**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,DC  20549**

** **

 

**FORM 10-Q**

 

 

 
| ý | **QUARTERLY REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|--------|----------------------------------------------------------------------------------------------|

 

**For the quarterly period ended September 30, 2001**

** **

**OR**

 
| o | **TRANSITION REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|---|-----------------------------------------------------------------------------------------------|

 

**For the transition period from                 to**

** **

**Commissionfile number   0-19368**

 

 

**COMMUNITY FIRSTBANKSHARES, INC.**

 (Exact name of registrant as specified in itscharter)

 

 

| **Delaware**                     |   | **46-0391436**                        |
|----------------------------------|--------|---------------------------------------|
| (State  or other jurisdiction of |   | (I.R.S.  Employer Identification No.) |
| incorporation  or organization)  |   |                                  |

 

 

| **520 Main Avenue**                       |   |        |
|-------------------------------------------|--------|-------------|
| **Fargo, ND**                             |   | **58124**   |
| (Address  of principal executive offices) |   | (Zip  Code) |

 

 

| **(701) 298-5600**                                         |
|------------------------------------------------------------|
| (Registrant’s  telephone number, including area code) |

 

 

 

Indicateby check mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days: YES  ý  NO  o

 

AtNovember 8, 2001, 40,201,280 shares of Common Stock were outstanding.

 

 

 

COMMUNITYFIRST BANKSHARES, INC.

 

FORM 10-Q

 

QUARTER ENDED SEPTEMBER30, 2001

 

INDEX

 

 

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

 

COMMUNITYFIRST BANKSHARES, INC.

CONDENSED CONSOLIDATEDSTATEMENTS OF FINANCIAL CONDITION

 
| **(Dollars in thousands, except per share data)**                                                                                |    | **September  30,** |      | **December  31,** |                 |
|----------------------------------------------------------------------------------------------------------------------------------|---------|--------------------|-----------|-------------------|----------------------|
| **(Unaudited)**                                                                                                                  |    | **2001**           |      | **2000**          |                 |
| ASSETS                                                                                                                           |    |               |      |              |                 |
| Cash and due from banks                                                                                                          |    | $                  | 225,409   |              | $                    | 256,136 |   |
| Federal  funds sold and securities purchased under agreements to resell                                                          | -       |               | -         |              |
| Interest-bearing deposits                                                                                                        |    | 3,441              |      | 1,110             |                 |
| Available-for-sale securities                                                                                                    |    | 1,340,389          |      | 1,714,510         |                 |
| Held-to-maturity  securities (fair value:9/30/01 - $75,861, 12/31/00 - $73,222)                                                  | 75,861  |               | 73,222    |              |
| Loans                                                                                                                            |    | 3,808,267          |      | 3,738,202         |                 |
| Less: Allowance for loan losses                                                                                                  |    | (54,820            | )         | (52,168           | )                    |
| Net loans                                                                                                                        |    | 3,753,447          |      | 3,686,034         |                 |
| Bank premises and equipment, net                                                                                                 |    | 125,636            |      | 121,675           |                 |
| Accrued interest receivable                                                                                                      |    | 48,340             |      | 52,494            |                 |
| Intangible assets                                                                                                                |    | 99,914             |      | 114,971           |                 |
| Other assets                                                                                                                     |    | 58,871             |      | 69,577            |                 |
| Total assets                                                                                                                     |    | $                  | 5,731,308 |              | $                    | 6,089,729 |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                        |    |               |      |              |                 |
| Deposits:                                                                                                                        |    |               |      |              |                 |
| Noninterest-bearing                                                                                                              |    | $                  | 491,502   |              | $                    | 500,834 |   |
| Interest-bearing:                                                                                                                |    |               |      |              |                 |
| Savings and NOW accounts                                                                                                         |    | 2,254,908          |      | 2,349,606         |                 |
| Time accounts over $100,000                                                                                                      |    | 746,970            |      | 672,968           |                 |
| Other  time accounts                                                                                                             |    | 1,261,997          |      | 1,496,483         |                 |
| Total deposits                                                                                                                   |    | 4,755,377          |      | 5,019,891         |                 |
| Federal  funds purchased and securities sold under agreements to repurchase                                                      | 256,926 |               | 205,758   |              |
| Other short-term borrowings                                                                                                      |    | 31,672             |      | 203,952           |                 |
| Long-term debt                                                                                                                   |    | 139,988            |      | 123,957           |                 |
| Accrued interest payable                                                                                                         |    | 35,709             |      | 45,489            |                 |
| Other liabilities                                                                                                                |    | 33,506             |      | 25,251            |                 |
| Total liabilities                                                                                                                |    | 5,253,178          |      | 5,624,298         |                 |
| Company-obligated  mandatorily redeemable preferred securities of CFB Capital I & II                                         |    | 120,000            |      | 120,000           |                 |
| Shareholders' equity:                                                                                                            |    |               |      |              |                 |
| Common  stock, par value $.01 per share:  Authorized Shares – 80,000,000  Issued Shares – 51,021,896                   |    | 510                |      | 510               |       |
| Capital surplus                                                                                                                  |    | 192,476            |      | 192,368           |                 |
| Retained earnings                                                                                                                |    | 336,929            |      | 315,091           |                 |
| Unrealized  gain (loss) on available-for-sale securities, net of tax                                                             |    | 15,364             |      | (9,486            | )                    |
| Less  cost of common stock in treasury -  September 30, 2001 – 10,740,937 shares  December 31, 2000 – 9,155,144 shares |    | (187,149           | )         | (153,052          | )                    |
| Total shareholders' equity                                                                                                       |    | 358,130            |      | 345,431           |                 |
| Total liabilities and shareholders'  equity                                                                                      |    | $                  | 5,731,308 |              | $                    | 6,089,729 |   |

 

Seeaccompanying notes.

 

 

COMMUNITYFIRST BANKSHARES, INC.

