ZIONS BANCORPORATION /UT/
S-4, 1998-07-20
NATIONAL COMMERCIAL BANKS
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         As filed with the Securities and Exchange Commission on , 1998

                                                           Registration No. 333-


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   -----------

                                    FORM S-4
                             REGISTRATION STATEMENT
                                      Under
                           THE SECURITIES ACT OF 1933

                                  -----------

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

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

</TABLE>

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

                                  -----------

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


                                   Copies to:

 Brian D. Alprin, Esq.                  Ernest J. Panasci, Esq.
 Laurence S. Lese, Esq.                 Slivka Robinson Waters & O'Dorisio, P.C.
 Duane, Morris & Heckscher LLP          1099 Eighteenth Street
 Suite 700                              Suite 2600
 1667 K Street, N.W.                    Denver, CO  80202-1926
 Washington, D.C.  20006-1608           (303) 297-2600
 (202) 776-7800


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



<PAGE>


<TABLE>
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- -------------------------------------------------------------------------------------------------------------------------
                                              CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
                                                                  Proposed               Proposed
                                                                  maximum                maximum             
       Title of securities to be         Amount to be        offering price per         aggregate           Amount of 
              registered                  registered               share            offering price(1)     registration fee 
- -------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                         <C>                 <C>                      <C>   
Common Stock, no par value              684,466 Shares              NA                  $8,482,000               $2,503
=========================================================================================================================
</TABLE>

(1)      Estimated solely for the purpose of calculating the registration fee in
         accordance with Rule 457(f)(2) based upon the book value of the
         outstanding shares of Common Stock, $10.00 par value, of Kersey Bancorp
         on March 31, 1998 (the latest practicable date prior to filing the
         registration statement) of $8,482,000, such stock to be canceled upon
         effectiveness of the Reorganization described in this Proxy
         Statement/Prospectus.

         The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting under
Section 8(a), may determine.

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

<PAGE>



                                 KERSEY BANCORP
                                 Proxy Statement
                                       For
                         Special Meeting of Shareholders
                           To be Held on ______, 1998

                                       and

                              ZIONS BANCORPORATION
                                   Prospectus
                             Up to 684,466 Shares of
                                  Common Stock

         Kersey Bancorp (the "Company") is furnishing this Proxy
Statement/Prospectus to its shareholders in connection with the solicitation of
proxies by its Board of Directors for use at a special meeting of shareholders
of the Company which will be held on ______, 1998 (the "Special Meeting") and at
any adjournments or postponements of the Special Meeting. The Company has first
mailed this Proxy Statement/Prospectus and accompanying notice of special
meeting and form of proxy ("Proxy") on or about ______, 1998 to the shareholders
of the Company of record as of ______, 1998 (the "Record Date").

         At the Special Meeting, the holders of Company common stock, par value
$10.00 per share (the "Company Common Stock") will consider and vote upon a
proposal to approve and adopt the Agreement and Plan of Reorganization, dated as
of May 8, 1998, among the Company, the Company's wholly-owned subsidiary,
Independent Bank (the "Bank"), Zions Bancorporation ("Zions"), Zions'
wholly-owned subsidiary, Val Cor Bancorporation, Inc. ("Val Cor"), and Val Cor's
wholly-owned subsidiary, Vectra Bank Colorado, National Association
(successor-in interest to Bank Colorado, National Association) ("Vectra Bank"),
an Agreement of Merger between the Company and Val Cor and an Agreement of
Merger between the Bank and Vectra Bank (collectively the "Plan of
Reorganization"). If the Company's shareholders approve the Plan of
Reorganization and all other conditions are met, the Company will merge with and
into Val Cor, with Val Cor being the surviving corporation (the "Holding Company
Merger") and the Bank will merge with and into Vectra Bank, with Vectra Bank
being the surviving national banking association (the "Bank Merger";
collectively the Bank Merger and the Holding Company Merger are referred to as
the "Reorganization").

         As a result of the Reorganization, Company shareholders will receive,
in exchange for each share of Company Common Stock, that number of shares of
Zions Common Stock, no par value ("Zions Common Stock") calculated by dividing
the Purchase Price (as defined), a maximum of $28,200,000, by the Average
Closing Price (as defined), and by further dividing the number so reached by the
number of shares of Company Common Stock issued and outstanding as of the
Effective Date (as defined) of the Reorganization. Assuming the Purchase Price
equaled $28,200,000 and the Average Closing Price was $______ upon the Effective
Date, Company shareholders under such circumstances would have been entitled to
receive approximately ______ shares of Zions Common Stock for each share of
Company Common Stock or an equivalent market value of $______ per share of
Company Common Stock.

         For the action of the shareholders to be effective, holders of
two-thirds of the issued and outstanding shares of Company Common Stock must
vote in favor of the Reorganization. All regulatory approvals have [NOT YET]
been obtained.

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

         Neither the Securities and Exchange Commission Nor Any State Securities
Commission Has Approved or Disapproved the Shares of Zions Common Stock to Be
Issued in the Reorganization or Determined If this Proxy Statement/Prospectus is
Truthful or Complete. Any Representation to the Contrary Is a Criminal Offense.

         The Shares of Zions Common Stock Offered Hereby Are Not Savings
Accounts, Deposits or Other Obligations of a Bank or Savings Association and Are
Not Insured by the Federal Deposit Insurance Corporation or Any Other
Governmental Agency.

          The date of this Proxy Statement/Prospectus is ______, 1998.


<PAGE>



                                TABLE OF CONTENTS

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                                                                                            Page
                                                                                            ----
<S>      <C>                                                                                  <C>
SUMMARY  ......................................................................................1

CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING INFORMATION...................................13

WHERE YOU CAN FIND MORE INFORMATION...........................................................13

ZIONS DOCUMENTS INCORPORATED BY REFERENCE.....................................................15

THE SPECIAL MEETING...........................................................................15
         Date, Time, .........................................................................15
         Matters to be Considered at the Special Meeting......................................16
         Record Date; Voting Rights...........................................................16
         Voting and Revocation of Proxies.....................................................16
         Solicitation of Proxies..............................................................16
         Quorum; Vote Required for Approval...................................................17
         Security Ownership by Certain Beneficial Owners and Management.......................17

PLAN OF REORGANIZATION........................................................................17
         The Reorganization...................................................................17
         Background of and Reasons for the Reorganization.....................................18
         Voting Agreements....................................................................21
         Required Vote; Management Recommendation.............................................21
         Opinion of the Company's Financial Advisor...........................................22
         Conversion of Company Shares.........................................................24
         Federal Income Tax Consequences of the Reorganization................................25
         Rights of Dissenting Shareholders....................................................26
         Interests of Certain Persons in the Transaction......................................28
         Inconsistent Activities..............................................................29
         Conduct of Business Pending the Reorganization.......................................30
         Conditions to the Reorganization.....................................................31
         Representations and Warranties.......................................................32
         Amendment and Waiver.................................................................33
         Authorized Termination and Damages for Breach........................................33
         Restrictions on Resales by Company Affiliates........................................34
         Expenses ............................................................................34
         Government Approvals.................................................................34
         Effective Date of the Reorganization.................................................35

</TABLE>

                                                         i

<PAGE>

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<S>     <C>                                                                                   <C>

         Accounting Treatment.................................................................35
         Relationship Between Zions and the Company...........................................35

SUPERVISION AND REGULATION....................................................................36
         Zions    ............................................................................37
         Regulatory Capital Requirements......................................................38
         Other Regulatory and Supervisory Issues..............................................41
         Deposit Insurance and Other Assessments..............................................42
         Interstate Banking...................................................................43

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

INFORMATION CONCERNING ZIONS BANCORPORATION...................................................45
         Selected Financial Data..............................................................45
         Stock Prices and Dividends on Zions Common Stock.....................................48

INFORMATION CONCERNING THE COMPANY AND THE BANK...............................................50
         General  ............................................................................50
         Business ............................................................................51
         Investment Securities................................................................56
         Deposits ............................................................................60
         Competition..........................................................................61
         The Bank's Facilities................................................................62
         Legal Proceedings....................................................................62
         Employees............................................................................62
         Regulatory Matters...................................................................62
         Selected Financial Data..............................................................62
         Stock Prices and Dividends on Company Common Stock...................................64
         Information Concerning the Chairman and Chief Executive Officer of the Company
                  and the Bank................................................................64
         Certain Transactions of the Company..................................................64
         Stockholdings of Directors, Officers and Certain Others..............................65

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
         OF OPERATIONS OF KERSEY BANCORP, INC.................................................67
         General  ............................................................................67
         Net Interest Income..................................................................67
         Results of Operations................................................................70
         Liquidity and Sources of Funds.......................................................72
         Capital Resources....................................................................72
         Effects of Inflation and Changing Prices.............................................73
</TABLE>


                                       ii

<PAGE>


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<S>     <C>                                                                                   <C>
COMPARISON OF THE RIGHTS OF SHAREHOLDERS OF ZIONS AND THE COMPANY.............................73
         General  ............................................................................73
         Authorized Capital...................................................................73
         Anti-Takeover Matters................................................................74
         Shareholder Rights Plan..............................................................76
         Board of Directors...................................................................76
         Special Shareholders' Meetings.......................................................78
         Amendment of Articles and Bylaws.....................................................78
         Dissenters' Rights...................................................................78
         Preemptive Rights....................................................................79
         Dividend Rights......................................................................79
         Liquidation Rights...................................................................80
         Miscellaneous........................................................................80

LEGAL OPINIONS................................................................................80

EXPERTS  .....................................................................................81

OTHER MATTERS.................................................................................81

Appendix A - Agreement and Plan of Reorganization

Appendix B - Fairness Opinion of Howe Barnes Investments, Inc.

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



                                       iii

<PAGE>



                                     SUMMARY

         This summary highlights selected information from this Proxy
Statement/Prospectus and may not contain all of the information that is
important to you. To understand the Reorganization fully and for a more complete
description of the legal terms of the Reorganization, you should read carefully
this entire document, including the Appendices and the documents we have
referred you to. A copy of the Plan of Reorganization is attached as Appendix A
to this Proxy Statement/Prospectus. See "Where You Can Find More Information."

The Parties

         Zions Bancorporation ("Zions") is a multi-bank holding company
registered under the Bank Holding Company Act of 1956, as amended (the "Bank
Holding Company Act"), and organized under the laws of Utah, engaged primarily
in the commercial banking business through its banking subsidiaries. Zions is
the second largest bank holding company headquartered in Utah. In 1997, Zions
achieved a significant expansion of commercial banking operations in Utah,
Nevada, and Arizona, and expanded its franchise by adding banking operations in
Colorado, New Mexico, Idaho and California. Its principal subsidiaries are
banking subsidiaries which include Zions First National Bank, the second largest
commercial banking organization in Utah; Nevada State Bank, the fifth largest
commercial bank in Nevada; and National Bank of Arizona, the fifth largest
commercial bank in Arizona. Additionally, Zions has significant banking
operations in Colorado through its subsidiaries, Val Cor Bancorporation, Inc.,
which operates through its subsidiary Vectra Bank Colorado, National
Association, the [FIFTH] largest commercial bank in Colorado, Pitkin County Bank
and Trust Co., and Centennial Savings Bank, F.S.B.; and in California through
its subsidiary Grossmont Bank. Upon completion of the pending acquisition of
Sumitomo Bank of California, these two California banks will combine to form
California Bank and Trust, which will be the fifth largest commercial bank in
California. See "Recent Developments" below. Acquisitions during 1997 consisted
of Aspen Bancshares and its affiliate banks with branches in Colorado and New
Mexico; Tri-State Bank in Idaho, which was merged into Zions First National
Bank; 31 Wells Fargo branches in Utah, Idaho, Arizona and Nevada; Sun State Bank
in Nevada which was merged into Nevada State Bank; Grossmont Bank in San Diego,
California; and the public finance firms of Howarth & Associates in Nevada and
Kelling, Northcross and Nobriga, Inc. in California; and during 1998 consisted
of Vectra Banking Corporation and its banking subsidiary, Vectra Bank, located
in Denver, Colorado; Sky Valley Bank Corp. and its banking subsidiary, The First
National Bank in Alamosa, with offices in Alamosa, Center, and Saguache,
Colorado; Tri-State Finance Corporation and its banking subsidiary, Tri-State
Bank, in Denver; FP Bancorp, Inc. and its banking subsidary, First Pacific
National Bank, with eight offices in San Diego and Riverside Counties,
California; SBT Bankshares, Inc. and its banking subsidiary, State Bank and
Trust of Colorado Springs, with offices in Colorado Springs, Colorado; and Routt
County National Bank Corporation and its banking subsidary, First National Bank
of Colorado, with offices in Steamboat Springs, Colorado. As of March 31, 1998,
Zions had total consolidated assets of $10.6 billion, deposits of $7.8 billion,
and shareholders' equity of $724 million. See "Information Concerning Zions
Bancorporation." Zions' principal executive offices are at One South Main, Suite
1380, Salt Lake City, Utah 84111 (telephone: 801/524-4787).

         Val Cor Bancorporation, Inc. ("Val Cor"), a Colorado corporation, is a
bank holding company registered under the Bank Holding Company Act. Zions
acquired Val Cor in May

                                   
<PAGE>



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

         Vectra Bank Colorado, National Association ("Vectra Bank") is a
national banking association with its primary market areas located in Denver,
Boulder, Montezuma, Alamosa, Routt, El Paso and Saguache Counties, Colorado.
Vectra Bank is the successor-in-interest to Bank Colorado, National Association.
Vectra Bank offers traditional banking services through its offices in the
above-referenced counties. At March 31, 1998, Vectra Bank had total assets of
$_______million, total deposits of $________ million, total loans of $_____
million, and shareholders' equity of $______million. Vectra Bank's main office
is located at 1650 South Colorado Boulevard, Suite 320, Denver, Colorado 80222,
and its telephone number is 303/782-7440.

         Kersey Bancorp (the "Company"), a Colorado corporation, is a bank
holding company registered under the Bank Holding Company Act whose sole
activity is the ownership and operation of Independent Bank. The Company has no
other subsidiaries. The Company's principal asset consists of its 100% ownership
interest in Independent Bank. The Company's main office is located at 301 First
Street, Kersey, Colorado 80644-0558 and its telephone number is 970/356-2265. As
of March 31, 1998, the Company had total consolidated assets of $144.3 million
and shareholders' equity of $8.5 million.

         Independent Bank (the "Bank") is a banking corporation organized under
the laws of Colorado. The Bank offers traditional banking services through its
seven offices in the counties of Weld, Larimer, Morgan, and Logan, Colorado. As
of March 31, 1998, the Bank had total assets of $144.3 million, total deposits
of $133.2 million, total loans of $112.3 million, and total shareholders' equity
of $10.3 million. The Bank's main office is located at 301 First Street, Kersey,
Colorado 80644-0558, and its telephone number is 970/356-2265.

The Special Meeting; Purpose

         The Special Meeting of Shareholders of the Company (the "Special
Meeting") will be held at ______a.m., local time, on __________, 1998 at 301
First Street, Kersey, Colorado. The purpose of the Special Meeting is to
consider and vote upon a proposal to approve the Plan of Reorganization and to
transact such other business as may properly come before the Special Meeting.

Record Date; Voting Rights

         The Record Date for determining the shareholders of the Company
entitled to notice of and to vote at the Special Meeting or any postponements or
adjournments of the Special Meeting is the close of business on ________, 1998.
Each outstanding share of Company Common Stock entitles its holder of record on
the Record Date to one vote on each matter properly submitted to the
shareholders for action at the Special Meeting. See "Plan of
Reorganization--Required Vote; Management Recommendation."



                                        2

<PAGE>



Vote Required for Approval

         Approval of the Plan of Reorganization requires the affirmative vote of
two-thirds of the outstanding shares of Company Common Stock entitled to vote at
the Special Meeting. See "Plan of Reorganization--Required Vote; Management
Recommendation."

Dissenters' Rights

         Under Colorado law, shareholders of the Company will be entitled to to
dissent from the Reorganization and to receive cash equal to the fair value for
such shares in accordance with procedures established by Colorado law. Since
exercise and preservation of dissenters' rights are conditioned on strict
observance of the applicable section of Colorado law, each Company shareholder
who chooses to exercise dissenters' rights should consult and strictly observe
the procedures set forth in the statute, a copy of which is attached as Appendix
C to this Proxy Statement/Prospectus. Failure to follow the statutory provisions
precisely may result in loss of such shareholder's dissenters' rights under
Colorado law. See "Plan of Reorganization--Rights of Dissenting Shareholders,"
and Appendix C to this Proxy Statement/Prospectus.

Security Ownership of Certain Beneficial Owners and Management

         As of March 31, 1998, five individuals and their affiliated entities
beneficially owned 43,384 shares, or 70.19% of the outstanding shares of Company
Common Stock. These various shareholders, including affiliated entities, have
agreed with Zions, in their capacity as shareholders, to vote their shares in
favor of the Plan of Reorganization. Such a vote will be sufficient to approve
the Plan of Reorganization. If these shareholders vote their shares in favor of
the Plan of Reorganization as they have agreed, approval of the Plan of
Reorganization is assured.

Proposed Reorganization

         At the Special Meeting, the Company will ask its shareholders to
consider and approve the Plan of Reorganization which provides for the merger of
the Company into Val Cor, whereby Val Cor will be the surviving corporation, and
for the merger of the Bank into Vectra Bank, with Vectra Bank being the
surviving national banking association. See "Plan of Reorganization." The Plan
of Reorganization is attached to this Proxy Statement/Prospectus as Appendix A.

Reorganization Consideration

         Upon consummation of the Reorganization, Zions will issue to the
Company's shareholders shares of Zions Common Stock with a value on the
Effective Date equal to the Purchase Price, a maximum of $28,200,000 in exchange
for their shares of Company Common Stock. At the Effective Date of the
Reorganization, the shares of Company Common Stock will be canceled and
immediately converted into the right for Company shareholders to receive, in
exchange for each share of Company Common Stock that they own, that number of
shares of


                                        3

<PAGE>



Zions Common Stock calculated by dividing the Purchase Price by the Average
Closing Price, and by further dividing the number so reached by the number of
shares of Company Common Stock issued and outstanding as of the Effective Date
of the Reorganization.

         On ______, 1998, the closing price of Zions Common Stock was $______
per share. On that date the Company had 61,812 shares of its Common Stock issued
and outstanding. Assuming that the Reorganization had been consummated as of
______ 1998, that the Purchase Price had been $28,200,000 on that date, and that
the Average Closing Price had been $______, shareholders of the Company under
such circumstances would have been entitled to receive approximately shares of
Zions Common Stock for each share of Company Common Stock that they own, or an
equivalent value of approximately $_____ per share of Company Common Stock.
Because the Purchase Price and the Average Closing Price represent variable
amounts, the parties are unable to determine the precise exchange rate and the
precise number of shares of Zions Common Stock that shareholders of the Company
will receive for each share of Company Common Stock until the Effective Date.
Only at the Effective Date of the Reorganization will these amounts be
determined and known.

         Zions will not issue fractional shares of its common stock in the
Reorganization. Instead, each shareholder of the Company who is entitled to a
fractional share of Zions Common Stock (after aggregating all shares of Zions
Common Stock to which such shareholder is entitled) will receive an amount of
cash equal to the product of such fraction times the Average Closing Price. Such
fractional share interest will not include the right to vote or to receive
dividends or any interest on such share. See "Plan of Reorganization."

Opinion of the Company's Financial Advisor

         The Company has retained an independent financial advisor, Howe Barnes
Investments, Inc., to evaluate the merger consideration offered to the Company's
shareholders by Zions. The financial advisor has rendered an opinion that the
merger consideration to be paid under the Plan of Reorganization is fair to the
shareholders of the Company from a financial point of view. See "Plan of
Reorganization--Opinion of the Company's Financial Advisor" and Appendix B to
this Proxy Statement/Prospectus.

Board of Directors Recommendation

         The Board of Directors of the Company unanimously believes that the
Reorganization is in the best interests of the Company, its shareholders, and
the employees and customers of the Bank and recommends that the shareholders of
the Company vote "FOR" approval of the Plan of Reorganization. See "Plan of
Reorganization--Background of and Reasons for the Reorganization."

         Shareholders of the Company are requested to complete, date, and sign
the accompanying proxy card and return it promptly in the enclosed postage-paid
envelope.



                                        4

<PAGE>



Certain Definitions

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

         "Audit Expenses" means all expenses incurred by the Company and the
Bank through the Effective Date, determined on a pre-tax basis in accordance
with generally accepted accounting principles, with respect to the conduct of
the audit and the delivery of the report of audit of the consolidated accounts
of the Company and the Bank by Fortner, Bayens, Levkulich & Co., P.C.
as of December 31, 1997 and for the year then ended.

         "Average Closing Price" means the average of each Daily Sales Price
over the Pricing Period.

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

         "Daily Sales Price" means for any trading day, the last reported sales
price of Zions Common Stock as such price is reported by the Nasdaq National
Market, or in its absence by such other source upon which Zions and the Company
shall mutually agree.

         "Effective Date" means the date which is the latest of (a) the day upon
which the shareholders of the Company approve, ratify, and confirm the Holding
Company Merger; (b) the first to occur of (i) the date thirty days following the
date of the order of the Board of Governors of the Federal Reserve System or the
Federal Reserve Bank of San Francisco acting under authority delegated to it by
the Board of Governors of the Federal Reserve System (collectively, the "Board
of Governors") approving the Holding Company Merger; or (ii) if, under section
321(a) of the Riegle Community Development and Regulatory Improvement Act of
1994 (the "Riegle Act"), the Board of Governors shall have prescribed a shorter
period of time with the concurrence of the Attorney General of the United
States, the date on which such shorter period of time shall elapse; or (iii) the
date ten days following the date on which the Board of Governors indicates its
waiver of jurisdiction over the Holding Company Merger; (c) the first to occur
of (1) the date thirty days following the date of the order of the Office of the
Comptroller of the Currency (the "Comptroller") approving the Bank Merger, or
(2) if, under section 321(b) of the Riegle Act, the Comptroller shall have
prescribed a shorter period of time with the concurrence of the Attorney General
of the United States, the date on which such shorter period of time shall
elapse; (d) if such an order shall be required by law, the date ten days
following the date of the order of the Commissioner of Financial Institutions of
the State of Utah (the "Commissioner") approving the transactions contemplated
by the Plan of Reorganization; (e) if such an order shall be required by law,
the date ten days following the date of the order of the Colorado State Banking
Board (the "State Banking Board") approving the transactions contemplated by the
Plan of Reorganization; (f) the date upon which any other material order,


                                        5

<PAGE>



approval, or consent of a federal or state regulator of financial institutions
or financial institution holding companies authorizing consummation of the
transactions contemplated by the Plan of Reorganization is obtained or any
waiting period mandated by such order, approval, or consent has run; (g) ten
days after any stay of the approvals of the Board of Governors, the Comptroller,
the Commissioner, or the State Banking Board of the transactions contemplated by
the Plan of Reorganization, or any injunction against closing of such
transactions is lifted, discharged, or dismissed; or (h) such other date as
shall be mutually agreed upon by Zions and the Company.

         "Expense Limit" means (i) $185,000, if the Audit Expenses are greater
than $90,000, and (ii) $95,000 plus the Audit Expenses, if the Audit Expenses
are $90,000 or less.

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

         "Pricing Period" means the ten consecutive trading days ending on and
including the third trading day preceding the Effective Date.

         "Purchase Price" means $28,200,000, reduced as follows: (i) if the
Transaction Expenses exceed the Expense Limit, then the reduction shall be the
amount by which the Transaction Expenses exceed the Expense Limit, net of any
associated tax benefit; and (ii) if the Transaction Expenses do not exceed the
Expense Limit, then the reduction shall be zero.

         "Transaction Expenses" means (i) all expenses incurred from January 1,
1998 through the Effective Date with respect to attorneys, accountants,
investment bankers, consultants, brokers and finders who will have rendered
services to the Company or the Bank in connection with the transactions
contemplated by the Plan of Reorganization, and (ii) all of the other expenses
incurred from January 1, 1998 through the Effective Date outside of the ordinary
course of business of the Company and the Bank, but does not include the cost of
printing and delivering the proxy materials which will be transmitted to
shareholders of the Company in connection with the Holding Company Merger.

Reasons for the Reorganization

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


                                        6

<PAGE>



         For Zions, the Reorganization will provide an opportunity to further
broaden its franchise in Colorado through its expansion into the northeastern
Colorado market, where Zions has not previously had a presence. Zions proposes
to broaden its geographical base in the Colorado market and diversify its
banking operations. The combination of the different skills, resources and
services offered by the Company and Zions, together with the additional skills
and resources available in the broader Zions organization, will make the
resulting banking group able to compete more effectively in its markets with
other full-service financial institutions. See "Plan of Reorganization--
Background of and Reasons for the Reorganization."

Interests of Certain Persons in the Transaction

         The Plan of Reorganization provides that, following the Reorganization,
Larry G. Neuschwanger, currently president and chief executive officer of the
Bank, will become an executive officer of Vectra Bank. Mr. Neuschwanger will
enter into an employment agreement with Vectra Bank effective as of the
Effective Date. The Company's Board of Directors was aware of these interests
when it considered and approved the Plan of Reorganization and the
Reorganization. See "Plan of Reorganization--Interests of Certain Persons in the
Transaction."

Tax Consequences

         The parties to the Reorganization intend that the Reorganization will
be treated for federal income tax purposes as a tax-free reorganization. In a
tax-free reorganization, the Company shareholders will recognize no gain or loss
upon the exchange of their shares of Company Common Stock for Zions Common Stock
(except with respect to cash received by such shareholders in lieu of fractional
shares). See "Plan of Reorganization--Federal Income Tax Consequences of the
Reorganization."

Conditions to the Reorganization; Regulatory Approval

         Consummation of the Reorganization is subject to satisfaction of a
number of conditions, including (i) obtaining requisite approval from the
Company shareholders, (ii) obtaining regulatory approvals from the Board of
Governors, the Comptroller, the Commissioner, and the State Banking Board, (iii)
receiving an opinion of counsel with respect to certain tax aspects of the
Reorganization, (iv) the absence of any material adverse change with respect to
the operations and financial condition of the Company, (v) concurrence of a
determination by Zions and the Company that the Reorganization will be treated
for accounting purposes as a pooling of interests, and (vi) the satisfaction of
other customary closing conditions. All regulatory approvals have [NOT YET] been
obtained. See "Plan of Reorganization--Conditions to the Reorganization;
Government Approvals."


                                        7

<PAGE>



Effective Date of the Reorganization

         If the shareholders of the Company approve the Plan of Reorganization,
the parties expect that the Reorganization will become effective in the [THIRD]
quarter of 1998. However, there can be no assurance that all conditions
necessary to the consummation of the Reorganization will be satisfied or, if
satisfied, that they will be satisfied in time to permit the Reorganization to
become effective at the anticipated time. See "Plan of Reorganization--
Effective Date of the Reorganization."

Accounting Treatment

         The parties expect the Reorganization to qualify as a "pooling of
interests" in accordance with APB Opinion No. 16, which means that the companies
will be treated for accounting purposes as if they had always been combined. The
Plan of Reorganization requires as a condition to closing the parties' receipt
of concurrence of a determination by the Company and Zions that the
Reorganization should be treated as a pooling of interests. See "Plan of
Reorganization--Accounting Treatment."

Selected Financial Information

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


<TABLE>
<CAPTION>

                                          Three Months Ended
                                               March 31,                                  Year Ended December 31,
                                          -------------------        ------------------------------------------------------------
                                          1998           1997        1997           1996          1995          1994         1993
                                          ----           ----        ----           ----          ----          ----         ----
                                                                  (In Thousands, Except Per Share Amounts)
<S>                                     <C>           <C>          <C>           <C>           <C>            <C>         <C>
Zions
Earnings
  Net interest income................   $107,943      $ 82,898     $351,799      $289,166      $233,547       $198,606    $174,657
  Provision for loan losses..........      3,256         1,835        6,175         4,640         3,000          2,181       2,993
  Net income.........................     36,441        30,585      122,362       107,423        82,385         63,827      58,205
Per Share
  Net income (basic).................   $   0.53      $   0.46     $   1.92      $   1.70      $   1.39       $   1.11    $   1.03
  Net income (diluted)...............       0.52          0.45         1.89          1.68          1.37           1.09        1.02
  Cash Dividends.....................       0.12          0.11         0.47         0.425        0.3525           0.29       0.245

</TABLE>


                                        8

<PAGE>

<TABLE>
<CAPTION>

                                          Three Months Ended
                                               March 31,                                  Year Ended December 31,
                                          -------------------          ------------------------------------------------------------
                                          1998           1997          1997           1996          1995         1994        1993
                                          ----           ----          ----           ----          ----         ----        ----
                                                                   (In Thousands, Except Per Share Amounts)
<S>                                    <C>            <C>            <C>           <C>           <C>         <C>         <C>
Statement of Condition at Period End
  Assets.............................  $10,611,585    $8,508,537     $9,521,770    $7,116,413    $6,095,515  $4,934,095  $4,801,054
  Deposits...........................    7,799,027     5,728,585      6,854,462     5,119,692     4,511,184   3,705,976   3,432,289
  Long-term debt.....................      276,387       258,704        258,566       251,620        56,229      58,182      59,587
  Shareholders' equity...............      723,814       591,581        655,460       554,610       469,678     365,770     312,592

Kersey
Earnings
  Net interest income................  $     1,918    $    1,651     $    6,896    $    4,865    $    3,320
  Provision for loan losses..........          130           295          1,315           655           201
  Net income.........................          458           288            960           957           672

Per Share
  Net income (basic).................  $       7.4    $     6.18     $    19.42    $    20.53    $    16.45
  Net income (diluted)...............         7.41          6.18          19.42         20.53         16.45
  Cash Dividends.....................         1.50          1.00           1.00          1.50            --

Statement of Condition at Period End
 Assets..............................  $   144,346    $  116,174     $  135,519    $  107,606    $   69,703
 Deposits............................      133,153       107,603        124,880        98,243        63,637
 Long-term debt......................        1,876         2,182          1,746         3,242           710
 Shareholders' equity................        8,482         5,354          8,086         5,168         4,313

</TABLE>


Comparative Per Share Data

         The following table provides historical net income, book values and
dividends per share for Zions Common Stock and Company Common Stock for the
periods indicated. The following data are based on the respective historical
financial statements of Zions incorporated in this Proxy Statement/Prospectus by
reference and of the Company included in this Proxy Statement/ Prospectus and
should be read in conjunction with such financial statements and such
information and the related notes to each.

<TABLE>
<CAPTION>

                                                            Three Months
                                                               Ended
                                                             March 31,                      Year Ended December 31,
                                                            -------------              ------------------------------------
                                                            1998     1997              1997           1996            1995
                                                            ----     ----              ----           ----            ----
<S>                                                       <C>        <C>               <C>             <C>           <C>
Net Income Per Common Share (diluted)
     Zions..........................................      $ 0.52     $ 0.46            $  1.89        $  1.68        $  1.37
     Kersey.........................................        7.41       6.18              19.42          20.53          16.45
</TABLE>




                                       9

<PAGE>

<TABLE>
<CAPTION>

<S>                                                       <C>        <C>               <C>            <C>            <C>
Book Value Per Common Share
     Zions..........................................      $ 10.48    $  8.75           $ 10.25        $  8.72        $  7.46
     Kersey.........................................       137.22     114.86            130.82         110.87          93.27

Cash Dividends Declared Per Common Share
     Zions(1).......................................      $  0.12    $  0.11           $  0.47        $ 0.425        $0.3525


     Kersey.........................................         1.50       1.00              1.00           1.50             --

</TABLE>

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

Unaudited Pro Forma Combined Financial Information

            The following unaudited pro forma combined financial information
reflects the application of the pooling of interests method of accounting.
Shareholders of the Company should read the following tables, which show
comparative historical per common share data for Zions and the Company
(separately and pro forma combined) and equivalent pro forma per share data for
the Company, in conjunction with the financial information of Zions as
incorporated in this Proxy Statement/Prospectus by reference to other documents
and of the Company as included in this Proxy Statement/Prospectus. The pro forma
data in the table, presented as of and for each of the years in the three year
period ended December 31, 1997, and as of and for the three months ended March
31, 1998, are presented for comparative and illustrative purposes only and are
not necessarily indicative of the combined financial position or results of
operations in the future or what the combined financial position or results of
operations would have been had the Reorganization been consummated during the
period or as of the date for which the information in the table is presented.

<TABLE>
<CAPTION>

                                                   Historical                                     Pro Forma
                                             -------------------------             ----------------------------------------
                                                                                   Zions and Kersey        Zions and Kersey
                                                                                      Pro Forma               Equivalent
Per Common Share                             Zions             Kersey                 Combined(4)             Pro Forma(5)
- ----------------                             -----             ------                 -----------             ------------
<S>                                    <C>                       <C>               <C>                     <C> 
NET INCOME (diluted)(1) 
For the three months ended:
      March 31, 1998                   $   0.52                  $  7.41

For the years ended:
      December 31, 1997                $   1.89                  $ 19.42
      December 31, 1996                    1.68                    20.53
      December 31, 1995                    1.37                    16.45

CASH DIVIDENDS(2) 
For the three months ended:
      March 31, 1998                   $   0.12                  $  1.50

</TABLE>

                                       10

<PAGE>

<TABLE>


<S>                                    <C>                       <C>               <C>                     <C>
For the years ended:
      December 31, 1997                $   0.47                  $  1.00
      December 31, 1996                   0.425                     1.50
      December 31, 1995                  0.3525                       --

BOOK VALUE(3)
As of:
      March 31, 1998                   $  10.48                  $137.22
      December 31, 1997                   10.25                   130.82
      December 31, 1996                    8.72                   110.87
      December 31, 1995                    7.46                    93.27

</TABLE>

- ----------------------
(1) Net income per share is based on weighted average common and common
    equivalent shares outstanding.
(2) Pro forma cash dividends per share represent historical cash dividends of
    Zions.
(3) Book value per common share is based on total period-end shareholders'
    equity.
(4) Pro forma combined net income per share represents historical net income of
    Zions and the Company computed using historical weighted average common and
    common equivalent shares of Zions adjusted by imputed common and common
    equivalent shares which will be issued in the transaction. Pro forma
    combined book value per share represents historical total shareholders'
    equity of Zions and the Company computed using Zions' historical common
    shares outstanding adjusted by imputed common shares which will be issued in
    the transaction.
(5) Pro forma equivalent amounts are computed by multiplying the pro forma
    combined amounts by the exchange ratio of one share of Company Common Stock
    for ______ shares of Zions Common Stock, which would have been the 
    applicable exchange ratio had the Reorganozation occurred on ______, 1998. 
    The actual exchange ratio will not be known until the Effective Date.

Recent Developments

      On May 26, 1998, Zions and FP Bancorp, Inc. ("FP Bancorp"), the parent
company of First Pacific National Bank ("First Pacific") completed their merger,
whereby FP Bancorp merged with and into Zions. FP Bancorp shareholders received
1,956,240 shares of Zions Common Stock at closing. First Pacific had
approximately $359 million in assets in eight offices in San Diego and Riverside
Counties, California. On June 19, 1998, First Pacific merged with and into
Grossmont, with Grossmont being the surviving banking corporation.

      Zions and SBT Bancshares, Inc. ("SBT"), the holding company of State Bank
and Trust of Colorado Springs ("SBTCS"), completed their merger on May 29, 1998.
SBT merged with and into Val Cor Bancorporation, Inc. ("Val Cor"), a
wholly-owned subsidiary of Zions in exchange for 546,403 shares of Zions Common
Stock. SBTCS and Vectra Bank Colorado, National Association, a wholly-owned
subsidiary of Val Cor, consolidated to form a new national banking association
named Vectra Bank Colorado, National Association ("Vectra Bank"). SBTCS operated
through two banking offices in Colorado Springs, Colorado. At December 31, 1997,
SBT had assets of $86 million. The merger was accounted for as a
pooling-of-interests.

      On May 29, 1998, Zions and Routt County National Bank Corporation
("Routt"), the holding company of First National Bank of Colorado ("FNBC"),
completed their merger, whereby Routt merged with and into Val Cor and FNBC
merged with and into Vectra Bank. At closing, Zions issued 650,000 shares of its
Common Stock to the former shareholders of Routt.


                                       11

<PAGE>



FNBC operated through two banking offices in Steamboat Springs, Colorado. At
December 31, 1997, Routt had assets of $93 million. The merger was accounted for
as a pooling-of-interests.

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

      In recent months Zions has entered into agreements to acquire additional
bank holding companies. Zions expects that each of these transactions will be
accounted for as a pooling of interests, and expects each transaction to close
during the third quarter of 1998. Each of the following transactions is
conditioned upon shareholder approval, federal and state regulatory approval,
and other conditions of closing.

      On May 13, 1998, Zions and The Commerce Bancorporation, a Washington
corporation ("Commerce") entered into an agreement whereby Commerce will merge
with and into Zions with Zions being the surviving corporation. Commerce
conducts its commercial banking operations in one office in Seattle, Washington,
through its wholly-owned subsidiary, The Commerce Bank of Washington, National
Association, a commercial bank organized under the laws of the United States
("CBW"). Upon completion of this transaction, CBW will become a wholly-owned
subsidiary of Zions. As of March 31, 1998, Commerce had consolidated assets of
approximately $237.5 million consolidated deposits of approximately $185.7
million, loans of approximately $130.0 million, and shareholders' equity of
approximately $20.3 million. Upon completion of this transaction, Zions will
issue up to 2,020,791 of its shares of Common Stock to the shareholders of
Commerce.

      On May 14, 1998, Zions, Val Cor, and Vectra Bank (successor-in-interest to
BCNA) entered into an agreement with Mountain Financial Holding Company, a
Colorado corporation ("Mountain") and its wholly-owned subsidiary Mountain
National Bank, a commercial bank organized under the laws of the United States
("Mountain Bank"). Upon completion of this


                                       12

<PAGE>



transaction, Mountain will merge with and into Val Cor with Val Cor being the
surviving corporation, and Mountain Bank will merge with and into Vectra Bank,
with Vectra Bank being the surviving national banking association. Mountain Bank
conducts a commercial banking business through one office in Woodland Park,
Teller County, Colorado. As of March 31, 1998, Mountain had consolidated assets
of approximately $86.7 million, consolidated deposits of approximately $77.7
million, loans of approximately $53.0 million, and shareholders' equity of
approximately $8.5 million. Upon completion of this transaction, Zions will
issue to the shareholders of Mountain 608,000 shares of its Common Stock.

      On June 3, 1998, Zions, Val Cor, and Vectra Bank entered into an agreement
with Eagle Holding Company, a Colorado corporation ("Eagle"), and its
wholly-owned subsidiary Eagle Bank, a Colorado-chartered commercial bank ("Eagle
Bank"). Upon completion of this transaction, Eagle will merge with and into Val
Cor with Val Cor being the surviving corporation, and Eagle Bank will merge with
and into Vectra Bank with Vectra Bank being the surviving national banking
association. Eagle Bank conducts a commercial banking business through one
office in Broomfield, Boulder County, Colorado. As of March 31, 1998, Eagle had
consolidated assets of approximately $40.8 million, consolidated deposits of
approximately $37.5 million, loans of approximately $27.5 million, and
shareholders' equity of approximately $2.9 million. Upon completion of this
transaction, Zions will issue to the shareholders of Eagle up to 230,000 shares
of its Common Stock.

           CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING INFORMATION

      Please note that certain statements in this Proxy Statement/Prospectus
(including information included or incorporated by reference) are not based on
historical facts, but are forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933, as amended, that are based upon
numerous assumptions about future conditions that could prove to be inaccurate.
Actual events, transactions and results may materially differ from the
anticipated events, transactions or results described in such statements. Zions'
ability to consummate such transactions and achieve such events or results is
subject to certain risks and uncertainties. Such risks and uncertainties
include, but are not limited to, the existence of demand for and acceptance of
Zions' products and services, regulatory approvals and developments, economic
conditions, the impact of competition and pricing, results of financing efforts
and other factors affecting Zions' business that are beyond Zions' control.
Factors that could cause future results to vary from current management
expectations include, but are not limited to, general economic conditions,
legislative and regulatory changes, monetary and fiscal policies of the federal
government, changes in tax policies, rates and regulations of federal and local
tax authorities, changes in interest rates, deposit flows, the cost of funds,
demand for loan products, demand for financial services, competition, changes in
the quality or composition of Zions' loan and investment portfolios, changes in
accounting principles, policies or guidelines, and other economic, competitive,
governmental and technological factors affecting Zions' operations, markets,
products, services and prices.



                                       13

<PAGE>



                       WHERE YOU CAN FIND MORE INFORMATION

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

      Zions is subject to the informational requirements of the Securities
Exchange Act of 1934 (the Exchange Act"). Zions files annual, quarterly and
current reports, proxy statements and other information with the SEC. You can
inspect and copy such reports, proxy statements and other information at the
public reference facilities maintained by the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C.; and at the following regional offices of the
SEC: 7 World Trade Center, Suite 1300, New York, NY 10048; and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You can also
obtain copies of such material at prescribed rates by mail addressed to the SEC,
Public Reference Section, Washington, D.C. 20549. The public may obtain
information on the operations of the Public Reference Room by calling the SEC at
800/SEC-0330. Zions Common Stock is quoted on the Nasdaq National Market
("Nasdaq-NMS"). You can inspect such reports, proxy statements and other
information at the offices of Nasdaq Operations, 1735 K Street, N.W.,
Washington, D.C. The SEC maintains a Web site that contains reports, proxy and
information statements, and other information regarding registrants that file
electronically with the SEC (http://www.sec.gov).

      No person is authorized to give any information or to make any
representation that is different from what is contained in this Proxy
Statement/Prospectus and, if given or made, any such information or
representation should not be relied upon as having been authorized by Zions or
the Company. This Proxy Statement/Prospectus does not constitute an offer to
sell securities or a solicitation of an offer to purchase securities by any
person in any state in which such offer or solicitation is not authorized by
that state's laws or in which the person making such offer or solicitation is
not qualified to make the same. Neither the delivery of this Proxy
Statement/Prospectus at any time nor the distribution of Zions Common Stock to
Company shareholders shall imply that the information in this Proxy
Statement/Prospectus is correct as of any time subsequent to _________, 1998.

      Zions has supplied the information contained in this Proxy
Statement/Prospectus with respect to Zions. The Company has supplied the
information contained in this Proxy


                                       14

<PAGE>



Statement/Prospectus with respect to the Company. Neither Zions nor the Company
warrants the accuracy or completeness of information relating to the other.

      This Proxy Statement/Prospectus incorporates by reference certain
documents relating to Zions which are not presented in this document or
delivered with this Proxy Statement/Prospectus, including certain exhibits to
the Plan of Reorganization (as described in this document). Copies of such
documents are available upon request and without charge to any person to whom
this Proxy Statement/Prospectus has been delivered. Requests for Zions documents
should be directed to Zions Bancorporation, One South Main, Suite 1380, Salt
Lake City, Utah 84111, Attention: Dale M. Gibbons, Executive Vice President,
(telephone: 801/524-4787). In order to ensure timely delivery of Zions
documents, you should make your request not later than ___________, 1998.

                    ZIONS DOCUMENTS INCORPORATED BY REFERENCE

      SEC regulations allow Zions to "incorporate by reference" information into
this Proxy Statement/ Prospectus, which means that Zions can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
Proxy Statement/Prospectus, except for any information superseded by information
in this Proxy Statement/Prospectus. Zions incorporates by reference in this
Proxy Statement/Prospectus the following documents that it previously filed with
the SEC pursuant to the Exchange Act: (a) Zions' Annual Report on Form 10-K for
the year ended December 31, 1997; (b) Zions' Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998; (c) Zions' Current Reports on Form 8-K filed
by Zions on February 6, 1998, April 3, 1998, April 15, 1998, and May 18, 1998,
as amended on May 27, 1998; (d) the description of Zions Common Stock which is
contained in Zions' registration statement on Form 10, and any amendment or
report filed to update such description; and (e) the description of the Zions
Rights Plan contained in Zions' registration statement on Form 8-A dated October
10, 1996, and any amendment or report filed to update such description.

      Any Company shareholder who wishes to obtain copies of any Zions document
incorporated by reference in this document may do so by following the
instructions under the section titled "Where You Can Find More Information,"
above.

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



                                       15

<PAGE>



                               THE SPECIAL MEETING

Date, Time, and Place

      This Proxy Statement/Prospectus is being furnished to the shareholders of
the Company in connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Company's Special Meeting of
Shareholders to be held on ____________, 1998 at 301 First Street, Kersey,
Colorado at ______ a.m., local time, or at any adjournments or postponements
thereof.

Matters to be Considered at the Special Meeting

      The purposes of the Special Meeting are (1) to consider and vote upon a
proposal of the Board of Directors to approve the Plan of Reorganization and the
transactions contemplated thereby and (2) to transact such other business as may
properly come before the Special Meeting or any adjournments or postponements of
the Special Meeting.

      The Board of Directors of the Company unanimously approved the Plan of
Reorganization and the Reorganization and recommends that the shareholders of
the Company vote "FOR" approval of the Plan of Reorganization.

Record Date; Voting Rights

      Shareholders of the Company, as reflected on the Company's stock transfer
records as of the close of business on _________, 1998 (the "Record Date") are
entitled to notice of and to vote at the Special Meeting or any postponements or
adjournments of the Special Meeting. On the Record Date, 61,812 shares of
Company Common Stock were outstanding, held by approximately 118 shareholders of
record. Each such share of Company Common Stock entitles its holder to one vote
on each matter properly submitted to the shareholders for action at the Special
Meeting. See "Plan of Reorganization--Required Vote; Management
Recommendation."

Quorum; Vote Required for Approval

      The presence, in person or by proxy, of the holders of a majority of the
issued and outstanding shares of Company Common Stock entitled to vote at the
Special Meeting is necessary to constitute a quorum at the Special Meeting.
Approval of the Plan of Reorganization requires the affirmative vote of
two-thirds of the outstanding shares of Company Common Stock entitled to vote at
the Special Meeting. A failure to vote, an abstention, or a broker non-vote of
shares held in street name will have the same legal effect as a vote against
approval of the Plan of Reorganization. See "Plan of Reorganization--Required
Vote; Management Recommendation."



                                       16

<PAGE>



Voting and Revocation of Proxies

      Shareholders may vote at the Special Meeting either in person or by proxy.
All properly executed Proxies which have not been previously revoked will be
voted at the Special Meeting, or any postponements or adjournments of the
Special Meeting, in accordance with the instructions on the Proxy. Properly
executed Proxies which contain no voting instructions will be voted in favor of
approval of the Plan of Reorganization. As to any other matter brought before
the Special Meeting and submitted to a shareholder vote, Proxies will be voted
in accordance with the judgment of the named proxyholders.

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

Solicitation of Proxies

      In addition to solicitation by mail, directors, officers and employees of
the Company may solicit Proxies from the shareholders of the Company in person
or by telephone or otherwise for no additional compensation. Zions will pay all
expenses in connection with the printing and delivery of the proxy soliciting
materials to the Company shareholders for the Special Meeting.

Security Ownership by Certain Beneficial Owners and Management

      As of March 31, 1998, five individuals and their affiliated entities
beneficially owned 43,384 shares, or 70.19% of the outstanding shares of Company
Common Stock. As an inducement to Zions to enter into the Plan of
Reorganization, these various shareholders of the Company, including affiliated
entities, have entered into agreements with Zions under which they have agreed,
in their capacity as shareholders, to vote their shares in favor of the Plan of
Reorganization. Four of these shareholders are directors of the Company. The
other shareholder is a principal shareholder of the Company. See "Plan of
Reorganization--Voting Agreements" and "Information Concerning the Company and
the Bank--Stockholdings of Directors, Officers and Certain Others." Such a vote
will be sufficient to approve the Plan of Reorganization. If these shareholders
vote their shares in favor of the Plan of Reorganization as they have agreed,
approval of the Plan of Reorganization is assured.

                             PLAN OF REORGANIZATION

      This section of the Proxy Statement/Prospectus describes certain important
aspects of the Plan of Reorganization. The following description is not complete
and is qualified in its entirety by reference to the Plan of Reorganization,
which is attached as Appendix A to this Proxy Statement/Prospectus. Certain
exhibits to the Plan of Reorganization have been filed with the SEC as an
exhibit to the Registration Statement. Such exhibits to the Plan of
Reorganization are incorporated into this Proxy Statement/Prospectus by
reference to such filing and are available


                                       17

<PAGE>



upon request to Dale M. Gibbons, Executive Vice President, Zions Bancorporation.
See "Where You Can Find More Information" and Appendix A to this Proxy
Statement/Prospectus.

The Reorganization

      The Plan of Reorganization provides for the merger of the Company into Val
Cor, with Val Cor being the surviving corporation (the "Holding Company
Merger"), and for the merger of the Bank into Vectra Bank, with Vectra Bank
being the surviving national banking association (the "Bank Merger").

      Upon consummation of the Reorganization, Zions will issue to Company's
shareholders shares of Zions Common Stock with a value on the Effective Date
equal to the Purchase Price, a maximum of $28,200,000, in exchange for their
shares of Company Common Stock. At the Effective Date of the Reorganization, the
shares of Company Common Stock will be canceled and immediately converted into
the right for Company shareholders to receive shares of Zions Common Stock. In
exchange for each share of Company Common Stock that they own, Company
shareholders will receive that number of shares of Zions Common Stock calculated
by dividing the Purchase Price by the Average Closing Price, and by further
dividing the number so reached by the number of shares of Company Common Stock
issued and outstanding as of the Effective Date of the Reorganization.

      Zions will not issue fractional shares of its Common Stock in the
Reorganization. Instead, each shareholder of the Company who is entitled to a
fractional share of Zions Common Stock (after aggregating all shares of Zions
Common Stock to which such shareholder is entitled) will receive an amount of
cash equal to the product of such fraction times the Average Closing Price. Such
fractional share interest will not include the right to vote or to receive
dividends or any interest thereon.

      On ________, 1998, the closing price of Zions Common Stock was $________
per share. On that date there were issued and outstanding 61,812 shares of
Company Common Stock. Assuming that the Reorganization had been consummated on
that date, that the Purchase Price had been $28,200,000 on that date, and that
the Average Closing Price of Zions Common Stock had been $_________, Company
shareholders under such circumstances would have been entitled to receive
approximately ________ shares of Zions Common Stock for each share of Company
Common Stock that they own, or an equivalent market value of approximately
$________ per share of Company Common Stock. Because the Purchase Price and the
Average Closing Price represent variable amounts, the parties are unable to
determine the precise exchange rate and the precise number of shares of Zions
Common Stock that the shareholders of the Company will receive in exchange for
each share of Company Common Stock until the Effective Date. Only at the
Effective Date will these amounts be determined and known.



                                       18

<PAGE>



Background of and Reasons for the Reorganization

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

      It was learned through marketplace research that Zions was in a favorable
acquisition mode for commercial banking institutions in the mountain states,
including Colorado. Research of Zions and other potential acquirors was
conducted, including research in filings with the SEC pursuant to the Exchange
Act and research in other market sources. Based on the results of such research,
the prices Zions had paid for other financial institutions in the past, and
Zions' status as one of the nation's top-performing banking organizations, the
Board of Directors identified Zions as a favored potential acquiror.
Subsequently, contact was initiated with management of Zions. Several rounds of
discussions resulted in an initial offer in February 1998 for an exchange of the
stock of the Company for stock of Zions. After discussing the initial offer, the
Board authorized Larry Neuschwanger, President of the Company, to negotiate a
definitive agreement with Zions.

      In April 1998, Mr. Neuschwanger and the Board negotiated the terms of a
definitive agreement with Zions. The Board met again during May 1998, to review
and vote upon the Plan of Reorganization and the transactions contemplated
thereby. In considering the Plan of Reorganization and the transactions
contemplated thereby, the Board determined that the Zions offer would maximize
value for the Company's shareholders, while providing a favorable structure for
the transaction in which the Company's shareholders would receive liquid
securities without triggering tax consequences (except for shareholders
receiving cash in the Reorganization). Further, the Board believes that Zions is
fully capable of consummating the Reorganization. Moreover, the Board believes
that the Zions transaction will result in positive effects for the customers of
the Bank and the communities in which the Bank operates. Based on the foregoing,
the Board of Directors of the Company approved the Plan of Reorganization, and
the Plan of Reorganization was executed on behalf of the Company and the Bank
effective May 8, 1998.



                                       19

<PAGE>



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

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

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

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

      o        the monetary value of the stock offered to the Company
               shareholders by Zions (i) in absolute terms, (ii) as compared to
               the value of other merger and acquisition pricing reported by
               qualified and informed investment banking organizations, and
               (iii) as compared to recent mergers and acquisitions involving
               other banking and financial institutions in Colorado;

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

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

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

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

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

      o        the fact that the Reorganization will be a tax-free 
               reorganization to the Company shareholders for federal income tax
               purposes with respect to shareholders of the


                                       20

<PAGE>



               Company who receive shares of Zions Common Stock in the
               Reorganization (but not with respect to any cash received in the
               Reorganization).

