FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                   [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the Fiscal Year Ended March 31, 2001
                    ----------------------------------------


                 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the transition period from _______to_______.


                          Commission File No. 000-18887
                          -----------------------------



                             COLONIAL TRUST COMPANY
                             ----------------------
                 (Name of small business issuer in its charter)

                    Arizona                        75-2294862
                    -------                        ----------
            (State of Incorporation) (IRS Employer Identification Number)


                               5336 N. 19th Avenue
                             Phoenix, Arizona 85015
                             ----------------------

                    (Address of principal executive offices)

                                  602-242-5507
                                  ------------
                           (Issuer's telephone number)



Securities registered under Section 12(b) of the Exchange Act:
None
----

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, no par value
--------------------------



<PAGE> 2



     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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
----------------

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.
----------------
 [x]
----------------


     Issuer's revenues for its most recent fiscal year: $4,224,455.


     The aggregate  market value of the Common Stock held by  non-affiliates  of
the Registrant was $2,333,191 as of June 1, 2001.


     As of June 1, 2001,  732,290 shares of the  Registrant's  Common Stock were
outstanding.


<PAGE> 3



                                TABLE OF CONTENTS

                                                                         Page

PART I

           Item  1:  Description of Business                             4

           Item  2:  Description of Properties                           13

           Item  3:  Legal Proceedings                                   13

           Item  4:  Submission of Matters to a Vote of
                     Security Holders                                    14



PART II

           Item  5:  Market for Common Equity and Related
                     Stockholder Matters                                 14

           Item  6:  Management's Discussion and Analysis
                     or Plan of Operation                                15

           Item  7:  Financial Statements                                26

           Item  7.a:Qualitative Risks                                   43

           Item  8:  Changes in and Disagreements with
                     Accountants on Accounting and
                     Financial Disclosure                                43



PART III

           Item  9:  Directors, Executive Officers, Promoters
                     and Control Persons; Compliance with
                     Section 16(a) of the Exchange Act                   43

           Item 10:  Executive Compensation                              46

           Item 11:  Security Ownership of Certain Beneficial
                     Owners and Management                               50

           Item 12:  Certain Relationships and Related
                     Transactions                                        52

           Item 13:  Exhibits and Reports on Form 8-K                    52




<PAGE> 4


                                     PART I


Item 1.    Description of Business.


           Forward Looking Statements

     This report contains forward looking statements. Additional written or oral
forward  looking  statements  may be made by the  Company  from  time to time by
filings with the Securities and Exchange  Commission or otherwise.  Such forward
looking  statements  are within the  meaning of that term in Section  27A of the
Securities Act of 1993, as amended (the  "Securities  Act"),  and Section 21E of
the  Securities  Exchange Act of 1934,  as amended (the  "Exchange  Act").  Such
statements may include,  but not be limited to, projection of revenues,  income,
or loss,  estimates  of  capital  expenditures,  plans  for  future  operations,
products or  services,  and  financing  needs or plans,  as well as  assumptions
relating  to  the  foregoing.  The  words  "believe",  "expect",   "anticipate",
"estimate",   "project"  and  similar   expressions   identify  forward  looking
statements,  which  speak only as of the date the  statement  was made.  Forward
looking statements are inherently  subject to risks and  uncertainties,  some of
which cannot be predicted or quantified.  Future events and actual results could
differ  materially from those set forth in,  contemplated  by, or underlying the
forward  looking  statements.  The Company  undertakes no obligation to publicly
update or revise  any  forward  looking  statements,  whether as a result of new
information,  future events, or otherwise. The following disclosures, as well as
other  statements  in this Report on Form 10-KSB,  including  but not limited to
those contained  below in "Item 1:  Description of  Business-Growth  Plans," and
"Item 6:  Management's  Discussion and Analysis or Plan of Operation,"  describe
factors,  among others,  that could contribute to or cause such differences,  or
that could affect the Company's stock price.


           General

     Colonial Trust Company (the "Company") was  incorporated  under the laws of
the State of Arizona on August 15, 1989. The business  operations of the Company
commenced  on  September  11, 1989.  From the time of its  organization  through
September 30, 1990,  the Company was a  wholly-owned  subsidiary of Church Loans
and Investments Trust ("Church  Loans"),  a real estate investment trust located
in Amarillo,  Texas. On October 1, 1990, all of the capital stock of the Company
was distributed to the stockholders of Church Loans on the basis of one share of
common  stock of the Company for each share of Church  Loans stock owned on such
date.

<PAGE> 5


           Business Segments

     The  Company  currently  has two  business  segments:  Corporate  Trust and
Personal Trust. The Corporate Trust segment provides services  including serving
as custodian for individual retirement accounts ("IRA Accounts") and trustee for
bond  offerings  of churches  and other  non-profit  organizations.  The Company
presently  is  primarily  engaged in serving as trustee and paying agent on bond
programs of churches and other non-profit organizations.  From time to time, the
Company  serves as trustee  and/or  paying agent on bond  programs of for-profit
organizations.   Through  its  Personal  Trust  segment,  the  Company  provides
traditional  investment  management,  administration  and custodial services for
customers  with trust  assets.  This segment also serves as trustee or custodian
for IRA Accounts.



           Corporate Trust Segment
           -----------------------

           Bond Offering Services

     Historically,  the Company's  primary  business has been serving as trustee
and  paying  agent  for  bond   offerings  of  churches  and  other   non-profit
organizations.  The  majority  of  these  bonds  are sold by  broker-dealers  in
offerings that are exempt from  registration  under federal and state securities
laws.

     In its capacity as trustee for bond offerings of non-profit  organizations,
the Company receives  proceeds from the sale of the bonds and distributes  those
proceeds  according to the purposes of the bond  offering.  The Company  invests
such proceeds in U.S. Treasury Obligation Money Market Mutual Funds according to
the terms of the Company's investment policy and the applicable trust indenture.
The Company also receives periodic sinking fund payments  (payments of principal
and interest on the bonds by the non-profit  organizations,  typically made on a
weekly basis) on their  respective  due dates.  In its capacity as paying agent,
the Company  distributes the sinking fund payments to bondholders  pursuant to a
trust  indenture  between  the  Company  and  the  non-profit  organization.  In
instances in which a bondholder  has  transferred  ownership of a bond for which
the Company is serving as paying agent, the Company serves as transfer agent and
effects the transfer of such bond between the former and current bondholder.  If
the non-profit organization defaults under the terms of the trust indenture, the
Company  forecloses on the property securing the payment of the bonds (typically
real estate and related improvements owned by the non-profit organization,  such
as a church),  attempts to sell the property,  and  thereafter  distributes  the
proceeds (if any) received from the foreclosure sale to bondholders.

<PAGE> 6


     The Company is compensated  for its services as trustee and paying agent in
one of three ways.  The first fee  structure  allows the Company to invest trust
funds held for  disbursement  and retain the gains and earnings  therefrom.  The
second fee structure requires the issuing institution to pay a percentage of the
bond proceeds to the Company for set-up and bond printing costs during the first
year.  Additionally,  an annual maintenance fee is required each year. The third
fee  structure  entitles  the Company to  interest  earnings up to 2.5% of daily
trust  funds held in bond  proceeds  accounts  in lieu of a set-up  fee.  Annual
maintenance  fees and bond  printing  costs are charged as a  percentage  of the
related bond issue.  The Company's  policy is to allow the non-profit  issuer to
choose between the three fee structures. The Company believes that the third fee
structure is currently utilized by a majority of the Company's competitors.  The
Company  also  receives  a $10 per  transaction  fee in  instances  in which the
Company serves as transfer agent.

     As of March 31,  2001,  the Company had served as trustee and paying  agent
for 771 bond offerings totaling approximately $689 million in original principal
amount.  The  foregoing  includes  a total  of 63  bond  offerings  in  original
principal  amount of  approximately  $66 million  originated  in the fiscal year
ended March 31, 2001. The Company's  revenues from these activities  represented
approximately 58% of the Company's  aggregate  revenues for the year ended March
31, 2001. See "Item 6-Management's  Discussion and Analysis or Plan of Operation
- Results of Operations-Results of Operations for the Years Ended March 31, 2001
and 2000."

     As of March 31, 2001,  all bond  programs for which the Company was serving
as trustee and paying agent had been  originated by twenty  broker/dealers,  and
four of those broker/dealers had originated bonds representing approximately 77%
of the aggregate principal amount of all bonds for which the Company was serving
as trustee and paying agent. For the year ending March 31, 2001,3 broker-dealers
had originated 94% of the aggregate  principal amount of all new bond issues for
the year.  The Company's  ability to generate bond  servicing  fees is dependent
upon the ability of  broker/dealers  to originate  bond offerings for non-profit
organizations  and the Company's  ability to maintain or develop a  relationship
with broker/dealers who are successful in originating such bond offerings.

     The  Company  is  attempting  to  procure  additional   business  from  the
broker/dealers  with whom the Company currently has a relationship,  and is also
attempting   to  develop   relationships   with  and   procure   business   from
broker/dealers  with whom the Company does not  currently  have a  relationship.

<PAGE> 7


           IRA Services

     The  Company  also serves as trustee  for IRA's.  As  trustee,  the Company
receives all  contributions  to these  accounts,  invests the  contributions  as
directed by the account  participant  and  distributes the funds of the accounts
pursuant to the terms of each individual  account.  For its services as trustee,
the Company  receives an annual base fee of $40 and a transaction  fee of $5 per
transaction  for each  transaction  in excess of 12 per year.  The Company  also
retains,  as a portion  of its fee,  earnings  up to 2% of the daily  uninvested
balance in each IRA Account.

     At March 31,  2001,  the Company  was serving as trustee for  approximately
9,710 IRA's with an aggregate value of approximately $170 million.  Revenue from
the  Company's  activities  in this area  represented  approximately  13% of the
Company's  aggregate  revenues  for the year  ended  March 31,  2001.  See "Item
6-Management's  Discussion  and  Analysis  or Plan of  Operation  -  Results  of
Operations for the Years Ended March 31, 2001 and 2000."

     The majority of the IRA's  serviced by the Company have been  originated by
the broker/dealers who originate the bond offerings for which the Company serves
as  trustee  and  paying  agent.  Currently,  there are a limited  number of IRA
trustees who allow church bonds as an investment in their IRA's. The Company has
been able to grow its IRA servicing business primarily through marketing efforts
directed  at the  broker/dealers  with  whom the  Company  has a bond  servicing
relationship.

     The  Company  intends to attempt to grow this  business  primarily  through
marketing efforts directed at non-profit organizations.


           Personal Trust Segment
           ----------------------

     The Personal  Trust segment  provides  traditional  investment  management,
administration   and  custodial   services  for  customers  with  assets  (cash,
securities,  real  estate  or other  assets)  held in trust or in an  investment
agency account.  It also serves as custodian for self-directed IRA's and trustee
for managed  IRA's.  At March 31, 2001,  the Personal  Trust  segment  served as
trustee or agent for 580 trust,  other accounts,  or investment  agency accounts
with a fair market value of approximately $149 million,  and served as custodian
or trustee for approximately 230 IRA's with a fair market value of approximately
$47 million.

<PAGE> 8

     The Personal Trust segment generates  revenues based on two fee structures.
The first fee structure  represents a percentage  of the fiduciary  assets which
the Company  holds as trustee or agent.  Fees are assessed on a monthly basis to
individual  accounts  according  to the prior month end fair market  value.  The
second fee structure  relates to an annual  minimum fee that was  established to
cover the  maintenance  of  fiduciary  assets  Colonial  holds in both trust and
self-directed  IRA's.  Minimum fees are assessed  monthly based on 1/12th of the
published annual minimum.

     The Personal  Trust  segment is party to an investment  advisory  agreement
dated  December  1998  with  Hackett  Investment  Advisors,   Inc.  ("HIA"),  an
investment advisor located in Scottsdale,  Arizona.  Pursuant to this agreement,
this  business  segment  designates  HIA,  and HIA  serves for the  Company,  as
investment advisor on a portion of the investment accounts of the Personal Trust
segment.  HIA  further  refers  to  the  Personal  Trust  segment  all  business
opportunities  for which an  independent  corporate  fiduciary  is  necessary or
appropriate. The Personal Trust segment pays HIA 30% of the gross fees collected
by the Company from the segment's  investment  management accounts receiving HIA
advisory services.  The basic term of the agreement with HIA expired on December
31, 2000 and is presently continuing on a month to month basis.

     The  Personal  Trust  segment  is  also  party  to an  investment  advisory
agreement dated January 2, 1997 with Wright Investors  Services ("WIS").  WIS is
an  investment  advisor  located in  Bridgeport,  Connecticut.  Pursuant to this
agreement,  this segment  designates  WIS,  and WIS serves for the  segment,  as
investment  advisor on a portion of the  designated  investment  accounts of the
Personal Trust segment. The Company pays WIS 30% or 10%, depending upon the type
of  account,  of the gross fees  collected  by the  segment  from the  segment's
investment  management accounts for which WIS serves as investment advisor.  The
agreement  initially ran through  January 31, 1998. The agreement  automatically
renews for subsequent  terms of one year each,  unless either party notifies the
other in writing at least three months in advance of the anniversary date of its
intent to terminate the agreement.  The agreement has been renewed and continues
in effect until January 31, 2002.

     The  Personal  Trust  segment  is  also  party  to an  investment  advisory
agreement dated August 16, 1999 with Feldman Securities Group,  L.L.C.  ("FSG").
FSG is an  investment  advisor  located in Chicago,  Illinois.  Pursuant to this
agreement,  this segment  designates  FSG,  and FSG serves for the  segment,  as
investment  advisor on a portion of the  designated  investment  accounts of the
Personal  Trust  segment.  The Company  pays FSG 28% of the fees  collected  for
managed  assets up to $10 million in the  aggregate.  For every  subsequent  $10
million  increment  in  managed  assets,  the fee the  Company  pays  drops by 2
percentage  points.  Currently,  the  Company  is  paying  FSG  28% of the  fees
collected on accounts  managed by FSG. The  agreement  runs  continuously  until
either  party  gives the other at least  thirty  days  notice in  writing of its
intent to terminate the agreement.


<PAGE> 9


     The profitability of the Personal Trust segment is largely dependent on the
Company's ability to manage its trust accounts. Revenues from the Personal Trust
segment represented  approximately 27% of the Company's aggregate gross revenues
for the year  ended  March 31,  2001.  See  "-Growth  Plans"  and  "Management's
Discussion  and  Analysis or Plan of Operation - Results of  Operations  for the
Years Ended March 31, 2001 and 2000."


           Growth Plans

     The  Company  intends to attempt to expand its  non-profit  bond  servicing
operations,  its  IRA  servicing  operations,  and  its  traditional  trust  and
investment agency servicing operations. Although the Company may make additional
acquisitions in the event  opportunities  arise on favorable  terms, the Company
anticipates that expansion will result primarily from internal development.

     The Company  intends to (i) attempt to expand its non-profit bond servicing
operations by  attempting  to increase the number of bond  offerings it services
which are  initiated  by  broker/dealers  with whom the  Company has an existing
relationship,   and  (ii)  attempt  to  develop  relationships  with  additional
broker/dealers  from whom the Company  will receive  bond  servicing  referrals.
However,  notwithstanding  its efforts,  the Company  anticipates  that its bond
servicing  revenues  will  decrease  in the fiscal  year  ending  March 31, 2002
compared to its revenues from such activities in the fiscal year ended March 31,
2001 due to a decrease in the number and principal  amount of new bond offerings
anticipated  to be originated in the upcoming  fiscal year for which the Company
will serve as  trustee  and  paying  agent.  See  "Management's  Discussion  and
Analysis or Plan of Operation - Results of Operations  for the Years Ended March
31, 2001 and 2000."

     The Company intends to attempt to expand its IRA servicing business through
attempting  to  develop  relationships  with new  broker/dealers  with  whom the
Company has not  previously had a  relationship.  There may be no assurance that
the  Company  will be  successful  in its  efforts  to  increase  IRA  servicing
revenues.  See  "Management's  Discussion  and  Analysis or Plan of  Operation -
Results of Operations for the Year Ended March 31, 2001 and 2000."

     The Company also intends to attempt to expand its traditional trust account
and investment  agency account business by (i) attempting to procure  additional
business from lawyers,  accountants and other trust professionals in the Phoenix
area with whom the Company has an existing relationship,  and (ii) attempting to
develop  relationships  with additional trust  professionals in the Phoenix area
who will serve as referral  sources for the Company.  There may be no assurances
that the Company will be successful in its efforts to increase trust account and
investment agency account servicing revenues.  See "Management's  Discussion and
Analysis or Plan of Operation - Results of Operations  for the Years Ended March
31, 2001 and 2000."


<PAGE> 10


     The foregoing  discussion entitled "Growth Plans" contains  forward-looking
statements  within the meaning of Section 27A of the  Securities Act and Section
21E of the  Securities  Exchange  Act of 1934 and is subject to the safe harbors
created thereby.  The Company's actual future operations could differ materially
because  of  the  following  factors,  among  others:  the  Company's  continued
involvement in each of its current business segments;  the continued  employment
of key management; the Company's success in marketing its existing relationships
with  broker/  dealers who can serve as referral  sources for the  Company;  the
Company's success in developing additional relationships with broker/dealers who
can serve as new sources of referrals for the Company;  the  continuation of the
Company's  investment  advisory  agreements  with  WIS,  FSG,  and HIA and their
success in managing  the trust and IRA's for which they  provide  services;  the
Company's  ability to recover  the costs it has  incurred  and will incur in the
future in connection with the bankruptcy  proceeding of Stevens Financial Group,
Inc. ("Stevens"), which costs total approximately $160,000 through May 31, 2001;
whether one or more parties will assert  claims or institute  legal  proceedings
against the Company  related to the Company's  services as indenture  trustee on
the Stevens  bond  offerings;  no material  changes in existing  laws,  rules or
regulations  affecting  the  Company's  operations;   the  Company's  successful
performance of its duties as trustee and/or paying agent on bond  offerings,  as
trustee for IRA's,  and as manager,  administrator  and  custodian for trust and
investment agency accounts;  competitive factors,  such as increased competition
for the Company's  services in one or more of the above  business  segments;  an
increase in interest rates or other economic factors having an adverse impact on
the Company's  non-profit bond servicing business and other factors set forth in
"Management's Discussion and Analysis or Plan of Operation."


           Competition

     The Company's primary competitors in the non-profit bond servicing business
are Reliance Trust Company, Herring National Bank, American Church Trust Company
and Trust  Management  Inc. Some of these companies have  significantly  greater
financial  and other  resources  than the  Company.  Increased  success by these
competitors  or  increased  competition  from  additional  sources  could have a
material  adverse  effect on the  Company's  financial  condition and results of
operations.

<PAGE> 11


     Competition in the IRA servicing business is intense.  However, to date the
Company has focused its efforts on procuring IRA Account servicing business from
non-profit   organizations  and  their  members.  Thus,  the  Company's  primary
competition  comes from the  relatively  small number of trustees who will allow
church bonds as a self-directed investment. The Company's primary competitors in
this business  include  Reliance Trust  Company,  American  Church Trust,  Trust
Management  Inc.  and,  to a lesser  extent,  broker/dealers,  banks  and  other
financial  institutions,  investment advisors,  money management firms and other
trust companies,  many of which have  significantly  greater financial and other
resources than the Company.

     The Company  competes with the trust  departments of large banks (and other
financial  institutions)  and, to a lesser extent,  with other independent trust
companies for trust account and investment agency account business. Although the
Company has focused its efforts on trust  accounts  which are smaller than those
typically  serviced by large  banks,  increased  competition  by large banks for
these accounts and/or  increased  success by other  independent  trust companies
could have a material  adverse impact on the Company's  financial  condition and
results  of  operations.  The large  banks,  and some of the  independent  trust
companies located in the Phoenix area, have significantly  greater financial and
other resources than the Company.

           Regulation, Licensing and Supervision

     The Company's  operations are subject to ongoing regulation,  licensing and
supervision  under various  federal,  state and local  statutes,  ordinances and
regulations,  including but not limited to regulation by the Arizona  Department
of Banking.  Under applicable rules and regulations of the Arizona Department of
Banking,  the Company files periodic  reports with the Department and is subject
to periodic examinations of that Department.

     Under  Arizona  law,  the Company is required to maintain net capital of at
least $500,000; the Company's net capital was approximately  $2,700,000 on March
31, 2001.  Arizona law also requires that $500,000 of such net capital must meet
the  Department's  liquidity  requirements.  At March 31, 2001,  $515,831 of the
Company's net capital met the Department's liquidity  requirements.  The Company
has satisfied these liquidity  requirements and believes that it will be able to
maintain its  compliance  with these  requirements  from existing cash balances,
from anticipated cash flow from operating  activities,  and from funds available
under the Company's Master Demand Note with its former parent,  Church Loans and
Investments  Trust.

     Under  legislation  which  will  become  effective  on  August  9, 2001 and
applicable  to the  Company on  December  31,  2002,  the Company may in certain
circumstances  be  required  to  maintain  additional  capital  in excess of the
capital requirements described immediately above. Specifically, the Company will
be required to have  additional  capital of $250,000  for every $750  million of
"nondiscretionary  assets" and  additional  capital of  $250,000  for every $250
million of "discretionary assets." The term "nondiscretionary assets" is defined
as "...  those assets in which the trust  company must obtain from the customer,
broker or investment advisor specific direction and instructions  regarding both
investment  strategies  and  investment  executions."  The  term  "discretionary
assets" is  defined  as "...  those  assets in which the trust  company  has the
unilateral authority to determine  investment  strategies and execute investment
transactions  without  seeking the  concurrence,  approval or authority from the
customer or any other external party.  Additionally,  this legislation  requires
that any trust  company  whose most  recent  composite  rating  from the Arizona
Banking  Superintendent was "four" as defined in the revised uniform interagency
trust rating system must maintain an  additional  $250,000 in capital,  and that
any trust company whose most recent  composite  rating from the Arizona  Banking
Superintendent  was a "five" as defined in the above rating system must maintain
an additional  $500,000 in capital.  One-half of any additional capital required
by such legislation must be "liquid capital."

<PAGE> 12


     The Company believes that  approximately $310 million of the funds which it
held in the ordinary course of business at March 31, 2001 would be classified as
"non-discretionary"  assets and approximately $102 million of the funds which it
held in the ordinary  course of business at March 31, 2001 would be described as
"discretionary" assets. The Company also does not believe that its discretionary
or its  non-discretionary  assets  will  grow in the  foreseeable  future to the
levels which will require additional capital. However, there may be no assurance
that the Arizona Banking Department will agree with the Company's classification
of its assets as non-discretionary or discretionary,  and to date no regulations
or  interpretations  concerning these provisions have been issued by the Arizona
Banking Department.  Additionally, although the Company does not believe that it
is likely  to  receive a "four" or  "five"  composite  rating  from the  Arizona
Banking  Superintendent in the foreseeable future,  there may be no assurance in
this regard.

