U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
X ACT OF 1934
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For the Quarterly Period Ended June 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
___ ACT OF 1934
For the transition period from to
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Commission File Number: 0-27126
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First Colorado Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Colorado 84-1320788
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
215 S. Wadsworth Blvd., Lakewood, CO 80226
- ------------------------------------------ ----------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (303) 232-2121
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N/A
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Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Sections 13 or 15(d) of the Securities Exchange
Act of 1934 subsequent to 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
--- ---
Number of shares outstanding of common stock
as of August 7, 1998
$0.10 Par Value Common Stock 17,164,766
- --------------------------------------- ------------------------------
Class Shares Outstanding
<PAGE>
FIRST COLORADO BANCORP, INC.
INDEX
Page Number
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PART I - CONSOLIDATED FINANCIAL INFORMATION
Consolidated Statements of Financial Condition
at June 30, 1998 (unaudited) and
December 31, 1997 1
Consolidated Statements of Operations and
Comprehensive Income for the Three and Six Months
Ended June 30, 1998 and 1997 (unaudited) 2
Consolidated Statements of Stockholders'
Equity for the Period from January 1, 1997 to
December 31, 1997, and for the Period
from January 1, 1998 to June 30, 1998 (unaudited) 3
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1998 and 1997 (unaudited) 4 - 6
Notes to Consolidated Financial Statements (unaudited) 7 - 9
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 17
PART II - OTHER INFORMATION 18 - 19
SIGNATURES 20
EXHIBIT
<PAGE>
First Colorado Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition
(dollars in thousands)
<TABLE>
<CAPTION>
06/30/98 12/31/97
-------- --------
(unaudited)
<S> <C> <C>
Assets
Cash and due from banks............................................ $ 26,108 $ 27,970
Federal funds sold and other interest-earning assets............... 59,568 16,687
Investment Securities:
Held-to-maturity.............................................. 77,160 73,944
Available-for-sale, at market value........................... 757 5,951
Mortgage-backed securities, net:
Held-to-maturity.............................................. 171,867 209,543
Available-for-sale, at market value........................... 5,696 6,839
Loans receivable, net.............................................. 1,155,580 1,164,602
Accrued interest receivable........................................ 8,234 8,356
Office properties and equipment, net............................... 23,148 23,606
Federal Home Loan Bank stock....................................... 11,701 11,277
Real estate owned.................................................. 166 225
Core deposit intangible/goodwill................................... 4,040 4,251
Other assets....................................................... 2,605 2,775
------------ ------------
Total assets $ 1,546,630 $1,556,026
============ ============
Liabilities
Deposits........................................................... $ 1,195,067 $ 1,182,727
Advances from Federal Home Loan Bank............................... 107,410 122,410
Other borrowed money............................................... 4,097 4,479
Advances by borrowers for taxes and insurance...................... 1,487 8,369
Current/deferred income taxes...................................... 3,528 4,720
Other liabilities.................................................. 16,885 24,012
------------ ------------
Total liabilities............................................. 1,328,474 1,346,717
Stockholders' Equity
Preferred stock, $0.10 par value (25,000,000 shares
authorized; none issued) -- --
Common stock, $0.10 par value (50,000,000 shares
authorized; 20,134,256 shares issued
at June 30, 1998 and December 31, 1997;
16,894,636 and 16,808,372 shares
outstanding at June 30, 1998 and
December 31, 1997, respectively).............................. 2,013 2,013
Additional paid-in capital......................................... 157,787 155,047
Treasury stock (3,239,620 and 3,325,884 shares,
respectively, at cost)........................................ (52,340) (53,562)
Unearned ESOP shares............................................... (10,021) (10,523)
Unearned MRP/MSBP shares........................................... (3,324) (3,338)
Accumulated other comprehensive income (net of tax)................ (469) (215)
Retained earnings, partially restricted............................ 124,510 119,887
------------ ------------
Total stockholders' equity.................................... 218,156 209,309
------------ ------------
Total liabilities and stockholders' equity.................... $ 1,546,630 $1,556,026
============ ============
</TABLE>
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<PAGE>
First Colorado Bancorp, Inc. and Subsidiary
Consolidated Statements of Operations and Comprehensive Income
(Dollars in Thousands, except per share amounts) (unaudited)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
Interest income:
<S> <C> <C> <C> <C>
Loans $ 22,700 21,530 45,234 42,596
Mortgage-backed securities 2,996 3,305 6,363 7,659
Investment securities 1,317 1,291 2,665 2,496
Other 525 107 808 197
----------- ----------- ----------- -----------
Total interest income 27,538 26,233 55,070 52,948
----------- ----------- ----------- -----------
Interest expense:
Deposits 12,869 12,738 25,698 25,134
Borrowed funds 1,879 2,194 3,888 4,265
----------- ----------- ----------- -----------
Total interest expense 14,748 14,932 29,586 29,399
----------- ----------- ----------- -----------
Net interest income 12,790 11,301 25,484 23,549
Provision (credit) for loan losses (316) 335 (179) 554
----------- ----------- ----------- -----------
Net interest income after provision (credit) for loan losses 13,106 10,966 25,663 22,995
----------- ----------- ----------- -----------
Noninterest income:
Fees and service charges 1,740 1,260 3,291 2,458
Gain on sale of loans, net 144 63 195 99
Net income from real estate operations 78 87 92 138
Rental income 49 45 98 94
----------- ----------- ----------- -----------
Total noninterest income 2,011 1,455 3,676 2,789
----------- ----------- ----------- -----------
Noninterest expense:
Compensation 5,694 3,382 9,540 6,595
Occupancy 1,100 1,021 2,179 1,962
Credit for losses on real estate owned (69) (19) (73) --
Professional fees 210 154 400 334
Advertising 278 249 490 451
Printing, supplies and postage 251 291 580 585
FDIC premiums 186 182 371 360
Other, net 1,057 758 1,815 1,415
----------- ----------- ----------- -----------
Total noninterest expense 8,707 6,018 15,302 11,702
----------- ----------- ----------- -----------
Earnings before income taxes 6,410 6,403 14,037 14,082
Income tax expense 2,210 2,378 5,031 5,242
----------- ----------- ----------- -----------
Net earnings $ 4,200 4,025 9,006 8,840
=========== =========== =========== ===========
