##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 For quarterly period ended September 30, 2005
    
    
    
    Commission file number 333-40028
 Front Range Capital Corporation
  Colorado
    
    84-0970160(State or other jurisdiction
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 390 Interlocken Crescent Suite 600, Broomfield, Colorado
    
    80021(Address of principal executive offices)
    
    (Zip code)
 (303) 926-0300
  þ o
  o þ
  o þ




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PageFORWARD-LOOKING STATEMENTS
    
    
    1PART I  FINANCIAL INFORMATION
    
    
    2Item 1. Financial Statements
    
    
    2Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    24PART II  OTHER INFORMATION
    
    
    25Item 1. Legal Proceedings
    
    
    25Item 4. Submission of Matters to a Vote of Security Holders
    
    
    25Item 5. Other Information
    
    
    25Item 6. Exhibits
    
    
    27SIGNATURES
    
    
    28Form of IndentureForm of Amended and Restated Declaration of TrustForm of Guarantee AgreementForm of Placement AgreementCertificate of TrustRule 13a-14(a)/15d-14(a) Certification of CEORule 13a-14(a)/15d-14(a) Certification of CFOSection 1350 Certification of CEOSection 1350 Certification of CFO




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##### Table of Contents




    
    the strength of the United States and Colorado economies which may be less favorable than
expected;
    
    the economic impact of the war in Iraq;
    
    changes in the interest rate environment;
    
    changes in laws, regulations and policies affecting banking, securities and monetary and
financial matters;
    
    significantly increasing competitive pressure in the banking industry;
    
    operational risks including data processing system failures or fraud;
    
    consumer spending and saving habits;
    
    changes in accounting policies and practices;
    
    volatility of rate sensitive deposits; and
    
    asset/liability matching risks and liquidity risks.
  -1-




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##### Table of Contents



Item 1. Financial Statements
 FRONT RANGE CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 At September 30,
    
    
    At December 31,2005
    
    
    2004
    
    
    2004Assets:Cash and due from banks
    
    $
    14,971,000
    
    
    $
    12,860,000
    
    
    $
    14,298,000Investment securities available for sale
    
    
    82,654,000
    
    
    
    71,433,000
    
    
    
    80,806,000Nonmarketable securities
    
    
    4,652,000
    
    
    
    4,050,000
    
    
    
    4,084,000LoansReal estate-construction
    
    
    79,182,000
    
    
    
    59,862,000
    
    
    
    59,520,000Real estate-commercial
    
    
    148,402,000
    
    
    
    143,205,000
    
    
    
    142,256,000Real estate-residential
    
    
    52,542,000
    
    
    
    52,045,000
    
    
    
    50,462,000Commercial
    
    
    38,170,000
    
    
    
    33,943,000
    
    
    
    32,409,000Consumer
    
    
    6,690,000
    
    
    
    6,560,000
    
    
    
    6,501,000Total loans
    
    
    324,986,000
    
    
    
    295,615,000
    
    
    
    291,148,000Less unearned income
    
    
    (1,201,000
    )
    
    
    (1,209,000
    )
    
    
    (1,109,000
    )Loans, net of unearned income
    
    
    323,785,000
    
    
    
    294,406,000
    
    
    
    290,039,000Allowance for loan losses
    
    
    (3,447,000
    )
    
    
    (2,918,000
    )
    
    
    (3,553,000
    )Loans, net of allowance for loan losses
    
    
    320,338,000
    
    
    
    291,488,000
    
    
    
    286,486,000Premises and equipment, net
    
    
    12,266,000
    
    
    
    10,281,000
    
    
    
    10,963,000Cash value of life insurance
    
    
    8,392,000
    
    
    
    8,226,000
    
    
    
    8,297,000Other real estate owned
    
    
    8,593,000
    
    
    
    8,859,000
    
    
    
    10,302,000Accrued interest receivable
    
    
    1,988,000
    
    
    
    1,602,000
    
    
    
    1,347,000Deferred income taxes
    
    
    2,876,000
    
    
    
    1,729,000
    
    
    
    2,214,000Other assets
    
    
    1,279,000
    
    
    
    1,694,000
    
    
    
    1,611,000Total Assets
    
    $
    458,009,000
    
    
    $
    412,222,000
    
    
    $
    420,408,000Liabilities:Deposits:Noninterest-bearing demand
    
    $
    63,365,000
    
    
    $
    58,313,000
    
    
    $
    60,771,000Interest-bearing demand
    
    
    130,863,000
    
    
    
    119,997,000
    
    
    
    124,355,000Savings
    
    
    15,343,000
    
    
    
    15,533,000
    
    
    
    15,631,000Time certificates, $100,000 and over
    
    
    70,490,000
    
    
    
    70,269,000
    
    
    
    75,523,000Other time certificates
    
    
    60,767,000
    
    
    
    77,199,000
    
    
    
    67,912,000Total deposits
    
    
    340,828,000
    
    
    
    341,311,000
    
    
    
    344,192,000Short-term funds borrowed
    
    
    61,960,000
    
    
    
    21,385,000
    
    
    
    27,020,000Securities sold under agreement to repurchase (REPOs)
    
    
    7,375,000
    
    
    
    
    
    
    
    Long-term debt
    
    
    9,989,000
    
    
    
    11,671,000
    
    
    
    11,499,000Subordinated debentures
    
    
    9,485,000
    
    
    
    9,485,000
    
    
    
    9,485,000Accrued interest payable
    
    
    880,000
    
    
    
    592,000
    
    
    
    672,000Other liabilities
    
    
    4,036,000
    
    
    
    3,804,000
    
    
    
    4,036,000Total Liabilities
    
    $
    434,553,000
    
    
    $
    388,248,000
    
    
    $
    396,904,000Shareholders Equity:Preferred stock, $.001 par value; authorized 100,000,000 shares;
issued and outstanding 14,067 shares,
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital, preferred stock
    
    
    3,620,000
    
    
    
    3,646,000
    
    
    
    3,620,000Common stock, Class A (voting) and Class B (non-voting),
$.001 par value; authorized 200,000,000 shares,
issued and outstanding 1,887,369 shares
    
    
    2,000
    
    
    
    2,000
    
    
    
    2,000Additional paid-in capital, common stock
    
    
    11,282,000
    
    
    
    11,282,000
    
    
    
    11,282,000Retained earnings
    
    
    9,173,000
    
    
    
    8,674,000
    
    
    
    8,364,000Accumulated other comprehensive income (loss)
    
    
    (621,000
    )
    
    
    370,000
    
    
    
    236,000Total Shareholders Equity
    
    
    23,456,000
    
    
    
    23,974,000
    
    
    
    23,504,000Total Liabilities and Shareholders Equity
    
    $
    458,009,000
    
    
    $
    412,222,000
    
    
    $
    420,408,000
  -2-




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FRONT RANGE CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 Three months ended September 30,
    
