FINANCIAL HIGHLIGHTS

(Unaudited)



(In thousands, except per share and ratio                     Three Months Ended
data)                                                             March 31,
                                                     2009             2008          % Change
EARNINGS
Taxable-equivalent net interest income            $  480,670        $ 492,537          (2.41 )%
Taxable-equivalent revenue                           335,408          603,537         (44.43 )%
Net interest income                                  474,775          486,458          (2.40 )%
Noninterest income                                  (145,262 )        111,000        (230.87 )%
Provision for loan losses                            297,624           92,282         222.52  %
Noninterest expense                                  376,205          350,103           7.46  %
Impairment loss on goodwill                          633,992               -
Income (loss) before income taxes                   (978,308 )        155,073        (730.87 )%
Income taxes (benefit)                              (151,727 )         49,896        (404.09 )%
Net income (loss)                                   (826,581 )        105,177        (885.90 )%
Net income (loss) applicable to
noncontrolling interests                                (540 )         (1,572 )       (65.65 )%
Net income (loss) applicable to controlling
interest                                            (826,041 )        106,749        (873.82 )%
Net earnings (loss) applicable to common
shareholders                                        (852,327 )        104,296        (917.22 )%

PER COMMON SHARE
Net earnings (loss) (diluted)                          (7.47 )           0.97        (870.10 )%
Dividends                                               0.04             0.43         (90.70 )%
Book value per common share                            34.39            47.49         (27.58 )%

SELECTED RATIOS
Return on average assets                               (6.05 )%          0.81 %
Return on average common equity                       (70.07 )%          8.18 %
Efficiency ratio                                      112.16  %         58.01 %
Net interest margin                                     3.93  %          4.23 %

ZIONS BANCORPORATION AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Continued)

(Unaudited)



(In thousands, except share and ratio                       Three Months Ended
data)                                                           March 31,
                                                2009                 2008             % Change
AVERAGE BALANCES
Total assets                                $  55,399,675        $  52,913,823            4.70  %
Total interest-earning assets                  49,581,062           46,853,435            5.82  %
Securities                                      4,486,050            5,341,287          (16.01 )%
Net loans and leases                           41,888,624           39,237,811            6.76  %
Goodwill                                        1,654,222            2,009,477          (17.68 )%
Core deposit and other intangibles                126,759              146,363          (13.39 )%
Total deposits                                 42,128,652           36,594,674           15.12  %
Shareholders' equity:
Preferred equity                                1,583,659              240,000          559.86  %
Common equity                                   4,932,977            5,126,621           (3.78 )%
Noncontrolling interests                           27,720               30,676           (9.64 )%

Weighted average common and
common-equivalent shares outstanding          114,106,164          106,687,211            6.95  %

AT PERIOD END
Total assets                                $  54,545,012        $  53,408,293            2.13  %
Total interest-earning assets                  49,267,000           46,962,949            4.91  %
Securities                                      4,800,957            5,002,207           (4.02 )%
Net loans and leases                           41,932,315           39,697,226            5.63  %
Allowance for loan losses                         832,878              501,283           66.15  %
Reserve for unfunded lending
commitments                                        52,761               25,148          109.80  %
Goodwill                                        1,034,465            2,009,517          (48.52 )%
Core deposit and other intangibles                124,585              140,672          (11.44 )%
Total deposits                                 43,307,233           37,516,337           15.44  %
Shareholders' equity:
Preferred equity                                1,587,027              240,000          561.26  %
Common equity                                   3,965,979            5,087,801          (22.05 )%
Noncontrolling interests                           26,828               30,413          (11.79 )%

Common shares outstanding                     115,335,668          107,139,188            7.65  %

Average equity to average assets                    11.81 %              10.20 %
Common dividend payout                                 na                44.11 %
Tangible common equity ratio                         5.26 %               5.73 %
Tangible equity ratio                                8.28 %               6.26 %

Nonperforming assets, excluding
FDIC-supported assets                       $   1,663,246        $     434,293          282.98  %
Ratio of nonperforming assets,
excluding FDIC-supported assets, to
net loans and leases and other real
estate owned                                         4.00 %               1.09 %
Accruing loans past due 90 days or
more, excluding FDIC-supported assets       $      88,035        $      84,637            4.01  %

FORWARD-LOOKING INFORMATION

Statements in Management's Discussion and Analysis that are based on other than historical data are forward-looking, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations or forecasts of future events and include, among others:

• statements with respect to the beliefs, plans, objectives, goals, guidelines, expectations, anticipations, and future financial condition, results of operations and performance of Zions Bancorporation ("the Parent") and its subsidiaries (collectively "the Company," "Zions," "we," "our," "us");

• statements preceded by, followed by or that include the words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "projects," or similar expressions.

