VICTORIA BANKSHARES INC, 424B5, 1995-06-07

VICTORIA BANKSHARES INC
424B5, 1995-06-07
STATE COMMERCIAL BANKS

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<PAGE> 1
UNITED BANCSHARES, INC.
2214 Avenue H
Rosenberg, Texas 77471
P.O. Box 712
Rosenberg, Texas 77471

June 2, 1995

Dear Shareholders:

A Special Meeting of Shareholders ("Meeting") of United Bancshares,
Inc. ("United") will be held at 10 a.m., Central Standard Time, on Friday,
June 30, 1995, at the Fort Bend Country Club, 2627 FM 762, Richmond,
Texas. The enclosed map contains directions to the Fort Bend Country Club.
At the Meeting, shareholders will consider and vote to approve, ratify
and adopt the Agreement and Plan of Merger ("Merger Agreement") dated January
12, 1995, providing for the merger ("Merger") of United with and into Victoria
Bankshares, Inc. ("Victoria"), a bank holding company located in Victoria,
Texas. As a result of the Merger, United's subsidiary bank, Rosenberg Bank and
Trust ("RB&T"), will become a wholly-owned subsidiary of Victoria, and United
will cease to exist. Immediately after the Merger, Victoria will cause RB&T to
be merged into Victoria's bank subsidiary, Victoria Bank and Trust Company
("VB&T").

Upon receipt of all requisite shareholder and regulatory approvals and
the effectiveness of the Merger, the holders of United common stock, $1.00 par
value ("United Common Stock"), other than dissenting shareholders, will have
their shares of United Common Stock converted into a number of shares of
Victoria common stock, $1.00 par value ("Victoria Common Stock") determined in
accordance with the provisions of the Merger Agreement, which are described in
the accompanying Proxy Statement/Prospectus for the Meeting.

Each share of United Common Stock entitles the holder to one vote on
the Merger. Holders of shares of Series A 7-1/2% Cumulative Preferred Stock,
$7.50 par value, and shares of Series B 10% Cumulative Preferred Stock, $7.50
par value, are not entitled to vote these shares with respect to the Merger.

United's Board of Directors believes that the Merger is in the best
interests of the shareholders of United and the customers of RB&T. After the
Merger, the shareholders of United who receive Victoria Common Stock will own
publicly traded stock in a much larger, more diversified financial institution
with a recent history of paying dividends on its common stock. The deposits of
RB&T will become deposits of VB&T and will continue to be insured by the FDIC
up to the maximum amount permitted by law.

The enclosed Notice of Special Meeting of Shareholders and the Proxy
Statement/Prospectus explain the proposed Merger and provide detailed
information concerning United and Victoria. We urge you to read these
materials carefully.

For those shareholders who are parties to the Voting Agreement dated
May 16, 1988 ("Voting Agreement"), as you know, I have the right to vote shares
of United Common Stock which are subject to the Voting Agreement, including the
right to vote such shares with respect to a proposal to merge United with a
third party. Although I have the right to vote the shares of the United Common
Stock which are subject to the Voting Agreement at the Meeting with respect to
the Merger, I have decided to allow each sharehoder to vote his own United
Common Stock at the meeting with respect to the Merger.

You are cordially invited to attend the Meeting. IF YOU ARE A HOLDER
OF UNITED COMMON STOCK, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON, YOU ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. If you need assistance in
completing your Proxy, please call Mr. D.W. Neuenschwander at United, (713)
342-5501.

UNITED'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL
OF THE MERGER. ---

UNITED BANCSHARES, INC.

D.W. Neuenschwander
Chairman of the Board
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UNITED BANCSHARES, INC.
2214 Avenue H
Rosenberg, Texas 77471

P.O. Box 712
Rosenberg, Texas 77471

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 30, 1995
Notice is hereby given that a Special Meeting of Shareholders
("Meeting") of United Bancshares, Inc. ("United") will be held at the Fort Bend
Country Club, 2627 FM 762, Richmond, Texas, on June 30, 1995 at 10:00 a.m.,
Central Standard Time, for the following purposes:
(1) To consider and vote upon a proposal, recommended by
the Board of Directors of United, to approve the Agreement and Plan of
Merger dated as of January 12, 1995 (the "Merger Agreement"), by and
between United and Victoria Bankshares, Inc. ("Victoria"), pursuant to
which United will merge with and into Victoria and the holders of
common stock of United, $1.00 par value ("United Common Stock"), other
than dissenting shareholders, will have their shares of United Common
Stock converted into a number of shares of common stock of Victoria,
$1.00 par value ("Victoria Common Stock") determined in accordance
with the provisions of the Merger Agreement.

(2) To transact such other business as may properly come
before the Meeting and any adjournments thereof.
The Board of Directors of United has fixed 5:00 p.m. on June 1,
1995, as the record date for determining shareholders entitled to notice of and
to vote at the Meeting or any adjournments thereof. The specific details of
the merger are fully described in the accompanying Proxy Statement/Prospectus
and in the Merger Agreement. A copy of the Merger Agreement is attached to the
Proxy Statement/Prospectus as Appendix I.
BY ORDER OF THE BOARD OF DIRECTORS

D.W. Neuenschwander
Chairman of the Board

IT IS IMPORTANT THAT YOUR SHARES OF UNITED COMMON STOCK BE REPRESENTED
AT THE MEETING REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN. PLEASE
COMPLETE, SIGN AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED RETURN ENVELOPE
PROMPTLY. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY GIVING
WRITTEN NOTICE OF REVOCATION TO THE SECRETARY OF UNITED OR BY EXECUTION OF A
PROXY OF A LATER DATE FILED WITH THE SECRETARY OF UNITED AT OR BEFORE THE
MEETING. IN ADDITION, IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY BY
VOTING IN PERSON.

June 2, 1995
Rosenberg, Texas

<PAGE> 3
Filed Pursuant to Rule 424(b)(5)
Registration No. 33-90662
UNITED BANCSHARES, INC. VICTORIA BANKSHARES, INC.

PROXY STATEMENT/PROSPECTUS

Victoria Bankshares, Inc., a Texas corporation ("Victoria"), has filed
this Proxy Statement/Prospectus with the Securities and Exchange Commission
("Commission") pursuant to the Securities Act of 1933, as amended ("Securities
Act"), with respect to the shares of Victoria common stock, $1.00 par value per
share ("Victoria Common Stock") to be issued in the proposed merger (the
"Merger") of United Bancshares, Inc., a Texas corporation ("United"), with and
into Victoria. As a result of the Merger, Rosenberg Bank and Trust ("RB&T"), a
Texas state bank and a wholly-owned subsidiary of United, will become a
wholly-owned subsidiary of Victoria. Immediately subsequent to the Merger,
Victoria will cause RB&T to merge into Victoria Bank and Trust Company,
("VB&T"), a Texas state bank and indirect wholly-owned subsidiary of Victoria.
This Proxy Statement/Prospectus constitutes the proxy statement of
United relating to the solicitation of proxies by United's Board of Directors
for use at the special meeting of shareholders of United (the "Meeting")
scheduled to be held on Friday, June 30, 1995 at 10:00 a.m., Central
Standard Time, at the Fort Bend Country Club, 2627 FM 762, Richmond,
Texas, and any adjournment thereof. At the Meeting, the shareholders of United
will consider and vote upon a proposal to approve, ratify, confirm and adopt
the Agreement and Plan of Merger dated as of January 12, 1995, by and between
Victoria and United (the "Merger Agreement"), providing for, among other
things, the merger of United with and into Victoria and, in connection
therewith, the receipt by holders of United common stock, $1.00 par value per
share ("United Common Stock") of Victoria Common Stock. A copy of the Merger
Agreement is included as Appendix I and is incorporated herein by reference.

The Merger Agreement provides that shares of United Common Stock at the
effective time of the Merger (the "Effective Time") will be converted into a
number of shares of Victoria Common Stock in accordance with the terms of the
Merger Agreement. The Merger Agreement provides for an aggregate merger
consideration of $7,950,000, payable in shares of Victoria Common Stock based on
the market price of Victoria Common Stock determined over a ten-day trading
period ending on the last day of the month ending prior to the consummation of
the Merger (the "Pricing Average"). It is anticipated that the Effective Time
will be in June 1995, and assuming no change in the number of shares of United
Common Stock outstanding, the Pricing Average (based on the ten-day trading
period ending on the last day of May 1995) will be $25.86 and each share of
outstanding United Common Stock will be converted into approximately 1.30 shares
of Victoria Common Stock. As a condition to consummation of the Merger,
Victoria and United have agreed that the Pricing Average must be between $21.25
and $33.75, unless both parties waive this condition. United's Board has not
decided whether it will resolicit votes in the event the Pricing Average is
outside the range. In considering whether to resolicit votes or terminate the
Merger Agreement, United would consider the reasons for the significant increase
or decrease in the Pricing Average. If the Pricing Average at the Effective
Time is $21.25, each outstanding share of United Common Stock will be converted
into approximately 1.59 shares of Victoria Common Stock. If the Pricing
Average at the Effective Time is $33.75, each outstanding share of United Common
Stock will be converted into approximately 1.00 share of Victoria Common Stock.
SEE "SUMMARY--THE MERGER" AND "THE MERGER--GENERAL".
Victoria will not issue fractional shares of Victoria Common Stock, but
instead will pay cash to any shareholder otherwise entitled to receive a
fractional share. Such cash payment shall be based on the Pricing Average. SEE
"SUMMARY--THE MERGER"; "THE MERGER--GENERAL"; "THE MERGER--APPRAISAL RIGHTS";
APPENDIX I; AND APPENDIX II.

Consummation of the Merger is subject to the receipt of required
governmental approvals, the approval of the holders of a majority of the
outstanding United Common Stock, and certain other conditions, all as more
fully described in this Proxy Statement/Prospectus. SEE "SUMMARY--CONDITIONS
TO CONSUMMATION; REGULATORY APPROVALS; TERMINATION"; "THE MERGER--OTHER TERMS
AND CONDITIONS"; AND APPENDIX I.

This Proxy Statement/Prospectus also constitutes the prospectus of
Victoria with respect to the shares of Victoria Common Stock to be issued to
the holders of United Common Stock in the Merger; however, it does not cover
resales of shares of Victoria Common Stock upon consummation of the proposed
Merger, and no person is

<PAGE> 4
authorized to make use of this Proxy Statement/Prospectus in connection with any
such resale. SEE "RESALE OF VICTORIA COMMON STOCK".
Victoria Common Stock is publicly traded on the Nasdaq National
Market. On May 4, 1995, the last reported sale price per share of Victoria
Common Stock was $25.00. No active public trading market exists for United
Common Stock. SEE "MARKET PRICES".
This Proxy Statement/Prospectus is first being mailed or delivered to
United shareholders on or about June 2, 1995.
THE SECURITIES OF VICTORIA BANKSHARES, INC. OFFERED IN CONNECTION WITH
THE MERGER HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Victoria, through its wholly-owned, non-bank subsidiary, Victoria
Financial Services, Inc., a Delaware corporation and bank holding company, owns
VB&T. Victoria also owns, directly or indirectly, five other non-bank
subsidiaries: Transact Financial Corporation (mortgage loans); Central
Computers, Inc. (data processing); Victoria Capital Corporation (investments in
small businesses); V.B.I., Inc. (foreclosed properties); and Victoria
Securities Corporation (discount brokerage services). Central Computers, Inc.
and Victoria Capital Corporation are wholly-owned subsidiaries of VB&T. All
information concerning Victoria and VB&T has been furnished by Victoria. All
information regarding United and RB&T has been furnished by United.

THE SHARES OF VICTORIA COMMON STOCK OFFERED HEREBY ARE NOT DEPOSITS,
ARE NOT OBLIGATIONS OF OR GUARANTEED BY A BANK AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY. THIS TRANSACTION INVOLVES CERTAIN RISKS. UNITED SHAREHOLDERS
ARE URGED TO REVIEW AND CAREFULLY CONSIDER THE RISKS DESCRIBED UNDER
"RISK FACTORS".
The date of this Proxy Statement/Prospectus is June 2, 1995.

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PROXY STATEMENT/PROSPECTUS
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . 1 COMPARISON OF RIGHTS OF SHAREHOLDERS OF
UNITED AND VICTORIA . . . . . . . . . . . . . . . . . . 42
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . 1 Mergers . . . . . . . . . . . . . . . . . . . 43
Appraisal Rights . . . . . . . . . . . . . . . 43
PROXY STATEMENT/PROSPECTUS Special Meetings . . . . . . . . . . . . . . . 43
Actions Without a Meeting . . . . . . . . . . 44
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 3 Purchase of Shares . . . . . . . . . . . . . . 44
Voting Rights . . . . . . . . . . . . . . . . 44
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . 6 Election of Directors . . . . . . . . . . . . 44
Parties to the Merger . . . . . . . . . . . . 6 Assessability of Capital Stock . . . . . . . . 45
The Merger . . . . . . . . . . . . . . . . . . 6 Charter Amendments . . . . . . . . . . . . . . 45
Reasons for the Merger; Recommendation of Board Dissolution . . . . . . . . . . . . . . . . . . 45
Directors . . . . . . . . . . . . . . . . . Preemptive Rights . . . . . . . . . . . . . . 45
The Meeting . . . . . . . . . . . . . . . . . 8 Dividends . . . . . . . . . . . . . . . . . . 46
Record Date . . . . . . . . . . . . . . . . . 8 Liquidation Rights . . . . . . . . . . . . . . 46
Shareholder Votes Required . . . . . . . . . . 8 Limitation of Liability and
Dissenters' Rights . . . . . . . . . . . . . . 8 Indemnification . . . . . . . . . . . . . . 46
Conditions to Consummation; Regulatory Inspection of Books and Records . . . . . . . 47
Approvals; Termination . . . . . . . . . . . 9
Federal Income Tax Consequences . . . . . . . 9 RESALE OF VICTORIA COMMON STOCK . . . . . . . . . . . . 47
Accounting Treatment . . . . . . . . . . . . . 10
Risk Factors . . . . . . . . . . . . . . . . . 10 INFORMATION ABOUT VICTORIA . . . . . . . . . . . . . . 48
Interests of Certain Persons in the Merger . . 10 Incorporation of Certain Documents by
Reference . . . . . . . . . . . . . . . . . 48
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . 11 Interests of Certain Persons . . . . . . . . . 48
Special Considerations with Respect to
United . . . . . . . . . . . . . . . . . . . 11 INFORMATION ABOUT UNITED . . . . . . . . . . . . . . . 48
Loss of Control . . . . . . . . . . . . . . . 11 General . . . . . . . . . . . . . . . . . . . 48
Special Considerations with Respect to Services, Employees and Properties . . . . . . 48
Victoria . . . . . . . . . . . . . . . . . . 11 Competition . . . . . . . . . . . . . . . . . 48
Governmental Regulation . . . . . . . . . . . 11 Legal Proceedings . . . . . . . . . . . . . . 49
Competition . . . . . . . . . . . . . . . . . 12 Regulatory Commitments . . . . . . . . . . . . 49
Economic Conditions . . . . . . . . . . . . . 12 Market Prices and Dividends . . . . . . . . . 50
Dividend History and Dividend Restrictions . . 12 Management and Principal Shareholders . . . . 50
Special Considerations with Respect to the Interest of Certain Persons . . . . . . . . . 57
Merger . . . . . . . . . . . . . . . . . . 13
Floor and Ceiling on Merger Consideration . . 13 CONSOLIDATED STATEMENTS OF EARNINGS OF UNITED . . . . . 58
Dilution of Shareholders of Victoria . . . . . 13
Interest Rate Risk . . . . . . . . . . . . . . 14 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
Anti-takeover Provisions . . . . . . . . . . . 14 FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF UNITED 59
Performance Summary . . . . . . . . . . . . . 59
SUMMARY OF SELECTED FINANCIAL DATA . . . . . . . . . . 15 Net Interest Income and Net Interest
Margin . . . . . . . . . . . . . . . . . . . 59
MARKET PRICES . . . . . . . . . . . . . . . . . . . . . 17 Noninterest Income . . . . . . . . . . . . . . 61
Noninterest Expense . . . . . . . . . . . . . 61
THE MEETING . . . . . . . . . . . . . . . . . . . . . . 18 Income Taxes . . . . . . . . . . . . . . . . . 61
General . . . . . . . . . . . . . . . . . . . 18 Impact of Inflation . . . . . . . . . . . . . 62
Proxies . . . . . . . . . . . . . . . . . . . 18 Loan Portfolio . . . . . . . . . . . . . . . . 62
Principal Shareholders . . . . . . . . . . . . 18 Nonperforming Loans and Assets . . . . . . . . 63
Allowance for Credit Losses . . . . . . . . . 65
THE MERGER . . . . . . . . . . . . . . . . . . . . . . 19 Allocation of the Allowance for Credit
General . . . . . . . . . . . . . . . . . . . 19 Losses . . . . . . . . . . . . . . . . . . . 66
Redemption of Preferred Stock . . . . . . . . 21 Investments . . . . . . . . . . . . . . . . . 67
Background of the Merger . . . . . . . . . . . 21 Deposits . . . . . . . . . . . . . . . . . . . 70
Reasons for the Merger and Recommendation of Interest Rate Sensitivity and Liquidity . . . 71
the Board of Directors . . . . . . . . . . . 21 Capital Resources . . . . . . . . . . . . . . 72
Operations After the Merger . . . . . . . . . 23
Other Terms and Conditions . . . . . . . . . . 23 RELATIONSHIPS WITH INDEPENDENT ACCOUNTANTS . . . . . . 73
Additional Agreements . . . . . . . . . . . . 27
Business Pending Effective Time . . . . . . . 27 EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . 73
Amendment; Termination . . . . . . . . . . . . 28
Exchange of Shares . . . . . . . . . . . . . . 29 LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . 73
Appraisal Rights . . . . . . . . . . . . . . . 29
Federal Income Tax Consequences . . . . . . . 31 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 73
Government Approvals . . . . . . . . . . . . . 33
Accounting Treatment . . . . . . . . . . . . . 33 OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . 74
SUPERVISION AND REGULATION . . . . . . . . . . . . . . 33
General . . . . . . . . . . . . . . . . . . . 33 INDEX TO FINANCIAL STATEMENTS OF UNITED
Regulation of the Companies . . . . . . . . . 34 APPENDIX I - MERGER AGREEMENT
Regulation of the Banks . . . . . . . . . . . 36 APPENDIX II - DISSENTER'S RIGHTS OF APPRAISAL

DESCRIPTION OF VICTORIA COMMON AND PREFERRED STOCK . . 40
Victoria Common Stock . . . . . . . . . . . . 41
Dividends . . . . . . . . . . . . . . . . . . 41
Preemptive Rights . . . . . . . . . . . . . . 41
Voting Rights . . . . . . . . . . . . . . . . 42
Liquidation . . . . . . . . . . . . . . . . . 42
Victoria Preferred Stock . . . . . . . . . . . 42

</TABLE>
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AVAILABLE INFORMATION

Victoria has filed with the Commission in Washington, D.C. a
Registration Statement on Form S-4 (the "Registration Statement") under the
Securities Act, for the registration of Victoria Common Stock to be issued in
the proposed Merger. This Proxy Statement/Prospectus was filed as a part of
the Registration Statement. This Proxy Statement/Prospectus does not contain
all of the information set forth in the Registration Statement as certain parts
are permitted to be omitted by the rules and regulations of the Commission.
For further information pertaining to Victoria, Victoria Common Stock and
related matters, reference is made to the Registration Statement, including the
exhibits filed as a part thereof, which may be inspected at, and copies of
which may be obtained by mail from, the public reference rooms and facilities
of the Commission referred to below.

Victoria is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the Commission's public reference rooms located at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and
the public reference facilities in the New York Regional Office, Seven World
Trade Center, 13th Floor, New York, New York 10048 and the Chicago Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can be obtained at prescribed rates by writing
to the Securities and Exchange Commission, Public Reference Branch, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Victoria Common Stock is included
for quotation on the Nasdaq National Market and such reports, proxy statements
and other information concerning Victoria should be available for inspection
and copying at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, Washington, D.C. 20006.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS
CONCERNING VICTORIA (OTHER THAN CERTAIN EXHIBITS TO SUCH DOCUMENTS) ARE
AVAILABLE TO EACH BENEFICIAL OWNER OF UNITED STOCK WITHOUT CHARGE UPON REQUEST
FROM THE SECRETARY OF VICTORIA BANKSHARES, INC., P. O. BOX 1698, VICTORIA,
TEXAS 77902; TELEPHONE NUMBER (512) 573-9432. IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY SUCH REQUEST SHOULD BE MADE BY
JUNE 23, 1995.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents previously filed by Victoria with the
Commission are incorporated herein by reference:
(i) Victoria's Annual Report on Form 10-K/A for the year ended
December 31, 1994 (File No. 0-8037);

(ii) Victoria's Quarterly Report on Form 10-Q for the three months
ended March 31, 1995 (File No. 0-8037); and

(iii) Victoria's Proxy Statement dated March 20, 1995, relating to
its annual meeting of shareholders held on April 18,
1995 (File No. 0-8037).
All documents filed by Victoria pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
date of the Meeting to which this Proxy Statement/Prospectus relates are
incorporated herein by reference, and shall be deemed a part hereof from the
date of filing of such documents.
<PAGE> 7

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Proxy
Statement/Prospectus, shall be deemed to be modified or superseded for purposes
of this Proxy Statement/Prospectus to the extent that a statement contained
herein or in any subsequently filed document which also is deemed to be
incorporated herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part of this Proxy
Statement/Prospectus, except as so modified or superseded.

<PAGE> 8
No person has been authorized to give any information or to make any
representations other than those contained in this Proxy Statement/Prospectus,
and, if given or made, such information or representations must not be relied
upon as having been authorized by Victoria, United or their respective
affiliates. This Proxy Statement/Prospectus does not constitute an offer to
exchange or sell, or a solicitation of an offer to exchange or purchase, any
securities other than Victoria Common Stock offered hereby, nor does it
constitute an offer to exchange or sell or a solicitation of an offer to
exchange or purchase such securities in any state or other jurisdiction to any
person to whom such an offer or solicitation would be unlawful.

Neither the delivery of this Proxy Statement/Prospectus nor any
distribution of securities made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of
Victoria, VB&T, United, RB&T or their respective affiliates since the date of
this Proxy Statement/Prospectus.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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<PAGE> 9
PROXY STATEMENT/PROSPECTUS

INTRODUCTION
This Proxy Statement/Prospectus is furnished in connection with the
solicitation of proxies by the Board of Directors of United Bancshares, Inc., a
Texas corporation ("United"), for use at the special meeting of United
shareholders to be held at the time and place set forth in the foregoing Notice
of Special Meeting of Shareholders, and any adjournments thereof (the
"Meeting"). This Proxy Statement/Prospectus also constitutes a prospectus of
Victoria Bankshares, Inc. ("Victoria") with respect to the shares of Victoria
common stock, $1.00 par value per share ("Victoria Common Stock"), to be issued
to the holders of the common stock, $1.00 par value per share, of United
("United Common Stock") in the proposed merger (the "Merger") of United with
and into Victoria. As a result of the Merger, Rosenberg Bank and Trust
("RB&T"), a Texas state bank and a wholly-owned subsidiary of United, will
become a wholly-owned subsidiary of Victoria. Immediately subsequent to the
Merger, Victoria will cause RB&T to merge into Victoria Bank and Trust Company
("VB&T"), a Texas state bank and indirect wholly-owned subsidiary of Victoria.
The following proposals will be considered and voted upon at the
Meeting:

(1) To approve, ratify, confirm and adopt the Agreement and Plan
of Merger dated January 12, 1995 by and between Victoria and
United (the "Merger Agreement"), pursuant to which United will
be merged with and into Victoria; and

(2) To consider and transact such other business as may properly
come before the Meeting.
United's Board of Directors has fixed June 1, 1995 as the record date
for the determination of the shareholders entitled to notice of and to vote at
the Meeting (the "Record Date"). As of the Record Date, United had 5,000,000
shares of United Common Stock authorized, of which 235,806 shares were issued
and outstanding, and 92 shares of which were held in treasury. Each share of
United Common Stock entitles the holder to one vote on the Merger and one vote
on any other proposal to be voted on at the Meeting. The presence, in person or
by proxy, of the holders of a majority of shares of United Common Stock entitled
to vote at the Meeting is necessary to constitute a quorum at the Meeting. The
affirmative vote of the holders of a majority of the outstanding shares of
United Common Stock is required for approval of the Merger Agreement. As of the
Record Date, United also had authorized (i) 66,726 shares of Series A 7-1/2%
Cumulative Preferred Stock, $7.50 par value per share ("United Series A
Preferred Stock"), of which 42,589 shares were issued and outstanding, and none
of which were held in treasury, and (ii) 26,667 shares of Series B 10%
Cumulative Preferred Stock, $7.50 par value per share ("United Series B
Preferred Stock"), all of which were issued and outstanding, and none of which
were held in treasury. The holders of United Series A Preferred Stock and
United Series B Preferred Stock are not entitled to vote those shares with
respect to the Merger. Immediately before the Effective Time, United will
cause RB&T to declare a dividend in sufficient amount to enable United to,
among other things, redeem all shares of United's issued and outstanding United
Series A Preferred Stock and United Series B Preferred Stock for the
liquidation value of such shares plus any accrued and unpaid dividends thereon
through the Effective Time. UNITED'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR APPROVAL OF THE MERGER. SEE "SUMMARY--RECORD DATE";
"SUMMARY--SHAREHOLDER VOTES REQUIRED"; "THE MEETING--GENERAL"; "THE
MERGER--GENERAL"; "THE MERGER--OTHER TERMS AND CONDITIONS"; AND APPENDIX I.
Of the 235,806 shares of United Common Stock currently outstanding,
165,312 shares, or 70.11%, are subject to a Voting Agreement dated May 16, 1988
(the "United Voting Agreement"). D.W. Neuenschwander, the Chairman of the Board
and President of United; G.W. Neuenschwander, a director of United; S.E.
McCrory, Jr., a director of United; and approximately 63 other shareholders of
United are parties to the United Voting Agreement. The term of the Voting
Agreement is for a period of ten years from May 15, 1988, but may be terminated
earlier

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by (i) the written agreement of the parties to the United Voting Agreement
owning not less than 80% of the shares of stock subject to the United Voting
Agreement, (ii) the sale of all of the shares of stock subject to the United
Voting Agreement, as such term is defined in the United Voting Agreement, or
(iii) the final dissolution or liquidation of United. Pursuant to the United
Voting Agreement, D.W. Neuenschwander, as Voting Representative thereunder (the
"Voting Representative") has the right to vote the shares subject to the United
Voting Agreement at any meeting on any issue with respect to which the United
shareholders would otherwise have the right to vote their respective shares,
including the right to vote with respect to a proposal to merge United with a
third party. Although the Voting Representative has the power to vote the
shares of United Common Stock which are subject to the United Voting Agreement
at the Meeting with respect to the Merger, the Voting Representative has
decided to allow each shareholder to vote his own stock with respect to the
Merger.
Subject to certain termination rights, six of the principal holders of
United Common Stock have agreed, pursuant to a Voting Agreement and Irrevocable
Proxy (each, a "Voting Agreement and Proxy" and collectively, the "Voting
Agreements and Proxies"), to vote all of their United Common Stock in favor of
the Merger. The parties to the Voting Agreements and Proxies are the six
shareholders of United who own 2% or more of the issued and outstanding United
Common Stock and include D.W. Neuenschwander, the Chairman of the Board and
President of United; RB&T, IRA Custodian for D.W. Neuenschwander; G.W.
Neuenschwander, a director of United; RB&T, Custodian for S.E. McCrory, Jr.,
Self Directed Retirement Account; S.E. McCrory, a director of United; and two
other shareholders who are not officers or directors of United. Each Voting
Agreement and Proxy applies only with respect to the vote on the Merger and
terminates upon the earlier of (i) the termination of the Merger Agreement, or
(ii) the consummation of the Merger. Because these six shareholders have the
power to vote an aggregate of 116,525 shares, or 49.42%, of the issued and
outstanding shares of United Common Stock, the vote of only 1,379 shares, or
0.58%, of the remaining issued and outstanding United Common Stock will be
required to assure approval of the Merger by the holders of United Common
Stock. SEE "SUMMARY--REASONS FOR THE MERGER; RECOMMENDATION OF BOARD OF
DIRECTORS"; "SUMMARY--SHAREHOLDER VOTES REQUIRED"; "THE MEETING--PRINCIPAL
SHAREHOLDERS"; "THE MERGER--GENERAL"; "THE MERGER--ADDITIONAL AGREEMENTS"; AND
"INFORMATION ABOUT UNITED--MANAGEMENT AND PRINCIPAL SHAREHOLDERS".
The enclosed proxies are solicited by United's Board of Directors.
Any such proxy, if received in time for voting and not revoked, will be voted
at the Meeting in accordance with the shareholder's instructions. If no
instructions are given on the proxy, the proxy will be voted in favor of the
Merger. Failure to submit a proxy or vote at the Meeting will have the same
effect as a vote against the Merger. At present, United's Board of Directors
knows of no other matters to be presented at the Meeting, but if other matters
are properly presented, the persons named in the proxy will vote or refrain
from voting in accordance with United's Board of Directors' recommendation
pursuant to the discretionary authority conferred, if any, by the proxy. SEE
"THE MERGER--APPRAISAL RIGHTS"; AND APPENDIX II.

A proxy may be revoked at any time prior to its exercise by filing
with the Secretary of United at United's principal executive office a duly
executed proxy bearing a later date or a written notice revoking such proxy.
Any shareholder entitled to vote at the Meeting may attend the Meeting and vote
in person by written ballot on any matter presented for a vote at such Meeting,
whether or not such shareholder has given a proxy previously, and such action
will constitute a revocation of any prior proxy.

Proxies will be solicited initially by mail, and may also be solicited
personally, by telephone, facsimile transmission or other means by the
directors, officers and employees of United and RB&T, with no special or extra
compensation therefor, although such officers, directors and employees may be
reimbursed by United for out-of-pocket expenses incurred in connection with the
solicitation. Arrangements will also be made with custodians, nominees, and
fiduciaries for the forwarding of this Proxy Statement/Prospectus and
accompanying materials to the beneficial owners of United Common Stock, United
Series A Preferred Stock and United Series B Preferred Stock (sometimes
referred to collectively as the "United Stock") held of record by such persons,
and United may

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<PAGE> 11

reimburse such custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses that they incur in that connection. Expenses incurred
in connection with the Merger, including those attributable to the solicitation
of proxies, will be paid by the party incurring the expense.

Brokerage firms, banks, nominees, fiduciaries and other custodians are
requested to forward these proxy materials to the beneficial owners of United
Stock held of record by them, and United will reimburse them, upon request, for
their reasonable expenses in connection with such mailing or other
communications with such beneficial owners.

Victoria's principal executive offices are located at One O'Connor
Plaza, Victoria, Texas 77902; telephone number (512) 573-9432. United's
principal executive offices are located at 2214 Avenue H, Rosenberg, Texas
77471; telephone number (713) 342-5501.

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<PAGE> 12

SUMMARY

The following is a brief summary of certain information relating to
the Merger contained elsewhere in this Proxy Statement/Prospectus. This
summary is not intended to describe all material information relating to the
Merger and is qualified in its entirety by reference to the more detailed
information and financial statements contained elsewhere in this Proxy
Statement/Prospectus, including the Appendices hereto and the documents
referred to herein or incorporated by reference. Shareholders are urged to
read carefully the entire Proxy Statement/Prospectus and the related documents.

PARTIES TO THE MERGER

Victoria is a Texas corporation organized in 1973. It is a bank
holding company registered with the Board of Governors of the Federal Reserve
System (the "Federal Reserve") under the Bank Holding Company Act of 1956, as
amended ("BHC Act"). Substantially all of Victoria's revenues are derived from
VB&T, an indirect wholly-owned banking subsidiary of Victoria located in Texas.

VB&T is a Texas banking association headquartered in Victoria and a
wholly-owned commercial bank subsidiary of Victoria Financial Services, Inc.
VB&T wholly owns Central Computers, Inc. and Victoria Capital Corporation.
VB&T conducts a general, full-service commercial and consumer banking business
through 37 banking offices located in 30 communities and 21 counties in South
Central Texas.

On December 31, 1994, Victoria and its subsidiaries had consolidated
assets of $1.7 billion, consolidated deposits of $1.5 billion and total
shareholders' equity of $175 million. Additional information regarding
Victoria is included in the Victoria documents incorporated by reference
herein. SEE "AVAILABLE INFORMATION"; "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE"; "SELECTED FINANCIAL DATA"; AND "INFORMATION ABOUT VICTORIA".

United is a Texas corporation organized in 1978. Like Victoria, it is
a bank holding company registered with the Federal Reserve under the BHC Act.
Substantially all of United's revenues are derived from RB&T, its wholly-owned
banking subsidiary located in Rosenberg, Texas. RB&T conducts a general,
full-service commercial and consumer banking business through its principal
office located at 2214 Avenue H in Rosenberg and its two branch offices located
at 3400 Highway 6 and 4555 Sweetwater Boulevard in Sugar Land, Texas.

On December 31, 1994, United and RB&T had consolidated assets of $68.3
million, consolidated deposits of $63.3 million and total shareholders' equity
of $4.2 million. SEE "INFORMATION ABOUT UNITED"; "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF UNITED"; AND INDEX
TO FINANCIAL STATEMENTS OF UNITED.

THE MERGER
The Merger Agreement provides that each share of United Common Stock,
at the Effective Time, other than shares held by dissenting shareholders, will
be converted into a number of shares of Victoria Common Stock in accordance
with the terms of the Merger Agreement. The actual number of shares of
Victoria Common Stock to be issued upon consummation of the Merger will be
based on the market price of Victoria Common Stock determined over a ten-day
trading period ending on the last day of the month ending prior to the
consummation of the Merger. Based on a conversion factor which will be

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applicable if the Effective Time of the Merger occurs in June 1995 as
anticipated, approximately 1.30 shares of Victoria Common Stock will be issued
for each outstanding share of United Common Stock. As a condition to
consummation of the Merger, Victoria and United have agreed that the Pricing
Average must be between $21.25 and $33.75, unless both parties waive this
condition. If the Pricing Average at the Effective Time is $21.25, each
outstanding share of United Common Stock will be converted into approximately
1.59 shares of Victoria Common Stock. If the Pricing Average at the Effective
Time is $33.75, each outstanding share of United Common Stock will be converted
into approximately 1.00 share of Victoria Common Stock. SEE "SUMMARY--THE
MERGER" AND "THE MERGER--GENERAL". SEE "INTRODUCTION"; "SUMMARY--DISSENTERS'
RIGHTS"; "THE MERGER--GENERAL"; "THE MERGER--APPRAISAL RIGHTS"; APPENDIX I; AND
APPENDIX II.

Victoria will be the surviving entity in the Merger, and the officers
and directors of Victoria will continue to be the officers and directors of
Victoria after the Merger. SEE "THE MERGER--GENERAL" AND "INFORMATION ABOUT
UNITED".

As of March 24, 1995, there were 235,806 shares of United Common Stock
issued and outstanding. Other than United Series A Preferred Stock and United
Series B Preferred Stock, which will be redeemed by United before the Merger
for the liquidation value of such shares plus any accrued and unpaid dividends
thereon through the Effective Date, there are presently no outstanding
debentures, subscriptions, options, convertible securities, rights, warrants,
calls or other agreements or commitments obligating United to issue any shares
of United Stock. SEE "INTRODUCTION"; "THE MERGER- -GENERAL"; AND APPENDIX I.

The Merger Agreement was the result of arm's length negotiations
between representatives of Victoria and United. United's Board of Directors
believes the terms of the Merger are fair and in the best interest of United's
shareholders. SEE "SUMMARY--REASONS FOR THE MERGER; RECOMMENDATION OF BOARD
OF DIRECTORS" AND "THE MERGER--BACKGROUND AND REASONS FOR THE MERGER".

REASONS FOR THE MERGER; RECOMMENDATION OF BOARD OF DIRECTORS

The Board of Directors of United, after due consideration and study,
has concluded unanimously that the proposed Merger is advisable and in the best
interests of United and its shareholders. In reaching its determination to
enter into the Merger Agreement, the Board of Directors considered a number of
factors, including but not limited to the following: the financial terms of
the Merger; the increased investment liquidity that the Merger would provide
United's shareholders; the financial condition and business prospects for
Victoria; the prospects for United and RB&T continuing to operate as an
independent community-based financial institution, including the current and
prospective economic environment, competitive constraints and regulatory
requirements; and the other terms of the Merger Agreement, including the
tax-free nature of the exchange and the ability of United to redeem its
outstanding preferred stock. Consummation of the Merger offers the holders of
United Common Stock the opportunity to acquire publicly traded stock in a
larger, more diversified financial institution. United Common Stock is not
publicly traded. United's Board of Directors anticipates that the Merger will
expand the banking products and services offered to RB&T's customers and
community. As part of a larger holding company system, RB&T's facilities will
be provided with specialized staff resources in accounting, auditing,
investment, trust management, loan review, marketing, data processing and
electronic funds transfer services. UNITED'S BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT HOLDERS OF UNITED COMMON STOCK VOTE FOR APPROVAL OF THE MERGER
and has authorized consummation

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thereof subject to approval of the United shareholders entitled to vote at the
Meeting and the satisfaction of certain other conditions. SEE "INTRODUCTION";
"MARKET PRICES"; "THE MERGER--BACKGROUND AND REASONS FOR THE MERGER";
"DESCRIPTION OF VICTORIA COMMON AND PREFERRED STOCK"; "INFORMATION ABOUT
VICTORIA"; AND "INFORMATION ABOUT UNITED".

THE MEETING
The Meeting will be held on June 30, 1995 at 10:00 a.m., Central
Standard Time, at the Fort Bend Country Club, 2627 FM 762, Richmond, Texas, for
purposes of (i) approving, ratifying, confirming and adopting the Merger
Agreement; and (ii) transacting such other business as may properly come before
the Meeting. SEE "INTRODUCTION", AND "THE MEETING--GENERAL". RECORD DATE

The Record Date has been set by United's Board of Directors as 5:00
p.m. on June 1, 1995. Only holders of United Common Stock as of the Record
Date will be entitled to vote at the Meeting. SEE "INTRODUCTION"; AND "THE
MEETING-- GENERAL".

SHAREHOLDER VOTES REQUIRED

The Merger must be approved by the affirmative vote of the holders of
a majority of the shares of United Common Stock, issued and outstanding and
entitled to vote at the Meeting.
Of the 235,806 shares of United Common Stock currently outstanding,
165,312 shares, or 70.11%, are subject to the United Voting Agreement pursuant
to which the Voting Representative thereunder has the right to vote such shares
at any meeting on any issue with respect to which holders of United Common
Stock would otherwise have the right to vote their respective shares, including
the right to vote with respect to a proposal to merge United with a third
party. Although the Voting Representative has the power to vote the shares of
United Common Stock which are subject to the United Voting Agreement with
respect to the Merger, the Voting Representative has decided to allow each
shareholder to vote his own shares with respect to the Merger. The Voting
Representative believes that each holder of United Common Stock should have the
opportunity to make his own investment decision regarding the Merger. Further,
the Voting Representative's voting of all of the shares subject to the United
Voting Agreement would prevent a party to the United Voting Agreement from
being able to exercise his statutory dissenters' rights of appraisal.
Six principal holders of United Common Stock have agreed, pursuant to
the Voting Agreements and Proxies and subject to the terms and conditions
thereof, to vote their United Common Stock in favor of the Merger. Because
these six shareholders have the power to vote 116,525 shares, or 49.42%, of the
issued and outstanding United Common Stock, the vote of only 1,379 shares, or
0.58%, of the remaining issued and outstanding United Common Stock will be
required to assure approval of the Merger by the holders of United Common
Stock. SEE "INTRODUCTION"; "THE MERGER--GENERAL"; "THE MERGER--ADDITIONAL
AGREEMENTS"; AND "INFORMATION ABOUT UNITED--MANAGEMENT AND PRINCIPAL
SHAREHOLDERS".
Subject to the satisfaction or waiver of all of the conditions to
Victoria's obligations to effect the Merger, Victoria has approved the Merger
Agreement in the manner prescribed by the Texas Business Corporation Act
("TBCA"). SEE "THE MERGER--GENERAL".

DISSENTERS' RIGHTS

Under the TBCA, a shareholder has the right to dissent from the Merger
and receive payment in cash of the fair value of his shares of United Common
Stock by (i) filing a written notice of objection to

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<PAGE> 15

the Merger with the presiding officer of the Meeting at or prior to the Meeting
and by not voting in favor of the Merger at the Meeting; (ii) within ten (10)
days after receiving notice that the Merger was effected, making a written
demand on Victoria for payment of the fair value of his shares; and (iii)
within twenty (20) days after demanding payment for his shares, submitting the
certificates to Victoria for notation that such a demand has been made. A
shareholder must follow the exact procedure required by the TBCA in order to
properly exercise his dissenter's rights of appraisal and avoid waiver of those
rights. VOTING IN FAVOR OF THE MERGER OR RETURNING AN UNMARKED PROXY WILL
EFFECTIVELY WAIVE A SHAREHOLDER'S RIGHTS OF APPRAISAL. For a more detailed
description of the statutory dissenters' rights procedure, see the applicable
provisions of the TBCA which are reproduced in full in Appendix II to this
Proxy Statement/Prospectus. SEE "THE MERGER--APPRAISAL RIGHTS"; "COMPARISON OF
RIGHTS OF SHAREHOLDERS OF UNITED AND VICTORIA--APPRAISAL RIGHTS"; AND APPENDIX
II.

CONDITIONS TO CONSUMMATION; REGULATORY APPROVALS; TERMINATION

Consummation of the Merger is subject to approval of the Merger by the
United shareholders, receipt of required regulatory approvals or waivers from
the Banking Commissioner of Texas ("Commissioner"), the Federal Reserve and the
Federal Deposit Insurance Corporation ("FDIC"), and the satisfaction or waiver
of certain other conditions. SEE "THE MERGER--OTHER TERMS AND CONDITIONS".
Merger applications have been filed with the Commissioner and the FDIC for the
merger of RB&T into VB&T, and a waiver request by Victoria to merge with United
has been filed with the Federal Reserve. It is expected that the Commissioner
and the FDIC will approve the applications and the Federal Reserve will grant a
waiver, although there can be no assurance they will do so. SEE "THE
MERGER--GOVERNMENT APPROVALS"; AND "THE MERGER-- FEDERAL INCOME TAX
CONSEQUENCES".

Following Federal Reserve waiver and FDIC approval, the United States
Department of Justice ("Justice Department") has at least fifteen days in which
to bring action opposing the Merger under the antitrust laws, which action
would stay the approval of the transaction unless otherwise ordered by an
appropriate judicial authority. No Justice Department objection or adverse
action is anticipated.

The respective Boards of Directors of Victoria and United may
terminate the Merger Agreement for, among other reasons, the failure of any of
the several conditions to each of their respective obligations to consummate
the Merger, or the failure of the Merger to become effective on or before the
expiration of nine months from the date of the Merger Agreement, or such later
date agreed to in writing by Victoria and United. SEE "THE MERGER--OTHER TERMS
AND CONDITIONS"; "THE MERGER--BUSINESS PENDING EFFECTIVE TIME"; "THE
MERGER--GOVERNMENT APPROVALS"; AND APPENDIX I.

FEDERAL INCOME TAX CONSEQUENCES

In the opinion of Bracewell & Patterson, L.L.P., based upon certain
assumptions and representations, the Merger, if consummated in accordance with
the Merger Agreement, will qualify as a "reorganization" under the Internal
Revenue Code of 1986, as amended (the "Code"), and as a result of such
qualification, no gain or loss should be recognized by holders of United Common
Stock for federal income tax purposes upon receipt of Victoria Common Stock in
accordance with the Merger Agreement. Any gain attributable to cash received
by holders of United Common Stock in lieu of fractional shares of Victoria
Common Stock will be taxed as ordinary income (loss) or capital gain

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(loss) depending upon each shareholder's situation. Those shareholders who
receive cash upon exercise of their dissenters' rights will recognize gain or
loss for federal income tax purposes which may be ordinary income (loss) or
capital gain (loss) depending upon each shareholder's situation. No
information is provided herein with respect to the tax consequences, if any, of
the Merger to shareholders under any state, local or foreign tax laws. SEE
"THE MERGER-- FEDERAL INCOME TAX CONSEQUENCES"; AND "LEGAL OPINIONS".

EACH UNITED SHAREHOLDER IS ADVISED TO CONSULT WITH HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO HIM, INCLUDING THE
APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN INCOME OR OTHER TAX LAWS.
SEE "THE MERGER--FEDERAL INCOME TAX CONSEQUENCES".

ACCOUNTING TREATMENT

Victoria will account for the Merger under the pooling-of-interests
method for financial reporting and all other purposes. SEE "THE
MERGER--ACCOUNTING TREATMENT".

RISK FACTORS

Ownership of Victoria Common Stock involves certain risks. In
considering how to vote with respect to the Merger, holders of United Common
Stock should carefully examine the "Risk Factors" section of this Proxy
Statement/Prospectus, as well as other pertinent information set forth in this
Proxy Statement/Prospectus. SEE "RISK FACTORS".

INTERESTS OF CERTAIN PERSONS IN THE MERGER

Following consummation of the Merger, VB&T will employ Mr. D.W.
Neuenschwander, Chairman of the Board and President of United and RB&T, as a
consultant pursuant to a three-year Consulting Agreement entered into between
VB&T and Mr. Neuenschwander. In addition to being reimbursed for reasonable
and customary expenses incurred in providing consulting services to VB&T, Mr.
Neuenschwander will receive $294,000 as compensation for services rendered
under the Consulting Agreement with such sum to be paid in equal monthly
installments during the three-year term of the Consulting Agreement. Mr.
Neuenschwander may also participate in all medical and health insurance plans
generally provided by VB&T to its employees. Pursuant to the Consulting
Agreement, VB&T will provide Mr. Neuenschwander with an office in the main
office of RB&T which, after the consummation of the Merger and the subsequent
merger of RB&T with VB&T, will be a branch of VB&T. SEE "THE
MERGER--ADDITIONAL AGREEMENTS".
Immediately prior to the Effective Time of the Merger, United will
redeem all of the issued and outstanding shares of United Series A Preferred
Stock and United Series B Preferred Stock for the liquidation value of such
shares plus any accrued and unpaid dividends thereon through the Effective Time
of the Merger. United intends to continue to pay the scheduled dividends on
its United Series A Preferred Stock prior to redemption. Assuming a June 30,
1995 Effective Time, United would redeem each share of United Series A
Preferred Stock for $7.50 and each share of United Series B Preferred Stock for
approximately $11.62. Assuming a redemption date of June 30, 1995, the
executive officers and directors of United and the executive officers of RB&T,
and their related interests, would receive the following in connection with the
redemption of the United Series A Preferred Stock and United Series B Preferred
Stock: Andrew Dow $2,407.50; D.W. Neuenschwander $402,192.54 and G.W.
Neuenschwander $10,140.00. SEE "THE MERGER--REDEMPTION OF PREFERRED STOCK".

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RISK FACTORS

In connection with their consideration of the proposed Merger, holders
of United Common Stock should carefully examine this entire Proxy
Statement/Prospectus and give particular consideration to the risks set forth
below.

SPECIAL CONSIDERATIONS WITH RESPECT TO UNITED

Loss of Control
United shareholders currently control United, and indirectly control
RB&T, through their ability to elect the Board of Directors and vote on various
matters affecting United. The Merger will transfer control of United and RB&T
from United's shareholders to Victoria, and the former offices of RB&T will
become branches of VB&T. As of the Effective Time, the holders of United
Common Stock will become shareholders of Victoria. Assuming all United
shareholders exchange their shares for Victoria Common Stock, at a Pricing
Average of $25.86, the United shareholders will own 306,547 shares, or 3.7%, of
Victoria Common Stock. At a Pricing Average of $33.75, the United shareholders
will own 235,556, or 2.9%, of Victoria Common Stock. At a Pricing Average of
$21.25, the United shareholders will own 374,118, or 4.5%, of Victoria Common
Stock. As a result of the Merger, the former holders of United Common Stock
will no longer have the ability to control or influence the management policies
of United's or RB&T's operations, and as shareholders of Victoria, they will
have little ability to influence the management policies of Victoria because
they will hold a relatively small percentage of the voting stock of Victoria.

SPECIAL CONSIDERATIONS WITH RESPECT TO VICTORIA

Governmental Regulation

Bank holding companies and banks operate in a highly regulated
environment and are subject to extensive supervision and examination by several
federal and state regulatory agencies. Victoria is subject to the BHC Act and
to regulation and supervision by the Federal Reserve. As a state bank, VB&T is
subject to regulation and supervision by the Texas Department of Banking and,
as a result of the insurance of its deposits, by the FDIC. Although the
various laws and regulations which apply to Victoria and VB&T are intended to
insure safe and sound banking practices, they are primarily intended to benefit
depositors and the federal deposit insurance fund, and not primarily the
shareholders of Victoria. Victoria and VB&T are subject to changes in federal
and state law, as well as changes in regulations and governmental policies,
income tax laws and accounting principles. The effects of any potential
changes cannot be predicted but could adversely affect the business and
operations of Victoria and its subsidiaries in the future. SEE "SUPERVISION
AND REGULATION".

The Federal Reserve has adopted a regulation which requires a bank
holding company such as Victoria to serve as a source of financial strength to
its banking subsidiaries. The Federal Reserve has ordered bank holding
companies to contribute cash to their troubled bank subsidiaries based upon
this "source of strength" regulation, which could have the effect of decreasing
funds available for distributions to shareholders. In addition, as an
institution with total assets of $500 million or more, VB&T is required to file
annual reports with federal and state regulators that RB&T is not required to
file, the financial impact of which is not material. Other than these annual
reports VB&T is required to file, United and RB&T are subject to the same
regulatory scheme as Victoria and VB&T. SEE "SUPERVISION AND REGULATION".

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Competition

The banking business is highly competitive, and the profitability of
Victoria depends principally upon VB&T's ability to compete in its market area.
VB&T competes with other commercial and savings banks, savings and loan
associations, credit unions, finance companies, mutual funds, insurance
companies, brokerage and investment banking firms, asset-based non-bank lenders
and certain other non-financial institutions, including retail stores which may
maintain their own credit programs and certain governmental organizations which
may offer more favorable financing than VB&T. Some of such competitors may
have greater financial and other resources than Victoria. Although VB&T has
been able to compete effectively in the past, no assurances may be given that
VB&T will continue to be able to compete effectively in the future.

The State of Texas permits statewide branch banking and statewide
savings and loan branching which also increases competition for VB&T. In
addition, in the fall of 1994, the United States Congress passed and President
Clinton signed into law the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Riegle-Neal Act"), which expands the authority of
bank holding companies and banks to engage in interstate bank acquisitions and
interstate branching. The Riegle-Neal Act may increase the level of
competition facing Victoria and VB&T. In light of the legislative initiatives
relating to the banking industry introduced during the past several years,
there can be no assurance that the United States Congress will not enact
additional legislation that may further increase competitive pressures on VB&T.

VB&T competes with other financial institutions on the basis of
service, convenience and price. Due in part to both regulatory changes and
consumer demands, banks have experienced increased competition from other
financial and non- financial entities offering similar products. Competition
from both financial and non-financial institutions is expected to continue.

Economic Conditions
General economic conditions have a significant impact on the banking
industry. The credit quality of Victoria's loan portfolio necessarily
reflects, among other things, the general economic conditions in the areas in
which it conducts its business. In general, real estate values, as well as
real estate development and sales activities, tend to reflect a region's
economic environment. The Texas real estate environment has improved in recent
years. The continued financial success of Victoria and its subsidiaries
depends somewhat on factors that are beyond Victoria's control, including
national and local economic conditions, the supply and demand for investable
funds, interest rates, regulatory policies and federal, state and local laws
affecting these matters. Any substantial deterioration in any of the foregoing
conditions could have a material adverse effect on Victoria's financial
condition and results of operations which, in all likelihood, would adversely
affect the market price of Victoria Common Stock. SEE "MARKET PRICES".

