ZIONS BANCORPORATION REPORTS 2008 FOURTH QUARTER LOSS DRIVEN LARGELY BY NONCASH GOODWILL IMPAIRMENT - Company Bolstered Loan Loss Reserves, Strengthened Capital and Liquidity, And Originated $2.7 Billion in New Loans

Las Vegas, Nev.
January 26, 2009

LAS VEGAS, January 26, 2009 Nevada State Bank's parent company, Zions Bancorporation (Nasdaq: ZION) ("Zions" or "the Company") today reported a fourth quarter loss from core banking operations of $0.32 per diluted common share, excluding noncash charges from goodwill impairment of $2.97 per diluted share and impairment and valuation losses on securities of $1.07 per diluted share. Including these charges, the fourth quarter net loss applicable to common shareholders was $498.1 million, or $4.36 per diluted share. The Company also built its reserve for loan losses by $105.5 million in excess of actual net loan charge-offs.

"In what most observers agree is the most difficult economic environment in over half a century, we have strengthened our balance sheet by building record high levels of capital and liquidity," said Harris H. Simmons, chairman and chief executive officer. "The goodwill impairment has no impact on regulatory and tangible capital ratios, and reflects in part the fact that market values of all banks are significantly lower in current highly stressed markets." Simmons added, "While this is a challenging environment for Zions and the industry, we continue to successfully extend new credit and serve our customers. In fact, we extended $4.6 billion of credit in the fourth quarter, of which $2.7 billion were new loans, in our continued effort to make credit available to credit-worthy individuals and businesses. This, in turn, will help them weather this economic storm and strengthen the economy."

Fourth Quarter 2008 Highlights

For the year 2008, the Company’s core banking operations made $2.20 per diluted share, excluding noncash charges from goodwill impairment of $3.11 per diluted share and impairment and valuation losses on securities of $1.75 per diluted share. Including these charges, the 2008 net loss applicable to common shareholders was $290.7 million, or $2.66 per diluted share.

Loans
On-balance-sheet net loans and leases were $41.9 billion at December 31, 2008, an increase of approximately $2.8 billion or 7.1% from $39.1 billion at December 31, 2007, and were essentially unchanged from the balance at September 30, 2008. For both the year-over-year and quarterly comparisons, net growth in commercial and industrial loans, consumer loans, and commercial real estate term loans was offset by pay-downs and charge-offs of construction and land development loans.

Deposits
Average total deposits for the fourth quarter of 2008 increased $3.2 billion or 8.8% to $39.6 billion compared to $36.4 billion for the fourth quarter of 2007, and increased $2.3 billion or 24.2% annualized compared to $37.3 billion for the third quarter of 2008. Most of the increase in deposits for the quarter was in brokered money market and other brokered deposits; the growth in these deposits was used primarily to reduce short-term Federal Home Loan Bank and other borrowings by $2.7 billion to $2.0 billion at December 31, 2008.

Net Interest Income
The net interest margin was 4.20% for the fourth quarter of 2008 compared to 4.27% for the fourth quarter of 2007 and 4.13% for the third quarter of 2008. The increased net interest margin for the fourth quarter of 2008 compared to the third quarter of 2008 was driven primarily by the capital investment from the U.S. Treasury, reduced deposit rates, and significantly lower borrowing costs.

Net interest income for the fourth quarter of 2008 increased $29.5 million or 6.2% to $508.4 million compared to $478.9 million for the fourth quarter of 2007, and increased $16.4 million or 13.4% annualized compared to $492.0 million for the third quarter of 2008.

Impairment Loss on Goodwill
The Company recognized an impairment loss on goodwill during the fourth quarter of $353.8 million, or $2.97 per diluted share. Substantially all of this loss resulted from impairment of all of the goodwill at three subsidiary bank reporting segments – National Bank of Arizona, Nevada State Bank, and Vectra Bank Colorado. This impairment loss reflects the Company’s annual impairment testing as of October 1, 2008, as well as an update to December 31, 2008 due to continued market deterioration in the fourth quarter, and is a noncash accounting adjustment to the Company’s balance sheet that does not affect regulatory and tangible capital ratios.

