10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2006

OR

¨ 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 of incorporation or organization)	(I.R.S. Employer Identification No.)
ONE SOUTH MAIN, SUITE 1134 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x                     Accelerated filer                     Non-accelerated filer                     

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No  x

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 July 31, 2006 106,677,220 shares

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 Changes in Shareholders’ Equity and Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	42
ITEM 4.	Controls and Procedures	42
PART II.	OTHER INFORMATION
ITEM 1.	Legal Proceedings	42
ITEM 1A.	Risk Factors	43
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
ITEM 4.	Submission of Matters to a Vote of Security Holders	43
ITEM 6.	Exhibits	45
SIGNATURES		46

2

PART I.    FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

ZIONS BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)	June 30, 2006		December 31, 2005		June 30, 2005
	(Unaudited)				(Unaudited)
ASSETS
Cash and due from banks	$	1,773,829	$	1,706,590	$	1,232,527
Money market investments:
Interest-bearing deposits		87,512		22,179		11,004
Federal funds sold		262,959		414,281		52,327
Security resell agreements		225,160		230,282		537,327
Investment securities:
Held to maturity, at cost (approximate market value $620,786, $642,258, and $651,936)		639,593		649,791		649,888
Available for sale, at market		5,086,840		5,305,859		3,972,829
Trading account, at market (includes $50,684, $43,444, and $102,916 transferred as collateral under repurchase agreements)		70,646		101,562		282,082
		5,797,079		6,057,212		4,904,799
Loans:
Loans held for sale		248,948		256,236		207,123
Loans and leases		32,576,017		29,996,022		23,718,150
		32,824,965		30,252,258		23,925,273
Less:
Unearned income and fees, net of related costs		142,630		125,322		103,710
Allowance for loan losses		348,475		338,399		281,428
Loans and leases, net of allowance		32,333,860		29,788,537		23,540,135
Other noninterest-bearing investments		993,379		938,515		698,968
Premises and equipment, net		574,154		564,745		409,488
Goodwill		1,881,256		1,887,588		638,933
Core deposit and other intangibles		177,692		199,166		51,397
Other real estate owned		16,024		19,966		11,070
Other assets		1,019,182		950,578		787,319
	$	45,142,086	$	42,779,639	$	32,875,294
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	10,163,834	$	9,953,833	$	7,577,450
Interest-bearing:
Savings and money market		15,814,128		16,055,754		13,195,200
Time under $100,000		2,030,717		1,938,789		1,468,017
Time $100,000 and over		3,402,314		2,514,596		1,557,978
Foreign		1,843,217		2,179,436		599,890
		33,254,210		32,642,408		24,398,535
Securities sold, not yet purchased		27,388		64,654		291,353
Federal funds purchased		1,397,694		1,255,662		1,593,010
Security repurchase agreements		1,169,296		1,027,658		755,676
Other liabilities		789,222		592,599		544,691
Commercial paper		245,126		167,188		75,393
Federal Home Loan Bank advances and other borrowings:
One year or less		1,216,848		18,801		314,643
Over one year		133,450		234,488		227,039
Long-term debt		2,432,903		2,511,366		1,712,381
Total liabilities		40,666,137		38,514,824		29,912,721
Minority interest		28,619		27,551		24,665
Shareholders’ equity:
Capital stock:
Preferred stock, without par value; authorized 3,000,000 shares; issued and outstanding, none		–		–		–
Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 106,611,731, 105,147,562, and 90,062,646 shares		2,218,711		2,156,732		961,510
Retained earnings		2,386,369		2,179,885		1,994,015
Accumulated other comprehensive loss		(148,327)		(83,043)		(12,905)
Deferred compensation		(9,423)		(16,310)		(4,712)
Total shareholders’ equity		4,447,330		4,237,264		2,937,908
	$	45,142,086	$	42,779,639	$	32,875,294

See accompanying notes to consolidated financial statements.

3

ZIONS BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)	Three Months Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Interest income:
Interest and fees on loans	$	591,139	$	380,233	$	1,133,923	$	731,168
Interest on loans held for sale		4,055		2,618		8,101		4,221
Lease financing		4,496		4,023		8,626		8,089
Interest on money market investments		5,910		6,041		11,757		10,679
Interest on securities:
Held to maturity – taxable		2,209		1,833		4,424		3,638
Held to maturity – nontaxable		5,683		6,008		11,214		11,991
Available for sale – taxable		68,995		49,102		138,099		96,022
Available for sale – nontaxable		2,119		834		4,458		1,690
Trading account		1,995		5,044		4,069		11,079
Total interest income		686,601		455,736		1,324,671		878,577
Interest expense:
Interest on savings and money market deposits		97,131		49,236		183,754		89,972
Interest on time and foreign deposits		67,424		24,557		126,909		44,444
Interest on short-term borrowings		43,475		24,152		71,453		44,781
Interest on long-term debt		42,244		26,863		83,381		53,501
Total interest expense		250,274		124,808		465,497		232,698
Net interest income		436,327		330,928		859,174		645,879
Provision for loan losses		17,022		11,417		31,534		20,800
Net interest income after provision for loan losses		419,305		319,511		827,640		625,079
Noninterest income:
Service charges and fees on deposit accounts		41,414		31,406		81,452		62,188
Loan sales and servicing income		14,921		16,790		30,389		34,858
Other service charges, commissions and fees		43,718		28,132		83,649		54,785
Trust and investment management income		5,312		4,604		10,008		8,071
Income from securities conduit		8,492		8,617		16,898		17,436
Dividends and other investment income		9,946		7,436		19,155		15,444
Market making, trading and nonhedge derivative income		5,444		6,509		9,869		10,293
Equity securities losses, net		(1,764)		(2,778)		(1,214)		(4,165)
Fixed income securities gains (losses), net		5,156		(1,187)		5,407		146
Other		5,120		6,403		10,634		9,774
Total noninterest income		137,759		105,932		266,247		208,830
Noninterest expense:
Salaries and employee benefits		185,643		138,244		371,498		276,370
Occupancy, net		24,549		18,504		48,630		36,957
Furniture and equipment		22,737		16,260		45,741		32,179
Legal and professional services		9,005		7,967		17,514		16,217
Postage and supplies		8,646		6,798		16,361		13,286
Advertising		6,814		5,335		12,799		9,428
Impairment losses on long-lived assets		–		–		1,304		633
Restructuring charges		–		–		17		92
Merger related expense		8,906		–		15,713		–
Amortization of core deposit and other intangibles		10,692		3,696		21,385		7,129
Provision for unfunded lending commitments		(249)		1,042		(528)		2,713
Other		56,533		44,200		107,297		86,279
Total noninterest expense		333,276		242,046		657,731		481,283
Income before income taxes and minority interest		223,788		183,397		436,156		352,626
Income taxes		78,821		66,330		154,079		126,079
Minority interest		(343)		(1,743)		(866)		(2,497)
Net income	$	145,310	$	118,810	$	282,943	$	229,044
Weighted average shares outstanding during the period:
Basic shares		106,001		89,846		105,738		89,861
Diluted shares		107,883		91,610		107,867		91,596
Net income per common share:
Basic	$	1.37	$	1.32	$	2.68	$	2.55
Diluted		1.35		1.30		2.62		2.50

See accompanying notes to consolidated financial statements.

4

ZIONS BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

(Unaudited)

(In thousands)	Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Deferred compensation		Total shareholders’ equity
Balance, December 31, 2005	$	2,156,732	$	2,179,885	$	(83,043)	$	(16,310)	$	4,237,264
Comprehensive income:
Net income for the period				282,943						282,943
Other comprehensive loss, net of tax:
Net realized and unrealized holding losses on investments and retained interests						(31,281)
Foreign currency translation						543
Reclassification for net realized gains on investments recorded in operations						(1,456)
Net unrealized losses on derivative instruments						(33,090)
Other comprehensive loss						(65,284)				(65,284)
Total comprehensive income										217,659
Stock redeemed and retired		(1,338)								(1,338)
Net stock options exercised		63,449								63,449
Reversal of deferred compensation, adoption of SFAS 123R		(11,111)						11,111		–
Share-based compensation		10,979								10,979
Cash dividends – common, $.72 per share				(76,459)						(76,459)
Change in deferred compensation								(4,224)		(4,224)
Balance, June 30, 2006	$	2,218,711	$	2,386,369	$	(148,327)	$	(9,423)	$	4,447,330
Balance, December 31, 2004	$	972,065	$	1,830,064	$	(7,932)	$	(4,218)	$	2,789,979
Comprehensive income:
Net income for the period				229,044						229,044
Other comprehensive loss, net of tax:
Net realized and unrealized holding gains on investments and retained interests						2,790
Foreign currency translation						(1,123)
Reclassification for net realized gains on investments recorded in operations						(153)
Net unrealized losses on derivative instruments						(6,487)
Other comprehensive loss						(4,973)				(4,973)
Total comprehensive income										224,071
Stock redeemed and retired		(80,058)								(80,058)
Net stock options exercised and restricted stock issued		69,503								69,503
Cash dividends – common, $.72 per share				(65,093)						(65,093)
Change in deferred compensation								(494)		(494)
Balance, June 30, 2005	$	961,510	$	1,994,015	$	(12,905)	$	(4,712)	$	2,937,908

Total comprehensive income for the three months ended June 30, 2006 and 2005 was $120,082 and $156,629, respectively.

See accompanying notes to consolidated financial statements.

5

ZIONS BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands)	2006	2005	2006	2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$  145,310	$  118,810	$  282,943	$	229,044
Adjustments to reconcile net income to net cash provided by operating activities:
Impairment losses on long lived assets	–	–	1,304		633
Provision for loan losses	17,022	11,417	31,534		20,800
Depreciation of premises and equipment	19,376	14,755	39,348		29,442
Amortization	12,967	9,195	25,007		17,055
Deferred income tax expense (benefit)	8,905	(10,525)	95		(19,675)
Share-based compensation	6,081	418	10,979		455
Excess tax benefits from share-based compensation	(7,863)	–	(13,045)		–
Loss allocated to minority interest	(343)	(1,743)	(866)		(2,497)
Equity securities losses, net	1,764	2,778	1,214		4,165
Fixed income securities losses (gains), net	(5,156)	1,187	(5,407)		(146)
Net decrease in trading securities	81,278	21,387	30,916		7,988
Principal payments on and proceeds from sales of loans held for sale	333,884	248,032	613,007		459,323
Additions to loans held for sale	(263,367)	(259,207)	(590,059)		(459,492)
Net gains on sales of loans, leases and other assets	(8,247)	(9,840)	(17,125)		(21,364)
Net increase in cash surrender value of bank owned life insurance	(6,487)	(4,371)	(12,739)		(9,209)
Undistributed earnings of affiliates	(1,339)	(2,215)	(2,942)		(4,467)
Change in accrued income taxes	(58,740)	(58,113)	15,362		5,733
Change in accrued interest receivable	(14,904)	(12,941)	(9,993)		(4,650)
Change in other assets	(205,251)	59,046	(140,371)		1,273
Change in other liabilities	178,335	(14,341)	167,615		113,903
Change in accrued interest payable	(1,680)	(3,932)	12,383		2,199
Other, net	12,351	3,602	17,620		4,208
Net cash provided by operating activities	243,896	113,399	456,780		374,721
CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease (increase) in money market investments	(106,521)	(594)	91,111		(7,571)
Proceeds from maturities of investment securities held to maturity	23,662	18,201	60,642		55,450
Purchases of investment securities held to maturity	(18,873)	(32,243)	(50,276)		(63,539)
Proceeds from sales of investment securities available for sale	1,110,847	222,515	2,024,286		656,272
Proceeds from maturities of investment securities available for sale	489,888	513,732	1,148,528		966,872
Purchases of investment securities available for sale	(1,516,665)	(691,791)	(3,000,346)		(1,407,518)
Proceeds from sales of loans and leases	82,553	120,323	141,970		219,095
Net increase in loans and leases	(1,720,493)	(983,796)	(2,762,339)		(1,433,255)
Net increase in other noninterest-bearing investments	(13,431)	(1,460)	(37,874)		(993)
Proceeds from sales of premises and equipment	2,699	518	4,855		1,988
Purchases of premises and equipment	(31,117)	(17,868)	(54,683)		(32,751)
Proceeds from sales of other real estate owned	20,351	5,509	24,908		10,552
Net cash paid for net liabilities on branches sold	–	(16,076)	–		(16,076)
Net cash used in investing activities	(1,677,100)	(863,030)	(2,409,218)		(1,051,474)

6

ZIONS BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2006		2005		2006		2005
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	$	381,502	$	543,297	$	611,802	$	1,130,124
Net change in short-term funds borrowed		1,262,756		399,943		1,522,389		13,710
Proceeds from FHLB advances and other borrowings over one year		–		–		150		–
Payments on FHLB advances and other borrowings over one year		(593)		(556)		(101,188)		(1,113)
Proceeds from issuance of long-term debt		250,000		–		250,000		–
Payments on long-term debt		(254,156)		–		(254,156)		–
Proceeds from issuance of common stock		14,438		36,502		55,432		60,712
Payments to redeem common stock		(1,310)		(49,988)		(1,338)		(80,058)
Excess tax benefits from share-based compensation		7,863		–		13,045		–
Dividends paid		(38,324)		(32,522)		(76,459)		(65,093)
Net cash provided by financing activities		1,622,176		896,676		2,019,677		1,058,282
Net increase in cash and due from banks		188,972		147,045		67,239		381,529
Cash and due from banks at beginning of period		1,584,857		1,085,482		1,706,590		850,998
Cash and due from banks at end of period	$	1,773,829	$	1,232,527	$	1,773,829	$	1,232,527
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	251,212	$	129,485	$	451,620	$	228,034
Income taxes		143,415		133,675		150,570		134,033
Noncash items:
Loans transferred to other real estate owned		9,584		6,250		17,851		10,494

See accompanying notes to consolidated financial statements.

7

ZIONS BANCORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2006

1.    BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Zions Bancorporation (“the Parent”) and its majority-owned subsidiaries (collectively “the Company,” “we,” “our,” “us”) have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles 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. Certain prior period amounts have been reclassified to conform to the current period presentation.

Operating results for the three- and six-month periods ended June 30, 2006 are not necessarily indicative of the results that may be expected in future periods. The balance sheet at December 31, 2005 is from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Zions Bancorporation’s Annual Report on Form 10-K for the year ended December 31, 2005.

The Company provides a full range of banking and related services through banking subsidiaries in ten states as follows: Zions First National Bank (“Zions Bank”), in Utah and Idaho; California Bank & Trust (“CB&T”); Amegy Corporation (“Amegy”), in Texas; National Bank of Arizona (“NBA”); Nevada State Bank (“NSB”); Vectra Bank Colorado (“Vectra”), in Colorado and New Mexico; The Commerce Bank of Washington (“TCBW”); and The Commerce Bank of Oregon (“TCBO”). Amegy was acquired effective December 3, 2005 as discussed in Note 3. TCBO was opened in October 2005 and is not expected to have a material effect on consolidated operations for several years.

2.    OTHER RECENT ACCOUNTING PRONOUNCEMENTS

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes that a tax position must meet a minimum more-likely-than-not threshold before it can be recognized in the financial statements. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure, and transition. In addition, FIN 48 removes income taxes from the scope of Statement of Financial Accounting Standards (“SFAS”) No. 5, Accounting for Contingencies. FIN 48 is effective for fiscal years beginning after December 15, 2006, or January 1, 2007 for calendar year-end companies. Management is currently evaluating the impact this Interpretation may have on the Company’s financial statements.

8

ZIONS BANCORPORATION AND SUBSIDIARIES

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, an amendment of FASB Statements No. 133 and 140. This Statement amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, to require evaluation of all interests in securitized financial assets under SFAS 133, eliminating a previous exemption under SFAS 133 for such financial instruments. Entities must now distinguish interests that are freestanding derivatives, hybrid financial instruments containing embedded derivatives requiring bifurcation, or hybrid financial instruments containing embedded derivatives that do not require bifurcation. In addition, the Statement permits fair value remeasurement for any hybrid instrument (on an instrument-by-instrument basis) that contains an embedded derivative that would otherwise require bifurcation. The Statement also amends SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, by eliminating the prohibition on a qualifying special-purpose entity (“QSPE”) from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140. This Statement permits entities to choose to either subsequently measure recorded servicing rights at fair value and report changes in fair value in earnings, or amortize servicing rights in proportion to the estimated net servicing income or loss and assess the rights for impairment or the need for an increased obligation. In addition, the Statement, among other things, clarifies when a servicer should separately recognize servicing assets and liabilities, and requires initial fair value measurement, if practicable, of such recognized assets and liabilities.

In general, both Statements are effective as of the beginning of an entity’s fiscal year after September 15, 2006, or January 1, 2007 for calendar year-end companies. Management is evaluating the impact these Statements may have on the Company’s financial statements.

The Company’s adoption of SFAS No. 123R, Share-Based Payment, is discussed in Note 6.

3.    MERGER AND ACQUISITION ACTIVITY

Effective December 3, 2005, we acquired 100% of the outstanding stock of Amegy Bancorporation, Inc. headquartered in Houston, Texas. The tax-free merger included the formation of a new holding company, Amegy Corporation (“Amegy”), which became a wholly-owned subsidiary of the Company. The merger expands the Company’s banking presence into Texas. Amegy’s results of operations for the month of December 2005 and for the six months ended June 30, 2006 were included with the Company’s results of operations.

Details of the merger, including the allocation of the purchase price, are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. The allocation of the purchase price is subject to change when the determination of Amegy’s asset and liability values is finalized within one year from the merger date. As of June 30, 2006, the allocation had not changed from December 31, 2005.

9

ZIONS BANCORPORATION AND SUBSIDIARIES

The following unaudited pro forma condensed combined financial information presents the Company’s results of operations assuming the merger had taken place as of January 1, 2005. Also shown for comparative purposes are the historical results of operations for the Company without Amegy (in thousands, except per share amounts):

	Three Months Ended June 30, 2005				Six Months Ended June 30, 2005
	Pro forma combined		Zions historical without Amegy		Pro forma combined		Zions historical without Amegy
Net interest income	$	388,636	$	330,928	$	761,037	$	645,879
Provision for loan losses		12,917		11,417		25,400		20,800
Noninterest income		137,279		105,932		268,729		208,830
Noninterest expense		315,683		242,046		623,783		481,283
Income before income taxes and minority interest		197,315		183,397		380,583		352,626
Net income		130,009		118,810		250,909		229,044
Net income per common share:
Basic	$	1.25	$	1.32	$	2.41	$	2.55
Diluted		1.22		1.30		2.35		2.50
Weighted average shares outstanding during the period:
Basic		104,198		89,846		104,213		89,861
Diluted		106,621		91,610		106,582		91,596

Merger related expenses for this merger of $8.9 million and $15.7 million for the three- and six-month periods ended June 30, 2006 consisted of systems integration and related charges of $5.9 million and $10.1 million, and severance and other employee-related costs of $3.0 million and $5.6 million, respectively.

As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, Amegy accrued as of the date of merger approximately $15.2 million of liabilities from purchase accounting adjustments for certain exit and termination costs. These costs consisted of employee-related costs of $12.2 million and other exit costs of $3.0 million. As of June 30, 2006, Amegy had paid approximately $10.5 million of these costs.

4.    LONG-TERM DEBT

On March 31, 2006, we filed an “automatic shelf registration statement” with the Securities and Exchange Commission (“SEC”) as a “well-known seasoned issuer” under their revised rules effective December 1, 2005 with respect to the registration, communications and offering processes under the Securities Act of 1933. The shelf registration replaced a previous shelf registration and covers securities of the Company, Zions Capital Trust C and Zions Capital Trust D.

On April 27, 2006, under the new shelf registration, we issued $250 million of floating rate senior notes due April 15, 2008. The notes require quarterly interest payments at three-month LIBOR plus 0.12%. They are not redeemable prior to maturity and are not listed on any national securities exchange. Proceeds from the notes were used to retire all of the $150 million of 2.70% senior notes due May 1, 2006 and all of the remaining $104.2 million of 6.95% subordinated notes due May 15, 2011 and redeemable May 15, 2006.

