UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-K
ANNUAL REPORT
[X] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee required)
For the fiscal year ended December 31, 1996
[ ] Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 (No fee required)
For the transition period from _____ to _____.
Commission file no. 0-19376
ASPEN BANCSHARES, INC.
COLORADO 84-1068527
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534 East Hyman Avenue, Aspen, Colorado 81611
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Registrant's telephone number: (970) 925-6700
--------------
Securities registered pursuant to Section 12(b) of the Act:
None.
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value.
Indicate by check mark whether the Registrant (1) has filed all
reports to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.[ ]
The aggregate market value of the voting stock held by non-affiliates
of the Registrant as of March 12, 1997 was approximately $46,500,604.
The number of shares of Registrant's Common Stock outstanding as of
March 12, 1997 was 3,720,780 shares.
Documents Incorporated by Reference
1.Aspen Bancshares, Inc. Form 8-K filed March 7, 1997: Management's
Discussion and Analysis of Financial Condition and Results of
Operations, Guide 3 Information (Statistical Disclosure by Bank
Holding Companies), and Audited Consolidated Financial Statements as
of December 31, 1996 are incorporated by reference into Parts I and
IV of the Form 10-K.
FORM 10-K CROSS REFERENCE INDEX PAGE
Part I
Item 1. Business...................................................3
Item 2. Properties.................................................8
Item 3. Legal Proceedings..........................................9
Item 4. Submission of Matters to a Vote of Security Holders........9
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters........................................9
Item 6. Selected Financial Data....................................9
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................10
Item 8. Financial Statements and Supplementary Data...............10
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure..................................10
Part III
Item 10. Directors and Executive Officers of the Registrant........10
Item 11. Executive Compensation....................................11
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................16
Item 13. Certain Relationships and Related Transactions............18
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K..................................................19
ASPEN BANCSHARES, INC.
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1996
PART I
ITEM 1. BUSINESS
The Company
Aspen Bancshares, Inc., (the Company) is a bank holding company
whose principal assets are the common stock of Pitkin County Bank and
Trust Co. (Pitkin), a commercial bank organized in 1979, the common
stock of Centennial Savings Bank, F.S.B. (Centennial), a thrift
originally created in 1905 and acquired by the Company in October,
1993, and the common stock of Val Cor Bancorporation, Inc., (Val Cor)
a bank holding company formed in December, 1982, which the Company
acquired in June, 1996. Val Cor owns 99.1% of the common stock of
Valley National Bank of Cortez, Colorado (Valley), a national banking
association organized in 1979. At December 31, 1996, the Company had
total assets of $450.6 million, total deposits of $398.9 million and
total shareholders' equity of $31.1 million. This represents
significant growth over the year ended December 31, 1990, when the
Company's total assets were $80.8 million, total deposits were $72.9
million, and total shareholders' equity was $6.6 million. This growth
has resulted from growth in western Colorado, and greatly through the
acquisition of Centennial, which more than doubled the Company's size,
and the acquisition of Val Cor. The Company was incorporated under
Colorado law on July 24, 1987 and became a registered bank holding
company through the ownership of Pitkin on June 30, 1988. The
Company's principal office is located at 534 East Hyman Avenue, Post
Office Box 3677, Aspen, Colorado 81612, and its phone number is (970)
925-6700. The Company's subsidiaries are described below.
Pitkin, with its main branch in Pitkin County, Colorado, offers
traditional banking services designed to serve the permanent community
in its primary service area. A bank's primary service area is the
geographic location from where it expects to originate a large
majority of its deposits. Pitkin's primary service area is Aspen,
Snowmass and surrounding communities. Pitkin also has a full-service
branch located in El Jebel, Colorado, in Eagle County and a branch in
Telluride, Colorado in San Miguel County. Pitkin offers special
services intended to meet the needs of large deposit customers who are
not year-round residents. To attract these large depositors, Pitkin
established a concierge service (Club 534) for customers maintaining a
$50,000 minimum deposit balance. Club 534 provides highly personalized
services such as making restaurant and hotel reservations,
recommending catering services, hosting varied seasonal parties, and
arranging house cleaning and home maintenance.
Pitkin was chartered as a Colorado state bank in 1979. Its
primary office is at 534 E. Hyman Ave., Aspen, Colorado., 81611. The
phone number at that office is (970) 925-6700. During the past five
years, the total assets of Pitkin have grown from approximately $100.1
million at December 31, 1991 to $163.3 million at December 31, 1996.
At December 31, 1996, Pitkin had total deposits of $152.0 million and
shareholders' equity of $10.8 million.
On October 6, 1993, the Company acquired all of Centennial's
outstanding common stock. As a result of its acquisition of
Centennial, the Company became a savings and loan holding company
pursuant to the Home Owners' Loan Act of 1933, as amended, as well as
remaining a bank holding company by reason of its ownership of
Pitkin. Centennial is the largest thrift institution and the second
largest financial institution headquartered in Western Colorado.
Centennial's primary market area is defined as the Counties of La
Plata, Montezuma, Archuleta, Montrose and Mesa, Colorado and San Juan
County, New Mexico. Centennial was originally chartered by the State
of Colorado in 1905 under the name ``Durango Savings and Building
Association''. In February, 1984 Centennial converted from a Colorado
chartered savings and loan association to a federally chartered
savings and loan association, and on June 11, 1984, Centennial
converted to a capital stock savings bank. Centennial's primary
business is the solicitation of savings accounts from its depositors
and the general public and the promotion of home ownership through the
granting of mortgage loans primarily to finance the purchase,
construction or improvement of residential real estate located within
the State of Colorado and San Juan County, New Mexico. Centennial
also invests in federal government and agency obligations and other
investment securities. At December 31, 1996, Centennial had total
assets of $206.1 million, total deposits of $178.6 million, and
shareholders' equity of $14.0 million.
Centennial's main office is located at 1101 East Second Avenue,
Durango, Colorado. The phone number at that office is (970) 247-4183.
Centennial also conducts its business through its six branch offices
located in Cortez, Pagosa Springs, Dolores, Montrose, and Grand
Junction, Colorado and Farmington, New Mexico.
On June 18, 1996, the Company acquired Val Cor. The total
purchase price was approximately $10.3 million including acquisition
expenses. Pursuant to the Third Amended Acquisition Agreement and
Plan of Merger dated January 12, 1996, Val Cor's stockholders received
from the Company $32.653 in cash for each share of Val Cor common
stock owned by them. The Company funded the acquisition through a
combination of bank debt of $6.5 million and cash on hand.
As a result of the acquisition, Val Cor's assets and liabilities
were adjusted on June 18, 1996, to reflect their fair values in
conformity with the procedures specified by Accounting Principles
Board Opinion No. 16, Business Combinations, for transactions reported
on the basis of the purchase method. This resulted in a net increase
in stockholders' equity as of June 18, 1996 of approximately $4.2
million. The results of Val Cor have only been included in the
financial statements since the acquisition date.
