ZIONS BANCORPORATION /UT/, 10-Q, 2000-11-13

ZIONS BANCORPORATION /UT/
10-Q, 2000-11-13
NATIONAL COMMERCIAL BANKS

Previous: ZIONS BANCORPORATION /UT/, S-8, EX-23.1, 2000-11-13

Next: ZIONS BANCORPORATION /UT/, 10-Q, EX-27, 2000-11-13

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 September 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 November 7, 2000 86,998,202 shares

<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 11

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 24

PART II. OTHER INFORMATION

ITEM 6. Exhibits and Reports on Form 8-K 27

SIGNATURES 27
----------

2
<PAGE>

PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31, September 30,
(In thousands, except share data) 2000 1999 1999
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks ............................................ $ 942,345 $ 898,300 $ 796,348
Money market investments:
Interest-bearing deposits ..................................... 20,218 17,371 16,562
Federal funds sold ............................................ 122,410 85,898 207,036
Security resell agreements .................................... 630,111 421,900 519,546

Investment securities:
Held to maturity, at cost (approximate market value
$3,243,799, $3,290,508, and $3,343,152) ..................... 3,242,734 3,330,444 3,368,861
Available for sale, at market ................................. 598,483 778,930 844,544
Trading account, at market..................................... 420,807 327,845 531,710
------------- ------------- -------------
4,262,024 4,437,219 4,745,115
Loans:
Loans held for sale ........................................... 226,028 204,800 154,115
Loans, leases, and other receivables .......................... 13,917,970 12,648,325 12,000,324
------------- ------------- -------------
14,143,998 12,853,125 12,154,439
Less:
Unearned income and fees, net of related costs ................ 75,004 62,480 55,817
Allowance for loan losses ..................................... 200,401 204,114 205,926
------------- ------------- -------------
Net Loans ............................................... 13,868,593 12,586,531 11,892,696

Premises and equipment, net ........................................ 307,905 287,448 281,558
Goodwill and core deposit intangibles .............................. 638,257 666,219 634,093
Other real estate owned ............................................ 6,744 8,939 9,699
Other assets ....................................................... 1,125,712 871,075 968,015
------------- ------------- -------------
$ 21,924,319 $ 20,280,900 $ 20,070,668
============= ============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing ............................................ $ 3,536,203 $ 3,276,097 $ 3,249,970
Interest-bearing:
Savings and money market .................................. 8,202,580 7,660,786 7,508,577
Time:
Under $100,000 ........................................ 1,672,725 1,836,645 1,928,884
Over $100,000 ......................................... 1,652,853 1,078,631 1,114,238
Foreign ................................................... 103,314 209,780 148,446
------------- ------------- -------------
15,167,675 14,061,939 13,950,115

Securities sold, not yet purchased ................................. 291,733 237,020 183,954
Federal funds purchased ............................................ 721,621 825,997 790,614
Security repurchase agreements ..................................... 1,342,699 1,366,653 1,268,232
Accrued liabilities ................................................ 438,906 247,406 586,588
Commercial paper ................................................... 246,188 238,660 284,014
Federal Home Loan Bank advances and other borrowings:
Less than one year ............................................ 1,380,905 1,038,045 856,943
Over one year ................................................. 159,469 112,622 117,317
Long-term debt ..................................................... 419,852 453,471 453,152
------------- ------------- -------------
Total liabilities ......................................... 20,169,048 18,581,813 18,490,929
------------- ------------- -------------

Minority interest .................................................. 39,576 39,249 38,094

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 86,964,292,
85,592,643 and 84,404,653 shares ....................... 901,569 888,231 820,728
Accumulated other comprehensive loss .......................... (12,185) (4,158) (12,276)
Retained earnings ............................................. 826,311 775,765 733,193
------------- ------------- -------------
Total shareholders' equity ............................... 1,715,695 1,659,838 1,541,645
------------- ------------- -------------
$ 21,924,319 $ 20,280,900 $ 20,070,668
============= ============= =============
</TABLE>

3
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- --------------------------
(In thousands, except per share data) 2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans .................................. $ 326,995 $ 253,954 $ 906,521 $ 732,157
Interest on loans held for sale ............................. 4,180 2,780 10,760 9,273
Lease financing ............................................. 4,272 3,094 12,584 9,771
Interest on money market investments ........................ 14,865 17,596 53,267 49,540
Interest on securities:
Held to maturity:
Taxable ........................................... 50,154 44,482 147,481 128,462
Nontaxable ........................................ 4,354 4,882 12,515 14,321
Available for sale:
Taxable ........................................... 8,695 9,451 24,884 28,235
Nontaxable ........................................ 1,940 712 4,953 2,111
Trading account ........................................ 9,027 7,333 27,695 22,108
----------- ----------- ----------- -----------
Total interest income .................................. 424,482 344,284 1,200,660 995,978
----------- ----------- ----------- -----------
Interest expense:
Interest on savings and money market deposits ............... 86,096 64,099 242,132 178,115
Interest on time and foreign deposits ....................... 47,186 38,877 124,526 128,623
Interest on borrowed funds .................................. 83,171 53,491 240,383 139,265
----------- ----------- ----------- -----------
Total interest expense ................................. 216,453 156,467 607,041 446,003
----------- ----------- ----------- -----------
Net interest income .................................... 208,029 187,817 593,619 549,975
Provision for loan losses ........................................ 8,119 4,517 19,581 13,401
----------- ----------- ----------- -----------
Net interest income after provision for loan losses .... 199,910 183,300 574,038 536,574
----------- ----------- ----------- -----------
Noninterest income:
Service charges on deposit accounts ......................... 18,713 19,601 57,025 56,905
Other service charges, commissions and fees ................. 17,670 15,873 49,369 50,106
Trust income ................................................ 4,551 4,226 13,586 11,847
Investment securities gain (loss), net ...................... 5,768 (246) 9,224 (1,335)
Impairment loss on First Security Corporation common stock .. -- -- (96,911) --
Underwriting and trading income ............................. 2,733 1,549 8,096 8,793
Loan sales and servicing income ............................. 11,837 10,623 34,367 38,205
Other income ................................................ 14,077 11,965 34,881 27,557
----------- ----------- ----------- -----------
Total noninterest income ............................... 75,349 63,591 109,637 192,078
----------- ----------- ----------- -----------
Noninterest expense:
Salaries and employee benefits .............................. 86,750 86,990 254,261 259,718
Occupancy, net .............................................. 13,034 11,927 38,163 37,115
Furniture and equipment ..................................... 13,212 11,275 39,113 32,740
Other real estate expense (income) .......................... 439 36 855 (406)
Legal and professional services ............................. 4,907 3,796 15,433 12,652
Supplies .................................................... 2,694 2,796 7,970 8,648
Postage ..................................................... 2,814 3,291 8,308 9,201
Advertising ................................................. 6,029 4,571 16,154 13,813
Merger related expense ...................................... 1,513 2,151 44,208 4,315
FDIC premiums ............................................... 808 514 2,569 1,710
Amortization of goodwill and core deposit intangibles ....... 9,309 8,887 27,906 26,521
Amortization of mortgage servicing assets ................... 22 105 143 871
Other ....................................................... 32,395 26,699 86,467 84,631
----------- ----------- ----------- -----------
Total noninterest expense ............................... 173,926 163,038 541,550 491,529
----------- ----------- ----------- -----------
Income before income taxes and minority interest ................. 101,333 83,853 142,125 237,123
Income taxes ..................................................... 35,646 29,273 45,136 82,946
----------- ----------- ----------- -----------
Net income before minority interest .................... 65,687 54,580 96,989 154,177
Minority interest ................................................ 1,043 802 1,254 2,662
----------- ----------- ----------- -----------
Net income ............................................. $ 64,644 $ 53,778 $ 95,735 $ 151,515
=========== =========== =========== ===========