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5.    SHAREHOLDERS’ EQUITY

Changes in accumulated other comprehensive income (loss) are summarized as follows (in thousands):

	Net unrealized gains (losses) on investments, retained interests and other		Net unrealized losses on derivative instruments		Minimum pension liability		Total
Six Months Ended June 30, 2006:
Balance, December 31, 2005	$	(10,772)	$	(50,264)	$	(22,007)	$	(83,043)
Other comprehensive loss, net of tax:
Net realized and unrealized holding losses during the period, net of income tax benefit of $19,376		(31,281)						(31,281)
Foreign currency translation		543						543
Reclassification for net realized gains recorded in operations, net of income tax expense of $902		(1,456)						(1,456)
Net unrealized losses on derivative instruments, net of reclassification to operations of $(11,252) and income tax benefit of $21,988				(33,090)				(33,090)
Other comprehensive loss		(32,194)		(33,090)		–		(65,284)
Balance, June 30, 2006	$	(42,966)	$	(83,354)	$	(22,007)	$	(148,327)
Six Months Ended June 30, 2005:
Balance, December 31, 2004	$	19,774	$	(9,493)	$	(18,213)	$	(7,932)
Other comprehensive loss, net of tax:
Net realized and unrealized holding gains during the period, net of income tax expense of $1,728		2,790						2,790
Foreign currency translation		(1,123)						(1,123)
Reclassification for net realized gains recorded in operations, net of income tax expense of $94		(153)						(153)
Net unrealized losses on derivative instruments, net of reclassification to operations of $10,832 and income tax benefit of $4,074				(6,487)				(6,487)
Other comprehensive income (loss)		1,514		(6,487)		–		(4,973)
Balance, June 30, 2005	$	21,288	$	(15,980)	$	(18,213)	$	(12,905)

6.    SHARE-BASED COMPENSATION

We have a stock option and incentive plan which allows us to grant stock options and restricted stock to employees and nonemployee directors. The total shares authorized under the plan are 8,900,000 of which 6,604,869 shares are available for future grant as of June 30, 2006.

Prior to January 1, 2006, we accounted for share-based compensation under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25 (“APB 25”), Accounting for Stock Issued to Employees, and related Interpretations, as permitted by SFAS No. 123, Accounting for Stock-Based Compensation. Accordingly, we did not record any compensation expense for stock options, as the exercise price of the option was equal to the quoted market price of the stock on the date of grant.

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Effective January 1, 2006, we adopted SFAS No. 123R, Share-Based Payment, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of income based on their fair values. This accounting utilizes a “modified grant-date” approach in which the fair value of an equity award is estimated on the grant date without regard to service or performance vesting conditions. We adopted SFAS 123R using the “modified prospective” transition method. Under this transition method, compensation expense is recognized beginning January 1, 2006 based on the requirements of SFAS 123R for all share-based payments granted after January 1, 2006, and based on the requirements of SFAS 123 for all awards granted to employees prior to January 1, 2006 that remain unvested as of that date. Results of operations for prior periods have not been restated.

The adoption of SFAS 123R, compared to the previous accounting for share-based compensation under APB 25, reduced the Company’s income before income taxes and minority interest and net income along with the related basic and diluted per common share amounts as follows (in thousands, except per share amounts):

	June 30, 2006
	Three Months Ended		Six Months Ended
Reduction in:
Income before income taxes and minority interest	$	4,147	$	8,066
Net income		2,756		5,570
Net income per common share:
Basic	$	0.03	$	0.05
Diluted		0.03		0.05

As required by SFAS 123R, upon adoption, we reversed $11.1 million of unearned compensation related to restricted stock from deferred compensation and common stock.

The impact on net income and net income per common share if we had applied the provisions of SFAS 123 to stock options for the three- and six-month periods ended June 30, 2005 was as follows (in thousands, except per share amounts):

	June 30, 2005
	Three Months Ended		Six Months Ended
Net income, as reported	$	118,810	$	229,044
Deduct: Total share-based compensation expense determined under fair value based method for stock options, net of related tax effects		(1,991)		(4,454)
Pro forma net income	$	116,819	$	224,590
Net income per common share:
Basic – as reported	$	1.32	$	2.55
Basic – pro forma		1.30		2.50
Diluted – as reported		1.30		2.50
Diluted – pro forma		1.28		2.45

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ZIONS BANCORPORATION AND SUBSIDIARIES

We classify all share-based awards as equity instruments and recognize the vesting of the awards ratably over their respective terms. As of June 30, 2006, compensation expense not yet recognized for nonvested share-based awards was approximately $55.2 million, which is expected to be recognized over a weighted average period of 1.4 years.

SFAS 123R also requires the benefits of tax deductions in excess of recognized compensation expense resulting from the exercise of share-based awards to be reported as a financing cash flow. For the three- and six month periods ended June 30, 2006, this requirement reduced net operating cash flows and increased net financing cash flows by approximately $7.9 million and $13.0 million, respectively.

Stock Options

Options granted to employees vest at the rate of one third each year and expire seven years after the date of grant. Options granted to non employee directors are exercisable in increments from six months to three and a half years and expire ten years after the date of grant.

In 2005, we discontinued our broad-based employee stock option plan under which options were made available to substantially all employees; however, existing options continue to vest at the rate of one third each year and expire four years after the date of grant.

For the three- and six-month periods ended June 30, 2006, the additional compensation expense of $4.1 million and $8.1 million, respectively, for stock options under SFAS 123R is included in salaries and employee benefits in the statements of income with the corresponding increase to shareholders’ equity included in common stock. The related tax benefit recognized as a reduction of income tax expense was $1.4 million and $2.5 million, respectively, for the same periods.

During the three- and six-month periods ended June 30, 2006, the amount of cash received from the exercise of stock options was $14.4 million and $55.4 million, respectively, and the tax benefit realized as a reduction of income taxes payable was $5.2 million and $14.4 million, respectively. Of these amounts, $3.0 million and $6.4 million reduced goodwill for the tax benefit of vested share-based awards converted in the Amegy acquisition that were exercised during the three- and six-month periods, and $2.2 million and $8.0 million, respectively, were included in common stock as part of net stock options exercised.

Compensation expense was determined from the estimates of fair values of stock options granted using the Black-Scholes option-pricing model. The following significant assumptions were used for options granted during the three months ended June 30, 2006:

Weighted average of fair value for options granted	$	15.02
Weighted average assumptions used:
Expected dividend yield		2.0	%
Expected volatility		18.0	%
Risk-free interest rate		4.96	%
Expected life (in years)		4.1

No stock options were granted during the three months ended March 31, 2006. The methodology used to estimate the fair values of stock options is consistent with the estimates used for the pro forma presentation in periods prior to the adoption of SFAS 123R. The preceding assumptions reflect management’s judgment and include consideration of historical experience. The risk-free interest rate is based on the U. S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option.

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The following summarizes our stock option activity for the six months ended June 30, 2006:

	Number of shares	Weighted average exercise price
Balance at December 31, 2005	7,497,566	$	52.79
Granted	977,024		81.14
Exercised	(1,155,141)		48.81
Expired	(24,671)		51.64
Forfeited	(59,339)		59.97
Balance at June 30, 2006	7,235,439		57.19
Outstanding options exercisable as of June 30, 2006	4,748,241	$	50.14

We issue new authorized shares for the exercise of stock options. During the three- and six-month periods ended June 30, 2006, the total intrinsic value of options exercised was approximately $8.3 million and $36.4 million, respectively.

Additional selected information on stock options at June 30, 2006 follows:

	Outstanding options				Exercisable options
Exercise price range	Number of shares	Weighted average exercise price		Weighted average remaining contractual life (years)	Number of shares	Weighted average exercise price
$    0.32 to $  19.99	96,878	$	12.03	1.1 (1)	96,878	$	12.03
$  20.00 to $  39.99	191,305		27.77	2.8	191,305		27.77
$  40.00 to $  44.99	1,429,342		42.22	3.0	1,430,146		42.22
$  45.00 to $  49.99	397,394		48.28	4.9	390,394		48.27
$  50.00 to $  54.99	1,113,240		53.72	2.9	1,108,356		53.72
$  55.00 to $  59.99	1,712,404		56.95	4.9	1,038,065		57.00
$  60.00 to $  64.99	211,605		61.51	3.1	87,742		61.90
$  65.00 to $  69.99	210,897		67.28	6.9	146,210		67.45
$  70.00 to $  74.99	781,474		70.86	6.0	257,437		70.88
$  75.00 to $  82.92	1,090,900		80.59	6.9	1,708		75.58
	7,235,439		57.19	4.5 (1)	4,748,241		50.14

(1) The weighted average remaining contractual life excludes 35,023 stock options which expire between the date of termination and one year from the date of termination, depending upon certain circumstances.

For outstanding options at June 30, 2006, the aggregate intrinsic value was $154.7 million. For exercisable options at June 30, 2006, the aggregate intrinsic value was $133.1 million and the weighted average remaining contractual life was 3.9 years.

Restricted Stock

Restricted stock granted vests over four years. During the vesting period, the holder has full voting rights and receives dividend equivalents. For the three- and six-month periods ended June 30, 2006, compensation expense recognized for issuances of restricted stock and included in salaries and employee benefits in the

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ZIONS BANCORPORATION AND SUBSIDIARIES

statement of income was $1.9 million and $2.9 million, respectively. Amounts for the corresponding periods in 2005 were $0.4 million and $0.5 million, respectively. The corresponding increase to shareholders’ equity was included in common stock. Compensation expense was determined based on the number of restricted shares granted and the market price of our common stock at the grant date.

The following summarizes our restricted stock activity for the six months ended June 30, 2006:

	Number of shares	Weighted average grant price
Nonvested restricted shares at December 31, 2005	203,983	$	68.99
Granted	279,625		80.16
Vested	(46,865)		70.98
Forfeited	(9,113)		72.44
Nonvested restricted shares at June 30, 2006	427,630		77.11

The total fair value of restricted stock vesting during the three- and six-month periods ended June 30, 2006 was $3.3 million and $3.4 million, respectively. Amounts for the corresponding periods in 2005 were not significant.

7.    GUARANTEES

The following are guarantees issued by the Company (in thousands):

	June 30, 2006		December 31, 2005
Standby letters of credit:
Financial	$	1,072,389	$	1,015,019
Performance		301,295		240,763
	$	1,373,684	$	1,255,782

The Company’s Annual Report on Form 10-K for the year ended December 31, 2005 contains further information on the nature of these letters of credit along with their terms and collateral requirements. At June 30, 2006, the carrying value recorded by the Company as a liability for these guarantees was $4.8 million.

Certain mortgage loans sold have limited recourse provisions for periods ranging from three months to one year. The amount of losses resulting from the exercise of these provisions has not been significant.

As of June 30, 2006, the Parent has guaranteed approximately $476.1 million of debt issued by affiliated trusts issuing trust preferred securities. The trusts and related trust preferred securities are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

Zions Bank provides a liquidity facility (“Liquidity Facility”) for a fee to Lockhart Funding, LLC (“Lockhart”), a QSPE securities conduit. Lockhart purchases floating rate U.S. Government and AAA-rated securities with funds from the issuance of commercial paper. Zions Bank also provides interest rate hedging support and administrative and investment advisory services for a fee. Pursuant to the Liquidity Facility contract, Zions Bank is required to purchase securities from Lockhart to provide funds for Lockhart to repay maturing commercial paper upon Lockhart’s inability to access the commercial paper market, or upon a commercial paper market disruption as specified in governing documents for Lockhart. Pursuant to the

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ZIONS BANCORPORATION AND SUBSIDIARIES

governing documents, including the liquidity agreement, if any security in Lockhart is downgraded below AA-, Zions Bank must either 1) place its letter of credit on the security, 2) obtain credit enhancement from a third party, or 3) purchase the security from Lockhart at book value. At any given time, the maximum commitment of Zions Bank is the book value of Lockhart’s securities portfolio, which is not allowed to exceed the size of the Liquidity Facility commitment. At June 30, 2006, the book value of Lockhart’s securities portfolio was $5.0 billion, which approximated market value, and the size of the Liquidity Facility commitment was $6.12 billion. No amounts were outstanding under the Liquidity Facility at June 30, 2006.

The FASB continues to deliberate other projects that propose to amend SFAS 140 in addition to those discussed in Note 2. These include isolation of transferred assets and permitted activities of QSPEs. The proposed amendments, among other things, may require changes to the operating activities of QSPEs and other aspects relating to the transfer of financial assets. Subject to the requirements of any final standards when they are issued, Lockhart’s operations may need to be modified to preserve its off-balance sheet status.

8.    RETIREMENT PLANS

The following disclosures are required for interim financial statements by SFAS No. 132R, Employers’ Disclosures about Pensions and Other Postretirement Benefits (in thousands):

	Pension benefits						Postretirement benefits						Pension benefits						Postretirement benefits
	Three Months Ended June 30,												Six Months Ended June 30,
	2006			2005			2006			2005			2006			2005			2006			2005
Service cost	$	129		$	133		$	32		$	29		$	258		$	286		$	64		$	60
Interest cost		2,148			1,990			86			86			4,300			4,269			172			175
Expected return on plan assets		(2,588	)		(2,428	)		–			–			(5,180	)		(5,209	)		–			–
Amortization of net actuarial (gain) loss		491			336			(67	)		(86	)		983			720			(134	)		(175	)
Net periodic benefit cost	$	180		$	31		$	51		$	29		$	361		$	66		$	102		$	60

As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, we expect to contribute $634 thousand in 2006 to meet estimated benefit payments to participants in our postretirement health and welfare plan. As of June 30, 2006, we have contributed $317 thousand of this amount and expect to contribute the remaining portion during the rest of 2006. We do not expect to make any contributions to the pension plan in 2006 and have not done so as of June 30, 2006. As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, participation and benefit accruals for the pension plan were frozen effective January 1, 2003.

9.    OPERATING SEGMENT INFORMATION

We manage our operations and prepare management reports and other information with a primary focus on geographical area. As of June 30, 2006, we operate eight community/regional banks in distinct geographical areas. Performance assessment and resource allocation are based upon this geographical structure. Zions Bank operates 112 branches in Utah and 24 in Idaho. CB&T operates 91 branches in California. Amegy operates 77 branches in Texas. NBA operates 53 branches in Arizona. NSB operates 72 branches in Nevada. Vectra operates 38 branches in Colorado and one branch in New Mexico. TCBW operates one branch in the state of Washington. TCBO operates one branch in Oregon. The operating segment identified as “Other” includes the Parent, certain nonbank financial service and financial technology subsidiaries, other smaller nonbank operating units, TCBO, and eliminations of transactions between segments. Results for Amegy only include the three- and six month periods ended June 30, 2006.

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ZIONS BANCORPORATION AND SUBSIDIARIES

The accounting policies of the individual operating segments are the same as those of the Company. Transactions between operating segments are primarily conducted at fair value, resulting in profits that are eliminated for reporting consolidated results of operations. Operating segments pay for centrally provided services based upon estimated or actual usage of those services.

The following table presents selected operating segment information for the three months ended June 30, 2006 and 2005:

	Zions Bank				CB&T				Amegy				NBA				NSB
(In millions)	2006		2005		2006		2005		2006		2005		2006		2005		2006		2005
CONDENSED INCOME STATEMENT
Net interest income excluding hedge income	$	114.2	$	102.2	$	119.3	$	110.3	$	76.2			$	54.0	$	44.9	$	51.0	$	40.3
Hedge income recorded directly at subsidiary		(0.6)		0.8		(1.0)		0.9		(0.2)				(0.7)		0.5		(0.9)		0.4
Allocated hedge income		0.1		(0.1)		–		–		–				–		–		–		–
Net interest income		113.7		102.9		118.3		111.2		76.0				53.3		45.4		50.1		40.7
Provision for loan losses		8.0		6.9		4.0		1.0		0.3				1.8		2.1		2.4		0.5
Net interest income after provision for loan losses		105.7		96.0		114.3		110.2		75.7				51.5		43.3		47.7		40.2
Noninterest income		62.5		68.1		20.0		18.8		28.3				6.1		4.9		7.5		7.8
Noninterest expense		103.5		95.3		62.0		60.8		72.7				26.5		24.8		28.0		26.4
Income before income taxes and minority interest		64.7		68.8		72.3		68.2		31.3				31.1		23.4		27.2		21.6
Income tax expense (benefit)		21.5		23.4		29.3		27.6		9.8				12.3		9.2		9.4		7.4
Minority interest		(0.1)		–		–		–		–				–		–		–		–
Net income (loss)	$	43.3	$	45.4	$	43.0	$	40.6	$	21.5			$	18.8	$	14.2	$	17.8	$	14.2
AVERAGE BALANCE SHEET DATA
Assets	$	13,734	$	12,418	$	11,109	$	10,108	$	9,123			$	4,380	$	3,804	$	3,935	$	3,479
Net loans and leases		9,182		8,294		8,028		7,127		5,575				3,858		3,293		3,169		2,678
Deposits		9,682		8,309		8,387		8,418		6,414				3,524		3,223		3,280		3,028
Shareholder’s equity		857		772		1,114		1,038		1,793				309		278		248		224
	Vectra				TCBW				Other				Consolidated Company
(In millions)	2006		2005		2006		2005		2006		2005		2006		2005
CONDENSED INCOME STATEMENT
Net interest income excluding hedge income	$	25.2	$	21.8	$	8.5	$	7.4	$	(6.1)	$	0.4	$	442.3	$	327.3
Hedge income recorded directly at subsidiary		(1.4)		0.5		(0.5)		–		(0.7)		0.5		(6.0)		3.6
Allocated hedge income		(0.1)		0.1		–		–		–		–		–		–
Net interest income		23.7		22.4		8.0		7.4		(6.8)		0.9		436.3		330.9
Provision for loan losses		0.6		0.6		(0.2)		0.3		0.1		–		17.0		11.4
Net interest income after provision for loan losses		23.1		21.8		8.2		7.1		(6.9)		0.9		419.3		319.5
Noninterest income		5.9		6.8		0.5		0.4		7.0		(0.9)		137.8		105.9
Noninterest expense		21.6		21.5		3.4		3.1		15.6		10.2		333.3		242.1
Income before income taxes and minority interest		7.4		7.1		5.3		4.4		(15.5)		(10.2)		223.8		183.3
Income tax expense (benefit)		2.7		2.5		1.8		1.3		(8.0)		(5.1)		78.8		66.3
Minority interest		–		–		–		–		(0.2)		(1.8)		(0.3)		(1.8)
Net income (loss)	$	4.7	$	4.6	$	3.5	$	3.1	$	(7.3)	$	(3.3)	$	145.3	$	118.8
AVERAGE BALANCE SHEET DATA
Assets	$	2,329	$	2,296	$	794	$	777	$	(1,621)	$	(371)	$	43,783	$	32,511
Net loans and leases		1,600		1,480		412		369		76		90		31,900		23,331
Deposits		1,627		1,565		459		424		(1,198)		(1,179)		32,175		23,788
Shareholder’s equity		296		318		52		50		(254)		197		4,415		2,877

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The following table presents selected operating segment information for the six months ended June 30, 2006 and 2005:

