SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15
(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to
__________.
Commission File Number 000-18887
COLONIAL TRUST COMPANY
(Exact name of registrant as specified in its charter)
Arizona
75-2294862
(State of Incorporation)
(IRS Employer identification Number)
5336 N. 19th Avenue
Phoenix, Arizona 85015
(Address of principal executive offices)
<PAGE>
602-242-5507
(Registrant's telephone number)
NONE
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15 (d) of the Exchange Act during the
past 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 __________
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE PRECEDING
FIVE YEARS
Check whether the registrant filed all documents and
reports required to be filed by Section 12, 13 or 15 (d) of the
Exchange Act after the distribution of securities under a plan
confirmed by court.
Yes __________ No __________
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the last practicable date:
757,998
<PAGE>
Transitional Small Business Disclosure Format (check one):
Yes _________ No ___X______
COLONIAL TRUST COMPANY
INDEX
Page
Part I. Financial Information:
Item 1: Financial Statements 3
Condensed Balance Sheets 3
Condensed Statements of Earnings 4
Condensed Statements of Cash Flows 5
Notes to Condensed Financial Statements 6
Item 2: Management's Discussion and Analysis or
Plan of Operation 9
Part II. Other Information
Item 1: Legal Proceedings 13
Item 2: Changes in Securities 13
Item 3: Default Upon Senior Securities 13
<PAGE>
Item 4: Other Information 13
Item 5: Exhibits and Reports on Form 8-K 13
SIGNATURES 13
<PAGE>
COLONIAL TRUST COMPANY
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets
(Unaudited)
ASSETS
September 30, 1999 March 31,1999
Cash and cash equivalents
$192,493
$175,256
Receivables
646,414 518,395
Note receivable
169,548
419,084
Property, furniture
and equipment, net
838,474
811,696
Excess of cost over
fair value acquired, net
135,165 141,250
Other assets
124,951 106,007
Restricted cash
506,225
337,551
<PAGE>
$2,613,270 $2,509,239
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable
and accrued liabilities
$178,870 $280,464
Income tax payable
55,422 107,953
Deferred income taxes
20,295
20,295
Total Liabilities
254,587
408,712
Stockholders' equity:
Common stock, no par value;
25,000,000 shares authorized, 758,177 issued
and outstanding, at September 30, 1999 and 761,337
issued and outstanding at March 31, 1999
555,177
555,177
Additional paid-in capital
505,347
505,347
Retained earnings
1,298,159 1,040,
003
Total Stockholders' Equity
2,358,683 2,100,527
<PAGE>
$2,613,270 $2,509,239
See accompanying notes to condensed financial statements.
COLONIAL TRUST COMPANY
Condensed Statements of Earnings (Unaudited)
Three month periods Six-month periods
Ended September 30 Ended September 30
Revenues: 1999 1998 1999 1998
Bond
Servicing
income $719,613 $486,317 $1,264,601 $938,379
IRA
servicing
fees-
corporate 118,261 88,451 290,269 192,888
IRA
Servicing
fees-
personal
trust 39,413 27,954 90,337 56,359
Trust fee
income 135,165 129,284 247,135 216,176
Interest
income 10,989 11,716 27,887 23,435
Total
revenue 1,023,441 743,722 1,920,229 1,427,237
<PAGE>
General and
administrative
expenses
769,404 585,505 1,468,219 1,111,487
Earnings
before
income
taxes 254,037 158,217 452,010 315,750
Income taxes 104,238 64,396 185,209 128,193
Net earnings $149,799 $93,821 $266,801 $187,557
Basic net
earnings per
common share $.20 $.12 $.35 $.24
Diluted net
earnings per
common share $.19 $.12 $.34 $.24
<PAGE>
Weighted average
shares outstanding
- -basic 758,731 762,338 759,509 767,331
Weighted average
shares outstanding
- -diluted 781,343 775,973 782,120 780,967
See accompanying notes to condensed financial statements.