These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in the Management's Discussion and Analysis. Factors that might cause such differences include, but are not limited to:

• the Company's ability to successfully execute its business plans, manage its risks, and achieve its objectives;

• changes in political and economic conditions, including the political and economic effects of the current economic crisis and other major developments, including wars, military actions and terrorist attacks;

• changes in financial market conditions, either internationally, nationally or locally in areas in which the Company conducts its operations, including without limitation, reduced rates of business formation and growth, commercial and residential real estate development and real estate prices;

• fluctuations in markets for equity, fixed-income, commercial paper and other securities, including availability, market liquidity levels, and pricing;

• changes in interest rates, the quality and composition of the loan and securities portfolios, demand for loan products, deposit flows and competition;

• acquisitions and integration of acquired businesses;

• increases in the levels of losses, customer bankruptcies, claims and assessments;

• changes in fiscal, monetary, regulatory, trade and tax policies and laws, including policies of the U.S. Department of Treasury and the Federal Reserve Board;

• the Company's participation or lack of participation in governmental programs implemented under the Emergency Economic Stabilization Act ("EESA") and the American Recovery and Reinvestment Act ("ARRA"), including without limitation the Troubled Asset Relief Program ("TARP"), the Capital Purchase Program ("CPP"), and the Temporary Liquidity Guarantee Program ("TLGP") and the impact of such programs and related regulations on the Company and on international, national, and local economic and financial markets and conditions;

• the impact of the EESA and the ARRA and related rules and regulations on the business operations and competitiveness of the Company and other participating American financial institutions, including the impact of the executive compensation limits of these acts, which may impact the ability of the Company and other American financial institutions to retain and recruit executives and other personnel necessary for their businesses and competitiveness;

• the impact of certain provisions of the EESA and ARRA and related rules and regulations on the attractiveness of governmental programs to mitigate the effects of the current economic crisis, including the risks that certain financial institutions may elect not to participate in such programs, thereby decreasing the effectiveness of such programs;

• continuing consolidation in the financial services industry;

• new litigation or changes in existing litigation;

• success in gaining regulatory approvals, when required;

• changes in consumer spending and savings habits;

• increased competitive challenges and expanding product and pricing pressures among financial institutions;

• demand for financial services in the Company's market areas;

• inflation and deflation;

• technological changes and the Company's implementation of new technologies;

• the Company's ability to develop and maintain secure and reliable information technology systems;

• legislation or regulatory changes which adversely affect the Company's operations or business;

• the Company's ability to comply with applicable laws and regulations;

• changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies; and

• increased costs of deposit insurance and changes with respect to Federal Deposit Insurance Corporation ("FDIC") insurance coverage levels.

Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the 2008 Annual Report on Form 10-K of Zions Bancorporation filed with the Securities and Exchange Commission ("SEC") and available at the SEC's Internet site (http://www.sec.gov).

The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES

The Company has made no significant changes in its critical accounting policies and significant estimates from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2008, except as noted below.

Valuation of Asset-Backed Securities ("ABS")

The Company values ABS available-for-sale and held-to-maturity securities using several methodologies based on the appropriate fair value hierarchy consistent with currently available market information. At March 31, 2009, the Company valued substantially all of the ABS portfolio using Level 3 pricing methods as follows:

ZIONS BANCORPORATION AND SUBSIDIARIES

ASSET-BACKED SECURITIES FAIR VALUES



                                                     Held-to-maturity            Available-for-sale
                                                                Estimated
(In millions)                                    Amortized        fair       Amortized      Estimated
                                                   cost           value         cost        fair value
Trust preferred securities - bank and
insurance:
Internal model                                        1,205            625        1,204             878
Third party models                                       20              3            5               5
Dealer quotes                                            -              -            25              15
Other - Level 2                                          -              -             2               2

                                                      1,225            628        1,236             900

Trust preferred securities - real estate
investment trusts:
Third party models                                       36             18           59              21

                                                         36             18           59              21

Other:
Third party models                                       76             37           10               7
Dealer quotes                                            -              -            19               6
CDS spreads                                              -              -            70              52
Other - Level 2                                          -              -            25              24

                                                         76             37          124              89

Municipal securities:
Third party models                                       -              -            25              25
CDS spreads                                              -              -            44              44

                                                         -              -            69              69

Auction rate securities:
Dealer quotes                                            -              -             2               2
Third party models                                       -              -           158             158
CDS spreads                                              -              -            18              18

                                                         -              -           178             178

Total $ 1,337 $ 683 $ 1,666 $ 1,257

Internal Model

In the third quarter of 2008, the Company began using a licensed third party model to value bank and insurance trust preferred collateralized debt obligations ("CDOs"). The model uses market-based estimates of expected loss for the individual pieces of underlying collateral to arrive at a pool-level expected loss rate for each CDO. These loss assumptions are applied to the CDO's structure to generate cash flow projections for each tranche of the CDO. The fair value of each tranche is determined by discounting its resultant loss-adjusted cash flows with appropriate market based discount rates.