	Zions Bank				CB&T				Amegy				NBA				NSB
(In millions)	2006		2005		2006		2005		2006		2005		2006		2005		2006		2005
CONDENSED INCOME STATEMENT
Net interest income excluding hedge income	$	222.0	$	196.5	$	239.7	$	217.6	$	150.4			$	105.7	$	86.5	$	98.1	$	79.2
Hedge income recorded directly at subsidiary		(1.0)		2.9		(3.7)		2.9		–				(0.8)		0.9		(1.2)		0.9
Allocated hedge income		0.1		(1.2)		–		–		–				–		0.3		–		0.1
Net interest income		221.1		198.2		236.0		220.5		150.4				104.9		87.7		96.9		80.2
Provision for loan losses		13.9		13.7		6.5		2.5		2.3				2.6		2.9		4.9		0.5
Net interest income after provision for loan losses		207.2		184.5		229.5		218.0		148.1				102.3		84.8		92.0		79.7
Noninterest income		124.3		131.4		38.3		37.6		55.9				12.0		10.5		14.8		15.7
Noninterest expense		201.3		188.0		124.0		123.3		140.2				51.5		47.7		55.2		51.1
Income before income taxes and minority interest		130.2		127.9		143.8		132.3		63.8				62.8		47.6		51.6		44.3
Income tax expense (benefit)		43.7		42.1		58.4		53.4		19.8				24.8		19.0		17.9		15.3
Minority interest		(0.1)		(0.1)		–		–		–				–		–		–		–
Net income (loss)	$	86.6	$	85.9	$	85.4	$	78.9	$	44.0			$	38.0	$	28.6	$	33.7	$	29.0
AVERAGE BALANCE SHEET DATA
Assets	$	13,330	$	12,301	$	10,994	$	10,129	$	9,170			$	4,307	$	3,726	$	3,815	$	3,429
Net loans and leases		8,931		8,134		7,899		7,109		5,488				3,791		3,212		3,034		2,622
Deposits		9,509		8,190		8,461		8,360		6,515				3,550		3,171		3,236		2,992
Shareholder’s equity		844		761		1,103		1,042		1,786				306		274		244		225
	Vectra				TCBW				Other				Consolidated Company
(In millions)	2006		2005		2006		2005		2006		2005		2006		2005
CONDENSED INCOME STATEMENT
Net interest income excluding hedge income	$	49.2	$	42.1	$	17.5	$	14.0	$	(12.2)	$	(0.8)	$	870.4	$	635.1
Hedge income recorded directly at subsidiary		(2.3)		1.6		(0.8)		0.2		(1.5)		1.4		(11.3)		10.8
Allocated hedge income		(0.1)		0.6		–		0.2		–		–		–		–
Net interest income		46.8		44.3		16.7		14.4		(13.7)		0.6		859.1		645.9
Provision for loan losses		0.8		0.6		0.4		0.6		0.1		–		31.5		20.8
Net interest income after provision for loan losses		46.0		43.7		16.3		13.8		(13.8)		0.6		827.6		625.1
Noninterest income		12.7		13.5		0.9		0.8		7.3		(0.7)		266.2		208.8
Noninterest expense		43.1		43.3		6.8		6.2		35.6		21.7		657.7		481.3
Income before income taxes and minority interest		15.6		13.9		10.4		8.4		(42.1)		(21.8)		436.1		352.6
Income tax expense (benefit)		5.7		4.9		3.4		2.6		(19.6)		(11.2)		154.1		126.1
Minority interest		–		–		–		–		(0.8)		(2.4)		(0.9)		(2.5)
Net income (loss)	$	9.9	$	9.0	$	7.0	$	5.8	$	(21.7)	$	(8.2)	$	282.9	$	229.0
AVERAGE BALANCE SHEET DATA
Assets	$	2,305	$	2,291	$	794	$	751	$	(1,497)	$	(444)	$	43,218	$	32,183
Net loans and leases		1,568		1,464		405		372		72		92		31,188		23,005
Deposits		1,607		1,565		454		423		(1,232)		(1,194)		32,100		23,507
Shareholder’s equity		298		320		51		50		(264)		179		4,368		2,851

18

ZIONS BANCORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

FINANCIAL HIGHLIGHTS

(Unaudited)

(In thousands, except per share and ratio data)	Three Months Ended June 30,					Six Months Ended June 30,
	2006		2005		% Change	2006		2005		% Change
EARNINGS
Taxable-equivalent net interest income	$	442,261	$	336,088	31.59 %	$	871,085	$	656,208	32.75 %
Taxable-equivalent revenue		580,020		442,020	31.22 %		1,137,332		865,038	31.48 %
Net interest income		436,327		330,928	31.85 %		859,174		645,879	33.02 %
Noninterest income		137,759		105,932	30.04 %		266,247		208,830	27.49 %
Provision for loan losses		17,022		11,417	49.09 %		31,534		20,800	51.61 %
Noninterest expense		333,276		242,046	37.69 %		657,731		481,283	36.66 %
Income before income taxes and minority interest		223,788		183,397	22.02 %		436,156		352,626	23.69 %
Income taxes		78,821		66,330	18.83 %		154,079		126,079	22.21 %
Minority interest		(343)		(1,743)	(80.32)%		(866)		(2,497)	(65.32)%
Net income		145,310		118,810	22.30 %		282,943		229,044	23.53 %
PER COMMON SHARE
Net income (diluted)		1.35		1.30	3.85 %		2.62		2.50	4.80 %
Dividends		0.36		0.36	–		0.72		0.72	–
Book value							41.72		32.62	27.90 %
SELECTED RATIOS
Return on average assets		1.33%		1.47%			1.32%		1.44%
Return on average common equity		13.20%		16.56%			13.06%		16.20%
Efficiency ratio		57.46%		54.76%			57.83%		55.64%
Net interest margin		4.64%		4.60%			4.66%		4.57%

19

ZIONS BANCORPORATION AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Continued)

(Unaudited)

(In thousands, except share and ratio data)	Three Months Ended June 30,					Six Months Ended June 30,
	2006		2005		% Change	2006		2005		% Change
AVERAGE BALANCES
Total assets	$	43,782,622	$	32,510,692	34.67%	$	43,217,571	$	32,182,658	34.29 %
Securities		5,876,065		5,091,552	15.41%		5,974,333		5,141,496	16.20 %
Net loans and leases		31,900,053		23,330,670	36.73%		31,188,372		23,004,945	35.57 %
Goodwill		1,884,192		638,932	194.90%		1,885,862		640,758	194.32 %
Core deposit and other intangibles		185,281		53,011	249.51%		190,885		54,822	248.19 %
Total deposits		32,175,202		23,787,985	35.26%		32,099,667		23,507,308	36.55 %
Core deposits (1)		29,303,520		22,248,291	31.71%		29,378,174		22,044,385	33.27 %
Minority interest		28,486		24,726	15.21%		28,355		24,787	14.39 %
Shareholders’ equity		4,414,775		2,877,374	53.43%		4,368,301		2,851,269	53.21 %
Weighted average common and common-equivalent shares outstanding		107,883,374		91,610,296	17.76%		107,866,829		91,596,314	17.76 %
AT PERIOD END
Total assets						$	45,142,086	$	32,875,294	37.31 %
Securities							5,797,079		4,904,799	18.19 %
Net loans and leases							32,682,335		23,821,563	37.20 %
Sold loans being serviced (2)							3,003,101		2,910,182	3.19 %
Allowance for loan losses							348,475		281,428	23.82 %
Allowance for unfunded lending commitments							17,592		15,395	14.27 %
Goodwill							1,881,256		638,933	194.44 %
Core deposit and other intangibles							177,692		51,397	245.72 %
Total deposits							33,254,210		24,398,535	36.30 %
Core deposits (1)							29,851,896		22,840,557	30.70 %
Minority interest							28,619		24,665	16.03 %
Shareholders’ equity							4,447,330		2,937,908	51.38 %
Common shares outstanding							106,611,731		90,062,646	18.38 %
Average equity to average assets		10.08%		8.85%			10.11%		8.86%
Common dividend payout		26.37%		27.37%			27.02%		28.42%
Tangible common equity ratio							5.54%		6.98%
Nonperforming assets							73,475		73,680	(0.28)%
Accruing loans past due 90 days or more							29,434		13,183	123.27 %
Nonperforming assets to net loans and leases and other real estate owned at period end							0.22%		0.31%

(1) Amount consists of total deposits excluding time deposits $100,000 and over.

(2) Amount represents the outstanding balance of loans sold and being serviced by the Company, excluding conforming first mortgage residential real estate loans.

20

ZIONS BANCORPORATION AND SUBSIDIARIES

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 Company’s beliefs, plans, objectives, goals, guidelines, expectations, anticipations, and future financial condition, results of operations and performance;

• 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 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 economic effects of terrorist attacks against the United States and related events;

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

• fluctuations in the equity and fixed-income markets;

• 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, including Amegy;

• 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. Treasury and the Federal Reserve Board;

• 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 Zions’ market areas;

• inflation and deflation;

• technological changes and Zions’ implementation of new technologies;

• Zions’ 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; and

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

Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the 2005 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).

21

ZIONS BANCORPORATION AND SUBSIDIARIES

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, 2005, except as noted below.

Note 6 of the Notes to Consolidated Financial Statements discusses the Company’s adoption on January 1, 2006 of SFAS No. 123R, Share-Based Payment (“SFAS 123R”), which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of income based on their fair values. The Company adopted SFAS 123R using the “modified prospective” transition method and did not restate results of operations for prior periods. Rather, the Company presented the pro forma effect on operations as if it had adopted the provisions of SFAS 123.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options granted under SFAS 123R and for the pro forma presentations in prior periods. Use of the assumptions described in Note 6 is subjective and requires judgment. The adoption of SFAS 123R decreased income before income taxes and minority interest and net income by approximately $4.1 million and $2.8 million, respectively, for the three months ended June 30, 2006, or $0.03 per diluted share, and $8.1 million and $5.6 million, respectively for the six months ended June 30, 2006, or $0.05 per diluted share. The Company currently estimates that the adoption of SFAS 123R will reduce 2006 pretax income by approximately $17 million. In 2005, the Company began granting shares of restricted stock in connection with the adoption of a new stock option and incentive plan. During the second quarter of 2006, the Company granted 977,024 stock options and 219,000 shares of restricted stock.

RESULTS OF OPERATIONS

As previously disclosed, the Company completed its acquisition of Amegy Bancorporation, Inc. in December 2005. All comparisons to 2005 periods reflect the effects of the Amegy acquisition.

Zions Bancorporation (“the Parent”) and subsidiaries (collectively “Zions,” “the Company,” “we,” “our”) reported net income of $145.3 million, or $1.35 per diluted share for the second quarter of 2006 compared with $118.8 million, or $1.30 per diluted share for the second quarter of 2005. The annualized return on average assets was 1.33% in the second quarter of 2006 compared to 1.47% in the second quarter of 2005. For the same comparative periods, the annualized return on average common equity was 13.20% compared to 16.56%. In addition, the efficiency ratio, which is defined as the percentage of noninterest expenses to taxable-equivalent revenue, was 57.5% compared to 54.8% for the second quarter of 2005.

Net income for the first six months of 2006 was $282.9 million or $2.62 per diluted share, compared to $229.0 million or $2.50 per diluted share for the first six months of 2005. For the first six months of 2006, the annualized return on average assets was 1.32% compared to 1.44% for the same period of 2005. For the same comparative periods, the annualized return on average common equity was 13.06% compared to 16.20%. The efficiency ratio for the first six months was 57.8% compared to 55.6% for 2005.

22

ZIONS BANCORPORATION AND SUBSIDIARIES

Net Interest Income, Margin and Interest Rate Spreads

Taxable-equivalent net interest income for the second quarter of 2006 increased 31.6% to $442.3 million compared with $336.1 million for the comparable period of 2005. The increase reflects the acquisition of Amegy, growth in both loans and deposits coupled with the effect of an increase in the net interest margin. For the first six months of 2006, net interest income on a fully taxable-equivalent basis was $871.1 million, an increase of 32.7% compared to $656.2 million in 2005. The incremental tax rate used for calculating all taxable-equivalent adjustments is 35% for all periods presented.

Although taxable-equivalent net interest income increased sequentially in the second quarter of 2006, the Company’s net interest margin was 4.64% for the second quarter of 2006, compared to 4.69% for the first quarter of 2006 and 4.60% for the second quarter of 2005. The decreased net interest margin for the second quarter of 2006 resulted mainly from robust loan growth being funded primarily by time deposits and Federal Home Loan Bank advances and other short-term borrowings.

One of the challenges we continue to face in 2006 is an increase in pricing pressures on both loans and deposits as the economy expands and competition for good business increases. Reflecting this pricing pressure, the spread on average interest-bearing funds for the second quarter for 2006 was 3.81%, down from 3.95% and 4.03% from the first quarter of 2006 and second quarter of 2005, respectively. The yield on average earning assets increased 21 basis points during the second quarter as compared to the first quarter of 2006 and 95 basis points during the second quarter of 2006 compared to the same period in 2005. The average rate paid this quarter on interest-bearing funds increased 35 basis points from the first quarter and 117 basis points from the second quarter of 2005.

The Federal Reserve raised its target for the federal funds rate twice during the quarter by a combined 50 basis points. These increases were followed by corresponding increases in the prime rate charged by most major banks, including Zions’ subsidiary banks. The Federal Reserve has indicated that it may implement additional rate changes, as appropriate. The Company expects to continue its efforts to maintain a slightly “asset sensitive” position with regard to interest rate risk. However, our estimates of the Company’s actual position are highly dependent upon changes in both short-term and long-term interest rates, modeling assumptions, and the actions of competitors and customers in response to those changes.

23

ZIONS BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES

(Unaudited)

	Three Months Ended June 30, 2006						Three Months Ended June 30, 2005
(In thousands)	Average balance			Amount of interest (1)		Average rate	Average balance			Amount of interest (1)		Average rate
ASSETS
Money market investments	$	475,278		$	5,910	4.99%	$	862,354		$	6,041	2.81%
Securities:
Held to maturity		644,555			10,952	6.82%		641,161			11,076	6.93%
Available for sale		5,067,450			72,255	5.72%		3,941,109			50,385	5.13%
Trading account		164,060			1,995	4.88%		509,282			5,044	3.97%
Total securities		5,876,065			85,202	5.82%		5,091,552			66,505	5.24%
Loans:
Loans held for sale		266,126			4,055	6.11%		198,547			2,618	5.29%
Net loans and leases (2)		31,633,927			597,368	7.57%		23,132,123			385,732	6.69%
Total loans and leases		31,900,053			601,423	7.56%		23,330,670			388,350	6.68%
Total interest-earning assets		38,251,396			692,535	7.26%		29,284,576			460,896	6.31%
Cash and due from banks		1,441,444						1,076,691
Allowance for loan losses		(345,408	)					(278,262	)
Goodwill		1,884,192						638,932
Core deposit and other intangibles		185,281						53,011
Other assets		2,365,717						1,735,744
Total assets	$	43,782,622					$	32,510,692
LIABILITIES
Interest-bearing deposits:
Savings and NOW	$	5,194,174			17,158	1.32%	$	4,325,868			8,453	0.78%
Money market		10,671,342			79,973	3.01%		8,755,133			40,783	1.87%
Time under $100,000		1,985,853			17,472	3.53%		1,452,392			9,420	2.60%
Time $100,000 and over		2,871,682			29,098	4.06%		1,539,694			11,528	3.00%
Foreign		1,868,060			20,854	4.48%		554,042			3,609	2.61%
Total interest-bearing deposits		22,591,111			164,555	2.92%		16,627,129			73,793	1.78%
Borrowed funds:
Securities sold, not yet purchased		62,404			706	4.54%		509,818			4,733	3.72%
Federal funds purchased and security repurchase agreements		2,804,139			29,807	4.26%		2,347,220			15,263	2.61%
Commercial paper		217,033			2,760	5.10%		160,609			1,246	3.11%
FHLB advances and other borrowings:
One year or less		800,800			10,202	5.11%		378,659			2,910	3.08%
Over one year		133,885			2,059	6.17%		227,318			2,863	5.05%
Long-term debt		2,476,188			40,185	6.51%		1,691,507			24,000	5.69%
Total borrowed funds		6,494,449			85,719	5.29%		5,315,131			51,015	3.85%
Total interest-bearing liabilities		29,085,560			250,274	3.45%		21,942,260			124,808	2.28%
Noninterest-bearing deposits		9,584,091						7,160,856
Other liabilities		669,710						505,476
Total liabilities		39,339,361						29,608,592
Minority interest		28,486						24,726
Total shareholders’ equity		4,414,775						2,877,374
Total liabilities and shareholders’ equity	$	43,782,622					$	32,510,692
Spread on average interest-bearing funds						3.81%						4.03%
Taxable-equivalent net interest income and net yield on interest-earning assets				$	442,261	4.64%				$	336,088	4.60%

(1) Taxable-equivalent rates used where applicable.

(2) Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

24

ZIONS BANCORPORATION AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES (Continued)

(Unaudited)

	Six Months Ended June 30, 2006					Six Months Ended June 30, 2005
(In thousands)	Average balance		Amount of interest (1)		Average rate	Average balance		Amount of interest (1)		Average rate
ASSETS
Money market investments	$	493,398	$	11,757	4.81%	$	839,375	$	10,679	2.57%
Securities:
Held to maturity		638,366		21,676	6.85%		639,249		22,086	6.97%
Available for sale		5,169,446		144,957	5.65%		3,945,609		98,622	5.04%
Trading account		166,521		4,069	4.93%		556,638		11,079	4.01%
Total securities		5,974,333		170,702	5.76%		5,141,496		131,787	5.17%
Loans:
Loans held for sale		269,359		8,101	6.06%		192,084		4,221	4.43%
Net loans and leases (2)		30,919,013		1,146,022	7.47%		22,812,861		742,219	6.56%
Total loans and leases		31,188,372		1,154,123	7.46%		23,004,945		746,440	6.54%
Total interest-earning assets		37,656,103		1,336,582	7.16%		28,985,816		888,906	6.18%
Cash and due from banks		1,489,642					1,047,569
Allowance for loan losses		(343,094)					(275,803)
Goodwill		1,885,862					640,758
Core deposit and other intangibles		190,885					54,822
Other assets		2,338,173					1,729,496
Total assets	$	43,217,571				$	32,182,658
LIABILITIES
Interest-bearing deposits:
Savings and NOW	$	4,924,167		30,343	1.24%	$	4,312,341		16,000	0.75%
Money market		11,015,663		153,411	2.81%		8,832,113		73,972	1.69%
Time under $100,000		1,971,262		33,334	3.41%		1,434,241		17,457	2.45%
Time $100,000 and over		2,721,493		52,420	3.88%		1,462,923		20,826	2.87%
Foreign		1,923,369		41,155	4.31%		501,812		6,161	2.48%
Total interest-bearing deposits		22,555,954		310,663	2.78%		16,543,430		134,416	1.64%
Borrowed funds:
Securities sold, not yet purchased		59,881		1,337	4.50%		508,873		9,243	3.66%
Federal funds purchased and security repurchase agreements		2,739,205		54,973	4.05%		2,379,959		28,415	2.41%
Commercial paper		199,282		4,842	4.90%		152,889		2,177	2.87%
FHLB advances and other borrowings:
One year or less		407,519		10,301	5.10%		352,330		4,946	2.83%
Over one year		163,893		4,584	5.64%		227,590		5,702	5.05%
Long-term debt		2,489,693		78,797	6.38%		1,691,118		47,799	5.70%
Total borrowed funds		6,059,473		154,834	5.15%		5,312,759		98,282	3.73%
Total interest-bearing liabilities		28,615,427		465,497	3.28%		21,856,189		232,698	2.15%
Noninterest-bearing deposits		9,543,713					6,963,878
Other liabilities		661,775					486,535
Total liabilities		38,820,915					29,306,602
Minority interest		28,355					24,787
Total shareholders’ equity		4,368,301					2,851,269
Total liabilities and shareholders’ equity	$	43,217,571				$	32,182,658
Spread on average interest-bearing funds					3.88%					4.03%
Taxable-equivalent net interest income and net yield on interest-earning assets			$	871,085	4.66%			$	656,208	4.57%

(1) Taxable-equivalent rates used where applicable.

(2) Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

25

ZIONS BANCORPORATION AND SUBSIDIARIES

Provisions for Credit Losses

The provision for loan losses is the amount of expense that, based on our judgment, is required to maintain the allowance for loan losses at an adequate level based upon the inherent risks in the portfolio. The provision for unfunded lending commitments is used to maintain the allowance for unfunded lending commitments at an adequate level. See “Credit Risk Management” for more information on how we determine the appropriate level for the allowances for loan and lease losses and unfunded lending commitments.

