ZIONS BANCORPORATION /UT/, 10-Q, 2000-08-14

ZIONS BANCORPORATION /UT/
10-Q, 2000-08-14
NATIONAL COMMERCIAL BANKS

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2000
-------------

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

For the transition period from to

COMMISSION FILE NUMBER 0-2610

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

UTAH 87-0227400
------------------------------------------ -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

ONE SOUTH MAIN, SUITE 1380
SALT LAKE CITY, UTAH 84111
------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)

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

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock, without par value,
outstanding at August 4, 2000 86,884,952 shares

1
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

INDEX

Page
----
PART I. FINANCIAL INFORMATION
---------------------

ITEM 1. Financial Statements (unaudited)

Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Changes in Shareholders'
Equity and Comprehensive Income 7
Notes to Consolidated Financial Statements 8

ITEM 2. Management's Discussion and Analysis 9

PART II. OTHER INFORMATION
-----------------

ITEM 4. Submission of Matters to a Vote of Shareholders 27

ITEM 6. Exhibits and Reports on Form 8-K 28

SIGNATURES 28
----------

2
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands, except share amounts) June 30, December 31, June 30,
2000 1999 1999
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks ............................................. $ 882,064 $ 898,300 $ 940,807
Money market investments:
Interest-bearing deposits ...................................... 18,580 17,371 17,757
Federal funds sold ............................................. 210,986 85,898 163,550
Security resell agreements ..................................... 498,581 421,900 281,351

Investment securities:
Held to maturity, at cost (approximate market value
$3,209,248, $3,290,508, and $3,263,185) ........................ 3,241,734 3,330,444 3,270,066
Available for sale, at market .................................. 746,324 778,930 710,829
Trading account, at market...................................... 340,070 327,845 416,130
------------ ------------ ------------
4,328,128 4,437,219 4,397,025
Loans:
Loans held for sale ............................................ 186,644 204,800 195,217
Loans, leases, and other receivables ........................... 13,658,611 12,648,325 11,564,758
------------ ------------ ------------
13,845,255 12,853,125 11,759,975
Less:
Unearned income and fees, net of related costs ................. 70,004 62,480 52,904
Allowance for loan losses ...................................... 197,430 204,114 212,424
------------ ------------ ------------
Net Loans ................................................ 13,577,821 12,586,531 11,494,647

Premises and equipment, net ......................................... 294,628 287,448 268,608
Goodwill and core deposit intangibles ............................... 647,564 666,219 642,952
Other real estate owned ............................................. 4,073 8,939 7,322
Other assets ........................................................ 996,010 871,075 851,270
------------ ------------ ------------
$ 21,458,435 $ 20,280,900 $ 19,065,289
============ ============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing ............................................. $ 3,421,032 $ 3,276,097 $ 3,310,150
Interest-bearing:
Savings and money market ................................... 7,827,135 7,660,786 7,300,492
Time:
Under $100,000 ......................................... 1,665,752 1,836,645 2,052,438
Over $100,000 .......................................... 1,473,213 1,078,631 1,207,206
Foreign .................................................... 126,851 209,780 163,729
------------ ------------ ------------
14,513,983 14,061,939 14,034,015

Securities sold, not yet purchased .................................. 311,133 237,020 377,056
Federal funds purchased ............................................. 479,543 825,997 669,115
Security repurchase agreements ...................................... 1,538,393 1,366,653 913,927
Accrued liabilities ................................................. 319,878 247,406 333,164
Commercial paper .................................................... 235,956 238,660 133,969
Federal Home Loan Bank advances and other borrowings:
Less than one year ............................................. 1,819,328 1,038,045 532,166
Over one year .................................................. 145,712 112,622 60,216
Long-term debt ...................................................... 420,099 453,471 453,249
------------ ------------ ------------
Total liabilities .......................................... 19,784,025 18,581,813 17,506,877
------------ ------------ ------------
Minority interest ................................................... 40,426 39,249 37,162

Shareholders' equity:
Capital stock:
Preferred stock, without par value; authorized
3,000,000 shares; issued and outstanding, none ........ -- -- --
Common stock, without par value; authorized
200,000,000 shares; issued and outstanding 85,726,222,
85,592,643 and 84,422,706 shares ........................ 889,422 888,231 823,552
Accumulated other comprehensive loss ........................... (20,322) (4,158) (4,664)
Retained earnings .............................................. 764,884 775,765 702,362
------------ ------------ ------------
Total shareholders' equity ................................ 1,633,984 1,659,838 1,521,250
------------ ------------ ------------
$ 21,458,435 $ 20,280,900 $ 19,065,289
============ ============ ============
</TABLE>

3
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ----------------------
(In thousands, except per share amounts) 2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans ................................. $ 299,142 $ 245,146 $ 579,526 $ 478,203
Interest on loans held for sale ............................ 3,261 3,088 6,580 6,493
Lease financing ............................................ 4,100 3,253 8,312 6,677
Interest on money market investments ....................... 18,313 17,128 38,402 31,944
Interest on securities:
Held to maturity:
Taxable .......................................... 48,585 42,764 97,327 83,980
Nontaxable ....................................... 4,148 4,959 8,161 9,439
Available for sale:
Taxable .......................................... 7,627 8,513 16,189 18,784
Nontaxable ....................................... 1,735 690 3,013 1,399
Trading account ....................................... 9,712 7,983 18,668 14,775
--------- --------- --------- ---------
Total interest income ................................. 396,623 333,524 776,178 651,694
--------- --------- --------- ---------
Interest expense:
Interest on savings and money market deposits .............. 81,140 59,366 156,036 114,016
Interest on time and foreign deposits ...................... 38,244 42,163 77,340 89,746
Interest on borrowed funds ................................. 82,641 46,692 157,212 85,774
--------- --------- --------- ---------
Total interest expense ................................ 202,025 148,221 390,588 289,536
--------- --------- --------- ---------
Net interest income ................................... 194,598 185,303 385,590 362,158
Provision for loan losses ....................................... 6,214 4,143 11,462 8,884
--------- --------- --------- ---------
Net interest income after provision for loan losses ... 188,384 181,160 374,128 353,274
--------- --------- --------- ---------
Noninterest income:
Service charges on deposit accounts ........................ 19,263 18,636 38,312 37,304
Other service charges, commissions and fees ................ 15,860 18,116 31,699 34,233
Trust income ............................................... 4,548 4,244 9,035 7,621
Investment securities gain (loss), net ..................... 2,321 215 3,456 (1,089)
Impairment loss on First Security Corporation common stock . -- -- (96,911) --
Underwriting and trading income ............................ 2,016 3,223 5,363 7,244
Loan sales and servicing income ............................ 12,706 12,410 22,530 27,582
Other income ............................................... 13,885 6,163 20,804 15,592
--------- --------- --------- ---------
Total noninterest income .............................. 70,599 63,007 34,288 128,487
--------- --------- --------- ---------
Noninterest expense:
Salaries and employee benefits ............................. 86,374 86,446 167,511 172,728
Occupancy, net ............................................. 12,910 12,524 25,129 25,189
Furniture and equipment .................................... 13,133 10,810 25,901 21,465
Other real estate expense (income) ......................... 117 (486) 416 (442)
Legal and professional services ............................ 5,536 5,240 10,526 8,856
Supplies ................................................... 2,770 3,148 5,276 5,852
Postage .................................................... 2,452 2,999 5,494 5,910
Advertising ................................................ 5,561 6,090 10,125 9,242
Merger-related expense ..................................... 1,152 1,119 42,695 2,164
FDIC premiums .............................................. 894 814 1,761 1,196
Amortization of goodwill and core deposit intangibles ...... 9,307 8,905 18,597 17,633
Amortization of mortgage servicing assets .................. 41 115 121 766
Other ...................................................... 27,065 28,162 54,072 57,932
--------- --------- --------- ---------
Total noninterest expense ............................. 167,312 165,886 367,624 328,491
--------- --------- --------- ---------
Income before income taxes and minority interest ................ 91,671 78,281 40,792 153,270
Income taxes .................................................... 31,445 26,944 9,490 53,673
--------- --------- --------- ---------
Net income before minority interest ................... 60,226 51,337 31,302 99,597
Minority interest ............................................... 643 504 211 1,860
--------- --------- --------- ---------
Net income ............................................ $ 59,583 $ 50,833 $ 31,091 $ 97,737
========= ========= ========= =========

Basic shares .................................................... 85,707 84,396 85,674 84,290
Diluted shares .................................................. 86,323 85,599 86,420 85,482

Net income per common share:
Basic ...................................................... $ 0.70 $ 0.60 $ 0.36 $ 1.16
Diluted .................................................... $ 0.69 $ 0.59 $ 0.36 $ 1.14
</TABLE>

