<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q



         [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 1999
                                                 -------------

                                       OR


         [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the transition period from __________ to ________


                         Commission file number 0-19368


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


            Delaware                                  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)

Indicated by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: YES  X  NO
                                              ---     ---
At August 9, 1999, 47,031,763 shares of Common Stock were outstanding.


                                       1

<PAGE>

                        COMMUNITY FIRST BANKSHARES, INC.

                                    FORM 10-Q

                           QUARTER ENDED JUNE 30, 1999

                                      INDEX


<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION:                                                                  PAGE
                                                                                                 ----
<S>                                                                                            <C>
       Item 1.      Condensed Consolidated Financial Statements and Notes..............           3-9

       Item 2.      Management's Discussion and Analysis of Financial
                    Condition and Results of Operations................................         10-16

       Item 3.      Quantitative and Qualitative Disclosure About Market Risk..........            17


PART II - OTHER INFORMATION:

       Item 1.      Legal Proceedings..................................................            18

       Item 2.      Changes in Securities..............................................            18

       Item 3.      Defaults Upon Senior Securities....................................            18

       Item 4.      Submission of Matters to a Vote of Security Holders................            18

       Item 5.      Other Information..................................................            18

       Item 6.      Exhibits and Reports on Form 8-K...................................            18

SIGNATURES          ...................................................................            19
</TABLE>


                                       2

<PAGE>

                     COMMUNITY FIRST BANKSHARES, INC.
         CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                     June 30,          December 31,
(DOLLARS IN THOUSANDS)                                                   1999                  1998
---------------------------------------------------------------------------------------------------
                                                                  (unaudited)
<S>                                                              <C>                   <C>
ASSETS
Cash and due from banks.......................................   $    228,518          $    250,963
Federal funds sold and securities purchased under
    agreements to resell......................................          1,025                   100
Interest-bearing deposits.....................................         11,251                 5,067
Available-for-sale securities.................................      1,994,966             1,980,530
Held-to-maturity securities (fair value: 6/30/99 -
    $71,393, 12/31/98 - $69,906)..............................         71,393                69,906
Loans    .....................................................      3,394,226             3,386,142
     Less: Allowance for loan losses..........................        (46,913)              (50,173)
----------------------------------------------------------------------------------------------------
         Net loans............................................      3,347,313             3,335,969
Bank premises and equipment, net..............................        122,387               123,254
Accrued interest receivable...................................         49,829                51,429
Other Assets..................................................         66,094                52,523
Intangible Assets.............................................        128,711               133,231
---------------------------------------------------------------------------------------------------
         Total assets.........................................   $  6,021,487          $  6,002,972
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
    Noninterest-bearing.......................................   $    790,085          $    547,703
    Interest-bearing..........................................      3,899,477             4,336,969
---------------------------------------------------------------------------------------------------
         Total deposits.......................................      4,689,562             4,884,672
Federal funds purchased and securities sold under
    agreements to repurchase..................................        256,617               143,057
Other short-term borrowings...................................        435,257               292,669
Long-term debt................................................         94,002                93,472
Capital lease obligations.....................................          4,246                 5,238
Accrued interest payable......................................         28,697                26,650
Other liabilities.............................................         10,456                31,968
---------------------------------------------------------------------------------------------------
         Total liabilities....................................      5,518,837             5,477,726

Company-obligated mandatorily redeemable
     preferred securities of CFB Capital I & II...............        120,000               120,000
Shareholders' equity:
    Common stock..............................................            477                   477
    Capital surplus...........................................        172,043               172,043
    Retained earnings.........................................        222,390               244,835
    Less cost of common stock in treasury -
          June 30, 1999 - 619,593 shares
          DECEMBER 31, 1998 - 564,588 shares..................        (12,260)              (12,109)
---------------------------------------------------------------------------------------------------
Total shareholders' equity....................................        382,650               405,246
---------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity....................   $  6,021,487          $  6,002,972
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
</TABLE>