The provision for loan losses for the second quarter was $17.0 million compared to $11.4 million for the same period in 2005. On an annualized basis, the provision was 0.21% and 0.20% of average loans for the second quarters of 2006 and 2005, respectively. The provision for unfunded lending commitments was $(0.2) million for the second quarter of 2006 compared to $1.0 million for the second quarter of 2005. When combined, the provisions for credit losses for the second quarter of 2006 were $16.8 million compared to $12.5 million for the second quarter of 2005.

The provision for loan losses for the first six months of 2006 was $31.5 million, 51.6% greater than the $20.8 million provision for the first six months of 2005. The increased loan loss provision for the second quarter and the first six months is primarily impacted by strong net loan growth of $2.6 billion during the first six months of 2006 as compared to $1.2 billion net loan growth during the first six months of 2005. The provision for unfunded lending commitments was $(0.5) million for the first half of 2006 compared to $2.7 million for the same period in 2005. From period to period, the amounts of unfunded lending commitments may be subject to sizeable fluctuation due to changes in the timing and volume of loan originations and fundings. The related provision will generally reflect these fluctuations.

Noninterest Income

Compared with the second quarter of 2005, noninterest income for the second quarter of 2006 increased 30.0%, or $31.8 million. The increases in total and individual categories of noninterest income for the second quarter of 2006 compared to the second quarter of 2005 were mainly due to the Amegy acquisition. Significant changes and trends in noninterest income categories not resulting from the Amegy acquisition are discussed as follows.

Excluding Amegy, loan sales and servicing income decreased $1.6 million for the second quarter of 2006 compared to the second quarter of 2005. The decrease includes a $1.1 million impairment loss recognized on capitalized residual cash flows for certain small business securitizations.

Market making, trading and nonhedge derivative income for the second quarter of 2006, excluding Amegy, decreased $3.4 million or 52.0% compared with the same period in 2005. Excluding Amegy, trading income declined $1.9 million compared to the second quarter of 2005. The decrease mainly results from a decision made by the Company in the fourth quarter of 2005 to close the London trading office and reduce the amount of trading assets in response to contracted margin pressures. Nonhedge derivative income was $0.3 million for the second quarter of 2006 compared to $1.8 million for the second quarter of 2005.

Net equity securities losses were $1.8 million for the second quarter of 2006 compared with net losses of $2.8 million for the same period in 2005. Net losses for the second quarter of 2006 include a $3.4 million loss on the sale of a mortgage mutual fund investment, a $0.7 million gain on venture capital equity investments, and a $0.9 million gain from the sale of other equity securities. The losses for the second quarter of 2005 were all from venture capital equity investments. Adjusted for expenses, minority interest and income taxes, venture capital investments increased net income by $0.3 million in the second quarter of 2006 and decreased net income by $1.0 million in the second quarter of 2005. Fixed income securities gains were $5.2 million in the second quarter of 2006 compared to a loss of $1.2 million for the comparative period of 2005.

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Noninterest income for the first six months of 2006 of $266.2 million increased 27.5% from $208.8 million for the first six months of 2005. Explanations previously provided for the quarterly changes also apply to the year-to-date changes. Additional explanations of variances follow.

Loan sales and servicing income without Amegy decreased 12.8% or $4.5 million for the first six months of 2006. The decline results from the impact of rising rates and on excess servicing income, higher prepayments, and the aforementioned impairment loss on certain retained interests relating to small business securitized loans.

Trust and investment management income fees for the first six months of 2006 increased 24.0% compared to the same period in 2005 as a result of increases in fees from the Amegy acquisition and increased fees from the trust and investment management business. Excluding the Amegy acquisition, trust and investment management income fees for the first six months of 2006 increased 6.2%.

Noninterest Expense

Noninterest expense for the second quarter of 2006 of $333.3 million increased $91.2 million or 37.7% over the $242.0 million for the second quarter of 2005. The increases in total and individual categories of noninterest expense for the second quarter of 2006 compared to the second quarter of 2005 were mainly due to the Amegy acquisition. The Company’s efficiency ratio was 57.5% for the second quarter of 2006 compared to 54.8% for the same period of 2005. The deterioration in the efficiency ratio reflects higher noninterest expenses, including merger related expenses and amortization of intangibles related to the acquisition of Amegy, and a higher cost structure at Amegy. Significant changes and trends in noninterest expense categories not resulting from the Amegy acquisition are discussed as follows.

Salaries and employee benefits increased $47.4 million or 34.3%, compared to the second quarter of 2005. However, salaries and employee benefits were essentially unchanged when compared to the first quarter of 2006. Excluding Amegy-related salaries and employee benefits of $34.4 million and share-based compensation expense of $4.1 million resulting from the adoption of SFAS 123R, salaries and benefits increased $8.9 million or 6.4%. The increase from the prior year, excluding Amegy, was due to salary increases and increased staffing levels in selected areas.

Noninterest expense for the first six months of 2006 of $657.7 million increased 36.7% from $481.3 million for the first six months of 2005. The Company’s efficiency ratio was 57.8% for the first six months of 2006 compared to 55.6% for the same period of 2005. Explanations previously provided for the quarterly changes also apply to the year-to-date changes. Additional explanations of variances follow.

Excluding the impact of the Amegy acquisition, salaries and employee benefits for the first half of 2006 increased $25.3 million or 9.2% when compared to the same period in 2005, primarily as a result of share-based compensation costs attributable to the adoption of SFAS 123R, salary increases, and increased staffing levels in selected areas.

See Note 3 of Notes to Consolidated Financial Statements for an explanation of the $15.7 million of Amegy merger related expenses incurred during the first half of 2006.

At June 30, 2006, the Company had 10,146 full-time equivalent employees, 470 domestic branches, and 577 ATMs, compared to 8,043 full-time equivalent employees, 388 domestic branches, and 473 ATMs at June 30, 2005.

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Income Taxes

The Company’s income tax expense increased to $78.8 million for the second quarter of 2006 compared to $66.3 million for the same period in 2005. The Company’s effective income tax rates, including the effects of minority interest, were 35.2% and 35.8% for the second quarters of 2006 and 2005, respectively. The effective income tax rates for the first six months of 2006 and 2005 were 35.3% and 35.5% respectively. As discussed in previous filings, the Company has received federal income tax credits under the Community Development Financial Institutions Fund set up by the U.S. Government that will be recognized over the next seven years. The effect of these tax credits was to reduce income tax expense by $2.1 million for the first six months of 2006 and $1.5 million for the first six months of 2005. The effective tax rates reflect a lower proportion of tax exempt income to total income, offset by the increased tax credits.

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BALANCE SHEET ANALYSIS

As previously discussed, the Company completed its acquisition of Amegy Bancorporation, Inc. in December 2005. The Company’s consolidated balance sheets at June 30, 2006 and December 31, 2005 include Amegy.

Interest-Earning Assets

Interest-earning assets are those assets that have interest rates or yields associated with them and consist of money market investments, securities and loans.

Average interest-earning assets increased 29.9% to $37.7 billion for the six months ended June 30, 2006 compared to $29.0 billion for the comparable period in 2005. Interest-earning assets comprised 87.1% of total average assets for the first half of 2006, compared with 90.1% for the comparable period of 2005. The decreased percentage is mainly a result of increased goodwill and other intangible assets from the Amegy acquisition. Average interest-earning assets as a percentage of total average assets for the second quarter of 2006 was 87.4% compared to 86.9% for the first quarter.

Average money market investments, consisting of interest-bearing deposits, federal funds sold and security resell agreements, decreased 41.2% to $493.4 million for the first six months of 2006 compared to $839.4 million for the first six months of 2005. Reductions in money market instruments have been used to fund new loan growth. Average net loans and leases for the first half of 2006 increased by 35.6% when compared to the same period in 2005. Average total deposits for the first six months of 2006 increased 36.6% compared to the same period in 2005.

Investment Securities Portfolio

The following table presents the Company’s held-to-maturity and available-for-sale investment securities:

	June 30, 2006				December 31, 2005				June 30, 2005
(In millions)	Amortized cost		Estimated market value		Amortized cost		Estimated market value		Amortized cost		Estimated market value
HELD TO MATURITY
Municipal securities	$	640	$	621	$	650	$	642	$	650	$	652
AVAILABLE FOR SALE
U.S. Treasury securities		78		78		42		43		36		36
U.S. Government agencies and corporations:
Small Business Administration loan-backed securities		884		883		786		782		743		742
Other agency securities		651		636		688		683		247		246
Municipal securities		227		225		266		267		91		93
Mortgage/asset-backed and other debt securities		3,124		3,079		3,311		3,308		2,572		2,597
		4,964		4,901		5,093		5,083		3,689		3,714
Other securities:
Mutual funds		179		179		217		216		253		253
Stock		6		7		7		7		6		6
		185		186		224		223		259		259
		5,149		5,087		5,317		5,306		3,948		3,973
Total	$	5,789	$	5,708	$	5,967	$	5,948	$	4,598	$	4,625

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The amortized cost of investment securities at June 30, 2006 decreased 3.0% from the amount at December 31, 2005 but was up 25.9% from the balance at June 30, 2005 as a result of the Amegy acquisition. During the first half of 2006, we reduced the securities portfolio to fund a portion of the Company’s new loan growth.

We review investment securities on an ongoing basis for other than temporary impairment taking into consideration current market conditions, offering prices, trends and volatility of earnings, current analysts’ evaluations, our ability and intent to hold investments until a recovery of fair value, which may be maturity, and other factors. Our review did not result in an other than temporary impairment adjustment during the quarter ended June 30, 2006.

The investment securities portfolio includes $0.9 billion of nonrated, fixed income securities, compared to $1.0 billion at both December 31, 2005 and June 30, 2005. These securities include nonrated municipal securities as well as nonrated, asset-backed subordinated tranches.

Loan Portfolio

Net loans and leases at June 30, 2006 were $32.7 billion, an annualized increase of 17.0% from December 31, 2005 and an increase of 37.2% over the balance at June 30, 2005. The Company experienced strong loan growth in the first half of 2006, especially during the second quarter.

The following table sets forth the loan portfolio by type of loan:

(In millions)	June 30, 2006		December 31, 2005		June 30, 2005
Loans held for sale	$	249	$	256	$	207
Commercial lending:
Commercial and industrial		7,539		7,192		4,760
Leasing		407		373		361
Owner occupied		5,574		4,825		4,341
Total commercial lending		13,520		12,390		9,462
Commercial real estate:
Construction and land development		6,958		6,065		4,091
Term		4,981		4,640		4,118
Total commercial real estate		11,939		10,705		8,209
Consumer:
Home equity credit line and other consumer real estate		1,963		1,831		1,709
1-4 family residential		4,244		4,130		3,564
Bankcard and other revolving plans		279		207		208
Other		453		537		468
Total consumer		6,939		6,705		5,949
Foreign loans		3		5		5
Other receivables		175		191		93
Total loans	$	32,825	$	30,252	$	23,925

The strong loan growth noted above for commercial and commercial real estate lending was widely diversified across our geographical footprint and consistent with the economic activity in that area. Management believes it is likely this loan growth will continue in the immediate future.

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ZIONS BANCORPORATION AND SUBSIDIARIES

Sold Loans Being Serviced

Zions performs loan servicing on both loans that it holds in its portfolios and also on loans that are owned by third party investor-owned trusts. In addition, Zions has a practice of securitizing and selling a portion of the loans that it originates, and in many instances provides the servicing on these loans as a condition of the sale.

	Sold loans being serviced				Residual interests on balance sheet at June 30, 2006
(In millions)	Sales for six months ended June 30, 2006		Outstanding balance at June 30, 2006		Subordinated retained interests		Capitalized residual cash flows		Total
Home equity credit lines	$	98	$	357	$	10	$	6	$	16
Small business loans		–		2,082		229		85		314
SBA 7(a) loans		22		159		–		3		3
Farmer Mac		22		405		–		5		5
Total	$	142	$	3,003	$	239	$	99	$	338

Securitized loans being serviced for others totaled $3.0 billion at the end of the second quarter of 2006, $3.4 billion at December 31, 2005 and $2.9 billion at June 30, 2005.

As of June 30, 2006, the Company had recorded assets, comprised of subordinated retained interests and capitalized residual cash flows, in the amount of $338 million in connection with the $3.0 billion of sold loans being serviced. As is a common practice with securitized transactions, the Company had retained subordinated interests in the securitized assets that totaled $239 million at June 30, 2006, and represented junior positions to the other investors in the trust securities. The capitalized residual cash flows, which are sometimes referred to as “excess servicing,” of $99 million primarily represent the present value of the excess cash flows that have been projected over the lives of the sold loans.

As of June 30, 2006, conforming long-term first mortgage real estate loans being serviced for others were $1,235 million, compared with $1,274 million at December 31, 2005 and $462 million at June 30, 2005. The increase from June 30, 2005 reflects the acquisition of Amegy.

Other Noninterest-Bearing Investments

As of June 30, 2006, the Company had $993 million of other noninterest-bearing investments compared with $939 million at December 31, 2005 and $699 million at June 30, 2005.

(In millions)	June 30,     2006		December 31, 2005		June 30,     2005
Bank-owned life insurance	$	614	$	605	$	412
Federal Home Loan Bank and Federal Reserve stock		194		153		128
SBIC investments (1)		85		80		73
Non-SBIC investment funds		29		27		16
Other public companies		36		39		40
Other nonpublic companies		15		15		14
Trust preferred securities		20		20		16
	$	993	$	939	$	699

(1) Amounts include minority investors’ interests in Zions’ managed SBIC investments of approximately $28 million, $27 million, and $24 million as of the respective dates.

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ZIONS BANCORPORATION AND SUBSIDIARIES

The increases in other noninterest-bearing investments are mainly a result of the Amegy acquisition.

Deposits

Total deposits at the end of the second quarter of 2006 increased to $33.3 billion, an annualized increase of 3.7% from the balances reported at December 31, 2005, and increased 36.3% over the June 30, 2005 amounts. Core deposits at June 30, 2006 decreased 1.8%, annualized, compared to the December 31, 2005 balance and increased 30.7% compared to the balance at June 30, 2005. Demand and time deposits accounted for most of the deposit growth in the second quarter of 2006, with savings and money market account balances declining during the period.

At the end of the second quarter of 2006 demand, savings and money market deposits comprised 78.1% of total deposits, compared with 79.7% and 85.1% as of December 31, 2005 and June 30, 2005, respectively. The decrease in this ratio from June 30, 2005 is a primarily a result of the mix of deposits at Amegy.

We expect to see deposit growth throughout 2006; however, we expect that the pace of such growth may be less than that of the loan portfolio. As a result, we will continue to use alternative funding sources as necessary to fund the additional loan growth.

RISK ELEMENTS

Since risk is inherent in substantially all of the Company’s operations, management of risk is an integral part of its operations and is also a key determinant of its overall performance. We apply various strategies to reduce the risks to which the Company’s operations are exposed, including credit, interest rate and market, liquidity, and operational risks.

Credit Risk Management

Effective management of credit risk is essential in maintaining a safe and sound financial institution. We have structured the organization to separate the lending function from the credit administration function, which adds strength to the control over and the independent evaluation of credit activities. Formal 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 a well-defined set of standards for evaluating its loan portfolio, and management utilizes a comprehensive loan grading system to determine the risk potential in the portfolio. Further, an independent, internal credit examination department periodically conducts examinations of the Company’s lending departments. These examinations are designed to review credit quality, adequacy of documentation, appropriate loan grading administration and compliance with lending policies, and reports thereon are submitted to the Credit Review Committee of the Board of Directors.

Both the credit policy and the credit examination functions are managed centrally. Each affiliate bank is permitted to modify corporate credit policy to be more conservative; however, corporate approval must be obtained if a bank wishes to create a more liberal exception to the policy. Historically, only a limited number of such exceptions have been approved. This entire process has been designed to place an emphasis on early detection of potential problem credits so that action plans can be developed and implemented on a timely basis to mitigate any potential losses.

Another aspect of the Company’s credit risk management strategy is to pursue the diversification of the loan portfolio. The Company maintains a diversified loan portfolio with some emphasis in real estate. As set forth in the following table, at June 30, 2006 no single loan type exceeded 23.0% of the Company’s total loan portfolio.

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	June 30, 2006			December 31, 2005			June 30, 2005
(In millions)	Amount		% of   total loans	Amount		% of   total loans	Amount		% of   total loans
Commercial lending:
Commercial and industrial	$	7,539	23.0%	$	7,192	23.8%	$	4,760	19.9%
Leasing		407	1.2%		373	1.2%		361	1.5%
Owner occupied		5,574	17.0%		4,825	15.9%		4,341	18.1%
Commercial real estate:
Construction and land development		6,958	21.2%		6,065	20.0%		4,091	17.1%
Term		4,981	15.2%		4,640	15.3%		4,118	17.2%
Consumer:
Home equity credit line and other consumer real estate		1,963	6.0%		1,831	6.1%		1,709	7.1%
1-4 family residential		4,244	12.9%		4,130	13.7%		3,564	14.9%
Bankcard and other revolving plans		279	0.8%		207	0.7%		208	0.9%
Other		453	1.4%		537	1.8%		468	2.0%
Other		427	1.3%		452	1.5%		305	1.3%
Total loans	$	32,825	100.0%	$	30,252	100.0%	$	23,925	100.0%

We believe the Company’s potential risk from concentration in owner occupied commercial loans is reduced by the emphasis we place on lending programs sponsored by the Small Business Administration. On these types of loans, the Small Business Administration bears a major portion of the credit risk. In addition, the Company attempts to avoid the risk of an undue concentration of credits in a particular industry, trade group or property type. The Company also has no significant exposure to highly-leveraged transactions and the majority of the Company’s business activity is with customers located within the geographical footprint of its banking subsidiaries. Finally, the Company has no significant exposure to any individual customer or counterparty.

A more comprehensive discussion of our credit risk management is contained in Zions’ Annual Report on Form 10-K for the year ended December 31, 2005. In addition, as discussed in the following sections, the Company’s level of credit quality continued to be very strong during the second quarter of 2006 compared to historical standards.

Nonperforming Assets

Nonperforming assets include nonaccrual loans, restructured loans and other real estate owned. Loans are generally placed on nonaccrual status when the loan is 90 days or more past due as to principal or interest, unless the loan is both well secured and in the process of collection. Consumer loans are not normally placed on a nonaccrual status, inasmuch as they are generally charged off when they become 120 days past due. Loans occasionally may be restructured to provide a reduction or deferral of interest or principal payments. This generally occurs when the financial condition of a borrower deteriorates to the point that the borrower needs to be given temporary or permanent relief from the original contractual terms of the loan. Other real estate owned is acquired primarily through or in lieu of foreclosure on loans secured by real estate.

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ZIONS BANCORPORATION AND SUBSIDIARIES

The following table sets forth the Company’s nonperforming assets:

(Amounts in millions)	June 30,     2006		December 31, 2005		June 30,     2005
Nonaccrual loans	$	57	$	69	$	62
Restructured loans		–		–		1
Other real estate owned		16		20		11
Total	$	73	$	89	$	74
% of net loans and leases* and other real estate owned		0.22%		0.30%		0.31%
Accruing loans past due 90 days or more	$	29	$	17	$	13
% of net loans and leases*		0.09%		0.06%		0.06%

* Includes loans held for sale.

Total nonperforming assets decreased 17.5% as of June 30, 2006 compared with the balance at December 31, 2005.

Included in nonaccrual loans are loans that we have determined to be impaired. Loans, other than those included in large groups of smaller-balance homogeneous loans, are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due in accordance with the contractual terms of the loan agreement, including scheduled interest payments. The amount of the impairment is measured based on either the present value of expected cash flows, the observable market price of the loan, or the fair value of the collateral securing the loan.