Basic shares ..................................................... 86,909 84,413 86,089 84,331
Diluted shares ................................................... 87,610 85,409 86,836 85,442
Net income per common share:
Basic ....................................................... $ 0.74 $ 0.64 $ 1.11 $ 1.80
Diluted ..................................................... $ 0.74 $ 0.63 $ 1.10 $ 1.77
</TABLE>

4
<PAGE>

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

<TABLE>
<CAPTION>
Three Months Ended Nine months Ended
September 30, September 30,
------------------------------ ------------------------------
(In thousands) 2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income .................................................... $ 64,644 $ 53,778 $ 95,735 $ 151,515
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Provision for loan losses .................................. 8,119 4,517 19,581 13,401
Depreciation of premises and equipment ..................... 12,077 10,446 34,895 29,774
Amortization ............................................... 12,573 16,602 37,144 43,443
Accretion of unearned income and fees, net of
related costs ......................................... 4,338 3,009 11,862 12,777
Income to minority interest ................................ 1,043 802 1,254 2,662
Proceeds from sales of trading account securities .......... 14,648,618 48,729,908 92,289,053 142,927,358
Increase in trading account securities ..................... (14,729,355) (48,845,488) (92,382,015) (143,267,213)
Investment securities (gain) loss, net ..................... (5,768) 246 (9,224) 1,335
Impairment loss on First Security Corporation common stock . -- -- 96,911 --
Proceeds from loans held for sale .......................... 108,035 227,714 390,520 732,185
Increase in loans held for sale ............................ (148,238) (186,692) (412,629) (655,057)
Net gain on sales of loans, leases and other assets ........ (10,042) (6,588) (26,916) (29,195)
Change in accrued income taxes ............................. 22,170 13,886 37,699 44,422
Change in accrued interest receivable ...................... (27,527) (16,417) (36,947) (22,513)
Change in accrued interest payable ......................... 9,806 (41) 12,581 (2,036)
Other, net ................................................. (30,390) 140,859 (73,633) 29,060
------------- ------------- ------------- -------------
Net cash provided by (used in) operating activities ..... (59,897) 146,541 85,871 11,918
------------- ------------- ------------- -------------
Cash flows from investing activities:
Net increase in money market investments ................... (42,042) (280,486) (245,020) (83,264)
Proceeds from maturities of investment securities
held to maturity ...................................... 115,137 158,538 664,489 734,736
Purchases of investment securities held to maturity ........ (117,211) (261,041) (561,767) (1,264,123)
Proceeds from sales of investment securities
available for sale .................................... 759,309 78,542 1,015,572 230,292
Proceeds from maturities of investment securities
available for sale .................................... 31,317 38,128 111,268 198,331
Purchases of investment securities available for sale ...... (558,509) (263,074) (1,009,994) (549,565)
Proceeds from sales of loans and leases .................... 649,929 190,459 942,063 813,629
Net increase in loans and leases ........................... (752,022) (635,491) (2,059,769) (1,782,947)
Payments on leveraged leases ............................... (3,182) (3,950) (8,125) (8,118)
Principal collections on leveraged leases .................. 3,182 3,950 8,125 8,118
Proceeds from sales of premises and equipment .............. 3,386 10,648 8,369 14,059
Purchases of premises and equipment ........................ (13,119) (34,862) (48,107) (76,284)
Proceeds from sales of mortgage-servicing rights ........... 1,219 773 3,213 21,776
Purchases of mortgage-servicing rights ..................... (61) (86) (123) (1,014)
Proceeds from sales of other assets ........................ 1,707 2,251 8,679 5,793
Cash paid for acquisitions, net of cash received ........... 13,946 -- 13,946 592
------------- ------------- ------------- -------------
Net cash provided by (used in) investing activities ..... 92,986 (995,701) (1,157,181) (1,737,989)
------------- ------------- ------------- -------------
</TABLE>

5
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine months Ended
September 30, September 30,
------------------------------ ------------------------------
(In thousands) 2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Cash flows from financing activities:
Net increase (decrease) in deposits ........................ 430,454 (83,899) 882,498 (276,256)
Net change in short-term funds borrowed .................... (401,207) 757,524 276,771 1,874,134
Proceeds from FHLB advances over one year .................. 150,000 350,000 350,000 365,000
Payments on FHLB advances over one year .................... (136,243) (292,899) (303,153) (304,479)
Payments on long-term debt ................................. (247) (97) (33,619) (583)
Proceeds from issuance of common stock ..................... 1,887 828 6,118 3,661
Payments to redeem common stock ............................ (63) (3,803) (3,899) (4,769)
Dividends paid ............................................. (17,389) (22,953) (59,361) (56,943)
------------- ------------- ------------- -------------
Net cash provided by financing activities ............... 27,192 704,701 1,115,355 1,599,765
------------- ------------- ------------- -------------
Net increase (decrease) in cash and due from banks .............. 60,281 (144,459) 44,045 (126,306)
Cash and due from banks at beginning of period .................. 882,064 940,807 898,300 922,654
------------- ------------- ------------- -------------
Cash and due from banks at end of period ........................ $ 942,345 $ 796,348 $ 942,345 $ 796,348
============= ============= ============= =============
</TABLE>

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended Nine months Ended
September 30, September 30,
------------------- -------------------
(In thousands) 2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Cash paid for:
Interest ................................. $213,762 $156,513 $604,878 $448,046
Income taxes ............................. 18,501 9,350 41,057 27,070
Loans transferred to other real estate owned .. 5,198 4,655 7,589 10,352
</TABLE>

6
<PAGE>

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

<TABLE>
<CAPTION>
Nine Months Ended
September 30, 2000
---------------------------------------------------------------------
Accumulated
Other Total
Common Comprehensive Comprehensive Retained Shareholders'
(In thousands) Stock 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 ................................... $ 95,735 95,735 95,735
-----------
Other comprehensive income, net of tax:
Realized and unrealized holding loss arising
during the period, net of tax benefit of $38,512 ..... (62,174)
Reclassification for net realized securities loss recorded
in the income statement, net of tax benefit of $33,540 54,147
-----------
Other comprehensive loss ................................ (8,027) (8,027) (8,027)
-----------
Total comprehensive income .............................. $ 87,708
===========
Cash dividends:
Common, $.69 per share .................................. (59,361) (59,361)
Issuance of common shares for acquisitions .................. 9,853 14,172 24,025
Stock redeemed and retired .................................. (3,899) (3,899)
Stock options exercised, net of shares tendered and retired . 7,384 7,384
----------- ----------- ----------- -----------
Balance, September 30, 2000 ................................. $ 901,569 $ (12,185) $ 826,311 $ 1,715,695
=========== =========== =========== ===========

