<PAGE>


                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549

                                      FORM 10-K
     (MARK ONE)

        [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                     FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

                                          OR
         [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                  For the Transition period from           to

                            COMMISSION FILE NO.  000-19368

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

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

                                   520 MAIN AVENUE
                                FARGO, ND   58124-0001 
              -----------------------------------------------------
              (Address of principal executive offices and zip code)     

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  (701) 298-5600

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  NONE

SECURITIES REGISTERED PURSUANT TO 
SECTION 12(g) OF THE ACT:                   COMMON STOCK, $.01 PAR VALUE 
                                            PREFERRED STOCK PURCHASE RIGHTS 
                                            8-7/8% CUMULATIVE CAPITAL 
                                            SECURITIES, $25 LIQUIDATION 
                                            AMOUNT(1)
                                            8.20% CUMULATIVE CAPITAL 
                                            SECURITIES, $25 LIQUIDATION 
                                            AMOUNT(2)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  YES   X    NO          
                                        -----     -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K.  /X/

As of March 19, 1999, assuming as market value the price of $19.2815 per 
share, the average between the high and low sale prices on the Nasdaq 
National Market, the aggregate market value of shares held by nonaffiliates 
was approximately $828 million.

As of March 19, 1999, the Company had outstanding 47,177,803 shares of Common 
Stock, $.01 par value, net of treasury shares.

<PAGE>

                         DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 1998 Annual Report to Shareholders and the 1999 Proxy Statement
for the Company's Annual Meeting of Shareholders to be held April 27, 1999, 
are incorporated by reference into Parts II and III, respectively, of this 
Form 10-K, to the extent described in such Parts.

(1)  The 8-7/8% Cumulative Capital Securities (the "CFB I Capital Securities")
     were issued by CFB Capital I ("CFB Capital I"), a wholly owned Delaware
     business trust subsidiary of the Company.  The Company has also fully and
     unconditionally guaranteed all of CFB Capital I's obligations under the CFB
     I Capital Securities.

(2)  The 8.20% Cumulative Capital Securities (the "CFB II Capital Securities")
     were issued by CFB Capital II ("CFB Capital II"), a wholly owned Delaware
     business trust subsidiary of the Company.  The Company has also fully and
     unconditionally guaranteed all of CFB Capital II's obligations under the
     CFB II Capital Securities.

<PAGE>

                                  TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             PAGE NO.
<S>                                                                          <C>
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4
      Item 1.  BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4
      Item 2.  PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
      Item 3.  LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . 17
      Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . 17

PART II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
      Item 5.   MARKET FOR REGISTRANT'S COMMON
                 EQUITY AND RELATED STOCKHOLDER MATTERS. . . . . . . . . . . . . 17
      Item 6.   SELECTED FINANCIAL DATA. . . . . . . . . . . . . . . . . . . . . 17
      Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . 18
      Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
                 ABOUT MARKET RISK . . . . . . . . . . . . . . . . . . . . . . . 18
      Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. . . . . . . . . . . 18
      Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                 ON ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . . . . . . . 18

PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
      Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE
                 REGISTRANT. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
      Item 11.  EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . 18
      Item 12.  SECURITY OWNERSHIP OF CERTAIN
                 BENEFICIAL OWNERS AND MANAGEMENT. . . . . . . . . . . . . . . . 19
      Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . 19

PART IV  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
      Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
                 AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . 19

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>

                                       3
<PAGE>

                                    PART I

ITEM 1.  BUSINESS

GENERAL

     Community First Bankshares, Inc. (the "Company"), is a multi-bank holding
company that as of December 31, 1998 operated banks and bank branches (the
"Banks") in 154 communities in Arizona, Colorado, Iowa, Minnesota, Nebraska, New
Mexico, North Dakota, South Dakota, Utah, Wisconsin and Wyoming.  Total assets
of the Company were approximately $6.0 billion  as of December 31, 1998. The
Company acquired banks and bank branches in 50 communities in 1998.  See 
"Recent Significant Acquisitions."

     The Banks are community banks that provide a full range of commercial and
consumer banking services primarily to individuals and businesses in small and
medium-sized communities and the surrounding market areas.  The Company
encourages local autonomy by local Bank presidents, while providing to the Banks
the benefits of holding company affiliation.

NATIONAL COMMUNITY BANKING STRATEGY

     The Company's primary strategy is to operate and continue to acquire 
banks and bank branches in communities which generally have populations 
between 3,000 and 50,000 and are located in the Company's key target 
acquisition states of Arizona, Colorado, Iowa, Kansas, Minnesota, Montana, 
Nebraska, New Mexico, North Dakota, South Dakota, Utah, Wisconsin and 
Wyoming, and additionally in the adjacent states of California, Idaho, 
Illinois, Missouri, Nevada, Oklahoma and Texas.  In addition, the Company has 
decided to adopt a national community banking strategy, expanding its search 
for bank acquisitions in similar communities in other states throughout the 
United States.  Such communities are believed to provide the Company with the 
opportunity for a stable, relatively low-cost deposit base. The individual 
banks and bank branches sought to be acquired in the past by the Company 
generally had approximately $20 million to $150 million in assets.  In 
pursuing its national community banking strategy, the Company intends to 
concentrate on a broader band of acquisition opportunities, focusing on banks 
and banking groups with $200 million to $500 million in assets.

     The Company provides the Banks with the advantages of affiliation with a
multi-bank holding company, such as access to its lines of financial services
including trust products and administration, insurance and investment services,
data processing services, credit policy formulation and review, investment
management and specialized staff support.  The Company grants substantial
autonomy to managers of the Banks with respect to day-to-day operations,
customer service decisions and marketing.  The Banks are encouraged to
participate in community activities, support local charities and community
development, and otherwise enhance their images in their communities.  The
Company maintains a subsidiary bank phantom stock program, pursuant to which
presidents of the subsidiary Banks participate in the equity appreciation of
their respective local Banks.  The Company believes this program is important to
provide these individuals with a direct incentive to improve the performance of
their Banks.

                                       4
<PAGE>

THE BANKS

     The Banks provide a full range of commercial and consumer banking services
primarily to individuals and businesses in small and medium-sized communities
and the surrounding market areas.  The Banks draw most of their deposits from
and make most of their loans within their respective market areas.  The Banks
owned by the Company as of December 31, 1998, were located in Arizona, Colorado,
Iowa, Minnesota, Nebraska, New Mexico, North Dakota, South Dakota, Utah,
Wisconsin and Wyoming.

COMMUNITIES SERVED

     The Banks, as of December 31, 1998, were located in communities with
populations ranging from approximately 200 to 50,000, except for the larger
communities of Fargo, North Dakota; Denver and Englewood (a Denver suburb),
Colorado; Phoenix, Arizona; and Salt Lake City, Utah.  Each of the Banks seeks
to serve a market area with greater population because, in many cases, there are
few or no other financial institutions within a reasonable distance from the
community in which the Bank is located.  The economies of the Banks' smaller
communities, especially those in Nebraska, North Dakota and South Dakota, depend
primarily on farming, farm service and agricultural supply businesses. 
Agriculture in these communities is affected by many factors beyond the control
of the Banks, including weather, governmental policies, fluctuating commodity
prices, demand and production and natural disasters. As with other small,
nonmetropolitan communities, many of the communities in which the Banks
presently operate have experienced and are expected to experience no growth or a
decline in population.  The Company has operated profitably in these communities
and has continued to acquire institutions in larger markets.  However, if 
reductions in population or adverse economic trends in specific communities
result in decreased profitability in the Banks or offices located in those
communities, the Company may consider selling such Banks or offices or reducing
the level of services provided in such communities.

ACQUISITION STRATEGY

     The Company intends to continue its growth by making acquisitions of
community banks and other financial institutions in selected communities
nationwide.  The Company believes it is well-positioned to acquire and
profitably operate community banks because of its experience in operating
community banks, its ability to provide centralized management to those banks
and its access to capital.  The Company believes many owners of community banks
are seeking to sell their banks for a variety of reasons, including lack of
shareholder liquidity, management succession problems, the difficulty of
compliance with current multiple-layered bank regulations and increasing
competition from non-bank organizations.  The Company believes there are over
5,000 community banks that are possible acquisition candidates in its
twenty-state primary acquisition area described above and many other possible
candidates in similar communities nationwide.