      The Board of Directors of the Company unanimously recommends that the
Company shareholders vote "FOR" approval and adoption of the Plan of
Reorganization.

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

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

Voting Agreements

      All of the directors of the Company and a principal shareholder of the
Company have agreed to support the Plan of Reorganization and to recommend its
adoption by the other shareholders of the Company. As of March 31, 1998, five
individuals and their affiliated entities beneficially owned 43,384 shares or
approximately 70.19% of the outstanding shares of Company Common Stock. All of
such shareholders, including all Board members, and such affiliated entities
have entered into agreements with Zions under which they have agreed, in their
capacity as shareholders, to vote their shares in favor of the Plan of
Reorganization. Such vote will be sufficient to approve the Plan of
Reorganization. If these individuals vote their shares of Company Common Stock
in accordance with the requirements of the voting agreements, approval of the
Plan of Reorganization by the Company shareholders is assured.

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

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


                                       21

<PAGE>



Required Vote; Management Recommendation

      Approval of the Plan of Reorganization requires the affirmative vote of
the holders of two-thirds of the outstanding shares of Company Common Stock
entitled to vote at the Special Meeting. Because approval requires the
affirmative vote of two-thirds of all outstanding shares of Company Common
Stock, a failure to vote, an abstention, or a broker non-vote of shares held in
street name will have the same legal effect as a vote against approval of the
Plan of Reorganization. See "Voting Agreements" immediately above for a
discussion of the ownership of Company Common Stock by various officers,
directors, and shareholders of the Company. The Board of Directors of the
Company unanimously recommends that the Company shareholders vote "FOR" approval
of the Plan of Reorganization and urges each shareholder to complete, sign and
return a Proxy to ensure that his or her shares are represented at the Special
Meeting.

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

Opinion of the Company's Financial Advisor

      At the meeting of the Board of Directors of the Company on June 23, 1998,
at which the terms of the proposed Reorganization were discussed and considered,
Howe Barnes Investments, Inc. ("HBI") rendered an opinion to the Company's Board
of Directors that, as of the date of such opinion and based upon the matters set
forth in such opinion, the merger consideration was fair, from a financial point
of view, to the holders of Company Common Stock.

      The full text of HBI's opinion dated the date hereof, which sets forth
assumptions made, procedures followed, matters considered, and limits on the
review undertaken by HBI, is attached as Appendix B and is incorporated herein
by reference. The description of the HBI opinion set forth in this Proxy
Statement/Prospectus is qualified in its entirely by reference to the full text
of such opinion. Kersey stockholders are urged to read the HBI opinion in its
entirety.

      HBI's opinion as expressed herein is limited to the fairness, from a
financial point of view, of the merger consideration to the holders of Company
Common Stock and does not address the Company's underlying business decision to
proceed with the Reorganization, nor does it express an opinion as to the prices
at which shares of Zions Common Stock issued in the Reorganization may trade if
and when they are issued or at any future time. The opinion is directed only to
the merger consideration in the Reorganization and does not constitute a
recommendation to any holder of Company Common Stock as to how such holder
should vote with respect to the Plan of Reorganization at any meeting of holders
of Company Common Stock.


                                       22

<PAGE>



      HBI, as part of its investment banking business, is regularly engaged in
the valuation of banks and bank holding companies, thrifts and thrift holding
companies, and various other financial services companies, in connection with
mergers and acquisitions, initial and secondary offerings of securities, and
valuations for other purposes. The Company's Board of Directors selected HBI on
the basis of its familiarity with the financial services industry, its
qualifications, ability, previous experience, and its reputation with respect to
such matters.

      For purposes of its opinion dated the date hereof and in connection with
its review of the proposed transaction with Zions, HBI, among other things: (i)
participated in discussions with representatives of the Company concerning the
Company's financial condition, businesses, assets, earnings, prospects, and such
senior management's views as to its future financial performance; (ii) reviewed
the terms of the Plan of Reorganization; (iii) reviewed this Proxy
Statement/Prospectus; (iv) reviewed certain publicly available financial
statements, both audited (where available) and unaudited, and related financial
information of the Company and Zions, including those included in their
respective Annual Reports or Form 10-K for the past three years ended and the
respective Quarterly Reports or Form 10-Q for the periods ended March 31, 1998,
September 30, 1997, June 30, 1997, and March 31, 1997, as well as other
internally generated reports relating to asset/liability management, asset
quality, and so forth; (v) reviewed certain financial forecasts and projections
of the Company prepared by its management and reviewed publicly available
information, earnings estimates, and research reports available for Zions; (vi)
discussed and reviewed certain aspects of the past and current business
operations, financial condition, and future prospects of the Company with
certain members of management; (vii) reviewed reported market prices and
historical trading activity of Zions Common Stock; (viii) reviewed certain
aspects of the financial performance of the Company and Zions and compared such
financial performance of the Company and Zions, together with stock market data
relating to Zions Common Stock, with similar data available for certain other
financial institutions and certain of their publicly traded securities; and (ix)
reviewed certain of the financial terms, to the extent publicly available, of
certain recent business combinations involving other financial institutions.

      In conducting its review and rendering its opinion dated the date hereof,
HBI assumed and relied, without independent verification, upon the accuracy and
completeness of all of the financial and other information that has been
provided to HBI by the Company, Zions, and their respective representatives, and
of the publicly available information that was reviewed by HBI. HBI is not an
expert in the evaluation of allowances for loan losses and has not independently
verified such allowances, and has relied on and assumed that the aggregate
allowances for loan losses set forth in the balance sheets of each of the
Company and Zions at December 31, 1997, are adequate to cover such losses and
complied fully with applicable law, regulatory policy, and sound banking
practice as of the date of such financial statements. HBI was not retained to
and did not conduct a physical inspection of any of the properties or facilities
of the Company or Zions, did not make any independent evaluation or appraisal of
the assets, liabilities or prospects of the Company or Zions, and was not
furnished with any such evaluation or appraisal. HBI's opinion is necessarily
based on economic, market, and other conditions as in effect on, and the
information made available to us as of, the date hereof.


                                       23

<PAGE>



      The following is a brief summary of the analyses presented by HBI to the
Company's Board of Directors in connection with HBI's written opinion.

      Stock Trading History. HBI examined the history of trading prices and
volume for Zions Common Stock and the relationship between the movements of such
trading prices to movements of the Standard & Poor's 500 Index, other financial
indices, and of the trading prices of the common stocks of the companies in the
Zions Peer Group (consisting of AmSouth Bancorporation, BOK Financial
Corporation, CCB Financial Corporation, Centura Banks, Inc., City National
Corporation, Colonial BancGroup, Inc,. Commerce Bancshares, Inc., Community
First Bancshares, Inc., Compass Bancshares, Inc., Cullen/Frost Bankers, Inc.,
First American Corporation, First Security Corporation, First Tennessee National
Corp, First Virginia Banks, FirstMerit Corporation, Fulton Financial
Corporation, Hibernia Corporation, Imperial Bancorp, Keystone Financial, Inc.,
M&T Bank Corporation, Marshall & Ilsley Corporation, Mercantile Bankshares
Corporation, North Fork Bancorporation, Inc., Old Kent Financial Corporation,
Old national Bancorp, One Valley Bancorp, Inc., Provident Financial Group, Inc.,
Riggs National Corporation, Star Banc Corporation, Synovus Financial Corp., TCF
Financial Corporation, Trustmark Corporation, Union Planters Corporation, Valley
National Bancorp, and Wilmington Trust Corporation), all of which are
publicly-traded bank holding companies located in the Plains and Mountain
States, South, and Southwest United States with total assets between $5.0
billion and $20.0 billion. The companies in the Zions Peer Group are similar in
size to Zions, and operate in an economic, geographic, and demographic
environment that HBI deemed to be similar to the environment in which Zions
operates. Comparative financial statistics were reviewed and particular
attention was given to the one-year period leading up to the date of the
fairness opinion. Company Common Stock is not quoted on an organized exchange
and no active trading market has developed for the Common Stock of the Company.

      Comparable Company Analysis. HBI calculated, reviewed, and compared
selected publicly-available financial data and ratios (at or for the twelve
months ended March 31, 1998) and trading multiples (as of June 22, 1998) for
Zions to the corresponding ratios and multiples of the Zions Peer Group. The
trading multiples used in comparing Zions to the Zions Peer Group were market
price as a multiple of: (i) book value (which was 4.94x for Zions as compared to
a mean of 3.05x for the Zions Peer Group); (ii) tangible book value (which was
6.46x for Zions as compared to a mean of 3.04x for the Zions Peer Group); (iii)
earnings per share ("EPS") for the twelve months ended March 31, 1998 (which was
26.0x for Zions compared to a mean of 20.1x for the Zions Peer Group); (iv) 1998
estimated EPS (which was 22.8x for Zions compared to a mean of 18.1x for the
Zions Peer Group); and (v) 1999 estimated EPS (which was 19.4x for Zions
compared to a mean of 16.5x for the Zions Peer Group). HBI used earnings
estimates as published by the Institutional Brokers Estimate System ("IBES"),
where available, for the companies comprising the Zions Peer Group. IBES is a
data service which monitors and publishes a compilation of earnings estimates
produced by selected research analysts on companies of interest to investors.
Where IBES estimates were not available, HBI used consensus earnings estimates
from alternative publicly-recognized earnings estimate services.


                                       24

<PAGE>



      Since Company Common Stock does not trade on any organized exchange and an
active market for Company Common Stock has not developed, the usefulness of
comparing trading multiples of the Company to a comparable company peer group is
diminished.

      Comparable Transaction Analysis. As part of its analyses, HBI reviewed 21
completed or pending comparable mergers and acquisitions of commercial banks and
bank holding companies headquartered throughout the United States announced from
May 1, 1997, to June 8, 1998, in which total assets of the acquired company were
in the approximate range of $100 million to $200 million ("Comparable
Transactions"). For each transaction for which data was available, HBI
calculated the multiple of the offer value to the acquired company's: (i) EPS
for the twelve months preceding ("LTM"); (ii) book value per share; and (iii)
premium to core deposits.

      The calculations for the Comparable Transactions yielded a range of
multiples of offer value to LTM EPS of 9.1x to 38.4x, with a mean of 18.4x and a
median of 16.8x; a range of multiples of offer value to book value of 1.81x to
4.24x, with a mean of 2.78x and a median of 2.63x; a range of multiples of offer
value to tangible book value of 1.84x to 4.24x, with a mean of 2.85x and a
median of 2.82x; and a range of percentages of offer value premium to core
deposits of 3.2% to 32.1%, with a mean of 18.2% and a median of 16.4%.

      HBI compared these multiples with the corresponding multiples for the
Reorganization, valuing the merger consideration at $28.2 million or $456.22 per
share. In calculating the multiples for the Reorganization, HBI used the
Company's EPS for the twelve months ended March 31, 1998, and book value per
share and core deposits as of March 31, 1998. HBI calculated that the merger
consideration represented multiples of 25.0x the Company's LTM EPS, 3.32x its
book value per share, 3.45x its tangible book value per share, and a core
deposit premium of 17.4%.

      No company or transaction used in the above analyses as a comparison is
identical to the Company, Zions, or the Reorganization. Accordingly, an analysis
of the results of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial operating
characteristics, including, among other things, differences in revenue
composition and earnings performance among the companies, and other facts that
could affect the public trading value of the companies to which they are being
compared.

      Discounted Cash Flow Analysis. Using discounted cash flow analysis, HBI
estimated the future dividend streams that the Company could produce over the
period from January 1, 1998, through December 31, 2002, assuming an annual asset
growth rate of 10.0%; and further assumed the Company performed in accordance
with recent historical trends and the future outlook of the Company management.
HBI calculated terminal values as a perpetuity using an asset growth rate of
3.0%. The dividend streams and terminal value were discounted to present values
as of December 31, 1997, using discount rates ranging from 12.0% to 14.0%, which
reflects different assumptions regarding the required rates of return to holders
and prospective buyers of Company Common Stock. HBI estimated a range of
terminal values by applying


                                       25

<PAGE>



multiples ranging from 18 times to 22 times estimated year-end 2002 net income.
The range of terminal multiples was chosen based on past and current trading
multiples of institutions similar to the Company and past and current multiples
of comparable merger and acquisition transactions. The range of present values
of the Company resulting from this analysis was $23.6 million to $30.7 million,
or $381.51 to $496.52 per share.

      Contribution Analysis. HBI analyzed the contribution of the Company and
Zions to the pro forma assets, gross loans, deposits, equity, tangible equity
and earnings for the last twelve months and 1998 estimated earnings and market
value. This analysis demonstrated that the Company contributed to Zions
approximately 1.52% of assets, 1.97% of gross loans, 1.68% of deposits, 1.16% of
equity, 1.46% of tangible equity, 0.87% of earnings for the last twelve months
and 1.21% of 1998 estimated earnings. The Exchange Ratio (as implied by $28.2
million divided by Zions stock price of $52.00 per share on June 22, 1998)
implies that the Company's shareholders will own approximately 0.78% of the pro
forma shares outstanding upon completion of the merger.

      In connection with its written opinion dated as of the date of this Proxy
Statement/ Prospectus, HBI performed procedures to update certain of its
analyses and reviewed the assumptions on which such analyses were based and the
factors considered in connection therewith. In updating its opinion, HBI did not
utilize any methods of analysis in addition to those described.

      The foregoing is a summary of the material financial analyses performed by
HBI and presented to the Company Board of Directors, but does not purport to be
a complete description of the analyses performed by HBI. The preparation of a
fairness opinion is a complex process and is not necessarily susceptible to
partial analysis or summary description. Furthermore, in arriving at its
opinion, HBI did not attribute any particular weight to any analysis or factor
considered by it, but rather made qualitative judgments as to the significance
and relevance of each analysis and factor. Selecting portions of the analyses or
of the summary set forth above, without considering the analyses as a whole,
could create an incomplete view of the processes underlying HBI's opinion. The
ranges of valuations resulting from any particular analysis described above
should not be taken to be HBI's view of the actual value of the Company, or the
current or future trading price for Zions Common Stock.

      In performing its analyses, HBI made numerous assumptions with respect to
industry performance, business and economic conditions and other matters, many
of which are beyond the control of the Company and Zions. The analyses performed
by HBI are not necessarily indicative of actual values of future results, which
may be significantly more or less favorable than suggested by such analyses.
Such analyses were prepared solely as part of HBI's analysis of the fairness of
the merger consideration, from a financial point of view, to the holders of
Company Common Stock. The analyses do not purport to be appraisals or to reflect
the prices at which a company or its securities may actually be bought or sold.



                                       26

<PAGE>



      Pursuant to the terms of a letter agreement dated April 30, 1998, the
Company agreed to pay HBI for its services in connection with the rendering of
its opinion. The Company has paid HBI an up-front fee of $6,250 and a second fee
of $18,750 for its Board of Directors presentation and written opinion rendered
June 23, 1998. In addition, Kersey agreed to indemnify HBI against certain
liabilities arising out of its engagement, including liabilities under the
federal securities laws.

Conversion of Company Shares

      Under the Plan of Reorganization, Company shareholders will receive shares
of Zions Common Stock. As a result of the Reorganization, the shares of Company
Common Stock will be canceled and immediately converted into the right for
Company shareholders to receive shares of Zions Common Stock. In exchange for
each share of Company Common Stock that they own, Company shareholders will
receive that number of shares of Zions Common Stock calculated by dividing the
Purchase Price by the Average Closing Price, and by further dividing the number
so reached by the number of shares of Company Common Stock issued and
outstanding as of the Effective Date of the Reorganization.

      Because of the variable nature of the Purchase Price and the Average
Closing Price, the parties will not be able to determine and know until the
Effective Date the precise rate of exchange and the precise number of shares of
Zions Common Stock that the shareholders of the Company will receive for each
share of Company Common Stock.

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

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


                                       27

<PAGE>




      Payment for Fractional Shares. Zions will not issue any fractional shares
of its Common Stock in connection with the Reorganization. Instead, each Company
shareholder who surrenders for exchange Company Common Stock certificates
representing a fraction of a share of Zions Common Stock will receive, in
addition to a certificate for the whole shares of Zions Common Stock represented
by the surrendered certificates, cash in an amount equal to the product of such
fraction times the Average Closing Price. Shareholders will have no further
rights as shareholders with respect to fractional shares.

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

Federal Income Tax Consequences of the Reorganization

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

         The Reorganization is intended to qualify as to tax-free reorganization
under Section 368(a) of the Code. Accordingly, the Company will not recognize
gain or loss for federal income tax purposes upon the Reorganization and that
the shareholders of the Company will have the following federal income tax
consequences upon the Reorganization: (i) no gain or loss will be recognized
upon the receipt of Zions Common Stock, except to the extent that cash, if any,
is received in lieu of fractional shares of Zions Common Stock; (ii) the tax
basis of the Zions Common Stock to be received in the Reorganization (including
any fractional share interest) will be the same as the tax basis of the Company
Common Stock surrendered in exchange therefor; (iii) the holding period of the
Zions Common Stock to be received in the Reorganization will include the holding
period of the Company Common Stock surrendered in exchange therefor, provided
the Company Common Stock was held as a capital asset on the date of the
exchange; (iv) if any cash is received in lieu of a fractional share of Zions
Common Stock, gain or loss will be recognized in an amount equal to the
difference between the cash received and the shareholder's basis in that
fractional share and such gain or loss will be capital gain or loss if the
fractional share would have been a capital asset in the hands of the
shareholder; and (v) cash received by a dissenter who has perfected dissenters'
rights under the Colorado Business Corporation Act, ss. ss. 7-113-101 et seq. as
to his or to her Company Common Stock will be treated as a distribution in
redemption of said shares, subject to the provisions of Section 302 of the Code.


                                       28

<PAGE>



      The Company will receive an opinion from Slivka Robinson Waters &
O'Dorisio, P.C., legal counsel to the Company (the "Slivka Opinion") as to the
tax consequences of the Reorganization. No ruling will be requested from the IRS
with respect to the federal income tax consequences of the Reorganization. An
opinion of counsel only represents counsel's best judgment and is not binding on
the IRS or the courts. Accordingly, no assurance can be given that the IRS will
agree with counsel's conclusions, that the IRS will not challenge the tax
treatment of the Reorganization, or that such a challenge, if made, will not be
successful.

      A copy of the Slivka Opinion has been filed with the SEC as an exhibit to
the Registration Statement and is incorporated in this Proxy
Statement/Prospectus by reference. The foregoing summary of the Slivka Opinion
is qualified in its entirety by reference to such filing.

Rights of Dissenting Shareholders

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

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

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

      Procedure for Dissenting. A shareholder wishing to dissent from the
Reorganization must deliver to the Company, before the vote is taken at the
Special Meeting, written notice of his or her intent to demand payment for his
or her shares if the Reorganization is consummated. The written notice should be
sent to the Company at 301 First Street, Kersey, Colorado 80644-0558 long
enough before the Special Meeting so that the Company receives such notice
before the vote is taken at the Special Meeting. A shareholder wishing to
dissent must also not vote in favor of the Reorganization. If a shareholder's
written notice of intent to demand payment is not received by the Company before
the Special Meeting, or if the shareholder votes in favor of the


                                       29

<PAGE>



Reorganization, such shareholder will not have the right to dissent and will be
required to participate in the Reorganization. A vote by a shareholder at the
Special Meeting against the Plan of Reorganization and the Reorganization will
not constitute notice under Colorado law of an intent to exercise appraisal
rights.

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

      The Dissenting Shareholder must then properly complete and sign the
payment demand form, and submit it to Val Cor along with his or her Company
Common Stock certificates by the deadline shown in the notice from Val Cor. If
the payment demand form and the Company Common Stock certificates are not
submitted by the deadline, the shareholder will no longer be a Dissenting
Shareholder and will not be entitled to receive payment of the fair value of his
or her shares under the dissenters' rights provisions of Colorado law. Such a
shareholder will be required to participate in the Reorganization. The payment
demand form and Company Common Stock certificates should be sent to Val Cor at
1650 South Colorado Boulevard, Suite 320, Denver, Colorado 80222.

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

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



                                       30

<PAGE>



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

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

      The foregoing is not a complete statement of the procedures to be followed
by Company shareholders desiring to exercise appraisal rights and, because
exercise of such rights requires strict adherence to the relevant provisions of
the Colorado Business Corporation Act, each shareholder desiring to exercise
appraisal rights is advised individually to consult the law (as provided in
Appendix C to this Proxy Statement/ Prospectus) and comply with the relevant
provisions of the law.

      Company shareholders wishing to exercise dissenters' rights are advised to
consult their own counsel to ensure that they fully and properly comply with the
requirements of Colorado law.

Interests of Certain Persons in the Transaction

      The Plan of Reorganization provides that after the Reorganization becomes
effective, Larry G. Neuschwanger, currently president and chief executive
officer of the Bank, will become an executive officer of Vectra Bank. Mr.
Neuschwanger will enter into an employment agreement with Vectra Bank effective
as of the Effective Date. The Board of Directors of the Company was aware of
these interests when it considered and approved the Plan of Reorganization. The
terms of the agreement will continue until the third anniversary of the
commencement of the agreement. The agreement provides that Mr. Neuschwanger will
receive a salary not less than $82,000 per annum. Mr. Neuschwanger will be
eligible to be considered for salary increases, upon review, and will be
entitled to other benefits normally afforded executive employees, including
employee benefit plan participation, retirement and life insurance policies.
Additionally, in consideration for Mr. Neuschwanger's agreement not to compete
with Zions or Vectra Bank or their affiliates within Larimer, Logan, Morgan, and
Weld Counties, Colorado, until the earlier of the second anniversary of the
termination of his employment under the agreement or the fifth anniversary of
the commencement of the


                                       31

<PAGE>



agreement, Vectra Bank will pay Mr. Neuschwanger during the period commencing on
the earlier of the termination of his employment under the agreement or the
third anniversary of the commencement of the agreement the amount of $12,500 per
month, up to $300,000.

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

      Under his employment agreement, Mr. Neuschwanger will agree that he will
not during the term of his employment and until the earlier of the second
anniversary of the date of termination of his employment by Vectra Bank under
the employment agreement or the fifth anniversary of the commencement of his
employment (i) engage in the banking business other than on behalf of Zions or
Vectra Bank or their affiliates within the market area of Larimer, Logan, Morgan
and Weld Counties, Colorado; (ii) directly or indirectly own, manage, operate,
control, be employed by, or provide management or consulting services in any
capacity to any firm, corporation, or other entity (other than Zions or Vectra
Bank or their affiliates) engaged in the banking business in such market area,
or (iii) directly or indirectly solicit or otherwise intentionally cause any
employee, officer, or member of the respective Boards of Directors of Vectra
Bank or any of its affiliates to engage in any action prohibited under (i) or
(ii) above.

Inconsistent Activities

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


                                       32

<PAGE>



Conduct of Business Pending the Reorganization

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

      Prior to the Effective Date, the Company and the Bank have each agreed
that neither will without Zions' prior written consent: (i) declare or pay any
cash dividends or property dividends with respect to any class of its capital
stock; (ii) declare or distribute any stock dividend, authorize any stock split,
authorize, issue or make any distribution of its capital stock or other
securities except for the issuance of Company Common Stock upon exercise of
existing stock options, or grant any options to acquire such securities; (iii)
except as contemplated by the Plan of Reorganization, merge into, consolidate
with or sell its assets to any other person, or enter into any other transaction
or agree to effect any other transaction not in the ordinary course of its
business or engage in any discussions concerning such a possible transaction;
(iv) convert the charter or form of entity of the Bank to any other charter or
form of entity; (v) make any direct or indirect redemption, purchase or other
acquisition of any of its capital stock; (vi) incur any liability or obligation,
make any commitment or disbursement, acquire or dispose of any property or
asset, make any agreement or engage in any transaction, except in the ordinary
course of its business; (vii) subject any of its properties or assets to any
lien, claim, charge, option or encumbrance, except in the ordinary course of its
business; (viii) institute or agree to any increase in the compensation of any
employee, except for ordinary increases in accordance with past practices not to
exceed (when aggregated with all other such increases) 4.5% per annum of the
aggregate payroll as of January 1, 1998; (ix) create or modify any pension or
profit-sharing plan, bonus, deferred compensation, death benefit or retirement
plan, or the level of benefits under any such plan, or increase or decrease any
severance or termination pay benefit or any other fringe benefit; (x) enter into
any employment or personal services contract with any person or firm except
directly to facilitate the Reorganization; nor (xi) purchase any loans or
loan-participation interests from, or participate in any loan originated by, any
person other than the Company or the Bank.

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

Conditions to the Reorganization

      The obligations of the parties to consummate the Reorganization are
subject to, among other things, the satisfaction of the following conditions:
(i) the parties shall have received all orders, consents and approvals from all
requisite governmental authorities for the completion of the Reorganization;
(ii) certain litigation restraining, enjoining, or prohibiting the
Reorganization, as more fully specified in the Plan of Reorganization, shall not
have been


                                       33

<PAGE>



instituted or threatened; (iii) the registration statement to be filed by Zions
under the Securities Act in connection with the registration of the shares of
Zions Common Stock which will be used as consideration in connection with the
Reorganization shall have become effective under the Securities Act, and Zions
shall have received all required state securities laws permits and other
required authorizations or confirmations of the availability of exemption from
registration requirements necessary to issue Zions Common Stock in the
Reorganization, and neither the registration statement nor any such required
permit, authorization or confirmation shall be subject to a stop-order or
threatened stop-order by the SEC or any state securities authority; (iv) the
Company and Zions shall have received a written opinion from tax counsel that
the Reorganization shall qualify as a tax free reorganization under the Code and
the regulations and rulings promulgated thereunder; and (v) there shall be no
adverse legislation or governmental regulation which would make the transaction
contemplated impossible.

      The obligations of Zions, Val Cor and Vectra Bank to consummate the
Reorganization are subject to satisfaction or waiver of certain additional
conditions, including: (i) the shareholders of the Company shall have authorized
the Holding Company Merger; (ii) all representations and warranties made by the
Company and the Bank in the Plan of Reorganization shall be true and correct in
all material respects on the Effective Date and the Company and the Bank shall
have performed all of their respective obligations under the Plan of
Reorganization on or prior to the Effective Date; (iii) Slivka Robinson Waters &
O'Dorisio, P.C., legal counsel to the Company, shall have rendered a legal
opinion to Zions in form and substance as provided in the Plan of
Reorganization; (iv) the Company shall have delivered to Zions all regulatory
authorizations entitling the Bank to operate each of its branches; (v) during
the period from December 31, 1997 to the Effective Date, there shall have been
no material adverse change in the financial position or results of operations of
the Company or the Bank nor shall the Company or the Bank have sustained any
material loss or damage to its properties which materially affects its ability
to conduct its business; (vi) on and as of the Effective Date the consolidated
net worth of the Company as determined in accordance with generally accepted
accounting principles shall not be less than the sum of (a) $8,086,000 and (b)
the aggregate contributions to capital caused by the payments accompanying the
exercise of any stock options on or after December 31, 1997; (vii) on and as of
the Effective Date, the aggregate reserve for loan losses of the Bank as
determined in accordance with generally accepted accounting principles shall not
be less than $1,836,000; (viii) the CRA rating of the Bank shall be no lower
than "satisfactory"; (ix) Mr. Neuschwanger shall have entered into an employment
agreement with Vectra Bank in the form provided in the Plan of Reorganization;
(x) Zions shall have received concurrence of its determination that the
Reorganization contemplated by the Plan of Reorganization will qualify for
"pooling of interests" accounting treatment in accordance with APB Opinion No.
16; (xi) the audit of the consolidated accounts of the Company and the Bank by
Fortner, Bayens, Levkulich & Co., P.C. as of December 31, 1997 and for the year
then ended shall have been completed, and the results of such audit shall be
reasonably acceptable to Zions; and (xii) Zions shall have received a written
agreement from each "affiliate" of the Company not to sell, pledge or otherwise
dispose of their shares of Company Common Stock or Zions Common Stock for
specified periods prior to and subsequent to the Effective Date and except in
compliance with the applicable provisions of the Securities Act.




                                       34

<PAGE>



      The obligations of the Company and the Bank to consummate the
Reorganization are subject to the satisfaction or waiver of certain additional
conditions, including: (i) all representations and warranties made by Zions, Val
Cor and Vectra Bank in the Plan of Reorganization shall be true and correct in
all material respects on the Effective Date and Zions, Val Cor and Vectra Bank
shall have performed all of their respective obligations under the Plan of
Reorganization on or prior to the Effective Date; (ii) receipt of a legal
opinion of Duane, Morris & Heckscher LLP, legal counsel to Zions, in form and
substance as provided in the Plan of Reorganization; (iii) during the period
from December 31, 1997 to the Effective Date, there shall be no material adverse
change in the financial position or results of operations of Zions nor shall
Zions have sustained any material loss or damage to its properties which
materially affects its ability to conduct its business; (iv) the Company shall
have received concurrence of its determination that the Reorganization
contemplated by the Plan of Reorganization will qualify for "pooling of
interests" accounting treatment; (v) Zions Common Stock shall be quoted on
Nasdaq-NMS or shall be listed on a national securities exchange; and (vi)
receipt of a fairness opinion of Howe Barnes Investments, Inc. to the effect
that the transactions contemplated by the Plan of Reorganization are fair, from
a financial point of view, to the Company and its shareholders.

Representations and Warranties

      The representations and warranties of the parties contained in the Plan of
Reorganization relate, among other things, to the organization and good standing
of the parties; the capitalization of the parties; the authorization by the
parties of the Plan of Reorganization and the absence of conflict with laws or
other agreements to which the respective parties are subject; the accuracy and
completeness of the financial statements and other information furnished to the
other party; the absence of material adverse changes in the condition, assets,
properties or businesses since December 31, 1997 with respect to Zions, the
Company and the Bank; the absence of undisclosed material liabilities; and
compliance with laws. The Company has additionally warranted that since December
31, 1997 there has been no material deterioration in the quality of its
consolidated loan portfolio and no material increase in the consolidated level
of its nonperforming assets or non-accrual loans or in the level of its
consolidated provision for credit losses or its consolidated reserve for
possible credit losses. The Company has also warranted that its consolidated
reserve for possible credit losses is adequate to absorb reasonably anticipated
losses in the consolidated loan and lease portfolios of the Company.

      The parties have additionally warranted that they do not know of any facts
which reasonably might materially adversely affect the respective businesses,
assets, liabilities, financial condition, results of operations or prospects of
the Company, the Bank, Zions, Val Cor or Vectra Bank which have not been
disclosed in the financial statements or a certificate delivered to the other
party.



                                       35

<PAGE>



Amendment and Waiver

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

Authorized Termination and Damages for Breach

      The Plan of Reorganization may be terminated and abandoned at any time
prior to the Effective Date, notwithstanding approval of the shareholders of the
Company, as follows: (i) by mutual consent of the parties to the Plan of
Reorganization; (ii) unilaterally, by Zions if any of the representations and
warranties of the Company or the Bank was materially incorrect when made or in
the event of a material breach or material failure by the Company or the Bank of
any covenant or agreement of the Company or the Bank contained in the Plan of
Reorganization which has not been, or cannot be, cured within thirty days after
written notice has been given; (iii) unilaterally, by the Company if any of the
representations and warranties of Zions, Val Cor or Vectra Bank was materially
incorrect when made or in the event of a material breach or material failure by
Zions, Val Cor or Vectra Bank of any covenant or agreement of Zions, Val Cor or
Vectra Bank contained in the Plan of Reorganization which has not been, or
cannot be, cured within thirty days after written notice has been given; (iv) by
either the Company or Zions if the board of directors of either has determined
in good faith that the Holding Company Merger has become inadvisable or
impracticable by reason of federal or state litigation to restrain or invalidate
the transactions contemplated by the Plan of Reorganization; or (v) by any party
on or after January 31, 1999 if the Effective Date has not occurred on or before
that date.

      If either party terminates the Plan of Reorganization because any of the
representations and warranties of a party was materially incorrect when made, or
because of a material breach or material failure by a party of a covenant or
agreement made under the Plan of Reorganization, then such party whose
representations and warranties were materially incorrect or who materially
breached or failed to perform its covenant or agreement shall be liable to the
other party or parties to the Plan of Reorganization not affiliated with it in
the amount of $500,000.

Restrictions on Resales by Company Affiliates

      In general, Company shareholders who receive Zions shares as a result of
the Reorganization will be able to sell such shares freely and without
restriction. However, directors, executive officers, and 10% shareholders of the
Company who generally are considered "affiliates" of the Company, are subject to
restrictions on the sales of shares received


                                       36

<PAGE>



in the Reorganization. Accordingly, those shareholders will not be permitted to
sell their shares of Zions Common Stock acquired in the Reorganization except
pursuant to (i) an effective registration statement under the Securities Act;
(ii) the provisions of Rules 144 and 145 under the Securities Act; or (iii) an
exemption from the registration requirements of the Securities Act.

       Additionally, to ensure the Reorganization may be accounted for as a
pooling of interests, such affiliates will not be permitted to sell any shares
of Company Common Stock or Zions Common Stock during the 30 day period preceding
the Effective Date, nor will they be permitted to sell any shares of Zions
Common Stock following the Effective Date until such time as financial results
covering at least 30 days of post-Holding Company Merger combined operations are
published by Zions. The management of the Company will notify those persons who
it believes may be deemed to be affiliates subject to the foregoing
restrictions. The Plan of Reorganization requires the Company to use its best
efforts to have each affiliate of the Company sign an agreement to limit that
affiliate's ability to effect any such sales. Zions may place restrictive
legends on certificates representing Zions Common Stock issued in the
Reorganization to all persons who are deemed affiliates under Rule 145 of the
Securities Act. Appropriate stop transfer instructions may be given to the
transfer agent for such certificates.

Expenses

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

Government Approvals

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

Effective Date of the Reorganization

      If the Plan of Reorganization is approved by the shareholders of the
Company, the parties expect that the Reorganization will become effective in the
[THIRD] quarter of 1998. However, as noted above, consummation of the
Reorganization is subject to the satisfaction of a number of


                                       37

<PAGE>



conditions, some of which cannot be waived. There can be no assurance that all
conditions to the Reorganization will be satisfied or, if satisfied, that they
will be satisfied in time to permit the Reorganization to become effective in
the [THIRD] quarter of 1998. In addition, as also noted above, the parties
retain the power to abandon the Reorganization or to extend the time for
performance of conditions or obligations necessary to its consummation,
notwithstanding prior shareholder approval.

Accounting Treatment

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

Relationship Between Zions and the Company

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

                           SUPERVISION AND REGULATION

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

Zions

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


                                       38

<PAGE>



competition or gains in efficiency that outweigh possible adverse effects, such
as undue concentration of resources, decreased or unfair competition, conflicts
of interest or unsound banking practices.

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

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

Regulatory Capital Requirements

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



                                       39

<PAGE>



      Risk-based capital ratios are calculated with reference to risk-weighted
assets, which include both on-balance sheet and off-balance sheet exposures. The
risk-based capital framework contains four risk weight categories for bank
holding company assets--0%, 20%, 50% and 100%. Zero percent risk-weighted assets
include, generally, cash and balances due from federal reserve banks and
obligations unconditionally guaranteed by the U.S. government or its agencies.
Twenty percent risk-weighted assets include, generally, claims on U.S. banks and
obligations guaranteed by U.S. government sponsored agencies as well as general
obligations of states or other political subdivisions of the United States.
Fifty percent risk-weighted assets include, generally, loans fully secured by
first liens on one-to-four family residential properties, subject to certain
conditions. All assets not included in the foregoing categories are assigned to
the 100% risk-weighted category, including loans to commercial and other
borrowers. As of year-end 1992, the minimum required ratio for qualifying Total
Capital became 8%, of which at least 4% must consist of Tier 1 Capital. At March
31, 1998, Zions' Tier 1 and Total Capital ratios were 11.73% and 13.62%,
respectively.

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

       The following table presents Zions' regulatory capital position at March
31, 1998 under the risk-based capital guidelines.



                                       40

<PAGE>



                               Risk-Based Capital
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                Percent
                                                                                of Risk-
                                                                                Adjusted
                                                            Amount               Assets
                                                            ------               ------
<S>                                                        <C>                  <C>
Tier 1 Capital.....................................        $   739,427             11.73%
Minimum Requirement................................            252,629              4.00
                                                           -----------          --------
  Excess...........................................        $   486,798              7.73%
                                                           ===========          ========

Total Capital......................................        $   858,374             13.62%
Minimum Requirement................................            505,258              8.00
                                                           -----------          --------
  Excess...........................................        $   353,116              5.62%
                                                           ===========          ========

Risk-Adjusted Assets,
  net of goodwill, excess deferred
  tax assets and excess allowance..................        $ 6,315,727            100.00%
                                                           ===========          ========
</TABLE>


         Minimum Leverage Ratio. The Board of Governors has adopted capital
standards and leverage capital guidelines that include a minimum leverage ratio
of 3% Tier 1 Capital to total assets (the "leverage ratio"). The leverage ratio
is used in tandem with a risk-based ratio of 8% that took effect at the end of
1992. At March 31, 1998, Zions' leverage ratio was 6.89%.

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

         The following table presents Zions' leverage ratio at March 31, 1998. A
leverage ratio of 3% will be the minimum required for the most highly rated
banking organizations, and according to the Board of Governors, other banking
organizations would be expected to maintain capital at higher levels.



                                       41

<PAGE>


<TABLE>
<CAPTION>

                                                                            (Dollars in thousands)
                                                                                                Percent
                                                                                                of Average
                                                                                                Assets, Net
                                                                        Amount                  of Goodwill
                                                                        ------                  -----------
<S>                                                                   <C>                           <C>  
Tier 1 Capital.......................................                 $   739,427                   6.89%
Minimum Requirement........................                               321,985                   3.00
                                                                      -----------                 ------

Excess..................................................              $   417,442                   3.89%
                                                                      ===========                 =======

Average Assets, net of goodwill and
  deferred tax assets.............................                    $10,732,823                 100.00%
                                                                      ===========                 =======
</TABLE>

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

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

         Failure to meet capital guidelines could subject a bank to a variety of
restrictions and enforcement remedies. All insured banks are generally
prohibited from making any capital distributions and from paying management fees
to persons having control of the bank where such payments would cause the bank
to be undercapitalized. Holding companies of critically undercapitalized,
significantly undercapitalized and certain undercapitalized banks are required
to obtain the approval of the Board of Governors before paying capital
distributions to their shareholders. Moreover, a bank that is not well
capitalized is generally subject to various restrictions on "pass through"
insurance coverage for certain of its accounts and is generally prohibited from
accepting brokered deposits and offering interest rates on any deposits


                                       42

<PAGE>



significantly higher than the prevailing rate in its normal market area or
nationally (depending upon where the deposits are solicited). Such banks and
their holding companies are also required to obtain regulatory approval prior to
their hiring of senior executive officers.

         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

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

         FDICIA also contains provisions which, among other things, restrict
investments and activities as principal by state nonmember banks to those for
which national banks are eligible, impose limitations on deposit account balance
determinations for calculating interest, and require


                                       43

<PAGE>



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
financing construction of a building or other improvements to real estate, loans
to bank insiders, regulatory accounting and reports, internal control reports,
independent audits, exposure on interbank liabilities, contractual arrangements
under which institutions receive goods, products or services, deposit account-
related disclosures and advertising as well as to impose restrictions on federal
reserve discount window advances for certain institutions and to require that
insured depository institutions generally be examined on-site by federal or
state personnel at least once every 12 months.

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

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

Deposit Insurance and Other Assessments

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


                                       44

<PAGE>



the FDIC; (ii) the effect of assessments upon members' earnings and capital; and
(iii) any other factors deemed appropriate by it.

         At 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, established by the Federal Housing Finance Board under FIRREA, to
enable it to pay interest and certain other expenses on bonds which it issued to
facilitate the resolution of failed savings associations. Under 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. At June 30,
1998, assessment rates were set at 1.22 basis points annually for BIF-assessable
deposits and 6.10 basis points annually for SAIF-assessable deposits.

Interstate Banking

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

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



                                       45

<PAGE>



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

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

         Bank holding companies whose home state is Utah are authorized to
acquire control of depository institutions and depository institution holding
companies located in other states. Colorado law authorizes an out-of-state bank
holding company, with the prior approval of the Division, to acquire a Colorado
bank holding company whose operations are principally conducted within the state
irrespective of the number of years the depository institution subsidiaries of
the Colorado bank holding company have been in operation provided that at the
time of acquisition, the out-of-state bank holding company will not control more
than 25 percent of the aggregate deposits made in federally-insured banks,
savings and loan associations, federal savings banks, industrial banks, bank
holding companies, thrift holding companies and industrial bank holding
companies located in the state and certain other requirements are satisfied.

                                 MONETARY POLICY

         Our earnings are directly affected by the monetary and fiscal policies
of the federal government and governmental agencies. The Board of Governors has
broad powers to expand and constrict the supply of money and credit and to
regulate the reserves which its member banks must maintain based on deposits.
These broad powers are used to influence the growth of bank loans, investments
and deposits, and may affect the interest rates which will prevail in the


                                       46

<PAGE>



market for loans and investments and deposits. Governmental and Federal Reserve
Board monetary policies have had a significant effect on the operating results
of commercial banks in the past and are expected to do so in the future. We
cannot predict the future impact of such policies and practices on our growth or
profitability.

                   INFORMATION CONCERNING ZIONS BANCORPORATION

Selected Financial Data

         The following unaudited table of selected financial data should be read
in conjunction with the related notes included herein and Zions' consolidated
financial statements and the related notes thereto, which are incorporated by
reference in this Proxy Statement/Prospectus. See "Zions Documents Incorporated
by Reference."



                                       47

<PAGE>



ZIONS BANCORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA

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

<TABLE>
<CAPTION>
 
                                                 As of, and for the Three                    As of, and for the
                                                  Months Ended March 31,                    Year Ended December 31,
                                                 ------------------------     -----------------------------------------------------
                                                     1998        1997         1997        1996        1995         1994        1993
                                                     ----        ----         ----        ----        ----         ----        ----
<S>                                          <C>            <C>        <C>         <C>          <C>          <C>         <C>
EARNINGS SUMMARY
Taxable-equivalent net interest income       $    110,812 $    84,643  $   358,676 $   296,372  $  238,880  $   203,313 $   178,636
Net interest income                               107,943      82,898      351,799     289,166     233,547      198,606     174,657
Noninterest income                                 43,794      34,136      143,167     114,270      88,811       73,202      79,880
Provision for loan losses                           3,256       1,835        6,175       4,640       3,000        2,181       2,993
Noninterest expenses (1)                           95,414      68,176      301,218     235,272     195,186      174,900     167,750
Income taxes                                       16,626      16,438       65,211      56,101      41,787       30,900      27,248
Income before cumulative effect of changes
     in accounting principles                      36,441      30,585      122,362     107,423      82,385       63,827      56,546
Cumulative effect of changes in
     accounting principles (2)                         --          --           --           -           -            -       1,659
Net income                                         36,441      30,585      122,362     107,423      82,385       63,827      58,205

COMMON STOCK DATA 
Earnings per common share:
Income before cumulative effect of changes 
     in accounting principles- diluted 
                                             $        .52 $        45         1.89 $      1.68  $     1.37  $      1.09 $       .99
Net income - basic                                    .53         .46         1.92        1.70        1.39         1.11        1.03
Net income - diluted                                  .52         .45         1.89        1.68        1.37         1.09        1.02
Dividends declared per share                          .12         .11          .47        .425       .3525          .29        .245
Dividend payout ratio (%)                           22.75%      20.89%       23.20%      23.27%      24.95%       27.06%      21.81%
Book value per share at period end                  10.48        8.75        10.25        8.72        7.46         6.28        5.50
Market to book value at period end (%)                                      442.73%     298.17%     268.90%      142.83%     168.18%
Average common shares outstanding              69,102,000  66,334,000   63,868,000  63,194,000  59,435,000   57,754,000  56,636,000
Weighted average common and common
     equivalent shares outstanding during 
     the period                                70,159,000  68,025,000   64,629,000  63,787,000  60,013,000   58,404,000  57,120,000
Common shares outstanding at period end        69,075,665  67,641,324   63,962,100  63,468,480  62,773,280   58,238,208  56,805,468
                                                                                     6201,3672       7,544

AVERAGE BALANCE SHEET DATA
Money market investments                     $  1,589,899 $ 1,574,842  $ 1,490,772 $   923,670  $  945,842  $   869,709 $   788,694
Securities                                      2,948,283   2,313,412    2,575,295   1,977,875   1,665,500    1,545,704   1,209,165
Loan and leases, net                            5,433,927   4,248,672    4,341,674   3,432,347   2,662,753    2,574,995   2,222,182
Total interest-earning assets                   9,972,109   8,136,926    8,407,741   6,333,892   5,274,095    4,990,408   4,220,041
Total assets                                   10,944,611   8,811,521    9,214,155   6,914,213   5,779,025    5,456,613   4,643,918
Interest-bearing deposits                       5,686,951   4,173,813    4,410,491   3,653,420   3,095,714    2,744,976   2,449,275
Total deposits                                  9,799,027   5,470,654    5,783,370   4,731,889   3,963,702    3,583,094   3,178,926
FHLB advances and other borrowings over 
  one year                                        155,287      71,520      136,381      87,700      96,305      118,607     111,974
Long-term debt                                    277,934     255,024      257,779      55,187      57,506       59,493      75,623
Total interest-bearing liabilities              8,233,290   6,803,097    7,067,324   5,208,318   4,397,582    4,197,865   3,556,746
Shareholders' equity                              709,097     597,689      615,535     512,739     407,498      339,181     286,331

PERIOD END BALANCE SHEET DATA
Money market investments                     $  1,154,038 $ 1,046,568  $   814,088 $   613,429  $  687,251  $   403,446 $   597,680
Securities                                      2,622,465   2,276,470    2,712,094   1,983,643   1,694,669    1,663,433   1,258,939
Loans and leases, net                           5,649,602   4,450,448    4,871,650   3,837,149   3,068,057    2,391,278   2,486,346
Allowance for loan losses                          91,857      81,113       80,481      76,803      73,437       67,018      68,461
Total assets                                   10,611,585   8,508,537    9,521,770   7,116,413   6,095,515    4,934,095   4,801,054
Total deposits                                  7,799,027   5,728,585    6,854,462   5,119,692   4,511,184    3,705,976   3,432,289
FHLB advances and other borrowings over
  one year                                        121,421      69,530      210,681      81,875      95,817      101,571     152,109
Long-term debt                                    276,387     258,704      258,566     251,620      56,229       58,182      59,587
Shareholders' equity                              723,814     591,581      655,460     554,610     469,678      365,770     312,592

</TABLE>




                                       48

<PAGE>



<TABLE>
<CAPTION>
                                                  As of, and for the Three                    As of, and for the
                                                   Months Ended March 31,                    Year Ended December 31,
                                                   ----------------------  -------------------------------------------------------
                                                    1998        1997       1997        1996        1995         1994        1993
                                                    ----        ----       ----        ----        ----         ----        ----
<S>                                              <C>        <C>          <C>         <C>         <C>          <C>         <C>
Nonperforming assets:
     Nonaccrual loans                            $  16,807  $   13,851   $ 11,907    $ 12,704    $ 10,875     $ 13,635    $ 23,364
     Restructured loans                              1,222       1,608        691         857         249          567       4,006
     Other real estate owned and other
          nonperforming assets                       2,377       2,524      3,371         138       1,609        4,741       3,267
     Total nonperforming assets                     20,406      17,983     15,969      13,699      12,733       18,943      30,637
Accruing loans past due 90 days or more             11,714       5,638      9,944       3,563       5,309        3,041      10,821

SELECTED RATIOS
Net interest margin (3)                               4.51%       4.22%      4.27%       4.68%       4.53%        4.07%       4.23%
Return on average assets                              1.35%       1.41%      1.33%       1.55%       1.43%        1.17%       1.25%
Return on average common equity                      20.84%      20.75%     19.88%      20.95%      20.22%       18.82%      20.33%
Ratio of average common equity to average assets      6.48%       6.78%      6.68%       7.42%       7.05%        6.22%       6.17%
Tier I risk-based capital - period end               11.73%      13.95%     11.74%      14.16%      11.33%       11.81%      10.85%
Total risk-based capital - period end                13.62%      16.52%     13.75%      17.52%      14.03%       14.96%      14.12%
Leverage ratio - period end                           6.89%       8.09%      6.75%       8.70%       6.33%        6.24%       5.44%
Ratio of nonperforming assets to total
     assets - period end                               .19%        .21%       .17%        .19%        .21%         .38%        .64%
Ratio of nonperforming assets to net loans and
     leases and other real estate owned and
     other nonperforming assets at period end          .36%        .40%       .33%        .36%        .41%         .79%       1.23%
Ratio of net charge-offs (recoveries) to average
     loans and leases                                  .05%        .17%       .19%        .11%        .10%         .19%      (.23)%
Ratio of allowance for loan losses to net loans
     and leases outstanding at period end             1.63%       1.82%      1.65%       2.00%       2.39%        2.80%       2.75%
Ratio of allowance for loan losses to
     nonperforming loans at period end              509.50%     524.70%    638.84%     566.35%     660.17%      471.89%     250.13%

</TABLE>


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

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

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


                                       49

<PAGE>



Stock Prices and Dividends on Zions Common Stock

         Zions Common Stock is traded on the Nasdaq-NMS under the symbol "ZION."
The following table provides the high and low daily sales prices for Zions
Common Stock for the periods indicated, in each case as reported by the Nasdaq
Stock Market and the cash dividends per share declared on Zions Common Stock for
such periods.


<TABLE>
<CAPTION>
                                                                                                   Cash
                                                                                                 Dividends
                                                                   High           Low            Declared
                                                                   ----           ---            --------
<S>                                                               <C>            <C>              <C>
1996
First Quarter .................................................   $ 19.81        $ 16.69          $.1025
Second Quarter.................................................     19.75          17.00           .1025
Third Quarter..................................................     22.44          18.00             .11
Fourth Quarter.................................................     26.00          21.94             .11
                                                                                                  ------
                                                                                                  $ .425

1997
First Quarter..................................................   $ 33.25        $ 25.69          $  .11
Second Quarter.................................................     37.63          28.38             .12
Third Quarter..................................................     41.13          34.69             .12
Fourth Quarter.................................................     46.00          37.63             .12
                                                                                                  ------
                                                                                                  $  .47

1998
First Quarter..................................................   $ 55.69        $ 39.56          $  .12
Second Quarter.................................................     53.13          48.06             .14
Third Quarter (through  _______, 1998).........................   _______        _______          ______

</TABLE>

         On May 8, 1998, the last Nasdaq-NMS trading date prior to the public
announcement of the Reorganization, the closing sale price for the Zions Common
Stock was $_______. On ______, 1998, the last trading date before this Proxy
Statement/Prospectus was sent to the printers, the closing sale price for the
Zions Common Stock was $______. On _______, 1998, there were approximately
[69,138,844] shares of Zions Common Stock outstanding, held by approximately
[5,438] shareholders of record.

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


                                       50

<PAGE>



                 INFORMATION CONCERNING THE COMPANY AND THE BANK

General

         Independent Bank (formerly known as Kersey State Bank and referred to
herein as the "Bank") was organized as a commercial bank under the laws of the
State of Colorado on August 28, 1979. The Bank, effective as of March 3, 1982,
became a wholly-owned subsidiary of Kersey Bancorp (hereafter referred to as the
"Company"), thereby causing the Company to become a registered bank holding
company under the Bank Holding Company Act in March 1982. As of June 1, 1998,
the outstanding common stock of the Company is owned by 118 shareholders of
record with 61,812 shares issued and outstanding. Since its formation, the
activities of the Company have been limited to the ownership and operation of
the Bank. As a registered bank holding company, the Company is subject to
regulation and examination by the Board of Governors of the Federal Reserve
System and the Division of Banking for the State of Colorado. The Bank is
subject to regulation and examination by the Federal Deposit Insurance
Corporation and the Division of Banking for the State of Colorado.

         Since its inception, the Bank has grown to become a strong community
banking franchise, with over $144 million in assets. Over the past 18 years, the
bank has prospered by establishing and maintaining beneficial relationships with
large and small commercial businesses and increasing the Bank's visibility as a
construction, permanent mortgage and real estate lending bank in the Bank's
geographic area.

         The Bank serves its depositors and customers by delivering a broad
range of commercial banking services through its seven (7) locations. The main
office of the Bank is located at 301 First Street, Kersey, Colorado, with other
branch locations in Ft. Lupton, Platteville, Greeley, Wellington, Wiggins, and
Sterling. The Bank engages in most banking activities, including accepting
savings and checking deposits and making commercial, agricultural, consumer,
construction and real estate mortgage loans. It also offers a variety of banking
products including safe deposit boxes, MasterCard credit cards, debit cards,
cashier's checks, traveler's checks, wire transfers, money orders, and 24-hour
ATM access at three of its locations.