COLONIAL TRUST COMPANY
Condensed Statements of Cash Flows (Unaudited)
<PAGE>
Six-month period
Ended September 30,
1999 1998
Cash flows from
operating activities:
Net earnings
$266,801 $187,557
Adjustments to reconcile
net earnings to
Net cash provided
by (used in)
Operating activities:
Depreciation and
amortization
62,381 44,150
Increase in receivables
(128,019) (96,958)
Increase in other assets
(18,944) (32,351)
Increase (decrease) in
accounts payable and
accrued liabilities
(101,594) 14,617
Increase (decrease)
in income tax payable
(52,531) 11,712
Net cash provided
by operating activities
28,094 128,727
Cash flows from
investing activities:
Purchase of property,
furniture and equipment
(83,074) (80,781)
Additions to note
receivable
- (15,087)
Payments received
on note receivable
249,536 -
Increase in
restricted cash
(168,674) (4,868)
Net cash used in
investing activities
(2,212) (100,736)
Cash flows from
financing activities:
Proceeds from
sale of common stock
- 235
Purchase of treasury stock
- (32,150)
Purchase and retirement
of common stock
(8,645) (13,022)
Net cash used in
financing activities
(8,645) (44,937)
Increase (decrease) in
cash and cash equivalents
17,237 (16,946)
Cash and cash equivalents
at beginning of period
175,256 28,475
Cash and cash equivalents
at end of period
$192,493 $11,529
See accompanying notes to condensed financial statements.
<PAGE>
COLONIAL TRUST COMPANY
Notes to Condensed Financial Statements
1. Significant Accounting Policies
In the opinion of Colonial Trust Company (the
"Company" or "Colonial"), the accompanying unaudited
condensed financial statements contain all adjustments
necessary to present fairly the financial position, the
results of operations and cash flows for the periods
presented. The accompanying condensed financial
statements do not include all disclosures considered
necessary for a fair presentation in conformity with
generally accepted accounting principles. Therefore, it is
recommended that these accompanying statements be
read in conjunction with the financial statements
appearing in the Company's Annual Report on Form 10-
KSB for the year ended March 31, 1999.
(a) Nature of Business
The Company was incorporated on August 15,
1989, in the State of Arizona for the purpose of
engaging in the business of acting as a fiduciary.
The Company is registered under the Securities
Exchange Act of 1934.
The Company serves as trustee under various
bond indentures for issuers of bonds in 38 states.
The issuers are primarily churches and other
non-profit organizations. As trustee, the
Company receives, holds, invests and disburses
the bond proceeds as directed by the applicable
trust indenture and receives weekly or monthly
sinking fund payments from the issuer of bonds,
and, as paying agent, pays the semi-annual
principal and interest payments to the
bondholder.
The Company also serves as trustee of self-
directed individual retirement accounts for
certain bondholders or employees of religious
organizations.
<PAGE>
The Personal Trust segment provides investment
management, administration and custodial
services for customers with various securities
held in trust or in investment agency accounts.
(b) Revenue Recognition
Under the trust indentures with organizations
issuing bonds, Colonial, for its services,
principally earns revenues based on three fee
structures. The first fee structure allows
Colonial to invest trust funds held for
disbursement and retain the gains and earnings
therefrom. The second fee structure requires the
issuing institution to pay a percentage of the
bond proceeds to Colonial for set-up and
printing costs during the first year. The third fee
structure entitles Colonial to interest earnings up
to 2.5% of daily trust funds held in bond
program fund accounts in lieu of a set-up fee.
Annual maintenance fees and bond printing costs
are charged as a percentage of the related bond
issuance. Colonial also receives fees for services
provided as custodian for self-directed individual
retirement accounts.
<PAGE>
In connection with providing investment
management, administration and custodial
services, Colonial earns revenue based on two
fee structures. The first fee structure is
established as a percentage of the fiduciary assets
which Colonial holds as trustee or agent. Fees
are assessed on a quarterly basis to individual
accounts according to the quarter's end fair
market value of the supporting fiduciary assets.