At December 31, 1996, Val Cor had total assets of $80.2 million,
total deposits of $68.8 million, and shareholders' equity of $11.2
million. Valley's and Val Cor's main office is located at 350 West
Montezuma Avenue, Cortez, Colorado. The phone number at that office
is (970) 565-4411. Valley also conducts business through branch
locations in Cortez and Dolores, Colorado. Valley offers traditional
banking services to customers in its primary market area of Montezuma
County, Colorado.
On March 28, 1996 a Registration Statement on Form S-3 filed
under the Securities Act of 1933 became effective with respect to
Common Stock being issued upon conversion of the Company's Cumulative
Convertible Preferred Stock (the Preferred Stock) and pursuant to
warrants originally issued to the underwriters of the Company's public
offering in July, 1991. All shares of the Preferred Stock were
converted to Common Stock on April 15, 1996 at the rate of 2.6125
shares of Common Stock for each one share of Preferred Stock,
resulting in the issuance of 642,674 additional shares of Common
Stock. Pursuant to the warrants, 93,750 shares of Common Stock were
issued on June 28, 1996. The following table presents pro forma
earnings per share of Common Stock at December 31, 1996, assuming
conversion of the Preferred Stock as of January 1, 1996.
Net Income $4,086,000
Net Income per Share $ 1.10
Average Number of Shares Outstanding 3,718,000
Services
The Company offers a full range of financial services to
commercial and individual customers, including a wide variety of
commercial loans, revolving credit facilities, construction lending,
mortgage loans, Small Business Administration loans, checking
accounts, various savings programs, certificates of deposit, debit,
credit and ATM cards, safe deposit and night depository facilities,
walk-in and drive-up teller facilities, electronic banking and banking
by telephone.
Contingencies
At December 31, 1996, Pitkin owned 70.2% of the total capital
stock of Thatcher Financial Group, Inc. (TFG). Pitkin acquired the
stock at sale of the collateral on a loan made by Pitkin. TFG's
primary asset was 100% of the common stock of Thatcher Bank, F.S.B.
(Thatcher Bank). Pitkin also had a loan collateralized by the stock
of Thatcher Bank and an art collection. During 1993, Pitkin sold the
stock of Thatcher Bank and part of the art collection. Proceeds from
the sales were used to satisfy outstanding loan principal, interest
and expenses related to the loans made by Pitkin. Directors of TFG,
certain of whom are parties related to Pitkin, are in the process of
determining outstanding liabilities, including possible federal and
state income taxes payable. After determination and payment of
outstanding liabilities of TFG, TFG directors plan to distribute the
remaining funds, if any, to the shareholders of TFG. There is no
determination as to when this can be accomplished. Pitkin has not
recorded any asset with respect to its ownership of TFG stock. At
December 31, 1996, TFG has assets, primarily cash and investments, of
approximately $1,000,000 (unaudited).
On November 19, 1996, the Company signed an Agreement of Merger
and an Agreement and Plan of Reorganization, as amended on March 11,
1997,(collectively,the Agreement)with Zions Bancorporation (Zions).
The Agreement provides for the merger of the Company into Zions,
whereby Zions will be the surviving corporation. Upon consummation of
the Agreement, each outstanding share of the Company's common stock
will be converted into a right to receive a certain number of shares,
determined by formula, of Zions' common stock. The purchase price is
$73,000,000 plus certain accretions and less certain fees payable.
The Agreement is subject to certain contingencies, including
shareholder approval. All regulatory approvals have been obtained.
The Company granted an option to Zions to purchase up to 19.9% of
the Company's common stock as an inducement of Zions to enter into the
Agreement. Under this option, Zions has the right to purchase up to
739,825 shares of the Company's Common Stock for $18.875 per share.
Zions may exercise the option only upon the occurrence of a triggering
event which has been defined to include actions by the Company's board
of directors that authorize or support the execution of a merger
agreement or offer with another party or recommend the Company's
shareholders not approve the Agreement, a willful material breach by
the Company, or certain actions by a third party relative to their
acquisition of the Company.
On September 17, 1996, Centennial voluntarily entered into a
Supervisory Agreement with the Office of Thrift Supervision (OTS).
The Supervisory Agreement requires Centennial to take actions to
achieve compliance with applicable consumer and public interest
related laws and regulations and related safe and sound business
practices, review its records to determine if disclosures of finance
charges and/or annual percentage rates to its customers were accurate,
establish and maintain accurate and complete records demonstrating its
regulatory compliance with the various consumer laws and regulations
and implement a compliance program relative to consumer and public
interest related laws and requirements. Management and the board of
directors of Centennial have established policies and procedures to
comply with all aspects of the Supervisory Agreement.
Capitalization
The following table sets forth the capitalization of the Company
as of December 31, 1996 and 1995.
December
1996 1995
------ ------
(in thousands)
Shareholders' Equity
Preferred Stock, 7%, $0.01 par value, cumulative
convertible, 5,000,000 shares authorized;
246,000 (1995) shares issued and outstanding $ - $6,150
Common Stock, $0.01 par value, 5,000,000 shares
authorized; 3,717,714 (1996) and 2,979,728
(1995) shares issued and outstanding 37 30
Additional paid in capital 11,632 4,879
Retained earnings 20,260 16,994
Net unrealized depreciation on
available for sale securities (828) (755)
------- -------
Total Shareholders' Equity $31,101 $27,298
======= =======
Lending Activities
See discussion on pages 12-17 in the Company's Form 8-K filed
March 7, 1997, which is incorporated herein by this reference.
Investments
See discussion on pages 11 and 12 in the Company's Form 8-K filed
March 7, 1997, which is incorporated herein by this reference.
Sources of Funds
See discussion on pages 17, 18, 32 and 33 in the Company's Form
8-K filed March 7, 1997, which is incorporated herein by this
reference.
Primary Service Area and Competition
The primary service area in which the Company operates is the
Western Slope region of Colorado. The Company faces strong
competition from other types of financial institutions such as credit
unions, mortgage lenders, consumer financing companies, money market
mutual funds, brokerage companies, and insurance companies. By virtue
of their larger capital bases or affiliation with larger multi-bank
holding companies, some of the institutions with which the Company
competes have substantially greater lending limits than the Company
and perform other functions for their customers which the Company can
offer only through correspondent banks. Interstate banking is
permitted in Colorado on a national basis. State-wide branch banking
has recently been passed into law in Colorado. As a result of
interstate banking and branch banking, the Company may experience
greater competition in its primary service area.
The primary service area in which Pitkin operates is
Aspen/Snowmass and surrounding communities. Tourism is the largest
single industry in the area and the largest source of revenue is from
sales tax collections. Total taxable retail sales for 1996 showed a
6.5% gain over 1995 in Aspen. Snowmass sales totals were up 6.1% over
1995. Aspen is a resort community located near the Colorado ski
resorts of Aspen Mountain, Buttermilk, Snowmass, and Aspen Highlands.
