Page 1

Follow-on Offering Presentation

NASDAQ Symbol: FSNM

December 2006

Exhibit 99.1

Page 2

Forward Looking Statements

Certain statements in our presentation are forward-looking statements, within the

meaning

of

Section

27A

of

the

Securities

Act

of

1933

and

Section

21E

of

the

Securities

Exchange

Act

of

1934

(the

“Exchange

Act”).

The

discussions

regarding

our

growth

strategy, projections, annualized data, competition, loan and deposit growth, timing of

new branch openings, expansion opportunities, and response to consolidation in the

banking industry include forward-looking statements.  Other forward-looking statements

can

be

identified

by

the

use

of

forward-looking

words

such

as

“believe,”

“expect,”

“may,”

“will,”

“should,”

“seek,”

“approximately,”

“intend,”

“plan,”

“estimate,”

or “anticipate,”

or the

negative of those words or other comparable terminology.  Forward-looking statements

involve

inherent

risks

and

uncertainties.

A

number

of

important

factors

could

cause

actual

results

to

differ

materially

from

those

in

the

forward-looking

statement.

Some

factors include changes in interest rates, local business conditions, government

regulations,

loss

of

key

personnel

or

inability

to

hire

suitable

personnel,

the

successful

consummation of the Front Range Capital Corporation transaction and the integration of

Front

Range

into

our

business,

faster

or

slower

than

anticipated

growth,

economic

conditions,

our

competitors’

responses

to

our

marketing

strategy

or

new

competitive

conditions,

and

competition

in

the

geographic

and

business

areas

in

which

we

conduct

our operations.

Page 3

Transaction Summary

Issuer:

First State Bancorporation

NASDAQ Symbol:

FSNM

Shares

Offered:

2,750,000

(1)

primary

shares

Over-allotment Option:

412,500 shares (15%)

Pro

Forma

Shares:

20,353,663

(2)

Price:

$25.72 (as of November 24, 2006)

Transaction

Size:

$70.7

(1)

million

(assuming

$25.72

issue

price)

Use

of

Proceeds:

Fund

a

portion

of

the

purchase

price

for

the

pending

acquisition

of

Front Range Capital Corporation

Pricing:

Week of December 4, 2006

Lead Manager & Book Runner:

Keefe, Bruyette & Woods, Inc.

Co-managers:

Raymond James & Associates, Inc.

FTN Midwest Securities Corp

Sterne, Agee & Leach, Inc.

(1)  Does not include 412,500 shares subject to the underwriters' over-allotment option

(2)

Excludes

1,413,396

shares

issuable

upon

exercise

of

outstanding

employee

stock

options

(as of 9/30/06)

Page 4

First State Bancorporation: Corporate Highlights

The

largest

independent

bank

holding

company

headquartered

in

New

Mexico

with

$3.2

(1)

billion in pro forma total assets

Effectively competes against larger, super-regional institutions by offering personalized

service

First State’s track record in pursuing this strategy has resulted in strong compounded

annual growth rates (for the 10 years ended September 30, 2006):

Assets -

24.2%

Loans -

23.8%

Deposits -

23.3%

EPS -

16.5%

(1) Estimated at September 30, 2006

Page 5

First State Bancorporation: Stand Alone Franchise

49 branch offices:

39 in New Mexico,

7 in Colorado,

2 in Utah, and

1 in Arizona

Products & Services:

Cash Management

Internet Banking

ATM Network 63 Locations

Mortgage Division

Credit & Debit Cards

TEXAS

KANSAS

NEBRASKA

COLORADO

NEVADA

ARIZONA

UTAH

NEW MEXICO

Las Cruces

Fort Collins

DENVER

Colorado Springs

Albuquerque

SALT LAKE CITY

PHOENIX

Glendale

Tucson

Tempe

El Paso

SANTA FE

Page 6

First State Bancorporation: Experienced Management Team

Other Senior Officers

<1%

4,417

9

1997

EVP, Secretary & Corporate

Counsel

Marshall G. Martin (67)

8.37%

1,502,867

All executive officers and

directors of the company as a

group (12 persons)

24

1989

SVP, Branch Administration &

Retail Services

James E. Warden (48)

26

1992

Regional President, Colorado &

Utah

Ron R. Sanchez (45)

33,520

243,335

365,799

185,456

Shares                  Shares

Owned

21

24

4

26

29

18

Years of

Banking

Experience

2005

Regional President, Southern New

Mexico & Arizona

Jed Fanning (45)

1994

Regional President, New Mexico

Paul D. DiPaola

(46)

1.03%

1988

Chairman of the Board

Leonard J. DeLayo, Jr. (57)

2.04%

1988

President, CEO & Director

Michael R. Stanford (53)

1.36%

1988

EVP, COO, Treasurer & Director

H. Patrick Dee (51)

<1%

2003

SVP, CFO and Chief Accounting

Officer

Christopher C. Spencer (48)

Percent of

Outs.