     In the event the Company is required to have additional capital,  including
additional  liquid capital,  the Company  believes that this  requirement can be
satisfied from funds  available  under the Master Demand Note and cash flow from
operations.

     Arizona law also  requires the Company to maintain a fidelity  bond against
dishonesty, fraud, theft, embezzlement and other similar insurable losses. Under
legislation  which will become  effective on August 9, 2001,  this fidelity bond
must be in the minimum  amount of $2.1  million.  Arizona law also  requires the
Company to maintain  errors and omissions  insurance of at least  $500,000.  The
fidelity  bond and the errors and omissions  insurance  must also be adequate in
relation to the Company's potential  exposure.  The Company believes that it has
been in compliance  with these  requirements  to date and will continue to be in
compliance with these  requirements  in the future,  including the fidelity bond
requirements imposed by the new legislation.

<PAGE> 13


     In addition to the above requirements,  the Arizona Banking Department also
retains  broad  discretion  to suspend or revoke  the  certificate  of any trust
company  subject  to  its  jurisdiction   (including  the  Company)  in  certain
circumstances,  including (i) the trust  company's  violation of any  applicable
law, rule or order,  (ii) the trust company's  failure to conduct  business in a
safe,  sound and lawful manner,  or (iii) upon the occurrence of any other event
set forth in Arizona Revised Statutes Section 6-864.

     In the event the Company is unable to  maintain  its  certificate  with the
Arizona  Department  of Banking,  the Company could be forced to attempt to move
its operations to another state, to discontinue  its operations,  or to pursue a
merger or other business combination.


           Employees

     At March 31, 2001,  the Company  employed 47 people.  None of the Company's
employees  are  covered  by  a  collective  bargaining  agreement.  The  Company
considers its relations with its employees to be good.




Item 2.    Description of Properties.

     On March 15, 1995, the Company purchased an office building located at 5336
N. 19th Avenue in Phoenix,  Arizona. The building is approximately 10,000 square
feet in size and serves as the Company's executive offices.


Item 3.    Legal Proceedings.

     The Company is a party to various legal proceedings arising in the ordinary
course of business. While it is not feasible to predict the ultimate disposition
of these matters, in the opinion of management their outcome,  with the possible
exception of the event mentioned below,  will not have a material adverse effect
on the financial condition or results of operations of the Company.

     On March 19,  2001,  Stevens  Financial  Group,  Inc.  ("Stevens")  filed a
Voluntary  Petition under Chapter 11 of the United States Bankruptcy Code in the
United  States   Bankruptcy   Court  for  the  District  of  Arizona  (Case  No.
01-03105-ECF-RTB) (the "Stevens Bankruptcy  Proceeding").  The Company serves as
Trustee under seven Trust Indentures  which secure  obligations of Stevens under
certain Time Certificates and Fixed Rate Investments (debt instruments). Stevens
has defaulted on all outstanding debt instruments. Based on information provided
to the Company to date, the aggregate  principal  amount of the outstanding debt
instruments is  approximately  $64 million,  and accrued and unpaid  interest on
these debt instruments through March 19, 2001 (the date of the initiation of the
Stevens Bankruptcy Proceeding) is approximately $13.5 million.


<PAGE> 14


     To date, no legal  proceedings  are pending  against the Company related to
the Stevens Bankruptcy Proceeding or the Company's services as Indenture Trustee
under the above-referenced  Trust Indentures.  However, the Company has incurred
costs and expenses of approximately  $160,000 through May 31, 2001 in connection
with the  Stevens  Bankruptcy  Proceeding.  The Company  will  continue to incur
additional costs and expenses related to this matter for the foreseeable future.
Such costs and  expenses  may be  material,  and the  Company may not be able to
recover such costs in the Stevens Bankruptcy Proceeding. In the event such costs
and  expenses  are  material  and the Company  does not recover  those costs and
expenses,  this would have a material adverse effect on the Company's  financial
condition  and results of  operations.  Additionally,  claims may be asserted or
litigation  may be  initiated  against  the  Company  relating to its service as
Indenture Trustee under the Stevens Trust Indentures.



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

     None.


                                     Part II


Item 5.    Market for Common Equity and Related Stockholder Matters.

     On June 1, 2001,  the  Company  had  approximately  1,719  stockholders  of
record.  There is no established  public trading market for the Company's Common
Stock.  The Company does not expect to pay dividends in the  foreseeable  future
but instead intends to retain future earnings, if any, to increase stockholders'
equity and to satisfy  the  capital and  liquidity  requirements  of the Arizona
Banking Department. See "Business-Regulation, Licensing and Supervision".

     On September 24, 1998,  the Company's  stockholders  approved a one-for-ten
reverse stock split of the Company's  issued and outstanding  common stock.  All
share  amounts,  share  prices and  earnings  per share have been  retroactively
adjusted for all periods presented to reflect this reverse split.


<PAGE> 15


     Initial  purchases  and sales of the  Company's  Common  Stock  occurred in
January 1991.  See Item 1 -  "Description  of Business."  The high and low sales
prices for the Company's Common Stock during the year ended March 31, 2001, were
$3.75 and $3.25 per share, respectively.  Such prices represent negotiated sales
between buyers and sellers without mark-up,  mark-down or retail commission. The
Company served as transfer agent in connection with all such transactions.


Item 6.    Management's Discussion and Analysis or Plan of Operation

           Results of Operations for the Years Ended March 31, 2001 and 2000


     The Company had net  earnings of  $341,048,  or $.46  diluted  earnings per
share,  for the fiscal year ended March 31,  2001,  compared to net  earnings of
$431,923,  or $.55 diluted  earnings per share,  for the fiscal year ended March
31, 2000,  a decrease in net  earnings of 21%. The Company had total  revenue of
$4,224,455  for the fiscal year ended March 31, 2001,  compared to total revenue
of $3,909,053 for the fiscal year ended March 31, 2000, an increase of 8%.


                        Corp. Trust  Pers. Trust     Other        Total
                         ----------   ----------   ----------   ----------

            2001
Bond Servicing Income    $2,440,744         --           --     $2,440,744
IRA Servicing Fees ...      558,730   $  280,988         --        839,718
Trust Income .........         --        866,389         --        866,389
Interest Income ......         --           --     $   77,604       77,604
                         ----------   ----------   ----------   ----------
                         $2,999,474   $1,147,377   $   77,604   $4,224,455
                         ==========   ==========   ==========   ==========

General & Administrative
Expenses                 $1,499,462   $  869,910   $1,277,067   $3,646,439
                         ==========   ==========   ==========   ==========



            2000
Bond Servicing Income    $2,592,749         --           --     $2,592,749
IRA Servicing Fees          556,405   $  172,799         --        729,204
Trust Income                   --        521,073         --        521,073
Interest Income                --           --     $   66,027       66,027
                         ----------   ----------   ----------   ----------
                         $3,149,154   $  693,872   $   66,027   $3,909,053
                         ==========   ==========   ==========   ==========

General & Administrative
Expenses                 $1,454,996   $  629,285   $1,100,506   $3,184,787
                         ==========   ==========   ==========   ==========



            1999

Bond Servicing Income    $2,006,221         -            -      $2,006,221
IRA Servicing Fees          448,328     $120,064         -         568,392
Trust Income                   -         445,569         -         445,569
Interest Income                -            -         $52,054       52,054
                         ----------   ----------   ----------   ----------
                         $2,454,549     $565,633      $52,054   $3,072,236
                         ==========   ==========   ==========   ==========

General & Administrative
Expenses                 $1,257,385     $483,462     $692,137   $2,432,984
                         ==========   ==========   ==========   ==========


<PAGE> 16


     The Corporate  Trust  segment's  revenue  decreased to  $2,999,474  for the
fiscal year ended March 31,  2001,  compared to  $3,149,154  for the fiscal year
ended March 31,  2000, a decrease of 5%. The Personal  Trust  segment's  revenue
increased to  $1,147,377  for the fiscal year ended March 31, 2001,  compared to
$693,872 for the fiscal year ended March 31, 2000, an increase of 65%.

     The  Corporate  Trust  segment's  bond  servicing   revenue   decreased  to
$2,440,744 for the fiscal year ended March 31, 2001,  compared to $2,592,749 for
the fiscal year ended  March 31,  2000,  a decrease of 6%. The  decrease in bond
servicing revenue was primarily  attributable to a decrease in the number of new
nonprofit bond issuances for which the Company was serving as trustee and paying
agent in the fiscal year ended March 31, 2001,  compared to new non-profit  bond
issuances  originated in the fiscal year ended March 31, 2000. Such decrease was
primarily  attributable to less favorable  market  conditions in the fiscal year
ended  March 31,  2001  compared  to the prior  year.  The Company is serving as
trustee and paying agent on 63 bond offerings in the original  principal  amount
of  approximately  $66 million  which were  originated  in the fiscal year ended
March 31, 2001,  compared to 81 bond offerings in the original  principal amount
of  approximately  $103 million  which were  originated in the fiscal year ended
March 31,  2000.  Additionally  at March 31,  2001,  the  Company was serving as
trustee  and  paying  agent  on  468  bond  offerings   totaling   approximately
$460,000,000 in original  principal  amount;  at March 31, 2000, the Company was
serving as trustee and paying agent on 448 bond offerings totaling approximately
$435,000,000 in original principal amount. The Company anticipates that its bond
servicing  revenues  will  decrease  in the fiscal  year  ending  March 31, 2002
compared to its revenues from such activities in the  recently-completed  fiscal
year as a result of a decrease  in the number and  principal  amount of new bond
offerings anticipated to be originated in the upcoming fiscal year for which the
Company will serve as trustee and paying agent.


<PAGE> 17

     Revenue  from  the  Corporate  Trust  segment's  IRA  servicing  activities
increased  to $558,730  for the fiscal year ended  March 31,  2001,  compared to
$556,405 for the fiscal year ended March 31, 2000, an increase of 0.4%.  Revenue
from the Personal Trust segment's IRA servicing activities increased to $280,988
for the fiscal year ended March 31,  2001,  compared to $172,799  for the fiscal
year ended March 31, 2000, an increase of 63%.

     At March 31, 2001,  the Corporate  Trust segment was servicing  9,710 IRA's
with an aggregate value of  approximately  $170,000,000,  and the Personal Trust
segment  was  servicing  230  IRA's  with an  aggregate  value of  approximately
$47,000,000.  At March 31, 2000, the Corporate Trust segment was servicing 9,228
IRA's with an aggregate value of  approximately  $151,000,000,  and the Personal
Trust  segment  was   servicing   205  accounts  with  an  aggregate   value  of
approximately  $45,000,000.  The  Company  anticipates  that  its IRA  servicing
revenue will increase in the fiscal year ending March 31, 2002 as a result of an
increase in the number of IRA's serviced by these segments.

     The Personal Trust  segment's  trust revenue  increased to $866,389 for the
fiscal year ended March 31, 2001, compared to $521,073 for the fiscal year ended
March 31,  2000,  an increase  of 66%. At March 31,  2001,  the  Personal  Trust
segment was serving as trustee or agent for 580 trust,  investment accounts,  or
other accounts with a fair market value of approximately $149,000,000.  At March
31,  2000,  the Personal  Trust  segment was serving as trustee or agent for 338
trust,  investment  accounts,  or other  accounts  with a fair  market  value of
approximately  $87,000,000.  The Company  anticipates  that trust  revenue  will
increase in the fiscal year ending  March 31, 2002 as a result of an increase in
the number of accounts serviced by this segment.

     Interest  revenue  increased to $77,604 for the fiscal year ended March 31,
2001,  compared to $66,027 for the fiscal year ended March 31, 2000, an increase
of 18%. The increase was  primarily  attributable  to a larger  balance held for
investment.

     The Corporate Trust segment's general and administrative expenses increased
in the  aggregate  to  $1,499,462  for the  fiscal  year ended  March 31,  2001,
compared to $1,454,996  for the fiscal year ended March 31, 2000,  but increased
to 50% of segment revenues for the fiscal year ended March 31, 2001, compared to
46% of segment  revenues in the fiscal year ended March 31,  2000.  The Personal
Trust segment's general and  administrative  expenses increased in the aggregate
to $869,910 for the fiscal year ending March 31, 2001,  compared to $629,285 for
the fiscal year ended March 31, 2000,  and decreased to 76% of segment  revenues
for the fiscal year ended March 31,  2001,  compared to 91% of segment  revenues
for the fiscal year ended March 31, 2000. The Company  anticipates  that general
and  administrative  expenses  will  decrease in the aggregate for the Corporate
Trust  segment in the fiscal year ended March 31, 2002,  but will  increase as a
percentage of revenues for fiscal 2002. This will result from a smaller decrease
in Corporate Trust segment  expenses as compared to projected  segment  revenues
which have decreased due to lower corporate bond servicing revenues. The Company
anticipates that general and administrative  expenses will increase in aggregate
for the Personal Trust segment in the fiscal year ended March 31, 2002, and will
increase as a percentage  of revenues  for fiscal 2002 levels.  This will result
from a larger  increase  in  Personal  Trust  segment  expenses  as  compared to
projected segment revenues. Specifically, this larger increase in Personal Trust
segment expenses is primarily due to increased personnel costs.


<PAGE> 18


           Results of Operations for the Years Ended March 31, 2000 and 1999


     The Company had net  earnings of  $431,923,  or $.55  diluted  earnings per
share,  for the fiscal year ended March 31,  2000,  compared to net  earnings of
$378,958,  or $.49 diluted  earnings per share,  for the fiscal year ended March
31, 1999,  an increase in net earnings of 14%. The Company had total  revenue of
$3,909,053  for the fiscal year ended March 31, 2000,  compared to total revenue
of $3,072,236 for the fiscal year ended March 31, 1999, an increase of 27%.

     The Corporate  Trust  segment's  revenue  increased to  $3,149,154  for the
fiscal year ended March 31,  2000,  compared to  $2,454,549  for the fiscal year
ended March 31, 1999, an increase of 28%. The Personal Trust  segment's  revenue
increased  to $693,872  for the fiscal year ended  March 31,  2000,  compared to
$565,633 for the fiscal year ended March 31, 1999, an increase of 23%.

     The  Corporate  Trust  segment's  bond  servicing   revenue   increased  to
$2,592,749 for the fiscal year ended March 31, 2000,  compared to $2,006,221 for
the year  ended  March 31,  1999,  an  increase  of 29%.  The  increase  in bond
servicing  revenue was primarily  attributable  to the increase in the number of
bond  accounts  serviced  by the  Company.  At March 31,  2000,  the Company was
serving as trustee and paying agent on 448 bond offerings totaling approximately
$435,000,000 in original  principal  amount;  at March 31, 1999, the Company was
serving as trustee and paying agent on 466 bond offerings totaling approximately
$409,000,000 in original principal amount.

     Revenue from the Corporate Trust segment's IRA Account servicing activities
increased  to $556,405  for the fiscal year ended  March 31,  2000,  compared to
$448,328 for the fiscal year ended March 31, 1999,  an increase of 24%.  Revenue
from the Personal Trust segment's IRA Account servicing  activities increased to
$172,799 for the fiscal year ended March 31, 2000,  compared to $120,064 for the
fiscal year ended March 31, 1999, an increase of 44%.

<PAGE> 19



     At March 31, 2000,  the Corporate  Trust  segment was  servicing  9,228 IRA
Accounts with an aggregate value of approximately $151,000,000, and the Personal
Trust  segment  was  servicing  205 IRA  accounts  with an  aggregate  value  of
approximately  $45,000,000.  At March 31, 1999, the Corporate  Trust segment was
servicing  8,143  IRA  Accounts  with  an  aggregate   value  of   approximately
$136,000,000,  and the Personal Trust segment was servicing 198 accounts with an
aggregate value of approximately $38,000,000.

     The Personal Trust  segment's  trust revenue  increased to $521,073 for the
fiscal year ended March 31, 2000, compared to $445,569 for the fiscal year ended
March 31,  1999,  an increase  of 17%. At March 31,  2000,  the  Personal  Trust
segment was serving as trustee or agent for 338 trust,  investment accounts,  or
other accounts with a fair market value of approximately  $87,000,000.  At March
31,  1999,  the Personal  Trust  segment was serving as trustee or agent for 304
trust,  investment  accounts,  or other  accounts  with a fair  market  value of
approximately $61,000,000.

     Interest  revenue  increased to $66,027 for the fiscal year ended March 31,
2000,  compared to $52,054 for the fiscal year ended March 31, 1999, an increase
of 27%. The increase was  primarily  attributable  to a larger  balance held for
investment and higher interest rates.

     The Corporate Trust segment's general and administrative expenses increased
in the  aggregate  to  $1,454,996  for the  fiscal  year ended  March 31,  2000,
compared to $1,257,385  for the fiscal year ended March 31, 1999,  but decreased
to 46% of segment revenues for the fiscal year ended March 31, 2000, compared to
51% of segment  revenues in the fiscal year ended March 31,  1999.  The Personal
Trust segment's general and  administrative  expenses increased in the aggregate
to $629,285 for the fiscal year ending March 31, 2000,  compared to $483,462 for
the fiscal year ended March 31, 1999,  and increased to 91% of segment  revenues
for the fiscal year ended March 31,  2000,  compared to 85% of segment  revenues
for the fiscal year ended March 31, 1999.


<PAGE> 20


     The foregoing discussion contains various forward-looking statements within
the  meaning  of  Section  27A of the  Securities  Act  and  Section  21E of the
Securities  Exchange  Act, and is subject to the safe harbors  created  thereby.
Forward-looking  statements are inherently  subject to risks and  uncertainties,
some of which cannot be predicted or  quantified.  Actual  results  could differ
materially  because  of the  following  factors,  among  others:  the  Company's
continued  involvement in each of its current business  segments;  the Company's
success  in  maintaining  relationships  with the  broker/dealers  with  whom it
currently  does  business;  the  success  of the  Company's  efforts  to develop
relationships  with other  broker/dealers  who can serve as a source of referral
for the Company; the continued employment of key management;  the success of the
Company in its business  development  efforts; the continuation of the Company's
investment  advisory  agreements  with  HIA,  WIS and FSG and their  success  in
managing  the trust and  investment  agency  accounts  for  which  they  provide
services;  the  Company's  ability to recover the costs it has incurred and will
incur in the future in  connection  with the  bankruptcy  proceeding  of Stevens
Financial Group,  Inc.  ("Stevens"),  which costs total  approximately  $160,000
through  May 31,  2001;  whether  one or more  parties  will  assert  claims  or
institute  legal  proceedings  against  the  Company  related  to the  Company's
services as indenture trustee on the Stevens bond offerings;  increased staffing
or  office  needs  not  currently  anticipated;  competitive  factors,  such  as
increased competition for the services provided by the Company in one or more of
its business  segments;  the Company's  successful  performance of its duties as
trustee  and/or  paying agent on bond  offerings,  as trustee for IRA's,  and as
manager,  administrator  and custodian for trust and investment agency accounts;
and changes in rules and regulations  adversely impacting the Company's business
segments.


           Liquidity and Capital Resources


     Under  Arizona  law,  the Company is required to maintain net capital of at
least  $500,000;  the  Company's  net capital was  $2,734,088 on March 31, 2001.
Arizona law also requires that the Company's net capital meet certain  liquidity
requirements.  Specifically,  $500,000 of such net capital must meet the Banking
Department's  liquidity  requirements.  Additional  capital  requirements may be
imposed upon the Company in the future as a result of Arizona  legislation which
will  become  effective  on August  9,  2001.  See "Item  1-Business-Regulation,
Licensing  and  Supervision."  At March 31, 2001,  $515,831 of the Company's net
capital met the Banking Department's liquidity requirements.

     The Company's cash and cash equivalents  increased from $9,260 at March 31,
2000 to $319,204 at March 31, 2001.  The  increase in cash and cash  equivalents
results from cash provided by operating activities of $542,524, partially offset
by cash used in investing  activities  of  $110,519,  and cash used in financing
activities of $122,061.  Cash used in investing and financing  activities during
the fiscal year ended March 31, 2001,  resulted  primarily  from the purchase of
property  and   equipment   and  purchase  and   retirement   of  common  stock,
respectively.


<PAGE> 21


     The Company  believes  that it will be able to satisfy its working  capital
and capital  expenditure  requirements for the foreseeable  future from existing
cash balances,  anticipated cash flow from operating activities,  and from funds
available under the Company's  Master Note with its former parent,  Church Loans
and Investments Trust.


           Recent Accounting Pronouncements

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial Accounting  Standards No. 133: "Accounting for Derivative  Instruments
and  Hedging  Activities"  (SFAS No.  133),  which  established  accounting  and
reporting standards for all derivative instruments and hedging activities.  SFAS
No.  133  requires  the  recognition  of all  derivatives  as  either  assets or
liabilities in the balance sheet at fair value. This new standard, as amended by
SFAS No. 137 and No. 138, will be effective for all fiscal years beginning after
June 15,  2000.  The  Company  will adopt SFAS No. 133 in the fiscal year ending
March 31, 2002.  SFAS No. 133 is not  expected to have a material  impact on the
Company's results of operations or financial position.

     During  December 1999, the SEC released Staff  Accounting  Bulletin No. 101
("SAB No. 101"),  "Revenue  Recognition  in Financial  Statements."  SAB No. 101
summarizes  the SEC  staff's  view in  applying  generally  accepted  accounting
principles to revenue  recognition in financial  statements.  In March 2000, the
SEC staff issued SAB No. 101A to delay  certain  provisions  of SAB No. 101. SAB
No.  101A  deferred  the  effective  date for  registrants  with a  fiscal  year
beginning  between December 16, 1999 and March 15, 2000.  Those  registrants may
report a change in  accounting  principle  no later  than  their  second  fiscal
quarter of the  fiscal  year  beginning  after  December  15,  1999.  In periods
subsequent to transition,  registrants should disclose the amount of revenue (if
material to income  before  income  taxes)  recognized in those periods that was
included  in the  cumulative  effect  adjustment.  The  Company  has adopted the
provisions of SAB No. 101 and the adoption did not have a material impact on our
sales or revenue recognition policies.