The Aspen Skiing Company manages and operates all four of the ski
areas in the Aspen/Snowmass area consisting of a total of 4,225
skiable acres. Skier days over the last five years have ranged from a
low of 1,302,433 during the 1994-1995 ski season to a high of
1,527,117 during the 1992-1993 ski season. Skier days totaled
1,342,109 during the 1995-1996 ski season. In addition to winter
activity, the community experiences a summer tourism business centered
around outdoor recreation, shopping, dining and special events, the
largest of which is the Aspen Music Festival, and also includes the
International Design Conference, Aspen Food and Wine Classic, Dance
Aspen, and conferences at the Aspen Institute. Ticket sales for the
Aspen Music Festival increased 17.7% from $1,409,573 in 1995 to $1,
658,976 in 1996.
The City of Aspen has a current year-round population of
approximately 5,400, but during the peak winter season local
population can reach approximately 30,000. Snowmass is the community
adjacent to Aspen and the two towns are often referred to in unison as
Aspen/Snowmass. Labor statistics for Pitkin County reflect the
cyclical nature of the economy over the course of a year, with
unemployment rates ranging from a high of 10.7% in May, 1994 to a low
of 1.8% in January, 1994. The average unemployment rate for Pitkin
County during 1995 was 4.8%.
Aspen and Snowmass share an airport serviced by three airlines.
Daily flights arrive year round connecting through Denver
International Airport from most major cities and also arriving direct
from Los Angeles and Dallas.
Both Centennial's main office located in Durango, La Plata
County, and Valley's main office located in Cortez, Montezuma County,
Colorado, are areas which also depend upon tourism. Summer tourism is
centered around Mesa Verde National Park located 40 miles west of
Durango, and the Durango-Silverton Narrow Gauge Railroad, which
carries more than 200,000 passengers each year between Durango and
Silverton, Colorado. Winter tourism centers around the Purgatory-
Durango Ski Area which hosted approximately 383,000 skiers in the
1994-1995 ski season and approximately 307,000 skiers in the 1995-1996
ski season. Durango is also home to Fort Lewis College, a four-year
liberal arts college attended by approximately 4,100 students. Retail
sales in Cortez increased 5.3% from 1995 to 1996. The population in
Cortez is approximately 7,300.
The retail and service industries employ the largest percentage
of employees in La Plata County. La Plata County's largest employer
is Mercy Medical Center, a 105-bed hospital with more than 700 full-
time and part-time employees. The unemployment rate in La Plata County
averages 4.7%. Retail sales in La Plata County increased 53.3% from
$282.5 million in 1990 to $433.2 million in 1994, reflecting strong
local economic growth. La Plata County is serviced by three airlines
during the year with a fourth airline servicing the area on a seasonal
basis.
Grand Junction, another market served by Centennial is a growing
community that has seen an increase in population due to relocation of
people from the West Coast. In Grand Junction, retail sales increased
from $563.8 million in 1994 to $621.1 million in 1995, and the number
of building permits increased from 2,588 in 1994 to 2,724 in 1995.
The unemployment rate in 1995 was 4.91%.
Centennial's branch offices are located in Montezuma, Montrose,
Archuleta and Mesa Counties, Colorado and San Juan County, New Mexico.
Centennial actively competes for savings with other thrift
institutions, commercial banks, credit unions, money market mutual
funds, brokerage companies, and insurance companies located in its
primary market area.
Legislative and regulatory measures have significantly expanded
the range of services which savings associations can offer the public
and have removed all interest rate controls and other regulation of
savings deposits. These changes, and an increasingly sophisticated
savings public, have dramatically increased competition among savings
associations and other types of investment vehicles for savings
dollars have increased competition with commercial banks in regard to
loans, checking accounts and other types of financial services. In
addition, large conglomerates and investment banking firms have
entered the market for financial services. FIRREA has increased the
competition between commercial banks and savings associations by
allowing banks to acquire healthy savings associations, imposing
similar capital requirements on bank and savings associations, and
placing certain investment and other regulatory restrictions on
savings associations which are similar to those imposed on banks.
Thus, Centennial, like other savings associations, will face increased
competition in the future in the attraction of deposits and lending
services.
Regulation
See discussion on pages 8 and 9 in the Company's Form 8-K filed
March 7, 1997, which is incorporated herein by this reference.
Employees
As of December 31, 1996, the Company employed 208 full-time
employees, including 58 officers. The Company provides a variety of
benefits and believes employee relations are good. No employees are
covered by a collective bargaining agreement.
ITEM 2. PROPERTIES
Information about the Company's premises and equipment in Notes
5, 8 and 10 to the Company's 1996 Audited Financial Statements on
pages 32, and 34-36 of the Company's Form 8-K filed March 7, 1997 is
incorporated herein by reference. The Company believes that the
current facilities are adequate to meet its present and immediately
foreseeable needs.
Location Description
Corporate Headquarters
534 East Hyman Avenue Pitkin County Bank and Trust Co.
Aspen, Colorado 81611 Headquarters
127 West Colorado Avenue Branch
Telluride, Colorado 81435 Pitkin County Bank and Trust Co.
19218 Highway 82 Branch
Orchard Plaza, Suite #108 Pitkin County Bank and Trust Co.
El Jebel, Colorado 81628
1101 East Second Avenue Centennial Savings Bank, F.S.B.
Durango, Colorado 81301 Headquarters
343 East Main Street Branch
Cortez, Colorado 81321 Centennial Savings Bank, F.S.B.
8th and Railroad Avenue Branch
Dolores, Colorado 81323 Centennial Savings Bank, F.S.B.
2000 East 20th Street Branch
Farmington, New Mexico 87401 Centennial Savings Bank, F.S.B.
499 28 1/4 Road Branch
Grand Junction, Colorado 81502 Centennial Savings Bank, F.S.B.
1200 South Townsend Branch
Montrose, Colorado 81401 Centennial Savings Bank, F.S.B.
643 San Juan Branch
Pagosa Springs, Colorado 81147 Centennial Savings Bank, F.S.B.
Val Cor Bancorporation, Inc.
350 West Montezuma Avenue Valley National Bank
Cortez, Colorado 81321 Headquarters
500 Railroad Avenue Branch
Dolores, Colorado 81323 Valley National Bank
508 East Main Street Branch
Cortez, Colorado 81323 Valley National Bank
The Company owns 60% of the Corporate Headquarters building and leases
the remaining 40%. Pitkin's Midvalley branch in El Jebel and
Telluride branches are leased. Centennial owns all of its facilities
except the Pagosa Springs branch which is leased. Valley leases its
space in a Cortez supermarket. Lease terms are summarized in the
following table.