                                       3

<PAGE>

                    COMMUNITY FIRST BANKSHARES, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                                                               For the Three           For the Six
                                                                               Months Ended            Months Ended
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)                               6/30/99     6/30/98     6/30/99      6/30/98
------------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>            <C>        <C>           <C>
Interest income:..............................................         (Unaudited)               (Unaudited)
    Loans.....................................................            $ 78,479     $ 79,439   $ 156,802    $ 154,865
    Investment securities.....................................              32,835       31,250      64,583       58,720
    Interest-bearing deposits.................................                  42          340          71          501
    Federal funds sold and resale agreements..................                  17          976          73        2,061
------------------------------------------------------------------------------------------------------------------------
         Total interest income................................             111,373      112,005     221,529      216,147
Interest expense:
    Deposits..................................................              36,076       41,012      73,001       80,722
    Short-term and other borrowings...........................               6,754        4,364      12,314        6,550
    Long-term debt............................................               1,697        2,150       3,373        4,264
------------------------------------------------------------------------------------------------------------------------
         Total interest expense...............................              44,527       47,526      88,688       91,536
------------------------------------------------------------------------------------------------------------------------
Net interest income...........................................              66,846       64,479     132,841      124,611
Provision for loan losses.....................................               6,238        4,204      10,969        5,956
------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses...........              60,608       60,275     121,872      118,655
------------------------------------------------------------------------------------------------------------------------
Noninterest income:
    Service charges on deposit accounts...........................           8,089        7,536      15,730       14,247
    Fees from fiduciary activities................................           1,326        1,297       2,621        2,521
    Insurance commissions.........................................           2,072        1,856       4,044        3,335
    Net gain(loss) on sales of available-for-sale securities......           1,254          504       1,784          985
    Other.........................................................           5,243        4,830       9,483        9,127
------------------------------------------------------------------------------------------------------------------------
         Total noninterest income:................................          17,984       16,023      33,662       30,215
------------------------------------------------------------------------------------------------------------------------
Noninterest expense:
    Salaries and employee benefits................................          24,953       30,469      50,070       55,076
    Net occupancy.................................................           7,668        8,571      15,154       16,894
    FDIC insurance................................................             126          170         317          346
    Legal and accounting..........................................             677        1,897       1,278        2,484
    Other professional service....................................           1,362        1,558       2,713        2,018
    Data processing...............................................             926        1,598       1,730        2,020
    Acquisitions..................................................               0        1,578           0        1,630
    Company-obligated mandatorily redeemable preferred
         securities of CFB Capital I & II.........................           2,561        2,561       5,122        5,095
    Amortization of intangibles...................................           2,632        2,715       5,253        5,080
    Other.........................................................          10,202       10,926      19,618       20,928
------------------------------------------------------------------------------------------------------------------------
         Total noninterest expense................................          51,107       62,043     101,255      111,571
Income from continuing operations before income taxes.............          27,485       14,255      54,279       37,299
Provision for income taxes........................................           9,032        3,972      18,215       10,249
------------------------------------------------------------------------------------------------------------------------
Income from continuing operations.................................          18,453       10,283      36,064       27,050
Discontinued operations:
    Income from operations of discontinued operations
         (less applicable income taxes)...........................               0       (2,164)          0       (2,232)
    Loss on disposal of discontinued operations, including
         provision for operating losses during phase-out
                period (less applicable taxes)....................               0       (1,676)          0       (1,676)
-------------------------------------------------------------------------------------------------------------------------
Net income........................................................        $ 18,453     $  6,443   $  36,064    $   23,142
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       4

<PAGE>

<TABLE>
<CAPTION>
                                                                               For the Three              For the Six
                                                                                Months Ended             Months Ended
(Dollars in thousands, except per share data)....................          6/30/99      6/30/98       6/30/99      6/30/98
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>          <C>          <C>          <C>
Earnings per common and common equivalent share:
Basic income from continuing operations before
    extraordinary items..........................................            $0.39        $0.22        $0.77        $0.57
Discontinued operations..........................................             0.00        (0.08)        0.00        (0.08)
EXTRAORDINARY ITEM...............................................            $0.00        $0.00         0.00         0.00
-------------------------------------------------------------------------------------------------------------------------
BASIC NET INCOME.................................................            $0.39        $0.14        $0.77        $0.49
-------------------------------------------------------------------------------------------------------------------------
Diluted income from continuing operations before
    extraordinary items..........................................            $0.39        $0.21        $0.76        $0.56
Discontinued operations..........................................             0.00        (0.08)        0.00        (0.08)
EXTRAORDINARY ITEM...............................................            $0.00        $0.00         0.00         0.00
-------------------------------------------------------------------------------------------------------------------------
DILUTED NET INCOME...............................................            $0.39        $0.13        $0.76        $0.48
-------------------------------------------------------------------------------------------------------------------------
Average common shares outstanding:
    Basic........................................................       47,088,447   47,343,247   47,112,503   47,324,012
    Diluted......................................................       47,461,802   47,981,284   47,478,490   48,011,397
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------

Dividend declared per common share...............................            $0.14        $0.11        $0.28         $.22
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------

<CAPTION>

                                         STATEMENTS OF COMPREHENSIVE INCOME

                                                                         For the Three                  For the Six
(Dollars in thousands, except per share data)                             Months Ended                  Months Ended
 (Unaudited)                                                          6/30/99      6/30/98          6/30/99     6/30/98
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>          <C>          <C>          <C>
Net income....................................................          $ 18,453     $6,443       $ 36,064      $23,142
Other comprehensive income, net of tax:
    Unrealized gains on securities:
         Unrealized holding gains arising during period.......           (33,337)     1,657        (41,347)         768
         Less: Reclassified adjustment for gains
                       included in net income.................              (822)      (338)        (1,140)        (630)
-------------------------------------------------------------------------------------------------------------------------
Other comprehensive income....................................           (34,159)     1,319        (42,487)         138
-------------------------------------------------------------------------------------------------------------------------
Comprehensive income..........................................          $(15,706)    $7,762       $ (6,423)     $23,280
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       5