The Company’s total recorded investment in impaired loans was $32 million at June 30, 2006, compared with $31 million at December 31, 2005 and $36 million at June 30, 2005. Estimated losses on impaired loans are included in the allowance for loan losses. At June 30, 2006, the allowance for loan losses included $5 million for impaired loans with a recorded investment of $15 million. At December 31, 2005, the allowance included $3 million for impaired loans with a recorded investment of $14 million, and at June 30, 2005 the allowance included $5 million for impaired loans with a recorded investment of $18 million.

Allowances for Credit Losses

Allowance for Loan Losses – In analyzing the adequacy of the allowance for loan losses, we utilize a comprehensive loan grading system to determine the risk potential in the portfolio and also consider the results of independent internal credit reviews. To determine the adequacy of the allowance, the Company’s loan and lease portfolio is broken into segments based on loan type.

For commercial loans, we use historical loss experience factors by loan segment, adjusted for changes in trends and conditions, to help determine an indicated allowance for each portfolio segment. These factors are evaluated and updated using migration analysis techniques and other considerations based on the makeup of the specific segment. These other considerations include:

• volumes and trends of delinquencies;

• levels of nonaccruals, repossessions and bankruptcies;

• trends in criticized and classified loans;

• expected losses on real estate secured loans;

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ZIONS BANCORPORATION AND SUBSIDIARIES

• new credit products and policies;

• economic conditions;

• concentrations of credit risk; and

• experience and abilities of the Company’s lending personnel.

The allowance for consumer loans is determined using historically developed experience rates at which loans migrate from one delinquency level to the next higher level. Using average roll rates for the most recent twelve-month period and comparing projected losses to actual loss experience, the model estimates expected losses in dollars for the forecasted period. By refreshing the model with updated data, it is able to project losses for a new twelve-month period each month, segmenting the portfolio into nine product groupings with similar risk profiles. This methodology is an accepted industry practice, and the Company believes it has a sufficient volume of information to produce reliable projections.

The methodology used by Amegy to estimate its allowance for loan losses has not yet been conformed to the process used by the other affiliate banks. However, the process used by Amegy is not significantly different than the process used by our other affiliate banks.

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

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ZIONS BANCORPORATION AND SUBSIDIARIES

	Six Months Ended June 30, 2006		Twelve Months Ended December 31, 2005		Six Months Ended June 30, 2005
(Amounts in millions)
Loans* and leases outstanding (net of unearned income) at end of period	$	32,682	$	30,127	$	23,822
Average loans* and leases outstanding (net of unearned income)	$	31,188	$	24,009	$	23,005
Allowance for loan losses:
Balance at beginning of period	$	338	$	271	$	271
Allowance of companies acquired		–		49		–
Provision charged against earnings		32		43		21
Loans and leases charged-off:
Commercial lending		(23)		(20)		(9)
Commercial real estate		(2)		(3)		(1)
Consumer		(7)		(19)		(10)
Other receivables		–		(1)		–
Total		(32)		(43)		(20)
Recoveries:
Commercial lending		6		12		6
Commercial real estate		1		1		–
Consumer		3		5		3
Total		10		18		9
Net loan and lease charge-offs		(22)		(25)		(11)
Balance at end of period	$	348	$	338	$	281
Ratio of annualized net charge-offs to average loans and leases		0.14%		0.10%		0.09%
Ratio of allowance for loan losses to net loans and leases at end of period		1.07%		1.12%		1.18%
Ratio of allowance for loan losses to nonperforming loans		606.56%		489.74%		449.49%
Ratio of allowance for loan losses to nonaccrual loans and accruing loans past due 90 days or more		402.01%		394.08%		374.97%

* Includes loans held for sale.

Net loan and lease charge-offs, along with their annualized ratios to average loans and leases, are shown in the preceding table for the periods presented. The same respective amounts for the second quarter of 2006 were $9.8 million and 0.12%.

The allowance for loan losses at the end of the first half of 2006 increased $10.1 million from the level at year-end 2005. Excluding Amegy, which as previously discussed has not yet been conformed to Zions’ methodology, the amount of the allowance for loan losses attributable to the commercial loan portfolio increased $10.6 million when compared to year-end 2005. During the first six months of 2006, the Company experienced a slight increase in the levels of its criticized and classified loans. As a result, the amount of the allowance for loan losses indicated for criticized and classified loans increased when compared to year-end 2005 by approximately $0.8 million. Both commercial real estate loans and the commercial lending portfolio contributed to this increase. In addition, we had a $9.8 million increase in the level of the allowance indicated for noncriticized and classified loans as a result of $2.1 billion of commercial and commercial real estate loan growth since year-end 2005, excluding Amegy loans. The allowance for consumer loans at June 30,

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2006 decreased by $3.4 million when compared to the allowance at the end of 2005 principally as a result of improving consumer loan delinquencies.

Allowance for Unfunded Lending Commitment – The Company also estimates an allowance for potential losses associated with off-balance sheet commitments and standby letters of credit. We determine the allowance for unfunded lending commitments using a process that is similar to the one we use for commercial loans. Based on historical experience, we have developed experience-based loss factors that we apply to the Company’s unfunded lending commitments to estimate the potential for loss in that portfolio. These factors are generated from tracking commitments that become funded and develop into problem loans.

The following table sets forth the allowance for unfunded lending commitments:

(In millions)	Six Months Ended June 30, 2006			Twelve Months Ended December 31, 2005		Six Months Ended June 30, 2005
Balance at beginning of period	$	18.1		$	12.7	$	12.7
Allowance of company acquired		–			2.0		–
Provision charged (credited) against earnings		(0.5	)		3.4		2.7
Balance at end of period	$	17.6		$	18.1	$	15.4

The following table sets forth the combined allowances for credit losses:

(In millions)	June 30,     2006		December 31, 2005		June 30,     2005
Allowance for loan losses	$	348	$	338	$	282
Allowance for unfunded lending commitments		18		18		15
Total allowances for credit losses	$	366	$	356	$	297

Interest Rate and Market Risk Management

Interest rate risk is the potential for loss resulting from adverse changes in the level of interest rates on the Company’s net interest income. Market risk is the potential for loss arising from adverse changes in the prices of fixed income securities, equity securities, other earning assets and derivative financial instruments as a result of changes in interest rates or other factors. As a financial institution that engages in transactions involving an array of financial products, Zions is exposed to both interest rate risk and market risk.

Interest Rate Risk – Interest rate risk is one of the most significant risks to which the Company is regularly exposed. In general, our goal in managing interest rate risk is to have the net interest margin increase slightly in a rising interest rate environment. We refer to this goal as being slightly “asset sensitive.” This approach is based on our belief that in a rising interest rate environment, the market cost of equity, or implied rate at which future earnings are discounted, would also tend to rise. However, in recent months, competitive pressures and market conditions have resulted in higher deposit costs, slower deposit growth, and increases in borrowed funds, resulting in some contraction of the net interest margin.

We attempt to control the effects that changes in interest rates will have on net interest income through the management of maturities and repricing of the Company’s assets and liabilities and also with the use of interest rate swaps. The prime lending rate and the London Interbank Offer Rate (“LIBOR”) curves are the primary indices used for pricing the Company’s loans, and the 91-day Treasury bill rate is the index used for pricing many of the Company’s liabilities. The Company does not hedge the prime/LIBOR/Treasury Bill spread risk through the use of derivative instruments.

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ZIONS BANCORPORATION AND SUBSIDIARIES

We monitor interest rate risk through the use of two complementary measurement methods: duration of equity and income simulation. In the duration of equity method, we measure the expected changes in the market values of equity in response to changes in interest rates. In the income simulation method, we analyze the expected changes in income in response to changes in interest rates. For income simulation, Company policy requires that interest sensitive income from a static balance sheet is expected to decline by no more than 10% during one year if rates were to immediately rise or fall in parallel by 200 basis points.

As of June 30, 2006, the Company’s duration of equity was estimated to be within a range of positive 0.9 years and positive 3.3 years as compared to negative 0.2 years and positive 2.3 years at December 31, 2005. Income simulation computations at June 30, 2006, resulted in interest sensitive income being expected to decline in the first year after the rate change up to 2.3% and increase up to 1.1% if interest rates were to sustain an immediate parallel increase of 200 basis points and decline between 0.7% and 3.0% if rates were to sustain an immediate parallel decrease of 200 basis points. This compares to interest sensitive income expected to decline in the first year after the rate change up to 1.1% and increase up to 2.4% if interest rates were to sustain an immediate parallel increase of 200 basis points and decline between 0.7% and 4.5% if rates were to sustain an immediate parallel decrease of 200 basis points at December 31, 2005.

Market Risk – Fixed Income – The Company engages in trading and market making of U.S. Treasury, U.S. Government Agency, municipal and corporate securities. This trading and market making exposes the Company to a risk of loss arising from adverse changes in the prices of these fixed income securities held by the Company.

During the fourth quarter of 2005, the Company closed its London trading office and substantially reduced the size of its trading assets in response to continued narrow margins in its odd-lot electronic bond trading business. At June 30, 2006 the Company had $71 million of trading account assets and $27 million of securities sold, not yet purchased compared with $102 million and $282 million of trading assets and $65 million and $291 million of securities sold, not yet purchased at December 31, 2005 and June 30, 2005, respectively.

The Company monitors risk in fixed income trading and market making through Value-at-Risk (“VAR”). VAR is the worst-case loss expected within a specified confidence level, based on statistical models using historical data.

Market Risk – Equity Investments – Through its equity investment activities, the Company owns equity securities that are publicly traded and subject to fluctuations in their market prices or values. In addition, the Company owns equity securities in companies that are not publicly traded and that are accounted for under either the fair value, equity, or full consolidation methods of accounting, depending upon the Company’s ownership position and degree of involvement in influencing the investees’ affairs. In each case, the value of the Company’s investment is subject to fluctuation. Since the market prices or values associated with these securities may fall below the Company’s investment costs, the Company is exposed to the possibility of loss.

The Company conducts minority investing in pre-public venture capital companies in which it does not have strategic involvement, through four funds collectively referred to as Wasatch Venture Funds (“Wasatch”). Wasatch screens investment opportunities and makes investment decisions based on its assessment of business prospects and potential returns. After an investment is made, Wasatch actively monitors the performance of each company in which it has invested, and often has representation on the board of directors of the company.

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ZIONS BANCORPORATION AND SUBSIDIARIES

In addition to the program described above, Amegy has in place an alternative investments program. These investments are primarily directed towards equity buyout and mezzanine funds with a key strategy of deriving ancillary commercial banking business from the portfolio companies. Early stage venture capital funds are not part of the strategy since the underlying companies are typically not credit worthy.

The Company also, from time to time, either starts and funds businesses or makes significant investments in companies of strategic interest. These investments may result in either minority or majority ownership positions, and usually give board representation to Zions or its subsidiaries. These strategic investments generally are in companies that are financial services or financial technologies providers.

A more comprehensive discussion of the Company’s interest rate and market risk management is contained in Zions’ Annual Report on Form 10-K for the year ended December 31, 2005.

Liquidity Risk Management

Liquidity is managed centrally for both the Parent and the bank subsidiaries. The Parent’s cash requirements consist primarily of debt service, investment in and advances to subsidiaries, operating expenses, income taxes, dividends to shareholders and share repurchases. The Parent’s cash needs are routinely met through dividends from its subsidiaries, investment income, subsidiaries’ proportionate share of current income taxes, management and other fees, bank lines, equity contributed through the exercise of stock options, and debt issuances.

During the first six months of 2006, the Parent received $116.0 million in dividends from its subsidiaries. At June 30, 2006, $434.4 million of dividend capacity was available for the subsidiaries to pay to the Parent under regulatory guidelines.

Operational cash flows, while constituting a funding source for the Company, are not large enough to provide funding in the amounts that fulfill the needs of the Parent and the bank subsidiaries. For the first six months of 2006, operations contributed $456.8 million toward these needs. As a result, the Company utilizes other sources at its disposal to manage its liquidity needs.

On March 31, 2006, the Company filed an “automatic shelf registration statement” with the Securities and Exchange Commission as a “well-known seasoned issuer.” This new type of shelf registration does not require a maximum amount of securities that may be issued to be specified. The shelf registration replaced a previous shelf registration and covers securities of the Company, Zions Capital Trust C and Zions Capital Trust D.

On April 27, 2006 under the new shelf registration, we issued $250 million of floating rate senior notes due April 15, 2008. The notes require quarterly interest payments at three-month LIBOR plus 0.12%. They are not redeemable prior to maturity and are not listed on any national securities exchange. Proceeds from the notes were used to retire all of the $150 million of 2.70% senior notes due May 1, 2006 and all of the remaining $104.2 million of 6.95% subordinated notes due May 15, 2011 and redeemable May 15, 2006.

The Parent also has a program to issue short-term commercial paper. At June 30, 2006, outstanding commercial paper was $245.1 million. In addition, at June 30, 2006, the Parent had a secured revolving credit facility with a subsidiary bank totaling $40 million. No amount was outstanding on this facility at June 30, 2006.

The subsidiaries’ primary source of funding is their core deposits, consisting of demand, savings and money market deposits, time deposits under $100,000, and foreign deposits. At June 30, 2006, these core deposits, in aggregate, constituted 89.8% of consolidated deposits, compared with 92.3% of consolidated deposits at

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ZIONS BANCORPORATION AND SUBSIDIARIES

December 31, 2005. For the first six months of 2006, increases in deposits resulted in net cash inflows of $0.6 billion.

The Federal Home Loan Bank (“FHLB”) system is also a significant source of liquidity for the Company’s subsidiary banks. Zions Bank and TCBW are members of the FHLB of Seattle. CB&T, NBA and NSB are members of the FHLB of San Francisco. Vectra is a member of the FHLB of Topeka and Amegy is a member of the FHLB of Dallas. The FHLB allows member banks to borrow against their eligible loans to satisfy liquidity requirements. For the first six months of 2006, the activity in short-term FHLB borrowings resulted in a net cash inflow of approximately $1.2 billion. Amounts of unused lines of credit available for additional FHLB advances were approximately $5.2 billion at June 30, 2006.

The Company has used asset securitizations to sell loans, which have provided an alternative source of funding for the subsidiaries and have enhanced flexibility in meeting their funding needs. During the first six months of 2006, loan sales (other than loans held for sale) provided $142 million in cash inflows.

At June 30, 2006, the Company managed approximately $3.0 billion of securitized assets that were originated or purchased by its subsidiary banks. Of these, approximately $1.8 billion were credit-enhanced by a third party insurance provider and held in Lockhart Funding, LLC, which is a qualifying special-purpose entity securities conduit and an important source of funding for the Company’s loans. Zions Bank provides a Liquidity Facility for a fee to Lockhart, which purchases floating-rate U.S. Government and AAA-rated securities with funds from the issuance of commercial paper. Zions Bank also provides interest rate hedging support and administrative and investment advisory services for a fee. Pursuant to the Liquidity Facility, Zions Bank is required to purchase securities from Lockhart to provide funds for it to repay maturing commercial paper upon Lockhart’s inability to access the commercial paper market, or upon a commercial paper market disruption, as specified in the governing documents of Lockhart. In addition, pursuant to the governing documents, including the Liquidity Facility, if any security in Lockhart is downgraded below AA-, Zions Bank must either 1) place its letter of credit on the security, 2) obtain a credit enhancement on the security from a third party, or 3) purchase the security from Lockhart at book value. At any given time, the maximum commitment of Zions Bank is the book value of Lockhart’s securities portfolio, which is not allowed to exceed the size of the Liquidity Facility.

At June 30, 2006, the book value of Lockhart’s securities portfolio was $5.0 billion, which approximated market value, and the size of the Liquidity Facility commitment was $6.12 billion. No amounts were outstanding under this Liquidity Facility at June 30, 2006, December 31, 2005 or June 30, 2005. Lockhart is limited in size by program agreements, agreements with rating agencies and by the size of the Liquidity Facility.

As described in Note 2 of the Notes to Consolidated Financial Statements, the FASB has recently issued two accounting pronouncements that amend SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. These amendments and other proposals to further amend SFAS No. 140 may require changes to the operating activities of qualifying special-purpose entities and other aspects relating to the transfer of financial assets. As a result of these amendments and proposals, Lockhart’s operations may need to be modified to preserve its off-balance sheet status.

The Company’s investment activities can also provide or use cash. Investment securities activities resulted in a decrease in investment securities holdings and a net increase of cash in the amount of $88.9 million for the second quarter and $182.8 million for the first six months of 2006.

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ZIONS BANCORPORATION AND SUBSIDIARIES

Maturing balances in the various loan portfolios also provide additional flexibility in managing cash flows. In most cases, however, loan growth has resulted in net cash outflows from a funding standpoint. For the first half of 2006, loan growth resulted in a net cash outflow of $2.8 billion.

A more comprehensive discussion of our liquidity management is contained in Zions’ Annual Report on Form 10-K for the year ended December 31, 2005.

Operational Risk Management

Operational risk is the potential for unexpected losses attributable to human error, systems failures, fraud, or inadequate internal controls and procedures. In its ongoing efforts to identify and manage operational risk, the Company has created an Operating Risk Management Group, whose responsibility is to help Company management identify and monitor the key internal controls and processes that the Company has in place to mitigate operational risk.

To manage and minimize its operating risk, the Company has in place transactional documentation requirements, systems and procedures to monitor transactions and positions, regulatory compliance reviews, and periodic reviews by the Company’s internal audit and credit examination departments. In addition, reconciliation procedures have been established to ensure that data processing systems consistently and accurately capture critical data. Further, we maintain contingency plans and systems for operations support in the event of natural or other disasters. We expect to continue efforts to improve the Company’s oversight of operational risk throughout 2006.

CAPITAL MANAGEMENT

Zions has a fundamental financial objective to consistently produce superior risk-adjusted returns on its shareholders’ capital. We believe that a strong capital position is vital to continued profitability and to promoting depositor and investor confidence.

Total shareholders’ equity on June 30, 2006 was $4.4 billion, up 5.0% from $4.2 billion at December 31, 2005 and 51.4% from $2.9 billion at June 30, 2005, reflecting the Amegy acquisition. The Company’s capital ratios were as follows as of the dates indicated:

	June 30,   2006	December 31,   2005	June 30,   2005
Tangible common equity ratio	5.54%	5.28%	6.98%
Average common equity to average assets (three months ended)	10.08%	9.32%	8.85%
Risk-based capital ratios:
Tier 1 leverage	7.51%	8.16%	8.54%
Tier 1 risk-based capital	7.63%	7.52%	9.55%
Total risk-based capital	12.34%	12.23%	14.12%

The changes in the average common equity to average assets ratio and the Tier 1 leverage ratios at June 30, 2006 compared to December 31, 2005 both mainly result from the Amegy acquisition. The averages used in determining the ratios at December 31, 2005 only included the impact of Amegy for one month since it was acquired in December 2005.

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ZIONS BANCORPORATION AND SUBSIDIARIES

It is our belief that capital not considered necessary to support current and anticipated business should be returned to the Company’s shareholders through dividends and repurchases of its shares.

In July 2005, the Company announced that it had suspended the repurchase of shares of its common stock in conjunction with its acquisition of Amegy. The Company anticipates that the common stock buyback program will remain suspended until it achieves a tangible common equity ratio of at least 6.25%.

The Parent and its subsidiary banks are required to maintain adequate levels of capital as measured by several regulatory capital ratios. As of June 30, 2006, the Company and each of its banking subsidiaries met the “well capitalized” guidelines under regulatory standards.

The Company paid dividends of $0.36 per common share in both the second quarter of 2006 and 2005. For the three months ended June 30, 2006, the Company paid $38.3 million in common stock dividends compared to $32.5 million in the same period of 2005.

At its July 2006 meeting, the Company’s Board of Directors declared a dividend in the amount of $0.36 per share of common stock. The dividend is payable on August 23, 2006 to shareholders of record as of the close of business on August 9, 2006.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate and market risks are among the most significant risks regularly undertaken by the Company, and they are closely monitored as previously discussed. A discussion regarding the Company’s management of interest rate and market risk is included in the section entitled “Interest Rate and Market Risk Management” in this Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

An evaluation was carried out by the Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, these disclosure controls and procedures were effective. There have been no changes in the Company’s internal control over financial reporting during the period covered by this report that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART  II. OTHER  INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is a defendant in various legal proceedings arising in the normal course of business. The Company does not believe that the outcome of any such proceedings will have a material effect on its consolidated financial position, operations, or liquidity.

