Appendix — United States v. First National Bancorporation, Inc.

Supreme Court brief1972

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_—_

Jn the Supreme Court of the Anited States

Octoser Term, 1971

No. 71-703

Unirep States or AMERICA, APPELLANT,

First NationaL BancorporaTion, INc., AND

Tue First NationaL Bank oF GREELEY

ON APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF COLORADO

INDEX *

Page

i Say Cas eka whew AeA ee kee Kes 1

Complaint by the United States filed July 8, 1970 ........ 4

Answer of First National Bancorporation, Inc. and The

First National Bank of Greeley, filed July 24,1970 ..... 10

Complaint by the United States as amended nunc pro tunc

es en Cis ee Na aux ek ae he wn c's Use 20

Trial of the action held before the Hon. William E. Doyle,

U.S. District District Judge for the District of Colorado,

commencing on May 3, 1971, at Denver, Colorado:

TS i ates nha deed Vk o's 6 & kul oe 6S 27

Testimony of Howard E. Smith—direct .... [Tr. 120] 28

—Ccross ........ [127] 32

—redirect ..... [131] 34

Testimony of George P. Evans—direct ........ [138] 35

——C(FOSB ........ {157} 42

—redirect ...... {160} 43

*The memorandum opinion and order of the district court are printed in

Appendix A of the Jurisdictional Statement of the United States, at pages

26-61.

Page

Transcript of proceedings held before the Hon. William E.

Doyle, U.S. District Judge for the District of Colorado,

on May 4, 1971:

EEE Wives Ucel da nkna nk dps twee bees kax-as 44

Testimony of Richard G. Walsh—direct ...... [166] 45

—voir dire ... [169] 46

Transcript of proceedings held before the Hon. William E.

Doyle, U.S. District Judge for the District of Colorado,

on May 5, 1971:

PEE beak ats create cGeus \ankatee ken ckewiees 98

Testimony of Richard G. Walsh (continued)

OEE ane tno nchkhns (ask beueee shee s ban [350]

MING ais Kudekancuasvenvackbinburens [435 ]

PONE 5 and wes RANe Rebs e kK wees ewes [457 ]

Testimony of James M. Small—direct ........ [470]

—cross ........ [481]

—redirect ...... [487 |

—recross ....... [491]

Testimony of Thomas Moon—direct .......... [492]

MON: © vhak exe nas [495]

Testimony of H. J. Bleakley—direct ........ [499]

—Cross ......... [506 |

Testimony of Harry Bloom—direct ......... [518]

ROO a 564408485 [521]

Testimony of Stanley Allen—direct ......... [524]

Transcript of proceedings held before the Hon. William E.

Doyle, U.S. District Judge for the District of Colorado,

on May 6, 1971:

PLS Sr Cais cin i abe Cans ah Sawa eense sean

Testimony of Stanley Allen (continued)

PRG neha hens washes kik ORAS 8 we S [548]

MN ULAR Ces CWhak sin tricia 16 ORE koa [549]

Testimony of Donald W. Winter—direct ..... [550]

—cross ..... [558 |

—redirect ... [567]

—recross .... [568]

Testimony of Walter R. McKinstry—direct ... [570]

—cross ... [575]

—redirect . [578]

Testimony of Charles H. Smukler—direct .... [579]

—cross .... [590]

—redirect .. [601]

—recross ... [602]

ili

Testimony of George R. Hall—direct ......... [604 |

—voir dire ..... [641]

—CTOSS ........ [| 689G |

Transcript of proceedings held before the Hon. William E.

Doyle, U.S. District Judge for the District of Colorado,

on May 10, 1971:

ENN Scere Sans Wav scen\ ways hae Santee seek

Testimony of Theodore D. Brown—direct ..... |726|

—cross ..... | 745]

—redirect ... [759]

—recross .... [763]

—redirect ... [767

Testimony of A. H. Trautwein—direct ....... | 767]

—Cross ........ [769]

—redirect ..... |771]

—recross ...... [772

Testimony of Norman M. Dean—direct ....... |773]

—CTOSS ........ | 774]

—redirect ..... |777]

Testimony of Dale R. Hinman—direct ....... [779]

ONE, sin vcs | 780]

—redirect ..... | 782]

Testimony of Robert M. Gilbert—direct ....... | 783]

—Cross ....... [784]

Testimony of Larry DeBell—direct .......... | 785]

ERT [795]

Testimony of Ronald C. Harris—direct ....... | 800]

—Cross ........ | 807 |

—redirect ..... [812]

Testimony of Richard P. Brown—direct ..... [813]

—CTross ...... [817]

—redirect [820]

Testimony of Jack R. Thomas—direct ....... [823]

vc i. TE [833]

—redirect ..... [852]

Testimony of John F. Falkenberg—direct ..... | 865]

—Ccross ...... [870]

Testimony of Royce Clark—direct ........... [875]

mans TREE eT [877]

Testimony of Philip H. Hogue—direct ....... [882]

—Cross ........ [911]

—redirect ..... [924]

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Transcript of proceedings held before the Hon. William E.

Doyle, U.S. District Judge for the District of Colorado,

on May 11, 1971:

BORED 0 occ cctcccevcicsssiaveveversnsevabs

Testimony of Norman M. Postles—direct ..... (929)

—Croms ...... {932}

—recrom .... [936]

Testimony of Lester R. Pagels—direct ....... [938]

—CFOM «4.42... (940)

—redirect ..... (944)

Testimony of Nevins D. Baxter—direct ....... {945}

ee i {1071}

Transcript of proceedings held before the Hon. William E.

Doyle, US. District Judge for the District of Colorado,

on May 12, 1971:

BORER scociscccvcccenedecccvcecevssasscves

Testimony of Nevins D. Baxter (continued)

MENEEN can céccbevdedkesed cokusacuseenes {1122]

MD accstecvssvedsliseetdvduveats [1153]

MONEE \isadveboeeedse tents sebenveseves {1161}

MN cdisuvedieraviancionedsoava [1163]

Testimony of Dale Hinman—direct ....... {1165}

—CFOM ........ [1168]

Testimony of Harry Bloom—direct ....... {1199}

—CFOM «4.1... {1202]

—redirect ...... [1203]

—TecrOoms ...... [1204]

Testimony of Walter C. Emery—direct ..... {1207}

—Croms ...... {1211)

Testimony of Philip H. Hogue—direct ....... [1264]

Transeript of proceedings held before the Hon. William E.

Doyle, U.S. District Judge for the District of Colorado,

on May 13, 1971:

REBORIEROED occcccccaccsvccvcescecconsecoovcecss

Testimony of William P. Lober—direct ..... [1274]

—CrOoms ...... [1277]

Testimony of William J. Tracy—direct ..... {1278]

—CFOMm ...... [1261]

Plaintiff's exhibits:

PUR. cvovodscocorsisiveecccosbncesavetauseanadenas

PUD ‘apevciervechictovodccéonecvensebcsoakasedare

Page

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wh eat at a hl tint ladinted tot te Ao a SY oe ee ee

a a EO CSOS OPP PDE DOS TORADO DECODED REDO wO

a eC PSSOCSESIO SO COR OIORED GHEE OEHOCObeEO

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Se a er SSO SCE PPAR ASO AOD HERE ORORORE OOO

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Se OPS OO RST EOD TEODOR 00 6b 0668000 60%

[= SUR OCEe OCS SAV ALAAAD PO CASO ROR PRO COLO 20 bbe

wil int aa Meda Nn tal ten ee tt Oo a ee ee

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Seating bhi bind ihe CRE LOREM OEE ee a eee

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SSPE PSSCSOSSSASSSPCOPOP POSSE R OS CHBLEEOZOCS

PPS PCOOSSESCSIS EES OSS HSC ASOT S DLE LOLObOL2b660%

OPP SOOO OSSOEECDFF OO 0.002060 ROH DEC6606b6e

PSP SOSPOPEOSSSSSSP OPEC HFASCOSVAOAER OBOE bEbOSD

PSS SCOHRSSOAOCSCSC SSF OSO SOP PO SHPO THO ROLE ODORLESS EO-D

MEP RESHSOCSESHOOPO FLORA CSCO COR OD OBR ODDODbLBHE

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Wee SSS ASOSASORS ORES OOF OR 8100407008066 66%

BSSSOOLRSESSESSSOSCEOPO SPP SSASHOSOL&EBAS OTS LSESE6O

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mame fie PEE 4 ag

P-241

dene ree oe a a a a a a 2 2 2 a 2 a

deere ee a 2 2 2 2 2 a a 2

CHOC HSHEHHEEHHEHOHHOSHOLHEHHOO OHHH HHO SEOHO EEO ELE ES

CHHOHLEHCHEHOHSEOHHEHOSHEHOHHOH CHOCO OH OLE EOE EEO EE®E

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ddd eee ee ee a 2 a a a a oe

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CHP HCHHCHHEHSHHEHOHG HOHE HEHH OE HEEHOHO SOOO EE BOB EEO OOS

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SCHPCHHHHEHOHHHHHHEEEHEHO HEH BEOEERE OLE EOEEO®S

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SHOPHPHHOSHFEHSCHOHSOH ERO OH EOE OEHEHEHHEOCBREHEOBES

SPOS HHOHEEHHEEHHEHOHEHHEH HE HLOH OHH ORE OHO E SELES

SHHSHHPHOSCHHSEHESOHOHLEROBORO SHO C HEHEHE OHOROO ACCES

SOPCOFCHOEHCHEHAEHOCHLHOBOH EHEC BHOSLE HOAOOKREDEECE

CPPCC HHHEHHHEHOHEHHHHOCEO HOBOS EE HOO OOOEBOEOES

tte eee a a a a a a a 2 2 2 ee a

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SPROOHCHFHOHHOHRSHHOFCHEFCOSFCOCBO LOBE ORHRECOHEOOOCEOEEE

CRPOCHESESSHHSHHPAOSOPASCEEHOHOROCSEOROBCOEBBOESOEOCSE

CPPS HHHSHEHECHHOHEOHOHHEHCHEOCOHOEHE REAR EOH EO EBEOEE

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SCHPSHHCFEOEHPFCHEROGHOHEEOSHCHOHOECHEHO HOR HHEO OEE

SPROSHKOCCeCSHOSCHVSAC RTOS eCSEOSE RES AbASC CBORD ASB OSBS Bae

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Transcript of proceedings held before the Hon. William E.

Doyle, U.S. District Judge for the District of Colorado,

on August 9, 1971, at Denver, Colorado:

a eS RAD Sen Oo ae I eee Ee

Testimony of Keith Anderson—direct ......... [23]

eee [28]

—redirect ....... [29]

Testimony of Roger B. Knight, Jr.—direct ..... [30]

Testimony of Bruce Alexander—direct ........ [33]

oe [36]

Prosecution exhibits :

EN Sea yoy ease lus s che ob dene hed be ears

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Order of the district court dated August 27, 1971, denying

plaintiff’s motion to reopen the record

Notice of appeal filed by the United States on September 24,

eae eevee eae ee eS

TeeeEeVOStateReRoeueeeo ne heer oye SV eae ee eee eae

Supreme Court’s Order of February 22, 1972, noting prob-

able jurisdiction

ooo eee ereeer reese ereereseeseereeeeeseeeee

ULM SALINE GOEL YONE ROE ERG EG ONO BEES RIO ST NEY

Page

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509

Puarintirr’s Exuisir 2

Interrogatory 1

State as of the present date:

(a) The name and address of each present bank and

non-bank subsidiary of Bancorporation:

Bank Subsidiaries

The First National Bank of 621 Seventeenth Street

Denver Denver, Colorado 80202

The First National Bank of 3100 South Sheridan Blvd.

Bear Valley Denver, Colorado 80227

The First National Bank of 10520 Melody Drive

Northglenn Northglenn, Colorado

80234

The First National Bank of 2350 East Arapahoe Road

Southglenn Littleton, Colorado 80120

Non-bank Subsidiaries

none

(b) The name and address of each bank for which Ban-

corporation or any officers or directors of Bancorporation

acting in behalf of Bancorporation has at any time applied

or inquired, formally or informally, to any bank regulatory

agency for permission to organize or establish:

The following three banks were organized de novo by

officers and/or directors of The First National Bank of

Denver, principal subsidiary of The First National Ban-

corporation, Ine. :

1. The First National Bank of Northglenn

10520 Melody Drive, Northglenn, Colorado

Opened for business—November 14, 1963

2. The First National Bank of Bear Valley

3100 South Sheridan Blvd., Denver, Colorado

Opened for business—June 15, 1964

3. The First National Bank of Southglenn

2350 East Arapahoe Road, Littleton, Colorado

Opened for business—November 30, 1964

Officers of Bancorporation discussed with the Regional

Administrator of National Banks during the last quarter

of 1969 the filing of a charter for a de novo national bank

Nifirieae. .

510

to he located in the Montbello Shopping Center. A pre-

liminary application for such a charter was prepared by

Bancorporation but was never filed with the Regional Ad-

ministrator. Bancorporation subsequently filed an applica-

with the Federal Reserve Board of Governors under Sec-

tion 3(a)(3) of the Bank Holding Company Act of 1956

as amended to acquire 80% or more of the outstanding

share of Montbello State Bank.

present subsidiary for which Bancorporation or any officers

or directors of Bancorporation acting in behalf of Bancor-

poration has applied or inquired, formally or informally,

to any bank regulatory agency for permission to acquire:

Bancorporation has applications pending with the Fed-

eral Reserve Board of Governors to acquire 80% or more of

the ovtstanding shares of the following Colorado banks:

The Exchange National Bank of Colorado Springs

The Security State Bank of Sterling

Montbello State Bank, Denver

Bancorporation did file an application with the Federal

Reserve Board of Governors to acquire control of The

First National Bank of Pueblo, Pueblo, Colorado, which ap-

plication was denied by the Board of Governors on Sep-

tember 1, 1970.

Bancorporation, through counsel, has discussed in-

formally with various members of the staff of the Federal

Reserve Board of Governors in Washington the advis-

ability and feasibility of acquiring 80% or more of the out-

standing shares of the National State Bank of Boulder,

Boulder, Colorado.

Puarntirr’s Exuisit 3

ANNUAL REPORT

THe First Nationat Bancorporation, Inc.

Bancorporation

Financial Notes

Directors

oe a er tt ee aS aaah esa

Letter to the Shareholders

ConTENTS

Consolidated Financial Statements

Parent Company Financial Statements ora

Accountants’ Opinion

The First National Bank of Bear Valley

Financial Statements

The First National Bank of North Glenn

Financial Statements

The First National Bank of Southglenn

Financial Statements

512

The First National Bank of Denver

Financial Statements

513

To Our SHAREHOLDERS:

On October 18, 1968 The First National Bancorporation,

Inc., which was incorporated under the laws of Colorado on

December 1, 1967, had acquired through exchange of stock,

controlling interests in The First National Bank of Denver

and its three affiliated banks. As of October 18, 1968, the

Bancorporation owned 99.67% of The First National Bank

of Denver, 89.44% of The First National Bank of Bear

Valley, 92.91% of The First National Bank of North Glenn,

and 88.60% of The First National Bank of Southglenn.

We are confident that the multiple advantages of mem-

bership in a registered bank holding company will accrue

to our four subsidiary banks and to the former stockholders

in these banks who exchanged their shares.

The principal advantages of such membership are: (a)

the competitive strength of the holding company itself;

(b) the ability of a subsidiary bank to retain its own identity

and operate autonomously as compared with a merger into

a larger bank, (c) the ability of the company to generate

funds for capital expansion for subsidiary banks and to pro-

vide with its own funds banking quarters for such sub-

sidiaries; (d) the facility of extending the 109 year banking

experience of The First National Bank of Denver to the

other subsidiary banks; and (e) a more ready market for

shares owned by the stockholders as well as diversification

of banking interests.

The policy of our company is to expand as rapidly and as

wisely as possible through the acquisition of other banks

in Colorado (preferably banks in those growth areas where

Bancorporation may make the most significant contribution

to Colorado’s economy and concurrently generate the high-

est profits for its shareholders) and through other legally

permissible investments and activities.

We believe that in 1969 legislation will be passed in

Congress to place one-bank holding companies under the

Bank Holding Company Act of 1956 and, at the same time,

expand the types of related businesses which may be or-

ganized or acquired by registered bank holding companies.

The Board of Governors of The Federal Reserve System

in a printed statement of principles released February 20,

1969, said, ‘‘one-bank holding companies and multi-bank

holding companies should be afforded equal treatment under

the lew with respect to bank and non-bank acquisitions,”’’

514

and that ‘‘registered bank holding companies should be al-

lowed to enter certain non-banking areas of activity, «peci-

fied in statute or agency regulation, which would facilitate

broader services for the public.’ We believe this to be a

fair statement of principles and, dependent upon resulting

legislation and consistent with our policies, will take ad-

vantage of each opportunity afforded us.

We are pleased that bank growth via the registered bank

holding company route is becoming well accepted through-

out Colorado as evidenced by the announcement of the pro-

posed formation of three additional companies. Others,

we know, are under consideration.

We sincerely appreciate the support of our shareholders

and of the many officers and employees of the member

banks. We earnestly solicit your continued support.

Sincerely,

/8/ Montgomery Dorsey

Moxtoomeny Dorsey,

Chairman of the Board

/s/ Eugene H. Adams

Evorxe H. Apvame,

President

Tue Finst Nationa, Baxconronation, Ixc.

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CONSOLIDATED BALANCE SHEET

(UMAUDITED)

Or cameen a

RESOURCES vee

Cath ad Chee (om Rarae rks Bad $1444.90

LD Government Congas Siete 2) win e21y0 17"

gens AV steed Donne a irre Pete 7) 4291900) 42, WA

Comgeeors A Feta a haar ows Mena 2) cn 70 2099

Onres Geturteas Mecte 7) e735 oo “

tetera 6 ae Sod AOSD 721A

Loart Less Reserve tor Lom Losses (ite H ease 28 708 99

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LiAmUUITIES

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0) Teme ‘ 00 waz 379477

lone 94 S21 minre

Fecerat bunts Purchased and Sac urtees

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Ser arcnders taety amon Pee

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DIRECTORS

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CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

oe) +a

OPERATING INCOME: 1968 167

ter. of and Fees on Loar sonssveccsccocccccssce © SUMIT.0E $ 17.952.142

teres! aed Unrdends on

US Government Cnn genes ccccseccscsccces §RSRRRES 2.501 824

Cengetons of Dates and Potted Gabawisionsn............ 1.518.674 1,327 969

Tew Oeyertenera : pa bb hiiigkiehadenbam 5.104.779 4.147618

owe iidcshibaveushenigbed ___ 3.552.633 ___ 2.447.008

Toms $ 35.050.078 $ 26.576.461

OPENATING EXPENSES.