    
    Nine months ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(unaudited)
    
    
    (unaudited)Interest and Dividend Income:Interest and fees on loans
    
    $
    6,342,000
    
    
    $
    5,242,000
    
    
    $
    17,572,000
    
    
    $
    15,458,000Interest and dividends on investment
securities available for saleTaxable
    
    
    584,000
    
    
    
    422,000
    
    
    
    1,668,000
    
    
    
    1,215,000Tax exempt
    
    
    223,000
    
    
    
    229,000
    
    
    
    690,000
    
    
    
    600,000Dividends
    
    
    58,000
    
    
    
    47,000
    
    
    
    159,000
    
    
    
    130,000Interest on federal funds sold and other
    
    
    6,000
    
    
    
    2,000
    
    
    
    15,000
    
    
    
    6,000Total interest income
    
    
    7,213,000
    
    
    
    5,942,000
    
    
    
    20,104,000
    
    
    
    17,409,000Interest Expense:Interest on interest-bearing demand deposits
    
    
    579,000
    
    
    
    326,000
    
    
    
    1,498,000
    
    
    
    859,000Interest on savings
    
    
    24,000
    
    
    
    10,000
    
    
    
    61,000
    
    
    
    27,000Interest on time certificates of deposit
    
    
    1,254,000
    
    
    
    978,000
    
    
    
    3,455,000
    
    
    
    2,649,000Interest on short-term borrowing
    
    
    592,000
    
    
    
    65,000
    
    
    
    1,267,000
    
    
    
    227,000Interest on long-term debt
    
    
    146,000
    
    
    
    175,000
    
    
    
    455,000
    
    
    
    554,000Interest on subordinated debentures
    
    
    275,000
    
    
    
    275,000
    
    
    
    824,000
    
    
    
    824,000Total interest expense
    
    
    2,870,000
    
    
    
    1,829,000
    
    
    
    7,560,000
    
    
    
    5,140,000Net Interest Income
    
    
    4,343,000
    
    
    
    4,113,000
    
    
    
    12,544,000
    
    
    
    12,269,000Provision for loan losses
    
    
    325,000
    
    
    
    644,000
    
    
    
    831,000
    
    
    
    1,047,000Net Interest Income after Provision for Loan Losses
    
    
    4,018,000
    
    
    
    3,469,000
    
    
    
    11,713,000
    
    
    
    11,222,000Noninterest Income:Service charges and customer service fees
    
    
    636,000
    
    
    
    589,000
    
    
    
    1,751,000
    
    
    
    1,788,000Gain on sale of securities available for sale
    
    
    
    
    
    
    10,000
    
    
    
    370,000
    
    
    
    217,000Mortgage referral fees
    
    
    101,000
    
    
    
    113,000
    
    
    
    295,000
    
    
    
    398,000Other
    
    
    123,000
    
    
    
    317,000
    
    
    
    539,000
    
    
    
    624,000Total Noninterest Income
    
    
    860,000
    
    
    
    1,029,000
    
    
    
    2,955,000
    
    
    
    3,027,000Noninterest Expense:Salaries and employee benefits
    
    
    2,607,000
    
    
    
    2,383,000
    
    
    
    7,640,000
    
    
    
    6,953,000Occupancy expense
    
    
    440,000
    
    
    
    390,000
    
    
    
    1,274,000
    
    
    
    1,236,000Furniture and equipment
    
    
    239,000
    
    
    
    205,000
    
    
    
    677,000
    
    
    
    594,000Data processing
    
    
    199,000
    
    
    
    206,000
    
    
    
    614,000
    
    
    
    607,000Marketing
    
    
    136,000
    
    
    
    123,000
    
    
    
    368,000
    
    
    
    447,000Printing and supplies
    
    
    62,000
    
    
    
    74,000
    
    
    
    205,000
    
    
    
    208,000Loan and collection
    
    
    71,000
    
    
    
    59,000
    
    
    
    265,000
    
    
    
    276,000ATM and Debit Card
    
    
    97,000
    
    
    
    80,000
    
    
    
    274,000
    
    
    
    272,000Other real estate  Heritage Place
    
    
    124,000
    
    
    
    127,000
    
    
    
    396,000
    
    
    
    408,000Loss (gain) on sale of OREO and other foreclosed assets
    
    
    205,000
    
    
    
    (74,000
    )
    
    
    223,000
    
    
    
    (40,000
    )Other
    
    
    673,000
    
    
    
    567,000
    
    
    
    1,699,000
    
    
    
    1,654,000Total Noninterest Expense
    
    
    4,853,000
    
    
    
    4,140,000
    
    
    
    13,635,000
    
    
    
    12,615,000Income Before Income Taxes
    
    
    25,000
    
    
    
    358,000
    
    
    
    1,033,000
    
    
    
    1,634,000Provision (benefit) for income taxes
    
    
    (96,000
    )
    
    
    30,000
    
    
    
    67,000
    
    
    
    310,000Net Income
    
    $
    121,000
    
    
    $
    328,000
    
    
    $
    966,000
    
    
    $
    1,324,000Comprehensive Income (loss):Change in unrealized gain (loss) on
securities available for sale, net
    
    
    (197,000
    )
    
    
    1,277,000
    
    
    
    (857,000
    )
    
    
    127,000Comprehensive Income (loss)
    
    $
    (76,000
    )
    
    $
    1,605,000
    
    
    $
    109,000
    
    
    $
    1,451,000Average Common Shares Outstanding
    
    
    1,887,369
    
    
    
    1,887,369
    
    
    
    1,887,369
    
    
    
    1,887,369Diluted Average Common Shares Outstanding
    
    
    1,897,869
    
    
    
    1,897,869
    
    
    
    1,897,869
    
    
    
    1,897,869Per Share DataBasic earnings
    
    $
    0.03
    
    
    $
    0.15
    
    
    $
    0.43
    
    
    $
    0.64Diluted earnings
    
    $
    0.03
    
    
    $
    0.15
    
    
    $
    0.43
    
    
    $
    0.64Dividends declared on common stock
    
    $
    0.00
    
    
    $
    0.27
    
    
    $
    0.00
    
    
    $
    0.27
  -3-




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##### Table of Contents



FRONT RANGE CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
(UNAUDITED)
 AccumulatedOtherPreferred
    
    
    Common
    
    
    Retained
    
    
    ComprehensiveStock
    
    
    Stock
    
    
    Earnings
    
    
    Income (loss), Net
    
    
    TotalBalance, December 31, 2003
    
    $
    3,670,000
    
    
    $
    11,284,000
    
    
    $
    7,975,000
    
    
    $
    243,000
    
    
    $
    23,172,000Redemption of Preferred Stock
    
    
    (24,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,000
    )Net income for the period
    