Joined FSNM

Title

Name (age)

Page 7

First State Bancorporation: Business Strategy

Provide a broad range of lending and depository services including commercial, real estate and

consumer loans

Focus on small and medium-sized businesses, professionals and individuals located in its markets

Offer services typically found in larger financial institutions while retaining community banking identity 

Employ successful strategy in other Southwest markets, namely Phoenix, Arizona

Build a diversified, customer-focused financial institution through successful high growth strategy

•

Retaining

customers

by

using

“personal

touch”

approach

to

banking

•

Expanding into larger Colorado and Arizona markets introduces First State to new customer base

•

Maintaining

local

bank

feel

in

the

face

of

local

acquisitions

by

out

of

state

institutions

Page 8

First State Bancorporation: Business Strategy

Page 9

First State Bancorporation: Market Demographics

Source: SNL Financial

Projected

Projected

Total

Population

Population

Median

HH Income

HH Income

Total

Population

Change

Change

HH Income

Change

Change

Deposits

2006

2000-2006

2006-2011

2006

2000-2006

2006-2011

In Market

MSA / State

(Actual)

(%)

(%)

($)

(%)

(%)

($ millions)

Albuquerque, NM

812,914

11.41

9.22

47,516

22.30

17.94

9,066

Boulder, CO

286,159

6.07

3.18

67,986

22.64

19.35

5,317

Denver-Aurora, CO

2,440,828

12.00

9.24

63,895

24.15

21.17

18,643

Phoenix-Mesa-Scottsdale, AZ

3,996,109

22.89

18.61

56,481

26.16

21.52

56,060

Salt Lake City, UT

1,054,767

8.87

6.85

61,047

25.31

20.86

16,248

Weighted Average (Total Market Deposits):

16.96

13.55

58,307

25.16

20.94

Arizona

6,135,872

19.59

16.09

51,310

26.44

21.27

78,868

Colorado

4,821,136

12.09

9.08

58,522

23.82

18.03

74,023

Utah

2,551,534

14.26

12.43

56,398

23.38

18.39

37,342

New Mexico

1,956,417

7.55

6.07

41,539

21.56

16.62

20,930

Weighted Average (Total Market Deposits):

14.82

11.99

53,769

24.50

19.16

Aggregate National:

303,582,361

7.87

6.66

51,546

22.25

17.77

Page 10

$14,851

$21,398

$8,142

$9,958

$15,225

$0

$5,000

$10,000

$15,000

$20,000

$25,000

2001

2002

2003

2004

2005

$1,195,875

$2,092,996

$1,510,007

$685,022

$1,079,684

$1,401,303

$100,000

$600,000

$1,100,000

$1,600,000

$2,100,000

$2,600,000

2001

2002

2003

2004

2005

Q3-'06

$1,231,485

$1,991,359

$1,377,795

$1,017,025

$548,722

$1,525,927

$200,000

$500,000

$800,000

$1,100,000

$1,400,000

$1,700,000

$2,000,000

$2,300,000

2001

2002

2003

2004

2005

Q3-'06

First State Bancorporation: Growth Trends Since 2001

$1,646,739

$2,659,483

$2,157,571

$827,921

$1,386,870

$1,815,510

$100,000

$600,000

$1,100,000

$1,600,000

$2,100,000

$2,600,000

$3,100,000

2001

2002

2003

2004

2005

Q3-'06

Total Assets

Total Loans

Total Deposits

Net Income

CAGR –

Compounded Annual Growth Rate

($ in thousands)

Page 11

$0.17

$0.20

$0.22

$0.24

$0.28

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

2001

2002

2003

2004

2005

$0.81

$0.83

$0.98

$0.99

$1.36

-$0.10

$0.10

$0.30

$0.50

$0.70

$0.90

$1.10

$1.30

$1.50

2001

2002

2003

2004

2005

First State Bancorporation: Growth Trends Since 2001

EPS (5 year)