During fourth quarter of 2008 and continuing into 2009, several market developments made it increasingly difficult to use rating levels referenced to collateralized loan obligations ("CLOs") when discounting CDO cash flows. Included in these developments are the following:

• Moody's downgraded a large portion of the CDO tranches resulting in most of the securities carrying a split rating of either investment grade or non investment grade. A significant number of securities exhibited substantial differences in ratings at March 31, 2009. This resulted in an increasing lack of consistency in rating levels of CDO tranches. See "Investments Securities Portfolio" for schedules that outline the effect of an April 2009 downgrade by Fitch which resulted in similarity of ratings at below investment grade as of the date of this filing.

• Trading volume including new issuance in CLOs, which had been among the most liquid structured products, declined significantly. As a result, the market information became less reliable for CLOs and less relevant for other structured products.

• As the number of deferring and defaulted securities within the bank and insurance trust preferred CDO pools increased, each CDO has become more unique. At the end of the first quarter of 2009, the amount of currently deferring collateral ranged from none up to nearly 61% in the fifty-eight CDO deals of which Zions owns tranches.

• As the credit quality of the performing securities within the bank and insurance trust preferred CDO pools diverged, the Company's projection for further collateral defaults became more pool specific. For example, the additional projected 5 year cumulative defaults for the CDO collateral pools ranged from 7% to 24% at the end of the quarter.

• Finally, the FASB's April 9, 2009 issuance of FASB Staff Position ("FSP") FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Indentifying Transactions That Are Not Orderly, provided additional guidance on determining fair value for assets when the markets for such assets have low or no activity. The FASB view is that a significant decrease in the volume and level of activity for the asset or liability is an indication that transactions or quoted prices may not be determinative of fair value.

The method for deriving loss expectation for collateral underlying the CDOs depends on whether the collateral is from a public or private company. For public companies, a term structure of Probabilities of Default ("PDs") is obtained from a commercially available service. The service estimates PDs using a proprietary reduced form model derived using logistic regression on a historical default database. Because the service's model requires equity valuation related inputs (along with other macro and firm specific inputs) to produce default probabilities, the service does not produce results for private firms and some very small public firms that do not have readily available market data.

For private companies (and the few small public companies not evaluated by the service) PDs are estimated based on credit ratings. The credit ratings come from two external rating sources; one specific to banks, and the other to insurers. The Company has credit ratings for each piece of collateral whether private or public. Using the PD data on the public companies obtained from the commercial service, the Company calculates the average PD for each credit rating level by industry. The rating level average is then applied to all corresponding credits within each rating level that do not have a PD from the commercial service.

The PDs for the underlying collateral are then used to develop CDO deal-level expected loss curves. An external service which models the unique cash-flow waterfall and structure of each CDO deal is used to generate tranche-level cash flows using the Company's derived CDO deal-level loss assumptions (along with other relevant assumptions). The resultant cash-flows are discounted using the discount rate assumptions described below in order to produce valuations.

Due to the ongoing developments outlined above, the Company determined it would no longer be appropriate to bucket securities by ratings level in order to establish the discount margins required to estimate fair value of CDO securities by discounting projected credit adjusted cash flows. Instead, a more granular approach was developed to reflect the specific risks embedded in every deal.

The discount rate assumption for each CDO tranche was derived from trading yields on publicly traded trust preferred securities and projected default probabilities on the underlying financial companies. The discount margins on the traded securities were regressed to those of the CDOs by comparing expected levels of cash flow impairments between the two types of securities. CDO tranches with greater uncertainty in their cash flow should be discounted at rates in excess of those market participants would use for tranches with more stable expected cash flows as a result of more subordination and/or better credit quality in the underlying collateral. The effect of this assumption methodology after credit stressing the contractual cash flows was discount margins between LIBOR + 5% and LIBOR + 15% with the low end applied to tranches with substantial current subordination and/or high credit quality of remaining performing collateral. The high end of the discount margin spectrum was applied to tranches in which minor changes in future default assumptions produced substantial deterioration in tranche cash flows.