Dividend History and Dividend Restrictions

Holders of Victoria Common Stock are entitled to receive dividends
when as and if declared by Victoria's Board of Directors from funds legally
available therefor, after payment of all dividends on Victoria Preferred Stock,
if any, outstanding. Victoria has no shares of Victoria Preferred Stock
outstanding at this time. Subject to the restrictions more fully described
herein, Victoria has the ability to issue multiple series of Victoria Preferred
Stock with preferential treatment in terms of certain rights and preferences,
including the right to receive dividends, liquidation preferences and
redemption rights. SEE "DESCRIPTION OF VICTORIA COMMON AND PREFERRED
STOCK--VICTORIA PREFERRED STOCK" AND "COMPARISON OF RIGHTS OF SHAREHOLDERS OF
UNITED AND VICTORIA--DIVIDENDS".

Under Texas law, Victoria may pay dividends out of surplus. Dividends
paid by its subsidiaries are the primary source of funds available to Victoria
for payment of dividends to its shareholders and for other needs.

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Victoria's ongoing ability to pay dividends is, therefore, contingent upon its
subsidiaries' ability to pay dividends to Victoria. Federal and state banking
regulations applicable to Victoria and VB&T require the retention of minimum
levels of capital which limit the amounts available for payment of dividends.
In addition, bank regulatory authorities have the ability to prohibit or
restrict dividend payments through written agreements and other enforcement
measures. Victoria paid cash dividends of $4.1 million and $2.9 million to
holders of Victoria Common Stock during 1994 and 1993, respectively. Victoria
has paid cash dividends for eleven consecutive quarters. In January 1995,
Victoria declared a $.16 per share quarterly dividend, an increase of 23% from
its previous quarterly dividend of $.13 per share, and a special $.09 per share
dividend, both of which were paid on February 14, 1995. There can be no
assurance that the payment of dividends by Victoria will continue. SEE
"SUPERVISION AND REGULATION"; "DESCRIPTION OF VICTORIA COMMON AND PREFERRED
STOCK-- DIVIDENDS" AND "COMPARISON OF RIGHTS OF SHAREHOLDERS OF UNITED AND
VICTORIA--DIVIDENDS".

SPECIAL CONSIDERATIONS WITH RESPECT TO THE MERGER

Floor and Ceiling on Merger Consideration
As a condition to Victoria's and United's respective obligations to
consummate the Merger, the parties have agreed that the Pricing Average must be
between $21.25 and $33.75. If the Pricing Average either falls below or rises
above this range, the Merger will not occur unless both parties waive this
condition. There can be no assurance that United and Victoria will waive this
condition. In that event, the Merger Agreement would terminate, United
shareholders would not receive any Merger Consideration but would retain their
United Common Stock, and United would continue to operate as the owner of RB&T.
In the event that the Merger is not consummated, United will not redeem its
United Series A Preferred Stock or United Series B Preferred Stock. If the
Effective Time is in June 1995 as anticipated, the Pricing Average will be
$25.86 and each share of United Common Stock will be converted into
approximately 1.30 shares of Victoria Common Stock. If the Pricing Average at
the Effective Time is $21.35, each outstanding share of United Common Stock
will be converted into 1.59 shares of Victoria Common Stock. If the Pricing
Average at the Effective Time is $33.75, each outstanding share of United
Common Stock will be converted into approximately 1.00 share of Victoria Common
Stock. SEE "THE MERGER--OTHER TERMS AND CONDITIONS" AND APPENDIX I.

Integration of RB&T into VB&T

The systems and operations of RB&T will be converted to and integrated
with those utilized by VB&T. Based on Victoria's past experience in
integrating institutions comparable to RB&T into VB&T, Victoria does not
presently foresee any difficulties in accomplishing this conversion. There can
be no assurance, however, that complications will not arise in connection with
the integration of one or more of the systems, operations, policies or
procedures of RB&T with the corresponding systems, operations policies or
procedures of VB&T.

Dilution of Shareholders of Victoria

Victoria's Articles of Incorporation do not provide shareholders with
a preemptive right to subscribe for additional shares of Victoria Common Stock
upon any increase thereof. Thus, upon the issuance of any additional shares of
Victoria Common Stock or other voting securities of Victoria, or securities
convertible into Victoria Common Stock or other voting securities of Victoria,
shareholders of United who receive shares of Victoria Common Stock in the
Merger may be unable to maintain their pro rata voting ownership in Victoria.
SEE "DESCRIPTION OF VICTORIA COMMON AND PREFERRED STOCK--VICTORIA COMMON STOCK"
AND "COMPARISON OF RIGHTS OF SHAREHOLDERS OF UNITED AND VICTORIA--PREEMPTIVE
RIGHTS".

-13-
<PAGE> 20

Interest Rate Risk

Victoria's earnings depend to a great extent upon the level of net
interest income generated by VB&T, which is the difference between interest
income earned on loans and investments and the interest expense paid on
deposits and other borrowings. From time to time, maturities of assets and
liabilities are not balanced, and a rapid increase or decrease in interest
rates could have an adverse effect on net interest margins and results of
operations of Victoria. The difference between VB&T's interest-rate sensitive
assets and interest-rate sensitive liabilities for a specified time-frame is
referred to as "GAP". Interest rate sensitivity reflects the potential effect
on net interest income of a movement in interest rates. A company is
considered to be asset sensitive, or having a positive GAP, when the amount of
its interest-earning assets maturing or repricing within a given period exceeds
the amount of its interest-bearing liabilities also maturing or repricing
within that time period. Conversely, a company is considered to be liability
sensitive, or having a negative GAP, when the amount of its interest-bearing
liabilities maturing or repricing within a given period exceeds the amount of
its interest-earning assets also maturing or repricing within that time period.
During a period of rising interest rates, a positive GAP would tend to increase
net interest income, while a negative GAP would tend to adversely affect net
interest income. During a period of falling interest rates, a positive GAP
would tend to adversely affect net interest income, while a negative GAP would
tend to increase net interest income. At December 31, 1994, Victoria had a
positive GAP of $67.9 million, as its interest-earning assets maturing within
one year exceeded the amount of its interest-bearing liabilities within that
time period. As a result, Victoria's net interest income would be expected to
increase during a period of rising interest rates. This type of analysis is as
of a point-in-time position, when in fact that position can quickly change as
market conditions, customer needs, and management strategies change. Thus,
interest rate changes do not affect all categories of assets and liabilities
equally or at the same time.

In addition, interest rates are highly sensitive to many factors which
are beyond the control of VB&T including the influence of domestic and foreign
economic conditions, and, in particular, the monetary and fiscal policies of
the United States government, the Federal Reserve and federal agencies. The
nature, timing and effect of any future changes in federal monetary and fiscal
policies on VB&T and its results of operations are not predictable.

Anti-takeover Provisions

Victoria's Articles of Incorporation, as well as certain Texas and
federal laws and regulations, will assist Victoria in maintaining its status as
an independent publicly-owned corporation. Victoria's Articles of
Incorporation provide for noncumulative voting for directors and authorize the
Board of Directors of Victoria to issue shares of Victoria Preferred Stock
without shareholder approval. Shares of Victoria Preferred Stock may be issued
by Victoria in the future without shareholder approval and upon such terms as
the Board of Directors may determine. The rights of the holders of Victoria
Common Stock will be subject to, and may be adversely affected by, the rights
of the holders of any Victoria Preferred Stock that may be issued in the
future. The issuance of Victoria Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions, financings and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire, or of discouraging a third party from acquiring, a
controlling interest in Victoria. Victoria has no present plans to issue any
shares of Victoria Preferred Stock. SEE "DESCRIPTION OF VICTORIA COMMON
AND PREFERRED STOCK--VICTORIA PREFERRED STOCK". These provisions in Victoria's
governing instruments may discourage potential proxy contests and other
takeover attempts, particularly those which have not been negotiated with the
Board of Directors of Victoria. Accordingly, holders of United Common Stock
who will receive shares of Victoria Common Stock in connection with the Merger
may be deprived of an opportunity to sell their shares of Victoria Common Stock
at a substantial premium over the market price of such shares. In addition,
federal law also requires the approval of the Federal Reserve prior to the
acquisition of "control" of a bank holding company. SEE "SUPERVISION AND
REGULATION".

-14-
<PAGE> 21
SUMMARY OF SELECTED FINANCIAL DATA

The following table summarizes certain financial data of Victoria and
United. The historical data for the three months ended March 31, 1995 are
derived from the unaudited consolidated financial statements of Victoria and
the unaudited consolidated financial statements of United. The historical data
for the five years in the period ended December 31, 1994 are derived from the
audited consolidated financial statements of Victoria and the audited
consolidated financial statements of United. The unaudited proforma combined
financial data assume the Merger was accounted for as a pooling-of-interests
and was in effect for all periods presented. The unaudited proforma combined
financial data also assume a Pricing Average of $25.86 per share, total Merger
Consideration of $7,950,000 and an Exchange Ratio of 1.30. The actual Pricing
Average and Merger Consideration may differ from these amounts. SEE
"SUMMARY--THE MERGER". The proforma financial data do not purport to be
indicative of the results that would have actually been obtained if the Merger
had been in effect as of the dates indicated or that may be obtained in future
periods. This information should be read in conjunction with the historical
consolidated financial statements and the related notes included elsewhere or
incorporated by reference in this Proxy Statement/Prospectus.

<TABLE>
<CAPTION> As of and
for the
Three Months
Ended As of and for the Years Ended
March 31, December 31,
--------- --------------------------------------------------------------
1995 1994 1993 1992 1991 1990
--------- ---------- ---------- ---------- ---------- ----------
(In thousands, except per share and share data)
<S> <C> <C> <C> <C> <C> <C>
Average total assets
Victoria . . . . . . . . . . . . . $1,717,711 $1,745,472 $1,736,413 $1,528,855 $1,531,908 $1,431,631
United . . . . . . . . . . . . . . 65,601 67,449 66,330 60,586 60,175 58,276
Average total deposits
Victoria . . . . . . . . . . . . . 1,448,880 1,461,755 1,477,213 1,829,053 1,806,110 1,158,313
United . . . . . . . . . . . . . . 60,439 62,136 61,310 55,962 55,551 53,621
Average long-term debt
Victoria . . . . . . . . . . . . . 1,814 1,037 1,644 5,560 12,880 35,476
United . . . . . . . . . . . . . . 0 0 0 0 0 0
Average total stockholders' equity
Victoria . . . . . . . . . . . . . 177,089 169,483 147,137 121,462 105,771 97,639
United . . . . . . . . . . . . . . 4,300 4,368 4,064 3,460 2,845 2,896
Average total stockholders' equity
as a percent of average total assets
Victoria . . . . . . . . . . . . . 10.31% 9.71% 8.47% 7.94% 6.90% 6.82%
United . . . . . . . . . . . . . . 6.55% 6.48% 6.13% 5.71% 4.73% 4.97%
Net interest income
Victoria . . . . . . . . . . . . . 15,634 63,460 61,892 59,074 50,496 44,266
United . . . . . . . . . . . . . . 680 2,627 2,720 2,460 2,149 1,903
Net income (loss)
Victoria . . . . . . . . . . . . . 3,866 16,593 18,528 19,053 12,936 3,946
United . . . . . . . . . . . . . . 106 359 606 477 321 (359)
Net income (loss) as a percent of average
total assets
Victoria . . . . . . . . . . . . . 0.91% 0.95% 1.07% 1.25% 0.84% 0.28%
United . . . . . . . . . . . . . . 0.66% 0.53% 0.91% 0.79% 0.53% (0.62%)
Net income (loss) as a percent of average
total stockholders' equity
Victoria . . . . . . . . . . . . . 8.85% 9.79% 12.59% 15.69% 12.23% 4.04%
United . . . . . . . . . . . . . . 10.00% 8.22% 14.91% 13.79% 11.28% (12.40%)

</TABLE>

-15-
<PAGE> 22
<TABLE>
<CAPTION> As of and
For the
Three Months
Ended AS OF AND FOR THE YEARS ENDED
March 31, DECEMBER 31,
---------- ----------------------------------------------------------
1995 1994 1993 1992 1991 1990
---------- -------- -------- -------- ------- --------
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net income (loss) per common share
Victoria
Historical . . . . . . . . . . . . . . . . . 0.49 2.09 2.50 2.69 1.83 0.56
Pro Forma(1) . . . . . . . . . . . . . . . 0.48 2.05 2.47 2.64 1.80 0.48
United
Historical . . . . . . . . . . . . . . . . . 0.40 1.33 2.38 1.89 1.28 (1.87)
Pro Forma . . . . . . . . . . . . . . . . . 0.31 1.03 1.84 1.41 1.01 (1.37)
Cash dividends per common share
Victoria
Historical . . . . . . . . . . . . . . . . . 0.25 0.52 0.40 0.31 0.03 0.02
Pro Forma . . . . . . . . . . . . . . . . . 0.24 0.50 0.38 0.29 0.02 0.02
United
Historical . . . . . . . . . . . . . . . . . 0 0 0 0 0 0
Pro Forma . . . . . . . . . . . . . . . . . 0 0 0 0 0 0
Book value per common share
Victoria
Historical . . . . . . . . . . . . . . . . . 22.36 21.99 20.67 18.31 15.93 14.13
Pro Forma . . . . . . . . . . . . . . . . . 22.02 21.61 20.35 18.00 15.66 13.88
United
Historical . . . . . . . . . . . . . . . . . 17.11 15.46 15.87 13.40 11.44 10.13
Pro Forma . . . . . . . . . . . . . . . . . 13.16 11.89 12.21 10.31 8.80 7.79
Weighted average number of shares outstanding . .
Victoria
Historical . . . . . . . . . . . . . . . . . 7,962,512 7,937,975 7,423,772 7,080,621 7,080,621 7,080,621
Pro Forma . . . . . . . . . . . . . . . . . 8,269,060 8,244,523 7,730,320 7,379,626 7,361,017 7,361,017
United
Historical . . . . . . . . . . . . . . . . . 235,806 235,806 235,806 230,004 215,689 215,689
Pro Forma . . . . . . . . . . . . . . . . . 306,548 306,548 306,548 299,005 280,396 280,396
Number of shares of common outstanding
at end of period
Victoria
Historical . . . . . . . . . . . . . . . . . 7,962,512 7,962,512 7,915,621 7,080,621 7,080,621 7,080,621
Pro Forma . . . . . . . . . . . . . . . . . 8,269,060 8,269,060 8,222,169 7,379,626 7,361,017 7,361,017
United
Historical . . . . . . . . . . . . . . . . . 235,806 235,806 235,806 235,806 215,689 215,689
Pro Forma . . . . . . . . . . . . . . . . . 306,548 306,548 306,548 306,548 280,396 280,396
</TABLE>

(1) If the Pricing Average was $21.25, then the pro forma net income per
common share would be $2.03, and the weighted average number of shares
outstanding would be 8,312,093. If the Pricing Average was $33.75, then
the pro forma net income per common share would be $2.07, and the weighted
average number of shares outstanding would be 8,173,531.

-16-
<PAGE> 23
MARKET PRICES

Victoria Common Stock is traded on the Nasdaq National Market under
the symbol "VICT". The following table sets forth the actual high and low
prices for Victoria Common Stock for the periods indicated as reported in The
---
Wall Street Journal. The prices shown do not include mark-ups, mark-downs or
- -------------------
commissions. All share values have been rounded to the nearest one-eighth of
one dollar.

<TABLE>
<CAPTION>
VICTORIA COMMON STOCK
----------------------
PERIOD HIGH LOW
-------------------------------------------------- ----- -----
<S> <C> <C>
1993

First Quarter . . . . . . . . . . . . . . . . . . 27.25 23.75

Second Quarter . . . . . . . . . . . . . . . . . 27.00 21.50

Third Quarter . . . . . . . . . . . . . . . . . . 29.00 21.75

Fourth Quarter . . . . . . . . . . . . . . . . . 29.00 26.25

1994
First Quarter . . . . . . . . . . . . . . . . . . 27.75 23.75

Second Quarter . . . . . . . . . . . . . . . . . 27.25 24.00

Third Quarter . . . . . . . . . . . . . . . . . . 29.00 25.25

Fourth Quarter . . . . . . . . . . . . . . . . . 27.00 21.75

1995
First Quarter . . . . . . . . . . . . . . . . . . 26.50 21.75

Second Quarter (through May 4, 1995) . . . . . . 26.00 23.75

</TABLE>

On January 11, 1995, the last trading day prior to the announcement of
the Merger, the last sale price for Victoria Common Stock was $21.88, and on
May 4, 1995, the last sale price for such stock was $25.00 As of March 24,
1995, there were approximately 2,910 holders of Victoria Common Stock. There
is no assurance that such transactions or those reflected in the table of
actual high and low sales prices represent all or a representative sample of
the actual transactions which occurred or that the high and low prices shown
reflect the full ranges at which transactions occurred during the period
indicated.

There is no active public trading market for United Common Stock and
it is traded infrequently in private transactions. As of the date of this
Proxy Statement/Prospectus, there were 133 holders of United Common Stock. The
last transaction in United Common Stock known to United's management to have
occurred prior to the announcement of the Merger was on December 14, 1994, when
6,000 shares of United Common Stock were sold at a price of $6.50 per share.
This is the only trade in United Common Stock of which United's management is
aware of the price paid per share which has occurred since January 1, 1993.
This price is not necessarily indicative of the fair market value of United
Common Stock.

-17-
<PAGE> 24
THE MEETING

GENERAL
This Proxy Statement/Prospectus is furnished in connection with the
solicitation of proxies by the Board of Directors of United for use at the
Meeting. The Meeting is a special meeting of shareholders of United held for
the purpose of considering and voting on the proposed Merger of United with and
into Victoria on the terms and conditions set forth in the Merger Agreement.
The Meeting will be held on June 30, 1995 at 10:00 a.m., at the Fort Bend
Country Club, 2627 FM 762, Richmond, Texas.

The holders of record of United Common Stock at the close of business
on June 1, 1995 are entitled to notice of and to vote at the Meeting. At the
close of business on such date, United had issued and outstanding and entitled
to vote at the Meeting 235,806 shares of United Common Stock. Each holder of
United Common Stock will be entitled to one vote for each share of United
Common Stock owned of record on the Record Date. The affirmative vote of a
majority of the United Common Stock is required to approve the Merger.
PROXIES

Proxies, in the form enclosed, which are properly executed by the
holders of United Common Stock and returned to United and not subsequently
revoked, will be voted at the Meeting in accordance with the directions
specified thereon, and otherwise in accordance with the judgment of the persons
designated as proxies. Any properly executed proxy on which voting
instructions are not specified will be voted in favor of the ratification and
approval of the Merger Agreement. A proxy may be revoked at any time before it
is voted by giving written notice to the Secretary of United, by execution of a
proxy of a later date filed with the Secretary of United at or before the
Meeting or by voting in person at the Meeting.

This proxy solicitation is made by the Board of Directors of United.
United shall be responsible for its expenses incurred in preparing, assembling,
printing, and mailing this Proxy Statement/Prospectus. Proxies will be
solicited through the mail. Additionally, directors, officers and regular
employees of United and RB&T intend to solicit proxies personally or by
telephone without receiving special compensation therefor. United will
reimburse banks, brokers and other custodians, nominees and fiduciaries for
their reasonable expenses in forwarding the proxy materials to beneficial
owners.

PRINCIPAL SHAREHOLDERS

As of the date of this Proxy Statement/Prospectus, the following
persons own beneficially 5% or more of the United Common Stock: Kirkendall &
Collins and Mr. D.W. Neuenschwander. SEE "INFORMATION ABOUT UNITED--MANAGEMENT
AND PRINCIPAL SHAREHOLDERS".

Of the 235,806 shares of United Common Stock currently outstanding,
165,312 shares, or 70.11%, are subject to the United Voting Agreement pursuant
to which the Voting Representative thereunder has the right to vote such shares
at any meeting on any issue with respect to which the United shareholders would
otherwise have the right to vote their respective shares, including the right
to vote on a proposal to merge United with a third party. Although the Voting
Representative has the power to vote the shares of United Common Stock which
are subject to the United Voting Agreement at the Meeting with respect to the
Merger, the Voting Representative has decided to allow each shareholder to vote
his own stock with respect to the Merger.
Subject to certain termination rights, six of the principal holders of
United Common Stock, have agreed, pursuant to the Voting Agreements and
Proxies, to vote all of their United Common Stock in favor of the Merger. The
Voting Agreements and Proxies apply only with respect to the vote on the Merger
and terminate upon the

-18-
<PAGE> 25
earlier of (i) the termination of the Merger Agreement, or (ii) the consummation
of the Merger. Because these six shareholders have the power to vote in the
aggregate 116,525 shares, or 49.42%, of the issued and outstanding United Common
Stock, the vote of only 1,379 shares, or 0.58%, of the remaining issued and
outstanding United Common Stock will be required to assure approval of the
Merger by the holders of United Common Stock. SEE "SUMMARY--REASONS FOR THE
MERGER; RECOMMENDATION OF BOARD OF DIRECTORS"; "SUMMARY--SHAREHOLDER VOTES
REQUIRED"; "THE MERGER--GENERAL"; "THE MERGER-- ADDITIONAL AGREEMENT"; AND
"INFORMATION ABOUT UNITED--MANAGEMENT AND PRINCIPAL SHAREHOLDERS".

THE MERGER

The following information sets forth the material terms of the Merger
and is qualified in its entirety by reference to more detailed information
contained elsewhere in this Proxy Statement/Prospectus, including the
Appendices hereto and the documents referred to herein or incorporated herein
by reference. A copy of the Merger Agreement is included as Appendix I and is
incorporated herein by reference.

GENERAL

The Merger Agreement provides for the merger of United with and into
Victoria. As a result of the Merger, RB&T will become a wholly-owned
subsidiary of Victoria. Immediately subsequent to the Merger, Victoria will
cause RB&T to merge into VB&T. Victoria will be the surviving entity in the
Merger and the officers and directors of Victoria will continue to be the
officers and directors of Victoria after the Merger. SEE "THE
MERGER--ADDITIONAL AGREEMENTS".
Pursuant to the Merger Agreement, the outstanding shares of United
Common Stock, other than shares held by dissenting shareholders, will be
converted into a number of shares of Victoria Common Stock determined in
accordance with the provisions of the Merger Agreement. The exchange ratio
used to determine the number of shares of Victoria Common Stock into which
each outstanding share of United Common Stock will be converted will be
calculated by dividing (i) the aggregate number of shares of Victoria Common
Stock payable as merger consideration ("Merger Consideration") by (ii) the
number of shares of United Common Stock outstanding immediately prior to the
Effective Time of the Merger. The Merger Consideration is determined by
dividing $7,950,000 by the average closing price for Victoria Common Stock as
reported by Nasdaq National Market over a ten-day trading period ending on the
last day of the month ending prior to the consummation of the Merger ("Pricing
Average"). If the Effective Time occurs in June 1995 as anticipated, and
assuming no change in the number of shares of United Common Stock outstanding,
the Pricing Average (based on the ten-day trading period ending on the last
day of May 1995) will be $25.86 and each share of outstanding United Common
Stock will be converted into approximately 1.30 shares of Victoria Common Stock.
As a condition to consummation of the Merger, Victoria and United have agreed
that the Pricing Average must be between $21.25 and $33.75, unless both
parties waive this condition. If the Pricing Average at the Effective Time
is $21.25, each outstanding share of United Common Stock will be converted
into approximately 1.59 shares of Victoria Common Stock. If the Pricing
Average at the Effective Time is $33.75, each outstanding share of United
Common Stock will be converted into approximately 1.00 share of Victoria
Common Stock. SEE "SUMMARY--THE MERGER"; "SUMMARY--APPRAISAL RIGHTS"; "THE
MERGER--APPRAISAL RIGHTS"; APPENDIX I; AND APPENDIX II.
During the negotiation of the Merger Consideration, United and
Victoria disagreed over the value of a certain parcel of real estate held by
RB&T that RB&T was attempting to sell. In order to resolve this disagreement
and to give the United shareholders additional consideration for a sale of the
real estate at a price above the value placed on the real estate by Victoria,
Section 1.7 of the Merger Agreement provides that in the event that United is
able to sell the real estate prior to the Effective Time of the Merger for an
aggregate price of $372,000 or greater, the Merger Consideration shall be a
number which, when multiplied by the Pricing Average, shall equal

-19-
<PAGE> 26
$8,100,000. As of the date of this Proxy Statement/Prospectus, there are no
outstanding offers to purchase such real estate at a price of $372,000 or
greater.

As of March 24, 1995, there were 235,806 shares of United Common Stock
issued and outstanding. SEE "INTRODUCTION"; "SUMMARY--THE MERGER"; AND
APPENDIX I.

Victoria will not issue fractional shares of Victoria Common Stock,
but Victoria will instead pay cash to any United shareholder otherwise entitled
to receive a fractional share. Such cash payment will be based on the Pricing
Average.

The Merger must be approved by the affirmative vote of the holders of
a majority of the outstanding shares of United Common Stock entitled to vote at
the Meeting. SEE "INTRODUCTION"; "SUMMARY--SHAREHOLDER VOTES REQUIRED"; "THE
MERGER--OTHER TERMS AND CONDITIONS"; AND APPENDIX I.
Of the 235,806 shares of United Common Stock currently outstanding,
165,312 shares, or 70.11%, are subject to the United Voting Agreement pursuant
to which the Voting Representative thereunder has the right to vote such shares
at any meeting on any issue with respect to which the United shareholders would
otherwise have the right to vote their respective shares, including the right
to vote with respect to a proposal to merge United with a third party.
Although the Voting Representative has the power to vote the shares of United
Common Stock which are subject to the United Voting Agreement at the Meeting
with respect to the Merger, the Voting Representative has decided to allow each
shareholder to vote his own stock with respect to the Merger.
United Common Stock have agreed, pursuant to the Voting Agreements and Proxies,
to vote their United Common Stock in favor of the Merger. The Voting
Agreements and Proxies apply only with respect to the vote on the Merger and
terminate upon the termination of the Merger Agreement. Because these six
shareholders have the power to vote 116,525 shares, or 49.42%, of the issued
and outstanding United Common Stock, the vote of only 1,379 shares, or 0.58%,
of the remaining issued and outstanding United Common Stock will be required to
assure approval of the Merger by the holders of United Common Stock. SEE
"INTRODUCTION"; "SUMMARY--SHAREHOLDER VOTES REQUIRED"; "THE MEETING--PRINCIPAL
SHAREHOLDERS"; "THE MERGER--GENERAL"; "THE MERGER--ADDITIONAL AGREEMENTS"; AND
"INFORMATION ABOUT UNITED--MANAGEMENT AND PRINCIPAL SHAREHOLDERS".
As of March 24, 1995, there were 7,962,512 shares of Victoria Common
Stock issued and outstanding. Subject to the satisfaction or waiver of all of
the conditions to Victoria's obligations to effect the Merger, Victoria has
approved the Merger Agreement in the manner prescribed by the TBCA. SEE
"SUMMARY--SHAREHOLDER VOTES REQUIRED".

The Merger will be effective upon the filing of Articles of Merger
with the Texas Secretary of State in the form required by and executed in
accordance with the TBCA, and upon the issuance of a Certificate of Merger by
the Texas Secretary of State. At the Effective Time, by operation of law,
holders of United Common Stock (other than those shareholders who perfect their
dissenters' rights) will automatically become owners of Victoria Common Stock,
and will no longer be owners of United Common Stock. All certificates
representing shares of United Common Stock dated before the Effective Time,
other than shares held by dissenting shareholders, will represent the right to
receive Victoria Common Stock pursuant to the Merger Agreement, but otherwise
will be null and void after such date. SEE "SUMMARY-- APPRAISAL RIGHTS"; "THE
MERGER--APPRAISAL RIGHTS"; AND APPENDIX II.

Immediately after the Merger, VB&T will continue to be an indirect
wholly-owned subsidiary of Victoria. SEE "SUMMARY--REGULATORY APPROVALS;
TERMINATION"; "THE MERGER--OPERATIONS AFTER THE MERGER"; "THE MERGER--FEDERAL
INCOME TAX CONSEQUENCES"; "THE MERGER--GOVERNMENT APPROVALS"; AND APPENDIX I.

-20-
<PAGE> 27
REDEMPTION OF PREFERRED STOCK
Immediately prior to the Effective Time of the Merger, United plans to
redeem all of its issued and outstanding shares of United Series A Preferred
Stock and United Series B Preferred Stock for the liquidation value of such
shares plus any accrued and unpaid dividends thereon through the Effective Time
of the Merger. United intends to continue to pay the scheduled dividends on
its United Series A Preferred Stock prior to redemption. Assuming a June 30,
1995 Effective Time, United would redeem each share of United Series A
Preferred Stock for $7.50 and each share of Series B Preferred Stock for
approximately $11.62. Assuming a redemption date of June 30, 1995, the
executive officers and directors of United and the executive officers of RB&T,
and their related interests, would receive the following in connection with the
redemption of the United Series A Preferred Stock and United Series B Preferred
Stock: Andrew Dow $2,407.50; D.W. Neuenschwander $402,192.54; and G.W.
Neuenschwander $10,140.00.

BACKGROUND OF THE MERGER
During 1994, several financial institutions, including Victoria,
contacted United representatives to discuss a possible business combination.
Representatives of Victoria and United then began discussions concerning a
possible affiliation of the two entities. Most of the discussions took place
between United's Chairman and President, D.W. Neuenschwander and Victoria's
Chief Financial Officer, Gregory Sprawka, with Victoria's Chairman, Charles R.
Hrdlicka, sometimes participating in the discussions. Initially, these
discussions, which were accompanied by the exchange of financial data by the
parties, contemplated prices ranging from $33.00 to $37.00 per share, payable
to holders of United Common Stock in the form of shares of Victoria Common
Stock having such values as determined by closing bids for Victoria Common
Stock on the Nasdaq National Market. In October 1994, Victoria made an oral
offer to acquire United within these price ranges, subject to the performance
of due diligence, board approvals and other conditions. At a special meeting
of the Board of Directors of United held on October 6, 1994, the Board
carefully considered Victoria's offer along with a competing offer from
another financial institution. Upon review of the two proposals, each of
which was subject to the negotiation of a satisfactory definitive merger
agreement, it was clear that Victoria's offer provided the higher value to all
of United's shareholders. The competing offer provided that approximately
two-thirds of the proposed consideration would be paid in the form of cash,
which would be a taxable transaction to United shareholders, and that the
remaining consideration would be paid in the form of a preferred stock which
would not have been publicly traded or had any other kind of ascertainable
trading market. In addition, United would have had to use a substantial
part of the consideration offered in the competing offer to retire its
existing debt and redeem the United Preferred Stock, thereby leaving for
United's common shareholders an amount of consideration less than that they
would receive pursuant to the Victoria offer. At this meeting, the Board of
Directors of United authorized its management to negotiate the terms of a
definitive merger agreement.
On October 12, 1994, Victoria and United entered into a letter of
intent whereby holders of United Common Stock would receive approximately
$33.00 per share if the Pricing Average was between $21.25 and $24.99,
approximately $35.00 per share if the Pricing Average was between $25.00 and
$28.00 and approximately $37.00 per share if the Pricing Average was between
$28.01 and $33.75, in the form of shares of Victoria Common Stock having such
values as determined by closing bids for Victoria Common Stock on the Nasdaq
National Market. After Victoria's due diligence examination of United,
discussions focused on a price of approximately $34.00 per share, payable to
holders of United Common Stock in the form of shares of Victoria Common Stock
having that value as determined by closing bids for Victoria Common Stock on
the Nasdaq National Market, rather than the price ranges contemplated in the
October 12, 1994 letter of intent. Pursuant to a second letter of intent dated
November 16, 1994, Victoria agreed to pay the Merger Consideration described
in this Proxy Statement/Prospectus. The Merger Agreement was negotiated by
United and its counsel and entered into with Victoria on January 12, 1995.
REASONS FOR THE MERGER AND RECOMMENDATION OF THE BOARD OF DIRECTORS

The terms of the Merger Agreement, including the Merger Consideration,
are the result of arms-length negotiations between Victoria and United and
their respective representatives. United consulted with its own legal counsel
during the course of negotiations. United's Board of Directors believes that
the Merger is fair to and in the best interests of its shareholders. In
reaching its decision to recommend approval of the Merger, United's Board of
Directors considered a number of factors. United's Board of Directors did not
assign any relative or specific weights to the individual factors considered.
Among other things, the Board of Directors considered:

(i) The financial terms of the Merger. United's Board of
Directors took into account the substantial premium
represented by the consideration offered to United's
shareholders, which constituted 1.96 times the book value per
share of United Common Stock and approximately 22 times the
earnings per share of United Common Stock. United's Board of
Directors believes that the exchange ratio represents a fair
multiple of United's per share book value and historical and
projected earnings. United's Board of Directors also reviewed
and considered a compilation of the financial terms of other
recent business

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<PAGE> 28
combinations in the banking industry during 1994 in the
Southwestern United States and the State of Texas. In these
transactions, the average multiple of book value per share
paid was 1.9 and the average multiple of earnings per share
paid was 12.34. Based on this data, the Board determined that
the financial terms of the Merger compared favorably to such
other transactions.
(ii) Investment liquidity. The shares of Victoria Common Stock to
be received in the Merger by holders of United Common Stock
will be listed for trading on the Nasdaq National Market and
should provide United's shareholders with investment liquidity
that is currently unavailable to them as holders of United
Common Stock, for which an active trading market does not
exist.
(iii) Certain financial and other information concerning Victoria.
Such information included, but was not limited to, the
financial condition, asset quality, historical earnings and
historical operations of Victoria and the market price and
book value of Victoria Common Stock. In addition, United's
Board of Directors considered the future growth prospects of
Victoria following the Merger and the potential synergies and
economies of scale expected to be realized from the Merger.
(iv) The business and prospects of United were it to remain
independent. In this regard, United's Board of Directors
considered the economic and competitive conditions in the
market served by United and RB&T, the capital and other
regulatory requirements to which United and RB&T were subject
and RB&T's customers' diverse demands for products and
services. United's Board of Directors determined that a
business combination with Victoria would provide both greater
short-term and long-term value to United's shareholders than
other alternatives available, including remaining independent,
and would offer United's shareholders the prospect of
receiving dividends and owning a publicly traded stock.

(v) The terms of the Merger other than the Merger Consideration.
In particular, United's Board of Directors considered the
anticipated tax free nature of the Merger to holders of United
Common Stock receiving shares of Victoria Common Stock. In
addition, the terms of the Merger Agreement provided
protection to United shareholders by giving United an
opportunity to terminate the Merger Agreement in the event
that the trading price per share of Victoria Common Stock fell
below certain levels. Finally, the Merger Agreement provides
for the redemption by United of all its shares of United
Series A Preferred Stock and United Series B Preferred Stock
prior to consummation of the Merger, which will enable all
holders of United's Preferred Stock to receive their
liquidation value plus all accumulated and unpaid dividends
with respect to their United Preferred Stock.

United's Board of Directors believes that United's and RB&T's
businesses can be substantially enhanced by the financial resources and
diversified operations of Victoria, that the Merger will produce a financial
institution better able to meet the competitive challenges in the financial
institution's industry and that combining United with Victoria will result in
economies of scale and increase the market served by VB&T in the Texas Gulf
Coast region.
United's Board of Directors believes that the holders of United Common
Stock will additionally benefit from the Merger through the ability to obtain,
in a tax-free exchange, ownership of shares in a larger enterprise with greater
financial resources and broader and more diversified classes of products,
while allowing those shareholders who wish to dispose of their interests for
cash the opportunity to do so in the open market provided by the Nasdaq
National Market. Certain holders of United Common Stock will be subject to
transfer restrictions on the shares of Victoria Common Stock received in the
Merger. SEE "THE MERGER--ADDITIONAL AGREEMENTS" AND "RESALE OF VICTORIA
COMMON STOCK".
United's Board of Directors believes the terms of the Merger are fair
and in the best interest of United's shareholders. UNITED'S BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT UNITED SHAREHOLDERS VOTE FOR APPROVAL OF THE MERGER
and has authorized consummation thereof subject to approval of the United
shareholders and the satisfaction of certain other conditions. SEE
"SUMMARY--REASONS FOR THE MERGER; RECOMMENDATION OF BOARD OF DIRECTORS".

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<PAGE> 29

OPERATIONS AFTER THE MERGER

Upon completion of the Merger, all of United's assets and liabilities
will be the assets and liabilities of Victoria. Likewise, after the merger of
RB&T with and into VB&T, all of RB&T's assets and liabilities will be the
assets and liabilities of VB&T, and VB&T will continue to be indirectly
wholly-owned by Victoria. The resignation of the directors of United and RB&T
is a condition to Closing under the Merger Agreement. The facilities of United
and RB&T will be the facilities of VB&T through which VB&T will conduct a full
service banking business in Rosenberg and Sugar Land, Texas. SEE
"SUMMARY--CONDITIONS TO CONSUMMATION; REGULATORY APPROVALS; TERMINATION" AND
"THE MERGER--OTHER TERMS AND CONDITIONS"; AND "THE MERGER--ADDITIONAL
AGREEMENTS".

OTHER TERMS AND CONDITIONS

The Merger Agreement contains a number of terms, conditions,
representations and covenants which must be satisfied as of the Effective Time,
including, but not limited to, the following:

(i) Receipt of required regulatory approvals or waivers from the
FDIC, Federal Reserve, the Commissioner and any other
applicable regulatory agency, and the expiration of any
applicable waiting periods with respect thereto. SEE "THE
MERGER--GOVERNMENT APPROVALS";

(ii) The Closing will not violate any injunction, order or decree
of any court or governmental body having competent
jurisdiction;

(iii) The Pricing Average shall not decrease below $21.25 per share
or rise above $33.75 per share;

(iv) The approval of the Merger by the holders of a majority of the
United Common Stock entitled to vote at the Meeting;

(v) The Registration Statement for Victoria Common Stock to be
issued in the Merger shall be effective under the Securities
Act and any applicable state securities or blue sky laws, no
stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceeding for such
purpose, or any proceedings under the Commission or applicable
state securities authorities rules with respect to the
transactions contemplated hereby, shall be pending or
threatened by the Commission or any applicable state
securities or blue sky authorities;

(vi) The continued accuracy of the representations and warranties
made by the parties in the Merger Agreement;

(vii) The performance of and compliance with the respective
obligations and covenants undertaken by the parties in the
Merger Agreement;

(viii) There shall not have occurred any change in the financial or
business condition, prospects, operations or results of
operations or net worth of the parties in the Merger Agreement
(and RB&T and VB&T, respectfully) which would constitute a
Material Adverse Effect (as defined in Section 11.13(b) of the
Merger Agreement);

(ix) Victoria shall have received resignations of United's and
RB&T's directors, and an instrument dated the Effective Time
releasing United and RB&T from claims of their directors,
except with respect to (i) accrued compensation, (ii) rights
of indemnification pursuant to the articles of

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<PAGE> 30

incorporation or association or bylaws of United or RB&T,
respectively and (iii) any indebtedness or contractual
obligation or liability such as their deposits and accounts;

(x) Victoria shall have received an instrument dated the Effective
Time releasing United and RB&T from claims of its officers,
except with respect to (i) accrued compensation, (ii) rights
of indemnification pursuant to the articles of incorporation
or association or bylaws of United or RB&T, respectively and
(iii) any indebtedness or contractual obligation or liability
such as their deposits and accounts;

(xi) Victoria shall have received the opinions of counsel to United
acceptable to it as to the following matters:

a) due organization, due qualification, valid existence
and good standing of United and RB&T under Texas law
and the BHC Act; Corporate power and authority of
United and RB&T to carry on their business and to
own, lease and operate their properties and assets;

b) power and authority of United to execute and deliver
the Merger Agreement and any other agreements
contemplated by the Merger Agreement (collectively,
the "Other Agreements") and to consummate the
transactions contemplated thereby; all acts
(corporate or otherwise) and other proceedings
required to be taken by United to execute and deliver
the Merger Agreement and the Other Agreements and to
consummate the transactions contemplated therein have
been duly and validly taken; and the Merger Agreement
and the Other Agreements have been duly executed and
delivered by, and constitute the valid and binding
obligations of United enforceable against United in
accordance with their terms, subject to the effect of
(a) any applicable bankruptcy or other similar laws
relating to creditors' rights generally and (b)
general principles of equity;

c) the number of shares of authorized capital stock of
United, and the number of such shares that are issued
and outstanding or held in treasury; United is the
record holder of all of the issued and outstanding
capital stock of RB&T; all of the outstanding shares
of United Common Stock and all of the shares of
capital stock of RB&T are validly issued, fully paid
and nonassessable; and to the best knowledge of
United's counsel, none of such stock was issued in
violation of the preemptive rights of any person;

d) outstanding agreements or commitments obligating
United or RB&T to issue any shares of, restricting
the transfer of, or otherwise relating to shares of
their respective capital stock of any class;

e) violations of or defaults resulting from execution,
delivery and consummation of the transactions
contemplated by the Merger Agreement under (a) the
articles of incorporation or association or bylaws of
United or RB&T, (b) to the best knowledge of United's
counsel, any agreement, contract, judgment or order
to which United or RB&T is a party, and (c) to the
best knowledge of United's counsel, any law,
regulation, rule, administrative regulation or
decree of any court or any governmental agency or
body whether domestic or foreign applicable to
United or RB&T;

f) consents, approvals, authorizations, actions or
filings with any court, governmental agency or public
body required in connection with the execution,
delivery and performance by United of the Merger
Agreement;

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<PAGE> 31

g) Proceedings (as defined in the Merger Agreement)
threatened against or affecting United or RB&T;

h) material default under any law or regulation, or
under any order of any court, commission, board,
bureau, agency or instrumentality wherever located by
United or RB&T; and

i) consummation of the transactions contemplated by the
Merger Agreement and the legal consequences thereof
specified in Article 5.06 of the TBCA;

(xii) The holders of no more than seven percent (7%) of the
outstanding shares of United Common Stock shall have taken all
steps necessary as of the Effective Time to perfect their
dissent from the Merger;

(xiii) Victoria shall have received a letter from Grant Thornton
dated as of the Effective Time, stating that, in accordance
with generally accepted accounting principles, United is a
poolable entity;

(xiv) There shall be no outstanding indebtedness of United;
(xv) Certain loans in the aggregate amount of $44,235.75 VB&T
desires to exclude from its loan portfolio shall no longer be
owned by RB&T;
(xvi) All of the outstanding United Series A Preferred Stock and
United Series B Preferred Stock shall have been redeemed;

(xvii) United and RB&T shall have discontinued their mortgage
warehousing operations, and shall have sold or otherwise
disposed of any existing mortgage warehouse loans;

(xviii) Victoria shall have received from holders of United's Common
Stock receiving at least 50% of the total Merger Consideration
a representation that they have no plan or intention to sell
or otherwise dispose of shares of Victoria Common Stock
received pursuant to the Merger; Victoria has received such
representations from the six shareholders who have executed
the Voting Agreements and Proxies;

(xix) United shall have delivered to Victoria a schedule of all
transactions in the capital stock (or instruments exercisable
for or convertible into capital stock) of United of which it
has knowledge from and including the date of the Merger
Agreement through the Effective Time;

(xx) Victoria shall have determined in its sole judgment that
certain liabilities and obligations do not have a Material
Adverse Effect (as defined in Section 11.13(b) of the Merger
Agreement);

(xxi) VB&T shall have received certificates of certain officers of
United as to the items in (vi)-(viii), (xii) and (xiv)-(xvii);

(xxii) United shall have received certificates of Victoria and VB&T
as to the items in (vi) and (vii);

(xxiii) United shall have received an opinion of counsel to Victoria
acceptable to it as to the following matters:

a) due organization, due qualification, valid existence
and good standing of Victoria under Texas law and the
BHC Act; Corporate power and authority of Victoria to
carry on its business and to own, lease and operate
its properties and assets;

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<PAGE> 32

b) power and authority of Victoria to execute and
deliver the Merger Agreement and to consummate the
transactions contemplated thereby; all acts
(corporate or otherwise) and other proceedings
required to be taken by Victoria to execute and
deliver the Merger Agreement and to consummate the
transactions contemplated therein have been duly and
validly taken; and the Merger Agreement has been duly
executed and delivered by, and constitutes the valid
and binding obligation of Victoria enforceable
against Victoria in accordance with its terms,
subject to the effect of (a) any applicable
bankruptcy or other similar laws relating to
creditors' rights generally and (b) general
principles or equity;

c) the shares of Victoria Common Stock to be issued
pursuant to the Merger Agreement are validly issued,
fully paid and nonassessable; to the best knowledge
of Victoria's counsel, the shares of Victoria Common
Stock issued pursuant to the Merger Agreement are not
subject to any agreements or understandings with
respect to the voting or transfer of such shares, and
have not been issued in violation of the preemptive
rights of any person;

d) violations of or defaults resulting from execution,
delivery and consummation of the transactions
contemplated by the Merger Agreement under (a) the
articles of incorporation or bylaws of Victoria, (b)
to the best knowledge of Victoria's counsel, any
agreement, contract, judgment or order to which
Victoria is a party, and (c) to the best knowledge of
Victoria's counsel, any law, regulation, rule,
administrative regulation or decree of any court or
any governmental agency or body applicable to
Victoria;

e) consents, approvals, authorizations, actions or
filings with any court, governmental agency or public
body required in connection with the execution,
delivery and performance by Victoria of the Merger
Agreement;

f) to the best knowledge of Victoria's counsel,
violations of or defaults under the Articles of
Incorporation or Bylaws of Victoria or any agreement,
document or instrument under which Victoria is
obligated or bound, or any law, order, judgment, or
regulation applicable to Victoria or any of its
Subsidiaries (as defined in the Merger Agreement),
the violation of which could have a material adverse
effect on Victoria and its Subsidiaries taken as a
whole; and

g) registration of the shares of Victoria Common Stock
to be issued pursuant to the Merger Agreement under
the Securities Act.

(xxiv) United and RB&T shall deliver to the directors of United and
RB&T an instrument dated the Effective Time releasing such
directors from claims of United and RB&T, except with respect
to (i) any action arising from intentional fraud, deceit or
willful misconduct, or (ii) obligations or liabilities to
United or RB&T in connection with any indebtedness or any
contractual obligation or liability;

(xxv) The shares of Victoria Common Stock to be delivered to
shareholders of United under the Merger Agreement shall have
been authorized for listing on the Nasdaq National Market;

(xxvi) United shall have received all regulatory approvals necessary
to redeem its preferred stock and repay its indebtedness;

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<PAGE> 33

(xxvii) United shall have received an opinion, dated as of the
Effective Time, of counsel to United that, for federal income
tax purposes, the Merger, will, among other things, constitute
a reorganization within the meaning of Section 368(a)(1)(A) of
the Internal Revenue Code.

Any condition to the consummation of the Merger, except the required
shareholder and regulatory approvals, may be waived in writing by the party to
the Merger Agreement entitled to the benefit of such condition. SEE APPENDIX
I.

ADDITIONAL AGREEMENTS

VB&T and Mr. Neuenschwander, the Chairman of the Board and President
of both United and RB&T, have entered into a Consulting Agreement dated as of
January 12, 1995, whereby Mr. Neuenschwander will act as a general business
consultant and advisor to VB&T for a period of three years beginning at the
Effective Time. VB&T entered into the Consulting Agreement because it values
the knowledge, management expertise and other skills of Mr. Neuenschwander with
regard to the present and future assets, customers and business of the main
office and branches of RB&T, which will become branches of VB&T following
consummation of the Merger and the merger of RB&T with and into VB&T. In
addition to being reimbursed for reasonable and customary expenses incurred in
providing consulting services to VB&T, Mr. Neuenschwander will receive
$294,000 as compensation for services rendered under the Consulting Agreement
with such sum to be paid in equal monthly installments during the three-year
term of the Consulting Agreement. Mr. Neuenschwander may also participate in
all medical and health insurance plans generally provided by VB&T to its
employees. Pursuant to the Consulting Agreement, VB&T will provide Mr.
Neuenschwander with an office in the main office of RB&T which, after the
consummation Merger and the subsequent merger of RB&T into VB&T, will be a
branch of VB&T.

Pursuant to the Merger Agreement, United has agreed to use its best
efforts to cause each of the directors, executive officers and principal
shareholders of United to enter into a Pooling Transfer Restrictions Agreement
with Victoria and United pursuant to which they have agreed, among other
things, (i) not to transfer any of their respective shares of United Common
Stock, United Series A Preferred Stock or United Series B Preferred Stock
within thirty days prior to the Effective Time, (ii) not to transfer any shares
of Victoria Common Stock acquired by them in the Merger until the publication
of financial results covering at least thirty days of post-Merger combined
operations of United and Victoria, except for shareholder pledges to secure
loans, provided the lender agrees to be bound by the terms of the Pooling
Transfer Restrictions Agreement and (iii) not otherwise to transfer such
Victoria Common Stock in a manner which is inconsistent with Victoria's
accounting for the Merger using the pooling of interests method of accounting.
Pursuant to the Voting Agreements and Proxies, six holders of United
Common Stock have agreed to vote their shares of United Common Stock in favor
of the Merger at the Meeting. As part of the Voting Agreements and Proxies,
the six United shareholders granted to Victoria a proxy with respect to such
shares for the purpose of voting such shares in favor of the Merger in the
event such United shareholders do not vote in favor of the Merger. Because
these six shareholders have the power to vote 116,525 shares, or 49.42%, of the
issued and outstanding United Common Stock, the vote of only 1,379 shares, or
0.58%, of the remaining issued and outstanding United Common Stock will be
required to assure approval of the Merger by the holders of United Common
Stock. SEE "INTRODUCTION"; "SUMMARY--SHAREHOLDER VOTES REQUIRED"; "THE
MEETING--PRINCIPAL SHAREHOLDERS"; "THE MERGER--GENERAL"; AND "INFORMATION ABOUT
UNITED--MANAGEMENT AND PRINCIPAL SHAREHOLDERS".

BUSINESS PENDING EFFECTIVE TIME

The Merger Agreement imposes certain limitations on the conduct of
United's and RB&T's businesses pending consummation of the Merger. Among other
things, United must conduct, and use its best efforts to cause RB&T to conduct,
their businesses only in the ordinary course, consistent with prudent banking
practices. In

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<PAGE> 34

addition, the Merger Agreement requires United to (i) divest itself of certain
loans that VB&T desires to exclude from its loan portfolio, (ii) redeem all of
its outstanding United Series A Preferred Stock and United Series B Preferred
Stock, (iii) discontinue its mortgage warehousing operations and (iv) attempt to
sell a parcel of real estate at a price of $372,000 or greater in order to
increase the Merger Consideration payable to United's shareholders. In the
event that the Merger is not consummated, United will retain the loans that it
would have divested pursuant to the Merger Agreement and will not redeem its
United Series A Preferred Stock and United Series B Preferred Stock. United has
already begun to wind down its mortgage warehousing operations, which will
completely run off by the end of May 1995. United does not plan to engage in
this activity again even if the Merger is not consummated. Whether or not the
Merger is consummated, United will continue to seek a reasonable price for the
parcel of real estate that it is attempting to sell. SEE "THE MERGER--OTHER
TERMS AND CONDITIONS"; "INFORMATION ABOUT UNITED--MARKET PRICE AND DIVIDENDS";
"INFORMATION ABOUT UNITED-- MANAGEMENT AND PRINCIPAL SHAREHOLDERS"; "INFORMATION
ABOUT UNITED--CERTAIN TRANSACTIONS"; AND APPENDIX I.

AMENDMENT; TERMINATION

The Merger Agreement may be amended or supplemented at any time,
before or after the Meeting, by an instrument in writing duly executed by both
parties to the Merger Agreement. However, no change which reduces the Merger
Consideration or which materially and adversely affects the rights of United
shareholders can be made after the Meeting without the required approval of
United shareholders.