           Risk Factors

           Lack of Liquidity of the Company's Common Stock


     The  Company's  Common  Stock is not  listed  on the  Nasdaq  Stock  Market
("Nasdaq") or on any national or regional securities  exchange,  and there is no
established  trading  market for the Company's  Common  Stock.  The Company will
continue to attempt to match  stockholders who wish to sell Company Common Stock
with persons who wish to buy such Common Stock.  However,  annual trading volume
in the Company's Common Stock has averaged only  approximately  97,000_shares in
the last two years.  Therefore,  a stockholder who owns a substantial  number of
shares of Company  Common  Stock  will  likely be unable to sell his shares in a
short period of time should he or she need or wish to do so.


<PAGE> 22


           Dependence on Key Personnel and Management of Growth

     The Company's future success will depend upon the continued services of the
Company's senior  management.  The unexpected loss of the services of any of the
Company's senior management  personnel could have a material adverse effect upon
the Company. The Company has entered into employment  agreements with certain of
its  senior   management.   See  "Item  10:  Executive   Compensation-Employment
Agreements."  The  Company's  future  success  will  depend  in  part  upon  its
continuing  ability to attract and retain highly  qualified  personnel to manage
the future  growth of the Company.  There may be no  assurance  that the Company
will be successful in attracting  and retaining  such  personnel.  Further,  the
Company's  ability to manage  growth  successfully  will  require the Company to
continue to improve its management,  financial and operational controls. Failure
to do so could have a  material  adverse  effect  upon the  Company's  operating
results and financial condition.



  Non-Profit Bond Servicing Market; Ability to Increase Bond Servicing Revenues

     The Company's  future  financial  performance  will depend in part upon the
size of the  non-profit  bond market.  The market for bonds issued by non-profit
organizations  is subject to  fluctuation  due to a number of factors beyond the
control of the Company.  Moreover, there can be no assurance that the market for
bonds issued by  non-profit  organizations  will  continue at or near the levels
reached in the last two fiscal years;  the Company  estimates  that its revenues
from bond servicing activities will decrease in the fiscal year ending March 31,
2002  compared to its revenues from such  activities  in the recently  completed
fiscal year as a result of a decrease in the number and principal  amount of new
bond  offerings  anticipated  to be originated  in the upcoming  fiscal year for
which the Company will serve as trustee and paying agent. The Company's  ability
to continue  to increase  its market  share will be  dependent  upon a number of
factors,  including the Company's ability to develop and maintain  relationships
with  the  broker/dealers  who are  primarily  responsible  for the sale of such
non-profit  bonds. See "-Dependence  Upon Certain  Business  Relationships"  and
"Item 1-Business-Corporate Trust Segments-Bond Offering Services." Revenues from
the Company's bond servicing  activities  accounted for approximately 58% of the
Company's total revenues in the fiscal year ended March 31, 2001.



           Market for Personal Trust Services;
           Ability to Increase Personal Trust Service Revenues

     The Company intends for the  foreseeable  future to limit the activities of
its Personal  Trust segment to the  metropolitan  Phoenix area.  Therefore,  the
Company's future financial  performance will depend in part upon the size of the
market for personal trust services in the  metropolitan  Phoenix area.  Revenues
from such  activities  accounted for  approximately  27% of the Company's  total
revenues in the fiscal  year ended  March 31,  2001.  The  Company's  ability to
continue to increase its revenues from personal trust services will be dependent
upon a number of  factors,  including  the  Company's  ability  to  develop  and
maintain  relationships with  professionals  (such as attorneys and accountants)
who serve as a referral  source for these services and the Company's  continuing
ability to service personal trust accounts. Additionally, at March 31, 2001, ten
percent of the Company's  Personal  Trust account  assets were held in trust for
members of one family,  and such  accounts  accounted  for eight  percent of the
Company's  Personal Trust revenues in the fiscal year ended March 31, 2001. Loss
of such  revenues  could have a material  adverse  effect on the Personal  Trust
segment   and/or   the   Company's   results   of   operations.   See  "Item  1:
Business-Personal Trust Segment."



<PAGE> 23


           Dependence Upon Certain Business Relationships


     The  Company  depends to a  significant  extent on its  relationships  with
broker/dealers   who  are   involved  in  the  sale  of  bonds  for   non-profit
organizations  to  refer  business  to the  Company  for bond  servicing  duties
associated  with such  offerings.  As of March 31, 2001,  all bond  programs for
which the Company had served as trustee and paying agent had been  originated by
twenty  broker/dealers,  and four of those  broker/dealers  had originated bonds
representing  approximately  77% of the aggregate  principal amount of all bonds
issued for which the Company served as trustee and paying agent.  The loss of or
damage to any one of these relationships, or the failure or inability of any one
of these  broker/dealers  to  initiate  a  similar  number  of  non-profit  bond
offerings in the future, could have a material adverse impact on the Company and
its  operations.  The  Company  also  depends,  to  a  great  extent,  upon  its
relationships  with trust  professionals  (such as attorneys and accountants) in
the metropolitan  Phoenix area to refer  opportunities to the Company to provide
personal trust services. The loss of or damage to existing relationships, or the
Company's  inability to continue to develop additional  relationships with trust
professionals,  could  have a material  adverse  impact on the  Company  and its
operations.


           Competition

     The principal business segments in which the Company is involved are highly
competitive.  The  Company  currently  competes  with a number  of  other  trust
companies to serve as trustee and paying agent for non-profit  bond  financings,
including Reliance Trust Company,  Herring National Bank,  American Church Trust
Company,  and Trust Management,  Inc. The Company also competes with large banks
and other financial institutions for these services. Other companies that do not
currently  provide  these  services  may enter this  business.  The Company also
competes  with large banks and other  financial  institutions,  including  other
trust companies,  located in the  metropolitan  Phoenix area for the business of
providing personal trust services. Other companies that do not currently provide
these services may enter this business.


<PAGE> 24


           Regulation, Licensing and Supervision; Net Capital Requirements

     The Company's operations are subject to ongoing regulation, supervision and
licensing  under  various  federal,  state and local  statutes,  ordinances  and
regulations,  including  but not limited to  regulation  by the Arizona  Banking
Department.  Under  applicable  rules and  regulations  of the  Arizona  Banking
Department,  the Company  files  periodic  reports  with the  Department  and is
subject to periodic examinations by the Department.  Additionally, under Arizona
law, the Company is required to maintain net capital of at least  $500,000;  the
Company's net capital was approximately  $2.7 million at March 31, 2001. Arizona
law also  requires  that  $500,000 of the  Company's  net capital  must meet the
Department's  liquidity  requirements.  At  March  31,  2001,  $515,831  of  the
Company's net capital met the Department's  liquidity  requirements.  Additional
capital  requirements  may be imposed upon the Company in the future as a result
of  Arizona  legislation  which will  become  effective  on August 9, 2001.  The
Company is also  required  to satisfy  other  requirements  under  Arizona  law.
Additionally, the Arizona Banking Department retains broad discretion to suspend
or revoke the  certificate  of any trust  company  subject  to its  jurisdiction
(including the Company) upon the occurrence of certain events, including (i) the
trust company's  violation of any applicable law, rule or order,  (ii) the trust
company's  failure to conduct  business in a safe,  sound and lawful manner,  or
(iii)  upon the  occurrence  of any other  event set  forth in  Arizona  Revised
Statutes  Section  6-864.  The Company is also  required to comply with  federal
rules and  regulations in connection  with the Company's  service as trustee for
IRA Accounts.  See "Item 1: Business - Regulation,  Licensing and  Supervision."
Failure to comply with  applicable  law could have a material  adverse effect on
the Company's  results of  operations  and  financial  condition  and could,  in
certain  instances,  affect  the  Company's  certificate  issued by the  Arizona
Banking  Department.  Failure to maintain such a  certificate  would require the
Company to attempt to move its operations to another state,  to discontinue  its
operations, or to attempt to merge or effect another business combination.


<PAGE> 25


           Performance of Contractual Duties

     In the  performance  of its  duties as  trustee  and  paying  agent on bond
offerings  of  non-profit  and other  organizations,  the Company is required to
perform  certain duties under the trust  indenture for such offering  and/or the
federal  Trust  Indenture  Act (15 U.S.C.  ss. 77aaa et seq.) or the  applicable
state version of such Act (if any). In the Company's  capacity as trustee,  such
duties include: receiving proceeds from the sale of the bonds; distributing such
proceeds according to the purposes of the bond offering; investing such proceeds
pending  distribution;  receiving  periodic  sinking  fund  payments by the bond
issuer;  procuring  a security  interest in  collateral  from the bond issuer to
secure the issuer's bonds;  perfecting such security interest; and, in the event
of default by a bond issuer, taking possession of and/or selling the collateral.
In the Company's  capacity as paying  agent,  such duties  include  distributing
sinking  fund  payments to  bondholders.  Failure to perform  such duties in the
manner required by the trust indenture or applicable law could cause the Company
to incur  material  liabilities,  which in turn could  have a  material  adverse
effect on the Company's results of operations and financial condition.



           Bankruptcy of Stevens Financial Group

     The Company is serving as indenture  trustee  under seven Trust  Indentures
issued by Stevens  Financial Group, a financial  services firm  headquartered in
Springfield,  Missouri  ("Stevens").  The Trust Indentures secure obligations of
Stevens under certain debt instruments designated as Time Certificates and Fixed
Rate Investments.

     Stevens has defaulted on all of its outstanding Time Certificates and Fixed
Rate Investments, and on March 19, 2001 Stevens filed a Voluntary Petition under
Chapter 11 of the United States  Bankruptcy Code in the United States Bankruptcy
Court for the  District of Arizona  (Case No.  01-03105-ECF-RTB)  (the  "Stevens
Bankruptcy  Proceeding").  Based on information provided to the Company to date,
the aggregate  unpaid principal amount of such debt instruments is approximately
$64 million,  and accrued and unpaid interest  through the date of the filing of
the Stevens Bankruptcy Proceeding is approximately $13.5 million.

     The Company has  incurred  costs and  expenses  of  approximately  $160,000
through May 31, 2001 in connection with the Stevens Bankruptcy  Proceeding.  The
Company will  continue to incur  additional  costs and expenses  related to this
matter for the  foreseeable  future.  Future costs and expenses may be material.
The  Company  may not be able to  recover a  portion  or any of the costs it has
incurred or which it incurs in the future in the Stevens Bankruptcy  Proceeding.
In the event the Company  cannot  recover the costs it has incurred and which it
incurs in the future in the Stevens Bankruptcy Proceeding, the Company's results
of operations  for the fiscal year ending March 31, 2002 will be materially  and
adversely  affected,  and the Company's results of operations for future periods
and financial condition could be materially and adversely affected.


<PAGE> 26


     Additionally,  although  no  litigation  is pending or has been  threatened
against it arising from the Stevens Bankruptcy  Proceeding,  it is possible that
one or more holders of Time  Certificates or Fixed Rate Investments could assert
claims  against the Company.  Such claims would result in  additional  costs and
expenses  to the  Company.  The Company  could also suffer  damages in excess of
applicable insurance coverage limits as a result of such claims.



           Change in Securities Laws Affecting Non-Profit Bond Finance Market

     Most bond  offerings for which the Company  serves as trustee and/or paying
agent are made in  reliance  upon an  exemption  from  registration  provided by
Section  3(a)(4)  of the  Securities  Act  of  1933,  as  amended,  and  similar
exemptions from  registration  provided for under  applicable  state  securities
laws. In the event such federal and/or state exemptions  become  unavailable for
any reason,  the Company believes that the market for non-profit bond financings
would be materially and adversely  affected due primarily to the increased costs
associated with  registration of such bonds under federal and/or state laws. The
foregoing  would have a material  adverse impact on the Company's fees generated
from bond servicing activities and, thus, the Company's results of operations.


           Common Stock Dividends

     The  Company  has never paid  dividends  on its Common  Stock.  The Company
intends for the foreseeable  future to retain any earnings to support the growth
of the Company's  business.  The Company  therefore does not contemplate  paying
cash dividends on its Common Stock in the foreseeable future.




Item 7.    Financial Statements.

     The Company's audited financial statements, containing balance sheets as of
March 31,  2001 and 2000,  and related  statements  of  earnings,  stockholders'
equity and cash flows for each of the years in the three-year period ended March
31, 2001, are set forth on the following pages.




<PAGE> 27




                             COLONIAL TRUST COMPANY
                          Index to Financial Statements

                                                                 Page

Independent Auditors' Report                                       28

Balance Sheets as of March 31, 2001,
       and 2000                                                    29

Statements of Earnings for the years
       ended March 31, 2001, 2000, and 1999                        30

Statements of Stockholders' Equity for
       the years ended March 31, 2001, 2000, and 1999              31

Statements of Cash Flows for the Years
       ended March 31, 2001, 2000, and 1999                        32

Notes to Financial Statements                                      33



<PAGE> 28


                             Colonial Trust Company
                          Independent Auditors' Report


The Board of Directors
Colonial Trust Company:


     We have audited the  accompanying  balance sheets of Colonial Trust Company
(Company) as of March 31, 2001 and 2000, and the related statements of earnings,
stockholders'  equity  and cash  flows for each of the  years in the  three-year
period ended March 31, 2001. These financial  statements are the  responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material respects, the financial position of Colonial Trust Company as of
March 31, 2001 and 2000,  and the results of its  operations  and its cash flows
for  each  of the  years  in the  three-year  period  ended  March  31,  2001 in
conformity with accounting principles generally accepted in the United States of
America.

                                                             /s/KPMG LLP

Phoenix, Arizona
June 7, 2001


<PAGE> 29


                             COLONIAL TRUST COMPANY

                                 Balance Sheets

                             March 31, 2001 and 2000



        Assets                                  2001         2000
                                             ----------   ----------
Cash and cash equivalents                    $  319,204        9,260
Receivables                                     824,111      802,122
Note receivable                                 381,507      378,387
Property and equipment, net                     796,036      843,095
Excess of cost over fair value acquired, net    116,911      129,081
Restricted cash                                 515,831      502,556
Other assets                                     97,478      100,421
                                             ----------   ----------

                                             $3,051,078    2,764,922
                                             ----------   ----------

        Liabilities and Stockholders' Equity

Accounts payable and accrued liabilities     $  304,797      197,132
Income taxes payable                               -          46,301
Deferred income taxes                            12,193        7,249
                                             ----------   ----------

                                                316,990      250,682
                                             ==========   ==========

Stockholders' equity:
     Common stock, no par value. Authorized
     25,000,000 shares; issued and outstanding
     720,843 and 755,234 shares at
     March 31, 2001, and 2000, respectively
                                                578,911      555,177
     Additional paid-in capital                 506,208      505,347
     Retained earnings                        1,648,969    1,453,716
                                             ----------   ----------

               Total stockholders' equity     2,734,088    2,514,240

Commitments and contingencies
(note 9)                                      ---------    ---------
                                             $3,051,078    2,764,922
                                             ==========   ==========

See accompanying notes to financial statements.


<PAGE> 30


                             COLONIAL TRUST COMPANY

                             Statements of Earnings

                    Years ended March 31, 2001, 2000 and 1999



                                           2001         2000         1999
                                        ---------    ---------    ---------

Revenue:
     Bond servicing income              $2,440,744    2,592,749    2,006,221
     IRA servicing fees - corporate        558,730      556,405      448,328
     IRA servicing fees - personal         280,988      172,799      120,064
     Trust income                          866,389      521,073      445,569
     Interest income                        77,604       66,027       52,054
                                        ----------   ----------   ----------

            Total revenue                4,224,455    3,909,053    3,072,236

General and administrative expenses      3,646,439    3,184,786    2,432,984
                                        ----------   ----------   ----------

            Earnings before income taxes   578,016      724,267      639,252

                Income taxes               236,968      292,344      260,294
                                        ----------   ----------   ----------

            Net earnings                $  341,048      431,923      378,958
                                        ==========   ==========   ==========

Basic earnings per share                $     0.47         0.57         0.49
                                        ==========   ==========   ==========

Diluted earnings per share              $     0.46         0.55         0.49
                                        ==========   ==========   ==========

Weighted average shares outstanding -
    basic                                  723,040      758,185      765,768
                                        ==========   ==========   ==========

Weighted average shares outstanding -
    diluted                                748,383      780,907      779,377
                                        ==========   ==========   ==========


See accompanying notes to financial statements.


<PAGE> 31



                             COLONIAL TRUST COMPANY

                       Statements of Stockholders' Equity

                    Years ended March 31, 2001, 2000 and 1999


<TABLE>
<CAPTION>
                                             Common Stock           Additional                Total
                                         ------------------------   Paid-In      Retained     Stockholders'
                                         Shares       Amount        Capital      Earnings     Equity
                                         -------      -------      -------      --------     ---------
<S>                                      <C>          <C>          <C>           <C>         <C>
Balances at March 31, 1998               772,929   $  554,942      505,347       696,180     1,756,469

Common stock acquired and
  retired                                (11,686)        -            -          (35,135)      (35,135)

Issuance of common stock
  under stock option plan                     94          235         -             -              235

Net earnings                                -            -            -          378,958       378,958
                                         -------      -------      -------     ---------     ---------

Balances at March 31,1999                761,337      555,177      505,347     1,040,003     2,100,527

Common stock acquired and
   retired                                (6,103)        -            -          (18,210)      (18,210)

Net earnings                                -            -            -          431,923       431,923
                                         -------      -------      -------      --------     ---------

Balances at March 31, 2000               755,234      555,177      505,347     1,453,716     2,514,240


Common stock acquired and
   retired                               (42,391)        -            -         (145,795)     (145,795)

Issuance of common stock
   under stock option plan                 8,000       23,734         -             -           23,734

Tax benefit on stock options
 exercised                                  -            -             861          -              861

Net earnings                                -            -            -          341,048       341,048
                                         -------      -------      -------     ---------     ---------

Balances at March 31, 2001               720,843   $  578,911      506,208     1,648,969     2,734,088
                                         =======      =======      =======     =========     =========


<FN>
   See accompanying notes to financial statements.
</FN>

</TABLE>

<PAGE> 32



                             COLONIAL TRUST COMPANY
                            Statements of Cash Flows

<TABLE>
<CAPTION>
                    Years ended March 31, 2001, 2000 and 1999

                                                                     2001        2000          1999
                                                                 ----------   ---------     ---------
<S>                                                                <C>          <C>          <C>
Cash flows from operating activities:

     Net earnings                                                $  341,048     431,923       378,958
     Adjustments to reconcile net earnings to net
         cash provided by operating activities:
            Depreciation and amortization                           153,353     133,000        95,315
            Deferred income taxes                                     4,944     (13,046)        8,465
            Tax benefit on stock options purchased                      861        -             -
            Increase (decrease) in cash resulting from changes in:

                 Receivables                                        (21,989)   (283,727)     (127,637)
                 Other assets                                         2,943       5,586          (558)
                 Accounts payable and accrued liabilities           107,665     (83,332)      148,089
                 Income taxes payable                               (46,301)    (61,652)       60,348
                                                                 ----------   ----------   ----------

                      Net cash provided by operating
                      activities                                    542,524      128,752      562,980
                                                                 ----------   ----------   ----------

Cash flows from investing activities:

     Payment received on note receivable                            425,000      260,000         -
     Additions to note receivable                                  (428,120)    (219,303)     (29,595)
     Purchase of property and equipment                             (94,124)    (152,230)    (182,359)
     Increase in restricted cash                                    (13,275)    (165,005)    (169,345)
                                                                 -----------  -----------  ----------

                        Net cash used in investing activities      (110,519)    (276,538)    (381,299)
                                                                 -----------  -----------  ----------

Cash flows from financing activity:

     Purchase and retirement of common stock                       (145,795)     (18,210)     (35,135)
     Proceeds from issuance of common stock under stock
       option plan                                                   23,734         -             235
                                                                 -----------  -----------  ----------

                      Net cash used in financing activities        (122,061)     (18,210)     (34,900)
                                                                 -----------  -----------  ----------

                           Increase (decrease) in cash and cash
                           equivalents                              309,944     (165,996)     146,781

Cash and cash equivalents at beginning of year                        9,260      175,256       28,475
                                                                 -----------  -----------  ----------

Cash and cash equivalents at end of year                         $  319,204        9,260      175,256
                                                                 ===========  ===========  ==========
Supplemental disclosures:
     Income taxes paid                                           $  300,000      367,041      191,481
                                                                 ===========  ===========  ==========

<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>


<PAGE> 33


                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2001, 2000 and 1999





(1)  Significant Accounting Policies

     (a) Nature of Business

     Colonial Trust Company (Colonial or Company) was incorporated on August 15,
1989 in the state of Arizona  for the  purpose of  engaging  in the  business of
acting as a  fiduciary.  The Company is  domiciled  in the state of Arizona,  is
regulated by the Arizona State  Banking  Department,  and the  Company's  common
stock is registered under the Securities Exchange Act of 1934.

     Colonial  serves as trustee  under various bond  indentures  for issuers of
bonds in 40 states  and one  province  in  Canada.  The  issuers  are  primarily
churches and other religious  organizations.  As trustee,  the Company receives,
holds,  invests,  and disburses the bond proceeds as directed by the  applicable
trust  indenture and receives  weekly or monthly  sinking fund payments from the
issuer  of  bonds,  and in turn,  pays the  semiannual  principal  and  interest
payments  to the  bondholders.  As of March 31,  2001,  Colonial  was serving as
trustee  for the  benefit  of the  bondholders  on 468 bond  offerings  totaling
approximately  $460,000,000 in original principal amount. The amount of sold and
unmatured bonds total  approximately  $360,000,000  at March 31, 2001.  Colonial
also serves as a trustee of 9,710 self-directed  individual  retirement accounts
for  certain  bondholders  or  employees  of  religious  organizations  totaling
approximately $170,000,000 at March 31, 2001.

     Colonial also serves as trustee or agent,  provides investment  management,
administration,  and custodial  services through its Personal Trust segment.  As
trustee or agent,  Colonial receives,  holds, invests and tracks the performance
of the various securities held in trust, or investment agency accounts. Colonial
was  serving as  trustee  or agent for 580  accounts  with a fair  market  value
totaling  approximately  $149,000,000  at March 31, 2001.  Colonial also acts as
custodian  for  self-directed  IRA  accounts.  Colonial  held  230  accounts  as
custodian  with a fair market value of  approximately  $47,000,000  at March 31,
2001.

     (b) Basis of Presentation

     On September 24, 1998,  the Company's  shareholders  approved a one-for-ten
reverse  common stock split.  All share  amounts,  share prices and earnings per
share have been retroactively adjusted for all periods presented to reflect this
reverse common stock split.