Nine Months Ended
September 30, 1999
---------------------------------------------------------------------
Accumulated
Other Total
Common Comprehensive Comprehensive Retained Shareholders'
(In thousands) Stock Income loss Earnings Equity
----------- ----------- ----------- ----------- -----------
Balance, January 1, 1999 .....................................$ 796,519 $ (3,407) $ 659,519 $ 1,452,631
Net income for the period .................................... $ 151,515 151,515 151,515
-----------
Other comprehensive income, net of tax:
Realized and unrealized holding loss arising
during the period, net of tax benefit of $7,960 ....... (12,851)
Reclassification for realized investment
securities loss recorded in the income
statement, net of tax benefit of $2,466 ............... 3,982
-----------
Other comprehensive loss ................................. (8,869) (8,869) (8,869)
-----------
Total comprehensive income ............................... $ 142,646
===========
Cash dividends:
Common, $.72 per share ................................... (56,937) (56,937)
Stock dividend of acquired company ........................... 21,700 (21,700) --
Issuance of common shares for acquisitions ................... 83 796 879
Stock redeemed and retired ................................... (4,769) (4,769)
Stock options exercised, net of shares tendered and retired .. 7,195 7,195
----------- ----------- ----------- -----------
Balance, September 30, 1999 ..................................$ 820,728 $ (12,276) $ 733,193 $ 1,541,645
=========== =========== =========== ===========
</TABLE>

Comprehensive income for the three months ended September 30, 2000 and 1999 was
$72,781 and $46,166 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. On July 28, 2000 the acquisition of County Bank was completed.
The acquisition was accounted for as a pooling, however, prior year amounts were
not restated since the acquisition was not considered significant.

Operating results for the nine months ended September 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 nine months ended September 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. Based on the Company's current
derivatives, hedging activities and market conditions at the end of the third
quarter, the Company does not expect the impact of adoption to be material to
the Consolidated Financial Statements. However, the Company will be unable to
accurately calculate the cumulative-effect-type transition adjustments required
upon adoption until actual year-end market conditions are known.

8
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

Operating Segment Information

The following is a summary of selected operating segment information for the
three months and nine months ended September 30, 2000 and September 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 119 branches in Utah and 20 in
Idaho. California Bank & Trust operates 76 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 43 branches in
Arizona. Nevada State Bank operates 60 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 September 30, 2000 and for the three months ended September 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 ....................... $ 60.5 $ 55.7 $ 76.2 $ 66.6 $ 22.1 $ 20.7 $ 25.2 $ 19.8
Provision for loan losses ................. 2.8 2.3 -- -- 2.2 0.6 0.9 0.6
Noninterest income ........................ 41.8 38.7 10.4 8.5 6.5 4.0 4.0 3.7
Merger expense and amortization of
goodwill and core deposit intangibles .. (0.4) 0.5 4.5 3.7 3.3 3.4 0.7 0.4
Noninterest expense ....................... 55.0 51.8 46.0 44.0 18.0 18.8 13.3 10.9
Income tax expense (benefit) .............. 14.0 12.2 16.2 12.3 2.6 1.7 5.7 4.2
Minority interest ......................... 0.2 0.2 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Net income ........................... $ 30.7 $ 27.4 $ 19.9 $ 15.1 $ 2.5 $ 0.2 $ 8.6 $ 7.4
======== ======== ======== ======== ======== ======== ======== ========
AVERAGE BALANCE SHEET DATA
Total assets .............................. $ 8,286 $ 7,233 $ 6,836 $ 6,213 $ 2,155 $ 2,227 $ 1,850 $ 1,515
Net loans and leases ...................... 4,880 3,701 4,817 4,174 1,415 1,380 1,410 1,123
Total deposits ............................ 4,351 3,742 5,373 5,317 1,390 1,565 1,485 1,258

NEVADA STATE BANK THE COMMERCE BANK OF CONSOLIDATED
AND SUBSIDIARIES WASHINGTON OTHER COMPANY
------------------- ------------------- -------------------- -------------------
(Amounts in millions) 2000 1999 2000 1999 2000 1999 2000 1999
-------- -------- -------- -------- -------- -------- -------- --------
CONDENSED INCOME STATEMENT
Net interest income ....................... $ 25.6 $ 25.5 $ 5.0 $ 4.1 $ (6.6) $ (4.6) $ 208.0 $ 187.8
Provision for loan losses ................. 1.8 1.0 0.3 0.1 0.1 (0.1) 8.1 4.5
Noninterest income ........................ 5.9 6.7 0.4 0.2 6.3 1.8 75.3 63.6
Merger expense and amortization of
goodwill and core deposit intangibles .. 0.4 0.7 -- -- 2.3 2.3 10.8 11.0
Noninterest expense ....................... 20.6 19.0 2.1 2.0 8.1 5.6 163.1 152.1
Income tax expense (benefit) .............. 2.9 3.5 1.0 0.7 (6.8) (5.4) 35.6 29.2
Minority interest ......................... -- -- -- -- 0.9 0.6 1.1 0.8
-------- -------- -------- -------- -------- -------- -------- --------
Net income ........................... $ 5.8 $ 8.0 $ 2.0 $ 1.5 $ (4.9) $ (5.8) $ 64.6 $ 53.8
======== ======== ======== ======== ======== ======== ======== ========
AVERAGE BALANCE SHEET DATA
Total assets .............................. $ 2,364 $ 2,317 $ 446 $ 391 $ 48 $ 96 $ 21,985 $ 19,992
Net loans and leases ...................... 1,352 1,265 235 173 38 24 14,147 11,840
Total deposits ............................ 1,997 1,905 299 267 (68) (19) 14,827 14,035
</TABLE>

9
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

The following table presents Operating Segment Information for the nine months
ended September 30, 2000 and for the nine months ended September 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 ....................... $ 169.3 $ 165.6 $ 219.8 $ 192.2 $ 65.8 $ 62.2 $ 66.6 $ 56.6
Provision for loan losses ................. 5.3 6.8 -- -- 4.6 1.9 2.6 1.8
Noninterest income ........................ 116.0 117.7 31.2 26.3 15.6 13.0 10.8 9.9
Merger expense and amortization of
goodwill and core deposit intangibles .. 4.1 1.5 19.1 11.9 10.3 11.6 1.6 1.4
Noninterest expense ....................... 159.6 157.3 137.2 136.0 54.8 54.1 36.1 31.8
Income tax expense (benefit) .............. 35.7 36.0 42.8 32.3 6.5 4.9 14.7 12.1
Minority interest ......................... (1.2) 0.9 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Net income ........................... $ 81.8 $ 80.8 $ 51.9 $ 38.3 $ 5.2 $ 2.7 $ 22.4 $ 19.4
======== ======== ======== ======== ======== ======== ======== ========

AVERAGE BALANCE SHEET DATA
Total assets .............................. $ 8,272 $ 7,115 $ 6,676 $ 6,207 $ 2,157 $ 2,155 $ 1,688 $ 1,493
Net loans and leases ...................... 4,482 3,639 4,683 4,198 1,397 1,294 1,292 1,083
Total deposits ............................ 4,087 3,754 5,367 5,327 1,424 1,595 1,321 1,244