<PAGE>

                        COMMUNITY FIRST BANKSHARES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                For the Six Months Ended
(In thousands)                                                                          June 30,
                                                                            -------------------------------
(UNAUDITED)                                                                    1999                 1998
-----------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...........................................................      $  36,064           $    23,142
Adjustments to reconcile net income to net cash
    provided by operating activities:
         Provision for loan losses...................................         10,969                 5,956
         Depreciation................................................          7,157                 7,443
         Amortization of intangibles.................................          5,253                 5,075
         Net of amortization of premiums & discounts
              on securities..........................................            511                  (808)
         Decrease (increase) in interest receivable..................          1,600                (6,871)
         Increase in interest payable................................          2,047                 2,660
         OTHER - NET.................................................        (11,369)              (63,482)
-----------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities..................         52,232               (26,885)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net increase in interest-bearing deposits........................         (6,184)               (1,901)
    Purchases of available-for-sale securities.......................       (555,924)           (2,612,131)
    Maturities of available-for-sale securities......................        352,923             1,885,376
    Sales of securities, net of gains................................        121,268                93,860
    Purchases of held-to-maturity securities.........................         (1,654)               (6,874)
    Maturities of held-to-maturity securities........................            167                 9,015
    Net increase in loans............................................        (22,313)             (114,209)
      NET INCREASE IN BANK PREMISES AND EQUIPMENT....................         (6,290)              (15,539)
-----------------------------------------------------------------------------------------------------------
Net cash used in investing activities................................       (118,007)             (762,403)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in demand deposits, NOW
    accounts and savings accounts....................................       (132,343)              387,779
Net (decrease) increase in time accounts.............................        (62,767)              277,814
Net increase in short-term & other borrowings........................        256,148               109,695
Net increase in long-term debt.......................................            530                 3,303
Purchase of common stock held in treasury............................         (5,915)               (8,875)
Sale of common stock held in treasury................................          1,788                 2,016
Common stock dividends paid..........................................        (13,186)               (9,311)
-----------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities.....................         44,255               762,421
----------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents............................        (21,520)              (26,867)
Cash and cash equivalents at beginning of period.....................        251,063               331,131
----------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period...........................      $ 229,543           $   304,264
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
</TABLE>


                                       6

<PAGE>

                        COMMUNITY FIRST BANKSHARES, INC.

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1999

NOTE A - BASIS OF PRESENTATION

    The accompanying unaudited condensed consolidated financial statements,
which include the accounts of Community First Bankshares, Inc. (the "Company"),
its wholly-owned data processing, credit origination, insurance agency and
properties subsidiaries, and its eleven majority-owned subsidiary banks, have
been prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
considered necessary for fair presentation have been included.

    EARNINGS PER COMMON SHARE

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

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

NOTE B - BUSINESS COMBINATIONS AND DIVESTITURES

    On May 10, 1999, the Company signed a definitive agreement to acquire Valley
National Corporation ("Valley National"), the holding company for Valle de Oro
Bank, N.A., El Cajon, California through the issuance of Company common stock to
holders of Valley National common stock. The transaction, which is subject to
due diligence and regulatory and stockholder approval, is expected to be
completed during the fourth quarter of 1999 and is expected to be accounted for
using the pooling of interests method of accounting. Valley National had assets
of approximately $241 million and deposits of approximately $220 million as of
June 30, 1999.

NOTE C - SUBSEQUENT EVENTS

    On July 26, 1999, the Company signed a definitive agreement to acquire River
Bancorp, Inc., Ramsey, Minnesota through the issuance of Company common stock to
holders of River Bancorp common stock. The transaction, which is subject to
regulatory approval, is expected to be completed during the fourth quarter of
1999 and is expected to be accounted for using the pooling of interests method
of accounting. River Bancorp had assets of approximately $36 million at June 30,
1999.

    On July 2, 1999, the Company announced an agreement with Zions
Bancorporation to terminate the previously announced exchange of their Nephi,
Utah branch for the Greeley, Colorado branch of Zion's. On April 8, 1999, the
Company had signed an agreement to complete the purchase and assumption of
approximately $20 million in assets and liabilities of the Greeley branch. In a
related transaction on April 8, 1999, the Company signed an agreement to sell
its Nephi branch, which had approximately $15 million in assets. The termination
agreement was in response to anticipated regulatory concerns associated with
Zion's proposed merger with First Security Corporation and the impact it would
have on Greeley and Nephi customers.


                                       7

<PAGE>

NOTE D - ACCOUNTING CHANGES

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

    Statement of Financial Accounting Standards No. ("SFAS") 133, "Accounting
for Derivative Instruments and Hedging Activities," establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value. In
certain defined conditions, a derivative may be specifically designated as a
hedge for a particular exposure. The accounting for changes in the fair value of
the derivative depends on the intended use of the derivative and the resulting
designation. The effective date has been deferred for one year with the recent
issuance of SFAS 137, "Accounting for Derivative Instruments and Hedging
Activities-Deferral of the Effective Date of FASB Statement No. 133," which
amended SFAS 133. SFAS 133, as amended, is effective for all quarters of fiscal
years beginning after June 15, 2000, with earlier application permitted.
Retroactive application of this Statement to prior periods is prohibited. The
adoption of SFAS 133 is not expected to have a material impact on the Company.

    REPORTING COMPREHENSIVE INCOME

    As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the reporting and
display of comprehensive income and its components; however, the adoption of
this Statement had no impact on the Company's net income or shareholders'
equity. Statement 130 requires unrealized gains or losses on the Company's
available-for-sale securities which prior to adoption was reported separately in
shareholders' equity to be included in other comprehensive income. Prior year
financial statements have been reclassified to conform to the requirements of
Statement 130.