Monthly
Location Term Expiration Date Rent
--------------- -------------- ------------------- --------
Corporate Headquarters 30 Years September 30, 2013 $3,366
Telluride Branch 1 Year/Annual Renewal May 31, 1996 $1,705
El Jebel Branch 1 Year/Annual Renewal June 14, 1996 $2,521
Pagosa Springs Branch 30 Years June 30, 2012 $1,400
Cortez-City Market Branch 5 Years February 28, 2001 $2,000
ITEM 3. LEGAL PROCEEDINGS
There are various lawsuits pending against the Company incidental
to the ordinary course of business. Although final results cannot be
predicted with certainty, the Company's management, after review with
legal counsel handling the matters, believes that none of the lawsuits
will have a material adverse effect on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Common Stock has been listed on the National Association of
Securities Dealer Automated Quotation System (NASDAQ ) under the
symbol ASBK since July 2, 1991, when the Company went public. There
were 238 holders of record of the Common Stock on March 12, 1997. The
following lists the high and low sales prices of the Common Stock and
other information for the periods indicated.
Total Total
Quarter Ended High Low Trades Volume
-------------- ----- ------ ------ ----------
March 1993 $ 8.96 $ 6.08 155 152,485
June 1993 8.96 6.72 45 27,936
September 1993 10.56 7.84 121 117,193
December 1993 12.64 10.24 58 40,981
March 1994 12.80 10.08 238 175,722
June 1994 14.08 9.28 493 314,143
September 1994 12.32 9.60 178 165,213
December 1994 11.60 8.60 149 149,431
March 1995 11.80 8.80 65 95,725
June 1995 13.40 11.20 68 32,418
September 1995 14.40 12.70 45 18,645
December 1995 14.88 11.50 40 38,923
March 1996 17.25 15.75 31 19,405
June 1996 16.50 15.00 45 27,105
September 1996 19.75 17.50 211 245,745
December 1996 $ 19.50 $ 18.50 118 174,986
Since January, 1992 the Company has been paying a $.05 per share
dividend every quarter. The Company declared five-for-four common
stock splits effected as dividends on October 3, 1994 and on October
10, 1995. The quarterly cash dividend remained at $.05 per share,
which effectively increased the dividend by 25% for each of those
years. Continued payments of dividends will be at the discretion of
the Board of Directors of the Company and will depend upon the
operating results and financial condition of the Company and its
subsidiaries, their capital requirements, general business conditions
and other factors. In addition, the ability of the Company to pay
dividends will be largely dependent upon the Company's receipt of
dividends from its subsidiaries, the payment and amount of which are
subject to federal and state law and the rules, regulations and
supervisory powers of bank regulatory authorities.
ITEM 6. SELECTED FINANCIAL DATA
The information contained on page 19 in the section captioned
Return on Equity and Assets, which contains selected financial data,
in the Company's Form 8-K filed March 7, 1997, is incorporated herein
by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
See discussion on pages 3-10 in the Company's Form 8-K filed
March 7, 1997, which is incorporated herein by reference.
Accounting Policies
Information about the Company's Accounting Policies is set forth
on page 27 at Note 1 to the Consolidated Financial Statements of the
Company in the Company's Form 8-K filed March 7, 1997, and is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by Item 8 is set forth at pages 22
through 40 of the Company's Form 8-K filed March 7, 1997, and
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company are as
follows:
Director
Age of
(as of Positions with Company
Name December Company Since
31, 1996)
------------------- --------- --------------------- -------
Morton A. Heller 76 Chairman of the Board 1989
President and CEO and
Charles B. Israel 64 Director 1987
J. Thomas Clark, Jr. 47 Director 1987
Carol Ann Kopf 56 Director 1987
Robert R. Oden, M.D. 74 Director 1987
Christopher L. Tolk 44 Director 1996
Thomas W. Griffiths 51 Vice President N/A
Amy G. Beidleman 39 Vice President, CFO N/A
and Secretary
The directors hold office until the next annual meeting of
shareholders, or until their successors are duly elected and
qualified. The officers hold office until their successors are
appointed by the Board of Directors. There are no arrangements or
understandings between any of the above-listed directors or officers
or any other persons, pursuant to which any of the above directors
have been selected as directors, or officers have been selected as
officers.
The business experience of each of the nominees for director and
executive officers during the past five years has been as follows:
Morton A. Heller has been the Chairman of the Board of the
Company and of Pitkin since October 1989, a director of Pitkin since
1981, an executive officer of Pitkin since 1988, and a director of
Centennial since 1993. Prior thereto, since 1985, he was Chairman of
the Advisory Board of Pitkin.
Charles B. Israel has been with Pitkin since 1982, first as
President until 1985, then from 1985 to 1989 as Chairman of the Board,
and, since 1989 to the present, as President. He was Chairman of the
Board of the Company from 1987 to 1989 and became President in 1989.
Mr. Israel became Chairman of Centennial in 1993.
J. Thomas Clark has been a director of Pitkin since 1981 and
director of the Company since 1987. Mr. Clark has owned and operated
a supermarket business in Aspen since 1984 under the name Clark's
Market.
Carol Ann Kopf has been a director of Pitkin since 1980 and
director of the Company since 1987. She is a real estate broker and
has been President of Carol Ann Jacobson Realty in Aspen since 1972.
Robert R. Oden, M.D., has been a director of Pitkin since its
organization in 1979 and director of the Company since 1987. Dr. Oden
has been an orthopedic surgeon practicing in Aspen since 1957.
Christopher L. Tolk, has been a director of Pitkin since 1994.
Mr. Tolk has been Managing Partner of Reese Henry & Co., Inc., a
Certified Public Accounting firm in Aspen, since 1980.
Thomas W. Griffiths has been Executive Vice President of Pitkin
since 1985 and director of Pitkin since 1994. He was Secretary of the
Company from 1987 until April 1992. He has been Vice President of the
Company since April 1992.
Amy G. Beidleman started with Pitkin as the Assistant Comptroller
in 1984. She became an officer of Pitkin in 1985 and Acting Cashier
in 1986. Mrs. Beidleman has been Vice President, Cashier, and
Secretary of Pitkin since 1989 and became Pitkin's Chief Financial
Officer in January 1994. She became Vice President of the Company in
September 1990 and has been Chief Financial Officer and Secretary of
the Company since April 1992.
Filing of SEC Reports
Section 16(a) of the Securities Exchange Act of 1934 requires
executive officers, directors and persons who beneficially own more
than 10% of the stock of the Company to file initial reports of
ownership and reports of changes in ownership. Such persons are also
required by SEC regulations to furnish the Company with copies of
these reports. Based solely on a review of the copies of such reports
furnished to the Company, the Company believes that during 1996 its
executive officers, directors and greater than 10% beneficial owners
complied with all applicable Section 16(a) filing requirements with
the exception of Morton A. Heller, who filed one report of change
late.
ITEM 11. EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth all
compensation received for services rendered in all capacities to the
Company and its subsidiary banks (the Banks) in the last three fiscal
years by Charles B. Israel, Thomas W. Griffiths and Amy G. Beidleman.
