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, 2003
                    ----------------------------------------


                 [ ] 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 revenue for its most recent fiscal year: $4,161,886.


     Based on the average of the bid and asked prices of the Registrant's Common
Stock on  June 4, 2003 ($3.50), the  aggregate  market value of the Common Stock
held by non-affiliates of the Registrant was $2,231,411 as of June 4, 2003.


     As of June 4, 2003,  757,884 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:  Controls and Procedures                             13

           Item  4:  Legal Proceedings                                   14

           Item  5:  Submission of Matters to a Vote of
                     Security Holders                                    14



PART II

           Item  6:  Market for Common Equity and Related
                     Stockholder Matters                                 14

           Item  7:  Management's Discussion and Analysis
                     or Plan of Operation                                15

           Item  8:  Financial Statements                                25

           Item  8.a:Qualitative Risks                                   44

           Item  9:  Changes in and Disagreements with
                     Accountants on Accounting and
                     Financial Disclosure                                44



PART III

           Item 10:  Directors, Executive Officers, Promoters
                     and Control Persons; Compliance with
                     Section 16(a) of the Exchange Act                   44

           Item 11:  Executive Compensation                              47

           Item 12:  Security Ownership of Certain Beneficial
                     Owners and Management                               51


           Item 13:  Certain Relationships and Related
                     Transactions                                        52

           Item 14:  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 1933, 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, projections 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 and does not
intend 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 Wealth
Management  Group(previously  named the Personal Trust division of the Company).
The Corporate Trust segment provides  services  including serving as trustee for
individual  retirement  accounts  ("IRA's")  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.  However, the
Company's  Board of  Directors  adopted a policy on October 8, 2001  pursuant to
which the Company will not serve as indenture  trustee on  for-profit  issuances
without the unanimous consent of the Company's Trust & Investments Committee and
the Board of  Directors.  Since this  policy was  adopted,  the  Company has not
agreed  to serve as  indenture  trustee  on any new bond  issues  of  for-profit
entities.  Through its Wealth  Management  Group 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.
In its capacity as paying agent, 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) and  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 31,2003,  the Company had served as trustee and/or paying agent
and/or escrow agent for 876 bond offerings  totaling  approximately $793 million
in  original  principal  amount.  The  foregoing  includes  a  total  of 39 bond
offerings in original  principal amount of approximately $66 million  originated
in the fiscal year ended  March 31,  2003.  The  Company's  revenues  from these
activities represented approximately 45% of the Company's aggregate revenues for
the year ended March 31, 2003. See "Item 7-Management's  Discussion and Analysis
or Plan of Operation - Results of Operations for the Years
Ended March 31, 2003 and 2002."

     As of March 31, 2003, 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  originated bonds representing  approximately 80% of the
aggregate  principal  amount of all bonds issued for which the Company served as
trustee and paying  agent.  For the year ended March 31, 2003, 3  broker/dealers
originated 100% of the aggregate  principal  amount of all new bond issues.  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 un-invested
balance in each IRA Account.

     At March 31,  2003,  the Company  was serving as trustee for  approximately
10,127 IRA's with an aggregate value of approximately $184 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,  2003.  See "Item
7-Management's  Discussion  and  Analysis  or Plan of  Operation  -  Results  of
Operations for the Years Ended March 31, 2003 and 2002."

     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  and to a lesser  extent  through  marketing  efforts  directed  at
non-profit organizations.


           Wealth Management Group Segment
           -------------------------------

     The  Wealth  Management  Group  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, 2003, the Wealth  Management  Group
segment served as trustee or agent for 650 trust, other accounts,  or investment
agency  accounts with a fair market value of  approximately  $235  million,  and
served as  custodian or trustee for  approximately  293 IRA's with a fair market
value of approximately $55 million.

<PAGE> 8

     The Wealth  Management  Group 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 Wealth  Management  Group  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  Wealth
Management  Group  segment.  HIA further refers to the Wealth  Management  Group
segment all business  opportunities for which an independent corporate fiduciary
is necessary or appropriate. The Wealth Management Group 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 Wealth  Management  Group segment was previously party to an investment
advisory  agreement  dated June 3, 1999 with Feldman  Securities  Group,  L.L.C.
("FSG"). This agreement was terminated on March 31, 2003 and FSG was replaced by
Meridian Investment Management (MIM).  Pursuant to this agreement,  this segment
designates  MIM,  and MIM  serves as  investment  advisor,  on a portion  of the
designated  investment  accounts of the Wealth  Management  Group  segment.  The
Company pays MIM 22% of the fees collected for managed assets.  The initial term
of the agreement expires on March 31, 2004.


<PAGE> 9


     The  profitability  of the  Wealth  Management  Group  segment  is  largely
dependent on the Company's ability to meet the needs of its market segment. Such
needs vary widely and are determined in large part by the terms of the governing
trust documents.  Where applicable,  the Wealth Management Group segment retains
legal,  investment,  tax and other  advisors  to fulfill  its  responsibilities.
Revenues from the Wealth Management Group segment represented  approximately 40%
of the Company's aggregate gross revenues for the year ended March 31, 2003. See
"-Growth  Plans" and "Item 7:  Management's  Discussion  and Analysis or Plan of
Operation - Results of Operations for the Years Ended March 31, 2003 and 2002."


           Growth Plans

     The Company  expects that its  non-profit  bond servicing  operations  will
continue  to  decline,  while it intends to attempt to expand 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.  The
Company anticipates that its bond servicing revenues will decrease in the fiscal
year ending March 31, 2004 compared to its revenues from such  activities in the
fiscal  year ended March  31,2003 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 as well as a
continuing  high level of bond calls due to low interest rates and the increased
attractiveness  of traditional  loans and other  financings (as compared to bond
financings)  to  non-profit  entities  seeking  debt  financing.  See  "Item  7:
Management's  Discussion  and  Analysis  or  Plan  of  Operation  -  Results  of
Operations  for the Years Ended  March 31, 2003 and 2002." Due to the  increased
attractiveness  of traditional  loans, the Company is considering  attempting to
take the necessary steps to allow it, directly or through an affiliate, to offer
loans to non-profit  entities  that prefer  traditional  loan  financing to bond
financing.  There may be no assurance that the Company will provide  traditional
loan financing at any time in the future.


     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 " Item  7:  Management's  Discussion  and  Analysis  or  Plan  of
Operation - Results of Operations for the Year Ended March 31, 2003 and 2002."

     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 "  Item  7:  Management's
Discussion  and  Analysis or Plan of Operation - Results of  Operations  for the
Years Ended March 31, 2003 and 2002."

     The Wealth  Management  Group entered into an  affiliation  agreement  with
PlanMember Service Corporation of Carpinteria ("PSC"),  California, on March 11,
2003,  wherein the Wealth  Management Group and PlanMember  Service  Corporation
will cooperatively  work to develop mutual retirement plan service  arrangements
with sponsoring  employers in Colonial's Arizona market.  Colonial will serve as
the  directed  trustee in company  sponsored  401(k)  plans and PSC will provide
investment,  administrative,  and recordkeeping services. Management expects the
retirement plan services  revenue  component to become a significant  portion of
the earnings of the Wealth Management Group over the next three years,  although
the Company has not generated any revenues to date and there may be no assurance
what revenues may be realized in the future from these  services.  No additional
staff will be required  during  fiscal year 2004 to sell or service the accounts
resulting from this affiliation.

<PAGE> 10


     The Company intends to consider and analyze potential merger, going private
or  other  strategic   opportunities  that  may  benefit  the  Company  and  its
stockholders.

     The foregoing  discussion entitled "Growth Plans" contains  forward-looking
statements  within the meaning of Section 27A of the  Securities Act of 1933 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
Company's  success  in  providing   traditional  loan  financing  to  non-profit
entities, should it commence such activities;  the continuation of the Company's
investment advisory agreements with MIM and HIA, finding a suitable  replacement
investment advisor for WIS and their success in managing the trust and IRA's for
which they provide services; the Company's success in servicing 401(k) accounts;
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; the Company's ability to procure E&O
insurance with appropriate coverage levels and other terms; a change 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.  The Company is also competing  with  traditional  lenders,  who are
offering  traditional  loans to non-profit  entities at interest  rates and with
other terms that are competitive to those offered through bond financings.  Such
traditional  loans have had an adverse  impact on the revenues of the  Company's
Corporate Trust segment and are anticipated to negatively impact the revenues of
such segment in the foreseeable future.

<PAGE> 11


     Competition in the IRA servicing business is intense.  However, to date the
Company has  focused  its  efforts on  procuring  IRA  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  $2,800,000 on March
31, 2003.  Arizona law also requires that $500,000 of such net capital must meet
the  Department's  liquidity  requirements.  At March 31, 2003,  $506,377 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 became effective on August 9, 2001 and to which the
Company  became  subject  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
"non-discretionary  assets" and  additional  capital of $250,000  for every $250
million  of  "discretionary  assets."  The term  "non-discretionary  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 $317 million of the funds which it
held in the ordinary course of business at March 31, 2003 would be classified as
"non-discretionary"  assets and approximately $173 million of the funds which it
held in the ordinary  course of business at March 31, 2003 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, that 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.  The  Company  believes  that it  would  be able  to  procure  any
additional  capital that might be required in the foreseeable future as a result
of the above  requirements  from existing cash balances,  from  anticipated cash
flow from operating activities,  from funds available under the Company's Master
Note  with  its  former  parent,  Church  Loans  &  Investments  Trust,  or from
utilization of a $200,000 Line of Credit which the Company recently established.
See "Item 7: Management's Discussion and Analysis or Plan of Operation-Liquidity
and Capital Resources."


     In the event the Company is required to have additional capital,  including
additional liquid capital,  for one of the above purposes,  the Company believes
that this  requirement  can be satisfied from funds  available  under the Master
Demand Note, cash flow from operations,  collection of receivables or borrowings
secured by the Company's building.

     Arizona law also  requires the Company to maintain a fidelity  bond against
dishonesty, fraud, theft, embezzlement and other similar insurable losses. Under
legislation,  which became  effective on August 9, 2001, this fidelity bond must
be in the  minimum  amount  of $2.1  million.  The  fidelity  bond  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.

     Arizona law also  requires  the Company to  maintain  errors and  omissions
insurance of at least $500,000. This insurance must also be adequate in relation
to the Company's potential exposure.  The Company maintains errors and omissions
insurance of  $5,000,000.  However,  the  Company's E&O insurance for the period
commencing  on September 1, 2002 excludes  coverage for new claims  submitted by
the Company after September 1, 2002 that relate to the period prior to September
1, 2002. The Company has reserved its rights with respect to the insurance agent
that  procured  such  coverage,  and the  Company is not aware of any  potential
claims that relate to the period  prior to September  1, 2002.  However,  claims
could be  asserted  against  the  Company  that  relate to the  period  prior to
September  1, 2002,  and the  Company  may be  unsuccessful  in its  attempts to
procure coverage for such claims. Additionally,  although the Company intends to
attempt  to  procure  E&O  coverage  without an  exclusion  for claims  prior to
September  1, 2002 when it renews  its E&O  policy on or about  September  2003,
there may be no  assurance  that the  Company  will be  successful  in doing so.
Finally,  the Arizona  Banking  Department  has  informed  the Company  that the
exclusion  in its E&O  coverage  for new claims  relating to the period prior to
September 1, 2002 does not comply with Banking  Department  requirements,  which
could subject the Company to one of the remedies  described  immediately  below,
including   suspension  or  revocation  of  its  certificate  with  the  Banking
Department.

