1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 1999
REGISTRATION NO. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

FIRSTIER CORPORATION
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

COLORADO
(STATE OR JURISDICTION OF INCORPORATION OR ORGANIZATION)

6712
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)

47-0484682
(I.R.S. EMPLOYER IDENTIFICATION NO.)

11210 HURON STREET
NORTHGLENN, COLORADO 80234
(303) 451-1010
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES AND
PRINCIPAL PLACE OF BUSINESS)

TIMOTHY D. WIENS, PRESIDENT
FIRSTIER CORPORATION
11210 HURON STREET
NORTHGLENN, COLORADO 80234
(303) 451-1010
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

COPIES TO:

Reid A. Godbolt, Esq. David B. Miller, Esq.
David A. Thayer, Esq. Keyna P. Skeffington, Esq.
Jones & Keller, P.C. Faegre & Benson LLP
World Trade Center, Sixteenth Floor 2200 Norwest Center
1625 Broadway 90 South Seventh Street
Denver, Colorado 80202 Minneapolis, Minnesota 55402-3901
(303) 573-1600 (612) 336-3000

Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering under
Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed under Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ]

If this Form is a post-effective amendment filed under Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ]

If delivery of the prospectus is expected to be made under Rule 434, please
check the following box. [ ]

================================================================================
Proposed Maximum Amount of
Title of Each Class of Securities Aggregate Offering Registration
to be Registered Price Fee
- --------------------------------------------------------------------------------

Common Stock $43,000,000(1)(2) $11,352
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- ---------------

(1) Includes shares of common stock subject to the underwriters'
over-allotment option.
(2) Estimated solely for purposes of calculating the registration fee.

---------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON THE DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

================================================================================

SUBJECT TO COMPLETION, DATED , 2000

FIRSTIER CORPORATION
[LOGO]
COMMON STOCK

$ PER SHARE
- --------------------------------------------------------------------------------

o FirsTier Corporation is offering o This is our initial public offering
shares of common stock. and no public market currently
exists for our shares.

o We anticipate that the initial o Proposed trading symbol: Nasdaq
public offering price will be National Market - FTCO
between $ and $ per
share.

--------------------

THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5.

================================================================================
PER SHARE TOTAL
--------- -----

Public offering price................................. $ $
Underwriting discount................................. $ $
Proceeds to FirsTier Corporation...................... $ $
================================================================================

The underwriters have a 30-day option to purchase up to an aggregate of
additional shares of common stock, shares from us and shares from
selling shareholders to cover over-allotments, if any.

THE SHARES OF COMMON STOCK ARE NOT DEPOSITS, SAVINGS ACCOUNTS OR OTHER
OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OF ANYONE'S INVESTMENT IN THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

U.S. BANCORP PIPER JAFFRAY KEEFE, BRUYETTE & WOODS, INC.

THE DATE OF THIS PROSPECTUS IS , 2000.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE SECURITIES AND EXCHANGE COMMISSION DECLARES
OUR REGISTRATION STATEMENT EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

[LOGO AND MAP of the Colorado and Nebraska area indicating banking locations.]

FirsTier Corporation Banking Locations

iii

TABLE OF CONTENTS

PAGE
----

Summary..................................................................................................2
Risk Factors.............................................................................................5
Use of Proceeds.........................................................................................11
Dividend Policy.........................................................................................11
Capitalization..........................................................................................12
Selected Consolidated Financial Data....................................................................13
Management's Discussion and Analysis of
Financial Condition and Results of Operations........................................................15
Business................................................................................................36
Management..............................................................................................45
Principal and Selling Shareholders......................................................................49
Certain Transactions and Related Parties................................................................51
Supervision and Regulation..............................................................................52
Description of Capital Stock............................................................................59
Shares Eligible for Future Sale.........................................................................61
Underwriting............................................................................................62
Legal Matters...........................................................................................63
Experts.................................................................................................63
Where You Can Find More Information.....................................................................63
Index to Consolidated Financial Statements.............................................................F-1

---------------

You should rely only on the information contained in this prospectus. We have
not, and the underwriters have not, authorized any other person to provide you
with different information. This prospectus is not an offer to sell, nor is it
seeking an offer to buy, these securities in any state where the offer or sale
is not permitted. The information in this prospectus is complete and accurate as
of the date on the front cover, but the information may have changed since that
date.

---------------

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements in this prospectus are forward-looking statements. These
forward-looking statements include statements relating to our performance and
business strategy in the "Summary," "Use of Proceeds," "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business"
sections of this prospectus. Forward-looking statements include statements
regarding our intent, belief or current expectations, including statements
preceded by, followed by or including forward-looking terminology such as "may,"
"will," "should," "believe," "expect," "anticipate," "estimate," "continue" or
similar expressions or comparable terminology. It is important to note that our
actual results could differ materially from those anticipated from the
forward-looking statements depending on various important factors. These
important factors include all of those discussed under the caption "Risk
Factors" beginning on page 5, as well as other factors discussed throughout this
prospectus.

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SUMMARY

The items in the following summary are described in more detail later in this
prospectus. This summary provides an overview of selected information and does
not contain all of the information you should consider. Therefore, you should
also read the more detailed information set out in this prospectus, including
the consolidated financial statements and notes. Unless otherwise indicated, all
information in this prospectus assumes that the underwriters' over-allotment
option is not exercised. References to "we," "our," "us" and "FirsTier" refer to
FirsTier Corporation and its subsidiaries on a consolidated basis, unless stated
otherwise.

BUSINESS OF FIRSTIER CORPORATION

FirsTier Corporation is a $600 million multi-bank holding company headquartered
in the metropolitan Denver, Colorado area. We provide full service community
banking through the 18 locations of our two banks located in Colorado and
Nebraska. Our Colorado bank, which has 16 locations, operates in the rapidly
growing Front Range area of Colorado, which encompasses metropolitan Denver,
Boulder, Colorado Springs, Fort Collins and their surrounding communities. Our
Nebraska bank, which has two locations, provides banking services to customers
in western and central Nebraska, principally located along the state's main
highway, Interstate 80.

We have grown significantly in recent years by establishing start-up branches of
our Colorado bank at reasonable costs and staffing them with experienced
bankers. Consolidation in the Colorado banking community has resulted in the
availability of seasoned bankers who have existing customer relationships and
who prefer to work in a community banking environment. Consequently, since 1995,
we have opened or acquired 14 branches with experienced banking personnel who
have strong customer contacts and who have been able to initiate business
immediately upon the opening of a new branch. As a result, our start-up branches
generally have reached profitability within 12 months.

Our strategy of establishing start-up branches of our Colorado bank has resulted
in significant growth since 1995. Total assets have increased to $608.1 million
at September 30, 1999 from $96.0 million at December 31, 1995. Gross loans have
increased to $515.8 million at September 30, 1999 from $45.6 million at December
31, 1995. We increased our net income to $3.4 million for the year ended
December 31, 1998 from $1.4 million for the year ended December 31, 1995, a
compounded annual growth rate of 34.4%, despite absorbing costs associated with
opening new branches. Our net income for the nine months ended September 30,
1999 was $3.5 million.

As part of our community banking philosophy, we emphasize relationship banking
with small to mid-sized businesses. We provide high quality personalized service
to our customers by allowing each of our branches significant local decision
making authority. While we have decentralized customer-related activities, we
have centralized support functions, such as credit administration, loan review,
data processing, accounting and investments to take advantage of economies of
scale.

Our goal is to grow our franchise while maintaining a profitable,
customer-focused financial institution. To meet this goal, we will continue to
adhere to the following operating strategies:

o assembling an experienced banking team;

o maximizing operational efficiencies;

o developing active marketing programs;

o providing high quality customer service; and

o maintaining a high level of asset quality.

- --------------------------------------------------------------------------------

We expect our growth to continue largely in the Front Range area of Colorado,
which is the most densely populated area of the Rocky Mountain Region. This area
continues to experience rapid growth in terms of both population and employment.
In addition, employment in the Front Range is broadly diversified across
manufacturing, construction, financial services, wholesale and retail trade,
tourism, transportation, technology, cable television and government. Our growth
will be focused on:

o Adding new start-up branches. New branches will be added in markets we
deem attractive and will be staffed with experienced banking personnel
who have existing customer relationships; and

o Continuing to grow existing branches. We believe internal growth will be
fueled by our intensive solicitation policy conducted by branch
presidents and lending officers, as well as from referrals from existing
customers and our growing market presence. The addition of capital from
this offering also will allow us to increase our legal lending limit to
better meet the banking needs of our customers.

OFFICE LOCATION

Our principal executive offices are located at 11210 Huron Street, Northglenn,
Colorado, and our telephone number is (303) 451-1010.

THE OFFERING

Common stock offered................................... shares

Common stock outstanding after the offering............ shares (1)

Offering price ........................................ $ per share

Use of proceeds........................................ We intend to use the net proceeds of this
offering as follows:

o repay all amounts outstanding under
our line of credit, estimated to be
$15.0 million;

o fund up to $5.0 million of loans to be
originated by our recently formed
mezzanine lending business; and

o contribute the remaining proceeds as
capital to our Colorado bank to
support its growth.

Proposed Nasdaq National Market symbol................. FTCO

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(1) Excludes 500,000 shares of common stock issuable upon exercise of all
options outstanding as of the date of this prospectus, at an exercise price
of $12.00 per share.

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SUMMARY CONSOLIDATED FINANCIAL DATA

AT OR FOR THE NINE
AT OR FOR THE YEAR ENDED DECEMBER 31, MONTHS ENDED SEPTEMBER 30,
----------------------------------------------------- --------------------------
1995 1996 1997 1998 1998 1999
----------- ----------- ----------- ----------- ----------- ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

STATEMENT OF INCOME DATA:
Interest income ........................... $ 6,544 $ 7,908 $ 16,263 $ 26,754 $ 18,715 $ 32,132
Interest expense .......................... 2,655 3,120 7,481 12,754 8,755 16,384
----------- ----------- ----------- ----------- ----------- -----------
Net interest income ....................... 3,889 4,788 8,782 14,000 9,960 15,748
Provision for loan losses ................. 104 15 140 1,090 180 2,174
----------- ----------- ----------- ----------- ----------- -----------
Net interest income after
provision for loan losses ............... 3,785 4,773 8,642 12,910 9,780 13,574
Non-interest income ....................... 907 1,251 1,708 2,840 1,981 2,753
Non-interest expenses ..................... 2,775 3,749 6,544 10,659 7,043 11,052
----------- ----------- ----------- ----------- ----------- -----------
Income before income taxes ................ 1,917 2,275 3,806 5,091 4,718 5,275
Income tax expense ........................ 475 705 1,309 1,716 1,765 1,825
----------- ----------- ----------- ----------- ----------- -----------
Net income ................................ $ 1,442 $ 1,570 $ 2,497 $ 3,375 $ 2,953 $ 3,450
=========== =========== =========== =========== =========== ===========
Net income per common
share--basic and diluted ................ $ 0.22 $ 0.24 $ 0.36 $ 0.46 $ 0.40 $ 0.46
Weighted average common shares
outstanding--basic and diluted .......... 6,559,529 6,559,529 7,018,696 7,346,673 7,346,673 7,527,891

BALANCE SHEET DATA:
Total assets .............................. $ 95,975 $ 125,013 $ 227,600 $ 367,207 $ 335,493 $ 608,144
Loans ..................................... 45,580 68,751 165,627 289,989 248,347 515,843
Allowance for loan losses ................. 767 851 1,321 2,187 1,592 4,364
Investment securities ..................... 34,783 31,788 28,512 34,228 44,351 45,515
Deposits .................................. 78,041 101,387 200,294 319,480 294,044 516,466
Stockholders' equity ...................... 12,244 13,749 16,911 20,706 19,868 24,328

Book value per share ...................... 1.87 2.10 2.30 2.82 2.70 3.21
Tangible book value per share ............. 1.87 2.10 2.18 2.70 2.59 3.11

KEY RATIOS:(1)
Net interest margin(2) .................... 5.11% 5.36% 5.27% 5.32% 5.49% 4.77%
Net interest spread(2) .................... 4.15 4.24 4.39 4.56 4.73 4.17
Return on average assets .................. 1.63 1.52 1.35 1.18 1.49 0.97
Return on average common equity ........... 11.78 11.42 16.31 17.94 21.47 20.23
Operating expenses to average assets ...... 2.58 3.64 3.53 3.72 3.48 3.11
Efficiency ratio(3) ....................... 57.85 62.08 61.82 62.92 58.58 59.48
Nonperforming assets to total assets ...... 0.14 0.10 0.60 0.30 0.44 0.22
Nonperforming loans to total loans ........ 0.30 0.17 0.74 0.32 0.28 0.24
Allowance for loan losses to total loans .. 1.68 1.24 0.80 0.75 0.69 0.85
Allowance for loan losses to
nonperforming loans ..................... 555.80 739.65 107.57 236.94 229.73 348.00
Net charge-offs (recoveries) to
average loans ........................... 0.48 (0.13) (0.04) 0.10 (0.05) 0.00
Tier 1 leverage ratio ..................... 12.76 12.95 7.53 5.70 6.20 5.64
Tier 1 risk-based capital ratio ........... 21.01 17.36 9.02 6.44 7.22 5.73
Total risk-based capital ratio ............ 22.21 18.36 9.74 7.22 7.80 9.30

- ---------------

(1) Where appropriate, the ratios for the nine months ended September 30, 1998
and 1999 have been annualized. These ratios are not necessarily indicative
of the results for the entire year.
(2) Calculated on a tax equivalent basis.
(3) The efficiency ratio represents non-interest expenses, excluding
amortization of goodwill, as a percentage of net interest income plus
non-interest income.

- --------------------------------------------------------------------------------

RISK FACTORS

You should carefully consider the following risk factors before you decide to
buy our common stock. You should also consider the other information in this
prospectus.

OUR BUSINESS IS CONCENTRATED IN THE FRONT RANGE AREA OF COLORADO; IF ECONOMIC
CONDITIONS IN OUR PRIMARY MARKET AREA DETERIORATE, OUR BUSINESS MAY BE
NEGATIVELY AFFECTED.

Our success depends on the general economic conditions of the markets we serve.
Our operations are concentrated in the Front Range area of Colorado and to a
lesser extent in western and central Nebraska. Further, 58.4% of our outstanding
loans as of September 30, 1999 were to businesses and individuals in the Denver
and Boulder metropolitan areas. If economic conditions in our market areas,
especially in the Denver and Boulder metropolitan areas, are unfavorable or
deteriorate, we could experience an increase in the number of borrowers that are
unable to repay their loans on a timely basis. This could lead to higher rates
of loss and loan payment delinquencies. These factors could have a negative
effect on our business, financial condition and results of operations.

BECAUSE A SIGNIFICANT PORTION OF OUR LOAN PORTFOLIO IS SECURED BY REAL ESTATE,
ANY NEGATIVE CONDITIONS AFFECTING REAL ESTATE COULD BE DETRIMENTAL TO US.

A significant portion of our loan portfolio consists of commercial loans which
are secured by various types of real estate as collateral, as well as real
estate loans on principally commercial properties. Since these loans rely on
real estate as collateral, either totally in the case of real estate loans or
partially in the case of commercial loans secured by real estate, they are
sensitive to economic conditions and interest rates. Conditions in the real
estate lending sector have been favorably affected by rapid economic growth in
the Front Range area of Colorado and by relatively low interest rates during the
past several years. There is no assurance that these favorable conditions will
continue. Real estate lending also presents additional credit related risks,
including a borrower's inability to pay and deterioration in the value of real
estate held as collateral.

WE HAVE A SIGNIFICANT AMOUNT OF CONSTRUCTION LOANS. THESE LOANS ARE SUBJECT TO
ADDITIONAL RISKS UNIQUE TO THE BUILDING INDUSTRY THAT COULD NEGATIVELY AFFECT
OUR NET INCOME.

Historically, our loan portfolio has included a concentration of construction
loans consisting of one-to-four family residential construction loans,
commercial construction loans and land loans for residential and commercial
development. At September 30, 1999, 23.4% of our total loan portfolio was in
construction loans. Approximately 45.4% of these loans were for properties that
were not pre-sold or for land loans. Conditions in the construction lending
sector have been favorably affected by the same factors affecting real estate
loans. There is no assurance that these favorable conditions will continue. In
addition to the risk of nonpayment by borrowers, construction lending poses
additional risks in that:

o land values may decline;

o developers or builders may fail to complete or develop projects;

o municipalities may place moratoriums on building;

o developers may fail to sell the improved real estate;

o construction delays and cost overruns may be experienced;

o insufficient collateral may exist; or

o permanent financing may not be obtained in a timely manner.

Any of these conditions could negatively affect our net income and our financial
condition.

WE INTEND TO CONTINUE TO GROW PRIMARILY THROUGH THE START UP OF NEW BRANCHES IN
COLORADO. THIS STRATEGY INVOLVES SIGNIFICANT INVESTMENT WITHOUT A HISTORY OF
OPERATIONS.

Opening new branches involves the commitment of substantial capital and
management resources in locations at which we have no prior operating history.
Since 1993, when we acquired our Colorado bank, we have opened 13 locations and
acquired two locations in the Front Range area of Colorado. We plan to open one
loan production office in early 2000 and open additional branches in the future.
Our branch strategy has benefitted from consolidation in the Colorado banking
market, which has resulted in an increased availability of qualified banking
personnel and suitable new branch locations. There is no assurance that these
favorable conditions will continue. In addition, the success of new branches is
dependent on many factors, including:

o the retention of qualified lending and management personnel;

o securing favorable purchase or lease terms for new branch sites;

o the ability to secure regulatory approvals;

o the cost effective and timely construction and opening of branches;

o successfully building customer relationships;

o competitive product offerings; and

o favorable economic conditions in our primary market areas.

Start-up branches do not achieve profitability until loan volume is sufficient
to generate interest income to cover expenses. There is no assurance that our
start-up branches will achieve profitability consistent with our historical
experience or that our new branches will be profitable at all.

IF WE DO NOT MANAGE OUR GROWTH EFFECTIVELY, OUR FINANCIAL PERFORMANCE COULD BE
NEGATIVELY AFFECTED.

Our failure to manage growth effectively, our inability to secure additional
banking locations, or our inability to recruit, maintain and integrate
additional qualified employees, could have a negative effect on our business and
results of operations. We have experienced rapid growth since 1995, when we
began our strategy of establishing start-up branches in the Front Range area of
Colorado. Our assets have grown from $96.0 million at December 31, 1995 to
$608.1 million at September 30, 1999. Our number of employees has grown from 45
at December 31, 1995 to 210 at September 30, 1999. We intend to continue to grow
by opening new branches and by adding new employees. Future growth will impose
significant added responsibilities on members of management, including
identifying and securing banking locations and identifying, recruiting,
maintaining and integrating additional employees. There can also be no assurance
that our systems, procedures and controls will be adequate to support our
operations as they expand or that we will be able to implement necessary
modifications to these systems, procedures and controls in a timely manner.

WE RELY HEAVILY ON OUR MANAGEMENT.

We are dependent upon the efforts and services of Timothy D. Wiens and our other
senior officers. The loss of the services of these persons could have a material
negative effect on our operations. We do not maintain key-man life insurance
with respect to Timothy D. Wiens.

COMPETITION WITH OTHER FINANCIAL INSTITUTIONS COULD NEGATIVELY AFFECT OUR
PROFITABILITY.

We face substantial competition in originating loans and in attracting deposits.
Competition in originating loans comes principally from banks, savings
institutions and other lenders. Many of our competitors enjoy competitive
advantages including greater financial resources, a wider geographic presence or
more accessible branch office locations, the ability to offer additional
services, more favorable pricing alternatives and lower origination and
operating costs. Increased competitive pressures could be one effect of the
recently adopted Gramm-Leach-Bliley

Act described below under "Supervision and Regulation." This competition could
result in a decrease in loans we originate and could negatively affect our
results of operations.

In attracting deposits, we compete with insured depository institutions such as
banks, savings institutions and credit unions, as well as institutions offering
uninsured investment alternatives, including money market funds. Traditional
banking institutions, as well as entities intending to transact business solely
on-line, are increasingly utilizing the Internet as a means of attracting
deposits without geographic or physical limitations. In addition, many nonbank
competitors are not subject to the same extensive regulations that govern our
banks. These competitors may offer higher interest rates than we do, which could
result in either our attracting fewer deposits or in our being required to
increase our rates in order to attract deposits. Increased deposit competition
could increase our cost of funds and could affect adversely our ability to
generate the funds necessary for our lending operations, thereby negatively
affecting our results of operations.

WE ARE VULNERABLE TO CHANGES IN INTEREST RATES.

A sustained decrease in interest rate spreads would have a negative effect on
our net interest income and profitability. Our profitability in part is
dependent upon the spread between the interest rates earned on loans,
investments and other earning assets and the interest rates paid on deposits and
other interest-bearing liabilities. There can be no assurance that a decrease
will not occur. Interest rates are highly sensitive to many factors, including
governmental monetary policies and domestic and international economic and
political conditions. Conditions such as inflation, recession, unemployment,
money supply and other factors beyond our control may also affect interest
rates. Fluctuations in market interest rates are neither predictable nor
controllable and may have a material negative effect on our business, financial
condition and results of operations.

When our earning assets mature or reprice more quickly than our interest-bearing
liabilities in a given period, a decrease in market interest rates could
decrease our net interest income. Likewise, when our interest-bearing
liabilities mature or reprice more quickly than our earning assets in a given
period, an increase in market interest rates could decrease our net interest
income. At September 30, 1999, our earning assets maturing or repricing within
one year exceeded our interest-bearing liabilities maturing or repricing during
the same period by 16.3%.

Changes in interest rates also can affect the value of our loans. An increase in
interest rates that adversely affects the ability of borrowers to pay the
principal or interest on our loans may lead to an increase in our nonperforming
assets and could have a material negative effect on our results of operations.

IF OUR ALLOWANCE FOR LOAN LOSSES IS NOT ADEQUATE TO COVER ACTUAL LOSSES, OUR NET
INCOME MAY DECREASE.

We are exposed to the risk that our customers will be unable to repay their
loans in a timely fashion and that any collateral securing the payment of loans
may not be sufficient to assure repayment. The inability of borrowers to repay
their loans could erode earnings and capital of our banks. We maintain an
allowance for loan losses to cover loan defaults. Our allowance for loan losses
is based on various assumptions and judgments regarding the collectibility of
loans, including our prior experience with loan losses, as well as an evaluation
of the risks in our loan portfolio. This allowance is maintained at a level
considered adequate by us to absorb anticipated losses. The amount of future
loan losses is susceptible to changes in economic, operating and other
conditions, including changes in interest rates, that may be beyond our control.
Actual losses may exceed our estimates and we may have to increase the allowance
for loan losses. This would cause us to increase our provision for loan losses,
which would decrease our net income. Further, state and federal regulatory
agencies, as an integral part of their examination process, review our loans and
our allowance for loan losses. Regulators, when reviewing our loan portfolio,
may require us to increase our allowance for loan losses, negatively affecting
our net income.

In the fourth quarter of 1998, we modified our methodology for determining the
allowance for loan losses. We further refined our methodology in the first
quarter of 1999. The change in methodology contributed to an increase in the
provision for loan losses for the year ended December 31, 1998 of 679% over the
same period in

1997, while gross loans receivable increased 75.2%, and caused an increase of
1108% to our provision for loan losses for the nine month period ended September
30, 1999, while gross loans receivable increased 107.7% from December 31, 1998.
This resulted in an increase in the allowance for loan losses as a percentage of
total loans from 0.75% at December 31, 1998, to 0.85% at September 30, 1999.
These increases negatively affected our net income. Additional increases in our
provision for loan losses and our allowance for loan losses may be necessary in
the future and may affect period to period comparisons of net income.

OUR COMPUTER SYSTEMS AND THOSE OF OUR SERVICE PROVIDERS AND CUSTOMERS MAY NOT
ACHIEVE YEAR 2000 READINESS.

We may be unable to resolve the potential impact of the year 2000 on the ability
of our computerized information systems and those of our service providers to
accurately process potentially date-sensitive information. Any of the programs
we or our service providers use that recognize a date using "00" as the year
1900 rather than the year 2000 could result in errors or system failures. The
interruption of our business could be substantial and we could experience
increased costs if our year 2000 efforts or those of our service providers are
not effective. We have developed and tested contingency plans in the event we or
our service providers experience system failures. There is no assurance that, if
required, these plans can be implemented successfully. We also may experience
losses related to loans we have made to businesses that may be adversely
affected by the year 2000 issue. Further, the Year 2000 Information and
Readiness Disclosure Act of 1998 that was signed into law in July 1999 may limit
our ability to seek damages from third parties for losses we suffer. These
uncertainties may negatively impact our financial condition and results of
operations. For further information, see "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Year 2000 Considerations."

THE WIENS FAMILY WILL RETAIN SIGNIFICANT CONTROL OF FIRSTIER.

As a practical matter, shareholders outside the Wiens family will have little or
no ability to direct the affairs of FirsTier without the support of the Wiens
family. Upon completion of this offering, and assuming full exercise of the
over-allotment option, the Wiens family in the aggregate will beneficially own
or control in excess of % of our outstanding common stock. As a result, these
shareholders, acting together, are able to control all matters requiring
approval by shareholders, including amendment of our articles of incorporation
and bylaws, the approval of mergers or similar transactions and the election of
all directors. The death of a substantial shareholder or the decision by the
Wiens family to sell or liquidate its shares for whatever reason would have the
effect of altering the balance of effective shareholder control. This
concentration of ownership also may delay, defer or prevent a change in control
of us and may make some transactions more difficult or impossible without the
support of these shareholders. Joel H. Wiens and Timothy D. Wiens constitute two
of the members of our board of directors and they serve as our highest ranking
officers. These persons may experience conflicts of interest in the execution of
their duties on our behalf. There can be no assurance that any conflicts would
be resolved in our favor.

AN ACTIVE LIQUID TRADING MARKET MAY NOT DEVELOP FOR OUR COMMON STOCK.

We have filed an application with the Nasdaq National Market to list the shares
of common stock offered by this prospectus. We anticipate that the common stock
will be listed on the Nasdaq National Market under the trading symbol "FTCO." We
do not know the level of trading volume that will exist for our common stock
after this offering. Trading volume levels may affect your ability to sell your
shares quickly at the current market price. The initial public offering price of
our common stock has been determined by negotiations between the underwriters
and us. You may not be able to resell the common stock you buy at or above the
initial public offering price.

OUR COMMON STOCK PRICE COULD BE VOLATILE.

The market price of our common stock could fluctuate significantly due to
variations in quarterly and yearly results of operations, general trends in the
banking industry and other unknown factors. Additionally, there historically
have been price and volume fluctuations in the stock market that often have been
unrelated or disproportionate to the operating performance of the affected
companies. These broad fluctuations might adversely affect the market price of
our common stock. In addition, these fluctuations could adversely affect our
ability to raise capital through future equity financings.

SALES OF COMMON STOCK BY EXISTING SHAREHOLDERS COULD ADVERSELY AFFECT THE PRICE
OF OUR COMMON STOCK.

Sales of a significant number of shares of our common stock in the public market
following this offering, or the perception that the sales could occur, could
adversely affect the market price of our common stock. Following completion of
this offering, we will have shares of common stock outstanding or
if the underwriters' over-allotment option is exercised in full. The shares
offered by this prospectus will be freely tradeable without restriction, except
for any shares which are purchased by our affiliates. Our directors and
executive officers who, assuming full exercise of the underwriters'
over-allotment option, will hold or beneficially own an aggregate of
shares or % of the outstanding shares upon completion of the offering, have
agreed not to offer, sell or contract to sell any common stock for 180 days
after the date of this prospectus without the prior written consent of the
representative of the underwriters. Upon expiration of this 180-day period, all
of these shares could be resold by these and other persons subject to certain
requirements of Rule 144 under the Securities Act. Rule 144 includes a limit on
the number of shares that may be sold in any three-month period equal to the
greater of 1% of the shares outstanding, or the average weekly trading volume of
shares of common stock for the four-week period prior to the time of the resale.

IMPEDIMENTS TO TAKEOVER ATTEMPTS AND REMOVAL OF DIRECTORS AND EXECUTIVE OFFICERS
MAY DEPRESS THE PRICE OF OUR COMMON STOCK.

There are provisions in our articles of incorporation and other restrictions
that would make it difficult and expensive to pursue a change in control or a
takeover attempt which is opposed by our board of directors. As a result,
shareholders may not have an opportunity to participate in these types of
transactions and thereby may not be able to take advantage of premiums generally
paid in today's market. These restrictions include:

o the imposition of federal law restrictions on the acquisition of control
of a bank holding company, including regulatory approval requirements;

o the authorization of our board of directors to issue blank check
preferred stock, which could be issued as part of a takeover defense;

o the division of our board of directors into three classes that are
elected over a three-year period, thus making it more difficult for a
third party to acquire control of us; and

o the requirement of a two-thirds affirmative shareholder vote for
mergers, consolidations, liquidations or dissolutions.

WE DO NOT INTEND TO PAY DIVIDENDS ON OUR COMMON STOCK.

We have never declared or paid, and we do not currently intend to declare or
pay, cash dividends on our common stock because we expect to apply any earnings
to developing and expanding our business. In addition, our ability to pay
dividends is subject to regulatory limitations.

WE ARE SUBJECT TO SIGNIFICANT GOVERNMENT REGULATIONS, INCLUDING NEW LEGISLATION,
WHICH AFFECT OUR OPERATIONS AND MAY RESULT IN HIGHER OPERATING COSTS OR
INCREASED COMPETITION FOR US.

We are subject to extensive regulation by the Board of Governors of the Federal
Reserve, the Federal Deposit Insurance Corporation, the Colorado Division of
Banking and the Nebraska Department of Banking and Finance. Supervision,
regulation and examination of banks and bank holding companies by bank
regulatory agencies are intended primarily for the protection of depositors
rather than shareholders. These agencies examine bank holding companies and
commercial banks, establish capital and other financial requirements and approve
new branches, acquisitions or other changes of control. Our ability to establish
new branches or to make acquisitions is conditioned upon the receipt of required
regulatory approvals from the applicable regulators.

Changes in legislation and regulations will continue to have a significant
impact on the banking industry. Although some of the legislative and regulatory
changes may benefit us and our banks, others will increase our costs of doing
business and could assist our competitors, which are not subject to similar
regulation.