4
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
(In thousands) 2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income ................................................... $ 59,583 $ 50,833 $ 31,091 $ 97,737
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Provision for loan losses .................................. 6,214 4,143 11,462 8,884
Depreciation of premises and equipment ..................... 11,450 10,241 22,818 19,328
Amortization ............................................... 12,487 12,946 24,571 26,841
Accretion of unearned income and fees, net of
related costs ......................................... 11,057 6,918 7,524 9,768
Income to minority interest ................................ 643 504 211 1,860
Proceeds from sales of trading account securities .......... 25,258,087 48,341,852 77,640,435 94,197,450
Increase in trading account securities ..................... (25,201,390) (48,536,855) (77,652,660) (94,421,725)
Investment securities (gain) loss, net ..................... (2,321) (215) (3,456) 1,089
Impairment loss on First Security Corporation common stock . -- -- 96,911 --
Proceeds from loans held for sale .......................... 89,753 196,362 282,485 504,471
Increase in loans held for sale ............................ (97,065) (211,989) (264,391) (468,365)
Net gain on sales of loans, leases and other assets ........ (8,910) (9,977) (16,874) (22,607)
Change in accrued income taxes ............................. (6,404) 8,580 15,529 30,536
Change in accrued interest receivable ...................... 7,912 5,866 (9,420) (6,096)
Change in accrued interest payable ......................... (243) (860) 2,775 (1,995)
Other, net ................................................. (12,485) (29,686) (43,243) (111,799)
------------ ------------ ------------ ------------
Net cash provided by (used in) operating activities ... 128,368 (151,337) 145,768 (134,623)
------------ ------------ ------------ ------------
Cash flows from investing activities:
Net decrease (increase) in money market investments .......... 58,539 10,920 (202,978) 197,222
Proceeds from maturities of investment securities
held to maturity ........................................ 455,018 280,128 549,352 576,198
Purchases of investment securities held to maturity .......... (383,971) (447,712) (444,556) (1,003,082)
Proceeds from sales of investment securities
available for sale ...................................... 171,919 13,099 256,263 151,750
Proceeds from maturities of investment securities
available for sale ...................................... 52,447 66,052 79,951 160,203
Purchases of investment securities available for sale ........ (339,528) (100,023) (451,485) (286,491)
Proceeds from sales of loans and leases ...................... 154,432 427,133 292,134 623,170
Net increase in loans and leases ............................. (809,995) (594,587) (1,307,747) (1,147,456)
Payments on leveraged leases ................................. -- -- (4,943) (4,168)
Principal collections on leveraged leases .................... -- -- 4,943 4,168
Proceeds from sales of premises and equipment ................ 3,091 1,784 4,983 3,411
Purchases of premises and equipment .......................... (18,449) (27,056) (34,988) (41,422)
Proceeds from sales of mortgage-servicing rights ............. 1,049 6,085 1,994 21,003
Purchases of mortgage-servicing rights ....................... -- (136) (62) (928)
Proceeds from sales of other assets .......................... 3,639 1,413 6,972 3,542
Cash paid for acquisitions, net of cash received -- -- -- 592
------------ ------------ ------------ ------------
Net cash used in investing activities ................. (651,809) (362,900) (1,250,167) (742,288)
------------ ------------ ------------ ------------
</TABLE>

5
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
(In thousands) 2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from financing activities:
Net increase (decrease) in deposits .......................... (70,793) (111,663) 452,044 (192,357)
Net change in short-term funds borrowed ...................... 585,193 728,941 677,978 1,116,610
Proceeds from FHLB advances over one year .................... 100,000 15,000 200,000 15,000
Payments on FHLB advances over one year ...................... (104,489) (5,582) (166,910) (11,580)
Payments on long-term debt ................................... (17,548) (305) (33,372) (486)
Proceeds from issuance of common stock ....................... 544 1,237 4,231 2,833
Payments to redeem common stock .............................. (24) (772) (3,836) (966)
Dividends paid ............................................... (17,141) (22,930) (41,972) (33,990)
------------ ------------ ------------ ------------
Net cash provided by financing activities .......... 475,742 603,926 1,088,163 895,064
------------ ------------ ------------ ------------
Net increase (decrease) in cash and due from banks ................ (47,699) 89,689 (16,236) 18,153
Cash and due from banks at beginning of period .................... 929,763 851,118 898,300 922,654
------------ ------------ ------------ ------------
Cash and due from banks at end of period .......................... $ 882,064 $ 940,807 $ 882,064 $ 940,807
============ ============ ============ ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
(In thousands) 2000 1999 2000 1999
------------ ------------ ------------ ------------
Cash paid for:
Interest ..................................................... $ 205,431 $ 149,095 $ 391,116 $ 291,533
Income taxes ................................................. 22,552 17,665 22,556 17,720
Loans transferred to other real estate owned ...................... 588 3,247 2,391 5,697
</TABLE>

6
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
(Unaudited)

<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000
---------------------------------------------------------------------
Accumulated
other Total
Common Comprehensive comprehensive Retained Shareholders'
(In thousands) Stock Income income (loss) Earnings Equity
----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 2000 ............................... $ 888,231 $ (4,158) $ 775,765 $ 1,659,838
Net income for the period .............................. $ 31,091 31,091 31,091
-----------
Other comprehensive income, net of tax:
Realized and unrealized holding loss arising
during the period, net of tax benefit of $45,759. (73,872)
Reclassification for net realized securities loss
recorded in the income statement, net of tax
benefit of $35,747............................. 57,708
-----------
Other comprehensive loss ........................... (16,164) (16,164) (16,164)
-----------
Total comprehensive income ......................... $ 14,927
===========
Cash dividends:
Common, $.49 per share ............................. (41,972) (41,972)
Stock redeemed and retired ............................. (3,836) (3,836)
Stock options exercised, net of shares tendered and
retired ............................................. 5,027 5,027
----------- -----------
Balance, June 30, 2000 ................................. $ 889,422 $ (20,322) $ 764,884 $ 1,633,984
=========== =========== =========== ===========

---------------------------------------------------------------------
Six Months Ended
June 30, 1999
---------------------------------------------------------------------
Accumulated
other Total
Common Comprehensive comprehensive Retained Shareholders'
(In thousands) Stock Income income (loss) Earnings Equity
----------- ----------- ------------ ----------- -----------
Balance, January 1, 1999 ............................... $ 796,519 $ (3,407) $ 659,519 $ 1,452,631
Net income for the period .............................. $ 97,737 97,737 97,737
-----------
Other comprehensive income, net of tax:
Realized and unrealized holding loss arising
during the period, net of tax benefit of $3,151 . (5,087)
Reclassification for realized investment
securities loss recorded in the income
statement, net of tax benefit of $2,372 ......... 3,830
-----------
Other comprehensive loss ........................... (1,257) (1,257) (1,257)
-----------
Total comprehensive income ......................... $ 96,480
===========
Cash dividends:
Common, $.43 per share ............................. (33,990) (33,990)
Stock dividend of acquired company ..................... 21,700 (21,700) --
Issuance of common shares for acquisitions ............. 83 796 879
Stock redeemed and retired ............................. (966) (966)
Stock options exercised, net of shares tendered and
retired .............................................. 6,216 6,216
----------- -----------
Balance, June 30, 1999 ................................. $ 823,552 $ (4,664) $ 702,362 $ 1,521,250
=========== =========== =========== ===========
</TABLE>

Comprehensive income for the three months ended June 30, 2000 and 1999 was
$64,761 and $47,644 respectively.

7
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Basis of Presentation

The unaudited consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included.

On October 15, 1999 the Company completed its acquisition of Pioneer
Bancorporation in a transaction accounted for as a pooling of interests. The
acquisition was considered significant and prior year amounts have accordingly
been restated.

Operating results for the six months ended June 30, 2000 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2000. For further information, refer to the consolidated financial statements
and footnotes thereto included in Zions Bancorporation's Annual Report to
Shareholders on Form 10-K for the year ended December 31, 1999.

First Security Corporation Merger Termination

On June 6, 1999 the Company entered into a definitive Agreement and Plan of
Merger (the "Agreement") with First Security Corporation. First Security
Corporation's stockholders approved the transaction at a meeting held on March
22, 2000. In a special meeting of shareholders held on March 31, 2000, the
Company's shareholders declined to adopt the Agreement and the Company was
notified the next day by First Security Corporation that it was terminating the
Agreement.

Included in results of operations for the six months ended June 30, 2000 are
approximately $42.7 million of pre-tax merger expenses related to the
termination of the merger and the related disengagement. Also included in
results of operations is a pre-tax impairment loss on First Security Corporation
common stock owned by the Company of $96.9 million. It is possible that the
Company could incur additional unidentified expenses related to the merger
termination and related disengagement process.

Accounting Standards Not Adopted

In September 1998, the FASB issued Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities. Statement No. 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value. The
accounting for gains and losses of a derivative depends on the intended use of
the derivative and the resulting designation.

Under this statement, an entity that elects to apply hedge accounting is
required to establish at the inception of the hedge the method it will use for
assessing the effectiveness of the hedging derivative and the measurement
approach for determining the ineffective aspect of the hedge. Those methods must
be consistent with the entity's approach to managing risk. The original
effective date of this statement, as amended by Statement Nos. 137 and 138, has
been delayed and it is now effective for all fiscal quarters of fiscal years
beginning after June 15, 2000, and should not be applied retroactively to
financial statements of prior periods. The Company is currently studying the
statement to determine its future effects.

