COMMUNITY FIRST BANKSHARES INC
10-Q, 2000-05-11
STATE COMMERCIAL BANKS
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 31, 2000

OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to                

Commission file number 0-19368

COMMUNITY FIRST BANKSHARES, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)		   46-0391436
(I.R.S. Employer Identification No.)
 
 520 Main Avenue Fargo, ND
(Address of principal executive offices)		  
 		  
 58124
(Zip Code)

(701) 298-5600
(Registrant's telephone number, including area code)


    Indicated 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 / /

    At May 8, 2000, 48,270,864 shares of Common Stock were outstanding.

COMMUNITY FIRST BANKSHARES, INC.

FORM 10-Q

QUARTER ENDED MARCH 31, 2000

INDEX

 
   PAGE
PART I—FINANCIAL INFORMATION:    
 
Item 1. Condensed Consolidated Financial Statements and Notes		  
 		  
3-9
 
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		  
 		  
10-14
 
Item 3. Quantitative and Qualitative Disclosure About Market Risk		  
 		  
14
 
PART II—OTHER INFORMATION:		  
 		  
 
 
Item 1. Legal Proceedings		  
 		  
15
 
Item 2. Changes in Securities		  
 		  
15
 
Item 3. Defaults Upon Senior Securities		  
 		  
15
 
Item 4. Submission of Matters to a Vote of Security Holders		  
 		  
15
 
Item 5. Other Information		  
 		  
15
 
Item 6. Exhibits and Reports on Form 8-K		  
 		  
15
 
SIGNATURES		  
 		  
16

2

COMMUNITY FIRST BANKSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 
   March 31,
2000
   December 31,
1999
  
 
   (Dollars in thousands,
except per share data)
(Unaudited)

  
ASSETS  
Cash and due from banks   $ 218,170   $ 247,051  
Federal funds sold and securities purchased under agreements to resell     11,585     4,775  
Interest-bearing deposits     3,020     4,648  
Available-for-sale securities     1,913,298     1,937,517  
Held-to-maturity securities (fair value: 3/31/00—$75,097, 12/31/99—$74,248)     75,097     74,248  
Loans     3,687,553     3,690,353  
Less: Allowance for loan losses     (50,832 )   (48,878 )
   
 
 
Net loans     3,636,721     3,641,475  
Bank premises and equipment, net     123,118     125,457  
Accrued interest receivable     50,203     51,030  
Intangible assets     121,489     126,378  
Other assets     95,452     89,656  
   
 
 
Total assets   $ 6,248,153   $ 6,302,235  
   
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY  
Deposits:              
Noninterest-bearing   $ 623,150   $ 616,861  
Interest-bearing:              
Savings and NOW accounts     2,231,329     2,276,705  
Time Accounts over $100,000     630,200     579,514  
Other time accounts     1,422,174     1,436,783  
   
 
 
Total deposits     4,906,853     4,909,863  
Federal funds purchased and securities sold under agreements to repurchase     217,696     252,760  
Other short-term borrowings     458,735     471,665  
Long-term debt     69,964     75,622  
Accrued interest payable     31,808     31,949  
Other liabilities     29,922     33,107  
   
 
 
Total liabilities     5,714,978     5,774,966  
Company-obligated mandatorily redeemable preferred securities of CFB Capital I & II     120,000     120,000  
Shareholders' equity:              
Common stock, par value $.01 per share:              
Authorized Shares—80,000,000              
Issued Shares—51,021,896     510     510  
Capital surplus     192,071     192,071  
Retained earnings     283,375     276,502  
Unrealized gain on available-for-sale securities, net of tax     (52,072 )   (44,896 )
Less cost of common stock in treasury—              
March 31, 2000—595,426 shares              
December 31, 1999—885,964 shares     (10,709 )   (16,918 )
   
 
 
Total shareholders' equity     413,175     407,269  
   
 
 
Total liabilities and shareholders' equity   $ 6,248,153   $ 6,302,235  
   
 
 

See accompanying notes.