Se wes 00d Beret indeshinderestdnssancavesesbunes 7,572 287 6544778

Peres Pratt racwe and Onhar tmgtoryen Benetits by 467 1.112.435

intern von Onperets 10.575,801 6.972.908

le 303 065 393.152

fet On cuperty - Bare Prema 914616 625.483

baergrert Parte, Cayrecator Verwenere 1.606.957 1,447. 970

GW sacntsssdetsescsncesecssnrnscezecessobossvessecsecceveees __ 4.178.473 2023553

Tota 1k Lessereeee 26,040,866 21.239.679

OPERATING WICOME BEFORE WiCOneE tax ‘ ddebatesees 9.009.712 7.136.782

INCOME TAIES APPUICAGLE TO OPERATING INCOME... its 4,186 468 ___ 2,801,746

WET OPERATING MICOME OLFORE tmOrETY wiTEREST. ss 4.822.744 4.255.536

SE EET sec secrbctdesersersoonescoes 33.033 24.780

MET OPERATING CAPOUIEG inne cece n nnn ecenes 4,789,711 __ 420,756

OM-OPE MATING AOCKTIONS (DE OUC TIONS)

WET OF PELATEO weCOMeE Taxes

OF 968 $408.919. 1967. S00. 704

Pronmwan on oan (nenes (Mote Fy $ (326699) S (313.175)

IN canes sednernsssscoredorecsccecs (83 430) (2 423)

Spat Aphenibhablaibedadebedinnsssseocesscocces 16.103 (10.115)

Mere oy et@rest on Man Oper gteng Mars 7.120 _ 3.067

Mat Mon Oper sing Oecue tory (322 646)

wet ercOme S 4402805 3.903 11

PER SHARE OF COMMON STOCK °

PN bacon orcdccsanpesoenessresavciresesese $322 $264

Seer ne come bdagscnnenhonns $2.96 $263

See Sones ty Comenictened | mene a testemeney

CONSOLIDATED STATEMENT OF

STOCKHIOLDENS EGUITY

(UNAUDITED)

DECEMBER 31

1968 1967

GAMANCE Jarwary t pedcevcevessecs»cecee © SAMUI DIS $ 37,420.993

BON, CorshSated Mat ine nee — Sebmaaicgabe 4.402.605 3.908.110

O8 OC TIO - Cash Oorends Decieres sseeecscueee (9,796,685, _(1,417.130)

BALANCE Oecomter 31 ee eeceeeenns § M2 99B093 $ 39.911.973

fre tees on Com gnd mse a anemone

SO +c

THE FIRST NATIONAL BANCORPORATION, IC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 1968

(UNAUDITED)

No specihe funding of accounting method for oas!

four subsidiary service Costs nas bron adopted and the amount

has been ac- charged to expunse may vary trom year to year At

interests basis The December 31 the unfunded value of vested benetts

financial statements 8S epproximately $3,000,000

5 BANK PREMISES AND EQUIPMENT

and ali subsidiaries All intercompany

; a Bevel Oe grec emer

December 31, 1968

Lana cee. S 406,120

cluded in the bal Buitoings and

acrevion of dizcount and

Ai. joa etry +l improvements .... 21.311.300 $7.1420%

2 were US Government Obinga- Furniture ano

of States and polit soe _ 2551456 1 475.2%

639.302. Obigations of Total $24 148 996 $5617 04

The Companics provide for depraciation of buvid-

ings and icasehoid improvements on a vira.ght ne

basis over estimates usetul lines varying from seven

700

6 MORTGAGES PAYAGLE

Certain are assigned a6 collateral to

mor.g7ges payabic The mortgages bear intorest at

rates rangu.g trom 4140's to 6%» ard are payable

$175,000 each quarter. including principal ant

mere ot

7. INCOME TAXES

income taxes afc provided based on tinancia!

accounting income adjusted for nontar atic roms

such as interest On obligations of Stairs anc

political subdivisions. The current your § prov's on

has been reduced by invesiment crearts of 570.591

allowable on the Federal mcorme tax fer

turn. There are no unused invesiment Creur> aval-

able to offset income tax of future years

= al ey

IE USET AMOS BWC RP ORA MOI, eG

\ BALANCE SHEET, DECEMBER 31, 1968

(PARENT COMPANY ONLY)

ASSETS

CURRENT ASSETS ~ Cash pels & 44773

RIVESTMENT 0 STOCK OF SUBSIDIARY BANKS - Rapenenting 0 Percent

Company $ interest in the underlying net assets Oanred

' The First National Bank of Denver - - Ors 412790 114

The First National Bank of Bear Valiey ees 69 44% 05.276

| The First National Bank of North Glenn ‘ , seoonse Gee 449.200

The First National Bank of Southgienn : 6 60% 313.916

OTHER - Stock issuance and organization expense

; (less amortization Of $2,292) oer nee ennnwnnnes +» 982010

TOTAL ae $42,785 243

LIABILITIES

CURRENT LIABILITIES ~ Accrued interest and tarzos bias 1008 219

| NOTE PAYABLE ~ Due October 31, 1971, interest payable quarterly at prime rate 185.000

| STOCKHOLOERS' EOurTY

Common stock, $10 par value suthorized, 3.500.000 shares.

issued and outstanding 1 468 58S $14 £85 80

Pad in surplus 27,154,577

i Retained earnings __ 457 6

Stockholders’ equity 42: 998. 093

TOTAL Z +» $42,708,249

STATEMENT OF INCOME AND RETAINED EARNINGS

FOR THE PERIOD FROM OCTODSER 10, 1966 TO DECEMBER 31, 1968

(PARENT COMPANY ONLY)

' INCOME FROM SUBSIDIARY BANKS

j Cash Onidends peesece PrTTy S$ 546,404

j Equity in undistributed earnings since acquisition hee $30,233

j Management and service fees eeOssecesevese __._ 24,000

; TOTAL 1,100,637

| €XPCNSCS

ee ee ene 2s . $6091

‘ Owectors tees soensenee GO

! Association dues , , 23441

Amortization ‘ , , , pose cose ROR

Interest " 1.320

! Otner ioove bees issttess ee

TOTAL ; , $ 21.136

INCOME BEFORE INCOME TAXCS 1079401

PROVISION FOR INCOME TAKES : s 6w

NE TINCOME ‘ 1076671

CASH DIVIDENDS PAID ___ $25. 005

RETAINED EARNINGS. DECEMBER 31. 1968 ‘ $ 557 66

NOTE The Company began operations Octobe: 16. 1904 upon -«change of a6 stock for stock of

einnhary Danks

—_

Accountaxts’ Opinion

HASKINS & SELLS

CERTIFIED PUBLIC ACCOUNTANTS

818 Seventeenth Street

Denver 80202

Ortston or Ixpepenpent Certiriep Pusiic Accountants

To the Board of Directors and Shareholders of The First

National Bancorporation, Inc. :

We have examined the balance sheet of The First Na-

tional Bancorporation, Inc. (Parent Company only—a Colo-

rado Corporation) as of December 31, 1968, and the related

statement of income and retained earnings for the period

from October 18, 1968 (date commenced operations) to

December 31, 1968. Our examination was made in ac-

cordance with generally accepted auditing standards, and

accordingly included such tests of the accounting records

and such other auditing procedures as we considered neces-

sary in the circumstances, except that we have not examined

the financial statements of the subsidiary banks.

Inasmuch as we have not examined the financial state-

ments of the subsidiary banks, and the Company’s invest-

ment in these banks constitutes the major part of its assets

and the source of the major part of its income, we are unable

to express an opinion on the accompanying Parent Company

only financial statements taken as a whole (nor does our

opinion, expressed below, extend to amounts included in

the financial statement captions entitled ‘‘Investment in

stock of subsidiary banks’’ and ‘‘ Equity in undistributed

earnings since acquisition’’ or the effect of transactions

therein on net income and retained earnings). However, in

our opinion, the accompanying Parent Company only bal-

ance sheet presents fairly in all material respects the other

assets and liabilities of the Company as of December 31,

1968, and the accompanying statement of income and re-

tained earnings presents fairly in all material respects the

other income and expenses of the Company for the period

from October 18, 1968 to December 31, 1968, in conformity

with generally accepted accounting principles consistently

applied.

Haskins & Sells

Denver, Colorado,

February 10, 1969

520

THE FIRST cee — OF DENVER

, .

ae e ols

iE “ a(n!

yt ' ial on

‘, m Aya: us

“ ! , | | Bas ag Cah, }

, $ [. ft’ Ne 4 " awsP

; a ae AM te

Vf Af iadl 9G,

AF IMS T tats 2tyAs G:s-1n tal Da Jasleel 4 ry 2 NI if 7 , ith ; Ya

cided Cobain | v ho” 1; " ‘4

\ \ $ 4 Zi \ ZN ; 1 %

A ie ‘ I aes ’ bat a, pp Uhm ram B eae

2 inoniene! Cent Bhiicie OF, coe! cso fn ee : » PP GP

eee Yige i poy ror aa

we ipo OO te

CONSOLIDATED BALANCE SHEET

FOR THE YEARS ENDED DECEMBER 31, 1968 AND 1967

DECEMBER 31

RESOURCES 1968 ¥ 1967

Js t velbnds sebnntueresan seks ateeseas has $157,768,234 $143,454 610

U.S Government Dc RineiSesluherdikreriseadaeseravearen 61,037,105 §8.567.038

Obligations of States and Political Subdivisions .................... 41,417,073 42,034,102

Obligations of Federal Agencies ............6 0c ce cece ce cccnceenes 6,000.000 2.000.000

bcc lbslels sibaivinsendabestsSsdesshessceses tons y 921,573 920.000

erica vatsnbespdvobsubee¥poneereteseste neers 1,400,000 2.150.000

DCRR Gp ahcabubdswhadebrysetonrsncvhecvesnseencaeresrdes 332,708,776 289.264.8622

NE nnn cigdbecnubosbrdveusetesenoenbery 15.059.918 15,456 957

Customers’ Acceptance Liability ........ 02 ccc cccccerrsecercvces 261,237 90 9863

Is nv skit cacervensvesvscvacsesioncesseve 4,703,435 4,341,163

acer Sib ehorhawskehed ced beaepeonensdsubéseceapedecs 4.468, .160 1 355 097

EE PE PES AR Pe $625, .759, 513 $559, 705, 630

*Alter Deduction of Loan Reserve........ 00... 000. e ccc eee ev eee $ 3.552.294 $ 3 463.699

LIABILITIES

its:

CL sdccasvapawrsatensesdbessersbodtensddbctvebaseve $330.634 463 $2795,223.415

inc; Usaasirh wns cihesenbevs sacesedb ene rapanueseesetsns 219,614,342 _214 107.292

DN chchebnicksVitebur ciesekysbonrassemnseven “550, 248,625 §09,395.707

Federal Funds Purchased and Securities Sold

Under Agreement to Repurchase .......... 2.20.6 cccccccceneees 21,614,607 -0-

OS 5s tessa sauverdeskkcs swab civeadv en 5,384,092 5.808.652

Accep Outstand eee MARue doatacep vans ebaniaer ie 261.237 90.993

ee NO, carp ysnsesecterscsianbeardseenoereere 1,614,638 1,517,325

ry edetei ss rncersknsserresunsvaresigestvpadcnecsys ___ 5,187,616 ___ 4.053.714

MINI ces i3cretsctecoved en cdnrseens $584.311.215 $520,656.53!

_ CAPITAL ACCOUNTS

Equity Capital:

Common Stock: 500.000 Shares Authorized and

SU NINE WURD o5 5 sc csveces recdectcvecesessieress $ 10,.900.900 $ 10.029.C00

or SSS Se St EE Ee ee a ee ere 20,000,000 20.090.0C0

Undivided Profits .......... 11,429. 709 oad wis

Total Capital ‘Aecount- . $ 4° Ana? $ ’

Total Linbilities and Capital £675,7.9,513 fey ’

_ —— st

BLURRED PAGES

THE FIRST NATIONAL BANK OF DENVER

CONSOLIDATED STATEMENT OF EARNINGS

FOR THE YEARS ENDED DECEMBER 31, 1968 AND 1967

DECEMBER 31

OPERATING INCOME: 1968 1967

ee I PMNS 5 co 57 pov kevoecnesecncceictsvarecve $ 20,912,503 $ 17,204.522

Interest and Dividends on:

U.S. Government Obligations ......... 2... .cccceeeceeeeee , 2,842,052 2.465.723

Obligations of States and Political Subdivisions ............ 1,491,168 + 1,325 226

Service Charges on Deposit Accounts 857,445 629.146

BPE OREN oF exasb cadcbdcedebenvevvass 5.104.779 4.147.618

Other ___ 2.454 636 __ 1423.418

__ 33,662,583 __ 27,395 683

OPERATING EXPENSES: |

IN ss car ncscdancesturcadueapireseesedtsineces 7.188.115 6.262.810 H

Pensions, Profit Sharing, and Other Employee Benefits ........ 852,713 1,085 050 ;

III sha caay ache cavdecesecnsesees bos h¥aVesn2 10,122,960 6.662.381

ET ooh deccertevinesccdcccsergedatvar 301,709 313,152 }

Net Occupancy —Bank Premises............... Pr “9 641,661 760.507 j

Equipment Rentals, Depreciation, Maintenance. —........ sees 1,568,645 1,416,419 j

CIN. Aes cdataiverssdsosysissviossdxkess)> >. ; scesecey — aneeD __ 1,900,292 |

Ma sarin el Sea NeT Ve rekon icecoovcvectxnsy « 24,889,546 _ 20402621 |

OPERATING EARNINGS BEFORE INCOME TAX............ seeserees 8,7723.037 6.993.022

INCOME TAXES APPLICABLE TO OPERATING EARNINGS ....... .. 4,127,050 ___ 2.840.458

SE ER I cc cnaliscitoiestravieedccntrserssece . 4,645,987 ___ 4,152 674

ne I ac boudywecundesssvessditeesesacs $9.29 $6 31

NON-O?ERATING ADDITIONS ~NET AFTER TAX EFFECT: i

(All sundry other items) .......-...66--0 eee eens Werecedereevese 38.825 12-90

NON-OPERATING DEDUCTIONS —NET AFTER TAX EFFECT: |

ee IN Nh cease bons aiueans apndssdibcasseevesdaxeioe 83.430 2.423 i

Transfer to Reserve for Loan Losses...................020005 F 266.208 293.259

CODE ic icxees Sakae Reo eV unex iia taeeanesssareeyersevnsavd _____ 19.975 2» Baer

Total Non-operating Deductions............... 369,613 318.690

NET NON-OPERATING ADDITIONS (DEDUCTIONS) ................. ___ (330.768) (306 759)

TRANSFERRED TO UNDIVIDED PROFITS .......... elapekitens - $_ 4.315.199 $ 3.846 624

Pe Pee SPU ID sec scbdccresedscngs estvenecs ss anbanees $8 63 $769

RATER ORS ARIF fe. (OMI NTO “2 “ eal mene -_— — —s}

—* vr

1920s PUREST WATIOW AL. HEA OFF dae is

CONSOLIDATED RECONCILEMENT OF CAPITAL ACCOUTITS

FOR THE YEARS ENDED DECEMBER 31, 1968 AND 1967

BALANCE, DEGHIUNG OF VEAR oo ics icsesesiscccvescvoes posedas

Addit = ' d from Stat

Deductions — Cash Dividends Declared

(per Share*: 1968, $3.43; 1967, $2.60) .................0006.

ee ache se saiky Vn ddbadtedne est eeeecoe neni

*500.000 Shares Outstanding

DIRECTORS

“EUGENE H ADAMS

President

"GB. AYDELOTT

Presidemt The Denver and Pro Grande

Western Rasiroad Company

SIONEY L. BHOCK. JA

Retired Semon Vice President

*"wW COLES HUOGINS

Executive Vice Presdert Mounier

lates Telepnone and Telegraph .ompany

“

FRANK A. KEMP

Revered Chavman of the Board

The Great Western Sugar

"JOHN M KING

THEODORE O BROWN Chawman tong Rerources Company

ee WILLIAM H KISTLER

ROBERT L CAMPR vesdont WM Kester St stonery Company

Vice Preitomt Sate way a inc rer W. MOORE

CLARENC ALY pater

Presiden’ ad dated HUDSON MOORE. JR

"MONTGOMERY DORSEY —

aman of tian Rowe

AKSEL MIELSEN

JOHN EVANS. JA nee el

Prewtem Larne ve vient Company frve itn ts Carn any

fom A FERGUSON. JN. J SIMS NUNMAN MD

Prewti nt Chr vom Heatly Comarsian Pryrcay Pyotto Cotornde

“RICHARD P. BROWN

Semor Vice President and Execute

Trust Otr-cer

“Merten Far utwe Commition

1968 1967

$ 38.839,099 $ 36,392 275

4,315,199 3,846,824

(1,715,000) _(1,400,000)

$47,439,296 $ 38,639.099

GFRALO H PHIPPS

President Gernid 4 Prepps inc

WALTER J FREDOVICH

Pred wich and Viard Attorneys

DONALD E PROVOST

Presidomt Stesr-s Hoger Corporation

HAROLO F SILVER

President. Saver Corporation

BARRY MOREY SULLIVAN

Pres:Som. Morey Re rity Company

RUSSELL T TuTT

tot Et Por a investment Company

an wate Sprngs Co'orsdo

MAHLON T WHITE

Southern Cotora 1 Banker

HONORARY DIRECTORS

JOHN EVANS. SA

Retired Honorary Charman

Wc KUNTZ

Ore ont Oe ‘tae “se

JIANALS A WOOUS

f prtetd @n8 Viet Atnneds

}

THE FIRST NATIONAL BANK OF BEAR VALLEY |

. ’

ae Ma ¥iova Sawn Rava en ae wa oe) ’

-Sogpaan pl cas

ele r stall | \ é

' (| \, eR ‘, afranN..,, ‘s G ‘|

a ~t ther

POET ee re " £043 %. ie 2

meee CH GpAE tite Says eee SG

SURGPRA ERY il) iviiigs > a is Pe.

iL . NER os to ee

CONSOLIDATED BALANCE SHEET

DECEMBER 31

RESOURCES 1968 1

CO Ue NN cco sds ccccecacccpcvesunscseeverssssesnecd $ 628,731 $ 638,275

U.S. Government Obligations .... 0.00.6... cece eee e cece eee eens e- .+- 1,269,658 1,208,621

Obligations of States and Political Subdivisions............... -...0. 656,281 210,919

Federal Reserve Bark Gok ....5.0ccccscccvcvcsnevccsdscsvscssccsese 12,450 12,000

PAIR Fr ikc conan vinwads PWceseenrescosecsviciescegnesestsbsssseveses 5,739,660 4,102,607

re FD BG TE i osc cc ctccccverecpesevccdscascsvecsecve 297,144 295,815

Income Earned, Uncollected ............6.cceceeeeeeee TTTTTT TTT 53,595 37,168

a eine trina les as poses seis ovetsubvesbscosndascsvensenss 4,237 ee |

Total ReSOUrces............. sce eeceeeneeeeneeens S 8,661,756 $ 6,505,634

*Atter Deduction of Loan Reserve.............ccececeeeneneeeees Pree $ 88,103 $ 49.790 |.

LIABILITIES |

Deposits: |

(6) DOMMBAG osc ccccccccvcccrcceccessccesvesvessvescvccsorsvesoens $ 3,460,495 $ 2,434,660

PW ich veveciethsvendencaipiivedcucusseviocsesvsvavetnesess _ 4,431,721 __ 3,257,160

WD ci sdavposvdsincarcyasaldbigeyayeed. weave $ 7,912,216 $ 5.691840 |,

Mortgages Payable... .csccrscccccrccccvevvsveccsccces sesevevvseecs 175,000 175,000 |

Income Collectod, Unoarned.......... 5.66 scenes yy 155,575 55,021!