During the first quarter of 2009, the Company modified its recovery rate assumption which is a component of the CDO loss assumption. As of March 31, 2009, the model incorporated a recovery rate assumption of 40% for trust preferred collateral where the deferral option of the issuer had been exercised as permitted under the terms of the security. The assumption is supported by observable data on default probabilities for banks with deferring collateral, trading levels for deferring collateral and other data relevant to banks in deferral. An option to defer current interest and capitalize such interest for up to five years is a standard in trust preferred securities. If and when a deferring issuer were to default, the model would revert to a 0% recovery rate.

The following schedule sets forth the sensitivity of the current CDO fair values using an internal model to changes in the most significant assumptions utilized in the model:

SENSITIVITY OF BANK AND INSURANCE CDO VALUATIONS TO ADVERSE

CHANGES OF CURRENT MODEL KEY VALUATION ASSUMPTIONS



                                                                           Bank and insurance
(Amounts in millions)                                                        CDOs at Level 3
                                                          Held-to-maturity                    Available-for-sale

Fair value balance at March 31,
2009                                               $         625                        $         878
Expected collateral credit
losses 1

                                                    Incremental        Cumulative        Incremental        Cumulative
Weighted average:
Loss percentage from currently
defaulted or deferring
collateral 2                                                                  8.2 %                               12.9 %
Projected loss percentage from
currently performing collateral
1-year                                                       3.4 %           11.6 %               4.0 %           16.9 %
years 2-5                                                    5.2 %           16.8 %               6.0 %           22.9 %
years 6-30                                                   6.7 %           23.5 %               7.3 %           30.2 %
Decrease in fair value due to
increase in projected loss
percentage from currently
performing collateral 3                   25 %     $        (1.8 )                      $       (11.3 )
                                          50 %             (31.1 )                              (21.7 )
                                         100 %            (111.3 )                              (39.5 )
Discount rate 4
Weighted average spread over
LIBOR                                                     817 bp                               601 bp
Decrease in fair value due to
increase in discount rate           + 100 bp       $       (76.4 )                      $      (105.4 )
                                    + 200 bp              (122.6 )                             (163.7 )

1 The Company uses an expected credit loss model which specifies cumulative losses at the 1-year, 5-year, and 30-year points from the date of valuation.

2 Weighted average percentage of collateral that is defaulted due to bank failures or deferring payment as allowed under the terms of security, including a 0% recovery rate on defaulted collateral and a 40% recovery rate on deferring collateral.

3 Percentage increase is applied to incremental projected loss percentages from currently performing collateral. For example, the 50% and 100% stress scenarios would result in cumulative 30 year losses of 31.2% = 23.5% + 50%(3.4%+5.2%+6.7%) and 38.8%= 23.5% + 100%(3.4%+5.2%+6.7%) respectively.

4 The discount rate is a spread over the LIBOR swap yield curve at the date of valuation.

The adverse changes in expected cumulative credit losses resulted in a generally larger decrease in fair value for held-to-maturity ("HTM") than available-for-sale ("AFS") securities because the AFS portfolio is composed primarily of more senior CDO tranches. In general these senior tranches receive accelerated principal payments under scenarios of high credit losses provided that the credit losses do not exceed the available subordination in the CDO deal. By contrast more junior tranches which are in our HTM portfolio absorb credit losses and defer principal and interest payments upon increasing credit losses.

Third Party Models

At March 31, 2009, the Company utilized third party valuation services for eighteen securities with an aggregate amortized cost of $206 million in the ABS CDO and trust preferred asset classes. These securities continued to have insufficient observable market data available to directly determine prices. The Company reviewed the methodologies employed by third party models. This included a review of all relevant data inputs and the appropriateness of key model assumptions. These assumptions included, but were not limited to, probability of default, collateral recovery rates, discount rates, over-collateralization levels, and rating transition probability matrices from rating agencies. The model valuations obtained from third party services were evaluated for reasonableness including quarter to quarter changes in assumptions and comparison to other available data which included third party and internal model results and valuations. A range of value estimates is not provided because third party vendors utilized point estimates.

A total of $183 million of auction rate and municipal securities were valued using third party created matrix referencing ratings as the key variable with regards to valuation.

Dealer Quotes

The $44 million of asset-backed securities at amortized cost are valued using nonbinding and unadjusted dealer quotes. Multiple quotes are not available and the values provided are based on a combination of proprietary dealer quotes. . . .