SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB/A
(Amendment No. 1)
______________
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the Fiscal Year Ended June 30, 2002.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the transition period from __________to __________
Commission File Number: 0-23409
-------
HIGH COUNTRY BANCORP, INC.
--------------------------------------------------------------------------------
(Name of Small Business Issuer in its Charter)
COLORADO 84-1438612
-------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
7360 WEST US HIGHWAY 50, SALIDA, COLORADO 81201
----------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number, Including Area Code: (719) 539-2516
-------------
Securities registered pursuant to Section 12(b) of the Exchange Act: NONE
Securities registered pursuant to Section 12(g) of the Exchange Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
--------------------------------------
(Title of Class)
Check whether the issuer: (l) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES X NO
--- ---
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State registrant's revenues for its most recent fiscal year: $14,618,481
The aggregate market value of the voting stock held by nonaffiliates of the
registrant based on the last sale of which the registrant was aware ($19.60 per
share on September 16, 2002), was approximately $10,181,357. Solely for purposes
of this calculation, the term "affiliate" refers to all directors and executive
officers of the registrant and all stockholders beneficially owning more than
10% of the registrant's common stock.
As of September 16, 2002, there were issued and outstanding 905,409 shares
of the registrant's common stock.
Transitional Small Business Disclosure Format (check one): YES NO X
--- ---
EXPLANATORY NOTE:
This Form 10-KSB/A is being filed to correct several inadvertent
typographical errors on the Consolidated Statement of Income for High Country
Bancorp, Inc. (the "Company") for the fiscal year ended June 30, 2001. This Form
10-KSB/A corrects typographical errors in Basic Earnings Per Common Share,
Diluted Earnings Per Common Share, Basic and Diluted Weighted Average Common
Shares Outstanding and Dividends Paid Per Share for the year ended June 30,
2001.
PART II
ITEM 7. FINANCIAL STATEMENTS
-----------------------------
GRIMSLEY, WHITE & COMPANY
Certified Public Accountants
And Management Consultants
301 Raton Avenue
La Junta, Colorado 81050-1697
719-384-5489
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
High Country Bancorp, Inc.
Salida, Colorado
We have audited the accompanying consolidated statements of financial condition
of High Country Bancorp, Inc. as of June 30, 2002 and 2001, and the related
consolidated statements of income, equity, and cash flows for the years then
ended. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of High Country
Bancorp, Inc. as of June 30, 2002 and 2001 and the results of its operations and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Grimsley, White & Company
GRIMSLEY, WHITE & COMPANY
La Junta, Colorado
August 27, 2002
1
HIGH COUNTRY BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
JUNE 30, 2002 AND 2001
ASSETS 2002 2001
------------- --------------
Cash and amounts due from banks $ 2,873,502 $ 2,759,671
Interest- bearing deposits at other institutions 8,590,443 9,175,856
Mortgage-backed securities, held to maturity 10,306,936 2,220,909
Securities held to maturity 303,039 --
Loans receivable - net 143,195,129 135,916,318
Loans held for sale 642,000 917,500
Federal Home Loan Bank stock, at cost 2,421,600 2,421,600
Accrued interest receivable 1,299,341 1,121,412
Property and equipment, net 6,069,688 6,111,907
Mortgage servicing rights 6,788 14,504
Prepaid expenses and other assets 693,583 508,187
Deferred income taxes 183,100 162,800
------------- -------------
TOTAL ASSETS $ 176,585,149 $ 161,330,664
============= =============
LIABILITIES AND EQUITY
LIABILITIES
Deposits $ 116,142,046 $ 98,517,228
Advances by borrowers for taxes and insurance - 29,724
Escrow accounts 657,271 1,070,624
Accounts payable and other liabilities 1,013,064 988,588
Advances from Federal Home Loan Bank 42,641,665 44,124,999
Accrued income taxes payable -- 40,167
------------- -------------
TOTAL LIABILITIES 160,454,046 144,771,330
------------- -------------
Commitments and contingencies
EQUITY
Preferred stock- $.01 par value; authorized 1,000,000
shares; no shares issued or outstanding -- --
Common stock-$.01 par value; authorized 3,000,000 shares;
issued and outstanding 905,409 (2002)and 1,028,992 shares (2001) 9,054 10,290
Paid-in capital 7,262,469 9,151,686
Retained earnings - substantially restricted 9,461,842 8,215,667
Note receivable from ESOP Trust (521,065) (626,865)
Deferred MRP stock awards (81,197) (191,444)
------------- -------------
TOTAL EQUITY 16,131,103 16,559,334
------------- -------------
TOTAL LIABILITIES AND EQUITY $ 176,585,149 $ 161,330,664
============= =============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2
HIGH COUNTRY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED JUNE 30, 2002 AND 2001
2002 2001
------------ ------------
Interest Income
Interest on loans $ 12,092,902 $ 11,926,363
Interest on securities held-to-maturity 306,060 178,492
Interest on other interest- bearing assets 356,547 226,839
------------ ------------
Total interest income 12,755,509 12,331,694
------------ ------------
Interest Expense
Deposits 3,488,371 3,662,818
Federal Home Loan Bank advances 2,579,583 2,670,482
------------ ------------
Total interest expense 6,067,954 6,333,300
------------ ------------
Net interest income 6,687,555 5,998,394
Provision for losses on loans 236,000 385,000
------------ ------------
Net income after provision
for loan losses 6,451,555 5,613,394
------------ ------------
Noninterest Income
Service charges on deposits 262,747 209,496
Loans sold 802,851 408,872
Title and escrow fees 354,265 305,278
Other 443,110 301,065
------------ ------------
Total noninterest income 1,862,973 1,224,711
------------ ------------
Noninterest Expense
Compensation and benefits 3,378,607 2,742,264
Occupancy and equipment 1,261,385 1,115,756
Insurance and professional fees 289,121 249,549
Other 687,627 648,075
------------ ------------
Total noninterest expense 5,616,740 4,755,644
------------ ------------
Income before income taxes 2,697,788 2,082,461
Income tax expense 1,026,449 810,082
------------ ------------
Net income $ 1,671,339 $ 1,272,379
============ ============
Basic Earnings Per Common Share $ 1.90 $ 1.30
============ ============
Diluted Earning Per Common Share $ 1.85 $ 1.30
============ ============
Weighted Average Common Shares Outstanding
Basic 877,653 975,855
Diluted 905,173 979,255
Dividends Paid Per Share $ 0.500 $ 0.500
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
HIGH COUNTRY BANCORP, INC.