    
    
    
    
    
    
    
    
    
    1,324,000
    
    
    
    
    
    
    
    1,324,000Change in unrealized gain on securities
available-for-sale, net of reclassification
adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    127,000
    
    
    
    127,000Dividends declared on 2000 Series B
Preferred Stock
    
    
    
    
    
    
    
    
    
    
    (112,000
    )
    
    
    
    
    
    
    (112,000
    )Dividends declared on 1987 Series A Preferred
Stock, 1988 Preferred Stock
and Common Stock
    
    
    
    
    
    
    
    
    
    
    (513,000
    )
    
    
    
    
    
    
    (513,000
    )Balance September 30, 2004
    
    $
    3,646,000
    
    
    $
    11,284,000
    
    
    $
    8,674,000
    
    
    $
    370,000
    
    
    $
    23,974,000Balance, December 31, 2004
    
    $
    3,620,000
    
    
    $
    11,284,000
    
    
    $
    8,364,000
    
    
    $
    236,000
    
    
    $
    23,504,000Net income for the period
    
    
    
    
    
    
    
    
    
    
    966,000
    
    
    
    
    
    
    
    966,000Change in unrealized gain (loss) on securities
available-for-sale, net of reclassification
adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (857,000
    )
    
    
    (857,000
    )Dividends declared on 2000 Series B
Preferred Stock
    
    
    
    
    
    
    
    
    
    
    (157,000
    )
    
    
    
    
    
    
    (157,000
    )Balance September 30, 2005
    
    $
    3,620,000
    
    
    $
    11,284,000
    
    
    $
    9,173,000
    
    
    
    ($621,000
    )
    
    $
    23,456,000
  -4-




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##### Table of Contents



FRONT RANGE CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the nine monthsended September 30,2005
    
    
    2004(unaudited)Cash Flows from Operating Activities:Net income
    
    $
    966,000
    
    
    $
    1,324,000Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    777,000
    
    
    
    719,000Net amortization of securities
    
    
    224,000
    
    
    
    239,000(Gain) on available for sale securities, net
    
    
    (370,000
    )
    
    
    (217,000
    )Provision for loan losses
    
    
    831,000
    
    
    
    1,047,000Loss (gain) on sale of OREO and foreclosed assets
    
    
    223,000
    
    
    
    (40,000
    )Net change in assets and liabilities:(Increase) in accrued interest receivable
    
    
    (641,000
    )
    
    
    (276,000
    )Decrease (increase) in other assets
    
    
    385,000
    
    
    
    (260,000
    )Increase in accrued interest payable
    
    
    208,000
    
    
    
    71,000Increase (decrease) in other liabilities
    
    
    (158,000
    )
    
    
    74,000Net Cash Provided by Operating Activities
    
    
    2,445,000
    
    
    
    2,681,000Cash Flows from Investing Activities:Proceeds from sale of securities available-for-sale
    
    
    7,356,000
    
    
    
    19,056,000Proceeds from maturities, payments and calls of securities
available-for-sale
    
    
    7,956,000
    
    
    
    4,542,000Purchases of securities available-for-sale
    
    
    (18,375,000
    )
    
    
    (32,261,000
    )Purchases of non-marketable securities
    
    
    (568,000
    )
    
    
    (615,000
    )Net (increase) in loans
    
    
    (35,628,000
    )
    
    
    (10,949,000
    )(Purchases) of property and equipment
    
    
    (2,080,000
    )
    
    
    (645,000
    )Proceeds from sale of other real estate owned
    
    
    2,232,000
    
    
    
    1,984,000Proceeds from sale of foreclosed assets
    
    
    51,000
    
    
    
    604,000Net Cash Used in Investing Activities
    
    
    (39,056,000
    )
    
    
    (18,284,000
    )Cash Flows from Financing Activities:Net increase (decrease) in deposits
    
    
    (3,364,000
    )
    
    
    37,798,000Net increase (decrease) in short-term borrowings
    
    
    42,315,000
    
    
    
    (19,690,000
    )Payments of principal on long-term debt
    
    
    (1,510,000
    )
    
    
    (5,310,000
    )Redemption of Perpetual Preferred Stock
    
    
    
    
    
    
    (24,000
    )Dividends paid on 2000 Series B Preferred Stock
    
    
    (157,000
    )
    
    
    (112,000
    )Dividends paid on 1987 Series A Preferred Stock,
1988 Series A Preferred Stock and Common Stock
    
    
    
    
    
    
    (513,000
    )Net Cash Provided by Financing Activities
    
    
    37,284,000
    
    
    
    12,149,000Net increase (decrease) in cash and cash equivalents
    
    
    673,000
    
    
    
    (3,444,000
    )Beginning
    
    
    14,298,000
    
    
    
    16,304,000Ending
    
    $
    14,971,000
    
    
    $
    12,860,000Supplemental Disclosure of Noncash and Financial Activities:Other real estate acquired in settlement of loans
    
    $
    890,000
    
    
    $
    1,070,000Supplemental Disclosure of Cash Flow information:Cash paid for interest expense
    
    $
    7,352,000
    
    
    $
    5,069,000Cash paid for income taxes
    
    $
    70,000
    
    
    $
    380,000
  -5-




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##### Table of Contents



Notes to Unaudited Consolidated Financial Statements
 Note 1: General Summary of Significant Accounting Policies
 Principles of Consolidation
 Nature of Operations
 Earnings per Common Share
  -6-




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##### Table of Contents



For the three months
    
    
    For the nine monthsended September 30,
    
    
    ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Numerator:Net income
    
    $
    121,000
    
    
    $
    328,000
    
    
    $
    966,000
    
    
    $
    1,324,000Less preferred stock dividends
    
    
    58,000
    
    
    
    40,000
    
    
    
    157,000
    
    
    
    112,000Net income applicable to common stock
    
    $
    63,000
    
    
    $
    288,000
    
    
    $
    809,000
    
    
    $
    1,212,000Denominator:Average number of common shares
outstanding used to calculate
basic earnings per common share
    
    
    1,887,000
    
    
    
    1,887,000
    
    
    
    1,887,000
    
    
    
    1,887,000Effect of dilutive convertible
preferred stock
    
    
    11,000
    
    
    
    11,000
    
    
    
    11,000
    
    
    
    11,000Average number of common shares
used to calculate diluted earnings per
common share
    
    
    1,898,000
    
    
    
    1,898,000
    
    
    
    1,898,000
    
    
    
    1,898,000Basic and diluted earnings per common share
    
    $
    0.03
    
    
    $
    0.15
    
    
    $
    0.43
    
    
    $
    0.64Dividends declared on common stock
    
    $
    0.00
    
    
    $
    0.27
    
    
    $
    0.00
    
    
    $
    0.27
 Use of Estimates in the Preparation of Financial Statements
 -7-




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##### Table of Contents



FRONT RANGE CAPITAL CORPORATION AND SUBSIDIARIES   )
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net interest income (FTE)
    
