---

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549

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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, 2000

OR

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

For the transition period from to  to

Commission file number 0-19368

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

Delaware(State or other jurisdiction of
incorporation or organization)

46-0391436(I.R.S. Employer Identification No.)520 Main Avenue
Fargo, ND(Address of principal executive offices)

58124(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, 2000, 44,805,168 shares of Common Stock were outstanding.

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## 

COMMUNITY FIRST BANKSHARES, INC.
FORM 10-Q
QUARTER ENDED JUNE 30, 2000

INDEX

|                              |         |    |                                                                                       | Page
|----------------------------- | ------- | -- | ------------------------------------------------------------------------------------- | ----
|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                    |         | 16

2

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COMMUNITY FIRST BANKSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

|(Dollars in thousands, except per share data)
(Unaudited)                           |                                                                                                        | June 30,
2000                |           | December 31,
1999 |    
|----------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ---------------------------- | --------- | ----------------- | ---
|ASSETS                                                                              |                                                                                                       
|Cash and due from banks                                                             |                                                                                                        | $                            | 259,717   |                   | $  
|Federal funds sold and securities purchased under agreements to resell              |                                                                                                        |                              | 1,550     |                   |    
|Interest-bearing deposits                                                           |                                                                                                        |                              | 2,181     |                   |    
|Available-for-sale securities                                                       |                                                                                                        |                              | 1,875,523 |                   |    
|Held-to-maturity securities (fair value: 6/30/00$71,539, 12/31/99$74,248)         |                                                                                                        |                              | 71,539    |                   |    
|Loans                                                                               |                                                                                                        |                              | 3,729,497 |                   |    
|                                                                                    | Less: Allowance for loan losses                                                                        |                              |           | (51,555           | )  
|                                                                                    |                                                                                                        |                              |           |                   |    
|Net loans                                                                           |                                                                                                        |                              | 3,677,942 |                   |    
|Bank premises and equipment, net                                                    |                                                                                                        |                              | 121,542   |                   |    
|Accrued interest receivable                                                         |                                                                                                        |                              | 52,292    |                   |    
|Intangible assets                                                                   |                                                                                                        |                              | 119,440   |                   |    
|Other assets                                                                        |                                                                                                        |                              | 96,992    |                   |    
|                                                                                    |                                                                                                        |                              |           |                   |    
|Total assets                                                                        |                                                                                                        | $                            | 6,278,718 |                   | $  
|                                                                                    |                                                                                                        |                              |           |                   |    
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                |                                                                                                       
|Deposits:                                                                           |                                                                                                        |                              |           |                   |    
|                                                                                    | Noninterest-bearing                                                                                    |                              | $         | 683,508           |    
|                                                                                    | Interest-bearing:                                                                                      |                              |           |                   |    
|                                                                                    | Savings and NOW accounts                                                                               |                              |           | 2,164,209         |    
|                                                                                    | Time accounts over $100,000                                                                            |                              |           | 631,251           |    
|                                                                                    | Other time accounts                                                                                    |                              |           | 1,502,186         |    
|                                                                                    |                                                                                                        |                              |           |                   |    
|Total deposits                                                                      |                                                                                                        |                              | 4,981,154 |                   |    
|Federal funds purchased and securities sold under agreements to repurchase          |                                                                                                        |                              | 219,469   |                   |    
|Other short-term borrowings                                                         |                                                                                                        |                              | 453,266   |                   |    
|Long-term debt                                                                      |                                                                                                        |                              | 99,895    |                   |    
|Accrued interest payable                                                            |                                                                                                        |                              | 33,471    |                   |    
|Other liabilities                                                                   |                                                                                                        |                              | 22,447    |                   |    
|                                                                                    |                                                                                                        |                              |           |                   |    
|Total liabilities                                                                   |                                                                                                        |                              | 5,809,702 |                   |    
|Company-obligated mandatorily redeemable preferred securities of CFB Capital I & II |                                                                                                        |                              | 120,000   |                   |    
|Shareholders' equity:                                                               |                                                                                                        |                              |           |                   |    
|                                                                                    | Common stock, par value $.01 per share:                                                                |                              |           |                   |    
|                                                                                    |                                                                                                        | Authorized Shares80,000,000 |           |                   |    
|                                                                                    |                                                                                                        | Issued Shares51,021,896     |           |                   | 510
|                                                                                    | Capital surplus                                                                                        |                              |           | 192,071           |    
|                                                                                    | Retained earnings                                                                                      |                              |           | 293,879           |    
|                                                                                    | Unrealized gain on available-for-sale securities, net of tax                                           |                              |           | (47,841           | )  
|                                                                                    | Less cost of common stock in treasury
June 30, 20005,452,611 shares
December 31, 1999885,964 shares |                              |           | (89,603           | )  
|                                                                                    |                                                                                                        |                              |           |                   |    
|Total shareholders' equity                                                          |                                                                                                        |                              | 349,016   |                   |    
|                                                                                    |                                                                                                        |                              |           |                   |    
|Total liabilities and shareholders' equity                                          |                                                                                                        | $                            | 6,278,718 |                   | $  
|                                                                                    |                                                                                                        |                              |           |                   |    