     The Company competes with individuals and institutions, including major
regional bank holding companies, for suitable acquisition candidates. 
Acquisition competitors of the Company range from regional bank holding
companies to individual bank owners who own or control banks in the Acquisition
Area.  The process of industry consolidation has accelerated as a result of the
adoption of the Interstate Banking and Branching Efficiency Act of 1994
("IBBEA").  The IBBEA largely eliminated restrictions on interstate banking and
since June 1, 1997, has permitted interstate branching, subject to special
"opt-in" and "opt-out" provisions which states were able to enact by law.   Most
states have adopted implementing legislation.  Certain aspects of the IBBEA were
clarified and amended in 1997 with the passage of the Riegle-Neal 

                                       5
<PAGE>

Clarification Act.  The Economics and Growth Regulatory Paperwork Reduction 
Act of 1996 ("EGRPRA") streamlined application processes and eased 
regulations in several areas facilitating acquisitions and expansion of 
nonbanking activities.  The effect of this legislation has both facilitated 
the Company's acquisitions and increased the number of potential acquirers of 
banks. 

     The Company has established a due diligence review process to evaluate 
acquisition targets and has established acquisition parameters for target 
acquisitions relating to market factors, financial performance and certain 
nonfinancial factors.  Market factors considered by the Company include the 
size and long-term viability of the community and market area served by the 
target bank, the dominance of the acquisition target (which should be the 
largest or second largest financial institution in the market) and the 
proximity of other existing Banks owned by the Company.  In exploring markets 
in regions not currently served by the Company, management looks for 
similarities between the new market areas and the Company's existing market 
areas in terms of culture and economic bases.  Financial analyses performed 
by the Company in evaluating acquisition prospects include review of 
historical performance, comparison to peers and the Company's Banks in terms 
of key operating performance ratios (including earnings, staffing and loan 
quality) and target ratios.  The Company determines the price it is willing 
to pay for an institution based on, among other factors, cash flow and return 
on equity valuation models and an analysis of accretion/dilution on a 
marginal and a pro forma basis.  Nonfinancial considerations in evaluating an 
acquisition prospect include the quality of the management team's skill and 
the demand on management resources to integrate the target institution.  
Finally, each target acquisition must undergo an extensive review of loan 
asset quality, operating procedures and deposit structure before the Company 
commits to a purchase.  The Company's level of future acquisitions will 
depend, in part, on its ability to attract and retain management level 
employees capable of performing efficient review of credit quality standards 
of proposed acquisition candidates.  Acquisition opportunities presented to 
the Company that have not met the requirements described above have not been 
pursued.

     Because of limited growth opportunities in many of the existing markets 
served by the Company, management believes future growth in the business of 
the Company will largely depend on successful execution of the Company's 
strategies. In addition to Company-wide efforts to increase non-interest 
income through sales of investment products, trust services and insurance, 
the future growth of the Company will depend upon consummation of 
acquisitions consistent with the Company's acquisition strategy, and the 
future growth of recent and expected acquisitions in higher growth markets.  
Successful completion of acquisitions by the Company depends upon such 
factors as the availability of suitable acquisition candidates, necessary 
regulatory approvals and necessary approvals of holders of the Company's and 
other providers of credit, compliance with applicable capital requirements 
and, in the case of expansion into new states, the availability of additional 
management resources required to operate banks in widely dispersed 
geographical areas.

REVIEW OF ACQUISITION OPPORTUNITIES

     The Company routinely solicits and reviews acquisition opportunities and,
at any given time, may have bids outstanding or may be involved in negotiations
with the owners of financial institutions or other parties relative to a
particular financial institution, its branches or its deposit accounts.  The
Company currently has no agreements in place to acquire other banks but is in
the process of reviewing several opportunities.

                                       6
<PAGE>

RECENT SIGNIFICANT ACQUISITIONS

     On August 7, 1998, the Company acquired Guardian Bancorp ("Guardian"), 
the bank holding company for Guardian State Bank, headquartered in Salt Lake 
City, Utah, with banking offices in Salt Lake City and Sandy, Utah.  At 
closing, Guardian had total assets of approximately $99 million, total 
deposits of approximately $89 million, and total stockholders equity of 
approximately $8.5 million.  Upon completion of the merger, which was 
accounted for as a pooling of interests, the Company issued approximately 
1,526,000 shares of common stock to the former holders of Guardian common 
stock.  The value of the Company's common stock issued in the merger was 
approximately $38 million, based upon the trading value of the Company's 
common stock determined pursuant to the merger agreement.

     On July 1, 1998, the Company acquired Western Bancshares of Las Cruces, 
Inc. ("Western"), the bank holding company for Western Bank, headquartered in 
Las Cruces, New Mexico with offices in Anthony, Hatch and Las Cruces, New 
Mexico.  At closing, Western had total assets of approximately $159 million, 
total deposits of approximately $136 million, and total stockholders equity 
of approximately $16 million.  Upon completion of the merger, which was 
accounted for as a pooling of interests, the Company issued approximately 
1,932,000 shares of common stock to the former holders of Western common 
stock.  The value of the Company's common stock issued in the merger was 
approximately $48 million, based upon the trading value of the Company's 
common stock determined pursuant to the merger agreement.

     On May 7, 1998, the Company acquired FNB, Inc. ("FNB"), a two-bank 
holding company headquartered in Greeley, Colorado with offices in Greeley 
and Fort Collins, Colorado.  At closing, FNB had total assets of 
approximately $120 million, total deposits of approximately $109 million, and 
total stockholders equity of approximately $10 million.  Upon completion of 
the merger, which was accounted for as a pooling of interests, the Company  
issued approximately 1,135,000 shares of common stock to the former holders 
of FNB common stock.  The value of the Company's common stock issued in the 
merger was approximately $29 million, based upon the trading value of the 
Company's common stock determined pursuant to the merger agreement.

     On April 30, 1998, the Company acquired Pioneer Bank of Longmont 
("Pioneer"), Longmont, Colorado, with five banking offices in four Colorado 
communities.  At closing, Pioneer had total assets of approximately $138 
million, total deposits of approximately $128 million, and total stockholders 
equity of approximately $8.9 million.  Upon completion of the merger, which 
was accounted for as a pooling of interests, the Company issued 
approximately 1,432,000 shares of its common stock to the former holders of 
Pioneer common stock.  The value of the Company's common stock issued in the 
merger was approximately $36 million, based upon the trading value of the 
Company's common stock determined pursuant to the merger agreement.

     On April 3, 1998, the Company acquired Community Bancorp, Inc.  ("CBI"), 
the parent company of Community First National Bank, Thornton, Colorado, with 
offices in Thornton and Arvada, Colorado.  At closing, CBI had total assets 
of approximately $78 million, total deposits of approximately $72 million, 
and total stockholders equity of approximately $5.7 million.  Upon completion 
of the merger, which was accounted for as a pooling of interests, the Company 
 issued approximately 853,000 shares of common stock to the former holders of 
CBI common stock.  The value of the Company's common stock issued in the 
merger was approximately $22 million, based upon the trading value of the 
Company's common stock determined pursuant to the merger agreement.

                                       7
<PAGE>

     On January 23, 1998, the Company acquired 37 banking offices located in 
Arizona, Colorado and Utah (the "Bank One Branches") from three subsidiary 
banks of Banc One Corporation (the "Bank One Banks").  At closing, the Bank 
One Branches had total deposits of approximately $730 million and loans of 
approximately $61 million.  The Company paid a purchase price premium of 
approximately $44 million, equal to 6% of the deposits of the Bank One 
Branches at closing. The acquisition was accounted for as an acquisition of 
assets and assumption of liabilities and resulted in the recognition by the 
Company of deposit-based intangibles in an amount equal to the purchase price 
premium of approximately $44 million.  Following the closing, the 25 
Arizona offices and four Utah offices acquired from the Bank One Banks were 
merged into the Republic bank in Phoenix, Arizona that was recently acquired 
by the Company. The eight acquired Colorado offices were merged into the 
Company's existing Colorado affiliate bank.