CONSOLIDATED STATEMENTS OF EQUITY
YEARS ENDED JUNE 30, 2002 AND 2001
NOTE DEFERRED
COMMON PAID-IN RETAINED RECEIVABLE STOCK
STOCK CAPITAL EARNINGS ESOP AWARDS
------- ------- -------- ---------- ---------
BALANCES JUNE 30, 2000 $ 10,712 $ 9,720,159 $7,433,495 $ (732,665) $ (324,052)
Net income 1,272,379
MRP stock awards 290 132,608
ESOP contribution 37,977
ESOP note payment 105,800
Stock purchased and
retired (422) (606,740)
Dividends paid (490,207)
-------- ----------- ---------- ---------- ----------
BALANCES JUNE 30, 2001 10,290 9,151,686 8,215,667 (626,865) (191,444)
Net income 1,671,339
MRP stock awards 18,583 110,247
ESOP contribution 77,796
ESOP note payment 105,800
Stock purchased and
retired (1,236) (1,985,596)
Dividends paid (425,164)
-------- ----------- ---------- ---------- ----------
BALANCES JUNE 30, 2002 $ 9,054 $ 7,262,469 $ 9,461,842 $ (521,065) $ (81,197)
======== =========== ========== ========== ==========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
HIGH COUNTRY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2002 AND 2001
2002 2001
------------ ------------
Operating Activities
Net income $ 1,671,339 $ 1,272,379
Adjustments to reconcile net income to net cash provided
by operating activities:
Amortization of:
Deferred loan origination fees (182,137) (137,549)
Premiums on investments 169,735 5,124
Loss on disposition of equipment 8,326 12,598
Compensation expense on ESOP shares 105,800 105,800
Compensation expense on Management Recognition Plan 73,651 132,897
ESOP market value expense 77,796 37,977
Provision for losses on loans 236,000 385,000
Deferred income taxes (20,300) (116,500)
Depreciation 442,898 398,647
Income taxes (40,167) 28,593
Net change in miscellaneous assets (355,609) (338,103)
Net change in miscellaneous liabilities 79,655 226,035
------------ ------------
Net cash provided by operating activities 2,266,987 2,012,898
------------ ------------
Investing Activities
Net change in interest bearing deposits 585,413 (7,854,938)
Net change in loans receivable (7,057,174) (17,183,728)
Purchase of securities held-to-maturity (11,057,788) --
Principal repayments of securities-held-to-maturity 2,498,987 616,856
Purchase of Federal Home Loan Bank stock -- (564,600)
Purchases of property and equipment (409,005) (451,211)
------------ ------------
Net cash used by investing activities (15,439,567) (25,437,621)
------------ ------------
Financing Activities
Net change in deposits 17,624,818 15,746,830
Net change in escrow funds (443,077) (744,356)
Purchase of common stock (1,986,832) (607,162)
Cash dividends paid (425,164) (490,207)
Proceeds (payment) on FHLB advances (1,483,334) 7,886,666
------------ ------------
Net cash provided by financing activities 13,286,411 21,791,771
------------ ------------
Net change in cash and cash equivalents 113,831 (1,632,952)
Cash and cash equivalents, beginning 2,759,671 4,392,623
------------ ------------
Cash and cash equivalents, ending $ 2,873,502 $ 2,759,671
============ ============
Supplemental disclosure of cash flow information
Cash paid for:
Taxes $ 1,169,834 $ 664,989
Interest 6,094,060 6,328,232
5
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -1 OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a description of the more significant accounting
policies which High Country Bancorp, Inc. (the Company) and its wholly
owned subsidiary High Country Bank formerly Salida Building and Loan
Association (the Bank) and its wholly owned subsidiary High Country
Title and Escrow Company follow in preparing and presenting the
consolidated financial statements.
Basis of Presentation
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary High Country Bank and its
wholly owned subsidiary High Country Title and Escrow Company. All
significant intercompany accounts and transactions have been
eliminated.
Organization
High Country Bank (the Bank) is a federal stock savings and loan
association with its main office in Salida, Colorado and branch
offices in Salida, Leadville and Buena Vista, Colorado. The Bank
provides a variety of financial services to the area it serves. Its
primary deposit products are interest-bearing checking accounts and
certificates of deposit, and its primary lending products are real
estate mortgages, consumer and commercial loans.
High Country Title & Escrow Company provides title, escrow and closing
services primarily in Chaffee County.
The Company's purpose is to act as a holding company with the Bank as
its sole subsidiary. The Company's principal business is the business
of the Bank, title and escrow transactions of the wholly owned
subsidiary of the bank, and holding investments.
Savings deposits of the Bank are insured by the Federal Deposit
Insurance Corporation ("FDIC") up to certain limitations. The Bank
pays a premium to FDIC for the insurance of such savings.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Investment Securities and Mortgage-Backed Securities
Securities Held to Maturity. Bonds and notes for which the entities
have the positive intent and ability to hold to maturity are reported
at cost, adjusted for premiums and discounts that are recognized in
interest income using the interest method over the period to maturity.
Securities Available for Sale. Available-for-sale securities consist
of bonds and notes not classified as trading securities or as
held-to-maturity securities.
Unrealized holding gains and losses, net of tax, on available-for-sale
securities are reported as a net amount in a separate component of
shareholders' equity until realized.
Gains and losses on the sale of available-for-sale securities are
determined using the specific-identification method.
Declines in the fair value of individual held-to-maturity and
available-for-sale securities below their cost that are other than
temporary would result in write-downs of the individual securities to
their fair value. Should the entities incur write-downs they will be
included in earnings as realized losses.
6
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -1 OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Premiums and discounts are recognized in interest income using the
interest method over the period to maturity.