<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, 2003,  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.  Controls and Procedures

     As required by Rule 13a-15 under the Exchange Act, within the 90 days prior
to the filing date of this report,  the Company carried out an evaluation of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the  participation  of the Company's  management,  including our Chief Executive
Officer  and our  Controller/Treasurer.  Based upon that  evaluation,  our Chief
Executive  Officer and our  Controller/Treasurer  concluded  that the  Company's
disclosure controls and procedures are effective. There have been no significant
changes  in the  Company's  internal  controls  or in other  factors  that could
significantly  affect  internal  controls  subsequent  to the date  the  Company
carried out its evaluation.

     Disclosure  controls and procedures are controls and other  procedures that
are  designed to ensure that  information  required to be  disclosed  in Company
reports  filed or  submitted  under the  Exchange  Act is  recorded,  processed,
summarized and reported within the time periods  specified in the Securities and
Exchange  Commission's  rules and  forms.  Disclosure  controls  and  procedures
include controls and procedures designed to ensure that information  required to
be disclosed in Company  reports filed under the Exchange Act is accumulated and
communicated to management,  including the Company's Chief Executive Officer and
Controller/Treasurer  as  appropriate,   to  allow  timely  decisions  regarding
required disclosure.

<PAGE> 14

Item 4.    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.

     Dorothy  Castenada,  as  Personal  Representative  of the Estate of Dorothy
Long, vs. Colonial Trust Company (PB 2002-000207).

     The  Company  is  a  defendant   in  a  lawsuit   filed  by  the   personal
representative  of the Dorothy Long Trust (the  "Trust"),  a trust for which the
Company  served as trustee.  The  personal  representative  has alleged that the
Company  breached  its  duties as  trustee in  connection  with the  Trust.  The
personal representative seeks damages of $200,000, plus its costs and attorneys'
fees in the  litigation,  and has also  requested that the Company be removed as
trustee of the Trust.  The  Company  has filed a  counter-petition  against  the
personal  representative of the Trust and has also filed a third-party complaint
against counsel for the Trust.

     Some discovery has been conducted in the above litigation, but considerable
additional  discovery  remains  to be  completed.  In light of the status of the
above litigation, management is unable to determine the potential outcome of the
above litigation or the range of the potential loss, if any, to the Company. The
terms of the Company's  trust  agreement  allow the Company to be reimbursed for
its costs and expenses (including  attorneys' fees) in the litigation from trust
assets,  and the  Company  has  been  reimbursed  for  its  costs  and  expenses
(including  attorneys'  fees)  to  date in the  litigation  from  trust  assets.
However,  there may be no  assurance  whether the  Company  will  ultimately  be
responsible for costs and expenses (including attorneys' fees) incurred by it to
date or incurred by it in the future in the above litigation.

              Stevens Bankruptcy Proceeding Settlement

     On December 4, 2002, an Order  Approving  Global  Compromise with Adversary
Defendants was entered in the Adversary  Proceedings  (the  "Order").  The Order
approved a  Settlement  Agreement  between  Stevens  (the  reorganized  debtor),
Stevens'  Bankruptcy  Estate,  the  Trustee  for  such  Bankruptcy  Estate  (the
"Trustee"),   Stevens'   investors   who  voted  to  accept   Stevens'   Amended
Reorganization  Plan  (collectively,   the  "Settling  Plaintiffs"),   Colonial,
Colonial's  E&O  insurance  carrier,  Stevens'  former  accountants  (Harnden  &
Hamilton,  P.C.),  the guarantor of certain of the Time  Certificates  and Fixed
Rate Investments (First Financial Trust Company,  Inc.), certain  broker-dealers
involved  in the sale of Stevens'  securities  (including  Greystone  Securities
Corporation),  certain former insiders of Stevens  (including  Clarence Stevens,
Patrick  Robarge and Damian  Sinclair)  and certain  other  third  parties  (the
"Settlement  Agreement").  Pursuant to the Settlement  Agreement,  Colonial paid
$100,000  to the  Trustee,  and the  other  settling  defendants  agreed to make
payments  to the  Trustee in various  amounts,  which  payments  were  funded in
January  2003.  Additionally,  the Settling  Plaintiffs  and the other  settling
defendants all released Colonial and the other settling  defendants from any and
all claims and  liabilities  relating  to Stevens or the  Adversary  Proceeding.
Stevens  (the  reorganized  debtor)  and  the  Stevens  Bankruptcy  Estate  also
indemnified  Colonial and the other settling defendants against any contribution
or  indemnity  claims  that may be brought by parties who are not a party to the
Settlement  Agreement.  The Order also  released any other  potential  claims by
third parties subject to the Court's jurisdiction against Colonial and the other
settling defendants.


Item 5.    Submission of Matters to a Vote of Security Holders.

     None.


                                     Part II


Item 6.    Market for Common Equity and Related Stockholder Matters.

     On June 4, 2003,  the  Company  had  approximately  1,692  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  "  Item  1:   Business-Regulation,   Licensing  and
Supervision".



<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, 2003, were
$3.50 and $2.00 per share. 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 7.    Management's Discussion and Analysis or Plan of Operation

     The  following  discussion of the results of the  operations  and financial
condition  of the  Company  should  be read in  conjunction  with the  Company's
financial  statements  and notes  thereto  included  elsewhere  in this  report.
Historical  results and  relationships  among  accounts are not  necessarily  an
indication of trends in operating results for any future period.

Critical Accounting Policies

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management  to make a number  of  estimates  and  assumptions  that  affect  the
reported  amounts of assets and liabilities and disclosure of contingent  assets
and  liabilities  at the date of the financial  statements.  Such  estimates and
assumptions  affect the reported  amounts of revenues  and  expenses  during the
reporting  period.  On an ongoing  basis,  management  of the Company  evaluates
estimates and  assumptions  based upon  historical  experience and various other
factors and  circumstances.  The Company  believes its estimates and assumptions
are  reasonable in the  circumstances;  however,  actual results may differ from
these estimates under different future conditions.

     Management  believes  that  the  estimates  and  assumptions  that are most
important to the portrayal of the Company's  financial  condition and results of
operations,  in that they require  management's  most  difficult,  subjective or
complex judgments,  form the basis for the accounting policies deemed to be most
critical to the Company.  These critical  accounting  policies relate to revenue
recognition  and  contingencies  related to litigation.  The Company  recognizes
revenue when earned based on three fee  structures , which are discussed in note
1 of the Company's financial  statements.  Liability estimates for contingencies
related to litigation are determined  based on the probability of loss using the
best  information  available at each  reporting  date.  Developments  related to
changes in material  contingencies  are reviewed on an on-going basis, and serve
as the basis for changes in recorded liabilities, if any.

     Management  believes  estimates and  assumptions  related to these critical
accounting  policies are appropriate under the  circumstances.  However,  should
future events or occurrences result in unanticipated  consequences,  there could
be a material impact on our future financial condition or results of operations.



           Results of Operations for the Years Ended March 31, 2003 and 2002

     The Company  had net  earnings of $75,644,  or $.10  diluted  earnings  per
share,  for the fiscal  year ended  March 31,  2003,  compared  to a net loss of
$82,759,  or $.11  diluted  loss per share,  for the fiscal year ended March 31,
2002.   The Company had total  revenue of  $4,161,886  for the fiscal year ended
March 31, 2003,  compared to total  revenues of  $3,865,501  for the fiscal year
ended March 31, 2002, an increase of 8%.

<PAGE> 16

                        Corp. Trust  Wealth Mgmt     Other        Total
                        -----------  -----------    -------     --------
            2003
Bond Servicing Revenue   $1,874,098         --           --     $1,874,098
IRA Servicing Fees          553,520   $  292,866         --        846,386
Trust Income                   --      1,369,130         --      1,369,130
Interest & Other Income        --           --     $   72,272       72,272
                         ----------   ----------   ----------   ----------
                         $2,427,618   $1,661,996   $   72,272   $4,161,886
                         ==========   ==========   ==========   ==========
General & Administrative
Expenses                 $1,656,748   $1,215,175   $1,169,222   $4,041,145
                         ==========   ==========   ==========   ==========


            2002

Bond Servicing Revenue   $1,929,990         -            -      $1,929,990
IRA Servicing Fees          606,981     $257,962         -         864,943
Trust Income                   -         984,582         -         984,582
Interest & Other Income        -            -         $85,986       85,986
                         ----------   ----------   ----------   ----------
                         $2,536,971   $1,242,544      $85,986   $3,865,501
                         ==========   ==========   ==========   ==========

General & Administrative
Expenses                 $1,750,689   $1,063,647   $1,175,130   $3,989,466
                         ==========   ==========   ==========   ==========


            2001
Bond Servicing Revenue   $2,429,902         --           --     $2,429,902
IRA Servicing Fees          558,730   $  280,988         --        839,718
Trust Income                   --        866,389         --        866,389
Interest & Other Income        --           --     $   88,446       88,446
                         ----------   ----------   ----------   ----------
                         $2,988,632   $1,147,377   $   88,446   $4,224,455
                         ==========   ==========   ==========   ==========

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



     The Corporate  Trust  segment's  revenue  decreased to  $2,427,618  for the
fiscal year ended March 31,  2003,  compared to  $2,536,971  for the fiscal year
ended March 31, 2002, a decrease of 4%. The Wealth  Management  Group  segment's
revenue  increased  to  $1,661,996  for the fiscal  year ended  March 31,  2003,
compared to $1,242,544  for the fiscal year ended March 31, 2002, an increase of
34%.

     The  Corporate  Trust  segment's  bond  servicing   revenue   decreased  to
$1,874,098 for the fiscal year ended March 31, 2003,  compared to $1,929,990 for
the fiscal year ended  March 31,  2002,  a decrease of 3%. The  decrease in bond
servicing revenue was primarily  attributable to the following  factors.  First,
interest  earnings on  investments  were  approximately  $220,000  less than the
previous  year  due to lower  interest  rates  and  generally  lower  investment
balances generating these earnings in the current year. The Company's investment
balances fluctuate depending upon the number of new bond issuances originated in
the period approximately 12 months prior thereto for which the Company serves as
trustee and paying agent. The Company's lower investment balances in the current
year therefore  reflect a reduction in the number of new bond issuances in which
the Company serves as trustee and paying agent that were originated in the prior
year,  compared  to  earlier  years.  The  reduction  in the  number of new bond
issuances  in the prior year was due to a loss of market share by the Company in
trustee  and  paying  agent  services  and  the  increased   attractiveness   of
traditional  loans and other  financings  (as  compared to bond  financings)  to
non-profit   entities   seeking  debt  financing.   Additionally,   bond  issuer
re-financings into traditional loans or other products that do not generate fees
for the Company  continued to negatively  impact bond  servicing  revenues.  The
above factors are expected to continue to negatively impact such revenues in the
foreseeable  future.  Second,  sinking  fund late fee income  was  approximately
$87,000  less than the  previous  year due to a smaller  number  of  payoffs  of
receivables  and/or  collections of fees owed, as well as a change in the policy
of  charging  late fees from each month the payment is  delinquent  to the first
month the payment is more than 30 days late.  The  following  factors  partially
offset this decrease in bond servicing revenue.  First, municipal bond servicing
fee income in the  current  year  increased  approximately  $67,000  compared to
income from such activities in the prior period due to the collection of fees on
two issues,  which are in default. It is presently uncertain whether future fees
on these issues will be collectible. Additionally,  approximately $26,000 of the
prior year's  municipal  bond  servicing fee income was classified in the Wealth
Management  Group segment.  Second,  approximately  $60,000 more past due annual
maintenance fee income was collected in the current year as compared to past due
fees collected in the prior year. Third, approximately $32,000 of fee income was
collected in the current year as additional  income  because  interest  rates on
earnings  were less than the  minimum of 4% allowed  for under the fee  schedule
within the  indentures of Corporate  Trust  issues.  No fees of this nature were
recognized  in the previous  year.  These fees will  continue to be earned while
interest rates remain low. Fourth,  approximately  $22,000 in more bond printing
fee income was generated this year as compared to last year.  Fifth,  $30,000 in
miscellaneous  trust income was earned from the restructuring of a bond issue in
the current year as compared to the prior year. Other minor differences  account
for the remaining net decrease in bond servicing income.

