<PAGE>
================================================================================
U.S. 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 September 30, 2000.
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
----------------------------------
Commission File Number 000-24445
----------------------------------
COLORADO BUSINESS BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
COLORADO 84-0826324
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
821 l7th Street
Denver, CO 80202
(Address of principal executive offices) (Zip Code)
(303) 293-2265
(Registrant's telephone number, including area code)
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
----- -----
There were 6,706,347 shares of the registrant's Common Stock, $0.01 par value
per share, outstanding as of November 13, 2000.
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<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
PART I. FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities and Use of Proceeds None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders None
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 20
<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
Consolidated Statements of Condition
September 30, 2000 (unaudited) and December 31, 1999
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 29,614,000 $ 18,687,000
Federal funds sold 2,000,000 -
------------ ------------
Total cash and cash equivalents 31,614,000 18,687,000
------------ ------------
Investment securities available for sale (cost of $144,934,000 (unaudited) and
$102,949,000, respectively) 144,003,000 101,456,000
Investment securities held to maturity (fair value of $5,104,000 (unaudited) and
$5,648,000, respectively) 5,078,000 5,620,000
Other investments 3,475,000 2,845,000
------------ ------------
Total investments 152,556,000 109,921,000
------------ ------------
Loans and leases, net 408,043,000 346,094,000
Excess of cost over fair value of net assets acquired, net 3,914,000 4,243,000
Investment in operating leases 2,660,000 4,047,000
Premises and equipment, net 3,680,000 3,606,000
Accrued interest receivable 3,049,000 2,167,000
Deferred income taxes 2,361,000 2,192,000
Other 2,414,000 1,052,000
------------ ------------
TOTAL ASSETS $610,291,000 $492,009,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $119,322,000 $106,492,000
NOW and money market 164,003,000 148,685,000
Savings 5,663,000 5,896,000
Certificates of deposit 138,016,000 122,256,000
------------ ------------
Total deposits 427,004,000 383,329,000
Federal funds purchased 11,320,000 1,300,000
Securities sold under agreements to repurchase 68,306,000 33,053,000
Advances from Federal Home Loan Bank 35,910,000 30,980,000
Other liabilities 3,122,000 2,996,000
Company obligated mandatorily redeemable preferred securities
of subsidiary trust holding solely subordinated debentures 20,000,000 -
Total liabilities 565,662,000 451,658,000
Shareholders' Equity:
Common, $.01 par value; 25,000,000 shares authorized; 6,706,347
issued and outstanding 67,000 67,000
Additional paid-in capital 30,074,000 29,994,000
Retained earnings 15,064,000 11,224,000
Accumulated other comprehensive loss, net of income tax
of ($355,000) (unaudited) and ($559,000), respectively (576,000) (934,000)
------------ ------------
Total shareholders' equity 44,629,000 40,351,000
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $610,291,000 $492,009,000
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
1
<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
Consolidated Statements of Income and Comprehensive Income
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans and leases $ 9,814,000 $ 6,827,000 $27,196,000 $18,264,000
Interest and dividends on investment securities:
Taxable securities 2,063,000 1,528,000 5,338,000 4,478,000
Nontaxable securities 16,000 18,000 42,000 50,000
Dividends on securities 61,000 37,000 158,000 101,000
Federal funds sold and other 192,000 57,000 525,000 148,000
----------- ----------- ----------- -----------
Total interest income 12,146,000 8,467,000 33,259,000 23,041,000
INTEREST EXPENSE:
Interest on deposits 4,044,000 2,274,000 11,114,000 6,036,000
Interest on short-term borrowings and FHLB advances 1,065,000 807,000 2,640,000 2,131,000
Interest on mandatorily redeemable preferred securities of
subsidiary trust 500,000 - 544,000 -
----------- ----------- ----------- -----------
Total interest expense 5,609,000 3,081,000 14,298,000 8,167,000
NET INTEREST INCOME BEFORE PROVISION FOR
LOAN AND LEASE LOSSES 6,537,000 5,386,000 18,961,000 14,874,000
Provision for loan and lease losses 320,000 371,000 1,262,000 1,006,000
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN AND LEASE LOSSES 6,217,000 5,015,000 17,699,000 13,868,000
----------- ----------- ----------- -----------
OTHER INCOME:
Service charges 289,000 307,000 857,000 847,000
Operating lease income 483,000 604,000 1,521,000 1,742,000
Other income 375,000 229,000 1,140,000 720,000
Gain on sale of securities - - - 44,000
----------- ----------- ----------- -----------
Total other income 1,147,000 1,140,000 3,518,000 3,353,000
----------- ----------- ----------- -----------
OTHER EXPENSE:
Salaries and employee benefits 2,402,000 2,113,000 6,878,000 6,142,000
Occupancy expenses, premises and equipment 838,000 790,000 2,492,000 2,001,000
Depreciation on leases 395,000 504,000 1,246,000 1,487,000
Amortization of intangibles 111,000 110,000 332,000 331,000
Other 796,000 620,000 2,099,000 1,721,000
----------- ----------- ----------- -----------
Total other expense 4,542,000 4,137,000 13,047,000 11,682,000
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 2,822,000 2,018,000 8,170,000 5,539,000
Provision for income taxes 1,124,000 745,000 3,257,000 2,117,000
----------- ----------- ----------- -----------
NET INCOME $ 1,698,000 $ 1,273,000 $ 4,913,000 $ 3,422,000
=========== =========== =========== ===========
UNREALIZED APPRECIATION (DEPRECIATION) ON
AVAILABLE FOR SALE SECURITIES, net of tax 883,000 (106,000) 358,000 (1,086,000)
----------- ----------- ----------- -----------
COMPREHENSIVE INCOME $ 2,581,000 $ 1,167,000 $ 5,271,000 $ 2,336,000