Federal Home Loan Bank Stock
The stock is an equity interest in the Federal Home Loan Bank of
Topeka. The Bank, as a member of the FHLB, is required to maintain an
investment in capital stock of the FHLB. The stock is carried at cost,
as its cost is assumed to equal its market value. FHLB stock can only
be sold at par value to the FHLB or to another member institution. The
FHLB declares cash and stock dividends. The stock dividends are
recognized as income due to the fact they are redeemable at par value
($100 per share) from the FHLB or another member institution.
Loans
Loans are stated at unpaid principal balances, less the allowance for
loan losses, net of deferred loan fees and loans in process.
Loan origination and commitment fees, as well as certain direct
origination costs, are deferred and amortized as a yield adjustment
over the lives of the related loans using the interest method.
Amortization of deferred loan fees is discontinued when a loan is
placed on nonaccrual status.
Loans are placed on nonaccrual status when principal and interest is
delinquent for 90 days or more. Uncollectible interest on these loans
is charged off, or an allowance is established, based on management's
periodic evaluation, and by a charge to interest income equal to all
interest previously accrued. Income is subsequently recognized only to
the extent that cash payments are received.
Management has determined that first mortgage loans on one-to-four
family properties, home equity, second mortgage loans, and all
consumer loans are large groups of smaller-balance homogenous loans
that are collectively evaluated. Accordingly, such loans are outside
the scope of FASB Statement Nos. 114 and 118.
Management considers an insignificant delay, which is determined as 90
days by the Association, will not cause a loan to be classified as
impaired. A loan is not impaired during a period of delay in payment
if the bank expects to collect all amounts due including interest
accrued at the contractual interest rate for the period of delay. All
loans identified as impaired are evaluated independently by
management.
Loans Held for Sale
Loans originated and held for sale in the secondary market are carried
at the lower or cost or estimated fair value in the aggregate. Net
unrealized losses, if any, are recognized through a valuation
allowance by charges to income.
Allowance for Loan Losses
The allowance for loan losses is maintained at a level, which, in
management's judgment, is adequate to absorb losses inherent in the
loan portfolio. The amount of the allowance is based on management's
evaluation of the collectibility of the loan portfolio, including the
nature of the portfolio, credit concentrations, specific impaired
loans, and economic conditions. The allowance is increased by a
provision for loan losses, which is charged to expense, and reduced by
charge-offs, net of recoveries. Such provisions are based on
management's estimate of net realizable value or fair value of the
collateral, as applicable. These estimates are susceptible to economic
changes that could result in a material adjustment to results of
operations in the near term. Recovery of the carrying value of such
loans is dependent to a great extent on economic, operational, and
other conditions that may be beyond the Bank's control.
7
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -1 OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued
Loan Servicing
The cost of mortgage servicing rights is amortized in proportion to,
and over the period of, estimated net servicing revenues. Impairment
of mortgage servicing rights is assessed based on the fair value of
those rights. Fair values are estimated using discounted cash flows
based on a current market interest rate.
Property and Equipment
Property and equipment are stated at cost less accumulated
depreciation. Depreciation is calculated using primarily the
straight-line method over the estimated useful lives of the related
assets. Estimated useful lives of furniture, fixtures, and equipment
range from two to ten years; buildings and improvements range from
five to forty years.
Income Taxes
Income taxes are provided in accordance with SFAS No. 109, Accounting
for Income Taxes. Under the provisions of SFAS No. 109, deferred tax
assets and liabilities are recorded based on the differences between
the financial statement and tax bases of assets and liabilities and
the tax rates which will be in effect when these differences are
expected to reverse. If appropriate, deferred tax assets are reduced
by a valuation allowance, which reflects expectations of the extent to
which such assets will be realized. The Company and its subsidiaries
filed individual income tax returns in prior years but will file a
consolidated return for the current year.
Financial Instruments
Off-balance sheet instruments. In the ordinary course of business the
Bank has entered into off-balance sheet financial instruments
consisting of commitments to extend credit, and standby letters of
credit. Such financial instruments are recorded in the financial
statements when they are funded.
Fair Values of Financial Instruments
The following methods and assumptions were used by the entities in
estimating fair values of financial instruments as disclosed herein:
Cash and short-term instruments. The carrying amounts of cash and
short-term instruments approximate fair values.
Available-for-sale and held-to-maturity securities. Fair values for
securities, excluding restricted equity securities, are based on
quoted market prices. The carrying values of restricted equity
securities approximate fair values.
Loans receivable. For variable-rate loans that reprice frequently and
have no significant change in credit risk, fair values are based on
carrying-values. Fair values for mortgage loans, consumer loans,
commercial real estate and commercial loans are estimated using
discounted cash flow analysis, using interest rates currently being
offered for loans with similar terms to borrowers of similar credit
quality. Fair values for impaired loans are estimated using discounted
cash flow analysis or underlying collateral values, where applicable.
Deposit Liabilities. The fair values disclosed for demand deposits
are, by definition, equal to the amount payable on demand at the
reporting date. The carrying amounts of variable-rate, fixed-term
money market accounts and certificates of deposit (CDs) approximate
their fair values at the reporting date. Fair values for fixed-rate
CDs are estimated using a discounted cash flow calculation that
applies interest rates currently being offered on certificates to a
schedule of aggregated expected monthly maturities on time deposits.
Advances from Federal Home Loan Bank. The fair values are based on the
borrowing rates and remaining maturities.
8
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -1 OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cash Equivalents
For the purpose of reporting cash flows, cash and cash equivalents
include cash on hand, amounts due from banks, and interest-bearing
deposits at other institutions. The Company considers all highly
liquid debt instruments with original maturities of three months or
less to be cash equivalents
Earnings Per Share
The Company adopted Financial Accounting Standards Board Statement No.
128 relating to earnings per share. The statement requires dual
presentations of basic and diluted earnings per share on the face of
the income statement. Basic EPS excludes dilution and is computed by
dividing income available to common stockholders by the
weighted-average number of common shares outstanding for the period.
Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common
stock that then shares in the earnings of the entity.