The Gramm-Leach-Bliley Act was signed into law on November 12, 1999. This major
banking legislation now permits affiliation among depository institutions and
entities whose activities are considered "financial in nature." Activities which
are expressly considered financial in nature include securities and insurance
underwriting and agency, investment management and merchant banking. With
certain exceptions, this act similarly expanded the authorized activities of
subsidiaries of national banks and, indirectly, through the provisions of state
law, Colorado and Nebraska banks. In general, these expanded powers are reserved
to bank holding companies and banks where all depository institutions affiliated
with them are well capitalized and well managed based on applicable banking
regulation. These provisions become effective March 11, 2000. The act clarifies
the regulation by states of insurance products sold by depository institutions,
imposes rules on data privacy and repeals some of the exemptions enjoyed by
banks under federal securities laws relating to the offering of securities and
the licensing of broker-dealers and investment advisors. This act will be the
subject of extensive rule making by federal banking regulators and others.
Although the effects of this legislation will only begin to be understood over
the next several years and cannot presently be predicted with any certainty, it
may accelerate trends toward larger financial services companies offering a
wider range of products and services. Firms of this type may have increased
resources and market power which may adversely affect our ability to compete
effectively.

WE FACE RISKS IF WE ACQUIRE A BANK OR FINANCIAL INSTITUTION.

From time to time we evaluate opportunities that arise to acquire banks and
other financial institutions, although such acquisitions are not the focus of
our growth strategy. Acquisitions involve risks of negatively changing results
of operations, changes in capital structure, including increased reliance on
debt, unforeseen liabilities relating to the acquired institution or arising out
of the acquisition transaction, or asset quality problems of the acquired entity
and other conditions not within our control, such as strained personnel
relations, loss of customers because of change of identity and other risks
affecting the acquired institution.

USE OF PROCEEDS

The net proceeds from the sale of common stock offered by this prospectus,
assuming a public offering price of $ per share, which is the midpoint of
the range set forth on the cover of this prospectus, after deducting the
underwriting discount and expenses, are estimated to be $ million, or $
million if the underwriters' over-allotment option is exercised in full. We will
not receive any of the proceeds from the sale of common stock offered by the
selling shareholders as part of the over-allotment option if it is exercised.

We intend to use the net proceeds as follows:

o repay all amounts outstanding under our line of credit, estimated to be
$15.0 million. Our line of credit bears interest at 250 basis points
over like constant maturity treasuries (7.25% at September 30, 1999) and
matures on June 30, 2002. All of the line of credit advances were used
to provide funds which were contributed as capital to our Colorado bank;

o fund up to $5.0 million of loans to be originated by our recently formed
mezzanine lending business; and

o contribute the remainder as capital to our Colorado bank to support its
growth. The additional capital contribution will be used by the Colorado
bank to increase its lending activities.

Pending their ultimate application, the net proceeds may be invested in
short-term, marketable, investment grade interest-bearing securities.

DIVIDEND POLICY

We have never declared or paid any dividends on our common stock. We do not
anticipate paying any cash dividends in the foreseeable future. We currently
intend to retain any future earnings to finance the development and expansion of
our business. Any future determination to pay cash dividends will be at the
discretion of the board of directors and will be based upon our financial
condition, operating results, capital requirements, regulatory constraints and
such other factors as the board of directors deems relevant.

Colorado law permits us to pay dividends on our common stock when we are solvent
and when dividend payments would not render us insolvent. Our ability to pay
cash dividends largely depends on the amount of cash dividends paid to us by our
subsidiary banks. Capital distributions, including dividends by financial
institutions such as our subsidiary banks, are subject to restrictions tied to
each institution's earnings and capital. Generally, without prior regulatory
approval, our subsidiary banks cannot pay dividends during any calendar year in
excess of the sum of their earnings during that year and the two previous years,
less any other distributions during that period. See "Supervision and
Regulation" and "Description of Capital Stock." Our ability to pay cash
dividends will also be significantly limited if we are in default under, or
defer interest payments on, our 9.375% junior subordinated debentures. See note
18 to the notes to consolidated financial statements.

CAPITALIZATION

The following table sets forth our capitalization at September 30, 1999, on an
actual basis and as adjusted to reflect the sale by us of the shares of
common stock offered by this prospectus at an assumed offering price of $
per share and the application of the net proceeds of this offering as set forth
under "Use of Proceeds." This information should be read in conjunction with the
consolidated financial statements and related notes and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" appearing
elsewhere in this prospectus.

SEPTEMBER 30, 1999
----------------------------
ACTUAL AS ADJUSTED
------------ -------------
(DOLLARS IN THOUSANDS)

Borrowings:
Securities sold under agreements to repurchase........................................ $ 20,268 $
Federal Home Loan Bank borrowings..................................................... 8,593
Note payable.......................................................................... 11,750
------------ -------------
Total borrowings.................................................................. 40,611
------------ -------------

Company obligated mandatorily redeemable preferred securities of
subsidiary trust holding solely junior subordinated debentures(1)..................... 23,000
------------ -------------

Stockholders' Equity:
Preferred stock, 20,000,000 shares authorized; no shares issued and outstanding....... --
Common stock, 50,000,000 shares authorized; 7,579,667 shares issued and
outstanding(2); and shares issued and outstanding as adjusted(2)........ 1,520
Retained earnings..................................................................... 22,904
Accumulated other comprehensive income (loss)......................................... (96)
------------ -------------

Total stockholders' equity........................................................ 24,328
------------ -------------

Consolidated Regulatory Capital Ratios:
Tier 1 leverage ratio................................................................. 5.64% %
Tier 1 risk-based capital ratio....................................................... 5.73
Total risk-based capital ratio........................................................ 9.30

- ---------------

(1) FW Capital I, formed by us, holds as its sole asset $23.7 million principal
amount of junior subordinated debentures issued by us. The junior
subordinated debentures will mature on February 16, 2029, which date may be
shortened by us to a date not earlier than February 16, 2004, if certain
conditions are met. See "Description of Capital Stock -- Securities of
Subsidiary Trust."
(2) Excludes 500,000 shares of common stock issuable upon exercise of all
options outstanding as of the date of this prospectus at an exercise price
of $12.00 per share.

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data below at December 31, 1998 and 1997 and
for the years ended December 31, 1998, 1997 and 1996 have been derived from our
consolidated financial statements, which have been audited by Clifton Gunderson
L.L.C., independent public accountants, and included elsewhere in this
prospectus. The selected consolidated financial data below at September 30,
1998, December 31, 1996 and 1995 and for the year ended December 31, 1995 are
based on our unaudited consolidated financial statements, which are not included
in this prospectus. The selected consolidated financial data at September 30,
1999 and for the nine months ended September 30, 1999 and 1998 are based on our
unaudited consolidated financial statements included elsewhere in this
prospectus. Management believes that the unaudited selected consolidated
financial data presented below reflect all adjustments, consisting solely of
normal recurring accruals, necessary for a fair presentation as of these dates
and for these periods. The operations data and ratios for the nine months ended
September 30, 1999 and 1998 do not necessarily mean that results for any other
period will be similar. You should read this data together with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and related notes included elsewhere in
this prospectus.

AT OR FOR THE NINE
AT OR FOR THE YEAR ENDED DECEMBER 31, MONTHS ENDED SEPTEMBER 30,
------------------------------------------------- --------------------------
1995 1996 1997 1998 1998 1999
---------- ---------- ---------- ---------- ----------- ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

STATEMENT OF INCOME DATA:
Interest income ........................ $ 6,544 $ 7,908 $ 16,263 $ 26,754 $ 18,715 $ 32,132
Interest expense ....................... 2,655 3,120 7,481 12,754 8,755 16,384
---------- ---------- ---------- ---------- ---------- ----------
Net interest income .................... 3,889 4,788 8,782 14,000 9,960 15,748
Provision for loan losses .............. 104 15 140 1,090 180 2,174
---------- ---------- ---------- ---------- ---------- ----------
Net interest income after provision
for loan losses ...................... 3,785 4,773 8,642 12,910 9,780 13,574
Non-interest income .................... 907 1,251 1,708 2,840 1,981 2,753
Non-interest expenses .................. 2,775 3,749 6,544 10,659 7,043 11,052
---------- ---------- ---------- ---------- ---------- ----------
Income before income taxes ............. 1,917 2,275 3,806 5,091 4,718 5,275
Income tax expense ..................... 475 705 1,309 1,716 1,765 1,825
---------- ---------- ---------- ---------- ---------- ----------
Net income ............................. $ 1,442 $ 1,570 $ 2,497 $ 3,375 $ 2,953 $ 3,450
========== ========== ========== ========== ========== ==========
Net income per common share--basic
and diluted .......................... $ 0.22 $ 0.24 $ 0.36 $ 0.46 $ 0.40 $ 0.46
Weighted average common shares
outstanding--basic and diluted ....... 6,559,529 6,559,529 7,018,696 7,346,673 7,346,673 7,527,891

BALANCE SHEET DATA:
Total assets ........................... $ 95,975 $ 125,013 $ 227,600 $ 367,207 $ 335,493 $ 608,144
Loans .................................. 45,580 68,751 165,627 289,989 248,347 515,843
Allowance for loan losses .............. 767 851 1,321 2,187 1,592 4,364
Investment securities .................. 34,783 31,788 28,512 34,228 44,351 45,515
Deposits ............................... 78,041 101,387 200,294 319,480 294,044 516,466
Stockholders' equity ................... 12,244 13,749 16,911 20,706 19,868 24,328

Book value per share ................... 1.87 2.10 2.30 2.82 2.70 3.21
Tangible book value per share .......... 1.87 2.10 2.18 2.70 2.59 3.11

AT OR FOR THE NINE
AT OR FOR THE YEAR ENDED DECEMBER 31, MONTHS ENDED SEPTEMBER 30,
---------------------------------------- --------------------------
1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

KEY RATIOS:(1)
Net interest margin(2) .................... 5.11% 5.36% 5.27% 5.32% 5.49% 4.77%
Net interest spread(2) .................... 4.15 4.24 4.39 4.56 4.73 4.17
Return on average assets .................. 1.63 1.52 1.35 1.18 1.49 0.97
Return on average common equity ........... 11.78 11.42 16.31 17.94 21.47 20.23
Operating expenses to average assets ...... 2.58 3.64 3.53 3.72 3.48 3.11
Efficiency ratio(3) ....................... 57.85 62.08 61.82 62.92 58.58 59.48
Nonperforming assets to total assets ...... 0.14 0.10 0.60 0.30 0.44 0.22
Nonperforming loans to total loans ........ 0.30 0.17 0.74 0.32 0.28 0.24
Allowance for loan losses to total loans... 1.68 1.24 0.80 0.75 0.69 0.85
Allowance for loan losses to
nonperforming loans ..................... 555.80 739.65 107.57 236.94 229.73 348.00
Net charge-offs (recoveries) to
average loans ........................... 0.48 (0.13) (0.04) 0.10 (0.05) 0.00
Tier 1 leverage ratio ..................... 12.76 12.95 7.53 5.70 6.20 5.64
Tier 1 risk-based capital ratio ........... 21.01 17.36 9.02 6.44 7.22 5.73
Total risk-based capital ratio ............ 22.21 18.36 9.74 7.22 7.80 9.30

- ---------------

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated
financial statements and related notes included elsewhere in this prospectus.
Our future operating results may be affected by various trends and factors which
are beyond our control. These include the factors set forth in "Risk Factors"
and elsewhere in this prospectus. Past results and trends may not be reliable
indicators of future results or trends. With the exception of historical
information, the matters discussed below include forward-looking statements that
involve risks and uncertainties.

OVERVIEW

We have experienced significant growth since 1995 primarily due to our start-up
branch expansion strategy. To date, we have opened 13 locations and acquired two
locations. Total assets have increased to $608.1 million as of September 30,
1999, from $367.2 million as of December 31, 1998, $227.6 million as of December
31, 1997 and $125.0 million as of December 31, 1996. Net income was $3.5 million
for the nine months ended September 30, 1999, $3.4 million for the year ended
December 31, 1998, $2.5 million for 1997 and $1.6 million for 1996. We have
increased our net income while opening new branches and absorbing branch start
up costs. Our new branches typically take up to one year to achieve
profitability. Our return on average common equity was 17.94% for 1998, 16.31%
for 1997 and 11.42% for 1996. For the nine months ended September 30, 1999, our
return on average common equity was 20.23% and was 21.47% for the same period in
1998. Our return on average assets was 1.18% for 1998, 1.35% for 1997 and 1.52%
for 1996. For the nine months ended September 30, 1999, our return on average
assets was 0.97% and was 1.49% for the same period in 1998. The decrease in our
return on average assets since 1995 primarily has been attributable to our
significant asset growth and a change in our deposit funding mix. Our return on
average assets has been further negatively impacted by loan loss allowance
increases which we have incurred since the fourth quarter of 1998 and the first
quarter of 1999 when we implemented our revised loan loss reserve methodology.

RESULTS OF OPERATIONS

NET INTEREST INCOME. Our net income is derived primarily from net interest
income. Net interest income is the difference between interest income,
principally from loans, investment securities and funds sold, and interest
expense, principally on customer deposits and other interest-bearing
liabilities. Changes in net interest income result from changes in volume, net
interest spread and net interest margin. Volume refers to the average dollar
levels of earning assets and interest-bearing liabilities. Net interest spread
refers to the difference between the average yield on earning assets and the
average cost of interest-bearing liabilities. Net interest margin refers to net
interest income divided by average earning assets and is influenced by the level
and relative mix of earning assets and interest-bearing liabilities and their
yields and rates.

The following table presents the average balances, net interest income and
expense and average yields and rates for our earning assets and interest-bearing
liabilities for the indicated periods on a tax equivalent basis assuming a 34%
tax rate. Yields and net interest margins for the nine month periods are
annualized.

YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1996 1997
--------------------------------- --------------------------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE EARNED YIELD AVERAGE EARNED YIELD
BALANCE OR PAID OR COST BALANCE OR PAID OR COST
-------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)

EARNING ASSETS:
Investment securities:
Taxable .................................. $ 23,189 $ 1,292 5.57% $ 22,190 $ 1,220 5.50%
Tax exempt (tax equivalent) .............. 8,573 767 8.95 8,393 678 8.07
Funds sold and interest-bearing
deposits ............................... 8,307 423 5.09 12,823 735 5.73
Loans held for sale ...................... 508 30 5.91 1,839 121 6.58
Loans(1) ................................. 54,515 5,656 10.38 126,914 13,739 10.83
Allowance for loan losses ................ (832) -- (1,176) --
-------- -------- -------- --------

Total earning assets ................. $ 94,260 $ 8,168 8.67 $170,983 $ 16,493 9.65
======== -------- ======== --------

INTEREST-BEARING LIABILITIES:
Interest-bearing deposits:
Demand, interest-bearing ................. $ 18,143 $ 467 2.57 $ 23,097 $ 630 2.73
Savings .................................. 14,894 594 3.99 18,897 795 4.21
Certificates of Deposit:
Under $100,000 ......................... 26,367 1,484 5.63 72,229 4,412 6.11
$100,000 and over ...................... 7,416 414 5.58 19,500 1,149 5.89
-------- -------- -------- --------

Total interest-bearing deposits .......... 66,820 2,959 4.43 133,723 6,986 5.22

Federal Home Loan Bank borrowings,
federal funds purchased and
securities sold under agreements
to repurchase ............................ 3,591 161 4.50 7,031 382 5.43

Note payable ............................... -- -- -- 1,500 113 7.53

Company obligated mandatorily
redeemable preferred securities of
subsidiary trust ......................... -- -- -- -- -- --
-------- -------- -------- --------

Total interest-bearing liabilities ... $ 70,411 3,120 4.43 $142,254 7,481 5.26
======== -------- ======== --------

Net interest income (tax equivalent) ......... $ 5,048 $ 9,012
======== ========

Net interest margin .......................... 5.36 5.27
Net interest spread .......................... 4.24% 4.39%

Ratio of average interest-bearing
liabilities to average earning assets ...... 74.70% 83.20%

- ---------------

(1) Loans are net of unearned loan fees. Nonaccrual loans are included in
average loans outstanding. Loan fees included in interest income were $2.4
million for 1998, $1.2 million for 1997 and $384,000 for 1996. Loan fees
included in interest income were $3.4 million for the nine months ended
September 30, 1999 and were $1.6 million for the nine months ended September
30, 1998.

YEAR ENDED DECEMBER 31,
-----------------------------------
1998
-----------------------------------
INTEREST AVERAGE
AVERAGE EARNED YIELD
BALANCE OR PAID OR COST
---------- ---------- -------
(DOLLARS IN THOUSANDS)

EARNING ASSETS:
Investment securities:
Taxable ...................................... $ 22,797 $ 1,224 5.37%
Tax exempt (tax equivalent) .................. 8,917 758 8.50
Funds sold and interest-bearing
deposits ................................... 16,147 870 5.39
Loans held for sale .......................... 3,327 193 5.80
Loans(1) ..................................... 218,214 23,967 10.98
Allowance for loan losses .................... (1,507) --
---------- ----------

Total earning assets ....................... $ 267,895 $ 27,012 10.08
========== ----------

INTEREST-BEARING LIABILITIES:
Interest-bearing deposits:
Demand, interest-bearing ..................... $ 31,240 $ 987 3.16
Savings ...................................... 23,657 1,043 4.41
Certificates of deposit:
Under $100,000 ............................. 126,396 7,751 6.13
$100,000 and over .......................... 35,349 2,103 5.95
---------- ----------

Total interest-bearing deposits .............. 216,642 11,884 5.49

Federal Home Loan Bank
borrowings, federal funds purchased
and securities sold under agreements
to repurchase .................................. 10,703 571 5.33

Note payable ................................... 3,846 299 7.77

Company obligated
mandatorily redeemable preferred
securities of subsidiary trust ................. -- -- --
---------- ----------

Total interest-bearing liabilities ......... $ 231,191 12,754 5.52
========== ----------

Net interest income (tax equivalent) ............. $ 14,258
==========

Net interest margin .............................. 5.32
Net interest spread .............................. 4.56%

Ratio of average interest-bearing liabilities
to average earning assets ...................... 86.30%

NINE MONTHS ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------
1998 1999
---------------------------------------- --------------------------------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE EARNED YIELD AVERAGE EARNED YIELD
BALANCE OR PAID OR COST BALANCE OR PAID OR COST
---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)

EARNING ASSETS:
Investment securities:
Taxable ................................... $ 20,073 $ 831 5.53% $ 38,016 $ 1,376 4.83%
Tax exempt (tax equivalent) ............... 8,849 560 8.46 8,850 591 8.90
Funds sold and interest-bearing
deposits ................................ 17,252 707 5.48 15,293 546 4.76
Loans held for sale ....................... 3,048 135 5.92 3,944 186 6.29
Loans(1) .................................. 199,450 16,672 11.18 381,829 29,634 10.35
Allowance for loan losses ............... (1,452) -- (2,351) --
---------- ---------- ---------- ----------

Total earning assets .................. $ 247,220 $ 18,905 10.22 $ 445,581 $ 32,333 9.68
========== ---------- ========== ----------

INTEREST-BEARING LIABILITIES:
Interest-bearing deposits:
Demand, interest-bearing .................. $ 28,900 $ 658 3.04 $ 60,167 $ 1,715 3.80
Savings ................................... 22,677 745 4.39 30,874 1,019 4.40
Certificates of Deposit:
Under $ 100,000 ......................... 116,821 5,376 6.15 215,170 9,216 5.71
$100,000 and over ....................... 31,567 1,406 5.95 53,421 2,315 5.78
---------- ---------- ---------- ----------

Total interest-bearing deposits ........... 199,965 8,185 5.47 359,632 14,265 5.29

Federal Home Loan Bank
borrowings, federal funds purchased
and securities sold under agreements
to repurchase ............................... 9,916 388 5.23 14,897 614 5.50

Note payable ................................ 3,156 182 7.71 2,533 150 7.90

Company obligated mandatorily
redeemable preferred securities of
subsidiary trust ............................ -- -- -- 19,342 1,360 9.38
---------- ---------- ---------- ----------

Total interest-bearing liabilities ...... $ 213,037 8,755 5.49 $ 396,404 16,389 5.51
========== ---------- ========== ----------

Net interest income (tax equivalent) .......... $ 10,150 $ 15,944
========== ==========

Net interest margin ........................... 5.49 4.77
Net interest spread ........................... 4.73% 4.17%

Ratio of average interest-bearing
liabilities to average earning assets ....... 86.17% 88.96%

- ---------------

Net interest income increased $5.8 million, or 57.1%, to $15.9 million for the
nine months ended September 30, 1999 compared to $10.2 million for the same
period in 1998. Interest income increased $13.4 million, or 71.0%, to $32.3
million for the nine months ended September 30, 1999 compared to $18.9 million
for same period in 1998. The interest income increase was primarily due to
higher balances of earning assets. Average earning assets increased $198.4
million, or 80.2%, to $445.6 million for the nine months ended September 30,
1999 from $247.2 million for the same period in 1998. The majority of the
increase in earning assets was attributable to a

$182.4 million increase in average loans outstanding. A large portion of the
loans in our loan portfolio have floating rates and are tied to the prime rate.
As a result of up to a 0.75% decrease in the average prime lending rate, the
average yield on earning assets decreased to 9.68% for the nine months ended
September 30, 1999 from 10.22% for the same period in 1998.

Interest expense increased $7.6 million, or 87.2%, to $16.4 million for the nine
months ended September 30, 1999 compared to $8.8 million for the same period in
1998. The increase was due to an increase in interest-bearing deposits,
principally in certificates of deposit. Average balances of certificates of
deposit under $100,000 increased $98.3 million, or 84.2%, to $215.2 million for
the nine months ended September 30, 1999 from $116.8 million for the same period
in 1998. This increase was due to growth at our banks, as well as promotional
campaigns. Average balances of certificates of deposit of $100,000 and over
increased $21.8 million, or 69.2%, to $53.4 million for the nine months ended
September 30, 1999, from $31.6 million for the same period in 1998. The increase
in certificates of deposit of $100,000 and over was due primarily to promotional
campaigns. The increase in the average note payable to $14.9 million for the
nine months ended September 30, 1999 from $9.9 million for the same period in
1998 was due to the payoff of our line of credit in February 1999 and the
subsequent reborrowing on the line of credit commencing in June 1999. The source
of payment on our line of credit was proceeds from our public offering of trust
preferred securities completed in February 1999. We intend to repay our line of
credit with net proceeds from the sale of the common stock offered by this
prospectus. The cost of interest-bearing liabilities for the nine months ended
September 30, 1999, increased to 5.51% compared to 5.49% for the same period in
1998 primarily due to a change in mix of interest-bearing liabilities, including
issuance of $23.0 million of our trust preferred securities in February 1999 and
an increase in the rates paid on interest-bearing demand accounts to 3.80% from
3.04%, which increase was partially offset by a reduction in costs of
certificates of deposit.

Net interest income increased $5.3 million, or 58.2%, to $14.3 million for 1998
compared to $9.0 million in 1997. The 1997 net interest income was an increase
of $4.0 million, or 78.5%, from $5.0 million in 1996. Interest income increased
$10.5 million, or 63.8%, to $27.0 million for 1998 compared to $16.5 million in
1997. The 1997 interest income was an increase of $8.3 million, or 101.9%, from
$8.2 million in 1996. The 1998 increases compared to 1997 resulted primarily
from an increase of $96.9 million in average earning assets, or 56.7%, to $267.9
million in 1998 from $171.0 million in 1997. The 1997 increases compared to 1996
resulted primarily from an increase of $76.7 million, or 81.4%, in average
earning assets to $171.0 million in 1997 from $94.3 million in 1996. The
majority of the asset growth in each of 1998 and 1997 compared to each prior
year was due to growth in our loan portfolio. Asset growth in 1997 was also
impacted by our acquisition of a two-branch savings bank in February 1997 which
was assimilated into our Colorado bank and had assets of $33 million at the time
of acquisition. Average loans in 1998 increased $91.3 million, or 71.9%, to
$218.2 million from $126.9 million in 1997. Average loans in 1997 increased
$72.4 million, or 133%, from $54.5 million in 1996. The average yield on earning
assets increased to 10.08% in 1998 from 9.65% in 1997. The average yield on
earning assets increased to 9.65% in 1997 from 8.67% in 1996. These yearly
increases resulted from increased percentages of our loan portfolio in the real
estate and construction categories.

Interest expense in 1998 increased $5.3 million, or 70.5%, to $12.8 million from
$7.5 million in 1997. Interest expense in 1997 increased $4.4 million, or 140%,
from $3.1 million in 1996. The increase in 1998 from 1997 was due to a $82.9
million increase, or a 62.0% increase, in average deposits. The majority of this
growth was realized in the certificate of deposit categories. A $57.9 million
increase in certificates of deposit accounted for $3.7 million of the increase
in 1997 compared to 1996. Certificates of deposit increased in 1997 compared to
1996 due to new branch additions. The cost of interest-bearing liabilities was
5.52% for 1998, 5.26% for 1997 and 4.43% for 1996. These increases were due
principally to increases in certificates of deposit as a percentage of total
liabilities and increased rates paid on certificates of deposit.

The following table illustrates, for the periods indicated, the changes in net
interest income on a tax-equivalent basis due to changes in volume and changes
in interest rates. Changes in net interest income due to both volume and rate
have been allocated to volume and rate in proportion to the relationship of the
absolute dollar amounts of the change in each.

YEAR END YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
------------------------- -------------------------- ------------------------------
1996 COMPARED TO 1997 1997 COMPARED TO 1998 1998 COMPARED TO 1999
------------------------- -------------------------- -----------------------------
INCREASE (DECREASE) IN INCREASE (DECREASE) IN INCREASE (DECREASE) IN
NET INTEREST INCOME NET INTEREST INCOME NET INTEREST INCOME
DUE TO CHANGE IN DUE TO CHANGE IN DUE TO CHANGE IN
------------------------- -------------------------- ------------------------------
VOLUME RATE TOTAL VOLUME RATE TOTAL VOLUME RATE TOTAL
------- ---- -------- -------- ---- -------- -------- -------- -------
(DOLLARS IN THOUSANDS)

EARNING ASSETS:
Investment securities
Taxable ................................ $ (55) $(17) $ (72) $ 32 $(28) $ 4 $ 649 $ (104) $ 545
Tax exempt (tax equivalent) ............ (16) (73) (89) 45 35 80 -- 31 31
Funds sold and interest-bearing
deposits ............................. 253 59 312 179 (44) 135 (70) (91) (161)
Loans held for sale .................... 87 4 91 86 (14) 72 42 9 51
Loans .................................. 7,827 256 8,083 10,032 196 10,228 14,152 (1,190) 12,962
------- ---- -------- -------- ---- -------- -------- -------- -------

Total earning assets ................. 8,096 229 8,325 10,374 145 10,519 14,773 (1,345) 13,428
------- ---- -------- -------- ---- -------- -------- -------- -------

INTEREST-BEARING LIABILITIES:
Demand, interest bearing ............... 134 29 163 257 100 357 891 166 1,057
Savings ................................ 167 34 201 210 38 248 271 3 274
Certificates of deposit:
Under $100,000 ....................... 2,791 137 2,928 3,323 16 3,339 4,213 (373) 3,840
$100,000 and over .................... 711 24 735 942 11 953 947 (38) 909

Federal Home Loan Bank
borrowings, federal funds
purchased and securities sold
under agreements to repurchase ......... 181 40 221 196 (7) 189 205 21 226

Company obligated mandatorily
redeemable preferred securities
of subsidiary trust .................... -- -- -- -- -- -- 1,360 -- 1,360

Note payable ........................... 113 -- 113 182 4 186 (37) 5 (32)
------- ---- -------- -------- ---- -------- -------- -------- -------

Total interest-bearing liabilities ... 4,097 264 4,361 5,110 162 5,272 7,850 (216) 7,634
------- ---- -------- -------- ---- -------- -------- -------- -------

Net increase (decrease) in net
interest income (tax equivalent) ...... $ 3,999 $(35) $ 3,964 $ 5,264 $(17) $ 5,246 $ 6,923 $ (1,129) $ 5,794
======= ==== ======== ======== ==== ======== ======== ======== =======

PROVISION FOR LOAN LOSSES. In response to a sustained significant growth rate in
our loan portfolio, we reviewed and revised our methodology for estimating the
adequacy of the allowance for loan losses in the fourth quarter of 1998. The
methodology was further revised in the first quarter of 1999. We believe this
new methodology will permit a closer match between period provisions for loan
losses and period loan originations. Key components of this revised methodology
included:

o estimation of inherent losses due to increasing growth in period loan
origination;

o estimated collectibility and prior loss experience of loans and
commitments to extend credit;

o changes in the nature and volume of the loan portfolio;

o quality of the overall loan portfolio;

o loan concentrations;

o specific problem loans and commitments; and

o current economic conditions that may affect a borrower's ability to pay.

During the nine months ended September 30, 1999, the provision for loan losses
increased $2.0 million, or 1108%, to $2.2 million from $180,000 in the same
period in 1998. During 1998, the provision for loan losses increased $950,000,
or 679%, to $1.09 million from $140,000 in 1997. The 1997 provision for loan
losses increased $125,000, or 833%, from $15,000 in 1996. We anticipate
continuing increases period over period in the provision for loan losses in
response to growth in our loan portfolio and other factors as management deems
appropriate.

NON-INTEREST INCOME. The following table presents our non-interest income for
the indicated periods.

NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------- ------------------------------
1996 1997 1998 1998 1999
----------- ------------- ------------ ------------- -------------
(IN THOUSANDS)

Fees for customer services....... $ 627 $ 761 $ 1,015 $ 726 $ 1,431
Net gains from sale of loans..... 232 625 1,036 716 672
Commissions and fees from
brokerage activities........... 15 29 220 133 248
Investment securities
transactions, net.............. 196 -- (4) (3) --
Other operating income........... 181 293 573 409 402
----------- ------------- ------------ ------------- -------------
Total non-interest income.. $ 1,251 $ 1,708 $ 2,840 $ 1,981 $ 2,753
=========== ============= ============ ============= =============

During the nine months ended September 30, 1999, total non-interest income
increased $772,000, or 39.0%, to $2.8 million from $2.0 million for the
comparable period in 1998. Non-interest income for 1998 compared to 1997
increased by $1.1 million, or 66.3%. Non-interest income for 1997 compared to
1996 increased by $457,000, or 36.5%. The increases for all periods were due
primarily to additional customer accounts at our branches, continued demand for
residential mortgages that were originated and sold by us into the secondary
market and the expansion of our investment brokerage services into additional
branch locations.

NON-INTEREST EXPENSES. The following table presents non-interest expenses for
the indicated periods.

YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
-------------------------------------------- ------------------------------
1996 1997 1998 1998 1999
----------- ------------- ------------ ------------- -------------
(IN THOUSANDS)

Salaries and employee benefits... $ 1,950 $ 3,296 $ 5,489 $ 3,545 $ 5,851
Net occupancy expense
of premises.................... 464 989 1,616 1,107 1,620
Purchased services............... 327 842 1,342 906 1,324
Office supplies.................. 137 182 318 233 347
Minority interest in income of
consolidated subsidiaries...... 184 101 111 93 --
Other operating expenses......... 687 1,134 1,783 1,159 1,910
----------- ------------- ------------ ------------- -------------
Total non-interest expenses $ 3,749 $ 6,544 $ 10,659 $ 7,043 $ 11,052
=========== ============= ============ ============= =============

During the nine months ended September 30, 1999, total non-interest expenses
increased $4.0 million, or 56.9%, to $11.1 million from $7.0 million in the same
1998 period, primarily as a result of staff, facility and operating expenses
associated with operating six additional branch locations. Salaries and employee
benefits increased by $2.3 million due to staffing of new branch locations,
additions of corporate overhead and increases in the volume

of commission-based mortgage lending. The increase in net occupancy expenses was
a direct result of the increased number of branches. Purchased services included
outside services, primarily data processing, purchased by us to conduct
operations. Expenses for purchased services increased as a result of additional
branches. During 1998, total non-interest expenses increased $4.1 million, or
62.9%, to $10.7 million from $6.5 million in 1997, with increases occurring
among the various components due primarily to the establishment of additional
branches and other internally generated growth. During 1997, total non-interest
expenses increased $2.8 million, or 74.6% to $6.5 million from $3.7 million in
1996, with increases occurring among the various components due primarily to our
purchase of a savings bank, the establishment of an additional branch and other
internally generated growth.

INCOME TAX EXPENSE. Our consolidated income tax rate varies from statutory rates
principally due to interest income from tax-exempt securities. The provision for
income taxes increased by $60,000 to $1.8 million for the nine months ended
September 30, 1999 from $1.8 million for the comparable period in 1998. The 1998
figures included a prior period adjustment of $100,000 for 1997 state tax
expense. We recorded income tax expenses totaling $1.7 million in 1998, $1.3
million in 1997 and $705,000 in 1996.

FINANCIAL CONDITION

LOAN PORTFOLIO COMPOSITION. The following table presents the composition of our
loan portfolio by type of loan at the dates indicated. Management believes that
the balance sheet information as of the dates indicated should be read in
conjunction with the average balance information in the tables above under "--
Results of Operations -- Net Interest Income."

DECEMBER 31,
-----------------------------------------------------------------------------------------------
1995 1996 1997 1998
-------------------- -------------------- -------------------- --------------------
AMOUNT % AMOUNT % AMOUNT % AMOUNT %
---------- ------ ---------- ------ ---------- ------ ---------- ------
(DOLLARS IN THOUSANDS)

Commercial, financial
and agricultural(1) ...... $ 22,331 49.8% $ 27,343 40.3% $ 41,500 25.3% $ 51,990 18.1%
Construction ............... * -- 10,062 14.8 37,235 22.7 85,782 29.8
Real estate ................ 18,880 42.1 25,946 38.2 79,499 48.4 141,955 49.3
Installment loans
to individuals ........... 4,234 9.5 5,226 7.7 7,693 4.7 11,057 3.8
Other ...................... 236 0.5 332 0.5 132 0.0 91 0.0
---------- ------ ---------- ------ ---------- ------ ---------- ------
Gross loans receivable ... 45,681 101.9 68,909 101.5 166,059 101.1 290,875 101.0
Less unearned loan fees .. (101) (0.2) (158) (0.2) (432) (0.3) (886) (0.3)
---------- ------ ---------- ------ ---------- ------ ---------- ------
Subtotal ............... 45,580 101.7 68,751 101.3 165,627 100.8 289,989 100.7

Less allowance for
loan losses .......... (767) (1.7) (851) (1.3) (1,321) (0.8) (2,187) (0.7)
---------- ------ ---------- ------ ---------- ------ ---------- ------

Net loans receivable $ 44,813 100.0% $ 67,900 100.0% $ 164,306 100.0% $ 287,802 100.0%
========== ====== ========== ====== ========== ====== ========== ======

SEPTEMBER 30,
1999
------------------------------------
AMOUNT %
---------------- --------------
(DOLLARS IN THOUSANDS)

Commercial, financial and agricultural(1)..................... $ 79,781 15.6%
Construction.................................................. 120,525 23.6
Real estate................................................... 301,834 59.0
Installment loans to individuals.............................. 15,312 3.0
Other......................................................... 97 0.0
---------------- --------------
Gross loans receivable...................................... 517,549 101.2
Less unearned loan fees..................................... (1,706) (0.3)
---------------- --------------
Subtotal.................................................. 515,843 100.9
Less allowance for loan losses............................ (4,364) (0.9)
---------------- --------------

Net loans receivable.................................... $ 511,479 100.0%
================ ==============

- ---------------

* In 1995, construction loans were not classified separately from real estate
loans.
(1) Agricultural loan balances were $17.2 million at September 30, 1999, $14.7
million at December 31, 1998 and $13.9 million at December 31, 1997.

Net loans receivable of $511.5 million as of September 30, 1999 were $223.7
million, or 77.7%, greater than net loans receivable of $287.8 million as of
December 31, 1998. Our two primary categories of loans, real estate loans and
construction loans, which constituted 82.6% of net loans receivable as of
September 30, 1999, in the aggregate increased as a percentage of total loans in
the periods indicated. The aggregate of real estate and construction loans
totaled $422.4 million as of September 30, 1999, $194.7 million, or 85.5%, over
the $227.7 million balance as of December 31, 1998, which in turn was $111.0
million, or 95.1%, greater than these loans as of December 31, 1997. The
significant loan portfolio growth over the indicated periods was due primarily
to our strategy of branch expansion and hiring and retaining experienced bank
personnel who possessed existing customer relationships.

Historically, we have had a high loan to deposit ratio. At September 30, 1999,
net loans totaled 99.0% of total deposits and 84.1% of total assets. At December
31, 1998, net loans totaled 90.1% of total deposits and 78.4% of total assets.

23
27

LOAN MATURITIES. The following tables present loans by maturity in each major
category of our portfolio at the dates indicated. Unearned loan fee income has
been matched with its respective loan categories and assigned to maturity
categories consistent with the underlying loans. Actual maturities may differ
from the contractual maturities shown below as a result of renewals and
prepayments. Loan renewals are evaluated in the same manner as new credit
applications. Additional information regarding our real estate loan portfolio is
provided in "Business -- Lending Activities." A significant portion of our loan
portfolio has maturities of one year or less. In the event these loans are
renewed, they are subject to the same credit evaluation and other underwriting
criteria as are new loan applications, and are subject to new terms and
conditions as deemed appropriate by our lending personnel.

DECEMBER 31, 1997
--------------------------------------------------------------------------------
OVER ONE YEAR
THROUGH FIVE YEARS OVER FIVE YEARS
ONE YEAR -------------------------- --------------------------
OR LESS FIXED RATE FLOATING RATE FIXED RATE FLOATING RATE TOTAL
-------- ---------- ------------- ---------- ------------- ---------
(IN THOUSANDS)

Commercial, financial and
agricultural.................... $ 24,601 $ 3,329 $ 8,959 $ 172 $ 4,292 $ 41,353
Construction...................... 34,827 360 2,048 -- -- 37,235
Real estate....................... 11,727 13,869 20,759 7,974 24,885 79,214
Installment loans to individuals
and other....................... 3,192 3,274 972 294 93 7,825
-------- ---------- ------------- ---------- ------------- ---------
Total loans................. $ 74,347 $ 20,832 $ 32,738 $ 8,440 $ 29,270 $ 165,627
======== ========== ============= ========== ============= =========

DECEMBER 31, 1998
--------------------------------------------------------------------------------
OVER ONE YEAR
THROUGH FIVE YEARS OVER FIVE YEARS
ONE YEAR -------------------------- --------------------------
OR LESS FIXED RATE FLOATING RATE FIXED RATE FLOATING RATE TOTAL
-------- ---------- ------------- ---------- ------------- ---------
(IN THOUSANDS)

Commercial, financial and
agricultural.................... $ 28,120 $ 4,832 $ 14,487 $ 569 $ 3,982 $ 51,990
Construction...................... 74,211 280 10,955 -- -- 85,446
Real estate....................... 26,454 20,906 52,062 3,190 38,793 141,405
Installment loans to individuals
and other....................... 1,060 4,739 4,315 518 516 11,148
-------- ---------- ------------- ---------- ------------- ---------
Total loans................. $129,845 $ 30,757 $ 81,819 $ 4,277 $ 43,291 $ 289,989
======== ========== ============= ========== ============= =========

SEPTEMBER 30, 1999
--------------------------------------------------------------------------------
OVER ONE YEAR
THROUGH FIVE YEARS OVER FIVE YEARS
ONE YEAR -------------------------- --------------------------
OR LESS FIXED RATE FLOATING RATE FIXED RATE FLOATING RATE TOTAL
-------- ---------- ------------- ---------- ------------- ---------
(IN THOUSANDS)

Commercial, financial and
agricultural.................... $ 43,440 $ 8,783 $ 22,434 $ 649 $ 4,475 $ 79,781
Construction...................... 107,085 1,874 8,606 -- 2,465 120,030
Real estate....................... 104,101 37,161 59,039 24,835 75,487 300,623
Installment loans to individuals
and other....................... 2,432 10,937 1,121 572 347 15,409
-------- ---------- ------------- ---------- ------------- ---------
Total loans................. $257,058 $ 58,755 $ 91,200 $ 26,056 $ 82,774 $ 515,843
======== ========== ============= ========== ============= =========

NONPERFORMING ASSETS. Nonperforming assets consist of loans 90 days or more
delinquent and still accruing interest, nonaccrual loans, restructured loans and
other real estate. When, in the opinion of management, a reasonable doubt exists
as to the collectibility of interest, regardless of the delinquency status of a
loan, the accrual of interest income is discontinued and accrued but unpaid
interest is reversed through a charge to current year's earnings. While a loan
is on nonaccrual status, interest income is recognized only upon receipt and
then only if, in the judgment of management, there is no reasonable doubt as to
the collectibility of the principal balance. Loans 90 days or more delinquent
generally are placed on nonaccrual status, unless the loan is in the

24
28

process of collection and management determines that full collection of
principal and accrued interest is probable.

Restructured loans are those for which concessions, including the reduction of
interest rates below a rate otherwise available to the borrower or the deferral
of interest or principal, have been granted due to the borrower's weakened
financial condition. Interest on restructured loans is accrued at the
restructured rates when it is anticipated that no loss of original principal
will occur. We did not have any restructured loans as of the dates indicated in
the table below.

The following table presents information concerning nonperforming assets at the
dates indicated:

DECEMBER 31, SEPTEMBER 30,
------------------------------------ ------------
1995 1996 1997 1998 1999
------ ------ ------ ------ ------------
(DOLLARS IN THOUSANDS)

Nonperforming Loans:
Nonaccrual loans ................... $ 110 $ 93 $ 484 $ 635 $ 705
Other loans 90 days past due ....... 28 22 744 288 550
------ ------ ------ ------ ------
Total nonperforming loans ...... 138 115 1,228 923 1,255
Other real estate .................. -- 10 141 172 91
------ ------ ------ ------ ------

Total nonperforming assets .. $ 138 $ 125 $1,369 $1,095 $1,346
====== ====== ====== ====== ======

Ratio of total nonperforming
loans to total loans ........... 0.30% 0.17% 0.74% 0.32% 0.24%

Ratio of total nonperforming
assets to total loans plus
other real estate ............... 0.30 0.18 0.83 0.38 0.26

Ratio of nonperforming assets
to total assets ................ 0.14 0.10 0.60 0.30 0.22

As of each of the dates in the table above, there were no significant amount of
loans excluded from nonperforming loans, where known information about possible
credit problems of borrowers caused management to have serious doubts as to the
ability of the borrowers to comply with the present loan repayment terms and
which may have resulted in the loans becoming nonperforming.

ANALYSIS OF ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses represents
management's recognition of the risks of extending credit and its evaluation of
the quality of the loan portfolio. The allowance for loan losses is established
and maintained through a provision for loan losses charged to income. Loans are
charged against the allowance for loan losses when management believes that the
collectibility of the principal is unlikely or, with respect to consumer
installment loans, according to an established delinquency schedule. The
allowance is an amount that management believes will be adequate to absorb
losses inherent in existing loans and commitments to extend credit, based on
evaluations of the collectibility and prior loss experience of loans and
commitments to extend credit. The evaluations also take into consideration such
factors as changes in the nature and volume of the loan portfolio, the overall
portfolio quality, loan concentrations, specific problem loans and commitments,
and current and anticipated economic conditions that may affect a borrower's
ability to pay.

25
29

The following table presents information regarding changes in the allowance for
loan losses for the periods indicated.

NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------ -------------------------
1995 1996 1997 1998 1998 1999
---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)

Average total loans ....................... $ 41,964 $ 54,515 $ 126,914 $ 218,214 $ 199,450 $ 381,829
========== ========== ========== ========== ========== ==========

Total loans at end of period .............. $ 45,580 $ 68,751 $ 165,627 $ 289,989 $ 248,347 $ 515,843
========== ========== ========== ========== ========== ==========

Allowance for loan losses at
beginning of period ..................... $ 870 $ 767 $ 851 $ 1,321 $ 1,321 $ 2,187

Charge-offs:
Commercial, financial and
agricultural .......................... 232 9 -- 344 14 5
Construction ............................ -- -- -- -- -- --
Real estate ............................. 14 10 -- -- -- --
Installment loans to individuals ........ 28 3 58 54 54 32
---------- ---------- ---------- ---------- ---------- ----------

Total charge-offs ................... 274 22 58 398 68 37

Recoveries:
Commercial, financial and
agricultural .......................... 52 86 94 51 39 27
Construction ............................ -- -- -- -- -- --
Real estate ............................. -- -- 10 101 100 1
Installment loans to individuals ........ 19 5 7 22 20 12
---------- ---------- ---------- ---------- ---------- ----------

Total recoveries .................... 71 91 111 174 159 40
---------- ---------- ---------- ---------- ---------- ----------

Net charge-offs (recoveries) .............. 203 (69) (53) 224 (91) (3)

Provision for loan losses ................. 100 15 140 1,090 180 2,174

Allowance for loan losses balance
of purchased financial institution(1) ... -- -- 277 -- -- --
---------- ---------- ---------- ---------- ---------- ----------

Allowance for loan losses at end
of period ............................... $ 767 $ 851 $ 1,321 $ 2,187 $ 1,592 $ 4,364
========== ========== ========== ========== ========== ==========

Ratio of net charge-offs (recoveries)
to average total loans .................. 0.48% (0.13)% (0.04)% 0.10% (0.05)% (0.00)%

Allowance for loan losses to total
loans at end of period .................. 1.68 1.24 0.80 0.75 0.64 0.85

Allowance for loan losses to
nonperforming loans ..................... 556 739 108 237 230 348

- ---------------

(1) In February 1997, we acquired 100% of First Northern Savings Bank, including
approximately $30 million in loans. There were no purchase accounting
adjustments recorded regarding the allowance for loan losses in connection
with this transaction.

The following table presents an allocation of the allowance for loan losses by
loan category as of the dates indicated. Portions of the allowance for loan
losses have been allocated to categories based on an analysis of the status of
particular loans; however, the majority of the allowance is used as a single
unallocated allowance available for all loans. The allocation table should not
be interpreted as an indication of the specific amounts, by loan classification,
to be charged to the allowance for loan losses. Management believes that the
table may be a useful device for assessing the adequacy of the allowance for
loan losses as a whole. The table has been derived in part by applying
historical loan loss ratios to both internally classified loans and the
portfolio as a whole in determining the allocation of the loan losses
attributable to each category of loans.

DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------------------------------- --------------------
1995 1996 1997 1998 1999
-------------------- -------------------- -------------------- -------------------- --------------------
LOANS IN LOANS IN LOANS IN LOANS IN LOANS IN
CATEGORY CATEGORY CATEGORY CATEGORY CATEGORY
AS A AS A AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
AMOUNT OF TOTAL AMOUNT OF TOTAL AMOUNT OF TOTAL AMOUNT OF TOTAL AMOUNT OF TOTAL
OF GROSS OF GROSS OF GROSS OF GROSS OF GROSS
ALLOWANCE LOANS ALLOWANCE LOANS ALLOWANCE LOANS ALLOWANCE LOANS ALLOWANCE LOANS
--------- ---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------
(DOLLARS IN THOUSANDS)

Commercial, financial
and agricultural... $ 20 48.9% $ 2 39.9% $ 16 25.0% $ 158 17.9% $ 117 15.5%
Construction......... * -- -- 14.7 68 22.4 10 29.5 50 23.4
Real estate.......... -- 41.3 19 37.8 47 47.9 29 48.8 53 58.1
Installment loans to
individuals........ -- 9.8 8 7.6 33 4.7 12 3.8 49 3.0
Unallocated.......... 747 -- 822 -- 1,157 -- 1,978 -- 4,095 --
--------- ---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------

Total allowance... $ 767 100.0% $ 851 100.0% $ 1,321 100.0% $ 2,187 100.0% $ 4,364 100.0%
========= ========== ========= ========== ========= ========== ========= ========== ========= ==========

- ---------------

* In 1995, construction loans were not classified separately from real estate
loans.

The total allowance for loan losses balance at September 30, 1999 was $4.4
million or 348% of nonperforming loans, and the portion of the loan loss
allowance directly allocated to specific loan categories was 21.4% of
nonperforming loans. The total allowance for loan losses balance at December 31,
1998 was $2.2 million or 237% of nonperforming loans, and the portion of the
loan loss allowance directly allocated to specific loan categories was 23.0% of
nonperforming loans.

INVESTMENTS. Our investment policy is designed to ensure liquidity for cash flow
requirements; to help manage interest rate risk; to ensure collateral is
available for public deposits, Federal Home Loan Bank advances and repurchase
agreements; and to manage asset quality diversification. The asset/liability
committees of each of our banks are responsible for implementing our investment
strategy, including ongoing review of the performance of the investment
portfolio, market values, market conditions, current economic conditions,
profitability, capital ratios, liquidity needs and collateral positions with the
Federal Home Loan Bank.

Our investment portfolio at September 30, 1999 was comprised of U.S. Treasury
and U.S. agency bonds and bills and general obligation and revenue municipal
bonds. The portfolio also included equity securities comprised of Federal Home
Loan Bank stock, correspondent bank stock and the stock of a small number of
publicly held bank holding companies. The portfolio contained no derivatives,
structured notes or similar instruments classified as high-risk securities as
defined by the Federal Financial Institutions Examinations Council.

27
31

The following table presents the estimated fair value of the available-for-sale
securities and the amortized cost basis of held-to-maturity securities in our
investment portfolio by type as of the dates indicated.

DECEMBER 31, SEPTEMBER 30,
------------------------------ ------------
1996 1997 1998 1999
-------- -------- -------- ------------
(IN THOUSANDS)

HELD-TO-MATURITY:
U.S. Treasury &
agency securities .................. $ 8,495 $ 5,807 $ -- $ --
State and political securities ....... 7,136 7,235 7,146 6,154
Other bonds .......................... 504 -- -- --
-------- -------- -------- ------------

Total held-to-maturity ........... 16,135 13,042 7,146 6,154
-------- -------- -------- ------------

AVAILABLE-FOR-SALE:
U.S. Treasury & agency securities .... 13,191 11,986 23,085 34,925
State and political securities ....... 1,445 1,611 2,228 2,428
Other bonds .......................... 556 201 23 --
Equity securities .................... 461 1,672 1,746 2,008
-------- -------- -------- ------------

Total available-for-sale ......... 15,653 15,470 27,082 39,361
-------- -------- -------- ------------

Total investments .......... $ 31,788 $ 28,512 $ 34,228 $ 45,515
======== ======== ======== ============

INVESTMENT MATURITIES AND YIELD. The following table presents the estimated fair
value of the available-for-sale securities and the amortized cost basis of
held-to-maturity securities with the approximate weighted yield of the
securities in the investment portfolio by type and stated maturity at September
30, 1999.

SEPTEMBER 30, 1999
---------------------------------------------------------------------------------
OVER ONE YEAR OVER 5 YEARS
ONE YEAR OR LESS THROUGH 5 YEARS THROUGH 10 YEARS OVER 10 YEARS
------------------ ------------------ ------------------ ------------------
WEIGHTED WEIGHTED WEIGHTED WEIGHTED
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
-------- ----- -------- ----- -------- ----- -------- -----
(DOLLARS IN THOUSANDS)

U.S. treasury & agency
securities ...................... $ 5,496 5.22% $ 26,368 6.57% $ 2,950 7.34% $ 111 6.55%
Municipal securities .............. 234 4.78 3,747 5.10 840 5.56 3,761 6.17
-------- -------- -------- --------

Total investments in debt
securities .................. $ 5,730 5.18% $ 30,115 6.39% $ 3,790 7.01% $ 3,872 6.18%
======== ======== ======== ========

DEPOSITS. Our primary source of funds has historically been deposits,
principally certificates of deposit. For the nine months ended September 30,
1999, total average certificates of deposit were $268.6 million or 66.1% of
average total deposits. Deposits have grown significantly in recent years, with
total deposits increasing to $516.5 million at September 30, 1999 from $319.5
million at December 31, 1998, $200.3 million at December 31, 1997 and $101.4
million at December 31, 1996. These increases were primarily a result of
acquiring two branches in 1997, opening four branches in 1998 and opening four
branches in the first nine months of 1999. To attract deposits, we regularly
conduct promotional campaigns. Additionally, we use the national certificates of
deposit market to generate time deposits of specific maturities as part of our
overall asset/liability management.

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The following table presents the average balances for each major category of
deposits and the weighted average interest rates paid for interest-bearing
deposits for the periods indicated.

YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------------- --------------------------------------
1996 1997 1998 1998 1999
----------------- ------------------ ----------------- ------------------ ------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
AVERAGE INTEREST AVERAGE INTEREST AVERAGE INTEREST AVERAGE INTEREST AVERAGE INTEREST
BALANCE RATE BALANCE RATE BALANCE RATE BALANCE RATE BALANCE RATE
------- -------- -------- -------- ------- -------- --------- -------- -------- --------
(DOLLARS IN THOUSANDS)

Demand, interest-bearing.. $10,743 2.10% $ 12,184 2.09% $ 13,182 2.07% $ 13,008 2.08% $ 18,885 2.12%
Money market accounts..... 7,400 3.25 10,913 3.43 18,058 3.95 15,892 3.83 41,282 4.57
Savings................... 9,285 3.12 11,413 3.15 12,970 3.12 12,635 3.12 15,558 3.17
IRA deposits.............. 5,609 5.43 7,484 5.82 10,687 5.97 10,042 5.99 15,316 5.65
Certificates of deposit:
Under $100,000.......... 26,367 5.63 72,229 6.11 126,396 6.13 116,821 6.15 215,170 5.71
$100,000 and over....... 7,416 5.58 19,500 5.89 35,349 5.95 31,567 5.95 53,421 5.78
------- -------- -------- --------- --------

Total interest-bearing
deposits............. 66,820 4.43% 133,723 5.22% 216,642 5.49% 199,965 5.47% 359,632 5.29%

Noninterest-bearing demand
deposits................ 17,124 24,654 33,845 31,765 46,773
------- -------- -------- --------- --------

Total deposits...... $83,944 $158,377 $250,487 $ 231,730 $406,405
======= ======== ======== ========= ========

The following table presents the amount and maturity of IRA deposits and
certificates of deposit that had balances of $100,000 or more at September 30,
1999.

REMAINING MATURITY: (IN THOUSANDS)

Three months or less................................................. $14,367
Over three months through six months................................. 15,370
Over six months through 12 months.................................... 19,826
Over 12 months....................................................... 26,568
------
Total............................................................ $76,131
=======

SHORT-TERM BORROWINGS. We use a revolving line of credit as well as securities
sold under agreements to repurchase as sources of short-term funding. The
outstanding balance on our line of credit at September 30, 1999 was $11.8
million. In June 1999 we began to draw on our line of credit to fund the growth
of our Colorado bank. Advances from our line of credit have been contributed
into our Colorado bank as capital. Prior to completion of this offering we
expect to continue to draw on our line of credit to fund capital needs of our
Colorado bank. We expect that the maximum balance of $15.0 million will be
outstanding at December 31, 1999. We intend to use a portion of the net proceeds
of this offering to repay our line of credit.

FEDERAL HOME LOAN BANK BORROWINGS. Our banks are members of the Federal Home
Loan Bank of Topeka, which is one of 12 regional Federal Home Loan Banks. The
Federal Home Loan Bank system functions as a central bank providing credit for
members. As members of the Federal Home Loan Bank, our banks are entitled to
borrow funds from the Federal Home Loan Bank and are required to own Federal
Home Loan Bank stock in an amount determined by a formula based upon total
assets and Federal Home Loan Bank borrowings. Our banks may use Federal Home
Loan Bank borrowings to supplement deposits as a source of funds. See "Liquidity
- --Asset/Liability Management." Average Federal Home Loan Bank borrowings for the
nine months ended September 30, 1999 were $8.6 million compared to $8.7 million
for the year ended December 31, 1998, $4.2 million for 1997 and $0 for 1996. At
September 30, 1999, based on our Federal Home Loan Bank stockholdings, the
aggregate available and unused borrowing capacity of our banks was approximately
$9.4 million, which was

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available through a line of credit and term advances. Federal Home Loan Bank
borrowings are collateralized by Federal Home Loan Bank stock, other investment
securities and a small amount of loans of our subsidiary banks.

A variety of borrowing terms and maturities can be chosen from the Federal Home
Loan Bank. Maturities available range generally from one day to 10 years.
Interest rates can be either fixed or variable and prepayment options are
available if desired. The Federal Home Loan Bank offers both amortizing and
non-amortizing advances. To date Federal Home Loan Bank stock has been
redeemable at the preset price of $100 per share, but there can be no assurance
that this policy will continue.

CAPITAL ADEQUACY. Historically, our capital needs have been to fund the growth
of our banking operations. Until 1997, internally generated funds were
sufficient for our capital needs. However, in 1998 we determined that, absent a
significant capital addition, the growth in our business would result in our
regulatory capital falling below adequately capitalized guidelines. Accordingly,
in February 1999 we completed a $23.0 million offering of trust preferred
securities with net proceeds of $21.9 million. At September 30, 1999, our total
capital exceeded the total regulatory capital minimum requirements to be
considered adequately capitalized. Our other near term source of capital is
expected to be the net proceeds from common stock sold in this offering, as well
as retained earnings.

Our management monitors compliance with bank and bank holding company regulatory
capital requirements, including risk-based capital guidelines and leverage
ratios. Under the risk-based capital method of capital measurement, the ratio
computed is dependent upon the amount and composition of assets recorded on the
balance sheet, and the amount and composition of off-balance sheet items, in
addition to the level of capital. Included in the risk-based capital method are
two measures of capital adequacy, tier 1 capital and total capital, which
consists of tier 1 and tier 2 capital. See "Supervision and Regulation --
FirsTier -- Capital Adequacy." It is our intention to maintain our holding
company capital ratios at an adequately capitalized level and our banks'
regulatory capital ratios at well capitalized levels. The net proceeds from our
trust preferred securities offering were used and the net proceeds from this
offering will be used in computing our regulatory capital ratios. See
"Supervision and Regulation--The Banks--Capital Adequacy."

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The following tables present our capital ratios as of the indicated dates.

DECEMBER 31, SEPTEMBER 30,
1998 1999
--------------------- ---------------------
AMOUNT RATIO AMOUNT RATIO
---------- ------- ---------- -------
(DOLLARS IN THOUSANDS)

RISK-BASED CAPITAL RATIOS:
Tier 1 capital ....................... $ 20,139 6.44% $ 31,508 5.73%
Tier 1 capital minimum requirement ... 12,504 4.00 22,010 4.00
---------- ----------

Excess ............................... $ 7,635 $ 9,498
========== ==========

Total capital ........................ $ 22,564 7.22% $ 51,179 9.30%
Total capital minimum requirement .... 25,009 8.00 44,021 8.00
---------- ----------

Excess (deficit) ..................... $ (2,445) $ 7,158
========== ==========

Total risk adjusted assets ........... $ 312,617 $ 550,258
========== ==========

LEVERAGE RATIOS:(1)
Tier 1 capital ....................... $ 20,139 5.70% $ 31,508 5.64%
Minimum requirement .................. 14,137 4.00 22,347 4.00
---------- ----------

Excess ............................... $ 6,002 $ 9,161
========== ==========

Average total assets ................. $ 353,415 $ 558,677
========== ==========

- ---------------

(1) The leverage ratio is defined as the ratio of tier 1 capital to average
total assets. See "Supervision and Regulation -- FirsTier -- Capital
Adequacy" for definitions of tier 1 and total capital.

LIQUIDITY

SOURCES OF LIQUIDITY. We continuously forecast and manage our liquidity in order
to satisfy cash flow requirements of depositors and borrowers and to allow us to
meet our cash flow needs. We have developed internal and external sources of
liquidity to meet our growth needs. Our internal sources of liquidity include
cash flows from operations, investments in securities and deposit growth. Our
external sources of liquidity include borrowings from the Federal Home Loan Bank
and other banks and securities offerings to the capital markets.

We believe that we have developed sufficient internal and external sources of
liquidity to meet our cash needs for the foreseeable future. At September 30,
1999, these sources included:

o the ability to raise deposits through branch promotional campaigns;

o the maturity of overnight funds, of which $3.0 million was available;

o the sale of available-for-sale securities, of which $39.3 million was
available;

o the availability of borrowing lines, of which $28.0 million was
available; and

o draws on increased borrowing lines available at the Federal Home Loan
Bank with the purchase of additional Federal Home Loan Bank stock, of
which $38.0 million was available.

CASH FLOWS. A major source of our cash flow for the nine month periods ended
September 30, 1999 and 1998 were from financing activities. We realized cash
flows of $237.0 million for the nine month period ended September 30, 1999 and
$104.2 million for the same period in 1998. Cash provided by financing
activities primarily consisted of net increases in deposits of $197.0 million
for the nine month period ended September 30, 1999 and $93.8 million for the
same period in 1998. During the nine month period ended September 30, 1999, we
received $23.0 million of cash from our trust preferred securities offering and
$15.2 million of cash from

securities sold under agreements to repurchase. For the same period in 1998, we
obtained $7.5 million of cash from advances from the Federal Home Loan Bank.

The primary use of our cash is for our investing activities. We used $230.0
million of cash for the nine month period ended September 30, 1999 and $102.9
million of cash for the same period in 1998 in our investing activities. For the
nine month period ended September 30, 1999, the primary components of cash used
in investing activities were $225.9 million used to fund loans and net purchases
of investment securities of $12.1 million. For the same period in 1998, the
primary component of cash used in investing activities was $83.3 million used to
fund loans.

