<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q. -QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 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 22-25144
FIRST STATE BANCORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW MEXICO 85-0366665
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
7900 JEFFERSON NE
ALBUQUERQUE, NEW MEXICO 87109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(505) 241-7500
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes XX No
------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 5,174,053 shares of common
stock, no par value, outstanding as of August 9, 2000.
<PAGE> 2
FIRST STATE BANCORPORATION
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities and Use of Proceeds None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 10
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Balance Sheets
(unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------- -------------
<S> <C> <C>
Assets
Cash and due from banks $ 27,023,183 $ 22,725,861
Federal funds sold 1,300,000 --
------------- -------------
Total cash and cash equivalents 28,323,183 22,725,861
Investment securities
Held to maturity (at amortized cost, market value of $36,034,425 at
June 30, 2000, and $22,490,690 at December 31, 1999) 36,178,852 22,590,081
Available for sale (at market, amortized cost of $93,809,485 at
June 30, 2000, and $74,227,391 at December 31, 1999) 91,874,311 72,211,289
------------- -------------
Total Investments 128,053,162 94,801,370
------------- -------------
Loans and leases net of unearned interest 418,705,557 428,637,703
Less allowance for loan and lease losses 5,837,837 5,386,622
------------- -------------
Net loans and leases 412,867,720 423,251,081
Premises and equipment 12,913,473 15,060,722
Accrued interest receivable 4,025,265 3,062,575
Other real estate owned 1,779,687 1,917,126
Goodwill, net 517,161 569,264
Other assets 6,769,982 5,495,565
------------- -------------
Total assets $ 595,249,633 $ 566,883,564
============= =============
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing $ 98,792,382 $ 89,303,965
Interest-bearing 392,565,978 374,231,608
------------- -------------
Total deposits 491,358,360 463,535,573
Securities sold under agreements to repurchase 51,902,379 38,927,736
Other liabilities 4,382,986 8,842,326
Long-term debt 1,127,046 11,150,902
------------- -------------
Total liabilities 548,770,771 522,456,537
Stockholders' equity:
Preferred stock, no par value, 1,000,000 shares authorized, none
issued or outstanding -- --
Common stock, no par value, 20,000,000 shares authorized, issued
5,174,159 at June 30, 2000 and 5,158,846 at December 31, 1999 29,630,075 29,459,807
Treasury stock, at cost (309,550 shares at June 30, 2000 and 228,750 at
December 31, 1999) (4,076,662) (3,012,031)
Retained earnings 22,202,664 19,309,878
Unrealized gains (losses) on investment securities available for sale (1,277,215) (1,330,627)
------------- -------------
Total stockholders' equity 46,478,862 44,427,027
------------- -------------
Total liabilities and stockholders' equity $ 595,249,633 $ 566,883,564
============= =============
Book value per share $ 9.55 $ 9.03
============= =============
Tangible book value per share $ 9.45 $ 8.91
============= =============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
-1-
<PAGE> 4
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Statements of Operations
For the three and six months ended June 30, 2000 and 1999
(unaudited)
<TABLE>
<CAPTION>
Three Three Six Six
months months months months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans and leases $ 10,288,852 $ 8,887,020 $ 20,531,238 $ 17,163,300
Interest on investment securities:
Taxable 2,035,685 1,366,164 3,486,057 2,791,607
Nontaxable 51,833 58,508 103,572 116,919
Federal funds sold 149,179 50,930 203,645 111,967
------------ ------------ ------------ ------------
Total interest income 12,525,549 10,362,622 24,324,512 20,183,793
------------ ------------ ------------ ------------
Interest expense:
Deposits 3,930,940 2,898,090 7,550,676 5,761,166
Short-term borrowings 646,903 498,205 1,188,117 922,315
Long-term debt and capital lease 131,853 77,208 317,919 104,886
------------ ------------ ------------ ------------
Total interest expense 4,709,696 3,473,503 9,056,712 6,788,367
------------ ------------ ------------ ------------
Net interest income before provision for
loan and lease losses 7,815,853 6,889,119 15,267,800 13,395,426
Provision for loan and lease losses 600,002 687,792 1,225,004 1,432,192
------------ ------------ ------------ ------------
Net interest income after provision for
loan and lease losses 7,215,851 6,201,327 14,042,796 11,963,234
------------ ------------ ------------ ------------
Other Income:
Service charges on deposit accounts 584,962 509,283 1,155,691 978,583
Other banking service fees 112,150 102,375 213,265 192,423
Credit card transaction fees 589,296 379,214 1,099,757 696,604
Operating lease income 9,767 113,878 114,822 273,921
Loan on sale of investment securities -- -- (333,142) --
Gain on sale of Leasing Division -- -- 879,078 --
Other 455,497 186,783 880,583 457,987
------------ ------------ ------------ ------------
Total other income 1,751,672 1,291,533 4,010,054 2,599,518
------------ ------------ ------------ ------------
Other expense:
Salaries and employee benefits 2,890,450 2,573,632 5,801,575 5,116,372
Occupancy 754,297 632,279 1,540,072 1,220,215
Data processing 290,512 253,809 574,012 493,557
Credit card interchange 299,142 211,676 561,824 390,654
Equipment 473,694 396,487 938,130 777,421
Leased equipment depreciation -- 102,063 70,241 254,987
Legal, accounting and consulting 211,064 164,713 406,708 311,892
Marketing 398,446 239,475 640,068 471,637
Other real estate owned expenses 31,497 109,571 46,782 153,132
Amortization of intangibles 26,052 26,052 52,103 52,103
Other 1,100,133 913,743 2,258,000 1,726,085
------------ ------------ ------------ ------------
Total other expenses 6,475,287 5,623,500 12,889,515 10,968,055
------------ ------------ ------------ ------------
Income before income taxes 2,492,236 1,869,360 5,163,335 3,594,697
Income tax expense 867,918 642,158 1,781,444 1,270,373
------------ ------------ ------------ ------------
Net income $ 1,624,318 $ 1,227,202 $ 3,381,891 $ 2,324,324
============ ============ ============ ============
Earnings per common and common equivalent share $ 0.33 $ 0.24 $ 0.69 $ 0.46
============ ============ ============ ============
Earnings per common share-assuming full dilution $ 0.33 $ 0.24 $ 0.68 $ 0.45
============ ============ ============ ============
Dividends per common share $ 0.07 $ 0.06 $ 0.14 $ 0.12
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
-2-
<PAGE> 5
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Statements of Comprehensive Income
For the three and six months ended June 30, 2000 and 1999
(unaudited)
<TABLE>
<CAPTION>
Three months Three months Six months Six months
Ended June Ended June Ended June Ended June
2000 1999 2000 1999
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net income $ 1,624,318 $ 1,227,202 $ 3,381,891 $ 2,324,324
Other comprehensive income net of tax-
unrealized holding (losses) gains on securities
available for sale arising during period (17,393) (638,263) (166,461) (921,280)
Less: reclassification adjustment for losses
included in net income -- -- 219,873 --
----------- ----------- ----------- -----------
Total comprehensive income $ 1,606,925 $ 588,939 $ 3,435,303 $ 1,403,044
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements
-3-
<PAGE> 6
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Statements of Cash Flows
For the three and six months ended June 30, 2000 and 1999
(unaudited)
<TABLE>
<CAPTION>
Three months Three months Six months Six months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
Operating activities:
Net income $ 1,624,318 $ 1,227,202 $ 3,381,891 $ 2,324,324
------------- ------------- ------------- -------------
Adjustments to reconcile net income to cash
provided by operations:
Provisions for loan and lease losses 600,002 687,792 1,225,004 1,432,192
Provisions for decline in value of other real estate owned 17,599 627 17,599 29,349
Depreciation and amortization 245,725 557,538 429,765 965,746
Loss on sale of Investment Securities available for sale -- -- 333,142 --
Gain on sale of Leasing Division -- -- (879,078) --
Increase in accrued interest receivable (648,377) (44,380) (962,690) (422,360)
Increase in other assets, net (55,641) (1,026,516) (1,301,932) (1,352,442)
Increase (decrease) in other liabilities, net (944,037) (565,508) 564,108 173,748
------------- ------------- ------------- -------------
Total adjustments (784,729) (390,447) (574,082) 826,233
------------- ------------- ------------- -------------
Net cash provided by operating activities 839,589 836,755 2,807,809 3,150,557
------------- ------------- ------------- -------------
Cash flows from investing activities:
Net increase in loans (24,749,667) (29,888,320) (52,529,739) (54,863,496)
Proceeds from the sale of Leases -- -- 64,427,001 --
Early payoff of Operating leases -- 137,492 -- 696,825
Purchases of investment securities available for sale (9,958,135) (10,501,184) (31,901,935) (29,028,884)
Maturates of investment securities available for sale 27,424 2,010,400 51,888 11,960,400
Sale of investment securities available for sale -- -- 11,936,858 --
Purchases of investment securities held to maturity (16,923,490) (91,286,000) (116,105,598) (180,386,000)
Maturities of investment securities held to maturity 20,522,214 91,056,000 103,022,214 209,656,000
Purchases of premises and equipment (158,755) (673,995) (919,311) (797,109)
Sales of premises and equipment -- -- 125,038 543,177
Sales of other real estate owned -- 538,062 -- 539,235
Payments received on loans classified as other real estate
owned 196,996 -- 316,439 --
------------- ------------- ------------- -------------
Net cash used in investing activities (31,043,413) (38,607,545) (21,577,145) (41,679,851)
------------- ------------- ------------- -------------
Cash flows from financing activities:
Net increase in interest-bearing deposits 15,178,843 13,842,244 18,334,370 18,387,179
Net increase in noninterest-bearing deposits 5,451,045 4,120,464 9,488,417 8,818,643
Net increase (decrease) in securities sold under
repurchase agreements 4,041,711 (2,903,482) 12,974,643 8,003,962
Federal Home Loan Bank borrowings -- 20,000,000 -- 20,000,000
Federal Home Loan Bank repayments (10,000,000) -- (10,000,000) --
Payments on long-term debt and capital lease obligations (12,060) (11,041) (23,856) (21,841)
Federal Funds purchased -- -- (4,900,000) --
Common stock issued 67,886 36,231 170,268 143,305
Dividends paid (352,638) (306,946) (612,553) (546,677)
Purchase of treasury stock (159,181) (3,012,031) (1,064,631) (3,012,031)
------------- ------------- ------------- -------------
Net cash provided by financing activities 14,215,606 31,765,439 24,366,658 51,772,540
------------- ------------- ------------- -------------
Increase (decrease) in cash and cash equivalents (15,988,218) (6,005,351) 5,597,322 13,243,246
Cash and cash equivalents at beginning of period 22,725,861 37,342,282 22,725,861 18,093,685
------------- ------------- ------------- -------------
Cash and cash equivalents at end of period $ 6,737,643 $ 31,336,931 $ 28,323,183 $ 31,336,931
============= ============= ============= =============
Supplemental disclosure of noncash investing and
financing activities:
Additions to other real estate owned in settlement of loans $ 196,600 $ 1,538,338 $ 196,600 $ 1,538,338
============= ============= ============= =============
</TABLE>
See accompanying notes to consolidated condensed financial statements
-4-
<PAGE> 7
First State Corporation and Subsidiary
Notes to Consolidated Condensed Financial Statements
(unaudited)
1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The accompanying consolidated condensed financial statements are unaudited and
include the accounts of First State Bancorporation (the "Company") and its
subsidiary, First State Bank of Taos (100% owned).