Stock Compensation Plan
Statement of Financial Accounting Standards (SFAS) No. 123 Accounting
for Stock-Based Compensation, encourages all entities to adopt a fair
value based method of accounting for employee stock compensation
plans, whereby compensation cost is measured at the grant date based
on the value of the award and is recognized over the service period,
which is usually the vesting period. However, it also allows an entity
to continue to measure compensation cost for those plans using the
intrinsic value based method of accounting prescribed by Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, whereby compensation cost is the excess, if any, of the
quoted market price of the stock at the grant date (or other
measurement date) over the amount an employee must pay to acquire the
stock. Stock options issued under the plan have no intrinsic value at
the grant date, and under Opinion No. 25 no compensation cost is
recognized for them. The Company has elected to continue with the
accounting methodology in Opinion No. 25 and, as a result, has
provided pro forma disclosures of net income and earnings per share
and other disclosures, as if the fair value based method of accounting
had been applied.
Advertising Costs
Advertising costs are charged to expense as incurred.
NOTE -2 SECURITIES
Securities are classified in categories and accounted for as follows:
Mortgage-Backed Securities Held-to-Maturity
The amortized cost and estimated fair value of mortgage-backed
held-to-maturity securities at June 30, 2002 and 2001 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
2002 Cost Gains Losses Value
---- --------- ---------- ---------- -----
Mortgage-backed securities
GNMA certificates $ 7,506,205 $ 10,197 $ (28,943) $ 7,487,459
FHLMC certificates 1,989,034 22,673 (5,998) 2,005,709
FNMA certificates 811,697 15,431 (38) 827,090
----------- --------- ---------- -----------
$10,306,936 $ 48,301 $ (34,979) $10,320,258
=========== ========= ========== ===========
9
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -2 SECURITIES (Continued)
Gross Gross
Amortized Unrealized Unrealized Fair
2001 Cost Gains Losses Value
---- --------- ---------- ---------- -----
Mortgage-backed securities
GNMA certificates $ 627,745 $ 12,387 $ 0 $ 640,132
FHLMC certificates 370,551 5,345 (5,696) 370,200
FNMA certificates 1,222,613 17,951 0 1,240,564
---------- --------- -------- ----------
$2,220,909 $ 35,683 $ (5,696) $2,250,896
========== ========= ======== ==========
Expected maturities on the mortgage backed securities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
Securities Held-to-Maturity
The amortized cost and estimated fair value of held-to-maturity
securities are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
2002 Cost Gains Losses Value
---- --------- ---------- ---------- -----
Chaffee County
Bonds $ 303,039 $ 7,247 $ 0 $ 310,286
========= ======== ======= =========
The amortized cost and fair value of debt securities held-to-maturity
by contractual maturity at June 30, 2002 follows:
Amortized Fair
Cost Value
--------- -----
Over 1 year through 5 years $ 201,664 $ 206,198
After 5 years 101,375 104,088
--------- ---------
$ 303,039 $ 310,286
========= =========
At June 30, investments with a carrying value of $3,855,122 (2002) and
$1,808,760 (2001) were pledged as collateral for deposits of public
funds.
NOTE -3 LOANS RECEIVABLE
Loans receivable at June 30, are summarized as follows
2002 2001
------------- -------------
Loans secured by real estate:
One-to-four family residences $ 59,167,162 $ 62,163,878
Commercial real estate 35,549,596 29,562,996
Construction 9,411,762 9,059,977
Land 11,243,700 8,677,500
------------- -------------
Total Loans Secured by Real Estate 115,372,220 109,464,351
Consumer loans, net of discounts 13,676,535 14,597,005
Loans collateralized by savings accounts 767,298 740,310
Commercial loans 18,610,505 16,064,527
Other loans 59,427 50,317
------------- -------------
Total Loans 148,485,985 140,916,510
Less:
Undisbursed portion of loans in process 3,194,636 3,026,054
Deferred loan origination fees 610,997 626,181
Allowance for loan losses 1,485,223 1,347,957
------------- -------------
Loans Receivable, Net $ 143,195,129 $ 135,916,318
============= =============
10
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -3 LOANS RECEIVABLE (Continued)
The changes in the allowance for loan losses were as follows:
2002 2001
------------ -----------
Balance, beginning of year $ 1,347,957 $ 1,002,760
Provision for losses 236,000 385,000
Recoveries 6,240 1,027
Losses incurred (104,974) (40,830)
------------ -----------
Balance, end of year $ 1,485,223 $ 1,347,957
============ ===========
Overdrafts in demand deposit accounts in the amount of $24,649 have
been reclassified as consumer loans for 2002.
At June 30, the Bank had adjustable interest rate loans of
approximately $18,890,000 (2002) and $6,878,000 (2001). The adjustable
rate loans have interest rate adjustment limitations and are generally
indexed to the 1-year U.S. Treasury Note rate or prime rate. Future
market factors may affect the correlation of the interest rate
adjustment with the rate the Bank pays on the short-term deposits that
have been primarily utilized to fund these loans.
As of June 30, 2002, $2,016,927 of loans had been pledged as
collateral for deposits of public funds.
Loans receivable at June 30 include loans to officers and directors of
approximately $1,018,289 (2002) and $1,338,000 (2001). For the year
ended June 30, 2002, $1,056,000 of new loans was made and payments of
$824,000 were received and two loans of $529,000 were sold.
NOTE -4 LOAN SERVICING
Mortgage loans serviced for others are not included in the
accompanying statements of financial condition. The unpaid principal
balances of these loans at June 30 are summarized as follows:
2002 2001
---------- ----------
Mortgage loan portfolios serviced for:
FHLMC $2,893,075 $3,635,591
========== ==========
In connection with these loans serviced for others at June 30, the
Bank held borrowers' escrow balances of $(12,417) in 2002 and $456 in
2001.
NOTE -5 ACCRUED INTEREST RECEIVABLE
Interest receivable at June 30, relates to the following:
2002 2001
---------- ----------
Loans $1,248,797 $1,105,226
Mortgage-backed securities 49,658 16,186
Other investments 886 0
---------- ----------
$1,299,341 $1,121,412
========== ==========
NOTE -6 PROPERTY AND EQUIPMENT
Property and equipment and the related accumulated depreciation at
June 30, are summarized as follows:
2002 2001
---------- ----------
Land and improvements $ 599,098 $ 584,132
Buildings and improvements 5,121,019 5,009,917
Furniture, fixtures and equipment 2,122,178 2,085,341
Construction in progress 0 12,000
----------- -----------
7,842,295 7,691,390
Less accumulated depreciation (1,772,607) (1,579,483)
----------- -----------
$ 6,069,688 $ 6,111,907
=========== ===========
Depreciation expense for the years ended June 30, totaled $442,898
(2002) and $398,647 (2001).
