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RULE 424(b)(3)
SEC REGISTRATION NO. 333-49367
COMMUNITY FIRST BANKSHARES, INC.
7,000,000 SHARES OF COMMON STOCK
($.01 Par Value)
Community First Bankshares, Inc. (the "Company") has registered 7,000,000
shares of its Common Stock, $.01 par value (the "Common Stock"), which may be
offered by this Prospectus in acquisition transactions in exchange for shares of
capital stock, partnership interests or other assets representing an interest,
direct or indirect, in other companies or other entities, or in exchange for
assets used in or related to the business of such entities. The terms of such
acquisitions will generally be determined by direct negotiations with the owners
of the business or assets to be acquired or in the case of entities which are
more widely held, through exchange offers to stockholders or documents
soliciting the approval of statutory mergers, consolidations or sales of assets.
Underwriting discounts or commissions will generally not be paid by the Company.
However, under some circumstances, the Company may issue Common Stock covered by
this Prospectus to pay brokers' commissions incurred in connection with
acquisitions.
This Prospectus, as amended or supplemented, may also be used by persons
who receive Common Stock of the Company in acquisitions, including shares sold
hereunder and Common Stock received upon conversion of other equity securities
of the Company or received upon exercise of rights to exchange equity securities
of the Company's subsidiaries issued in acquisitions, and who wish to offer and
sell such shares without further registration on terms then obtainable. Such
persons may be deemed underwriters in connection with such transactions within
the meaning of the Securities Act of 1933, and any profits realized on such
sales by such persons may be regarded as underwriting compensation under the
Securities Act of 1933.
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "CFBX".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JUNE 11, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance with the
Exchange Act, the Company files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements and other information can be inspected and copied at the public
reference facilities that the Commission maintains at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located at 7 World Trade Center, 13th Floor, New York, New York 10048, and Suite
1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of these
materials can be obtained at prescribed rates from the Public Reference Section
of the Commission at the principal offices of the Commission, 450 Fifth Street,
N.W., Washington D.C. 20549. In addition, the Commission also maintains an
Internet web site at http://www.sec.gov containing reports, proxy and
information statements and other information regarding registrants, including
the Company, that file electronically with the Commission. The Company's Common
Stock is quoted on the NASDAQ National Market. Reports, proxy statements and
other information also may be inspected at the National Association of
Securities Dealers, Inc., 1735 K. Street N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-4 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Securities. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all the
information set forth in the Registration Statement, certain items of which are
contained in schedules and exhibits to the Registration Statement as permitted
by the rules and regulations of the Commission. Statements made in the
Prospectus concerning the contents of any documents referred to herein are not
necessarily complete. With respect to each such document filed with the
Commission as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description, and each such statement shall be deemed
qualified in its entirety by such reference.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars," "U.S.
dollars," or "U.S.$").
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission (File No. 0-19368) pursuant to the Exchange Act, are hereby
incorporated by reference in this Prospectus: (i) Annual Report on Form
10-K, for the year ended December 31, 1997, as amended on Form 10-K/A filed
with the Commission on March 27, 1998; (ii) the Definitive Proxy Statement of
the Company for the 1998 Annual Meeting of Shareholders held on April 28,
1998; (iii) Quarterly Report on Form 10-Q for the quarter ended March 31,
1998; (iv) Current Report on Form 8-K as filed with the Commission on May 6,
1998; (v) the description of the Company's Common Stock as set forth on its
Form 8-A Registration Statement filed with the Commission and effective on
August 13, 1991; (vi) the description of the Company's Common Stock and
undesignated Preferred Stock, as set forth on its Form 8-A Registration
Statement filed with the Commission on April 7, 1994, as amended on September
19, 1994; and (vii) the description of the Company's Preferred Stock Purchase
Rights, as set forth on its Form 8-A Registration Statement filed with the
Commission on January 9, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus shall be
deemed to be incorporated by reference herein. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed superseded or modified for purposes of this Prospectus to the extent that
a statement contained herein
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(or in any other subsequently filed document which also is incorporated
by reference herein or in any Prospectus Supplement by reference) modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus or any Prospectus Supplement.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or
oral request of any such person, a copy of any or all of the documents
incorporated by reference (other than exhibits to such documents which are
not specifically incorporated by reference in such documents.) Written
requests for such copies should be directed to the Company, 520 Main Avenue,
Fargo, North Dakota 58124-0001, Attention: Mark A. Anderson, Executive Vice
President, Chief Information Officer and Chief Financial Officer of the
Company, at (701) 298-5600.
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THE COMPANY
Community First Bankshares, Inc. (the "Company"), is a multi-bank
holding company that as of March 31, 1998 operated banks and bank branches
(the "Banks") in 146 communities in Arizona, Colorado, Iowa, Minnesota,
Nebraska, North Dakota, South Dakota, Utah, Wisconsin and Wyoming. Total
assets of the Company were approximately $5.2 billion as of March 31, 1998.
The Company operates community banks primarily in small and medium-sized
communities and the surrounding market areas. The Company provides a full
range of commercial and consumer banking services primarily to individuals
and businesses, including commercial and consumer banking, trust, insurance
and investment services.
The Company's strategy is to operate and continue to acquire banks and bank
branches in communities which generally have populations between 3,000 and
50,000 and are located in the Company's key target acquisition states of
Arizona, Colorado, Iowa, Kansas, Minnesota, Montana, Nebraska, North Dakota,
South Dakota, Wisconsin and Wyoming, and additionally in the adjacent states of
Idaho, Illinois, Missouri, New Mexico, Oklahoma and Utah (this seventeen state
area is collectively referred to as the "Acquisition Area"). Such communities
are believed to provide the Company with the opportunity for a stable,
relatively low-cost deposit base. The individual banks and bank branches sought
to be acquired by the Company generally have approximately $20 million to $150
million in assets.
PENDING ACQUISITIONS. On May 18, 1998, the Company signed a definitive
merger agreement with Guardian Bancorp ("Guardian"), a bank holding company
headquartered in Salt Lake City, Utah. At March 31, 1998, Guardian's
wholly-owned subsidiary, Guardian State Bank had total assets of
approximately $112 million and deposits of approximately $101 million and had
three banking locations in Salt Lake City, Utah and one banking location in
Sandy, Utah. In connection with the transaction, the Company will issue
approximately 1.5 million shares of common stock to holders of Guardian
common stock. The transaction is expected to be accounted for using the
pooling of interests method of accounting. The acquisition of Guardian by
the Company is subject to regulatory approval and is expected to close in the
third quarter of 1998.
