-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GehQOeHDpQa7NuofQ52LZ5zgMjqfrScHV81ffhgxD+g+e9x6hThzxVPcXUd3aCwS OiuxcL4Xq9WOZUf0LABwPQ== 0000904280-03-000010.txt : 20030211 0000904280-03-000010.hdr.sgml : 20030211 20030211152850 ACCESSION NUMBER: 0000904280-03-000010 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HIGH COUNTRY BANCORP INC CENTRAL INDEX KEY: 0001044676 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 841438612 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-23409 FILM NUMBER: 03550116 BUSINESS ADDRESS: STREET 1: 130 WEST 2ND ST CITY: SALIDA STATE: CO ZIP: 81201 BUSINESS PHONE: 7195392516 MAIL ADDRESS: STREET 1: 130 WEST 2ND STREET CITY: SALIDA STATE: CO ZIP: 81201 10QSB 1 fm10q123102-1872.txt FORM 10-QSB 12-31-02 HIGH COUNTRY BANCORP, INC. U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] Quarterly report under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 2002 Commission file number 0-23409 High Country Bancorp, Inc. ----------------------------------------------------------------- (Exact Name of Small Business Issuer as Specified in Its Charter) Colorado 84-1438612 - ------------------------------- -------------------- (State of 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) 719-539-2516 ------------------------------------------------ (Issuer's Telephone Number, Including Area Code) Check whether the issuer: (1) 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 --- --- State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Shares of common stock, $.01 par value outstanding as of February 3, 2002 898,409 HIGH COUNTRY BANCORP, INC. CONTENTS PART I - FINANCIAL INFORMATION Item 1: Financial Statements Consolidated Statements of Condition at June 30, 2002 and December 31, 2002 3 Statements of Consolidated Income for the Three and Six Months Ended December 31, 2002 and 2001 4 Statements of Consolidated Cash Flows for the Six Months Ended December 31, 2002 and 2001 5 Notes to Financial Statements 6-7 Item 2: Management's Discussion and Analysis or Plan of Operations 8-11 Item 3: Controls and Procedures 12 PART II - OTHER INFORMATION Item 1: Legal Proceedings 13 Item 2: Changes in Securities and Use of Proceeds 13 Item 3: Defaults Upon Senior Securities 13 Item 4: Submission of Matters to a Vote of Security Holders 13 Item 5: Other Information 13 Item 6: Exhibits and Reports on Form 8-K 13 Signatures 14 2 HIGH COUNTRY BANCORP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
December 31, June 30, ASSETS 2002 2002 ----------------------------- Cash and amounts due from banks $ 3,344,700 $ 2,873,502 Interest- bearing deposits at other institutions 3,806,453 8,590,443 Mortgage-backed securities, held to maturity 11,604,212 10,306,936 Securities, held to maturity 302,681 303,039 Loans receivable - net 146,743,585 143,195,129 Loans held for sale 2,086,450 642,000 Federal Home Loan Bank stock, at cost 2,421,600 2,421,600 Accrued interest receivable 1,399,212 1,299,341 Property and equipment, net 6,553,862 6,069,688 Mortgage servicing rights 2,380 6,788 Prepaid expenses and other assets 560,684 693,583 Deferred income taxes 235,300 183,100 ------------- ------------- TOTAL ASSETS $ 179,061,119 $ 176,585,149 ============= ============= LIABILITIES AND EQUITY LIABILITIES Deposits 122,520,113 $ 116,142,046 Advances by borrowers for taxes and insurance 201,474 -- Escrow accounts 28,825 657,271 Accounts payable and other liabilities 1,035,565 1,013,064 Advances from Federal Home Loan Bank 38,400,000 42,641,665 Accrued income taxes payable 26,817 -- ------------- ------------- TOTAL LIABILITIES 162,212,794 160,454,046 ------------- ------------- 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 898,409 (December 31, 2002) and 905,409 (June 30, 2002) 8,984 9,054 Paid-in capital 7,177,295 7,262,469 Retained earnings - substantially restricted 10,217,876 9,461,842 Note receivable from ESOP Trust (521,065) (521,065) Deferred MRP stock awards (34,765) (81,197) ------------- ------------- TOTAL EQUITY 16,848,325 16,131,103 ------------- ------------- TOTAL LIABILITIES AND EQUITY $ 179,061,119 $ 176,585,149 ============= =============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3 HIGH COUNTRY BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Six Months Ended December 31, December 31, 2002 2001 2002 2001 ----------- ----------- ----------- ----------- Interest Income Interest on loans $ 3,019,604 $ 3,100,828 $ 6,051,581 $ 6,206,175 Interest on securities held-to-maturity 93,819 63,563 194,215 99,173 Interest on other interest- bearing assets 47,014 104,781 104,107 243,192 ----------- ----------- ----------- ----------- Total interest income 3,160,437 3,269,172 6,349,903 6,548,540 ----------- ----------- ----------- ----------- Interest Expense Deposits 715,246 924,925 1,455,932 1,910,480 