The second fee structure relates to an annual fee
which is set up to cover the maintenance of
fiduciary assets which Colonial holds in both
trust and self-directed IRA accounts.
(c ) Computation of Basic and Diluted Net Earning
Per Common Share
Basic EPS is computed based on weighted
average shares outstanding and excludes any
potential dilution from stock options, warrants
and other common stock equivalents. Diluted
EPS reflects potential dilution from the exercise
or conversion of securities into common stock or
from other contracts to issue common stock.
<PAGE>
2. Note receivable
On December 1, 1990, the Company entered into a
Master Note and Letter Agreement with Church Loans
and Investment Trust, Inc., its former parent corporation.
The Master Note, in the maximum amount of $1,000,000,
is due on demand, bears interest payable monthly at 1%
less than the prime rate and is unsecured. Amounts
advanced from time to time may be prepaid and re-
borrowed.
3. Earnings Per Share
A reconciliation from basic earnings per share to diluted
earnings per share for the three-month and six-month
periods ended September 30, 1999, and September 30,
1998 follows:
Three-month periods Six-month periods
Ended September 30, Ended September 30,
1999 1998 1999 1998
Net earnings
$149,799 $93,821 $266,801 $187,557
Basic EPS
- -weighted
average shares
outstanding
758,731 762,338 759,509 767,331
Basic EPS
$.20 $.12 $.35 $.24
Basic EPS
- -weighted
average shares
outstanding
758,731 762,338 759,509 767,331
Effect of
dilutive
securities:
Stock options
22,612 13,635 22,611 13,636
Diluted EPS
- -weighted
average shares
outstanding
781,343 775,973 782,120 780,967
Diluted EPS
$.19 $.12 $.34 $.24
On September 24, 1998, the Company's shareholders
approved a one-for-ten reverse common stock split.
Weighted average shares outstanding and basic and
diluted earnings per share for all periods presented have
been adjusted to reflect this reverse common stock split.
<PAGE>
4. Business Segments
Operating results and other financial data are presented
for the principal business segments of the Company as of
and for the three-month and six-month periods ended
September 30, 1999 and September 30, 1998. The
Company has two distinct business segments consisting
of Corporate Trust services and Personal Trust services.
In computing operating profit by business segment,
portions of administrative expenses and other items not
considered direct operating expenses were considered to
be in the Other category.
Three-month periods:
Corporate Personal Other Total
Trust Trust
_______ _________ _________ _________
September 30, 1999
Bond Servicing
Income $719,613 - - $719,613
IRA Servicing Fees 118,261 $39,413 - 157,674
Trust Fee Income - 135,165 - 135,165
Interest Income - - $10,989 10,989
$837,874 $174,578 $10,989 $1,023,441
General &
Administrative
Expenses $380,603 $137,109 $251,692 $769,404
<PAGE>
September 30, 1998
Bond Servicing
Income $486,317 - - $486,317
IRA Servicing Fees 88,451 $27,954 - 116,405
Trust Fee Income - 129,284 - 129,284
Interest Income - - $11,716 11,716
$574,768 $157,238 $11,716 $743,722
General &
Administrative
Expenses $319,296 $123,464 $142,745 $585,505
Six-month periods:
Corporate Personal Other Total
Trust Trust
_______ _________ _________ _________
September 30, 1999
Bond Servicing
Income $1,264,601 - - $1,264,601
IRA Servicing
Fees 290,269 $90,337 - 380,60
6
Trust Fee
Income - 247,135 -
247,135
Interest Income - - $27,887 27,887
$1,554,870 $337,472 $27,887 $1,920,229
<PAGE>
General &
Administrative
Expenses $720,107 $282,558 $465,554 $1,468,219
September 30, 1998
Bond Servicing
Income $938,379 - - $938,379
IRA Servicing
Fees 192,888 $56,359 -
249,2
47
Trust Fee Income - 216,176 - 216,176
Interest Income - - $23,435 23,435
$1,131,267 $272,535 $23,435 $1,427,237
General &
Administrative
Expenses $546,972 $228,930 $335,585 $1,111,487
Item 2. Management's Discussion and Analysis or Plan
of Operation
Results of Operations Three-Month Periods Ended
September 30, 1999 and September 30, 1998
The Company had net earnings of $149,799, or $.19
diluted earnings per share, for the period ended
September 30, 1999, compared to net earnings or
$93,821, or $.12 diluted earnings per share, for the period
ended September 30, 1998, an increase in net earnings of
60%. The Company had total revenue of $1,023,441 for
the period ended September 30, 1999, compared to total
revenue of $743,722 for the prior year, an increase of
38%.