All significant intercompany accounts and transactions have been eliminated.
Information contained in the consolidated condensed financial statements and
notes thereto of the Company should be read in conjunction with the Company's
consolidated financial statements and notes thereto contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999.
The consolidated condensed financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and in accordance with the instructions to Form 10-Q. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normally recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and six month periods ended June 30, 2000, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000.
2. EARNINGS PER COMMON SHARE
Statement of Financial Accounting Standards No. 128, "Earnings per Share" (FAS
128). FAS 128 requires the computation of basic earnings per share and diluted
earnings per share. Basic earnings per share is computed by dividing income
available to common stockholders (the numerator) by the weighted-average number
of common shares outstanding during the period (the denominator). Diluted
earnings per share is calculated by increasing the basic earning per share
denominator by the number of additional common shares that would have been
outstanding if dilutive potential common shares for options, warrants, and
convertible securities had been issued and increasing the basic earnings per
share numerator by the after tax amount of interest and amortization associated
with the convertible debentures.
The following is a reconciliation of the numerators and denominators of
basic and diluted earnings per share for the three and six months ended June 30:
<TABLE>
<CAPTION>
Quarter Ended June 30,
----------------------
2000 1999
------------------------------------------------ -------------------------------------------------
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
--------------- ----------------- ------------ --------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS:
Net income available to
common stockholders $ 1,624,318 4,861,584 $ 0.33 $ 1,227,202 5,061,383 $ 0.24
====== ======
Effect of dilutive securities:
Options 107,648 123,032
Diluted EPS:
Net income available to
common stockholders
plus interest and
amortization on
convertible debentures
----------- ---------- ----------- ----------
$ 1,624,318 4,969,232 $ 0.33 $ 1,227,202 5,184,415 $ 0.24
=========== ========== ====== =========== ========== ======
</TABLE>
-5-
<PAGE> 8
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
2000 1999
------------------------------------------------ -------------------------------------------------
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
--------------- ----------------- ------------ --------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS:
Net income available to
common stockholders $ 3,381,891 4,892,806 $ 0.69 $ 2,324,324 5,097,677 $ 0.46
====== ======
Effect of dilutive securities:
Options 114,536 121,994
Diluted EPS:
Net income available to
common stockholders
plus interest and
amortization on ----------- ---------- ----------- -----------
convertible debentures $ 3,381,891 5,007,342 $ 0.68 $ 2,324,324 5,219,671 $ 0.45
=========== ========== ====== =========== =========== ======
</TABLE>
3. SALE OF LEASING DIVISION
On March 1, 2000, the Company closed the sale of its subsidiary bank's
commercial leasing division. The sale resulted in $63.7 million of leases being
sold. The gain on the sale amounted to approximately $879,000, net of
transaction costs. The proceeds from the sale were used to purchase investment
securities, fund loan demand, and reduce short-term borrowings.
4. TREASURY STOCK
The Company's Board of Directors has authorized management to purchase up to
525,000 shares of its common stock. To date, management has purchased 309,550
shares including 80,800 shares totaling $1,064,631 during the first six months
of 2000. Management intends to purchase additional shares in the amount of which
will be determined by cash available for dividends from the subsidiary bank.
-6-
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CONSOLIDATED CONDENSED BALANCE SHEETS
The Company's total assets increased by $28.3 million from $566.9 million as of
December 31, 1999, to $595.2 million as of June 30, 2000, due to internal
growth. For the first six months of 2000, net loans decreased by $9.9 million
from $428.6 million to $418.7 million while investment securities increased by
$33.3 million from $94.8 million to $128.1 million. For the first six months of
2000, premises and equipment decreased $2.2 million from $15.1 million to $12.9
million and other assets increased $1.3 million from $5.5 million to $6.8
million.
