<PAGE>
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number - 000-22007
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below.
Southwest Bank of Texas 401(k) Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Southwest Bancorporation of Texas, Inc.
4400 Post Oak Parkway
Houston, Texas 77027
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
TABLE OF CONTENTS
-------------
<TABLE>
<CAPTION>
Page(s)
-------
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for
Benefits as of December 31, 1998 and 1997 2
Statement of Changes in Net Assets Available
for Benefits for the years ended December 31,
1998, 1997 and 1996 3
Notes to Financial Statements 4-17
Supplementary Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1998 18
Item 27d - Schedule of Reportable Transactions
for the year ended December 31, 1998 19
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrative Committee
Southwest Bank of Texas 401(k)
Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the Southwest Bank of Texas 401(k) Savings Plan as of December 31, 1998 and
1997, and the related statements of changes in net assets available for benefits
for the three years ended December 31, 1998, 1997 and 1996. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these 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 financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Southwest Bank
of Texas 401(k) Savings Plan as of December 31, 1998 and 1997, and the changes
in its net assets available for benefits for the years ended December 31, 1998,
1997 and 1996 in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for purposes
of complying with the Department of Labor Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974 and are
not a required part of the basic financial statements. Such schedules have been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated, in all materials respects, in
relation to the basic financial statements taken as a whole.
Houston, Texas
June 24, 1999
/s/ Ham, Langston & Brezina, L.L.P.
-1-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
---------
<TABLE>
<CAPTION>
1998 1997
----------- ----------
<S> <C> <C>
Cash $ 139,341 $ 75,697
Investments:
Money market funds 44,057 22,073
Common stock 3,722,371 2,646,996
Shares of registered investment companies,
reported at fair value:
American Industries Trust Short Term Income
Fund 681,658 165,921
Fidelity Spartan US Equity Index Fund 818,341 78,981
Fidelity Puritan Fund 1,185,668 671,007
Dreyfus Short-Intermediate Government Bond Fund - 212,449
PBHG Growth Fund 759,225 673,731
Fidelity Growth and Income Fund 2,093,741 903,064
Warburg Pincus International Equity Fund - 322,068
American Industries Trust SMART Aggressive Fund 118,883 -
American Industries Trust SMART Moderate Fund 292,425 -
American Industries Trust SMART Conservative
Fund 388,670 -
AIM Value Fund Class A 1,029,965 -
Baron Asset Fund 499,442 -
Janus Worldwide Fund 897,148 -
Loomis Sayles Bond Fund 234,112 -
Yacktman Fund 202,046 -
----------- ----------
Total investments 12,967,752 5,696,290
Accounts receivable 64,080 1,245
Loans to participants 479,211 309,408
----------- ----------
Net assets 13,650,384 6,082,640
Contribution deposit - Pinemont Bank Employee
Savings Plan - 31,184
Accounts payable - purchase of securities 42,521 19,122
Accounts payable - taxes withheld 999 -
----------- ----------
Net assets available for benefits $13,606,864 $6,032,334
=========== ==========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
-2-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
---------
<TABLE>
<CAPTION>
1998 1997 1996
----------- ---------- -----------
<S> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Interest and/or dividends $ 79,149 $ 25,648 $ 18,292
Net appreciation in fair
value of investments 1,508,069 1,552,289 471,711
----------- ---------- ----------
Total investment
income 1,587,218 1,577,937 490,003
----------- ---------- ----------
Contributions:
Transfer in from other plan 1,949,649 - -
Employer 972,277 212,818 175,601
Employee 3,456,964 716,187 706,305
----------- ---------- ----------
Total contributions 6,378,890 929,005 881,906
----------- ---------- ----------
Total additions 7,966,108 2,506,942 1,371,909
----------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants 391,578 215,579 67,074
Administrative expenses - 233 380
----------- ---------- ----------
Total deductions 391,578 215,812 67,454
----------- ---------- ----------
Increase in net assets available
for benefits 7,574,530 2,291,130 1,304,455
Net assets available for benefits
at beginning of year 6,032,334 3,741,204 2,436,749
----------- ---------- ----------
Net assets available for benefits
at end of year $13,606,864 $6,032,334 $3,741,204
=========== ========== ==========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
-3-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
---------
1. DESCRIPTION OF PLAN
The following description of the Southwest Bank of Texas (the "Company")
401(k) Savings Plan (the "Plan") (formerly Southwest Bank of Texas
National Association Savings Plan) provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provision.