=========== =========== =========== ===========
EARNINGS PER SHARE:
Basic $ 0.25 $ 0.19 $ 0.73 $ 0.51
=========== =========== =========== ===========
Diluted $ 0.25 $ 0.19 $ 0.71 $ 0.50
=========== =========== =========== ===========
CASH DIVIDENDS PER SHARE: $ 0.06 $ 0.05 $ 0.16 $ 0.10
=========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2000 and 1999
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------------
2000 1999
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,913,000 $ 3,422,000
Adjustments to reconcile net income to net cash provided
by operating activities:
Net amortization of securities 68,000 170,000
Depreciation and amortization 2,440,000 2,531,000
Provision for loan and lease losses 1,262,000 1,006,000
Deferred income taxes (374,000) (152,000)
Gain on sale of securities - (44,000)
Gain on sale of premises and equipment (32,000) (1,000)
Changes in:
Accrued interest receivable (882,000) (436,000)
Other assets (431,000) (188,000)
Accrued interest and other liabilities 126,000 219,000
-------------- --------------
Net cash provided by operating activities 7,090,000 6,527,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Net change in other investments (630,000) (645,000)
Purchase of available for sale securities (60,211,000) (35,438,000)
Proceeds from maturities of held to maturity securities 535,000 2,996,000
Proceeds from maturities and sale of available for
sale securities 18,161,000 35,785,000
Loan and lease originations and repayments, net (63,212,000) (82,920,000)
Purchase of premises and equipment (967,000) (1,593,000)
Proceeds from sale of premises and equipment 207,000 114,000
-------------- --------------
Net cash used in investing activities (106,117,000) (81,701,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand, NOW, money market,
and savings accounts 27,915,000 34,518,000
Net increase in certificates of deposit 15,760,000 25,387,000
Net decrease in federal funds purchased 10,020,000 5,300,000
Net increase in securities sold under agreements
to repurchase 35,253,000 9,417,000
Advances from Federal Home Loan Bank 65,800,000 65,000,000
Repayments of Federal Home Loan Bank advances (60,870,000) (59,070,000)
Proceeds from issuance of mandatorily redeemable preferred
securities of subsidiary trust 20,000,000 -
Net increase in debt issuance costs (931,000) -
Proceeds from exercise of stock options 80,000 -
Dividends paid on common stock (1,073,000) (334,000)
-------------- --------------
Net cash provided by financing activities 111,954,000 80,218,000
NET INCREASE IN CASH AND CASH
EQUIVALENTS 12,927,000 5,044,000
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 18,687,000 20,058,000
-------------- --------------
CASH AND CASH EQUIVALENTS, END OF
PERIOD $ 31,614,000 $ 25,102,000
============== ==============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
Colorado Business Bankshares, Inc. and Subsidiaries
Notes to Consolidated Condensed Financial Statements
(Unaudited)
1. Consolidated Condensed Financial Statements
The accompanying consolidated condensed financial statements are unaudited
and include the accounts of Colorado Business Bankshares, Inc. ("Parent"), and
its wholly owned subsidiaries: CoBiz Connect, Inc., Colorado Business Bankshares
Capital Trust I, Colorado Business Bank, N.A. ("Bank"), and the Bank's 80%
owned equipment leasing subsidiary, Colorado Business Leasing, Inc. ("Leasing").
All significant intercompany accounts and transactions have been
eliminated. These financial statements and notes thereto should be read in
conjunction with, and are qualified in their entirety by our Annual Report on
Form 10-KSB for the year ended December 31, 1999, as filed with the Securities
and Exchange Commission on March 30, 2000.
The consolidated condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and the instructions to Form 10-Q. 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 only of normally recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
nine months ended September 30, 2000 are not necessarily indicative of the
results that may be expected for the full year ending December 31, 2000.
Certain reclassifications have been made to the 1999 financial statements
to conform to the 2000 presentation.
2. Mandatorily Redeemable Preferred Securities of Subsidiary Trust
On June 19, 2000, we established Colorado Business Bankshares Capital Trust
I ("Trust"), a wholly-owned statutory business trust. The Trust was created for
the exclusive purpose of issuing 30-year capital trust preferred securities
("Trust Preferred Securities") in the aggregate amount of $20,000,000 and using
the proceeds to purchase junior subordinated debentures ("Subordinated
Debentures") issued by the Parent. The sole assets of the Trust are the
Subordinated Debentures.
The Trust Preferred Securities bear a cumulative fixed interest rate of 10%
per annum and mature on June 30, 2030. Interest distributions are payable
quarterly. The Trust Preferred Securities are subject to mandatory redemptions
upon repayment of the Subordinated Debentures at their stated maturity date or
their earlier redemption in an amount equal to their liquidation amount plus
accumulated and unpaid distributions to the date of redemption. We guarantee
the payment of distributions and payments for redemption or liquidation of the
Trust Preferred Securities to the extent of funds held by the Trust. Our
obligations under the Subordinated Debentures together with the guarantee and
other back-up obligations, in the aggregate, constitute a full and unconditional
guarantee by us of the obligations of the Trust under the Trust Preferred
Securities.
4
<PAGE>
The Subordinated Debentures are unsecured, bear interest at a rate of 10%
per annum and mature on June 30, 2030. Interest is payable quarterly. We may
defer the payment of interest at any time for a period not exceeding 20
consecutive quarters provided that deferral period does not extend past the
stated maturity. During any such deferral period, distributions on the Trust
Preferred Securities will also be deferred and our ability to pay dividends on
our common shares will be restricted.