See
accompanying notes.

3

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COMMUNITY FIRST BANKSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

|                                                    |                                                                                     | For the Three Months
Ended June 30, |        | For the Six Months
Ended June 30,
|--------------------------------------------------- | ----------------------------------------------------------------------------------- | ----------------------------------- | ------ | ---------------------------------
|
|Interest income:                                    |                                                                                     |                                     |        |                                  
|                                                    | Loans                                                                               |                                     | $      | 88,287                           
|                                                    | Investment securities                                                               |                                     |        | 31,825                           
|                                                    | Interest-bearing deposits                                                           |                                     |        | 52                               
|                                                    | Federal funds sold and resale agreements                                            |                                     |        | 28                               
|                                                    |                                                                                     |                                     |        |                                  
|                                                    |                                                                                     | Total interest income               |        |                                  
|Interest expense:                                   |                                                                                     |                                     |        |                                  
|                                                    | Deposits                                                                            |                                     |        | 40,862                           
|                                                    | Short-term and other borrowings                                                     |                                     |        | 10,508                           
|                                                    | Long-term debt                                                                      |                                     |        | 1,501                            
|                                                    |                                                                                     |                                     |        |                                  
|                                                    |                                                                                     | Total interest expense              |        |                                  
|                                                    |                                                                                     |                                     |        |                                  
|Net interest income                                 |                                                                                     |                                     | 67,321 |                                  
|Provision for loan losses                           |                                                                                     |                                     | 3,811  |                                  
|                                                    |                                                                                     |                                     |        |                                  
|Net interest income after provision for loan losses |                                                                                     |                                     | 63,510 |                                  
|                                                    |                                                                                     |                                     |        |                                  
|Noninterest income:                                 |                                                                                     |                                     |        |                                  
|                                                    | Service charges on deposit accounts                                                 |                                     |        | 10,009                           
|                                                    | Insurance commissions                                                               |                                     |        | 2,528                            
|                                                    | Fees from fiduciary activities                                                      |                                     |        | 1,472                            
|                                                    | Net gain on sales of available-for-sale securities                                  |                                     |        | 144                              
|                                                    | Other                                                                               |                                     |        | 4,817                            
|                                                    |                                                                                     |                                     |        |                                  
|                                                    |                                                                                     | Total noninterest income:           |        |                                  
|                                                    |                                                                                     |                                     |        |                                  
|Noninterest expense:                                |                                                                                     |                                     |        |                                  
|                                                    | Salaries and employee benefits                                                      |                                     |        | 27,788                           
|                                                    | Net occupancy                                                                       |                                     |        | 8,005                            
|                                                    | FDIC insurance                                                                      |                                     |        | 271                              
|                                                    | Legal and accounting                                                                |                                     |        | 987                              
|                                                    | Other professional service                                                          |                                     |        | 1,086                            
|                                                    | Data processing                                                                     |                                     |        | 1,239                            
|                                                    | Company-obligated mandatorily redeemable preferred securities of CFB Capital I & II |                                     |        | 2,562                            
|                                                    | Amortization of intangibles                                                         |                                     |        | 2,614                            
|                                                    | Other                                                                               |                                     |        | 10,517                           
|                                                    |                                                                                     |                                     |        |                                  
|                                                    |                                                                                     | Total noninterest expense           |        |                                  
|Income before income taxes                          |                                                                                     |                                     | 27,411 |                                  
|Provision for income taxes                          |                                                                                     |                                     | 9,150  |                                  
|                                                    |                                                                                     |                                     |        |                                  
|Net income                                          |                                                                                     | $                                   | 18,261 |                                  
|                                                    |                                                                                     |                                     |        |                                  
|Earnings per common and common equivalent share:    |                                                                                     |                                     |        |                                  
|                                                    | Basic net income                                                                    |                                     | $      | 0.38                             
|                                                    |                                                                                     |                                     |        |                                  
|                                                    | Diluted net income                                                                  |                                     | $      | 0.38                             
|                                                    |                                                                                     |                                     |        |                                  
|Average common shares outstanding:                  |                                                                                     |                                     |        |                                  
|                                                    | Basic                                                                               |                                     |        | 48,060,322                       
|                                                    | Diluted                                                                             |                                     |        | 48,437,386                       
|                                                    |                                                                                     |                                     |        |                                  