ASSET/LIABILITY MANAGEMENT. A principal function of asset/liability management
is to coordinate the levels of interest-sensitive assets and liabilities to
minimize net interest income fluctuations in times of fluctuating market
interest rates. Interest-sensitive assets and liabilities are those that are
subject to repricing in the near term, including both variable rate instruments
and fixed-rate instruments which are approaching maturity. Changes in net
interest income arise when interest rates on earning assets change in a
different time period from that of interest rates on interest-bearing
liabilities. Changes in net interest income may also arise from changes in the
mix and volumes of earning assets and interest-bearing liabilities.

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36

The following table presents the interest rate sensitivity of our assets and
liabilities as of September 30, 1999, and the repricing dates of our earning
assets and interest-bearing liabilities as of that date, as well as our interest
rate sensitivity gap percentages for the periods presented. Some assets and
liabilities indicated as maturing or otherwise repricing within a stated period
may, in fact, mature or reprice at different times and at different volumes than
those indicated. Also, the renewal or repricing of assets and liabilities can be
discretionary and subject to competitive and other pressures. Therefore, the
following table does not and cannot necessarily indicate the actual future
impact of general interest rate movements on our net interest income.

ESTIMATED MATURITY OF REPRICING AT SEPTEMBER 30, 1999(1)
----------------------------------------------------------------------
THREE MONTHS
LESS THAN TO LESS THAN ONE TO OVER
THREE MONTHS ONE YEAR FIVE YEARS FIVE YEARS TOTAL
------------ ------------ ---------- ---------- ----------
(DOLLARS IN THOUSANDS)

EARNING ASSETS:
Funds sold and interest-bearing deposits ........... $ 2,500 $ -- $ -- $ -- $ 2,500
Investment in securities available-for-sale ........ 2,033 5,496 27,395 4,437 39,361
Investment in securities held-to-maturity .......... -- 234 2,695 3,225 6,154
Loans and loans held for sale ...................... 334,367 48,258 120,479 15,687 518,791
---------- ---------- ---------- ---------- ----------
Total earning assets ......................... 338,900 53,988 150,569 23,349 566,806

INTEREST-BEARING LIABILITIES:
Deposits:
Demand, interest-bearing ......................... 18,586 -- -- -- 18,586
Savings .......................................... 78,442 -- -- -- 78,442
Certificates of deposit and IRAs:
Under $100,000 ................................. 26,185 133,030 126,101 1,807 287,123
$100,000 and over .............................. 14,151 35,212 26,565 203 76,131
Other Liabilities:
Securities sold under agreements to repurchase ... 20,268 -- -- -- 20,268

Federal Home Loan Bank borrowings .................. -- 57 7,785 751 8,593
Note payable ....................................... -- 11,750 -- -- 11,750
Company obligated mandatorily redeemable
preferred securities of subsidiary trust ......... -- -- -- 23,000 23,000

Total interest-bearing liabilities ........... 157,632 180,049 160,451 25,761 523,893
---------- ---------- ---------- ---------- ----------

Interest rate gap .................................... $ 181,268 $ (126,061) $ (9,882) $ (2,412) $ 42,913
========== ========== ========== ========== ==========

Cumulative interest rate gap at September 30, 1999 ... $ 181,268 $ 55,207 $ 45,325 $ 42,913
========== ========== ========== ==========

Cumulative interest rate gap to total assets ......... 29.8% 9.1% 7.5% 7.1%
========== ========== ========== ==========

- ----------------

(1) Callable investment securities are assumed to mature at the earliest call
date. Loans are placed in the earliest time frame in which maturity or
repricing may occur, and are stated gross, before the allowance for loan
losses.

Due to the volume of loans that reprice with changes in the prime lending rate
and the volume of interest-bearing deposits, we have experienced a positive
maturity gap in assets and deposits that reprice or mature in less than one
year. Of the total earning assets at September 30, 1999, 64.5% reprice or mature
in less than one year, while 69.3% of all interest-bearing liabilities reprice
or mature in that same time frame. A positive maturity gap indicates that net
income would increase in the event of rising interest rates and would decrease
in the event of decreasing interest rates.

In the unlikely event of an immediate, parallel and sustained shift of market
interest rates, management estimates that net income during the twelve months
ended September 30, 1999 would likely have increased approximately 15% compared
to the like twelve month period if interest rates rose by 200 basis points and
likely fall by

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approximately 15% compared to the like twelve month period if rates fell by the
same amount. These are good faith estimates assuming all other factors do not
change materially and, in management's belief, are not necessarily indicative of
what actually could occur in the event of an immediate interest rate increase or
decease of 200 basis points. Management believes that it is highly unlikely that
these changes would occur in a short time period. As earning assets and
interest-bearing liabilities reprice at different time frames and in different
proportion to market interest rate movements, various assumptions must be made
based on historical relationships of these variables in reaching any conclusion.
Since these correlations are based on competitive and market conditions, future
results would, in management's belief, likely be materially different from the
foregoing estimates.

EFFECTS OF INFLATION AND CHANGING PRICES

Substantially all of our assets and liabilities are monetary in nature. As a
result, interest rates generally have a more significant impact on our
performance than the general levels of inflation. Although interest rates do not
necessarily move in the same direction or to the same extent as the prices of
goods and services, increases in inflation generally have resulted in increased
interest rates.

RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board has issued SFAS No. 130, Reporting
Comprehensive Income, which is effective for the fiscal years beginning after
December 15, 1997. This statement establishes standards for reporting and
display of comprehensive income and its components, revenue, expenses, gains and
losses, in a full set of general purpose financial statements. This statement
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements.

The Financial Accounting Standards Board recently adopted Statement No. 131,
Disclosures about Segments of an Enterprise and Related Information. Statement
No. 131, which became effective for periods beginning after December 15, 1997,
requires that business enterprises report information about operating segments
in annual financial statements. It also establishes standards for related
disclosures about products and services, geographic areas and major customers.
Statement No. 131 has had no significant impact on our consolidated financial
statements.

YEAR 2000 CONSIDERATIONS

As a result of computer routines employed by early programmers, many existing
software programs and operating systems may be unable to distinguish the year
2000 from the year 1900. Management presently believes that due to modifications
implemented in the first half of 1999 to existing software and conversion to new
software, the year 2000 issue will not pose significant operational problems for
us. Substantially all of our data processing services are provided under a
contract with First Commerce Technologies, an affiliate of the National Bank of
Commerce. First Commerce Technologies has been engaged by us to ensure that our
systems are fully year 2000 compliant. All of the year 2000 services of First
Commerce Technologies have been completed. First Commerce Technologies provides
us with status reports on a monthly basis regarding its internal year 2000
compliance efforts. Management believes that, to date, our software programs and
operating systems are converted, tested and year 2000 compliant. Implementation
of our plan to test in-house and outsourced software has been completed.
Applications considered to be mission critical were tested during the first
quarter of 1999 with successful results. Compliance audits performed to date on
our subsidiaries have been positive and no specific items of improvement were
noted.

In conjunction with the implementation of our year 2000 plan, we have also made
substantial investments in computer hardware and software to keep our banks
competitive in the marketplace. With the majority of the expenditures completed,
management estimates that, at September 30, 1999, we had spent $1.0 million on

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technology upgrades. Management anticipates that we will spend a total of $1.1
million by the end of 1999. To date, approximately $160,000 has been spent
directly on year 2000 compliance. The plan implementation team is responsible
for progress and provides a status report to the board of directors on a monthly
basis.

In the event that a year 2000 related interruption should occur over which we
have no control, we have developed a two prong contingency plan that would be
implemented based on the expected duration and nature of the interruption. In
the event of a loss of computer communications, loss of utilities or an expected
short duration interruption, a manual back-up process is in place and that was
tested without any significant problems being encountered.

In the event that our primary service provider fails and is unsuccessful in
implementing its back-up contingency plan, we have identified an alternate
vendor. Management believes that the alternate vendor has the ability to provide
the services to meet our needs because this vendor has indicated that its
software is year 2000 compliant. In the event we were to use the alternate
vendor, management believes that the monthly processing costs could increase
marginally, and a one-time internal conversion cost in the range of $75,000 to
$125,000 would probably be incurred.

Pursuant to guidelines of the banking industry regulators, our bank subsidiaries
have sent direct mail to their customers regarding the year 2000 issue and the
need for readiness. However, response to these inquiries has not been
significant. Management intends to continue to solicit customer response on this
matter. Since September 1998, commercial loan customers have been required to
sign year 2000 compliance statements as a part of the loan documentation
process. Failure of our customers to prepare for year 2000 compatibility could
have a significant negative effect on customers' operations and profitability,
thus inhibiting their ability to repay loans and negatively affecting our
operations. Due to the low level of customer response, we do not have sufficient
information to enable us to assess the degree to which customers' operations are
susceptible to potential problems relating to the year 2000 issue or, further,
to quantify the potential lost revenue to us in this case.

In July 1999, the Year 2000 Act was signed into law. The Year 2000 Act
establishes uniform, national legal standards and liability limitations
governing lawsuits arising from actual or potential year 2000 failures,
including a duty of potential plaintiffs to mitigate damages both before and
after an actual year 2000 failure, strict enforcement of any contractual terms
and limitations on the ability of plaintiffs to seek punitive damages. The Year
2000 Act likely will be interpreted by the courts. We are unable to predict the
extent to which court interpretations may limit our ability to collect from
third parties for any losses we may incur or the extent to which we may be
responsible for the losses incurred by others.

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BUSINESS

OVERVIEW

FirsTier Corporation, a multi-bank holding company headquartered in the
metropolitan Denver, Colorado area owns two full service community banks located
in Colorado and Nebraska. Our Colorado bank currently has 16 banking locations
dispersed throughout the Front Range area of Colorado, which includes the
metropolitan areas of Denver, Boulder, Colorado Springs, Fort Collins and their
surrounding communities. Our Nebraska bank has two banking locations in western
and central Nebraska located along the state's main highway, Interstate 80. Our
community banking philosophy emphasizes relationship banking for small to
mid-sized businesses and consumers. To provide high quality personalized service
to our customers, each of our branches acts as a separate community bank with
significant local decision making authority. While customer-related activities
are decentralized, support functions, such as credit administration, loan
review, data processing, accounting and investments are centralized to take
advantage of economies of scale. As of September 30, 1999, we had total assets
of $608.1 million, loans of $515.8 million, deposits of $516.5 million and
stockholders' equity of $24.3 million.

We have grown significantly since 1995, principally through the establishment of
start-up branches. These branches have typically been established in high growth
segments of the Front Range area of Colorado. Consolidation within the Colorado
banking community has increased the availability of seasoned banking personnel
and has afforded us the opportunity to staff our branches with experienced
commercial lenders who have existing customer relationships. In addition, we
have gained access to attractive banking locations due to the consolidation of
financial institutions in Colorado. Both the availability of experienced banking
personnel and attractive locations have enabled our start-up branches to reach
profitability generally within one year of opening.

GROWTH STRATEGY

Our goal is to continue to expand our franchise while maintaining a profitable,
customer-focused financial institution. We believe that our senior management
and systems infrastructure are adequate to support growth without incurring
proportionate increases in general, administrative and other non-interest
expenses and, furthermore, that current economic conditions in the Front Range
area of Colorado provide us with opportunities for growth. Additionally, our
growth should also allow us to increase the lending limits of our banks, thereby
enabling us to continue to serve the needs of existing and new customers. Our
branch expansion is focused in the Front Range area of Colorado, due to the
rapid economic growth this area is experiencing, and is primarily focused on
adding new branches and fostering existing branch growth. Although we may
consider acquisitions of smaller financial institutions from time to time,
external growth is a secondary priority due to the significant premiums
currently being paid to acquire financial institutions in our market areas.

NEW BRANCHES. To date in 1999, our Colorado bank has opened a branch in downtown
Denver, Longmont, Arvada, Colorado Springs, downtown Boulder and Parker,
Colorado. We anticipate opening a loan production office in Denver in early
2000.

We review branch opportunities on an ongoing basis using a systematic approach.
We first review locations, market area demographics and the availability of
seasoned bank professionals. We then formulate projections for potential branch
locations based on the past results of our branches. Based upon these
projections, we determine whether to proceed to open a branch. An integral part
of our branch strategy is recruiting key personnel to manage and operate our new
branches. We generally will not proceed with a new branch until we have
identified a qualified manager with a loyal customer following. We believe that,
by focusing on individuals who are established in their communities and who are
experienced in offering banking products and services, we are able to enhance
our market position and shorten the time required for new branches to become
profitable. We have been able to hire experienced, highly capable bankers who
prefer the autonomy and decision making

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opportunities provided to them in a community banking environment. The banking
experience of the individuals we have hired ranges from 10 to 30 years. In
addition, we continue to add experienced staff in our Colorado bank. Also, due
to the availability of bank branch locations in Colorado resulting from
consolidation within the banking industry, we have often selected a branch site
where a branch of a former bank was located. We believe that our branching
strategy capitalizes on the significant economic growth in our Colorado market
area, and also provides for the needs of businesses and consumers for full
service community banking.

INTERNAL GROWTH. We believe that our largest source of internal growth is
through our intensive loan and deposit solicitation policy implemented by branch
presidents and lending officers, and by referrals from customers. Management
believes the primary reason for referrals is positive customer feedback
regarding our customer service and response time. We believe that a large part
of our loan and asset growth to date has resulted from pre-existing
relationships between customers and lending officers and senior management we
recruited. We also believe that economic expansion in the Front Range area of
Colorado contributes significantly to our internal growth.

The Colorado banking market in which we operate is dominated by large national
and regional financial institutions. This dominance was achieved through the
purchase of Colorado-based financial institutions over the past several years,
which resulted in a significant consolidation of the Colorado banking industry.
Management believes that small to mid-sized businesses often are not adequately
served by large banks, nor are these businesses of sufficient size to be a focus
of large banks, and that individuals frequently have difficulty in finding
personalized banking services. Many of these customers seek a banking
relationship with a smaller and significantly more service oriented community
banking organization such as us. We have designed our operational systems and
branch offices to enable us to provide superior customer service. We believe
that our banking locations are small enough to facilitate personalized services
and decision making, yet of sufficient size to meet most customers' needs.

We also seek opportunities to grow through niche banking areas. For example, we
recently began a private banking division that offers highly personalized
services to a select group of clients primarily through the Internet. This
division, known as "Player's Bank," targets professional athletes as a source of
deposits and lending activities. At November 30, 1999, deposits arising from our
Player's Bank division were approximately $1.4 million and loans are $7.7
million. We expect to increase marketing of Player's Bank to further grow this
division. In addition, our Colorado bank was recently granted the authority to
offer trust services, and we intend to begin our trust operations in early 2000.

OPERATING STRATEGY

Our operating strategy is to continue to provide high quality community banking
services to our customers and to increase market share through the active
solicitation of business with existing and new customers, repeat business,
referrals from customers and continuation of selected promotional strategies. We
will continue to implement our operating strategy by:

o Assembling an Experienced Banking Team. We focus on attracting and
retaining high quality personnel. Most of our senior lending personnel
have previous work experience with larger banking organizations and
community banks operating in the Front Range area of Colorado, and
have been attracted to our community banking culture and decentralized
banking approach. We believe that hiring experienced managers reduces
the risks associated with pursuing our operating strategy.

o Maximizing Operational Efficiencies. We seek to maximize operational
and support efficiencies while maintaining high quality customer
service. We use recently developed technology to provide customer
support. Various management and administrative functions are
consolidated, including credit administration and servicing,
investment management, and accounting, enabling branch personnel to
better focus on customer service and business development.

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41

o Developing Active Marketing Programs. We focus on our active
solicitation program to obtain new business, as well as to augment
products and services that satisfy our customers' needs. Our marketing
programs also use local print and promotional materials in each
location, and we sponsor community events in branch areas.

o Providing High Quality Customer Service. We believe that our ability
to offer high quality customer service provides us with a competitive
advantage over many regional banks that operate in our market areas.
Customer service is emphasized in all aspects of our operations and is
a key component of our employee training programs.

o Maintaining a High Level of Asset Quality. Maintaining a high level of
asset quality is an integral part of our operations. We believe that
our loan underwriting criteria are relatively conservative in nature.
In addition, in administering our loans we follow policies designed
for early identification and resolution of problem credits.

HISTORY

We were organized under Nebraska law in 1963 by our founder and Chairman, Joel
H. Wiens, to purchase our first community bank, Firstate Bank, in Kimball,
Nebraska. In 1993, we began our Colorado banking operation through the purchase
of a bank in Northglenn, Colorado, which we renamed Firstate Bank of Colorado.
In 1995, we began our Colorado expansion through establishing start-up branches
in areas of the Front Range of Colorado that we believed were well situated for
deposit and loan growth. In addition to our branch startups, we purchased a
two-branch savings bank in 1997 that has been assimilated into our Colorado
bank. In September 1999, we changed our name from First Western Corp. to
FirsTier Corporation and moved our state of incorporation to Colorado. In the
future, we intend to change the names of our subsidiary banks to FirsTier Bank.

OUR BANKS

Our Colorado bank is a Colorado state chartered bank with total assets of $525.0
million, net loans of $455.0 million and total deposits of $448.5 million as of
September 30, 1999. Our Nebraska bank is a Nebraska state chartered bank with
total assets of $78.5 million, net loans of $53.8 million and total deposits of
$68.0 million as of September 30, 1999.

The following table presents information about each of our banking locations.

YEAR OPENED (OR ANTICIPATED TOTAL ASSETS AT
BANKING LOCATION TO BE OPENED) OR ACQUIRED SEPTEMBER 30, 1999
- ---------------- --------------------------- ------------------
(IN THOUSANDS)

COLORADO BANK:
Denver Metro Area:
Northglenn 1993 $ 90,552
Thornton 1995 13,299
Cherry Creek 1995 52,722
Westminster 1996 34,250
Denver Tech Center 1998 49,606
Downtown Denver 1999 13,840
Arvada 1999 1,419
Parker 1999 10,111
655 Broadway(1) --

Boulder Metro Area:
Boulder/Gunbarrel(2) 1997 66,875
Lafayette 1998 40,392
Longmont 1999 18,423
Central Boulder(3) 1999 --

Northern Colorado Area:
Greeley(2) 1997 34,909
Loveland 1998 20,893
Fort Collins 1998 19,196

Colorado Springs Metro Area:
Colorado Springs(4) 1999 3,472

NEBRASKA BANK:
Kimball 1963 68,442
Elm Creek 1992 14,047

- ---------------

(1) Scheduled to open in early 2000 as a loan production office.
(2) Acquired in 1997.
(3) Opened December 1999.
(4) Opened in May 1999 as a loan production office and converted into a full
service branch of our Colorado bank in October 1999.

PRIMARY MARKET AREAS

Our primary market areas include the Front Range area of Colorado and, to a
lesser extent, western and central Nebraska. The Front Range area is the most
densely populated area in the Rocky Mountain region. As of April 1999, total
population for the area was approximately 3.3 million. The area has experienced
rapid growth over the past several years, with a net population growth of over
620,000 persons since 1990. The Front Range area lies along the eastern edge of
the Rocky Mountains and covers the 10 county area from Pueblo through Fort
Collins, including the Denver and Boulder metropolitan areas. Metropolitan
Denver contains a number of new industrial and office parks. Boulder has one of
the highest concentrations of small businesses and affluent individuals in the
Rocky Mountain region. The population of Douglas County, where our Parker branch
is located, has grown 150% since 1990. Northern Colorado, which encompasses
Greeley, Loveland and Fort Collins, has experienced rapid growth, with
nonagricultural employment increasing by 44.5% from 1990 through 1998.
Employment in the Front Range area is broadly diversified across the
manufacturing, construction, financial services, wholesale and retail trade,
tourism, transportation, communications, technology, cable

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television, and government sectors. As of October 1999, unemployment in the
Front Range area was approximately 2.7%, which was below the national average.
In 1998, Colorado achieved the twelfth straight year of employment growth, with
nonagricultural employment increasing 3.6% during 1998 to approximately 2.1
million. Our Nebraska market area includes the Nebraska Panhandle, as well as
the fringes of southeastern Wyoming and the northeastern corner of Colorado,
with service providers and agriculture being the primary businesses.

LENDING ACTIVITIES

GENERAL. We provide a broad range of commercial and retail lending services,
including commercial and residential real estate loans, construction loans,
commercial loans and installment loans. Our primary lending focus is on
commercial lending for small to mid-sized businesses with borrowing needs of $1
to $10 million. Loans in excess of $5 million are participated primarily to
other financial institutions in our market areas. As of September 30, 1999,
substantially all of our outstanding loans were to customers within our primary
market area.

Interest rates charged on loans vary with the degree of risk, the term, the
underwriting and the servicing costs, the principal amount and the extent of
other banking relationships, and are further subject to competitive pressures,
money market rates, the availability of funds and government regulations. As of
September 30, 1999, approximately 82.3% of our loans were at variable interest
rates that change with our base rate or some other reference rate.

CREDIT PROCEDURES AND REVIEW. We follow a uniform credit policy established by
our board of directors which contains underwriting and loan administration
criteria, including levels of loan authority, loan types, credit criteria,
concentration limits, loan review and grading and related matters. Our credit
policies are reviewed by the board of directors at least once a year. Most of
our loans are secured and are supported by personal guarantees. We address
credit risk through internal credit policies and procedures, including officer
and customer lending limits, a multi-layered loan approval process for loans
above a loan officer's lending limits, periodic document examinations,
justification for any exceptions to credit policies, loan review and
concentration monitoring. We also provide ongoing loan officer training and
review, obtain outside independent loan reviews, operate a centralized
processing, document preparation and servicing center for loans and manage
problem assets centrally.

We maintain a loan committee approach to commercial lending, which we believe
yields positive results in both responsiveness to customer needs and asset
quality. We have three regional loan committees comprised of our senior officers
and the senior lending officers of our banks. Each loan committee meets once a
week.

Lending decisions are initially made at the branch level, with loan limits
varying based on a loan officer's experience. Loan limits for unsecured loans
are set at low levels. Loan limits for secured loans for any one lending officer
range from $15,000 to $150,000. However, loan limits for our lending officers
can be aggregated with the lending limit of a more senior officer of the branch.
No single branch has the authority to make unsecured loans over $8,000 or
secured loans over $235,000. For loan amounts above the maximum limit of a
branch, loan limits can be aggregated with loan limits of other presidents and
senior credit officers of other branches up to $500,000. All loans over $500,000
require approval of one of our regional loan committees.

Under applicable federal and state law, permissible loans to one borrower at
September 30, 1999 were limited to an aggregate of $7.0 million for our Colorado
bank and $1.2 million for our Nebraska bank. However, loan amounts are limited
by us at $4.0 million for the Colorado bank and $1.0 million for the Nebraska
bank. To accommodate customers whose financing needs exceed applicable lending
limits, we participate loans between our banks and we occasionally participate
loans to our affiliates. We also sell loan participations to unaffiliated
financial institutions. All loan participations are sold by us on a nonrecourse
basis. The outstanding balances of loan participations sold by us were $15.0
million at September 30, 1999, $7.9 million at December 31, 1998 and $10.1
million at December 31, 1997. We generally retain the servicing rights on loan
participations sold. In

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44

addition, we may purchase loan participations from other banks. We use the same
analysis in deciding whether or not to purchase a participation in a loan as we
would in deciding whether to originate the same loan. The purchase of a
significant amount of loan participations by us could decrease our control over
the magnitude of risk in our loan portfolio because we are not able to control
the ongoing relationship with the borrower after purchasing the participation.
The outstanding balances of loan participations purchased by us were $17.5
million at September 30, 1999.

In the ordinary course of business, we enter into various types of transactions
that include commitments to extend credit. We apply the same credit standards to
these commitments as we apply to other lending activities and include these
commitments in our lending risk evaluations. Our exposure to credit loss under
commitments to extend credit is represented by the amount of these commitments.

REAL ESTATE LOANS. Our real estate loans are loans in which real estate serves
as either the primary or secondary source of collateral. At September 30, 1999,
$84.6 million of our real estate loans were commercial loans to businesses that
were collateralized by real estate. Loans of this type are also supported in
most cases by personal guarantees of the business owners. The real estate that
serves as collateral for these loans includes residential first mortgages,
residential second mortgages or commercial mortgages. These loans may range in
maturity from one to five years, with many of the loans maturing in one year.
The interest rates on these loans may be either fixed or floating, with a
substantial percentage involving floating interest rates.

At September 30, 1999, $135.4 million of our real estate loans were commercial
mortgage loans. We generally restrict our commercial mortgage lending activities
to owner-occupied properties or investment properties that are owned by
customers with whom we have a current banking relationship. The properties
securing our commercial mortgage loans include multi-family properties, office
buildings and warehouse buildings. Commercial mortgage loans are made with
either fixed or floating interest rates, with maturities ranging from three to
seven years. Substantially all of our commercial mortgage loans are first
mortgage loans. In most cases, we also secure these loans with a personal
guarantee of the property owner. Our underwriting standards generally require
that a commercial mortgage loan not exceed 75% of the appraised value of the
property securing the loan. In addition, we also make commercial mortgage loans
that are supported by the Small Business Administration and are secured by first
mortgages. The amount of any of these loans does not exceed 50% of the appraised
value of the property securing the loans. The loans typically have terms of five
to 15 years and have floating interest rates.

To a limited extent, we extend financing to individuals who may be considered
subprime credits. As of September 30, 1999, the outstanding balance of these
loans was $2.2 million. These loans are secured primarily by real estate and are
underwritten under more stringent criteria than loans to our other customers.
The collateral for these loans is generally a residential second mortgage. Our
underwriting standards require that the aggregate loan balance to appraised
value does not exceed 85%. The average size of this type of loan is $19,000, the
maturity is generally 15 years and the interest rates are fixed.

CONSTRUCTION LOANS. We provide financing to residential developers that we
believe have demonstrated a record of accurately projecting completion dates and
budgeting expenses. We provide loans for the construction of both presold
projects and projects built prior to the identification of a specific buyer,
although loans for projects built prior to a buyer's commitment to purchase are
made on a selective basis with more stringent underwriting criteria. Residential
construction loans have maturities of nine to 12 months, have origination fees,
are collateralized by first liens on the real estate and have floating interest
rates. In addition, in most instances, these loans are accompanied by a personal
guarantee either from the builder, in the case of a residence that is not
presold, or the homeowner who is building a residence. In connection with making
loans for a specific buyer, we require that a permanent financing commitment be
in place. We monitor construction draws monthly and inspect property to ensure
that construction is progressing as specified. Our underwriting standards
generally require that the principal amount of the loan be no more than 75% of
the appraised value of a completed presold residential construction project.
Values are determined by approved, independent appraisers.

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45

We also originate loans to finance the construction of multi-family, office,
industrial and tax credit projects. These projects are predominately owned by
the user of the property or are undertaken by developers who maintain an ongoing
banking relationship with us and who demonstrate sufficient financial net worth
and income. Our underwriting standards generally require that the principal
amount of these loans be no more than 75% of the appraised value. These loans
are collateralized by first liens on the real estate and usually mature within
18 months. We generally receive origination fees in connection with these loans.
We require personal guarantees on these loans from the borrower or the
borrower's owner. From time to time, we will make commercial construction loans
to builders prior to identification of a specific buyer. Our underwriting
criteria for this type of loan is more stringent than for an owner occupied or
presold commercial building.

We selectively provide loans for the acquisition and development of land for
residential and commercial building projects by developers who have a
demonstrated ability to complete land development projects in a timely and
economical manner and who maintain an ongoing banking relationship with us. We
also extend these loans to large regional builders who have significant net
worth. These loans are collateralized by first liens on the real estate, range
in maturity from 18 to 36 months, carry floating interest rates and are often
accompanied by personal guarantees. Our underwriting standards generally require
that the principal amount of these loans be no more than 50% of the appraised
value for undeveloped land and 65% of the appraised value where improvements
have been installed.

RESIDENTIAL MORTGAGE LOANS. We have a residential mortgage lending department
that originates first mortgages. Our strategy is to earn fee income, including
fees from selling the servicing rights to mortgages, in connection with mortgage
origination. Accordingly, we generally do not retain residential mortgage loans
in our loan portfolio. Rather, residential mortgage loans at any particular date
are classified as held for sale. Once we originate a residential mortgage loan,
we sell it to one of our six mortgage buyers with which we have resale
contracts. We underwrite our residential mortgage loans under standards set
forth in our mortgage resale contracts, thereby allowing the sale of the
residential mortgages to our mortgage buyers to occur shortly after these loans
are made. Most of the residential mortgages we underwrite are sold within two to
three weeks after the loans are made.

COMMERCIAL, FINANCIAL AND AGRICULTURAL LOANS. These loans consist primarily of
loans to businesses for various purposes, including revolving lines of credit
and equipment financing. These loans generally mature within one year, have
adjustable interest rates and are secured by inventory, accounts receivable,
livestock, crops, machinery or other commercial assets. We also extend equipment
loans that typically have terms of three to five years, carry fixed interest
rates and are secured by the equipment.

CONSUMER LOANS. We provide a broad range of consumer loans to customers,
including installment loans, personal lines of credit, debit cards, home equity
loans and automobile loans. In order to improve customer service, continuity and
customer retention, management of commercial banking customers often work with
the same loan officer who handles their commercial banking relationship.
Installment loans to individuals, which are not secured by real estate,
generally have terms of two to five years and bear interest at fixed rates.
These loans are usually secured by motor vehicles, investment securities or
other personal assets.

MEZZANINE FINANCING. We recently began a small mezzanine capital operation whose
purpose is to make loans to businesses in our primary market areas through
subordinated debt for projects analyzed and approved by our senior management.
We anticipate that these loans will be made in connection with real estate
projects. We intend to use up to $5.0 million of the net proceeds of this
offering to make mezzanine loans. All of these loans will be collateralized,
usually with second mortgages on property. Maturities of these loans will
generally be between 12 and 36 months. We expect to receive origination fees in
connection with the loans and will charge a minimum interest rate substantially
above the prime rate. These loans will require, in most circumstances, personal
guarantees of the principals. In addition, it is expected that the size of these
loans will be between $500,000 and $2.5 million. We anticipate that the
mezzanine loan agreements will include shared participations in the cash flow of
the financed projects.

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DEPOSIT ACTIVITIES

We offer a wide range of deposit products including regular checking, checking
with interest, money market accounts, regular savings accounts, certificates of
deposit, IRAs, corporate cash management and debit cards. Deposits at our banks
are insured by the Federal Deposit Insurance Corporation up to statutory limits.
In addition to our banking locations, we also provide additional access for our
customers through on-line internet banking, PC banking, telephone banking, Visa
debit cards and 20 automatic teller machines. In addition, our banks offer
investment products for individuals and businesses.

