Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

On March 27, 2009, Moody's Investor Service announced that it had downgraded 429 tranches across 89 Trust Preferred collateralized debt obligations, or CDOs. Lockhart Funding, LLC ("Lockhart"), a qualified special purpose entity sponsored by Zions First National Bank ("Zions Bank"), owned six tranches that were impacted by the Moody's action. Under the terms of the Liquidity Agreement between Lockhart and Zions Bank, Zions Bank today purchased the tranches from Lockhart. These securities had a par value of $512 million. Zions Bank expects it will recognize a fair value loss of approximately $173 million pretax ($107 after-tax) on the transaction. The transaction is expected to reduce the tangible common equity ratio of Zions Bancorporation ("Zions") by approximately 19 basis points. None of these securities has ever missed a payment.

At December 31, 2008, Lockhart had total assets of approximately $738 million. Subsequent to today's transaction (and the expiration of corresponding amounts of commercial paper issued by Lockhart), Lockhart has remaining assets of approximately $186 million. These assets consist of approximately $179 million of Small Business Administration loan-backed securities and $7 million in a single CDO. The CDO carries a rating of AA from Standard & Poor's and Aa2 from Moody's Investor Service. The assets remaining in Lockhart have an estimated fair value of $180 million.

Due to the dramatically reduced size of Lockhart, Zions expects that maintaining a viable commercial paper funding program for Lockhart will become impossible due to lack of investor interest. Therefore, Zions expects that it will be required to acquire the remaining assets of Lockhart during the second quarter of 2009 and to consolidate Lockhart at that time. Acquisition of these remaining assets by Zions is expected to dilute Zions' tangible common equity ratio by an additional 1 basis point - for a total of 20 basis points, which is broadly in line with prior guidance.

Additional details regarding Lockhart can be found on pages 96-98 of Form 10-K filed by Zions Bancorporation for the year ended December 31, 2008.