SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
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ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
------------------------
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION OF
ROSENBERG PROFIT SHARING PLAN AND TRUST
------------------------
SOUTHWEST BANCORPORATION OF TEXAS, INC.
4400 POST OAK PARKWAY
HOUSTON, TEXAS 77027
<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION OF
ROSENBERG PROFIT SHARING PLAN AND TRUST
FINANCIAL STATEMENTS
WITH INDEPENDENT ACCOUNTANTS' REPORT
FOR THE PERIODS ENDED JUNE 21, 1999, DECEMBER 31, 1998 AND 1997
<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION OF
ROSENBERG PROFIT SHARING PLAN AND TRUST
TABLE OF CONTENTS
PAGE(S)
-------
Independent Accountants' Report 1-2
Financial Statements:
Statement of Net Assets Available for
Benefits as of June 21, 1999 and
December 31, 1998 3
Statement of Changes in Net Assets
Available for Benefits for the period ended
June 21, 1999, and the years ended December 31, 1998
and 1997 4
Notes to Financial Statements 5-12
Supplemental Schedule:
Item 27d - Schedule of Reportable Transactions
for the period ended June 21, 1999 13
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Plan Advisory Committee of
Fort Bend Federal Savings and Loan Association
of Rosenberg Profit Sharing Plan and Trust:
We have audited the accompanying statement of net assets available for benefits
of the Fort Bend Federal Savings and Loan Association of Rosenberg Profit
Sharing Plan and Trust (the "Plan") as of June 21, 1999 and December 31, 1998,
and the related statement of changes in net assets available for benefits for
the period ended June 21, 1999 and the years ended December 31, 1998 and 1997.
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 audits 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.
As further discussed in Note 7, the Plan was merged into the Southwest Bank of
Texas 401(k) Savings Plan effective April 1, 1999.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Fort Bend
Federal Savings and Loan Association of Rosenberg Profit Sharing Plan and Trust
as of June 21, 1999 and December 31, 1998, and the changes in its net assets
available for benefits for the period ended June 21, 1999 and the years ended
December 31, 1998 and 1997 in conformity with generally accepted accounting
principles.
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<PAGE>
Fort Bend Federal Savings and Loan Association
of Rosenberg Profit Sharing Plan and Trust
Page 2
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule is 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 is 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.
/s/ Ham, Langston & Brezina, L.L.P.
Houston, Texas
May 26, 2000
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<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 21, 1999 AND DECEMBER 31, 1998
JUNE 21, DECEMBER 31,
ASSETS 1999 1998
-------- ----------
Investments:
Shares of registered investment companies
reported at fair value:
American Industries Short Term Income Fund $ -- $1,063,448*
Fidelity Mortgage Securities Fund ........ -- 201,834
Dreyfus Appreciation Fund ................ -- 647,700*
Fidelity Value Fund ...................... -- 200,872
Babson Value Fund ........................ -- 281,518
Baron Asset Fund ......................... -- 299,262*
Janus Worldwide Fund ..................... -- 293,064*
Fort Bend Holding Corp. Common Stock ..... -- 2,742,971*
Participant notes receivable ............. -- 114,624
-------- ----------
Total investments ...................... -- 5,845,293
Cash and cash equivalents .................... -- 10,462
Accounts receivable-accrued interest ......... -- 4,428
-------- ----------
Total assets ........................... -- 5,860,183
Liabilities-accrued liabilities .............. -- 1,195
-------- ----------
Net assets available for benefits .... $ -- $5,858,988
======== ==========
* Represents five percent of net assets.
The accompanying notes are an integral
part of these financial statements.
