ZIONS BANCORPORATION /UT/
S-4, 1998-04-23
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)

<TABLE>
<CAPTION>
<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.                           John E. Burrus, Esq.
      Laurence S. Lese, Esq.                          McKenna & Cuneo, L.L.P.
      Duane, Morris & Heckscher LLP                   370 Seventeenth Street
      Suite 700                                       Suite 4800
      1667 K Street, N.W.                             Denver, CO  80202
      Washington, D.C.  20006-1608                    (303) 634-4000
      (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>
<CAPTION>
- ------------------------------------------------------------------------------------------------
                         CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------

================================================================================================
                                                                   Proposed
                                                 Proposed          maximum
                                                  maximum         aggregate        Amount of
  Title of securities to      Amount to be    offering price       offering      registration
       be registered           registered        per share         price(1)           fee
- ------------------------------------------------------------------------------------------------
<S>                         <C>                     <C>        <C>              <C>
Common Stock, no par        625,000
value                       Shares                  NA         $4,811,000       $1,420
================================================================================================
</TABLE>
      (1)   Estimated solely for the purpose of calculating the registration fee
            and calculated in accordance with Rule 457(f)(2) on the basis of the
            book value of the outstanding shares of Common Stock, $5.00 par
            value, of SBT Bankshares, Inc. on December 31, 1997 (the latest
            practicable date prior to filing the registration statement) of
            $4,811,000, such stock to be canceled upon effectiveness of the
            Reorganization described herein.
                              --------------------
      THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================

                                      - 2 -

<PAGE>

                              SBT BANKSHARES, INC.
                                 PROXY STATEMENT
                                       FOR
                         SPECIAL MEETING OF SHAREHOLDERS
                          TO BE HELD ON _________, 1998

                                       AND

                              ZIONS BANCORPORATION
                                   PROSPECTUS
                             UP TO 625,000 SHARES OF
                                  COMMON STOCK


      This Proxy Statement/Prospectus is being furnished to the shareholders of
SBT Bankshares, Inc., a Colorado corporation ("the Company"), in connection with
the solicitation of proxies by its Board of Directors for use at a Special
Meeting of Shareholders of the Company to be held on ______________, 1998 (the
"Special Meeting") and at any adjournments or postponements thereof. This Proxy
Statement/Prospectus and accompanying notice of special meeting and form of
proxy ("Proxy") are first being mailed on or about ____________, 1998 to the
shareholders of the Company of record as of ____________, 1998 (the "Record
Date").

      At the Special Meeting, the holders of each outstanding share of Company
common stock, par value $5.00 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 December 19, 1997, among the Company, State Bank and
Trust of Colorado Springs, the Company's wholly-owned subsidiary, a banking
corporation organized under the laws of the State of Colorado (the "Bank"),
Zions Bancorporation, a Utah corporation ("Zions"), Zions' wholly-owned
subsidiary, Val Cor Bancorporation, Inc., a Colorado corporation ("Val Cor"),
and Val Cor's subsidiary, Valley National Bank of Cortez, which has since merged
into a wholly-owned subsidiary of Val Cor named Bank Colorado, National
Association, a national banking association organized under the laws of the
United States ("Bank Colorado"), an accompanying Agreement of Merger between the
Company and Val Cor, and an accompanying Agreement of Consolidation between the
Bank and Bank Colorado (collectively the "Plan of Reorganization"), and the
transactions contemplated by the Plan of Reorganization. Pursuant to the Plan of
Reorganization, the Company will merge with and into Val Cor with Val Cor being
the surviving corporation (the "Holding Company Merger") and the Bank and Bank
Colorado will consolidate to form a new national banking association (the
"Consolidated Association"; the consolidation of the Bank and Bank Colorado into
the Consolidated Association hereinafter referred to as the "Bank
Consolidation"; collectively the Holding Company Merger and the Bank
Consolidation hereinafter referred to as the "Reorganization").

      Upon consummation of the Reorganization, the holders of each outstanding
share of Company Common Stock will receive, in exchange for each share of
Company Common Stock, shares of Zions common stock, no par value ("Zions Common
Stock"). At the Effective Date of the Reorganization, the shares of Company
Common Stock will be canceled and immediately converted into the right for
holders of Company Common Stock to receive, in exchange for each share of
Company Common Stock, that number of shares of Zions Common Stock calculated by
dividing the product of the Consideration Number and the Collar Factor by the
sum of the number of shares of Company Common Stock issued and outstanding as of
the Effective Date of the Reorganization and the Option Equivalent Number. The
amounts represented by some of these and other defined terms are variable and
will not be known with precision until the Effective Date of the Reorganization.
As a result, the precise number of shares of Zions Common Stock to be exchanged
for each share of Company Common Stock cannot be determined until the Effective
Date. See "Summary--Certain Definitions" below for the definition of "Collar
Factor," "Consideration Number," "Effective Date," and "Option Equivalent
Number."


<PAGE>



      On April __, 1998, the closing price of Zions Common Stock was $_____ per
share. On that date there were 78,592 shares of Company Common Stock issued and
outstanding and 16,250 stock options had been granted and were outstanding.
Assuming that the Reorganization had been consummated as of April , 1998, that
the Average Closing Price of Zions Common Stock had been $__________ on that
date, that the Consideration Number had been ___________, and that the Collar
Factor had been ____________, shareholders of the Company under such
circumstances would have received _____ shares of Zions Common Stock for each
share of Company Common Stock, or an equivalent value of $_____________ per
share of Company Common Stock.

      On April __, 1998, options to purchase a total of 16,250 shares of Company
Common Stock at an average exercise price of $29.23 per share were granted and
outstanding, held by eight persons, each of whom was an executive officer or
director of the Company. At the Effective Date of the Reorganization, these
Company stock options will automatically be converted into options to purchase
shares of Zions Common Stock. Assuming that the Effective Date of the
Reorganization had been April , 1998, that the Average Closing Price of Zions
Common Stock had been $[45.00] on that date, that the Consideration Number had
been ____________, and that the Collar Factor had been ____________, these
options to purchase Zions Common Stock would have covered a total of shares of
Zions Common Stock at an average exercise price of $____________. Based on these
assumptions, these options had on that date an aggregate value (the difference
between the market price of Zions Common Stock on that date and the exercise
price) of $[4,328,753] to the option holders. The options to purchase Company
Common Stock may have been granted in violation of the preemptive rights
provisions of the Company's Articles of Incorporation. A condition to closing
the Holding Company Merger is that all shareholders of the Company must waive
any preemptive rights they might have to be offered, subscribe to, or acquire
shares, options, and other interests and rights of or in the Company. By waiving
their preemptive rights, Company shareholders who were not granted Company stock
options will, in addition to waiving their rights to have been offered Company
stock options at the time such options were granted to the executive officers
and directors of the Company and to acquire shares of Company Common Stock at
the time of exercise of any stock options, give up financial benefits they might
otherwise have in the options. Their waiver of such rights will, however,
satisfy a condition to closing without which Zions in its discretion may decline
to proceed with the Reorganization. See "Plan of Reorganization--Waiver of
Preemptive Rights."

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

      FOR THE ACTION OF THE SHAREHOLDERS TO BE EFFECTIVE, HOLDERS OF EIGHTY
PERCENT (80%) 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.
                             --------------------

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


                                   - 2 -

<PAGE>



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

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

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

                          FORWARD-LOOKING STATEMENTS

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

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

                                   - 3 -

<PAGE>



                             AVAILABLE INFORMATION

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

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

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


                                   - 4 -

<PAGE>



                               TABLE OF CONTENTS

                                                                          Page
                                                                          ----

SUMMARY......................................................................1
      The Parties............................................................1
      The Special Meeting; Purpose...........................................2
      Record Date; Voting Rights.............................................2
      Voting and Revocation of Proxies.......................................2
      Quorum; Vote Required for Approval.....................................3
      Proposed Reorganization................................................3
      Certain Definitions....................................................4
      Reasons for the Reorganization.........................................6
      Board of Directors Recommendation......................................6
      Interests of Certain Persons in the Transaction........................7
      Finder's Fee...........................................................7
      Tax Consequences.......................................................7
      Dissenters' Rights.....................................................7
      Conditions; Regulatory Approval........................................7
      Amendment; Termination.................................................8
      Effective Date of the Reorganization...................................8
      Accounting Treatment...................................................8
      Comparison of Shareholders' Rights.....................................8
      "Anti-Takeover" Provisions.............................................8
      Exchange of Certificates...............................................9
      Waiver of Preemptive Rights............................................9
      Trading Markets; Pre-Announcement Prices...............................9
      Selected Financial Information.........................................9
      Comparative Per Share Data............................................10
      Unaudited Pro Forma Combined Financial Information....................11
      Recent Developments...................................................11

PLAN OF REORGANIZATION......................................................13
      The Reorganization....................................................13
      Background of and Reasons for the Reorganization......................14
      Voting Agreements.....................................................16
      Waiver of Preemptive Rights...........................................16
      Required Vote; Management Recommendation..............................17
      No Opinion of a Financial Advisor.....................................17
      Conversion of Company Shares..........................................18
      Federal Income Tax Consequences of the Reorganization.................19
      Rights of Dissenting Shareholders.....................................20
      Interests of Certain Persons in the Transaction.......................22
      Inconsistent Activities...............................................23
      Conduct of Business Pending the Reorganization........................23
      Conditions to the Reorganization......................................24
      Representations and Warranties........................................25
      Amendment and Waiver..................................................26
      Authorized Termination and Damages for Breach.........................26
      Restrictions on Resales by Company Affiliates.........................27
      Expenses..............................................................27
      Government Approvals..................................................27
      Effective Date of the Reorganization..................................28
      Accounting Treatment..................................................28
      Relationship Between Zions and the Company............................28
      Unaudited Pro Forma Combined Financial Information....................28

SUPERVISION AND REGULATION..................................................29
      Zions ................................................................29
      Regulatory Capital Requirements.......................................30
      Other Regulatory and Supervisory Issues...............................33
      Deposit Insurance and Other Assessments...............................34
      Interstate Banking....................................................35

MONETARY POLICY.............................................................36

                                     - i -

<PAGE>

INFORMATION CONCERNING ZIONS BANCORPORATION.................................36
      Selected Financial Data...............................................36
      Stock Prices and Dividends on Zions Common Stock......................39
      Principal Holders of Zions Common Stock...............................39
      Zions Documents Incorporated By Reference.............................41

INFORMATION CONCERNING THE COMPANY AND THE BANK.............................41
      General...............................................................41
      The Bank..............................................................41
      Lending...............................................................42
      Loans ................................................................42
      Non-Performing Assets.................................................43
      Non-Performing Loans..................................................44
      Other Real Estate Owned...............................................45
      Analysis of Allowance for Loan Losses.................................45
      Investment Securities.................................................46
      Investment Portfolio..................................................47
      Deposits..............................................................47
      Table Showing Deposits................................................47
      Return on Company Equity and Assets...................................48
      Property..............................................................48
      Competition...........................................................49
      Legal Proceedings.....................................................49
      Employees.............................................................49
      Regulatory Matters....................................................49
      Selected Financial Data...............................................49
      Stock Prices and Dividends on Company Common Stock....................51
      Certain Transactions of the Company...................................51
      Stockholdings of Directors, Officers and Certain Others...............51

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS OF OPERATIONS OF SBT BANKSHARES, INC..........................52
      General...............................................................52
      Net Interest Income...................................................53
      Results of Operations.................................................56
      Interest and Fee Income...............................................56
      Interest Expense......................................................56
      Net Interest Income...................................................56
      Non-Interest Income...................................................57
      Non-Interest Expense..................................................57
      Allowance for Loan Losses.............................................57
      Income Taxes..........................................................57
      Liquidity and Sources of Funds........................................57
      Capital Resources.....................................................58
      Effects of Inflation and Changing Prices..............................58
      New Accounting Principles.............................................58

COMPARISON OF THE RIGHTS OF SHAREHOLDERS OF ZIONS AND THE COMPANY...........59
      General...............................................................59
      Anti-takeover Matters.................................................59
      Shareholder Rights Plan...............................................61
      Board of Directors....................................................61
      Special Shareholders' Meetings........................................63
      Amendment of Articles and Bylaws......................................63
      Dissenters' Rights....................................................63
      Preemptive Rights.....................................................64
      Preferred Stock.......................................................64
      Dividend Rights.......................................................64
      Liquidation Rights....................................................65
      Miscellaneous.........................................................65

LEGAL OPINIONS..............................................................65

EXPERTS.....................................................................65

OTHER MATTERS...............................................................65

SBT FINANCIAL STATEMENTS....................................................67

Appendix A - Form of Opinion of McKenna & Cuneo, L.L.P. as to Tax Matters

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


                                   - ii -

<PAGE>



                                    SUMMARY


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

The Parties

      Zions Bancorporation ("Zions") is a multi-bank holding company registered
under the Bank Holding Company Act of 1956, as amended (the "Bank Holding
Company Act"), and organized under the laws of Utah, engaged primarily in the
commercial banking business through its banking subsidiaries. Zions' principal
executive offices are at One South Main, Suite 1380, Salt Lake City, Utah 84111
(telephone: 801/524-4787). Zions is the second largest bank holding company
headquartered in Utah.

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

      On December 29, 1997, Zions and FP Bancorp, Inc. ("FP Bancorp"), the
holding company of First Pacific National Bank ("First Pacific"), announced that
a definitive agreement had been signed under which FP Bancorp will merge with
and into Zions, and First Pacific with and into Grossmont Bank, in exchange for
common shares of Zions. As of September 30, 1997, First Pacific had assets of
$359 million. The merger is subject to approval by banking regulators and the
shareholders of FP Bancorp. This acquisition is pending. On January 6, 1998,
Zions acquired Vectra Banking Corporation ("Vectra"), the parent company of
Vectra Bank which has 9 offices in the Denver metropolitan area. In the
transaction, Vectra merged with and into Zions in exchange for common shares of
Zions. As of December 31, 1997, Vectra had assets of $701 million. On January
23, 1998, Zions wholly-owned subsidiary, Val Cor, and Sky Valley Bank
Corporation ("Sky Valley"), parent company of The First National Bank in Alamosa
("FNBA"), completed their merger whereby Sky Valley merged with and into Val
Cor. As of September 30, 1997, Sky Valley had assets of approximately $122
million and FNBA had three offices in Alamosa, Center, and Saguache, Colorado.
On February 27, 1998, Val Cor and Tri-State Finance Corporation ("Tri-State"),
the parent of Tri-State Bank, completed their merger whereby Tri-State merged
with and into Val Cor and Tri-State Bank, with offices in Denver and Boulder,
Colorado, merged with and into Bank Colorado. As of September 30, 1997,
Tri-State had assets of approximately $124 million. On March 25, 1998, Zions and
Sumitomo Bank of California ("Sumitomo") entered into a definitive agreement
whereby Sumitomo will merge with a subsidiary of Zions. Zions will pay
approximately $546 million in cash for Sumitomo. Sumitomo is currently
California's sixth largest bank, with assets of approximately $5.1 billion as of
December 31, 1997, and with 47 branches. Zions will combine its present
Grossmont Bank subsidiary with Sumitomo and First Pacific when these
acquisitions have been completed. See "Summary--Recent Developments," below.
As of December 31, 1997 Zions had total consolidated assets of $9.5 billion,
deposits of $6.9 billion, and shareholders' equity of $655 million. See
"Information Concerning Zions Bancorporation."


<PAGE>



      Val Cor Bancorporation, Inc. ("Val Cor"), a Colorado corporation, is a
bank holding company registered under the Bank Holding Company Act.  Zions
acquired Val Cor in May 1997.  Val Cor's principal asset consists of its 100%
ownership interest in the common stock of Bank Colorado.

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

      SBT Bankshares, Inc. (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 State Bank and Trust of Colorado
Springs (the "Bank"). The Company has a 50% ownership interest in SBT Mortgage,
LLC and no other affiliated companies or subsidiaries. The Company's principal
asset consists of its 100% ownership interest in the Bank. The Company's main
office is located on the premises of the Bank at 111 South Tejon Street,
Colorado Springs, Colorado 80903, and its telephone number at that address is
719/577-9100. As of December 31, 1997, the Company had total consolidated
assets of $87 million and shareholders' equity of $4.8 million.

      State Bank and Trust of Colorado Springs (the "Bank") is a bank organized
under the laws of Colorado and has operated at its current location in Colorado
Springs since its organization in 1984. The Bank's main office is located at 111
South Tejon Street, Colorado Springs, Colorado 80903, and its telephone number
at that address is 719/577-9100.

The Special Meeting; Purpose

      The Special Meeting of Shareholders of the Company (the "Special Meeting")
will be held at 9:00 a.m., local time, on ________________, 1998 and at any
postponements or adjournments thereof at the offices of the Company, 111 South
Tejon Street, Colorado Springs, Colorado.

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

Record Date; Voting Rights

      The Board of Directors of the Company has fixed the close of business on
April , 1998 as the record date for determining the shareholders of the Company
entitled to notice of and to vote at the Special Meeting or any postponements or
adjournments thereof. At that date, 78,592 shares of Common Stock, $5.00 par
value, of the Company (the "Company Common Stock") were outstanding, held by 25
shareholders of record. Each such share of Company Common Stock entitles its
holder of record at the close of business on the record date to one vote on each
matter properly submitted to the shareholders for action at the Special Meeting.
See "Plan of Reorganization--Required Vote; Management Recommendation."

Voting and Revocation of Proxies

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


                                   - 2 -

<PAGE>


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

Quorum; Vote Required for Approval

      The presence in person or by proxy of the holders of a majority of the
issued and outstanding shares of Company Common Stock and entitled to vote at
the Special Meeting is necessary to constitue a quorum at the Special Meeting.
Approval of the Plan of Reorganization requires the affirmative vote of eighty
percent (80%) of the outstanding shares of Company Common Stock entitled to
vote. A failure to vote, an abstention, or a failure by a broker to vote shares
held in street name will have the same legal effect as a vote against approval
of the Plan of Reorganization. See "Plan of Reorganization--Required Vote;
Management Recommendation."

      As of April ___, 1998, ten individuals beneficially owned an aggregate of
63,654 shares or approximately 80.1% of the outstanding Company Common Stock. As
an inducement to Zions to enter into the Plan of Reorganization, these various
shareholders of the Company, and one affiliated entity, have entered into
agreements with Zions under which they have agreed, in their capacity as
shareholders, to vote their shares in favor of the Reorganization. Some of these
shareholders are officers and directors of the Company; all of the Company's
directors and executive officers have so agreed. See "Plan of Reorganization--
Voting Agreements; Information Concerning the Company and the Bank--
Stockholdings of Directors, Officers and Certain Others." Such a vote will be
sufficient to approve the Plan of Reorganization and the Reorganization. If each
of these shareholders votes his, her, or its shares in favor of the Plan of
Reorganization and the Reorganization as each has agreed, the Plan of
Reorganization and the Reorganization will be approved by the Company's
shareholders, notwithstanding the vote of other shareholders of the Company.

Proposed Reorganization

      At the Special Meeting, the holders of Company Common Stock will be asked
to consider and approve the Plan of Reorganization. The Plan of Reorganization
provides for the merger of the Company into Val Cor, whereby Val Cor will be the
surviving corporation, and for the consolidation of the Bank and Bank Colorado
to form a new national banking association. See "Plan of Reorganization."

      Upon consummation of the Reorganization, the holders of each outstanding
share of Company Common Stock will receive, in exchange for each share of
Company Common Stock, shares of Zions Common Stock. At the Effective Date of the
Reorganization, the shares of Company Common Stock will be canceled and
immediately converted into the right for holders of Company Common Stock to
receive, in exchange for each share of Company Common Stock, that number of
shares of Zions Common Stock calculated by dividing the product of the
Consideration Number and the Collar Factor by the sum of the number of shares of
Company Common Stock issued and outstanding as of the Effective Date of the
Reorganization and the Option Equivalent Number. See "Certain Definitions,"
below. Zions will not issue fractional shares of its common stock in the
Reorganization. In lieu of fractional shares of Zions Common Stock, if any, each
shareholder of the Company who is entitled to a fractional share of Zions Common
Stock (after aggregating all shares of Zions Common Stock to which such
shareholder is entitled) will receive an amount of cash equal to the product of
such fraction times $40.00.



                                   - 3 -
<PAGE>



      On April __, 1998, the closing price of Zions Common Stock was $__________
per share and there were 78,592 shares of Company Common Stock issued and
outstanding and 16,250 options granted and outstanding. Assuming that the
Reorganization had been consummated as of April , 1998, that the Average Closing
Price of Zions Common Stock had been $_________, that the Consideration Number
had been _____________, and that the Collar Factor had been , shareholders of
the Company under such circumstances would have received _______ shares of Zions
Common Stock for each share of Company Common Stock, or an equivalent value of
$_______________ per share of Company Common Stock.

      The Company has granted options to purchase a total of 16,250 shares of
Company Common Stock. These options may have been granted in violation of the
preemptive rights provisions of the Company's Articles of Incorporation. See
"Plan of Reorganization--Waiver of Preemptive Rights," below.

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.

      "Average Closing Price" means the average (rounded to the nearest penny)
of the last reported sale price or, if no such reported sale takes place, the
mean (unrounded) of the closing bid and asked prices of Zions Common Stock in
the over-the-counter market as such prices are reported by the automated
quotation system of the National Association of Securities Dealers, Inc., or in
the absence thereof by such other source upon which Zions and the Company shall
mutually agree, for each of the fifteen trading days ending on the fifth trading
day before the Effective Date.

      "Bank Consolidation" means the consolidation of the Bank and Bank Colorado
into the Consolidated Association.

      "Collar Factor" is determined as follows: if the Average Closing Price is:

      (A) less than $34.00, the Collar Factor shall be a fraction the numerator
of which is $34.00 and the denominator of which is the Average Closing Price;

      (B) more than $46.00, the Collar Factor shall be a fraction the numerator
of which is $46.00 and the denominator of which is the Average Closing Price;
and

      (C) not less than $34.00 and not more than $46.00, the Collar Factor shall
be One.

      "Consideration Number" means 625,000, except that if the total
shareholders equity of the Company at December 31, 1997, shall be less than
$5,000,000, then the "Consideration Number" shall be the difference between
625,000 and the number calculated by dividing the difference between $5,000,000
and the total shareholders equity of the Company at December 31, 1997, by
$40.00; in determining total shareholders equity of the Company at December 31,
1997, the expense, through the Effective Date, net of taxes, of the investment
bankers, consultants, brokers and finders who will have rendered services to the
Company or the Bank through the Effective Date shall be recognized as an expense
of the Company during the period between October 1, 1997 and December 31, 1997.

      "Consolidated Association" means the new national banking association
resulting from the consolidation of the Bank and Bank Colorado.

                                   - 4 -
<PAGE>



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

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

      "Option Equivalent Number," a number which is designed to represent a
hypothetical number of heretofore-unissued shares of Company Common Stock equal
in value to the value inherent in the options to purchase Company Common Stock
that are outstanding and unexercised at the Effective Date, means the number
reached by summing the following values as calculated for each option to
purchase one share of Company Common Stock which is outstanding and unexercised
at the Effective Date: (A) the difference between the Value-Per-Share Factor and
the exercise price of that option (or, if a greater number, zero) divided by (B)
the Value-Per-Share factor.

      "Value-Per-Share Factor," a number which is designed to represent the
hypothetical value in dollars and cents that would be received by a holder of
one share of Company Common Stock in the Reorganization assuming that all
options to purchase Company Common Stock were exercised prior to the Effective
Date and assuming that the contributions to capital of the Company accompanying
such exercises had been agreed by the parties to increase dollar-for-dollar the
amount of consideration to be received by holders of Company Common Stock, means
a number of dollars and cents calculated by means of the following equation:

                                 V + (O x P)
                                 -----------
                                    O + S


                                   - 5 -

<PAGE>



- --where: (A) V equals the product of the Consideration Number, the Collar
Factor, and the Average Closing Price; (B) O equals the number of shares of
Company Common Stock that are subject to a stock option (whether vested or
unvested) to be purchased, which option is outstanding and unexercised at the
Effective Date; (C) P equals the per-share average of the exercise prices of all
stock options (whether vested or unvested) to purchase shares of Company Common
Stock, which options are outstanding and unexercised at the Effective Date; and
(D) S equals the number of shares of Company Common Stock that shall be issued
and outstanding at the Effective Date.

Reasons for the Reorganization

      Management and the directors of the Company believe that it is in the best
interest of the Company and its shareholders for the Company to merge with a
larger financial institution in a tax-free reorganization (with respect to the
receipt by the Company shareholders of shares of Zions Common Stock). Management
and the directors of the Company believe that the proposed merger with Zions in
an exchange whereby the Company shareholders will receive Zions Common Stock in
exchange for their Company Common Stock provides the Company's shareholders with
a liquid investment with what management believes is the best available monetary
value based upon Zions' offer as compared to transactions involving bank holding
companies and banks comparable to the Company and the Bank as well as increased
liquidity for their investment, prospects for greater yield of their investment
through possibly increased dividends and potential for growth in their
investment due to the prospects for Zions generally. In addition, management and
the directors of the Company believe the combined institution will be more
competitive in the Company's market area due to Zions' greater resources. See
"Plan of Reorganization--Background of and Reasons for the Reorganization" for a
description of the factors considered by the Company's board of directors in
determining to recommend the Reorganization to shareholders for their approval.
The Company's board of directors believes that the merger with Zions will
realize substantial value for the Company's shareholders and provides them the
option of realizing a significant return on their original investment and
continuing to participate in the development of banking in Colorado by holding
the Zions Common Stock they will receive in the Reorganization.

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

Board of Directors Recommendation

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

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


                                   - 6 -

<PAGE>



Interests of Certain Persons in the Transaction

      The Plan of Reorganization provides that, following the Reorganization,
John G. Jackson, currently Chairman, President and Chief Executive Officer of
the Bank, will become an executive officer of Consolidated Association. Mr.
Jackson will enter into an Employment Agreement with Consolidated Association
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."

Finder's Fee

      In its effort to find a merger partner, the Company retained an
unaffiliated company as a finder. If the Reorganization is effected, the Company
will pay the finder a fee of $200,000 at closing. See "Plan of Reorganization--
Finder's Fee," below.

Tax Consequences

      The Company will receive an opinion from McKenna & Cuneo, L.L.P., legal
counsel to the Company (the "McKenna Opinion"), that, based upon the facts,
representations, and assumptions set forth or referred to in such opinion, the
Holding Company Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"). As a result, the Company shareholders who
receive Zions Common Stock in the Reorganization will recognize no gain or loss
upon the exchange of their shares of Company Common Stock for Zions Common Stock
in the Holding Company Merger (except with respect to cash received by such
shareholders in lieu of fractional shares and cash received by persons who
perfect their dissenters' rights). For further discussion, see "Plan of
Reorganization--Federal Income Tax Consequences of the Reorganization." A copy
of the McKenna Opinion is attached as Appendix A to this Proxy
Statement/Prospectus.

Dissenters' Rights

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

Conditions; Regulatory Approval

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


                                   - 7 -

<PAGE>



Amendment; Termination

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

      The Plan of Reorganization may be terminated and abandoned at any time
prior to the Effective Date, notwithstanding approval of the shareholders, as
follows: (i) by mutual consent of the parties to the Plan of Reorganization;
(ii) unilaterally, by Zions if any of the representations and warranties of the
Company or the Bank set forth in the Plan of Reorganization was materially
incorrect when made or in the event of a material breach or material failure by
the Company or the Bank of any covenant or agreement of the Company or the Bank
contained in the Plan of Reorganization which has not been, or cannot be, cured
within thirty days after written notice has been given; (iii) unilaterally, by
the Company if any of the representations and warranties of Zions, Val Cor or
Bank Colorado set forth in the Plan of Reorganization was materially incorrect
when made or in the event of a material breach or material failure by Zions, Val
Cor or Bank Colorado of any covenant or agreement of Zions, Val Cor or Bank
Colorado contained in the Plan of Reorganization which has not been, or cannot
be, cured within thirty days after written notice has been given; (iv) by either
Zions or the Company if the board of directors of either has determined in good
faith that the Holding Company Merger has become inadvisable or impracticable by
reason of federal or state litigation to restrain or invalidate the
Reorganization; or (v) by either party on or after July 31, 1998, if the
Effective Date has not occurred on or before that date.

Effective Date of the Reorganization

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

Accounting Treatment

      It is intended that the Reorganization will be treated for accounting
purposes as a "pooling of interests" in accordance with ABP Opinion No. 16.
Receipt of a determination by Zions' independent auditors that the
Reorganization should be treated as a pooling of interests is a condition of
closing of the Reorganization. See "Plan of Reorganization--Accounting
Treatment."

Comparison of Shareholders' Rights

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

"Anti-Takeover" Provisions

      The Articles of Incorporation and Bylaws of Zions contain provisions which
may be considered to be anti-takeover in nature, including staggered terms of
office for directors, absence of cumulative voting and special shareholder vote
requirements for certain types of extraordinary corporate transactions.

                                   - 8 -

<PAGE>



Additionally, Zions has adopted a shareholders' rights plan which will have the
effect of encouraging entities interested in acquiring Zions to negotiate any
such transactions with Zions' management and of deterring or discouraging
unfriendly takeovers by making any such takeover substantially more expensive to
the entity sponsoring the unfriendly takeover. The Company's Articles of
Incorporation and Bylaws do not contain any similar provision. See "Comparison
of the Rights of Shareholders of Zions and the Company."

Exchange of Certificates

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

Waiver of Preemptive Rights

      Over recent years the Company has granted stock options to officers and
directors to allow them to purchase additional shares of Company Common Stock.
At the present time, 16,250 stock options are outstanding. These stock options
may have been granted in violation of preemptive rights provisions set forth in
the Company's articles of incorporation. An express condition to closing of the
Holding Company Merger is that all the shareholders of the Company who did not
have an opportunity to exercise their preemptive right to acquire company stock
options must agree to waive any preemptive right they might have to be offered,
subscribe to, or acquire shares, options, and other interests and rights of or
in the Company. See "Plan of Reorganization--Waiver of Preemptive Rights."

Trading Markets; Pre-Announcement Prices

      The outstanding shares of Zions Common Stock currently are traded on the
Nasdaq National Market ("NASDAQ-NMS") under the symbol "ZION." The shares of
Zions Common Stock to be issued in the Reorganization will be listed on NASDAQ-
NMS, subject to official notice of issuance. The closing sale price for Zions
Common Stock on the NASDAQ-NMS on December 19, 1997, the last trading day prior
to the first public announcement of the Reorganization, was $_______. See
"Information Concerning Zions Bancorporation--Stock Prices and Dividends."

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

Selected Financial Information

      The following table sets forth certain historical financial information
for Zions and the Company. With respect to pro forma combined financial
information for Zions giving effect to the Reorganization using the pooling of
interests method of accounting, see "Plan of Reorganization--Unaudited Pro Forma
Combined Financial Information." This information is based on the respective
historical financial statements of Zions incorporated herein by reference and of
the Company which are included in this Proxy Statement/Prospectus and should be
read in conjunction with such statements and information and the related notes.
The information presented for the Company is derived from unaudited financial
information which is included herein. Such information has not been audited
because it would be impractical to do so.

                                   - 9 -

<PAGE>


<TABLE>
<CAPTION>
                                                                          Year Ended December 31,
                                           -------------------------------------------------------------------------------
                                                1997            1996            1995           1994             1993
                                                ----            ----            ----           ----             ----
                                                              (In Thousands, Except Per Share Amounts)
<S>                                        <C>            <C>             <C>            <C>           <C>       
Zions
Earnings
  Net interest income...........           $  351,799     $  289,166      $  233,547     $  198,606    $  174,657
  Provision for loan losses.....                6,175          4,640           3,000          2,181         2,993
  Net income....................              122,362        107,423          82,385         63,827        58,205
Per Share                                                                                
  Net income (diluted) .........           $     1.89     $     1.68      $     1.37     $     1.09    $     1.02
  Cash Dividends................                .4700          .4250           .3525          .2900         .2450
Statement of Condition at Period                                                         
  End                                                                                    
  Assets........................           $9,521,770     $7,116,413      $6,095,515     $4,934,095    $4,801,054
  Deposits......................            6,854,462      5,119,692       4,511,184      3,705,976     3,432,289
  Long-term debt................              258,566        251,620          56,229         58,182        59,587
  Shareholders' equity..........              655,460        554,610         469,678        365,770       312,592
Company (unaudited)(1)                                                                   
Earnings                                                                                 
  Net interest income...........           $    4,484     $    3,657      $    2,913     $    2,339    $    1,601
  Provision for loan losses.....                  120             90              60             24           (94)
    Net income..................                1,289          1,153             849            562           598
Per Share                                                                                
  Net income ...................           $    16.40     $    13.63      $     9.16     $     5.94    $     4.67
  Cash Dividends................                   --             --              --             --            --
Statement of Condition at Period                                                         
  End                                                                                    
  Assets........................           $   86,177     $   74,772      $   52,209     $   47,267    $   37,138
  Deposits......................               77,974         66,983          46,080         42,617        30,747
  Long-term debt................                  500          1,175           1,150          1,200            --
  Shareholders' equity..........                4,811          3,898           3,051          2,047         2,321
                                                                                     
</TABLE>

- ----------
(1)       The information presented for 1993 is for the Bank only. The Company
          was incorporated and became a bank holding company in 1994.


Comparative Per Share Data

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


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

Net Income Per Common Share
    Zions...........................         $ 1.89      $ 1.68       $ 1.37
    Company.........................          16.40       13.63         9.16
Book Value Per Common Share
    Zions...........................         $10.25      $ 8.72       $ 7.46
    Company.........................          63.86       46.19        32.91
Cash Dividends Declared Per Common
  Share
     Zions (1)......................         $.4700      $.4250       $.3525
     Company........................             --          --           --

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

                                     - 10 -

<PAGE>

Unaudited Pro Forma Combined Financial Information

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

<TABLE>
<CAPTION>
                                        Historical                           Pro Forma
                                  -------------------             --------------------------------
                                                                  Zions and
                                                                  Company             Company
                                                                  Pro-Forma           Equivalent
Per Common Share                  Zions       Company             Combined(4)         Pro-Forma(5)
- ----------------                  -----       -------             -----------         ------------

<S>                                <C>          <C>                  <C>              <C>
NET INCOME(diluted)(1)

 For the years ended
 December 31, 1997                 $1.89        $16.40               $                $
                                                                      ----
 December 31, 1996                  1.68         13.63
 December 31, 1995                  1.37          9.16

CASH DIVIDENDS(2)

 For the years ended
 December 31, 1997                $.4700        $   --               $                $
                                                                      ----
 December 31, 1996                 .4250            --

 December 31, 1995                 .3525            --

BOOK VALUE:(3)

 As of December 31, 1997          $10.25        $63.86               $                $
                                                                      ----
 As of December 31, 1996            8.72         46.19
 As of December 31, 1995            7.46         32.91
</TABLE>
- ----------------------
(1)     Net income per share is based on weighted average common and common
        equivalent shares outstanding.
(2)     Pro forma cash dividends per share represent historical cash dividends
        of Zions.
(3)     Book value per common share is based on total period-end shareholders'
        equity.
(4)     Pro-forma combined net income per share represents historical net income
        of Zions and the Company computed using historical weighted average
        common and common equivalent shares of Zions adjusted by computed common
        and common equivalent shares to be issued in the transaction. Pro-forma
        combined book value per share represents historical total shareholders'
        equity of Zions and the Company computed using Zions' historical common
        shares outstanding adjusted by computed common shares to be issued in
        the transaction.
(5)     Pro forma equivalent amounts are computed by multiplying the pro forma
        combined amounts by an assumed exchange ratio of _____ shares of Zions
        Common Stock for each share of Company Common Stock.


Recent Developments

      On December 29, 1997, Zions and FP Bancorp, Inc.("FP Bancorp"), the parent
company of First Pacific National Bank ("First Pacific") announced that a
definitive agreement had been signed under which FP Bancorp will merge with and

                                   - 11 -

<PAGE>



into Zions, with FP Bancorp shareholders receiving common shares of Zions. First
Pacific has approximately $359 million in assets in eight offices in San Diego
and Riverside Counties in California. The merger is subject to the approval of
FP Bancorp shareholders and banking regulators and is expected to close in the
second quarter of 1998. The merger is structured to be tax-free and is intended
to be accounted for as a pooling-of-interests. The agreement provides for the
exchange of each common share of FP Bancorp for 0.627 of a share of Zions Common
Stock. Based upon Zions' stock price of $43.50 per share as of December 29,
1997, the transaction is valued at approximately $90 million. Zions will incur
approximately $2 million in after-tax, merger-related charges in the second
quarter of 1998 in conjunction with this transaction.

      On January 23, 1998, Zions and Sky Valley Bank Corp.("Sky Valley"), the
parent company of The First National Bank in Alamosa ("FNBA"), completed their
reorganization pursuant to which Sky Valley merged with Val Cor, and Val Cor's
wholly-owned subsidiary Bank Colorado (formerly known as Valley National Bank of
Cortez) merged with Sky Valley's wholly-owned subsidiary, FNBA, which was the
surviving corporation and which upon consummation of its merger with Bank
Colorado adopted the name Bank Colorado, National Association. Sky Valley
shareholders received 572,836 shares of Zions Common Stock. Sky Valley had
approximately $120 million in assets at September 30, 1997 and FNBA had three
offices in southern Colorado. The merger was structured as a tax-free
reorganization and has been accounted for as a pooling-of-interests.

      Zions and Routt County National Bank Corporation ("Routt County"), the
holding company of First National Bank of Colorado ("FNBC"), announced on
January 22, 1998 that a definitive agreement had been signed under which Routt
County will merge with and into Val Cor in exchange for an estimated 650,000
shares of Zions Common Stock. The merger is structured to be tax-free and is
intended to be accounted for as a pooling-of-interests. The merger is subject to
the approval of banking regulators and the shareholders of Routt County. FNBC
operates through two banking offices in Steamboat Springs, Colorado. At December
31, 1997, Routt County had assets of $93 million. The transaction is expected to
close in the second quarter of 1998.

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



                                      - 12 -
<PAGE>

                            PLAN OF REORGANIZATION

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

The Reorganization

      The Plan of Reorganization provides for the merger of the Company into Val
Cor, with Val Cor being the surviving corporation (the "Holding Company
Merger"), and for the consolidation of the Bank with Bank Colorado (the
successor in interest to Valley National Bank of Cortez) to form a new national
banking association which will adopt and operate under the name Bank Colorado,
National Association (the "Consolidated Association"; the consolidation of the
Bank and Valley into the Consolidated Association hereinafter referred to as the
"Bank Consolidation"). Val Cor is a bank holding company incorporated in
Colorado. Val Cor is a wholly-owned subsidiary of Zions.

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

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

      The Company is a bank holding company incorporated in Colorado. The
Company operates through its wholly-owned subsidiary, State Bank and Trust of
Colorado Springs (the "Bank"). The Bank operates a commercial banking business
through three offices/branches in Colorado Springs, Colorado. The Company owns a
50% interest in SBT Mortgage, LLC.

      Upon consummation of the Reorganization, the holders of each outstanding
share of Company Common Stock participating in the Reorganization will receive,
in exchange for each share of Company Common Stock, their pro rata share of the
merger consideration, consisting of shares of Zions Common Stock and cash in
exchange for any fractional shares. The shares of Company Common Stock will be
canceled and immediately converted into the right for holders of Company Common
Stock to receive, in exchange for each share of Company Common Stock, that
number of shares of Zions Common Stock calculated by dividing the product of the
Consideration Number and Collar Factor by the sum of the number of shares of
Company Common Stock issued and outstanding as of the Effective Date of the
Reorganization and the Option Equivalent Number. The amounts represented by some
of these and other defined terms are variable and will not be known with
precision until the Effective Date of the Reorganization. As a result, the
precise number of shares of Zions Common Stock to be exchanged for each share of
Company Common Stock cannot be determined until the Effective Date.

      On April ___, 1998, the closing price of Zions Common Stock was $______
per share. On that date there were issued and outstanding 78,592 shares of
Company Common Stock. Assuming that the Reorganization had been consummated as
of April ___, 1998, that the Average Closing Price of Zions Common Stock had
been $_______

                                   - 13 -

<PAGE>



_____ per share on that date, that the Consideration Number had been _____, and
that the Collar Factor had been ___________, shareholders of the Company under
such circumstances would have received _____ shares of Zions Common Stock for
each share of Company Common Stock, or an equivalent value of $_________ per
share of Company Common Stock.

      On April ___, 1998, options to purchase a total of 16,250 shares of
Company Common Stock at an average exercise price of $29.23 per share were
granted and outstanding, held by eight persons, each of whom was an executive
officer or director of the Company. At the Effective Date of the Reorganization,
these Company stock options will automatically be converted into options to
purchase shares of Zions Common Stock. Assuming that the Effective Date of the
Reorganization had been April ___, 1998, that the Average Closing Price of Zions
Common Stock had been $[45.00] on that date, that the Consideration Number had
been _______, and that the Collar Factor had been _______, these options to
purchase Zions Common Stock would have covered a total of shares of Zions Common
Stock at an average exercise price of $________. Based on these assumptions,
these options had on that date an aggregate value (the difference between the
market price of Zions Common Stock and the exercise price) of $[4,328,753] to
the option holders. The options to purchase Company Common Stock may have been
granted in violation of the preemptive rights provisions of the Company's
Articles of Incorporation. A condition to closing the Holding Company Merger is
that all shareholders of the Company must waive any preemptive rights they might
have to be offered, subscribe to, or acquire shares, options, and other
interests and rights of or in the Company. By waiving their preemptive rights,
Company shareholders who were not granted Company stock options will, in
addition to waiving their rights to have been offered Company stock options at
the time such options were granted to the executive officers and directors of
the Company, and to acquire shares of Company Common Stock at the time of
exercise of any stock options, give up financial benefits they might otherwise
have in the options. Their waiver of such rights will, however, satisfy a
condition to closing without which Zions in its discretion may decline to
proceed with the Reorganization. See "Plan of Reorganization--Waiver of
Preemptive Rights."