On April 2, 1998, the Company signed a definitive merger agreement with
Western Bancshares of Las Cruces, Inc. ("Western"), a one-bank holding
company headquartered in Carlsbad, New Mexico. At March 31, 1998, Western's
wholly-owned subsidiary, Western Bank had total assets of approximately $170
million and deposits of approximately $142 million and had 5 banking offices
located in Las Cruces, Anthony and Hatch, New Mexico. In the transaction,
which is expected to be accounted for using the pooling of interests method
of accounting, the Company will issue approximately 1.9 million shares of
common stock to holders of Western common stock. The acquisition of Western
by the Company is subject to regulatory approval and is expected to close on
July 1, 1998.
RECENT SIGNIFICANT ACQUISITIONS. On May 7, 1998, the Company acquired
FNB, Inc. ("FNB"), a two-bank holding company whose subsidiary banks maintain
banking offices in Greeley and Fort Collins, Colorado. At acquisition, FNB
had total assets of approximately $120 million and deposits of approximately
$109 million. The Company issued approximately 1,135,406 shares of its
common stock to holders of FNB common stock in the transaction, as adjusted
to reflect the Company's two-for-one stock split in the form of a 100% stock
dividend in May 1998 (the "Stock Dividend"). The transaction was accounted
for using the pooling of interests method of accounting,
On April 30, 1998, the Company acquired Pioneer Bank of Longmont
("Pioneer"), Longmont, Colorado, with offices in Berthoud, Longmont, Lyons and
Niwot, Colorado. At acquisition, Pioneer had total assets of approximately
$138 million and total deposits of approximately $128 million. The Company
issued approximately 1,432,000 shares of its common stock (as adjusted to
reflect the Stock Dividend) to the holders of Pioneer common stock in connection
with the transaction. The transaction was accounted for using the pooling of
interests method of accounting.
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On April 3, 1998, the Company acquired Community Bancorp, Inc. ("CBI"),
the parent company of Community First National Bank, Thornton, Colorado, with
two banking offices in Thornton, Colorado and one banking office in Arvada,
Colorado. At acquisition, CBI had total assets of approximately $78 million
and total deposits of approximately $72 million. In connection with the
transaction, the Company issued approximately 852,000 shares of its common
stock (as adjusted to reflect the Stock Dividend) to holders of CBI common
stock. The transaction was accounted for using the pooling of interests
method of accounting.
On January 23, 1998, the Company acquired 37 banking offices located in
Arizona, Colorado and Utah (the "Bank One Branches") from three subsidiary banks
of Banc One Corporation (the "Bank One Banks"). At closing, the Bank One
Branches had total deposits of approximately $730 million and loans of
approximately $61 million. The Company paid a purchase price premium of
approximately $43.8 million, equal to 6% of the deposits of the Bank One
Branches at closing. The acquisition was accounted for as an acquisition of
assets and assumption of liabilities and resulted in the recognition by the
Company of deposit-based intangibles in an amount equal to the purchase price
premium of approximately $43.8 million. Following the closing, the 25 Arizona
offices and four Utah offices acquired from the Bank One Banks were merged into
the Republic bank in Phoenix, Arizona that was recently acquired by the Company.
The eight acquired Colorado offices were merged into the Company's existing
Colorado affiliate bank. On January 28, 1998, the Company signed an agreement
to sell one of the former Bank One Branches located in Colorado. The branch
sale is expected to close on June 12, 1998.
On December 1 and November 24, 1997, respectively, the Company acquired
First National Summit Bankshares, Inc., Gunnison, Colorado ("Summit") and
Republic National Bancorp, Inc., Phoenix, Arizona ("Republic"). At closing,
Summit's subsidiary bank had total assets of approximately $90 million,
deposits of approximately $82 million and banking offices in five Colorado
communities, and Republic's subsidiary bank had total assets of approximately
$54 million, deposits of approximately $49 million and one banking office in
Phoenix, Arizona. In connection with the Summit and Republic mergers, the
Company issued 736,038 shares of its common stock (as adjusted to reflect the
Stock Dividend) to the holders of Republic common stock and 629,668 shares of
its common stock (as adjusted to reflect the Stock Dividend) to the holders
of Summit common stock, respectively. In addition, the former holders of
Summit preferred stock received, in the aggregate, $1 million in cash for
their preferred stock surrendered in the merger plus accrued but unpaid
dividends. Each of these business combinations was accounted for as a
pooling of interests.
On July 14, 1997, the Company purchased KeyBank National Association,
Cheyenne, Wyoming ("KeyBank Wyoming"), from KeyCorp, its parent corporation,
("KeyCorp"), for a purchase price of $135 million. KeyBank Wyoming has been
renamed "Community First National Bank." At closing, KeyBank Wyoming had total
assets of approximately $1.1 billion and 28 banking offices located in 24
communities in Wyoming, including Cheyenne, Laramie, Casper, Sheridan and
Jackson. The Company believes its Wyoming banking network is the largest in
Wyoming, providing a full range of commercial and consumer banking services
throughout the state. The transaction was accounted for as a business
combination using the purchase method of accounting and resulted in the
recognition of goodwill by the Company of approximately $60 million.
On December 18, 1996, the Company acquired Mountain Parks Financial Corp.
("Mountain Parks"), a bank holding company that operated a state chartered bank
with full service commercial banking facilities in
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17 Colorado communities. The facilities in two of these communities were
sold following the acquisition. At September 30, 1996, Mountain Parks had
total assets of approximately $581.8 million. The Company issued
approximately 10.4 million shares of its common stock (as adjusted to reflect
the Stock Dividend) for a total transaction value of approximately $142.2
million, based on market value of the shares as of the date of closing. The
transaction was a business combination accounted for as a pooling of
interests.
GENERAL. The Company provides the Banks with the advantages of
affiliation with a multi-bank holding company, such as access to its lines of
financial services, including trust products and administration, insurance
and investment services, data processing services, credit policy formulation
and review, investment management and specialized staff support, while
granting substantial autonomy to managers of the Banks with respect to
day-to-day operations, customer service decisions and marketing. The Banks
are encouraged to participate in community activities, support local
charities and community development, and otherwise to serve their communities.