NOTE E - INVESTMENTS

    The following is a summary of available-for-sale and held-to-maturity
securities at June 30, 1999:

<TABLE>
<CAPTION>
                                                                           Available-for-Sale Securities
---------------------------------------------------------------------------------------------------------------
                                                              Gross          Gross    Estimated
                                                          Amortized     Unrealized   Unrealized            Fair
 (in  thousands)                                               Cost          Gains       Losses           Value
---------------------------------------------------------------------------------------------------------------
<S>                                                      <C>            <C>           <C>          <C>
United States Treasury...............................    $    117,340     $    453    $     525    $    117,268
United States Government agencies....................         411,312           99       12,290         399,121
Mortgage-backed securities...........................       1,235,908        1,279       28,224       1,208,963
Collateralized mortgage obligations..................          38,646          239           47          38,838
State and Political Securities ......................         136,223        1,053        2,916         134,360
Other securities.....................................         101,334          359        5,277          96,416
---------------------------------------------------------------------------------------------------------------
                                                         $  2,040,763     $  3,482    $  49,279    $  1,994,966
                                                         ------------------------------------------------------
                                                         ------------------------------------------------------

<CAPTION>

                                                                             HELD-TO-MATURITY SECURITIES
---------------------------------------------------------------------------------------------------------------
                                                                           Gross          Gross       Estimated
                                                         Amortized    Unrealized     Unrealized            Fair
                                                              Cost         Gains         Losses           Value
---------------------------------------------------------------------------------------------------------------
<S>                                                      <C>            <C>           <C>          <C>
Other securities.....................................       71,393             -              -          71,393
---------------------------------------------------------------------------------------------------------------
                                                         $  71,393        $   -       $       -    $     71,393
                                                         ------------------------------------------------------
                                                         ------------------------------------------------------
</TABLE>

     Proceeds from the sale of available-for-sale securities during the three
months ended June 30, 1999 and 1998, were $86,275,000 and $60,077,000,
respectively. Gross gains of $1,254,000 and $507,000 were realized on sales
during 1999 and 1998, respectively. Gross losses of $3,000 were realized on
these sales during 1998. Gains and losses on disposition of these securities
were computed using the specific identification method.


                                       8

<PAGE>

NOTE F - LOANS

     The composition of the loan portfolio at June 30, 1999, was as follows (in
thousands):

<TABLE>
<S>                                                             <C>
     Real estate...................................             $ 1,189,155
     Real estate construction......................                 407,509
     Commercial....................................                 916,793
     Agricultural..................................                 283,037
     Consumer and other............................                 597,732
                                                                -----------
                                                                  3,394,226
     Less allowance for loan losses................                  46,913
                                                                -----------
        Net loans..................................             $ 3,347,313
                                                                -----------
                                                                -----------
</TABLE>

NOTE G - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

     In the normal course of business, the Company is party to financial
instruments with off-balance sheet risk to meet the financing needs of its
customers and to manage its interest rate risk. These financial instruments
include commitments to extend credit and letters of credit. The contract or
notional amounts of these financial instruments at June 30, 1999, were as
follows (in thousands):

<TABLE>
     <S>                                                        <C>
     Commitments to extend credit..................             $   688,006
     Letters of credit.............................                  16,905
</TABLE>

NOTE H - SUBORDINATED NOTES

     Long-term debt at June 30, 1999, included $60 million of 7.30% Subordinated
Notes issued in June 1997. These notes are due June 30, 2004, with interest
payable semi-annually. At June 30, 1999, the entire $60 million, qualified as
Tier 2 capital.

NOTE I - INCOME TAXES

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

<TABLE>
<CAPTION>
                                                                            June 30, 1999
                                                                            -------------
     <S>                                                                    <C>
     35% of pretax income.......................................                $ 18,998
     State income tax, net of federal tax benefit...............                     711
     Tax-exempt interest........................................                  (2,152)
     Amortization of goodwill...................................                     459
     Other        ..............................................                     199
                                                                            ------------
     Provision for income taxes.................................                $ 18,215
                                                                            ------------
                                                                            ------------
</TABLE>

NOTE J - SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Six months ended June 30 (in thousands)                                     1999               1998
---------------------------------------------------------------------------------------------------
<S>                                                                      <C>              <C>
Noncash transfers of held-to-maturity securities
     to available-for-sale securities...........................         $       -        $ 131,296
Unrealized gain (loss) on available-for-sale securities.........           (66,786)           1,572
</TABLE>


                                       9

<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

BASIS OF PRESENTATION

         The following is a discussion of the Company's financial condition as
of June 30, 1999, and December 31, 1998, and its results of operations for the
three and six month periods ended June 30, 1999 and 1998. Each of the
acquisitions described in the table below is reflected in the Company's results
of operations for all periods following the acquisition and is reflected in the
Company's statement of financial condition at all dates subsequent to the
acquisition.

MERGER AND ACQUISITION ACTIVITY

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

     POOLING OF INTERESTS TRANSACTIONS. In the following transactions during the
periods presented, the Company accounted for the acquisition using the pooling
of interests method.

                                         POOLING OF INTERESTS TRANSACTIONS
<TABLE>
<CAPTION>
                                                                                   Total Assets
                      Location and/or                        Number of             at Date of
Date of               Name of Main Office                   Locations at           Acquisition
Acquisition           of Acquired Entity               Date of Acquisition         (in millions)
------------------------------------------------------------------------------------------------
<S>                   <C>                              <C>                         <C>
August 1998           Salt Lake City, Utah                      2                    $    99
July 1998             Las Cruces, New Mexico                    3                        159
May 1998              FNB, Inc., Colorado                       2                        120
April 1998            Longmont, Colorado                        4                        138
April 1998            Thornton, Colorado                        4                         78
</TABLE>

    With respect to the acquisitions listed above, the Company's results of
operations and financial condition have been restated for all historical
periods:

    On August 7, 1998, the Company issued approximately 1,526,000 shares of
common stock to acquire Guardian Bancorp ("Guardian"), a one-bank holding
company headquartered in Salt Lake City, Utah. At acquisition, Guardian had
approximately $99 million in assets at two offices in Utah.