Federal Home Loan Bank advances 590,554 662,102 1,225,579 1,334,747 ----------- ----------- ----------- ----------- Total interest expense 1,305,800 1,587,027 2,681,511 3,245,227 ----------- ----------- ----------- ----------- Net interest income 1,854,637 1,682,145 3,668,392 3,303,313 Provision for losses on loans 77,000 55,000 174,000 115,000 ----------- ----------- ----------- ----------- Net interest income after provision for loan losses 1,777,637 1,627,145 3,494,392 3,188,313 ----------- ----------- ----------- ----------- Noninterest Income Service charges on deposits 64,308 71,478 125,272 133,765 Loans sold 294,443 292,015 475,149 479,844 Title and escrow fees 58,676 105,098 108,286 198,714 Other 198,274 127,041 359,715 219,169 ----------- ----------- ----------- ----------- Total noninterest income 615,701 595,632 1,068,422 1,031,492 ----------- ----------- ----------- ----------- Noninterest Expense Compensation and benefits 899,398 858,980 1,769,903 1,654,904 Occupancy and equipment 339,194 325,253 667,006 629,776 Insurance and professional fees 64,179 60,671 158,597 147,119 Other 219,733 210,514 383,347 358,065 ----------- ----------- ----------- ----------- Total noninterest expense 1,522,504 1,455,418 2,978,853 2,789,864 ----------- ----------- ----------- ----------- Income before income taxes 870,834 767,359 1,583,961 1,429,941 Income tax expense 340,000 293,000 614,800 544,500 ----------- ----------- ----------- ----------- Net income $ 530,834 $ 474,359 $ 969,161 $ 885,441 =========== =========== =========== =========== Basic Earnings Per Common Share $ 0.62 $ 0.56 $ 1.13 $ 0.98 =========== =========== =========== =========== Diluted Earnings Per Common Share $ 0.59 $ 0.54 $ 1.07 $ 0.96 =========== =========== =========== =========== Weighted Average Common Shares Outstanding Basic 858,723 852,463 858,961 905,303 Diluted 905,931 877,758 901,652 926,984
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4 HIGH COUNTRY BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended December 31, 2002 2001 ------------ ------------ Operating Activities Net income $ 969,161 $ 885,441 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of: Deferred loan origination fees (96,746) (145,194) Premiums on investments 16,302 6,166 Loss on disposition of equipment 1,839 -- Compensation expense on Management Recognition Plan 64,961 128,830 ESOP market value expense 59,354 34,429 Provision for losses on loans 174,000 115,000 Deferred income taxes (52,200) (30,000) Depreciation 235,838 230,667 Income taxes 26,817 (29,071) Net change in miscellaneous assets 37,436 (342,425) Net change in miscellaneous liabilities 223,975 153,873 ------------ ------------ Net cash provided by operating activities 1,660,737 1,007,716 ------------ ------------ Investing Activities Net change in interest bearing deposits 4,783,990 (2,474,971) Net change in loans receivable (5,070,160) 1,309,977 Purchases of mortgage-backed securities (2,528,391) (7,869,845) Principal repayments of mortgage-backed securities-held-to-maturity 1,215,171 586,837 Purchases of property and equipment (721,851) (293,463) ------------ ------------ Net cash used by investing activities (2,321,241) (8,741,465) ------------ ------------ Financing Activities Net change in deposits 6,378,067 11,485,873 Net change in escrow funds (628,446) 621,751 Purchase of common stock (163,127) (1,850,832) Cash dividends paid (213,127) (214,682) Proceeds (payment) on FHLB advances (4,241,665) (1,741,667) ------------ ------------ Net cash provided by financing activities 1,131,702 8,300,443 Net increase (decrease) in cash and cash equivalents 471,198 566,694 Cash and cash equivalents, beginning 2,873,502 2,759,671 ------------ ------------ Cash and cash equivalents, ending $ 3,344,700 $ 3,326,365 ============ ============ Supplemental disclosure of cash flow information Cash paid for: Taxes $ 557,265 $ 593,031 Interest 2,695,404 3,269,296
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5 HIGH COUNTRY BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) DECEMBER 31, 2002 Note 1. Nature of Business High Country Bancorp, Inc. (the "Company") was incorporated under the laws of the State of Colorado for the purpose of becoming the holding company of Salida Building and Loan Association (the "Association") in connection with the Association's conversion from a federally chartered mutual savings and loan association to a federally chartered stock savings and loan association, pursuant to its Plan of Conversion. The Company was organized in August 1997 to acquire all of the common stock of Salida Building and Loan Association upon its conversion to stock form, which was completed on December 9, 1997. In November 1999, the Association incorporated a new subsidiary, High Country Title and Escrow Company. This