Background of and Reasons for the Reorganization

      The Company. In mid 1997 John Jackson was contacted by Mr. Alan Noyes of
Professional Bank Consultants, Inc. with a request to present the Bank to three
holding companies which he felt were interested in purchasing a similar
institution in the Colorado Springs area. Mr. Noyes was given permission and
over the next sixty days he made contact with Mr. Dale Gibbons, Executive Vice
President of Zions. Additional information was requested by Mr. Gibbons through
Mr. Noyes, which included call reports and current financial data. At a meeting
of the Colorado Bankers Association Government Affairs Committee on October 1,
Mr. Jackson discussed with Gary Judd of Vectra Bank his recently announced
merger with Zions. The following day, the two again discussed Zions in greater
detail and it was agreed that Mr. Judd would arrange for a meeting with Harris
Simmons, President and Chief Executive Officer of Zions, at a later date. At
this time Mr. Jackson called Mr. Noyes, told him that the Bank would be talking
to Zions directly and they agreed that should a transaction transpire that his
full compensation would be $200,000 payable in cash upon closing.

      On October 22, 1997, Messrs. Jackson, Scott Pursley, Judd and Simmons met
in Colorado Springs to discuss generally the philosophy of Zions and how the
Bank might fit into Zions' Colorado plans. Mr. Simmons explained Zions'
acquisition strategies and indicated that Mr. Jackson would be asked to sign an
employment agreement to remain with the Bank if an agreement could be reached.
At the conclusion of that meeting, Mr. Jackson and Mr. Pursley agreed to discuss
the conversation with the entire board at a retreat which was to take place in
Phoenix the first week of November. The Company Board was informed at the
regular October meeting that discussions had begun with an entity; however, no
mention as to its identity was made prior to the Phoenix retreat. At the retreat
Zions'

                                     - 14 -

<PAGE>



financial information was presented to the board members and a lengthy
discussion was held regarding a sale. At the conclusion of the two day meeting
it was agreed that if a minimum price, that the Board set, was offered that
negotiations should proceed. The board felt, as did management, that Zions was a
high performance, high character and high quality organization which had
historically exhibited strong loyalty to customers and staff, especially when
compared to other regional and super regional organizations which had approached
the Bank in the past. The board agreed that Mr. Jackson should meet again with
Mr. Simmons and this meeting was arranged for November 8, 1997. The meeting
occurred with Mr. Simmons and Mr. Gibbons making an offer very near the minimum
price set by the board. Over the next two weeks a series of phone calls was made
between the parties, where it was agreed, that the price would be determined by
year end capital of the Bank. At the November board meeting the transaction was
approved and direction was given to proceed with the definitive agreement, which
was then signed on December 19, 1997.

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

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

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

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

      o     the monetary value of the stock offered to the Company shareholders
            by Zions (i) in absolute terms, and (ii) as compared to recent
            mergers and acquisitions involving other banking and financial
            institutions in Colorado;

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

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

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

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

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

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


                                   - 15 -

<PAGE>



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

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

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

Voting Agreements

      All of the directors and executive officers of the Company have agreed to
support the Plan of Reorganization and to recommend its adoption by the other
shareholders of the Company.

      In connection with the Plan of Reorganization, eleven shareholders of the
Company, including their affiliated entities, whose common share holdings of
63,654 shares aggregate approximately 80.1% of the outstanding Company Common
Stock as of April ___, 1998, have entered into agreements with Zions under which
they have agreed, in their capacity as shareholders, to vote their shares in
favor of the Plan of Reorganization. Various of such shareholders are officers
and directors of the Company. Such vote will be sufficient to approve the Plan
of Reorganization and the Reorganization. If these individuals vote their shares
of Company Common Stock in accordance with the requirements of the voting
agreements, approval of the Plan of Reorganization and the Reorganization by the
Company shareholders is assured, notwithstanding the vote of other Company
shareholders.

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

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

Waiver of Preemptive Rights

      The Company's Articles of Incorporation provide that the holders of shares
of Company Common Stock shall have the preemptive right to subscribe to and
acquire on a proportional basis additional shares of common stock or for options

                                   - 16 -

<PAGE>



to purchase common stock. Between 1994 and 1996 the Company granted various
stock options to executive officers and directors of the Company of which a
total of 16,250 stock options to eight executive officers and directors of the
Company remain outstanding at an average exercise price of $29.23 per share.
These options may have been granted in violation of the preemptive rights
provisions of the Company's Articles of Incorporation referred to above. Upon
consummation of the Reorganization, any outstanding stock option will
automatically be converted into an option to purchase, on the same terms as the
option to purchase Company Common Stock, that number of shares of Zions Common
Stock equal to the number of shares of Company Common Stock which such option
holder would be entitled to receive under the Plan of Reorganization had the
option holder exercised his options prior to the Reorganization. The exercise
price of such options would likewise be adjusted. In accordance with the formula
established by the Plan of Reorganization, were the Reorganization to be
consummated on April __, 1998, the holders of the outstanding Company options
would be able to purchase a total of ________ shares of Zions Common Stock at an
average exercise price of $__________ per share. On April __, 1998, the closing
sales price of Zions Common stock on the NASDAQ-NMS was $_____ per share. An
express condition of closing of the Reorganization as set forth in the Plan of
Reorganization is that the holders of all of the outstanding options to acquire
shares of Company Common Stock have executed documents waiving all preemptive
rights granted to them under the articles of incorporation of the Company and
the Colorado Revised Statutes to be offered, to subscribe to, or to acquire
shares of common stock, rights, warrants, privileges, and options to purchase or
receive common stock, securities and obligations of any kind convertible into
common stock, or any other equity interest or right to an equity interest in the
Company, now or hereafter authorized.

Required Vote; Management Recommendation

      Approval of the Plan of Reorganization and the Reorganization requires the
affirmative vote of the holders of eighty percent (80%) of the outstanding
shares of Company Common Stock entitled to vote at the Special Meeting. Because
approval requires the affirmative votes of eighty percent (80%) of all
outstanding shares of Company Common Stock, a failure to vote, an abstention, or
a broker's failure to vote shares held in street name will have the same legal
effect as a vote against approval of the Plan of Reorganization and the
Reorganization. See "Voting Agreements" immediately above for a discussion of
the ownership of Company Common Stock by various officers, directors, and
shareholders of the Company. THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY
RECOMMENDS THAT THE COMPANY SHAREHOLDERS VOTE "FOR" APPROVAL OF THE PLAN OF
REORGANIZATION AND THE REORGANIZATION.

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

No Opinion of a Financial Advisor

     The Company's Board of Directors has not retained an independent financial
advisor to evaluate the Merger Consideration offered to the Company's
shareholders by Zions. However, management and the directors of the Company
believe that the Merger Consideration to be paid pursuant to the Plan of
Reorganization is fair to the shareholders of the Company from a financial point
of view. See "Plan of Reorganization--Background of and Reasons for the
Reorganization."


                                     - 17 -

<PAGE>



Finder's Fee

     On October 2, 1997, the Company entered into an agreement with Professional
Bank Consultants, Inc. ("PBCI") of Colorado Springs, Colorado. PBCI is not
affiliated with the Company. Pursuant to the agreement, PBCI would identify and
contact financial institutions which might be potential merger partners with the
Company. See "Plan of Reorganization--Background of and Reasons for the
Reorganization--The Company" for additional information regarding PBCI's
activities. For its services respecting the Reorganization, the Company will pay
PBCI a fee of $200,000 at the Effective Date.

Conversion of Company Shares

      Under the Plan of Reorganization, holders of shares of Company Common
Stock will receive shares of Zions Common Stock. Upon consummation of the
Reorganization, the shares of Company Common Stock will be canceled and
immediately converted into the right for holders of Company Common Stock to
receive, in exchange for each share of Company Common Stock, that number of
shares of Zions Common Stock calculated by dividing the product of the
Consideration Number and the Collar Factor by the sum of the number of shares of
Company Common Stock issued and outstanding as of the Effective Date of the
Reorganization and the Option Equivalent Number. See "Summary--Certain
Definitions," above.

     On April __, 1998, the closing price of Zions Common Stock was $__________
per share. On that date there were 78,592 issued and outstanding shares of
Company Common Stock. Assuming that the Reorganization had been consummated as
of April __, 1998, that the Average Closing Price of Zions Common Stock had been
$ per share on that date, that the Consideration Number had been , and that the
Collar Factor had been _______, shareholders of the Company under such
circumstances would have received _____ shares of Zions Common Stock for each
share of Company Common Stock, or an equivalent value of $________ per share of
Company Common Stock.

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

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

     Payment for Fractional Shares.  No fractional shares of Zions Common Stock
will be issued in connection with the Reorganization.  Instead, each Company
shareholder who surrenders for exchange Company Common Stock certificates

                                     - 18 -

<PAGE>



representing a fraction of a share of Zions Common Stock will receive, in
addition to a certificate for the whole shares of Zions Common Stock represented
by the surrendered certificates, cash in an amount equal to the product of such
fraction times $40.00. Such fractional share interest will not include the right
to vote or to receive dividends or any interest thereon.

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

Federal Income Tax Consequences of the Reorganization

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

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

      Based upon the facts and representations which will be set forth or
referred to in the McKenna Opinion, such opinion will provide, among other
things, that the Company will not recognize gain or loss for federal income tax
purposes upon the Merger and that the shareholders of the Company will have the
following federal income tax consequences upon the Merger: (i) no gain or loss
will be recognized by a shareholder of the Company upon the receipt of Zions
Common Stock solely in exchange for his or her Company Common Stock; (ii) the
aggregate basis of the Zions Common Stock received by a shareholder of the
Company pursuant to the Merger (including any fractional share interest to which
that shareholder would otherwise be entitled) will be the same as the aggregate
basis of the Company Common Stock exchanged therefor; (iii) the holding period
of the Zions Common Stock received by a shareholder of the Company pursuant to
the Merger (including any fractional share interest to which that shareholder
would otherwise be entitled) will include the holding period of the Company
Common Stock exchanged therefor, provided the Company Common Stock is held as a
capital asset by the shareholder on the Effective Date; (iv) cash received by a
shareholder of the Company in lieu of a fractional share of Zions Common Stock
will be treated as received in exchange for that fractional share, and the
shareholder 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;

                                     - 19 -

<PAGE>



and (v) cash received by a shareholder of the 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.

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

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

Rights of Dissenting Shareholders

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

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

     Overview. Holders of Company Common Stock have the right under the Colorado
Business Corporation Act to dissent from the Reorganization and obtain payment
of the fair value of their shares. Fair value means the value of the shares
immediately before the Effective Date, excluding any appreciation or
depreciation in anticipation of the corporate action except to the extent
exclusion would be inequitable. If Val Cor and a shareholder who has exercised
his or her right to dissent (a "Dissenting Shareholder") are not able to agree
on a fair value, Val Cor must petition a court in El Paso 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 111 South Tejon Street, Colorado Springs, Colorado 80903
long enough before the vote is taken at the Special Meeting so that the Company
receives it before the Special Meeting. A shareholder wishing to dissent must
also not vote in favor of the Reorganization. If a shareholder's written notice
of intent to demand payment is not received by the Company before the Special
Meeting, or if the shareholder votes in favor of the Reorganization, such
shareholder will not have the right to dissent and will be required to
participate in the Reorganization. A vote by a shareholder at the Special
Meeting against the Plan of Reorganization will not constitute notice under
Colorado law of an intent to exercise appraisal rights.


                                     - 20 -

<PAGE>


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

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

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

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

     Court Proceeding to Determine Fair Value. If a demand for payment remains
unsettled for 60 days following Val Cor's receipt of the demand, Val Cor may
petition a court in El Paso 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.


                                     - 21 -

<PAGE>



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

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

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

Interests of Certain Persons in the Transaction

     The Plan of Reorganization provides that after the Reorganization becomes
effective, John G. Jackson, currently chairman, president and chief executive
officer of the Company and the Bank, will become an executive officer of
Consolidated Association. Mr. Jackson will enter into an employment agreement
with Consolidated Association 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. Jackson will receive cash compensation not less than the sum
of the aggregate annualized salary paid to Mr. Jackson by the Bank as of
September 30, 1997 and the annual bonus awarded to Mr. Jackson by the Bank with
respect to 1997. Mr. Jackson will be eligible to be considered for cash
compensation increases, upon review, and will be entitled to other benefits
normally afforded executive employees, including employee benefit plan
participation, retirement and life insurance policies, and consideration for
periodic raises, based upon performance and responsibility.

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

     Under his employment agreement, Mr. Jackson has agreed that he will not
during the term of his employment by Consolidated Association and continuing for
two years after the date of termination of his employment pursuant to the
employment agreement (i) engage in the banking business other than on behalf of
Consolidated Association or its affiliates within the prescribed market area of
El Paso County, 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 Consolidated
Association or its affiliates) engaged in the banking business in such market
area, or (iii) directly or indirectly solicit or otherwise intentionally cause
any employee, officer, or member of the respective Boards of Directors of
Consolidated Association or any of its affiliates or any of their affiliates to
engage in any action prohibited under (i) or (ii) above.


                                     - 22 -

<PAGE>


Inconsistent Activities

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

Conduct of Business Pending the Reorganization

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

      Prior to the Effective Date, the Company and the Bank have each agreed
that neither will without Zions' prior written consent: (i) declare or pay cash
dividends or property dividends with the exception of customary periodic cash
dividends paid by the Company or the Bank in a manner consistent with past
practice;(ii) declare or distribute any stock dividend, authorize any stock
split, authorize, issue or make any distribution of its capital stock or other
securities except for the issuance of Company Common Stock already subscribed
for or upon exercise of existing stock options, or grant any options to acquire
such securities; (iii) except as contemplated by the Plan of Reorganization,
merge into, consolidate with or sell its assets to any other person, or enter
into any other transaction or agree to effect any other transaction not in the
ordinary course of its business or engage in any discussions concerning such a
possible transaction; (iv) convert the charter or form of entity of the Bank to
any other charter or form of entity; (v) make any direct or indirect redemption,
purchase or other acquisition of any of its capital stock; (vi) incur any
liability or obligation, make any commitment or disbursement, acquire or dispose
of any property or asset, make any agreement or engage in any transaction,
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 October 1, 1997;
(ix) create or modify any pension or profit-sharing plan, bonus, deferred
compensation, death benefit or retirement plan, or the level of benefits under
any such plan, or increase or decrease any severance or termination pay benefit
or any other fringe benefit; (x) enter into any employment or personal services
contract with any person or firm, except to directly facilitate the
Reorganization; nor (xi) purchase any loans or loan-participation interests
from, or participate in any loan originated by, any person other than the
Company or the Bank.

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


                                   - 23 -

<PAGE>


Conditions to the Reorganization

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

      The obligations of Zions, Val Cor and Bank Colorado to consummate the
Reorganization are subject to satisfaction or waiver of certain additional
conditions, including: (i) the shareholders of the Company and the Bank shall
have authorized the Holding Company Merger and Bank Consolidation, respectively;
(ii) all representations and warranties made by the Company and the Bank in the
Plan of Reorganization shall be true and correct in all material respects on the
Effective Date and the Company and the Bank shall have performed all of their
respective obligations under the Plan of Reorganization on or prior to the
Effective Date; (iii) McKenna & Cuneo, L.L.P., legal counsel to the Company,
shall have rendered a legal opinion to Zions in form and substance as set forth
in the Plan of Reorganization; (iv) Zions shall have received a favorable
opinion from litigation counsel for the Company and the Bank substantially in
form and substance as set forth in the Plan of Reorganization; (v) the Company
shall have delivered to Zions all regulatory authorizations entitling the Bank
to operate its branches; (vi) during the period from September 30, 1997 to the
Effective Date, there shall have been no material adverse change in the
financial position or results of operations of the Company or the Bank nor shall
the Company or the Bank have sustained any material loss or damage to its
properties which materially affects its ability to conduct its business; (vii)
on and as of the Effective Date the consolidated net worth of the Company as
determined in accordance with generally accepted accounting principles shall not
be less than the sum of (a) $4,499,551, and (b) the aggregate contributions to
capital caused by the payments accompanying the exercise of any stock options on
or after September 30, 1997; (viii) on and as of the Effective Date, the
aggregate reserve for loan losses of the Bank as determined in accordance with
generally accepted accounting principles shall not be less than $587,397; (ix)
the CRA rating of the Bank shall be no lower than "satisfactory"; (x) Mr.
Jackson shall have entered into an employment agreement with Consolidated
Association in the form set forth in the Plan of Reorganization; (xi) Duane,
Morris & Heckscher LLP, legal counsel to Zions, shall have rendered a legal
opinion to Zions that the reorganization contemplated by the Plan of
Reorganization shall be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986; (xii) at each of the time of the effectiveness of the Registration
Statement, but prior to the mailing of the proxy materials, and

                                     - 24 -

<PAGE>



the Effective Date, Zions shall have received a comfort letter from the chief
financial officer of the Company, in form and substance acceptable to Zions,
covering matters pertaining to the Company's and the Bank's latest available
financial statements and to the financial data and statistical data included in
the Registration Statement; (xiii) the holders of all of the outstanding shares
of Company Common Stock shall have executed and delivered to Zions such
documents, in form and substance satisfactory to Zions, waiving all preemptive
rights granted to them under the Company's articles of incorporation and the
Colorado Revised Statutes to be offered, to subscribe to, or to acquire any
equity interest or right to an equity interest in the Company, now or hereafter
authorized; (xiv) Bank Colorado shall have received an executed consent from the
landlord of the Bank's head office facility to the assignment and assumption by
the Bank of the lease of such facility, in form and substance acceptable to Bank
Colorado; and (xv) NationsBank, N.A. shall have delivered to the Company and the
Bank, in form and substance reasonably acceptable to Zions, its written consent
to the transactions contemplated by the Plan of Reorganization, the assumption
or discharge by Val Cor of the loan that is the subject of that certain loan
agreement dated as of April 15, 1997, between NationsBank, N.A., the Company,
and the Bank, and the release of the shares of the stock of the Bank which
secure such loan.

      The obligations of the Company and the Bank to consummate the
Reorganization are subject to the satisfaction or waiver of certain additional
conditions, including: (i) the shareholders of Bank Colorado shall have
authorized the Bank Consolidation; (ii) all representations and warranties made
by Zions, Val Cor and Bank Colorado in the Plan of Reorganization shall be true
and correct in all material respects on the Effective Date and Zions, Val Cor
and Bank Colorado shall have performed all of their respective obligations under
the Plan of Reorganization on or prior to the Effective Date; (iii) receipt of a
legal opinion of Duane, Morris & Heckscher LLP, legal counsel to Zions, in form
and substance as set forth in the Plan of Reorganization; (iv) during the period
from September 30, 1997 to the Effective Date, there shall not have been any
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; (v)
Zions Common Stock shall be quoted on NASDAQ or shall be listed on a national
securities exchange; and (vi) receipt of a legal opinion of McKenna & Cuneo,
L.L.P., legal counsel to the Company, that the reorganization contemplated by
the Plan of Reorganization shall be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986.

Representations and Warranties

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

                                     - 25 -


<PAGE>



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

Amendment and Waiver

      Notwithstanding prior approval by the shareholders of the Company, 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 unless
shareholder approval of the amendment is procured. Zions or the Company may
also, at any time prior to the Effective Date, waive any condition or term of
the Plan of Reorganization provided that any such waiver must be in writing
signed by the party entitled to the benefit thereof and will be permitted only
if it will not have a materially adverse effect on the benefits intended under
the Plan of Reorganization to its shareholders.

Authorized Termination and Damages for Breach

      The Plan of Reorganization may be terminated and abandoned at any time
prior to the Effective Date, notwithstanding approval of the shareholders of the
Company, as follows: (i) by mutual consent of the parties to the Plan of
Reorganization; (ii) unilaterally, by Zions if any of the representations and
warranties by the Company or the Bank was materially incorrect when made or in
the event of a material breach or material failure by the Company or the Bank of
any covenant or agreement of the Company or the Bank which has not been, or
cannot be, cured within thirty days after written notice has been given; (iii)
unilaterally, by the Company if any of the representations and warranties of
Zions, Val Cor or Bank Colorado was materially incorrect when made or in the
event of a material breach or material failure by Zions, Val Cor or Bank
Colorado of any covenant or agreement of Zions, Val Cor or Bank Colorado
contained in the Plan of Reorganization which has not been, or cannot be, cured
within thirty days after written notice has been given; (iv) by either the
Company or Zions if the Holding Company Merger has become inadvisable or
impracticable by reason of federal or state litigation to restrain or invalidate
the transactions contemplated by the Plan of Reorganization; or (v) by any party
on or after July 31, 1998, if the Effective Date has not occurred on or before
that date.

      If either party terminates the Plan of Reorganization because any of the
representations and warranties of a party was materially incorrect when made, or
because of a material breach or material failure by a party of a covenant or
agreement made under the Plan of Reorganization, then such party whose
representations and warranties were materially incorrect or who materially
breached or failed to perform its covenant or agreement shall be liable to the
other party or parties to the Plan of Reorganization not affiliated with it in
the amount of the actual, reasonable out-of-pocket expenses, not to exceed
$500,000. In addition, the Company shall be liable (and the Company and the Bank
shall be jointly and severally liable in the event that the Bank or its board of
directors shall have participated in the Trigger Event, as defined below) to
Zions in the amount of $1 million if a Trigger Event should occur. The Plan of
Reorganization defines "Trigger Event" as any of the following: (a) the
respective board of directors of the Company or the Bank shall have authorized
the execution of an agreement with any person other than Zions or an affiliate
of Zions (a "Third Party") pursuant to which such Third Party will acquire,
merge or consolidate with, or acquire all or substantially all of the assets of,
the Company or the Bank, or engage in a substantially similar transaction; (b)
the respective board of directors of the Company or the Bank shall have
supported an offer or proposal by any Third Party to acquire, merge or
consolidate with the Company or the Bank, or acquire all or substantially all of
the assets of the Company or the Bank (or to engage in a substantially similar
transaction); (c)

                                     - 26 -


<PAGE>



unless such recommendation is required, in the reasonable opinion of independent
corporate counsel to the Company, for the board of directors of the Company to
discharge its fiduciary duties, the respective board of directors of the Company
or the Bank shall have recommended to the shareholders of the Company that they
not approve this Agreement; or (d) the shareholders of the Company, at the
meeting of shareholders called to vote on this Agreement, fail to approve this
Agreement by the vote required by applicable law and the articles of
incorporation of the Company and, within six months thereafter, the respective
board of directors of the Company or the Bank shall have either authorized the
execution of an agreement with a Third Party pursuant to which such Third Party
will acquire, merge or consolidate with, or acquire all or substantially all of
the assets of, the Company or the Bank, or engage in a substantially similar
transaction.

Restrictions on Resales by Company Affiliates

      The shares of Zions Common Stock issuable in the Reorganization have been
registered under the Securities Act, and such shares will generally be freely
tradable by Company shareholders who receive Zions shares as a result of the
Reorganization. However, the registration does not cover resales by Company
shareholders who may be deemed to control, be controlled by, or be under common
control with the Company or Zions and who therefore may be deemed "affiliates"
of the Company or Zions as that term is defined in Rule 144 under the Securities
Act. Such affiliates are not permitted to sell their shares of Zions Common
Stock acquired in the Reorganization except pursuant to (i) an effective
registration statement under the Securities Act covering the shares to be sold;
(ii) the conditions contemplated by Rules 144 and 145 under the Securities Act;
or (iii) another applicable exemption from the registration requirements of the
Securities Act. Additionally, such Company affiliates will not be permitted to
sell any shares of Company Common Stock or Zions Common Stock during the 30 day
period preceding the Effective Date, nor will they be permitted to sell any
shares of Zions Common Stock following the Effective Date until such time as
financial results covering at least 30 days of post-Holding Company Merger
combined operations shall have been published by Zions. Management of the
Company will notify those persons who it believes may be such affiliates.

Expenses

      Each party to the Plan of Reorganization will pay its own expenses,
including those of its own counsel, accountants, and tax advisors, incurred in
connection with the Plan of Reorganization. The Company will pay the cost of
printing and delivering this Proxy Statement/Prospectus and other material to
the Company shareholders. The Company will pay the finder's fee referred to
above under "Finder's Fee." Zions will pay the costs attributable to registering
its stock issuable pursuant to this Proxy Statement/Prospectus under federal and
state securities laws. Zions will also pay the cost of procuring the regulatory
approvals, orders, and waivers described in the Plan of 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.


                                     - 27 -

<PAGE>



Effective Date of the Reorganization

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

Accounting Treatment

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

Relationship Between Zions and the Company

      Neither Zions nor the Company is aware of any material relationship
between Zions, its directors or officers or their affiliates, and the Company,
its directors or executive officers or their affiliates, except as contemplated
by the Plan of Reorganization or as described herein. On April 15, 1997, the
Company and the Bank entered into a loan agreement with NationsBank, N.A. in the
principal amount of $_______. This loan is secured by shares of common stock of
the Bank. It is possible that Zions or Val Cor will repay the loan prior to
closing and thereby become the creditor of the Company and the Bank upon
assumption of the loan.

Unaudited Pro Forma Combined Financial Information

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



                                     - 28 -


<PAGE>


<TABLE>
<CAPTION>
                                        Historical                           Pro Forma
                                  -------------------             --------------------------------
                                                                  Zions and
                                                                  Company             Company
                                                                  Pro-Forma           Equivalent
Per Common Share                  Zions       Company             Combined(4)         Pro-Forma(5)
- ----------------                  -----       -------             -----------         ------------

<S>                               <C>           <C>                  <C>                
NET INCOME(diluted)(1)

 For the years ended
 December 31, 1997                $ 1.89        $16.40               $____             $
 December 31, 1996                  1.68         13.63
 December 31, 1995                  1.37          9.16

CASH DIVIDENDS(2)

 For the years ended
 December 31, 1997                $.4700        $   --               $____             $
 December 31, 1996                 .4250            --
 December 31, 1995                 .3525            --


BOOK VALUE:(3)
 As of December 31, 1997          $10.25        $63.86               $____             $
 As of December 31, 1996            8.72         46.19
 As of December 31, 1995            7.46         32.91
</TABLE>

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


                          SUPERVISION AND REGULATION

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

Zions

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


                                     - 29 -

<PAGE>



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

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

Regulatory Capital Requirements

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

      Risk-based capital ratios are calculated with reference to risk-weighted
assets, which include both on-balance sheet and off-balance sheet exposures. The
risk-based capital framework contains four risk weight categories for bank
holding company assets--0%, 20%, 50% and 100%. Zero percent risk-weighted
assets include, generally, cash and balances due from federal reserve banks and
obligations unconditionally guaranteed by the U.S. government or its agencies.
Twenty percent risk-weighted assets include, generally, claims on U.S. banks and
obligations guaranteed by U.S. government sponsored agencies as well as general
obligations of states or other political subdivisions of the United States.
Fifty percent risk-weighted assets include, generally, loans fully secured by
first liens on one-to-four family residential properties, subject to certain
conditions. All assets not included in the foregoing categories are assigned to
the 100% risk-weighted category, including loans to commercial and other
borrowers. As of year-end 1992, the minimum required ratio for qualifying Total
Capital became 8%, of which at least 4% must consist of Tier 1 Capital. At
December 31, 1997, Zions' Tier 1 and Total Capital ratios were 11.74% and
13.75%, respectively.


                                     - 30 -

<PAGE>



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

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

                              Risk-Based Capital
                            (Dollars in thousands)
                                                                   Percent
                                                                   of Risk-
                                                                   Adjusted
                                                 Amount             Assets
                                                 ------             ------

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

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

Risk-Adjusted Assets,
  net of goodwill, excess deferred
  tax assets and excess allowance..........     $5,624,373          100.00%
                                                ==========         =======


Minimum Leverage Ratio. The Board of Governors has adopted capital standards and
leverage capital guidelines that include a minimum leverage ratio of 3% Tier 1
Capital to total assets (the "leverage ratio"). The leverage ratio is used in
tandem with a risk-based ratio of 8% that took effect at the end of 1992. At
December 31, 1997, Zions' leverage ratio was 6.75%.

      The Board of Governors has emphasized that the leverage ratio constitutes
a minimum requirement for well-run banking organizations having well-diversified
risk, including no undue interest rate exposure, excellent asset quality, high
liquidity, good earnings, and a composite rating of 1 under the Interagency Bank
Rating System. Banking organizations experiencing or anticipating significant
growth, as well as those organizations which do not exhibit the characteristics
of a strong, well-run banking organization described above, will be required to
maintain strong capital positions substantially above the minimum supervisory

                                     - 31 -


<PAGE>



levels without significant reliance on intangible assets. Furthermore, the Board
of Governors has indicated that it will consider a "tangible Tier I Capital
Leverage Ratio" (deducting all intangibles) and other indices of capital
strength in evaluating proposals for expansion or new activities.

      The following table presents Zions' leverage ratio at December 31, 1997. A
leverage ratio of 3% will be the minimum required for the most highly rated
banking organizations, and according to the Board of Governors, other banking
organizations would be expected to maintain capital at higher levels.

                                                     (Dollars in thousands)
                                                                     Percent
                                                                   of Average
                                                                   Assets, Net
                                                  Amount           of Goodwill
                                                  ------           -----------

Tier 1 Capital.............................     $  660,446             6.75%
Minimum Requirement........................        293,537             3.00
                                                ----------         --------

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

Average Assets, net of goodwill and
  deferred tax assets......................     $9,784,570           100.00%
                                                ==========         =========

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

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

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

                                     - 32 -


<PAGE>



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

Other Regulatory and Supervisory Issues

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

      FDICIA also contains provisions which, among other things, restrict
investments and activities as principal by state nonmember banks to those for
which national banks are eligible, impose limitations on deposit account balance
determinations for the purpose of the calculation of interest, and require the
federal banking regulators to prescribe, implement or modify standards for
extensions of credit secured by liens on interests in real estate or made for
the purpose of financing construction of a building or other improvements to
real estate, loans to bank insiders, regulatory accounting and reports, internal
control reports, independent audits, exposure on interbank liabilities,
contractual arrangements under which institutions receive goods, products or
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).


                                     - 33 -


<PAGE>



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

Deposit Insurance and Other Assessments

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

      Until June 30, 1998, both BIF- and SAIF-assessable deposits will be
subject to an assessment schedule providing for an assessment range of 0% to
 .27% (with intermediate rates of .03%, .10%, .17% and .24%, depending upon an
institution's supervisory risk group). Both BIF and SAIF assessment rates are
subject to semi-annual adjustment by the FDIC Board of Directors within a range
of up to five basis points without public comment. The FDIC Board of Directors
also possesses authority to impose special assessments from time to time.

      In addition to the payment of deposit insurance assessments, depository
institutions are required to make quarterly assessment payments to the FDIC on
both their BIF and SAIF assessable deposits which will be paid to the Financing
Corporation, established by the Federal Housing Finance Board pursuant to
FIRREA, to enable it to pay interest and certain other expenses on bonds which
it issued to facilitate the resolution of failed savings associations. Pursuant
to the Federal Home Loan Bank Act, the Financing Corporation, with the approval
of the FDIC Board of Directors, establishes assessment rates based upon
estimates of (i) expected operating expenses, case resolution expenditures and
income of the Financing Corporation; (ii) the effect of assessments upon
members' earnings and capital; and (iii) any other factors deemed appropriate by
it. Additionally, the Financing Corporation is required to assess BIF-assessable
deposits at a rate one-fifth the rate applicable to SAIF-assessable deposits
until the first to

                                     - 34 -

<PAGE>



occur of the merger of the BIF and SAIF funds or January 1, 2000. Assessment
rates for the first semi-annual period of 1998 have been set at 1.256 basis
points annually for the first quarter and 1.211 basis points for the second
quarter for BIF-assessable deposits and 6.28 and 6.22 basis points annually,
respectively, for SAIF-assessable deposits.

Interstate Banking

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

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

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

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

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

      Bank holding companies whose home state is Utah are authorized to acquire
control of depository institutions and depository institution holding companies
located in other states. Colorado law authorizes an out-of-state bank holding
company, with the prior approval of the Division, to acquire a Colorado bank
holding company whose operations are principally conducted within the state

                                     - 35 -

<PAGE>



irrespective of the number of years the depository institution subsidiaries of
the Colorado bank holding company have been in operation provided that at the
time of acquisition the out-of-state bank holding company will not control more
than 25 percent of the aggregate deposits made in federally-insured banks,
savings and loan associations, federal savings banks, industrial banks, bank
holding companies, thrift holding companies and industrial bank holding
companies located in the state and certain other requirements are satisfied.

                                MONETARY POLICY

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

                 INFORMATION CONCERNING ZIONS BANCORPORATION

Selected Financial Data

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


                                     - 36 -

<PAGE>



ZIONS BANCORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA

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

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

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

AVERAGE BALANCE SHEET DATA
Money market investments                            $   1,490,77   $   923,670   $   945,842   $   869,709   $   788,694
Securities                                             2,575,295     1,977,875     1,665,500     1,545,704     1,209,165
Loan and leases, net                                   4,341,674     3,432,347     2,662,753     2,574,995     2,222,182
Total interest-earning assets                          8,407,741     6,333,892     5,274,095     4,990,408     4,220,041
Total assets                                           9,214,155     6,914,213     5,779,025     5,456,613     4,643,918
Interest-bearing deposits                              4,410,491     3,653,420     3,095,714     2,744,976     2,449,275
Total deposits                                         5,783,370     4,731,889     3,963,702     3,583,094     3,178,926
FHLB advances and other borrowings over one year         136,381        87,700        96,305       118,607       111,974
Long-term debt                                           257,779        55,187        57,506        59,493        75,623
Total interest-bearing liabilities                     7,067,324     5,208,318     4,397,582     4,197,865     3,556,746
Shareholders' equity                                     615,535       512,739       407,498       339,181       286,331

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


                                     - 37 -

<PAGE>



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

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

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

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

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

                                     - 38 -


<PAGE>



Stock Prices and Dividends on Zions Common Stock

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

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

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

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

1998
First Quarter............................  $ _____    $ _____       $ .12
Second Quarter (through April __, 1998)..    _____      _____        ____


      On December 19, 1997, the last NASDAQ-NMS trading day 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
________ shares of Zions Common Stock outstanding, held by approximately
____________ shareholders of record.

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

Principal Holders of Zions Common Stock

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

                                                            No. of       % of
Name and Address                    Type of Ownership       Shares       Class
- ----------------                    -----------------       ------       -----

Roy W. Simmons                      Record and Beneficial   2,279,815    3.30%
      One South Main                Beneficial(1)           1,991,376    2.88%
                                                            ---------    ----
      Salt Lake City, Utah  84111                           4,271,191    6.18%

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


                                     - 39 -


<PAGE>



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

(2)   These shares are owned of record as of February 27, 1998, by Zions First
      National Bank, a subsidiary of Zions, in its capacity as fiduciary for
      various trust and advisory accounts.  Of the shares shown, Zions First
      National Bank has sole voting power with respect to a total of 3,296,197
      shares (4.7% of the class) it holds as trustee for the Zions
      Bancorporation Employee Stock Savings Plan, the Zions Bancorporation
      Employee Investment Savings Plan, and the Zions Bancorporation Profit
      Sharing Plan.  Zions First National Bank also acts as trustee for the
      Zions Bancorporation Dividend Reinvestment Plan, which holds 1,007,804
      shares (1.4% of the class) and the Zions Bancorporation PAYSOP Plan, which
      holds 277,740 shares (.4% of the class) as to which Zions First National
      Bank does not have or share voting power.

      Set forth below is the beneficial ownership, as of February 27, 1998, of
Zions' common stock by each of Zions' directors, and all directors and officers
as a group.

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

Jerry C. Atkin                             9,800                   * (1)

Grant R. Caldwell                          7,000                   * (1)

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

Richard H. Madsen                        197,622                   * (1)

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

Robert G. Sarver(3)                      818,124                   1.18

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

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

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

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

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

- ----------
(1)   Immaterial percentage of ownership.

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

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


                                     - 40 -

<PAGE>



Zions Documents Incorporated By Reference

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

      1.    Zions' Annual Report on Form 10-K for the year ended December 31,
            1997 ("Zions Form 10-K");

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

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

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

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

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

                INFORMATION CONCERNING THE COMPANY AND THE BANK

General

      The Company was formed in _____________ 19__ and registered as a bank
holding company in _______________ 19__ under the Bank Holding Company Act. It
immediately acquired 100% ownership of the Bank and has operated as a one-bank
holding company since that time. Late in 1997 a new subsidiary was formed, SBT
Mortgage, LLC with the Company owning 50% and the other 50% being owned by an
unaffiliated outside party. The Company at this time has no investments other
than its 100% ownership of the Bank, in addition to its 50% interest in SBT
Mortgage. The Company is owned by approximately 20 individuals, the majority of
whom are in the Colorado Springs area.

The Bank

      State Bank and Trust of Colorado Springs was organized as a Federal
Reserve member, state chartered commercial bank in November 1984. Its original
focus was to serve the retail and consumer needs of the downtown Colorado
Springs market

                                     - 41 -

<PAGE>



with a secondary focus on providing for the banking needs of the commercial or
business market place. In April of 1988, new management and ownership became
involved, bringing new capital and a new philosophy. Citizens National Bank, a
small commercial bank located one block from the Bank, was closed by the FDIC at
or about that time and its deposits and consumer loans were purchased by the
Bank. This transaction created a commercial bank of approximately $22 million in
total assets. The philosophy of the Bank then changed, fairly dramatically, to
one of a wholesale or commercial bank, concentrating primarily on small
businesses. That market has proven to be successful for the Bank with growth of
approximately 21% annually in total assets over the last five years, leading to
a year-end total asset figure of approximately $87 million for 1997.
Profitability has also been strong with average return on assets from the last
five years, being approximately 1.8% and return on equity in excess of 30%.

      While the Bank continues to concentrate primarily on its small business
market, it has begun to expand its product line to include some consumer and
retail products and services, which are felt to be necessary to continue the
rate of growth experienced over the last five years. The Bank is regulated by
its federal regulator, the Federal Reserve, and its state regulator, the
Colorado State Banking Board. Its deposits are also insured by the FDIC.

Lending

      The Bank follows a uniform credit policy with its loans, which sets forth
underwriting and loan administration criteria, including levels of loan
commitments, loan types, credit criteria, concentration limits, loan limits,
loan administration, loan review and grading, and related matters. The Bank
monitors asset quality, utilizing internal and external loan review programs.
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. Pricing is further subject to
competitive pressures, money market rates, availability of funds, and government
regulation.

      Loan growth, averaging over 25% for the last five years, has been very
strong in the Bank. Due to the Bank's primary market of small business,
commercial real estate is the dominant type of loan that is made by the bank.
Historically, the loan portfolio of the Bank has been comprised of approximately
70% real estate oriented loans with 20% being more traditional commercial loans
and 10% consumer or retail. The Bank has maintained a relatively conservative
loan to deposit ratio, only recently in 1997 exceeding 70%.

      Asset quality continues to be strong, with non-performing assets
representing 0.4% of total loans, as of year-end 1997 and less than that in the
three previous years. Loan losses have been insignificant over the last five
years, with the provision for loan losses increasing only to allow for the rapid
growth in the total amount of loans outstanding. The ratio of allowance for loan
losses to total loans outstanding has averaged approximately 1.35 over the last
five years. The ratio of the allowance for loan losses to non-performing assets
has averaged 700% over the same period.

      With the Bank's geographic expansion to the east side of Colorado Springs,
by virtue of its new branch, it is likely that the concentration in real estate
will be reduced significantly over the coming years due to more retail and
consumer activity. Aggressive competition in both the real estate and commercial
loan markets is also driving the Bank to encourage more retail borrowing, which
historically carries a more attractive price.



                                     - 42 -

<PAGE>



Loans

      The following tables sets forth the classification of loans of the Bank by
major category at the dates indicated.

                                                    December 31,
Loan Portfolio                                   1997        1996
                                                -------     -----
                                                  (In thousands)
Commercial and industrial                       $12,781     $10,883
Real Estate
   Construction mortgage                          7,037       4,746
   Commercial                                    30,356      22,174
Installment                                       3,402       1,637
                                                -------     -------
   Total loans                                   53,576      39,440
Less allowance for loan and lease losses            615         497
                                                -------     -------
   Net loans                                    $52,961     $38,943
                                                =======     =======

      The Bank's focus has been in the small business arena, which translates
into primarily commercial loans. The Bank has never been an active consumer or
retail lender; however, the loans shown in this category are typically a result
of accommodations to its commercial customers. The commercial loans are
primarily related to real estate and have the purchase of real estate as the
primary purpose for the loan. In addition, other commercial loans include
collateral such as accounts receivable, inventory, and other fixed assets.

      The real estate loan category consists primarily of improved real estate
loans; however, from time to time acquisition and development loans have been
granted by the Bank, which typically represents raw ground which is then
developed into finished lots and sold to builders. The Bank has historically not
been active in the origination of first mortgage loans for single family houses;
however, its 50% owned subsidiary, SBT Mortgage, which began operation in the
fourth quarter of 1997, is currently involved in first mortgages.

      Installment loans represent the smallest percentage in categories of
loans. These loans have included automobile purchases, second mortgages, credit
cards and other personal purposes. The Bank has not been active in granting
student loans. Although the Bank's loan portfolio is focused on loans to
commercial business, it has a great degree of diversification within that
business and industry category. Many different industries are represented in the
commercial loan portfolio with no heavy concentration in any one group. The vast
majority of real estate loans granted have been floating rate credits with
maturities of five years and paying on an amortization schedule of fifteen to
twenty years. Rates typically have been between 1-2% over prime and the
frequency of rate change has typically been annual.

      The Bank makes primarily commercial real estate and consumer loans to
businesses and individuals in Colorado, with the vast majority in El Paso
County.

Non-Performing Assets

      The following table sets forth information concerning the Bank's
non-performing assets as of the dates indicated.