<PAGE>
The Corporate Trust segment's income increased
$263,106 to $837,874 for the period ended September 30,
1999, compared to $574,768 for the period ended
September 30, 1998, an increase of 46%. The Personal
Trust segment's income increased $17,340 to $174,578
for the period ended September 30, 1999, compared to
$157,238 for the period ended September 30, 1998, an
increase of 11%.
The Corporate Trust segment's bond servicing income
increased $233,296 to $719,613 for the period ended
September 30, 1999, compared to $486,317 for the period
ended September 30, 1998 an increase of 48%. The
increase in bond servicing income was primarily
attributable to the increase in the number of bond
accounts serviced by the Company. At September 30,
1999, the Company was serving as trustee and paying
agent on 448 bond offerings totaling approximately
$415,000,000 in original principal amount; at September
30, 1998, the Company was serving as trustee and paying
agent on 432 bond offerings totaling approximately
$353,000,000 in original principal amount.
Revenue from the Corporate Trust segment's IRA
Account servicing activities increased $29,810 to
$118,261 for the period ended September 30, 1999,
compared to $88,451 for the period ended September 30,
1998, an increase of 34%. Revenue from the Personal
Trust segment's IRA Account servicing activities
increased $11,459 to $39,413 for the period ended
September 30, 1999, compared to $27,954 for the period
ended September 30, 1998, an increase of 41%. The
increase in IRA revenue was primarily due to the increase
in the number of IRA Accounts serviced by the Company.
At September 30, 1999, the Corporate Trust segment was
servicing 8,361 IRA Accounts with an aggregate value of
approximately $142,000,000 and the Personal Trust
segment was servicing 227 IRA Accounts with an
aggregate value of approximately $40,000,000. At
September 30, 1998, the Corporate Trust segment was
servicing 7,385 IRA Accounts with an aggregate value of
approximately $127,000,000, and the Personal Trust
segment was servicing 165 Accounts with an aggregate
value of approximately $28,000,000.
<PAGE>
The Personal Trust segment's trust income increased
$5,881 to $135,165 for the period ended September 30,
1999, compared to $129,284 for the period ended
September 30, 1998, an increase of 5%. The increase in
trust income was primarily due to the increase in the
number of trust investment accounts or other accounts
serviced by the Company. At September 30, 1999, the
Personal Trust segment was serving as trustee or agent for
278 trust, investment accounts, or other accounts with a
fair market value of approximately $68,000,000. At
September 30, 1998, the Personal Trust segment was
serving as Trustee or agent for 212 trust, investment
accounts, or other accounts with a fair market value of
approximately $53,000,000.
Interest income was $10,989 for the period ended
September 30, 1999, compared to $11,716 for the period
ended September 30, 1998. This was primarily
attributable to monies held in the master trust note.
Funds were removed from the master trust note in order to
pay income taxes and to purchase certificate of deposits
which were necessary to meet the Company's liquid
capital requirements.
The Corporate Trust segment's general and administrative
expenses increased in the aggregate $61,307 to $380,603
for the period ended September 30, 1999, compared to
$319,296 for the period ended September 30, 1998, but
decreased to 45% of segment revenues for the period
ended September 30, 1999, from 56% of segment
revenues for the period ended September 30, 1998. The
Personal Trust segment's general and administrative
expenses increased in the aggregate $13,645 to $137,109
for the period ending September 30, 1999, compared to
$123,464 for the period ended September 30, 1998, and
remained constant at 79% of segment revenues for the
periods ended September 30, 1999 and September 30,
1998. The increases in the Corporate Trust and Personal
Trust segment's general and administrative expenses were
due primarily to an increase in personnel as well as
additional expenses involved in administering the
Company's increased bond servicing business.