<PAGE> 34

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2001, 2000 and 1999


     (c) Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions  that affect the reported amount of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

     (d) Revenue Recognition

     Under the trust indentures with organizations issuing bonds,  Colonial, for
its services,  principally  earns  revenues based on three fee  structures.  The
first fee structure  allows Colonial to invest trust funds held for disbursement
and retain the gains and earnings  therefrom.  The second fee structure requires
the issuing  institution to pay a percentage of the bond proceeds to the Company
for set-up and  printing  costs during the first year.  Additionally,  an annual
maintenance  fee is  required  each  succeeding  year.  The third fee  structure
entitles  Colonial to interest  earnings up to 2.5% of daily trust funds held in
bond program fund accounts in lieu of a set-up fee. Annual  maintenance fees and
bond printing  costs are charged as a percentage  of the related bond  issuance.
Colonial also receives fees for services provided as custodian for self-directed
individual retirement accounts.

     The  profitability  of Colonial is dependent upon the ability of investment
broker-dealers  to originate bond programs for which Colonial serves as trustee.
At March 31, 2001,  approximately  77% of the total bond issues  processed  were
originated  by  4  broker-dealers.   For  the  year  ended  March  31,  2001,  3
broker-dealers  had originated 94% of the aggregate  principal amount of all new
bond  issues.  At March 31,  2000,  approximately  79% of the total bond  issues
processed were originated by 4 broker-dealers.

     In connection  with providing  investment  management,  administration  and
custodial  services,  Colonial  earns revenue based on two fee  structures.  The
first fee structure is established as a percentage of the fiduciary assets which
Colonial  holds as trustee or agent.  Fees are  assessed  on a monthly  basis to
individual  accounts  according to the prior month end fair market value of each
account.  The second fee structure relates to an annual minimum fee which is set
up to cover the maintenance of fiduciary assets Colonial holds in both trust and
self-directed IRA accounts.  Minimum fees are assessed monthly,  based on 1/12th
of the published annual minimum.

     At March 31, 2001,  10% of Colonial's  Personal  Trust account  assets were
held  in  trust  for  members  of  one  family.   The  combined  trust  accounts
approximated 8% of Colonial's Personal Trust income revenues. At March 31, 2000,
22% of Colonial's  Personal  Trust account assets were held in trust for members
of one family.  The  combined  trust  accounts  approximated  14% of  Colonial's
Personal Trust income revenues.


<PAGE> 35

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2001, 2000 and 1999


     (e) Cash Equivalents and Concentration of Credit Risk

     Colonial  considers  all  highly  liquid  debt  instruments  with  original
maturities  at the  date  of  purchase  of  three  months  or  less  to be  cash
equivalents.  Cash  equivalents at March 31, 2001 and 2000 consist  primarily of
money  market  accounts,   which  invest,  primarily  in  short-term  government
securities.

     Colonial  places  its cash in  insured  financial  institutions  and United
States government  securities with original  maturities of three months or less.
Periodically  during the year,  Colonial  maintains cash and cash equivalents on
deposit  at  financial  institutions  in excess of the FDIC  insurance  limit of
$100,000.

     (f) Note Receivable

     Colonial  considers  a note to be  impaired  when it is  probable  that the
Company will be unable to collect all amounts due  according to the  contractual
terms of the note.  When a loan is considered to be impaired,  the amount of the
impairment is measured based on the present value of expected  future cash flows
discounted at the note's effective interest rate.  Impairment losses are charged
to expense.  The Company had no impaired  notes  receivable  during fiscal 2001,
2000 and 1999.

     (g) Property and Equipment

     Property and equipment is recorded at cost less  accumulated  depreciation.
Depreciation on furniture and equipment is recorded on the straight-line  method
over  the  estimated  useful  lives  of the  assets  ranging  from 3 to 5 years.
Colonial's  building  is  depreciated  over 39.5 years  using the  straight-line
method.

     (h) Excess of Cost Over Fair Value Acquired (Goodwill)

     Goodwill  is  amortized  using  the  straight-line  method  over 15  years.
Goodwill is carried net of  accumulated  amortization  of $65,919 and $53,749 at
March 31, 2001 and 2000, respectively.



<PAGE> 36


                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2001, 2000 and 1999

     (i) Income Taxes

     Colonial  uses the asset and  liability  method of  accounting  for  income
taxes.  Deferred tax assets and  liabilities  are  recognized for the future tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to apply to  taxable  income  in the  years in which  those  temporary
differences are expected to be recovered or settled.  The effect on deferred tax
assets and  liabilities  of a change in tax rates is recognized in income in the
period that includes the enactment date.

      (j) Computation of Earnings Per Common Share

     Basic EPS is computed  based on weighted  average  shares  outstanding  and
excludes any potential  dilution from stock  options,  warrants and other common
stock equivalents.  Diluted EPS reflects potential dilution from the exercise or
conversion  of  securities  into common  stock or from other  contracts to issue
common stock.

      (k) Stock Option Plan

     In accordance  with the  provisions of  Accounting  Principles  Board (APB)
Opinion No. 25,  Accounting for Stock Issued to Employees,  the Company measures
stock based compensation  expense as the excess of the market price at the grant
date over the underlying stock exercise price. In accordance with the provisions
of SFAS No. 123, Accounting for Stock-Based  Compensation,  the Company provides
pro forma net earnings and pro forma earnings per share disclosures for employee
stock option grants as if the fair value of all  stock-based  awards on the date
of the grant was recognized as expense over the vesting period.

      (l) Impairment of Long-Lived Assets

     Colonial reviews long-lived assets and certain identifiable intangibles for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying amount of an asset may not be recoverable.  Recoverability of assets to
be held and used is measured by a comparison of the carrying  amount of an asset
to future  undiscounted net cash flows expected to be generated by the asset. If
such assets are  considered to be impaired,  the  impairment to be recognized is
measured  by the amount by which the  carrying  amount of the assets  exceed the
fair value of the assets.  Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell.

      (m) Reclassifications

     Certain  reclassifications have been made to prior year balances to conform
to the current year presentation.



<PAGE> 37

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2001, 2000 and 1999


(2) Note Receivable

     On  December  1,  1990,  Colonial  entered  into a Master  Note and  Letter
Agreement  with Church  Loans,  a real estate  investment  trust and  Colonial's
former parent  corporation.  The Master Note in the maximum amount of $1,000,000
is due on demand,  bears interest at 1% less than the prime interest rate and is
unsecured. Amounts advanced to Church Loans may be repaid and reborrowed.


(3) Property and Equipment

    Property and equipment consists of the following:

                                2001         2000
                         -----------  -----------

       Land               $  157,241      157,241
       Building              449,912      449,912
       Furniture             192,428      179,729
       Equipment             607,201      525,777
                         -----------  -----------

                           1,406,782    1,312,659
       Less accumulated
         depreciation        610,746      469,564
                         -----------  -----------

                          $  796,036      843,095
                         ===========  ===========



(4)        Income Taxes

     Income taxes amounted to $236,968, $292,344 and $260,294 for 2001, 2000 and
1999, respectively.  The actual income taxes differ from "expected" income taxes
for those years  (computed  by applying  the U.S.  federal  corporate  statutory
income tax rate of 34% to earnings before income taxes) as follows:

                                2001         2000         1999
                         -----------  -----------  -----------

Computed "expected"
   income taxes           $  196,525      246,250      217,346
State taxes (net of
   federal income tax
   benefit)                   31,853       39,297       36,006
Other items, net               8,590        6,797        6,942
                         -----------  -----------  -----------

                          $  236,968      292,344      260,294
                         ===========  ===========  ===========

Effective income tax rate       41.0%        40.4%        40.7%
                         ===========  ===========  ===========


<PAGE> 38


                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2001, 2000 and 1999


        Components of income taxes consist of:

                             Current     Deferred        Total
                         -----------  -----------  -----------
2001:
    Federal                $ 184,769        3,937      188,706
    State                     47,255        1,007       48,262
                         -----------  -----------  -----------
                           $ 232,024        4,944      236,968
                         ===========  ===========  ===========

2000:
    Federal                $ 243,193      (10,389)     232,804
    State                     62,197       (2,657)      59,540
                         -----------  -----------  -----------
                           $ 305,390      (13,046)     292,344
                         ===========  ===========  ===========

1999:
    Federal                $ 199,234        6,506      205,740
    State                     52,595        1,959       54,554
                         -----------  -----------  -----------

                           $ 251,829        8,465      260,294
                         ===========  ===========  ===========

The tax effects of temporary differences that give rise to significant portions
of the deferred tax liabilities at March 31, 2001 and 2000 are presented below:

                                                          2001         2000
                                                   -----------  -----------
  Deferred tax liability--property and equipment,
   principally due to differences in depreciation     $ 12,193        7,249
                                                   ===========  ===========


(5) Stock Option Plans

     Colonial's shareholders approved Colonial's Incentive Stock Option Plan for
employees of the Company (the ISOP) and Colonial's  Non-Employee Directors Stock
Option Plan (the Directors Plan) on April 25, 1996.

     Pursuant to the ISOP,  Colonial's Board of Directors is authorized to grant
either incentive stock options or nonstatutory stock options. The exercise price
of  incentive  stock  options  granted  under the ISOP must be equal to the fair
market  value  per  share  on the  date of  grant,  and the  exercise  price  of
nonstatutory  stock  options  must be at least 50% of the fair market  value per
share on the date of grant.  A total of 200,000  shares have been  reserved  for
issuance under the ISOP.


<PAGE> 39


                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2001, 2000 and 1999


     Pursuant to the Directors  Plan,  each  non-employee  director  received an
option to purchase  5,000 shares on the date the Directors  Plan was approved by
Colonial's  stockholders and options to purchase 1,500 shares were automatically
granted on January 1, 1997 and on each January 1 thereafter  to each person then
serving as a  non-employee  director  of  Colonial.  The  exercise  price of all
options  granted under the Directors Plan must be equal to the fair market value
per share on the date of grant.  A total of 50,000 shares have been reserved for
issuance under the Directors Plan.

     At March 31, 2001,  there were 114,707 shares available for grant under the
ISOP Plan and 12,500 shares  available for grant under the Directors  Plan.  The
per share weighted average fair value of stock options granted during 2001, 2000
and 1999 was $1.13, $1.05 and $.97, respectively, on the date of grant using the
Black Scholes Model with the following  weighted average  assumptions:  expected
dividend yield of 0%,  volatility of 10%, risk free interest rate of 6.5% and an
expected life of 6 years for 2001, 2000 and 1999.

     Colonial  applies  APB  Opinion  No. 25 in  accounting  for its plans  and,
accordingly,  no compensation  cost has been recognized for its stock options in
the financial statements. Had Colonial determined compensation cost based on the
fair  value at the grant date for its stock  options  under  SFAS No.  123,  the
Company's net earnings would have been reduced to the pro forma amount indicated
below for the years ended March 31, 2001, 2000 and 1999:

                                2001         2000         1999
                         -----------  -----------  -----------
Net earnings:
    As reported            $ 341,048    $ 431,923    $ 378,958
                         ===========  ===========  ===========
    Pro forma              $ 330,116    $ 420,728    $ 368,255
                         ===========  ===========  ===========

Earnings per share:
    As reported - basic    $     .47    $     .57    $     .49
                         ===========  ===========  ===========
    As reported - diluted  $     .46    $     .55    $     .49
                         ===========  ===========  ===========

    Pro forma - basic      $     .46    $     .55    $     .48
                         ===========  ===========  ===========
    Pro forma - diluted    $     .44    $     .54    $     .47
                         ===========  ===========  ===========

     The full impact of  calculating  compensation  cost for stock options under
SFAS No. 123 is not  reflected in the pro forma net earnings  amounts  presented
above because  compensation  cost is reflected over the options' vesting periods
ranging from zero to three years.

     A summary  of the stock  options  which  have been  issued,  exercised  and
forfeited follows:


<PAGE> 40

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2001, 2000 and 1999



<TABLE>
<CAPTION>
                        Year ended March 31, 2001   Year ended March 31, 2000  Year ended March 31, 1999
                          -----------------------   -------------------------  -------------------------
                                         Weighted                  Weighted                    Weighted
                            Number       average        Number      average      Number        average
                          of shares      exercise     of shares    exercise     of shares      exercise
                                          price                      price                      price
                          ----------   ----------   -----------  -----------   -----------   -----------
<S>                         <C>          <C>           <C>          <C>           <C>            <C>
Balance at the beginning
   of the year               132,231       $ 2.71       130,483       $ 2.69       122,577       $ 2.67
Granted                        4,500         3.50         8,000         3.25         8,000         3.00
Forfeited                    (14,032)        2.94        (6,252)        2.90          --            --
Exercised                     (8,000)        2.97          --            --            (94)        2.50
                          ----------   ----------   -----------  -----------   -----------   ----------
Balance at the end
   of the year               114,699       $ 2.70       132,231       $ 2.71       130,483       $ 2.69
                          ==========   ==========   ===========  ===========   ===========   ==========

Exercisable at the end
   of the year               114,699       $ 2.70       127,231       $ 2.71       106,483       $ 2.69
                          ==========   ==========   ===========  ===========   ===========   ==========

</TABLE>

(6) Fair Value of Financial Instruments

     The following  summary  presents a  description  of the  methodologies  and
assumptions  used  to  determine  the  fair  value  of the  Company's  financial
instruments.

     (a) Cash and Cash Equivalents

     The  carrying  amount  is  assumed  to be the  fair  value  because  of the
short-term nature and liquidity of these instruments.

     (b) Receivables and Note Receivable

     Fair value is considered to be equal to the carrying  value of the accounts
and note receivable,  as they are generally short-term in nature and the related
amounts approximate fair value or are receivable on demand.

     (c) Limitations

     Fair value  estimates are made at a specific point in time and are based on
relevant  market  information and  information  about the financial  instrument.
These  estimates  do not reflect any premium or discount  that could result from
offering  for sale at one time the  Company's  entire  holdings of a  particular
financial  instrument.  Changes in assumptions could significantly  affect these
estimates.  Since the fair value is estimated as of March 31, 2001 and 2000, the
amounts that will  actually be realized or paid at settlement or maturity of the
instruments could be significantly different.


<PAGE> 41

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2001, 2000 and 1999


(7) Net Earnings Per Share

     A summary of the  Company's  basic and  diluted  earnings  per share are as
follows:

                                               Years ended March 31
                                      -------------------------------------
                                             2001         2000         1999
                                      -----------  -----------  -----------

    Net earnings                        $ 341,048      431,923      378,958
                                      ===========  ===========  ===========
    Basic EPS - weighted average shares
     outstanding                          723,040      758,185      765,768
                                      ===========  ===========  ===========
    Basic earnings per share            $     .47          .57          .49
                                      ===========  ===========  ===========
    Basic EPS - weighted average shares
      outstanding                         723,040      758,185      765,768
    Effect of dilutive securities -
      stock options                        25,343       22,721       13,609
                                      -----------  -----------  -----------
    Dilutive EPS - weighted average
       shares outstanding                 748,383      780,967      779,377
                                      ===========  ===========  ===========
    Diluted earnings per share          $     .46          .55          .49
                                      ===========  ===========  ===========


(8) Business Segments

     Operating  results and other financial data are presented for the principal
business  segments of the Company as of and for the years ended March 31,  2001,
2000 and 1999,  respectively.  The Company has two  distinct  business  segments
consisting of Corporate Trust services and Personal Trust services.

     In   computing   operating   profit  by  business   segment,   portions  of
administrative expenses and other items not considered direct operating expenses
were considered to be in the Corporate and Other category.  Identifiable  assets
by business segment are those assets used in each segment of Company operations.


<TABLE>
<CAPTION>
                                          Corporate     Personal    Corporate
                                           Trust          Trust       Other       Total
                                        -----------  ----------  -----------  -----------
<S>                                      <C>          <C>          <C>          <C>
March 31, 2001:
Service fee revenue                      $2,999,474   1,147,377         --      4,146,851
Interest revenue                             -            --         77,604        77,604
                                        -----------  ----------  -----------  -----------

                                         $2,999,474   1,147,377      77,604     4,224,455
                                        -----------  ----------  -----------  -----------

Operating expenses:
  General and administrative             $1,444,520     859,387    1,189,179    3,493,086
  Depreciation and amortization              54,942      10,523       87,888      153,353
                                        -----------  ----------  -----------  -----------

                                         $1,499,462     869,910    1,277,067    3,646,439
                                        -----------  ----------  -----------  -----------

Earnings(loss) before taxes              $1,500,012     277,467   (1,199,463)     578,016
                                        ===========  ==========  ===========  ===========
Identifiable assets                      $  783,583     154,103    2,113,392    3,051,078
                                        ===========  ==========  ===========  ===========
Capital expenditures                     $   21,337      15,811       56,976       94,124
                                        ===========  ==========  ===========  ===========

March 31, 2000:
Service fee revenue                      $3,149,154     693,872         --      3,843,026
Interest revenue                             --           --          66,027       66,027
                                        -----------  ----------  -----------  -----------
                                         $3,149,154     693,872       66,027    3,909,053

Operating expenses:
  General and administrative             $1,402,607     621,859    1,027,320    3,051,786
  Depreciation and amortization              52,388       7,426       73,186      133,000
                                        -----------  ----------  -----------  -----------

                                         $1,454,995     629,285    1,100,506    3,184,786
                                        -----------  ----------  -----------  -----------

Earnings (loss) before taxes             $1,694,159      64,587   (1,034,479)     724,267
                                        ===========  ==========  ===========  ===========
Identifiable assets                      $  783,024     244,919    1,736,979    2,764,922
                                        ===========  ==========  ===========  ===========
Capital expenditures                     $   56,870      11,121       84,239      152,230
                                        ===========  ==========  ===========  ===========


March 31, 1999:
Service fee revenue                      $2,454,549     565,633         --      3,020,182
Interest revenue                             --            --         52,054       52,054
                                        -----------  ----------  -----------  -----------
                                         $2,454,549     565,633       52,054    3,072,236

Operating expenses:
  General and administrative             $1,213,498     475,427      648,744    2,337,669
  Depreciation and amortization              43,887       8,035       43,393       95,315
                                        -----------  ----------  -----------  -----------

                                         $1,257,385     483,462      692,137    2,432,984
                                        -----------  ----------  -----------  -----------

Earnings (loss) before taxes             $1,197,164      82,171     (640,083)     639,252
                                        ===========  ==========  ===========  ===========
Identifiable assets                      $  484,388     190,518    1,834,333    2,509,239
                                        ===========  ==========  ===========  ===========
Capital expenditures                     $  104,646       5,805       71,908      182,359
                                        ===========  ==========  ===========  ===========

</TABLE>

<PAGE> 42

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2001, 2000 and 1999


(9) Commitments and Contingencies

     Colonial is subject to the maintenance of a minimum capital  requirement of
$500,000  pursuant to State of Arizona (the State)  banking  regulations  all of
which  must be  "liquid"  (as  defined by the  State) as of March 31,  2001.  To
satisfy this requirement,  Colonial owns certificates of deposit held with banks
totaling  $515,831 at March 31, 2001.  These assets are classified as restricted
cash in the accompanying balance sheets as of March 31, 2001.

     Colonial  is involved in lawsuits  and claims  incidental  to the  ordinary
course of its  operations.  In the opinion of management,  based on consultation
with legal counsel,  the effect of such matters will not have a material adverse
effect on the Company.

     On March 19,  2001,  Stevens  Financial  Group,  Inc.  ("Stevens")  filed a
Voluntary  Petition under Chapter 11 of the United States Bankruptcy Code in the
United  States  Bankruptcy  Court for the  District  of  Arizona  (the  "Stevens
Bankruptcy  Proceeding").  The  Company  serves as  Trustee  under  seven  Trust
Indentures which secure  obligations of Stevens under certain time  certificates
and fixed rate  investments  (debt  instruments).  Stevens has  defaulted on all
outstanding debt instruments.

     To date, no legal  proceedings  are pending  against the Company related to
the Stevens Bankruptcy Proceeding or the Company's services as Indenture Trustee
under the Trust Indentures. However, the Company has incurred costs and expenses
of  approximately  $39,324 through March 31, 2001 in connection with the Stevens
Bankruptcy  Proceeding.  These costs have been  recorded as a  receivable  as of
March 31,  2001,  as the related  trust  Indentures  specifically  indicate  the
Company  shall be  reimbursed  for these types of costs  incurred by the Company
acting as Trustee. Collection is subject to approval of the creditors and/or the
Bankruptcy Court in the Stevens Bankruptcy Proceeding.  Management believes that
the receivable is  collectible,  and that  historical and  contractual  evidence
supports recording the balance in full.

     The Company will continue to incur additional costs related to this matter.
In the event such costs are  material,  and the Company  does not  recover  such
costs,  this could have a material  adverse  effect on the  Company's  financial
condition  and results of  operations.  Additionally,  claims may be asserted or
litigation  may be  initiated  against  the  Company  relating to its service as
Indenture Trustee under the Stevens Trust Indentures.

     Additionally,  although  no  litigation  is pending or has been  threatened
against it arising from the Stevens Bankruptcy  Proceeding,  it is possible that
one or more holders of Time  Certificates or Fixed Rate Investments could assert
claims  against the Company.  Such claims would result in  additional  costs and
expenses  to the  Company.  The Company  could also suffer  damages in excess of
applicable insurance coverage limits as a result of such claims.



<PAGE> 43

Item 7.a   Qualitative Risk

     The Company does not have  significant  market risk due to the fact that it
does not have any long-term debt and does not invest in derivatives.


Item 8.    Changes in and Disagreements with Accountants
            on Accounting and Financial Disclosure.

     None







                          PART III



Item 9. Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act.

     The  following  table  contains  information  regarding  the  directors and
executive officers of the Company at March 31, 2001:

        Name                Position                  Age

    Lynn R. Camp            Chairman of the Board     64
                            and Director

    Randall K. Barton       Director                  47

    Gerald G. Morgan        Director                  45

    John K. Johnson         President and Chief       43
                            Executive Officer and
                            Director

    Cecil E. Glovier        Chief Operating Officer   49
                            Secretary

    Kurt J. Kiesling        Vice President            34

    Ian B. Currie           Controller/Treasurer      47

    Bruce L. Mitchell       Vice President            54

    Susan D. Carlisle       Vice President            41



     All directors hold office until the next annual meeting of stockholders and
the election and qualification of their successors. Lynn R. Camp was a member of
the Board of  Directors  of Church  Loans  prior to  becoming a director  of the
Company.


<PAGE> 44


     Lynn R. Camp has served as a director of the Company since June 1990 and as
Chairman of the Board since  October  1990.  From 1991 until it was sold in June
1999, he served as President,  Chief Executive Officer and a director of Turnkey
Computer  Systems,  Inc.  ("Turnkey  Computer").  Mr.  Camp has  served in these
capacities  for in  excess  of  five  years.  Turnkey  Computer  sells  computer
equipment and software and furnishes computer maintenance and repair services in
Amarillo,  Texas. Mr. Camp currently serves as a director of and a consultant to
Turnkey Computer.