CONDENSEDCONSOLIDATED STATEMENTS OF INCOME

 

 

 
|                                                                                 |   | **For  the Three Months Ended** |   | **For  the Nine Months Ended** |   |
|--------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------------------------------|--------|
| **(Dollars in thousands, except per share data)**                                    |   | **September  30,**              |   | **September  30,**             |   |
| **(Unaudited)**                                                                      |   | **2001**                        |   | **2000**                       |   | **2001** |   | **2000** |   |
| Interest income:                                                                     |   |                            |   |                           |   |   |   |   |   |
| Loans                                                                                |   | $                               | 84,542 |                           | $      | 90,276 |   | $ | 258,592 |   | $ | 263,548 |   |
| Investment securities                                                                |   | 22,761                          |   | 30,557                         |   | 75,568 |   | 94,608 |   |
| Interest-bearing deposits                                                            |   | 39                              |   | 43                             |   | 178 |   | 163 |   |
| Federal funds sold and resale  agreements                                            |   | 29                              |   | 79                             |   | 83 |   | 258 |   |
| Total interest income                                                                |   | 107,371                         |   | 120,955                        |   | 334,421 |   | 358,577 |   |
| Interest expense:                                                                    |   |                            |   |                           |   |   |   |   |   |
| Deposits                                                                             |   | 32,388                          |   | 45,072                         |   | 111,795 |   | 123,814 |   |
| Short-term and other borrowings                                                      |   | 3,319                           |   | 7,965                          |   | 13,303 |   | 28,161 |   |
| Long-term debt                                                                       |   | 2,257                           |   | 1,805                          |   | 6,539 |   | 4,673 |   |
| Total interest expense                                                               |   | 37,964                          |   | 54,842                         |   | 131,637 |   | 156,648 |   |
| Net interest income                                                                  |   | 69,407                          |   | 66,113                         |   | 202,784 |   | 201,929 |   |
| Provision for loan losses                                                            |   | 5,301                           |   | 2,976                          |   | 14,221 |   | 11,777 |   |
| Net interest income after provision for  loan losses                                 |   | 64,106                          |   | 63,137                         |   | 188,563 |   | 190,152 |   |
| Noninterest income:                                                                  |   |                            |   |                           |   |   |   |   |   |
| Service charges on deposit accounts                                                  |   | 9,626                           |   | 9,898                          |   | 29,217 |   | 29,570 |   |
| Insurance commissions                                                                |   | 3,489                           |   | 3,030                          |   | 9,467 |   | 7,967 |   |
| Fees from fiduciary activities                                                       |   | 1,337                           |   | 1,404                          |   | 4,262 |   | 4,373 |   |
| Security sales commissions                                                           |   | 1,456                           |   | 1,402                          |   | 4,617 |   | 5,684 |   |
| Net gain on sales of available-for-sale  securities                                  |   | 19                              |   | (87                            | )      | 251 |   | 61 |   |
| Other                                                                                |   | 3,627                           |   | 3,513                          |   | 9,829 |   | 8,960 |   |
| Total noninterest income                                                             |   | 19,554                          |   | 19,160                         |   | 57,643 |   | 56,615 |   |
| Noninterest expense:                                                                 |   |                            |   |                           |   |   |   |   |   |
| Salaries and employee benefits                                                       |   | 28,687                          |   | 27,889                         |   | 86,314 |   | 82,863 |   |
| Net occupancy                                                                        |   | 7,889                           |   | 7,909                          |   | 23,638 |   | 24,064 |   |
| FDIC insurance                                                                       |   | 226                             |   | 248                            |   | 702 |   | 793 |   |
| Legal and accounting                                                                 |   | 945                             |   | 886                            |   | 2,865 |   | 2,674 |   |
| Other professional service                                                           |   | 891                             |   | 1,028                          |   | 3,304 |   | 3,151 |   |
| Restructuring charge                                                                 |   | -                               |   | -                              |   | 7,656 |   | - |   |
| Data processing                                                                      |   | 1,033                           |   | 1,173                          |   | 2,985 |   | 3,548 |   |
| Other  real estate and repossessed personal property                                 |   | 161                             |   | 351                            |   | 532 |   | 912 |   |
| Company-obligated  mandatorily redeemable preferred securities of CFB Cap I & II |   | 2,561                           |   | 2,561                          |   | 7,712 |   | 7,684 |   |
| Amortization of intangibles                                                          |   | 2,374                           |   | 2,623                          |   | 7,493 |   | 7,860 |   |
| Other                                                                                |   | 10,948                          |   | 10,763                         |   | 32,541 |   | 31,098 |   |
| Total noninterest expense                                                            |   | 55,715                          |   | 55,431                         |   | 175,742 |   | 164,647 |   |
|                                                                                 |   |                            |   |                           |   |   |   |   |   |
| Income before income taxes                                                           |   | 27,945                          |   | 26,866                         |   | 70,464 |   | 82,120 |   |
| Provision for income taxes                                                           |   | 9,505                           |   | 9,115                          |   | 24,063 |   | 27,445 |   |
| Net income                                                                           |   | $                               | 18,440 |                           | $      | 17,751 |   | $ | 46,401 |   | $ | 54,675 |   |
| Earnings  per common and common equivalent share:                                    |   |                            |   |                           |   |   |   |   |   |
| Basic net income                                                                     |   | $                               | 0.45   |                           | $      | 0.40 |   | $ | 1.13 |   | $ | 1.15 |   |
| Diluted net income                                                                   |   | $                               | 0.45   |                           | $      | 0.40 |   | $ | 1.11 |   | $ | 1.14 |   |
|                                                                                 |   |                            |   |                           |   |   |   |   |   |
| Average  common and common equivalent shares     outstanding:    |   |                            |   |                           |   |   |   |   |   |
| Basic                                                                                |   | 40,697,521                      |   | 44,399,867                     |   | 41,135,096 |   | 47,579,372 |   |
| Diluted                                                                              |   | 41,359,956                      |   | 44,810,942                     |   | 41,660,439 |   | 47,924,245 |   |
|                                                                                 |   |                            |   |                           |   |   |   |   |   |
| Dividends paid                                                                       |   | $                               | 0.18   |                           | $      | 0.15 |   | $ | 0.50 |   | $ | 0.45 |   |
|                                                                                      |        |                                 |        |                                |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

STATEMENTSOF COMPREHENSIVE INCOME

 