QUOT LIMDNNOD 0 ioc iccvcvcriccscrcrecsen rperccevenscvevenecion see ____ 54,030 ___ 40.515

FOR LING 56s os rcvccrcsscereegessercessyss $ 6,295,621 § 5,962,376

CAPITAL ACCOUNTS

Equity Capital

Common stock: 275,000 Shares Authorized and

Cy FOU FT WINNS ees ccececcctescasnccecenizesesesess 275,000 275,000

Fis oeoeepbs Tas t bae rade sNevaciwhe5 hts tersvecsccebedeoave cies 140,000 130.000

UNGivIdEd PrOmtS. 0... ..cesccccssvecscccvcvseveccesencesresssseneees __ 149,935 12: 468

Total Capital Accounts .. 0.1... ce cece es voasers B. SO2989 S 844,°tn

Total Liabilities and Capital. .....6. eee. eee SF BCGNTSS $ GLO "s

Ti ai oh SC le RO RR ee et, gee 5 | ee -_ — wie

RI ltIiRmPONM DArrc

NqMNE STHERIS hes edit y Seg ME Sith eee

CONSOLIDATED STATEMENT OF EARNINGS

FOR THE YEARS ENDED DECEMBER 31, 1968 AND 1967

OPERATING INCOME: 1968 1957

tN IE SiS se oe. cucvarcinderevecksed sceuKedes $ 398.206 $ 302.686

Interest and Dividends on:

NI ss cyers aes stuehewss aebhupnanesesns 60,813 12,749

Obligations of States and Political Subdivisions ‘ 16,643 1,653

GT screen spe Creer cttnckdévensceseerdvecverescersnys soe _ 916,138 _ 89,252

i Ss Ch TNS OW b's 00s 406100 6Ts ade e se RNs cd aa EDDA OD $ 593,800 $ 406.340

| OPERATING EXPENSES:

INL 5 6 Ao bak contnveavnvisbacsavddeayecvatusesnase 150,691 104,122

Pensions, Profit Sharing, and Other Employee Benefits............... 15.584 12,119

ER PON ETPTT Ere eT EPC PEET TEC TE TT To 5 118,485

j Interest on Borrowed Money................0.00005 eves ' 8.750

| Net Occupancy — Bank Premises.................0.00005 } 24,777

; Equipment Rentals, Depreciation, Maintenance. ; 11,283

' Se reas waste eds ok oscsensdunsntcsyedssaecs 107, 68.312

' MN areal ren WCaNchcsakses Siccbebs Cech eainsvaKes $ 502,810 $3 347, P48

i OPERATING EARNINGS BEFORE INCOME TAX ............-000 00 eee eeee i 58,492

| INCOME TAXES APPLICABLE TO OPERATING EARNINGS................ ___ 19,018 ___ 20.953

j NET OPERATING EARNINGS...................cceceeeeeeee Pe ie 37,539

: Per Share (275,000 Shares). $.262 $137

NON-OPERATING ADDITIONS — NET AFTER TAX EFFECT

' PR OURIY DHT HOWE). ovis cis ccc vcccnsccccccccsenscesrevecv esses en i Aa eee

NON-OPERATING DEDUCTIONS — NET AFTER TAX EFFECT:

* Transfer to Reserve for Loan Losses ................ 0c eee eeeeceee *.. 30,200 12,220

; MAYS cNAke drSND ve DNA Tey bee isrix te tisyeVshanenss pd ivbcoonscekne’s _712 i 40S

I Total Non-operating Deductions..................... $30,912 $12,363

| NET NON-OPERATING ADDITIONS (DEDUCTIONS) ...........6.. 060000 e ee __ (30,870) __ (12.363)

TRANSFERRED TO UNDIVIDED PROFITS ....00.0.0 0. cece cee eee $ 41,102 $ 25.176

5 Mn UMNPUE NUPIUGUD HUIBED vies ci. sd20v¥ fe sues taeda vensveseeiaecstta $.149 $.092

i CONSOLIDATED RECONCILEMENT OF CAPITAL ACCOUNTS

' FOR THE YEARS ENDED DECEMSER 31, 1968 AND 1967

} 1960 1957

ee, ED MON PIE aiys pedGs i sbdivioens doen decked vesaxees $ 544,458 $ 533,032

Additions — Transterred trom Statement of Earnings. ... ..... seaee 41,102 25,176

' Deductions — Cash Dividends Declared (per Sharé*

' SD S555 eiareanesevavssStbsoburssduevernenes ___ (20, __ (13,750)

es a eH a wild bad hve V5.0. b9due eke Us b¥598 Chee ¥aNeS 564,93 $ 544 458

*275,000 Shares Outstanding

DIRECTORS

i Sane Ee Foret National FICHAND C MECKLEY

“EUGENE 1. ADAMS ’ . vie ete

Chan wn ot the Bowd HORNY O QWNDER GoM MULLIN

BUCS D. ALEXANDER aie eas Ale goes aii tai

Sena Vv, F Prosgemt, The Fuel Matione! ROBLANT p BOUCHER JACK M MUS (

Rand of threw Vee Proeetomt The Tet Nehenal Anuster soot Tre fot tine

Wee © ns any Bane of Cowes Cet ttn

re amt aad Cashier, Tho Fist EDVARD tb CLOSE, JA THOMAS PT O HOUNKE

ornad ng wale ee ee a ver foot the fet a ee a

“Re: iqned Hobruary 21, 1969 Tanne wn of the Dowd ogi! ‘ .

res OUT COMESERCUNE TTI Ur 9

BALANCE SHEET

DECEMBER 31

RESOURCES 1968 1967

Cash and Due from BankS...........cseecscsccceeeercerece $ 800,523 $ 567,325

U.S. Government Obligations .......... 6.6. ce ccc e cece eee eees ganenee 1,223,124 1,335,227

Obligations of States and Political Subdivisions............. 445,679 50,033

Federal Reserve Bank Stock....... 66. e cece cence een eenees 10,050 9,750

PAQONE oc ccccccesvvvecccesceccecccccevocsccecenesdvecesees 4,937,011 3,648,233

Bank Premises and Equipment ........6. 666s cece ee ence eee 155,999 109,113

income Earned, Uncollected . 1... c cece c cece eee e eee eeennee 49,046 27,563

Other ASSOtS. 0... eee cece cece eee eneneeennretenneesanees 4.691 ae

Total Resources ....... 6 ce eeeeeeeeeees $ 7,626, 123 » § 5,763,075

*Atter Deduction of Loan ReServe..... 6.06... cece cree eeeees $ 54,199 $ 30,379

LIABILITIES

Deposits:

(@) DOMANG .... 6c c cece eee e rere ee eenneneeeeenenenee $ 3,091,416 $ 1,973,382

(DB) THMD . once rer rcr ere eeereeeeeeeeereeneerennseeonenee ___3,878,074 _.3,220,017

BOO 5c bn ts vackcndavecccossndetveresne a 969, 490 §,193,999

Income Collected, Unearned ... 66... cc cece c cere ween eee nes 120,370" 61,327

CUNT ERIE sc cic a ccccuscrccsvedees esenees Mi ka eE CaN ___ $2,783 ____ 41,298

Total LIODINUCS 0. ccc recrsccrccscccccees $71 7, 142,64 643 $ $ 5,296.6 624

CAPITAL ACCOUNTS

Equity Capital

Common Stock: 212,500 Shares Authorizod and

Outstanding, Total Par Value «0.0.6... c cece rere ee ees $ 212,500 $ 212.500

TID. occ ccdteccvertepivccvccsccccucscsecvecsseccvetens 122,500 117,500

Undivided Profits. haus daekee sere RG eaves Drcevesaeesoervesnvas 148.480 123.35)

Total Capital Accounts .............65- .$ 483,480 $ 453%5!

Total Liabilitics and Crepital

$ 7,626,173

EE a wee

$ $,749.97

*Rosigned Fouruary 19. 1949 NEvected Chairman of the Donrd,

Februnry 19, 1909

VUSUE PRS INA. RA ar tas ist title

STATEMENT OF EARNINGS

FOR THE YEARS ENDED DECEMBER 31, 1968 AND 1967

OPERATING INCOME: 1968 1967

Le ee SD sevcveec tape eneud i ced beeerst sve by bscere> $ 357,100 $ 299,000

Interest and Dividends on:

OB. GOVOITOT GUNGRIIOIG 60.05 ci vive cscencescvscrnvscesscvcs 75,983 12,921

Obligations of States and Political Subdivisions... .............. 10,663 $85

UE Cae VaN UL ecMiupesuvinuareoSiblivebvexerrvirditesrceressivrseves __150,299 123,515

PS c bv Ube isda eePerisin tasecsceei ies xeruseunes $ 594,245 $ 436,021

OPERATING EXPENSES:

III geet a diwirxs vedeses dub uceecans’ PudunOONOCwebe 156,125 126,768

Pensions, Profit Sharing, and Other Employee Benefits............... 13,866 12.294

EES AUGasSicowas tress Uns ey COR bwtradvens skevtuens 184.086 125,636

Pee ES PURINE os cacy eccrcccduxntuvadenpysusctnesens 37,69? 26.966

Equipment Rentals, Depreciation, Maintenance .................00005 13,309 11.329

QIN. av cevnvnccccrescsevccnevessccesccvessesrvsriscreccosevsccess ___ 99,963 ___ 82,078

SONS aS tinted ap eiexsvewiweeidu aba cccenasescenve $ 500.041 $ 385.071

OPERATING EARNINGS BEFORE INCOME TAX ....... 0.0.00. c cece eee eee 94,204 $0,950

INCOME TAXES APPLICABLE TO OPERATING EARNINGS................ 24,455 __. 19,368

ee es goss ue cubase skid wild 6onveresvarsesearcnies 69.749 __ 31,582

Ps I doin Fas es ow cbdvebsddebecedanentvevene sce $.328 $.148

NON-OPERATING ADDITIONS —NET AFTER TAX EFFECT

(all Sundry OthEF iOMS) ... 2... cece cree rscrecscrerecesceesecseveness 162 Sans

NON-OPERATING DEDUCTIONS — NET AFTER TAX EFFECT:

DE Oe CUNT COT CNT RUNOD. oye cv estdiseceosnveceusersapers 21,375 4,742

UU vicswansy nce su sueenacexPunetancn ti ecked cus yheveassesiavvatees ____ 2,469 weveonr©

Total Non-operating Deductions..................... $__ 23.844 $__ (4,742)

NET NON-OPERATING ADDITIONS (DEODUCTIONS)..................00005 (23,682) ___ (4,742)

EARNINGS BEFORE EXTRAORDINARY ITEM............. 0.0000. c eee po 46,067 26,840

EXTRAORDINARY ITEM

income Tax Credit Resulting from Operating

LOSS COPTYOVOFS 20.2... e cece teen ccc e es ensenscenecenecesceeeres pin 5.335

TRANSFERRED TO UNDIVIDED PROFITS... 2. ccccccvesessccsee secves $__46,067 i 32 11 75

Pe ee EE NINN Gal d:i sox ux<s edn sb accede sbesiueviasdereent $.217 $.151

} RECONCILEMENT OF CAPITAL ACCOUNTS

FOR THE YEARS ENDED DECEMSER 31, 1968 AND 1967

| 1968 1967

j Le, IEE CP WER Go civ ectivvusvuavevscsendyerecc oveaees $ 453,351 $ 431,601

i Additions — Transferred from Statement of Earnings .............06045 46,067 32.175

i Deductions ~ Cash Dividends Declared (Per Share’:

Ss a SE EG CGS bun c Cher aheursvesntesdrsbaredeevinan __ (15,938) (10,675) }

| BALANCE, END OF YEAR... .......ccccceceeeee oes _ Raa a ate . 483.480 $459.55: |

| *212,500 Shares Outstanding |

DIRECTONS |

DONALD FERGUSON ROGCA W. SMITH. JR

Secretary Strawn Reaity Corporation Pres tint Security Tite of Adams County

“EUGENE HW ADAMS GLENN RP. HAEFLIGER HAROLD C. STILLMAN, JR

Charman of tte Bowed Vice Presidont Prasidont, Western Pavi vg Construction Company

RUCE DO ALEXANDER CLARENCE LILLER, JR ICARROL | STURRS !

emer Vow tro gatent The Feet Mettene! Sere Vee Poovdont The Frat Manone See Pou lat the Bayt Manan

Hank of Denver Bant of (vnver Rare ot oo

HAYMONO A DANKS JONVON PERLMUTTER WESLEY J WATSON

Fortine: Horn ar 6 Gor oy Attorneys Vice Presiden! Pert Mark Homes ine Fee utee Vion Presiant

re Ti 209.000

Ss phim $s ‘s3077

& 1679468 $1906303 |

2.762% me ee

3.006.719 28:7 606

33741 734

240 16675

8 3.914 so § 28°) 097 ;

175.000 1790

109 409 109 0%

179.2% sas om

$6 »ian +

$474 $2.

+— -— wee

BLURRED PAGE:

em -

ots a

j | or ee Df +e, 2 $ og : on

i STATEMENT OF EARNINGS

FOR THE YEARS ENDED DECEMBER 31, 1968 and 1967

| OPenaATN® WCOWE Tee

| interest 0nd bees on Loans § 718.087

terest ad Owmionds on

| US Government Othgevons 19%

‘ Cates _

5 ' Tota _ ne

J OPLNANING 1 IT NETS

| Dadanes and Bonyre. 111%

1 Peowmons Protd thaung 0nd Other Emiinyre Ben tas 7.304

t interest on Oepotas ~246

| tet Oo y ~ Bare & 14.47%

i tevoment Kentats Depreciation Usntenance o7s

pret Als

i Tots $ 20787"

OPEIATING LARORNGS GET ORE WiICOME TAX aay

, COME TAXES APPLICABLE TO OVERATING EARIONGS 19,49

} (MET OPERATING CATHENGS 33092

Per Snare (250 GOO Snares) $192

| | NON OPERATING ADDITIONS ~ FT AFTER TAX EFFECT

| (Ai Gundry other dems) —

j NON OPERATING DEOUCTIONS ~ WET AFTER TAX EFFECT

j Transter to Reserve tor Loan Losses eo

} Ones 2 yey

j / Tota Non oper ang Deductons ae

i / MET HOM- OPERATING ADDITIONS (OLOUCTIONS) _ een

, EARIONGS OL FORE EXTRAOROMARY ITEM 243

: EXTRAOROWARY ITEM

bu ome Tas Creed Resting om Operating

Lows Corryovers a ;

TRANSS ERREO TO UNDIVIDED PROFITS $ 74.96

PLA SHARE (260 900 Graves) $097

RECONCILEVAENT OF CAPITAL ACCOUNTS

1969

CAL AHA BLGMNNG OF YEAR $ 379°)

AAd.0ns - Veansleried tom Sisteram of Larnngs 44.3%

BALANCE END OF YEAR $ 254308

DINECTONS

ona . ° Gay aa “

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, , «

‘tv ’ ries te writ sw Be

, * foctuw ‘ , —— " ‘

‘4 "OD PA te see EL) Ora we

. d ’ “ee . fee

vw.) a Oe

FOR THE YEARS ENDED DECEMBER 31, 1968 end 1967

“

‘

oer

$ 153 990

oan

7004

$1 0/8

272

39703

208)

§ 10808

“ye

64»

26 676

$106

9647

§$ ee

2647

$ 279993

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et ; Rie | qt ’

2 eae: *.t SHE

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tc ; Sy 7 ’ )

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POCO LOE OG erate

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— roemnenr A

BLURRED PAGES

Prarstire’s Exurertr 4

Auexaxper Deposition

The following excerpts are offered in evidence by plaintiff

from the deposition of Bruce D. Alexander, President of

defendant First National Bancorporation, Inc., taken by

plaintiff November 18, 1970. Each excerpt ix preceded by a

reference to the page and lines of the transcript from which

it is taken. Questions are by government counsel unless

otherwise noted.

(p. 2 line 13-—-p. 4 line 5)

Q. (By Mr. Schoepke) Would you state your name for

the record, please.

A. Bruce D. Alexander.

Q. Where do you reside, Mr. Alexander.

A. 290 Dexter Street, Denver, Colorado.

Q. What ix your present employment?

A. President of the First National Bancorporation.

Q. I« that the same organization that is the defendant in

the matter concerning which we are now holding this deposi-

tion?

A. Yes.

Q. Now, Mr. Alexander, the plaintiff in this matter served

on the defendants a set of interrogatories. And I direct

your attention to Interrogatory 30, the Answer to which

was prepared by you according to a note at the bottom of

that Interrogatory. I note from the Interrogatory that

prior to your association with the bank holding company

you were with First National Bank of Denver in two eapaci-

ties that are listed here: head of the correspondent bank

department and also head of the commercial loan depart-

ment.

I wonder if you would give us a little more of your back-

ground from the time you entered college and went out

into the world.

. A. First of all, I was never head of the correspondent

bank department.

I went to Williams College in Williamstown, Massachu-

setts in 1941. In 1942 I went into the United States Army

Air Force, from 1942 to 1945, at which time I joined the

United States National Bank of Denver where I worked for

four years, leaving there in 1949.

; During the time I was with the United States National

532

Bank I primarily worked in the loan department and the

credit department. Then I went to work for the First

National Bank of Denver as assistant cashier in the business

development department for several vears. Then I entered

the correspondent bank department of the First National

Bank in Denver in about 1951 or °52. T remained there until

1967, at which time I was assigned to the president of the

bank on special duty to form the First National Bancorpora-

tion.

Upon completion of the application to form that holding

company, I was assigned as the senior loan officer of the

First National Bank of Denver, which position T held until

September of 1969, when I was elected president of the

Bancorporation and assumed that job on a full-time basis.

(p. 5 line 19—p. 7 line 5)

Q. (By Mr. Schoepke) Now, I believe you said a moment

ago that when you considered this matter of organizing

the bank in Northglenn you came to the conclusion that it

would be a good business investment. Was that the term

you used?

A. Yes.

Q. What led you to that conclusion?

A. Well, the developers, Perl-Mack Construction Com-

pany and the Perl-Mack group were very successful home

builders, shopping center builders. The Northglenn area

was obviously going to be a good development area in metro-

politan Denver. The projection, as I remember it, was that

some 40,000 people eventually would be living in that area.

It justified the organization of a bank and it just seemed

like a good business investment.

Q. You mentioned a projection. Could you tell us what

if any other factors you considered in determining the

economic prospects of this area?

A. Well, primarily it was the projected growth in the

home building in that part of northern metropolitan Denver,

plus the fact that there would be a regional shopping center

in which a bank could be located. And so it was primarily

the two things together. And in addition to that, of course,

the First National Bank of Denver, like other major banks

in non-branch banking states, had seen an exodus of their,

you know, deposit customers going out of the downtown

location. It was difficult for us to follow those customers to

LOIERELS PEO OLE OIE LOI Re scene eld ‘ /

——

533

the suburbs and wherever they went. And we obviously

were interested in trying in some way to follow our eus-

tomers as they began to move out of the downtown bank.

Q. Would you say that the Northglenn area was an eco-

nomic growth area?

A. Well, it was pretty much of a bedroom community as

such. There was not an awful lot of industrial business

in the Northglenn area at the time we started the bank out

there. And up to the present time there hasn’t been too

much business out there with the exception of the tremend-

ous regional shopping center.