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ZIONS BANCORPORATION AND SUBSIDIARIES

ITEM 1A. RISK FACTORS

The Company believes there have been no significant changes in risk factors compared to the disclosures contained in Zions Bancorporation’s Annual Report on Form 10-K for the year ended December 31, 2005.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Share Repurchases

The following table summarizes the Company’s share repurchases for the second quarter of 2006.

Period	Total number of shares repurchased (1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plan (2)
April	1,768	$	80.90	–	$59,253,657
May	15,498		81.62	–	59,253,657
June	2,597		79.49	–	59,253,657
Quarter	19,863		81.28	–

(1)    Includes 3,733 shares tendered for exercise of stock options.

(2)    The Company has suspended the repurchase of shares in conjunction with the acquisition of Amegy Bancorporation, Inc.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

a) The annual meeting of shareholders of the Registrant was held on May 1, 2006. The total number of shares eligible for voting was 105,906,324.

b) Election of Directors

Proxies were solicited by the Company’s management pursuant to Regulation 14A of the Securities Exchange Act of 1934. Those directors nominated (Proposal 1) in the proxy statement are shown under c) following. There was no solicitation opposing management’s nominees for directors and all such nominees were elected pursuant to the vote of the shareholders. Directors whose terms of office continued after the meeting were:

 Jerry C. Atkin                                         Stephen D. Quinn                                Shelley Thomas Williams

Roger B. Porter                                           L. E. Simmons                                    Steven C. Wheelwright

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ZIONS BANCORPORATION AND SUBSIDIARIES

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

1) Nomination and Election of Directors (Proposal 1):

	For	Withhold         Authority
R. D. Cash	76,547,674	2,991,115
Patricia Frobes	78,743,765	795,024
J. David Heaney	78,908,176	630,613
Harris H. Simmons	78,463,532	1,075,257

2) Approval of the Long Term Executive Incentive Compensation Plan (Proposal 2):

For	Against	Abstain and Non-Votes
56,411,537	3,627,968	19,501,498

3) Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2006 (Proposal 3):

For	Against	Abstain
78,706,345	128,645	563,558

44

ITEM 6. EXHIBITS

  a) Exhibits

Exhibit Number	Description
3.1	Restated Articles of Incorporation of Zions Bancorporation dated November 8, 1993, incorporated by reference to Exhibit 3.1 of Form S-4 filed on November 22, 1993.	*
3.2	Articles of Amendment to the Restated Articles of Incorporation of Zions Bancorporation dated April 30, 1997, incorporated by reference to Exhibit 3.2 of Form 10-K for the year ended December 31, 2002.	*
3.3	Articles of Amendment to the Restated Articles of Incorporation of Zions Bancorporation dated April 24, 1998, incorporated by reference to Exhibit 3.3 of Form 10-K for the year ended December 31, 2003.	*
3.4	Articles of Amendment to Restated Articles of Incorporation of Zions Bancorporation dated April 25, 2001, incorporated by reference to Exhibit 3.6 of Form S-4 filed July 13, 2001.	*
3.5	Restated Bylaws of Zions Bancorporation dated January 27, 2006, incorporated by reference to Exhibit 3.1 of Form 8-K filed on February 2, 2006.	*
10.1	Zions Bancorporation 2006-2008 Value Sharing Plan (filed herewith).
10.2	Form of Zions Bancorporation 2006-2008 Value Sharing Plan, Subsidiary Banks (filed herewith).
10.3	Amegy Corporation, Inc. Third Amended and Restated Non-Employee Directors Deferred Fee Plan (filed herewith).
10.4	Sixth Amendment to the Zions Bancorporation Payshelter 401(k) and Employee Stock Ownership Plan, dated July 31, 2006 (filed herewith).
31.1	Certification by Chief Executive Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith).
31.2	Certification by Chief Financial Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith).
32	Certification by Chief Executive Officer and Chief Financial Officer required by Sections 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 (15 U.S.C. 78m) and 18 U.S.C. Section 1350 (furnished herewith).
	* Incorporated by reference

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ZIONS BANCORPORATION AND SUBSIDIARIES

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, Chairman, President

and Chief Executive Officer

/s/ DOYLE L. ARNOLD

Doyle L. Arnold, Vice Chairman and

Chief Financial Officer

Date: August 9, 2006

46

EX-10.1

EXHIBIT 10.1

Zions Bancorporation

2006 – 2008 Value Sharing Plan

Objective: The purpose of the 2006 – 2008 Zions Bancorporation Value Sharing Plan (the “Plan”) is to provide a three-year incentive plan for selected members of the senior management group and other key managers of Zions Bancorporation (the “Company”) and its subsidiaries. It is designed to create long-term shareholder value by focusing the Participant’s attention on improving the Company’s financial results over a three-year period.

Eligibility: Selected key members of the senior management group and other key managers in the Company its subsidiaries as determined by the Zions Bancorporation (the “Company”) Board of Directors (the “Board”) or its Executive Compensation Committee (the “Committee”).

Effective Date: January 1, 2006, through December 31, 2008 (the “Award Period”).

Frequency of Awards: Subject to the deferral provisions enumerated in the Plan, the incentives, if any, earned under this Plan will be paid within ninety days after the end of the Award Period.

Plan Administrator: The Plan is to be governed and interpreted by the Committee.

How the Plan Works:

1) Establishment of Award Fund

An Award Fund will be established, the size of which will be based upon two factors: a.) “Plan Marginal Qualifying Earnings” during the Award Period, and b.) “Plan Marginal Return on Equity”, both of which are more fully outlined in the Appendix, and in “Calculation Methodology,” below.

2) Participation Units

Each Participant designated by the Committee shall be awarded a specific number of Participation Units (“Units”), representing a pro-rata claim, in proportion to the total number of designated Units, on any Award Fund generated under this Plan during the Award Period.

3) Calculation Methodology

a) In order for any Award Fund to be established under this Plan, a minimum level of Plan Qualifying Earnings and Plan Marginal ROE must be achieved during the Award Period, as indicated in the Appendix.

b) Plan Qualifying Earnings is defined as the total of the following items during the Award Period, divided by average fully diluted shares during the Award Period:

Page 1

2006 – 2008 Value Sharing Plan

Page 2

i) cumulative net income after taxes and minority interests;

ii) plus, the after-tax expense incurred during the Award Period resulting from grants of restricted shares and stock options;

iii) plus, an adjustment equal to (1– the Company’s then-prevailing marginal combined state and federal income tax rate) times the sum of:

1. the amount by which the Company’s Allowance for Loan and Lease Losses and Reserve for Unfunded Commitments (together, the “Loss Reserve”) “midpoint of range” value exceeds the actual value at the inception of the Award Period, and;

2. the amount by which the Loss Reserve actual value exceeds the “midpoint of range” value at the end of the Award Period.

Note: in the event of a change in methodology in determining Loss Reserves during the Award Period, the Committee reserves the right, in its sole discretion, to make such adjustments as may be deemed necessary and equitable to conform the Plan to the new methodology.

iv) plus:

1. (the Company’s average tangible assets over the course of the Award Period x .065) – (the Company’s average tangible common shareholders’ equity over the course of the Award Period) times:

2. (1 – the Company’s then-prevailing marginal combined state and federal income tax rate) times:

3. the average of the five-year U.S. Treasury Note rate at each quarter end during the Award Period.

c) “Base Qualifying Earnings” is defined as the total of the following items during the “Base Period” (e.g. January 1, 2005 –December 31, 2005), divided by average fully diluted shares during the Base Period:

i) net income after taxes and minority interests;

ii) plus, an adjustment to reflect the effect of the acquisition of Amegy Bancorporation, as though the transaction had been consummated at the beginning of 2005, using the $75.8 million in 2005 net income (as projected in the Lehman Bros. presentation to the Company’s board of directors on July 5, 2005) plus 1/3 of the projected after-tax cost of net additional amortization of core deposit and other intangibles arising from the transaction;

iii) plus, the after-tax expense incurred during the Base Period resulting from grants of restricted shares;

2006 – 2008 Value Sharing Plan

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iv) plus:

1. (the Company’s average tangible assets during the Base Period x .065) – (the Company’s average tangible common shareholders’ equity during the Base Period) times:

2. (1– the Company’s then-prevailing marginal combined state and federal income tax rate) times:

3. the average of the five-year U.S. Treasury Note rate at each quarter end during the Base Period.

d) “Plan Marginal Qualifying Earnings” is defined as:

(a) Plan Qualifying Earnings

Less,

(b) three times Base Qualifying Earnings.

e) Plan Marginal ROE is defined as:

i) Plan Marginal Qualifying Earnings;

  Divided by,

ii) (the Company’s average tangible assets over the course of the Award Period x .065)—(the Company’s average tangible assets during the Base Period x .065).

f) Other Adjustments

i) In the event the Company engages in one or more acquisitions during the Award Period, the Committee may make such adjustments to Plan or Base Qualifying Earnings and/or Plan Marginal ROE as are required to neutralize, to the extent possible, the effects of any such acquisition on the Award Fund. Such adjustments shall be made at the Committee’s sole discretion, but shall generally be based upon the pro-forma financial projections presented to the Board in justification of the acquisition.

ii) Any Award Fund established under this Plan must be fully accrued and reflected in Plan Qualifying Earnings.

iii) Unusual or “one-time” gains or losses may be subtracted from or added to Plan Qualifying Earnings at the sole discretion of the Committee.

4) Other Administrative Provisions

(1) This is a discretionary Plan governed and interpreted by the Committee, whose decisions shall be final. The intent of the Plan is to fairly reward Participants for increasing shareholder value. If any adjustments need to be made to allow this Plan to accomplish its purpose, the Committee in its sole discretion can make those adjustments.

2006 – 2008 Value Sharing Plan

Page 4

(2) The Board may, at its sole discretion, alter the terms of the Plan at any time during an Award Period.

(3) Participants will not vest in any benefits available under the Plan until the conclusion of the Award Period.

(4) Participants must be employed by the Company or one of its subsidiaries at the time payment is made. Nevertheless, upon death, permanent disability, or normal or early retirement (unless upon early retirement the Participant becomes employed by an entity which competes with Zions Bancorporation or any of its subsidiaries), Participant (or his/her estate) shall be eligible to receive a pro-rata incentive payment at the conclusion of the Award Period. This award will be based upon the Participant’s calculated award as approved by the Board or Committee for the performance achieved for the number of full calendar quarters the Participant was engaged as an officer of the Company or its subsidiaries prior to death, disability or retirement. For purposes of this Plan, a Participant will generally not be considered eligible for early retirement before age 55, or for normal retirement before age 65, unless otherwise approved by the Committee.

(5) Each Participant will be required to defer for one year any incentive payment amount in excess of 100% of his/her base salary as in effect at December 31, 2008 or at such earlier date as of the Participant’s termination of employment with the Company (except that, in the event the deferred amount is less than $10,000, the entire amount shall be immediately payable within ninety days of the end of the Award Period). Payment of the deferred amount will be paid by March 15, 2010, if conditions established in paragraph D) 4 above are met.

(6) The Company shall retain the right to withhold payment of incentives to Participants in the event of a significant deterioration in the Company’s financial condition, or if so required by regulatory authorities, or for any other reason considered valid by the Board in its sole discretion.

(7) Designation as a Participant in the Plan does not create a contract of employment for any specified time, nor shall such act to alter or amend the Company’s “at-will” policy of employment.

(8) In the event a Participant transfers within Zions Bancorporation during the Award Period, he/she may be eligible to receive a pro-rata award from each participating Zions entity based on the number of months in each entity and each entity’s financial performance.

(9) In the event of a change in control of the Company (as defined in the Company’s Change in Control Plan), the Plan will be terminated and payments shall be made in accordance with the provisions of section 3 (b) of the Change in Control Plan.

(10) This document is intended to provide a guideline for the creation and distribution of incentive compensation. Nothing herein creates a

2006 – 2008 Value Sharing Plan

Page 5

contractual obligation binding on the Board, and no Participant shall have any legal rights with respect to an Award until such Award is distributed.

APPENDIX

• The minimum Plan Qualifying Earnings of Zions Bancorporation which must be achieved for payment of awards is $17.11 per share, which represents 5% annual compounded growth in Base Qualifying Earnings over the course of the Award Period. (Base Qualifying Earnings is $5.28.)

• The Award Fund is calculated by multiplying Plan Marginal Qualifying Earnings by 3.289%.

The minimum Plan Marginal ROE of Zions Bancorporation that must be achieved for payment of awards is 11.00%.

• The Award Fund shall be increased by a multiplier, based upon the achievement of Plan Marginal ROE as follows:

If the Plan Marginal ROE is:	Then the multiplier is:
11.00% or less	-0-
14.00%	1.00
17.00%	1.50
20.00%	2.00
21.50% or greater	2.25
The multiplier will be interpolated for Plan Marginal ROE levels falling between these benchmarks.

• The maximum Award Fund that may be created under this Plan is $54,973,750, which equates to $4.25 per unit.

The value of each Unit shall be equal to the total amount in the Award Fund, divided by 12,935,000.

2006 – 2008 Value Sharing Plan

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Example:

If a Participant in the Zions Bancorporation 2006 – 2008 Value Sharing Plan is awarded 150,000 units; the total Plan Qualifying Earnings amount to $20.33 per share; the Plan Marginal ROE is 17.5%; and the average fully diluted outstanding shares total 108,300,000, the amount of the incentive award would be:

Unadjusted Award Fund:

$ 20.33

- 15.84

$ 4.49

X 3.289%

$.1477

X 108,300,000

$15,993,322

Multiplier:

1.5 + (.175 -.17) X (2.0 – 1.5) = 1.5833

(.20 - .17)

Total Award Fund:

$15,993,322 X 1.5833 = $25,322,227

Individual Unit Value:

$25,322,227 /12,935,000 = $1.9577

Total Value of Units:

150,000 X $1.9577 = $293,655.00

EX-10.2

EXHIBIT 10.2

[FORM OF PLAN]

ZIONS BANCORPORATION

2006 – 2008 Value Sharing Plan

Subsidiary Banks

The Company administers a senior management long term executive incentive compensation plan (2006 – 2008 Value Sharing Plan) for the following subsidiary banks: California Bank & Trust, The Commerce Bank of Washington, National Bank of Arizona, Nevada State Bank, Vectra Bank Colorado, and Zions Bank in the form attached hereto.

Page 1

2006 – 2008 Value Sharing Plan

Page 2

[FORM OF PLAN]

[Name of Subsidiary Bank]

2006 – 2008 Value Sharing Plan

Objective: The purpose of the 2006 – 2008 [Name of Subsidiary Bank] Value Sharing Plan (the “Plan”) is to provide a three-year incentive plan for selected members of the senior management group and other key managers of [Name of Subsidiary Bank] (the “Bank”). It is designed to create long-term shareholder value by focusing the Participant’s attention on improving the Bank’s financial results over a three-year period.

Eligibility: Selected key members of the senior management group and other key managers of the Bank as determined by the Zions Bancorporation (the “Company”) Board of Directors (the “Board”) or its Executive Compensation Committee (the “Committee”).

Effective Date: January 1, 2006, through December 31, 2008 (the “Award Period”).

Frequency of Awards: Subject to the deferral provisions enumerated in the Plan, the incentives, if any, earned under this Plan will be paid within ninety days after the end of the Award Period.

Plan Administrator: The Plan is to be governed and interpreted by the Committee.

How the Plan Works:

1) Establishment of Award Fund

An Award Fund will be established, the size of which will be based upon two factors: a.) “Plan Marginal Qualifying Earnings” during the Award Period, and b.) “Plan Marginal Return on Equity”, both of which are more fully outlined in the Appendix, and in “Calculation Methodology,” below.

2) Participation Units

Each Participant designated by the Committee shall be awarded a specific number of Participation Units (“Units”), representing a pro-rata claim, in proportion to the total number of designated Units, on any Award Fund generated under this Plan during the Award Period.

3) Calculation Methodology

a) In order for any Award Fund to be established under this Plan, a minimum level of Plan Qualifying Earnings and Plan Marginal ROE must be achieved during the Award Period, as indicated in the Appendix.

b) Plan Qualifying Earnings is defined as the total of the following items during the Award Period:

2006 – 2008 Value Sharing Plan

Page 3

i) cumulative net income after taxes and minority interests;

ii) plus, the after-tax expense incurred during the Award Period resulting from grants of restricted shares and stock options.

iii) minus, any after tax gain (loss) from investment in Wasatch Venture Funds;

iv) plus (or minus), any adjustment deemed necessary by the Committee to normalize Plan Qualifying Earnings as a result of unusual and extraordinary changes in internal cost or income allocations, relative to those included in the Base Period Qualifying Earnings, which produce a change in costs or income which are not offset by a corresponding change in cost or income within the Bank.

v) plus, an adjustment equal to (1– the Bank’s then-prevailing marginal combined state and federal income tax rate) times the sum of:

1. the amount by which the Bank’s Allowance for Loan and Lease Losses and Reserve for Unfunded Commitments (together, the “Loss Reserve”) “midpoint of range” value exceeds the actual value at the inception of the Award Period, and;

2. the amount by which the Loss Reserve actual value exceeds the “midpoint of range” value at the end of the Award Period.

Note: in the event of a change in methodology in determining Loss Reserves during the Award Period, the Committee reserves the right, in its sole discretion, to make such adjustments as may be deemed necessary and equitable to conform the Plan to the new methodology.

vi) plus:

1. (the Bank’s average tangible assets over the course of the Award Period x .060) – (the Bank’s average tangible common shareholders’ equity over the course of the Award Period) times:

2. (1– the Bank’s then-prevailing marginal combined state and federal income tax rate) times:

3. The average of the five-year U.S. Treasury Note rate at each quarter end during the Award Period.

c) “Base Qualifying Earnings” is defined as the total of the following items during the “Base Period” (e.g. January 1, 2005 – December 31, 2005):

i) net income after taxes and minority interests, with appropriate adjustments made to conform allocated expense methodologies in 2005 with those expected to be used through the duration of the Award Period;

2006 – 2008 Value Sharing Plan

Page 4

ii) minus, any after tax gain (loss) from investment in Wasatch Venture Funds;

iii) plus, the after-tax expense incurred during the Base Period resulting from grants of restricted shares;

iv) plus:

1. (the Bank’s average tangible assets during the Base Period x .060) – (the Bank’s average tangible common shareholders’ equity during the Base Period) times:

2. (1 – the Bank’s then-prevailing marginal combined state and federal income tax rate) times:

3. the average of the five-year U.S. Treasury Note rate at each quarter end during the Base Period.

d) “Plan Marginal Qualifying Earnings” is defined as:

(a) Plan Qualifying Earnings

Less,

(b) three times Base Qualifying Earnings.

e) Plan Marginal ROE is defined as:

i) Plan Marginal Qualifying Earnings;

  Divided by,

ii) (the Bank’s average tangible assets over the course of the Award Period x .06) – (the Bank’s average tangible assets during the Base Period x .06).

f) Other Adjustments

i) In the event the Bank engages in one or more acquisitions during the Award Period, the Committee may make such adjustments to Plan or Base Qualifying Earnings and/or Plan Marginal ROE as are required to neutralize, to the extent possible, the effects of any such acquisition on the Award Fund. Such adjustments shall be made at the Committee’s sole discretion, but shall generally be based upon the pro-forma financial projections presented to the Board in justification of the acquisition.

ii) Any Award Fund established under this Plan must be fully accrued and reflected in Plan Qualifying Earnings.

iii) Unusual or “one-time” gains or losses may be subtracted from or added to Plan Qualifying Earnings at the sole discretion of the Committee.

4) Other Administrative Provisions

2006 – 2008 Value Sharing Plan

Page 5

(1) This is a discretionary Plan governed and interpreted by the Committee, whose decisions shall be final. The intent of the Plan is to fairly reward Participants for increasing shareholder value. If any adjustments need to be made to allow this Plan to accomplish its purpose, the Committee in its sole discretion can make those adjustments.

