1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________.
Commission File Number 000-18887
COLONIAL TRUST COMPANY
(Exact name of registrant as specified in its charter)
Arizona 75-2294862
(State of Incorporation) (IRS Employer identification Number)
5336 N. 19th Avenue
Phoenix, Arizona 85015
(Address of principal executive offices)
602-242-5507
(Registrant's telephone number)
NONE
(Former name, address and fiscal year, if changed since last report)
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the last practicable date: 721,750
Transitional Small Business Disclosure Format (check one):
Yes No X
2
COLONIAL TRUST COMPANY
INDEX
Page
----
Part I. Financial Information:
Item 1: Financial Statements 3
Condensed Balance Sheets 3
Condensed Statements of Earnings 4
Condensed Statements of Cash Flows 5
Notes to Condensed Financial Statements 6
Item 2: Management's Discussion and Analysis or
Plan of Operation 9
Part II. Other Information
Item 1: Legal Proceedings 12
Item 2: Changes in Securities 12
Item 3: Default Upon Senior Securities 12
Item 4: Other Information 12
Item 5: Exhibits and Reports on Form 8-K 13
SIGNATURES 13
2
3
COLONIAL TRUST COMPANY
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets
(Unaudited)
ASSETS December 31, 2000 March 31, 2000
----------------- --------------
Cash and cash equivalents $ 225,816 $ 9,260
Receivables 786,867 802,122
Note receivable 373,978 378,387
Property, furniture and equipment, net 794,428 843,095
Excess of cost over fair value acquired, net 119,953 129,081
Other assets 105,188 100,421
Restricted cash 509,851 502,556
---------- ----------
$2,916,081 $2,764,922
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 224,390 $ 197,132
Income tax payable 46,301
Deferred income taxes 7,249 7,249
---------- ----------
Total Liabilities 231,639 250,682
---------- ----------
Stockholders' equity:
Common stock, no par value;
25,000,000 shares authorized, 721,787 issued
and outstanding at December 31, 2000 and 755,234
issued and outstanding at March 31, 2000 578,911 555,177
Additional paid-in 506,208 505,347
Retained earnings 1,599,323 1,453,716
---------- ----------
Total Stockholders' Equity 2,684,442 2,512,240
---------- ----------
$2,916,081 $2,764,922
========== ==========
See accompanying notes to condensed financial statements.
3
4
COLONIAL TRUST COMPANY
Condensed Statements of Earnings (Unaudited)
Three-month periods Nine-month periods
Ended December 31 Ended December 31
----------------- -----------------
Revenues: 2000 1999 2000 1999
---------- ---------- ---------- ----------
Bond servicing income $ 602,334 $ 696,695 $1,911,668 $1,961,296
IRA servicing fees-corporate 128,763 117,198 427,905 407,467
IRA servicing fees-personal trust 68,562 39,566 218,136 129,903
Trust fee income 212,809 113,734 607,860 360,869
Interest income 21,799 18,054 57,116 45,941
---------- ---------- ---------- ----------
Total revenue 1,034,267 985,247 3,222,685 2,905,476
General and administrative expenses 943,628 817,788 2,725,296 2,286,007
---------- ---------- ---------- ----------
Earnings before income taxes 90,639 167,459 497,389 619,469
Income taxes 37,162 68,638 209,291 253,847
---------- ---------- ---------- ----------
Net earnings $ 53,477 $ 98,821 $ 288,098 $ 365,622
========== ========== ========== ==========
Basic net earnings per common share $ .07 $ .13 $ .40 $ .48
---------- ---------- ---------- ----------
Diluted net earnings per common share $ .07 $ .13 $ .39 $ .47
---------- ---------- ---------- ----------
Weighted average shares outstanding
- -basic 719,328 757,666 723,515 758,895
========== ========== ========== ==========
Weighted average shares outstanding
- -diluted 748,265 780,526 747,789 781,671
========== ========== ========== ==========
See accompanying notes to condensed financial statements.