Business

         The Bank is located in the counties of Weld, Larimer, Morgan, and Logan
in the state of Colorado. As of March 31, 1998, the Bank had total assets of
$144.3 million, total deposits of $133.2 million, and total stockholders' equity
of $10.3 million.

         Strategy. The Bank's strategy has been to build and maintain
profitable, and loyal relationships with the people in the communities where the
Bank is located.

         Marketing/Customer Service. The Bank seeks to build and maintain
profitable consumer relationships by maintaining a customer call program. The
program comes from the officers,


                                       51

<PAGE>



directors, and a marketing representative, who builds banking relationships with
new customers at each location with the assistance of the branch manager.

         Technology. Management of the Bank believes that investments in
technology improve the service provided by the Bank to depositors and customers
of the Bank's other services. The Bank has installed automated teller machines
(ATMs) in three (3) locations and is considering installation of additional
ATMs. Also, the Bank has introduced a voice response unit (VRU) which provides
inquiry, balance, and loan transfer capabilities. In addition, the Bank has
invested in computers and network capabilities. However, management of the Bank
believes that affiliation with a larger banking organization is necessary to
keep pace with rapidly changing technologies and services.

         Market Areas Served. The Bank's seven facilities are situated in the
following locations:

         Main office - 301 First Street, PO Box 558, Kersey, CO 80644
         Ft. Lupton - 112 Denver Avenue, PO Box 330, Ft. Lupton, CO 80621
         Platteville - 390 Justin Avenue, PO Box 385, Platteville, CO 80651
         Greeley - 1503 Ninth Avenue, Greeley, CO 80631
         Wiggins - 502 Central, PO Box 220, Wiggins, CO 80654
         Wellington - 4100 Harrison, PO Box 460, Wellington, CO 80549
         Sterling - 122 West Main, PO Box 1672, Sterling, CO 80751

Management of the Bank has developed a plan to strategically locate branches of
the Bank that facilitate an expansion of the Bank's customer base. Also,
Management believes that these locations enable the Bank to better serve its
existing customer base.

         Loans. The Bank follows a uniform credit policy for its loans which
sets forth underwriting and loan administration criteria, including levels of
loan commitments, loan types, credit criteria, concentration limits, loan
administration, loan review and grading and related matters. The Bank monitors
asset quality utilizing an internal and external loan review program. Interest
rates charged on loans vary with the degree of risk, maturity, underwriting and
servicing costs, loan amount and extent of other banking relationships
maintained with customers, and are further subject to competitive pressures,
money market rates, availability of funds and government regulations.
Approximately 37% of the Bank's loan portfolio at December 31, 1997, had
interest rates that float daily with the Bank's base rate or some other
published reference rate.

         In the ordinary course of business, the Bank enters into various types
of transactions that include commitments to extend credit and standby letters of
credit. The Bank uses the same credit policies in underwriting these commitments
as it uses in all its lending activities and includes these commitments in its
lending risk evaluations. The Bank's exposure to credit loss under commitments
to extend credit is represented by the amount of the commitments. Under
applicable federal and state law, permissible loans by the Bank to one borrower
were limited to an aggregate of $1,718,829 at December 31, 1997.



                                       52

<PAGE>



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


(In Thousands)

<TABLE>
<CAPTION>
                                                                                  December 31, 
                                                     March 31,               ---------------------
                                                       1998                  1997             1996
                                                       ----                  ----             ----
<S>                                                  <C>                   <C>                <C>    
Commercial                                           $  33,287             $ 30,446           $25,029
Agriculture                                             32,442               28,966            23,530
Construction                                            10,610                9,844             9,344
Real Estate Mortgage                                    26,633               26,528            18,370
Consumer                                                11,255               11,243            10,051
                                                        ------               ------            ------
Total Loans                                           $114,227             $107,027           $86,324

Less Unearned Income                                        (9)                  (9)              (17)
Less Allowance for Loan Losses                          (1,948)              (1,836)             (896)
                                                       -------             --------           -------

Net Loans                                             $112,270             $105,182           $85,411
                                                      ========             ========           =======
</TABLE>

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

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

         Personal loans and credit lines represent a small percentage of total
loans. These loans are typically to individuals for non-business purposes (such
as household, family and other personal purposes), including new and used car
loans. The Bank has minimal student loans. For the past several years, the
Bank's strategy has been to focus on floating rate loans with maturities up to
five years. Accordingly, approximately 37% of the Bank's existing loans are
floating rate loans. Most floating rate loans have interest rates from 1% to 2%
over prime as reported in the Wall Street Journal. Of the Bank's $56 million of
outstanding credit commitments and $19 million of unfunded commitments at
December 31, 1997, the majority were loans with floating rates.

         The Bank extends credit to customers engaged in agricultural
operations. As of March 31, 1998, approximately 28.4% of the Bank's oustanding
loans were made for agricultural


                                       53

<PAGE>



purposes. The Bank typically makes agricultural loans for cattle purchaes, real
estate acquisitions, and equipment acquisitions.

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

(In Thousands)

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

Less than 1 year                                      $ 63,180

One year to 5 years                                     32,520

Over 5 years                                            11,327
                                                      --------

                           Total                      $107,027
                                                      ========

Loans due after one year

Fixed interest rate                                   $ 42,103

Floating rate                                            1,744

         Approximately $56.4 million at December 31, 1997, and $41.8 million at
December 31, 1996, represent loans collateralized by real estate.

         Non-Performing Assets. The Bank knows of no material loans that are now
current where there are serious doubts as to the ability of the borrower to
comply with present loan repayment terms. At March 31, 1998, the Bank had total
criticized assets (i.e. non-performing, doubtful, substandard, or loss loans) of
$3.1 million, representing 2.9% of total loans and 30.1% of capital.



                                       54

<PAGE>



<TABLE>
<CAPTION>
                                                                                                            December 31,
                                                                                   March 31,            --------------------
                                                                                     1998               1997            1996
                                                                                   --------             ----            ----
                                                                                                      (Dollars in thousands)
<S>                                                                                <C>               <C>             <C> 
Non performing loans:
Loans 90 days or more delinquent and still accruing..........................       $     297        $    734         $     892
Nonaccrual loans.............................................................             447             171               258
Troubled debt restructurings.................................................               5               6                 9
                                                                                    ---------        --------         ---------
Total nonperforming loans....................................................       $     749        $    911         $   1,159

Other real estate owned......................................................       $      28        $     28         $      28
Other assets acquired by foreclosure.........................................              --              --                --
                                                                                    ---------        --------         ---------
Total nonperforming assets...................................................       $     777        $    939         $   1,187
                                                                                    =========        ========         =========

Allowance for loan losses....................................................       $   1,948        $  1,836         $     896
                                                                                    =========        ========         =========
Ratio of total nonperforming assets to total assets..........................             .54%            .69%             1.10%
Ratio of total nonperforming loans to total loans............................             .68%            .88%             1.38%
Ratio of allowance for loan losses to total loans............................            1.71%           1.72%             1.04%
Ratio of allowance for loan losses to total nonperforming loans                           251%            196%               75%

</TABLE>


         Non-performing loans. Non-performing loans consist of loans 90 days or
more delinquent and still accruing interest, non-accrual loans and troubled debt
restructurings. At December 31, 1997 and 1996, the recorded investment in loans
for which impairment has been recognized totaled $171,000 and $258,000,
respectively. The average recorded investment in impaired loans was
approximately $233,000 and $215,000 for 1997 and 1996, respectively.

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


                                       55

<PAGE>



the loan is in the process of collection and management determines that full
collection of principal and accrued interest is probable. Interest accruals are
resumed on non-accrual loans only when, in the judgment of the Bank management,
the loans are estimated to be fully collectible as to both principal and
interest.

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

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

         Other Real Estate Owned. Other real estate owned ("OREO") includes
property acquired in foreclosure proceedings or under agreements with delinquent
borrowers. The Bank has one OREO which is valued on the Bank's financial
statements at $28,000.

         Analysis of Allowance for Loan Losses. The allowance for loan losses is
established through charges to earnings in the form of provisions for loan
losses. Charge off(s) or recoveries are charged or credited directly to the
allowance. In general, the amount charged to earnings each year, if any, by the
Bank is based on the Bank management's judgment, which takes into consideration
a number of factors, including: (a) the Bank's historic loss experience in
relation to outstanding loans and the existing level of the allowance; (b) a
continuing review of problem loans, related uncollected interest and overall
portfolio quality; (c) regular examinations and appraisals of loan portfolios
conducted by the Bank's regulatory authorities; (d) recommendations by the
Bank's external auditors; (e) estimates by lending officers of the true dollar
loss exposure on classified loans; and (f) current economic conditions. At March
31, 1998, the Bank had an allowance for loan losses of $1,948,000.

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



                                       56

<PAGE>


<TABLE>
<CAPTION>

                                                       Three Month                     Years ended
                                                     Ended March 31,                   December 31,
                                                     ---------------               --------------------
                                                          1998                     1997            1996
                                                          ----                     ----            ----
                                                                          (Dollars in thousands)
<S>                                                    <C>                      <C>              <C>
Balance of allowance for loan
         losses at beginning of period                 $ 1,836                  $    896          $    592
Charge Offs:
  Real Estate loans                                         --                        --                --
  Installment loans                                          6                        64                30
  Credit cards and related plans                            42                       287               228
  Commercial and all other loans                            --                        31                10
  Agriculture loans                                         25                        65               121
                                                       -------                  --------         ---------

         Total charge-offs                                  73                       447               389
                                                       -------                  --------         ---------

Recoveries:
  Real Estate loans                                         --                        --                --
  Installment loans                                          3                         6                 3
  Credit cards and related plans                            13                        42                27
  Commercial and all other loans                             1                         7                 8
  Agriculture loans                                         38                        17                --
                                                       -------                  --------         ---------

         Total recoveries                                   55                        72                38
                                                       -------                  --------         ---------

Net (charge-offs) recoveries                               (18)                     (375)             (351)
Provision for loan losses                                  130                     1,315               655
                                                       -------                  --------         ---------

Balance of allowance for loan losses
         at end of period                              $ 1,948                  $  1,836         $     896
                                                       =======                  ========         =========

Ratio of net (charge-offs) recoveries
         to average loans                                 (.02%)                    (.37%)            (.53%)
Average loans outstanding during period               $109,889                  $100,545           $65,888

</TABLE>

Investment Securities

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


                                       57

<PAGE>



consider the investment securities portfolio and its quality, maturity,
marketability and risk diversification. The Asset Liability Committee reports to
the Board of Directors of the Bank on a monthly basis.

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

<TABLE>
<CAPTION>

                                             March 31, 1998                   December 31, 1997               December 31, 1996
                                          ---------------------           ------ -----------------         -----------------------
                                          Amortized      Market           Amortized         Market         Amortized        Market
                                            Cost         Value               Cost            Value           Cost           Value
                                            ----         -----               ----            -----           ----           -----
                                                                               (In thousands)
<S>                                       <C>           <C>                <C>           <C>               <C>           <C>
Securities available for sale:
U.S. Treasury                             $ 4,059       $ 4,090           $ 4,558        $ 4,577           $ 3,837       $ 3,853
U.S. Agency                                 6,396         6,444             6,958          6,973             5,847         5,837
Mortgage-backed                               369           374               434            440                 0             0
States and political
  subdivisions                                315           316                 0              0                 0             0
Federal Home Loan Bank and
Bankers Bank of the West
Stock                                       1,021         1,021             1,005          1,005               871           871
                                          -------       -------           -------        -------           -------       -------
Total securities available for
sale                                      $12,160       $12,245           $12,955        $12,995           $10,555       $10,561
                                          =======       =======           =======        =======           =======       =======

Securities held to maturity:
U.S. Treasury                             $     0       $     0           $     0        $     0           $     0       $     0
U.S. Agency                                     0             0                 0              0                 0             0
Mortgage-backed                                 0             0                 0              0                 0             0
States & political
  subdivisions                                  0             0                 0              0                 0             0
                                          -------       -------           -------        -------           -------       -------
Total securities held to
  maturity                                $     0       $     0           $     0        $     0           $     0       $     0
                                          =======       =======           =======        =======           =======       =======
</TABLE>




                                       58

<PAGE>



         The following table sets forth the carrying values, maturities and
weighted average yields of the Bank's securities portfolio at March 31, 1998:


<TABLE>
<CAPTION>

                                                      Due in one            Due after one year          Due after five years
                                                     year or less           through five years            through ten years  
                                                -------------------         ------------------          ---------------------
                                                 Amount       Yield         Amount        Yield         Amount          Yield
                                                 ------       -----         ------        -----         ------          -----
                                                                          (Dollars in thousands)
<S>                                              <C>          <C>           <C>           <C>           <C>                <C>
Securities available for sale:
U.S. Treasury                                    $2,047       6.05%         $2,012        6.13%         $    0             0%
U.S. Government Agencies                          1,575       6.02%          4,821        6.07%              0             0%
Mortgage backed securities                            0          0%              0           0%              0             0%
State and political subdivisions                      0          0%            315        3.80%              0             0%
                                                 ------                     ------                      ------               
     TOTAL                                       $3,622       6.04%         $7,148        5.99%         $    0             0%
                                                 ======                     ======                      ======               

Securities held to maturity:
U.S. Treasury                                    $    0          0%         $    0           0%         $    0             0%
U.S. Government Agencies                              0          0%              0           0%              0             0%
Mortgage backed securities                            0          0%              0           0%              0             0%
State and political subdivisions                      0          0%              0           0%              0             0%
                                                 ------                     ------                      ------               
     TOTAL                                       $    0          0%         $    0           0%         $    0             0%
                                                 ======                     ======                      ======               

</TABLE>


<TABLE>
<CAPTION>


                                   Due after ten years                 Total        
                                   -------------------         -------------------  
                                   Amount         Yield        Amount        Yield  
                                   ------         -----        ------        -----  
                                               (Dollars in thousands)
<S>                                 <C>            <C>         <C>           <C>
Securities available for sale:      
U.S. Treasury                       $    0            0%       $ 4,059        6.09%  
U.S. Government Agencies                 0            0%         6,396        6.06%  
Mortgage backed securities             369         7.69%           369        7.69%  
State and political subdivisions         0            0%           315        3.80%  
                                    ------                     -------               
     TOTAL                          $  369         7.69%       $11,139        6.06%  
                                    ======                     =======               
                                                                                     
Securities held to maturity:                                                         
U.S. Treasury                       $    0            0%        $    0           0%  
U.S. Government Agencies                 0            0%             0           0%  
Mortgage backed securities               0            0%             0           0%  
State and political subdivisions         0            0%             0           0%  
                                    ------                      ------               
     TOTAL                          $    0            0%        $    0           0%  
                                    ======                      ======               
</TABLE>




                                       59

<PAGE>



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

<TABLE>
<CAPTION>
                                                    Due in one            Due after one year         Due after five years
                                                   year or less           through five years           through ten years  
                                                ------------------        ------------------         -------------------- 
                                                Amount       Yield         Amount       Yield         Amount        Yield 
                                                ------       -----         ------       -----         ------        ----- 
                                                                        (Dollars in thousands)
<S>                                             <C>          <C>           <C>          <C>           <C>              <C>
Securities available for sale:
U.S. Treasury                                   $1,796       6.07%         $2,762       6.11%         $    0           0% 
U.S. Government Agencies                         1,350       5.93%          5,608       6.08%              0           0% 
Mortgage backed securities                           0          0%              0          0%              0           0% 
State and political subdivisions                     0          0%              0          0%              0           0% 
                                                ------                     ------                     ------              
     TOTAL                                      $3,146       6.01%         $8,370       6.09%         $    0           0% 
                                                ======                     ======                     ======              

Securities held to maturity:
U.S. Treasury                                   $    0          0%         $    0          0%         $    0           0% 
U.S. Government Agencies                             0          0%              0          0%              0           0% 
Mortgage backed securities                           0          0%              0          0%              0           0% 
State and political subdivisions                     0          0%              0          0%              0           0% 
                                                ------                     ------                     ------              
     TOTAL                                      $    0          0%         $    0          0%         $    0           0% 
                                                ======                     ======                     ======              
</TABLE>


<TABLE>
<CAPTION>
                                   Due after ten years                Total      
                                   -------------------         ------------------ 
                                   Amount       Yield          Amount       Yield 
                                   ------       -----          ------       ----- 
                                               (Dollars in thousands)
<S>                                <C>           <C>          <C>           <C>
Securities available for sale:                                                    
U.S. Treasury                      $    0          0%         $ 4,558       6.09% 
U.S. Government Agencies                0          0%           6,958       6.05% 
Mortgage backed securities            434       7.69%             434       7.69% 
State and political subdivisions        0          0%               0          0% 
                                   ------                       -----             
     TOTAL                         $  434       7.69%         $11,950       6.12% 
                                   ======                     =======             
                                                                                  
Securities held to maturity:                                                      
U.S. Treasury                      $    0          0%          $    0          0% 
U.S. Government Agencies                0          0%               0          0% 
Mortgage backed securities              0          0%               0          0% 
State and political subdivisions        0          0%               0          0% 
                                   ------                       -----             
     TOTAL                         $    0          0%          $    0          0% 
                                   ======                      ======             
</TABLE>


                                       60

<PAGE>



Deposits

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


<TABLE>
<CAPTION>

                                  March 31, 1998             March 31, 1997          December 31, 1997        December 31, 1996
                               --------------------       -------------------       --------------------    ---------------------
                                           Weighted                  Weighted                   Weighted                 Weighted
                                            Average                   Average                   Average                   Average
                               Average     Interest       Avweage    Interest       Average     Interest    Average      Interest
                               Balance       Rate         Balance      Rate         Balance       Rate      Balance        RATE
                               -------       ----         -------      ----         -------       ----      -------        ----
(Dollars in Thousands)
<S>                           <C>            <C>         <C>           <C>         <C>           <C>        <C>            <C>  
NOW and MMDA                  $ 41,493       4.60%       $ 25,829      4.34%       $ 30,392      4.65%      $19,291        4.24%
Savings                          7,237       2.43%          6,858      2.93%          7,268      2.89%        5,759        3.14%
Time                            64,136       6.34%         56,549      6.24%         63,599      6.37%       43,517        6.48%
                                ------                     ------                    ------                  ------
Total Interest                 112,866       5.45%         89,236      5.43%        101,259      5.61%       68,567        5.57%
  Bearing Deposits
Non-Interest Bearing            14,916                     12,838                    14,164                   9,946
                               -------                   --------                  --------                 -------
Deposits
Total Deposits                $127,782                   $102,074                  $115,423                 $78,513
                              ========                   ========                  ========                 =======
</TABLE>


         The following table sets forth in thousands the amount and maturity of
certificates of deposit with balances of more than $100,000 as of March 31, 1998
and December 31, 1997.

Remaining maturity             March 31, 1998                December 31, 1997
- ------------------             --------------                -----------------

Under 3 months                     $ 2,909                        $ 6,262
3 to 12 months                      11,961                          8,187
Over 12 months                       2,960                          3,520
                                   -------                        -------
         Total                     $17,830                        $17,969
                                   =======                        =======




                                       61

<PAGE>



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

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

Return on assets*                   .77%             1.11%             1.23%
Return on equity**                15.54%            20.23%            20.33%
Equity to assets ratio***          5.97%             4.80%             6.19%
Dividend payout ratio****          5.15%             7.31%             0.00%


*        Net income divided by average total assets.
**       Net income divided by average stockholders' equity.
***      Average total equity divided by average total assets.
****     Dividends paid per share divided by net income per share.

Competition

         The banking industry in areas served by Independent Bank locations is
highly competitive. The Bank faces competition from regional bank holding
companies, such as Community First Bankshares, Inc., Norwest Corporation, Bank
One, Key Bank, and US Bank. Additionally, there is competition from savings and
loan companies, credit unions, investment companies and other types of financial
services companies as well as from many other independent banks located in
communities in which the Bank is located.

         The primary factors affecting competition for deposits are interest
rates, cost of services, the quality and range of financial products offered and
the convenience of locations and office hours. The primary factors in competing
for loans are interest rates, loan origination fees and the quality and range of
lending products offered. Other factors which affect competition include the
general availability and reliability of lendable funds/credit, general and local
economic conditions and the quality of service and loan approval turn-around
provided to the customers. A number of the Bank's competitors are larger and
maintain substantially more capital than the Bank, which they use for lending
and to pay for mass advertising, technology and physical facilities.
Furthermore, because larger financial institutions frequently benefit from
economies of scale, many of the Bank's competitors are able to offer more
attractive interest rates, lower cost services and a wider range of services and
products.

         The Bank believes that it has been able to successfully compete with
larger banks because of its focus on building and maintaining comprehensive
banking relationships in the community banking market segment. However, in light
of competitive trends in the industry and the Bank's geographic location,
management of the Company and the Bank believe that the Bank will face
increasing competitive pressure from larger, regional bank holding companies
that currently have acquired or will acquire banks or branches serving
Independent Bank's market areas.


                                       62

<PAGE>




The Bank's Facilities

         The Bank owns all of its facilities except for the Greeley location
which is leased from a third party. Lease costs are considered competitive with
the local marketplace. The facilities in the other locations are in excellent
condition and some recently have been updated.

Legal Proceedings

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

Employees

         At March 31, 1998, the Company and Bank had 77 full-time equivalent
employees. None of the employees is covered by a collective bargaining
agreement. Management of the Bank and Company believe their relationship with
the employees is good to excellent.

Regulatory Matters

         As a registered bank holding company under the Bank Holding Company
Act, the Company is subject to the regulations and supervision of the Board of
Governors of the Federal Reserve System and the Division of Banking for the
State of Colorado. The Bank Holding Company Act of 1956, as amended, requires
the Company to file reports with the Board of Governors of the Federal Reserve
System and to provide any additional information when requested.

         The Bank is a state banking corporation organized under the laws of the
State of Colorado. The Bank is subject to regulations by the FDIC, which insures
its deposits. The Bank is subject to regulation, supervision, and regular
examination by the Division of Banking for the State of Colorado and the FDIC.

Selected Financial Data

         The following selected financial data should be read in conjunction
with the Company's Consolidated Financial Statements and the related notes and
with the Company's Management's Discussion and Analysis of Financial Condition
and Results of Operations, which are included in this Proxy
Statement/Prospectus.


                                       63

<PAGE>




                         Kersey Bancorp and Subsidiary
                      Selected Consolidated Financial Data

<TABLE>
<CAPTION>
                                                     As of and for the three           As of and for the year ended
                                                      months ended March 31.                    December 31,
                                                     ----------------------          ---------------------------------
                                                                           (Dollars in thousands)
                                                        1998             1997           1997          1996           1995
                                                        ----             ----           ----          ----           ----
<S>                                                    <C>             <C>            <C>           <C>            <C>
Earnings Summary
Net interest income                                    $  1,918        $  1,651       $  6,896      $  4,865       $ 3,320
Provision for loan losses                                   130             295          1,315           655           201
Noninterest income                                          369             298          1,370         1,145           700
Noninterest expense                                       1,441           1,148          5,311         3,765         2,673
Income taxes                                                258             185            599           565           414
Minority interest                                            --              33             81            68            60
                                                       --------        --------       --------      --------       -------
Net income                                             $    458        $    288       $    960      $    957       $   672
                                                       ========        ========       ========      ========       =======
Comprehensive income                                   $    489        $    232       $    982      $    894       $   739
                                                       ========        ========       ========      ========       =======

Common Stock Data
Earnings per common share                              $   7.41        $   6.18       $  19.42      $  20.53       $ 16.45
Book value per share at period end                       137.22          114.86         130.82        110.87         93.27
Weighted average common shares                           61,812          46,613         49,443        46,611        40,855
   outstanding during the period

Average Balance Sheet Data
Securities                                             $ 12,862        $ 10,997       $ 11,775      $ 11,614       $ 7,509
Federal Funds sold                                        7,133           1,431          3,720         2,150         4,170
Loans and leases, net                                   108,520          87,961         99,384        65,142        37,107
Total interest-earning assets                           128,510         100,378        114,937        78,930        48,819
Total Assets                                            139,034         109,865        124,898        85,929        54,527
Interest-bearing deposits                               112,866          89,236        101,259        68,567        42,084
Total deposits                                          127,782         102,074        115,423        78,513        49,965
Federal Funds purchased                                      --              88             25           349            --
Equity                                                    8,319           5,251          6,177         4,731         3,306

End of Period Balance Sheet Data
Securities                                               12,245          12,102         12,995        10,561        12,515
Federal Funds sold                                        9,075           2,300          6,425            --         3,250
Loans and leases, net                                   112,270          92,146        105,182        85,411        47,868
Allowance for loan losses                                 1,948           1,084          1,836           896           592
Total assets                                            144,346         116,174        135,519       107,606        69,703
Total deposits                                          133,153         107,603        124,880        98,243        63,637
Federal funds purchased                                      --              --             --         1,950            --
Other borrowed funds                                      1,876           2,182          1,746         1,292           710
Shareholders' equity                                      8,482           5,354          8,086         5,168         4,313

Non-performing assets
Nonaccrual loans and loans past due 90                 $    744        $    730       $    905      $  1,150       $   447
   days or more
Troubled debt restructurings                                  5               8              6             9            12
Other real estate owned                                      28              28             28            28            31
                                                        -------         -------        -------       -------        ------
Total non-performing assets                            $    777        $    766       $    939      $  1,187       $   490
                                                       ========        ========       ========      ========       =======

Selected Ratios
Net Interest margin                                        5.97%           6.58%          6.00%         6.16%         6.80%
Return on average assets                                   1.32%           1.05%          0.77%         1.11%         1.23%
Return on average equity                                  22.02%          21.94%         15.54%        20.23%        20.33%
Ratio of ending equity to ending assets                    5.88%           4.61%          5.97%         4.80%         6.19%
Ratio non-performing assets to total                       0.54%           0.66%          0.69%         1.10%         0.70%
Ratio of ALLL to loans and leases                          1.71%           1.16%          1.72%         1.04%         1.22%
   outstanding at period end
Ratio of ALLL to non-performing loans                    250.71%         141.51%        195.53%        75.48%       120.82%

</TABLE>


                                       64

<PAGE>



Stock Prices and Dividends on Company Common Stock

         No established trading market for the Company Common Stock exists and
over the years, little trading in the Company Common Stock has occurred.
Reliable information concerning the prices at which the Company Common Stock has
traded in private, negotiated transactions is not publicly available or
generally known to the Company. On occasion, the Company has become aware of the
trading price of its stock in private transactions. Information concerning those
trading prices has been omitted based on the Company's belief that such prices
are not necessarily representative of a fair market price for the Company Common
Stock during any particular period. Since May 8, 1998, the date the Plan of
Reorganization was executed and publicly announced, there have been no trades in
the Company's Common Stock.

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

         1995                                        $0.00
         1996                                        $1.50
         1997                                        $1.00
         1998 (through June 30)                      $1.50

         As of March 31, 1998 there were 118 holders of record of the Company
Common Stock.

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

         Larry G. Neuschwanger, president and chief executive officer of the
Company and the Bank, will serve as an executive officer of Vectra Bank pursuant
to an employment agreement to be executed at closing. See "Plan of
Reorganization--Interests of Certain Persons in the Transaction" for information
concerning the employment agreement and other matters relating to Mr.
Neuschwanger and the transaction.

         Mr. Neuschwanger, president and chief executive officer ("CEO") of the
Bank and Company, age 49, has served as president and CEO of Independent Bank
since September 1979 and as president of the Company since September 1982. Mr.
Neuschwanger earned a master's degree in business and finance in 1972 and has
been in the banking business for 28 years.

         The amount of total compensation paid to Mr. Neuschwanger by the
Company and the Bank for the years ended December 31, 1996 and December 31, 1997
was $99,633 and $105,400, respectively.

Certain Transactions of the Company

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


                                       65

<PAGE>



including interest rates and collateral on loans, as those prevailing at the
same time for comparable transactions with unaffiliated parties. To the extent
that such transactions consisted of extensions of credit, they did not, in the
opinion of management, involve more than a normal risk of repayment or present
other unfavorable features. As of June 30, 1998, the Company's directors and
executive officers and their related parties were indebted to the Bank in the
aggregate amount of $463,703.

Stockholdings of Directors, Officers and Certain Others

         The following table sets forth as of June 30, 1998, the beneficial
ownership of the Company's Common Stock (i) by each person known by the Company
to own beneficially more than 5% of the outstanding shares of such class, (ii)
by each executive officer of the Company, (iii) by each director of the Company,
and (iv) by all directors and executive officers of the Company as a group.
Except as set forth in the notes to the table, each person, to the Company's
knowledge, has sole voting and investment power over the shares stated as
beneficially owned.


<TABLE>
<CAPTION>
Name, title and address of Executive Officers,                  
Directors and 5% Beneficial Owners                               Number of Shares              Percent of Class 
- ----------------------------------------------                   ----------------              ----------------
<S>                                                                  <C>                            <C> 

Carlton C. Barnett                                                   6,219(1)                       10.06%
Director
8200 28 Street
Greeley, CO 80634

Brent C. Beichle                                                       879                           1.42%
Assistant Treasurer and Assistant Secretary of
the Company; Chief Operating Officer of the
Bank
4603 21 Street Circle
Greeley, CO 80634

Reuben Ehrlich                                                       9,325                          15.08%
2733 Eighth Avenue
Greeley, CO 80631

Lavern Glover                                                        9,888(2)                       16.00%
Director
PO Box 44
Kersey, CO 80644

Carl V. Hill                                                         5,983                           9.68%
2815 83 Avenue
Greeley, CO 80634

</TABLE>


                                       66

<PAGE>

<TABLE>

<S>                                                                  <C>                             <C>  
Larry Neuschwanger                                                   4,832                           7.82%
President of the Company and President and
Chief Executive Officer of the Bank, Director
of the Company and the Bank
25820 Sandy Knolls Blvd.
Kersey, CO 80644

Ivan D. Shupe                                                       13,210(3)                       21.37%
Chairman of the Board
2121 Clubhouse Drive
Greeley, CO 80631

Larry N. Wisehart                                                      400                            .65%
Senior Vice President of the Bank
PO Box 1647
Greeley, CO 80632                                                   ______                          ______

All directors and executive officers as a group
(6 persons)
                                                                    35,428                          57.32%
</TABLE>

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

(1)   This number includes 149 shares held by Patricia J. Barnett, Carlton
      Barnett's spouse.

(2)   This number includes 30 shares held by Athlyn Glover, Lavern Glover's
      spouse. This number excludes 112 shares held by Lavern Glover's
      emancipated adult daughter.

(3)   This number excludes 2,084 shares held by Ivan Shupe's emancipated adult
      sons, Grant Shupe and Gregg Shupe.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
                                 KERSEY BANCORP

         The following analysis of the Company's financial condition and the
results of operations for the months ended March 31, 1997 and 1998, and the
years ended December 31, 1997, 1996, and 1995 should be read in conjunction with
the audited Consolidated Financial Statements of the Company and notes thereto,
and information presented elsewhere herein. Average balance sheet data are based
on average daily balances outstanding for the period.

General

         The Company's Consolidated Financial Statements show its financial
condition and information on a consolidated basis. The Bank is the only
operating unit of the Company.


                                       67

<PAGE>



Net Interest Income

         For most financial institutions, the primary components of earnings are
net interest income. Net interest income is the difference between interest
income, principally from loan and investment securities portfolios, and interest
expense, principally on customer deposits and borrowings. Changes in net
interest income results from changes in volume, spread and margin. Volume refers
to the average dollar level of interest-earning assets and interest-bearing
liabilities. Spread refers to the difference between the average yield on
interest-earning assets and the average cost of interest-bearing liabilities.
Margin refers to net interest income divided by average interest-earning assets
and is influenced by the level and relative mix of interest-earning assets and
interest-bearing liabilities. During the fiscal years ended December 31, 1997
and 1996, average interest earning assets were $114.9 million and $78.9 million,
respectively. During these same periods, net interest margin was 6.16% and
6.00%, respectively. At March 31, 1998, average interest-earning assets were
$128.5 million and net interest margin was 5.97%. See "Results of Operations."

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



                                       68

<PAGE>
<TABLE>
<CAPTION>
                                                           March 31, 1998                                December 31, 1997 
                                                           --------------                                ----------------- 
                                                Average                     Average            Average                       Average
                                                Balance       Interest        Rate             Balance         Interest       Rate  
                                                -------       --------       ------            -------         --------      ------ 
                                                                             (Dollars in thousands)
<S>                                               <C>           <C>          <C>                <C>            <C>           <C>
INTEREST-EARNING ASSETS
Securities - Taxable..........................    $ 12,862      $  199        6.19%             $ 11,775       $   718        6.10% 
Federal Funds Sold............................       7,133          93        5.22%                3,720           202        5.43% 
Interest-bearing Deposits.....................          74           1        5.41%                   75             4        5.33% 
Loans.........................................     109,889       3,200       11.65%              100,545        11,807       11.74% 
Less allowance for loan losses................      (1,369)                                       (1,161)                           
Unrealized gain (loss) on securities
  available for sale..........................         (79)                                          (17)                           
                                                  --------      ------                          --------       -------              
Net interest-earning assets...................     128,510       3,493       10.87%              114,937        12,731       11.08% 
Noninterest earning assets....................      10,524                                         9,961                            
                                                  --------      ------                          --------       -------              
Total Assets..................................    $139,034      $3,493       10.05%             $124,898       $12,731       10.19% 
                                                  ========      ------                          ========       -------              
LIABILITIES
Interest-bearing DDA & MMDA...................    $ 41,493      $  477        4.60%             $ 30,392       $ 1,413        4.65% 
Savings.......................................       7,237          44        2.43%                7,268           210        2.89% 
Time Deposits.................................      64,136       1,017        6.34%               63,599         4,053        6.37% 
                                                  --------      ------                          --------       -------              
Total Interest-bearing deposits...............     112,866       1,538        5.45%              101,259         5,676        5.61% 
Federal funds purchased.......................      ------      ------        0.00%                   25             1        4.00% 
Notes Payable and Subordinated Debentures.....       1,811          37        8.17%                1,519           158       10.40% 
                                                  --------      ------                          --------       -------              
Total interest-bearing liabilities............     114,677       1,575        5.49%              102,803         5,835        5.68% 
Non-interest bearing DDA......................      14,916                    0.00%               14,164                      0.00% 
                                                  --------      ------                          --------       -------              
Total Deposits and Interest-
  Bearing Liabilities.........................    $129,593      1,.575        4.86%             $116,967         5,835        4.99% 
                                                  ========      ------                          ========       -------              
Net Interest Income...........................                  $1,918                                         $ 6,896              
                                                                ======                                         =======              
Interest Rate Spread..........................                                5.19%                                           5.20% 
Net Interest Rate Margin......................                                5.97%                                           6.00% 
</TABLE>

<TABLE>
<CAPTION>
                                                               December 31, 1996 
                                                               ----------------- 
                                                 Average                            Average
                                                 Balance         Interest             Rate 
                                                 -------         --------            ----- 
<S>                                              <C>             <C>                <C>
INTEREST-EARNING ASSETS                                                                   
Securities - Taxable..........................   $11,614         $  693              5.97%
Federal Funds Sold............................     2,150            109              5.07%
Interest-bearing Deposits.....................        42              2              4.76%
Loans.........................................    65,888          7,990             12.13%
Less allowance for loan losses................      (746)                                  
Unrealized gain (loss) on securities                                                      
  available for sale..........................       (18)                                  
                                                 -------                                  
Net interest-earning assets...................    78,930          8,794             11.14%
Noninterest earning assets....................     6,999                                  
                                                 -------                                  
Total Assets..................................   $85,929         $8,794             10.23%
                                                 =======         ------                   
 LIABILITIES                                                                               
Interest-bearing DDA & MMDA...................   $19,291            818              4.24%
Savings.......................................     5,759            181              3.14%
Time Deposits.................................    43,517          2,822              6.48%
                                                 -------         ------                   
Total Interest-bearing deposits...............    68,567          3,821              5.57%
Federal funds purchased.......................       349             26              7.45%
Notes Payable and Subordinated Debentures.....   $ 1,228             82              6.68%
                                                 -------         ------                   
Total interest-bearing liabilities............    70,144          3,929              5.60%
Non-interest bearing DDA......................     9,946                             0.00%
                                                 -------       --------                   
Total Deposits and Interest-                                                              
  Bearing Liabilities.........................   $80,090          3,929              4.19%
                                                 =======         ------                   
Net Interest Income...........................                   $4,865                   
                                                                 ======                   
Interest Rate Spread..........................                                       5.33%
Net Interest Rate Margin......................                                       6.16%
</TABLE>

                                       69
<PAGE>



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


<TABLE>
<CAPTION>

                                                         Three Months Ended 
                                                           March 31, 1998                             December 31, 1997 
                                                  Compared to March 31, 1997 period                    compared to 1996 
                                                       Attributable to change                       Attributable to change 
                                                  ---------------------------------                  ----------------------
                                                                                       (In thousands)
                                                    Total         in           in              Total             in           in
                                                   Change       Volume        Rate             Change          Volume        Rate
                                                   ------       ------        ----             ------          ------        ----
<S>                                                <C>            <C>          <C>              <C>            <C>            <C>
Interest-earning assets
Loans                                              $502           $610         $(108)           $3,817         $4,070         $(253)
Investment Securities                                26             29            (3)               25             10            15
Federal funds sold                                   74             74            --                93             85             8
Other interest earning assets                        --             --            --                 2              2            --
                                                   ----           ----         -----            ------         ------         -----
  Total interest income                            $602           $713         $(111)           $3,937         $4,167         $(230)

Interest-bearing liabilities
NOW and MMDA                                       $197           $180           $17            $  595         $  516         $  79
Savings                                              (6)             2            (8)               29             44           (15)
Time Deposits                                       135            121            14             1,231          1,279           (48)
Federal Funds purchased                              (1)            (1)           --               (25)           (13)          (12)
Notes payable and subordinated debentures            10              2             8                76             30            46
                                                   ----           ----         -----            ------         ------         -----
  Total interest expense                           $335           $304           $31            $1,906         $1,856            50
                                                   ----           ----          ----            ------         ------         -----

Increase (decrease) in net interest income         $267           $409         $(142)           $2,031         $2,311         $(280)
                                                   ====           ====         ======           ======         ======         ======
</TABLE>


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


                                       70

<PAGE>




Results of Operations

Years ended December 31, 1997 and 1996

         Overview. Net income increased by $3,000 for 1997 to $960,000 from
$957,000 for 1996. The principal component of the Bank's net income, net
interest income (i.e., the difference between interest income, principally from
loans, and interest expense, principally on customer deposits and borrowings),
increased $2,031,000 to $6,896,000 for 1997 from $4,865,000 for 1996. Provision
for loan losses increased $660,000 for 1997 to $1,315,000 from $655,000 for
1996. Noninterest income increased $225,000 from $1,145,000 for 1996 to
$1,370,000 for 1997. Noninterest expense increased by $1,546,000 for 1997 to
$5,311,000 from $3,765,000 for 1996. Income tax expense increased $34,000 for
1997 to $599,000 from $565,000 for 1996. Return on average assets and return on
average equity were .77% and 15.54%, respectively, for 1997 compared to 1.11%
and 20.23%, respectively, for 1996. The decreases in returns were due to the
minimal increase in 1997 net income, while average assets and equity increased
significantly.

         Interest Income. Interest income increased $3,937,000 to $12,731,000
for 1997 from $8,794,000 for 1996. Interest income on loans increased $3,817,000
and interest income on securities and federal funds sold increased $120,000 for
1997 compared to 1996. The increase in interest income on loans was due to a
prosperous local economy and the Bank's business development efforts. The
increase in interest income from securities was the result of the overall growth
of the Bank and interest income generated from the sale of federal funds. The
rates earned on loans and investments have remained relatively stable.

         Interest Expense. Interest expense increased $1,906,000 to $5,835,000
for 1997 from $3,929,000 for 1996. The increase in interest expense was
primarily due to increased interest-bearing deposits. Interest-bearing deposits
were up $24,781,000 for 1997 to $109,483,000 from $84,702,000 for 1996. Rates
paid on interest-bearing deposits have remained relatively stable.

         Net Interest Income. Net interest income increased $2,031,000 to
$6,896,000 for 1997 from $4,865,000 for 1996. During 1997, average loans
outstanding increased $34,657,000, average securities, including federal funds
sold, increased $1,731,000, while net interest margin (i.e., net interest income
divided by average interest-earning assets) decreased 0.16% (from 6.16% for 1996
to 6.00% for 1997). The increases in net interest income resulted from the
increase in average loans and securities.

         Noninterest Income. Noninterest income increased $225,000 to $1,370,000
for 1997 from $1,145,000 for 1996. The increase was primarily a result of
increased service charges on a higher volume of deposit accounts.

         Noninterest Expense. Noninterest expense increased $1,546,000 to
$5,311,000 for 1997 from $3,765,000 for 1996. The increase was primarily the
result of an increase in salaries and employee benefits of $746,000 during 1997.


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<PAGE>



         Allowance for Loan Losses. The loan loss reserve increased $940,000 to
$1,836,000 in 1997 from $896,000 in 1996. The increase was primarily a result of
a loan loss provision of $1,315,000 to the reserve as a result of Management's
evaluation of the adequacy of the allowance for loan losses in relation to the
quality of the loan portfolio.

         Income Taxes. The Company's income tax expense increased $34,000 to
$599,000 for 1997 from $565,000 for 1996, due primarily to an increase in income
before income taxes.

Years ended December 31, 1996 and 1995

         Overview. Net income increased by $285,000 for 1996 to $957,000 from
$672,000 for 1995. Net interest income increased $1,545,000 to $4,865,000 for
1996 from $3,320,000 for 1995. Noninterest income increased $445,000 from
$700,000 for 1995 to $1,145,000 for 1996. Noninterest expense increased by
$1,092,000 for 1996 to $3,765,000 from $2,673,000 for 1995. Income tax expense
increased $151,000 for 1996 to $565,000 from $414,000 for 1995. Return on
average assets and return on average equity were 1.11% and 20.23%, respectively,
for 1996 compared to 1.23% and 20.33%, respectively, for 1995.

         Interest Income. Interest income increased $2,944,000 to $8,794,000 for
1996 from $5,850,000 for 1995. Interest income on loans increased $2,827,000 and
interest income on securities increased $270,000 for 1996 compared to 1995. The
increase in interest income on loans was due to a prosperous local economy and
the Bank's business development efforts. The increase in interest income from
securities was the result of the overall growth of the Bank.

         Interest Expense. Interest expense increased $1,399,000 to $3,929,000
for 1996 from $2,530,000 for 1995. The increase in interest expense was
primarily due to increased interest-bearing deposits. Average interest-bearing
deposits were up $26,483,000 for 1996 to $68,567,000 from $42,084,000 for 1995.
A significant portion of the increase in interest-bearing deposits was due to
the acqusiition of a branch in Sterling, Colorado during 1996.

         Net Interest Income. Net interest income increased $1,545,000 to
$4,865,000 for 1996 from $3,320,000 for 1995. During 1996, average loans
outstanding increased $29,373,000, average securities increased $4,105,000, and
net interest margin decreased 0.64% (from 6.80% for 1995 to 6.16% for 1996). The
increase in net interest income resulted from the increase in average loans and
securities.

         Noninterest Income. Noninterest income increased $445,000 to $1,145,000
for 1996 from $700,000 for 1995. The increase was primarily a result of
increased service charges on a higher volume of deposit accounts.

         Noninterest Expense. Noninterest expense increased $1,092,000 to
$3,765,000 for 1996 from $2,673,000 for 1995. The increase was primarily the
result of an increase in salaries and employee benefits of $560,000 and
occupancy expense of $204,000 during 1996.



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<PAGE>



         Allowance for Loan Losses. The allowance for loan losses increased
$304,000 to $896,000 in 1996 from $592,000 in 1995. The increase was primarily a
result of a loan loss provision of $655,000 to the reserve as a result of
Management's evaluation of the adequacy of the allowance for loan losses.

         Income Taxes. The Company's income tax expense increased $151,000 for
1996 to $565,000 from $414,000 for 1995. The increase in income tax expense was
due to income before income taxes increasing $444,000 during 1996.

Liquidity and Sources of Funds

         The Bank's primary sources of funds are customer core deposits, sales
and maturities of investment securities, loan repayments, and federal funds
purchased. These funds are used to make loans, acquire investment securities and
other assets, and to fund the operations of the Bank. During 1997, deposits
increased to $124,380,000 at December 31, 1997 from $98,243,000 at December 31,
1996 and $63,637,000 at December 31, 1995. None of the deposits at December 31,
1997, 1996 or 1995 were brokered funds. Management believes the increases in
deposits in 1997, 1996 and 1995 were from (1) referrals from existing customers,
(2) the opening of the additional branches in Sterling and Wellington, Colorado
during 1996, and (3) the overall growth in Northeast Colorado. At December 31,
1997, net loans were $105,182,000 compared to $85,411,000 at December 31, 1996
and $47,868,000 at December 31, 1995.

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

Capital Resources

         The Company's total shareholders' equity increased to $8,086,000 at
December 31, 1997 from $5,168,000 at December 31, 1996. This is an increase of
$2,918,000 and is the result of increased retained earnings and the issuance of
additional shares of common stock. At December 31, 1997 shareholders' equity was
5.97% of total assets compared to 4.80% of total assets at December 31, 1996.
Dividends paid were $46,000 in 1997 and $71,000 in 1996.

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



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

Tier 1 Capital                                   $  8,027,000     $  9,421,000
Tier 2 Capital                                      1,394,000        1,394,000
Risk-Weighted Assets                              111,544,000      111,544,000

Tier 1 Capital to Risk-Weighted Assets                    7.2%             8.4%
Total Capital to Risk-Weighted Assets                     8.4%             9.7%
Leverage Ratio                                            6.4%             7.5%

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

Effects of Inflation and Changing Prices

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

                    COMPARISON OF THE RIGHTS OF SHAREHOLDERS
                            OF ZIONS AND THE COMPANY

General

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

Authorized Capital

         Zions' Articles authorize Zions to issue a total of 203,000,000 shares
of capital stock, divided into two classes: 200,000,000 shares of common stock,
without par value ("Zions Common Stock"), and 3,000,000 shares of preferred
stock, without par value. Each holder of Zions Common Stock is generally
entitled to one vote for each share held of record on all matters submitted to a
shareholder vote, and holders of a majority of the outstanding shares of Zions
Common Stock constitute a quorum for transacting business.



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<PAGE>



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

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

         The Company's Articles of Incorporation authorize the Company to issue
100,000 shares of common stock, with par value of $10.00 per share ("Company
Common Stock"). The Company's Articles do not authorize the Company to issue
preferred stock. Each holder of Company Common Stock is entitled to one vote for
each share held on all matters submitted to the shareholders for a vote. A
majority of votes cast shall decide each matter submitted to the shareholders at
any shareholder meeting except in cases where, by law, a larger vote is
required. A majority of the members of the Board of Directors of the Company
constitutes a quorum for the transaction of business.

Anti-Takeover Matters

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

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

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


                                       75

<PAGE>



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

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

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

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

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

         The Company's Articles do not contain any provision requiring a special
shareholder vote to approve certain types of transactions.



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<PAGE>



Shareholder Rights Plan

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

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

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

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

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

         The Company has no shareholder rights plan.

Board of Directors

         Director Liability and Indemnification. Zions' Articles contain a
"director liability" provision. The provision generally shields a director from
monetary damages to Zions or its shareholders for a breach of fiduciary duty as
a director other than (i) a breach of a director's


                                       77

<PAGE>



duty of loyalty, (ii) acts or omissions not taken in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) authorizing the
unlawful payment of dividends, and (iv) transactions in which a director
receives an improper benefit.

         The Company's Articles provide that the personal liability of a
director for monetary damages for breach of fiduciary duty as a director is
limited to the full extent provided by Colorado law. The Company's Articles
further provide that the Company has the power, as determined by the Board of
Directors, to indemnify and advance expenses to a director, officer, employee or
agent in connection with a proceeding to the extent permitted by Colorado law.
The Company's Bylaws explain that the Company has the power to indemnify every
officer, director and employee against judgments and accompanying litigation
expenses, except in relation to matters where the person is liable for his or
her negligence or misconduct. In the event of an out of court settlement, the
Company can provide indemnification only for such matters covered by the
settlement where the person to be indemnified was not liable for such negligence
or misconduct. These indemnification rights are not exclusive of other rights to
which the Company's officers, directors and employees may be entitled.

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

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

         The Company's Articles and Bylaws do not provide for a classified Board
of Directors. Instead, the Company's Bylaws provide for a Board of Directors
consisting of not less than three nor more than twenty-five individuals, who are
elected at the shareholders annual meeting by a majority vote, for a one year
term. Any vacancy occurring on the Company's Board may be filled by appointment
by the remaining directors, and any director so appointed shall hold office
until the next election. Each director must be a U.S. citizen and at least
two-thirds of the directors must be Colorado residents.

         Cumulative Voting. Neither Zions nor the Company's shareholders have
cumulative voting rights in the election of directors. The absence of cumulative
voting means that a


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<PAGE>



nominee for director must receive the votes of a plurality of the shares voted
in order to be elected.

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

         Neither the Company's Articles nor Bylaws discuss removal of directors.

Special Shareholders' Meetings

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

         The Company's Bylaws permit special meetings of shareholders to be
called at any time at the request of not less than 25% of all outstanding voting
shares of the Company or one-third of the directors.

Amendment of Articles and Bylaws

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

         The Company's Articles do not discuss amendments to the Articles. In
the absence of such a provision, Colorado law requires the affirmative vote of
two-thirds of all outstanding voting stock of the Company in order to amend the
Articles. The Company's Bylaws may be amended by a majority vote of the entire
board of directors at any meeting of the Board, and provisions of the Company's
Bylaws relating to the duties, term of office, remuneration, reimbursement or
indemnification of a director may only be amended by a majority vote of
shareholders at any shareholder meeting.


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<PAGE>



Dissenters' Rights

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

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

Preemptive Rights

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

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



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<PAGE>



Dividend Rights

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

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

Liquidation Rights

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

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

Miscellaneous

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



                                       81

<PAGE>



                                 LEGAL OPINIONS

         An opinion with respect to certain legal matters in connection with the
Reorganization will be rendered by Duane, Morris & Heckscher LLP, Washington,
D.C., as counsel for Zions, and by Slivka Robinson Waters & O'Dorisio, P.C.,
Denver, Colorado, as counsel for the Company.

                                     EXPERTS

         The consolidated financial statements of Zions as of December 31, 1997
and 1996, and for each of the years in the three-year period ended December 31,
1997, have been incorporated by reference in this Registration Statement and
Proxy Statement/Prospectus in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference in this
Registration Statement and Proxy Statement/Prospectus, and upon the authority of
such firm as experts in auditing and accounting.

         The consolidated financial statements of the Company as of December 31,
1997 and 1996, and for each of the years in the three-year period ended December
31, 1997, have been included in this Proxy Statement/Prospectus in reliance upon
the report of Fortner, Bayens, Levkulich & Co., P.C., independent certified
public accountants, appearing elsewhere in this Proxy Statement/Prospectus, and
upon the authority of such firm as experts in auditing and accounting.

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

         The fairness opinion, attached hereto as Appendix B, was prepared by
Howe Barnes Investments, Inc., Chicago, Illinois, an investment banking firm
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, private placements and valuations for corporate and
other purposes.

                                  OTHER MATTERS

         The Company does not expect its principal accountants to attend the
Special Meeting.



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




                                           By Order of the Board of Directors,



                                           ____________________________________
                                           Larry G. Neuschwanger
                                           President
                                           Kersey Bancorp

July _____, 1998









                                       83

<PAGE>


                        CONSOLIDATED FINANCIAL STATEMENTS
                        AND INDEPENDENT AUDITORS' REPORT

                                 KERSEY BANCORP
                                 AND SUBSIDIARY


                           December 31, 1997 and 1996


<PAGE>



            [LETTERHEAD OF FORTNER, BAYENS, LEVKULICH AND CO., P.C.]

                          INDEPENDENT AUDITORS' REPORT

Board of Directors
Kersey Bancorp, Inc.
Kersey, Colorado

         We have audited the accompanying consolidated balance sheets of Kersey
Bancorp, Inc. and Subsidiary as of December 31, 1997 and 1996 and the related
consolidated statements of income, comprehensive income, stockholders' equity
and cash flows for each of the three years in the period ended December 31,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Kersey Bancorp, Inc.
and Subsidiary at December 31, 1997 and 1996 and the results of its operations
and cash flows for each of the three years in the period ended December 31,
1997, in conformity with generally accepted accounting principles.



                              Fortner, Bayens, Levkulich and Co., P.C.