 

 
|                                                                         |   | **For  the Three Months Ended** |   | **For  the Nine Months Ended** |   |
|------------------------------------------------------------------------------|--------|---------------------------------|--------|--------------------------------|--------|
|                                                                         |   | **September  30,**              |   | **September  30,**             |   |
| **(Dollars in thousands, except per share data)**                            |   |                            |   |                           |   |   |   |   |   |
| **(Unaudited)**                                                              |   | **2001**                        |   | **2000**                       |   | **2001** |   | **2000** |   |
|                                                                         |   |                            |   |                           |   |   |   |   |   |
| Net income                                                                   |   | $                               | 18,440 |                           | $      | 17,751 |   | $ | 46,401 |   | $ | 54,675 |   |
| Other comprehensive income, net of tax:                                      |   |                            |   |                           |   |   |   |   |   |
| Unrealized  gains (losses) on securities:                                    |   |                            |   |                           |   |   |   |   |   |
| Unrealized  holding gains (losses) arising during period                     |   | 11,762                          |   | 14,729                         |   | 25,001 |   | (11,799 | ) |
| Less:  Reclassification adjustment for gains (losses) included in net income |   | (11                             | )      | 52                             |   | (151 | ) | (37 | ) |
| Other comprehensive income                                                   |   | 11,751                          |   | 14,781                         |   | 24,850 |   | (11,836 | ) |
| Comprehensive income                                                         |   | $                               | 30,191 |                           | $      | 32,532 |   | $ | 71,251 |   | $ | 42,839 |   |

 

COMMUNITYFIRST BANKSHARES, INC.

CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS

 
|                                                                               |   | **For  the Nine Months Ended** |    |
|------------------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                               |   | **September 30,**              |    |
| **(In  thousands)**                                                                |   |                           |    |   |   |
| **(Unaudited)**                                                                    |   | **2001**                       |    | **2000** |   |
| **Cash flows from operating activities:**                                          |   |                           |    |   |   |
| Net income                                                                         |   | $                              | 46,401  |   | $ | 54,675 |   |
| Adjustments  to reconcile net income to net cash provided by operating activities: |   |                           |    |   |   |
| Provision for loan losses                                                          |   | 14,221                         |    | 11,777 |   |
| Depreciation                                                                       |   | 10,100                         |    | 10,823 |   |
| Amortization of intangibles                                                        |   | 7,493                          |    | 7,860 |   |
| Net  amortization of (discounts) premiums on securities                            |   | (455                           | )       | 148 |   |
| Decrease (increase in interest  receivable)                                        |   | 4,154                          |    | (6,054 | ) |
| (Decrease) increase in interest payable                                            |   | (9,780                         | )       | 8,503 |   |
| Other - net                                                                        |   | 10,227                         |    | (5,876 | ) |
| Net cash provided by operating activities                                          |   | 82,361                         |    | 81,856 |   |
|                                                                               |   |                           |    |   |   |
| **Cash flows from investing activities:**                                          |   |                           |    |   |   |
| Net (increase) decrease in  interest-bearing deposits                              |   | (2,331                         | )       | 3,405 |   |
| Purchases of available-for-sale  securities                                        |   | (273,106                       | )       | (124,195 | ) |
| Maturities of available-for-sale  securities                                       |   | 657,923                        |    | 208,038 |   |
| Sales of available-for-sale securities,  net of gains                              |   | 30,907                         |    | 116,991 |   |
| Purchases of held-to-maturity  securities                                          |   | (2,639                         | )       | (2,567 | ) |
| Maturities of held-to-maturity  securities                                         |   | -                              |    | 4,458 |   |
| Net increase in loans                                                              |   | (81,634                        | )       | (35,630 | ) |
| Net increase in bank premises and  equipment                                       |   | (14,061                        | )       | (5,376 | ) |
| Net cash provided by investing  activities                                         |   | 315,059                        |    | 165,124 |   |
|                                                                               |   |                           |    |   |   |
| **Cash flows from financing activities:**                                          |   |                           |    |   |   |
| Net  decrease in demand deposits, NOW accounts and savings accounts                |   | (104,030                       | )       | (89,268 | ) |
| Net (decrease) increase in time  accounts                                          |   | (160,484                       | )       | 210,319 |   |
| Net decrease in short-term & other  borrowings                                 |   | (121,112                       | )       | (284,839 | ) |
| Net increase in long-term debt                                                     |   | 16,031                         |    | 23,800 |   |
| Purchase of common stock held in  treasury                                         |   | (40,523                        | )       | (124,311 | ) |
| Sale of common stock held in treasury                                              |   | 2,514                          |    | 3,894 |   |
| Common stock dividends paid                                                        |   | (20,543                        | )       | (21,282 | ) |
| Net cash used in financing activities                                              |   | (428,147                       | )       | (281,687 | ) |
| Net decrease in cash and cash  equivalents                                         |   | (30,727                        | )       | (34,707 | ) |
| Cash and cash equivalents at beginning  of period                                  |   | 256,136                        |    | 251,826 |   |
| Cash and cash equivalents at end of  period                                        |   | $                              | 225,409 |   | $ | 217,119 |   |

 

COMMUNITYFIRST BANKSHARES, INC.

 

NOTESTO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

SEPTEMBER30, 2001

 

**Note A- BASIS OF PRESENTATION**

 

Theaccompanying unaudited condensed consolidated financial statements, whichinclude the accounts of Community First Bankshares, Inc. (the 'Company'), itswholly-owned data processing, credit origination, and properties subsidiaries,and its wholly-owned subsidiary bank, including its insurance agencysubsidiary, have been prepared in accordance with accounting principlesgenerally accepted in the United States for interim financial information.  Accordingly, they do not include all of theinformation and footnotes required by accounting principles generally acceptedin the United States for complete financial statements.  In the opinion of management, alladjustments considered necessary for fair presentation have been included.

 

**EarningsPer Common Share**

 

Basicearnings per common share is calculated by dividing net income by the weightedaverage number of shares of common stock outstanding.

 

Diluted earnings percommon share is calculated by dividing net income by the weighted averagenumber of shares of common stock outstanding, wherein the weighted averagenumber of shares of common stock outstanding is increased by the number ofshares of common stock that would be issued assuming the exercise of stockoptions and warrants during each period. Such adjustments to the weighted average number of shares of commonstock outstanding are made only when such adjustments dilute earnings pershare.