company is offering title insurance and escrow closing services with the Association's market area. In February 2000, the name of Salida Building and Loan Association was changed to High Country Bank (the "Bank"). Note 2. Basis of Presentation The accompanying unaudited consolidated financial statements, (except for the statement of financial condition at June 30, 2002, which is audited) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management all adjustments necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. The financial statements of the Company are presented on a consolidated basis with those of High Country Bank and it's subsidiary High Country Title and Escrow Company. The results of operations for the six months ended December 31, 2002 are not necessarily indicative of the results of operations that may be expected for the year ended June 30, 2003. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as 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. The accounting policies followed are as set forth in Note 1. of the Notes to Financial Statements in the 2002 High Country Bancorp, Inc. financial statements Note 3. Regulatory Capital Requirements At December 31, 2002, the Bank met each of the three current minimum regulatory capital requirements. The following table summarizes the Bank's regulatory capital position at December 31, 2002:
Tangible Capital: Actual $16,822,000 9.39% Required 2,687,000 1.50 Excess $14,135,000 7.89% Core Capital: Actual $16,822,000 9.39% Required 5,375,000 3.00 Excess $11,447,000 6.39% Risk-Based Capital: Actual $17,405,000 13.38% Required 10,408,000 8.00 Excess $ 6,997,000 5.38%
6 HIGH COUNTRY BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) December 31, 2002 Tangible and core capital levels are shown as a percentage of total adjusted assets; risk-based capital levels are shown as a percentage of risk-weighted assets. Note 4. 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 and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. 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. 7 HIGH COUNTRY BANCORP, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2002 AND DECEMBER 31, 2002 The Company's total assets increased by $2.5 million or 1.4% from $176.6 million at June 30, 2002 to $179.1 million at December 31, 2002. The increase in assets was due to growth in loans and mortgage-backed securities. Interest-bearing deposits decreased $4.8 million from $8.6 million at June 30, 2002 to $3.8 million at December 31, 2002. The deposits were used to fund loans and purchase mortgage-backed securities. Mortgage-backed securities classified as "held to maturity" increased from $10.3 million at June 30, to $11.6 million at December 31, 2002. The increase was due to the purchase of an adjustable-rate and short term mortgage backed security in order to improve investment yields as compared to interest-bearing deposits and lower interest rate risk. At December 31, 2002, the securities had an estimated fair value of $11.7 million. Net loans increased $5.0 million from $143.8 million at June 30, 2002 to $148.8 million at December 31, 2002. During the six months ended December 31, 2002, single family construction loans increased $2.2 million, single family mortgage loans $2.1 million, commercial non-mortgage loans $1.6 million, and commercial real estate loans $1.2 million. Auto loans decreased $900,000 during the same period. Refinancing activity due to low interest rates, local construction activity and seasonal commercial loan demand has helped loan originations. During the six months ended December 31, 2002, the Bank sold $29.5 million of fixed-rate loans to the Federal Home Loan Mortgage Corporation. At December 31, 2002, loans held for sale were $2.1 million. The loans are valued at the lower of cost or market. As of December 31, 2002 and June 30, 2002, the non-performing loans in the Bank's portfolio were $2.8 and $1.6 million, respectively. The increase was primarily due to the addition of four non-performing loans totaling $1.1 million to two tourism related companies. These companies and other tourism related businesses were adversely impacted in the summer of 2002 by a major drought and nearby forest fires which negatively impacted the local tourism economy. The largest non-performing loan totals $729,000 and is a business purpose loan secured by two single family residences and vacant land. No loss is expected on this loan. The total non-performing loans at December 31, 2002 included 33 loans secured by commercial real estate, single family residences, vacant land, business equipment and autos. Except as discussed below, the Bank had no loans not classified as non-performing or restructured where known information about possible credit problems of borrowers caused management to have