    On July 1, 1998, the Company issued approximately 1,932,000 shares of common
stock to acquire Western Bancshares of Las Cruces, Inc. ("Western"), a one-bank
holding company headquartered in Las Cruces, New Mexico. At acquisition, Western
had approximately $159 million in assets at three offices in New Mexico.

    On May 7, 1998, the Company issued approximately 1,135,000 shares of common
stock to acquire FNB Inc. ("FNB"), a two-bank holding company with banks in
Greeley and Fort Collins, Colorado. At acquisition, FNB had approximately $120
million in assets.

    On April 30, 1998, the Company issued approximately 1,432,000 shares of
common stock to acquire Pioneer Bank of Longmont ("Pioneer"). At acquisition,
Pioneer had approximately $138 million in assets at four offices in Colorado.

    On April 3, 1998, the Company issued approximately 853,000 shares of common
stock to acquire Community Bancorp, Inc. ("CBI"), a one-bank holding company
headquartered in Thornton, Colorado. At acquisition, CBI had approximately $78
million in assets at one bank in Colorado.

    PURCHASE TRANSACTIONS. The following transaction during the periods
presented was accounted for as a purchase of certain assets and assumption of
certain liabilities.


                                       10

<PAGE>

                               PURCHASE TRANSACTION
<TABLE>
<CAPTION>
                                                                                    Total Assets
                          Location and/or                    Number of               at Date of
Date of                 Name of Main Office                 Locations at            Acquisition
Acquisition              of Acquired Entity             Date of Acquisition         (in millions)
-------------------------------------------------------------------------------------------------
<S>                  <C>                                <C>                        <C>
January 1998         Banc One, Phoenix, Arizona                 37                   $    730
</TABLE>

     The purchase and assumption listed above involved the assets and
liabilities of 37 offices of Banc One Corporation located in Arizona, Colorado,
and Utah. The transaction resulted in the recognition of approximately $44
million of deposit premium. The purchase was funded through a combination of net
proceeds from the issuance of 2,000,000 shares of common stock in December 1997
and the proceeds of the issuance of $60 million 8.20% Cumulative Capital
Securities by a business trust subsidiary in December 1997.

OVERVIEW

     For the three months ended June 30, 1999, net income was $18.5 million, an
increase of $12.1 million, or 189%, from the $6.4 million earned during the 1998
period. The Company's basic earnings per common share for the second quarter of
1999 were $0.39, compared to $0.14 in 1998. Diluted earnings per common share
for the second quarter of 1999 were $0.39.

     Return on average assets was 1.23% for the second quarter of 1999, compared
with 0.45% for the 1998 period. Return on average common shareholders' equity
for the 1999 and 1998 periods was 18.26% and 6.69%, respectively. Principal
factors contributing to these changes included the one time charges associated
with the sale of the Company's sub-prime lending affiliates; and incremental net
noninterest expenses associated with the acquisition and integration of entities
acquired during 1998.

     For the six months ended June 30, 1999, net income was $36.1 million, an
increase of $13.0 million, or 56.3%, from the $23.1 million earned during the
1998 period. This included the effect of a $3.9 million after tax loss from
discontinued operations associated with disposal of the Company's sub-prime
lending business. Basic earnings per common share for the six months ended June
30, 1999, were $0.77, compared to $0.49 in 1998. Diluted earnings per common
share for the six months ended June 30, 1999 were $0.76.

     Return on average assets and return on common equity for the six months
ended June 30, 1999 were 1.22% and 18.00%, respectively, as compared to the 1998
ratios of 0.83% and 12.15%, respectively.

SALE OF SUB-PRIME LENDING BUSINESS

     In December 1996, the Company acquired two sub-prime lending affiliates,
Mountain Parks Financial Services, Inc. ("MPFS") and Equity Lending, Inc.
("ELI"), through its merger with Mountain Parks Financial Corporation. The
Company subsequently decided to sell MPFS and ELI and accounted for these
entities as discontinued operations during 1997 and the first two quarters of
1998.

     During the first two quarters of 1998, the Company recognized a charge of
$1.7 million, which reflected the expected loss on disposition of the
subsidiaries, and realized a $2.2 million operating loss, consisting of $707,000
attributed to quarterly operations, including a $68,000 loss during the first
quarter and $1.4 million associated with one-time operating expenses related to
preparing the subsidiaries for sale.

     As of June 30, 1998, in anticipation of the disposition of certain
operating assets, the Company changed the status of MPFS and ELI from
discontinued operations and reflected the assets expected to be retained as
loans. In July 1998, the Company sold the operating assets, excluding loans
retained of MPFS and ELI in cash transactions. The Company retained
approximately $50 million in sub-prime mortgage loans originated by ELI,
approximately $50 million in automobile installment contracts originated by MPFS
and servicing rights on an additional $100 million in ELI loans sold to other
parties. In late 1998, the Company sold a portion of the loans retained from
MPFS and ELI. The Company recorded another charge of $10 million in the fourth
quarter in connection with further expected losses upon liquidation of these
assets, including direct losses, increased reserves, termination fees on certain
servicing contracts and severance costs for loan servicing personnel. During
April 1999, the Company sold $8.5 million of remaining sub-prime mortgages and
$22 million of automobile installment contracts. During May 1999, the Company
sold $10 million of the remaining automobile installment contracts. At June 30,
1999, the Company had approximately $12 million in performing sub-prime
mortgages, which continue to be paid down or are being liquidated. The Company


                                       11

<PAGE>

anticipates that it will not pursue further sub-prime lending activities.