(p. 9 lines 5-16)

Q. (By Mr. Schoepke) All right. Now, did you conduct

any investigations of the Bear Valley area at the time

a decision to organize it as an affiliate was made?

A. We dida’t do it ourselves, but we took the surveys

and all the information which the Mortgage Investment

Company group had themselves. In other words, they were

the major developers of that shopping center and also the

Bear Valley residential area. So they had many statistics

which were sufficient to justify, in our own mind, that it

again was a good business decision.

Q. Was it agrowth area?

A. Yes.

(p. 10 line 10—p. 13 line 2)

Q. (By Mr. Schoepke) Did wou conduct any economic

studies of the Southglenn area?

A. Again, we used the construction information from

the surveys which the Perl-Mack people had used. I think

in that particular case we did use a Denver research insti-

tute who made a partial survey for us that we used in our

application.

Q. Did you reach the conclusion that the Southglenn area

was a growth area?

A. The Southglenn area had the potential of becoming

a good growth area. It was not the same degree of growth

area in any manner or means as Northglenn or Bear Valley

was, as is evidenced by the slow growth that Southglenn

had taken over the last three or four years. But generally

speaking Denver was growing north, south, east and west,

534

and in due time there was no question that Southglenn

would be a growth area, which is now the case.

Q. In conducting or considering the characteristics of

the Northglenn, Bear Valley and Southglenn areas, did

you at any time take into consideration the number of

people in the area that might be needed to support a new

bank?

A. Yes.

Q. I take it since you went through with the organization,

you did it on the basis of your conclusion that there were

enough people to support a new bank in that area?

A. Yes.

Q. Are these three subsidiaries now making money?

A. Yes. Northglenn is a good, profitable bank. Bear

Valley is a good, profitable bank. Southglenn is doing

reasonably well. It’s not making as much money as the

other two at the present time.

Q. Just for the record, Mr. Alexander, T direct your

attention to your Answer to Interrogatory 1, which indicates

that the First National Bank of Northglenn opened for

business on November 14th, 1963; the First National Bank

of Bear Valley opened for business on June 15th, 1964;

and the First National Bank of Southglenn opened for

business on November 30, 1964. Now, I would like to ask

you now how did it come alyout that the First National

Bancorporation of which you are president was organized!

A. (Consulting with counsel) Going back to some time -

in the 1950’s—and I’m not sure what the dates are. If

you want them I can get them for you—because of the

exodus that I spoke of a short time ago of the personal

accounts from the big downttown Denver banks into the

suburbs and the inability of tthe banks like the First Na-

tional Bank of Denver to follow their customers to the

suburbs as the cities grew, management of the First of

Denver had taken the position that branch banking could

be a valuable asset to the growth of the State of Colorado

and be in the best interest of banking and people in the

community. Management agaiin of the First National made

an effort to try to get the sitate law changed permitting

either limited branch banking in the metropolitan areas

or eventually preferably state-wide controlled branch bank-

ing.

In two particular instances: the matter was referred to

the Colorado Banker’s Association convention. And in

—,

one case a study was made of branch banking. And in both

eases the end result was that the law was not changed and

the matter remained as it was in Colorado, a unit-banking

state with no branching permitted.

Concurrently at that time, in 1958 and 759, in that area,

Western Bancorporation bought three Colorado banks and

Denver U. S. Bancorporation was formed and began ac-

quiring banks throughout Colorado. And in 1967, because

of this trend and beause of our desire still to expand and

to do a better job, both profit-wise and also banking-wise,

and to follow our customers, we also made the decision then

to form a registered bank holding company. That decision

was made in May of 1967.

535

(p. 16 lines 1-12)

Q. (By Mr. Schoepke) Now, at the time that you were

advocating branch-bank legislation, did your bank have

any plans, if branch-bank legislation was passed, did your

bank have any plans or contemplate any movement out-

side of the Denver area?

A. We had no specifie plans insofar as branching out-

side the Denver metropolitan area, but it certainly was

our intention to do so, depending upon what the legislation

might have been.

Q. Had you formulated any plans as to whether you

would proceed by acquiring other banks or by organizing

new branches?

A. We had not gotten that far.

(p. 18 line 23—p. 20 line 8)

Q. (By Mr. Schoepke) Now, referring also, Mr. Alex-

ander, to Interrogatory No. 34, the second page, first para-

graph, ‘‘ With the recent decision of the Bancorporation to

become a state-wide organization, the opportunities for

further de novo ‘branching’ will be considerably broader.’’

Would you tell us what coverage you would consider

necessary in order to constitute yourselves a state-wide

organization?

A. I think we would like to have a bank in the major

cities of the State of Colorado and in the northeast farming

section of Colorado, the Arkansas Valley, portions of the

western slope, especially those areas which are so highly

536

devoted to the skiing and recreation areas and the mining

areas. Generally those areas where the Bancorporation

could serve the people in it and the industry of Colorado.

Q. Now, I gather from that first sentence of the first

paragraph on the second page that you have not ruled out

the possibility of de novo expansion in your overall plan.

A. No, we have not.

Q. In this respect, I notice in that same paragraph that

reference is made to the fact—and I read—from the second

sentence of that first paragraph on page two, ‘‘ For example,

attendant upon the acquisition of the First National Bank

of Greeley, Bancorporation has obtained an option and is

actively considering the establishment of a new suburban

bank just outside Greeley.’’

I wonder, would you tell us something about that option,

to whom it pertains?

A. The directors in an informal manner had an option

to acquire one of two sites in the southern Greeley area

which was adjacent to the large proposed shopping center.

May I ask Mr. Gilbert to mark it down, beeause——

Q. Well, we can ask him that. Do you know where that

is located?

A. Yes.

(p. 21 line 13—p. 25 line 14)

Q. (By Mr. Schoepke) Could you locate where this option

is to which you refer in Interrogatory Answer 34?

A. It is on the southeast corner of highway 34, the by-

pass, and 23rd Avenue.

Q. And from whom was this option obtained?

A. The option ran from the owner of the land to the

Monroe Corporation and was assigned by Monroe Corpora-

tion to Bancorporation.

Q. Do you happen to know, are there any plans for

development of this area?

A. A proposed shopping center east of the site marked

there, which that site is a part of.

Q. Is this option in written form?

A. The option from the land owner to Monroe Corpora-

tion is in written form. The assignment to the Bancorpore-

tion has not yet been affected.

Q. Are you familiar with the Monroe Corporation?

ROO TOES IRA tT SOY IED LO URL OMER, Se EMS OP pe no bye 9 GER sy R > a> yt

——

537

A. Yes, sir. It’s a wholly-owned subsidiary—or it’s a

wholly-owned corporation of Mr. Robert Gilbert, president

of the First National Bank of Greeley.

Mr. Scnoepke: Off the record.

(Discussion off the record.)

Q. (By Mr. Schoepke) Now, would you care to correct

your answer?

A. The corporation and the stock is owned by Mr. Robert

Gilbert and his wife.

Mr. Scnoerxe: I will tender Alexander Deposition Ex-

hibit No. 1 in evidence.

I wonder if this would be a good time for a short break.

(Short recess)

Q. (By Mr. Schoepke) I have been meaning to ask you,

Mr. Alexander, going back to this option, just what is the

nature of the option.

A. The option generally provides that the Monroe Cor-

poration can buy a certain tract of land adjacent to the

shopping center, and that the Monroe Corporation would

see to it that the bank was organized within a certain period

of time. I think it’s about within a year by—I think you

have a copy of it—but within approximately a year a

commercial bank would be started.

Mr. Scnoepxke: Off the record.

(Discussion off the record.)

Q. (By Mr. Schoepke) Well, the reason I’m asking you

these questions, Mr. Alexander, is that the Interrogatory

Answer states that arrangements have been made—this is

the last portion of the first paragraph on page two—

arrangements have been made for assignment of the option

to First National Bank of Greeley should this acquisition

be enjoined.

Now, just what is the status of this option? Does the

‘ First National Bancorporation have it, and if so, in what

form?

A. The option provided that this was an informal agree-

ment between the directors of the First National Bank of

Greeley, as I understand it, with the Monroe Corporation,

that should the directors decide to organize a bank and

exercise the option, that they would do so. There is no

re ae

s9'

538

agreement, as I understand it, for the option to be exercised

or for a bank to be organized. If we are successful in

acquiring the First National Bank of Greeley, we felt it

only proper that we take over that option which was in

effect. And if we are not successful in acquiring the First

National Bank of Greeley, we wanted to give back the

option to the Monroe Corporation at their request.

Q. Well, now, what is the nature of this agreement he-

tween your organization and the Monroe Corporation?

A. At the moment the option has been sent to counsel

for the Bancorporation with the request that assignment

be drawn up transferring that option to us. We have a

verbal agreement that we will reassign it to the Monroe

Corporation if we are not successful in acquiring the First

National Bank of Greeley.

Q. Now, directing vour attention to Greeley, the First

National Bank of Denver has, according to the application

filed with the Federal Reserve Board, a loan production

office in Greeley, is that correct?

A. Yes,

Q. I wonder if you would tell us what that loan production

office does.

A. In the summer of 1968 the First National Bank of

Denver acquired the mortgage-servicing rights of the Mort-

gage Investment Company. At that time the Mortgage

Investment Company had a loan production office in Greeley

which was, just as it implies, a small office, I think of two

individuals and a girl who takes applications for real estate

loans. And these applications now are sent to the First

National Bank of Denver for review, approval, and then

are returned to the loan production office. No loans are

closed there. No money is disbursed there. It’s strictly

just an interview office.

Q. What kind of mortgages are handled in that office?

A. Generally mostly they’re construction loans, long-

term real estate loans generally made in that part of

Greeley and Weld County.

Q. Does this office do any mortgage servicing in the

sense of collecting payments?

A. No.

Q. It merely solicits business?

A. Yes, just a loan production office. It just solicits busi-

ness, and it has not been profitable. It has been our general

intention to close it.

PIF Ler ene >

539

Q. And on whose behalf does it solicit.

A. First National Bank of Denver.

(p. 25 line 22—-p. 27 line 23)

Q. I would like to direct your attention, Mr. Alexander,

to the negotiations preceding the Greeley agreement which

led to the application to the Federal Reserve Board for

First National Bancorporation to acquire the First National

Bank of Greeley. In this respect, I will direct your atten-

tion to Interrogatory No. 32, your answer, paragraph B.

The first sentence indicates that the initial discussions were

instigated by Mr. Robert Gilbert, who called Mr. Eugene

Adams, president of the First National Bank of Denver,

to determine whether or not Bancorporation would have

an interest in acquiring 80 per cent or more of the out-

standing shares of the First National Bank of Greeley.

And after discussions among the officers of Bancorporation,

Mr. Adams called Mr. Gilbert, indicating that Bancorpora-

tion was interested in discussing the acquisition of the

First National Bank of Greeley.

Now, I would like to ask you, were you in any way in-

volved in the discussion among the officers of Bancorpora-

tion which is mentioned in this sentence of the answer that

I just read,

A. Yes.

Q. And when did this matter first come to your attention?

A. Let’s see. I guess it’s February or March of 1969,

Q. Just to refresh your recollection, paragraph A indi-

cates that all meetings were in March of 1969. How did

this matter come to your attention?

A. Mr. Adams called me after he had talked to Mr. Gilbert

and asked me what I thought of the phone call and whether

I thought we should be interested in having further diseus-

sions with Mr. Gilbert.

Q. And did you have discussion with any other officers

of the Bancorporation concerning the maps?

’ A. I think it was a matter of principal participants in

the meeting where Mr. Adams and Mr. Dorsey, chairman

of the board, and myself and Mr. Close, secretary of the

Bancorporation.

Q. I notice from the Answer that after these discussions,

you then returned a call to Mr. Gilbert.

At whose instructions did you make that call?

540

A. Actually at the consensus of the meeting of the officers

of the Bancorporation.

Q. For what reason did the officers of the Bancorporation

consider it desirable to continue discussions with Mr.

Gilbert?

A. This was about the time we were in the process of

discussing the expansion of the Bancorporation, how it

should be done and on what basis. We generally felt that

it seemed reasonable, initially, anyway, to try to acquire

banks in the largest centers of Colorado and acquire banks

that were more comparable to the First National Bank of

Denver ; in other words, commercial-type banks as opposed

to retail-type banks. And this seemed to fit that pattern.

(p. 29 line 19—p. 32 line 7)

Q. Now, when did First National Bancornoration and

the First National Bank of Greeley reach a formal under-

standing concerning the acquisition by First National Ban-

corporation of the First National Bank in Greeley?

A. That was towards the end of March. I ean pick out

the exact date if you want it. But it was towards the end

of March, 1969,

Q. Did you conduct any investigation of the Greeley area

prior to that time?

A. No detailed investigation of the Greeley area, other

than the fact that I personally had been very knowledgeable

of Greeley for the last ten years because of my association

with the correspondent bank with the First of Denver. I

had spent much time in Greeley. I was knowledgeable with

the banking situation there and of the Greeley situation,

Weld County in particular, and the advent of Eastman-

Kodak coming in the area, and just general knowledge.

Q. Well, in terms of the economy of the area, were you

familiar with whether or not it was a growth area or stag-

nant area, or what was your knowledge concerning the

economy of the Greeley area?

A. Weld County is—my knowledge of the area of Weld

County itself, which is one of the most productive agricul-

tural areas in the state. It’s one of the better counties, one

of the larger cattle-feeding areas. Greeley is the county

seat of Weld County. And generally the northern part of

Colorado has been experiencing overall growth.

Q. Was that one of the factors that induced you to look

SRMEUCIT Wen Kaui coon rememnr mya ter ee LONE '

541

favorably upon the acquisition of the First National Bank

of Greeley?

A. Yes, plus the fact that we wanted to be represented

in northern Colorado, and Greeley, as I mentioned before,

in the larger cities with a bank that was comparable to

the First of Denver.

Mr. Scnorpke: Off the record.

(Discussion off the record.)

Q. (By Mr. Schoepke) Mr. Alexander, in connection with

your express desire which you just noted, to be repre-

sented in Weld County, the northern part of Colorado, have

you given consideration to acquiring any other banks in

the Greeley area?

A. What do you mean by ‘‘the Greeley area’’?

Q. For the purpose of my question, when I refer to the

Greeley area, I refer to the City of Greeley and surrounding

communities listed in the Complaint. Do you have a copy

of the Complaint handy?

Mr. Metrzcer: Yes, I do.

Q. (By Mr. Schoepke) For that purpose, that’s in para-

graph ten of the Complaint, where it defines the Greeley

area as including Greeley and the towns of Evans, LaSalle,

Peckham, Pierce, Gill, Eaton, Lucerne, Farmers and Brace-

well?

A. No, we did not diseuss or consider application for

banks in those areas.

Q. Did any banks in those areas ever approach you with

the possibility of joining your holding company ?

A. No, no.

Q. Did any other financial institutions from that area

ever approach you with regard to joining your holding

company.

A. No.

Q. Were there any other banks in Weld County whose

acquisition you considered?

A. Yes. We gave consideration to the First National

Bank of Windsor.

(p. 33 line 14—p. 34 line 25)

Q. Now, for what reason was the holding company inter-

ested in the possibili', of acquiring First National Bank

of Windsor?

542

A. Primarily heeause of the entrance of the Eastman-

Kodak Company into the Windsor area.

Q. And at the time you made this inquiry, other than

the Eastman-Kodak matter, had you conducted any kind

of an economie study of the Windsor area?

A. No, other than, again, my knowledge of Windsor and

the area through my years in the Correspondent Bank

Department.

Q. Now, prior to this contact with Mr. Ashley of Windsor,

was the general economic nature of the area discussed

among the c“icers of the Bancorporation ?

A. Just in general. In other words, all of us were pretty

cognizant and knowledgeable of the Weld County area.

Q. Were you all in general agreement that it was a

growth area?

A. Overall.

Q. Well, then, after you established contact with Mr.

Ashley through Mr. Clark, I gather from your Interroga-

tory Answer that you went to Windsor and carried on

discussions with Mr. Ashley?

A. Yes.

Q. Could you tell us, to the best of your recollection,

the substance of those discussions?

A. We diseussed in general with Mr. Ashley the aequisi-

tion of controlling interest in his bank by the Bancorpora-

tion; generally the benefits that we could offer to the Wind-

sor community as Eastman came in and began operations.

We discussed what would be a fair price for his share-

holders. We discussed how the bank would be operated,

assuming that we did acquire it. It was just a general dis-

cussion of the overall holding company philosophy, prices

and operation.

Q. Did you make him an exchange offer at that time?

A. We discussed that in detail, but we never were able

to arrive at a satisfactory agreement.

(p. 36 line 13—p. 37 line 10)

Q. Well, first off, let me ask you, why is Banecorporation

interested in acquiring the National State Bank of Boulder?

A. It’s the same philosophy as we recently alluded to, that

it’s a reasonable size bank in one of the largest cities in

Colorado, and to a degree it’s a commercial-type bank allied

with the type, or similar to the First National Bank of

Le rt UP! " - _ — . f

543

Denver, following the organization pattern that I referred

to.

Q. Are you familiar with the economic characteristics of

the Boulder area?

A. Yes.

Q. Did those economic characteristies have any bearing

on your interest in being represented in Boulder?

A. (Conferring with counsel) Our primary reason is—the

bank gets the philosophy that we have referred to so far as

getting into the larger cities initially in Colorado with banks

that meet our general philosophy of management. Boulder

is a good area.

Q. Is it a growth area?

A. It has shown some degrees of growth. But it’s more

of the philosophy than the growth area, because, as vou

know, we filed an application in Pueblo, which doesn’t have

the same degree of growth that Boulder or Greeley did.

(p. 41 line 5—p. 42 line 10)

Q. Now, Mr. Alexander, I would like to direet your atten-

tion to the next aequisition which you described in your

Answer to Interrogatory 33. That’s on the fourth page of

the Answer, It’s the Colorado Springs National Bank. You

start out with this statement, ‘‘Senior officials of the Ban-

corporation were indirectly given to understand that Colo-

rado Springs National Bank, a long-time correspondent

bank, was to be offered for sale and that bids would be

accepted only from the Bancorporation and Denver U. S.

National Bank.’’

I wonder if you would tell us what you mean by the state-

ment that senior officials of the Bancorporation were in-

directly given to understand.

A. The Colorado Springs National Bank was a long-time

correspondent of the First National Bank of Denver and one

of its better correspondents by virtue of size of deposits

relationship. This bank, in our discussions among ourselves

in the expansion of the holding company was comparable to

what I referred to before, policy-wise. In other words,

Colorado Springs is a good city and this was : reasonably

sized bank, comparable to the First National Bank of Den-

ver. In other words, it was a meaningful bank in a meaning-

ful city as a reasonable place to start our expansion pro-

gram. When we discussed the possible acquisition of that

—

544

bank with the officials of the Colorado Springs National

Bank, they indicated an interest. And as we indicated in the

response, Mr. Adams and myself did meet with the repre-

sentatives of that bank. During one of those meetings the

implication came out that the directors of the Colorado

Springs National Bank wanted to sell it but they wanted to

put it out to the highest bidder between ourselves and the

Denver U. S. Initially we did not know that we were in a

bidding situation.