4
5
COLONIAL TRUST COMPANY
Condensed Statements of Cash Flows (Unaudited)
Nine-month periods
Ended December 31,
------------------
2000 1999
--------- ---------
Cash flows from operating activities:
Net earnings $ 288,098 $ 365,622
Adjustments to reconcile net earnings to
Net cash provided by (used in) Operating activities:
Depreciation and amortization 114,514 96,620
Decrease (increase) in receivables 15,255 (390,192)
Increase in other assets (4,767) (3,818)
Increase (decrease) in accounts payable and accrued liabilities 27,258 (71,428)
Decrease in income tax payable (46,301) (48,543)
--------- ---------
Net cash provided by (used in) operating activities 394,057 (51,739)
Cash flows from investing activities:
Purchase of property, furniture and equipment (56,719) (99,541)
Additions to note receivable -- (13,681)
Payments received on note receivable 4,409 260,000
Increase in restricted cash (7,295) (174,897)
--------- ---------
Net cash used in investing activities (59,605) (28,119)
Cash flows from financing activities:
Proceeds from sale of common stock 24,595 --
Purchase and retirement of common stock (142,491) (11,306)
--------- ---------
Net cash used in financing activities (117,896) (11,306)
Increase (decrease) in cash and cash equivalents 216,556 (91,164)
Cash and cash equivalents at beginning of period 9,260 175,256
--------- ---------
Cash and cash equivalents at end of period $ 225,816 $ 84,092
--------- ---------
See accompanying notes to condensed financial statements.
5
6
COLONIAL TRUST COMPANY
Notes to Condensed Financial Statements
1. Significant Accounting Policies
In the opinion of Colonial Trust Company (the "Company"), the
accompanying unaudited condensed financial statements contain all
adjustments necessary to present fairly the financial position, the
results of operations and cash flows for the periods presented. The
accompanying statements do not include all disclosures considered
necessary for a fair presentation in conformity with generally accepted
accounting principles. Therefore, it is recommended that these
accompanying statements be read in conjunction with the financial
statements appearing in the Company's Annual Report on Form 10-KSB for
the year ended March 31, 2000.
(a) Nature of Business
The Company was incorporated on August 15, 1989, in the State
of Arizona for the purpose of engaging in the business of
acting as a fiduciary. The Company's common stock is
registered under the Securities Exchange Act of 1934.
The Company serves as trustee under various bond indentures
for issuers of bonds in 39 states. The issuers are primarily
churches and other non-profit organizations. As trustee, the
Company receives, holds, invests and disburses the bond
proceeds as directed by the applicable trust indenture and
receives weekly or monthly sinking fund payments from the
issuer of bonds, and, as paying agent, pays the semi-annual
principal and interest payments to the bondholder.
The Company also serves as trustee of self-directed individual
retirement accounts for certain bondholders or employees of
religious organizations.
The Company's Personal Trust segment provides investment
management, administration and custodial services for
customers with various securities held in trust or in
investment agency accounts.
(b) Revenue Recognition
Under the trust indentures with organizations issuing bonds,
Colonial, for its services, principally earns revenues based
on three fee structures. The first fee structure allows
Colonial to invest trust funds held for disbursement and
retain the gains and earnings therefrom. The second fee
structure requires the issuing institution to pay a percentage
of the bond proceeds to the Company for set-up and printing
costs during the first year. The third fee structure entitles
Colonial to interest earnings up to 2.5% daily trust funds
held in bond program fund accounts in lieu of a set-up fee.
Annual maintenance fees and bond printing costs are charged as
a percentage of the related bond issuance. Colonial also
receives fees for services provided as custodian for
self-directed individual retirement accounts.
In connection with providing investment management,
administration and custodial services, Colonial earns revenue
based on two fee structures. The first fee structure is
established as a percentage of the fiduciary assets, which
Colonial holds as trustee or agent. Fees are assessed on a
monthly basis to individual accounts according to the prior
month end fair market value of each account. The second fee
structure relates to an annual minimum fee that is set up to
cover the maintenance of fiduciary assets Colonial holds in
both trust and self-directed IRA accounts. Minimum fees are
assessed monthly, based on 1/12th of the published annual
minimum.
6
7
(c ) Computation of Basic and Diluted Net Earning Per Common Share
Basic EPS is computed based on weighted average shares
outstanding and excludes any potential dilution from stock
options, warrants and other common stock equivalents. Diluted
EPS reflects potential dilution from the exercise or
conversion of securities into common stock or from other
contracts to issue common stock.
2. Note receivable
On December 1, 1990, the Company entered into a Master Note and Letter
Agreement with Church Loans and Investment Trust, Inc., its former
parent corporation. The Master Note, in the maximum amount of
$1,000,000, is due on demand, bears interest payable monthly at 1% less
than the prime rate and is unsecured. Amounts advanced from time to
time may be prepaid and re-borrowed.