 

**Note B – RESTRUCTURING CHARGE**

 

OnMarch 22, 2001, the Company announced a restructuring charge related to aseries of strategic initiatives designed in part to improve customer serviceand strengthen the Company’s position as a provider of diversified financialservices. The Company has designated each of its offices as either a RegionalFinancial Center or a Community Financial Center.  Regional Financial Centers are those locations exhibiting strongcommercial banking potential, while Community Financial Centers offer greaterretail opportunities.  As a consequenceof the new delivery structure, the Company entered into sales agreements tosell 12 offices and close an additional nine offices, resulting in a one-timeafter-tax charge against earnings of $5.1 million, or approximately $0.12 pershare, on a diluted basis.   Therestructuring charge included approximately $3.1 million related to assetwrite-downs, data processing, and legal and accounting fees.  Additionally the Company recorded anafter-tax expense of approximately $2.0 million to provide for severance relatedcosts associated with the early-out and reduction-in-force programs.

 

Duringthe first quarter of 2001, the Company completed the consolidation of allbanking offices into one nationally chartered institution and announced theimplementation of a centralized consumer credit process.

 

**Note C – BUSINESS COMBINATIONSAND DIVESTITURES**

 

OnJune 22, 2001, the Company completed the sale of eight Arizona branches to TheStockmen’s Bank, Kingman, Arizona.  Thebranches, located in Ajo, Bagdad, Duncan, Gila Bend, Morenci, Patagonia,Sacaton and Yarnell, Arizona, had assets of approximately $98 million.

 

OnJuly 20, 2001, the Company completed the sale of three Nebraska branches toSecurity First Bank, Sidney, Nebraska. The branches, located in Cody, Merrimanand Thedford, Nebraska, had assets of approximately $19 million.

On July 20, 2001, theCompany completed the closure of six offices, including two offices inColorado, two offices in Wyoming and one each in Minnesota and NorthDakota.  Two of the offices closed arein communities where the Company maintains other offices, thus the Company willcontinue to serve those communities. The closures are part of the Company’s strategic initiative announcedduring the first quarter of 2001.

 

OnAugust 17, 2001, the Company completed the sale of its Hankinson, North Dakotabranch to Lincoln State Bank, Hankinson, North Dakota.  The branch had assets of approximately $4million.

 

OnSeptember 5, 2001, the Company, through its subsidiary bank and Wells Fargo& Company, announced the formation of a joint venture mortgage companycalled Community First Mortgage, LLC. This joint venture mortgage company will provide mortgage origination,documentation, processing and support for all of the residential mortgagebusiness of Community First Bankshares. The Company will record its interest in the joint venture using theequity method of accounting.  TheCompany expects the new mortgage company to be operational during the fourthquarter of 2001.

 

OnSeptember 14, 2001, the Company completed the closure of one office in NorthDakota.

 

**Note D – SUBSEQUENT EVENTS**

 

OnOctober 19, 2001, the Company completed the closure of one office in Arizona,which is in close proximity to other communities where the Company maintainsother offices, thus the Company will continue to serve that community.

 

OnNovember 5, 2001, the Company announced an agreement to sell its Phoenix,Arizona branch to Community Bank of Arizona. The branch has assets of approximately $18 million.  The transition is subject to regulatoryapproval and is expected to close in the first quarter of 2002.

 

**Note E – ACCOUNTING CHANGES**

 

EffectiveJanuary 1, 2001, the Company adopted SFAS 133, “Accounting for DerivativeInstruments and Hedging Activities,” which establishes accounting and reportingstandards for derivative instruments, including certain derivative instrumentsembedded in other contracts, and for hedging activities.  It requires that an entity recognize allderivatives as either assets or liabilities in the statement of financialposition and measure those instruments at fair value.  In certain defined conditions, a derivative may be specificallydesignated as a hedge for a particular exposure.  The accounting for changes in fair value of the derivativedepends on the intended use of the derivative and the resultingdesignation.  As of September 30, 2001and December 31, 2000, the Company had no derivative instruments outstanding.

 

InJune 2001, the Financial Accounting Standards Board issued Statements ofFinancial Accounting Standards No. 141, *Business Combinations*, and No. 142, *Goodwill andOther Intangible Assets*, effective for fiscal years beginning afterDecember 15, 2001.  Under the new rules,goodwill will no longer be amortized but will be subject to annual impairmenttests in accordance with the Statements. Other intangible assets will continue to be amortized over their usefullives.  The Company will apply the newrules on accounting for goodwill and other intangible assets beginning in thefirst quarter of 2002.  Application ofthe nonamortization provisions of the Statement is expected to result in anincrease in net income of $5.0 million, or $0.12 per share, per year.  During 2002, the Company will perform thefirst of the required impairment tests of goodwill and indefinite livedintangible assets as of January 1, 2002 and has not yet determined what theeffect of these will be on the earnings and financial position of the Company.

 

**Note F– INVESTMENTS**

 

Thefollowing is a summary of available-for-sale and held-to-maturity securities atSeptember 30, 2001 (in thousands):

 
|                                |   | **Available-for-Sale  Securities** |      |
|-------------------------------------|--------|------------------------------------|-----------|
|                                |   |                               |      | **Gross** |   | **Gross** |   | **Estimated** |   |
|                                |   | **Amortized**                      |      | **Unrealized** |   | **Unrealized** |   | **Fair** |   |
|                                |   | **Cost**                           |      | **Gains** |   | **Losses** |   | **Value** |   |
| United States Treasury              |   | $                                  | 67,957    |   | $ | 2,808 |   | $ | - |   | $ | 70,765 |   |
| United States Government agencies   |   | 210,636                            |      | 5,917 |   | 4 |   | 216,549 |   |
| Mortgage-backed securities          |   | 835,180                            |      | 23,827 |   | 73 |   | 858,934 |   |
| Collateralized mortgage obligations |   | 4,421                              |      | 121 |   | - |   | 4,542 |   |
| State and political securities      |   | 101,805                            |      | 1,935 |   | 452 |   | 103,288 |   |
| Other securities                    |   | 94,953                             |      | 952 |   | 9,594 |   | 86,311 |   |
|                                |   | $                                  | 1,314,952 |   | $ | 35,560 |   | $ | 10,123 |   | $ | 1,340,389 |   |

 

 
|             |   | **Held-to-Maturity Securities** |   |
|------------------|--------|---------------------------------|--------|
|             |   | **Gross**                       |   | **Gross** |   | **Estimated** |   |   |   |
|             |   | ** Amortized**             |   | **Unrealized** |   | **Unrealized** |   | **Fair** |   |
|             |   | **Cost**                        |   | **Gains** |   | **Losses** |   | **Value** |   |
| Other securities |   | $                               | 75,861 |   | $ | - |   | $ | - |   | $ | 75,861 |   |
|             |   | $                               | 75,861 |   | $ | - |   | $ | - |   | $ | 75,861 |   |

 

Proceedsfrom the sale of available-for-sale securities during the nine months endedSeptember 30, 2001 and 2000 were $31,158,000 and $117,052,000,respectively.  Gross gains of $535,000and $555,000 were realized on sales during 2001 and 2000, respectively.  Gross losses of $284,000 and $494,000 wererealized on sales during 2001 and 2000, respectively.  Gains and losses on disposition of these securities were computedusing the specific identification method.

