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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): October 1, 1996
COMMUNITY FIRST BANKSHARES, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 0-19368 46-0391436
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
520 Main Avenue
Fargo, North Dakota 58124-0001
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (701) 298-5600
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Item 5. OTHER EVENTS.
RECENT ACQUISITION. On October 1, 1996 (the "Effective Date"), Trinidad
Acquisition Corporation ("TAC"), a wholly owned subsidiary of Community First
Bankshares, Inc. ("CFB" or the "Company"), merged with and into Financial
Bancorp, Inc. ("Financial") pursuant to an Agreement and Plan of Merger dated
as of March 8, 1996 by and between CFB, TAC and Financial (the "Merger
Agreement"). The 6,000 shares of outstanding Financial common stock were
converted into 538,803 shares of newly issued common stock of the Company,
according to the conversion ratio of 89.8014 shares of CFB common stock for
each share of Financial common stock (with cash being paid for fractional
shares of CFB common stock). The conversion ratio was calculated according
to the formula established by Financial and CFB in the Merger Agreement. The
market value of the Company's common stock issued in the merger was
approximately $12.7 million, based on the closing price of CFB common stock
on the Nasdaq National Market on September 30, 1996.
Pursuant to the Merger Agreement, all properties and assets of every kind
held by Financial at the Effective Date have become the properties and assets of
CFB, and CFB has become liable for all the debts, liabilities and other
obligations of Financial. Financial operated within the State of Colorado and
owned all of the outstanding capital stock of Trinidad National Bank, Trinidad,
Colorado. As of June 30, 1996, Financial had total consolidated assets of
approximately $69 million.
The merger with Financial will be accounted for as a pooling of
interests. Accordingly, all historical financial information of CFB will be
restated to combine the results of operations, assets and liabilities of CFB and
Financial.
RECENT LITIGATION. In February 1996, Richard L. Gordon filed a petition
in Douglas County District Court in Nebraska against Community First State
Bank, Alliance, Nebraska (formerly known as The Abbott Bank and referred to
herein as the "Alliance Bank"), which is a subsidiary of the Company. Gordon
is an attorney who represented The Abbott Bank through early 1994, prior to
the Company's acquisition of the bank in May 1995. Gordon has asserted claims
relating to alleged abuse of process in connection with certain investigations
and administrative actions commenced by state and federal banking regulators
in February 1994 relating to Gordon's role with the bank. Gordon has
subsequently amended the petition to add claims against four current and
former officers and directors of the bank, alleging that they tortiously
interefered with Gordon's business relationship with the bank and violated
federal civil rights laws. Gordon claims $10 million in actual damages from
the Alliance Bank and the individual defendants and seeks $10 million in
punitive damages from the individual defendants under the civil rights claim.
Pursuant to indemnification agreements entered into in connection with the
May 1995 acquisition of the Alliance Bank by the Company, James E. Abbott has
agreed to defend the action against the Alliance Bank. The individual
defendants have contacted the Alliance Bank about being indemnified in
connection with the claims against them. For these claims, the Alliance Bank
will seek indemnity under the director and officer liability insurance policy
of The Abbott Bank, which was maintained in effect following the acquisition.
Based upon the facts currently known to the Company and discussions with
counsel, and in light of the availability of indemnification in connection
with the acquisition of The Abbott Bank and/or director and officer liability
insurance coverage (subject to deductible amounts), the Company believes the
claims lack merit and ultimately are not likely to result in materials loss
to the Company or the Alliance Bank.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMMUNITY FIRST BANKSHARES, INC.
By /s/ Mark A. Anderson
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Mark A. Anderson, Executive Vice
Presiden and Chief Financial Officer
Dated: October 16, 1996
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