COMPETITION

The banking business in the Front Range area of Colorado is highly competitive
and is currently dominated by a number of large regional financial institutions,
including Wells Fargo & Company, U.S. Bancorp Inc., Banc One Corporation, Zions
Bancorporation and KeyCorp. In addition to these regional banks, there are a
number of community banks that operate in the area, including Colorado Business
Bank, Guaranty Bank and Trust Company, Colorado State Bank & Trust, First Bank
Holding Company of Colorado and Union Bank and Trust. Our Nebraska bank competes
with First National Bank of Omaha and American National Bank in Kimball,
Nebraska. We compete for loans and deposits with other commercial banks,
including those listed above, savings and loan associations, finance companies,
insurance companies, credit unions and mortgage bankers. In addition to the
traditional financial institutions, we also compete for loans with brokerage and
investment banking companies, nonfinancial institutions, including retail stores
that maintain their own credit programs, and governmental agencies that make
available low cost or guaranteed loans to certain borrowers. Particularly in
times of high interest rates, we also face significant competition for deposits
from sellers of short-term money market securities and other corporate and
government securities.

By virtue of their larger capital bases or their affiliation with larger
multi-bank holding companies, many of our competitors have substantially greater
capital resources and lending limits than we do. As a result, we may experience
greater competition in our primary service areas. Our business, financial
condition, results of operations and cash flows may be adversely affected by an
increase in competition. Moreover, recently enacted and proposed legislation has
focused on expanding the ability of participants in the banking industry to
engage in other lines of business. The enactment of this legislation could put
us at a competitive disadvantage because we may not have the capital to
participate in other lines of business to the same extent as more highly
capitalized bank holding companies.

We compete for loans and deposits principally through the scope and quality of
the services we provide. We believe that our personalized service enables us to
compete favorably with larger financial institutions in our target market of
small to medium-sized businesses. We actively solicit deposit related clients
and compete for deposits by offering customers personal attention and superior
service.

We face competition for our personnel. We compete by emphasizing branch autonomy
and our community banking philosophy. Management believes that we are able to
compete for personnel effectively in our market areas.

We will also face competition in the acquisitions of suitable branch sites. Many
of our competitors have substantially greater resources than we do and may be
able to offer greater consideration for branch sites or to locate banking sites
more effectively.

PROPERTIES

Our principal offices, and those of our Colorado bank, are located in a two
story, 14,000 square foot building we own at 11210 Huron Street, Northglenn,
Colorado. We also own our Thornton, Cherry Creek, Loveland, Fort Collins,
Longmont, Arvada, Kimball and Elm Creek land and bank buildings. All of our
other banking location

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offices are leased or will be leased under long-term agreements with
unaffiliated third parties. These leases typically have five to 10 year terms,
with options to extend at market rates. With the exception of our principal
offices, our banking locations range in size from 1,500 square feet to 8,500
square feet. We also lease a 6,000 square foot operations facility next to our
Thornton branch from a partnership owned by three of our officers and directors.
See "Certain Transactions and Related Parties." All of our properties are in
good working condition. Total payments for our leased facilities are expected to
be $575,000 for 1999.

INTELLECTUAL PROPERTY RIGHTS

We purchased the "FirsTier" mark, including the goodwill associated with the
mark, from U.S. Bank National Association on September 17, 1999, but agreed to
certain restrictions. These include, among others, that we would not use the
mark in any form in Omaha, Nebraska and Lincoln, Nebraska for a period of 24
months and that we would not use the mark in connection with any logo, design or
color scheme that was not clearly distinguishable from the logo, design and
color scheme that previously were used by U.S. Bancorp or U.S. Bank National
Association. We licensed back to U.S. Bancorp and U.S. Bank National Association
the right to continue to use the mark in connection with the advertising and
sale of money market savings services to their customers who purchased those
services before September 17, 1999. We did not receive any representations or
warranties about the mark. If there are any defects in the chain of title for
the mark or its registration, we will have the responsibility for correction at
our own cost and expense.

LEGAL PROCEEDINGS

FirsTier and its subsidiaries are from time to time parties to various legal
actions arising in the normal course of business. Management believes that there
is no proceeding threatened or pending against us or any of our subsidiaries
which, if determined against us, would have a material negative effect on our
consolidated financial condition or results of operations.

EMPLOYEES

As of September 30, 1999, we had approximately 210 full-time equivalent
employees.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

Our executive officers and directors and their respective ages and position(s)
as of December 1, 1999 were as follows:

NAME AGE POSITION
- ---- --- --------

Joel H. Wiens(1).............. 70 Chairman of the Board of FirsTier, the Colorado bank and the Nebraska
bank

Timothy D. Wiens(1)........... 44 President, Chief Executive Officer and Director of FirsTier; President,
Chief Executive Officer and Director of the Colorado bank; Director of the
Nebraska bank

Ronald B. James............... 45 Chief Financial Officer, Vice President, Treasurer and Secretary of FirsTier
and the Colorado bank

Michael J. Nelson............. 57 Executive Vice President and Director of FirsTier; President and Director of
the Nebraska bank; Director of the Colorado bank

Alan D. Linton................ 52 Executive Vice President and Senior Credit Officer of the Colorado bank

Brigette M. Howorko........... 47 Senior Vice President and Cashier/Head of Operations of the Colorado
bank

Ronald B. Robinson............ 59 Executive Vice President of the Colorado bank

Daniel L. Allen............... 47 Executive Vice President of the Colorado bank

- ---------------

(1) Joel H. Wiens is the father of Timothy D. Wiens. There are no other family
relationships among any of our directors and executive officers.

JOEL H. WIENS has been Chairman of the Board of FirsTier and the Nebraska bank
since 1963 and of the Colorado bank since 1993. For more than the past five
years, he has been the President and owner of Western Management Company, a
management company that provides management consulting services to FirsTier and
its subsidiaries. See "Certain Transactions and Related Parties."

TIMOTHY D. WIENS has been an officer and Director of FirsTier since 1973, most
recently serving as Vice President from 1995 to July 1999, Vice Chairman from
December 1998 to July 1999 and President and Chief Executive Officer since July
1999. He has been a Director of the Nebraska bank since 1981. He has been an
officer and Director of the Colorado bank since 1993, and has been President of
our Colorado bank since January 1995. From August 1993 to January 1995, Mr.
Wiens was President of Firstate Mortgage Corporation. From April 1989 to August
1993, Mr. Wiens served as an Executive Vice President for Recycling Industries,
a scrap metal industry consolidator. From 1986 to 1989, Mr. Wiens was a
co-founder and Chairman of First City Financial Corporation, a Denver based
residential and commercial mortgage company.

RONALD B. JAMES has been Chief Financial Officer and Treasurer of FirsTier and
the Colorado bank since June 1998. From March 1997 to June 1998, Mr. James was a
Senior Vice President with First National Bank of Greeley, and from March 1982
to February 1997, he was employed with First Interstate Bancorp in various

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positions, including finance officer. Prior to 1982, Mr. James was a controller
with First Interstate Bank of Englewood.

MICHAEL J. NELSON has been an officer and Director of FirsTier since 1987, an
officer and Director of the Nebraska bank since 1978 and a Director of the
Colorado bank since 1993. He has been President of the Nebraska bank since 1978,
and became Executive Vice President of FirsTier in July 1999. Mr. Nelson is also
a director of George Risk Industries, Inc., an electronics manufacturing company
in Kimball, Nebraska, which is publicly traded on the Nasdaq Bulletin Board
System.

ALAN D. LINTON has been Executive Vice President and Senior Credit Officer of
the Colorado bank since April 1995. From April 1997 to April 1998, he was a Vice
President and Commercial Lender of the Colorado bank. From 1987 through 1996, he
was employed as Director of Operations and Chief Financial Officer of Pratt
Management Company, a real estate property management, development and
construction company. From 1974 through 1986 he held several positions with
United Banks of Colorado, including President of United Bank of Longmont.

BRIGETTE M. HOWORKO has worked for the Colorado bank since 1980, most recently
serving as Cashier since 1985 and Senior Vice President and Head of Operations
since January 1996. She also has been a director of the Colorado bank since
1993.

RONALD B. ROBINSON has been an Executive Vice President of the Colorado bank
since May 1999, overseeing multi-branch operations for our Colorado bank's
Denver metropolitan area branches including corporate recruiting, facility
expansions, new business development and corporate operations. From February
1998 to May 1999, Mr. Robinson was employed with Merchants Mortgage as Vice
President and Manager of the Interim Loan Department. From May 1993 to January
1998, Mr. Robinson was employed by KeyBank of Colorado, formerly OmniBank, in a
variety of management positions, including as a bank President, Regional Manager
and Vice President. Prior to May 1993, Mr. Robinson was employed with The
Professional Bank and with United Banks of Colorado, now Norwest Bank, serving
in numerous management positions.

DANIEL L. ALLEN has been Executive Vice President and Director of Wholesale
Banking of the Colorado bank since July 1999, handling commercial lending and
correspondent bank relationships. Mr. Allen has over 22 years of banking
experience including serving as President and Chief Executive Officer of Pioneer
Bank/Community First National Bank, Longmont, Colorado from October 1984 to July
1999 and serving in management positions with Bank of Boulder from 1977 to 1984.

Our board of directors is divided into three classes that are elected over a
three-year period. Our directors serve until our annual meetings of shareholders
as follows: Joel H. Wiens - 2002; Timothy D. Wiens - 2001; and Michael J. Nelson
- - 2000. Directors of the Colorado bank receive a fee of $100 per meeting, plus
directors living outside of the Denver metropolitan area receive a $100 per
meeting travel allowance. Directors of the Nebraska bank are paid $250 per
meeting attended, with up to an additional $100 per meeting of travel expense
reimbursement. Our board of directors meets quarterly and the boards of
directors of our banks meet monthly.

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EXECUTIVE COMPENSATION

The following table presents the cash compensation paid by us to our Chief
Executive Officer and to our other executive officers who received compensation
from us exceeding $100,000 in 1996, 1997 or 1998.

SUMMARY COMPENSATION TABLE

OTHER
ANNUAL ALL OTHER
COMPEN- COMPEN-
NAME SALARY BONUS SATION SATION
AND PRINCIPAL POSITION YEAR ($) ($) ($) ($)
- ---------------------- ------ ------ ------ ------- ---------

Joel H. Wiens 1998 -- -- -- (2)
Chairman of the Board(1) 1997 -- -- -- (2)
1996 -- -- -- (2)
Timothy D. Wiens,
Chief Executive Officer 1998 98,176 50,000 -- --
and President(3) 1997 73,178 30,000 -- --
1996 60,062 15,700 -- --

- ---------------

(1) Joel H. Wiens was our Chief Executive Officer during 1996, 1997 and 1998.
(2) Joel H. Wiens did not receive a salary from us or our banks in the
indicated years; however, Western Management Company, which is 100% owned
by Mr. Wiens, received $180,500 in 1998, $167,000 in 1997 and $145,500 in
1996 from us and our subsidiaries for management services. See "Certain
Transactions and Related Parties."
(3) Prior to August 1999, Timothy D. Wiens was our Vice Chairman.

1999 STOCK INCENTIVE PLAN

In September 1999, we adopted the 1999 Stock Incentive Plan. The plan provides
for the following stock and stock-based awards: restricted stock, stock options,
stock appreciation rights and performance shares. Up to 1,700,000 shares of
common stock may be issued under the plan. All of our employees, directors and
consultants are eligible to participate in the plan. The plan is administered by
our board of directors, or the board of directors can designate a committee
composed of at least two non-employee directors to administer the plan. The
board of directors or committee will determine the participants in the plan and
the types of awards to be granted and the terms and conditions of all awards.
The plan requires that the exercise period for stock options and restricted
stock cannot exceed 10 years and prohibits, except under limited circumstances,
the transfer of any awards. On September 15, 1999, Timothy D. Wiens was granted
an option for 500,000 shares of common stock at an exercise price of $12.00 per
share, of which one-third vests on each anniversary date of the grant.

LIMITATION OF DIRECTORS AND EXECUTIVE OFFICERS' LIABILITY AND INDEMNIFICATION

Our articles of incorporation provide that the board of directors is authorized,
without the need for shareholder approval, to indemnify directors and officers
to the fullest extent provided for by Colorado law. Generally under Colorado
law, any director or officer who is made or threatened to be made a party to any
suit or proceeding may be indemnified if the director or officer acted in good
faith and had reasonable basis to believe that (i) in the case of conduct in an
official capacity, his or her conduct was in our best interests; and (ii) in all
other cases, his or her conduct was at least not opposed to our best interests;
and, with respect to any criminal proceeding, he or she had no reasonable cause
to believe his or her conduct was unlawful. Colorado law further provides that
such indemnification is not exclusive of any other rights to which such
individuals may be entitled under a company's articles of incorporation or
bylaws, or pursuant to any agreement, insurance policies, vote of shareholders
or disinterested directors or otherwise.

In addition, our bylaws provide that to the fullest extent permitted by Colorado
law, our directors will not be liable for monetary damages for breach of the
directors' fiduciary duty of care to us and our shareholders.

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Notwithstanding such limitations on liability, each director will continue to be
subject to liability for breach of the director's duty of loyalty to us or to
our shareholders, for acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law, for certain activities
prohibited by Colorado law relating primarily to the unlawful payment of
dividends, repurchase of stock or improper loans or guarantees to directors, and
for any transaction from which the director derived an improper personal
benefit. This provision also does not affect a director's responsibilities under
any other laws, such as the federal securities laws or state or federal
environmental laws.

There is no pending litigation or proceeding involving a director, officer,
employee or other agent of ours as to which indemnification is being sought. We
are not aware of any other threatened litigation that may result in claims for
indemnification by any director, officer, employee or other agent.

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PRINCIPAL AND SELLING SHAREHOLDERS

The following table presents information regarding beneficial ownership of our
common stock, as of the date of this prospectus, by:

o each shareholder known by us to be the beneficial owner of more than
5% of our outstanding common stock;

o each director and each named executive officer;

o all directors and executive officers as a group; and

o each selling shareholder who has agreed to sell shares of common stock
in the event the underwriters' over-allotment option is exercised.

Unless otherwise indicated, based on information furnished by the shareholders,
management believes that the shareholders listed below have sole investment and
voting power regarding their shares.

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SHARES BENEFICIALLY
OWNED PRIOR TO THE SHARES SHARES BENEFICIALLY
OFFERING(1) BEING OWNED AFTER THE OFFERING(4)
NAME AND ADDRESS -------------------------------- ------- ---------------------------
OF BENEFICIAL OWNER NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------- --------- ------- ------- ------ -------

Joel H. Wiens......................... 6,635,358(2) 87.5% %
11210 Huron Street
Northglenn, Colorado 80234

Timothy D. Wiens. ................... 911,870(3) 12.0
11210 Huron Street
Northglenn, Colorado 80234

Wiens Family Trust. ................. 515,509 6.8
11210 Huron Street
Northglenn, Colorado 80234

Michael J. Nelson..................... 163,726 2.2
115 South Walnut
Kimball, Nebraska 69145

Ronald B. James ...................... -- --
11210 Huron Street
Northglenn, Colorado 80234

Daniel L. Allen ...................... -- --
1849 North Main Street
Longmont, Colorado 80501

Ronald B. Robinson.................... -- --
5299 DTC Boulevard
Greenwood Village, Colorado 80111

James M. Prince(5).................... 94,457 1.2
700 South Howard
Kimball, Nebraska 69145

Alan D. Linton ....................... -- --
11210 Huron Street
Northglenn, Colorado 80234

Brigette M. Howorko................... -- --
11210 Huron Street
Northglenn, Colorado 80234

All executive officers and
directors as a group
(eight persons)...................... 7,453,209 98.3% %

- ---------------

(1) The number of shares beneficially owned by each shareholder is determined
under the rules issued by the SEC. The information is not necessarily
indicative of beneficial ownership for any other purpose. Under these
rules, beneficial ownership includes any shares as to which the individual
has sole or shared voting power and any shares as to which the individual
has the right to acquire beneficial ownership within 60 days after the date
of this prospectus through the exercise of any stock option or other right.
(2) Of this amount, 6,119,849 shares are owned directly, and 515,509 shares are
owned indirectly as trustee of the Wiens Family Trust.
(3) Of this amount, 512,325 shares are owned directly, 141,791 shares are owned
indirectly through his minor children and 257,754 shares are owned
indirectly as a 50% beneficiary of the Wiens Family Trust.
(4) Assumes full exercise of the underwriters' over-allotment option.
(5) Mr. Prince has been a director of our Nebraska bank for over five years and
served as a Vice President of the Nebraska bank for over the past five
years until he retired on December 31, 1998.

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CERTAIN TRANSACTIONS AND RELATED PARTIES

We and each of our three subsidiaries have entered into management agreements
with Western Management Corporation, a corporation owned by Joel H. Wiens. Each
management agreement is effective for one year, subject to renewal at the annual
meeting of the board of directors of each entity. Management services performed
under each agreement include strategic planning, tax planning and budgeting,
business development, marketing, community and industry relations, and
assistance with the preparation and filing of Federal Reserve reports. The
management agreements require payment of monthly fees to Western Management
Corporation as follows: FirsTier - $750; our Colorado bank - $750 plus $250 per
branch; our Nebraska bank - $3,000; First Mtg. Bancorp - $2,000. In addition to
these monthly fees, Western Management Corporation bills in December of each
year for any additional amount of time spent over 100 hours annually at $85 per
hour for Joel H. Wiens and $65 per hour for its accounting officer. The
following table summarizes payments made to Western Management Corporation for
the periods indicated:

NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------- -----------------
1996 1997 1998 1999
------------ ------------ ------------ -----------
(IN THOUSANDS)

FirsTier .......................................... $ 19,000 $ 19,000 $ 19,000 $ 6,750
Colorado bank...................................... 9,000 28,000 36,500 29,250
Nebraska bank...................................... 86,000 86,000 86,000 64,800
First Mtg. Bancorp................................. 31,500 34,000 39,000 18,000
------------ ------------ ------------ -----------
Total.......................................... $ 145,500 $ 167,000 $ 180,500 $ 118,800
============ ============ ============ ===========

In 1995, Timothy D. Wiens sold assets of a mortgage company he owned to us for
$100,000 to be paid out of profits generated by mortgage operations relating to
those assets. Amounts due to Timothy D. Wiens under this agreement were paid in
full by December 31, 1998.

In May 1997, we issued 787,143 shares of common stock to six persons, including
Joel H. Wiens, Michael J. Nelson, Timothy D. Wiens and two of his children in
exchange for shares they owned in our Colorado bank, representing an 18.2%
minority interest in our Colorado bank. The parties used a valuation based
solely on book value of the two entities in determining the exchange ratio for
the transaction. Accordingly, no goodwill was recognized by us in the
transaction. The book value of the minority interest was approximately $632,000.
After the exchange, our Colorado bank became wholly-owned by us.

In March 1999, we issued 232,994 shares of common stock to five persons,
including Joel H. Wiens, Timothy D. Wiens and two of his children, and Michael
J. Nelson in exchange for shares they owned in our Nebraska bank, representing
an 8.6% minority interest in our Nebraska bank. The parties used a valuation
based solely on book value of the two entities in determining the exchange ratio
for the transaction. Accordingly, no goodwill was recognized by us in the
transaction. The book value of the minority interest was $683,000. After the
exchange, our Nebraska bank became wholly-owned by us.

We rent our 6,000 square feet service center from a limited liability company
owned by Timothy D. Wiens, Joel H. Wiens and Michael J. Nelson pursuant to a
five year lease which began in August 1999. The rent for this facility is $6,000
per month plus our share of operating expenses, which includes, among other
charges, maintenance, utilities, insurance and management fees. The rent may be
increased annually based on increases in the Consumer Price Index.

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From time to time, Joel H. Wiens purchases loan participations from our
subsidiaries. The participations are made on terms identical to those of
unaffiliated parties. Approximate loan principal balances outstanding under
these participations are summarized as follows:

DECEMBER 31, SEPTEMBER 30,
---------------- -------------
1997 1998 1999
---- ---- ----
(IN THOUSANDS)

Loan principal balances outstanding which were
purchased by Joel H. Wiens ............................... $1,420 $1,034 --

Timothy D. Wiens and Michael J. Nelson, along with two officers of our Nebraska
bank and two unaffiliated persons, each own 16.67% of Insurance Professionals,
Inc., a Nebraska insurance agency. Insurance Professionals, Inc. has rented
office space at both the Kimball and Elm Creek branches of the Nebraska bank for
over 10 years for $100 per month per location on a month to month basis.

SUPERVISION AND REGULATION

GOVERNMENT REGULATION

We and our banks are extensively regulated under federal, Colorado and Nebraska
law. These laws and regulations are primarily intended to protect depositors and
the deposit insurance fund of the Federal Deposit Insurance Corporation, not our
shareholders. The following information is qualified in its entirety by
reference to the particular statutory and regulatory provisions.

The laws and regulations affecting banks and bank holding companies are in a
state of flux. The rules and the regulations in this area have changed
significantly over recent years, and there is reason to expect that similar
changes will continue in the future. The policies of regulatory authorities,
including the monetary policy of the Federal Reserve, have a significant effect
on the operating results of bank holding companies and their subsidiaries. Among
the means available to the Federal Reserve to affect the money supply are open
market operations in U.S. Government securities, changes in the discount rate on
member bank borrowings, and changes in reserve requirements against member bank
deposits. These means are used in varying combinations to influence overall
growth and distribution of bank loans, investments and deposits, and their use
may affect interest rates charged on loans or paid on deposits. The Federal
Reserve's monetary policies have materially affected the operating results of
commercial banks in the past and are expected to continue to do so in the
future.

Any change in applicable laws, regulations or regulatory policies may have a
material effect on our business, operations and prospects. We are unable to
predict the nature or extent of the effects that fiscal or monetary policies,
economic controls or new federal or state legislation and regulation may have on
our business and earnings in the future.

MAJOR FEDERAL FINANCIAL SERVICES LEGISLATION RECENTLY ADOPTED

The Gramm-Leach-Bliley Act was signed into law on November 12, 1999. This major
banking legislation now permits affiliation among depository institutions and
entities whose activities are considered "financial in nature" or incidental or
complementary to such activities. Activities which are expressly considered
financial in nature include, among other things, securities and insurance
underwriting and agency, investment management and merchant banking. With
certain exceptions, this act similarly expanded the authorized activities of
subsidiaries of national banks (and indirectly through the wild card powers
provisions of state law, Colorado and Nebraska banks). These provisions become
effective March 11, 2000.

In general, these expanded powers are reserved to bank holding companies, to be
known as financial holding companies, and banks, where all depository
institutions affiliated with them are well capitalized and well managed based on
applicable banking regulations and meet specified Community Reinvestment Act
ratings. The act authorizes the Federal Reserve and the Treasury, in cooperation
with one another, to determine what

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additional activities are permissible as financial in nature. Maintenance of
activities which are financial in nature will require financial holding
companies and banks to continue to satisfy applicable well capitalized and well
managed requirements. Bank holding companies which do not qualify for financial
holding company status are limited to non-banking activities deemed closely
related to banking prior to adoption of the act.

Under the merchant banking provisions of the act (powers which are reserved to
financial holding company affiliates and are not permitted at this time by bank
subsidiaries), financial holding companies will have broad authority to acquire
control of any company so long as it "does not routinely manage or operate" the
company and meets other requirements. However, apart from these merchant banking
provisions and limited grandfathering rights for commercial activities granted
to entities becoming financial holding companies, the act preserves the
historical separation of banking and commerce and, to a degree, expands it by
repealing the exemption that permitted unitary savings and loan holding
companies to engage in non-financial activities.

The act establishes a scheme of "functional regulation" of financial services
businesses which is intended to reflect the primacy of regulation over
activities and entities by regulators routinely responsible for such activities
and entities and with the appropriate expertise in the area of regulation. This
applies both in allocating responsibility for supervising different companies
within a financial holding company structure and in supervising different
activities within the same company. In this connection, the act clarifies the
regulation by states of insurance products sold by depository institutions,
repeals some of the exemptions enjoyed by banks under federal securities laws
relating to securities offered by banks and licensing of broker-dealers and
investment advisors.

The Gramm-Leach-Bliley Act adopts restrictions on financial institutions
regarding the sharing of customer non-public personal information with
non-affiliated third parties unless the customer has had an opportunity to opt
out of the disclosure. The act also imposes periodic disclosure requirements
concerning the financial institution's policies and practices regarding data
sharing with affiliated and non-affiliated parties.

This act will be the subject of extensive rule making by federal banking
regulators and others. The effects of this legislation will only begin to be
understood over the next several years and at this time cannot be predicted with
any certainty.

FIRSTIER

GENERAL. We are a bank holding company registered under the Bank Holding Company
Act of 1956 and are subject to regulation, supervision and examination by the
Federal Reserve. We are required to file an annual report and the other reports
as the Federal Reserve now requires or may require.

ACQUISITIONS. As a bank holding company, we are required to obtain the prior
approval of the Federal Reserve before acquiring direct or indirect ownership or
control of more than 5% of the voting shares of a bank or bank holding company.
The Federal Reserve will not approve any acquisition, merger or consolidation
that would have a substantial anti-competitive result, unless the
anti-competitive effects of the proposed transaction are outweighed by a greater
public interest in meeting the needs and convenience of the public. The Federal
Reserve also considers managerial, capital and other financial factors in acting
on acquisition or merger applications.

PERMISSIBLE ACTIVITIES. Subject to limited exceptions, a bank holding company
may not engage in, or acquire direct or indirect control of more than 5% of the
voting shares of any company engaged in a non-banking activity, unless this
activity has been determined by the Federal Reserve to be closely related to
banking or managing banks. The Federal Reserve has identified specific
non-banking activities in which a bank holding company may engage with notice
to, or prior approval by, the Federal Reserve. As a result of adoption of the
Gramm-Leach-Bliley Act, unless we determine to become a financial holding
company, non-banking activities in which we are permitted to engage will be
limited to those approved for bank holding companies by the Federal Reserve
prior to adoption of the Gramm-Leach-Bliley Act. A bank holding company which
meets certain

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criteria may become a financial holding company by filing after March 11, 2000 a
declaration to that effect with the Federal Reserve. To so certify, each
depository institution affiliate of the bank holding company must be "well
capitalized" and "well managed" under applicable banking regulation. A financial
holding company may engage, without prior approval, in any activity listed in
the act as financial in nature or determined to be such by the Federal Reserve.

CAPITAL ADEQUACY. The Federal Reserve monitors the regulatory capital adequacy
of bank holding companies. As discussed below, our banks are also subject to the
regulatory capital adequacy requirements of the Federal Deposit Insurance
Corporation and Colorado and Nebraska regulations, as applicable. The Federal
Reserve uses a combination of risk-based guidelines and leverage ratios to
evaluate our regulatory capital adequacy.

The Federal Reserve has adopted a system using risk-based capital adequacy
guidelines to evaluate the regulatory capital adequacy of bank holding companies
on a consolidated basis. Under the risk-based capital guidelines, different
categories of assets are assigned different risk weights, based generally on the
perceived credit risk of the asset. These risk weights are multiplied by
corresponding asset balances to determine a risk-weighted asset base. Some off
balance sheet items, such as loan commitments in excess of one year, mortgage
loans sold with recourse and letters of credit, are added to the risk-weighted
asset base by converting them to a balance sheet equivalent and assigning to
them the appropriate risk weight. For purposes of the regulatory risk-based
capital guidelines, total capital is defined as the sum of tier 1 and tier 2
capital elements, with tier 2 capital being limited to 100% of tier 1 capital.
For bank holding companies, tier 1 capital generally includes common
shareholders' equity, perpetual preferred stock and minority interests in
consolidated subsidiaries less the unamortized balance of intangible assets. No
more than 25% of tier 1 capital may be comprised of cumulative preferred stock,
such as the trust preferred securities. Tier 2, also known as Secondary Capital,
capital generally includes certain forms of perpetual preferred stock, as well
as maturing capital instruments and the allowance for loan losses, limited to
1.25% of risk-weighted assets. The regulatory guidelines generally require a
minimum ratio of total capital to risk-weighted assets of 8% to be adequately
capitalized, of which at least 4% should be in the form of tier 1 capital.

In addition to the risk-based capital guidelines, the Federal Reserve and the
Federal Deposit Insurance Corporation use a leverage ratio as an additional tool
to evaluate the capital adequacy of banks and bank holding companies. The
leverage ratio is defined as a company's tier 1 capital divided by its average
assets. Our current minimum required leverage ratio is 4%.

The table below presents our ratios of (1) total capital to risk-weighted
assets, (2) tier 1 capital to risk-weighted assets and (3) tier 1 capital to
average assets, at September 30, 1999.

AT SEPTEMBER 30, 1999
--------------------------
RATIO ACTUAL MINIMUM REQUIRED
----- ------ ----------------

Total capital to risk-weighted assets .............. 9.30% 8.0%
Tier 1 capital to risk-weighted assets ............. 5.73 4.0
Tier 1 capital to average assets ................... 5.64 4.0

THE BANKS

GENERAL. The deposits are insured by the Federal Deposit Insurance Corporation,
and both banks are subject to supervision and regulation by the Federal Deposit
Insurance Corporation. In addition, the Colorado bank is regulated by the
Colorado Division of Banking and the Nebraska bank is regulated by the Nebraska
Department of Banking and Finance.

PERMISSIBLE ACTIVITIES. No bank formed under Colorado or Nebraska law may engage
in any activity not permitted for national banks, unless the institution
complies with applicable capital requirements and the Federal Deposit Insurance
Corporation determines that the activity poses no significant risk to the Bank
Insurance Fund.

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Neither our Colorado bank nor our Nebraska bank are presently involved in the
types of activities covered by this limitation.

COMMUNITY REINVESTMENT ACT. Enacted in 1977, the federal Community Reinvestment
Act has become significant to financial institutions, including their holding
companies. The Community Reinvestment Act currently allows regulators to turn
down an applicant seeking to make an acquisition or establish a branch unless it
has performed satisfactorily under the Community Reinvestment Act. Satisfactory
performance means meeting adequately the credit needs of the communities the
applicant serves. The applicable federal regulators regularly conduct Community
Reinvestment Act examinations to assess the performance of financial
institutions. During the last examination, ratings of satisfactory were received
by our Colorado bank and our Nebraska bank. As a result, management believes
that our banks' performance under Community Reinvestment Act will not impede
regulatory approvals of any proposed acquisitions or branching opportunities.