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<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE
PERIOD ENDED JUNE 21, 1999, AND THE
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
PERIOD
ENDED YEAR ENDED YEAR ENDED
JUNE 21, DECEMBER 31, DECEMBER 31,
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Additions to net assets attrib-
utable to:
Investment income
Interest ................................ $ 30,565 $ 102,035 $ 63,161
Dividends ............................... 16,431 26,437 13,374
Net appreciation in fair value
of investments ........................ -- 574,417 1,084,583
----------- ----------- -----------
46,996 702,889 1,161,118
Contributions from participants ........... 118,407 357,511 325,862
----------- ----------- -----------
Total additions ..................... 165,403 1,060,400 1,486,980
----------- ----------- -----------
Deductions from net assets attrib- utable to:
Benefit payments .......................... 77,633 47,059 85,420
Miscellaneous expense ..................... 150 1,489 --
Net depreciation in fair value of
investments ............................. 1,175,597 -- --
Transfer of participant notes
receivable to Southwest Bank of
Texas 401(k) Plan ....................... 100,758 -- --
Transfer of cash to Southwest Bank
of Texas 401(k) Plan .................... 3,271,596 -- --
Transfer of 162,649 shares of
common stock of Southwest
Bancorporation of Texas, Inc.,
at market value ......................... 1,398,657 -- --
----------- ----------- -----------
6,024,391 48,548 85,420
----------- ----------- -----------
Net increase (decrease) ..................... (5,858,988) 1,011,852 1,401,560
Net assets available for benefits,
beginning of year ......................... 5,858,988 4,847,136 3,445,576
----------- ----------- -----------
Net assets available for benefits,
end of year ............................... $ -- $ 5,858,988 $ 4,847,136
=========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
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<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
The following description of the Fort Bend Federal Savings and Loan
Association of Rosenberg Profit Sharing Plan and Trust (the "Plan")
provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
GENERAL
The Plan was originally adopted by Fort Bend Federal Savings and Loan
Association of Rosenberg (the "Association") as a profit sharing plan. The
Plan was later amended to add a cash or deferred arrangement as described
in Section 401(k) of the Internal Revenue Code of 1986 ("IRC"), as amended,
and to permit the investment of Plan assets in "qualifying employer
securities" as permitted by Section 408(e) of the Employee Retirement
Income Security Act of 1974 ("ERISA"). The Plan is a defined contribution
plan for which all employees of the Association and its subsidiaries are
eligible to participate as of January 1 or July 1 coincident with and
following the completion of six consecutive months of service. The Plan is
subject to the provisions of ERISA.
Effective April 1, 1999, the Association's parent company, Fort Bend
Holding Corp., merged with Southwest Bancorporation of Texas, Inc.
Accordingly, on April 1, 1999, the Plan was merged into the Southwest Bank
of Texas 401(k) Savings Plan (See Note 7).
CHANGE IN TRUSTEE
Prior to January 1, 1997, certain officers of the Association acted as the
Trustees of the Plan. On January 1, 1997, American Industries Trust Company
("American Industries") became trustee of the Plan and the participants'
investments in the Shay Money Market Fund and the Fort Bend Federal Savings
and Loan money market account were liquidated. The money market balances
were liquidated on January 13, 1997 and accumulated in the American
Industries Short-Term Income Fund until all the certificates of deposit
matured in September 1997.
Continued
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<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN, CONTINUED
CHANGE IN TRUSTEE, CONTINUED
At that time, such funds, including the accumulated income thereon, were
invested as the participants directed. (See below for a description of the
participants' investment options.) Accordingly, except for contributions
from participants and earnings on the American Industries Short-Term Income
Fund, the Fort Bend Holding Corp. common stock and Fort Bend Holding Corp.
convertible subordinated debentures, the statement of changes in net assets
available for benefits generally presents investment income for investment
options for the period since September, 1997.
CONTRIBUTIONS
Each participant may elect to defer in any whole percent a portion of his
or her compensation for each pay period, from a minimum of 2% up to a
maximum of 15%, on a pretax basis. Participants may also contribute amounts
representing distributions from other qualified defined benefit or
contribution plans. The Plan provides for employer contributions which are
made at the sole discretion of the Association's Board of Directors.
The amount that can be deferred by a participant who is designated as a
highly compensated employee ("HCE") under IRC guidelines may be limited to
an amount which is less than the maximum annual deferral amount prescribed
by the Plan. Whether or not such limitations are imposed in a given year
will depend on whether the Plan passes certain tests with respect to the
deferral rates of HCEs in comparison with non-HCEs. Failure to pass these
tests may result in the refunding of a portion of each HCE's employee
contribution exceeding such maximum amount for the year and the inclusion
of such amount in his or her taxable income for the year. The Association
passed the tests for the period ended June 21, 1999.