     Randall K. Barton has served as a director of the Company since January 25,
2001.  Mr. Barton is President  and CEO Of Assemblies of God Financial  Services
Group, a national trust foundation,  retirement fund and lending company located
in Springfield,  Missouri.  Mr. Barton has served in these  capacities from 1992
until the present.

     Gerald G.  Morgan has served as a director  of the  Company  since  October
1990.  Mr.  Morgan is a partner in the law firm of  Burdett,  Morgan and Thomas,
located in Amarillo,  Texas. Mr. Morgan has served in this capacity for a period
in excess of 5 years.

     John K. Johnson has served as the Company's President since August 1991. He
previously served as the Company's Vice President from June 1990 to August 1991.
Mr.  Johnson was Vice  President of Trust  Company of America,  a trust  company
engaged in the business of furnishing  trust  services in  connection  with bond
offerings by churches and other non-profit  organizations,  from June 1979 until
December 1989.  Mr.  Johnson is employed  pursuant to the terms of an employment
agreement  with the Company.  See "Item  10-Executive  Compensation - Employment
Agreements" and Exhibit 10 (f) hereto.

     Cecil E.  Glovier has served as Chief  Operating  Officer/Secretary  of the
Company  since August 2000. He  previously  served as the Company's  Senior Vice
President/Secretary from August 1996 to August 2000 and Vice President/Secretary
from   November   1995   to   August   1996.   He   served   as  the   Company's
Secretary/Treasurer  from June 1990 to November  1995.  Prior to his  employment
with the Company, Mr. Glovier was engaged in the business of furnishing computer
programming  services  for a period in excess of 5 years.  During this period he
also was engaged as a mutual fund and life insurance sales  representative.  Mr.
Glovier is employed  pursuant to the terms of an employment  agreement  with the
Company.  See "Item 10 - Executive  Compensation  - Employment  Agreements"  and
Exhibit 10(g) hereto.



<PAGE> 45



     Bruce L. Mitchell has served as Vice President of the Company since January
2000.  Prior to his employment with the Company,  he served as Vice President of
M&I Bank in Phoenix,  Arizona from December 1998 to December 1999. Mr.  Mitchell
was also Vice President of Wright Investor Services from April 1993 to September
1998.

     Kurt  J.  Kiesling  has  served  as Vice  President  of the  Company  since
September 2000. He previously  served as Manager of Corporate Trust IRA and Bond
Operations  from April 1999 to August 2000,  and Manager of Corporate  Trust IRA
department  from January 1997 to March 1999.  Prior to his  employment  with the
Company,  Mr.  Kiesling  served as a Financial  Analyst for a national  HMO from
August 1995 to January  1997 and as an Internal  Auditor for the City of Phoenix
from December 1993 to July 1995.

     Ian B.  Currie  has served as  Controller/Treasurer  of the  Company  since
August 2000. Prior to his employment with the Company, he served as a Consultant
to the Company on various accounting matters from October 1999 to July 2000, and
as Controller and Investment  Administrator for a private  investment company in
Phoenix,  Arizona  from  November  1994 to  September  1999.  Mr.  Currie was an
independent  accounting  consultant from June 1993 to October 1994, and prior to
this,  served in a variety of positions  from  Accounting  Manager to Controller
with a group of privately held investment, real estate and oil and gas companies
in Houston,  Texas from May 1978 to May 1993.  Mr. Currie is a certified  public
accountant.

     Susan D.  Carlisle has served as Vice  President  of the Company  since May
1999 and Legal  Compliance  Department  Manager since July 1996.  She previously
served as Assistant  Vice  President of the Company from  November  1995 to June
1996 and Compliance  Administrator  from November 1994 to October 1995. Prior to
her employment with the Company, Ms. Carlisle was a Loan Administrator for Wells
Fargo  Realty  Advisors  and  Assistant  to the  General  Counsel  of a Property
Developer and Management Company. Ms. Carlisle is a certified legal assistant.

     Based on information  provided to it, the Company  believes that all of its
directors  and  executive  officers  have  complied  with  Section  16(a) of the
Exchange Act during the fiscal year ended March 31, 2001.



<PAGE> 46



Item 10.   Executive Compensation

     The following table sets forth certain information concerning  compensation
paid during each of the  Company's  last three fiscal  years to Messrs.  John K.
Johnson, the Company's Chief Executive Officer,  Cecil E. Glovier, the Company's
Chief  Operating  Officer,  and,  Bruce L.  Mitchell,  Company  Vice  President,
respectively (the "Named Executive Officers"):


                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                      Annual Compensation             Long-Term Compensation
                            ---------------------------------------   -----------------------
                                                                          Securities
                               Fiscal                                     Underlying
Name & Principal Position       Year       Salary        Bonus            Option/SARS(#)
-------------------------   -----------  -----------  -----------     -----------------------
<S>                         <C>          <C>          <C>          <C> <C>
John K. Johnson                 2001       $94,500      $31,393    (a)          0
  CEO-President                 2000       $95,774      $37,687    (a)       (a) (d)
                                1999       $85,833      $33,388                 0

Cecil E. Glovier                2001       $85,000      $31,359    (b)       (b) (d)
  Chief Operating Officer       2000       $80,369      $37,687    (b)          0
                                1999       $74,100      $33,388                 0

Bruce L. Mitchell               2001       $76,249      $56,192    (c)          0
  Vice President

<FN>

(a)        On July 1, 1996, Mr. Johnson was granted an option to purchase 30,000
           shares of Common Stock of the Company at an exercise price of $2.50
           per share. The option to purchase 15,000 of such shares vested
           immediately upon grant. The option to purchase the remaining 15,000
           shares vested in three equal installments of 5,000 each on July 1,
           1997, 1998 and 1999, respectively. Bonus amount excludes $4,004 and
           $3,873 contributed by the Company to the 401(k) account for Mr.
           Johnson for the fiscal years ended March 31, 2001 and 2000,
           respectively.

(b)        On October 1, 1996, Mr. Glovier was granted an option to purchase
           10,000 shares of Common Stock of the Company at an exercise price of
           $2.50 per share. The option to purchase 10,000 such shares vested
           immediately upon grant. On August 11, 1997, Mr. Glovier was granted
           an option to purchase 15,000 shares of Common Stock of the Company at
           an exercise price of $2.50 per share. The option to purchase shares
           vested in three increments of 5,000 each on August 11, 1998, 1999 and
           2000. Bonus amount excludes $2,863 and $4,086 contributed by the
           Company to the 401(k) account for Mr. Glovier for the fiscal years
           ended March 31, 2001 and 2000, respectively.


<PAGE> 47



(c)        Bonus amount excludes $2,413 contributed by the Company to the 401(k)
           account for Mr. Mitchell for the fiscal year ended March 31, 2001.

(d)        All share amounts and per-share exercise prices have been adjusted to
           reflect the 1-for-10 reverse stock split which occurred in fiscal
           1999.
</FN>
</TABLE>


     The following table sets forth certain information concerning option grants
during the Company's last fiscal year to the Company's Named Executive Officers:


                      OPTION/SAR GRANTS IN LAST FISCAL YEAR

                               (Individual Grants)


                              Number of   Percent of
                             Securities  Total Options  Exercize
                             Underlying   Granted to    or Base
                               Options   Employees in   Price
 Name & Principal Position     Granted    Fiscal Year   ($/sh)       Date
--------------------------  -----------  -----------  ----------- -----------

John K. Johnson                   0           0            N/A       N/A
  CEO-President

Cecil E. Glovier                  0           0            N/A       N/A
  Chief Operating Officer




     The following  table sets forth certain  information  concerning  (a) stock
option  exercises  during the Company's last fiscal year by the Company's  Named
Executive  Officers,  and (b) the value of unexercised stock options held by the
Named Executive Officers at March 31, 2000:


<PAGE> 48



         AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL
                           YEAR END OPTION/SAR VALUES


                                                    Securities     Unexercized
                            Shares                  Underlying     In-the-Money
                            Acquired                Unexercized    Options at
                              on        Value       Options at     FY-end($)
Name & Principal            Exercize    Realized    FY-End ($)     Exercizable
Position                     (#)         ($)        Exercisable/   Unexercisable
                                                    Unexercisable
------------------       ---------    ----------   --------------  ------------

John K. Johnson               0            0          30,000/0      $30,000/$0
CEO-President

Cecil E. Glovier              0            0          25,000/0      $25,000/$0
Chief Operating Officer




           Employment Agreements

     The Company has entered into employment  agreements  with Mr. Johnson,  the
Company's President and Mr. Glovier, the Company's Chief Operating Officer.

     Mr.  Johnson's  agreement had a three-year term that originally ran through
June 30, 1999.  Under the agreement,  Mr.  Johnson's base salary was $80,000 per
year.  The  agreement  was amended as of August 27,  1998 to  increase  the base
salary to $90,000 per year and has been  extended  through  June 30,  2002.  The
agreement  was  amended  as of  August 1, 1999 to  increase  the base  salary to
$94,500 per year. The agreement will automatically be extended for an additional
one-year term commencing July 1, 2002,  unless either the Company or Mr. Johnson
notifies the other at least sixty (60) days prior to the end of the current term
of the intention not to renew the agreement.  Mr. Johnson is also entitled to an
annual bonus each year in which the Company  generates  after-tax  net earnings,
calculated  according to the following formula:  (y) after- tax net earnings per
share, multiplied by (z) a number of shares equal to 10% of the Company's issued
and outstanding  shares of Common Stock at March 31, 1997. Upon mutual agreement
between Mr.  Johnson and the Company for the years ended March 31,2001 and 2000,
the annual bonus was reduced to an amount equal to seven and one-half percent of
the total after-tax net income. The bonuses were $31,393 and $37,687, or $10,464
and  $12,562  less than what  would  have been  paid  under the  original  bonus
agreement  for fiscal  years ended March 31, 2001 and 2000,  respectively.  Such
bonus,  if any, is payable 100 days from the end of the  Company's  fiscal year.
The agreement also provided for 30,000  incentive stock options with an exercise
price of $2.50 per share,  a total of 15,000 of which  vested  immediately  upon
grant. The remaining 15,000 options vested in three equal  installments of 5,000
each on July 1, 1997, 1998 and 1999,  respectively.  The agreement also contains
confidentiality and non-compete covenants.


<PAGE> 49


     Mr.  Glovier's  agreement had a three year term that originally ran through
August 10, 2000. Under the agreement,  Mr. Glovier's base salary was $72,000 per
year.  The  agreement  was amended as of  September 1, 1998 to increase the base
salary to $76,500 per year.  The  agreement was amended as of August 18, 1999 to
increase the base salary to $80,892 per year. A new  agreement  was entered into
on April 1, 2000 with a three year term. Under the agreement, Mr. Glovier's base
salary is $85,000 per year. The agreement will  automatically be extended for an
additional one year term  commencing  April 1, 2003 unless either the Company or
Mr. Glovier  notifies the other at least  sixty(60) days prior to the end of the
current term of the intention not to renew the  agreement.  Under the August 11,
1997  agreement Mr.  Glovier was also entitled to an annual bonus in each fiscal
year that the Company generated  after-tax net earnings (after payment of income
taxes)  calculated  according to the following  formula:  (a) for before-tax net
income of less than $100,000,  a bonus amount equal to five percent of the total
after-tax net income; (b) for before-tax net income from $100,000 to $200,000, a
bonus amount  equal to six percent of the total  after-tax  net income;  (c) for
before-tax  net income from $200,000 to $300,000,  a bonus amount equal to seven
percent of the total  after-tax net income;  and (d) for  before-tax  net income
over $300,000,  a bonus amount equal to seven and one-half  percent of the total
after-tax  net  income.  Under the terms of the  April 1,  2000  agreement,  Mr.
Glovier is also  entitled  to receive an annual  bonus each fiscal year in which
the Company generates net income (after the payment of income taxes), calculated
according to the following  formula:(y) after-tax net income per share of Common
Stock,  multiplied  by (z) a  number  of  shares  equal to  seven  and  one-half
percent(7 1/2%) of the Company's  total issued and  outstanding  Common Stock at
March 31, 2000.  Shares of Common Stock which are issuable  upon the exercise of
issued and  outstanding  (but  unexercised)  stock  options as of March 31, 2000
shall  be  excluded  for  purposes  of  calculating  the  Company's  issued  and
outstanding Common Stock in the foregoing formula.  Such bonus, if any, shall be
paid within  ninety(90)days  from the end of the Company's  fiscal year. For the
fiscal year ended March 31, 2001, Mr. Glovier  received a bonus of $31,359 under
his employment agreement.  Mr. Glovier's agreement provides for 25,000 incentive
stock options with an exercise price of $2.50 per share, a total of 10,000 which
vested  immediately  upon grant.  The remaining  15,000  options vested in three
equal   installments   of  5,000  each  on  August  11,  1998,  1999  and  2000,
respectively.  Mr.  Glovier  is also  entitled  to health  and  other  insurance
benefits  on the same  basis as the  Company's  other  executive  officers.  The
agreement also contains confidentiality and non-compete covenants.


<PAGE> 50



           Directors' Compensation

     The Company's  non-employee  directors were paid $17,100 in cash as a group
during the fiscal  year ended March 31, 2001 for  services  as  directors.  Each
director  is paid $200 per month for  serving  as a  director  and $200 for each
meeting attended.  The Chairman is paid an additional $100 per month for serving
as Chairman.  The Company's  non-employee directors also receive an annual grant
of 1,500 stock options with an exercise price equal to the then-current exercise
price of the Company's  Common Stock on the date of grant. The exercise price of
the  options  granted to such  directors  during the fiscal year ended March 31,
2001 was $3.50 per share. Directors who are also officers of the Company are not
compensated for their services as directors.


Item 11.   Security Ownership of Certain Beneficial Owners and Management.

     The following table sets forth  information as of June 1, 2001,  concerning
the Common Stock  beneficially  owned by each  director of the  Company,  by the
Company's Named Executive Officers, by all officers and directors of the Company
as a group,  and by all persons  known by the Company to own more than 5% of the
Company's issued and outstanding Common Stock:




       Name and Address                  Amount and Nature            Percent
       of Beneficial Owner               of Beneficial Owner(1)       of Class

       Lynn R. Camp                 (2)  25,602 shares                3.4%
       3517 Tripp
       Amarillo, Texas 79121

       Randall K. Barton                 31,431 shares                4.3%
       5337 S. Stonehaven Dr
       Springfield, Mo 65809

       Gerald G. Morgan, Jr.        (2)  18,581 shares                2.5%
       4705 Olsen
       Amarillo, Texas 79106

       John K. Johnson              (3)  40,976 shares                5.4%
       3414 E. Clark Road
       Phoenix, Arizona 85024

       William and Sue Johnson      (4)  45,586 shares                6.2%
       14001 Interstate 27
       Amarillo, Texas 79119

       Cecil E. Glovier             (5)  28,074 shares                3.7%
       16925 Roadrunner Road
       Mayer, Arizona 86333

       Bruce L. Mitchell                 1,000  shares                (6)
       1974 E. McNair Dr
       Tempe, AZ 85283-4922


       Directors and Executive
         Officers as a Group
             (6 persons)                 145,664 shares               17.9%


<PAGE> 51


     (1) Calculated pursuant to Rule 13d-3(d) under the Exchange Act. Shares not
outstanding  that are subject to options or warrants  exercisable  by the holder
thereof within 60 days of June 30, 2001 are deemed  outstanding for the purposes
of calculating the number and percentage owned by such shareholder,  but are not
deemed  outstanding for the purpose of calculating the percentage  owned by each
other  shareholder  listed.  Except as  otherwise  noted,  all shares  listed as
beneficially  owned  by  a  shareholder  are  actually  outstanding.  Except  as
described  above and as otherwise  noted,  all figures are based upon a total of
732,290 shares of Common Stock issued and outstanding.

     (2) The totals for Messrs.  Camp and Morgan include 12,500 shares of Common
Stock subject to immediately  exercisable  options held by each of Messrs.  Camp
and Morgan with the following  exercise prices per share: 6,500 shares at $2.50,
3,000 shares at $3.00, 1,500 shares at $3.25 and 1,500 shares at $3.50.

     (3) The total  for Mr.  Johnson  includes  30,000  shares  of Common  Stock
subject to immediately exercisable options which have an exercise price of $2.50
per share.

     (4) Includes 35,032 shares owned by Amberwood  Management Co., of which Mr.
and Mrs. Johnson, through trusts of which they are the sole trustees, own all of
the issued and  outstanding  shares of capital stock of Amberwood.  Mr. and Mrs.
Johnson  therefore  control the disposition of the shares owned by Amberwood and
may be deemed the beneficial owners of such shares. Mr. and Mrs. Johnson are the
parents of Mr. John K. Johnson.

     (5) The total  for Mr.  Glovier  includes  25,000  shares  of Common  Stock
subject to immediately exercisable options which have an exercise price of $2.50
per share.

     (6) Represents less than one percent of the outstanding Common Stock.


     The  Company  has no  knowledge  of any  arrangement  which may result in a
change of control of the Company.


<PAGE> 52



Item 12.   Certain Relationships and Related Transactions.

     None.



Item 13.   Exhibits and Reports on Form 8-K.

    (a)(1) Financial Statements of the Company are set forth in Part II, Item 7.

       (2)    Exhibits

   Exhibit Number                                                   Page Number

     3.    (i)       Articles of Incorporation                               *
           (ii)      By-Laws                                                 *

    10.    (a)       Form of IRA Account Agreement                          **
           (b)       Form of Trust Indenture Agreement                      **
           (c)       Employment Agreement with John K. Johnson
                     dated July 1, 1996                                    ***
           (d)       First Amendment to Employment agreement with
                     John K. Johnson dated August 27, 1998                 ***
           (e)       Letter Amendment to Employment Agreement with
                     John K. Johnson dated August 2, 1999                  ***
           (f)       Employment Agreement with Cecil E. Glovier
                     dated August 11, 1997                                 ***
           (g)       First Amendment to Employment Agreement with
                     Cecil E. Glovier dated September 1, 1998              ***
           (h)       Employment Agreement with Cecil E. Glovier
                     dated April 1, 2000                                   ***
           (i)       Employee Stock Option Plan dated
                     April 25, 1996                                        ***
           (j)       Non-Employee Directors Stock Option Plan dated
                     April 25, 1996                                        ***


   *        Incorporated by reference to Exhibit No. 3 to the
            Registrant's Form 10 dated October 24, 1990.

  **        Incorporated by reference to Exhibit No. 10 to Registrant's
            Annual Report on Form 10-KSB dated June 21, 1991

 ***        Filed herewith.

           (b) Reports on Form 8-K

                None.


<PAGE> 53



                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                          COLONIAL TRUST COMPANY


                                                            BY:/s/ Ian B. Currie
                                                                   Ian B. Currie
                                                            Controller/Treasurer
                                                        (Principal Financial and
                                                             Accounting Officer)

Date:  June 29, 2001

     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.


   Signature                    Title                      Date


* Lynn R. Camp                 Chairman of the Board    June 29, 2001
Lynn R. Camp


* Randall K. Barton            Director                 June 29, 2001
Randall K. Barton


* Gerald G. Morgan             Director                 June 29, 2001
Gerald G. Morgan


* John K. Johnson              President and            June 29, 2001
John K. Johnson                Director
                               (Principal Executive
                                Officer)


*By: /s/ Ian B. Currie
     Ian B. Currie
     Attorney-in-Fact


<PAGE> 54

Exhibit 10(c)

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT  AGREEMENT (the  'Agreement') is entered into as of July 1,
1996, by and between  COLONIAL TRUST COMPANY,  an Arizona  corporation  with its
principal  place of business in Phoenix,  Arizona (the  'Company'),  and JOHN K.
JOHNSON, a resident of the State of Arizona ('Johnson').

                                    RECITALS

     A. Johnson is the President and Chief Executive Officer of the Company.

     B. Johnson is currently an at-will employee of the Company.

     C. The  Company is  engaged in the  following  businesses:(i)  the  Company
serves as trustee and paying  agent on bond  financings  for  churches and other
non-profit  organizations located throughout the United States; (ii) the Company
serves as trustee of self-directed  individual  retirement  accounts for certain
bondholders  or employees of non-profit  organizations  located  throughout  the
United  States,  and (iii) the  Company  serves as trustee  or agent,  providing
investment  management,  administration  and  custodial  services  for  trust or
investment agency accounts, most of which accounts are located in Arizona.

     D. The Company and Johnson desire to continue  Johnson's  relationship with
the  Company  and to  memorialize  the terms of  Johnson's  employment  with the
Company.
                                    AGREEMENT

     1.  Employment.  The Company hereby continues to employ Johnson and Johnson
hereby accepts such  employment  upon the terms and conditions set forth herein.
Johnson shall continue to reside in Phoenix, Arizona.

     2. Duties of  Employment.  Johnson shall continue to serve as President and
Chief  Executive  Officer of the  Company.  In such  capacities,  Johnson  shall
continue to perform such duties and services,  consistent with Johnson's role as
the Company's senior executive officer,  as the Board of Directors may assign or
delegate to him from time to time.  Johnson also currently  serves as a director
of the Company;  during the term of this  Agreement,  the Company shall nominate
Johnson for  election as a director  and shall use its best efforts to cause the
shareholders of the Company to re-elect Johnson as a director of the Company for
so long as Johnson  remains  President  and Chief  Executive  Officer under this
Agreement.  In the event that Johnson voluntarily terminates his employment with
the  Company or the Company  terminates  Johnson's  employment  with the Company
pursuant  to  Section  5 of  this  Agreement,  then  Johnson  agrees  to  resign
immediately as a director of the Company.

     Throughout  the term of this  Agreement,  Johnson  will  devote  his entire
working time,  energy,  skill and best efforts to the  performance of his duties
hereunder in a manner which will faithfully and diligently  further the business
interests  of the  Company.  Notwithstanding  the  foregoing,  Johnson  shall be
permitted to serve as a director of additional  organizations and participate in
other  activities  for  other  groups  upon the prior  approval  of the Board of
Directors.

     3. Term.  This Agreement  shall commence on July 1, 1996 and shall continue
in effect until June 30, 1999. The Agreement shall automatically be extended for
one year terms  commencing as of July 1, 1999 and  thereafter at the end of each
successive  year  commencing  on July 1 unless  either  the  Company  or Johnson
notifies the other party in the manner  provided  herein of his or its intention
not to renew the  Agreement  at least  sixty  (60) days  prior to the end of the
then-current term.