(p. 51 line 20—p. 52 line 9)

Q. Well, why were you interested in acquiring the Bank

of Sterling?

A. Sterling is one of the better communities in north-

eastern Colorado. And his bank again fitted the pattern

that we were trying to follow of being a reasonable bank in

a reasonable community and more allied to our type of

operation.

Q. Did you give consideration to acquiring any other

banks in Sterling?

A. No.

Q. And whatever county it’s in or section of Colorado?

A. No. It’s in the application that we have had a very,

very strong relationship with that bank for 40 or 50 years.

One of the officers of the First of Denver was on that Board

back in the late ’20’s. Mr. Brown’s age is 48.

(p. 53 line 17—p. 58 line 15)

Q. Now, Mr. Alexander, there is on the Board of Diree-

tors of the First National Bank of Denver a Mr. Mahlon T.

White, is that correct?

A. Yes.

Q. And you know Mr. White?

A. Yes.

Q. And according to your Answer to Interrogatory No.

12, he was elected to the Board of the First National Bank

of Denver in October, 1968, is that correct?

A. Yes.

Q. Now, with respect to your Answer to Interrogatory

No. 49, you indicated that Mr. Mahlon T. White owned 61

per cent of the stock of the First National Bank of Durango.

A. Correct.

DPE SE PRI 8K oe peyet ne . “ 2 A

__——

545

Q. I would like to ask whether there has ever been any

iseussion by Bancorporation with Mr. White concerning

he possibility of Bancorporation’s acquiring the First Na-

ional Bank of Durango, of which he owns 61 per cent.

A. No specific discussions in that regard, inasmuch as

{r. White is president, anyway, and he made it clear that

e’s not interested in selling any of his banks.

Q. Well, did anyone ask him whether he would be inter-

sted in disposing of the First National Bank?

A. No.

Q. Did you ask him individually at any time?

A. No.

Q. And you know of no officers of Bancorporation that

1ight have discussed this question with him?

A. Well, I know of nobody that has done it directly.

Q. Now, according to the Answer to Interrogatory No.

9, Mr. Mahlon White also owns 77 per cent of the stock of

he Fidelity Bank and Trust Company in Monte Vista.

A. Yes.

Q. Has there ever been any discussion between Mr. White

nd officers or employees of the Bancorporation concerning

he possibility of Bancorporation’s acquiring Fidelity Bank

nd Trust Company of Monte Vista?

A. None from the management of the Bancorporation.

Vhether any employee did, I don’t know. But we have no

nterest in that bank.

Q. Incidentally, where is Monte Vista?

A. About ten or twelve miles north of Alamosa, down in

he San Luis Valley. I can show it to you on the map.

Q. Along that same line of questioning, we note from

nterrogatory Answer No. 49 that Mr. Mahlon’s wife owns

8 per cent of the Minnequa Bank of Pueblo.

A. Yes.

Q. Has there been any discussion by Bancorporation or

ts officers and management with Mr. White concerning the

ossibility of acquiring the Minnequa Bank in Pueblo?

A. None that I know of.

Q. Now, a few moments ago you indicated that Mr. White

ad indicated that he was not interested in disposing of any

f his banks; the were no discussions with him. I wonder

n what basis your knowledge to that effect is.

A. I think the best way to answer that is that maybe

cause of his ownership of these banks, for background

nformation, his father owned those banks, and when he died

546

he left most of the stock to his mother and t» Wielilien’S wife

And I think generally people have assumpc# tat Giese wonill

be the first banks which we would want: t» aequire. Mindi as

an answer to general statements, ‘‘ Whew are vow going to

acquire those banks?’’ Mahlon indicated te whomever he

was talking, and the word was released that he was not

interested in selling those banks. That was the general

answer. But I think it’s indicative of the situation.

Q. But do you know to whom he made these statements?

Did he make them to you?

A. No. Sort of a general diseussion and the sort of im-

pression that he let out. But we have never had any definite

discussions about this matter.

Q. Now, getting back to Interrogatory No. 49, I see that

he is also a director of the First National Bancorporation.,

A. Not Mahlon White.

Q. William M. White, Jr., and that he is also a director

of the First National Bank of Denver. Is there any relation-

ship between Mahlon White and William White?

A. Brothers.

Mr. Metzcer: None other than that.

Q. (By Mr. Schoepke) Well, in connection with Mr,

William White’s stockholdings in other banks, I notice that

he, according to Interrogatory Answer No, 49, owns some

of the stock of the Bank of Aspen in Aspen, Colorado, And

I wondered if there had ever been any discussion with Mr.

William White as to the possibility of the aequisition by

First National Bancorporation of the Bank of Aspen.

A. Only in a limited manner. I asked Bill at ome point

whether he would be interested in letting w@* acquire the

Bank of Aspen. He said that he would, or that we wowld

have to discuss the matter with his brether Mahlon whe

spoke for the bank and not him.

Q. And Mahlon White, according to Imtermematery An

swer 49, also has about 3.68 per cent of the Bamk of Aspen.

Well, I take it, judging from your previews amswers, that

you did not discuss the Bank of Aspen with Mahlon White?

A. Right.

Q. Now, going back to William White, also I notice that

he has about 7.6 per cent of the shares of the First National

Bank in Alamosa, Colorado. And I would ask you similarly,

have you yourself ever, or on behalf of Bancerporation, had

EPEAT Dee eet PIE rt .

_—_—

ar disenssin with Wiliam Wire emeeming te passinit

itv ef aeqisifien ef the First Satenal Bank of Simos”

S None wiatseever.

Q Do vou knew of any other officer of the Bancorporation

who has had any diseussion ?

A. Tfeel certain nobody has.

Q Ou what do you base your certainty?

A. Just that it’s never been discussed amongst us at all.

Q. Now, in the same vein, Mr. Alexander, there is listed

in Answer to Interregatory No. 49 a Mr. George R. Bander,

Jr. who is a loan officer of the First National Bank of

Denver. And he owns 6.08 per cent of the shares of Metro-

politan State Bank in Commerce City, Colorado, Has there

ever been any discussion by Bancorporation with Mr.

Bauder concerning the possible acquisition of the Metro-

politan State Bank of Commerce City, Colorado?

A. No.

Q. Has there ever been any discussion of Baneorporation

with anyone else concerning the possible acquisition of that

bank?

A. No,

(p, 60 line 22—p, 64 line 20)

Q. I would like to direct your attention to defendants’

answer to Interrogatory No. 15 which is concerned with

stockholders of First National Bancorporation owning three

per cent or more of the stock. In thi« regard, I notice that

among the shareholders listed im that answer ix an organiza-

tion known as the A. V. Hunter Trust, Incorporated owning

165,100 shares, which is approximately 11 per cent of the

shares of Bancorporation.

Could you tell us what is the A. V_ Hunter Trust?

A. it is a charitable non-profit organization organized im

Perpeimity azaimst the assets, whach is the shares of the

First National Ramcorporation. It was ornganined, I believe,

threagh the will of Mr. A. V. Hunter, wha, from 1911 te 1913

er 1914, im that particular area, was chairman of the board

of the First National Bank of Denver, and one of its major

Stockholders.

Q Now, who administers that trast?

A. The chairman of that trust is Mr, Montgomery Dorsey,

: Q. And is there any connection between the administra-

fiom off (inet! teostt anal tle frost! diepeerttnent! af Hie Fine

A. P'S me anderstandinge that the trust department hols

im 2 safe-Reepine account the as:ets, or some of the assets,

of the Hunter Trust. but only im # safe-keeping expacity.

Thev exercise no control over it.

Q Thev exercise no management ?

A. Well, it’s technically called am avenev account. In

other words, it’s just a safe-keeping account. They have

no control whatsoever over it.

Q. Well, when you say an agency account, is it a disere-

tion agency account? Is that what vou mean?

A. It holds the certificates in safe keeping.

Q. There is no personnel in the trust department that

does things with regard to the trust, other than from instrue-

tion by Mr. Dorsey or his appropriate agents?

A. That's right. The trust exercises complete control

over the assets or distribution of any funds,

Q. Do you happen to know who the trustees of the trust

are besides Mr, Dorsey?

A. I know some of them, T can’t vive you a full list. So

if you want it, T'll give it to you. There are four or five,

There’« Bill Coors, Do you want me to get it for yout

Would that be better?

Q. Well, we don’t have to interrupt anything now, but if

you could get it, that would he fine.

A. Okay. I'll get it for you.

Q Mayhe we can bring it into one of the later depositions,

A. Gene Adams is one.

Q Well, when we talk to him we can get to it.

In this regard I notice that from Interrogatory Answer

50 the A. V. Hunter Trust also has 16 per cent of the South-

erm Denver National Bank im Glendale.

A. It’s the South Denver National Bank.

Q In Glendale?

A. Yes.

Q Has there ever been any discussion to your knowledze

with regard to the possibility of the acquisition of the South

Denver National Bank by First National Bancorporation

of Denver?

A. That's a good question, We've given consideration to

it, bat no formal discussion was ever made, because we dont

delieve that the Federal Reserve Board would approve.

pa oe NESTE NTE LANA PN SEMTENIA HS YETI EEE TS ’

——_

aay

Wie Weerwcee- OFF tie record.

| Disenssion aff te reeard.)

@ (Be Mr. Seiioepie) F alse note that tie XV. Hunter

Trust had! 6:7 per cent of the stock of the Guaranty Bank of

Denver. Need I ask the same question?

A. No, rou don’t need ta.

Q. There has been no discussion at all of the possibility of

acquiring it?

A. T’'ll tell vou the whole story on all of them if you want

to, but absolutely no discussion.

(p. 64 line 20—p. 68 line 8)

Q. (By Mr. Schoepke) Well, then, in this same vein, Mr,

Alexander, the A. V. Hunter Trust, according to Interroga-

tory Answer 50, has about 12 per cent of the First National

Bank in Grand Junction. Has there ever been any discussion

with any of the trustees of the Hunter Trust with respeet to

the possibility of acquiring as a subsidiary of First National

Bancorporation the First National Bank of Grand June-

tion?

A. No,

Q. Now, in the same Interrogatory Anawer No, 50 there

is an organization called Southern Colorado Banking Com-

pany which has 7.73 per cent of the outstanding shares of

Bancorporation stock, Do you know what the Southern

Colorado Banking Company is?

A. Off the record.

(Disewssion off the record.)

A. Well, Southern Colorado Banking Company, as far

as I know, ix a partnership of which Frederick M. Farrar is

a general partmer. I have never seem a copy of the trust

Ininement or the partmership agreement.

Q Do you happen to know of any other banks im which

Seutherm Colorado Bamkine Company has an interest?

A. My umderstanding is that they own a controlling imter-

est im the First National Bank of Puchlo and the Exchange

National Bank of Colorado Springs.

Q. Now, on the list of major stockholders, I see that there

is a Mary Alice Thatcher Jones owning 7.68 per cent of the

Bancorporation stock. You mentioned that name earlier this

morning, the Thatchers. To vour knowledge, is this Mary

Alice Thatcher Jones a part of this Thatcher family?

550

A. She is a niece of Raymond Thatcher, who was related

to Mahlon Thatcher. And when Ravmond Thatcher died, he

left her 40,000 shares of the First National Bank of Denver.

Q. And you say she was married to Mahlon Thatcher?

A. No. She was a niece of Raymond Thatcher, and

Raymond Thatcher was related to Mahlon Thatcher, who

was the father of Fred Farrar’s wife.

Q. The first name, Mahlon, does that connect Thatcher

with White or is that a coincidence?

A. Well, Mahlon White is the grandson of Mahlon

Thatcher.

Q. The next largest shareholder is a person by the name

of Janet Estelle Shaw LaComp, who owns 6.17 per cent of

the Bancorporation. To vour knowledge, is she related in

any way to Mary Alice Thatcher, the Whites or the Mahlon

group?

A. No. She has a relationship—I’ve forgotten what it

is—with the A. V. Hunters. There is no relationship at all

to any of the Thatchers.

Q. Do you know what her relationship was to Mr. A. V.

Hunter?

A. No, I don’t. I think she was a niece of Mrs. Hunter,

but I’m sure.

Mr. Liexowrrz: Isn’t she related to Oliver LaComp who

is a director of the First National Bancorporation?

A. Yes. Aly LaComp is her husband.

Mr. Metzcer: Off the record.

(Discussion off the record.)

Q. (By Mr. Schoepke) Among the major stockholders of

Bancorporation is an organization called Dake and Com-

pany, which has 5.91 per cent of the shares of Bancorpora-

tion stock. What is Dake and Company?

A. It’s a nominee of the trust department of the First

National Bank of Denver.

Q. And then the next largest shareholder I have is an

organization known as Skelton and Company, which has

about 4.3 per cent of the shares of Bancorporation. Do you

know who Skelton and Company is?

A. It’s a nominee of a bank, I think, in New York City.

But it is a nominee of a major bank. I[’ll find out which one

it is if you want it.

Q. All right. If you would, I would appreciate it. Going

Ne Be hd See eis ee a et eer . 7

551

back to Dake and Company, just for the record, would you

explain in what way and for what purpose Dake and Com-

pany is used as a nominee by the trust department of the

First National Bank of Denver, if you know?

A. It’s just a mechanical means of holding title to shares

which are in various trusts. For the most part, all securities

owned or held in the trust department of the First National

Bank are issued in the name of Dake and Company. It

makes it a lot easier for them to handle securities and sell

them and trade them and so forth. Some of the shares in

Dake and Company are of course held in various types of

trusts; some just an agency account, and some in safe

keeping.

Q. Does Dake and Company exercise voting rights of the

shares of Bancorporation that it holds as a nominee?

A. In some cases, yes, and in others, no. You would have

to have a complete breakdown of all the shares in the trust.

And I think that vou can find the answer to that in any one

of our applications to the Federal Reserve Board.

PuaINTIFF’s Exuisit 5

Apams DeEposition

The following excerpts are offered in evidence by plaintiff

from the deposition of Eugene H. Adams, President of The

First National Bank of Denver and Director of defendant

First National Bancorporation, Inc., taken by plaintiff

November 23, 1970. Each excerpt is preceded by a reference

to the page and lines of the transcript from which it is taken.

Questions are by government counsel unless otherwise

noted.

(p. 2 line 7—>p. 10 line 6)

Q. (By Mr. Schoepke) Would you state your name for the

record, sir, please.

. Eugene H. Adams.

Where do you reside, Mr. Adams?

. Actual address?

Yes.

. 1201 Williams Street, Denver.

‘And your present occupation?

. Banking.

What bank?

. President, First National Bank of Denver.

’.. >POrOr>O>

SR ee ed

552

Q. How long have you been President of First National

Bank?

A. Since October of 1951.

Q. 51?

A. No, I’m sorry, ’61—I beg your pardon, ’61.

Q. Could you trace very briefly your career in banking

from the time you first entered the field.

A. I started with the International Trust Company in

September of 1934, which was the fall after I graduated

from college, so I have never been in anything but banking.

In 1939, I became a junior officer of that bank. In 1944, I

became a senior officer and a director. TI was still in the

Trust Department, which is where I started.

In April of 1951, I became President of the bank, and I

continued in that capacity until it was merged with the

First National Bank of Denver in August of 1958, at which

time I became Executive Vice President of this bank. And

then I became President in October of ’61, when Mr. Evans

moved up to Honorary Chairman of the Board, and I have

been President ever since—up till now, anyway.

Q. Mr. Adams, I would like, if I may, to direct your atten-

tion to the defendant’s answer to Interrogatory 30, which

was served by the plaintiff in this case. At the beginning of

the answer that is concerned with you, your name is there

and the second sentence of the answer reads as follows:

‘*Since August 23, 1963, when the first of a series of applica-

tions was filed, Mr. Adams has been in an executive capacity

and as such was a member of the group which made the final

decision to proceed in each instance.”’

I wonder if you would tell us, with respect to the organiza-

tion of the First National Bank of Northglenn, how it came

about when the decision was made to organize that bank.

A. Well, I assume—that is the date when the application

for a charter at Northglenn was filed, and at that time the

Northglenn Shopping Center and Northglenn residential

area had become a substantial area in population and in

importance in northwestern Denver, and we determined at

that time that we would apply for a charter for an affiliate

bank out there, with the Comptroller of the Currency, and

offer the stock along the line to our own stockholders to

make it, of course, a legal affiliate. And the chips fit in place

as we went along with that one, and then I think in Novem-

ber that bank actually was granted the charter, and it started

PEEPS PET SOUT RE FS ae’ ° /

>_—

553

in November in a little bitty house out there. And then it

was followed by the—Bear Valley was second, and then

Southglenn bank was the third of the affiliate banks for

which we applied for charters.

Q. Well, how did it come about that you applied for a

charter for the Bear Valley bank?

A. Well, remember, there was no bank in Northglenn

when we applied, there was no bank in Bear Valley when we

applied, there was no bank in Southglenn when we applied,

and there were no banks within two or three miles, I think,

of any of the three of them. They were rapidly growing

suburban areas of Denver into which we wanted to extend

our services, and this was the vehicle which we adapted to

extending those services.

Q. So that your last answer is generally applicable to all

four of the affiliates which you organized about that time?

A. Well, three.

Q. Three?

A. Three. We only have four units altogether at the

moment.

Q. Now, did you participate in any way in the determina-

tion to organize a holding company?

A. Yes.

Q. And what was your function with respect to that

matter?

A. Well, as President of this bank and a member of the

Board, I was one of the group who made the decision to

form a holding company, and when it was formed, as I am

sure you know, I became President until the summer of 1969,

I believe it was, when Mr. Alexander was named President.

Q. When was the question of organizing a holding com-

pany first discussed, to the extent, of course, that you were

engaged in its discussion?

A. Well, I’d have to--I can’t remember a specific date,

Mr. Schoepke, but I have to hark back there to probably the

time when the Denver U.S. National made its decision to

apply or to try and form a holding company, and that ob-

viously would have focused our attention immediately on

the question, because they are and have been our chief com-

petitor for ever since our two banks were merged in 1958.

You remember that the Western Bancorporation has been

here in Colorado since 1956, but cannot go any farther

because we have no specific state law permitting them to do

~ iy

554

so. We also had the First Colorado Baneshares, which is the

so-called Carnev-Weckbaugh group of four banks in the

Denver area, which has been in existence for ten years, I

guess—just guessing at that.

But when the Denver U.S. decided to form a holding com.

pany—TI don’t remember exactly when this was, about late

1963 or 1964, somewhere in there—we obviously had to give

it immediate consideration, beginning at that time, as to

what we were going to do.

Q. Mr. Adams, I would like to direet your attention to

Interrogatory Answer No. 32. which is concerned with the

Greeley application, and Section B of the answer, the first

sentence, reads as follows: ‘‘The initial disenssion was

instigated by Mr. Robert Gilbert, who called Mr. Eugene H.

Adams, President of the First National Bank of Denver, to

determine whether or not Bancorporation would have an

interest in acquiring 80 percent or more of the outstanding

shares of the First National Bank of Greeley.’’

I wondered if you could tell us, to the best of your recol-

lection, what took place at this initial contact, and to the

extent you can recall, what Mr. Gilbert said to you and what

you said to Mr. Gilbert.