<PAGE>
The Company's effective income tax rate was 41.0 % for
the three-month period ended September 30, 1999, and
40.7% for the three-month period ended September 30,
1998.
Results of Operations Six-Month Periods Ended
September 30, 1999 and September 30, 1998
The Company had net earnings of $266,801, or $.34
diluted earnings per share, for the period ended
September 30, 1999, compared to net earnings or
$187,557, or $.24 diluted earnings per share, for the
period ended September 30, 1998, an increase in net
earnings of 42%. The Company had total revenue of
$1,920,229 for the period ended September 30, 1999,
compared to total revenue of $1,427,237 for the prior
year, an increase of 35%.
The Corporate Trust segment's income increased
$423,603 to $1,554,870 for the period ended September
30, 1999, compared to $1,131,267 for the period ended
September 30, 1998, an increase of 37%. The Personal
Trust segment's income increased to $337,472 in the
period ended September 30, 1999, compared to $272,535
for the period ended September 30, 1998, an increase of
24 %.
<PAGE>
The Corporate Trust segment's bond servicing income
increased $326,222 to $1,264,601 for the period ended
September 30, 1999, compared to $938,379 for the period
ended September 30, 1998 an increase of 35%. The
increase in bond servicing income was primarily
attributable to the increase in the number of bond
accounts serviced by the Company.
Revenue from the Corporate Trust segment's IRA
Account servicing activities increased $97,381 to
$290,269 for the period ended September 30, 1999,
compared to $192,888 for the period ended September 30,
1998, an increase of 50%. Revenue from the Personal
Trust segment's IRA Account servicing activities
increased $33,978 to $90,337 for the period ended
September 30, 1999, compared to $56,359 for the period
ended September 30, 1998, an increase of 60%. The
increase in IRA revenue was primarily due to the increase
in the number of IRA Accounts serviced by the Company.
The Personal Trust segment's trust income increased
$30,959 to $247,135 for the period ended September 30,
1999, compared to $216,176 for the period ended
September 30, 1998, an increase of 14%. The increase in
trust income was primarily due to the increase in the
number of trust investment accounts or other accounts
serviced by the Company.
Interest income increased $4,452 to $27,887 for the
period ended September 30, 1999, compared to $23,435
for the period ended September 30, 1998, an increase of
19%. The increase was primarily attributable to
additional funds available for investment.
<PAGE>
The Corporate Trust segment's general and administrative
expenses increased in the aggregate $173,135 to $720,107
for the period ended September 30, 1999, compared to
$546,972 for the prior period, but decreased to 46% of
segment revenues for the period ended September 30,
1999, from 48% of segment revenues for the period
ended September 30, 1998. The Personal Trust segment's
general and administrative expenses increased in the
aggregate $53,628 to $282,558 for the period ended
September 30, 1999, compared to $228,930 for the period
ended September 30, 1998, and remained constant at 84%
of segment revenues for the periods ended September 30,
1999 and September 30, 1998. The increase in the
Corporate Trust and Personal Trust segment's general and
administrative expenses were due primarily to an increase
in personnel as well as additional expenses involved in
administering the Company's increased trust servicing
business.
The Company's effective income tax rate was 41.0% for
the six-month period ended September 30, 1999, and
40.6% for the six-month period ended September 30,
1998.
Year 2000
The Company recognizes the potential business impacts
related to the Year 2000 computer system issue and has
implemented a plan to assess and improve the Company's
state of readiness with respect to such issues. The Year
2000 is one where computer systems may recognize the
designation "00" as 1900 when it means 2000, resulting in
system failure or miscalculations.