Other comprehensive income, net of tax:
Unrealized holding gain (loss) on securities arising
during the period 143 (120) (254) (176)
----------- ----------- ----------- -----------
Comprehensive income $ 4,343 3,905 8,752 8,664
=========== =========== =========== ===========
Earnings per common share $ 0.27 0.27 0.57 0.57
=========== =========== =========== ===========
Earnings per common share, assuming dilution $ 0.25 0.26 0.55 0.56
=========== =========== =========== ===========
Diluted shares outstanding 16,550,356 15,667,528 16,509,660 15,924,165
</TABLE>
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<PAGE>
FIRST COLORADO BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Period from January 1, 1997 to June 30, 1998
(Activity for the Six Months Ended June 30, 1998 is Unaudited)
(Amounts in Thousands, except Share Amounts)
<TABLE>
<CAPTION>
Accumu-
lated
Common Stock Common MRP/ Other
$0.10 par value Additional Stock Unearned MSBP Compre- Compre-
--------------- Paid-in Treasury ESOP Contra hensive hensive Retained
Shares Amount Capital Shares Shares Account Income Income Earnings Total
------ ------ ------- ------ ------ ------- ------ ------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
January 1, 1997 18,184,108 $2,013 $151,581 $(28,957) $(12,063) $(3,929) $ 365 - $107,614 $216,624
Merger
and acquisition 301,952 - 1,646 4,278 - - - - - 5,924
Exercise of
employee stock
options 61,162 - (661) 866 - - - - - 205
Payment of ESOP
liability - - - - 1,540 - - - - 1,540
Employees' vesting
in ESOP/MRP/MSBP - - 2,481 - - 591 - - - 3,072
Dividends declared
($0.46 per share) - - - - - - - - (7,641) (7,641)
Purchase of
Treasury stock (1,738,850) - - (29,749) - - - - - (29,749)
Unrealized loss on
securities, net - - - - - - (580) $ (580) - (580)
Net earnings - - - - - - - 19,914 19,914 19,914
--------
Comprehensive income - - - - - - 19,334 - -
---------- ------ -------- -------- -------- ------- ------ ======== -------- --------
Balance,
December 31, 1997 16,808,372 2,013 155,047 (53,562) (10,523) (3,338) (215) - 119,887 209,309
Exercise of employee
stock options 86,264 - (675) 1,222 - - - - - 547
Payment of ESOP
liability - - - - 502 - - - - 502
Employees' vesting
in ESOP/MRP/MSBP - - 3,415 - - 14 - - - 3,429
Dividends declared
($0.26 per share) - - - - - - - - (4,383) (4,383)
Unrealized loss on
securities, net - - - - - - (254) (254) - (254)
Net earnings - - - - - - - 9,006 9,006 9,006
--------
Comprehensive income - - - - - - - $ 8,752 - -
---------- ------ -------- -------- -------- ------- ------ ======== -------- --------
Balance,
June 30, 1998 16,894,636 $2,013 $157,787 $(52,340) $(10,021) $(3,324) $ (469) - $124,510 $218,156
========== ====== ======== ======== ======== ======= ====== ======== ========
</TABLE>
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<PAGE>
FIRST COLORADO BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
For the six months ended
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Interest and dividends from loans receivable, mortgage-backed
and other asset-backed securities, and investment securities $ 54,552 52,532
Fees and service charges received 4,320 3,070
Rental income received 98 94
Proceeds from sale of loans held for sale 18,837 5,027
Originations of loans held for sale (18,781) (4,284)
Interest paid (6,616) (6,763)
Cash paid to suppliers and employees (11,743) (11,585)
Income taxes paid (6,117) (5,106)
---------- ----------
Net cash provided by operating activities $ 34,550 32,985
========== ==========
Cash flows from investing activities:
Proceeds from maturities of investment and mortgage-backed
securities available for sale $ 5,200 5,000
Proceeds from maturities of investment and mortgage-backed
securities held to maturity 38,796 27,000
Purchase of investment securities held to maturity (41,913) (38,361)
Principal repayments of mortgage-backed and asset-backed securities 38,182 29,441
Purchase of mortgage-backed and other asset-backed securities
held to maturity 0 (1,719)
Origination of loans receivable (198,435) (152,364)
Net increase in customers' lines of credit (2,979) (4,033)
Principal repayments of loans receivable 210,708 112,692
Proceeds from sales of real estate owned and in judgment 255 629
Proceeds from sale of office properties and equipment 63 31
Purchase of office properties and equipment (594) (1,104)
Other, net 209 141
---------- ----------
Net cash provided (used) by investing activities $ 49,492 (22,647)
========== ==========
</TABLE>
(Continued)
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<PAGE>
FIRST COLORADO BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
For the six months ended
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
Cash flows from financing activities:
Net decrease in deposits $ (10,745) (12,906)
Proceeds of advances from Federal Home Loan Bank 0 154,500
Repayment of advances from Federal Home Loan Bank (15,000) (139,405)
Repayment of bonds payable and other borrowings (380) (183)
Net decrease in advances by borrowers for taxes and insurance (6,882) (6,111)
Purchase of treasury shares 0 (28,067)
Net proceeds from exercised stock options 547 47
Proceeds from ESOP for repayment of debt 502 922
Dividends paid (4,373) (3,292)
Other, net (6,692) (624)
---------- -----------
Net cash used by financing activities (43,023) (35,119)
---------- ----------
Net increase (decrease) in cash and cash equivalents 41,019 (24,781)
Cash and cash equivalents at beginning of period 44,657 49,232
Cash and cash equivalents at end of period $ 85,676 24,451
========== ==========
Reconciliation of net earnings to net cash provided by operating activities:
Net earnings $ 9,006 8,840
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Amortization of premiums and discounts on investments, net 131 961
Gain on sale of investment securities and loans receivable (195) (99)
Amortization of deferred loan origination fee income (244) (327)
Deferred loan origination fee income, net of deferred costs 147 8
Provision (credit) for losses on loans receivable,
federal funds sold,and real estate owned and in judgment (179) 554
Gain on sale of real estate owned, net (48) (70)
Stock dividends from Federal Home Loan Bank (424) (758)
Depreciation and amortization 968 872
Decrease in deferred income taxes (1,034) (9)
Interest expense credited to deposit accounts 23,085 22,645
Amortization of unearned discounts and deferred income (103) (56)
Employee vesting in MRP/MSBP 3,429 0
Decrease in loans held for sale 56 743
Decrease (increase) in accrued interest receivable 122 (236)
Decrease in other assets 90 83
Increase (decrease) in current income taxes payable (52) 145
Decrease in other liabilities (331) (251)
Other, net 126 (60)
---------- -----------
Net cash provided by operating activities $ 34,550 32,985
========== ==========
</TABLE>
(Continued)
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<PAGE>
FIRST COLORADO BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
For the six months ended
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
Noncash investing and financing transactions:
Foreclosure of collateral securing loans, net of reserve $ 148 354
======= =========
Decrease in net unrealized loss on securities
available for sale, net of tax effect $ (254) (176)
======= =========
Deferred tax effect of change in unrealized loss on