3

COMMUNITY FIRST BANKSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 
   For the Three Months Ended
March 31,
 
   2000
   1999
 
   (Dollars in thousands,
except per share data)
(Unaudited)
Interest income:            
Loans   $ 84,985   $ 82,012
Investment securities     32,226     32,381
Interest-bearing deposits     68     116
Federal funds sold and resale agreements     151     220
   
 
Total interest income     117,430     114,729
Interest expense:            
Deposits     37,880     38,317
Short-term and other borrowings     9,688     5,562
Long-term debt     1,367     1,677
   
 
Total interest expense     48,935     45,556
   
 
Net interest income     68,495     69,173
Provision for loan losses     4,990     4,881
   
 
Net interest income after provision for loan losses     63,505     64,292
   
 
Noninterest income:            
Service charges on deposit accounts     9,663     8,053
Insurance commissions     2,409     1,972
Fees from fiduciary activities     1,497     1,295
Net gain on sales of available-for-sale securities     4     530
Other     4,912     4,630
   
 
Total noninterest income:     18,485     16,480
   
 
Noninterest expense:            
Salaries and employee benefits     27,186     26,481
Net occupancy     8,150     7,973
FDIC insurance     274     214
Legal and accounting     801     681
Other professional service     1,037     1,552
Data processing     1,136     954
Company-obligated mandatorily redeemable preferred securities of CFB Capital I & II     2,561     2,561
Amortization of intangibles     2,623     2,621
Other     10,379     9,950
   
 
Total noninterest expense     54,147     52,987
Income before income taxes     27,843     27,785
Provision for income taxes     9,180     9,530
   
 
Net income   $ 18,663   $ 18,255
   
 
Earnings per common and common equivalent share:            
Basic net income   $ 0.37   $ 0.36
   
 
Diluted net income     0.37     0.36
   
 
Average common shares outstanding:            
Basic     50,312,866     50,161,750
Diluted     50,613,345     50,770,799
   
 

4

COMMUNITY FIRST BANKSHARES, INC.

STATEMENTS OF COMPREHENSIVE INCOME

 
   For the Three Months Ended March 31,
  
 
   2000
   1999
  
 
   (Dollars in thousands,
except per share data)
(Unaudited)

  
Net income   $ 18,663   $ 18,255  
Other comprehensive income, net of tax:              
Unrealized gains on securities:              
Unrealized holding gains arising during period     (7,176 )   (8,127 )
Less: Reclassified adjustment for gains included in net income     (2 )   (318 )
   
 
 
Other comprehensive income     (7,178 )   (8,445 )
   
 
 
Comprehensive income   $ 11,485   $ 9,810  
   
 
 

5

COMMUNITY FIRST BANKSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
   For the Three Months
Ended March 31,
  
 
   2000
   1999
  
 
   (In thousands)
(Unaudited)

  
Cash flows from operating activities:              
Net income   $ 18,663   $ 18,255  
Adjustments to reconcile net income to net cash provided by operating activities:              
Provision for loan losses     4,990     4,881  
Depreciation     3,712     3,752  
Amortization of intangibles     2,623     2,621  
Net of amortization of premiums & discounts on securities     131     187  
Decrease in interest receivable     827     3,251  
(Decrease) increase in interest payable     (141 )   1,557  
Other—net     (2,100 )   (7,823 )
   
 
 
Net cash provided by operating activities     28,705     26,681  
 
 Cash flows from investing activities:		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Net (decrease) increase in interest-bearing deposits     1,628     (5,393 )
Purchases of available-for-sale securities     (53,500 )   (304,742 )
Maturities of available-for-sale securities     59,037     234,565  
Sales of available-for-sale securities, net of gains     6,760     36,247  
Purchases of held-to-maturity securities     (849 )   (1,018 )
Maturities of held-to-maturity securities     —     167  
Net (decrease) increase in loans     (236 )   50,434  
Net increase in bank premises and equipment     (1,373 )   (4,095 )
   
 
 