RESULTS OF OPERATIONS

     NET INTEREST INCOME

     Net interest income for the three months ended June 30, 1999, was $66.8
million, an increase of $2.3 million, or 3.6%, from the net interest income of
$64.5 million earned during the 1998 period. The increase was principally due to
a $213 million increase in the Company's average asset base. The net interest
margin of 5.03% during the second quarter of 1999, was down slightly from 5.04%
during the 1998 period.

     Net interest income for the six months ended June 30, 1999 was $132.8
million, an increase of $8.2 million, or 6.6% from interest income of $124.6
million earned during the 1998 period.

     PROVISION FOR LOAN LOSSES

     The provision for loan losses for the three months ended June 30, 1999, was
$6.2 million, an increase of $2.0 million, or 47.6%, from the $4.2 million
provision during the 1998 period. This increase reflects the final effect of the
Company's decision to exit its sub-prime lending activities, the recognition of
specific credits at recently acquired institutions, and the Company's objective
of maintaining adequate reserve levels

     NONINTEREST INCOME

     Noninterest income for the three months ended June 30, 1999, was $18.0
million, an increase of $2.0 million, or 12.5%, from the 1998 level of $16.0
million. The increase reflects continued growth in revenue generated by the
Company's insurance, trust and sales of investment securities. The 1999 period
included $1.3 million in gains on the sale of available-for-sale securities, an
increase of $750,000 over the 1998 period.

     Noninterest income for the six months ended June 30, 1999, was $33.7
million, an increase of $3.5 million, or 11.6% from the 1998 level of $30.2
million. The increase was principally due to a $1.5 million increase in deposit
service charges. In addition, insurance commissions increased $709,000 and gains
on sale of available-for-sale securities increased $799,000.

     NONINTEREST EXPENSE

     Noninterest expense for the three months ended June 30, 1999, was $51.1
million, a decrease of $10.9 million, or 17.6%, from the level of $62.0 million
during the 1998 period. The decrease was principally due to a decrease of $5.5
million, or 18.1%, in salaries and employee benefits, a significant portion
resulting from the Company's cost reduction initiatives implemented during the
fourth quarter of 1998. Net occupancy decreased $903,000 or 10.5% from $8.6
million in the period ended June 30, 1998, to $7.7 million at the end of the
current period, also principally due to the Company's cost reduction
initiatives. Legal and accounting expense decreased $1.2 million or 64.3% from
$1.9 million in the period ended June 30, 1998 to $677,000 at the end of the
current period, principally due to the absence of any acquisition transactions
during the current period. The second quarter of 1998 included $1.6 million in
acquisition, merger, integration, and conforming charges associated with
transactions completed during the second quarter of 1998.

     Noninterest expense for the six months ended June 30, 1999 was $101.3
million, a decrease of $10.3 million, or 9.2%, from $111.6 million during the
1998 period. The decrease was principally due to the cost reduction initiatives
implemented during the fourth quarter of 1998, including a $5.0 million, or 9.1%
reduction in salaries and employee benefits and a $1.7 million, or 10.3%
reduction in net occupancy. In addition, the second quarter of 1998 included
$1.6 million in acquisitions, merger, integration, and conforming charges
related to acquisitions completed during the 1998 period. Legal and accounting
expense was $1.3 million during the period ended June 30, 1999, a decrease of
$1.2 million or 48.0% from the $2.5 million recorded during the period ended
June 30, 1998.

     PROVISION FOR INCOME TAXES

     The provision for income taxes for the three months ended June 30, 1999,
was $9.0 million, an increase


                                       12

<PAGE>

of $5.0 million, or 125.0%, from the 1998 level of $4.0 million, due
primarily to the increase in pre-tax income. The reduction in the effective
tax rate results primarily from the realization of the effect of certain tax
planning strategies.

     The provision for income taxes for the six months ended June 30, 1999 was
$18.2 million, an increase of $8.0 million, or 78.4%, from the 1998 level of
$10.2 million, due to the increase in the level of pretax income.

YEAR 2000 ISSUE

     The Company is evaluating the potential impact of what is commonly referred
to as the "Year 2000" issue. This issue addresses the potential inability of
certain information systems to properly recognize and process dates containing
the year 2000 and beyond. If not corrected, these systems could fail or create
erroneous results. The Company has established a dedicated Year 2000 Team to
focus on all significant operational areas throughout the Company. This team has
worked with management to commence the following steps: (i) implementing a Year
2000 Assessment and Testing Plan for all items that may be affected by the Year
2000 date change; (ii) working with loan customers to help them understand the
impact of the Year 2000 on their business; (iii) communicating with third
parties that interact with the Company to ensure they are addressing the Year
2000 issue; (iv) communicating with hardware and software suppliers to ensure
Year 2000 compliance among their products; and (v) contingency and disaster
recovery planning to ensure Year 2000 problem resolution. The Company has
identified and tested the applications it believes are mission critical, and the
initial test results indicated that these systems are Year 2000 compliant. The
Company completed testing and established compliance with respect to its
applications, subject to equipment upgrades during 1999, ongoing communications
with third parties, and compliance of any entities acquired in 1999. Regardless
of the Year 2000 compliance of the Company's systems, there can be no assurance
that the Company will not be adversely affected by the failure of others to
become Year 2000 compliant. Such risks may include potential losses related to
loans made to third parties whose businesses are adversely affected by the Year
2000 issue, the disruption or inaccuracy of data provided by non-Year 2000
compliant third parties and business disruption caused by the failure of service
providers, such as security and data processing companies, to become Year 2000
compliant. Another pervasive banking risk associated with the Year 2000 issue is
the risk of banking customers withdrawing and retaining large amounts of cash
during late 1999, thus reducing the Company's deposits and needed working
capital. Because of these uncertainties, there can be no assurance that the Year
2000 issue will not have a material financial impact in any future period.