securities available for sale $ (158) (108)
======== =========
</TABLE>
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<PAGE>
FIRST COLORADO BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Principles of Consolidation - The consolidated financial statements include
the accounts of First Colorado Bancorp, Inc. (FCB) and its wholly owned
subsidiary, First Federal Bank of Colorado (formerly First Federal Savings
Bank of Colorado). The accounts of First Federal Bank of Colorado (FFB)
include its three wholly owned subsidiaries, First Savings Investment
Corporation (FSIC), First Savings Insurance Services (FSIS), and First
Savings Securities Corporation (FSSC) (collectively, the Bank). All
entities together are collectively referred to as the Company. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
The Company is a Colorado stock corporation organized in September 1995 to
facilitate the conversion of the Bank's holding company (formerly First
Savings Capital, M.H.C.) from the mutual to stock form of ownership and to
acquire and hold all of the capital stock of the Bank. In connection with
the conversion, First Savings Capital, M.H.C., which had owned 66% of the
Bank's common stock, was merged with and into the Bank, and its shares of
the Bank were canceled. On December 29, 1995, the Company issued 6,619,539
shares of its common stock for all of the remaining outstanding shares of
the Bank, and issued and sold 13,403,798 shares of its common stock at a
price of $10.00 per share (collectively, the "Conversion and
Reorganization"). Since 1995, the Company engaged in no significant
business activity other than its ownership of the Bank's common stock.
2. Basis of Presentation - The Consolidated Statement of Financial Condition
as of June 30, 1998, the Consolidated Statements of Operations for the
three and six month periods ended June 30, 1998 and 1997, the Consolidated
Statement of Stockholders' Equity for the six month period ended June 30,
1998, and the Consolidated Statements of Cash Flows for the six month
periods ended June 30, 1998 and 1997, have been prepared by the Company,
without audit, and therefore do not include information or footnotes
necessary for a complete presentation of consolidated financial condition,
results of operations, and cash flows in conformity with generally accepted
accounting principles. It is suggested that these Consolidated Financial
Statements be read in conjunction with the December 31, 1997 Consolidated
Financial Statements and notes thereto included with the Company's Annual
Report. However, in the opinion of management, all adjustments (consisting
of normal recurring adjustments) necessary for the fair presentation of the
consolidated financial statements have been included. The results of
operations for the three and six month periods ended June 30, 1998 are not
necessarily indicative of the results which may be expected for the entire
year or for any other period.
3. Earnings per Share - Earnings per share for the three and six month periods
ended June 30, 1998 and 1997 was calculated based on the number of basic
shares and diluted shares at period end. Stock options are regarded as
common stock equivalents computed using the Treasury Stock method. Shares
acquired by the Employee Stock Ownership Plan (ESOP) are not considered in
the weighted average shares outstanding until shares are committed to be
released to the employees' individual account or have been earned.
See Exhibit 11.
4. Dividends - On June 17, 1998, the Company declared a $0.13 per share cash
dividend on the Company's common stock to shareholders of record on June
30, 1998. The cash dividend was paid on July 17, 1998.
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<PAGE>
5. Recent Accounting Pronouncements - The Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards (SFAS) No. 125,
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities (SFAS 125) and SFAS No. 127, Deferral of the
Effective Date of Certain Provisions of FASB Statement No. 125 (SFAS 127)
in June and December 1996, respectively. SFAS 125 provides accounting and
reporting standards for transfers and servicing of financial assets and
extinguishments of liabilities. It requires entities to recognize servicing
assets and liabilities for all contracts to service financial assets,
unless the assets are securitized and all servicing is retained. The
servicing assets are measured initially at fair values and are amortized
over the estimated useful lives of the servicing assets. In addition, the
impairment of servicing assets is recognized through a valuation allowance.
SFAS 125 also addresses the accounting and reporting standards for
securities lending, dollar-rolls, repurchase agreements and similar
transactions. The Company prospectively adopted SFAS 125 on January 1,
1997. However, in accordance with SFAS 127, the Company deferred adoption
of the standard as it relates to securities lending, dollar-rolls,
repurchase agreements and similar transactions until January 1, 1998. The
adoption of SFAS 125 did not have a material impact on the Company's 1997
consolidated financial statements.
In March 1997, the FASB issued SFAS No. 128, Earnings Per Share (SFAS 128)
which replaced APB Opinion No. 15 related to standards for computing and
presenting earnings per share (EPS) and applies to entities with publicly
held common stock or potential common stock. SFAS 128 replaces the
presentation of primary EPS with a presentation of basic EPS and requires
dual presentation of basic and diluted EPS on the face of the statement of
operations for all entities with complex capital structures. Also, SFAS 128
requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. SFAS 128 is effective for financial statements issued for
periods ending after December 15, 1997, including interim periods. SFAS 128
also requires restatement of all prior period EPS data presented. The
Company adopted SFAS 128 in December 1997, and restated all per share
amounts for prior periods. The adoption of SFAS 128 did not have a material
impact on the Company's reported earnings per share.
In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income
(SFAS 130). SFAS 130, which is effective for fiscal years beginning after
December 15, 1997, establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. Comprehensive income represents the change in equity
of a business enterprise during a period from transactions and other events
from nonowner sources. Comprehensive income is comprised of net income and
other comprehensive income. SFAS 130 does not change the classifications
currently comprising net income. Other comprehensive income is classified
into foreign currency items, minimum pension liability adjustments and
unrealized gains and losses on certain investments in debt and equity
securities. All components of comprehensive income shall be reported in the
period in which they are recognized and be displayed in the financial
statements. The total of other comprehensive income for a period shall be
transferred to a component of equity on a separate line-item. As such, net
unrealized gain (loss) on securities available-for-sale becomes a component
of other comprehensive income upon implementation of SFAS 130. The Company
adopted SFAS 130 in January 1998.