     On December 1, 1997, the Company acquired First National Summit 
Bankshares, Inc., Gunnison, Colorado ("Summit"), a bank holding company that 
owned and operated a national bank with banking facilities in five Colorado 
communities. At closing, Summit had total assets of approximately $90 million,
total deposits of approximately $82 million and total stockholders' equity of 
approximately $7 million.  Upon completion of the merger, which was accounted 
for as a pooling of interests, the Company issued approximately 630,000 
shares of common stock to the former holders of Summit common stock 
and paid approximately $1 million in cash to holders of Summit preferred 
stock cancelled in the merger.  The value of the Company's common stock 
issued in the merger was approximately $15 million, based upon the trading 
value of the Company's common stock determined pursuant to the merger 
agreement.  
          
     On November 24, 1997, the Company acquired Republic National Bancorp, 
Inc., Phoenix, Arizona ("Republic"), a bank holding company that owned and 
operated a national bank  in Phoenix, Arizona.  At closing, Republic had 
total assets of approximately $54 million, total deposits of approximately 
$49 million and total stockholders' equity of approximately $4 million.  Upon 
completion of the merger, which was accounted for as a pooling of interests, 
the Company issued approximately 737,000 shares of common stock to the former 
holders of Republic common stock.  The value of the Company's common stock 
issued in the merger was approximately $17.4 million, based upon the trading 
value of the Company's common stock determined pursuant to the merger 
agreement. 

     On July 14, 1997, the Company purchased KeyBank National Association, 
Cheyenne, Wyoming ("KeyBank Wyoming"), from KeyCorp, its parent corporation, 
("KeyCorp"), for a purchase price of $135 million.  KeyBank Wyoming has been 
renamed "Community First National Bank."  At closing, KeyBank Wyoming had 
total assets of approximately $1.1 billion and 28 banking offices located in 
24 communities in Wyoming, including Cheyenne, Laramie, Casper, Sheridan and 
Jackson.  The Company believes its Wyoming banking network is the largest in 
Wyoming, providing a full range of commercial and consumer banking services 
throughout the state.  The transaction was accounted for as a business 
combination using the purchase method of accounting and resulted in the 
recognition of goodwill by the Company of approximately $60 million.

RECENT DIVESTITURES

     In July, 1998, the Company sold the operating assets of its two 
sub-prime lending subsidiaries.  In a cash transaction on July 27, 1998, the 
Company sold seven loan production offices of Equity Lending, Inc. ("ELI") to 
FIRSTPLUS Financial Group, Inc.  On July 31, 1998, the Company also sold 
servicing rights to the portfolio of automobile installment contracts 
originated by Mountain Parks Financial Services, Inc. ("MPFS") to Cygnet 
Financial Services, Inc.  The Company retained approximately $50 million in 
loans 

                                       8
<PAGE>

originated by ELI and servicing rights on an additional $100 million in ELI 
loans sold to other parties.  The Company also retained approximately $50 
million in auto installment contracts originated by MPFS.  ELI and MPFS were 
acquired in December 1996 as a result of the Company's merger with Mountain 
Parks Financial Corporation.  At December 31, 1998, the Company had 
approximately $25 million in performing sub-prime mortgages and $40 million 
in automobile installment contracts. The Company expects to sell these assets 
in the first half of 1999, and the Company anticipates that after the sale, 
it will not pursue further sub-prime lending activities. See "Sale of 
Sub-Prime Lending Business" in the 1998 Annual Report to Shareholders 
incorporated by reference in this Form 10-K.

     On June 12, 1998, the Company, through its Colorado subsidiary, completed
the sale of its office in Ault, Colorado.  The Ault office was acquired on
January 23, 1998 as part of the Company's purchase and assumption of 37 offices
of Banc One Corporation located in Arizona, Colorado and Utah.  The transactions
included the disposition of approximately $9 million in deposits.

ADMINISTRATION OF BANKS

     The Company provides policy and management direction and specialized staff
support in general areas while relying on Bank managers for day-to-day
operations, customer service decisions and community relations.  The Company is
responsible for policy-related functions, such as supervisory credit review,
audits, personnel policies and internal examination activities.  Resource
allocations for administrative support by the Company are balanced to provide
adequate support services for the Banks' operations, while carefully controlling
service costs charged to the Banks.  The major areas of administration are as
follows:

     CREDIT.  The Company's lending activities are guided by the general loan
policy established by the Board of Directors.  The Senior Credit Committee of
the Company has established loan approval limits for each region of the Company
and each subsidiary Bank.  Amounts in excess of the individual Bank lending
authority are presented to the Regional Credit Officers.  Loans above $1,500,000
per nonclassified borrower and $250,000 per classified borrower are presented to
the Senior Credit Committee for approval.  The Company's credit policy
establishes guidelines for approval of all credits, including local loans and
purchased loans and loan participations.  The credits of the Banks are subject
to internal review by Bank officers every 12 months.  The loan portfolios of the
Banks are subject to examination by the Company's credit examination staff every
12 to 24 months, the frequency of which is based on a variety of factors,
including the credit quality of the institution.  The credit examination staff
is also responsible for credit review with respect to the assets of banks to be
acquired by the Company.

     FINANCE.  The Board of Directors of the Company has established policies in
the areas of asset/liability management, investments, capital expenditures,
accounting procedures and capital and dividend management.  Policies are
implemented and monitored for compliance by the Chief Financial Officer and the
Asset/Liability Committee of the Company.

     OPERATIONS.  Community First Service Corporation ("CFSC"), a subsidiary of
the Company, provides data processing and operations support services to the
Banks by contract.  CFSC's system is designed to provide for all Bank and
customer data processing needs at the lowest possible cost and can be expanded
to accommodate future growth and additional service applications.  The Company
believes CFSC has sufficient capacity to provide services to the banks the
Company has agreed to acquire.  In addition to its own office facilities in
Fargo, North Dakota, CFSC also has a data processing facility in Golden,
Colorado.  Additional expenditures for equipment, consistent with the increased
data processing volumes, would likely be necessary if additional significant
acquisitions occur during 1999.

                                       9
<PAGE>

     OTHER SERVICES.  The Company provides other services for the benefit of the
Banks, such as outside professional services,  central human resources services,
benefits administration, marketing guidance and centralized purchasing of
supplies.

INSURANCE AGENCIES

     The Company currently owns and operates insurance agencies located in 32
communities served by the Banks through its subsidiaries, Community Insurance,
Inc. ("CII"), and Community First Insurance Agencies, Inc. ("CFIA").  These
agencies are primarily engaged in the sale of property and casualty insurance
and make some sales of other types of insurance, such as life, accident and crop
hail insurance.  The Company had commission revenue of $7.2 million in 1998.

OTHER ACTIVITIES
     
     The Company has steadily consolidated Banks located in each state into
single legal charters with multiple locations.  As of December 31, 1998, the
Company had 11 separately chartered  subsidiary Banks and 6 nonbank
subsidiaries.  Subsidiary Banks of the Company in seven locations maintain trust
departments, but their services are more broadly available and the Company may
expand its trust activities in the future. Trust services are made available to
customers in several locations through local trust officers or by appointment
with members of the trust department.  In 1999 the Company plans to consolidate
all of its trust activity administration in the trust department in Fargo, North
Dakota.  

     Most of the Banks also sell annuities and other permitted securities 
through an arrangement with INVEST Financial Corporation, a Delaware 
Corporation, and INVEST Financial Corporation Insurance Agency, Inc. of 
Illinois (collectively, "INVEST").  In March 1998, the Company entered into a 
three year agreement with INVEST under which INVEST would provide securities 
brokerage, insurance and investment advisory services to customers through 
INVEST centers located within the Company's subsidiary bank branches.  The 
agreement also provides for INVEST to share sales commissions with the 
Company pursuant to an agreed upon commission schedule and requires INVEST to 
perform various compliance and administrative functions related to its 
activities. Federal bank regulation permits bank holding companies to engage 
in other limited activities, such as the distribution of certain types of 
securities, and future changes in such regulation are expected to further 
expand the types of activities in which the Company may engage.  Although the 
Company intends to maintain its focus on the banking business in its targeted 
market areas, the Company will consider other permitted business activities 
as opportunities arise.  The non-interest income activities of the Company in 
insurance, trust and securities sales are expected to become collectively a 
material revenue and profit center of the Company within the next few years.