Subject to approval by the Federal Reserve Bank, the Trust Preferred
Securities may be redeemed prior to maturity at our option on or after June 30,
2005. The Trust Preferred Securities may also be redeemed at any time in whole
(but not in part) in the event of unfavorable changes in laws or regulations
that result in (1) the Trust becoming subject to federal income tax on income
received on the Subordinated Debentures, (2) interest payable by the parent
company on the Subordinated Debentures becoming non-deductible for federal tax
purposes, (3) the requirement for the Trust to register under the Investment
Company Act of 1940, as amended, or (4) loss of the ability to treat the Trust
Preferred Securities as "Tier I capital" under the Federal Reserve capital
adequacy guidelines.
Portions of the Trust Preferred Securities qualify as Tier I capital under
regulatory definitions. Issuance costs consisting primarily of underwriting
discounts and professional fees of approximately $1 million were capitalized and
are being amortized over five years to noninterest expense using the straight-
line method.
3. Earnings per Common Share
Income available to common shareholders and the weighted average shares
outstanding used in the calculation of Basic and Diluted Earnings Per Share are
as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income available to common shareholders $1,698,000 $1,273,000 $4,913,000 $3,422,000
---------- ---------- ---------- ----------
Weighted average shares outstanding -
basic earnings per share 6,705,324 6,673,481 6,702,920 6,673,481
Effect of dilutive securities - stock options 190,784 190,375 180,369 189,804
---------- ---------- ---------- ----------
Weighted average shares outstanding -
diluted earnings per share 6,896,108 6,863,856 6,883,289 6,863,285
========== ========== ========== ==========
Earnings per common share - Diluted $ 0.25 $ 0.19 $ 0.71 $ 0.50
========== ========== ========== ==========
</TABLE>
5
<PAGE>
4. Recent Accounting Pronouncements
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," establishes accounting and reporting standards for derivative
instruments and hedging activities and requires recognition of all derivatives
as either assets or liabilities measured at fair value. The accounting for
changes in fair value of a derivative depends on the intended use of the
derivative and the resulting designation. The statement is required for the year
2001. The adoption of SFAS No. 133 is not expected to have a material effect on
the consolidated financial statements.
5. Comprehensive Income (Loss)
Comprehensive income (loss) is the total of (1) net income plus (2) all
other changes in net assets arising from non-owner sources, which are referred
to as other comprehensive income (loss). Presented below are the changes in
other comprehensive income (loss) for the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------------------------------
2000 1999 2000 1999
---------- --------- --------- -----------
<S> <C> <C> <C> <C>
Other comprehensive income (loss), before tax:
Unrealized gain (loss) on available for sale
securities arising during the period $1,408,000 $(169,000) $ 571,000 $(1,688,000)
Reclassification adjustment for (gains) losses
arising during the period - - - (44,000)
---------- --------- --------- -----------
Other comprehensive income (loss), before tax 1,408,000 (169,000) 571,000 (1,732,000)
Tax (expense) benefit related to items of
other comprehensive income (loss) (525,000) 63,000 (213,000) 646,000
---------- --------- --------- -----------
Other comprehensive income (loss), net of tax $ 883,000 $(106,000) $ 358,000 $(1,086,000)
========== ========= ========= ===========
</TABLE>
6. Segments
Our principal activities include Commercial Banking and Equipment Leasing.
The Commercial Banking segment offers a broad range of banking products and
services, including credit, cash management, investment, deposit and trust
products. The Equipment Leasing segment offers leasing programs for computers,
telecommunications equipment, telephone systems, business furniture,
manufacturing equipment, materials handling equipment and other capital
equipment.
6
<PAGE>
The financial information for each business segment reflects that
information which is specifically identifiable or which is allocated based on an
internal allocation method. The allocation has been consistently applied for all
periods presented. Revenues from affiliated transactions, principally the
Commercial Banking division's funding of Equipment Leasing activity, are
generally charged at the Commercial Banking division's marginal cost of funds.
Results of operations and selected financial information by operating segment
are as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2000 1999 2000 1999
------- ------- ------- -------
(dollars in thousands)
<S> <C> <C> <C> <C>
Total interest income:
Commercial Banking $12,101 $ 8,415 $33,174 $22,914
Equipment Leasing 430 371 1,265 1,045
All other 562 5 568 18
Eliminations (947) (324) (1,748) (936)
Consolidated $12,146 $ 8,467 $33,259 $23,041
======= ======= ======= =======
Total interest expense:
Commercial Banking $ 5,110 $ 3,088 $13,760 $ 8,172
Equipment Leasing 385 317 1,180 931
All other 1,061 - 1,106 -
Eliminations (947) (324) (1,748) (936)
Consolidated $ 5,609 $3,081 $14,298 $ 8,167
======= ======= ======= =======
Other noninterest income:
Commercial Banking $ 649 $ 559 $ 1,927 $ 1,612
Equipment Leasing 537 632 1,746 1,862
All other 2,442 1,510 6,337 4,130
Eliminations (2,481) (1,561) (6,492) (4,251)
Consolidated $ 1,147 $1,140 $ 3,518 $ 3,353
======= ======= ======= =======
Net Income:
Commercial Banking $ 2,199 $ 1,328 $ 5,743 $ 3,570
Equipment Leasing 19 38 (42) 96
All other 1,698 1,273 4,913 3,421
Eliminations (2,218) (1,366) (5,701) (3,665)
Consolidated $ 1,698 $1,273 $ 4,913 $ 3,422
======= ======= ======= =======
</TABLE>
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Consolidated Condensed Balance Sheets
Our total assets increased by $118.3 million to $610.3 million as of
September 30, 2000, from $492.0 million as of December 31, 1999. A consistent
focus on internal growth and sustained loan demand allowed our loan and lease
portfolio (net) to increase by $61.9 million, from $346.1 million at December
31, 1999, to $408.0 million as of September 30, 2000. Total investments were
$152.6 million as of September 30, 2000, compared to $109.9 million as of
December 31, 1999. The increase in the investment portfolio was possible due to
strong deposit growth and the proceeds from the Trust Preferred Securities
issued in June of 2000.