The Company's principal executive offices are located at 520 Main Avenue,
Fargo, North Dakota 58124-0001 and its telephone number is (701) 298-5600. The
Company also maintains a web site at http://www.cfbx.com.
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SUMMARY CONSOLIDATED FINANCIAL DATA
The following table sets forth certain consolidated financial data
concerning the Company. The summary financial data for each of the five years
ended December 31, 1997 is derived from the audited consolidated financial
statements of the Company, and related notes thereto, incorporated herein by
reference, except for end of period balance sheet amounts at December 31, 1993
which are derived from unaudited consolidated financial statements of the
Company. The summary financial data should be read in conjunction with the
consolidated financial statements of the Company, and the related notes thereto,
and management's discussion and analysis of financial condition and results of
operations incorporated by reference herein.
<TABLE>
<CAPTION>
Three Months
Ended March 31, Year Ended December 31,
------------------------- ----------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------ ------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
HISTORICAL OPERATING DATA:
Interest income . . . . . . . . . . . . $ 90,999 $ 58,309 $ 278,597 $ 229,426 $ 192,868 $ 143,237 $ 121,146
Interest expense. . . . . . . . . . . . 39,047 23,914 117,253 95,234 82,891 53,468 47,271
-------- -------- --------- --------- --------- --------- ---------
Net interest income . . . . . . . . . . 51,952 34,395 161,344 134,192 109,977 89,769 73,875
Provision for loan losses . . . . . . . 1,339 1,230 5,352 6,757 2,711 1,839 2,149
-------- -------- --------- --------- --------- --------- ---------
Net interest income after
provision for loan losses. . . . . . 50,613 33,165 155,992 127,435 107,266 87,930 71,726
Noninterest income. . . . . . . . . . . 12,348 7,038 36,564 27,370 22,488 18,992 18,158
Noninterest expense . . . . . . . . . . 43,682 24,949 125,190 104,288 82,593 70,241 60,854
-------- -------- --------- --------- --------- --------- ---------
Income from continuing operations
before income taxes and
extraordinary item . . . . . . . . . 19,279 15,254 67,366 50,517 47,161 36,681 29,030
Provision for income taxes. . . . . . . 5,426 5,138 21,516 18,007 17,208 13,952 10,775
-------- -------- --------- --------- --------- --------- ---------
Income from continuing operations
before extraordinary item. . . . . . 13,853 10,116 45,850 32,510 29,953 22,729 18,255
Discontinued Operations:
Income from discontinued operations,
net of taxes. . . . . . . . . . . (68) 681 967 0 0 0 0
Income before extraordinary
item and cumulative effect
of accounting change . . . . . . . . 13,785 10,797 46,817 32,510 29,953 22,729 18,255
Extraordinary item, net of tax. . . . . 0 (265) (265) 0 0 0 0
Cumulative effect of accounting
change . . . . . . . . . . . . . . . 0 0 0 0 0 0 359
-------- -------- --------- --------- --------- --------- ---------
Net income. . . . . . . . . . . . . . . 13,785 10,532 46,552 32,510 29,953 22,729 18,614
Dividends on preferred stock. . . . . . 0 0 0 1,610 1,610 1,091 0
-------- -------- --------- --------- --------- --------- ---------
Net income applicable to common
equity . . . . . . . . . . . . . . . $ 13,785 $ 10,532 $ 46,552 $ 30,900 $ 28,343 $ 21,638 $ 18,614
-------- -------- --------- --------- --------- --------- ---------
-------- -------- --------- --------- --------- --------- ---------
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE:
Basic income per share from
continuing operations before
extraordinary item and cumulative
effect of accounting change . . . $ 0.34 $ .29 $ 1.24 $ 0.94 $ 0.92 $ 0.75 $ 0.66
Discontinued operations. . . . . . . 0 0.02 0.03 0 0 0 0
Extraordinary item (1) . . . . . . . 0 (0.01) (0.01) 0 0 0 0
Cumulative effect of accounting
change. . . . . . . . . . . . . . 0 0 0 0 0 0 0.01
-------- -------- --------- --------- --------- --------- ---------
Basic net income . . . . . . . . . . $ 0.34 $ 0.30 $ 1.26 $ 0.94 $ 0.92 $ 0.75 $ 0.67
Diluted income per share from
continuing operations before
extraordinary item and
cumulative effect of accounting
change . . . . . . . . .. . . . . $ 0.33 $ 0.27 $ 1.20 $ 0.90 $ 0.87 $ 0.70 $ 0.64
Discontinued operations. . . . . . . 0 0.02 0.03 0 0 0 0
Extraordinary item (1) . . . . . . . 0 (0.01) (0.01) 0 0 0 0
Cumulative effect of accounting
change. . . . . . . . . . . . . . 0 0 0 0 0 0 0.01
Diluted net income . . . . . . . . . $ 0.33 $ 0.28 $ 1.22 $ 0.90 $ 0.87 $ 0.70 $ 0.65
</TABLE>
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<TABLE>
<CAPTION>
Three Months
Ended March 31, Year Ended December 31,
---------------------- -----------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------ ------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Average common shares outstanding:
Basic. . . . . . . . . . . . . . . . 40,659,812 34,986,156 36,949,498 33,018,578 30,722,740 28,757,806 27,676,668
Diluted. . . . . . . . . . . . . . . 41,397,456 37,727,816 38,138,156 36,284,754 34,335,300 32,254,500 28,778,512
HISTORICAL OPERATING RATIOS AND OTHER
DATA:
Return on average assets. . . . . . . . 1.12% 1.40% 1.31% 1.13% 1.24% 1.13% 1.10%
Return on average common
stockholders' equity. . . . . . . . . 16.52% 18.77% 18.13% 15.69% 18.19% 16.77% 16.64%
Net interest margin. . . . . . . . . . 4.95% 5.27% 5.17% 5.32% 5.06% 4.95% 4.74%
Net charge-offs to average loans. . . . 0.21% 0.20% 0.24% 0.22% 0.17% 0.00% 0.08%
Ratio of earnings to fixed charges (2):
Excluding interest on deposits. . . 5.63x 6.55x 5.61x 4.14x 4.46x 5.23x 7.60x
Including interest on deposits. . . 1.49x 1.64x 1.57x 1.52x 1.55x 1.66x 1.61x
FINANCIAL CONDITION DATA
(END OF PERIOD):
Assets. . . . . . . . . . . . . . . . . $5,158,045 $3,008,484 $4,855,526 $3,116,398 $2,769,976 $2,130,619 $1,883,794
Loans . . . . . . . . . . . . . . . . . 2,713,565 1,998,247 2,637,057 2,064,108 1,767,193 1,330,146 1,037,666