     The Company incurred operating costs of $400,000 during 1998, which
included $100,000 in labor costs associated with dedicated staff and $200,000 of
labor costs related to other staff time devoted to Year 2000 compliance and
$100,000 in costs related to the write off of non-compliant equipment. The
Company also incurred $1.0 million in capital expenditures for equipment
upgrades related to the compliance effort. During the first six months of 1999,
the Company incurred approximately $400,000 in operating costs and an additional
$900,000 in capital expenditures. The 1999 expenditures represent 5% of the
Company's information technology operating budget and 30% of the Company's
information technology capital expenditure budget for 1999. The Company
anticipates minimal operating costs and additional capital expenditures of
$100,000 related to the Year 2000 issue during the remainder of 1999. The costs
incurred in 1999 and 1998 were funded from operating income. The Company has not
delayed any information technology projects as a result of their Year 2000
compliance effort.


                                       13

<PAGE>

     The Company has identified contingency plans for all mission critical
applications and the affiliate bank environment. The verification and validation
of these plans have been completed during the first six months of 1999. The
Company currently is and will continue to focus on communication of the Year
2000 issue to customers and employees. The Company's Year 2000 compliance effort
has been reviewed on five occasions by regulatory authorities during 1998, with
additional reviews expected in 1999.

FINANCIAL CONDITION

     LOANS

     Total loans were $3.4 billion at June 30, 1999 and at December 31, 1998.

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

<TABLE>
<CAPTION>
                                                         JUNE 30, 1999                        DECEMBER 31, 1998
----------------------------------------------------------------------------------------------------------------
                                                           PERCENT OF                           PERCENT OF
                                                      AMOUNT      TOTAL LOANS             AMOUNT     TOTAL LOANS
                                                      ----------------------------------------------------------
                                                                       (DOLLARS IN THOUSANDS)
<S>                                              <C>               <C>                <C>                <C>
Loan category:
     Real estate......................           $ 1,189,155         35.03%           $ 1,225,255         36.19%
     Real estate construction.........               407,509         12.01%               358,317         10.58%
     Commercial.......................               916,793         27.01%               904,063         26.70%
     Consumer and other...............               597,732         17.61%               603,468         17.82%
     Agricultural.....................               283,037          8.34%               295,039          8.71%
     -----------------------------------------------------------------------------------------------------------
Total loans...........................             3,394,226        100.00%             3,386,142        100.00%
                                                                    ------                               ------
                                                                    ------                               ------
Less allowance for loan losses........                46,913                               50,173
                                                 -----------                          -----------
Total    .............................           $ 3,347,313                          $ 3,335,969
                                                 -----------                          -----------
                                                 -----------                          -----------
</TABLE>

     NONPERFORMING ASSETS

     At June 30, 1999, nonperforming assets were $31.3 million, an increase of
$5.0 million, or 19.0%, from the $26.3 million level at December 31, 1998. The
increase was principally due to the Company's decision to place various credits
at recently acquired institutions, into a non-accrual status. At June 30, 1999,
nonperforming loans as a percent of total loans was .82%, an increase from the
December 31, 1998 level of .67%. OREO was $3.5 million at June 30, 1999, a
decrease of $195,000 from $3.7 million at December 31, 1998.

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

<TABLE>
<CAPTION>
                                                                  JUNE 30,              DECEMBER 31,
Loans                                                                 1999                      1998
                                                       ---------------------------------------------
<S>                                                           <C>                       <C>
         Nonaccrual loans...................                   $    27,664               $    22,517
           Restructured Loans...............                           126                       162
----------------------------------------------------------------------------------------------------
         Nonperforming loans................                        27,790                    22,679
Other real estate owned.....................                         3,465                     3,660
----------------------------------------------------------------------------------------------------
Nonperforming assets........................                   $    31,255               $    26,339
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Loans 90 days or more past due but still accruing              $     1,378               $     3,088
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------

Nonperforming loans as a percentage of total loans                     .82%                     .67%
Nonperforming assets as a percentage of total assets                   .52%                     .44%
Nonperforming assets as a percentage of loans and OREO                 .92%                     .78%
</TABLE>


                                       14

<PAGE>

ALLOWANCE FOR LOAN LOSSES

     At June 30, 1999 and June 30, 1998, the allowance for loan losses was $46.9
million and $42.3 million, respectively. Net charge-offs during the 1999 period
were $10.5 million more than those incurred during the six months ended June 30,
1998. The increase is due principally to the charge-off of sub-prime loans
identified and included in the loan loss provision during the fourth quarter of
1998 and also reflects the Company's exit of the sub-prime lending business.

     At June 30, 1999, the allowance for loan losses as a percentage of total
loans was 1.38%, a slight decrease from the June 30, 1998, level of 1.32%.