<PAGE.
Commencing in 1997, the Company initiated a
comprehensive review of its core information technology
systems, which the Company is dependent upon for the
conduct of day-to-day business operations, in order to
determine the adequacy of those systems in light of future
business requirements. Year 2000 readiness was one of a
variety of factors to be considered in the review of core
systems.
In recognition of the Year 2000 issue, in September 1997,
the Company began a comprehensive review of all
information technology and non-information technology
systems used by the Company, computer hardware and
software products supplied to broker-dealers by the
Company, and computer hardware and software products
and components and other equipment supplied to the
Company by third parties. Such review includes testing
and analysis of Company systems and inquiries of third
parties supplying information technology and non-
information technology systems, computer hardware and
software products and components, and other equipment
to the Company.
The Company has divided its Year 2000 review into two
phases. The first addresses the Company's core
information technology systems. The second phase
addresses non-core information technology systems, non-
information technology systems, and products
components and equipment supplied to the Company
from third parties. In addition, the Company has
implemented required Year 2000 upgrades and
replacements during the second phase. The Company
substantially completed the first phase of its review in
June 1998. The Company competed the second phase in
June 1999.
<PAGE>
In the first phase of its Year 2000 review, the Company
tested all software products currently provided to broker-
dealers, and determined that such products were Year
2000 compliant. The Company also made inquiries of all
third parties supplying the Company with computer
hardware ad software products and received assurances
that such products and components are Year 2000
compliant. With respect to core information technology,
the Company made inquiries of third parties supplying
computer hardware and software operating systems to the
Company, and received assurances that such hardware
and software systems were Year 2000 compliant.
The Company has not developed a "worst case " scenario
with respect to Year 2000 issues, but instead has focused
its resources on identifying material, remediable problems
and reducing uncertainties generally through the Year
2000 review described above.
At this time, the Company has not developed Year 2000
contingency plans, other that the review and remedial
actions described above, and does not intend to do so
unless the Company believes such plans are merited by
the results of its continuing Year 2000 review. The
Company maintains and deploys contingency plans
designed to address various other potential business
interruptions. These plans may be applicable to address
the interruption of support provided by third parties
resulting from their failure to be Year 2000 ready.
If the Company or the third parties with which it has
relationships were to cease or not successfully complete
its or their Year 200 remediation efforts, the Company
would encounter disruptions to its business that could
have a material adverse effect on its business, financial
position and results of operations. The Company could be
materially and adversely impacted by widespread
economic or financial market disruption or by Year 2000
computer system failures at third parties with which it has
relationships. The Company does not believe
expenditures to be Year 2000 compliant will be material,
and has expensed all costs associated with the Year 2000
remediation plan. However, there can be no assurance
that the ultimate cost to identify and implement solutions
to all Year 2000 problems will not be material to the
Company.
<PAGE>
Liquidity and Capital Resources
Under legislation effective on July 20, 1996, the
Company is required to maintain net capital of at least
$500,000; the Company's net capital was $2,358,683 on
September 30, 1999. The legislation also requires that the
Company's net capital meet certain liquidity
requirements. Specifically, $166,666, $333,332 and
$500,000 of such net capital must meet the Arizona
Banking Department's liquidity requirements by July 19,
1997, July 19, 1998, and July 19, 1999, respectively. At
September 30, 1999, $506,225 of the Company's net
capital met the Department's liquidity requirements. The
Company has satisfied these liquidity requirements and
believes that it will be able to maintain its compliance
with these liquidity requirements from cash on hand and
other assets of the Company. The Company also
believes that it will be able to satisfy its working capital
and capital expenditure requirements for the foreseeable
future from existing cash balances, from anticipated cash
flow from operating activities, and from funds available
under the Company's Master Note with its former parent,
Church Loans and Investments Trust.