(2) The Board may, at its sole discretion, alter the terms of the Plan at any time during an Award Period.

(3) Participants will not vest in any benefits available under the Plan until the conclusion of the Award Period.

(4) Participants must be employed by the Company or one of its subsidiaries at the time payment is made. Nevertheless, upon death, permanent disability, or normal or early retirement (unless upon early retirement the Participant becomes employed by an entity which competes with Zions Bancorporation or any of its subsidiaries), Participant (or his/her estate) shall be eligible to receive a pro-rata incentive payment at the conclusion of the Award Period. This award will be based upon the Participant’s calculated award as approved by the Board or Committee for the performance achieved for the number of full calendar quarters the Participant was engaged as an officer of the Company or its subsidiaries prior to death, disability or retirement. For purposes of this Plan, a Participant will generally not be considered eligible for early retirement before age 55, or for normal retirement before age 65, unless otherwise approved by the Committee.

(5) Each Participant will be required to defer for one year any incentive payment amount in excess of 100% of his/her base salary as in effect at December 31, 2008 or at such earlier date as of the Participant’s termination of employment with the Company (except that, in the event the deferred amount is less than $10,000, the entire amount shall be immediately payable within ninety days of the end of the Award Period). Payment of the deferred amount will be paid by March 15, 2010, if conditions established in paragraph D) 4 above are met.

(6) The Company shall retain the right to withhold payment of incentives to Participants in the event of a significant deterioration in the Company’s or the Bank’s financial condition, or if so required by regulatory authorities, or for any other reason considered valid by the Board in its sole discretion.

(7) Designation as a Participant in the Plan does not create a contract of employment for any specified time, nor shall such act to alter or amend the Company’s “at-will” policy of employment.

(8) In the event a Participant transfers within Zions Bancorporation during the Award Period, he/she may be eligible to receive a pro-rata award from each participating Zions entity based on the number of months in each entity and each entity’s financial performance.

2006 – 2008 Value Sharing Plan

Page 6

(9) In the event of a change in control of the Company (as defined in the Company’s Change in Control Plan), the Plan will be terminated and payments shall be made in accordance with the provisions of section 3 (b) of the Change in Control Plan.

(10) This document is intended to provide a guideline for the creation and distribution of incentive compensation. Nothing herein creates a contractual obligation binding on the Board, and no Participant shall have any legal rights with respect to an Award until such Award is distributed.

2006 – 2008 Value Sharing Plan

Page 7

CALIFORNIA BANK & TRUST

APPENDIX

• The minimum Plan Qualifying Earnings of California Bank & Trust which must be achieved for payment of awards is $536,244,000 which represents 5% annual compounded growth in Base Qualifying Earnings over the course of the Award Period. (Base Qualifying Earnings is $162,001,000.)

• The Award Fund is calculated by multiplying Plan Marginal Qualifying Earnings by 7.828%

• The minimum Plan Marginal ROE of California Bank & Trust that must be achieved for payment of awards is 11.00%.

• The Award Fund shall be increased by a multiplier, based upon the achievement of Plan Marginal ROE as follows:

If the Plan Marginal ROE is:	Then the multiplier is:
11.00% or less	-0-
14.00%	1.00
17.00%	1.50
20.00%	2.00
21.50% or greater	2.25
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks.

• The maximum Award Fund that may be created under this Plan is $38,250,000, which equates to $4.25 per unit.

The value of each Unit shall be equal to the total amount in the Award Fund, divided by 9,000,000.

2006 – 2008 Value Sharing Plan

Page 8

Example:

If a Participant in the California Bank & Trust 2006 – 2008 Value Sharing Plan is awarded 150,000 units, and the total Plan Qualifying Earnings amount to $624,000,000 and the Plan Marginal ROE is 17.5%, the amount of the incentive award would be:

Unadjusted Award Fund:

$624,000,000

- 486,003,000

137,997,000

X 7.828%

$ 10,802,405

Multiplier:

1.5 + (.175 - .17) X (2.0 - 1.5) = 1.5833

(.20 - .17)

Total Award Fund:

$10,802,405 X 1.5833 = $17,103,448

Individual Unit Value:

$17,103,448/ 9,000,000 = $1.90

Total Value of Units:

150,000 X $1.90 = $285,000

2006 – 2008 Value Sharing Plan

Page 9

THE COMMERCE BANK OF WASHINGTON

APPENDIX

• The minimum Plan Qualifying Earnings of The Commerce Bank of Washington which must be achieved for payment of awards is $40,219,000, which represents 5% annual compounded growth in Base Qualifying Earnings over the course of the Award Period. (Base Qualifying Earnings is $12,150,000.)

• The Award Fund is calculated by multiplying Plan Marginal Qualifying Earnings by 7.538%

• The minimum Plan Marginal ROE of The Commerce Bank of Washington that must be achieved for payment of awards is 11.00%.

• The Award Fund shall be increased by a multiplier, based upon the achievement of Plan Marginal ROE as follows:

If the Plan Marginal ROE is:	Then the multiplier is:
11.00% or less	-0-
14.00%	1.00
17.00%	1.50
20.00%	2.00
21.50% or greater	2.25
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks.

• The maximum Award Fund that may be created under this Plan is $2,762,500 which equates to $4.25 per unit.

The value of each Unit shall be equal to the total amount in the Award Fund, divided by 650,000.

2006 – 2008 Value Sharing Plan

Page 10

Example:

If a Participant in the The Commerce Bank of Washington 2006 – 2008 Value Sharing Plan is awarded 150,000 units, and the total Plan Qualifying Earnings amount to $46,775,000 and the Plan Marginal ROE is 17.5%, the amount of the incentive award would be:

Unadjusted Award Fund:

$ 46,775,000

- 36,450,000

10,325,000

X 7.538 %

$ 778,298.50

Multiplier:

1.5 + (.175 - .17) X (2.0 - 1.5) = 1.5833

(.20 - .17)

Total Award Fund:

$778,298.50 X 1.5833 = $1,232,280

Individual Unit Value:

$1,232,280/ 650,000 = $1.90

Total Value of Units:

150,000 X $1.90 = $285,000

2006 – 2008 Value Sharing Plan

Page 11

NATIONAL BANK OF ARIZONA

APPENDIX

• The minimum Plan Qualifying Earnings of National Bank of Arizona which must be achieved for payment of awards is $215,405,000, which represents 5% annual compounded growth in Base Qualifying Earnings over the course of the Award Period. (Base Qualifying Earnings is $65,074,000.)

• The Award Fund is calculated by multiplying Plan Marginal Qualifying Earnings by 7.037%

• The minimum Plan Marginal ROE of National Bank of Arizona that must be achieved for payment of awards is 11.00%.

• The Award Fund shall be increased by a multiplier, based upon the achievement of Plan Marginal ROE as follows:

If the Plan Marginal ROE is:	Then the multiplier is:
11.00% or less	-0-
14.00%	1.00
17.00%	1.50
20.00%	2.00
21.50% or greater	2.25
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks.

• The maximum Award Fund that may be created under this Plan is $13,812,500, which equates to $4.25 per unit.

The value of each Unit shall be equal to the total amount in the Award Fund, divided by 3,250,000.

2006 – 2008 Value Sharing Plan

Page 12

Example:

If a Participant in the National Bank of Arizona 2006 – 2008 Value Sharing Plan is awarded 150,000 units, and the total Plan Qualifying Earnings amount to $250,521,000 and the Plan Marginal ROE is 17.5%, the amount of the incentive award would be:

Unadjusted Award Fund:

$250,521,000

- 195,222,000

    55,299,000

         X 7.037 %

$    3,891,391

Multiplier:

1.5 + (.175 -.17) X (2.0 -1.5) = 1.5833

(.20 -.17)

Total Award Fund:

$3,891,391 X 1.5833 = $6,161,239

Individual Unit Value:

$6,161,239/ 3,250,000 = $1.90

Total Value of Units:

150,000 X $1.90 = $285,000

2006 – 2008 Value Sharing Plan

Page 13

NEVADA STATE BANK

APPENDIX

• The minimum Plan Qualifying Earnings of Nevada State Bank which must be achieved for payment of awards is $209,853,000, which represents 5% annual compounded growth in Base Qualifying Earnings over the course of the Award Period. (Base Qualifying Earnings is $63,397,000.)

• The Award Fund is calculated by multiplying Plan Marginal Qualifying Earnings by 5.667%

• The minimum Plan Marginal ROE of Nevada State Bank that must be achieved for payment of awards is 11.00%.

• The Award Fund shall be increased by a multiplier, based upon the achievement of Plan Marginal ROE as follows:

If the Plan Marginal ROE is:	Then the multiplier is:
11.00% or less	-0-
14.00%	1.00
17.00%	1.50
20.00%	2.00
21.50% or greater	2.25
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks.

• The maximum Award Fund that may be created under this Plan is $10,837,500 which equates to $4.25 per unit.

The value of each Unit shall be equal to the total amount in the Award Fund, divided by 2,550,000.

2006 – 2008 Value Sharing Plan

Page 14

Example:

If a Participant in the Nevada State Bank 2006 – 2008 Value Sharing Plan is awarded 150,000 units, and the total Plan Qualifying Earnings amount to $244,075,000 and the Plan Marginal ROE is 17.5%, the amount of the incentive award would be:

Unadjusted Award Fund:

$244,075,000

- 190,191,000

$  53,884,000

         X 5.667 %

$    3,053,606

Multiplier:

1.5 + (.175 -.17) X (2.0 – 1.5) = 1.5833

(.20 - .17)

Total Award Fund:

$3,053,606 X 1.5833 = $4,834,774

Individual Unit Value:

$4,834,774/ 2,550,000 = $1.90

Total Value of Units:

150,000 X $1.90 = $285,000

2006 – 2008 Value Sharing Plan

Page 15

VECTRA BANK COLORADO

APPENDIX

• The minimum Plan Qualifying Earnings of Vectra Bank Colorado which must be achieved for payment of awards is $53,103,000, which represents 5% annual compounded growth in Base Qualifying Earnings over the course of the Award Period. (Base Qualifying Earnings is $16,949,000.)

• The Award Fund is calculated by multiplying Plan Marginal Qualifying Earnings by 17.042%

• The minimum Plan Marginal ROE of Vectra Bank Colorado that must be achieved for payment of awards is 11.00%.

• The Award Fund shall be increased by a multiplier, based upon the achievement of Plan Marginal ROE as follows:

If the Plan Marginal ROE is:	Then the multiplier is:
11.00% or less	-0-
14.00%	1.00
17.00%	1.50
20.00%	2.00
21.50% or greater	2.25
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks.

• The maximum Award Fund that may be created under this Plan is $8,712,500, which equates to $4.25 per unit.

The value of each Unit shall be equal to the total amount in the Award Fund, divided by 2,050,000.

2006 – 2008 Value Sharing Plan

Page 16

Example:

If a Participant in the Vectra Bank Colorado 2006 – 2008 Value Sharing Plan is awarded 150,000 units, and the total Plan Qualifying Earnings amount to $65,250,000 and the Plan Marginal ROE is 17.5%, the amount of the incentive award would be:

Unadjusted Award Fund:

$ 65,000,000

-  50,847,000

   14,153,000

      X 17.042 %

$   2,462,905

Multiplier:

1.5 + (.175 -.17) X (2.0 – 1.5) = 1.5833

(.20 -.17)

Total Award Fund:

$2,462,905 X 1.5833 = $3,899,517

Individual Unit Value:

$3,899,517/2,050,000 = $1.90

Total Value of Units:

150,000 X $1.90 = $285,000

2006 – 2008 Value Sharing Plan

Page 17

ZIONS BANK (CORE BANK)

APPENDIX

• The minimum Plan Qualifying Earnings of Zions Bank (Core Bank) which must be achieved for payment of awards is $522,380,000, which represents 5% annual compounded growth in Base Qualifying Earnings over the course of the Award Period. (Base Qualifying Earnings is $157,813,000.)

• The Award Fund is calculated by multiplying Plan Marginal Qualifying Earnings by 7.524%

• The minimum Plan Marginal ROE of Zions Bank (Core Bank) that must be achieved for payment of awards is 11.00%.

• The Award Fund shall be increased by a multiplier, based upon the achievement of Plan Marginal ROE as follows:

If the Plan Marginal ROE is:	Then the multiplier is:
11.00% or less	-0-
14.00%	1.00
17.00%	1.50
20.00%	2.00
21.50% or greater	2.25
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks.

• The maximum Award Fund that may be created under this Plan is $35,700,000, which equates to $4.25 per unit.

The value of each Unit shall be equal to the total amount in the Award Fund, divided by 8,400,000.

2006 – 2008 Value Sharing Plan

Page 18

Example:

If a Participant in the Zions Bank (Core Bank) 2006 – 2008 Value Sharing Plan is awarded 150,000 units, and the total Plan Qualifying Earnings amount to $607,548,000 and the Plan Marginal ROE is 17.5%, the amount of the incentive award would be:

Unadjusted Award Fund:

$607,548,000

- 473,439,000

134,109,000

X 7.524%

$ 10,090,361

Multiplier:

1.5 + (.175 - .17) X (2.0 - 1.5) = 1.5833

(.20 - .17)

Total Award Fund:

$10,090,361 X 1.5833 = $15,976,069

Individual Unit Value:

$15,976,069/ 8,400,000 = $1.90

Total Value of Units:

150,000 X $1.90 = $285,000

EX-10.3

EXHIBIT 10.3

AMEGY CORPORATION, INC.

THIRD AMENDED AND RESTATED NON-EMPLOYEE DIRECTORS

DEFERRED FEE PLAN

1.    Purpose. The purpose of the Plan is to provide Non-Employee Directors an opportunity to defer payment of all or a portion of their Director’s Fees in accordance with the terms and conditions set forth herein.

2.    Definitions. For the purposes of the Plan, the following capitalized words shall have the meanings set forth below:

“Advisory Director” means an advisory director of the Bank Board and any member of any advisory board of directors or similar group or committee that may be constituted from time to time by the Board, the Bank Board, or management of the Company or the Bank.

“Bank” means Amegy Bank N.A., a wholly-owned subsidiary of the Company.

“Bank Board” means the Board of Directors of the Bank.

“Board” means the Board of Directors of the Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” means the Benefits Committee of the Company.

“Common Stock” means the common stock of the Company.

“Company” means Zions Bancorporation.

“Deferral Election Form” means a document, in a form approved by the Committee, pursuant to which a Non-Employee Director makes a deferral election under the Plan.

“Deferral Period” means each calendar year. The first Deferral Period under the Plan shall commence January 1, 2002. If an individual becomes eligible to participate in the Plan after the commencement of a Deferral Period, the Deferral Period for that individual shall be the remainder of such Deferral Period following his Election Date.

“Deferred Benefit” means an amount that will be paid on a deferred basis under the Plan.

“Deferred Compensation Account” means the bookkeeping account established for each Non-Employee Director for purposes of measuring his or her Deferred Benefit and shall include subaccounts for Deferred Benefits that are to be paid at different times and/or in a different manner.

“Director’s Fee” means the cash portion of the annual retainer fee and any other fees payable for service on the Bank Board, including, without limitation, any meeting fees or fees for serving as a chair of any committee of the Bank Board or any fees received as an Advisory Director.

“Election Date” means the day immediately preceding the commencement of a Deferral Period. If an individual first becomes eligible to participate in the Plan after the start of a Deferral Period, the Election Date shall be not later than the thirtieth day following the initial date such individual became a Non-Employee Director.

“Fair Market Value” means the closing sales price of a share of Common Stock on the applicable date (or, if there was no trading in the shares on such date, on the next preceding date on which there was trading) on the principal exchange or system on which the shares are sold, as reported in The Wall Street Journal or other reporting service approved by the Committee.

“Non-Employee Director” means a member of the Bank Board and an Advisory Director who is not an employee of the Company or any of its subsidiaries.

“Phantom Stock Unit” means a bookkeeping unit representing the equivalent in value of one share of Common Stock.

“Plan” means the Amegy Bancorporation, Inc. Non-Employee Directors Deferred Fee Plan.

3.    Administration.

(a) The Plan shall be administered by the Committee.

(b) The Committee shall be authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, to make factual determinations in connection with the administration or interpretation of the Plan, and to make any other determinations that it believes are necessary or advisable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Deferral Election Form to the extent the Committee deems desirable to carry the Plan into effect. Any decision of the Committee in the administration of the Plan shall be final and conclusive. The Committee may act only by a majority of its members, except that the members thereof may authorize

2

any one or more of the Committee members to execute and deliver documents on behalf of the Committee.

(c) Each member of the Committee and each other person acting at the direction of or on behalf of the Committee shall not be liable for any determination or anything done or omitted to be done by him or by any other member of the Committee or any other such individual in connection with the Plan, except for his own gross negligence or willful misconduct or as expressly provided by statute, and to the extent permitted by law and the bylaws of the Company, shall be fully indemnified and protected by the Company with respect to such determination, act or omission.

4.    Shares Available. The Company is authorized to credit up to 125,000 Phantom Stock Units and to issue up to 125,000 shares of Common Stock, respectively, under the Plan (the “Plan Limit”). Such shares of Common Stock may be newly issued shares of Common Stock or reacquired shares of Common Stock held in the treasury of the Company.

5.    Deferral of Director’s Fees.

(a) Deferral Elections.

(i) General Provisions. Unless the Committee provides otherwise, Non-Employee Directors may elect to defer all, one-half or none of their Director’s Fees with respect to a Deferral Period in the manner provided in this Section 5. A Non-Employee Director’s Deferred Benefit is at all times nonforfeitable.

(ii) Deferral Election Forms. In order for a Non-Employee Director to participate in the Plan for a given Deferral Period, a Deferral Election Form, completed and signed by him, must be delivered to the Company on or prior to the applicable Election Date. A Deferral Election Form shall remain in effect for the Plan Year and for all subsequent Plan years until amended or revoked by the Participant or terminated by the Company as provided herein. A Non-Employee Director electing to participate in the Plan shall indicate on his Deferral Election Form:

(A) the percentage of the Director’s Fees for the Deferral Period to be deferred, which election shall be irrevocable for such Deferral Period, and

(B) the timing and manner of payment of the Director’s Fees deferred for that Deferral Period. Any subsequent change as to the timing and manner of payment

3

of Deferred Benefits already credited to the Non-Employee Director’s Deferred Compensation Account must (i) be made at least 12 months prior to the date of the schedule payment or commencement of payment; (ii) delay the subsequent payment or commencement of payment at least five years after the date on which such payment or commencement of payment would otherwise have been made or commenced; and shall not be effective for 12 months following the change.

(iii) Effect of No Deferral Election. A Non-Employee Director who does not have a completed Deferral Election Form on file with the Company on or prior to the applicable Election Date for a Deferral Period may not defer his Director’s Fees for such Deferral Period.

(b) Establishment of Deferred Compensation Accounts. A Non-Employee Director’s deferrals will be credited to a Deferred Compensation Account set up for that Non-Employee Director by the Company in accordance with the provisions of this Section 5.

(c) Crediting of Phantom Stock Units to Deferred Compensation Accounts.

(i) Number of Phantom Stock Units. The portion of the Director’s Fees that a Non-Employee Director elects to defer shall be credited to the Participant’s Deferral Account no later than the first business day of the calendar quarter following the date as of which the amount would have been paid to the Participant absent a Deferral Election Form. The number of Phantom Stock Units to be credited to the Deferred Compensation Account shall be determined by dividing (1) the amount of the Director’s Fees deferred during such quarter by (2) the Fair Market Value of a share of Common Stock as of the date of crediting, and (3) multiplying such result by 1.25.

(ii) Dividends. No adjustment or credit will be made to a Deferred Compensation Account by reason of the making of any distribution in respect of the Common Stock, other than a transaction described in Section 7(b).