    $
    4,486,000
    
    
    $
    4,257,000
    
    
    $
    12,988,000
    
    
    $
    12,646,000Provision for loan losses
    
    
    (325,000
    )
    
    
    (644,000
    )
    
    
    (831,000
    )
    
    
    (1,047,000
    )Noninterest income
    
    
    860,000
    
    
    
    1,029,000
    
    
    
    2,955,000
    
    
    
    3,027,000Noninterest expense
    
    
    (4,853,000
    )
    
    
    (4,140,000
    )
    
    
    (13,635,000
    )
    
    
    (12,615,000
    )Provision for income taxes (FTE)
    
    
    (47,000
    )
    
    
    (174,000
    )
    
    
    (511,000
    )
    
    
    (687,000
    )Net income
    
    $
    121,000
    
    
    $
    328,000
    
    
    $
    966,000
    
    
    $
    1,324,000Average common shares outstanding
    
    
    1,887,369
    
    
    
    1,887,369
    
    
    
    1,887,369
    
    
    
    1,887,369Diluted average common shares outstanding
    
    
    1,897,869
    
    
    
    1,897,869
    
    
    
    1,897,869
    
    
    
    1,897,869Common shares outstanding at period end
    
    
    1,887,369
    
    
    
    1,887,369
    
    
    
    1,887,369
    
    
    
    1,887,369As Reported:Basic earnings per common share
    
    $
    0.03
    
    
    $
    0.15
    
    
    $
    0.43
    
    
    $
    0.64Diluted earnings per common share
    
    $
    0.03
    
    
    $
    0.15
    
    
    $
    0.43
    
    
    $
    0.64Return on assets (1)
    
    
    0.11
    %
    
    
    0.32
    %
    
    
    0.29
    %
    
    
    0.45
    %Return on equity (1)
    
    
    2.04
    %
    
    
    5.34
    %
    
    
    5.51
    %
    
    
    7.54
    %Net interest margin
    
    
    4.35
    %
    
    
    4.68
    %
    
    
    4.39
    %
    
    
    4.77
    %Net loan charge-offs to average loans
    
    
    0.17
    %
    
    
    0.20
    %
    
    
    0.30
    %
    
    
    0.35
    %Efficiency ratio (FTE)
    
    
    90.78
    %
    
    
    78.32
    %
    
    
    85.52
    %
    
    
    80.49
    %Average Balances:Total assets
    
    $
    454,447,000
    
    
    $
    402,553,000
    
    
    $
    440,343,000
    
    
    $
    395,962,000Earning assets
    
    
    409,641,000
    
    
    
    361,577,000
    
    
    
    395,935,000
    
    
    
    354,497,000Total loans
    
    
    320,154,000
    
    
    
    287,532,000
    
    
    
    308,616,000
    
    
    
    286,826,000Total deposits
    
    
    340,529,000
    
    
    
    337,325,000
    
    
    
    339,456,000
    
    
    
    320,931,000Shareholders equity
    
    
    23,488,000
    
    
    
    23,290,000
    
    
    
    23,447,000
    
    
    
    23,461,000Balances at Period End:Total assets
    
    
    
    
    
    
    
    
    
    $
    458,009,000
    
    
    $
    412,222,000Earning assets
    
    
    
    
    
    
    
    
    
    
    412,847,000
    
    
    
    354,235,000Total loans
    
    
    
    
    
    
    
    
    
    
    323,785,000
    
    
    
    294,406,000Total deposits
    
    
    
    
    
    
    
    
    
    
    340,828,000
    
    
    
    341,311,000Shareholders equity
    
    
    
    
    
    
    
    
    
    
    23,456,000
    
    
    
    23,974,000Financial Ratios at Period End:Allowance for loan losses to loans
    
    
    
    
    
    
    
    
    
    
    1.06
    %
    
    
    0.99
    %Book value per common share *
    
    
    
    
    
    
    
    
    
    $
    10.81
    
    
    $
    10.53Equity to assets
    
    
    
    
    
    
    
    
    
    
    5.12
    %
    
    
    5.82
    %Regulatory total capital to risk-weighted assets
    
    
    
    
    
    
    
    
    
    
    9.77
    %
    
    
    10.48
    %Dividends paid per common share
    
    
    
    
    
    
    
    
    
    $
    0.00
    
    
    $
    0.27
 
 (1)
    
    annualized*
    
    excludes accumulated other comprehensive income (loss)(FTE)
    
    = fully tax equivalent -8-




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   Critical Accounting Policies
  Financial Condition
  Net Income
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net interest income (FTE)
    
    $
    4,486,000
    
    
    $
    4,257,000
    
    
    $
    12,988,000
    
    
    $
    12,646,000Provision for loan losses
    
    
    (325,000
    )
    
    
    (644,000
    )
    
    
    (831,000
    )
    
    
    (1,047,000
    )Noninterest income
    
    
    860,000
    
    
    
    1,029,000
    
    
    
    2,955,000
    
    
    
    3,027,000Noninterest expense
    
    
    (4,853,000
    )
    
    
    (4,140,000
    )
    
    
    (13,635,000
    )
    
    
    (12,615,000
    )Provision for income taxes (FTE)
    
    
    (47,000
    )
    
    
    (174,000
    )
    
    
    (511,000
    )
    
    
    (687,000
    )Net income
    
    $
    121,000
    
    
    $
    328,000
    
    
    $
    966,000
    
    
    $
    1,324,000
 -9-




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##### Table of Contents



Net Interest Income
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Interest income
    
    $
    7,213,000
    
    
    $
    5,942,000
    
    
    $
    20,104,000
    
    
    $
    17,409,000Interest expense
    
    
    (2,870,000
    )
    
    
    (1,829,000
    )
    
    
    (7,560,000
    )
    
    
    (5,140,000
    )FTE adjustment
    
    
    143,000
    
    
    
    144,000
    
    
    
    444,000
    
    
    
    377,000Net interest income (FTE)
    
    $
    4,486,000
    
    
    $
    4,257,000
    
    
    $
    12,988,000
    
    
    $
    12,646,000Average earning assets
    
    $
    409,641,000
    
    
    $
    361,577,000
    
    
    $
    395,934,000
    
    
    $
    354,497,000Net interest margin (FTE)
    
    
    4.35
    %
    
    
    4.68
    %
    
    
    4.39
    %
    
    
    4.77
    %
 -10-




---



##### Table of Contents



Interest Income
  Interest Expense
  -11-




---



##### Table of Contents



Net Interest Margin (FTE)
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Yield on interest-earning assets
    