3. Earnings Per Share
A reconciliation from basic earnings per share to diluted earnings per
share for the periods ended December 31, 2000, and December 31, 1999
follows:
Three-month periods Nine-month periods
Ended December 31, Ended December 31,
------------------ ------------------
2000 1999 2000 1999
-------- -------- -------- --------
Net earnings $ 53,477 $ 98,821 $288,098 $365,622
-------- -------- -------- --------
Basic EPS
-weighted average
shares outstanding 719,328 757,666 723,515 758,895
======== ======== ======== ========
Basic EPS $ .07 $ .13 $ .40 $ .48
-------- -------- -------- --------
Basic EPS
-weighted average
shares outstanding 719,328 757,666 723,515 758,895
Effect of dilutive securities:
Stock options 28,937 22,860 24,274 22,776
-------- -------- -------- --------
Diluted EPS
-weighted average
shares outstanding 748,265 780,526 747,789 781,671
======== ======== ======== ========
Diluted EPS $ .07 $ .13 $ .39 $ .47
-------- -------- -------- --------
4. Business Segments
Operating results and other financial data are presented for the
principal business segments of the Company for the three-month and
nine-month periods ended December 31, 2000 and December 31, 1999. The
Company has two distinct business segments consisting of Corporate
Trust services and Personal Trust services.
7
8
In computing operating profit by business segment, interest income,
portions of administrative expenses and other items not considered
direct operating expenses were considered to be in the Other category.
Three-month periods: Corporate Personal Other Total
Trust Trust
---------- ---------- ---------- ----------
December 31, 2000
Bond Servicing Income $ 602,334 -- -- $ 602,334
IRA Servicing Fees 128,763 68,562 -- 197,325
Trust Fee Income -- 212,809 -- 212,809
Interest Income -- -- $ 21,799 21,799
---------- ---------- ---------- ----------
$ 731,097 $ 281,371 $ 21,799 $1,034,267
---------- ---------- ---------- ----------
General & Administrative
Expenses $ 414,197 $ 211,766 $ 317,665 $ 943,628
---------- ---------- ---------- ----------
December 31, 1999
Bond Servicing Income $ 696,695 -- -- $ 696,695
IRA Servicing Fees 117,198 $ 39,566 -- 156,764
Trust Fee Income -- 113,734 -- 113,734
Interest Income -- -- $ 18,054 18.054
---------- ---------- ---------- ----------
$ 813,893 $ 153,300 $ 18,054 $ 985,247
---------- ---------- ---------- ----------
General & Administrative
Expenses $ 410,354 $ 145,877 $ 261,557 $ 817,788
---------- ---------- ---------- ----------
Nine-month periods: Corporate Personal Other Total
Trust Trust
---------- ---------- ---------- ----------
December 31, 2000
Bond Servicing Income $1,911,668 -- -- $1,911,668
IRA Servicing Fees 427,905 $ 218,136 -- 646,041
Trust Fee Income -- 607,860 -- 607,860
-- -- $ 57,116 57,116
---------- ---------- ---------- ----------
$2,339,573 $ 825,996 $ 57,116 $3,222,685
---------- ---------- ---------- ----------
General & Administrative
Expenses $1,155,102 $ 602,125 $ 968,069 $2,725,296
---------- ---------- ---------- ----------
December 31, 1999
Bond Servicing Income $1,961,296 -- -- $1,961,296
IRA Servicing Fees 407,467 $ 129,903 -- 537,370
Trust Fee Income -- 360,869 -- 360,869
Interest Income -- -- $ 45,941 45,941
---------- ---------- ---------- ----------
$2,368,763 $ 490,772 $ 45,941 $2,905,476
---------- ---------- ---------- ----------
General & Administrative
Expenses $1,130,461 $ 428,435 $ 727,111 $2,286,007
---------- ---------- ---------- ----------
8
9
Item 2. Management's Discussion and Analysis or Plan of Operation
Results of Operations-Three-month Periods Ended December 31, 2000 and
December 31, 1999.
The Company had net earnings of $53,477 or $.07 per diluted share, for
the period ended December 31, 2000, compared to net earnings of
$98,821, or $.13 per diluted share, for the period ended December 31,
1999, a decrease in net earnings of 45.9%. The Company had total
revenue of $1,034,267 for the period ended December 31, 2000, compared
to total revenue of $985,247 for the period ended December 31, 1999, an
increase of 5%.