11
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -7 DEPOSIT ACCOUNTS
Deposit accounts at June 30 are summarized as follows:
2002 2001
--------------------- ---------------------
Weighted Weighted
Average Average
--------------------- ---------------------
Amount Rate Amount Rate
------ ---- ------ ----
NOW accounts, including
non-interest bearing
deposits of $7,331,000 (2002)
and $6,738,274 (2001) $ 30,063,429 .64% $ 25,874,424 1.13%
Money market and
savings accounts 28,274,752 1.37% 23,065,825 2.95%
Certificate accounts 57,803,865 4.27% 49,576,979 5.83%
------------- -------------
$ 116,142,046 $ 98,517,228
============= =============
At June 30, 2002, scheduled maturities of the above certificate
accounts are summarized as follows:
Year ending June 30,
--------------------------------------------------------------------------
2007 and
2003 2004 2005 2006 thereafter
------------- ----------- ----------- ----------- ----------
1.01-2.00 $ 1,116,365
2.01-3.00 13,791,840 $ 295,679 $ 40,335
3.01-4.00 6,478,686 4,542,985 96,985 $ 142,871 $ 51,582
4.01-5.00 11,030,021 2,007,704 110,594 218,657 737,264
5.01-6.00 6,778,314 1,046,940 694,306 448,205 81,256
6.01-7.00 4,751,825 440,665 309,383 532,006 197,707
7.01-8.00 700,774 311,521 346,414 502,981
------------ ----------- ----------- ----------- ----------
$ 44,647,825 $ 8,645,494 $ 1,598,017 $ 1,844,720 $1,067,809
============ =========== =========== =========== ==========
The aggregate amount of certificates of deposits with a minimum
denomination of $100,000 at June 30 was $18,324,452 (2002) and
$13,899,773 (2001).
Deposits in excess of $100,000 are not insured by the Savings
Association Insurance Fund (SAIF).
Interest expense on deposits for the years ended June 30 is summarized
as follows:
2002 2001
------------ ------------
NOW accounts $ 196,167 $ 253,240
Money market and savings accounts 510,334 689,816
Certificate accounts 2,781,870 2,719,762
------------ ------------
$ 3,488,371 $ 3,662,818
============ ============
NOTE -8 ADVANCES FROM FEDERAL HOME LOAN BANK
Advances from the Federal Home Loan Bank (FHLB) at June 30 are
summarized as follows:
Interest
Rate 2002 2001
---------- ------------ ------------
Maturing within one year 5.49-7.05% $ 9,666,665 $ 4,500,000
Maturing in 2004 5.14-6.91% 7,500,000 9,999,999
Maturing in 2005 4.18-7.34% 6,000,000 7,500,000
Maturing in 2006 5.54-6.98% 3,500,000 5,500,000
Maturing in 2007 4.97-5.31% 3,000,000 3,500,000
Maturing after 2007 5.37-6.10% 12,975,000 13,125,000
------------ ------------
42,641,665 44,124,999
Line of credit 7.28% 0 0
------------ ------------
$ 42,641,665 $ 44,124,999
============ ============
12
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -8 ADVANCES FROM FEDERAL HOME LOAN BANK (Continued)
Pursuant to collateral agreements with the FHLB, advances are secured
by a blanket pledge agreement with the FHLB, which includes single
family and commercial real estate loans.
At June 30, 2002, the Bank has an approved line of credit subject to
the maximum amount of credit available to the Bank under the FHLB's
credit policies, which expires April 25, 2003. No amount was drawn on
the line of credit at June 30, 2002 or 2001.
NOTE -9 INCOME TAXES
The provision for income taxes consists of the following:
2002 2001
------------ ----------
Current $ 1,046,749 $ 926,582
Deferred (20,300) (116,500)
------------ ----------
$ 1,026,449 $ 810,082
============ ==========
The effective tax rate on income before the provisions for income
taxes differs from the federal statutory income tax rate of 34% for
the following reasons:
2002 2001
---------- --------
Provision for income taxes at statutory rate $ 917,248 $708,000
Nondeductible expenses for tax purposes 39,981 32,000
State income taxes, net of federal income
tax benefit 68,143 68,300
Other, net 1,077 1,782
---------- --------
$1,026,449 $810,082
========== ========
Effective tax rates 38% 39%
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes. The net deferred tax assets (liabilities) as of June 30 are
as follows:
2002 2001
----------- ---------
Difference between tax basis and
carrying basis of FHLB stock $ (196,600) $(196,600)
Tax depreciation in excess of
Financial statement amounts (129,200) (101,100)
Difference between tax basis and carrying
basis of long term incentive plan 129,200 134,000
Other (6,800) (2,400)
Loan loss allowance 386,500 328,900
----------- ---------
Net deferred tax asset $ 183,100 $ 162,800
=========== =========
Management has determined that a valuation allowance is not required.
13
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -9 INCOME TAXES (Continued)
The deferred tax expense (benefit) results from timing differences in
the recognition of income and expense for tax and financial purposes.
The sources and tax effects of these temporary timing differences are
as follows:
2002 2001
--------- ----------
Accumulated depreciation $ 28,100 $ 17,100
Allowance for loan losses - net (57,600) (127,100)
Other 4,400 2,100
Long-term incentive plan 4,800 (8,600)
--------- ----------
$ (20,300) $ (116,500)
========= ==========
The Bank was in prior years permitted under the Internal Revenue Code
to deduct an annual addition to reserve for bad debts in determining
taxable income, subject to certain limitations. This deduction
differed from the bad debt provision used for financial accounting
purposes. Bad debt deductions for income tax purposes are included in
taxable income of later years only if the bad debt reserve is used
subsequently for purposes other than to absorb bad debt losses.
Because the Bank does not intend to use the reserve for purposes other
than to absorb losses, no deferred income taxes have been provided.
Retained earnings at June 30, 2002, include approximately $1,169,000,
representing such bad debt deductions for which no income taxes have
been provided.
NOTE -10 REGULATORY CAPITAL REQUIREMENTS
The Bank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum
capital requirements can initiate certain actions by regulators that,
if undertaken, could have a direct material effect on the Bank's
financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must meet
specific guidelines that involve quantitative measures of the Bank's
assets, liabilities, and certain off-balance sheet items as calculated
under regulatory accounting practices. The Bank's capital amounts and
classification are also subject to qualitative judgments by the
regulators about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital
adequacy require the Bank to maintain minimum amounts and ratios as
outlined below. Management believes, as of June 30, 2002. The Bank
meets all capital adequacy requirements to which it is subject.
As of September 17, 2001, the most recent notification from Office of
Thrift Supervision categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be well
capitalized the Bank must maintain minimum total risk-based, Tier I
risk-based, and Tier I leverage ratios. There are no conditions or
events since that notification that management believes have changed
the institution's category.
The following is a reconciliation of capital computed under accounting
principles generally accepted in the United States (GAAP) to
regulatory capital. OTS regulations specify minimum capital
requirements for the Bank. The following reconciliation also compares
the capital requirements as computed to the minimum capital
requirements for the Bank, as of June 30.
2002 2001
------------- ------------
Equity Per GAAP $ 16,034,000 $ 14,196,000
Less Servicing Rights Plus Valuations (1,000) (1,000)
------------- ------------
Equity Per GAAP- Tier I Capital 16,033,000 14,195,000
Valuation Allowance 1,485,000 1,348,000
------------- ------------
Regulatory Capital $ 17,518,000 $ 15,543,000
============= ============
14
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -10 REGULATORY CAPITAL REQUIREMENTS (Continued)
Minimum Required To Be Well Capitalized
For Capital Under Prompt Corrective
Actual Adequacy Purposes Action Regulations
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
2002
----
Total Capital
(to Risk
Weighted
Assets) $17,518,000 13.66% $10,261,000 8.00% $12,826,000 10.00%
Tier I Capital
(to Risk
Weighted
Assets) 16,033,000 12.50 3,848,000 3.00 7,695,000 6.00
Tier I Capital
(to Average
Assets) 16,033,000 9.45 2,545,000 1.50 8,484,000 5.00
Tangible Capital
(to Tangible
Assets) 16,033,000 9.06 2,653,000 1.50 N/A
2001
----
Total Capital
(to Risk
Weighted
Assets) $15,543,000 13.05% $ 9,531,000 8.00% $11,914,000 10.00%
Tier I Capital
(to Risk
Weighted
Assets) 14,195,000 11.91 3,574,000 3.00 7,148,000 6.00
Tier I Capital
(to Average
Assets) 14,195,000 9.42 2,261,000 1.50 7,537,000 5.00
Tangible Capital
(to Tangible
Assets) 14,195,000 8.78 2,426,000 1.50 N/A
The Bank's management believes that, under the current regulations,
the Bank will continue to meet its minimum capital requirements in the
coming year. However, events beyond the control of the Bank, such as
increased interest rates or a downturn in the economy in the Bank's
operating area, could adversely affect future earnings and,
consequently, the ability of the Bank to meet its future minimum
capital requirements.
15
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -11 BENEFIT PLANS
The Bank adopted a Long-Term Incentive Plan covering the directors and
key employees of the Bank. On June 30 of each year the participants
will have a contribution made to their account providing the
participant continues to be an employee or director of the Bank. Prior
to distribution under the terms of the Plan, each participant's
account shall be credited with a rate of return, on any amounts
previously credited, equal to the highest rate of interest paid by the
Bank on one-year certificates of deposit, or after conversion the rate
of return will equal the dividend-adjusted rate of return on the
common stock.
Amounts credited to Participant's Accounts on the effective date and
thereafter shall be fully vested. Account balances shall be paid, in
cash, in ten equal annual installments beginning during the first
quarter of the calendar year which next follows the calendar year in
which the participant ceases to be a director or employee for any
reason, with subsequent payments being made by the last day of the
first quarter of each subsequent calendar year until the participant
has received the entire amount of his account. Notwithstanding the
foregoing a participant may elect to have his account paid in lump sum
distribution or in annual payments over a period less than ten years.
Any benefits accrued under the plan will be paid from the Bank's
general assets. The Bank has established a trust in order to hold
assets with which to pay benefits. Trust assets, which are included in
the consolidated statement of financial condition, will be subject to
the claims of the Bank's general creditors. The expense for the plan
recognized for the years ended June 30, 2002 and 2001 was $72,000 and
$32,987.
As part of the conversion to stock, the Bank established an ESOP to
benefit substantially all employees. The ESOP purchased 105,800 shares
of common stock in the conversion with proceeds received from a loan
from the Company. The note is to be repaid in ten annual principal
installments of $105,800, starting June 30, 1998. Interest is based on
the Wall Street Journal Prime plus one percent, and is adjusted
annually on July 1. The interest rate for 2002 was 7.75%. The
unallocated shares of stock held by the ESOP are pledged as collateral
on the debt. The ESOP is funded by contributions made by the Bank in
amounts sufficient to retire the debt. At June 30, 2002 and June 30,
2001, the outstanding balance of the note receivable was $521,065 and
$626,865 and is presented as a reduction of stockholders' equity. ESOP
compensation expense for the years ended June 30, 2002 and 2001 was
$123,317 and $146,768.
In November 1993, the AICPA issued Statement of Position 93-6
"Employers' Accounting for Employee Stock Ownership Plans." The
statement was adopted December 9, 1997, the effective date of the
Association's conversion to a stock company. The Statement requires,
among other things, that: (1) for ESOP shares committed to be released
in a period to compensate employees directly, employers should
recognize compensation cost equal to the average fair value (as
determined on a monthly basis) of the shares committed to be released,
(2) dividends on unallocated shares used to repay ESOP loans are not
considered dividends for financial reporting purposes, dividends on
allocated or committed shares are credited to the accounts of the
participants and reported as dividends in the financial statements,
(3) for an internally leveraged ESOP, the Company's loan receivable
and the ESOP note payable as well as the interest income/expense is
not reflected in the consolidated financial statements and (4) for
earnings per share computations, ESOP shares that have been committed
to be released should be considered outstanding. ESOP shares that have
not been committed to be released should not be considered
outstanding.
The ESOP shares as of June 30, 2002 are as follows:
Shares released 42,320
Shares committed to be released for allocation 10,580
Unreleased shares 52,900
----------
Total ESOP shares 105,800
==========
Fair value of unreleased shares $1,007,745
==========
16
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -11 BENEFIT PLANS (Continued
The board of directors of the Company approved a Management
Recognition Plan ("MRP") for directors and employees. The MRP was
approved by the stockholders at the annual meeting in December 1998.
The Company purchased in the open market 39,675 shares of its common
stock, at a cost of $551,721, to fund the MRP. Under the terms of the
plan 33,836 shares of common stock were awarded to directors and
employees. The shares awarded pursuant to the MRP have a vesting
schedule, which provides that 25% of the shares awarded will
automatically vest on the effective date of the award and 25% will
vest on each subsequent anniversary date. Compensation expense related
to the MRP was $73,651 and $132,897 for the years ended June 30, 2002
and 2001.
The bank also has a noncontributory 401(K) plan which employees may
elect to join after 90 days of employment.
NOTE -12 FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS
OF CREDIT RISK
The Bank is a party to financial instruments with off-balance sheet
risk in the normal course of business to meet the financing needs of
its customers. At June 30, 2002, the Bank has commitments to fund
mortgage loans of $2,406,000, with interest rates from 4.75% to 9.50%,
unfunded lines of credit of $7,092,000, and letters of credit of
$250,000. The Bank makes contractual commitments to extend credit,
which are legally binding agreements to lend money to customers at
prevailing interest rates for specified periods of time. The credit
risk involved in issuing these commitments is essentially the same as
that involved in extending loan facilities to customers.
As such, the Bank's exposure to credit loss, in the event of
non-performance by the counterparty to the financial instrument, is
represented by the contractual amount of those instruments. However,
the Bank applies the same credit standards used in the lending process
when extending these commitments, and periodically reassesses the
customers' credit worthiness. Additional risks associated with these
commitments arise when they are drawn upon, such as the demands on
liquidity that the Bank could experience if a significant portion were
drawn down at once. This is considered unlikely, however, as
commitments may expire without having been drawn upon.
The Bank originates loans primarily in Chaffee, Fremont and Lake
Counties, Colorado. Although the Bank has a diversified loan
portfolio, a substantial portion of its borrower's ability to repay
their loans is dependent upon economic conditions in the market area.
NOTE -13 FAIR VALUES OF FINANCIAL INSTRUMENTS
The estimated fair values of the financial instruments are as follows:
2002 2001
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ----- -------- -----
Financial Assets:
Cash $ 2,873,502 $ 2,873,502 $ 2,759,671 $ 2,759,671
Interest-bearing deposits 8,590,443 8,590,443 9,175,856 9,175,856
Mortgage backed securities 10,306,936 10,320,258 2,220,909 2,250,896
Securities held to maturity 303,039 310,286 0 0
FHLB stock 2,421,600 2,421,600 2,421,600 2,421,600
Loans receivable - net 143,837,129 151,123,000 136,833,818 143,175,000
Financial liabilities
Deposits 116,142,046 117,113,000 98,517,228 99,311,000
Advances from FHLB 42,641,665 44,869,000 44,124,999 44,989,000
17
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -14 OTHER NON-INTEREST EXPENSE
2002 2001
---------- ---------
Advertising $ 92,850 $ 78,798
Stationery Supplies 164,180 150,612
Postage 127,020 102,142
Telephone 67,925 59,692
Dues and Subscriptions 45,935 43,867
Community Support 53,656 48,416
Bank Charges 35,197 42,857
Other 100,864 121,691
---------- ---------
$ 687,627 $ 648,075
========== =========
NOTE - 15 STOCKHOLDERS' EQUITY
In the years ended June 30, 2002 and 2001, the Company purchased
123,583 and 42,233 shares of its common stock, at a cost of $1,986,832
and $607,162, and retired the stock in accordance with Colorado
Revised Statutes
For the years ended June 30, 2002 and 2001, the Company paid a cash
dividend of $.50 per share respectively.
NOTE - 16 STOCK OPTION PLAN
The stockholders approved the adoption of the 1998 incentive stock
option plan, providing for the award of incentive stock options to key
employees and directors of the Company, and its affiliates at the
discretion of the Board of Directors. Under the terms of the plan
116,376 shares of the Company's common stock were granted to employees
and directors on December 17, 1998. Such options have an option
exercise price of $13.125, which was the fair value of the stock at
December 17, 1998. The aggregate number of shares deliverable pursuant
to awards shall not exceed 145,475 shares. Such stock options will
have a term of ten years and a vesting schedule, for employees, which
provides that one third of the options, vested at the date of the
grant and one third vested January 1, 1999 and one-third January 1,
2000. The directors' options vested at the date of the grant.
The Company applies APB Opinion No. 25 and related interpretations in
accounting for the stock option plan. Accordingly, no compensation
cost has been recognized. If the Company had elected to recognize
compensation cost based on the fair value of the options granted at
the grant date (1998) as prescribed by SFAS 123, the effect would not
have been material to net income or earnings per share.
A summary of the status of the Company's stock option plan is
presented below:
2002 2001
------- --------
Outstanding at the beginning of year 116,376 116,376
Granted 0 0
Exercised 0 0
Forfeited 0 0
Outstanding at year end 116,376 116,376
Options exercisable at year end 116,376 116,376
The exercise price for the outstanding options is $13.125 and the
remaining contractual life is 6.6 years.
18
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -16 IMPACT OF NEW ACCOUNTING STANDARDS
In December 2001, the Accounting Standards Executive Committee issued
Statement of Position 01-06, Accounting by Certain Entities (Including
Entities With Trade Receivables) That Lend to or Finance the
Activities of Others. This SOP reconciles and conforms, as
appropriate, the accounting and financial reporting provisions
established by the BSI Guide, CU Guide, and FC Guide. This SOP
eliminates differences in accounting established by the Guides where
such differences are not warranted. In addition, the SOP carries
forward accounting guidance for transactions unique to certain
financial entities. Most of the differences between the respective
guides represent presentation or disclosure requirements. The impact
of adopting this SOP in December 2001 did not have a material affect
on the financial statements or the disclosures.