    
    7.12
    %
    
    
    6.70
    %
    
    
    6.94
    %
    
    
    6.70
    %Rate paid on interest-bearing liabilities
    
    
    3.10
    %
    
    
    2.26
    %
    
    
    2.85
    %
    
    
    2.17
    %Net interest spread
    
    
    4.02
    %
    
    
    4.44
    %
    
    
    4.09
    %
    
    
    4.53
    %Impact of all other net
noninterest-bearing funds
    
    
    0.33
    %
    
    
    0.24
    %
    
    
    0.30
    %
    
    
    0.24
    %Net interest margin
    
    
    4.35
    %
    
    
    4.68
    %
    
    
    4.39
    %
    
    
    4.77
    %
   -12-




---



##### Table of Contents



-13-




---



##### Table of Contents



Summary of Average Balances, Yields/Rates and Interest Differential
 For the three months endedSeptember 30, 2005
    
    
    September 30, 2004(Dollars in thousands)Interest
    
    
    Rates
    
    
    
    
    
    Interest
    
    
    RatesAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    PaidAssets:Loans
    
    $
    320,154
    
    
    $
    6,354
    
    
    
    7.87
    %
    
    $
    289,532
    
    
    $
    5,251
    
    
    
    7.22
    %Investment securities  taxable
    
    
    64,201
    
    
    
    642
    
    
    
    3.97
    %
    
    
    48,488
    
    
    
    469
    
    
    
    3.85
    %Investment securities  nontaxable
    
    
    24,513
    
    
    
    354
    
    
    
    5.73
    %
    
    
    22,785
    
    
    
    364
    
    
    
    6.36
    %Federal funds sold and due
from banks (interest-bearing)
    
    
    773
    
    
    
    6
    
    
    
    3.08
    %
    
    
    772
    
    
    
    2
    
    
    
    1.03
    %Total interest-earning assets
    
    
    409,641
    
    
    
    7,356
    
    
    
    7.12
    %
    
    
    361,577
    
    
    
    6,086
    
    
    
    6.70
    %Other assets
    
    
    44,806
    
    
    
    
    
    
    
    
    
    
    
    40,975Total assets
    
    $
    454,447
    
    
    $
    7,356
    
    
    
    
    
    
    $
    402,552
    
    
    $
    6,086Liabilities and shareholders equity:Interest-bearing demand deposits
    
    $
    133,462
    
    
    $
    579
    
    
    
    1.72
    %
    
    $
    122,442
    
    
    $
    326
    
    
    
    1.06
    %Savings deposits
    
    
    15,368
    
    
    
    24
    
    
    
    0.62
    %
    
    
    15,774
    
    
    
    10
    
    
    
    0.25
    %Time deposits
    
    
    132,679
    
    
    
    1,254
    
    
    
    3.75
    %
    
    
    146,422
    
    
    
    978
    
    
    
    2.66
    %Other short-term borrowed funds
and Repos(3)
    
    
    65,847
    
    
    
    592
    
    
    
    3.57
    %
    
    
    15,237
    
    
    
    65
    
    
    
    1.70
    %Long-term debt
    
    
    10,335
    
    
    
    146
    
    
    
    5.60
    %
    
    
    13,218
    
    
    
    175
    
    
    
    5.27
    %Subordinated debentures
    
    
    9,485
    
    
    
    275
    
    
    
    11.50
    %
    
    
    9,485
    
    
    
    275
    
    
    
    11.53
    %Total interest-bearing liabilities
    
    $
    367,176
    
    
    $
    2,870
    
    
    
    3.10
    %
    
    $
    322,578
    
    
    $
    1,829
    
    
    
    2.26
    %Noninterest-bearing deposits
    
    
    59,020
    
    
    
    
    
    
    
    
    
    
    
    52,739Other liabilities
    
    
    4,763
    
    
    
    
    
    
    
    
    
    
    
    3,945Shareholders equity
    
    
    23,488
    
    
    
    
    
    
    
    
    
    
    
    23,290Total liabilities
and shareholders equity
    
    $
    454,447
    
    
    
    
    
    
    
    
    
    
    $
    402,552Net interest spread(1)
    
    
    
    
    
    
    
    
    
    
    4.02
    %
    
    
    
    
    
    
    
    
    
    
    4.44
    %Net interest income and interest
margin(2)
    
    
    
    
    
    $
    4,486
    
    
    
    4.35
    %
    
    
    
    
    
    $
    4,257
    
    
    
    4.68
    %
 
 (1)
    
    Net interest spread represents the average yield earned on interest-earning assets minus the
average rate paid on interest-bearing liabilities.(2)
    
    Net interest margin is computed by calculating the difference between interest income and
expense, divided by the average balance of interest-earning assets.(3)
    
    Repos are securities sold under agreement to repurchase. -14-




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##### Table of Contents



For the nine months endedSeptember 30, 2005
    
    
    September 30, 2004(Dollars in thousands)Interest
    
    
    Rates
    
    
    
    
    
    Interest
    
    
    RatesAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    PaidAssets:Loans
    
    $
    308,616
    
    
    $
    17,610
    
    
    
    7.63
    %
    
    $
    286,826
    
    
    $
    15,482
    
    
    
    7.21
    %Investment securities  taxable
    
    
    61,627
    
    
    
    1,827
    
    
    
    3.96
    %
    
    
    47,555
    
    
    
    1,345
    
    
    
    3.78
    %Investment securities  nontaxable
    
    
    24,919
    
    
    
    1,096
    
    
    
    5.88
    %
    
    
    19,326
    
    
    
    953
    
    
    
    6.59
    %Federal funds sold and due
from banks (interest-bearing)
    
    
    773
    
    
    
    15
    
    
    
    2.59
    %
    
    
    789
    
    
    
    6
    
    
    
    1.02
    %Total interest-earning assets
    
    
    395,935
    
    
    
    20,548
    
    
    
    6.94
    %
    
    
    354,496
    
    
    
    17,786
    
    
    
    6.70
    %Other assets
    
    
    44,408
    
    
    
    
    
    
    
    
    
    
    
    41,465Total assets
    
    $
    440,343
    
    
    $
    20,548
    
    
    
    
    
    
    $
    395,961
    
    
    $
    17,786Liabilities and shareholders equity:Interest-bearing demand deposits
    
    $
    127,242
    
    
    $
    1,498
    
    
    
    1.57
    %
    
    $
    117,967
    
    
    $
    859
    
    
    
    0.97
    %Savings deposits
    
    
    15,251
    
    
    
    61
    
    
    
    0.53
    %
    
    
    14,652
    
    
    
    27
    
    
    
    0.25
    %Time deposits
    
    
    139,341
    
    
    
    3,455
    
    
    
    3.32
    %
    
    
    136,701
    
    
    
    2,649
    
    
    