 

**Note G- LOANS**

 

Thecomposition of the loan portfolio at September 30, 2001 was as follows (inthousands):

 

| Real estate                    |   | $         | 1,526,123 |   |
|--------------------------------|--------|-----------|-----------|--------|
| Real estate  construction      |   | 532,730   |      |
| Commercial                     |   | 833,700   |      |
| Consumer and other             |   | 668,973   |      |
| Agriculture                    |   | 246,741   |      |
|                           |   | 3,808,267 |      |
| Less allowance for loan losses |   | (54,820   | )         |
| Net loans                      |   | $         | 3,753,447 |   |

 

**Note H- FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK**

 

Inthe normal course of business, the Company is party to financial instrumentswith off-balance sheet risk to meet the financing needs of its customers and tomanage its interest rate risk.  Thesefinancial instruments include commitments to extend credit and letters ofcredit.  The contract or notionalamounts of these financial instruments at September 30, 2001 were as follows(in thousands):

 
| Commitments to extend credit |   | $      | 727,690 |   |
|------------------------------|--------|--------|---------|--------|
| Letters of credit            |   | 30,738 |    |

 

**Note I- SUBORDINATED NOTES**

 

Long-termdebt at September 30, 2001 included $60 million of 7.30% Subordinated Notesissued in June 1997.  These notes aredue September 30, 2004, with interest payable semi-annually.  At September 30, 2001, $24 million qualifiedas Tier 2 capital. At September 30, 2001, the subsidiary bank had a $25 millionunsecured subordinated term note payable, maturing on December 22, 2007.  The subsidiary bank note bears an interestrate of LIBOR, plus 140 basis points.

 

**Note J- INCOME TAXES**

 

Thereconciliation between the provision for income taxes and the amount computedby applying the statutory federal income tax rate was as follows (inthousands):

 
|                                          |   | **For the nine months ended,** |   |
|-----------------------------------------------|--------|--------------------------------|--------|
|                                          |   | **September 30, 2001**         |   |
| 35% of pretax income                          |   | $                              | 24,663 |   |
| State income tax, net of federal tax  benefit |   | 1,435                          |   |
| Tax-exempt interest                           |   | (3,074                         | )      |
| Amortization of goodwill                      |   | 689                            |   |
| Other                                         |   | 350                            |   |
| Provision for income taxes                    |   | $                              | 24,063 |   |

 

**Note K- SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS**

 
| **Nine months ended September 30 (in thousands)** |   | **2001** |   | **2000** |   |
|---------------------------------------------------|--------|----------|--------|----------|--------|
| Unrealized gain on available-for-sale  securities |   | $        | 41,148 |     | $      | 18,013 |   |
|                                                   |        |          |        |          |        |  |  |

 

**Item 2.  Management’sDiscussion and Analysis of Financial Condition and Results of Operations**

 

**Basisof Presentation**

 

Thefollowing is a discussion of the Company’s financial condition as of September30, 2001 and December 31, 2000, and its results of operations for the threemonth and nine month periods ended September 30, 2001 and 2000.

 

Certaininformation in this section contains forward-looking statements under thePrivate Securities Litigation Reform Act of 1995 that are subject to certainrisks and uncertainties that could cause actual results to differ materiallyfrom historical earnings and those presently anticipated or projected.  The Company wishes to caution readers not toplace undue reliance on any such as forward-looking statements, which speakonly as of the date made.  Factors thatcould cause actual results to differ from the results discussed in theforward-looking statements include, but are not limited to; risk of loans andinvestments, including dependence on local economic conditions; competition forthe Company’s customers from other providers of financial services; possibleadverse effects of changes in the interest rates; balance sheet and criticalratio risks related to the share repurchase program, and other risks detailedin the Company’s filings with the Securities and Exchange Commission, all ofwhich are difficult to predict and many of which are beyond the control of theCompany.  For a detailed discussion ofthese factors see the section entitled “Forward Looking Statements” in theCompany’s Form 10-K for the year ended December 31, 2000.

 

**StrategicInitiatives**

 

OnMarch 22, 2001 the Company announced a series of strategic initiatives designedto improve customer service and strengthen its position as a provider ofdiversified financial services.  Initiatives included a redefinition of the Company’s delivery model andthe sale or closure of banking offices.

 

Inan effort to properly align resources with market opportunities and provide thedelivery support structure to optimize individual market potential, each of theCompany’s offices was redefined as either a Regional Financial Center or aCommunity Financial Center.  RegionalFinancial Centers are those locations that exhibit strong commercial bankingpotential, and require a broader based support structure.  Community Financial Centers, which are lessgeographically concentrated, typically offer greater retail opportunities,including emphasis on insurance and investment product sales.

 

Inconjunction with the restructuring of the banking network, the Companyannounced agreements to sell 12 offices and close nine additional offices.  Offices to be sold included eight Arizonaoffices, three Nebraska offices and one North Dakota office.  The sale of the Arizona offices was completedon June 22, 2001, the sale of the three Nebraska offices was completed on July20, 2001; and the sale of the North Dakota office was completed on August 17,2001.  Six of the nine offices slatedfor closure were closed on July 20, 2001, and one office was closed onSeptember 14, 2001.  Four of the nineoffices slated for closure are located in communities in which the Companymaintains additional offices, thus continuing to serve those customers fromexisting locations.