Deposits increased by $43.7 million to $427.0 million as of September 30,
2000, from $383.3 million as of December 31, 1999. Noninterest-bearing deposits
increased by $12.8 million, and interest-bearing deposits increased by $30.8
million. Low-cost demand deposits comprised 28% of total deposits as of
September 30, 2000. Federal funds purchased and securities sold under agreements
to repurchase increased by $45.3 million in the first nine months of 2000 to
$79.6 million. Of this total, $54.7 million represents repurchase agreements
transacted on behalf of our customers and is not considered a wholesale
borrowing source. The increase in deposits and customer repurchase agreements
is attributed, in part, to an increased emphasis on deposit generation included
in banker production goals.
Advances from the Federal Home Loan Bank of Topeka ("FHLB") were $35.9
million at September 30, 2000, compared to $31.0 million at December 31, 1999.
We successfully completed an offering of $20 million of Trust Preferred
Securities late in the second quarter of 2000. Proceeds of $18 million were
contributed to the capital of the Bank to support its growth. The remaining
balance will be used for general corporate purposes.
Results of Operations
Overview
Net earnings available to common shareholders was $1.7 million for the
quarter ended September 30, 2000, compared with $1.3 million for the quarter
ended September 30, 1999, an increase of 33%. Earnings per share on a fully
diluted basis for the third quarter was $0.25, versus $0.19 for the same period
a year ago, an increase of 32%. On an operating basis, before the amortization
of goodwill, consolidated net income available to common shareholders for the
three months ended September 30, 2000 and 1999, was $1.8 million and $1.4
million, or $0.26 and $0.20 per diluted share, respectively. Return on average
tangible assets was 1.26% in the third quarter of 2000 and 1999. Return on
average tangible common shareholders' equity was 18.28% for the quarter ended
September 30, 2000, versus 15.87% for the quarter ended September 30, 1999.
Net earnings available to common shareholders was $4.9 million for the nine
months ended September 30, 2000, compared with $3.4 million for the nine months
ended September 30, 1999, an
8
<PAGE>
increase of 44%. This increase was primarily due to an increase in net interest
income of $4.1 million. Earnings per share on a fully diluted basis for the
first nine months was $0.71, versus $0.50 for the same period a year ago, an
increase of 42%. On an operating basis, before the amortization of goodwill,
consolidated net income available to common shareholders for the nine months
ended September 30, 2000 and 1999, was $5.2 million and $3.8 million, or $0.76
and $0.55 per diluted share, respectively. Return on average tangible assets was
1.31% in the first nine months of 2000, compared with 1.24% in the first nine
months of 1999. Return on average tangible common shareholders' equity was
18.17% for the period ended September 30, 2000, versus 14.75% for the period
ended September 30, 1999.
The following table presents condensed statements of income for the three
months and nine months ended September 30, 2000 and September 30, 1999.
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
----------------------------------------- ---------------------------------------------
Increase (Decrease) Increase (Decrease)
------------------ ------------------
----------------------------------------- ---------------------------------------------
2000 1999 Amount % 2000 1999 Amount %
--------- -------- -------- ----- --------- --------- --------- -----
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income $ 12,146 $ 8,467 $ 3,679 43% $ 33,259 $ 23,041 $ 10,218 44%
Interest expense 5,609 3,081 2,528 82% 14,298 8,167 6,131 75%
--------- -------- -------- --------- --------- ---------
Net interest income before provision
for loan and lease losses 6,537 5,386 1,151 21% 18,961 14,874 4,087 27%
--------- -------- -------- --------- --------- ---------
Provision for loan and lease losses 320 371 (51) -14% 1,262 1,006 256 25%
--------- -------- -------- --------- --------- ---------
Net interest income after provision
for loan and lease losses 6,217 5,015 1,202 24% 17,699 13,868 3,831 28%
Noninterest income 1,147 1,140 7 1% 3,518 3,353 165 5%
Noninterest expense 4,542 4,137 405 10% 13,047 11,682 1,365 12%
--------- -------- -------- --------- --------- ---------
Income before income taxes 2,822 2,018 804 40% 8,170 5,539 2,631 47%
Provision for income taxes 1,124 745 379 51% 3,257 2,117 1,140 54%
--------- -------- -------- --------- --------- ---------
Net income $ 1,698 $ 1,273 $ 425 33% $ 4,913 $ 3,422 $ 1,491 44%
========= ======== ======== ========= ========= =========
</TABLE>
9
<PAGE>
Net Interest Income
Net interest income before provision for loan and lease losses was $6.5
million for the quarter ended September 30, 2000, an increase of $1.2 million,
or 21%, compared with the quarter ended September 30, 1999. Yields on our
interest-earning assets improved by 65 basis points to 8.92% for the three
months ended September 30, 2000, from 8.27% for the three months ended September
30, 1999. Yields paid on interest-bearing liabilities increased by 141 basis
points during this same period. The net interest margin was 4.88% for the
quarter ended September 30, 2000, down from 5.33% for the quarter ended
September 30, 1999. Part of the margin compression related to the $20 million of
Trust Preferred Securities issued in June of 2000. The stated coupon on this
debt is 10%. Also contributing to the decrease in the net interest margin was
heightened competition for customer deposits, which resulted in higher rates on
interest-bearing deposits. Although the growth of our average earning assets
helped mitigate the margin compression, continued increases in interest rates
could adversely affect both our cost of funds and loan originations, resulting
in lower net interest margins in future operating periods. Average earning
assets increased by 33% to $532.8 million for the third quarter of 2000, from
$400.9 million for the third quarter of 1999.