The Merger Agreement may be terminated and the Merger abandoned,
notwithstanding approval by United shareholders, at any time before the
Effective Time by:

(i) mutual written consent duly authorized by the Boards of
Directors of Victoria and United;

(ii) Victoria (a) if Victoria learns or becomes aware of a state of
facts or breach or inaccuracy of any representation or
warranty of United in Article III of the Merger Agreement
which constitutes a Material Adverse Effect (as defined in the
Merger Agreement), (b) due to certain unacceptable
environmental circumstances pursuant to Section 7.9 of the
Merger Agreement, (c) if the Board of Directors of United does
not recommend that the shareholders of United vote in favor of
the approval and adoption of the Merger Agreement, or
(d) if any of the conditions to Closing contained in Section
8.1 or 8.2 of the Merger Agreement are not satisfied or waived
in writing by Victoria;

(iii) United if any of its conditions to Closing contained in
Section 8.1 or 8.3 of the Merger Agreement are not satisfied
or waived in writing by United;

(iv) Victoria or United if the Effective Time shall not have
occurred on or before the expiration of nine months from the
date of the Merger Agreement (September 12, 1995), or such
later date agreed to in writing by Victoria and United; or

(v) Victoria or United if any court of competent jurisdiction in
the United States or other United States (federal or state)
governmental body shall have issued an order, decree or ruling
or taken any other action restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or other
action is final and nonappealable.

SEE "SUMMARY--CONDITIONS TO CONSUMMATION; REGULATORY APPROVALS; TERMINATION";
"THE MERGER--GENERAL"; "THE MERGER--OTHER TERMS AND CONDITIONS"; AND APPENDIX
I.

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<PAGE> 35

Upon termination of the Merger Agreement, the Merger Agreement shall
be void and have no effect, without any liability on the part of any party or
its directors, officers or shareholders, except that the parties are not
relieved of liability for any breach of the Merger Agreement.

EXCHANGE OF SHARES

As soon as practicable after the Effective Time, VB&T, as exchange
agent ("Exchange Agent"), under an Exchange Agent Agreement to be entered into
between Victoria, United and VB&T providing for the exchange of United Common
Stock for Victoria Common Stock ("Exchange Agent Agreement"), will furnish each
holder of record of United Common Stock as of the Effective Time with
transmittal materials for use in exchanging certificates representing United
Common Stock for certificates representing Victoria Common Stock in accordance
with the Exchange Agent Agreement. The transmittal materials will contain
information and instructions with respect to the procedure for exchanging such
certificates. The certificates for Victoria Common Stock will be delivered to
the persons entitled thereto within a reasonable time after delivery of United
Common Stock certificates for exchange accompanied by the appropriate
transmittal materials.

Under the terms of the Merger Agreement, Victoria will not issue
certificates representing fractional shares of Victoria Common Stock, and in
lieu thereof, shall pay cash to any holder of United Common Stock otherwise
entitled to receive such fractional share. Such cash payment shall be based on
the Pricing Average, which is the average closing price for Victoria Common
Stock as reported by the Nasdaq National Market over a ten (10) trading day
period ending on the last day of the month ending before the consummation of
the Merger. SEE "SUMMARY--FEDERAL INCOME TAX CONSEQUENCES"; "THE
MERGER--FEDERAL INCOME TAX CONSEQUENCES"; AND APPENDIX I.

Persons who are entitled to receive Victoria Common Stock pursuant to
the Merger will not be entitled to vote such Victoria Common Stock or to
receive any dividends thereon until they have properly surrendered their United
Common Stock certificates in exchange for Victoria Common Stock.

APPRAISAL RIGHTS

The following summary is a materially complete statement of the
statutory dissenters' rights of appraisal, and such summary is qualified by
reference to the applicable provisions of the TBCA, which are reproduced in
full in Appendix II to this Proxy Statement/Prospectus. A SHAREHOLDER MUST
FOLLOW THE EXACT PROCEDURE REQUIRED BY THE TBCA IN ORDER TO PROPERLY EXERCISE
DISSENTER'S RIGHTS OF APPRAISAL AND AVOID WAIVER OF THOSE RIGHTS.

Holders of United Common Stock have a statutory right to dissent from
the Merger, by following the specific procedures set forth below. If the
Merger is approved and consummated, any holder of United Common Stock who
properly perfects dissenters' rights will be entitled to receive an amount of
cash equal to the fair value of all (but not less than all) his shares of
United Common Stock rather than being required to accept the consideration
therefor provided in the Merger Agreement. Thus, any holder of United Common
Stock who exercises the statutory dissenters' rights of appraisal will not have
any ownership interest in Victoria.

Any holder of United Common Stock who desires to dissent from the
Merger must file a written objection to the Merger with the Secretary of
United, Ms. Kathy Norris, 2214 Avenue H, Rosenberg, Texas 77471, prior to the
Meeting at which a vote on the Merger shall be taken. The written notice must
state that the shareholder will exercise his right to dissent if the Merger is
consummated and give the shareholder's address to which notice of effectiveness
of the Merger shall be sent. A vote against the Merger is not sufficient to
perfect a shareholder's statutory right to dissent from the Merger. If the
Merger is consummated, each shareholder who sent notice to United as described
above and who did not vote in favor of the Merger will be deemed to have
dissented from the Merger ("Dissenting Shareholder"). FAILURE TO VOTE AGAINST
THE MERGER WILL NOT CONSTITUTE A WAIVER OF THE DISSENTERS' RIGHTS OF APPRAISAL;
ON THE OTHER HAND, A VOTE IN FAVOR OF THE MERGER WILL CONSTITUTE SUCH A WAIVER.

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Victoria will be liable for any payments to Dissenting Shareholders
and shall, within ten (10) days of the Effective Time, notify the Dissenting
Shareholders in writing that the Merger has been effected. Each Dissenting
Shareholder so notified must, within ten (10) days of the delivery or mailing
of such notice, make a written demand on Victoria at One O'Connor Plaza,
Victoria, Texas 77902, Attention: Mr. Gregory Sprawka, for payment of the fair
value of the Dissenting Shareholder's shares as estimated by the Dissenting
Shareholder. Failure to follow this procedure will constitute a waiver of
dissenter's rights of appraisal by such Dissenting Shareholder. The demand
shall state the number and class of the shares owned by the Dissenting
Shareholder and the fair value of the shares as estimated by the Dissenting
Shareholder. The fair value of the shares shall be the value thereof as of the
date immediately preceding the Meeting, excluding any appreciation or
depreciation in anticipation of the Merger. Dissenting Shareholders who fail
to make a written demand within the ten (10) day period will be bound by the
Merger and lose their rights to dissent. Within twenty (20) days after making
a demand, the Dissenting Shareholder must submit certificates representing
shares of United Common Stock to Victoria for notation thereon that such demand
has been made. Dissenting Shareholders who have made a demand for payment of
their shares shall not thereafter be entitled to vote or exercise any other
rights of a shareholder except the right to receive payment for their shares
pursuant to the provisions of the TBCA and the right to maintain an appropriate
action to obtain relief on the basis of fraud.

Within twenty (20) days after receipt of a Dissenting Shareholder's
demand letter as described above, Victoria shall deliver or mail to the
Dissenting Shareholder written notice (i) stating that Victoria accepts the
amount claimed in the demand letter and agrees to pay that amount, within
ninety (90) days after the Effective Time, upon surrender of the relevant
certificates of United Common Stock duly endorsed by the Dissenting
Shareholder, or (ii) containing Victoria's written estimate of the fair value
of the shares of United Common Stock together with an offer to pay such amount
within ninety (90) days after the Effective Time, if Victoria receives notice,
within sixty (60) days after the Effective Time, stating that the Dissenting
Shareholder agrees to accept that amount and upon surrender of the relevant
certificates of United Common Stock duly endorsed by the Dissenting
Shareholder. In either case, the Dissenting Shareholder shall cease to have
any ownership interest in United or Victoria following payment of the agreed
value.

If the Dissenting Shareholder and Victoria cannot agree on the fair
value of the shares within sixty (60) days after the Effective Time, the
Dissenting Shareholder or Victoria may, within sixty (60) days of the
expiration of the initial sixty (60) day period, file a petition ("Petition")
in any court of competent jurisdiction in Victoria County, Texas requesting a
finding and determination of the fair value of the Dissenting Shareholder's
shares. Whether Victoria would file a Petition would depend on the facts and
circumstances surrounding the negotiations with the Dissenting Shareholder. If
Victoria decided not to file a Petition, the Dissenting Shareholder must be
prepared to do so to avoid waiver of his dissenter's right of appraisal. Each
Dissenting Shareholder, however, is not required to file a separate Petition.
If one Dissenting Shareholder files a Petition, Victoria must file, with the
clerk of the court in which the Petition was filed, a list containing the names
and addresses with whom agreements as to the value of their shares have not
been reached. The Court will give notice of the time and place of the hearing
on the Petition to the Dissenting Shareholders named on the list. Dissenting
Shareholders so notified by the court will be bound by the final judgment of
the court regarding fair value of the shares. If no petition is filed
within the appropriate time period, then all Dissenting Shareholders who
have not reached an agreement with Victoria on the value of their shares shall
be bound by the Merger and lose their rights to dissent.

After a hearing concerning the Petition, the court shall determine
which Dissenting Shareholders have complied with the provisions of the TBCA and
have become entitled to the valuation of, and payment for, their shares, and
shall appoint one or more qualified appraisers to determine the value of the
shares of United Common Stock in question. In determining the fair value of
the United Common Stock, an appraiser will have the power to examine any of the
books and records of United and to conduct such investigation as seems proper
to the appraiser. The appraiser will also afford the Dissenting Shareholders
and Victoria a reasonable opportunity to submit pertinent evidence as to the
value of the United Common Stock. In addition the appraiser shall also have
such power and authority as may be conferred on Masters in Chancery by the
Texas Rules of Civil Procedure or

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by the court order appointing the appraiser. After determining the fair value,
the appraiser shall file a report with the court. The court shall then in its
judgment determine the fair value of the shares of United Common Stock, which
judgment shall be binding on Victoria and all Dissenting Shareholders receiving
notice of the hearing. This value may be more than, less than or equal to what
is received by non-dissenting Shareholders. The court shall direct Victoria to
pay such amount, together with interest thereon to the date of judgment, to the
Dissenting Shareholders entitled thereto. The judgment shall be payable upon
the surrender to Victoria of certificates representing shares of United Common
Stock duly endorsed by the Dissenting Shareholder. Upon payment of the
judgment, the Dissenting Shareholders shall cease to have any interest in
Victoria or United. All court costs shall be allotted between the Dissenting
Shareholders and Victoria in the manner that the court determines to be fair and
equitable.

Any Dissenting Shareholder who has made a written demand on Victoria
for payment of the fair value of his United Common Stock may withdraw such
demand at any time before payment for his shares has been made or before a
petition has been filed with an appropriate court for determination of the fair
value of such shares. If a Dissenting Shareholder withdraws his demand, or if
he is otherwise unsuccessful in asserting his dissenters' rights of appraisal,
such Dissenting Shareholder shall be bound by the Merger and his status as a
former shareholder of United shall be restored without prejudice to any
corporate proceedings, dividends, or distributions which may have occurred
during the interim.

In the absence of fraud in the transaction, a Dissenting Shareholder's
statutory right of appraisal is the exclusive remedy for the recovery of the
value of his shares or money damages to the shareholder with respect to the
Merger.

United shareholders wishing to exercise their rights as dissenters
should file their objections with Ms. Kathy Norris, Secretary, United
Bancshares, Inc., 2214 Avenue H, Rosenberg, Texas 77471. SEE
"SUMMARY--DISSENTERS' RIGHTS"; "COMPARISON OF RIGHTS OF SHAREHOLDERS OF UNITED
AND VICTORIA--APPRAISAL RIGHTS"; AND APPENDIX II.

FEDERAL INCOME TAX CONSEQUENCES

Set forth below is a summary of the opinion provided by Bracewell &
Patterson, L.L.P. concerning certain federal income tax consequences to holders
of United Common Stock who dispose of their United Common Stock in the Merger.
This discussion is primarily based on the Code and the Treasury Regulations
promulgated thereunder.

EACH UNITED SHAREHOLDER IS ADVISED TO CONSULT WITH HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OF THE MERGER, INCLUDING THE
APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN INCOME OR OTHER TAX LAWS.

The following discussion is limited to the material federal income tax
aspects of the Merger to a holder of United Common Stock who is a citizen or
resident of the United States and who, on the date of disposition of his shares
of United Common Stock, holds such shares as a capital asset. This discussion
does not purport to deal with all aspects of taxation that may be relevant to
particular investors in light of their personal investment circumstances, or to
certain types of investors, including insurance companies, tax-exempt
organizations, financial institutions, broker- dealers, "S" corporations,
limited liability corporations, foreign corporations, and taxpayers subject to
alternative minimum tax. Further, this discussion does not consider the state,
local, or foreign tax consequences of the Merger to a holder of United Common
Stock.

United has been advised by its special counsel, Bracewell & Patterson,
L.L.P., that based on the Code, judicial decisions, and certain factual
assumptions, the Merger will qualify as a "reorganization" within the meaning

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of Section 368(a)(1)(A) of the Code. The following is a summary of the federal
income tax consequences set forth in the legal opinion delivered by Bracewell &
Patterson, L.L.P., a copy of which is included as an exhibit to the
Registration Statement filed by Victoria. That opinion and the summary thereof
address the material federal income tax aspects of the Merger, as noted above.
In rendering this opinion, Bracewell & Patterson, L.L.P. has assumed, among
other matters, that no shareholder of United receiving Victoria Common Stock in
the Merger has the intention, at the time of the Merger, of disposing of any
Victoria Common Stock received or requesting registration of any shares except
as permitted under the Merger Agreement or the agreement executed by the
affiliates of United in favor of Victoria. In making these assumptions,
Bracewell & Patterson, L.L.P. has relied on certain representations made by the
managements of both Victoria and United. SEE "RESALE OF VICTORIA COMMON
STOCK".

The Merger qualifies for federal income tax purposes as a
"reorganization" within the meaning of Section 368(a)(1)(A) of the Code, and,
as such, will result in the following federal income tax consequences to
holders of United Common Stock:

1. No gain or loss will be realized by holders of United Common
Stock to the extent their shares of United Common Stock are
converted into shares of Victoria Common Stock pursuant to
the terms of the Merger.

2. The basis of Victoria Common Stock received by each United
shareholder in the Merger will be the same as the basis of the
United Common Stock surrendered and exchanged therefor,
decreased by the amount of cash received and increased by the
amount of gain realized by the shareholder under the exchange.

3. The holding period of Victoria Common Stock received by each
United shareholder will include the period during which United
Common Stock surrendered therefor was held, provided the
United Common Stock is a capital asset in the hands of the
United shareholder on the date of the exchange. The payment
of cash in lieu of fractional shares of Victoria Common Stock
will be treated as a sale or exchange of such fractional
shares eligible for capital gains treatment.

4. Dissenting Shareholders whose shares of United Common Stock
are disposed of pursuant to the exercise of appraisal rights
will realize gain or loss equal to the difference between the
amount of cash received from the exercise of such dissenters
rights and such Dissenting Shareholder's aggregate adjusted
tax basis in the stock exchanged.

5. Unless an exemption applies, under the backup withholding
rules of Section 3406 of the Code, an exchange agent (such as
VB&T) shall be required to withhold, and will withhold, 31% of
all cash payments to which a United shareholder is entitled
pursuant to the Merger (unless such shareholder provides his
taxpayer identification number--social security number in the
case of an individual, or Employer Identification Number in
other cases) and certifies that such number is correct. Each
United shareholder should complete and sign Treasury Form W-9
included as part of the letter of transmittal (to be provided
after the Merger becomes effective) so as to provide the
information and certification necessary to avoid backup
withholding, unless an applicable exemption exists and is
provided in a manner satisfactory to the exchange agent in
connection with the Merger.

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Neither the foregoing discussion nor the opinion of Bracewell & Patterson,
L.L.P. to United is binding on the Internal Revenue Service ("IRS") or the
courts. SEE "SUMMARY--FEDERAL INCOME TAX CONSEQUENCES".
Certain legislative tax proposals are currently being considered by
Congress, as more specifically set out in the House of Representatives'
Republican members' "Contract with America". It is uncertain whether any such
proposals will be enacted, and if enacted, whether such proposals will be in a
form that affects the federal income tax consequences of the Merger to the
United shareholders.
GOVERNMENT APPROVALS

The Merger is subject to, and conditioned upon, receipt of approvals
or waivers from the Commissioner, the Federal Reserve and the FDIC. Merger
applications to the FDIC and the Commissioner have been submitted for the
merger of RB&T into VB&T, and approvals are expected to be issued in a timely
manner. Concurrently, a waiver request to acquire United has been filed by
Victoria with the Federal Reserve. The Merger may not be consummated for a
period of at least 15 days after waiver by the Federal Reserve and FDIC
approval, during which time the Justice Department may object to the Merger on
antitrust grounds, which action would stay the approval of the transaction
unless otherwise ordered by the appropriate judicial authority. Neither
Victoria nor United have any reason to believe that the Justice Department will
take any action to stay the approval of the Merger. SEE "SUMMARY--CONDITIONS
TO CONSUMMATION; REGULATORY APPROVALS; TERMINATION"; "THE MERGER--OTHER TERMS
AND CONDITIONS" AND "SUPERVISION AND REGULATION".

ACCOUNTING TREATMENT

Victoria expects to account for the Merger using the
"pooling-of-interests" method of accounting. Victoria will receive a letter
from Grant Thornton, dated as of the Effective Time to the effect that, in
accordance with generally accepted accounting principles, United is a poolable
entity. Under this accounting method, at the Effective Time, Victoria's and
United's assets and liabilities will be added together at their recorded book
values and presented on a combined basis in Victoria's consolidated balance
sheet. Earnings and cash flows will include amounts from both Victoria and
United for the entire year in which the merger occurs. Financial statements of
Victoria issued after consummation of the Merger will be restated retroactively
to reflect the consolidated operations, financial position and cash flows of
Victoria and United as if the Merger had taken place prior to the periods
covered by such financial statements. SEE "SUMMARY--ACCOUNTING TREATMENT";
"SELECTED FINANCIAL DATA"; AND "THE MERGER--OTHER TERMS AND CONDITIONS".

SUPERVISION AND REGULATION

GENERAL

In addition to the generally applicable state and federal laws
governing businesses and employers, Victoria and United (hereinafter sometimes
referred to collectively as the "Companies") and VB&T and RB&T (hereinafter
sometimes referred to collectively as the "Banks") are further extensively
regulated by special federal and state laws and regulations specifically
applicable to financial institutions and their parent companies. Virtually all
aspects of the Companies' and Banks' operations are subject to specific
requirements or restrictions and general regulatory oversight, from laws
regulating consumer finance transactions, such as the Truth in Lending Act, the
Home Mortgage Disclosure Act and the Equal Credit Opportunity Act, to laws
regulating collections and confidentiality, such as the Fair Debt Collection
Practices Act, the Fair Credit Reporting Act and the Right to Financial Privacy
Act. With few exceptions, state and federal banking laws also have as their
principal objective either the maintenance of the safety and soundness of
financial institutions and the federal deposit insurance system or the
protection of consumers or classes of consumers, rather than the specific
protection of stockholders of the

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Companies and the Banks. The following discussion sets forth certain material
statutory and regulatory provisions governing the Companies and the Banks.

REGULATION OF THE COMPANIES

The Companies are bank holding companies within the meaning of the BHC
Act, and therefore are subject to regulation and supervision by the Federal
Reserve. As such, the Companies are required to file reports with and to
furnish such other information as the Federal Reserve may require pursuant to
the BHC Act, and the Companies and their affiliates are subject to examination
by the Federal Reserve. The Federal Reserve has the authority to issue orders
to bank holding companies to cease and desist from unsound banking practices
and violations of conditions imposed by, or violations of agreements with, the
Federal Reserve. The Federal Reserve is also empowered to assess civil
monetary penalties against companies or individuals who violate the BHC Act or
orders or regulations thereunder, to order termination of non-banking
activities of non-banking subsidiaries of bank holding companies, and to order
termination of ownership and control of a non-banking subsidiary by a bank
holding company. Certain violations may also result in criminal penalties.

Safe and Sound Banking Practices

The Federal Reserve takes the position that a bank holding company is
required to serve as a source of financial and managerial strength to its
subsidiary banks and may not conduct its operations in an unsafe or unsound
manner. In addition, it is the Federal Reserve's position that, in serving as
a source of strength to its subsidiary banks, a bank holding company should
stand ready to use available resources to provide adequate capital funds to its
subsidiary banks during periods of financial stress or adversity and should
maintain the financial flexibility and capital-raising capacity to obtain
additional resources for assisting its subsidiary banks. A bank holding
company's failure to meet its obligations to serve as a source of strength to
its subsidiary banks will generally be considered by the Federal Reserve to be
an unsafe and unsound banking practice or a violation of the Federal Reserve
regulations or both. This doctrine has become known as the "source of
strength" doctrine. In addition, the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA") amendments to the Federal Deposit Insurance
Act ("FDIA") require the holding company parent of an undercapitalized bank to
guarantee, up to certain limits, the bank's compliance with a capital
restoration plan approved by the bank's primary federal supervisory agency.

Bank holding companies are not permitted to engage in unsafe and
unsound banking practices. For example, the Federal Reserve's Regulation Y
generally requires a holding company to give the Federal Reserve prior notice of
any redemption or repurchase of its own equity securities, if the consideration
to be paid, together with the consideration paid for any repurchases or
redemptions in the preceding year, is equal to 10% or more of the company's
consolidated net worth. Certain exemptions from the notice requirements exist
for well capitalized bank holding companies. The Federal Reserve may oppose the
transaction if it believes that the transaction would constitute an unsafe or
unsound practice or would violate any law or regulation. As another example, a
holding company could not impair its subsidiary bank's soundness by causing it
to make funds available to nonbanking subsidiaries or their customers if the
Federal Reserve believed it not prudent to do so.

The Financial Institutions Reform, Recovery and Enforcement Act of
1989 ("FIRREA") expanded the Federal Reserve's authority to prohibit activities
of bank holding companies and their nonbanking subsidiaries which represent
unsafe and unsound banking practices or which constitute violations of laws or
regulations. Notably, FIRREA increased the amount of civil money penalties
which the Federal Reserve can assess for certain activities conducted on a
knowing and reckless basis, if those activities caused a substantial loss to a
depository institution. The penalties can be as large as $1,000,000 for each
day the activity continues. FIRREA also expanded the scope of the individuals
and entities against which such penalties may be assessed.

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Acquisitions of Bank Holding Companies and Banks

The BHC Act and the Change in Bank Control Act, together with
regulations promulgated by the Federal Reserve, require that, depending on the
particular circumstances, either Federal Reserve approval must be obtained or
notice must be furnished to the Federal Reserve and not disapproved prior to
any person or company acquiring "control" of a bank or bank holding company
subject to certain exemptions. Control is conclusively presumed to exist if an
individual or company acquires 25% or more of any class of voting securities of
the bank or bank holding company. Control is rebuttably presumed to exist if a
person acquires 10% or more but less than 25% of any class of voting securities
and either the company has registered securities under Section 12 of the
Securities Exchange Act of 1934, as amended, or no other person will own a
greater percentage of that class of voting securities immediately after the
transaction.

As bank holding companies, the Companies are required to obtain
approval prior to merging or consolidating with any other bank holding company,
acquiring all or substantially all of the assets of any bank or acquiring
ownership or control of shares of a bank or bank holding company if, after the
acquisition, the Companies would directly or indirectly own or control 5% or
more of the voting shares of such bank or bank holding company. In considering
any application for approval of an acquisition or merger, the Federal Reserve
is also required to consider the financial and managerial resources of the
companies and the banks concerned, as well as the applicant's record of
compliance with the Community Reinvestment Act (the "CRA").

Scope of Permissible Activities

The Companies are also prohibited from acquiring a direct or indirect
interest in or control of more than 5% of the voting shares of any company
which is not a bank or bank holding company and from engaging directly or
indirectly in activities other than those of banking, managing or controlling
banks or furnishing services to its subsidiary banks, except that they may
engage in and may own shares of companies engaged in certain activities found
by the Federal Reserve to be so closely related to banking or managing and
controlling banks as to be a proper incident thereto. These activities
include, among others, operating a mortgage, finance, credit card, or factoring
company; performing certain data processing operations; providing investment
and financial advice; acting as an insurance agent for certain types of
credit-related insurance; leasing personal property on a full-payout,
non-operating basis; and providing certain stock brokerage and investment
advisory services. In approving acquisitions or the addition of activities,
the Federal Reserve considers whether the acquisition or the additional
activities can reasonably be expected to produce benefits to the public, such
as greater convenience, increased competition, or gains in efficiency, that
outweigh such possible adverse effects as undue concentration of resources,
decreased or unfair competition, conflicts of interest or unsound banking
practices.

Capital Adequacy Requirements

The Federal Reserve monitors the capital adequacy of bank holding
companies. As discussed below, the Banks are also subject to the capital
adequacy requirements of the FDIC and the Texas Department of Banking. The
Federal Reserve uses a combination of risk-based guidelines and leverage ratios
to evaluate capital adequacy.

The Federal Reserve has adopted a system using risk-based capital
guidelines to evaluate the capital adequacy of bank holding companies. Under
the guidelines, specific 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. Certain off-balance sheet items, which previously
were not expressly considered in capital adequacy computations, are added to
the risk-weighted asset base by converting them to a balance sheet equivalent
and assigning to them the appropriate risk weight. In addition, the guidelines
define the capital components. Total capital is defined as the sum of "Tier 1"
and "Tier 2" capital elements, with "Tier 2" being limited to 100% of "Tier 1."
For bank holding companies, "Tier 1" capital includes, with certain
restrictions, common stockholders' equity, perpetual preferred stock and
minority interests in

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consolidated subsidiaries. "Tier 2" capital includes, with certain limitations,
certain forms of perpetual preferred stock, as well as maturing capital
instruments and the reserve for possible loan losses.

The guidelines require a minimum ratio of total
capital-to-risk-weighted assets of 8.0% (of which at least 4.0% is required to
consist of "Tier 1" capital elements). At December 31, 1994, Victoria's ratios
of "Tier 1" and total capital to risk-weighted assets were approximately 17.54%
and 18.69%, respectively. At December 31, 1994, United's ratios of "Tier 1"
and total capital to risk-weighted assets were approximately 16.02% and 16.52%,
respectively.

In addition to the risk-based capital guidelines, the Federal Reserve
uses a leverage ratio as an additional tool to evaluate the capital adequacy of
bank holding companies. The leverage ratio is defined as a company's "Tier 1"
capital divided by its average total consolidated assets. "Average total
consolidated assets" is defined as the quarterly average total assets (net of
the allowance for loan and lease losses) reported on a company's consolidated
financial statements less goodwill and any other intangible assets or
investments in subsidiaries that the Federal Reserve determines should be
deducted from Tier 1 capital. The leverage ratio requires a 3.0% "Tier 1"
capital to average total consolidated assets ratio for institutions with a
CAMEL rating of 1. All other institutions are expected to maintain a 100 to
200 basis point cushion (i.e., these institutions will be expected to maintain
a leverage ratio of 4.0% to 5.0%). At December 31, 1994, Victoria's leverage
ratio was 8.75% and United's leverage ratio was 6.73%.

REGULATION OF THE BANKS

Each of the Banks is a Texas-chartered banking association, the
deposits of which are insured by the Bank Insurance Fund of the FDIC. Neither
of the Banks is a member of the Federal Reserve System; therefore, the Banks
are subject to supervision and regulation by the FDIC and the Texas Department
of Banking. Such supervision and regulation subjects the Banks to special
restrictions, requirements and potential enforcement actions. Because the
Federal Reserve regulates the bank holding company parents of the Banks, the
Federal Reserve also has supervisory authority which directly affects the
Banks.

Permissible Activities

The Texas Constitution, as amended in 1986, provides that a
Texas-chartered bank has the same rights and privileges that are or may be
granted to national banks domiciled in Texas. To the extent that the Texas
laws and regulations may have allowed state-chartered banks to engage in a
boarder range of activities than national banks, FDICIA has operated to limit
this authority. FDICIA provides that no state bank or subsidiary thereof may
engage as principal in any activity not permitted for national banks, unless
the institution complies with applicable capital requirements and the FDIC
determines that the activity poses no significant risk to the insurance fund.
In general, statutory restrictions on the activities of banks are aimed at
protecting the safety and soundness of depository institutions.

In general, FDICIA prohibits state banks from directly or indirectly
acquiring or retaining any equity investment of a type, or in an amount, not
permitted for national banks. This prohibition does not apply to investments
in majority-owned subsidiaries; investments in qualified lower-income housing
projects; and other investments specifically delineated by the FDIC. Other
restrictions may apply to such investments. FDICIA requires the divestiture of
impermissible equity investments as quickly as is prudent, but no later than
December 19, 1996. Neither of the Banks presently hold any equity securities
which would be subject to divestiture under FDICIA.

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Branching

Texas law provides that a Texas-chartered bank can establish a branch
anywhere in Texas provided that the branch is approved in advance by the Texas
Department of Banking. The branch must also be approved by the FDIC, which
considers a number of factors, including financial history, capital adequacy,
earnings prospects, character of management, needs of the community and
consistency with corporate powers. The recently enacted Riegle-Neal Act
expands the authority of bank holding companies and banks to engage in
interstate bank acquisitions and interstate branching. Each state has the
option of "opting out" of the interstate branching (but not banking) scheme.
Interstate banking will be effective September 29, 1995, and interstate
branching will be effective June 1997, unless Texas "opts out." The Texas
Legislature is currently considering "opt-out" legislation.

FDICIA generally requires the Banks to notify the FDIC and branch
customers 90 days prior to a branch closing, including a detailed statement
regarding the reasons for the closing.

Restriction on Transactions with Affiliates and Insiders

FDIA makes certain Federal Reserve restrictions on transactions among
related parties applicable to the Banks even though each is a nonmember bank.
Further, Texas law provides that a state bank can make any loan allowed for a
national bank, which would also be subject to the Federal Reserve restrictions.
The first set of restrictions is found in Section 23A of the Federal Reserve
Act, which affects loans to and investments in affiliates of the Banks.
Section 23A imposes limits on the amount of such transactions, and also
requires certain levels of collateral for such loans. It also limits the
amount of advances to third parties which are collateralized by the securities
or obligations of Victoria or its subsidiaries.

Another set of restrictions is found in Section 23B of the Federal
Reserve Act. Among other things, Section 23B requires that certain
transactions between the Banks, including their subsidiaries, and their
affiliates must be on terms substantially the same, or at least as favorable to
the Banks or their subsidiaries, as those prevailing at the time for comparable
transactions with or involving other nonaffiliated persons. In the absence of
such comparable transactions, any transaction between the Banks and their
affiliates must be on terms and under circumstances, including credit
standards, that in good faith would be offered to or would apply to
nonaffiliated persons.

The restrictions on loans to directors, executive officers, principal
shareholders and their related interests (collectively referred to herein as
"insiders") contained in the Federal Reserve Act and Regulation O apply to all
insured institutions and their subsidiaries and holding companies. These
restrictions include limits on loans to specified insiders and conditions that
must be met before such a loan can be made. There is also an aggregate
limitation on all loans to insiders and their related interests. These loans
cannot exceed the institution's total unimpaired capital and surplus, and the
FDIC may determine that a lesser amount is appropriate.

Restrictions on Dividends

Dividends paid by VB&T have provided a substantial part of Victoria's
operating funds and it is anticipated that dividends paid by VB&T to Victoria
after consummation of the Merger will be Victoria's major source of operating
funds. Under Texas law, prior to the declaration of any dividend by any
state-chartered bank, it must transfer to "certified surplus" an amount not
less that 10% of its net profits earned since the last dividend was declared,
so long as certified surplus is less than the capital stock of such bank.
Under federal law, neither of the Banks can pay a dividend if it will cause the
Bank to be "undercapitalized". The amount of retained earnings available to
Victoria from its subsidiaries for payment of dividends without prior
regulatory approval was approximately $68,706,000 at December 31, 1994. SEE
"RISK FACTORS--DIVIDEND HISTORY AND DIVIDEND RESTRICTIONS".

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Examinations

The FDIC periodically examines and evaluates insured banks. Based
upon such an evaluation, the FDIC may revalue the assets of an insured
institution and require that it establish specific reserves to compensate for
the difference between the FDIC-determined value and the book value of such
assets. The Commissioner also conducts examinations annually, unless
additional examinations are deemed necessary to safeguard the interests of
shareholders, depositors and creditors. The Commissioner may accept the
results of a federal examination in lieu of conducting and independent
examination.

Audit Reports

Insured institutions with total assets of $500 million or more must
submit annual reports to federal and state regulators and make them available
to the public. In some instances, the annual report of the institution's
holding company can be used to satisfy this requirement. Auditors must receive
examination reports, supervisory agreements and reports of enforcement actions,
and must apply procedures agreed to by the FDIC to test compliance by the
institution or holding company with legal requirements designated by the FDIC.
The annual report must include financial statements prepared in accordance with
generally accepted accounting principles, statements and assertions by
management concerning their responsibility for the financial statements,
internal controls and compliance with legal requirements designated by the FDIC,
an auditor's report on the financial statements, and an attestation by the
auditor regarding the assertions of management with respect to financial
reporting internal controls. For institutions with total assets of more than $3
billion, independent auditors may be required to review quarterly financial
statements. FDICIA requires that independent audit committees be formed,
consisting of outside directors only. The committees of such large institutions
must include members with experience in banking or financial management, must
have access to outside counsel, and must not include representatives of large
customers.

Capital Adequacy Requirements

The FDIC's risk-based capital guidelines require state banks to have a
minimum ratio of Tier 1 of core capital- to-total risk-weighted assets of 4%
and a ratio of total capital-to-total risk-weighted assets of 8%. "Total
capital" is defined as the sum of Tier 1 and Tier 2 capital elements, with Tier
2 being limited to 100% of Tier 1 capital. Tier 1 and Tier 2 capital have the
same definitions for the Banks as for the Companies. The FDIC may establish
higher minimum requirements if, for example, a bank has previously received
special attention or has a high susceptibility to interest rate risk. As of
December 31, 1994, VB&T's ratio of Tier 1 capital to total risk-weighted assets
was 14.40% and its ratio of total capital to total risk-weighted assets was
15.52%, and RB&T's ratio of Tier 1 capital to total risk-weighted assets was
18.38% and its ratio of total capital to total risk-weighted assets was 18.88%.

The FDIC's leverage guidelines require state banks to maintain Tier 1
capital of no less than 5% of average total assets, except in the case of
certain highly rated banks for which the requirement is 3% of average total
assets. The Texas Department of Banking has issued a policy which generally
requires state chartered banks to maintain a leverage ratio (defined in
accordance with federal capital guidelines) of 6%. As of December 31, 1994,
VB&T's ratio of Tier 1 capital to average total assets was 7.51%, and RB&T's
ratio of Tier 1 capital to average total assets was 7.54%.

Corrective Measures for Capital Deficiencies

FDICIA requires the federal bank regulators to take "prompt corrective
action" with respect to any institution which does not meet specified minimum
capital requirements. The applicable regulations establish five capital
levels, ranging from "well-capitalized" to "critically capitalized," which
require or permit the federal bank examiners to take supervisory action. Under
these regulations, which became effective December 19, 1992, a bank

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is considered well capitalized if it has a total risk-based capital ratio of
10.0% or greater, a Tier I risk-based capital ratio of 6.0% or greater, and a
leverage ratio of 5.0% or greater, and it 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. A bank is considered
adequately capitalized if it has a total risk-based capital ratio of 8.0% or
greater, a Tier I risk-based capital ratio and leverage capital ratio of 4.0% or
greater (or a leverage ratio of 3.0% or greater if the institution is rated
composite 1 in its most recent report of examination, subject to appropriate
federal banking agency guidelines), and the institution does not meet the
definition of an undercapitalized institution. A bank is considered
undercapitalized if it has a total risk-based capital ratio that is less than
8%, a Tier I risk-based capital ratio that is less than 4%, or a leverage ratio
that is less than 4.0% (or a leverage ratio that is less than 3.0% if the
institution is rated composite 1 in its most recent report of examination,
subject to appropriate federal banking agency guidelines). A significantly
undercapitalized institution is one which has a total risk-based capital ratio
that is less than 6.0%, a Tier I risk-based capital ratio that is less than
3.0%, or a leverage ratio that is less than 3.0%. A critically undercapitalized
institution is one which has a ratio of tangible equity to total assets that is
equal to or less than 2.0%.

In addition to requiring undercapitalized institutions to submit a
capital restoration plan, FDICIA contains broad restrictions on certain
activities of such institutions involving asset growth, acquisitions, branch
establishment, and expansion into new lines of business. With certain
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
such distribution or payment.

As an institution's capital decreases, the FDIC's power becomes
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 FDIC has only very limited discretion in dealing with a critically
undercapitalized institution and is virtually required to appoint a receiver or
conservator.

Banks with risk-based capital and leverage ratios below the required
minimums may also be subject to certain 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.

Deposit Insurance Assessments

The Banks must pay assessments to the FDIC for federal deposit
insurance protection under a risk based assessment system. FDIC-insured
depository institutions that are members of the Bank Insurance Fund pay
insurance premiums at rates based on their risk classification. Institutions
assigned to higher-risk classifications (that is, institutions that pose a
greater risk of loss to their respective deposit insurance finds) pay
assessments at higher rates than institutions that pose a lower risk. An
institution's risk classification is assigned based on its capital levels and
the level of supervisory concern the institution poses to the regulators. In
addition, the FDIC can impose special assessments to cover the cost of
borrowings from the U.S. Treasury, the Federal Financing Bank, and Bank
Insurance Fund member banks. VB&T has been notified by the FDIC that its
assessment rate for 1995 will remain at the lowest level risk-based premium
available. This assessment level requires VB&T to be both well capitalized, as
defined by the FDIC, and in good standing with its regulators.

Brokered Deposit Restrictions

FIRREA and FDICIA generally bar institutions which are not well
capitalized from accepting brokered deposits. The FDIC rules prohibit
undercapitalized institutions from soliciting deposits by offering an effective
yield that exceeds by more than 75 basis points the prevailing effective yields
on insured deposits of comparable maturity in the institution's normal market
area or in the market area in which the deposits are being solicited.
Adequately capitalized institutions may not solicit, accept or renew brokered
deposits unless they obtain a waiver from the FDIC. Even in that event, they
may not pay an effective yield of more than 75 basis points over the effective
yield

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<PAGE> 46

paid on deposits of comparable size and maturity in the institution's normal
market area for deposits accepted from within that area, or the national rate
paid on deposits of comparable size and maturity for deposits accepted from
outside the institution's normal market area. These restrictions on soliciting,
accepting or renewing brokered deposits may limit the interest rate the Banks'
can pay on deposits, and consequently, limit their ability to attract deposits
as a funding source.

Instability of the Regulatory Structure

The laws and regulations affecting banks and bank holding companies
change frequently. The rules of the regulatory agencies in this area have
changed significantly over recent years, and there is reason to expect that
similar changes will continue in the future. Legislative and regulatory
initiatives are underway at the state and federal levels which could have
positive and negative effects on the ability of the Banks to compete
successfully. It is difficult to predict the outcome of these proposed
changes.

Expanded Enforcement Authority

As a result of FDICIA, banking regulators have increased ability to
monitor the activities of banks and their holding companies. In addition, the
Federal Reserve and FDIC possess extensive authority to police unsafe or
unsound practices and violations of applicable laws and regulations by
depository institutions and their holding companies. For example, the FDIC may
terminate the deposit insurance of any institution which it determines has
engaged in an unsafe or unsound practice. The agencies can also assess civil
money penalties, issue cease and desist or removal orders, seek injunctions,
and publicly disclose such actions. FDICIA, FIRREA and other laws have expanded
the agencies' authority in recent years.

Effect on Economic Environment

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 for deposits.

Federal Reserve 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. The nature of future monetary policies and the effect
of such policies on the business and earnings of Victoria and its subsidiaries
cannot be predicted.

DESCRIPTION OF VICTORIA COMMON AND PREFERRED STOCK

The following summary of the material terms and provisions of Victoria
Common Stock and Victoria Preferred Stock is qualified in its entirety by
reference to Victoria's Restated Articles of Incorporation ("Victoria's
Articles of Incorporation"), which expressly include the terms of Victoria
Common Stock and Victoria Preferred Stock. Victoria's Articles of
Incorporation are incorporated by reference as Exhibit 3.1 to the Registration
Statement of which this Proxy Statement/Prospectus is a part.

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VICTORIA COMMON STOCK

Victoria is incorporated under the TBCA. As of March 24, 1995,
Victoria was authorized to issue 35,000,000 shares of Victoria Common Stock of
which 7,962,512 shares were issued and outstanding. Victoria's Board of
Directors may at any time, without additional approval of the holders of
Victoria Common Stock, issue additional authorized but previously unissued
shares of Victoria Common Stock.

Dividends

Holders of Victoria Common Stock are entitled to receive dividends
ratably when, as and if declared by Victoria's Board of Directors from assets
legally available therefor, after payment of all dividends on Victoria
Preferred Stock, if any, outstanding. Under Texas law, Victoria may pay
dividends only out of surplus. Dividends paid by its subsidiaries are the
primary source of funds available to Victoria for payment of dividends to its
shareholders and for other needs. Victoria paid cash dividends of $4.1 million
and $2.9 million to holders of Victoria Common Stock during 1994 and 1993,
respectively. Victoria has paid cash dividends for eleven consecutive
quarters. In March 1994, cash dividends were increased 30% from $.10 per share
to $.13 per share. In January 1995, Victoria declared a $.16 per share
quarterly dividend, an increase of 23%, and a special $.09 per share dividend,
both of which were paid on February 14, 1995. The declaration and amount of
future dividends, however, will depend on circumstances existing at the time,
including Victoria's earnings, financial condition and capital requirements, as
well as regulatory limitations and such other factors as Victoria's Board of
Directors deems relevant, and there can be no assurance that any such dividends
will be declared.

Victoria's principal assets and sources of income consist of
investments in its operating subsidiaries, which are separate and distinct
legal entities. Federal and state banking regulations applicable to Victoria
and its banking subsidiaries require minimum levels of capital which limit the
amounts available for payment of dividends. VB&T is governed by the laws of
the State of Texas, and, under certain circumstances, is restricted in the
declaration and payment of dividends to the extent that before declaring any
dividends it must transfer to its "certified surplus" account an amount not
less than ten percent of its net profits earned since the last dividend was
declared, except that there is no requirement for a transfer to certified
surplus of a sum which would increase the certified surplus to more than the
capital stock of VB&T. The certified surplus of VB&T currently exceeds its
capital stock account. In addition, FDICIA amended the FDIA and other banking
laws which govern VB&T. FDICIA prohibits the payment of any dividend if and
when VB&T fails to meet or exceed any relevant capital measure prescribed by
the FDIC. VB&T currently meets or exceeds all such measures, but no assurance
can be given that it will continue to do so. SEE "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE"; "SUMMARY--PARTIES TO THE MERGER"; "SUMMARY--REASONS
FOR THE MERGER; RECOMMENDATION OF BOARD OF DIRECTORS"; "RISK FACTORS";
"SELECTED FINANCIAL DATA"; "MARKET PRICES"; "COMPARISON OF RIGHTS OF
SHAREHOLDERS OF UNITED AND VICTORIA--DIVIDENDS"; AND "INFORMATION ABOUT
VICTORIA".

Preemptive Rights

The holders of Victoria Common Stock do not have preemptive rights to
subscribe for a proportionate share of any additional securities issued by
Victoria before such securities are offered to others. The absence of
preemptive rights increases Victoria's flexibility to issue additional shares
of Victoria Common Stock in connection with acquisitions, employee benefit
plans and for other purposes, without affording the holders of Victoria Common
Stock a right to subscribe for their proportionate share of those additional
securities. Any further issuance of Victoria Common Stock after the Effective
Time is likely to reduce former United shareholders' proportionate interest in
Victoria. SEE "RISK FACTORS--DILUTION OF SHAREHOLDERS OF VICTORIA".

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Voting Rights

The holders of Victoria Common Stock are entitled to one vote per
share on all matters presented to shareholders and are not entitled to cumulate
their votes in the election of directors.

Liquidation

Upon liquidation, dissolution or the winding up of the affairs of
Victoria, holders of Victoria Common Stock are entitled to receive their pro
rata portion of the remaining assets of Victoria after the holders of Victoria
Preferred Stock have been paid in full any sums to which they may be entitled.

VICTORIA PREFERRED STOCK

Victoria has authorized 1,000,000 shares of $1.00 par value Victoria
Preferred Stock, none of which is issued and outstanding. The Preferred Stock
is issuable in one or more series. Victoria's Board of Directors, subject to
certain limitations, is authorized to fix the number of shares, dividend rate,
liquidation prices, redemption, conversion, voting rights, and other terms.
Victoria's Board of Directors at its discretion from time to time for any
proper corporate purpose may issue Victoria Preferred Stock without approval of
the holders of Victoria Common Stock.

Victoria presently has no plans or arrangements to issue any of the
authorized shares of Victoria Preferred Stock. However, the availability of
such shares would enable Victoria to meet possible contingencies and
opportunities for which the issuance of such shares may be deemed advisable.

The availability of Victoria Preferred Stock for issuance has a
potential anti-takeover effect, depending upon the specific terms of the
Victoria Preferred Stock when issued. For example, the authorization of shares
of Victoria Preferred Stock with unspecified voting rights may be used to
create voting impediments with respect to changes in control of Victoria or, as
a result of a conversion feature, to dilute the stock ownership of holders of
Victoria Common Stock seeking to obtain control of Victoria. The terms of such
shares could be designed to render more difficult the removal of incumbent
management (even if such removal would be beneficial to shareholders generally)
or the assumption of control by a holder of a large block of Victoria
securities. The terms of such shares could also be designed to discourage a
merger, tender offer or proxy contest involving Victoria or its securities and,
accordingly, such terms could have an adverse impact on shareholders who might
desire to vote in favor of such merger or participate in such tender offer.
However, Victoria's Board of Directors has no present intention to cause shares
of Victoria Preferred Stock to be issued for anti-takeover purposes or
otherwise. SEE "RISK FACTORS--ANTI-TAKEOVER PROVISIONS".

COMPARISON OF RIGHTS OF SHAREHOLDERS OF UNITED AND VICTORIA

As a result of the Merger, holders of United Common Stock will become
shareholders of Victoria and their rights as shareholders will continue to be
governed primarily by the TBCA, the material provisions of which are discussed
below. In addition, a description of corresponding material provisions
contained in Victoria's and United's respective charters and bylaws, as such
differences and provisions may affect the rights of shareholders, are set forth
below. The following summary is qualified in its entirety by reference to the
provisions of the TBCA and the charters and bylaws of Victoria and United.

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MERGERS

Texas law generally permits a merger to become effective without the
approval of the surviving corporation's shareholders if the articles of
incorporation of the surviving corporation do not change following the merger,
the amount of the surviving corporation's common stock to be issued or
delivered under the plan of merger does not exceed twenty percent of the total
shares of outstanding voting stock immediately prior to the acquisition, and
the board of directors of the surviving corporation adopts a resolution
approving the plan of merger. Where shareholder approval is required under
Texas law, the merger must be approved by the holders of two-thirds of the
outstanding shares of the Texas corporation entitled to vote thereon, unless
there is a class of stock that is entitled to vote as a class (as is often the
case), in which event the merger must be approved by the holders of two-thirds
of the outstanding shares of each class of stock entitled to vote as a class
and by the holders of two-thirds of the outstanding shares otherwise entitled
to vote; provided that the articles of incorporation may require a vote of a
different number, not less than a majority, of the shares outstanding.
Victoria's Articles of Incorporation do not provide for a different number of
shares for approval of a merger or permit the shares of any class or series to
vote thereon. United's Restated Articles of Incorporation, as amended
("United's Articles of Incorporation"), however, require only the vote of a
majority of the shares of United or any class or series thereof, respectively,
entitled to vote thereon. Neither Victoria nor United presently have any
shares of capital stock issued and outstanding which are entitled to vote as a
class. SEE "RISK FACTORS".

APPRAISAL RIGHTS

Shareholders of Texas corporations are entitled to exercise certain
dissenters' rights in the event of a sale, lease, exchange, or other
disposition of all, or substantially all, of the property and assets of the
corporation, and, with the exceptions discussed below, a merger or
consolidation. The appraisal rights of a shareholder of United are set forth
in full in Appendix II. SEE "SUMMARY--DISSENTERS' RIGHTS"; "THE
MERGER--APPRAISAL RIGHTS"; AND APPENDIX II.

No appraisal rights are available under Texas law for the holders of
any shares of a class or series of stock of a Texas corporation with respect to
a merger if that corporation survives the merger and the merger did not require
the vote of the holders of that class or series of such corporation's stock.
Further, Texas law has a provision which states that shareholders do not have
appraisal rights in connection with a merger where, on the record date fixed to
determine the shareholders entitled to vote on the merger or consolidation, the
stock of the corporation is listed on a national securities exchange or is held
of record by more than 2,000 shareholders. Notwithstanding the above, under
Texas law, a shareholder will be entitled to dissent and be paid for his shares
if the shareholder is required to accept for his shares any consideration other
than (a) shares of stock of a corporation which, immediately after the effective
date of the merger, are listed on a national securities exchange or are held of
record by not less than 2,000 shareholders, and (b) cash in lieu of fractional
shares otherwise entitled to be received.

SPECIAL MEETINGS

A special meeting of shareholders of a Texas corporation may be called
by the holders of shares entitled to cast not less than ten percent of all
shares entitled to vote at the meeting, unless a different percentage, not to
exceed a majority, is provided for in the articles of incorporation.
Victoria's Bylaws, as restated on April 19, 1994 ("Victoria's Bylaws"), provide
that special meetings of shareholders may be called at any time by the holders
of a least ten percent (10%) of the outstanding stock entitled to be voted at
such meeting, the Board of Directors, the Senior Chairman of the Board of
Directors, the Chairman of the Board of Directors, any Vice Chairman of the
Board of Directors or the President. United's Bylaws, as restated ("United's
Bylaws") provide that special meetings of shareholders may be called at any
time by the President upon the request of the holders of at least ten percent
(10%) of the outstanding stock entitled to be voted at such meeting, the Board
of Directors or the President.

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ACTIONS WITHOUT A MEETING

Under Texas law, shareholders may act without a meeting if a consent
in writing to such action is signed by all shareholders; provided, however,
that the articles of incorporation may provide that the shareholders may take
action without a meeting if a consent in writing to such action is signed by
the shareholders having the minimum number of votes that would be necessary to
take such action at a meeting. Victoria's Articles of Incorporation do not
contain such a provision. Victoria's Bylaws allow shareholders to act without
a meeting only if all shareholders entitled to vote at the meeting give their
written consent. Likewise, under United's Articles of Incorporation and
United's Bylaws, shareholders of United are permitted to act without a meeting
only if all shareholders entitled to vote at the meeting give their written
consent.

PURCHASE OF SHARES

In general, a Texas corporation may purchase its own shares out of
surplus provided the corporation is not rendered insolvent. Notwithstanding
that TBCA provision, a Texas corporation may purchase its own shares, provided
the net assets of the Texas corporation equal or exceed the purchase price and
the corporation will not be rendered insolvent, for the purposes of eliminating
fractional shares, collecting or compromising indebtedness owed by or to the
corporation, paying dissenting shareholders entitled to payment for their
shares under the TBCA or redeeming redeemable shares in accordance with the
TBCA.

VOTING RIGHTS

Under the TBCA, each outstanding share of a corporation, regardless of
class, is entitled to one vote on each matter submitted to a vote at a meeting
of shareholders unless otherwise provided in the corporation's articles of
incorporation. Victoria's Articles of Incorporation provide that shareholders
of Victoria Common Stock are entitled to one vote per share in any election of
directors and for all other purposes, subject to any limitation imposed by law
or as may be otherwise limited by Victoria's Articles of Incorporation. No
such charter limitation presently exists. Victoria's shareholders are not
entitled to vote cumulatively in the election of directors.