DIVIDEND RESTRICTIONS. Dividends paid by our banks provide substantially all of
our operating cash flow. Under Colorado and Nebraska law, the approval of the
principal regulator is required prior to the declaration of any dividend by a
bank if the total of all dividends declared in any calendar year exceeds the
total of its net profits of that year combined with its retained net profits for
the preceding two years. In addition, a bank cannot pay a dividend if it will
cause its bank to be undercapitalized.

EXAMINATIONS. Our banks are examined from time to time by the Federal Deposit
Insurance Corporation. Based upon an evaluation, the examining regulator may
revalue the assets of an insured institution and require that it establish
specific reserves to compensate for the difference between the value determined
by the regulator and the book value of the assets. The Colorado Division of
Banking and the Nebraska Department of Banking and Finance also conduct
examinations of state-chartered banks. Both of these regulators may accept the
results of a federal examination in lieu of conducting an independent
examination. Both the Colorado and Nebraska banking regulators have the
authority to revalue the assets of a state-chartered institution and require it
to establish reserves.

CAPITAL ADEQUACY. The Federal Deposit Insurance Corporation has adopted
regulations establishing minimum requirements for the capital adequacy of
insured institutions. The requirements address both risk-based capital and
leverage capital, with risk-based assets and tier 1 and tier 2 capital being
determined in basically the same manner as described above for bank holding
companies. The Federal Deposit Insurance Corporation may establish higher
minimum requirements if, for example, a bank has previously received special
attention or has a high susceptibility to interest rate risk.

The Federal Deposit Insurance Corporation risk-based capital guidelines require
state non-member banks to have a ratio of tier 1 capital to risk-weighted assets
of 4% and a ratio of total capital to risk-weighted assets of 8%.

The Federal Deposit Insurance Corporation leverage guidelines require that state
banks maintain tier 1 capital of no less than 3% and up to 5% of average assets.
The applicable guideline for our banks is estimated to be 4%. Banks with
regulatory capital ratios below the required minimum are subject to
administrative actions, including the termination of deposit insurance upon
notice and hearing, or a temporary suspension of insurance without a hearing in
the event the institution has no tangible capital.

AT SEPTEMBER 30, 1999
---------------------
COLORADO BANK NEBRASKA BANK
----------------- ------------------
MINIMUM MINIMUM
RATIO ACTUAL REQUIRED ACTUAL REQUIRED
----- ------ -------- ------ --------

Total capital to risk-weighted assets ............ 10.3% 8.0% 14.4% 8.0%
Tier 1 capital to risk-weighted assets ........... 9.6 4.0 13.1 4.0
Tier 1 capital to average assets ................. 9.7 4.0 10.8 4.0

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Banking regulators have adopted regulations that define five capital levels:
well capitalized; adequately capitalized; undercapitalized; significantly
undercapitalized; and critically undercapitalized. An institution is critically
undercapitalized if it has a tangible equity to total assets ratio that is equal
to or less than 2%. An institution is well capitalized if it has a total
risk-based capital ratio of 10% or greater, a tier 1 risk-based capital ratio of
6% or greater and a tier 1 capital leverage ratio of 5% or greater, and the
institution is not subject to an order, written agreement, capital directive, or
prompt corrective action directive to meet and maintain a specific capital level
for any capital measure. An institution is adequately capitalized if it has a
total risk-based capital ratio of not less than 8%, a tier 1 risk-based capital
ratio not less than 4% and a leverage ratio of not less than 4%. Under these
regulations, as of September 30, 1999, both of our banks were well capitalized.

The Federal Deposit Insurance Corporation Improvement Act requires the federal
banking regulators to take prompt corrective action to resolve the problems of
depository institutions, including capital-deficient institutions. In addition
to requiring the submission of a capital restoration plan, the Federal Deposit
Insurance Corporation Improvement Act contains broad restrictions on activities
of undercapitalized institutions involving asset growth, acquisitions, branch
establishment, and expansion into new lines of business. With limited
exceptions, an insured depository institution is prohibited from making capital
distributions, including dividends, and is prohibited from paying management
fees to control persons if the institution would be undercapitalized after any
distribution or payment.

As an institution's capital decreases, the powers of the federal banking
regulators become greater. A significantly undercapitalized institution is
subject to mandated capital raising activities, restrictions on interest rates
paid and transactions with affiliates, removal of management, and other
restrictions. The regulators have limited discretion in dealing with a
critically undercapitalized institution and are generally required to appoint a
receiver or conservator if the capital deficiency is not corrected promptly.

If the Federal Deposit Insurance Corporation incurs losses in connection with
the failure of an insured institution or in assisting an insured institution, it
can hold commonly controlled, insured depository institutions liable for the
losses. This liability to the Federal Deposit Insurance Corporation will have
priority over obligations to the institution's shareholders and affiliates.

SAFETY AND SOUNDNESS STANDARDS. The federal regulators have adopted uniform
standards for the safe and sound operation of financial institutions. The
regulators require banks to maintain internal controls, information systems and
internal audit systems that are appropriate for the size, nature and scope of
the institution's business. The regulators also require certain standards to be
observed in loan documentation, credit underwriting, interest rate risk
exposure, and asset growth.

One of the major additional burdens imposed on the banking industry is the
increased authority of federal agencies to regulate the activities of federal
and state banks and their holding companies. The Federal Reserve, the
Comptroller of the Currency and the Federal Deposit Insurance Corporation have
extensive authority to police unsafe or unsound practices and violations of
applicable laws and regulations by depository institutions and their holding
companies. These agencies can assess civil money penalties and other laws have
expanded the agencies' authority in recent years, and the agencies have not yet
fully tested the limits of their powers. In addition, the Colorado Division of
Banking and the Nebraska Department of Banking and Finance possess broad
enforcement powers to address violations of their banking laws by banks
chartered in each respective state.

REAL ESTATE LENDING EVALUATIONS. The federal regulators have adopted uniform
standards for evaluations of loans secured by real estate or made to finance
improvements to real estate. Banks are required to establish and maintain
written internal real estate lending policies consistent with safe and sound
banking practices and appropriate to the size of the institution and the nature
and scope of its operations. The regulations establish loan to value ratio
limitations on real estate loans, which generally are equal to or less than the
loan to value limitations established by our banks.

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DEPOSIT INSURANCE PREMIUMS. The assessment schedule for banks ranges from 0 to
27 cents per $100 of deposits subject to Bank Insurance Fund assessments, based
on each institution's risk classification. Our banks' insured deposits are
subject to assessment payable to the Bank Insurance Fund. An institution's risk
classification is based on an assignment of the institution by the Federal
Deposit Insurance Corporation as of December 31 of each year to one of three
capital groups and to one of three supervisory subgroups. The capital groups are
well capitalized, adequately capitalized and undercapitalized. The three
supervisory subgroups are Group A, for financially solid institutions with only
a few minor weaknesses, Group B, for those institutions with weaknesses which,
if uncorrected could cause substantial deterioration of the institution and
increase the risk to the deposit insurance fund, and Group C, for those
institutions with a substantial probability of loss to the Bank Insurance Fund
absent effective corrective action. Currently, both of our banks are in the well
capitalized classification and have a Group A supervisory subgroup rating.

YEAR 2000 SUPERVISION. For several years, federal banking regulators have been
directing financial institutions to take measures to ensure that their
operations are year 2000 compliant. In addition, regulators examine financial
institutions for year 2000 compliance. The full range of enforcement actions
available to the Federal Deposit Insurance Corporation may be used to penalize a
bank that fails to demonstrate that it is meeting regulatory requirements for
year 2000 compliance. Neither of our banks has had any formal or informal
enforcement action taken against it for failure to satisfy year 2000 compliance.

TRANSACTIONS WITH AFFILIATES AND INSIDERS AND OTHER LENDING RESTRICTIONS. Our
banks are subject to the provisions of Section 23A of the Federal Reserve Act,
which places both quantitative and qualitative limits on extensions of credit
and certain other transactions with affiliates. Section 23B of the Federal
Reserve Act also applies to our banks and requires, among other things, that
transactions with affiliates be on terms that are at least as favorable as those
prevailing at the time for comparable transactions with non-affiliates. A
similar restriction applies to extensions of credit made by our banks to any of
their executive officers, directors, and certain principal shareholders. The
Gramm-Leach-Bliley Act creates a rebuttal presumption that a company held as a
merchant banking or insurance company portfolio investment is an affiliate of
the financial holding company and its depository institution subsidiaries if the
holding company owns 15% or more of the portfolio company's equity capital.
Finally, our banks are governed by state limits on the amount that may be loaned
to any one borrower.

INTERSTATE BANKING LEGISLATION. The Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994, which became effective September 1995, has eliminated
many of the historical barriers to the acquisition of banks by out-of-state bank
holding companies. This law facilitates the interstate expansion and
consolidation of banking organizations by permitting:

o bank holding companies that are adequately capitalized and managed to
acquire banks located in states outside their home states regardless of
whether acquisitions are authorized under the laws of the host state;

o the interstate merger of banks, subject to the right of individual
states either to pass legislation providing for earlier effectiveness
of mergers or to opt out of this authority prior to that date;

o banks to establish new branches on an interstate basis provided that
this action is specifically authorized by the law of the host state;

o foreign banks to establish, with approval of the appropriate regulators
in the United States, branches outside their home states to the same
extent that national or state banks located in that state would be
authorized to do so; and

o banks to receive deposits, renew time deposits, close loans, service
loans and receive payments on loans and other obligations as agent for
any bank or thrift affiliate, whether the affiliate is located in the
same or different state.

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Our banks do not currently have any plans to take any actions permitted by this
law.

BRANCH BANKING IN COLORADO. Since July 1, 1993, Colorado has permitted any
"financial institution" to convert any "affiliate financial institution" into a
branch. Since August 1, 1991 but prior to July 1, 1993, the conversion rights
had been subject to percentage limitations, which percentage limitations ceased
on June 30, 1993. Colorado's branch banking statute defines "financial
institution" as any bank, bank holding company, industrial bank, industrial bank
holding company, savings and loan association, federal savings bank, or thrift
holding company. Colorado's branch banking statute defines "affiliate financial
institution" as any bank, industrial bank, or savings and loan association which
has its principal place in Colorado and is controlled by a financial
institution.

Since January 1, 1997, Colorado has permitted any bank, industrial bank, or
savings and loan association, to the extent it has its principal place of
business in Colorado, to establish one or more "de novo" branches anywhere in
Colorado upon 30 days' written notice to the appropriate regulatory authority.
Also since January 1, 1997, any bank, industrial bank, or savings and loan
association that has its principal place of business in Colorado and had its
charter approved or conditionally or preliminarily approved on or after April 1,
1991, may be converted into a branch of any bank, industrial bank, or savings
and loan association upon 30 days' written notice to the appropriate regulatory
authority.

Colorado law provides that no financial institution that acquires any other
financial institution may convert the acquired institution into a branch if it
would result in the acquiring institution controlling more than 25% of the
aggregate of all deposits in all banks, savings and loan associations, federal
savings banks, and other financial institutions in Colorado that are federally
insured.

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DESCRIPTION OF CAPITAL STOCK

COMMON STOCK

We are authorized to issue 50,000,000 shares of common stock, of which 7,579,667
shares of common stock were issued and outstanding as of December 15, 1999.
Holders of shares of our common stock are entitled to one vote per share and
dividends as and when declared by our board of directors, and upon liquidation,
dissolution or winding up to share ratably in all assets remaining after payment
of liabilities. We have not paid any dividends to date nor do we anticipate
paying any dividends on our common stock in the foreseeable future. It is our
present policy to retain earnings for use in the development and expansion of
our business. The holders of shares of our common stock are entitled to one vote
for each share held of record by them, and do not have the right to cumulate
their votes for election of directors. The holders of shares of common stock do
not have preemptive rights.

PREFERRED STOCK

We are authorized to issue up to 20,000,000 shares of preferred stock with
designations, rights and preferences as may be determined from time to time by
our board of directors. Accordingly, our board of directors is empowered,
without shareholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights that could aversely affect the
voting power or other rights of the holders of our common stock. In the event of
issuance, the preferred stock could be utilized, under certain circumstances, as
a method of discouraging, delaying or preventing a change in control. No shares
of preferred stock are currently outstanding.

CERTAIN ANTI-TAKEOVER PROVISIONS

Our articles of incorporation and bylaws, along with bank regulations, include
provisions that may have the effect of hindering or delaying a change in control
of us or the sale of substantially all of our assets. These provisions include:

o the delegation of authority to our board of directors to issue up to
20,000,000 shares of preferred stock and to fix the rights, preferences
and limitations of these shares without shareholder approval and to
issue shares of common stock;

o a prohibition against any person or entity, individually or together
with persons or entities acting in concert with such person or entity,
from acquiring the ownership, control, right to vote or right to
acquire 10% or more of our total outstanding common stock, without
first complying with the requirements of federal banking laws;

o a requirement of an affirmative vote of at least two-thirds of the
capital stock then issued and outstanding and entitled to vote to
approve the sale of all or substantially all of our assets; and

o the division of our board of directors into three classes that are
elected over a three-year period.

SECURITIES OF SUBSIDIARY TRUST

In February 1999, through FW Capital I, a wholly-owned subsidiary, we completed
the sale of $23.0 million of 9.375% cumulative trust preferred securities. FW
Capital I was formed for the sole purpose of issuing the trust preferred
securities and investing the proceeds into 9.375% junior subordinated debentures
which were issued by us and mature on February 16, 2029, which date may be
shortened by us. We make quarterly interest payments on the debentures. These
payments fund the distributions payable to the holders of the trust preferred
securities.

Holders of the trust preferred securities are entitled to receive preferential
cumulative cash distributions payable quarterly in arrears on the 15th day of
January, April, July and October of each year, subject to possible deferral

59
63

as described below, at the annual rate of 9.375% of the liquidation amount of
$10 per trust preferred security. We have, through a guarantee and other
documents, fully, irrevocably and unconditionally guaranteed, on a subordinated
basis, all of FW Capital I's obligations under the trust preferred securities.
Under the guarantee, we guarantee the payment of distributions by FW Capital I
and payments on liquidation of or redemption of the trust preferred securities,
subordinate to the right to payment of our senior and subordinated debt, to the
extent of funds held by FW Capital I. The guarantee does not cover payment of
distributions when FW Capital I does not have sufficient funds to pay the
distributions. If we do not make required payments on the debentures, a holder
of the trust preferred securities may institute a legal proceeding directly
against us to enforce payment of distributions to a holder. Our obligations
under the guarantee and the debentures are subordinate and junior in right of
payment to all our senior and subordinated debt.

TRANSFER AGENT

American Securities Transfer & Trust, Inc., Denver, Colorado, will act as
transfer agent and registrar for our common stock.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there was no public market for our common stock, and
there can be no assurance that a significant public market for the common stock
will develop or be sustained after the offering. Any future sale of substantial
amounts of common stock in the open market or the perception that such sales may
occur could negatively affect the market price of the common stock.

After this offering, we will have shares of common stock
outstanding, or shares of common stock if the underwriters'
over-allotment option is exercised in full. The common stock sold in the
offering will be freely transferable without restriction under the Securities
Act, unless the shares are held by our affiliates as that term is defined in
Rule 144 under the Securities Act. The remaining shares of common
stock held by existing shareholders are restricted shares within the meaning of
Rule 144 under the Securities Act. We issued and sold the restricted shares in
private transactions in reliance on exemptions from registration under the
Securities Act. Restricted shares may be sold in the public market only if they
are registered under the Securities Act or are sold pursuant to an exemption
from registration, such as the exemptions provided by Rule 144 under the
Securities Act.

In connection with this offering, our shareholders, who will own a total of
shares of common stock after the offering (or shares if the
underwriters' overallotment is exercised in full), have entered into lock-up
agreements pursuant to which they have agreed not to offer or sell any shares of
common stock for a period of 180 days after the date of this prospectus without
the prior written consent of U.S. Bancorp Piper Jaffray, on behalf of the
underwriters. See "Underwriting." U.S. Bancorp Piper Jaffray may, however, in
its sole discretion, at any time and without notice, waive any of the terms of
these lock-up agreements specified in the underwriting agreement. Following the
lock-up period, these shares will not be eligible for sale in the public market
without registration under the Securities Act unless such sale meets the
conditions and restrictions of Rule 144 as described below.

Beginning 180 days after the date of this prospectus or earlier with the prior
written consent of U.S. Bancorp Piper Jaffray, shares of common stock
will be eligible for sale in the public market subject to Rule 144 of the
Securities Act.

In general, under Rule 144, beginning 90 days after the date of this prospectus,
a person who has beneficially owned restricted shares for at least one year
would be entitled to sell in any three-month period up to the greater of:

o 1% of the then-outstanding shares of common stock which is expected to
be approximately shares upon completion of this offering; or

o the average weekly trading volume of the common stock during the four
calendar weeks immediately preceding the notice of such a sale on Form
144 filed with the Securities Exchange Commission.

Sales under Rule 144 are also subject to certain provisions relating to notice
and manner of sale and the availability of current public information about us
during the 90 days immediately preceding a sale. In addition, a person who is
not an affiliate of ours during the 90 days preceding a sale and who has
beneficially owned the shares proposed to be sold for at least two years would
be entitled to sell such shares under Rule 144(k) without regard to the volume
limitation and other conditions described above. The foregoing summary of Rule
144 is not intended to be a complete description.

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65

UNDERWRITING

The underwriters named below have agreed to buy, subject to the terms of the
purchase agreement, the number of shares listed opposite their names below. The
underwriters are committed to purchase and pay for all of the shares if any are
purchased.

NUMBER
UNDERWRITERS OF SHARES
- ------------ ---------

U.S. Bancorp Piper Jaffray Inc. .....................
Keefe, Bruyette & Woods, Inc. .......................
----------
Total............................................

The underwriters have advised us that they propose to offer the shares to the
public at $______ per share. The underwriters propose to offer the shares to
certain dealers at the same price less a concession of not more than $______ per
share. The underwriters may allow and the dealers may reallow a concession of
not more than $ per share on sales to certain other brokers and dealers. After
the offering, these figures may be changed by the underwriters.

We have granted to the underwriters an option to purchase up to an additional
________shares of common stock from us and the selling shareholders have granted
the underwriters an option to purchase up to an additional ________ shares of
common stock, on a pro rata basis, at the same price to the public, and with the
same underwriting discount, as set forth on the cover page of this prospectus.
The underwriters may exercise this option any time during the 30-day period
after the date of this prospectus, but only to cover over-allotments, if any. To
the extent the underwriters exercise the option, each underwriter will become
obligated, subject to certain conditions, to purchase approximately the same
percentage of the additional shares as it was obligated to purchase under the
purchase agreement.

The following table shows the underwriting fees to be paid to the underwriters
in connection with this offering. These amounts are shown assuming both no
exercise and full exercise of the over-allotment option.

NO EXERCISE FULL EXERCISE
----------- -------------

Per share ............................. $ $
Total ............................. $ $

We, and the selling shareholders, if they sell shares, have agreed to indemnify
the underwriters against certain liabilities, including civil liabilities under
the Securities Act, or to contribute to payments that the underwriters may be
required to make in respect of those liabilities.

We and each of our directors, executive officers and principal shareholder have
agreed to restrictions on our ability to sell additional shares of our common
stock for a period of 180 days after the date of this prospectus. We have agreed
not to directly or indirectly offer, pledge, sell, offer for sale, contract to
sell, grant any option for the sale of or otherwise issue or dispose of any
shares of our common stock or any options to purchase or acquire shares of
common stock, without the prior written consent of U.S. Bancorp Piper Jaffray.
The agreements provide exceptions for our sales in connection with the exercise
of stock options granted and the granting of options to purchase shares under
our existing stock option plans in the ordinary course of business. However,
U.S. Bancorp Piper Jaffray may, in its sole discretion and at any time without
notice, release all or any portion of the securities subject to the lock-up
agreements. As of the date of this prospectus, there are no agreements between
the U.S. Bancorp Piper Jaffray and any of our shareholders providing consent by
U.S. Bancorp Piper Jaffray to the sales of shares of common stock prior to the
expiration of the lock-up period.

Prior to the offering, there has been no established trading market for the
common stock. The initial public offering price for the shares of common stock
offered by this prospectus was negotiated by us and the

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66

underwriters. The factors considered in determining the initial public offering
price include the history of and the prospects for the industry in which we
compete, our past and present operations, our historical results of operations,
our prospects for future earnings, the recent market prices of securities of
generally comparable companies and the general condition of the securities
markets at the time of the offering and other relevant factors. There can be no
assurance that the initial public offering price of the common stock will
correspond to the price at which the common stock will trade in the public
market subsequent to this offering or that an active public market for the
common stock will develop and continue after this offering.

To facilitate the offering, the underwriters may engage in transactions that
stabilize, maintain or otherwise affect the price of our common stock during and
after the offering. Specifically, the underwriters may over-allot or otherwise
create a short position in the common stock for their own account by selling
more shares of common stock than have been sold to them by us. The underwriters
may elect to cover any such short position by purchasing shares of common stock
in the open market or by exercising the over-allotment option granted to the
underwriters. In addition, the underwriters may stabilize or maintain the price
of the common stock by bidding for or purchasing shares of common stock in the
open market and may impose penalty bids. If penalty bids are imposed, selling
concessions allowed to syndicate members or other broker-dealers participating
in the offering are reclaimed if shares of common stock previously distributed
in the offering are repurchased, whether in connection with stabilization
transactions or otherwise. The effect of these transactions may be to stabilize
or maintain the market price of the common stock at a level above that which
might otherwise prevail in the open market. The imposition of a penalty bid may
also affect the price of the common stock to the extent that it discourages
resales of the common stock. The magnitude or effect of any stabilization or
other transactions is uncertain. These transactions may be effected on the
Nasdaq National Market or otherwise and, if commenced, may be discontinued at
any time.

The underwriters have reserved for sale, at the public offering price, up to
_______________ shares of common stock in the offering for our employees,
directors and certain other individuals. Purchases of the reserved shares would
reduce the number of shares available for sale to the general public. The
underwriters will offer any reserved shares which are not so purchased to the
general public on the same terms as the other shares offered by this offering
circular. The underwriters are aware of the "Free-Riding and Withholding"
Conduct Rules of the National Association of Securities Dealers in connection
with the sale of certain issuer-directed securities and will comply with those
rules.

LEGAL MATTERS

The validity of the common stock offered by this prospectus and other legal
matters will be passed upon for us by Jones & Keller, P.C., Denver, Colorado.
Certain legal matters in connection with this offering will be passed upon for
the underwriters by Faegre & Benson LLP, Minneapolis, Minnesota.

EXPERTS

Our consolidated financial statements in this prospectus as of December 31, 1998
and December 31, 1997, and for each of the years in the three-year period ended
December 31, 1998, have been included in this Prospectus in reliance upon the
report of Clifton Gunderson L.L.C., independent certified public accountants,
appearing elsewhere in this Prospectus, and upon the authority of that firm as
experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file with the SEC at its public reference facilities at 450
Fifth Street, NW, Washington, D.C. 20549, 7 World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center,

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500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You can also
obtain copies of the documents at prescribed rates by writing to the Public
Reference Section of the SEC at 450 Fifth Street, NW, Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the public reference facilities. Our SEC filings are also available at the
office of the Nasdaq National Market and the American Stock Exchange. For
further information on obtaining copies of our public filings at the Nasdaq
National Market, you should call 212-656-5060. For the same information from the
American Stock Exchange, you should call 212-306-1460.

We have filed a registration statement on Form SB-2 with the SEC for the common
stock we are offering by this prospectus. This prospectus does not include all
of the information contained in the registration statement. You should refer to
the registration statement and its exhibits for additional information. Whenever
we make reference in this prospectus to any of our contracts, agreements or
other documents, the references are not necessarily complete and you should
refer to the exhibits attached to the registration statement for copies of the
actual contracts, agreement or other document. Copies of the registration
statement together with its exhibits may be inspected at the office of the
Securities and Exchange Commission in Washington, D.C., without charge and
copies of it may be obtained upon paying a fee. The registration statement may
also be reviewed on the SEC's web site.

68
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE
----

Independent Auditor's Report...................................................................................F-2

Consolidated Balance Sheets as of September 30, 1999 (unaudited) and

December 31, 1998 and 1997..................................................................................F-3

Consolidated Statements of Income for the nine months ended September 30, 1999 and 1998

(unaudited) and the years ended December 31, 1998, 1997 and 1996............................................F-4

Consolidated Statements of Stockholders' Equity for the nine months ended

September 30, 1999 (unaudited) and the years ended December 31, 1998, 1997 and 1996.........................F-5

Consolidated Statements of Cash Flows for the nine months ended September 30, 1999 and 1998

(unaudited) and the years ended December 31, 1998, 1997 and 1996............................................F-6

Notes to Consolidated Financial Statements.....................................................................F-7

F-1
69

INDEPENDENT AUDITOR'S REPORT

Board of Directors
FirsTier Corporation
Northglenn, Colorado

We have audited the consolidated balance sheets of FirsTier Corporation and
Subsidiaries as of December 31, 1998 and 1997, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the three
years in the period ended December 31, 1998. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of FirsTier Corporation
and Subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.

Clifton Gunderson L.L.C.

Denver, Colorado
January 29, 1999, except as to Note 18
for which the date is September 15, 1999

F-2

FIRSTIER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1998 AND SEPTEMBER 30, 1999 (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

DECEMBER 31,
------------------------ SEPTEMBER 30,
1997 1998 1999
--------- --------- -------------
(UNAUDITED)

ASSETS:
Cash and due from banks ............................................ $ 10,427 $ 13,892 $ 26,975
Interest bearing deposits in other banks ........................... 149 3 --
Federal funds sold ................................................. 11,310 13,270 2,500
Investment securities:
Available-for-sale, at fair value .................................. 15,470 27,082 39,361
Held-to-maturity, at amortized cost, fair value of $13,125
in 1997, $7,250 in 1998 and $6,336 in 1999 (unaudited) ........... 13,042 7,146 6,154
--------- --------- ---------
Total investment securities ................................ 28,512 34,228 45,515
Loans held for sale ................................................ 4,182 5,193 2,948
Gross loans receivable: ............................................ 166,059 290,875 517,549
Less: unearned loan fees ........................................ (432) (886) (1,706)
allowance for loan losses .................................... (1,321) (2,187) (4,364)
--------- --------- ---------
Net loans receivable ............................................... 164,306 287,802 511,479
Premises and equipment, net ........................................ 5,117 8,308 10,437
Preferred securities issuance cost, net ............................ -- -- 1,092
Other assets ....................................................... 3,597 4,511 7,198
--------- --------- ---------
TOTAL ASSETS ................................................. $ 227,600 $ 367,207 $ 608,144
========= ========= =========
LIABILITIES
Deposits:
Demand non-interest bearing ..................................... $ 32,238 $ 44,653 $ 56,184
Demand interest bearing ......................................... 12,558 14,919 18,586
Time ............................................................ 155,498 259,908 441,696
--------- --------- ---------
Total deposits ............................................... 200,294 319,480 516,466
Securities sold under agreements to repurchase ..................... 2,072 5,080 20,268
Note payable ....................................................... 3,380 8,790 11,750
Federal Home Loan Bank borrowings .................................. 1,000 8,650 8,593
Other liabilities .................................................. 3,283 3,818 3,739
--------- --------- ---------
Total liabilities ............................................ 210,029 345,818 560,816
Minority interest in consolidated subsidiaries ..................... 660 683 --
Company obligated mandatorily redeemable preferred securities
of subsidiary trust holding solely Junior Subordinated Debentures -- -- 23,000

STOCKHOLDERS' EQUITY
Preferred stock, 20,000,000 shares authorized; no shares issued and
outstanding at December 31, 1997 and 1998, and September 30, 1999
(unaudited) ..................................................... -- -- --
Common stock, 50,000,000 shares authorized; shares issued and
outstanding: 7,346,673 at December 31, 1997 and 1998; 7,579,667
at September 30, 1999 (unaudited) ............................... 837 837 1,520
Retained earnings .................................................. 16,085 19,460 22,904
Accumulated other comprehensive income (loss) ...................... (11) 409 (96)
--------- --------- ---------
Total stockholders' equity ......................................... 16,911 20,706 24,328
--------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......................... $ 227,600 $ 367,207 $ 608,144
========= ========= =========

These consolidated financial statements should be read only in connection
with the accompanying notes to consolidated financial statements.

F-3
71
FIRSTIER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------------- ----------------------------
1996 1997 1998 1998 1999
----------- ----------- ----------- ----------- -----------
(UNAUDITED)

Interest income:
Loans, including fees ...................... $ 5,686 $ 13,860 $ 24,160 $ 16,808 $ 29,820
Taxable investment securities .............. 1,273 1,173 1,153 775 1,340
Nontaxable investment securities ........... 506 447 500 369 390
Dividends on investment securities ......... 19 47 71 56 36
Federal funds sold ......................... 417 690 855 707 546
Other interest ............................. 7 46 15 -- --
----------- ----------- ----------- ----------- -----------
Total interest income ................... 7,908 16,263 26,754 18,715 32,132
----------- ----------- ----------- ----------- -----------
Interest expense:
Deposits ................................... 2,959 6,986 11,884 8,185 14,265
Federal funds purchased .................... 11 45 23 8 60
Securities sold under agreements to
repurchase ............................... 150 113 120 75 157
Note payable ............................... -- 113 299 182 150
Trust preferred securities ................. -- -- -- -- 1,360
Federal Home Loan Bank borrowings .......... -- 224 428 305 392
----------- ----------- ----------- ----------- -----------
Total interest expense ................ 3,120 7,481 12,754 8,755 16,384
----------- ----------- ----------- ----------- -----------
Net interest income ........................... 4,788 8,782 14,000 9,960 15,748
Provision for loan losses ..................... 15 140 1,090 180 2,174
----------- ----------- ----------- ----------- -----------
Net interest income after provision for loan
losses ...................................... 4,773 8,642 12,910 9,780 13,574
----------- ----------- ----------- ----------- -----------
Non-interest income:
Fees for customer services .................... 627 761 1,015 726 1,431
Net gains from sale of loans .................. 232 625 1,036 716 672
Commissions and fees from brokerage activities 15 29 220 133 248
Investment securities transactions, net ....... 196 -- (4) (3) --
Other operating income ........................ 181 293 573 409 402
----------- ----------- ----------- ----------- -----------
Total non-interest income ............... 1,251 1,708 2,840 1,981 2,753
----------- ----------- ----------- ----------- -----------
Non-interest expenses:
Salaries and employee benefits ................ 1,950 3,296 5,489 3,545 5,851
Net occupancy expense of premises ............. 464 989 1,616 1,107 1,620
Purchased services ............................ 327 842 1,342 906 1,324
Office supplies ............................... 137 182 318 233 347
Minority interest in income of consolidated
subsidiaries ................................ 184 101 111 93 --
Other operating expenses ...................... 687 1,134 1,783 1,159 1,910
----------- ----------- ----------- ----------- -----------
Total non-interest expenses ............. 3,749 6,544 10,659 7,043 11,052
----------- ----------- ----------- ----------- -----------
Income before income tax expense .............. 2,275 3,806 5,091 4,718 5,275
Income tax expense ............................ 705 1,309 1,716 1,765 1,825
----------- ----------- ----------- ----------- -----------
NET INCOME .................................... $ 1,570 $ 2,497 $ 3,375 $ 2,953 $ 3,450
=========== =========== =========== =========== ===========
Other comprehensive income, net of tax:
Unrealized holding gains (losses) arising
during the period ........................ $ (159) $ 52 $ 646 $ 6 $ (774)
Income tax (expense) benefit related to items
of other comprehensive income ............... 56 (19) (226) (2) 263
----------- ----------- ----------- ----------- -----------
Other comprehensive income, net of tax ........ (103) 33 420 4 (511)
----------- ----------- ----------- ----------- -----------
COMPREHENSIVE INCOME .......................... $ 1,467 $ 2,530 $ 3,795 $ 2,957 $ 2,939
=========== =========== =========== =========== ===========
Income per share:
Basic and diluted earnings per share ....... $ 0.24 $ 0.36 $ 0.46 $ 0.40 $ 0.46

Weighted average shares outstanding ........ 6,559,529 7,018,696 7,346,673 7,346,673 7,527,891

These consolidated financial statements should be read only in connection
with the accompanying notes to consolidated financial statements.