Investment securities (3) . . . . . . . 1,874,797 732,605 1,679,389 729,236 717,342 613,239 653,722
Deposits. . . . . . . . . . . . . . . . 4,254,716 2,493,500 3,619,334 2,537,440 2,359,716 1,794,565 1,627,989
Long-term debt. . . . . . . . . . . . . 119,529 18,644 116,476 46,750 81,288 38,092 48,354
Company-obligated mandatorily
redeemable preferred securities of
CFB Capital I and II . . . . . . . . 120,000 60,000 120,000 0 0 0 0
Preferred stockholders'
equity . . . . . . . . . . . . . . 0 0 0 22,988 23,000 23,000 0
Common stockholders' equity . . . . . . 345,376 248,739 339,294 221,583 181,004 134,701 125,071
Book value per common share . . . . . . 8.49 6.67 8.35 6.46 5.63 4.61 4.39
Tangible book value per
common share. . . . . . . . . . . . . 5.07 5.60 5.95 5.32 4.54 4.04 3.96
FINANCIAL CONDITION RATIOS
(END OF PERIOD):
Nonperforming assets to total loans
and OREO. . . . . . . . . . . . . . . 0.54% 0.46% 0.61% 0.70% 0.31% 0.34% 0.62%
Allowance for loan losses to
total loans . . . . . . . . . . . . . 1.33% 1.31% 1.37% 1.27% 1.29% 1.30% 1.38%
Allowance for loan losses to
nonperforming loans . . . . . . . . . 332% 290% 286% 201% 608% 537% 296%
REGULATORY CAPITAL RATIOS
(END OF PERIOD):
Tier 1 capital. . . . . . . . . . . . . 9.34% 11.58% 10.65% 8.88% 8.51% 10.64% 10.16%
Total capital . . . . . . . . . . . . . 12.78% 13.25% 14.24% 11.10% 11.18% 13.46% 13.44%
Leverage ratio. . . . . . . . . . . . . 6.24% 9.10% 7.25% 6.62% 6.10% 7.12% 6.12%
NET INCOME AND RATIOS EXCLUDING
GOODWILL AND OTHER INTANGIBLE ASSETS
AMORTIZATION AND BALANCES:
Income applicable to common
equity. . . . . . . . . . . . . . . . $ 15,452 $ 11,387 $ 51,017 $ 33,714 $ 30,522 $ 23,194 $ 19,948
Diluted earnings per common share . . . $ 0.37 $ 0.30 $ 1.34 $ 0.97 $ 0.94 $ 0.75 $ 0.69
Return on average assets. . . . . . . . 1.29% 1.54% 1.46% 1.25% 1.34% 1.22% 1.18%
Return on average common
stockholders' equity. . . . . . . . . 18.52% 20.30% 19.86% 17.12% 19.58% 17.98% 17.83%
</TABLE>
- ------------------------------------
(1) Represents the after-tax effect of pre-payment penalties and unamortized
debt issuance costs in connection with redemption of certain indebtedness.
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(2) For purposes of computing the ratio of earnings to fixed charges, earnings
represent income before income taxes, extraordinary items and fixed
charges. Fixed charges represent interest expense, including the interest
component of rental expense, and preferred stock dividends. Fixed
charges attributable to the preferred stock dividends are assumed to equal
the amount of pre-tax income that would be necessary to pay such dividends.
(3) Includes available-for-sale securities and held-to-maturity securities.
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RISK FACTORS
INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING MATTERS IN CONNECTION
WITH AN INVESTMENT IN THE SECURITIES IN ADDITION TO THE OTHER INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT. INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR IN ANY PROSPECTUS SUPPLEMENT MAY CONTAIN "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995, WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH
AS "MAY," "WILL," "EXPECT," "ANTICIPATE," "ESTIMATE" OR "CONTINUE" OR THE
NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. THE
FOLLOWING MATTERS AND OTHER FACTORS NOTED THROUGHOUT THIS PROSPECTUS, ANY
PROSPECTUS SUPPLEMENT ACCOMPANYING THIS PROSPECTUS AND ANY DOCUMENT INCORPORATED
BY REFERENCE INTO THIS PROSPECTUS, AS WELL AS ANY EXHIBITS AND ATTACHMENTS TO
THIS PROSPECTUS AND SUCH PROSPECTUS SUPPLEMENT, CONSTITUTE CAUTIONARY STATEMENTS
IDENTIFYING IMPORTANT FACTORS WITH RESPECT TO ANY SUCH FORWARD-LOOKING
STATEMENTS, INCLUDING CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE REFLECTED IN SUCH FORWARD-LOOKING
STATEMENTS.
RISKS INVOLVED IN ACQUISITION STRATEGY
The Company's acquisitions will continue to present material risks. The
Company has grown and intends to continue to grow primarily through acquisitions
of banks and other financial institutions. Such acquisitions involve risks of
adversely changing results of operations, unforeseen liabilities or asset
quality problems of acquired entities and other conditions beyond the control of
the Company, such as adverse personnel relations, loss of customers because of
change of identity and deterioration in local economic conditions. In
connection with the acquisition of financial institutions, the Company may from
time to time acquire new businesses that are different from its core business of
commercial banking and which present operating and strategic risks different
from those confronted in its core business. These various acquisition risks can
be heightened by larger transactions. To date, the Bank One Branches, KeyBank
Wyoming and Mountain Parks represent the largest institutions acquired by the
Company, and have been completed at or near the same time as a number of other
completed or proposed mergers. See "The Company."
Managing growth through acquisitions, including integration and training
of personnel, combination of office and operations procedures and related
matters, is a difficult process. In connection with its recent significant
acquisitions, the Company has experienced challenges with data and item
processing conversion, management training, staffing and other operational
integration areas. These issues have resulted in the need for management and
support personnel to allocate increased time to the integration process, in
some cases slowing the acquired institutions' marketing and business
development efforts. Although the Company has taken steps to address the
issues resulting from recent acquisitions, the Company may experience such
issues in connection with future acquisitions, and there can be no assurance
that these problems will not result in disruption or expense.
