4,280,431      3,386,177      4,113,602      2,729,008       1,227,253      3,070,995

Net assets available for benefits:
        Beginning of year                             --             --             --             --              --             --
                                              ----------     ----------     ----------     ----------      ----------     ----------

        End of year                           $4,280,431      3,386,177      4,113,602      2,729,008       1,227,253      3,070,995
                                              ==========     ==========     ==========     ==========      ==========     ==========
</TABLE>




<TABLE>
<CAPTION>
                                                  Short-
                                                  term          Fidelity
                                                  inter-          U.S.
                                                  mediate        govern-
                                                   fixed           ment
                                                   income        reserves         Total
                                                 ----------     ----------     ----------
<S>                                              <C>            <C>            <C>    
Additions to net assets
   attributed to:
     Investment income                               18,387         54,436        776,767
     Contributions                                   91,294        393,856      3,230,839
     Principal loan
        payments                                      2,411         21,008        141,030
                                                 ----------     ----------     ----------

               Total
                  additions                         112,092        469,300      4,148,636

Deductions from net assets attributed to:
        Benefits paid
           directly to
           participants                                 730        608,285        887,638
        Loans disbursed                               2,566         22,356        150,081
                                                 ----------     ----------     ----------

               Total deductions
                                                      3,296        630,641      1,037,719
                                                 ----------     ----------     ----------

Interfund transfers                                 532,988      2,571,563     18,748,555
                                                 ----------     ----------     ----------

               Net increase                         641,784      2,410,222     21,859,472

Net assets available for benefits:
        Beginning of year                                --             --             --
                                                 ----------     ----------     ----------

        End of year                                 641,784      2,410,222     21,859,472
                                                 ==========     ==========     ==========
</TABLE>


<PAGE>   17
                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN


           Item 27a - Schedule of Assets Held for Investment Purposes

                                December 31, 1997



<TABLE>
<CAPTION>
          Shares/                                                               Approxi-        
        Units held                        Description                           mate cost       Market value
     ----------------  ----------------------------------------------------   ------------      -------------
<S>                    <C>                                                    <C>               <C>       
*   1,845,654          Zions Bancorporation common stock, without par value   $ 46,246,903         83,746,551
    3,460,159          Accessor Funds                                           21,575,897         21,787,158
                                                                              -----------        ------------
                                                                                67,822,800        105,533,709

                       Short-term investments                                       34,522             34,522
                                                                              ------------       ------------
                                                                              $ 67,857,322        105,568,231
                                                                              ============        ===========
</TABLE>

* Party in interest


<PAGE>   18
                              ZIONS BANCORPORATION
                        EMPLOYEE INVESTMENT SAVINGS PLAN

                 Item 27d - Schedule of Reportable Transactions

                          Year ended December 31, 1997



<TABLE>
<CAPTION>
                                                                Shares
                                                               purchased       Cost
                                                               ----------    ----------
<S>                                                            <C>            <C>      
Purchase of investments -
     Zions Bancorporation common stock, without par value        155,848     $6,679,057
     Short-term investment fund                                7,811,654      7,811,654
</TABLE>


<TABLE>
<CAPTION>
                                                                 Units                       Selling
                                                              distributed       Cost          price            Net gain
                                                              -----------       ----          -----            --------
<S>                                                           <C>            <C>            <C>             <C>
Distribution of investments -
     Zions Bancorporation common stock, without par value         96,477     $2,873,309      4,471,941      1,598,632
     Fidelity Disciplined Equity Fund                            467,032      9,493,266     12,394,759      2,901,493
     Zions Bancorporation money market account                 5,621,301      5,621,301      5,621,301             --
     Short-term investment fund                                7,810,244      7,810,244      7,810,244             --
</TABLE>



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