In June 1997, the FASB issued SFAS No. 131, Disclosures about Segments of
an Enterprise and Related Information (SFAS 131). This statement
establishes standards relating to public business enterprises' reporting of
information about operating segments in financial reports issued to
shareholders. It also established standards for related disclosures about
products and services, geographic areas, and major customers. This
statement is effective for financial statements for periods beginning after
December 15, 1997. In the initial year of application, comparative
information for earlier years is to be restated. This statement need not be
applied to interim financial statements in the initial year of application.
SFAS 131 is not expected to change the reporting requirements of the
Company.
-8-
<PAGE>
In January 1997, the SEC issued Release No. 33-7386, which requires
enhanced descriptions of accounting policies for derivative financial
instruments and derivative commodity instruments in the footnotes to
financial statements. The release also requires certain quantitative and
qualitative disclosures outside financial statements about market risks
inherent in market risk sensitive instruments and other financial
instruments. The requirements regarding accounting policy descriptions were
effective for any fiscal period ending after June 15, 1997. However,
because derivative financial and commodity instruments have not materially
affected the Company's consolidated financial position, cash flows or
results of operations, this part of the release does not affect the
Company's 1997 financial statements disclosures. The quantitative and
qualitative disclosures required by the release were initially provided in
the Company's Annual Report on Form 10-K for the year ending December 31,
1997.
6. Reorganization and Merger Agreement with Commercial Federal Corporation -
On March 8, 1998, the Company entered into a Reorganization and Merger
Agreement ("the Agreement") to be acquired by Commercial Federal
Corporation ("Commercial Federal"). Under the terms of the agreement,
Commercial Federal will acquire through a tax-free reorganization all of
the outstanding shares of the Company's common stock in exchange for
Commercial Federal's common stock. The exchange ratio will be determined
based upon the average closing price of Commercial Federal's common stock
during a fifteen consecutive trading day period ending five trading days
prior to closing. The acquisition is subject to regulatory approvals and
the Company's and Commercial Federal's shareholder approval, all of which
have been received. The acquisition is also subject to other conditions and
is expected to close in the third quarter of 1998. Regardless of whether
the proposed acquisition is consummated, the following discussion addresses
the financial condition, results of operation, liquidity and capital
resources and ongoing strategy of the Company.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Colorado Bancorp, Inc. (the "Company") is a Colorado corporation organized
in September 1995 at the direction of the Board of Directors of the First
Federal Bank of Colorado (the "Bank") to facilitate the conversion of First
Savings Capital, M.H.C. (the "Mutual Holding Company") from the mutual to stock
form of ownership and to acquire and hold all of the capital stock of the Bank.
The primary activity of the Company is holding the common stock of the Bank. The
Company is therefore a unitary savings and loan holding company. The Company has
no significant assets other than all of the outstanding shares of Bank Common
Stock, the note evidencing the Company's loan to the Bank's ESOP, and the
portion of the net proceeds retained by the Company from its initial sale of
stock, which have been invested in a loan to the Bank and in deposits in the
Bank, and in a stock repurchase program resulting in the repurchase of 3.7
million shares of Company common stock for $58.9 million (3.2 million shares
with a cost of $52.3 million at June 30, 1998).
-9-
<PAGE>
COMPARISON OF FINANCIAL CONDITION AT
JUNE 30, 1998 AND DECEMBER 31, 1997
The total assets of the Company decreased $9.4 million, or 0.6%, from $1,556.0
million at December 31, 1997 to $1,546.6 million at June 30, 1998. This decrease
is due primarily to a decrease in loans receivable, from $1,164.6 million at
December 31, 1997, to $1,155.6 million at June 30, 1998, a decrease of $9.0
million, or 0.8%. Mortgage-backed securities also decreased, from $216.4 million
at December 31, 1997 to $177.6 million at June 30, 1998, a decrease of $38.8
million, or 17.9%, as did investment securities, decreasing from $79.9 million
at December 31, 1997, to $77.9 million at June 30, 1998, a decrease of $2.0
million, or 2.5%. In addition, cash and due from banks decreased from $28.0
million at December 31, 1997 to $26.1 million at June 30, 1998, a decrease of
$1.9 million, or 6.7%. Offsetting these decreases was an increase in Fed funds
sold and other interest-earning assets of $42.9 million, or 257.0%, from $16.7
million at December 31, 1997 to $59.6 million at June 30, 1998.
Non-performing assets increased by $372,000, or 13.8%, from $2.7 million, or
0.2% of total assets at December 31, 1997, to $3.1 million, or 0.2% of total
assets at June 30, 1998. The increase in non-performing assets occurred
primarily in 1 to 4 family mortgage loan delinquencies.
Liabilities decreased by $18.2 million, or 1.4%, primarily due to a decrease in
advances from the Federal Home Loan Bank of $15.0 million, or 12.3%, from $122.4
million at December 31, 1997, to $107.4 million at June 30, 1998, a decrease in
other liabilities of $7.1 million, or 29.7%, from $24.0 million at December 31,
1997 to $16.9 million at June 30, 1998, and a decrease in advances by borrowers
for taxes and insurance of $6.9 million, or 82.2%, from $8.4 million at December
31, 1997 to $1.5 million at June 30, 1998. Those decreases were offset by an
increase in deposits of $12.3 million, or 1.0%, from $1,182.7 million at
December 31, 1997, to $1,195.0 million at June 30, 1998.
Stockholders' equity increased $8.8 million, or 4.2%, primarily due to net
earnings of $9.0 million for the six months ended June 30, 1998, offset by
dividends declared totaling $4.4 million.
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<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE
THREE MONTHS ENDED JUNE 30, 1998 AND 1997
GENERAL. Net earnings for the three months ended June 30, 1998 increased
$175,000, or 4.3%, to $4.2 million from $4.0 million for the three months ended
June 30, 1997. The increase was primarily due to an increase in the net interest
income after provision (credit) for loan losses, offset by an increase in
compensation expense.