     The Company is serving as trustee and paying agent on 39 bond  offerings in
the original principal amount of approximately $66 million which were originated
in the fiscal year ended March 31,  2003,  compared to 43 bond  offerings in the
original  principal amount of approximately $42 million which were originated in
the fiscal  year ended  March 31,  2002.  Additionally  at March 31,  2003,  the
Company was serving as trustee and paying agent on 480 bond  offerings  totaling
approximately  $431 million in original principal amount; at March 31, 2002, the
Company was serving as trustee and paying agent on 513 bond  offerings  totaling
approximately $452 million in original principal amount. The Company anticipates
that its bond  servicing  revenues will decrease in the fiscal year ending March
31, 2004 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, although the magnitude
of such  decrease  will be dependent  upon the strength of the  non-profit  bond
market,  the  amount  of  market  share  which the  Company  is able to  garner,
competition from  traditional  lenders and other factors which are not presently
ascertainable.



<PAGE> 17

     Revenue  from  the  Corporate  Trust  segment's  IRA  servicing  activities
decreased  to $553,520  for the fiscal year ended  March 31,  2003,  compared to
$606,981  for the fiscal  year ended March 31,  2002,  a decrease of 9%. The net
decrease in revenue from  Corporate  Trust segment IRA servicing  activities was
primarily due to a reduction in earnings caused by lower interest  rates,  which
more than offset the increase in investment  balances  generating these earnings
in the current  year.  Revenue from the Wealth  Management  Group  segment's IRA
servicing  activities  increased to $292,866 for the fiscal year ended March 31,
2003, compared to $257,962 for the fiscal year ended March 31, 2002, an increase
of 14%.

     At March 31, 2003, the Corporate  Trust segment was servicing  10,127 IRA's
with an aggregate value of approximately $184 million, and the Wealth Management
Group segment was servicing 293 IRA's with an aggregate  value of  approximately
$55 million.  At March 31, 2002, the Corporate Trust segment was servicing 9,899
IRA's with an aggregate  value of  approximately  $168  million,  and the Wealth
Management  Group segment was servicing 247 accounts with an aggregate  value of
approximately $50 million.

     The Wealth  Management Group segment's trust income increased to $1,369,130
for the fiscal year ended March 31,  2003,  compared to $984,582  for the fiscal
year ended March 31,  2002,  an increase of 39%. At March 31,  2003,  the Wealth
Management  Group  segment  was  serving  as  trustee  or agent  for 650  trust,
investment accounts, or other accounts with a fair market value of approximately
$235 million. At March 31, 2002, the Wealth Management Group segment was serving
as trustee or agent for 678 trust, investment accounts, or other accounts with a
fair market  value of  approximately  $125  million.  The increase in the Wealth
Management  Group segment's trust income was partly due to the earning of a full
year's revenue in a new  significant  trust  relationship  in the current fiscal
year,  as compared to a partial  year's  revenue in the prior fiscal  year,  and
secondly due to an increase in the value of accounts of another new  significant
trust relationship, which more than offset a reduction in the number of accounts
serviced  by  the  segment,  In  particular,  the  first  additional  new  trust
relationship  commenced  in January  2002,  and the other of which  commenced in
January 2003.

     Interest & Other  Income  decreased  to $72,272  for the fiscal  year ended
March 31, 2003,  compared to $85,986 for the fiscal year ended March 31, 2002, a
decrease of 16%. The decrease was  primarily  attributable  to reduced  interest
rates on investment balances, in the current year, a one-time systems conversion
fee attributable to a new registrar and disbursing  agency account  occurring in
the prior year,  partially  offset by larger  interest  earnings on  receivables
collected in the current year.

     The Corporate Trust segment's general and administrative expenses decreased
in the  aggregate  to  $1,656,748  for the  fiscal  year ended  March 31,  2003,
compared to  $1,750,689  for the fiscal year ended March 31, 2002, a decrease of
5%, and decreased to 68% of segment revenues for the fiscal year ended March 31,
2003,  compared  to 69% of segment  revenues  in the fiscal year ended March 31,
2002. This decrease was largely  attributable to approximately  $206,000 less in
expenses  incurred  in the  current  year  as  compared  to the  prior  year  in
connection  with the Stevens  bankruptcy  proceeding  and the  litigation  filed
against the Company  related  thereto.  Pursuant  to the  Settlement  Agreement,
Colonial paid $100,000 to the Trustee,  and the other settling defendants agreed
to make payments to the Trustee in various  amounts,  which payments were funded
in January 2003.  Additionally,  the Settling  Plaintiffs and the other settling
defendants all released Colonial and the other settling  defendants from any and
all claims and  liabilities  relating  to Stevens or the  Adversary  Proceeding.
Stevens  (the  reorganized  debtor)  and  the  Stevens  Bankruptcy  Estate  also
indemnified  Colonial and the other settling defendants against any contribution
or  indemnity  claims  that may be brought by parties who are not a party to the
Settlement  Agreement.  The Order also  released any other  potential  claims by
third parties subject to the Court's jurisdiction against Colonial and the other
settling defendants.

     The Wealth Management Group segment's general and  administrative  expenses
increased  in the  aggregate to  $1,215,175  for the fiscal year ended March 31,
2003,  compared  to  $1,063,647  for the fiscal year ended  March 31,  2002,  an
increase of 14%, but  decreased  to 73% of segment  revenues for the fiscal year
ended March 31,  2003,  compared to 86% of segment  revenues for the fiscal year
ended March 31, 2002.  This  decrease was largely  attributable  to a relatively
smaller increase in Wealth  Management Group segment expenses as compared to the
increase  in  segment  revenues,  primarily  due to the  addition  of two  trust
relationships,  one  which  commenced  in  January  2002 and the  other of which
commenced in January 2003.

     The Company's  effective  income tax rate was 37% for the fiscal year ended
March 31, 2003.

<PAGE> 18

     Results of Operations for the Years Ended March 31, 2002 and 2001

     The Company had a net loss of $82,759,  or $.11 diluted loss per share, for
the fiscal year ended March 31, 2002,  compared to net earnings of $341,048,  or
$.46  diluted  earnings  per share,  for the fiscal year ended March 31, 2001, a
decrease in net earnings of 124%.  The Company had total  revenue of  $3,865,501
for the  fiscal  year  ended  March  31,  2002,  compared  to total  revenue  of
$4,224,455 for the fiscal year ended March 31, 2001, a decrease of 9%.


     The Corporate  Trust  segment's  revenue  decreased to  $2,536,971  for the
fiscal year ended March 31,  2002,  compared to  $2,988,632  for the fiscal year
ended March 31, 2001, a decrease of 15%. The Personal  Trust  segment's  revenue
increased to  $1,242,544  for the fiscal year ended March 31, 2002,  compared to
$1,147,377 for the fiscal year ended March 31, 2001, an increase of 8%.

     The  Corporate  Trust  segment's  bond  servicing   revenue   decreased  to
$1,929,990 for the fiscal year ended March 31, 2002,  compared to $2,429,902 for
the fiscal year ended March 31,  2001,  a decrease of 21%.  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, 2002,  compared to new non-profit  bond
issuances  for which the Company  was serving as trustee and paying  agent which
were  originated  in the fiscal year ended March 31,  2001.  Such  decrease  was
primarily  attributable  to  the  Company's  reduced  share  of the  market  for
non-profit  bonds. The Company is serving as trustee and paying agent on 43 bond
offerings in the original  principal amount of  approximately  $42 million which
were  originated  in the fiscal year ended March 31,  2002,  compared to 63 bond
offerings in the original  principal amount of  approximately  $66 million which
were  originated in the fiscal year ended March 31, 2001.  Additionally at March
31,  2002,  the  Company  was  serving as trustee  and paying  agent on 514 bond
offerings  totaling  approximately $452 million in original principal amount; at
March 31, 2001,  the Company was serving as trustee and paying agent on 524 bond
offerings totaling  approximately $471 million in original principal amount.

     Revenue  from  the  Corporate  Trust  segment's  IRA  servicing  activities
increased  to $606,981  for the fiscal year ended  March 31,  2002,  compared to
$558,730  for the fiscal year ended March 31, 2001,  an increase of 9%.  Revenue
from the Wealth Management Group segment's IRA servicing activities decreased to
$257,962 for the fiscal year ended March 31, 2002,  compared to $280,988 for the
fiscal year ended March 31, 2001, a decrease of 8%.


<PAGE> 19

     At March 31, 2002,  the Corporate  Trust segment was servicing  9,899 IRA's
with an aggregate value of approximately $168 million, and the Wealth Management
Group segment was servicing 247 IRA's with an aggregate  value of  approximately
$50 million.  At March 31, 2001, the Corporate Trust segment was servicing 9,710
IRA's with an aggregate value of  approximately  $170 million,  and the Personal
Trust  segment  was   servicing   230  accounts  with  an  aggregate   value  of
approximately $47 million. At March 31, 2002,  approximately $19 million loss in
value of investments in Corporate Trust segment IRA's was written off due to the
Stevens  Bankruptcy  Procedure.

     The Wealth  Management  Group segment's trust income  increased to $984,582
for the fiscal year ended March 31,  2002,  compared to $866,389  for the fiscal
year ended March 31,  2001,  an increase of 14%. At March 31,  2002,  the Wealth
Management  Group  segment  was  serving  as  trustee  or agent  for 678  trust,
investment accounts, or other accounts with a fair market value of approximately
$125 million. At March 31, 2001, the Wealth Management Group segment was serving
as trustee or agent for 580 trust, investment accounts, or other accounts with a
fair market value of approximately  $149 million.

     Interest & Other  Income  decreased  to $85,986  for the fiscal  year ended
March 31, 2002,  compared to $88,446 for the fiscal year ended March 31, 2001, a
decrease of 3%. The  decrease was  primarily  attributable  to reduced  interest
rates on investment balances.

     The Corporate Trust segment's general and administrative expenses increased
in the  aggregate  to  $1,750,689  for the  fiscal  year ended  March 31,  2002,
compared to $1,499,462  for the fiscal year ended March 31, 2001,  and increased
to 69% of segment revenues for the fiscal year ended March 31, 2002, compared to
50% of segment  revenues in the fiscal year ended March 31, 2001.  This increase
was  attributable to expenses of approximately  $330,000  incurred in connection
with the Stevens  bankruptcy  proceeding  and the  litigation  filed against the
Company  related  thereto in the fiscal year ended March 31, 2002.  The Personal
Trust segment's general and  administrative  expenses increased in the aggregate
to  $1,063,647  for the fiscal year ending March 31, 2002,  compared to $869,911
for the fiscal  year  ended  March 31,  2001,  and  increased  to 86% of segment
revenues  for the fiscal year ended March 31,  2002,  compared to 76% of segment
revenues for the fiscal year ended March 31, 2001.

     A Loss before  income  taxes from  Operations  for the year ended March 31,
2002 of approximately $124,000 resulted in the creation of an income tax benefit
of approximately $41,000.

     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, and its success in managing the trust
and investment  agency  accounts for which it provides  services;  the Company's
success in servicing 401(k) accounts;  finding a suitable replacement investment
advisor for WIS; 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;  the Company's ability to procure E&O insurance with
appropriate   coverage  levels  and  other  terms;  and  changes  in  rules  and
regulations adversely impacting the Company's business segments.