GENERAL
The Plan, adopted by the Company's board of directors and effective
December 30, 1985 is a defined contribution plan covering all employees
who have attained the age of eighteen years (18) and have completed one
full year of service as defined in the Plan. Effective January 1, 1994,
the Plan was amended and restated to conform to a prototype plan offered
by American Industries Trust Company (the "Custodian"). The Plan is
subject to the Employee Retirement Income Security Act of 1974 ("ERISA").
CONTRIBUTIONS
Each year participants may elect to defer from 1% to 15% of pretax annual
compensation to the Plan, subject to the limitations specified in the
Internal Revenue Code. The Company is required to make matching
contributions equal to 100% of the participant's eligible deferred
contributions not to exceed 5% of the participant's annual compensation
for the Plan Year. The Plan also allows the Company to make discretionary
contributions as determined by the board of directors.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contributions, earnings on the investments selected by the participant
and Company matching and discretionary contributions. Company
contributions and earnings on investments are allocated to each
participant's account according to compensation based allocation formulas
contained in the Plan agreement. Forfeitures can be used to pay expenses
under the Plan. Forfeitures not used to pay expenses are allocated to
each participant's account according to compensation based allocation
formulas contained in the Plan agreement. The Company pays substantially
all expenses of plan administration.
Continued
-4-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
1. DESCRIPTION OF PLAN, CONTINUED
VESTING
Participants are immediately vested in their contributions and earnings
thereon. Participants become vested in Company contributions according to
the following schedule:
<TABLE>
<CAPTION>
Years of Service Vesting
---------------- -------
<S> <C>
Less than 1 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
</TABLE>
PARTICIPANT LOANS
The Custodian may make loans to participants from the Plan, subject to
the provisions of the trust instrument.
PAYMENT OF BENEFITS
The account of a withdrawing participant is equal to the current market
value of his or her vested balance in the account. The normal retirement
age under the Plan is 65 but early retirement is allowed at or after age
55. Hardship withdrawals are allowed under the Plan before age 55 but
such withdrawals may have income tax consequences to the participant.
Benefits are generally paid by lump-sum distribution.
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct all of his or her
contributions into one or more of the investment options offered by the
Custodian as follows:
-5-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
1. DESCRIPTION OF PLAN, CONTINUED
INVESTMENT OPTIONS, CONTINUED
AMERICAN INDUSTRIES TRUST SHORT TERM INCOME FUND
Funds are invested in shares of a registered investment company that
invests in short-term obligations (money market accounts, certificates of
deposit, or commercial paper) and U.S. governmental obligations (treasury
bills or agency notes).
FIDELITY SPARTAN U.S. EQUITY INDEX FUND
Funds are invested in shares of a registered investment company that
invests in selected common stock of the five hundred companies that make
up the Standard & Poor's 500 Index ("S&P 500") and in other securities
that are based on the S&P 500.
SOUTHWEST BANCORPORATION OF TEXAS, INC. STOCK FUND
Funds are invested in common stock of Southwest Bancorporation of
Texas, Inc. and Subsidiaries.
FIDELITY PURITAN FUND
Funds are invested in shares of a registered investment company that
invests in equity securities, bonds and money market instruments.
DREYFUS SHORT-INTERMEDIATE GOVERNMENT BOND FUND
Funds are invested in shares of a registered investment company that
invests in government bonds with intermediate term maturities.
PBHG GROWTH FUND
Funds are invested in shares of a registered investment company that
invests in equity securities of companies which management believes have
the potential for strong earnings growth and capital appreciation.
FIDELITY GROWTH AND INCOME FUND
Funds are invested in shares of a registered investment company that
invests in equity securities that seek long-term growth of capital and
income.