On March 1, 2000, the Company closed the sale of its subsidiary bank's
commercial leasing division. The sale resulted in $63.7 million of leases being
sold. The gain on the sale amounted to approximately $879,000, net of
transaction costs. The proceeds from the sale were used to purchase investment
securities, fund loan demand, and reduce short-term borrowings. Excluding the
sale of the leasing division, total commercial loans increased by approximately
$53.8 million.
The following table presents the amounts of loans and leases of the Company, by
category, at the dates indicated.
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999 June 30, 1999
------------------------- ------------------------- ------------------------
(in thousands)
Amount % Amount % Amount %
--------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Commercial $ 74,325 17.7% $ 65,702 15.3% $ 56,544 14.6%
Real Estate - Mortgage 251,508 60.1% 215,839 50.4% 197,065 50.8%
Real Estate - Construction 70,386 16.8% 65,844 15.4% 57,506 14.9%
Consumer and Other 22,484 5.4% 20,203 4.7% 19,156 4.9%
Leases 2 -- 61,050 14.2% 57,413 14.8%
--------- ------- --------- ------- --------- -------
$ 418,705 100.0% $ 428,638 100.0% $ 387,684 100.0%
--------- ------- --------- ------- --------- -------
</TABLE>
Deposits, which are the Company's main source of funds for loans, investments
and federal funds sold, increased by $27.9 million from $463.5 million as of
December 31, 1999, to $491.4 million as of June 30, 2000. Non interest-bearing
deposits increased by $9.5 million and interest-bearing deposits increased by
$18.4 million. For the first six months of 2000, long-term debt decreased by
$10.0 million due to the repayment of a Federal Home Loan Bank advances.
Securities sold under agreements to repurchase increased $13 million from $38.9
million to $51.9 million as a result of the company's efforts to attract
customers with large short-term cash balances.
CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2000.
Net income for the Company for the three months ended June 30, 2000, was $1.62
million, an increase of $390,000 or 32% from $1.23 million for the same period
of 1999. The Company's annualized return on average assets was 1.12% for the
second quarter of 2000, compared to 0.94% for the same period of 1999.
Net interest income before provision for loan losses increased $900,000 to $7.8
million for the three months ended June 30, 2000, from $6.9 million for the
three months ended June 30, 1999, primarily due to increased loan and investment
security volume. The Company's net interest margin increased to 5.81% at June
30, 2000, from 5.72% at June 30, 1999.
The provision for loan losses was $600,002 for the three months ended June 30,
2000, from $687,792 for the three months ended June 30, 1999.
Total non-interest income increased by $460,000 to $1.75 million for the three
months ended June 30, 2000, compared to $1.29 million for the same period of
1999.
Total non-interest expense increased by $900,000 to $65 million for the second
quarter of 2000, from $5.6 million for the same period of 1999.
-7-
<PAGE> 10
CONSOLIDATED RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000.
Net income for the Company for the six months ended June 30, 2000, was $3.4
million, an increase of $1.1 million or 45% from $2.3 million for the same
period of 1999. The Company's annualized return on average assets was 1.18% for
the first six months of 2000, compared to 0.92% for the same period of 1999.
Net interest income before provision for loan losses increased $1.9 million to
$15.3 million for the six months ended June 30, 2000, from $13.4 million for the
six months ended June 30, 1999, primarily due to increased loan and investment
security volume. The Company's net interest margin was 5.76% at June 30, 2000
and 1999.
The provision for loan losses was $1.2 million for the six months ended June 30,
2000, from $1.4 million for the six months ended June 30, 1999.
Total non-interest income increased by $1.4 million, partially due to the sale
of leasing, to $4.0 million for the six months ended June 30, 2000, compared to
$2.6 million for the same period of 1999.
Total non-interest expense increased by $1.9 million to $12.9 million for the
first six months of 2000, from $11.0 million for the same period of 1999.