Asset Quality
Nonperforming assets were $1,140.5 million at December 31, 2008 compared to $283.9 million at December 31, 2007 and $924.4 million at September 30, 2008. The increase was driven primarily by deterioration in residential real estate acquisition, development and construction exposures in the Southwest, and by continued weakening in Utah residential construction and commercial and industrial portfolios. The ratio of nonperforming assets to net loans and leases and other real estate owned was 2.71% at December 31, 2008 compared to 0.73% at December 31, 2007 and 2.20% at September 30, 2008.

Net loan and lease charge-offs for 2008 were $393.7 million or 0.96% of average loans. Net loan and lease charge-offs for the fourth quarter of 2008 were $179.7 million or 1.71% annualized of average loans. This compares with $26.7 million or 0.28% annualized of average loans for the fourth quarter of 2007 and $95.3 million or 0.91% annualized of average loans for the third quarter of 2008. The increase in charge-offs largely was driven by declining collateral values on residential acquisition, development, and construction loans in the Southwest and in Utah.

The provision for loan losses was $285.2 million for the fourth quarter of 2008 compared to $70.0 million for the fourth quarter of 2007 and $156.6 million for the third quarter of 2008. The provision for the fourth quarter of 2008 was 2.72% annualized of average loans and was $105.5 million in excess of net loan and lease charge-offs.

The allowance for loan losses as a percentage of net loans and leases was 1.64% at December 31, 2008 compared to 1.18% at December 31, 2007 and 1.45% at September 30, 2008. The combined allowance for loan losses and the reserve for unfunded lending commitments was $737.9 million, or 1.76% of net loans and leases at December 31, 2008, compared to 1.23% at December 31, 2007 and 1.51% at September 30, 2008.

Investment Securities
The Company recognized other-than-temporary impairment (“OTTI”) and valuation losses during the fourth quarter of 2008 of $204.3 million pretax, or $1.07 per diluted share, including securities newly deemed OTTI and additional impairment on securities on which OTTI had been previously recognized. OTTI and valuation losses during the fourth quarter of 2008 consisted of:

Lockhart Funding
At December 31, 2008, Lockhart had total assets of $738 million, with pretax unrealized losses of approximately $119 million. The Company held approximately $412 million at December 31, 2008 of asset-backed commercial paper purchased from Lockhart, compared to $557 million at September 30, 2008 and $493 million at June 30, 2008. The amount of Lockhart commercial paper included in money market investments on the Company’s average balance sheet was approximately $574 million for the fourth quarter of 2008, compared to $597 million for the third quarter of 2008 and $1,091 million for the second quarter of 2008. The Company was able to reduce its purchases of Lockhart commercial paper because Lockhart elected to participate in the Federal Reserve’s Commercial Paper Funding Facility Program.

Noninterest Income
Noninterest income for the fourth quarter of 2008 was $(82.3) million compared to $(20.2) million for the fourth quarter of 2007 and $89.6 million for the third quarter of 2008. The amount for the fourth quarter of 2008 includes impairment and valuation losses on securities of $204.3 million compared to $28.0 million for the third quarter of 2008. Fair value and nonhedge derivative loss was $(5.8) million during the fourth quarter compared to $(26.2) million during the third quarter. The fourth quarter loss includes $2.5 million of income from changes in fair value and interest on nonhedge derivatives, $(4.6) million of counterparty credit adjustments on derivative transactions, and $(3.7) million of other losses. Net equity securities gains (losses) for the fourth quarter were $(14.1) million and include $11.0 million in impairment on Federal Agricultural Mortgage Corporation stock and $3.1 million of net losses on venture capital investments.

Noninterest Expense
Noninterest expense for the fourth quarter of 2008 was $398.2 million compared to $353.0 million for the fourth quarter of 2007 and $372.3 million for the third quarter of 2008. Salaries and employee benefits decreased from the third quarter due to the adjustment of certain employee benefit and variable compensation accruals. Other real estate owned expenses increased $33.0 million (including $22.1 million in charge-downs) compared to the third quarter.