     4.   Compensation  and  Benefits.   Johnson  shall  receive  the  following
compensation for his services during his term of employment hereunder:

     (a)  Salary.  Johnson  shall  receive a base  salary of  $80,000  per year,
payable  in  accordance  with the  standard  payroll  policies  of the  Company.
Additionally, Johnson shall receive an annual performance and salary review from
the Board of Directors,

     (b)  Bonuses.  Johnson  shall be entitled  to receive an annual  bonus each
fiscal  year in which the  Company  generates  net income  (after the payment of
income taxes),  calculated according to the following formula: (y) after-tax net
income per share of Common Stock,  multiplied by (z) a number of shares equal to
ten percent (10%) of the Company's total issued and outstanding  Common Stock at
March 31, 1997.  Shares of Common Stock which are issuable  upon the exercise of
issued and  outstanding  (but  unexercised)  stock options as of March 31,  1997
shall  be  excluded  for  purposes  of  calculating  the  Company's  issued  and
outstanding Common Stock in the foregoing formula.  Such bonus, if any, shall be
paid one  hundred  (100) days from the end of the  Company's  fiscal  year.  The
Company  and  Johnson  shall use their  best  efforts  to cause such bonus to be
treated as an expense of the Company  during the fiscal year in which such bonus
is earned, not the year in which such bonus is paid.

     As an example of the above  formula,  if the  Company  earns $.01 per share
during a particular  year in which this Agreement is in effect,  and the Company
has 8,000,000  shares of Common Stock issued and  outstanding at March 31, 1997,
then Johnson's bonus would be $8,000:  (y) $.01,  multiplied by (z) 800,000 (10%
of the total number of issued and outstanding shares).

     (c) Stock Options.  Concurrently with the execution of this Agreement,  the
Company  has  granted  to  Johnson  options to  purchase  300,000  shares of the
Company's  Common Stock pursuant to the Company's  Employee Stock Option Plan at
an exercise  price of $.25 per share.  Options to purchase  150,000 shares shall
vest immediately. Options to purchase the remaining 150,000 shares shall vest in
three  equal  increments  of  50,000  shares  on July 1,  1997,  1998 and  1999,
respectively;  the exercise  price for all such options shall be $.25 per share.
Notwithstanding  the  foregoing,  however,  all options which are subject to the
above  vesting  schedule  shall vest  immediately  in the event  that  Johnson's
employment  is  terminated  by the Company for any reason other than a breach by
Johnson of Section 5 hereof.

     (d) Medical  Insurance.  The Company will provide  coverage for Johnson and
his dependents under the Company's health insurance policy.

     (e) Life  Insurance.  The Company  will  procure  and  maintain in effect a
$1,000,000  term  life  insurance  policy  insuring  Johnson's  life,  provided,
however, if Johnson is not insurable at regular rates, the Company will purchase
a term life insurance  policy only in such amount as it may purchase by paying a
premium  equal to the  amount it would  have paid for a  $1,000,000  policy  had
Johnson  been  insurable  at regular  rates.  In the event of  Johnson's  death,
one-half  of the face  amount of the policy  shall be payable to the Company and
the  other  half  of  the  face  amount  of  the  policy  shall  be  payable  to
beneficiaries designated by Johnson.

     (f) Disability Insurance; Disability Payments by Company. The Company is in
the process of developing a policy concerning  disability insurance coverage for
its senior executives. The Company agrees to develop such a policy within twelve
(12) months of the date  hereof.  When such a policy is  developed,  the Company
agrees that Johnson will be provided  the same level of  disability  coverage as
the Company provides for its other senior executives. Until disability insurance
is provided for Johnson as described  above,  the Company agrees that if Johnson
becomes  unable to perform  his duties  under this  Agreement  due to partial or
total  disability,  the Company will continue to pay  Johnson's  base salary set
forth in Section 4(a) hereof at its then-current rate for a period of twenty-six
(26) weeks following such disability.

     5.  Termination.   The  Company  may  terminate  this  Agreement  upon  the
occurrence of any of the following:

     (a) The death of Johnson; or

     (b)  Subject to Section  4(f)  above,  Johnson's  inability  to perform his
duties under this  Agreement  for a period of more than ninety (90)  consecutive
days due to total or partial disability; or

     (c) If Johnson fails to perform his duties to the Company  hereunder to the
satisfaction  of  the  Company's  Board  of  Directors;  commits  such  acts  of
dishonesty,  theft or fraud as would  prevent the effective  performance  of his
duties hereunder;  breaches the terms of Section 6 or 7 of this Agreement; or is
convicted of a crime which would prevent the effective performance of his duties
hereunder.

     Any  termination of Johnson's  employment  will be effective upon Johnson's
receipt of written notice of such  termination,  and such  termination  shall be
without  prejudice  to any other  remedy to which the  Company  may be  entitled
either at law, in equity or under this Agreement.

     6.  Confidentiality.  All information  furnished to Johnson by the Company,
learned by Johnson  from the  Company or  developed  by Johnson on behalf of the
Company or at the  Company's  direction or for the Company's use or otherwise in
connection with Johnson's  employment  hereunder,  are and shall remain the sole
and confidential property of the Company; provided,  however, that the foregoing
shall not apply to any such  information  in the  public  domain  other  than by
reason of a breach of this Section 6. During the term of this  Agreement  and at
all times  thereafter,  Johnson shall not use for his own personal  benefit,  or
disclose,  communicate or divulge to, or use for the direct or indirect  benefit
of any  person,  firm,  association  or  company  other  than the  Company,  any
information  or  material  referred  to in this  Section  6 or any  confidential
information  regarding  the business  methods,  business  policies,  procedures,
techniques, trade secrets or other knowledge or processes of or developed by the
Company  or any  names  and  addresses  of  customers  or  clients  or any other
confidential  information  relating  to past,  present or  prospective  business
operations  or  activities  of the Company,  made known to Johnson or learned or
acquired by Johnson while in the employ of the Company.

     Johnson  further  agrees that at the  expiration of his  employment for any
reason whatsoever,  he shall surrender and deliver to the Company all documents,
correspondence  and any  other  data,  of any type  whatsoever  relating  to the
business of the Company or its customers or potential customers.

     7.  Non-Competition.  During the term of his employment and for a period of
twelve (12) months  following the  termination of Johnson's  employment with the
Company,  Johnson  shall not  directly  or  indirectly,  either as an  employee,
employer, consultant, agent, principal, partner, shareholder, corporate officer,
director,  or in any other  individual  or  representative  capacity,  engage or
participate  in any  business  that is in  competition  in any  manner  with the
business of the Company.  Notwithstanding the foregoing, however, this Section 7
shall automatically terminate and be of no further force or effect whatsoever in
the event that the Company terminates  Johnson's employment with the Company for
any reason other than a breach by Johnson of Section 5 of this Agreement.

     8. Injunctive Relief.  Johnson acknowledges that the restrictions contained
in  Sections 6 and 7 hereof in view of the nature of the  business  in which the
Company is  engaged,  are  reasonable  and  necessary  in order to  protect  the
legitimate interests of the Company, and that any violation thereof would result
in irreparable injuries to the Company, and Johnson therefore acknowledges that,
in the event of his violation of any of the restrictions set forth in Sections 6
or 7 hereof, the Company shall be entitled to obtain from any court of competent
jurisdiction  preliminary and permanent  injunctive  relief as well as any other
relief to which the Company may be entitled.

     9. Governing Law. This Agreement  shall be interpreted  and construed under
the laws of the State of Arizona,  which laws shall  prevail in the event of any
conflict of law.  This  Agreement  and the  obligations  hereunder  are made and
performable in Maricopa County,  Arizona, which shall be the exclusive venue for
any litigation hereunder.

     10.  Modification of Contract.  No waiver or modification of this Agreement
shall be valid unless it is in writing and duly executed by both parties.

     11. Judicial  Modification of Agreement.  If the period of time or the area
specified  in  Sections 6 or 7 herein  should be  adjudged  unreasonable  in any
proceeding, then the period of time shall be reduced by such number of months or
the area shall be reduced by the  elimination of such portion thereof or both so
that such  restrictions  may be  enforced  in such area and for such time and is
adjudged to be reasonable. If Johnson violates any of the restrictions contained
in Sections 6 or 7 of this Agreement,  then the restrictive period shall not run
in favor of  Johnson  from the time of the  commencement  of any such  violation
until such time as such violation shall be cured by Johnson to the  satisfaction
of the Company.

     12. Notices.  Any notice to be given hereunder by either party to the other
shall be in writing  and may be  transmitted  by  personal  delivery or by mail,
registered or certified,  postage prepaid with return receipt requested. Notices
shall be addressed to the parties at the following addresses:

                  If to the Company:                 Colonial Trust Company
                                                     5336 N. 19th Avenue
                                                     Phoenix, Arizona 85015
                                  Attention: Chairman of the Board of Directors

                  If to Johnson:                     Mr. John K. Johnson
                                                     3414 E. Clark Road
                                                     Phoenix, Arizona 85024

     13.  Entire  Agreement.  This  Agreement  contains the  complete  agreement
concerning  the  employment  arrangement  between the Company and  Johnson.  The
parties  acknowledge that any statements or  representations  that may have been
made previously by either of them to the other are of no effect and that neither
of them has relied on such considerations in executing this Agreement.

     14.  Attorneys'  Fees.  In the event of a  dispute  or  litigation  arising
hereunder,  the successful party in such dispute or litigation shall be entitled
to recover its costs and  reasonable  attorneys'  fees from the other parties to
such dispute or litigation.

         DATED as of July 1, 1996.


         COLONIAL TRUST COMPANY


         By /s/ Lynn R. Camp                              /s/ John K. Johnson
                  Lynn R. Camp                                John K. Johnson
                  Its Chairman of the Board


<PAGE> 55

Exhibit 10(d)

                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT


     THIS FIRST  AMENDMENT TO EMPLOYMENT  AGREEMENT  (the 'First  Amendment') is
made and  entered  into as of August  27,  1998 by and  between  COLONIAL  TRUST
COMPANY, an Arizona corporation with its principal place of business in Phoenix,
Arizona  (the  'Corporation')  and JOHN K.  JOHNSON,  a resident of the State of
Arizona ('Employee').

                                    RECITALS

     WHEREAS,  the  Corporation  and  Employee  are  parties  to  an  Employment
Agreement dated July 1, 1996 (the 'Employment Agreement'); and

     WHEREAS,  the parties  wish to amend the  Employment  Agreement  in certain
respects.

     NOW, THEREFORE, the parties hereby agree as follows:

                                    AGREEMENT

     1. Paragraph 3 of the Employment  Agreement is hereby amended to extend the
term of the Employment Agreement to June 30, 2001.

     2. Paragraph 4(a) of the Employment Agreement is hereby amended to increase
Employee's base salary to $90,000.00 per year effective as of the date hereof.

     3. The  Employment  Agreement  shall remain in full force and effect in its
original form, except as specifically modified herein.


                             COLONIAL TRUST COMPANY


                  By /s/ Lynn R. Camp
                        Lynn R. Camp
                        Its Chairman of the Board

                        CORPORATION


                     /s/ John K. Johnson
                        John K. Johnson

                        EMPLOYEE



<PAGE> 56

Exhibit 10(e)



August 2, 1999

Mr. John K. Johnson, President
Colonial Trust Company
5336 North 19th Avenue
Phoenix, AZ  85015

Dear John:

     The Directors of Colonial Trust Company have completed a performance review
of your  activities  as President of the Company for the fiscal year ended March
31, 1999.

     Under your direction,  Colonial Trust Company  exceeded its budgeted profit
goals for the year. The  outstanding  performance of the Company  resulted in an
81%  increase in Earnings Per Share from  $.27/share  in 1998 to  $.49/share  in
1999.   These  excellent   results  provided  a  15%  Return  on  Investment  to
shareholders who purchased Colonial stock at $3.25/share.

     You demonstrated  strong  leadership when you made the difficult  decisions
related  to the  Company's  future  computer  technology  needs.  You also  have
continued to build a first rate  management  team that is motivated to provide a
good return for Colonial shareholders.

     The Board would like to  challenge  you to continue to reward and  motivate
your key people not just by short term goals (annual budgets, etc.), but also by
focusing on the long term goals of the  Company  (shareholder's  equity  growth,
liquidity,  market  domination,  etc.).  In  addition,  the Board  would like to
challenge  you to find and  implement  a faster  growth  path for the  Company's
Personal Trust Division.

     Overall,  we feel that you have done a great job as  President  of Colonial
Trust Company over the past year. Because of your performance, the Board desires
to raise your base  salary  from  $85,833  to  $94,500.  Please  make the salary
increase effective April 1, 1999.




/s/ Lynn R. Camp     /s/ Gerald G. Morgan        /s/ Michael W. Borger
Lynn R. Camp         Gerald G. Morgan            Michael W. Borger
Chairman             Director                    Director



<PAGE> 57

Exhibit 10(f)


                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT  AGREEMENT  (hereinafter called the "Agreement") is entered
into as of August 11,  1997, by and between  COLONIAL TRUST COMPANY,  an Arizona
corporation  (hereinafter  called  the  "Company"),  with its  principal  office
located at 5336 N. 19th Avenue,  Phoenix,  Arizona 85015,  and Cecil E. Glovier,
residing at 16925 Roadrunner Road, Mayer, Arizona 86333 (hereinafter referred to
as "Glovier").

     Glovier is presently  employed by the Company as Senior Vice  President and
Secretary. The Company and Glovier desire to formalize their relationship.

     NOW, THEREFORE,  in consideration of the premises and the mutual agreements
hereinafter set forth, the parties do hereby agree as follows:

     1.  Employment.  The Company hereby continues to employ Glovier and Glovier
hereby accepts continued  employment by the Company as Senior Vice President and
Secretary to perform such duties and  services of a senior  executive  nature as
may from time to time be assigned or  delegated to him by the Board of Directors
and President of the Company.

     Throughout  the term of this  Agreement,  Glovier  will  devote  his entire
working time,  energy,  skill and best efforts to the  performance of his duties
hereunder in a manner which will faithfully and diligently  further the business
interests  of the  Company.  Notwithstanding  the  foregoing,  Glovier  shall be
permitted to serve as a director of additional  organizations and participate in
other activities for other groups upon the prior approval by the Company,  which
approval shall not unreasonably be withheld.

     2. Term. This Agreement shall be for a term of three (3) years,  commencing
on August 11,  1997, and ending on August 10,  2000, unless sooner terminated as
hereinafter provided.  Unless either party elects to terminate this Agreement at
the end of the  original or any renewal term by giving the other party notice of
such election at least sixty (60) days before the expiration of the then current
term, this Agreement shall be deemed to have been renewed for an additional term
of one (1) year  commencing on the day after the  expiration of the then current
term.

     3. Compensation and Benefits.

     (a) Salary. For the services rendered by Glovier to Company,  Glovier shall
receive a base  salary at the rate of $72,000  per year,  payable in  accordance
with the standard payroll practices of the Company. Additionally,  Glovier shall
receive  an annual  performance  and salary  review  from the  President  of the
Company.

     (b) Bonus. Glovier shall be entitled to receive an annual bonus each fiscal
year in which the  Company  generates  net income  (after the  payment of income
taxes), calculated according to the following formula: for before-tax net income
of less  than  $100,000,  a bonus  amount  equal to five  percent  of the  total
after-tax net income;  for  before-tax  net income from $100,000 to $200,000,  a
bonus  amount  equal to six  percent  of the total  after-tax  net  income;  for
before-tax  net income from $200,000 to $300,000,  a bonus amount equal to seven
percent of the total  after-tax  net  income;  for  before-tax  net income  over
$300,000,  a bonus  amount  equal to seven  and  one-half  percent  of the total
after-tax net income.  Such bonus, if any, shall be paid within ninety (90) days
from the end of the  Company's  fiscal year.  The Company and Glovier  shall use
their  best  efforts  to cause  such  bonus to be  treated  as an expense of the
Company  during the fiscal  year in which such bonus is earned,  not the year in
which bonus is paid.

     (c) Stock  Options.  In addition  to the  monetary  compensation  set forth
above,  Glovier  will have the  opportunity  to acquire up to 150,000  shares of
Common  Stock of the Company  pursuant to the  Company's  Employee  Stock Option
Plan.  Options  shall vest in three  increments  of 50,000  shares on August 11,
1998, 1999 and 2000, respectively; the exercise price for all such options shall
be $.25 per share.

     (d) Medical  Insurance.  The Company will provide  coverage for Glovier and
his dependents under the Company's health insurance policy.

     (e) Life  Insurance.  The Company  will  procure  and  maintain in effect a
$500,000 term life insurance policy insuring Glovier's life; provided,  however,
if Glovier is not insurable at regular  rates,  the Company will purchase a term
life policy only in such amount as it may purchase by paying a premium  equal to
the amount it would have paid for a $500,000  policy had Glovier been  insurable
at regular rates. In the event of Glovier's  death,  one-half of the face amount
of the policy  shall be payable  to the  Company  and the other half of the face
amount  of the  policy  shall be  payable  to the  beneficiaries  designated  by
Glovier.

     (f)  Disability  Insurance,  Disability  Payments by  Company.  The Company
agrees that Glovier will be provided  the same level of  disability  coverage as
the Company provides for its other senior executives.

     4. Termination for Cause. The Company may terminate this Agreement upon the
occurrence of any of the following:

     (a) The death of Glovier; or

     (b)  Subject to Section  3(f)  above,  Glovier's  inability  to perform his
duties under this  Agreement  for a period of more than ninety (90)  consecutive
days due to total or partial disability; or

     (c) If Glovier fails to perform his duties to the Company  hereunder to the
satisfaction  of  the  Company's  Board  of  Directors;  commits  such  acts  of
dishonesty,  theft or fraud as would  prevent the effective  performance  of his
duties  hereunder;  breaches  the terms of Section 5  of this  Agreement;  or is
convicted of a crime which would prevent the effective performance of his duties
hereunder.

     Any  termination of Glovier's  employment  will be effective upon Glovier's
receipt of written notice of such  termination,  and such  termination  shall be
without  prejudice  to any other  remedy to which the  Company  may be  entitled
either at law, in equity or under this Agreement.

     5. Confidential Information, Non-Solicitation.

     (a) Confidential Information,  Non-Solicitation.  All information furnished
to Glovier by the  Company,  learned by Glovier from the Company or developed by
Glovier  on behalf  of the  Company  or at the  Company's  direction  or for the
Company's use or otherwise in connection  with Glovier's  employment  hereunder,
are and  shall  remain  the  sole  and  confidential  property  of the  Company;
provided,  however, the foregoing shall not apply to any such information in the
public  domain  other  than by reason of a breach  of this  Paragraph 5.  If the
Company  requests the return of  information  or any such  materials at any time
during or at the termination of Glovier's employment,  Glovier shall immediately
deliver the same to the Company.  During the term of this  Agreement  and at all
times thereafter,  Glovier shall not use for his personal benefit,  or disclose,
communicate  or  divulge  to, or use for the direct or  indirect  benefit of any
person,  firm,  association  or company  other than the  Company,  any  material
referred to in this  Paragraph 5 or any confidential  information  regarding the
business methods, business policies,  procedures,  techniques,  trade secrets or
other  knowledge  or  processes  of or developed by the Company or any names and
addresses of customers or clients or any other confidential information relating
to past,  present  or  prospective  business  operations  or  activities  of the
Company,  made known to Glovier or learned or acquired  by Glovier  while in the
employ of the Company.

     (b) Non-Solicitation. During the term of this Agreement and for a period of
one (1) year after the  termination of his  employment  with the Company for any
reason whatsoever,  Glovier shall not, directly or indirectly,  solicit, induce,
encourage or attempt to influence any client,  customer,  employee,  consultant,
independent  contractor,  salesman or supplier of the Company (including without
limitation any broker/dealer with whom the Company does or has done business) to
cease to do business  with or to terminate his  employment  with the Company and
shall not utilize for any such  purpose any names and  addresses of customers or
clients  of the  Company  or  any  data  on or  relating  to  past,  present  or
prospective  (at the time of termination of Glovier's  employment)  customers or
clients of the Company.

     6.  Arbitration  of Disputes.  Any  controversy  or claim arising out of or
relating  to  this  Agreement,  or the  breach  thereof,  shall  be  settled  by
arbitration   in  accordance   with  the  rules  of  the  American   Arbitration
Association.  Judgment upon the award  rendered by the arbitrator may be entered
in any court having jurisdiction thereof.

     7.  Modification  of Contract.  No waiver or modification of this Agreement
shall be valid unless it is in writing and duly executed by both parties.

     8.  Severability.   All  agreements  and  covenants  contained  herein  are
severable, and in the event any of them shall be held to be invalid by any court
of  competent  jurisdiction,  this  Agreement  shall be  interpreted  as if such
invalid agreements and covenants were not contained herein.

     9. Governing Law, Venue for  Arbitration.  This Agreement takes effect upon
its  acceptance and execution by the Company in Phoenix,  Arizona,  and shall be
interpreted  and  construed  under the laws of the State of Arizona,  which laws
shall  prevail  in the event of any  conflict  of law.  This  Agreement  and the
obligations  hereunder are made and  performable  in Maricopa  County,  Arizona,
which shall be the exclusive venue for any arbitration hereunder.

     10. Notice.  Any notice to be given  hereunder by either party to the other
shall be in writing  and may be  transmitted  by  personal  delivery or by mail,
registered or certified,  postage prepaid with return receipt requested to their
respective addresses  hereinabove  provided, or to the Company or Glovier at its
or his last known address.

     11.  Entire  Agreement.  This  Agreement  contains the  complete  agreement
between the Company and Glovier  concerning the employment  arrangement  between
the  Company  and  Glovier.  The  parties  acknowledge  that any  statements  or
representations  that may have been made previously by either one of them to the
other (other than those  contained in this  Agreement) are of no effect and that
neither of them has relied on such considerations in executing this Agreement.

     IN WITNESS  WHEREOF,  the parties have executed or caused this Agreement to
be executed as of the date, month and year first above written.

COLONIAL TRUST COMPANY


    BY   /s/ John K. Johnson
         John K. Johnson
         President and Chief Executive Officer
         COMPANY

    BY:  /s/ Cecil E. Glovier
         Cecil E. Glovier


<PAGE> 58

Exhibit 10(g)



                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT


     THIS FIRST  AMENDMENT TO EMPLOYMENT  AGREEMENT  (the "First  Amendment") is
made and entered  into as of  September  1, 1998 by and between  COLONIAL  TRUST
COMPANY, an Arizona corporation with its principal place of business in Phoenix,
Arizona (the  "Corporation")  and CECIL E.  GLOVIER,  a resident of the State of
Arizona ("Employee").

                                    RECITALS

     WHEREAS,  the  Corporation  and  Employee  are  parties  to  an  Employment
Agreement dated August 11, 1997 (the "Employment Agreement"); and

     WHEREAS,  the parties  wish to amend the  Employment  Agreement  in certain
respects.