    2.59
    %Other short-term borrowed funds
and Repos(3)
    
    
    52,243
    
    
    
    1,267
    
    
    
    3.24
    %
    
    
    23,402
    
    
    
    227
    
    
    
    1.30
    %Long-term debt
    
    
    11,063
    
    
    
    455
    
    
    
    5.50
    %
    
    
    14,534
    
    
    
    554
    
    
    
    5.09
    %Subordinated debentures
    
    
    9,485
    
    
    
    824
    
    
    
    11.62
    %
    
    
    9,485
    
    
    
    824
    
    
    
    11.60
    %Total interest-bearing liabilities
    
    $
    354,625
    
    
    $
    7,560
    
    
    
    2.85
    %
    
    $
    316,741
    
    
    $
    5,140
    
    
    
    2.17
    %Noninterest-bearing deposits
    
    
    57,622
    
    
    
    
    
    
    
    
    
    
    
    51,629Other liabilities
    
    
    4,649
    
    
    
    
    
    
    
    
    
    
    
    4,130Shareholders equity
    
    
    23,447
    
    
    
    
    
    
    
    
    
    
    
    23,461Total liabilities
and shareholders equity
    
    $
    440,343
    
    
    
    
    
    
    
    
    
    
    $
    395,961Net interest spread(1)
    
    
    
    
    
    
    
    
    
    
    4.09
    %
    
    
    
    
    
    
    
    
    
    
    4.53
    %Net interest income and interest margin(2)
    
    
    
    
    
    $
    12,988
    
    
    
    4.39
    %
    
    
    
    
    
    $
    12,646
    
    
    
    4.77
    %
 
 (1)
    
    Net interest spread represents the average yield earned on interest-earning assets minus the
average rate paid on interest-bearing liabilities.(2)
    
    Net interest margin is computed by calculating the difference between interest income and
expense, divided by the average balance of interest-earning assets.(3)
    
    Repos are securities sold under agreement to repurchase. -15-




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##### Table of Contents



Summary of Changes in Interest Income and Expense due to Changes in Average Asset and Liability
Balances and Yields Earned and Rates Paid
  Three months ended September 30, 2005compared with three monthsended September 30, 2004Volume
    
    
    Rate
    
    
    TotalIncrease (decrease) in interest income:Loans
    
    $
    555,000
    
    
    $
    548,000
    
    
    $
    1,103,000Investments  taxable
    
    
    152,000
    
    
    
    21,000
    
    
    
    173,000Investments  nontaxable
    
    
    28,000
    
    
    
    (38,000
    )
    
    
    (10,000
    )Federal funds sold
    
    
    
    
    
    
    4,000
    
    
    
    4,000Total interest-earning assets
    
    
    735,000
    
    
    
    535,000
    
    
    
    1,270,000Increase (decrease) in interest expense:Interest-bearing demand deposits
    
    
    29,000
    
    
    
    224,000
    
    
    
    253,000Savings deposits
    
    
    
    
    
    
    14,000
    
    
    
    14,000Time deposits
    
    
    (92,000
    )
    
    
    368,000
    
    
    
    276,000Other short term borrowings and Repos
    
    
    216,000
    
    
    
    311,000
    
    
    
    527,000Long-term debt
    
    
    (38,000
    )
    
    
    9,000
    
    
    
    (29,000
    )Subordinated debentures
    
    
    
    
    
    
    
    
    
    
    Total interest-bearing liabilities
    
    
    115,000
    
    
    
    926,000
    
    
    
    1,041,000Increase (decrease) in net interest income
    
    $
    620,000
    
    
    
    ($391,000
    )
    
    $
    229,000
 Nine months ended September 30, 2005compared with nine monthsended September 30, 2004Volume
    
    
    Rate
    
    
    TotalIncrease (decrease) in interest income:Loans
    
    $
    1,176,000
    
    
    $
    952,000
    
    
    $
    2,128,000Investments  taxable
    
    
    398,000
    
    
    
    84,000
    
    
    
    482,000Investments  nontaxable
    
    
    276,000
    
    
    
    (133,000
    )
    
    
    143,000Federal funds sold
    
    
    
    
    
    
    9,000
    
    
    
    9,000Total interest-earning assets
    
    
    1,850,000
    
    
    
    912,000
    
    
    
    2,762,000Increase (decrease) in interest expense:Interest-bearing demand deposits
    
    
    68,000
    
    
    
    571,000
    
    
    
    639,000Savings deposits
    
    
    1,000
    
    
    
    33,000
    
    
    
    34,000Time deposits
    
    
    51,000
    
    
    
    755,000
    
    
    
    806,000Other short term borrowings and Repos
    
    
    280,000
    
    
    
    760,000
    
    
    
    1,040,000Long-term debt
    
    
    (132,000
    )
    
    
    33,000
    
    
    
    (99,000
    )Subordinated debentures
    
    
    
    
    
    
    
    
    
    
    Total interest-bearing liabilities
    
    
    268,000
    
    
    
    2,152,000
    
    
    
    2,420,000Increase (decrease) in net interest income
    
    $
    1,582,000
    
    
    
    ($1,240,000
    )
    
    $
    342,000
 - 16 -




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##### Table of Contents



Provision for Loan Losses
  Noninterest Income
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Service charges on deposit accounts
    
    $
    636,000
    
    
    $
    589,000
    
    
    $
    1,751,000
    
    
    $
    1,788,000Gain on sale of investments
    
    
    
    
    
    
    10,000
    
    
    
    370,000
    
    
    
    217,000Mortgage referral fees
    
    
    101,000
    
    
    
    113,000
    
    
    
    295,000
    
    
    
    398,000Other noninterest income
    
    
    123,000
    
    
    
    317,000
    
    
    
    539,000
    
    
    
    624,000Total noninterest income
    
    $
    860,000
    
    
    $
    1,029,000
    
    
    $
    2,955,000
    
    
    $
    3,027,000
   - 17 -




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##### Table of Contents



Noninterest Expense
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Salaries and employee benefits
    
    $
    2,607,000
    
    
    $
    2,383,000
    
    
    $
    7,640,000
    
    
    $
    6,953,000Occupancy
    
    
    440,000
    
    
    
    390,000
    
    
    
    1,274,000
    
    
    
    1,236,000Furniture and Equipment
    
    
    239,000
    
    
    
    205,000
    
    
    
    677,000
    
    
    
    594,000Data processing
    
    
    199,000
    
    
    
    206,000
    
    
    
    614,000
    
    
    
    607,000Advertising and marketing
    
    
    136,000
    
    
    
    123,000
    
    
    
    368,000
    
    
    
    447,000Printing and supplies
    
    
    62,000
    
    
    
    74,000
    
    
    
    205,000
    
    
    
    208,000Loan and collection
    
    
    71,000
    
    
    