           Liquidity and Capital Resources


     Under  legislation  effective on July 20, 1996,  the Company is required to
maintain  net  capital of at least  $500,000;  the  Company's  net  capital  was
approximately  $2,800,000 on March 31, 2003.  Arizona law also requires that the
Company's  net  capital  meet  certain  liquidity  requirements.   Specifically,
$500,000  of such  net  capital  must  meet  the  Arizona  Banking  Department's
liquidity requirements.  Additional capital requirements may be imposed upon the
Company in the future as a result of Arizona  legislation which became effective
on August 9, 2001 and which the Company  became subject to on December 31, 2002.
For further discussion of possible future additional capital  requirements,  see
"Item 1: Regulation,  Licensing and Supervision." At March 31, 2003, $506,377 of
the Company's net capital met the Department's liquidity requirements.

     The Company's  cash and cash  equivalents  increased from $166,592 on March
31, 2002, to $243,048 on March 31, 2003, and the note receivable  increased from
$324,156 on March 31, 2002,  to $353,635 on March 31, 2003.  The increase in the
cash and cash  equivalents  was primarily  due to net earnings of  approximately
$71,000.  The increase in the note  receivable was due to net advances under the
note  of  approximately  $19,000.  The  Company's  net  property  and  equipment
decreased  from $705,426 on March 31, 2002,  to $665,503 on March 31, 2003.  The
decrease was primarily due to depreciation  of property and equipment  exceeding
the purchase of replacement computer equipment and software for employees.

     The  Company  believes  that it will be  able  to  satisfy  its  regulatory
capital,   working  capital  and  capital   expenditure   requirements  for  the
foreseeable  future from  existing  cash  balances,  anticipated  cash flow from
operating activities,  from funds available under the Company's Master Note with
its former parent,  Church Loans and Investments  Trust,  and if necessary,  the
utilization  of a $200,000 Line of  Credit(LOC)  from Bank One,  established  on
January 2, 2003.  There have been no advances  under the LOC, and unless renewed
this  facility  will  terminate  on December 15,  2003.  The Company  intends to
consider  and  analyze  potential  merger,  going  private  or  other  strategic
opportunities that may benefit the Company and its stockholders.




<PAGE> 20




           Recent Accounting Pronouncements

     In July 2001, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement No. 141, Business  Combinations  ("Statement  141"), and Statement No.
142,  Goodwill and Other  Intangible  Assets  ("Statement  142").  Statement 141
requires  that the  purchase  method  of  accounting  be used  for all  business
combinations  initiated after June 30, 2001 as well as all business combinations
completed  after June 30,  2001.  Statement  141 also  specifies  criteria  that
intangible assets acquired in a business  combination must meet to be recognized
and reported apart from goodwill, noting that any purchase price allocable to an
assembled workforce may not be accounted for separately.  Statement 142 requires
that goodwill and intangible  assets with  indefinite  useful lives no longer be
amortized,  but instead  tested for  impairment at least  annually in accordance
with  the  provisions  of  Statement  142.  Statement  142  also  requires  that
intangible  assets with definite useful lives be amortized over their respective
estimated  useful lives to their  estimated  residual  values,  and reviewed for
impairment in accordance  with SFAS No. 121,  Accounting  for the  Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.

     Effective  April 1,  2002 the  Company  complied  with  the  provisions  of
statement 142 which required that goodwill and intangible assets with indefinite
useful lives no longer be  amortized,  but instead be tested for  impairment  at
least annually in accordance with the provisions of the statement.

     In  connection  with  the  transitional  goodwill  impairment   evaluation,
Statement 142 required the Company to perform an assessment of whether there was
an  indication  that  goodwill  was  impaired  as of the  date of  adoption.  To
accomplish  this the Company  identified its reporting  units and determined the
carrying value of each  reporting unit by assigning the assets and  liabilities,
including the existing goodwill and intangible  assets, to those reporting units
as of the date of adoption.  The Company then  determined the fair value of each
reporting unit and compared it to the reporting unit's carrying  amount.  To the
extent a reporting  unit's carrying amount exceeds its fair value, an indication
exists that the reporting  unit's  goodwill may be impaired and the Company must
perform the second step of the transitional impairment test. In the second step,
the  Company  must  compare  the  implied  fair  value of the  reporting  unit's
goodwill, determined by allocating the reporting unit's fair value to all of its
assets  (recognized and  unrecognized)  and liabilities in a manner similar to a
purchase  price  allocation in accordance  with  Statement  141, to its carrying
amount,  both of which would be measured as of the date of adoption.  During the
year ended March 31, 2003  management  evaluated the  un-amortized  goodwill and
concluded  that in its opinion there has been no  impairment.  As of the date of
adoption, the Company had un-amortized goodwill in the amount of $104,729, which
was subject to the transition provisions of Statements 141 and 142. Amortization
expense  related to goodwill  was $0 and $12,182 and $12,170 for the years ended
March 31,  2003,  2002 and 2001,  respectively.  The  impact of  adopting  these
Statements  did  not  have a  material  affect  on,  nor  was  any  transitional
impairment loss required to be recognized in, the Company's financial statements
for the year ended March 31, 2003.


<PAGE> 21

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment  or  Disposal of  Long-Lived  Assets".  SFAS No. 144 amends  existing
guidance  on asset  impairment  and  provides  a  single  accounting  model  for
long-lived  assets to be disposed of. SFAS No. 144 also changes the criteria for
classifying an asset as  held-for-sale;  and broadens the scope of businesses to
be disposed of that qualify for reporting as discontinued operations and changes
the timing of  recognizing  losses on such  operations.  Statement  No. 144 also
supersedes  the  accounting  and  reporting  revisions  of APB  Opinion  No. 30,
Reporting  the  Results of  Operations-Reporting  the  Effects of  Disposal of a
Segment of a Business,  and  Extraordinary,  Unusual and Infrequently  Occurring
Events and Transactions,  for the disposal of a segment of a business.  However,
it retains the requirement in Opinion No. 30 to report  separately  discontinued
operations  and extends  that  reporting to a component of an entity that either
has been disposed of (by sale,  abandonment,  or in a distribution to owners) or
is classified as held for sale. By broadening the  presentation  of discontinued
operations  to  include  more  disposal  transactions,  the  FASB  has  enhanced
management's ability to provide information that helps financial statement users
to assess the effects of a disposal  transaction on the ongoing operations of an
entity. Statement No. 144 is effective for fiscal years beginning after December
15,  2001.  The  adoption  of this  statement  on April  1,  2002 did not have a
material impact on the Company's financial position.


     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections". This statement rescinds the requirement to report gains and losses
from  extinguishment  of  debt  as an  extraordinary  item.  Additionally,  this
statement amends Statement 13 to require  sale-leaseback  accounting for certain
lease  modifications  that  have  economic  effects  similar  to  sale-leaseback
transactions.  The  provisions  of this  statement  relating to  Statement 4 are
applicable in fiscal years  beginning after May 15, 2002. The provisions of this
statement related to Statement 13 are effective for transactions occurring after
May 15, 2002. All other provisions of this statement are effective for financial
statements issued on or after May 15, 2002. The adoption of SFAS No. 145 did not
have a material effect on the Company's financial statements.

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal Activities". SFAS 146 nullifies Emerging Issues
Task Force (EITF) Issue No. 94-3,  "Liability  Recognition for Certain  Employee
Termination  Benefits  and Other Costs to Exit an  Activity."  The  Statement is
effective for exit or disposal activities initiated after December 31, 2002. The
adoption  of SFAS No.  146 did not have an  effect  on the  Company's  financial
statements.

     In  November   2002,   the  EITF   reached  a  consensus  on  Issue  00-21,
Multiple-Deliverable  Revenue Arrangements ("EITF 00-21").  EITF 00-21 addresses
how to account for arrangements  that may involve the delivery or performance of
multiple products, services, and/or rights to use assets. The consensus mandates
how to identify  whether  goods or  services  or both which are to be  delivered
separately in a bundled  sales  arrangement  should be accounted for  separately
because they are  "separate  units of  accounting."  The guidance can affect the
timing of revenue  recognition  for such  arrangements,  even though it does not
change  rules  governing  the  timing  or  pattern  of  revenue  recognition  of
individual  items  accounted  for  separately.   The  final  consensus  will  be
applicable to agreements  entered into in fiscal years  beginning after June 15,
2003 with early adoption permitted. Additionally, companies will be permitted to
apply the  consensus  guidance to all existing  arrangements  as the  cumulative
effect of change in accounting  principle in accordance with APB Opinion No. 20,
Accounting Changes. The Company is assessing, but at this point does not believe
the adoption of EITF 00-21 will have a material impact on its financial position
or results of operations.

     In  December  2002,  the FASB  issued  Statement  of  Financial  Accounting
Standards  No.  148,  Accounting  for  Stock-Based  Compensation-Transition  and
Disclosure  ("SFAS  148").  SFAS 148 amends  Statement of  Financial  Accounting
Standards No. 123.  Accounting for Stock-Based  Compensation  ("SFAS 123"),  and
provides  alternative  methods of transition for a voluntary  change to the fair
value based method of accounting for stock-based employee compensation. SFAS 148
also amends the  disclosure  requirements  of SFAS 123 to require more prominent
and  frequent   disclosures  in  financial   statements  about  the  effects  of
stock-based   compensation.   The  transition  guidance  and  annual  disclosure
provisions of SFAS 148 are effective for financial  statements issued for fiscal
years ending after  December 15, 2002.  The interim  disclosure  provisions  are
effective for financial  reports  containing  financial  statements  for interim
periods beginning after December 15, 2002. The adoption of SFAS 148 did not have
a material impact on the Company's financial position or results of operations.

     In  April 2003,  the FASB issued SFAS 149,  "Amendment  of Statement 133 on
Derivative  Instruments  and  Hedging  Activities,"  which  amends  SFAS 133 for
certain  decisions  made  by the  FASB  Derivatives  Implementation  Group.   In
particular,  SFAS 149 (1) clarifies under what  circumstances a contract with an
initial net investment meets the  characteristic of a derivative,  (2) clarifies
when a derivative contains a financing  component,  (3) amends the definition of
an underlying  to conform it to language used in FIN 45, and (4) amends  certain
other  existing  pronouncements.   This  Statement  is effective  for  contracts
entered into or modified  after  June 30,  2003,  and for hedging  relationships
designated after June 30, 2003.  In addition, most provisions of SFAS 149 are to
be applied  prospectively.   We do not expect the adoption of SFAS 149 to have a
material  impact  upon  our  financial  position,   cash  flows  or  results  of
operations.

     In May 2003,  the FASB issued SFAS 150,  "Accounting for Certain  Financial
Instruments  with  Characteristics  of both  Liabilities  and Equity."  SFAS 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics of both liabilities and equity.  It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some  circumstances).   SFAS 150 is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is  effective at the  beginning  of the first  interim  period  beginning  after
June 15,  2003.  It is to be implemented by reporting the cumulative effect of a
change in an accounting  principle for financial  instruments created before the
issuance  date of the  Statement  and still  existing  at the  beginning  of the
interim period of adoption.  Restatement is not permitted.  We do not expect the
adoption of SFAS 150 to have a material impact upon our financial position, cash
flows or results of operations.



           Risk Factors

           Lack of Liquidity of the Company's Common Stock


     The  Company's  Common  Stock is not  listed (or likely to be listed in the
foreseeable  future) 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 24,000 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  11:  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 significant part
upon the size of the non-profit bond market as well as the Company's  ability to
increase its market share for bond  servicing  activities.  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.  The  Company  estimates  that its
revenues from bond servicing  activities will decrease in the fiscal year ending
March 31, 2004  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. Additionally,
the  Company's  ability to maintain its market  share will be  dependent  upon a
number of  factors  of which  there  also may be no  assurances,  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"  below and "Item 1-Business
Segments-Corporate  Trust  Segment-Bond  Offering  Services."  Revenues from the
Company's  bond  servicing  activities  accounted for  approximately  45% of the
Company's total revenues in the fiscal year ended March 31, 2003.