4

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COMMUNITY FIRST BANKSHARES, INC.

STATEMENTS OF COMPREHENSIVE INCOME

|                                        |                                                                | For the Three Months
Ended June 30,            |        | For the Six Months
Ended June 30, |      
|--------------------------------------- | -------------------------------------------------------------- | ---------------------------------------------- | ------ | --------------------------------- | -----
|
|Net income                              |                                                                | $                                              | 18,261 |                                   | $    
|Other comprehensive income, net of tax: |                                                                |                                                |        |                                   |      
|                                        | Unrealized gains on securities:                                |                                                |        |                                   |      
|                                        |                                                                | Unrealized holding gains arising during period |        |                                   | 4,231
|                                        | Less: Reclassified adjustment for gains included in net income |                                                |        | (86                               | )    
|                                        |                                                                |                                                |        |                                   |      
|Other comprehensive income              |                                                                |                                                | 4,145  |                                   |      
|                                        |                                                                |                                                |        |                                   |      
|Comprehensive income                    |                                                                | $                                              | 22,406 |                                   | $    
|                                        |                                                                |                                                |        |                                   |      

5

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COMMUNITY FIRST BANKSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                  |                                                           | For the Six Months Ended
June 30, |        
|--------------------------------------------------------------------------------- | --------------------------------------------------------- | --------------------------------- | -------
|
|Cash flows from operating activities:                                             |                                                           |                                   |        
|Net income                                                                        |                                                           | $                                 | 36,924 
|Adjustments to reconcile net income to net cash provided by operating activities: |                                                           |                                   |        
|                                                                                  | Provision for loan losses                                 |                                   |        
|                                                                                  | Depreciation                                              |                                   |        
|                                                                                  | Amortization of intangibles                               |                                   |        
|                                                                                  | Net of amortization of premiums & discounts on securities |                                   |        
|                                                                                  | Decrease (increase) in interest receivable                |                                   |        
|                                                                                  | Decrease in interest payable                              |                                   |        
|                                                                                  | Othernet                                                 |                                   |        
|                                                                                  |                                                           |                                   |        
|Net cash provided by operating activities                                         |                                                           |                                   | 44,357 
|Cash flows from investing activities:                                             |                                                           |                                   |        
|                                                                                  | Net decrease (increase) in interest-bearing deposits      |                                   |        
|                                                                                  | Purchases of available-for-sale securities                |                                   |        
|                                                                                  | Maturities of available-for-sale securities               |                                   |        
|                                                                                  | Sales of available-for-sale securities, net of gains      |                                   |        
|                                                                                  | Purchases of held-to-maturity securities                  |                                   |        
|                                                                                  | Maturities of held-to-maturity securities                 |                                   |        
|                                                                                  | Net increase in loans                                     |                                   |        
|                                                                                  | Net increase in bank premises and equipment               |                                   |        
|                                                                                  |                                                           |                                   |        
|Net cash provided by (used in) investing activities                               |                                                           |                                   | 13,442 
|Cash flows from financing activities:                                             |                                                           |                                   |        
|Net decrease in demand deposits, NOW accounts and savings accounts                |                                                           |                                   | (45,849
|Net increase (decrease) in time accounts                                          |                                                           |                                   | 117,140
|Net (decrease) increase in short-term & other borrowings                          |                                                           |                                   | (51,690
|Net increase in long-term debt                                                    |                                                           |                                   | 24,273 
|Net proceeds from issuance of common stock                                        |                                                           |                                   |       
|Purchase of common stock held in treasury                                         |                                                           |                                   | (81,177
|Sale of common stock held in treasury                                             |                                                           |                                   | 3,610  
|Common stock dividends paid                                                       |                                                           |                                   | (14,665
|                                                                                  |                                                           |                                   |        
|Net cash (used in) provided by financing activities                               |                                                           |                                   | (48,358
|                                                                                  |                                                           |                                   |        
|Net increase (decrease) in cash and cash equivalents                              |                                                           |                                   | 9,441  
|Cash and cash equivalents at beginning of period                                  |                                                           |                                   | 251,826
|                                                                                  |                                                           |                                   |        
|Cash and cash equivalents at end of period                                        |                                                           | $                                 | 261,267
|                                                                                  |                                                           |                                   |        