Management believes future growth in the assets and earnings of the
Company will depend in significant part on consummation of further
acquisitions. The ability of the Company to pursue this strategy depends in
part on its capital position and, in the case of cash acquisitions, on its
cash assets or ability to acquire cash. Further, acquisition candidates may
not be available in the future on terms favorable to the Company. The
Company must compete with a variety of individuals and institutions,
including major regional bank holding companies, for suitable acquisition
candidates. Although the Company has focused its attention on smaller
markets, in which the Company believed there was less competition from the
money center banks and major regional bank holding companies, the Company
recently acquired operations in metropolitan areas. The Company may make
further acquisitions of companies with operations in metropolitan areas, in
which case
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it will face more competition for such acquisitions from larger institutions.
Further, certain regional holding companies have focused in some cases on
the smaller markets traditionally targeted by the Company, and there can be
no assurance that the acquisition activities of competitors in these markets
will not increase. Such competition is likely to affect the Company's
ability to make acquisitions, increase the price that the Company pays for
certain acquisitions and increase the Company's costs in analyzing possible
acquisitions.
NEED FOR ADDITIONAL FINANCING
The Company's ability to execute its business strategy depends to a
significant degree on its ability to obtain additional indebtedness and equity
capital. Other than as described in this Prospectus or any Prospectus
Supplement, the Company has no commitments for additional borrowings or sales of
equity capital and there can be no assurance that the Company will be successful
in consummating any such future financing transactions on terms satisfactory to
the Company, if at all. Factors which could affect the Company's access to the
capital markets, or the costs of such capital, include changes in interest
rates, general economic conditions and the perception in the capital markets of
the Company's business, results of operations, leverage, financial condition and
business prospects. Each of these factors is to a large extent subject to
economic, financial, competitive and other factors beyond the Company's control.
In addition, covenants under the Company's current and future debt securities
and credit facilities may significantly restrict the Company's ability to incur
additional indebtedness and to issue Preferred Stock.
YEAR 2000 ISSUE
The Company is evaluating the potential impact of what is commonly referred
to as the "Year 2000" issue, concerning the inability of certain information
systems to properly recognize and process dates containing the year 2000 and
beyond. If not corrected, these systems could fail or create erroneous results.
The Company is in the process of determining which of its systems, if any, may
present Year 2000 issues, the magnitude of these issues, and the steps that may
be necessary to correct them. Therefore, the potential liabilities and costs
associated with Year 2000 compliance cannot be estimated with certainty at this
time. Regardless of the Year 2000 compliance of the Company's systems, there
can be no assurance that the Company will not be adversely affected by the
failure of others to become Year 2000 compliant. Such risks may include
potential losses related to loans made to third parties whose businesses are
adversely affected by the Year 2000 issue, the disruption or inaccuracy of data
provided by non-Year 2000 compliant third parties and business disruption caused
by the failure of service providers, such as security and data processing
companies, to become Year 2000 compliant. Because of these uncertainties, there
can be no assurance that the Year 2000 issue will not have a material financial
impact in any future period.
KEY PERSONNEL
Continued profitability of the Banks and the Company are dependent on a
limited number of key persons, including Donald R. Mengedoth, the President and
Chief Executive Officer, Mark A. Anderson, the Executive Vice President, Chief
Financial Officer and Chief Information Officer, Ronald K. Strand, the Executive
Vice President, Banking Group, and David E. Groshong, the Executive Vice
President, Financial Services, of the Company. There would likely be a
difficult transition period in case the services of any of these individuals
were lost to the Company because of death or other reasons. There is no
assurance that the Company will be able to retain its current key personnel or
attract additional qualified key persons as needed.
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OFFERED SECURITIES
The securities of the Company which may be offered from time to time by
this Prospectus consist of up to 7,000,000 shares of Common Stock, which the
Company proposes to issue in a continuing program of acquisitions. The
consideration for any acquisition may consist of notes or other evidences of
debt, assumptions of liabilities, equity securities, cash, or a combination
thereof, as determined from time to time by negotiations between the Company and
the owners of businesses or properties to be acquired. In general, the terms of
acquisitions will be determined by direct negotiations between the
representatives of the Company and the owners of the businesses or properties to
be acquired or, in the case of entities more widely held, through exchange
offers to shareholders or documents soliciting approval of statutory mergers,
consolidations or sales of assets. Underwriting discounts or commissions will
generally not be paid by the Company. However, under some circumstances, the
Company may issue Common Stock covered by this Prospectus or cash to pay
brokers' commissions incurred in connection with acquisitions.
This Prospectus, as appropriately amended or supplemented, has also been
prepared for use by persons who receive shares issued by the Company in
acquisitions, including Common Stock received upon conversion of other equity of
the Company or its subsidiaries issued in acquisitions, and who wish to offer
and sell such shares, on terms then available (such persons being referred to
under this caption as "Selling Shareholders"). Resales may be made pursuant to
this Prospectus, as amended or supplemented, pursuant to Rule 145(d) under the
Securities Act of 1933, or pursuant to another exemption from the registration
requirements of such Act. Selling Shareholders may be deemed underwriters
within the meaning of the Securities Act of 1933, and profits realized on
resales by Selling Shareholders under certain circumstances may be regarded as
underwriting compensation under the Securities Act of 1933.
Resales by Selling Shareholders may be made directly to investors or
through a securities firm acting as an underwriter, broker or dealer. When
resales are to be made through a securities firm, such securities firm may be
engaged to act as the Selling Shareholder's agent in the sale of shares by such
Selling Shareholder, or such securities firm may purchase shares from the
Selling Shareholder as principal and thereafter resell such shares from time to
time. The fees earned by or paid to such securities firm may be the normal stock
exchange commission or negotiated commissions or underwriting discounts to the
extent permissible. In addition, such securities firm may effect resales
through other securities dealers, and customary commissions or concessions to
such other dealers may be allowed. Sales of shares may be at negotiated prices,
at fixed prices, at market prices or at prices related to market prices then
prevailing. Any such sales may be made on the NASDAQ National Market or other
exchange on which such shares are traded, in the over-the-counter market, by
block trade, in special or other offerings, directly to investors or through a
securities firm acting as agent or principal, or a combination of such methods.