    59,000
    
    
    
    265,000
    
    
    
    276,000ATM and Debit Card
    
    
    97,000
    
    
    
    80,000
    
    
    
    274,000
    
    
    
    272,000Other real estate- Heritage Place
    
    
    124,000
    
    
    
    127,000
    
    
    
    396,000
    
    
    
    408,000Net loss (gain) on sale of OREO
and other foreclosed assets
    
    
    205,000
    
    
    
    (74,000
    )
    
    
    223,000
    
    
    
    (40,000
    )Other
    
    
    673,000
    
    
    
    567,000
    
    
    
    1,699,000
    
    
    
    1,654,000Total
    
    $
    4,853,000
    
    
    $
    4,140,000
    
    
    $
    13,635,000
    
    
    $
    12,615,000Average full time equivalent staff
    
    
    165
    
    
    
    155
    
    
    
    164
    
    
    
    153Noninterest expense to revenue (FTE)
    
    
    90.78
    %
    
    
    78.32
    %
    
    
    85.52
    %
    
    
    80.49
    %
   Provision for Income Tax
 - 18 -




---



##### Table of Contents



Classified Assets
  Nonperforming Loans
    - 19 -




---



##### Table of Contents



At Sept. 30, 2005
    
    
    At Sept. 30, 2004
    
    
    At December 31, 2004(unaudited)(dollars in thousands)Performing nonaccrual loans
    
    $
    1,596
    
    
    $
    462
    
    
    $
    2,126Nonperforming, nonaccrual loans
    
    
    2,359
    
    
    
    1,682
    
    
    
    2,174Total nonaccrual loans
    
    
    3,955
    
    
    
    2,144
    
    
    
    4,300Loans 90 days past due and still accruing
    
    
    15
    
    
    
    1,999
    
    
    
    90Total nonperforming loans
    
    
    3,970
    
    
    
    4,143
    
    
    
    4,390Other real estate owned,
excluding Heritage Place
    
    
    422
    
    
    
    688
    
    
    
    2,131Foreclosed assets
    
    
    3
    
    
    
    85
    
    
    
    5Total nonperforming assets
    
    $
    4,395
    
    
    $
    4,916
    
    
    $
    6,526Nonperforming loans to total loans
    
    
    1.2
    %
    
    
    1.4
    %
    
    
    1.5
    %Allowance for loan losses/nonperforming loans
    
    
    86.8
    %
    
    
    70.4
    %
    
    
    80.9
    %Nonperforming assets to total assets
    
    
    1.0
    %
    
    
    1.2
    %
    
    
    1.6
    %Allowance for loan losses to nonperforming assets
    
    
    78.4
    %
    
    
    59.4
    %
    
    
    54.4
    %
 Allowance for Loan Losses
  - 20 -




---



##### Table of Contents



Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Balance, beginning of period
    
    $
    3,661
    
    
    $
    2,849
    
    
    $
    3,553
    
    
    $
    2,872Loan loss provision
    
    
    325
    
    
    
    644
    
    
    
    831
    
    
    
    1,047Loans charged off
    
    
    (554
    )
    
    
    (649
    )
    
    
    (1,140
    )
    
    
    (1,142
    )Recoveries of previously
charged-off loans
    
    
    15
    
    
    
    74
    
    
    
    203
    
    
    
    141Net (charge-offs) recoveries
    
    
    (539
    )
    
    
    (575
    )
    
    
    (937
    )
    
    
    (1,001
    )Balance, end of period
    
    $
    3,447
    
    
    $
    2,918
    
    
    $
    3,447
    
    
    $
    2,918Allowance for loan losses/loans outstanding
    
    
    
    
    
    
    
    
    
    
    1.06
    %
    
    
    0.99
    %
 Capital Resources
 - 21 -




---



##### Table of Contents



To Be WellAt
    
    
    Minimum
    
    
    Capitalized UnderAt September 30,
    
    
    December 31,
    
    
    Regulatory
    
    
    Prompt Corrective2005
    
    
    2004
    
    
    2004
    
    
    Requirement
    
    
    Action ProvisionsTier I Capital (to risk-weighted assets)Consolidated
    
    
    7.3
    %
    
    
    7.8
    %
    
    
    7.7
    %Bank
    
    
    9.2
    %
    
    
    9.5
    %
    
    
    9.4
    %
    
    
    4.0
    %
    
    
    6.0
    %Total Capital (to risk-weighted assets)Consolidated
    
    
    9.8
    %
    
    
    10.5
    %
    
    
    10.5
    %Bank
    
    
    10.2
    %
    
    
    10.4
    %
    
    
    10.5
    %
    
    
    8.0
    %
    
    
    10.0
    %Tier I Leverage (to average assets)Consolidated
    
    
    6.0
    %
    
    
    6.5
    %
    
    
    6.3
    %Bank
    
    
    7.6
    %
    
    
    8.0
    %
    
    
    7.7
    %
    
    
    4.0
    %
    
    
    5.0
    %
 Off-Balance Sheet Items
 Certain Contractual Obligations
  Payment due by periodLess than
    
    
    1-3
    
    
    3-5
    
    
    More thanTotal
    
    
    one year
    
    
    years
    
    
    years
    
    
    5 years(dollars in thousands)Long-term debt
    
    $
    9,989
    
    
    $
    2,265
    
    
    $
    1,300
    
    
    $
    1,721
    
    
    $
    4,703Operating lease obligations
    
    
    3,138
    
    
    
    781
    
    
    
    1,448
    
    
    
    909
    
    
    
    0Subordinated debentures
    
    
    9,485
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    9,485
    (1)Total contractual obligations
    
    $
    22,612
    
    
    $
    3,046
    
    
    $
    2,748
    
    
    $
    2,630
    
    
    $
    14,188
 
 (1)
    
    On November 10, 2005, the Company announced that it planned to redeem these
subordinated debentures on December 28, 2005. See Subsequent Events below. SUBSEQUENT EVENTS
 - 22 -




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
 Asset and Liability Management
        - 23 -




---



##### Table of Contents



Liquidity
  
 Item 4. Controls and Procedures
   - 24 -




---



##### Table of Contents



Item 1. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
 
 Votes For
    
    Votes Against/Withheld
    
    AbstentionsWilliam A Mitchell, Jr.
    
    
    1,559,886
    
    
    
    0
    
    
    
    Claudia A. Beauprez
    
    
    1,559,886
    
    
    
    0
    
    
    
    Victor Fruehauf
    
    
    1,559,886
    
    
    
    0
    
    
    
    William G. Hofgard
    
    
    1,559,886
    
    
    
    0
    
    
    
    W. Bruce Joss
    
    
    1,559,886
    
    
    
    0
    
    
    
    Edwin S. Kanemoto
    
    
    1,559,886
    
    
    
    0
    
    
    
    Jon F. Kottke
    
    
    1,559,886
    
    
    
    0
    
    
    
    Robert W. Lathrop
    
    
    1,559,886
    
    
    
    0
    
    
    
    
 
 Item 5. Other Information
 Heritage Place
  - 25 -




---



##### Table of Contents



Other Property
  - 26 -




---



##### Table of Contents



Item 6. Exhibits
  Exhibit No.
    