6

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COMMUNITY FIRST BANKSHARES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000

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 twelve wholly-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.



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 DIVESTITURES

On January 14, 2000, the Company, through its Arizona subsidiary, completed the sale of its office in Nephi, Utah. The Nephi office was acquired on
January 23, 1998 as part of the Company's purchase and assumption of 37 offices of Banc One Corporation located in Arizona, Colorado and Utah. The transaction included the disposition of
approximately $17 million in deposits.

On
February 11, 2000, the Company, through its Arizona subsidiary, completed the sale of its office in Richfield, Utah. The Richfield office was acquired on January 23,
1998 as part of the Company's purchase and assumption of 37 offices of Banc One Corporation located in Arizona, Colorado and Utah. The transaction included the disposition of approximately
$16 million in deposits.

On
June 28, 2000, the Company announced an agreement to sell its Fairplay, Colorado branch to Commercial Bank of Leadville, Colorado. The Fairplay branch has approximately
$12 million in assets. The transaction is subject to regulatory approval and is expected to close in the fourth quarter 2000.

Note CSUBSEQUENT EVENTS

On August 9, 2000, the Company announced its intention to repurchase up to 5 million shares of the Company's common stock. This share repurchase
represents approximately 11 percent of the shares of common stock outstanding at the date of the announcement. Shares will be purchased primarily on the open market, with the timing dependent
on market conditions and any pending acquisitions.

7

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Note DINVESTMENTS

The following is a summary of available-for-sale and held-to-maturity securities at June 30, 2000

Available-for-Sale Securities(in thousands):

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair
ValueUnited States Treasury

$
114,082

$
46

$
1,202

$
112,926United States Government agencies


474,399


7


20,775


453,631Mortgage-backed securities


1,097,642


981


41,053


1,057,570Collateralized mortgage obligations


18,083


37


159


17,961State and political securities


143,834


516


4,512


139,838Other securities


105,040


250


11,693


93,597$
1,953,080

$
1,837

$
79,394

$
1,875,523


Held-to-Maturity SecuritiesAmortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair
ValueOther securities

$
71,539







$
71,539$
71,539

$


$


$
71,539


Proceeds
from the sale of available-for-sale securities during the three months ended June 30, 2000 and 1999 were $6,757,000 and $86,275,000,
respectively. Gross gains of $144,000 and $1,254,000 were realized on sales during the second quarters of 2000 and 1999, respectively. No losses were realized on these sales during these quarters.
Gains and losses on disposition of these securities were computed using the specific identification method.

Note ELOANS

The composition of the loan portfolio at June 30, 2000 was as follows (in thousands):

Real estate

$
1,422,874Real estate construction


427,924Commercial


926,400Consumer and other


688,936Agriculture


263,3633,729,497Less allowance for loan losses


(51,555
)Net loans

$
3,677,942


Note F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, 2000 were as follows (in thousands):

Commitments to extend credit

$
641,605Letters of credit


20,272


8

---

Note GSUBORDINATED NOTES

Long-term debt at June 30, 2000 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, 2000, $36 million qualified as Tier 2 capital.