     NOW, THEREFORE, the parties hereby agree as follows:

                                    AGREEMENT

     1. Paragraph 3(a) of the Employment Agreement is hereby amended to increase
Employee's base salary to $76,500 per year effective as of the date hereof.

     2. The  Employment  Agreement  shall remain in full force and effect in its
original form, except as specifically modified herein.


                              COLONIAL TRUST COMPANY
                              By /s/ John K. Johnson
                                 John K. Johnson
                                 Its President

                                 CORPORATION


                               By /s/ Cecil E. Glovier
                                  Cecil E. Glovier

                                  EMPLOYEE


<PAGE> 59


Exhibit 10(h)


                              EMPLOYMENT AGREEMENT
                               (Cecil E. Glovier)


     THIS EMPLOYMENT  AGREEMENT  (hereinafter called the "Agreement") is entered
into as of April 1,  2000, by and between  COLONIAL  TRUST  COMPANY,  an Arizona
corporation  (hereinafter  called  the  "Company"),  with its  principal  office
located at 5336 N. 19th Avenue,  Phoenix,  Arizona 85015,  and Cecil E. Glovier,
residing at 16925 W. Roadrunner Road, Mayer, Arizona 86333 (hereinafter referred
to as "Glovier").

     Glovier is presently  employed by the Company as Senior Vice  President and
Secretary.

     NOW, THEREFORE,  in consideration of the premises and the mutual agreements
hereinafter set forth, the parties do hereby agree as follows:

     1.  Employment.  The Company hereby continues to employ Glovier and Glovier
hereby accepts continued  employment by the Company as Senior Vice President and
Secretary to perform such duties and  services of a senior  executive  nature as
may from time to time be assigned or  delegated to him by the Board of Directors
and President of the Company.

     Throughout  the term of this  Agreement,  Glovier  will  devote  his entire
working time,  energy,  skill and best efforts to the  performance of his duties
hereunder in a manner which will faithfully and diligently  further the business
interests  of the  Company.  Notwithstanding  the  foregoing,  Glovier  shall be
permitted to serve as a director of additional  organizations and participate in
other activities for other groups upon the prior approval by the Company,  which
approval shall not unreasonably be withheld.

     2. Term. This Agreement shall be for a term of three (3) years,  commencing
on April 1, 2000,  and ending on March 31, 2003,  unless  sooner  terminated  as
hereinafter provided.  Unless either party elects to terminate this Agreement at
the end of the  original or any renewal term by giving the other party notice of
such election at least sixty (60) days before the expiration of the then current
term, this Agreement shall be deemed to have been renewed for an additional term
of one (1) year  commencing on the day after the  expiration of the then current
term.

     3. Compensation and Benefits.

     (a) Salary. For the services rendered by Glovier to Company,  Glovier shall
receive a base  salary at the rate of $85,000  per year,  payable in  accordance
with the standard payroll practices of the Company. Additionally,  Glovier shall
receive  an annual  performance  and salary  review  from the  President  of the
Company.

     (b) Bonus. Glovier shall be entitled to receive an annual bonus each fiscal
year in which the  Company  generates  net income  (after the  payment of income
taxes),  calculated according to the following formula: (y) after-tax net income
per share of Common  Stock,  multiplied by (z) a number of shares equal to seven
and one-half  percent  (7 1/2%) of the  Company's  total issued and  outstanding
Common Stock at March 31, 2000.  Shares of Common Stock which are issuable  upon
the exercise of issued and  outstanding  (but  unexercised)  stock options as of
March 31,  2000 shall be excluded  for  purposes of  calculating  the  Company's
issued and  outstanding  Common Stock in the foregoing  formula.  Such bonus, if
any, shall be paid within ninety (90) days from the end of the Company's  fiscal
year.  The Company and Glovier  shall use their best efforts to cause such bonus
to be treated as an expense of the Company  during the fiscal year in which such
bonus is earned, not the year in which bonus is paid.

     (c) Stock  Options.  In addition  to the  monetary  compensation  set forth
above, Glovier will have the opportunity to acquire up to 5,000 shares of Common
Stock of the Company  pursuant to the  Company's  Employee  Stock  Option  Plan.
Options shall vest on August 11,  2000;  the exercise price for all such options
shall be $2.50  per  share.  This is a  continuation  of a grant of  options  as
originally set forth in that certain Employment Agreement dated August 11, 1997,
but adjusted for the effect of a reverse  stock split  conducted  during  fiscal
1999.

     (d) Medical  Insurance.  The Company will provide  coverage for Glovier and
his dependents under the Company's health insurance policy.

     (e) Life  Insurance.  The Company  will  procure  and  maintain in effect a
$500,000 term life insurance policy insuring Glovier's life; provided,  however,
if Glovier is not insurable at regular  rates,  the Company will purchase a term
life policy only in such amount as it may purchase by paying a premium  equal to
the amount it would have paid for a $500,000  policy had Glovier been  insurable
at regular rates. In the event of Glovier's  death,  one-half of the face amount
of the policy  shall be payable  to the  Company  and the other half of the face
amount  of the  policy  shall be  payable  to the  beneficiaries  designated  by
Glovier.

     (f)  Disability  Insurance,  Disability  Payments by  Company.  The Company
agrees that Glovier will be provided  the same level of  disability  coverage as
the Company provides for its other senior executives.

     4. Termination of This Agreement and Glovier's Employment.

     (a)  Mandatory  Termination.   This  Agreement  shall  terminate  upon  the
expiration of the then-existing term in the event that either party gives notice
of such  party's  election  to then  terminate  the  Agreement  as set  forth in
paragraph 2 hereof. Furthermore,  this Agreement shall terminate in the event of
the death of Glovier subject to paragraph 3(e) hereof.

     (b) Discretionary  Termination for "Cause".  The Company may terminate this
Agreement and Glovier's employment at any time for "cause." For purposes of this
Agreement, "cause" shall mean the following:

     (1) Subject to paragraph  3(f) hereof,  Glovier's  inability to perform his
duties under this  Agreement  for a period of more than ninety (90)  consecutive
days due to a total or partial disability;

     (2) If Glovier fails to perform his duties to the Company  hereunder in the
unanimous opinion of the Company's Board of Directors;

     (3)   Glovier   commits   such  acts  of   dishonesty,   theft,   fraud  or
misappropriation  or is convicted  of a crime that would,  in the opinion of the
Board of  Directors,  prevent the  effective  performance  of  Glovier's  duties
hereunder; or

     (4)  Glovier  breaches  the  terms  and  conditions  of  Section  5 of this
Agreement.

     Any  termination of Glovier's  employment  will be effective upon Glovier's
receipt of written notice of such termination  unless otherwise provided in said
notice,  and such termination  shall be without prejudice to any other remedy to
which  the  Company  may be  entitled  either at law,  in  equity or under  this
Agreement.

     (c)  Termination  Upon  Change  of  Control.  In the event  that  Glovier's
employment is terminated  upon or within two (2) years after a change of control
either  by the  Company  for any  reason  other  than the  reasons  set forth in
Paragraph 4(a), 4(b)(1), (3) or (4) or as a result of the resignation of Glovier
as a result of:

     (1) a  material  breach  by the  Company  of  its  obligations  under  this
Agreement;

     (2) a reduction in Glovier's base salary; or

     (3) a  relocation  of the  Company's  business  offices  without  Glovier's
consent to a location  which is outside the general  metropolitan  area in which
the  Company was located  immediately  prior to the change of control;  then the
Company would pay to Glovier in consideration of such termination the following:

     (1) an amount equal to the  remaining  portion of the base salary due under
the term of this agreement,  but not less than two times  Glovier's  annual base
salary in effect either  immediately  prior to the  termination of employment or
immediately prior to the change of control, whichever is the greatest; and

     (2) an amount  equal to the spread  (i.e.,  the excess of market value over
the exercise  price) on any stock  options held by Glovier,  whether or not such
options were  exercisable at the date of  termination.  Upon the payment of such
compensation, such stock options shall be cancelled.

     For purposes of this provision of this Agreement, "change of control" shall
mean:

     (1) The  acquisition by an individual,  entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities  Exchange Act of 1934, amended
(the "Exchange Act") of beneficial  ownership  (within the meaning of Rule 13d-3
promulgated  under  the  Exchange  Act)  of 20%  or  more  of  either  the  then
outstanding  shares of common stock of the Company or the combined  voting power
of the then  outstanding  voting  securities  of the  Company  entitled  to vote
generally in the election of directors;

     (2)  Individuals  who,  /as of the date  hereof,  constitute  the  Board of
Directors (the "Incumbent  Board") cease for any reason to constitute at least a
majority of the board; provided however, that any individual becoming a director
subsequent to the date hereof whose election,  or nomination for election by the
Company's  shareholders,  was  approved  by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual  were a  member  of the  Incumbent  Board,  but  excluding,  for this
purpose,  any such  individual  whose  initial  assumption of office occurs as a
result of an actual or threatened  election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

     (3) Approval by the shareholders of the Company of a reorganization, merger
or consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination").

     (4) Approval by the  shareholders of the Company of a complete  liquidation
or dissolution of the Company; or

     (5) A majority of the Board  otherwise  determines that a Change in Control
shall have occurred.

     5. Confidential Information, Non-Solicitation.

     (a) Confidential Information,  Non-Solicitation.  All information furnished
to Glovier by the  Company,  learned by Glovier from the Company or developed by
Glovier  on behalf  of the  Company  or at the  Company's  direction  or for the
Company's use or otherwise in connection  with Glovier's  employment  hereunder,
are and  shall  remain  the  sole  and  confidential  property  of the  Company;
provided,  however, the foregoing shall not apply to any such information in the
public  domain  other  than by reason of a breach  of this  Paragraph 5.  If the
Company  requests the return of  information  or any such  materials at any time
during or at the termination of Glovier's employment,  Glovier shall immediately
deliver the same to the Company.  During the term of this  Agreement  and at all
times thereafter,  Glovier shall not use for his personal benefit,  or disclose,
communicate  or  divulge  to, or use for the direct or  indirect  benefit of any
person,  firm  association  or company  other  than the  Company,  any  material
referred to in this  Paragraph 5 or any confidential  information  regarding the
business methods, business policies,  procedures,  techniques,  trade secrets or
other  knowledge  or  processes  of or developed by the Company or any names and
addresses of customers or clients or any other confidential information relating
to past,  present  or  prospective  business  operations  or  activities  of the
Company,  made known to Glovier or learned or acquired  by Glovier  while in the
employ of the Company.

     (b) Non-Solicitation. During the term of this Agreement and for a period of
one (1) year after the  termination of his  employment  with the Company for any
reason whatsoever,  Glovier shall not, directly or indirectly,  solicit, induce,
encourage or attempt to influence any client,  customer,  employee,  consultant,
independent  contractor,  salesman or supplier of the Company (including without
limitation any broker/dealer with whom the Company does or has done business) to
cease to do business  with or to terminate his  employment  with the Company and
shall not utilize for any such  purpose any names and  addresses of customers or
clients  of the  Company  or  any  data  on or  relating  to  past,  present  or
prospective  (at the time of termination of Glovier's  employment)  customers or
clients of the Company.

     6.  Arbitration  of Disputes.  Any  controversy  or claim arising out of or
relating  to  this  Agreement,  or the  breach  thereof,  shall  be  settled  by
arbitration   in  accordance   with  the  rules  of  the  American   Arbitration
Association.  Judgment upon the award  rendered by the arbitrator may be entered
in any court having jurisdiction thereof.

     7.  Modification  of Contract.  No waiver or modification of this Agreement
shall be valid unless it is in writing and duly executed by both parties.

     8.  Severability.   All  agreements  and  covenants  contained  herein  are
severable,  and in the event any of them  shall be held to be valid by any court
of  competent  jurisdiction,  this  Agreement  shall be  interpreted  as if such
invalid agreements and covenants were not contained herein.

     9. Governing Law, Venue for  Arbitration.  This Agreement takes effect upon
its  acceptance and execution by the Company in Phoenix,  Arizona,  and shall be
interpreted  and  construed  under the laws of the State of Arizona,  which laws
shall  prevail  in the event of any  conflict  of law.  This  Agreement  and the
obligations  hereunder are made and  performable  in Maricopa  County,  Arizona,
which shall be the exclusive venue for any arbitration hereunder.

     10. Notice.  Any notice to be given  hereunder by either party to the other
shall be in writing  and may be  transmitted  by  personal  delivery or by mail,
registered or certified,  postage prepaid with return receipt requested to their
respective addresses  hereinabove  provided, or to the Company or Glovier at its
or his last known address.

     11.  Entire  Agreement.  This  Agreement  contains the  complete  agreement
between the Company and Glovier  concerning the employment  arrangement  between
the  Company  and  Glovier.  The  parties  acknowledge  that any  statements  or
representations  that may have been made previously by either one of them to the
other (other than those  contained in this  Agreement) are of no effect and that
neither of them has relied on such considerations in executing this Agreement.

     IN WITNESS  WHEREOF,  the parties have executed or caused this Agreement to
be executed as of the date, month and year first above written.

                                         COLONIAL TRUST COMPANY


                                         BY:  /s/ John K. Johnson
                                              John K. Johnson
                                         President and Chief Executive Officer

                                         BY:  /s/ Cecil E. Glovier
                                         Cecil E. Glovier


<PAGE> 60


Exhibit 10(i)


                             COLONIAL TRUST COMPANY

                           EMPLOYEE STOCK OPTION PLAN


                            ________________________


     1. Purposes of the Plan.  The purposes of this  Employee  Stock Option Plan
are to  attract  and  retain  the best  available  personnel  for  positions  of
responsibility  within the Company, to provide additional incentive to employees
of the Company, and to promote the success of the Company's business through the
grant of options to purchase shares of the Company's Common Stock.

     Options  granted  hereunder  may  be  either  Incentive  Stock  Options  or
Nonstatutory Stock Options,  at the discretion of the Board. The type of options
granted shall be reflected in the terms of written Stock Option agreements.

     2. Definitions. As used herein, the following definitions shall apply:

     (a)  "Board"  shall  mean the  Board of  Directors  of the  Company  or the
Committee, if one has been appointed.

     (b) "Code" shall mean the Internal  Revenue Code of 1986,  as amended,  and
the rules and regulations promulgated thereunder.

     (c) "Common. Stock" shall mean the common stock of the Company described in
the Company's Articles of Incorporation, as amended.

     (d) "Company"  shall mean COLONIAL TRUST COMPANY,  an Arizona  corporation,
and shall include any parent or subsidiary corporation of the Company as defined
in Sections 425(e) and (f), respectively, of the Code.

     (e)  "Committee"  shall  mean  the  Committee  appointed  by the  Board  in
accordance with paragraph (a) of Section 4 of the Plan, if one is appointed.

     (f)  "Employee"  shall mean any person,  including  officers and directors,
employed by the Company.  The payment of a director's  fee by the Company  shall
not be sufficient to constitute "employment" by the Company.

     (g)  "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
amended.

     (h) "Fair Market Value" shall mean, with respect to the date a given Option
is granted or exercised,  the value of the Common Stock  determined by the Board
in such manner as it may deem equitable for Plan purposes but, in the case of an
Incentive  Stock  Option,  no  less  than  is  required  by  applicable  laws or
regulations;  provided,  however,  that where  there is a public  market for the
Common  Stock,  the Fair Market Value per share shall be the mean of the bid and
asked prices of the Common  Stock on the date of grant,  as reported in the Wall
Street  Journal (or, if not so reported,  as otherwise  reported by the National
Association of Securities  Dealers Automated  Quotation System) or, in the event
the Common Stock is listed on the New York Stock  Exchange,  the American  Stock
Exchange or the Nasdaq  Stock  Market,  the Fair Market Value per Share shall be
the closing  price on such Exchange or on the Nasdaq Stock Market on the date of
grant of the Option, as reported in the Wall Street Journal.

     (i)  "Incentive  Stock  Option"  shall mean an Option  which is intended to
qualify as an incentive  stock option  within the meaning of Section 422A of the
Code.

     (j) "Option" shall mean a stock option granted under the Plan.

     (k) "Optioned Stock" shall mean the Common Stock subject to an Option.

     (l)  "Optionee"  shall mean an Employee of the Company who has been granted
one or more Options.

     (m)  "Nonstatutory  Stock  Option"  shall  mean an  Option  which is not an
Incentive Stock Option.

     (n) "Parent"  shall mean a "parent  corporation,"  whether now or hereafter
existing, as defined in Section 425(e) of the Code.

     (o) "Plan" shall mean this Employee Stock Option Plan.

     (p)  "Share"  shall  mean a share  of the  Common  Stock,  as  adjusted  in
accordance with Section 11 of the Plan.

     (q) "Stock Option  Agreement" shall mean the written  agreement between the
Company and the Optionee relating to the grant of an Option.

     (r)  "Subsidiary"  shall mean a  "subsidiary  corporation,"  whether now or
hereafter existing, as defined in Section 425(f) of the Code.

     (s) "Tax  Date"  shall mean the date an  Optionee  is  required  to pay the
Company an amount with respect to tax withholding obligations in connection with
the exercise of an option.

     3. Common Stock Subject to the Plan.  Subject to the  provisions of Section
11 of the Plan, the maximum aggregate number of shares which may be optioned and
sold  under the Plan is Two  Million  (2,000,000)  Shares of Common  Stock.  The
Shares may be authorized,  but unissued, or previously issued Shares acquired by
the Company and held in treasury.

     If an Option should expire or become  unexercisable  for any reason without
having been  exercised in full,  the  unpurchased  Shares covered by such Option
shall,  unless the Plan  shall have been  terminated,  be  available  for future
grants of Options.

     4. Administration of the Plan.

     (a) Procedure.

     (i) The Plan shall be administered by the Board or a Committee of the Board
in accordance with Rule 16(b)-3 of the Exchange Act.

     (ii) Any  Committee  appointed by the Board shall consist of at least three
(3) persons, who may, but need not be, members of the Board. Once appointed, the
Committee  shall continue to serve until otherwise  directed by the Board.  From
time to time the  Board  may  increase  the size of the  Committee  and  appoint
additional members thereof,  remove members (with or without cause), and appoint
new members in substitution  thereof,  fill vacancies  however caused, or remove
all members of the Committee and thereafter directly administer the Plan.

     (b) Powers of the Board.  Subject to the  provisions of the Plan, the Board
or the Committee,  as appropriate,  shall have the authority, in its discretion:
(i) to grant Incentive  Stock Options and  Nonstatutory  Stock Options;  (ii) to
determine,  upon review of relevant information and in accordance with Section 2
of the Plan,  the Fair Market Value of the Common Stock;  (iii) to determine the
exercise price per Share of Options to be granted, which exercise price shall be
determined  in accordance  with Section 8(a) of the Plan;  (iv) to determine the
Employees to whom, and the time or times at which,  Options shall be granted and
the number of Shares to be  represented  by each Option;  (v) to  interpret  the
Plan; (vi) to prescribe, amend and rescind rules and regulations relating to the
Plan;  (vii) to determine the terms and provisions of each Option granted (which
need not be identical) and, with the consent of the Optionee thereof,  modify or
amend  each  Option;  (viii) to  accelerate  or defer  (with the  consent of the
Optionee)  the  exercise  date of any Option;  (ix) to  authorize  any person to
execute on behalf of the Company any instrument required to effectuate the grant
of an Option  previously  granted  by the  Board;  (x) to  accept or reject  the
election  made by an Optionee  pursuant  to Section 17 of the Plan;  and (xi) to
make  all  other   determinations   deemed   necessary  or  advisable   for  the
administration of the Plan.

     (c) Effect of the  Board's  Decision.  All  decisions,  determinations  and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.

     5. Eligibility.

     (a)  Consistent  with the Plan's  purposes,  Options may be granted only to
Employees of the Company as  determined  by the Board.  An Employee who has been
granted an Option may, if he is  otherwise  eligible,  be granted an  additional
Option  or  Options.  Incentive  Stock  Options  may be  granted  only to  those
Employees who meet the requirements applicable under Section 422A of the Code.

     (b) To the extent  that the  aggregate  Fair  Market  Value of Shares  with
respect to which  Incentive  Stock Options are exercisable for the first time by
an individual  during any calendar year exceeds  $100,000,  such Incentive Stock
Options shall be treated as Nonstatutory Stock Options.

     6.  Shareholder  Approval and Effective  Dates.  This Plan became effective
upon approval of the Company's Shareholders on April 25, 1996.

     7. Term of Option. Unless otherwise provided in the Stock Option Agreement,
the term of each Option  shall be six (6) years from the date of grant  thereof.
In no case shall the term of any  Option  exceed ten (10) years from the date of
grant  thereof.  Notwithstanding  the above,  in the case of an Incentive  Stock
Option  granted to an Employee  who, at the time the  Incentive  Stock Option is
granted,  owns ten percent  (10%) or more of the Common  Stock as such amount is
calculated under Section 422A(b)(6) of the Code ("Ten Percent Shareholder"), the
term of the  Incentive  Stock  Option shall be five years from the date of grant
thereof or such shorter time as may be provided in the Stock Option Agreement.

     8. Exercise Price and Payment.

     (a)  Exercise  Price.  The per Share  exercise  price for the  Shares to be
issued  pursuant to exercise of an Option shall be determined by the Board,  but
in the case of an  Incentive  Stock  Option  shall be no less  than one  hundred
percent  (100%) of the Fair Market Value per share on the date of grant,  and in
the case of a  Nonstatutory  Option shall be no less than fifty percent (50%) of
the Fair  Market  Value  per  share on the date of  grant.  Notwithstanding  the
foregoing,  in the case of an Incentive Stock Option granted to an Employee who,
at  the  time  of  grant  of  such  Incentive  Stock  Option,  is a Ten  Percent
Shareholder,  the per Share exercise price shall be no less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant.

     (b) Payment. The price of an exercised Option and any taxes attributable to
the delivery of Common Stock under the Plan shall be paid:

     (i) In U.S. dollars in cash or by check,  bank draft or money order payable
to the order of the Company; or

     (ii) At the  discretion  of the Board,  through  the  delivery of shares of
Common Stock with an  aggregate  Fair Market Value equal to the option price and
withholding taxes, if any; or

     (iii) At the election of the  Optionee  pursuant to Section 17 and with the
consent of the Board pursuant to Section 4(b)(x),  by the Company's retention of
such number of shares of Common Stock subject to the exercised Option which have
an  aggregate  Fair Market  Value on the  exercise  date equal to the  Company's
aggregate  federal,  state,  local and foreign tax withholding and FICA and FUTA
obligations  with  respect to income  generated by the exercise of the option by
Optionee; or

     (iv) By a combination of (i), (ii) and (iii) above.