serious concerns as to the ability of the borrowers to comply with present loan repayment terms and may result in disclosure as non-performing or restructured. The Bank maintains an internal watch list which includes these loans. As of December 31, 2002, the majority of the watch list was seven loans totaling $2.7 million to two tourism related businesses. One borrower with three of these loans totaling $2.0 million has received an SBA loan commitment of $640,000 for disaster assistance. This same borrower also has two non-performing loans totaling $580,000. The loan will allow loans to be brought current, repayment of a portion of the loans and provide working capital for operations until the 2003 summer tourism season begins. A second borrower has four loans totaling $659,000 which were added to the internal watch list due to cash flow problems associated with a slow tourism season. Repayment to avoid nonperformance is expected to occur through retail sales in the upcoming summer tourism season. These loans are secured by equipment, inventory and commercial real estate. Although a specific allowance for loss has not been established on these loans, management considered the potential risk of loss on these loans in establishing the provision for loan losses for the six months ended December 31, 2002. 8 HIGH COUNTRY BANCORP, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS The allowance for loan losses totaled $1.6 million at December 31, 2002 and $1.5 million at June 30, 2002. At December 31, 2002 and June 30, 2002, the ratio of the allowance for loan losses to net loans was 1.08% and 1.03%, respectively. During the six months ended December 31, 2002, there was $60,000 of loans charged off and $2,000 in recoveries of previous loan losses. The determination of the allowance for loan losses is based on a review and classification of the Bank's portfolio and other factors, including the market value of the underlying collateral, growth and composition of the loan portfolio, the relationship of the allowance for loan losses to outstanding loans, historical loss experience, delinquency trends and prevailing economic conditions. Particular attention was focused on the Bank's commercial loan portfolio and any impaired loans. The Bank believes the current level of allowance for loan losses is adequate to provide for probable future losses, although there are no assurances that probable future losses, if any, will not exceed estimated amounts. Property and equipment increased $484,000 from $6.1 million at June 30, 2002 to $6.6 million at December 31, 2002. The majority of the increase was for the purchase of land for a new branch site in Buena Vista, Colorado. The new branch is expected to be completed in 2004 and will replace the current Buena Vista branch office. At December 31, 2002 deposits increased $6.4 million to $122.5 million from $116.1 million at June 30, 2002. Competitive rates and stock market uncertainty fueled the growth. The increase funded loan growth and the pay down of Federal Home Loan Bank advances. Escrow accounts decreased from $657,000 at June 30, 2002 to $29,000 at December 31, 2002. The decrease was due to a change at High Country Title and Escrow Company which limited escrow closing services and the associated accounts. Advances from the Federal Home Loan Bank decreased to $38.4 million at December 31, 2002 from $42.6 million at June 30, 2002. Funds from deposits were used to pay-off maturing advances. On November 19, 2002, the Company paid dividends of $0.25 per share. In December 2002, the Company repurchased 7,000 shares at a cost of $163,000. On November 3, 2001, the Company announced a plan to repurchase up to 10% or 92,221 shares of the outstanding stock. Since that date, the Company has repurchased 23,800 shares at a cost of $445,000. COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001 Net Income. The Company's net income for the three months ended December 31, 2002 was $531,000 compared to $474,000 for the three months ended December 31, 2001. The increase in net income resulted primarily from increased net interest income which offset increased non-interest compensation expense and income tax expense. Net Interest Income. Net interest income for the three months ended December 31, 2002 was $1.9 million compared to $1.7 million for the three months ended December 31, 2001. Although both interest earning assets and interest bearing liabilities increased, the cost of interest bearing liabilities decreased at a greater rate than the yield on interest earning assets. The average yield on interest earning assets decreased from 8.18% for the three months ended December 31, 2001 to 7.49% for the three months ended December 31, 2002. The decrease due to loans refinancing at lower rates was partially offset by reinvestment since December 2001 of low yielding Federal Home Loan Bank Overnight Deposits into slightly higher earning mortgage backed securities. The average cost of interest bearing liabilities also decreased from 4.36% for the three months ended December 31, 2001 to 3.46% for the three months ended December 31, 2002. The decrease in costs was due to lower deposit rates and less reliance on higher costing Federal Home Loan Advances. The interest rate spread increased from 3.82% for the 9 HIGH COUNTRY BANCORP, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS three months ended December 31, 2001 to 4.03% for the three months ended December 31, 2002. Provision for Losses on Loans. The provision for loan loss was $77,000 for the three months ended December 31, 2002 as compared to $55,000 for the three months ended December 31, 2001. The increase was the result of provisions for loans impacted by the drought and loan charge offs. Non-interest Income. Non-interest income was $615,000 for the three months ended December 31, 2002 as compared to $596,000 for the three months ended December 31, 2001. Title and escrow fees declined due to a change at High Country Title and Escrow Company which limited escrow closing services and associated fees. This decrease in title and escrow fees was offset by an increase in other non-interest income. The increase in other income was primarily due to higher loan origination fees. Non-interest Expenses. Non-interest expenses increased $67,000 to $1.5 million for the three months ended December 31, 2002 as compared to the three months ended December 31, 2001. The majority of the increase was in compensation and benefit expense. The increase is tied to additional employees and higher benefit fees as compared to the previous year. Occupancy and other expenses increased due to growth. COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED DECEMBER 31 2002 AND 2001 Net Income. The Company's net income for the six months ended December 31, 2002 was $969,000 compared to $885,000 for the six months ended December 31, 2001. The increase in net income resulted primarily from increased net interest income which offset increased compensation, occupancy and other operating expenses. Net Interest Income. Net interest income for the six months ended December 31, 2002 was $3.7 million compared to $3.3 million for the six months ended December 31, 2001. Although both interest earning assets and interest bearing liabilities increased, the cost of interest bearing liabilities decreased at a greater rate than the yield on interest earning assets. The average yield on interest earning assets decreased from 8.33% for the six months ended December 31, 2001 to 7.56% for the six months ended December 31, 2002. The decrease due to loans refinancing at lower rates was partially offset by reinvestment since December 2001 of low yielding Federal Home Loan Bank Overnight Deposits into slightly higher earning mortgage backed securities. The average cost of interest bearing liabilities also decreased from 4.56% for the six months ended December 31, 2001 to 3.55% for the six months ended December 31, 2002. The decrease in average cost is due to less reliance on higher costing FHLB advances and lower deposit rates. The interest rate spread increased from 3.77% for the six months ended December 31, 2001 to 4.01% for the six months ended December 31, 2002. Non-interest Income. Non-interest income increased from $1.0 million for the six months ended December 31, 2001 to $1.1 million for the six months ended December 31, 2002. The increase is primarily due to higher other income which primarily consists of loan origination fees. The Bank has recently increased loan origination fees and started charging fees for all loans. The increase was offset by lower title and escrow fees which decreased due a reduction in closing services at High Country Title and Escrow Company. Non-interest Expense. Non-interest expense increased from $2.8 million for the six months ended December 31, 2001 to $3.0 million for the six months ended December 31, 2002. The majority of the increase was in compensation and benefit expense. The increase is tied to additional employees and higher benefit fees as compared to the previous year. Occupancy and other expenses increased due to growth. 10 HIGH COUNTRY BANCORP, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of funds consist of deposits, FHLB advances, repayment of loans and mortgage-backed securities, maturities of investments and interest-bearing deposits, and funds provided from operations. While scheduled repayments of loans and mortgage-backed securities and maturities of investment securities are predicable sources of funds, deposit flows and loan prepayments are greatly influenced by the general level of interest rates, economic conditions and competition. The Company uses its liquidity resources principally to fund existing and future loan commitments, to fund maturing certificates of deposit and demand deposit withdrawals, to fund maturing FHLB advances, to invest in other interest-earning assets, to maintain liquidity, and to meet operating expenses. Management believes that proceeds from loan repayments and other sources of funds will be adequate to meet the Company's liquidity needs for the immediate future. The Bank is required to maintain sufficient liquidity to ensure a safe and sound operation. Management believes that the Bank's sources of liquidity for potential uses are adequate under the current regulations. IMPACT OF INFLATION AND CHANGING PRICES The financial statements and related data presented herein have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and results of operations in terms of historical dollars without considering changes in the relative purchasing power of money over time because of inflation. Unlike most industrial companies, virtually all of the assets and liabilities of the Company are monetary in nature. As a result, interest rates have a more significant impact on the Company's performance than the effects of general levels of inflation. Interest rates do not necessarily move in same direction or in the same magnitude as the prices of goods and services. FORWARD LOOKING STATEMENTS This report contains certain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties including changes in economic conditions in the Company's market area, changes in policies by regulatory agencies, fluctuations in interest rates, loan demand in the Company's market area, and competition 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 reflect management's analysis only as the date made. The Company does not undertake any obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of such statements. 11 HIGH COUNTRY BANCORP, INC. CONTROLS AND PROCEDURES Item 3. Controls and Procedures Within 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information required to be included in the Company's periodic SEC reports. In addition, there have been no significant changes in the Company's internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation. 12 HIGH COUNTRY BANCORP, INC. PART II - OTHER INFORMATION ITEM 1: Legal Proceedings None ITEM 2: Changes in Securities and Use of Proceeds None ITEM 3: Defaults Upon Senior Securities Not Applicable ITEM 4: Submission of Matters to a Vote of Security Holders. The Company held its annual meeting on October 29, 2002 in Salida, Colorado. At the meeting, Larry D. Smith and Richard A. Young were reelected to three-year terms. The voting results were as follows: Votes For Withheld Number Percent Number Percent -------------------------------------- Larry D. Smith 799,122 99.99% 40 0.01% Richard A. Young 799,097 99.99% 65 0.01% There were 72,449 broker non-votes. ITEM 5: Other Information None ITEM 6: Exhibits and Reports on Form 8-K (a) Exhibits The following exhibit is filed herewith: Exhibit Number Title -------- ----- 99 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (b) Reports on Form 8-K None 13 SIGNATURES Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. High Country Bancorp, Inc. Registrant Date February 6, 2003 /s/ Larry D. Smith ------------------------------------- Larry D. Smith President and Chief Executive Officer (Duly Authorized Officer) Date February 6, 2003 /s/ Frank L. DeLay ------------------------------------- Frank L. DeLay Chief Financial Officer (Principal Financial Officer) 14 CERTIFICATION I, Larry D. Smith, President and Chief Executive Officer of High Country Bancorp, Inc., certify that: 1. I have reviewed this quarterly report on Form 10-QSB of High Country Bancorp, Inc.; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: February 6, 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 quarterly report on Form 10-QSB of High Country Bancorp, Inc.; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: February 6, 2003 /s/ Frank L. DeLay ------------------------------------- Frank L. DeLay Chief Financial Officer EX-99 3 ex99fm10q123102-1872.txt EXHIBIT 99 TO FORM 10-QSB 12-31-02 CERTIFICATION PURSUANT TO 18. U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned executive officers of the Registrant hereby certify that this Quarterly Report on Form 10-QSB for the quarter ended December 31, 2002 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. By: /s/ Larry D. Smith -------------------------------------------- Name: Larry D. Smith Title: President and Chief Executive Officer By: /s/ Frank L. DeLay -------------------------------------------- Name: Frank L. DeLay Title: Chief Financial Officer Date: February 6, 2003 -----END PRIVACY-ENHANCED MESSAGE-----