-6-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
1. DESCRIPTION OF PLAN, CONTINUED
INVESTMENT OPTIONS, CONTINUED
WARBURG PINCUS INTERNATIONAL EQUITY FUND
Funds are invested in shares of a registered investment company that
invests in selected common stock of foreign corporations.
AMERICAN INDUSTRIES TRUST SMART AGGRESSIVE FUND
Funds are invested in shares of a registered investment company that
invests primarily in common stock of domestic and foreign companies with
the potential for high growth.
AMERICAN INDUSTRIES TRUST SMART MODERATE FUND
Funds are invested in shares of a registered investment company that
invests in intermediate-term bonds and common stock of domestic and
foreign companies with the potential for long-term capital growth.
AMERICAN INDUSTRIES TRUST SMART CONSERVATIVE FUND
Funds are invested in shares of a registered investment company that
invests in U.S. government securities, intermediate-term bonds and common
stock of domestic and foreign companies that provide an opportunity for
capital growth that exceeds inflation.
AIM VALUE FUND A
Funds are invested in shares of a registered investment company that
invests in common stocks of large domestic companies which have the
potential for long-term capital appreciation.
BARON ASSET FUND
Funds are invested in shares of a registered investment company that
invests in common stocks of small to medium-sized companies with
undervalued assets and the potential for high capital growth.
JANUS WORLDWIDE FUND
Funds are invested in shares of a registered investment company that
invests in common stocks of domestic and foreign companies with the
potential for long-term capital appreciation in a manner consistent with
capital preservation.
-7-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
1. DESCRIPTION OF PLAN, CONTINUED
INVESTMENT OPTIONS, CONTINUED
LOOMIS SAYLES BOND FUND
Funds are invested in shares of a registered investment company that
invests in preferred stocks and long-term bonds in order to achieve a
high total return through a combination of current income and capital
appreciation.
YACKTMAN FUND
Funds are invested in shares of a registered investment company that
invests in common stocks of medium-sized domestic companies with the
potential for long-term capital appreciation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual
method of accounting.
INVESTMENT VALUATION
Funds deposited in short-term income accounts are valued at contract
value as reported to the Plan by the Custodian. Investments in various
pooled separate accounts offered by the Custodian are valued at estimated
fair value as determined by the Custodian. Investments in registered
investment companies (mutual funds) are valued based on quoted market
prices in an active market. Investments in employer common stock are
valued at the closing market price on the last business day of the Plan's
fiscal year.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
-8-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses on sale of
investments and unrealized appreciation (depreciation) on those
investments.
3. RISKS AND UNCERTAINTIES
CREDIT RISK
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds and other investment
securities. Investment securities, in general, are exposed to various
risks, such as interest rate, credit and overall market volatility risk.
Due to the level of risk associated with certain investment securities,
it is reasonably possible that changes in the values of investment
securities will occur in the near term and that such changes could
materially affect the amounts reported in the statements of net assets
available for plan benefits and the amounts reported in participant
accounts.
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 issue is the result of computer programs and hardware with
embedded date technology using two digits to define the applicable year
rather than four. Any programs or hardware that are time sensitive and
have not been determined to be Year 2000 compliant may recognize a date
using "00" as the year 1900 rather than the year 2000. Such improper date
recognition could, in turn, result in erroneous processing of data, or,
in extreme situations, system failure.
In anticipation of the Year 2000 issue, both the Company and the
Custodian implemented Year 2000 programs which included the performance
of inventories of information technology and non- information technology
systems, assessments of potential problem areas, testing of systems for
Year 2000 readiness, and modification of systems that are not Year 2000
compliant.
The Company and the Custodian believe all of their core systems are Year
2000 compliant.
-9-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
3. RISKS AND UNCERTAINTIES, CONTINUED
IMPACT OF THE YEAR 2000 ISSUE, CONTINUED
Although the Company and the Custodian expect to be ready to continue
business activities without interruption by a Year 2000 problem, each
recognizes the general uncertainty inherent in the Year 2000 issue, in
part because of the uncertainty about the Year 2000 readiness of third
parties. Under a "worst case Year 2000 scenario", it may be necessary to
temporarily interrupt normal plan activities. The Trustees do not believe
that such circumstances would result in a material adverse impact on Plan
operations. The Company and the Custodian have begun, but not yet
completed, development of contingency plans to deal with the "most likely
worst case Year 2000 scenario". The contingency plans are expected to be
completed during the third quarter of 1999.