Denver, Colorado
May 7, 1998



<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

                          CONSOLIDATED BALANCE SHEETS

                      March 31, 1998 and 1997 (Unaudited)
                         and December 31, 1997 and 1996
                             (Amounts in thousands)


<TABLE>
<CAPTION>
                                                                          March 31,                           December 31,
                                                                   ----------------------                 --------------------
                                ASSETS                             1998              1997                 1997            1996
                                                                   ----              ----                 ----            ----
                                                                        (Unaudited)

<S>                                                                <C>               <C>                 <C>             <C>   
Cash and due from banks                                            $4,334            $4,481              $4,100          $6,795
Federal funds sold                                                  9,075             2,300               6,425               -
Securities available for sale                                      12,245            12,102              12,995          10,561
Loans, net of unearned income and allowance
 for loan losses                                                  112,270            92,146             105,182          85,411
Premises and equipment                                              3,308             2,875               3,428           2,476
Other real estate owned                                                28                28                  28              28
Accrued income receivable                                           2,123             1,596               2,339           1,729
Intangible assets                                                     304               358                 330             329
Other assets                                                          659               287                 692             277
                                                                 --------          --------            --------        --------

    Total assets                                                 $144,346          $116,173            $135,519        $107,606
                                                                 ========          ========            ========        ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
 Deposits                                                        $133,153          $107,603            $124,880         $98,243
 Federal funds purchased                                                -                 -                   -           1,950
 Notes payable                                                      1,326             1,582               1,146             692
 Subordinated debentures                                              550               600                 600             600
 Accrued interest payable                                             306               323                 366             294
 Other liabilities                                                    529               346                 441             324
                                                                 --------          --------            --------        --------
    Total liabilities                                             135,864           110,454             127,433         102,103

Commitments (notes J, K and M)
 
Minority interest                                                       -               365                   -             335
 
Stockholders' equity
 Common stock - 100,000 shares of $10 par value
  authorized,61,812, 46,613,  61,812 and 46,613
  shares issued and outstanding                                       618               466                 618             466
 Paid in capital                                                    2,519               689               2,519             689
 Retained earnings                                                  5,288             4,251               4,923           4,009
 Accumulated other comprehensive income (loss)                         57               -52                  26               4
                                                                 --------          --------            --------        --------
    Total stockholders' equity                                      8,482             5,354               8,086           5,168
                                                                 --------          --------            --------        --------

    Total liabilities and stockholders' equity                   $144,346          $116,173            $135,519        $107,606
                                                                 ========          ========            ========        ========
</TABLE>


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

                                       3
<PAGE>


                      Kersey Bancorp, Inc. and Subsidiary

                       CONSOLIDATED STATEMENTS OF INCOME

           Three months ended March 31, 1998 and 1997 (Unaudited) and
                  years ended December 31, 1997, 1996 and 1995
                  (Amounts in thousands, except per share data)


<TABLE>
<CAPTION>
                                                              Three months ended                      Years ended
                                                                    March 31,                         December 31,
                                                              -------------------          ---------------------------------
                                                              1998           1997          1997           1996          1995
                                                              ----           ----          ----           ----          ----
                                                                 (Unaudited)
<S>                                                         <C>            <C>           <C>            <C>           <C>   
Interest income
 Interest and fees on loans                                 $ 3,200        $ 2,698       $11,807        $ 7,990       $ 5,163
 Interest on taxable investment  securities                     199            173           718            693           423
 Interest on federal funds sold                                  94             20           206            111           264
                                                            -------        -------       -------        -------       -------
    Total interest income                                     3,493          2,891        12,731          8,794         5,850

Interest expense
 Interest on deposits                                         1,538          1,213         5,677          3,847         2,475
 Interest on borrowed funds                                      37             27           158             82            55
                                                            -------        -------       -------        -------       -------
                                                              1,575          1,240         5,835          3,929         2,530

Net interest income                                           1,918          1,651         6,896          4,865         3,320

Provision for loan losses                                       130            295         1,315            655           201
                                                            -------        -------       -------        -------       -------
Net interest income after provision for loan losses           1,788          1,356         5,581          4,210         3,119

Other income
 Service charges on deposit accounts                            214            207           863            720           484
 Other income                                                   155             91           507            425           216
                                                            -------        -------       -------        -------       -------
                                                                369            298         1,370          1,145           700

Other expenses
 Salaries and employee benefits                                 659            569         2,621          1,875         1,315
 Occupancy expense of premises and
  furniture and equipment expense                               249            170           802            514           310
 Other expenses                                                 533            409         1,888          1,376         1,048
                                                            -------        -------       -------        -------       -------
                                                              1,441          1,148         5,311          3,765         2,673
                                                            -------        -------       -------        -------       -------
Income before income taxes                                      716            506         1,640          1,590         1,146

Income tax expense                                              258            185           599            565           414
Minority interest                                                 -             33            81             68            60
                                                            -------        -------       -------        -------       -------
NET INCOME                                                     $458           $288          $960           $957          $672
                                                            =======        =======       =======        =======       =======
Net income per share of common stock                        $  7.41        $  6.18       $ 19.42        $ 20.53       $ 16.45
                                                            =======        =======       =======        =======       =======
Average shares outstanding                                   61,812         46,613        49,443         46,611        40,855
                                                            =======        =======       =======        =======       =======
</TABLE>

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

                                       4


<PAGE>


                       Kersey Bancorp, Inc. and Subsidiary

                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

           Three months ended March 31, 1998 and 1997 (Unaudited) and
                years ended December 31, 1997, 1996 and 1995 ERR


<TABLE>
<CAPTION>
                                                       Three months ended                            Years ended
                                                             March 31,                               December 31,
                                                        --------------------              ---------------------------------
                                                        1998            1997              1997           1996          1995
                                                        ----            ----              ----           ----          ----
                                                          (Unaudited)

<S>                                                    <C>             <C>               <C>            <C>           <C> 
Net income                                             $458            $288              $960           $957          $672

Other comprehensive income,
 net of tax
 Unrealized holding gains (losses)
  arising during the period                             $47            ($85)              $33           ($95)         $102
 Income tax (expense) benefit
  related to items of other
  comprehensive income                                 ($16)            $29              ($11)           $32          ($35)
                                                      -----           -----             -----          -----        ------
                                                        $31            ($56)              $22           ($63)          $67
                                                      -----           -----             -----          -----        ------

Comprehensive income                                   $489            $232              $982           $894          $739
                                                      =====           =====             =====          =====        ======
</TABLE>


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


                                      5


<PAGE>


                      Kersey Bancorp, Inc. and Subsidiary

                                  CONSOLIDATED
                       STATEMENT OF STOCKHOLDERS' EQUITY

               Three months ended March 31, 1998 (Unaudited) and
                  years ended December 31, 1997, 1996 and 1995
                (Amounts in thousands, except number of shares)


<TABLE>
<CAPTION>
                                                        Shares of                                          Accumulated
                                                         common                                               other
                                                          stock      Common     Paid-in      Retained     comprehensive
                                                         issued       stock     capital      earnings         income         Total
                                                         ------       -----     -------      --------         ------         -----

<S>                                                      <C>           <C>         <C>         <C>               <C>        <C>   
Balance at January 1, 1995                               38,860        $389        $167        $2,451            $-         $3,007
Issue common stock                                        7,641          76         515             -             -            591
Net income for 1995                                           -           -           -           672             -            672
Other comprehensive income - unrealized
 holding gains arising during 1995                            -           -           -             -            67             67
                                                        -------       -----      ------         -----           ----        -------
Balance at December 31, 1995                             46,501         465         682         3,123            67          4,337
Issue common stock                                          112           1           7             -             -              8
Net income for 1996                                           -           -           -           957             -            957
Cash dividends paid - $1.50 per
 common share                                                 -           -           -           (71)            -            (71)
Other comprehensive income - unrealized
 holding losses arising during 1996                           -           -           -             -           (63)           (63)
                                                        -------       -----      ------         -----           ----        -------
Balance at December 31, 1996                             46,613         466         689         4,009             4          5,168
Issue common stock                                       11,783         118       1,414             -             -          1,532
Exchange of 3,416 shares for
 subsidiary shares                                        3,416          34         416             -             -            450
Net income for 1997                                           -           -           -          $960             -            960
Cash dividends paid - $1.00 per
 common share                                                 -           -           -           (46)            -            (46)
Other comprehensive income - unrealized
 holding gains arising during 1997                            -           -           -             -            22             22
                                                        -------       -----      ------         -----           ----        -------
Balance at December 31, 1997                             61,812        $618       2,519         4,923           $26          8,086
Net income for period (unaudited)                             -           -           -           458             -            458
Cash dividends paid - $1.50 per
 common share (unaudited)                                     -           -           -           (93)            -           ($93)
Other comprehensive income - unrealized
 holding gains arising during the period (unaudited)          -           -           -             -            31             31
                                                        -------       -----      ------         -----           ----        -------
Balance at March 31, 1998 (unaudited)                    61,812        $618      $2,519        $5,288           $57         $8,482
                                                         ======        ====      ======        ======           ===         ======
</TABLE>

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

                                       6


<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

                                  CONSOLIDATED
                            STATEMENTS OF CASH FLOWS

           Three months ended March 31, 1998 and 1997 (Unaudited) and
                  years ended December 31, 1997, 1996 and 1995
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                    Three months ended                  Years ended
                                                                         March 31,                      December 31,
                                                                     -----------------         -----------------------------
                                                                     1998         1997         1997         1996        1995
                                                                     ----         ----         ----         ----        ----
<S>                                                                 <C>          <C>          <C>          <C>         <C> 
Cash flows from operating activities
  Net income                                                          $458         $288         $960         $957        $672
  Adjustments to reconcile net income to net cash
   provided by operating activities
    Provision for loan losses                                          130          295        1,315          655         201
    Depreciation and amortization                                      144          106          504          274         162
    Deferred income tax benefit                                          -            -          (55)         (31)        (21)
    Minority interest in results of operations of
     consolidated subsidiary                                             -           33           81           68          60
    Premium amortization - net                                          20           12           81           58          (9)
    Federal Home Loan Bank stock dividend                              (16)         (23)         (59)           -           -
    Changes in accruals and deferrals
     Income receivable                                                 216          133         (610)        (775)       (296)
     Other assets                                                       41           22         (371)         345        (311)
     Interest payable                                                  (60)          29           72          108         (31)
     Other liabilities                                                  88           19          151         (266)        412
                                                                    ------      -------      -------       ------     -------
      Net cash provided by operating activities                      1,021          914        2,069        1,393         839

Cash flows from investing activities
  Change in federal funds sold and overnight deposits at
   Federal Home Loan Bank                                           (2,650)      (2,300)      (6,425)       3,250        (125)
  Purchase of securities available for sale                           (314)      (2,016)      (5,623)      (1,398)    (11,442)
  Proceeds from maturities of securities available for sale          1,109          400        3,230        3,234       3,924
  Acquisition cost and other intangible assets                           -          (31)         (31)        (275)          -
  Change in loans made to customers                                 (7,218)      (7,030)     (21,086)     (38,198)    (14,240)
  Expenditures for premises and equipment                              (24)        (505)      (1,456)      (1,315)       (795)
                                                                    ------      -------      -------       ------     -------
      Net cash applied to investing activities                      (9,097)     (11,482)     (31,391)     (34,702)    (22,678)

  Cash flows from financing activities
  Change in deposits                                                 8,273        9,360       26,637       34,606      21,518
  Change in federal funds purchased                                      -       (1,950)      (1,950)       1,950           -
  Proceeds from advances on notes payable                              180          890        1,064          637         120
  Repayments on notes payable                                            -            -         (610)        (655)        (30)
  Proceeds from issuance of subordinated debentures                      -            -            -          600           -
  Repayments on subordinated debentures                                (50)           -            -            -           -
  Sale of common stock                                                   -            -        1,532            8         591 
  Dividends paid                                                       (93)         (46)         (46)         (71)          -
                                                                    ------      -------      -------       ------     -------
      Net cash provided by financing activities                      8,310        8,254       26,627       37,075      22,199
                                                                    ------      -------      -------       ------     -------
Net increase (decrease) in cash and due from banks                     234       (2,314)      (2,695)       3,766         360

Cash and due from banks at beginning of period                       4,100        6,795        6,795        3,029       2,669
                                                                    ------      -------      -------       ------     -------
Cash and due from banks at end of period                            $4,334       $4,481       $4,100       $6,795      $3,029
                                                                    ======      =======      =======       ======     =======
Supplemental Disclosures of Cash Flow Information
  Cash paid during the year for:
    Interest                                                        $1,597       $1,184       $5,606       $3,735      $2,316
    Income taxes                                                        22           24          941          732         223
</TABLE>

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

                                        7

<PAGE>


                       Kersey Bancorp, Inc. and Subsidiary

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE A - SUMMARY OF ACCOUNTING POLICIES

    Nature of Operations

       Kersey Bancorp, Inc. (the Company) and its subsidiary provide a full
       range of banking services to individual and corporate customers
       principally in the northeast Colorado area. A significant amount of the
       Company's loans are related to real estate activities. Borrowers'
       abilities to honor their loans are dependent upon the continued economic
       viability of the area. The Company is subject to competition from other
       financial institutions for loans and deposit accounts. The Company is
       also subject to regulation by certain governmental agencies and undergoes
       periodic examinations by those regulatory agencies.

    Basis of Financial Statement Presentation

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

       Material estimates that are particularly susceptible to significant
       change in the near-term relate to the determination of the allowance for
       loan losses. In connection with the determination of the allowance for
       loan losses, management obtains independent appraisals for significant
       properties and assesses estimated future cash flows from borrowers'
       operations and the liquidation of loan collateral.

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



                                       8
<PAGE>



                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

    Basis of Consolidation

       The accompanying consolidated financial statements include Kersey
       Bancorp, Inc. and its subsidiary, Independent Bank. All significant
       intercompany transactions have been eliminated.

    Investment Securities

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

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

    Loans

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

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



                                       9
<PAGE>


                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

    Allowance for Loan Losses

       The allowance for loan losses is increased by charges to income and
       decreased by charge-offs (net of recoveries). Management's periodic
       evaluation of the adequacy of the allowance is based on the Bank's past
       loan loss experience, known and inherent risks in the portfolio, adverse
       situations that may affect the borrower's ability to repay, the estimated
       value of any underlying collateral, and current economic conditions.

       Impaired loans are measured based on the present value of expected future
       cash flows discounted at the loan's original effective interest rate. As
       a practical expedient, impairment may be measured based on the loan's
       observable market price or the fair value of the collateral if the loan
       is collateral dependent. When the measure of the impaired loan is less
       than the recorded investment in the loan, the impairment is recorded
       through a valuation allowance.

    Premises and Equipment

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

    Other Real Estate

       Real estate properties acquired through or in lieu of, loan foreclosure
       are to be sold and are initially recorded at fair value at the date of
       foreclosure establishing a new cost basis. After foreclosure, management
       periodically performs valuations and the real estate is carried at the
       lower of carrying amount or fair value less cost to sell.

    Intangible Assets

       Intangible assets include costs in excess of net assets acquired,
       covenants not to compete and deposit base premiums. These intangible
       assets are being amortized over the expected period of benefit from three
       to fifteen years.


                                       10
<PAGE>


                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

     Cash Flows

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

    Earnings per Share

       The Company adopted Financial Accounting Standards Board Statement No.
       128, Earnings per Share, (SFAS No. 128) effective December 31, 1997. This
       statement requires the presentation of "basic" earnings per share, which
       excludes the effect of dilution and "diluted" earnings per share, which
       includes the effect of dilution. The Company's "basic" and "diluted"
       earnings per share computations are identical in the periods presented,
       as there is no dilution effect. Earnings per share is based on the
       weighted average number of shares outstanding during the period.

    Income Taxes

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

    Comprehensive Income

       The Company adopted Financial Accounting Standards Board Statement No.
       130, Reporting Comprehensive Income, (SFAS No. 130), effective January 1,
       1998. SFAS No. 130 establishes standards for reporting comprehensive
       income and its components (revenues, expenses, gains and losses).
       Components of comprehensive income are net income and all other non-owner
       changes in equity. The statement requires that an enterprise (a) classify
       items of other comprehensive income by their nature in a financial
       statement and (b) display the accumulated balance of other comprehensive
       income separately from retained earnings and additional paid-in capital
       in the equity section of a statement of financial position.
       Reclassification of financial statements for earlier periods provided for
       comparative purposes are required. The Company has chosen to disclose
       comprehensive income in a separate income statement.


                                       11
<PAGE>


                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

    Operating Segments

       The Company adopted Financial Accounting Standards Board Statement No.
       131, Disclosures about Segments of an Enterprise and Related Information,
       (SFAS No. 131) effective January 1, 1998. This statement establishes
       standards for reporting information about segments in annual and interim
       financial statements. SFAS No. 131 introduces a new model for segment
       reporting called the "management approach". The management approach is
       based on the way the chief operating decision-maker organizes segments
       within the company for making operating decisions and assessing
       performance. Reportable segments are based on products and services,
       geography, legal structure, management structure and any other in which
       management disaggregates a company. Based on the "management approach"
       model, the Company has determined that its business is comprised of a
       single operating segment and that SFAS No. 131 therefore has no impact on
       its financial statements.

NOTE B - INVESTMENT SECURITIES

       The Company had securities with the following amortized costs and
       estimated fair market values (in thousands):

<TABLE>
<CAPTION>
                                                                         March 31, 1998 (Unaudited)
                                                          ------------------------------------------------------
                                                          Amortized      Unrealized     Unrealized      Market
                                                            Cost            Gains          Losses         Value
                                                            ----            -----          ------         -----

<S>                                                       <C>               <C>         <C>              <C>    
   Securities available for sale
     U.S. Treasury                                        $ 4,059           $ 31        $    -           $ 4,090
     U.S. government agency                                 6,396             48             -             6,444
     Obligations of states and political
       subdivision                                            315              1             -               316
     Mortgage-backed securities                               369              5             -               374
     Equity securities                                      1,021             -              -             1,021
                                                          -------           ----         ------          -------

                                                          $12,160           $ 85         $   -           $12,245
                                                          =======           ====         ======          =======
</TABLE>


                                       12
<PAGE>


                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE B - INVESTMENT SECURITIES (CONTINUED)

<TABLE>
<CAPTION>
                                                                            December 31, 1997
                                                          -----------------------------------------------------
                                                          Amortized      Unrealized     Unrealized       Market
                                                            Cost            Gains          Losses         Value
                                                            ----            -----          ------         -----
<S>                                                       <C>               <C>         <C>              <C>   
   Securities available for sale
      U.S. Treasury                                       $ 4,558           $ 19         $   -           $ 4,577
      U.S. government agency                                6,958             15             -             6,973
      Mortgage-backed securities                              434              6             -               440
      Equity securities                                     1,005             -              -             1,005
                                                          -------           ----         ------          -------

                                                          $12,955           $ 40         $   -           $12,995
                                                          =======           ====         ======          =======
</TABLE>

<TABLE>
<CAPTION>
                                                                            December 31, 1996
                                                          -----------------------------------------------------
                                                          Amortized       Unrealized     Unrealized      Market
                                                            Cost            Gains          Losses         Value
                                                            ----            -----          ------         -----
<S>                                                       <C>               <C>            <C>           <C>    
     Securities available for sale
       U.S. Treasury                                      $ 3,837           $ 16           $ -           $ 3,853
       U.S. government agencies                             5,847             -              10            5,837
        Equity securities                                     871             -              -               871
                                                          -------           ----           ----          -------

                                                          $10,555           $ 16           $ 10          $10,561
                                                          =======           ====           ====          =======
</TABLE>



                                       13
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE B - INVESTMENT SECURITIES (CONTINUED)

   The amortized cost and estimated market value of investment securities at
   December 31, 1997 by contractual maturity are shown below (in thousands).
   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.

                                                         Available for Sale
                                                       ----------------------
                                                       Amortized       Market
                                                         Cost           Value
                                                         ----           -----

    Due in one year or less                             $ 3,146       $ 3,149
    Due after one year through five years                 8,370         8,401
    Due after five years through ten years                    -             -
    Due after ten years                                       -             -
                                                        -------       -------
                                                         11,516        11,550
    Mortgage-backed securities                              434           440
                                                        -------       -------

                                                        $11,950       $11,990
                                                        =======       =======

    The Company realized no gains or losses on the sales and early redemptions
    of investment securities for the years ending December 31, 1997, 1996 and
    1995.

    Investment securities with carrying value of $2,317,000 and $5,592,000 were
    pledged at December 31, 1997 and 1996, respectively, as collateral for
    public deposits and for other purposes as required or permitted by law.



                                       14
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE C - LOANS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES


    The components of the loan portfolio are summarized as follows (in
    thousands):

<TABLE>
<CAPTION>
                                                         Three months          Years ended
                                                             ended             December 31,
                                                            March 31,      -------------------
                                                              1998            1997       1996
                                                        ---------------    ----------  -------
                                                          (Unaudited)

<S>                                                         <C>             <C>         <C>      
        Commercial                                          $ 33,287        $ 30,446    $ 25,029
        Agriculture                                           32,442          28,966      23,530
        Construction                                          10,610           9,844       9,344
        Real estate mortgage                                  26,633          26,528      18,370
        Consumer                                               7,549           7,326       5,903
        Credit card                                            3,495           3,439       3,801
        Overdrafts and other loans                               211             478         347
                                                            --------        --------    --------
                                                             114,227         107,027      86,324

        Less unearned income                                      (9)             (9)        (17)
        Less allowance for loan losses                        (1,948)         (1,836)       (896)
                                                            --------        --------    --------

        Loans, net of unearned income                       $112,270        $105,182    $ 85,411
                                                            ========        ========    ========

</TABLE>


                                       15
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


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

    Transactions in the allowance for possible loan losses are as follows (in
    thousands):

<TABLE>
<CAPTION>
                                                               Three months
                                                                  ended                     Years ended
                                                                 March 31,                  December 31,
                                                                 ---------                  ------------
                                                              1998       1997         1997       1996       1995
                                                              ----       ----         ----       ----       ----
                                                                 (Unaudited)

<S>                                                          <C>       <C>           <C>        <C>        <C>    
        Balance at beginning of period                       $1,836    $   896       $   896    $   592    $   607
        Provision for loan losses                               130        295         1,315        655        201
                                                             ------     ------         -----     ------     ------
               Total                                          1,966      1,191         2,211      1,247        808

        Loans charged off                                       (73)      (120)         (447)      (389)      (269)
        Recoveries                                               55         13            72         38         53
                                                             ------    -------        ------     ------    -------
               Net recoveries (charge-offs)                     (18)      (107)         (375)      (351)      (216)
                                                             ------     ------        ------      -----     ------

        Balance at end of period                             $1,948     $1,084        $1,836     $  896    $   592
                                                             ======     ======        ======     ======    =======
</TABLE>

    The principal balance of loans having payments delinquent more than sixty
    days at December 31, 1997 and 1996 amounted to $931,000 and $979,000,
    respectively. At December 31, 1997 and 1996, the loans outstanding where the
    accrual of interest had been discontinued was $171,000 and $258,000,
    respectively.

    At December 31, 1997, 1996, and 1995, the recorded investment in loans for
    which impairment has been recognized totaled $171,000, $258,000, and
    $208,000, respectively. The average recorded investment in impaired loans in
    1997, 1996, and 1995 was $215,000, $233,000, and $258,000, respectively. No
    interest income was recognized on impaired loans in 1997, 1996, and 1995.


                                       16
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE D - PREMISES AND EQUIPMENT

    Premises and equipment, less accumulated amortization and depreciation,
    consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                                           March 31,
                                                                      1998 (Unaudited)
                                                           -------------------------------------------
                                                                          Accumulated
                                                                        amortization and         Net
                                                           Cost          depreciation           amount
                                                           ----          ------------           ------

<S>                                                        <C>               <C>                <C>   
        Land                                               $  370            $   -              $  370
        Bank buildings                                      2,277               305              1,972
        Furniture, fixtures and equipment                   2,268             1,302                966
                                                            -----            ------             ------

                                                           $4,915            $1,607             $3,308
                                                           ======            ======             ======

</TABLE>
<TABLE>
<CAPTION>
                                                                         December 31,
                                                                             1997
                                                           -------------------------------------------
                                                                          Accumulated
                                                                        amortization and         Net
                                                           Cost          depreciation           amount
                                                           ----          ------------           ------

<S>                                                        <C>               <C>                <C>   
        Land                                               $  370            $   -              $  370
        Bank buildings                                      2,303               289              2,014
        Furniture, fixtures and equipment                   2,504             1,460              1,044
                                                           ------            ------             ------

                                                           $5,177            $1,749             $3,428
                                                           ======            ======             ======
</TABLE>


                                       17
<PAGE>


                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE D - PREMSIES AND EQUIPMENT (CONTINUED)

<TABLE>
<CAPTION>
                                                                            December 31,
                                                                               1996
                                                             -------------------------------------------
                                                                            Accumulated
                                                                          amortization and          Net
                                                             Cost          depreciation           amount
                                                             ----          ------------           ------

<S>                                                          <C>              <C>                 <C>   
        Land                                                 $  345           $    -              $  345
        Bank buildings                                        1,396               235              1,161
        Furniture, fixtures and equipment                     1,981             1,011                970
                                                              -----             -----             ------

                                                             $3,722            $1,246             $2,476
                                                             ======            ======             ======
</TABLE>

NOTE E - DEPOSITS

    Deposits are comprised of the following (in thousands):

<TABLE>
<CAPTION>
                                                            Three months          Years ended
                                                               ended              December 31,
                                                              March 31,         ----------------
                                                                1998            1997        1996
                                                                ----            ----        ----
                                                             (Unaudited)

<S>                                                           <C>             <C>          <C>      
        Non-interest bearing                                  $  15,301       $  15,397    $ 13,541
        NOW accounts                                              4,609           5,328       4,028
        Savings                                                   7,370           7,285       8,278
        Money market accounts                                    38,395          29,772      19,382
        Other time deposits under $100,000                       49,648          49,129      38,066
        Other time deposits - $100,000 and over                  17,830          17,969      14,948
                                                               --------        --------    --------

                                                               $133,153        $124,880    $ 98,243
                                                               ========        ========    ========
</TABLE>



                                       18
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE E - DEPOSITS (CONTINUED)

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

                  1998                                           $49,182
                  1999                                            12,830
                  2000                                             2,740
                  2001                                               918
                  2002 and thereafter                              1,428
                                                                 -------

                                                                 $67,098
                                                                 =======

NOTE F - NOTES PAYABLE TO BANK

    Notes payable to bank consisted of the following:

<TABLE>
<CAPTION>
                                                                                      March 31,     December 31,
                                                                                        1998        1997    1996
                                                                                        ----        ----    ----
                                                                                     (Unaudited)
                                                                                         (amounts in thousands)
 
<S>                                                                                   <C>         <C>      <C>  
       Note payable to Bankers' Bank of the West with interest at The Wall
       Street Journal prime rate (8.5% at December 31, 1997); interest is due
       quarterly; principal of $110,000 is due annually and the note matures on
       August 31, 2005; the note is collateralized by 92,303 (84% of the
       outstanding) common shares of Independent Bank and 23,396 (38% of the
       outstanding) common shares of the Company                                      $   526     $   346  $ 692
</TABLE>


                                       19
<PAGE>


                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE F - NOTES PAYABLE TO BANK (CONTINUED)

<TABLE>
<CAPTION>
                                                                                      March 31,     December 31,
                                                                                        1998        1997    1996
                                                                                        ----        ----    ----
                                                                                     (Unaudited)
                                                                                         (amounts in thousands)

<S>                                                                                    <C>         <C>     <C>  
       Note payable to Bankers' Bank of the West with interest at The Wall
       Street Journal prime rate (8.5% at December 31, 1997); interest is due
       quarterly; principal of $80,000 is due April 30, 1998 and the note
       matures on August 30, 1998; the note is collateralized by 92,303 (84% of
       the outstanding) common shares of Independent Bank and 23,396 (38% of the
       outstanding) common shares of the Company; the note is
       personally guaranteed by certain shareholders of the Company                    $  800      $  800  $   -
                                                                                       ------      ------  -----

                                                                                       $1,326      $1,146  $ 692
                                                                                       ======      ======  =====
</TABLE>

    Principal payments of the notes payable to the bank at December 31, 1997 are
    due as follows (amounts in thousands):

                   1998                                            $  910
                   1999                                               110
                   2000                                               110
                   2001                                                16
                                                                   ------

                                                                   $1,146
                                                                   ======


                                       20
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE G - SUBORDINATED DEBENTURES

    Subordinated debentures payable consist of the following (amounts in
    thousands):

<TABLE>
<CAPTION>
                                                                                    March 31,     December 31,
                                                                                      1998       1997     1996
                                                                                      ----       ----     ----
                                                                                   (Unaudited)

<S>                                                                                 <C>          <C>      <C> 
        Subordinated debentures payable with interest accruing at The Wall
        Street Journal prime rate (8.5% at December 31, 1997) to prime less 1%,
        depending on the maturity of the debenture;
        interest is payable semi-annually each January 1 and July 1                 $550         $600     $600
                                                                                    ====         ====     ====
</TABLE>

    Principal payments of the subordinated debentures at December 31, 1997 are
    as follows:

                  1998                                           $100
                  1999                                             50
                  2000                                             50
                  2001                                             50
                  2002                                             50
                  Thereafter                                      300
                                                                  ---

                                                                 $600
                                                                 ====


                                       21
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE H - INCOME TAXES

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

<TABLE>
<CAPTION>
                                                                                      1997       1996      1995
                                                                                      ----       ----      ----
                                                                                             (in thousands)

<S>                                                                                   <C>        <C>       <C> 
        Current tax provision
          Federal                                                                     $923       $566      $411
          Colorado                                                                      51         49        38
                                                                                      ----       ----      ----
                                                                                       974        615       449

        Deferred federal tax benefit                                                  (375)       (50)      (35)
                                                                                      ----       ----      ----

                                                                                      $599       $565      $414
                                                                                      ====       ====      ====
</TABLE>

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

    Listed below are the components of the net deferred tax asset.

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

<S>                                                                                       <C>              <C> 
        Deferred tax assets
          Allowance for loan losses                                                       $539             $191
          Intangible assets                                                                 35                3
          Other real estate owned                                                            1                1
          Depreciation                                                                      16                -
                                                                                          ----             ----
                  Total deferred tax assets                                                591              195

        Deferred tax liabilities
          Unrealized gain on securities available for sale                                  13                4
          Depreciation                                                                      -                 1
          Federal Home Loan Bank stock dividend                                             22                -
                                                                                          ----             ----
                  Total deferred tax liabilities                                            35                5
                                                                                          ----             ----

        Net deferred tax asset                                                            $556             $190
                                                                                          ====             ====
</TABLE>



                                       22
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE H - INCOME TAXES (CONTINUED)

    The effective income tax rate varies from the statutory federal rate because
    of several factors, the most significant being Colorado income taxes. The
    following table reconciles the Company's effective tax rate to the statutory
    federal rate (amounts in thousands).

<TABLE>
<CAPTION>
                                                        1997                   1996                1995
                                                    ------------           ------------        ------------
                                                    Amount     %           Amount     %        Amount     %
                                                    ------     -           ------     -        ------     -

<S>                                                <C>        <C>         <C>       <C>        <C>      <C>
  Tax expense at statutory rate                    $558       34%         $529      34%        $390     34%
  Increase (decrease) in taxes due to:
    Colorado income taxes                            51        3            49       2           38      3
    Other                                           (10)      (1)          (13)     (1)         (14)    (1)
                                                   ----       --          ----      --         ----     --

   Total provision for income taxes                $599       36%         $565      35%        $414     36%
                                                   ====       ==          ====      ==         ====     ==
</TABLE>

NOTE I - FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK

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

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



                                       23
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


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

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

<TABLE>
<CAPTION>
                                                                                                 December 31,
                                                                               March 31,      ----------------
                                                                                 1998         1997        1996
                                                                                 ----         ----        ----
                                                                              (Unaudited)

<S>                                                                            <C>           <C>         <C>    
    Financial instruments whose contract amounts
        represent credit risk (amounts in thousands)
          Commitments to extend credit                                         $16,223       $14,149     $14,157
          Stand-by letters of credit                                               191           191         260
</TABLE>

    Commitments to extend credit are agreements to lend to a customer as long as
    there is no violation of any condition established in the contract.
    Commitments generally have fixed expiration dates or other termination
    clauses and may require payment of a fee. Since many of the commitments may
    expire without being drawn upon, the total commitment amounts do not
    necessarily represent future cash requirements. The Company evaluates each
    customer's credit worthiness on a case-by-case basis. The amount of
    collateral obtained if deemed necessary by the Company upon extension of
    credit is based on management's credit evaluation. Collateral held varies,
    but may include accounts receivable, inventory, property, plant and
    equipment and income-producing commercial properties.

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



                                       24
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE J - COMMITMENTS

    The Company leases facilities and equipment under leases that expire through
    the year 2005. Approximate future minimum annual rental commitments under
    the leases as of December 31, 1997 are as follows (in thousands):

<TABLE>
<CAPTION>
                    Year ended
                   December 31,                              Facilities         Equipment            Total
                   ------------                              ----------         ---------            -----

<S>                     <C>                                     <C>                <C>               <C>  
                        1998                                    $ 24               $  2              $  26
                        1999                                      24                  2                 26
                        2000                                      24                  2                 26
                        2001                                      24                  2                 26
                        2002                                      24                  2                 26
                  Thereafter                                      58                  2                 60
                                                                 ---                ---               ----

                                                                $178                $12               $190
                                                                ====                ===               ====
</TABLE>

    Total rent expense for 1997, 1996 and 1995 was $31,000, $37,000, and
$17,000, respectively.

NOTE K - RELATED PARTIES

    At December 31, 1997 and 1996, the Company had loans receivable from
    directors, officers and principal owners and their related business
    interests aggregating $1,135,000 and $1,082,000, respectively. Activity with
    respect to related party loans was as follows (in thousands):

        Balance, December 31, 1996                                       $1,082
        New loans advanced                                                  778
        Repayments                                                         (685)
                                                                         ------

        Balance, December 31, 1997                                       $1,175
                                                                          =====

    At December 31, 1997, the Company had deposits of directors, officers and
    principal owners and their related business interests aggregating $789,000.



                                       25
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE L - EMPLOYEE BENEFIT PLANS

       The Company established a defined contribution plan in the form of a
       qualified 401(k) profit sharing plan during 1992 for the benefit of its
       employees. Eligible employees may elect to defer a portion of their
       salary as contributions to the plan. At the discretion of the Board of
       Directors, the Company may elect to make additional contributions.
       Contributions of $82,000, $52,000, and $42,000 were made to the plan for
       the years ended December 31, 1997, 1996 and 1995, respectively, and is
       included in salaries and benefits expense.

NOTE M - DIVIDENDS

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

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

NOTE N - FAIR VALUE OF FINANCIAL INSTRUMENTS

       The following summary presents the methodologies and assumptions used to
       estimate the fair value of the Company's financial instruments. The
       Company operates as a going concern and except for its investment
       portfolio, no active market exists for its financial instruments. Much of
       the information used to determine fair value is highly subjective and
       judgmental in nature and, therefore, the results may not be precise. The
       subjective factors include, among other things, estimates of cash flows,
       risk characteristics, credit quality and interest rates, all of which are
       subject to change. Since the fair value is estimated as of the balance
       sheet date, the amounts which will actually be realized or paid upon
       settlement or maturity of the various financial instruments could be
       significantly different.

    Cash and Cash Equivalents

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


                                       26
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE N - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

     Investments

         For securities held as investments, fair value equals quoted market
         price, if available. If a quoted market price is not available, fair
         value is estimated using quoted market prices for similar securities.
         The carrying amount of accrued interest receivable approximates its
         fair value.

     Loans

         The fair value of fixed rate loans is estimated by discounting the
         future cash flows using the current rates at which similar loans would
         be made to borrowers with similar credit ratings and for the same
         remaining maturities. For variable rate loans, the carrying amount is a
         reasonable estimate of fair value. For loans where collection of
         principal is in doubt, an allowance for losses has been estimated.
         Loans with similar characteristics were aggregated for purposes of the
         calculations. The carrying amount of accrued interest approximates its
         fair value.

     Deposits

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

     Notes Payable and Subordinated Debentures

         For variable rate notes payable and subordinated debentures, the
         carrying amount is a reasonable estimate of fair value.



                                       27
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE N - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

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

         The Company's commitments have variable rates and do not expose the
         Company to interest rate risk. No premium or discount was ascribed to
         the loan commitments because virtually all funding would be at current
         market rates.

         The following table presents estimated fair values of the Company's
         financial instruments as of December 31:

<TABLE>
<CAPTION>
                                                                     1997                      1996
                                                             ------------------        ------------------
                                                             Carrying     Fair         Carrying      Fair
                                                              Amount      Value         Amount       Value
                                                              ------      -----         ------       -----
                                                                       (In thousands of dollars)

<S>                                                        <C>           <C>            <C>         <C>     
         Financial assets
           Cash and due from banks                         $  4,100      $  4,100       $ 6,795     $  6,795
           Federal funds sold                                 6,425         6,425            -            -
           Securities available for sale                     12,995        12,995        10,561       10,561
           Loans, less allowance for loan losses            105,182       106,745        85,411       86,540
           Accrued interest receivable                        2,339         2,339         1,729        1,729

         Financial liabilities
            Deposits
               Non-interest bearing                          57,782        57,782        45,229       45,229
               Interest bearing                              67,098        67,679        53,014       53,303
            Notes payable and subordinated
             debentures                                       1,746         1,746         1,292        1,292
            Accrued interest payable                            366           366           294          294
         Unrecognized financial instruments
           (net of contract amount)
             Commitments to extend credit                       N/A            -            N/A           -
             Standby letters of credit                          N/A            -            N/A           -
</TABLE>



                                       28
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE O - REGULATORY MATTERS

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

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

   As of December 31, 1997, the most recent notification from the Federal
   Deposit Insurance Corporation categorized the Bank as adequately capitalized
   under the regulatory framework for prompt corrective action. To be
   categorized as adequately capitalized the Bank must maintain minimum total
   risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the
   table. There are no conditions or events since that notification that
   management believes have changed the institution's category.



                                       29
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE O - REGULATORY MATTER (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                To be well
                                                                                             capitalized under
                                                                      For capital            prompt corrective
                                                   Actual          adequacy purposes         action provisions
                                              --------------       -----------------         -----------------
                                              Amount   Ratio         Amount    Ratio          Amount     Ratio
                                              ------   -----         ------    -----          ------     -----
                                                                 (Amounts in thousands)

<S>                                           <C>        <C>          <C>         <C>         <C>          <C>  
   As of December 31, 1997
     Total capital
       (to risk weighted assets)              $10,815    9.7%       =>$8,924     =>8.0%      =>$11,154    =>10.0%
     Tier 1 capital
       (to risk weighted assets)                9,421    8.4         =>4,462     =>4.0         =>6,693     =>6.0
     Tier 1 capital
       (to average assets)                      9,421    7.5         =>4,995     =>4.0         =>6,243     =>5.0
   As of December 31, 1996
     Total capital
       (to risk weighted assets)                7,642    8.5         =>7,185     =>8.0         =>8,985    =>10.0
     Tier 1 capital
       (to risk weighted assets)                6,746    7.5         =>3,594     =>4.0         =>5,391     =>6.0
     Tier 1 capital
       (to average assets)                      6,746    7.8         =>3,436     =>4.0         =>4,295     =>5.0
</TABLE>

   Unaudited capital ratios for the Bank as of March 31, 1998, are as follows:

           Total capital to risk-weighted assets                         9.84%
           Tier 1 capital to risk-weighted assets                        8.59
           Tier 1 capital to average assets                              7.39

   The Federal Reserve Board requires banks to maintain reserve balances
   composed of cash on hand and balances maintained correspondent banks. These
   reserve balances are based primarily on deposit levels and totaled
   approximately $408,000 and $277,000 at December 31, 1997 and 1996,
   respectively.




                                       30
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE P - SUBSEQUENT EVENT

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

   During February 1998, the Company paid cash dividends on common shares
   outstanding. The dividend paid was $1.50 per common share and equaled
   approximately $93,000.



                                       31
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE Q - PARENT COMPANY FINANCIAL INFORMATION

   Condensed parent company only financial information follows:

                                               Condensed Balance Sheets
                                                (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                       March 31,              December 31,
                                                                   -----------------       ------------------
                                                                   1998         1997       1997          1996
                                                                   ----         ----       ----          ----
                                                                       (Unaudited)

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

         Cash                                                    $    66       $  194     $   32       $    12
         Investment in subsidiary - Independent Bank
           Equity in net assets                                   10,268        7,470      9,745         6,415
         Other assets                                                 46           45         88            67
                                                                 -------       ------     ------        ------

                                                                 $10,380       $7,709     $9,865        $6,494
                                                                 =======       ======     ======        ======

                    LIABILITIES AND
                 STOCKHOLDERS' EQUITY

         Notes payable to bank                                   $ 1,326       $1,582     $1,146       $   692
         Subordinated debentures                                     550          600        600           600
         Other liabilities                                            22          173         33            34
                                                                 -------       ------     ------        ------
                   Total liabilities                               1,898        2,355      1,779         1,326

         Stockholders' equity                                      8,482        5,354      8,086         5,168
                                                                 -------       ------     ------        ------

                                                                 $10,380       $7,709     $9,865        $6,494
                                                                 =======       ======     ======        ======
</TABLE>



                                       32
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE Q - PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

                         Condensed Statements of Income
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                            Three months ended           Years ended
                                                                 March 31,               December 31,
                                                              ---------------       -------------------------
                                                              1998       1997       1997      1996       1995
                                                              ----       ----       ----      ----       ----
                                                                (Unaudited)

<S>                                                          <C>         <C>      <C>        <C>          <C>  
         Revenues                                            $  -        $  -     $    -     $    -       $   3

         Operating expenses
           Interest                                            37          27        158         82         55
           Other                                               11           4         29         26         24
                                                             ----        ----     ------     ------       ----
                                                               48          31        187        108         79
                                                             ----        ----     ------     ------       ----
                  Loss before income taxes and
                    equity in undistributed net
                    income of subsidiary                      (48)        (31)      (187)      (108)       (76)

         Income tax benefit                                    13           9         55         31         21
                                                             ----        ----     ------     ------       ----

                  Loss before equity in
                    undistributed net income
                    of subsidiary                             (35)        (22)      (132)       (77)       (55)

         Equity in undistributed net income of
           subsidiary net of amortization of cost
           in excess of net assets                            493         310      1,092      1,034        727
                                                             ----        ----      -----     ------       ----

         NET INCOME                                          $458        $288     $  960     $  957       $672
                                                             ====        ====     ======     ======       ====
</TABLE>




                                       33
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE Q - PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

                  Condensed Statements of Comprehensive Income
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                            Three months ended            Years ended
                                                                 March 31,                 December 31,
                                                              ---------------       -------------------------
                                                              1998       1997       1997      1996       1995
                                                              ----       ----       ----      ----       ----
                                                                (Unaudited)

<S>                                                           <C>        <C>        <C>      <C>        <C>   
         Net income                                           $458       $288       $960     $  957     $  672
         Other comprehensive income,
           net of tax
             Unrealized holding gains (losses)
               arising during the period                        47        (85)        33        (95)       102
             Income tax (expense) benefit
               related to items of other
               comprehensive income                            (16)        29        (11)        32        (35)
                                                              ----       ----       ----     ------     ------
                                                                31        (56)        22        (63)        67
                                                              ----       ----       ----     ------     ------

         Comprehensive income                                 $489       $232       $982     $  894     $  739
                                                              ====       ====       ====     ======     ======

</TABLE>



                                       34
<PAGE>

                       Kersey Bancorp, Inc. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE Q - PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

                       Condensed Statements of Cash Flows
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                             Three months ended           Years ended
                                                                  March 31,               December 31,
                                                              ---------------       -----------------------
                                                              1998       1997       1997      1996     1995
                                                              ----       ----       ----      ----     ----
                                                                (Unaudited)

<S>                                                           <C>        <C>      <C>       <C>        <C>  
   Cash flows from operating activities
     Net income                                               $458       $288     $   960   $   957    $ 672
     Adjustments to reconcile net income to net
       cash provided by operating activities
         Equity in undistributed net income of
          unconsolidated subsidiary                           (493)      (310)     (1,092)   (1,034)    (727)
         Change in other assets and accrued
          liabilities                                           32        161         (22)       23      (24)
                                                             -----      -----      ------   -------   ------

                  Net cash used in operating
                    activities                                  (3)       139        (154)      (54)     (79)

   Cash flows from investing activities
     Additional investment in subsidiary                        -        (801)     (1,766)     (576)    (618)

   Cash flows from financing activities
     Proceeds from notes payable                               180        890       1,064       637      120
     Proceeds from debentures issued                            -          -           -        600       -
     Proceeds from sale of common stock                         -          -        1,532         8      591
     Principal repayment of notes payable                       -          -         (610)     (655)     (30)
     Principal repayment of debentures                         (50)        -           -         -        -
     Dividends paid                                            (93)       (46)        (46)      (71)      -
                                                             -----      -----      ------   -------   ------

                  Net cash provided by
                    financing activities                        37        844       1,940       519      681
                                                             -----      -----      ------   -------   ------

   Net increase (decrease) in cash                              34        182          20      (111)     (16)

   Cash, beginning of period                                    32         12          12       123      139
                                                             -----      -----      ------   -------    -----

   Cash, end of period                                       $  66      $ 194      $   32   $    12    $ 123
                                                             =====      =====      ======   =======    =====
</TABLE>




                                       35
<PAGE>

                                   APPENDIX A


                      AGREEMENT AND PLAN OF REORGANIZATION


         THIS AGREEMENT AND PLAN OF REORGANIZATION made as of the 8th day of
May, 1998, among ZIONS BANCORPORATION ("Zions Bancorp"), a Utah corporation
having its principal office in Salt Lake City, Utah, VAL COR BANCORPORATION,
INC. ("Val Cor"), a Colorado corporation having its principal office in Cortez,
Colorado, BANK COLORADO, NATIONAL ASSOCIATION ("BCNA"), a national banking
association organized under the laws of the United States, KERSEY BANCORP (the
"Company"), a Colorado corporation having its principal office in Kersey,
Colorado, and INDEPENDENT BANK (the "Bank"), a banking corporation organized
under the laws of the State of Colorado

                         W I T N E S S E T H   T H A T :

         WHEREAS, the Company is a bank holding company and the sole shareholder
of the Bank;

         WHEREAS, Zions Bancorp is a bank holding company and the sole
shareholder of Val Cor;

         WHEREAS, Val Cor is a bank holding company and the sole shareholder of
BCNA;

         WHEREAS, Zions Bancorp and Val Cor each desire to affiliate with the
Company through the merger of the Company with and into Val Cor, with Val Cor to
be the surviving corporation (the "Holding Company Merger") and, in addition, to
cause the merger of the Bank with and into BCNA, with BCNA to be the surviving
national banking association (the "Bank Merger");

         WHEREAS, the Board of Directors of the Company has determined that it
would be in the best interests of the Company, its shareholders, its customers
and those of the Bank and the areas served by the Company and the Bank to become
affiliated with Zions Bancorp through the Holding Company Merger and to cause
the Bank Merger;

         WHEREAS, the respective boards of directors of BCNA and the Bank have
determined that it would be in the best interests of BCNA or the Bank, as the
case may be, its shareholders and customers, for BCNA and the Bank to merge with
each other;

         WHEREAS, the respective Boards of Directors of Zions Bancorp, Val Cor,
and the Company have agreed to cause the Holding Company Merger pursuant to the
provisions of section 7-111-101 et seq. of the Colorado Business Corporation
Act; and to cause the Bank Merger pursuant to the provisions of section 215a of
the National Bank Act (12 U.S.C. ss. 215a) and section 11-4-102 of the Colorado
Revised Statutes;



<PAGE>



         WHEREAS, the respective Boards of Directors of BCNA and the Bank have
agreed to cause the Bank Merger pursuant to the provisions of section 215a of
the National Bank Act and section 11-4-102 of the Colorado Revised Statutes;

         WHEREAS, the parties intend that the Holding Company Merger and the
Bank Merger qualify as one or more tax-free reorganizations under section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code");

         NOW, THEREFORE, in consideration of these premises and the mutual
agreements hereinafter set forth, the parties agree as follows:


1.       Combinations.

         1.1.  Form of Combinations.

                  (a) Val Cor and the Company will execute a merger agreement
(the "Holding Company Merger Agreement") substantially in the form of Exhibit I
annexed hereto. Subject to the provisions of the Holding Company Merger
Agreement, the Company will be merged with and into Val Cor in the Holding
Company Merger with Val Cor as the surviving corporation. The shares of common
stock, $10.00 par value, of the Company (the "Company Common Stock") shall be
canceled and immediately converted into the right to receive, subject to the
terms, conditions, and limitations set forth herein, such consideration as is
provided in section 1.2(a) hereof.

                  (b) BCNA and the Bank will execute a merger agreement (the
"Bank Merger Agreement") substantially in the form of Exhibit II annexed hereto.
Immediately following the effectiveness of the Holding Company Merger, and
subject to the provisions of the Bank Merger Agreement, the Bank will be merged
with and into BCNA in the Bank Merger with BCNA as the surviving national
banking association. The shares of common stock of the Bank shall be canceled.

         1.2.  Consideration for Holding Company Merger.

                  (a) Subject to the terms, conditions, and limitations set
forth herein, upon surrender of his or her certificate or certificates in
accordance with Section 1.1 hereof, each holder of shares of Company Common
Stock shall be entitled to receive, in exchange for each share of Company Common
Stock held of record by such stockholder as of the Effective Date, that number
of shares of the common stock of Zions Bancorp, no par value (the "Zions Bancorp
Stock") calculated by dividing the Purchase Price by the Average Closing Price,
and by further dividing the number so reached by the number of shares of Company
Common Stock that shall be issued and outstanding at the Effective Date.


                                        2

<PAGE>



                  (b) Certain Definitions. For the purposes of this Agreement,
the following terms shall have the meanings set forth in this Subparagraph (b).

                      (i) Audit Expenses. All expenses incurred by the Company
and the Bank through the Effective Date, determined on a pre-tax basis in
accordance with generally accepted accounting principles, with respect to the
conduct of the audit and the delivery of the report of audit of the consolidated
accounts of the Company and the Bank by Fortner, Bayens, Levkulich and Co. as of
December 31, 1997 and for the year then ended.

                      (ii) Average Closing Price. The average of each Daily
Sales Price over the Pricing Period.

                      (iii) Daily Sales Price. For any trading day, the last
reported sales price of Zions Bancorp Stock as such price is reported by the
Nasdaq National Market, or in the absence thereof by such other source upon
which Zions Bancorp and the Company shall mutually agree.

                      (iv) Expense Limit. Subject to increase pursuant to the
next sentence,

                           (A) $185,000, if the Audit Expenses are greater than
$90,000; or

                           (B) $95,000 plus the Audit Expenses, if the Audit
Expenses are $90,000 or less. In the event that quarterly financial statements
for the Company for quarterly periods ended after March 31, 1998 are required by
applicable rules of the Securities and Exchange Commission (the "SEC") to be
included in the registration statement to be filed by Zions Bancorp with the SEC
pursuant to the Securities Act of 1933 (the "Securities Act") in connection with
the registration of the shares of Zions Bancorp Stock to be used as
consideration in connection with the Holding Company Merger (the "Registration
Statement"), the Expense Limit shall be increased by $20,000 for each quarterly
period ended after March 31, 1998 for which such financial statements are
required.

                      (v) Pricing Period. The ten consecutive trading days
ending on and including the third trading day preceding the Effective Date.

                      (vi) Purchase Price. $28,200,000.00, reduced as follows:

                           (A) if the Transaction Expenses exceed the Expense
Limit, then the reduction shall be the amount by which the Transaction Expenses
exceed the Expense Limit, net of any associated tax benefit; and

                           (B) if the Transaction Expenses do not exceed the
Expense Limit, then the reduction shall be zero.


                                        3

<PAGE>



                      (vii) Transaction Expenses.

                           (A) All expenses incurred from January 1, 1998
through the Effective Date, determined on a pre-tax basis in accordance with
generally accepted accounting principles, with respect to attorneys,
accountants, investment bankers, consultants, brokers and finders who will have
rendered services to the Company or the Bank in connection with the transactions
contemplated by this Agreement, and

                           (B) all of the other expenses incurred from January
1, 1998 through the Effective Date outside of the ordinary course of business of
the Company and the Bank, other than the cost of printing and delivering the
proxy materials to be transmitted to shareholders of the Company in connection
with the Holding Company Merger.

         1.3. No Fractional Shares. Zions Bancorp will not issue fractional
shares of its stock. In lieu of fractional shares of Zions Bancorp Stock, if
any, each shareholder of the Company who is entitled to a fractional share of
Zions Bancorp Stock shall receive an amount of cash equal to the product of such
fraction times the Average Closing Price. Such fractional share interest shall
not include the right to vote or to receive dividends or any interest thereon.