COMPETITION

     Commercial banking is highly competitive.  In the conduct of certain
aspects of their business, the Banks compete with other commercial banks,
savings and loan institutions, issuers of fixed income investments, finance
corporations, credit unions and money market funds, among other types of
institutions.  The Banks compete with these institutions in such areas as
obtaining new deposits, offering new types of services and setting loan rates
and interest rates on various types of deposits, as well as other aspects of the
banking business.  Management believes community residents and businesses prefer
to deal with local banks and the Banks have generally been able to compete
successfully in their respective communities because of the Company's emphasis
on local ownership and the autonomy of Bank management in community relations. 
At the same time, the Company provides the Banks with the advantages of
centralized 

                                       10
<PAGE>

sophisticated administration and the opportunity to make larger loans and 
diversify their lending activity through Bank group participations. Further, 
because most of the Banks have a significant market share in the communities 
they serve, the Company believes the Banks can, to a degree, influence 
deposit and loan pricing in their markets and are subject to less competition 
based on deposit and loan pricing than would be the case in larger 
metropolitan markets with more competitors.  However, the Banks have 
experienced increased price competition from credit unions in certain market 
areas in recent periods.  Recent changes in government regulation of banking, 
particularly the legislation which removes restrictions on interstate banking 
and permits interstate branching, or legislation in certain states to permit 
statewide branching, may increase competition by both out-of-state and 
in-state banking organizations and by other financial institutions.  See 
"Supervision and Regulation," below.  The Banks compete with other financial 
institutions, including government lending agencies, for high quality loans 
and the Company competes with securities and insurance firms and other 
banking institutions in the non-interest income activities of insurance, 
securities sales and trust activities in the Banks' market areas and for 
purchases of loan assets and investment assets.  While management believes 
the Banks will continue to compete successfully in their communities, there 
is no assurance that future competition will not adversely affect the Banks' 
earnings.

EMPLOYEES

     The Company had 2,839 employees at December 31, 1998, including 2,219 
full-time employees and 620 part-time employees.  Of these individuals, 291 
were employed at the holding company level, 2,147 (including 1,652 full-time 
employees) were employed at the Bank level, 299 were employed by CFSC and 102
were employed by CII and CFIA.

SUPERVISION AND REGULATION

     GENERAL.  As a bank holding company, the Company is subject to supervision
and examination by the Board of Governors of the Federal Reserve System under
the Bank Holding Company Act of 1956, as amended (the "BHC Act").  The Company's
national bank subsidiaries are regulated by the Office of the Comptroller of the
Currency ("OCC") while its only state-chartered banking subsidiary is regulated
by the South Dakota Division of Banking.  The deposits of the Company's national
and state banking subsidiaries are insured by the Bank Insurance Fund ("BIF"),
which subjects such subsidiaries to regulation by the Federal Deposit Insurance
Corporation ("FDIC").  In addition to the impact of direct regulation,
commercial banks are affected significantly by action taken by the Federal
Reserve Board with respect to the money supply and credit availability.

     The Company has other financial services subsidiaries that are subject to
regulation by the Federal Reserve Board and other applicable federal and state
agencies.  For example, the Company's insurance subsidiary is subject to
regulation by the state insurance licensing and regulatory agencies having
jurisdiction in each office location.

     Congress continues to consider wide-ranging proposals for altering the
structure, regulation and competitive relationships of the nation's banking,
insurance and securities industries.  The extent to which the business of the
Company may be affected by these changes will depend upon when and in what form
any of these proposals will finally be adopted.

     HOLDING COMPANY REGULATION.  The Company is a bank holding company within
the meaning of the BHC Act.  As a result, the Company's activities are subject
to certain limitations under the BHC Act, and 

                                       11
<PAGE>

transactions between the Company and its affiliates are subject to certain 
restrictions.  Further, the Company is required to file periodic reports with 
the Federal Reserve Board and is subject to regular examination.  As a matter 
of policy, the Federal Reserve Board expects a bank holding company to act as 
a source of financial and managerial strength to each of its subsidiary banks 
and to commit capital and other resources to support each subsidiary bank.  
The Federal Reserve Board has the authority to issue cease and desist orders 
against the Company if the Federal Reserve Board determines that actions by 
the Company are unsafe, unsound or violate the law.  Under certain 
circumstances, stock redemptions and dividends or distributions by the 
Company with respect to its equity securities may be considered unsafe or 
unsound practices.

     Under the BHC Act, the Company must obtain prior Federal Reserve Board 
approval before the Company acquires direct or indirect ownership or control 
of 5% or more of the voting stock of any bank or bank holding company, or the 
Company merges or consolidates with another bank holding company.  Further, 
the bank holding company is generally prohibited from acquiring direct or 
indirect ownership or control of a company that is not a bank or bank holding 
company, unless the Federal Reserve Board has, by order or regulation, 
determined that the proposed non-banking activity is so closely related to 
banking or managing or controlling banks as to be a proper incident thereto.  
In reviewing any application or proposal by a bank holding company, the 
Federal Reserve Board is required to consider the financial and managerial 
resources and future prospects of the bank holding company and the banks 
concerned, the convenience and needs of the community to be served, as well 
as the probable effect of the transaction upon competition.

     BANK REGULATION.  The banks are subject to detailed federal and state 
laws and regulation.  National bank subsidiaries of the Company are primarily 
supervised by the OCC, a bureau of the United States Department of the 
Treasury. The OCC regularly examines national banks in such areas as 
reserves, loans, investments, trust services, management practices, 
compliance with the Community Reinvestment Act and other aspects of bank 
operations and policies.  These examinations are designed for the protection 
of the deposit insurance system and the enforcement of federal and state laws 
and regulations and not for the shareholders of the Company.  In addition to 
undergoing these regular examinations, national banks must furnish quarterly 
reports to the OCC containing detailed and accurate financial statements and 
schedules. 

     One bank subsidiary of the Company is chartered under South Dakota state 
law, and therefore regulated by the FDIC and the South Dakota Division of 
Banking.  Each of these agencies conducts regular examinations of the Bank, 
generally on an alternating basis, which are comparable in scope and purpose 
to the examinations of national banks by the OCC, discussed above.  

     Federal and state banking laws and regulations govern, among other 
things, the scope of a bank's business and investments a bank may make, 
reserves a bank must maintain, loans a bank may bank and the collateral it 
takes, activities of banks with respect to mergers and consolidations and the 
establishment and closure of branches.  The OCC, in the case of national 
banks, and the FDIC, in the case of state-chartered, nonmember banks, are the 
respective primary federal regulatory authorities under the Financial 
Institutions Supervisory Act, and are thereby provided authority under that 
Act to impose penalties, initiate civil and administrative actions and take 
other steps intended to prevent a bank from engaging in an unsafe or an 
unsound practice in the conduct of its business.

     With the adoption of the Financial Institutions Reform, Recovery and 
Enforcement Act of 1989, the Federal Deposit Insurance Corporation 
Improvement Act of 1991 ("FDICIA") and the Interstate Banking and Branching 
Efficiency Act of 1994 ("IBBEA"), Congress made comprehensive revisions to 
the bank regulatory and funding provisions of the Federal Deposit Insurance 
Act.  Under FDICIA and the IBBEA, the primary regulatory authorities are 
required to take "prompt corrective action" with respect to depository 
institutions insured by the FDIC that do not meet the criteria for 
classification as either "well capitalized" 

                                       12
<PAGE>

or "adequately capitalized," based upon the institution's leverage ratio, 
risk-adjusted Tier 1 capital ratio and risk-adjusted total capital ratio.  As 
of December 31, 1998, all of the Company's banking subsidiaries were 
classified as "well capitalized."  Under-capitalized depository institutions 
are subject to a wide range of limitations in operations and activities, 
including capital distributions, payment of management fees, and limitations 
upon institution growth.

     FDICIA, as amended by IBBEA, directs each primary federal regulatory 
agency to establish regulations or guidelines relating to operational and 
managerial standards.  The federal banking agencies have published final 
rules implementing the safety and soundness standards required by FDICIA in 
the areas of internal controls and information systems, internal audit 
systems, loan documentation, asset growth, asset quality, earnings and 
compensation, fees and benefits. The impact of such standards on the Company 
has not been material.