                                     - 43 -


<PAGE>



<TABLE>
<CAPTION>
                                                                        December 31,
                                                                       ---------------
                                                                       1997       1996
                                                                       ----       ----
                                                                   (Dollars in thousands)
<S>                                                                  <C>         <C>   
Non-performing loans:
      Loans 90 days or more delinquent, still accruing               $    0      $    0

      Non-accrual loans                                                 306          45

      Trouble debt restructuring                                          0           0

           Total nonperforming loans                                    306          45

Other real estate owned                                                   0           0

Other assets acquired by foreclosure                                      0           0


Allowance for loan losses                                               615         497


Ratio of non-performing assets to total assets                         0.36%       0.06%

Ratio of non-performing loans to total loans                           0.57%       0.11%

Ratio of allowance for loan losses to total loans                      1.15%       1.26%


Ratio of allowance for loan losses to total non-performing loans        175%       1104%
</TABLE>


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

Non-Performing Loans

      Non-performing loans consist of loans 90 days or more delinquent and still
accruing interest, non-accrual loans and troubled debt restructurings. All loans
listed in this category, as of both dates listed, December 31, 1996 and December
31, 1997 are considered collectable or well secured and in the process of
collection.

      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 and timely collection of interest or principal, regardless
of the delinquency status of the 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 non-accrual status,
interest income is recognized only upon receipt and then only if in the judgment
of management, future collection of principal is probable. Loans 90 days or more
delinquent are changed to non-accrual status unless the loan is in the process
of collection and management determines that full collection of principal and
accrued interest is probable. Interest accruals are resumed on non-accrual loans
only when in the judgment of the Bank management the loans are estimated to be
fully collectable as to principle and interest.

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

      Additional interest income on non-accrual loans that would have been
recognized in 1996 and 1997 had the loans been current in accordance with their
original terms was not material.


                                     - 44 -


<PAGE>



Other Real Estate Owned

      Other real estate owned includes property acquired through foreclosure
proceedings or under deed in lieu of foreclosure arrangements with delinquent
borrowers. The Bank had no other real estate owned as of either reporting date.

Analysis of Allowance for Loan Losses

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

      The following table sets forth the historic relationship between the
Bank's loan charge-offs and recoveries and allowance for loan losses as of the
dates indicated.


<TABLE>
<CAPTION>
                                                                       Year Ended
                                                                      December 31,
                                                                    ----------------
                                                                    1997        1996
                                                                    ----        ----
                                                                  (Dollars in thousands)

<S>                                                              <C>         <C>     
Balance of allowance for loan loss at beginning of period        $    497    $    418

Charge-offs:

    Commercial and industrial                                           0           0
    Real Estate:
        Construction mortgage                                           3           0
        Commercial                                                      0           7
    Installment                                                         3           5
                                                                 --------    --------
           Total charge-offs                                            3          12

Recoveries:
    Commercial and industrial                                           0           0
    Real Estate:
        Construction mortgage                                           0           0
        Commercial                                                      1           1
    Installment                                                         0           0
                                                                 --------    --------
           Total recoveries                                             1           1

Net (charge-offs) recoveries                                            2          11
Provision for loan losses charged to operations                       120          90
                                                                 --------    --------
Balance of allowance for loan losses at end of period            $    615    $    497
                                                                 ========    ========


Ratio of net charge-offs (recoveries) to average loans             0.0045%     0.0319%
Average loans outstanding during this period                       44,861      34,476
</TABLE>



                                     - 45 -
<PAGE>

Investment Securities

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


<TABLE>
<CAPTION>
                                               December 31, 1997           December 31, 1996
                                              -------------------          -----------------
                                             Amortized      Market        Amortized      Market
                                               Cost         Value            Cost        Value
                                               ----         -----            ----        -----
                                                             (In thousands)
<S>                                            <C>         <C>             <C>          <C>    
Securities held to maturity:

     US Treasury                               $    0      $    0          $     0      $     0

     US Agencies                                  717         825              511          514

     Mortgage backed                            2,447       2,497            1,737        1,760

     States and political subdivisions          4,488       4,565            4,264        4,313
     Other                                        321         321              117          118
                                               ------      ------          -------      -------

Total securities held to maturity              $7,973      $8,208          $ 6,629      $ 6,705
                                               ======      ======          =======      =======

Securities available for sale:

     US Treasury                               $  748      $  750          $ 4,048      $ 4,062

     US Agencies                                6,719       6,715           14,069       14,053

     Mortgage backed                            1,395       1,396              709          714

     States and political subdivisions              0           0              100          100

     Other                                          0           0              231          231
                                               ------      ------          -------      -------

Total securities available for sale            $8,862      $8,861          $19,157      $19,160
                                               ======      ======          =======      =======
</TABLE>


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

<S>                                              <C>        <C>        <C>         <C>          <C>          <C>        
Securities held to maturity:                                                                (Dollars in thousands)

     U.S. Treasury                               $    -     0.00%      $    -      0.00%        $    -       0.00%      
     U.S. government agencies                         -     0.00%           -      0.00%           506       7.64%      
     Mortgage backed securities                       -     0.00%          39      8.66%            54       8.32%      
     State and political subdivisions               756     4.40%       2,586      4.80%           695       4.83%      
Other securities                                    321     5.00%           -      0.00%             -       0.00%      
                                                 ------     -----      ------      -----        ------       -----      
     Total                                       $1,077     4.88%      $2,625      4.85%        $1,255       6.11%      
                                                 ======     =====      ======      =====        ======       =====      
Securities available for sale:
     U.S. Treasury                               $  500     6.37%      $  248      5.79%        $    -       0.00%      
     U.S. government agencies                     2,114     5.70%       3,591      6.51%           534       6.40%      
     Mortgage backed securities                       -     0.00%           -      0.00%             -       0.00%      
     State and political subdivisions                 -     0.00%           -      0.00%             -       0.00%      
                                                 ------     -----      ------      -----        ------       -----      
     Total                                       $2,614     5.82%      $3,839      6.46%        $  534       6.40%      
                                                 ======     =====      ======      =====        ======       =====      
</TABLE>


<TABLE>
<CAPTION>
                                                  Due After
                                                  Ten Years                Total
                                                  ---------                -----

                                                 Amount     Yield      Amount      Yield
                                                 ------     -----      ------      -----

<S>                                             <C>         <C>        <C>          <C>  
Securities held to maturity:                  

     U.S. Treasury                              $    -      0.00%      $    -       0.00%
     U.S. government agencies                      211      8.00%         717       7.74%
     Mortgage backed securities                  2,354      7.73%       2,447       7.76%
     State and political subdivisions              451      5.05%       4,488       4.77%
Other securities                                     -      0.00%         321       6.00%
                                                ------      -----      ------       -----
     Total                                      $3,016      7.35%      $7,973       5.98%
                                                ======      =====      ======       =====
Securities available for sale:
     U.S. Treasury                              $    -      0.00%      $  748       6.15%
     U.S. government agencies                      480      7.18%       6,719       6.29%
     Mortgage backed securities                  1,395      6.62%       1,395       6.62%
     State and political subdivisions                -      0.00%           -       0.00%
                                                ------      -----      ------       -----
     Total                                      $1,875      6.77%      $8,862       6.32%
                                                ======      =====      ======       =====
</TABLE>

                                     - 46 -

<PAGE>



Investment Portfolio

      The Banks' philosophy as to its investment portfolio has been quite
conservative with only direct US Treasury issues, US Agency and general
obligation bonds of municipalities being purchased for the portfolio. Revenue
bonds of state and city municipalities have also been purchased in the past,
however, in small amounts and infrequently. The primary objective of the
investment portfolio is to provide secondary liquidity for the Bank with
secondary objectives being maximizing a return on the invested capital as well
as providing capital needed for pledging purposes. Safety of principal is
paramount and therefore very little credit risk has ever been accepted. Interest
rate risk is also considered critical to the management of the portfolio with a
target range always maintained for the weighted average risk duration of not
less than two years and not greater than five years. Investments are not
actively traded; however, some gains and losses have been experienced in the
portfolio when either bonds are sold for liquidity purposes or opportunities are
perceived to increase yield at no significant additional risk. No credit loss
has been experienced by the Bank in the bond portfolio since 1988.

Deposits

      The Bank's deposit base reflects its strong bias towards commercial
business. The very high percentage of non-interest bearing demand deposits, when
compared to industry standards is due largely to small business checking
accounts. While non-interest-bearing demand deposits have historically averaged
between 30-35% at the Bank, its peer group is more typically less than 15%. The
Bank also maintains a very high percentage of money market deposit accounts in
relation to its peer group, again due to large accounts maintained by its
business customers. Due to its ability to attract the type of deposits mentioned
above, the Bank's reliance on large time deposits has been negligible. The
structure of the Bank's deposit base has greatly enhanced profitability through
reducing its cost of funds and increasing net interest margin. The Bank relies
on public monies infrequently and only in times of tight liquidity due to
seasonal deposit fluctuations. No broker deposits have ever been purchased by
the Bank.

      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>
                                              December 31, 1997             December 31, 1996
                                              -----------------             -----------------
                                             Average     Weighted         Average       Weighted
                                             Balance     Avg. Rate        Balance      Avg. Rate
                                             -------     ---------        -------      ---------
                                                                           (Dollars in thousands)
<S>                                            <C>            <C>           <C>             <C>  
New and money market accounts                  $32,827        3.05%         $26,834         2.99%
Savings                                          2,392        2.73%           2,523         2.90%
Time certificates under $100,000                 3,379        5.00%           3,235         4.98%
Time certificates over $100,000                  3,370        5.10%           2,367         5.12%
                                               -------        ----          -------         ---- 
Total interest bearing deposits                $41,968        3.37%         $34,959         3.27%
Non-interest bearing demand deposits            25,059        0.00%          20,058         0.00%
                                               -------        ----          -------         ---- 
Total deposits                                 $67,027        2.11%         $55,017         2.06%
                                               =======        ====          =======         ==== 
</TABLE>


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


                                     - 47 -

<PAGE>


                                  December 31, 1997    December 31, 1996
                                  -----------------    -----------------
                                               (In thousands)
Under 3 months                          $  609               $  662
3 to 6 months                            2,345                1,272
6 to 12 months                             489                    -
Over 12 months                             112                  946
                                        ------               ------
    Total                               $3,555               $2,880
                                        ======               ======

Return on Company Equity and Assets

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

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

Return on assets(1)                        1.71%             1.88%
Return on equity(2)                       33.11%            35.17%
Equity to assets ratio(3)                  5.15%             5.33%
Dividend payout ratio(4)                     --                --

- ------------------------------------------------------------------------------
(1)  Net income divided by average total assets

(2)  Net income divided by average stockholder's equity

(3)  Average total equity divided by average total assets

(4)  Dividends paid per share divided by net income per share; no dividends were
     paid in the indicated periods.

Property

      The Bank has operated in its main office at 111 South Tejon, in Colorado
Springs since its inception in 1984. The facility is leased and approximates
10,000 square feet. Space is in an office building known as Plaza of the
Rockies, which is an eight story, class A, office building, which was completed
just prior to the Bank's opening in 1984. The building is located on the corner
of Colorado Avenue and Tejon Street in the downtown business district of
Colorado Springs and is one of the highest traffic corners in the downtown
market.

      In 1988 the Bank leased land one block east of its main facility at 111
South Nevada Avenue to build a drive up banking facility. This facility is
approximately 3,000 square feet and has five drive up lanes, as well as a walk
up window and an ATM. The lease on the main facility was amended in 1996 and
extended for twelve years expiring in 2008. The drive up facilities lease
expires in the year 2000; however, two five-year options are available,
extending the ultimate maturity of the lease to the year 2010.

      In January 1998, the Bank opened its first branch at the corner of Powers
Avenue and Palmer Park, on the east side of Colorado Springs. This facility is
new construction, totals 6,000 square feet including the basement, and is owned
by the Bank. It also has four drive up lanes, including a drive up ATM. The
branch is operated as a full service branch, offering all products and services
currently offered at the main facility.


                                     - 48 -


<PAGE>



Competition

      The Bank is currently the largest locally owned commercial bank in El Paso
County. Primary competition is provided by out of state, super regional banks,
such as Norwest, Key Bank, Bank One and US Bancorp. In addition, there are five
smaller independent banks remaining in the market as well as a large number of
credit unions. Ent Federal Credit Union is the largest of the local credit
unions and is a federally chartered occupational based credit union which has
grown to total assets of over $1 billion at the end of 1997.

      Primary competition to the Bank comes also from various non-bank entities,
such as The Money Store, due to the wholesale banking client being sought.
Deposit competition comes also from a multitude of financial service firms
including brokers, insurance companies, mutual funds, and others.

      The Bank's success in generating the growth it has enjoyed has been
primarily the result of identifying its market niche and maintaining that focus
while utilizing its customer base as a referral source.

Legal Proceedings

      No legal proceedings exist at this time with either Company or the Bank,
with the exception of two relatively small collection actions, which involve
loans of less than $100,000. No losses are anticipated from these actions.

Employees

      The Bank currently employs 46 people in all three locations. Structurally
these represent nine officers, four supervisors and 33 employees. No formal
training is provided due to the relatively small size of the organization and
therefore experienced people are generally hired to fill vacancies. Senior
Officers are all well experienced, with four senior lenders each having over
twenty years of experience as well as the two senior operations officers who
have over 25 years of banking experience a piece. None of the employees are
covered by a collective bargaining agreement and management of the Bank and the
Company believes that their relationships with their employees is good.

Regulatory Matters

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

      The Bank is a banking corporation organized under the laws of the state of
Colorado. The Bank is a member of the Federal Reserve System and its deposits
are insured by the FDIC, up to a maximum of $100,000 per account. The Bank is
subject to regulation, supervision, and regular examination by the Federal
Reserve as well as the Colorado State Banking Board 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 management of the Company's discussion and analysis of financial condition
and results of operations, which are included in this Proxy
Statement/Prospectus. The following financial information presented for the
1997, 1996, 1995, 1994 and 1993 periods is unaudited. Such information has not
been audited because it would be impractical to do so.


                                     - 49 -

<PAGE>



SBT BANKSHARES, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
- --------------------------------------------------------------------------------
(Dollars in thousands, except per share and ratio data)

<TABLE>
<CAPTION>
                                                                         As of and for the Year Ended December 31,
                                                            ----------------------------------------------------------------

                                                            1997             1996           1995         1994           1993*
                                                            ----             ----           ----         ----           ----

<S>                                                       <C>              <C>            <C>            <C>            <C>    
Earnings Summary
Net interest income                                       $ 4,484          $ 3,657        $ 2,913        $ 2,339        $ 1,601
Provisions for loan losses                                    120               90             60             24             94
Non-interest income                                           667              479            410            431            726
Non-interest expense                                        3,136            2,439          2,060          1,945          1,572
Income taxes                                                  606              454            354            239            251
Net income                                                  1,289            1,153            849            562            598

Common Stock Data
Earnings per common share                                  $16.40           $13.63         $ 9.16         $ 5.94         $ 4.67
Dividends paid per share                                       --               --             --             --             --
Book value per share at period
  End                                                       63.86            46.19          32.91          20.40          20.09
Weighted average common Shares
  outstanding during the period                                XX               XX             XX             XX             XX

Average Balance Sheet Data
Securities                                                $20,865          $17,044        $14,741        $14,901        $ 9,450
Loans and leases, net                                      44,305           34,027         25,458         20,526         16,289
Total interest-earning assets                              67,179           55,711         42,637         38,205         29,477
Total assets                                               75,603           61,477         47,019         42,613         32,485
Interest-bearing deposits                                  41,968           34,959         26,989         25,369         19,688
Total deposits                                             67,027           55,017         41,203         38,213         28,193
Long-term debt                                                 --               --             --             --             --
Shareholders' equity                                        3,893            3,278          2,445          2,316          2,022

End of Period Balance Sheet Data
Securities                                                $16,836          $25,790        $14,268        $17,502        $13,728
Loans and leases, net                                      52,973           38,943         28,347         22,507         19,444
Allowance for loan losses                                     615              497            418            315            254
Total assets                                               86,177           74,772         52,209         47,267         37,138
Total deposits                                             77,974           66,983         46,080         42,617         30,747
Long-term debt                                                 --               --             --             --             --
Shareholders' equity                                        4,811            3,898          3,051          2,647          2,321

Non-performing assets:
  Non-accrual loans and loans past
    due 90 days or more                                   $   306          $    45         $   16         $   31         $  115
  Other real estate owned                                      --               --              9             29            208
Total non-performing assets                                   306               45             25             60            323


Selected Ratios
Net interest margin                                          6.67%            6.56%          6.82%          6.12%          5.43%
Return on average assets                                     1.71%            1.88%          1.81%          1.32%          1.87%
Return on average equity                                    33.11%           35.17%         34.72%         24.31%         29.53%
Ratio of ending equity to ending
  assets                                                     5.58%            5.21%          5.84%          1.33%          6.25%
Ratio of nonperforming assets to
  total assets                                               0.36%            0.06%          0.05%          0.13%          0.87%
Ratio of allowance for loan losses
  to loans and leases                                        1.18%            1.29%          1.47%          1.40%          1.31%
  outstanding at period end
Ratio of allowance for loan losses
  to nonperforming loans                                      201%           1,104%         1,672%           525%            79%
</TABLE>

- ----------
* 1993 is Bank only; Company was formed in 1994.

                                     - 50 -

<PAGE>



Stock Prices and Dividends on Company Common Stock

      No established trading market for the Company's Common Stock exists. Over
the years, little trading in the Common Stock has occurred. Reliable information
concerning the prices at which the Company's Common Stock has traded in private,
negotiated transactions is not publicly available or generally known to the
Company. On occasion, the Company has become aware of the trading price of its
stock 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 the market price for the Company's Common Stock during any
particular period. Since December 19, 1997, the date the Plan of Reorganization
was publicly announced, there have been no trades in the Company's Common Stock.

      The Company has never paid cash dividends on its Common Stock.

      As of April __, 1998, there were 25 holders of record of the Company's
Common Stock.

Certain Transactions of the Company

      John G. Jackson, Chairman, President and Chief Executive Officer of the
Company and the Bank will serve as an executive officer of Consolidated
Association pursuant to an employment agreement to be executed at Closing. See
"Plan of Reorganization--Interests of Certain Persons in the Transaction" for
information concerning the employment agreement, a covenant not to compete and
other matters relating to Mr. Jackson and the transaction.

      The Bank has had banking transactions in the ordinary course of its
business with directors, officers, principal shareholders and their associates
on the same terms, including interest rates and collateral on loans, as those
prevailing at the same time for comparable transactions with unaffiliated
parties. To the extent that such transactions consisted of extensions of credit,
they did not, in the opinion of management, involve more than a normal risk of
collectibility or present other unfavorable features. As of December 31, 1997,
the Company's directors, executive officers, employees and their affiliates were
indebted to the Bank in the aggregate amount of $266,000, none of which such
loans were delinquent.

Stockholdings of Directors, Officers and Certain Others

      On April __, 1998, there were 78,592 shares of Company Common Stock
outstanding held of record by shareholders. Only shareholders of record as of
____________, 1998, will be entitled to vote at the Special Meeting and each
share is entitled to one vote. As of April __, 1998, the Company's Directors
owned approximately _____% of the outstanding shares of Company Common Stock.
Each director has agreed to vote his or her shares in favor of the Plan of
Reorganization and the Reorganization.

      The following table sets forth as of April __, 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 common stock,
(ii) by each current director of the Company, (iii) by each executive officer 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 of the persons
named below, to the Company's knowledge, has sole voting and investment power
over the shares stated as beneficially owned.(1)





                                     - 51 -

<PAGE>



Name and Title (and address of 5%           Number of Shares  Percent of Company
- ---------------------------------           ----------------  ------------------
Beneficial Owners)                                               Common Stock
- ------------------                                               ------------

Thomas E. Berg, Director..................        1,500                    1.19%
Buck Blessing, Director...................        1,000                    1.27%
Leonard L. Buresh
    1202 E. High Point Lane
    Colorado Springs, CO  80904...........        7,300                    9.29%
Robert A. Cadigan, Executive Officer
    27 Tanglewood Drive
    Colorado Springs, CO  80906...........       12,685                   16.14%
Craig D. Engelage
    2225 Yankton Place
    Colorado Springs, CO  80919...........        5,325                    6.78%
Hal Hollister
    5420 Fiesta Lane
    Colorado Springs, CO  80918...........        5,000                    6.36%
John G. Jackson, Chairman, President
  and Chief Executive Officer
    315 W. Cheyenne Road
    Colorado Springs, CO  80906...........       12,050                   15.33%
James Kalhorn(2)
    5820 Old Ranch Road
    Colorado Springs, CI  80908...........        5,789                    7.37%
Randy R. Kilgore, Director................        2,686                    3.42%
Gary L. Markle, Director..................        3,000                    3.82%
Scott E. Pursley, Director
    250 Chatham Drive
    Colorado Springs, CO  80806...........        6,417                    8.16%
All directors and officers as a group
(7 persons)................................      39,338                   50.05%

- ----------
(1)   Beneficial ownership includes shares over which the indicated beneficial
      owner (alone or, in the case of shares held jointly with his or her
      spouse, together with his or her spouse) has the right to exercise voting
      and/or investment powers.

(2)   James Kalhorn is the custodian for Ashton J. Kalhorn and Simone N.
      Kalhorn.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS
             OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
                             SBT BANKSHARES, INC.

      The following analysis of the Company's financial condition and the
results of operations for the years ended December 31, 1997, 1996, and 1995
should be read in conjunction with the unaudited Consolidated Financial
Statements of the Company and notes thereto, and information presented elsewhere
herein. Average balance sheet data is 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 Company has two operating
units. The primary operation is the Bank; however, SBT Mortgage, LLC that is
owned 50% by Company is also included in the consolidated statements. The
differences between the Company's financial condition and results of operation
and those of the Bank have historically consisted solely of the short-term notes
payable of the Company.


                                     - 52 -

<PAGE>



Net Interest Income

      For most financial institutions the primary component of earnings is 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
result 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 earning
liabilities. During the fiscal years ended December 31, 1997, 1996, and 1995,
average interest earning assets were $67.2 million, $55.7 million and $32.6
million respectively. During the same periods, net interest margin was 6.7%,
6.56%, and 6.83% respectively.

      The following table sets forth for the periods indicated 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.



                                     - 53 -


<PAGE>


<TABLE>
<CAPTION>
                                                              December 31, 1997                      December 31, 1996          
                                                       --------------------------------      -------------------------------    
                                                                                                  (Dollars in thousands)
                                                       Average                  Average      Average                 Average    
                                                       Balance     Interest      Rate        Balance     Interest     Rate      
                                                       -------     --------      ----        -------     --------     ----      
<S>                                                    <C>         <C>           <C>          <C>         <C>         <C>       
INTEREST-EARNING ASSETS
Securities - Taxable...............................    $16,390     $1,068        6.52%        $12,810     $  797      6.22%     
Securities - Nontaxable............................      4,191        200        4.77%          4,005        192      4.79%     
Federal Funds Sold.................................      2,009        112        5.57%          4,658        249      5.35%     
Other investments..................................        284         20        7.04%            229         22      9.61%     
Loans..............................................     44,861      4,745       10.58%         34,476      3,727     10.81%     
Less allowance for loan losses.....................       (556)                                  (449)                          
Less unrealized loss on securities
  available for sale...............................          0                                    (18)                          
                                                       -------     ------       ------        -------     ------     ------     
Total interest-earning assets......................     67,179      6,145        9.15%         55,711      4,987      8.95%     

Noninterest earning assets.........................      8,425                                  5,748                           
Total Assets.......................................     75,603      6,145        8.13%         61,477      4,987      8.11%     

LIABILITIES
Interest-bearing DDA...............................     11,391        181        1.59%         10,803        189      1.75%     
MMDA...............................................     21,436        821        3.82%         16,031        599      3.74%     
Savings............................................      2,392         65        2.72%          2,523         73      2.89%     
Time Deposits $100,000 & over......................      3,370        178        5.28%          2,367        119      5.02%     
Other time deposits................................      3,379        171        5,06%          3,235        162      5.01%     
                                                       -------      -----       -----         -------      -----     -----      
Total Interest-bearing deposits....................     41,968      1,416        3.37%         34,959      1,142      3.27%     

Notes Payable......................................        941         80        8.50%          1,153         98       8.5%     
Other Borrowings...................................      3,314        165        4.98%          1,879         90      4.79%     

Total interest-bearing liabilities.................     46,223      1,661        3.59%         37,991      1,330       3.5%     

Non-interest bearing DDA...........................     25,059          0           0%         20,058          0         0%     
                                                       -------     ------       ------        -------     ------     -----      
Total Deposits and Interest-Bearing Liabilities....    $71,282     $1,661        2.33%        $58,249     $1,330      2.28%     
Net Interest Income................................                 4,484                                  3,657                
Interest Rate Spread...............................                              5.56%                                5.45%     
Net Interest Rate Margin ..........................                              6.67%                                6.56%     
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                                                               December 31, 1995
                                                         ----------------------------------
                                                          Average                   Average
                                                          Balance     Interest       Rate
                                                          -------     --------       ----
<S>                                                       <C>         <C>            <C>  
INTEREST-EARNING ASSETS
Securities - Taxable...............................       $11,727     $  746         6.31%
Securities - Nontaxable............................         2,806        133         4.74%
Federal Funds Sold.................................         2,520        149         5.91%
Other investments..................................           208         13         6.25%
Loans..............................................        25,803      2,900        11.23%
Less allowance for loan losses.....................          (345)
Less unrealized loss on securities
  available for sale...............................           (82)
                                                          --------    ------        ------
Total interest-earning assets......................        42,637      3,935         9.23%

Noninterest earning assets.........................         4,264
Total Assets.......................................        46,901      3,935         8.39%

LIABILITIES
Interest-bearing DDA...............................         9,418        177         1.88%
MMDA...............................................        11,055        371         3.36%
Savings............................................         2,312         66         2.85%
Time Deposits $100,000 & over......................         1,412         77         5.45%
Other time deposits................................         2,748        119         4.33%
                                                          --------     -----        ------

Total Interest-bearing deposits....................        26,945        810         3.01%

Notes Payable......................................         1,270        112         8.82%
Other Borrowings...................................         1,878        100         5.32%

Total interest-bearing liabilities.................        30,093      1,022         3.40%

Non-interest bearing DDA...........................        14,214          0            0%
                                                          --------    ------        ------

Total Deposits and Interest-Bearing Liabilities....       $44,307     $1,022         2.31%
Net Interest Income................................                    2,913
Interest Rate Spread...............................                                  5.83%
Net Interest Rate Margin ..........................                                  6.83%
</TABLE>

                                     - 54 -


<PAGE>



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


<TABLE>
<CAPTION>
                                                              December 31,                                   December 31,
                                                             1997 over 1996                                 1996 over 1995
                                                             --------------                                 --------------
                                                                                (Dollars in thousands)
                                                      Due to        Due to                        Due to         Due to
                                                      Volume         Rate           Total         Volume          Rate         Total
                                                      ------         ----           -----         ------          ----         -----
<S>                                                   <C>             <C>         <C>            <C>              <C>         <C>   
Interest-earning assets
Securities- Taxable...........................        $  233          $38         $  271         $   67           $ 10        $   57
Securities-Nontaxable.........................             9            1              8             57              2            59
Federal Funds Sold............................           146            9            137            114             14           100
Other investments.............................             6            8              2              2              7             9
Loans.........................................         1,113           95          1,018            938            111           827
                                                      ------          ---         ------         ------           ----        ------

Total interest income.........................         1,215           57          1,158          1,178            126         1,052

Interest-bearing liabilities
Interest-bearing DDA..........................             9           17              8             24             12            12
MMDA..........................................           209           13            222            186             42           228
Savings accounts..............................             4            4              8              6              1             7
Time deposits $100,000 and over...............            53            6             59             48              6            42
Other time deposits...........................             7            2              9             24             19            43
                                                      ------          ---         ------         ------           ----        ------
Total deposit interest expenses...............           274            0            274            288             44           332

Notes payable.................................            18            0             18             10              4            14
Other borrowings..............................            72            3             75              0             10            10
Total interest-bearing liability expense......           328            3            331            278             30           308
                                                      ------          ---         ------         ------           ----        ------

Net interest income...........................        $  887          $60         $  827         $  900           $156        $  744
</TABLE>


                                      - 55-

<PAGE>



Results of Operations

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

      Overview. Net interest income increased $827,000 in 1997 over 1996; this
followed an increase in 1996 of $744,000 over 1995. Interest income grew at an
annual rate of 23% in 1997 versus a 27% increase experienced in 1996. Over the
same period, interest expense increased at 25% for 1997 and 30% in 1996.
Non-interest income continued to grow in 1997, at the rate of 39%, compared to a
17% increase the previous year. Non-interest expenses grew somewhat less in
1997, at 29% following an 18% increase the previous year. Income tax expense for
the three-year period totaled $606,000 in 1997, $454,000 in 1996 and $354,000 in
1995. The respective percentages of income before tax were 32%, 28%, and 29%.
The resulting return on average assets and return on average equity after all of
the above factors were considered, were 1.71%, and 33.11% for 1997, 1.88 and
35.17% for 1996, and 1.81% and 34.72% for 1995.

Interest and Fee Income

      Interest income increased from $4,987,000 in 1996 to $6,145,000 in 1997 or
an increase of $1,158,000 or 23%. Interest income increased $1,052,000 between
1995 and 1996, which represented a 27% increase. Interest income on loans made
up the vast majority of the growth in interest income in 1997 with a 27%
increase representing $1,018,000. In 1996 the growth rate was somewhat smaller
at 22% or $827,000. Interest income on securities, fed funds sold, and other
investments increased in 1997 by 11% from $1,260,000 in 1996 to $1,400,000 in
1997. In 1996 interest income increased $219,000 or 21% over interest income in
1995. The increase in interest income from loans was primarily the result of
larger volume. Interest rates remain relatively stable during 1997 and most of
1996. The same was true for securities, in that the vast majority of the
increase in income was the result of volume. Interest income from fed funds and
other overnight investments declined as a percent of this category due to a
smaller volume within their group.

Interest Expense

      Interest expense in 1997 increased by $331,000 over 1996, which had grown
$308,000 over 1995. The respective percentage increases over these two periods
were 25% and 30% growth rates. Interest expense on deposits were again the large
majority of the growth, with $275,000 of the increase in 1997 and $330,000 in
1996 represented by deposits. The difference between the increase in interest
paid on deposits and the overall increase in interest expense represents
additional interest paid on borrowed funds. The majority of this interest
expense was due to higher volume in the repurchase agreement category. Also
included in the category is the interest expense on notes payable, which
actually declined in 1997 by $18,000 due to a smaller debt level.

Net Interest Income

      Net interest income increased $827,000 in 1997 versus an increase in 1996
of $744,000. The increase in 1997 represented a 23% move versus a 25% move
between 1995 and 1996. The increase in both years reflects generally the
increasing volume of earning assets, primarily represented by loans. Average
loans outstanding increased by $10,278,000 or 30% in 1997 versus $8,569,000 or
34% in 1996. Securities grew also 22% in 1997 and 16% in 1996; however, such
growth was from a much smaller base and did not impact the net interest income
nearly as significantly as the growth in loans. Both interest rate spread and
net interest margin increased in 1997 over 1996 with 1997 showing a spread of
5.56% versus a 5.45% spread in 1996 and a 5.83% spread in 1995. Net interest
margin or the net interest income divided by average interest earning assets,
also increased in 1997 to 6.67% versus a 6.56% in 1996 and a 6.83% in 1995. The
higher spread and margin rates for 1995 are reflective of an overall lower cost

                                     - 56 -

<PAGE>



of deposits than has been experienced since that time and also a slightly higher
average rate of return on interest-earning assets. Understanding the differences
brought about by the change in asset and deposit mix as well as interest rates
over the last three years, it is still apparent that the majority of increase in
dollars of net interest income are the result of growth in the asset and more
particularly the loan category.

Non-Interest Income

      Non-interest income increased by 39% in 1997 from $479,000 in 1996 to
$667,000; this follows a 17% increase in 1996 over 1995. The largest factor in
the increase in 1997 was an increase in fees received from the sale of
non-deposit products, including investments and account receivable financing. In
addition, $36,000 was recognized in 1997 as income from a gain on the sale of
investment securities.

Non-Interest Expense

      Non-interest expense grew somewhat more slowly than non-interest income in
1997, showing a growth of $697,000 or 29% growth over 1996 figures of $379,000
which represented 18% growth over 1995. The largest factors affecting the growth
in 1997 was a $223,000 increase in personnel expense, a $101,000 increase in
occupancy and fixed asset expense, and a $307,000 increase in the
miscellaneous/other expense category which includes telephone, data processing,
supplies and various other miscellaneous expenses. Much of the increase in this
category can be attributed to a new telephone system and a new computer network
within the Bank as well as construction expenses recognized during the
construction phase of the Bank's first branch, which subsequently opened in
January 1998. Over 60% of the increase in non-interest expenses between 1995 and
1996 was the result of increased personnel cost, primarily, the result of
additional personnel and increased benefit cost.

Allowance for Loan Losses

      The Bank's allowance for loan losses in 1997 was $120,000, 33% higher than
in 1996, when it was $90,000; the allowance in 1995 was $60,000. These increases
have been reflective of a rapidly increasing loan portfolio as opposed to
deterioration in the loan quality. The amounts contributed through the provision
to the reserve for loan loss show up in the year end reserves which totaled
$615,000 at the end of 1997, a $118,000 increase over the $497,000 figure at the
end of 1996. The reserve totaled $418,000 at the end of 1995. The funds held in
the reserve for loan loss reflect a more than adequate coverage for
non-performing loans, ranging from 1,672% coverage at the end of 1995 to over
200% coverage at the end of 1997.

Income Taxes

      Income taxes totaled $606,000 in 1997, representing 32% of income before
taxes. In 1996 the total was $454,000 or 28% and $354,000 or 29% in 1995. The
principal reason for the increased percentage of income being paid in taxes is
the result of a reduction in the percentage of municipal securities which the
Bank held in its investment portfolio.

Liquidity and Sources of Funds

      The Company's primary sources of funds are customer deposits, sales and
maturities of investment securities, loan repayments and an increase on
borrowings of notes payable. These funds are used to make loans, to acquire
investment securities and other assets, to fund fixed asset purchases, and fund
other operations of the Company. During 1997 deposits increased by $10,991,000,
reflecting an annual growth rate of 16%. Growth rate of deposits was 45% in
calendar year 1996, growing from $46,080,000 at the end of 1995 to $66,983,000

                                     - 57 -

<PAGE>



at the end of 1996. Increases in both years were the result of several factors,
including a strong local and national economy, the addition of senior managers
from other local institutions who were successful at retaining their clients,
and the level of acceptance in the market of the Bank's small business
orientation. Notes payable increased between year-end 1995 and 1996 by $25,000
but then decreased by $675,000 by year end 1997.

      Management anticipates that the Company will continue to rely primarily on
customer deposits, sale of investment securities, loan payoffs, as well as
earnings to provide liquidity that will in turn be used to extend new loans and
to invest in other securities. The Company's strong history of a high percentage
of core deposits has consistently provided a strong source of liquidity and is
anticipated to continue. Brokered funds have never been utilized for liquidity
purposes and their use is not anticipated. Short-term liquidity needs have been
met through the purchase of fed funds, Federal Home Loan Bank borrowings or
Federal Reserve window debt. Periods of borrowing have been infrequent and
typically seasonal in nature, primarily in the first quarter of the year.

Capital Resources

      The Company's total stockholders equity increased to $4,811,000 as of the
end of 1997 from $3,898,000 at the end of 1996, for an increase of $913,000 or
23%. An increase of 28% was realized in 1996 when capital increased by $847,000
over year-end 1995. The capital increases in both time periods were the result
of the earnings of the Bank less debt service of the Company. The ratio of
ending equity to ending total assets of the Company was 5.58% in 1997 versus
5.21% in 1996. Dividends have never been paid to stockholders of the Company.

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


Tier 1 Capital                                  $ 5,452,000
Total Capital                                   $ 6,067,000
Risk Weighted Assets                            $59,986,000
Tier 1 Capital to Risk-Weighted Assets                  9.1%
Total Capital to Risk-Weighted Assets                  10.1%
Leverage Ratio                                          6.3%


Effects of Inflation and Changing Prices

      The primary effect of inflation on the Company's operation would be the
effect it has on operating costs as well as the potential for increasing
interest rates. Increasing inflation has historically increased interest rates,
which in previous high interest rate environments has resulted in higher margins
for the Company. Light to moderate inflation would be likely to result in
increased earnings for the Bank while extreme inflation and the impact it has on
operating costs would be less beneficial to operations. An indirect result of
inflation could be faster growth of assets in the bank and a larger demand put
on capital.

New Accounting Principles

      No significant change is currently anticipated in accounting principles
which would have any material impact on financial statements of either the
Company or the Bank.


                                     - 58 -

<PAGE>



                   COMPARISON OF THE RIGHTS OF SHAREHOLDERS
                           OF ZIONS AND THE COMPANY

General

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

      General. Zions' Articles have authorized Zions to issue a total of
103,000,000 shares of capital stock, divided into two classes: 100,000,000
shares of common stock, without par value ("Zions Common Stock"), and 3,000,000
shares of preferred stock, without par value. Zions' Board of Directors has
proposed that Zions shareholders consider and vote on a proposal at the Zions
annual meeting of shareholders to be held on April 24, 1998 to amend Zions'
Articles to increase the number of authorized shares of Zions Common Stock from
100,000,000 to 200,000,000. The Company's Articles of Incorporation have
authorized the Company to issue 200,000 shares of Common Stock, with par value
of $5.00 per share ("Company Common Stock"). Each holder of Company Common Stock
is entitled to one vote for each share held on all matters submitted to the
shareholders for a vote. Holders of a majority of the voting power of the
Company constitute a quorum for the transaction of business. Each holder of
Zions Common Stock is generally entitled to one vote for each share held of
record on all matters submitted to a shareholder vote, and holders of a majority
of the outstanding shares of Zions Common Stock constitute a quorum for the
transaction of business.

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

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.


                                     - 59 -

<PAGE>



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

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

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

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

      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 contain a similar special shareholder voting
provision whereby the affirmative vote of 80 percent of all votes entitled to be
cast shall be required to approve and authorize the following acts of the
Company: (1) amendment of the Articles of Incorporation; (2) a merger or
consolidation of the Company; (3) the sale, lease, exchange or other transfer of
all, or substantially all, of the property and assets of the Company; and (4)
the voluntary or involuntary liquidation, dissolution or winding up of or
revocation of any such proceedings relating to the Company.


                                     - 60 -


<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 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 contain a similar director liability provision. The
Company's Articles further provide that personal liability of a director of the
Company shall be eliminated to the greatest extent possible under the law.


                                     - 61 -


<PAGE>



      The Company's Bylaws provide that the Company may indemnify a director or
officer against expenses incurred in any proceeding to which he may be a party
by reason of his being or having been a director or officer of the Company,
except as limited or prohibited by Section 18 of the Federal Deposit Insurance
Act.

      By resolutions dated , 199 , the boards of directors of the Company and
the Bank, respectively, provided that the Company and the Bank, to the fullest
extent permitted by applicable law, shall indemnify its respective then current
officers and directors against all loss and expense which any of such persons
may suffer or incur by reason of any action or omission by such person acting in
the capacity of an officer or director of the Company or the Bank, respectively.
The resolutions provide that the obligations arising from such respective
resolutions are contractual in nature and that such obligations may not be
altered, revoked, rescinded, or terminated without the consent of such officer
or director.

      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 provide for a similar classified Board of
Directors, whereby the Board of Directors is divided into three classes, as
nearly equal in number as possible. One class of directors is elected at each
annual meeting of shareholders, and each class serves for a term of three years,
so that the term of office of one class of directors shall expire in each year.
The number of directors which constitute the Company's full Board of Directors
may be not less than five nor more than ten. Vacancies on the Company's Board of
Directors, including vacancies resulting from any increase in the authorized
number of directors or any vacancies in the Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office or other
cause, shall be filled by a majority vote of the remaining directors, though
less than a quorum. A director elected by the Board to fill a vacancy serves for
a term expiring at the next annual meeting of shareholders, at which time a
successor director shall 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.

      The Company's Articles provide that the shareholders may remove directors
at a meeting called for the express purpose of removing directors, by an 80%
vote of the outstanding shares entitled to vote at an election of directors,
only for cause.

                                     - 62 -


<PAGE>



Special Shareholders' Meetings

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

      The Company's Bylaws permit special meetings to be called at any time by
the President or by the Board of Directors and shall be called by the President
or Secretary upon the request of the holders of not less than 51 percent of the
outstanding shares entitled to vote on the subject matter for which the meeting
is called.

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 provide that the Articles may be amended by the
affirmative vote of 80% of all votes entitled to be cast on the matter. The
Company's Bylaws may be amended by the affirmative vote of a majority of a
quorum of the members of the Board of Directors at any regular or special
meeting.

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.

      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;(ii) consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares 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 sentence of the previous paragraph. See "Plan of Reorganization--
Rights of Dissenting Shareholders" for a more detailed discussion of dissenters'
rights under Colorado law.


                                     - 63 -

<PAGE>



Preemptive Rights

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

      The Company's Articles provide that holders of Company Common Stock have
the preemptive right to acquire on a proportionate basis additional shares of
Company Common Stock or rights, privileges, warrants or options to purchase
Company Common Stock, or for securities or obligations of any kind convertible
into Company Common Stock, now or hereafter authorized.

Preferred Stock

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

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

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

      The Company's Articles authorize the Company to issue up to 200,000 shares
of preferred stock upon such terms as the Board of Directors may authorize. The
authorized shares of preferred stock are issuable in one or more series on the
terms set by the Board of Directors of the Company. The Board of Directors may
determine the designations, preferences, limitations and relative rights of the
preferred stock and any series thereof. No shares of preferred stock are issued
and outstanding.

Dividend Rights

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

      Colorado law generally allows a corporation to make distributions to its
shareholders in cash, property or its own shares. However, no distribution may
be made if, after giving it effect: (i) the corporation would not be able to pay
its debts as they become due in the usual course of business; or (ii) except as

                                     - 64 -


<PAGE>



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. Neither the Company's Articles nor Bylaws 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 to Company Common Stock. Holders
of fully paid shares of Zions Common Stock and Company Common Stock are not
subject to any liability for further calls or assessments.