         1.4. Dividends; Interest. No shareholder of the Company will be
entitled to receive dividends on his or her Zions Bancorp Stock until he or she
exchanges his or her certificates representing Company Common Stock for Zions
Bancorp Stock. Any dividends declared on Zions Bancorp Stock to holders of
record on or after the Effective Date shall, with respect to stock to be
delivered pursuant to this Agreement to shareholders of the Company who have not
exchanged their certificates representing Company Common Stock for Zions Bancorp
Stock, be paid to the Exchange Agent (as designated in Section 1.5 of this
Agreement) and, upon receipt from a former shareholder of the Company of
certificates representing shares of Company Common Stock, the Exchange Agent
shall forward to such former shareholder of the Company (i) certificates
representing his or her shares of Zions Bancorp Stock, (ii) dividends declared
thereon subsequent to the Effective Date (without interest) and (iii) the cash
value of any fractional shares determined in accordance with Section 1.3 hereof.

         1.5.  Designation of Exchange Agent.

                  (a) The parties of this Agreement hereby designate Zions First
National Bank, a national banking association with its head office located in
Salt Lake City, Utah ("Zions Bank") as Exchange Agent to effect the exchanges
contemplated hereby.

                  (b) Zions Bancorp will, on the Effective Date or as soon
thereafter as is practicable, issue and deliver to Zions Bank the share
certificates representing shares of Zions Bancorp Stock and the cash to be paid
to holders of Company Common Stock in accordance with this Agreement.


                                        4

<PAGE>



         1.6. Notice of Exchange. Promptly after the Effective Date, Zions Bank
shall mail to each holder of one or more certificates formerly representing
Company Common Stock, except to such holders as shall have waived the notice
required by this Section 1.6, a notice specifying the Effective Date and
notifying such holder to surrender his or her certificate or certificates to
Zions Bank for exchange. Such notice shall be mailed to holders by regular mail
at their addresses on the records of the Company.

         1.7. Treatment of Stock Options. Each stock option to purchase Company
Common Stock not exercised prior to the Effective Date shall automatically be
canceled on and as of the Effective Date.

         1.8. Voting Agreements. Simultaneously herewith, each shareholder of
the Company who is listed on Schedule 1.8 annexed hereto shall each enter into
an agreement with Zions Bancorp, substantially in form and substance as that set
forth as Exhibit III attached hereto, in which he or she agrees to vote all
shares of Company Common Stock which may be voted, or whose vote may be
directed, by him or her, in favor of the transactions contemplated by this
Agreement at the meeting of shareholders at which such transaction shall be
considered.

         1.9. Employee Benefits. If any employee of the Company or of the Bank
becomes a participant in any employment benefit plan, practice, or policy of
Zions Bancorp, such employee shall be given credit under such plan, practice, or
policy for all service prior to the Effective Date with the Company or the Bank
for purposes of eligibility and vesting, but not for benefit accrual purposes,
for which such service is taken into account or recognized, provided that there
be no duplication of such benefits as are provided under any employee benefit
plans, practices, or policies of the Company or the Bank that continue in effect
following the Effective Date.


2.       Effective Date.

         The Effective Date shall be the date which is the latest of:

         2.1. Shareholder Approval. The day upon which the shareholders of the
Company approve, ratify, and confirm the Holding Company Merger; or

         2.2. Federal Reserve Approval. The first to occur of (a) the date
thirty days following the date of the order of the Board of Governors of the
Federal Reserve System or the Federal Reserve Bank of San Francisco acting
pursuant to authority delegated to it by the Board of Governors of the Federal
Reserve System (collectively, the "Board of Governors") approving the Holding
Company Merger, or (b) if, pursuant to section 321(a) of the Riegle Community
Development and Regulatory Improvement Act of 1994 (the "Riegle Act"), the Board
of Governors shall have prescribed a shorter period of time with the concurrence
of the Attorney General of the United States, the date on which such shorter
period of time shall elapse, or (c) the date ten days following the date on
which the Board of Governors indicates its waiver of jurisdiction over the
Holding Company Merger; or

                                        5

<PAGE>



         2.3. OCC Approval. The first to occur of (a) the date thirty days
following the date of the order of the Office of the Comptroller of the Currency
(the "OCC") approving the Bank Merger, or (b) if, pursuant to section 321(b) of
the Riegle Act, the OCC shall have prescribed a shorter period of time with the
concurrence of the Attorney General of the United States, the date on which such
shorter period of time shall elapse; or

         2.4. Utah Commissioner Approval. If such an order shall be required by
law, the date ten days following the date of the order of the Commissioner of
Financial Institutions of the State of Utah (the "Commissioner") approving the
transactions contemplated by this Agreement; or

         2.5. Colorado Banking Board Approval. If such an order shall be
required by law, the date ten days following the date of the order of the
Colorado State Banking Board (the "Banking Board") approving the transactions
contemplated by this Agreement; or

         2.6. Other Regulatory Approvals. The date upon which any other material
order, approval, or consent of a federal or state regulator of financial
institutions or financial institution holding companies authorizing consummation
of the transactions contemplated by this Agreement is obtained or any waiting
period mandated by such order, approval, or consent has run; or

         2.7. Expiration of Stays. Ten days after any stay of the approvals of
any of the Board of Governors, the OCC, the Commissioner, or the Banking Board
of the transactions contemplated by this Agreement or any injunction against
closing of said transactions is lifted, discharged, or dismissed; or

         2.8. Mutual Agreement. Such other date as shall be mutually agreed to
by Zions Bancorp and the Company.


3.       Conditions Precedent to Performance of Obligations of the Parties.

         The obligations of Zions Bancorp, Val Cor, and the Company to
consummate the Holding Company Merger and the obligations of BCNA and the Bank
to consummate the Bank Merger shall be subject to the conditions that on or
before the Effective Date:

         3.1. Regulatory Approvals. Orders, consents, and approvals, in form and
substance reasonably satisfactory to Zions Bancorp and the Company, shall have
been entered by the requisite governmental authorities, granting the authority
necessary for consummation of the transactions contemplated by this Agreement
and the operation by Zions Bancorp and Val Cor of the business of the Company,
the business of the Bank, and each of the branches of the Bank, pursuant to the
provisions of applicable law; and all other requirements prescribed by law or by
the rules and regulations of any other regulatory authority having jurisdiction
over such transactions shall have been satisfied.

                                        6

<PAGE>



         3.2. Absence of Litigation. No action, suit, or proceeding shall have
been instituted or shall have been threatened before any court or other
governmental body or by any public authority to restrain, enjoin, or prohibit
the Holding Company Merger or the Bank Merger, or which would reasonably be
expected to restrict materially the operation of the business of the Company or
that of the Bank or the exercise of any rights with respect thereto or to
subject either of the parties hereto or any of their subsidiaries, directors, or
officers to any liability, fine, forfeiture, divestiture, or penalty on the
ground that the transactions contemplated hereby, the parties hereto, or their
subsidiaries, directors, or officers have breached or will breach any applicable
law or regulation or have otherwise acted improperly in connection with the
transactions contemplated hereby and with respect to which the parties hereto
have been advised by counsel that, in the opinion of such counsel, such action,
suit, or proceeding raises substantial questions of law or fact which could
reasonably be decided materially adversely to either party hereto or its
subsidiaries, directors, or officers.

         3.3.  Registration Statement.

                  (a) Effectiveness. The Registration Statement shall have
become effective under the Securities Act, and Zions Bancorp shall have received
all required state securities laws or "blue sky" permits and other required
authorizations or confirmations of the availability of exemptions from
registration requirements necessary to issue Zions Bancorp Stock in the Holding
Company Merger.

                  (b) Absence of Stop-Order. Neither the Registration Statement
nor any such required permit, authorization, or confirmation shall be subject to
a stop-order or threatened stop-order by the SEC or any state securities
authority.

         3.4. Federal Income Taxation. Zions Bancorp and the Company shall have
received a written opinion of Slivka Robinson Waters & O'Dorisio, P.C., or of
Duane, Morris & Heckscher LLP, or of another firm mutually agreeable to Zions
Bancorp and the Company, applying existing law, that the Holding Company Merger
and the Bank Merger shall qualify as one or more reorganizations under section
368(a)(1) of the Code and the regulations and rulings promulgated thereunder. In
rendering such opinion, counsel may require and rely upon representations
contained in certificates of officers of Zions Bancorp, the Company, and others.

         3.5. Adverse Legislation. Subsequent to the date of this Agreement no
legislation shall have been enacted and no regulation or other governmental
requirement shall have been adopted or imposed that renders or will render
consummation of any of the material transactions contemplated by this Agreement
impossible.


                                        7

<PAGE>



4.       Conditions Precedent to Performance of the Obligations of Zions
         Bancorp, Val Cor, and BCNA.

         The obligations of Zions Bancorp, Val Cor, and BCNA hereunder are
subject to the satisfaction, on or prior to the Effective Date, of all the
following conditions, compliance with which or the occurrence of which may be
waived in whole or in part by Zions Bancorp in writing unless not so permitted
by law:

         4.1. Approval by Shareholders of the Company. The shareholders of the
Company, acting pursuant to a proxy statement in form and substance satisfactory
to Zions Bancorp and its counsel, shall have authorized, ratified, and confirmed
the Holding Company Merger by not less than the requisite percentage of the
outstanding voting stock of each class of the Company, in accordance with the
applicable laws of the State of Colorado.

         4.2. Representations and Warranties; Performance of Obligations. All
representations and warranties of the Company and the Bank contained in this
Agreement shall be true and correct in all material respects as of the Effective
Date with the same effect as if such represen tations and warranties had been
made or given at and as of such date, except that representations and warranties
of the Company or the Bank contained in this Agreement which specifically relate
to an earlier date shall be true and correct in all material respects as of such
earlier date. All covenants and obligations to be performed or met by the
Company or the Bank on or prior to the Effective Date shall have been so
performed or met. On the Effective Date, the president and chief executive
officer and the chief financial officer of each of the Company and the Bank
shall deliver to Zions Bancorp a certificate to that effect. The delivery of
such certificates shall in no way diminish the warranties, representations,
covenants, and obligations of the Company and the Bank made in this Agreement.

         4.3. Opinion of Company Counsel. Zions Bancorp shall have received an
opinion letter from Slivka Robinson Waters & O'Dorisio, P.C., dated the
Effective Date, substantially in form and substance as that set forth as Exhibit
IV attached hereto.

         4.4. [reserved]

         4.5. Delivery of Branch Authorizations. The Company shall have
delivered to Zions Bancorp originals or certified copies of all of the
regulatory authorizations entitling the Bank to operate each of its branch
offices, together with a certification by the president and chief executive
officer and the chief financial officer of the Bank dated the Effective Date,
certifying that such branch certificates have not been revoked or threatened to
be revoked and that such certificates are in full force and effect.

         4.6.  No Adverse Developments.

                   (a) During the period from December 31, 1997 to the Effective
Date, (i) there shall not have been any material adverse change in the financial
position or results of operations

                                        8

<PAGE>



of the Company or the Bank taken as a whole, nor shall the Company or the Bank
have sustained any material loss or damage to its properties, whether or not
insured, which materially affects its ability to conduct its business; and (ii)
none of the events described in clauses (a) through (f) of Section 6.16 of this
Agreement shall have occurred, and each of the practices and conditions
described in clauses (x) through (z) of that section shall have been maintained.

                   (b) As of the Effective Date, the capital structure of the
Company and the capital structure of the Bank shall be as stated in section 6.9.

                   (c) As of the Effective Date, other than liabilities incurred
in the ordinary course of business subsequent to December 31, 1997, there shall
be no liabilities of the Company or the Bank which are material to the Company
on a consolidated basis which were not reflected on the consolidated statement
of condition of the Company as of December 31, 1997 or in the related notes to
the consolidated statement of condition of the Company as of December 31, 1997.

                   (d) No adverse action shall have been instituted or
threatened by any governmental authority, or referred by a governmental
authority to another governmental authority, for the enforcement or assessment
of penalties against the Company or the Bank for the violation of any laws of
regulations relating to equal credit opportunity, fair housing, or fair lending.

                   (e) Zions Bancorp shall have received a certificate dated the
Effective Date, signed by the president and the chief financial officer of the
Company and the president and the chief financial officer of the Bank,
certifying to the matters set forth in paragraphs (a), (b), (c), and (d) of this
section 4.6. The delivery of such officers' certificate shall in no way diminish
the warranties and representations of the Company or those of the Bank made in
this Agreement.

         4.7. Consolidated Net Worth. On and as of the Effective Date, the
consolidated net worth of the Company as determined in accordance with generally
accepted accounting principles shall not be less than the sum of (a) $8,086,000
and (b) the aggregate contributions to capital caused by the payments
accompanying the exercise of any stock options on or after December 31, 1997.

         4.8. Loan Loss Reserve. On and as of the Effective Date, the aggregate
reserve for loan losses of the Bank as determined in accordance with generally
accepted accounting principles shall not be less than $1,836,000.

         4.9. CRA Rating. The CRA rating of the Bank shall be no lower than
"satisfactory."

         4.10. Employment Agreements. Larry G. Neuschwanger shall have entered
into an employment agreement with BCNA substantially in form and substance as
that set forth as Exhibit V attached hereto.


                                        9

<PAGE>



         4.11. Accounting Treatment. Unless repurchases by Zions Bancorp of
shares of its common stock shall have made the receipt of such letters
impracticable,

                  (a) Zions Bancorp shall have received letters from KPMG Peat
Marwick LLP, its independent auditing firm ("KPMG"), dated the date of or
shortly prior to each of the mailing date of the proxy materials to the
shareholders of the Company, and the Effective Date, stating its opinion that
the reorganization contemplated by this Agreement shall qualify for pooling-of-
interest accounting treatment; and

                  (b) the Company shall have received letters from Fortner,
Bayens, Levkulich and Co., its independent auditing firm, dated the date of or
shortly prior to each of the mailing date of the proxy materials to the
shareholders of the Company, and the Effective Date, stating its opinion that
the reorganization contemplated by this Agreement shall qualify for pooling-of-
interest accounting treatment.

         4.12. Consolidated Audit. The audit of the consolidated accounts of the
Company and the Bank by Fortner, Bayens, Levkulich and Co. as of December 31,
1997 and for the year then ended shall have been completed, and the results of
such audit shall be reasonably acceptable to Zions Bancorp.

         4.13. Affiliates' Agreements. Zions Bancorp shall, not later than
thirty days prior to the Effective Date, have received a written agreement from
each "affiliate" of the Company (as that term is used in section 7.7 of this
Agreement) reasonably acceptable to Zions and consistent with section 7.7 of
this Agreement.


5. Conditions Precedent to Performance of Obligations of the Company and the
Bank.

         The obligations of the Company and the Bank hereunder are subject to
the satisfaction, on or prior to the Effective Date, of all the following
conditions, compliance with which or the occurrence of which may be waived in
whole or in part by the Company in writing unless not so permitted by law:

         5.1. Representations and Warranties; Performance of Obligations. All
representations and warranties of Zions Bancorp, Val Cor, and BCNA contained in
this Agreement shall be true and correct in all material respects as of the
Effective Date with the same effect as if such representations and warranties
had been made or given at and as of such date, except that representations and
warranties of Zions Bancorp, Val Cor, and BCNA contained in this Agreement which
specifically relate to an earlier date shall be true and correct in all material
respects as of such earlier date. All covenants and obligations to be performed
or met by Zions Bancorp, Val Cor, or BCNA on or prior to the Effective Date
shall have been so performed or met. On the Effective Date, either the President
or an Executive Vice President of Zions Bancorp and either the Chairman, the
President or an Executive Vice President of each of Val Cor and BCNA shall
deliver to the Company a certificate to that effect. The delivery of such

                                       10

<PAGE>



officer's certificate shall in no way diminish the warranties, representations,
covenants, and obligations of Zions Bancorp, Val Cor, and BCNA made in this
Agreement.

         5.2. Opinion of Zions Bancorp Counsel. The Company shall have received
an opinion letter from Duane, Morris & Heckscher LLP, dated the Effective Date,
substantially in form and substance as that set forth as Exhibit VI attached
hereto.

         5.3. No Adverse Developments. During the period from December 31, 1997
to the Effective Date, (a) there shall not have been any material adverse change
in the financial position or results of operations of Zions Bancorp and its
subsidiaries, taken as a whole, nor shall Zions Bancorp and its subsidiaries,
taken as a whole, have sustained any material loss or damage to their
properties, whether or not insured, which materially affects their ability to
conduct their business, and (b) no adverse action shall have been instituted or
threatened by any governmental authority, or referred by a governmental
authority to another governmental authority, for the enforcement or assessment
of penalties against Zions Bancorp or its subsidiaries for the violation of any
laws of regulations relating to equal credit opportunity, fair housing, or fair
lending; and the Company shall have received a certificate dated the Effective
Date signed by either the President of Zions Bancorp or an Executive Vice
President of Zions Bancorp to the foregoing effect. The delivery of such
officer's certificate shall in no way diminish the warranties and
representations of Zions Bancorp made in this Agreement.

         5.4. Status of Zions Bancorp Stock. Zions Bancorp Stock shall be listed
on the Nasdaq National Market (or else shall become listed on another national
securities exchange).

         5.5 Fairness Opinion. The Company shall have received the opinion of
Howe Barnes Investments, Inc., or such other recognized investment banking firm
as shall be reasonably acceptable to the Company, to the effect that the
transactions contemplated by this Agreement are fair, from a financial point of
view, to the Company and its shareholders and such opinion shall not have been
withdrawn.


6. Representations and Warranties of the Company and the Bank.

         The Company (with respect to the Company and the Bank) and the Bank
(solely with respect to itself) each represent and warrant to Zions Bancorp, Val
Cor, and BCNA as follows:

         6.1. Organization, Powers, and Qualification. Each of the Company and
the Bank is a corporation which is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business
as now conducted. Each of the Company and the Bank owns or possesses in the
operation of its business all franchises, licenses, permits, branch
certificates, consents, approvals, waivers, and other authorizations,
governmental or otherwise, which are necessary for it to conduct its business as
now conducted, except for those where the failure of such ownership or

                                       11

<PAGE>



possession would not adversely affect the operation and properties of the
Company or the Bank in any material respect. Each of the Company and the Bank is
duly qualified and licensed to do business and is in good standing in every
jurisdiction with respect to which the failure to be so qualified or licensed
could result in material liability or adversely affect the operation and
properties of the Company or the Bank in any material respect.

         6.2. Execution and Performance of Agreement. Each of the Company and
the Bank has all requisite corporate power and authority to execute and deliver
this Agreement and to perform its respective terms.

         6.3. Absence of Violations. Except as set forth on Schedule 6.3 hereof:

                  (a) neither the Company nor the Bank is in violation of its
charter documents or bylaws, nor in any material respect of any applicable
federal, state, or local law or ordinance nor any order, rule, or regulation of
any federal, state, local, or other governmental agency or body, or in default
with respect to any order, writ, injunction, or decree of any court, or in
default under any order, license, regulation, or demand of any governmental
agency, any of which violations or defaults could reasonably be expected to have
a materially adverse effect on its business, properties, liabilities, financial
position, results of operations, or prospects; and neither the Company nor the
Bank has received any claim or notice of violation with respect thereto;

                  (b) neither the Company nor the Bank nor any member of the
management of either of them is a party to any assistance agreement, supervisory
agreement, memorandum of understanding, consent order, cease and desist order or
condition of any regulatory order or decree with or by the Board of Governors,
the Federal Reserve Bank of Kansas City, the Federal Deposit Insurance
Corporation (the "FDIC"), any other banking or securities authority of the
United States or the State of Colorado, or any other regulatory agency that
relates to the conduct of the business of the Company or the Bank or their
assets; and except as previously disclosed to Zions Bancorp in writing, no such
agreement, memorandum, order, condition, or decree is pending or, to the
knowledge of the Company and the Bank, threatened;

                   (c) each of the Company and the Bank has established policies
and procedures to provide reasonable assurance of compliance in a safe and sound
manner with the federal banking, credit, housing, consumer protection, and civil
rights laws and with all other laws applicable to the operations of the Company
and the Bank and the regulations adopted under each of those laws, so that
transactions be executed and assets be maintained in accordance with such laws
and regulations; and each of the Company and the Bank has established policies
and practices with respect to all such laws and regulations to reasonably limit
noncompliance and detect and report noncompliance to its management; and

                  (d) the Bank has established a CRA policy which provides for
(i) goals and objectives consistent with CRA; (ii) a methodology for
self-assessment by the board of directors of the Bank; (iii) ongoing CRA
training of all personnel of the Bank; and (iv) procedures whereby all
significant CRA-related activity is documented; and the Bank has officially

                                       12

<PAGE>



designated a CRA officer who reports directly to the board of directors and is
responsible for the CRA program of the Bank.

         6.4. Compliance with Agreements. Neither the Company nor the Bank is in
violation of any material term of any material security agreement, mortgage,
indenture, or any other contract, agreement, instrument, lease, or certificate.
The capital ratios of each of the Company and the Bank comply fully with all
terms of all currently outstanding supervisory and regulatory requirements and
with the conditions of all regulatory orders and decrees.

         6.5. Binding Obligations; Due Authorization. Subject to the approval of
its shareholders and all necessary bank regulatory authorities, this Agreement
constitutes valid, legal, and binding obligations of each of the Company and the
Bank, enforceable against it in accordance with its terms, except as enforcement
may be limited by applicable bankruptcy, insolvency, moratorium or similar law,
or by general principles of equity. The execution, delivery, and performance of
this Agreement and the transactions contemplated thereby have been duly and
validly authorized by the board of directors of each of the Company and the
Bank. Subject to approval by its shareholders of this Agreement and all
necessary bank regulatory authorities, no other corporate proceedings on the
part of either the Company or the Bank are necessary to authorize this Agreement
or the carrying out of the transactions contemplated hereby.

         6.6. Absence of Default. None of the execution or the delivery of this
Agreement, the consummation of the transactions contemplated thereby, or the
compliance with or fulfillment of the terms thereof will conflict with, or
result in a breach of any of the terms, conditions, or provisions of, or
constitute a default under the organizational documents or bylaws of the Company
or the Bank. Such execution, consummation, or fulfillment will not (a) conflict
with, or result in a material breach of the terms, conditions, or provisions of,
or constitute a material violation, conflict, or default under, or, except as
set forth on Schedule 6.6 hereof, give rise to any right of termination,
cancellation, or acceleration with respect to, or result in the creation of any
lien, charge, or encumbrance upon, any property or assets of the Company or the
Bank pursuant to any material agreement or instrument under which the Company or
the Bank is obligated or by which any of its properties or assets may be bound,
including without limitation any material lease, contract, mortgage, promissory
note, deed of trust, loan, credit arrangement, or other commitment or
arrangement of the Company or the Bank in respect of which it is an obligor; (b)
if the Holding Company Merger is approved by the Board of Governors under the
Bank Holding Company Act of 1956, as amended (the "BHC Act"), or if the Board of
Governors waives its jurisdiction over the Holding Company Merger, and if the
Bank Merger is approved by the OCC, the Commissioner, and the Banking Board,
violate any law, statute, rule, or regulation of any government or agency to
which the Company or the Bank is subject and which is material to its
operations; or (c) violate any judgment, order, writ, injunction, decree, or
ruling to which the Company or the Bank or any of its properties or assets is
subject or bound. None of the execution or delivery of this Agreement, the
consummation of the transactions contemplated thereby, or the compliance with or
fulfillment of the terms thereof will require any authorization, consent,
approval, or exemption by any person which has not been obtained, or any notice
or filing which has not been given or done, other than approval of or waiver of

                                       13

<PAGE>



jurisdiction over the transactions contemplated by this Agreement by the Board
of Governors, the OCC, the Commissioner, and the Banking Board.

         6.7.  Compliance with BHC Act.

                  (a) The Company is registered as a bank holding company under
the BHC Act. All of the activities and investments of the Company conform to the
requirements applicable generally to bank holding companies under the BHC Act
and the regulations of the Board of Governors adopted thereunder.

                  (b) No corporation or other entity, other than the Company, is
registered or is required to be registered as a bank holding company under the
BHC Act by virtue of its control over the Bank or over any company that directly
or indirectly has control over the Bank.

         6.8.  Subsidiaries.

                  (a) Other than the Bank, which is a direct, wholly-owned
subsidiary of the Company, the Company does not have any direct or indirect
subsidiaries and does not directly or indirectly own, control, or hold with the
power to vote any shares of the capital stock of any company (except shares held
by the Bank for the account of others in a fiduciary or custodial capacity in
the ordinary course of its business). There are no outstanding subscriptions,
options, warrants, convertible securities, calls, commitments, or agreements
calling for or requiring the issuance, transfer, sale, or other disposition of
any shares of the capital stock of the Bank, or calling for or requiring the
issuance of any securities or rights convertible into or exchangeable for shares
of capital stock of the Bank. There are no other direct or indirect subsidiaries
of the Company which are required to be consolidated or accounted for on the
equity method in the consolidated financial statements of the Company or the
financial statements of the Bank prepared in accordance with generally accepted
accounting principles.

                  (b) Except as specified in the previous subsection, neither
the Company nor the Bank has a direct or indirect equity or ownership interest
which represents 5 percent or more of the aggregate equity or ownership interest
of any entity (including, without limitation, corporations, partnerships, and
joint ventures).

         6.9.  Capital Structure.

                  (a) The authorized capital stock of the Company consists of
(i) 100,000 shares of Company Common Stock, of which, as of the date of this
Agreement, 61,812 shares have been duly issued and are validly outstanding,
fully paid, and held by approximately 113 shareholders of record. No shares are
held in the treasury of the Company. The aforementioned shares of Company Common
Stock are the only voting securities of the Company authorized, issued, or
outstanding as of such date; and except as set forth on Schedule 6.9 hereof, no
subscriptions, warrants, options, rights, convertible securities, or similar
arrangements or commitments in respect of securities of the Company are
authorized, issued, or outstanding

                                       14

<PAGE>



which would enable the holder thereof to purchase or otherwise acquire shares of
any class of capital stock of the Company. None of the Company Common Stock is
subject to any restrictions upon the transfer thereof under the terms of the
corporate charter or bylaws of the Company.

                  (b) Schedule 6.9 hereof lists all options to purchase Company
securities currently outstanding and, for each such option, the date of
issuance, date of exercisability, exercise price, type of security for which
exercisable, and date of expiration. Schedule 6.9 hereof further lists all
shares of Company Common Stock reserved for issuance pursuant to stock option
plans, agreements, or arrangements but not yet issued and all options upon
shares of Company Common Stock designated or made available for grant but not
yet granted.

                  (c) The authorized capital stock of the Bank consists of
200,000 shares of common stock, $6.25 par value (the "Bank Common Stock"), of
which, as of the date of this Agreement, 109,023 shares have been (except as set
forth on Schedule 6.9) duly issued and are validly outstanding, fully paid, and
all of which are held of record and beneficially by the Company. The
aforementioned shares of Bank Common Stock are the only voting securities of the
Bank authorized, issued, or outstanding as of such date; and no subscriptions,
warrants, options, rights, convertible securities, or similar arrangements or
commitments in respect of securities of the Bank are authorized, issued, or
outstanding which would enable the holder thereof to purchase or otherwise
acquire shares of any class of capital stock of the Bank. None of the Bank
Common Stock is subject to any restrictions upon the transfer thereof under the
terms of the corporate charter or bylaws of the Bank.

                  (d) None of the shares of Company Common Stock or Bank Common
Stock has been issued in violation of the preemptive rights of any shareholder.

                  (e) As of the date hereof, to the knowledge of the Company and
the Bank, and except as contemplated by this Agreement, there are no shareholder
agreements, or other agreements, understandings, or commitments relating to the
right of any holder or beneficial owner of more than 1 percent of the issued and
outstanding shares of any class of the capital stock of either the Company or
the Bank to vote or to dispose of his or its shares of capital stock of that
entity.

                  (f) The Company has not granted any shareholder rights to
dissent from any merger.

         6.10. Articles of Incorporation, Bylaws, and Minute Books. The copies
of the articles of incorporation and all amendments thereto and of the bylaws,
as amended, of the Company and the Bank that have been provided to Zions Bancorp
and certified by the Company as complete and true copies are true, correct, and
complete copies thereof. The minute books of the Company and the Bank which have
been made available to Zions Bancorp for its continuing inspection until the
Effective Date contain accurate minutes of all meetings and accurate consents in
lieu of meetings of the board of directors (and any committee thereof) and of
the

                                       15

<PAGE>



shareholders of the Company and the Bank since their respective inceptions.
These minute books accurately reflect all transactions referred to in such
minutes and consents in lieu of meetings and disclose all material corporate
actions of the shareholders and boards of directors of the Company and the Bank
and all committees thereof. Except as reflected in such minute books, there are
no minutes of meetings or consents in lieu of meetings of the board of directors
(or any committee thereof) or of shareholders of the Company or the Bank.

         6.11. Books and Records. The books and records of each of the Company
and the Bank fairly reflect the transactions to which it is a party or by which
its properties are subject or bound. Such books and records have been properly
kept and maintained and are in compliance in all material respects with all
applicable legal and accounting requirements. Each of the Company and the Bank
follows generally accepted accounting principles applied on a consistent basis
(except to the extent that different accounting principles are mandated by a
bank or bank holding company regulatory agency with jurisdiction over it) in the
preparation and maintenance of its books of account and financial statements,
including but not limited to the application of the accrual method of accounting
for interest income on loans, leases, discounts, and investments, interest
expense on deposits and all other liabilities, and all other items of income and
expense. Except as set forth on Schedule 6.11, the Company and the Bank have
made all accruals in amounts which fairly report income and expense in the
proper periods in accordance with generally accepted accounting principles. Each
of the Company and the Bank has filed all material reports and returns required
by any law or regulation to be filed by it.

         6.12. Regulatory Approvals and Filings, Contracts, Commitments, etc.
The Company has made or will, no later than ten business days after the date
hereof, make available to Zions Bancorp or grant to Zions Bancorp continuing
access until the Effective Date to originals or copies of the following
documents relating to the Company and the Bank:

                  (a) All regulatory approvals received since January 1, 1992,
of the Company and the Bank relating to all bank and nonbank acquisitions or the
establishment of de novo operations;

                  (b) All employment contracts, retention contracts, deferred
compensation, non-competition, bonus, stock option, profit-sharing, pension,
retirement, consultation after retirement, incentive, insurance arrangements or
plans (including medical, disability, group life or other insurance plans), and
any other remuneration or fringe benefit arrangements applicable to employees,
officers, or directors of the Company or the Bank, accompanied by any
agreements, including trust agreements, embodying such contracts, plans, or
arrangements, and all employee manuals and memoranda relating to employment and
benefit policies and practices of any nature whatsoever (whether or not
distributed to employees or any of them), and any actuarial reports and audits
relating to such plans;

                  (c) All material contracts, agreements, leases, mortgages, and
commitments, except those entered into in the ordinary course of business, to
which the Company or the Bank

                                       16

<PAGE>



is a party or may be bound; or, if any of the same be oral, true, accurate, and
complete written summaries of all such oral contracts, agreements, leases,
mortgages, and commitments;

                  (d) All material contracts, agreements, leases, mortgages, and
commitments, whether or not entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound and which require the
consent or approval of third parties to the execution and delivery of this
Agreement or to the consummation or performance of any of the transactions
contemplated thereby, or, if any of the same be oral, true, accurate, and
complete written summaries of all such oral contracts, agreements, leases,
mortgages, and commitments;

                  (e) All deeds, leases, contracts, agreements, mortgages, and
commitments, whether or not entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound and which relate to
land, buildings, fixtures, or other real property upon or within which the
Company or the Bank operates its businesses or is authorized to operate its
businesses, or with respect to which the Company or the Bank has any application
pending for authorization to operate its businesses;

                  (f) Any pending application, including any documents or
materials related thereto, which has been filed by the Company or the Bank with
any federal or state regulatory agency with respect to the establishment of a
new office or the acquisition or establishment of any additional banking or
nonbanking subsidiary; and

                  (g) All federal, state, and local tax returns, including any
amended returns, filed by the Company or the Bank for the years 1991 through
1997, a copy of the most recent audit examination of each of the Company and the
Bank by the Internal Revenue Service ("IRS"), and a copy of all correspondence
or other documents with respect to any examination that has not yet been
resolved, a copy of the most recent state or local tax agency examination, if
any, of each of the Company and the Bank, and a copy of all correspondence or
other documents with respect to any examination that has not yet been resolved,
and all tax rulings, closing agreements, settlement agreements, or similar
documents with respect to the Company or the Bank received from or entered into
with the IRS or any other taxing authority since January 1, 1988 or that would
have continuing effect after the Effective Date.

         6.13. Financial Statements. The Company has furnished to Zions Bancorp
its unconsolidated statement of condition as of each of December 31, 1995, 1996,
and 1997, and the related unconsolidated statement of income, unconsolidated
statement of changes in financial position, and unconsolidated statement of
changes in stockholders' equity for each of the periods then ended, and the
notes thereto (collectively, the "Company Financial Statements"). Except as set
forth on Schedule 6.13, all of the Company Financial Statements, including the
related notes, (a) were prepared in accordance with generally accepted
accounting principles applied in all material respects, and (b) are in
accordance with the books and records of the Company and the Bank which have
been maintained in accordance with generally accepted accounting principles or
the requirements of bank or bank holding company regulatory authorities, as the
case may be, and (c) fairly reflect the financial position of the Company as of
such dates, and the results of

                                       17

<PAGE>



operations of the Company for the periods ended on such dates, and do not fail
to disclose any material extraordinary or out-of-period items, and (d) reflect,
in accordance with generally accepted accounting principles applied in all
material respects, adequate provision for, or reserves against, the possible
loan losses of the Company as of such dates.

         6.14.  Call Reports; Bank Holding Company Reports.

                  (a) The Bank has made available to Zions Bancorp its
Consolidated Reports of Condition and Consolidated Reports of Income for the
calendar quarters dated March 31, 1995 and thereafter. All of such Consolidated
Reports of Condition and Consolidated Reports of Income, including the related
schedules and memorandum items, were prepared in accordance with generally
accepted accounting principles applied in all material respects or, to the
extent different from generally accepted accounting principles, accounting
principles mandated by the applicable instructions to such Consolidated Reports
of Condition or Consolidated Reports of Income.

                  (b) Other than the addition of $500,000 to the allowance for
loan and lease losses of the Bank to be made as of December 31, 1997, no
adjustments are required to be made to the equity capital account of the Bank as
reported on any of the Consolidated Reports of Condition referred to in
Subsection 6.14(a) hereof, in any material amount, in order to conform such
equity capital account to equity capital as would be determined in accordance
with generally accepted accounting principles as of such date.

                  (c) The Company has furnished to Zions Bancorp (i) its annual
report on Form FR Y-6 as filed with the Board of Governors as of December 31,
1997, and (ii) its semiannual report on Form FR Y-9SP as filed with the Board of
Governors as of December 31, 1997.

         6.15. Absence of Undisclosed Liabilities. At December 31, 1997, neither
the Company nor the Bank had any obligation or liability of any nature (whether
absolute, accrued, contingent, or otherwise, and whether due or to become due)
which was material, or which when combined with all similar obligations or
liabilities would have been material, to the Company, except (a) as disclosed in
the Company Financial Statements, or (b) as set forth on Schedule 6.15 hereof,
or (c) for unfunded loan commitments made by the Company or the Bank in the
ordinary course of their business consistent with past practice. The amounts set
up as current liabilities for taxes in the Company Financial Statements are
sufficient for the payment of all taxes (including, without limitation, federal,
state, local, and foreign excise, franchise, property, payroll, income, capital
stock, and sales and use taxes and any interest, penalties, or additions to tax
with respect thereto ("Tax" or "Taxes")) accrued in accordance with generally
accepted accounting principles and unpaid at December 31, 1997. Since December
31, 1997, neither the Company nor the Bank has incurred or paid any obligation
or liability that would be material (on a consolidated basis) to the Company,
except (x) for obligations incurred or paid in connection with transactions by
it in the ordinary course of its business consistent with past practices, or (y)
as set forth on Schedule 6.15 hereof, or (z) as expressly contemplated herein.

                                       18

<PAGE>



         6.16. Absence of Certain Developments. Since December 31, 1997, except
as set forth on Schedule 6.16 hereof, there has been (a) no material adverse
change in the condition, financial or otherwise, or to the assets, properties,
liabilities, or businesses of the Company and the Bank, (b) no material
deterioration in the quality of the consolidated loan portfolio of the Company,
and no material increase in the consolidated level of nonperforming assets or
non-accrual loans at the Company or in the level of its consolidated provision
for credit losses or its consolidated reserve for possible credit losses; (c) no
declaration, setting aside, or payment by the Company or the Bank of any regular
dividend, special dividend, or other distribution with respect to any class of
capital stock of the Company or the Bank; (d) no repurchase by the Company of
any of its capital stock; (e) no material loss, destruction, or damage to any
material property of the Company or the Bank, which loss, destruction, or damage
is not covered by insurance; and (f) no material acquisition or disposition of
any asset, nor any material contract outside the ordinary course of business
entered into by the Company or the Bank nor any substantial amendment or
termination of any material contract outside the ordinary course of business to
which the Company or the Bank is a party, nor any other transaction by the
Company or the Bank involving an amount in excess of $25,000 other than for fair
value in the ordinary course of its business. Since December 31, 1997, except as
set forth on Schedule 6.16 hereof, (x) each of the Company and the Bank has
conducted its business only in the ordinary course of such business and
consistent with past practice; (y) the Company, on a consolidated basis, has
maintained the quality of its loan portfolio at a level not materially lower
than the level of quality that existed at December 31, 1997; and (z) the
Company, on a consolidated basis, has administered its investment portfolio
pursuant to essentially the same policies and procedures as existed during 1996
and 1997, and has taken no action to lengthen the average maturity of the
investment portfolio, or of any significant category thereof, to any material
extent.

         6.17. Reserve for Possible Credit Losses. The Company's consolidated
reserve for possible credit losses is adequate to absorb reasonably anticipated
losses in the consolidated loan and lease portfolios of the Company. Management
periodically reevaluates the adequacy of such reserve based on portfolio
performance, current economic conditions, and such other factors as in its
judgment are necessary to determine the adequacy of the reserve.

         6.18.  Tax Matters.

                  (a) Except as set forth on Schedule 6.18 hereof, all Tax
returns and reports required to be filed by or on behalf of the Company or the
Bank have been timely filed with the appropriate governmental agencies in all
jurisdictions in which such returns and reports are required to be filed, or
requests for extensions have been timely filed, granted, and have not expired
for periods ending on or before December 31, 1996, and all returns filed are
complete and accurate and properly reflect its Taxes for the periods covered
thereby. All Taxes shown or required to be shown on filed returns have been
paid. As of the date hereof, there is no audit examination, deficiency, or
refund litigation or tax claim or any notice of assessment or proposed
assessment by the IRS or any other taxing authority, or any other matter in
controversy with respect to any Taxes that might result in a determination
adverse to the Company or the Bank,

                                       19

<PAGE>



except as reserved against in the Company Financial Statements. All Taxes due
with respect to completed and settled examinations or concluded litigation have
been properly accrued or paid.

                  (b) Neither the Company nor the Bank has executed an extension
or waiver of any statute of limitations on the assessment or collection of any
Tax due that is currently in effect.

                  (c) To the extent any Taxes are due from, but have not yet
been paid by, the Company or the Bank for the period or periods beginning
January 1, 1997 or thereafter through and including the Effective Date, adequate
provision on an estimated basis has been made for the payment of such taxes by
establishment of appropriate tax liability accounts on the monthly financial
statements of the Company.

                  (d) Except as set forth on Schedule 6.18 hereof, deferred
Taxes of the Company and the Bank have been provided for in accordance with
generally accepted accounting principles as in effect on the date of this
Agreement.

                  (e) The deductions of the Bank for bad debts taken and the
reserve of the Bank for loan losses for federal income tax purposes at December
31, 1997, were not greater than the maximum amount permitted under the
provisions of section 585 of the Code.

                  (f) Other than liens arising by operation of law with respect
to taxes assessed and not yet due and payable, there are no tax liens on any of
the properties or assets of the Company or the Bank.

                  (g) The Company and the Bank (A) have timely filed all
information returns or reports required to be filed with respect to Taxes,
including but not limited to those required by sections 6041, 6041A, 6042, 6045,
6049, 6050H, and 6050J of the Code, (B) have properly and timely provided to all
persons, other than taxing authorities, all information reports or other
documents (for example, Form 1099s, Form W-2s, and so forth) required to be
provided to such persons under applicable law, and (C) have exercised due
diligence in obtaining certified taxpayer identification numbers as required
under applicable law.

                  (h) The taxable year end of the Company for federal income tax
purposes is, and since the inception of the Company has continuously been,
December 31.

                  (i) The Company and the Bank have in all material respects
satisfied all federal, state, local, and foreign withholding tax requirements
including but not limited to income, social security, and employment tax
withholding.

                  (j) Neither the Company nor the Bank (A) is, or has been, a
member of a group filing a consolidated, combined, or unitary tax return, other
than a group the common parent of which is or was the Company, or (B) has any
liability for the Taxes of any person

                                       20

<PAGE>



(other than the Company and the Bank) under Treas. Reg. Sec. 1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.

         6.19. Consolidated Net Worth. The consolidated net worth of the Company
on the date of this Agreement, as determined in accordance with generally
accepted accounting principles, is not less than $8,086,000.

         6.20. Examinations. To the extent consistent with law, the Company has
heretofore disclosed to Zions Bancorp relevant information contained in the most
recent safety-and-soundness, compliance, Community Reinvestment Act, and other
Reports of Examination with respect to the Company issued by the Board of
Governors and the most recent safety-and-soundness, compliance, Community
Reinvestment Act, and other Reports of Examination with respect to the Bank
issued by each of the Banking Board and the FDIC. Such information so disclosed
consists of all material information with respect to the financial, operational,
and legal condition of the entity under examination which is included in such
reports, and does not omit or will not omit any information necessary to make
the information disclosed not misleading.

         6.21. Reports. Since January 1, 1994, each of the Company and the Bank
has effected all registrations and filed all reports and statements, together
with any amendments required to be made with respect thereto, which it was
required to effect or file with (a) the Board of Governors, (b) the Federal
Reserve Bank of Kansas City, (c) the FDIC, (d) the United States Department of
the Treasury, (e) the Colorado Division of Banking; (f) the Banking Board, and
(g) any other governmental or regulatory authority or agency having jurisdiction
over its operations. Each of such registrations, reports, and documents,
including the financial statements, exhibits, and schedules thereto, does not
contain any statement which, at the time and in the light of the circumstances
under which it was made, is false or misleading with respect to any material
fact or which omits to state any material fact necessary in order to make the
statements contained therein not false or misleading.

         6.22. FIRA Compliance and Other Transactions with Affiliates. Except as
set forth on Schedule 6.22 hereof, (a) none of the officers, directors, or
beneficial holders of 5 percent or more of the common stock of the Company or
the Bank and no person "controlled" (as that term is defined in the Financial
Institutions Regulatory and Interest Rate Control Act of 1978) by the Company or
the Bank (collectively, "Insiders") has any ongoing material transaction with
the Company or the Bank on the date of this Agreement; and (b) no Insider has
any ownership interest in any business, corporate or otherwise, which is a party
to, or in any property which is the subject of, business arrangements or
relationships of any kind with the Company or the Bank not in the ordinary
course of business. All other extensions of credit by the Company or the Bank to
any Insider are set forth on Schedule 6.22 hereof.

         6.23. SEC Registered Securities. No equity or debt securities of the
Company or the Bank are registered or required to be registered under the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act").


                                       21

<PAGE>



         6.24. Legal Proceedings. Except as disclosed in the Company Financial
Statements or as set forth on Schedule 6.24 hereof, there is no claim, action,
suit, arbitration, investigation, or other proceeding pending before any court,
governmental agency, authority or commission, arbitrator, or "impartial
mediator" (of which the Company or the Bank has been served with process or
otherwise been given notice) or, to the knowledge of the Company and the Bank,
threatened or contemplated against or affecting it or its property, assets,
interests, or rights, or any basis therefor of which notice has been given,
which, if adversely determined, would have a material adverse effect (financial
or otherwise) on the business, operating results, or financial condition of the
Company or which otherwise could prevent, hinder, or delay consummation of the
transactions contemplated by this Agreement.

         6.25. Absence of Governmental Proceedings. Except as set forth on
Schedule 6.25 hereof, neither the Company nor the Bank is a party defendant or
respondent to any pending legal, equitable, or other proceeding commenced by any
governmental agency (of which the Company or the Bank has been served with
process or otherwise been given notice) and, to the knowledge of the Company and
the Bank, no such proceeding is threatened.

         6.26.  Federal Deposit Insurance.

                  (a) The deposits held by the Bank are insured within statutory
limits by the Bank Insurance Fund of the FDIC pursuant to the provisions of the
Federal Deposit Insurance Act, as amended (12 U.S.C. ss. 1811 et seq.), and the
Bank has paid all assessments and filed all related reports and statements
required under the Federal Deposit Insurance Act.

                  (b) The Bank is a member of and pays insurance assessments to
the Bank Insurance Fund of the FDIC ("BIF"), and its deposits are insured by the
BIF. None of the deposits of the Bank are insured by the Savings Association
Insurance Fund of the FDIC ("SAIF"), and the Bank pays no insurance assessments
to the SAIF.

         6.27. Other Insurance. Each of the Company and the Bank carries
insurance with reputable insurers, including blanket bond coverage, in such
amounts as are reasonable to cover such risks as are customary in relation to
the character and location of its properties and the nature of its businesses.
All such policies of insurance are in full force and effect, and no notice of
cancellation has been received. All premiums to date have been paid in full.
Neither the Company nor the Bank is in default with respect to any such policy
which is material to it.

         6.28. Labor Matters. Neither the Company nor the Bank is a party to or
bound by any collective bargaining contracts with respect to any employees of
the Company or the Bank. Since their respective inceptions there has not been,
nor to the knowledge of the Company and the Bank was there or is there
threatened, any strike, slowdown, picketing, or work stoppage by any union or
other group of employees against the Company or the Bank or any of its premises,
or any other labor trouble or other occurrence, event, or condition of a similar
character. As of the date hereof, neither the Company nor the Bank is aware of
any attempts to organize a collective bargaining unit to represent any of its
employee groups.

                                       22

<PAGE>



         6.29.  Employee Benefit Plans.

                  (a) Schedule 6.29 hereto contains a list or brief descriptions
of all pension, retirement, stock purchase, stock bonus, stock ownership, stock
option, performance share, stock appreciation right, phantom stock, savings, or
profit-sharing plans, any employment, deferred compensation, consultant, bonus,
or collective bargaining agreement, or group insurance contract or any other
incentive, welfare, life insurance, death or survivor's benefit, health
insurance, sickness, disability, medical, surgical, hospital, severance, layoff
or vacation plans, contracts, and arrangements or employee benefit plans or
agreements sponsored, maintained, or contributed to by the Company or the Bank
for the employees or former employees of the Company or the Bank. The Company
has previously made available and will continue to make available to Zions
Bancorp for its continuing review until the Effective Date true, complete, and
accurate copies of all plans and arrangements listed on Schedule 6.29, together
with (i) the most recent actuarial and financial report prepared with respect to
any such plans which constitute "qualified plans" under section 401(a) of the
Code, and (ii) the most recent annual reports, if any, filed with any government
agency and all IRS rulings and determination letters and any open requests for
such rulings and letters that pertain to any such plan.

                  (b) Except for liabilities to the Pension Benefit Guaranty
Corporation ("PBGC") pursuant to section 4007 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), all of which have been fully paid,
and except for liabilities to the IRS under section 4971 of the Code, all of
which have been fully paid, neither the Company nor the Bank has any liability
with respect to any pension plan qualified under section 401 of the Code.
Neither the Company nor the Bank sponsors or maintains any defined benefit plan
or has ever sponsored or maintained any defined benefit plan.

                  (c) All "employee benefit plans," as defined in section 3(3)
of ERISA, that cover one or more employees employed by the Company or the Bank
(each individually a "Plan" and collectively the "Plans"), comply in all
material respects with ERISA and, where applicable for tax-qualified or
tax-favored treatment, with the Code. As of December 31, 1997, neither the
Company nor the Bank had any material liability under any Plan which is not
reflected on the Company Financial Statements as of such date (other than such
normally unrecorded liabilities under the Plans for sick leave, holiday,
education, bonus, vacation, incentive compensation, and anniversary awards,
provided that such liabilities are not in any event material). None of the
Plans, the Company, the Bank, nor any trustee or administrator of the Plans has
ever engaged in a "prohibited transaction" with respect to the Plans within the
meaning of section 406 of ERISA or, where applicable, section 4975 of the Code
for which no exemption is applicable, nor have there been any "reportable
events" within section 4043 of ERISA for which the thirty-day notice therefor
has not been waived. Neither the Company nor the Bank has incurred any liability
under section 4201 of ERISA for a complete or partial withdrawal from a
multi-employer plan.

                  (d) No action, claim, or demand of any kind has been brought
or threatened by any potential claimant or representative of such a claimant
under any plan, contract, or arrangement referred to in Subsection (a) of this
section, where the Company or the Bank may be

                                       23

<PAGE>



either (i) liable directly on such action, claim, or demand; or (ii) obligated
to indemnify any person, group of persons, or entity with respect to such
action, claim, or demand which is not fully covered by insurance maintained with
reputable, responsible financial insurers or by a self-insured plan.

         6.30. Employee Relations. As of the date hereof, each of the Company
and the Bank is, to its knowledge, in compliance in all material respects with
all federal and state laws, regulations, and orders respecting employment and
employment practices (including Title VII of the Civil Rights Act of 1964),
terms and conditions of employment, and wages and hours; and neither the Company
nor the Bank is engaged in any unfair labor practice. As of the date hereof,
except as set forth on Schedule 6.30 hereof, no dispute exists between the
Company or the Bank and any of its employee groups regarding any employee
organization, wages, hours, or conditions of employment which would materially
interfere with the business or operations of the Company or the Bank.

         6.31. Fiduciary Activities. The Bank is duly qualified and registered
and in good standing in accordance with the laws of each jurisdiction in which
it is required to so qualify or register as a result of or in connection with
its fiduciary or custodial activities as conducted as of the date hereof. The
Bank is duly registered under and in compliance with all requirements of the
federal Investment Advisers Act of 1940 as amended, or is exempt from
registration thereunder and from compliance with the requirements thereof.
Since January 1, 1994, the Bank has conducted, and currently is conducting, all
fiduciary and custodial activities in all material respects in accordance with
all applicable law.

         6.32.  Environmental Liability.

                  (a) Except as set forth on Schedule 6.32 hereof, neither the
Company nor the Bank is in material violation of any judgment, decree, order,
law, license, rule or regulation pertaining to environmental matters, including
those arising under the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, the
Federal Water Pollution Control Act, the Federal Clean Air Act, the Toxic
Substances Control Act or any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the environment ("Environmental
Laws").

                  (b) Except as set forth on Schedule 6.32 hereof, neither the
Company, the Bank, nor, to the knowledge of either of them, any borrower of the
Company or of the Bank has received notice that it has been identified by the
United States Environmental Protection Agency as a potentially responsible party
under CERCLA with respect to a site listed on the National Priorities List, 40
C.F.R. Part 300 Appendix B, nor has the Company or the Bank or, to the knowledge
of either of them, any borrower of the Company or of the Bank received any
notification that any hazardous waste, as defined by 42 U.S.C. ss. 6903(5), any
hazardous substances, as defined by 42 U.S.C. ss. 9601(14), any "pollutant or
contaminant," as defined by 42 U.S.C. ss. 9601(33), or any toxic substance,
hazardous materials, oil, or other chemicals or substances

                                       24

<PAGE>



regulated by any Environmental Laws ("Hazardous Substances") that it has
disposed of has been found at any site at which a federal or state agency is
conducting a remedial investigation or other action pursuant to any
Environmental Law.

                  (c) No portion of any real property at any time owned or
leased by the Company or the Bank (collectively, the "Company Real Estate") has
been used by the Company or the Bank for the handling, processing, storage or
disposal of Hazardous Substances in a manner which violates any Environmental
Laws and, to the knowledge of the Company and the Bank, no underground tank or
other underground storage receptacle for Hazardous Substances is located on any
of the Company Real Estate. In the course of its activities, neither the Company
nor the Bank has generated or is generating any hazardous waste on any of the
Company Real Estate in a manner which violates any Environmental Laws. There has
been no past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping (collectively, a "Release") of Hazardous Substances by the Company or
the Bank on, upon, or into any of the Company Real Estate. In addition, to the
knowledge of the Company and the Bank, except as set forth on Schedule 6.32
hereof, there have been no such Releases on, upon, or into any real property in
the vicinity of any of the Company Real Estate that, through soil or groundwater
contamination, may be located on any of such Company Real Estate.