Liquidity Risk Management
As of December 31, 2008, the Company estimates it has available borrowing capacity from the Federal Reserve and the FHLB that approximates one-third of its deposits.

On January 15, 2009, the Company issued $254.9 million of senior floating rate notes due June 21, 2012 at a coupon rate of three-month LIBOR plus 37 basis points. The debt is guaranteed under the FDIC’s Temporary Liquidity Guarantee Program.

Capital Management - Tangible equity increased primarily due to the $1.4 billion preferred capital investment from the U.S. Treasury. The Company’s tangible equity ratio was 8.86% at December 31, 2008 compared to 6.17% at December 31, 2007 and 6.60% at September 30, 2008. The tangible common equity ratio was 5.89% at December 31, 2008 compared to 5.70% at December 31, 2007 and 6.05% at September 30, 2008. At December 31, 2008, estimated regulatory Tier 1 risk-based capital and total risk-based capital were $5,267 million and $7,365 million compared to $3,985 million and $6,073 million at September 30, 2008, respectively. Estimated ratios at December 31, 2008 for Tier 1 risk-based capital and total risk-based capital were 10.52% and 14.71% compared to 8.07% and 12.30% at September 30, 2008, respectively.

Significant changes in Other Comprehensive Income included a $98.3 million increase in unrealized gains on derivative instruments and a net charge of $32.2 million related to the Company’s pension and postretirement plans.

On January 26, 2009, the Board of Directors declared a regular quarterly dividend of $0.04 per common share payable February 25, 2009 to shareholders of record on February 11, 2009. This is a reduction from the prior quarter dividend of $0.32 per common share.

Weighted average common and common-equivalent shares outstanding for the fourth quarter of 2008 were 114,205,587 compared to 106,902,983 for the fourth quarter of 2007 and 108,497,464 for the third quarter of 2008. Common shares outstanding at December 31, 2008 were 115,344,813 compared to 107,116,505 at December 31, 2007 and 115,302,598 at September 30, 2008.

Conference Call Zions will host a conference call to discuss these fourth quarter results at 5:30 p.m. ET this afternoon (January 26, 2009). Media representatives, analysts and the public are invited to listen to this discussion by calling 1-866-700-0161 (international: 617-213-8832) and entering the passcode 37689022, or via on-demand webcast. A link to the webcast will be available on the Zions Bancorporation Web site at www.zionsbancorporation.com. A replay of the call will be available from 9:30 p.m. ET on Monday, January 26, 2009, until midnight ET on Monday, February 2, 2009, by dialing 1-888-286-8010 (international: 617-801-6888) and entering the passcode 55903048. The webcast of the conference call will also be archived and available for 30 days.

Zions Bancorporation is one of the nation's premier financial services companies, consisting of a collection of great banks in select high growth markets. Zions operates its banking businesses under local management teams and community identities through approximately 500 offices in 10 Western and Southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington. The company is a national leader in Small Business Administration lending and public finance advisory services. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to subsidiary banks can be accessed at www.zionsbancorporation.com.

Forward-Looking Information
Statements in this news release 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. 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 this news release. Factors that might cause such differences include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either internationally, nationally or locally in areas in which the Company conducts its operations, including changes in asset-backed commercial paper markets and valuations in structured securities and other assets; changes in governmental policies and programs resulting from general economic and financial market conditions; changes in interest and funding rates; continuing consolidation in the financial services industry; new business or acquisition opportunities; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.

Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the 2007 Annual Report on Form 10-K of Zions Bancorporation filed with the Securities and Exchange Commission ("SEC") and available at the SEC's Internet site (http://www.sec.gov).

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

Nevada State Bank, with assets of $4.0 billion, is the fourth largest commercial bank in Nevada. Established in 1959, it is the oldest state-chartered bank in Nevada with a total of 77 branches statewide. Nevada State Bank is a full-service bank offering a complete range of consumer and business services. For more information on Nevada State Bank, call 702.383.0009 or access www.nsbank.com.