 

Inpreparation for the sale of the eight Arizona offices, the Company charged offits largest non-performing asset, a credit facility that was in the Arizonabank at the time the Arizona bank was acquired by the Company.  To maintain the current loan loss reservelevel, the Company recorded a special loan loss provision equal to the amountof the charge-off.  The specialprovision of $2.4 million, or approximately $0.04 per share after tax, wasrecorded during the first quarter.

 

Theannounced initiatives resulted in changes in staffing needs within theCompany.  To accommodate these, theCompany made available an early-out program that was accepted by 21 eligiblemanagement personnel.

 

Asa result of these initiatives, the Company recorded a one-time after-taxrestructuring charge totaling $5.1 million. The charge was recorded during the first quarter and representsapproximately $0.12 per share.

 

Underthe redesigned delivery structure, the Company will implement a centralizedconsumer credit process. Once fully operational, the central structure willoffer a complete range of decision, origination, documentation and collectionservices to all Company offices through a Fargo, North Dakota location.

 

Duringthe first quarter, the Company completed the consolidation of its South Dakotastate chartered bank into its national chartered bank.  As a result of the consolidation, allbanking operations are conducted under a single national charter.

 

**Overview**

 

Forthe three months ended September 30, 2001, net income was $18.4 million, anincrease of $689,000 or 3.9% from the $17.8 million during the 2000period.  Basic earnings per common sharefor the three months ended September 30, 2001 were $0.45, compared to $0.40 inthe same period in 2000.  Dilutedearnings per share for the three months ended September 30, 2001 were $0.45.

Returnon average assets and return on common equity for the three months endedSeptember 30, 2001 were 1.26% and 20.89%, respectively, as compared to the 2000ratios of 1.14% and 21.03%.  Theincrease in return on assets is principally due to a reduction in averageassets, as a result of the Company’s efforts to restructure its balance sheet,reduced reliance on wholesale funding and the repurchase of its commonshares.  The return on average commonequity was relatively unchanged, as average common equity increased due to thecombined effect of increased retained earnings, and the positive impact of anincrease in the market value of available for sale securities offset by theimpact of common share repurchases.

 

Forthe nine months ended September 30, 2001, net income was $46.4 million, adecrease of $8.3 million or 15.1% from the $54.7 million during the 2000period.  Basic earnings per common sharefor the nine months ended September 30, 2001 were $1.13, compared to $1.15 inthe same period in 2000.  Dilutedearnings per share for the nine months ended September 30, 2001 were$1.11.  The decrease is principally dueto a one-time after-tax charge of $5.1 million, or 12 cents per share, toaccount for the financial impact of a restructuring charge recorded in thefirst quarter of 2001 and the write-off of the Company’s largest non-performingloan and recognition of a special loan loss provision equal to the amount ofthe write-off of $1.5 million after-tax, or 4 cents per share.  Excluding the one-time charge and thespecial loan loss provision, diluted earnings per share would have been $1.27per share for the nine months ended September 30, 2001.

 

Returnon average assets and return on common equity for the nine months endedSeptember 30, 2001 were 1.05% and 17.91%, respectively, as compared to the 2000ratios of 1.17% and 19.60%.  Thedecrease in return on assets and return on equity is principally due to areduction in net income, resulting from the restructuring charge and specialloan loss provision. Return on average assets and return on average commonequity, exclusive of the one-time charge and the special loan loss provisionrecorded in the first quarter of 2001, would have been 1.20% and 20.45%,respectively for the nine months ended September 30, 2001.

 

**Resultsof Operations**

 

**NetInterest Income**

 

Netinterest income for the three months ended September 30, 2001 was $71.5million, on a tax-equivalent basis, an increase of $3.2 million, or 4.7%, fromthe net interest income of $68.3 million earned during the 2000 period. Theincrease was principally due to the combination of a $13.7 million reduction ininterest income and a $16.9 million reduction in interest expense resultingfrom a $382 million reduction in average assets, coupled with a 50 basis pointincrease in net interest margin.  Thenet interest margin of 5.35% for the period ended September 30, 2001 was upfrom 4.85% for the 2000 period.  Theimprovement in net interest margin is the result of the Company’s balance sheetrestructuring and reduction in wholesale funding.

 

Netinterest income for the nine months ended September 30, 2001 was $209.0million, on a tax-equivalent basis, an increase of $560,000, or .3%, from thenet interest income of $208.4 million earned during the 2000 period. Theincrease was principally due to the combination of a $24.5 million reduction ininterest income and a $25.0 million decrease in interest expense resulting froma $320 million reduction in average assets, coupled with a 26 basis pointincrease in net interest margin.  Thenet interest margin of 5.18% for the period ended September 30, 2001 was upfrom 4.92% for the 2000 period.

 

**Provisionfor Loan Losses**

 

Theprovision for loan losses for the three months ended September 30, 2001 was$5.3 million, an increase of $2.3 million, or 78.1%, from the $3.0 millionprovision during the 2000 period. The increase is principally due to theCompany’s objective of maintaining adequate reserve levels, which appropriatelyreflect the asset quality of the portfolio, and the economic environment withinwhich the Company operates.

 

Theprovision for loan losses for the nine months ended September 30, 2001 was$14.2 million, an increase of $2.4 million, or 20.3%, from the $11.8 millionprovision during the 2000 period. During the first quarter of 2001 the Company recorded a $2.4 millionspecial loan loss provision to reflect the charge-off of the Company’s largestnon-performing asset, an Arizona based credit facility that was in place whenthe Company acquired its initial Arizona operation in 1997.

 

**NoninterestIncome**

 

Noninterestincome for the three months ended September 30, 2001 was $19.6 million, anincrease of $394,000, or 2.1%, from the 2000 level of $19.2 million. Theincrease was principally due to a $459,000 or 15.1% increase in insurancecommissions, from the prior period.

 

Noninterestincome for the nine months ended September 30, 2001 was $57.6 million, anincrease of $1.0 million, or 1.8%, from the 2000 level of $56.6 million. The increasewas principally due to a $1.5 million, 18.8% increase in insurance commissionswhich was offset by an $1.1 million decrease in investment salescommissions.  The decrease in investmentsales commissions is due principally to the downturn in stock markets.

 

#### **Noninterest Expense**

 

Noninterestexpense for the three months ended September 30, 2001 was $55.7 million, aslight increase of $284,000, or 0.5%, from the level of $55.4 million duringthe 2000 period.