                                LEGAL OPINIONS

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

                                    EXPERTS

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

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

                                 OTHER MATTERS

      In addition to solicitation by mail, directors, officers and employees of
the Company may solicit Proxies from the shareholders of the Company in person
or by telephone or otherwise for no additional compensation.   The Company will

                                     - 65 -

<PAGE>



pay all expenses in connection with the printing and solicitation of Proxies for
the Special Meeting.  Zions will pay for all costs attributable to registering
the Zions Common Stock under applicable federal and state law.  See "Plan of
Reorganization--Expenses."

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

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


                                          By Order of the Board of Directors



April __, 1998                            --------------------------------------
                                          John G. Jackson, President
                                          SBT Bankshares, Inc.


                                     - 66 -


<PAGE>



                           SBT FINANCIAL STATEMENTS


      The following financial statements have not been audited; to audit such
statements would be impractical.




                                     - 67 -


<PAGE>



                              SBT Bankshares, Inc.
                           Consolidated Balance Sheet

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

                                                            1997             1996           1995         1994           1993*
                                                            ----             ----           ----         ----           ----
                                                                                       (In thousands)
<S>                                                       <C>              <C>            <C>           <C>            <C>    
Assets

   Cash and due from banks                                $ 9,071          $ 5,854        $ 3,365       $ 3,117        $ 1,913
   Fed funds sold                                           4,600            2,500          4,800         2,600          1,000
   Investment Securities
     Held to maturity                                       7,664            6,634          4,704         4,899          5,211
     Available for sale                                     9,172           19,157          9,564        12,603          8,517
   Loans                                                   53,834           39,634         28,969        23,020         19,909
     Less:
     Unearned income & fees                                   246              194            204           198            211
     Allowance for loan losses                                615              497            418           315            254
                                                          -------          -------        -------       -------        -------
   Net loans                                               52,973           38,943         28,347        22,507         19,444

   Premises and equipment                                   1,720              897            903           901            501
   Other real estate owned                                      0                0              9            29            208
   Other assets                                               977              787            517           611            344
                                                          -------          -------        -------       -------        -------

   Total assets                                           $86,177          $74,772        $52,209       $47,267        $37,138
                                                          =======          =======        =======       ========       =======

Liabilities and stockholder's equity

   Deposits:
     Noninterest-bearing                                  $34,356          $24,658        $18,677       $14,389        $ 8,166
     Interest-bearing
        Savings & money market                             36,668           36,083         23,011        25,000         19,471
        Time:
          Under $100,000                                    3,400            3,361          3,166         2,315          2,607
          Over $100,000                                     3,550            2,881          1,226           913            503
                                                          -------          -------        -------       --------       -------
   Total deposits                                          77,974           66,983         46,080        42,617         30,747

   Security repurchase agreements                           2,474            2,590          1,219         1,062          3,752
   Accrued liabilities                                        418              126            209           104            318
   FHLB advances                                                0                0            500             0              0
   Notes payable                                              500            1,175          1,150         1,200              0
   Shareholder's equity:
     Common stock                                           1,312            1,252          1,274         1,136          1,566
     Retained  earnings                                     3,484            2,644          1,766         1,374            772
   Unrealized gains (losses)                                   15                2             11          (226)           (17)
                                                          -------          -------        -------        -------         ------

   Total equity                                             4,811            3,898          3,051         2,284          2,321

   Total liabilities and equity                           $86,177          $74,772        $52,209       $47,267        $37,138
                                                          =======          =======        =======       ========       =======
</TABLE>

*1993 is Bank only, Holding Company formed in 1994.


                                     - 68 -

<PAGE>


                              SBT Bankshares, Inc.
                        Consolidated Statement of Income


<TABLE>
<CAPTION>
                                                                                      December 31,

                                                            1997             1996           1995         1994           1993*
                                                            ----             ----           ----         ----           ----
                                                                                       (In thousands)
<S>                                                        <C>              <C>           <C>            <C>            <C>   
Interest Income:
   Interest and fees on loans                              $4,745           $3,727        $2,900         $2,133         $1,603
   Interest on over night funds                               112              257           154            113             97
   Interest on securities                                   1,288            1,003           881            821            474
                                                           ------           ------        -------        -------        ------
     Total interest income                                  6,145            4,987         3,935          3,067          2,174

Interest expense:
   Interest on savings and transaction                      1,067              861           615            524            392
   Interest on time deposits                                  349              281           196            113            120
   Interest on borrowed funds                                 245              189           211             91             45
                                                           ------           ------        -------        -------        ------
     Total interest expense                                 1,661            1,330         1,022            728            557
                                                           ------           ------        -------        -------        ------
        Net interest income                                 4,484            3,657         2,913          2,339          1,617

Provision for loan losses                                     120               90            60             24            (94)
                                                           ------           ------        -------        -------       --------
   Net interest income after provision                      4,364            3,567         2,853          2,315          1,711

Non-interest income:
   Service charges on deposits                                225              233           223            213            231
   Other service charges and fees                             264               89            66             54             43
   Investment securities gain (loss), net                      60               24            (4)          (110)           (19)
   Other income                                               118              133           125            165            455
                                                           ------           ------        -------        -------        ------
     Total non-interest income                                667              479           410            322            710

Non-interest expense:
   Salaries and benefits                                    1,372            1,149           919            761            673
   Occupancy, net                                             400              337           312            281            245
   Furniture and equipment                                    190              152           110            129            113
   OREO Expense                                                 0                1             2              1             14
   Legal and professional                                     114               42            74             77             62
   Supplies                                                    43               62            54             45             44
   Postage                                                     38               35            30             25             23
   Advertising                                                 27               21             3              8             23
   FDIC Premiums                                                7                2            47             72             60
   Other expenses                                             945              638           509            436            312
                                                           ------           ------        -------        -------        ------
     Total non-interest expense                             3,136            2,439         2,060          1,837          1,569

Income before taxes                                         1,895            1,607         1,203            800            850
Income taxes                                                  606              454           354            238            252
                                                           ------           ------        -------        -------        ------
   Net income                                              $1,289           $1,153        $  849         $  562         $  598
                                                           ======           ======        =======        =======        ======
</TABLE>


                                     - 69 -

<PAGE>


                                   APPENDIX A

                             McKenna & Cuneo, L.L.P
                                Attorneys at Law
                            444 South Flower Street
                           Los Angeles, CA 90071-2901
                        213-688-1000 o Fax: 213-243-6330



                                 April 22, 1998



SBT Bankshares, Inc.
111 S. Telon
P. O. Box 2077
Colorado Springs, CO  80901

Ladies and Gentlemen:

        We have served as counsel for SBT Bankshares, Inc., a Colorado
corporation (the "Company") in connection with the Agreement and Plan of
Reorganization dated as of December 19, 1997 (the "Agreement and Plan") among
the Company, its wholly-owned subsidiary State Bank and Trust of Colorado
Springs, a Colorado banking corporation (the "Bank"), Zions Bancorporation, a
Utah corporation ("Zions"), Val Cor Bancorporation, Inc., a Colorado corporation
("Val Cor"), and Valley National Bank of Cortez ("Valley"), and the transactions
contemplated thereby which are more particularly described in the Company's
Proxy Statement/Prospectus to which this letter is attached as an appendix (the
"Proxy Statement"). Unless specifically defined herein, each capitalized term
used herein shall have the meaning given it in the Agreement and Plan.

        1.     Documents Examined

        For the purpose of rendering this opinion, we have examined copies of
the following documents:

               (a)     The Agreement and Plan;

               (b)     The Proxy Statement; and

               (c) The Agreement of Merger between the Company and Valcor and
        the Agreement of Consolidation between the Bank and Valley (collectively
        the "Merger Documents"), together with the attachments thereto, all in
        the form attached to the Agreement and Plan.

                                     - 70 -


<PAGE>


SBT Bankshares, Inc.
April 22, 1998
Page 2


        We have also examined sections 7-113-101 et seq. of the Colorado
Business Corporation Act, applicable provisions of the Internal Revenue Code of
1986, as amended, (the "Code"), Treasury Regulations thereunder, Internal
Revenue Service rulings and judicial decisions now in effect as we have deemed
necessary for the purpose of rendering the opinions set forth herein.

        2.     Assumptions and Limitations

        In our examination, we have assumed, without independent verification,
(i) the genuineness of all signatures on all documents and instruments examined
by us; (ii) the legal capacity of all natural persons who have signed such
documents and instruments; (iii) the authenticity of all documents submitted to
us as originals and the conformity with originals of all documents submitted to
us as conformed, certified or photostatic copies; (iv) the factual accuracy of
all certificates submitted to us and each of the representations and warranties
as to matters of fact made in the Agreement and Plan by each of the parties
thereto; (v) that there are no other agreements or understandings among the
parties to the Agreement and Plan, written or oral, and there is no usage of
trade or course of prior dealing among the parties thereto that would, in any
case, define, supplement, alter or qualify the terms of Agreement and Plan; and
(vi) the due filing of the Merger Documents with state agencies in accordance
with applicable state law.

        The opinions set forth below summarize the federal income tax
consequences of the Merger under existing law and regulations, as presently
interpreted by judicial decision and administrative rulings, all of which are
subject to change without notice, and any such change might be retroactively
applied to the Merger. The opinion does not address state income tax
consequences, local taxes, estate taxes, gift taxes, or the federal or state
income tax considerations that may affect the treatment of a foreign shareholder
or a shareholder who acquired his or her Company Common Stock pursuant to an
employee stock option or other special circumstances.

        3.     Opinions

        On the basis of the foregoing, and in reliance thereon, we are of the
opinion that the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of section 368(a) of the Code, and further
that:

        (a) The Company will not recognize gain or loss for federal income tax
purposes upon the Merger;

        (b) No gain or loss will be recognized by a shareholder of the Company
upon the receipt of Zions Common Stock solely in exchange for his or her Company
Common Stock;

                                     - 71 -


<PAGE>


SBT Bankshares, Inc.
April 22, 1998
Page 3


        (c) The aggregate basis of the Zions Common Stock received by a
shareholder of the Company pursuant to the Merger (including any fractional
share interest to which that shareholder would otherwise be entitled) will be
the same as the aggregate basis of the Company Common Stock exchanged therefor;

        (d) The holding period of the Zions Common Stock received by a
shareholder of the Company pursuant to the Merger (including any fractional
share interest to which that shareholder would otherwise be entitled) will
include the holding period of the Company Common Stock exchanged therefor,
provided the Company Common Stock is held as a capital asset by the shareholder
on the Effective Date;

        (e) Cash received by a shareholder of the Company in lieu of a
fractional share of Zions Common Stock will be treated as received in exchange
for that fractional share, and the shareholder will recognize gain or loss equal
to the difference between the cash received and the shareholder's basis in that
fractional share, which 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

        (f) Cash received by a shareholder of the 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.

        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 "Federal
Income Tax Consequences of the Reorganization" in the Proxy Statement/Prospectus
forming a part of the Registration Statement.


                                             Very truly yours,

                                             /s/ McKENNA & CUNEO, L.L.P.

                                             McKENNA & CUNEO, L.L.P.

DML/mi


                                     - 72 -

<PAGE>


                                  APPENDIX B

                       COLORADO BUSINESS CORPORATION ACT
                          Rights of Dissenting Owners


      7-113-101  DEFINITIONS.--For purposes of this article:

      1. "Beneficial shareholder" means the beneficial owner of shares held in a
voting trust or by a nominee as the record shareholder.

      2. "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring domestic or foreign
corporation, by merger or share exchange of that issuer.

      3. "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 7-113-102 and who exercises that right at the
time and in the manner required by part 2 of this article.

      4. "Fair value", with respect to a dissenter's shares, means the value of
the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action except to the extent that exclusion would
be inequitable.

      5. "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at the legal rate as
specified in section 5-12-101, C.R.S.

      6. "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
that are registered in the name of a nominee to the extent such owner is
recognized by the corporation as the shareholder as provided in section
7-107-204.

      7.    "Shareholder" means either a record shareholder or a beneficial
shareholder.

      7-113-102 RIGHT TO DISSENT.--1. A shareholder, whether or not entitled to
vote, is entitled to dissent and obtain payment of the fair value of the
shareholder's shares in the event of any of the following corporate actions:

      (a) Consummation of a plan of merger to which the corporation is a party
if:

      (I) Approval by the shareholders of that corporation is required for the
merger by section 7-111-103 or 7-111-104 or by the articles of incorporation; or

      (II) The corporation is a subsidiary that is merged with its parent
corporation under section 7-111-104;

      (b) Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired;

      (c) Consummation of a sale, lease, exchange, or other disposition of all,
or substantially all, of the property of the corporation for which a shareholder
vote is required under section 7-112-102(1); and

      (d) Consummation of a sale, lease, exchange, or other disposition of all,
or substantially all, of the property of an entity controlled by the corporation
if the shareholders of the corporation were entitled to vote upon the consent of
the corporation to the disposition pursuant to section 7-112-102(2).


                                       B-1

<PAGE>



      1.3. A shareholder is not entitled to dissent and obtain payment, under
subsection (1) of this section, of the fair value of the shares of any class or
series of shares which either were listed on a national securities exchange
registered under the federal "Securities Exchange Act of 1934", as amended or on
the national market system of the National Association of Securities Dealers
Automated Quotation System, or were held of record by more than two thousand
shareholders, at the time of:

      (a) The record date fixed under section 7-107-107 to determine the
shareholders entitled to receive notice of the shareholders' meeting at which
the corporate action is submitted to a vote;

      (b) The record date fixed under section 7-107-104 to determine
shareholders entitled to sign writings consenting to the corporate action; or

      (c) The effective date of the corporate action if the corporate action is
authorized other than by a vote of shareholders.

      1.8. The limitation set forth in subsection (1.3) of this section shall
not apply if the shareholder will receive for the shareholder's shares, pursuant
to the corporate action, anything except:

      (a) Shares of the corporation surviving the consummation of the plan of
merger or share exchange;

      (b) Shares of any other corporation which at the effective date of the
plan of merger or share exchange either will be listed on a national securities
exchange registered under the federal "Securities Exchange Act of 1934", as
amended, or on the national market system of the National Association of
Securities Dealers Automated Quotation System, or will be held of record by more
than two thousand shareholders;

      (c) Cash in lieu of fractional shares; or

      (d) Any combination of the foregoing described shares or cash in lieu of
fractional shares.

      2.

      2.5. A shareholder, whether or not entitled to vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's shares in the
event of a reverse split that reduces the number of shares owned by the
shareholder to a fraction of a share or to scrip if the fractional share or
scrip so created is to be acquired for cash or the scrip is to be voided under
section 7-106-104.

      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.



                                       B-2

<PAGE>



      2. A beneficial shareholder may assert dissenters' rights as to the shares
held on the beneficial shareholder's behalf only if:

      (a) The beneficial shareholder causes the corporation to receive the
record shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and

      (b) The beneficial shareholder dissents with respect to all shares
beneficially owned by the beneficial shareholder.

      3. The corporation may require that, when a record shareholder dissents
with respect to the shares held by any one or more beneficial shareholders, each
such beneficial shareholder must certify to the corporation that the beneficial
shareholder and the record shareholder or record shareholders of all shares
owned beneficially by the beneficial shareholder have asserted, or will timely
assert, dissenters' rights as to all such shares as to which there is no
limitation on the ability to exercise dissenters' rights. Any such requirement
shall be stated in the dissenters' notice given pursuant to section 7-113-203.

      7-113-201 NOTICE OF DISSENTERS' RIGHTS.--1. If a proposed corporate action
creating dissenters' rights under section 7-113-102 is submitted to a vote at a
shareholders' meeting, the notice of the meeting shall be given to all
shareholders, whether or not entitled to vote. The notice shall state that
shareholders are or may be entitled to assert dissenters' rights under this
article and shall be accompanied by a copy of this article and the materials, if
any, that, under articles 101 to 117 of this title, are required to be given to
shareholders entitled to vote on the proposed action at the meeting. Failure to
give notice as provided by this subsection (1) shall not affect any action taken
at the shareholders' meeting for which the notice was to have been given, but
any shareholder who was entitled to dissent but who was not given such notice
shall not be precluded from demanding payment for the shareholder's shares under
this article by reason of the shareholder's failure to comply with the
provisions of section 7-113-202(1).

      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:


                                     B-3

<PAGE>



      (a) Cause the corporation to receive, before the vote is taken, written
notice of the shareholder's intention to demand payment for the shareholder's
shares if the proposed corporate action is effectuated; and

      (b) Not vote the shares in favor of the proposed corporate action.

      2. If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant to
section 7-107-104 and if notice of dissenters' rights has been given to such
shareholder in connection with the action pursuant to section 7-113-201(2) a
shareholder who wishes to assert dissenters' rights shall not execute a writing
consenting to the proposed corporate action.

      3. A shareholder who does not satisfy the requirements of subsection (1)
or (2) of this section is not entitled to demand payment for the shareholder's
shares under this article.

      7-113-203 DISSENTERS' NOTICE.--1. If a proposed corporate action creating
dissenters' rights under section 7-113-102 is authorized, the corporation shall
give a written dissenters' notice to all shareholders who are entitled to demand
payment for their shares under this article.

      2. The dissenters' notice required by subsection (1) of this section shall
be given no later than ten days after the effective date of the corporate action
creating dissenters' rights under section 7-113-102 and shall:

      (a) State that the corporate action was authorized and state the effective
date or proposed effective date of the corporate action;

      (b) State an address at which the corporation will receive payment demands
and the address of a place where certificates for certificated shares must be
deposited;

      (c) Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;

      (d) Supply a form for demanding payment, which form shall request a
dissenter to state an address to which payment is to be made;

      (e) Set the date by which the corporation must receive the payment demand
and certificates for certificated shares, which date shall not be less than
thirty days after the date the notice required by subsection (1) of this section
is given;

      (f)  State the requirement contemplated in section 7-113-103(3), if such
requirement is imposed; and

      (g)  Be accompanied by a copy of this article.

      7-113-204 PROCEDURE TO DEMAND PAYMENT.--1. A shareholder who is given a
dissenters' notice pursuant to section 7-113-203 and who wishes to assert
dissenters' rights shall, in accordance with the terms of the dissenters'
notice:

      (a) Cause the corporation to receive a payment demand, which may be the
payment demand form contemplated in section 7-113-203(2)(d), duly completed, or
may be stated in another writing; and

      (b)  Deposit the shareholder's certificates for certificated shares.

      2. A shareholder who demands payment in accordance with subsection (1) of
this section retains all rights of a shareholder, except the right to transfer
the shares, until the effective date of the proposed corporate action giving
rise to the shareholder's exercise of dissenters' rights and has only the right
to receive payment for the shares after the effective date of such corporate
action.


                                     B-4

<PAGE>



      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;

      (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.



                                     B-5

<PAGE>



      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) 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.


                                     B-6

<PAGE>



      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, including the reasonable compensation and expenses of appraisers
appointed by the court. The court shall assess the costs against the
corporation; except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the court finds
the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding
payment under section 7-113-209.

      2. The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:

      (a) Against the corporation and in favor of any dissenters if the court
finds the corporation did not substantially comply with the requirements of part
2 of this article; or

      (b) Against either the corporation or one of more dissenters, in favor of
any other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this article.

      3. If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to said counsel reasonable fees to be paid out of the amounts awarded to
the dissenters who were benefitted.


                                       B-7

<PAGE>



                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.  Indemnification of Directors and Officers

      Utah law provides for indemnification of directors and officers as
follows:

16-10a-902  AUTHORITY TO INDEMNIFY DIRECTORS.

    (1) Except as provided in Subsection (4), a corporation may indemnify an
individual made a party to a proceeding because he is or was a director, against
liability incurred in the proceeding if:

      (a) his conduct was in good faith; and

      (b) he reasonably believed that his conduct was in, or not opposed to, the
corporation's best interests; and

      (c) in the case of any criminal proceeding, he had no reasonable cause to
    believe his conduct was unlawful.

    (2) A director's conduct with respect to any employee benefit plan for a
purpose he reasonably believed to be in or not opposed to the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of Subsection (1)(b).

    (3) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this section.

    (4) A corporation may not indemnify a director under this section:

      (a) in connection with a proceeding by or in the right of the corporation
    in which the director was adjudged liable to the corporation; or

      (b) in connection with any other proceeding charging that the director
    derived an improper personal benefit, whether or not involving action in his
    official capacity, in which proceeding he was adjudged liable on the basis
    that he derived an improper personal benefit.

    (5) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.

16-10a-903  MANDATORY INDEMNIFICATION OF DIRECTORS.

    Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was successful, on the merits or otherwise, in the
defense of any proceeding, or in the defense of any claim, issue, or matter in
the proceeding, to which he was a party because he is or was a director of the
corporation, against reasonable expenses incurred by him in connection with the
proceeding or claim with respect to which he has been successful.


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;



                                     II-1

<PAGE>



    (2) the corporation may indemnify and advance expenses to an officer,
employee, fiduciary, or agent of the corporation to the same extent as to a
director; and

    (3) a corporation may also indemnify and advance expenses to an officer,
employee, fiduciary, or agent who is not a director to a greater extent, if not
inconsistent with public policy, and if provided for by its articles of
incorporation, bylaws, general or specific action of its board of directors, or
contract.

16-10a-908  INSURANCE.

    A corporation may purchase and maintain liability insurance on behalf of a
person who is or was a director, officer, employee, fiduciary, or agent of the
corporation, or who, while serving as a director, officer, employee, fiduciary,
or agent of the corporation, is or was serving at the request of the corporation
as a director, officer, partner, trustee, employee, fiduciary, or agent of
another foreign or domestic corporation or other person, or of an employee
benefit plan, against liability asserted against or incurred by him in that
capacity or arising from his status as a director, officer, employee, fiduciary,
or agent, whether or not the corporation would have power to indemnify him
against the same liability under Sections 16-10a-902, 16-10a-903, or 16-10a-907.
Insurance may be procured from any insurance company designated by the board of
directors, whether the insurance company is formed under the laws of this state
or any other jurisdiction of the United States or elsewhere, including any
insurance company in which the corporation has an equity or any other interest
through stock ownership or otherwise.

16-10a-909 LIMITATIONS OF INDEMNIFICATION OF DIRECTORS.

    (1) A provision treating a corporation's indemnification of, or advance for
expenses to, directors that is contained in its articles of incorporation or
bylaws, in a resolution of its shareholders or board of directors, or in a
contract (except an insurance policy) or otherwise, is valid only if and to the
extent the provision is not inconsistent with this part. If the articles of
incorporation limit indemnification or advance of expenses, indemnification and
advance of expenses are valid only to the extent not inconsistent with the
articles of incorporation.

    (2) This part does not limit a corporation's power to pay or reimburse
expenses incurred by a director in connection with the director's appearance as
a witness in a proceeding at a time when the director has not been made a named
defendant or respondent to the proceeding.


                                     II-2

<PAGE>



Item 21.  Exhibits and Financial Statement Schedules.

     (a) Exhibits. An Exhibit Index, containing a list of all exhibits filed
with this Registration Statement, is included beginning on page II-7.

     (b) Financial Statement Schedules. Not applicable.

     (c) Report, Opinion or Appraisal. Not applicable.

Item 22.  Undertakings.

     The undersigned registrant hereby undertakes as follows:

     (1) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

     (2) to deliver or cause to be delivered with the prospectus, to each person
to whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim financial
information.

     (3) that prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.

     (4) that every prospectus (i) that is filed pursuant to paragraph (3)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act of 1933, as amended, and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

     (5) that insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 20
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


                                     II-3

<PAGE>


the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

     (6) to respond to requests for information that is incorporated by
reference into the Proxy Statement/Prospectus pursuant to Items 4, 10(b), 11 or
13 of Form S-4, within one business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
Effective Date of the registration statement through the date of responding to
the request.

     (7) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.


                                     II-4

<PAGE>



                                  SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Salt Lake City, Utah, on the 20th day
of April, 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    April 20   , 1998
- -----------------------                                      -----------
Harris H. Simmons              Officer and Director


/s/ Dale M. Gibbons            Executive Vice President      April 20   , 1998
- -----------------------                                      -----------
Dale M. Gibbons                Chief Financial Officer


/s/ Walter E. Kelly            Controller                    April 20   , 1998
- -----------------------                                      -----------
Walter E. Kelly


/s/ Roy W. Simmons             Chairman and Director         April 20   , 1998
- -----------------------                                      -----------
Roy W. Simmons


                               Director                                 , 1998
- -----------------------                                      -----------
Jerry C. Atkin


/s/ R.D. Cash                  Director                      April 20   , 1998
- -----------------------                                      -----------
R. D. Cash


                                      II-5

<PAGE>



/s/ L.E. Simmons               Director                      April 20   , 1998
- ------------------------                                     -----------
L. E. Simmons


/s/ Grant R. Caldwell          Director                      April 20   , 1998
- ------------------------                                     -----------
Grant R. Caldwell


/s/ I.J. Wagner                Director                      April 20   , 1998
- ------------------------                                     -----------
I. J. Wagner


/s/ Roger B. Porter            Director                      April 20   , 1998
- ------------------------                                     -----------
Roger B. Porter


/s/ Richard H. Madsen          Director                      April 20   , 1998
- ------------------------                                     -----------
Richard H. Madsen


/s/ Robert G. Sarver           Director                      April 20   , 1998
- ------------------------                                     -----------
Robert G. Sarver


                                      II-6

<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 December 19, 1997 among Zions
             Bancorporation, Val Cor Bancorporation, Inc.,
             Valley National Bank of Cortez, SBT Bankshares,
             Inc. and State Bank and Trust of Colorado
             Springs (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 Registra tion Statement, File No.
             33-51145, filed on Novem ber 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
             Registra tion 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)

5            Opinion of Duane, Morris & Heckscher LLP                  *
             regarding the legality of the shares of Common
             Stock being registered (filed herewith)

8            Form of opinion of McKenna & Cuneo, L.L.P.                *
             regarding tax matters (filed herewith as
             Appendix A to the Proxy Statement/Prospectus)

10.1         Amended and Restated Zions Bancorporation                 *
             Pension Plan (incorporated by reference to
             Exhibit 10.1 of Zions Bancorporation's Annual
             Report on Form 10-K for the year ended December
             31, 1994, File No. 0-2610)


                            II-7

<PAGE>



10.2         Amendment to Zions Bancorporation Pension Plan            *
             effective December 1, 1994 (incorporated by
             reference to Exhibit 10.2 of Zions
             Bancorporation's Annual Report on Form 10-K for
             the year ended December 31, 1994, File No.
             0-2610)

10.3         Zions Utah Bancorporation Supplemental                    *
             Retirement Plan Form (incorporated by reference
             to Exhibit 19.4 of Zions Utah Bancorporation's
             Quarterly Report on Form 10-Q for the quarter
             ended September 30, 1985, File No. 0-2610)

10.4         Zions Utah Bancorporation Key Employee                    *
             Incentive Stock Option Plan approved by the
             shareholders of the Company on April 28, 1982
             (incorporated by reference to Exhibit 10.1 of
             Zions Bancorporation's Quarterly Report on Form
             10-Q for the quarter ended June 30, 1995, File
             No. 0-2610)

10.5         Amendment No. 1 to Zions Bancorporation Key               *
             Employee Incentive Stock Option Plan approved
             by the shareholders of the Company on April 27,
             1990 (incorporated by reference to Exhibit 10.2
             of Zions Bancorporation's Quarterly Report on
             Form 10-Q for the quarter ended June 30, 1995,
             File No. 0-2610)

10.6         Amendment No. 2 to Zions Bancorporation Key               *
             Employee Incentive Stock Option Plan approved
             by the shareholders of the Company of April 28,
             1995 (incorporated by reference to Exhibit 10.3
             of Zions Bancorporation's Quarterly Report on
             Form 10-Q for the quarter ended June 30, 1995,
             File No. 0-2610)

10.7         Zions Bancorporation Deferred Compensation Plan           *
             for Directors, as amended May 1, 1991
             (incorporated by reference to Exhibit 19 of
             Zions Bancorporation's Annual Report on Form
             10-K for the year ended December 31, 1991, File
             No. 0-2610)

10.8         Zions Bancorporation Senior Management Value              *
             Sharing Plan, Award Period 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)


                            II-8

<PAGE>



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 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 Advisory Agreement between The First              *
             National Bank in Alamosa and Ralph H. Outcalt
             (incorporated by reference to Exhibit 10.18 to
             the Registrant's Form S-4 Registration
             Statement, File No. 333-41821, filed on
             December 10, 1997)

10.19        Form of Advisory Agreement between The First              *
             National Bank in Alamosa and Donald J. Wuckert
             (incorporated by reference to Exhibit 10.19 to
             the Registrant's Form S-4 Registration
             Statement, File No. 333-41821, filed on
             December 10, 1997)

10.20        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)

10.21        Form of Employment Agreement between Bank                 *
             Colorado, National Association and James A.
             Simon (filed as Exhibit VI to the Agreement and
             Plan of Reorganization, incorporated by
             reference as Exhibit 2.1 above)



                            II-9

<PAGE>



10.22        Form of Trademark Assignment and                          *
             Non-Competition Agreement between Bank
             Colorado, National Association and Timothy S.
             Borden (filed as Exhibit VII to the Agreement
             and Plan of Reorganization, incorporated by
             reference as Exhibit 2.1 above)

10.23        Form of Non-Competition Agreement between Bank            *
             Colorado, National Association and John R.
             Adams (filed as Exhibit VIII to the Agreement
             and Plan of Reorganization, incorporated by
             reference as Exhibit 2.1 above)

10.24        Form of Employment Agreement between                      *
             Consolidated Association and John G. Jackson
             (filed as Exhibit VII to the Agreement and Plan
             of Reorganization, incorporated by reference as
             Exhibit 2.1 above)

21           List of subsidiaries of Zions Bancorporation              *
             (incorporated by reference to Exhibit 21 of
             Zions Bancorporation's Annual Report on Form
             10-K for the year ended December 31, 1997, File
             No. 0-2610)

23.1         Consent of KPMG Peat Marwick LLP, independent             *
             certified public accountants for Zions
             Bancorporation (filed herewith)

23.2         Consent of Duane, Morris & Heckscher LLP                  *
             (contained in their opinion filed as Exhibit 5)

23.3         Consent of Arthur Andersen LLP, independent               *
             certified public accountants for Sumitomo Bank
             of California (filed herewith)

23.4         Consent of McKenna & Cuneo, L.L.P. (contained             *
             in their opinion filed as Appendix A)

24.1         Power of Attorney (set forth on Page II-5 of              *
             the Registration Statement)

99.1         Preliminary copy of letter to shareholders of             *
             SBT Bankshares, Inc. (filed herewith)

99.2         Preliminary copy of Notice of Special Meeting             *
             of Shareholders of SBT Bankshares, Inc.(filed
             herewith)

99.3         Preliminary copy of form of proxy for use by              *
             shareholders of SBT Bankshares, Inc. (filed
             herewith)

99.4         Form of Voting Agreement between Zions                    *
             Bancorporation and various shareholders of SBT
             Bankshares, Inc.(filed herewith as part of
             Agreement and Plan of Reorganization, filed as
             Exhibit 2.1)


* incorporated by reference

                                      II-10



                                                                     EXHIBIT 2.1

                      AGREEMENT AND PLAN OF REORGANIZATION


        THIS AGREEMENT AND PLAN OF REORGANIZATION made as of the nineteenth day
of December, 1997, among ZIONS BANCORPORATION ("Zions Bancorp"), a Utah
corporation having its principal office in Salt Lake City, Utah, VAL COR
BANCORPORATION, INC. ("Val Cor"), a Colorado corporation having its principal
office in Cortez, Colorado, VALLEY NATIONAL BANK OF CORTEZ ("Valley"), a
national banking association organized under the laws of the United States, SBT
BANKSHARES, INC. (the "Company"), a Colorado corporation having its principal
office in Colorado Springs, Colorado, and STATE BANK AND TRUST OF COLORADO
SPRINGS (the "Bank"), a banking corporation organized under the laws of the
State of Colorado

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

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

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

        WHEREAS, Val Cor is a bank holding company which owns in excess of 99
percent of the outstanding capital stock of Valley as of the date of this
Agreement;

        WHEREAS, Zions Bancorp and Val Cor each desire to affiliate with the
Company through the merger of the Company with and into Val Cor, with Val Cor to
be the surviving corporation (the "Holding Company Merger") and, in addition, to
cause the consolidation of the Bank and Valley into a new national banking
association (the "Consolidated Association") (the consolidation of the Bank and
Valley into the Consolidated Association hereinafter referred to as the "Bank
Consolidation");

        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 Consolidation;

        WHEREAS, the respective boards of directors of Valley and the Bank have
determined that it would be in the best interests of Valley or the Bank, as the
case may be, its shareholders and customers, for Valley and the Bank to
consolidate into the Consolidated Association;

        WHEREAS, the respective Boards of Directors of Zions Bancorp, Val Cor,
and the Company have agreed, subject in the case of the Company to the receipt
of necessary shareholder approvals, to cause the Holding Company Merger pursuant
to the provisions of section 7-111-101 et seq. of the Colorado Business
Corporation Act; and, subject in the case of Valley to the receipt of necessary
shareholder approvals, to cause the Bank Consolidation pursuant to the
provisions of the Act of November 7, 1918, as amended (12 U.S.C. ss. 215);



<PAGE>



        WHEREAS, the respective Boards of Directors of Valley and the Bank have
agreed, subject in the case of Valley to the receipt of necessary shareholder
approvals, to cause the Bank Consolidation pursuant to the provisions of the Act
of November 7, 1918; and

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

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


1.      Combinations.

        1.1. Form of Combinations.

             (a) Val Cor and the Company will execute a merger agreement (the
"Holding Company Merger Agreement") substantially in the form of Exhibit I
annexed hereto. Subject to the provisions of the Holding Company Merger
Agreement, the Company will be merged with and into Val Cor in the Holding
Company Merger and Val Cor shall be the surviving corporation. The shares of
common stock, $5.00 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) Valley and the Bank will execute a consolidation agreement (the
"Bank Consolidation 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 Consolidation Agreement, the Bank and
Valley will be consolidated into the Consolidated Association in the Bank
Consolidation. The shares of common stock of the Bank and Valley shall be
canceled and immediately converted into the right to receive, subject to the
terms, conditions, and limitations set forth herein, such shares in the
Consolidated Association provided in section 1.2(b) hereof.

        1.2. Consideration for Mergers.

             (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:


                                      - 2 -


<PAGE>



                (i) 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 product of the Consideration Number and the Collar
Factor by the sum of the number of shares of Company Common Stock that shall be
issued and outstanding at the Effective Date and the Option Equivalent Number;

                (ii) each holder of shares of Bank Common Stock shall be
entitled to receive, in exchange for each share of Bank Common Stock held of
record by such stockholder as of the Effective Date, that number of shares of
the common stock of Consolidated Association, $5.00 par value (the "Consolidated
Association Common Stock") calculated by, first, dividing the tangible book
value of Valley by the number of shares of Valley Common Stock that shall be
issued and outstanding at the Effective Date, and second, dividing the tangible
book value of the Bank by the number so reached, and third, dividing the number
so reached by the total number of shares of Bank Common Stock that shall be
issued and outstanding at the Effective Date; and

                (iii) each holder of Valley Common Stock shall be entitled to
receive, in exchange for each share of Valley Common Stock held of record by
such stockholder as of the Effective Date, one share of Consolidated Association
Common Stock.

             (b)       As used in paragraph (a) of this section 1.2:

                (i) the term "Consideration Number" means 625,000, except that
if the total shareholders equity of the Company at December 31, 1997, determined
in accordance with paragraph (c) of this section 1.2, shall be less than
$5,000,000, then the "Consideration Number" shall be the difference between
625,000 and the number calculated by dividing the difference between $5,000,000
and the total shareholders equity of the Company at December 31, 1997,
determined in accordance with paragraph (c) of this section 1.2, by $40.00;

                (ii) if the average (rounded to the nearest penny) of the last
reported sale price or, if no such reported sale takes place, the mean
(unrounded) of the closing bid and asked prices of Zions Bancorp Stock in the
over-the-counter market as such prices are reported by the automated quotation
system of the National Association of Securities Dealers, Inc., or in the
absence thereof by such other source upon which Zions Bancorp and the Company
shall mutually agree, for each of the fifteen trading days ending on the fifth
trading day before the Effective Date (the "Average Closing Price") is:

                       (A) less than $34.00, the Collar Factor shall be a
fraction the numerator
of which is $34.00 and the denominator of which is the Average Closing Price;

                       (B) more than $46.00, the Collar Factor shall be a
fraction the numerator of which is $46.00 and the denominator of which is the
Average Closing Price; and

                                   - 3 -

<PAGE>



                       (C) not less than $34.00 and not more than $46.00, the
Collar Factor shall be One;

                (iii) the term "Option Equivalent Number" means the number
reached by summing the following values as calculated for each option to
purchase one share of Company Common Stock which is outstanding and unexercised
at the Effective Date: (A) the difference between the Value-Per-Share Factor and
the exercise price of that option (or, if a greater number, zero) divided by (B)
the Value-Per-Share Factor; and

                (iv) the term "Value-Per-Share Factor" means a number of dollars
and cents calculated by means of the following equation--

             "Value-Per-Share Factor"  =  ( V + ( O x P )
                                          --------------
                                             ( O + S )

- --where:

                       (A) V equals the product of the Consideration Number, the
Collar Factor, and the Average Closing Price;

                       (B) O equals the number of shares of Company Common Stock
that are subject to a stock option (whether vested or unvested) to be purchased,
which option is outstanding and unexercised at the Effective Date;

                       (C) P equals the per-share average of the exercise prices
of all stock options (whether vested or unvested) to purchase shares of Company
Common Stock, which options are outstanding and unexercised at the Effective
Date; and

                       (D) S equals the number of shares of Company Common Stock
that shall be issued and outstanding at the Effective Date.

             (c) Total shareholders equity of the Company at December 31, 1997
shall be determined for purposes of paragraph (b) of this section 1.2 in
accordance with generally accepted accounting principles, except that:

                (i) the credit to shareholders equity caused by any
undistributed gain, net of taxes, derived from activities or transactions which
are not in the ordinary course of its banking operations (such as, without
limitation, the sale of securities or loans, of capital assets, or of lines of
business, but excluding the sale of securities in connection with the ongoing
securities-sale program carried out by the Company or the Bank with Merrill
Lynch), all of which shall be determined in accordance with generally accepted
accounting principles, occurring between October 1, 1997 and December 31, 1997,
shall be excluded;


                                      - 4 -


<PAGE>



                (ii) the unrealized gain or loss on available-for-sale
securities of the Company or the Bank, net of tax, which is recorded as an
adjustment to shareholders equity pursuant to Statement of Financial Accounting
Standards No. 115 shall be excluded; and

                (iii) the expense, through the Effective Date, net of taxes, of
the investment bankers, consultants, brokers and finders who will have rendered
services to the Company or the Bank through the Effective Date (except the
services of attorneys and accountants rendering services in such capacities)
shall be recognized as an expense of the Company during the period between
October 1, 1997 and December 31, 1997, except to the extent that any of the same
shall have been recognized as an expense of the Company prior to September 30,
1997.

        1.3. No Fractional Shares.

             (a) Zions Bancorp will not issue fractional shares of its stock. In
lieu of fractional shares of Zions Bancorp Stock, if any, each shareholder of
the Company who is entitled to a fractional share of Zions Bancorp Stock shall
receive an amount of cash equal to the product of such fraction times $40.00.
Such fractional share interest shall not include the right to vote or to receive
dividends or any interest thereon.

             (b) Consolidated Association will not issue fractional shares of
its stock. In lieu of fractional shares of Consolidated Association Common
Stock, if any, each shareholder of the Bank or of Valley who is entitled to a
fractional share of Consolidated Association Common Stock shall receive an
amount of cash equal to the product of such fraction times the tangible book
value per share of Valley Common Stock immediately preceding the Effective Date.
Such fractional share interest shall not include the right to vote or to receive
dividends or any interest thereon.

        1.4. Dividends; Interest.

             (a) No shareholder of the Company will be entitled to receive
dividends on his or her Zions Bancorp Stock until he or she exchanges his or her
certificates representing Company Common Stock for Zions Bancorp Stock. Any
dividends declared on Zions Bancorp Stock (which stock is to be delivered
pursuant to this Agreement) to holders of record on or after the Effective Date
shall be paid to the Exchange Agent (as designated in Section 1.5 of this
Agreement) and, upon receipt of the certificates representing shares of Company
Common Stock, the Exchange Agent shall forward to the former shareholders
entitled to receive Zions Bancorp Stock (i) certificates representing their
shares of Zions Bancorp Stock, (ii) dividends declared thereon subsequent to the
Effective Date (without interest) and (iii) the cash value of any fractional
shares determined in accordance with Section 1.3(a) hereof.


                                      - 5 -


<PAGE>



             (b) No shareholder of the Bank or of Valley will be entitled to
receive dividends on his or her Consolidated Association Common Stock until he
or she exchanges his or her certificates representing Bank Common Stock or
Valley Common Stock, as the case may be, for Consolidated Association Common
Stock. Any dividends declared on Consolidated Association Common Stock (which
stock is to be delivered pursuant to this Agreement) to holders of record on or
after the Effective Date shall be paid to the Exchange Agent (as designated in
Section 1.5 of this Agreement) and, upon receipt of the certificates
representing shares of Bank Common Stock or Valley Common Stock, as the case may
be, the Exchange Agent shall forward to the former shareholders entitled to
receive Consolidated Association Common Stock (i) certificates representing
their shares of Consolidated Association Common Stock, (ii) dividends declared
thereon subsequent to the Effective Date (without interest) and (iii) the cash
value of any fractional shares determined in accordance with Section 1.3(b)
hereof.

        1.5. Designation of Exchange Agent.

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

             (b) Zions Bancorp will, promptly after the Effective Date, issue
and deliver to Zions Bank the share certificates representing shares of Zions
Bancorp Stock and the cash to be paid to holders of Company Common Stock in
accordance with this Agreement.

             (c) Consolidated Association will, promptly after the Effective
Date, issue and deliver to Zions Bank the share certificates representing shares
of Consolidated Association Common Stock and the cash to be paid to holders of
Bank Common Stock and Valley Common Stock in accordance with this Agreement.