Net cash provided by investing activities     11,467     6,165  
 
 Cash flows from financing activities:		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Net (decrease) in demand deposits, NOW accounts and savings accounts     (39,087 )   (90,012 )
Net increase (decrease) in time accounts     36,077     (19,414 )
Net (decrease) increase in short-term & other borrowings     (47,994 )   31,177  
Net decrease (increase) in long-term debt     (5,658 )   963  
Net proceeds from issuance of common stock     —     45  
Purchase of common stock held in treasury     (1,420 )   (3,999 )
Sale of common stock held in treasury     3,408     1,549  
Common stock dividends paid     (7,569 )   (6,697 )
   
 
 
Net cash used in financing activities     (62,243 )   (86,388 )
   
 
 
Net decrease in cash and cash equivalents     (22,071 )   (53,542 )
Cash and cash equivalents at beginning of period     251,826     274,657  
   
 
 
Cash and cash equivalents at end of period   $ 229,755   $ 221,115  
   
 
 

6

COMMUNITY FIRST BANKSHARES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2000

Note A—BASIS OF PRESENTATION

    The accompanying unaudited condensed consolidated financial statements, which include the accounts of Community First Bankshares, Inc. (the "Company"), its wholly-owned data processing, credit origination, insurance agency and properties subsidiaries, and its thirteen wholly-owned subsidiary banks, have been prepared in accordance with generally accepted accounting principles for interim financial information. 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 considered necessary for fair presentation have been included.

    Basic earnings per common share is calculated by dividing net income applicable to common equity by the weighted average number of shares of common stock outstanding.

    Diluted earnings per common share is calculated by dividing net income applicable to common equity by the weighted average number of shares of common stock outstanding. The weighted average number of shares of common stock outstanding is increased by the number of shares of common stock that would be issued assuming the exercise of stock options and warrants during each period. Such adjustments to the weighted average number of shares of common stock outstanding are made only when such adjustments dilute earnings per share.

Note B—BUSINESS DIVESTITURES

    On January 14, 2000, the Company, through its Arizona subsidiary, completed the sale of its office in Nephi, Utah. The Nephi office was acquired on January 23, 1998 as part of the Company's purchase and assumption of 37 offices of Banc One Corporation located in Arizona, Colorado and Utah. The transaction included the disposition of approximately $17 million in deposits.

    On February 11, 2000, the Company, through its Arizona subsidiary, completed the sale of its office in Richfield, Utah. The Richfield office was acquired on January 23, 1998 as part of the Company's purchase and assumption of 37 offices of Banc One Corporation located in Arizona, Colorado and Utah. The transaction included the disposition of approximately $16 million in deposits.

Note C—SUBSEQUENT EVENTS

    On April 10, 2000, the Company announced its intention to repurchase up to 5 million shares of the Company's common stock. This share repurchase represents approximately 10 percent of the shares of common stock outstanding at the date of the announcement. Shares will be purchased primarily on the open market, with the timing dependent on market conditions and any pending acquisitions.

7

Note D—INVESTMENTS

    The following is a summary of available-for-sale and held-to-maturity securities at March 31, 2000 (in thousands):

 
   Available-for-Sale Securities
 
   Amortized
Cost
   Gross
Unrealized
Gains
   Gross
Unrealized
Losses
   Estimated
Fair
Value
United States Treasury   $ 113,202   $ 5   $ 1,538   $ 111,669
United States Government agencies     480,061     11     21,027     459,045
Mortgage-backed securities     1,126,251     256     49,052     1,077,455
Collateralized mortgage obligations     22,293     12     128     22,177
State and Political Securities     151,130     468     4,717     146,881
Other securities     104,849     299     9,077     96,071
   
 
 
 
    $ 1,997,786   $ 1,051   $ 85,539   $ 1,913,298
   
 
 
 
 
   Held-to-Maturity Securities
 
   Amortized
Cost
   Gross
Unrealized
Gains
   Gross
Unrealized
Losses
   Estimated
Fair
Value
Other securities   $ 75,097     —     —   $ 75,097
   
 
 
 
    $ 75,097   $ —   $ —   $ 75,097
   
 
 
 

    Proceeds from the sale of available-for-sale securities during the three months ended March 31, 2000 and 1999 were $6,764,000 and $36,777,000, respectively. Gross gains of $5,000 and $530,000 were realized on sales during 2000 and 1999, respectively. Gross losses of $1,000 were realized on these sales during 2000. Gains and losses on disposition of these securities were computed using the specific identification method.