F-4
72

FIRSTIER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
AND NINE MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)

ACCUMULATED
OTHER
COMMON RETAINED COMPREHENSIVE
STOCK EARNINGS INCOME (LOSS) TOTAL
---------- ------------ ------------- -------------

Balance at January 1, 1996................................... $ 205 $ 12,018 $ 59 $ 12,282
Net income for the year................................... -- 1,570 -- 1,570
Net changes in other comprehensive income (loss).......... -- -- (103) (103)
---------- ------------ ---------- ------------
Balance at December 31, 1996................................. 205 13,588 (44) 13,749
Net income for the year................................... -- 2,497 -- 2,497
Issuance of 787,143 shares in exchange
for minority shares of FirsTier Bank .................. 632 -- -- 632
Net changes in other comprehensive income................. -- -- 33 33
---------- ------------ ---------- ------------
Balance at December 31, 1997................................. 837 16,085 (11) 16,911
Net income for the year................................... -- 3,375 -- 3,375
Net changes in other comprehensive income................. -- -- 420 420
---------- ------------ ---------- ------------
Balance at December 31, 1998................................ 837 19,460 409 20,706
Net income for the period (unaudited)..................... -- 3,450 -- 3,450
Issuance of 232,994 shares in exchange for
minority shares of Firstate Bank (unaudited)........... 683 (6) 6 683
Net changes in other comprehensive income (loss)
(unaudited)............................................. -- -- (511) (511)
---------- ------------ ---------- ------------
Balance at September 30, 1999 (unaudited).................... $ 1,520 $ 22,904 $ (96) $ 24,328
========== ============ ========== ============

F-5

FIRSTIER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999 (UNAUDITED)
(IN THOUSANDS)

NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------- ------------------------
1996 1997 1998 1998 1999
----------- --------- --------- --------- ---------
(UNAUDITED)

Cash flows from operating activities:
Net income ......................................... $ 1,570 $ 2,497 $ 3,375 $ 2,953 $ 3,450
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses ....................... 15 140 1,090 180 2,177
Provision for losses on other real estate owned . -- 76 25 -- --
Depreciation and amortization ................... 189 426 709 493 873
Net gains from sale of loans .................... (232) (625) (1,036) (716) (672)
Proceeds from sale of loans held for sale ....... 7,471 27,225 50,175 40,660 44,190
Origination of loans held for sale .............. (8,221) (29,800) (50,150) (41,074) (41,273)
Investment securities transactions, net ......... (196) -- 4 3 283
Increase in minority interest in consolidated
subsidiaries .................................. 89 23 23 2 --
Changes in deferrals and accruals:
Other assets .................................... 107 (449) (947) (545) (1,188)
Other liabilities ............................... 247 3,375 310 740 (1,792)
--------- --------- --------- --------- ---------
Net cash provided by operating activities ..... 1,039 2,888 3,578 2,696 6,048
--------- --------- --------- --------- ---------
Cash flows from investing activities:
Net (increase) decrease in federal funds sold ...... (6,805) 1,710 (1,960) (1,170) 10,770
Net (increase) decrease in interest bearing deposits
in other banks ................................... 5 (50) 146 143 3
Purchase of investment securities available-for-sale (2,224) (1,643) (129,237) (90,942) (71,081)
Purchase of investment securities held-to-maturity . (2,892) (765) (513) -- (127)
Proceeds from sale of investment securities
available-for-sale ............................... 3,065 250 29,996 30,154 --
Proceeds from maturities/paydowns of investment
securities ....................................... 5,065 6,681 94,679 44,956 59,127
Net increase in loans .............................. (23,112) (67,275) (125,348) (83,267) (225,854)
Expenditures for bank premises and equipment ....... (252) (2,466) (3,835) (2,734) (2,950)
Proceeds from sale of other real estate ............ -- 256 705 -- 162
Purchase of savings bank, net of $3,897 of cash
and due from banks acquired ...................... -- 154 -- -- --
--------- --------- --------- --------- ---------
Net cash used in investing activities ......... (27,150) (63,148) (135,367) (102,860) (229,950)
--------- --------- --------- --------- ---------
Cash flows from financing activities:
Net increase in deposits ........................... 23,347 71,936 119,186 93,750 196,986
Net increase (decrease) in securities sold under
agreements to repurchase ......................... 3,963 (5,941) 3,008 516 15,188
Advances from Federal Home Loan Bank ............... -- 1,000 8,650 7,500 --
Payments on Federal Home Loan Bank advances ........ -- (6,800) (1,000) -- (57)
Proceeds from note payable ......................... -- 3,380 6,940 3,850 11,750
Payments on note payable ........................... -- -- (1,530) (1,430) (8,790)
Proceeds from trust preferred securities ........... -- -- -- -- 23,000
Debt issuance cost ................................. -- -- -- -- (1,092)
--------- --------- --------- --------- ---------
Net cash provided by financing activities ..... 27,310 63,575 135,254 104,186 236,985
--------- --------- --------- --------- ---------
Net increase in cash and due from banks ............... 1,199 3,315 3,465 4,022 13,083
Cash and due from banks at beginning of period ........ 5,913 7,112 10,427 10,427 13,892
--------- --------- --------- --------- ---------
Cash and due from banks at end of period .............. $ 7,112 $ 10,427 $ 13,892 $ 14,449 $ 26,975
========= ========= ========= ========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest ........................................ $ 2,978 $ 5,028 $ 12,287 $ 8,631 $ 17,682
Income taxes .................................... 671 1,137 2,025 1,444 2,004
Noncash transactions:
Conversion of loans to other real estate owned ..... 10 197 761 761 91
Issuances of shares for minority interests of
consolidated subsidiaries ....................... -- 632 -- -- 683

These consolidated financial statements should be read only in connection
with the accompanying notes to consolidated financial statements.

F-6
74

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS.

FirsTier Corporation (the "Company") was incorporated for the purposes of owning
shares of and acting as the parent holding company for Firstate Bank (the
"Nebraska Bank") and FirsTier Bank (the "Colorado Bank") (collectively referred
to as the "Banks"). The Banks provide a full range of banking services to
individual and corporate customers principally in the front range of Colorado
and the west and central Nebraska areas. A majority of the Company's loans are
related to real estate and commercial activities. The Company is subject to
competition from other financial institutions for loans and deposit accounts.
The Company and the Banks are also subject to regulation by certain governmental
agencies and undergo periodic examinations by those regulatory agencies. As more
fully described in Note 18, the Company changed its name in 1999 from First
Western Corp. to FirsTier Corporation.

BASIS OF FINANCIAL STATEMENT PRESENTATION AND USE OF ESTIMATES.

The financial statements have been prepared in conformity with generally
accepted accounting principles. In preparing the financial statements,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities as of the date of the balance sheet and revenues and expenses
for the period. Actual results could differ significantly from those estimates.

Material estimates that are particularly susceptible to significant change in
the near-term relate to the determination of the allowance for loan losses. In
connection with the determination of the allowance for loan losses, management
obtains independent appraisals for significant properties and assesses estimated
future cash flows from borrowers' operations and the liquidation of loan
collateral.

Management believes that the allowance for loan losses is adequate. While
management uses available information to estimate future loan losses, changes in
economic conditions may necessitate revisions in future years. In addition,
various regulatory agencies, as an integral part of their examination process,
periodically review the Banks' allowance for loan losses. Such agencies may
require the Banks to make additional loan loss provisions based on their
judgments about information available to them at the time of their examination.

PRINCIPLES OF CONSOLIDATION.

The consolidated financial statements include the accounts of the Company and
its respective subsidiaries. The Company currently owns 100% of the Colorado
Bank (having acquired the minority interest in a May 1997 exchange of stock) and
First Mortgage Bancorp. At December 31, 1998, the Company owned 91.4% of the
Nebraska Bank. In the first quarter of 1999, the Company acquired 100% of the
Nebraska Bank as described in Note 18. In connection with the issuance of the
preferred securities as more fully described in Note 18, the Company formed FW
Capital I, a wholly owned subsidiary, in November 1998. Prior to the issuance of
the preferred securities described in Note 18, FW Capital I had no assets nor
operations. All material intercompany transactions and balances have been
eliminated in consolidation.

CASH EQUIVALENTS.

For purposes of the statements of cash flows, the Company has defined cash
equivalents as those amounts included in the balance sheet caption "Cash and due
from banks."

F-7
75

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

INVESTMENT SECURITIES.

Management determines the classification of debt securities at the time of
purchase. Debt securities are classified as held-to-maturity when the Banks have
the positive intent and ability to hold the securities to maturity.
Held-to-maturity securities are stated at amortized cost.

Debt securities not classified as held-to-maturity are classified as
available-for-sale. Available-for-sale securities are stated at fair value, with
the unrealized gains and losses, net of tax, reported as a component of
stockholders' equity.

The amortized cost of debt securities classified as held-to-maturity is adjusted
for amortization of premiums and accretion of discounts to maturity or, in the
case of mortgage-backed securities, over the estimated life of the security.
Such amortization and accretion is included as an adjustment to interest income
from investments. Realized gains and losses and declines in value judged to be
other-than-temporary are included in investment securities transactions, net in
the consolidated statements of income. The cost of securities sold is based on
the specific identification method.

LOANS HELD FOR SALE.

Mortgage loans originated and intended for sale in the secondary market are
carried at the lower of cost or estimated market value in the aggregate. Net
unrealized losses are recognized through a valuation allowance by charges to
income.

LOANS RECEIVABLE.

Loans receivable that management has the intent and ability to hold for the
foreseeable future or until maturity or pay-off are reported at their
outstanding principal, adjusted for any charge-offs, the allowance for loan
losses, and any deferred fees or costs on originated loans.

Loan fees which represent adjustments to interest yield are deferred and
amortized over the estimated life of the loan. Most of the loans originated by
the Company are short-term.

The accrual of interest on impaired loans is discontinued when, in management's
opinion, the borrower may be unable to meet payments as they become due. When
interest accrual is discontinued, all unpaid accrued interest is reversed.
Interest income is subsequently recognized only to the extent cash payments are
received. Impaired loans are measured based on the present value of expected
future cash flows discounted at the loan's original effective interest rate. As
a practical matter, impairment may be measured based on the loan's observable
market price or the fair value of the collateral if the loan is collateral
dependent. When the measure of the impaired loan is less than the recorded
investment in the loan, the impairment is recorded through a valuation
allowance.

The allowance for loan losses is established through a provision for loan losses
charged to income. Loans are charged against the allowance for loan losses when
management believes that the collectibility of the principal is unlikely or,
with respect to consumer installment loans, according to an established
delinquency schedule. The allowance is an amount that management believes will
be adequate to absorb losses inherent in existing loans and commitments to
extend credit, based on evaluations of the collectibility and prior loss
experience of loans and commitments to extend credit. The evaluations take into
consideration such factors as changes in the nature and volume of the portfolio,
overall portfolio quality, loan concentrations, specific problem loans and
commitments, and current and anticipated economic conditions that may affect the
borrowers' ability to pay.

F-8
76

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

PREMISES AND EQUIPMENT.

Premises, including leasehold improvements and equipment, are stated at cost.
Depreciation is provided for in amounts sufficient to charge the cost of
depreciable assets to operations over their estimated service lives, principally
on the straight-line method.

OTHER REAL ESTATE.

Real estate properties acquired through, or in lieu of, foreclosure are to be
sold and are initially recorded at fair value at the date of foreclosure
establishing a new cost basis. After foreclosure, management periodically
performs valuations and the real estate is carried at the lower of carrying
amount or fair value less cost to sell. Other real estate is carried in other
assets on the consolidated balance sheets. Revenue and expense from operations
and changes in the valuation allowance are included in other operating expenses.

INCOME TAXES.

Provisions for income taxes are based on taxes payable or refundable for the
current year (after exclusion of non-taxable income such as interest on state
and municipal securities) and deferred taxes on temporary differences between
the amount of taxable income and pretax financial income and between the tax
bases of assets and liabilities and their reported amounts in the consolidated
financial statements. Deferred tax assets and liabilities are included in the
consolidated financial statements at currently enacted income tax rates
applicable to the period in which the deferred tax assets and liabilities are
expected to be realized or settled. As changes in tax laws or rates are enacted,
deferred tax assets and liabilities are adjusted through the provision for
income taxes.

INTANGIBLE ASSETS.

Intangible assets are included in other assets in the consolidated balance
sheets. Such intangible assets consist of goodwill arising from the February
1997 acquisition of a financial institution. The goodwill is being amortized on
a straight-line basis over a period of fifteen years from the date of purchase.

COMPREHENSIVE INCOME.

The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," (SFAS No. 130)
in June 1997. SFAS No. 130 establishes standards for reporting and display of
comprehensive income (as defined) in a full set of general-purpose financial
statements. SFAS No. 130 requires classification of items of other comprehensive
income by their nature in a financial statement and display of the accumulated
balance of other income by their nature in a financial statement and display of
the accumulated balance of other comprehensive income separately from retained
earnings in the equity section of the consolidated balance sheet. The Company
has only one item of other comprehensive income and has elected to report
comprehensive income in the consolidated statements of income, with
reclassification of 1997 and 1996 amounts.

PER SHARE COMPUTATIONS.

Basic earnings per share are based on the weighted average number of common
shares outstanding during each period presented. The Company has no
dilutive-potential common shares and therefore basic earnings per share equal
diluted earnings per share.

OPERATING SEGMENTS.

The Company adopted Financial Accounting Standards Board Statement No. 131,
"Disclosures About Segments of an Enterprise and Related Information," (SFAS No.
131) effective January 1, 1998. This statement establishes

F-9
77

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

standards for reporting information about segments in annual and interim
financial statements. SFAS No. 131 introduces a new model for segment reporting
called "management approach." The management approach is based on the way the
chief operating decision-maker organizes segments within a company for making
operating decisions and assessing performance. Reportable segments are based on
products and services, geography, legal structure, management structure and any
other segments into which management disaggregates a company. Based on the
"management approach" model, the Company has determined that its business is
comprised of a single operating segment and that SFAS No. 131 therefore has no
impact on its consolidated financial statements.

NOTE 2 - ACQUISITIONS

In February 1997, the Company acquired 100% of First Northern Holdings, L.T.D.
and the remaining 18.5% minority interest not then owned by it in First Northern
Savings Bank, Greeley, Colorado. The purchase price, approximately $3.8 million,
was paid in cash. The excess purchase price over the fair value of the net
assets acquired (goodwill) of $966,000 is being amortized over a fifteen-year
period from the date of purchase. Both locations of First Northern Savings Bank
immediately became branches of the Colorado Bank and added approximately $33
million in assets to the Company.

In May 1997, the Company exchanged 787,143 shares of its common stock for the
18.2% of the Colorado Bank that it did not then own. Individuals already
affiliated with the Company owned such minority shares. No goodwill was
recognized in connection with this transaction.

Following their respective acquisition dates, the Company included the results
of operations of both of the above-indicated acquisitions in its consolidated
statement of income.

NOTE 3 - INVESTMENT SECURITIES

At December 31, 1997, the Company had securities with the following amortized
cost and estimated fair values:

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
--------- ---------- ---------- ----------

SECURITIES HELD-TO-MATURITY
- ---------------------------
U. S. Treasury & agency securities $ 5,807 $ -- $ 21 $ 5,786
State and political securities ..... 7,235 104 -- 7,339
------- ------- ------- -------
Total securities held-to-maturity .. $13,042 $ 104 $ 21 $13,125
======= ======= ======= =======

F-10
78

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
--------- ---------- ---------- ----------

SECURITIES AVAILABLE-FOR-SALE
- -----------------------------
U. S. Treasury & agency securities.... $12,028 $ -- $ 42 $11,986
State and political securities........ 1,587 24 -- 1,611
Other bonds........................... 200 1 -- 201
Equity securities..................... 1,672 -- -- 1,672
------- ------- ------- -------
Total securities available-for-sale. $15,487 $ 25 $ 42 $15,470
======= ======= ======= =======

At December 31, 1998, the Company had securities with the following amortized
cost and estimated fair values:

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
--------- ---------- ---------- ----------

SECURITIES HELD-TO-MATURITY
- ---------------------------
State and political securities........ $ 7,146 $ 104 $ -- $ 7,250
------- ------- ------- -------
Total securities held-to-maturity..... $ 7,146 $ 104 $ -- $ 7,250
======= ======= ======= =======

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
--------- ---------- ---------- ----------

SECURITIES AVAILABLE-FOR-SALE
- -----------------------------
U. S. Treasury & agency securities.... $23,080 $ 33 $ 28 $23,085
State and political securities........ 2,136 92 -- 2,228
Other bonds........................... 21 2 -- 23
Equity securities..................... 1,216 530 -- 1,746
------- -------- ------- -------
Total securities available-for-sale... $26,453 $ 657 $ 28 $27,082
======= ======== ======= =======

The amortized cost and estimated fair value of debt securities at December 31,
1998, by contractual maturity, are shown below. Actual maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations without call or prepayment penalties.

HELD-TO-MATURITY AVAILABLE-FOR-SALE
---------------------- ----------------------
AMORTIZED ESTIMATED AMORTIZED AMORTIZED
COST FAIR VALUE COST FAIR VALUE
--------- ---------- ---------- ----------

Due in one year or less............. $ -- $ -- $10,788 $10,780
Due after one year through five
years............................. 3,372 3,403 10,281 10,364
Due after five years through ten
years............................. 945 961 3,019 3,024
Due after ten years................. 2,829 2,886 1,149 1,168
------- ------- ------- -------
Total debt securities......... $ 7,146 $ 7,250 $25,237 $25,336
======= ======= ======= =======

Securities included in the accompanying consolidated balance sheets at December
31, 1997 and 1998, with an amortized cost of $14,071,044 and $16,720,792,
respectively, are pledged as collateral for public deposits and for other
purposes as required or permitted by law.

Gross realized gains and gross realized losses on sales of securities
available-for-sale respectively were $212,107 and $15,747 in 1996. In 1997,
gross realized losses of $37 on sales of securities available-for-sale were
recognized. Gross realized losses of $4,205 on sales of securities
available-for-sale were recorded in 1998.

F-11
79

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

At September 30, 1999 (unaudited), the Company had securities with the following
amortized cost and estimated fair values:

AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------

SECURITIES HELD-TO-MATURITY
- ---------------------------
State and political securities .......................... $ 6,154 $ 6,200
-------- -------
Total securities held-to-maturity ................... $ 6,154 $ 6,200
======== =======

AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------

SECURITIES AVAILABLE-FOR-SALE
- -----------------------------
U. S. Treasury & agency securities....................... $ 35,471 $34,925
State and political securities........................... 2,435 2,428
Equity securities........................................ 1,600 2,008
--------- -------
Total securities held-to-maturity.................... $ 39,506 $39,361
========= =======

NOTE 4 - LOANS RECEIVABLE

The components of the loan portfolio are summarized as follows:

DECEMBER 31,
----------------------------- SEPTEMBER 30,
1997 1998 1999
------------- ------------ -------------
(UNAUDITED)

Commercial, financial and agricultural................................ $ 41,500 $ 51,990 $ 79,781
Construction.......................................................... 37,235 85,782 120,525
Real estate........................................................... 79,499 141,955 301,834
Installment loans to individuals...................................... 7,693 11,057 15,312
Other .............................................................. 132 91 97
------------- ------------ -------------
Gross loans receivable........................................ 166,059 290,875 517,549
Less unearned loan fees............................................... (432) (886) (1,706)
Less allowance for loan losses........................................ (1,321) (2,187) (4,364)
------------- ------------ -------------
Net loans receivable.......................................... $ 164,306 $ 287,802 $ 511,479
============= ============ =============

The Company had no loans involving foreign activities (borrowers outside the
United States) outstanding at December 31, 1997, December 31, 1998 or September
30, 1999 (unaudited).

Activity in the allowance for loan losses was as follows:

NINE MONTHS
YEARS ENDED DECEMBER 31, ENDED
---------------------------------------------- SEPTEMBER 30,
1996 1997 1998 1999
-------------- ------------- ------------- --------------
(UNAUDITED)

Balance, at beginning of period...................... $ 767 $ 851 $ 1,321 $ 2,187
Provision for loan losses........................ 15 140 1,090 2,174
Allowance from acquired savings bank............. -- 277 -- --
Recoveries....................................... 91 111 174 40
Loans charged off................................ (22) (58) (398) (37)
-------------- ------------- ------------- --------------
Balance, at end of period.................... $ 851 $ 1,321 $ 2,187 $ 4,364
============== ============= ============= ==============

F-12
80

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

The components of impaired loans are as follows:

DECEMBER 31,
----------------------------- SEPTEMBER 30,
1997 1998 1999
------------- ------------ -------------
(UNAUDITED)

Outstanding principal balance of accruing loans having
payments delinquent more than 90 days.......... .................. $ 744 $ 288 $ 550
Loans on which the accrual of interest has been
discontinued or reduced........................................... 484 635 705

The average investments in impaired loans were $329,000, $1,138,000 and $954,000
(unaudited) during the years ended December 31, 1997, and 1998, and the nine
month period ended September 30, 1999, respectively. Interest income on impaired
loans recognized for cash payments received during these years was not
significant. The amount of the allowance for loan losses allocated to impaired
loans at December 31, 1997, 1998 and September 30, 1999 (unaudited) was not
significant.

The Company is not committed to lend funds to debtors whose loans have been
modified.

NOTE 5 - PREMISES AND EQUIPMENT

Premises and equipment consisted of the following:

DECEMBER 31,
----------------------------- SEPTEMBER 30,
1997 1998 1999
------------- ------------ -------------
(UNAUDITED)

Cost:
Building and improvements......................................... $ 3,593 $ 4,523 $ 5,254
Leasehold improvements............................................ 446 771 1,123
Equipment......................................................... 2,378 3,782 5,238
Land.............................................................. 844 1,966 2,417
--------- ---------- ---------
Total cost.................................................... 7,261 11,042 14,032
Less accumulated depreciation......................................... (2,144) (2,734) (3,595)
--------- ---------- ---------
Net book value.............................................. $ 5,117 $ 8,308 $ 10,437
========= ========== =========

NOTE 6 - DEPOSITS

At December 31, 1998, the scheduled remaining maturities of time deposits are as
follows:

DEPOSIT CATEGORY
---------------------
UNDER $100,000
$100,000 OR MORE TOTAL
-------- -------- --------

Three months or less .................................................. $ 35,150 $ 12,373 $ 47,523
Over three months through twelve months................................ 73,697 21,192 94,889
Over one year through three years ..................................... 63,692 10,421 74,113
Over three years ...................................................... 1,180 -- 1,180
No stated maturity .................................................... -- -- 42,203
-------- -------- --------
Total time deposits ............................................. $173,719 $ 43,986 $259,908
======== ======== ========

At September 30, 1999 (unaudited), the scheduled remaining maturities of time
deposits are as follows:

DEPOSIT CATEGORY
---------------------
UNDER $100,000
$100,000 OR MORE TOTAL
-------- -------- --------

Three months or less .................................................. $ 26,185 $ 14,367 $ 40,552
Over three months through twelve months................................ 133,030 35,196 168,226
Over one year through three years ..................................... 125,101 26,365 151,466
Over three years ...................................................... 2,806 203 3,009
No stated maturity .................................................... -- -- 78,443
-------- -------- --------
Total time deposits ................................................... $287,122 $ 76,131 $441,696
======== ======== ========

F-13
81

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

NOTE 7 - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase generally mature one day from the
transaction date. The securities underlying the repurchase agreements are held
by an agent of the Banks and are under the control of the Banks.

NOTE 8 - NOTE PAYABLE

The Company maintained a revolving line of credit with the National Bank of
Commerce in the amount of $10,000,000 at December 31, 1998. The outstanding
balance at December 31, 1997 and 1998 was $3,380,000 and $8,790,000,
respectively. At September 30, 1999 (unaudited) the outstanding balance was
$11,750,000 of a $15,000,000 total line. The repayment schedule requires
semi-annual interest payments with the principal due at the maturity date, June
30, 2002. Interest is calculated at 250 basis points over the like "CMT"
treasury which was a total of 7.76% at December 31, 1998. The note is secured by
100% of the outstanding common stock of the Colorado Bank and 91% of the
outstanding common stock of the Nebraska Bank, and is guaranteed by a principal
stockholder of the Company. The loan agreement also calls for the Company to
maintain the following financial ratios:

Maintain or cause each of its bank subsidiaries to maintain:

(i) for the Company, not less than a 6.5% tangible equity
capital-to-assets ratio; and

(ii) for each of its subsidiary banks, not less than a 6.0% tangible
equity capital-to-assets ratio.

NOTE 9 - FEDERAL HOME LOAN BANK BORROWINGS

As of December 31, 1998, the Banks had available lines of credit totaling
$9,414,000 with the Federal Home Loan Bank (FHLB) secured by FHLB capital stock
and qualifying first mortgage residential loans. The advances outstanding at
December 31, 1997, 1998 and September 30, 1999, are as follows:

OUTSTANDING
BALANCE AT OUTSTANDING
DECEMBER 31, BALANCE AT
INTEREST ----------------- SEPTEMBER 30,
RATE 1997 1998 1999
-------- ------ ------ -------------
(UNAUDITED)

Maturity date of advance:
November 23, 1998 ............ 5.900% $1,000 $ -- $ --
February 2, 2001 ............. 5.740% -- 2,500 2,500
January 31, 2003 ............. 5.810% -- 5,000 5,000
December 1, 2008 ............. 5.572% -- 1,150 1,093
------ ------ ------
Total advances outstanding $1,000 $8,650 $8,593
====== ====== ======

NOTE 10 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONTINGENT
LIABILITIES

The Banks are parties to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of their customers.
These financial instruments include commitments to extend credit and stand-by
letters of credit.

Those instruments involve, to a varying degree, elements of credit risk in
excess of the amount recognized in the consolidated balance sheets. The contract
amounts of those instruments reflect the extent of involvement the Banks have in
particular classes of financial instruments.

The Banks' exposure to credit loss in the event of non-performance by the other
party to the financial instrument for commitments to extend credit and stand-by
letters of credit is represented by the contractual notional amount

F-14
82
FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

of those instruments. The Banks use the same credit policies in making
commitments and conditional obligations as they do for on-balance-sheet
instruments.

Financial instruments whose contract amounts represent credit risk are as
follows:

DECEMBER 31,
----------------------------- SEPTEMBER 30,
1997 1998 1999
------------- ------------ -------------
(UNAUDITED)

Commitments to extend credit...................................... $ 56,010 $ 118,843 $ 195,969
Stand-by letters of credit........................................ 2,139 3,799 9,917

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of a condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Since many of the commitments may expire without being
drawn upon or be participated to other financial institutions, the total
commitment amounts do not necessarily represent future cash requirements. The
Banks evaluate each customer's creditworthiness on a case-by-case basis.

The amount of collateral obtained if deemed necessary by the Banks upon
extension of credit is based on management's credit evaluation. Collateral held
varies, but may include accounts receivable, inventory, property, plant and
equipment and income-producing commercial properties.

Stand-by letters of credit are conditional commitments issued by the Banks to
guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loan facilities to customers.

In the normal course of business there are outstanding various contingent
liabilities, such as claims and legal actions, which are not reflected in the
accompanying consolidated financial statements. Management believes, based on
consultation with counsel, that liabilities arising from these proceedings, if
any, will not be material to the Company's consolidated financial position.

NOTE 11 - LEASE COMMITMENTS

The Colorado Bank leases various branch office and ATM equipment space under
noncancelable operating leases. At December 31, 1998, future minimum lease
payments under these leases, expiring at various dates through 2008 are as
follows:

Year Ending December 31,
1999 ................................................................. $ 551
2000 .................................................................. 527
2001 .................................................................. 510
2002 .................................................................. 524
2003 .................................................................. 529
Thereafter............................................................. 2,072
-----------
Total future lease payments....................................... $ 4,713
===========

Total lease expense for all operating leases was $169,359, $241,866 and
$346,665, for the years ended December 31, 1996, 1997 and 1998, respectively.

NOTE 12 - INCOME TAXES

Deferred tax assets and liabilities are recorded based on the differences
between financial statement and tax basis of assets and liabilities and the tax
rates in effect when these differences are expected to reverse.