The Company's cash and cash equivalents increased from
$175,256 on March 31, 1999, to $192,493 on September
30, 1999, while the note receivable decreased from
$419,084 on March 31, 1999, to $169,548 on September
30, 1999. The decrease in the cash and cash equivalents
was primarily due to payments of income taxes and the
purchase of certificates classified as restricted cash
necessary to meet the liquidity requirements of the
Arizona Banking Department. The decrease in the note
receivable was due to the receipt of payments totaling
$260,000. The Company's net property and equipment
increased from $811,696 on March 31, 1999, to $838,474
on September 30, 1999. The increase was primarily due
to the purchase of additional furniture, equipment and
computer software for new employees. The Company
believes that capital expenditure requirements for the
foreseeable future will be covered by excess cash flow
from operations.
<PAGE>
Market Risk
In the opinion of management, our market risk factors
have not changed materially from March 31, 1999.
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995.
This Form 10-QSB contains one or more forward-looking
statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and is
subject to the safe harbors created thereby.
These forward-looking statements involve risks an
uncertainties, including, but not limited to: the
Company's continued employment of key management,
including John Johnson, the Company's Chief Executive
Officer; Marvin Hoeflinger, the Company's Vice
President of Business Development; Bud Olson, the
Company's Vice President of Business Development-
Personal Trust Business; and Christopher J. Olson, the
Company's Vice President and senior officer responsible
for the Company's Personal Trust Business; the success
of Messrs. Johnson, Hoeflinger and Bud Olson in their
business development efforts on behalf of the Company;
the Company's success in being repaid on the bonds it
purchases or the loans it makes under the Bond
Repurchase Program; the continuation of the Company's
investment advisory agreements with Hackett Investment
Advisors ("HIA"), Feldman Securities Group LLP (FSG)
and Wright Investors' Services (WIS), pursuant to which
HIA, FSG and WIS provide investment advisory services
for the majority of the trust and investment agency
accounts of the Company, and the success of HIA, FSG
and WIS in managing such accounts; increased
competition for the Company's services; competitive
pressures on prices for the Company's services; Year
2000 issues; increased staffing or office needs not
currently anticipated; new rules or regulations not
currently anticipated which adversely affect the
Company; and an increase in interest rates or other
economic factors having an adverse impact on the
Company and other risks detailed from time to time in the
Company's Securities and Exchange Commission filings.
The Company filed its fiscal 1999 Form 10-KSB on June
29, 1999, and filed form 10-KSB A-1 on August 5, 1999.
Please refer to these documents for a more detailed
discussion of the risks and uncertainties associated with
the Company's future operations.
<PAGE>
PART II. OTHER INFORMATION
Item 1: Legal Proceedings
None.
Item 2: Changes in Securities
None.
Item 3: Default Upon Senior Securities
None.
Item 4: Other Information
None.
Item 5: Exhibits and Reports on Form 8-K:
(a) Exhibits: None.
(b) Reports on Form 8-K: None.
SIGNATURES
<PAGE>
In accordance with the requirements of the Exchange Act,
the registrant caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
COLONIAL TRUST COMPANY
DATE: November 12, 1999
BY: /s/ John K. Johnson
John K. Johnson
Its: President
DATE: November 12, 1999
BY: /s/ Christopher J. Olson
Christopher J. Olson
Its: Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<PERIOD-TYPE> 6-MOS
<CASH> 192,493
<RECEIVABLES> 815,962
<CURRENT-ASSETS> 1,133,406
<PP&E> 1,243,503
<DEPRECIATION> 405,029
<TOTAL-ASSETS> 2,613,270
<CURRENT-LIABILITIES> 254,587
<COMMON> 555,177
<OTHER-SE> 1,803,506
<TOTAL-LIABILITY-AND-EQUITY> 2,613,270
<SALES> 1,920,229
<TOTAL-REVENUES> 1,920,229
<OTHER-EXPENSES> 1,468,219
<INCOME-PRETAX> 452,010
<INCOME-TAX> 185,209
<INCOME-CONTINUING> 266,801
<NET-INCOME> 266,801
<EPS-BASIC> .35
<EPS-DILUTED> .34
</TABLE>