NEVADA STATE BANK THE COMMERCE BANK OF CONSOLIDATED
AND SUBSIDIARIES WASHINGTON OTHER COMPANY
------------------- ------------------- -------------------- -------------------
(Amounts in millions) 2000 1999 2000 1999 2000 1999 2000 1999
-------- -------- -------- -------- -------- -------- -------- --------
CONDENSED INCOME STATEMENT
Net interest income ....................... $ 76.0 $ 73.7 $ 14.7 $ 11.3 $ (18.6) (11.6) $ 593.6 $ 550.0
Provision for loan losses ................. 6.3 2.8 0.8 0.5 -- (0.4) 19.6 13.4
Noninterest income ........................ 17.8 19.4 1.2 0.6 (83.0) 5.2 109.6 192.1
Merger expense and amortization of
goodwill and core deposit intangibles .. 5.5 1.7 -- -- 31.5 2.7 72.1 30.8
Noninterest expense ....................... 56.1 58.0 6.5 5.5 19.1 18.1 469.4 460.8
Income tax expense (benefit) .............. 8.6 9.3 2.9 1.9 (66.1) (13.6) 45.1 82.9
Minority interest ......................... -- -- -- -- 2.5 1.8 1.3 2.7
-------- -------- -------- -------- -------- -------- -------- --------
Net income ........................... $ 17.3 $ 21.3 $ 5.7 $ 4.0 $ (88.6) $ (15.0) $ 95.7 $ 151.5
======== ======== ======== ======== ======== ======== ======== ========

AVERAGE BALANCE SHEET DATA
Total assets .............................. $ 2,346 $ 2,227 $ 426 $ 359 $ 36 $ (44) $ 21,601 $ 19,512
Net loans and leases ...................... 1,356 1,195 217 163 30 21 13,457 11,593
Total deposits ............................ 1,969 1,875 297 241 (68) (24) 14,397 14,012
</TABLE>

10
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

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

FINANCIAL HIGHLIGHTS
(Unaudited)

Provision for loan losses ................... 8,119 4,517 79.74 % 19,581 13,401 46.12 %
Noninterest expense ......................... 173,926 163,038 6.68 % 541,550 491,529 10.18 %
Income before income taxes .................. 101,333 83,853 20.85 % 142,125 237,123 (40.06)%
Income taxes ................................ 35,646 29,273 21.77 % 45,136 82,946 (45.58)%
Minority interest ........................... 1,043 802 30.05 % 1,254 2,662 (52.89)%
Net income .................................. 64,644 53,778 20.21 % 95,735 151,515 (36.81)%

PER COMMON SHARE
Net income (diluted) ........................ 0.74 0.63 17.46 % 1.10 1.77 (37.85)%
Dividends ................................... 0.20 0.29 (31.03)% 0.69 0.72 (4.17)%
Book value .................................. 19.73 18.26 8.05 %

SELECTED RATIOS
Return on average assets .................... 1.17% 1.07% 0.59% 1.04%
Return on average common equity ............. 15.24% 13.85% 7.75% 13.39%
Efficiency ratio(3) ......................... 60.34% 63.81% 66.58% 65.20%
Net interest margin ......................... 4.34% 4.30% 4.24% 4.36%

OPERATING CASH EARNINGS(2)(3)
Taxable-equivalent net interest income ...... $ 212,902 $ 191,913 10.94 % $ 606,841 $ 561,744 8.03 %
Net interest income ......................... 208,029 187,817 10.76 % 593,619 549,975 7.94 %
Noninterest income .......................... 75,349 63,591 18.49 % 206,548 192,078 7.53 %
Provision for loan losses ................... 8,119 4,517 79.74 % 19,581 13,401 46.12 %
Noninterest expense ......................... 163,104 152,000 7.31 % 469,436 460,693 1.90 %
Income before income taxes .................. 112,155 94,891 18.19 % 311,150 267,959 16.12 %
Income taxes ................................ 37,252 31,035 20.03 % 102,550 87,888 16.68 %
Minority interest ........................... 1,226 973 26.00 % 1,957 3,171 (38.28)%
Net income .................................. 73,677 62,883 17.17 % 206,643 176,900 16.81 %

PER COMMON SHARE
Net income (diluted) ........................ 0.84 0.74 13.51 % 2.38 2.07 14.98 %
Dividends ................................... 0.20 0.29 (31.03)% 0.69 0.72 (4.17)%
Book value .................................. 12.39 10.75 15.26 %

SELECTED RATIOS
Return on average assets .................... 1.37% 1.29% 1.32% 1.25%
Return on average common equity ............. 28.08% 27.53% 27.68% 27.32%
Efficiency ratio ............................ 56.58% 59.49% 57.71% 61.11%
Net interest margin ......................... 4.34% 4.30% 4.24% 4.36%
</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.

11
<PAGE>

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

Three Months Ended Nine Months Ended
(In thousands, except per share and ratio data) September 30, September 30,
----------------------------------------- ----------------------------------------
2000 1999 % Change 2000 1999 % Change
----------- ----------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
AVERAGE BALANCES
Total assets ..................................$21,984,703 $19,992,126 9.97 % $21,601,431 $19,512,330 10.71 %
Securities .................................... 4,520,932 4,613,887 (2.01)% 4,559,030 4,473,787 1.91 %
Net loans and leases .......................... 14,146,953 11,840,177 19.48 % 13,456,781 11,593,299 16.07 %
Goodwill and core deposit intangibles ......... 643,313 634,869 1.33 % 653,003 647,414 0.86 %
Total deposits ................................ 14,827,126 14,034,997 5.64 % 14,397,494 14,011,675 2.75 %
Minority interest ............................. 39,663 37,962 4.48 % 39,833 37,046 7.52 %
Shareholders' equity .......................... 1,686,998 1,541,021 9.47 % 1,650,378 1,513,029 9.08 %

Weighted average common and common-
equivalent shares outstanding ............ 87,610,312 85,409,161 2.58 % 86,835,969 85,442,268 1.63 %

AT PERIOD END
Total assets .................................. 21,924,319 20,070,668 9.24 %
Securities .................................... 4,262,024 4,745,115 (10.18)%
Net loans and leases .......................... 14,068,994 12,098,622 16.29 %
Sold loans being serviced(1) .................. 1,684,927 1,224,187 37.64 %
Allowance for loan losses ..................... 200,401 205,926 (2.68)%
Goodwill and core deposit intangibles ......... 638,257 634,093 0.66 %
Total deposits ................................ 15,167,675 13,950,115 8.73 %
Minority interest ............................. 39,576 38,094 3.89 %
Shareholders' equity .......................... 1,715,695 1,541,645 11.29 %

Common shares outstanding ..................... 86,964,292 84,404,653 3.03 %

Average equity to average assets .............. 7.67% 7.71% 7.64% 7.75%
Common dividend payout ........................ 26.90% 42.67% 38.16%(2) 37.58%

Nonperforming assets .......................... 75,625 58,382 29.53 %
Loans past due 90 days or more ................ 22,752 32,515 (30.03)%
Nonperforming assets to net loans and leases,
other real estate owned and other
nonperforming assets at September 30 ..... 0.54% 0.48%
</TABLE>

(1) Amount represents the outstanding balance of loans sold and being serviced
by the Company, excluding long-term first mortgage residential real estate
loans.
(2) Before impairment loss on First Security Corporation common stock.

12
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

OPERATING RESULTS

Zions Bancorporation achieved net income of $64.6 million or $0.74 per diluted
share for the third quarter of 2000, an increase of 20.2% and 17.5%,
respectively, over the $53.8 million or $0.63 earned in the third quarter of
1999. Before merger-related charges, net income for the third quarter of 2000
was $65.7 million or $0.75 per diluted share, an increase of 9.0% and 7.1%,
respectively, over the $60.3 million or $0.70 per diluted share earned before
merger-related charges, in the second quarter of 2000.