Long Term Compensation
Annual Compensation Awards Payouts
Securities
Other Res- Under-
Name and Annual tricted lying LTIP All Other
Principal Compen- Stock Options Pay- Compen-
Position Year Salary Bonus sation Awards /SARs outs satiion
---------- ---- -------- ------- ------ ------ ------- ---- ---------
Charles B. 1996 $166,879 $39,477 -- -- 10,000 $39,368 (1)
Israel, 1995 $164,755 $30,000 -- -- 31,250(3) -- $39,933 (1)
President 1994 $162,706 -- -- -- 15,000(4) -- $42,544 (1)
& CEO
Thomas W. 1996 $92,700 $24,327 -- -- -- -- (2)
Griffiths 1995 $90,500 $17,000 -- -- 782 (5) -- (2)
Vice 1994 $90,470 $ 5,523 -- -- 625 (5) -- (2)
President
Amy G.
Beidleman, 1996 $82,400 $24,327 -- -- -- -- (2)
Vice Pres- 1995 $80,500 $17,000 -- -- 625 (5) -- (2)
ident,CFO 1994 $61,620 $24,373 -- -- 500 (5) -- (2)
Secretary
(1)Split dollar insurance premiums of $33,121 (1996), $35,245 (1995)
and $37,294 (1994), were paid by Pitkin on behalf of Mr. Israel
which Mr. Israel will receive in certain circumstances when he
would cease working for Pitkin. Pitkin contributed $6,247 (1996),
$4,688 (1995) and $5,250 (1994) to Mr. Israel's 401(k) plan.
(2)Perquisites, such as contributions to Pitkin's 401(k) plan, did not
exceed the lessor of $50,000 or 10% of the total of the salary and
bonus reported for these Executive Officers.
(3)Options for 21,250 shares granted as a result of the five-for-four
stock split in October, 1995 and options for 10,000 shares granted
on January 3, 1995.
(4)As a result of the five-for-four stock split in October, 1994.
(5)As a result of the five-for-four stock splits in October, 1995 and
1994.
401(k) PLAN. The Company sponsors and pays the administrative
costs of a 401(k) savings plan for the Banks' employees. All monies
withheld from employees are paid to a trustee who invests for the
benefit of members of the 401(k) plan. The Banks match each
employee's contribution up to a maximum of 3% of the employee's
salary.
The Company has no retirement or pension plans.
KEY MAN LIFE INSURANCE. The Company has purchased a key man
insurance policy on the life of Mr. Israel in the amount of $3 million
with the Company as beneficiary.
STOCK OPTION PLANS. On September 20, 1990, the Board of
Directors of the Company adopted the 1990 Incentive Stock Option Plan
of Aspen Bancshares, Inc. (the ISOP). Pursuant to the ISOP, 156,250
shares of Common Stock are reserved for issuance to eligible employees
of the Company or any subsidiary upon the exercise of options granted
under the ISOP. These options are intended to qualify as incentive
stock options within the meaning of Section 422A of the Internal
Revenue Code of 1986. The ISOP is administered by the Compensation
Committee of the Board of Directors which designates the optionees,
exercise prices, exercise periods and dates of grants. Directors who
are not also employees of the Company are ineligible for stock options
under the ISOP.
Options granted are exercisable at a price no less than 100% of
the fair market value of the Common Stock on the date of grant,
provided, however, that in the case of an option granted to any person
then owning more than 10% of the voting power of all classes of the
Company's capital stock, the exercise price may not be less than 110%
of the fair market value of the Common Stock on the date of grant.
Further, the aggregate fair market value of the Common Stock,
determined at the time an option for the Common Stock is granted for
underlying options that are exercisable for the first time in any
calendar year by any person may not exceed $100,000. All options
issued pursuant to the ISOP expire no later than ten years after the
date of grant, except that (1) options granted to a person then owning
more than 10% of the voting power of all classes of the Company's
capital stock will expire no later than five years from the date of
grant and (2) options granted in 1997 expire six years after the date
of grant. The ISOP will terminate no later than September 20, 2000.
As of March 12, 1997, options for all 156,250 shares of Common Stock
had been granted under the ISOP. All options which have not been
exercised are currently exercisable.
The following table sets forth certain information concerning
individual grants of options made in 1996 to each of the named
executive officers under the ISOP. The table also sets forth the
potential realizable value for the stock options based on future
appreciation assumptions. There can be no assurance that the values
shown in this table will be achieved. There were no grants of stock
appreciation rights (SARs) to the named executives in 1996.
Option Grants in 1996
Potential Realizable
% of Total Assumed Annual Rates
Number of Options of Stock price
Securities Granted to Exercise Expir- Appreciation
Underlying Employees or Base Current ation for Option Term
Name Granted in 1996 Price(2) Value(3) Date 0%($) 5%($) 10%($)
----------------- ----------- ---------- --------- -------- ------ ----- -------- -------
Charles B. Israel 10,000 91% $ 13.375 $19.00 1/2003 $56,250 $175,950 $358,350
Thomas W. Griffiths - 0% $ - $ - $ - $ - $ -
Amy G. Beidleman - 0% $ - $ - $ - $ - $ -
All Other Employees 1,000 9% $ 13.375 $19.00 1/2003 $ 5,625 $ 17,595 $ 35,835
(1)Assuming a ten-year option term, annual compounding results in
total appreciation of 63% (at 5% per year) and 159% (at 10% per
year). Actual gains on exercise, if any, are dependent on the
future performance of Company stock. The values shown are based
on the indicated assumed annual rates or appreciation compounded
annually. Actual gains realized, if any, on stock option
exercises and common stock holdings are dependent on the future
performance of the Company stock and overall market conditions.
(2)Reflects the exercise price.
(3)Represents the market value based upon the closing price per
share of the Company's stock as quoted on NASDAQ on December 31,
1996.
The following table sets forth certain information with
respect to the exercise of options to purchase Common Stock in
1996 and the unexercised options held at December 31, 1996, and
the value thereof, by the named executive officers:
Aggregated Option Exercises in 1996
and 1996 Year End Option Values
Value of
Number of Unexercised
Number of Unexercised In-the-Money
Shares Options Options
Name Acquired on Value /SARs at at
Exercise Realized 12-31-96(1) 12-31-96(2)
Charles B. Israel - $ - 46,875 $665,625
- $ - 15,625 $211,875
- $ - 15,625 $196,875
- $ - 15,625 $171,875
- $ - 12,500 $120,000
- $ - 10,000 $ 56,250
Thomas W. Griffiths - $ - - $ -
Amy G. Beidleman - $ - 1,563 $ 22,195
- $ - 1,563 $ 19,694
(1) All of these options are currently exercisable.
(2) Represents the market value based upon the closing price per
share of the Company's stock as quoted by NASDAQ on December 31,
1996 ($19.00 per share), less the option exercise price.