Dividend (5 year)

CAGR –

Compounded Annual Growth Rate

Page 12

First State Bancorporation: Proven Acquiror and Integrator

Source: SNL Financial and FactSet Research Systems

Announced

Target's

Deal

Total

Announce

Completion

Value

Assets

Date

Target

State

Type

Date

($M)

($000)

Branches

10/04/2006

Front Range Capital Corporation

CO

Bank

Pending

72.0

451,258

13

09/02/2005

New Mexico Financial Corporation

NM

Bank

01/10/2006

20.0

115,728

9

08/31/2005

Access Anytime Bancorp, Inc.

NM

Thrift

01/03/2006

32.0

374,328

10

05/22/2002

First Community Industrial Bank

CO

Bank

10/02/2002

67.0

418,988

9

03/16/1993

First State Bank of Santa Fe

NM

Bank

12/01/1993

NA

24,702

2

Page 13

Overview of Front Range Capital Corporation and Heritage Bank

Front Range Capital Corporation is a bank holding company headquartered in Broomfield,

Colorado with approximately $450 million in assets.

Heritage Bank is Front Range Capital Corporation’s commercial banking subsidiary.

•

13 branches in highly attractive markets:

–

Boulder County:

8 branches

–

Broomfield County:

1 branch

–

Denver County:

2 branches

–

Weld County:

2 branches

High-touch community banking strategy with a focus on small businesses.

Front Range acquisition eliminates need for future M&A activities in Colorado

Denver-Boulder-Longmont markets will provide a platform for continued organic growth

Page 14

Transaction Summary

Transaction:

Acquisition of Front Range Capital Corporation, holding

company for Heritage Bank

Transaction Value:

$72 million

Financing Plan:

Issuance of a combination of common equity and Trust

Preferred Securities

Cost Savings:

29% cost savings assumed

(1)

Required Approvals:

Federal Reserve, New Mexico & Colorado state regulatory

agencies

Expected Closing:

First Quarter 2007

(1) Net of additional expenses

Page 15

ARAPAHOE

ELBERT

MORGAN

LARIMER

EAGLE

SUMMIT

JEFFERSON

CLEAR CREEK

DENVER

EL PASO

TELLER

PARK

DOUGLAS

CHAFFEE

BOULDER

LAKE

ADAMS

GILPIN

GRAND

JACKSON

WELD

Fort Collins

Colorado Springs

Denver

Longmont

Erie

Lafayette

Louisville

Firestone

Broomfield

Boulder

Longmont

Transaction Rationale: Geographic Footprint

Branch deposit data as of March 31, 2006; source: Front Range Capital Corporation

Deposits

Branches

($000s)

5720 W 120th Ave

$54,724

Broomfield, CO 80020

811 S Public Rd

$57,323

Lafayette, CO 80026

1543 Wazee St

$36,696

Denver, CO 80202

1020 Century Dr

$40,252

Louisville, CO 80027

2775 Pearl St

$36,451

Boulder, CO 80302

2100 N.Main St

$27,429

Longmont, CO 80501

Leon Wurl Parkway

$24,295

Erie, CO 80516

1900 9th St

$24,744

Boulder, CO 80302

2695 N Park Dr Ste 101

$17,664

Lafayette, CO 80026

801 Main St Ste 130

$17,151

Louisville, CO 80027

25 E.Ken Pratt Blvd

$13,311

Longmont, CO 80501

3850 York St

$5,562

Denver, CO 80205

8080 Weld County Road 12

$6,007

Firestone, CO 80504

FSNM

FRCC

Page 16

Transaction Rationale

Accelerates FSNM’s franchise expansion in Colorado.

•

Heritage Bank’s footprint represents what FSNM had planned to establish organically in

Colorado over the next few years

•

Potential for increased FSNM earnings as budgeted expansion expenses are avoided

•

Eliminates need for future M&A activities in Colorado

•

Allows management to also focus on new markets, namely Arizona

Provides a platform for continued growth.