Consolidated net income was $95.7 million or $1.10 per diluted share for the
first nine months of 2000 compared to $151.5 million or $1.77 per diluted share
for the first nine months of 1999. Results for the nine months ended September
30, 2000 included $87.2 million in after-tax merger charges ($1.00 per share)
mainly 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. Before merger-related charges, net income was
$183.0 million or $2.11 per diluted share compared to $154.3 million or $1.81
per diluted share for the first nine months of 1999, increases of 18.5% and
16.6%, respectively.

The annualized return on average assets for the third quarter of 2000 was 1.17%
compared to 1.07% for the third quarter of 1999 and 1.12% for the second quarter
of 2000. The annualized return on average common shareholder's equity was 15.24%
for the quarter compared to 13.85% for the third quarter of 1999 and 14.93% for
the second quarter of 2000. The Company's "efficiency ratio," or noninterest
expenses as a percentage of total taxable-equivalent net revenues for the third
quarter was 60.34% compared to 63.81% for the third quarter of 1999 and 62.04%
for the second quarter of 2000.

For the first nine months of 2000 the annualized return on average assets was
0.59% compared to 1.04% for the same period in 1999. The annualized return on
average common shareholder's equity was 7.75% for the first nine months of 2000
compared to 13.39% for the first nine months of 1999.

The Company's third quarter $10.9 million (20.2%) increase in earnings compared
to the same period a year ago reflects a $20.2 million (10.8%) increase in net
interest income, and a $11.8 million (18.5%) increase in noninterest income,
partially offset by a $3.6 million (79.7%) increase in the provision for loan
losses, a $10.9 million (6.7%) increase in noninterest expense and a $6.4
million (21.8%) increase in income tax expense.

For the first nine months of 2000 compared to the same period last year the
$55.8 million (36.8%) decrease in net income results from the recognition of
after-tax merger charges of $87.2 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 nine months of 2000 compared to the same
period last year include a $43.6 million (7.9%) increase in net interest income
and a $14.5 million (7.5%) increase in noninterest income excluding the $96.9
million impairment loss on First Security Corporation common stock. Noninterest
expense excluding merger-related expense increased $10.1 million (2.1%), the
provision for loan losses increased $6.2 million (46.1%), and income tax expense
decreased $37.8 million (45.6%).

13
<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 $73.7 million or $0.84 per diluted
share, an increase of 17.2% and 13.5%, respectively, over the $62.9 million or
$0.74 per diluted share earned in the third quarter of 1999. Operating cash
earnings for the third quarter of 2000 increased 7.7% over the $68.4 million
earned during the second quarter of 2000. Operating cash earnings per diluted
share for the third quarter of 2000 increased 6.3% over the $.79 for the second
quarter of 2000. Year-to-date operating cash earnings were $206.6 million or
$2.38 per diluted share, an increase of 16.8% and 15.0%, respectively, over the
$176.9 million or $2.07 per diluted share earned in the first nine months of
1999.

The operating cash annualized return on average assets for the third quarter and
for the first nine months of 2000 was 1.37% and 1.32% compared to 1.29% and
1.25%, respectively, in 1999. Operating cash annualized return on average common
shareholders' equity was 28.08% and 27.68% for the third quarter and for the
first nine months of 2000, compared to the restated 27.53% and 27.32% for the
same periods of 1999. The Company's cash efficiency ratio for the third quarter
and for the first nine months of 2000 was 56.58% and 57.71%, respectively,
compared to 59.49% and 61.11% for the same periods of 1999.

NET INTEREST INCOME AND INTEREST RATE SPREADS

Net interest income for the third quarter of 2000, adjusted to a fully
taxable-equivalent basis, increased 10.9% to $212.9 million compared to $191.9
million for the third quarter of 1999 and increased 6.9% from $199.1 million for
the second quarter of 2000. Net interest margin was 4.34% for the third quarter
of 2000, compared to 4.30% for the third quarter of 1999 and 4.23% for the
second quarter of 2000. Nine-month net interest income, on a fully
taxable-equivalent basis, was $606.8 million in 2000, an increase of 8.0%
compared to $561.7 million for the first nine months of 1999. Net interest
margin for the first nine months of 2000 was 4.24%, compared to 4.36% for the
first nine months of 1999. The decreased margin for the first nine months of
2000 compared to 1999 reflects 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 95 basis points during the third
quarter of 2000 as compared to the third quarter of 1999, and 24 basis points
from the second quarter of 2000. The average rate paid this quarter on
interest-bearing funds increased 103 basis points from the third quarter of 1999
and increased 20 basis points from the second quarter of 2000. Comparing the
first nine months of 2000 with 1999, the yield on average earning assets
increased 65 basis points, while the cost of interest-bearing funds increased by
85 basis points.

The spread on average interest-bearing funds for the third quarter of 2000 was
3.55%, down from the 3.63% for the third quarter of 1999 and up from the 3.51%
for the second quarter of 2000. The spread on average interest-bearing funds for
the first nine months of 2000 was 3.50%, down from 3.70% for the first nine
months of 1999.

14
<PAGE>

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

<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
September 30, 2000 September 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 ..................... $ 829,986 $ 14,865 7.13% $ 1,249,686 $ 17,596 5.59%
Securities:
Held to maturity ........................... 3,287,182 56,852 6.88% 3,345,910 51,993 6.17%
Available for sale ......................... 670,415 11,680 6.93% 791,913 10,546 5.28%
Trading account ............................ 563,335 9,027 6.37% 476,064 7,333 6.11%
------------ ------------ ------------ ------------
Total securities ......................... 4,520,932 77,559 6.82% 4,613,887 69,872 6.01%
------------ ------------ ------------ ------------
Loans:
Loans held for sale ........................ 214,181 4,180 7.76% 168,011 2,780 6.56%
Net loans and leases(2) .................... 13,932,772 332,751 9.50% 11,672,166 258,132 8.77%
------------ ------------ ------------ ------------
Total loans .............................. 14,146,953 336,931 9.47% 11,840,177 260,912 8.74%
------------ ------------ ------------ ------------
Total interest-earning assets ................ $ 19,497,871 $ 429,355 8.76% $ 17,703,750 $ 348,380 7.81%
Cash and due from banks ...................... 803,148 851,603
Allowance for loan losses .................... (201,328) (212,393)
Goodwill and core deposit intangibles ........ 643,313 634,869
Other assets ................................. 1,241,699 1,014,297
------------ ------------
Total assets ............................ $ 21,984,703 $ 19,992,126
============ ============