8
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------

FINANCIAL HIGHLIGHTS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
(In thousands, except per share and ratio data) June 30, June 30,
--------------------------------- ----------------------------------
2000 1999 % Change 2000 1999 % Change
--------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS
Taxable-equivalent net interest income ..... $ 199,099 $ 189,341 5.15 % $ 393,939 $ 369,831 6.52 %
Net interest income ........................ 194,598 185,303 5.02 % 385,590 362,158 6.47 %
Noninterest income ......................... 70,599 63,007 12.05 % 131,199 128,487 2.11 %
Impairment loss First Security Corporation
common stock (1) ........................ -- -- -- (96,911) -- --
Provision for loan losses .................. 6,214 4,143 49.99 % 11,462 8,884 29.02 %
Noninterest expense ........................ 167,312 165,886 0.86 % 367,624 328,491 11.91 %
Income before income taxes ................. 91,671 78,281 17.11 % 40,792 153,270 (73.39)%
Income taxes ............................... 31,445 26,944 16.71 % 9,490 53,673 (82.32)%
Minority interest .......................... 643 504 27.58 % 211 1,860 (88.66)%
Net income ................................. 59,583 50,833 17.21 % 31,091 97,737 (68.19)%

PER COMMON SHARE
Net income (diluted) ....................... 0.69 0.59 16.95 % 0.36 1.14 (68.42)%
Dividends .................................. 0.20 0.29 (31.03)% 0.49 0.43 13.95 %
Book value ................................. 19.06 18.02 5.77 %

SELECTED RATIOS
Return on average assets ................... 1.12% 1.04% 0.29% 1.02%
Return on average common equity ............ 14.93% 13.41% 3.83% 13.15%
Efficiency ratio(3) ........................ 62.04% 65.74% 70.01% 65.92%
Net interest margin ........................ 4.23% 4.39% 4.18% 4.39%

OPERATING CASH EARNINGS(2)(3)
Taxable-equivalent net interest income ..... $ 199,099 $ 189,341 5.15 % $ 393,939 $ 369,831 6.52 %
Net interest income ........................ 194,598 185,303 5.02 % 385,590 362,158 6.47 %
Noninterest income ......................... 70,599 63,007 12.05 % 131,199 128,487 2.11 %
Provision for loan losses .................. 6,214 4,143 49.99 % 11,462 8,884 29.02 %
Noninterest expense ........................ 156,853 155,862 0.64 % 306,332 308,694 (0.77)%
Income before income taxes ................. 102,130 88,305 15.66 % 198,995 173,067 14.98 %
Income taxes ............................... 33,079 28,520 15.99 % 65,298 56,853 14.85 %
Minority interest .......................... 643 504 27.58 % 211 1,860 (88.66)%
Net income ................................. 68,408 59,281 15.40 % 133,486 114,354 16.73 %

PER COMMON SHARE
Net income (diluted) ....................... 0.79 0.69 14.49 % 1.54 1.34 14.93 %
Dividends .................................. 0.20 0.29 (31.03)% 0.49 0.43 13.95 %
Book value ................................. 11.51 10.40 10.67 %

SELECTED RATIOS
Return on average assets ................... 1.33% 1.25% 1.29% 1.24%
Return on average common equity ............ 28.90% 27.34% 27.55% 27.28%
Efficiency ratio ........................... 58.16% 61.76% 58.33% 61.95%
Net interest margin ........................ 4.23% 4.39% 4.18% 4.39%
</TABLE>

(1) This investment was written down to $14.11 per common share.
(2) Before amortization of goodwill and core deposit intangible assets and
merger-related expense.
(3) Excludes impairment loss on First Security Corporation common stock.

9
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------ ----------------------------------------
(In thousands, except per share and ratio data) 2000 1999 % Change 2000 1999 % Change
----------- ----------- -------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
AVERAGE BALANCES
Total assets .................................. $21,410,382 $19,650,829 8.95% $21,409,795 $19,272,432 11.09 %
Securities .................................... 4,509,800 4,466,551 0.97% 4,578,079 4,403,738 3.96 %
Net loans and leases .......................... 13,327,079 11,623,071 14.66% 13,111,695 11,469,861 14.31 %
Goodwill and core deposit intangibles ......... 652,838 650,697 0.33% 657,848 653,687 0.64 %
Total deposits ................................ 14,111,988 14,042,759 0.49% 14,182,678 14,000,014 1.30 %
Minority interest ............................. 40,172 36,224 10.90% 39,918 36,588 9.10 %
Shareholders' equity .......................... 1,604,801 1,520,453 5.55% 1,632,068 1,499,033 8.87 %

Weighted average common and common-
equivalent shares outstanding ............ 86,322,966 85,599,449 0.85% 86,420,490 85,481,587 1.10 %

AT PERIOD END
Total assets .................................. $21,458,435 $19,065,289 12.55 %
Securities .................................... 4,328,128 4,397,025 (1.57)%
Net loans and leases .......................... 13,775,251 11,707,071 17.67 %
Allowance for loan losses ..................... 197,430 212,424 (7.06)%
Goodwill and core deposit intangibles ......... 647,564 642,952 0.72 %
Total deposits ................................ 14,513,983 14,034,015 3.42 %
Minority interest ............................. 40,426 37,162 8.78 %
Shareholders' equity .......................... 1,633,984 1,521,250 7.41 %

Common shares outstanding ..................... 85,726,222 84,422,706 1.54 %

Average equity to average assets .............. 7.50% 7.74% 7.62% 7.78%
Common dividend payout ........................ 28.77% 45.11% 46.16%(1) 34.78%

Nonperforming assets .......................... 84,255 58,646 43.67 %
Loans past due 90 days or more ................ 22,298 27,379 (18.56)%
Nonperforming assets to net loans and leases,
other real estate owned and other
nonperforming assets at June 30 .......... 0.61% 0.50%

(1) Before impairment loss on First Security Corporation common stock.
</TABLE>

10
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

OPERATING RESULTS

Zions Bancorporation achieved net income of $59.6 million or $0.69 per diluted
share for the second quarter of 2000, an increase of 17.2% and 16.9%,
respectively, over the $50.8 million or $0.59 earned in the second quarter of
1999. Before merger-related charges, net income for the second quarter of 2000
was $60.3 million or $0.70 per diluted share, an increase of 5.8% and 6.0%,
respectively, over the $57.0 million or $0.66 per diluted share earned before
merger-related charges, in the first quarter of 2000. Results for the first
quarter of 2000 included $85.5 million in after-tax charges ($0.99 per share)
related to the Company's terminated merger with First Security Corporation,
including a write down to market value of its investment in First Security
Corporation common stock. Including the merger-related charges the Company
incurred a net loss of $28.5 million or $0.33 per diluted share for the first
quarter of 2000.

Consolidated net income was $31.1 million or $0.36 per diluted share for the
first six months of 2000 compared to $97.7 million or $1.14 per diluted share
for the first six months of 1999. Before merger-related charges, net income was
$117.2 million or $1.36 per diluted share compared to $99.0 million or $1.16 per
diluted share for the first six months of 1999, increases of 18.4% and 17.2%,
respectively.

The annualized return on average assets for the second quarter of 2000 was 1.12%
compared to 1.04% for the first quarter of 1999 and a negative 0.54% for the
first quarter of 2000. The annualized return on average common shareholder's
equity was 14.93% for the quarter compared to 13.41% for the second quarter of
1999 and a negative 6.91% for the first quarter of 2000. The Company's
"efficiency ratio," or noninterest expenses as a percentage of total
taxable-equivalent net revenues for the second quarter was 62.04% compared to
65.74% for the second quarter of 1999 and 78.42% for the first quarter of 2000.

For the first six months of 2000 the annualized return on average assets was
0.29% compared to 1.02% for the same period in 1999. The annualized return on
average common shareholder's equity was 3.83% for the first six months of 2000
compared to 13.15% for the first six months of 1999.

The Company's second quarter $8.8 million (17.2%) increase in earnings compared
to the same period a year ago reflects a $9.3 million (5.0%) increase in net
interest income, and a $7.6 million (12.0%) increase in noninterest income,
partially offset by a $2.1 million (50.0%) increase in the provision for loan
losses, a $1.4 million (0.9%) increase in noninterest expense and a $4.5 million
(16.7%) increase in income tax expense.

For the first six months of 2000 compared to the same period last year the $66.6
million (68.2%) decrease in net income results from the recognition of after-tax
merger charges of $86.1 million ($1.00 per diluted share) related to the
Company's terminated merger with First Security Corporation. Other changes
reflected in the results for the first six months of 2000 compared to the same
period last year include a $23.4 (6.5%) increase in net interest income and a
$2.7 million (2.1%) increase in noninterest income excluding the $96.9 million
impairment loss on First Security Corporation common stock. Noninterest expense
excluding merger-related expense decreased $1.4 million (0.43%), the provision
for loan losses increased $2.6 million (29.0%), and income tax expense decreased
$44.2 million (82.3%).