Net interest income before provision for loan and lease losses was $19.0
million for the nine months ended September 30, 2000, an increase of $4.1
million, or 27%, compared with the period ended September 30, 1999. Yields on
our interest-earning assets improved by 69 basis points to 8.81% for the nine
months ended September 30, 2000, from 8.12% for the nine months ended September
30, 1999. The yield improvement on interest earning assets is principally the
result of the prime rate increasing by 125 basis points from September 1999 to
September 2000. Yields paid on interest-bearing liabilities increased by 105
basis points during this same period. The net interest margin was 5.11% for the
nine months ended September 30, 2000, down from 5.32% for the nine months ended
September 30, 1999. Part of the margin compression related to the $20 million
of Trust Preferred Securities issued in June of 2000. Also contributing to the
decrease in the net interest margin was heightened competition for customer
deposits, which resulted in higher rates on interest-bearing deposits. Although
the growth of our average earning assets helped mitigate the margin compression,
continued increases in interest rates could adversely affect both our cost of
funds and loan originations, resulting in lower net interest margins in future
operating periods. Average earning assets increased by 33% to $495.8 million for
the first nine months of 2000, from $374.1 million for the first nine months of
1999.
The following tables set forth the average amounts outstanding for each
category of interest-earning assets and interest-bearing liabilities, the
interest earned or paid on such amounts and the average rate earned or paid for
the quarters and nine months ended September 30, 2000 and 1999.
10
<PAGE>
<TABLE>
<CAPTION>
For the three months ended September 30,
------------------------------------------------------------------------------
2000 1999
---------------------------------- -------------------------------------
Interest Average Interest Average
Average earned yield Average earned yield
balance or paid or cost (1) balance or paid or cost (1)
--------- -------- ---------- --------- -------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Federal funds sold and other $ 11,724 $ 192 6.41% $ 4,534 $ 57 4.92%
Investment securities (2) 128,353 2,140 6.52% 107,072 1,583 5.79%
Loans and leases (3) 398,039 9,814 9.65% 293,207 6,827 9.11%
Allowance for loan and lease losses (5,303) - 0.00% (3,959) - 0.00%
--------- -------- --------- -------
Total interest-earning assets 532,813 12,146 8.92% 400,854 8,467 8.27%
Noninterest-earning assets:
Cash and due from banks 22,869 22,043
Other 17,475 16,564
--------- ---------
Total assets $ 573,157 $ 439,461
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
NOW and money market accounts $ 178,448 $ 1,919 4.28% $ 122,661 $ 1,007 3.26%
Savings 6,038 33 2.17% 6,475 36 2.21%
Certificates of deposit:
Under $100,000 26,434 393 5.91% 22,391 285 5.05%
$100,000 and over 108,165 1,699 6.25% 73,585 946 5.10%
--------- -------- --------- -------
Total interest-bearing deposits 319,085 4,044 5.04% 225,112 2,274 4.01%
Other borrowings:
Securities and loans sold under agreements to
repurchase and federal funds purchased 56,749 838 5.78% 46,864 539 4.50%
FHLB advances 13,410 227 6.62% 20,039 268 5.23%
Company obligated mandatorily redeemable
preferred securities 20,000 500 10.00% - - 0.00%
--------- -------- --------- -------
Total interest-bearing liabilities 409,244 5,609 5.22% 292,015 3,081 3.81%
Noninterest-bearing demand accounts 117,447 106,500
--------- ---------
Total deposits and interest-bearing liabilities 526,691 398,515
Other noninterest-bearing liabilities 3,154 1,977
--------- ---------
Total liabilities and preferred securities 529,845 400,492
Shareholders' equity 43,312 38,969
--------- ---------
Total liabilities and shareholders' equity $ 573,157 $ 439,461
========= =========
Net interest income $ 6,537 $ 5,386
======== =======
Net interest spread 3.70% 4.45%
Net interest margin 4.88% 5.33%
Ratio of average interest-earning assets to
average interest-bearing liabilities 130.19% 137.27%
</TABLE>
--------------------------------------------------------------------------------
(1) Average yield or cost for the three months ended September 30, 2000 and
1999 has been annualized and is not necessarily indicative of results for
the entire year.
(2) Yields do not include adjustments for tax-exempt interest because the
amount of such interest is not material.
(3) Loan fees included in interest income are not material. Nonaccrual loans
and leases are included in average loans and leases outstanding.
11
<PAGE>
<TABLE>
<CAPTION>
For the nine months ended September 30,
--------------------------------------------------------------------------
2000 1999
------------------------------------ -----------------------------------
Interest Average Interest Average
Average earned yield Average earned yield
balance or paid or cost (1) balance or paid or cost (1)
--------- ---------- ----------- --------- --------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Federal funds sold and other $ 11,088 $ 525 6.22% $ 4,033 $ 147 4.81%
Investment securities (2) 113,308 5,538 6.42% 107,483 4,630 5.68%
Loans and leases (3) 376,433 27,196 9.49% 266,215 18,264 9.05%
Allowance for loan and lease losses (5,016) - 0.00% (3,635) - 0.00%
--------- ---------- --------- ---------
Total interest-earning assets 495,813 33,259 8.81% 374,096 23,041 8.12%
Noninterest-earning assets:
Cash and due from banks 23,277 19,354
Other 17,555 15,531
--------- ---------
Total assets $ 536,645 $ 408,981
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
NOW and money market accounts $ 172,080 $ 5,325 4.13% $ 115,074 $ 2,698 3.13%
Savings 5,969 99 2.22% 6,619 110 2.22%
Certificates of deposit:
Under $100,000 25,554 1,085 5.67% 26,237 991 5.05%
$100,000 and over 103,709 4,605 5.93% 59,066 2,237 5.06%
--------- ---------- ----------- --------- --------- -----------
Total interest-bearing deposits 307,312 11,114 4.83% 206,996 6,036 3.90%
Other borrowings:
Securities and loans sold under agreements to
repurchase and federal funds purchased 44,819 1,834 5.38% 44,704 1,475 4.35%
FHLB advances 17,046 806 6.21% 16,539 656 5.23%
Company obligated mandatorily redeemable
preferred securities 7,372 544 9.99% - - 0.00%
--------- ---------- ----------- --------- --------- -----------
Total interest-bearing liabilities 376,549 14,298 4.78% 268,239 8,167 3.73%
Noninterest-bearing demand accounts 114,731 99,825
--------- ---------
Total deposits and interest-bearing liabilities 491,280 368,064
Other noninterest-bearing liabilities 2,757 2,408
--------- ---------
Total liabilities and preferred securities 494,037 370,472
Shareholders' equity 42,608 38,509
--------- ---------
Total liabilities and shareholders' equity $ 536,645 $ 408,981
========= =========
Net interest income $ 18,961 $ 14,874
========== =========
Net interest spread 4.03% 4.39%
Net interest margin 5.11% 5.32%
Ratio of average interest-earning assets to
average interest-bearing liabilities 131.67% 139.46%
liabilities
</TABLE>
--------------------------------------------------------------------------------
(1) Average yield or cost for the nine months ended September 30, 2000 and 1999
has been annualized and is not necessarily indicative of results for the
entire year.
