# Appendix — United States v. First National Bancorporation, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385001_1562%3A02 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1972 - **Citation:** 405 U.S. 915 ## Text Pik + S ale 7 _—_ Jn the Supreme Court of the Anited States Octoser Term, 1971 No. 71-703 Unirep States or AMERICA, APPELLANT, v. 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. i ii 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] 7" 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] Page 218 235 262 276 276 286 293 295 297 297 299 299 300 301 301 303 303 304 304 305 305 306 312 314 318 321 322 324 326 326 331 342 342 345 346 347 350 367 373 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 SRRZIISII3 Sf SSeSs 42 PAT P51 P57 . vii PEPE SPER ELLOS F POP SCHRPOSCBAE SD ORDO RECCLOSEEES oe OPO SCSSCSP ESS SHO SSPE VO SRO CORO ODES ebO oe eee Seo SPBEERO SPEEDED BODES OR bee bbe Ea ew OPS CASSAP SEPA SRE CCE SOPODEDEODEORObS® Aha alimet ace ted hahnehul di el eae Pee SPAY Ta a ae A what drt det RF fe eo eS ey 2 ee 2 PE SHPSSCSOSLOSOLOVO OSPR eR AReEC ROCCE SOeOS het telat etliatite im ode dt hw ee ee Dt ef On eS Oe eee 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 Co oe POC OPER P POPPER OKO RD Ow SSD Oe ebb oe wt apt Mal Bid tig ith eee PLL aS ae ae a ae OOO PSS OMVPOP RP RAV ROD Ge EOD E66 RKO b oe eee SCSI LOPS REESE PP OOH HORE ODOR OS ieee tidied thi dmtten tI eeRa OLE Tea eee ae ere SPOO SOE FC OPE CPR ECCS RD ODDO LOO 2 bOOC KS Se a er SSO SCE PPAR ASO AOD HERE ORORORE OOO a ee OOP OSES SOOO SPO RAD EDO OOOAR ODOC CSE 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 a OP OSCE OOP OS OOIOFODF OBO HRPOEKEODOC DOS dE tl tattle thelial ee ae ee a a a a a ee eee ont ah het atta do Li ee eee a | co ee ee ee a PPP SSSOSRSSCOPP OVD Sede vaerveersesesvéiover Seating bhi bind ihe CRE LOREM OEE ee a eee Pw re ROSS SSCSGASGPSSOSIOOPIFOHAOO DSDEDSO2Oe® a PROSE OSIP CSOSA OP ORL OO ADCOP ORE SS Tu SEPP SOO SSSSCIOP VETO PC RD OPH 60K 008600 BS? Pl allel a a dite dt Ld he | Ua a ae a ee ee a EER OSSSSOOSOS COPPA ODDS DO DEEHTHOO ZOOS LS 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 SEP POPS OSSESSESSSIPPIPFOHMSDIADD ESOL E ZOD ObOLbS Tree le SESOAOOCESOF SOS OSAP O Deane vebwerewbiann Wee SSS ASOSASORS ORES OOF OR 8100407008066 66% BSSSOOLRSESSESSSOSCEOPO SPP SSASHOSOL&EBAS OTS LSESE6O Page 1127 1127 1128 1128 1129 113] 1133 1133 1134 1135 1137 1138 1139 1140 1142 1144 1146 1148 1150 1152 1152 1153 1154 1155 1156 1157 1158 1181 1185 1187 1189 1191 1191 1192 1192 1193 1193 1194 1194 1195 1195 1196 1199 1222 1225 1228 1229 1229 1230 1230 1231 1232 1233 1234 1234 1235 1237 1237 1238 1238 1239 1240 1249 1252 1255 1258 1258 1259 1259 1260 1261 1262 1262 1263 1263 1264 1265 1265 1266 1266 1267 1269 mame fie PEE 4 ag P-241 ix 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 CHS SHHHHHHEEHOHEOHEEHEHH HHH OHHH EEO ESO LES CHOOSES HHHHOHHHOSEHHOBHROEOHO LEO ECEEL OLE HOLES ddd eee ee ee a 2 a a a a oe PEC PC SCOOP SOC OSHPOSVBAEAPARSOOBASECHCASER ORB OSBEOS CHP HCHHCHHEHSHHEHOHG HOHE HEHH OE HEEHOHO SOOO EE BOB EEO OOS SCHPCHHHHEHLHOHSEOHECHHHOOHOOE OHH O HOFER BO OEE EEOEE®S SCHPCHHHHEHOHHHHHHEEEHEHO HEH BEOEERE OLE EOEEO®S DERE ee a a a a a a 2 2 ee a a 2 terre ee a a a a a a 2 a 2 a a 2 a 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 SCCHHCHPCHEHOECHHHHOOPEOC HOCH CEO O8HE0HEE REE OEEE OS SPROOHCHFHOHHOHRSHHOFCHEFCOSFCOCBO LOBE ORHRECOHEOOOCEOEEE CRPOCHESESSHHSHHPAOSOPASCEEHOHOROCSEOROBCOEBBOESOEOCSE CPPS HHHSHEHECHHOHEOHOHHEHCHEOCOHOEHE REAR EOH EO EBEOEE CPOCHE SOR CASSIS OAPOSPAID PKCD BOD OPD ESD C6E CED OS COPSHHSHOFCHHCHOHHE AOR FCHOHROO LO BOLO OLE OELOBOLELEO SER SOHOSCHSPHRORPOOC RPO BCPACIDAP oO CECH OOS SEO bOC 46 eES OHOPCSHCHOFCECHOCHOHSPOCHOHRERESCOHHOCHOBHBOKEOHOEOEEEOS PHPCHEHODOCSCHFOFPHOSSEBE HOLA HOHLHOEAOLOABLHEDLOOECEOECOS SCPOSHCHSHESOHDEHOHOECPCFC CHOCO OHO ROLLA OBESE ORES®O SCHPSHHCFEOEHPFCHEROGHOHEEOSHCHOHOECHEHO HOR HHEO OEE SPROSHKOCCeCSHOSCHVSAC RTOS eCSEOSE RES AbASC CBORD ASB OSBS Bae Page 1270 1281 1294 1294 1295 1296 1297 1298 1299 1301 1303 1304 1305 