                  (d) With respect to any real property at any time held as
collateral for any outstanding loan by the Company or the Bank (collectively,
the "Collateral Real Estate"), except as set forth on Schedule 6.32 hereof,
neither the Company nor the Bank has since January 1, 1988 received notice from
any borrower thereof or third party, and has no knowledge, that such borrower
has generated or is generating any hazardous waste on any of the Collateral Real
Estate in a manner which violates any Environmental Laws or that there has been
any Release of Hazardous Substances by such borrower on, upon, or into any of
the Collateral Real Estate, or that there has been any Release on, upon, or into
any real property in the vicinity of any of the Collateral Real Estate that,
through soil or groundwater contamination, may be located on any of such
Collateral Real Estate.

                  (e) As used in this Section 6.32, each of the terms "Company"
and "Bank" includes the applicable entity and any partnership or joint venture
in which it has an interest.

         6.33. Intangible Property. To the knowledge of the Company and the
Bank, each of the Company and the Bank owns or possesses the right, free of the
claims of any third party, to use all material trademarks, service marks, trade
names, copyrights, patents, and licenses currently used by it in the conduct of
its business. To the knowledge of the Company and the Bank, no material product
or service offered and no material trademark, service mark, or similar right
used by the Company or the Bank infringes any rights of any other person, and,
as of the date hereof, neither the Company nor the Bank has received any written
or oral notice of any claim of such infringement.


                                       25

<PAGE>



         6.34. Real and Personal Property. Except for property and assets
disposed of in the ordinary course of business, each of the Company and the Bank
possesses good and marketable title to and owns, free and clear of any mortgage,
pledge, lien, charge, or other encumbrance or other third party interest of any
nature whatsoever which would materially interfere with the business or
operations of either the Company or the Bank, its real and personal property and
other assets, including without limitation those properties and assets reflected
in the Company Financial Statements as of December 31, 1997, or acquired by the
Company or the Bank subsequent to the date thereof. The leases pursuant to which
the Company and the Bank lease real or personal property are valid and effective
in accordance with their respective terms; and there is not, under any such
lease, any material existing default or any event which, with the giving of
notice or lapse of time or otherwise, would constitute a material default. The
real and personal property leased by either the Company or the Bank is free from
any adverse claim which would materially interfere with its business or
operation taken as a whole. The material properties and equipment owned or
leased by the Company and the Bank are in normal operating condition, free from
any known defects, except such minor defects as do not materially interfere with
the continued use thereof in the conduct of its normal operations.

         6.35.  Loans, Leases, and Discounts.

                  (a) To the knowledge of the Company and the Bank, each loan,
lease, and discount reflected as an asset of the Company or the Bank in the
Company Financial Statements as of December 31, 1997, or acquired since that
date, is the legal, valid, and binding obligation of the obligor named therein,
enforceable in accordance with its terms; and, to the knowledge of the Company
and the Bank, no loan, lease, or discount having an unpaid balance (principal
and accrued interest) in excess of $25,000 is subject to any asserted defense,
offset, or counterclaim.

                  (b) Except as set forth on Schedule 6.35 hereof, neither the
Company nor the Bank holds any loans or loan-participation interests purchased
from, or participates in any loans originated by, any person other than the
Company or the Bank.

         6.36. Material Contracts. Neither the Company nor the Bank nor any of
the assets, businesses, or operations of either of them is as of the date hereof
a party to, or is bound or affected by, or receives benefits under any material
agreement, arrangement, or commitment not cancelable by it without penalty,
other than (a) the agreements set forth on Schedule 6.36 hereof, and (b)
agreements, arrangements, or commitments entered into in the ordinary course of
its business consistent with past practice, or, if there has been no past
practice, consistent with prudent banking practices.

         6.37. Employment and Severance Arrangements. Schedule 6.37 hereof sets
forth

                  (a) all employment contracts granted by the Company or the
Bank to any of its officers, directors, shareholders, consultants, or other
management officials and any officer, director, shareholder, consultant, or
management official of any affiliate providing for increased or accelerated
compensation in the event of a change of control with respect to the Company or

                                       26

<PAGE>



the Bank or any other event affecting the ownership, control, or management of
the Company or the Bank; and

                  (b) all employment and severance contracts, agreements, and
arrangements between the Company or the Bank and any officer, director,
consultant, or other management official of any of them.

         6.38. Material Contract Defaults. All material contracts, agreements,
leases, mortgages, or commitments referred to in Section 6.12(c) hereof are
valid and in full force and effect on the date hereof. As of the date of this
Agreement and as of the Effective Date, neither the Company nor the Bank is or
will be in default in any material respect under any material contract,
agreement, commitment, arrangement, lease, insurance policy, or other instrument
to which it is a party or by which its assets, business, or operations may be
bound or affected or under which it or its assets, business, or operations
receive benefits; and there has not occurred any event that with the lapse of
time or the giving of notice or both would constitute such a default.

         6.39. Capital Expenditures. Except as set forth on Schedule 6.39
hereof, neither the Company nor the Bank has any outstanding commitments in the
nature of capital expenditures which in the aggregate exceed $25,000.

         6.40. Repurchase Agreements. With respect to all agreements pursuant to
which the Company or the Bank has purchased securities subject to an agreement
to resell, it has a valid, perfected first lien or security interest in the
securities securing the agreement, and the value of the collateral securing each
such agreement equals or exceeds the amount of the debt secured by such
collateral under such agreement.

         6.41. Internal Controls. Each of the Company and the Bank maintains
internal controls to provide reasonable assurance to its board of directors and
officers that its assets are safeguarded, its records and reports are prepared
in compliance with all applicable legal and accounting requirements and with its
internal policies and practices, and applicable federal, state, and local laws
and regulations are complied with. These controls extend to the preparation of
its financial statements to provide reasonable assurance that the statements are
presented fairly in conformity with generally accepted accounting principles or,
in the case of the Bank and to the extent different from generally accepted
accounting principles, accounting principles mandated by the FDIC. The controls
contain self-monitoring mechanisms, and appropriate actions are taken on
significant deficiencies as they are identified.

         6.42. Dividends. Neither the Company nor the Bank has paid any dividend
to its shareholders which caused its regulatory capital to be less than the
amount then required by applicable law, or which exceeded any other limitation
on the payment of dividends imposed by law, agreement, or regulatory policy.

         6.43. Brokers and Advisers. There are no claims for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
act of the Company or the Bank in

                                       27

<PAGE>



connection with the transactions contemplated by this Agreement or based upon
any agreement or arrangement made by or on behalf of the Company or the Bank.
Neither the Company nor the Bank has entered into any agreement or understanding
with any party relating to financial advisory services provided or to be
provided with respect to the transactions contemplated by this Agreement.

         6.44.  Interest Rate Risk Management Instruments.

                  (a) Schedule 6.44 contains a true, correct, and complete list
of all interest-rate swaps, caps, floors, and options agreements and other
interest-rate risk management arrangements to which the Company or the Bank is
a party or by which any of its properties or assets may be bound.

                  (b) All interest rate swaps, caps, floors, and option
agreements and other interest rate risk management arrangements to which the
Company or the Bank is a party or by which any of its properties or assets may
be bound were entered into in the ordinary course of its business and, to its
knowledge, in accordance with prudent banking practice and applicable rules,
regulations, and regulatory policies and with counterparties believed to be
financially responsible at the time and are legal, valid, and binding
obligations enforceable in accordance with their terms (except as may be limited
by bankruptcy, insolvency, moratorium, reorganization, or similar laws affecting
the rights of creditors generally and the availability of equitable remedies),
and are in full force and effect. The Company and the Bank have duly performed
in all material respects of all of their respective obligations thereunder to
the extent that such obligations to perform have accrued; and to the knowledge
of the Company and the Bank, there are no breaches, violations or defaults or
allegations or assertions of such by any party thereunder.

         6.45. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by the Company or the Bank
hereunder or in connection with this Agreement or any of the transactions
contemplated thereunder contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein, in light of the circumstances under which they were made, not
misleading. There is no fact known to the Company which reasonably might
materially adversely affect the business, assets, liabilities, financial
condition, results of operations, or prospects of the Company or the Bank which
has not been disclosed in the Company Financial Statements or a certificate
delivered to Zions Bancorp by the Company. Copies of all documents referred to
in this Agreement, unless prepared solely by Zions Bancorp, Val Cor, or BCNA or
solely by Zions Bancorp, Val Cor, or BCNA and third parties hereto, are true,
correct, and complete copies thereof and include all amendments, supplements,
and modifications thereto and all waivers thereunder.

        6.46. Regulatory and Other Approvals. As of the date hereof, except as
set forth on Schedule 6.46 hereof, neither the Company nor the Bank is aware of
any reason why all material consents and approvals shall not be procured from
all regulatory agencies having jurisdiction over the transactions contemplated
by this Agreement, as shall be necessary for (a) consummation of the
transactions contemplated by this Agreement, and (b) the continuation after the

                                       28

<PAGE>



Effective Date of the business of the Company and the Bank as such business is
carried on immediately prior to the Effective Date, free of any conditions or
requirements which, in the reasonable opinion of the Company, could have a
material adverse effect upon the business, operations, activities, earnings, or
prospects of the Company. As of the date hereof, neither the Company nor the
Bank is aware of any reason why all material consents and approvals shall not be
procured from all other persons and entities whose consent or approval shall be
necessary for (y) consummation of the transactions contemplated by this
Agreement, or (z) the continuation after the Effective Date of the business of
the Company and the Bank as such business is carried on immediately prior to the
Effective Date.


7. Covenants of the Company and the Bank.

         The Company (on behalf of itself and the Bank) and the Bank (on behalf
of itself) each hereby covenant and agree as follows:

         7.1. Rights of Access. In addition and not in limitation of any other
rights of access provided to Zions Bancorp, Val Cor, and BCNA herein, until the
Effective Date the Company and the Bank will:

                  (a) give to Zions Bancorp, Val Cor, and BCNA and to their
representatives, including KPMG, full access during normal business hours to all
of the property, documents, contracts, books, and records of the Company and the
Bank, and such information with respect to their business affairs and properties
as Zions Bancorp, Val Cor, or BCNA from time to time may reasonably request,
provided that until the transactions contemplated by this Agreement have been
announced to the public, all such access shall be coordinated with management of
the Company in an effort to safeguard the confidentiality of the transactions
contemplated by this Agreement; and

                  (b) ensure that KPMG is given full access to such of the audit
work papers and auditing personnel of Fortner, Bayens, Levkulich and Co., the
independent auditors of the Company and the Bank, as KPMG from time to time may
reasonably request, in order to permit KPMG to review the procedures employed
and conclusions reached in the course of the performance of the consolidated
audit of the Company to be performed by Fortner, Bayens, Levkulich and Co. as of
December 31, 1997.

         7.2.  Corporate Records, Contracts, etc.

                  (a) The Company and the Bank will make available to Zions
Bancorp, Val Cor, and BCNA copies of their respective articles of incorporation
and bylaws, and will make available their respective minute books, all of which
shall be certified to be complete and true copies.


                                       29

<PAGE>



                  (b) The Company and the Bank will make available a copy of
each contract or agreement to which the Company or the Bank is a party and which
requires one or more payments by the Company or the Bank in excess of $25,000
in the aggregate to which the Company or the Bank is a party, including but not
limited to data processing contracts, service contracts, contracts to purchase
or lease real property or equipment, guaranties, employment contracts, and
insurance contracts pertaining to fire, accident, indemnity, fidelity, health,
life, hospitalization, or other employee benefits.

                  (c) The Company and the Bank will furnish to Zions Bancorp,
Val Cor, and BCNA the following information with respect to properties owned by
the Company and the Bank: (i) a brief description and location of each parcel of
real property owned by the Company or the Bank, (ii) a brief description of real
property covered by lease or other rental arrangements to which the Company or
the Bank is a party, including a copy of the relevant leases; and (iii) a brief
description of personal property with a value in excess of $25,000 covered by
lease or other rental arrangements to which the Company or the Bank is a party,
including a copy of the relevant leases.

         7.3. Monthly and Quarterly Financial Statements; Minutes of Meetings
and Other Materials.

                  (a) The Company and the Bank will continue to prepare all of
the monthly and quarterly financial statements and financial reports to
regulatory authorities for the months and quarterly periods ending between
January 1, 1998 and the Effective Date which it customarily prepared during the
period between January 1, 1995 and December 31, 1997 and shall promptly provide
Zions Bancorp with copies of all such financial statements and reports. Such
financial statements and reports shall be verified by the chief financial
officer of the reporting entity. All of such financial statements and reports,
including the related notes, schedules, and memorandum items, will have been
prepared in accordance with generally accepted accounting principles applied in
all material respects (except to the extent that different accounting principles
are mandated by a bank or bank holding company regulatory agency with
jurisdiction over the Company or the Bank, as the case may be).

                  (b) The Company will provide to Zions Bancorp, as promptly as
practicable, consolidated financial statements of the Company and the Bank as of
and for the year ended December 31, 1997, audited by Fortner, Bayens, Levkulich
and Co. The Company and the Bank shall promptly provide Zions Bancorp with (i)
copies of all of its periodic reports to directors and to shareholders, whether
or not such reports were prepared or distributed in connection with a meeting of
the board of directors or a meeting of the shareholders, prepared or distributed
between the date of this Agreement and the Effective Date, and (ii) complete
copies of all minutes of meetings of its board of directors and shareholders
which meetings take place between the date of this Agreement and the Effective
Date, certified by the secretary or cashier or an assistant secretary or
assistant cashier of the Company or the Bank, as the case may be.


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<PAGE>



         7.4. Extraordinary Transactions. Without the prior written consent of
Zions Bancorp, neither the Company nor the Bank will, on or after the date of
this Agreement: (a) declare or pay any cash dividends or property dividends with
respect to any class of its capital stock; (b) declare or distribute any stock
dividend, authorize a stock split, or authorize, issue or make any distribution
of its capital stock or any other securities (except for issuances of Company
Common Stock upon exercise of stock options outstanding on the date of this
Agreement), or grant any options to acquire such additional securities; (c)
merge into, consolidate with, or sell its assets to any other corporation or
person, or enter into any other transaction or agree to effect any other
transaction not in the ordinary course of its business except as explicitly
contemplated herein, or engage in any discussions concerning such a possible
transaction except as explicitly contemplated herein; (d) convert the charter or
form of entity of the Bank from that in existence on the date of this Agreement
to any other charter or form of entity; (e) make any direct or indirect
redemption, purchase, or other acquisition of any of its capital stock; (f)
except in the ordinary course of its business or to accomplish the transactions
contemplated by this Agreement, incur any liability or obligation, make any
commitment or disbursement, acquire or dispose of any property or asset, make
any contract or agreement, pay or become obligated to pay any legal, accounting,
or miscellaneous other expense, or engage in any transaction; (g) other than in
the ordinary course of business, subject any of its properties or assets to any
lien, claim, charge, option, or encumbrance; (h) except for increases in the
ordinary course of business in accordance with past practices, which together
with all other compensation rate increases do not exceed 4.5 percent per annum
of the aggregate payroll as of January 1, 1998, increase the rate of
compensation of any employee or enter into any agreement to increase the rate of
compensation of any employee; (i) except as otherwise required by law, create or
modify any pension or profit sharing plan, bonus, deferred compensation, death
benefit, or retirement plan, or the level of benefits under any such plan, nor
increase or decrease any severance or termination pay benefit or any other
fringe benefit; (j) enter into any employment or personal services contract with
any person or firm, including without limitation any contract, agreement, or
arrangement described in Section 6.37(a) hereof, except directly to facilitate
the transactions contemplated by this Agreement; nor (k) purchase any loans or
loan-participation interests from, or participate in any loans originated by,
any person other than the Company or the Bank.

         7.5. Preservation of Business. Each of the Company and the Bank will
(a) carry on its business and manage its assets and properties diligently and
substantially in the same manner as heretofore; (b) maintain the ratio of its
loans to its deposits at approximately the same level as existed at December 31,
1997, as adjusted to allow for seasonal fluctuations of loans and deposits of a
kind and amount experienced traditionally by it; (c) manage its investment
portfolio in substantially the same manner and pursuant to substantially the
same investment policies as in 1996 and 1997, and will take no action to change
the percentage which its investment portfolio bears to its total assets, or to
lengthen the average maturity of its investment portfolio, or of any significant
category thereof, to any material extent; (d) continue in effect its present
insurance coverage on all properties, assets, business, and personnel; (e) use
its best efforts to preserve its business organization intact; except as
otherwise consented to by Zions Bancorp, to keep available its present
employees; and to preserve its present relationships with customers and others
having business dealings with it; (f) not do anything and not fail to do
anything which will

                                       31

<PAGE>



cause a breach of or default in any contract, agreement, commitment, or
obligation to which it is a party or by which it may be bound; (g) not amend its
articles of incorporation or bylaws; and (h) not grant or expand any
shareholders' rights to dissent from any merger.

         7.6. Comfort Letter. At the time of the effectiveness of the
Registration Statement, but prior to the mailing of the proxy materials, and at
the Effective Date, the Company shall furnish Zions Bancorp with a letter from
Fortner, Bayens, Levkulich and Co., its independent auditors, in form and
substance acceptable to Zions Bancorp, stating that (a) they are independent
accountants with respect to the Company within the meaning of the 1933 Act and
the published rules and regulations thereunder, (b) in their opinion the
consolidated financial statements of the Company included in the Registration
Statement and examined by them comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the published rules
and regulations thereunder, and (c) a reading of the Company's audited
consolidated financial statements and the latest available unaudited
consolidated financial statements of the Company and unaudited financial
statements of the Bank and inquiries of certain officials of the Company and the
Bank responsible for financial and accounting matters as to transactions and
events since the date of the most recent consolidated statement of condition
included in their most recent audit report with respect to the Company did not
cause them to believe that (i) the Company's audited consolidated financial
statements and such latest available unaudited consolidated financial
statements are not stated on a basis consistent with that followed in the
Company's audited consolidated financial statements; or (ii) except as disclosed
in the letter, at a specified date not more than five business days prior to the
date of such letter, there was any change in the Company's capital stock or any
change in consolidated long-term debt or any decrease in the consolidated net
assets of the Company as compared with the respective amounts shown in the most
recent Company audited consolidated financial statements. The letter shall also
cover such other matters pertaining to the Company's and the Bank's financial
data and statistical information included in the Registration Statement as may
reasonably be requested by Zions Bancorp.

         7.7. Affiliates' Agreements. The Company will furnish to Zions Bancorp
a list of all persons known to the Company who at the date of the Company's
special meeting of shareholders to vote upon the transactions contemplated by
this Agreement may be deemed to be "affiliates" of the Company within the
meaning of Rule 145 under the 1933 Act and for purposes of qualifying the
Holding Company Merger for "pooling of interests" accounting treatment. The
Company will use its best efforts to cause each such "affiliate" of the Company
to deliver to Zions Bancorp not later than thirty days prior to the Effective
Date a written agreement providing that such person will not sell, pledge,
transfer or otherwise dispose of (a) the shares of Company Common Stock
beneficially owned by such person, or the shares of Zions Bancorp Stock to be
received by such person in the Holding Company Merger (the "Company Merger
Shares") or any other shares of Zions Bancorp Stock held by such person during
the period commencing thirty days prior to the Effective Date and ending at such
time as financial results covering at least thirty days of post-Holding Company
Merger combined operations have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting

                                       32

<PAGE>



Policies or (b) the Company Merger Shares except in compliance with the
applicable provisions of the 1933 Act and the rules and regulations thereunder.

         7.8. Inconsistent Activities. Unless and until the Holding Company
Merger has been consummated or this Agreement has been terminated in accordance
with its terms, neither the Company nor the Bank will (a) solicit or encourage,
directly or indirectly, any inquiries or proposals to acquire more than 1
percent of the Company Common Stock or any capital stock of the Bank or any
significant portion the assets of either of them (whether by tender offer,
merger, purchase of assets, or other transactions of any type); (b) afford any
third party which may be considering any such transaction access to its
properties, books or records except as required by law; (c) enter into any
discussions or negotiations for, or enter into any agreement or understanding
which provides for, any such transaction, or (d) authorize or permit any of its
directors, officers, employees or agents to do or permit any of the foregoing.
If the Company or the Bank becomes aware of any offer or proposed offer to
acquire any shares of its capital stock or any significant portion of its assets
(regardless of the form of the proposed transaction) or of any other matter
which could adversely affect this Agreement, the Holding Company Merger, or the
Bank Merger, the Company shall immediately give notice thereof to Zions Bancorp.


8.       Representations and Warranties of Zions Bancorp, Val Cor, and BCNA.

         Zions Bancorp (with respect to itself, Val Cor, and BCNA), Val Cor
(with respect to itself and BCNA), and BCNA (solely with respect to itself) each
represent and warrant to the Company and the Bank as follows:

         8.1. Organization, Powers, and Qualification. Each of Zions Bancorp,
Val Cor, and BCNA is a corporation which is duly organized, validly existing,
and in good standing under the laws of its jurisdiction of incorporation and has
all requisite corporate power and authority to own and operate its properties
and assets, to lease properties used in its business, and to carry on its
business as now conducted. Each of Zions Bancorp, Val Cor, and BCNA owns or
possesses in the operation of its business all franchises, licenses, permits,
branch certificates, consents, approvals, waivers, and other authorizations,
governmental or otherwise, which are necessary for it to conduct its business as
now conducted, except for those where the failure of such ownership or
possession would not adversely affect its operation and properties in any
material respect. Each of Zions Bancorp, Val Cor, and BCNA is duly qualified and
licensed to do business and is in good standing in every jurisdiction in which
such qualification or license is required or with respect to which the failure
to be so qualified or licensed could result in material liability or adversely
affect its operation and properties in any material respect.

         8.2. Execution and Performance of Agreement. Each of Zions Bancorp, Val
Cor, and BCNA has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its respective terms.


                                       33

<PAGE>



         8.3. Binding Obligations; Due Authorization. Subject to the approval of
all necessary bank regulatory authorities, this Agreement constitutes the valid,
legal, and binding obligations of each of Zions Bancorp, Val Cor, and BCNA
enforceable against it in accordance with its terms, except as enforcement may
be limited by applicable bankruptcy, insolvency, moratorium or similar law, or
by general principles of equity. The execution, delivery, and performance of
this Agreement and the transactions contemplated thereby have been duly and
validly authorized by the board of directors of each of Zions Bancorp, Val Cor,
and BCNA. Subject to the approval of all necessary bank regulatory authorities,
no other corporate proceedings on the part of any of them are necessary to
authorize this Agreement or the carrying out of the transactions contemplated
hereby.

         8.4. Absence of Default. None of the execution or the delivery of this
Agreement, the consummation of the transactions contemplated hereby, or the
compliance with or fulfillment of the terms hereof will conflict with, or result
in a breach of any of the terms, conditions, or provisions of, or constitute a
default under the organizational documents or bylaws of Zions Bancorp, Val Cor,
or BCNA. Such execution, consummation, or fulfillment will not (a) conflict
with, or result in a material breach of the terms, conditions, or provisions of,
or constitute a material violation, conflict, or default under, or give rise to
any right of termination, cancellation, or acceleration with respect to, or
result in the creation of any lien, charge, or encumbrance upon, any of the
property or assets of Zions Bancorp, Val Cor, or BCNA pursuant to any material
agreement or instrument under which it is obligated or by which any of its
properties or assets may be bound, including without limitation any material
lease, contract, mortgage, promissory note, deed of trust, loan, credit
arrangement or other commitment or arrangement of it in respect of which it is
an obligor; (b) if the Holding Company Merger is approved by the Board of
Governors under the BHC, or if the Board of Governors waives its jurisdiction
over the Holding Company Merger, and if the transactions contemplated by this
Agreement are approved by the OCC, the Commissioner, and the Banking Board,
violate any law, statute, rule, or regulation of any government or agency to
which Zions Bancorp, Val Cor, or BCNA is subject and which is material to its
operations; or (c) violate any judgment, order, writ, injunction, decree, or
ruling to which it or any of its properties or assets is subject or bound. None
of the execution or delivery of this Agreement, the consummation of the
transactions contemplated thereby, or the compliance with or fulfillment of the
terms thereof will require any authorization, consent, approval, or exemption by
any person which has not been obtained, or any notice or filing which has not
been given or done, other than approval of or waiver of jurisdiction over the
transactions contemplated by this Agreement by the Board of Governors, the OCC,
the Commissioner, and the Banking Board.

         8.5.  Brokers and Advisers.

                  (a) There are no claims for brokerage commissions, finder's
fees, or similar compensation arising out of or due to any act of Zions Bancorp,
Val Cor, or BCNA in connection with the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by or on behalf of any
of them.


                                       34

<PAGE>



                  (b) None of Zions Bancorp, Val Cor, nor BCNA has entered into
any agreement or understanding with any party relating to financial advisory
services provided or to be provided with respect to the transactions
contemplated by this Agreement.

         8.6. Books and Records. The books and records of each of Zions Bancorp,
Val Cor, and BCNA fairly reflect the transactions to which it is a party or by
which its properties are subject or bound. Such books and records have been
properly kept and maintained and are in compliance in all material respects
with all applicable legal and accounting requirements. Each of Zions Bancorp,
Val Cor, and BCNA follows generally accepted accounting principles applied on a
consistent basis in the preparation and maintenance of its books of account and
financial statements, including but not limited to the application of the
accrual method of accounting for interest income on loans, leases, discounts,
and investments, interest expense on deposits and all other liabilities, and all
other items of income and expense. Each of Zions Bancorp, Val Cor, and BCNA has
made all accruals in amounts which accurately report income and expense in the
proper periods in accordance with generally accepted accounting principles. Each
of Zions Bancorp, Val Cor, and BCNA has filed all material reports and returns
required by any law or regulation to be filed by it.

         8.7. Financial Statements. Zions Bancorp has furnished to the Company
its consolidated statement of condition as of each of December 31, 1995,
December 31, 1996, and December 31, 1997, and its related consolidated statement
of income, consolidated statement of changes in financial position, and
consolidated statement of changes in stockholders' equity for each of the
periods then ended, and the notes thereto, each as filed with the SEC
(collectively, the "Zions Bancorp Financial Statements"). Each of the
consolidated balance sheets included in the Zions Bancorp Financial Statements
complied as to form in all material respects with applicable accounting
requirements (including accounting requirements of financial institution
regulatory authorities) and the published rules and regulations of the SEC with
respect thereto, fairly presented the consolidated financial position of Zions
Bancorp and its subsidiaries as of its date, and each of the consolidated
statements of income, of stockholders' equity, and of cash flows included in the
Zions Bancorp Financial Statements fairly presented the results of operations,
stockholders' equity, and cash flows of Zions Bancorp and its subsidiaries for
the periods set forth therein (subject, in the case of unaudited statements, to
normal year-end audit adjustments), in each case in accordance with generally
accepted accounting principles, consistently applied, and the accounting
requirements of financial institution regulatory authorities, during the periods
involved, except as may be noted therein.

         8.8 Securities Filings. Since January 1, 1997, Zions Bancorp has filed
all periodic and current reports it was required to file pursuant to Section 13
of the Exchange Act. Such reports do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make such
reports, in light of the circumstances under which they were filed, not
misleading.

         8.9. Absence of Certain Developments. Since December 31, 1997, there
has been (a) no material adverse change in the condition, financial or
otherwise, assets, properties, liabilities, or

                                       35

<PAGE>



businesses of Zions Bancorp, and (b) no material deterioration in the quality of
the loan portfolio of Zions Bancorp or of any major component thereof, and no
material increase in the level of nonperforming assets or nonaccrual loans at
Zions Bancorp or in the level of its provision for credit losses or its reserve
for possible credit losses.

         8.10. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by Zions Bancorp, Val Cor,
or BCNA hereunder or in connection with this Agreement or any of the
transactions contemplated thereunder contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein, in light of the circumstances under which they were made, not
misleading. There is no fact known to Zions Bancorp, Val Cor, or BCNA which
might materially adversely affect its business, assets, liabilities, financial
condition, results of operations, or prospects which has not been disclosed in
the Zions Bancorp Financial Statements or a certificate delivered by Zions
Bancorp to the Company. Copies of all documents referred to in this Agreement,
unless prepared solely by the Company and the Bank or solely by the Company and
the Bank and third parties hereto, are true, correct, and complete copies
thereof and include all amendments, supplements, and modifications thereto and
all waivers thereunder.

         8.11. Regulatory and Other Approvals. As of the date hereof, except as
set forth on Schedule 8.11 hereof, none of Zions Bancorp, Val Cor, nor BCNA is
aware of any reason why all material consents and approvals shall not be
procured from all regulatory agencies having jurisdiction over the transactions
contemplated by this Agreement, as shall be necessary for consummation of the
transactions contemplated by this Agreement. As of the date hereof, none of
Zions Bancorp, Val Cor, nor BCNA is aware of any reason why all material
consents and approvals shall not be procured from all other persons and entities
whose consent or approval shall be necessary for consummation of the
transactions contemplated by this Agreement.


9.       Closing.

         9.1. Place and Time of Closing. Closing shall take place at the offices
of Zions Bancorp, One South Main, Suite 1380, Salt Lake City, Utah, or such
other place as the parties choose, commencing at 10:00 a.m., local time, on the
Effective Date, provided that all conditions precedent to the obligations of the
parties hereto to close have then been met or waived.

         9.2. Events To Take Place at Closing. At the Closing, the following
actions will be taken:

                  (a) Such certificates and other documents as are required by
this Agreement to be executed and delivered on or prior to the Effective Date
and have not been so executed and delivered, and such other certificates and
documents as are mutually deemed by the parties to be otherwise desirable for
the effectuation of the Closing, will be so executed and delivered; and then


                                       36

<PAGE>



                  (b) the Holding Company Merger and the issuance of shares
incident thereto shall be effected (including the approval and/or filing and
acceptance, as appropriate, of appropriate Articles of Merger or similar
documents with the Colorado State Banking Board and the Colorado Secretary of
State); provided, however, that the administrative and ministerial aspects of
the issuance of shares incident to the Holding Company Merger will be settled as
soon thereafter as shall be reasonable under the circumstances; and then

                  (c) the Bank Merger shall be effected (including the filing
and acceptance of appropriate Articles of Merger or similar documents with the
Comptroller of the Currency).


10.      Termination, Damages for Breach, Waiver, and Amendment.

         10.1. Termination by Reason of Lapse of Time. This Agreement may be
terminated by any party on or after January 31, 1999, by instrument duly
authorized and executed and delivered to the other parties, unless the Effective
Date shall have occurred on or before such date.

         10.2. Grounds for Termination. This Agreement may be terminated by
written notice of termination at any time before the Effective Date (whether
before or after action by shareholders of the Company):

                  (a)      by mutual consent of the parties hereto;

                  (b) by Zions Bancorp, upon written notice to the Company given
at any time (i) if any of the representations and warranties of the Company or
the Bank contained in Section 6 hereof was materially incorrect when made, or
(ii) in the event of a material breach or material failure by the Company or the
Bank of any covenant or agreement of the Company or the Bank contained in this
Agreement which has not been, or cannot be, cured within thirty days after
written notice of such breach or failure is given to the Company or the Bank, as
the case may be;

                  (c) by the Company, upon written notice to Zions Bancorp given
at any time (i) if any of the representations and warranties of Zions Bancorp,
Val Cor, or BCNA contained in Section 8 hereof was materially incorrect when
made, or (ii) in the event of a material breach or material failure by Zions
Bancorp, Val Cor, or BCNA of any covenant or agreement of Zions Bancorp, Val
Cor, or BCNA contained in this Agreement which has not been, or cannot be, cured
within thirty days after written notice of such breach or failure is given to
Zions Bancorp, Val Cor, or BCNA, as the case may be; or

                  (d) by either Zions Bancorp or the Company upon written notice
given to the other if the board of directors of either Zions Bancorp or the
Company shall have determined in its sole judgment made in good faith, after due
consideration and consultation with counsel, that the Holding Company Merger has
become inadvisable or impracticable by reason of the

                                       37

<PAGE>



institution of litigation by the federal government or the government of the
State of Colorado or the State of Utah to restrain or invalidate the
transactions contemplated by this Agreement.

         10.3. Effect of Termination. In the event of the termination and
abandonment hereof pursuant to the provisions of Section 10.1 or Section 10.2,
this Agreement shall become void and have no force or effect, without any
liability on the part of Zions Bancorp, Val Cor, BCNA, the Company, the Bank, or
their respective directors or officers or shareholders, in respect of this
Agreement. Notwithstanding the foregoing, (a) as provided in Section 11.4 of
this Agreement, the confidentiality agreement contained in that section shall
survive such termination, and (b) if such termination is a result of any of the
representations and warranties of a party being materially incorrect when made,
or subsequent thereto, or a result of the material breach or material failure by
a party of a covenant or agreement hereunder, including without limitation any
of the agreements contained in section 11.2 of this Agreement, such party whose
representations and warranties were materially incorrect or who materially
breached or failed to perform its covenant or agreement shall be liable in the
aggregate amount of $500,000 to the other party or parties hereto (collectively
and not individually) that are not affiliated with it. The $500,000 referred to
in the previous sentence represents full liquidated damages the payment of which
shall terminate all of the rights and remedies of the receiving party or
parties, at law or in equity, against the paying party or parties in respect of
the material incorrectness of its or their representations and warranties or its
or their material breach or failure to perform.

         10.4. Waiver of Terms or Conditions. Any of the terms or conditions of
this Agreement may be waived at any time prior to the Effective Date by the
party which is, or whose shareholders are, entitled to the benefit thereof, by
action taken by that party (if an individual) or by the board of directors of
such party (if a corporation), or by its chairman, or by its president; provided
that such waiver shall be in writing and shall be taken only if, in the judgment
of the party, board of directors, or officer taking such action, such waiver
will not have a materially adverse effect on the benefits intended hereunder to
it or to the shareholders of its or his corporation; and the other parties
hereto may rely on the delivery of such a waiver as conclusive evidence of such
judgment and the validity of the waiver.

         10.5.  Amendment.

                  (a) Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement and the exhibits
hereto may be amended, supplemented, or interpreted at any time prior to the
Effective Date by written instrument duly authorized and executed by each of the
parties hereto; provided, however, that this Agreement may not be amended after
the action by shareholders of the Company or shareholders of BCNA in any respect
that would prejudice the economic interests of such Company shareholders or BCNA
shareholders, as the case may be, or any of them, except as specifically
provided herein or by like action of such shareholders.

                  (b) If Zions Bancorp and the Company should mutually determine
(following receipt of advice of legal or other counsel) that it has become
inadvisable or inexpedient to

                                       38

<PAGE>



effectuate the transactions contemplated by this Agreement through means of a
sequence of mergers such as is contemplated herein, then the parties hereto
agree to effect such change in the form of transaction as described especially
in Sections 1.1 and 9.2 of this Agreement by written instrument in amendment of
this Agreement.

                  (c) The parties to this Agreement acknowledge that BCNA is a
party to an unrelated agreement and plan of reorganization pursuant to which
BCNA is scheduled to be consolidated with State Bank and Trust of Colorado
Springs, a Colorado banking corporation, in a transaction that will cause a new
national banking association to be formed under the name of BCNA (the
"Consolidation"). The parties hereto agree that nothing in this Agreement shall
preclude or condition the right of BCNA to participate in the Consolidation. The
parties hereto further agree that, if the Consolidation shall have occurred
prior to the Effective Date, then the parties will effect such change in the
form of transaction, by written instrument in amendment of this Agreement and of
such other agreements between or among the parties hereto or any of them as
shall be implicated herein, as shall be necessary or advisable to cause the Bank
to merge into the new national banking association resulting from the
Consolidation.


11.      General Provisions.

         11.1. Allocation of Costs and Expenses. Except as provided in this
Section, each party hereto shall pay its own fees and expenses, including
without limitation the fees and expenses of its own counsel and its own
accountants and tax advisers, incurred in connection with this Agreement and the
transactions contemplated thereby. For purposes of this Section, (i) the cost of
registering under federal and state securities laws the stock of Zions Bancorp
to be received by the shareholders of the Company and the cost of printing and
delivering the proxy materials to be transmitted to shareholders of the Company
shall be deemed to be incurred on behalf of Zions Bancorp, and (ii) the cost of
procuring the tax opinion referred to in section 3.4 of this Agreement shall be
deemed to be incurred on behalf of the Company.

         11.2. Mutual Cooperation. Subject to the terms and conditions herein
provided, each party shall use its best efforts, and shall cooperate fully with
the other party, in expeditiously carrying out the provisions of this Agreement
and in expeditiously making all filings and obtaining all necessary governmental
approvals, and as soon as practicable shall execute and deliver, or cause to be
executed and delivered, such governmental notifications and additional documents
and instruments and do or cause to be done all additional things necessary,
proper, or advisable under applicable law to consummate and make effective on
the earliest practicable date the transactions contemplated hereby.

         11.3. Form of Public Disclosures. Zions Bancorp and the Company shall
mutually agree in advance upon the form and substance of all public disclosures
concerning this Agreement and the transactions contemplated hereby.

                                       39

<PAGE>



         11.4. Confidentiality. Zions Bancorp, Val Cor, BCNA, the Company, the
Bank, and their respective subsidiaries shall use all information that each
obtains from the other pursuant to this Agreement solely for the effectuation of
the transactions contemplated by this Agreement or for other purposes consistent
with the intent of this Agreement. Neither Zions Bancorp, Val Cor, BCNA, the
Company, the Bank, nor their respective subsidiaries shall use any of such
information for any other purpose, including, without limitation, the
competitive detriment of any other party. Zions Bancorp, Val Cor, and BCNA, on
the one hand, and the Company and the Bank, on the other hand, shall maintain as
strictly confidential all information each of them learns from the other and
shall, at any time, upon the request of the other, return promptly to it all
documentation provided by it or made available to third parties. Each of the
parties may disclose such information to its respective affiliates, counsel,
accountants, tax advisers, and consultants. The confidentiality agreement
contained in this Section 11.4 shall remain operative and in full force and
effect, and shall survive the termination of this Agreement.

         11.5.  Claims of Brokers.

                  (a) Each of the Company and the Bank shall indemnify, defend,
and hold Zions Bancorp, Val Cor, and BCNA harmless for, from, and against any
claim, suit, liability, fees, or expenses (including, without limitation,
attorneys' fees and costs of court) arising out of any claim for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
of its or his acts in connection with the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by it or him or on its
or his behalf with respect to Zions Bancorp, Val Cor, or BCNA.

                  (b) Each of Zions Bancorp, Val Cor, and BCNA shall indemnify,
defend, and hold the Company and the Bank harmless for, from, and against any
claim, suit, liability, fees, or expenses (including, without limitation,
attorneys' fees and costs of court) arising out of any claim for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
of its acts in connection with any of the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by it or on its behalf
with respect to the Company or the Bank.

         11.6.  Information for Applications and Registration Statement.

                  (a) Each party represents and warrants that all information
concerning it which is included in any statement and application (including the
Registration Statement) made to any governmental agency in connection with the
transactions contemplated by this Agreement shall not, with respect to such
party, omit any material fact required to be stated therein or necessary to make
the statements made, in light of the circumstances under which they were made,
not misleading. The party so representing and warranting will indemnify, defend,
and hold harmless the other, each of its directors and officers, each
underwriter and each person, if any, who controls the other within the meaning
of the Securities Act, for, from and against any and all losses, claims, suits,
damages, expenses, or liabilities to which any of them may become subject under
applicable laws (including, but not limited to, the Securities Act and the
Exchange

                                       40

<PAGE>



Act) and rules and regulations thereunder and will reimburse them for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any actions whether or not resulting in liability, insofar as such
losses, claims, damages, expenses, liabilities, or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any such application or statement or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein, or necessary in order to make the statements therein not
misleading, but only insofar as any such statement or omission was made in
reliance upon and in conformity with information furnished in writing by the
representing and warranting party expressly for use therein. Each party agrees
at any time upon the request of the other to furnish to the other a written
letter or statement confirming the accuracy of the information contained in any
proxy statement, registration statement, report, or other application or
statement, and confirming that the information contained in such document was
furnished expressly for use therein or, if such is not the case, indicating the
inaccuracies contained in such document or draft or indicating the information
not furnished expressly for use therein. The indemnity agreement contained in
this Section 11.6(a) shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any of the other
parties, and shall survive the termination of this Agreement or the consummation
of the transactions contemplated thereby.

                  (b) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement contained in Section 11.6(a) of
this Agreement is for any reason held by a court of competent jurisdiction to be
unenforceable as to any or every party, then the parties in such circumstances
shall contribute to the aggregate losses, claims, damages and liabilities
(including any investigation, legal and other expenses incurred in connection
with, and any amounts paid in settlement of, any action, suit or proceeding or
any claims asserted) to which any party may be subject in such proportion as the
court of law determines based on the relative fault of the parties.

         11.7.  Standard of Materiality.

                  (a) For purposes of Sections 4, 6, and 7 of this Agreement,
the terms "material" and "materially," when used with reference to items
normally expressed in dollars, shall be deemed to refer to amounts individually
and in the aggregate in excess of 3 percent of the shareholders' equity of the
Company as of December 31, 1997, as determined in accordance with generally
accepted accounting principles.

                  (b) For purposes of Sections 5 and 8 of this Agreement, the
terms "material" and "materially," when used with reference to items normally
expressed in dollars, shall be deemed to refer to amounts individually and in
the aggregate in excess of 3 percent of the shareholders' equity of Zions
Bancorp as of December 31, 1997, as determined in accordance with generally
accepted accounting principles.

                  (c) For other purposes and, notwithstanding subsections (a)
and (b) of this section 11.7, when used anywhere in this Agreement with explicit
reference to any of the federal

                                       41

<PAGE>



securities laws or to the Registration Statement, the terms "material" and
"materially" shall be construed and understood in accordance with standards of
materiality as judicially determined under the federal securities laws.

         11.8.  Covenants of Zions Bancorp.

                  (a) From the date hereof to the Effective Date, Zions Bancorp
shall, contemporaneously with the filing with the SEC of any periodic or current
report pursuant to section 13 of the Exchange Act, deliver a copy of such report
to the Company.

                  (b) Following the Effective Date neither Val Cor nor BCNA will
take any action to abrogate or diminish any right accorded under the articles of
incorporation or by-laws of the Company or the Bank as they existed immediately
prior to the Effective Date to any person who, on or prior to the Effective
Date, was a director or officer of the Company or the Bank to indemnification
from or against losses, expenses, claims, demands, damages, liabilities,
judgments, fines, penalties, costs, expenses (including without limitation
reasonable attorneys fees) and amounts paid in settlement pertaining to or
incurred in connection with any threatened or actual action, suit, claim, or
proceeding (whether civil, criminal, administrative, arbitration, or
investigative) arising out of events, matters, actions, or omissions occurring
on or prior to the Effective Date. To the extent not provided by the foregoing,
following the Effective Date and to the extent permitted by law, all rights to
such indemnification accorded under the articles of incorporation and by-laws of
the Company or the Bank to any person who, on or prior to the Effective Date,
was a director or officer of the Company or the Bank shall survive the Effective
Date and, following the Holding Company Merger and the Bank Merger, to the
extent permitted by law, Val Cor and BCNA will honor such obligations in
accordance with their terms with respect to events, acts, or omissions occurring
prior to the Effective Date.

                  (c) Zions Bancorp in cooperation with the Company and the Bank
will arrange for directors and officers insurance coverage for the directors and
officers of the Company and the Bank, not in excess of the coverage enjoyed by
the directors and officers of the Company and the Bank on December 31, 1997,
against claims made after the Effective Date with respect to acts that occurred
prior to the Effective Date until the fourth anniversary of the Effective Date.
The cost of such coverage will be borne by Zions Bancorp.

         11.9. Adjustments for Certain Events. Anything in this agreement to the
contrary notwithstanding, all prices per share, share amounts, and per-share
amounts referred to in this Agreement shall be appropriately adjusted to account
for stock dividends, split-ups, mergers, recapitalizations, combinations,
conversions, exchanges of shares or the like, but not for normal and recurring
cash dividends declared or paid in a manner consistent with the established
practice of the payer.

         11.10. Stock Repurchases. The Company and the Bank acknowledge that
from time to time Zions Bancorp repurchases shares of its common stock in the
open market in accordance with market conditions. Nothing in this Agreement
shall be construed to abridge the right of

                                       42

<PAGE>



Zions Bancorp to continue to do so in compliance with Exchange Act rules and
regulations and pursuant to advice of independent securities counsel for Zions
Bancorp.

         11.11. Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original, but such
counterparts together shall be deemed to be one and the same instrument and to
become effective when one or more counterparts have been signed by each of the
parties hereto. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for the other counterpart.

         11.12. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to their commitments to one
another and their undertakings vis-a-vis one another on the subject matter
hereof. Any previous agreements or understandings among the parties regarding
the subject matter hereof are merged into and superseded by this Agreement.
Nothing in this Agreement express or implied is intended or shall be construed
to confer upon or to give any person, other than Zions Bancorp, Val Cor, BCNA,
the Company, the Bank, and their respective shareholders, any rights or remedies
under or by reason of this Agreement.

         11.13. Survival of Representations, Warranties, and Covenants. The
respective representations, warranties, and covenants of each party to this
Agreement are hereby declared by the other parties to have been relied on by
such other parties and shall survive for one year following the Effective Date,
provided that if any party should breach a representation, warranty, or covenant
contained in this Agreement through fraud, deliberate misrepresentation, or
other intentional tortious conduct, then the representation, warranty, or
covenant so breached shall be deemed to have survived for six years following
the Effective Date. Each party shall be deemed to have relied upon each and
every representation and warranty of the other parties regardless of any
investigation heretofore or hereafter made by or on behalf of such party.

         11.14. Section Headings. The section and subsection headings herein
have been inserted for convenience of reference only and shall in no way modify
or restrict any of the terms or provisions hereof. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.

         11.15. Notices. All notices, consents, waivers, or other communications
which are required or permitted hereunder shall be in writing and deemed to have
been duly given if delivered personally or by messenger, transmitted by telex or
telegram, by express courier, or sent by registered or certified mail, return
receipt requested, postage prepaid. All communications shall be addressed to the
appropriate address of each party as follows:


                                       43

<PAGE>



If to Zions Bancorp, Val Cor, or BCNA:

           Zions Bancorporation
           One South Main, Suite 1380
           Salt Lake City, Utah  84111

           Attention:           Mr. Harris H. Simmons
                                President and Chief Executive Officer

With a required copy to:

           Brian D. Alprin, Esq.
           Duane, Morris & Heckscher LLP
           1667 K Street, N.W., Suite 700
           Washington, D.C.  20006

If to the Company or the Bank:

           Kersey Bancorp
           301 First Street
           Kersey, Colorado 80644-0558

           Attention:           Mr. Larry G. Neuschwanger
                                President

With a required copy to:

           Ernest J. Panasci, Esq.
           Slivka Robinson Waters & O'Dorisio, P.C.
           1099 Eighteenth Street, Suite 2600
           Denver, Colorado  80202


           All such notices shall be deemed to have been given on the date
delivered, transmitted, or mailed in the manner provided above.

           11.16. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah and Weld County, Colorado to be proper
jurisdictions and venues for any suit or action arising out of this Agreement.
Each of the parties consents to personal jurisdiction in each of such venues for
such a proceeding and agrees that it may be served with process in any action
with respect to this Agreement or the transactions contemplated thereby by
certified or registered mail, return receipt requested, or to its registered
agent for service of process in the state of Utah or Colorado. Each

                                       44

<PAGE>



of the parties irrevocably and unconditionally waives and agrees, to the fullest
extent permitted by law, not to plead any objection that it may now or hereafter
have to the laying of venue or the convenience of the forum of any action or
claim with respect to this Agreement or the transactions contemplated thereby
brought in the courts aforesaid.

           11.17. Knowledge of a Party. References in this Agreement to the
knowledge of a party shall mean the knowledge possessed by the present executive
officers of such party including, without limitation, information which is or
has been in the books and records of such party.

           11.18. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.


           IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.

<TABLE>
<CAPTION>
<S>                                                      <C>
                                                         ZIONS BANCORPORATION



Attest:                                                  By: -------------------------------------
                                                                        Dale M. Gibbons
                                                                 Executive Vice President and
                                                                    Chief Financial Officer



                                                         VAL COR BANCORPORATION, INC.



Attest:                                                  By: 
       ------------------------------------                  -------------------------------------
                  Ray L. Nash                                            Gary S. Judd
      Chief Financial Officer and Secretary                  President and Chief Executive Officer
</TABLE>


                                       45

<PAGE>



<TABLE>
<CAPTION>
<S>                                                      <C>
                                                         BANK COLORADO, NATIONAL
                                                         ASSOCIATION



Attest:                                                  By:
       ------------------------------------                  -------------------------------------
                  Ray L. Nash                                                Gary S. Judd
      Chief Financial Officer and Secretary                  President and Chief Executive Officer







                                                         KERSEY BANCORP



Attest:                                                  By:
       ------------------------------------                  -------------------------------------
                                                                     Larry G. Neuschwanger
                                                                            President



                                                         INDEPENDENT BANK



Attest:                                                  By:
       ------------------------------------                  -------------------------------------
                                                                     Larry G. Neuschwanger
                                                             President and Chief Executive Officer
</TABLE>


                                       46

<PAGE>





                                                                             )
State of Utah                                            )
                                                         )       ss.
County of Salt Lake                                      )
                                                                             )
- -----------------------------------------------------------------------------

          On this 8th day of May, 1998, before me personally appeared Dale M.
Gibbons, to me known to be the Executive Vice President and Chief Financial
Officer of Zions Bancorporation, and acknowledged said instrument to be the free
and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed is the corporate seal of said corporation.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.






                                        -------------------------------------
                                                      Notary Public

                                       47

<PAGE>





                                                         )
State of Colorado                                        )
                                                         )       ss.
County of Denver                                         )
                                                                             )
- -----------------------------------------------------------------------------

          On this 8th day of May, 1998, before me personally appeared Gary S.
Judd, to me known to be the President and Chief Executive Officer of each of Val
Cor Bancorporation, Inc. and Bank Colorado, National Association, and
acknowledged said instrument to be the free and voluntary act and deed of each
of said corporations, for the uses and purposes therein mentioned, and on oath
each stated that he was authorized to execute said instrument and that the
respective seals affixed are the respective corporate seals of said
corporations.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.






                                        -------------------------------------
                                                      Notary Public

                                       48

<PAGE>





                                                         )
State of Colorado                                        )
                                                         )       ss.
County of Weld                                           )
                                                                             )
- -----------------------------------------------------------------------------

          On this 8th day of May, 1998, before me personally appeared Larry G.
Neuschwanger, to me known to be the President of Kersey Bancorp and the
President and Chief Executive Officer of Independent Bank, and acknowledged said
instrument to be the free and voluntary act and deed of each of said
corporations, for the uses and purposes therein mentioned, and on oath stated
that he was authorized to execute said instrument and that the seals affixed are
the respective corporate seals of said corporations.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.






                                        -------------------------------------
                                                      Notary Public

                                       49

<PAGE>



         The undersigned members of the Board of Directors of Kersey Bancorp
(the "Company"), acknowledging that Zions Bancorporation ("Zions Bancorp") has
relied upon the action heretofore taken by the board of directors in entering
into the Agreement, and has required the same as a prerequisite to Zions
Bancorp's execution of the Agreement, do individually and as a group agree,
subject to their fiduciary duties to shareholders, to support the Agreement and
to recommend its adoption by the other shareholders of the Company.

         The undersigned do hereby, individually and as a group, until the
Effective Date or termination of the Agreement, further agree to refrain from
soliciting or, subject to their fiduciary duties to shareholders, negotiating or
accepting any offer of merger, consolidation, or acquisition of any of the
shares or all or substantially all of the assets of the Company or Independent
Bank.



- -----------------------------                -------------------------------
    Larry G. Neuschwanger                            Carlton Barnett



- -----------------------------                -------------------------------
    Lavern Glover                                    Ivan D. Shupe

                                       50




<PAGE>

                                  SCHEDULE 1.8


                              Larry G. Neuschwanger
                                 Carlton Barnett
                                  Lavern Glover
                                  Ivan D. Shupe
                                 Reuben Ehrlich










                                       51

<PAGE>

                                   APPENDIX B




                                  June 23, 1998


Board of Directors
Kersey Bancorp, Inc.
301 First Street
Kersey, Colorado 80644

Members of the Board:

You have requested our opinion as to the fairness, from a financial point of
view, to the holders of the outstanding shares of common stock of Kersey
Bancorp, Inc. ("Kersey") of the consideration (the "Consideration") to be paid
for the exchange of common shares in the merger (the "Merger") of Kersey with
Zions Bancorporation ("Zions"), pursuant to the Agreement, dated May 8, 1998,
between Kersey and Zions (the "Merger Agreement").