Note E—LOANS

    The composition of the loan portfolio at March 31, 2000 was as follows (in thousands):

Real estate   $ 1,356,055  
Real estate construction     408,596  
Commercial     995,463  
Consumer and other     686,772  
Agricultural     240,667  
   
 
      3,687,553  
Less allowance for loan losses     (50,832 )
   
 
Net loans   $ 3,636,721  
   
 

8

Note F—FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

    In the normal course of business, the Company is party to financial instruments with off-balance sheet risk to meet the financing needs of its customers and to manage its interest rate risk. These financial instruments include commitments to extend credit and letters of credit. The contract or notional amounts of these financial instruments at March 31, 2000 were as follows (in thousands):

Commitments to extend credit   $ 662,950
Letters of credit     23,559

Note G—SUBORDINATED NOTES

    Long-term debt at March 31, 2000 included $60 million of 7.30% Subordinated Notes issued in June 1997. These notes are due June 30, 2004, with interest payable semi-annually. At March 31, 2000, $48 million qualified as Tier 2 capital.

Note H—INCOME TAXES

    The reconciliation between the provision for income taxes and the amount computed by applying the statutory federal income tax rate was as follows (in thousands):

 
   March 31, 2000
  
35% of pretax income   $ 9,745  
State income tax, net of federal tax benefit     463  
Tax-exempt interest     (1,476 )
Amortization of goodwill     230  
Other     218  
   
 
Provision for income taxes   $ 9,180  

Note I—SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS

 
   Three months ended March 31
 
   2000
   1999
 
   (in thousands)
Unrealized loss on available-for-sale securities   $ 11,791   $ 13,080

9


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Basis of Presentation

    The following is a discussion of the Company's financial condition as of March 31, 2000 and December 31, 1999, and its results of operations for the three month periods ended March 31, 2000 and 1999.

Merger and Acquisition Activity

    The Company has made a number of acquisitions during these periods. Each of these acquisitions has had an effect upon the Company's results of operations and financial condition.

    Pooling of Interests Transactions.  In the following transactions during the periods presented, the Company accounted for the acquisition using the pooling of interests method.

Pooling of Interests Transactions

Date of
Acquisition
   Location and/or
Name of Main Office
of Acquired Entity
   Number of
Locations at
Date of Acquisition
   Total Assets
at Date of
Acquisition
(in millions)
December 1999   Ramsey, Minnesota   1   $ 35
October 1999   El Cajon, California   6     252

    On December 21, 1999, the Company issued approximately 317,000 shares of common stock to acquire River Bancorp, Incorporated ("River Bancorp"), a one-bank holding company headquartered in Ramsey, Minnesota. At acquisition, River Bancorp had approximately $35 million in assets at one office in Ramsey, Minnesota. Because this acquisition was not material to the Company's financial condition or operating results, the Company's financial information has not been restated to reflect this merger.

    On October 7, 1999, the Company issued approximately 3,022,000 shares of common stock to acquire Valley National Corporation ("Valley National"), a one-bank holding company headquartered in El Cajon, California. At acquisition, Valley National had approximately $252 million in assets at six banking offices located in California. The acquisition was accounted for using the pooling of interests method. The Company's consolidated financial information has been restated to reflect this merger.

Overview

    For the three months ended March 31, 2000 net income was $18.7 million, an increase of $408,000, or 2.2%, from the $18.3 million earned during the 1999 period. The Company's basic earnings per common share for the first quarter of 2000 were $0.37, compared to $0.36 in 1999. Diluted earnings per common share for the first quarter of 2000 were $0.37.

    Return on average assets was 1.20% for the first quarter of 2000 and for the 1999 period. Return on average common shareholders' equity for the 2000 period was 18.53%, compared to 17.53% in the 1999 period.

Results of Operations

    Net interest income for the three months ended March 31, 2000 was $68.5 million, a decrease of $678,000, or 1.0%, from the net interest income of $69.2 million earned during the 1999 period. The decrease was principally due to the increase in interest expense associated with a rising interest rate

10

environment. The net interest margin of 5.00% for the period ended March 31, 2000 was down from 5.11% for the 1999 period.