The cost of becoming Year 2000 compliant is not expected to be
significant and such cost will be borne by the Company and the Custodian.
4. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by American
Industries. American Industries is the Trustee as defined by the Plan
and, therefore, these transactions qualify as party-in-interest. Trustee
fees paid by the Company, on behalf of the Plan, were approximately
$63,000, $42,000 and $23,000 for the years ended December 31, 1998, 1997
and 1996, respectively.
5. TAX STATUS
The Plan is designed to constitute a qualified plan under section 401(k)
of the Internal Revenue Code. The Plan obtained its latest determination
letter dated January 5, 1996 in which the Internal Revenue Service stated
that the Plan, as amended, is in compliance with the applicable
requirements of the Internal Revenue Code.
6. PLAN INVESTMENTS
Following is an analysis of activity within each investment option for
the years ended December 31, 1998, 1997 and 1996.
-10-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
6. PLAN INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
AIT SHORT DREYFUS FIDELITY
TERM INCOME GOVERNMENT GROWTH
FUND BOND FUND BOND FUND
------------ ---------- ----------
<S> <C> <C> <C>
Balance at January 1, 1996 $ - $ - $ -
Additions to net assets attributable to:
Interest and/or dividends 1,645 1,136 375
Net appreciation in fair value of investments 7,403 6,665 1,901
Employer contributions 5,858 8,731 7,243
Employee contributions 39,594 29,959 12,691
---------- ---------- ----------
Total additions 54,500 46,491 22,210
---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants 655 11,040 68
Administrative expenses - - -
---------- ---------- ----------
Total deductions 655 11,040 68
---------- ---------- ----------
Interfund transfers 143,660 133,258 507,334
---------- ---------- ----------
Balance at December 31, 1996 197,505 168,709 529,476
Additions to net assets attributable to:
Interest and/or dividends 1,035 235 5,354
Net appreciation in fair value of investments 10,430 11,182 182,718
Employer contributions 9,527 8,770 28,100
Employee contributions 37,752 37,735 142,525
---------- ---------- ----------
Total additions 58,744 57,922 358,697
Deductions from net assets attributable to:
Benefits to participants 27,066 7,714 28,515
Administrative expenses - - -
---------- ---------- ----------
Total deductions 27,066 7,714 28,515
Interfund transfers (63,262) (6,468) 43,406
---------- ---------- ----------
Balance at December 31, 1997 165,921 212,449 903,064
Additions to net assets attributable to:
Interest and/or dividends 1,272 - 5,923
Net appreciation in fair value of investments 34,701 1,499 362,453
Transfer in from other plan 272,667 - 143,775
Employer contributions 51,875 - 132,500
Employee contributions 635,157 - 273,619
---------- ---------- ----------
Total additions 995,672 1,499 918,270
---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants 110,811 - 22,838
---------- ---------- ----------
Total deductions 110,811 - 22,838
---------- ---------- ----------
Interfund transfers (369,124) (213,948) 295,245
---------- ---------- ----------
Balance at December 31, 1998 $ 681,658 $ - $2,093,741
========== ========== ==========
</TABLE>
-11-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
6. PLAN INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
FEDERATED NEUBERGER
CAPITAL FIDELITY & BERMAN PBHG
PRESERVATION PURITAN LTD. MAT. GROWTH
FUND FUND BOND FUND FUND
------------ ---------- ---------- ---------
<S> <C> <C> <C> <C>
Balance at January 1, 1996 $ 151,818 $ 339,428 $ 155,782 $ 490,040
Additions to net assets attributable to:
Interest and/or dividends 162 3,933 106 4,502
Net appreciation in fair value of investments 2,235 58,865 (1,274) 41,804
Employer contributions - 9,814 - 7,924
Employee contributions 6,444 110,924 9,127 256,404
---------- ---------- ---------- ----------
Total additions 8,841 183,536 7,959 310,634
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants 3,240 9,281 - 13,094
