18. COMMITMENTS, GUARANTEES, CONTINGENT LIABILITIES, AND RELATED PARTIES

Commitments and Guarantees

We use certain derivative instruments and other financial instruments in the normal course of business to meet the financing needs of our customers, to reduce our own exposure to fluctuations in interest rates, and to make a market in U.S. Government, agency, corporate, and municipal securities. These financial instruments involve, to varying degrees, elements of credit, liquidity, and interest rate risk in excess of the amount recognized in the balance sheet. Derivative instruments are discussed in Notes 8 and 21.

Contractual amounts of the off-balance sheet financial instruments used to meet the financing needs of our customers are as follows:


	December 31,
*(In thousands)*	2011		2010

Commitments to extend credit	$	12,541,278	$	11,509,212
Standby letters of credit:
Financial		914,986		921,257
Performance		165,298		185,854
Commercial letters of credit		134,462		46,627

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. The amount of collateral obtained, if deemed necessary by us upon extension of credit, is based on our initial credit evaluation of the counterparty. Types of collateral vary, but may include accounts receivable, inventory, property, plant and equipment, and income-producing properties.

While establishing commitments to extend credit creates credit risk, a significant portion of such commitments is expected to expire without being drawn upon. As of December 31, 2011, $4.4 billion of commitments expire in 2012. We use the same credit policies and procedures in making commitments to extend credit and conditional obligations as we do for on-balance sheet instruments. These policies and procedures include credit approvals, limits, and monitoring.

We issue standby and commercial letters of credit as conditional commitments generally to guarantee the performance of a customer to a third party. The guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Standby letters of credit include remaining commitments of $778 million expiring in 2012 and $302 million expiring thereafter through 2027. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. We generally hold marketable securities and cash equivalents as collateral supporting those commitments for which collateral is deemed necessary. At December 31, 2011, the Company had recorded approximately $12.9 million as a liability for these guarantees, which consisted of $7.7 million attributable to the reserve for unfunded lending commitments and $5.2 million of deferred commitment fees.

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.

At December 31, 2011, we had commitments to make venture and other noninterest-bearing investments of $43.8 million. These obligations have no stated maturity.

The contractual or notional amount of financial instruments indicates a level of activity associated with a particular class of financial instrument and is not a reflection of the actual level of risk. As of December 31, 2011 and 2010, the regulatory risk-weighted values assigned to all off-balance sheet financial instruments and derivative instruments described herein were $4.5 billion and $3.9 billion, respectively.

At December 31, 2011, we were required to maintain cash balances of $27.3 million with the Federal Reserve Banks to meet minimum balance requirements in accordance with Federal Reserve Board regulations.

As of December 31, 2011, the Parent has guaranteed approximately $300 million of debt of affiliated trusts issuing trust preferred securities, as discussed in Note 13.

Leases

We have commitments for leasing premises and equipment under the terms of noncancelable capital and operating leases expiring from 2012 to 2052. Premises leased under capital leases at December 31, 2011 were $1.7 million and accumulated amortization was $1.1 million. Amortization applicable to premises leased under capital leases is included in depreciation expense.

Future aggregate minimum rental payments under existing noncancelable operating leases at December 31, 2011 are as follows:


*(In thousands)*

2012	$	46,423
2013		46,097
2014		40,829
2015		37,147
2016		34,934
Thereafter		154,680

	$	360,110

Future aggregate minimum rental payments have been reduced by noncancelable subleases as follows: $1.9 million in 2012, $2.1 million in 2013, $1.5 million in 2014, $1.2 million in 2015, $1.3 million in 2016, and $2.7 million thereafter. Aggregate rental expense on operating leases amounted to $57.9 million in 2011, $59.7 million in 2010, and $59.2 million in 2009.