11
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

OPERATING CASH EARNINGS RESULTS

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

Operating cash earnings for the quarter were $68.4 million or $0.79 per diluted
share, an increase of 15.4% and 14.5%, respectively, over the $59.3 million or
$0.69 per diluted share earned in the second quarter of 1999. Operating cash
earnings for the second quarter of 2000 increased 5.1% over the $65.1 million
earned during the first quarter of 2000. Operating cash earnings per diluted
share for the second quarter of 2000 increased 5.3% over the $.75 for the first
quarter of 2000. Year-to-date operating cash earnings were $133.5 million or
$1.54 per diluted share, an increase of 16.7% and 14.9%, respectively, over the
$114.4 million or $1.34 per diluted share earned in the first half of 1999.

The operating cash annualized return on average assets for the second quarter
and for the first six months of 2000 was 1.33% and 1.29% compared to 1.25% and
1.24%, respectively, in 1999. Operating cash annualized return on average common
shareholders' equity was 28.90% and 27.55% for the second quarter and for the
first six months of 2000, compared to the restated 27.34% and 27.28% for the
same periods of 1999. The Company's cash efficiency ratio for the second quarter
and for the first six months of 2000 was 58.16% and 58.33%, respectively,
compared to 61.76% and 61.95% for the same periods of 1999.

NET INTEREST INCOME AND INTEREST RATE SPREADS

Net interest income for the second quarter of 2000, adjusted to a fully
taxable-equivalent basis, increased 5.2% to $199.1 million compared to $189.3
million for the second quarter of 1999 and increased 2.2% from $194.8 million
for the first quarter of 2000. Net interest margin was 4.23% for the second
quarter of 2000, compared to 4.39% for the second quarter of 1999 and 4.14% for
the first quarter of 2000. Six-month net interest income, on a fully
taxable-equivalent basis, was $393.9 million in 2000, an increase of 6.5%
compared to $369.8 million for the first six months of 1999. Net interest margin
for the first six months of 2000 was 4.18%, compared to 4.39% for the first six
months of 1999. The decreased margins for 2000 compared to 1999 reflect
continued robust loan growth by the Company which has been financed by
short-term funding sources instead of the traditional core deposit growth
normally experienced by the Company.

The yield on average earning assets increased 69 basis points during the second
quarter of 2000 as compared to the second quarter of 1999, and 37 basis points
from the first quarter of 2000. The average rate paid this quarter on
interest-bearing funds increased 92 basis points from the second quarter of 1999
and increased 32 basis points from the first quarter of 2000. Comparing the
first six months of 2000 with 1999, the yield on average earning assets
increased 50 basis points, while the cost of interest-bearing funds increased by
75 basis points.

The spread on average interest-bearing funds for the second quarter of 2000 was
3.51%, down from the 3.74% for the second quarter of 1999 and up from the 3.46%
for the first quarter of 2000. The spread on average interest-bearing funds for
the first six months of 2000 was 3.48%, down from 3.73% for the first six months
of 1999.

12
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
June 30, 2000 June 30, 1999
-------------------------------------- --------------------------------------
Average Amount of Average Average Amount of Average
(In thousands) Balance Interest(1) Rate Balance Interest(1) Rate
------------ ------------ ------- ------------ ------------ -------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Money market investments ...................... $ 1,107,087 $ 18,313 6.65% $ 1,204,125 $ 17,128 5.71%
Securities:
Held to maturity ......................... 3,279,077 54,967 6.74% 3,190,395 50,393 6.34%
Available for sale ....................... 614,748 10,296 6.74% 670,678 9,575 5.73%
Trading account .......................... 615,975 9,712 6.34% 605,478 7,983 5.29%
------------ ------------ ------------ ------------
Total securities .................... 4,509,800 74,975 6.69% 4,466,551 67,951 6.10%
------------ ------------ ------------ ------------

Loans:
Loans held for sale ...................... 174,358 3,261 7.52% 175,563 3,088 7.05%
Net loans and leases(2)................... 13,152,721 304,575 9.31% 11,447,508 249,395 8.74%
------------ ------------ ------------ ------------
Total loans ......................... 13,327,079 307,836 9.29% 11,623,071 252,483 8.71%
------------ ------------ ------------ ------------
Total interest-earning assets.................. $ 18,943,966 $ 401,124 8.52% $ 17,293,747 $ 337,562 7.83%
------------ ------------
Cash and due from banks ....................... 833,878 842,440
Allowance for loan losses ..................... (201,311) (208,432)
Goodwill and core deposit intangibles ......... 652,838 650,697
Other assets .................................. 1,181,011 1,072,377
------------ ------------
Total assets .......................... $ 21,410,382 $ 19,650,829
============ ============

LIABILITIES
Interest-bearing deposits:
Savings and NOW deposits ................. $ 1,824,264 $ 9,727 2.14% $ 1,760,569 $ 11,127 2.53%
Money market super NOW deposits .......... 6,075,324 71,413 4.73% 5,462,042 48,239 3.54%
Time deposits under $100,000 ............. 1,705,326 21,029 4.96% 2,111,492 25,208 4.79%
Time deposits $100,000 or more ........... 1,130,266 15,638 5.56% 1,296,156 15,253 4.72%
Foreign deposits ......................... 132,195 1,577 4.80% 165,263 1,702 4.13%
------------ ------------ ------------ ------------
Total interest-bearing deposits ..... 10,867,375 119,384 4.42% 10,795,522 101,529 3.77%
------------ ------------ ------------ ------------
Borrowed funds:
Securities sold, not yet purchased ....... 303,219 4,830 6.41% 308,587 4,122 5.36%
Federal funds purchased and security
repurchase agreements ............... 2,784,960 40,186 5.80% 2,168,242 24,040 4.45%
Commercial paper ......................... 293,205 4,545 6.23% 135,921 1,717 5.07%
FHLB advances and other borrowings:
less than one year .................. 1,377,691 22,225 6.49% 620,951 7,288 4.71%
over one year ....................... 134,989 2,009 5.99% 57,007 896 6.30%
Long-term debt ........................... 446,993 8,846 7.96% 451,392 8,629 7.67%
------------ ------------ ------------ ------------
Total borrowed funds ................ 5,341,057 82,641 6.22% 3,742,100 46,692 5.00%
------------ ------------ ------------ ------------
Total interest-bearing liabilities .. $ 16,208,432 $ 202,025 5.01% $ 14,537,622 $ 148,221 4.09%
------------ ------------
Noninterest-bearing deposits .................. 3,244,613 3,247,237
Other liabilities ............................. 312,364 309,293
------------ ------------
Total liabilities ................... 19,765,409 18,094,152
Minority interest ............................. 40,172 36,224
Total shareholders' equity .......... 1,604,801 1,520,453
------------ ------------
Total liabilities and shareholders'
equity ........................... $ 21,410,382 $ 19,650,829
============ ============

Spread on average interest-bearing funds ...... 3.51% 3.74%
Net interest income and net yield on
interest-earning assets .................. $ 199,099 4.23% $ 189,341 4.39%
============ ============
</TABLE>

1 Taxable-equivalent rates used where applicable.
2 Net of unearned income and fees, net of related costs. Loans include
nonaccrual and restructured loans.

13
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)

Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999
-------------------------------------- --------------------------------------
Average Amount of Average Average Amount of Average
(In thousands) Balance Interest(1) Rate Balance Interest(1) Rate
------------ ------------ ------- ------------ ------------ -------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Money market investments ...................... $ 1,244,112 $ 38,402 6.21% $ 1,101,468 $ 31,944 5.85%
Securities:
Held to maturity ......................... 3,295,519 109,883 6.71% 3,129,986 98,502 6.35%
Available for sale ....................... 678,305 20,824 6.17% 707,262 20,936 5.97%
Trading account .......................... 604,255 18,668 6.21% 566,490 14,775 5.26%
------------ ------------ ------------ ------------
Total securities .................... 4,578,079 149,375 6.56% 4,403,738 134,213 6.15%
------------ ------------ ------------ ------------
Loans:
Loans held for sale ...................... 183,203 6,580 7.22% 193,856 6,493 6.75%
Net loans and leases(2)................... 12,928,492 590,170 9.18% 11,276,005 486,717 8.70%
------------ ------------ ------------ ------------
Total loans ......................... 13,111,695 596,750 9.15% 11,469,861 493,210 8.67%
------------ ------------ ------------ ------------
Total interest-earning assets ................. $ 18,933,886 $ 784,527 8.33% $ 16,975,067 $ 659,367 7.83%
------------ ------------
Cash and due from banks ....................... 850,665 824,657
Allowance for loan losses ..................... (203,296) (211,106)
Goodwill and core deposit intangibles ......... 657,848 653,687
Other assets .................................. 1,170,692 1,030,127
------------ ------------
Total assets .......................... $ 21,409,795 $ 19,272,432
============ ============