           Market for Wealth Management Group;
           Ability to Increase Wealth Management Group Service Revenues

     The Company intends for the  foreseeable  future to limit the activities of
its Wealth Management Group 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 40% of the Company's
total revenues in the fiscal year ended March 31, 2003. The Company's ability to
continue to increase its revenues from Wealth  Management Group 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 Wealth Management accounts. Additionally, at March
31, 2003,  approximately 47 % of the Company's  Wealth  Management Group account
assets  were  held in trust  for  members  of two  families,  and such  accounts
accounted  for  approximately  12%  of the  Company's  Wealth  Management  Group
revenues in the fiscal year ended March 31, 2003.  Loss of such  revenues  could
have a material adverse effect on the Wealth Management Group segment and/or the
Company's  results  of  operations.   See  "Item  1:  Business   Segments-Wealth
Management Group 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, 2003,  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  80% of the aggregate  principal amount of all bonds
issued for which the Company  served as trustee and paying  agent.  For the year
ended March 31, 2003,  three  broker-dealers  originated  100% of the  aggregate
principal amount of all new bond issuances.  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 Wealth  Management Group
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  lenders  who offer  traditional  loans to  non-profit  entities.
Additionally,  the  Company  competes  with  large  banks  and  other  financial
institutions,  including  other  trust  companies,  located in the  metropolitan
Phoenix area for the business of providing  Wealth  Management  Group  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  $2,800,000 at March 31, 2003.  Arizona
law also  requires  that  $500,000 of the  Company's  net capital  must meet the
Department's  liquidity  requirements.  At  March  31,  2003,  $506,377  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 became effective on August 9, 2001. The Company is
also  required  to satisfy  other  requirements  under  Arizona  law,  including
maintaining errors and omissions insurance which meets certain requirements. See
"Item 1: Business - Regulation,  Licensing and Supervision.".  Additionally, the
Arizona  Banking  Department  retains broad  discretion to suspend or revoke the
certificate  of  or  impose  operational  sanctions  or  restrictions  (such  as
requiring the Company to raise additional  capital) on 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  laws  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;  providing reports
to bondholders; 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.


           Costs of Compliance with Sarbanes-Oxley Act of 2002

     Congress recently enacted the  Sarbanes-Oxley  Act of 2002, which imposes a
number of additional significant and costly obligations on companies such as the
Company that file periodic reports with the Securities and Exchange  Commission.
Compliance  with the  Sarbanes-Oxley  Act will result in significant  additional
costs to the  Company  and  will  distract  the  Company's  management  from its
day-to-day activities.


           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  (including  without  limitation  changes in  federal  and/or  state
securities  laws),  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 8.    Financial Statements.

     The Company's audited financial statements, containing balance sheets as of
March 31, 2003 and 2002,  and related  statements of  operations,  stockholders'
equity and cash flows for each of the years in the three-year period ended March
31, 2003, are set forth on the following pages.




<PAGE> 26


                             COLONIAL TRUST COMPANY
                          Index to Financial Statements

                                                                 Page

Independent Auditors' Report                                       27

Balance Sheets as of March 31, 2003, and 2002                      28

Statements of Operations for the years
       ended March 31, 2003, 2002, and 2001                        29

Statements of Stockholders' Equity for
       the years ended March 31, 2003, 2002, and 2001              30

Statements of Cash Flows for the Years
       ended March 31, 2003, 2002, and 2001                        31

Notes to Financial Statements                                      32



<PAGE> 27


                             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,  2003  and  2002,  and the  related  statements  of
operations,  stockholders'  equity  and cash  flows for each of the years in the
three-year  period  ended March 31, 2003.  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, 2003 and 2002,  and the results of its  operations  and its cash flows
for  each  of the  years  in the  three-year  period  ended  March  31,  2003 in
conformity with accounting principles generally accepted in the United States of
America.


                                                             /s/KPMG LLP

Phoenix, Arizona
June 11, 2003


<PAGE> 28


                             COLONIAL TRUST COMPANY

                                 Balance Sheets

                             March 31, 2003 and 2002



        Assets                                  2003         2002
                                             ----------   ----------
Cash and cash equivalents                    $  243,048      166,592
Receivables                                   1,145,631      853,256
Note receivable                                 353,635      324,156
Income taxes receivable                           5,864      111,819
Property and equipment, net                     665,503      705,426
Excess of cost over fair value acquired, net    104,729      104,729
Restricted cash                                 506,377      522,414
Other assets                                     99,436       99,382
                                             ----------   ----------

                                             $3,124,223    2,887,774
                                             ==========   ==========


        Liabilities and Stockholders' Equity

Accounts payable and accrued liabilities     $  305,990      213,729
                                             ----------   ----------

                                                305,990      213,729
                                             ----------   ----------

Stockholders' equity:
     Common stock, no par value. Authorized
     25,000,000 shares; issued and outstanding
     757,884 and 729,727 shares at March 31,
     2003, and 2002, respectively
                                                689,286      614,286
     Additional paid-in capital                 506,208      506,208
     Retained earnings                        1,622,739    1,553,551
                                             ----------   ----------

               Total stockholders' equity     2,818,233    2,674,045

Commitments and contingencies
(note 9)                                     ----------   ----------
                                             $3,124,223    2,887,774
                                             ==========   ==========

See accompanying notes to financial statements.


<PAGE> 29


                             COLONIAL TRUST COMPANY

                             Statements of Operations

                    Years ended March 31, 2003, 2002 and 2001



                                           2003         2002         2001
                                        ---------    ---------    ---------

Revenue:
     Bond servicing revenue             $1,874,098    1,929,990    2,429,902
     IRA servicing fees - corporate        553,520      606,981      558,730
     IRA servicing fees - wealth           292,866      257,962      280,988
     Trust income                        1,369,130      984,582      866,389
     Interest & other income                72,272       85,986       88,446
                                        ----------   ----------   ----------

            Total revenue                4,161,886    3,865,501    4,224,455

General and administrative expenses      4,041,145    3,989,466    3,646,439
                                        ----------   ----------   ----------

     Earnings (loss) before income taxes   120,741    (123,965)      578,016

     Income taxes (benefit)                 45,097     (41,206)      236,968
                                        ----------   ----------   ----------

     Net earnings (loss)                $   75,644     (82,759)      341,048
                                        ==========   ==========   ==========

Basic earnings (loss) per share         $     0.10       (0.11)         0.47
                                        ==========   ==========   ==========

Diluted earnings (loss) per share    (1)$     0.10       (0.11)         0.46
                                        ==========   ==========   ==========

Weighted average shares outstanding -
    basic                                  743,239      730,865      723,040
                                        ==========   ==========   ==========

Weighted average shares outstanding -
    diluted                          (1)   757,322      730,865      748,383
                                        ==========   ==========   ==========


(1)      Stock options are not included in diluted EPS where there is a net loss
since they are anti-dilutive.

See accompanying notes to financial statements.


<PAGE> 30



                             COLONIAL TRUST COMPANY

                       Statements of Stockholders' Equity

                    Years ended March 31, 2003, 2002 and 2001

<TABLE>
<CAPTION>
                                                                       Total
                               Common Stock      Additional            Stock-
                            ------------------   Paid-In   Retained    holders'
                            Shares    Amount     Capital   Earnings    Equity
                            --------  --------   --------  --------    ---------
<C>                         <C>       <C>        <C>       <C>         <C>


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


Common stock acquired and
  retired                   (3,616)          -         -    (12,659)    (12,659)

Issuance of common stock
  under stock option plan    12,500     35,375         -           -      35,375

Net earnings (loss)               -          -         -    (82,759)    (82,759)
                            -------   --------   -------  ----------   ---------

Balances at March 31, 2002  729,727   $614,286   506,208   1,553,551   2,674,045


Common stock acquired and
  retired                   (1,843)          -         -     (6,456)     (6,456)

Issuance of common stock
  under stock option plan    30,000     75,000         -           -      75,000

Net earnings                      -          -         -      75,644      75,644
                            -------   --------   -------   ---------   ---------

Balances at March 31, 2003  757,884   $689,286   506,208   1,622,739   2,818,233
                            =======   ========   =======   =========   =========


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

</TABLE>

<PAGE> 31



                             COLONIAL TRUST COMPANY
                            Statements of Cash Flows

<TABLE>
<CAPTION>
                    Years ended March 31, 2003, 2002 and 2001

                                                    2003      2002        2001
                                                   -------   -------     -------
<C>                                                <C>       <C>         <C>
Cash flows from operating activities:

  Net earnings (loss)                              $ 75,644  (82,759)    341,048
  Adjustments to reconcile net earnings (loss)
     to net cash provided by (used in) operating
     activities:
          Depreciation and amortization             114,958   150,636    153,353
          Deferred income taxes                       3,247  (13,422)      4,944
          Tax benefit on stock options purchased          -         -        861
          Increase (decrease) in cash resulting
             from changes in:

              Receivables                         (292,375)  (29,145)   (21,989)
              Income taxes receivable               105,955  (89,283)          -
              Other assets                             (54)  (23,211)      2,943
              Accounts payable and
                 accrued liabilities                 89,014  (91,068)    107,665
              Income taxes payable                        -         -   (46,301)
                                                   --------  --------    -------

                      Net cash provided by (used in)
                      operating activities           96,389 (178,252)    542,524
                                                   --------  --------    -------

Cash flows from investing activities:

     Payment received on note receivable            130,000   300,000    425,000
     Additions to note receivable                 (159,479) (242,649)  (428,120)
     Purchase of property and equipment            (75,035)  (47,844)   (94,124)
     Decrease (increase) in restricted cash          16,037   (6,583)   (13,275)
                                                   --------  --------  ---------

                      Net cash provided by (used in)
                      Investing activities         (88,477)     2,924  (110,519)
                                                   --------  --------  ---------

Cash flows from financing activity:

     Purchase and retirement of common stock        (6,456)  (12,659)  (145,795)
     Proceeds from issuance of common stock under
       stock option plan                             75,000    35,375     23,734
                                                  ---------   -------  ---------

                      Net cash provided by (used in)
                      Financing activities           68,544    22,716  (122,061)
                                                  --------- ---------  ---------

                      Increase (decrease) in cash
                      and equivalents                76,456 (152,612)    309,944

Cash and cash equivalents at beginning of year      166,592   319,204      9,260
                                                  ---------  --------  ---------

Cash and cash equivalents at end of year           $243,048   166,592    319,204
                                                   ========  ========  =========
Supplemental disclosures:
     Income taxes paid                             $ 16,000    61,500    300,000
                                                   ========  ========  =========

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


<PAGE> 32


                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2003, 2002 and 2001





(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 the  District of  Columbia.  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,  2003,  Colonial  was serving as
trustee  and/or  paying  agent  and/or  escrow  agent  for  the  benefit  of the
bondholders  on 480  bond  offerings  totaling  approximately  $431  million  in
original  principal  amount.  The  amount  of sold and  un-matured  bonds  total
approximately $319 million at March 31, 2003.  Colonial also serves as a trustee
of 10,127 self-directed  individual  retirement accounts for certain bondholders
or employees of religious  organizations  totaling approximately $184 million at
March 31, 2003.

     Colonial also serves as trustee or agent,  provides investment  management,
administration,  and  custodial  services  through its Wealth  Management  Group
segment  (previously  named the 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  650  accounts   with  a  fair  market  value   totaling
approximately  $235 million at March 31, 2003.  Colonial  also acts as custodian
for self-directed  IRA accounts.  Colonial held 293 accounts as custodian with a
fair market value of approximately $55 million at March 31, 2003.