(2) Yields do not include adjustments for tax-exempt interest because the
amount of such interest is not material.
(3) Loan fees included in interest income are not material. Nonaccrual loans
and leases are included in average loans and leases outstanding.
12
<PAGE>
Noninterest Income
Noninterest income for the third quarter of 2000 was flat at $1.1 million
when compared to noninterest income for the third quarter of 1999. Noninterest
income for the first nine months of 2000 was $3.5 milliom versus $3.4 million
for the same period in 1999.
Growth in deposit service charges has historically been moderate and has
not corresponded with the growth in deposit balances. This is due to us
offering our customers the choice of either paying for services in cash or by
maintaining additional noninterest-bearing account balances. Noninterest-
bearing demand accounts were $119.3 million as of September 30, 2000, or 28% of
total deposits. The forgone deposit service charges are mitigated by an
increase in our net interest margin, which improves with higher levels of
noninterest-bearing funding sources.
Also impacting other income was a decrease in operating lease rentals.
This was the result of Colorado Business Leasing concentrating its marketing
efforts in 2000 on originating direct finance leases, rather than operating
leases. Net investment in operating leases was $2.7 million at September 30,
2000, compared to $4.3 million at September 30, 1999.
The third quarter and year to date declines in other loan fees relates to
mortgage origination fees. Due to low product demand from our commercial
customer base, we decided to phase out a dedicated mortgage origination
department in 1999.
Positively affecting our noninterest income have been larger revenue
contributions from our Trust Division, which was established in 1998.
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------------- --------------------------------------
Increase (Decrease) Increase (Decrease)
2000 1999 Amount % 2000 1999 Amount %
------- ------- ------ ------ ------- ------- ------ ------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Deposit service charges $ 289 $ 307 $ (18) -6% $ 857 $ 847 $ 10 1%
Operating lease income 483 604 (121) -20% 1,521 1,742 (221) -13%
Other loan fees 44 50 (6) -12% 145 231 (86) -37%
Trust income 173 68 105 154% 454 173 281 162%
Other income 153 98 55 56% 442 274 168 61%
Gain on sale of other assets 5 13 (8) -62% 99 42 57 136%
Gain on sale of securities - - - - - 44 (44) -100%
------- ------- ------ ------ ------- ------- ------ ------
Total other income $ 1,147 $ 1,140 $ 7 1% $ 3,518 $ 3,353 $ 165 5%
======= ======= ====== ====== ======= ======= ====== ======
</TABLE>
13
<PAGE>
Noninterest Expense
Total noninterest expense increased by $405,000 to $4.5 million for the
three months ended September 30, 2000, up from $4.1 million for the three months
ended September 30, 1999. During this period, however, the efficiency ratio
before goodwill amortization improved to 58% for the quarter ended September 30,
2000, down from 62% for the comparable period in 1999. Noninterest expenses
increased to $13.0 million for the nine months ended September 30, 2000, up from
$11.7 million for the nine months ended September 30, 1999. The efficiency
ratio before goodwill amortization was 57% for the nine months ended September
30, 2000, compared to 63% for the first nine months of 1999. The improvement in
the efficiency ratio is the result of revenues growing at a faster rate than
expenses.
The increases in noninterest expenses reflect our ongoing investment in
personnel, technology and office space needed to accommodate internal growth. In
the second quarter of 1999, the Boulder bank relocated to a larger leased
facility. In addition, a second Boulder location was added in May 1999, the
Edwards location opened in September 1999, and the Denver drive-up location was
relocated to a larger, full-service center in May of 2000. We also launched
CoBiz Connect, Inc. in May, 2000, expanding our product offerings to include
employee benefits consulting, insurance brokerage and related administrative
support to employers.
Depreciation on operating leases decreased by $109,000 and $241,000,
respectively, for the three and nine months ended September 2000 compared to the
same periods in 1999. This was the result of Colorado Business Leasing
concentrating its marketing efforts in 2000 on originating direct finance
leases, rather than operating leases. The decrease in depreciation expense is
consistent with and partly offsets the decline in operating lease rental income.