Administrative expenses - - - -
---------- ---------- ---------- ----------
Total deductions 3,240 9,281 - 13,094
---------- ---------- ---------- ----------
Interfund transfers (157,419) (27,999) (163,741) (68,849)
---------- ---------- ---------- ----------
Balance at December 31, 1996 - 485,684 - 718,731
Additions to net assets attributable to:
Interest and/or dividends - 3,272 - 6,616
Net appreciation in fair value of investments - 112,164 - (18,150)
Employer contributions - 20,732 - 27,866
Employee contributions - 115,891 - 142,184
---------- ---------- ---------- ----------
Total additions - 252,059 - 158,516
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants - 23,799 - 27,919
Administrative expenses - - - -
---------- ---------- ---------- ----------
Total deductions - 23,799 - 27,919
---------- ---------- ---------- ----------
Interfund transfers - (42,937) - (175,597)
---------- ---------- ---------- ----------
Balance at December 31, 1997 - 671,007 - 673,731
Additions to net assets attributable to:
Interest and/or dividends - 3,687 - 3,669
Net appreciation in fair value of investments - 142,887 - 2,570
Transfer in from other plan - 105,528 - 78,611
Employer contributions - 71,792 - 81,494
Employee contributions - 171,303 - 163,941
---------- ---------- ---------- ----------
Total additions - 495,197 - 330,285
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants - 17,466 - 18,093
---------- ---------- ---------- ----------
Total deductions - 17,466 - 18,093
---------- ---------- ---------- ----------
Interfund transfers - 36,930 - (226,698)
---------- ---------- ---------- ----------
Balance at December 31, 1998 $ - $1,185,668 $ - $ 759,225
========== ========== ========== ==========
</TABLE>
-12-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
6. PLAN INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
FIDELITY WARBURG WARBURG
SPARTAN US PINCUS PINCUS
EQUITY INDEX GROWTH & INTERNAT'L COMMON
FUND INC. FUND EQUITY FUND STOCK
------------ ---------- ----------- ----------
<S> <C> <C> <C> <C>
Balance at January 1, 1996 $ - $ 428,461 $ 223,113 $ 468,394
Additions to net assets attributable to:
Interest and/or dividends - 3,500 2,933 -
Net appreciation in fair value of investments - 9,224 26,065 318,823
Employer contributions - 2,325 5,074 128,632
Employee contributions - 128,787 61,076 51,299
---------- ---------- ---------- ----------
Total additions - 143,836 95,148 498,754
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants - 14,685 518 14,493
Administrative expenses - - - -
---------- ---------- ---------- ----------
Total deductions - 14,685 518 14,493
---------- ---------- ---------- ----------
Interfund transfers - (557,612) 16,996 47,871
---------- ---------- ---------- ----------
Balance at December 31, 1996 - - 334,739 1,000,526
Additions to net assets attributable to:
Interest and/or dividends 391 - 2,358 6,387
Net appreciation in fair value of investments 7,547 - (15,526) 1,261,924
Employer contributions 5,263 - 13,248 99,312
Employee contributions 16,488 - 69,508 154,104
---------- ---------- ---------- ----------
Total additions 29,689 - 69,588 1,521,727
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants 110 - 15,730 84,726
Administrative expenses - - - -
---------- ---------- ---------- ----------
Total deductions 110 - 15,730 84,726
---------- ---------- ---------- ----------
Interfund transfers 49,402 - (66,529) 209,469
---------- ---------- ---------- ----------
Balance at December 31, 1997 78,981 - 322,068 2,646,996
Additions to net assets attributable to:
Interest and/or dividends 1,931 - - 56,438
Net appreciation in fair value of investments 122,855 - 1,704 393,404
Transfer in from other plan 85,602 - - 144,406
Employer contributions 68,453 - - 231,758
Employee contributions 236,504 - - 870,206
---------- ---------- ---------- ----------
Total additions 515,345 - 1,704 1,696,212
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants 15,874 - - 118,865
---------- ---------- ---------- ----------