 

Noninterestexpense for the nine months ended September 30, 2001 was $175.7 million, anincrease of $11.1 million, or 6.7%, from the level of $164.6 million during the2000 period. The increase was principally due to the $7.7 million one-timerestructuring charge recorded in the first quarter of 2001.  During the first quarter of 2001, theCompany also recorded a $462,000 early payment penalty, when it elected to payoff various Federal Home Loan Bank borrowings, which carried higher than marketinterest rates.

 

#### **Provision for IncomeTaxes**

 

Theprovision for income taxes for the three months ended September 30, 2001 was$9.5 million, an increase of $390,000, or 4.3%, from the 2000 level of $9.1million, due primarily to the increase in pre-tax net income.

 

Theprovision for income taxes for the nine months ended September 30, 2001 was$24.1 million, a decrease of $3.3 million, or 12.3%, from the 2000 level of$27.4 million.  The decrease was dueprimarily to the decrease in pre-tax net income as a result of the one-timerestructuring charge, which included the write-off of various non-deductibleintangible assets and the special loan loss provision recorded in the firstquarter of 2001.

 

**FinancialCondition**

 

**Loans**

 

Totalloans were $3.8 billion at September 30, 2001 and $3.7 billion at December 31,2000.  The following table presents theCompany’s balance of each major category of loans (dollars in thousands):

 
|                           |   | **September 30, 2001** |      | **December 31, 2000** |   |
|--------------------------------|--------|------------------------|-----------|-----------------------|--------|
|                           |   |                   |      | **Percent  of**       |   |   |   | **Percent  of** |   |
|                           |   | **Amount**             |      | **Total  Loans**      |   | **Amount** |   | **Total  Loans** |   |
| Loan category:                 |   |                   |      |                  |   |   |   |   |   |
| Real estate                    |   | $                      | 1,526,123 |                  | 40.07  | % | $ | 1,458,494 |   | 39.02 | % |
| Real estate construction       |   | 532,730                |      | 13.99                 | %      | 466,616 |   | 12.48 | % |
| Commercial                     |   | 833,700                |      | 21.89                 | %      | 872,824 |   | 23.35 | % |
| Consumer and other             |   | 668,973                |      | 17.57                 | %      | 686,064 |   | 18.35 | % |
| Agricultural                   |   | 246,741                |      | 6.48                  | %      | 254,204 |   | 6.80 | % |
| Total loans                    |   | 3,808,267              |      | 100.00                | %      | 3,738,202 |   | 100.00 | % |
| Less allowance for loan losses |   | (54,820                | )         |                  |   | (52,168 | ) |   |   |
| Total                          |   | $                      | 3,753,447 |                  |   |   | $ | 3,686,034 |   |   |   |

 

#### **Nonperforming Assets**

 

AtSeptember 30, 2001, nonperforming assets were $25.0 million, a decrease of $1.1million or 4.2% from the $26.1 million level at December 31, 2000. The decreasewas principally due to the charge off a $2.4 million non-performing asset whichhad been in the Company’s loan portfolio since December 1997, when the bankthat originated the asset was acquired. At September 30, 2001, nonperforming loans as a percent of total loanswere .58%, down from the December 31, 2000 level of .63%.  OREO was $2.9 million at September 30, 2001,an increase of $448,000 from $2.4 million at December 31, 2000.

 

Nonperformingassets of the Company are summarized in the following table (dollars inthousands):

 
| **Loans**                                               |   | **September  30, 2001** |      | **December  31, 2000** |   |
|---------------------------------------------------------|--------|-------------------------|-----------|------------------------|--------|
| Nonaccrual loans                                        |   | $                       | 21,887    |                   | $      | 23,426 |   |
| Restructured  loans                                     |   | 257                     |      | 224                    |   |
| Nonperforming loans                                     |   | 22,144                  |      | 23,650                 |   |
| Other real estate  owned                                |   | 2,885                   |      | 2,437                  |   |
| Nonperforming assets                                    |   | $                       | 25,029    |                   | $      | 26,087 |   |
| Loans 90 days or more past due but  still accruing      |   | $                       | 4,001     |                   | $      | 2,482 |   |
| Nonperforming loans as a percentage of  total loans     |   | .58                     | %         | .63                    | %      |
| Nonperforming assets as a percentage of  total assets   |   | .44                     | %         | .43                    | %      |
| Nonperforming assets as a percentage of  loans and OREO |   | .66                     | %         | .70                    | %      |
|                                                    |   |                    |      |                   |   |
| Total Loans                                             |   | $                       | 3,808,267 |                   | $      | 3,738,202 |   |
| Total Assets                                            |   | 5,731,308               |      | 6,089,729              |   |

 

#### **Allowance for Loan Losses**

 

AtSeptember 30, 2001, the allowance for loan losses was $54.8 million, anincrease of $2.8 million from the September 30, 2000 balance of $52.0million.  Net charge-offs during thenine months ended September 30, 2001 were $2.9 million more than those incurredduring the nine months ended September 30, 2000, principally as a result of thecharge-off of the Company’s single largest non-performing asset, a $2.4 millioncredit facility at one of its Arizona offices, a credit facility which wasoutstanding at the time the bank was acquired by the Company in December 1997.

 

AtSeptember 30, 2001, the allowance for loan losses as a percentage of totalloans was 1.44%, an increase from the September 30, 2000 level of 1.40% and theDecember 31, 2000 level of 1.40%.