The Corporate Trust segment's revenue decreased to $731,097 for the
period ended December 31, 2000, compared to $813,893 for the period
ended December 31, 1999, a decrease of 10%. The Personal Trust
segment's revenue increased to $281,371 for the period ended December
31, 2000, compared to $153,300 for the period ended December 31, 1999,
an increase of 84%.
The Corporate Trust segment's bond servicing income decreased to
$602,334 for the period ended December 31, 2000, compared to $696,695
for the period ended December 31, 1999 a decrease of 13.5%. The
decrease in bond servicing income was primarily attributable to the
following factors. First, printing fees in the current quarter
decreased approximately $31,000 compared to the prior period, due
primarily to a decrease in new non-profit bond issuances originated for
which the Company was serving as trustee and paying agent. Second,
annual maintenance fee income in the current quarter decreased
approximately $23,000 compared to the prior period, due to the same
decrease in the number of new non-profit bond issuances originated in
the current quarter compared to the comparable prior period. Third,
municipal bond servicing fee income in the current quarter decreased
approximately $16,000 compared to income from such activities in the
prior comparable quarter. The Company anticipates that revenues from
the Corporate Trust segment's non-profit bond servicing activities will
continue to be negatively impacted for at least the next fiscal quarter
by overall weakness in the market for non-profit bonds and by an
anticipated decrease in new non-profit issuances originated by
broker/dealers with whom the Company has a relationship, compared to
issuances in the comparable prior period. At December 31, 2000, the
Company was serving as trustee and paying agent on 462 bond offerings
totaling approximately $461,700,000 in original principal amount; at
December 31, 1999, the Company was serving as trustee and paying agent
on 453 bond offerings totaling approximately $427,800,000 in original
principal amount.
Revenue from the Corporate Trust segment's IRA servicing activities
increased to $128,763 for the period ended December 31, 2000, compared
to $117,198 for the period ended December 31, 1999, an increase of 10%.
This increase was due to an increase in the number of IRA's being
serviced. Revenue from the Personal Trust segment's IRA servicing
activities increased to $68,562 for the period ended December 31, 2000,
compared to $39,566 for the period ended December 31, 1999, an increase
of 73%. The increase in IRA servicing revenue was primarily due to the
increase in the number of IRA's serviced by the Company. At December
31, 2000, the Corporate Trust segment was servicing 9,576 IRA's with an
aggregate value of approximately $167,200,000, and the Personal Trust
segment was servicing 291 IRA's with an aggregate value of
approximately $46,076,000. At December 31, 1999, the Corporate Trust
segment was servicing 8,639 IRA's with an aggregate value of
approximately $145,600,000, and the Personal Trust segment was
servicing 228 accounts with an aggregate value of approximately
$41,250,000.
The Personal Trust segment's trust fee income increased to $212,809 for
the period ended December 31, 2000, compared to $113,734 for the period
ended December 31, 1999, an increase of 87%. The increase in trust fee
income was primarily due to the increase in the number of trust
investment accounts or other accounts serviced by the Company. In this
regard, the Company acquired 45 trust investment accounts from a single
trust agency in the 3 month period ended December 31, 2000. It is not
anticipated that further acquisitions of this nature will occur in the
future. At December 31, 2000, the Personal Trust segment was serving as
trustee or agent for 467 trust, investment, or other accounts with a
fair market value of approximately $140,000,000. At December 31, 1999,
the Personal Trust segment was serving as Trustee or agent for 307
trust, investment accounts, or other accounts with a fair market value
of approximately $76,000,000.
9
10
Interest income increased to $21,799 for the period ended December 31,
2000, compared to $18,054 for the period ended December 31, 1999, an
increase of 21%. The net increase was primarily attributable to a
larger average receivable balance held for investment on the master
trust note, offset by falling interest rates.
The Corporate Trust segment's general and administrative expenses
increased in the aggregate to $414,197 for the period ended December
31, 2000, compared to $410,354 for the period ended December 31, 1999,
and increased to 57% of segment revenues for the period ended December
31, 2000, from 50% of segment revenues for the period ended December
31, 1999. The Personal Trust segment's general and administrative
expenses increased in the aggregate to $211,766 for the period ending
December 31, 2000, compared to $145,877 for the period ended December
31, 1999, and decreased to 75% of segment revenues for the period ended
December 31, 2000, compared to 95% of segment revenues for the period
ended December 31, 1999. The Corporate Trust segment's general and
administrative expenses as a percentage of revenues increased primarily
as a result of decreased revenues due to a reduction in new Corporate
Trust Bonds and Municipal Bonds issued. The increase in Personal Trust
segment's general and administrative expenses were due primarily to an
increase in personnel as well as additional expenses involved in
administering the Company's increased trust servicing business. This
expense increase was more than offset by the increased Personal Trust
segment's revenues resulting in the decreased percentage of segment
general and administrative expenses to revenues.