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

<TABLE>
<CAPTION>
                                                                                     JUNE 30
(DOLLARS IN THOUSANDS)                                                      1999                 1998
                                                                        -------------------------------
<S>                                                                     <C>                  <C>
Balance at beginning of period.......................                   $ 50,173             $ 40,045
Charge-offs:
         Commercial..................................                      2,234                1,729
         Real estate.................................                      1,726                  272
         Real estate construction....................                      2,602                   36
         Agricultural................................                        175                  317
             Consumer and other......................                     10,375                3,168
-----------------------------------------------------------------------------------------------------
                Total charge-offs....................                     17,112                5,522
-----------------------------------------------------------------------------------------------------
Recoveries:
         Commercial..................................                        233                  530
         Real estate.................................                        800                  133
         Agricultural................................                        307                  203
         Consumer and other..........................                      1,543                  923
-----------------------------------------------------------------------------------------------------
              Total recoveries.......................                      2,883                1,789
Net charge-offs......................................                     14,229                3,733
Provision charged to operations......................                     10,969                5,956
-----------------------------------------------------------------------------------------------------
Balance at end of period.............................                   $ 46,913             $ 42,268
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
Allowance as a percentage of total loans.............                      1.38%                1.32%
Annualized net charge-offs to average
     loans outstanding...............................                      0.85%                0.24%
</TABLE>

     INVESTMENTS

     The investment portfolio, including available-for-sale securities and
held-to-maturity securities, was $2.1 billion at June 30, 1999, and December 31,
1998. At June 30, 1999, the investment portfolio represented 34.3% of total
assets, compared with 34.2% at December 31, 1998. In addition to investment
securities, the Company had investments in interest-bearing deposits of $11.3
million at June 30, 1999, a $6.2 million increase from the $5.1 million at
December 31, 1998.

     DEPOSITS

     Total deposits were $4.7 billion at June 30, 1999, a decrease of $195
million or 4.0% from $4.9 billion at December 31, 1998. Noninterest-bearing
deposits at June 30, 1999, were $790 million, an increase of $242 million, or
44.2%, from $548 million at December 31, 1998. The Company's core deposits as a
percent of total deposits were 87.5% and 87.6% as of June 30, 1999, and December
31, 1998, respectively. Interest-bearing deposits were $3.9 billion at June 30,
1999, a decrease of $437 million, or 10.1% from the $4.3 billion at December 31,
1998.


                                       15

<PAGE>

     BORROWINGS

     Short-term borrowings of the Company were $435 million as of June 30, 1999,
as compared to $293 million at December 31, 1998, an increase of $142 million,
or 48.5%.

     Long-term debt of the Company was $94 million as of June 30, 1999, an
increase of $1 million, or 1.1%, from the $93 million as of December 31, 1998.

     CAPITAL MANAGEMENT

     Shareholders' equity decreased $22 million, or 5.4%, to $383 million at
June 30, 1999, from $405 million at December 31, 1998, due principally to an
increase in unrealized losses on available-for-sale securities, partially offset
by the increase in net income. At June 30, 1999, the Company's Tier 1 capital,
total risk-based capital and leverage ratios were 9.81%, 12.42%, and 6.77%,
respectively, compared to minimum required levels of 4%, 8% and 3%, respectively
(subject to change and the discretion of regulatory authorities to impose higher
standards in individual cases). At June 30, 1999, the Company had risk-weighted
assets of $4.1 billion.


                                       16

<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     There have been no material changes in market risk exposures that affect
the quantitative and qualitative disclosures presented as of December 31, 1998.


                                       17

<PAGE>

PART II - OTHER INFORMATION


Item 1.       Legal Proceedings:
              None.

Item 2.       Changes in Securities:
              None.

Item 3.       Defaults upon Senior Securities:
              None.

Item 4.       Submission of Matters to a Vote of Security Holders:
              The Company held its Annual Meeting of Shareholders on April 27,
              1999. The shareholders took the following actions:

              (i) The shareholders elected ten directors to hold office until
              the next Annual Meeting of Shareholders or until their successors
              are elected. The shareholders present in person or by proxy cast
              the following numbers of votes in connection with the election of
              directors, resulting in the election of all of the nominees:

<TABLE>
<CAPTION>
                                                            Votes For                   Votes Withheld
                                                            ----------                  --------------
                   <S>                                      <C>                         <C>
                    James T. Anderson                       36,682,213                         173,349
                    Patrick E. Benedict                     36,683,418                         172,144
                    Patrick Delaney                         36,532,255                         323,307
                    John H. Flittie                         36,683,436                         172,126
                    Darrell G. Knudson                      36,683,425                         172,137
                    Dennis M. Mathisen                      36,659,427                         196,135
                    Donald R. Mengedoth                     36,666,743                         188,819
                    Marilyn Seymann                         36,682,627                         172,935
                    Thomas C. Wold                          36,680,629                         174,933
                    Harvey L. Wollman                       36,681,829                         173,733
</TABLE>

              (ii) The shareholders ratified and approved the election of Ernst
              & Young LLP as the independent public accountants for the Company
              for the current fiscal year. 36,720,506 votes were cast for the
              resolution; 74,583 votes were cast against the resolution; and
              60,473 votes abstained.

Item 5.       Other Information:
              None.

Item 6.       Exhibits and Reports on Form 8-K:
     (a)      Exhibits:
              Exhibit 27.1                           Financial Data Schedule
     (b)      Reports on Form 8-K:
              None.


                                       18

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                   COMMUNITY FIRST BANKSHARES, INC.



Date:  August 11, 1999             /s/Mark A. Anderson
                                   --------------------------------------
                                   Mark A. Anderson
                                   Vice Chairman - Corporate Services,
                                   Chief Financial Officer,
                                   Chief Information Officer, Treasurer,
                                   Secretary (Principal Financial and
                                   Accounting Officer)


                                       19