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

        1.7. Treatment of Stock Options. Each stock option (whether vested or
unvested) to purchase Company Common Stock not exercised prior to the Effective
Date shall automatically be converted into an option to purchase, on the same
terms as the option to purchase Company Common Stock, and with the same dates of
exercisability and of expiration, that number of shares of Zions Bancorp Stock
equal to the number of shares of Company Common Stock which the holder of such
option would be entitled to receive under Section 1.2 of this Agreement had such
option

                                      - 6 -


<PAGE>



been exercised immediately preceding the Effective Date. The applicable
per-share option price in effect immediately prior to the Effective Date shall
be adjusted to an amount equal to the quotient obtained by dividing that option
price by the number of shares of Zions Bancorp Stock which the holder of one
share of Company Common Stock would be entitled to receive under Section 1.2 of
this Agreement.

        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. Bank Shareholder Approval. The day upon which the shareholders of
Bank approve, ratify, and confirm the Bank Consolidation; or

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


                                      - 7 -


<PAGE>



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

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

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

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

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

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


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

        The obligations of Zions Bancorp, Val Cor, and the Company to consummate
the Holding Company Merger and the obligations of Valley and the Bank to
consummate the Bank Consolidation 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.

                                      - 8 -


<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 Consolidation, 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. Accounting Treatment. It shall have been determined to the
satisfaction of Zions Bancorp (a) as of the date of the effective date of the
registration statement to be filed by Zions Bancorp with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of 1933 (the
"Securities Act") in connection with the registration of the shares of Zions
Bancorp Stock to be used as consideration in connection with the Holding Company
Merger (the "Registration Statement") that the reorganization contemplated by
this Agreement should be treated for accounting purposes as a "pooling of
interests" in accordance with APB Opinion No. 16, and (b) as of the Effective
Date that the reorganization contemplated by this Agreement will be treated for
accounting purposes as a "pooling of interests" in accordance with APB Opinion
No. 16, and Zions Bancorp shall have received letters to each of the above
effects from KPMG Peat Marwick, certified public accountants.

        3.4. Registration Statement.

             (a) Effectiveness. The Registration Statement shall have become
effective under the Securities Act, the Zions Bancorp Stock to be issued in the
Holding Company Merger shall have thereby been registered 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.

        3.5. 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.

                                      - 9 -

<PAGE>



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

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

        4.1. Approval by Shareholders of the Company and the Bank.

             (a) 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.

             (b) The shareholder of the Bank shall have authorized, ratified,
and confirmed the Bank Consolidation by not less than the requisite percentage
of the outstanding voting stock of each class of the Bank, in accordance with
the applicable laws of the State of Colorado.

        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 representations and warranties had been
made or given at and as of such date, except that representations and warranties
of the Company or the Bank contained in this Agreement which 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, substantially in
form and substance as that set forth as Exhibit IV attached hereto. 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 a
favorable opinion from McKenna & Cuneo, L.L.P., dated the Effective Date,
substantially in form and substance as that set forth as Exhibit V attached
hereto.

        4.4. Opinion of Company Litigation Counsel. Zions Bancorp shall have
received a favorable opinion from legal counsel handling litigation matters for
the Company and the Bank, dated the Effective Date, substantially in form and
substance as that set forth as Exhibit VI attached hereto.


                                     - 10 -


<PAGE>


        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 September 30, 1997 to the Effective
Date, (i) there shall not have been any material adverse change in the financial
position or results of operations of the Company or the Bank taken as a whole,
nor shall the Company or the Bank have sustained any material loss or damage to
its properties, whether or not insured, which materially affects its ability to
conduct its business; and (ii) none of the events described in clauses (a)
through (f) of Section 6.16 of this Agreement shall have occurred, and each of
the practices and conditions described in clauses (x) through (z) of that
section shall have been maintained.

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

             (c) As of the Effective Date, other than liabilities incurred in
the ordinary course of business subsequent to December 31, 1996, there shall be
no liabilities of the Company or the Bank which are material to the Company on a
consolidated basis which were not reflected on the consolidated statement of
condition of the Company as of December 31, 1996 or in the related notes to the
consolidated statement of condition of the Company as of December 31, 1996.

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

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

        4.7. Consolidated Net Worth. On and as of the Effective Date, the
consolidated net worth of the Company as determined in accordance with generally
accepted accounting principles shall not be less than the sum of (a) $4,499,551
and (b) the aggregate contributions to capital caused by the payments
accompanying the exercise of any stock options on or after September 30, 1997.


                                     - 11 -

<PAGE>



        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 or, to the extent different from generally
accepted accounting principles, accounting principles mandated or expressly
permitted by the Board of Governors ("Applicable Accounting Principles") shall
not be less than $587,397.

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

        4.10. Employment Agreements. John G. Jackson shall have entered into an
employment agreement with Valley substantially in form and substance as that set
forth as Exhibit VII attached hereto.

        4.11. Federal Income Taxation. Zions Bancorp shall have received a
written opinion of Duane, Morris & Heckscher LLP, applying existing law, that
the reorganization contemplated by this Agreement shall qualify as one or more
reorganizations under section 368(a)(1) of the Code and the regulations and
rulings promulgated thereunder.

        4.12. Comfort Letter. At each of the time of the effectiveness of the
Registration Statement, but prior to the mailing of the proxy materials, and the
Effective Date, Zions Bancorp shall have received a letter from the chief
financial officer of the Company, in form and substance acceptable to Zions
Bancorp, stating that a reading of the latest available consolidated financial
statements of the Company and financial statements of the Bank did not cause him
or her to believe that (i) the Company's consolidated financial statements are
not stated on a basis consistent with that followed in the Company's
consolidated financial statements for the most recent fiscal year end; 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 Company's consolidated financial statements for
the most recent fiscal year end. Each 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.

        4.13. Preemptive Rights. The holders of all of the outstanding shares of
Company Common Stock shall have executed and delivered, or caused to be
delivered, to Zions Bancorp such documents, in form and substance satisfactory
to Zions Bancorp, waiving all preemptive rights granted to them under the
articles of incorporation of the Company and the Colorado Revised Statutes to be
offered, to subscribe to, or to acquire shares of common stock, rights,
warrants, privileges, and options to purchase or receive common stock,
securities and obligations of any kind convertible into common stock, or any
other equity interest or right to an equity interest in the Company, now or
hereafter authorized.


                                     - 12 -

<PAGE>



        4.14. Consent to Transfer of Lease. The landlord of the facility at 111
South Tejon Street, Colorado Springs, Colorado which the Bank currently uses as
its head office shall have executed and delivered to Valley an appropriate
estoppel certificate and a written consent to the assignment and assumption by
the Bank of the lease of such facility, the form and substance of both of which
shall be reasonably acceptable to Valley.

        4.15. Bank Stock Loan. NationsBank, N.A. shall have delivered to the
Company and the Bank, in form and substance reasonably acceptable to Zions
Bancorp, the written consent of NationsBank, N.A. to the transactions
contemplated by this Agreement, the assumption or discharge by Val Cor of the
loan that is the subject of that certain loan agreement dated as of April 15,
1997 between NationsBank, N.A., the Company, and the Bank, and the release of
the shares of the stock of the Bank which secure such loan. The parties to this
Agreement agree to use their best efforts to procure such consent, or to obtain
such other result as shall effect the payment of such loan and the release of
the shares of the stock of the Bank which secure such loan, in good faith and in
a timely manner.

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. Approval by Shareholders of Valley. The shareholders of Valley
shall have authorized, ratified, and confirmed the Bank Consolidation by not
less than the requisite percentage of the outstanding voting stock of each class
of Valley, in accordance with the applicable laws of the United States.

        5.2 Representations and Warranties; Performance of Obligations. All
representations and warranties of Zions Bancorp, Val Cor, and Valley contained
in this Agreement shall be true and correct in all material respects as of the
Effective Date with the same effect as if such representations and warranties
had been made or given at and as of such date, except that representations and
warranties of Zions Bancorp, Val Cor, and Valley contained in this Agreement
which specifically relate to an earlier date shall be true and correct in all
material respects as of such earlier date. All covenants and obligations to be
performed or met by Zions Bancorp, Val Cor, or Valley on or prior to the
Effective Date shall have been so performed or met. On the Effective Date,
either the President or an Executive Vice President of Zions Bancorp and either
the Chairman of the Board or the President of each of Val Cor and Valley shall
deliver to the Company a certificate to that effect, substantially in form and
substance as that set forth as Exhibit IV attached hereto. The delivery of such
officer's certificate shall in no way diminish the warranties, representations,
covenants, and obligations of Zions Bancorp, Val Cor, and Valley made in this
Agreement.


                                     - 13 -

<PAGE>



        5.3. Opinion of Zions Bancorp Counsel. The Company shall have received a
favorable opinion of Duane, Morris & Heckscher LLP, dated the Effective Date,
substantially in form and substance as that set forth as Exhibit VIII attached
hereto.

        5.4. No Adverse Developments. During the period from September 30, 1997
to the Effective Date, there shall not have been any material adverse change in
the financial position or results of operations of Zions Bancorp nor shall Zions
Bancorp have sustained any material loss or damage to its properties, whether or
not insured, which materially affects its ability to conduct its business; and
the Company shall have received a certificate dated the Effective Date signed by
either the President of Zions Bancorp or an Executive Vice President of Zions
Bancorp to the foregoing effect. The delivery of such officer's certificate
shall in no way diminish the warranties and representations of Zions Bancorp
made in this Agreement.

        5.5. Status of Zions Bancorp Stock. Zions Bancorp Stock shall be listed
on the National Association of Securities Dealers' Automated Quotation System
(or else shall become listed on a national securities exchange).

        5.6. Federal Income Taxation. The Company shall have received a written
opinion of McKenna & Cuneo, L.L.P., applying existing law, that the
reorganization contemplated by this Agreement shall qualify as one or more
reorganizations under section 368(a)(1) of the Code and the regulations and
rulings promulgated thereunder.


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

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

        6.1. Organization, Powers, and Qualification. Each of the Company and
the Bank is a corporation which is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business
as now conducted. Each of the Company and the Bank owns or possesses in the
operation of its business all franchises, licenses, permits, branch
certificates, consents, approvals, waivers, and other authorizations,
governmental or otherwise, which are necessary for it to conduct its business as
now conducted, except for those where the failure of such ownership or
possession would not adversely affect the operation and properties of the
Company or the Bank in any material respect. Each of the Company and the Bank is
duly qualified and licensed to do business and is in good standing in every
jurisdiction with respect to which the failure to be so qualified or licensed
could result in material liability or adversely affect the operation and
properties of the Company or the Bank in any material respect.


                                     - 14 -

<PAGE>



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

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

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

             (b) neither the Company nor the Bank nor any member of the
management of either of them is a party to any assistance agreement, supervisory
agreement, memorandum of understanding, consent order, cease and desist order or
condition of any regulatory order or decree with or by the Board of Governors,
the 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 threatened;

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

             (d) the Bank has established a CRA policy which provides for (i)
goals and objectives consistent with CRA; (ii) a methodology for
self-assessment by the board of directors of the Bank; (iii) ongoing CRA
training of all personnel of the Bank, including the members of its board of
directors; and (iv) procedures whereby all significant CRA-related activity is
documented; and the Bank has officially designated a CRA officer who reports
directly to the board of directors and is responsible for the CRA program of the
Bank.

        6.4. Compliance with Agreements. Neither the Company nor the Bank is in
violation of any material term of any material security agreement, mortgage,
indenture, or any other contract,

                                     - 15 -

<PAGE>



agreement, instrument, lease, or certificate. The capital ratios of each of the
Company and the Bank comply fully with all terms of all currently outstanding
supervisory and regulatory requirements and with the conditions of all
regulatory orders and decrees.

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

        6.6. Absence of Default. None of the execution or the delivery of this
Agreement, the consummation of the transactions contemplated thereby, or the
compliance with or fulfillment of the terms thereof will conflict with, or
result in a breach of any of the terms, conditions, or provisions of, or
constitute a default under the organizational documents or bylaws of the Company
or the Bank. Such execution, consummation, or fulfillment will not (a) conflict
with, 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 Consolidation 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
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.


                                     - 16 -

<PAGE>



             (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, and other than as set forth on Schedule 6.8 hereof, 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)
200,000 shares of Company Common Stock, of which, as of the date of this
Agreement, 78,592 shares have been duly issued and are validly outstanding,
fully paid, and held by approximately 25 shareholders of record, and 37,933
additional shares are issued and 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 which would
enable the holder thereof to purchase or otherwise acquire shares of any class
of capital stock of the Company. No shares of Company Common Stock are held by
the Company as treasury shares except for the 37,933 shares of Company Common
Stock aforesaid. 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.


                                     - 17 -


<PAGE>



             (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 100,000
shares of common stock, $60,558.29 par value (the "Bank Common Stock"), of
which, as of the date of this Agreement, 19.81562 shares have been duly issued
and are validly outstanding, fully paid, and all of which are held of record and
beneficially by the Company. The aforementioned shares of Bank Common Stock are
the only 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) Except as set forth on Schedule 6.9 hereof, none of the shares
of Company Common Stock or Bank Common Stock has been issued in violation of the
preemptive rights of any shareholder.

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

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

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

                                     - 18 -

<PAGE>



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 Applicable 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. The Company and the Bank have made all accruals in amounts which fairly
report income and expense in the proper periods in accordance with Applicable
Accounting Principles. Each of the Company and the Bank has filed all material
reports and returns required by any law or regulation to be filed by it.

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

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

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

             (c) All material contracts, agreements, leases, mortgages, and
commitments, except those entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound; or, if any of the same
be oral, true, accurate, and complete written summaries of all such oral
contracts, agreements, leases, mortgages, and commitments;


                                     - 19 -

<PAGE>



             (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
1996, a copy of the most recent audit examination of each of the Company and the
Bank by the Internal Revenue Service ("IRS"), and a copy of all correspondence
or other documents with respect to any examination that has not yet been
resolved, a copy of the most recent state or local tax agency examination, if
any, of each of the Company and the Bank, and a copy of all correspondence or
other documents with respect to any examination that has not yet been resolved,
and all tax rulings, closing agreements, settlement agreements, or similar
documents with respect to the Company or the Bank received from or entered into
with the IRS or any other taxing authority since January 1, 1988 or that would
have continuing effect after the Effective Date.

        6.13. Financial Statements. The Company has furnished to Zions Bancorp
its consolidated statement of condition as of each of December 31, 1994,
December 31, 1995, December 31, 1996, and September 30, 1997, and its related
consolidated statement of income, consolidated statement of changes in financial
position, and consolidated statement of changes in stockholders' equity for each
of the periods then ended, and the notes thereto (collectively, the "Company
Financial Statements"). All of the Company Financial Statements, including the
related notes, (a) were prepared in accordance with Applicable 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 Applicable Accounting Principles, and (c) fairly reflect the
consolidated financial position of the Company as of such dates, and the
consolidated results of operations of the Company for the periods ended on such
dates, and do not fail to disclose any material extraordinary or out-of-period
items, and (d) reflect, in accordance with Applicable Accounting Principles
applied in all material respects, adequate provision for, or reserves against,
the possible loan losses of the Company as of such dates.



                                     - 20 -


<PAGE>


        6.14. Call Reports; Bank Holding Company Reports.

             (a) The Bank has made available to Zions Bancorp its Consolidated
Reports of Condition and Consolidated Reports of Income for the calendar
quarters dated March 31, 1995 and thereafter. All of such Consolidated Reports
of Condition and Consolidated Reports of Income, including the related schedules
and memorandum items, were prepared in accordance with Applicable Accounting
Principles applied in all material respects.

             (b) No adjustments are required to be made to the equity capital
account of the Bank as reported on any of the Consolidated Reports of Condition
referred to in Subsection 6.14(a) hereof, in any material amount, in order to
conform such equity capital account to equity capital as would be determined in
accordance with generally accepted accounting principles as of such date.

             (c) The Company has furnished to Zions Bancorp (i) its annual
report on Form FR Y-6 as filed with the Board of Governors as of December 31,
1996, and (ii) its semi-annual report on Form FR Y-9SP as filed with the Board
of Governors as of June 30, 1997.

        6.15. Absence of Undisclosed Liabilities. At September 30, 1997, neither
the Company nor the Bank had any obligation or liability of any nature (whether
absolute, accrued, contingent, or otherwise, and whether due or to become due)
which was material, or which when combined with all similar obligations or
liabilities would have been material, to the Company, except (a) as disclosed in
the Company Financial Statements, or (b) as set forth on Schedule 6.15 hereof,
or (c) for unfunded loan commitments made by the Company or the Bank in the
ordinary course of their business consistent with past practice. The amounts set
up as current liabilities for taxes in the Company Financial Statements are
sufficient 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 Applicable
Accounting Principles and unpaid at September 30, 1997. Since September 30,
1997, neither the Company nor the Bank has incurred or paid any obligation or
liability that would be material (on a consolidated basis) to the Company,
except (x) for obligations incurred or paid in connection with transactions by
it in the ordinary course of its business consistent with past practices, or (y)
as set forth on Schedule 6.15 hereof, or (z) as expressly contemplated herein.

        6.16. Absence of Certain Developments. Since September 30, 1997, except
as set forth on Schedule 6.16 hereof, there has been (a) no material adverse
change in the condition, financial or otherwise, or to the assets, properties,
liabilities, or businesses of the Company and the Bank, (b) 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

                                     - 21 -


<PAGE>



Company or in the level of its consolidated provision for credit losses or its
consolidated reserve for possible credit losses; (c) no declaration, setting
aside, or payment by the Company or the Bank of any regular dividend, special
dividend, or other distribution with respect to any class of capital stock of
the Company or the Bank, other than customary cash dividends paid by the Company
or the Bank whose amounts have not exceeded past practice and the intervals
between which dividends have not been more frequent than past practice; (d) no
repurchase by the Company of any of its capital stock; (e) no material loss,
destruction, or damage to any material property of the Company or the Bank,
which loss, destruction, or damage is not covered by insurance; and (f) no
material acquisition or disposition of any asset, nor any material contract
outside the ordinary course of business entered into by the Company or the Bank
nor any substantial amendment or termination of any material contract outside
the ordinary course of business to which the Company or the Bank is a party, nor
any other transaction by the Company or the Bank involving an amount in excess
of $25,000 other than for fair value in the ordinary course of its business.
Since September 30, 1997, except as set forth on Schedule 6.16 hereof, (x) each
of the Company and the Bank has conducted its business only in the ordinary
course of such business and consistent with past practice; (y) the Company, on a
consolidated basis, has maintained the quality of its loan portfolio and that of
each of its major components at approximately the same level as existed at
September 30, 1997; and (z) the Company, on a consolidated basis, has
administered its investment portfolio pursuant to essentially the same policies
and procedures as existed during 1995 and 1996 and the first nine months of
1997, and has taken no action to lengthen the average maturity of the investment
portfolio, or of any significant category thereof, to any material extent.

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

        6.18. Tax Matters.

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


                                     - 22 -

<PAGE>



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

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

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

             (e) The deductions of the Bank for bad debts taken and the reserve
of the Bank for loan losses for federal income tax purposes at December 31,
1996, were not greater than the maximum amount permitted under the provisions of
section 585 of the Code.

             (f) Other than liens arising under the laws of the State of
Colorado with respect to taxes assessed and not yet due and payable, there are
no tax liens on any of the properties or assets of the Company or the Bank.

             (g) The Company and the Bank (A) have timely filed all information
returns or reports required to be filed with respect to Taxes, including but not
limited to those required by sections 6041, 6041A, 6042, 6045, 6049, 6050H, and
6050J of the Code, (B) have properly and timely provided to all persons, other
than taxing authorities, all information reports or other documents (for
example, Form 1099s, Form W-2s, and so forth) required to be provided to such
persons under applicable law, and (C) have exercised due diligence in obtaining
certified taxpayer identification numbers as required under applicable law.

             (h) The taxable year end of the Company for federal income tax
purposes is, and since the inception of the Company has continuously been,
December 31.

             (i) The Company and the Bank have in all material respects
satisfied all federal, state, local, and foreign withholding tax requirements
including but not limited to income, social security, and employment tax
withholding.

             (j) Neither the Company nor the Bank (A) is, or has been, a member
of a group filing a consolidated, combined, or unitary tax return, other than a
group the common parent of which is or was the Company, or (B) has any liability
for the Taxes of any person (other than the Company and the Bank) under Treas.
Reg. Sec. 1.1502-6 (or any similar provision of state, local, or foreign law),
as a transferee or successor, by contract, or otherwise.


                                     - 23 -

<PAGE>



        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 $4,499,551.

        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 Division and the Federal Reserve Bank of Kansas City. 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 or the Banking Board, as the
case may be, and (f) any other governmental or regulatory authority or agency
having jurisdiction over its operations. Each of such registrations, reports,
and documents, including the financial statements, exhibits, and schedules
thereto, does not contain any statement which, at the time and in the light of
the circumstances under which it was made, is false or misleading with respect
to any material fact or which omits to state any material fact necessary in
order to make the statements contained therein not false or misleading.

        6.22. FIRA Compliance and Other Transactions with Affiliates. Except as
set forth on Schedule 6.22 hereof, (a) none of the officers, directors, or
beneficial holders of 5 percent or more of the common stock of the Company or
the Bank and no person "controlled" (as that term is defined in the Financial
Institutions Regulatory and Interest Rate Control Act of 1978) by the Company or
the Bank (collectively, "Insiders") has any ongoing material transaction with
the Company or the Bank on the date of this Agreement; (b) no Insider has any
ownership interest in any business, corporate or otherwise, which is a party to,
or in any property which is the subject of, business arrangements or
relationships of any kind with the Company or the Bank not in the ordinary
course of business; and (c) all other extensions of credit by the Company or the
Bank to any Insider have heretofore been disclosed in writing by the Company to
Zions Bancorp.

        6.23. SEC Registered Securities. No equity or debt securities of the
Company or the Bank are registered or required to be registered under the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act").


                                     - 24 -

<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 best of the knowledge of the Company and
the Bank , threatened or contemplated against or affecting it or its property,
assets, interests, or rights, or any basis therefor of which notice has been
given, which, if adversely determined, would have a material adverse effect
(financial or otherwise) on the business, operating results, or financial
condition of the Company or which otherwise could prevent, hinder, or delay
consummation of the transactions contemplated by this Agreement.

        6.25. Absence of Governmental Proceedings. Except as set forth on
Schedule 6.25 hereof, neither the Company nor the Bank is a party defendant or
respondent to any pending legal, equitable, or other proceeding commenced by any
governmental agency and, to the best of the knowledge of the Company and the
Bank, no such proceeding is threatened.

        6.26.   Federal Deposit Insurance.

             (a) The deposits held by the Bank are insured within statutory
limits by the Bank Insurance Fund of the FDIC pursuant to the provisions of the
Federal Deposit Insurance Act, as amended (12 U.S.C. ss. 1811 et seq.), and the
Bank has paid all assessments and filed all related reports and statements
required under the Federal Deposit Insurance Act.

             (b) The Bank is a member of and pay insurance assessments to the
Bank Insurance Fund of the FDIC ("BIF"), and its deposits are insured by the
BIF. None of the deposits of the Bank are insured by the Savings Association
Insurance Fund of the FDIC ("SAIF"), and the Bank pays no insurance assessments
to the SAIF.

        6.27. Other Insurance. Each of the Company and the Bank carries
insurance with reputable insurers, including blanket bond coverage, in such
amounts as are reasonable to cover such risks as are customary in relation to
the character and location of its properties and the nature of its businesses.
All such policies of insurance are in full force and effect, and no notice of
cancellation has been received. All premiums to date have been paid in full.
Neither the Company nor the Bank is in default with respect to any such policy
which is material to it.

        6.28. Labor Matters. Neither the Company nor the Bank is a party to or
bound by any collective bargaining contracts with respect to any employees of
the Company or the Bank. Since their respective inceptions there has not been,
nor to the best of the knowledge of the Company and the Bank was there or is
there threatened, any strike, slowdown, picketing, or work stoppage by any union
or other group of employees against the Company or the Bank or any of its
premises, or any other labor trouble or other occurrence, event, or condition of
a similar character. As of the date hereof, neither the Company nor the Bank is
aware of any attempts to organize a collective bargaining unit to represent any
of its employee groups.



                                     - 25 -

<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
and has never sponsored or maintained any defined benefit plan.

             (c) All "employee benefit plans," as defined in section 3(3) of
ERISA, that cover one or more employees employed by the Company or the Bank
(each individually a "Plan" and collectively the "Plans"), comply in all
material respects with ERISA and, where applicable for tax-qualified or
tax-favored treatment, with the Code. As of September 30, 1997, neither the
Company nor the Bank had any material liability under any Plan which is not
reflected on the Company Financial Statements as of such date (other than such
normally unrecorded liabilities under the Plans for sick leave, holiday,
education, bonus, vacation, incentive compensation, and anniversary awards,
provided that such liabilities are not in any event material). None of the
Plans, the Company, the Bank, nor any trustee or administrator of the Plans has
ever engaged in a "prohibited transaction" with respect to the Plans within the
meaning of section 406 of ERISA or, where applicable, section 4975 of the Code
for which no exemption is applicable, nor have there been any "reportable
events" within section 4043 of ERISA for which the thirty-day notice therefor
has not been waived. Neither the Company nor the Bank has incurred any liability
under section 4201 of ERISA for a complete or partial withdrawal from a
multi-employer plan.

                                   - 26 -

<PAGE>



             (d) No action, claim, or demand of any kind has been brought or
threatened by any potential claimant or representative of such a claimant under
any plan, contract, or arrangement referred to in Subsection (a) of this
section, where the Company or the Bank may be either (i) liable directly on such
action, claim, or demand; or (ii) obligated to indemnify any person, group of
persons, or entity with respect to such action, claim, or demand which is not
fully covered by insurance maintained with reputable, responsible financial
insurers or by a self-insured plan.

        6.30. Employee Relations. As of the date hereof, each of the Company and
the Bank is, to the best of its knowledge, in compliance in all material
respects with all federal and state laws, regulations, and orders respecting
employment and employment practices (including Title VII of the Civil Rights Act
of 1964), terms and conditions of employment, and wages and hours; and neither
the Company nor the Bank is engaged in any unfair labor practice. As of the date
hereof, except as set forth on Schedule 6.30 hereof, no dispute exists between
the Company or the Bank and any of its employee groups regarding any employee
organization, wages, hours, or conditions of employment which would materially
interfere with the business or operations of the Company or the Bank.

        6.31. Fiduciary Activities. The Bank is duly qualified and registered
and in good standing in accordance with the laws of each jurisdiction in which
it is required to so qualify or register as a result of or in connection with
its fiduciary or custodial activities as conducted as of the date hereof. The
Bank is duly registered under and in compliance with all requirements of the
federal Investment Advisers Act of 1940 as amended, or is exempt from
registration thereunder and from compliance with the requirements thereof. Since
January 1, 1994, the Bank has conducted, and currently is conducting, all
fiduciary and custodial activities in all material respects in accordance with
all applicable law.

        6.32.   Environmental Liability.

             (a) Except as set forth on Schedule 6.32 hereof, neither the
Company nor the Bank is in material violation of any judgment, decree, order,
law, license, rule or regulation pertaining to environmental matters, including
those arising under the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, the
Federal Water Pollution Control Act, the Federal Clean Air Act, the Toxic
Substances Control Act or any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the environment ("Environmental
Laws").

             (b) Except as set forth on Schedule 6.32 hereof, neither the
Company, the Bank, nor, to the best of the knowledge of either of them, any
borrower of the Company or of the Bank has

                                     - 27 -

<PAGE>



received notice that it has been identified by the United States Environmental
Protection Agency as a potentially responsible party under CERCLA with respect
to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B,
nor has the Company or the Bank or, to the best of the knowledge of either of
them, any borrower of the Company or of the Bank received any notification that
any hazardous waste, as defined by 42 U.S.C. ss. 6903(5), any hazardous
substances, as defined by 42 U.S.C. ss. 9601(14), any "pollutant or
contaminant," as defined by 42 U.S.C. ss. 9601(33), or any toxic substance,
hazardous materials, oil, or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") that it has disposed of has been
found at any site at which a federal or state agency is conducting a remedial
investigation or other action pursuant to any Environmental Law.

             (c) No portion of any real property at any time owned or leased by
the Company or the Bank (collectively, the "Company Real Estate") has been used
by the Company or the Bank for the handling, processing, storage or disposal of
Hazardous Substances in a manner which violates any Environmental Laws and, to
the best of the knowledge of the Company and the Bank, no underground tank or
other underground storage receptacle for Hazardous Substances is located on any
of the Company Real Estate. In the course of its activities, neither the Company
nor the Bank has generated or is generating any hazardous waste on any of the
Company Real Estate in a manner which violates any Environmental Laws. There has
been no past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping (collectively, a "Release") of Hazardous Substances by the Company or
the Bank on, upon, or into any of the Company Real Estate. In addition, to the
best of the knowledge of the Company and the Bank, except as set forth on
Schedule 6.32 hereof, there have been no such Releases on, upon, or into any
real property in the vicinity of any of the Company Real Estate that, through
soil or groundwater contamination, may be located on any of such Company Real
Estate.

             (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. Except as set forth on Schedule 6.33 hereof,
to the best of the knowledge of the Company and the Bank:


                                     - 28 -

<PAGE>



             (a) 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; and

             (b) no material product or service offered and no material
trademark, service mark, or similar right used by the Company or the Bank
infringes any rights of any other person, and, as of the date hereof, neither
the Company nor the Bank has received any written or oral notice of any claim of
such infringement.

        6.34. Real and Personal Property. Except for property and assets
disposed of in the ordinary course of business, each of the Company and the Bank
possesses good and marketable title to and owns, free and clear of any mortgage,
pledge, lien, charge, or other encumbrance or other third party interest of any
nature whatsoever which would materially interfere with the business or
operations of either the Company or the Bank, its real and personal property and
other assets, including without limitation those properties and assets reflected
in the Company Financial Statements as of September 30, 1997, or acquired by the
Company or the Bank subsequent to the date thereof. The leases pursuant to which
the Company and the Bank lease real or personal property are valid and effective
in accordance with their respective terms; and there is not, under any such
lease, any material existing default or any event which, with the giving of
notice or lapse of time or otherwise, would constitute a material default. The
real and personal property leased by either the Company or the Bank is free from
any adverse claim which would materially interfere with its business or
operation taken as a whole. The material properties and equipment owned or
leased by the Company and the Bank are in normal operating condition, free from
any known defects, except such minor defects as do not materially interfere with
the continued use thereof in the conduct of its normal operations.

        6.35. Loans, Leases, and Discounts.

             (a) To the best of the knowledge of the Company and the Bank, each
loan, lease, and discount reflected as an asset of the Company in the Company
Financial Statements as of September 30, 1997, or acquired since that date, is
the legal, valid, and binding obligation of the obligor named therein,
enforceable in accordance with its terms; and no loan, lease, or discount having
an unpaid balance (principal and accrued interest) in excess of $25,000 is
subject to any asserted defense, offset, or counterclaim known to the Company or
the Bank.

             (b) Except as set forth on Schedule 6.35 hereof, neither the
Company nor the Bank holds any loans or loan-participation interests purchased
from, or participates in any loans originated by, any person other than the
Company or the Bank.

        6.36. Material Contracts. Neither the Company nor the Bank nor any of
the assets, businesses, or operations of either of them is as of the date hereof
a party to, or is bound or affected by, or receives benefits under any material
agreement, arrangement, or commitment not cancelable

                                     - 29 -


<PAGE>



by it without penalty, other than (a) the agreements set forth on Schedule 6.36
hereof, and (b) agreements, arrangements, or commitments entered into in the
ordinary course of its business consistent with past practice, or, if there has
been no past practice, consistent with prudent banking practices.

        6.37. Employment and Severance Arrangements. Schedule 6.37 hereof sets
forth

             (a) all employment contracts granted by the Company or the Bank to
any of its officers, directors, shareholders, consultants, or other management
officials and any officer, director, shareholder, consultant, or management
official of any affiliate providing for increased or accelerated compensation
in the event of a change of control with respect to the Company or the Bank or
any other event affecting the ownership, control, or management of the Company
or the Bank; and

             (b) all employment and severance contracts, agreements, and
arrangements between the Company or the Bank and any officer, director,
consultant, or other management official of any of them.

        6.38. Material Contract Defaults. All contracts, agreements, leases,
mortgages, or commitments referred to in Section 6.12(c) hereof are valid and in
full force and effect on the date hereof. As of the date of this Agreement and
as of the Effective Date, neither the Company nor the Bank is or will be in
default in any material respect under any material contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument to which
it is a party or by which its assets, business, or operations may be bound or
affected or under which it or its assets, business, or operations receive
benefits; and there has not occurred any event that with the lapse of time or
the giving of notice or both would constitute such a default.

        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 Applicable Accounting Principles. The
controls contain self-monitoring mechanisms, and appropriate actions are taken
on significant deficiencies as they are identified.


                                     - 30 -


<PAGE>


        6.42. Dividends. Neither the Company nor the Bank has paid any dividend
to its shareholders which caused its regulatory capital to be less than the
amount then required by applicable law, or which exceeded any other limitation
on the payment of dividends imposed by law, agreement, or regulatory policy.

        6.43. Brokers and Advisers. Except as set forth on Schedule 6.43 hereof,
(a) there are no claims for brokerage commissions, finder's fees, or similar
compensation arising out of or due to any act of the Company or the Bank in
connection with the transactions contemplated by this Agreement or based upon
any agreement or arrangement made by or on behalf of the Company or the Bank,
and (b) neither the Company nor the Bank has entered into any agreement or
understanding with any party relating to financial advisory services provided or
to be provided with respect to the transactions contemplated by this Agreement.

        6.44. Interest Rate Risk Management Instruments.

             (a) Schedule 6.44 contains a true, correct, and complete list of
all interest-rate swaps, caps, floors, and options agreements and other
interest-rate risk management arrangements to which the Company or the Bank is a
party or by which any of its properties or assets may be bound.

             (b) All interest rate swaps, caps, floors, and option agreements
and other interest rate risk management arrangements to which the Company or the
Bank is a party or by which any of its properties or assets may be bound were
entered into in the ordinary course of its business and, to the best of its
knowledge, in accordance with prudent banking practice and applicable rules,
regulations, and regulatory policies and with counterparties believed to be
financially responsible at the time and are legal, valid, and binding
obligations enforceable in accordance with their terms (except as may be limited
by bankruptcy, insolvency, moratorium, reorganization, or similar laws affecting
the rights of creditors generally and the availability of equitable remedies),
and are in full force and effect. The Company and the Bank have duly performed
in all material respects of all of their respective obligations thereunder to
the extent that such obligations to perform have accrued; and to the best of the
knowledge of the Company and the Bank, there are no breaches, violations or
defaults or allegations or assertions of such by any party thereunder.

        6.45. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by the Company or the Bank
hereunder or in connection with this Agreement or any of the transactions
contemplated thereunder contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein, in light of the circumstances under which they were made, not
misleading. There is no fact known to the Company which reasonably might
materially adversely affect the business, assets,

                                     - 31 -

<PAGE>



liabilities, financial condition, results of operations, or prospects of the
Company or the Bank which has not been disclosed in the Company Financial
Statements or a certificate delivered to Zions Bancorp by the Company. Copies of
all documents referred to in this Agreement, unless prepared solely by Zions
Bancorp, Val Cor, or Valley or solely by Zions Bancorp, Val Cor, or Valley and
third parties hereto, are true, correct, and complete copies thereof and include
all amendments, supplements, and modifications thereto and all waivers
thereunder.

        6.46. Regulatory and Other Approvals. As of the date hereof, except as
set forth on Schedule 6.46 hereof, neither the Company nor the Bank is aware of
any reason why all material consents and approvals shall not be procured from
all regulatory agencies having jurisdiction over the transactions contemplated
by this Agreement, as shall be necessary for (a) consummation of the
transactions contemplated by this Agreement, and (b) the continuation after the
Effective Date of the business of the Company and the Bank as such business is
carried on immediately prior to the Effective Date, free of any conditions or
requirements which, in the reasonable opinion of the Company, could have a
material adverse effect upon the business, operations, activities, earnings, or
prospects of the Company. As of the date hereof, neither the Company nor the
Bank is aware of any reason why all material consents and approvals shall not be
procured from all other persons and entities whose consent or approval shall be
necessary for (y) consummation of the transactions contemplated by this
Agreement, or (z) the continuation after the Effective Date of the business of
the Company and the Bank as such business is carried on immediately prior to the
Effective Date.


7.      Covenants of the Company and the Bank.

        The Company (on behalf of itself and the Bank) and the Bank (on behalf
of itself) each hereby covenant and agree as follows:

        7.1. Rights of Access. In addition and not in limitation of any other
rights of access provided to Zions Bancorp, Val Cor, and Valley herein, until
the Effective Date the Company and the Bank will give to Zions Bancorp, Val Cor,
and Valley and to their representatives, including their certified public
accountants, KPMG Peat Marwick, full access during normal business hours to all
of the property, documents, contracts, books, and records of the Company and the
Bank, and such information with respect to their business affairs and properties
as Zions Bancorp, Val Cor, or Valley from time to time may reasonably request.

        7.2. Corporate Records, Contracts, etc.

             (a) The Company and the Bank will make available to Zions Bancorp,
Val Cor, and Valley copies of their respective articles of incorporation and
bylaws, and will make available their respective minute books, all of which
shall be certified to be complete and true copies.


                                   - 32 -

<PAGE>



             (b) The Company and the Bank will make available copies of all
contracts or agreements involving amounts in excess of $25,000 to which the
Company or the Bank is a party, including but not limited to data processing
contracts, service contracts, contracts to purchase or lease real property or
equipment, guaranties, employment contracts, and insurance contracts pertaining
to fire, accident, indemnity, fidelity, health, life, hospitalization, or other
employee benefits.

             (c) The Company and the Bank will furnish to Zions Bancorp, Val
Cor, and Valley the following information with respect to properties owned by
the Company and the Bank: (i) a brief description and location of each parcel of
real property owned by the Company or the Bank, (ii) a brief description of real
property covered by lease or other rental arrangements to which the Company or
the Bank is a party, including a copy of the relevant leases; and (iii) a brief
description of personal property with a value in excess of $25,000 covered by
lease or other rental arrangements to which the Company or the Bank is a party,
including a copy of the relevant leases.

        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 October 1, 1997
and the Effective Date which it customarily prepared during the period between
January 1, 1995 and September 30, 1997 and shall promptly provide Zions Bancorp
with copies of all such financial statements and reports. Such financial
statements and reports shall be verified by the chief financial officer of the
reporting entity. All of such financial statements and reports, including the
related notes, schedules, and memorandum items, will have been prepared in
accordance with Applicable Accounting Principles applied in all material
respects.

             (b) The Company and the Bank shall promptly provide Zions Bancorp
with (i) copies of all of its periodic reports to directors and to shareholders,
whether or not such reports were prepared or distributed in connection with a
meeting of the board of directors or a meeting of the shareholders, prepared or
distributed between the date of this Agreement and the Effective Date, and (ii)
complete copies of all minutes of meetings of its board of directors and
shareholders which meetings take place between the date of this Agreement and
the Effective Date, certified by the secretary or cashier or an assistant
secretary or assistant cashier of the Company or the Bank, as the case may be.

        7.4. Extraordinary Transactions. Without the prior written consent of
Zions Bancorp, neither the Company nor the Bank will, on or after the date of
this Agreement: (a) declare or pay any cash dividends or property dividends with
respect to any class of its capital stock, with the exception of customary
periodic cash dividends paid by the Company or the Bank to holders of its common
stock at such intervals and in such amounts as are in every case consistent with
the amounts and intervals characteristic of that payer; (b) declare or
distribute any stock dividend, authorize a stock split, or authorize, issue or
make any distribution of its capital stock or any other securities

                                     - 33 -

<PAGE>



(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, 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 October 1, 1997, increase the rate of
compensation of any employee or enter into any agreement to increase the rate of
compensation of any employee; (i) create or modify any pension or profit sharing
plan, bonus, deferred compensation, death benefit, or retirement plan, or the
level of benefits under any such plan, nor increase or decrease any severance or
termination pay benefit or any other fringe benefit; (j) enter into any
employment or personal services contract with any person or firm, including
without limitation any contract, agreement, or arrangement described in Section
6.37(a) hereof, except directly to facilitate the transactions contemplated by
this Agreement; 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 September
30, 1997, as adjusted to allow for seasonal fluctuations of loans and deposits
of a kind and amount experienced traditionally by it; (c) manage its investment
portfolio in substantially the same manner and pursuant to substantially the
same investment policies as in 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 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.


                                     - 34 -

<PAGE>



        7.6. Affiliates' Agreements. The Company will furnish to Zions Bancorp a
list of all persons known to the Company who at the date of the Company's
special meeting of shareholders to vote upon the transactions contemplated by
this Agreement may be deemed to be "affiliates" of the Company within the
meaning of Rule 145 under the 1933 Act and for purposes of qualifying the
Holding Company Merger for "pooling of interests" accounting treatment. The
Company will use its best efforts to cause each such "affiliate" of the Company
to deliver to Zions Bancorp not later than thirty days prior to the Effective
Date a written agreement providing that such person will not sell, pledge,
transfer or otherwise dispose of (a) the shares of Company Common Stock
beneficially owned by such person, or the shares of Zions Bancorp Stock to be
received by such person in the Holding Company Merger (the "Company Merger
Shares") or any other shares of Zions Bancorp Stock held by such person during
the period commencing thirty days prior to the Effective Date and ending at such
time as financial results covering at least thirty days of post-Holding Company
Merger combined operations have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies or (b) the
Company Merger Shares except in compliance with the applicable provisions of the
1933 Act and the rules and regulations thereunder.

        7.7. Inconsistent Activities. Unless and until the Holding Company
Merger has been consummated or this Agreement has been terminated in accordance
with its terms, neither the Company nor the Bank will (a) solicit or encourage,
directly or indirectly, any inquiries or proposals to acquire more than 1
percent of the Company Common Stock or any capital stock of the Bank or any
significant portion the assets of either of them (whether by tender offer,
merger, purchase of assets, or other transactions of any type); (b) afford any
third party which may be considering any such transaction access to its
properties, books or records except as required by mandatory provisions of law;
(c) enter into any discussions or negotiations for, or enter into any agreement
or understanding which provides for, any such transaction, or (d) authorize or
permit any of its directors, officers, employees or agents to do or permit any
of the foregoing. If the Company or the Bank becomes aware of any offer or
proposed offer to acquire any shares of its capital stock or any significant
portion of its assets (regardless of the form of the proposed transaction) or of
any other matter which could adversely affect this Agreement, the Holding
Company Merger, or the Bank Merger, the Company and the Bank shall immediately
give notice thereof to Zions Bancorp.