•

Positions FSNM to continue its EPS growth trajectory

•

Breakeven/accretive to 2007 GAAP and cash EPS and accretive to 2008 GAAP and cash EPS

•

Potential synergies beyond traditional cost savings

–

Opportunity to provide Heritage Bank’s customers with FSNM’s broader array of commercial products

–

Opportunity to improve Heritage Bank’s earnings by liquidating OREO property and restructuring the

balance sheet

•

EPS accretion accelerating as cost savings and potential synergies are fully implemented and

the franchise realizes its true earnings potential

Page 17

Transaction Rationale: County Deposit Market Share

(1) Source: SNL Financial; data as of June 30, 2006 and pro forma for pending and recently completed acquisitions

COUNTY: Denver, CO

Total

Total

Deposits

Market

Branch

in Market

Share

Rank

Institution

Count

($000)

(%)

1

Wells Fargo & Co. (CA)

17

4,296,078

23.04

2

U.S. Bancorp (MN)

21

3,143,321

16.86

3

KeyCorp (OH)

9

1,640,516

8.80

4

United Western Bancorp, Inc. (CO)

1

1,395,633

7.49

5

JPMorgan Chase & Co. (NY)

8

1,244,476

6.68

6

Wachovia Corp. (NC)

5

765,488

4.11

7

FirstBank Holding Company (CO)

14

689,842

3.70

8

Zions Bancorp. (UT)

5

678,855

3.64

9

CoBiz Inc. (CO)

3

617,468

3.31

10

Centennial Bank Holdings Inc. (CO)

3

571,912

3.07

19

Pro Forma Company

3

109,784

0.58

27

First State Bancorp. (NM)

1

56,797

0.30

28

Front Range Capital Corp. (CO)

2

52,987

0.28

Top 10

86

15,043,589

80.70

Totals (1-39)

178

18,643,448

100.00

COUNTY: Boulder, CO

Total

Total

Deposits

Market

Branch

in Market

Share

Rank

Institution

Count

($000)

(%)

1

Wells Fargo & Co. (CA)

10

840,084

15.80

2

JPMorgan Chase & Co. (NY)

11

702,654

13.22

3

FirstBank Holding Company (CO)

11

677,380

12.74

4

Wachovia Corp. (NC)

4

536,080

10.08

5

Big Sandy Holding Co (CO)

4

417,218

7.85

6

First National of Nebraska (NE)

4

347,649

6.54

7

Centennial Bank Holdings Inc. (CO)

7

334,043

6.28

8

Pro Forma Company

9

254,040

4.78

8

U.S. Bancorp (MN)

7

240,390

4.52

9

Front Range Capital Corp. (CO)

8

236,097

4.44

10

BNP Paribas Group

10

200,538

3.77

24

First State Bancorp. (NM)

1

17,943

0.34

Top 10

76

4,532,133

85.24

Totals (1-29)

110

5,316,642

100.00

Page 18

Transaction Rationale: State & MSA Deposit Market Share

(1) Source: SNL Financial; data as of June 30, 2006 and pro forma for pending and recently completed acquisitions

STATE: New Mexico

Total

Total

Deposits

Market

Branch

in Market

Share

Rank

Institution

Count

($000)

(%)

1

Wells Fargo & Co. (CA)

99

4,528,867

21.64

2

Bank of America Corp. (NC)

53

3,282,641

15.68

3

First State Bancorp. (NM)

39

1,763,906

8.43

4

BOK Financial Corp. (OK)

20

1,069,459

5.11

5

Trinity Capital Corp. (NM)

5

1,048,475

5.01

6

BNP Paribas Group

26

718,556

3.43

7

Charter Companies Inc. (NM)

6

610,364

2.92

8

NM Banquest

Corp. (NM)

10

453,572

2.17

9

Heartland Financial USA Inc. (IA)

15

429,967

2.05

10

Citizens Bankshares

Inc. (NM)

6

416,732

1.99

Top 10

279

14,322,539

68.43

Totals (1-61)

498

20,930,166

100.00

MSA: Albuquerque, NM

Total

Total

Deposits

Market

Branch

in Market

Share

Rank

Institution

Count

($000)

(%)

1

Wells Fargo & Co. (CA)

38

2,254,095

24.86

2

Bank of America Corp. (NC)

26

2,242,425

24.73

3

First State Bancorp. (NM)

24

1,224,109

13.50

4

BOK Financial Corp. (OK)

19

1,060,209

11.69

5

BNP Paribas Group

21

616,753

6.80

6

Charter Companies Inc. (NM)

4

532,215

5.87

7

Compass Bancshares Inc. (AL)

11

372,542

4.11

8

Heartland Financial USA Inc. (IA)

8

274,314

3.03

9

Bethlehem Financial Corp (NM)