(iii) No Rights as Stockholder. The crediting of Phantom Stock Units to a Non-Employee Director’s Deferred Compensation Account shall not confer on the Non-Employee Director any rights as a stockholder of the Company.

4

(iv) Conversion of Phantom Stock Units. The conversion of Phantom Stock Units based on stock of Amegy Bancorporation, Inc. to stock of the Company shall be determined by the Company.

(d) Written Statements of Account. The Company will furnish each Non-Employee Director with a statement setting forth the value of such Non-Employee Director’s Deferred Compensation Account as of the end of each Deferral Period and all credits to and payments from the Deferred Compensation Account during the Deferral Period. Such statement will be furnished as soon as reasonably practical after the end of the Deferral Period.

(e) Manner of Payment of Deferred Benefit. Payment of the Deferred Benefits shall be in shares of Common Stock. Payment shall be made either in a single lump sum or in a series of five or fewer annual installments, as elected by the Non-Employee Director. The amount of each installment payment to a Non-Employee Director shall be determined in accordance with the formula B/(N-P), where “B” is the total value of the Deferred Compensation Account as of the installment calculation date, “N” is the number of installments elected by the Non-Employee Director and “P” is the number of installments previously paid to the Non-Employee Director. Any partial unit resulting in the calculation above will be settled in cash.

(f) Commencement of Payment of Deferred Benefit. Payment of a Non-Employee Director’s Deferred Compensation Account, including subaccounts, shall commence as soon as reasonably practicable after the earlier to occur of:

(i) his or her termination as a Non-Employee Director; and

(ii) the date specified in the Deferral Election Form executed by the Non-Employee Director;

provided, however, that if the Non-Employee Director is employed by the Company or the Bank following his or her termination as a Non-Employee Director, then payment of such account shall not commence until his or her separation from service with the Company or the Bank; and, provided further, that if he or she is a “specified employee’ as defined under Section 409A of the Code or the regulations promulgated thereunder, payment of a such participant’s Non-Employee Director’s Deferred Compensation Account cannot be made before the earlier of (i) the date that is six months after the date of the specified employee’s separation from service; or (ii) the date of the specified employee’s death.

(g) Death. In the event of a Non-Employee Director’s death, the Non-Employee Director’s entire Deferred Benefit will be distributed in a lump sum to the Non-Employee Director’s beneficiary as soon as reasonably practicable after the date of death.

5

(h) Restrictions on Transfer. The Company shall pay all Deferred Benefits payable under the Plan only to the Non-Employee Director or beneficiary designated under the Plan to receive such amounts. Neither a Non-Employee Director nor his beneficiary shall have any right to anticipate, alienate, sell, transfer, assign, pledge, encumber or change any benefits to which he may become entitled under the Plan, and any attempt to do so shall be void. A Deferred Benefit shall not be subject to attachment, execution by levy, garnishment, or other legal or equitable process for a Non-Employee Director’s or beneficiary’s debts or other obligations.

6.    Designation of Beneficiary.

(a) Beneficiary Designations. Each Non-Employee Director may designate a beneficiary to receive any Deferred Benefit due under the Plan on the Non-Employee Director’s death by executing a beneficiary designation form provided by the Company.

(b) Change of Beneficiary Designation. A Non-Employee Director may change an earlier beneficiary designation by executing a later beneficiary designation form and delivering it to the Company. The execution of a beneficiary designation form and its receipt by the Company revokes and rescinds any prior beneficiary designation form.

7.    Recapitalization or Reorganization.

(a) Authority of the Company and Stockholders. The existence of the Plan shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks having rights superior to or affecting the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

(b) Change in Capitalization. Notwithstanding any other provision of the Plan, in the event of any change in the outstanding Common Stock by reason of a stock dividend, recapitalization, reclassification, reorganization, merger, consolidation, stock split, combination, exchange of shares or other transaction: (i) such proportionate adjustments as may be necessary (as determined by the Committee in its sole discretion) to reflect such change shall be made to prevent dilution or enlargement of the rights of Non-Employee Directors under the Plan with respect to the aggregate number of shares of Common Stock authorized to be

6

awarded under the Plan and the number of Phantom Stock Units credited to a Non-Employee Director’s Deferred Compensation Account, and (ii) the Committee may make such other adjustments, consistent with the foregoing, as it deems appropriate in its sole discretion.

(c) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company and to the extent permitted by Section 409A of the Code, all Deferred Benefits credited to the Non-Employee Director’s Deferred Compensation Account as of the date of the consummation of a proposed dissolution or liquidation shall be paid in cash to the Non-Employee Director or, in the event of death of the Non-Employee Director prior to payment, to the beneficiary thereof on the date of the consummation of such proposed action. The cash amount paid for each Phantom Stock Unit shall be the Fair Market Value of a share of Common Stock as of the date of the consummation of such proposed action.

8.    Plan Limit, Termination and Amendment of the Plan.

(a) Plan Limit. If the Plan Limit has been reached, no additional Director Fees may be deferred after that date and any dividend equivalents credited thereafter shall be credited as a bookkeeping “cash” amount, rather than as Phantom Stock Units, and shall be credited with interest, until paid in cash, at the Company’s prime rate of interest each valuation date.

(b) General Power of Board. Notwithstanding anything herein to the contrary, the Board may at any time and from time to time terminate, modify, suspend or amend the Plan in whole or in part and, upon termination of the Plan, immediately settle all Phantom Stock Units in shares of Common Stock notwithstanding any deferral elections to the contrary; provided, however, that no such termination, modification, suspension or amendment shall be effective without stockholder approval if such approval is required to comply with any applicable law or stock exchange rule; and, provided further, that the Board may not, without stockholder approval, increase the maximum number of shares issuable under the Plan, except as provided in Section 7(b) above.

Notwithstanding anything herein to the contrary, (i) no amendment shall be made to the Plan with respect to any amount deferred and vested prior to January 1, 2005 unless such amendment explicitly provides that it is applicable to such amount; and (ii) except as the Committee otherwise determines in writing, no distribution shall be made upon termination of the Plan if such distribution shall be subject to the excise tax applicable under Section 409A of the Code.

9.    Miscellaneous.

(a) No Right to Reelection. Nothing in the Plan shall be deemed to create any obligation on the part of the Board or Bank Board to nominate any of

7

its members for reelection by the Company’s stockholders, nor confer upon any Non-Employee Director the right to remain a member of the Board or Bank Board or an Advisory Director for any period of time, or at any particular rate of compensation.

(b) Unfunded Plan.

(i) Generally. This Plan is unfunded. Amounts payable under the Plan will be satisfied solely out of the general assets of the Bank subject to the claims of the Bank’s creditors, except to the extent the Company determines to create a Rabbi Trust to hold assets to satisfy any amounts due participants under this Plan.

(ii) Deferred Benefits. A Deferred Benefit represents at all times an unfunded and unsecured contractual obligation of the Company and each Non-Employee Director or beneficiary will be a general unsecured creditor of the Bank. No Non-Employee Director, beneficiary or an other person shall have any interest in any fund or in any specific asset of the Bank by reason of any amount credited to him hereunder, nor shall any Non-Employee Director, beneficiary or any other person have any right to receive any distribution under the Plan except as, and to the extent, expressly provided in the Plan.

(c) Other Compensation Arrangements. Benefits received by a Non-Employee Director pursuant to the provisions of the Plan shall not be included in, nor have any effect on, the determination of benefits under any other arrangement provided by the Company.

(d) Securities Law Restrictions. All certificates for shares of Common Stock delivered under the Plan shall be subject to such stock-transfer orders and other restrictions as the Company may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission or any exchange upon which the Common Stock is then listed, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. No shares of Common Stock shall be issued hereunder unless the Company shall have determined that such issuance is in compliance with, or pursuant to an exemption from, all applicable federal and state securities laws.

(e) Expenses. The costs and expenses of administering the Plan shall be borne by the Bank.

(f) Applicable Law. Except as to matters of federal law, the Plan and all actions taken thereunder shall be governed by and construed in accordance

8

with the laws of the State of Texas without giving effect to conflicts of law principles.

(g) Effective Date. The Plan shall be effective as of January 1, 2002, with amendments effective as of November 5, 2003. This second amendment and restatement of the Plan shall be effective January 1, 2005, and shall be effective only with respect to .amounts deferred and vested on or after January 1, 2005. Therefore, amounts deferred and vested under the Plan prior to January 1, 2005 shall not be subject to the provisions of this second amendment and restatement but shall be subject to the provisions of the Plan in place prior to such amendment and restatement.

(h) Section 409A. This Plan is intended to meet the requirements of Section 409A of the Code, and shall be administered in a manner that is intended to meet those requirements and shall be construed and interpreted in accordance with such intent. To the extent that an award or payment, or the settlement or deferral thereof, is subject to Section 409A of the Code, except as the Committee otherwise determines in writing, the award shall be granted, paid, settled or deferred in a manner that will meet the requirements of Section 409A of the Code, including regulations or other guidance issued with respect thereto, such that the grant, payment, settlement or deferral shall not be subject to the excise tax applicable under Section 409A of the Code. Any provision of this Agreement that would cause the award or the payment, settlement or deferral thereof to fail to satisfy Section 409A of the Code shall be amended to comply with Section 409A of the Code on a timely basis, which may be made on a retroactive basis, in

9

EX-10.4

EXHIBIT 10.4

SIXTH AMENDMENT

TO THE

ZIONS BANCORPORATION PAYSHELTER 401(k)

AND EMPLOYEE STOCK OWNERSHIP PLAN

This Sixth Amendment to the Zions Bancorporation Payshelter 401(k) and Employee Stock Ownership Plan (the “Plan”) is made and entered into this 31st day of July, 2006, by the Zions Bancorporation Benefits Committee (“Benefits Committee”) for and on behalf of Zions Bancorporation (the “Employer”).

W  I  T  N  E  S  S  E  T  H:

WHEREAS, the Employer has heretofore entered into the Plan, which Plan has been amended and restated in its entirety effective for the Plan Year commencing on January 1, 2003, and for all Plan Years thereafter, and

WHEREAS, the Employer has reserved the right to amend the Plan in whole or in part; and

WHEREAS, the Committee, for and on behalf of the Employer and consistent with the power and authority granted to it, and in anticipation of the merger of the Amegy Bancorporation 401(k) Plan into the Plan and the transfer of Plan record keeping and trustee responsibilities to Fidelity Management Trust Company, now desires to amend the Plan in the following particulars: to permit the purchase of employer securities by Plan participants, to permit the limit on participant loan amounts to take into account certain employer securities in the participant’s account, to allow immediate diversification of

certain employer securities, and to provide for determination of vesting on an elapsed time, rather than year of service, basis;

NOW THEREFORE, in consideration of the foregoing premises the Committee adopts the following amendments to the Plan (amended language is marked in bold italics):

(Purchase of employer securities by Plan participants)

1. The first paragraph of Section 6.06 is amended to read as follows:

6.06 Participant Diversification of Investments: Except as specifically provided in Section 6.03(e) and in this Section 6.06, the Plan does not permit individual direction of investment by Participants of their Employer Securities Accounts. Effective January 1, 2007, individual direction of investment by Participants of their Employer Securities Account is permitted as provided in this Section and in Sections 18.02 and 18.06.

2. Section 18.02(a) is amended to read as follows:

(a) Subject to Section 18.06(e), no Participant shall direct investment into or out of Employer Securities in any Account. Effective January 1, 2007, this restriction shall apply only with respect to Employer Securities in the Employer Non-Elective Contribution Account.

3. Section 18.06(e) is amended to read as follows:

(e) A Participant may not direct (except as provided in Section 6.03(e)) any investment into the Employer Securities Account or (except as provided in Section 6.06) the liquidation or sale of any Employer Securities in that Account. Effective January 1, 2007, a Participant may direct investment into the Employer Securities Account from any other sub-account in the Plan, with the exception of the Dividend

2

Account, which shall continue to be subject to the rules in Section 18.04.

(Participant loan amount limits to take into account certain employer securities in the participant’s account)

4. Section 20.03(a) is amended in read as follows:

(a) Fifty percent (50%) of the Vested Interest in his Plan Accounts (including any Rollover Accounts, but excluding his Employer Securities Account; effective January 1, 2007, excluding only his Employer Non-Elective Contribution Account and his Dividend Account); or

(Immediate diversification of certain employer securities)

5. Section 6.06(e)(1) is amended to read as follows:

(1) A Participant who has completed at least five (5) Years of Vesting Service, regardless of Age or the number of years of participation in the Plan, may direct diversification into the Segregated Investment Account of up to one hundred percent (100%) of the Participant’s Employer Securities Account, except that portion in the Employer Securities Account attributable to Employer Non-Elective Contributions and dividends thereon. Effective January 1, 2007, the five (5) Years of Vesting Service requirement shall no longer apply.

(Determination of Vesting Service on an Elapsed Time Basis)

6. Section 3.05 is amended to read as follows:

3.05 “One Year Break in Service” shall mean a twelve (12) consecutive month period during which an Employee has not completed more than five hundred (500) Hours of Service, regardless of whether the Employee has incurred a Termination of Employment. For purposes of vesting, such twelve (12) consecutive month periods shall be measured on the same basis as Years of Vesting Service. Effective January 1, 2006, except as otherwise provided in Section 3.13, the provisions of this Section shall no longer apply for purposes of determining Years of Vesting Service. For purposes of eligibility to participate, the Plan shall not apply any break in service rule. The following types of absence shall not constitute a One-Year Break in Service:

7. Section 3.08 is amended to read as follows:

3

3.08 “Vesting Computation Period” shall mean the twelve (12) consecutive month period used to measure Years of Vesting Service and Breaks in Service for purposes of vesting. The twelve (12) consecutive month period used for the Vesting Computation Period shall be the Plan Year. Effective January 1, 2006, except as otherwise provided in Section 3.13, the provisions of this Section shall no longer apply for purposes of determining Vesting Service.

8. Section 3.10 is amended to read as follows:

3.10 “Year of Vesting Service” shall mean:

(a) for Plan Years commencing prior to January 1, 2002, a Vesting Computation Period during which an Employee has completed at least one (1) Hour of Service. For Plan Years commencing on or after January 1, 2002, “Year of Vesting Service” shall mean a Vesting Computation Period during which an Employee has completed at least one thousand (1000) Hours of Service. Subject to Section 11.05 a Participant’s Years of Vesting Service shall be determined based on all Vesting Computation Periods containing or beginning after his Employment Commencement Date or Re-employment Commencement Date, provided that service prior to the date an Employee has attained Age 18 shall not be taken into account. Any individual who was a Leased Employee and who subsequently becomes an Eligible Employee shall be credited with all Years of Service as a Leased Employee for purposes of determining Years of Vesting Service. Effective January 1, 2006, except as otherwise provided in Section 3.13, the provisions of this sub-Section (a) shall no longer apply for purposes of determining Years of Vesting Service.

(b) with respect to a Merged Employee for Plan Years commencing prior to the Merger Date, a calendar year during which the Merged Employee has completed at least one (1) hour of service for the Merged Employer. For Plan Years commencing on or after the Merger Date, “Year of Vesting Service” shall mean a Vesting Computation Period during which the Merged Employee completes at least one thousand (1000) Hours of Service. Effective January 1, 2006, except as otherwise provided in Section 3.13, the preceding sentence shall no longer apply and “Years of Vesting Service” after the Merger Date shall be credited to a Merged Employee as provided in Section 3.13. All creditable Years of Vesting Service determined under the above rules for a Merged Employee shall be credited under this Plan as of the Merged Employee’s Employment Commencement Date. For purposes of this Section 3.10(b):

4

(1) “Merged Employee” shall mean an Employee who immediately prior to his Employment Commencement Date, was employed by a Merged Employer.

(2) “Merged Employer” shall mean an entity which was acquired by (whether as a stock or asset acquisition) or merged into the Plan Sponsor or another Employer who has adopted this Plan.

(3) “Merger Date” shall mean the date designated in any agreement or contract of merger, sale or acquisition as the date on which the acquisition of the Merged Employer by the Plan Sponsor or Employer is considered complete.

9. Article III is amended by adding a new Section 3.13 at the end thereof to read as follows:

3.13 Elapsed Time Method for Determining Years of Vesting Service. Effective January 1, 2006, the Plan adopts the Elapsed Time method for determining Years of Vesting Service. This method of counting Service does not track actual Hours of Service worked by an Employee, but instead measures the length of time an individual is an Employee of a Zions Employer.

(a) In determining Years of Vesting Service for an Employee, the following shall apply:

(1) An Employee’s Service taken into account for purposes of vesting shall be the time period beginning with the Employee’s Employment Commencement Date and ending on the date the Employee incurs a Termination of Employment.

(2) An Employee who incurs a Termination of Employment by reason of resignation, discharge or retirement and who then performs an Hour of Service within twelve (12) months of that date will be credited with Service for the period in which he was not employed. An Employee who is absent for any other reason and then resigns, is discharged or retires and who preforms an Hour of Service within twelve (12) months of his initial absence will be credited with Service for the period in which he was not employed, provided the service is not counted under the first sentence of this subsection. An Employee who is absent from Service with

5

the Employer for over twelve (12) months shall receive no credit for any absence following the date the Employee incurs the Termination of Employment.

(b) In determining an Employee’s Years of Vesting Service fractional years will be rounded to the nearest one twelfth of a year. Periods of Service will be based on full calendar months, crediting an Employee with a full month if the Employee works at least one (1) Hour of Service during the month. An Employee with more than one period of Service will have all such periods aggregated and the Employee’s total Service will be used for purposes of determining Years of Vesting Service.

(c) For the Plan Year commencing January 1, 2006 only, the Plan shall credit Vesting Service according to the following rules:

(i) For each Employee of a Zions Employer who was employed by the Zions Employer on December 31, 2005, and continued to be employed on January 1, 2006, the Plan shall either apply the rules of this Section 3.13, treating January 1, 2006 as the Employment Commencement Date, or apply the previous vesting credit rules of this Plan without regard to this Section 3.13, crediting the Employee with Vesting Service credit according to the method which provides the greater credit.

(ii) For each Employee of a Zions Employer whose Employment Commencement Date was after January 1, 2006, but prior to July 24, 2006, the Plan shall either apply the rules of this Section 3.13, or apply the previous vesting credit rules of this Plan without regard to this Section 3.13, crediting the Employee with Vesting Service credit according to the method which provides the greater credit.

(iii) For each Employee of a Zions Employer whose Employment Commencement Date is after July 23, 2006, the Plan shall apply the rules of this Section 3.13 only.

10. This Sixth Amendment shall be generally effective for the Plan Year commencing January 1, 2006, and for Plan Years commencing after that date, however

6

each provision of this Sixth Amendment with a specified effective date shall become effective as of that date.

4. In all other respects the Plan is ratified and approved.

IN WITNESS WHEREOF, Zions Bancorporation Benefits Committee has caused this Sixth Amendment to the Plan to be duly executed as of the date and year first above written.

ZIONS BANCORPORATION BENEFITS COMMITTEE
By:	/s/  Thomas E. Laursen
Its:

7

EX-31.1

EXHIBIT 31.1

C E R T I F I C A T I O N

Principal Executive Officer

I, Harris H. Simmons, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Zions Bancorporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    August 9, 2006 /s/ Harris H. Simmons

Harris H. Simmons, Chairman, President

and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

C E R T I F I C A T I O N

Principal Financial Officer

I, Doyle L. Arnold, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Zions Bancorporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    August 9, 2006 /s/ DOYLE L. ARNOLD

Doyle L. Arnold, Vice Chairman and

Chief Financial Officer

EX-32

EXHIBIT 32

C E R T I F I C A T I O N

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. §1350, the undersigned officers of Zions Bancorporation (the “Company”) hereby certify that, to the best of their knowledge, the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2006 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 (15 U. S. C. 78m) and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2006	/s/ HARRIS H. SIMMONS
	Name:	Harris H. Simmons
	Title:	Chairman, President and Chief Executive Officer
	/s/ DOYLE L. ARNOLD
	Name:	Doyle L. Arnold
	Title:	Vice Chairman and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.