Note H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):

June 30, 200035% of pretax income

$
19,339State income tax, net of federal tax benefit


968Tax-exempt interest


(2,280
)Amortization of goodwill


459Other


(156
)Provision for income taxes

$
18,330


Note ISUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended June 30 (in thousands)

2000

1999Unrealized loss on available-for-sale securities

$
4,860

$
67,424


9

---

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, 2000 and December 31, 1999, and its results of operations for
the three and six month periods ended June 30, 2000 and 1999.

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

Date of Acquisition

Location and/or Name of
Main Office of Acquired Entity

Number of
Locations at
Date of Acquisition

Total Assets at
Date of Acquisition
(in millions)December 1999

Ramsey, Minnesota

1

$
35October 1999

El Cajon, California

6


252


On
December 21, 1999, the Company issued approximately 317,000 shares of common stock to acquire River Bancorp, Incorporated ("River Bancorp"), a one-bank holding
company headquartered in Ramsey, Minnesota. At acquisition, River Bancorp had approximately $35 million in assets at one office in Ramsey, Minnesota. Because this acquisition was not material
to the Company's financial condition or operating results, the Company's financial information has not been restated to reflect this merger.

On
October 7, 1999, the Company issued approximately 3,022,000 shares of common stock to acquire Valley National Corporation ("Valley National"), a one-bank holding
company headquartered in El Cajon, California. At acquisition, Valley National had approximately $252 million in assets at six banking offices located in California. The acquisition was
accounted for using the pooling of interests method. The Company's consolidated financial information has been restated to reflect this merger.

Overview

For the three months ended June 30, 2000 net income was $18.3 million, a decrease of $942,000, or 4.9%, from the $19.2 million earned
during the 1999 period. The Company's basic earnings per common share for the second quarter of 2000 were $0.38, the same as the second quarter in 1999. Diluted earnings per common share for the
second quarter of 2000 were $0.38.

Return
on average assets was 1.18% for the second quarter of 2000, compared to 1.23% for the 1999 period. Return on average common shareholders' equity for the 2000 period was 19.46%,
compared to 18.09% in the 1999 period.

For
the six months ended June 30, 2000, net income was $36.9 million, a decrease of $534,000 or 1.4% from the $37.5 million during the 1999 period. Basic earnings
per common share for the six months ended June 30, 2000 were $0.75, the same as in 1999. Diluted earnings per share for the six months ended June 30, 2000 were $0.75.

Return
on average assets and return on common equity for the six months ended June 30, 2000 were 1.19% and 18.98%, respectively, as compared to the 1999 ratios of 1.21% and
17.81%. The decrease in return on assets is principally due to a reduction in net income, while the increase in return on equity is

10

---

principally due to a reduction in average common shares outstanding as a result of the Company's stock repurchase initiative.

Results of Operations



Net interest income for the three months ended June 30, 2000 was $67.3 million, a decrease of $2.8 million, or 4.0%, from the net interest
income of $70.1 million earned during the 1999 period. The decrease was principally due to the increase in interest expense associated with a rising interest rate environment. The net interest
margin of 4.90% for the period ended June 30, 2000 was down from 5.08% for the 1999 period.

Net
interest income for the six months ended June 30, 2000 was $135.8 million, a decrease of $3.5 million or 2.5% from the $139.3 million during the 1999
period.



The provision for loan losses for the three months ended June 30, 2000 was $3.8 million, a decrease of $2.5 million, or 39.7%, from the
$6.3 million provision during the 1999 period. This decrease reflects the Company's objective of maintaining adequate reserve levels. The second quarter of 1999 included additional reserve
allocations related to selected credits at the Company's Colorado affiliate.



Noninterest income for the three months ended June 30, 2000 was $19.0 million, the same as the 1999 level. Deposit service charges increased
$1.5 million and insurance commissions increased $456,000 from the prior year. The second quarter of 1999 included $1.3 million in net gains of the sale of
available-for-sale securities.