The holders of United Common Stock have the exclusive right to elect
the directors of United and to vote on all other matters submitted to the
shareholders, subject to the voting rights expressly conferred by law, by
United's Articles of Incorporation or by United's Board of Directors in
establishing the United Series A Preferred Stock, the United Series B Preferred
Stock and any other series of United preferred stock, if any. Specifically,
United's Articles of Incorporation grant to holders of United Series A
Preferred Stock and holders of United Series B Preferred Stock the right to
elect two additional members of the Board of Directors, if and whenever
dividends payable on any of such preferred stock shall be in default in an
amount equal to six or more full quarterly dividends per share. Although
United has not paid dividends on the United Series B Preferred Stock since
1988, the holders of United Series B Preferred Stock have not exercised their
right to elect any additional members to the Board of Directors. Under
United's Bylaws, each outstanding share entitled to vote shall be entitled to
one (1) vote upon each matter submitted to a vote at a meeting of shareholders.

ELECTION OF DIRECTORS

The directors of a corporation shall be elected by a plurality of the
votes cast by the holders of shares entitled to vote in the election of
directors at a meeting of shareholders at which a quorum is present.
Victoria's Articles of Incorporation and United's Articles of Incorporation
both expressly prohibit cumulative voting in an election of directors. SEE
"RISK FACTORS--ANTI-TAKEOVER PROVISIONS"; AND "DESCRIPTION OF VICTORIA COMMON
AND PREFERRED STOCK--VOTING RIGHTS".

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ASSESSABILITY OF CAPITAL STOCK

Under the TBCA, shares of stock issued by a Texas corporation, such as
outstanding Victoria Common Stock and United Common Stock, upon payment of the
consideration therefor, are considered fully paid and nonassessable.

CHARTER AMENDMENTS

Under Texas law, an amendment to the articles of incorporation
requires the affirmative vote of the holders of at least two-thirds of the
outstanding shares entitled to vote thereon, unless any class or series of
shares is entitled to vote thereon as a class, in which event the proposed
amendment shall be adopted upon receiving the affirmative vote of the holders
of at least two-thirds of the shares within each class or series entitled to
vote thereon as a class and of at least two-thirds of the total outstanding
shares entitled to vote thereon; provided that the articles of incorporation may
require the vote of a different number, not less than a majority, of the shares
outstanding. Victoria's Articles of Incorporation do not so specify. United's
Articles of Incorporation, however, permit amendment thereof upon the vote of
the holders of a majority of the shares of United or any class or series
thereof, respectively, entitled to vote on such an amendment.

DISSOLUTION

Under Texas law, the sale, lease, exchange or other disposition (not
including any pledge, mortgage, deed of trust or trust indenture, unless
otherwise provided in the articles of incorporation) of all, or substantially
all, of the property and assets, with or without the goodwill of a Texas
corporation, if not made in the usual and regular course of its business,
requires the affirmative vote of the holders of at least two-thirds of the
outstanding shares of the corporation entitled to vote thereon, unless any
class or series of shares of the corporation is entitled to vote as a class
thereon, in which event the vote required for authorization by the shareholders
shall be the affirmative vote of the holders of at least two-thirds of the
outstanding shares within each such class or series entitled to vote thereon as
a class and at least two-thirds of the outstanding shares otherwise entitled to
vote thereon; provided that the articles of incorporation may require the vote
of a different number, not less than a majority, of the shares outstanding.
Victoria's Articles of Incorporation do not provide for a different voting
requirement or entitle the shares of any class or series to vote thereon.
United's Articles of Incorporation, however, require only the vote of a
majority of the shares of United or any class or series thereof, respectively,
entitled to vote thereon.

The dissolution of a Texas corporation requires the affirmative vote
of the holders of at least two-thirds of the outstanding shares of the
corporation, unless any class or series of shares is entitled to vote as a
class thereon, in which event the vote required for dissolution shall be the
affirmative vote of the holders of at least two-thirds of the outstanding
shares of each class or series of shares entitled to vote as a class thereon,
as well as the affirmative vote of two-thirds of the total outstanding shares;
provided that the articles of incorporation may require the vote of a different
number, not less than a majority, of the shares outstanding. Each outstanding
share of a Texas corporation is entitled to vote on dissolution. Victoria's
Articles of Incorporation do not provide for a different number of shares for
approval of dissolution or permit the shares of any class or series to vote
thereon. United's Articles of Incorporation, however, require only the vote of
a majority of the shares of United or any class or series thereof,
respectively, entitled to vote thereon.

PREEMPTIVE RIGHTS

Under Texas law, shareholders possess preemptive rights as to the
issuance of additional or treasury securities by the corporation, unless the
corporation's articles of incorporation provide otherwise. Victoria's Articles
of Incorporation and United's Articles of Incorporation both deny preemptive
rights, and, therefore, neither Victoria

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shareholders nor United shareholders have preemptive rights as to newly issued
or treasury shares. SEE "RISK FACTORS--DILUTION OF SHAREHOLDERS OF VICTORIA".

DIVIDENDS

A Texas corporation may make distributions only out of surplus.
Holders of Victoria Common Stock are entitled to receive dividends ratably
when, as and if declared by Victoria's Board of Directors from assets legally
available therefor, after payment of all dividends on Victoria Preferred Stock,
if any is outstanding. Holders of Victoria Preferred Stock (none of which is
presently outstanding) are entitled to cumulative cash dividends, payable
quarterly, when, as and if declared by Victoria's Board of Directors. Holders
of United Common Stock are entitled to receive dividends ratably when, as and
if declared by United's Board of Directors from assets legally available
therefor, after payment of all dividends on United Series A Preferred Stock,
United Series B Preferred Stock and any other series of United preferred stock,
if any, outstanding. While United has continued to make its regular scheduled
dividend payments with respect to its United Series A Preferred Stock, United
has not paid dividends on its United Series B Preferred Stock since December
31, 1989. As of December 31, 1994, accrued but unpaid dividends on the United
Series B Preferred Stock totalled $100,000. SEE "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE"; "SUMMARY--PARTIES TO THE MERGER"; "SUMMARY--REASONS
FOR THE MERGER; RECOMMENDATION OF BOARD OF DIRECTORS"; "SELECTED FINANCIAL
DATA"; "MARKET PRICES"; "DESCRIPTION OF VICTORIA COMMON AND PREFERRED STOCK";
AND "INFORMATION ABOUT UNITED MARKET PRICE AND DIVIDENDS".

LIQUIDATION RIGHTS

Generally, under the TBCA, shareholders are entitled to share ratably
in the distribution of assets upon the dissolution of their association or
corporation. Preferred shareholders typically participate in the distribution
of assets of a dissolved corporation only to extent of their established
contractual preferences. Once the rights of preferred shareholders have been
fully satisfied, common shareholders are entitled to the pro rata distribution
of any remaining assets. Pursuant to Victoria's Articles of Incorporation,
upon liquidation, dissolution or the winding up of the affairs of Victoria,
holders of Victoria Common Stock are entitled to receive their pro rata portion
of the remaining assets of Victoria after the holders of Victoria Preferred
Stock have been paid in full any sums to which they may be entitled. Upon
liquidation, dissolution or the winding up of the affairs of United, holders of
United Series A Preferred Stock, United Series B Preferred Stock, and any other
series of United preferred stock outstanding, if any, will receive the
liquidation preference set forth in the designation of rights and preferences
of such series plus accrued and unpaid dividends. The liquidation preference
for the United Series A Preferred Stock is $7.50 per share, and the liquidation
preference for the United Series B Preferred Stock is $7.50 per share. After
payment in full to all holders of each outstanding series of United's preferred
stock, the remaining assets of United, if any, would be distributed ratably
among the holders of United Common Stock.

LIMITATION OF LIABILITY AND INDEMNIFICATION

Texas law permits a corporation to set limits on the extent of a
director's liability. Texas law permits a corporation to indemnify any
officer, director, employee or agent if such person acted in good faith and in
a manner as such person reasonably believed to be in, or not opposed to, the
best interests of the corporation. Indemnification is not allowed under Texas
law, absent a court order to the contrary, if an officer, director, employee or
agent of the corporation is finally adjudged liable to the corporation.
Under Victoria's Articles of Incorporation, to the fullest extent
allowed by law, a director will not be liable to Victoria or its
shareholders for monetary damages for any breach of fiduciary duty as a
director, except (i) for breach of a director's duty of loyalty, (ii) an act or
omission not in good faith or which involves intentional misconduct or a
knowing violation of law, (iii) any transaction from which the director
received an improper personal benefit, whether or not the benefit resulted from
an action taken within the scope of the director's office,

-46-
<PAGE> 53

(iv) an act or omission for which the liability of a director is expressly
provided by statute, or (v) an act related to an unlawful stock repurchase or
payment of a dividend. United's Articles of Incorporation do not limit the
liability of a director to United or its shareholders. Victoria's Bylaws and
United's Bylaws require and permit indemnification of officers, directors and
others to the fullest extent required or permitted by Texas law. SEE "AVAILABLE
INFORMATION"; "INCORPORATION BY REFERENCE OF CERTAIN DOCUMENTS"; AND
"INDEMNIFICATION".

INSPECTION OF BOOKS AND RECORDS

Under Texas law, any person who has been a shareholder of record for
at least six months preceding his demand, or who is the holder of at least five
percent of all of the outstanding shares of a corporation, is entitled to
examine a corporation's relevant books and records for any proper purpose.

Although certain of the specific differences between the voting and
other rights of Victoria shareholders and United shareholders are discussed
above, the foregoing summary is not intended to be a complete statement of the
comparative rights of such shareholders under the respective charters and
bylaws of Victoria and United. Additionally, the identification of certain
specific differences is not meant to indicate that other differences do not
exist. The foregoing summary is qualified in its entirety by the specific
provisions of Victoria's Articles of Incorporation and Bylaws, and United's
Articles of Association and Bylaws. SEE "AVAILABLE INFORMATION";
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE"; "RISK FACTORS"; AND
"INFORMATION ABOUT VICTORIA".

RESALE OF VICTORIA COMMON STOCK

Victoria Common Stock to be issued to holders of United Common Stock
upon consummation of the Merger will be freely transferable under the
Securities Act, except for shares issued to any person who may be an
"affiliate" of United within the meaning of Rule 145 under the Securities Act.
The directors and executive officers of United, the beneficial owners of ten
percent or more of United Common Stock and certain of their related interests
may be deemed to be affiliates of United. Such affiliates are not permitted to
transfer any Victoria Common Stock except in compliance with certain resale
requirements set forth in the Securities Act and the rules and regulations
thereunder. Under current law, these requirements include: (i) the further
registration under the Securities Act of the shares of Victoria Common Stock to
be sold, (ii) compliance with Rule 145 promulgated under the Securities Act
permitting limited sales under certain circumstances, or (iii) the availability
of another exemption from such registration. United is required to use its
best efforts to cause such affiliates to deliver to Victoria prior to the
Effective Time, a written agreement providing that each such affiliate will not
sell, pledge, transfer, or otherwise dispose of Victoria Common Stock to be
received by such person in the Merger, except in a manner which is consistent
with Victoria's accounting for the Merger as a pooling-of-interests and in
compliance with the applicable provisions of the Securities Act and the
respective rules and regulations thereunder. SEE "SUMMARY--ACCOUNTING
TREATMENT"; "THE MERGER--ACCOUNTING TREATMENT"; AND APPENDIX I.

As a condition to consummation of the Merger, Victoria must receive
from United shareholders receiving at least 50% of the aggregate Merger
Consideration a representation that they currently have no present plan or
intention to sell or otherwise dispose of the shares of Victoria Common Stock
received pursuant to the Merger. SEE "THE MERGER".

The Merger Agreement provides for the filing by Victoria of a listing
application with Nasdaq National Market covering the shares of Victoria Common
Stock issuable upon consummation of the Merger. It is a condition to the
consummation of the Merger that such shares of Victoria Common Stock shall have
been authorized for listing on Nasdaq National Market.

-47-
<PAGE> 54

INFORMATION ABOUT VICTORIA

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Certain documents filed by and relating to Victoria, including
Victoria's Annual Report on Form 10-K/A for the year ended December 31, 1994,
are incorporated herein by reference. This Proxy Statement/Prospectus is
accompanied by Victoria's 1994 Annual Report to Shareholders. The following
information contained in Victoria's 1994 Annual Report to Shareholders is
incorporated herein by reference: (i) certain information concerning Victoria
Common Stock included on page 48 under the heading "Quotations and Cash
Dividends on Capital Stock" and on page 38 under Note 11 of the "Notes to
Financial Statements"; (ii) the selected financial data presented on page 45;
(iii) the supplemental financial information consisting of selected quarterly
financial data set forth in Note 17 of the "Notes to Financial Statements" on
page 44; and (iv) Management's Discussion and Analysis of the Financial
Condition and Results of Operations of Victoria on pages 7 through 24. SEE
"AVAILABLE INFORMATION" AND "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE".
INTERESTS OF CERTAIN PERSONS

No director or executive officer of Victoria has any material direct
or indirect financial interest in United or the Merger, except as a director,
executive officer or shareholder of Victoria or its subsidiaries. SEE "THE
MERGER- -ADDITIONAL AGREEMENTS".

INFORMATION ABOUT UNITED

GENERAL

United is a bank holding company registered under the BHC Act, which
was incorporated and organized as a Texas business corporation in 1977 for the
purpose of acquiring RB&T, which acquisition was accomplished in May of 1978.
RB&T was organized and opened for business in 1909. United and RB&T derive all
of their revenues and income from the furnishing of banking and banking-related
services. United functions primarily as the holder of 100% of the stock of
RB&T. United's principal executive offices are located at 2214 Avenue H,
Rosenberg, Texas and its telephone number is (713) 342-5501. At December 31,
1994, United had assets of $68,288,000, deposits of $63,282,000 and
stockholders' equity of $4,165,000.

SERVICES, EMPLOYEES AND PROPERTIES

United offers a diversified range of commercial banking services for
customers located primarily in Fort Bend County and the Southwest Harris County
area of Texas. As of December 31, 1994, United and RB&T had 34 full- time
employees, four of whom were executive officers. The principal executive
offices of United and RB&T are located at 2214 Avenue H in Rosenberg, Texas in
a building owned by RB&T. In addition to its main banking house, RB&T owns two
branch offices located at 3400 Highway 6, and 4555 Sweetwater Boulevard in
Sugar Land, Texas.

COMPETITION

RB&T encounters strong competition both in making loans and attracting
deposits. The deregulation of the banking industry and the widespread
enactment of state laws which permit multi-bank holding companies as well as a
degree of interstate banking has created a highly competitive environment for
commercial banking in RB&T's primary market area. Moreover, RB&T competes with
other commercial and savings banks, savings and loan associations, credit
unions, finance companies, asset-based lenders, mutual funds, insurance
companies, brokerage

-48-
<PAGE> 55
and investment banking companies, and certain other nonfinancial institutions,
including retail stores which may maintain their credit programs and certain
governmental organizations. Certain of these competitors, some of which are
affiliated with large bank holding companies, have substantially greater
resources and lending limits, and offer certain services that RB&T does not
currently provide. Many of RB&T's non-bank competitors are not subject to the
same extensive federal regulations that govern bank holding companies and state
chartered and insured banks.

LEGAL PROCEEDINGS

The nature of United's business causes it to be involved in routine
legal proceedings from time to time. Other than such proceedings incidental to
United's business, management of United believes that there are no pending or
threatened legal proceedings which, upon resolution, would have a material
adverse impact on the financial condition of United or RB&T.

REGULATORY COMMITMENTS

United

As a bank holding company, United is subject to regulation by the
Federal Reserve. The Federal Reserve's capital adequacy guidelines require a
minimum ratio of total capital to risk-weighted assets of 8.0% (of which at
least 4.0% is required to consist of ``Tier 1'' capital elements). At December
31, 1994, United's ratios of ``Tier 1'' and total capital to risk-weighted
assets were approximately 16.02% and 16.52%, respectively. Both ratios
significantly exceed regulatory minimums. SEE "SUPERVISION AND
REGULATION--REGULATION OF THE COMPANIES".

In addition to the risk-based capital guidelines, the Federal Reserve
uses a leverage ratio as an additional tool to evaluate the capital adequacy of
bank holding companies. The leverage ratio requires a 3.0% ``Tier 1'' capital
to average total consolidated assets ratio for institutions with a CAMEL rating
of 1. All other institutions are expected to maintain a 100 to 200 basis point
cushion (i.e., these institutions will be expected to maintain a leverage ratio
of 4.0% to 5.0%). United's leverage ratio at December 31, 1994, was 6.73%. SEE
"SUPERVISION AND REGULATION-- REGULATION OF THE COMPANIES".

RB&T

RB&T is a Texas-chartered banking association, the deposits of which
are insured by the Bank Insurance Fund of the FDIC. RB&T is not a member of
the Federal Reserve System; therefore, it is subject to supervision and
regulation by the FDIC and the Texas Department of Banking.

The FDIC's risk-based capital guidelines require state banks to have a
minimum ratio of Tier 1 or core capital- to-total risk-weighted assets of 4%
and a ratio of total capital-to-total risk-weighted assets of 8%. The FDIC may
establish higher minimum requirements if, for example, a bank has previously
received special attention or has a high susceptibility to interest rate risk.
"Total Capital" is defined as the sum of Tier 1 and Tier 2 capital elements,
with Tier 2 being limited to 100% of Tier 1 capital. Tier 1 and Tier 2 capital
have the same definitions for RB&T as for United. As of December 31, 1994,
RB&T's ratio of Tier 1 capital to total risk-weighted assets was 18.3% and its
ratio of total capital to total risk-weighted assets was 18.8%.

The FDIC's leverage guidelines require state banks to maintain Tier 1
capital of no less than 5% of average total assets, except in the case of
certain highly rated banks for which the requirement is 3% of average total
assets. The Texas Department of Banking has issued a policy which generally
requires state chartered banks to maintain a leverage ratio (defined in
accordance with federal capital guidelines) of 6%. As of December 31, 1994,
RB&T's ratio of Tier 1 capital to average total assets was 7.54%.

-49-
<PAGE> 56
With certain exceptions (including money on deposit), Texas law
prohibits a state bank from incurring indebtedness or liabilities in excess of
its capital (defined as common stock) and certified surplus, without the prior
approval of the Texas Banking Department.

MARKET PRICES AND DIVIDENDS

Market Prices

There is no established trading market for United Common Stock,
although there are occasional transactions in the stock. The last transaction
in United Common Stock known to United's management to have occurred prior to
the announcement of the Merger was on December 14, 1994, at a price of $6.50
per share. This is the only trade in United Common Stock of which United's
management is aware of the price paid per share which has occurred since
January 1, 1993.

Dividends

United has never declared or paid any cash dividends on the United
Common Stock and the payment of any such dividends is subject to the prior
payment in full of any accrued but unpaid dividends on the United Series A
Preferred Stock and the United Series B Preferred Stock. At December 31, 1994,
there were no unpaid dividends on the United Series A Preferred Stock, but
accumulated and unpaid dividends on the United Series B Preferred Stock
totalled $100,000.

United's ability to pay dividends to its shareholders depends upon the
dividends received from RB&T. Dividends paid by RB&T are subject to
restrictions under various federal and Texas banking laws. In addition, RB&T
must maintain certain capital levels in order to comply with legal and
regulatory requirements, which may also restrict its ability to pay dividends
to United. SEE "RISK FACTORS--DIVIDEND HISTORY AND DIVIDEND RESTRICTIONS";
SUPERVISION AND REGULATION"; "DESCRIPTION OF VICTORIA COMMON STOCK AND
PREFERRED STOCK"; "COMPARISON OF RIGHTS OF SHAREHOLDERS OF UNITED AND
VICTORIA--DIVIDENDS".

MANAGEMENT AND PRINCIPAL SHAREHOLDERS

Board of Directors

The following table sets forth information as of December 31, 1994
concerning members of the Board of Directors of United. The dates set forth
below are the dates each director first became a director of United. Under
United's Bylaws, directors are elected annually by the shareholders and serve
until a successor has been elected and qualified or until resignation, removal
or death. United does not pay fees to directors for service as a United
director. Except as noted otherwise, each director's principal occupation has
not materially changed during the past five years.

<TABLE>
<CAPTION>
DIRECTOR AGE DIRECTOR SINCE PRINCIPAL OCCUPATION, BUSINESS
-------- --- -------------- ------------------------------
<S> <C> <C> <C>
D. Ann Komar . . . . . . . 42 1994 President/MGSI Securities
S. E. McCrory, Jr. . . . . 58 1990 Real Estate Investments
D.W. Neuenschwander . . . . 60 1978 Chairman of the Board and President of United;
Chairman of the Board and President of RB&T
G.W. Neuenschwander(1) . . 81 1978 Senior Vice President of RB&T
</TABLE>

(1) G.W. Neuenschwander is the father of D.W. Neuenschwander.

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<PAGE> 57

Executive Officers

The following table sets forth the names, ages and positions as of
December 31, 1994 of the principal executive officers of United and RB&T.
Under both United's and RB&T's Bylaws, officers are elected annually by the
Board of Directors and serve until a successor has been elected and qualified
or until resignation, removal or death. Each of United's or RB&T's executive
officers has held the position shown during the last five years unless
otherwise described below.

<TABLE>
<CAPTION>
NAME AGE OFFICER SINCE POSITION HELD
---- --- ------------- -------------
<S> <C> <C> <C>
D.W. Neuenschwander . . . . 60 1978 Chairman of the Board and President of
United; Chairman of the Board and
President of RB&T

Andrew Dow . . . . . . . . 44 1987 Executive Vice President of RB&T

G.W. Neuenschwander . . . . 81 1978 Senior Vice President of RB&T

Renee Bourland(1) . . . . . 38 1991 Senior Vice President, Cashier and
Comptroller of RB&T
</TABLE>

_________________
(1) During the two years prior to Ms. Bourland's employment with RB&T she
worked as a Financial Technician for the Resolution Trust Corporation
and as a Production Coordinator for ICM Mortgage Corporation.

Stock Ownership of Executive Officers and Directors
The following table sets forth as of May 23, 1995 the beneficial
ownership of United Stock by each named executive officer of United and RB&T,
each director of United and by each of such directors and executive officers a
group. Except as otherwise noted, each shareholder has sole voting and
dispositive power with respect to his shares of United Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER TITLE OF CLASS BENEFICIAL OWNERSHIP CLASS
------------------- -------------- -------------------- ----------
<S> <C> <C> <C>
Andrew Dow . . . . . . . . . . . . . Common 557 0.24%
P. O. Box 712 Series A Preferred 321 0.75%
Rosenberg, Texas 77471

S. E. McCrory, Jr.(8) . . . . . . . Common 8,988(1) 3.81%
1111 Hermann Dr.
Warwick Tower
Houston, Texas 77004

D.W. Neuenschwander(8) . . . . . . . Common 165,312(2) 70.11%
P. O. Box 25294 Series A Preferred 25,861(3) 60.72%
Houston, Texas 77265 Series B Preferred 26,667(4) 100.00%
</TABLE>

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<PAGE> 58
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER TITLE OF CLASS BENEFICIAL OWNERSHIP CLASS
------------------- -------------- -------------------- ----------
<S> <C> <C> <C>
G.W. Neuenschwander(18) . . . . . . . Common 6,006(7) 2.55%
P. O. Box 712 Series A Preferred 1,352(8) 3.18%
Rosenberg, Texas 77471

All directors and executive . . . . . Common 165,869(9) 70.34%
officers as a group (6 persons) Series A Preferred 26,182(9) 61.48%
Series B Preferred 26,667(9) 100.00%
</TABLE>
_________________
(1) Consists of 8,988 shares held of record by RB&T as custodian for S.E.
McCrory, Jr., Self Directed Retirement Account. All of these shares
are subject to the United Voting Agreement.
(2) Consists of 60,367 shares held of record by D.W. Neuenschwander; 1,366
shares held of record by DWN Co. of which D.W. Neuenschwander is the
President; 19,628 shares held of record by RB&T, as IRA custodian for
D.W. Neuenschwander; 39 shares held by Edward D. Jones & Co. as
custodian for the benefit of D. W. Neuenschwander; 92 shares held as
treasury stock by United Bancshares, Inc. of which D.W. Neuenschwander
is the President (all of the above-mentioned shares are subject to the
United Voting Agreement); and 83,820 shares held of record by other
shareholders which are subject to the Voting Agreement.
(3) Consists of 15,998 shares held of record by D.W. Neuenschwander and 30
shares held by Edward D. Jones & Co. as custodian for the benefit of
D.W. Neuenschwander, (all of the above-mentioned shares are subject
to the United Voting Agreement); 9,833 shares held of record by other
shareholders which are subject to the United Voting Agreement.
(4) Consists of 24,267 shares held of record by DWN Co. of which D.W.
Neuenschwander is the President and which are subject to the United
Voting Agreement and 2,400 shares held of record by John E. Smith
which are subject to the United Voting Agreement.
(5) Consists of 4,894 shares held of record by G.W. Neuenschwander and
1,112 shares held by Edward D. Jones & Co. as custodian for the
benefit of G. W. Neuenschwander. All of these shares are subject to
the United Voting Agreement.
(6) Consists of 877 shares held of record by G.W. Neuenschwander and 475
shares held by Edward D. Jones & Co. as custodian for the benefit of
G. W. Neuenschwander. All of these shares are subject to the United
Voting Agreement.
(7) To the extent the shares beneficially owned by the named executive
officers of United and RB&T and by the directors of United represent
identical holdings, they have been counted only once for purposes of
calculating director and executive officer beneficial ownership. Ms.
Komar and Ms. Bourland do not own any shares of the outstanding
capital stock of United.

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<PAGE> 59
(8) The shares of United Common Stock held by these shareholders are
subject to Voting Agreements and Proxies, and therefore may be voted
by Victoria in connection with the Merger.
The following table sets forth the beneficial ownership in Victoria
Common Stock that each named executive officer of United and RB&T, each
director of United, and all such executive officers and directors as a group,
will have if the Merger occurs in June 1995 and there are no Dissenting
Shareholders.

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP OF SHARES OF VICTORIA PERCENT OF CLASS OF VICTORIA
NAME AND ADDRESS OF COMMON STOCK IF MERGER COMMON STOCK IF MERGER
BENEFICIAL OWNER OCCURS IN JUNE 1995 (1) OCCURS IN JUNE 1995(1)
------------------- --------------------------------- -----------------------------
<S> <C> <C>
Andrew Dow . . . . . . . . . . . . 724 0.01%
P. O. Box 712
Rosenberg, Texas 77471

S. E. McCrory, Jr. . . . . . . . 11,684(2) 0.14%
1111 Hermann Dr.
Warwick Towers
Houston, Texas 77004

D.W. Neuenschwander . . . . . . . . 105,819(3) 1.28%
P. O. Box 712
Rosenberg, Texas 77471

G.W. Neuenschwander . . . . . . . . 7,807(4) 0.09%
P. O. Box 712
Rosenberg, Texas 77471

All directors and executive . . . . 126,034(5) 1.52%
officers as a group (6 persons)
</TABLE>
_________________
(1) The number of shares of Victoria Common Stock given as consideration
for each share of United Common Stock is based on an Exchange Ratio of
1.30. This will be the Exchange Ratio if the Effective Time occurs
in June 1995 based on a Pricing Average of $25.86. If the Pricing
Average at the Effective Time is $21.25, the number of shares
of Victoria Common Stock to be received by United shareholders will
increase by approximately 22%, or if the Pricing Average at the
Effective Time is $33.75, the number of shares of Victoria Common
Stock to be received by United shareholders will decrease by
approximately 23%.

(2) Consists of 11,684 shares received in conversion of shares held of
record by RB&T as custodian for S.E. McCrory, Jr., Self Directed
Retirement Account.

(3) Consists of 78,477 shares received in conversion of shares held of
record by D.W. Neuenschwander; 1,775 shares received in conversion of
shares held of record by DWN Co. of which D.W. Neuenschwander is the
President; 25,516 shares received in conversion of shares held of
record by RB&T, as IRA custodian for D.W. Neuenschwander; and 50
shares received in conversion of shares held by Edward D. Jones & Co.
as custodian for the benefit of D.W. Neuenschwander.

-53-
<PAGE> 60

(4) Consists of 6,362 shares received in conversion of shares held of
record by G.W. Neuenschwander and 1,445 shares received in conversion
of shares held by Edward D. Jones & Co. as custodian for the benefit
of G.W. Neuenschwander.
(5) To the extent the shares that would be beneficially owned by the named
executive officers of United and RB&T and by the directors of United
represent identical holdings, they have been counted only once for
purposes of calculating director and executive officer beneficial
ownership. No shares will be owned by Ms. Komar and Ms. Bourland.
Employee Savings Plan

The Employee Savings Plan of RB&T ("RB&T Savings Plan") is intended to
qualify under Section 401(k) of the Code. The RB&T Savings Plan is available
to all employees of RB&T. RB&T's contributions include profit sharing
contributions, deferral contributions and matching contributions. The Board of
Directors of RB&T determines the amount of profit sharing contributions each
year. In 1994, RB&T contributed $5,000 to the RB&T Savings Plan. An
employee's matching contributions in a given year may not exceed ten percent of
the employee's compensation. The RB&T Savings Plan is administered by the
Administrative Committee appointed by the Board of Directors of RB&T. An
employee's participation in the RB&T Savings Plan ends upon termination of
employment for any reason, including death, disability or retirement.

Principal Shareholders
The following table sets forth as of May 23, 1995 the beneficial
ownership of United Stock by each shareholder known to United to be a
beneficial owner of more than five percent (5%) of the issued and outstanding
United Common Stock, United Series A Preferred Stock or United Series B
Preferred Stock. Except as otherwise noted, each shareholder has sole voting
and dispositive power with respect to his shares of United Stock.

-54-
<PAGE> 61
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER TITLE OF CLASS BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------- -------------------- --------
BENEFICIAL OWNERSHIP

<S> <C> <C> <C>
Erlene Bramlett . . . . . . . . . Common 2,802 1.19%
P. O. Box 1644 Series A Preferred 2,802 6.58%
Baytown, Texas 77522

Kirkendall & Collins(7) . . . . . Common 16,000 6.79%
700 Louisiana, Suite 4800
Houston, Texas 77002

D.W. Neuenschwander(7) . . . . . Common 165,312(1) 70.11%
P. O. Box 25294 Series A Preferred 25,861(2) 60.72%
Houston, Texas 77265 Series B Preferred 26,667(3) 100.00%

G.W. Neuenschwander(7) . . . . . Common 6,006(4) 2.55%
P. O. Box 712 Series A Preferred 1,352(5) 3.18%
Rosenberg, Texas 77471

John E. Smith . . . . . . . . . . Series B Preferred 2,400(6) 9.00%
710 N. Post Oak Road, Suite 308
Houston, Texas 77024

Joyce Ann Yarling . . . . . . . . Common 2,225 0.94%
P. O. Box 271 Series A Preferred 2,225 5.22%
Rosenberg, Texas 77471

Mary E. Yarling . . . . . . . . . Common 2,225 0.94%
2321 Bernie Series A Preferred 2,225 5.22%
Rosenberg, Texas 77471
</TABLE>
_________________
(1) Consists of 60,367 shares held of record by D.W. Neuenschwander; 1,366
shares held of record by DWN Co. of which D.W. Neuenschwander is the
President; 19,628 shares held of record by RB&T, as IRA custodian for
D.W. Neuenschwander; 39 shares held by Edward D. Jones & Co. as
custodian for the benefit of D.W. Neuenschwander; 92 shares held as
treasury stock by United Bancshares, Inc. of which D.W. Neuenschwander
is the President (all of the above-mentioned shares are subject to the
United Voting Agreement); and 83,820 shares held of record by other
shareholders which are subject to the United Voting Agreement.
(2) Consists of 15,998 shares held of record by D.W. Neuenschwander, and 30
shares held by Edward D. Jones & Co. as custodian for the benefit of
D.W. Neuenschwander (all of the above-mentioned shares are subject to
the United Voting Agreement); and 9,833 shares held of record by other
shareholders which are subject to the United Voting Agreement.

(3) Consists of 24,267 shares held of record by DWN Co., of which D.W.
Neuenschwander is the President and which are subject to the United
Voting Agreement and 2,400 shares held of record by John E. Smith
which are subject to the United Voting Agreement.

-55-
<PAGE> 62

(4) Consists of 4,894 shares held of record by G.W. Neuenschwander, and
1,112 shares held by Edward D. Jones & Co. as custodian for the
benefit of G.W. Neuenschwander. All of these shares are subject to the
United Voting Agreement.
(5) Consists of 877 shares held of record by G.W. Neuenschwander, and 475
shares held by Edward D. Jones & Co. as custodian for the benefit of
G.W. Neuenschwander. All of the above-mentioned shares are subject to
the United Voting Agreement.
(6) Consists of 2,400 shares held of record by John E. Smith, all of which
are subject to the United Voting Agreement.

(7) The shares of United Common Stock held by these shareholders are
subject to Voting Agreements and Proxies, and therefore may be voted
by Victoria in connection with the Merger.
The following table sets forth the beneficial ownership in Victoria by
each shareholder of United known to United to be a beneficial owner of more
than five percent (5%) of the issued and outstanding United Common Stock,
United Series A Preferred Stock or United Series B Preferred Stock if the
Merger occurs in June 1995 and there are no Dissenting Shareholders.

AMOUNT AND NATURE OF BENEFICIAL PERCENT OF CLASS OF
OWNERSHIP OF SHARES OF VICTORIA VICTORIA COMMON STOCK
NAME AND ADDRESS OF COMMON STOCK IF THE MERGER IF THE MERGER
BENEFICIAL OWNER OCCURS IN JUNE 1995(1) OCCURS IN JUNE 1995(1)
------------------- ------------------------------- -------------------------
<S> <C> <C>
Erlene Bramlett . . . . . . . . . . . 3,642 0.04%
P.O. Box 1644
Baytown, Texas 77522

Kirkendall & Collins . . . . . . . . 20,800 0.25%
700 Louisiana, Suite 4800
Houston, Texas 77002

D.W. Neuenschwander . . . . . . . . . 105,819(2) 1.28%
P.O. Box 25294
Houston, Texas 77265

G.W. Neuenschwander . . . . . . . . . 7,807(3) 0.09%
P.O. Box 712
Rosenberg, Texas 77471

John E. Smith . . . . . . . . . . . . 0 0.00%
710 N. Post Oak Road, Suite 308
Houston, Texas 77024

Joyce Ann Yarling . . . . . . . . . . 2,892 0.03%
P.O. Box 271
Rosenberg, Texas 77471
</TABLE>

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<PAGE> 63
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL PERCENT OF CLASS OF
OWNERSHIP OF SHARES OF VICTORIA VICTORIA COMMON STOCK
NAME AND ADDRESS OF COMMON STOCK IF THE MERGER IF THE MERGER
BENEFICIAL OWNER OCCURS IN JUNE 1995(1) OCCURS IN JUNE 1995(1)
------------------- ------------------------------- -------------------------

<S> <C> <C>
Mary E. Yarling . . . . . . . . . . . 2,892 0.03%
2321 Bernie
Rosenberg, Texas 77471
</TABLE>

(1) The number of shares of Victoria Common Stock given as consideration
for each share of United Common Stock is based on an Exchange Ratio of
1.30. This will be the Exchange Ratio if the Effective Time occurs
in June 1995 based on a Pricing Average of $25.86. If the
Pricing Average at the Effective Time is $21.25, the number of shares
of Victoria Common Stock to be received by United shareholders will
increase by approximately 22%, or if the Pricing Average at the
Effective Time is $33.75, the number of shares of Victoria Common
Stock to be received by United shareholders will decrease by
approximately 23%.

(2) Consists of 78,477 shares received in conversion of shares held of
record by D.W. Neuenschwander; 1,775 shares received in conversion of
shares held of record by DWN Co. of which D.W. Neuenschwander is the
President; 25,516 shares received in conversion of shares held of
record by RB&T, as IRA custodian for D.W. Neuenschwander;
and 50 shares received in conversion of shares held by Edward D. Jones
& Co. as custodian for the benefit of D.W. Neuenschwander.

(3) Consists of 6,362 shares received in conversion of shares held of
record by G.W. Neuenschwander and 1,445 shares received in conversion
of shares held by Edward D. Jones & Co. as custodian for the benefit
of G.W. Neuenschwander.
INTEREST OF CERTAIN PERSONS

Certain of the principal shareholders of United and the directors and
officers of RB&T and United are presently customers of RB&T or are officers,
directors or shareholders of corporations or owners of a participation or other
interest in entities or ventures which currently have or in the past have had
transactions with RB&T. In order to comply with regulations promulgated under
the Federal Reserve Act, such transactions are required to be made in the
ordinary course of business of RB&T, on substantially the same terms, including
interest rate, collateral and repayment terms, as those prevailing at the time
for comparable transactions with other persons not affiliated with RB&T or
United, and should not involve more than the normal risk of collectability or
present other unfavorable features. The aggregate indebtedness to RB&T of the
executive officers and directors of United and RB&T or their affiliates,
directly or indirectly, as of December 31, 1994, was $1,376,246, or
approximately 5.7% of total loans and 26.0% of total shareholders' equity at
such date.

-57-
<PAGE> 64
CONSOLIDATED STATEMENTS OF EARNINGS OF UNITED
The consolidated statements of earnings set forth below with respect
to the results of United's operations for the three months ended March 31, 1995
and March 31, 1994, and for each of the years in the three-year
period ended December 31, 1994 should be read in conjunction with, and are
qualified in their entirety by reference to, the consolidated financial
statements and the notes thereto included elsewhere in this Proxy
Statement/Prospectus.
<TABLE>
<CAPTION> THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
--------------------- ---------------------------------------
1995 1994 1994 1993 1992
------- -------- ---------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Interest income:
Loans, including fees . . . . . . . . . . . . . . . $ 562 $549 $ 2,208 $ 2,443 $ 2,389
Investment securities:
Taxable . . . . . . . . . . . . . . . . . . . . . 410 312 1,389 1,546 1,667
Nontaxable . . . . . . . . . . . . . . . . . . . 24 19 93 69 62
Other . . . . . . . . . . . . . . . . . . . . . . . 2 2 7 4 2
Federal funds sold . . . . . . . . . . . . . . . . . 54 76 304 127 142
------- ---- ------- -------- -------
Total interest income . . . . . . . . . . . . . . 1,052 958 4,001 4,189 4,262
------- ---- ------- -------- -------
Interest expense:
Demand and savings deposits . . . . . . . . . . . . 186 179 735 776 962
Certificates and other time deposits . . . . . . . . 168 149 594 655 799
Notes payable . . . . . . . . . . . . . . . . . . . 18 7 45 38 41
------- ---- ------- -------- -------
Total interest expense . . . . . . . . . . . . . 372 335 1,374 1,469 1,802
------- ---- ------- -------- -------
Net interest income . . . . . . . . . . . . . . . . . . 680 623 2,627 2,720 2,460
Provision for credit losses . . . . . . . . . . . . 10 0 15 155 337
------- ---- ------- -------- -------
Net interest income after provision for credit
losses . . . . . . . . . . . . . . . . . . . . . 670 623 2,612 2,565 2,123
------- ---- ------- -------- -------
Noninterest income:
Customer service fees . . . . . . . . . . . . . . . 166 171 706 781 709
Investment securities gains, net . . . . . . . . . . 0 0 0 55 145
Other . . . . . . . . . . . . . . . . . . . . . . . 60 39 168 132 123
------- ---- ------- -------- -------
Total noninterest income . . . . . . . . . . . . 226 210 874 968 977
------- ---- ------- -------- -------
Noninterest expenses:
Salaries and employee benefits . . . . . . . . . . . 340 319 1,317 1,237 1,158
Data processing . . . . . . . . . . . . . . . . . . 73 63 268 245 241
Net occupancy expense . . . . . . . . . . . . . . . 94 86 374 340 346
Amortization of goodwill . . . . . . . . . . . . . . 0 0 0 0 0
Other . . . . . . . . . . . . . . . . . . . . . . . 229 254 985 764 740
------- ---- ------- -------- -------
Total noninterest expense . . . . . . . . . . . . 736 722 2,944 2,586 2,485
------- ---- ------- -------- -------
Earnings before income taxes, extraordinary credit and
cumulative effect of accounting change . . . . . . . . 160 111 542 947 615
Provision for income taxes . . . . . . . . . . . . . . 54 41 183 305 220
------- ---- ------- -------- -------
Earnings before extraordinary credit and cumulative
effect of accounting change . . . . . . . . . . . . . 106 70 359 642 395
Extraordinary credit, less income taxes . . . . . . . . 0 0 0 0 82
------- ---- ------- -------- -------
Earnings before cumulative effect of accounting change 106 70 359 642 477
Cumulative effect of accounting change for income
taxes on years prior to 1993 . . . . . . . . . . . . . 0 0 0 (36) 0
------- ---- ------- -------- -------
Net earnings . . . . . . . . . . . . . . . . . . . . . 106 70 $ 359 $ 606 $ 477
======= ==== ======= ======== =======
Net earnings per common share . . . . . . . . . . . . . 0.40 0.25 $ 1.33 $ 2.38 $ 1.89
======= ==== ======= ======== =======
</TABLE>

-58-
<PAGE> 65

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

Management's Discussion and Analysis of Financial Condition and
Results of Operations of United analyzes the major elements of United's
consolidated balance sheets and statements of earnings. This section should be
read in conjunction with United's consolidated financial statements and
accompanying notes and other detailed information appearing elsewhere in this
Proxy Statement/Prospectus.

THREE MONTHS ENDED MARCH 31, 1995 AND 1994

The following discussion highlights the major changes affecting the
operations and financial condition of United for the three months ended March
31, 1995 and 1994. For ease of reference, the tabular financial information for
March 31, 1995 and March 31, 1994, as the case may be, is set forth in the
annual tables.

PERFORMANCE SUMMARY

United's net earnings for the three months ended March 31, 1995 were
$106,000, compared with $70,000 for the three months ended March 31, 1994, a
51.43% increase. The increase was primarily due to an improvement in the net
interest margin.

On a weighted average per share basis, net earnings per share of
United Common Stock was $0.40 at March 31, 1995, compared to $0.25 at March 31,
1994. Return on average assets, which measures net earnings in relation to
average assets and generally indicates an institution's ability to use its
assets profitably, was 0.66% for the three months ended March 31, 1995
compared to 0.42% for the three months ended March 31, 1994. Return on
average equity, which indicates how effectively an institution can generate
net income on the capital invested by its shareholders, was 10.00% for the
three months ended March 31, 1995 compared to 6.36% for the three months ended
March 31, 1994.

NET INTEREST INCOME AND NET INTEREST MARGIN

United's net interest income for March 31, 1995 was $680,000 compared
with $623,000 at March 31, 1994, an increase of 9.15%. The increase in net
interest income was primarily due to a 31.12% increase in investment security
income. For the months ended March 31, 1995 the yield on interest-earning
assets was 7.23%, an increase of 93 basis points from 6.30% for the months
ended March 31, 1994. Total funding cost increased 47 basis points to 3.14% as
of March 31, 1995 from 2.67% as of March 31, 1994. The increase in the yield on
interest-earning assets and total funding costs were due to the rise in interest
rates and the change of the composition of the earning assets as of March 31,
1995 compared to March 31, 1994. Lower yielding federal funds sold were reduced
and higher yielding investment securities were increased. As of March 31, 1995,
the net interest margin increased 58 basis points from 4.10% as of March 31,
1994 to 4.68%.

NONINTEREST INCOME

Noninterest income for the three months ended March 31, 1995 was
$226,000, an increase of $16,000, or 7.62%, from $210,000 for the same period
in 1994. The primary reason for the increase in noninterest income between
March 31, 1995 and March 31, 1994 was an increase in gain on sale of other
real estate of $11,000, which was partially offset by a decrease in loan
origination fees of $6,000.

NONINTEREST EXPENSE

Noninterest expense for the three months ended March 31, 1995 was
$736,000, a 1.94% increase from $722,000 for the three months ended March 31,
1994. The largest increase in noninterest expense occurred in salaries and
employee benefits, primarily due to a $15,000 increase in employee insurance.
Other areas of significant increases were legal and accounting fees which
increased $8,000 or 40.55% due to the proposed acquisition by Victoria. These
increases were partially offset by decreases in other expenses, primarily a
$45,000 decrease in other real estate losses.

INCOME TAXES

United provided for federal income taxes of $54,000 for the three
months ended March 31, 1995 compared to $41,000 for the three months ended
March 31, 1994. The $13,000 increase in taxes is due to the increase in net
earnings.

LOAN PORTFOLIO

As of the three months ended March 31, 1995, loans increased
$3,825,000, or 16.01%, from $23,886,000 at December 31, 1994 to $27,711,000 at
March 31, 1995. The primary reason the loan portfolio increased was the
increased volume in the mortgage warehouse lines of credit. Management is
presently allowing all of the mortgage warehouse lines to run off, and is
anticipating all of the lines to be paid off by the end of May, 1995.

At March 31, 1995, loans represented 47.14% of deposits and 43.01% of
total assets. In comparison, loans represented 37.75% of deposits and 34.98% of
total assets as of December 31, 1994. The increase of loans to total deposits
and assets can be explained by not only the increase in loan volume, but a
decrease in total deposits and assets from December 31, 1994 to March 31, 1995.

RB&T had loans totaling $3,521,000, or 12.71% of total loans to the
agricultural industry as of March 31, 1995. There were no loans classified as
highly-leveraged transactions as of March 31, 1995.

NONPERFORMING LOANS AND ASSETS

United has several procedures in place to assist in maintaining the
overall quality of its loan portfolio. As deemed necessary, but not less than
annually, RB&T receives and reviews financial information on all credits which
exceed $100,000. In addition, all renewed loans are reviewed and presented as
new loans, including a complete review of financial statements. All past due
loans are reviewed and discussed in detail weekly by the Officer's Loan
Committee and monthly by the Board of Directors.

Nonperforming assets (nonperforming loans and real estate acquired by
foreclosure) at March 31, 1995 were $460,000, or 0.71% of total assets,
compared with $512,000, or 0.75% of total assets, at December 31, 1994.

Real estate acquired by foreclosure at March 31, 1995 totaled
$460,000. Foreclosed real estate properties are actively being marketed. Real
estate acquired by foreclosure at December 31, 1994 totaled $512,000. The
decrease in real estate acquired by foreclosure during the three months of 1995
is the result of a sale during the period.

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses is a reserve established through
charges to earnings in the form of a provision for credit losses. Management
has established an allowance for credit losses which it believes is adequate
for estimated losses in its loan portfolio. Based on an evaluation of the loan
portfolio, management presents a quarterly review of the allowance for credit
losses to United's Board of Directors, indicating any changes in the allowance
since the last review and any recommendations as to adjustments in the
allowance. In making its evaluation, management considers the diversification
by industry of United's commercial loan portfolio, the effect of changes in
the local real estate market on collateral values, the results of recent
regulatory examinations, the effects on the loan portfolio of current economic
indicators and their probable impact on borrowers, the amount of chargeoffs
for the period, the amount of nonperforming loans and related collateral
security, the evaluation of its loan portfolio by management and the annual
examination of United's financial statements by its independent auditors.
Chargeoffs occur when loans are deemed to be uncollectible.

At March 31, 1995, United had loans totaling $245,000 on its "watch
list". All of the loans on the "watch list" as of March 31, 1995 are current.

United believes that the allowance for credit losses at March 31, 1995
is adequate to cover losses inherent in the portfolio as of such date. However,
there can be no assurance that United will not sustain losses in future
periods, which could be substantial in relation to the size of the allowance at
March 31, 1995.

For the three months ended March 31, 1995, net loan chargeoffs totaled
($3,000), or (0.01%) of average loans outstanding for the period, compared with
$109,000, or 0.44% of average loans outstanding during 1994. During the three
month period of 1995, United recorded a $10,000 provision to its allowance for
credit losses, compared with a $15,000 provision for 1994.

INVESTMENTS

Effective January 1, 1994, United adopted Statement of Financial
Accounting Standards No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND
EQUITY SECURITIES (Statement 115). At the date of purchase, United is required
to classify debt and equity securities into one of three categories:
held-to-maturity, trading or available-for-sale. At each reporting date, the
appropriateness of the classification is reassessed. Investments in debt
securities are classified as held-to-maturity and measured at amortized cost in
the financial statements only if management has the positive intent and ability
to hold those securities to maturity. Securities that are bought and held
principally for the purpose of selling them in the near term are classified as
trading and measured at fair value in the financial statements with unrealized
gains and losses included in earnings. Investments not classified as either
held-to-maturity or trading are classified as available-for-sale and measured
at fair value in the financial statements with unrealized gains and losses
reported, net of tax, in a separate component of stockholders' equity until
realized.

Under United's previous accounting policy, investment securities were
stated at cost, adjusted for accretion of discounts and amortization of
premiums which were recognized as adjustments to interest income. Gains and
losses on sales of securities available-for-sale are determined using the
specific-identification method.

For the past three years, the majority of United's investment portfolio
has been comprised of mortgage-backed securities. Mortgage-backed securities
are securities which have been developed by pooling a number of real estate
mortgages and are primarily issued by federal agencies such as the Federal
National Mortgage Corporation and the Federal Home Loan Bank. These securities
are deemed to have high credit ratings, and minimum regular monthly cash flows
of principal and interest are guaranteed by the agencies. United has no
mortgage-backed securities that have been issued by non-agency entities.
Included in United's mortgage-backed securities at March 31, 1995 were
$7,000,000 in agency issued collateralized mortgage obligations.

At March 31, 1995, investment securities totaled $30,460,000, a
decrease of $15,000 from $30,475,000 at December 31, 1994. At March 31, 1995,
investment securities represented 51.81% of total deposits and 47.27% of total
assets.

The yield on the investment portfolio was 5.83%, and the weighted
average life of the investment portfolio was approximately 3.9 years at March
31, 1995. The yield on the investment portfolio was 5.25% and the average
weighted life was 4.1 years in 1994.

At March 31, 1995, 8.85% of the mortgage-backed securities held by
United had remaining maturities for more than 10 years. However, unlike U.S.
Treasury and U.S. government, which have a lump sum payment at maturity,
mortgage-backed securities provide cash flows from regular principal and
interest payments and principal prepayments throughout the lives of the
securities. Mortgage-backed securities which are purchased at a premium
will generally suffer decreasing net yields as interest rates drop because home
owners tend to refinance their mortgages. Thus, the premium paid must be
amortized over a shorter period. Therefore, securities purchased at a discount
will obtain higher net yields in a decreasing interest rate environment. As
interest rates rise, the opposite will generally be true. Throughout 1994, a
period of increasing interest rates, fixed rate mortgage-backed securities have
not experienced heavy prepayments of principal and consequently, the average
life of this security has not been unduly shortened. If interest rates begin
to fall, prepayments will increase. Approximately $10,000,000 of United's
mortgage-backed securities earn interest at floating rates and reprice within
one year, and accordingly are less susceptible to declines in value should
interest rates increase.

DEPOSITS

United's lending and investment securities are funded almost entirely
by core deposits, approximately $42,419,000 of which are demand and savings
deposits at March 31, 1995. United's average noninterest bearing deposits have
increased from $12,957,000, or 20.85% of average total deposits, for 1994, to
$13,022,000, or 21.55% of average total deposits, for March 31, 1995. United
does not accept brokered deposits.

For the three months ended March 31, 1995, average total deposits were
$60,436,000, down 2.74%, compared with 1994. Total deposits at March 31, 1995
were $58,787,000, down $4,495,000, or 7.10%, compared to December 31, 1994. The
decrease was largely due to an outflow of public fund deposits. For three
months ended March 31, 1995, the average balance of time certificates of
deposits decreased by $777,000, or 4.50%, while interest bearing transaction
accounts (money market and NOW) and savings accounts decreased $988,000, or
3.09%, over the average balances of 1994.