    The provision for loan losses for the three months ended March 31, 2000 was $5.0 million, an increase of $109,000, or 2.2%, from the $4.9 million provision during the 1999 period. This increase reflects the Company's objective of maintaining adequate reserve levels in recognition of loan growth in the Company's subsidiaries.

    Noninterest income for the three months ended March 31, 2000 was $18.5 million, an increase of $2.0 million, or 12.1%, from the 1999 level of $16.5 million. The increase included principally an increase of $1.6 million in deposit service charges, an increase of $839,000 in fees and commissions on investment security sales, and an increase of $437,000 in insurance commissions.

    Noninterest expense for the three months ended March 31, 2000 was $54.1 million, an increase of $1.1 million, or 2.2%, from the level of $53.0 million during the 1999 period. The increase was limited to 2.2% in part due to the Company's continued emphasis on cost reduction initiatives implemented during 1999. As a result, for the three months ended March 31, 2000 salary and benefits increased $705,000, net occupancy increased $177,000 and other expense increased $429,000. Other professional services decreased $515,000 from the 1999 period.

    The provision for income taxes for the three months ended March 31, 2000 was $9.2 million, a decrease of $350,000, or 3.7%, from the 1999 level of $9.5 million, due primarily to the increase in tax-exempt income during the current period.

Financial Condition

    Total loans were $3.7 billion at March 31, 2000 and at December 31, 1999.

    The following table presents the Company's balance of each major category of loans:

 
   March 31, 2000
   December 31, 1999
  
 
   Amount
   Percent of
Total Loans
   Amount
   Percent of
Total Loans
  
 
   (Dollars in Thousands)

  
Loan category:                      
Real estate   $ 1,356,055   36.77 % $ 1,319,678   35.76 %
Real estate construction     408,596   11.08 %   434,924   11.79 %
Commercial     995,463   27.00 %   994,624   26.95 %
Consumer and other     686,772   18.62 %   681,423   18.46 %
Agricultural     240,667   6.53 %   259,704   7.04 %
   
 
 
 
 
Total loans     3,687,553   100.00 %   3,690,353   100.00 %
         
       
 
Less allowance for loan losses     (50,832 )       (48,878 )    
   
     
     
Total   $ 3,636,721       $ 3,641,475      
   
     
     

11

    At March 31, 2000, nonperforming assets were $32.5 million, a slight decrease of $82,000 or .3% from the $32.6 million level at March 31, 1999. The decrease was principally due to a decrease of $217,000 in non-accrual loans, partially offset by an increase of $142,000 in other real estate owned. At March 31, 2000, nonperforming loans as a percent of total loans were .70%, down from the December 31, 1999 level of .71%. OREO was $6.7 million at March 31, 2000, a slight increase of $142,000 from $6.5 million at December 31, 1999.

    Nonperforming assets of the Company are summarized in the following table:

Loans
   March 31, 2000
   December 31, 1999
  
Nonaccrual loans   $ 25,547   $ 25,764  
Restructured loans     277     284  
   
 
 
Nonperforming loans     25,824     26,048  
Other real estate owned     6,667     6,525  
   
 
 
Nonperforming assets   $ 32,491   $ 32,573  
   
 
 
Loans 90 days or more past due but still accruing   $ 3,973   $ 1,949  
   
 
 
Nonperforming loans as a percentage of total loans     .70 %   .71 %
Nonperforming assets as a percentage of total assets     .52 %   .52 %
Nonperforming assets as a percentage of loans and OREO     .88 %   .88 %
Total Loans     3,687,553     3,690,353  
Total Assets     6,248,153     6,302,235  

    At March 31, 2000 the allowance for loan losses was $50.8 million, a decrease of $2.4 million from the December 31, 1999 balance of $53.3 million. Net charge-offs during the three months ended March 31, 2000 were $451,000 less than those incurred during the three months ended March 31, 1999.

    At March 31, 2000 the allowance for loan losses as a percentage of total loans was 1.38%, a decrease from the March 31, 1999 level of 1.53%. During the three months ended March 31, 2000, net charge-offs decreased to $3.0 million. These charge-offs reflect the Company's continued periodic review of the existing loan portfolios.