PARTICIPANT ACCOUNTS
Individual participant accounts are comprised of the participant's
voluntary contributions, employer contributions (if applicable), and an
allocation of applicable fund earnings and unrealized fair market value
adjustments. Allocations of earnings and unrealized fair market value
adjustments are based on the ratio of a participant's account to all
participant accounts by fund.
Continued
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<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN, CONTINUED
VESTING
Participants are immediately vested in their contributions plus actual
earnings thereon. Participants are 100% vested in the Association's
discretionary contribution portion of their accounts plus actual earnings
thereon if they are employed on the last day of the Plan year in which such
contributions were made. Any forfeited amounts are allocated among the
remaining participants.
PARTICIPANTS NOTES RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to the lesser of $50,000 or 50% of their account balances.
Loan transactions are treated as a transfer to (from) the investment fund
from (to) the participant loan fund. Loan terms range from one to five
years or up to approximately 25 years for the purchase of a primary
residence. The loans are collateralized by the balance in the participant's
account and bear interest at a rate commensurate with local prevailing
rates as determined quarterly by the Plan Advisory Committee. During 1999,
interest rates ranged from 7.9% to 9.9%. Principal and interest is paid
ratably through semi-monthly payroll deductions.
PAYMENT OF BENEFITS
On termination of service, a participant receives a lump-sum amount equal
to the value of the participant's vested interest in his or her account.
Participant account balances may remain in the Plan if they exceed certain
IRC requirements.
FORFEITED ACCOUNTS
There were no forfeited accounts during the period ended June 21, 1999 or
the years ended December 31, 1998 and 1997.
INVESTMENT OPTIONS
Since January 1, 1997, participants may elect to have their contributions
invested in one or more of the investment options listed below.
Participants may elect to allocate their contributions to any combination
of funds in any whole percentages so long as total investment percentages
equal 100%.
Continued
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<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN, CONTINUED
INVESTMENT OPTIONS, CONTINUED
AMERICAN INDUSTRIES SHORT TERM INCOME FUND
The American Industries Short Term Income Fund seeks investment vehicles
providing high yields consistent with preservation of capital by holding
investments with maturity dates no longer than 30 months.
FIDELITY MORTGAGE SECURITIES FUND
The Fidelity Mortgage Securities Fund seeks a high level of current income,
consistent with prudent investment risk, by investing primarily in mortgage
related securities of all kinds. When consistent with its goal, the Fund
may also consider the potential for capital gains.
DREYFUS APPRECIATION FUND
The Dreyfus Appreciation Fund seeks long-term growth consistent with the
preservation of capital. Generation of income is a secondary objective.
FIDELITY VALUE FUND
The Fidelity Value Fund seeks capital appreciation primarily through
investments in domestic and foreign equity securities.
BABSON VALUE FUND
The Babson Value Fund seeks long-term growth of capital and income by
investing in a diversified portfolio of common stocks which are considered
to be undervalued in relation to earnings, dividends and/or assets.
BARON ASSET FUND
The Baron Asset Fund seeks capital appreciation through long-term
investments in publicly owned companies.
Continued
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<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN, CONTINUED
INVESTMENT OPTIONS, CONTINUED
JANUS WORLDWIDE FUND
The Janus Worldwide Fund seeks long-term growth of capital consistent with
the preservation of capital. It is a diversified fund that pursues its
objective by investing in common stocks of companies of any size on a
global basis.
FORT BEND HOLDING CORP. STOCK
Funds are invested in common stock of Fort Bend Holding Corp. (See
Note 9)
FORT BEND HOLDING CORP. CONVERTIBLE SUBORDINATED DEBENTURES
In October 1995, funds were invested in the Fort Bend Holding Corp.
Convertible subordinated debentures. At January 1, 1997, participants were
allowed to either liquidate or maintain their interests in the debentures.
Subsequent to January 1, 1997, participants cannot increase such
investments but may liquidate their interests at any time.
Participants may change their investment options daily.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual method
of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
Continued
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<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which represent the
net asset value of shares held by the Plan at year end. The Fort Bend
Holding Corp. common stock and convertible debentures are valued at their
quoted market prices. Participant notes receivable are valued at cost which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recognized on the accrual basis. Dividends are recorded
on the ex-dividend date.