The Company's effective income tax rate was 41.0 % for the three-month
period ended December 31, 2000, and 41.0% for the three-month period
ended December 31, 1999.
Results of Operations-Nine-month Periods Ended December 31, 2000 and
December 31, 1999.
The Company had net earnings of $288,098, or $.39 per diluted share,
for the period ended December 31, 2000, compared to net earnings of
$365,622, or $.47 per diluted share, for the period ended December 31,
1999, a decrease in net earnings of 21%. The Company had total revenue
of $3,222,685 for the period ended December 31, 2000, compared to total
revenue of $2,905,476 for the period ended December 31, 1999, an
increase of 11%.
The Corporate Trust segment's revenue decreased to $2,339,573 for the
period ended December 31, 2000, compared to $2,368,763 for the period
ended December 31, 1999, a decrease of 1.2%. The Personal Trust
segment's revenue increased to $825,996 for the period ended
December 31, 2000, compared to $490,772 for the period ended December
31, 1999, an increase of 68%.
The Corporate Trust segment's bond servicing income decreased to
$1,911,668 for the period ended December 31, 2000, compared to
$1,961,296 for the period ended December 31, 1999, a decrease of 2.5%.
The decrease in bond servicing income was primarily attributable to a
decrease in the number of new non-profit bond issuances for which the
Company was serving as trustee and paying agent in the current
nine-month period, compared to new non-profit bond issuances originated
in the comparable prior period. The Company anticipates that revenues
from the Corporate Trust segment's non-profit bond servicing activities
will continue to be negatively impacted for at least the next fiscal
quarter by overall weakness in the market for non-profit bonds and by
an anticipated decrease in new non-profit issuances originated by
broker/dealers with whom the Company has a relationship, compared to
issuances in the comparable prior period.
Revenue from the Corporate Trust segment's IRA servicing activities
increased to $427,905 for the period ended December 31, 2000, compared
to $407,467 for the period ended December 31, 1999, an increase of
10
11
5%. The increase in Corporate Trust segment's IRA revenues was
primarily due to an increase in the number of accounts serviced by the
Company. Revenue from the Personal Trust segment's IRA servicing
activities increased to $218,136 for the period ended December 31,
2000, compared to $129,903 for the period ended December 31, 1999, an
increase of 68%. The increase in the Personal Trust segment's IRA
revenue was primarily due to the increase in the number of IRA's
serviced by the Company.
The Personal Trust segment's trust income increased to $607,860 for the
period ended December 31, 2000, compared to $360,869 for the period
ended December 31, 1999, an increase of 68%. The increase in trust
income was primarily due to the increase in the number and aggregate
value of trust investment accounts or other accounts serviced by the
Company. In this regard, the Company acquired 83 trust investment
accounts from a single trust agency in the 9 month period end December
31, 2000. It is not anticipated that further acquisitions of this
nature will occur in the future.
Interest income increased to $57,116 for the period ended December 31,
2000, compared to $45,941 for the period ended December 31, 1999 an
increase of 24%. The net increase was primarily attributable to a
larger average receivable balance held for investment on the master
trust note offset by falling interest rates.
The Corporate Trust segment's general and administrative expenses
increased in the aggregate to $1,155,102 for the period ended December
31, 2000, compared to $1,130,461 for the prior period, and increased to
49% of segment revenues for the period ended December 31, 2000,
compared to 48 % for the period ended December 31, 1999. The Personal
Trust segment's general and administrative expenses increased in the
aggregate to $602,125 for the period ended December 31, 2000, compared
to $428,435 for the period ended December 31, 1999, and decreased to
73% of segment revenues for the period ended December 31, 2000,
compared to 87% of segment revenues for the period ended December 31,
1999. The Corporate Trust segment's general and administrative expenses
as a percentage of revenues increased primarily as a result of
decreased revenues due to a reduction in new non-profit bond issuances
for which the Company was serving as trustee and paying agent. The
increase in Personal Trust segment's general and administrative
expenses were due primarily to an increase in personnel as well as
additional expenses involved in administering the Company's increased
trust servicing business. This expense increase was more than offset by
the increased Personal Trust segment's revenues resulting in the
decreased percentage of segment general and administrative expenses to
revenues.