8.      Representations and Warranties of Zions Bancorp, Val Cor, and Valley.

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

        8.1. Organization, Powers, and Qualification. Each of Zions Bancorp, Val
Cor, and Valley is a corporation which is duly organized, validly existing, and
in good standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business

                                     - 35 -

<PAGE>



as now conducted. Each of Zions Bancorp, Val Cor, and Valley owns or possesses
in the operation of its business all franchises, licenses, permits, branch
certificates, consents, approvals, waivers, and other authorizations,
governmental or otherwise, which are necessary for it to conduct its business as
now conducted, except for those where the failure of such ownership or
possession would not adversely affect its operation and properties in any
material respect. Each of Zions Bancorp, Val Cor, and Valley is duly qualified
and licensed to do business and is in good standing in every jurisdiction in
which such qualification or license is required or with respect to which the
failure to be so qualified or licensed could result in material liability or
adversely affect its operation and properties in any material respect.

        8.2. Execution and Performance of Agreement. Each of Zions Bancorp, Val
Cor, and Valley has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its respective terms.

        8.3. Binding Obligations; Due Authorization. This Agreement constitutes
the valid, legal, and binding obligations of each of Zions Bancorp, Val Cor, and
Valley enforceable against it in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or
similar law, or by general principles of equity. The execution, delivery, and
performance of this Agreement and the transactions contemplated thereby have
been duly and validly authorized by the board of directors of each of Zions
Bancorp, Val Cor, and Valley. No other corporate proceedings on the part of any
of them are necessary to authorize this Agreement or the carrying out of the
transactions contemplated hereby.

        8.4. Absence of Default. None of the execution or the delivery of this
Agreement, the consummation of the transactions contemplated hereby, or the
compliance with or fulfillment of the terms hereof will conflict with, or result
in a breach of any of the terms, conditions, or provisions of, or constitute a
default under the organizational documents or bylaws of Zions Bancorp, Val Cor,
or Valley. None of such execution, consummation, or fulfillment will (a)
conflict with, or result in a material breach of the terms, conditions, or
provisions of, or constitute a material violation, conflict, or default under,
or give rise to any right of termination, cancellation, or acceleration with
respect to, or result in the creation of any lien, charge, or encumbrance upon,
any of the property or assets of Zions Bancorp, Val Cor, or Valley pursuant to
any material agreement or instrument under which it is obligated or by which any
of its properties or assets may be bound, including without limitation any
material lease, contract, mortgage, promissory note, deed of trust, loan, credit
arrangement or other commitment or arrangement of it in respect of which it is
an obligor, or (b) if the Holding Company Merger is approved by the Board of
Governors under the BHC, 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 Valley is subject and which is material to its
operations, or (c) violate any judgment, order, writ, injunction, decree, or
ruling to which it or any of its properties or assets is subject or bound. None
of the execution or delivery of this Agreement, the consummation of the

                                     - 36 -

<PAGE>



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 Valley in connection with the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by or on behalf of any
of them.

             (b) None of Zions Bancorp, Val Cor, nor Valley has entered into any
agreement or understanding with any party relating to financial advisory
services provided or to be provided with respect to the transactions
contemplated by this Agreement.

        8.6. Books and Records. The books and records of each of Zions Bancorp,
Val Cor, and Valley fairly reflect the transactions to which it is a party or by
which its properties are subject or bound. Such books and records have been
properly kept and maintained and are in compliance in all material respects with
all applicable legal and accounting requirements. Each of Zions Bancorp, Val
Cor, and Valley follows generally accepted accounting principles applied on a
consistent basis in the preparation and maintenance of its books of account and
financial statements, including but not limited to the application of the
accrual method of accounting for interest income on loans, leases, discounts,
and investments, interest expense on deposits and all other liabilities, and all
other items of income and expense. Each of Zions Bancorp, Val Cor, and Valley
has made all accruals in amounts which accurately report income and expense in
the proper periods in accordance with generally accepted accounting principles.
Each of Zions Bancorp, Val Cor, and Valley has filed all material reports and
returns required by any law or regulation to be filed by it.

        8.7. Financial Statements. Zions Bancorp has furnished to the Company
its consolidated statement of condition as of each of December 31, 1994,
December 31, 1995, December 31, 1996, and September 30, 1997, and its related
consolidated statement of income, consolidated statement of changes in financial
position, and consolidated statement of changes in stockholders' equity for each
of the periods then ended, and the notes thereto (collectively, the "Zions
Bancorp Financial Statements"). All of the Zions Bancorp Financial Statements,
including the related notes, (a) were prepared in accordance with generally
accepted accounting principles applied in all material respects, and (b) are in
accordance with the books and records of Zions Bancorp which have been
maintained in accordance with generally accepted accounting principles, and (c)
fairly reflect the consolidated financial position of Zions Bancorp as of such
dates, and the consolidated results of operations of Zions Bancorp for the
periods ended on such dates, and do not fail to disclose any material
extraordinary or out-of-period items, and (d) reflect, in accordance with
generally accepted accounting principles applied in all material respects,
adequate provision for, or reserves against, the possible loan losses of Zions
Bancorp as of such dates.


                                     - 37 -

<PAGE>


        8.8. Absence of Certain Developments. Since September 30, 1997, there
has been (a) no material adverse change in the condition, financial or
otherwise, assets, properties, liabilities, or businesses of Zions Bancorp, and
(b) no material deterioration in the quality of the loan portfolio of Zions
Bancorp or of any major component thereof, and no material increase in the level
of nonperforming assets or nonaccrual loans at Zions Bancorp or in the level of
its provision for credit losses or its reserve for possible credit losses.

        8.9. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by it hereunder or in
connection with this Agreement or any of the transactions contemplated
thereunder contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein, in
light of the circumstances under which they were made, not misleading. There is
no fact known to it which might materially adversely affect its business,
assets, liabilities, financial condition, results of operations, or prospects
which has not been disclosed in the Zions Bancorp Financial Statements or a
certificate delivered by it to the Company. Copies of all documents referred to
in this Agreement, unless prepared solely by the Company and the Bank or solely
by the Company and the Bank and third parties hereto, are true, correct, and
complete copies thereof and include all amendments, supplements, and
modifications thereto and all waivers thereunder.


9.      Closing.

        9.1. Place and Time of Closing. Closing shall take place at the offices
of Zions Bancorp, One South Main Street, Suite 1380, Salt Lake City, Utah, or
such other place as the parties choose, commencing at 10:00 a.m., local time, on
the Effective Date, provided that all conditions precedent to the obligations of
the parties hereto to close have then been met or waived.

        9.2. Events To Take Place at Closing. At the Closing, the following
actions will be taken:

             (a) such certificates and other documents as are required by this
Agreement to be executed and delivered on or prior to the Effective Date and
have not been so executed and delivered, and such other certificates and
documents as are mutually deemed by the parties to be otherwise desirable for
the effectuation of the Closing, will be so executed and delivered; and then

             (b) the Holding Company Merger and the issuance of shares incident
thereto shall be effected; provided, however, that the administrative and
ministerial aspects of the issuance of shares incident to the Holding Company
Merger will be settled as soon thereafter as shall be reasonable under the
circumstances; and then


                                     - 38 -

<PAGE>



             (c) the Bank Consolidation shall be effected.


10.     Termination, Damages for Breach, Waiver, and Amendment.

        10.1. Termination by Reason of Lapse of Time. This Agreement may be
terminated by any party on or after July 31, 1998, by instrument duly authorized
and executed and delivered to the other parties, unless the Effective Date shall
have occurred on or before such date.

        10.2. Grounds for Termination. This Agreement may be terminated by
written notice of termination at any time before the Effective Date (whether
before or after action by shareholders of the Company):

             (a) by mutual consent of the parties hereto;

             (b) by Zions Bancorp, upon written notice to the Company given at
any time (i) if any of the representations and warranties of the Company or the
Bank contained in Section 6 hereof was materially incorrect when made, or (ii)
in the event of a material breach or material failure by the Company or the Bank
of any covenant or agreement of the Company or the Bank contained in this
Agreement which has not been, or cannot be, cured within thirty days after
written notice of such breach or failure is given to the Company or the Bank, as
the case may be;

             (c) by the Company, upon written notice to Zions Bancorp given at
any time (i) if any of the representations and warranties of Zions Bancorp, Val
Cor, or Valley contained in Section 8 hereof was materially incorrect when made,
or (ii) in the event of a material breach or material failure by Zions Bancorp,
Val Cor, or Valley of any covenant or agreement of Zions Bancorp, Val Cor, or
Valley contained in this Agreement which has not been, or cannot be, cured
within thirty days after written notice of such breach or failure is given to
Zions Bancorp, Val Cor, or Valley, as the case may be; or

             (d) by either Zions Bancorp or the Company upon written notice
given to the other if the board of directors of either Zions Bancorp or the
Company shall have determined in its sole judgment made in good faith, after due
consideration and consultation with counsel, that the Holding Company Merger has
become inadvisable or impracticable by reason of the institution of litigation
by the federal government or the government of the State of Colorado or the
State of Utah to restrain or invalidate the transactions contemplated by this
Agreement.

        10.3. Effect of Termination. In the event of the termination and
abandonment hereof pursuant to the provisions of Section 10.1 or Section 10.2,
this Agreement shall become void and have no force or effect, without any
liability on the part of Zions Bancorp, Val Cor, Valley, the Company, the Bank,
or their respective directors or officers or shareholders, in respect of this
Agreement. Notwithstanding the foregoing, (a) as provided in Section 11.4 of
this Agreement, the

                                     - 39 -


<PAGE>



confidentiality agreement contained in that section shall survive such
termination; (b) if such termination is a result of any of the representations
and warranties of a party being materially incorrect when made or a result of
the material breach or material failure by a party of a covenant or agreement
hereunder, such party whose representations and warranties were materially
incorrect or who materially breached or failed to perform its covenant or
agreement shall be liable to the other party or parties hereto that are not
affiliated with it to the extent of the actual, reasonable out-of-pocket
expenses, not to exceed $500,000, incurred by the other party or parties not
affiliated with it in connection with the negotiation and preparation of this
Agreement and the carrying out of the transactions contemplated hereby; and (c)
if a Trigger Event should occur, the Company shall be liable (and in the event
that the Bank or its board of directors shall have participated in the Trigger
Event, the Company and the Bank shall be jointly and severally liable) to Zions
Bancorp in the amount of $1,000,000. As used in this Section 10.3, "Trigger
Event" shall mean any of the following: (w) the board of directors of the
Company or the board of directors of the Bank shall have authorized the
execution of an agreement with any person or group of persons other than Zions
Bancorp or an affiliate of Zions Bancorp (a "Third Party") pursuant to which
such Third Party will acquire, merge or consolidate with, or acquire all or
substantially all of the assets of, the Company or the Bank, or engage in a
substantially similar transaction; (x) the board of directors of the Company or
the board of directors of the Bank shall have supported an offer or proposal by
any Third Party to acquire, merge or consolidate with the Company or the Bank,
or acquire all or substantially all of the assets of the Company or the Bank (or
to engage in a substantially similar transaction); (y) unless such
recommendation is required, in the reasonable opinion of independent corporate
counsel to the Company, for the board of directors of the Company to discharge
its fiduciary duties, the board of directors of the Company or the board of
directors of the Bank shall have recommended to the shareholders of the Company
that they not approve this Agreement; or (z) the shareholders of the Company, at
the meeting of shareholders called to vote on this Agreement, fail to approve
this Agreement by the vote required by applicable law and the articles of
incorporation of the Company and, within six months thereafter, the board of
directors of the Company or the Board of Directors of the Bank shall have either
authorized the execution of an agreement with a Third Party pursuant to which
such Third Party will acquire, merge or consolidate with, or acquire all or
substantially all of the assets of, the Company or the Bank, or engage in a
substantially similar transaction, or supported an offer or proposal by any
Third Party to acquire, merge or consolidate with the Company or the Bank, or
acquire all or substantially all of the assets of the Company or the Bank (or to
engage in a substantially similar transaction).

        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.



                                     - 40 -


<PAGE>



        10.5. Amendment.

             (a) Anything herein or elsewhere to the contrary notwithstanding,
to the extent permitted by law, this Agreement and the exhibits hereto may be
amended, supplemented, or interpreted at any time prior to the Effective Date by
written instrument duly authorized and executed by each of the parties hereto;
provided, however, that this Agreement may not be amended after the action by
shareholders of the Company or shareholders of Valley in any respect that would
prejudice the economic interests of such Company shareholders or Valley
shareholders, as the case may be, or any of them, except as specifically
provided herein or by like action of such shareholders.

             (b) If Zions Bancorp and the Company should mutually determine
(following receipt of advice of legal or other counsel) that it has become
inadvisable or inexpedient to effectuate the transactions contemplated by this
Agreement through means of a sequence of mergers such as is contemplated herein,
then the parties hereto agree to effect such change in the form of transaction
as described especially in Sections 1.1 and 9.2 of this Agreement by written
instrument in amendment of this Agreement.

             (c) The parties to this Agreement acknowledge that Valley is a
party to an unrelated agreement and plan of reorganization pursuant to which
Valley is scheduled to be merged with and into The First National Bank in
Alamosa, a national banking association with its head office located in Alamosa,
County of Alamosa, State of Colorado (the "Alamosa Merger"). The parties hereto
agree that nothing in this Agreement shall preclude or condition the right of
Valley to participate in the Alamosa Merger. The parties hereto further agree
that, if the Alamosa Merger shall have occurred prior to the Effective Date,
then the parties hereto agree to effect such change in the form of transaction,
by written instrument in amendment of this Agreement and of such other
agreements between or among the parties hereto or any of them as shall be
implicated herein, as shall be necessary or advisable to cause the Bank to merge
into the resulting bank in the Alamosa Merger.


11.     General Provisions.

        11.1. Allocation of Costs and Expenses. Except as provided in this
Section, each party hereto shall pay its own fees and expenses, including
without limitation the fees and expenses of its own counsel and its own
accountants and tax advisers, incurred in connection with this Agreement and the
transactions contemplated thereby. Each party hereto shall also pay the fees and
expenses which it is deemed to have incurred by virtue of the next sentence of
this Section. For purposes of this Section, (i) the cost of printing and
delivering the proxy statement and other material to be transmitted to
shareholders of the Company shall be deemed to be incurred on behalf of the

                                     - 41 -

<PAGE>





Company, (ii) the cost of printing and delivering the proxy statement or
information statement and other materials to be transmitted to shareholders of
Valley shall be deemed to be incurred on behalf of Valley, and (iii) the cost of
registering under federal and state securities laws the stock of Zions Bancorp
to be received by the shareholders of the Company shall be deemed to be incurred
on behalf of Zions Bancorp, and (iv) the cost of procuring the regulatory
approvals, orders, and waivers described in sections 2.3, 2.4, 2.5, and 2.6
shall be deemed to be incurred on behalf of Zions Bancorp.

        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: (a) carrying out the provisions of this Agreement, (b)
expeditiously making all filings and obtaining all necessary governmental
approvals, and (c) expeditiously executing and delivering, or causing to be
executed and delivered, such governmental notifications and additional documents
and instruments and doing or causing to be done all additional things necessary,
proper, or advisable under applicable law to consummate and make effective the
transactions contemplated hereby. Each party shall promptly provide to the other
party or parties not affiliated with it a copy of the publicly available portion
of each substantive regulatory application, notice, or waiver request it shall
file with any regulatory authority in connection with the transactions
contemplated by this Agreement and a copy of the publicly available portion of
each substantive item of correspondence between it and any regulatory authority
with whom such an application, notice, or waiver request has been filed,
provided that the correspondence relates primarily to such application, notice,
or waiver request. Each party shall promptly apprise the other party of material
developments in connection with the processing of such applications, notice, and
waiver requests that are likely to affect the date of receipt of any approval,
consent, or waiver required in connection with the transactions contemplated by
this Agreement.

        11.3. Form of Public Disclosures. Zions Bancorp and the Company shall
mutually agree in advance upon the form and substance of all public disclosures
concerning this Agreement and the transactions contemplated hereby.

        11.4. Confidentiality. Zions Bancorp, Val Cor, Valley, the Company, the
Bank, and their respective subsidiaries shall use all information that each
obtains from the other pursuant to this Agreement solely for the effectuation of
the transactions contemplated by this Agreement or for other purposes consistent
with the intent of this Agreement. Neither Zions Bancorp, Val Cor, Valley, the
Company, the Bank, nor their respective subsidiaries shall use any of such
information for any other purpose, including, without limitation, the
competitive detriment of any other party. Zions Bancorp, Val Cor, and Valley, on
the one hand, and the Company and the Bank, on the other hand, shall maintain as
strictly confidential all information each of them learns from the other and
shall, at any time, upon the request of the other, return promptly to it all
documentation provided by it or made available to third parties. Each of the
parties may disclose such information to its respective affiliates, counsel,
accountants, tax advisers, and consultants. The confidentiality agreement
contained in this Section 11.4 shall remain operative and in full force and
effect, and shall survive the termination of this Agreement.

                                     - 42 -


<PAGE>



        11.5. Claims of Brokers.

             (a) Each of the Company and the Bank shall indemnify, defend, and
hold Zions Bancorp, Val Cor, and Valley harmless for, from, and against any
claim, suit, liability, fees, or expenses (including, without limitation,
attorneys' fees and costs of court) arising out of any claim for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
of its or his acts in connection with the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by it or him or on its
or his behalf with respect to Zions Bancorp, Val Cor, or Valley.

             (b) Each of Zions Bancorp, Val Cor, and Valley shall indemnify,
defend, and hold the Company and the Bank harmless for, from, and against any
claim, suit, liability, fees, or expenses (including, without limitation,
attorneys' fees and costs of court) arising out of any claim for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
of its acts in connection with any of the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by it or on its behalf
with respect to the Company or the Bank.

        11.6. Information for Applications and Registration Statement.

             (a) Each party represents and warrants that all information
concerning it which is included in any statement and application (including the
Registration Statement) made to any governmental agency in connection with the
transactions contemplated by this Agreement shall not, with respect to such
party, omit any material fact required to be stated therein or necessary to make
the statements made, in light of the circumstances under which they were made,
not misleading. The party so representing and warranting will indemnify, defend,
and hold harmless the other, each of its directors and officers, each
underwriter and each person, if any, who controls the other within the meaning
of the Securities Act, for, from and against any and all losses, claims, suits,
damages, expenses, or liabilities to which any of them may become subject under
applicable laws (including, but not limited to, the Securities Act and the
Exchange Act) and rules and regulations thereunder and will reimburse them for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any actions whether or not resulting in liability,
insofar as such losses, claims, damages, expenses, liabilities, or actions arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any such application or statement or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary in order to make the statements
therein not misleading, but only insofar as any such statement or omission was
made in reliance upon and in conformity with information furnished in writing by
the representing and warranting party expressly for use therein. Each party
agrees at any time upon the request of the other to furnish to the other a
written letter or statement confirming the accuracy of the information contained
in any proxy statement, registration statement, report, or other application or
statement, and confirming that the information contained in such document was
furnished expressly for use therein or, if such is not the case, indicating the
inaccuracies contained in such document or draft or indicating the

                                     - 43 -


<PAGE>



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 September 30, 1997, as determined in accordance with generally accepted
accounting principles.

             (b) For purposes of Sections 5 and 8 of this Agreement, the terms
"material" and "materially," when used with reference to items normally
expressed in dollars, shall be deemed to refer to amounts individually and in
the aggregate in excess of 3 percent of the shareholders' equity of Zions
Bancorp as of September 30, 1997, as determined in accordance with generally
accepted accounting principles.

             (c) For other purposes and, notwithstanding subsections (a) and (b)
of this section 11.7, when used anywhere in this Agreement with explicit
reference to any of the federal securities laws or to the Registration
Statement, the terms "material" and "materially" shall be construed and
understood in accordance with standards of materiality as judicially determined
under the federal securities laws.

        11.8.   Covenants of Zions Bancorp.

             (a) From the date hereof to the Effective Date, Zions Bancorp
shall, contemporaneously with the filing with the SEC of any periodic or current
report pursuant to section 13 of the Exchange Act, deliver a copy of such report
to the Company.

             (b) Following the Effective Date neither Val Cor nor Valley will
take any action to abrogate or diminish any right accorded under the articles of
incorporation, bylaws, or resolutions of the board of directors of the Company
or the Bank as they existed immediately prior to the

                                     - 44 -

<PAGE>



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, bylaws, and
resolutions of the board of directors 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 Consolidation, to the extent permitted by law, Val Cor and
Valley will honor such obligations in accordance with their terms with respect
to events, acts, or omissions occurring prior to the Effective Date.

        11.9. Adjustments for Certain Events. Anything in this agreement to the
contrary notwithstanding, all prices per share and exchange ratios referred to
in this Agreement shall be appropriately adjusted to account for stock
dividends, split-ups, mergers, recapitalizations, combinations, conversions,
exchanges of shares or the like, but not for normal and recurring cash dividends
declared or paid in a manner consistent with the established practice of the
payer.

        11.10. Stock Repurchases. The Company and the Bank acknowledge that from
time to time Zions Bancorp repurchases shares of its common stock in the open
market in accordance with market conditions. Nothing in this Agreement shall be
construed to abridge the right of Zions Bancorp to continue to do so in
compliance with Exchange Act rules and regulations and pursuant to advice of
independent securities counsel for Zions Bancorp.

        11.11. 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, Valley,
the Company, the Bank, and their respective shareholders, any rights or remedies
under or by reason of this Agreement.


                                     - 45 -

<PAGE>



        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 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:

If to Zions Bancorp, Val Cor, or Valley:

        Zions Bancorporation
        One South Main Street, Suite 1380
        Salt Lake City, Utah  84111

        Attention:     Mr. Harris H. Simmons
                President and Chief Executive Officer

With a required copy to:

        Brian D. Alprin, Esq.
        Duane, Morris & Heckscher LLP
        1667 K Street, N.W., Suite 700
        Washington, D.C.  20006


                                     - 46 -

<PAGE>



If to the Company or the Bank:

        SBT Bankshares, Inc.
        111 South Tejon Street
        Colorado Springs, Colorado 80903

        Attention:     Mr. John G. Jackson
                Chairman, President and Chief Executive Officer

With a required copy to:

        John E. Burrus, Esq.
        McKenna & Cuneo, L.L.P.
        370 Seventeenth Street, Suite 4800
        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 to be the proper jurisdiction and venue
for any suit or action arising out of this Agreement. Each of the parties
consents to personal jurisdiction in such venue 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. Each of the parties irrevocably and unconditionally waives and
agrees, to the fullest extent permitted by law, not to plead any objection that
it may now or hereafter have to the laying of venue or the convenience of the
forum of any action or claim with respect to this Agreement or the transactions
contemplated thereby brought in the courts aforesaid.

        11.17. Knowledge of a Party. References in this Agreement to the
knowledge of a party shall mean the knowledge possessed by any of such parties
or the present executive officers of such party including, without limitation,
information which is or has been in the books and records of such party.

        11.18. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.



                                     - 47 -

<PAGE>



        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                                ZIONS BANCORPORATION



Attest:                                         By:
         -----------------------------              ----------------------------
                  Dale M. Gibbons                          Harris H. Simmons
              Senior Vice President                        President and
                    and Secretary                      Chief Executive Officer



                                                VAL COR BANCORPORATION, INC.



Attest:                                         By:
         -----------------------------              ----------------------------
                                                          Wayne D. Glazner
                                                             President and
                                                       Chief Executive Officer



                                                VALLEY NATIONAL BANK OF CORTEZ



Attest:                                         By:
         -----------------------------              ----------------------------
                                                         R. Lance Michaels
                                                    Executive Vice President and
                                                       Chief Executive Officer



                                     - 48 -

<PAGE>



                                                SBT BANKSHARES, INC.



Attest:                                                      By:
         -----------------------------              ----------------------------
                                                          John G. Jackson
                                                      Chairman, President and
                                                       Chief Executive Officer




                                                STATE BANK AND TRUST OF COLORADO
                                                SPRINGS



Attest:                                         By:
         -----------------------------              ----------------------------
                                                          John G. Jackson
                                                      Chairman, President and
                                                       Chief Executive Officer




                                     - 49 -

<PAGE>



- ------------------------------------------------
                                                )
State of Utah                                   )
                                                )       ss.
County of Salt Lake                             )
                                                )
- ------------------------------------------------

          On this nineteenth day of December, 1997, before me personally
appeared Harris H. Simmons, to me known to be the President and Chief Executive
Officer of Zions Bancorporation, and acknowledged said instrument to be the free
and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed is the corporate seal of said corporation.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.



                                                --------------------------------
                                                         Notary Public

                                     - 50 -

<PAGE>



- ------------------------------------------------
                                                )
State of Colorado                               )
                                                )       ss.
County of Montezuma                             )
                                                )
- ------------------------------------------------

          On this nineteenth day of December, 1997, before me personally
appeared Wayne D. Glazner, to me known to be the President and Chief Executive
Officer of Val Cor Bancorporation, Inc., and R. Lance Michaels, to me known to
be the Executive Vice President and Chief Executive Officer of Valley National
Bank of Cortez, and acknowledged said instrument to be the free and voluntary
act and deed of each of said corporations, for the uses and purposes therein
mentioned, and on oath each stated that he was authorized to execute said
instrument and that the respective seals affixed are the respective corporate
seals of said corporations.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.




                                                --------------------------------
                                                          Notary Public

                                     - 51 -

<PAGE>






- ------------------------------------------------
                                                )
State of Colorado                               )
                                                )       ss.
County of El Paso                               )
                                                )
- ------------------------------------------------

          On this nineteenth day of December, 1997, before me personally
appeared John G. Jackson, to me known to be the Chairman, President and Chief
Executive Officer of SBT Bankshares, Inc. and the Chairman, President and Chief
Executive Officer of State Bank and Trust of Colorado Springs, 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



                                     - 52 -

<PAGE>



        The undersigned members of the Board of Directors of SBT Bankshares,
Inc. (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 State Bank
and Trust of Colorado Springs.




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



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



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



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



                                     - 53 -

<PAGE>





                                  SCHEDULE 1.8


                    Berg Family Limited Liability Corporation
                                  Buck Blessing
                                Leonard L. Buresh
                                Robert A. Cadigan
                                Craig D. Engelage
                                  Hal Hollister
                                 John G. Jackson
                              Ashton James Kalhorn
                                Randy R. Kilgore
                                 Gary L. Markle
                                Scott E. Pursley













<PAGE>


                                    EXHIBIT I

                        HOLDING COMPANY MERGER AGREEMENT


<PAGE>



                               AGREEMENT OF MERGER


          This Agreement of Merger is made and entered into as of
[__________________], 1997, between VAL COR BANCORPORATION, INC. ("Val Cor"), a
corporation organized under the laws of the State of Colorado, and SBT
BANKSHARES, INC. (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 December 19, 1997 (the "Plan of Reorganization"), setting
forth certain representations, warranties, and agreements in connection with the
transactions therein and herein contemplated, which contemplates the merger of
the Company with and into Val Cor (the "Merger") in accordance with this
Agreement of Merger (the "Agreement").

          The Boards of Directors of each of Val Cor and the Company deem the
Merger advisable and in the best interests of each corporation and its
stockholders. The Boards of Directors of each of Val Cor and the Company, by
resolutions duly adopted, have approved the Plan of Reorganization. The Boards
of Directors of each of Val Cor and the Company, by resolutions duly adopted,
have approved this Agreement. The Boards of Directors of each of Val Cor and the
Company have directed that this Agreement, and authorization for the
transactions contemplated hereby, be submitted to stockholders of Val Cor and
the Company respectively for approval.



<PAGE>



          At the Effective Date (as defined in Section 1.1 below) shares of
Company Common Stock shall be converted into the right to receive shares of the
common stock of Zions Bancorp, no par value (the "Zions Bancorp Stock"), as
provided herein.

          In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:


                                    ARTICLE I

          1.1. Merger of the Company into Val Cor. The Company shall be merged
with and into Val Cor on the date and at the time to be specified in the
Articles of Merger to be filed with the Secretary of State of the State of
Colorado pursuant to section 7-111-105 of the Colorado Business Corporation Act
(such date and time being referred to herein as the "Effective Date"), provided
that the necessary shareholder approvals have been received.

          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.

                                      - 2 -

<PAGE>



The Surviving Corporation expressly assumes and agrees to perform all of the
Company's liabilities and obligations. Neither the rights of creditors nor any
liens upon the property of either Constituent Corporation shall be impaired by
the Merger.

               (f) The Articles of Incorporation of Val Cor as they exist
immediately prior to the Effective Date shall be the Articles of Incorporation
of the Surviving Corporation until later amended pursuant to Colorado law.

               (g) At the Effective Date and until surrendered for exchange and
payment, each outstanding stock certificate which, prior to the Effective Date,
represents shares of Company Common Stock shall, without further action, cease
to be an issued and existing share and shall be converted into a right to
receive from Zions Bancorp, and shall for all purposes represent the right to
receive, upon surrender of the certificate representing such shares, the number
of shares of Zions Bancorp Stock specified in Article III; provided that, with
respect to any matters relating to stock certificates representing Company
Common Stock, Zions Bancorp may rely conclusively upon the record of
stockholders maintained by the Company containing the names and addresses of the
holders of record of the Company's Common Stock at the Effective Date.

          1.3. Acts to Carry Out This Merger Plan.

               (a) The Company and its proper officers and directors shall and
will do all such acts and things as may be necessary or proper to vest, perfect,
or confirm title to such property or rights in Val Cor and otherwise to carry
out the purposes of this Agreement.

               (b) If, at any time after the Effective Date, Val Cor shall
consider or be advised that any further assignments or assurances in law or any
other acts are necessary or desirable to (i) vest, perfect, or confirm, of
record or otherwise, in Val Cor its right, title, or interest in or under any of
the rights, properties, or assets of the Company acquired or to be acquired by
Val Cor as a result of, or in connection with, the Merger, or (ii) otherwise
carry out the purposes of this Agreement, the Company and its proper officers
and directors shall be deemed to have granted to Val Cor an irrevocable power of
attorney to execute and deliver all such proper deeds, assignments, and
assurances in law and to do all acts necessary or proper to vest, perfect, or
confirm title to and possession of such rights, properties, or assets in Val Cor
and otherwise to carry out the purposes of this Agreement; and the proper
officers and directors of Val Cor are fully authorized in the name of the
Company or otherwise to take any and all such action.


                                   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.


                                      - 3 -

<PAGE>





          2.2. Bylaws. The Bylaws of Val Cor as they exist immediately prior to
the Effective Date shall be the Bylaws of Val Cor until later amended pursuant
to Colorado law.


                                   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 Zions Bancorp Stock calculated by
dividing the product of the Consideration Number and the Collar Factor by the
sum of the number of shares of Company Common Stock that shall be issued and
outstanding at the Effective Date and the Option Equivalent Number.

               (b) As used in paragraph (a) of this section 3.1:

                   (i) the term "Consideration Number" means 625,000, except
that if the total shareholders equity of the Company at December 31, 1997,
determined in accordance with paragraph (c) of this section 3.1, shall be less
than $5,000,000, then the "Consideration Number" shall be the difference between
625,000 and the number calculated by dividing the difference between $5,000,000
and the total shareholders equity of the Company at December 31, 1997,
determined in accordance with paragraph (c) of this section 3.1, by $40.00;

                   (ii) if the average (rounded to the nearest penny) of the
last reported sale price or, if no such reported sale takes place, the mean
(unrounded) of the closing bid and asked prices of Zions Bancorp Stock in the
over-the-counter market as such prices are reported by the automated quotation
system of the National Association of Securities Dealers, Inc., or in the
absence thereof by such other source upon which Zions Bancorp and the Company
shall mutually agree, for each of the fifteen trading days ending on the fifth
trading day before the Effective Date (the "Average Closing Price") is:

                        (A) less than $34.00, the Collar Factor shall be a
fraction the numerator of which is $34.00 and the denominator of which is the
Average Closing Price;

                        (B) more than $46.00, the Collar Factor shall be a
fraction the numerator of which is $46.00 and the denominator of which is the
Average Closing Price; and

                        (C) not less than $34.00 and not more than $46.00, the
Collar Factor shall be One;


                                      - 4 -

<PAGE>



                   (iii) the term "Option Equivalent Number" means the number
reached by summing the following values as calculated for each option to
purchase one share of Company Common Stock which is outstanding and unexercised
at the Effective Date: (A) the difference between the Value-Per-Share Factor and
the exercise price of that option (or, if a greater number, zero) divided by (B)
the Value-Per-Share Factor; and

                   (iv) the term "Value-Per-Share Factor" means a number of
dollars and cents calculated by means of the following equation--

                   "Value-Per-Share Factor" = ( V + ( O x P )
                                              ---------------
                                                  ( O + S )

- --where:

                        (A) V equals the product of the Consideration Number,
the Collar Factor, and the Average Closing Price;

                        (B) O equals the number of shares of Company Common
Stock that are subject to a stock option (whether vested or unvested) to be
purchased, which option is outstanding and unexercised at the Effective Date;

                        (C) P equals the per-share average of the exercise
prices of all stock options (whether vested or unvested) to purchase shares of
Company Common Stock, which options are outstanding and unexercised at the
Effective Date; and

                        (D) S equals the number of shares of Company Common
Stock that shall be issued and outstanding at the Effective Date.

               (c) Total shareholders equity of the Company at December 31, 1997
shall be determined for purposes of paragraph (b) of this section 3.1 in
accordance with generally accepted accounting principles, except that:

                   (i) the credit to shareholders equity caused by any
undistributed gain, net of taxes, derived from activities or transactions which
are not in the ordinary course of its banking operations (such as, without
limitation, the sale of securities or loans, of capital assets, or of lines of
business, but excluding the sale of securities in connection with the ongoing
securities-sale program carried out by the Company or the Bank with Merrill
Lynch), all of which shall be determined in accordance with generally accepted
accounting principles, occurring between October 1, 1997 and December 31, 1997,
shall be excluded;


                                      - 5 -

<PAGE>



                   (ii) the unrealized gain or loss on available-for-sale
securities of the Company or the Bank, net of tax, which is recorded as an
adjustment to shareholders equity pursuant to Statement of Financial Accounting
Standards No. 115 shall be excluded; and

                   (iii) the expense, through the Effective Date, net of taxes,
of the investment bankers, consultants, brokers and finders who will have
rendered services to the Company or the Bank through the Effective Date (except
the services of attorneys and accountants rendering services in such capacities)
shall be recognized as an expense of the Company during the period between
October 1, 1997 and December 31, 1997, except to the extent that any of the same
shall have been recognized as an expense of the Company prior to September 30,
1997.

          3.2. No Fractional Shares. Zions Bancorp will not issue fractional
shares of its stock. In lieu of fractional shares of Zions Bancorp Stock, if
any, each shareholder of the Company who is entitled to a fractional share of
Zions Bancorp Stock shall receive an amount of cash equal to the product of such
fraction times $40.00. Such fractional share interest shall not include the
right to vote or to receive dividends or any interest thereon.

          3.3. Dividends; Interest. No shareholder of the Company will be
entitled to receive dividends on his or her Zions Bancorp Stock until he or she
exchanges his or her certificates representing Company Common Stock for Zions
Bancorp Stock. Any dividends declared on Zions Bancorp Stock (which stock is to
be delivered pursuant to this Agreement) to holders of record on or after the
Effective Date shall be paid to the Exchange Agent (as designated in Section 3.4
of this Agreement) and, upon receipt of the certificates representing shares of
Company Common Stock, the Exchange Agent shall forward to the former
shareholders entitled to receive Zions Bancorp Stock (i) certificates
representing their shares of Zions Bancorp Stock, (ii) dividends declared
thereon subsequent to the Effective Date (without interest) and (iii) the cash
value of any fractional shares determined in accordance with Section 3.2 hereof.

          3.4. Designation of Exchange Agent.

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

               (b) Zions Bancorp will, promptly after the Effective Date, issue
and deliver to Zions Bank the share certificates representing shares of Zions
Bancorp Stock and the cash to be paid to holders of Company Common Stock in
accordance with this Agreement.

          3.5. Notice of Exchange. Within five business days 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.


                                      - 6 -

<PAGE>



          3.6. Treatment of Stock Options. Each stock option (whether vested or
unvested) to purchase Company Common Stock not exercised prior to the Effective
Date shall automatically be converted into an option to purchase, on the same
terms as the option to purchase Company Common Stock, and with the same dates of
exercisability and of expiration, that number of shares of Zions Bancorp Stock
equal to the number of shares of Company Common Stock which the holder of such
option would be entitled to receive under Section 3.1 of this Agreement had such
option been exercised immediately preceding the Effective Date. The applicable
per-share option price in effect immediately prior to the Effective Date shall
be adjusted to an amount equal to the quotient obtained by dividing that option
price by the number of shares of Zions Bancorp Stock which the holder of one
share of Company Common Stock would be entitled to receive under Section 3.1 of
this Agreement.


                                   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 to be the proper jurisdiction and venue
for any suit or action arising out of this Agreement. Each of the parties
consents to personal jurisdiction in such venue 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. 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.


                                      - 7 -

<PAGE>



          4.4. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.

          4.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto, provided
that this Agreement may not be amended after the action by shareholders of the
Company in any respect that would prejudice the economic interests of such
Company shareholders, or any of them, except as specifically provided herein or
by like action of such shareholders.

          4.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of Val
Cor and the Company at any time prior to the Effective Date, and there shall be
no liability on the part of either of the parties hereto (or any of their
respective officers or directors) except to the extent provided in the Plan of
Reorganization.


          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                                VAL COR BANCORPORATION, INC.



Attest:                                         By:
       -----------------------                      ----------------------------
                                                         Wayne D. Glazner
                                                           President and
                                                       Chief Executive Officer



                                                SBT BANKSHARES, INC.



Attest:                                         By:
       -----------------------                      ----------------------------
                                                            John G. Jackson
                                                      Chairman, President and
                                                       Chief Executive Officer


                                      - 8 -

<PAGE>



- -----------------------------------------
                                         )
State of Colorado                        )
                                         )        ss.
County of Montezuma                      )
                                         )
- -----------------------------------------

          On this [__________] day of December, 1997, before me personally
appeared Wayne D. Glazner, to me known to be the President and Chief Executive
Officer of Val Cor Bancorporation, Inc., and acknowledged said instrument to be
the free and voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
said instrument and that the seal affixed is the corporate seal of said
corporation.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.




                                                --------------------------------
                                                          Notary Public



                                      - 9 -

<PAGE>



- -----------------------------------------
                                          )
State of Colorado                         )
                                          )        ss.
County of El Paso                         )
                                          )
- -----------------------------------------

          On this [_________] day of December, 1997, before me personally
appeared John G. Jackson, to me known to be the Chairman, President and Chief
Executive Officer of SBT Bankshares, 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


                                     - 10 -

<PAGE>



                                   EXHIBIT II

                          BANK CONSOLIDATION AGREEMENT




<PAGE>



                           AGREEMENT OF CONSOLIDATION


          This Agreement of Consolidation is made and entered into as of
[____________], 1998, between VALLEY NATIONAL BANK OF CORTEZ ("Valley"), a
national banking association organized under the laws of the United States, and
STATE BANK AND TRUST OF COLORADO SPRINGS (the "Bank"), a banking corporation
organized under the laws of the State of Colorado. Valley and the Bank are
hereinafter sometimes individually called a "Constituent Association" and
collectively called the "Constituent Associations."

                                    RECITALS

          Valley is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. As of
[____________], 1998, the authorized capital stock of Valley consisted of
600,000 shares of Common Stock, $5.00 par value ("Valley Common Stock"), of
which 354,000 shares were issued and outstanding; no shares of capital stock
were held in its treasury on such date.

          The Bank is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. As of [_____________], 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.

          Valley and the Bank have entered into an Agreement and Plan of
Reorganization, dated December 19, 1997 (the "Plan of Reorganization"), setting
forth certain representations, warranties, and agreements in connection with the
transactions therein and herein contemplated, which contemplates the
consolidation of the Bank with Valley into a new national banking association
(the "Consolidated Association") (the consolidation of the Bank and Valley into
the Consolidated Association hereinafter referred to as the "Bank
Consolidation") in accordance with this Agreement of Consolidation (the
"Agreement").

          The Boards of Directors of each of Valley and the Bank deem the
Consolidation advisable and in the best interests of each association and its
stockholders. The Boards of Directors of each of Valley and the Bank, by
resolutions duly adopted, have approved the Plan of Reorganization. The Boards
of Directors of each of Valley and the Bank, by resolutions duly adopted, have
approved this Agreement. The Boards of Directors of each of Valley and the Bank
have directed that this Agreement, and authorization for the transactions
contemplated hereby, be submitted to stockholders of Valley and the Bank
respectively for approval.


<PAGE>



          At the Effective Date (as defined in Section 1.1 below) shares of Bank
Common Stock and Valley Common Stock shall be converted into the right to
receive shares of the common stock of Consolidated Association, $5.00 par value
(the "Consolidated Association Common Stock"), as provided herein.

          In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:


                                    ARTICLE I

          1.1. Consolidation of the Bank with Valley. The Bank shall be
consolidated with Valley into the Consolidated Association the date and at the
time to be specified in the Articles of Consolidation 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"), provided that the
necessary shareholder approvals have been received.

          1.2.     Effect of the Merger.  At the Effective Date:

                   (a) The Bank and Valley shall be consolidated into a single
association, which shall be Consolidated Association under a new national bank
charter issued by the Comptroller of the Currency pursuant to the National Bank
Act

                   (b) The separate existence of the Bank and Valley shall
cease.

                   (c) The currently outstanding 354,000 shares of Valley Common
Stock shall be canceled and immediately converted into the right to receive,
subject to the terms and conditions set forth hereinafter, shares in the
Consolidated Association. Each holder of the shares of Valley Common Stock shall
be entitled to receive, in exchange for each share of Valley Common Stock held
of record by such shareholder as of the Effective Date, one share of
Consolidated Association Common Stock.