     The Board shall determine  acceptable methods for tendering Common Stock as
payment  upon  exercise  of an  Option  and  may  impose  such  limitations  and
prohibitions  on the use of  Common  Stock to  exercise  an  Option  as it deems
appropriate.

     9. Exercise of Option.

     (a) Procedure for Exercise;  Rights as a  Shareholder.  Any Option  granted
hereunder  shall be  exercisable  at such  times and under  such  conditions  as
determined  by the Board,  including  performance  criteria  with respect to the
Company  and/or the Optionee.  Unless  otherwise  determined by the Board at the
time of grant, an Option may be exercised in whole or in part. An Option may not
be exercised for a fraction of a Share.

     An Option  shall be  deemed to be  exercised  when  written  notice of such
exercise  has been  given to the  Company  in  accordance  with the terms of the
Option by the person  entitled to exercise  the Option and full  payment for the
Shares with  respect to which the Option is exercised  has been  received by the
Company.  Full  payment  may,  as  authorized  by  the  Board,  consist  of  any
consideration  and method of payment  allowable  under Section 8(b) of the Plan.
Until the issuance (as  evidenced by the  appropriate  entry on the books of the
Company or of a duly  authorized  transfer  agent of the  Company)  of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a  shareholder  shall exist with respect to the Optioned  Stock,
notwithstanding  the exercise of the Option.  No  adjustment  will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 11 of the Plan.

     Exercise  of an Option in any  manner  shall  result in a  decrease  in the
number of Shares which  thereafter  may be  available,  both for purposes of the
Plan and for sale  under  the  Option,  by the  number of Shares as to which the
Option is exercised.

     (b) Termination of Status as an Employee.  Unless otherwise provided in the
Stock  Option  Agreement  (which  may reduce but not  increase  the time  period
described  below),  if an Employee's  employment  by the Company is  terminated,
except if such termination occurs due to death or disability,  then the Employee
may, but only within ninety (90) days after the date he ceases to be an Employee
of the  Company,  exercise  his Option to the  extent  that he was  entitled  to
exercise  it at the  date of such  termination.  To the  extent  that he was not
entitled to exercise the Option at the date of such  termination,  or if he does
not exercise  such Option  (which he was  entitled to exercise)  within the time
specified herein, the Option shall terminate.

     (c) Disability.  Unless  otherwise  provided in the Stock Option  Agreement
(which  may  reduce  but  not  increase  the  time  period   described   below),
notwithstanding  the provisions of Section 9(b) above,  in the event an Employee
is  unable  to  continue  his  employment  with the  Company  as a result of his
permanent and total disability (as defined in Section 22 (e)(3) of the Code), he
may, but only within  twelve months from the date of  termination,  exercise his
Option  to the  extent  he was  entitled  to  exercise  it at the  date  of such
termination.  To the extent that he was not  entitled to exercise  the Option at
the date of  termination,  or if he does not exercise  such Option (which he was
entitled  to  exercise)  within the time  specified  herein,  the  Option  shall
terminate.

     (d) Death.  Unless otherwise  provided in the Stock Option Agreement (which
may reduce but not increase  the time period  described  below),  if an Employee
dies  during the term of the Option and is at the time of his death an  Employee
of the Company who shall have been in continuous status as an Employee since the
date of grant of the  Option,  the Option may be  exercised  at any time  within
twelve (12) months  following the date of death (or such other period of time as
is determined by the Board) by the Employee's estate or by a person who acquired
the right to  exercise  the Option by bequest  or  inheritance,  but only to the
extent that an  Employee  was  entitled  to  exercise  the Option on the date of
death.  To the extent that  decedent  was not entitled to exercise the Option on
the date of death, or if the Employee's estate, or person who acquired the right
to exercise the Option by bequest or inheritance,  does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate.

     10.  Non-Transferability  of Options.  An Option may not be sold,  pledged,
assigned,  hypothecated,  transferred or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised,  during the
lifetime of the Optionee, only by the Optionee.

     11.  Adjustments Upon Changes in Capitalization  or Merger.  Subject to any
required  action by the  shareholders  of the  Company,  the number of shares of
Common Stock  covered by each  outstanding  Option,  and the number of shares of
Common Stock which have been  authorized  for issuance  under the Plan but as to
which no Options have yet been  granted or which have been  returned to the Plan
upon  cancellation  or expiration of an Option as well as the price per share of
Common Stock covered by each such outstanding  Option,  shall be proportionately
adjusted for any  increase or decrease in the number of issued  shares of Common
Stock  resulting  from a stock  split,  reverse  stock  split,  stock  dividend,
combination or  reclassification  of the Common Stock,  or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of  consideration  by the Company;  provided,  however,  that  conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of  consideration."  Such adjustment shall be made by the Board,
whose  determination  in that respect  shall be final,  binding and  conclusive.
Except as  expressly  provided  herein,  no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof, shall be made with respect to
the number or price or shares of Common Stock subject to an Option.

     In the event of the proposed dissolution or liquidation of the Company, the
Option will terminate  immediately  prior to the  consummation  of such proposed
action,  unless otherwise  provided by the Board. The Board may, in the exercise
of its  sole  discretion  in such  instances,  declare  that  any  Option  shall
terminate  as of a date fixed by the Board and give each  Optionee  the right to
exercise  his  Option  as to all or any part of the  Optioned  Stock,  including
Shares as to which the Option would not other-wise be exercisable.  In the event
of a proposed sale of all or substantially all of the assets of the Company,  or
the merger of the Company with or into another corporation,  the Option shall be
assumed  or  an  equivalent  option  shall  be  substituted  by  such  successor
corporation or a parent or subsidiary of such successor corporation,  unless the
Board  determines,  in the exercise of its sole  discretion  and in lieu of such
assumption or  substitution,  that the Optionee shall have the right to exercise
the Option as to all of the  Optioned  Stock,  including  Shares as to which the
Option would not  otherwise be  exercisable.  If the Board makes an Option fully
exercisable  in lieu of assumption or  substitution  in the event of a merger or
sale of assets,  the Board shall  notify the  Optionee  that the Option shall be
fully  exercisable  for a period of sixty (60) days from the date of such notice
(but not later than the  expiration  of the term of the Option  under the Option
Agreement), and the Option will terminate upon the expiration of such period.

     12. Time of Granting Options. The date of grant of an Option shall, for all
purposes,  be the date on which the Board makes the determination  granting such
Option.  Notice of the determination  shall be given to each Employee to whom an
Option is so granted within a reasonable time after the date of such grant.

     13. Amendment and Termination of the Plan.

     (a)  Amendment and  Termination.  The Board may amend or terminate the Plan
from time to time in such  respects as the Board may deem  advisable;  provided,
however,  that the following  revisions or amendments  shall require approval of
the  shareholders  of the  Company,  to the  extent  required  by  law,  rule or
regulation:

     (i) Any increase in the number of Shares subject to the Plan, other than in
connection with an adjustment under Section 11 of the Plan;

     (ii) Any change in the designation of the Employees  eligible to be granted
Options;

     (iii) Any material increase in the benefits accruing to participants  under
the Plan.

     (b) Effect of Amendment or  Termination.  Any such amendment or termination
of the Plan shall not affect  Options  already  granted and such  Options  shall
remain  in full  force  and  effect  as if this  Plan  had not been  amended  or
terminated, unless mutually agreed otherwise between the Optionee and the Board,
which agreement must be in writing and signed by the Optionee and the Company.

     14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and  delivery of such Shares  pursuant  thereto  shall  comply with all relevant
provisions of law,  including without  limitation the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further  subject to the  approval of counsel  for the Company  with
respect to such compliance.

     As a condition  to the  exercise of an Option,  the Company may require the
person  exercising  such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present  intention  to sell or  distribute  such  Shares  if, in the  opinion of
counsel  for  the  Company,  such a  representation  is  required  by any of the
aforementioned relevant provisions of law.

     Inability  of the  Company to obtain  authority  from any  regulatory  body
having  jurisdiction,  which authority is deemed by the Company's  counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the  Company of any  liability  in respect of the  failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

     In the case of an  Incentive  Stock  Option,  any  Optionee who disposes of
Shares  of  Common  Stock  acquired  upon the  exercise  of an Option by sale or
exchange  (a)  either  within  two (2) years  after the date of the grant of the
Option  under which the Common  Stock was  acquired,  or (b) within one (1) year
after the acquisition of such Shares of Common Stock shall notify the Company of
such disposition and of the amount realized upon such disposition.

     15.  Reservation of Shares.  The Company will at all times reserve and keep
available  such  number  of  Shares  as  shall  be  sufficient  to  satisfy  the
requirements of the Plan.

     16. Option Agreement. Options shall be evidenced by Stock Option Agreements
in such form as the Board shall approve.

     17. Withholding Taxes.  Subject to Section 4(b)(x) of the Plan and prior to
the Tax Date, the Optionee may make an irrevocable  election to have the Company
withhold from those Shares that would otherwise be received upon the exercise of
any Option,  a number of Shares  having a Fair Market Value equal to the minimum
amount necessary to satisfy the Company's federal,  state, local and foreign tax
withholding  obligations  and FICA  and FUTA  obligations  with  respect  to the
exercise of such Option by the Optionee.

     An  Optionee  who  is  also  an  officer  of  the  Company  must  make  the
above-described election:

     (a) At least six (6) months  after the date of grant of the Option  (except
in the event of death or disability); and

     (b) Either:  (i) six (6) months prior to the Tax Date, or (ii) prior to the
Tax Date and during the period beginning on the third business day following the
date the  Company  releases  its  quarterly  or  annual  statement  of sales and
earnings and ending on the twelfth business day following such date.

     18. Miscellaneous Provisions.

     (a) Plan Expense. Any expenses of administering this Plan shall be borne by
the Company.

     (b) Use of Exercise Proceeds.  The payment received from Optionees from the
exercise  of Option  shall be used for the  general  corporate  purposes  of the
Company.

     (c) Construction of Plan. The place of  administration of the Plan shall be
in the  State  of  Arizona,  and  the  validity,  construction,  interpretation,
administration  and  effect of the Plan and of its rules  and  regulations,  and
rights relating to the Plan,  shall be determined in accordance with the laws of
the State of Arizona  without regard to conflict of laws  principles  and, where
applicable, in accordance with the Code.

     (d) Taxes.  The Company  shall be entitled if necessary or desirable to pay
or withhold the amount of any tax  attributable  to the delivery of Common Stock
under the Plan from other  amounts  payable  to the  Employee  after  giving the
person  entitled  to  receive  such  Common  Stock  notice as far in  advance as
practical, and the Company may defer making delivery of such Common Stock if any
such tax may be pending unless and until indemnified to its satisfaction.

     (e) Indemnification. In addition to such other rights of indemnification as
they may have as  members  of the  Board,  the  members  of the  Board  shall be
indemnified by the Company against all costs and expenses reasonably incurred by
them in connection  with any action,  suit or proceeding to which they or any of
them may be party by reason of any  action  taken or  failure to act under or in
connection with the Plan or any Option,  and against all amounts paid by them in
settlement  thereof  (provided such settlement is approved by independent  legal
counsel  selected by the Company) or paid by them in  satisfaction of a judgment
in any such action,  suit or proceeding,  except a judgment based upon a finding
of bad faith;  provided that upon the  institution  of any such action,  suit or
proceeding a Board member shall, in writing, give the Company notice thereof and
an  opportunity,  at its own expense,  to handle and defend the same before such
Board member undertakes to handle and defend it on his own behalf.

     (f) Gender.  For purposes of this Plan,  words used in the masculine gender
shall include the feminine and neuter, and the singular shall include the plural
and vice versa, as appropriate.

     (g) No  Employment  Agreement.  The Plan shall not confer upon any Optionee
any right with respect to continuation of employment with the Company, nor shall
it interfere in any way with his right or the  Company's  right to terminate his
employment at any time.



<PAGE> 61

Exhibit 10(j)


                             COLONIAL TRUST COMPANY

                    NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN



     1.  Purposes  of the Plan.  The  purposes  of this Plan are to attract  and
retain the best available  individuals to serve as  non-employee  members of the
Board  of  Directors  of  the  Company,  to  reward  such  directors  for  their
contributions  to the  profitable  growth of the  Company,  and to maximize  the
identity of interest between such directors and shareholders generally.

     2. Definitions. As used herein, the following definitions shall apply:

     a. "Board" shall mean the Board of Directors of the Company.

     b. "Company" shall mean COLONIAL TRUST COMPANY, an Arizona corporation.

     c. "Exercise  Price" shall mean,  with respect to each Share  granted,  the
Fair Market Value on the date of grant.

     d. "Fair Market Value" shall mean,  with respect to the date a given Option
is granted or exercised,  the value  determined by the Company's Chief Executive
Officer in good faith in such manner as it may deem equitable for Plan purposes;
provided,  however,  that where there is a public market for the Stock, the Fair
Market Value per Share shall be the mean of the bid and asked price of the Stock
on the date of grant or exercise, as reported in The Wall Street Journal (or, if
not so reported, as otherwise reported by the National Association of Securities
Dealers Automated  Quotation System) or, in the event the Stock is listed on the
Nasdaq Stock Market, the New York Stock Exchange or the American Stock Exchange,
the Fair Market Value per Share shall be the closing  price of the Stock on such
exchange on the date of grant or exercise of the Option, as reported in The Wall
Street Journal and provided, further, that with respect to any Option granted on
the effective date of the Company's initial public offering of securities,  Fair
Market  Value  shall mean the price of a Share as set forth on the cover page of
the prospectus relating thereto.

     e. "Option" shall mean a right to purchase Stock,  granted  pursuant to the
Plan.

     f. "Optioned Stock" shall mean the Stock subject to an Option.

     g.  "Optionee"  shall mean a  non-employee  director of the Company who has
been granted an Option.

     h. "Plan" shall mean this Non-Employee Directors Stock Option Plan.

     i. "Share" shall mean a share of the Stock.

     j.  "Stock"  shall mean the common  stock of the Company  described  in the
Articles of Incorporation of the Company.

     k. "Stock Option Agreement" shall mean the written agreement evidencing the
grant of an option.

     l.  "Trading  Day" shall mean a day on which the Fair  Market  Value of the
Stock can be determined.

     3. Common Stock Subject to the Plan.  Subject to increases and  adjustments
pursuant to Section 9 of the Plan,  the number of Shares  reserved and available
for distribution  under the Plan shall be 500,000.  If an Option shall expire or
become  unexercisable  for any reason without having been exercised in full, the
unauthorized  Shares  covered  by the Option  shall,  unless the Plan shall have
terminated, be available for future grants of Options.

     4. Option Grants.

     a. An Option to purchase fifty thousand (50,000) Shares shall be granted on
the date hereof, to each non-employee director as of such date.

     b. An Option to purchase fifteen thousand  (15,000) shares shall be granted
on January 1, 1997 and on each January 1  thereafter  until  termination  of the
Plan, to each non-employee director then serving on the Board.

     c. The  purchase  price of Shares  subject  to an Option  shall be the Fair
Market Value on the date of grant.

     5. Board  Approval and Effective  Dates.  This Plan became  effective as of
April 25, 1996, the date on which the Company's  shareholders approved the Plan.
The Plan and all  outstanding  Options shall remain in effect until such Options
shall have been exercised, shall have expired or shall otherwise be terminated.

     6. Term; Exercise; Rights as a Shareholder.

     a. The term of each Option shall be 6 years from the date of grant thereof.
The Option may be  exercised  in whole or in part at any time during the term of
the Option. An Option may not be exercised for a fraction of a Share.

     b. An Option  shall be deemed to be  exercised  upon receipt by the Company
from the  Optionee of written  notice of such  exercise.  Such  notice  shall be
accompanied by full payment for the Shares subject to such exercise.

     7. Payment. The Exercise Price shall be paid:

     a. In United States dollars in cash or by check payable to the order of the
Company, or

     b.  Subject to the  approval  of the Board,  by  delivery of Shares with an
aggregate Fair Market Value equal to the Exercise Price, or

     c. By any combination of (a) and (b) above.

     The Board shall determine acceptable methods for tendering Stock as payment
upon exercise of an Option and may impose such  limitations and  prohibitions on
the use of Stock to exercise an Option as it deems appropriate.

     8.  Transferability  of  Options.  The  Option  may not be  sold,  pledged,
assigned, hypothecated,  transferred, or disposed of in any manner other than by
will or by the laws of descent and distribution and may be exercised, during the
lifetime  of the  Optionee,  only by the  Optionee  or by his  guardian or legal
representative.

     In  the  event  of  the  Optionee's  death,  his or  her  Option  shall  be
exercisable,  prior to the expiration of the Option, by the person or persons to
whom his or her accrued and vested rights pass by will or by the laws of descent
and distribution.

     9. Adjustments Upon Changes in Capitalization or Merger. If the outstanding
Stock of the Company shall at any time be changed or exchanged by declaration of
a stock dividend,  split-up,  combination of shares,  recapitalization,  merger,
consolidation,  or other  corporate  reorganization  in which the Company is the
surviving  corporation,  the  number  and kind of Shares  subject to the Plan or
subject to any Options theretofore  granted,  and the Options' prices,  shall be
appropriately and equitably adjusted.

     In the event of a liquidation or dissolution of the Company, sale of all or
substantially all of its assets,  or a merger,  consolidation or other corporate
reorganization  in which the Company is not the  surviving  corporation,  or any
merger or other reorganization in which the Company is the surviving corporation
but the holders of its Stock  receive  securities  of another  corporation,  any
outstanding Options hereunder shall be appropriately and equitably adjusted.

     10.  Amendment and  Termination  of the Plan.  The Board may amend the Plan
from time to time in such respects as the Board may deem  advisable or terminate
the Plan.  Any  amendment or  termination  of the Plan shall not affect  Options
already  granted and such  Options  shall  remain in full force and effect as if
this Plan had not been amended or terminated.

     Notwithstanding the foregoing,  revisions or amendments that accomplish any
of the following shall require approval of the  shareholders of the Company,  to
the extent required by law, rule or regulation.

     a.  Materially  increase the benefits  accruing to  participants  under the
Plan;

     b.  Materially  increase the number of Shares which may be issued under the
Plan;

     c. Materially  modify the Plan as to eligibility for  participation  in the
Plan; or

     d.  Otherwise  cause the Plan to lose its exemption  under Section 16(b) of
the Securities  Exchange Act of 1934, as amended,  and the rules and regulations
promulgated thereunder.

     11. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and  delivery of such Shares  pursuant  thereto  shall  comply with all relevant
provisions of law, including,  without limitation the Securities Act of 1933, as
amended,  the  Securities  Exchange  Act of 1934,  as  amended,  the  rules  and
regulations promulgated  thereunder,  and the requirements of any stock exchange
or market  system  upon which the  Shares  may be  listed,  and shall be further
subject  to the  approval  of  counsel  for the  Company  with  respect  to such
compliance.

     As a condition  to the  exercise of an Option,  the Company may require the
Optionee  to  represent  and warrant at the time of any such  exercise  that the
Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required or advisable.

     Inability of the Company to obtain  authority from a regulatory body having
jurisdiction, which authority is deemed by the Company's counsel to be necessary
or advisable  to the lawful  issuance  and sale of any Shares  hereunder,  shall
relieve the Company of any  liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

     12. Termination of Option.

     a. Termination as a Non-Employee Director. Unless otherwise provided in the
Stock  Option  Agreement  (which  may reduce but not  increase  the time  period
described  below), if the Optionee ceases to be a member of the Board and is not
employed by the Company,  except if  termination  is due to death or disability,
then the Optionee may, but only within ninety (90) days after the date he ceases
to be a member of the  Board,  exercise  his  Option to the  extent  that he was
entitled to exercise it at the date of such  termination.  To the extent that he
was not entitled to exercise the Option at the date of such  termination,  or if
he does not exercise such Option (which he was entitled to exercise)  within the
time specified herein, the Option shall terminate.

     b.  Disability.  Unless  otherwise  provided in the Stock Option  Agreement
(which may reduce but not  increase  the time period  described  below),  in the
event an  Optionee is unable to continue to be a member of the Board as a result
of his permanent and total  disability  (as defined in Section  22(e)(3 ) of the
Internal Revenue Code of 1986, as amended),  he may, but only within twelve (12)
months from the date of  termination,  exercise  his Option to the extent he was
entitled to exercise it at the date of such  termination.  To the extent that he
was not  entitled to exercise  the Option at the date of  termination,  or if he
does not exercise  such Option  (which he was  entitled to exercise)  within the
time specified herein, the Option shall terminate.

     c. Death.  Unless  otherwise  provided in the Stock Option Agreement (which
may reduce but not increase  the time period  described  below),  if an Optionee
dies  during the term of the  Option,  the Option may be  exercised  at any time
within  twelve (12) months  following the date of death (or such other period of
time as is  determined  by the Board) only to the extent  that an  Optionee  was
entitled  to  exercise  the  Option on the date of  death.  To the  extent  that
decedent was not entitled to exercise the Option on the date of death, or if the
Optionee's  estate,  or person who  acquired the right to exercise the Option by
bequest or inheritance,  does not exercise such Option (which he was entitled to
exercise) within the time specified herein, the Option shall terminate.

     13. Option Agreement. Options shall be evidenced by Stock Option Agreements
in such form as the Board shall approve.

     14. Miscellaneous Provisions.

     a. Plan Expense.  Any expenses of administering this Plan shall be borne by
the Company.

     b.  Construction  of  Plan.  The  validity,  construction,  interpretation,
administration  and  effect of the Plan and of its rules  and  regulations,  and
rights relating to the Plan, shall be determined by the Board in accordance with
the laws of the State of Arizona.


                             COLONIAL TRUST COMPANY
                             STOCK OPTION AGREEMENT
                                  EXERCISE FORM


     I desire to exercise my vested  Options to purchase  shares of Common Stock
at $_______________  per share, for a total purchase price of  $_______________,
pursuant to my Stock Option Agreement dated ____________________, ________.

     Enclosed is payment in full by [ ] cash [ ] cashiers check [ ] bank draft
[] money order []other (describe) .

     I intend to hold the shares for investment for my own account and will sell
or  transfer  them only in full  compliance  with  applicable  federal and state
securities laws.

     I understand the shares are not registered with the Securities and Exchange
Commission  or any state  authority  and may not be sold or  transferred  unless
registered or an exemption from registration is available.

     I have, or have been given access to, all  information  necessary for me to
make an informed  decision as to the  advisability of investing in the Company's
stock, and I have the skill and experience necessary to make such decision.

         Dated: _________________, 19___.



                      Signature:

                      Print full name:

                      Social Security No.: