CFBX Community First Bankshares (MM)

Community First Bankshares Reports First Quarter Earnings FARGO, N.D., April 15 /PRNewswire-FirstCall/ -- Community First Bankshares, Inc. today reported results for the first quarter of 2004. First Quarter Highlights -- Diluted earnings per share of 45 cents, compared to 50 cents in the first quarter of 2003. -- Net income of $16.9 million, a decrease of 12.9 percent from $19.4 million in the first quarter of 2003. -- Return on average equity (ROE) of 18.98 percent, compared to 21.01 percent in the first quarter of 2003. -- Return on assets (ROA) of 1.25 percent, compared to 1.38 percent in the first quarter of 2003. -- Net interest margin was 4.70 percent, compared to 4.90 percent in the first quarter of 2003 and 4.80 percent in the fourth quarter of 2003. -- Nonperforming assets comprised .47 percent of total assets at March 31, 2004, compared to .61 percent at March 31, 2003 and .48 percent at December 31, 2003. Non-performing assets to period-end loans and OREO was .77 percent at March 31, 2004, versus 1.00 percent at March 31, 2003 and .79 percent at December 31, 2003. -- On March 16, BancWest Corporation and Community First announced the signing of a definitive agreement wherein BancWest will acquire Community First Bankshares for $32.25 per share in a cash transaction valued at $1.2 billion. The transaction is expected to close during the third quarter of 2004. First Quarter 2004 2003 Net income (in millions) $16.9 $19.4 Basic earnings per share .46 .50 Diluted earnings per share .45 .50 Return on assets 1.25% 1.38% Return on common equity 18.98 21.01 Net interest margin 4.70 4.90 Community First Bankshares, Inc. (NASDAQ:CFBX) today reported net income of $16,904,000 for the quarter ended March 31, 2004, or 45 cents per share diluted. This compares to net income of $19,401,000 or 50 cents per share diluted for the first quarter of 2003. Return on average equity was 18.98 percent in the first quarter of 2004, and return on average assets was 1.25 percent. In the first quarter of 2003, return on average equity was 21.01 percent and return on average assets was 1.38 percent. "The conservative posture we assumed while the economy faltered and interest rates remained near historic lows over the last couple of years is consistent with Community First's operating culture of disciplined pricing and commitment to asset quality," commented Mark Anderson, president and chief executive officer. "While results of operations for the first quarter were not in line with our expectations, our strategy has served us well, and will allow us to more fully participate in an improving market environment, as we continue to see signs of economic recovery. In terms of net charge-offs, we recorded our best performance in the last 17 quarters. Our balance sheet continues to improve, and the operational initiatives that we have executed will position us well to pursue opportunities in our markets. "Our commitment to building new growth avenues within our noninterest income business continued to produce positive results during the first quarter, as commissions from insurance sales achieved a record quarter. We reinforced our growing network of insurance services through the acquisition of a Colorado insurance agency and book of business in the first quarter, as well as an additional Colorado agency, renewal rights and another book of business early in the second quarter. The moves bring to 56 the number of locations offering insurance services within our market footprint of 155 offices. In addition to its growing importance on our income statement, the ability to offer a full slate of financial services to our clients is central to our core solutions-based approach. We also took steps to strengthen critical mass awareness within our market footprint through the opening in the quarter of a new branch in Lino Lakes, Minn. Another location in Blaine, Minn., is scheduled to open in May, while four additional planned bank locations in Chaska, Chanhassen, Lakeville and Inver Grove Heights, Minn., are scheduled to open in 2004. Also during the quarter, we completed the previously announced transition of 16 Regional Financial Centers to Community Financial Centers. Our Regional Financial Centers offer a broad mix of business and retail services, while Community Financial Centers maintain primarily a retail focus. We expect this transition will provide an additional level of personal service and flexibility by more closely aligning our offerings with the unique needs of our client base within these markets." On March 16th, BancWest Corporation and Community First announced a definitive agreement in which BancWest will acquire Community First Bankshares in an all cash transaction valued at $1.2 billion or $32.25 per Community First common share. The transaction, contingent on shareholder and regulatory approvals, would create a banking network comprising 451 locations in 16 states. Due to the impending acquisition, Community First recently announced that its Annual Meeting of Shareholders will be held in conjunction with the meeting at which its shareholders will vote on the proposed transaction. "Positive signs within the industry and in our own business are all the more encouraging in light of our impending merger with BancWest Corporation," added Anderson. "With virtually no market overlap, our combined organization would immediately become one of the leading financial institutions in the Western and Midwestern United States. As a very disciplined, client-focused financial services company, we believe this transaction would present enhanced opportunities to achieve our goal of exceeding the expectations of our clients." Net Interest Income Interest income in the first quarter of 2004 was $70,552,000 compared to $82,005,000 in the first quarter of 2003, a decrease of 14.0 percent, reflecting further declines in interest rates, as well as continued decreases in loans outstanding. Interest expense for the first quarter was $14,214,000, down 31.8 percent from the first quarter of 2003. Average deposits for the quarter decreased 4.6 percent from the first quarter of 2003, while on a linked quarter basis, deposits remained consistent. Net interest income was $56,338,000 for the first quarter of 2004, down 7.9 percent compared to $61,164,000 for the first quarter of 2003. Net interest margin was 4.70 percent for the first quarter of 2004, versus 4.90 percent in the first quarter of 2003 and 4.80 percent in the fourth quarter of 2003. Commenting on the change in net interest margin, chief financial officer Craig Weiss said, "Softness in loan volumes and continued low interest rates contributed to a 10 basis point contraction of margin during the quarter. As we look at an improving environment for lending opportunities, we believe that we are well-positioned to maximize these opportunities." Loan Activity Total loans as of March 31, 2004, were $3.3 billion, down 5.3 percent from one year ago. "While total loans were down on a year-over-year basis, we continue to see growth of our indirect business and commercial mortgages," said Ron Strand, vice chairman and chief operating officer. "SBA premium income, which is included among our noninterest income business, decreased significantly, as we experienced the impact of program caps. As one of the larger and fast-growing SBA lenders in the business, we expect to resume our strong performance in this important area as funding issues are worked out at the governmental level. While we will remain responsive to all compelling asset growth opportunities, we will proceed cautiously as we gauge the health and sustainability of the positive economic signs we are seeing." Loan Losses Nonperforming assets represented .47 percent of total assets at March 31, 2004, compared to .61 percent in the same quarter last year and .48 percent at December 31, 2003. The allowance for loan losses was 1.59 percent of total loans and 264 percent of nonperforming loans at March 31, 2004, compared to 1.57 percent and 195 percent respectively at March 31, 2003 and 1.57 percent and 251 percent respectively, at December 31, 2003. Net charge-offs were $2.0 million or .25 percent (annualized) of average loans for the first quarter of 2004, compared to $4.7 million or .54 percent for the first quarter of 2003 and $4.0 million or .48 percent at December 31, 2003. "The effectiveness of our loan evaluation and servicing processes was clearly behind our strong improvements in key loan quality benchmarks this quarter," added Strand. "Our Loan Center initiative, which will be fully completed during the second quarter, has provided a strong level of support and confidence in pursuing quality assets within our markets. We believe our Special Assets Group works to address areas of concern within our portfolio before larger issues arise." Noninterest Income Noninterest income in the first quarter increased to $22,919,000, compared to $21,866,000 in the first quarter of 2003. Insurance commissions were up 13.5 percent in the first quarter of 2004, compared to the same period in 2003, and investment sales commissions increased 56.0 percent over the same period. "We have been active in acquiring insurance businesses, but our strong growth in insurance commissions this quarter is also attributable to core growth in our existing business, which is a clear sign that we can compete effectively within our markets, and that clients are responding to our comprehensive financial solutions focus," said Anderson. "Similarly, our performance in investment sales reflects, in part, improved efficiencies relative to income and expenses reported by our third party provider, and underscores our growing proficiency in incorporating investment tools more consistently throughout our clients' portfolios as their financial needs warrant." Noninterest Expense For the first quarter of 2004, noninterest expense was $51,752,000, an increase of 2.1 percent from the same period in 2003. "The conservative and disciplined approach that has served us so well during the recent economic downturn also extends to our philosophy of controlling expenses," said Weiss. "The net result is a more streamlined organization with the operational flexibility to pursue compelling growth opportunities wherever they are identified." Capital Structure The company repurchased 582,500 of its common shares during the first quarter of 2004. Community First has suspended its repurchase plan and does not expect to repurchase additional Community First common shares. Since the first quarter of 2000, the company has repurchased a total of approximately 15 million shares, with 1.8 million shares remaining under the current repurchase authorization. During the first quarter, Community First raised its regular quarterly dividend from 23 cents to 24 cents per common share, marking the sixteenth dividend increase since the company became publicly held in 1991. The $1.2 billion or $32.25 per share purchase price announced by BancWest Corporation is equivalent to 16 times 2003 earnings and represents a 14% premium to the average closing stock price of Community First in the three months prior to the announcement of the transaction. The boards of directors of BancWest Corporation and Community First Bankshares have approved the transaction. The transaction also has been approved by the board of BancWest's parent, BNP Paribas. The merger requires approval from Community First shareholders and federal banking regulators. Once all regulatory approvals have been received, the merger is expected to close during the third quarter of 2004. "One of the reasons we exist as a publicly-traded entity is to create value for our shareholders," said Anderson. "We have always been committed to evaluating any and all avenues to accomplish that goal, with the most recent example being our proposed merger with BancWest Corporation. With a fair return for our shareholders, we believe that the stewardship of Community First's vision and values will continue in the very capable hands of our new partners." Community First Bankshares is hosting a conference call at 12:00 noon, CDT on April 15, at which time management will discuss the results of the first quarter. Individual investors and the media are welcome to join the call by dialing 888-241-0096 shortly before the scheduled time of the call. Callers should ask to be connected to the Community First Bankshares conference call hosted by Mark Anderson. A transcript of the call will be posted on the company's Web site. About Community First Bankshares, Inc. Community First Bankshares, a $5.5 billion financial services company, provides a complete line of banking, investment, insurance, mortgage and trust products to individuals and businesses. The company's extensive offering of financial products and services is marketed through full-service offices in 137 communities in 12 states-Arizona, California, Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota, South Dakota, Utah, Wisconsin and Wyoming. The company's services include an online banking system that offers electronic bill payment and discount brokerage capabilities, telephone banking and an extensive ATM network. Community First Bankshares stock is traded on The Nasdaq Stock Market(R) under the symbol CFBX. The latest investor and other corporate information is available at its Web site, http://www.communityfirst.com/ . This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The company wishes to caution readers not to place undue reliance on any such forward- looking statements, which speak only as of the date made. Factors that could cause actual results to differ from the results discussed in the forward- looking statements include, but are not limited to: risk of loans and investments, including dependence on local economic conditions; competition for the company's customers from other providers of financial services; possible adverse effects of changes in interest rates; execution and implementation of a series of previously announced strategic initiatives; balance sheet and capital ratio risks related to the share repurchase program; risks related to the company's acquisition and market extension strategy, including risks of adversely changing results of operations and factors affecting the company's ability to consummate further acquisitions or extend its markets; and other risks detailed in the company's filings with the Securities and Exchange Commission, all of which are difficult to predict and many of which are beyond the control of the company. About BancWest Corporation BancWest Corporation ( http://www.bancwestcorp.com/ ) is a bank holding company with assets of $38.4 billion. It is headquartered in Honolulu, Hawaii, with an administrative headquarters in San Francisco, California. Besides Bank of the West, BancWest's other principal subsidiary is First Hawaiian Bank (56 branches in Hawaii, two in Guam and one in Saipan). BancWest is a wholly owned subsidiary of BNP Paribas. BNP Paribas, headquartered in Paris, is the most profitable bank in the Euro zone and among the 10 largest banks in the world based on asset size. This release contains forward-looking statements, including statements regarding anticipated timing of the transaction and possible performance of the combined company after the transaction is completed. Such statements reflect management's best judgment as of this date, but they involve risks and uncertainties that could cause actual results to differ materially from those presented. Factors that could cause such differences include, without limitation, (1) the possibility that regulatory approvals may be delayed or denied or that burdensome conditions may be imposed in connection with such approvals; (2) the possibility of customer or employee attrition following this transaction; (3) failure to fully realize expected cost savings from the transaction; (4) lower than expected revenues following the transaction; (5) problems or delays in bringing together the two companies; (6) the possibility of adverse changes in global, national or local economic or monetary conditions, (7) competition and change in the financial services business, and (8) other factors described in our recent filings with the Securities and Exchange Commission. Those factors or others could result, for example, in delay or termination of the transaction discussed above. Readers should carefully consider those risks and uncertainties in reading this release. Except as otherwise required by law, BancWest and Community First Bankshares disclaim any obligation to update any forward-looking statements included herein to reflect future events or developments. In connection with the proposed transaction, Community First will be filing proxy statements and other materials with the Securities and Exchange Commission. Investors are urged to read the proxy statement and these materials when they are available because they contain important information. Community First and its officers and directors may be deemed to be participants in the solicitation of proxies with respect to the proposed transaction matters. Information regarding such individuals is included in Community First's proxy statements and Annual Reports on Form 10-K previously filed with the Securities and Exchange Commission, and in the proxy statement relating to the merger when it becomes available. Investors may obtain a free copy of the proxy statements and other relevant documents when they become available as well as other materials filed with the Securities and Exchange Commission concerning Community First and these individuals at the Securities and Exchange Commission's website at http://www.sec.gov/. These materials and other documents may also be obtained for free from: Community First Bankshares, Inc., 520 Main Avenue, Fargo, North Dakota 58124, Attn: Investor Relations. COMMUNITY FIRST BANKSHARES, INC. SELECTED FINANCIAL DATA (In thousands, except share and per share data) Three Months Ended March 31 2004 2003 Current Earnings: Net interest income $56,338 $61,164 Non interest income 22,919 21,866 Provision for loan losses 2,365 3,487 Net income applicable to common equity 16,904 19,401 Per Common and Common Equivalent Share Data: Basic earnings per share $0.46 $0.50 Diluted earnings per share $0.45 $0.50 Dividend per common share $0.24 $0.22 Period end book value $9.80 $9.83 Average common shares outstanding: Basic 37,041,345 38,601,216 Diluted 37,514,081 39,004,529 Key Performance Ratios: Return on average assets 1.25% 1.38% Return on average common shareholders' equity 18.98% 21.01% Average common shareholders' equity to average assets 6.58% 6.56% Leverage ratio 6.84% 6.72% Net interest margin 4.70% 4.90% Efficiency ratio 65.71% 60.43% Average Balance Sheet Data: Assets 5,441,982 5,704,068 Loans 3,305,392 3,587,067 Available-for-sale securities 1,593,403 1,582,359 Deposits 4,359,610 4,569,601 Common shareholders' equity 358,171 374,448 End of Period Data: Assets 5,461,570 5,749,512 Loans 3,308,210 3,494,772 Available-for-sale securities 1,596,363 1,702,469 Deposits 4,391,257 4,542,720 Common shareholders' equity 361,273 377,834 Common shares outstanding 36,862,999 38,454,327 Credit Quality for Operations: Annualized net charge-offs to average loans 0.25% 0.54% Nonperforming assets to total assets 0.47% 0.61% Nonperforming assets to period end loans and OREO 0.77% 1.00% Allowance for loan losses to period end loans 1.59% 1.57% Allowance for loan losses to nonperforming loans 264% 195% COMMUNITY FIRST BANKSHARES, INC. FINANCIAL DATA WORKSHEET (In thousands, except share and per share amounts) Q1'04 Q4'03 Q3'03 Earnings Per Share: Before Extraordinary Items/Cum Effect: Basic $0.46 $0.48 $0.48 Diluted $0.45 $0.48 $0.48 After Extraordinary Items/Cum Effect: Basic $0.46 $0.48 $0.48 Diluted $0.45 $0.48 $0.48 Common Dividend Declared Per Share $0.24 $0.23 $0.23 EOP Book Value $9.80 $9.68 $9.71 EOP Shares Outstanding: Basic 36,862,999 37,357,414 37,723,391 Diluted 37,335,735 37,772,853 38,169,941 Average Shares Outstanding: Basic 37,041,345 37,536,006 37,936,390 Diluted 37,514,081 37,951,445 38,382,940 HIGH Common Share Price $32.16 $29.26 $29.01 LOW Common Share Price $27.13 $26.20 $26.04 INCOME STATEMENT Interest Income (FTE) 71,562 74,587 76,225 Interest Expense 14,214 15,107 16,228 Net Interest Income (FTE) 57,348 59,480 59,997 Loan Loss Provision 2,365 2,225 3,403 Investment Securities Transactions 1,511 1,631 444 Trading Account 0 0 0 Foreign Exchange 0 0 0 Trust Revenue 1,306 1,351 1,186 Insurance Revenue 4,633 3,698 4,080 Security Sales Revenue 3,200 2,648 2,048 Service Charges on Deposits 9,257 9,799 11,061 Other Non-Recurring Revenues 0 0 0 Other Non-Interest Revenue 3,012 4,095 5,702 Material Non-Recurring Revenue 0 0 0 Total Non-Interest Revenues 22,919 23,222 24,521 Salaries & Benefits 28,760 28,061 28,665 Occupancy & Equipment 8,789 8,241 8,206 Deposit Insurance Expense 164 165 179 Foreclosed Property Expense 124 452 471 Other Expenses 13,915 14,690 15,043 Material Non-Recurring Expenses 0 0 0 Minority Interest 0 0 0 Total Non-Interest Expense 51,752 51,609 52,564 Pre-Tax Income (FTE) 26,150 28,868 28,551 Tax Equivalent Adjustment 1,010 1,351 1,302 Reported Pre-Tax Income 25,140 27,517 27,249 Taxes 8,236 9,324 8,908 Income before extraordinary items 16,904 18,193 18,341 Cumulative effect of extraordinary item 0 0 0 Net Income after extraordinary item 16,904 18,193 18,341 MEMO: Net Tax Applicable to Non-Recurring Items 0 0 0 Tax Applicable to Securities Transactions 604 652 178 Common Dividends 8,838 8,607 8,708 Preferred Dividends - Non-Convertible 0 0 0 Convertible 0 0 0 After Tax Interest on Convertible Debt 0 0 0 EOP Employees (FTE) - As Reported 2,125 2,162 2,155 EOP Domestic Offices 137 136 136 AVERAGE BALANCE SHEET Taxable Securities 1,538,803 1,514,720 1,478,419 Tax-Exempt Securities 54,600 58,813 60,198 Domestic Loans 3,305,392 3,334,878 3,410,868 Foreign Loans 0 0 0 Other Earning Assets 6,655 6,193 8,840 Total Earning Assets 4,905,450 4,914,604 4,958,325 Total Assets 5,441,982 5,474,808 5,507,101 Savings/NOW Accounts 1,776,341 1,755,044 1,704,618 Money Market Deposits 198,102 206,816 203,488 Other Consumer Time 867,856 943,619 991,678 CD's $100,000 & Over 502,117 469,723 516,315 Foreign Deposits 0 0 0 Short-Term Borrowings 444,281 416,584 424,670 Long-Term Borrowings 226,849 232,825 242,931 Total Interest-Bearing Liabilities 4,015,546 4,024,611 4,083,700 Demand Deposits 1,015,194 1,032,604 1,007,563 Total Deposits 4,359,610 4,407,806 4,423,662 Non-Convertible Preferred Equity 0 0 0 Convertible Preferred Equity 0 0 0 Common Equity 358,171 355,520 360,187 Total Preferred Equity 0 0 0 PARENT COMPANY DATA EOP Investment in Subsidiaries 497,588 525,067 529,477 EOP Goodwill 0 0 0 ASSET QUALITY EOP Nonaccrual Loans 19,725 20,630 25,932 EOP Restructured Loans 179 188 197 EOP OREO 5,534 5,461 6,236 Total Non-performing Assets 25,438 26,279 32,365 Loans > 90 days still accruing 3,416 3,220 4,451 EOP In-Substance foreclosure 0 0 0 NON-PERFORMING LOANS Construction & Land Development 0 0 0 Commercial Mortgages 7,291 8,237 6,892 Commercial 8,803 7,471 12,917 Residential Mortgages 2,305 2,504 3,848 LDC 0 0 0 Other 1,505 2,606 2,472 Total 19,904 20,818 26,129 NET CHARGE-OFFS (current quarter) Commercial Real Estate 57 90 (38) Commercial 507 1,023 1,029 Residential Mortgages 442 523 748 Consumer 1,023 1,713 1,317 LDC 0 0 0 Agriculture 9 644 535 All Other 0 0 0 Total 2,038 3,993 3,591 Gross Charge-offs 3,659 5,233 5,102 Gross Recoveries 1,621 1,240 1,511 LOAN PORTFOLIO Construction & Land Development 309,609 321,323 333,577 Commercial Mortgages 1,042,274 1,010,358 1,004,765 Commercial 572,229 582,861 611,791 Real Estate Loans 0 0 0 Residential Mortgages 378,949 389,644 399,425 Home Equity Loans 164,691 162,441 164,069 Credit Cards Outstanding 8,512 8,645 8,862 Other Consumer 674,186 669,812 653,085 LDC 0 0 0 Foreign 0 0 0 Agriculture 157,760 178,488 182,578 Total Loans & Leases 3,308,210 3,323,572 3,358,152 EOP DATA Loan Loss Reserve 52,558 52,231 53,999 Assets 5,461,570 5,465,107 5,487,215 Total Deposits 4,391,257 4,389,210 4,370,093 Total Preferred Equity 0 0 0 Common Equity 361,273 361,800 366,109 Convertible Debt 0 0 0 Total Long-Term Debt 233,169 227,441 229,708 Deposit Intangibles 22,180 22,823 23,466 Goodwill 63,448 63,448 63,448 Other Intangibles 7,635 7,579 7,000 Total Intangibles 93,263 93,850 93,914 RISK-ADJUSTED CAPITAL EOP Risk-Adjusted Total Assets 3,861,010 3,884,282 3,958,923 Tier I Capital 370,637 379,146 378,997 Tier I Ratio 9.60% 9.76% 9.57% Tier II Capital 66,694 64,494 70,145 Total Capital 437,331 443,640 449,142 Total Capital Ratio 11.33% 11.42% 11.35% Leverage Ratio 6.84% 6.99% 6.96% Equity to Assets Ratio 6.61% 6.62% 6.67% Tangible Equity to Assets Ratio 4.91% 4.90% 4.96% EFFICIENCY RATIO Net Interest Income 57,348 59,480 59,997 Non-Interest Income 22,919 23,222 24,521 Less: Non-Recurring Income 0 0 0 Less: Other Non-Recurring Items (1,511) (1,631) (444) Total Revenue 78,756 81,071 84,074 Non-Interest Expense 51,752 51,609 52,564 Less: Non-Recurring Non-Int Expenses 0 0 0 Less: Other Non-Recurring Expenses 0 0 0 Total Expense 51,752 51,609 52,564 Efficiency Ratio - Reported 65.71% 63.66% 62.52% PERFORMANCE RATIOS Return on Average Assets 1.25% 1.32% 1.32% Return on Average Equity 18.98% 20.30% 20.20% Net Interest Margin 4.70% 4.80% 4.80% (In thousands, except share and per share amounts) Q2'03 Q1'03 Earnings Per Share: Before Extraordinary Items/Cum Effect: Basic $0.50 $0.50 Diluted $0.49 $0.50 After Extraordinary Items/Cum Effect: Basic $0.50 $0.50 Diluted $0.49 $0.50 Common Dividend Declared Per Share $0.22 $0.22 EOP Book Value $9.98 $9.83 EOP Shares Outstanding: Basic 38,258,397 38,454,327 Diluted 38,737,731 38,897,640 Average Shares Outstanding: Basic 38,371,159 38,601,216 Diluted 38,850,493 39,044,529 HIGH Common Share Price $28.60 $27.23 LOW Common Share Price $25.87 $24.35 INCOME STATEMENT Interest Income (FTE) 80,379 83,325 Interest Expense 18,362 20,841 Net Interest Income (FTE) 62,017 62,484 Loan Loss Provision 3,487 3,487 Investment Securities Transactions 1,795 464 Trading Account 0 0 Foreign Exchange 0 0 Trust Revenue 1,449 1,278 Insurance Revenue 3,364 4,081 Security Sales Revenue 2,310 2,051 Service Charges on Deposits 9,999 9,380 Other Non-Recurring Revenues 0 0 Other Non-Interest Revenue 4,167 4,612 Material Non-Recurring Revenue 0 0 Total Non-Interest Revenues 23,084 21,866 Salaries & Benefits 28,246 27,914 Occupancy & Equipment 8,435 8,608 Deposit Insurance Expense 185 191 Foreclosed Property Expense 213 370 Other Expenses 14,918 13,606 Material Non-Recurring Expenses 0 0 Minority Interest 0 0 Total Non-Interest Expense 51,997 50,689 Pre-Tax Income (FTE) 29,617 30,174 Tax Equivalent Adjustment 1,301 1,320 Reported Pre-Tax Income 28,316 28,854 Taxes 9,230 9,453 Income before extraordinary items 19,086 19,401 Cumulative effect of extraordinary item 0 0 Net Income after extraordinary item 19,086 19,401 MEMO: Net Tax Applicable to Non-Recurring Items 0 0 Tax Applicable to Securities Transactions 718 186 Common Dividends 8,438 8,497 Preferred Dividends - Non-Convertible 0 0 Convertible 0 0 After Tax Interest on Convertible Debt 0 0 EOP Employees (FTE) - As Reported 2,156 2,171 EOP Domestic Offices 136 136 AVERAGE BALANCE SHEET Taxable Securities 1,581,063 1,513,850 Tax-Exempt Securities 63,286 68,509 Domestic Loans 3,456,376 3,587,067 Foreign Loans 0 0 Other Earning Assets 8,393 5,009 Total Earning Assets 5,109,118 5,174,435 Total Assets 5,648,459 5,704,068 Savings/NOW Accounts 1,694,022 1,681,019 Money Market Deposits 214,451 224,291 Other Consumer Time 1,057,005 1,106,530 CD's $100,000 & Over 548,323 612,227 Foreign Deposits 0 0 Short-Term Borrowings 490,351 435,239 Long-Term Borrowings 246,049 263,019 Total Interest-Bearing Liabilities 4,250,201 4,322,325 Demand Deposits 959,450 945,534 Total Deposits 4,473,251 4,569,601 Non-Convertible Preferred Equity 0 0 Convertible Preferred Equity 0 0 Common Equity 374,259 374,448 Total Preferred Equity 0 0 PARENT COMPANY DATA EOP Investment in Subsidiaries 594,946 583,710 EOP Goodwill 0 0 ASSET QUALITY EOP Nonaccrual Loans 25,543 27,897 EOP Restructured Loans 205 212 EOP OREO 6,489 7,082 Total Non-performing Assets 32,237 35,191 Loans > 90 days still accruing 2,603 3,364 EOP In-Substance foreclosure 0 0 NON-PERFORMING LOANS Construction & Land Development 0 0 Commercial Mortgages 6,551 6,426 Commercial 12,534 15,645 Residential Mortgages 4,755 3,929 LDC 0 0 Other 1,908 2,109 Total 25,748 28,109 NET CHARGE-OFFS (current quarter) Commercial Real Estate 17 250 Commercial 1,456 1,888 Residential Mortgages 274 208 Consumer 1,162 1,497 LDC 0 0 Agriculture 1,286 905 All Other 0 0 Total 4,195 4,748 Gross Charge-offs 5,711 6,564 Gross Recoveries 1,516 1,816 LOAN PORTFOLIO Construction & Land Development 368,914 410,681 Commercial Mortgages 976,928 944,544 Commercial 656,350 687,263 Real Estate Loans 0 0 Residential Mortgages 423,605 445,305 Home Equity Loans 167,199 173,768 Credit Cards Outstanding 8,765 8,915 Other Consumer 632,004 625,666 LDC 0 0 Foreign 0 0 Agriculture 192,137 198,630 Total Loans & Leases 3,425,902 3,494,772 EOP DATA Loan Loss Reserve 54,187 54,895 Assets 5,589,871 5,749,512 Total Deposits 4,461,248 4,542,720 Total Preferred Equity 0 0 Common Equity 381,960 377,834 Convertible Debt 0 0 Total Long-Term Debt 241,970 309,083 Deposit Intangibles 24,109 24,752 Goodwill 63,448 62,903 Other Intangibles 7,131 7,092 Total Intangibles 94,688 94,747 RISK-ADJUSTED CAPITAL EOP Risk-Adjusted Total Assets 3,960,031 4,057,705 Tier I Capital 386,988 383,180 Tier I Ratio 9.77% 9.44% Tier II Capital 73,451 140,930 Total Capital 460,439 524,110 Total Capital Ratio 11.63% 12.92% Leverage Ratio 6.98% 6.72% Equity to Assets Ratio 6.83% 6.57% Tangible Equity to Assets Ratio 5.14% 4.92% EFFICIENCY RATIO Net Interest Income 62,017 62,484 Non-Interest Income 23,084 21,866 Less: Non-Recurring Income 0 0 Less: Other Non-Recurring Items (1,795) (464) Total Revenue 83,306 83,886 Non-Interest Expense 51,997 50,689 Less: Non-Recurring Non-Int Expenses 0 0 Less: Other Non-Recurring Expenses 0 0 Total Expense 51,997 50,689 Efficiency Ratio - Reported 62.42% 60.43% PERFORMANCE RATIOS Return on Average Assets 1.36% 1.38% Return on Average Equity 20.45% 21.01% Net Interest Margin 4.87% 4.90% COMMUNITY FIRST BANKSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) Q1-04 Q4-03 Q3-03 Interest income: Loans $54,543 $57,048 $59,774 Investment securities 15,999 16,179 15,135 Interest-bearing deposits 9 9 12 Fed funds sold & resale agreements 1 0 2 Total interest income 70,552 73,236 74,923 Interest expense: Deposits 9,202 10,130 11,060 Short-term & other borrowings 1,085 1,035 1,067 Long-term debt 3,927 3,942 4,101 Total interest expense 14,214 15,107 16,228 Net interest income 56,338 58,129 58,695 Provision for loan losses 2,365 2,225 3,403 Net interest income after provision for loan losses 53,973 55,904 55,292 Noninterest income: Service charges on deposit accounts 9,257 9,799 11,061 Insurance commissions 4,633 3,698 4,080 Fees from fiduciary activities 1,306 1,351 1,186 Security sales commissions 3,200 2,648 2,048 Net gains on sales of available-for- sale securities 1,511 1,631 444 Other 3,012 4,095 5,702 Total noninterest income 22,919 23,222 24,521 Noninterest expense: Salaries & employee benefits 28,760 28,061 28,665 Net occupancy 8,789 8,241 8,206 FDIC insurance 164 165 179 Legal and accounting 337 759 646 Other professional service 987 1,345 1,052 Advertising 1,042 787 1,141 Telephone 1,474 1,218 1,408 Data processing 2,044 1,828 1,630 Other real estate and repossessed personal property 124 452 471 Amortization of intangibles 867 859 844 Other 7,164 7,894 8,322 Total noninterest expense 51,752 51,609 52,564 Income before income taxes 25,140 27,517 27,249 Provision for income taxes 8,236 9,324 8,908 Net income applicable to common equity $16,904 $18,193 $18,341 Earnings per common and common equivalent share: Basic net income $0.46 $0.48 $0.48 Diluted net income $0.45 $0.48 $0.48 Average common shares outstanding: Basic 37,041,345 37,536,006 37,936,390 Diluted 37,514,081 37,951,445 38,382,940 (In thousands, except per share amounts) Q2-03 Q1-03 Interest income: Loans $61,410 $63,210 Investment securities 17,651 18,783 Interest-bearing deposits 16 12 Fed funds sold & resale agreements 1 0 Total interest income 79,078 82,005 Interest expense: Deposits 12,662 14,707 Short-term & other borrowings 1,480 1,358 Long-term debt 4,220 4,776 Total interest expense 18,362 20,841 Net interest income 60,716 61,164 Provision for loan losses 3,487 3,487 Net interest income after provision for loan losses 57,229 57,677 Noninterest income: Service charges on deposit accounts 9,999 9,380 Insurance commissions 3,364 4,081 Fees from fiduciary activities 1,449 1,278 Security sales commissions 2,310 2,051 Net gains on sales of available- for-sale securities 1,795 464 Other 4,167 4,612 Total noninterest income 23,084 21,866 Noninterest expense: Salaries & employee benefits 28,246 27,914 Net occupancy 8,435 8,608 FDIC insurance 185 191 Legal and accounting 879 407 Other professional service 1,217 889 Advertising 1,023 930 Telephone 1,628 1,526 Data processing 1,860 1,718 Other real estate and repossessed personal property 213 370 Amortization of intangibles 840 831 Other 7,471 7,305 Total noninterest expense 51,997 50,689 Income before income taxes 28,316 28,854 Provision for income taxes 9,230 9,453 Net income applicable to common equity $19,086 $19,401 Earnings per common and common equivalent share: Basic net income $0.50 $0.50 Diluted net income $0.49 $0.50 Average common shares outstanding: Basic 38,371,159 38,601,216 Diluted 38,850,493 39,044,529 COMMUNITY FIRST BANKSHARES, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) 3/31/04 12/31/03 9/30/03 ASSETS Cash & due from banks $212,583 $234,076 $228,452 Fed funds sold and securities purchased under agreement to resell 0 0 0 Interest-bearing deposits 4,373 3,319 4,501 Available-for-sale securities 1,596,363 1,563,419 1,549,792 Loans 3,308,210 3,323,572 3,358,152 Less: Allowance for loan losses (52,558) (52,231) (53,999) Net loans 3,255,652 3,271,341 3,304,153 Bank premises & equipment - net 133,465 131,008 132,533 Accrued interest receivable 29,632 28,696 33,718 Goodwill 63,448 63,448 63,448 Other intangible assets 29,815 30,402 30,466 Other assets 136,239 139,398 140,152 Total assets 5,461,570 5,465,107 5,487,215 LIABILITIES & SHAREHOLDERS' EQUITY Deposits: Noninterest-bearing 436,279 447,648 441,139.00 Interest-bearing: Savings & NOW accounts 2,585,254 2,552,056 2,474,429 Time deposits over $100,000 511,756 501,440 510,445 Other time deposits 857,968 888,066 944,080 Total deposits 4,391,257 4,389,210 4,370,093 Fed funds purchased and securities sold under agreement to repurchase 416,732 416,689 442,794 Short-term borrowings 12,996 25,577 30,477 Long-term debt 228,211 222,211 224,211 Capital lease obligations 4,958 5,230 5,497 Accrued interest payable 13,238 13,081 14,759 Other liabilities 32,905 31,309 33,275 Total liabilities 5,100,297 5,103,307 5,121,106 Shareholders' equity: Common stock 510 510 510 Capital surplus 195,155 194,911 193,516 Retained earnings 440,322 432,574 423,043 SFAS 115 Equity Adjustment 13,348 7,053 11,426 Cost of common stock in treasury (288,062) (273,248) (262,386) Total shareholders' equity 361,273 361,800 366,109 Total liabilities and shareholders' equity $5,461,570 $5,465,107 $5,487,215 Period-end common shares outstanding 36,862,999 37,357,414 37,723,391 Book value per common share $9.80 $9.68 $9.71 (In thousands, except per share amounts) 6/30/03 3/31/03 ASSETS Cash & due from banks $223,522 $201,185 Fed funds sold and securities purchased under agreement to resell 6,750 0 Interest-bearing deposits 5,390 8,238 Available-for-sale securities 1,588,644 1,702,469 Loans 3,425,902 3,494,772 Less: Allowance for loan losses (54,187) (54,895) Net loans 3,371,715 3,439,877 Bank premises & equipment - net 132,581 132,736 Accrued interest receivable 31,481 33,844 Goodwill 63,448 62,903 Other intangible assets 31,240 31,844 Other assets 135,100 136,416 Total assets 5,589,871 5,749,512 LIABILITIES & SHAREHOLDERS' EQUITY Deposits: Noninterest-bearing 461,652.00 369,282.00 Interest-bearing: Savings & NOW accounts 2,444,297 2,503,208 Time deposits over $100,000 551,390 605,849 Other time deposits 1,003,909 1,064,381 Total deposits 4,461,248 4,542,720 Fed funds purchased and securities sold under agreement to repurchase 376,244 437,287 Short-term borrowings 83,329 30,602 Long-term debt 236,211 303,067 Capital lease obligations 5,759 6,016 Accrued interest payable 18,417 21,308 Other liabilities 26,703 30,678 Total liabilities 5,207,911 5,371,678 Shareholders' equity: Common stock 510 510 Capital surplus 194,365 194,144 Retained earnings 413,690 403,759 SFAS 115 Equity Adjustment 20,284 19,389 Cost of common stock in treasury (246,889) (239,968) Total shareholders' equity 381,960 377,834 Total liabilities and shareholders' equity $5,589,871 $5,749,512 Period-end common shares outstanding 38,258,397 38,454,327 Book value per common share $9.98 $9.83 COMMUNITY FIRST BANKSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended March 31, % (In thousands, except per share amounts) 2004 2003 Change Interest income: Loans $54,543 $63,210 -14% Investment securities 15,999 18,783 -15% Interest-bearing deposits 9 12 -25% Federal funds sold and resale agreements 1 0 0% Total interest income 70,552 82,005 -14% Interest expense: Deposits 9,202 14,707 -37% Short-term and other borrowings 1,085 1,358 -20% Long-term debt 3,927 4,776 -18% Total interest expense 14,214 20,841 -32% Net interest income 56,338 61,164 -8% Provision for loan losses 2,365 3,487 -32% Net interest income after provision for loan losses 53,973 57,677 -6% Noninterest income: Service charges on deposit accounts 9,257 9,380 -1% Insurance commissions 4,633 4,081 14% Fees from fiduciary activities 1,306 1,278 2% Security sales commissions 3,200 2,051 56% Net gains on sales of securities 1,511 464 226% Other 3,012 4,612 -35% Total noninterest income 22,919 21,866 5% Noninterest expense: Salaries and employee benefits 28,760 27,914 3% Net occupancy 8,789 8,608 2% FDIC insurance 164 191 -14% Legal and accounting 337 407 -17% Other professional service 987 889 11% Advertising 1,042 930 12% Telephone 1,474 1,526 -3% Data processing 2,044 1,718 19% Other real estate and repossessed personal property 124 370 -66% Amortization of intangibles 867 831 4% Other 7,164 7,305 -2% Total noninterest expense 51,752 50,689 2% Income before income taxes 25,140 28,854 -13% Provision for income taxes 8,236 9,453 -13% Net income applicable to common equity $16,904 $19,401 -13% Earnings per common and common equivalent share: Basic net income $0.46 $0.50 8% Diluted net income $0.45 $0.50 10% Average common and common equivalent shares outstanding: Basic 37,041,345 38,601,216 -4% Diluted 37,514,081 39,044,529 -4% COMMUNITY FIRST BANKSHARES, INC. CONSOLIDATED BALANCE SHEETS March 31, December 31, % (In thousands, except per share amounts) 2004 2003 Change Assets: Cash and due from banks $212,583 $234,076 -9% Federal funds sold and securities purchased under agreements to resell 0 0 0% Interest-bearing deposits 4,373 3,319 32% Available-for-sale securities 1,596,363 1,563,419 2% Loans 3,308,210 3,323,572 0% Less: Allowance for loan losses (52,558) (52,231) 1% Net loans 3,255,652 3,271,341 0% Bank premises and equipment, net 133,465 131,008 2% Accrued interest receivable 29,632 28,696 3% Goodwill 63,448 63,448 0% Other intangible assets 29,815 30,402 -2% Other assets 136,239 139,398 -2% Total assets 5,461,570 5,465,107 0% Liabilities and shareholders' equity Deposits: Noninterest-bearing 436,279 447,648 -3% Interest-bearing: Savings and NOW accounts 2,585,254 2,552,056 1% Time accounts over $100,000 511,756 501,440 2% Other time accounts 857,968 888,066 -3% Total deposits 4,391,257 4,389,210 0% Federal funds purchased and securities sold under agreements to repurchase 416,732 416,689 0% Other short-term borrowings 12,996 25,577 -49% Long-term debt 228,211 222,211 3% Accrued interest payable 13,238 13,081 1% Other liabilities 37,863 36,539 4% Total liabilities 5,100,297 5,103,307 0% Shareholders' equity: Common stock, par value $.01 per share: Authorized Shares - 80,000,000 Issued Shares - 51,021,896 510 510 0% Capital surplus 195,155 194,911 0% Retained earnings 440,322 432,574 2% Unrealized gain on available-for- sale securities, net of tax 13,348 7,053 89% Less cost of common stock in treasury - March 31, 2004 - 14,158,897 shares December 31, 2003 - 13,664,482 shares (288,062) (273,248) 5% Total shareholders' equity 361,273 361,800 0% Total liabilities and shareholders' equity $5,461,570 $5,465,107 0% Period-end common shares outstanding 36,862,999 37,357,414 -1% Book value per common share $9.80 $9.68 1% DATASOURCE: Community First Bankshares, Inc. CONTACT: Jeff Wilhoit of Financial Relations Board, +1-312-640-6757, , or Mark A. Anderson of Community First Bankshares, +1-701-298-5600, Web site: http://www.bancwestcorp.com/ http://www.communityfirst.com/

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