                   (d) The currently outstanding [_______] shares of Bank Common
Stock shall be canceled and immediately converted into the right to receive,
subject to the terms and conditions set forth hereinafter, shares in the
Consolidated Association. Each holder of shares of Bank Common Stock shall be
entitled to receive, in exchange for each share of Bank Common Stock held of
record by such stockholder as of the Effective Date, that number of shares of
Consolidated Association Common Stock calculated by, first, dividing the
tangible book value of Valley by the number of shares of Valley Common Stock
that shall be issued and outstanding at the Effective Date, and second, dividing
the tangible book value of the Bank by the number so reached, and third,
dividing the number so reached by the total number of shares of Bank Common
Stock that shall be issued and outstanding at the Effective Date.


                                   - 2 -

<PAGE>



                   (e) Consolidated Association will not issue fractional shares
of its stock. In lieu of fractional shares of Consolidated Association Common
Stock, if any, each shareholder of the Bank or of Valley who is entitled to a
fractional share of Consolidated Association Common Stock shall receive an
amount of cash equal to the product of such fraction times the tangible book
value per share of Valley Common Stock immediately preceding the Effective Date.
Such fractional share interest shall not include the right to vote or to receive
dividends or any interest thereon.

                   (f) The Consolidated Association shall have all the rights,
privileges, immunities, and powers and shall assume and be subject to all the
duties and liabilities of a national banking association organized under the
National Bank Act.

                   (g) The Consolidated 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 Consolidated 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 Consolidation.

                   (h) The Consolidated 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
Consolidation had not taken place, or the Consolidated Association may be
substituted in its place. The Consolidated Association expressly assumes and
agrees to perform all of the liabilities and obligations of the Consolidated
Association. Neither the rights of creditors nor any liens upon the property of
either Constituent Association shall be impaired by the Consolidation.

                   (i) The name of the Consolidated Association shall be
"[__________]."

                   (j) The business of the Consolidated Association shall be
conducted at its main office at [________] and at its legally established
branches.

                   (k) The authorized shares of capital stock of the
Consolidated Association shall be [_______] shares of Common Stock, $5.00 par
value.

                   (l) At and after the Effective Date, the Board of Directors
of the Consolidated Association will be composed of the following persons:


                                      - 3 -

<PAGE>


                            [______________________]
                            [______________________]
                            [______________________]
                            [______________________]
                            [______________________]
                            [______________________]
                            [______________________]
                            [______________________]

          The Board of Directors of the Consolidated Association as so
constituted shall serve until the next annual meeting or until such time as
their successors have been elected and have qualified.

          (m) At and after the Effective Date, the Articles of Association of
the Consolidated Association shall read in their entirety as set forth in
Attachment A hereto until later amended pursuant to the laws of the United
States and the provisions hereof.

          (n) At and after the Effective Date, the Bylaws of the Consolidated
Association shall read in their entirety as set forth in Attachment B hereto
until later amended pursuant to the laws of the United States and the provisions
thereof.

          1.3. Acts to Carry Out This Consolidation Plan.

               (a) The Bank and its proper officers and directors and Valley and
its proper officers and directors shall and will do all such acts and things as
may be necessary or proper to vest, perfect, or confirm title to such property
or rights in the Consolidated Association and otherwise to carry out the
purposes of this Agreement.


                                   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.


                                      - 4 -

<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 to be the proper jurisdiction and venue
for any suit or action arising out of this Agreement. Each of the parties
consents to personal jurisdiction in such venue 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. Each of the parties irrevocably and unconditionally waives and
agrees, to the fullest extent permitted by law, not to plead any objection that
it may now or hereafter have to the laying of venue or the convenience of the
forum of any action or claim with respect to this Agreement or the transactions
contemplated thereby brought in the courts aforesaid.

          2.4. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.

          2.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto.

          2.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of
Valley and the Bank at any time prior to the Effective Date, and there shall be
no liability on the part of either of the parties hereto (or any of their
respective officers or directors) except to the extent provided in the Plan of
Reorganization.


                                      - 5 -

<PAGE>



          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                                VALLEY NATIONAL BANK OF CORTEZ



Attest:                                         By:
       -------------------------                   -----------------------------
                                                         R. Lance Michaels
                                                    Executive Vice President and
                                                       Chief Executive Officer



                                                STATE BANK AND TRUST OF COLORADO
                                                SPRINGS



Attest:                                         By:
       -------------------------                   -----------------------------
                                                          John G. Jackson
                                                     Chairman, President and
                                                      Chief Executive Officer

                                      - 6 -

<PAGE>



- --------------------------------------------
                                            )
State of Colorado                           )
                                            )        ss.
County of Montezuma                         )
                                            )
- --------------------------------------------

          On this [____________] day of [____________], 1998, before me
personally appeared R. Lance Michaels, to me known to be the Executive Vice
President and Chief Executive Officer of Valley National Bank of Cortez, and
acknowledged said instrument to be the free and voluntary act and deed of said
association, for the uses and purposes therein mentioned, and on oath stated
that he was authorized to execute said instrument and that the seal affixed is
the corporate seal of said association.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.




                                                --------------------------------
                                                          Notary Public


                                      - 7 -

<PAGE>




- --------------------------------------------
                                            )
State of Colorado                           )
                                            )        ss.
County of El Paso                           )
                                            )
- --------------------------------------------

          On this [____________] day of [___________], 1998, before me
personally appeared John G. Jackson, to me known to be the Chairman, President
and Chief Executive Officer of State Bank and Trust of Colorado Springs, and
acknowledged said instrument to be the free and voluntary act and deed of said
association, for the uses and purposes therein mentioned, and on oath stated
that he was authorized to execute said instrument and that the seal affixed is
the corporate seal of said association.

          In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.





                                            ------------------------------------
                                                         Notary Public



                                      - 8 -

<PAGE>



                                                                    ATTACHMENT A

                             ARTICLES OF ASSOCIATION

                            [______________________]

                                Denver, Colorado


          For the purpose of organizing an association to carry on the business
of banking under the laws of the United States, the undersigned does enter into
the following Articles of Association:

          FIRST. The title of this association shall be [________________].

          SECOND. The main office of the association shall be in Denver, County
of Denver, State of Colorado. The general business of the association shall be
conducted at its main office and its branches.

          THIRD. The board of directors of this association shall consist of not
less than five nor more than twenty-five shareholders, the exact number to be
fixed and determined from time to time by resolution of a majority of the full
board of directors or by resolution of the shareholders at any annual or special
meeting thereof. Each director, during full term of his or her directorship,
shall own a minimum of $1,000 aggregate par value of stock of this association
or a minimum par market value or equity interest of $1,000 of stock in the bank
holding company controlling this association. Any vacancy in the board of
directors may be filled by action of the directors or the shareholders of the
association.

          FOURTH. There shall be an annual meeting of the shareholders to elect
directors and transact whatever other business may be brought before the
meeting. It shall be held at the main office or any other convenient place the
board of directors may designate, on the day of each year specified therefor in
the bylaws, but if no election is held on that day, it may be held on any
subsequent day according to such lawful rules as may be prescribed by the board
of directors.

          Nominations for election to the board of directors may be made by the
board of directors or by any stockholder of any outstanding class of capital
stock of the bank entitled to vote for election of directors. Nominations other
than those made by or on behalf of the existing bank management shall be made in
writing and be delivered or mailed to the president of the bank and to the
Comptroller of the Currency, Washington, D.C., not less than 14 days nor more
than 50 days prior to any meeting of stockholders called for the election of
directors, provided, however, that if less than 21 days notice of the meeting is
given to shareholders, such nomination shall be mailed or delivered to the
president of the bank and to the Comptroller of the Currency not later than the
close of business on the seventh day following the day on which the notice of
meeting was mailed. Such notification shall contain the following information to
the extent known to the notifying shareholder:




<PAGE>


          o        The name and address of each proposed nominee.

          o        The principal occupation of each proposed nominee.

          o        The total number of shares of capital stock of the bank that
                   will be voted for each proposed nominee.

          o        The name and residence address of the notifying shareholder.

          o        The number of shares of capital stock of the bank owned by
                   the notifying shareholder. Nominations not made in accordance
                   herewith may, in his/her discretion, be disregarded by the
                   chairperson of the meeting, and upon his/her instructions,
                   the vote tellers may disregard all votes cast for each such
                   nominee.

          FIFTH. The authorized amount of capital stock of this association
shall be [_________] shares of common stock of the par value of Five Dollars
($5.00) each; but said capital stock may be increased or decreased from time to
time, according to the provisions of the laws of the United States.

          No holder of shares of the capital stock of any class of the
association shall have any pre-emptive or preferential right of subscription to
any shares of any class of stock of the association, whether now or hereafter
authorized, or to any obligations convertible into stock of the association,
issued or sold, nor any right of subscription to any thereof other than such, if
any, as the board of directors, in its discretion, may from time to time
determine and at such price as the board of directors may from time to time fix.

          If the capital stock is increased by a stock dividend, each
shareholder shall be entitled to his proportionate amount of such increase in
accordance with the number of shares of capital stock owned by him at the time
the increase is authorized by the shareholders, unless another time subsequent
to the date of the shareholders' meeting is specified in a resolution adopted by
the shareholders at the time the increase is authorize.

          The association, at any time and from time to time, may authorize and
issue debt obligations, whether or not subordinated, without the approval of the
shareholders.

          SIXTH. The board of directors shall appoint one of its members
president of this association, who shall be chairperson of the board, unless the
board appoints another director to be the chairperson. The board of directors
shall have the power to appoint one or more vice chairpersons and vice
presidents; and to appoint a cashier and such other officers and employees as
may be required to transact the business of this association.

          The board of directors shall have the power to:

          o        Define the duties of the officers and employees of the
                   association.


                                      - 2 -

<PAGE>



          o         Fix the salaries to be paid to the officers and employees.

          o         Dismiss officers and employees.

          o         Require bond from officers and employees and to fix the
                    penalty thereof.

          o         Regulate the manner in which any increase of the capital of
                    the association shall be made.

          o         Manage and administer the business and affairs of the
                    association.

          o         Make all bylaws that it may be lawful for the board to make.

          o         Generally to perform all acts that are legal for a board of
                    directors to perform.

          SEVENTH. The board of directors shall have the power to change the
location of the main office to any other place within the limits of Denver,
Colorado, without the approval of the shareholders, and shall have the power to
establish or change the location of any branch or branches of the association to
any other location, without the approval of the shareholders.

          EIGHTH. The corporate existence of this association shall continue
until terminated according to the laws of the United States.

          NINTH. The board of directors of this association, or any one or more
shareholders owning, in the aggregate, not less than 25 percent of the stock of
this association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States or the bylaws of the
association, a notice of the time, place, and purpose of every annual and
special meeting of the shareholders shall be given by first-class mail, postage
prepaid, mailed at least 10 days prior to the date of the meeting to each
shareholder of record at his/her address as shown upon the books of this
association.

          TENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount.


                                      - 3 -

<PAGE>



          IN WITNESS WHEREOF, I have herewith set my hand this _______ day of
______, 1998.


                                            VAL COR BANCORPORATION, INC.


                                            By:
                                               ---------------------------------
                                                      Wayne D. Glazner
                                                        President and
                                                  Chief Executive Officer

ATTEST: ___________________________






                                      - 4 -


<PAGE>


                                                                  ATTACHMENT B


                                    BYLAWS OF

                             [____________________]



                                    ARTICLE I

                            MEETINGS OF SHAREHOLDERS

          Section 1.1. Annual Meeting. The regular annual meeting of the
shareholders to elect directors and transact whatever other business may
properly come before the meeting, shall be held at the main office of the
association, [ ], City of Denver, State of Colorado, or such other place as the
board of directors may designate, at 3:00 p.m. local time on the third Tuesday
in February of each year, or if that date falls on a legal holiday in the State
of Colorado, on the next following banking day or at such other time as may be
determined by the board of directors of the association. Notice of the meeting
shall be mailed, postage prepaid, at least 10 days and no more than 60 days
prior to the date thereof, addressed to each shareholder at his or her address
appearing on the books of the association, unless notice of the meeting is
waived by such shareholder. If, for any cause, an election of directors is not
made on that date, or in the event of a legal holiday, on the next following
banking day, the board of directors shall order the election to be held on some
subsequent date as soon thereafter as practicable, according to the provisions
of law; and notice thereof shall be given in the manner provided for the annual
meeting. If, for any cause, the directors fail to fix the date, shareholders
representing two thirds of the shares of the association may fix the date.

          Section 1.2. Special Meetings. Except as otherwise specifically
provided by statute, special meetings of the shareholders may be called for any
purpose at any time by the board of directors or by any one or more shareholders
owning, in the aggregate, not less than 25 percent of the stock of the
association. Every such special meeting, unless otherwise provided by law, shall
be called by mailing, postage prepaid, not less than 10 days prior to the date
fixed for the meeting, to each shareholder at the address appearing on the books
of the association a notice stating the purpose of the meeting, unless notice of
the meeting is waived by such shareholder.

          The board of directors may fix a record date for determining
shareholders entitled to notice and to vote at any meeting. The record date for
determining shareholders entitled to demand a special meeting is the date the
first shareholder signs a demand for the meeting describing the purpose or
purposes for which it is to be held.

          A special meeting may be called by the shareholders of the association
to amend the bylaws irrespective of whether the bylaws may be amended by the
board in the absence of shareholder approval.


<PAGE>



          Section 1.3. Nominations of Directors. Nominations for election to the
board of directors may be made by the board of directors or by any stockholder
of any outstanding class of capital stock of the association entitled to vote
for the election of directors. Nominations, other than those made by or on
behalf of the existing management of the association, shall be made in writing
and shall be delivered or mailed to the president of the association and to the
Comptroller of the Currency, Washington, D.C., not less than 14 days nor more
than 50 days prior to any meeting of shareholders called for the election of
directors, provided, however, that if less than 21 days' notice of the meeting
is given to shareholders, such nomination shall be mailed or delivered to the
president of the association and to the Comptroller of the Currency not later
than the close of business on the seventh day following the day on which the
notice of meeting was mailed. Such notification shall contain the following
information to the extent known to the notifying shareholder:

          (1) The name and address of each proposed nominee.

          (2) The principal occupation of each proposed nominee.

          (3) The total number of shares of capital stock of the association
              that will be voted for each proposed nominee.

          (4) The name and residence address of the notifying shareholder.

          (5) The number of shares of capital stock of the association owned by
              the notifying shareholder.

          Nominations not made in accordance wherewith may, in his or her
discretion, be disregarded by the chairman of the meeting, and upon his or her
instructions, the vote tellers may disregard all votes cast for each such
nominee.

          Section 1.4. Judges of Election. Every election of directors shall be
managed by three judges, who shall be appointed from among the shareholders by
the board of directors. The judges of election shall hold and conduct the
election at which they are appointed to serve. After the election, they shall
file with the cashier a certificate signed by them, certifying the result
thereof and the names of the directors elected. The judges of election, at the
request of the chairman of the meeting, shall act as tellers of any other vote
by ballot taken at such meeting, and shall certify the results thereof.

          Section 1.5. Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of this association shall act as proxy. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting. Proxies
shall be dated and filed with the records of the meeting. Proxies with rubber
stamped facsimile signatures may be used and unexecuted proxies may be counted
upon receipt of a confirming telegram from the shareholder. Proxies meeting the
above requirements submitted at any time during a meeting shall be accepted.

                                      - 2 -

<PAGE>



          Section 1.6. Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law, or by the shareholders or
directors pursuant to Section 9.2, but less than a quorum may adjourn any
meeting, from time to time, and the meeting may be held, as adjourned, without
further notice. A majority of the votes cast shall decide every question or
matter submitted to the shareholders at any meeting, unless otherwise provided
by law or by the articles of association, or by the shareholders or directors
pursuant to Section 9.2.

          Section 1.7. Action Without a Meeting. Any action permitted or
required to be taken at a meeting of the stockholders, or of a class of
stockholders, may be taken without a meeting, if a consent or consents in
writing setting forth the action so taken shall be signed by all of the
stockholders who would be entitled to vote at a meeting for such purpose and
shall be filed with the secretary of the association.

          Section 1.8. Bank Holding Company as Sole Shareholder. In the event
that all shares of the association are owned by a bank holding company, such
shareholder shall be deemed hereunder to waive the receipt of notice of the
annual meeting and any special meeting of shareholders of the association, or of
any adjournment thereof, otherwise required pursuant to Sections 1.1 and 1.2
hereof, respectively, without further action of any kind by such shareholder or
the association.


                                   ARTICLE II

                                    DIRECTORS

          Section 2.1. Board of Directors. The board of directors (hereinafter
referred to as the "board") shall have the power to manage and administer the
business and affairs of the association. Except as expressly limited by law, all
corporate powers of the association shall be vested in and may be exercised by
the board.

          Section 2.2. Number. The board shall consist of not less than five nor
more than 25 shareholders, the exact number within such minimum and maximum
limits to be fixed and determined from time to time by resolution of a majority
of the full board or by resolution of a majority of the shareholders at any
meeting thereof or by shareholder action in lieu thereof; provided, however,
that a majority of the full board of directors of the association may not
increase the number of directors to a number which (a) exceeds by more than two
the number of directors last elected by shareholders where such number was 15 or
less; and (b) exceeds by more than four the number of directors last elected by
shareholders where such number was 16 or more; but in no event shall the number
of directors exceed 25.

          Section 2.3. Organization Meeting. The secretary, upon receiving the
certificate of the judges of the result of any election, shall notify the
directors-elect of their election and of the time at which they are required to
meet at the main office of the association to organize the new board and elect
and appoint officers of the association for the succeeding year. Such meeting
shall be held

                                      - 3 -

<PAGE>



on the day of the election or as soon thereafter as practicable, and, in any
event, within 30 days thereof. If, at the time fixed for such meeting, there
shall not be a quorum, the directors present may adjourn the meeting, from time
to time, until a quorum is obtained.

          Section 2.4. Regular Meetings. The regular meetings of the board of
directors shall be held, without notice, on the third Tuesday of each month at
the main office or other such place as the board may designate. When any regular
meeting of the board falls upon a holiday, the meeting shall be held on the next
banking business day unless the board shall designate another day.

          Section 2.5. Special Meetings. Special meetings of the board of
directors may be called by the chairperson, any vice chairperson or the
president of the association, at the request of three or more directors or at
the request of one or more shareholders owning, in the aggregate, not less than
25 percent of the stock of the association. Each member of the board of
directors shall be given notice stating the time and place by telegram, letter,
facsimile or in person, of each special meeting.

          Section 2.6. Quorum. A majority of the director positions on the board
shall constitute a quorum at any meeting, except when otherwise provided by law,
or the bylaws, but a less number may adjourn any meeting, from time to time, and
the meeting may be held, as adjourned, without further notice. If the number of
directors is reduced below the number that would constitute a quorum, no
business may be transacted, except selecting directors to fill vacancies in
conformance with Section 2.7.

          If a quorum is present, the board of directors may take action through
the vote of a majority of the directors who are in attendance.

          Section 2.7. Vacancies. When any vacancy occurs among the directors, a
majority of the remaining members of the board, according to the laws of the
United States, may appoint a director to fill such vacancy at any regular
meeting of the board, or at a special meeting called for that purpose at which a
quorum is present, or if the directors remaining in office constitute fewer than
a quorum of the board, by the affirmative vote of a majority of all the
directors remaining in office, or by shareholders at a special meeting called
for that purpose, in conformance with Section 2.2 of this article, or by
shareholder action in lieu of such meeting. At any such shareholder meeting,
each shareholder entitled to vote shall have the right to multiply the number of
votes he or she is entitled to cast by the number of vacancies being filled and
cast the product for a single candidate or distribute the product among two or
more candidates.

          A vacancy that will occur at a specific later date (by reason of a
resignation effective at a later date) may be filled before the vacancy occurs
but the new director may not take office until the vacancy occurs.

          Section 2.8. Directors' Fees. Fees to be paid to members of the board
for attendance at regular and special meetings will be set by board resolution.


                                      - 4 -

<PAGE>



          Section 2.9. Director's Business with Association. In the interest of
complete objectivity during board deliberations, a director must absent himself
or herself when that director's business with the association is being discussed
and voted upon.

          Section 2.10. Term. The directors of the association shall hold office
for one year or until their successors are elected and have qualified.


                                   ARTICLE III

                             COMMITTEES OF THE BOARD

       Section 3.1. Appointment of Committees. The board of directors may
appoint, from time to time, from its own members, committees of one or more
persons, for such purposes and with such powers as the board may determine.
Provisions of the articles of association and bylaws governing place of meeting,
notice of meeting, quorum and voting requirements of the board of directors
apply to all committees approved by the board and their members. The board must
formally ratify written policies authorized by each committee appointed by it
before such policies may become effective.

          Notwithstanding the foregoing, a committee may not:

          (1) Authorize distributions of assets or dividends.

          (2) Approve action required to be approved by shareholders.

          (3) Fill vacancies on the board of directors or any of its committees.

          (4) Amend articles of association.

          (5) Adopt, amend or repeal bylaws.

          (6) Authorize or approve issuance or sale or contract for sale of
              shares, or determine the designation and relative rights,
              preferences and limitations of a class or series of shares.

          Section 3.2. Fees of Committee Members. Fees to be paid to members of
committees of the board for attendance at regular and special meetings will be
set by board resolution.



                                      - 5 -

<PAGE>



                                   ARTICLE IV

                             OFFICERS AND EMPLOYEES

          Section 4.1. Chairperson of the Board. The board of directors shall
appoint one of its members to be the chairperson of the board (the
"chairperson") to serve at its pleasure. Such person shall preside at all
meetings of the board of directors and of the shareholders. The chairperson
shall supervise the carrying out of the policies adopted or approved by the
board; shall have general executive powers, as well as the specific powers
conferred by these bylaws; and shall also have and may exercise such further
powers and duties as from time to time may be conferred upon, or assigned by the
board of directors.

          Section 4.2. Vice Chairperson of the Board. The board of directors
shall have the right to appoint one or more of its members to be vice
chairperson of the board (the "vice chairperson"), to serve at the pleasure of
the board. The vice chairperson shall preside at all meetings of the board and
the shareholders in the absence of the chairperson. The vice chairperson shall
also have and may exercise all powers and duties as from time to time may be
conferred upon or assigned to the vice chairperson by the board.

          Section 4.3. President. The board of directors shall appoint one of
its members to be the president of the association. In the absence of the
chairperson and the vice chairperson, the president shall preside at any meeting
of the board or the shareholders. The president shall have general executive
powers, and shall have and may exercise any and all other powers and duties
pertaining by law, regulation, or practice, to the office of president, or
imposed by these bylaws. The president shall also have and may exercise such
further powers and duties as from time to time may be conferred, or assigned by
the board of directors.

          Section 4.4. Executive Vice Presidents. The board may appoint one or
more executive vice presidents. The executive vice presidents shall have and
exercise such duties as may be delegated or conferred by the board of directors,
and one of them may be designated by the board to exercise the duties of the
president in the event of the absence and unavailability of the president.

          Section 4.5. Senior Vice Presidents. The board of directors may
appoint one or more senior vice presidents. Each senior vice president shall
have such powers and duties as may be assigned by the board of directors, the
chairperson, any vice chairperson or the president.

          Section 4.6. Vice Presidents. The board of directors may appoint one
or more vice presidents. Each vice president shall have such powers and duties
as may be assigned to the vice president by the board or the chairperson, any
vice chairperson, president or any executive vice president.

          Section 4.7. Secretary. The board of directors shall appoint a
secretary or other designated officer who shall be secretary of the board and of
the association, and shall keep accurate minutes of all meetings. The secretary
shall attend to the giving of all notices required by these bylaws; shall

                                      - 6 -

<PAGE>



be custodian of the corporate seal, records, documents and papers of the
association; shall provide for the keeping of proper records of all transactions
of the association; shall have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the office of secretary, or
imposed by these bylaws; and shall also perform such other duties as may be
assigned from time to time, by the board.

          Section 4.8. Other Officers. The board of directors may appoint one or
more cashiers, controllers, second vice presidents, assistant vice presidents,
trust officers, assistant secretaries, assistant cashiers, assistant
controllers, managers and assistant managers of branches and such other officers
and attorneys-in-fact as from time to time may appear to the board to be
required or desirable to transact the business of the association. Such officers
shall respectively exercise such powers and perform such duties as pertain to
their several offices, or as may be conferred upon, or assigned to, them by the
board of directors, the chairperson, any vice chairperson, the president or any
executive vice president. The board may authorize an officer to appoint one or
more officers or assistant officers.

          Section 4.9. Holding of More Than One Office. Any person may hold more
than one office, except that the office of president and the office of secretary
may not be held by the same person.

          Section 4.10. Tenure of Office. The president and all other officers
shall hold office for the current year for which the board was elected, unless
they shall resign, become disqualified, or be removed; and any vacancy occurring
in the office of president shall be filled promptly by the board of directors.

          Section 4.11. Resignation. An officer may resign at any time by
delivering notice to the association. A resignation is effective when the notice
is given unless the notice specifies a later effective date.

          Section 4.12. Clerks and Agents. The board empowers the president and
such officers as the president may designate to appoint paying tellers,
receiving tellers, note tellers, vault custodians, bookkeepers and other clerks,
agents and employees as they may deem advisable for the prompt and orderly
transaction of the business of the association, and to define their duties,
conditions of employment, fix salaries to be paid and dismiss them.


                                    ARTICLE V

                                TRUST DEPARTMENT

          Section 5.1. Trust Department. There shall be a department of the
association known as the Trust Department which shall perform the fiduciary
responsibilities of the association.

          Section 5.2. Trust Officer. There shall be a trust officer of this
association whose duties shall be to manage, supervise and direct all fiduciary
activities. Such persons shall do or cause to

                                      - 7 -

<PAGE>



be done all things necessary or proper in carrying on the fiduciary business of
the association according to provisions of law and applicable regulations; and
shall act pursuant to opinion of counsel where such opinion is deemed necessary.
Opinions of counsel shall be retained on file in connection with all important
matters pertaining to fiduciary activities. The trust officer shall be
responsible for all assets and documents held by the association in connection
with fiduciary matters.

          The board of directors may appoint other trust officers as it may deem
necessary, with such duties as may be assigned.

          Section 5.3. Trust Audit and Investment Committee. There shall be a
trust audit and investment committee of this association composed of three or
more members, exclusive of any active officers of the association, who shall be
capable and experienced directors or officers of the association.

          (a) Audits. The trust audit and investment committee shall, at least
once during each calendar year and within fifteen months of the last such audit
make suitable audits of the association's fiduciary activities or cause suitable
audits to be made by auditors responsible only to the board of directors, and at
such time shall ascertain whether fiduciary powers have been administered
according to law, Part 9 of the Regulations of the Comptroller of the Currency,
and sound fiduciary principles.

          (b) Investments. All investments of funds held in a fiduciary capacity
shall be made, retained or disposed of only with the approval of the trust audit
and investment committee, and the committee shall keep minutes of all its
meetings, showing the disposition of all matters considered and passed upon by
it. The committee shall, promptly after the acceptance of an account for which
the association has investment responsibilities, review the assets thereof, to
determine the advisability of retaining or disposing of such assets. The
committee shall conduct a similar review at least once during each calendar year
thereafter and within fifteen months of the last such review. A report of all
such reviews, together with the action taken as a result thereof, shall be noted
in the minutes of the committee.

          Section 5.4. Trust Department Files. There shall be maintained by the
association all fiduciary records necessary to assure that its fiduciary
responsibilities have been properly undertaken and discharged.

          Section 5.5. Trust Investments. Funds held in a fiduciary capacity
shall be invested according to the instrument establishing the fiduciary
relationship and local law. Where such instrument does not specify the character
and class of investments to be made and does not vest in the association a
discretion in the matter, funds held pursuant to such instrument shall be
invested in investments in which corporate fiduciaries may invest under local
law.



                                      - 8 -

<PAGE>



                                   ARTICLE VI

                          STOCK AND STOCK CERTIFICATES

          Section 6.1. Transfers. Shares of stock shall be transferable on the
books of the association, and a transfer book shall be kept in which all
transfers of stock shall be recorded. Every person becoming a shareholder by
such transfer shall in proportion to his or her shares, succeed to all rights of
the prior holder of such shares. The board of directors may impose conditions
upon the transfer of the stock reasonably calculated to simplify the work of the
association with respect to stock transfers, voting at shareholder meetings, and
related matters and to protect it against fraudulent transfers.

          Section 6.2. Stock Certificates. Certificates of stock shall bear the
signature of the president (which may be engraved, printed or impressed), and
shall be signed manually or by facsimile process by the secretary, assistant
secretary, cashier, assistant cashier, or any other officer appointed by the
board of directors for that purpose, to be known as an authorized officer, and
the seal of the association shall be engraved thereon. Each certificate shall
recite on its face that the stock represented thereby is transferable only upon
the books of the association properly endorsed.

          The board of directors may adopt or use procedures for replacing lost,
stolen, or destroyed stock certificates as permitted by law.


                                   ARTICLE VII

                                 CORPORATE SEAL

          The president, the secretary or any assistant secretary, or other
officer thereunto designated by the board of directors, shall have authority to
affix the corporate seal to any document requiring such seal, and to attest the
same. Such seal shall be substantially in the following form:

                                  (impression)
                                     ( of )
                                    ( Seal )


                                  ARTICLE VIII

                            MISCELLANEOUS PROVISIONS

          Section 8.1. Fiscal Year. The fiscal year of the association shall be
the calendar year.

          Section 8.2. Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions,


                                      - 9 -

<PAGE>



settlements, petitions, schedules, accounts, affidavits, bonds, undertakings,
proxies and other instruments or documents may be signed, executed,
acknowledged, verified, delivered or accepted on behalf of the association by
the chairperson, any vice chairperson, the president, any executive vice
president, senior vice president or vice president or the secretary, or the
cashier, or, if in connection with exercise of fiduciary powers of the
association, by any of those officers or by any trust officer. Any such
instruments may also be executed, acknowledged, verified, delivered or accepted
on behalf of the association in such other manner and by such other officers as
the board of directors may from time to time direct. The provisions of this
section 8.2 are supplementary to any other provision of these bylaws.

          Section 8.3. Records. The articles of association, the bylaws and the
proceedings of all meetings of the shareholders, the board of directors, and
standing committees of the board, shall be recorded in appropriate minute books
provided for that purpose. The minutes of each meeting shall be signed by the
secretary or other officer appointed to act as secretary of the meeting.

          Section 8.4. Banking Hours. The main office of the association and the
branches will be open during hours designated by the board of directors. The
main office and all branches will be closed on Sundays and days recognized by
the State of Colorado and by the laws of the United States as legal holidays.

          Section 8.5. Payment of Ransom. Any funds paid to accomplish the
release, whether or not achieved, of a director, officer or other employee of
the association (or any subsidiary of the association) or any member of his or
her family as the result of a ransom demand, shall be considered as an expense
to the association in its efforts to safeguard the lives of any director,
officer or other employee which the association considers to be its obligation.
In no way shall such funds so paid be considered as remuneration to the person
so ransomed, nor to the person receiving the ransom demand.

          Section 8.6. Law to Govern Corporate Procedure. The corporate
procedures to be followed by the association shall be those prescribed in the
Utah Business Corporation Act, Utah Code Ann. ss. 16-10a-101, et seq., or in any
successor provision of law (the "Utah Business Corporation Act") except to the
extent inconsistent with the federal banking laws of the United States or the
regulations or legal interpretations of the Comptroller of the Currency adopted
thereunder. To the extent of any inconsistency between any provision of these
bylaws and any provision of the Utah Business Corporation Act, the relevant
provision of that act shall govern.

          Section 8.7. Indemnification of Directors, Officers, Employees and
Agents. The directors, officers, employees and agents of the association shall
be indemnified to the fullest extent permitted, and within the parameters
established, by the Utah Business Corporation Act, as such rights may be limited
or restricted by Section 18(k) of the Federal Deposit Insurance Act or any
successor provision of law, or by the regulations and legal interpretations
adopted by the Federal Deposit Insurance Corporation thereunder.



                                     - 10 -

<PAGE>



                                   ARTICLE IX

                                     BYLAWS

          Section 9.1. Inspection. A copy of the bylaws, with all amendments,
shall at all times be kept in a convenient place at the main office of the
association, and shall be open for inspection to all shareholders during banking
hours.

          Section 9.2. Amendments. The bylaws may be amended, altered or
repealed, at any regular meeting of the board of directors, by a vote of a
majority of the total number of the directors except as provided below. The
association's shareholders may amend or repeal the bylaws even though the bylaws
also may be amended or repealed by its board of directors.



          I, ________________, certify that: (1) I am the duly constituted
secretary of [_____________], and secretary of its board of directors, and as
such officer am the official custodian of its records; (2) the foregoing bylaws
are the bylaws of the association, and all of them are now lawfully in force and
effect.

          I have hereunto affixed my official signature and the seal of the
association, in the City of Denver, State of Colorado, on this _____________ day
of ______________, 1998.


                                                        ________________________


                                     - 11 -

<PAGE>



                                   EXHIBIT III

                                VOTING AGREEMENT




<PAGE>


                                December 19, 1997



Zions Bancorporation
One South Main Street, Suite 1380
Salt Lake City, Utah  84111

Mesdames and Gentlemen:

          The undersigned understands that Zions Bancorporation ("Zions
Bancorp") is about to enter into an Agreement and Plan of Reorganization with
SBT Bankshares, Inc. (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
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:

          (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



<PAGE>


Zions Bancorporation
December 19, 1997
Page 2



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 State Bank and
Trust of Colorado Springs, from acting, in his or her capacity as a director, as
the undersigned may determine to be appropriate in light of the obligations of
the undersigned as a director. It is further understood and agreed that the term
"Shares" shall not include any securities beneficially owned by the undersigned
as a trustee or fiduciary for another (unless such other person is affiliated
with the undersigned or is bound by an agreement with Zions Bancorp
substantially 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,



                                            ________________________________
<PAGE>


Zions Bancorporation
December 19, 1997
Page 3



Accepted and Agreed to:
ZIONS BANCORPORATION


By:___________________________

Title:________________________



<PAGE>


Zions Bancorporation
December 19, 1997
Page 4




Name of Shareholder:


                 Shares of Common Stock of SBT Bankshares, Inc.
                               Beneficially Owned
                             As of December 19, 1997


<TABLE>
<CAPTION>
  Name(s) of                                                                       Number of
Record Owner(s)                        Beneficial Ownership 1/                      Shares
- ---------------                        -----------------------                      ------
<S>                                         <C>                                      <C>








</TABLE>


- ----------
     1/ For purposes of this Agreement, shares are beneficially owned by the
shareholder named above if held in any capacity other than a fiduciary capacity
(other than a revocable living trust and other than a fiduciary capacity on
behalf of a person who is affiliated with the shareholder or is bound by an
agreement with Zions Bancorp substantially similar to this agreement) and if the
shareholder named above has the power (alone or, in the case of shares held
jointly with his or her spouse, together with his or her spouse) to direct the
voting of such shares.


<PAGE>



                                   EXHIBIT IV

                          FORM OF OFFICER'S CERTIFICATE


<PAGE>



                                   CERTIFICATE
                       PURSUANT TO SECTION [4.2] [5.2] OF
                      AGREEMENT AND PLAN OF REORGANIZATION


          The undersigned, [____________], [________] of [_______________],
pursuant to Section [ ] of the Agreement and Plan of Reorganization, dated as of
December 19, 1997, by and among Zions Bancorporation, Val Cor Bancorporation,
Inc., Valley National Bank of Cortez, SBT Bankshares, Inc., and State Bank and
Trust of Colorado Springs (the "Agreement"), does hereby certify that as of the
date hereof:

          (a) Subject to paragraph (b) below, all representations and warranties
of [_________________] contained in the Agreement are true and correct in all
material respects as though made or given as of the date hereof.

          (b) All representations and warranties of [_____________] which
specifically relate to an earlier date were true and correct in all material
respects as of such earlier date.

          (c) All covenants and obligations to be performed or met by
[____________] on or prior to the date hereof have been performed or met.

          IN WITNESS WHEREOF, the undersigned officer of [______________] has
hereunto set his hand as of the [_______]th day of [_____________], 1998.


<PAGE>



                                    EXHIBIT V

                       OPINION OF McKENNA & CUNEO, L.L.P.


<PAGE>



                           [__________________], 1998


Zions Bancorporation
One South Main Street, Suite 1380
Salt Lake City, Utah  84111

Val Cor Bancorporation, Inc.
350 West Montezuma Avenue
Cortez, Colorado  81321-2750

Valley National Bank of Cortez
350 West Montezuma Avenue
Cortez, Colorado  81321-2750

       Re:  Merger of SBT Bankshares, Inc. With Val Cor Bancorporation, Inc., In
            Exchange for Stock of Zions Bancorporation; Consolidation of State
            Bank and Trust of Colorado Springs With Valley National Bank of
            Cortez

Mesdames and Gentlemen:

          We are special counsel to SBT Bankshares, Inc., a Colorado corporation
(the "Company"), and its subsidiary, State Bank and Trust of Colorado Springs, a
banking corporation organized under the laws of the State of Colorado with its
head office located at Colorado Springs, County of El Paso, State of Colorado
(the "Bank"), in connection with the merger (the "Holding Company Merger") of
the Company with Val Cor Bancorporation, Inc. ("Val Cor"), in exchange for which
shareholders of the Company will receive shares of the common stock of Zions
Bancorporation ("Zions Bancorp") and cash, and the consolidation (the "Bank
Consolidation") of the Bank with Valley National Bank of Cortez ("Valley"),
pursuant to an Agreement and Plan of Reorganization dated December 19, 1997 (the
"Agreement") and certain additional agreements whose execution is contemplated
in the Agreement, including the Agreement of Consolidation by and between Val
Cor



<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[_______________], 1998
Page 2



and the Company (the "Holding Company Merger Agreement") and the Agreement of
Consolidation by and between the Bank and Valley (the "Bank Consolidation
Agreement") (the Agreement, the Holding Company Merger Agreement, and the Bank
Consolidation Agreement to be referred to collectively as the "Agreements").

          This opinion is provided to you pursuant to Section 4.3 of the
Agreement.

          In our capacity as special counsel, we have participated in the
preparation of a Registration Statement filed with the Securities and Exchange
Commission on Form S-4 covering the shares of Zions Bancorp stock to be issued
in connection with the Holding Company Merger (the "Registration Statement")
including the Prospectus/Proxy Statement for the shareholders of the Company
(the "Prospectus/Proxy Statement"). In addition, in rendering the opinions that
follow, we have examined the Agreements and the exhibits and schedules appended
thereto; the articles of incorporation and bylaws of the Company and the
articles of incorporation or association and bylaws of the Bank; the minutes of
certain meetings of the respective boards of directors of the Company and the
Bank; and such other corporate documents and corporate records of the Company
and the Bank as we have deemed necessary or appropriate for the purpose of
rendering the following opinions. In addition, we have interviewed officers of
the Company and the Bank and undertaken and performed such other procedures as
we have deemed necessary or appropriate for the purpose of rendering the
following opinions. In these regards, we have examined and relied upon
representations of Zions Bancorp, Val Cor, and Valley contained in the
Agreements, and, where we have deemed appropriate, representations or
certifications of officers or public officials.

          We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties, other than (a) the Company, (b) the Bank, and (c) those persons or
entities waiving rights pursuant to the waivers of preemptive rights delivered
to Zions Bancorp pursuant to Section 4.13 of the Agreement (the "Waiving
Shareholders") who are not natural persons, had the corporate power and
authority to enter into and perform all obligations thereunder and, as to all
parties other than the Company and the Bank and the Waiving Shareholders, we
have also assumed the execution and delivery of such documents and the validity
and binding effect and enforceability thereof. We have also assumed that the
Agreements have not been otherwise amended by oral or written agreement or by
conduct of the parties thereto. We have assumed that the certifications and
representations dated earlier than the date hereof on which we have expressed
reliance herein continue to remain accurate, insofar as material to our
opinions, from such earlier date through the date hereof. To the extent that the
opinions set forth herein address matters which


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[___________________], 1998
Page 3



are governed by the law of any jurisdiction other than the state of Colorado, we
have assumed that the law of such jurisdiction is identical to that of Colorado,
including federal law applicable within Colorado.

          Based on the foregoing, and solely in reliance thereon, we are of the
opinion that:

          (a)      Organization, Powers and Qualifications.

                   (i) The Company is a corporation which is duly organized,
validly existing and in good standing under the laws of the State of Colorado
and has all requisite corporate power and authority to own and operate its
properties and assets, to lease properties used in its business, and to carry on
its business as now conducted. The Company is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended. All outstanding
shares of capital stock of the Company have been duly and validly authorized and
issued, and are fully paid and non-assessable.

                   (ii) The Bank is duly organized, validly existing and in good
standing under the laws of the State of Colorado and has all requisite corporate
power and authority to own and operate its properties and assets, to lease
properties used in its business, and to carry on its business as now conducted.
The deposit accounts of the Bank are insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation (the "FDIC") and, to the best of our
knowledge, no proceedings for the termination of such insurance are pending or
threatened. All outstanding shares of capital stock of the Bank have been duly
and validly authorized and issued and are fully paid and non-assessable. All
issued and outstanding shares of the Bank are held of record by the Company
directly, free and clear of any adverse claims.

          (b) Execution and Performance of Agreements. Each of the Company and
the Bank has the corporate power and authority to execute, deliver, and perform
each of the Agreements to which it is a party and to carry out the terms thereof
and the transactions contemplated thereby.

          (c) Absence of Violations. To the best of our knowledge, neither the
Company nor the Bank is in violation of its articles of incorporation or its
bylaws, or any law, regulation, ordinance, order, or restriction imposed by the
United States, any state, municipality, or other political subdivision or agency
thereof, or any order of any court or other competent tribunal having
jurisdiction over it in respect of the conduct of its business or the ownership
of its properties, which, either individually or in the aggregate with all such
other violations, would materially and adversely affect the business,
operations, or condition (financial or otherwise) of the Company or the Bank or
the


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[___________________], 1998
Page 4



observance or performance by the Company or the Bank of the terms of any of the
Agreements to which it is a party.