12

    The following table sets forth the Company's allowance for loans losses:

 
   March 31,
  
 
   2000
   1999
  
 
   (Dollars in thousands)

  
Balance at beginning of period   $ 48,878   $ 51,860  
Charge-offs:              
Real estate     298     1,229  
Real estate construction     17     —  
Commercial     1,559     764  
Consumer and other     1,939     3,005  
Agricultural     92     187  
   
 
 
Total charge-offs     3,905     5,185  
   
 
 
Recoveries:              
Real estate     25     721  
Real estate construction     1     —  
Commercial     80     125  
Consumer and other     697     791  
Agricultural     66     61  
   
 
 
Total recoveries     869     1,698  
Net charge-offs     3,036     3,487  
Provision charged to operations     4,990     4,881  
   
 
 
Balance at end of period   $ 50,832   $ 53,254  
   
 
 
Allowance as a percentage of total loans     1.38 %   1.53 %
Annualized net charge-offs to average loans outstanding     0.33 %   0.40 %
Total Loans     3,687,553     3,483,616  
Average Loans     3,673,378     3,507,034  

    The investment portfolio, including available-for-sale securities and held-to-maturity securities, was $2.0 billion at March 31, 2000 and December 31, 1999. At March 31, 2000, the investment portfolio represented 31.8% of total assets, compared with 31.9% at December 31, 1999. In addition to investment securities, the Company had investments in interest-bearing deposits of $3.0 million at March 31, 2000, a $2 million decrease from the $5 million at December 31, 1999.

    Total deposits were $4.9 billion both at March 31, 2000 and at December 31, 1999. Noninterest-bearing deposits at March 31, 2000 were $623 million, an increase of $6 million, or 1.0%, from $617 million at December 31, 1999. The Company's core deposits as a percent of total deposits were 87.2% and 88.2% as of March 31, 2000 and December 31, 1999, respectively. Interest-bearing deposits were $4.2 billion at March 31, 2000, a decrease of $9 million from the $4.3 billion at December 31, 1999.

    Short-term borrowings of the Company were $459 million as of March 31, 2000, and $472 million as of December 31, 1999.

13

    Long-term debt of the Company was $70 million as of March 31, 2000, a decrease of $6 million, or 7.9%, from the $76 million as of December 31, 1999.

    Shareholders' equity increased $6 million to $413 million at March 31, 2000 from $407 million at December 31, 1999. At March 31, 2000, the Company's Tier 1 capital, total risk-based capital and leverage ratios were 10.39%, 12.60%, and 7.51%, respectively, compared to minimum required levels of 4%, 8% and 3%, respectively (subject to change and the discretion of regulatory authorities to impose higher standards in individual cases). At March 31, 2000, the Company had risk-weighted assets of $4.5 billion.

    On April 10, 2000, the Company announced its intention to repurchase up to 5 million shares of the Company's common stock. As of May 8, 2000, the Company has repurchased 1,976,200 shares of common stock at prices ranging from $15.25 to $16.75.


Item 3. Quantitative and Qualitative Disclosure About Market Risk

    There have been no material changes in market risk exposures that affect the quantitative and qualitative disclosures presented as of December 31, 1999 in the Company's Form 10-K and Annual Report.

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PART II—OTHER INFORMATION


Item 1.  Legal Proceedings:

    None.


Item 2.  Changes in Securities:

    None.


Item 3.  Defaults upon Senior Securities:

    None.


Item 4.  Submission of Matters to a Vote of Security Holders:

    None.


Item 5.  Other Information:

    None.


Item 6.  Exhibits and Reports on Form 8-K:

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SIGNATURES

    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.
 
Date: May 11, 2000		  
/s/ MARK A. ANDERSON   
Mark A. Anderson
 President and Chief Executive Officer
(Principal Executive Officer)
 
Date: May 11, 2000		  
/s/ CRAIG A. WEISS   
Craig A. Weiss
 Chief Financial Officer
(Principal Financial and Accounting Officer)

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PART II—OTHER INFORMATION
SIGNATURES


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