ANNUAL COMPARISON

The following discussion highlights the major changes affecting the
operations and financial condition of United at December 31, 1994 and 1993,
and for the years ended December 31, 1994, 1993 and 1992.

PERFORMANCE SUMMARY

United's net earnings for the year ended December 31, 1994 were
$359,000, compared with $606,000 in net earnings for 1993, a 40.76% decrease.
The decrease in 1994 was attributable almost entirely to costs related to the
opening of RB&T's new branch on Sweetwater Boulevard in Sugar Land, Texas.
Although the branch was opened in April of 1994, most of the staff was hired in
early 1994. These start-up costs were anticipated and were within budgeted
amounts. Net earnings increased from $477,000 in 1992 to $606,000 in 1993, a
27.04% increase. This increase was primarily due to an improvement in the net
interest margin. Each of the other factors contributing to the increase in net
earnings are insignificant when taken individually.

On a weighted average per share basis, net earnings per share of
United Common Stock was $1.33, $2.38 and $1.89 for 1994, 1993 and 1992,
respectively. Net earnings per share of United Common Stock for 1992 was
affected by the issuance of 20,117 new shares of United Common Stock in April
1992.

Two industry measures of the performance by a banking institution are
its return on average assets and return on average equity. Return on average
assets ("ROA") measures net earnings in relation to average total assets and
generally indicates an institution's ability to use its assets profitably.
During 1994, United's ROA was .53%, compared with .91% in 1993, and .79% in
1992.

Return on average common equity ("ROE") is determined by dividing
annual net earnings by average common shareholder's equity and indicates how
effectively an institution can generate net income on the capital invested by
its shareholders. During 1994, United's ROE was 9.58%, compared with 17.49% in
1993, and 16.56% in 1992.

NET INTEREST INCOME AND NET INTEREST MARGIN

Net interest income represents the amount by which interest income on
interest-earning assets, including investment securities and loans, exceeds
interest paid on interest-bearing liabilities, including deposits and other
borrowed funds. Net interest income is the principal source of United's
earnings. Interest rate fluctuations, as well as changes in the amount and type
of earning assets and liabilities, combine to affect net interest income.

United's net interest income for 1994 was $2,627,000 compared with
$2,720,000 for 1993. The slight decrease in net interest income was primarily
due to a significant reduction in home mortgage warehouse lines of credit and
lower yields on mortgage backed securities. For 1994, the yield on
interest-earning assets was 6.59%, a decrease of 34 basis points from 6.93% for
1993. Total funding costs decreased 14 basis points from 2.90% to 2.76%
between the two years. The declines in the yield on interest-earning assets
and total funding costs were due to lower loan demand and a reduction in higher
yielding time deposits. For 1994, the net interest margin decreased 17 basis
points from 4.50% in 1993 to 4.33%.

Net interest income for 1993 increased $260,000, or 10.57%, over the
$2,460,000 recorded for 1992. This improvement in net interest income was
mainly due to a decline in total interest expense of $333,000 in 1993 compared
with 1992, despite a $4,114,000 increase in average interest-bearing deposits
between the two periods.

-59-
<PAGE> 66

For 1993, the yield on interest earning assets was 6.93%, a decrease of 101
basis points from 7.94% for 1992. Total funding costs decreased 95 basis
points from 3.85% to 2.90% between the two years. The declines in the yield on
interest earning assets and total funding costs were due to lower prevailing
interest rates during 1993. For 1993, the net interest margin decreased 8
basis points from 4.58% in 1992 to 4.50%. This decrease was partly a result of
funding costs increasing at a faster rate than the increase in the rate earned
on earning assets.

To provide a more in-depth analysis of net interest income, the
following average balance sheets and net interest income analysis detail the
contribution of interest-earning assets to overall net interest income and the
impact of the cost of funds.

THREE MONTHS ENDED MARCH 31,
----------------------------------------------------------------------------------
1995 1994
----------------------------------------------------------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST YIELD/RATE BALANCE INTEREST YIELD/RATE
--------- --------- ---------- --------- --------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Deposits in financial
institutions . . . . . . . $ 199 2 4.08% 199 2 4.08%
Federal funds sold . . . . . 3,728 54 5.87 9,558 76 3.22
Investment securities . . . . 30,196 434 5.83 26,638 331 5.04
Loans, net of unearned
discount . . . . . . . . 24,852 562 9.17 25,278 549 8.81
Total interest-earning ------- ------ ------ ----
assets . . . . . . . . . . 58,975 1,052 7.23% 61,673 958 6.30%
Noninterest-earning assets:
Cash and due from banks . . . 2,639 2,986
Premises and equipment, net . 2,624 2,342
Other assets . . . . . . . . 1,516 1,348
Allowance for credit
losses . . . . . . . . . . (153) (215)
------- --------
Total assets . . . . . . . . $65,601 68,134
======= ========
Interest-bearing liabilities:
Deposits:
Demand deposits . . . . . $15,549 67 1.75% 14,537 64 1.79%
Savings deposits . . . . . 15,394 119 3.14 16,566 115 2.82
Certificates and other
time deposits . . . . . 16,471 168 4.14 19,207 149 3.15
Other short term
borrowings . . . . . . . . 614 18 11.89 639 7 4.44
------- ----- ------- ------
Total interest-bearing
liabilities . . . . . . . . 48,028 372 3.14% 50,949 335 2.67%
Noninterest-bearing ------- ----- ------- ------
liabilities:
Demand deposits . . . . 13,022 12,418
Other liabilities . . . 251 306
Shareholders' equity . . . . 4,300 4,461
------- -------
Total noninterest-bearing
liabilities and
shareholders' equity . . . 17,573 17,185
------- -------
Total liabilities and
shareholders' equity . . . $65,601 68,134
======= =======
Interest rate spread(1) . . . 4.09% 3.62%
Net interest margin(2). . . . $680 4.68% $623 4.10%
==== ====
Net interest margin
(tax equivalent
basis)(3) . . . . . . . . . $686 4.72% $628 4.13%
==== ====
</TABLE>

_________________

(1) The interest rate spread is the difference between the average yield
on interest-earning assets and the average rate paid on
interest-bearing liabilities.

(2) The net interest margin is equal to net interest income divided by
average total interest-earning assets.

(3) In order to make pre-tax income and resultant yields on tax-exempt
investments and loans comparable to those on taxable investments and
loans, a tax-equivalent adjustment is made equally to interest income
and income tax expense with no effect on after tax income. The tax
equivalent adjustment has been computed using a federal income tax
rate of 34% and has increased interest income by $6,000 and $5,000
for the three months ended March 31, 1995 and 1994, respectively.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
1994 1993 1992
------------------------------- ------------------------------- ------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST YIELD/RATE BALANCE INTEREST YIELD/RATE BALANCE INTEREST YIELD/RATE
--------- --------- ---------- --------- --------- ---------- ------- -------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning
assets:
Deposits in financial
institutions . . . . . . $ 199 $ 7 3.52% $ 124 $ 4 3.23% $ 51 $ 2 3.92%
Federal funds sold . . . . 7,399 304 4.11 4,145 127 3.06 4,087 142 3.47
Investment securities . . . 28,225 1,482 5.25 28,841 1,615 5.60 25,161 1,729 6.87
Loans, net of unearned
discount . . . . . . . 24,908 2,208 8.86 27,325 2,443 8.94 24,363 2,389 9.81
------- ------- ------- ------- ------- -------
Total interest-earning
assets . . . . . . . . 60,731 4,001 6.59% 60,435 4,189 6.93% 53,662 4,262 7.94%
Noninterest-earning
assets:
Cash and due from banks . . 2,794 2,894 4,087
Premises and equipment,
net . . . . . . . . . . . 2,571 2,053 2,123
Other assets . . . . . . . 1,553 1,193 956
Allowance for credit
losses . . . . . . . . . (200) (245) (242)
------- ------- -------
Total assets . . . . . . . $67,449 $66,330 60,586
======= ======= =======
Interest-bearing
liabilities:
Deposits:
Demand deposits . . . . $15,501 $ 308 1.99% $14,422 $ 311 2.16% $12,506 $ 419 3.35%
Savings deposits . . . . 16,430 427 2.60 16,758 465 2.77 14,698 543 3.69
Certificates and
other time
deposits . . . . . . . 17,248 594 3.44 18,907 655 3.46 18,769 799 4.26
Other short term
borrowings . . . . . . . 629 45 7.15 612 38 6.21 774 41 5.30
------- ------- ------- ------ ------- -------
Total interest-bearing
liabilities . . . . . . . 49,808 1,374 2.76% 50,699 1,469 2.90% 46,747 1,802 3.85%
------- ------- ------- ------- ------- -------
Noninterest-bearing
liabilities:
Demand deposits . . . 12,957 11,223 9,989
Other liabilities . . 316 344 390
Shareholders' equity . . . 4,368 4,064 3,460
------- ------- -------
Total noninterest-
bearing liabilities
and shareholders'
equity . . . . . . . . . 17,641 15,631 13,839
------- ------- -------
Total liabilities and
shareholders' equity . . $67,449 $66,330 $60,586
======= ======= =======
Interest rate
spread(1) . . . . . . . . 3.83% 4.03% 4.09%
Net interest margin (2) . . $ 2,627 4.33% $ 2,720 4.50% $ 2,460 4.58%
======= ======= =======
Net interest margin
(tax-equivalent $ 2,676 4.41% $ 2,756 4.56% $ 2,483 4.63%
basis)(3) . . . . . . . ======= ======= =======

</TABLE>
________________

(1) The interest rate spread is the difference between the average yield
on interest-earning assets and the average rate paid on
interest-bearing liabilities.

(2) The net interest margin is equal to net interest income divided by
average total interest-earning assets.

-60-
<PAGE> 67
The following rate/volume analysis shows the portions of the net
change in interest income due to changes in volume or rate. The changes in
interest due to both rate and volume in the rate/volume analysis table have
been allocated to volume or rate change in proportion to the absolute amounts
of the change in each.

<TABLE>
<CAPTION>
MARCH 31,1995 VS. MARCH 31, 1994
INCREASE (DECREASE)
DUE TO CHANGES IN:
--------------------------------
VOLUME RATE TOTAL
--------- ------ ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-earning assets:
Deposits in financial institutions . . $ 0 $ 0 $ 0
Federal funds sold . . . . . . . . . . (47) 25 (22)
Investment securities . . . . . . . . . 44 59 103
Loans, net of unearned interest . . . . (9) 22 13
------ ------ ------
Total interest income . . . . . . . . . . (12) 106 94
------ ------ ------
Interest-bearing liabilities:
Demand deposits . . . . . . . . . . . . 5 (2) 3
Savings deposits . . . . . . . . . . . (8) 12 4
Certificates and other time deposits . (22) 41 19
------ ------ ------
Total deposits . . . . . . . . . . . . . (25) 51 26
Other short term borrowings . . . . . . . (0) 11 11
------ ------ ------
Total interest expense . . . . . . . . . (25) 62 37
------ ------ ------
Net interest income . . . . . . . . . . . $ 13 $ 44 $ 57
====== ====== ======
</TABLE>

<TABLE>
<CAPTION>
1994 VS. 1993 1993 VS. 1992
INCREASE (DECREASE) INCREASE (DECREASE)
DUE TO CHANGES IN: DUE TO CHANGES IN:
---------------------------- ----------------------------
VOLUME RATE TOTAL VOLUME RATE TOTAL
------ ------ ------ ------ ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Deposits in financial institutions . . $ 2 $ 1 $ 3 $ 3 $ (1) $ 2
Federal funds sold . . . . . . . . . . 100 77 177 2 (17) (15)
Investment securities . . . . . . . . . (34) (99) (133) 253 (367) (114)
Loans, net of unearned interest . . . . (216) (19) (235) 290 (236) 54
------ ------ ------ ------ ------ ------
Total interest income . . . . . . . . . . (148) (40) (188) 548 (621) (73)
------ ------ ------ ------ ------ ------
Interest-bearing liabilities:
Demand deposits . . . . . . . . . . . . 23 (26) (3) 64 (172) (108)
Savings deposits . . . . . . . . . . . (9) (29) (38) 76 (154) (78)
Certificates and other time deposits . (57) (4) (61) 6 (150) (144)
------ ------ ------ ------ ------ ------
Total deposits . . . . . . . . . . . . . (43) (59) (102) 146 (476) (330)
Other short term borrowings . . . . . . . 1 6 7 (9) 6 (3)
------ ------ ------ ------ ------ ------
Total interest expense . . . . . . . . . (42) (53) (95) 137 (470) (333)
------ ------ ------ ------ ------ ------
Net interest income . . . . . . . . . . . $ (106) $ 13 $ (93) $ 411 $ (151) $ 260
====== ====== ====== ====== ====== ======
</TABLE>

NONINTEREST INCOME

Noninterest income for the year ended December 31, 1994 was $874,000,
a 9.71% decrease from $968,000 in noninterest income for 1993. The reduction
in noninterest income was primarily due to a reduction of $75,000 in service
charge income and a $55,000 gain on the sale of securities in 1993.
Noninterest income for the year ended December 31, 1992 was $977,000. The
primary reason for the .92% decrease in noninterest income between 1992 and
1993 was a decrease in securities gains of $90,000, which was partially offset
by an increase in customer service fees of $72,000.

NONINTEREST EXPENSE

Noninterest expense for the year ended December 31, 1994 was
$2,944,000, an increase of $358,000, or 13.84%, compared with noninterest
expenses of $2,586,000 for the year ended December 31, 1993. The majority of
the additional noninterest expenses for 1994 can be attributed to opening the
new branch on Sweetwater Boulevard in Sugar Land, Texas. The opening of the
new branch affected almost all categories of noninterest expense. Noninterest
expense increased $101,000, or 4.06%, from 1992 to 1993 primarily as a result
of increases in salaries and employee benefits of $79,000.

INCOME TAXES

United provided for federal income taxes of $183,000 for the year
ended December 31, 1994, compared with $305,000 for 1993 and $220,000 for 1992.
The effective tax rates for the years 1994, 1993 and 1992 was 33.8%, 32.2% and
35.8%, respectively. United had a deferred tax expense of $14,000 in 1994
compared with a deferred tax credit of $27,000 in 1993 and a deferred tax
expense of $6,000 in 1992. In 1994, the deferred tax expense was the result of
temporary differences relating to allowance for loan losses, depreciation and
valuation of other real estate. The 1993 deferred tax credit was the result of
temporary differences relating primarily to the

-61-
<PAGE> 68

allowance for loan losses, depreciation and valuation of other real estate.
The 1992 deferred tax expense was the result of temporary differences relating
primarily to the allowance for loan losses, depreciation and valuation of other
real estate.

Effective January 1, 1993, United adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (Statement 109) and
---------------------------
has reported the cumulative effect of that change in method of accounting for
income taxes in the 1993 statement of earnings. Statement 109 requires a
change from the deferred method of accounting for income taxes to the asset and
liability method of accounting for income taxes. Under the asset and liability
method of Statement 109, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. When management determines that it is more likely than
not that a deferred tax asset will not be realized, a valuation allowance must
be established. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities or a change in tax rates is recognized in
income in the period that includes the enactment date.

IMPACT OF INFLATION

The effects of inflation on the local economy and on United's
operating results have been relatively modest for the past several years. Since
substantially all of United's assets and liabilities are monetary in nature,
such as cash, investments, loans and deposits, their values are less sensitive
to the effects of inflation than to changing interest rates, which do not
necessarily change in accordance with inflation rates. United tries to control
the impact of interest rate fluctuations by managing the relationship between
its interest rate sensitive assets and liabilities. SEE "INTEREST RATE
SENSITIVITY AND LIQUIDITY" BELOW.

LOAN PORTFOLIO

During 1994, loans decreased $4,934,000, or 17.12%, from $28,820,000
at December 31, 1993 to $23,886,000 at December 31, 1994, and during 1993,
loans increased $4,002,000, or 16.13%, from $24,818,000 at December 31, 1992.
During 1992, loans increased $930,000, or 3.89%, from $23,888,000 at December
31, 1991. During 1991, loans increased $3,081,000, or 14.81%, from $20,807,000
at December 31, 1990 to $23,888,000.

At December 31, 1994, loans represented 37.75% of deposits and 34.98%
of total assets. Loans as a percentage of deposits was 46.00% at December 31,
1993 compared with 41.12% at December 31, 1992. Loans as a percentage of total
assets was 42.41% at December 31, 1993 compared with 38.08% at December 31,
1992. In 1993, RB&T began its mortgage warehouse loan program which, along
with an increase in real estate loans, produced the increase in loans from 1992
to 1993. The loan decrease during 1994 was due primarily to the reduction in
the mortgage warehouse lines of credit as a result of the slowdown in mortgage
refinancing. Loans as a percentage of deposits increased to 42.19% at December
31, 1991 from 37.75% at December 31, 1990. Loans as a percentage of total
assets increased to 39.11% at December 31, 1991 from 34.56% at December 31,
1990.

RB&T ceased activity in its mortgage warehouse loan program on April
1, 1995. As of April 30, 1995, RB&T had only approximately $600,000 in loans
outstanding pursuant to its mortgage warehouse loan program. Management has
decided to allow all of the loans in this program to run off by the end of May
1995 and will not engage again in this type of lending activity.

-62-
<PAGE> 69
The following tables summarize the loan portfolio of United by type of
loan as of December 31, 1990 through 1994 and March 31, 1995.
<TABLE>
<CAPTION>
March 31, DECEMBER 31,
-------------- ---------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990
-------------- -------------- --------------- -------------- --------------- ---------------
AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT %
------- ----- ------- ----- ------- ----- ------- ----- ------- ----- ------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial,
financial
and industrial . $ 8,183 29.5% $ 8,084 33.9% $ 8,027 27.9% $ 7,332 29.5% $ 7,302 30.6% $ 6,904 33.2%
Real estate
mortgage:
Commercial . . . 5,895 21.3 5,396 22.6 4,907 17.0 7,342 29.6 9,367 39.2 8,548 41.1
Residential . . . 9,684 34.9 6,816 28.5 10,489 36.4 4,586 18.5 3,458 14.5 3,213 15.4
Real estate
construction . . 1,262 4.6 958 4.0 2,506 8.7 2,850 11.5 1,735 7.2 296 1.4
Installment . . . . 2,687 9.7 2,632 11.0 2,891 10.0 2,708 10.9 2,026 8.5 1,846 8.9
------- ---- ------- ---- ------- ----- ------- ----- ------- ----- ------- ----
Total . . . . . . . $27,711 100.0% $23,886 100.0% $28,820 100.0% $24,818 100.0% $23,888 100.0% $20,807 100.0%
======= ===== ======= ===== ======= ===== ======= ===== ======= ===== ======= =====
</TABLE>
RB&T is a community bank serving the needs of its primary market area
of Fort Bend County and Southwest Harris County. RB&T primarily makes its
loans to farmers, ranchers and small businesses in the area.

Each loan officer has an assigned lending limit to be exercised under
the guidelines of RB&T's loan policy. All loan requests in excess of $100,000
are submitted to the Director's Loan Committee of RB&T for approval. The
committee has scheduled meetings twice weekly or as needed. There are four
outside directors on the Directors Loan Committee as well as RB&T's President
and Executive Vice President.

The maturity ranges of the loan portfolio and the amount of loans with
predetermined interest rates and floating rates in each maturity range as of
March 31, 1995 and December 31, 1994 are summarized in the following tables.
<TABLE>
<CAPTION>
MARCH 31, 1995
---------------------------------------------------------
DUE AFTER ONE
DUE WITHIN THROUGH DUE AFTER
ONE YEAR FIVE YEARS FIVE YEARS TOTAL
---------- ---------- ---------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Commercial, financial, and industrial . . . . $ 5,082 $ 2,158 $ 943 $ 8,183
Real estate mortgage and construction . . . . 5,546 6,923 4,372 16,841
Installment . . . . . . . . . . . . . . . . . 284 2,377 26 2,687
--------- --------- -------- ---------
Total . . . . . . . . . . . . . . . . . . $ 10,912 $ 11,458 $ 5,341 $ 27,711
========= ========= ======== =========
Loans with a predetermined interest rate . . 3,224 10,290 4,858 18,372
Loans with a floating interest rate . . . . . $ 7,688 $ 1,168 $ 483 $ 9,339
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1994
---------------------------------------------------------
DUE AFTER ONE
DUE WITHIN THROUGH DUE AFTER
ONE YEAR FIVE YEARS FIVE YEARS TOTAL
---------- ---------- ---------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Commercial, financial, and industrial . . . . $ 5,059 $ 2,106 $ 919 $ 8,084
Real estate mortgage and construction . . . . 2,516 6,233 4,421 13,170
Installment . . . . . . . . . . . . . . . . . 1,370 1,262 0 2,632
--------- --------- -------- ---------
Total . . . . . . . . . . . . . . . . . . $ 8,945 $ 9,601 $ 5,340 $ 23,886
========= ========= ======== =========
Loans with a predetermined interest rate . . 4,514 8,691 4,840 18,045
Loans with a floating interest rate . . . . . $ 4,431 $ 910 $ 500 $ 5,841
</TABLE>

As of December 31, 1994, RB&T had loans totalling $2,433,000, or
10.19% of total loans, to the agricultural industry. As of December 31, 1994,
there were no loans classified as highly-leveraged transactions.

NONPERFORMING LOANS AND ASSETS

Nonperforming assets (nonperforming loans and real estate acquired by
foreclosure) at December 31, 1994 were $512,000, or 0.75% of total assets,
compared with $710,000, or 1.04% of total assets, at December 31, 1993,
$655,000, or 1.01% of total assets, at December 31, 1992, $1,807,000, or 2.96%
of total assets, at December 31, 1991, and $1,571,000, or 2.61% of total
assets, at December 31, 1990.

-63-
<PAGE> 70

When a loan is 90 days past due or management determines that
collection of interest and/or principal is doubtful, the loan is transferred to
nonaccrual status. Nonaccrual status means the interest is not accrued on the
loan and is only recorded when the interest is actually collected. United had
no restructured loans at December 31, 1994, 1993, 1992, 1991 or 1990. United
had no nonperforming loans (nonaccrual loans and restructured loans) at
December 31, 1994, compared with $106,000, or 0.37% of loans, at December 31,
1993, $361,000, or 1.45% of loans, at December 31, 1992, $745,000, or 3.12% of
loans, at December 31, 1991, and $639,000, or 3.07% of loans, at December 31,
1990. At December 31, 1994, United had no loans past due 90 days or more and
still accruing interest, compared with $1,000 at December 31, 1993, $59,000 at
December 31, 1992, $155,000 at December 31, 1991 and $783,000 at December 31,
1990. Past due loans, including nonaccrual loans are reviewed regularly by the
Directors' Loan Committee and at the regular meetings of the Board of Directors
of RB&T.

Real estate acquired by foreclosure at December 31, 1994 totaled
$512,000. Foreclosed real estate properties are actively being marketed. Real
estate acquired by foreclosure at December 31, 1993 totaled $604,000, $294,000
at December 31, 1992, $1,062,000 at December 31, 1991 and $932,000 at December
31, 1990. The decrease in real estate acquired by foreclosure during 1994 is
the result of several sales during the year.

On an ongoing basis, United updates its appraisals on loans secured by
real estate, particularly those categorized as nonperforming loans and
potential problem loans. In instances where updated appraisals reflect reduced
collateral values, an evaluation of the borrower's overall financial condition
is made to determine the need, if any, for possible writedowns, appropriate
additions to the allowance for credit losses or treatment as an in-substance
foreclosure.

The following table presents information regarding nonperforming loans
and assets as of March 31, 1995 and as of December 31, for the years 1990
through 1994.

March 31, DECEMBER 31,
--------- ------------------------------------------------------------
1995 1994 1993 1992 1991 1990
--------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Nonaccrual loans (1) . . . . . . . . . . . . $ 0 $ 0 $ 106 $ 361 $ 745 $ 639
Real estate acquired by foreclosure . . . . . 460 512 604 294 1,062 932
-------- -------- -------- -------- -------- --------
Total nonperforming assets . . . . . . . . . $ 460 $ 512 $ 710 $ 655 $ 1,807 $ 1,571
======== ======== ======== ======== ======== ========
Nonperforming loans to total loans . . . . . 0.00% 0.00% 0.37% 1.45% 3.12% 3.07%
Nonperforming assets to total assets . . . . 0.71% 0.75% 1.04% 1.01% 2.96% 2.61%
Accruing loans past due 90 days or more . . . $ 0 $ 0 $ 1 $ 59 $ 155 $ 783
</TABLE>

_________________

(1) Interest income of approximately $0 and $10,300 would have been
recorded as of March 31, 1995 and the year of 1994, respectively, on
nonperforming loans if the loans had been current in accordance with
their original terms. In addition, interest income of approximately
$28,700, $30,000, $63,000 and $90,000 would have been recorded in
each of 1993 through 1990, respectively, on nonperforming loans if
the loans had been current in accordance with their original terms.
Interest income recorded on these nonperforming loans for any of
these periods was immaterial.

In May 1993, the FASB issued SFAS No. 114, "Accounting by Creditors for
Impairment of a Loan", which addresses the accounting by creditors for
impairment of certain loans, as defined. This pronouncement was effective for
fiscal years beginning after December 15, 1994. United is required to
implement SFAS No. 114 for the year ending December 31, 1995. Implementation
of this pronouncement should have no material effect on United's financial
statements.

-64-
<PAGE> 71

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses is a reserve established through
charges to earnings in the form of a provision for credit losses. Management
has established an allowance for credit losses which it believes is adequate
for estimated losses in its loan portfolio. Based on an evaluation of the loan
portfolio, management presents a quarterly review of the allowance for credit
losses to United's Board of Directors, indicating any changes in the allowance
since the last review and any recommendations as to adjustments in the
allowance. In making its evaluation, management considers the diversification
by industry of United's commercial loan portfolio, the effect of changes in the
local real estate market on collateral values, the results of recent regulatory
examinations, the effects on the loan portfolio of current economic indicators
and their probable impact on borrowers, the amount of chargeoffs for the
period, the amount of nonperforming loans and related collateral security, the
evaluation of its loan portfolio by management and the annual examination of
United's financial statements by its independent auditors. Chargeoffs occur
when loans are deemed to be uncollectible.

United follows a loan review program to evaluate the credit risk in its
commercial loan portfolio for substantially all commercial loans and real
estate loans. Through the loan review process, United maintains an internally
classified loan list which, along with the delinquency list of loans, helps
management assess the overall quality of the loan portfolio and the adequacy of
the allowance for credit losses. In addition to its internally classified loan
list and delinquency list of loans, United maintains a separate "watch list"
which further aids United in monitoring its loan portfolio. The "watch list"
is revised monthly after reviewing past due loans and other loans that the
lending officers believe demonstrate credit weaknesses. Based on established
loan procedures, United assigns a rating to all loans regardless of size. The
ratings are assigned in accordance with an established loan grading system
which is set forth in United's loan policy. The rating for each loan depends
on factors such as the form or amount of collateral and the borrower's
compliance with repayment terms. At December 31, 1994, United had loans
totalling $261,000 on its "watch list". All of the loans on the "watch list" as
of December 31, 1994 are current.

In order to determine the adequacy of the allowance for credit losses,
management considers the risk classification or delinquency status of loans and
other factors. Management also establishes specific allowances for credits
which management believes require reserves greater than those allocated
according to their classification or delinquent status. The reserve for loan
losses is analyzed and reviewed on a quarterly basis. Each month, United
charges to operating expense an amount necessary to maintain the balance in the
allowance for credit losses at a level that is deemed to be adequate to absorb
all inherent loan losses. The provision for credit losses added to the
allowance each month may not correlate precisely with changes in the ratio of
the allowance to nonperforming assets because the timing of the provision may
vary from the reclassification of an asset as nonperforming.

United believes that the allowance for credit losses at December 31,
1994 is adequate to cover losses inherent in the portfolio as of such date.
However, there can be no assurance that United will not sustain losses in
future periods, which could be substantial in relation to the size of the
allowance at December 31, 1994.

For the year ended December 31, 1994, net loan chargeoffs totaled
$109,000, or 0.44% of average loans outstanding for the period, compared with
$145,000, or 0.53% of average loans outstanding during 1993, and $371,000, or
1.52% of average loans outstanding during 1992. For the year ended December
31, 1991, net loan chargeoffs totaled $193,000, or 0.79% of average loans
outstanding for the period, compared with $216,000, or 0.89% of average loans
outstanding during 1990. During the year ended December 31, 1994, United
recorded a $15,000 provision to its allowance for credit losses, compared with
a $155,000 provision for 1993, a $337,000 provision for 1992, a $158,000
provision for 1991, and a $204,000 provision for 1990. At December 31, 1994,
the allowance totaled $142,000, or 0.59% of period-end loans, compared with
$236,000 or 0.82% of period-end loans at December 31, 1993 and $226,000, or
0.91% of period-end loans, at December 31, 1992.

-65-
<PAGE> 72

The following table presents, for the periods indicated, an analysis of
the allowance for credit losses and other related data.

THREE
MONTHS
ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
--------- ----------------------------------------------------------
1995 1994 1993 1992 1991 1990
--------- ------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Average loans outstanding . . . . . $24,852 $24,908 $ 27,325 $ 24,363 $24,563 $24,268
Loans outstanding at period-end . . 27,711 23,886 28,820 24,818 23,888 20,807
Allowance for credit losses at
beginning of period . . . . . . . 142 236 226 260 295 307
Chargeoffs:
Commercial, financial and
industrial . . . . . . . . . . . 4 21 53 17 113 147
Real estate mortgage . . . . . . 0 108 93 356 115 81
Installment . . . . . . . . . . . 1 9 8 8 12 3
------- ------- -------- -------- ------- -------
Total chargeoffs . . . . . . . 5 138 154 381 240 231
Recoveries:
Commercial, financial and
industrial . . . . . . . . . . . 0 7 8 9 29 13
Real estate mortgage . . . . . . 8 20 1 0 9 0
Installment . . . . . . . . . . . 0 2 0 1 9 2
------- ------- -------- -------- ------- -------
Total recoveries . . . . . . . 8 29 9 10 47 15
------- ------- -------- -------- ------- -------
Net chargeoffs . . . . . . . . . . (3) 109 145 371 193 216
Provision for credit losses . . . . 10 15 155 337 158 204
------- ------- -------- -------- ------- -------
Allowance for credit losses at end
of period . . . . . . . . . . . . $ 155 $ 142 $ 236 $ 226 $ 260 $ 295
======= ======= ======== ======== ======= =======
Ratio of allowance to average loans 0.62% 0.57% 0.86% 0.93% 1.06% 1.22%
Ratio of allowance to period-end
loans . . . . . . . . . . . . . . 0.56% 0.59% 0.82% 0.91% 1.09% 1.42%
Ratio of net chargeoffs to average
loans . . . . . . . . . . . . . . (0.01)% 0.44% 0.53% 1.52% 0.79% 0.89%
Ratio of allowance to period-end
nonperforming assets (1) . . . . 33.70% 27.73% 33.19% 31.65% 13.25% 12.53%

</TABLE>

_________________

(1) Included in nonperforming assets are loans past due 90 days or more and
still accruing of $0 at March 31, 1995, and $0, $1,000, $59,000,
$155,000, and $783,000 at December 31, 1994, 1993, 1992, 1991, and
1990 respectively.

ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES

The following tables describe the allocation of the allowance for
credit losses among various categories of loans and certain other information
as of the dates indicated. The allocation is made for analytical purposes and
is not necessarily indicative of the categories in which future loan losses may
occur. The total allowance is available to absorb losses from any segment of
loans.

-66-
<PAGE> 73

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
---------------------------- --------------------------------------------------------------
1995 1994 1993
---------------------------- ----------------------------- -----------------------------
PERCENT PERCENT PERCENT
OF OF OF
LOANS LOANS LOANS
PERCENT TO PERCENT TO PERCENT TO
OF TOTAL OF TOTAL OF TOTAL
AMOUNT ALLOWANCE LOANS AMOUNT ALLOWANCE LOANS AMOUNT ALLOWANCE LOANS
------ ---------- ------ ------ --------- ----- ------ --------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance of Allowance
for credit losses
applicable to:
Commercial, financial
and industrial . . . . $ 39 24.7% 29.5% $ 23 16.2% 33.8% $101 42.8% 27.9%
Real estate mortgage
and construction . . . 79 51.3 60.8 72 50.7 55.2 98 41.5 62.1
Installment . . . . . . 11 7.1 9.7 12 8.5 11.0 10 4.2 10.0
Unallocated . . . . . . 26 16.9 0.0 35 24.6 - 27 11.5 -
---- ----- ----- ---- ----- ----- ---- ----- -----
Total . . . . . . . . . $155 100.0% 100.0 $142 100.0% 100.0% $236 100.0% 100.0%
==== ===== ===== ==== ===== ===== ==== ===== =====
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------------------------------------------------------------
1992 1991 1990
---------------------------- ------------------------- ----------------------------
PERCENT PERCENT PERCENT
OF OF OF
LOANS LOANS LOANS
PERCENT TO PERCENT TO PERCENT TO
OF TOTAL OF TOTAL OF TOTAL
AMOUNT ALLOWANCE LOANS AMOUNT ALLOWANCE LOANS AMOUNT ALLOWANCE LOANS
------ --------- ----- ------ --------- ----- ------ --------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance of Allowance
for credit losses
applicable to:
Commercial, financial
and industrial . . . . $ 75 33.2% 29.5% $ 87 33.5% 30.6% $ 97 32.9% 33.2%
Real estate mortgage
and construction . . . $128 56.6 59.6 106 40.8 60.9 162 54.9 57.9
Installment . . . . . . 7 3.1 10.9 9 3.4 8.5 10 3.4 8.9
Unallocated . . . . . . 16 7.1 - 58 22.3 - 26 8.8 -
---- ----- ----- ---- ----- ----- ---- ----- -----
Total . . . . . . . . . $226 100.0% 100.0% $260 100.0% 100.0% $295 100.0% 100.0%
==== ===== ====== ==== ===== ===== ==== ===== =====
</TABLE>

INVESTMENTS

Effective January 1, 1994, United adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt and
----------------------------------------------
Equity Securities (Statement 115). At the date of purchase, United is required
- -----------------
to classify debt and equity securities into one of three categories:
held-to-maturity, trading or available-for-sale. At each reporting date, the
appropriateness of the classification is reassessed. Investments in debt
securities are classified as held-to-maturity and measured at amortized cost in
the financial statements only if management has the positive intent and ability
to hold those securities to maturity. Securities that are bought and held
principally for the purpose of selling them in the near term are classified as
trading and measured at fair value in the financial statements with unrealized
gains and losses included in earnings. Investments not classified as either
held-to-maturity or trading are classified as available-for-sale and measured
at fair value in the financial statements with unrealized gains and losses
reported, net of tax, in a separate component of stockholders' equity until
realized.

The following table summarizes the carrying value and classification
of securities as of the dates shown.
<TABLE>
<CAPTION> DECEMBER 31,
MARCH 31, ---------------------------------------------
1995 1994 1993 1992
--------- --------- --------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Available-for-sale . . . . . . . . . . . . $ 14,367 $ 14,250 $ -- $ --
Held-to-maturity . . . . . . . . . . . . . 16,093 16,225 -- --
Investment securities . . . . . . . . . . . -- -- 26,187 28,117
--------- --------- --------- --------
Total . . . . . . . . . . . . . . . . . . . $ 30,460 $ 30,475 $ 26,187 $ 28,117
========= ========= ========= ========
</TABLE>
-67-
<PAGE> 74

The following table presents the amount of securities classified as
available-for-sale and their approximate fair values at March 31, 1995:

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAIN LOSS VALUE
------------- ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
U.S. Treasury securities . . . . . . . . $ 5,006 $ 1 $ 87 $ 4,920
U.S. Agency securities collateralized by
mortgage obligations . . . . . . . . . . 9,570 35 158 9,447
-------- -------- ------- -------
Total . . . . . . . . . . . . . . . . $ 14,576 $ 36 $ 245 $14,367
======== ======== ======= =======
</TABLE>
The following table presents the amount of securities classified as
held-to-maturity and their approximate fair values at March 31, 1995:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAIN LOSS VALUE
------------- ------------ ------------ -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
U.S. Treasury securities . . . . . . . . $ 5,437 $ -- $ 4 $ 5,433
U.S. Agency securities collateralized by
mortgage obligations . . . . . . . . . . 8,488 20 248 8,260
Municipal securities . . . . . . . . . . 1,969 -- 16 1,953
Bank certificates of deposit . . . . . . 199 -- -- 199
---------- ------- ------- --------
Total $ 16,093 $ 20 $ 268 $ 15,845
========== ======= ======= ========
</TABLE>
The following table presents the amount of securities classified as
available-for-sale and their approximate fair values at December 31, 1994:

The following table presents the amount of securities classified as
held-to-maturity and their approximate fair values at December 31, 1994:

Bank certificates of deposit . . . . . . 199 -- -- 199
---------- ------- ------- --------
Total $ 16,225 $ 3 $ 468 $ 15,760
========== ======= ======= ========
</TABLE>

The following table presents the amount of securities and their
approximate fair values at December 31, 1993 and 1992.

<TABLE>
<CAPTION>
1993 1992
------------------------------------------------- -------------------------------------------------
GROSS GROSS GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAIN LOSS VALUE COST GAIN LOSS VALUE
----------- ----------- ---------- ----------- ----------- ----------- ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury
securities . . . $ 5,014 $ 134 $ -- $ 5,148 $ 4,231 $ 100 $ -- $ 4,331
U.S. Agency
securities . . . -- -- -- -- 1,002 26 -- 1,028

U.S. Agency
securities
collateralized
by mortgage
obligations . . . 19,424 180 55 19,549 21,235 242 74 21,403
Municipal
securities . . . 1,550 35 -- 1,585 1,550 20 -- 1,570
Bank certificates
of deposit . . . 199 -- -- 199 99 -- -- 99
------- -------- -------- -------- -------- -------- ------- --------
$ 26,187 $ 349 $ 55 $ 26,481 $ 28,117 $ 388 $ 74 $ 28,431
======== ======== ======== ======== ======== ======== ======= ========
</TABLE>

For the past three years, the majority of United's investment
portfolio has been comprised of mortgage-backed securities. Mortgage-backed
securities are securities which have been developed by pooling a number of real
estate mortgages and are principally issued by federal agencies such as the
Federal National Mortgage Corporation and the Federal Home Loan Bank. These
securities are deemed to have high credit ratings, and minimum regular monthly
cash flows of principal and interest are guaranteed by the agencies. United
has no

-68-
<PAGE> 75
mortgage-backed securities that have been issued by non-agency entities.
Included in United's mortgage-backed securities at December 31, 1994 were
$7,000,000 in agency issued collateralized mortgage obligations.

At December 31, 1994, investment securities totaled $30,475,000, an
increase of $4,288,000 from $26,187,000 at December 31, 1993. At December 31,
1994, investment securities represented 48.16% of total deposits and 44.63% of
total assets. The increase in investment securities during 1994 relative to
loans is primarily the result of a decrease in mortgage warehouse loans. The
year end total of United's investment securities in 1993 decreased $1,930,000
from year end 1992 because of an increase in the loan portfolio for warehouse
mortgage loans.

The yield on the investment portfolio for 1994 was 5.25%, and the
weighted average life of the investment portfolio was approximately 4.1 years
at December 31, 1994. The yield on the investment portfolio was 5.60% in 1993
and 6.87% in 1992. The weighted average life of the investment portfolio was
approximately 3.1 years at December 31, 1993, compared with approximately 2.1
years at December 31, 1992.

The maturity distribution and weighted average yield of United's
investment portfolio as of March 31, 1995 and December 31, 1994 are summarized
in the following tables. Weighted average yield is calculated by dividing
income within each maturity range by the outstanding amount of the related
investment.

<TABLE>
<CAPTION>
MARCH 31, 1995
--------------------------------------------------------------------------------------
AFTER ONE BUT AFTER FIVE BUT AFTER
WITHIN ONE YEAR WITHIN FIVE YEARS WITHIN TEN YEARS TEN YEARS
---------------- ----------------- ----------------- -----------------
AMOUNT YIELD(1) AMOUNT YIELD(1) AMOUNT YIELD(1) AMOUNT YIELD(1) TOTAL
------ -------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury
securities . . . $6,446 5.92% $3,911 5.27% $ 0 --% $ 0 --% $10,357
U.S. Agency
securities
collateralized
by mortgage
obligations. . . 576 7.45 7,905 5.52 7,867 5.88 1,587 5.75 17,935
Municipal
securities . . . . 750 4.44 836 4.36 383 5.12 0 -- 1,969
Bank certificates
of deposit . . . 199 4.08 0 -- 0 -- 0 -- 199
------ ------- ------ ------ -------
Total . . . $7,971 6.13% $12,652 5.37% $8,250 5.85% $1,587 5.75% $30,460
====== ====== ====== ====== =======
</TABLE>
______________
(1) Yields on tax exempt obligations have been computed on a tax equivalent
basis.

<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------------------------------------------------------------
AFTER ONE BUT AFTER FIVE BUT AFTER
WITHIN ONE YEAR WITHIN FIVE YEARS WITHIN TEN YEARS TEN YEARS
---------------- ----------------- ----------------- -----------------
AMOUNT YIELD(1) AMOUNT YIELD(1) AMOUNT YIELD(1) AMOUNT YIELD(1) TOTAL
------ -------- ------ -------- ------ -------- ------ -------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury
securities . . . $4,951 5.44% $ 4,835 5.55% $ 0 --% $ 0 --% $ 9,786
U.S. Agency
securities
collateralized
by mortgage
obligations. . . 59 3.75 10,050 5.57 4,571 5.06 3,337 5.37 18,017
Municipal
securities . . . . 1,250 6.80 500 7.09 723 7.05 0 -- 2,473
Bank certificates
of deposit . . . 199 3.52 0 -- 0 -- 0 -- 199
------ ------- ------ ------ -------
Total . . . $6,459 5.63% $15,385 5.61% $5,294 5.34% $3,337 5.37% $30,475
====== ======= ====== ====== =======
</TABLE>
______________
(1) Yields on tax exempt obligations have been computed on a tax equivalent
basis.

At December 31, 1994, 18.52% of the mortgage-backed securities held by
United had remaining maturities of more than 10 years. However, unlike U.S.
Treasury and U.S. government agency securities, which have a lump sum payment
at maturity, mortgage-backed securities provide cash flows from regular
principal and interest payments and principal prepayments throughout the lives
of the securities. Mortgage-backed securities which are purchased at a premium
will generally suffer decreasing net yields as interest rates drop because home
owners tend to refinance their mortgages. Thus, the premium paid must be
amortized over a shorter period. Therefore, securities purchased at a discount
will obtain higher net yields in a decreasing interest rate environment. As
interest rates rise, the opposite will generally be true. Throughout 1994, a
period of increasing interest rates, fixed rate mortgage-backed securities have
not experienced heavy prepayments of principal and consequently, the average
life of this security has not been unduly shortened. If interest rates begin
to fall, prepayments will increase. Approximately $10,000,000 of United's
mortgage-backed securities earn interest at floating rates and reprice within
one year, and accordingly are less susceptible to declines in value should
interest rates increase.

-69-
<PAGE> 76
DEPOSITS

United's lending and investment activities are funded almost entirely
by core deposits, approximately $45,469,000 of which are demand and savings
deposits at December 31, 1994. United's average noninterest bearing deposits
have increased from $11,223,000, or 18.31% of average total deposits, for 1993,
to $12,957,000, or 20.85% of average total deposits, for 1994. For 1992,
average noninterest bearing deposits were $9,989,000, or 17.85% of average
total deposits. United does not accept brokered deposits.

During 1994, average total deposits were $62,136,000 up $826,000, or
1.35%, compared with the prior year. Total deposits at December 31, 1994 were
$63,282,000, up $629,000, or 1.00%, over December 31, 1993. The increase in
average total deposits in 1994 was primarily due to the opening of RB&T's new
branch on Sweetwater Boulevard in Sugar Land, Texas. For 1994, the average
balance of time certificates of deposits decreased by $1,659,000, or 8.77%,
while interest bearing transaction accounts (money market and NOW) and savings
accounts increased $751,000, or 2.41%, over the average balances of 1993.

Average total deposits increased $5,348,000, or 9.56%, from
$55,962,000 for 1992 to $61,310,000 for 1993, and year end balances increased
from $60,358,000 at December 31, 1992 to $62,653,000 at December 31, 1993, a
3.80% increase.

The average balances and weighted average rates paid on deposits for
the three months ended March 31, 1995 and for each of the years 1994, 1993 and
1992 are presented below.

<TABLE>
<CAPTION> THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
---------------------- -------------------------------------------------------------------
1995 1994 1993 1992
---------------------- ---------------------- --------------------- --------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE RATE BALANCE RATE BALANCE RATE BALANCE RATE
----------- --------- ----------- --------- ---------- -------- --------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Noninterest-bearing demand
deposits . . . . . . . . . . . . $ 13,022 -- $ 12,957 -- $ 11,223 -- $ 9,989 --
Interest-bearing demand deposits 15,549 1.75% 15,501 1.99% 14,422 2.16% 12,506 3.35%
Savings deposits . . . . . . . . 15,394 3.14 16,430 2.60 16,758 2.77 14,698 3.69
Time deposits . . . . . . . . . . 16,471 4.14 17,248 3.44 18,907 3.46 18,769 4.26
-------- -------- -------- --------
Total deposits . . . . . $ 60,436 2.38% $ 62,136 2.14% $ 61,310 2.33% $ 55,962 3.15%
======== ======== ======== ========
</TABLE>

The remaining maturity on certificates of deposit of $100,000 or
more is presented below at March 31, 1995 and at December 31, 1994, 1993 and
1992.

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
----------- ------------------------------------------------
MATURITY 1995 1994 1993 1992
-------- ----------- ----------- ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
3 months or less . . . . . $ 2,122 $ 1,114 $ 1,210 $ 747
4 to 6 months . . . . . . . 400 1,404 1,300 1,873
7 to 12 months . . . . . . 403 100 402 100
Over 12 months . . . . . . 600 500 500 1,660
----------- ----------- ---------- -----------
Total . . . . . . . . . . $ 3,525 $ 3,118 $ 3,412 $ 4,380
=========== =========== ========== ===========
</TABLE>

-70-
<PAGE> 77

INTEREST RATE SENSITIVITY AND LIQUIDITY

United's Funds Management Policy provides management with the
necessary guidelines for effective funds management, and United has established
a measurement system for monitoring its net interest rate sensitivity position.
United's objectives are generally to maintain a relatively balanced position
between interest rate sensitive assets and interest rate sensitive liabilities
with minor adjustments for rising or declining interest rate environments.

An interest rate sensitive asset or liability is one that, within a
defined time period, either matures or experiences an interest rate change in
line with general market interest rates. The management of interest rate risk
is performed by analyzing the maturity and repricing relationships between
interest-earning assets and interest-bearing liabilities at specific points in
time (``GAP'') and by analyzing the effects of interest rate changes on net
interest income over specific periods of time by projecting the performance of
the mix of assets and liabilities in varied interest rate environments.
Interest rate sensitivity reflects the potential effect on net interest income
of a movement in interest rates. A company is considered to be asset sensitive,
or having a positive GAP, when the amount of its interest-earning assets
maturing or repricing within a given period exceeds the amount of its
interest-bearing liabilities also maturing or repricing within that time
period. Conversely, a company is considered to be liability sensitive, or
having a negative GAP, when the amount of its interest-bearing liabilities
maturing or repricing within a given period exceeds the amount of its
interest-earning assets also maturing or repricing within that time period.
During a period of rising interest rates, a negative GAP would tend to
adversely affect net interest income, while a positive GAP would tend to result
in an increase in net interest income. During a period of falling interest
rates, a negative GAP would tend to result in an increase in net interest
income, while a positive GAP would tend to affect net interest income
adversely.

When analyzing its GAP position, United emphasizes the next twelve
month period. The following tables show the interest rate sensitivity GAPs for
six different time periods and the cumulative interest rate sensitivity GAPs
for the same periods as of March 31, 1995 and December 31, 1994. The following
assumptions were made in analyzing and classifying the time periods. First,
the prepayment rates on investment securities have not been computed or
reflected. Second, interest bearing demand deposits are subject to change on a
weekly basis based on market rates and, therefore, have been classified as
immediately sensitive to price change. Third, certificates of deposit have
characteristics similar to loans with maturities mainly within eighteen months.
The GAP table is developed based on a view of final maturity dates and
repricing on loans, securities and liabilities while placing all of these
instruments in the most current time segment if they are classified as variable
rate instruments.

<TABLE>
<CAPTION>
AS OF MARCH 31, 1995
---------------------------------------------------------------------------
0 TO 90 91 TO 180 181 TO 365 1 TO 5 OVER 5
DAYS DAYS DAYS YEARS YEARS TOTAL
------- --------- ---------- ------ ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Federal funds sold . . . . . . . 0 0 0 0 0 0
Investment securities . . . . . . $ 4,288 $ 2,184 $ 1,499 $12,652 $ 9,837 $30,460
Loans . . . . . . . . . . . . . 5,479 2,054 3,379 11,458 5,341 27,711
-------- ------- -------- ------- ------- -------
Total interest-earning
assets . . . . . . . . . . . 9,767 4,238 4,878 24,110 15,178 58,171
Interest-bearing liabilities:
Demand deposits . . . . . . . . . 15,734 0 0 0 0 15,734
Savings deposits . . . . . . . . 15,395 0 0 0 0 15,395
Certificates of deposit and
other time deposits . . . . . . 7,411 3,171 3,554 2,232 0 16,368
Federal funds purchased . . . . . 225 0 0 0 0 225
-------- ------- -------- ------- ------- -------
Total interest-bearing
liabilities . . . . . . . . . 38,765 3,171 3,554 2,232 0 47,722
-------- ------- -------- ------- ------- -------
Period GAP . . . . . . . . . . . . $(28,998) $ 1,067 $ 1,324 $21,878 $15,178 $10,449
======== ======= ======== ======= ======= =======
Cumulative GAP . . . . . . . . . . $(28,998) $(27,931) $(26,607) $(4,729) $10,449
Period GAP to total assets . . . . (45.00)% 1.66% 2.05% 33.95% 23.56%
Cumulative GAP to total assets . . (45.00)% (43.35)% (41.29)% (7.34)% 16.22%
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1994
---------------------------------------------------------------------------
0 TO 90 91 TO 180 181 TO 365 1 TO 5 OVER 5
DAYS DAYS DAYS YEARS YEARS TOTAL
------- --------- ---------- ------ ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Federal funds sold . . . . . . . $ 6,875 $ 0 $ 0 $ 0 $ 0 $ 6,875
Investment securities . . . . . . 3,753 2,481 225 15,385 8,631 30,475
Loans . . . . . . . . . . . . . 7,826 360 2,550 8,305 4,845 23,886
-------- ------- -------- ------- ------- -------
Total interest-earning
assets . . . . . . . . . . . 18,454 2,841 2,775 23,690 13,476 61,236
Interest-bearing liabilities:
Demand deposits . . . . . . . . . 15,816 0 0 0 0 15,816
Savings deposits . . . . . . . . 16,351 0 0 0 0 16,351
Certificates of deposit and
other time deposits . . . . . . 8,118 4,537 3,137 2,021 0 17,813
-------- ------- -------- ------- ------- -------
Total interest-bearing
liabilities . . . . . . . . . 40,285 4,537 3,137 2,021 0 49,980
-------- ------- -------- ------- ------- -------
Period GAP . . . . . . . . . . . . $(21,831) $(1,696) $ (362) $21,669 $13,476 $11,256
======== ======= ======== ======= ======= =======
Cumulative GAP . . . . . . . . . . $(21,831) $(23,527) $(23,889) $(2,220) $11,255
Period GAP to total assets . . . . (31.97)% (2.48) 0.53% 31.73% 19.73%
Cumulative GAP to total assets . . (31.97)% (34.45)% (34.98)% (3.25)% 16.48%

</TABLE>

-71-
<PAGE> 78

Shortcomings are inherent in any GAP analysis since certain assets and
liabilities may not move proportionally as interest rates change. Consequently,
as the interest rate environment has become more volatile, United's management
has increased its ability to forecast and monitor its net interest rate
sensitivity position and the effect of various interest rate environments on
earnings. Based on United's December 31, 1994 interest rate sensitivity
position, United estimates that a 100 basis point change in interest rates
would have no significant impact on its net interest income over a twelve month
period.