A. Well, Mr. Schoepke, T respectfully suggest that the

answer here is the gist of the conversation. It wasn’t very

long. He simply asked me, as indicated here, if we would

have an interest in acquiring their bank for the holding

company, and I said, ‘*Well, I would like to diseuss this with

my associates, but I think probably we would.’

And after talking to my associates, we concluded we very

definitely would, and then from that point on Mr. Alexander,

aided by Mr. Close, became our negotiators, with Mr. Gilbert

and Mr. Eaton and the rest of them up there.

Q. It is indicated in the second sentence of this answer,

and you have also alluded to it just now, that after you had

your first diseussion with Mr. Gilbert—or vice versa, how-

ever you prefer to put it—that there was a discussion

amongst officers of the Bancorporation about Mr. Gilbert's

contact with yon. Now, among what officers was the matter

then discussed with you, by you?

A. Well, certainly with Mr. Alexander, with Mr. Close,

with Mr. Dorsey. I don’t recall exactly, but I’m sure that

the four of us were parties to the decision.

Q. Was this disenssion just one discussion, or was it a

series of discussions?

——

555

A. Well, I can’t recall specifically whether there was more

than one or not. I don’t think, as a practical matter, that

a decision like this would necessarily take a series of discus-

sions. We either wanted to talk to the bank at Greeley or

we didn’t. I mean, T think it ix almost as simple as that.

Q. Well, now, with respect to this diseussion, could you

tell us why it was that the officers of Bancorporation were

interested in conducting further discussions with Mr.

Gilbert?

A. Well, you mean why did we want to be in the Greeley

area?

Q. Well, if you'd like to answer it in that way, that’s fine.

A. Let me answer it this way. Obviously, we want to be

in the Greeley area. The Weld County Bank at that time

was gone to the United Banks of Colorado, The Greeley

National Bank, which is the largest bank in Greeley, was

probably out of consideration because of its size.

The First National Bank of Greeley had been an ex-

tremely old correspondent of ours, although we were not at

the time a major Denver correspondent with First National

Bank of Greeley. And we were very anxious, as I say, to get

into the Greeley area, because it ix one of the best towns in

northern Colorado, and has been for many, many, many

years a great agricultural area, and a fine area. And we

would very much like te have a unit up there in Greeley.

Q. Now, could you tell us, if you know, whether there was

any investigation of the convenience and needs of the City

of Greeley for the services or the presence of your holding

company in Greeley, prior to the negotiations that were

conducted with Mr. Gilbert?

A. Do you mean by us or by anyone?

Q. By you. And here again, I have to tie it to your

knowledge.

A. Well, we have been in the Greeley area as a corre-

spondent bank for a long time, we know the Greeley area

ver’ well, we like the Greeley area very well, and we wanted

to be in there personally, let's say, rather than through a

correspondent relationship, because it is one of the growth

areas of Colorado and we'd like to be in it.

(Recess.)

Q. Mr. Adams, did I understand you correctly a moment

ago that you said that Greeley National was out because of

its size, as a possibility for acquisition?

556

A. Well, let me restate that, if I may. Tt wax the largest

bank, and as the largest bank in Greeley, I think at the time

was the largest bank in northern Colorado. It had at loast

one legal affiliate of its own at that time, or even two, Were

there two? Anyway, it was a very independent type of hank

and a very well-run, very well-managed bank, and consider.

ing its size and its management and the fact that it has two

legal affiliates, there just wasn’t any point in pursuing jt

at all.

And you don’t like us to seek the first hank in any com.

munity anyway, I understand: and we wouldn't, under nor.

mal cireumstances—we would not do it.

Q. Well, do I understand that you felt that you might not

able to get Federal Reserve Board approval?

A. Right.

(p. 12 lines 3-11)

Q. Could yon tell us how it came about that the holding

company first came to the point of giving consideration to

acquiring a bank in Colorado Springs?

A. Well, I think the answer to that one, Mr. Schoepke,

must be obvious. Colorado Springs is the number one

growth area of the State of Colorado, and ix obviously an

area in which we would like to participate. It is growing

extremely fast. The population has, I think, doubled in the

last ten years. And we would very much like to have a unit

there.

(p. 14 lines 7-11)

Q. Well, could you tell us why you had an interest in

acquiring the bank when Mr. Sayre first approached yout

A. Well, here again, Boulder is the second fastest grow-

ing area in Colorado, and here again, we would obviously

very much like to be in the Boulder area. . . .

(p. 17 lines 5-11)

Q. Well, now, you did reach an agreement to acquire the

bank at Sterling. Could you tell us why First National

Bancorporation is interested in acquiring an affiliate in

Sterling.

A. Well, because, number one, Sterling again is—not a

dynamic growth area of the state, but it is in a growing area,

if is in a fine agricultural area of the State. ...

scesitieaitalen inate Sa

557

Pviatstive’s Exuuisit 6

Asuiey Deposition

The following excerpts are offered in evidence by plaintiff

from the deposition of Lee C. Ashley, Senior Vice President

and Cashier of The First National Bank of Denver and

Treasurer and director of defendant First National Ban-

corporation, Inc., taken by plaintiff November 20, 1970. Each

excerpt is preceded by a referen®e to the page and lines of

the transcript from which it is taken. Questions are by

government counsel unless otherwise noted.

(p. 2 line 9—p. 14 line 2)

Q. (By Mr. Brenan) Would you state your full name for

he record, please.

A. Lee C. Ashley.

Q. What is your address, Mr. Ashley?

A. 983 South Adams Way, Denver 80209.

Q. And what is your present employment?

A. Senior Vice President and Cashier of the First

ational Bank of Denver.

Q. Do you also hold any other positions with the First

ational Bank of Denver or First N ational Bancorporation

‘any of its subsidiaries?

A. Yes.

Q. Could you outline those positions, please.

A. I am presently Chairman of the Board of the First

ational Bank of Bear Valley, and I am also a member of

e board of the First National Bank of Southglenn.

I am a member of the board of the First National Ban-

rporation and its Executive Committee, and its Treas-

er. I believe that is about it.

Q. Are you also a Vice President of the First National

nk of Southglenn?

A. That’s right, yes, I am.

2. And in addition, are you in charge of the Operations

partment of the First National Bank of Denver?

A. Yes.

2. Is that as part of your job as Senior Vice President?

\. Correct, or Senior Vice President and Cashier.

). How long have you held the position that you now hold

h the First National Bank of Denver?

\. About twenty-two years,

. And how long have you been with the bank in total?

. Forty years and five months,

Pen

558

Q. Could you state roughly how your time is divided, in

other words what percentage of your time is spent in each

capacity?

A. Well, let me start with the First National Bank of

Southglenn: Attending board meetings once a month, and

infrequently Loan and Discount Committee meetings. That

is about all the time I spend at present.

Presently, as Chairman of the Board of the First National

Bank of Bear Valley, attending Discount Committee meet-

ings maybe twice a month and board meetings once a month,

and certain other committee meetings infrequently.

On the First National Bancorporation, attending Exeen-

tive Committee meetings monthly and board meetings

monthly—no, board meetings auarterly, pardon me; and

as a member of the Executive Committee, participating in

the deliberations of that committee.

And as far as the First National Bank of Denver is

concerned, I would say it takes about ninety per cent of my

time.

Q. Now, the answer to Interrogatory 30 indicates that

you were active in the formation of the three affiliate banks

which are now also subsidiaries of the First National

Bancorporation.

A. Yes.

Q. Could you, taking them one by one, describe vour role

in the formation of First National Bank of Northglenn.

A. I was a member of the board upon its formation. I

was active in its Building Committee, which became active

about six months or a year after the bank started. IT par-

ticipated to a degree in review of loans, loan applications.

I think that is about it.

Q. Well, did yon have anything to do with the actual

decision to establish that bank?

A. I don’t really know to what extent T participated. I

participated in the discussions, yes, and recommended the

decision be made, as one of several, yes.

Q. Could you describe what factors led you to recommend

that this bank be established?

A. Well, there were a number. I assume that the most

important would be that it provided one way for our bank

to go where its present or prospective customers reside, at

least in that quadrant of metropolitan Denver. I think this

was perhaps the overriding consideration.

Q. Were there any particular characteristics about the

APO DT Ds* 1 ep RELA ORLA . r : ae vA

——

559

Northglenn area that made that an attractive area to locate

an affiliate in?

A. Well, I think our real motive in Northglenn, as well

as the others in turn, is basically to go where our customers,

as I say, are located. It seems to us that increasingly per-

sonal accounts are opened at a bank that is convenient to the

residence, rather than where they work, at least to a con-

siderable degree, and a lot of the population in Denver

seems to be attracted to that area, and a lot or quite a

number of our existing and potential customers live in that

general quadrant of metropolitan Denver.

Q. Well, at that time, then, did you consider this to be a

growth area in terms of population?

A. Oh, I think we had a feeling that it was growing, yes.

It is a new area. There wasn’t much in the way of history

to go on, but it’s a relatively new area, was at the time.

Q. I believe, then, the next affiliate that was formed was

the First National Bank of Bear Valley. Could you describe

your role in the formation of that bank.

A. Less directly involved than at Northglenn, but never-

theless was asked my opinion about it, and I again expressed

my personal view that it would be a proper thing for the

bank to consider, and substantially for the same reasons as

at Northglenn, but simply applied to another quadrant of

the metropolitan area.

Q. Would you say, then, that you also considered the

Bear Valley area to be a growth area in terms ot population?

A. There certainly has been some growth out there, ver,

Q. Was there anything else that particularly made that

an attractive area to locate an affiliate?

A. Yes, because the level of average income appeared to

be attractive. It appeared and does appear to be a stable

kind of community. It seemed to us that there were real

potentials, and we had some people living in that area who

were employed by our bank, and so they contributed some

first-hand knowledge of the area. It seemed like an attrac-

tive opportunity.

Q. And the third affiliate formed was the First National

Bank of Southglenn. Could you deseribe your role in the

formation of that bank.

A. I would say very similar to the other two. T don’t

characterize my connection as being much different in any

of the three ‘anks, basically, although T think it was perhaps

more active in Northglenn than directly at Bear Valley.

—

However, in Southglenn I did participate in the considera-

tion of the matter and in the decision that we would enter

that area.

Q. And were you in favor of that decision?

A. Yes.

Q. Could yon explain why Southglenn was an attractive

area to locate an affiliate?

A. Well, I think I personally felt convinced at the time

that, although it did not appear particularly attractive at

the moment, that it might at some future time, perhaps

three or four years down the road. I personally felt. on the

other hand, convinced that we would very probably lose

money at that bank for at least the first year or two; but

I felt, as I say, that it should be, hopefully, in the future an

attractive area.

Q. Has that proven to be true?

A. Yes.

Q. Would you say, then, that yon also felt that the South-

glenn area, at least in terms of the future, was a growth area

in terms of population?

A. At the time we went in there, it didn’t really seem to

be particularly, not where the bank was located, and it’s

been much slower in that regard, frankly, than we expected.

We still are glad we have the bank there, but its growth

really has been less dramatic than I guess anybody would

have hoped.

Q. In other words, when you located the banks, you

anticipated more growth than has occurred?

A. Yes.

Q. How long did it take for the First National Bank of

Northglenn to be a profitable operation?

A. Well, I certainly would be guessing. I don’t honestly

remember. I would say that it took about a year at North-

glenn, a little less than that at Bear Valley, and a little more

than that at Southglenn.

Q. All right, thank you.

A. That is, if—and I think T should qualify that comment

to this extent—that these banks on their own, in my mind,

would have had a very difficult time, without some help from

us here.

Q. Could you describe the nature of the help that the

First National Bank of Denver gave to these banks?

A. Well, I think it would cover the broad spectrum of the

560

LOPES LOR, IRL IDL OLE VOLE DAL LEB LS DIAN. BRL 7 #

_—_

561

entire operations of each institution. I think it would be,

number one, people ; we contributed personnel that had some

experience. I think this is the most important single thing.

We contributed advice on services. We contributed man

power for specific situations, that the banks themselves

would not have been able to supply.

For example, if we wanted to find out something more

about the community, this bank would lend its help and

experience and knowledge in obtaining that information, to

assist each one of the banks concerned. So I would say it

was, number one, experience and people, and number two,

the broad background of this bank that, of course, was not

present in those particular areas.

Q. You also participated in the decision to form the First

National lancorporation. Could you describe your role in

that formation.

A. Well, I was one of the founders along with the other

officers, and did participate in discussions with the other

officers, and in turn at least was present during the discus-

sions of such a possibility in our own bank board. I am not

a member of our board, but as Secretary I was probably—

I would say that I did participate in the discussions, in the

considerations that led to the formation of the Bancorpora-

tion.

Q. Were you in favor of the formation of it?

A. Yes.

Q. Could you explain why?

A. Well, for many reasons. First of all, I might make

a personal comment, that in my opinion Colorado is a very

backward state in not adopting a statewide branch banking

system, and I still feel this way.

Since that avenue was closed, there appeared to be only

two vehicles open for us to broaden our services more widely

throughout the area, and to meet the growing needs of

customers. One would be affiliate banking and the other

would be a bank holding company; and we chose, for a

number of reasons, to adopt the bank holding company route

as more nearly fitting the—a logical alternative to the

unavailable statewide branch banking avenue.

Q. Did you then view this as a way in which First

National Bank of Denver could expand and become a state-

wide organization?

A. I think I would say that it is our hope to be repre-

a 6

562

sented as broadly as we can. If you say ‘‘statewide,’’ I

don’t know what you mean by that term. If you mean lit-

erally being represented in every area of the state, I would

suggest this probably is not realistic; but nevertheless, we

do and did at the time, and do hope that we can be more

broadly representing our services throughout the area.

Q. Was there any discussion, at the time that the Ban-

corporation was formed, as to how you would bring your

services to other areas in the State of Colorado?

A. I don’t think so, except to assume that cach case would

be different, and that each case should be handled as an

individual situation, depending on the locality concerned,

but with the objectives that I have mentioned.

Q. When you say ‘‘each case,’’ what exactly are you

referring to there?

A. Well, it might appear very advantageous to attempt

to broaden our services in one community, and it might be

very foolish to do so in another.

Q. Were there any discussions as to how you would bring

your services to any particular community?

A. I think one—I would characterize our concept of

opportunities as being varied. As indicated, prior to the

formation of the Bancorporation, we thought that at least

in metropolitan Denver there might be some advantage in

trying to locate in the outlying areas of the City and County

of Denver.

As far as outlying areas beyond that are concerned, I

think our first preference has been made evident by our

application, as representing our preference. And I think at

least to us it seems obvious that if we are going to attempt

to offer our services in the major population centers of

Colorado, that we had best do it by utilizing existing experi-

ence in those areas, rather than our trying to either start

a new bank in some suburban part of such a community, or

even de novo. It seems to us our best opportunity would he,

as I say, as characterized by the way in which we have so far

filed our applications. I think this speaks for itself.

This is not, I might say, to rule out—and I think T did

emphasize that we consider that different communities call

for a different approach. The fact that we have filed in some

of the major centers so far is not meant to indicate that this

is going to be our only approach, because it isn’t, and I think

you gentlemen are aware of some other ideas that this bank

is thinking of, through your sources of information.

563

So I don’t think it should be said that this bank is eom-

mitted to one way of trying to extend its services outside of

metropolitan Denver.

By Mr. Scnoepke:

Q. Could I just interpose one short question? Mr. Ashley,

a moment ago, you indicated that in connection with your

general goal of extending your services in the state, that it

might be advantageous to bring your services to one com-

munity and foolish to

A. Right.

Q. to attempt to do it in another. I wonder if you

would expand on that and tell us what considerations are

involved.

A. Well, I can think of an obvious situation where a

population in a particular locality is so small that it would

be pointless, it would be extravagant and poor business

judgment for us to attempt to form a bank in that particular

area. There are many small towns in Colorado that, at least

in my personal opinion, would not be fruitful, profitable

areas for us to enter, or ones that offer great potential.

There are some areas that are declining in importance. So

I think this is a matter of business judgment. There is no

magic about it.

Q. Well, now, what general considerations would. enter

into your determination as to the areas that might be

advantageous to enter?

A. Those that are stable and offer a chance for the bank

to do two things, to do what any business, I assume wants

to do, and that is to invest profitably and in so doing to

serve the public, to serve the consumers, the customers.

And I don’t think our objectives are any different in that

sense from anyone else.

By Mr. Brenan:

Q. Just one more question on the subject. I take it from

what you said before that Bancorporation has not ruled out

expanding de novo outside of the metropolitan Denver area,

is that correct?

A. No, we haven’t ruled it out. I am not personally aware

of any situation where we are considering precisely that

route. We are thinking of an industrial bank in Loveland.

I don’t know whether you’d call that de novo or not. In a

sense this is taking advantage of local know-how to a degree.

Pe: ‘,

True, it is an industrial bank, and I would be the first to say

that an industrial bank and a commercial bank are not the

same type of animal; but this is the only one currently that

we are thinking of specifically that we might approach with

a de novo application. But I would certainly, in my own

mind, not rule out the possibility, if the conditions seem

favorable.

(p. 15 line 5—p. 20 line 4)

Q. Mr. Ashley, were you involved in the negotiations

leading up to the agreement to acquire the First National

Bank of Greeley?

A. No, not except very indirectly, as a member of the

Executive Committee, as a member of the board of the cor-

poration, of course—in those capacities only. Mr. Alexander

did discuss some of the things with me as a matter of

courtesy, but I didn’t—no, I did not participate directly.

Q. Did you vote in favor of the acquisition of the First

National Bank of Greeley?

A. I certainly did.

Q. Would you explain why.

A. Well, for all the reasons that are involved in the First

National Bancorporation’s philosophy that since there is no

such thing permitted as statewide branch banking in Colo-

rado, and assuming we wish to grow and be healthy, offer

additional services, fulfill a role in not only the Denver

community but throughout the area in the best way we can,

one of the ways and perhaps the best way available to us is

to, in our opinion—was to enter such an area as Greeley,

which appears to be a stable area. It has had a very fine

history of contribution to the state. We think Mr. Gilbert

is an able individual, we think he runs a good bank, basically,

and we think this would provide us a perfectly natural

opportunity to fulfill the role that the First National

Bancorporation visualizes.

Q. Did you play any part in any of the other proposed

acquisitions of First National Bancorporation?

A. Yes. First, as a member of the Executive Committee

of the Bancorporation, secondly as a member of the board

of the Bancorporation, and thirdly as an officer of the

Bancorporation; I did in those capacities—yes, I did

participate to a degree.

Q. Well, perhaps it would be best to take them one by

, . 7

SUMAN TRAE D Cente Aye a PEN a ¥

—

565

one. Could you explain what role vou played in the decision

to acquire the bank in Colorado Springs?

A. I had nothing to do directly with the negotiations.

When the negotiations had advanced to a point where it was

deemed advisable to present the recommendation to the

Executive Committee, it was only at that point that I

participated.

Q. And could you describe your participation from that

point on.

A. Well, the recommendations having been made and

carefully reviewed, first with the Executive Committee, I

participated in that consideration and was in favor of the

application.

Q. Why were you in favor of that particular application?

A. I would consider my affirmation or my agreement to

that, or my recommendation of approving that, would be the

same basically as in the case of Greeley, and the same as far

as Pueblo is concerned.

Q. Was your role in the Pueblo application similar to

your role with Greeley and Colorado Springs?