     FDIC INSURANCE.  The FDIC insures deposits of the Banks up to the 
prescribed limit per depositor through the BIF, and the amount of FDIC 
assessments paid by each BIF member institution is based upon its relative 
risk of default as measured by regulatory capital ratios and other factors.  
The BIF assessment rate currently ranges from zero to 27 cents per $100 of 
domestic deposits.  The FDIC may increase or decrease the assessment rate 
schedule on a semiannual basis.  As of December 31, 1998, each of the Banks 
qualified for the lowest BIF assessment rate. 

     Effective January 1, 1997, all FDIC-insured depository institutions are 
also required to pay an assessment to provide funds for payment of interest 
on Financing Corporation ("FICO") bonds.  Until December 31, 1999, or when 
the last savings and loan association ceases to exist, whichever occurs 
first, institutions must pay approximately 1.3 cents per $100 of 
BIF-assessable deposits.


                                       13
<PAGE>

EXECUTIVE OFFICERS

     The executive officers of the Company are as follows:

<TABLE>
<CAPTION>

Name                    Age  Position
----                    ---  --------
<S>                    <C>   <C>
Donald R. Mengedoth     54   President, Chief Executive Officer and Chairman of the
                             Board

Mark A. Anderson        41   Vice Chairman - Corporate Services, Chief Financial
                             Officer, Chief Information Officer, Secretary and
                             Treasurer

Ronald K. Strand        52   Vice Chairman - Financial Services Division

David A. Lee            55   Executive Vice President of Regional Banking

Robert W. Jorgensen     51   Senior Vice President and Wyoming Region Manager

Thomas R. Anderson      43   Senior Vice President - Treasury

Cynithia U. Davis       46   Senior Vice President and Southwestern Region Manager

Keith A. Dickelman      44   Senior Vice President and Colorado Region Manager

Dan M. Fisher           44   President and Chief Executive Officer, Community First
                             Service Corporation

Thomas E. Hansen        46   Senior Vice President and Central Region Manager

Bruce A. Heysse         47   Senior Vice President - Acquisitions and Integration

Thomas A. Hilt          56   Senior Vice President and Chief Administrative Officer

Gary A. Knutson         51   Senior Vice President and Eastern Region Manager

Charles A. Mausbach     47   Senior Vice President and Western Region Manager

Harriette S. McCaul     48   Senior Vice President - Human Resources

Brad J. Rasmus          37   Senior Vice President & Financial Services Sales 
                             Manager

Patricia J. Staples     43   Senior Vice President of Marketing

Craig A. Weiss          37   Senior Vice President - Finance

</TABLE>

     Donald R. Mengedoth has been President, Chief Executive Officer, Chairman
of the Board and a director of the Company since its organization in 1986.  He
was Senior Vice President of First Bank System, 

                                      14
<PAGE>

Inc. ("FBS"), currently known as U.S. Bancorp, from 1982 to 1987 and has 
worked in the banking business since 1966, including management positions in 
retail banking operations, human resources and commercial lending. From 1984 
to 1987, Mr. Mengedoth was Regional Managing Director of FBS.  From 1979 to 
1982, Mr. Mengedoth was Vice President - Operations for FBS.  Prior to that 
time, he was Senior Vice President of First Bank Milwaukee. He has been First 
Vice President of the American Bankers Association since October 1998.

     Mark A. Anderson has been Vice Chairman - Corporate Services of the 
Company since October 1998, Chief Financial Officer, Secretary and Treasurer 
of the Company since its organization in 1986 and Chief Information Officer 
since February 1998.  He was Vice President and Regional Controller for FBS 
from 1984 to 1987.  From 1979 to 1984, he held various positions with 
FBS-affiliated banks in the finance and credit analysis areas.  Mr. Anderson 
is a Chartered Financial Analyst and a Certified Management Accountant.

     Ronald K. Strand has been Vice Chairman - Financial Services Division 
since October 1998.  He was Executive Vice President - Banking Group since 
February 1993 and  was previously Senior Vice President and Region Manager 
for South Dakota and North Dakota for the Company from January 1991 to 
February 1993. Previously, Mr. Strand had been Vice President and Regional 
Manager for the Company and President, Chief Executive Officer and a director 
of the Company's affiliate bank in Wahpeton, North Dakota since 1988.  Prior 
to his affiliation with the Company, he served as President and Chief 
Executive Officer of Norwest Bank of North Dakota, N.A., Wahpeton, from 1985 
until 1988.  He was employed by Norwest for a total of 15 years, having 
previously worked in Norwest banks in Jamestown, North Dakota, and Moorhead, 
Minnesota.

     David A. Lee has been Executive Vice President of Regional Banking since 
October 1998.  He was previously Senior Vice President and Eastern Region 
Manager and had been a Region Manager of the Company since 1988.  He was 
President and Chief Executive Officer and a director of the Company's 
affiliate bank in Little Falls from 1987 to January 1991.  Mr. Lee held 
various positions with FBS from 1966 to 1987.

     Robert W. Jorgensen has been Senior Vice President and Wyoming Region 
Manager since January 1999.  He was previously President of Community First 
National Bank, Paynesville, Minnesota from 1989 to 1998.

     Thomas R. Anderson has been Senior Vice President - Treasury since 
February 1998.  He was previously Vice President/Funds Manager of the Company 
from 1988 to 1997 and Funds Management Officer from 1987 to 1988.  Prior to 
1987, he was employed by Norwest Corporation for seven years, most recently 
as a Senior Financial Analyst.

     Cynthia U. Davis has been Senior Vice President and Southwestern Region 
Manager since October 1997.  From October 1987 to October 1997, she held 
various positions with Banc One Corporation, including Vice President, Retail 
Delivery for Banc One Corporation and Vice President Region Manager for 36 
Bank One banking centers in Northern Arizona.  She has a total of 23 years of 
banking experience in Arizona, Idaho and California.

     Keith A. Dickelman has been Senior Vice President and Colorado Region 
Manager since January, 1998.  He was previously President of Community First 
National Bank, Fergus Falls, Minnesota from 1995 to 1997 and from 1992 to 
1995 served as a Senior Loan Officer and Senior Vice President of Community 
First National Bank, Fargo, North Dakota.

     Dan M. Fisher has been President and Chief Executive Officer of 
Community First Service Corporation since October 1998 and previously served 
as Executive Vice President - Bank Operations at the subsidiary.  Mr. Fisher 
was previously District Manager and Senior Vice President of Fiserv Inc., a 
financial services data and item processor from October 1996 to September 
1998.  Prior to that, he served as Senior 

                                      15
<PAGE>

Vice President and Operations Manager of Norwest Bank Minnesota, N.A. from 
August 1988 to October 1996.

     Thomas E. Hansen has been Senior Vice President and Central Region 
Manager since April 1993.  He also served as President, Chief Executive 
Officer and a director of the Company's affiliate bank in Fargo, North Dakota 
from April 1993 to December 1996.  Previously,  he was employed by Norwest 
Bank Fargo for 19 years, most recently as President.

     Bruce A. Heysse has been Senior Vice President  - Acquisitions and 
Integration since July 1996.  He was Senior Vice President and Integration 
Manager of the Company from November 1995 to June 1996.  He was Vice 
President and Senior Credit Officer of the Company from 1987 to November 
1995.  He began his banking career at the Company's affiliate bank in 
Wahpeton, North Dakota, and had a total of 11 years of banking experience 
prior to joining the Company.

     Thomas A. Hilt has been Senior Vice President and Chief Administrative 
Officer of the Company since 1987 and President of Community First Service 
Corporation, the Company's data processing subsidiary, since 1988.  He was 
Vice President and Manager - Operations Support for the Regional Division of 
FBS from 1984 to 1987.  Prior to 1984, he held various positions with FBS 
since 1967, including responsibility for systems development, programming, 
audit and examination functions.

     Gary A. Knutson has been Senior Vice President and Eastern Region 
Manager since July, 1996 and previously was Senior Vice President and Western 
Region Manager of the Company since September 1993.  He was President, Chief 
Executive Officer and a director of the Company's affiliate bank in Wahpeton, 
North Dakota from January 1991 to September 1993.  He began his banking 
career at the Company's affiliate bank in Lidgerwood, North Dakota, and had a 
total of 14 years of banking experience prior to joining the Company.