5

107,842

1.19

10

High Desert State Bank (NM)

2

74,991

0.83

Top 10

158

8,759,495

96.61

Totals (1-21)

169

9,065,880

100.00

MSA: Phoenix-Mesa-Scottsdale, AZ

Total

Total

Deposits

Market

Branch

in Market

Share

Rank

Institution

Count

($000)

(%)

1

JPMorgan

Chase & Co. (NY)

146

14,291,094

25.49

2

Bank of America Corp. (NC)

121

11,565,451

20.63

3

Wells Fargo & Co. (CA)

164

10,624,292

18.95

4

Marshall & Ilsley

Corp. (WI)

35

2,269,571

4.05

5

Compass Bancshares Inc. (AL)

46

1,922,131

3.43

6

Wachovia Corp. (NC)

10

1,915,152

3.42

7

Zions

Bancorp. (UT)

22

1,612,065

2.88

8

First NB Holding Company (AZ)

11

1,540,899

2.75

9

Marquette Financial Companies (MN)

9

1,409,100

2.51

10

Ohio Savings Financial Corp. (OH)

6

1,201,122

2.14

40

First State Bancorp. (NM)

1

86,114

0.15

Top 10

570

48,350,877

86.25

Totals (1-57)

812

56,060,274

100.00

Page 19

Overview of Heritage Bank: Asset Quality

Source: SNL Financial and Front Range Capital Corporation

(1) Pro forma adjustments assume an increase in Heritage Bank’s reserves of $1.3 million and the sale of Heritage Place representing a reduction in OREO of $5.6 million

Heritage Bank owns a property called Heritage Place (originally intended to sell to real estate

developers)

•

6.7 acres of the property is categorized as other real estate owned (“OREO”) and has a book value of

approximately $5.6 million.

•

1.5 acres of the property are categorized as premises and equipment and has a book value of approximately

$1.3 million.

•

Heritage

Place

is

subject

to

a

sale

contract

at

current

carrying

value

(expected

to

close

in

2007

Q2)

•

Pro forma asset quality ratios for FSNM:

FSNM

Heritage Bank

September 30, 2006

September 30, 2006

Pro Forma

(1)

Reserves / Loans HFI

1.16%

0.89%

1.17%

NPAs / Loans & OREO

0.95%

3.19%

1.04%

Page 20

First State Bancorporation: Asset Quality

NCOs / Avg. Loans (%)

NPAs

/ Loans + OREOs

(%)

Reserves / Loans HFI

0.29%

0.12%

0.26%

0.16%

0.30%

0.12%

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%

0.35%

2001

2002

2003

2004

2005

YTD 9/30/06

1.14%

0.95%

0.49%

0.50%

1.17%

0.67%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

2001

2002

2003

2004

2005

Q3-'06

1.15%

1.16%

1.16%

1.35%

1.19%

1.13%

1.00%

1.05%

1.10%

1.15%

1.20%

1.25%

1.30%

1.35%

1.40%

2001

2002

2003

2004

2005

Q3-'06

Page 21

Pro Forma Financial Impact: GAAP and Cash EPS Impact

(1) Based on current 2007 consensus EPS estimate and 15.0% growth thereafter

(2) Estimated earnings as per FSNM management; Includes cost savings and certain other adjustments

(3) Excludes approximately ($0.5) million (after-tax) in nonrecurring integration expenses in 2007

Dollars in millions

2007

2008

FSNM EPS

(1)

1.69

$      

1.94

$      

FSNM Earnings

30.3

$      

34.9

$      

FRCC Earnings

(2)

6.2

7.3

Combined Earnings

36.5

42.1

Financing Adjustments

(0.4)

(0.4)

Core Deposit Amortization

(0.8)

(0.8)

Pro Forma Earnings

(3)

35.3

$      

40.9

$      

GAAP EPS Accretion / (Dilution)

0.3%

1.1%

Cash EPS Accretion / (Dilution)

2.2%

2.7%

Page 22

Pro Forma Financial Impact: Cost Savings and Other Adjustments

Dollars in millions

2007 Estimated Noninterest Expense Base

17.6

$          

Reduction in Noninterest Expense Base

(6.5)

$           

Increase in Noninterest Expense Base

Salaries & Benefits

0.5

Occupancy

0.1

Data Processing

0.5

Other Expenses

0.2

Total Increase in Noninterest Expense Base

1.4

$            

Total Adjustments (Pre-tax)

(5.2)

$           

Adjustments as % of Noninterest Expense Base

29%

Page 23

Pro Forma Financial Impact: Loan Portfolio

Residential

R.E.