Total deductions 15,874 - - 118,865
---------- ---------- ---------- ----------
Interfund transfers 239,889 - (323,772) (501,972)
---------- ---------- ---------- ----------
Balance at December 31, 1998 $ 818,341 $ - $ - $3,722,371
========== ========== ========== ==========
</TABLE>
-13-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
6. PLAN INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
AIT SMART AIT SMART AIT SMART
RECEIVABLES/ AGGRESSIVE MODERATE CONSERVATIVE
OTHER FUND FUND FUND
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Balance at January 1, 1996 $ 179,713 $ - $ - $ -
Additions to net assets attributable to:
Interest and/or dividends - - - -
Net appreciation in fair value of investments - - - -
Employer contributions - - - -
Employee contributions - - - -
---------- ---------- ---------- ----------
Total additions - - - -
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants - - - -
Administrative expenses 380 - - -
---------- ---------- ---------- ----------
Total deductions 380 - - -
---------- ---------- ---------- ----------
Interfund transfers 126,501 - - -
---------- ---------- ---------- ----------
Balance at December 31, 1996 305,834 - - -
Additions to net assets attributable to:
Interest and/or dividends - - - -
Net appreciation in fair value of investments - - - -
Employer contributions - - - -
Employee contributions - - - -
---------- ---------- ---------- ----------
Total additions - - - -
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants - - - -
Administrative expenses 233 - - -
---------- ---------- ---------- ----------
Total deductions 233 - - -
---------- ---------- ---------- ----------
Interfund transfers 52,516 - - -
---------- ---------- ---------- ----------
Balance at December 31, 1997 358,117 - - -
Additions to net assets attributable to:
Interest and/or dividends - 155 1,230 608
Net appreciation in fair value of investments - 16,38 1 31,404 34,883
Transfer in from other fund - 51,008 152,576 293,763
Employer contributions - 22,088 33,884 17,540
Employee contributions - 37,653 55,400 25,596
---------- ---------- ---------- ----------
Total additions - 127,285 274,494 372,390
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants - 40,710 1,614 249
---------- ---------- ---------- ----------
Total deductions - 40,710 1,614 249
---------- ---------- ---------- ----------
Interfund transfers 325,052 32,308 19,545 16,529
---------- ---------- ---------- ----------
Balance at December 31, 1998 $ 683,169 $ 118,883 $ 292,425 $ 388,670
========== ========== ========== ==========
</TABLE>
-14-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
6. PLAN INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
AIM VALUE BARON JANUS LOOMIS
FUND ASSET WORLDWIDE SAYLES
CLASS A FUND FUND BOND FUND
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance at January 1, 1996 $ - $ - $ - $ -
Additions to net assets attributable to:
Interest and/or dividends - - - -
Net appreciation in fair value of investments - - - -
Employer contributions - - - -
Employee contributions - - - -
---------- ---------- ---------- ----------
Total additions - - - -
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants - - - -
Administrative expenses - - - -
---------- ---------- ---------- ----------
Total deductions - - - -
---------- ---------- ---------- ----------
Interfund transfers - - - -
---------- ---------- ---------- ----------
Balance at December 31, 1996 - - - -
Additions to net assets attributable to:
Interest and/or dividends - - - -
Net appreciation in fair value of investments - - - -
Employer contributions - - - -
Employee contributions - - - -
---------- ---------- ---------- ----------
Total additions - - - -
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants - - - -
Administrative expenses - - - -
---------- ---------- ---------- ----------
Total deductions - - - -
---------- ---------- ---------- ----------
Interfund transfers - - - -
---------- ---------- ---------- ----------