A participating securities firm may be indemnified against certain civil
liabilities, including liabilities under the Securities Act of 1933. Any
participating securities firm may be deemed to be an underwriter within the
meaning of the Securities Act of 1933, and any commissions earned by such firm
may be deemed to be underwriting discounts or commissions under such Act.
A Prospectus Supplement, if required, will be filed under Rule 424(c) under
the Securities Act of 1933, disclosing the name of the Selling Shareholder, the
participating securities firm, if any, the number of shares involved, and other
details of resales, as appropriate.
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DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 82,000,000 shares of stock,
consisting of 80,000,000 shares of Common Stock, par value $0.01 per share,
and 2,000,000 shares of Preferred Stock, $.01 par value per share, of which
230,000 shares are designated as 7% Cumulative Convertible Preferred Stock
and 150,000 shares are designated as Series A Junior Participating Preferred
Stock. On April 28, 1998, the Company's shareholders approved an amendment
to the Company's Restated and Amended Certificate of Incorporation to
increase the number of authorized shares of the Company's Common Stock from
30,000,000 shares to 80,000,000 shares. The number of authorized shares of
Preferred Stock did not change. On May 15, 1998, the Company completed a
two-for-one stock split in the form of a 100% stock dividend to shareholders
of record on May 1, 1998.
As of May 27, 1998, the Company had issued and outstanding 44,139,536
shares of Common Stock, net of treasury shares, and no issued and outstanding
shares of Preferred Stock. As of such date, there were approximately 1,440
holders of record of the outstanding shares of Common Stock and an additional
estimated 7,000 beneficial holders.
COMMON STOCK
The following summary of the characteristics of the Company's Common Stock
is qualified in its entirety by reference to the Company's Amended and Restated
Certificate of Incorporation (the "Certificate of Incorporation"), its Amended
Bylaws (the "Bylaws"), and the Delaware General Corporation Law, as amended (the
"Delaware Law").
GENERAL. There are no preemptive rights, conversion rights, or redemption
or sinking fund provisions with respect to the shares of Common Stock. All of
the outstanding shares of Common Stock are duly and validly authorized and
issued, fully paid and non-assessable.
VOTING. Holders of Common Stock (the "Common Stockholders") are entitled
to one vote for each share held on each matter submitted to a vote of the Common
Stockholders; except that each stockholder may cumulate votes in the election of
directors. In such elections, each Common Stockholder will have a number of
votes equal to the number of shares held by such holder multiplied by the number
of directors to be elected. Such votes may be cast for a single candidate or
divided among any number of candidates. In certain circumstances, cumulative
voting rights allow the holders of less than a majority of Common Stock to elect
directors when such holders may not be able to elect any directors if cumulative
voting was not allowed.
DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS. Subject to the rights of the
Preferred Stock, the Common Stockholders are entitled to receive dividends as
and when declared by the Board of Directors of the Company. Under Delaware
corporate law, the Company may declare and pay dividends out of surplus, or if
there is no surplus, out of net profits for the fiscal year in which the
dividend is declared and/or the preceding year. No dividends may be declared,
however, if the capital of the Company has been diminished by depreciation,
losses or otherwise to an amount less than the aggregate amount of capital
represented by any issued and outstanding stock having a preference on
distribution. The Company's ability to pay dividends on its issued and
outstanding Shares may be limited, from time to time, by covenants in connection
with outstanding indebtedness of the Company.
Federal banking laws and regulations limit the Company's ability to redeem
its equity securities. In general, bank holding companies are required to
obtain the prior approval of the Federal Reserve Board before
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any redemption of permanent equity or other capital instruments, if the
aggregate amount of such redemptions over a twelve-month period exceeds ten
percent of the net worth of the company . However, a bank holding company is
not required to obtain the prior Federal Reserve Board approval for the
redemption if (i) both before and immediately after the redemption, the bank
holding company is well capitalized; (ii) the bank holding company is well
managed; and (iii) the bank holding company is not the subject of any
unresolved supervisory issues. The Company currently satisfies all of these
criteria. Finally, any perpetual preferred stock with a feature permitting
redemption at the option of the issuer may qualify as capital only if the
redemption is subject to the prior approval of the Federal Reserve Board.
If the Company were liquidated, the Common Stockholders would be entitled
to receive, pro rata, all assets available for distribution to them after full
satisfaction of the Company's liabilities and any payment applicable to the
Preferred Stock then outstanding.
SHAREHOLDER RIGHTS PLAN. Pursuant to a Rights Agreement dated as of
January 5, 1995 (the "Rights Agreement") between the Company and Norwest Bank
Minnesota, N.A., as Rights Agent, each share of Common Stock has attached one
preferred share purchase right (a "Right"). Except as set forth below, each
Right entitles the registered holder to purchase from the Company one
one-hundredth (1/100) of a share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Junior Participating Preferred Stock"), at
a price of $63 per one one-hundredth of a share (the "Purchase Price").
Until the Distribution Date, as hereinafter defined, the Rights will be
transferred with and only with Common Stock certificates. The Rights will
separate from the shares of Common Stock and a "Distribution Date" for the
Rights will occur upon the earlier of ten days following (i) a public
announcement that, without the prior consent of the Board of Directors, a person
or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of voting
securities having 15% or more of the voting power of the Company (the "Stock
Acquisition Date"), or (ii) the commencement of (or a public announcement of an
intention to make) a tender offer or exchange offer which would result in any
person or group and related persons having beneficial ownership of voting
securities having 15% or more of the voting power of the Company.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on January 5, 2005, unless earlier redeemed by the Company.
In the event that any person becomes the beneficial owner of 15% or more of
the voting power of the Company, ten days thereafter (the "Flip-In Event") each
holder of a Right will thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price of the Right, Common Stock (or, in
certain circumstances, a combination of cash, other property, Common Stock or
other securities) which has a value of two times the Purchase Price of the Right
(such right being called the "Flip-In Right"). In the event that the Company is
acquired in a merger or other business combination transaction where the Company
is not the surviving corporation or in the event that 50% or more of its assets
or earning power is sold, proper provision shall be made so that each holder of
a Right will thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price of the Right, common stock of the acquiring
entity which has a value of two times the Purchase Price of the Right (such
right being called the "Flip-Over Right"). The holder of a Right will continue
to have the Flip-Over Right whether or not such holder exercises the Flip-In
Right. Upon the occurrence of the Flip-In Event, any Rights that are or were at
any time owned by an Acquiring Person shall become null and void insofar as they
relate to the Flip-In Right.