     Charles A. Mausbach has been Senior Vice President and Western Region 
Manager since March 1998.  He was President of Community First National Bank, 
Worthington, Minnesota from October 1992 to February 1998.

     Harriette S. McCaul, Ph.D., has been Senior Vice President - Human 
Resources since February 1997.  Previously, she was the Dean of the College 
of Business Administration at North Dakota State University in Fargo, North 
Dakota. She joined NDSU in 1983 and held various teaching and administrative 
positions in the Business Department and human resources area.  Prior to that 
time, she was an instructor at Moorhead State University, Moorhead, 
Minnesota, and the director of faculty and staff benefits at the University 
of Kansas.  

     Brad J. Rasmus has been Senior Vice President - Financial Services since 
February 1999. He was previously Vice President & Financial Services Sales 
Manager. Mr. Rasmus has been employed with the Company since 1995.

     Patricia J. Staples has been Senior Vice President of Marketing since 
July 1994.  Previously, Ms. Staples was employed as the public relations 
manager with MeritCare Health System in Fargo, North Dakota for 10 years.

                                      16
<PAGE>

     Craig A. Weiss has been Senior Vice President - Finance since February 
1998.  He was previously Vice  President Finance of the Company from 1988 to 
1997 and Finance and Accounting Manager from 1987 to 1998.  Prior to 1987, he 
was employed by First Bank System, most recently as a Regional Financial 
Analyst.  Mr. Weiss is a certified public accountant.

     ELECTION.  The Company's officers are elected by the Board of Directors. 
The officers serve until their successors are elected or until their earlier 
resignation, removal or death.

ITEM 2.  PROPERTIES

     In January 1996, the Company formed a new subsidiary, Community First 
Properties, Inc. ("CFPI"), for the purpose of acquiring and owning the space 
currently occupied by the Company.  CFPI owns all of the portions of the 
office building not owned by the Company's Fargo Bank subsidiary at 520 Main 
Avenue, Fargo, North Dakota.

     The Company maintains its offices at 520 Main Avenue, Fargo, North 
Dakota, consisting of approximately 34,000 square feet at an annual rental of 
$443,000, payable to its subsidiary, CFPI.  The Company believes these 
facilities will be adequate for the foreseeable future.  The Company also 
utilizes office space at affiliate banks located in Denver, Colorado and 
Cheyenne, Wyoming as well as leasing approximately 4,000 square feet of 
office space in Phoenix, Arizona at an annual rental of approximately 
$84,000.  Each of the Banks owns its main office and those of its branches, 
and these facilities range in size from approximately 1,200 to 36,000 square 
feet.  During 1997, the Company constructed and owns a 47,000 square foot 
two-story building in Fargo, North Dakota which is leased to CFSC.

ITEM 3.  LEGAL PROCEEDINGS

     From time to time, the Company and its subsidiaries are subject to 
various legal actions and proceedings in the normal course of business, some 
of which may involve substantial claims for compensatory damages.  In some 
cases, these actions and proceedings relate in whole or in part to activities 
of banks prior to their acquisition and may be covered by agreements of 
former owners of these banks to indemnify the Company.  Although litigation 
is subject to many uncertainties and the ultimate exposure with respect to 
current matters cannot be ascertained, management does not believe that the 
final outcome will have a material adverse effect on the financial condition 
of the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.


                                       PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Information as to the principal market on which the Company's common stock
is traded, market price information for the common stock of the Company, the
approximate number of holders of record as 

                                      17
<PAGE>

of December 31, 1998, and the Company's dividend policy is incorporated 
herein by reference from the inside back cover of the 1998 Annual Report to 
Shareholders.


ITEM 6.   SELECTED FINANCIAL DATA

     Selected financial data for the five years ended December 31, 1998, 
consisting of data captioned "Financial Highlights" on the facing page to 
page 1 of the 1998 Annual Report to Shareholders, "Consolidated Statement of 
Condition--Five-Year Summary" on page 40 of the Annual Report and 
"Consolidated Statement of Income-Five Year Summary" on page 41 of the Annual 
Report are incorporated herein by reference.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

     Management's Discussion and Analysis of Financial Condition and Results of
Operations on pages  11 through 22 of the 1998 Annual Report to Shareholders is
incorporated hereby by reference.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The information set forth on pages 12 through 22 of the 1998 Annual Report
to Shareholders under the caption "Management's Discussion and Analysis -
Results of Operations, Financial Condition and  Asset/Liability Management" is
incorporated herein by reference. 

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Consolidated Statements of Financial Condition of the Company as of 
December 31, 1998 and 1997, and the related Consolidated Statements of 
Income, Shareholders' Equity and Cash Flows for each of the three years ended 
December 31, 1998, the Notes to the Consolidated Financial Statements and the 
Report of Ernst & Young LLP, independent auditors, contained in the Company's 
1998 Annual Report to Shareholders on pages 23 through 39 and reconciliation 
of amounts previously reported in Form 10-Q to restated financial data as 
currently included in Exhibit 99.4, are incorporated herein by reference.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

     None.


                                      18
<PAGE>

                                       PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information set forth in the Company's 1999 Proxy Statement under 
the captions "Election of Directors" and "Section 16(a) Beneficial Ownership 
Compliance" is incorporated herein by reference. Information regarding the 
executive officers of the Company is included under separate caption in Part 
I of this Form 10-K.


ITEM 11.  EXECUTIVE COMPENSATION

     The information set forth in the 1999 Proxy Statement under the caption
"Executive Compensation" is incorporated herein by reference, except that
information under the captions "Compensation Committee Report on Executive
Compensation" and "Comparative Stock Performance" is not so incorporated.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information set forth in the 1999 Proxy Statement under the caption
"Security Ownership of Principal Shareholders and Management" is incorporated
herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information set forth in the 1999 Proxy Statement under the caption
"Certain Transactions" is incorporated herein by reference.


                                       PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  DOCUMENTS FILED AS PART OF THIS FORM 10-K:
     
     1.   FINANCIAL STATEMENTS.  See Item 8, above.

     2.   FINANCIAL STATEMENT SCHEDULES.  All financial statement schedules are
          omitted as the required information is inapplicable or the information
          is presented in the financial statements or related notes.

     3.   PRO FORMA FINANCIAL INFORMATION.  None.

(b)  REPORTS ON FORM 8-K.

      None.

(c)  EXHIBITS. 

<TABLE>
<CAPTION>

Exhibit
Number    Description
-------   -----------
<S>       <C>
  2.1     Agreement and Plan of Reorganization dated as of June 25, 1996 between
          the Registrant and Mountain Parks Financial Corp. (incorporated by
          reference to the Appendix to the Registrant's Joint Proxy Statement
          with Mountain Parks Financial Corp. included in the Registration
          Statement on Form S-4 [File No. 333-14439], as declared effective by
          the Commission on November 7, 1996).

                                      19
<PAGE>

<CAPTION>

Exhibit
Number    Description
-------   -----------
<S>       <C>
  2.2     Stock Purchase Agreement dated as of February 18, 1997 by and among
          the Registrant, KeyCorp and Key Bank of the Rocky Mountains, Inc.
          (incorporated by reference to Exhibit 2.8 to the Registrant's
          Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year
          ended December 31, 1996, filed with the Commission as of May 8, 1997
          [the "1996 Form 10-K"]).
                                                                      
  2.3     Restated Agreement and Plan of Merger dated as of August 22, 1997,
          including Agreement and First Amendment to Agreement dated as of the
          same date, between the Registrant and First National Summit
          Bankshares, Inc. (incorporated by reference to Appendices A and B to
          the Proxy Statement-Prospectus contained in the Registrant's
          Registration Statement on Form S-4 [File No. 333-38997] filed with the
          Commission on October 29, 1997).

  2.4     Restated Agreement and Plan of Merger dated as of August 28, 1997
          between the Registrant and Republic National Bancorp, Inc.
          (incorporated by reference to Appendix A to the Proxy 
          Statement-Prospectus contained in the Registrant's Registration 
          Statement on Form S-4 [File No. 333-38225] filed with the Commission 
          on October 20, 1997).