Balance at December 31, 1997 - - - -
Additions to net assets attributable to:
Interest and/or dividends 1,025 791 2,063 84
Net appreciation in fair value of investments 186,401 44,294 126,999 5,845
Transfer in from other fund 165,638 136,366 93,485 130,811
Employer contributions 62,649 66,926 78,738 29,986
Employee contributions 378,452 194,450 190,689 113,963
---------- ---------- ---------- ----------
Total additions 794,165 442,827 491,974 280,689
---------- ---------- ---------- ----------
Deductions from net assets attributable to:
Benefits to participants 16,685 10,659 10,957 2,940
---------- ---------- ---------- ----------
Total deductions 16,685 10,659 10,957 2,940
---------- ---------- ---------- ----------
Interfund transfers 252,485 67,274 416,131 (43,637)
---------- ---------- ---------- ----------
Balance at December 31, 1998 $1,029,965 $ 499,442 $ 897,148 $ 234,112
========== ========== ========== ==========
</TABLE>
-15-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
6. PLAN INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
YACKTMAN
FUND TOTAL
---------- -----------
<S> <C> <C>
Balance at January 1, 1996 $ - $ 2,436,749
Additions to net assets attributable to:
Interest and/or dividends - 18,292
Net appreciation in fair value of investments - 471,711
Employer contributions - 175,601
Employee contributions - 706,305
---------- -----------
Total additions - 1,371,909
---------- -----------
Deductions from net assets attributable to:
Benefits to participants - 67,074
Administrative expenses - 380
---------- -----------
Total deductions - 67,454
---------- -----------
Interfund transfers - -
---------- -----------
Balance at December 31, 1996 - 3,741,204
Additions to net assets attributable to:
Interest and/or dividends - 25,648
Net appreciation in fair value of investments - 1,552,289
Employer contributions - 212,818
Employee contributions - 716,187
---------- -----------
Total additions - 2,506,942
---------- -----------
Deductions from net assets attributable to:
Benefits to participants - 215,579
Administrative expenses - 233
---------- -----------
Total deductions - 215,812
---------- -----------
Interfund transfers - -
---------- -----------
Balance at December 31, 1997 - 6,032,334
Additions to net assets attributable to:
Interest and/or dividends 273 79,149
Net appreciation in fair value of investments (211) 1,508,069
Transfer in from other fund 95,413 1,949,649
Employer contributions 22,594 972,277
Employee contributions 110,031 3,456,964
---------- -----------
Total additions 228,100 7,966,108
---------- -----------
Deductions from net assets attributable to:
Benefits to participants 3,817 391,578
---------- -----------
Total deductions 3,817 391,578
---------- -----------
Interfund transfers (22,237) -
---------- -----------
Balance at December 31, 1998 $ 202,046 $13,606,864
========== ===========
</TABLE>
-16-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
---------
7. SUBSEQUENT EVENTS
On April 1, 1999 the Fort Bend Federal Savings and Loan Association of
Rosenberg Profit Sharing Plan and Trust and Fort Bend Holding
Corporation Employee Stock Ownership Plan (the "Fort Bend Plans") were
merged into the Plan. The transferred net assets have been recognized
in the accounts of the Plan as of April 1, 1999, at their balances as
previously carried in the accounts of the Fort Bend Plans. The total
amount of net assets available for benefits transferred on April 1,
1999 was $9,000,243.
-17-
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
---------
<TABLE>
<CAPTION>
NUMBER MARKET
DESCRIPTION OF SHARES COST VALUE
- ----------- ------------ ----------- -----------
<S> <C> <C> <C>
Common stocks 207,734.0000 $ 2,212,993 $ 3,722,371
Money market funds 44,057.0000 44,057 44,057
Shares of registered investment companies:
American Industries Trust Short
Term Income Fund 681,658.5500 681,658 681,658
Fidelity Spartan US Equity Index Fund 18,615.5770 704,379 818,341
Fidelity Puritan Fund 59,076.6180 1,097,064 1,185,668