F-15
83

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

Temporary differences in the recognition of revenue and expense for tax and
financial reporting purposes resulted in net deferred tax assets as of December
31, 1997 and 1998, as follows:

1997 1998
------ ------

Deferred tax assets:
Provision for loan losses ........................... $ 13 $199
Depreciation ........................................ 133 133
Net unrealized loss on securities available-for-sale 6 --
---- ----
Total deferred tax assets ........................ 152 332
Deferred tax liabilities:
Net unrealized gains on securities available-for-sale -- 220
---- ----
Net deferred tax assets .......................... $152 $112
==== ====

The effective income tax rate varies from the statutory federal rate because of
several factors, the most significant being nontaxable interest income earned on
obligations of state and political subdivisions. The following table reconciles
the Company's effective tax rate to the statutory federal rate:

1996 1997 1998
------------------ -------------------- --------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- --------- ------- --------- -------

Tax expense at statutory rate..................... $ 773 34.0% $ 1,294 34.0% $ 1,731 34.0%
Increase (decrease) in taxes due to:
Tax exempt municipal interest................ (167) (7.3)% (142) (3.7)% (152) (3.0)%
State tax.................................... 17 0.7% 81 2.1% 162 3.2%
Other........................................ 82 3.6% 76 2.0% (25) (0.5)%
------ ------ --------- ------ --------- ------
Total income tax expense.......................... $ 705 31.0% $ 1,309 34.4% $ 1,716 33.7%
====== ====== ========= ====== ========= ======

The consolidated provision for income taxes consisted of the following:

YEAR ENDED DECEMBER 31,
--------------------------------
1996 1997 1998
------- ------- -------

Current tax provision:
Federal ............................ $ 679 $ 1,191 $ 1,656
State .............................. 26 123 246
------- ------- -------
Total current tax provision .... 705 1,314 1,902
Deferred federal tax ................... -- (5) (186)
------- ------- -------
Total provision for income taxes $ 705 $ 1,309 $ 1,716
======= ======= =======

NOTE 13 - RELATED PARTIES

The Company has sold loan participations to related parties (stockholders,
directors, family members and businesses related through common ownership). At
December 31, 1996, 1997 and 1998, the participations sold to related parties
were approximately $1.1 million, $1.4 million and $1.0 million, respectively. As
of September 30, 1999 (unaudited), there were no participations sold to related
parties.

In accordance with the terms of management agreements, the Company and each of
its three subsidiaries purchase services from Western Management Corporation, a
corporation owned by a principal stockholder. Such agreements are annually
renewable and are on terms that the Company believes would be similar to those
obtained from an unaffiliated party. The purchased services include strategic
planning, tax planning and budgeting, business development and marketing.

F-16
84
FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

Amounts expensed by the Company and its subsidiaries are as follows:

YEARS ENDED DECEMBER 31, NINE MONTHS ENDED
------------------------------- SEPTEMBER 30,
1996 1997 1998 1999
-------- ------- ------- -----------------
(UNAUDITED)

$ 145.5 $ 167.0 $ 180.5 $ 118.8

In 1995, the then Vice Chairman of the Company sold assets of a mortgage company
to the Company for a purchase price of $100,000 to be paid out of future profits
generated by mortgage operations relating to those assets. Through December 31,
1998, payments under the terms of this agreement totaled $100,000. The Company
believes that this transaction was made on terms similar to those that would
have been obtained with an unaffiliated party.

The Company had no loans outstanding to related parties at December 31, 1997,
December 31, 1998 or September 30, 1999 (unaudited).

NOTE 14 - EMPLOYEE BENEFITS

The Company participates in a multiple-employer 401(k) profit sharing plan
involving other companies of its primary shareholder. The plan is available for
all Company personnel who have been employed for at least one year. Employees
may contribute up to 10% of their compensation with the Company's discretionary
matching within the limits defined for a 401(k) plan.

Contributions in 1996, 1997 and 1998 were $15,817, $19,341 and $37,478,
respectively.

NOTE 15 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The following summary presents the methodologies and assumptions used to
estimate the fair value of the Company's financial instruments. The Company
operates as a going concern and, except for its investment portfolio, no active
market exists for its financial instruments. Much of the information used to
determine fair value is highly subjective and judgmental in nature and,
therefore, the results may not be precise. The subjective factors include, among
other things, estimates of cash flows, risk characteristics, credit quality and
interest rates, all of which are subject to change. Since the fair value is
estimated as of the balance sheet date, the amounts which will actually be
realized or paid upon settlement or maturity of the various financial
instruments could be significantly different.

CASH AND DUE FROM BANKS, INTEREST-BEARING DEPOSITS IN OTHER BANKS AND FEDERAL
FUNDS SOLD.

For these short-term instruments, the carrying amount approximates fair value.

INVESTMENT SECURITIES.

For investment securities, fair value equals quoted market price, if available.
If a quoted market price is not available, fair value is estimated using quoted
market prices for similar securities. The carrying amount of accrued interest
receivable approximates its fair value.

LOANS.

The fair value of fixed rate loans is estimated by discounting the future cash
flows using the current rates at which similar loans would be made to borrowers
with similar credit ratings and for the same remaining maturities. For variable
rate loans, the carrying amount is a reasonable estimate of fair value. For
loans where

F-17
85
FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

collections of principal are in doubt, an allowance for losses has been
estimated. Loans with similar characteristics were aggregated for purposes of
the calculations. The carrying amount of accrued interest receivable
approximates its fair value.

DEPOSITS.

The fair value of interest bearing deposits with no stated maturity is the
amount payable on demand at the reporting date (i.e. their carrying amount). The
fair value of fixed maturity interest bearing deposits is estimated using a
discounted cash flow calculation that applies the rates currently offered for
deposits of similar remaining maturities. The carrying amount of accrued
interest payable approximates its fair value.

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE.

For securities sold under agreements to repurchase, the carrying amount is a
reasonable estimate of fair value.

OTHER BORROWINGS.

The fair value of other borrowings is estimated by discounting the future cash
flows using the current rate at which a similar loan could be financed.

COMMITMENTS TO EXTEND CREDIT AND STAND-BY LETTERS OF CREDIT.

The fair value of commitments is estimated using the fees currently charged to
enter into similar agreements, taking into account the remaining terms of the
agreements and the present creditworthiness of the counterparts. For fixed-rate
loan commitments, fair value also considers the difference between current
levels of interest rates and the committed rates. The fair value of letters of
credit is based on fees currently charged for similar agreements or on the
estimated cost to terminate them or otherwise settle the obligations with the
counterparts at the reporting date.

F-18
86
FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

The following table presents estimated fair values of the Company's financial
instruments as of December 31, 1997 and 1998:

1997 1998
---------------------- ----------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------

FINANCIAL ASSETS
Cash and due from banks .................................. $ 10,427 $ 10,427 $ 13,892 $ 13,892
Interest bearing deposits
in other banks ....................................... 149 149 3 3
Federal funds sold ....................................... 11,310 11,310 13,270 13,270
Investment securities:
Securities held-to-maturity .......................... 13,042 13,125 7,146 7,250
Securities available-for-sale ........................ 15,470 15,470 27,082 27,082
Loans held for sale ...................................... 4,182 4,182 5,193 5,193
Net loans ................................................ 164,306 164,051 287,802 287,349
Accrued interest receivable .............................. 2,272 2,272 2,902 2,902

FINANCIAL LIABILITIES
Deposits:
Non-interest bearing ................................. 32,238 32,238 44,653 44,653
Interest bearing ..................................... 168,056 168,186 274,827 272,881
Securities sold under agreements
to repurchase ........................................ 2,072 2,072 5,080 5,080
Note payable ............................................. 3,380 3,380 8,790 8,790
Federal Home Loan Bank borrowings ........................ 1,000 1,000 8,650 8,758
Accrued interest payable ................................. 2,770 2,770 3,348 3,348

UNRECOGNIZED FINANCIAL INSTRUMENTS
Commitments to extend credit ............................. 56,010 56,010 118,843 118,843
Stand-by letters of credit ............................... 2,139 2,139 3,799 3,799

NOTE 16 - STOCKHOLDERS' EQUITY AND REGULATORY RESTRICTIONS

The payment of dividends to the Company by the subsidiaries is subject to
various state and federal regulatory limitations.

The Company and the Banks are subject to various regulatory capital requirements
administered by the federal and state banking agencies. Failure to meet minimum
capital requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Company's consolidated financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Banks must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities, and certain off-balance
sheet items as calculated under regulatory accounting practices. The Company and
the Banks' capital amounts and classification are also subject to qualitative
judgments by the regulators about components, risk weightings, and other
factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Banks to maintain minimum amounts and ratios (set forth in the table
below) of total and Tier 1 capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average
assets (as defined). Management believes, as of December 31, 1998 and September
30, 1999 (unaudited), that the Banks meet all minimum capital adequacy
requirements to which they are subject.

F-19
87
FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

As of December 31, 1998, the most recent notification, the Federal Deposit
Insurance Corporation categorized the Nebraska Bank as well capitalized, and the
Colorado Bank as adequately capitalized, under the regulatory framework for
prompt corrective action. To be categorized as well capitalized, a bank must
maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios
as set forth in the table. There are no conditions or events since that
notification that management believes have changed either Bank's category,
except as described in Note 18.

AS OF DECEMBER 31, 1997
--------------------------------------------------------------------
TO BE WELL CAPITALIZED
FOR CAPITAL UNDER PREOMPT CORRECTIVE
ADEQUACY PURPOSES ACTION PROVISIONS
ACTUAL ------------------- ------------------------
------------------ RATIO RATIO
AMOUNT RATIO AMOUNT > OR = AMOUNT > OR =
-------- ----- --------- ------ -------- ------

CONSOLIDATED
Total capital to risk weighted assets............ $ 17,997 9.74% $ 14,788 8% $ 18,485 10%
Tier 1 capital to risk weighted assets........... 16,676 9.02 7,394 4 11,091 6
Tier 1 capital to average assets................. 16,676 7.53 8,861 4 11,076 5

COLORADO BANK
Total capital to risk weighted assets............ $ 12,472 9.10% $ 10,959 8% $ 13,698 10%
Tier 1 capital to risk weighted assets........... 11,855 8.65 5,479 4 8,219 6
Tier 1 capital to average assets................. 11,855 7.66% 6,191 4 7,739 5

NEBRASKA BANK
Total capital to risk weighted assets............ $ 8,278 17.55% $ 3,773 8% $ 4,716 10%
Tier 1 capital to risk weighted assets........... 7,687 16.30 1,887 4 2,830 6
Tier 1 capital to average assets................. 7,687 11.65 2,640 4 3,300 5

AS OF DECEMBER 31, 1998
--------------------------------------------------------------------
TO BE WELL CAPITALIZED
FOR CAPITAL UNDER PREOMPT CORRECTIVE
ADEQUACY PURPOSES ACTION PROVISIONS
ACTUAL ------------------- ------------------------
------------------ RATIO RATIO
AMOUNT RATIO AMOUNT > OR = AMOUNT > OR =
-------- ----- --------- ------ -------- ------

CONSOLIDATED
Total capital to risk weighted assets............ $ 22,564 7.22% $ 25,009 8% $ 31,262 10%
Tier 1 capital to risk weighted assets........... 20,139 6.44 12,504 4 18,757 6
Tier 1 capital to average assets................. 20,139 5.70 14,137 4 17,670 5

COLORADO BANK
Total capital to risk weighted assets............ $ 22,165 8.53% $ 20,780 8% $ 25,976 10%
Tier 1 capital to risk weighted assets........... 20,828 8.02 10,390 4 15,585 6
Tier 1 capital to average assets................. 20,828 7.39 11,275 4 14,094 5

NEBRASKA BANK
Total capital to risk weighted assets............ $ 8,546 16.31% $ 4,192 8% $ 5,240 10%
Tier 1 capital to risk weighted assets........... 7,889 15.05 2,096 4 3,144 6
Tier 1 capital to average assets................. 7,889 11.08 2,848 4 3,559 5

F-20
88

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

AS OF SEPTEMBER 30, 1999 (UNAUDITED)
--------------------------------------------------------------------
TO BE WELL CAPITALIZED
FOR CAPITAL UNDER PREOMPT CORRECTIVE
ADEQUACY PURPOSES ACTION PROVISIONS
ACTUAL ------------------- ------------------------
------------------ RATIO RATIO
AMOUNT RATIO AMOUNT > OR = AMOUNT > OR =
-------- ----- --------- ------ -------- ------

CONSOLIDATED
Total capital to risk weighted assets............ $ 51,179 9.30% $ 44,021 8% $ 55,026 10%
Tier 1 capital to risk weighted assets........... 31,508 5.73 22,010 4 33,015 6
Tier 1 capital to average assets................. 31,508 5.64 22,347 4 27,934 5

COLORADO BANK
Total capital to risk weighted assets............ $ 50,186 10.32% $ 38,897 8% $ 48,621 10%
Tier 1 capital to risk weighted assets........... 46,697 9.60 19,448 4 29,172 6
Tier 1 capital to average assets................. 46,697 9.70 19,257 4 24,071 5

NEBRASKA BANK
Total capital to risk weighted assets............ $ 8,677 14.36% $ 4,833 8% $ 6,041 10%
Tier 1 capital to risk weighted assets........... 7,920 13.11 2,416 4 3,625 6
Tier 1 capital to average assets................. 7,920 10.78 2,939 4 3,674 5

The Federal Reserve Board requires banks to maintain reserve balances composed
of cash on hand and balances maintained at the Federal Reserve Bank. These
reserve balances are based primarily on deposit levels and totaled approximately
$708,000 and $1,071,000 at December 31, 1997 and 1998, respectively.

NOTE 17 - YEAR 2000 UNCERTAINTIES

Like most entities, the Company and its subsidiaries may be exposed to risks
associated with year 2000 dating problems. This problem affects computer
software and hardware; transactions with customers, vendors, and other entities;
and equipment dependent on microchips. As of September 30, 1999 (unaudited), the
Company has completed the process of identifying and remediating potential year
2000 problems. It is not possible for any entity to guarantee the results of its
own remediation efforts or to accurately predict the impact of year 2000 dating
problems on third parties with which the Company does business. If remediation
efforts of the Company or third parties with which it does business are not
successful, it is possible the year 2000 dating problem could negatively impact
the Company's consolidated financial condition and results of operations.

NOTE 18 - SUBSEQUENT EVENTS

ISSUANCE OF PREFERRED SECURITIES (UNAUDITED).

On February 16, 1999, the Company completed the issuance of 2,300,000 of Company
obligated mandatorily redeemable preferred securities of subsidiary trust
holding solely junior subordinated debentures. The preferred securities have
been structured to qualify as Tier 1 capital for regulatory purposes. However,
the securities cannot be used to constitute more than 25% of the Company's total
Tier 1 capital according to regulatory requirements. The Company utilized a
portion of the proceeds of this issuance to inject additional capital into the
Colorado Bank. The additional capital resulted in the Colorado Bank being "well
capitalized" under the regulatory framework for prompt corrective action at
September 30, 1999.

ACQUISITION OF MINORITY SHARES (UNAUDITED).

In the first quarter of 1999, the Company exchanged 232,994 shares of its common
stock for the 8.6% of the Nebraska Bank that it did not own at the time.
Individuals already affiliated with the Company owned such minority shares. As
the Company and its four shareholders at the time of the exchange owned 99.6% of
the Nebraska Bank and the remaining 0.4% was owned by other employees of the
Company, it was determined by the boards of both entities that a book value
exchange ratio represented a fair value for all parties. The fair value
determined for this transaction was $683,000. No goodwill was recognized in
connection with this transaction.

F-21
89

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

CORPORATE RESTRUCTURING.

On September 15, 1999, the Company reorganized as a Colorado corporation and
changed its name to FirsTier Corporation. As a result of the reorganization, the
Company's common stock and surplus accounts have been combined and the Company's
shares have been split 52.48 for one. All share and per share amounts contained
in these financial statements have been restated for this reorganization.

1999 STOCK INCENTIVE PLAN (UNAUDITED).

On September 15, 1999, the Company adopted the FirsTier Corporation 1999 Stock
Incentive Plan to provide incentives for eligible persons including employees,
non-employee directors and consultants to the Company and its subsidiaries. The
total number of Company shares to be issued under this plan shall not exceed
1,700,000 shares. Incentive awards may be granted by the Company's Board of
Directors under this plan. To date, all stock options granted permit the holder
to purchase, under certain limitations, the Company's common stock at a price
not less than 100% of the market value of the stock on the date the option was
granted. These options terminate, contingent upon continued employment and other
factors, approximately 10 years from the date of grant. At the time of the
initial adoption of the plan, 500,000 shares were granted under this plan to an
eligible person. The exercise price per share is $12.00 per share.

NOTE 19 - CONDENSED FINANCIAL STATEMENTS--PARENT COMPANY ONLY

The following presents the condensed parent company only financial statements
for FirsTier Corporation.

CONDENSED BALANCE SHEETS

DECEMBER 31,
----------------------------- SEPTEMBER 30,
1997 1998 1999
------------- ------------ -------------
(UNAUDITED)

ASSETS:
Cash .............................................................. $ 16 $ 15 $ 180
Investment in subsidiaries............................................ 20,523 29,925 56,686
Note receivable from non-bank subsidiary.............................. -- -- 2,450
Other assets.......................................................... 1,173 2,025 3,400
------------- ------------ -------------
Total assets.................................................... $ 21,712 $ 31,965 $ 62,716
============= ============ =============
LIABILITIES:
Note payable.......................................................... $ 3,380 $ 8,790 $ 35,461
Income taxes payable.................................................. 1,309 2,118 2,188
Accounts payable and accrued liabilities.............................. 112 351 739
------------- ------------ -------------
Total liabilities............................................... 4,801 11,259 38,388
------------- ------------ -------------
STOCKHOLDERS' EQUITY:
Common stock.......................................................... 837 837 2,065
Retained earnings..................................................... 16,085 19,460 22,359
Accumulated other comprehensive income (loss)......................... (11) 409 (96)
------------- ------------ -------------
Total stockholders' equity...................................... 16,911 20,706 24,328
------------- ------------ -------------
Total liabilities and stockholders' equity...................... $ 21,712 $ 31,965 $ 62,716
============= ============ =============

F-22
90

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

CONDENSED STATEMENTS OF INCOME

NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------- ----------------------------
1996 1997 1998 1998 1999
------------ ------------- ------------- ----------- -----------
(UNAUDITED)

Income:

Dividends received from subsidiaries.............. $ 890 $ 937 $ 994 $ 996 $ 1,454
Interest.......................................... 26 5 -- -- 125
Other............................................. -- -- 2 -- --
------------ ------------- ------------ ----------- -----------
Total income................................... 916 942 996 996 1,579
------------ ------------- ------------ ----------- -----------
Expenses:
Purchased services................................ 2 294 294 219 232
Interest.......................................... -- 113 299 182 1,552
Other............................................. 26 27 27 9 41
------------ ------------- ------------ ----------- -----------
Total expenses................................. 28 434 620 410 1,825
------------ ------------- ------------ ----------- -----------
Income before income tax expense
(benefit) and equity in
undistributed income of subsidiaries.............. 888 508 376 586 (246)
Income tax expense (benefit)......................... (10) 2 (401) (170) (569)
------------ ------------- ------------ ----------- -----------
Income before equity in undistributed
income of subsidiaries............................ 898 506 777 756 323
Equity in undistributed income of
subsidiaries...................................... 672 1,991 2,598 2,197 3,127
------------ ------------- ------------ ----------- -----------
Net income........................................... $ 1,570 $ 2,497 $ 3,375 $ 2,953 $ 3,450
============ ============= ============ =========== ===========

F-23

FIRSTIER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLE DOLLAR AMOUNTS IN THOUSANDS)

CONDENSED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------- ------------------------
1996 1997 1998 1998 1999
------------ ------------- ------------- ----------- -----------
(UNAUDITED)

Cash flows from operating activities:
Net income...................................... $ 1,570 $ 2,497 $ 3,375 $ 2,953 $ 3,450
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in undistributed income of
subsidiaries................................. (672) (1,991) (2,598) (2,197) (3,127)
Changes in deferrals and accruals:
Other assets................................. (208) (501) (852) (212) (283)
Income taxes payable......................... 205 639 809 274 163
Accounts payable and accrued liabilities..... -- 112 239 341 294
------------ ------------- ------------ ----------- -----------
Net cash provided by operating activities.. 895 756 973 1,159 497
------------ ------------- ------------ ----------- -----------
Cash flows from investing activities:
Capital injection into subsidiary bank.......... -- (3,737) (6,550) (3,750) (22,750)
Capital injection into trust subsidiary......... -- -- -- -- (711)
Purchase of savings bank........................ -- (3,743) -- -- --
Net cash transfers with First
Mortgage Bancorp............................. (1,146) 2,799 166 165 (2,450)
------------ ------------- ------------ ----------- -----------
Net cash used in investing activities...... (1,146) (4,681) (6,384) (3,585) (25,911)
------------ ------------- ------------ ----------- -----------
Cash flows from financing activities:
Proceeds from note payable...................... -- 3,380 6,940 3,850 11,750
Payments on note payable........................ -- -- (1,530) (1,430) (8,790)
Proceeds from junior subordinated
notes issued to trust subsidiary............. -- -- -- -- 23,711
Debt issuance cost.............................. -- -- -- -- (1,092)
------------ ------------- ------------ ----------- -----------
Net cash provided by financing activities.. -- 3,380 5,410 2,420 25,579
------------ ------------- ------------ ----------- -----------
Net (decrease) increase in cash...................... (251) (545) (1) (6) 165
Cash at beginning of period.......................... 812 561 16 16 15
------------ ------------- ------------ ----------- -----------
Cash at end of period................................ $ 561 $ 16 $ 15 $ 10 $ 180
============ ============= ============ =========== ===========

This information is an integral part of the accompanying
consolidated financial statements.

F-24
92

FIRSTIER CORPORATION

COMMON STOCK

[LOGO]

-------------------
PROSPECTUS
-------------------

U.S. BANCORP PIPER JAFFRAY

KEEFE, BRUYETTE & WOODS, INC.

, 2000

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Directors, officers, employees and agents of FirsTier and/or its banks may be
entitled to benefit from the indemnification provisions contained in the
Colorado Business Corporation Act, Title Seven of the Colorado Revised Statutes
(the "CBCA") and FirsTier's articles of incorporation. In addition, certain
provisions in the CBCA and the articles of incorporation limit the liability of
directors. The general effect of these provisions is summarized below:

Article 109 of the CBCA permits a Colorado corporation to indemnify any person
who was or is a party or is threatened to be made a party to any suit, action or
other proceeding by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, or other enterprise. Such indemnification may be
against expenses, including attorneys' fees, judgments, fines and other amounts
in connection with such proceeding. Indemnification is available if such person
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the corporation, or, with respect to any criminal
action or proceeding, such person had no reasonable cause to believe that the
conduct was unlawful. Unless a court of competent jurisdiction otherwise orders,
indemnification is not available in connection with a proceeding by or in the
right of the corporation if the person is adjudged liable to the corporation or
derived an improper personal benefit. A corporation is required to indemnify a
director or officer who is wholly successful in the defense of any such
proceeding. Expenses (including attorneys' fees) incurred by a director,
officer, employee or agent of the corporation in defending any such proceeding
may be advanced by the corporation before the final disposition if such person
furnishes an undertaking to repay such advances if it is ultimately determined
that such person is not entitled to be indemnified. Before a corporation may
indemnify or advance expenses to a person under these provisions, the board of
directors (excluding any directors who are parties to such a proceeding),
independent legal counsel appointed by the board of directors, or the
shareholders must provide authorization. A corporation may purchase insurance
against any liability of individuals for whom the corporation may provide such
indemnification. Any provisions in a corporation's articles of incorporation,
bylaws, resolutions or in a contract (except an insurance policy) for such
indemnification are valid only to the extent not inconsistent with Article 109
of the CBCA.

Section 7-108-402 of the CBCA permits a corporation, if so provided in the
articles of incorporation, to eliminate or limit the personal liability of a
director to the corporation or its shareholders for monetary damages for breach
of fiduciary duty. However, such a provision cannot eliminate or limit such
liability arising out of a breach of the director's duty of loyalty, acts or
omissions not in good faith or which involve intentional misconduct or knowing
violations of law, unlawful distributions, or any transaction for which the
director derived an improper personal benefit. Article X of the articles of
incorporation of the Company provides for such elimination of director
liability.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Securities and Exchange Commission registration fee ... $ 11,352
NASD fee .............................................. 4,793
Nasdaq Stock Market fees .............................. 80,000
Legal fees and expenses ............................... 140,000
Accounting fees and expenses .......................... 30,000
Printing expenses ..................................... 80,000
Blue sky fees and expenses ............................ 1,000
Transfer agent fees ................................... 10,000
Miscellaneous expenses ................................ 42,855
----------
Total ........................................ $ 400,000
==========

All of the above items except the registration fee are estimated.

II-1

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

In May 1997, FirsTier issued 787,143 shares of its common stock to Joel H.
Wiens, Michael J. Nelson, Max W. Revell and Timothy D. Wiens, as custodian for
two of his minor children, in exchange for an 18.2% equity interest in Firstate
Bank of Colorado, which is now a wholly-owned subsidiary of the Registrant. All
of the purchasers were directors and/or officers of FirsTier. No underwriters
were involved in the transaction and the issuance was made in a transaction
exempt from the requirements of Section 5 of the Securities Act of 1933 under
Section 3(a)(9) and Section 4(2) thereof. Reliance on the exemption was based on
the fact that the transaction was limited to the Registrant and its executive
officers and directors.

In March 1999, FirsTier exchanged 232,994 shares of its common stock for the
8.6% of its Nebraska bank that it did not then own. The minority shares were
owned by five persons who were officers or directors of FirsTier or its Nebraska
bank. No underwriters were involved in the transaction and the issuance was made
in a transaction exempt from the requirements of Section 5 of the Securities Act
of 1933 under Section 3(a)(9) and Section 4(2) thereof. Reliance on the
exemption was based on the fact that the transaction was limited to the
Registrant and its executive officers and directors and officers or directors of
its Nebraska bank.

Prior to September 1999, the Registrant was incorporated in Nebraska under the
name First Western Corp. The Registrant redomesticated in Colorado under the
name FirsTier Bancorp, Inc. pursuant to a statutory merger. The Registrant later
changed its name to FirsTier Corporation. The Registrant exchanged 7,579,667
shares of its Common Stock to the seven founding shareholders of First Western
Corp. in connection with the redomestication of First Western Corp. from
Nebraska to Colorado. No underwriters were involved in the transaction and no
commission or other remuneration was paid or given directly or indirectly for
soliciting the exchange and the issuance was made in a transaction exempt from
the requirements of Section 5 of the Securities Act of 1933 under Section
3(a)(9) and Section 4(2) thereof. The transaction was limited to the Registrant
and its seven founding shareholders, all of whom are executive officers and/or
directors of the Registrant, or are controlled by such persons or are directors
of the Registrant's Nebraska bank.

II-2

ITEM 27. EXHIBITS

(a) Exhibits

EXHIBIT NO. DESCRIPTION

1.1 Form of Purchase Agreement (3).

3.1 Articles of Incorporation of FirsTier Corporation, as amended
(2).

3.2 Bylaws of FirsTier Corporation (2).

4.1 Form of Subordinated Indenture dated February 15, 1999 between
the Registrant and Wilmington Trust Company, as Indenture
Trustee (1).

4.2 Form of Junior Subordinated Debenture (included as an exhibit
to Exhibit 4.1).

4.3 Form of Amended and Restated Trust Agreement of FW Capital I,
dated February 15, 1999 (1).

4.4 Form of Preferred Security Certificate of FW Capital I
(included as an exhibit to Exhibit 4.5).

4.5 Form of Preferred Securities Guarantee Agreement (1).

5.1 Opinion of Jones & Keller, P.C. (3).

10.1 Revolving Line of Credit dated February 19, 1998 between
FirsTier as borrower and National Bank of Commerce Trust and
Savings Association (1).

10.2 Advance, Pledge and Security Agreement dated October 21, 1997
between Federal Home Loan Bank of Topeka and Firstate Bank
(1).

10.3 Advance, Pledge and Security Agreement dated March 31, 1997
between Federal Home Loan Bank of Topeka and Firstate Bank of
Colorado (1).

10.4 Line of Credit agreement signed February 24, 1998 between
Firstate Bank of Colorado and Federal Home Loan Bank of Topeka
(1).

10.5 Federal Funds Purchased Line agreement between Firstate Bank
and Wells Fargo Bank (1).

10.6 Federal Funds Purchased Line agreement dated August 25, 1998
between Firstate Bank of Colorado and Bankers Bank of the West
(1).

10.7 Federal Funds Purchased Line agreement dated October 20, 1997
between Firstate Bank and Bankers Bank of the West (1).

10.8 Management Agreement between FirsTier and Western Management
Corporation dated January 21, 1997 (1).

10.9 Management Agreement between Firstate Bank of Colorado and
Western Management Corporation dated January 4, 1993 (1).

10.10 Management Agreement between Firstate Bank of Nebraska and
Western Management Corporation dated January 21, 1998 (1).

10.11 Management Agreement between First Mortgage Bancorp and
Western Management Corporation dated January 21, 1997 (1).

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10.12 Electronic Data Processing Agreement between First Commerce
Technologies and Firstate Bank dated May 8, 1998 (1).

10.13 Electronic Data Processing Agreement between First Commerce
Technologies and Firstate Bank of Colorado dated April 14,
1998 (1).

10.14 1999 Incentive Plan (2).

10.15 Lease dated July 27, 1999 between JMT, LLC and FirsTier (2).

10.16 Form of Lockup Agreement (2).

11.1 Statement re Computation of per share earnings - see
Consolidated Financial Statements.

21 Subsidiaries of the Registrant (2).

23.1 Consent of Clifton Gunderson L.L.C. (2).

24.1 Power of Attorney - see Signature Page hereof.

- ----------

(1) Filed with the Registration Statement on Form SB-2, SEC File No. 333-67107,
on November 13, 1998.
(2) Filed herewith.
(3) To be filed by amendment.

ITEM 28. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant under the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission the
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
the liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by the
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether the indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
the issue.

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THE REGISTRANT HEREBY UNDERTAKES THAT:

(1) For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Registrant under Rule 424(b)(1) or (4) or 497(h) under
the Securities Act will be deemed to be part of the registration statement as of
the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus will be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of the securities at that time will be deemed to be
the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Northglenn, State of Colorado, on this 21st day of
December, 1999.

FirsTier Corporation

By: /s/ Timothy D. Wiens
--------------------------------------
Timothy D. Wiens, President

POWER OF ATTORNEY

KNOW ALL BY THESE PRESENTS, that each person whose signature appears below
hereby constitutes and appoints Joel H. Wiens and Timothy D. Wiens and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the SEC,
granting upon said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or either of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in their capacities of
FirsTier Corporation and on the dates indicated.

SIGNATURES TITLE DATE
- ---------- ----- -----

/s/ Timothy D. Wiens
- ----------------------- Director, President and Chief December 21, 1999
Timothy D. Wiens Executive Officer (Principal
Executive Officer)
/s/ Joel H. Wiens
- ----------------------- Director and Chairman December 21, 1999
Joel H. Wiens

/s/ Michael J. Nelson
- ----------------------- Director December 21, 1999
Michael J. Nelson

/s/ Ronald B. James
- ----------------------- Treasurer and Chief Financial December 21, 1999
Ronald B. James Officer (Principal Accounting
Officer)

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EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION
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