    Description3.1*
    
    Articles of Incorporation of Front Range Capital Corporation.3.2**
    
    Articles of Third Amendment to the Articles of Incorporation.3.3*
    
    Bylaws of Front Range Capital Corporation4.1*
    
    Form of Indenture by and between Front Range Capital Corporation and Wilmington Trust Company4.2*
    
    Form of Subordinated Debenture (included as an exhibit to Exhibit 4.1)4.3*
    
    Certificate of Trust of Front Range Capital Trust I, as amended and restated4.4*
    
    Trust Agreement between Front Range Capital Corporation, Wilmington Trust Company and the
Administrative Trustees named therein4.5*
    
    Form of Amended and Restated Trust Agreement between Front Range Capital Corporation and
Wilmington Trust Company and the Administrative Trustees named therein4.6*
    
    Form of Trust Preferred Securities Certificate (included as an exhibit to Exhibit 4.5)4.7*
    
    Form of Trust Preferred Securities Guarantee Agreement between Front Range Capital
Corporation and Wilmington Trust Company4.8*
    
    Revised Form of Agreement of Expenses and Liabilities (included as an exhibit to Exhibit 4.5)4.9
    
    Form of Indenture between Front Range Capital Corporation and Wilmington Trust Company4.10
    
    Form of Fixed/Floating Rate Junior Subordinated Debt Security (included as an exhibit to
Exhibit 4.9)4.11
    
    Form of Amended and Restated Declaration of Trust between Front Range Capital Corporation,
Wilmington Trust Company and the Administrative Trustees named therein4.12
    
    Form of Capital Security Certificate (included as an exhibit to Exhibit 4.11)4.13
    
    Form of Common Security Certificate (included as an exhibit to Exhibit 4.11)4.14
    
    Form of Guarantee Agreement between Front Range Capital Corporation and Wilmington Trust
Company4.15
    
    Form of Placement Agreement between Front Range Capital Corporation, Wachovia Capital
Markets, LLC and Front Range Capital Trust II4.16
    
    Certificate of Trust of Front Range Capital II10.1*
    
    Lease Agreement between Lafayette State Bank and Fruehauf Investments Ltd.10.2*
    
    Promissory Note by Front Range Capital Corporation payable to Bankers Bank of the West10.3*
    
    Amendment and Restatement of Executive Retirement Plan of Heritage Bank10.4*
    
    Indexed Salary Continuation Plan of Heritage Bank10.5*
    
    Flexible Premium Life Insurance Endorsement Method Split Dollar Plan Agreement31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1
    
    Section 1350 Certification of Chief Executive Officer32.2
    
    Section 1350 Certification of Chief Financial Officer
 
 *
    
    Previously filed with the Companys Registration Statement on Form SB-2 (333-40028 and
333-40028-01) and incorporated herein by reference.**
    
    Previously filed with the Companys Annual Report on Form 10-KSB for the year ended December
31, 2000 and incorporated herein by reference - 27 -




---



##### Table of Contents



SIGNATURES
  FRONT RANGE CAPITAL CORPORATION
(Registrant)Date: November 10, 2005
    By:
    /s/ William A. Mitchell, Jr.William A. Mitchell, Jr.Chief Executive Officer and President
(Principal Executive Officer)Date: November 10, 2005
    By:
    /s/ Alice M. VossAlice M. VossChief Financial Officer
(Principal Financial and Accounting Officer) - 28 -




---



##### Table of Contents



Exhibit No.
    
    Description3.1*
    
    Articles of Incorporation of Front Range Capital Corporation.3.2**
    
    Articles of Third Amendment to the Articles of Incorporation.3.3*
    
    Bylaws of Front Range Capital Corporation4.1*
    
    Form of Indenture by and between Front Range Capital Corporation and Wilmington Trust Company4.2*
    
    Form of Subordinated Debenture (included as an exhibit to Exhibit 4.1)4.3*
    
    Certificate of Trust of Front Range Capital Trust I, as amended and restated4.4*
    
    Trust Agreement between Front Range Capital Corporation, Wilmington Trust Company and the
Administrative Trustees named therein4.5*
    
    Form of Amended and Restated Trust Agreement between Front Range Capital Corporation and
Wilmington Trust Company and the Administrative Trustees named therein4.6*
    
    Form of Trust Preferred Securities Certificate (included as an exhibit to Exhibit 4.5)4.7*
    
    Form of Trust Preferred Securities Guarantee Agreement between Front Range Capital
Corporation and Wilmington Trust Company4.8*
    
    Revised Form of Agreement of Expenses and Liabilities (included as an exhibit to Exhibit 4.5)4.9
    
    Form of Indenture between Front Range Capital Corporation and Wilmington Trust Company4.10
    
    Form of Fixed/Floating Rate Junior Subordinated Debt Security (included as an exhibit to
Exhibit 4.9)4.11
    
    Form of Amended and Restated Declaration of Trust between Front Range Capital Corporation,
Wilmington Trust Company and the Administrative Trustees named therein4.12
    
    Form of Capital Security Certificate (included as an exhibit to Exhibit 4.11)4.13
    
    Form of Common Security Certificate (included as an exhibit to Exhibit 4.11)4.14
    
    Form of Guarantee Agreement between Front Range Capital Corporation and Wilmington Trust
Company4.15
    
    Form of Placement Agreement between Front Range Capital Corporation, Wachovia Capital
Markets, LLC and Front Range Capital Trust II4.16
    
    Certificate of Trust of Front Range Capital II10.1*
    
    Lease Agreement between Lafayette State Bank and Fruehauf Investments Ltd.10.2*
    
    Promissory Note by Front Range Capital Corporation payable to Bankers Bank of the West10.3*
    
    Amendment and Restatement of Executive Retirement Plan of Heritage Bank10.4*
    
    Indexed Salary Continuation Plan of Heritage Bank10.5*
    
    Flexible Premium Life Insurance Endorsement Method Split Dollar Plan Agreement31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1
    
    Section 1350 Certification of Chief Executive Officer32.2
    
    Section 1350 Certification of Chief Financial Officer
 
 *
    
    Previously filed with the Companys Registration Statement on Form SB-2 (333-40028 and
333-40028-01) and incorporated herein by reference.**
    
    Previously filed with the Companys Annual Report on Form 10-KSB for the year ended December
31, 2000 and incorporated herein by reference - 29 -