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 consist of the realized gains of losses and the
unrealized appreciation (depreciation) on those investments.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
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 are exposed to various risks, such as
interest rate, market and credit. Due to the level of risk associated with
certain investment securities and the level of uncertainty related to
changes in the value of investment securities, it is at least reasonably
possible that changes in risks in the near term would materially affect
participants' account balances and the amounts reported in the statement of
net assets available for plan benefits and the statement of changes in net
assets available for plan benefits.
Continued
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<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS, CONTINUED
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 Association, on behalf of the Plan, were approximately $14,000,
$27,000 and $22,000 for the period ended June 21, 1999 and for the years
ended December 31, 1998 and 1997, respectively.
The Plan invests in shares of Fort Bend Holding Corp. common stock and
maintains an investment in Fort Bend Holding Corp. convertible subordinated
debentures. Through December 1997, the Plan invested in a money market
account with the Association. These amounts are included in the statements
of net assets available for benefits. Interest earned on these investments
is included in the statements of net assets available for benefits.
5. FEDERAL INCOME TAXES
The Internal Revenue Service has determined and informed the Company by a
letter dated August 31, 1994, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (the
"Code"). The Plan has been amended since receiving the determination
letter. However, the Plan Administrator and the Plan's tax counsel believe
that the Plan is designed and is currently being operated in compliance
with applicable requirements of the Code. Accordingly, no provision for
income taxes has been recorded in the accompanying financial statements.
6. INVESTMENTS
Investments that represent 5% or more of the Plan's net assets as of June
21, 1999 and December 31, 1998 are identified below:
JUNE 21, DECEMBER 31,
DESCRIPTION OF ACCOUNT 1999 1998
---------------------- ---------- -----------
American Industries Short Term
Income Fund $ - $1,063,448
Dreyfus Appreciation Fund - 647,700
Baron Asset Fund - 299,262
Janus Worldwide Fund - 293,064
Fort Bend Holding Corp. common
stock - 2,742,971
Continued
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<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS, CONTINUED
7. PLAN TERMINATION
The Association has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination, participants will be
paid in accordance with the provisions of ERISA.
On April 1, 1999 the Plan was merged into the Southwest Bank of Texas
401(k) Savings Plan (the "Southwest Plan") and, in accordance with the
agreement, the Plan's investment in Fort Bend Holding Corp. common stock
was exchanged for 1.45 times the common stock of Southwest Bancorporation
of Texas, Inc. Upon termination of the Plan, all of the participants were
immediately fully vested in the benefits provided pursuant to the Plan, and
the trustee of the Plan was directed to transfer the net assets of the Plan
to the trustee of the Southwest Plan as soon as practicable. The
transferred net assets have been recognized in the accounts of the
Southwest Plan at their balances as previously carried in the accounts of
the Plan. The total amount of net assets available for benefits transferred
on June 21, 1999 was $4,771,011.
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<PAGE>
SUPPLEMENTAL SCHEDULE
<PAGE>
FORT BEND FEDERAL SAVINGS AND LOAN ASSOCIATION
OF ROSENBERG PROFIT SHARING PLAN AND TRUST
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE
PERIOD ENDED JUNE 21, 1999
EIN: 74-0629638
PN: 001
<TABLE>
<CAPTION>
IDENTITY OF PARTY NUMBER OF PURCHASE SELLING CURRENT NET GAIN
INVOLVED TRANSACTIONS PRICE PRICE VALUE (LOSS)
----------------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Series of Transactions:
Short-Term Income Fund 8 $3,289,368 $3,289,368 $ -
Babson Value Fund 33 306,213 334,384 28,171
Janus Worldwide Fund 20 283,264 345,860 62,596
Baron Asset Fund 7 304,346 392,762 88,416
Dreyfus Appreciation Fund 11 530,078 687,686 157,608
Mutual Fund Cash Clearing
Account 144 2,334,772 2,334,772 -
Fort Bend Holding Corp. 7 1,022,295 1,022,317 22
Short Term Income Fund 31 2,228,661 2,228,661
Mutual Fund Cash Clearing
Account 251 2,334,772 2,334,772
Southwest Bancorporation of
Texas, Inc. 3 1,023,469 1,023,469
</TABLE>
Note: Effective April 1, 1999, the Plan was merged into the Southwest Plan.
On June 21, 1999 all of the net assets of the Plan were transferred into the
Southwest Plan.
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