NET INTEREST INCOME. Net interest income increased $1.5 million or 13.2%, from
$11.3 million during the three months ended June 30, 1997 to $12.8 million
during the three months ended June 30, 1998. This increase was primarily the
result of an increase in interest income of $1.3 million, or 5.0%, from $26.2
million for the three months ended June 30, 1997, to $27.5 million for the three
months ended June 30, 1998. This increase was primarily the result of an
increase in interest income on loans receivable from $21.5 million in the three
months ended June 30, 1997 to $22.7 million in the three months ended June 30,
1998, due to an increase in the average portfolio balance of loans receivable,
which increased $71.9 million, or 6.6%, to $1,165.9 million for the three months
ended June 30, 1998, from $1,094.0 million for the three months ended June 30,
1997. The increase in the average portfolio balance of loans receivable resulted
primarily from a strong economy in the Company's market area coupled with an
aggressive program to attract new loan originations in both the mortgage and
nonmortgage portfolios. The increase in interest income from loans receivable
was partially offset by a decrease in interest income on mortgage-backed and
other asset-backed securities (including those available for sale) of $309,000,
or 9.3%, to $3.0 million for the three months ended June 30, 1998, from $3.3
million for the three months ended June 30, 1997, due to the decrease in the
average portfolio balance of $69.9 million, or 27.0%, to $188.9 million for the
three months ended June 30, 1998, from $258.8 million for the three months ended
June 30, 1997. The decrease in the average portfolio balance of mortgage-backed
and other asset-backed securities is due to management's decision to reinvest
the cash flows from these securities in loans receivable. Other interest income
increased as did interest income on investment securities. Other interest income
increased $418,000, or 390.7%, from $107,000 in the three months ended June 30,
1997 to $525,000 in the three months ended June 30, 1998, due primarily to the
increase in the average portfolio balance of $31.9 million, or 507.3%, to $38.2
million for the three months ended June 30, 1998 from $6.3 million for the three
months ended June 30, 1997. This increase was due primarily to increased levels
of repayment activity in the loan portfolio exceeding the amount of new loan
originations. Interest income on investment securities (including those
available for sale) increased slightly, by $26,000, or 2.0%, in the three months
ended June 30, 1998, due primarily to a stable average portfolio balance of
$90.3 million for the three months ended June 30, 1998, and for the three months
ended June 30, 1997, and to an increase of 11 basis points in the average yield
on investment securities for the three months ended June 30, 1998.
The increase in interest income was combined with a decrease in total interest
expense of $184,000, or 1.2%, from $14.9 million for the three months ended June
30, 1997 to $14.7 million for the three months ended June 30, 1998. Interest
paid on borrowed funds decreased, by $315,000, or 14.4% for the three months
ended June 30, 1998, compared to the three months ended June 30, 1997, due to a
$20.3 million decrease in the average balance of Federal Home Loan Bank advances
and other borrowed money for the three months ended June 30, 1998 compared to
the three months ended June 30, 1997, offset by an increase of five basis points
in the cost of borrowings. Interest paid on deposits increased by $131,000, or
1.0%, to $12.9 million for the three months ended June 30, 1998, from $12.7
million for the three months ended June 30, 1997. This increase was due
primarily to an increase in the average balance of the deposits of $38.0
million, or 3.3%, to $1,186.7 million for the three months ended June 30, 1998,
from $1,148.7 million for the three months ended June 30, 1997, offset by a
decrease of ten basis points in the cost of deposits.
11-
<PAGE>
PROVISION (CREDIT) FOR LOSSES ON LOANS. In determining the provision (credit)
for losses on loans, management analyzes, among other things, the Bank's loan
portfolio, market conditions and the Bank's market area. The provision (credit)
for losses on loans decreased by $651,000 for the periods under comparison, from
a provision of $335,000 for the three months ended June 30, 1997 to a credit of
$316,000 for the three months ended June 30, 1998. A majority of the decrease,
$418,000, was due to the recovery in full of a loss reserve established on a
commercial real estate loan, which paid-off in the second quarter of 1998.
Management believes that the allowance for loan losses is adequate at June 30,
1998. There can be no assurances that the allowance will be adequate to cover
losses which may in fact be realized in the future and that additional
provisions will not be required.
NONINTEREST INCOME. Noninterest income increased by $556,000, or 38.2%, from
$1.5 million for the three months ended June 30, 1997 to $2.0 million for the
three months ended June 30, 1998. This increase was primarily the result of an
increase in fees and service charges of $480,000, or 38.1%, and an increase of
$81,000 in the gain on the sale of loans. The increase in fees and service
charges was primarily due to increased fee income from transaction accounts,
including a surcharge on ATM withdrawals instituted in fourth quarter 1997. The
increase in the gain on sale of loans was due primarily to increased volume of
loan sales in the current low interest rate environment.
NONINTEREST EXPENSE. Noninterest expense increased by $2.7 million, or 44.7%,
for the three months ended June 30, 1998 as compared to the three months ended
June 30, 1997. The increase was primarily due to an increase of $2.3 million in
compensation expense and an increase of $299,000 in the other, net, noninterest
expense. Minor changes in other noninterest expense categories also contributed
to the total increase.
The Bank experienced increased compensation costs during the three months ended
June 30, 1998, primarily due to an increase of $167,000 in employee compensation
resulting from increased staffing and to an increase of $2.1 million resulting
from expense recognized on benefit plans (including the purchase of shares of
common stock of the Company by the ESOP in connection with the Conversion and
Reorganization) due to the price appreciation of the fair market value of common
stock in those plans. Furthermore, due to the Agreement to be acquired by
Commercial Federal Corporation, compensation expense due to the Management Stock
Bonus Plan ("MSBP"), whereby various officers and directors of the Bank were
granted restricted stock vesting over a five-year period, increased by $2.0
million, as the provisions of the MSBP accelerated the vesting, thereby
requiring the expense of those shares to be recognized. The increase in other,
net, noninterest expense was due primarily to the accrual of a $250,000
charitable contribution expense to be made in the name of the Company, in
accordance with the Agreement, prior to the consumation of the merger with
Commercial Federal.
INCOME TAX EXPENSE. Federal and state income taxes decreased by $168,000, or
7.1%, for the three months ended June 30, 1998 compared to the three months
ended June 30, 1997, due primarily to tax benefits recognized from the Company's
acquisition of Delta Federal Savings, F.S.B. in October 1997.