Director Compensation
Directors of the Company who are not salaried officers or
employees receive a fee of $600 per meeting attended.
On September 15, 1993, shareholders approved a Non-Qualified
Stock Option Plan (the NSOP). Under the NSOP, 156,250 shares of
Common Stock are reserved for issuance to directors of the Company and
the Banks, except Mr. Israel and Mr. Heller, upon the exercise of
options. Pursuant to the NSOP, in September 1993 directors of the
Company were granted options for 1,000 shares for each year they had
served on the Board of Directors of the Company or the Banks. In
addition, on January 1 of each year, all directors of the Company
receive options for an additional 1,000 shares for the previous year
of service. No director can exercise any options granted under the
NSOP unless and until such director has served as a director of the
Company or the Banks for five full years. Under the NSOP, options for
additional shares may also be granted to persons other than directors
from time to time, at the discretion of the Company's Board of
Directors.
The exercise price for all options granted under the NSOP cannot
be less than the fair market value of the Common Stock on the date the
option is granted. Options expire 10 years after the date of grant,
with the exception of options granted in 1997, which expire six years
after the date of grant. Options granted under the NSOP cannot be
assigned but may be exercised prior to their expiration even if the
optionee is no longer a director of the Company or Pitkin. The NSOP
terminates on the tenth anniversary of its approval by shareholders,
or September 15, 2003. As of March 12, 1997, options for 115,863
shares of Common Stock had been granted under the NSOP.
Board Committees and Meetings
There were 12 meetings of the Board of Directors of the Company
in 1996. All directors of the Company are also directors of Pitkin.
All directors attended 75% or more of the Company's Board of Directors
meetings and meetings of Board committees on which they served, with
the exception of Mr. Clark who attended 8 Board of Directors meetings.
The Company's Board of Directors has no nominating committee.
Nominees for the Board of Directors are determined by the entire
Board. The members of the Audit Committee, which met twice in 1996,
are J. Thomas Clark, Jr. and Christopher L. Tolk. The Audit Committee
reviews the scope and results of the audit by the independent
auditors, makes recommendations to the Board as to the selection of
independent auditors and has approval authority with respect to
services provided by the independent auditors and fees therefore. In
addition, it reviews systems of internal control and accounting
policies. The members of the Compensation Committee, which met six
times in 1996, are J. Thomas Clark, Jr. and Carol Ann Kopf. Its
principal function is to review and make recommendations to the Board
of Directors regarding all executive compensation and benefit programs
available to officers and employees of the Company, including the
adoption, amendment or termination of any such program. The
Compensation Committee also administers the Company's stock option
plans and determines the directors and executive officers to whom
options will be granted, the number of shares for which options are
granted, the exercise price and other matters. (See Stock Option
Plans.)
Compensation Committee Interlocks and Insider Participation
The members of the Company's Compensation Committee, J. Thomas
Clark, Jr. and Carol Ann Kopf, have no interlocking relationships as
defined by SEC rules and regulations.
Report by the Compensation Committee on Executive Compensation
RESPONSIBILITIES AND OBJECTIVES. The Company's Compensation
Committee, consisting of J. Thomas Clark, Jr. and Carol Ann Kopf, (i)
establishes the specific compensation levels for executive officers,
including the CEO, (ii) conducts periodic reviews of executive
compensation and (iii) takes certain actions regarding the
compensation of senior executives of the Company and the Banks,
including the CEO. The Compensation Committee(the Committee)
determines salary levels and types and amounts of cash bonuses to be
distributed to senior executives and other officers, if and as
appropriate. The Committee also grants stock options to executive
officers under the ISOP.
This report is submitted by members of the Committee summarizing
their involvement in the compensation decisions and policies adopted
by the Company for executive officers generally and for the Chief
Executive Officer, Charles B. Israel, specifically.
GENERAL POLICY. The Company's executive compensation practices
are designed to reward and provide an incentive for executives based
on the achievements of corporate and individual goals. Compensation
levels for executives are established after considering various
quantitative measures including, but not limited to, financial
performance, peer group comparisons and labor market conditions.
Qualitative factors such as commitment, leadership, teamwork and
community involvement are also considered. To make compensation
decisions, the Committee elicits the recommendations and advice of the
CEO and other executive officers regarding appropriate or desired
levels of compensation for them. The Committee has complete access to
all necessary Company personnel records, financial reports and other
data, and may seek the advice of experts and analysts.
The Company's compensation structure is designed to attract and
retain executives of the highest caliber and to motivate these
executives to achieve the Company goals identified by the Board and
management. Executive compensation is also intended to create
incentives that will encourage these individuals to maintain their
focus on long-term shareholder interests.
COMPENSATION COMPONENTS. In evaluating executive compensation,
the Committee focuses upon three basic components: salary, annual
bonus and long-term incentive compensation.
Salary levels for senior executives and other officers are
reviewed by the Committee on an annual basis and reflect an
individual's responsibilities and experience. Currently, the Company
does not have any long-term employment agreements with executive
officers.
The annual bonus and long-term incentive compensation components
have historically been provided to executives based upon Company
performance and the executive's leadership skills, as appropriate.
The Committee primarily reviews corporate measures such as Company
revenue and growth in determining whether bonuses and long-term
incentive compensation should be awarded. The Committee also reviews
an executive's role in the Company attaining these measures.
The Committee believes that a portion of the total compensation
of senior executives should consist of long-term incentive awards such
as stock options. Company executives have received stock options
pursuant to the ISOP, which offers them the possibility of future
gains dependent upon their continued employment by the Company and the
long-term price appreciation of the Common Stock. (See Executive
Compensation - STOCK OPTION PLANS. )
REVIEW OF EXECUTIVE COMPENSATION. In making its recommendations
and determinations for 1996 regarding executive compensation, the
Committee was influenced by numerous positive considerations. The
Committee's decisions were principally influenced by the role of
senior executives in maintaining the Company's profitability and
financial strength, as shown by the following measures:
1.Net income increased by 3.4% from 1995 to 1996 before Centennial's
SAIF assessment and income tax adjustment.
2.Book value increased to $8.36 per share at 12/31/96 from $7.00 per
share at 12/31/95.
These measurements reflected improvements that either met or
exceeded previously established goals. The Committee believes that
these accomplishments directly reflect management's efforts and, as a
result, the Company is favorably positioned to attain future
successful performance. Also, the Committee believes that management
has not lost sight of its goal to serve the Western Slope communities
in which it is located, while focusing on improving shareholder value.
In light of the positive results in 1996, the Committee
determined that moderate increases in executive compensation were
justifiable, both to reward management for accomplishments to date and
to encourage future performance. Accordingly, the Committee approved
increases in compensation which it believes reflected appropriate
rewards for the performance in 1996.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. In assessing
appropriate types and amounts of compensation for the Chief Executive
Officer, the Committee evaluates both corporate and individual
performance. Corporate factors included in the evaluation are return
on shareholders' equity, return on assets, levels and changes in non-
performing assets, the market price of the Common Stock and the
Company's performance compared to peer institutions. Individual
factors include initiation and implementation of successful business
strategies, maintenance of an effective management team and various
personal qualities, including leadership, commitment and professional
and community standing.