<PAGE> 33

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2003, 2002 and 2001


     (b) 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 a number  of  estimates  and  assumptions  that  affect  the
reported  amounts of assets and liabilities and disclosure of contingent  assets
and  liabilities  at the date of the financial  statements.  Such  estimates and
assumptions  affect the reported  amounts of revenues  and  expenses  during the
reporting  period.  On an ongoing basis,  we evaluate  estimates and assumptions
based upon  historical  experience and various other factors and  circumstances.
Actual  results  may  differ  from  these  estimates   under  different   future
conditions.

     (c) 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, 2003,  approximately  80% of the total bond issues  processed  were
originated  by  4  broker/dealers.   For  the  year  ended  March  31,  2003,  3
broker-dealers had originated 100% of the aggregate  principal amount of all new
bond  issues.  At March 31,  2002,  approximately  95% of the total bond  issues
processed were originated by 3 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, 2003,  approximately 47% of Colonial's Wealth Management Group
account  assets were held in trust for  members of two  families.  The  combined
trust accounts  approximated 12% of Colonial's Wealth Management Group revenues.
At March 31, 2002, 11% of Colonial's Wealth Management Group account assets were
held  in  trust  for  members  of  one  family.   The  combined  trust  accounts
approximated 6% of Colonial's Wealth Management Group revenues.


<PAGE> 34

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2003, 2002 and 2001


     (d) 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, 2003 and 2002 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 between fifteen and
sixty months.

     (e) 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  impairments of notes  receivable  during fiscal
2003, 2002 and 2001.

     (f) 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.

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

     Amortization of Goodwill ceased  effective April 1, 2002 in compliance with
the provisions of Financial  Accounting Standards Boards Statement 142. Goodwill
is carried net of prior years' accumulated  amortization of $78,101 at March 31,
2003 and 2002. Amortization expense for the years ended March 31, 2003, 2002 and
2001 were $0, $12,182 and $12,170, respectively [See note 1(m)].

     (h) 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  statements
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.

      (i) 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.  23,872 options were excluded from EPS  calculations  at March 31,
2002  because a net loss for the year then  ended  caused  these  options  to be
anti-dilutive.

<PAGE> 35


                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2003, 2002 and 2001

      (j) Stock Option Plan

     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  (loss) would have been reduced to the pro forma amount
indicated below for the years ended March 31, 2003, 2002 and 2001:

<TABLE>
                              2003        2002        2001
                         -----------  -----------  -----------
<C>                        <C>          <C>          <C>
Net earnings (loss):
    As reported            $  75,644    $(82,759)    $ 341,048

Compensation cost,
     Net of taxes              3,999    $  10,072    $  10,932

                          ----------   ----------  -----------
Pro forma net              $  71,645    $(92,831)    $ 330,116
                          ==========   ==========  ===========

Earnings (loss) per share:
    As reported - basic    $     .10    $   (.11)    $     .47
                         ===========  ===========  ===========
    As reported - diluted  $     .10    $   (.11)    $     .46
                         ===========  ===========  ===========

    Pro forma - basic      $     .10    $   (.13)    $     .46
                         ===========  ===========  ===========
    Pro forma - diluted    $     .09    $   (.13)    $     .44
                         ===========  ===========  ===========

</TABLE>

     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.

     In  December  2002,  the FASB  issued  Statement  of  Financial  Accounting
Standards  No.  148,  Accounting  for  Stock-Based  Compensation-Transition  and
Disclosure  ("SFAS  148").  SFAS 148 amends  Statement of  Financial  Accounting
Standards No. 123.  Accounting for Stock-Based  Compensation  ("SFAS 123"),  and
provides  alternative  methods of transition for a voluntary  change to the fair
value based method of accounting for stock-based employee compensation. SFAS 148
also amends the  disclosure  requirements  of SFAS 123 to require more prominent
and  frequent   disclosures  in  financial   statements  about  the  effects  of
stock-based   compensation.   The  transition  guidance  and  annual  disclosure
provisions of SFAS 148 are effective for financial  statements issued for fiscal
years ending after  December 15, 2002.  The interim  disclosure  provisions  are
effective for financial  reports  containing  financial  statements  for interim
periods  beginning  after  December  15,  2002.  The adoption of SFAS 148 is not
expected  to have a material  impact on the  Company's  financial  position  and
results of operations.

      (k) 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  exceeds 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.[See note 1(m)].

      (l) Reclassifications

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

     (m) New Accounting Pronouncements

     Effective  April 1,  2002 the  Company  complied  with  the  provisions  of
Statement 142 which required that goodwill and intangible assets with indefinite
useful lives no longer be  amortized,  but instead be tested for  impairment  at
least annually in accordance with the provisions of the statement.

     During the year ended March 31, 2003 management  evaluated the un-amortized
goodwill and concluded that in its opinion there has been no impairment.

     As of the date of adoption,  the company had  un-amortized  goodwill in the
amount of $104,729, which was subject to the transition provisions of Statements
141 and 142.  Amortization  expense  related to  goodwill  was $0,  $12,182  and
$12,170 for the years ended March 31,  2003,  2002 and 2001,  respectively.  The
impact of adopting these  Statements did not have a material  affect on, nor was
any  transitional  impairment  loss required to be recognized  in, the Company's
financial statements for the year ended March 31, 2003.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment  or  Disposal of  Long-Lived  Assets".  SFAS No. 144 amends  existing
guidance  on asset  impairment  and  provides  a  single  accounting  model  for
long-lived  assets to be disposed of. SFAS No. 144 also changes the criteria for
classifying an asset as  held-for-sale;  and broadens the scope of businesses to
be disposed of that qualify for reporting as discontinued operations and changes
the timing of  recognizing  losses on such  operations.  Statement  No. 144 also
supersedes  the  accounting  and  reporting  provisions  of APB  Opinion No. 30,
Reporting  the  Results of  Operations-Reporting  the  Effects of  Disposal of a
Segment of a Business,  and  Extraordinary,  Unusual and Infrequently  Occurring
Events and Transactions,  for the disposal of a segment of a business.  However,
it retains the requirement in Opinion No. 30 to report  separately  discontinued
operations  and extends  that  reporting to a component of an entity that either
has been disposed of (by sale,  abandonment,  or in a distribution to owners) or
is classified as held for sale. By broadening the  presentation  of discontinued
operations  to  include  more  disposal  transactions,  the  FASB  has  enhanced
management's ability to provide information that helps financial statement users
to assess the effects of a disposal  transaction on the ongoing operations of an
entity. Statement No. 144 is effective for fiscal years beginning after December
15,  2001.  The  adoption  of this  statement  on April  1,  2002 did not have a
material impact on the Company's financial position.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,   Amendment  of  FASB  Statement   No.13,  and  Technical
Corrections". This statement rescinds the requirement to report gains and losses
from  extinguishment  of  debt  as an  extraordinary  item.  Additionally,  this
statement amends Statement 13 to require  sale-leaseback  accounting for certain
lease  modifications  that  have  economic  effects  similar  to  sale-leaseback
transactions.  The  provisions  of this  statement  relating to  Statement 4 are
applicable in fiscal years  beginning after May 15, 2002. The provisions of this
statement related to Statement 13 are effective for transactions occurring after
May 15, 2002. All other provisions of this statement are effective for financial
statements issued on or after May 15, 2002. The adoption of SFAS No. 145 did not
have a material effect on the Company's financial statements.

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal Activities". SFAS 146 nullifies emerging Issues
Task Force (EITF) Issue No. 94-3,  "Liability  Recognition for Certain  Employee
Termination  Benefits  and Other Costs to Exit an  Activity.  The  Statement  is
effective for exit or disposal activities initiated after December 31, 2002. The
adoption  of SFAS  No.  146 did not  have a  material  effect  on the  Company's
financial statements.

     In  November   2002,   the  EITF   reached  a  consensus  on  Issue  00-21,
Multiple-Deliverable  Revenue Arrangements ("EITF 00-21").  EITF 00-21 addresses
how to account for arrangements  that may involve the delivery or performance of
multiple products, services, and/or rights to use assets. The consensus mandates
how to identify  whether  goods or  services  or both which are to be  delivered
separately in a bundled  sales  arrangement  should be accounted for  separately
because they are  "separate  units of  accounting."  The guidance can affect the
timing of revenue  recognition  for such  arrangements,  even though it does not
change  rules  governing  the  timing  or  pattern  of  revenue  recognition  of
individual  items  accounted  for  separately.   The  final  consensus  will  be
applicable to agreements  entered into in fiscal years  beginning after June 15,
2003 with early adoption permitted. Additionally, companies will be permitted to
apply the  consensus  guidance to all existing  arrangements  as the  cumulative
effect of change in accounting  principle in accordance with APB Opinion No. 20,
Accounting Changes. The Company is assessing, but at this point does not believe
the adoption of EITF 00-21 will have a material impact on its financial position
or results of operations.

     In  December  2002,  the FASB  issued  Statement  of  Financial  Accounting
Standards  No.  148,  Accounting  for  Stock-Based  Compensation-Transition  and
Disclosure  ("SFAS  148").  SFAS 148 amends  Statement of  Financial  Accounting
Standards No. 123.  Accounting for Stock-Based  Compensation  ("SFAS 123"),  and
provides  alternative  methods of transition for a voluntary  change to the fair
value based method of accounting for stock-based employee compensation. SFAS 148
also amends the  disclosure  requirements  of SFAS 123 to require more prominent
and  frequent   disclosures  in  financial   statements  about  the  effects  of
stock-based   compensation.   The  transition  guidance  and  annual  disclosure
provisions of SFAS 148 are effective for financial  statements issued for fiscal
years ending after  December 15, 2002.  The interim  disclosure  provisions  are
effective for financial  reports  containing  financial  statements  for interim
periods beginning after December 15, 2002. The adoption of SFAS 148 did not have
a material impact on the Company's financial position or results of operations.

     In  April 2003,  the FASB issued SFAS 149,  "Amendment  of Statement 133 on
Derivative  Instruments  and  Hedging  Activities,"  which  amends  SFAS 133 for
certain  decisions  made  by the  FASB  Derivatives  Implementation  Group.   In
particular,  SFAS 149 (1) clarifies under what  circumstances a contract with an
initial net investment meets the  characteristic of a derivative,  (2) clarifies
when a derivative contains a financing  component,  (3) amends the definition of
an underlying  to conform it to language used in FIN 45, and (4) amends  certain
other  existing  pronouncements.   This  Statement  is effective  for  contracts
entered into or modified  after  June 30,  2003,  and for hedging  relationships
designated after June 30, 2003.  In addition, most provisions of SFAS 149 are to
be applied  prospectively.   We do not expect the adoption of SFAS 149 to have a
material  impact  upon  our  financial  position,   cash  flows  or  results  of
operations.

     In May 2003,  the FASB issued SFAS 150,  "Accounting for Certain  Financial
Instruments  with  Characteristics  of both  Liabilities  and Equity."  SFAS 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics of both liabilities and equity.  It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some  circumstances).   SFAS 150 is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is  effective at the  beginning  of the first  interim  period  beginning  after
June 15,  2003.  It is to be implemented by reporting the cumulative effect of a
change in an accounting  principle for financial  instruments created before the
issuance  date of the  Statement  and still  existing  at the  beginning  of the
interim period of adoption.  Restatement is not permitted.  We do not expect the
adoption of SFAS 150 to have a material impact upon our financial position, cash
flows or results of operations.