11.3%

Commercial

R.E.

35.2%

Construction

35.5%

Commercial

14.0%

Consumer &

Other

4.0%

Consumer,

Leases &

Other

5.1%

Commercial

9.0%

Construction

31.0%

Residential

R.E.

13.1%

Commercial

R.E.

41.8%

FSNM

Heritage Bank

Pro Forma

Source:

FSNM data per 9/30/2006 10-Q

Heritage data per 9/30/2006 regulatory filings

Loan Portfolio ($000)

Residential R.E.

224,773

$         

11.3%

Commercial R.E.

701,479

35.2%

Construction

706,956

35.5%

Commercial

278,569

14.0%

Consumer & Other

79,582

4.0%

Gross Loans

1,991,359

$      

100.0%

Loan Portfolio ($000)

Residential R.E.

43,016

$           

13.1%

Commercial R.E.

137,161

41.8%

Construction

101,786

31.0%

Commercial

29,685

9.0%

Consumer, Leases & Other

16,691

5.1%

Gross Loans & Leases

328,339

$         

100.0%

Pro Forma - Loan Portfolio ($000)

Residential R.E.

267,789

$         

11.5%

Commercial R.E.

838,640

36.2%

Construction

808,742

34.9%

Commercial

308,254

13.3%

Consumer, Leases & Other

96,273

4.2%

Gross Loans & Leases

2,319,698

$      

100.0%

Consumer,

Leases &

Other

4.2%

Commercial

13.3%

Construction

34.9%

Residential

R.E.

11.5%

Commercial

R.E.

36.2%

Page 24

Pro Forma Financial Impact: Deposit Portfolio

FSNM

Heritage Bank

Pro Forma

Retail CDs

18.3%

MMDA &

Savings

17.6%

Interest-

bearing

demand

14.6%

Non-interest-

bearing

21.9%

Jumbo CDs

27.6%

Jumbo CDs

23.5%

Non-interest-

bearing

14.9%

Interest-

bearing

demand

11.5%

MMDA &

Savings

30.7%

Retail CDs

19.3%

Jumbo CDs

26.9%

Non-interest-

bearing

20.9%

Interest-

bearing

demand

14.1%

MMDA &

Savings

19.6%

Retail CDs

18.5%

Source:

FSNM data per 9/30/2006 10-Q

Heritage data per 9/30/2006 regulatory filings

Deposit Portfolio ($000)

Non-interest-bearing

458,402

$        

21.9%

Interest-bearing demand

306,011

14.6%

MMDA & Savings

368,071

17.6%

Retail CDs

383,844

18.3%

Jumbo CDs

576,668

27.6%

Total Deposits

2,092,996

$     

100.0%

Deposit Portfolio ($000)

Non-interest-bearing

55,606

$          

14.9%

Interest-bearing demand

42,792

11.5%

MMDA & Savings

114,384

30.7%

Retail CDs

71,927

19.3%

Jumbo CDs

87,508

23.5%

Total Deposits

372,217

$        

100.0%

Pro Forma - Deposit Portfolio ($000)

Non-interest-bearing

514,008

$        

20.9%

Interest-bearing demand

348,803

14.1%

MMDA & Savings

482,455

19.6%

Retail CDs

455,771

18.5%

Jumbo CDs

664,176

26.9%

Total Deposits

2,465,213

$     

100.0%

Page 25

Pro Forma Financial Impact: Balance Sheet Summary

Dollars in millions

(1) Includes all transaction adjustments; assumes 12.0% and 10.0% overall balance sheet growth for FSNM and FRCC, respectively

Estimated

9/30/2006

9/30/2006

3/31/2007

FSNM

FRCC

Pro Forma

(1)

Assets

2,659.5

$      

449.8

$         

3,308.1

$      

Loans

1,991.4

328.3

2,455.6

Intangible Assets

74.7

0.1

133.2

Deposits

2,093.0

372.2

2,609.4

Trust Preferred Securities

55.5

9.2

74.7

Common Equity / Assets:

8.48%

4.06%

9.19%

Tg. Common Equity / Tg. Assets:

5.83%

4.03%

5.38%

Leverage Ratio:

8.28%

5.79%

8.03%

Tier I Risk Based Ratio:

9.43%

6.89%

9.03%

Total Risk Based Ratio:

10.45%

9.24%

10.07%

Book Value / Share

12.81

$         

9.63

$           

14.82

$         

Tangible Book Value / Share

8.57

$           

9.57

$           

8.32

$           

Page 26

First State Bancorporation: Net Interest Margin

Net Interest Margin (Annual)

Net Interest Margin (Quarterly)

4.59%

4.93%

4.64%

4.93%

4.50%

4.47%

4.20%

4.30%

4.40%

4.50%

4.60%

4.70%

4.80%

4.90%

5.00%

2001

2002

2003

2004

2005

YTD 9/30/06

4.64%

4.94%

5.00%

4.60%

4.69%

4.85%

4.40%

4.50%

4.60%

4.70%

4.80%

4.90%

5.00%

5.10%

Q2-05

Q3-05

Q4-05

Q1-06

Q2-06

Q3-06

Page 27

First State Bancorporation: Peer Group Review

Source: SNL Financial and FactSet Research Systems

Data as of quarter ended September 30, 2006

EOP

Market Performance & Valuation

Price /

Stock

Price /

Tang.

2006

(2)

2007

(2)

Div.

Market

Assets

Price ($)

Book

Book

P/E

P/E

Yield

Cap

Institution

Symbol

City

State

($Mil)

11/24/06

(X)

(X)

(X)

(X)

(%)

($MM)

First State Bancorporation

FSNM

Albuquerque

NM

2,659

25.72

2.01

3.00

19.3

15.2

1.2

453

First State Bancorporation (Pro Forma) (1)

3,308

25.72

1.74

3.09

19.3

15.4

1.2

527

Sterling Bancshares, Inc.

SBIB

Houston

TX

4,136

18.35

2.26

3.61

18.4

16.4

1.5

877

Western Alliance Bancorporation

WAL

Las Vegas

NV

4,003

36.98

2.54

4.05

24.3

20.9

0.0

998

BancFirst Corporation

BANF

Oklahoma City

OK

3,424

52.55

2.47

2.80

17.3

15.9

1.4

827

Centennial Bank Holdings, Inc.

CBHI

Denver

CO

2,887

9.75

0.96

3.58

22.2

19.5

0.0

570

First Financial Bankshares, Inc.

FFIN

Abilene

TX

2,711

41.89

2.96

3.84

19.0

17.5

2.9

868

CoBiz Inc.

COBZ

Denver

CO

2,130

23.11

3.36

4.59

22.4

19.3

1.0

523

Southside Bancshares, Inc.

SBSI

Tyler

TX

1,881

26.33

2.78

2.78

22.7

20.6

1.7

324

Community Bancorp

CBON

Las Vegas

NV

1,657

30.22

1.43

3.64

15.9

13.6

0.0

317

Average:

2.35

3.61

20.3

18.0

1.1

Median:

2.50

3.62

20.6

18.4

1.2

(1) Estimated values at close 3/31/2007

(2) Based on analysts consensus estimates

Assets, capital ratios, share data, book multiples & market cap. pro forma for pending and recently completed acquisitions

Page 28

Conclusion

Over the last ten years:

•

FSNM’s

stock

has

had

an

annualized

total

return

of

20.1%

(1)

•

FSNM’s

EPS

has

increased

by

16.5%

on

an

annualized

basis

(2)

Since the closing of the acquisition of First Community Industrial Bank in 2002:

•

FSNM’s

stock

has

had

an

annualized

total

return

of

21.7%

(1)

•

FSNM’s

EPS

has

increased

by

15.4%

on

an

annualized

basis

(3)

This transaction:

•

Accelerates FSNM’s franchise expansion in Colorado

•

Provides a platform for the continued growth that FSNM shareholders have enjoyed

•

Creates a $3.2 billion franchise

–

A dominant community bank in New Mexico

–

Significant presence in the Front Range region and northern Denver (20 branches in Colorado)

–

Small but growing presence in Phoenix, Arizona and Salt Lake City, Utah

(1) Based on closing stock price of FSNM on November 24, 2006

(2) Based on EPS for the nine months ended September 30, 1996 and September 30, 2006

(3)

Based

on

annualized

EPS

for

the

three

months

ended

March

31,

2003

and

annualized

EPS

for

the

three

months

ended

September

30,

2006

Source: SNL Financial and FactSet Research Systems