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------------- --------------------------------------
Increase (Decrease) Increase (Decrease)
2000 1999 Amount % 2000 1999 Amount %
------- ------- ------ ------ ------- ------- ------ ------
(Dollars in thousands) (Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Salaries and employee benefits $ 2,402 $ 2,113 $ 289 14% $ 6,878 $ 6,142 $ 736 12%
Occupancy expenses, premises
and equipment 838 790 48 6% 2,492 2,001 491 25%
Depreciation on leases 395 504 (109) -22% 1,246 1,487 (241) -16%
Amortization of intangibles 111 110 1 1% 332 331 1 0%
Other operating expenses 796 620 176 28% 2,099 1,721 378 22%
------- ------- ------ ------ ------- ------- ------
Total other expense $ 4,542 $ 4,137 $ 405 10% $13,047 $11,682 $1,365 12%
======= ======= ====== ====== ======= ======= ======
Efficiency ratio 59% 64% 58% 64%
Efficiency ratio without goodwill 58% 62% 57% 63%
</TABLE>
14
<PAGE>
Provision and Allowance for Loan and Lease Losses
The provision for loan and lease losses was $320,000 for the three months
ended September 30, 2000, down from $371,000 for the three months ended
September 30, 1999. The provision for the nine months ended September 2000 was
$1.3 million, an increase of $256,000 from the nine months ended September 1999.
This increase was due to the increase in total loans and leases outstanding and
is not reflective of a deterioration of credit quality. Key indicators of
asset quality have remained favorable, while average outstanding loan amounts
have increased to $376.4 million for the first nine months of 2000, up from
$266.2 million for the first nine months of 1999. As of September 30, 2000, the
allowance for loan and lease losses amounted to $5.5 million, or 1.32% of total
loans and leases.
The allowance for loan and lease losses represents management's recognition
of the risks of extending credit and its evaluation of the quality of the loan
and lease portfolio. We maintain an allowance for loan losses based upon a
number of factors, including, among others, the amount of problem loans and
leases, general economic conditions, historical loss experience, and the
evaluation of the underlying collateral and holding and disposal costs. In
addition to unallocated allowances, specific allowances are provided for
individual loans when ultimate collection is considered questionable by
management after reviewing the current status of those loans that are
contractually past due and considering the net realizable value of the
collateral for the loans. Management actively monitors our asset quality and
will charge-off loans against the allowance for loan and lease losses when
appropriate and will provide specific loss allowances when necessary. Although
management believes it uses the best information available to make
determinations with respect to the allowance for loan and lease losses, future
adjustments may be necessary if economic conditions differ from the assumptions
used in making the initial determinations. In addition, the determination of
the allowance for loan and lease losses is subject to review by our regulators,
as part of the routine examination process, which may result in the
establishment of additional reserves based upon their judgment of information
available to them at the time of their examination. The following table
presents, for the periods indicated, an analysis of the allowance for loan and
lease losses and other related data.
15
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended Year Ended Nine Months Ended
September 30, 2000 December 31, 1999 September 30, 1999
------------------ ----------------- ------------------
(dollars in thousands)
<S> <C> <C> <C>
Balance of allowance for
loan and lease losses
at beginning of period $ 4,585 $ 3,271 $ 3,271
-------- -------- --------
Charge-offs:
Commercial 178 100 55
Real estate -- mortgage 16 - -
Real estate -- construction - 5 4
Consumer 2 80 26
Direct financing leases 225 - -
-------- -------- --------
Total charge-offs 421 185 85
-------- -------- --------
Recoveries:
Commercial 30 24 3
Real estate -- mortgage - - -
Real estate -- construction - - -
Consumer 5 2 -
Direct financing leases 2 - -
-------- -------- --------
Total recoveries 37 26 3
-------- -------- --------
Net charge-offs (384) (159) (82)
Provisions for loan and lease
losses charged to operations 1,262 1,473 1,006
-------- -------- --------
Balance of allowance for loan
and lease losses at end of period $ 5,463 $ 4,585 $ 4,195
======== ======== ========
Ratio of net charge-offs to average
loans and leases (1) ( .14%) ( .06%) ( .04%)
Average loans and leases
outstanding during the period $376,433 $281,796 $266,215
======== ======== ========
</TABLE>
(1) The ratios for the nine months ended September 30, 2000 and 1999 have been
annualized and are not necessarily indicative of the results for the entire
year.
Nonperforming Assets
Nonperforming assets consist of nonaccrual loans and leases, restructured
loans and leases, past due loans and leases, repossessed assets and other real
estate owned. Nonperforming assets were $881,000 as of September 30, 2000,
compared with $683,000 as of December 31, 1999 and $538,000 as of September 30,
1999. The following table presents information regarding nonperforming assets
as of the dates indicated:
16
<PAGE>
<TABLE>
<CAPTION>
At September 30, At December 31, At September 30,
2000 1999 1999
---------------- --------------- ----------------
(dollars in thousands)
<S> <C> <C> <C>
Nonperforming loans and leases:
Loans and leases 90 days or more delinquent and still accruing
interest $ 37 $ 49 $ 45
Nonaccrual loans and leases 844 634 493
------- ------- -------
Total nonperforming assets 881 683 538
Real estate acquired by foreclosure - - -
------- ------- -------
Total nonperforming assets $ 881 $ 683 $ 538
======= ======= =======
Allowance for loan and lease losses $ 5,463 $ 4,585 $ 4,195
======= ======= =======
Ratio of nonperforming assets to total assets 0.14% 0.14% 0.12%
Ratio of nonperforming loans and leases to total loans and leases 0.21 0.19 0.17
Ratio of allowance for loan and lease losses to total loans and
leases 1.32 1.31 1.36
Ratio of allowance for loan and lease losses to nonperforming loans
and leases 620.09 671.30 779.74
</TABLE>
Liquidity and Capital Resources
Our liquidity management objective is to ensure our ability to satisfy the
cash flow requirements of depositors and borrowers and to allow us to sustain
our operations. Historically, our primary source of funds has been customer
deposits. Scheduled loan and lease repayments are a relatively stable source of
funds, while deposit inflows and unscheduled loan and lease prepayments, which
are influenced by fluctuations in general levels of interest rates, returns
available on other investments, competition, economic conditions and other
factors, are relatively unstable. Borrowings may be used on a short-term basis
to compensate for reductions in other sources of funds (such as deposit inflows
at less than projected levels). Borrowings may also be used on a longer term
basis to support expanded lending activities and to match the maturity or
repricing intervals of assets.