<PAGE> 36

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2003, 2002 and 2001


(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 million
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:

<TABLE>
                                2003         2002
                         -----------  -----------
       <C>                <C>           <C>

       Land               $  157,241      157,241
       Building              484,508      468,292
       Furniture             205,102      195,162
       Equipment             500,048      451,169
                         -----------  -----------

                           1,346,899    1,271,864
       Less accumulated
         depreciation        681,396      566,438
                         -----------  -----------

                          $  665,503      705,426
                         ===========  ===========

</TABLE>

(4)        Income Taxes 2003

     Income  taxes  (benefit)  amounted to $45,097,  $(41,206)  and $236,968 for
2003,  2002  and  2001,  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:

<TABLE>
                              2003         2002        2001
                         -----------  -----------  -----------
<C>                       <C>            <C>           <C>
Computed "expected"
   income tax (benefit)   $   41,052    (42,148)      196,525
State tax (benefit)
   (net of federal
   income tax benefit)         3,529     (5,493)       31,853
Other items, net                 516       6,435        8,590
                         -----------  -----------  -----------

                          $   45,097    (41,206)      236,968
                         ===========  ===========  ===========

Effective income tax rate      37.4%        33.2%        41.0%
                         ===========  ===========  ===========

</TABLE>

<PAGE> 37


                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2003, 2002 and 2001


        Components of income taxes consist of:
<TABLE>
                             Current     Deferred        Total
                         -----------  -----------  -----------
<C>                      <C>          <C>          <C>
2003:
    Federal                $  37,116         2,634       39,750
    State                      4,734           613        5,347
                         -----------   -----------  -----------
                           $  41,850         3,247       45,097
                         ===========   ===========  ===========

2002:
    Federal                $(22,229)      (10,656)     (32,885)
    State                    (5,608)       (2,713)      (8,321)
                         -----------   -----------  -----------
                           $(27,837)      (13,369)     (41,206)
                         ===========   ===========  ===========

2001:
    Federal                $ 184,769         3,937      188,706
    State                     47,255         1,007       48,262
                         -----------   -----------  -----------

                           $ 232,024         4,944      236,968
                         ===========   ===========  ===========

</TABLE>

The tax effects of temporary  differences that give rise to significant portions
of the  deferred  tax  assets  and  liabilities  at March 31,  2003 and 2002 are
presented below:

                                                       2003         2002
                                                   -----------  -----------

Deferred tax asset-intangibles and property
  and equipment, principally due to differences
  in  amortization and depreciation                $         -  $     1,229
                                                   ===========  ===========


Deferred tax liability-intangibles and property
  and equipment, principally due to differences
  in  amortization and depreciation                $     2,018            -
                                                   ===========  ===========





(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> 38


                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2003, 2002 and 2001


     Pursuant to the Directors  Plan,  each  non-employee  director  received an
option to purchase 5,000 shares on October 1, 1996 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, 2003,  there were 149,181 shares available for grant under the ISOP
Plan and 19,500 shares  available for grant under the  Directors  Plan.  The per
share weighted average fair value of stock options granted during 2003, 2002 and
2001 was $0.73,  $.94 and $1.13,  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 six years for 2003, 2002 and 2001.


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

<PAGE> 39

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2003, 2002 and 2001

<TABLE>
<CAPTION>
                          Year ended        Year ended         Year ended
                          March 31, 2003    March 31, 2002     March 31, 2001
                          ---------------   ----------------   -----------------
                                   Weighted           Weighted          Weighted
                           Number  average   Number   average   Number  average
                           of      exercise  of       exercise  of      exercise
                           shares  price     shares   price     shares  price
                         --------  ------   --------  ------   -------  --------
<C>                      <C>       <C>      <C>       <C>      <C>      <C>
Balance at the beginning
   of the year            106,351  $ 2.72    114,699  $ 2.70   132,231    $ 2.71
Granted                     3,000    3.50      4,500    3.50     4,500      3.50
Forfeited                (48,626)    2.61      (348)    2.50  (14,032)      2.94
Exercised                (30,000)    2.50   (12,500)    2.83   (8,000)      2.97
                        ---------  ------   --------  ------  --------  --------
Balance at the end
   of the year             30,725  $ 3.17    106,351  $ 2.72   114,699    $ 2.70
                        =========  ======   ========  ======  ========  ========

Exercisable at the end
   of the year             30,725  $ 3.17    106,351  $ 2.72   114,699    $ 2.70
                        =========  ======   ========  ======  ========  ========

</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
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  or are
receivable on demand.

     (c) Accounts Payable

     Fair value is considered to be equal to the carrying  value of the accounts
payable due to the short-term nature of these instruments.

     (d) 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, 2003 and 2002, the
amounts that will  actually be realized or paid at settlement or maturity of the
instruments could be significantly different.


<PAGE> 40

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2003, 2002 and 2001


(7) Net Earnings (Loss) Per Share

     A summary of the Company's basic and diluted  earnings (loss) per share is
as follows:

<TABLE>
                                                 Years ended March 31
                                        -------------------------------------
                                             2003         2002         2001
                                        -----------  -----------  -----------
    <C>                                 <C>          <C>          <C>
    Net earnings (loss)                   $  75,644     (82,759)      341,048
                                        ===========  ===========  ===========
    Basic EPS - weighted average shares
     outstanding                            743,239      730,865      723,040
                                        ===========  ===========  ===========
    Basic earnings (loss) per share      $      .10        (.11)          .47
                                        ===========  ===========  ===========
    Basic EPS - weighted average shares
      outstanding                           743,239      730,865      723,040
    Effect of dilutive securities -
      stock options                          14,083            -       25,343
                                        -----------  -----------  -----------
    Dilutive EPS - weighted average
       shares outstanding          (1)      757,322      730,865      748,383
                                        ===========  ===========  ===========
    Diluted earnings per share     (1)   $      .10        (.11)          .46
                                        ===========  ===========  ===========
    Stock options not included in
      Diluted EPS since anti-dilutive             -       23,872            -
                                        ===========  ===========  ===========

<FN>

     (1) Stock options are not included in diluted EPS where there is a net loss
since they are anti-dilutive.
</FN>
</TABLE>

(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,  2003,
2002 and 2001,  respectively.  The Company has two  distinct  business  segments
consisting of Corporate Trust services and Wealth Management Group 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.

<PAGE>41

<TABLE>
<CAPTION>
                               Corporate    Wealth      Corporate
                               Trust        Management  Other       Total
                               -----------  ----------  -----------  -----------
<C>                            <C>          <C>          <C>          <C>


March 31, 2003:
Service fee revenue             $2,427,618   1,661,996         --      4,089,614
Interest revenue                    --           --          72,272       72,272
                               -----------  ----------  -----------  -----------
                                $2,427,618   1,661,996       72,272    4,161,886

Operating expenses:
  General and administrative    $1,631,581   1,199,721    1,094,885    3,926,187
  Depreciation and amortization     25,167      15,454       74,337      114,958
                               -----------  ----------  -----------  -----------

                                $1,656,748   1,215,175    1,169,222    4,041,145
                               -----------  ----------  -----------  -----------

Earnings (loss) before taxes    $  770,870     446,821   (1,096,950)     120,741
                               ===========  ==========  ===========  ===========
Identifiable assets             $  875,017     393,994    1,816,778    3,085,789
                               ===========  ==========  ===========  ===========
Capital expenditures            $    2,651      23,443       48,941       75,035
                               ===========  ==========  ===========  ===========


March 31, 2002:
Service fee revenue             $2,536,971   1,242,544         --      3,779,515
Interest & other revenue            --            --         85,986       85,986
                               -----------  ----------  -----------  -----------
                                $2,536,971   1,242,544       85,986    3,865,501

Operating expenses:
  General and administrative    $1,704,342   1,051,698    1,082,790    3,838,830
  Depreciation and amortization     46,347      11,949       92,340      150,636
                               -----------  ----------  -----------  -----------

                                $1,750,689   1,063,647    1,175,130    3,989,466
                               -----------  ----------  -----------  -----------

Earnings (loss) before taxes    $  786,282     178,897  (1,089,144)    (123,965)
                               ===========  ==========  ===========  ===========
Identifiable assets             $  787,326     237,702    1,862,746    2,887,774
                               ===========  ==========  ===========  ===========
Capital expenditures            $    2,423       9,488       35,933       47,844
                               ===========  ==========  ===========  ===========



March 31, 2001:
Service fee revenue             $2,988,632   1,147,377         --      4,136,009
Interest & other revenue            -            --         88,446        88,446
                               -----------  ----------  -----------  -----------

                                $2,988,632   1,147,377      88,446     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     $1,489,170     277,467   (1,188,621)     578,016
                               ===========  ==========  ===========  ===========
Identifiable assets             $  783,583     154,103    2,113,392    3,051,078
                               ===========  ==========  ===========  ===========
Capital expenditures            $   21,337      15,811       56,976       94,124
                               ===========  ==========  ===========  ===========


</TABLE>

<PAGE> 42

                             COLONIAL TRUST COMPANY
                          Notes to Financial Statements
                          March 31, 2003, 2002 and 2001


(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,  2003.  To
satisfy this requirement,  Colonial owns certificates of deposit held with banks
totaling  $506,377 at March 31, 2003.  These assets are classified as restricted
cash in the accompanying balance sheets.

     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,  with the possible  exception of the event mentioned  below,
the  effect  of such  matters  will not have a  material  adverse  effect on the
Company.

     Dorothy  Castenada,  as  Personal  Representative  of the Estate of Dorothy
Long, vs. Colonial Trust Company (PB 2002-000207).

     The  Company  is  a  defendant   in  a  lawsuit   filed  by  the   personal
representative  of the Dorothy Long Trust (the  "Trust"),  a trust for which the
Company  served as trustee.  The  personal  representative  has alleged that the
Company  breached  its  duties as  trustee in  connection  with the  Trust.  The
personal representative seeks damages of $200,000, plus its costs and attorneys'
fees in the  litigation,  and has also  requested that the Company be removed as
trustee of the Trust.  The  Company  has filed a  counter-petition  against  the
personal  representative of the Trust and has also filed a third-party complaint
against counsel for the Trust.

     Some discovery has been conducted in the above litigation, but considerable
additional  discovery  remains  to be  completed.  In light of the status of the
above litigation, management is unable to determine the potential outcome of the
above litigation or the range of the potential loss, if any, to the Company.


<PAGE> 43

     10. Earnings Adjusted for Goodwill
    -----------------------------------

The following table sets forth reported net earnings (loss) and earnings (loss)
per share, as adjusted to exclude goodwill amortization expense:

                                                          Years Ended
                                                            March 31
<TABLE>
                                                  2003       2002       2001
                                                  ----       ----       ----
    <C>                                           <C>        <C>        <C>
    Net earnings (loss),
    as reported                                   $75,644    $(82,759)  $341,048

    Net earnings (loss),
    as adjusted                                   $75,644    $(70,578)  $353,218

    Basic earnings (loss)
    per share as reported                         $ 0.10     $ (0.11)   $   0.47

    Basic earnings (loss)
    per share as adjusted                         $ 0.10     $ (0.10)   $   0.49

    Diluted earnings  (loss)
    per share as reported                         $ 0.10     $ (0.11)    $  0.46

    Diluted earnings (loss)
    per share as adjusted                         $ 0.10     $ (0.10)     $ 0.47


</TABLE>

<PAGE> 44

Item 8.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 9.    Changes in and Disagreements with Accountants
            on Accounting and Financial Disclosure.

     None.



                          PART III



Item 10. 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, 2003:

        Name                Position                  Age

    Lynn R. Camp            Chairman of the Board     65
                            and Director

    Gerald G. Morgan        Director                  47

    Mike Borger             Director                  48

    Bill McMorries          Director                  76

    John K. Johnson         President and Chief       45
                            Executive Officer and
                            Director

    Cecil E. Glovier        Chief Operating Officer   51
                            Secretary

    Kurt J. Kiesling        Vice President            36

    Ian B. Currie           Controller/Treasurer      49

    Bruce L. Mitchell       Vice President            56

    Susan D. Carlisle       Vice President            43



     All directors hold office until the next annual meeting of stockholders and
the election and qualification of their successors.  Lynn R. Camp was a director
of Church Loans prior to becoming a director of the Company.  Bill  McMorries is
currently  chairman of the Board of  Directors  and Mike  Borger is  currently a
director of Church Loans.