After reviewing the 1996 corporate results, as discussed in the
preceding section on executive compensation, as well as individual
contributions, the Committee concluded that CEO, Charles B. Israel,
performed with skill and diligence during 1996. The year was marked
by solid financial performance, and Mr. Israel deserves a large
measure of the credit for this accomplishment. He assumed personal
responsibility for operating strategies which were adopted and
successfully pursued, including solid financial growth, continued
strong earnings, and the liaison between the operational divisions of
the Company and its shareholders.
For these reasons, the Committee granted Mr. Israel options for
5,109 shares of stock under the ISOP in January, 1997 for his
performance in 1996.
CONCLUSION. The Committee believes that the compensation amounts
and awards recently established for the Company's senior executives
reflect appropriate levels, given the Company's performance in 1996
and individual performance of management. The Committee will continue
to emphasize long-term performance objectives as the Company's success
continues.
SUBMITTED BY THE PERSONNEL AND COMPENSATION COMMITTEE: J. Thomas
Clark, Jr. (Chairman) and Carol Ann Kopf.
Company Performance
The following line graph presents the cumulative total monthly
shareholder return for the Common Stock from December 31, 1991,
compared with the Standard & Poor's 500 Stock Index and the Standard &
Poor's Major Regional Banks Index. Figures indicate that $100 was
invested on December 31, 1991, and that all dividends were reinvested.
Comparison of Cumulative Total Return
Aspen Bancshares, Inc., S&P 500 Stock Index and S&P Major Regional
Banks Index
(Graph Omitted)
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
--------- -------- -------- -------- -------- --------
Aspen Bancshares, Inc. $100 $152 $262 $210 $331 $479
S&P 500 Stock Index $100 $108 $118 $120 $165 $203
S&P Major Regional Banks $100 $127 $135 $128 $201 $275
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
As of March 12, 1997, there were 3,720,780 shares of Common Stock
outstanding, par value $0.01, held of record by 238 shareholders.
The Company had no shares of preferred stock outstanding as of March
12, 1997.
The following table sets forth information with respect to the
beneficial ownership of stock of the Company, including options for
Common Stock as of March 12, 1997, by (i) each person known by the
Company to own beneficially more than 5% of the Company's outstanding
Stock, (ii) each current director of the Company, and (iii) all
executive officers and directors of the Company as a group. Except as
otherwise indicated below, each of the directors, executive officers
and shareholders owning more than 5% of Common Stock has sole voting
and investment power with respect to all shares of Common Stock owned
by them.
Total
Common Number Percent
Common Stock of Shares of Total
Shares Under- Bene- Shares
Outstand- lying ficially Outstand-
Name and Address ing Options(8) Owned ing (9)
-------------------- --------- ---------- ---------- ----------
Clark, J. Thomas 54,687 23,563 78,250 1.99%
300 North Mill Street
Aspen, CO 81611
Heller, Morton A. 332,219 (1) 23,563 355,782 9.03%
534 East Hyman Avenue
Aspen, CO 81611
Israel, Charles B. 149,748 (2) 121,359 271,107 6.88%
534 East Hyman Avenue
Aspen, CO 81611
Kopf, Carol Ann 14,750 (3) 25,124 39,874 1.01%
606 East Hyman Avenue
Aspen, CO 81611
Oden, Robert R., M.D. 38,374 (4) 18,688 57,062 1.45%
100 East Main Street
Aspen, CO 81611
Tolk, Christopher 23,061 (5) 3,563 26,624 0.68%
400 East Main Street
Aspen, CO 81611
Barry, B. John 545,031 2,013 547,044 13.89%
P.O. Box 1950
Aspen, CO 81612
McDade, James 251,499 (6) 2,588 254,087 6.45%
6515 N. Ventana Canyon Drive
Tuscon, AZ 85715
Cede & Co. 1,526,419 (7) - 1,526,419 38.41%
Box 20
Bowling Green Station
New York, NY 10004
Executive Officers 618,347 (1-5) 218,986 837,333 21.26%
and Directors
as a Group (8 people)
(1)Includes 8,506 shares of Common Stock owned by Mr. Heller's' wife,
87,205 shares owned by City Capital Corp. of which Mr. Heller is a
47% owner, and 31,350 shares owned by HEM Properties in which Mr.
Heller is a partner.
(2)Includes 21,718 shares of Common Stock owned by Mr. Israel's
children.
(3)Includes 14,750 shares of Common Stock held by Ms. Kopf for the
benefit of her children.
(4)Includes 21,968 shares of Common Stock held by Oden & Co. in which
Dr. Oden has a 100% ownership interest and 26,406 shares of Common
Stock owned by Oden Enterprises in which Dr. Oden's wife has a 100%
ownership interest.
(5)Includes 312 shares owned by Mr. Tolk's daughter.
(6)Includes 164,062 shares of Common Stock owned by Mr. McDade's wife.
(7)Includes stock held for the benefit of certain executive officers
and directors of the Company.
(8)Exercisable within 60 days of March 12, 1997.
(9)Assumes the exercise of all stock options held by the named persons
which are exercisable within 60 days of March 12, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others
The Banks have had, and expect to have in the future, banking
transactions in the ordinary course of business with directors,
officers and shareholders of the Company and the Banks, and associates
of the foregoing, on substantially the same terms, including interest
rates and collateral on loans, as those prevailing at the same time
for comparable transactions with others. Loans to directors, officers
and shareholders of the Company and the Banks, and associates of the
foregoing, have not involved more than the normal risk of
collectability or presented other unfavorable features. All existing
loans to officers, directors, and principal shareholders and
associates of the foregoing have been, and all future loans to such
persons will be, approved by a majority of the disinterested
independent directors of the Banks in conjunction with applicable
regulatory guidelines.
Pitkin owns an undivided 60% interest in its building and
premises. Pitkin leases the other 40% interest in this facility from
a partnership pursuant to a lease agreement entered into on October 1,
1983, which expires on September 30, 2013. During the year ended
December 31, 1988, Pitkin purchased a 30% interest in the land and the
building from this partnership for $430,000 as specified in the lease
agreement. Also in 1988, Pitkin notified the partnership of its
intent to purchase the entire building and thus locked in the
$1,001,000 price for the remaining 70%. In 1989, Pitkin purchased an
additional 10% interest in the building and premises for $143,000 and
in 1992 Pitkin purchased an additional 20% interest for $286,000.