LIABILITIES
Interest-bearing deposits:
Savings and NOW deposits ................. $ 1,800,622 $ 19,575 2.19% $ 1,792,305 $ 21,072 2.37%
Money market super NOW deposits .......... 6,035,199 136,461 4.55% 5,229,348 92,944 3.58%
Time deposits under $100,000 ............. 1,756,156 42,651 4.88% 2,216,623 52,638 4.79%
Time deposits $100,000 or more ........... 1,194,490 31,088 5.23% 1,378,505 33,578 4.91%
Foreign deposits ......................... 142,371 3,601 5.09% 170,200 3,530 4.18%
------------ ------------ ------------ ------------
Total interest-bearing deposits ..... 10,928,838 233,376 4.29% 10,786,981 203,762 3.81%
------------ ------------ ------------ ------------
Borrowed funds:
Securities sold, not yet purchased ....... 302,817 9,605 6.38% 303,998 7,939 5.27%
Federal funds purchased and security
repurchase agreements ............... 2,956,192 82,109 5.59% 2,125,212 46,424 4.41%
Commercial paper ......................... 301,615 9,324 6.22% 102,868 2,621 5.14%
FHLB advances and other borrowings:
less than one year .................. 1,117,744 34,851 6.27% 405,997 9,554 4.75%
over one year ....................... 124,835 3,647 5.88% 55,209 1,717 6.27%
Long-term debt ........................... 449,776 17,676 7.90% 452,535 17,519 7.81%
------------ ------------ ------------ ------------
Total borrowed funds ................ 5,252,979 157,212 6.02% 3,445,819 85,774 5.02%
------------ ------------ ------------ ------------
Total interest-bearing liabilities .. $ 16,181,817 $ 390,588 4.85% $ 14,232,800 $ 289,536 4.10%
------------ ------------
Noninterest-bearing deposits .................. 3,253,840 3,213,033
Other liabilities ............................. 302,152 290,978
------------ ------------
Total liabilities ................... 19,737,809 17,736,811
Minority interest ............................. 39,918 36,588
Total shareholders' equity .......... 1,632,068 1,499,033
------------ ------------
Total liabilities and shareholders'
equity ........................... $ 21,409,795 $ 19,272,432
============ ============

Spread on average interest-bearing funds ...... 3.48% 3.73%
Net interest income and net yield on
interest-earning assets .................. $ 393,939 4.18% $ 369,831 4.39%
============ ============
</TABLE>

1 Taxable-equivalent rates used where applicable.
2 Net of unearned income and fees, net of related costs. Loans include
nonaccrual and restructured loans.

14
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

The Company manages its earnings sensitivity to interest rate movements, in
part, by matching the repricing characteristics of its assets and liabilities
and through the use of off-balance sheet arrangements such as caps, floors and
interest rate exchange contracts. Net interest income from the use of such
off-balance sheet arrangements for the first six months of 2000 was $1.7 million
compared to $5.4 million for the first six months of 1999.

PROVISION FOR LOAN LOSSES

The provision for loan losses increased 50.0% to $6.2 million for the second
quarter of 2000, as compared with $4.1 million for the second quarter of 1999,
and increased 18.4% from the $5.2 million for the first quarter of 2000. The
provision for loan losses for the first six months of 2000 totaled $11.5
million, 29.0% more than the $8.9 million provision for the first six months of
1999. Annualized the provision is .18% of average loans for 2000 compared to
.16% for 1999.

NONINTEREST INCOME

Noninterest income for the second quarter of 2000 was $70.6 million, an increase
of 12.0% from the $63.0 million for the second quarter of 1999 and an increase
of 16.5% from the $60.6 million for the first quarter of 2000 (excluding the
impairment loss on First Security Corporation common stock).

Comparing the segments of noninterest income for the second quarter of 2000 and
the second quarter of 1999, service charges on deposit accounts increased 3.4%,
other service charges and fees decreased 12.5%, trust income increased 7.2%,
underwriting and trading income decreased 37.4%, loan sales and servicing income
increased 2.4% and other income increased 125.3%. The increase in net investment
securities gain is mainly the result of pre-tax gains of $2.0 million recognized
on the sale of First Security Corporation common stock during the second quarter
of 2000. The increase in other income is mainly due to increased income of
approximately $5.2 million from nonmarketable securities including venture fund
investments and increased income from additional investments in bank owned life
insurance. Loan sales and servicing income for the second quarter of 2000 also
includes approximately $4.6 million of income resulting from maturity, interest
rate and default assumption adjustments in the securitization models utilized to
determine income from loan sales.

Noninterest income for the six months ended June 30, 2000 excluding the $96.9
million impairment loss on First Security Corporation common stock was $131.2
million, an increase of 2.1% from the $128.5 million for same period in 1999.

Comparing the segments of noninterest income for the first six months of 2000
with the first six months of 1999, service charges on deposit accounts increased
2.7%, other service charges, commissions and fees decreased 7.4%, trust income
increased 18.6%, underwriting and trading income decreased 26.0%, loans sales
and servicing income decreased 18.3%, and other income increased 33.4%. The
Company recognized a net gain of $3.5 million on the sale of securities during
the first six months of 2000 compared to a net loss of $1.1 million for the same
period in 1999. The decrease in income from loan sales and servicing is mainly
due to gains from the sale of mortgage servicing recognized during 1999. The
increase in other income results mainly from the factors discussed previously
for the second quarter increases in other income.

15
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

NONINTEREST EXPENSE

Noninterest expense for the second quarter of 2000 was $167.3 million, an
increase of 0.9% over $165.9 million for the second quarter of 1999, and a
decrease of 16.5% from the $200.3 million for the first quarter of 2000.
Excluding merger-related expenses, noninterest expense increased 4.7% for the
second quarter of 2000 compared to the first quarter of the year. The first
quarter of 2000 included a $4.1 million adjustment decreasing employee benefits
to reflect a reduced post retirement benefit obligation related to changes
adopted in the Company's Post Retirement Medical Benefits Plan. Without the
adjustment in the first quarter noninterest expense, excluding all
merger-related expenses, increased 2.0% from the first to second quarters of
2000. Comparing significant noninterest expense segments for the second quarter
of 2000 and the second quarter of 1999, salaries and employee benefits decreased
0.1%, occupancy increased 3.1%, furniture and equipment expense increased 21.5%,
and the total of all other expenses decreased 2.2%.

Noninterest expense for the six months ending June 30, 2000 was $367.6 million
which includes $42.7 million of merger-related expense. Excluding merger-related
expense noninterest expense decreased 0.4% for the first six months of 2000
compared to the same period in 1999. Comparing significant noninterest expense
segments for the first six months of 2000 and the comparable period in 1999,
salaries and employee benefits decreased 3.0%, occupancy decreased 0.2%,
furniture and equipment expense increased 20.7% and the total of all other
expenses excluding merger charges decreased 0.5%.

The increases in furniture and equipment expense for the second quarter and
first six months of 2000 compared to the same periods in 1999 is mainly
attributable to increased depreciation expense related to enhancements of
desktop and processing systems.

At June 30, 2000 the Company had 6,787 full-time equivalent employees, 364
offices and 498 ATMs compared to 6,911 full-time equivalent employees, 353
offices and 485 ATMs at June 30, 1999.

INCOME TAXES

The Company's income taxes increased 16.7% to $31.4 million for the second
quarter of 2000 compared to $26.9 million for the second quarter of 1999. The
Company's income taxes were $9.5 million for the first six months of 2000 as
compared to $53.7 million for the first six months of 1999. The Company's
effective income tax rate was 34.3% for the second quarter of 2000, compared to
34.4% for the second quarter of 1999. The effective income tax rate for the
first six months of 2000 was 23.3% compared to 35.0% for the first six months of
1999. The decreased rate is due to the effect of merger costs and the impairment
loss on First Security Corporation common stock, which are unusual, infrequently
occurring items.

ANALYSIS OF FINANCIAL CONDITION

EARNING ASSETS

Average earning assets increased 11.5% to $18,934 million for the six months
ended June 30, 2000, compared to $16,975 million for the six months ended June
30, 1999. Earning assets comprised 88.4% of total average assets for the first
six months of 2000, compared with 88.1% for the first six months of 1999.

Average money market investments, consisting of interest-bearing deposits,
federal funds sold and security resell agreements increased 13.0% to $1,244
million in the first six months of 2000 as compared to $1,101 million in the
first six months of 1999.

16
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

During the first six months of 2000, average securities increased 4.0% to $4,578
million compared to $4,404 million in the first six months of 1999. Average held
to maturity securities increased 5.3%, available for sale securities decreased
4.1%, and trading account securities increased 6.7% compared with the first six
months of 1999.

Average net loans and leases increased 14.3% to $13,112 million for the first
six months of 2000 compared to $11,470 million in the first six months of 1999,
representing 69.2% of earning assets in the first six months of 2000 compared to
67.6% in the first six months of 1999. Average net loans and leases were 92.4%
of average total deposits for the six months ended June 30, 2000, as compared to
81.9% for the six months ended June 30, 1999.