<PAGE> 45


     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 May 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 consultant to Turnkey Computer.

     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.

     Michael W.  Borger  rejoined  the Board in May of 2003 to fill a vacancy on
the Board caused by the  resignation  of Randy Barton from the Board in December
2002.  Mr.  Borger  previously  served as a director of the Company from June of
1990 until  January of 2001.  Mr. Borger also  previously  served the Company as
President  from June 1990 to August 1991 and as Vice  President from August 1991
until  November  1995. Mr. Borger is President,  Chief  Executive  Officer and a
director of Turnkey Leasing Ltd. ("Turnkey  Leasing").  Mr. Borger has served in
these  capacities  for in excess of five  years.  Turnkey  Leasing,  located  in
Amarillo,  Texas, is an equipment leasing company. Mr. Borger was elected to the
Board of Trust Managers of Church Loans in April of 2002.

     B. R.  McMorries  is a  consulting  engineer  and became a director  of the
Company  in May of 2003  with  the  expansion  of the  Board  from  four to five
members.  Mr.  McMorries  is Chairman  of the Board of Trust  Managers of Church
Loans and he 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.
He has  served as a  director  since  November  of 1995.  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  11:Executive  Compensation - Employment  Agreements"  and Exhibits 10
(c)-(e) of the Company's  Annual Report on Form 10-KSB for March 31, 2001 filed,
June 29, 2001.

     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 11: Executive  Compensation  - Employment  Agreements"  and
Exhibits  10(f)-(h) of the Company's  Annual Report on Form 10-KSB for March 31,
2001 filed, June 29, 2001.



<PAGE> 46



     Bruce L.  Mitchell  has  served  as Vice  President  of the  Company  since
December  1999.  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  (and the
Company's  principal  financial and accounting officer) 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, 2003.



<PAGE> 47



Item 11.   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>
                                                                  Long-Term
                                      Annual Compensation         Compensation
                              --------------------------------    --------------
                                                                  Securities
                              Fiscal                              Underlying
Name & Principal Position     Year     Salary       Bonus         Option/SARS(#)
-------------------------     -------  -----------  ----------    --------------
<C>                           <C>      <C>          <C>        <C>     <C>
John K. Johnson               2003     $101,448     $ 6,792    (a)     (a) (d)
  CEO-President               2002     $98,223      $     0    (a)     (a) (d)
                              2001     $94,500      $31,396    (a)     (a) (d)

Cecil E. Glovier              2003     $97,230      $ 6,792    (b)     (b) (d)
  Chief Operating Officer     2002     $91,408      $     0    (b)     (b) (d)
                              2001     $85,000      $31,359    (b)     (b) (d)

Bruce L. Mitchell             2003     $86,315      $70,028    (c)      0
  Vice President              2002     $82,373      $64,010    (c)      0
                              2001     $76,249      $56,192    (c)      0


<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.  Mr.
Johnson  exercised  his  option to  purchase  30,000  shares of Common  Stock on
September 20, 2002. Bonus amount excludes $3,046,  $3,850 and $4,004 contributed
by the Company to the 401(k)  account for Mr. Johnson for the fiscal years ended
March 31, 2003, 2002 and 2001,  respectively.  The increase in salary amounts of
$3,723  and $3,225 for  fiscal  years  2002 and 2003, respectively,  were due to
increased health  insurance costs having to be paid by the officer.  These costs
were previously paid directly by the Company.

     (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. Mr.  Glovier's  option to purchase 25,000 shares of Common
Stock expired on September 30, 2002.  Bonus amount excludes  $2,917,  $3,496 and
$2,863  contributed by the Company to the 401(k) account for Mr. Glovier for the
fiscal years ended March 31,  2003,  2002 and 2001,  respectively.  Increases in
salary   amounts  of  $3,723  and  $3,225  for  fiscal   years  2002  and  2003,
respectively,  were due to increased health insurance costs having to be paid by
the officer.  These costs were  previously  paid  directly by the  Company.  The
remaining portion of the increases,  $2,685 and $2,597 for fiscal years 2002 and
2003 respectively, were due to performance reviews.


<PAGE> 48

(c) Bonus amount excludes $5,545,  $4,031 and $2,413  contributed by the Company
to the 401(k)  account  for Mr.  Mitchell  for the fiscal  years ended March 31,
2003, 2002 and 2001, respectively.

(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)
<TABLE>

                             Number of    Percent of
                             Securities   Total Options  Exercise
                             Underlying   Granted to     or Base
                             Options      Employees in   Price
 Name & Principal Position   Granted      Fiscal Year    ($/sh)      Date
--------------------------   -----------  -----------    ----------- -----------
<C>                          <C>          <C>            <C>         <C>
John K. Johnson              0            0              N/A         N/A
  CEO-President

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

Bruce L. Mitchell            0            0              N/A         N/A
  Vice President

</TABLE>

     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, 2003:


<PAGE> 49



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

<TABLE>
                                                   Securities      Unexercised
                         Shares                    Underlying      In-the-Money
                         Acquired                  Unexercised     Options at
                         on           Value        Options at      FY-end($)
Name & Principal         Exercise     Realized     FY-End ($)      Exercisable/
Position                 (#)          ($)          Exercisable/    Unexercisable
                                                   Unexercisable
------------------       ---------    ----------   -------------   -------------
<C>                      <C>          <C>          <C>             <C>

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

Cecil E. Glovier                 0            $0               0              $0
Chief Operating Officer

Bruce L. Mitchell                0            $0               0              $0
Vice President

</TABLE>

           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  original  agreement had a three-year  term that 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.  The  agreement  was amended as of August 1, 1999 to
increase the base salary to $94,500 per year;  was  extended  for an  additional
one-year  term on July 1,  2002;  and  will  automatically  be  extended  for an
additional  one-year term commencing July 1, 2003,  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, 2003,  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 $6,792, $31,396 and $37,687, or $8,849, $10,464 and
$12,562 less than what would have been paid under the original  bonus  agreement
for fiscal  years ended March 31,  2003,  2001 and 2000,  respectively.  For the
fiscal year ended March 31, 2002,  due to the  Company's  net loss, no bonus was
earned by Mr.  Johnson.  Such bonus, if any, is payable 100 days from the end of
the Company's fiscal year.

     The original  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.  Mr.
Johnson  exercised  his option to purchase the 30,000  shares of Common Stock on
September 30, 2002. The agreement also contains  confidentiality and non-compete
covenants.


<PAGE> 50


     Mr.  Glovier's  original  agreement had a three-year  term that 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 original  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  was  extended  for an  additional one-year  term on April 1, 2003.

     Under the terms of the April 1, 2000 agreement,  Mr. Glovier is 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 will be excluded for purposes of
calculating the Company's  issued and outstanding  Common Stock in the foregoing
formula.  Such bonus,  if any, is payable  ninety  (90)days  from the end of the
Company's  fiscal year.  For the fiscal year ended March 31, 2003 and 2001,  Mr.
Glovier received  bonuses of $6,792 and $31,359 under his employment  agreement.
For the fiscal year ended March 31, 2002, due to the Company's net loss no bonus
was earned by Mr. Glovier.

     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's option
to purchase  25,000 shares of Common Stock  expired on September  30, 2002.  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> 51



           Directors' Compensation

     The Company's  non-employee  directors were paid $14,400 in cash as a group
during the fiscal  year ended March 31, 2003 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,
2003 was $3.50 per share. Directors who are also officers of the Company are not
compensated for their services as directors.


Item 12.   Security Ownership of Certain Beneficial Owners and Management.

     The following table sets forth  information as of June 4, 2003,  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:


<TABLE>

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

       Lynn R. Camp                 (2)  22,102 shares                2.9%
       7736 Baughman
       Amarillo, Texas 79121

       Gerald G. Morgan, Jr.        (2)  13,690 shares                1.8%
       4705 Olsen
       Amarillo, Texas 79106

       Mike Borger                       24,697 shares                3.3%
       P. O. Box 51200
       Amarillo, Texas 79159

       Bill McMorries                    30,931 shares                4.1%
       2907 Harmony
       Amarillo, Texas 79106

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

       William and Sue Johnson      (3)  45,586 shares                6.0%
       14001 Interstate 27
       Amarillo, Texas 79119

       Cecil E. Glovier                   3,140 shares                (4)
       16925 Roadrunner Road
       Mayer, Arizona 86333

       Bruce L. Mitchell                  1,000 shares                (4)
       1974 E. McNair Dr
       Tempe, AZ 85283-4922

       Susan D. Carlisle            (5)   8,901 shares                1.2%
       8026 E. Redwing Rd.
       Scottsdale, AZ 85250-5649

       Kurt J. Kiesling             (5)   5,401 shares                (4)
       13514 W. Post Dr.
       Surprise, AZ 85374-0000


       Directors and Executive
       Officers as a Group
             (9 persons)               150,838 shares                19.1%

</TABLE>
<PAGE> 52


     (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, 2003 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
757,884 shares of Common Stock issued and outstanding.

     (2) The totals for Messrs.  Camp and Morgan  include 9,000 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,  3,000 shares at $3.50, and 1,500
shares at $3.50


     (3) Includes  35,032 shares owned by Amberwood  Management Co. 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.


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

     (5) The totals for Ms. Carlisle and Mr.  Kiesling  included 7,500 and 5,000
shares of Common Stock respectively,  subject to immediately exercisable options
held by each, with an exercise price of $3.00 per share.

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



Item 13.   Certain Relationships and Related Transactions.

     During the fiscal  years  ended  March 31,  2003 and 2002,  the law firm of
Burdett, Morgan & Thomas, of which Gerald G. Morgan, Jr., is a partner, received
approximately $67,000 and $60,000,  respectively, for legal services provided to
the Company. Mr. Morgan is a director of the Company.




Item 14.   Exhibits and Reports on Form 8-K.

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

       (2)    Exhibits
            99.1        Certification pursuant to 18 U. S. C. Section 1350
            99.2        Certification pursuant to 18 U. S. C. Section 1350



    (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 30, 2003

     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 30, 2003
Lynn R. Camp


* Gerald G. Morgan              Director                   June 30, 2003
Gerald G. Morgan


* Mike Borger                   Director                   June 30, 2003
Mike Borger


* Bill McMorrie                 Director                   June 30, 2003
Bill McMorrie


* John K. Johnson               President and Director     June 30, 2003
John K. Johnson                 (Principal Executive
                                Officer)


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



<PAGE> 54


CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John K. Johnson, certify that:

1.   I have  reviewed  this  annual  report on Form 10-KSB of Colonial  Trust
     Company;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial condition,  results of operations, and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  annual
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the effective-
          ness of the disclosure controls and procedures based on our evaluation
          as of the Evaluation Date.

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,  summarize,  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls.

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  June 30, 2003
                                           /s/ John K. Johnson
                                           --------------------
                                           John K. Johnson
                                           President and Chief Executive Officer


<PAGE> 55


       CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ian B. Currie, certify that:

1.   I have  reviewed  this  annual  report on Form 10-KSB of Colonial  Trust
     Company;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial condition,  results of operations, and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly   during  the  period  in  which  this  annual
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this  annual report  our conclusions about the effective-
          ness of the disclosure controls and procedures based on our evaluation
          as of the Evaluation Date.

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,  summarize,  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls.

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  June 30, 2003


                                                        /s/ Ian B. Currie
                                                        -----------------
                                                        Ian B. Currie
                                                        Controller and Treasurer