Pursuant to the Merger Agreement, Kersey will merge into Zions or one of its
wholly owned affiliates and Kersey as a separate corporate entity will cease.
Each share of Kersey common stock outstanding immediately prior to the effective
time of the Merger (other than shares as to which statutory dissenters'
appraisal rights have been exercised) will be converted into and exchanged for
common stock in Zions equal to $28,200,000 divided by the average share price of
Zion's common stock for the last ten days before closing. As of today, the
aggregate number of shares of Zions stock to be received would be 542,307 shares
at yesterday's price of $52/share. The terms of the Merger are more fully set
forth in the Merger Agreement.

For purposes of this opinion and in connection with our review of the proposed
transaction, we have, among other things:

         1.       Participated in discussions with representatives of Kersey
                  concerning Kersey's financial condition, businesses, assets,
                  earnings, prospects, and such senior management's views as to
                  the future financial performance;

         2.       Reviewed the terms of the Merger Agreement;

         3.       Reviewed certain publicly available financial statements, both
                  audited (where available) and unaudited, and related financial
                  information of Kersey and Zions, including those included in
                  their respective Annual Reports or Form 10-K for the past
                  three years and the respective Quarterly Reports or Form 10-Q
                  for the periods ended March 31, 1998, September 30, 1997, June
                  30, 1997, and March 31, 1997 as well as other internally
                  generated reports relating to asset/liability management,
                  asset quality, and so forth;

<PAGE>

Board of Directors
Kersey Bancorp, Inc.
Page 2
- --------------------------------------------------------------------------------




         4.       Reviewed certain financial forecasts and projections of Kersey
                  prepared by its management and reviewed publicly available
                  information, earnings estimates, and research reports
                  available for Zions;

         5.       Discussed and reviewed certain aspects of the past and current
                  business operations, financial condition, and future prospects
                  of Zions with certain members of management;

         6.       Reviewed reported market prices and historical trading
                  activity of Zions common stock;

         7.       Reviewed certain aspects of the financial performance of
                  Kersey and Zions and compared such financial performance of
                  Kersey and Zions, together with stock market data relating to
                  Zions common stock, with similar data available for certain
                  other financial institutions and certain of their publicly
                  traded securities; and

         8.       Reviewed certain of the financial terms, to the extent
                  publicly available, of certain recent business combinations
                  involving other financial institutions.

We have assumed and relied, without independent verification, upon the accuracy
and completeness of all of the financial and other information that has been
provided to us by Kersey, Zions, their respective representatives, and of the
publicly available information that was reviewed by us. We are not experts in
the evaluation of allowances for loan losses and have not independently verified
such allowances, and have relied on and assumed that the aggregate allowances
for loan losses set forth in the balance sheets of each of Kersey and Zions at
December 31, 1997 are adequate to cover such losses and complied fully with
applicable law, regulatory policy and sound banking practice as of the date of
such financial statements. We were not retained to and we did not conduct a
physical inspection of any of the properties or facilities of Kersey or Zions,
did not make any independent evaluation or appraisal of the assets, liabilities
or prospects of Kersey or Zions, were not furnished with any such evaluation or
appraisal, and did not review any individual credit files. Our opinion is
necessarily based on economic, market, and other conditions as in effect on, and
the information made available to us as of, the date hereof.

Howe Barnes Investments, Inc. ("HBI"), as part of its investment banking
business, is regularly engaged in the valuation of banks and bank holding
companies, thrifts and thrift holding companies, and various other financial
services companies, in connection with mergers and acquisitions, initial and
secondary offerings of securities, and valuations for other purposes. In

<PAGE>

Board of Directors
Kersey Bancorp, Inc.
Page 3
- --------------------------------------------------------------------------------




rendering this fairness opinion we have acted on behalf of the Board of
Directors of Kersey and will receive a fee for our services.

We are not expressing any opinion herein as to the prices at which shares of
Zions Common Stock issued in the Merger may trade if and when they are issued or
at any future time. Our opinion as expressed herein is limited to the fairness,
from a financial point of view, of the Consideration to the holders of Kersey
Common Stock and does not address Kersey's underlying business decision to
proceed with the Merger. We have been retained on behalf of the Board of
Directors of Kersey, and our opinion does not constitute a recommendation to any
holder of Kersey Common Stock as to how such holder should vote with respect to
the Merger Agreement at any meeting of holders of Kersey Common Stock.

Subject to the foregoing and based on our experience as investment bankers, our
activities as described above, and other factors we have deemed relevant, we are
of the opinion as of the date hereof that the Consideration is fair, from a
financial point of view, to the holders of Kersey common stock.

                                          Sincerely,

                                          HOWE BARNES INVESTMENTS, INC.



                                          ______________________________________
                                          Paul A. O'Connor, First Vice President

<PAGE>

                                   APPENDIX C

                        COLORADO BUSINESS CORPORATION ACT
                           Rights of Dissenting Owners


         7-113-101  DEFINITIONS.--For purposes of this article:

         1. "Beneficial shareholder" means the beneficial owner of shares held
in a voting trust or by a nominee as the record shareholder.

         2. "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring domestic or foreign
corporation, by merger or share exchange of that issuer.

         3. "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 7-113-102 and who exercises that right at the
time and in the manner required by part 2 of this article.

         4. "Fair value", with respect to a dissenter's shares, means the value
of the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action except to the extent that exclusion would
be inequitable.

         5. "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at the legal rate as
specified in section 5-12-101, C.R.S.

         6. "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
that are registered in the name of a nominee to the extent such owner is
recognized by the corporation as the shareholder as provided in section
7-107-204.

         7. "Shareholder" means either a record shareholder or a beneficial
shareholder.

         7-113-102 RIGHT TO DISSENT.--1. A shareholder, whether or not entitled
to vote, is entitled to dissent and obtain payment of the fair value of the
shareholder's shares in the event of any of the following corporate actions:

         (a) Consummation of a plan of merger to which the corporation is a
party if:

         (I) Approval by the shareholders of that corporation is required for
the merger by section 7-111-103 or 7-111-104 or by the articles of
incorporation; or


                                       C-1

<PAGE>



         (II) The corporation is a subsidiary that is merged with its parent
corporation under section 7-111-104;

         (b) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired;

         (c) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of the corporation for which a
shareholder vote is required under section 7-112- 102(1); and

         (d) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of an entity controlled by the
corporation if the shareholders of the corporation were entitled to vote upon
the consent of the corporation to the disposition under section 7-112- 102(2).

         1.3. A shareholder is not entitled to dissent and obtain payment, under
subsection (1) of this section, of the fair value of the shares of any class or
series of shares which either were listed on a national securities exchange
registered under the federal "Securities Exchange Act of 1934", as amended or on
the national market system of the national association of securities dealers
automated quotation system, or were held of record by more than two thousand
shareholders, at the time of:

         (a) The record date fixed under section 7-107-107 to determine the
shareholders entitled to receive notice of the shareholders' meeting at which
the corporate action is submitted to a vote;

         (b) The record date fixed under section 7-107-104 to determine
shareholders entitled to sign writings consenting to the corporate action; or

         (c) The effective date of the corporate action if the corporate action
is authorized other than by a vote of shareholders.

         1.8. The limitation set forth in subsection (1.3) of this section shall
not apply if the shareholder will receive for the shareholder's shares, pursuant
to the corporate action, anything except:

         (a) Shares of the corporation surviving the consummation of the plan of
merger or share exchange;

         (b) Shares of any other corporation which at the effective date of the
plan of merger or share exchange either will be listed on a national securities
exchange registered under the federal "Securities Exchange Act of 1934", as
amended, or on the national market system of the National Association of
Securities Dealers Automated Quotation System, or will be held of record by more
than two thousand shareholders;


                                       C-2

<PAGE>



         (c) Cash in lieu of fractional shares; or

         (d) Any combination of the foregoing described shares or cash in lieu
of fractional shares.

         2.

         2.5. A shareholder, whether or not entitled to vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's shares in the
event of a reverse split that reduces the number of shares owned by the
shareholder to a fraction of a share or to scrip if the fractional share or
scrip so created is to be acquired for cash or the scrip is to be voided under
section 7-106-104.

         3. A shareholder is entitled to dissent and obtain payment of the fair
value of the shareholder's shares in the event of any corporate action to the
extent provided by the bylaws or a resolution of the board of directors.

         4. A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this article may not challenge the corporate action
creating such entitlement unless the action is unlawful or fraudulent with
respect to the shareholder or the corporation.

         7-113-103 DISSENT BY NOMINEES AND BENEFICIAL OWNERS.--1. A record
shareholder may assert dissenters' rights as to fewer than all the shares
registered in the record shareholder's name only if the record shareholder
dissents with respect to all shares beneficially owned by any one person and
causes the corporation to receive written notice which states such dissent and
the name, address, and federal taxpayer identification number, if any, of each
person on whose behalf the record shareholder asserts dissenters' rights. The
rights of a record shareholder under this subsection (1) are determined as if
the shares as to which the record shareholder dissents and the other shares of
the record shareholder were registered in the names of different shareholders.

         2. A beneficial shareholder may assert dissenters' rights as to the
shares held on the beneficial shareholder's behalf only if:

         (a) The beneficial shareholder causes the corporation to receive the
record shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and

         (b) The beneficial shareholder dissents with respect to all shares
beneficially owned by the beneficial shareholder.

         3. The corporation may require that, when a record shareholder dissents
with respect to the shares held by any one or more beneficial shareholders, each
such beneficial shareholder must certify to the corporation that the beneficial
shareholder and the record shareholder or record shareholders of all shares
owned beneficially by the beneficial shareholder have asserted, or will timely
assert, dissenters' rights as to all such shares as to which there is no
limitation on the ability


                                       C-3

<PAGE>



to exercise dissenters' rights. Any such requirement shall be stated in the
dissenters' notice given pursuant to section 7-113-203.

         7-113-201 NOTICE OF DISSENTERS' RIGHTS.--1. If a proposed corporate
action creating dissenters' rights under section 7-113-102 is submitted to a
vote at a shareholders' meeting, the notice of the meeting shall be given to all
shareholders, whether or not entitled to vote. The notice shall state that
shareholders are or may be entitled to assert dissenters' rights under this
article and shall be accompanied by a copy of this article and the materials, if
any, that, under articles 101 to 117 of this title, are required to be given to
shareholders entitled to vote on the proposed action at the meeting. Failure to
give notice as provided by this subsection (1) shall not affect any action taken
at the shareholders' meeting for which the notice was to have been given, but
any shareholder who was entitled to dissent but who was not given such notice
shall not be precluded from demanding payment for the shareholder's shares under
this article by reason of the shareholder's failure to comply with the
provisions of section 7-113-202(1).

         2. If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant to
section 7-107-104, any written or oral solicitation of a shareholder to execute
a writing consenting to such action contemplated in section 7-107-104 shall be
accompanied or preceded by a written notice stating that shareholders are or may
be entitled to assert dissenters' rights under this article, by a copy of this
article, and by the materials, if any, that, under articles 101 to 117 of this
title, would have been required to be given to shareholders entitled to vote on
the proposed action if the proposed action were submitted to a vote at a
shareholders' meeting. Failure to give notice as provided by this subsection (2)
shall not affect any action taken pursuant to section 7-107-104 for which the
notice was to have been given, but any shareholder who was entitled to dissent
but who was not given such notice shall not be precluded from demanding payment
for the shareholder's shares under this article by reason of the shareholder's
failure to comply with the provisions of section 7-113-202(2).

         7-113-202 NOTICE OF INTENT TO DEMAND PAYMENT.--1. If a proposed
corporate action creating dissenters' rights under section 7-113-102 is
submitted to a vote at a shareholders' meeting and if notice of dissenters'
rights has been given to such shareholder in connection with the action pursuant
to section 7-113-201(1), a shareholder who wishes to assert dissenters' rights
shall:

         (a) Cause the corporation to receive, before the vote is taken, written
notice of the shareholder's intention to demand payment for the shareholder's
shares if the proposed corporate action is effectuated; and

         (b) Not vote the shares in favor of the proposed corporate action.

         2. If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant to
section 7-107-104 and if notice of dissenters' rights has been given to such
shareholder in connection with the action pursuant to


                                       C-4

<PAGE>



section 7-113-201(2) a shareholder who wishes to assert dissenters' rights shall
not execute a writing consenting to the proposed corporate action.

         3. A shareholder who does not satisfy the requirements of subsection
(1) or (2) of this section is not entitled to demand payment for the
shareholder's shares under this article.

         7-113-203 DISSENTERS' NOTICE.--1. If a proposed corporate action
creating dissenters' rights under section 7-113-102 is authorized, the
corporation shall give a written dissenters' notice to all shareholders who are
entitled to demand payment for their shares under this article.

         2. The dissenters' notice required by subsection (1) of this section
shall be given no later than ten days after the effective date of the corporate
action creating dissenters' rights under section 7-113-102 and shall:

         (a) State that the corporate action was authorized and state the
effective date or proposed effective date of the corporate action;

         (b) State an address at which the corporation will receive payment
demands and the address of a place where certificates for certificated shares
must be deposited;

         (c) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;

         (d) Supply a form for demanding payment, which form shall request a
dissenter to state an address to which payment is to be made;

         (e) Set the date by which the corporation must receive the payment
demand and certificates for certificated shares, which date shall not be less
than thirty days after the date the notice required by subsection (1) of this
section is given;

         (f) State the requirement contemplated in section 7-113-103(3), if such
requirement is imposed; and

         (g)    Be accompanied by a copy of this article.

         7-113-204 PROCEDURE TO DEMAND PAYMENT.--1. A shareholder who is given a
dissenters' notice pursuant to section 7-113-203 and who wishes to assert
dissenters' rights shall, in accordance with the terms of the dissenters'
notice:

         (a) Cause the corporation to receive a payment demand, which may be the
payment demand form contemplated in section 7-113-203(2)(d), duly completed, or
may be stated in another writing; and



                                       C-5

<PAGE>



         (b) Deposit the shareholder's certificates for certificated shares.

         2. A shareholder who demands payment in accordance with subsection (1)
of this section retains all rights of a shareholder, except the right to
transfer the shares, until the effective date of the proposed corporate action
giving rise to the shareholder's exercise of dissenters' rights and has only the
right to receive payment for the shares after the effective date of such
corporate action.

         3. Except as provided in section 7-113-207 or 7-113-209(1)(b), the
demand for payment and deposit of certificates are irrevocable.

         4. A shareholder who does not demand payment and deposit the
shareholder's share certificates as required by the date or dates set in the
dissenters' notice is not entitled to payment for the shares under this article.

         7-113-205 UNCERTIFICATED SHARES.--1. Upon receipt of a demand for
payment under section 7-113-204 from a shareholder holding uncertificated
shares, and in lieu of the deposit of certificates representing the shares, the
corporation may restrict the transfer thereof.

         2. In all other respects, the provisions of section 7-113-204 shall be
applicable to shareholders who own uncertificated shares.

         7-113-206 PAYMENT.--1. Except as provided in section 7-113-208, upon
the effective date of the corporate action creating dissenters' rights under
section 7-113-102 or upon receipt of a payment demand pursuant to section
7-113-204, whichever is later, the corporation shall pay each dissenter who
complied with section 7-113-204, at the address stated in the payment demand, or
if no such address is stated in the payment demand, at the address shown on the
corporation's current record of shareholders for the record shareholder holding
the dissenter's shares, the amount the corporation estimates to be the fair
value of the dissenter's shares, plus accrued interest.

         2. The payment made pursuant to subsection (1) of this section shall be
accompanied by:

         (a) The corporation's balance sheet as of the end of its most recent
fiscal year or, if that is not available, the corporation's balance sheet as of
the end of a fiscal year ending not more than sixteen months before the date of
payment, an income statement for that year, and, if the corporation customarily
provides such statements to shareholders, a statement of changes in
shareholders' equity for that year and a statement of cash flow for that year,
which balance sheet and statements shall have been audited if the corporation
customarily provides audited financial statements to shareholders, as well as
the latest available financial statements, if any, for the interim or full-year
period, which financial statements need not be audited;

         (b) A statement of the corporation's estimate of the fair value of the
shares;

         (c) An explanation of how the interest was calculated;



                                       C-6

<PAGE>



         (d) A statement of the dissenter's right to demand payment under
section 7-113-209; and

         (e) A copy of this article.

         7-113-207 FAILURE TO TAKE ACTION.--1. If the effective date of the
corporate action creating dissenters' rights under section 7-113-102 does not
occur within sixty days after the date set by the corporation by which the
corporation must receive the payment demand as provided in section 7-113-203,
the corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.

         2. If the effective date of the corporate action creating dissenters'
rights under section 7- 113-102 occurs more than sixty days after the date set
by the corporation by which the corporation must receive the payment demand as
provided in section 7-113-203, then the corporation shall send a new dissenters'
notice, as provided in section 7-113-203, and the provisions of sections
7-113-204 to 7-113-209 shall again be applicable.

         7-113-208 SPECIAL PROVISIONS RELATING TO SHARES ACQUIRED AFTER
ANNOUNCEMENT OF PROPOSED CORPORATE ACTION.--1. The corporation may, in or with
the dissenters' notice given pursuant to section 7-113-203, state the date of
the first announcement to news media or to shareholders of the terms of the
proposed corporate action creating dissenters' rights under section 7-113-102
and state that the dissenter shall certify in writing, in or with the
dissenter's payment demand under section 7-113-204, whether or not the dissenter
(or the person on whose behalf dissenters' rights are asserted) acquired
beneficial ownership of the shares before that date. With respect to any
dissenter who does not so certify in writing, in or with the payment demand,
that the dissenter or the person on whose behalf the dissenter asserts
dissenters' rights acquired beneficial ownership of the shares before such date,
the corporation may, in lieu of making the payment provided in section
7-113-206, offer to make such payment if the dissenter agrees to accept it in
full satisfaction of the demand.

         2. An offer to make payment under subsection (1) of this section shall
include or be accompanied by the information required by section 7-113-206(2).

         7-113-209  PROCEDURE IF DISSENTER IS DISSATISFIED WITH PAYMENT OR
OFFER.--1. A dissenter may give notice to the corporation in writing of the
dissenter's estimate of the fair value of the dissenter's shares and of the
amount of interest due and may demand payment of such estimate, less any payment
made under section 7-113-206, or reject the corporation's offer under section
7-113-208 and demand payment of the fair value of the shares and interest due,
if:

         (a) The dissenter believes that the amount paid under section 7-113-206
or offered under section 7-113-208 is less than the fair value of the shares or
that the interest due was incorrectly calculated;

         (b) The corporation fails to make payment under section 7-113-206
within sixty days after the date set by the corporation by which the corporation
must receive the payment demand; or


                                       C-7

<PAGE>



         (c) The corporation does not return the deposited certificates or
release the transfer restrictions imposed on uncertificated shares as required
by section 7-113-207(1).

         2. A dissenter waives the right to demand payment under this section
unless the dissenter causes the corporation to receive the notice required by
subsection (1) of this section within thirty days after the corporation made or
offered payment for the dissenter's shares.

         7-113-301 COURT ACTION.--1. If a demand for payment under section
7-113-209 remains unresolved, the corporation may, within sixty days after
receiving the payment demand, commence a proceeding and petition the court to
determine the fair value of the shares and accrued interest. If the corporation
does not commence the proceeding within the sixty-day period, it shall pay to
each dissenter whose demand remains unresolved the amount demanded.

         2. The corporation shall commence the proceeding described in
subsection (1) of this section in the district court of the county in this state
where the corporation's principal office is located or, if the corporation has
no principal office in this state, in the district court of the county in which
its registered office is located. If the corporation is a foreign corporation
without a registered office, it shall commence the proceeding in the county
where the registered office of the domestic corporation merged into, or whose
shares were acquired by, the foreign corporation was located.

         3. The corporation shall make all dissenters, whether or not residents
of this state, whose demands remain unresolved parties to the proceeding
commenced under subsection (2) of this section as in an action against their
shares, and all parties shall be served with a copy of the petition. Service on
each dissenter shall be by registered or certified mail, to the address stated
in such dissenter's payment demand, or if no such address is stated in the
payment demand, at the address shown on the corporation's current record of
shareholders for the record shareholder holding the dissenter's shares, or as
provided by law.

         4. The jurisdiction of the court in which the proceeding is commenced
under subsection (2) of this section is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend a
decision on the question of fair value. The appraisers have the powers described
in the order appointing them, or in any amendment to such order. The parties to
the proceeding are entitled to the same discovery rights as parties in other
civil proceedings.

         5. Each dissenter made a party to the proceeding commenced under
subsection (2) of this section is entitled to judgment for the amount, if any,
by which the court finds the fair value of the dissenter's shares, plus
interest, exceeds the amount paid by the corporation, or for the fair value,
plus interest, of the dissenter's shares for which the corporation elected to
withhold payment under section 7-113-208.

         7-113-302 COURT COSTS AND COUNSEL FEES.--1. The court in an appraisal
proceeding commenced under Section 7-113-301 shall determine all costs of the
proceeding,


                                       C-8

<PAGE>



including the reasonable compensation and expenses of appraisers appointed by
the court. The court shall assess the costs against the corporation; except that
the court may assess costs against all or some of the dissenters, in amounts the
court finds equitable, to the extent the court finds the dissenters acted
arbitrarily, vexatiously, or not in good faith in demanding payment under
section 7-113-209.

         2. The court may also assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable:

         (a) Against the corporation and in favor of any dissenters if the court
finds the corporation did not substantially comply with the requirements of part
2 of this article; or

         (b) Against either the corporation or one of more dissenters, in favor
of any other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this article.

         3. If the court finds that the services of counsel for any dissenter
were of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to said counsel reasonable fees to be paid out of the amounts
awarded to the dissenters who were benefitted.



                                       C-9

<PAGE>



                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.  Indemnification of Directors and Officers

         Utah law provides for indemnification of directors and officers as
follows:

16-10a-902  AUTHORITY TO INDEMNIFY DIRECTORS.

      (1) Except as provided in Subsection (4), a corporation may indemnify an
individual made a party to a proceeding because he is or was a director, against
liability incurred in the proceeding if:

         (a)    his conduct was in good faith; and

         (b) he reasonably believed that his conduct was in, or not opposed to,
      the corporation's best interests; and

         (c) in the case of any criminal proceeding, he had no reasonable cause
      to believe his conduct was unlawful.

      (2) A director's conduct with respect to any employee benefit plan for a
purpose he reasonably believed to be in or not opposed to the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of Subsection (1)(b).

      (3) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this section.

      (4) A corporation may not indemnify a director under this section:

         (a) in connection with a proceeding by or in the right of the
      corporation in which the director was adjudged liable to the corporation;
      or

         (b) in connection with any other proceeding charging that the director
      derived an improper personal benefit, whether or not involving action in
      his official capacity, in which proceeding he was adjudged liable on the
      basis that he derived an improper personal benefit.

      (5) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.



                                      II-1

<PAGE>



16-10a-903  MANDATORY INDEMNIFICATION OF DIRECTORS.

      Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was successful, on the merits or otherwise, in the
defense of any proceeding, or in the defense of any claim, issue, or matter in
the proceeding, to which he was a party because he is or was a director of the
corporation, against reasonable expenses incurred by him in connection with the
proceeding or claim with respect to which he has been successful.

16-10a-907  INDEMNIFICATION OF OFFICERS, EMPLOYEES, FIDUCIARIES, AND
AGENTS.

      Unless a corporation's articles of incorporation provide otherwise:

      (1) an officer of the corporation is entitled to mandatory indemnification
under Section 16- 10a-903, and is entitled to apply for court-ordered
indemnification under Section 16-10a-905, in each case to the same extent as a
director;

      (2) the corporation may indemnify and advance expenses to an officer,
employee, fiduciary, or agent of the corporation to the same extent as to a
director; and

      (3) a corporation may also indemnify and advance expenses to an officer,
employee, fiduciary, or agent who is not a director to a greater extent, if not
inconsistent with public policy, and if provided for by its articles of
incorporation, bylaws, general or specific action of its board of directors, or
contract.

16-10a-908  INSURANCE.

      A corporation may purchase and maintain liability insurance on behalf of a
person who is or was a director, officer, employee, fiduciary, or agent of the
corporation, or who, while serving as a director, officer, employee, fiduciary,
or agent of the corporation, is or was serving at the request of the corporation
as a director, officer, partner, trustee, employee, fiduciary, or agent of
another foreign or domestic corporation or other person, or of an employee
benefit plan, against liability asserted against or incurred by him in that
capacity or arising from his status as a director, officer, employee, fiduciary,
or agent, whether or not the corporation would have power to indemnify him
against the same liability under Sections 16-10a-902, 16-10a-903, or 16-10a-907.
Insurance may be procured from any insurance company designated by the board of
directors, whether the insurance company is formed under the laws of this state
or any other jurisdiction of the United States or elsewhere, including any
insurance company in which the corporation has an equity or any other interest
through stock ownership or otherwise.

16-10a-909   LIMITATIONS OF INDEMNIFICATION OF DIRECTORS.

      (1) A provision treating a corporation's indemnification of, or advance
for expenses to, directors that is contained in its articles of incorporation or
bylaws, in a resolution of its shareholders


                                      II-2

<PAGE>



or board of directors, or in a contract (except an insurance policy) or
otherwise, is valid only if and to the extent the provision is not inconsistent
with this part. If the articles of incorporation limit indemnification or
advance of expenses, indemnification and advance of expenses are valid only to
the extent not inconsistent with the articles of incorporation.

      (2) This part does not limit a corporation's power to pay or reimburse
expenses incurred by a director in connection with the director's appearance as
a witness in a proceeding at a time when the director has not been made a named
defendant or respondent to the proceeding.

Item 21.  Exhibits and Financial Statement Schedules.

      (a) Exhibits. An Exhibit Index, containing a list of all exhibits filed
with this Registration Statement, is included beginning on page II-7.

      (b) Financial Statement Schedules. Not applicable.

      (c) Report, Opinion or Appraisal. Not applicable.

Item 22.  Undertakings.

      The undersigned registrant hereby undertakes as follows:

      (1) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

      (2) to deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X is not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.

      (3) that prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.



                                      II-3

<PAGE>



      (4) that every prospectus (i) that is filed pursuant to paragraph (3)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act of 1933, as amended, and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

      (5) that insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 20
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

      (6) to respond to requests for information that is incorporated by
reference into the Proxy Statement/Prospectus pursuant to Items 4, 10(b), 11 or
13 of Form S-4, within one business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
Effective Date of the registration statement through the date of responding to
the request.

      (7) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.

      (8) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

             (i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

             (ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement.



                                      II-4

<PAGE>



             (iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.

         (9) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (10) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.



                                      II-5

<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Salt Lake City, Utah,
on the 17th day of July, 1998.


                                             Zions Bancorporation



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


                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Harris H. Simmons, Roy W. Simmons, and
Dale M. Gibbons, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or either of
them, or their or his substitutes, may lawfully do or cause to be done by virtue
thereof.

         Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature                     Capacity                          Date
- ---------                     --------                          ----

/s/ Harris H. Simmons         President, Chief Executive        July 17, 1998
- -------------------------     Officer and Director
Harris H. Simmons


/s/ Dale M. Gibbons           Executive Vice President          July 17, 1998
- -------------------------     and Chief Financial Officer
Dale M. Gibbons




                                      II-6

<PAGE>



/s/ Nolan X. Bellon           Senior Vice President             July 17, 1998
- -------------------------     and Controller
Nolan X. Bellon


/s/ Roy W. Simmons            Chairman and Director             July 17, 1998
- -------------------------
Roy W. Simmons


/s/ Jerry C. Atkin            Director                          July 17, 1998
- -------------------------
Jerry C. Atkin


/s/ R. D. Cash                Director                          July 17, 1998
- -------------------------
R. D. Cash


/s/ L. E. Simmons             Director                          July 17, 1998
- -------------------------
L. E. Simmons


/s/ Grant R. Caldwell         Director                          July 17, 1998
- -------------------------
Grant R. Caldwell


/s/ I. J. Wagner              Director                          July 17, 1998
- -------------------------
I. J. Wagner


/s/ Roger B. Porter           Director                          July 17, 1998
- -------------------------
Roger B. Porter


/s/ Richard H. Madsen         Director                          July 17, 1998
- -------------------------
Richard H. Madsen


/s/ Robert G. Sarver          Director                          July 17, 1998
- -------------------------
Robert G. Sarver



                                      II-7

<PAGE>



                                  EXHIBIT INDEX

                    (Pursuant to Item 601 of Regulation S-K)

                                                                  Page Number
                                                                 in Sequential
Exhibit                                                            Numbering
  No.      Description and Method of Filing                         System
- -------    --------------------------------                      -------------

2.1        Agreement and Plan of Reorganization dated as of
           May 8, 1998 among Zions Bancorporation, Val Cor
           Bancorporation, Inc., Bank Colorado, National
           Association, Kersey Bancorp, Inc. and Independent
           Bank (included in the Proxy Statement/Prospectus
           as Appendix A; Exhibits I, II, III and V to the
           Agreement and Plan of Reorganization are filed
           herewith)

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

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

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

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)


                            II-8

<PAGE>

5          Opinion of Duane, Morris & Heckscher LLP
           regarding the legality of the shares of Common
           Stock being registered (filed herewith)

8          Opinion of Slivka Robinson Waters & O'Dorisio,
           P.C. regarding tax matters (filed herewith)

10.1       Amended and Restated Zions Bancorporation Pension           *
           Plan (incorporated by reference to Exhibit 10.1
           of Zions Bancorporation's Annual Report on Form
           10-K for the year ended December 31, 1994, File
           No. 0-2610)

10.2       Amendment to Zions Bancorporation Pension Plan              *
           effective December 1, 1994 (incorporated by
           reference to Exhibit 10.2 of Zions
           Bancorporation's Annual Report on Form 10-K for
           the year ended December 31, 1994, File No.
           0-2610)

10.3       Zions Utah Bancorporation Supplemental Retirement           *
           Plan Form (incorporated by reference to Exhibit
           19.4 of Zions Utah Bancorporation's Quarterly
           Report on Form 10-Q for the quarter ended
           September 30, 1985, File No. 0-2610)

10.4       Zions Utah Bancorporation Key Employee Incentive            *
           Stock Option Plan approved by the shareholders of
           the Company on April 28, 1982 (incorporated by
           reference to Exhibit 10.1 of Zions
           Bancorporation's Quarterly Report on Form 10-Q
           for the quarter ended June 30, 1995, File No.
           0-2610)

10.5       Amendment No. 1 to Zions Bancorporation Key                 *
           Employee Incentive Stock Option Plan approved by
           the shareholders of the Company on April 27, 1990
           (incorporated by reference to Exhibit 10.2 of
           Zions Bancorporation's Quarterly Report on Form
           10-Q for the quarter ended June 30, 1995, File
           No. 0- 2610)

10.6       Amendment No. 2 to Zions Bancorporation Key                 *
           Employee Incentive Stock Option Plan approved by
           the shareholders of the Company of April 28, 1995
           (incorporated by reference to Exhibit 10.3 of
           Zions Bancorporation's Quarterly Report on Form
           10-Q for the quarter ended June 30, 1995, File
           No. 0- 2610)

                            II-9

<PAGE>

10.7       Zions Bancorporation Deferred Compensation Plan             *
           for Directors, as amended May 1, 1991
           (incorporated by reference to Exhibit 19 of Zions
           Bancorporation's Annual Report on Form 10-K for
           the year ended December 31, 1991, File No.
           0-2610)

10.8       Zions Bancorporation Senior Management Value                *
           Sharing Plan, Award Period 1993-1996
           (incorporated by reference to Exhibit 10.8 of
           Zions Bancorporation's Annual Report on Form 10-K
           for the year ended December 31, 1993, File No.
           0-2610

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 ended December 31, 1994, File No.
           0-2610)

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, File No.
           0-2610)

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, File No.
           0-2610)

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, File
           No. 0-2610)

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, File No. 0-2610)

10.14      Zions Bancorporation Non-Employee Directors Stock           *
           Option Plan approved by the shareholders of the
           Company on April 26, 1996 (incorporated by
           reference to Exhibit 10 of Zions Bancorporation's
           Quarterly Report on Form 10-Q for the quarter
           ended June 30, 1996, File No. 0-2610)

10.15      Form of Employment Agreement between Pitkin                 *
           County Bank & Trust Company and Charles B. Israel
           (incorporated by reference to Exhibits 10.16 to
           the Registrant's Form S-4

                            II-10

<PAGE>

           Registration Statement, File No. 333-23839, filed
           on March 24, 1997)

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

10.17      Form of Employment Agreement between The First              *
           National Bank in Alamosa and David E. Broyles
           (incorporated by reference to Exhibit 10.17 to
           the Registrant's Form S-4 Registration Statement,
           File No. 333-41821, filed on December 10, 1997)

10.18      Form of Employment Agreement between Valley                 *
           National Bank of Cortez and Richard C. Tucker
           (incorporated by reference to Exhibit 10.21 to
           the Registrant's Form S-4 Registration Statement,
           File No. 333-43405, filed on December 29, 1997)

10.19      Form of Employment Agreement between Vectra Bank            *
           Colorado, National Association and James A. Simon
           (incorporated by reference to Exhibit 10.21 to
           the Registrant's Form S-4 Registration Statement,
           File No. 333-50733, filed on April 22, 1998)

10.20      Form of Employment Agreement between Vectra Bank            *
           Colorado, National Association and John G.
           Jackson (incorporated by reference to Exhibit
           10.24 to the Registrant's Form S-4 Registration
           Statement, File No. 333-50823, filed on April 23,
           1998)

10.21      Form of Employment Agreement between Vectra Bank
           Colorado, National Association and Larry G.
           Neuschwanger (filed herewith as Exhibit V to the
           Agreement and Plan of Reorganization filed as
           Exhibit 2.1 above)

21         List of subsidiaries of Zions Bancorporation                *
           (incorporated by reference to Exhibit 21 of Zions
           Bancorporation's Annual Report on Form 10-K for
           the year ended December 31, 1997, File No.
           0-2610)

23.1       Consent of KPMG Peat Marwick LLP, independent
           certified public accountants for Zions
           Bancorporation (filed herewith)

                            II-11

<PAGE>

23.2       Consent of Fortner, Bayens, Levkulich & Co.,
           P.C., independent certified public accountants
           for Kersey Bancorp (filed herewith)

23.3       Consent of Arthur Andersen LLP, independent
           certified public accountants for Sumitomo Bank of
           California (filed herewith)

23.4       Consent of Howe Barnes Investments, Inc. (filed
           herewith)

23.5       Consent of Duane, Morris & Heckscher LLP
           (contained in their opinion filed as Exhibit 5)

23.6       Consent of Slivka Robinson Waters & O'Dorisio,
           P.C. (contained in their opinion filed as Exhibit
           8)

24.1       Power of Attorney (set forth on Page II-5 of the
           Registration Statement)

99.1       Preliminary copy of letter to shareholders of
           Kersey Bancorp, Inc. (filed herewith)

99.2       Preliminary copy of Notice of Special Meeting of
           Shareholders of Kersey Bancorp, Inc. (filed
           herewith)

99.3       Preliminary copy of form of proxy for use by
           shareholders of Kersey Bancorp, Inc. (filed
           herewith)

99.4       Form of Voting Agreement between Zions
           Bancorporation and various shareholders of Kersey
           Bancorp, Inc. (filed herewith as Exhibit III to
           the Agreement and Plan of Reorganization, filed
           as Exhibit 2.1 above)

99.5       Fairness Opinion of Howe Barnes Investments, Inc.
           (included in the Proxy Statement/Prospectus as
           Appendix B)

* incorporated by reference


                            II-12



                                                                     EXHIBIT 2.1

                                    EXHIBIT I

                        HOLDING COMPANY MERGER AGREEMENT

                               AGREEMENT OF MERGER


         This Agreement of Merger is made and entered into as of
[______________], 1998, between VAL COR BANCORPORATION, INC. ("Val Cor"), a
corporation organized under the laws of the State of Colorado, and KERSEY
BANCORP (the "Company"), a corporation organized under the laws of the State of
Colorado. Val Cor and the Company are hereinafter sometimes individually called
a "Constituent Corporation" and collectively called the "Constituent
Corporations."

                                    RECITALS

         Val Cor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. As of [______________], 1998,
the authorized capital stock of Val Cor consisted of [_________] shares of
Common Stock, [_____] par value, of which [_________] shares were issued and
outstanding; no shares of capital stock were held in its treasury on such date.
All of the capital stock of Val Cor is owned of record and beneficially by Zions
Bancorporation, a corporation organized under the laws of the State of Utah
("Zions Bancorp").

         The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado. As of [_______________]
1998, the authorized capital stock of the Company consisted of [_________]
shares of Company Common Stock, [____] par value (the "Company Common Stock"),
of which [_______] shares were issued and outstanding; no shares of capital
stock were held in its treasury on such date.

         Val Cor and the Company have entered into an Agreement and Plan of
Reorganization, dated May [_________], 1998 (the "Plan of Reorganization"),
setting forth certain representations, warranties, and agreements in connection
with the transactions therein and herein contemplated, which contemplates the
merger of the Company with and into Val Cor (the "Merger") in accordance with
this Agreement of Merger (the "Agreement").

         The Boards of Directors of each of Val Cor and the Company deem the
Merger advisable and in the best interests of each corporation and its
stockholders. The Boards of Directors of each of Val Cor and the Company, by
resolutions duly adopted, have approved the Plan of Reorganization. The Boards
of Directors of each of Val Cor and the Company, by resolutions duly adopted,
have approved this Agreement. The Boards of Directors of each of Val Cor and the
Company have directed that this Agreement, and authorization for the
transactions contemplated hereby, be submitted to stockholders of Val Cor and
the Company respectively for approval.

         At the Effective Date (as defined in Section 1.1 below) shares of
Company Common Stock shall be converted into the right to receive shares of the
common stock of Zions Bancorp, no par value (the "Zions Bancorp Stock"), as
provided herein.


<PAGE>

         In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:


                                    ARTICLE I

         1.1. Merger of the Company into Val Cor. The Company shall be merged
with and into Val Cor on the date and at the time to be specified in the
Articles of Merger to be filed with the Secretary of State of the State of
Colorado pursuant to section 7-111-105 of the Colorado Business Corporation Act
(such date and time being referred to herein as the "Effective Date").

         1.2. Effect of the Merger. At the Effective Date:

               (a) The Company and Val Cor shall be a single corporation, which
shall be Val Cor. Val Cor is hereby designated as the surviving corporation in
the Merger and is hereinafter sometimes called the "Surviving Corporation."

               (b) The separate existence of the Company shall cease.

               (c) The Surviving Corporation shall have all the rights,
privileges, immunities, and powers and shall assume and be subject to all the
duties and liabilities of a corporation organized under the Colorado Business
Corporation Act.

               (d) The Surviving Corporation shall thereupon and thereafter
possess all of the rights, privileges, immunities, and franchises, of a public
as well as of a private nature, of each of the Constituent Corporations; and all
property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares and all other choses in action, and all and
every other interest of and belonging to or due to each of the Constituent
Corporations shall be taken and deemed to be transferred to and vested in the
Surviving Corporation without further act or deed; and the title to any real
estate, or any interest therein, vested in either of the Constituent
Corporations shall not revert or be in any way impaired by reason of the Merger.

               (e) The Surviving Corporation shall thenceforth be responsible
and liable for all the liabilities and obligations of each of the Constituent
Corporations; and any claim existing or action or proceeding pending by or
against either of the Constituent Corporations may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted in
its place. The Surviving Corporation expressly assumes and agrees to perform all
of the Company's liabilities and obligations. Neither the rights of creditors
nor any liens upon the property of either Constituent Corporation shall be
impaired by the Merger.

               (f) The Articles of Incorporation of Val Cor as they exist
immediately prior to the Effective Date shall be the Articles of Incorporation
of the Surviving Corporation until later amended pursuant to Colorado law.

                                      - 2 -

<PAGE>

               (g) At the Effective Date and until surrendered for exchange and
payment, each outstanding stock certificate which, prior to the Effective Date,
represented shares of Company Common Stock shall, without further action, cease
to be an issued and existing share and shall be converted into a right to
receive from Zions Bancorp, and shall for all purposes represent the right to
receive, upon surrender of the certificate formerly representing such shares,
the number of shares of Zions Bancorp Stock specified in Article III; provided
that, with respect to any matters relating to stock certificates representing
Company Common Stock, Zions Bancorp may rely conclusively upon the record of
stockholders maintained by the Company containing the names and addresses of the
holders of record of the Company's Common Stock at the Effective Date.

         1.3.  Acts to Carry Out This Merger Plan.

               (a) The Company and its proper officers and directors shall and
will do all such acts and things as may be necessary or proper to vest, perfect,
or confirm title to such property or rights in Val Cor and otherwise to carry
out the purposes of this Agreement.

               (b) If, at any time after the Effective Date, Val Cor shall
consider or be advised that any further assignments or assurances in law or any
other acts are necessary or desirable to (i) vest, perfect, or confirm, of
record or otherwise, in Val Cor its right, title, or interest in or under any of
the rights, properties, or assets of the Company acquired or to be acquired by
Val Cor as a result of, or in connection with, the Merger, or (ii) otherwise
carry out the purposes of this Agreement, the Company and its proper officers
and directors shall be deemed to have granted to Val Cor an irrevocable power of
attorney to execute and deliver all such proper deeds, assignments, and
assurances in law and to do all acts necessary or proper to vest, perfect, or
confirm title to and possession of such rights, properties, or assets in Val Cor
and otherwise to carry out the purposes of this Agreement; and the proper
officers and directors of Val Cor are fully authorized in the name of the
Company or otherwise to take any and all such action.


                                   ARTICLE II

         2.1. Capitalization. The authorized shares of capital stock of Val Cor
as of the Effective Date shall be [__________] shares of Common Stock, [______]
par value.

         2.2. By-Laws. The By-Laws of Val Cor as they exist immediately prior to
the Effective Date shall be the By-Laws of Val Cor until later amended pursuant
to Colorado law.


                                      - 3 -
<PAGE>

                                   ARTICLE III

         3.1.  Manner of Converting Shares.

               (a) Subject to the terms, conditions, and limitations set forth
herein, upon surrender of his or her certificate or certificates each holder of
shares of Company Common Stock shall be entitled to receive, in exchange for
each share of Company Common Stock held of record by such stockholder as of the
Effective Date, that number of shares of the common stock of Zions Bancorp, no
par value (the "Zions Bancorp Stock") calculated by dividing the Purchase Price
by the Average Closing Price, and by further dividing the number so reached by
the number of shares of Company Common Stock that shall be issued and
outstanding at the Effective Date.

               (b) Certain Definitions. For the purposes of this Agreement, the
following terms shall have the meanings set forth in this Subparagraph (b).

                  (i) Audit Expenses. All expenses incurred by the Company and
the Bank through the Effective Date, determined on a pre-tax basis in accordance
with generally accepted accounting principles, with respect to the conduct of
the audit and the delivery of the report of audit of the consolidated accounts
of the Company and the Bank by Fortner, Bayens, Levkulich and Co. as of December
31, 1997 and for the year then ended.

                  (ii) Average Closing Price. The average of each Daily Sales
Price over the Pricing Period.

                  (iii) Daily Sales Price. For any trading day, the last
reported sales price of Zions Bancorp Stock as such price is reported by the
Nasdaq National Market, or in the absence thereof by such other source upon
which Zions Bancorp and the Company shall mutually agree.

                  (iv) Expense Limit. Subject to increase pursuant to the next
sentence,

                           (A) $185,000, if the Audit Expenses are greater than
$90,000; or

                           (B) $95,000 plus the Audit Expenses, if the Audit
Expenses are $90,000 or less. In the event that quarterly financial statements
for the Company for quarterly periods ended after March 31, 1998 are required by
applicable rules of the Securities and Exchange Commission (the "SEC") to be
included in the registration statement to be filed by Zions Bancorp with the SEC
pursuant to the Securities Act of 1933 in connection with the registration of
the shares of Zions Bancorp Stock to be used as consideration in connection with
the Holding Company Merger, the Expense Limit shall be increased by $20,000 for
each quarterly period ended after March 31, 1998 for which such financial
statements are required.

                  (v) Pricing Period. The ten consecutive trading days ending on
and including the third trading day preceding the Effective Date.

                                      - 4 -


<PAGE>



                  (vi) Purchase Price. $28,200,000.00, reduced as follows:

                           (A) if the Transaction Expenses exceed the Expense
Limit, then the reduction shall be the amount by which the Transaction Expenses
exceed the Expense Limit, net of any associated tax benefit; and

                           (B) if the Transaction Expenses do not exceed the
Expense Limit, then the reduction shall be zero.

                  (vii) Transaction Expenses.

                           (A) All expenses incurred from January 1, 1998
through the Effective Date, determined on a pre-tax basis in accordance with
generally accepted accounting principles, with respect to attorneys,
accountants, investment bankers, consultants, brokers and finders who will have
rendered services to the Company or the Bank in connection with the transactions
contemplated by this Agreement, and

                           (B) all of the other expenses incurred from January
1, 1998 through the Effective Date outside of the ordinary course of business of
the Company and the Bank, other than the cost of printing and delivering the
proxy materials to be transmitted to shareholders of the Company in connection
with the Holding Company Merger.

         3.2. No Fractional Shares. Zions Bancorp will not issue fractional
shares of its stock. In lieu of fractional shares of Zions Bancorp Stock, if
any, each shareholder of the Company who is entitled to a fractional share of
Zions Bancorp Stock shall receive an amount of cash equal to the product of such
fraction times the Average Closing Price. Such fractional share interest shall
not include the right to vote or to receive dividends or any interest thereon.

         3.3. Dividends; Interest. No shareholder of the Company will be
entitled to receive dividends on his or her Zions Bancorp Stock until he or she
exchanges his or her certificates representing Company Common Stock for Zions
Bancorp Stock. Any dividends declared on Zions Bancorp Stock to holders of
record on or after the Effective Date shall, with respect to stock to be
delivered pursuant to this Agreement to shareholders of the Company who have not
exchanged their certificates representing Company Common Stock for Zions Bancorp
Stock, be paid to the Exchange Agent (as designated in Section 3.4 of this
Agreement) and, upon receipt from a former shareholder of the Company of
certificates representing shares of Company Common Stock, the Exchange Agent
shall forward to such former shareholder of the Company (i) certificates
representing his or her shares of Zions Bancorp Stock, (ii) dividends declared
thereon subsequent to the Effective Date (without interest) and (iii) the cash
value of any fractional shares determined in accordance with Section 3.2 hereof.

                                      - 5 -


<PAGE>

         3.4.  Designation of Exchange Agent.

               (a) The parties of this Agreement hereby designate Zions First
National Bank, a national banking association with its head office located in
Salt Lake City, Utah ("Zions Bank") as Exchange Agent to effect the exchanges
contemplated hereby.

               (b) Zions Bancorp will, on the Effective Date or as soon
thereafter as is practicable, issue and deliver to Zions Bank the share
certificates representing shares of Zions Bancorp Stock and the cash to be paid
to holders of Company Common Stock in accordance with this Agreement.

         3.5. Notice of Exchange. Promptly after the Effective Date, Zions Bank
shall mail to each holder of one or more certificates formerly representing
Company Common Stock, except to such holders as shall have waived the notice
required by this Section 3.5, a notice specifying the Effective Date and
notifying such holder to surrender his or her certificate or certificates to
Zions Bank for exchange. Such notice shall be mailed to holders by regular mail
at their addresses on the records of the Company.

         3.6. Treatment of Stock Options. Each stock option to purchase Company
Common Stock not exercised prior to the Effective Date shall automatically be
canceled on and as of the Effective Date.


                                   ARTICLE IV

         4.1. Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original, but such
counterparts together shall be deemed to be one and the same instrument and to
become effective when one or more counterparts have been signed by each of the
parties hereto. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for the other counterpart.

         4.2. Section Headings. The section and subsection headings herein have
been inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.

         4.3. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah and Weld County, Colorado to be proper
jurisdictions and venues for any suit or action arising out of this Agreement.
Each of the parties consents to personal jurisdiction in each of such venues for
such a proceeding and agrees that it may be served with process in any action
with respect to this Agreement or the transactions contemplated thereby by
certified or registered mail, return receipt

                                      - 6 -
<PAGE>

requested, or to its registered agent for service of process in the state of
Utah or Colorado. Each of the parties irrevocably and unconditionally waives and
agrees, to the fullest extent permitted by law, not to plead any objection that
it may now or hereafter have to the laying of venue or the convenience of the
forum of any action or claim with respect to this Agreement or the transactions
contemplated thereby brought in the courts aforesaid.

         4.4. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.

         4.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto, provided
that this Agreement may not be amended after the action by shareholders of the
Company in any respect that would prejudice the economic interests of such
Company shareholders, or any of them, except as specifically provided herein or
by like action of such shareholders.

         4.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of Val
Cor and the Company at any time prior to the Effective Date, and there shall be
no liability on the part of either of the parties hereto (or any of their
respective officers or directors) except to the extent provided in the Plan of
Reorganization.


                                      - 7 -
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

<TABLE>
<S>                                                      <C>
                                                         VAL COR BANCORPORATION, INC.



Attest:____________________________________              By:______________________________________
                  Ray L. Nash                                                Gary S. Judd
      Chief Financial Officer and Secretary                  President and Chief Executive Officer





                                                         KERSEY BANCORP



Attest:____________________________________              By:______________________________________
                                                                      Larry G. Neuschwanger
                                                                              President
</TABLE>


                                      - 8 -


<PAGE>
______________________________
                              )
State of Colorado             )
                              )       ss.
County of Denver              )
______________________________)

          On this [________] day of [________], 1998, before me personally
appeared Gary S. Judd, to me known to be the President and Chief Executive
Officer of Val Cor Bancorporation, Inc., and acknowledged said instrument to be
the free and voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
said instrument and that the seal affixed is the corporate seal of said
corporation.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.



                                                      __________________________
                                                            Notary Public



                                      - 9 -


<PAGE>





______________________________
                              )
State of Colorado             )
                              )       ss.
County of Weld                )
______________________________)


          On this [___________] day of [_________] 1998, before me personally
appeared Larry G. Neuschwanger, to me known to be the President of Kersey
Bancorp, and acknowledged said instrument to be the free and voluntary act and
deed of said corporation, for the uses and purposes therein mentioned, and on
oath stated that he was authorized to execute said instrument and that the seal
affixed is the corporate seal of said corporation.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                                      __________________________
                                                            Notary Public



                                     - 10 -


<PAGE>

                                   EXHIBIT II

                              BANK MERGER AGREEMENT

                               AGREEMENT OF MERGER


          This Agreement of Merger is made and entered into as of
[______________], 1998, between BANK COLORADO, NATIONAL ASSOCIATION ("BCNA"), a
national banking association organized under the laws of the United States, and
INDEPENDENT BANK (the "Bank"), a banking corporation organized under the laws of
the State of Colorado. BCNA and the Bank are hereinafter sometimes individually
called a "Constituent Association" and collectively called the "Constituent
Associations."

                                    RECITALS

          BCNA is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. As of
[________], 1998, the authorized capital stock of BCNA consisted of [_________]
shares of Common Stock, $5.00 par value, of which [__________] shares were
issued and outstanding; no shares of capital stock were held in its treasury on
such date.

          The Bank is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. As of [________], 1998, the
authorized capital stock of the Bank consisted of [________] shares of Bank
Common Stock, [____] par value (the "Bank Common Stock"), of which [________]
shares were issued and outstanding; no shares of capital stock were held in its
treasury on such date.

         BCNA and the Bank have entered into an Agreement and Plan of
Reorganization, dated May [___], 1998 (the "Plan of Reorganization"), setting
forth certain representations, warranties, and agreements in connection with
the transactions therein and herein contemplated, which contemplates the merger
of the Bank with and into BCNA (the "Merger") in accordance with this Agreement
of Merger (the "Agreement").

         The Boards of Directors of each of BCNA and the Bank deem the Merger
advisable and in the best interests of each association and its stockholders.
The Boards of Directors of each of BCNA and the Bank, by resolutions duly
adopted, have approved the Plan of Reorganization. The Boards of Directors of
each of BCNA and the Bank, by resolutions duly adopted, have approved this
Agreement. The Boards of Directors of each of BCNA and the Bank have directed
that this Agreement, and authorization for the transactions contemplated hereby,
be submitted to stockholders of BCNA and the Bank respectively for approval.

         At the Effective Date (as defined in Section 1.1 below) shares of Bank
Common Stock shall be canceled as provided herein.

         In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:



<PAGE>

                                    ARTICLE I

         1.1. Merger of the Bank into BCNA. The Bank shall be merged with and
into BCNA on the date and at the time to be specified in the Articles of Merger
to be filed with the Comptroller of the Currency pursuant to the National Bank
Act (such date and time being referred to herein as the "Effective Date").

         1.2. Effect of the Merger. At the Effective Date:

                  (a) The Bank and BCNA shall be a single association, which
shall be BCNA. BCNA is hereby designated as the surviving association in the
Merger and is hereinafter sometimes called the "Surviving Association."

                  (b)      The separate existence of the Bank shall cease.