Noninterest
income for the six months ended June 30, 2000, was $37.5 million, an increase of $2.1 million, or 5.9% from the 1999 level of $35.4 million.
The increase was principally due to a $3.1 million increase in service charges on deposits and an $893,000 increase in insurance commissions during the 2000 period. Gains on the sale of
available-for-sale securities decreased $1.6 million from the first six months of 1999.



Noninterest expense for the three months ended June 30, 2000 was $55.1 million, an increase of $1.1 million, or 1.9%, from the level of
$54.0 million during the 1999 period. The increase was limited in part due to the Company's continued emphasis on cost reduction initiatives implemented during 1999. As a result, for the three
months ended June 30, 2000 salary and benefits increased $1.5 million and other professional services decreased $429,000 while most other categories experienced only minor changes.

Noninterest
expense for the six months ended June 30, 1999 was $109.2 million, an increase of $2.2 million, or 2.1% from the $107.0 during the 1999 period. The
increase was principally due to a $2.2 million increase in salary and employee benefit expense. The increase was limited in part as a result of cost reduction initiatives implemented during
1999.



The provision for income taxes for the three months ended June 30, 2000 was $9.1 million, a decrease of $302,000, or 3.2%, from the 1999 level of
$9.5 million, due primarily to the decrease in pre-tax income during the current period.

11

---

The provision for income taxes for the six months ended June 30, 2000 was $18.3 million, a decrease of $652,000 from the $19.0 million during the 1999 period. The
decrease is principally due to the reduction in pre-tax income.

Financial Condition



Total loans were $3.7 billion at June 30, 2000 and at December 31, 1999.

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

|                               |                          | June 30, 2000 |           | December 31, 1999 | 
|------------------------------ | ------------------------ | ------------- | --------- | ----------------- | 
|
|
|Loan category:                 |                          |               |           |                   | 
|                               | Real estate              |               | $         | 1,422,874         | 
|                               | Real estate construction |               |           | 427,924           | 
|                               | Commercial               |               |           | 926,400           | 
|                               | Consumer and other       |               |           | 688,936           | 
|                               | Agricultural             |               |           | 263,363           | 
|                               |                          |               |           |                   | 
|                               | Total loans              |               |           | 3,729,497         | 
|                               |                          |               |           |                   | 
|Less allowance for loan losses |                          |               | (51,555   | )                 | 
|                               |                          |               |           |                   | 
|Total                          |                          | $             | 3,677,942 |                   | 
|                               |                          |               |           |                   | 



At June 30, 2000, nonperforming assets were $31.9 million, a decrease of $713,000 or 2.2% from the $32.6 million level at
December 31, 1999. The decrease was principally due to a decrease of $1.4 million in other real estate owned, partially offset by an increase of $709,000 in nonaccrual loans. At
June 30, 2000, nonperforming loans as a percent of total loans were .72%, slightly higher than the December 31, 1999 level of .71%. Other real estate owned was $5.1 million at
June 30, 2000, down from $6.5 million at December 31, 1999.

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

June 30, 2000

December 31, 1999Loans:Nonaccrual loans

$
26,473

$
25,764Restructured loans


272


284Nonperforming loans


26,745


26,048Other real estate owned


5,115


6,525Nonperforming assets

$
31,860

$
32,573Loans 90 days or more past due but still accruing

$
2,489

$
1,949Nonperforming loans as a percentage of total loans


.72
%

.71
%Nonperforming assets as a percentage of total assets


.51
%

.52
%Nonperforming assets as a percentage of loans and Other real estate owned


.85
%

.88
%Total Loans


3,729,497


3,690,353Total Assets


6,278,718


6,302,235


12

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At June 30, 2000 the allowance for loan losses was $51.6 million, an increase of $2.7 million from the December 31, 1999 balance of
$48.9 million. Net charge-offs during the three months ended June 30, 2000 were $7.7 million less than those incurred during the three months ended June 30,
1999, principally as a result of nonbank group specialty lending charge-offs recorded in the second quarter of 1999.

At
June 30, 2000 the allowance for loan losses as a percentage of total loans was 1.38%, an increase from the June 30, 1999 level of 1.37%. During the three months ended
June 30, 2000, net charge-offs decreased to $3.1 million. These charge-offs reflect the Company's continued periodic review of the existing loan portfolios.