LIABILITIES
Interest-bearing deposits:
Savings and NOW deposits ................... $ 1,740,097 $ 9,788 2.24% $ 1,774,041 $ 10,294 2.30%
Money market super NOW deposits ............ 6,307,317 76,308 4.81% 5,732,202 53,805 3.72%
Time deposits under $100,000 ............... 1,678,696 22,292 5.28% 2,019,556 23,656 4.65%
Time deposits $100,000 or more ............. 1,583,581 23,586 5.93% 1,110,197 13,474 4.82%
Foreign deposits ........................... 126,474 1,308 4.11% 158,137 1,747 4.38%
------------ ------------ ------------ ------------
Total interest-bearing deposits .......... 11,436,165 133,282 4.64% 10,794,133 102,976 3.78%
------------ ------------ ------------ ------------
Borrowed funds:
Securities sold, not yet purchased ......... 305,514 4,823 6.28% 245,810 4,216 6.80%
Federal funds purchased and security
repurchase agreements .................... 2,432,995 37,183 6.08% 2,416,686 27,756 4.56%
Commercial paper ........................... 318,664 5,459 6.82% 269,629 3,674 5.41%
FHLB advances and other borrowings:
less than one year ....................... 1,471,192 24,984 6.76% 595,903 7,793 5.19%
over one year ............................ 168,173 2,667 6.31% 79,032 1,403 7.04%
Long-term debt ............................. 396,898 8,055 8.07% 453,114 8,649 7.57%
------------ ------------ ------------ ------------
Total borrowed funds ..................... 5,093,436 83,171 6.50% 4,060,174 53,491 5.23%
------------ ------------ ------------ ------------
Total interest-bearing liabilities ....... $ 16,529,601 $ 216,453 5.21% $ 14,854,307 $ 156,467 4.18%
------------ ------------
Noninterest-bearing deposits ................. 3,390,961 3,240,864
Other liabilities ............................ 337,480 317,972
------------ ------------
Total liabilities ........................ 20,258,042 18,413,143
Minority interest ............................ 39,663 37,962
Total shareholders' equity ............... 1,686,998 1,541,021
------------ ------------
Total liabilities and shareholders' equity $ 21,984,703 $ 19,992,126
============ ============
Spread on average interest-bearing funds ..... 3.55% 3.63%
Net interest income and net yield on
interest-earning assets ................. $ 212,902 4.34% $ 191,913 4.30%
============ ============
</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.

15
<PAGE>

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

<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
September 30, 2000 September 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 ....................... $ 1,106,070 $ 53,267 6.43% $ 1,150,874 $ 49,540 5.76%
Securities:
Held to maturity ............................. 3,292,740 166,735 6.76% 3,201,960 150,494 6.28%
Available for sale ........................... 675,675 32,504 6.43% 735,479 31,483 5.72%
Trading account .............................. 590,615 27,695 6.26% 536,348 22,108 5.51%
------------ ------------ ------------ ------------
Total securities ........................... 4,559,030 226,934 6.65% 4,473,787 204,085 6.10%
------------ ------------ ------------ ------------
Loans:
Loans held for sale .......................... 193,529 10,760 7.43% 185,241 9,273 6.69%
Net loans and leases(2) ...................... 13,263,252 922,921 9.29% 11,408,058 744,849 8.73%
------------ ------------ ------------ ------------
Total loans ............................. 13,456,781 933,681 9.27% 11,593,299 754,122 8.70%
------------ ------------ ------------ ------------
Total interest-earning assets .................. $ 19,121,881 $ 1,213,882 8.48% $ 17,217,960 $ 1,007,747 7.83%
Cash and due from banks ........................ 834,826 833,639
Allowance for loan losses ...................... (202,640) (211,535)
Goodwill and core deposit intangibles .......... 653,003 647,414
Other assets ................................... 1,194,361 1,024,852
------------ ------------
Total assets .............................. $ 21,601,431 $ 19,512,330
============ ============

LIABILITIES
Interest-bearing deposits:
Savings and NOW deposits ..................... $ 1,780,447 $ 29,363 2.20% $ 1,786,217 $ 31,366 2.35%
Money market super NOW deposits .............. 6,125,905 212,769 4.64% 5,396,966 146,749 3.64%
Time deposits under $100,000 ................. 1,730,336 64,943 5.01% 2,150,934 76,294 4.74%
Time deposits $100,000 or more ............... 1,324,187 54,674 5.52% 1,289,069 47,052 4.88%
Foreign deposits ............................. 137,072 4,909 4.78% 166,179 5,277 4.25%
------------ ------------ ------------ ------------
Total interest-bearing deposits ............ 11,097,947 366,658 4.41% 10,789,365 306,738 3.80%
------------ ------------ ------------ ------------
Borrowed funds:
Securities sold, not yet purchased ........... 303,716 14,428 6.35% 284,602 12,155 5.71%
Federal funds purchased and security
repurchase agreements ...................... 2,781,793 119,292 5.73% 2,222,370 74,180 4.46%
Commercial paper ............................. 307,298 14,783 6.43% 158,455 6,295 5.31%
FHLB advances and other borrowings:
less than one year ......................... 1,235,560 59,835 6.47% 469,299 17,347 4.94%
over one year .............................. 139,281 6,314 6.06% 63,150 3,120 6.61%
Long-term debt ............................... 432,150 25,731 7.95% 452,728 26,168 7.73%
------------ ------------ ------------ ------------
Total borrowed funds ....................... 5,199,798 240,383 6.18% 3,650,604 139,265 5.10%
------------ ------------ ------------ ------------
Total interest-bearing liabilities ......... $ 16,297,745 $ 607,041 4.98% $ 14,439,969 $ 446,003 4.13%
------------ ------------
Noninterest-bearing deposits ................... 3,299,547 3,222,310
Other liabilities .............................. 313,928 299,976
------------ ------------
Total liabilities .......................... 19,911,220 17,962,255
Minority interest .............................. 39,833 37,046
Total shareholders' equity ................. 1,650,378 1,513,029
------------ ------------
Total liabilities and shareholders' equity . $ 21,601,431 $ 19,512,330
============ ============
Spread on average interest-bearing funds ....... 3.50% 3.70%
Net interest income and net yield on
interest-earning assets ...................... $ 606,841 4.24% $ 561,744 4.36%
============ ============
</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.

16
<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 nine months of 2000 was $3.4
million compared to $7.5 million for the first nine months of 1999.

PROVISION FOR LOAN LOSSES

The provision for loan losses increased 79.7% to $8.1 million for the third
quarter of 2000, as compared with $4.5 million for the third quarter of 1999,
and increased 30.7% from the $6.2 million for the second quarter of 2000. The
provision for loan losses for the first nine months of 2000 totaled $19.6
million, 46.1% more than the $13.4 million provision for the first nine months
of 1999. Annualized the provision is .19% of average loans for 2000 compared to
.15% for 1999.

NONINTEREST INCOME

Noninterest income for the third quarter of 2000 was $75.3 million, an increase
of 18.5% from the $63.6 million for the third quarter of 1999 and an increase of
6.7% from the $70.6 million for the second quarter of 2000.

Comparing the segments of noninterest income for the third quarter of 2000 and
the third quarter of 1999, service charges on deposit accounts decreased 4.5%,
other service charges and fees increased 11.3%, trust income increased 7.7%,
underwriting and trading income increased 76.4%, loan sales and servicing income
increased 11.4% and other income increased 17.7%. The increase in net investment
securities gain is mainly the result of pre-tax gains of $3.7 million recognized
on the sale of First Security Corporation common stock during the third quarter
of 2000 and gains from venture fund securities. The increase in other income
results mainly from additional income from venture fund investments. Loan sales
and servicing income for the third quarter of 2000 includes a gain of $4.4
million from a SBA securitization completed during the quarter offset in part by
a reduction in income due to decreased sales into the Home Equity Credit Line
revolving conduit.

Noninterest income for the nine months ended September 30, 2000 excluding the
$96.9 million impairment loss on First Security Corporation common stock was
$206.5 million, an increase of 7.5% from the $192.1 million for same period in
1999.

Comparing the segments of noninterest income for the first nine months of 2000
with the first nine months of 1999, service charges on deposit accounts
increased 0.2%, other service charges, commissions and fees decreased 1.5%,
trust income increased 14.7%, underwriting and trading income decreased 7.9%,
loans sales and servicing income decreased 10.0%, and other income increased
26.6%. The Company recognized a net gain of $9.2 million from sales of
securities during the first nine months of 2000 compared to a net loss of $1.3
million for the same period in 1999. Gains on the sale of securities for 2000
include pre-tax gains of $5.6 million recognized from the sale of First Security
Corporation common stock. 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 increased income from
additional investments in bank owned life insurance and additional income from
investments in nonmarketable securities including venture fund investments.