INVESTMENT SECURITIES

The following table presents the Company's investment securities on June 30,
2000, December 31, 1999 and June 30, 1999. As of June 30, 2000, the Company had
approximately $44 million of Small Business Administration originator fee
certificates that have been classified in other assets and are measured as
available for sale securities.

<TABLE>
<CAPTION>
June 30, December 31, June 30,
2000 1999 1999
--------------------- --------------------- ---------------------
Amortized Market Amortized Market Amortized Market
(In millions) cost value cost value cost value
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Held to maturity
U.S. Treasury Securities .......... $ 1 $ 1 $ 1 $ 1 $ 2 $ 2
U.S. government agencies and
corporations:
Small Business
Administration loan-
backed securities ......... 467 486 440 445 367 363
Other agency securities ........ 1,283 1,247 1,270 1,233 1,089 1,081
States and political subdivisions . 319 314 314 309 396 396
Mortgage-backed securities ........ 1,172 1,161 1,305 1,303 1,416 1,421
--------- --------- --------- --------- --------- ---------
3,242 3,209 3,330 3,291 3,270 3,263
--------- --------- --------- --------- --------- ---------
Available for sale
U.S. Treasury securities .......... 57 57 93 93 114 114
U.S. government agencies
corporations ................... 209 209 51 50 130 129
States and political subdivisions . 133 132 102 97 61 60
Mortgage and other asset-backed
securities ..................... 94 89 147 143 205 201
--------- --------- --------- --------- --------- ---------
493 487 393 383 510 504
--------- --------- --------- --------- --------- ---------
Equity securities:
Mutual funds:
Accessor Funds, Inc. ...... 154 140 141 139 120 120
Other Stock .................... 121 119 242 257 76 87
--------- --------- --------- --------- --------- ---------
275 259 383 396 196 207
--------- --------- --------- --------- --------- ---------
768 746 776 779 706 711
--------- --------- --------- --------- --------- ---------
Total ............................. $ 4,010 $ 3,955 $ 4,106 $ 4,070 $ 3,976 $ 3,974
========= ========= ========= ========= ========= =========
</TABLE>

17
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

LOANS

The Company has structured its organization to separate the lending function
from the credit administration function to strengthen the control and
independent evaluation of credit activities. Loan policies and procedures
provide the Company with a framework for consistent underwriting and a basis for
sound credit decisions. In addition, the Company has well-defined standards for
grading its loan portfolio, and management utilizes the comprehensive loan
grading system to determine risk potential in the portfolio. Another aspect of
the Company's credit risk management strategy is the diversification of the loan
portfolio. The Company has a well-diversified loan portfolio with no significant
exposure to highly leveraged transactions.

The table below sets forth the amount of loans outstanding by type on June 30,
2000, December 31, 1999 and June 30, 1999.

(In millions)

June 30, December 31, June 30,
Types 2000 1999 1999
----- ------------ ------------ ------------
<S> <C> <C> <C>
Loans held for sale ....................... $ 187 $ 205 $ 195
Commercial, financial, and agricultural ... 3,244 3,036 2,802
Real estate:
Construction ....................... 2,104 1,722 1,307
Other:
Home equity credit line .... 234 232 290
1-4 family residential ..... 2,869 2,503 2,364
Other real estate-secured .. 4,232 4,168 3,861
------------ ------------ ------------
7,335 6,903 6,515
------------ ------------ ------------
9,439 8,625 7,822
Consumer:
Bankcard ........................... 115 107 92
Other .............................. 450 490 502
------------ ------------ ------------
565 597 594

Lease financing ........................... 273 275 223
Foreign loans ............................. 39 53 51
Other receivables ......................... 98 62 73
------------ ------------ ------------
Total loans ........................ $ 13,845 $ 12,853 $ 11,760
============ ============ ============
</TABLE>

Loans held for sale on June 30, 2000 decreased 8.9% from December 31, 1999. All
other loans, net of unearned income and fees increased 8.0% to $13,589 million
on June 30, 2000 compared to $12,586 million on December 31, 1999. Commercial
loans, construction loans, and other real estate-secured loans, increased from
year end 6.8%, 22.2%, and 6.3%, respectively, as consumer loans, lease
financing, and foreign loans decreased 5.4%, .7%, and 26.4%, respectively.
Within the other real estate-secured loan portfolio, home equity credit line
loans increased 0.9%, 1-4 family residential loans increased 14.6% and all other
real estate loans increased 1.5% from year end.

18
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

On June 30, 2000, long-term first mortgage real estate loans serviced for others
totaled $221 million
and consumer and other loan securitizations, which relate primarily to loans
sold under revolving securitization structures, totaled $1,201 million. During
the first six months of 2000, the Company sold $282 million of loans classified
in held for sale, and securitized and sold home equity credit line loans, credit
card receivables and automobile loans totaling $277 million. During the first
six months of 2000, total loans sold were $559 million compared to total loans
sold of $1,173 million during the first six months of 1999.

RISK ELEMENTS

The Company's nonperforming assets, which include nonaccruing loans,
restructured loans, other real estate owned and other nonperforming assets, were
$84 million on June 30, 2000, up from $75 million on December 31, 1999, and up
from $59 million on June 30, 1999. Such nonperforming assets as a percentage of
net loans and leases, other real estate owned and other nonperforming assets
were .61%, .58% and .50% on June 30, 2000, December 31, 1999, and June 30, 1999,
respectively.

Accruing loans past due 90 days or more totaled $22 million on June 30, 2000, up
from $21 million on December 31, 1999, and down from $27 million on June 30,
1999. These loans equaled .16% of net loans and leases on June 30, 2000, and
December 31, 1999 and .23% on June 30, 1999.

No loans to borrowers were considered potential problem loans at June 30, 2000,
December 31, 1999 and June 30, 1999. Potential problem loans are defined as
loans presently on accrual, not contractually past due 90 days or more and not
restructured, but about which management has serious doubt as to the future
ability of the borrower to comply with present repayment terms and which may
result in the reporting of the loans as nonperforming assets.

The Company's total recorded investment in impaired loans included in nonaccrual
loans and leases, amounted to $68 million on June 30, 2000, as compared to $57
million on December 31, 1999, and $36 million on June 30, 1999. The Company
considers a loan to be impaired when the accrual of interest has been
discontinued and it meets other criteria under the statements. The amount of the
impairment is measured based on the present value of expected cash flows, the
observable market price of the loan, or the fair value of the collateral.
Impairment losses are included in the allowance for loan losses through a
provision for loan losses. Included in the allowance for loan losses on June 30,
2000, December 31, 1999, and June 30, 1999, is a required allowance of $17
million, $16 million and $16 million, respectively, on $25 million, $22 million
and $21 million, respectively, of the recorded investment in impaired loans.

19
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

The following table sets forth the nonperforming assets on June 30, 2000,
December 31, 1999, and June 30, 1999.

June 30, December 31, June 30,
(In millions) 2000 1999 1999
------------ ------------ ------------
<S> <C> <C> <C>
Nonaccrual loans ............................... $ 79 $ 65 $ 48
Restructured loans ............................. 1 1 3
Other real estate owned and other
nonperforming assets ...................... 4 9 7
------------ ------------ ------------
Total ..................................... $ 84 $ 75 $ 59
============ ============ ============
% of net loans and leases*, other real estate
owned and other nonperforming assets ...... .61% .58% .50%

Accruing loans past due 90 days or more ........ $ 22 $ 21 $ 27
============ ============ ============

% of net loans and leases* ..................... .16% .16% .23%
*Includes loans held for sale ..................
</TABLE>

ALLOWANCE FOR LOAN LOSSES

The Company's allowance for loan losses was 1.43% of net loans and leases on
June 30, 2000, compared to 1.60% on December 31, 1999, and 1.81% on June 30,
1999. Net charge-offs during the second quarter of 2000 were $9 million, or
annualized .27% of average net loans and leases, compared to net recoveries of
$2 million for the second quarter of 1999. Net charge-offs for the first six
months of 2000 were $18 million, or annualized .28% of average net loans and
leases, compared to $9 million or .16% of average net loans and leases for the
first six months of 1999.

The allowance, as a percentage of nonaccrual loans and restructured loans, was
246.2% on June 30, 2000, compared to 310.9% on December 31, 1999, and 413.9% on
June 30, 1999. The allowance, as a percentage of nonaccrual loans and accruing
loans past due 90 days or more was 194.2% on June 30, 2000, compared to 238.1%
on December 31, 1999 and 281.7% on June 30, 1999.

On June 30, 2000, December 31, 1999, and June 30, 1999, the allowance for loan
losses includes an allocation of $28 million, $23 million, and $21 million,
respectively, related to commitments to extend credit on loans and standby
letters of credit. Commitments to extend credit on loans and standby letters of
credit on June 30, 2000, December 31, 1999 and June 30, 1999 totaled $6,260
million, $6,001 million and $5,574 million, respectively.