1305 1306 1306 1307 1308 1309 1311 1313 1314 1315 1316 1317 1318 1319 1320 1321 1322 1323 1329 1337 1371 1373 1375 1376 1379 1380 1381 1382 xi 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 Page 1760 1764 1794 1795 1796 1797 1798 1799 1800 1801 1802 1803 1804 1804 1805 1814 1815 1827 1880 1896 1911 1927 1961 1968 1988 1990 1997 1997 2000 2001 2002 2003 2005 2009 2020 2022 2023 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 2030 2031 2032 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. (c) The name and address of each bank which is not a 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 Directors Directors Directors oe a er tt ee aS aaah esa Letter to the Shareholders ConTENTS Consolidated Financial Statements eT 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. ee Se Se SES Se EE ee Se SE = SE ee Se Se ee oe —— 8 ee ee eee —* wh 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 Bere Premcas wrt Oprgre-t Love bes mates Ueorecatam Menta 4) 19.591 42 19879479 Copttgomears be cagtaree | atptiy m2 wm ee come EC arrad ence at saya sarin Owns hanews , 40% 13/704 tne WH St4 HH 19 019 LiAmUUITIES Coens (8) O0mard Sx ee 19 $9 OAH 0) Teme ‘ 00 waz 379477 lone 94 S21 minre Fecerat bunts Purchased and Sac urtees wet peda ba sammarts 6 Raga hate 21414607 -6- 8 nts Dewi pmet 18,0 -0 Uva + Vay site Seta smo $82 DOA ae 207 wes weceme Coftactes Ureared toe we ‘sso Ppa | Prey £971,719 411m Ven 692.700 smawmee Merwe ty eter es Oo bers Bares m3 612 mic Ser arcnders taety amon Pee as 514 79. 919579 DIRECTORS w CONS ONS ee \aewew ons tony Conga i — ~~, mere c wecmty ” , — ee Sao “Bt O mise whew cote wattom | A we i ae Oe ‘ee... p mn neh ate wwewe named Orr, w eCom es ¢ agente ss oe om ———_—so— 4 Ses scpmean 8 v OFFICENS G evorvort : Ont Gout oom 2s i nme et ae Graeme APAD H POTS omen meet . Oe nox Com as 6 80% Revtot Gade Pung wt (uctet 4 sOeus or nee “commot oe 3 o ae Ocoee ond Cannot — Peete beets Bey enn One OE O ME LANE (ownru @ a MOET A am Cea tnt Oe gum "nd CHAD S FITIGERALO oo | ed ——_ (46 C agener 0h OR Oe te Whee ete tomens com Sass sass ee OE: SE me ae eee Se etm ere eee eee ween ee ihe ME beret Nee Bleed conte hte hte 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 | t i ! . ’ 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 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? aT 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? ie 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 . _—_— I 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. i 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- ee a 6 a 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. aa Puastirr’s Exuisir 8 ANNUAL REPORT 1966 Tue Fimst Nationa, Bank GREELEY, COLORADO ai 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 $ F 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 Hf if i 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. ~~. — 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 ~~ Be 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 2 © ©@ #@ £2 6 © © 4 # 6 @ @ 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 7 a 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 $ 1,000,000 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 in OF D >) ee een DELO vse) C25 Lic] Joun W. Herprxsox Attorney-AtLaw di Cant J. Maonuson Former Colorado State Farmer and Cattle Feeder Ly Joseru F. Purirs President, Hensel Pheipe Construction Company Bank FIRS) riRST. La 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 Se 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 Interest and Dividends on Gocuriiies - - - + + + © 279,703 27263 Other Operating Income - «© - «© «+ * + © » a wa _ Saat me) Total Operating Income - - - + + + © © ee $ 17147 $ 208,970 OPIRATING CK> int Interest Paid on Deposite ~~ - - + © + et ee & 66723 $ 71190 Galeries and Employee Benefits - - - ~~ + + + 416.206 Other Operating Expense - - - - © ~~ = +++) Sanne _ 3808 Total Opersting Expense -© ~~ + + + ee © 1.262.166 § 1406205 Net [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385001_1562%3A02. Public record. Not legal advice.