17
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

NONINTEREST EXPENSE

Noninterest expense for the third quarter of 2000 was $173.9 million, an
increase of 6.7% over $163.0 million for the third quarter of 1999, and an
increase of 4.0% from the $167.3 million for the second quarter of 2000.
Excluding merger-related expenses, noninterest expense increased 3.8% for the
third quarter of 2000 compared to the second quarter of the year. Comparing
significant noninterest expense segments for the third quarter of 2000 and the
third quarter of 1999, salaries and employee benefits decreased 0.3%, occupancy
increased 9.3%, furniture and equipment expense increased 17.2%, and the total
of all other expenses increased 15.3%. Other expenses for the third quarter of
2000 included approximately $3.3. million of nonrecurring charges related to
litigation and operational losses.

Noninterest expense for the nine months ending September 30, 2000 was $541.6
million which includes $44.2 million of merger-related expense. Excluding
merger-related expense noninterest expense increased 2.1% for the first nine
months of 2000 compared to the same period in 1999. Comparing significant
noninterest expense segments for the first nine months of 2000 and the
comparable period in 1999, salaries and employee benefits decreased 2.1%,
occupancy increased 2.8%, furniture and equipment expense increased 19.5% and
the total of all other expenses excluding merger charges increased 5.2%.

The increase in furniture and equipment expense for the third quarter and first
nine 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 September 30, 2000 the Company had 6,881 full-time equivalent employees, 375
offices and 502 ATMs compared to 6,874 full-time equivalent employees, 355
offices and 496 ATMs at September 30, 1999.

INCOME TAXES

The Company's income taxes increased 21.8% to $35.6 million for the third
quarter of 2000 compared to $29.3 million for the third quarter of 1999. The
Company's income taxes were $45.1 million for the first nine months of 2000 as
compared to $82.9 million for the first nine months of 1999. The Company's
effective income tax rate was 35.2% for the third quarter of 2000, compared to
34.9% for the third quarter of 1999. The effective income tax rate for the first
nine months of 2000 was 31.8% compared to 35.0% for the first nine months of
1999. The decreased rate is mainly due to the effect of merger costs and the
impairment loss on First Security Corporation common stock, which are infrequent
and unusual occurring items, respectively.

ANALYSIS OF FINANCIAL CONDITION

EARNING ASSETS

Average earning assets increased 11.1% to $19,122 million for the nine months
ended September 30, 2000, compared to $17,218 million for the nine months ended
September 30, 1999. Earning assets comprised 88.5% of total average assets for
the first nine months of 2000, compared with 88.2% for the first nine months of
1999.

Average money market investments, consisting of interest-bearing deposits,
federal funds sold and security resell agreements decreased 3.9% to $1,106
million in the first nine months of 2000 as compared to $1,151 million in the
first nine months of 1999.

18
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

During the first nine months of 2000, average securities increased 1.9% to
$4,559 million compared to $4,474 million in the first nine months of 1999.
Average held to maturity securities increased 2.8%, available for sale
securities decreased 8.1%, and trading account securities increased 10.1%
compared with the first nine months of 1999.

Average net loans and leases increased 16.1% to $13,457 million for the first
nine months of 2000 compared to $11,593 million in the first nine months of
1999, representing 70.4% of earning assets in the first nine months of 2000
compared to 67.3% in the first nine months of 1999. Average net loans and leases
were 93.5% of average total deposits for the nine months ended September 30,
2000, as compared to 82.7% for the nine months ended September 30, 1999.

INVESTMENT SECURITIES

The following table presents the Company's investment securities on September
30, 2000, December 31, 1999 and September 30, 1999. As of September 30, 2000,
the Company had approximately $42 million of Small Business Administration
originator fee certificates that have been classified in other assets and are
measured as available for sale securities.

September 30, December 31, September 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 .......... 498 524 440 445 434 428
Other agency securities ......... 1,294 1,276 1,270 1,233 1,194 1,176
States and political subdivisions .. 322 320 314 309 403 400
Mortgage-backed securities ......... 1,127 1,123 1,305 1,303 1,336 1,337
-------- -------- -------- -------- -------- --------
3,242 3,244 3,330 3,291 3,369 3,343
-------- -------- -------- -------- -------- --------
Available for sale
------------------
U.S. Treasury securities ........... 49 50 93 93 107 108
U.S. government agencies and
corporations .................... 95 93 51 50 113 113
States and political subdivisions .. 146 146 102 97 60 58
Mortgage and other asset-backed
securities ...................... 92 89 147 143 194 189
-------- -------- -------- -------- -------- --------
382 378 393 383 474 468
-------- -------- -------- -------- -------- --------
Equity securities:
Mutual funds:
Accessor Funds, Inc. ....... 118 116 141 139 373 371
Other Stock ..................... 109 104 242 257 6 6
-------- -------- -------- -------- -------- --------
227 220 383 396 379 377
-------- -------- -------- -------- -------- --------
609 598 776 779 853 845
-------- -------- -------- -------- -------- --------
Total .............................. $ 3,851 $ 3,842 $ 4,106 $ 4,070 $ 4,222 $ 4,188
======== ======== ======== ======== ======== ========
</TABLE>

19
<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 September
30, 2000, December 31, 1999 and September 30, 1999.
<TABLE>
<CAPTION>

(In millions)
September 30, December 31, September 30,
Types 2000 1999 1999
----- ------------- ------------- -------------
<S> <C> <C> <C>
Loans held for sale ....................... $ 226 $ 205 $ 154
Commercial, financial, and agricultural ... 3,363 3,036 2,913
Real estate:
Construction ........................... 2,355 1,722 1,497
Other:
Home equity credit line ........ 288 232 211
1-4 family residential ......... 3,015 2,503 2,466
Other real estate-secured ...... 3,900 4,168 3,934
------------- ------------- -------------
7,203 6,903 6,611
------------- ------------- -------------
9,558 8,625 8,108
Consumer:
Bankcard ............................... 122 107 97
Other .................................. 484 490 505
------------- ------------- -------------
606 597 602

Lease financing ........................... 295 275 242
Foreign loans ............................. 30 53 47
Other receivables ......................... 66 62 88
------------- ------------- -------------
Total loans ............................ $ 14,144 $ 12,853 $ 12,154
============= ============= =============
</TABLE>

Loans held for sale on September 30, 2000 increased 10.2% from December 31,
1999. All other loans, net of unearned income and fees increased 10.0% to
$13,843 million on September 30, 2000 compared to $12,586 million on December
31, 1999. Commercial loans, construction loans, other real estate-secured loans,
consumer loans, and lease financing increased from year end 10.8%, 36.8%, 4.3%,
1.5% and 7.3%, respectively, while foreign loans decreased 43.4%. Within the
other real estate-secured loan portfolio, home equity credit line loans
increased 24.1%, 1-4 family residential loans increased 20.5% and all other real
estate loans decreased 6.4% from year end.