20
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

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

The following table shows the changes in the allowance for loan losses and a
summary of loan loss experience.

Six Months Twelve Months Six Months
Ended Ended Ended
(In millions) June 30, December 31, June 30,
2000 1999 1999
------------ ------------ ------------
<S> <C> <C> <C>
Average loans* and leases outstanding
(net of unearned income) ............... $ 13,112 $ 11,819 $ 11,470
============ ============ ============
Allowance for possible losses:
Balance at beginning of the period .......... $ 204 $ 212 $ 212
Allowance of companies acquired ............. -- 3 --
Provision charged against earnings .......... 11 18 9
Loans and leases charged-off:
Loans held for sale .................... -- -- --
Commercial, financial and agricultural . (14) (32) (14)
Real estate ............................ (2) (3) --
Consumer ............................... (5) (9) (4)
Lease financing ........................ (1) (2) (2)
------------ ------------ ------------
Total ............................. (22) (46) (20)
------------ ------------ ------------
Recoveries:
Loans held for sale .................... -- -- --
Commercial, financial and agricultural . 2 6 4
Real estate ............................ 1 7 6
Consumer ............................... 1 3 1
Lease financing ........................ -- 1 --
------------ ------------ ------------
Total ............................. 4 17 11
------------ ------------ ------------
Net loan and lease charge-offs .............. (18) (29) (9)
------------ ------------ ------------
Balance at end of the period ................ $ 197 $ 204 $ 212
============ ============ ============

*Includes loans held for sale

Ratio of net charge-offs to
average loans and leases ............... .28% .25% .16%
</TABLE>

21
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

DEPOSITS

Average total deposits of $14,183 million for the first six months of 2000
increased 1.3% compared to $14,000 million for the first six months of 1999,
with average demand deposits also increasing 1.3%. Average savings and NOW
deposits and average money market and super NOW deposits increased .5%, and
15.4%, respectively, during the first six months of 2000, compared with the same
period one year earlier. Average time deposits under $100,000, time deposits
over $100,000 and foreign deposits for the first six months of 2000 decreased
20.8%, 13.3%, and 16.4% respectively, from the first six months of 1999.

Total deposits increased 3.2% to $14,514 million on June 30, 2000 as compared to
$14,062 million on December 31, 1999. Comparing June 30, 2000 to December 31,
1999, demand deposits, savings and money market deposits, and time deposits over
$100,000 increased 4.4%, 2.2%, and 36.6%, respectively, while time deposits
under $100,000 and foreign deposits decreased 9.3%, and 39.5%, respectively.

LIQUIDITY AND INTEREST RATE SENSITIVITY

The Company manages its liquidity to provide adequate funds to meet its
financial obligations, including withdrawals by depositors and debt service
requirements, as well as to fund customers' demand for credit. Liquidity is
primarily provided by the regularly scheduled maturities of the Company's
investment and loan portfolios.

The Company's core deposits, consisting of demand, savings and money market
deposits and time deposits under $100,000, constituted 89.0% of total deposits
on June 30, 2000 as compared to 90.8% on December 31, 1999 and 90.2% on June 30,
1999.

Maturing balances in loan portfolios provide flexibility in managing cash flows.
Maturity management of those funds is an important source of medium to long-term
liquidity. The Company's ability to raise funds in the capital markets through
the securitization process and by debt issuance allows the Company to take
advantage of market opportunities to meet funding needs at reasonable cost.

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

Interest rate risk is the most significant market risk regularly undertaken by
Company. The Company believes there have been no significant changes in market
risk compared to the disclosures in Zions Bancorporation's Annual Report to
Shareholders on Form 10-K for the year ended December 31, 1999.

Interest rate sensitivity measures the Company's financial exposure to changes
in interest rates. Interest rate sensitivity is, like liquidity, affected by
maturities of assets and liabilities. The Company assesses its interest rate
sensitivity using duration and simulation analysis. Duration is a measure of the
weighted average expected lives of the discounted cash flows from assets and
liabilities. Simulation is used to estimate net interest income over time using
alternative interest rate scenarios.

22
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

The Company, through the management of maturities and repricing of its assets
and liabilities and the use of off-balance sheet arrangements such as interest
rate caps, floors, futures, options, and interest rate exchange agreements,
attempts to minimize the effect on net income of changes in interest rates. The
Company's management exercises its best judgment in making assumptions with
respect to loan and security prepayments, early deposit withdrawals and other
noncontrollable events in managing the Company's exposure to changes in interest
rates. The interest rate risk position is actively managed and changes daily as
the interest rate environment changes; therefore, positions at the end of any
period may not be reflective of the Company's interest rate position in
subsequent periods. The prime lending rate is the primary basis used for pricing
the Company's loans and the short-term Treasury rate is the index used for
pricing many of the Company's deposits.

CAPITAL RESOURCES AND DIVIDENDS

Total shareholders' equity on June 30, 2000 was $1,634 million, a decrease of
1.6% over the $1,660 million on December 31, 1999, and an increase of 7.4% over
the $1,521 million on June 30, 1999. The decrease at June 30, 2000 compared to
December 31, 1999 is due to the loss incurred during the first quarter of 2000
resulting from the failed merger with First Security Corporation. The ratio of
average equity to average assets for the first six months of 2000 was 7.62% as
compared to 7.78% for the same period in 1999. On June 30, 2000, the Company's
Tier I risk-based capital ratio was 7.97%, as compared to 8.64% on December 31,
1999 and 8.71% on June 30, 1999. On June 30, 2000 the Company's total risk-based
capital ratio was 10.51%, as compared to 11.29% on December 31, 1999 and 11.57%
on June 30, 1999. The Company's leverage ratio on June 30, 2000 was 5.91%, as
compared to 6.16% on December 31, 1999 and 6.00% on June 30, 1999.

Dividends declared per common share for the second quarter of 2000 of $.20
decreased 31.0%, as compared to $.29 for the second quarter of 1999 and the
first quarter of 2000. The common cash dividend payout of net income for the
first six months of 2000 before the impairment loss recognized on First Security
Corporation common stock was 46.16%, as compared to 34.78% for the first six
months of 1999.

During the first six months of 2000, the Company repurchased and retired 78,428
shares of its common stock at a cost of $3.8 million.

23
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
OPERATING SEGMENT INFORMATION

The following is a summary of selected operating segment information for the
three months and six months ended June 30, 2000 and June 30, 1999. The Company
manages its operations and prepares management reports with a primary focus on
geographical area. All segments presented, except for the segment defined as
"other" are based on commercial banking operations. Zions First National Bank
and subsidiaries operates 118 branches in Utah and 19 in Idaho. California Bank
& Trust operates 75 branches in Northern and Southern California. Vectra Bank
Colorado operates 54 branches in Colorado and one branch in New Mexico. National
Bank of Arizona operates a total of 37 branches in Arizona. Nevada State Bank
operates 58 offices in Nevada, and The Commerce Bank of Washington operates 1
office in Washington. The operating segment defined as "other" includes the
Parent company, smaller nonbank operating units, and eliminations of
transactions between segments.

The accounting policies of the individual segments are the same as those of the
Company. The Company allocates centrally provided services to the business
segments based upon estimated usage of those services. The following table
presents Operating Segment Information for the three months ended June 30, 2000
and for the three months ended June 30, 1999.

ZIONS FIRST NATIONAL
BANK CALIFORNIA VECTRA BANK NATIONAL BANK OF
AND SUBSIDIARIES BANK & TRUST COLORADO ARIZONA
------------------- ------------------- -------------------- ---------------------
(Amounts in millions) 2000 1999 2000 1999 2000 1999 2000 1999
-------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONDENSED INCOME STATEMENT
Net interest income ...................... $ 55.1 $ 55.0 $ 72.8 $ 65.5 $ 21.8 $ 21.4 $ 21.0 $ 18.8
Provision for loan losses ................ 2.3 2.3 -- -- 1.3 0.7 1.0 0.6
Noninterest income ....................... 41.2 37.4 10.9 9.3 5.0 4.0 3.5 3.5
Merger expense and amortization of
goodwill and core deposit intangibles . 0.8 0.5 5.2 4.4 3.3 4.7 0.5 0.5
Noninterest expense ...................... 52.7 52.6 44.2 45.7 19.2 17.4 11.6 10.5
Income tax expense (benefit) ............. 12.6 11.1 15.4 11.3 1.8 1.2 4.5 4.3
Minority interest ........................ (0.3) (0.2) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------- ---------
Net income .......................... $ 28.2 $ 26.1 $ 18.9 $ 13.4 $ 1.2 $ 1.4 $ 6.9 $ 6.4
======== ======== ======== ======== ======== ======== ========= =========

AVERAGE BALANCE SHEET DATA
Total assets ............................. $ 8,258 $ 7,280 $ 6,631 $ 6,228 $ 2,162 $ 2,147 $ 1,605 $ 1,513
Net loans and leases ..................... 4,434 3,652 4,652 4,214 1,403 1,300 1,237 1,087
Total deposits ........................... 3,894 3,731 5,332 5,349 1,419 1,602 1,246 1,261