PBHG Growth Fund 29,726.9040 702,834 759,225
Fidelity Growth and Income Fund 45,674.9850 1,720,808 2,093,741
American Industries Trust SMART
Aggressive Fund 10,489.9390 107,542 118,883
American Industries Trust SMART
Moderate Fund 25,612.1622 261,969 292,425
American Industries Trust SMART
Conservative Fund 35,274.8595 354,435 388,670
AIM Value Fund Class A 25,627.3840 912,199 1,029,965
Baron Asset Fund 9,882.1140 456,193 499,442
Janus Worldwide Fund 18,943.1690 780,333 897,148
Loomis Sayles Bond Fund 19,590.9350 250,704 234,112
Yacktman Fund 17,402.7680 235,970 202,046
----------- -----------
Total investment in shares of
registered investment companies 8,266,088 9,201,324
----------- -----------
Total assets held for investment
purposes $10,523,138 $12,967,752
=========== ===========
Loans to participants bearing
interest at rates ranging
from 7.0% to 10.0% $ - $ 479,211
=========== ===========
</TABLE>
-18-
<PAGE>
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
---------
<TABLE>
<CAPTION>
NUMBER OF PURCHASE SELLING CURRENT NET GAIN
IDENTITY OF PARTY INVOLVED TRANSACTIONS PRICE PRICE VALUE (LOSS)
- -------------------------- ------------ -------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Single transactions in excess of 5%:
Short Term Income Fund $ 382,859 $ 382,859
Short Term Income Fund 1,918,451 1,918,451
Warburg Pincus International
Equity 372,306 $ 323,772 $ (48,534)
Mutual Fund Cash Clearing
Account 332,960 332,960
Mutual Fund Cash Clearing
Account 552,836 552,836
Mutual Fund Cash Clearing
Account 548,986 548,986
Southwest Bank of Texas 1,918,451 1,918,451
SMART Conservative Fund 291,658 291,658
Short Term Income Fund 496,946 496,946
Short Term Income Fund 1,918,451 1,918,451
Janus Worldwide Fund 324,027 324,027
Mutual Fund Cash Clearing
Account 323,772 323,772
Mutual Fund Cash Clearing
Account 554,607 554,607
Mutual Fund Cash Clearing
Account 549,514 549,514
Southwest Bank of Texas 1,918,451 1,918,451
Series of transactions:
Short Term Income Fund 140 884,599 884,599
Short Term Income Fund 194 1,539,637 1,539,637
Short Term Income Fund 1 1,918,451 1,918,451
Fidelity Money Market Fund 161 2,608,489 2,608,489
PBHG Growth Fund 401 288,602 291,619 3,017
Warburg Pincus International
Equity 1 372,306 323,772 (48,534)
Mutual Fund Cash Clearing
Account 1,265 6,363,457 6,363,457
Southwest Bank of Texas 1 1,918,451 1,918,451
Southwest Bank of Texas 81 573,493 1,060,617 487,124
SMART Conservative Fund 103 367,039 367,039
SMART Moderate Fund 54 297,467 297,467
Short Term Income Fund 251 1,488,694 1,488,694
Short Term Income Fund 187 1,561,654 1,561,654
Short Term Income Fund 1 1,918,451 1,918,451
Fidelity Money Market Fund 170 2,608,457 2,608,457
Fidelity Growth & Income
Portfolio 145 1,082,905 1,082,905
Yacktman Fund 66 286,422 286,422
Fidelity Puritan Fund 121 650,730 650,730
PBHG Growth Fund 92 374,155 374,155
Loomis Sayles Bond Fund 73 319,146 319,146
AIM Value Fund Class A 102 1,019,667 1,019,667
Fidelity Spartan US Equity
Index 96 707,644 707,644
Janus Worldwide Fund 111 883,804 883,804
Baron Asset Fund 99 577,569 577,569
Mutual Fund Cash Clearing
Account 865 6,275,099 6,275,099
Southwest Bank of Texas 1 1,918,451 1,918,451
Southwest Bank of Texas 86 1,708,456 1,708,456
</TABLE>
-19-
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN
Date: June 29, 1999 /s/ ANTHONY TORENTINOS
-------------------------------------------
Anthony Torentinos
Plan Administrator
-20-
<PAGE>
INDEX TO EXHIBITS
NO. EXHIBITS
- ---- --------
23.1 Consent of Ham, Langston & Brezina, L.L.P.
-21-
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement of Southwest Bancorporation of Texas, Inc. on Form S-8 (File No.
333-27891) of our Report dated June 24, 1999, on our audit of the financial
statements of the Southwest Bank of Texas 401(k) Savings Plan as of December 31,
1998 and 1997 and for the years ended December 31, 1998, 1997 and 1996, which
report is included in this Annual Report on Form 11-K.
/s/ Ham, Langston & Brezina, L.L.P.
Houston, Texas
June 29, 1999