Under the terms of the lease agreement, Pitkin has the option to
purchase and, alternatively, the partnership has the option to require
Pitkin to purchase, all or less than all of the remaining 40% interest
in the facility at any time prior to expiration of the lease at a
price of $572,000 for the entire remaining 40% interest or a pro rata
amount for a lesser interest. On April 1, 1997, Pitkin will purchase
the remaining 40% interest. 35% of the partnership is owned by
minority shareholders in the Company owning approximately 5% of its
Common Stock. Morton A. Heller, Chairman of the Boards of the Company
and Pitkin, is a trustee of a trust for the benefit of his wife's son,
Samuel W. Hiatt, which owns a 12.5% interest in the partnership. The
remaining 52.5% of the partnership is owned by non-affiliates of the
Company. The lease terms and purchase price of the building and
premises were negotiated between Pitkin management and a
representative of the partnership who is an affiliate of Pitkin.
Management of the Company believes the terms of the lease and the
purchase price of the building and premises are on terms at least as
favorable to Pitkin as would have been available if no affiliates had
been part owners of the facility.
From time to time, certain officers, directors, shareholders,
other individuals, affiliated entities of the foregoing and commercial
banks participate in loans made by Pitkin. Participations occur when
the amount of a proposed loan exceeds Pitkin's then applicable lending
limits or funding capacity, or when an individual requests the
opportunity to participate in a loan. The participants, in some
cases, pay a service fee to Pitkin. Participants may share pro rata
in principal payments or participate on a first-out basis.
Generally, first-out participants may receive all principal payments
made by the borrower until the participant is repaid in full. In
those cases, Pitkin is not repaid until the participants have received
all amounts due them except in the event of a default in which event
Pitkin and participants share in any amounts collected on a pro rata
basis.
The following table lists the Company's directors, officers and
shareholders known by the Company to own beneficially more than 5% of
the Common Stock, and immediate family members of the foregoing, who
have participated in loans made by Pitkin since January 1, 1987.
Participations made to these persons were made on terms no less
favorable to Pitkin than participations made to persons not affiliated
with the Company. As of December 31, 1996, only Morton A. Heller had
participations outstanding as presented in the following table.
Principal Amount Principal Amount of
of Participations Participations
Outstanding Since Outstanding
January 1, 1987 December 31, 1996
Name and Relationship
-------------------------- ------------------ ------------------
Morton A. Heller (1)
Chairman of the Board $4,390,030 $56,895
Charles B. Israel
President, CEO and Director $ 809,860 $ -
Robert R. Oden (2)
Director $ 347,500 $ -
(1) Including family members and affiliated entities.
(2) Through affiliated entities.
Future transactions between the Company and the Banks and their
officers, directors, principal shareholders or affiliates of each of
them are expected to be on terms no less favorable to the Company or
the Banks than those between the Company or the Banks and third
parties and must be approved by a majority of the disinterested
independent directors of the Company or the Banks.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
A. Financial Statements
1.The following financial statements included in the
Company's Form 8-K filed March 7, 1997 are incorporated
herein by reference to this Form 10-K:
(a)Consolidated Statements of Financial Condition (page
23 of Form 8-K)
(b)Consolidated Statements of Income (page 24 of Form 8-K)
(c)Consolidated Statements of Changes in Shareholders'
Equity (page 25 of Form 8-K)
(d)Notes to Consolidated Financial Statements (pages
27-41 of Form 8-K)
2.Consolidated Financial Statement Schedules (none)
3.Exhibits
Exhibit
Number Description of Exhibit
3.1 Articles of Incorporation of Aspen Bancshares, Inc. (1)
3.2 Bylaws of Aspen Bancshares, Inc. (1)
10.1 Pitkin County Bank and Trust Building Lease. (1)
10.2 Form of Loan Participation Agreement. (1)
10.3 Incentive Stock Option Plan. (1)
10.4 Non-qualified Stock Option Plan (2)
10.5 Third Amended Acquisition Agreement and Plan of Merger
between Aspen Bancshares, Inc. and Val Cor
Bancorporation, Inc. dated January 12, 1996 (3)
10.6 Agreement and Plan of Reorganization dated as of
November 19, 1996 between Zions Bancorporation and
Aspen Bancshares, Inc. (4)
10.7 First Amendment to Agreement and Plan of Reorganization
dated March 11, 1997 between Zions Bancorporation and
Aspen Bancshares, Inc. (5)
11.0 Statement Regarding Computation of Per Share Earnings:
Weighted Average
Shares
(in thousands)
(unaudited)
Twelve Months Ended
December 31,
1996 1995 1994
----- ----- -----
Common Stock 3,486 2,971 2,966
Incentive Stock Options 81 61 50
Warrants - 44 39
Nonqualified Stock Options 36 17 9
------ ------ ------
Primary Shares Outstanding 3,603 3,093 3,064
Convertible Preferred 232 642 676
------ ------ ------
Fully Diluted Shares Outstanding 3,835 3,735 3,740
====== ====== ======
Net Income
-----------
Net Income $4,086 $4,683 $4,048
Less: Preferred Dividends Paid 108 437 463
------ ------ ------
Net Income $3,978 $4,246 $3,585
====== ====== ======
21.0 The Company has three subsidiaries: Pitkin County Bank
and Trust Company, Centennial Savings Bank, F.S.B.,
and Val Cor Bancorporation, Inc.
23.0 Consent of Dalby, Wendland & Co., P.C.
27.0 Financial Data Schedule (6)
(1)Incorporated by reference from the Company's Form S-1
Registration Statement, File No. 33-37098
(2)Incorporated by reference from the Company's Form S-8
Registration Statement, Filed June 22, 1995
(3)Incorporated by reference from the Company's Form S-3
Registration Statements, File No. 33-97700
(4)Incorporated by reference from the Schedule 13D filed by
Zions Bancorporation on November 19, 1996
(5)Incorporated by reference from Amendment No. 2 to the
Schedule 13D filed by Zions Bancorporation in March, 1997
(6)Incorporated by reference from the Company's Form 8-K
filed March 7, 1997
B. Reports on Form 8-K
A report on Form 8-K was filed November 19, 1996, regarding
the merger between Zions and the Company.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ASPEN BANCSHARES, INC.
By /s/Charles B. Israel
--------------------
Charles B. Israel
President and Chief Executive Officer
Date:
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:
Signature Title Date
/s/Morton A. Heller March 27, 1997
Morton A. Heller Chairman of the Board --------------
and Director
/s/Charles B. Israel March 27, 1997
Charles B. Israel President and CEO and --------------
Director
/s/J. Thomas Clark, Jr. March 27, 1997
J. Thomas Clark, Jr. Director --------------
/s/Carol Ann Kopf March 27, 1997
Carol Ann Kopf Director --------------
/s/Robert R. Oden, M.D. March 27, 1997
Robert R. Oden, M.D. Director --------------
/s/Amy G. Beidleman March 27, 1997
Amy G. Beidleman Vice President, CFO, --------------
and Secretary
Chief Accounting
Officer