  2.5     Office Purchase and Assumption Agreement dated as of the 10th day of
          September, 1997 by and between Bank One, Arizona, National
          Association, Bank One, Colorado, National Association, Bank One, Utah,
          National Association and the Registrant, (incorporated by reference to
          Exhibit 2.6 to the Registrant's Registration Statement on Form S-4
          [File No. 333-36091], filed with the Commission on September 22,
          1997). 

  2.6     Agreement and Plan of Merger dated as of November 6, 1997, among the
          Registrant, Community First National Bank and Pioneer Bank of Longmont
          (the "Parties")(incorporated by reference to Exhibit 2.7 to the
          Registrant's Registration Statement on Form S-4 [File No. 333-37527],
          filed with the Commission on November 21, 1997), and as amended by
          First Amendment to Agreement and Plan of Merger dated as of the 19th
          day of December, 1997, by and among the Parties (incorporated by
          reference to Appendix B to the Proxy Statement-Prospectus contained in
          the Registrant's Registration Statement on Form S-4 [File No. 
          333-48825] filed with the Commission on March 31, 1998).

  2.7     Agreement and Plan of Merger dated as of January 8, 1998 by and
          between the Registrant and Community Bancorp, Inc. (incorporated by
          reference to Exhibit 2.14 to the Registrant's Registration Statement
          on Form S-4 [File No. 333-49367] filed with the Commission on June 9,
          1998 (the "June 1998 Form S-4")), and as amended by First Amendment to
          Agreement and Plan of Merger, dated as of the 9th day of March, 1998,
          between the Registrant and Community Bancorp, Inc. (incorporated by
          reference to Exhibit 2.15 to the June 1998 Form S-4).

  2.8     Agreement and Plan of Merger dated as of April 2, 1998 between the
          Registrant and Western Bancshares of Las Cruces, Inc. (incorporated by
          reference to Exhibit 2.16 to the June 1998 Form S-4).

                                      20
<PAGE>

<CAPTION>

Exhibit
Number    Description                                                           
-------   -----------
<S>       <C>
  2.9     Agreement and Plan of Merger dated as of May 18, 1998 between the
          Registrant and Guardian Bancorp. (incorporated by reference to Exhibit
          2.17 to the June 1998 Form S-4).

  2.10    Agreement and Plan of Merger dated as of January 12, 1998 between 
          the Registrant and FNB, Inc. (incorporated by reference to Exhibit 
          2.16 to the June 1998 Form S-4).

  3.1     Restated Certificate of Incorporation of the Registrant (incorporated
          by reference to Exhibit 3.1 to the 1996 Form 10-K), as amended by a
          Certificate of Amendment to the Registrant's Certificate of
          Incorporation as filed with the Delaware Secretary of State on May 7,
          1998 and attached hereto.

  3.2     Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to
          the Registrant's Registration Statement on Form S-1 [File No. 
          33-41246], as declared effective by the Commission on August 13, 1991
          [the "1991 S-1"]).

  4.1     Certificate of Designations, Preferences and Rights of Series A Junior
          Participating  Preferred Stock of the Registrant (incorporated by
          reference to Exhibit A to Exhibit 1 to the Registrant's Registration
          Statement on Form 8-A, filed with the Commission on January 9, 1995
          [the "Form 8-A"]).

  4.2     Form of Rights Agreement dated as of January 5, 1995, between the
          Registrant, and Norwest Bank Minnesota, National Association ("Norwest
          Bank"), which includes as Exhibit B thereto the form of Rights
          Certificate (incorporated by reference to Exhibit 1 to the Form 8-A.)

  4.3     Subordinated Indenture dated February 5, 1997, between the Registrant
          and Wilmington Trust Company, as Indenture Trustee, including form of
          Junior Subordinated Indenture (incorporated by reference to Exhibit
          4.1 to the Registrant's Registration Statement on Form S-3 [File No.
          333-19921] filed with the Commission as of January 30, 1997 [the "1997
          CFB Capital I Form S-3"]).

  4.4     Amended and Restated Trust Agreement of CFB Capital I dated February
          5, 1997, including Form of Capital Security Certificate of CFB Capital
          I (incorporated by reference to Exhibit 4.5 to the 1997 CFB Capital I
          Form S-3).

  4.5     Capital Securities Guarantee Agreement dated as of February 5, 1997,
          between the Registrant and Wilmington Trust Company as Trustee
          (incorporated by reference to Exhibit 4.7 to the 1997 CFB Capital I
          Form S-3).
 
  4.6     Indenture dated June 24, 1997 relating to the Registrant's 7.30%
          Subordinated Notes Due 2004 (the "New Notes") between the Registrant
          and Norwest Bank, as trustee  (incorporated by reference to Exhibit
          4.1 to the Registrant's Registration Statement on Form S-4 [File No.
          333-36091] as declared effective by the Commission on November 10,
          1997 [the "1997 Subordinated Note Form S-4"]).

  4.7     Subordinated Indenture dated December 10, 1997, between the Registrant
          and Wilmington Trust Company, as Indenture Trustee, including form of 
          Junior Subordinated Indenture (incorporated by reference to Exhibit 
          4.1 to the Registrant's Registration Statement on Form S-3 [File No. 
          333-

                                      21
<PAGE>

<CAPTION>

Exhibit
Number    Description                                                           
-------   -----------
<S>       <C>
          37521] as declared effective by the Commission on December 4, 1997 
          [the "1997 CFB Capital II Form S-3"]).

  4.8     Amended and Restated Trust Agreement of CFB Capital II dated December
          10, 1997, including Form of Capital Security Certificate of CFB
          Capital II (incorporated by reference to Exhibit 4.5 to the 1997 CFB
          Capital II Form S-3).

  4.9     Capital Securities Guarantee Agreement dated as of December 10, 1997,
          between the Registrant and Wilmington Trust Company as Trustee
          (incorporated by reference to Exhibit 4.7 to the 1997 CFB Capital II
          Form S-3).

 10.1     1998 Annual Incentive Plan for Holding Company Management.*        

 10.2     Restated 1987 Stock Option Plan (incorporated by reference to Exhibit 
          10.7 to the Registrant's Registration Statement on Form S-8 [File No. 
          33-46744], as declared effective by the Commission on May 6, 1992).*

 10.3     Form of Tax Sharing Agreement between the Registrant and each of its
          subsidiary Banks (incorporated by reference to Exhibit 10.3 to the 
          Registrant's Annual Report on Form 10-K for the year ended December 
          31, 1995 [the "1995 Form 10-K"]).                                                              

 10.4     Form of Service Agreement for Data Processing between Community First
          Service Corporation and each of the subsidiary Banks of the Registrant
          (incorporated by reference to Exhibit 10.4 to the 1995 Form 10-K). 

 10.5     Form of Bank Services Agreement between the Registrant and each of its
          subsidiary Banks (incorporated by reference to Exhibit 10.5 to the 
          1995 Form 10-K).

 10.6     Form of Agency Agreement between the Registrant and each of its 
          subsidiary Banks, and Assignment of Agency Agreement and Second 
          Assignment of Agency Agreement, which assign the Registrant's interest
          in the Agency Agreement to Community First Financial, Inc. (relating 
          to the Registrant's subsidiary Banks) (incorporated by reference to 
          Exhibit 10.6 to the 1995 Form 10-K).

 10.7     Lease dated April 27, 1993, between Community First Properties, Inc.
          (formerly Fargo Tower Partners) and the Registrant (incorporated by
          reference to Exhibit 10.11 to the Registrant's Annual Report on Form 
          10-K for the year ended December 31, 1994).

 10.8     Promissory Note dated July 14, 1997 (Term Note) in the principal 
          amount of $30,000,000, issued to Norwest Bank, as Agent, on behalf of 
          Harris Trust and Savings Bank ("Harris"), Band of America National 
          Trust and Savings Association ("Bank of America") and Norwest 
          (incorporated by reference to Exhibit 10.8 to Registrant's Amendment 
          No. 1 to its Annual Report on Form 10-K for the year ended December 
          21, 1997 [the "1997 Form 10-K"]).