We use various forms of short-term borrowings for cash management and
liquidity purposes on a limited basis. These forms of borrowings include federal
funds purchases, securities sold under agreements to repurchase, the State of
Colorado Treasury's Time Deposit program, and borrowings from the FHLB. The Bank
has approved federal funds purchase lines with six other banks with an aggregate
credit line of $51 million. In addition, the Bank may apply for up to $20
million of State of Colorado time deposits. The Bank also has a line of credit
from the FHLB that is limited by the amount of eligible collateral available to
secure it. Borrowings under the FHLB line are required to be secured by
unpledged securities and qualifying loans. At September 30, 2000, we had $115.6
million in unpledged securities and qualifying loans available to collateralize
FHLB borrowings and securities sold under agreements to repurchase. We also have
a $20 million revolving credit line facility with American National Bank and
Trust Company of Chicago available for liquidity needs.
17
<PAGE>
We also use dividends paid by the Bank to provide cash flow. However, the
approval of the Office of the Comptroller of the Currency is required prior to
the declaration of any dividend by the Bank if the total of all dividends
declared by the Bank in any calendar year exceeds the total of its net profits
of that year combined with the retained net profits for the preceding two years.
In addition, the Federal Deposit Insurance Corporation Improvement Act of 1991
provides that the Bank cannot pay a dividend if it will cause the Bank to be
"undercapitalized".
During the first nine months of 2000, cash and cash equivalents increased
by $12.9 million. This increase was primarily the result of $112.0 million in
cash provided by financing activities (mainly customer deposits and repurchase
agreements, and $20 million of proceeds from the issuance of Trust Preferred
Securities). Offsetting this increase was cash used in investing activities of
$106.1 million (mainly loan and lease originations and security purchases) and
net cash of $7.1 million provided by operating activities.
During the first nine months of 1999, cash and cash equivalents increased
by $5.0 million. This increase was primarily the result of $80.2 million in cash
provided by financing activities (mainly customer deposits and repurchase
agreements). Offsetting this increase was cash used in investing activities of
$81.7 million (mainly loan and lease originations) and net cash of $6.5 million
provided by operating activities.
Effects of Inflation and Changing Prices
The primary impact of inflation on our operations is increased operating
costs. Unlike most retail or manufacturing companies, virtually all of the
assets and liabilities of a financial institution such as the Bank are monetary
in nature. As a result, the impact of interest rates on a financial
institution's performance is generally greater than the impact of inflation.
Although interest rates do not necessarily move in the same direction, or to the
same extent, as the prices of goods and services, increases in inflation
generally have resulted in increased interest rates. Over short periods of
time, interest rates may not move in the same direction, or at the same
magnitude, as inflation.
Forward Looking Statements
The discussion in this report contains forward-looking statements, which
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we can give no
assurance that such expectations will prove to be correct. The forward-looking
statements involve risks and uncertainties that affect our operations, financial
performance and other factors as discussed in our filings with the Securities
and Exchange Commission. These risks include the impact of economic conditions
and interest rates, loan and lease losses, risks related to the execution of our
growth strategy, the possible loss of key personnel, factors that could affect
our ability to compete in our trade areas, changes in regulations and government
policies and other factors discussed in our filings with the Securities and
Exchange Commission.
18
<PAGE>
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As of September 30, 2000, there have been no material changes in the
quantitative and qualitative information about market risk provided pursuant to
Item 305 of Regulation S-K as presented in our Prospectus for the offering of
2,000,000 Capital Securities issued by Colorado Business Bankshares Capital
Trust I dated June 19, 2000.
Item 5. Other Information
On October 24, 2000, we announced that we had entered into a definitive
merger agreement with First Capital Bank of Arizona. Pursuant to that agreement,
a wholly owned subsidiary of the Parent will merge with and into First Capital
Bank, with First Capital Bank as the surviving corporation. After the merger,
First Capital Bank will be a wholly owned subsidiary of the Parent. First
Capital Bank is a four-year-old business bank headquartered in Phoenix with $104
million in assets and two full-service locations serving small- to medium-sized
companies in the Phoenix metropolitan area. Subject to the completion of due
diligence and shareholder and regulatory approval, the transaction is expected
to be completed in the first quarter of 2001. In the merger, First Capital Bank
shareholders will receive shares of our common stock in exchange for their
shares of First Capital Bank common stock. The number of shares of our common
stock to be received will be determined by a conversion ratio based on the
average closing price of our common stock for the 20 trading days ending three
trading days prior to the merger. If the average closing price is $14.50 or
less, the conversion ratio will be 2.621 shares of our common stock for each
share of First Capital Bank common stock. If the average closing price exceeds
$14.50, the conversion ratio will be calculated by adding half of the excess to
$38.00 and dividing that sum by the average closing price. First Capital Bank
can terminate the merger agreement if the average closing price is less than
$14.50. Also on October 24, 2000, we filed with the Securities and Exchange
Commission, pursuant to Rule 425 of the Securities Act of 1933, as amended, a
copy of the press release and employee notice related to the merger.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
10.35 First Amendment to Lease Agreement between Kesef, LLC and Colorado
Business Bankshares, Inc. dated May 1, 1998.
27.1 Financial Data Schedule as of September 30, 2000.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended September 30,
2000.
19
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
COLORADO BUSINESS BANKSHARES, INC.
Date: November 13, 2000 By: /s/ Steven Bangert
------------------ ---------------------------------------
Steven Bangert, Chief Executive Officer
and Chairman
Date: November 13, 2000 By: /s/ Richard J. Dalton
----------------- ---------------------------------------
Richard J. Dalton, Executive Vice
President and Chief Financial Officer
20