-12-
<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
GENERAL. Net earnings for the six months ended June 30, 1998 increased $166,000,
or 1.9% to $9.0 million from $8.8 million for the six months ended June 30,
1997. The increase was primarily due to an increase in the net interest income
after provision (credit) for loan losses, offset by an increase in compensation
expense.
NET INTEREST INCOME. Net interest income increased $1.9 million, or 8.2%, from
$23.6 million during the six months ended June 30, 1997 to $25.5 million during
the six months ended June 30, 1998. This increase was primarily the result of an
increase in interest income of $2.1 million, or 4.0%, from $53.0 million for the
six months ended June 30, 1997, to $55.1 million for the six months ended June
30, 1998. This increase was primarily the result of an increase in interest
income on loans receivable from $42.6 million in the six months ended June 30,
1997 to $45.2 million in the six months ended June 30, 1998, due to an increase
in the average portfolio balance of loans receivable, which increased $85.1
million, or 7.9%, to $1,168.2 million for the six months ended June 30, 1998,
from $1,083.1 million for the six months ended June 30, 1997. The increase in
the average portfolio balance of loans receivable resulted primarily from a
strong economy in the Company's market area coupled with an aggressive program
to attract new loan originations in both the mortgage and nonmortgage
portfolios. The increase in interest income from loans receivable was
significantly offset by a decrease in interest income on mortgage-backed and
other asset-backed securities (including those available for sale) of $1.3
million, or 16.9%, to $6.4 million for the six months ended June 30, 1998, from
$7.7 million for the six months ended June 30, 1997, due to the decrease in the
average portfolio balance of $68.1 million, or 25.6%, to $198.2 million for the
six months ended June 30, 1998, from $266.3 million for the six months ended
June 30, 1997. The decrease in the average portfolio balance of mortgage-backed
and other asset-backed securities is due to management's decision to reinvest
the cash flows from these securities in loans receivable. Other interest income
increased as did interest income on investment securities. Other interest income
increased $611,000, or 310.2%, from $197,000 in the six months ended June 30,
1997 to $808,000 in the six months ended June 30, 1998, due primarily to the
increase in the average portfolio balance of $20.1 million, or 193.1%, to $30.5
million for the six months ended June 30, 1998 from $10.4 million for the six
months ended June 30, 1997. Interest income on investment securities (including
those available for sale) increased by $169,000, or 6.8%, in the six months
ended June 30, 1998, due primarily to a slight increase in the average portfolio
balance of $2.1 million, or 2.4%, for the six months ended June 30, 1998,
compared to the six months ended June 30, 1997, and to an increase of 151 basis
points in the average yield for the six months ended June 30, 1998.
The increase in interest income was combined with an increase in total interest
expense of $187,000, or 0.6%, from $29.4 million for the six months ended June
30, 1997 to $29.6 million for the six months ended June 30, 1998. Interest paid
on deposits increased by $564,000, or 2.2%, to $25.7 million for the six months
ended June 30, 1998, from $25.1 million for the six months ended June 30, 1997.
This increase was due primarily to an increase in the average balance of the
deposits of $43.7 million, or 3.8%, to $1,185.7 million for the six months ended
June 30, 1998, from $1,142.0 million for the six months ended June 30, 1997,
offset by a decrease of seven basis points in the cost of deposits. Interest
paid on borrowed funds decreased, by $377,000, or 8.8%, for the six months ended
June 30, 1998, compared to the six months ended June 30, 1997, due to a $12.9
million decrease in the average balance of Federal Home Loan Bank advances and
other borrowed money for the six months ended June 30, 1998 compared to the six
months ended June 30, 1997, offset by an increase of seven basis points in the
cost of borrowings.
13-
<PAGE>
PROVISION (CREDIT) FOR LOSSES ON LOANS. In determining the provision (credit)
for losses on loans, management analyzes, among other things, the Bank's loan
portfolio, market conditions and the Bank's market area. The provision (credit)
for losses on loans decreased by $733,000 for the periods under comparison, from
a provision of $554,000 for the six months ended June 30, 1997 to a credit of
$179,000 for the six months ended June 30, 1998. A majority of the decrease,
$418,000, was due to the recovery in full of a loss reserve established on a
commercial real estate loan, which paid-off in the second quarter of 1998.
Management believes that the allowance for loan losses is adequate at June 30,
1998. There can be no assurances that the allowance will be adequate to cover
losses which may in fact be realized in the future and that additional
provisions will not be required.
NONINTEREST INCOME. Noninterest income increased by $887,000, or 31.8%, from
$2.8 million for the six months ended June 30, 1997 to $3.7 million for the six
months ended June 30, 1998. This increase was primarily the result of an
increase in fees and service charges of $833,000, or 33.9%, and an increase of
$96,000 in the gain on the sale of loans. The increase in fees and service
charges was primarily due to increased fees from transaction accounts, including
a surcharge on ATM withdrawals instituted in fourth quarter 1997. The increase
in the gain on sale of loans was due primarily to increased volume of loan sales
in the current low interest rate environment.
NONINTEREST EXPENSE. Noninterest expense increased by $3.6 million, or 30.8%,
for the six months ended June 30, 1998 as compared to the six months ended June
30, 1997. The increase was primarily due to an increase of $2.9 million in
compensation expense and an increase of $400,000 in the other, net, noninterest
expense. Minor changes in other noninterest expense categories also contributed
to the total increase.
The Bank experienced increased compensation costs during the six months ended
June 30, 1998, primarily due to an increase of $416,000 in employee compensation
resulting from increased staffing and to an increase of $2.5 million resulting
from expense recognized on benefit plans (including the purchase of shares of
common stock of the Company by the ESOP in connection with the Conversion and
Reorganization) due to the price appreciation of the fair market value of common
stock in those plans. Furthermore, due to the Agreement to be acquired by
Commercial Federal Corporation, compensation expense due to the Management Stock
Bonus Plan ("MSBP"), whereby various officers and directors of the Bank were
granted restricted stock vesting over a five-year period, increased by $2.0
million, as the provisions of the MSBP accelerated the vesting, thereby
requiring the expense of those shares to be recognized. The increase in other,
net, noninterest expense was due primarily to the accrual of a $250,000
charitable contribution expense to be made in the name of the Company, in
accordance with the Agreement, prior to the consumation of the merger with
Commercial Federal.