ALLOWANCE FOR LOAN AND LEASE LOSSES AND NON-PERFORMING ASSETS
The following tables set forth the Allowance for Loan and Lease Losses and
Non-Performing assets.
<TABLE>
<CAPTION>
(Dollars in thousands)
June 30, 2000 December 31,1999 June 30, 1999
----------------- ---------------------- -----------------
<S> <C> <C> <C>
ALLOWANCE FOR LOAN AND LEASE
LOSSES:
Balance beginning of period $ 5,387 $ 3,875 $ 3,875
Provision for loan and lease losses 1,225 3,075 1,432
Net charge-offs 774 1,563 661
------- ------- -------
Balance end of period $ 5,838 $ 5,387 $ 4,646
======= ======= =======
Allowance for loan and lease losses to
non-performing loans and leases 1.39% 1.26% 1.20%
Allowance for loan and lease losses to
non-performing loans and leases 163% 192% 137%
</TABLE>
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999 June 30, 1999
----------------- ---------------------- -----------------
<S> <C> <C> <C>
NON-PERFORMING ASSETS:
Accruing loans - 90 days past due $ -- $ 84 $ 149
Non-accrual loans 3,578 2,725 3,233
------- ------- -------
Total non-performing loans 3,578 2,809 3,382
Other real estate owned 1,780 1,917 1,667
------- ------- -------
Total non-performing assets $ 5,358 $ 4,726 $ 5,049
======= ======= =======
Potential problem loans and leases $ 4,901 $ 5,133 $ 5,905
Total non-performing assets to total assets 0.90% 0.83% 0.92%
</TABLE>
-8-
<PAGE> 11
LIQUIDITY AND CAPITAL EXPENDITURES
The Company's primary sources of funds are customer deposits, loan repayments,
and maturities of investment securities. The Company has additional sources of
liquidity in the form of borrowings. Borrowings include federal funds purchased,
securities sold under repurchase agreements and borrowings from the Federal Home
Loan Bank.
FORWARD-LOOKING STATEMENTS
Statements which are forward-looking are not historical facts, and involve risks
and uncertainties that could cause the Company's results to differ materially
from those in any forward-looking statements. These risks include the possible
loss of key personnel, need for additional capital should the Company experience
faster than anticipated growth, changes in economic conditions, interest rate
risk, factors which could affect the Company's ability to compete in its trade
areas, changes in regulations and governmental policies, and the risks described
in the Company's Securities and Exchange Commission filings.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no material change in the Company's market risk profile from the
information disclosed in the Company's Form 10-K for the year ended December 31,
1999.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On June 2, 2000 the Company held its annual meeting of shareholders. At that
meeting the following items were submitted to a vote of security holders:
1. The following three directors were elected:
<TABLE>
<CAPTION>
SHARES VOTED
-------------------------------
NAME TERM FOR WITHHOLD
---------------------------- -------------- -------------- ---------------
<S> <C> <C> <C>
Eloy A. Jeantete 3 years 4,040,893 577,835
Michael R. Stanford 3 years 4,045,489 573,239
Marshall G. Martin 3 years 4,043,158 575,570
</TABLE>
2. Proposal to ratify the selection of KPMG LLP as the independent public
accountants of the Company. Votes: For 4,512,456; Against 88,972; Abstain
17,300.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
EXHIBIT 27 FINANCIAL DATA SCHEDULE
-9-
<PAGE> 12
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FIRST STATE BANCORPORATION
<TABLE>
<S> <C>
Date: August 11, 2000 By: Michael R. Stanford
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Michael R. Stanford, President & Chief Executive Officer
Date: August 11, 2000 By: H. Patrick Dee
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H. Patrick Dee, Executive Vice President & Chief Operating Officer
Date: August 11, 2000 By: Brian C. Reinhardt
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Brian C. Reinhardt, Executive Vice President & Chief Financial Officer
</TABLE>
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<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
27 Financial Data Schedule
</TABLE>