NEVADA STATE BANK THE COMMERCE BANK OF
AND SUBSIDIARIES WASHINGTON OTHER CONSOLIDATED COMPANY
------------------- ------------------- -------------------- ---------------------
(Amounts in millions) 2000 1999 2000 1999 2000 1999 2000 1999
-------- -------- -------- -------- -------- -------- --------- ---------
CONDENSED INCOME STATEMENT
Net interest income ...................... $ 25.1 $ 24.6 $ 5.0 $ 3.7 $ (6.2) $ (3.6) $ 194.6 $ 185.4
Provision for loan losses ................ 1.5 0.9 0.3 -- (0.1) (0.3) 6.3 4.2
Noninterest income ....................... 5.5 6.6 0.5 0.2 4.0 2.0 70.6 63.0
Merger expense and amortization of
goodwill and core deposit intangibles . 0.6 0.6 -- -- 0.1 (0.7) 10.5 10.0
Noninterest expense ...................... 18.0 20.2 2.2 1.8 8.9 7.7 156.8 155.9
Income tax expense (benefit) ............. 3.5 2.9 1.0 0.7 (7.4) (4.5) 31.4 27.0
Minority interest ........................ -- -- -- -- 0.9 0.7 0.6 0.5
-------- -------- -------- -------- -------- -------- --------- ---------
Net income .......................... $ 7.0 $ 6.6 $ 2.0 $ 1.4 $ (4.6) $ (4.5) $ 59.6 $ 50.8
======== ======== ======== ======== ======== ======== ========= =========

AVERAGE BALANCE SHEET DATA
Total assets ............................. $ 2,355 $ 2,227 $ 413 $ 351 $ (14) $ (95) $ 21,410 $ 19,651
Net loans and leases ..................... 1,359 1,188 214 163 28 19 13,327 11,623
Total deposits ........................... 1,979 1,894 295 233 (53) (27) 14,112 14,043
</TABLE>

24
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

The following table presents Operating Segment Information for the six months
ended June 30, 2000 and for the six months ended June 30, 1999.

<TABLE>
<CAPTION>
ZIONS FIRST NATIONAL
BANK CALIFORNIA VECTRA BANK NATIONAL BANK OF
AND SUBSIDIARIES BANK & TRUST COLORADO ARIZONA
------------------- ------------------- -------------------- ---------------------
(Amounts in millions) 2000 1999 2000 1999 2000 1999 2000 1999
-------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONDENSED INCOME STATEMENT
Net interest income ...................... $ 108.8 $ 109.9 $ 143.6 125.6 $ 43.7 $ 41.5 $ 41.4 $ 36.8
Provision for loan losses ................ 2.5 4.5 -- -- 2.4 1.3 1.7 1.2
Noninterest income ....................... 74.2 79.0 20.8 17.8 9.1 9.0 6.8 6.2
Merger expense and amortization of
goodwill and core deposit intangibles . 4.5 1.0 14.6 8.2 7.0 8.2 0.9 1.0
Noninterest expense ...................... 104.6 105.5 91.2 92.0 36.8 35.3 22.8 20.9
Income tax expense (benefit) ............. 21.7 23.8 26.6 20.0 3.9 3.2 9.0 7.9
Minority interest ........................ (1.4) 0.7 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------- ---------
Net income .......................... $ 51.1 $ 53.4 $ 32.0 $ 23.2 $ 2.7 $ 2.5 $ 13.8 $ 12.0
======== ======== ======== ======== ======== ======== ========= =========

AVERAGE BALANCE SHEET DATA
Total assets ............................. $ 8,265 $ 7,056 $ 6,596 $ 6,204 $ 2,158 $ 2,119 $ 1,607 $ 1,482
Net loans and leases ..................... 4,283 3,608 4,616 4,210 1,388 1,251 1,233 1,063
Total deposits ........................... 3,955 3,760 5,364 5,332 1,441 1,610 1,239 1,237

NEVADA STATE BANK THE COMMERCE BANK OF
AND SUBSIDIARIES WASHINGTON OTHER CONSOLIDATED COMPANY
------------------- ------------------- -------------------- ---------------------
(Amounts in millions) 2000 1999 2000 1999 2000 1999 2000 1999
-------- -------- -------- -------- -------- -------- --------- ---------
CONDENSED INCOME STATEMENT
Net interest income ...................... $ 50.4 $ 48.2 $ 9.7 $ 7.2 $ (12.0) (7.0) $ 385.6 $ 362.2
Provision for loan losses ................ 4.5 1.8 0.5 0.4 (0.1) (0.3) 11.5 8.9
Noninterest income ....................... 11.9 12.7 0.8 0.4 (89.3) 3.4 34.3 128.5
Merger expense and amortization of
goodwill and core deposit intangibles . 5.1 1.0 -- -- 29.2 0.4 61.3 19.8
Noninterest expense ...................... 35.5 39.0 4.4 3.5 11.0 12.5 306.3 308.7
Income tax expense (benefit) ............. 5.7 5.8 1.9 1.2 (59.3) (8.2) 9.5 53.7
Minority interest ........................ -- -- -- -- 1.6 1.2 0.2 1.9
-------- -------- -------- -------- -------- -------- --------- ---------
Net income .......................... $ 11.5 $ 13.3 $ 3.7 $ 2.5 $ (83.7) $ (9.2) $ 31.1 $ 97.7
======== ======== ======== ======== ======== ======== ========= =========

AVERAGE BALANCE SHEET DATA
Total assets ............................. $ 2,337 $ 2,182 $ 416 $ 343 $ 31 $ (114) $ 21,410 $ 19,272
Net loans and leases ..................... 1,358 1,160 208 158 26 20 13,112 11,470
Total deposits ........................... 1,955 1,860 296 228 (67) (27) 14,183 14,000
</TABLE>

25
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

MERGERS AND ACQUISITIONS

On January 7, 2000, the Company announced a definitive agreement to acquire
County Bank in Prescott, Arizona, in exchange for Zions Bancorporation common
stock. As of December 31, 1999, County Bank had total assets of approximately
$242 million. The transaction is expected to be accounted for as a pooling of
interests and closed on July 28, 2000.

FORWARD-LOOKING INFORMATION

Statements in Management's Discussion and Analysis that are not based on
historical data are forward- looking, including, for example, the projected
performance of Zions and its operations. These statements constitute
forward-looking information within the meaning of the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from the
projections discussed in Management's Discussion and Analysis since such
projections involve significant risks and uncertainties. Factors that might
cause such differences include, but are not limited to: the timing of closing
proposed acquisitions being delayed or such acquisitions being prohibited;
competitive pressures among financial institutions increasing significantly;
economic conditions, either nationally or locally in areas in which Zions
conducts its operations, being less favorable than expected; and legislation or
regulatory changes which adversely affect the Company's operations or business.
Zions disclaims any obligation to update any such factors or to publicly
announce the results of any revisions to any of the forward-looking statements
included herein to reflect future events or developments.

26
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

PART II. OTHER INFORMATION
-----------------

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
-----------------------------------------------

The following is a summary of matters submitted to vote at the Annual Meeting of
Shareholders of Zions Bancorporation:

a) The Annual Meeting of Shareholders was held on May 26, 2000.
Total number of shares eligible for voting was 85,695,210.

b) Election of Directors

Proxies were solicited by Zions Bancorporation's
management pursuant to Regulation 14A under the
Securities Exchange Act of 1934. There was no
solicitation in opposition to management's nominees
as listed in the proxy statement, and all of such
nominees were elected pursuant to the vote of the
shareholders as indicated in the proxy statement.

c) The matters voted upon and the results were as follows:

(1) Election of Directors

Withhold
For Authority
---------- ---------
R. D. Cash 68,521,758 212,020
Richard H. Madsen 68,511,511 222,267
Robert G. Sarver 68,445,673 288,105
Harris H. Simmons 68,490,143 243,635

(2) Approve amendments to the Key Employee Incentive Stock Option Plan

Approval of amendments to the Company's Key Employee Incentive
Stock Option Plan.

For Against Abstain
63,542,572 4,242,469 748,737

27
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

PART II. OTHER INFORMATION (CONTINUED)

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------

a) Exhibits

Exhibit 27 Article 9 Financial Data Schedule

b) Reports on Form 8-K

Zions Bancorporation filed the following reports on Form
8-K during the quarter ended June 30, 2000;

Form 8-K filed June 23, 2000 (Item 4). Effective June 19, 2000. Zions
Bancorporation dismissed its independent auditor, KPMG LLP, and
appointed Ernst & Young LLP to perform independent attestation services.

S I G N A T U R E S
-------------------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

ZIONS BANCORPORATION

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

/s/Dale M. Gibbons
--------------------------------
Dale M. Gibbons, Executive Vice President
and Chief Financial Officer

Dated August 11, 2000