20
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

On September 30, 2000, long-term first mortgage real estate loans serviced for
others totaled $215 million and consumer and other loan securitizations, which
relate primarily to loans sold under revolving securitization structures,
totaled $1,685 million. During the first nine months of 2000, the Company sold
$390 million of loans classified in held for sale, and securitized and sold
other SBA loans, home equity credit line loans, credit card receivables and
automobile loans totaling $918 million. During the first nine months of 2000,
total loans sold were $1,308 million compared to total loans sold of $1,584
million during the first nine 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
$76 million on September 30, 2000, compared to $75 million on December 31, 1999,
and up from $59 million on September 30, 1999. Such nonperforming assets as a
percentage of net loans and leases, other real estate owned and other
nonperforming assets were .54%, .58% and .48% on September 30, 2000, December
31, 1999, and September 30, 1999, respectively.

Accruing loans past due 90 days or more totaled $23 million on September 30,
2000, up from $21 million on December 31, 1999, and down from $33 million on
September 30, 1999. These loans equaled .16% of net loans and leases on
September 30, 2000, and December 31, 1999 and .27% on September 30, 1999.

No loans to borrowers were considered potential problem loans at September 30,
2000, December 31, 1999 and September 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 $57 million on September 30, 2000, and December
31, 1999, and $39 million on September 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 September 30, 2000, December 31, 1999, and
September 30, 1999, is a required allowance of $11 million, $16 million and $13
million, respectively, on $24 million, $22 million and $16 million,
respectively, of the recorded investment in impaired loans.

21
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

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

September 30, December 31, September 30,
(In millions) 2000 1999 1999
------------- ------------- -------------
<S> <C> <C> <C>
Nonaccrual loans .............................. $ 68 $ 65 $ 48
Restructured loans ............................ 1 1 1
Other real estate owned and other
nonperforming assets ..................... 7 9 10
------------- ------------- -------------
Total .................................... $ 76 $ 75 $ 59
============= ============= =============
% of net loans and leases*, other real estate
owned and other nonperforming assets ..... .54% .58% .48%

Accruing loans past due 90 days or more ....... $ 23 $ 21 $ 33
============= ============= =============

% of net loans and leases* .................... .16% .16% .27%
*Includes loans held for sale .................
</TABLE>

ALLOWANCE FOR LOAN LOSSES

The Company's allowance for loan losses was 1.42% of net loans and leases on
September 30, 2000, compared to 1.60% on December 31, 1999, and 1.70% on
September 30, 1999. Net charge-offs during the third quarter of 2000 were $7
million, or annualized .20% of average net loans and leases, compared to net
charge-offs of $11 million for the third quarter of 1999. Net charge-offs for
the first nine months of 2000 were $26 million, or annualized .25% of average
net loans and leases, compared to $20 million or .23% of average net loans and
leases for the first nine months of 1999.

The allowance, as a percentage of nonaccrual loans and restructured loans, was
290.9% on September 30, 2000, compared to 310.9% on December 31, 1999, and
423.0% on September 30, 1999. The allowance, as a percentage of nonaccrual loans
and accruing loans past due 90 days or more was 220.6% on September 30, 2000,
compared to 238.1% on December 31, 1999 and 256.4% on September 30, 1999.

On September 30, 2000, December 31, 1999, and September 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 September 30, 2000, December 31, 1999 and September 30,
1999 totaled $6,923 million, $6,001 million and $5,865 million, respectively.

22
<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.

Nine months Twelve Months Nine months
Ended Ended Ended
(In millions) September 30, December 31, September 30,
2000 1999 1999
------------- ------------- -------------
<S> <C> <C> <C>
Average loans* and leases outstanding
(net of unearned income) ................ $ 13,457 $ 11,819 $ 11,593
============= ============= =============
Allowance for possible losses:
Balance at beginning of the period ........... $ 204 $ 213 $ 213
Allowance of companies acquired .............. 2 3 --
Provision charged against earnings ........... 20 18 13
Loans and leases charged-off:
Loans held for sale ..................... -- -- --
Commercial, financial and agricultural .. (22) (32) (23)
Real estate ............................. (3) (3) (2)
Consumer ................................ (7) (9) (7)
Lease financing ......................... (2) (2) (2)
------------- ------------- -------------
Total .............................. (34) (46) (34)
------------- ------------- -------------
Recoveries:
Loans held for sale ..................... -- -- --
Commercial, financial and agricultural .. 5 5 5
Real estate ............................. -- 7 6
Consumer ................................ 2 3 2
Lease financing ......................... 1 1 1
------------- ------------- -------------
Total .............................. 8 16 14
------------- ------------- -------------
Net loan and lease charge-offs ............... (26) (30) (20)
------------- ------------- -------------
Balance at end of the period ................. $ 200 $ 204 $ 206
============= ============= =============
*Includes loans held for sale

Ratio of net charge-offs to
average loans and leases ................ .25% .25% .23%
</TABLE>

23
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

DEPOSITS

Average total deposits of $14,397 million for the first nine months of 2000
increased 2.8% compared to $14,012 million for the first nine months of 1999,
with average demand deposits increasing 2.4%. Average savings and NOW deposits
decreased .3% while average money market and super NOW deposits increased 13.5%
during the first nine months of 2000, compared with the same period one year
earlier. Average time deposits under $100,000 and foreign deposits for the first
nine months of 2000 decreased 19.6% and 17.5% respectively, from the first nine
months of 1999. Time deposits over $100,000 increased 2.7% for the first nine
months of 2000 from the first nine months of 1999.

Total deposits increased 7.9% to $15,168 million on September 30, 2000 as
compared to $14,062 million on December 31, 1999. Comparing September 30, 2000
to December 31, 1999, demand deposits, savings and money market deposits, and
time deposits over $100,000 increased 7.9%, 7.1%, and 53.2%, respectively, while
time deposits under $100,000 and foreign deposits decreased 8.9%, and 50.8%,
respectively. The increase in time deposits over $100,000 results mainly from
the Company issuing large negotiable time deposits through its institutional
sales force in response to funding needs resulting from robust loan growth.

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 88.4% of total deposits
on September 30, 2000 as compared to 90.8% on December 31, 1999 and 90.9% on
September 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 a 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.

24
<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 September 30, 2000 was $1,716 million, an increase
of 3.4% over the $1,660 million on December 31, 1999, and an increase of 11.3%
over the $1,542 million on September 30, 1999. The ratio of average equity to
average assets for the first nine months of 2000 was 7.64% as compared to 7.75%
for the same period in 1999. On September 30, 2000, the Company's Tier I
risk-based capital ratio was 8.35%, as compared to 8.64% on December 31, 1999
and 8.42% on September 30, 1999. On September 30, 2000 the Company's total
risk-based capital ratio was 10.85%, as compared to 11.29% on December 31, 1999
and 11.16% on September 30, 1999. The Company's leverage ratio on September 30,
2000 and December 31, 1999 was 6.16%, and 6.08% on September 30, 1999.

Dividends declared per common share for the third quarter of 2000 of $.20 were
the same as the second quarter of 2000 and decreased 31.0%, as compared to the
$.29 declared for the third quarter of 1999. The common cash dividend payout of
net income for the first nine months of 2000 before the impairment loss
recognized on First Security Corporation common stock was 38.16%, as compared to
37.58% for the first nine months of 1999.

During the first nine months of 2000, the Company repurchased and retired 80,174
shares of its common stock at a cost of $3.9 million.

25
<PAGE>

ZIONS BANCORPORATION AND SUBSIDIARIES

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 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

Exhibit 27 Article 9 Financial Data Schedule

b) Reports on Form 8-K

There were no reports on Form 8-K filed during the quarter ended
September 30, 2000.

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 November 13, 2000