A. Right.

Q. How about the application for the bank in Sterling?

What role did you play there?

A. No different.

Q. And were you in favor of that acquisition?

A. Yes.

Q. Could you explain why.

A. Well, that part of the state is one that, in my opinion,

we could well enter. Sterling is not one of the dramatically

increasing in population areas. However, it is a stable area;

it is nevertheless an important agricultural segment of the

state.

We think the bank is well managed, as testified by the fact

that we brought in as Executive Vice President of this bank

the erstwhile President of that bank. So again, we view

this as being another opportunity to enter an area and

broaden services in an area in which we are not represented.

By Mr. ScHorrke:

; Q. Mr. Ashley, you stated that you were not represented

in Sterling. You have a correspondent bank there, do you

not?

A. Yes.

Peewee

bee - oH ween)

566

Q. Who is your correspondent, if you know?

A. Security State Bank.

By Mr. Brenan:

Q. Could vou describe what part you took in the decision

to acquire the bank in Boulder.

A. Well, my participation in that is basically no different

from any of the others. In none of these, including those

that vou have not vet mentioned, have I been directly eon-

nected with the direct negotiations. It is onlv when negotia-

tions have reached a point that Mr. Alexander or Mr. Alex-

ander and Mr. Close make a recommendation to the Exeeu-

tive Committee, that I begin to actively participate, where

my views as a member of that committee are requested, and

further after that, as a member of the board.

Q. Could you give us your views as to the Boulder

; application.

A. I am highly in favor of our making that application.

, I think it would be a proper addition to the First National

Bancorporation. .

Q. Why do you feel that would be a proper addition to

the Bancorporation?

A. Well, just like the other areas, it is a very important

population center of Colorado; it is one that has some

growth and certainly has a history of stability. This is a

: bank we know well. We think we know what we are getting

into. We think the bank needs help and we think we can

make out of that bank something that would be a credit to

Boulder and to this bank.

Q. What was your recommendation as far as the applica-

’ tion to acquire the Montbello Bank?

; A. Favorable.

; Q. Why?

: A. Well, the Montbello industrial area is one that does not

; have a bank in it, and if we obtain approval of the applica-

tion for the Montbello State Bank, we will move—we plan to

4 move that bank into that industrial and residential complex,

and we believe that area directly within that geographical

center needs a bank. And we think the Montbello State

Bank, in its present location, with its present activities,

does not fulfill a proper role for a community of that size.

Q. At one point Bancorporation was considering entering

that area by chartering a new bank. Could you explain why

that decision was made?

RONARLL Ear At mg un ctn yes pee WHA ’ mA

—

567

A. Why the——

Q. Why the decision to enter with a de novo bank was

made. I know it was subsequently changed, but——

A. Well, I think the consideration of wanting to get in

there was one which certainly would have encouraged us to

try and enter with a de novo bank if there was no other way

to do it. But the Montbello State Bank does have deposits,

it does have a clientele, it does have a certain acceptance,

and this therefore seems a more logical way to go in.

Priarstirre’s Exuisrr 7

Interrogatory #49

(A) State whether any officer or director of (1) Bancorpo-

ration and its subsiriary banks, or (2) FNB Greeley

owns or controls at least three (3) percent of the shares

of the capital stock of any other bank or holding

company.

Yes

(B) If the answer to (A) above is in the affirmative, state

for each such person:

(1) His name and title:

Theodore D. Brown—Director—The First Na-

tional Bancorpors tion,

Inc. ; Executive Vice Presi-

dent and Director—The

First National Bank of

Denver

Frederick M. Farrar—Director—The First Na-

tional §Bancorporatien,

Ine.

Mahlon T. White—Director—The First National

Bank of Denver

William M. White, Jr.—Director—The First Na-

tional Bancorporation,

Ine.; Director—The

First National Bank of

Denver

George R. Bander, Jr.—Loan Officer—The First

National Bank of Den-

ver

Curtis S. Slife—Senior Vice President—The

First National Bank of Greeley

(2) The name and address of each bank or holding

company in which he owns or controls stock, and

(3) The number of shares which he owns or controls

in each such bank or holding company :

OE Ee er eR Re oe a ead 068 on oe 7 /

569

Name and Address of # of % of

Name Bank or Holding Co. Shares Held Total

Theodore D. Brown Security State Bank of Sterling

Sterling, Colorado 688 13.76

Frederick M. Farrar Exchange National Bank

Colorado Springs, Colorado 53,000 53.00

First National Bank of Pueblo

Pueblo, Colorado 76,368 60.91

Colorado Commercial Bank

Colorado Springs, Colorado 52,382 65.48

Mahlon T. White The First National Bank

Alamosa, Colorado 67 6.70

The Bank of Aspen

Aspen, Colorado 92 3.68

The First National Bank

Durango, Colorado 917 «61.13

Fidelity Bank and Trust

Monte Vista, Colorado 23,250 77.50

The Minnequa Bank of Pueblo

Pueblo, Colorado 890 617.80

The First National Bank

Salida, Colorado 43 4.30

William M. White,Jr. The Bank of Aspen

Aspen, Colorado 76 3.04

The First National Bank

Alamosa, Colorado 30 3.00

George R. Bauder, Jr. Metropolitan State Bank

Commerce City, Colorado 152 6.08

Curtis 8. Blife Farmers State Bank

Hawarden, lowa 40 4.00

In addition, Mr. Brown owns 40% of ‘‘ Brown Corporation”

which, in turn, owns 42% of the outstanding stock of the

Farmers State Bank—Yuma, Colorado.

The bank stock shown above stand in the name of ‘‘South-

ern Colorado Banking Co.’’ of which Mr. Farrar is a

General Partner.

In addition to the above Mr. Robert M. Gilbert, President

and Director of FNB Greeley and his wife own ‘‘ Monroe

Corporation’’ which in turn owns 400 shares of the Fort

Lupton State Bank—Ft. Lupton, Colorado representing

13,33% of the outstanding stock of Ft. Lupton State Bank.

Puastirr’s Exuisir 8

ANNUAL REPORT 1966

Tue Fimst Nationa, Bank

GREELEY, COLORADO

ai<eeiedieenminemion

Rex C. Eaton, Jn.

Executive Vice Provident

-— —-

‘

> WU ee eee ae ee Gees

per

nsfer

and was the maximum permitted under

to $2.84 per share, as compared to $2.35

shares outstanding. The per share tra

LAG per share. Although this is not capital, it

for The First National Bank of Grecley. The bank earn-

on 120,000

to $

per share; however, the total dollars paid in

due to the fact that we declared and paid a

for 1966 continued at $1.20

$120,000.00 to $144,000.00

dividend in March of 1966.

rate

from

stock

rates paid

growth

costs to our

Interest

the depositor is much

thy,

growth in our

point. Borrowing rates

years.

costs to the bank and when combined with

increased interest

level they have been in many

at an extremely high level. As a result,

interesting year from an economic stand

POOR copy

‘ 107

You will note further in this report the increases in our overall deposits. 1 am pleased to

point out this growth in tolul deposits as well as total assets by your bank,

During the past year we began offering to local physicians and dentists the Medac Medical

Billing Service. We fcel this is a very worthwhile program and are most pleased to have the

opportunity to offer this service to those in the medical and dental professions who have found it

to be a useful and time saving tool in the handling of their paticnts’ accounts.

We also in 1966 inaugurated the “lank Depositors Plan” for health and medical insurance.

Here again, we are offering a service that we feel is very worthwhile and urge all of our cus-

tomers to look into this program for their personal use.

I certainly can commend to you the people who are staffing your bank. 1 am most proud

to report that thirty-two staff members have been with our organization five years or longer.

The average years of service of your officer staff is twelve years. The average tenure of the

non-officer staff member is five years.

During 1966 your Board established The First National Rank of Greeley Foundation, Inc.

This is a non-profit foundation operated for charitable and educational purposes.

Frank W. Peterson retired at the end of 1966, after twenty-five years of dedicated service

staff in November, 1966, and is doing an excellent job of assisting the many loan customers

formerly served by Frank Peterson.

The economic climate in Greeley and Northern Colorado has been, over the years, very

stable. We are optimistic that the future of Greeley and Weld County will continue to show

like to feel that the philosophy of The First National Bank in the past, today, and in

best reflected in the statement — “The Banking Business goes where it is invited

cared for.” Our future wil) be to continue this simple but important

Cjul 0 billet?

OPEDATIONS, AUDIT, FIN CUCHEss DEVELOPMENT

OPERATIONS

The Operations Department at The First National Bank is under the immediate super-

~-visory responsibility of our Cashier, Alec Carte, with Al Vonfeldt supervising the teller func-

tions, and Dick Read heading up Bookkeeping. Fine service to our depositors is rendered by our

employees "oon areas. as, 1966 F ne a on —— hy savings

program very accepted and permit us uv mprove our

service to savings customers.

Data Processing has an ever-increasing influence in the banking business as it does in many

other businesses. The Colorado National Bank of Denver ly provides your bank with a wide

degree of service through its data processing center. r Checking and Savings Accounts are

Raa nk te the Wace ig toe Cet oe es,

ati ocesses ater ng for y wi ta process’

assistance from The National Bank.

AUDIT DEPARTMENT

Arthur L. Haviland is the Auditor of the Bank. He is responsible directly to the Board

of and devotes all of his time in assuring that proper auditing procedures are estab-

lished within our organization. 3

BUSINESS DEVELOPMENT AMD PUBLIC RELATIONS

Tom Fitzgerald devotes all of his time to Business Development, Public Relations, and

Sevorticing. He can call on any staff ~y my A ofan A “yy ete

supervisor Customer Service area in abby. area ve service

assistance to customers and non-customers coming into the bent.

hoy

Bank EI wh... Righttow!

—_-——

PADRD Po. ~~.

—

aia eminetinciinie ‘ sais meininiest-natiindeesni en ne a ee:

Worn, Jn, Assistant Cashier; Date J. Barstow, Assistant Cashier; Vinci. J. Mi

Assistant Vice ; Lomrx L. Garr, Assist Vice P , Roerar W. Parrexuuim, Assistant Cashicr.

7c 6.¢ Vice Pr + Custis 8 Burr, Senior Vice President; A. R. Muza,

COLMITZUCIE AND BISTALLENT LOAN DEPAISMENTS

The men pictured above represent those officers of the Bank who spend the majority of

om fn —_ 4 aga our loan customers. These men are al) experienced and well qualified in all

ing

Curt Slife is the credit supervisor. His superv responsibilities apply to both the

Commercial Loan Department and the Installment Loan ment. The other officers in the

Commercial Loan Department are; Adolph Miller, Chuck Carlson, Virgil Mathews, and Dale

. As you are well aware, a major function of any commercial bank is the proper ee

of funds to members of our community. We feel The First National Bank is well qualified

desires to make any worthwhile loan to assist any segment of our economy.

The First National Bank will consider any real estate loan, secured by residential, busi-

ness, or agricultural property. :

Our objective is to make loan advances to qualified customers, where the funds will be

used to promote the economic growth of the customer and our community.

Our Installment Loan Department is further staffed with Loren Gale and George Wolfe.

It is a complete Installment Loan Department, able and willing to service any reasonable request

for consumer or business credit.

On December 31, 1966, outstanding loans were $22,383,433.00. This compares with year

end loans in 1965 of $20,769,491.00 and in 1964 of $19,496,428.00.

The increase in the loan balances as reflected above further supports the desire of your

bank to service our borrowing customers. We shall be most pleased to have the opportunity to

offer our credit experience to any of our shareholders or to anyone you might recommend to us

and will actively work not only to increase the size of our loan portfolio, but also to maintain the

quality consistent with giving the service our community demands and is entitled to.

eo Ba ke.) eee

8FQnrgsc=

Bank F | CST . Right Sou!

A ce ae aoe ete $e Mat ¥ oy . . eT Fy . /

Cee BAe Sh SSN ode cele CRin ey

Our Bank offers a complete line of Trust Services. We

aining to Trust work and have our Trust

Mficer, and Russell F. Billings, our Farm

eptember 1, 1957, after having obtained his law degree

votes most of his time to farm management, and

ng one of the outstanding Farm Managers in this

ea. As a matter of interest, we do wish to report that our Trust Department has over 6,000

res of irrigated farmland under its supervision. We very definitely are sSecking any new Trust

isiness that may be available and do offer all of the services of this well staffed department to

u, our shareholders, your business associates, or your friends, We are completely equipped

handle your trust necds.

One of the important

‘function is to Supervise the operation of the Trust Depa

> asset management conducted

it is being operated on

basis of sound, well-thought-out decisions by this committee and you

pletely capable of handling all Trust requirements.

Wy ye cyp

Bank PUKGA. Lintt tow!

—-—— =

aay

r Trust Officer, and is ~~

TOTAL ASSETS (YEAR END)

oe ee De Ce ee Liem ieakeen eee i

|---| -- + | --- pe [eee fo

ma ern preenee aad eee |

eveaiion ae eee eee

= 4

F232

2o NH BZ 3232+ KHemMmUCUSC( CU HKHTCUCUC UTC

MILLIONS OF DOLLARS

TOTAL DEPOSITS (YEAR END

= i Pee, See be mar eed eee |

25 26 e7 266 2 HD FB 32 BD UM

MILLIONS OF DOLLARS

£222:

TOTAL LOANS (YEAR END

ee ees ed ee ed atetaell leteeard Mienaied ie

SAS | RAINE: UNAM [eRe wen fo ny

po ee ois aot }

PEER

iS 6 17 18 9 20 2 22 23 24

MILLIONS OF DOLLARS

RSE JOURS LER I IIR Te ae ae

7 2 a we ef ee “J 6

a" . j '

aa-.ad «0 ed i ad co

; OF GREELY

COMPARATIVE STATEVMSNT OF CONDITION

On December 31,

Cash on hand and in Banks

U. S. Government Securities - -

Municipal Obligations

Federal Reserve Bank Stock

a ae Oe ke a: a ee

Rie SS eet SOS ee Se

ae ne es ee ee on ro a ee

EPOSITS, LISSILIVITS, CAPITAL, AND REGERVES

On December 31,

Demand Deposits of Banks, Corporations, Individuals,

Partnerships and Miscellaneous Organizations - - - -

Time and Savings Deposits of Corporations, Individuals,

Partnerships and Miscellaneous Organizations - - - -

U. S. Government and Other Public Deposits - - - - - -

Total Deposits

Reserve for Loan Losses - - - - - - - - - - eee

Ads wok T.

1965

$ 4,366,251

4,038,832

4,030,497

60,000

600,000

20,769,491

735,646

125,087

67,422

$34,783,226

1965

$12,286,205

15,243,461

3,015,565

$30,545,231

$ 1,000,000

1,000,000

1,600,733

8,600,733

—

$ 76,276

1966

$ 4,410,310

3,991,516

4,865,725

75,000

22,383,433

767,243

106,195

181,198

$36,780,620

1966

$12,296,582

16,741,062

3,294,218

$32,331,862

1,300,000

1,162,573

3,662,573

$ 4,064,675

CODA EIVES STENT

OPTRAVING EARNINGS

Interest on Loans - - - +: ew oe

Interest and Dividends on Securities -

Other Operating Income - - - - += = - -

Total Operating Income - - - - - - -

OPERATING EX?PINSE

Interest Paid on Deposits - - - - - - -

Salaries and Employee Benefits - - - - -

Other Operating Expense - - - - - - -

Total Operating Expense - - - - - -

Net Operating Income Before Income Taxes -

Income Taxes Applicable to Operating Income -

Net Operating Earnings After Income Taxes -

Net Operating Earnings Per Share - - - -

(Adjusted for 120,000 shares)

Cash Dividend Paid Per Share - - - - - -

(Adjustéd for 120,000 shares)

COMPARATIVE

BALANCES FROM PREVIOUS YEAR, PER GOOKS

Or Gy: iSee MV ae

RECONCILIATION

MG MSINW SS

1965

$ 1,227,240

279,703

252,432

os 1, »759, 475

$ 636,823

386,678

__ 838,665

$ 1,362,166

$ 397,309

$ 115,722

$ 281,587

$2.35

$1.20

CAPITAL FUNDS

1965

Capital Stock

Surplus -

$ 1,000,000

1,000,000

Retained Earnings -

ADDITiONS

Net Earnings from All Sources - - - - -

DEDUCTION

Paid and/or Set Aside During the Year for Income Taxes - $

Cash Dividends Paid - - - - - - - - -

YEAR-END BALANCES, PER BOOKS

Capital Stock - - - - - - - -

Surpluu- - - ----+-+-+-e-

Petaincd Earnings - - - - - - -

In tho first quarter of 1966 a Stock Dividend of $200,000

was declared. and Surplus was increased by $300,000.

The total of $500,000 was transferred from Retained Earnings.

ditt Taxes applicable to 0 Income

and tax provision shown above is due to tax benofits on

het:

Bank Fie SI

1,466,538

$ 3,466,538

$ 300,871

46,676

- + -| §$ 120,000

$ 1,000,000

1,600,733

$ 8,600 8,600,733 733

Right Now!

1966

$ —

272,5

277, 009

$ 2, 008 070

$ 711,041

416,896

_318,308

$14 aj 446, 245

$ 561,825

$ 221,219

$. 340,606

1966

1,600,733

$ 3, 3,600,7 733

$ 310,022

$ 104,182

$ 144,000

$ 1,200,000

$ 1,300,000

1,162,573

$ 3,66: 3 662,573

BOARD

OF D

>) ee een

DELO vse) C25

Lic]

Joun W. Herprxsox

Attorney-AtLaw

Cant J. Maonuson

Former Colorado State

Farmer and Cattle Feeder

Joseru F. Purirs

President, Hensel Pheipe

Construction Company

Bank FIRS) riRST.

F oie

Puitir D. Weaven,

M.D.

Rightiow!

(NON-OFFICER STAFF MEMBESS:

Akin, Lois C.

Anschutz, Janet

Baggot, William

Baker, Mildred H.

Ball, Connie M.

Bichm, Dorothy Ann

* Castecl, Barbara

Chapman, Helen L.

Cox, Carol A.

Cumberlin, Carolyn

Daniels, Bonnie

Davenport, Sandra A.

Dawson, Sasha

DeGolier, Mary O.

DeVore, Dorothy

Ditter, JoDelle A.

Drewer, Patricia A.

DuBois, Donna K.

Fox, Judy M.

Foy, Nell

Gilfillan, Donald J.

Gordon, Velma R.

Grayum, Charles C.

Horner, Susan J.

Hyde, Harold L.

Jump, JoAnn

Jurgensmecicr, Mary

Kliewer, David

Lawson, Patricia A.

Mayes, Anne L.

Meisinger, Charlene J.

Menke, Joan E.

Meyer, Cordelia M.

Miller, Conrad J.

Miller, Norva J.

Paddock, Ann

Plowman, Leona

Piper, Janet I.

Riggs, LoRee E.

Roth, Phyllis A.

Schimpf, Delores

Schnell, Wilma M.

Simmons, Lorena S.

Sorensen, Beverly A.

Spier, Norman E.

Todd, Paige

Vielma, Fern F.

Walker, Dixie Lee

Werschke, Richard

Wilson, Dian D.

IN MEMORIAM — Joseph E. Grimes, Jr.

BANKING FOURS

Monday Thru Friday

9:30 am, — 3:00 p.m.