Liquidity involves United's ability to raise funds to support asset
growth or reduce assets to meet deposit withdrawals and other payment
obligations, to maintain reserve requirements and otherwise to operate United
on an ongoing basis. During the past three years, United's liquidity needs have
primarily been met by growth in core deposits, as previously discussed.
Although access to purchased funds from correspondent banks is available and
has been utilized on occasion to take advantage of investment opportunities,
United does not generally rely on, and there has not been a need to draw upon,
these external funding sources. The cash and federal funds sold position,
supplemented by amortizing investment and loan portfolios, have created an
adequate liquidity position.

CAPITAL RESOURCES

Bank regulatory authorities in the United States have issued
risk-based capital standards by which all bank holding companies and banks are
evaluated in terms of capital adequacy. These guidelines relate a banking
company's capital to the risk profile of its assets. These risk-based capital
standards, which must have been satisfied by December 31, 1992, required all
banks to have Tier 1 capital of at least 4% and total capital (Tier 1 and Tier
2) of at least 8% of risk-adjusted assets. Tier 1 capital includes common
shareholders' equity and qualifying perpetual preferred stock together with
related surpluses and retained earnings adjusted to remove the effects of
unrealized gains and losses from available-for-sale securities. In addition to
Tier 1 capital, Tier 2 capital may be comprised of limited life preferred
stock, qualifying debt instruments, and the reserves for credit losses.

Banking regulators have also issued leverage ratio requirements. The
leverage ratio requirement is measured as the ratio of Tier 1 capital to
adjusted average assets. The table below provides a comparison of United's
risk-based capital ratios and leverage ratio to the minimum regulatory
requirements for the periods indicated.

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31, MINIMUM
------------ ---------------------------------------------- REGULATORY
1995 1994 1993 1992 REQUIREMENTS
------------ ------------ ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Risk based capital ratios:
Tier 1 . . . . . . . . . . 15.87% 16.02% 13.27% 12.56% 4.00%
Total capital . . . . . . . 16.39% 16.52% 14.00% 13.33% 8.00%
Leverage ratio . . . . . . 7.34% 6.73% 6.27% 5.65% 3.00%
</TABLE>

Pursuant to FDICIA, each federal banking agency revised its risk-based
capital standards to ensure that those standards take adequate account of
interest rate risk, concentration of credit risk and the risks of
nontraditional activities, as well as reflect the actual performance and
expected risk of loss on multifamily mortgages. Also pursuant to FDICIA each
federal banking agency has promulgated regulations setting the levels at which
an insured institution would be considered "well capitalized", "adequately
capitalized", "undercapitalized", "significantly undercapitalized", and
"critically undercapitalized". Under FDICIA's risk based capital standards,
United is considered "well capitalized".

-72-
<PAGE> 79

RELATIONSHIPS WITH INDEPENDENT ACCOUNTANTS

Victoria's Board of Directors appointed Arthur Andersen LLP as
independent auditors for Victoria for the year ended December 31, 1994. Arthur
Andersen LLP has served as Victoria's independent auditors continuously since
Victoria's incorporation in 1973.

United's Board of Directors appointed Grant Thornton LLP as
independent auditors for United for the fiscal year ended December 31, 1994.
Grant Thornton LLP has served as United's independent auditors continuously
since 1977.

Victoria has been advised by Arthur Andersen LLP that Arthur Andersen
LLP does not have any direct financial interest or any material indirect
financial interest in Victoria other than arising from its employment as
auditors for Victoria.

United has been advised by Grant Thornton LLP that Grant Thornton LLP
does not have any direct financial interest or any material indirect financial
interest in United other than arising from its employment as auditors for
United.

It is expected that representatives of Grant Thornton LLP will be
present at the Meeting and will be available to respond to appropriate
questions of shareholders and to make a statement if they desire.

EXPERTS

The consolidated financial statements of Victoria and its subsidiaries
incorporated by reference in Victoria's Annual Report on Form 10-K/A for the
year ended December 31, 1994 incorporated by reference herein have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of Arthur Andersen LLP as experts in giving such
report.

The consolidated financial statements of United and its subsidiary as
of December 31, 1994 and 1993 and for the three years in the period ended
December 31, 1994 included herein and elsewhere in the Registration Statement
have been included herein and in the Registration Statement together with the
report of Grant Thornton LLP, independent certified public accountants,
appearing elsewhere herein.

LEGAL OPINIONS

Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. has rendered an opinion
concerning the validity of the securities being offered pursuant to this Proxy
Statement/Prospectus and certain other matters. Bracewell & Patterson, L.L.P.
has rendered an opinion concerning certain federal income tax consequences of
the Merger.

INDEMNIFICATION

Victoria's Bylaws provide indemnification to Victoria's officers,
directors, employees and agents to the fullest extent required and permitted by
Article 2.02-1 of the TBCA, subject to any restrictions in Victoria's Articles
of Incorporation. SEE "COMPARISON OF RIGHTS OF SHAREHOLDERS OF UNITED AND
VICTORIA--LIMITATION OF LIABILITY AND INDEMNIFICATION".

-73-
<PAGE> 80
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
Victoria, Victoria has been informed that in the opinion of the Commission,
such indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable.

OTHER MATTERS

United's Board of Directors does not know of any matters to be
presented at the Meeting other than those set forth above. If any other
matters are properly brought before the Meeting or any adjournment thereof, the
enclosed proxy will be voted in accordance with the recommendations of United's
Board of Directors unless "Authority Withheld" is indicated in the appropriate
box on the proxy. SEE "INTRODUCTION".

-74-
<PAGE> 81

INDEX TO FINANCIAL STATEMENTS
OF
UNITED BANCSHARES, INC.

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Report of Independent Certified Public Accountants F-2

Consolidated Balance Sheets as of December 31, 1994 and 1993 F-3

Consolidated Statements of Earnings for the Years Ended December 31, 1994, 1993 and 1992 F-4

Statement of Stockholders' Equity for the Years Ended December 31, 1992, 1993 and 1994 F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 1994, 1993 and 1992 F-6

Notes to Financial Statements F-8

Selected Financial Data for the Years Ended December 31, 1994, 1993, 1992, 1991 and 1990
(not covered by report of independent public accountants) F-20

Consolidated Balance Sheet as of March 31, 1995 (unaudited) F-21

Consolidated Statements of Earnings for the Three Months Ended March 31, 1995 and
1994 (unaudited) F-22

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1995 and
1994 (unaudited) F-23

Note to Consolidated Financial Statements F-24

Selected Financial Data for the Three Months Ended March 31, 1995 and 1994 (not
covered by report of independent public accountants) F-25

</TABLE>

F-1
<PAGE> 82
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
United Bancshares, Inc.

We have audited the accompanying consolidated balance sheets of United
Bancshares, Inc. and Subsidiary as of December 31, 1994 and 1993, and the
related consolidated statements of earnings, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1994. These
financial statements are the responsibility of the Company'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 consolidated financial statements referred to
above, present fairly, in all material respects, the financial position of
United Bancshares, Inc. and Subsidiary as of December 31, 1994 and 1993, and
the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1994 in conformity with generally
accepted accounting principles.

As described in Note A2, the Company changed its method of accounting
for certain debt and equity securities as of January 1, 1994. Also, as
described in Note A7, the Company changed its method of accounting for income
taxes in 1993.

Houston, Texas
January 26, 1995

F-2
<PAGE> 83
UNITED BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
December 31,

<TABLE>
<CAPTION>
ASSETS 1994 1993
----------- -----------
<S> <C> <C>
Cash and cash equivalents
Cash and due from bank $ 2,953,000 $ 3,540,000
Federal funds sold 6,875,000 6,000,000
----------- -----------
9,828,000 9,540,000
Securities 30,475,000 26,187,000
Loans, net of allowance for loan losses of $142,000
and $236,000 23,744,000 28,584,000
Premises and equipment, net 2,639,000 2,294,000
Deferred tax assets 155,000 -
Other assets 1,447,000 1,349,000
----------- -----------
$68,288,000 $67,954,000
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing $13,302,000 $12,786,000
Interest-bearing 49,980,000 49,867,000
----------- -----------
63,282,000 62,653,000
Notes payable 614,000 644,000
Income taxes 41,000 177,000
Other liabilities 186,000 218,000
----------- -----------
Total liabilities 64,123,000 63,692,000
Commitments and contingencies - -
Stockholders' equity
Preferred stock 519,000 519,000
Common stock 236,000 236,000
Additional capital 243,000 243,000
Retained earnings 3,600,000 3,265,000
Net unrealized loss on securities available-for-
sale, net of tax of $218,000 (432,000) -
----------- -----------
4,166,000 4,263,000
Less 92 shares of common stock in treasury - at cost (1,000) (1,000)
----------- -----------
4,165,000 4,262,000
----------- -----------
$68,288,000 $67,954,000
=========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-3
<PAGE> 84
UNITED BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF EARNINGS
Year ended December 31,

<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Interest income
Loans $2,208,000 $2,443,000 $2,389,000
Investment securities 1,482,000 1,615,000 1,729,000
Federal funds sold 304,000 127,000 142,000
Other 7,000 4,000 2,000
---------- ---------- ----------
Total interest income 4,001,000 4,189,000 4,262,000
Interest expense
Deposits 1,329,000 1,431,000 1,761,000
Notes payable 45,000 38,000 41,000
---------- ---------- ----------
Total interest expense 1,374,000 1,469,000 1,802,000
---------- ---------- ----------
Net interest income 2,627,000 2,720,000 2,460,000
Provision for loan losses 15,000 155,000 337,000
---------- ---------- ----------
Net interest income after provision
for loan losses 2,612,000 2,565,000 2,123,000
Other income
Net realized gain on sale of securities - 55,000 145,000
Service charges on deposit accounts 706,000 781,000 709,000
Other operating income 168,000 132,000 123,000
---------- ---------- ----------
Total other income 874,000 968,000 977,000
Other expenses
Salaries and employee benefits 1,317,000 1,237,000 1,158,000
Net occupancy expense 374,000 340,000 346,000
Other operating expense 1,253,000 1,009,000 981,000
---------- ---------- ----------
Total other expense 2,944,000 2,586,000 2,485,000
---------- ---------- ----------
Earnings before income taxes, extraordinary
gain and cumulative effect of accounting
change 542,000 947,000 615,000
Income tax expense
Currently payable 169,000 332,000 214,000
Deferred expense (benefit) 14,000 (27,000) 6,000
---------- ---------- ----------
183,000 305,000 220,000
---------- ---------- ----------
Earnings before extraordinary gain and
cumulative effect of accounting change 359,000 642,000 395,000
Extraordinary gain, less $42,000 in income taxes - - 82,000
---------- ---------- ----------
Earnings before cumulative effect of
accounting change 359,000 642,000 477,000
Cumulative effect of accounting change
for income taxes - (36,000) -
---------- ---------- ----------
NET EARNINGS $ 359,000 $ 606,000 $ 477,000
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

F-4
<PAGE> 85
UNITED BANCSHARES, INC. AND SUBSIDIARY

STATEMENT OF STOCKHOLDERS' EQUITY
Years ended December 31, 1992, 1993 and 1994

Preferred stock Preferred stock
Series A, Series B,
7-1/2% cumulative 10% cumulative Common stock
--------------------- --------------------- ----------------------
Shares Amount Shares Amount Shares Amount
-------- -------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1992 42,589 $319,000 26,667 $200,000 215,689 $216,000
Dividend declaration - - - - - -
Common stock issued - - - - 20,117 20,000
Net earnings - - - - - -
-------- ---------- -------- ---------- ---------- ----------
Balance at December 31, 1992 42,589 319,000 26,667 200,000 235,806 236,000
Dividend declaration - - - - - -
Net earnings - - - - - -
-------- ---------- -------- ---------- ---------- ----------
Balance at December 31, 1993 42,589 319,000 26,667 200,000 235,806 236,000

Unrealized loss from initial adoption
of Statement 115 effective January 1,
1994, net of taxes of $152,000 - - - - - -

Net change in unrealized loss on
securities available-for-sale, net of
taxes of $66,000 - - - - - -

Dividend declaration - - - - - -

Net earnings - - - - - -
-------- ---------- -------- ---------- ---------- ----------

Balance at December 31, 1994 42,589 $319,000 26,667 $200,000 235,806 $236,000
======== ========== ======== ========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
Net unrealized
loss on
securities Common
Additional Retained available-for- stock in
capital earnings sale treasury
---------- ------------ --------------- --------
<S> <C> <C> <C> <C>
Balance at January 1, 1992 $ 23,000 $2,230,000 $ - $1,000
Dividend declaration - (25,000) - -
Common stock issued 220,000 - - -
Net earnings - 477,000 - -
--------- ---------- ----------- ------
Balance at December 31, 1992 243,000 2,682,000 - 1,000
Dividend declaration - (23,000) - -
Net earnings - 606,000 - -
--------- ---------- ----------- ------
Balance at December 31, 1993 243,000 3,265,000 - 1,000

Unrealized loss from initial adoption
of Statement 115 effective January 1,
1994, net of taxes of $152,000 - - (297,000) -

Net change in unrealized loss on
securities available-for-sale, net of
taxes of $66,000 - - (135,000) -

Dividend declaration - (24,000) - -

Net earnings - 359,000 - -
--------- ---------- ----------- ------

Balance at December 31, 1994 $243,000 $3,600,000 $(432,000) $1,000
========= ========== =========== ======
</TABLE>

The accompanying notes are an integral part of this statement.

F-5
<PAGE> 86
UNITED BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31,

<TABLE>
<CAPTION>
1994 1993 1992
------------- ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities
Earnings before extraordinary gain $ 359,000 $ 606,000 $ 395,000
Extraordinary gain - - 82,000
------------ ------------ ------------
Net earnings for the year 359,000 606,000 477,000
Adjustments to reconcile net earnings to net
cash provided by operating activities
Provision for loan losses 15,000 155,000 337,000
Depreciation 191,000 151,000 138,000
Amortization of premiums, net of accretion of
discounts on securities (26,000) 145,000 79,000
Realized investment securities gains - (55,000) (145,000)
Loss on sale of other assets 13,000 - 24,000
Extraordinary gain - - (82,000)
Change in assets and liabilities
(Increase) decrease in other assets (34,000) (436,000) 807,000
Decrease in other liabilities (32,000) (26,000) (180,000)
(Decrease) increase in taxes payable (136,000) (66,000) 172,000
------------ ------------ ------------
Net cash provided by operating activities 350,000 474,000 1,627,000
Cash flows from investing activities
Proceeds from sales and maturities of investment
securities - 15,072,000 8,033,000
Purchases of investment securities - (13,232,000) (12,122,000)
Proceeds from sales and maturities of securities
available-for-sale 2,000,000 - -
Proceeds from principal repayments of securities 4,818,000 - -
Purchases of securities available-for-sale (5,928,000) - -
Purchases of securities to be held-to-maturity (5,803,000) - -
Net decrease (increase) in loans 4,825,000 (4,147,000) (1,301,000)
Purchases of premises and equipment (549,000) (447,000) (105,000)
------------ ------------ ------------
Net cash used in investing activities (637,000) (2,754,000) (5,495,000)
Cash flows from financing activities
Net increase in deposits 629,000 2,295,000 3,736,000
Net principal repayments on borrowings (45,000) (1,000) (52,000)
Cash dividends (24,000) (23,000) (25,000)
Proceeds from note payable 15,000 - -
Proceeds from issuance of common stock - - 1,000
------------ ------------ ------------
Net cash provided by financing activities 575,000 2,271,000 3,660,000
------------ ------------ ------------
Net increase (decrease) in cash 288,000 (9,000) (208,000)
Cash and cash equivalents at beginning of year 9,540,000 9,549,000 9,757,000
------------ ------------ ------------
Cash and cash equivalents at end of year $ 9,828,000 $ 9,540,000 $ 9,549,000
============ ============ ===========

</TABLE>

F-6
<PAGE> 87
UNITED BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
Year ended December 31,

<TABLE>
<CAPTION>
1994 1993 1992
------------- ------------ -------------
<S> <C> <C> <C>
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest $ 1,373,000 $1,481,000 $ 1,863,000
Federal income taxes 130,000 130,000 56,000
Noncash activities:
Net unrealized loss on securities available-
for-sale, net of tax of $218,000 432,000 - -
Issuance of 20,117 shares of common stock
to retire a note payable - - 364,000

</TABLE>

The accompanying notes are an integral part of these statements.

F-7
<PAGE> 88
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS
December 31, 1994, 1993 and 1992

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

United Bancshares, Inc. (United) was incorporated on September 30,
1977, for the purpose of doing business as a bank holding company.

A summary of the significant accounting policies applied in the
preparation of the accompanying financial statements follows.

1. PRINCIPLES OF CONSOLIDATION AND INVESTMENT IN SUBSIDIARY

The consolidated financial statements include the accounts of United
and its wholly-owned subsidiary, Rosenberg Bank and Trust (the Bank),
collectively referred to as the Company. United accounts for the
investment in and earnings from the Bank on the equity method of
accounting. All material intercompany transactions and balances have
been eliminated in consolidation.

2. SECURITIES

Effective January 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities (Statement 115). At the date of purchase,
the Company is required to classify debt and equity securities into
one of three categories: held-to-maturity, trading or
available-for-sale. At each reporting date, the appropriateness of
the classification is reassessed. Investments in debt securities are
classified as held-to-maturity and measured at amortized cost in the
financial statements only if management has the positive intent and
ability to hold those securities to maturity. Securities that are
bought and held principally for the purpose of selling them in the
near term are classified as trading and measured at fair value in the
financial statements with unrealized gains and losses included in
earnings. Investments not classified as either held-to-maturity or
trading are classified as available-for-sale and measured at fair
value in the financial statements with unrealized gains and losses
reported, net of tax, in a separate component of stockholder's equity
until realized.

In 1992 and 1993, under the Company's previous accounting policy,
investment securities were stated at cost, adjusted for accretion of
discounts and amortization of premiums which were recognized as
adjustments to interest income.

Gains and losses on sales of securities available-for-sale are
determined using the specific-identification method.

Declines in the fair value of individual held-to-maturity and
available-for-sale securities below their cost that are considered to
be permanent declines result in write-downs of the individual
securities to their fair value. The related write-downs are included
in earnings as realized losses.

Net realized gains on sales of securities include profit or loss
realized on sales of securities.

F-8
<PAGE> 89
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

3. LOANS

The Bank grants loans to customers primarily in Fort Bend County and
Southwest Harris County, Texas. Although the Bank has a diversified
loan portfolio, a substantial portion of its debtors' ability to honor
their contracts is dependent upon the economy in this area.

Loans are stated at the principal amount outstanding, net of unearned
income. Interest on installment loans is recognized by a method which
approximates the level-yield method. Interest on other loans is
recognized using the simple interest method.

Substantially all fees for the origination of loans are recorded as
income when received. The effect on operations and retained earnings
is not materially different from the deferral of net direct
origination fees and costs and the amortization thereof as an
adjustment of the yield on the related loan.

A loan is generally placed on nonaccrual status when, in the opinion
of management, there is an indication that the borrower may be unable
to meet payments as they become due. Upon such discontinuance, all
unpaid accrued interest is reversed. Interest on loans placed on
nonaccrual status is included in income only to the extent received in
cash.

In 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 114, Accounting by Creditors for
Impairment of a Loan (Statement 114). This statement is effective
beginning January 1, 1995, and requires impaired loans, as defined, to
be measured at the discounted amounts of their expected future cash
flows using the loan's effective interest rate, the observable market
price, or the fair value of the collateral for collateral dependent
loans. Management does not believe that the adoption of Statement 114
will have a significant effect on the Bank.

4. ALLOWANCE FOR LOAN LOSSES

The allowance is maintained at a level adequate to absorb probable
losses. Management determines the adequacy of the allowance based
upon reviews of individual credits, recent loss experience, current
economic conditions, the risk characteristics of the various
categories of loans and other pertinent factors. Loans deemed
uncollectible are charged to the allowance. Provisions for loan
losses and recoveries on loans previously charged-off are added to the
allowance.

Future additions to the allowance may be necessary based on changes in
economic conditions. In addition, various regulatory agencies, as an
integral part of their examination process, periodically review the
allowance. Such agencies may require additions to the allowance based
on their judgments of information available to them at the time of
their examination.

F-9
<PAGE> 90
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

5. PREMISES AND EQUIPMENT

Premises and equipment are stated at cost less accumulated
depreciation. Depreciation is included in occupancy expenses and is
computed principally using the straight-line method.

6. OTHER REAL ESTATE

Included in other assets is other real estate of approximately
$512,000 and $604,000 in 1994 and 1993. Real estate acquired by
foreclosure is recorded at the lower of the recorded investment in the
property or its fair value. At foreclosure, the value of the
underlying loan is written down to the fair market value of the real
estate to be acquired by a charge to the allowance for loan losses, if
necessary. Operating expenses of such properties, net of related
income, and gains and losses on their disposition are included in
other expenses.

7. INCOME TAXES

United and the Bank file a consolidated Federal income tax return and
have made an election to allocate their tax liability. Accordingly,
United is reimbursed by the Bank for the income taxes the Bank would
have paid if it filed a separate Federal income tax return.

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (Statement
109) and has reported the cumulative effect of that change in method
of accounting for income taxes in the 1993 statement of earnings.
Statement 109 requires a change from the deferred method of accounting
for income taxes to the asset and liability method of accounting for
income taxes. Under the asset and liability method of Statement 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. When management determines that it is
more likely than not that a deferred tax asset will not be realized, a
valuation allowance must be established. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.

8. TRUST DEPARTMENT

Trust department assets (other than cash deposits) held by the Bank in
fiduciary or agency capacities for its customers are not included in
the accompanying consolidated balance sheets, since such items are not
assets of the Bank.

F-10
<PAGE> 91
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

9. CASH FLOWS

For purposes of reporting cash flows, cash and cash equivalents
include cash on hand, amounts due from banks and federal funds sold.

10. OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS

In the ordinary course of business the Bank enters into
off-balance-sheet financial instruments consisting of commitments to
extend credit, commercial letters of credit and standby letters of
credit. Such financial instruments are recorded in the financial
statements when they are funded or related fees are incurred or
received.

11. RECLASSIFICATIONS

Certain of the 1993 and 1992 amounts have been reclassified to conform
to the 1994 presentation.

NOTE B - SECURITIES

The components of securities as shown in the balance sheet were as
follows at December 31, :
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Available-for-sale $14,250,000 $ -
Held-to-maturity 16,225,000 -
Investment securities - 26,187,000
----------- -----------
$30,475,000 $26,187,000
=========== ===========
</TABLE>

The carrying amounts of securities and their approximate fair values
at December 31, were as follows:

<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
------------ ----------- -------- -----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1994
AVAILABLE-FOR-SALE
U. S. Treasury securities $ 5,008,000 $ - $173,000 $ 4,835,000
U. S. Agency securities col-
lateralized by mortgage
obligations 9,885,000 - 470,000 9,415,000
------------ ----------- -------- -----------
$ 14,893,000 $ - $643,000 $14,250,000
============ =========== ======== ===========

</TABLE>

F-11
<PAGE> 92
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE B - SECURITIES - CONTINUED

<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
------------ ----------- --------- ------------
<S> <C> <C> <C> <C>
HELD-TO-MATURITY
U. S. Treasury securities $ 4,951,000 $ - $ 10,000 $ 4,941,000
U. S. Agency securities col-
lateralized by mortgage
obligations 8,602,000 3,000 425,000 8,180,000
Municipal securities 2,473,000 - 33,000 2,440,000
Bank certificates of deposit 199,000 - - 199,000
------------ ----------- --------- ------------
$ 16,225,000 $ 3,000 $ 468,000 $ 15,760,000
============ =========== ========= ============
</TABLE>

<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
------------ ----------- --------- ------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1993
U. S. Treasury securities $ 5,014,000 $134,000 $ - $ 5,148,000
U. S. Agency securities col-
lateralized by mortgage
obligations 19,424,000 180,000 55,000 19,549,000
Municipal securities 1,550,000 35,000 - 1,585,000
Bank certificates of deposit 199,000 - - 199,000
------------ ----------- --------- ------------
$ 26,187,000 $ 349,000 $ 55,000 $ 26,481,000
============ =========== ========= ============
</TABLE>

Securities with book values of approximately $5,003,000 and $6,299,000
at December 31, 1994 and 1993, were pledged to secure public deposits.

F-12
<PAGE> 93
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE B - SECURITIES - CONTINUED

There were no realized gains or losses on sales of securities in 1994.
In 1993 and 1992, gross gains of approximately $55,000 and $145,000
were realized on sales of securities.

The scheduled maturities of securities at December 31, 1994 were as
follows. Contractual maturities differ from expected maturities
because borrowers may call or prepay obligations.

<TABLE>
<CAPTION>
Held-to-Maturity Available-for-Sale
-------------------------------- ----------------------------------
Estimated Estimated
Amortized cost market value Amortized cost market value
-------------- ------------ -------------- -------------
<S> <C> <C> <C> <C>
Due in one year or less $ 6,400,000 $ 6,390,000 $ - $ -

Due after one
through five years 500,000 498,000 5,008,000 4,835,000

Due after five through
ten years 723,000 692,000 - -
----------- ----------- -------------- -------------
7,623,000 7,580,000 5,008,000 4,835,000

Securities collateralized
by mortgage obligations 8,602,000 8,180,000 9,885,000 9,415,000
----------- ----------- -------------- -------------
$16,225,000 $15,760,000 $ 14,893,000 $ 14,250,000
=========== =========== ============== =============
</TABLE>

NOTE C - LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans classified according to type at December 31, are summarized as follows:

<TABLE>
<CAPTION>
1994 1993
------------- ------------
<S> <C> <C>
Commercial $ 7,977,000 $ 7,922,000
Real estate 12,886,000 13,499,000
Installment 2,917,000 3,237,000
Mortgage to be resold 284,000 4,403,000
Other 107,000 105,000
------------ ------------
24,171,000 29,166,000
Less
Unearned discounts 285,000 346,000
Allowance for loan losses 142,000 236,000
------------ ------------
$ 23,744,000 $ 28,584,000
============ ============
</TABLE>

F-13
<PAGE> 94
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE C - LOANS AND ALLOWANCE FOR LOAN LOSSES - CONTINUED

Changes in the allowance for loan losses were as follows:

<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
Balance at beginning of year $ 236,000 $ 226,000
Provision charged to operations 15,000 155,000
Charge-offs, net of recoveries (109,000) (145,000)
--------- ---------
Balance at end of year $ 142,000 $ 236,000
========= =========
</TABLE>

The Bank had loans outstanding to its directors and officers and their
related business interests aggregating approximately $1,376,000 and
$1,203,000 at December 31, 1994 and 1993. In management's opinion,
all such loans were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable transactions with other customers and did not involve more
than a normal risk of collectibility or present other unfavorable
features.

Nonaccrual loans at December 31, 1994 and 1993 were approximately $-0-
and $106,000. The reduction in interest income associated with
nonaccrual loans was not significant.

NOTE D - PREMISES AND EQUIPMENT

Premises and equipment as of December 31, are summarized as follows:

<TABLE>
<CAPTION>
Estimated
useful lives 1994 1993
---------------- ------------ ------------
<S> <C> <C> <C>
Land - $ 721,000 $ 721,000
Construction in progress - - 112,000
Buildings and improvements 5 -40 years 2,072,000 1,610,000
Furniture, equipment and fixtures 5 -10 years 878,000 716,000
Automobiles 5 years 42,000 34,000
---------- ----------
3,713,000 3,193,000
Accumulated depreciation 1,074,000 899,000
---------- ----------
$2,639,000 $2,294,000
========== ==========
</TABLE>

F-14
<PAGE> 95
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE E - NOTES PAYABLE

Notes payable at December 31, are as follows:
<TABLE>
<CAPTION>
1994 1993
---------- ---------
<S> <C> <C>
Note payable to a bank; due March 5, 1995;
interest at prime (8.5% and 6% at December 31,
1994 and 1993); collateralized by 220,000 shares
of common stock of the Bank $ 599,000 $599,000
Other 15,000 45,000
--------- --------
$ 614,000 $644,000
========= ========
</TABLE>

NOTE F - INTEREST-BEARING DEPOSITS

Interest-bearing deposits as of December 31, are summarized as follows:

<TABLE>
<CAPTION>
1994 1993
------------ ------------
<S> <C> <C>
Savings $ 8,266,000 $ 9,652,000
NOW and Club 15,816,000 14,949,000
Money market 8,085,000 7,349,000
Time deposits less than $100,000 14,695,000 14,505,000
Time deposits of or greater than $100,000 3,118,000 3,412,000
----------- -----------
$49,980,000 $49,867,000
=========== ===========

</TABLE>

NOTE G - FEDERAL INCOME TAXES

Included in the balance sheet at December 31, 1994 is a net deferred
tax asset of $155,000, resulting from temporary differences relating
to unrealized losses on available-for-sale securities, allowance for
loan losses, depreciation and valuation of other real estate.

At December 31, 1993, included in income taxes in the balance sheet
are net deferred tax amounts of $54,000, resulting from temporary
differences relating primarily to the allowance for loan losses,
depreciation and valuation of other real estate.

F-15
<PAGE> 96
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE H - COMMITMENTS AND CONTINGENCIES

The Bank is a party to financial instruments with off-balance-sheet
risk in the normal course of business to meet the financing needs of
its customers. These financial instruments include commitments to
extend credit and standby letters of credit. Those instruments
involve, to varying degrees, elements of credit and interest rate risk
in excess of the amount recognized in the balance sheets. The
contractual amounts of those instruments reflect the extent of
involvement the Bank has in particular classes of financial
instruments.

The Bank's exposure to credit loss in the event of nonperformance by
the other party to the financial instrument for commitments to extend
credit and standby letters of credit is represented by the contractual
amount of those instruments. Commitments under outstanding standby
letters of credit totaled approximately $212,000 at December 31, 1994,
including approximately $171,000 to a related party. Commitments to
extend credit totaled approximately $3,409,000 at December 31, 1994.
The Bank does not anticipate any material losses as a result of these
commitments.

Commitments to extend credit are agreements to lend to a customer as
long as there is no violation to any condition established in the
contract and have generally fixed expiration dates or other
termination clauses. Some of the commitments are expected to expire
without being drawn upon, so that the total commitment amounts do not
necessarily represent future cash requirements. The Bank evaluates
each customer's credit worthiness on a case-by-case basis and obtains
collateral as deemed necessary.

Standby letter of credit guarantees are conditional commitments issued
by the Bank to guarantee the performance of a customer to a third
party. The credit risk involved and collateral required in issuing
letters of credit are essentially the same as those involved in
extending loan facilities to customers.

In accordance with United's Employee Stock Ownership Plan and Trust
(the Plan), all employees of the Company who have completed twelve
months of employment are eligible to participate in the Plan. United
is permitted to contribute an amount equal to the available employee
stock ownership tax credit. A contribution of $5,000 was made for
1992. No contribution was made in 1993 or 1994.

Effective January 1, 1993, the Bank adopted a defined contribution
401(k) plan covering all employees. Under the Plan, the Bank may make
profit sharing and matching contributions at its discretion. The Bank
made a $5,000 contribution in 1994. The Bank made no contributions to
the Plan in 1993.

F-16
<PAGE> 97
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE H - COMMITMENTS AND CONTINGENCIES - CONTINUED

The Bank is involved in certain claims and lawsuits occurring in the
normal course of business. Management, after consultation with
outside legal counsel, does not believe that the outcome of these
actions would have a material impact on their financial statements.

NOTE I - PREFERRED STOCK

United is authorized to issue 1,000,000 shares of cumulative preferred
stock with a par value of $7.50 per share. The preferred stock may be
issued in more than one series, and the Board of Directors shall
determine the relative rights and preferences of each series.
Dividends on preferred stock are cumulative and have preference to any
dividends declared or paid on United's common stock. The preferred
stock also has preference upon liquidation. If at any time six full
quarterly dividends are in arrears on any series of preferred stock,
the number of directors of United will be automatically increased by
two, and the holders of all series of preferred stock voting as a
class, have the right to elect those two additional directors. Such
directors will serve until all dividends in arrears have been paid in
full, at which time the term of office of such directors shall cease.

The preferred stock is redeemable at par value plus accrued but unpaid
dividends, at the option of United's Board of Directors, after five
years from the date of its issuance. All or part of the outstanding
preferred stock may be redeemed, but if only part of the outstanding
issue is redeemed, the redemption must be pro rata or the shares to be
redeemed must be chosen by lot. There is to be no sinking fund
provided for the redemption of the preferred stock. The preferred
stock does not have any voting rights other then those described
above, nor will preemptive rights attach to the preferred stock. The
preferred stock is not convertible into or exchangeable for any other
security of United.

Major classifications of preferred stock at December 31, 1994 and 1993
are as follows:

<TABLE>
<S> <C>
Series A 7-1/2%; authorized, 66,726 shares; 42,589
shares issued and outstanding $319,000
Series B 10%; authorized, issued and outstanding
26,667 shares 200,000
--------
$519,000
========
</TABLE>

Dividends in arrears on Series B Preferred stock at December 31, 1994
were $100,000.

F-17
<PAGE> 98
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE J - COMMON STOCK

Common stock consists of 5,000,000 authorized shares of $1.00 par
value, with 235,806 shares issued on December 31, 1994 and 1993.

NOTE K - VOTING AGREEMENT

Under a Voting Agreement (the Agreement) between certain stockholders
of United and Mr. D. W. Neuenschwander, Chairman of the Board of
Directors and Chief Executive Officer, voting power associated with
their shares of common stock is vested in Mr. Neuenschwander, as
voting representative. The significant provisions of the Agreement
are:

-- Any voting shares of United acquired by such stockholders
subsequent to the date of the Agreement and voting securities
of successor entities received with respect to the shares
subject to the provisions of the Agreement or otherwise
acquired are also subject to the provisions of the Agreement.

-- Mr. Neuenschwander has the exclusive right to exercise all
voting rights with respect to all stock subject to the
provisions of the Agreement.

-- During the term of the Agreement, the sale, assignment,
transfer or other disposition of the shares is subject to
various limitations.

-- The Agreement will terminate May 15, 1998.

Common shares subject to the Agreement totaled 164,161 at December 31,
1994.

NOTE L - REGULATORY MATTERS

The Company is subject to various regulatory requirements administered
by Federal banking agencies relating to capital. Management believes
that, as of December 31, 1994, the Company meets all capital
requirements to which it is subject.

The Bank's regulatory authorities have specified guidelines for
purposes of evaluating a bank's capital adequacy. Currently, banks
must maintain a minimum of total capital and core capital to
risk-weighted assets. Core capital is defined as equity capital.
Regulations also require the Bank to maintain a minimum leverage
requirement of core capital to total assets or such greater percentage
as determined based upon its level and nature of risk. The following
is a summary of the Bank's capital ratios at December 31, 1994:

F-18
<PAGE> 99
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS - Continued
December 31, 1994, 1993 and 1992

NOTE L - REGULATORY MATTERS - CONTINUED

<TABLE>
<CAPTION>
Regulatory
Bank minimum
---- -------
<S> <C> <C>
Total Capital vs. Risk Assets 18.8% 8.0%
Core Capital vs. Risk Assets 18.3% 4.0%
Core Capital vs. Total Assets (Leverage) 7.7% 3.0%

</TABLE>

Additionally, regulations limit the amount of dividends that may be
paid without prior approval of the Bank's regulatory agency.
Dividends may be paid without prior approval of the regulators,
subject to the minimum capital ratio requirements noted above.

NOTE M - EXTRAORDINARY GAIN

During 1992, a note payable to the Chairman of United Bancshares for
$364,000 was exchanged for 20,117 shares of United Bancshares $1 par
value common stock. The excess of the note balance over the fair
market value of the newly issued common shares resulted in an $82,000
extraordinary gain (net of related income tax expense of $42,000).

NOTE N - SUBSEQUENT EVENT

On January 12, 1995, United Bancshares, Inc. entered into a definitive
merger agreement with Victoria Bankshares, Inc. The merger agreement
is contingent upon approval of the shareholders of United Bancshares,
Inc. and the banks' regulators.

F-19
<PAGE> 100
SELECTED FINANCIAL DATA
UNITED BANCSHARES, INC. AND SUBSIDIARY
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(NOT COVERED BY REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------------
1994 1993 1992 1991 1990
------ ------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS:
Interest Income . . . . . . . . . 4,001 4,189 4,262 4,866 4,915
Interest Expense . . . . . . . . 1,374 1,469 1,802 2,717 3,012
Net Interest Income . . . . . . . 2,627 2,720 2,460 2,149 1,903
Provision for Loan Losses . . . . 15 155 337 158 204
Net Interest Income After
Provision for Loan Losses . . . 2,612 2,565 2,123 1,991 1,699
Noninterest Income . . . . . . . 874 968 977 919 615
Noninterest Expense . . . . . . . 2,944 2,586 2,485 2,578 2,690
Income (Loss) Before Taxes and
Items Below . . . . . . . . . . 542 947 615 332 (376)
Federal Income Taxes (Benefit) . 183 305 220 11 (17)
Extraordinary Items . . . . . . . 0 0 82 0 0
Cumulative Effect of Change in
Accounting Method . . . . . . . 0 (36) 0 0 0
------ ------ ------ ------ ------
Net Income (Loss) . . . . . . . . 359 606 477 321 (359)
------ ------ ------ ------ ------
Per Share Amounts:
Net Income (Loss) . . . . . . . . 1.33 2.38 1.89 1.28 (1.87)
Cash Dividends . . . . . . . . . -- -- -- -- --
Book Value . . . . . . . . . . . 15.46 15.87 13.40 11.44 10.13
------ ------ ------ ------ ------
Average Balances:
Demand Deposits . . . . . . . . . 12,957 11,223 9,989 10,166 10,204
Interest-Bearing Transactional
Accounts . . . . . . . . . . . 15,501 14,422 12,506 10,835 9,769
Time Deposits . . . . . . . . . . 33,678 35,665 33,467 34,550 33,648
Investment Securities . . . . . . 28,225 28,841 25,161 23,116 18,797
Net Loans . . . . . . . . . . . . 24,908 27,325 24,363 24,563 24,268
Long-Term Debt . . . . . . . . . -- -- -- -- --
------ ------ ------ ------ ------
Total Assets . . . . . . . . . . 67,449 66,330 60,586 60,175 58,276
------ ------ ------ ------ ------
Total Equity . . . . . . . . . . 4,368 4,064 3,460 2,845 2,896
------ ------ ------ ------ ------
Net Income (Loss) as a
Percent of:
Average Total Assets . . . . . . 0.53% 0.91% 0.79% 0.53% (0.62%)
------ ------ ------ ------ ------
Average Total Equity . . . . . . 8.22% 14.91% 13.79% 11.28% (12.40%)
------ ------ ------ ------ ------
Selected Average Ratios:
Net Loans to Total Deposits . . . 40.09% 44.57% 43.53% 44.22% 45.26%
Demand Deposits to Total
Deposits . . . . . . . . . . . 20.85% 18.31% 17.85% 18.30% 19.03%
Equity to Assets . . . . . . . . 6.48% 6.13% 5.71% 4.73% 4.97%
------ ------ ------ ------ ------

</TABLE>

F-20
<PAGE> 101
UNITED BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET
March 31, 1995
(Unaudited)

ASSETS

<TABLE>

<S> <C>
Cash and due from bank . . . . . . . . . . . . . . . . . . . . $ 2,304,000
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 30,460,000
Loans, net of allowance for loan losses of $155,000. . . . . . 27,556,000
Premises and equipment, net. . . . . . . . . . . . . . . . . . 2,598,000
Deferred tax assets. . . . . . . . . . . . . . . . . . . . . . 7,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . 1,511,000
-----------
$64,436,000
===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Deposits
Noninterest-bearing. . . . . . . . . . . . . . . . . $11,290,000
Interest-bearing . . . . . . . . . . . . . . . . . . 47,497,000
-----------
58,787,000
Notes payable . . . . . . . . . . . . . . . . . . . . . . 624,000
Federal funds purchased . . . . . . . . . . . . . . . . . 225,000
Income taxes. . . . . . . . . . . . . . . . . . . . . . . 33,000
Other liabilities . . . . . . . . . . . . . . . . . . . . 215,000
-----------
Total liabilities . . . . . . . . . . . . . . . 59,884,000
Stockholders' equity
Preferred stock . . . . . . . . . . . . . . . . . . . . . 519,000
Common stock. . . . . . . . . . . . . . . . . . . . . . . 236,000
Additional capital. . . . . . . . . . . . . . . . . . . . 243,000
Retained earnings . . . . . . . . . . . . . . . . . . . . 3,700,000
Net unrealized loss on securities available-for-
sale, net of tax of $71,000. . . . . . . . . . . . . (145,000)
-----------
4,553,000
Less 92 shares of common stock in
treasury--at cost. . . . . . . . . . . . . (1,000)
-----------
4,552,000
-----------
$64,436,000
===========

</TABLE>

The accompanying note is an integral part of this statement.

F-21
<PAGE> 102
UNITED BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)

Three months ended March 31,
----------------------------
1995 1994
---------- ----------

Interest income
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 562,000 $549,000
Investment securities. . . . . . . . . . . . . . . . . . . . . . 434,000 331,000
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . 54,000 76,000
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 2,000
---------- --------
Total interest income. . . . . . . . . . . . . . . . . . 1,052,000 958,000

Interest expense
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354,000 328,000
Notes payable. . . . . . . . . . . . . . . . . . . . . . . . . . 18,000 7,000
---------- --------
Total interest expense . . . . . . . . . . . . . . . . . 372,000 335,000
---------- --------
Net interest income. . . . . . . . . . . . . . . . . . . 680,000 623,000

Provision for loan losses. . . . . . . . . . . . . . . . . . . . . . . . 10,000 --
---------- --------
Net interest income after provision for loan losses. . . 670,000 623,000

Other income
Service charges on deposit accounts. . . . . . . . . . . . . . . 166,000 171,000
Other operating income . . . . . . . . . . . . . . . . . . . . . 60,000 39,000
---------- --------
Total other income . . . . . . . . . . . . . . . . . . . 226,000 210,000

Other expenses
Salaries and employees benefits. . . . . . . . . . . . . . . . . 340,000 319,000
Net occupancy expense. . . . . . . . . . . . . . . . . . . . . . 94,000 86,000
Other operating expense. . . . . . . . . . . . . . . . . . . . . 302,000 317,000
---------- --------
Total other expense. . . . . . . . . . . . . . . . . . . 736,000 722,000
---------- --------
Earnings before income taxes . . . . . . . . . . . . . . 160,000 111,000

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,000 41,000
---------- --------
NET EARNINGS . . . . . . . . . . . . . . . . . . . . . . $ 106,000 $ 70,000
========== ========

</TABLE>

The accompanying note is an integral part of these statements.

F-22

<PAGE> 103
UNITED BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities
Net earnings for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 106,000 $ 70,000
Adjustments to reconcile net earnings to net cash provided
(used) by operating activities
Provision for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 --
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,000 40,000
Amortization of premiums, net of accretion of discounts on securities . . . . . . . . . (62,000) 27,000
Change in assets and liabilities
Increase in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (64,000) (195,000)
Decrease in deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,000 --
Increase in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,000 20,000
Decrease in taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,000) (94,000)
--------- ---------
Net cash provided (used) by operating activities . . . . . . . . . . . . . . . . . 154,000 (132,000)

Cash flows from investing activities
Purchases of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (3,282,000)
Proceeds from sales and maturities of securities to be held-to-maturity . . . . . . . . . . 3,500,000 --
Proceeds from principal repayments of securities . . . . . . . . . . . . . . . . . . . . . 420,000 2,771,000
Purchases of securities to be held-to-maturity . . . . . . . . . . . . . . . . . . . . . . (3,500,000) --
Net (increase) decrease in loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,822,000) 5,054,000
Increase in Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225,000 --
Purchases of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,000) (206,000)
--------- ---------
Net cash (used) provided in investing activities. . . . . . . . . . . . . . . . . . (3,187,000) 4,337,000
Cash flows from financing activities
Net decrease in deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,495,000) (1,912,000)
Net principal repayments on borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . (40,000) (20,000)
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,000) (6,000)
Proceeds from note payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 --
--------- ---------
Net cash used by financing activities . . . . . . . . . . . . . . . . . . . . . (4,491,000) (1,938,000)
--------- ---------

Net (decrease) increase in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,524,000) 2,267,000

Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . 9,828,000 9,540,000
--------- ---------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,304,000 $11,807,000
=========== ===========
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 348,000 $ 339,000
Federal income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,000 125,000
Noncash activities:
Net unrealized loss on securities available-for-sale,
net of tax of $147,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287,000 --

</TABLE>

The accompanying note is an integral part of these statements.

F-23
<PAGE> 104
UNITED BANCSHARES, INC. AND SUBSIDIARY

NOTE TO CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING POLICIES

The consolidated balance sheet as of March 31, 1995, and the related
consolidated statements of earnings and cash flows for the three months ended
March 31, 1995 and 1994, have been prepared by the Company without audit. In
the opinion of management, the financial statements include all adjustments
necessary for a fair presentation. All adjustments made were of a normal
recurring nature. Interim results are not necessarily indications of results
for a full year. For further financial information, refer to the audited
financial statements of the Company and notes thereto for the year ended
December 31, 1994.

F-24
<PAGE> 105
SELECTED FINANCIAL DATA

UNITED BANCSHARES, INC. AND SUBSIDIARY
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

(NOT COVERED BY REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS)

<TABLE>
<CAPTION>
MARCH 31,
-----------------------------
1995 1994
---- ----
<S> <C> <C>
OPERATING RESULTS:
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . $ 1,052 $ 958
Interest Expense. . . . . . . . . . . . . . . . . . . . . . . . 372 335
Net Interest Income . . . . . . . . . . . . . . . . . . . . . . 680 623
Provision for Loan Losses . . . . . . . . . . . . . . . . . . . 10 0
Net Interest Income After Provision for Loan Losses . . . . . . 670 623
Noninterest Income. . . . . . . . . . . . . . . . . . . . . . . 226 210
Noninterest Expense . . . . . . . . . . . . . . . . . . . . . . 736 722
Income Before Taxes and Items Below . . . . . . . . . . . . . . 160 111
Federal Income Taxes (Benefit). . . . . . . . . . . . . . . . . 54 41
Extraordinary Items . . . . . . . . . . . . . . . . . . . . . . 0 0
Cumulative Effect of Change in Accounting Method. . . . . . . . 0 0
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . 106 70

PER SHARE AMOUNTS:
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40 0.25
Cash Dividends. . . . . . . . . . . . . . . . . . . . . . . . . -- --
Book Value. . . . . . . . . . . . . . . . . . . . . . . . . . . (17.11) (16.14)

AVERAGE BALANCES:
Demand Deposits . . . . . . . . . . . . . . . . . . . . . . . . 13,022 12,418
Interest-Bearing Transactional Accounts . . . . . . . . . . . . 15,549 14,537
Time Deposits . . . . . . . . . . . . . . . . . . . . . . . . . 31,865 35,773
Investment Securities . . . . . . . . . . . . . . . . . . . . . 30,196 26,638
Net Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,852 25,278
Long-Term Debt. . . . . . . . . . . . . . . . . . . . . . . . . -- --
Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 65,601 68,134
Total Equity. . . . . . . . . . . . . . . . . . . . . . . . . . 4,300 4,461

NET INCOME AS A PERCENT OF:
Average Total Assets. . . . . . . . . . . . . . . . . . . . . . 0.16% 0.10%
Average Total Equity. . . . . . . . . . . . . . . . . . . . . . 2.47% 1.57%

SELECTED AVERAGE RATIOS:
Net Loans to Total Deposits . . . . . . . . . . . . . . . . . . 41.12% 40.30%
Demand Deposits to Total Deposits . . . . . . . . . . . . . . . 21.55% 19.80%
Equity to Assets. . . . . . . . . . . . . . . . . . . . . . . . 6.55% 6.55%

</TABLE>

F-25
<PAGE> 106

______________________________

APPENDIX I

MERGER AGREEMENT

______________________________
<PAGE> 107

_______________________________________________________________________________
_______________________________________________________________________________

AGREEMENT AND PLAN OF MERGER

BY AND BETWEEN

VICTORIA BANKSHARES, INC.

AND

UNITED BANCSHARES, INC.

Dated as of January 12, 1995

_______________________________________________________________________________
_______________________________________________________________________________
<PAGE> 108
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.3 Certain Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.4 Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.5 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.6 Conversion of Shares; Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.7 Merger Consideration Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.8 Shareholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.9 Registration of the Victoria Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.10 Retirement of Company Indebtedness; Redemption of Company
Preferred Stock; Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.11 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE II. DISSENTING SHARES; EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

SECTION 2.1 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Exchange of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SECTION 3.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.2 Company Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.3 Subsidiary Capitalization; Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.4 Authority Relative to the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.5 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.6 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.7 Regulatory Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.8 SEC Status; Securities Issuances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.9 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.10 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.11 Company Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.13 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.14 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.15 Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.16 Leases, Contracts and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.17 Related Company Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.18 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

</TABLE>

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<PAGE> 109
<TABLE>
<S> <C> <C>
SECTION 3.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.20 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.21 Fiduciary Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.22 Patents, Trademarks and Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.23 Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.24 Regulatory Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.25 Title to Properties; Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.26 Shareholder List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.27 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.28 Dissenting Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.29 Section 368 Representations; Agreements Not to Dissent . . . . . . . . . . . . . . . . . . . 20
SECTION 3.30 Employee Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.31 Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.32 Representations Not Misleading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF VICTORIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

SECTION 4.1 Organization and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.2 Authority Relative to Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.3 Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.4 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.5 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.6 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.7 Availability of Victoria Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.8 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.9 Commission Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.10 Representations Not Misleading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

ARTICLE V. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

SECTION 5.1 Affirmative Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.2 Negative Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE VI. COVENANTS OF VICTORIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 6.1 Covenants of Victoria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE VII. ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

SECTION 7.1 Access To, and Information Concerning, Properties
and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.2 Filing of Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.3 Miscellaneous Agreements and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.4 Company Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

</TABLE>

ii
<PAGE> 110

<TABLE>
<S> <C>
SECTION 7.5 Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.6 Public Announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.7 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.8 Merger of the Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.9 Environmental Investigation; Right to Terminate Agreement . . . . . . . . . . . . . . . . . . 33
SECTION 7.10 Exchange Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.12 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

ARTICLE VIII. CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

SECTION 8.1 Conditions to Each Party's Obligation to Effect the Merger . . . . . . . . . . . . . . . . . 36
SECTION 8.2 Conditions to the Obligations of Victoria to Effect
the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.3 Conditions to the Obligations of the Company to Effect
the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

ARTICLE IX. TERMINATION; AMENDMENT; WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

SECTION 9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

ARTICLE X. SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

SECTION 10.1 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 41

ARTICLE XI. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

SECTION 11.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 11.2 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 11.3 Entire Agreement; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 11.4 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 11.5 Enforcement of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 11.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 11.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 11.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.9 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.10 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.12 Incorporation by References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.13 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

</TABLE>

iii
<PAGE> 111
ATTACHMENTS

<TABLE>
<CAPTION>
LIST OF SCHEDULES
<S> <C>
Schedule 3.2 Company Capitalization
Schedule 3.3 Subsidiary Capitalization; Other Securities
Schedule 3.4 Authority Relative to the Agreement
Schedule 3.5 Violations of Law; Conflicts of Interest; Share Litigation; Termination of Existence
Schedule 3.6 Company Prior Consents
Schedule 3.7 Regulatory Reports
Schedule 3.10 Absence of Material Changes or Adverse Effects
Schedule 3.11 Company Indebtedness
Schedule 3.12 Litigation
Schedule 3.13 Tax Liabilities
Schedule 3.14(a) Employee Welfare Benefit Plans
Schedule 3.14(b) Employee Pension Benefit Plans
Schedule 3.14(c) Plan Structure Compliance
Schedule 3.14(d) Plan Administration Compliance
Schedule 3.14(f) Deferred Compensation, Bonus and Stock Purchase Plans
Schedule 3.14(g) Title IV Plans
Schedule 3.14(j) Plan Claims or Litigation
Schedule 3.14(l) Additional Payments Due Under Deferred Compensation, Bonus, Employee Welfare Benefit Plans and Employee
Pension Benefit Plans
Schedule 3.15 Employment Contracts and Collective Bargaining Agreements
Schedule 3.16 Leases, Subleases, Contracts and Agreements; Participation; Default of Contracts; Marketable Title
Schedule 3.17 Related Company Transactions
Schedule 3.18 Compliance with Laws
Schedule 3.19 Insurance Policies
Schedule 3.20 Loans Exceeding Legal Lending Limit, Troubled Loans
Schedule 3.22 Patents, Trademarks and Copyrights
Schedule 3.23 Environmental Compliance
Schedule 3.24 Regulatory Actions; Agreements
Schedule 3.25 Title to Properties; Title Policies; Property
Schedule 3.29 Stock Transactions
Schedule 3.30 Stock Option Plans
Schedule 4.2 Victoria Prior Consents
Schedule 5.1(d) Insurance Policies to be Maintained
Schedule 5.1(j) List of Accounts and Safe Deposit Boxes
Schedule 5.1(k) List of Liabilities and Obligations of the Company and the Bank
Schedule 7.9 Environmental Matters
Schedule 7.12 List of Proxy Holders Voting Affirmatively for the Agreement
Schedule 8.2(j) List of Credits to be Removed from Bank

</TABLE>

iv
<PAGE> 112
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
A Pooling Transfer Restrictions Agreement
B Exchange Agent Agreement
C Pooling of Interest Criteria
D Voting Agreement and Irrevocable Proxy
E Opinion of Counsel for the Company and the Bank
F Opinion of Counsel for Victoria
G Release of Claims
H Release of Claims

</TABLE>

v
<PAGE> 113
AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger ("Agreement") is dated as of January
12, 1995, by and between Victoria Bankshares, Inc., a Texas corporation
("Victoria"), and United Bancshares, Inc., a Texas corporation ("Company").