 

Thefollowing table sets forth the Company’s allowance for loan losses (dollars inthousands):

 
|                                                     |   | **For  the Nine Months ended September 30,** |      |
|----------------------------------------------------------|--------|----------------------------------------------|-----------|
|                                                     |   | **2001**                                     |      | **2000** |   |
| Balance at beginning of period                           |   | $                                            | 52,168    |   | $ | 48,878 |   |
| Charge-offs:                                             |   |                                         |      |   |   |
| Real estate                                              |   | 1,386                                        |      | 1,024 |   |
| Real estate construction                                 |   | 2,480                                        |      | 44 |   |
| Commercial                                               |   | 4,000                                        |      | 4,839 |   |
| Consumer and other                                       |   | 7,002                                        |      | 5,435 |   |
| Agricultural                                             |   | 305                                          |      | 632 |   |
| Total  charge-offs                                       |   | 15,173                                       |      | 11,974 |   |
| Recoveries:                                              |   |                                         |      |   |   |
| Real estate                                              |   | 188                                          |      | 98 |   |
| Real estate construction                                 |   | 4                                            |      | 4 |   |
| Commercial                                               |   | 617                                          |      | 1,041 |   |
| Consumer and other                                       |   | 2,564                                        |      | 1,963 |   |
| Agricultural                                             |   | 231                                          |      | 196 |   |
| Total  recoveries                                        |   | 3,604                                        |      | 3,302 |   |
|                                                     |   |                                         |      |   |   |
| Net charge-offs                                          |   | 11,569                                       |      | 8,672 |   |
| Provision charged to  operations                         |   | 14,221                                       |      | 11,777 |   |
| Balance at end of  period                                |   | $                                            | 54,820    |   | $ | 51,983 |   |
| Allowance as a percentage of total  loans                |   | 1.44                                         | %         | 1.40 | % |
| Annualized net charge-offs to average  loans outstanding |   | 0.41                                         | %         | 0.31 | % |
|                                                     |   |                                         |      |   |   |
| Total Loans                                              |   | $                                            | 3,808,267 |   | $ | 3,717,311 |   |
| Average Loans                                            |   | 3,778,399                                    |      | 3,704,736 |   |

 

#### **Investments**

 

Theinvestment portfolio, including available-for-sale securities andheld-to-maturity securities, was $1.4 billion at September 30, 2001, a decreaseof $371.5 million, or 20.8% from $1.8 billion at December 31, 2000.  At September 30, 2001, the investment portfoliorepresented 24.7% of total assets, compared with 29.4% at December 31,2000.  The reduction in the level of theinvestment portfolio is the result of the Company’s balance sheet restructuringinitiative which seeks to reduce the level of lower yielding assets and highercost wholesale funding.  In addition toinvestment securities, the Company had investments in interest-bearing depositsof $3.4 million at September 30, 2001, an increase of $2.3 million from the$1.1 million at December 31, 2000.

 

**Deposits**

 

Totaldeposits were $4.8 billion at September 30, 2001, a decrease of $264.5 million,or 5.3%, from $5.0 billion at December 31, 2000.  Noninterest-bearing deposits at September 30, 2001 were $492million, a decrease of $9 million, or 1.9%, from $501 million at December 31,2000.  The Company’s core deposits as apercent of total deposits were 84.1% and 84.0% as of September 30, 2001 andDecember 31, 2000, respectively. Interest-bearing deposits were $4.3 billion at September 30, 2001, adecrease of $255 million, or 5.6% from December 31, 2000.

 

**Borrowings**

 

Short-termborrowings of the Company were $31.7 million as of September 30, 2001, adecrease of $172 million, or 84.5%, from $204 million as of December 31,2000.  The reduction in short-term borrowingsis the result of the Company’s balance sheet restructuring initiative whichseeks to reduce the level of wholesale borrowings.

 

Long-termdebt of the Company was $140 million as of September 30, 2001, an increase of$16 million, or 12.9%, from the $124 million as of December 31, 2000.

 

**CapitalManagement**

 

Shareholders’equity increased $12.7 million to $358 million at September 30, 2001 from $345million at December 31, 2000.  AtSeptember 30, 2001, the Company’s Tier 1 capital, total risk-based capital andleverage ratios were 8.29%, 10.81%, and 6.28%, respectively, compared tominimum required levels of 4%, 8% and 3%, respectively (subject to change andthe discretion of regulatory authorities to impose higher standards inindividual cases).  At September 30,2001, the Company had risk-weighted assets of $4.3 billion.

 

#### **Stock Repurchases**

 

OnApril 10, 2000, the Company announced its intention to repurchase up to 5million shares of the Company’s common stock. On August 9, 2000, the Company announced its intention to repurchase upto an additional 5 million shares of the Company’s common stock.  On August 7, 2001, the Company announced itsintention to repurchase up to an additional 3 million shares of the Company’scommon stock. As of November 8, 2001, the Company has repurchased 10,800,000shares of common stock, which includes shares from a prior authorization andthe two 5 million share authorizations in 2000 and the 2001 authorization, atprices ranging from $15.25 to $25.00.

 

**Item 3.  Quantitativeand Qualitative Disclosure About Market Risk**

 

 

Therehave been no material changes in market risk exposures that affect thequantitative and qualitative disclosures presented as of December 31, 2000 inthe Company’s Form 10-K and Annual Report.

 

**PART II - OTHER INFORMATION**

 

 

Item 1.            Legal Proceedings:

 

None.

 

Item 2.            Changes in Securities:

 

None.

 

Item 3.            Defaults upon Senior Securities:

 

None.

 

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

 

None.

 

Item 5.            Other Information:

 

None.

 

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

 

(a)       Exhibits:

 

10.20Agreement of Limited Liability Company of Community First Mortgage, LLC datedJune 15, 2001 between Wells Fargo Ventures, LLC and Community First HomeMortgage, Inc. 

 

(b)       Reports on Form 8-K:

 

 

 

**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

 

 

 
|                    | **COMMUNITY FIRST BANKSHARES,  INC.**  |
|-------------------------|----------------------------------------|
|                    |                                   |
|                    |                                   |
|                    |                                   |
|                    |                                   |
|                    |                                   |
|                    |                                   |
| Date:  November 8, 2001 | /s/  Mark Anderson                     |
|                    | Mark  A. Anderson                      |
|                    | President  and Chief Executive Officer |
|                    |                                   |
|                    |                                   |
|                    |                                   |
|                    |                                   |
|                    |                                   |
|                    |                                   |
|                    |                                   |
| Date:  November 8, 2001 | /s/  Craig A. Weiss                    |
|                    | Craig  A. Weiss                        |
|                    | Chief  Financial Officer               |

 

 

**Exhibit Index**

 

10.20       Agreement of Limited Liability Company ofCommunity First Mortgage, LLC dated June 15, 2001 between Wells Fargo Ventures,LLC and Community First Home Mortgage, Inc.*

 

----

*              Pursuant to Rule 24b-2, certain information has beendeleted from this Exhibit and filed separately with the Commission.