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The Purchase Price payable, and the number of shares of Junior
Participating Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution under certain circumstances.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the voting power of
the Company and prior to the acquisition by such person or group of 50% or more
of the voting power of the Company, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one one-hundredth of a share of Junior Participating Preferred Stock
(or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges) per Right (subject to
adjustment).
At any time prior to the earlier to occur of (i) the tenth day after the
Stock Acquisition Date, or (ii) the expiration of the Rights, the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), at such time as the Board of Directors shall establish.
Additionally, the Continuing Directors may, following the Stock Acquisition
Date, redeem the then outstanding Rights in whole, but not in part, at the
Redemption Price provided that either (a) the Acquiring Person reduces his
beneficial ownership to less than 15% of the voting power of the Company in a
manner which is satisfactory to the Continuing Directors and there are no other
Acquiring Persons, or (b) such redemption is incidental to a merger or other
business combination transaction or series of transactions involving the Company
but not involving an Acquiring Person or any person who was an Acquiring Person.
The redemption of Rights described in the preceding sentence shall be effective
only after ten (10) business days prior notice. Upon the effective date of the
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
The Junior Participating Preferred Stock purchasable upon exercise of the
Rights will be nonredeemable. Each share of Junior Participating Preferred
Stock will have a preferential quarterly dividend in an amount equal to 100
times the dividend declared on each share of Common Stock. In the event of
liquidation, the holders of Junior Participating Preferred Stock will receive a
preferred liquidation payment of $100 per whole share of Junior Participating
Preferred Stock. Each whole share of Junior Participating Preferred Stock will
have 100 votes, voting together with the Common Stock. In the event of any
merger, consolidation or other transaction in which Common Stock are exchanged,
each share of Junior Participating Preferred Stock will be entitled to receive
100 times the amount and type of consideration received per share of Common
Stock. The rights of the Junior Participating Preferred Stock as to dividends
and liquidations, and in the event of mergers and consolidations, are protected
by customary anti-dilution provisions.
Until a Right is exercised, it will not entitle the holder to any rights as
a shareholder of the Company (other than those as an existing shareholder),
including, without limitation, the right to vote or to receive dividends.
The terms of the Rights may be amended by the Board of Directors of the
Company (i) prior to the Distribution Date in any manner, and (ii) on or after
the Distribution Date to cure any ambiguity, to correct or supplement any
provision of the Rights Agreement which may be defective or inconsistent with
any other provisions, or in any manner not adversely affecting the interests of
the holders of the Rights.
INDEMNIFICATION AND LIMITED LIABILITY. The Company's Certificate of
Incorporation and Bylaws require the Company to indemnify the directors and
officers of the Company to the fullest extent permitted by law. In addition,
as permitted by Delaware Law, the Company's Certificate of Incorporation and
Bylaws provide that no director of the Company will be personally liable to
the Company or its stockholders for monetary
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damages for such director's breach of duty as a director, except from
liability for (i) any breach of the director's duty of loyalty to the Company
or its stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) any
liability under Section 174 of Delaware Law for unlawful distributions or
(iv) any transaction from which the director derived an improper personal
benefit. This provision of the Certificate of Incorporation will limit the
remedies available to a stockholder who is dissatisfied with a decision of
the Board of Directors protected by this provision, and such stockholder's
only remedy in that circumstance may be to bring a suit to prevent the action
of the Board of Directors. In many situations, this remedy may not be
effective, including instances when stockholders are not aware of a
transaction or an event prior to action of the Board of Directors in respect
of such transaction or event.
Subject to certain limitations, the Company's officers and directors are
insured against losses arising from claims made against them for wrongful acts
which they may become obligated to pay or for which the Company may be required
to indemnify them.
RESTRICTION ON BUSINESS COMBINATIONS. Section 203 of the Delaware
General Corporation Law prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless (i) prior to the date of the
business combination, the transaction is approved by the Board of Directors
of the corporation, (ii) upon consummation of the transaction which resulted
in the stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the outstanding voting stock, or (iii) on or
after such date the business combination is approved by the Board of
Directors of the corporation and by the affirmative vote of at least 66-2/3%
of the outstanding voting stock which is not owned by the interested
stockholder. A "business combination" includes mergers, asset sales and
other transactions resulting in a financial benefit to the stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) 15% or more of the
corporation's voting stock. None of the Company's stockholders is currently
classified as an "interested person."
OTHER MATTERS. The Common Stock is listed on NASDAQ National Market under
the symbol "CFBX." Norwest Bank Minnesota, N.A., Minneapolis, Minnesota, is the
transfer agent and registrar for the Common Stock.
PREFERRED STOCK
The description of certain provisions of the Preferred Stock set forth
below does not purport to be complete and is subject to and qualified in its
entirety by reference to the Company's Certificate of Incorporation, and the
Certificate of Designation relating to each series of Preferred Stock.
GENERAL. The Board of Directors of the Company has the authority, without
approval of the Company's stockholders, to issue a maximum of 2,000,000 shares
of Preferred Stock, $.01 par value, and to establish one or more classes or
series of Preferred Stock having such voting powers, and such designations,
preferences and relative, participating, optional and other special rights, and
qualifications, limitations or restrictions thereof, as the Board of Directors
may determine. There are currently reserved for issuance up to 150,000 shares
of Junior Participating Preferred Stock issuable under the Rights Agreement.
The authority of the Board of Directors with respect to each such class or
series shall include, but is not limited to, the determination of: (i) the
distinctive serial designation of such class or series and the number of shares
constituting such class or series, (ii) the dividend rate for such class or
series, and whether dividends shall be cumulative, (iii) whether the shares of
such class or series are redeemable and, if so, the terms and
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conditions of such redemption, (iv) the obligation, if any, to establish a
sinking fund, (v) the terms, if any, under which such class or series is
convertible or exchangeable for shares of any other class or series, (vi)
whether the shares have voting rights and, if so, the terms and conditions of
such voting rights, (vii) the rights of the shares of such class or series in
the event of voluntary or involuntary liquidation, dissolution or winding up
of the Company, and (viii) any other relative rights, powers, preferences,
qualifications, limitations or restrictions thereof relating to such class or
series. The shares of Preferred Stock of any one class or series shall be
identical with each other in all respects except as to the dates from and
after which dividends shall cumulate, if cumulative. The Preferred Stock
will have the dividend, liquidation and voting rights set forth below unless
otherwise provided in the accompanying Prospectus Supplement relating to a
particular series of Preferred Stock. Preferred Stock will be fully paid and
nonassessable upon issuance against full payment of the purchase price
therefor.