          (d) Compliance with Corporate Documents and Agreements. Neither the
execution, delivery, or performance by either the Company or the Bank of any of
the Agreements to which it is a party nor the consummation of the transactions
contemplated therein will violate, conflict with, constitute a breach of or
default under the respective articles of incorporation or bylaws of the Company
or the Bank, or any agreement or instrument to which the Company or the Bank is
a party (or which is binding on either of them or its assets) or by which the
Company or the Bank is bound, and will not result in the creation of any lien
on, or security interest in, any of the assets of either of them.

          (e) Binding Obligations; Due Authorization. Each of the Agreements to
which it is a party has been duly authorized by all necessary corporate action
on the part of each of the Company and the Bank, has been duly executed and
delivered by each of the Company and the Bank, and constitutes a valid, legal,
and binding obligation of the Company and the Bank, enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, receivership, conservatorship, or
similar laws or judicial decisions relating to or affecting creditors' rights
generally or the rights of creditors, or of the FDIC as insurer, regulator,
conservator, or receiver, of banks the accounts of which are insured by the FDIC
in particular, or by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law) as to whose
availability we express no opinion. No other corporate proceedings on the part
of either the Company or the Bank are necessary to authorize any of the
Agreements to which it is a party or the carrying out of the transactions
contemplated thereby.

          (f) Absence of Default. Except for those consents (including, but not
limited to, approvals, licenses, registrations, or declarations) that have been
obtained, the execution and delivery by the Company and the Bank of each of the
Agreements to which it is a party and consummation of the transactions
contemplated thereby do not require the approval or consent of any governmental
authority or third party. The execution and delivery by the Company and the Bank
of each of the Agreements to which it is a party, the consummation of the
transactions contemplated thereby, and the compliance with and fulfillment of
the terms thereof by the Company and the Bank will not require any
authorization, consent, approval, or exemption by any person which has not been
obtained or any notice or filing which has not been given or done.


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[___________________], 1998
Page 5



          (g) Preemptive Rights. Each of the waivers of preemptive rights
delivered to Zions Bancorp pursuant to Section 4.13 of the Agreement (the
"Waivers") by Waiving Shareholders other than natural persons has been duly
authorized by all necessary corporate or other action on the part of each such
Waiving Shareholder. Each of the Waivers has been duly executed and delivered by
the respective Waiving Shareholder and constitutes a valid, legal, and binding
obligation of the respective Waiving Shareholder, enforceable against him, her,
or it in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship, or similar laws or judicial decisions relating to or affecting
creditors' rights generally or by general equitable principles (regardless of
whether enforceability is considered in a proceeding in equity or at law) as to
whose availability we express no opinion. No other corporate or other
proceedings on the part of any Waiving Shareholder that is not a natural person
are necessary to authorize any Waiver to which it is a signatory.

          (h) Compliance with Securities Laws. The Prospectus/Proxy Statement
complies on its face as to form in all material respects with the requirements
of the federal securities laws and published rules and regulations of the
Securities and Exchange Commission as of the date thereof.

          With respect to that opinion designated "(c)" above, our knowledge of
the matters therein addressed is limited to that derived from conversations with
such officers of the Company and the Bank as we have deemed appropriate and our
examination of the articles of incorporation and bylaws of the Company and the
Bank, Reports of Examination of the Company and the Bank by the Federal Reserve
Board dated [________] and [___________] respectively, the Report of Examination
of the Bank by the Division of Financial Institutions of the State of Colorado
dated [____________], all legal and compliance files of the Company and the
Bank, reports by independent accountants for the Company and the Bank since
December 31, 1995 (as identified by officers of the Company and/or the Bank),
and records of pending litigation in the United States District Court for the
District of Colorado and in the District Court for the County of El Paso, State
of Colorado. The opinions expressed herein with respect to these matters should
not be construed as representing or implying that our knowledge or our opinions
based thereon, extend to any matters outside the scope of examination
specifically identified above.

          In connection with our participation in the preparation of the
Prospectus/Proxy Statement, we have not independently verified the accuracy,
completeness, or fairness of the statements contained therein or of documents
incorporated by reference therein, and we make no representation to you as to
the accuracy or completeness of statements of fact contained or incorporated by


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[___________________], 1998
Page 6



reference in the Prospectus/Proxy Statement or the Registration Statement.
Nothing, however, has come to our attention that would lead us to believe that
the Prospectus/Proxy Statement as of its issue date or the date hereof, or the
Registration Statement as of the effective date or the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than the
financial statements and schedules and other financial and statistical data
included or incorporated by reference therein, as to which we make no statement)
or that any event has occurred which should have been set forth in an amendment
or supplement to the Prospectus/Proxy Statement or Registration Statement which
has not been set forth in such amendment or supplement.

          This opinion is given solely for your benefit in connection with the
transactions contemplated by the Agreements, and no other person or entity is
entitled to rely thereon, nor may copies be delivered or furnished to any other
party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior consent.

                                                       Respectfully submitted,


<PAGE>



                                   EXHIBIT VI

                 OPINION OF COMPANY AND BANK LITIGATION COUNSEL





<PAGE>


                             [______________], 1998



Zions Bancorporation
One South Main Street, Suite 1380
Salt Lake City, Utah  84111

Val Cor Bancorporation, Inc.
350 West Montezuma Avenue
Cortez, Colorado  81321-2750

Valley National Bank of Cortez
350 West Montezuma Avenue
Cortez, Colorado  81321-2750

      Re:  Merger of SBT Bankshares, Inc. With Val Cor Bancorporation, Inc.,
           In Exchange for Stock of Zions Bancorporation

Mesdames and Gentlemen:

          We are special counsel to SBT Bankshares, Inc., a Colorado corporation
(the "Company"), and its subsidiary, State Bank and Trust of Colorado Springs, a
banking corporation organized under the laws of the State of Colorado with its
head office located at Colorado Springs, County of El Paso, State of Colorado
(the "Bank"), in connection with the merger (the "Holding Company Merger") of
the Company with Val Cor Bancorporation, Inc. ("Val Cor"), in exchange for which
shareholders of the Company will receive shares of the common stock of Zions
Bancorporation ("Zions Bancorp") and cash, and the consolidation (the "Bank
Consolidation") of the Bank with Valley National Bank of Cortez ("Valley"),
pursuant to an Agreement and Plan of Reorganization dated December 19, 1997 (the
"Agreement") and certain additional agreements whose execution is contemplated
in the Agreement, including the Agreement of Consolidation by and between Val
Cor


<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[___________________], 1998
Page 2



and the Company (the "Holding Company Merger Agreement") and the Agreement of
Consolidation by and between the Bank and Valley (the "Bank Consolidation
Agreement") (the Agreement, the Holding Company Merger Agreement, and the Bank
Consolidation Agreement to be referred to collectively as the "Agreements"). We
have been requested by the Company and the Bank to furnish to you our opinion
pursuant to Section 4.4 of the Agreement.

          In rendering the opinion that follows, we have examined the Agreements
and such other documents and records as we have deemed necessary or appropriate
for the purpose of rendering the following opinion. In addition, we have
interviewed officers of the Company and the Bank and undertaken and performed
such other procedures as we have deemed necessary or appropriate for the purpose
of rendering the following opinion. In these regards, we have examined and
relied upon representations of Zions Bancorp, Val Cor, and Valley contained in
the Agreements, and, where we have deemed appropriate, representations or
certifications of officers or public officials.

          We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. We have also assumed that the Agreements have not been otherwise amended
by oral or written agreement or by conduct of the parties thereto. We have
assumed that the certifications and representations dated earlier than the date
hereof on which we have expressed reliance herein continue to remain accurate,
insofar as material to our opinions, from such earlier date through the date
hereof.

          Based on the foregoing, and solely in reliance thereon, we are of the
opinion that: (a) there is no action, suit, or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or threatened,
against the Company or the Bank which might result in any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs, or business prospects of the Company or the Bank, or which might
materially and adversely affect the properties or assets thereof or which might
prevent, hinder or delay the consummation of the transactions contemplated in
the Agreements; and (b) all pending legal or governmental proceedings to which
the Company or the Bank is a party or to which any of its property or assets is
the subject, including ordinary routine litigation incidental to its business,
are, considered in the aggregate, not material.



<PAGE>


Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Cortez
[___________________], 1998
Page 3



          This opinion is given solely for your benefit in connection with the
transactions contemplated by the Agreements, and no other person or entity is
entitled to rely thereon, nor may copies be delivered or furnished to any other
party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior consent.

                                             Respectfully submitted,


<PAGE>



                                   EXHIBIT VII

                              EMPLOYMENT AGREEMENT


<PAGE>



                              EMPLOYMENT AGREEMENT


          This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this [______________] day of [______________________], 1998, by and between JOHN
G. JACKSON ("Executive") and [__________________________________], a national
banking association organized under the laws of the United States
("[_____________________]").

                        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 December 19, 1997 by and among Zions Bancorporation, a Utah corporation
having its principal office in Salt Lake City, Utah, Val Cor Bancorporation,
Inc., a Colorado corporation having its principal office in Cortez, Colorado,
Valley National Bank of Cortez, a national banking association organized under
the laws of the United States, SBT Bankshares, Inc., a Colorado corporation
having its principal office in Colorado Springs, Colorado, and State Bank and
Trust of Colorado Springs, a banking corporation organized under the laws of the
State of Colorado (the "Bank"), provides that the Bank will be consolidated with
[____________] to form a new national banking association ("Consolidated
Association");

          WHEREAS, Executive is Chairman, President and Chief Executive Officer
of the Bank;

          WHEREAS, Consolidated Association 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) Consolidated Association hereby agrees to employ Executive, and
Executive hereby agrees to serve as [_____________] of Consolidated Association
and of any depository institution which is successor-in-interest thereto
("Consolidated Association" 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 Consolidated Association on the date of this Agreement or as may
otherwise be determined by Consolidated Association.



<PAGE>



          (b) Executive shall devote his full working time and best efforts to
the performance of his responsibilities and duties hereunder and to the
retention of the customer relationships to which the Bank has been a party prior
to the date of this Agreement. During the Term of Employment, Executive shall
not, without the prior written consent of the Board of Directors of Consolidated
Association, render services as an employee, independent contractor, or
otherwise, whether or not compensated, to any person or entity other than
Consolidated Association 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 civic and
charitable organizations, (ii) manage his personal investments, and (iii) with
the prior permission of the Board of Directors of Consolidated Association, 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 effective date of the Plan as established pursuant to
Section 2 thereof (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 Consolidated Association;

              (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 Consolidated Association "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 Consolidated Association, 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 Consolidated Association;

                   (C) Executive's willful neglect, failure, or refusal to carry
out his duties hereunder in a reasonable manner; or

                                      - 2 -

<PAGE>



                   (D) the breach by Executive of any representation or warranty
in section 6(a) hereof or of any agreement contained in section 1, 4, 5, or 6(b)
hereof, which breach is material and adverse to Consolidated Association or any
of its affiliates for which Executive is assigned material responsibilities or
duties; or

              (v) Executive's resignation from his position as [ ] of
Consolidated Association; or

              (vi) the termination of Executive's employment by Consolidated
Association "without cause," which shall be for any reason other than those set
forth in subsections (i), (ii), (iii), or (iv) of this section 2(a), at any
time, upon the thirtieth day following notice to Executive.

          (b) In the event that the Term of Employment shall be terminated for
any reason other than that set forth in section 2(a)(vi) hereof, Executive shall
be entitled to receive, upon the occurrence of any such event:

              (i) any cash compensation (as hereinafter set forth) 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, cash compensation payable at the rate established pursuant to
section 3(a)(i) hereof, in a manner consistent with the normal payroll practices
of Consolidated Association with respect to executive personnel as presently in
effect or as they may be modified by Consolidated Association 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
Consolidated Association under this Agreement, Executive shall be compensated in
the following manner:


                                      - 3 -

<PAGE>



          (a) Cash Compensation.

              (i) During the Term of Employment Consolidated Association shall
pay Executive cash compensation which shall not be less than the sum of the
aggregate annualized salary paid to Executive by the Bank as of September 30,
1997 and the annual bonus awarded to Executive by the Bank with respect to 1997.
Cash compensation shall be payable in accordance with the normal payroll
practices of Consolidated Association with respect to executive personnel as
presently in effect or as they may be modified by Consolidated Association from
time to time.

              (ii) During the Term of Employment Executive shall be eligible to
be considered for cash-compensation increases, upon review, in accordance with
the compensation policies of Zions Bancorp with respect to executive personnel
as presently in effect or as they may be modified by Zions Bancorp from time to
time.

          (b) Employee Benefit Plans or Arrangements. During the Term of
Employment, Executive shall be entitled to participate in all employee benefit
plans of Zions Bancorp, as presently in effect or as they may be modified by
Zions Bancorp from time to time, under such terms as may be applicable to
officers of Executive's rank employed by Zions Bancorp or its subsidiaries,
including, without limitation, plans providing retirement benefits, medical
insurance, life insurance, disability insurance, and accidental death or
dismemberment insurance.

          (c) Vacation and Sick Leave. During the Term of Employment, Executive
shall be entitled to paid annual vacation periods and sick leave in accordance
with the policies of Zions Bancorp as in effect as of the Commencement Date or
as may be modified by Zions Bancorp from time to time as may be applicable to
officers of Executive's rank employed by Zions Bancorp or its subsidiaries, but
in no event less than that provided to Executive by the Bank at September 30,
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 Zions Bancorp as are in effect as of the Commencement Date and
as may be modified by Zions Bancorp from time to time, under such terms as may
be applicable to officers of Executive's rank employed by Zions Bancorp or its
subsidiaries.

          4. Confidential Business Information; Non-Competition.

          (a) Executive acknowledges that certain business methods, creative
techniques, and technical data of Zions Bancorp and Consolidated Association and
their affiliates and the like are deemed by Consolidated Association to be and
are in fact confidential business information either of Zions Bancorp or
Consolidated Association or their affiliates. Such confidential information

                                      - 4 -

<PAGE>



includes but is not limited to procedures, methods, sales relationships
developed while in the service of Consolidated Association or its affiliates,
knowledge of customers and their requirements, marketing plans, marketing
information, studies, forecasts, and surveys, competitive analyses, mailing and
marketing lists, new business proposals, lists of vendors, consultants, and
other persons who render service or provide material to Zions Bancorp or
Consolidated Association or their affiliates, and compositions, ideas, plans,
and methods belonging to or related to the affairs of Zions Bancorp or
Consolidated Association or their affiliates. In this regard, Consolidated
Association 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 Consolidated Association, nor
shall he use to the detriment of Consolidated Association 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 Consolidated
Association or their affiliates, any confidential business information obtained
during the course of his employment by Consolidated Association. The foregoing
shall not be construed as restricting Executive from disclosing such information
to the employees of Zions Bancorp or Consolidated Association or their
affiliates.

          (b) Executive hereby agrees that from the Commencement Date until the
second anniversary of the Termination Date, Executive will not (i) engage in the
banking business other than on behalf of Zions Bancorp or Consolidated
Association 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 Consolidated
Association 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
Consolidated Association 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 Consolidated Association in the event of a breach of any of the
provisions of this section 4 (the "Designated Provisions") and that Consolidated
Association 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 Consolidated Association may
have, Consolidated Association 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 Consolidated Association, to the
fullest extent permitted by applicable law, the benefits intended by this
section 4.

          (e) As used herein, "Market Area" shall mean El Paso County, Colorado.

          5. Life Insurance. In light of the unusual abilities and experience of
Executive, Consolidated Association 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 Consolidated Association may choose. Consolidated
Association 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 Consolidated Association, 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
Consolidated Association has applied for insurance.

          6. Representations and Warranties.

          (a) Executive represents and warrants to Consolidated Association that
his execution, delivery, and performance of this Agreement will not result in or
constitute a breach of or conflict with any term, covenant, condition, or
provision of any commitment, contract, or other agreement or instrument,
including, without limitation, any other employment agreement, to which
Executive is or has been a party.

          (b) Executive represents and warrants to Consolidated Association that
the sum of the aggregate annualized salary paid to Executive by the Bank as of
September 30, 1997 and the annual bonus awarded to Executive by the Bank with
respect to 1997 does not exceed $[__________].

          (c) Executive shall indemnify, defend, and hold harmless Consolidated
Association for, from, and against any and all losses, claims, suits, damages,
expenses, or liabilities, including court costs and counsel fees, which
Consolidated Association has incurred or to which Consolidated Association 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) or section 6(b) hereof
to be true and correct when made.

                                      - 6 -

<PAGE>



          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 Consolidated Association:

          [____________________________]
          [____________________________]
          [____________________________]
          [____________________________]

          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. John G. Jackson
          315 West Cheyenne Road
          Colorado Springs, Colorado  80906

With a required copy to:

          Thomas E. Berg, Esq.
          Berniger, Berg, Diver, Noecker & Wood-Ellis, LLC
          90 South Cascade, Suite 310
          Colorado Springs, Colorado  80901

All such notices shall be deemed to have been given on the date delivered,
transmitted, or mailed in the manner provided above.

          8. Assignment. Neither party may assign this Agreement or any rights
or obligations hereunder without the consent of the other party.

          9. Governing Law. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Utah, without giving effect
to the principles of conflict of law thereof. The parties hereby designate Salt
Lake County, Utah and Denver County, Colorado

                                      - 7 -


<PAGE>



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 Consolidated Association 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
Consolidated Association 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 or the breach hereof
shall be resolved by binding

                                      - 8 -

<PAGE>



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 or arbitrators shall
be seated in Denver, Colorado. The arbitrator or arbitrators 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. The arbitrator or arbitrators shall have
the power to award reasonable attorney's fees to a party. 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, Consolidated Association, or the Bank according to the definition
of "Affiliate" set forth in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.

          15. Headings. The section and subsection headings herein have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof.

          IN WITNESS WHEREOF, the parties hereto executed or caused this
Agreement to be executed as of the day and year first above written.

                                            [____________________________]



Attest:                                     By:
       -----------------------------           ------------------------------


                                      - 9 -

<PAGE>



                                               JOHN G. JACKSON



Witness:
         ---------------------------           ------------------------------



<PAGE>



                                  EXHIBIT VIII

                    OPINION OF DUANE, MORRIS & HECKSCHER LLP


<PAGE>


                           [___________________], 1998



SBT Bankshares, Inc.
111 South Tejon Street
Colorado Springs, Colorado 80903

State Bank and Trust of Colorado Springs
111 South Tejon Street
Colorado Springs, Colorado 80903

      Re: Merger of SBT Bankshares, Inc. With Val Cor Bancorporation, Inc., In
          Exchange for Stock of Zions Bancorporation

Mesdames and Gentlemen:

          We are special counsel to Zions Bancorporation, a corporation
organized under the laws of the State of Utah with its head office located at
Salt Lake City, County of Salt Lake, State of Utah ("Zions Bancorp"), its
wholly-owned subsidiary, Val Cor Bancorporation, Inc., a corporation organized
under the laws of the State of Colorado with its head office located at Cortez,
County of Montezuma, State of Colorado ("Val Cor"), and its subsidiary, Valley
National Bank of Cortez, a national banking association organized under the laws
of the United States with its head office located at Cortez, County of
Montezuma, State of Colorado ("Valley"), in connection with the merger (the
"Holding Company Merger") of SBT Bankshares, Inc., a corporation organized under
the laws of the State of Colorado with its head office located at Colorado
Springs, County of El Paso, State of Colorado (the "Company"), with and into Val
Cor in exchange for which shareholders of the Company will receive shares of the
common stock of Zions Bancorp and cash pursuant to an Agreement and Plan of
Reorganization dated December 19, 1997 (the "Agreement") and an Agreement of
Merger dated as of [__________], 1998 (the "Holding Company Merger Agreement"),
and in connection with the consolidation (the "Bank Consolidation") of State
Bank and Trust of


<PAGE>


SBT Bankshares, Inc.
State Bank and Trust of Colorado Springs
[____________________], 1998
Page 2



Colorado Springs, a banking corporation organized under the laws of the State of
Colorado, with its head office located at Colorado Springs, County of El Paso,
State of Colorado and a wholly-owned subsidiary of the Company (the "Bank"),
with Valley pursuant to the Agreement and an Agreement of Consolidation dated as
of [___________], 1998 (the "Bank Consolidation Agreement") (the Agreement, the
Holding Company Merger Agreement, and the Bank Consolidation Agreement to be
referred to collectively as the "Agreements").

          This opinion is provided to you pursuant to Section 5.3 of the
Agreement.

          In our capacity as special counsel, we have participated in the
preparation of a Registration Statement filed with the Securities and Exchange
Commission on Form S-4 covering the shares of Zions Bancorp stock to be issued
in connection with the Holding Company Merger (the "Registration Statement")
including the Prospectus/Proxy Statement for the shareholders of the Company
(the "Prospectus/Proxy Statement"). In addition, in rendering the opinions that
follow, we have examined executed copies of the Agreements and the exhibits and
schedules appended thereto; the articles of incorporation or association and
bylaws of Zions Bancorp, Val Cor, and Valley; the minutes of certain meetings of
the board of directors of Zions Bancorp, Val Cor, and Valley; and such other
corporate documents and corporate records of Zions Bancorp, Val Cor, and Valley
as we have deemed necessary or appropriate for the purpose of rendering the
following opinions. We have also examined [ set forth regulatory approvals,
consents and waivers ]. In addition, we have interviewed officers of Zions
Bancorp, Val Cor, and Valley and undertaken and performed such other procedures
as we have deemed necessary or appropriate for the purpose of rendering the
following opinions. In these regards, we have examined and relied upon
representations of the Company and the Bank contained in the Agreements, and,
where we have deemed appropriate, representations or certifications of officers
or public officials.

          We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties other than Zions Bancorp, Val Cor, and Valley had the corporate power
and authority to enter into and perform all obligations thereunder and, as to
such parties other than Zions Bancorp, Val Cor, and Valley, we have also assumed
the execution and delivery of such documents and the validity and binding effect
and enforceability thereof. We have also assumed that the Agreements have not
been otherwise amended by oral or written agreement or by conduct of the parties
thereto. We have assumed that the certifications and representations dated
earlier than the date hereof on which we have expressed reliance herein continue
to remain accurate, insofar as material to our opinions, from such earlier date
through the date hereof. To the extent that the opinions set forth herein
address matters which are governed by the law of any jurisdiction other


<PAGE>


SBT Bankshares, Inc.
State Bank and Trust of Colorado Springs
[____________________], 1998
Page 3



than the state of New York, we have assumed that the law of such jurisdiction is
identical to that of New York, including federal law applicable within New York.
In rendering the opinion set forth in paragraph (e) hereof, we have assumed that
neither the Company nor the Bank is subject to any order or directive from, or
memorandum of understanding or similar supervisory agreement entered into with,
any bank regulatory authority which would necessitate the receipt of approvals
or consents from any such bank regulatory authority prior to consummation of the
transactions contemplated in the Agreements other than those approvals and
consents contemplated in the Agreement and Plan of Reorganization and those
generally applicable to such transactions.

          Based on the foregoing, and solely in reliance thereon, we are of the
opinion that:

          (a) Organization, Powers and Qualifications.

              (i) Zions Bancorp is a corporation which is duly organized,
validly existing, and in good standing under the laws of the State of Utah and
has the corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business
as now conducted.

              (ii) Val Cor is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Colorado and has
the corporate power and authority to own and operate its properties and assets,
to lease properties used in its business, and to carry on its business as now
conducted.

              (iii) Valley is a national banking association which is duly
organized, validly existing, and in good standing under the laws of the United
States and has the corporate power and authority to own and operate its
properties and assets, to lease properties used in its business, and to carry on
its business as now conducted. The deposit accounts of Valley are insured by the
Bank Insurance Fund of the Federal Deposit Insurance Corporation and, to the
best of our knowledge, no proceedings for the termination of such insurance are
pending or threatened.

          (b) Execution and Performance of Agreements. Each of Zions Bancorp,
Val Cor, and Valley has the corporate power and authority to execute, deliver,
and perform each of the Agreements to which it is a party and to carry out the
terms thereof and the transactions contemplated thereby.

          (c) Compliance with Corporate Documents. Neither the execution,
delivery, or performance by Zions Bancorp, Val Cor, or Valley of the Agreements
nor the consummation of the transactions contemplated therein will violate,
conflict with, or constitute a breach of or default under the respective
articles of incorporation or association or bylaws of Zions Bancorp, Val Cor, or
Valley.




<PAGE>


SBT Bankshares, Inc.
State Bank and Trust of Colorado Springs
[____________________], 1998
Page 4



          (d) Binding Obligations; Due Authorization. Each of the Agreements to
which it is a party has been duly authorized by all necessary corporate action
on the part of each of Zions Bancorp, Val Cor, and Valley, has been duly
executed and delivered by each of Zions Bancorp, Val Cor, and Valley, and
constitutes a valid, legal, and binding obligation of Zions Bancorp, Val Cor, or
Valley, as the case may be, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship, or similar laws or judicial decisions
relating to or affecting creditors' rights generally or the rights of creditors,
or of the FDIC as insurer, regulator, conservator or receiver, of banks the
accounts of which are insured by the FDIC in particular, or by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law) as to whose availability we express no opinion. No other
corporate proceedings on the part of any of Zions Bancorp, Val Cor, or Valley
are necessary to authorize any of the Agreements to which it is a party or the
carrying out of the transactions contemplated thereby.

          (e) Regulatory Approvals. All approvals or waivers required to be
obtained from the Federal Reserve Bank of San Francisco, the Board of Governors
of the Federal Reserve System, the Comptroller of the Currency, the Colorado
State Banking Board, and the Department of Financial Institutions of the State
of Utah to consummate the transactions contemplated by the Agreement have been
obtained. Except for those approvals or waivers, the execution and delivery by
Zions Bancorp, Val Cor, and Valley of each of the Agreements to which it is a
party and consummation of the transactions contemplated thereby do not require
the approval or consent of any bank regulatory authority.

          (f) Issuance of Zions Bancorp Common Stock. The shares of the Common
Stock of Zions Bancorp, no par value, to be issued by Zions Bancorp pursuant to
the Agreement and the Holding Company Merger Agreement, when issued pursuant to
and in accordance with the Agreement and the Holding Company Merger Agreement,
will be duly authorized and legally issued, fully paid, and non-assessable.

          (g) Compliance with Securities Laws.

              (i) The Registration Statement has become effective under the
Securities Act of 1933, as amended (the "Act"), and, to the best of our
knowledge, no stop order proceedings with respect thereto have been instituted
or are pending or threatened under the Act with respect to the Registration
Statement.


<PAGE>


SBT Bankshares, Inc.
State Bank and Trust of Colorado Springs
[____________________], 1998
Page 5



              (ii) The Registration Statement complies on its face as to form in
all material respects with the requirements of the federal securities laws and
published rules and regulations of the Securities and Exchange Commission as of
the date thereof.

          In connection with our participation in the preparation of the
Registration Statement, we have not independently verified the accuracy,
completeness, or fairness of the statements contained therein or of documents
incorporated by reference therein, and we make no representation to you as to
the accuracy or completeness of statements of fact contained or incorporated by
reference in the Registration Statement or the Prospectus/Proxy Statement.
Nothing, however, has come to our attention that would lead us to believe that
the Registration Statement as of the effective date or the date hereof, or the
Prospectus/Proxy Statement as of the issue date or the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than the
financial statements and schedules and other financial and statistical data
included or incorporated by reference therein, as to which we make no statement)
or that any event has occurred which should have been set forth in an amendment
or supplement to the Registration Statement or Prospectus/Proxy Statement and
which has not been set forth in such amendment or supplement.

          This opinion is given to you for your sole benefit in connection with
the transactions contemplated in the Agreements, and no other person or entity
is entitled to rely thereon, nor may copies be delivered or furnished to any
other party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior written consent.


                                              Very truly yours,





                                                                       EXHIBIT 5

                         Duane, Morris & Heckscher LLP
                        1667 K Street, N.W., Suite 700
                         Washington, D.C.  20006-1608
                                (202) 776-7800



                                April 22, 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 December 19, 1997,
among SBT Bankshares, Inc.(the "Company"), State Bank and Trust of Colorado
Springs (the "Bank"), Zions, Val Cor Bancorporation, Inc. ("Val Cor"), and Bank
Colorado, National Association (successor-in-interest to Valley National Bank of
Cortez) ("Bank Colorado"), a related Agreement of Merger between the Company and
Val Cor, and a related Agreement of Consolidation between the Bank and Bank
Colorado (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 consolidate with Bank Colorado to
form a new national banking association (the "Bank Consolidation"; the Holding
Company Merger and the Bank Consolidation 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 625,000 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
product of the Consideration Number and the Collar Factor by the sum of the
total number of shares of Company Common Stock issued and outstanding as of the
Effective Date of the Reorganization and the Option Equivalent Number.
"Consideration Number," "Collar Factor," and "Option Equivalent Number" are
defined in the Plan of Reorganization.

      We are also acting as counsel to Zions in connection with the Registration
Statement on Form S-4 (the "Registration Statement") to be filed by Zions with
the Securities and Exchange Commission for the purpose of registering under the
Securities Act of 1933, as amended, the aggregate maximum of 625,000 shares of
Zions Common Stock into which outstanding Company Common Stock will be converted
upon the Effective Date 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, including the related
Agreement of Merger           and Agreement of Consolidation;

      (2)  a copy certified to our satisfaction of the Restated Articles of
           Incorporation of Zions as in effect on the date hereof;



<PAGE>


Zions Bancorporation
April 22, 1998
Page 2



      (3) copies certified to our satisfaction of resolutions adopted by the
          Board of Directors of Zions on November 25, 1997, including
          resolutions approving the Plan of Reorganization; and

      (4) such other documents, corporate proceedings, and statutes as we
          considered necessary to enable us to furnish this opinion.


      We have assumed for the purpose of this opinion that:

      (1) the Plan of Reorganization and the related Agreement of Merger and the
          Agreement of Consolidation have been duly and validly autho rized,
          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 also assumed that the Plan of Reorganization has not been
otherwise amended by oral or written agreement or by conduct of the parties
thereto. We have assumed that the certifications and representations dated
earlier than the date hereof on which we have expressed reliance herein continue
to remain accurate, insofar as material to our opinions, from such earlier date
through the date hereof and that the Reorganization will be consummated in
accordance with the Plan of Reorganization.

      Based upon the foregoing, we are of the opinion that the shares of Zions
Common Stock into which the outstanding shares of Company Common Stock will be
converted in the Reorganization will, when issued in accordance with the terms
of the Plan of Reorganization, be duly authorized, validly issued, fully paid
and nonassessable shares of Zions Common Stock.

      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 23.1


                   CONSENT OF INDEPENDENT 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 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 prospectus.


                                                /s/ KPMG PEAT MARWICK, LLP

                                                KPMG PEAT MARWICK, LLP

Salt Lake City, Utah
April 22, 1998




                                                                    EXHIBIT 23.2


                    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


San Francisco, California
April 20, 1998




                                                                    EXHIBIT 99.1

                     [Letterhead of SBT Bankshares, Inc.]



                              _______________, 1998



Shareholders of SBT Bankshares, Inc.


Dear Shareholder:

      A Special Meeting of the shareholders of SBT Bankshares, Inc. ("the
Company") has been called for 9:00 a.m., Colorado time, on ______________, 1998,
at the Company's offices at 111 South Tejon Street, Colorado Springs, Colorado.
The accompanying proxy statement/prospectus is being furnished to all holders of
the Company's Common Stock.

      The purpose of the Special Meeting is to consider and vote upon an
Agreement and Plan of Reorganization dated December 19, 1997 among the Company,
State Bank and Trust of Colorado Springs (the "Bank"), Zions Bancorporation
("Zions"), Val Cor Bancorporation, Inc. ("Val Cor"), a subsidiary of Zions, and
Valley National Bank of Cortez, which has since merged into a wholly-owned
subsidiary of Val Cor named Bank Colorado, National Association ("Bank
Colorado"), which includes an Agreement of Merger between the Company and Val
Cor and an Agreement of Consolidation between the Bank and Bank Colorado
(collectively, the "Plan of Reorganization"). If the Plan of Reorganization is
approved, and all conditions are met, the Plan of Reorganization will result in
the merger of the Company into Val Cor, with Val Cor being the surviving
corporation and the consolidation of the Bank and Bank Colorado to form a new
national banking association.

      Upon consummation of the Plan of Reorganization, each holder of Company
Common Stock will receive shares of Zions Common Stock in exchange for each
share of Company Common Stock. The terms and conditions of the Plan of
Reorganization are summarized in the accompanying Proxy Statement/Prospectus.
See "Plan of Reorganization" in the Proxy Statement/Prospectus. Holders of
Company Common Stock who do not wish to participate in the Reorganization are
entitled to assert dissenters' rights under Colorado law. See "Plan of
Reorganization--Rights of Dissenting Shareholders" for further information.

      At the Effective Date (as defined), the shares of Company Common Stock
will be canceled and immediately converted into the right for holders of Company
Common Stock to receive, in exchange for each share of Company Common Stock,
that number of shares of Zions Common Stock calculated by dividing the product
of the Consideration Number (as defined) and the Collar Factor (as defined) by
the sum of the number of shares of Company Common Stock issued and outstanding
as of the Effective Date of the Reorganization and the Option Equivalent Number
(as defined). The amounts represented by some of these and other defined terms
are variable and will not be known with precision until the Effective Date of
the Reorganization. As a result, the precise number of shares of Zions Common
Stock to be exchanged for each share of Company Common Stock cannot be
determined until the Effective Date.

      On April __, 1998, the closing price of Zions Common Stock was $_____ per
share. On that date there were 78,592 shares of Company Common Stock issued and
outstanding. Assuming that the Reorganization had been consummated as of April
__, 1998, that the Average Closing Price (as defined) of Zions Common Stock had
been $____ per share on that date, that the Consideration Number had been
_____________, and that the Collar Factor had been _____________, shareholders
of the Company under such circumstances would have received ______ shares of
Zions Common Stock for each share of Company Common Stock, or an equivalent
value of $________ per share of Company Common Stock.



<PAGE>


Shareholders of SBT Bankshares, Inc.
_________________, 1998
Page 2



      On April __, 1998, options to purchase a total of 16,250 shares of Company
Common Stock at an average exercise price of $29.23 per share were outstanding,
held by eight persons, each of whom was an executive officer or director of the
Company. At the Effective Date of the Reorganization, these Company stock
options will automatically be converted into options to purchase shares of Zions
Common Stock. Assuming that the Effective Date of the Reorganization had been
April __, 1998, that the Average Closing Price of Zions Common Stock had been
$[45.00] on that date, that the Consideration Number had been _______, and that
the Collar Factor had been ______, these options to purchase Zions Common Stock
would have covered a total of ________________ shares of Zions Common Stock at
an average exercise price of $__________. Based on these assumptions, these
options had on that date an aggregate value (the difference between the market
price of Zions Common Stock on that date and the exercise price) of $[4,328,753]
to the option holders. Counsel for Zions has questioned whether these options
were granted in violation of the preemptive rights provisions of the Company's
Articles of Incorporation. On advice of counsel, the Board of Directors of the
Company is of the opinion that these options were legitimately granted. A
condition to closing the Holding Company Merger imposed by Zions is that all
shareholders of the Company must waive any preemptive rights they might have to
be offered, subscribe to, or acquire shares, options, and other interests and
rights of or in the Company. By waiving their preemptive rights, Company
shareholders who were not granted Company stock options will, in addition to
waiving their rights to have been offered Company stock options at the time such
options were granted to the executive officers and directors of the Company and
to acquire shares of Company Common Stock at the time of exercise of any stock
options, give up financial benefits they might otherwise have in the options.
Their waiver of such rights will, however, satisfy a condition to closing
without which Zions in its discretion may decline to proceed with the
Reorganization. See "Plan of Reorganization--Waiver of Preemptive Rights." A
form of Waiver accompanies this letter and should be executed and returned in
the enclosed, self-addressed envelope as soon as possible.

      The accompanying Proxy Statement/Prospectus details the terms of the
proposed Plan of Reorganization and provides information concerning the Company,
the Bank, Zions, Val Cor and Bank Colorado as well as the Plan of
Reorganization. The Proxy Statement/Prospectus contains important information
necessary for the shareholders to make a decision about how to vote at the
Special Meeting. Please read it carefully.

      The affirmative vote of eighty percent (80%) of the issued and outstanding
shares of the Company's Common Stock is required for approval of the Plan of
Reorganization. Failure to vote will have the same effect as a vote against the
Reorganization. Consequently, please mark, sign, date and return the enclosed
proxy as soon as possible.

      Any holder of Company Common Stock may attend the Special Meeting and vote
in person if he or she desires, even if he or she has already submitted a proxy.

      Consummation of the Plan of Reorganization is subject to approval by
federal and state bank regulatory agencies, all of which approvals have [not
yet] been received, and to certain other conditions, including the maintenance
of the Company's financial condition. If approved, the Plan of Reorganization
will most likely be consummated sometime in the second quarter of 1998.

      The Board of Directors has unanimously approved the Plan of Reorganization
and determined that the Reorganization is in the best interests of the Company,
its shareholders, employees and the community it serves. The Board of Directors
unanimously recommends that the shareholders vote to approve the Plan of
Reorganization.

      Instructions describing the procedure to be followed to receive shares of
Zions Common Stock are not included with the accompanying Proxy
Statement/Prospectus. If the Plan of Reorganization is approved by the


<PAGE>


Shareholders of SBT Bankshares, Inc.
_________________, 1998
Page 3



shareholders, on or shortly after the effective date of the Plan of
Reorganization, Zions will send you instructions describing the procedure to be
followed to exchange your SBT Bankshares, Inc. stock certificate for the
Reorganization consideration.

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

                                             Sincerely,



                                             ------------------------
                                             John G. Jackson
                                             President



                                                                    EXHIBIT 99.2

                             SBT BANKSHARES, INC.

                           NOTICE OF SPECIAL MEETING
                                OF SHAREHOLDERS

      A Special Meeting of shareholders of SBT Bankshares, Inc. (the "Company")
will be held at 9:00 a.m., Colorado time, on _____________, 1998, at the
Company's offices at 111 South Tejon Street, Colorado Springs, Colorado, to
consider and vote upon an Agreement and Plan of Reorganization dated as of
December 19, 1997 among the Company, State Bank and Trust of Colorado Springs
(the "Bank"), Zions Bancorporation ("Zions"), Val Cor Bancorporation, Inc. ("Val
Cor"), a subsidiary of Zions, and Valley National Bank of Cortez, which has
since merged into a wholly-owned subsidiary of Val Cor named Bank Colorado,
National Association ("Bank Colorado"), an Agreement of Merger between the
Company and Val Cor and an Agreement of Consolidation between Bank Colorado and
the Bank (collectively, the "Plan of Reorganization"), and the transactions
contemplated thereby. The Plan of Reorganization provides for the merger of the
Company into Val Cor, with Val Cor being the surviving corporation and for the
consolidation of the Bank and Bank Colorado to form a new national banking
association (the aforementioned merger and consolidation being referred to
herein collectively as the "Reorganization").

      Upon the consummation of the Plan of Reorganization, each holder of shares
of Company Common Stock will receive shares of Zions Common Stock in exchange
for each share of Company Common Stock held as of the effective date of the Plan
of Reorganization. The terms and conditions of the Reorganization are set forth
in the accompanying Proxy Statement/Prospectus.

      The Board of Directors has set April ___, 1998, as the record date for
determining shareholders entitled to notice of and to vote at the Special
Meeting.

      Holders of Company Common Stock are entitled to assert dissenters' rights
under Colorado law.

      By order of the Board of Directors

Dated: _______________, 1998.



                                          -------------------------------
                                          John G. Jackson
                                          President


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



                                                                    EXHIBIT 99.3


                                     PROXY

                        SPECIAL MEETING OF SHAREHOLDERS
                            OF SBT BANKSHARES, INC.

                               _____________, 1998


          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS



      The undersigned hereby appoints John G. Jackson and ______________, either
one acting alone, with full power of substitution in each, as proxy[ies] on
behalf of the undersigned to vote as designated below on behalf of the
undersigned as a holder of the Common Stock of SBT Bankshares, Inc. ("Company
Common Stock") all shares of Company Common Stock that the undersigned held of
record on May ___, 1998, which the undersigned is entitled to vote, at the
special meeting of shareholders of SBT Bankshares, Inc. (the "Company") to be
held on __________________, 1998, or at any postponement or adjournment thereof,
for the purpose of considering and acting on the proposal to approve the
Agreement and Plan of Reorganization dated December 19, 1997, among the Company,
State Bank and Trust of Colorado Springs (the "Bank"), Zions Bancorporation
("Zions"), Val Cor Bancorporation, Inc. ("Val Cor"), a subsidiary of Zions, and
Valley National Bank of Cortez, which has since merged into a wholly-owned
subsidiary of Val Cor named Bank Colorado, National Association ("Bank
Colorado"), and an Agreement of Merger between the Company and Val Cor (the
"Plan of Reorganization"), whereby the Company will merge into Val Cor, with Val
Cor being the surviving corporation (the "Reorganization"). The terms and
conditions of the Plan of Reorganization are set forth in the accompanying Proxy
Statement/Prospectus. Approval of the Plan of Reorganization requires the
affirmative vote of eighty percent of the outstanding shares of the Company
Common Stock.

The Directors recommend a vote FOR Proposal 1.

      1.    Approval of the Plan of Reorganization and the Reorganization.

            [  ] FOR    [  ] AGAINST      [  ] ABSTAIN

      2. The Proxy, in his discretion, is authorized to vote on such other
business as may properly come before the meeting.


<PAGE>



      When properly completed, this proxy will be voted in the manner directed
herein by the undersigned. If no direction is given, this proxy will be voted
FOR the approval of the Plan of Reorganization and the Reorganization.

                        (Each person whose name is on the Company Common Stock
                        certificate should sign below in the same manner in
                        which such person's name appears. If signing as a
                        fiduciary, give title.)



                                            ---------------------------
                                            Signature



                                            ---------------------------
                                            Printed Name


                                            Dated:
                                                  ---------------------
                                                  Please date, sign,
                                                  and return promptly


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