INSTALLMENT LOAN DEPARTMENT

9:00 a.m. —- 4:00 p.m.

DRIVE-IN WINDOWS

8:30 a.m. -— 5:30 p.m.

WALK-UP WINDOWS

8:30 — 9:30 a.m.

3:00 — 6:30 p.m.

Phone: (303) 352-1661

Bank FI RST. .. Right tow!

aogier oowlacs Aceouuts

Speecind Chaching Accounts

Bonkine by Mail

Coiapiote Savings Mans:

Siekemers Savings

Sovines Leviifieries

Ceriitienins of Denesit

Nisgi:? Donasitory

Complets Trust Desozivacnt

Faris Managonmont Service

fomplete Collection end Iscrow Service

a ard Credit Card

er Instalhnenit Losas

Thiify Auto Finance Plan

Thrifty Percoaat Louns

Thiity Nome Aapliance Locis

F.NGA. Home liaproyvement Loans

Foreign xchange Service

‘Travelers Checks

Moncey Grcers

Bank Drafis .

Compieic Drive-la Facilities

Free Parking Lot

Member F.0.1.C.

Meimber Federal Reserve Systens

COs MIS STANTS OF GOLINTEIS 1° .518.°SS

OPERALING TAL 4INGs 196% ims,

Interest on lmame «+ es ee ow en ee § 122720 § 14% Am

OPIRATING CK> int

Galeries and Employee Benefits - - - ~~ + + + 416.206

Net Opersting Income Before Income Taxes - « « «+ ~ & 2740 & “12%

Net Operating Warnings After Income Temes - - « + ~ & mise & 204%

Net Operating Earnings Per Share - . ee me Mm

(Ab preted tor 190206 ohare)

(Aedes ter 1 ere)

COL.YARATIVE WICONCILIATION OF CAPT. ruNcsS

BALANCES FROM PREVIOUS YEAR, PIR COOKS 1% | 1m”

Capitel Stock ae me oe ot oe Oe oe i ee ee ey § 1900000 § 100,900

Burpiee - * > * > * * * * * > * * * * > * > 1009, 900 1009 006

$ 8066.508 $ 9,000,738

ADMTiONS

orovucrins

es eather Gt Aetty Dentag Go Cane fee seme Ts - &$ “n% $ 106,182

VEAR-IND CALANMCES, PER BOOKS

Copitel Stockh - - - ~~ ese ce ee eee § 1,900,000 § 1,200,000

Petained Warnings - - - + - i i, 3h. ee 100,733 1162573

6 3,600,733 6 306257

—— Jf

~ RR»

LOAD OF DIe70S

ibe Po IS £26

(MOM-OFFICER STAFF ptrAantes,

Akin, Lois C. Jump, JoAnn

Anschutz, Janet Jorgenameter, Mary

Bagge, William Kiiewer, David

Baker, Mildred i. Lawson, Patricia A.

Ball, Connie M. Mayes, Anne L.

Bichm, Dorothy Ann Meisinger, Charlene J.

Castel, Rarbars Menke, Joan ¥.

Chapman, Helen L. Meyer, Cordelia M.

Con, Carel A. Miller, Conrad J

Combertin, Carvtyn Miller, Morva J

Daniels, Tonnie Paddock, Ann

Davenport, Sandra A. Plowman, Leona

Dawson, Sashes Piper, Jenet 1

DeGotier, Mary O. Riggs, Lolee FE.

DeVore, Dorothy Roth, Phyllis A.

Ditter, JoDetie A. Bchionpt, Delores

Drewer, Patricia A. Scheel, Wiles

DuBois, Donna K. Simmons, Lorena 6.

Vou, Judy MM. Sorensen, Veverty A.

Spier, Norman E.

Gilfitian, Donald J. Todd, Paige

Corton, Velma i. Vielma, Fern ¥

Grayum, Charles C. Walker, Dixie Lae

Horner, Gusan J. Werschhe, Richard

Hyde, Harelé L. Wilson, Dian D.

BANKING HouRs

Monday Tere ¥riday

Mem 6 om

WET ALLMTNT LOAM DEraeT meer

Mem ~ (om

OIVEIN winnows

‘Ham 0 om

WALKUP winnows

"~~ om

eo — 6 om

Peewee (363) 0108)

frank FARST sigh tow!

e409 * 6 4% “arn *A*ue * > more “Jee ce

WHtethe ona.” te boa 3 OD Sed é gD

een Sovlucs Acer ints

Special Checking Accounis

Benkion by SAail

Coipiets Saviucs Mons:

Ststemart Savings

Sevincs Certifiecies

Coriisient2s of Dsnosit

Safsiy Merosit Vexes

Misit Devocivory

Complete Trust Dasorisacnt

Faris Monogonsent Lervice

Complore Collection ed Zscrow Service

Bor. kAimoricard Credit Cord

Macae Medics! Dilling Service

Sank Bapestse.s tees Man

Agrieuliozal Lous

Livestock Lovins

Aca stale Losns

Orsisess Locus

Tavilty Inctellinent Losas

Thiiity Auto Finance Plan

Thrifty Perconst Lowns

Thiifty Home Aspliance Locns

PHA. Home baproverient Loons

Forsign Exchange Service

Trovelors Chocks

Money Orcors

Bank Prafis

Corapieio Drive-la Focilizies

Froe Porking Lot

Member £.0.1.C.

bhember Federal Reserve Systera

POOR Copy

PS PRS AL:

Prarntirr’s Exuit 9

Tue First Nationa, Bank

GREELEY, COLORADO

ge Fn Ig s 8 Soe ween > a a Ps

——

PRESIDENT’S LETTER

To Our SHAREHOLDERS:

1967 was a very successful year for The First National

Bank of Greeley. Further in this report you will find the

detailed figures pertaining to assets, liabili_ies, capital ac-

counts, earnings and taxes. But very briefly, I would like to

report to you that the net operating earnings per share in

1967 were 3.08 compared with 2.84 per share in 1966. As you

will note, the total income for the year was the highest in

the bank’s history; likewise, total expenses for the year

were the highest in your bank’s history. Interest paid on

time deposits accounted for a major share of these increased

costs. With the declaration of a special 30¢ per share divi-

dend paid on December 22nd, the total dividends paid for

the year 1967, amounted to $1.50 per share, representing a

25 per cent increase over the dividends paid to you in 1966

and a 50 per cent increase over dividends paid to stock-

holders in 1965.

During 1967, we were proud to announce the election to

your Board of Directors of Mr. Martin R. Domke, well

known cattle feeder in Northern Colorado and throughout

the state, and Mr. John L. Haley, President of Nelson,

Haley, Patterson & Quirk, Inc., a very successful consulting

engineering firm located in Greeley. We were all saddened,

however, by the passing of Mr. O. G. (Gus) Edwards. Gus

died September 4th and will be sorely missed by your bank

and its staff. His efforts on behalf of your bank as a Diree-

tor for twenty-six years are incalculable. Gus devoted much

of his life to public service and his judgment and foresight

have played a major part in the growth of this community

and of your bank during the past twenty-six years.

The staff of your bank continues to grow and as President

I am extremely proud of the fine efforts put forth by all of

our staff members. As of the first of the year, the total num-

ber on the staff consisted of seventy-one employees. This

includes the young men from the college working on a part

time basis who continue to do an excellent job for us. Mr.

Norman Wood joined the staff February 1st and is now

supervisor of the Bookkeeping Department. John Long

joined our staff in June, 1967 in the capacity of Agricul-

tural Representative and Appraiser. We were then able to

583

584

shift Bob Pappenheim into commercial loan officer duties

where he was needed. Russell K. Haney, recently retired

from the United States Air Force, joined our staff on July 1,

1967, and is in the Trust Department serving in the capacity

of Trust Administrator.

As will be explained to you later in this report, in April,

1967 we became the agent bank for the Colorado Bank.

Americard headed up by the Colorado National Bank of

Denver. Also as hereinafter more fully reported, your bank

purchased the balance of the property west of the present

bank building. This property will be used for parking, and

for the future growth and development of the bank.

In December, 1967, the Board authorized the transfer of

$200,000.00 from undivided profits to surplus, giving us a

surplus account of $1,500,000.00 thereby, increasing our

legal loan limit, under the normal method of computation,

from $250,000.00 to $270,000.00. This limit is the highest of

any bank in the northern part of Colorado. With the growth

of our bank, our community and the borrowing requirements

of our customers, it was felt that this expanded legal limit

would permit us to do an even better job of anticipating and

servicing requirements of our borrowing customers.

What the future holds is, of course, important to any

shareholder. Certainly we are anticipating that the con-

tinued cost of time deposits will remain high. We are now

and have been for some time paying to our time depositors

the maximum return on their deposits permitted under cur-

rent regulations for each type of time deposit; and as you

will note further in this report, this was the single largest

expense in the operatron of your bank during the past year.

As a corallary, this will continue to create high borrowing

interest rates compared to those our customers were accus-

tomed to some years ago. There has been no upward

increase in our lending rates during the past year, though

the future still is uncertain in this respect. Mortgage money

softened to some degree during the first half of 1967, how-

ever, the second half found the mortgage money market

reversing itself and mortgage money is now as costly as it

was a year ago. Short term borrowings, at least locally,

appear to remain at the same rate as they were, however,

there has been an increase in the Eastern money market in

this respect and adjustments may have to be made.

Like all other businesses, we must plan on increased costs

during the coming year. A major factor in this respect is

the increase in the minimum wage for the second straight

585

year, increasing this cost from $1.40 to $1.60 per hour effec-

tive February 1, 1968. Other adjustments in salaries are

also necessary due to the fact that in 1967, there was a

3 per cent increase in the cost of living. Your bank is aware

of the inroads of these inflationary costs on its employees’

salaries and is endeavoring to adjust compensation as

necessary to reward and retain a fine staff.

The economy, in this predominantly agricultural area, is

undergoing serious and far-reaching changes. Prices on

farm commodities have certainly not risen with costs and

the farmer finds himself in an uneasy, if not precarious

position. Our staff is well aware of these problems and we

are constantly attending «nd participating in conferences

and seminars designed to acquaint us with modern methods

of dealing with them.

Retail sales in the community held up well during the past

year and as Greeley continues to grow, certainly the amount

of business in our community should grow. We must never

overlook the economic and cultural impact of Colorado State

College on our community. We are all becoming more inter-

ested and dedicated in the needs and aspirations of this

great educational institution.

We are also working with the people from Aims College

and endeavoring to assist them in any way possible in the

establishment of this fine new educational facility in our

community.

As stated in last year’s report, we continue to believe that

the growth of The First National Bank in the past, today

and in the future is best reflected in this statement: ‘‘ Bank-

ing business goes where it is invited and stays where it is

well cared for.’’ Our endeavors will be to continue this

simple but important philosophy.

In concluding this report, we would like to ask of our

stockholders a continuing awareness of the help and assist-

ance they can give to The First National Bank. Your efforts,

as much and in some cases more than the staff’s, can direct

new accounts and business to us. Your observations and

suggestions on bank services and the performances of bank

personnel are solicited. Your loyalty and support will be

rewarded by a better First National Bank serving you and

the Northern Colorado area.

Sincerely,

/s/ Robert M. Gilbert

Rosert M. GitBert

President

a eras

: te

;

a ta eatae fe.

Decen:ber S!,

RESCUTCES 1957

Cash and due from banks - - - - - + = = «= = = $ 6,229,004

U.S. Government obligations - - - - - + + - = = 4,068,309

Obligations of States and political subdivisions - - - - 6,659,838

Bank premises and equipment - - - - = - -- 913,843

Other assets - - - - - - = = = = + = + = =] 123,614

Total Resources - - - - - - + = = = = = = | $ 41,538,634

LIAZILITIES AMD CAPITAL

LIABILITIES

. Demand deposits - - - - - - = - = = = = = =) $ 15,101,800

NSS eos 6 6s bh ns so ek) ee

DIS 6 36g <6 06-65 5 a6 2 Se

Federal Funds purchased - - - - - - - - - + -! — 1,000,000

Provision for interest, taxes, expenses, and |

unearned discount - - - -+-+-+-+-+s+s 409,394

Reserve for Bad Debts- -----------! 452,614

CAITR. MOSSE J |

Capital Stock—common—total par value - - - - - - ' $ 1,200,000

120,000 shares authorized

120,000 shares outstanding :

BGM we ee wwe we eee Ke 1,500,000

Undivided Profits - - - -----+----- =, 1193470

Total Capital Accounts - - - --- ---- - $ 3,893,470

| $ 41538 634

TOTAL LIABILITIES AND CAPITAL - - - - - - +--+ &

In general, the cash basis of accounting has been used except

for accrual! of installment loan interest, savings interest, and

major items of expense and income taxes.

Leh... Ronco!

December 23,

1936

$ 4,410,310

3,991,516

4,865,725

75,000

22,523,434

167,243

_____147,392_

$ 36,780,620

$ 14,450,965

_17.880897

32,331,862

384,083

402,102

$ 33,118,047

$ 1,200,000

1,300,000

__ 1,162,573

$ 3,662,573

$ 36,780,620

: “199

SVATZUIENT OF HOTA hbase 14

OPERATING INCOME . 1967. 1966

Interest and fees on loans - - - - - 2.2.2.2... $ 1,601,746 $ 1,463,323

Interest and dividends on .

US. Government obligations - - - - -. 2... . 161,178 146,028

Obligations of States and political subdivisions - - . . 171,620 122,276

PMN Fos 6 nw ck kt 8 6 lc ° 4,500 4,328

Service charges on deposit accounts - - - . . . -- 111,557 110,240

ee OL 8 se sc te 6 tt we oe i 64,572 64,273

Other operating income - - ~~... 2.2... -- 77,261 58,838

Total operating income - ---.-.....2.2.~. 3

OPERATING EXPZMSE

Salaries and bonuses - - - ~~~... 2... $ 407,782 $ . 362,398

Pensions, profit-sharing and

her employee benefits - - -.-..... - e 79,368 46,978

Interest on deposits - --.....2.. 2 - 856,704 711,186

Interest on borrowed ips on, thee dk a a ke ee 1,775 678

Net occupancy of bank premises - - - . . | er 57,352 64,125

Equipment rentals, depreciation, maintenance - - - - 28,828 21,962

Other operating expense - - - - - 2. 2. . - + - 209,297 200,154

Total operating expense - - - .-.- 2.2.2... é

OPERATING EARNINGS BEFORE INCOME TAXES - - | ¢

INCOME TAXES APPLICABLE TO OPERATING

Sees 2 9 8 els 6s 6 5 ys ss oe tS ee

MET OPERATING EARNINGS ---......./ 8 369,982

Ee PR Oe ae ee ee $3.08 $2.84

NON-O?22A TING ADDITIONS, MET AFTER TAX EFFICT

551,328 $ 561,825

Net security profits --.-.-..... oe ee $ 64,662 None

recoveries not credited to reserve- - - . . - 452 964

nn 9 CLE fe care ok ee ae ae ae 20,016 13,860

Total non-operating additions - - -......./ 3 ___ 85,130 $14,824

NON-O?2RA7ING ADDITIONS, MIT AFTER TAX ceFECT

Net security losses - - - 22°. 2 vi eT oe ee None $ 23,186

Transfer toreserve- - - - . .*. .. . ce tar 42,686 85,716

PO I ee OR Me Se eee gt ae 1.529 40,683

NET NON-OPERATING ADDITIONS (DEDUCTIONS) - - $ 40,915 $ (134,766)

TRANSFERRED TO UNDIVIDED PROFITS - - . . . _ 410,897 $ — 205,810

5 they % tT: fv) “7 '

Bank rll Pight sons

Aus BAS = i

s ; on ; ™ wii

RECONGILENMENT OF CAPITAL ACtouUN TS

; Bers 967 1966

Balance, beginning of the year - - - - ---+---.--./| $ 3,6¢ 5738 $ 3,600,733

Addition :

Transferred from Statement of Earnings

Deductions:

Cash Dividends declared:

1967 $1.50 per share- - - - - ---+--+.. 180,000

1966 $1.20 per share- - - - -- +--+... ____ 144,000

Balance, end of the year - - -------.-.-.. $ __3 893.470 $_ 3,662,573

410,897 205,840

PeN Py 8 Ree i eel pe re ee Se U's aeons Swad Enwedecd ch sad

. Reserve for Loan Losses

pursuant to IRS rulings

: | 1go7 i 1Lts

Balance, beginning of the year - - - - - +--+... . $ 402,102 $ 378,225

Recoveries credited to this reserve - - - - - - .- - | 6,531 19,795

Transfers tothisreserve- - - ---+----.-+.. | 92,794: 175,777

eS ee ee eee be ek 8 8 eee 600,427 573,797

Less losses charged to this reserve - - - - - - . . - 47,813 _171,685

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Sheed ceed

The above picture is of the property west of

the present banking quarters. The First National

~-Bank completed acquisition of the remaining

property in this half block during 1967. Also,

upon the completion of this acquisition, all struc-

tures were removed from the property with the

exception of the small building located on the lot

currently being leased from the bank by Joslins,

our next door neighbor.

Joslins currently has long term options that

they can exercise on the use of the.lat immedi-

ately west of the bank, but we are presantly ne-

gotiating with that company to relocate their

parking arca so that the property closest to the

bank will be available for bank customer parking.

With the development of the ground west of the

Bame FIRS

Li hee tenn Staite

e-em Sey -<—~ er rw rn ee comm th

: Gace? * Merah pa

“a - oe Meme fue

° : aaa fem s <i ot war: s =;

E<* oe RS se a SF ae COP 1c Hilts Ps Jam Mee Wrst mae

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f ~ ¢ es ’

te: as ~

ies Ta te F |

¢° Zt” “~ es Wes weet St oe —— os

Lf |. tice gc oe ag

bank, through attractive retaining walls and

landscaping, we hope to further improve the ap-

pearance of The First National banking corner,

offer much better parking for our customers as

well as providing some rental parking spaces for

tenants and other downtown businessmen. At the

same time, we are confident we can provide Jos-

lins with very adequate parking for their store

for the balance of their current lease and for the

subsequent options, should they elect to exercise

these options.

In the long range future, this ground will pro-

vide the area for additional drive-up facilities or

other plant expansion as may be deemed nec-

essary.

: Se ee ee

In January, 1967, The First National Bank,

through The Colorado National Bank of Denver—

licensee bank for Colorado, became the agent

bank in Greeley for the nationwide BankAmeri-

card Program. This fine credit card program en-

compasses seventcen states and England, where

it is known as the Barclay Card.

The First was one of the original fifty-five

participating banks in Colorado to enter into the

all-purpose credit card program known as the

Colorado BankAmericard.

Colorado, as a unit banking state, presented

a unique situation for the introduction of a state-

wide credit card system. In niost other states

where BankAmericard is of fered, the branch sys-

tem was utilized for full coverage. In Colorado,

there was developed an agent-correspondent re-

lationship with the licensee bank for the market

penetration needed. It appears to be “working

smoothly. i

BankAmericard is an all-purpose credit card.

The holder, who need not be a customer of The

First National Bank, The Colorado National

Bank or any other agent bank, may conveniently

purchase and charge at thousands of retail, serv-

ice and professional establishments throughout

Colorado as well as sixteen other BankAmericard

states.

There is no charge to acquire the card and

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