INCOME TAX EXPENSE. Federal and state income taxes decreased by $211,000, or
4.0%, for the six months ended June 30, 1998 compared to the six months ended
June 30, 1997, due primarily to tax benefits recognized from the Company's
acquisition of Delta Federal Savings, F.S.B. in October 1997.
-14-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Bank is required to maintain a minimum level of liquid assets as defined by
the OTS regulations. This requirement, which may be varied from time to time
depending upon economic conditions and deposit flows, is based upon a percentage
of deposits and short-term borrowings. The required ratio is currently 4%. The
Bank's liquidity averaged 12.70% during the month of June 1998. The Bank adjusts
its liquidity level in order to meet funding needs for deposit outflows, payment
of real estate taxes from escrow accounts on mortgage loans, repayment of
borrowings when applicable, and loan funding commitments. The Bank also adjusts
its liquidity level as appropriate to meet its asset/liability management
objectives.
The Bank's primary sources of funds are deposits, amortization and prepayments
of loans and mortgage-backed and other asset-backed securities, sales and
maturities of investment securities, Federal Home Loan Bank of Topeka advances,
borrowings from commercial banks, and funds provided from operations. While
scheduled loan amortization and maturing investment securities are a relatively
predictable source of funds, deposit flow and loan prepayments are greatly
influenced by market interest rates, economic conditions and competition. The
Bank manages the pricing of its deposits to maintain a steady deposit balance.
In addition, the Bank invests any excess funds in federal funds and overnight
deposits which provide liquidity to meet lending requirements. Federal funds
sold and other interest-earning assets at June 30, 1998 amounted to $59.6
million, an increase of $42.9 million from December 31, 1997. This increase
reflects the cash flow generated from the accelerated repayment of loans
receivable in the current low interest rate environment.
When the Bank requires funds beyond its ability to generate them internally,
borrowing agreements exist with other financial institutions to provide an
additional source of funds. The Bank had a June 30, 1998 balance of $107.4
million of Federal Home Loan Bank advances compared to $122.4 million as of
December 31, 1997. These borrowings were used to fund the Bank's cash needs. The
Bank does not anticipate that it will require additional short-term borrowings
to meet its current loan commitments. At June 30, 1998, the Bank had total
outstanding commitments to fund loan originations or obligations or
mortgage-backed security purchases of $57.7 million.
The Bank can also access the capital markets to meet its cash needs, and did so
most recently in 1995.
As required by regulation, the Bank must maintain a minimum regulatory tangible
capital ratio of 1.5% of tangible assets, a minimum core capital ratio of 4% of
adjusted tangible assets, and a minimum risk-based capital ratio of 8% of total
risk-weight assets.
-15-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Bank's capital requirements and actual capital under OTS regulations are as
follows as of June 30, 1998:
AMOUNT % OF ASSETS
------ -----------
(in thousands)
GAAP Capital $ 209.081 13.51%
=========
Tangible Capital:
Actual $ 204,160 13.23%
Required 23,141 1.50
--------- ----
Excess $ 181,019 11.73%
=========
Core Capital:
Actual $ 207,129 13.40%
Required 61,828 4.00
--------- ----
Excess $ 145,301 9.40%
=========
Risk-based Capital:
Actual $ 210,773 25.61%
Required 65,833 8.00
--------- ----
Excess $ 144,940 17.61%
=========
IMPACT OF INFLATION AND CHANGING PRICES
The consolidated financial statements of the Company and notes thereto,
presented elsewhere herein, have been prepared in accordance with GAAP, which
require the measurement of financial condition and operating results in terms of
historical dollars without considering the change in the relative purchasing
power of money over time due to inflation. The impact of inflation is reflected
in the increased cost of the Company's operations. Unlike most industrial
companies, nearly all the assets and liabilities of the Company are financial.
As a result, interest rates have a greater impact on the Company's performance
than do the effects of general levels of inflation. Interest rates do not
necessarily move in the same direction or to the same extent as the prices of
goods and services.
-16-
<PAGE>
KEY OPERATING RATIOS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, (1) June 30, (1)
------------------------ ------------------------
1998 1997 1998 1997
---- ---- ---- ----
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Return on average assets................ 1.09% 1.07% 1.16% 1.17%
Return on average equity................ 7.78 8.30 8.42 8.88
Net interest spread..................... 2.90 2.59 2.87 2.70
Net interest margin..................... 3.45 3.12 3.43 3.25
Noninterest expense to average
assets............................... 2.25 1.60 1.97 1.55
Equity to assets (period end)........... 14.11 12.90 14.11 12.90
</TABLE>
<TABLE>
<CAPTION>
At June 30, At December 31,
1998 1997
--------------- ---------------
(Dollars in Thousands,
except per share data)
(Unaudited)
<S> <C> <C>
Nonperforming loans........................................ $ 2,897 $ 2,466
Repossessed real estate.................................... 166 225
----------- -----------
Total nonperforming assets.............................. $ 3,063 $ 2,691
=========== ===========
Allowance for loan losses to nonperforming assets.......... 158.86% 175.25%
Nonperforming loans to total loans......................... 0.25% 0.21%
Nonperforming assets to total assets....................... 0.20% 0.17%
Book value per share (2)................................... $ 12.91 $ 12.45
</TABLE>
- --------------
(1) The ratios for the three- and six-month periods are annualized where
appropriate.
(2) The number of shares outstanding as of June 30, 1998 and December 31, 1997
was 16,894,636 and 16,808,372, respectively. This includes shares purchased
by the ESOP.
-17-
<PAGE>
FIRST COLORADO BANCORP, INC.
PART II
Item 1. Legal Proceedings - From time to time, the Company is a party to
routine legal proceedings in the ordinary course of business, such as
claims to enforce liens, condemnation proceedings on properties in
which the Company holds security interests, claims involving the
making and servicing of real property loans, and other issues incident
to the business of the Company. There were no lawsuits pending or
known to be contemplated against the Company at June 30, 1998 that
would have a material effect on the operations or income of the
Company or the Bank, taken as a whole.
Item 2. Changes in Securities - Not applicable.