DIVIDEND RIGHTS. Holders of the Preferred Stock of each series will be
entitled to receive when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefor, cash dividends at such rates
and on such dates as are set forth in the accompanying Prospectus Supplement.
Such rate may be fixed or variable or both. Each such dividend will be payable
to the holders of record as they appear on the stock books of the Company on
such record dates as will be fixed by the Board of Directors of the Company.
Dividends on any series of the Preferred Stock may be cumulative or
noncumulative, as provided in the accompanying Prospectus Supplement. If the
Board of Directors of the Company fails to declare a dividend payable on a
dividend payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company will
have no obligation to pay the dividend accrued for that period, whether or not
dividends are declared for any future period. Dividends on shares of each
series of Preferred Stock for which dividends are cumulative will accrue from
the date set forth in the accompanying Prospectus Supplement.
RIGHTS UPON LIQUIDATION. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of each
series of Preferred Stock will be entitled to receive out of assets of the
Company available for distribution to stockholders, before any distribution of
assets is made to holders of Common Stock, liquidating distributions in the
amount set forth in the accompanying Prospectus Supplement plus an amount equal
to accrued and unpaid dividends. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the amounts payable with
respect to the Preferred Stock of any series are not paid in full, the holders
of the Preferred Stock of such series will share ratably in any such
distribution of assets of the Company in proportion to the full respective
preferential amounts (which may include accumulated dividends) to which they are
entitled. After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of such series of Preferred Stock will have
no right or claim to any of the remaining assets of the Company. Neither the
sale of all or a portion of the Company's assets nor the merger or consolidation
of the Company into or with any other corporation shall be deemed to be a
dissolution, liquidation or winding up, voluntary or involuntary, of the
Company.
VOTING RIGHTS. Except as indicated in the accompanying Prospectus
Supplement, or except as expressly required by Delaware Law, the holders of
the Preferred Stock will not be entitled to a vote on matters submitted for a
vote of Company stockholders. In the event the Company issues shares of a
series of the Preferred Stock, unless otherwise indicated in the Prospectus
Supplement relating to such series, each share will be entitled to one vote
on matters on which holders of such series are entitled to vote. In the case
of any series of Preferred Stock having one vote per share on matters on
which holders of such series are entitled to vote, the voting power of such
series, on matters on which holders of such series and holders of any other
series of Preferred Stock are entitled to vote as a single class, will depend
on the number of shares in such series, not the aggregate stated value,
liquidation preference or initial offering price of the shares of such series
of the Preferred Stock.
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So long as any Preferred Stock of any series remains outstanding, the
Company will not, without the consent of the holders of the outstanding
Preferred Stock of such series and outstanding shares of all series of Preferred
Stock ranking on a parity with the Preferred Stock of such series (hereinafter
the "Preference Stock") either as to dividends or the distribution of assets
upon liquidation, dissolution or winding up and upon which like voting rights
have been conferred and are then exercisable, by a vote of at least two-thirds
of all such outstanding Preferred Stock and Preference Stock voting together as
a class, given in person or by proxy, either in writing or at a meeting, (i)
authorize, create or issue, or increase the authorized or issued amount of, any
class or series of stock ranking prior to the Preferred Stock with respect to
payment of dividends or the distribution of assets on liquidation, dissolution
or winding up, or (ii) amend, alter or repeal, whether by merger, consolidation
or otherwise, the provisions of the Company's Restated Certificate of
Incorporation, as amended, or of the resolutions contained in a Certificate of
Designation for any series of the Preferred Stock designating such series of the
Preferred Stock and the preferences and relative, participating, optional or
other special rights and qualifications, limitations and restrictions thereof,
so as to materially and adversely affect any right, preference, privilege or
voting power of the Preferred Stock or the holders thereof; provided, however,
that any increase in the amount of the authorized Preferred Stock or Preference
Stock or the creation and issuance of other series of Preferred Stock or
Preference Stock, or any increase in the amount of authorized shares of any
series of Preferred Stock or Preference Stock, in each case ranking on a parity
with or junior to the Preferred Stock with respect to the payment of dividends
and the distribution of assets upon liquidation, dissolution or winding up will
not be deemed to materially and adversely affect such rights, preferences,
privileges or voting powers.
LEGAL MATTERS
The validity of the Company's Common Stock offered hereby will be passed
upon by Lindquist & Vennum P.L.L.P., Minneapolis, Minnesota. Patrick Delaney, a
member of Lindquist & Vennum, is a director and a holder of Common Stock and
options to purchase Common Stock of the Company.
EXPERTS
The consolidated financial statements of the Company at December 31,
1997 and 1996, and for each of the three years in the period ended December
31, 1997, incorporated by reference in this Prospectus and Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon appearing and incorporated by reference
elsewhere herein which, as to the year 1995, are based in part on the report
of Arthur Andersen LLP, formerly independent accountants for Mountain Parks
Financial Corp. As of the date of their report and during the period covered
by the financial statements on which they reported, Arthur Andersen LLP were
independent public accountants with respect to Mountain Parks Financial
Corp. within the meaning of the Securities Act and the applicable published
rules and regulations thereunder. The consolidated financial statements
referred to above are incorporated by reference in reliance upon such reports
given upon the authority of such firms as experts in accounting and auditing.
The financial statements of KeyBank National Association (Wyoming) as of
and for the year ended December 31, 1996 appearing in the Company's Current
Report on Form 8-K/A filed on September 22, 1997 with the Securities and
Exchange Commission have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance on such report given upon the authority of such firm as experts in
accounting and auditing.
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No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Company. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to its date. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which it relates. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy such securities in any circumstances in which such offer or solicitation is
unlawful.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE. . . . . . . . . . . . . . . . . . . . . . . . . 2
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
OFFERED SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
DESCRIPTION OF CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . 13
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
7,000,000 SHARES
COMMUNITY FIRST
BANKSHARES, INC.
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PROSPECTUS
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June 11, 1998
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