                  (c) The currently outstanding [_________] shares of common
stock of BCNA, each of $5.00 par value, will remain outstanding as shares of the
$5.00 par value common stock of BCNA, and the holders of such stock shall retain
their present rights.

                  (d) Each share of Bank Common Stock shall automatically be
canceled.

                  (e) The Surviving Association shall have all the rights,
privileges, immunities, and powers and shall assume and be subject to all the
duties and liabilities of a national banking association organized under the
National Bank Act.

                  (f) The Surviving Association shall thereupon and thereafter
possess all of the rights, privileges, immunities, and franchises, of a public
as well as of a private nature, of each of the Constituent Associations; and all
property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares and all other choses in action, and all and
every other interest of and belonging to or due to each of the Constituent
Associations shall be taken and deemed to be transferred to and vested in the
Surviving Association without further act or deed; and the title to any real
estate, or any interest therein, vested in either of the Constituent
Associations shall not revert or be in any way impaired by reason of the Merger.

                  (g) The Surviving Association shall thenceforth be responsible
and liable for all the liabilities and obligations of each of the Constituent
Associations; and any claim existing or action or proceeding pending by or
against either of the Constituent Associations may be prosecuted as if the
Merger had not taken place, or the Surviving Association may be substituted in
its place. The Surviving Association expressly assumes and agrees to perform all
of the liabilities and obligations of the Bank. Neither the rights of creditors
nor any liens upon the property of either Constituent Association shall be
impaired by the Merger.


                                      - 2 -


<PAGE>

                  (h) The name of the Surviving Association shall be "Bank
Colorado, National Association."

                  (i) The Articles of Association of BCNA as they exist
immediately prior to the Effective Date shall be the Articles of Association of
the Surviving Association until later amended pursuant to the laws of the United
States.

                  (j) The By-Laws of BCNA as they exist immediately prior to the
Effective Date shall be the By-Laws of BCNA until later amended pursuant to the
laws of the United States.

         1.3.  Acts to Carry Out This Merger Plan.

                  (a) The Bank and its proper officers and directors shall and
will do all such acts and things as may be necessary or proper to vest, perfect,
or confirm title to such property or rights in BCNA and otherwise to carry out
the purposes of this Agreement.

                  (b) If, at any time after the Effective Date, BCNA shall
consider or be advised that any further assignments or assurances in law or any
other acts are necessary or desirable to (i) vest, perfect, or confirm, of
record or otherwise, in BCNA its right, title, or interest in or under any of
the rights, properties, or assets of the Bank acquired or to be acquired by BCNA
as a result of, or in connection with, the Merger, or (ii) otherwise carry out
the purposes of this Agreement, the Bank and its proper officers and directors
shall be deemed to have granted to BCNA an irrevocable power of attorney to
execute and deliver all such proper deeds, assignments, and assurances in law
and to do all acts necessary or proper to vest, perfect, or confirm title to and
possession of such rights, properties, or assets in BCNA and otherwise to carry
out the purposes of this Agreement; and the proper officers and directors of
BCNA are fully authorized in the name of the Bank or otherwise to take any and
all such action.


                                   ARTICLE II

         2.1. Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original, but such
counterparts together shall be deemed to be one and the same instrument and to
become effective when one or more counterparts have been signed by each of the
parties hereto. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for the other counterpart.

         2.2. Section Headings. The section and subsection headings herein have
been inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.


                                      - 3 -


<PAGE>

         2.3. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah and Weld County, Colorado to be proper
jurisdictions and venues for any suit or action arising out of this Agreement.
Each of the parties consents to personal jurisdiction in each of such venues for
such a proceeding and agrees that it may be served with process in any action
with respect to this Agreement or the transactions contemplated thereby by
certified or registered mail, return receipt requested, or to its registered
agent for service of process in the state of Utah or Colorado. Each of the
parties irrevocably and unconditionally waives and agrees, to the fullest extent
permitted by law, not to plead any objection that it may now or hereafter have
to the laying of venue or the convenience of the forum of any action or claim
with respect to this Agreement or the transactions contemplated thereby brought
in the courts aforesaid.

         2.4. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.

         2.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto.

         2.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of BCNA
and the Bank at any time prior to the Effective Date, and there shall be no
liability on the part of either of the parties hereto (or any of their
respective officers or directors) except to the extent provided in the Plan of
Reorganization.


                                      - 4 -


<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

<TABLE>
<S>                                                      <C>
                                                         BANK COLORADO, NATIONAL
                                                         ASSOCIATION



Attest:_______________________                           By:__________________________________








                                                         INDEPENDENT BANK



Attest:_______________________                           By:__________________________________
                                                                  Larry G. Neuschwanger
                                                         President and Chief Executive Officer
</TABLE>

                                      - 5 -


<PAGE>

______________________________
                              )
State of Colorado             )
                              )       ss.
County of Denver              )
______________________________)


          On this [_______] day of [_______], 1998, before me personally
appeared Gary S. Judd, to me known to be the President and Chief Executive
Officer of Bank Colorado, National Association, and acknowledged said instrument
to be the free and voluntary act and deed of said association, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
said instrument and that the seal affixed is the corporate seal of said
association.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                                         _______________________
                                                            Notary Public



                                      - 6 -


<PAGE>

______________________________
                              )
State of Colorado             )
                              )       ss.
County of Weld                )
______________________________)


          On this [________] day of [_________], 1998, before me personally
appeared Larry G. Neuschwanger, to me known to be the President and Chief
Executive Officer of Independent Bank, and acknowledged said instrument to be
the free and voluntary act and deed of said association, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
said instrument and that the seal affixed is the corporate seal of said
association.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                                         _______________________
                                                             Notary Public

                                      - 7 -


<PAGE>

                                   EXHIBIT III

                                VOTING AGREEMENT



                                                 May [__], 1998


Zions Bancorporation
One South Main, Suite 1380
Salt Lake City, Utah  84111

Mesdames and Gentlemen:

         The undersigned understands that Zions Bancorporation ("Zions Bancorp")
is about to enter into an Agreement and Plan of Reorganization with Kersey
Bancorp (the "Company") (the "Agreement"). The Agreement provides for the merger
of the Company with and into Val Cor Bancorporation, Inc., a wholly-owned
subsidiary of Zions Bancorp (the "Merger") and the conversion of outstanding
shares of Company Stock into Zions Bancorp Common Stock and cash in lieu of
fractional shares in accordance with the formula therein set forth.

         In order to induce Zions Bancorp to enter into the Agreement, and
intending to be legally bound hereby, the undersigned, subject to the conditions
hereinafter stated, represents, warrants, and agrees that at the Company
Shareholders' Meeting contemplated by Section 4.1 of the Agreement and Plan of
Reorganization (the "Meeting"), and any adjournment thereof, the undersigned
will, in person or by proxy, vote or cause to be voted in favor of the Agreement
and the Merger the shares of Company Common Stock beneficially owned by the
undersigned individually or, to the extent of the undersigned's proportionate
voting interest, jointly with other persons, as well as, to the extent of the
undersigned's proportionate voting interest, any other shares of Company Common
Stock over which the undersigned may hereafter acquire beneficial ownership in
such capacities (collectively, the "Shares"). Subject to the final paragraph of
this agreement, the undersigned further agrees that he will use his best efforts
(not including the payment of money or other consideration) to cause any other
shares of Company Common Stock over which he has or shares voting power to be
voted in favor of the Agreement and the Merger.

         The undersigned further represents, warrants, and agrees that beginning
upon the authorization and execution of the Agreement by the Company until the
earlier of (i) the consummation of the Merger or (ii) the termination of the
Agreement in accordance with its terms, the undersigned will not, directly or
indirectly:



<PAGE>


Zions Bancorporation
May [__], 1998
Page 2





         (a) vote any of the Shares, or cause or permit any of the Shares to be
voted, in favor of any other sale of control, merger, consolidation, plan of
liquidation, sale of assets, reclassification, or other transaction involving
the Company or any of its subsidiaries which would have the effect of assisting
or facilitating the acquisition of control by any person other than Zions
Bancorp or an affiliate thereof over the Company or any substantial portion of
its assets or assisting or facilitating the acquisition of control by any person
other than Zions Bancorp or an affiliate, or the Company or a wholly-owned
subsidiary of the Company, of any subsidiary of the Company or any substantial
portion of its assets. As used herein, the term "control" means (1) the ability
to direct the voting of 10 percent or more of the outstanding voting securities
of a person having ordinary voting power in the election of directors or in the
election of any other body having similar functions or (2) the ability to direct
the management and policies of a person, whether through ownership of
securities, through any contract, arrangement, or understanding or otherwise.

         (b) voluntarily sell or otherwise transfer any of the Shares, or cause
or permit any of the Shares to be sold or otherwise transferred (i) pursuant to
any tender offer, exchange offer, or similar proposal made by any person other
than Zions Bancorp or an affiliate thereof, (ii) to any person seeking to obtain
control (as the term "control" is defined in paragraph (a), above) of the
Company, any of its subsidiaries or any substantial portion of the assets of the
Company or any subsidiary thereof or to any other person (other than Zions
Bancorp or an affiliate thereof) under circumstances where such sale or transfer
may reasonably be expected to assist a person seeking to obtain such control,
(iii) for the purpose of avoiding the obligations of the undersigned under this
agreement, or (iv) to any transferee unless such transferee expressly agrees in
writing to be bound by the terms of this agreement in all events.

         It is understood and agreed that this agreement relates solely to the
capacity of the undersigned as a shareholder or other beneficial owner of the
Shares and does not prohibit the undersigned, if a member of the Board of
Directors of the Company or a member of the Board of Directors of Independent
Bank, from acting, in his or her capacity as a director, as the undersigned may
determine to be appropriate in light of the obligations of the undersigned as a
director. It is further understood and agreed that the term "Shares" shall not
include any securities beneficially owned by the undersigned as a trustee or
fiduciary for another (unless such other person is affiliated with the
undersigned or is bound by an agreement with Zions



<PAGE>


Zions Bancorporation
May [__], 1998
Page 3





Bancorp substantially similar to this agreement), and that this agreement is not
in any way intended to affect the exercise by the undersigned of the
undersigned's fiduciary responsibility in respect of any such securities.

                                                     Very truly yours,


                                                     ___________________________


Accepted and Agreed to:
ZIONS BANCORPORATION


By:___________________________

Title:________________________




<PAGE>


Zions Bancorporation
May [__], 1998
Page 4





Name of Shareholder:


                    Shares of Common Stock of Kersey Bancorp
                               Beneficially Owned
                              As of May [__], 1998


  Name(s) of                                                           Number of
Record Owner(s)                   Beneficial Ownership 1/               Shares











- ----------------
          For purposes of this Agreement, shares are beneficially owned by the
shareholder named above if held in any capacity other than a fiduciary capacity
(other than a revocable living trust and other than a fiduciary capacity on
behalf of a person who is affiliated with the shareholder or is bound by an
agreement with Zions Bancorp substantially similar to this agreement) and if
the shareholder named above has the power (alone or, in the case of shares held
jointly with his or her spouse, together with his or her spouse) to direct the
voting of such shares.



<PAGE>

                                    EXHIBIT V

                              EMPLOYMENT AGREEMENT

                              EMPLOYMENT AGREEMENT


         This EMPLOYMENT AGREEMENT (the "Agreement") made and entered into this
[___] day of [_________], 1998, by and between LARRY G. NEUSCHWANGER
("Executive") and BANK COLORADO, NATIONAL ASSOCIATION, a national banking
association organized under the laws of the United States ("Resulting Bank")

                         W I T N E S S E T H  T H A T :

         WHEREAS, the Agreement and Plan of Reorganization (the "Plan") dated as
of May [___], 1998 by and among Zions Bancorporation, a Utah corporation having
its principal office in Salt Lake City, Utah ("Zions Bancorp"), Val Cor
Bancorporation, Inc., a Colorado corporation having its principal office in
Cortez, Colorado, Resulting Bank, Kersey Bancorp, a Colorado corporation having
its principal office in Kersey, Colorado, and Independent Bank, a banking
corporation organized under the laws of the State of Colorado (the "Bank"),
provides that the Bank will be merged with and into Resulting Bank;

         WHEREAS, Executive is President and Chief Executive Officer of the
Bank;

         WHEREAS, Resulting Bank desires to secure the employment of Executive
upon consummation of the transactions contemplated in the Plan;

         WHEREAS, Executive is desirous of entering into the Agreement for such
periods and upon the terms and conditions set forth herein; and

         WHEREAS, to assist in achieving the objectives of the transactions
described in the Plan, section 4.10 of the Plan contemplates that Executive will
enter into an employment agreement as a condition to the consummation of the
transactions described therein.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements hereinafter set forth, the parties agree as follows:

         1.  Employment; Responsibilities and Duties.

         (a) Resulting Bank hereby agrees to employ Executive, and Executive
hereby agrees to serve as [______________] of Resulting Bank and of any
depository institution which is successor-in-interest thereto ("Resulting Bank"
hereafter to include any depository institution which is successor-in-interest
thereto) during the Term of Employment. Executive shall have such duties,
responsibilities, and authority as shall be set forth in the bylaws of Resulting
Bank on the date of this Agreement or as may otherwise be determined by
Resulting Bank.

         (b) Executive shall devote his full working time and best efforts to
the performance of his responsibilities and duties hereunder and to the
retention of the customer relationships to


<PAGE>

which the Bank has been a party prior to the date of this Agreement. During the
Term of Employment, Executive shall not, without the prior written consent of
the Board of Directors of Resulting Bank, render services as an employee,
independent contractor, or otherwise, whether or not compensated, to any person
or entity other than Resulting Bank or its affiliates; provided that Executive
may, where involvement in such activities does not individually or in the
aggregate significantly interfere with the performance by Executive of his
duties or violate the provisions of section 4 hereof, (i) render services to
charitable organizations, (ii) manage his personal investments, and (iii) with
the prior permission of the Board of Directors of Resulting Bank, hold such
other directorships or part-time academic appointments or have such other
business affiliations as would otherwise be prohibited under this section 1.

         2.  Term of Employment.

         (a) The term of this Agreement ("Term of Employment") shall be the
period commencing on the date hereof (the "Commencement Date") and continuing
until the Termination Date, which shall mean the earliest to occur of:

                  (i) the third anniversary of the Commencement Date, unless the
Term of Employment shall be extended by mutual written agreement of Executive
and Resulting Bank;

                  (ii) the death of Executive;

                  (iii) Executive's inability to perform his duties hereunder,
as a result of physical or mental disability as reasonably determined by the
personal physician of Executive, for a period of at least 180 consecutive days
or for at least 180 days during any period of twelve consecutive months during
the Term of Employment; or

                  (iv) the discharge of Executive by Resulting Bank "for cause,"
which shall mean one or more of the following:

                           (A) any willful or gross misconduct by Executive with
respect to the business and affairs of Resulting Bank, or with respect to any of
its affiliates for which Executive is assigned material responsibilities or
duties;

                           (B) the conviction of Executive of a felony (after
the earlier of the expiration of any applicable appeal period without perfection
of an appeal by Executive or the denial of any appeal as to which no further
appeal or review is available to Executive) whether or not committed in the
course of his employment by Resulting Bank;

                           (C) Executive's willful neglect, failure, or refusal
to carry out his duties hereunder in a reasonable manner; or

                           (D) the breach by Executive of any representation or
warranty in section 6(a) hereof or of any agreement contained in section 1, 4,
5, or 6(b) hereof, which breach

                                      - 2 -


<PAGE>

is material and adverse to Resulting Bank or any of its affiliates for which
Executive is assigned material responsibilities or duties; or

                  (v) Executive's resignation from his position as
[____________________] of Resulting Bank; or

                  (vi) the termination of Executive's employment by Resulting
Bank "without cause," which shall be for any reason other than those set forth
in subsections (i), (ii), (iii), (iv), or (v) of this section 2(a), at any time,
upon the thirtieth day following notice to Executive.

         (b) In the event that the Term of Employment shall be terminated for
any reason other than that set forth in section 2(a)(vi) hereof, Executive shall
be entitled to receive, upon the occurrence of any such event:

                  (i) any salary (as hereinafter defined) payable pursuant to
section 3(a)(i) hereof which shall have accrued as of the Termination Date; and

                  (ii) such rights as Executive shall have accrued as of the
Termination Date under the terms of any plans or arrangements in which he
participates pursuant to section 3(b) hereof, any right to reimbursement for
expenses accrued as of the Termination Date payable pursuant to section 3(e)
hereof, and the right to receive the cash equivalent of paid annual leave and
sick leave accrued as of the Termination Date pursuant to section 3(c) hereof.

         (c) In the event that the Term of Employment shall be terminated for
the reason set forth in section 2(a)(vi) hereof, Executive shall be entitled to
receive:

                  (i) for the period commencing on the date immediately
following the Termination Date and ending upon and including the third
anniversary of the Commencement Date, salary payable at the rate established
pursuant to section 3(a)(i) hereof, in a manner consistent with the normal
payroll practices of Resulting Bank with respect to executive personnel as
presently in effect or as they may be modified by Resulting Bank from time to
time; and

                  (ii) such rights as Executive may have accrued as of the
Termination Date under the terms of any plans or arrangements in which he
participates pursuant to section 3(b) hereof, any right to reimbursement for
expenses accrued as of the Termination Date payable pursuant to section 3(e)
hereof, and the right to receive the cash equivalent of paid annual leave and
sick leave accrued as of the Termination Date pursuant to section 3(c) hereof.

         3. Compensation. For the services to be performed by Executive for
Resulting Bank under this Agreement, Executive shall be compensated in the
following manner:

         (a) Salary.


                                      - 3 -


<PAGE>

                  (i) During the Term of Employment Resulting Bank shall pay
Executive a salary which shall be at a rate of not less than $82,000 per annum.
Salary shall be payable in accordance with the normal payroll practices of
Resulting Bank with respect to executive personnel as presently in effect or as
they may be modified by Resulting Bank from time to time.

                  (ii) During the Term of Employment Executive shall be eligible
to be considered for salary increases, upon review, in accordance with the
compensation policies of Resulting Bank with respect to executive personnel as
presently in effect or as they may be modified by Resulting Bank from time to
time.

         (b) Employee Benefit Plans or Arrangements. During the Term of
Employment, Executive shall be entitled to participate in all employee benefit
plans of Resulting Bank, as presently in effect or as they may be modified by
Resulting Bank from time to time, under such terms as may be applicable to
officers of Executive's rank employed by Resulting Bank or its affiliates,
including, without limitation, plans providing retirement benefits, medical
insurance, life insurance, disability insurance, and accidental death or
dismemberment insurance.

         (c) Vacation and Sick Leave. During the Term of Employment, Executive
shall be entitled to paid annual vacation periods and sick leave in accordance
with the policies of Resulting Bank as in effect as of the Commencement Date or
as may be modified by Resulting Bank from time to time as may be applicable to
officers of Executive's rank employed by Resulting Bank or its affiliates, but
in no event less than that provided to Executive by the Bank at December 31,
1997.

         (d) Withholding. All compensation to be paid to Executive hereunder
shall be subject to required withholding and other taxes.

         (e) Expenses. During the Term of Employment, Executive shall be
reimbursed for reasonable travel and other expenses incurred or paid by
Executive in connection with the performance of his services under this
Agreement, upon presentation of expense statements or vouchers or such other
supporting information as may from time to time be requested, in accordance with
such policies of Resulting Bank as are in effect as of the Commencement Date and
as may be modified by Resulting Bank from time to time, under such terms as may
be applicable to officers of Executive's rank employed by Resulting Bank or its
affiliates.

         4.  Confidential Business Information; Non-Competition.

         (a) Executive acknowledges that certain business methods, creative
techniques, and technical data of Zions Bancorp and Resulting Bank and their
affiliates and the like are deemed by Resulting Bank to be and are in fact
confidential business information either of Zions Bancorp or Resulting Bank or
their affiliates or are entrusted to third parties. Such confidential
information includes but is not limited to procedures, methods, sales
relationships developed while in the service of Resulting Bank or its
affiliates, knowledge of customers and their requirements, marketing plans,
marketing information, studies, forecasts, and surveys,

                                      - 4 -


<PAGE>

competitive analyses, mailing and marketing lists, new business proposals, lists
of vendors, consultants, and other persons who render service or provide
material to Zions Bancorp or Resulting Bank or their affiliates, and
compositions, ideas, plans, and methods belonging to or related to the affairs
of Zions Bancorp or Resulting Bank or their affiliates. In this regard,
Resulting Bank asserts proprietary rights in all of its business information and
that of its affiliates except for such information as is clearly in the public
domain. Notwithstanding the foregoing, information that would be generally known
or available to persons skilled in Executive's fields shall be considered to be
"clearly in the public domain" for the purposes of the preceding sentence.
Executive agrees that he will not disclose or divulge to any third party, except
as may be required by his duties hereunder, by law, regulation, or order of a
court or government authority, or as directed by Resulting Bank, nor shall he
use to the detriment of Resulting Bank or its affiliates or use in any business
or on behalf of any business competitive with or substantially similar to any
business of Zions Bancorp or Resulting Bank or their affiliates, any
confidential business information obtained during the course of his employment
by Resulting Bank. The foregoing shall not be construed as restricting Executive
from disclosing such information to the employees of Zions Bancorp or Resulting
Bank or their affiliates.

         (b) Executive hereby agrees that from the Commencement Date until the
earlier of the second anniversary of the Termination Date or the fifth
anniversary of the Commencement Date, Executive will not (i) engage in the
banking business other than on behalf of Zions Bancorp or Resulting Bank or
their affiliates within the Market Area (as hereinafter defined), (ii) directly
or indirectly own, manage, operate, control, be employed by, or provide
management or consulting services in any capacity to any firm, corporation, or
other entity (other than Zions Bancorp or Resulting Bank or their affiliates)
engaged in the banking business in the Market Area, or (iii) directly or
indirectly solicit or otherwise intentionally cause any employee, officer, or
member of the respective Boards of Directors of Resulting Bank or any of its
affiliates to engage in any action prohibited under (i) or (ii) of this section
4(b); provided that the ownership by Executive as an investor of not more than
five percent of the outstanding shares of stock of any corporation whose stock
is listed for trading on any securities exchange or is quoted on the automated
quotation system of the National Association of Securities Dealers, Inc., or the
shares of any investment company as defined in section 3 of the Investment
Company Act of 1940, as amended, shall not in itself constitute a violation of
Executive's obligations under this section 4(b).

         (c) Executive acknowledges and agrees that irreparable injury will
result to Resulting Bank in the event of a breach of any of the provisions of
this section 4 (the "Designated Provisions") and that Resulting Bank will have
no adequate remedy at law with respect thereto. Accordingly, in the event of a
material breach of any Designated Provision, and in addition to any other legal
or equitable remedy Resulting Bank may have, Resulting Bank shall be entitled to
the entry of a preliminary and permanent injunction (including, without
limitation, specific performance) by a court of competent jurisdiction in Salt
Lake County, Utah, Denver County, Colorado, or elsewhere, to restrain the
violation or breach thereof by Executive or any affiliates, agents, or any other
persons acting for or with Executive in any capacity whatsoever, and Executive
submits to the jurisdiction of such court in any such action.

                                      - 5 -


<PAGE>

         (d) It is the desire and intent of the parties that the provisions of
this section 4 shall be enforced to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular provision of this section 4 shall be
adjudicated to be invalid or unenforceable, such provision shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made. In
addition, should any court determine that the provisions of this section 4 shall
be unenforceable with respect to scope, duration, or geographic area, such court
shall be empowered to substitute, to the extent enforceable, provisions similar
hereto or other provisions so as to provide to Resulting Bank, to the fullest
extent permitted by applicable law, the benefits intended by this section 4.

         (e) As used herein, "Market Area" shall mean Larimer, Logan, Morgan,
and Weld Counties, Colorado.

         (f) In consideration of Executive's agreements under this section 4,
Resulting Bank shall pay to Executive, during the period commencing on the
earlier of the Termination Date or the third anniversary of the Commencement
Date, and ending at the end of the period provided in section 4(b), but only so
long as Executive is in compliance with his agreements under this section 4, the
amount of $12,500 per month (for total payments during such period of $300,000).
Such payments shall be made on the first day of each month commencing on the
first such date to occur during the period set forth in this section 4(f). Such
payments shall be in addition to any other amounts payable under this Agreement
and shall not be curtailed, diminished or terminated as a result of any
reduction pursuant to section 4(d) in the scope, duration or geographic area of
the restrictions contained in this section 4.

         5. Life Insurance. In light of the unusual abilities and experience of
Executive, Resulting Bank in its discretion may apply for and procure as owner
and for its own benefit insurance on the life of Executive, in such amount and
in such form as Resulting Bank may choose. Resulting Bank shall make all
payments for such insurance and shall receive all benefits from it. Executive
shall have no interest whatsoever in any such policy or policies but, at the
request of Resulting Bank, shall submit to medical examinations and supply such
information and execute such documents as may reasonably be required by the
insurance company or companies to which Resulting Bank has applied for
insurance.

         6.  Representations and Warranties.

         (a) Executive represents and warrants to Resulting Bank that his
execution, delivery, and performance of this Agreement will not result in or
constitute a breach of or conflict with any term, covenant, condition, or
provision of any commitment, contract, or other agreement or instrument,
including, without limitation, any other employment agreement, to which
Executive is or has been a party.


                                      - 6 -


<PAGE>

         (b) Executive shall indemnify, defend, and hold harmless Resulting Bank
for, from, and against any and all losses, claims, suits, damages, expenses, or
liabilities, including court costs and counsel fees, which Resulting Bank has
incurred or to which Resulting Bank may become subject, insofar as such losses,
claims, suits, damages, expenses, liabilities, costs, or fees arise out of or
are based upon any failure of any representation or warranty of Executive in
section 6(a) hereof to be true and correct when made.

         7. Notices. All notices, consents, waivers, or other communications
which are required or permitted hereunder shall be in writing and deemed to have
been duly given if delivered personally or by messenger, transmitted by telex or
telegram, by express courier, or sent by registered or certified mail, return
receipt requested, postage prepaid. All communications shall be addressed to the
appropriate address of each party as follows:

If to Resulting Bank:

         Bank Colorado, N.A.
         [_________________]
         [_________________]
         [_________________]

         Attention:        Chief Executive Officer

With a required copy to:

         Brian D. Alprin, Esq.
         Duane, Morris & Heckscher LLP
         1667 K Street, N.W., Suite 700
         Washington, D.C.  20006

If to Executive:

         Mr. Larry G. Neuschwanger
         25820 Sandy Knolls Boulevard
         Kersey, Colorado  80644

All such notices shall be deemed to have been given on the date delivered,
transmitted, or mailed in the manner provided above.

         8. Assignment. Neither party may assign this Agreement or any rights or
obligations hereunder without the consent of the other party.

         9. Governing Law. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Utah, without giving effect
to the principles of conflict of law thereof. The parties hereby designate Salt
Lake County, Utah and Denver County,

                                      - 7 -


<PAGE>

Colorado to be proper jurisdictions and venues for any suit or action arising
out of this Agreement. Each of the parties consents to personal jurisdiction in
each of such venues for such a proceeding and agrees that he or it may be served
with process in any action with respect to this Agreement or the transactions
contemplated thereby by certified or registered mail, return receipt requested,
or to its registered agent for service of process in the state of Utah or
Colorado. Each of the parties irrevocably and unconditionally waives and agrees,
to the fullest extent permitted by law, not to plead any objection that it may
now or hereafter have to the laying of venue or the convenience of the forum of
any action or claim with respect to this Agreement or the transactions
contemplated thereby brought in the courts aforesaid.

         10. Entire Agreement. This Agreement constitutes the entire
understanding between Resulting Bank and Executive relating to the subject
matter hereof. Any previous agreements or understandings between the parties
hereto or between Executive and the Bank or any of its affiliates or Resulting
Bank or any of its affiliates regarding the subject matter hereof, including
without limitation the terms and conditions of employment, compensation,
benefits, retirement, competition following employment, and the like, are merged
into and superseded by this Agreement. Neither this Agreement nor any provisions
hereof can be modified, changed, discharged, or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge, or termination is sought.

         11. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal, or unenforceable for any reason
whatsoever:

         (a) the validity, legality, and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of any
section of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable) shall not in any way be affected or impaired thereby;
and

         (b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any section of this Agreement
containing any such provisions held to be invalid, illegal, or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal, or unenforceable.

         12. Arbitration. Subject to the right of each party to seek specific
performance (which right shall not be subject to arbitration), if a dispute
arises out of or related to this Agreement, or the breach thereof, such dispute
shall be referred to arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"). A dispute subject to the
provisions of this section will exist if either party notifies the other party
in writing that a dispute subject to arbitration exists and states, with
reasonable specificity, the issue subject to arbitration (the "Arbitration
Notice"). The parties agree that, after the issuance of the Arbitration Notice,
the parties will try in good faith to resolve the dispute by mediation in
accordance with the Commercial Rules of Arbitration of AAA between the date of
the issuance of the Arbitration Notice and the date the dispute is set for
arbitration. If the dispute is not settled by the date set for arbitration, then
any controversy or claim arising out of this Agreement

                                      - 8 -


<PAGE>

or the breach hereof shall be resolved by binding arbitration and judgment upon
any award rendered by arbitrator(s) may be entered in a court having
jurisdiction. Any person serving as a mediator or arbitrator must have at least
ten years' experience in resolving commercial disputes through arbitration. In
the event any claim or dispute involves an amount in excess of $100,000, either
party may request that the matter be heard by a panel of three arbitrators;
otherwise all matters subject to arbitration shall be heard and resolved by a
single arbitrator. The arbitrator shall have the same power to compel the
attendance of witnesses and to order the production of documents or other
materials and to enforce discovery as could be exercised by a United States
District Court judge sitting in the District of Colorado. In the event of any
arbitration, each party shall have a reasonable right to conduct discovery to
the same extent permitted by the Federal Rules of Civil Procedure, provided that
such discovery shall be concluded within ninety days after the date the matter
is set for arbitration. Any provision in this Agreement to the contrary
notwithstanding, this section shall be governed by the Federal Arbitration Act
and the parties have entered into this Agreement pursuant to such Act.

         13. Costs of Litigation. In the event litigation is commenced to
enforce any of the provisions hereof, or to obtain declaratory relief in
connection with any of the provisions hereof, the prevailing party shall be
entitled to recover reasonable attorney's fees. In the event this Agreement is
asserted in any litigation as a defense to any liability, claim, demand, action,
cause of action, or right asserted in such litigation, the party prevailing on
the issue of that defense shall be entitled to recovery of reasonable attorney's
fees.

         14. Affiliation. A company will be deemed to be "affiliated" with Zions
Bancorp, Resulting Bank, or the Bank according to the definition of "Affiliate"
set forth in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended.

         15. Headings. The section and subsection headings herein have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof.



                                      - 9 -


<PAGE>

         IN WITNESS WHEREOF, the parties hereto executed or caused this
Agreement to be executed as of the day and year first above written.

                                                         BANK COLORADO, NATIONAL
                                                         ASSOCIATION



Attest:_______________________                           By:  __________________




                                                         LARRY G. NEUSCHWANGER



Witness:______________________                           _______________________



                                     - 10 -




                                                                       EXHIBIT 5

                          Duane, Morris & Heckscher LLP
                         1667 K Street, N.W., Suite 700
                           Washington, D.C. 20006-1608
                                 (202) 776-7800



                                  July 17, 1998



Zions Bancorporation
Suite 1380
One South Main
Salt Lake City, Utah  84111

Gentlemen:

         We have acted as counsel to Zions Bancorporation ("Zions") in
connection with the Agreement and Plan of Reorganization dated as of May 8,
1998, among Kersey Bancorp (the "Company"), Independent Bank (the "Bank"),
Zions, Val Cor Bancorporation, Inc. ("Val Cor"), and Vectra Bank Colorado,
National Association (successor-in-interest to Bank Colorado, National
Association) ("Vectra Bank"), a related Agreement of Merger between the Company
and Val Cor, and a related Agreement of Merger between the Bank and Vectra Bank
(collectively, the "Plan of Reorganization"), whereby the Company will be merged
into Val Cor, with Val Cor being the surviving corporation (the "Holding Company
Merger") and the Bank will be merged into Vectra Bank, with Vectra Bank being
the surviving entity (the "Bank Merger"; the Holding Company Merger and the Bank
Merger being referred to herein collectively as the "Reorganization"). Upon
consummation of the Reorganization, the holders of the outstanding shares of
Company Common Stock will receive in the aggregate up to 684,466 shares (the
"Shares") of Zions Common Stock, no par value ("Zions Common Stock"). Upon the
Effective Date of the Reorganization, the shares of Company Common Stock will be
canceled and immediately converted into the right of holders of Company Common
Stock to receive, in exchange for each share of Company Common Stock, that
number of shares of Zions Common Stock calculated by dividing the Purchase Price
(as defined in the Plan of Reorganization) by the Average Closing Price (as
defined), and by further dividing the number so reached by the number of shares
of Company Common Stock issued and outstanding as of the Effective Date of the
Reorganization.

         We are also acting as counsel to Zions in connection with the
Registration Statement on Form S-4 (the "Registration Statement") to be filed by
Zions with the Securities and Exchange Commission for the purpose of registering
under the Securities Act of 1933, as amended, the



<PAGE>

Zions Bancorporation
July 17, 1998
Page 2



Shares into which outstanding Company Common Stock will be converted upon
effectiveness of the Reorganization. This opinion is being furnished for the
purpose of being filed as an exhibit to the Registration Statement.

         In connection with this opinion, we have examined, among other things:

         (1)      an executed copy of the Plan of Reorganization;

         (2)      a copy certified to our satisfaction of the Restated Articles
                  of Incorporation of Zions as in effect on the date hereof;

         (3)      copies certified to our satisfaction of resolutions adopted by
                  the Board of Directors of Zions on April 24, 1998, including
                  resolutions approving the Plan of Reorganization and the
                  issuance of the Shares; and

         (4)      such other documents, corporate proceedings, and statutes as
                  we considered necessary to enable us to furnish this opinion.

         We have assumed for the purpose of this opinion that:

         (1)      the Plan of Reorganization has been duly and validly
                  authorized, executed, and delivered by the Company and the
                  Bank to the extent they are parties thereto and such
                  authorization remains fully effective and has not been
                  revised, superseded or rescinded as of the date of this
                  opinion; and

         (2)      the Reorganization will be consummated in accordance with the
                  terms of the Plan of Reorganization; and

         (3)      all documents which must be submitted and filed with
                  government authorities to effectuate the Reorganization will
                  be so submitted and filed and all government approvals
                  required by ss. 3.1 of the Plan of Reorganization shall have
                  been obtained.

         We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. We have assumed that the certifications and representations dated
earlier than the date hereof on which we have expressed reliance herein continue
to remain accurate, insofar as material to our opinions, from such earlier date
through the date hereof.



<PAGE>


Zions Bancorporation
July 17, 1998
Page 3



         Based upon the foregoing, we are of the opinion that the Shares to be
issued by Zions as described in the Registration Statement, when and to the
extent issued in accordance with the terms of the Plan of Reorganization, will
be legally issued, fully paid and nonassessable.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Opinions" in the Proxy Statement/Prospectus forming a part of the Registration
Statement.

                                              Very truly yours,

                                              /s/ DUANE, MORRIS & HECKSCHER LLP






                                                                       EXHIBIT 8

                                  July 17, 1998



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

Ladies and Gentleman:

         This letter sets forth the opinion of Slivka Robinson Waters &
O'Dorisio, P.C., regarding material Federal income tax consequences of the
merger (the "Holding Company Merger") of Kersey Bancorp, a Colorado corporation
("Company"), with and into Val Cor Bancorporation, Inc., a Colorado corporation
("VCBI"), and the merger (the "Bank Merger") of the Independent Bank ("Bank")
with and into Vectra Bank Colorado, National Association ("Vectra Bank"), in the
manner and on the terms described in the Agreement and Plan of Reorganization
dated May 8, 1998 ("Plan of Merger"). Zions Bancorporation ("Zions Bancorp") is
a bank holding company and the sole shareholder of VCBI. The holders of Company
Common Stock shall be entitled to receive, in exchange for each share of Company
Common Stock held of record by such stockholder as of the Effective Date, that
number of shares of Zions Bancorp Common Stock as set forth in the Plan of
Merger. Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Plan of Merger.

         In rendering the opinions expressed in this letter, Slivka Robinson
Waters & O'Dorisio, P.C. has, without verification, relied upon and assumed the
accuracy of all of the information contained in the following documents (the
"Relevant Documents"): (1) the Plan of Merger; (2) the Company 1998 statement of
facts and representations provided to us by the management of Company (the
"Company Statement of Facts and Representation"); (3) the Zions Bancorp 1998
statement of facts and representations provided to us by the management of Zions
Bancorp (the "Zions Bancorp Statement of Facts and Representations") and (4)
other documents we considered relevant. Slivka Robinson Waters & O'Dorisio, P.C.
also has assumed, without independent verification, that the parties to the Plan
of Merger have acted (and will continue to act) in accordance with all of the
information and descriptions contained in the Relevant Documents. Further,
Slivka Robinson Waters & O'Dorisio, P.C. has assumed, without independent
verification, that the Holding Company Merger and the Bank Merger will be
consummated as mergers in accordance with applicable federal law, Colorado law
and the National Banking Act.

         Based on our analysis of Federal income tax law in light of the facts,
representations and other information stated in the Relevant Documents, and
subject to and contingent upon the accuracy of the Company Statement of Facts
and Representations, the Zions Bancorp Statement



<PAGE>


Zions Bancorporation
July 17, 1998
Page 2



of Facts and Representations and of the assumptions identified in this letter,
Slivka Robinson Waters & O'Dorisio, P.C. is of the opinion that, for Federal
income tax purposes:

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

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

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

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

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

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

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

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

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

<PAGE>


Zions Bancorporation
July 17, 1998
Page 3



         (10)     A shareholder of Company who receives cash in lieu of a
                  fractional share of Zions Bancorp Common Stock will recognize
                  gain or loss equal to the difference between the cash received
                  and the shareholder's basis in that fractional share, and that
                  gain or loss will be capital gain or loss if the fractional
                  share would have been a capital asset in the hands of the
                  shareholder (Rev. Rul. 66-365, 1966-2 C.B.
                  116; Rev. Proc. 77-41, 1977-2 C.B. 574);

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

         (12)     The Bank Merger will qualify as a "reorganization" under
                  Section 368(a)(1)(A) of the Code;

         (13)     Vectra Bank and Bank will each be a "party to the
                  reorganization" within the meaning of Section 368(b) of the
                  Code;

         (14)     Neither Vectra Bank, Company nor Bank will recognize gain or
                  loss as a result of the Bank Merger;

         (15)     The basis of Bank's assets in the hands of Vectra Bank will be
                  the same as the basis of those assets in the hands of Bank
                  immediately prior to Bank Merger; and

         (16)     The holding period of Bank's assets received by Vectra Bank
                  will include the period during which such assets were held by
                  Bank immediately prior to Bank Merger.

         The scope of this opinion letter is expressly limited to the Federal
income tax issues directly addressed in the sixteen (16) enumerated paragraphs
above. Slivka Robinson Waters & O'Dorisio, P.C. expresses no opinion regarding
any other issue.

         The opinions expressed herein are based upon the provisions of the Code
and the Treasury Regulations promulgated thereunder, as well as upon the
Internal Revenue Service rulings and guidelines and court decisions, all valid
as of the date of this letter. However, these opinions are not binding upon the
Internal Revenue Service or any court, and no ruling confirming these opinions
will be sought from the Internal Revenue Service or any court. Moreover, the
provisions, rulings, guidelines and court decisions upon which Slivka Robinson



<PAGE>


Zions Bancorporation
July 17, 1998
Page 4



Waters & O'Dorisio, P.C. has relied in forming its opinions are subject to
revision, and in some cases such revisions may be given effect retroactively. In
the event of such a retroactive revision, the opinions expressed in this letter
may be invalidated. Slivka Robinson Waters & O'Dorisio, P.C. assumes no
obligation to update this opinion letter to reflect changes in facts or law
occurring after the date of this letter.

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

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

                                        Very truly yours,

                                                  /s/

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








                                                                    EXHIBIT 23.1


               CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


The Board of Directors
Zions Bancorporation:


We consent to the use of our report dated January 26, 1998 with respect to the
consolidated financial statements of Zions Bancorporation and subsidiaries as of
December 31, 1997 and 1996, and for each of the years in the three-year period
ended December 31, 1997 incorporated herein by reference, and to the reference
to our firm under the heading "Experts" in the Registration Statement and Proxy
Statement/Prospectus.


                                                       /s/ KPMG PEAT MARWICK LLP

                                                       KPMG PEAT MARWICK LLP

Salt Lake City, Utah
July 17, 1998




                                                                    EXHIBIT 23.2


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


The Board of Directors
Kersey Bancorp:

We consent to the use in this Registration Statement on Form S-4 of our report
dated May 7, 1998 with respect to the consolidated financial statements of
Kersey Bancorp, Inc. as of December 31, 1997 and 1996, and for each of the years
in the three-year period ended December 31, 1997, and to the reference to our
firm under the heading "Experts" in the prospectus.


                                          /s/ FORTNER, BAYENS, LEVKULICH & CO.,
P.C.

                                          FORTNER, BAYENS, LEVKULICH & CO., P.C.



Denver, Colorado
July 17, 1998









                                                                    EXHIBIT 23.3


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the incorporation by
reference in this S-4 Registration Statement of Zions Bancorporation of our
report dated January 16, 1998 on Sumitomo Bank of California's 1997 financial
statements included in Zions Bancorporation's previously filed Form 8-K (filed
April 15, 1998) and to all references to our firm included in this Registration
Statement.


                                                       /s/ ARTHUR ANDERSEN LLP

                                                           ARTHUR ANDERSEN LLP

San Francisco, California
July 16, 1998







                                                                    EXHIBIT 23.4


                    CONSENT OF HOWE BARNES INVESTMENTS, INC.

                                  July 17, 1998


Kersey Bancorp, Inc.
301 First Street
Kersey, CO  80644

Members of the Board:

We hereby consent to the use in the Registration Statement on Form S-4 and
related Proxy Statement/Prospectus with respect to the proposed merger of Kersey
Bancorp, Inc. with and into Val Cor Bancorporation, Inc., a Colorado corporation
and wholly owned subsidiary of Zions Bancorporation, of our opinion letter
appearing as Appendix B in the Proxy Statement/Prospectus which is part of such
Registration Statement, and to the references of our firm name therein. In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations adopted by the Securities and Exchange
Commission thereunder nor do we admit that we are experts with respect to any
part of such Registration Statement within the meaning of the term "experts" as
used in the Securities Act of 1933, as amended, or the rules and regulations of
the Securities and Exchange Commission thereunder.


                                          Very truly yours,

                                           HOWE BARNES INVESTMENTS, INC.

                                          /s/ Paul A. O'Connor
                                          --------------------------------------
                                          Paul A. O'Connor, First Vice President

                                          HOWE BARNES INVESTMENTS, INC.












                                                                    EXHIBIT 99.1


                         [Letterhead of Kersey Bancorp]


                                _________ , 1998



Shareholders of Kersey Bancorp


Dear Shareholder:

         The Board of Directors of Kersey Bancorp (the "Company") has called a
Special Meeting of the shareholders of the Company for _____ a.m., Colorado
time, on __________ , 1998, at the Company's offices at 301 First Street,
Kersey, Colorado. The Board is furnishing the accompanying Proxy
Statement/Prospectus to all holders of the Company's Common Stock.

         The purpose of the Special Meeting is to consider and vote upon an
Agreement and Plan of Reorganization dated May 8, 1998 among the Company, its
wholly-owned subsidiary Independent Bank (the "Bank"), Zions Bancorporation
("Zions"), Val Cor Bancorporation, Inc. ("Val Cor"), a wholly-owned subsidiary
of Zions, and Vectra Bank Colorado, National Association (successor-in-interest
to Bank Colorado, National Association) ("Vectra Bank"), Val Cor's wholly-owned
subsidiary, an Agreement of Merger between the Company and Val Cor and an
Agreement of Merger between the Bank and Vectra Bank (collectively, the "Plan of
Reorganization"). If the Plan of Reorganization is approved, and all other
conditions are met, the Plan of Reorganization will result in the merger of the
Company into Val Cor, with Val Cor being the surviving corporation and the
merger of the Bank into Vectra Bank, with Vectra Bank being the surviving
national banking association (collectively, the "Reorganization").

         The Board of Directors has received an opinion of Howe Barnes
Investments, Inc., an independent financial advisory firm, that the merger
consideration is fair to the shareholders of the Company from a financial point
of view. The Board of Directors has unanimously approved the Plan of
Reorganization and determined that the Reorganization is in the best interests
of the Company, its shareholders, its employees and the community it serves. The
Board of Directors unanimously recommends that the shareholders vote to approve
the Plan of Reorganization.

         Upon consummation of the Plan of Reorganization, Zions will issue to
the Company's shareholders shares of Zions Common Stock with a value at the
Effective Date (as defined) equal to the Purchase Price (as defined), a maximum
of $28,200,000, in exchange for their shares of Company Common Stock. The terms
and conditions of the Plan of Reorganization are summarized in the accompanying
Proxy Statement/Prospectus. See "Plan of Reorganization" in the Proxy
Statement/Prospectus.




<PAGE>


Shareholders of Kersey Bancorp
_________ , 1998
Page 2



         At the Effective Date, the shares of Company Common Stock will be
canceled and immediately converted into the right for Company shareholders to
receive, in exchange for each share of Company Common Stock, that number of
shares of Zions Common Stock calculated by dividing the Purchase Price the
Average Closing Price (as defined), and by further dividing the number so
reached by the number of shares of Company Common Stock issued and outstanding
as of the Effective Date of the Reorganization.

         On ____________ , 1998, the closing price of Zions Common Stock was
$_______ per share. On that date there were 61,812 shares of Company Common
Stock issued and outstanding. Assuming that the Reorganization had been
consummated on that date, that the Purchase Price had been $28,200,000 on that
date, and that the Average Closing Price of Zions Common Stock had been
$____________ , shareholders of the Company under such circumstances would have
been entitled to receive approximately ____________ shares of Zions Common Stock
for each share of Company Common Stock, or an equivalent market value of
approximately $________ per share of Company Common Stock. Because the Purchase
Price and the Average Closing Price represent variable amounts, the precise
exchange rate and the precise number of shares of Zions Common stock that the
shareholders of the company will receive in exchange will not be known until the
Effective Date.

         The accompanying Proxy Statement/Prospectus details the terms of the
proposed Plan of Reorganization and provides information concerning the Company,
the Bank, Zions, Val Cor and Vectra Bank as well as the Plan of Reorganization.
The Proxy Statement/Prospectus contains important information necessary for the
shareholders to make a decision about how to vote at the Special Meeting. Please
read it carefully.

         Approval of the Plan of Reorganization requires the affirmative vote of
a two-thirds of the issued and outstanding shares of the Company's Common Stock.
Failure to vote will have the same effect as a vote against the Reorganization.
Consequently, please mark, sign, date and return the enclosed proxy as soon as
possible.

         Any holder of Company Common Stock may attend the Special Meeting and
vote in person if he or she desires, even if he or she has already submitted a
proxy.

         Consummation of the Plan of Reorganization is subject to approval by
federal and state bank regulatory agencies, all of which approvals have [NOT
YET] been received, and to certain other conditions, including maintenance of
the Company's financial condition. If approved, the Plan of Reorganization will
most likely be consummated sometime in the third quarter of 1998.

         Instructions describing the procedure for receiving shares of Zions
Common Stock are not included with the accompanying Proxy Statement/Prospectus.
If the Plan of Reorganization is approved by the shareholders, on or shortly
after the Effective Date of the Plan of



<PAGE>


Shareholders of Kersey Bancorp
_________ , 1998
Page 3



Reorganization, Zions will send you instructions describing the procedure for
exchanging your Kersey Bancorp stock certificate for the Reorganization
consideration.

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

                                                  Sincerely,



                                                  _____________________
                                                  Larry G. Neuschwanger
                                                  President







                                                                    EXHIBIT 99.2


                                 KERSEY BANCORP

                            NOTICE OF SPECIAL MEETING
                                 OF SHAREHOLDERS

         A Special Meeting of shareholders of Kersey Bancorp (the "Company")
will be held at _____ a.m., Colorado time, on ____________ , 1998, at the
Company's offices at 301 First Street, Kersey, Colorado, to consider and vote
upon an Agreement and Plan of Reorganization dated as of May 8, 1998 among the
Company, its wholly-owned subsidiary Independent Bank (the "Bank"), Zions
Bancorporation ("Zions"), Val Cor Bancorporation, Inc. ("Val Cor"), a
wholly-owned subsidiary of Zions, and Vectra Bank Colorado, National Association
(successor-in-interest to Bank Colorado, National Association) ("Vectra Bank"),
Val Cor's wholly-owned subsidiary, an Agreement of Merger between the Company
and Val Cor and an Agreement of Merger between Vectra Bank and the Bank
(collectively, the "Plan of Reorganization"), and the transactions contemplated
thereby. The Plan of Reorganization provides for the merger of the Company into
Val Cor, with Val Cor being the surviving corporation, and for the merger of the
Bank into Vectra Bank, with Vectra Bank being the surviving national banking
association (the aforementioned mergers being referred to herein collectively as
the "Reorganization").

         Upon the consummation of the Plan of Reorganization, each Company
shareholder will receive shares of Zions Common Stock in exchange for each share
of Company Common Stock held as of the Effective Date (as defined) of the Plan
of Reorganization. The terms and conditions of the Reorganization are set forth
in the accompanying Proxy Statement/Prospectus.

         The Board of Directors has set ____________ , 1998, as the record date
for determining shareholders entitled to notice of and to vote at the Special
Meeting.

         Holders of Company Common Stock are entitled to assert dissenters'
rights under Colorado law. A copy of the applicable statute is attached to the
Proxy Statement/Prospectus.

                                           By order of the Board of Directors,


                                           ___________________________________
                                           Larry G. Neuschwanger
                                           President


Dated:_______________ , 1998

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







                                                                    EXHIBIT 99.3


                                      PROXY

                         SPECIAL MEETING OF SHAREHOLDERS
                                OF KERSEY BANCORP

                                __________ , 1998


           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS



         The undersigned hereby appoints _________ , and _________ as proxy, and
either of them, and each with full power of substitution, of the undersigned to
vote as designated below on behalf of the undersigned as a holder of the Common
Stock of Kersey Bancorp ("Company Common Stock") all shares of Company Common
Stock that the undersigned held of record on _________ , 1998, which the
undersigned is entitled to vote, at the special meeting of shareholders of
Kersey Bancorp, Inc. (the "Company") to be held on _________ , 1998, or at any
postponement or adjournment thereof. The purpose of the special meeting is to
consider and act on the proposal to approve the Agreement and Plan of
Reorganization dated May 8, 1998, among the Company, its wholly-owned subsidiary
Independent Bank (the "Bank"), Zions Bancorporation ("Zions"), Val Cor
Bancorporation, Inc. ("Val Cor"), a wholly-owned subsidiary of Zions, and Vectra
Bank Colorado, National Association (successor-in-interest to Bank Colorado,
National Association) ("Vectra Bank"), Val Cor's wholly-owned subsidiary, an
Agreement of Merger between the Company and Val Cor and an Agreement of Merger
between Vectra Bank and the Bank (collectively, the "Plan of Reorganization"),
whereby the Company will merge into Val Cor, with Val Cor being the surviving
corporation, and the Bank will merge into Vectra Bank, with Vectra Bank being
the surviving national banking association (the aforementioned mergers being
referred to collectively as the "Reorganization"). Pursuant to the Plan of
Reorganization, Company shareholders will receive, in exchange for each share of
Company Common Stock, that number of shares of Zions Common Stock calculated by
dividing the Purchase Price (as defined) by the Average Closing Price (as
defined), and by further dividing the number so reached by the number of shares
of Company Common Stock issued and outstanding as of the Effective Date of the
Reorganization. The terms and conditions of the Plan of Reorganization are set
forth in the accompanying Proxy Statement/Prospectus.

The Directors recommend a vote FOR Proposal 1.

         1.       Approval of the Plan of Reorganization.

                  [  ] FOR              [  ] AGAINST           [  ] ABSTAIN

         2. The Proxyholder, in his discretion, is authorized to vote on such
other business as may properly come before the meeting.




<PAGE>


         When properly completed, this proxy will be voted in the manner
directed herein by the undersigned. If no direction is given, this proxy will be
voted FOR the approval of the Plan of Reorganization.

                                    (Each person whose name is on the Company
                                    Common Stock certificate should sign below
                                    in the same manner in which such person's
                                    name appears. If signing as a fiduciary,
                                    give title.)


                                                 _______________________________
                                                 Signature


                                                 _______________________________
                                                 Printed Name


                                                 Dated:_________________________
                                                          Please date, sign, and
                                                          return promptly







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