WHEREAS, Victoria desires to affiliate with the Company and its
wholly-owned subsidiary, Rosenberg Bank and Trust, a Texas state bank (the
"Bank"), and the Company and the Bank desire to affiliate with Victoria in the
manner provided in this Agreement;

WHEREAS, Victoria and the Company believe that the Merger (as defined
herein) of the Company with and into Victoria in the manner provided by, and
subject to the terms and conditions set forth in, this Agreement and all
exhibits, schedules and supplements hereto is desirable and in the best
interests of their respective institutions and shareholders;

WHEREAS, immediately subsequent to the Merger, Victoria shall cause
the Bank to merge into Victoria Bank and Trust Company, ("VB&T"), a Texas state
bank and wholly-owned subsidiary of Victoria (the "Subsequent Merger"); and

WHEREAS, the respective boards of directors of the Company and
Victoria have approved this Agreement and the proposed transactions
substantially on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:

ARTICLE I.
THE MERGER

SECTION 1.1 THE MERGER. Upon the terms and subject to the
conditions hereof, and in accordance with the Texas Business Corporation Act
(the "TBCA"), the Company shall be merged with and into Victoria (the "Merger")
as soon as practicable following the satisfaction or waiver, if permissible, of
the conditions set forth in Article VII hereof. Following the Merger, Victoria
shall continue as the surviving corporation (the "Surviving Corporation") and
the separate corporate existence of the Company shall cease.

SECTION 1.2 EFFECTIVE TIME. The Merger shall be consummated by
the filing with the Texas Secretary of State of Articles of Merger, in the form
required by and executed in accordance with the relevant provisions of the
TBCA, and by the issuance of a Certificate of Merger by the Secretary of State
of Texas. The date of such issuance and filing or such other time and date as
may be specified in the Articles and Certificate of Merger shall be the
"Effective Time."
<PAGE> 114
SECTION 1.3 CERTAIN EFFECTS OF THE MERGER. The Merger shall have
the effects set forth in Article 5.06 of the TBCA.

SECTION 1.4 ARTICLES OF INCORPORATION AND BYLAWS. The Articles
of Incorporation and the Bylaws of Victoria, in each case as in effect at the
Effective Time, shall be the Articles of Incorporation and Bylaws of the
Surviving Corporation.

SECTION 1.5 DIRECTORS AND OFFICERS. The directors and officers
of Victoria at the Effective Time shall be the directors and officers of the
Surviving Corporation and shall hold office from the Effective Time until their
respective successors are duly elected or appointed and qualified in the manner
provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by law.

SECTION 1.6 CONVERSION OF SHARES; FRACTIONAL SHARES.

(a) Each share of the Company's common stock, par value $1.00 per
share ("Company Common Stock"), issued and outstanding immediately prior to the
Effective Time, other than Dissenting Shares (as defined in Section 2.1),
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and represent the right to receive the consideration
payable as set forth below (the "Merger Consideration") to the holder of record
thereof, without interest thereon, upon surrender of the certificates
representing such shares of Company Common Stock (collectively, the "Shares").
For the purposes of determining the number of Shares issued and outstanding,
the number of Shares issued and outstanding shall be increased by the number
and class of Shares that may be acquired upon exercise or conversion of any
warrant, option, convertible debenture or other security entitling the holder
thereof to acquire Shares which is in effect or outstanding prior to the
Effective Time.
(b) The aggregate number of shares of Victoria Common Stock
payable as Merger Consideration shall be a number, which multiplied by the
Pricing Average (as defined below), shall equal $7,950,000. The "Pricing
Average" shall be the average closing price for Victoria Common Stock as
reported by the Nasdaq National Market over a ten (10) trading day period
ending on the last day of the month ending prior to the consummation of the
Merger. Each holder of Company Common Stock shall receive for each share of
Company Common Stock held immediately prior to the Effective Time a number of
shares of Victoria Common Stock equal to the Exchange Ratio. The "Exchange
Ratio" shall equal (i) the aggregate number of shares of Victoria Common Stock
payable as Merger Consideration, divided by (ii) the number of shares of
Company Common Stock outstanding immediately prior to the Effective Time. The
Exchange Ratio shall be adjusted appropriately and proportionately to reflect
the change of shares of Victoria Common Stock into a different number of shares
or a different class of shares by reason of any reclassification,
recapitalization, split-up, combination, exchange of shares or readjustment, or
similar transaction or any stock dividends or splits with respect to Victoria
Common Stock, where the record date occurs prior to the Effective Time.

2
<PAGE> 115
(c) Victoria will not issue any certificates for any fractional
shares of Victoria Common Stock otherwise issuable pursuant to the Merger. In
lieu of issuing such fractional shares, Victoria shall pay cash to any holder
of Shares otherwise entitled to receive such fractional share. Such cash
payment shall be based on the Pricing Average.

SECTION 1.7 MERGER CONSIDERATION ADJUSTMENT. If the real estate
owned by the Company known as "Great American Recreation" is sold in its
entirety for an aggregate cash purchase price of $372,000 or greater prior to
the consummation of the Merger, the aggregate number of shares of Victoria
Common Stock payable as Merger Consideration shall be a number, which
multiplied by the Pricing Average, shall equal $8,100,000.

SECTION 1.8 SHAREHOLDERS' MEETING. The Company, acting through
its Board of Directors, shall, in accordance with applicable law:

(a) duly call, give notice of, convene and hold a meeting (the
"Shareholders' Meeting") of its shareholders at a mutually agreeable time for
the purpose of approving and adopting this Agreement;

(b) require no greater than the minimum vote required by
applicable law of each class of the Shares in order to approve the Merger and
cause the Bank to require no greater than the minimum vote required by
applicable law in order to approve the Subsequent Merger;

(c) include in the Proxy Statement (defined in paragraph (e)
below) the unanimous recommendation of its Board of Directors that the
shareholders of the Company vote in favor of the approval and adoption of this
Agreement and the Merger;

(d) cause the Company, as the sole shareholder of the Bank, to
vote in favor of the approval and adoption of the Subsequent Merger, subject to
the effectiveness of the Merger; and

(e) use its best efforts (i) to obtain and furnish the information
required to be included by it in the Proxy Statement and cause the Proxy
Statement to be mailed to its shareholders at the earliest practicable time
following the date of this Agreement, and (ii) to obtain the approval and
adoption of the Merger by shareholders holding at least the minimum number of
Shares of each class of the Shares entitled to vote at the Shareholders'
Meeting to approve the Merger under applicable law. The letter to
shareholders, notice of meeting, proxy statement and form of proxy to be
distributed to shareholders in connection with the Merger shall be in form and
substance reasonably satisfactory to Victoria, and are collectively referred to
herein as the "Proxy Statement."

SECTION 1.9 REGISTRATION OF THE VICTORIA COMMON STOCK.

(a) Victoria shall file a registration statement (the
"Registration Statement") with the Securities and Exchange Commission ("SEC")
under the Securities Act of 1933, as amended

3
<PAGE> 116
("Securities Act"), covering the shares of Victoria Common Stock to be issued
to Company shareholders in the Merger.

(b) The Company has entered into and used its best efforts to
cause each Company shareholder who is an "affiliate" (as defined in SEC Rule
405) of the Company to enter into with Victoria a written agreement in
substantially the form of Exhibit A attached hereto.

SECTION 1.10 RETIREMENT OF COMPANY INDEBTEDNESS; REDEMPTION OF
COMPANY PREFERRED STOCK; EXPENSES. Immediately prior to the Effective Time,
the Company will cause the Bank to declare a dividend in sufficient amount to
enable the Company to (a) repay all of the outstanding principal and any
accrued interest through the Effective Time on the Company's indebtedness as
set forth on Schedule 3.11 to this Agreement, (b) redeem all shares of the
Company's issued and outstanding Series A 7-1/2% Cumulative Preferred Stock and
Series B 10% Cumulative Preferred Stock for the liquidation value of such
shares plus any accrued and unpaid dividends thereon through the Effective
Date, and (c) accrued expenses related to the Merger.

SECTION 1.11 CLOSING. Upon the terms and subject to the
conditions hereof, as soon as practicable after the vote of the shareholders of
the Company in favor of the approval and adoption of this Agreement and the
satisfaction or waiver, if permissible, of the conditions set forth in Article
VII hereof, the Company and Victoria shall execute and deliver the Articles of
Merger as described in Section 1.2, and the parties hereto shall take all such
other and further actions as may be required by law to make the Merger
effective. Prior to the filing referred to in this Section, a closing (the
"Closing") will be held at a mutually agreeable location in Houston, Texas (or
such other place as the parties may agree) for the purpose of confirming all of
the foregoing.

ARTICLE II.
DISSENTING SHARES; EXCHANGE OF SHARES

SECTION 2.1 DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, Shares which are issued and outstanding immediately
prior to the Effective Time and which are held by shareholders who have not
voted such shares in favor of the Merger and who shall have delivered a written
demand for payment of the fair value of such shares within the time and in the
manner provided in Article 5.12 of the TBCA (the "Dissenting Shares") shall not
be converted into or be exchangeable for the right to receive the Merger
Consideration provided in Section 1.6 of this Agreement, unless and until such
holder shall have failed to perfect or shall have effectively withdrawn or lost
his right to appraisal and payment under the TBCA. If any such holder shall
have so failed to perfect or shall have effectively withdrawn or lost such
right, such holder's Shares shall thereupon be deemed to have been converted
into and to have become exchangeable for, at the Effective Time, the right to
receive the Merger Consideration without any interest thereon.

4
<PAGE> 117
SECTION 2.2 EXCHANGE OF SHARES.

(a) Victoria shall deposit or cause to be deposited in trust with
Victoria Bank and Trust Company, Victoria, Texas (the "Exchange Agent"),
pursuant to an exchange agent agreement in substantially the form attached
hereto as Exhibit B (the "Exchange Agent Agreement"), prior to the Effective
Time cash in an aggregate amount estimated to be sufficient to make the cash
payments in lieu of fractional shares of Victoria Common Stock pursuant to
Section 1.6 hereof and to make the appropriate cash payments, if any, to
holders of Dissenting Shares (such amounts being hereinafter referred to as the
"Exchange Fund"). The Exchange Agent shall, pursuant to irrevocable
instructions jointly given by the Company and Victoria, promptly make the
payments in lieu of fractional shares out of the Exchange Fund upon surrender
of Shares in accordance with Section 2.2(b). Payments to dissenting
shareholders shall be made as required by Article 5.12 of the TBCA. Subject to
holding sufficient cash to make prompt payments to holders of Shares, the
Exchange Agent shall invest the Exchange Fund as provided in the Exchange Agent
Agreement. The Exchange Fund shall not be used for any other purpose, except
as provided in this Agreement.

(b) Promptly after the Effective Time and subject to Section 2.1,
the Exchange Agent shall deliver at the Closing or mail to each record holder
of an outstanding certificate or certificates which as of the Effective Time
represented Shares (the "Certificates"), a form letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon proper delivery of the Certificates to
the Exchange Agent) and instructions for use in effecting the surrender of the
Certificates for payment therefor. Upon surrender to the Exchange Agent of a
Certificate, together with such letter of transmittal duly executed, the holder
of such Certificate shall be entitled to receive in exchange therefor Victoria
Common Stock in the amount provided in Section 1.6, and such Certificate shall
forthwith be canceled. Victoria shall provide the Exchange Agent with
certificates for Victoria Common Stock, as requested by the Exchange Agent, in
the amounts provided in Section 1.6 hereof. No dividend will be disbursed with
respect to the shares of Victoria Common Stock until the holder's Shares are
surrendered in exchange therefor. If payment or delivery of Victoria Common
Stock is to be made to a person other than the person in whose name the
Certificate surrendered is registered, it shall be a condition of payment that
the Certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such payment shall pay
any transfer or other taxes required by reason of the payment and delivery of
Victoria Common Stock to a person other than the registered holder of the
Certificate surrendered or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until
surrendered in accordance with the provisions of this Section 2.2, each
Certificate (other than Certificates representing Dissenting Shares) shall
represent for all purposes the right to receive the Merger Consideration
without any interest thereon.

(c) After the Effective Time, the stock transfer ledger of the
Company shall be closed and there shall be no transfers on the stock transfer
books of the Company of the Shares which were outstanding immediately prior to
such time of filing. If, after the Effective Time,

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Certificates are presented to the Surviving Corporation, they shall be promptly
presented to the Exchange Agent and exchanged as provided in this Article II.

(d) Any portion of the Exchange Fund (including the proceeds of
any investments thereof) that remains unclaimed by the shareholders of the
Company for six months after the Effective Time shall be paid to Victoria, and
the holders of Shares not theretofore presented to the Exchange Agent shall
look to Victoria only, and not the Exchange Agent, for the payment of any
Merger Consideration in respect of such shares.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby makes the representations and warranties set forth
in this Article III to Victoria. The Company agrees at the Closing to provide
Victoria with supplemental Schedules reflecting any changes thereto between the
date of such Schedules and the date of the Closing.

SECTION 3.1 ORGANIZATION AND QUALIFICATION. The Company is a
Texas corporation and a bank holding company under the Bank Holding Company Act
of 1956, as amended, and is duly organized, validly existing and in good
standing under the laws of the State of Texas and all laws, rules, and
regulations applicable to bank holding companies. The Bank is a Texas state
bank, duly organized, validly existing and in good standing under the laws of
the State of Texas. Each of the Company and the Bank has all requisite
corporate power and authority to conduct its business as now being conducted
and to own, lease and operate its properties and assets as now owned, leased
and operated. Except as set forth on Schedule 3.17, the Company does not own
or control any Affiliate (as defined in Section 3.17) or Subsidiary (as defined
in Section 10.13(a)) other than the Bank. True and correct copies of the
Articles of Incorporation or Association and Bylaws of the Company and the
Bank, with all amendments thereto through the date of this Agreement, have been
delivered by the Company to Victoria. The nature of the business of the
Company and the Bank and their respective activities, as currently conducted,
do not require them to be qualified to do business in any jurisdiction other
than the State of Texas.

SECTION 3.2 COMPANY CAPITALIZATION. As of the date hereof, the
authorized capital stock of the Company consists solely of (a) 5,000,000 shares
of Company Common Stock, of which 235,806 shares are issued and outstanding,
and 92 shares of which are held in treasury, and (b) 1,000,000 shares of
Preferred Stock, which are divided into (x) 66,726 shares of Series A 7-1/2%
Cumulative Preferred Stock, of which 42,589 shares are issued and outstanding,
and none of which are held in treasury, and (y) 26,667 shares of Series B 10%
Cumulative Preferred Stock, all of which are issued and outstanding, and none
of which are held in treasury. Except for Company Preferred Stock or as set
forth on Schedule 3.2, there are no outstanding subscriptions, options,
convertible securities, rights, warrants, calls, or other agreements or
commitments of any kind issued or granted by, or binding upon, the Company or
its Subsidiaries to purchase or otherwise acquire any security of or equity
interest in the

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Company or its Subsidiaries. Except for Company Preferred Stock or as set
forth on Schedule 3.2, there are no outstanding subscriptions, options, rights,
warrants, calls, convertible securities or other agreements or commitments
obligating the Company to issue any shares of the Company, or to the knowledge
of the Company, irrevocable proxies or any agreements restricting the transfer
of or otherwise relating to shares of its capital stock of any class. All of
the Shares that have been issued have been duly authorized, validly issued and
are fully paid and nonassessable, and are free of preemptive rights. There are
no restrictions applicable to the payment of dividends on the Shares except
pursuant to the TBCA and, except as set forth on Schedule 3.2, all dividends
declared prior to the date hereof have been paid.

SECTION 3.3 SUBSIDIARY CAPITALIZATION; OTHER SECURITIES. All of
the issued and outstanding shares of the capital stock of the Bank (i) are duly
authorized, validly issued, fully paid and nonassessable, and (ii) except as
set forth in Schedule 3.3, are free and clear of any liens, claims, security
interests and encumbrances of any kind. There are no irrevocable proxies with
respect to such shares and there are no outstanding or authorized
subscriptions, options, warrants, calls, rights, or other agreements or
commitments of any kind restricting the transfer of, requiring the issuance or
sale of, or otherwise relating to any of such shares of capital stock to any
person. The Company owns directly all of the issued and outstanding capital
stock the Bank. Neither the Company nor the Bank has any equity ownership
interest in any other person other than the Bank.

SECTION 3.4 AUTHORITY RELATIVE TO THE AGREEMENT. The Company has
full corporate power and authority to execute and deliver this Agreement and,
except for the approval by the Company's shareholders, no further proceedings
on the part of the Company are necessary, to consummate the transactions
contemplated hereby which have been duly and validly authorized by its Board of
Directors. This Agreement has been duly executed and delivered by the Company
and is a duly authorized, valid, legally binding and enforceable obligation of
the Company, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, or other similar laws relating to creditors' rights generally and
general equitable principles, and subject to such shareholder approvals and
such approval of regulatory agencies and other governmental authorities having
authority over the Company as may be required by statute or regulation. Except
as set forth on Schedule 3.4, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
conflict with, or result in any violation or breach of or default under the
respective Articles of Incorporation or Association or Bylaws of the Company or
the Bank or any agreement, document or instrument by which the Company or the
Bank are obligated or bound.

SECTION 3.5 NO VIOLATION. Except as set forth on Schedule 3.5,
neither the execution, delivery nor performance of this Agreement in its
entirety, nor the consummation of all of the transactions contemplated hereby,
following the receipt of such approvals as may be required from the Company's
shareholders, the SEC, the Federal Deposit Insurance Corporation ("FDIC"), the
Board of Governors of the Federal Reserve System ("FRB"), and the Texas
Department of Banking ("Department") will (i) violate (with or without the
giving of notice or the passage of time), any law, order, writ, judgment,
injunction, award, decree, rule, statute,

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ordinance or regulation applicable to the Company or the Bank or (ii) be in
conflict with, result in a breach or termination of any provision of, cause the
acceleration of the maturity of any debt or obligation pursuant to, constitute
a default (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of any security interest, lien,
charge or other encumbrance upon any property or assets of the Company or the
Bank pursuant to, any terms, conditions or provisions of any note, license,
instrument, indenture, mortgage, deed of trust or other agreement or
understanding or any other restriction of any kind or character, to which the
Company or the Bank are a party or by which any of their assets or properties
are subject or bound. Except as set forth on Schedule 3.5, there are no
proceedings pending or, to the knowledge of the Company or the Bank,
threatened, against the Company or the Bank or involving the Shares, at law or
in equity or before or by any foreign, federal, state, municipal or other
governmental court, department, commission, board, bureau, agency,
instrumentality or other person which may result in liability to Victoria upon
the consummation of the transactions contemplated hereby or which would prevent
or delay such consummation. Except as set forth in Schedule 3.5, or as
contemplated hereby, the corporate existence, business organization, assets,
licenses, permits, authorizations and material contracts of the Company and the
Bank will not be terminated or impaired by reason of the execution, delivery or
performance by the Company of this Agreement or consummation by the Company of
the transactions contemplated hereby, assuming the receipt of required
shareholder and regulatory approvals.

SECTION 3.6 CONSENTS AND APPROVALS. The Company's Board of
Directors (at a meeting called and duly held) has unanimously resolved to
recommend approval and adoption of this Agreement by the Company's
shareholders. Except the filing of the Articles of Merger under the TBCA, and
such approvals as may be required from the SEC, the FRB, the FDIC and the
Department and holders of Shares under the TBCA and except as described in
Schedule 3.6 hereto, no prior consent, approval or authorization of, or
declaration, filing or registration with any person, domestic or foreign, is
required of the Company or the Bank in connection with the execution, delivery
and performance by the Company of this Agreement and the transactions
contemplated hereby or the resulting change of control of the Bank.

SECTION 3.7 REGULATORY REPORTS. Except as set forth on Schedule
3.7, the Company and the Bank have filed all reports, registrations and
statements, together with any amendments required to be made thereto, that are
required to be filed with the FRB, the Department, the FDIC, or any other
regulatory authority having jurisdiction over any such persons, other than
plans, reports or information listed on Schedule 3.7.

SECTION 3.8 SEC STATUS; SECURITIES ISSUANCES. The Company is not
subject to the registration provisions of Section 12 of the Exchange Act nor
the rules and regulations of the SEC promulgated under Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than
anti-fraud provisions of the Exchange Act. All issuances of securities by the
Company and the Bank have been registered under the Securities Act, the
Securities Act of the State of Texas, and all other applicable laws or were
exempt from any such registration requirements.

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SECTION 3.9 FINANCIAL STATEMENTS. The Company has provided
Victoria with a true and complete copy of (i) the audited consolidated
statement of financial position of the Company and its Subsidiaries as of
December 31, 1993, and the related consolidated statements of income,
shareholders' equity and changes in cash flows for the years ended December 31,
1992 and 1993, and (ii) the unaudited consolidated statement of financial
position of the Company and its Subsidiaries as of September 30, 1994 and 1993
and the related consolidated statements of income and shareholders' equity for
the periods ended September 30, 1994 and 1993. The Company will provide
Victoria as promptly as practicable with a true and complete copy of (a) the
unaudited consolidated statement of financial position of the Company and its
Subsidiaries as of the end of each month after September 30, 1994, and (b) the
audited consolidated statement of financial position of the Company and its
Subsidiaries as of December 31, 1994, and the related consolidated statements
of income, shareholders' equity and changes in cash flows for the year ending
December 31, 1994, all prepared on a basis consistent with prior periods. Such
audited consolidated statements for the fiscal year ending December 31,1994
shall be delivered by the Company to Victoria on or before February 10, 1995.
Such consolidated statements of financial position and the related consolidated
statements of income, shareholders' equity and changes in cash flows, together
with the notes and schedules thereto, are collectively referred to herein as
the "Financial Statements." The Financial Statements, including the
consolidated statement of financial position and the related consolidated
statements of income, shareholders' equity and changes in cash flows (including
the related notes thereto) of the Company and its Subsidiaries, present fairly,
and will present fairly, the consolidated financial position of the Company and
its Subsidiaries as of the dates thereof and the consolidated results of
operations and cash flows of the Company and its Subsidiaries for the periods
then ended and ending, in conformity with generally accepted accounting
principles ("GAAP") applied on a basis consistent with prior periods (subject,
in the case of the unaudited interim financial statements, to normal year-end
adjustments and the fact that they do not contain all of the footnote
disclosures required by GAAP), except as otherwise noted therein, and the
accounting records underlying the Financial Statements accurately and fairly
reflect, and will accurately and fairly reflect, in all material respects the
transactions of the Company and its Subsidiaries. As of their dates, the
Financial Statements conformed, and will conform when delivered, in all
material respects with all applicable rules and regulations promulgated by the
FRB, the FDIC and the Department. Neither the Company nor its Subsidiaries
have any liabilities or obligations of a type which should be included in or
reflected on the Financial Statements if prepared in accordance with GAAP,
whether related to tax or non-tax matters, accrued or contingent, due or not
yet due, liquidated or unliquidated, or otherwise, except as and to the extent
disclosed or reflected in the Financial Statements.

SECTION 3.10 ABSENCE OF CERTAIN CHANGES. Except as and to the
extent set forth on Schedule 3.10, since September 30, 1994 (the "Balance Sheet
Date") neither the Company nor the Bank has:

(a) made any amendment to its Articles of Incorporation or
Association or Bylaws or changed the character of its business in any material
manner;

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(b) suffered any Material Adverse Effect (as defined in Section
10.13(b));

(c) entered into any agreement, commitment or transaction except
in the ordinary course of business and consistent with prudent banking
practices;

(d) except in the ordinary course of business and consistent with
prudent banking practices, incurred, assumed or become subject to, whether
directly or by way of any guarantee or otherwise, any obligations or
liabilities (absolute, accrued, contingent or otherwise);

(e) permitted or allowed any of its property or assets to be
subject to any mortgage, pledge, lien, security interest, encumbrance,
restriction or charge of any kind (other than statutory liens not yet
delinquent) except in the ordinary course of business and consistent with
prudent banking practices;

(f) except in the ordinary course of business and consistent with
prudent banking practices, canceled any debts, waived any claims or rights, or
sold, transferred, or otherwise disposed of any of its properties or assets;

(g) disposed of or permitted to lapse any rights to the use of any
trademark, service mark, trade name or copyright, or disposed of or disclosed
to any person other than its employees or agents, any trade secret not
theretofore a matter of public knowledge;

(h) except for regular salary increases granted in the ordinary
course of business within the Company's or the Bank's 1994 or 1995 budget and
consistent with prior practices granted any increase in compensation or paid or
agreed to pay or accrue any bonus, percentage compensation, service award,
severance payment or like benefit to or for the credit of any director,
officer, employee or agent, or entered into any employment or consulting
contract or other agreement with any director, officer or employee or adopted,
amended or terminated any pension, employee welfare, retirement, stock
purchase, stock option, stock appreciation rights, termination, severance,
income protection, golden parachute, savings or profit-sharing plan (including
trust agreements and insurance contracts embodying such plans), any deferred
compensation, or collective bargaining agreement, any group insurance contract
or any other incentive, welfare or employee benefit plan or agreement
maintained by the Company or its Subsidiaries, for the directors, employees or
former employees of the Company or its Subsidiaries ("Employee Benefit Plan");

(i) directly or indirectly declared, set aside or paid any
dividend or made any distribution in respect to its capital stock, except for
dividends paid to the Company by the Bank and except for regular quarterly
dividends on the Company Preferred Stock consistent with past practice, or
redeemed, purchased or otherwise acquired, or arranged for the redemption,
purchase or acquisition of, any shares of its capital stock or other of its
securities, except for shares of Company Preferred Stock to be redeemed
immediately prior to the Effective Time.

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(j) organized or acquired any capital stock or other equity
securities or acquired any equity or ownership interest in any person (except
through settlement of indebtedness, foreclosure, the exercise of creditors'
remedies or in a fiduciary capacity, the ownership of which does not expose the
Company or the Bank to any liability from the business, operations or
liabilities of such person);

(k) issued, reserved for issuance, granted, sold or authorized the
issuance of any shares of its capital stock or subscriptions, options,
warrants, calls, rights or commitments of any kind relating to the issuance or
sale of or conversion into shares of its capital stock;

(l) made any or acquiesced with any change in any accounting
methods, principles or practices;

(m) experienced any material adverse change in relations with
customers or clients of the Company or the Bank;

(n) except for the transactions contemplated by this Agreement or
as otherwise permitted hereunder, entered into any transaction, or entered
into, modified or amended any contract or commitment, other than in the
ordinary course of business and consistent with prudent banking practices; or

(o) agreed, whether in writing or otherwise, to take any action
the performance of which would change the representations contained in this
Section 3.10 in the future so that any such representation would not be true in
all material respects as of the Closing.

SECTION 3.11 COMPANY INDEBTEDNESS. The Company has delivered to
Victoria true and complete copies of all loan documents ("Company Loan
Documents") related to indebtedness of the Company and the Bank, other than
deposits ("Company Indebtedness"), and made available to Victoria all material
correspondence concerning the status of Company Indebtedness. Schedule 3.11
sets forth all Company Indebtedness, all of which shall be extinguished prior
to Closing.

SECTION 3.12 LITIGATION. Except as set forth on Schedule 3.12,
there are no actions, suits, claims, investigations, reviews or other
proceedings pending or, to the knowledge of the Company or the Bank, threatened
against the Company or the Bank or involving any of their respective properties
or assets, at law or in equity or before or by any foreign, federal, state,
municipal, or other governmental court, department, commission, board, bureau,
agency, or other instrumentality or person or any board of arbitration or
similar entity ("Proceeding"). The Company will notify Victoria immediately in
writing of any Proceedings against the Company or the Bank.

SECTION 3.13 TAX MATTERS. The Company and the Bank have duly
filed all tax returns required to be filed by them involving a tax liability or
other material potential detriment for failure to file (the "Filed Returns")
with respect to 1991, 1992 and 1993. The statute of

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limitations has run with respect to all periods prior to 1991. The Company and
the Bank have paid, or have established adequate reserves for the payment of,
all federal income taxes and all state and local income taxes and all
franchise, property, sales, employment, foreign or other taxes required to be
paid with respect to the periods covered by the Filed Returns. With respect to
the periods for which returns have not yet been filed, the Company and the Bank
have established adequate reserves determined in accordance with GAAP for the
payment of all federal income taxes and all state and local income taxes and
all franchise, property, sales, employment, foreign or other taxes. Except as
described in Schedule 3.13, the Company and the Bank have no direct or indirect
liability for the payment of federal income taxes, state and local income
taxes, and franchise, property, sales, employment or other taxes in excess of
amounts paid or reserves established. Except as set forth on Schedule 3.13,
the Company has not entered into any tax sharing agreement or other agreement
regarding the allocation of the tax liability of the Company and the Bank or
similar arrangement with its Subsidiaries. Set forth on Schedule 3.13 are the
dates of filing of all Filed Returns and any amendments thereto which relate to
federal or state income or franchise taxes. Neither the Company nor the Bank
has filed any Internal Revenue Service ("IRS") Forms 1139 (Application for
Tentative Refund). Except as set forth on Schedule 3.13, there are no pending
questions raised in writing by the IRS or other taxing authority for taxes or
assessments of the Company or the Bank, nor are there any outstanding
agreements or waivers extending the statutory period of limitation applicable
to any tax return of the Company or the Bank for any period. The Company and
the Bank have withheld from employee wages and paid over to the proper
governmental authorities all amounts required to be so withheld and paid over.
For the purposes of this Agreement, the term "tax" shall include all federal,
state and local taxes and related governmental charges and any interest or
penalties payable in connection with the payment of taxes.

SECTION 3.14 EMPLOYEE BENEFIT PLANS. With respect to all Employee
Benefit Plans in which employees of the Company or the Bank participate the
following are true and correct:

(a) Schedule 3.14(a) lists each "employee welfare benefit plan"
(as defined in Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) maintained by the Company or the Bank or to which
the Company or the Bank contribute or are required to contribute, including any
multiemployer welfare plan (such employee welfare benefit plans being
hereinafter collectively referred to as the "Welfare Benefit Plans") and sets
forth (i) the amount of any liability of the Company or the Bank for
contributions more than thirty days past due with respect to each Welfare
Benefit Plan as of the date hereof and as of the end of any subsequent month
ending prior to the Closing and (ii) the annual cost attributable to each of
the Welfare Benefit Plans; no Welfare Benefit Plan provides for continuing
benefits or coverage for any participant, beneficiary or former employee after
such participant's or former employee's termination of employment except as may
be required by Section 4980B of the Internal Revenue Code of 1986, as amended
(the "Code"), and Sections 601-608 of ERISA;

(b) Schedule 3.14(b) lists each "employee pension benefit plan"
(as defined in Section 3(2) of ERISA and not exempted under Section 4(b) or 201
of ERISA) maintained by the

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Company or the Bank or to which the Company or the Bank contribute or are
required to contribute, including any multiemployer plan (as defined in Section
3(37) of ERISA) (such employee pension benefit plans being hereinafter
collectively referred to as the "Pension Benefit Plans");

(c) Except as disclosed in Schedule 3.14(c), all of the Pension
Benefit Plans and Welfare Benefit Plans and any related trust agreements or
annuity contracts (or any other funding instruments) comply currently, and have
complied in the past, both as to form and operation, with the provisions of
ERISA, the Code and with all other applicable laws, rules and regulations
governing the establishment and operation of the Pension Benefit Plans and
Welfare Benefit Plans; all necessary governmental approvals relating to the
establishment of the Pension Benefit Plans have been obtained; and with respect
to each Pension Benefit Plan that is intended to be tax-qualified under Section
401(a) or 403(a) of the Code, a favorable determination letter as to the
qualification under the Code of each such Pension Benefit Plan and each
material amendment thereto has been issued by the Internal Revenue Service (and
nothing has occurred since the date of the last such determination letter which
resulted in, or is likely to result in the revocation of such determination),
including amendments which may be required by the Tax Reform Act of 1986, the
Omnibus Budget Reconciliation Acts of 1986 and 1987, the Technical and
Miscellaneous Revenue Act of 1988, the Revenue Reconciliation Act of 1989 and
the Omnibus Budget Reconciliation Act of 1990;

(d) Except as disclosed in Schedule 3.14(d), each Welfare Benefit
Plan and each Pension Benefit Plan has been administered in compliance with the
requirements of the Code, ERISA and all other applicable laws, and all reports
and disclosures required by ERISA, the Code and any other applicable laws with
respect to each Welfare Benefit Plan and each Pension Benefit Plan have been
timely filed;

(e) On and after January 1, 1975, neither the Company, the Bank
nor any plan fiduciary of any Welfare Benefit Plan or Pension Benefit Plan has
engaged in any transaction in violation of Section 406 of ERISA (for which
transaction no exemption exists under Section 408 of ERISA) or in any
"prohibited transaction" as defined in Section 4975(c)(1) of the Code (for
which no exemption exists under Section 4975(c)(2) or 4975(d) of the Code);

(f) Schedule 3.14(f) lists each deferred compensation plan, bonus
plan, stock option plan, employee stock purchase plan, restricted stock, excess
benefit plan, incentive compensation, stock bonus, cash bonus, severance pay,
golden parachute, life insurance, all nonqualified deferred compensation
arrangements, rabbi trusts, all unfunded plans and any other employee benefit
plan, agreement, arrangement or commitment not required under a previous
subsection to be listed (other than normal policies concerning holidays,
vacations and salary continuation during short absences for illness or other
reasons) maintained by the Company or the Bank;

(g) Except as disclosed in Schedule 3.14(g), neither the Company,
the Bank nor any corporation or other trade or business controlled by or under
common control with the Company

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(as determined under Sections 414(b) and 414(c) of the Code) ("Common Control
Entity") is, or has been within the past five years, a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Pension Benefit Plan subject to
the provisions of Title IV of ERISA, nor has the Company, the Bank or a Common
Control Entity maintained or participated in any employee pension benefit plan
(defined in Section 3(2) of ERISA) subject to the provision of Title IV of
ERISA. In addition, neither the Company, the Bank nor a Common Control Entity
(i) is a party to a collective bargaining agreement, (ii) has maintained or
contributed to, or has participated in or agreed to participate in, a
multiemployer plan (as defined in Section 3(37) of ERISA), or (iii) has made a
complete or partial withdrawal from a multiemployer plan (as defined in Section
3(37) of ERISA) so as to incur withdrawal liability as defined in Section 4201
of ERISA (without regard to subsequent reduction or waiver of such liability
under Section 4207 or 4208 of ERISA);

(h) True and complete copies of each Welfare Benefit Plan and each
Pension Benefit Plan, related trust agreements or annuity contracts (or any
other funding instruments), summary plan descriptions, each plan, agreement,
arrangement, and commitment referred to in subsection 3.14(f) of this Section,
the most recent determination letter issued by the Internal Revenue Service
with respect to each Pension Benefit Plan, the most recent application for a
determination letter from the Internal Revenue Service with respect to each
Pension Benefit Plan and Annual Reports on Form 5500 Series filed with any
governmental agency for each Welfare Benefit Plan and each Pension Benefit Plan
for the two most recent plan years, have been furnished to Victoria;

(i) All Welfare Benefit Plans, Pension Benefit Plans, related
trust agreements or annuity contracts (or any other funding instruments), and
all plans, agreements, arrangements and commitments referred to in subsection
3.14(f) of this Section are legally valid and binding and in full force and
effect and there are no promised increases in benefits (whether expressed,
implied, oral or written) under any of these plans nor any obligations,
commitments or understandings to continue any of these plans, (whether
expressed, implied, oral or written) except as required by Section 4980B of the
Code and Sections 601-608 of ERISA;

(j) Except as disclosed in Schedule 3.14(j), there are no claims
pending with respect to, or under, any Pension Benefit Plan, Welfare Benefit
Plan or any plan, agreement, arrangement or commitment described in subsection
3.14(f), other than routine claims for plan benefits, and there are no disputes
or litigation pending or threatened with respect to any such plans;

(k) No action has been taken, nor has there been a failure to take
any action that would subject any person or entity to any liability for any
income, excise or other tax or penalty in connection with any Pension Benefit
Plan, Welfare Benefit Plan or any plan, agreement, arrangement or commitment
described in subsection 3.14(f), other than for income taxes due with respect
to benefits paid; and

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(l) Except as otherwise set forth in Schedule 3.14(l), neither the
execution and delivery of this Agreement nor the consummation of the
transaction contemplated hereby will (i) result in any payment to be made by
the Company or the Bank (including, without limitation, severance, unemployment
compensation, golden parachute (defined in Section 280G of the Code), or
otherwise becoming due to any employee, or (ii) increase any benefits otherwise
payable under any Welfare Benefit Plan, Pension Benefit Plan, or any plan,
agreements, arrangements, and commitments referred to in subsection 3.14(f) of
this Section.

SECTION 3.15 EMPLOYMENT MATTERS. Except as disclosed on Schedule
3.15, neither the Company nor the Bank is a party to any oral or written
contracts or agreements granting benefits or rights to employees or any
collective bargaining agreement or to any conciliation agreement with the
Department of Labor, the Equal Employment Opportunity Commission or any
federal, state or local agency which requires equal employment opportunities or
affirmative action in employment. There are no unfair labor practice
complaints pending against the Company or the Bank before the National Labor
Relations Board and no similar claims pending before any similar state, local
or foreign agency. There is no activity or proceeding of any labor
organization (or representative thereof) or employee group to organize any
employees of the Company or the Bank, nor of any strikes, slowdowns, work
stoppages, lockouts, or threats thereof, by or with respect to any such
employees. The Company and the Bank are in compliance in all material respects
with all applicable laws respecting employment and employment practices, terms
and conditions of employment and wages and hours, and neither the Company nor
the Bank is engaged in any unfair labor practice.

SECTION 3.16 LEASES, CONTRACTS AND AGREEMENTS. Schedule 3.16 sets
forth an accurate and complete description of all leases, subleases, licenses,
contracts and agreements to which the Company or the Bank is a party or by
which the Company or the Bank is bound which obligate or may obligate the
Company or the Bank in the aggregate for an amount in excess of $25,000 over
the entire term of any such agreement or related contracts of a similar nature
which in the aggregate obligate or may obligate the Company or the Bank in the
aggregate for an amount in excess of $25,000 over the entire term of such
related contracts (the "Contracts"). The Company has delivered to Victoria
true and correct copies of all Contracts. For the purposes of this Agreement,
the Contracts shall be deemed not to include loans made by, repurchase
agreements made by, spot foreign exchange transactions of, bankers acceptances
of, agreements with Bank customers for trust services, or deposits by the
Company or the Bank, but does include unfunded loan commitments and letters of
credit issued by the Company or the Bank where the borrowers' total
indebtedness to the Bank is in excess of $25,000. Except as set forth in
Schedule 3.16, no participation or loans have been sold which have buy-back,
recourse or guaranty provisions which create contingent or direct liabilities
of the Company or the Bank. All of the Contracts are legal, valid and binding
obligations of the parties to the Contracts enforceable in accordance with
their terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, or other similar laws relating to creditors' rights generally and
to general equitable principles, and are in full force and effect. Except as
described in Schedule 3.16, all rent and other payments by the Company and the
Bank under the Contracts are current, there are no existing defaults by the
Company or the Bank under the

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Contracts and no termination, condition or other event has occurred which
(whether with or without notice, lapse of time or the happening or occurrence
of any other event) would constitute a default. Each of the Company and the
Bank has a good and marketable leasehold interest, subject to the terms of the
leases with respect thereto, in each parcel of real property leased by it free
and clear of all mortgages, pledges, liens, encumbrances and security
interests.

SECTION 3.17 RELATED COMPANY TRANSACTIONS. Schedule 3.17 sets
forth all Affiliates and Subsidiaries of the Company, other than the Bank.
Except as set forth on Schedule 3.17, there are no agreements, instruments,
commitments, extensions of credit, tax sharing or allocation agreements or
other contractual agreements of any kind between or among the Company, whether
on its own behalf or in its capacity as trustee or custodian for the funds of
any employee benefit plan (as defined in ERISA), and any of its Affiliates
(including the Bank). The term "Affiliate" as used in this Agreement means,
with respect to any person, any person that, directly or indirectly, controls,
is controlled by, or is under common control with, such person in question.
For the purposes of this definition, "control" (including, with correlative
meaning, the terms "controlled by" and "under common control with") as used
with respect to any person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such person, whether through the ownership of voting securities or by contract
or otherwise.

SECTION 3.18 COMPLIANCE WITH LAWS. Except as set forth on
Schedule 3.18, neither the Company nor the Bank is in default with respect to
or is in material violation of (i) any judgment, order, writ, injunction or
decree of any court or (ii) any statute, law, ordinance, rule, order or
regulation of any governmental department, commission, board, bureau, agency or
instrumentality, federal, state or local, and the consummation of the
transactions contemplated by this Agreement will not constitute such a default
or violation as to the Company or the Bank. The Company and the Bank have all
permits, licenses, and franchises from governmental agencies required to
conduct their businesses as they are now being conducted.

SECTION 3.19 INSURANCE. The Company and the Bank have in effect
the insurance coverage (including fidelity bonds) described in Schedule 3.19
and have had adequate insurance in force for the last 5 years. Except as
disclosed in Schedule 3.19, there have been no claims under such bonds within
the last 5 years and neither the Company nor the Bank is aware of any facts
which would form the basis of a claim under such bonds. Neither the Company
nor the Bank has any reason to believe that the existing fidelity coverage
would not be renewed by its carrier on substantially the same terms.

SECTION 3.20 LOANS. Each loan reflected as an asset in the
Financial Statements is the legal, valid and binding obligation of the obligor
of each loan, enforceable in accordance with its terms, subject to the effect
of bankruptcy, insolvency, reorganization, moratorium, or other similar laws
relating to creditors' rights generally and to general equitable principles.
For purposes of the foregoing sentence, it is understood and agreed that the
phrase "enforceable in accordance with its terms" shall not mean that the
borrower has the financial ability to pay a loan or that the collateral is
sufficient in value to result in payment of the loan secured thereby.

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The Bank does not have in its portfolio any loan exceeding its legal lending
limit, and except as disclosed on Schedule 3.20, the Bank has no delinquent,
substandard, doubtful, loss, nonperforming or classified loans.

SECTION 3.21 FIDUCIARY RESPONSIBILITIES. The Company and the Bank
have performed in all material respects all of their respective duties as a
trustee, custodian, guardian, agent or as an escrow agent in a manner which
complies in all respects with all applicable laws, regulations, orders,
agreements, instruments and common law standards.

SECTION 3.22 PATENTS, TRADEMARKS AND COPYRIGHTS. Except as set
forth in Schedule 3.22, neither the Company nor the Bank requires the use of
any material patent, patent application, invention, process, trademark (whether
registered or unregistered), trademark application, trade name, assumed name,
service mark, copyright, or any material trade secret for the business or
operations of the Company or the Bank. The Company and the Bank own or are
licensed or otherwise have the right to use the items listed in Schedule 3.22.

SECTION 3.23 ENVIRONMENTAL COMPLIANCE. Except as set forth in
Schedule 3.23:

(a) The Company, the Bank and any property owned or operated by
them are in compliance with all applicable Environmental Laws (as defined in
Section 10.13(c)) and have obtained and are in compliance with all permits,
licenses and other authorizations required under any Environmental Law. There
is no past or present event, condition or circumstance that is likely to
interfere with the conduct of the business of the Company or the Bank in the
manner now conducted relating to such entity's compliance with Environmental
Laws or constitute a material violation thereof or which would have a Material
Adverse Effect upon the Company or the Bank;

(b) Neither the Company nor the Bank does now or has leased,
operated, owned, or exercised managerial functions at any facilities or real
property with respect to which such entity, facility or real property is
subject to any actual, potential, or, to the knowledge of the Company or the
Bank, threatened Proceeding under any Environmental Law;

(c) There are no actions or Proceedings pending or, to the
knowledge of the Company or the Bank, threatened against the Company or the
Bank under any Environmental Law, and neither the Company nor the Bank has
received any notice (whether from any regulatory body or private person) of
material violation, or potential or threatened material violation, of any
Environmental Law;

(d) There are no actions or Proceedings pending or, to the
knowledge of the Company or the Bank, threatened under any Environmental Law
involving the release or threat of release of any Polluting Substances (as
defined in Section 10.13(d)) at or on (i) any Property currently or in the past
owned, operated, or leased by the Company or the Bank or over which the Company
or the Bank exercised managerial functions, or (ii) at any property where
Polluting Substances generated by the Company or the Bank have been disposed;

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(e) There is no Property for which the Company or the Bank is or
was required to obtain any Permit under an Environmental Law to construct,
demolish, renovate, occupy, operate, or use such Property or any portion of it;

(f) Except as disclosed to Victoria, neither the Company nor the
Bank has generated any Polluting Substances and for any such Polluting
Substances properly executed manifests are on record with them and any
appropriate regulatory agency;

(g) There has been no release of Polluting Substances in violation
of any Environmental Laws, which would require any report or notification to
any governmental or regulatory authority, in or on any Property;

(h) Neither any Property, the Company nor the Bank are subject to
investigation or pending or, to the knowledge of the Company or the Bank,
threatened litigation by federal, state or local officials or private litigant
as a result of any previous on-site management, treatment, storage, release or
disposal of Polluting Substances or exposure to any Polluting Substances;

(i) There are no underground or above ground storage tanks on or
under any Property which are not in conformity with Environmental Laws and any
Property previously containing such tanks has been remediated in compliance
with all Environmental Laws;

(j) There is no asbestos containing material on any Property; and

(k) For purposes of this Section 3.23 and Section 7.9, "Property"
includes any property (whether real or personal) which the Company or the Bank
currently or in the past have leased, operated or owned or managed in any
manner, including, without limitation, any property acquired by foreclosure or
deed in lieu thereof and property now held as security for a loan or other
indebtedness by the Company or the Bank.

SECTION 3.24 REGULATORY ACTIONS. Except as set forth on Schedule
3.24, there are no actions or proceedings pending or, to the knowledge of the
Company or its Subsidiaries, threatened against the Company or the Bank by or
before the FRB, the FDIC, the Department, the U.S. Environmental Protection
Agency, the Texas Natural Resource Conservation Commission, the U.S. Department
of Justice, HUD, or any other nation or government, any state or political
subdivision thereof, or any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government. Except
as set forth on Schedule 3.24, neither the Company nor the Bank is subject to a
formal or informal agreement, memorandum of understanding, enforcement action
with or any type of financial assistance by any regulatory authority having
jurisdiction over such entity. Neither the Company nor the Bank has taken or
agreed to take any action or has knowledge of any fact or circumstance that
would materially impede or delay receipt of any required regulatory approval.

SECTION 3.25 TITLE TO PROPERTIES; ENCUMBRANCES. Except as set
forth on Schedule 3.25, each of the Company and the Bank has unencumbered,
good, legal, and

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marketable title to all its properties and assets, real and personal,
including, without limitation, all the properties and assets reflected in the
Financial Statements except for those properties and assets disposed of
for fair market value in the ordinary course of business and consistent with
prudent banking practice since the date of the Financial Statements. Except as
set forth on Schedule 3.25, the Company has a title policy in full force and
effect from a title insurance company which, to the best of Company's
knowledge, is solvent, insuring good and indefeasible title to all real
property owned by the Company or the Bank in favor of the Company or the Bank,
whichever is applicable. The Company has made available to Victoria all of the
files and information in the possession of the Company and the Bank concerning
such properties, including any title exceptions which might affect marketable
title or value of such property. The Company and the Bank each hold good and
legal title or good and valid leasehold rights to all assets that are necessary
for them to conduct their respective businesses as they are currently being
conducted. Except as set forth on Schedule 3.25, the Company and the Bank own
all furniture, equipment, art and other property used to transact business
presently located on their premises.

SECTION 3.26 SHAREHOLDER LIST. The Company has provided to
Victoria prior to the date of this Agreement a list of the holders of Shares,
Company Preferred Stock, and the holders of any outstanding warrant, option,
convertible debenture or other security entitling the holder thereof to acquire
Shares as of the date of this Agreement containing the names, addresses and
number of Shares or such other securities held of record, which is accurate in
all respects as of such date, and the Company will promptly, and in any event
prior to the mailing of the Proxy Statement, advise Victoria of any significant
changes thereto.

SECTION 3.27 PROXY STATEMENT. None of the information supplied or
to be supplied by the Company or the Bank, or, to the knowledge of the Company
or its Subsidiaries, any of their respective directors, officers, employees or
agents for inclusion in:

(a) the Proxy Statement; or

(b) any registration statement or other documents to be filed
with the SEC or any regulatory or governmental agency or
authority in connection with the transactions contemplated
hereby, at the respective times such documents are filed, and,
with respect to the Proxy Statement, when first mailed to the
shareholders of Company;

will be false or misleading with respect to any material fact, or omit to state
any material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, or, in the
case of the Proxy Statement or any amendment thereof or supplement thereto, at
the time of the Shareholders' Meeting, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Shareholders' Meeting. All documents that the Company or the
Bank are responsible for filing with any

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regulatory or governmental agency in connection with the Merger will comply in
all material respects with the provisions of applicable law.

SECTION 3.28 DISSENTING SHAREHOLDERS. The Company and the Bank,
and their respective directors, have no knowledge of any plan or intention on
the part of any Company shareholders to make written demand for payment of the
fair value of such Shares in the manner provided in Article 5.12 of the TBCA.

SECTION 3.29 SECTION 368 REPRESENTATIONS; AGREEMENTS NOT TO
DISSENT.