NOTE -17 CONTINGENCIES AND COMMITMENTS
In the normal course of business, the Bank is involved in various
legal actions arising in the ordinary course of business. In the
opinion of management, after consultation with legal counsel, the
ultimate disposition of these matters is not expected to have a
material adverse effect on the financial position of the Bank.
NOTE -18 CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)
The following condensed statements summarize the financial position,
operating results and cash flows of High Country Bancorp, Inc.,
2002 2001
------------ ------------
CONDENSED BALANCE SHEET
ASSETS
Cash and equivalents $ 125,762 $ 2,550,640
Investment in subsidiary 10,080,587 8,237,730
ESOP note receivable 521,065 626,865
Other 82,918 2,307
------------ ------------
$ 10,810,332 $ 11,417,542
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accruals $ 37,447 $ 0
Stockholders' equity 10,772,885 11,417,542
------------ ------------
$ 10,810,332 $ 11,417,542
============ ============
CONDENSED STATEMENT OF INCOME
For the years ended June 30, 2002 and
June 30, 2001
Equity in undistributed net income of subsidiary $ 1,822,393 $ 1,248,017
Other net (153,314) 22,482
------------ ------------
$ 1,669,079 $ 1,270,499
============ ============
19
HIGH COUNTRY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -18 CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)
CONDENSED STATEMENT OF CASH FLOWS
For the years ended June 30, 2002 and
June 30, 2001
Operating Activities:
Net income $ 1,669,079 $ 1,270,499
Adjustments to reconcile net income to cash
provided by operating activities:
Equity in undistributed net income of
subsidiary (1,822,393) (1,248,017)
Other 34,633 27,970
----------- -----------
Net cash provided by operations (118,681) 50,452
----------- -----------
Investing Activities:
ESOP note payment 105,800 105,800
Loan (to) payment from subsidiary 0 3,000,000
Dividends received 0 200,000
----------- -----------
Net cash provided by investing activities 105,800 3,305,800
----------- -----------
Financing Activities:
Purchase of common stock (1,986,832) (607,162)
Dividends paid (425,165) (490,207)
----------- -----------
Net cash provided (used)by financing activities (2,411,997) (1,097,369)
----------- -----------
Net increase (decrease) in cash (2,424,878) 2,258,883
Cash beginning 2,550,640 291,757
----------- -----------
Cash ending $ 125,762 $ 2,550,640
=========== ===========
20
PART III
ITEM 13. EXHIBITS LIST AND REPORTS ON FORM 8-K
-----------------------------------------------
(a) List of Documents Filed as Part of This Report
----------------------------------------------
(1) Consolidated Financial Statements. The following financial
------------------------------------
statements of the registrant are included herein under Item 7.
The remaining information appearing in the Annual Report is not
deemed to be filed as part of this Annual Report on Form 10-KSB,
except as expressly provided herein.
Independent Auditor's Report
(a) Statements of Financial Condition as of June 30, 2002
and 2001
(b) Statements of Income for the Years Ended June 30, 2002
and 2001
(c) Statements of Equity for the Years Ended June 30, 2002
and 2001
(d) Statements of Cash Flows for the Years Ended June 30,
2002 and 2001
(e) Notes to Financial Statements
(2) Financial Statement Schedules. None
-----------------------------
(3) Exhibits. The following exhibits are either filed as part of this
--------
Annual Report on Form 10-KSB or incorporated herein by reference:
Exhibit No. Description
---------- -----------
* 3.1 Articles of Incorporation of High Country Bancorp, Inc.
* 3.2 Bylaws of High Country Bancorp, Inc.
* 10.1 Employment Agreement between Salida Building and Loan Association and
Larry D. Smith+
* 10.2 Guaranty Agreement between High Country Bancorp, Inc. and Larry D. Smith+
* 10.3 High Country Bancorp, Inc. 1997 Stock Option and Incentive Plan+
* 10.4 High Country Bancorp, Inc. Management Recognition Plan and Trust+
* 10.5 Salida Building and Loan Association Long-Term Incentive Plan+
* 10.6 Salida Building and Loan Association Incentive Compensation Plan+
* 10.7 Employment Agreement between Salida Building and Loan Association and Scott G. Erchul+
* 10.8 Guaranty Agreement between High Country Bancorp, Inc. and Scott G. Erchul+
* 10.9 Change-in-Control Protective Agreement between Salida Building and Loan Association and
Francis L. Delay+
* 10.10 Change-in-Control Guaranty Agreement between High Country Bancorp, Inc. and Francis L.
DeLay+
21
** 13 Annual Report to Stockholders for the year ended June 30, 2002
** 21 Subsidiaries
23 Consent of Grimsley, White & Company
99 Certification Pursuant to 18 U.S.C. Section 1350
_____________
* Incorporated by reference from Registration Statement on Form SB-2 filed
January 27, 1997 (File No. 333-34153).
** Previously filed.
+ Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K. No current reports on Form 8-K have been
--------------------
filed during the last quarter of the fiscal year covered by this report.
22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HIGH COUNTRY BANCORP, INC.
Date: January 28, 2003 By:/s/ Larry D. Smith
-----------------------------------------
Larry D. Smith
President and Chief Executive Officer
(Duly Authorized Officer)
CERTIFICATION
I, Larry D. Smith, President and Chief Executive Officer of High Country
Bancorp, Inc., certify that:
1. I have reviewed this annual report on Form 10-KSB of High Country Bancorp,
Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.
Date: January 28, 2003
/s/ Larry D. Smith
----------------------------------------
Larry D. Smith
President and Chief Executive Officer
CERTIFICATION
I, Frank L. DeLay, Chief Financial Officer of High Country Bancorp, Inc.,
certify that:
1. I have reviewed this annual report on Form 10-KSB of High Country Bancorp,
Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.
Date: January 28, 2003
/s/ Frank L. DeLay
---------------------------------------
Frank L. DeLay
Chief Financial Officer