                                      22
<PAGE>

<CAPTION>

Exhibit
Number    Description                                                           
-------   -----------
<S>       <C>
 10.9     Promissory Notes dated July 14, 1997 (Current Notes), each in the 
          principal amount of $8,333,333.33, issued to each of Harris Bank of
          America, and Norwest (incorporated by reference to Exhibit 10.9 to the
          1997 Form 10-K).

 10.10    Credit Agreement dated July 14, 1997 among the Company, Harris Bank
          of America, Norwest as a lender, and Norwest as Agent (incorporated by
          reference to Exhibit 10.10  to the 1997 Form 10-K). 

 10.11    Form of Indemnification Agreement entered into by and between the
          Registrant and the Registrant's officers and directors (incorporated
          by reference to Exhibit 10.33 to Registrant's Annual Report on Form
          10-K for the year ended December 31, 1992 [the "1992 Form 10-K"]).

 10.12    1996 Stock Option Plan, as approved by the Board of Directors on
          February 6, 1996 (incorporated by  reference to Exhibit 10.15 to the
          1995 Form 10-K), and as amended by resolution of the Board of
          Directors on February 1, 1999 in the form attached.

 10.13    Supplemental Executive Retirement Plan, effective as of August 1, 1995
          (incorporated by reference to Exhibit 10.13 to the 1997 Form 10-K).*  

 10.14    Registrant's Deferred Compensation Plan for Members of the Board of
          Directors, effective August 1, 1993, including First Amendment to the
          Registrant's Deferred Compensation Plan for Members of the Board of
          Directors, effective as of February 1, 1999.

 10.15.1  Change in Control Severance Agreement dated December 1, 1998 between
          the Registrant and Donald R. Mengedoth.*

 10.15.2  Change in Control Severance Agreement dated December 1, 1998 between
          the Registrant and Mark A. Anderson.*

 10.15.3  Form of Change in Control Severance Agreement dated December 1, 1998
          between the Registrant and Messrs. David A. Lee, Ronald K. Strand and
          Bruce A. Heysse.*

 10.15.4  Form of Change in Control Severance Agreement dated December 1, 1998
          between the Registrant and Registrant's executive officers.*

 13.1     Annual Report to Shareholders.                                  

 21.1     Subsidiaries of the Registrant.    

                                      23
<PAGE>

<CAPTION>

Exhibit
Number    Description
-------   -----------
<S>       <C>
 23.1     Consent of Ernst & Young LLP.

 23.2     Consent of Baird, Kurtz & Dobson.

 23.3     Consent of Starr Colton Pena Vogel & Co.

 23.4     Consent of Simpson & Company.

 27.1     Financial Data Schedule relating to Financial Statements at December 
          31, 1998.

 27.2     Restated Financial Data Schedules relating to Restated Financial 
          Statements at December 31, 1997 and December 31, 1996.

 27.3     Restated Financial Data Schedules relating to Restated Financial 
          Statements at March 31, 1998, June 30, 1998 and September 30, 1998. 

 27.4     Restated Financial Data Schedules relating to Restated Financial 
          Statements at March 31, 1997, June 30, 1997 and September 30, 1997. 

 99.1     Report of Baird, Kurtz & Dobson regarding financial statements of 
          Community Bancorp, Inc.

 99.2     Report of Starr Colton Pena Vogel & Co. regarding financial statements
          of Western Bancshares of Las Cruces, Inc.

 99.3     Report of Simpson & Company regarding financial statements of Guardian
          Bancorp.

 99.4     Reconciliation of Amounts Previously Reported.

</TABLE>

----------------
*Executive compensation plans and arrangements.

                                      24
<PAGE>

                                      SIGNATURES

     Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                            COMMUNITY FIRST BANKSHARES, INC.
                                            ("Registrant")

Dated: March 22, 1999                       By  /s/ Donald R. Mengedoth
                                               ----------------------------
                                               Donald R. Mengedoth
                                               President, Chief Executive 
                                               Officer and Chairman of the 
                                               Board of Directors

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant, in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>

Signature and Title                                   Date
-------------------                                   ----
<S>                                                   <C>
/s/ Donald R. Mengedoth                               March 22, 1999
---------------------------------------------
Donald R. Mengedoth
President, Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)


/s/ Mark A. Anderson                                  March 22, 1999
---------------------------------------------
Mark A. Anderson
Vice Chairman-Corporate Services, Chief Financial Officer,
Secretary, Treasurer and Chief Information Officer
(Principal Financial and Accounting Officer)


/s/ Patricia A. Adam                                  March 22, 1999
---------------------------------------------
Patricia A. Adam, Director


/s/ James T. Anderson                                 March 22, 1999
---------------------------------------------
James T. Anderson, Director


/s/ Patrick E. Benedict                               March 22, 1999
---------------------------------------------
Patrick E. Benedict, Director

                                      25
<PAGE>

<CAPTION>

Signature and Title                                   Date
-------------------                                   ----
<S>                                                   <C>
/s/ Patrick Delaney                                   March 22, 1999
---------------------------------------------
Patrick Delaney, Director


/s/ John H. Flittie                                   March 22, 1999
---------------------------------------------
John H. Flittie, Director


/s/ Darrell G. Knudson                                March 22, 1999
---------------------------------------------
Darrell G. Knudson, Director


/s/ Dennis M. Mathisen                                March 22, 1999
---------------------------------------------
Dennis M. Mathisen, Director


/s/ Marilyn R. Seymann                                March 22, 1999
---------------------------------------------
Marilyn R. Seymann, Director


/s/ Thomas C. Wold                                    March 22, 1999
---------------------------------------------
Thomas C. Wold, Director


/s/ Harvey L. Wollman                                 March 22, 1999
---------------------------------------------
Harvey L. Wollman, Director
</TABLE>

                                      26
<PAGE>

                                EXHIBIT INDEX
<TABLE>
<CAPTION>

Exhibit No.                     Description
-----------                     -----------
<S>            <C>
      3.1      Certificate of Amendment to the Registrant's Certificate of
               Incorporation as filed with the Delaware Secretary of State on
               May 7, 1998

     10.1      1998 Annual Incentive Plan for Holding Company Management

     10.12     Amendments to 1996 Stock Option Plan Adopted on February 1, 1999

     10.14     Registrant's Deferred Compensation Plan for Members of the Board
               of Directors, effective August 1, 1993, including First Amendment
               to the Registrant's Deferred Compensation Plan for Members of the
               Board of Directors, effective as of February 1, 1999

     10.15.1   Change in Control Severance Agreement dated December 1, 1998
               between the Registrant and Donald R. Mengedoth

     10.15.2   Change in Control Severance Agreement dated December 1, 1998
               between the Registrant and Mark A. Anderson

     10.15.3   Form of Change in Control Severance Agreement dated December 1,
               1998 between the Registrant and Messrs. David A. Lee, Ronald K.
               Strand and Bruce A. Heysse

     10.15.4   Form of Change in Control Severance Agreement dated December 1,
               1998 between the Registrant and Registrant's executive officers

     13.1      Annual Report to Shareholders

     21.1      Subsidiaries of the Registrant

     23.1      Consent of Ernst & Young LLP

     23.2      Consent of Baird, Kurtz & Dobson

     23.3      Consent of Starr Colton Pena Vogel & Co.

     23.4      Consent of Simpson & Company

     27.1      Financial Data Schedule relating to Financial Statements at 
               December 31, 1998

     27.2      Restated Financial Data Schedules relating to Restated Financial
               Statements at December 31, 1997 and December 31, 1996.

                                     -i-
<PAGE>

     27.3      Restated Financial Data Schedules relating to Restated Financial
               Statements at March 31, 1998, June 30, 1998 and September 30, 
               1998. 

     27.4      Restated Financial Data Schedules relating to Restated Financial
               Statements at March 31, 1997, June 30, 1997 and September 30, 
               1997. 

     99.1      Report of Baird, Kurtz & Dobson regarding financial statements of
               Community Bancorp, Inc.

     99.2      Report of Starr Colton Pena Vogel & Co. regarding financial 
               statements of Western Bancshares of Las Cruces, Inc.

     99.3      Report of Simpson & Company regarding financial statements of 
               Guardian Bancorp 

     99.4      Reconciliation of Amounts Previously Reported

</TABLE>

                                    -ii-