The Company's effective income tax rate was 42.1% for the nine-month
period ended December 31, 2000, and 41.0 % for the nine-month period
ended December 31, 1999.
Liquidity and Capital Resources
Under legislation effective on July 20, 1996, the Company is required
to maintain net capital of at least $500,000; the Company's net capital
was $2,684,739 on December 31, 2000. The legislation also requires that
the Company's net capital meet certain liquidity requirements.
Specifically, $500,000 of such net capital must meet the Arizona
Banking Department's liquidity requirements. At December 31, 2000,
$509,851 of the Company's net capital met the Department's liquidity
requirements. The Company has satisfied these liquidity requirements
and believes that it will be able to maintain its compliance with these
liquidity requirements from cash on hand and other assets of the
Company. The Company also believes that it will be able to satisfy its
working capital and capital expenditure requirements for the
foreseeable future from existing cash balances, from anticipated cash
flow from operating activities, and from funds available under the
Company's Master Demand Note with its former parent, Church Loans and
Investments Trust.
The Company's cash and cash equivalents increased from $9,260 on March
31, 2000, to $225,816 on December 31, 2000, while the note receivable
decreased from $378,387 on March 31, 2000, to $373,978 on December 31,
2000. The increase in the cash and cash equivalents was primarily due
to cash flow from operations. The decrease in the note receivable was
due to the receipt of payments totaling $4,409. The Company's net
property and equipment decreased from $843,095 on March 31, 2000, to
$794,428 on
11
12
December 31, 2000. The decrease was primarily due to depreciation of
property and equipment exceeding the purchase of additional furniture,
equipment and computer software for new employees. The Company believes
that capital expenditure requirements for the foreseeable future will
be covered by excess cash flow from operations.
Market Risk
In the opinion of management, our market risk factors have not changed
materially from those set forth in the Company's 10-KSB for the year
ended March 31, 2000.
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995.
This Form 10-QSB contains one or more forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and is subject to the safe harbors created thereby.
These forward-looking statements involve risks and uncertainties,
including, but not limited to: the Company's continued employment of
key management; the success of the company in its business development
efforts; the Company's ability to generate bond servicing fees which is
dependent upon the ability of broker/dealers to originate bond
offerings for non-profit organizations, and the Company's ability to
maintain or develop a relationship with broker/dealers who are
successful in originating such bond offerings; the Company's success
with the investment advisory agreements with Hackett Investment
Advisors ("HIA"), Feldman Securities Group LLP (FSG) and Wright
Investors' Services (WIS), pursuant to which HIA, FSG and WIS provide
investment advisory services for the majority of the trust and
investment agency accounts of the Company, and the success of HIA, FSG
and WIS in managing such accounts; increased competition for the
Company's services; competitive pressures on prices for the Company's
services; increased staffing or office needs not currently anticipated;
new rules or regulations not currently anticipated which adversely
affect the Company; changes in legislation with respect to increased
net capital liquidity requirements; and an increase in interest rates
or other economic factors having an adverse impact on the Company and
other risks detailed from time to time in the Company's Securities and
Exchange Commission filings. The Company filed its fiscal 2000 Form
10-KSB on June 28, 2000. Please refer to this document and, in
particular, Item 6: Management's Discussion and Analysis of Plan or
Operation - Risk Factors, for a more detailed discussion of the risks
and uncertainties associated with the Company's future operations.
PART II. OTHER INFORMATION
Item 1: Legal Proceedings
None.
Item 2: Changes in Securities
None.
Item 3: Default Upon Senior Securities
None.
12
13
Item 4: Other Information
None.
Item 5: Exhibits and Reports on Form 8-K:
(a) Exhibits: None.
(b) Reports on Form 8-K: None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
COLONIAL TRUST COMPANY
DATE: February 14, 2001 BY: /s/ John K. Johnson
----------------- -------------------------------
John K. Johnson
Its: President
DATE: February 14, 2001 BY: /s/ Ian B. Currie
----------------- -------------------------------
Ian B. Currie
Its: Controller & Treasurer
13