Legal Matters

We are subject to litigation in court and arbitral proceedings, as well as proceedings, investigations, examinations and other actions brought or considered by governmental and self-regulatory agencies. At any given time, such legal matters may relate to lending, deposit and other customer relationships, vendor and contractual issues, employee matters, intellectual property matters, personal injuries and torts, regulatory and legal compliance, and other matters. Most matters relate to individual claims, but we are also subject to putative class action claims and similar broader claims.

Current putative class actions include the following:

•

three complaints relating to allegedly wrongful acts in our processing of overdraft fees on debit card transactions,

Barlow, et al. v. Zions First National Bank and Zions Bancorporation, pending in the United States District Court for the District of Utah,

Sadlier, et al. v. National Bank of Arizona, pending in the Superior Court for the State of Arizona, County of Maricopa, and

Starr, et al. v. California Bank & Trust, pending in the Superior Court for the State of California at San Diego;

•

a complaint relating to our banking relationships with customers that allegedly engaged in wrongful telemarketing practices, Reyes v. Zions First National Bank, et al., pending in the United States District Court for the Eastern District of Pennsylvania; and

•

a complaint relating to allegedly wrongful practices relating to our recording of customer and employee phone calls, Hernandez v. California Bank & Trust and Zions Bancorporation, et al., pending in the Superior Court for the State of California at Los Angeles.

Each of these class-action matters is in a relatively early stage, with discovery not yet having been commenced.

At least quarterly, we review outstanding and new legal matters, utilizing then available information. If we determine that a loss from a matter is probable and the amount of the loss can be reasonably estimated, we establish an accrual for the loss. In the absence of such a determination, no accrual is made. Once established, accruals are adjusted to reflect developments relating to the matters.

In our review, we also assess whether we can determine the range of reasonably possible losses for significant matters. Because of the difficulty of predicting the outcome of legal matters, discussed subsequently, we are able to estimate such a range only for a limited number of matters. We currently estimate the aggregate range of reasonably possible losses for those matters to be from $3 million to $75 million, including the accrued liability, if any, related to those matters. This estimated range of reasonably possible losses is based on information currently available as of December 31, 2011. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate. Those matters for which an estimate is not possible are not included within this estimated range and, therefore, this estimated range does not represent our maximum loss exposure.

Based on our current knowledge, we believe that our current estimated liability for litigation and other legal actions and claims, reflected in our accruals and determined in accordance with ASC 450-20, Loss Contingencies, is adequate and that liabilities in excess of the amounts currently accrued, if any, arising from litigation and other legal actions and claims for which an estimate as previously described is possible, will not have a material impact on our financial condition, results of operations, or cash flows. However, in light of the significant uncertainties involved in these matters, and the very large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to our results or cash flows for any given reporting period.

Any estimate or determination relating to the future resolution of litigation, arbitration, governmental or self-regulatory examinations, investigations or actions or similar matters is inherently uncertain and involves significant judgment. This is particularly true in the early stages of a legal matter, when legal issues and facts have not been well articulated, reviewed, analyzed, and vetted through discovery, preparation for trial or hearings, substantive and productive mediation or settlement discussions, or other actions. It is also particularly true with respect to class action and similar claims involving multiple defendants, matters with complex procedural requirements or substantive issues or novel legal theories, and examinations, investigations and other actions conducted or brought by governmental and self-regulatory agencies in which the normal adjudicative process is not at play. Accordingly, we usually are unable to determine whether a favorable or unfavorable outcome is remote, reasonably likely, or probable, or to estimate the amount or range of a probable or reasonably likely loss, until relatively late in the course of a legal matter, sometimes not until a number of years have elapsed. Accordingly, our judgments and estimates relating to claims will change from time to time in light of developments and actual outcomes will differ from our estimates. These differences may be material.

Related Party Transactions

We have no material related party transactions requiring disclosure. In the ordinary course of business, the Company and its subsidiary banks extend credit to related parties, including executive officers, directors, principal shareholders, and their associates and related interests. These related party loans are made in compliance with applicable banking regulations under substantially the same terms as comparable third-party lending arrangements.