A Message from Our CEO, David Blackford

July 17, 2008

Dear Valued Customer:

The recent increased focus on the health of U.S. financial institutions has understandably raised concerns among bank depositors. I would like to take this opportunity to reassure you that Zions Bancorporation (our parent company) and California Bank & Trust continue to demonstrate strong financial performance. In fact, Zions Bancorporation just announced this afternoon that the bank is profitable and well capitalized. The full earnings release is available on our Parent Company’s Web site by clicking here.

As CEO of CB&T, I’d like to reiterate that our bank is financially solid despite operating in what has been recognized as an extremely challenging economic environment. Here are a few key measurements that demonstrate this:

CB&T continues to generate positive earnings. 

As reported on our FDIC Call Reports, the bank realized net income of $22.3 million in the first quarter and $25.1 million in the second quarter for a total of $47.4 million and a Return on Assets of 0.93% for the first six months of 2008 - solid results, especially in this economy.

CB&T is “Well-Capitalized” under regulatory standards.

Regulatory agencies set standards for banks in terms of capital ratios. The table below shows that CB&T’s ratios are comfortably above the regulatory “Well-Capitalized” levels, the highest capital ratio classification.

In addition, our capital levels also compare favorably to other strong, well-regarded financial institutions.

The CB&T loan portfolio is well diversified.

Many of the problems that we hear about in the financial services industry revolve around specialized mortgage loans and, in particular, sub-prime mortgage and negative amortization loans. CB&T did not make any of these types of loans. More importantly, we have a well diversified, conservatively underwritten loan portfolio.

In summary, as Harris Simmons, the Chairman and CEO of Zions Bancorporation, indicated today: our core business is strong, our balance sheet remains healthy and our net credit costs remain very reasonable compared to the industry.

Thank you for choosing to bank with CB&T and for your continued confidence in our bank. Our employees work hard every day to make sure your money is safe and your trust in us is well-founded.

Sincerely,

David Blackford
Chief Executive Officer