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

June 30,(Dollars in thousands)

2000

1999Balance at beginning of period

$
50,832

$
53,254Charge-offs:

Real estate


312


497Real estate construction





2,602Commercial


2,086


1,470Consumer and other


1,686


7,386Agricultural


294


(12
)Total charge-offs


4,378


11,943Recoveries:

Real estate


47


79Real estate construction


1


Commercial


496


125Consumer and other


680


753Agricultural


66


246Total recoveries


1,290


1,203Net charge-offs


3,088


10,740Provision charged to operations


3,811


6,348Balance at end of period

$
51,555

$
48,862Allowance as a percentage of total loans


1.38
%

1.37
%Annualized net charge-offs to average loans outstanding


0.33
%

1.22
%Total Loans


3,729,497


3,557,830Average Loans


3,713,618


3,517,783




The investment portfolio, including available-for-sale securities and held-to-maturity securities, was
$1.9 billion at June 30, 2000, a decrease of $64.7 million, or 3.2% from December 31, 1999. At June 30, 2000, the investment portfolio represented 31.0% of total
assets, compared with 31.9% at December 31, 1999. In addition to investment securities, the Company had investments in interest-bearing deposits of $2 million at June 30, 2000, a
$3 million decrease from the $5 million at December 31, 1999.



Total deposits were $5.0 billion at June 30, 2000, an increase of $71 million, or 1.4% from the $4.9 billion at December 31,
1999. Noninterest-bearing deposits at June 30, 2000 were $684 million, an increase of $67 million, or 10.9%, from $617 million at December 31, 1999. The Company's
core deposits as a percent of total deposits were 84.7% and 86.7% as of June 30, 2000 and December 31, 1999,

13

---

respectively. Interest-bearing deposits were $4.3 billion at June 30, 2000, a decrease of $5 million from the $4.3 billion at December 31, 1999.



Short-term borrowings of the Company were $453 million as of June 30, 2000, and $472 million as of December 31, 1999.

Long-term
debt of the Company was $100 million as of June 30, 2000, an increase of $24 million, or 31.6%, from the $76 million as of
December 31, 1999.



Shareholders' equity decreased $58 million to $349 million at June 30, 2000, from $407 million at December 31, 1999. The
decrease was principally due to the Company's common stock repurchase activity during the second quarter. At June 30, 2000, the Company's Tier 1 capital, total risk-based capital
and leverage ratios were 8.90%, 10.86%, and 6.40%, 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, 2000, the Company had risk-weighted assets of $4.5 billion.



On April 10, 2000, the Company announced its intention to repurchase up to 5 million shares of the Company's common stock. As of July 26,
2000, the Company has repurchased 4,997,209 shares of common stock at prices ranging from $15.25 to $17.71. On August 9, 2000, the Company announced its intention to repurchase up to an
additional 5 million shares of the Company's common stock.

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, 1999
in the Company's Form 10-K and Annual Report.

14

---

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 25, 2000. The shareholders took the following actions:
|        |  | (i)                                                                                                                
|        |  |                                                                                                                    

Votes For

Votes WithheldMark A. Anderson

37,950,827

3,455,670Patrick E. Benedict

41,100,172

306,325Patrick Delaney

40,862,857

543,640John H. Flittie

41,102,307

304,190Darrell G. Knudson

41,103,399

303,098Dennis M. Mathisen

41,101,973

304,524Donald R. Mengedoth

41,103,128

303,369Marilyn Seymann

40,941,010

465,487Thomas C. Wold

41,104,597

301,900Harvey L. Wollman

41,102,503

303,994


|        |  | (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. 41,186,471 votes were cast for the resolution; 181,216 votes were cast against the
resolution; and 38,810 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.                                                                                                                                                                                                                                                                                 
|        |  |                                   |  |                                                                                                                                                                                                                                                                                       

15

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## 

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 10, 2000 | /s/MARK A. ANDERSONMark A. Anderson President and Chief Executive Officer
|Date: August 10, 2000 | /s/CRAIG A. WEISSCraig A. Weiss Chief Financial Officer                  

16

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