Item 3. Defaults upon Senior Securities - Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders - The annual
meeting of stockholders of the Company was held on May 4, 1998, and
the following items were presented:
Election of Directors Leeon E. Hayden, E. William Foerster, Jr. and
Robert W. Richards for terms of three years ending in 2001. Leeon E.
Hayden received 13,354,368 votes and 101,160 votes were withheld. E.
William Foerster, Jr. received 13,340,647 votes and 114,881 votes were
withheld. Robert W. Richards received 13,353,573 votes and 101,955
votes were withheld.
Ratification of the Company's 1996 Stock Option Plan. The plan was
ratified with 12,445,777 votes for, 576,486 votes against, and 157,665
abstentions.
Ratification of the Company's Management Stock Bonus Plan. The plan
was ratified with 12,693,669 votes for, 585,006 votes against, and
176,856 abstentions.
Ratification of the appointment of KPMG Peat Marwick LLP as the
Company's auditors for the 1998 fiscal year. KPMG Peat Marwick LLP was
ratified as the Company's auditors with 13,334,452 votes for, 49,006
votes against, and 72,069 abstentions.
On July 13, 1998, the stockholders of the Company approved the
Agreement whereby the Company will merge with and into Commercial
Federal. A total of 11,223,698 votes out of 16,841,560 eligible were
cast as follows: 10,887,830 for; 231,243 against; and 104,625
abstentions.
Item 5. Other Information -Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2 Reorganization and Merger Agreement by and among First
Colorado Bancorp, Inc. and First Federal Bank of Colorado,
and Commercial Federal Corporation and Commercial Federal
Bank, a Federal Savings Bank dated March 9, 1998.*
3(i) Articles of Incorporation of First Colorado Bancorp, Inc.**
3(ii) Bylaws of First Colorado Bancorp, Inc.**
4.1 Specimen Stock Certificate of First Colorado Bancorp, Inc.**
4.2 Preferred Share Purchase Rights Agreement***
-18-
<PAGE>
10.1 Severance Agreement with Malcolm E. Collier, Jr.****
10.2 Form of Severance Agreement with Key Officers*****
10.3 1992 Stock Option Plan*****
10.4 1992 Management Recognition Plan*****
10.5 1996 Stock Option Plan*****
10.6 1996 Management Stock Bonus Plan*****
11 Statement Regarding Computation of Earnings per Share
27 Financial Data Schedule******
(b) Reports on Form 8-K - On July 21, 1998, the Registrant filed a
Current Report on Form 8-K announcing the results of its special
meeting of shareholders regarding the proposed merger with
Commercial Federal.
- ---------------------------
* Incorporated by reference to the Registrant's Current Report on Form
8-K filed with the SEC on March 9, 1998.
** Incorporated by reference to the Registration Statement on Form S-1
(file no. 33-97228) declared effective by the SEC on November 13,
1995.
*** Incorporated by reference to the Registrant's Current Report on Form
8-K filed with the SEC on July 25, 1996.
**** Incorporated by reference to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1995.
***** Incorporated by reference to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1996.
****** Filed electronically only.
-19-
<PAGE>
FIRST COLORADO BANCORP, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
First Colorado Bancorp, Inc. (Registrant)
Date: August 13, 1998 By: /s/ Malcolm E. Collier, Jr.
---------------------------
Malcolm E. Collier, Jr.
Chairman of the Board
Chief Executive Officer
Date: August 13, 1998 By: /s/ Brian L. Johnson
---------------------------
Brian L. Johnson
Executive Vice President
Treasurer
-20-
EXHIBIT 11
<PAGE>
FIRST COLORADO BANCORP, INC.
EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
For the three months For the six months
Ended June 30, Ended June 30,
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Income (000's) $ 4,200 $ 4,025 $ 9,006 $ 8,840
=========== =========== =========== ===========
Weighted Average Shares Outstanding 15,707,280 15,177,188 15,684,130 15,435,250
Basic Earnings Per Share $ 0.27 $ 0.27 $ 0.57 $ 0.57
=========== =========== =========== ===========
Effect of dilutive securities:
Stock Options 764,107 433,620 751,410 432,736
Nonvested MRP/MSBP shares 78,969 56,720 74,120 56,179
----------- ----------- ----------- -----------
Total weighted average common shares and
equivalents outstanding for fully diluted
computation 16,550,356 15,667,528 16,509,660 15,924,165
=========== =========== =========== ===========
Diluted earnings per share $ 0.25 $ 0.26 $ 0.55 $ 0.56
=========== =========== =========== ===========
</TABLE>
Earnings per share of common stock for the three and six month periods ended
June 30, 1998 and June 30, 1997 has been determined by dividing net income for
the period by the weighted average number of shares of common stock outstanding,
net of unearned ESOP shares of 918,265 and 1,072,303, respectively.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION DERIVED FROM THE
QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 26,108
<INT-BEARING-DEPOSITS> 3,268
<FED-FUNDS-SOLD> 56,300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 6,453
<INVESTMENTS-CARRYING> 249,027
<INVESTMENTS-MARKET> 247,847
<LOANS> 1,155,580
<ALLOWANCE> 4,866
<TOTAL-ASSETS> 1,546,630
<DEPOSITS> 1,195,067
<SHORT-TERM> 25,410
<LIABILITIES-OTHER> 21,900
<LONG-TERM> 86,097
0
0
<COMMON> 2,013
<OTHER-SE> 216,143
<TOTAL-LIABILITIES-AND-EQUITY> 1,546,630
<INTEREST-LOAN> 45,234
<INTEREST-INVEST> 9,028
<INTEREST-OTHER> 808
<INTEREST-TOTAL> 55,070
<INTEREST-DEPOSIT> 25,698
<INTEREST-EXPENSE> 29,586
<INTEREST-INCOME-NET> 25,484
<LOAN-LOSSES> (179)
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 15,302
<INCOME-PRETAX> 14,037
<INCOME-PRE-EXTRAORDINARY> 9,006
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,006
<EPS-PRIMARY> 0.57
<EPS-DILUTED> 0.55
<YIELD-ACTUAL> 3.43
<LOANS-NON> 2,897
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,716
<CHARGE-OFFS> 132
<RECOVERIES> 461
<ALLOWANCE-CLOSE> 4,866
<ALLOWANCE-DOMESTIC> 4,866
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