(a) To the knowledge of the Company, the Bank, and their
respective directors, there is no plan or intention by any Company shareholder
who is anticipated to receive two percent (2%) or more of the total Merger
Consideration ("2% Shareholder"), nor is there a plan or intention by any of
the remaining Company shareholders, to sell or otherwise dispose of shares of
Victoria Common Stock received pursuant to the Merger that would reduce all
such shareholders' holdings to a number of shares having a total fair market
value at the Effective Time of less than fifty percent (50%) of the total fair
market value of all of the Company's capital stock outstanding immediately
prior to the Effective Time. For purposes of this Section 3.29, shares of the
Company's capital stock surrendered by dissenting shareholders and shares of
the Company's capital stock sold, redeemed or otherwise disposed of prior or
subsequent to and as a part of the overall transaction contemplated by the
Merger will be considered to be capital stock of the Company outstanding
immediately prior to the Merger.

(b) The Company has provided to Victoria true and correct copies
of statements in form and substance acceptable to Victoria from each 2%
Shareholder that such 2% Shareholder has no plan or intention to sell or
otherwise dispose of the Victoria Common Stock to be received pursuant to the
Merger, and has set forth on Schedule 3.29 all knowledge of the Company and the
Bank and their respective directors about the plans or intentions of any other
Company shareholders to sell or otherwise dispose of the Victoria Common Stock
to be received pursuant to the Merger.

(d) There have not been any sales or redemptions of the Company's
capital stock in contemplation of the Merger. Schedule 3.29 sets forth all
transactions in the capital stock of the Company since November 30, 1994.

(e) The liabilities of the Company assumed by Victoria as a part
of the Merger and the liabilities to which the transferred assets of the
Company are subject were incurred by the Company in the ordinary course of its
business.

(f) The Company and its shareholders will pay their own expenses
which are incurred in connection with the Merger.

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(g) The Company has not disposed of any assets (either as a
dividend or otherwise) constituting more than 10% of the fair market value of
all of its assets (ignoring any liabilities) at any time either during the past
twelve months or in contemplation of the Merger.

(h) The Company is not an investment company as defined in Section
368(a)(2)(F)(iii) of the Code.

(i) The Company is not under the jurisdiction of a court in a
Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the
Code.

SECTION 3.30 EMPLOYEE STOCK OPTIONS. Except as set forth on
Schedule 3.30, there are no Company employee stock option plans or agreements,
or provisions in any other plan, program, or arrangement, providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or the Bank.

SECTION 3.31 ACCOUNTING MATTERS. Neither the Company nor any of
its Affiliates has taken or agreed to take any action that would prevent
Victoria from accounting for the business combination to be effected by the
Merger as a pooling of interests, including, without limitation, any action
inconsistent with the provisions of Exhibit C hereto.

SECTION 3.32 REPRESENTATIONS NOT MISLEADING. No representation or
warranty by the Company in this Agreement, nor any statement, summary, exhibit
or schedule furnished to Victoria by the Company or the Bank under and pursuant
to, or in anticipation of this Agreement, contains or will contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained herein or therein not misleading.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF VICTORIA

Victoria hereby makes the representations and warranties set forth in
this Article IV to the Company.

SECTION 4.1 ORGANIZATION AND AUTHORITY.

(a) Victoria is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Texas, and has all
requisite corporate power and authority to conduct its business as now
conducted, to own, lease and operate its properties and assets as now owned,
leased or operated and to enter into and carry out its obligations under this
Agreement.

(b) Victoria is a bank holding company under the Bank Holding
Company Act of 1956, as amended, and in good standing under all laws, rules and
regulations applicable to bank holding companies. Victoria is duly qualified
or licensed and in good standing in each jurisdiction which requires such
qualification where each owns or leases properties or conducts business.

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(c) VB&T is a Texas state bank, duly organized, validly existing
and in good standing under the laws of the State of Texas, and has all
requisite power and authority to conduct its business as now being conducted,
and to own, lease and operate its properties and assets as now owned, leased
and operated.

SECTION 4.2 AUTHORITY RELATIVE TO AGREEMENT. Victoria has full
corporate power and authority and no further corporate proceedings on the part
of Victoria are necessary to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, all of which have been duly
and validly authorized by Victoria's Board of Directors. No approval or
consent by the shareholders of Victoria is necessary for the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Victoria and is a duly authorized, valid, legally binding and enforceable
obligation of Victoria, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to creditors' rights
generally and general equitable principles, and subject to such approval of
regulatory agencies and other governmental authorities having authority over
Victoria as may be required by statute or regulation. Victoria is not in
violation of or default under its Articles of Incorporation or Bylaws or any
agreement, document or instrument under which Victoria is obligated or bound,
or any law, order, judgment, injunction, award, decree, statute, rule,
ordinance or regulation applicable to Victoria or any of its Subsidiaries, the
violation or breach of which could have a Material Adverse Effect on Victoria
and its Subsidiaries taken as a whole. Except as set forth on Schedule 4.2,
neither the execution, delivery nor performance of this Agreement in its
entirety, nor the consummation of all the transactions contemplated hereby,
following the receipt of such approvals as may be required from the SEC, the
FRB, the FDIC, and the Department will (i) violate (with or without the giving
of notice or passage of time), any law, order, writ, judgment, injunction,
award, decree, rule, statute, ordinance or regulation applicable to Victoria,
or (ii) be in conflict with, result in a breach or termination of any provision
of, cause the acceleration of the maturity of any debt or obligation pursuant
to, constitute a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any security
interest, lien, charge or other encumbrance upon any property or assets of
Victoria pursuant to, any terms, conditions or provisions of any note, license,
instrument, indenture, mortgage, deed of trust or other agreement or
understanding or any other restriction of any kind or character, to which
Victoria is a party or by which any of its assets or properties are bound.
Except as set forth on Schedule 4.2, there are no proceedings pending or, to
the knowledge of Victoria, threatened, against Victoria, at law or in equity or
before any foreign, federal, state, municipal or other governmental court,
department, commission, board, bureau, agency, instrumentality or other person
which may result in liability to the Company or the Bank on the consummation of
the transactions contemplated hereby or which would prevent or delay such
consummation. Victoria has no reason to believe that it will not be able to
obtain all requisite regulatory approvals necessary to consummate the Merger as
set forth in this Agreement. Except as set forth in Schedule 4.2, or as
contemplated hereby, the corporate existence, business, organization, assets,
licenses, permits, authorizations and contracts of Victoria will not be
terminated or impaired by reason of the execution, delivery or performance by
Victoria of

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this Agreement or consummation by Victoria of the transactions contemplated
hereby, assuming receipt of the required regulatory approvals.

SECTION 4.3 FINANCIAL REPORTS. Victoria has previously furnished
the Company a true and complete copy of (i) the 1993 Annual Report to
Shareholders, which report (the "Victoria 1993 Annual Report") includes, among
other things, consolidated statements of financial position of Victoria and its
Subsidiaries as at December 31, 1993 and 1992, the related consolidated
statements of income, shareholders' equity and cash flows for the two years
then ended and (ii) Victoria's quarterly report on Form 10-Q for the quarters
ended March 31, 1994, June 30, 1994 and September 30, 1994 (the "Quarterly
Reports"), which reports include among other things consolidated statements of
financial position of Victoria and its Subsidiaries as at such dates, and the
related consolidated statements of income and cash flows for the periods
indicated. The financial statements contained in the Victoria 1993 Annual
Report and such Quarterly Reports have been prepared in conformity with GAAP
applied on a basis consistent with prior periods. The consolidated statements
of financial position of Victoria and its subsidiaries as at December 31, 1993
and 1992 contained in the Victoria 1993 Annual Report fairly present the
consolidated financial condition of Victoria and its Subsidiaries as at the
dates thereof, and the related consolidated statements of income, shareholders'
equity and cash flows of Victoria and its Subsidiaries contained therein fairly
present the results of operations and cash flows thereof for the fiscal years
then ended. The consolidated financial statements of Victoria and its
Subsidiaries contained in the Quarterly Reports fairly present the financial
condition, the results of the operations and cash flows thereof as at such
dates and for the periods indicated. For the purposes of this Agreement, all
financial statements referred to in this Section 4.3 shall be deemed to include
any notes to such financial statements. Victoria has made all filings required
to be made in compliance with the Exchange Act. None of the information
contained in the Victoria 1993 Annual Report or the Quarterly Reports is false
or misleading with respect to any material fact, or omits to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

SECTION 4.4 CAPITALIZATION. The shares of Victoria Common Stock
to be issued pursuant to this Agreement, when so issued, will be duly and
validly authorized and issued, fully paid and nonassessable, and not issued in
violation of any preemptive rights. As of September 30, 1994, Victoria had
7,962,512 shares of common stock, $1.00 per share par value, issued and
outstanding, none of which are held as treasury stock. None of the shares of
Victoria Common Stock to be issued pursuant to this Agreement will be subject
to any lien, charge, encumbrance, claim, rights of others, mortgage, pledge or
security interest, and none will be subject to any agreements or understandings
among any persons with respect to the voting or transfer of such shares of
Victoria Common Stock except as contemplated hereby.

SECTION 4.5 CONSENTS AND APPROVALS. No prior consent, approval
or authorization of, or declaration, filing or registration with any person,
domestic or foreign, is required of or by Victoria in connection with the
execution, delivery and performance by Victoria of this Agreement and the
transactions contemplated hereby or the resulting change in control of the
Company and the Bank, except the filing of Articles of Merger under the TBCA,

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and such approvals as may be required from the SEC, any state securities
regulators, the FRB, the Department and the FDIC.

SECTION 4.6 PROXY STATEMENT. None of the information supplied or
to be supplied by Victoria, or, to the best knowledge of Victoria, any of its
directors, officers, employees or agents for inclusion in:

(a) the Proxy Statement; or

(b) any registration statement or other documents to filed with
the SEC or any regulatory or governmental agency or authority
in connection with the transactions contemplated herein, at
the respective times such documents are filed, and, with
respect to the Proxy Statement, when first mailed to the
shareholders of the Company;

will be false or misleading with respect to any material fact, or omit to state
any material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, or, in the
case of the Proxy Statement or any amendment thereof or supplement thereto, at
the time of the Shareholders' Meeting, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Shareholders' Meeting. All documents that Victoria is
responsible for filing with any regulatory or governmental agency in connection
with the Merger will comply in all material respects with the provisions of
applicable law.

SECTION 4.7 AVAILABILITY OF VICTORIA COMMON STOCK. Victoria has
available a sufficient number of authorized and unissued shares of Victoria
Common Stock to pay the Merger Consideration, and Victoria will not take any
action during the term of this Agreement that will cause it not to have a
sufficient number of authorized and unissued shares of Victoria Common Stock to
pay the Merger Consideration.

SECTION 4.8 ABSENCE OF CERTAIN CHANGES. Since September 30, 1994
there has been no change in the business, financial condition or results of
operations of Victoria or VB&T which has had, or may reasonably be expected to
have, a material adverse effect on the business, financial condition or results
of operations of Victoria and VB&T, taken as a whole (other than changes in
banking laws or regulations, or interpretations thereof, that affect the
banking industry generally or changes in the general level of interest rates).

SECTION 4.9 COMMISSION FILINGS. All filings by Victoria with the
SEC through the date of this Agreement ("Victoria Commission Filings")
complied, and the Registration Statement and the Proxy Statement (except with
respect to information concerning the Company and the Bank) will comply, in all
material respects with the Securities Act, the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder, and did not or will not,
as the case may be, contain any untrue statement of a material fact or omit to
state a

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material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading. To the extent required by the Securities Act, the Exchange Act and
the rules and regulations promulgated thereunder, the following items have been
disclosed in the Victoria Commission Filings:

(a) Litigation. All actions, suits, claims, investigations,
reviews or other proceedings pending or, to the knowledge of Victoria or VB&T,
threatened against Victoria or VB&T or involving any of their respective
properties or assets, at law or in equity or before or by any foreign, federal,
state, municipal, or other governmental court, department, commission, board,
bureau, agency, or other instrumentality of person or any board of arbitration
or similar entity.

(b) Tax Matters. Any failure by Victoria and VB&T (i) to duly
file all tax returns required to be filed by them involving a tax liability or
other material potential detriment for failure to file (the "Victoria Filed
Returns") with respect to 1991, 1992 and 1993, (ii) to pay or have established
adequate reserves for the payment of, all federal income taxes and all state
and local income taxes and all franchise, property, sales, employment, foreign
or other taxes required to be paid with respect to the periods covered by the
Victoria Filed Returns or (iii) with respect to the periods for which returns
have not yet been filed, to establish adequate reserves determined in
accordance with GAAP for the payment of all federal income taxes and all state
and local income taxes and all franchise, property, sales, employment, foreign
or other taxes.

(c) Compliance with Laws. Any default by either Victoria or VB&T
with respect to or any violation of (i) any judgment, order, writ, injunction
or decree of any court or (ii) any statute, law, ordinance, rule, order or
regulation of any governmental department, commission, board, bureau, agency or
instrumentality, federal, state or local.

(d) Insurance. Any lapse in or failure to maintain insurance
policies which, in the judgment of the Board of Directors of Victoria, are
adequate for the business conducted by Victoria and VB&T, respectively, in
respect of amounts, types and risks ensured.

(e) Environmental Liability. Any (i) existing agreement,
judgment, or order or decree or (ii) legal, administrative or other proceeding,
claim or action of any nature seeking to impose, or that could reasonably be
expected to result in the imposition, on Victoria or VB&T of any material
liability related to the release of Polluting Substances under any
Environmental Laws, pending or to the best of Victoria's knowledge, threatened
against Victoria or VB&T, the result of which has had or could reasonably be
expected to have a material adverse effect upon Victoria and VB&T taken as a
whole.

SECTION 4.10 REPRESENTATIONS NOT MISLEADING. No representation or
warranty by Victoria in this Agreement, nor any statement or exhibit furnished
to the Company or the Bank under and pursuant to, or in anticipation of this
Agreement, contains or will contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained herein
or therein not misleading.

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ARTICLE V.
COVENANTS OF THE COMPANY

SECTION 5.1 AFFIRMATIVE COVENANTS OF THE COMPANY. For so long as
this Agreement is in effect, the Company shall, and shall use its best efforts
to cause the Bank (collectively, the "Acquired Companies") to, from the date of
this Agreement to the Closing, except as specifically contemplated by this
Agreement:

(a) operate and conduct the businesses of the Acquired Companies
in the ordinary course of business and consistent with prudent banking
practices;

(b) preserve intact the Acquired Companies' corporate existence,
business organization, assets, licenses, permits, authorizations, and business
opportunities;

(d) maintain all the Acquired Companies' properties in good
repair, order and condition, reasonable wear and tear excepted, and maintain
the insurance coverages described in Schedule 5.1(d) (which shall list all
coverages and all Property insured by such coverages) or obtain comparable
insurance coverages from reputable insurers which, in respect to amounts, types
and risks insured, are adequate for the business conducted by the Acquired
Companies and consistent with the existing insurance coverages;

(e) in good faith and in a timely manner (i) cooperate with
Victoria in satisfying the conditions in this Agreement and the consummation of
the Merger and the Subsequent Merger, (ii) assist Victoria in obtaining as
promptly as possible all consents, approvals, authorizations and rulings,
whether regulatory, corporate or otherwise, as are necessary for Victoria and
the Company (or either of them) to carry out and consummate the Merger and the
Subsequent Merger, including all consents, approvals and authorizations
required by any agreement or understanding existing at the Closing between the
Company and any governmental agency or other third party, (iii) furnish
information concerning the Acquired Companies not previously provided to
Victoria required for inclusion in any filings or applications that may be
necessary in that regard and (iv) perform all acts and execute and deliver all
documents necessary to cause the transactions contemplated by this Agreement to
be consummated at the earliest possible date;

(f) timely file with the FRB, the Department, and the FDIC, all
financial statements and other reports required to be so filed by any of the
Acquired Companies and to the extent permitted by applicable law, promptly
thereafter deliver to Victoria copies of all financial statements and other
reports required to be so filed;

(g) comply in all material respects with all applicable laws and
regulations, domestic and foreign;

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(h) promptly notify Victoria upon obtaining knowledge of any
default, event of default or condition with which the passage of time or giving
of notice would constitute a default or event of default under the Company Loan
Documents and promptly notify and provide copies to Victoria of any material
written or oral communications concerning the Company Loan Documents;

(i) between the date of this Agreement and Closing, promptly give
written notice to Victoria upon obtaining knowledge of any event or fact that
would cause any of the representations or warranties of the Company contained
in or referred to in this Agreement to be untrue or misleading in any material
respect;

(j) deliver to Victoria a list (Schedule 5.1(j)), dated as of the
Effective Time, showing (i) the name of each bank or institution where the
Company and the Bank have accounts or safe deposit boxes, (ii) the name(s) in
which such accounts or boxes are held and (iii) the name of each person
authorized to draw thereon or have access thereto;

(k) deliver to Victoria a list (Schedule 5.1(k)), dated as of the
Effective Time, showing all liabilities and obligations of the Company and the
Bank, except those arising in the ordinary course of their respective
businesses, incurred since the Balance Sheet Date, certified by an officer of
Company;

(l) promptly notify Victoria of any material change or
inaccuracies in any data previously given or made available to Victoria or
pursuant to this Agreement;

(m) provide access, to the extent that the Company or the Bank has
the right to provide access, to any or all Property (as defined in Section
3.23) so as to enable Victoria to physically inspect any structure or
components of any structure on such Property, including without limitation
surface and subsurface testing and analyses.

SECTION 5.2 NEGATIVE COVENANTS OF THE COMPANY. Except with the
prior written consent of Victoria or as otherwise specifically permitted by
this Agreement, the Company will not and will use its best efforts not to
permit the Bank, or any other Subsidiary of the Company, to, from the date of
this Agreement to the Closing:

(a) make any amendment to its articles of incorporation or
association or bylaws;

(b) make any change in the methods used in allocating and charging
costs, except as may be required by applicable law, regulation or GAAP and
after notice to Victoria;

(c) other than the redemption of its Preferred Stock by the
Company prior to the Effective Time, make any change in the number of shares of
the capital stock issued and outstanding, or issue, reserve for issuance,
grant, sell or authorize the issuance of any shares of its capital stock or
subscriptions, options, warrants, calls, rights or commitments of any kind
relating to the issuance or sale of or conversion into shares of its capital
stock;

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(d) contract to create any obligation or liability (absolute,
accrued, contingent or otherwise) except in the ordinary course of business and
consistent with prudent banking practices;

(e) contract to create any mortgage, pledge, lien, security
interest or encumbrances, restrictions, or charge of any kind (other than
statutory liens for which the obligations secured thereby shall not become
delinquent), except in the ordinary course of business and consistent with
prudent banking practices;

(f) cancel any debts, waive any claims or rights of value or sell,
transfer, or otherwise dispose of any of its material properties or assets,
except in the ordinary course of business and consistent with prudent banking
practices;

(g) sell any real estate owned as of the date of this Agreement or
acquired thereafter, which real estate qualifies as "other real estate owned"
under accounting principles applicable to it, except in the ordinary course of
business and consistent with prudent banking practices and applicable banking
laws and regulations;

(h) dispose of or permit to lapse any rights to the use of any
material trademark, service mark, trade name or copyright, or dispose of or
disclose to any person other than its employees any material trade secret not
theretofore a matter of public knowledge;

(i) except for regular salary increases granted in the ordinary
course of business within the Company's or the Bank's 1994 or 1995 budget and
consistent with prior practices, grant any increase in compensation or
directors' fees, or pay or agree to pay or accrue any bonus or like benefit to
or for the credit of any director, officer, employee or other person or enter
into any employment, consulting or severance agreement or other agreement with
any director, officer or employee, or adopt, amend or terminate any Employee
Benefit Plan or change or modify the period of vesting or retirement age for
any participant of such a plan;

(j) declare, pay or set aside for payment any dividend or other
distribution or payment in respect of shares of its capital stock, except for
dividends from the Bank to the Company and except for regular quarterly
dividends on the Company Preferred Stock consistent with past practice;

(k) except through settlement of indebtedness, foreclosure, the
exercise of creditors' remedies or in a fiduciary capacity, acquire the capital
stock or other equity securities or interest of any person;

(l) except as set forth on Schedule 5.2(l), make any capital
expenditures exceeding $25,000 in the aggregate;

(m) make any income tax or franchise tax election or settle or
compromise any federal, state, local or foreign income tax or franchise tax
liability, or, except in the ordinary

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course of business consistent with prudent banking practices, make any other
tax election or settle or compromise any other federal, state, local or foreign
tax liability;

(n) except for negotiations and discussions between the parties
hereto relating to the transactions contemplated by this Agreement or as
otherwise permitted hereunder, enter into any transaction, or enter into,
modify or amend any contract or commitment other than in the ordinary course of
business and consistent with prudent banking practices;

(o) except as contemplated by this Agreement, adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization, or other reorganization or business
combination of the Company or the Bank;

(p) issue any certificates of deposit except in the ordinary
course of business, consistent with prior practices and in accordance with
prudent banking practices;

(q) make any investments, including derivatives or structured
notes, except in the ordinary course of business, consistent with prior
practices and in accordance with prudent banking practices;

(r) modify, amend, waive or extend either the Company Loan
Documents or any rights under such agreements;

(s) modify any outstanding loan, make any new loan, or acquire any
loan participation, unless such modification, new loan, or participation is to
an unaffiliated borrower and is made in the ordinary course of business and in
accordance with prudent banking practices; provided, however, that any new
loans made after the date hereof to any individual or entity and/or affiliate
of such individual or entity that aggregate in excess of $50,000 shall be
subject to the right of Victoria to defer Closing until such time as such loans
are removed from the Bank;

(t) sell or contract to sell any part of the Bank premises;

(u) change any fiscal year or the length thereof;

(v) take or agree to take any action that would prevent Victoria
from accounting for the business combination to be effected by the Merger as a
pooling of interests, including, without limitation, any action inconsistent
with the provisions of Exhibit C hereto; or

(w) enter into any agreement, understanding or commitment, written
or oral, with any other person which is in any manner inconsistent with the
obligations of the Company and its directors and the Bank under this Agreement
or any related written agreement.

Nothing contained in this Section 5.2 or in Section 5.1 is intended to
influence the general management or overall operations of the Company or the
Bank in a manner not

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permitted by applicable law and the provisions thereof shall automatically be
reduced in compliance therewith.

ARTICLE VI.
COVENANTS OF VICTORIA

SECTION 6.1 COVENANTS OF VICTORIA. Victoria covenants and agrees
with the Company as follows:

(a) From the date hereof until the Effective Time of the Merger,
Victoria will maintain its corporate existence in good standing; conduct, and
cause VB&T to conduct, their respective businesses in compliance with all
material obligations and duties imposed on them by all laws, governmental
regulations, rules and ordinances, and judicial orders, judgments and decrees
applicable to Victoria or VB&T, their businesses or their properties; maintain
all books and records of Victoria and VB&T, including all financial statements,
in accordance with the accounting principles and practices consistent with
those used for the financial statements, except for changes in such principles
and practices required under GAAP.

(b) Victoria will furnish to the Company all the information
concerning Victoria and VB&T required for inclusion in a proxy statement or
statements to be sent to the shareholders of the Company, or in any statement
or application made by the Company to any governmental body in connection with
the transactions contemplated by this Agreement.

(c) As promptly as practicable after the execution of this
Agreement, Victoria will file with the SEC the Registration Statement on Form
S-4 under the Securities Act and any other applicable documents, relating to
the shares of Victoria Common Stock to be delivered to the shareholders of the
Company pursuant to this Agreement, and will use its best efforts to cause the
Registration Statement to become effective. At the time the Registration
Statement becomes effective, the Registration Statement will comply in all
material respects with the provisions of the Securities Act and the published
rules and regulations thereunder, and will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not false or misleading, and at the
time of mailing thereof to the Company shareholders, at the time of the Company
shareholders' meeting held to approve the Merger and at the Effective Time of
the Merger, the prospectus included as part of the Registration Statement, as
amended or supplemented by any amendment or supplement filed by Victoria (the
"Prospectus"), will not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not false
or misleading; provided, however, that none of the provisions of this
subparagraph shall apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information furnished by the Company or the Bank for use in the Registration
Statement or the Prospectus.

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(d) Victoria will file all documents required to be filed to list
the Victoria Common Stock to be issued pursuant to the Merger Agreement on the
Nasdaq National Market and use its best efforts to effect said listing.

(e) The shares of Victoria Common Stock to be issued by Victoria
to the shareholders of the Company pursuant to this Agreement will, on such
issuance and delivery to said shareholders pursuant to this Agreement, be duly
authorized, validly issued, fully paid and nonassessable. The shares of
Victoria Common Stock to be delivered to the shareholders of the Company
pursuant to this Agreement are and will be free of any preemptive rights of the
shareholders of Victoria.

(f) Victoria will file all documents required to obtain prior to
the Effective Time of the Merger all necessary state securities laws permits
and approvals, if any, required to carry out the transactions contemplated by
this Agreement, will pay all expenses incident thereto and will use its best
efforts to obtain such permits and approvals.

(g) Victoria will take all necessary corporate and other action
and file all documents required to obtain and will use its best efforts to
obtain all approvals of regulatory authorities, consents and approvals required
of it to carry out the transactions contemplated by this Agreement and will
cooperate with the Company to obtain all such approvals and consents required
by the Company.

(h) Victoria will ensure that all rights to indemnification in the
Company's Articles of Incorporation and Bylaws and in the Articles of
Association and Bylaws of the Bank, as in effect on the date hereof, shall
survive the Merger for one year from the Effective Time of the Merger;
provided, however, that nothing contained herein shall require indemnification
(a) to a greater extent than the Company or the Bank is, as of the date hereof,
required to indemnify any such person, and (b) with respect to claims based on,
arising out of or pertaining to (i) the Merger and (ii) acquisitions of the
Company Common Stock by affiliates prior to the date hereof. Victoria will
acquire and maintain for one year following the Effective Time of the Merger
directors' and officers' liability insurance for any such indemnification
obligations.

(i) From the date hereof to the Effective Date of the Merger,
Victoria shall deliver to the Company, when reasonably available, Victoria's
Quarterly Reports on Form 10-Q and Victoria's Annual Reports on Form 10-K as
filed with the SEC under the Exchange Act and at Closing, will provide written
notice of any additional disclosure occurring after the date of Victoria's most
recent Exchange Act filing.

(j) From and after the Effective Date of the Merger, Victoria
shall file all reports with the SEC necessary to permit the stockholders of the
Company who may be deemed "underwriters" (within the meaning of Rule 145 under
the Securities Act) of the Company Common Stock to sell Victoria Common Stock
received by them in connection with the Merger pursuant to Rules 144 and 145(d)
under the Securities Act if they would otherwise be so entitled; provided,
however, that Victoria is otherwise obligated to file such reports with the
SEC.

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ARTICLE VII.
ADDITIONAL AGREEMENTS

SECTION 7.1 ACCESS TO, AND INFORMATION CONCERNING, PROPERTIES AND
RECORDS. During the pendency of the transactions contemplated hereby, the
Company shall, to the extent permitted by law, give Victoria, its legal
counsel, accountants and other representatives reasonable access, during normal
business hours, throughout the period prior to the Closing, to all of the
Company's and the Bank's properties, books, contracts, commitments and records,
permit Victoria to make such inspections (including without limitation with
regard to such properties physical inspection of the surface and subsurface
thereof and any structure thereon) as they may require and furnish to Victoria
during such period all such information concerning the Company and its
Subsidiaries and their affairs as Victoria may reasonably request. All
information disclosed by the Company to Victoria which is confidential and is
so identified to Victoria as confidential shall be held confidential by
Victoria and its representatives, except to the extent counsel to Victoria has
advised it such information is required to or should be disclosed in filings
with regulatory agencies or governmental authorities or in proxy materials
delivered to shareholders of the Company. In the event this Agreement is
terminated pursuant to the provisions of Article VIII, upon the written request
of the Company, Victoria agrees to return to the Company all copies of such
confidential information.

SECTION 7.2 FILING OF REGULATORY APPROVALS. As soon as
reasonably practicable, Victoria, the Company and the Bank shall file all
notices and applications to the FRB, the Department and the FDIC which Victoria
deems necessary or appropriate to complete the transactions contemplated
herein, including the immediate subsequent merger of the Bank with and into
VB&T. Victoria will deliver to the Company, and the Company will deliver to
Victoria, copies of all non-confidential portions of any such applications and
correspondence to and from regulatory authorities related thereto.

SECTION 7.3 MISCELLANEOUS AGREEMENTS AND CONSENTS. Subject to
the terms and conditions of this Agreement, Victoria and the Company agree to
use all reasonable efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper, or advisable under
applicable laws and regulations to consummate and make effective, as soon as
practicable after the date hereof, the transactions contemplated by this
Agreement. Victoria and the Company shall use their respective best efforts to
obtain or cause to be obtained consents or approvals of all third parties and
governmental and regulatory authorities necessary or desirable for the
consummation of the transactions contemplated herein.

SECTION 7.4 COMPANY INDEBTEDNESS. Prior to the Effective Time,
the Company shall take such actions as are reasonably appropriate or necessary
in connection with the redemption, prepayment, or elimination of any
outstanding indebtedness of the Company or the Bank.

SECTION 7.5 EXCLUSIVITY. During the term of this Agreement, the
Company shall not solicit, entertain or negotiate with respect to any offer to
acquire the Company or the Bank

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from any other person. During the term of this Agreement, neither the Company
nor any of the Bank shall provide information to any other person in connection
with a possible acquisition of the Company or any of the Bank. Immediately
upon receipt of any such unsolicited offer, the Company will communicate to
Victoria the terms of any proposal or request for information and the identity
of parties involved.

SECTION 7.6 PUBLIC ANNOUNCEMENT. Subject to written advice of
counsel with respect to legal requirements relating to public disclosure of
matters related to the subject matter of this Agreement, the timing and content
of any announcements, press releases or other public statements concerning the
proposal contained herein will occur upon, and be determined by, the mutual
consent of the Company and Victoria.

SECTION 7.7 EMPLOYEE BENEFIT PLANS. Victoria presently intends
that, after the Merger, Victoria and the Bank will not make additional
contributions to the Employee Benefit Plans. However, Victoria agrees that the
employees of the Company and the Bank will be entitled to participate as new
employees in the employee welfare and pension benefit plans maintained for
employees of Victoria and its Affiliates, in accordance with their respective
terms.

SECTION 7.8 MERGER OF THE BANK. Victoria presently intends to
cause the Bank to merge into VB&T immediately after the Merger, and the Company
agrees to cause the Bank to execute documents and take actions (conditioned on
the Merger being effective) and otherwise cooperate with Victoria during the
time the Merger transaction is pending in order to facilitate such Subsequent
Merger.

SECTION 7.9 ENVIRONMENTAL INVESTIGATION; RIGHT TO TERMINATE
AGREEMENT.

(a) Victoria and its consultants, agents and representatives, shall
have the right to the same extent that the Company or the Bank has such right,
but not the obligation or responsibility, to inspect the Property to the extent
that the Company or the Bank has the right to permit Victoria and its
consultants, agents and representatives to inspect the Property, including,
without limitation, conducting asbestos surveys and sampling, environmental
assessments and investigations, and other environmental surveys and analyses
including soil and ground sampling ("Environmental Inspections") at any time
and shall complete such inspections on or prior to the 45th day after the date
hereof. Victoria shall notify the Company prior to any physical inspections of
Property, and the Company may place reasonable restrictions on the time of such
inspections. If, as a result of any such Environmental Inspection, further
investigation ("secondary investigation") including, without limitation, test
borings, soil, water and other sampling is deemed desirable by Victoria,
Victoria shall notify the Company of the Properties on which it intends to
conduct a secondary investigation on or prior to the 52nd day after the date
hereof. Victoria shall notify the Company of any Properties that are not
acceptable and require remediation on or prior to the 102nd day after the date
hereof.

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With respect to any Property which is owned, operated or leased by the
Company or the Bank or over which the Company or the Bank has managerial
control, including without limitation the Company's and the Bank's premises and
other real estate owned ("Controlled Property"), that Victoria has notified the
Company is not acceptable and requires remediation, the Company shall promptly
prepare a remediation plan acceptable to Victoria and obtain approval of such
remediation plan by the Texas Natural Resource Conservation Commission or any
other appropriate governmental authority ("Environmental Regulatory Authority")
on or prior to the 240th day after the date hereof. Promptly following the
preparation of any such remediation plan and its approval by the appropriate
Environmental Regulatory Authority, the Company shall perform the remediation
contemplated by any such plan. In the event that the Company is unable to
obtain the approval of any such remediation plan within the time period
described above, any such approved remediation plan is not acceptable to
Victoria, the Company refuses or fails to conduct remediation in accordance
with any such approved plan on or prior to the 240th day after the date hereof,
or the applicable Environmental Regulatory Authority disapproves of the results
of any such remediation conducted by the Company, Victoria shall have the right
to terminate this Agreement pursuant to written notice to the Company on or
prior to the tenth business day after the date the Company advises Victoria in
writing that, as applicable, the Company has been unable to obtain timely
approval of any remediation plan, that any such approved remediation plan has
been obtained, that any such Controlled Property has been remediated by the
Company but the applicable Environmental Regulatory Authority does not approve
the results of the remediation, or that the Company does not intend to
remediate or has not timely remediated any such Controlled Property.

With respect to any Property other than a Controlled Property
("Collateral Property") that Victoria has notified the Company is not
acceptable and requires remediation, the Company agrees promptly to request the
person ("Third Party Owner") who owns, operates, leases or otherwise exercises
managerial control over any such Collateral Property to remediate such
Collateral Property pursuant to a remediation plan approved by the appropriate
Environmental Regulatory Authority on or prior to the 240th day after the date
hereof. If the Third Party Owner's approved remediation plan is not acceptable
to Victoria, Victoria shall have the right to terminate this Agreement within
five business days after receiving notice and a copy of the approved
remediation plan. In the event that the Third Party Owner remediates the
Collateral Property but the applicable Environmental Regulatory Authority does
not approve the results of the remediation or obtains the approval by the
appropriate Environmental Regulatory Authority of a remediation plan but is
unable to complete the remediation within the time period described above, the
Company shall so advise Victoria in writing of such Third Party Owner's
attempted remediation or approved but unperformed remediation plan, and
Victoria shall have the right to terminate this Agreement within ten business
days after the date of receiving such written notice from the Company. If a
Third Party Owner refuses or fails to conduct any remediation or obtain any
approved remediation plan with respect to any Collateral Property, the Company
agrees to obtain a written estimate ("Remediation Estimate") from an
environmental professional acceptable to Victoria of all costs of remediating
any such Collateral Property (including the costs of preparing a remediation
plan acceptable to Victoria and approved by the appropriate Environmental
Regulatory Authority). A remediation plan prepared by the Third Party Owner

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<PAGE> 147
and acceptable to Victoria may be the basis of the Remediation Estimate.
Victoria shall have the right to terminate this Agreement by written notice to
the Company within ten business days after receipt from the Company of any
Remediation Estimate for a particular Collateral Property. Notwithstanding the
foregoing, and without limiting any rights of Victoria, the Company shall not
be obligated to incur aggregate expenditures in excess of $100,000 in
connection with preparing and obtaining approval by the appropriate
Environmental Regulatory Authority of remediation plans with respect to
Controlled Properties and in connection with obtaining Remediation Estimates in
connection with Collateral Properties.

(b) With respect only to any investigation, Victoria agrees to
indemnify and hold harmless the Company and the Bank for any claims for damage
to the Property or injury or death to persons directly attributable to the
negligent actions of Victoria or its agents in performing any secondary
investigation, except to the extent caused in whole or in part by the
negligence of the Company or the Bank. Victoria shall have no liability or
responsibility of any nature whatsoever for the results, conclusions or other
findings related to any Environmental Inspection, secondary investigation or
other environmental survey. If this Agreement is terminated, then except as
otherwise required by law, Victoria shall have no obligation to make any
reports to any governmental authority of the results of any Environmental
Inspection, secondary investigation or other environmental survey, but such
reporting shall remain the responsibility of and within the discretion of the
Company or the Bank, as the case may be. Victoria shall have no liability to
the Company or the Bank for making any report of such results to any
governmental authority.

(c) Victoria shall have the right to terminate this Agreement in
the following circumstances: (i) the Company's material breach of any
representation or warranty set forth in Section 3.23; (ii) the factual
substance of any warranty or representation set forth in Section 3.23 is not
true and accurate in any material respect irrespective of the knowledge or lack
of knowledge of the Company or the Bank; (iii) the results of such
Environmental Inspection, secondary investigation or other environmental survey
are disapproved by Victoria because the Environmental Inspection, secondary
investigation or other environmental survey identifies material violations or
potential material violations of Environmental Laws; (iv) the Environmental
Inspection, secondary investigation or other environmental survey identifies
any past or present event, condition or circumstance that would or potentially
would require remedial or cleanup action or have a Material Adverse Effect upon
the Company or the Bank; (v) the presence of any underground or above ground
storage tank in, on or under any Property which is not registered properly with
appropriate governmental authorities and otherwise entitled to applicable
governmental remediation funds or which has resulted in a release of any
Polluting Substances or which otherwise is in material violation of an
Environmental Law; (vi) the presence of any asbestos containing material in, on
or under any Property, the removal of which would constitute a Material Adverse
Effect; or (vii) Victoria is not permitted to conduct an Environmental
Inspection or secondary investigation of any Property to the extent it deems
appropriate.

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(d) The Company agrees to make available to Victoria and its
consultants, agents and representatives all documents and other material
relating to environmental conditions of the Property including, without
limitation, the results of other environmental inspections and surveys. The
Company also agrees that all engineers and consultants who prepared or
furnished such reports may discuss such reports and information with Victoria
and shall be entitled to certify the same in favor of Victoria and its
consultants, agents and representatives and make all other data available to
Victoria and its consultants, agents and representatives. Victoria agrees to
provide the Company with a copy of all environmental reports prepared by its
consultants as a result of the Environmental Inspections.

(e) The provisions of this Section 7.9 shall not apply to the
environmental condition set forth on Schedule 7.9.

SECTION 7.10 EXCHANGE AGREEMENT. Immediately prior to the
Effective Time, the Company and Victoria agree to enter into the Exchange
Agreement with the Exchange Agent, or if the Exchange Agent refuses to serve as
exchange agent, such other exchange agent as shall mutually agreed to by the
Company and Victoria.

SECTION 7.11 DISCLOSURE. The disclosure to Victoria of
information in the due diligence process shall not satisfy the requirement of
the Company to deliver complete Schedules to this Agreement. From time to
time, the Company may supplement or amend the Schedules hereto with information
which is required to be set forth or described or which is necessary to correct
any information in the Schedules hereto. Upon delivery to Victoria, such
supplemented or amended Schedules shall be deemed to be the Schedules for all
purposes of this Agreement.

SECTION 7.12 PROXIES. The Company acknowledges that the persons
listed on Schedule 7.12 have agreed that they will vote the Shares owned by
them in favor of this Agreement and the transactions contemplated hereby,
subject to required regulatory approvals, and that they will retain the right
to vote such Shares during the term of this Agreement and have given Victoria a
proxy to vote such Shares in favor of the Merger if they should fail to do so,
pursuant to a Voting Agreement and Irrevocable Proxy substantially in the form
attached hereto as Exhibit D.

ARTICLE VIII.
CONDITIONS TO CONSUMMATION OF THE MERGER

SECTION 8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger are
subject to the satisfaction or waiver of the following conditions prior to the
Effective Time:

(a) the receipt of all regulatory approvals sought and the
expiration of any applicable waiting period with respect thereto;

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(b) the Closing will not violate any injunction, order or decree
of any court or governmental body having competent jurisdiction;

(d) the approval of the Merger by the Company's shareholders
entitled to vote at the Shareholders' Meeting; and

(e) a registration statement covering the Victoria Common Stock to
be issued in the Merger shall be effective under the Securities Act and any
applicable state securities or "blue sky" acts and no stop order suspending the
effectiveness of such registration statement shall be in effect and no
proceedings for such purpose, or any proceedings under the SEC or applicable
state securities authorities rules with respect to the transactions
contemplated hereby, shall be pending before or threatened by the SEC or any
applicable state securities or blue sky authorities.

SECTION 8.2 CONDITIONS TO THE OBLIGATIONS OF VICTORIA TO EFFECT
THE MERGER. The obligations of Victoria to effect the Merger are subject to
the satisfaction or waiver of the following conditions prior to the Effective
Time:

(a) all representations and warranties of the Company shall be
true and correct in all material respects as of the date hereof and at and as
of the Closing, with the same force and effect as though made on and as of the
Closing;

(b) the Company shall have performed in all material respects all
obligations and agreements and in all material respects complied with all
covenants and conditions, contained in this Agreement to be performed or
complied with by it prior to the Effective Time;

(d) concurrent with the delivery of the releases described in
Section 8.3(e), the directors of the Company and the Bank shall have delivered
to Victoria an instrument in the form of Exhibit G attached hereto dated the
Effective Time and shall have delivered to Victoria their resignations as
directors of the Company and the Bank;

(e) concurrent with the delivery of the releases described in
Section 8.3(e), the officers of the Company and the Bank shall have delivered
to Victoria an instrument in the form of Exhibit G attached hereto, dated the
Effective Time;

(f) Victoria shall have received the opinions of counsel to the
Company reasonably acceptable to it as to the matters set forth on Exhibit E
attached hereto;

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(g) the holders of no more than 7% of the Shares shall have
demanded or be entitled to demand payment of the fair value of their shares as
dissenting shareholders;

(h) Victoria shall have received a letter from Grant Thornton
dated as of the Effective Time, to the effect that the Merger will qualify for
pooling-of-interests accounting treatment if closed and consummated in
accordance with this Agreement;

(i) The Company shall have taken all such actions to redeem,
prepay or eliminate all Company Indebtedness;

(j) the credits listed on Schedule 8.2(j) and any credits
referenced in Section 5.2(s) shall have been removed from, or disposed by, the
Bank;

(k) all of the outstanding Company Preferred Stock shall have been
redeemed;

(l) the Company and the Bank shall have discontinued its mortgage
warehousing operations, and shall have sold or otherwise disposed of any
existing mortgage warehouse credits;

(m) Victoria shall have received from holders of the Company's
capital stock receiving at least 50% of the total Merger Consideration a
representation that they have no plan or intention to sell or otherwise dispose
of shares of Victoria Common Stock received pursuant to the Merger;

(n) The Company shall have delivered to Victoria a schedule of all
transactions in the capital stock (or instruments exercisable for or
convertible into capital stock) of the Company of which the Company has
knowledge from and including the date of this Agreement through the Effective
Time;

(o) Victoria shall have determined, in its sole judgment, that the
liabilities and obligations set forth on Schedule 5.1(k) do not have a Material
Adverse Effect; and

(p) Victoria shall have received certificates dated the Closing
executed by the Chairman of the Board of the Company and by the Chairman of the
Board of the Bank, and the Secretary or Cashier of the Company and the Bank,
respectively, certifying in such reasonable detail as Victoria may reasonably
request, to the effect described in Sections 8.2(a), (b), (c), (g), (i), (j),
(k) and (l).

SECTION 8.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO
EFFECT THE MERGER. The obligations of the Company to effect the Merger are
subject to the satisfaction or waiver of the following conditions prior to the
Effective Time:

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(a) all representations and warranties of Victoria contained
herein shall be true and correct in all material respects as of the date hereof
and at and as of the Closing, with the same force and effect as though made on
and as of the Closing;

(b) Victoria shall have performed in all material respects all
obligations and agreements and in all material respects complied with all
covenants and conditions contained in this Agreement to be performed or
complied with by either of them prior to the Effective Time;

(d) the Company shall have received the opinions of counsel to
Victoria reasonably acceptable to it, as to the matters set forth on Exhibit F
attached hereto;

(e) concurrent with the delivery of the releases described in
Sections 8.2(d) and 8.2(e), the Company and the Bank shall have delivered to
the directors of the Company and the Bank an instrument in the form of Exhibit
H attached hereto dated the Effective Time; and

(f) the shares of Victoria Common Stock to be delivered to
shareholders of the Company pursuant to this Agreement shall have been
authorized for listing on the Nasdaq National Market;

(g) the Company shall have received all regulatory approvals
necessary to redeem its Preferred Stock and repay the Company Indebtedness;

(h) the Company shall have received an opinion, dated as of the
Effective Time, of counsel to the Company that, for federal income tax
purposes, (i) the Merger will constitute a reorganization within the meaning of
Sections 368(a)(1)(A) of the Code, (ii) no gain or loss will be recognized by
holders of Company Common Stock upon receipt of Victoria Common Stock except
for cash received in lieu of fractional shares, (iii) the aggregate tax basis
of Victoria Common Stock received by a shareholder of the Company will be the
same as the aggregate basis of the Company Common Stock surrendered in exchange
therefor, and (iv) the holding period of Victoria Common Stock to be received
by each Company shareholder will include the period during which the
shareholder held the Company Common Stock surrendered in exchange therefor,
provided that the Company Common Stock is held as a capital asset on the date
of the exchange; and

(i) the Company shall have received certificates dated the Closing
executed by appropriate officers of Victoria certifying, in such detail as the
Company may reasonably request, to the effect described in Sections 8.3(a) and
(b).

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ARTICLE IX.
TERMINATION; AMENDMENT; WAIVER

SECTION 9.1 TERMINATION. This Agreement may be terminated and
the Merger contemplated hereby may be abandoned at any time notwithstanding
approval thereof by the shareholders of the Company, but prior to the Effective
Time:

(a) by mutual written consent duly authorized by the Boards of
Directors of Victoria and the Company;

(b) by Victoria (i) if Victoria learns or becomes aware of a state
of facts or breach or inaccuracy of any representation or warranty of the
Company contained in Article III which constitutes a Material Adverse Effect,
(ii) pursuant to Section 7.9, or (iii) if any of the conditions to Closing
contained in Section 8.1 or 8.2 are not satisfied or waived in writing by
Victoria;

(c) by the Company if the conditions to Closing contained in
Section 8.1 or 8.3 are not satisfied or waived in writing by the Company;

(d) by Victoria or the Company if the Effective Time shall not
have occurred on or before the expiration of nine months from the date of this
Agreement or such later date agreed to in writing by Victoria and the Company;
or

(e) by Victoria or the Company if any court of competent
jurisdiction in the United States or other United States (federal or state)
governmental body shall have issued an order, decree or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the Merger and
such order, decree, ruling or other action shall have been final and
nonappealable.

SECTION 9.2 EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement pursuant to Section 9.1 hereof,
this Agreement shall forthwith become void and have no effect, without any
liability on the part of any party or its directors, officers or shareholders,
other than the provisions of this Section 9.2 and Section 10.1. Nothing
contained in this Section 9.2 shall relieve any party from liability for any
breach of this Agreement.

SECTION 9.3 AMENDMENT. To the extent permitted by applicable
law, this Agreement may be amended by action taken by or on behalf of the Board
of Directors of the Company and Victoria at any time before or after adoption
of this Agreement by the shareholders of the Company but, after any submission
of this Agreement to such shareholders for approval, no amendment shall be made
which reduces the Merger Consideration or which materially and adversely
affects the rights of the Company's shareholders hereunder without any required
approval of such shareholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties.

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<PAGE> 153
SECTION 9.4 EXTENSION; WAIVER. At any time prior to the
Effective Time, the parties may (i) extend the time for the performance of any
of the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto, or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.

ARTICLE X.
SURVIVAL

SECTION 10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
parties hereto agree that all of their respective representations and
warranties contained in this Agreement shall not survive after the Effective
Time.

ARTICLE XI.
MISCELLANEOUS

SECTION 11.1 EXPENSES. All costs and expenses incurred in
connection with the transactions contemplated by this Agreement shall be paid
by the party incurring such costs and expenses; provided, however, that all
such costs and expenses incurred by the Company shall not exceed $50,000.

SECTION 11.2 BROKERS AND FINDERS. All negotiations on behalf of
Victoria and the Company relating to this Agreement and the transactions
contemplated by this Agreement have been conducted by the parties hereto and
their respective agents directly without the intervention of any other person
in such manner as to give rise to any claim against Victoria, the Company or
the Bank for financial advisory fees, brokerage or commission fees, finder's
fees or other like payment in connection with the consummation of the
transactions contemplated hereby, and each party hereto hereby agrees to and
shall indemnify the other parties hereto against any liability arising from any
such fee or payment incurred by such party.

SECTION 11.3 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (a)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings,
both written and oral, among the parties or any of them with respect to the
subject matter hereof, and (b) shall not be assigned by operation of law or
otherwise, provided that Victoria may assign its rights and obligations to any
direct or indirect, wholly-owned, subsidiary of Victoria, but no such
assignment shall relieve Victoria of its obligations hereunder if such assignee
does not perform such obligations.

SECTION 11.4 FURTHER ASSURANCES. From time to time as and when
requested by Victoria or its successors or assigns, the Company and the Bank,
and the officers and directors of the Company and the Bank, shall execute and
deliver such further agreements, documents, deeds, certificates and other
instruments and shall take or cause to be taken such other actions,

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including those as shall be necessary to vest or perfect in or to confirm of
record or otherwise the Company's title to and possession of, all of its
property, interests, assets, rights, privileges, immunities, powers, franchises
and authority, as shall be reasonably necessary or advisable to carry out the
purposes of and effect the transactions contemplated by this Agreement.

SECTION 11.5 ENFORCEMENT OF THE AGREEMENT. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions hereof,
this being in addition to any other remedy to which they are entitled at law or
in equity.

SECTION 11.6 SEVERABILITY. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provisions of this Agreement, which shall remain in full force
and effect.

SECTION 11.7 NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered, if delivered in person, by cable, telegram or
telex, or by telecopy, or five business days after mailing, if delivered by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties as follows:

if to Victoria:

Charles R. Hrdlicka
Chairman and Chief Executive Officer
Victoria Bankshares, Inc.
One O'Connor Plaza
Victoria, Texas 77901
Telecopy No.: (512) 574-5164

with a copy to:

Donald E. Wood
Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
3300 Texas Commerce Tower
Houston, Texas 77002
Telecopy No.:(713) 223-3717

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<PAGE> 155
if to the Company:

D. W. Neuenschwander
United Bancshares, Inc.
2214 Avenue H
Rosenberg, Texas 77471
Telecopy No.: ____________

with a copy to:

William T. Luedke IV
Bracewell & Patterson
711 Louisiana, Suite 2900
Houston, Texas 77002
Telecopy No.: (713) 221-1212

or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).

SECTION 11.8 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.

SECTION 11.9 DESCRIPTIVE HEADINGS. The descriptive headings are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.

SECTION 11.10 PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.

SECTION 11.11 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.

SECTION 11.12 INCORPORATION BY REFERENCES. Any and all schedules,
exhibits, annexes, statements, reports, certificates or other documents or
instruments referred to herein or attached hereto are incorporated herein by
reference hereto as though fully set forth at the point referred to in the
Agreement.

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SECTION 11.13 CERTAIN DEFINITIONS.

(a) "Subsidiary" shall mean, when used with reference to an
entity, any corporation, a majority of the outstanding voting securities of
which are owned directly or indirectly by such entity or any partnership, joint
venture or other enterprise in which any entity has, directly or indirectly,
any equity interest.

(b) "Material Adverse Effect" shall mean any material adverse
change in the financial condition, assets, liabilities (absolute, accrued,
contingent or otherwise), reserves, business or results of operations of the
Company and the Bank taken as a whole (or when the reference is to Victoria, to
Victoria and its Subsidiaries, taken as a whole).

(c) "Environmental Laws" shall mean laws, including, without
limitation, federal, state or local laws, ordinances, rules, regulations,
interpretations and orders of courts or administrative agencies or authorities
relating to pollution or protection of the environment (including, without
limitation, ambient air, surface water, ground water, land surface, and
subsurface strata), including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1987, as
amended ("SARA"), the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"), Hazardous and Solid Waste Amendments of 1984, as amended
("HSWA"), the Hazardous Materials Transportation Act, as amended ("HMTA"), the
Toxic Substance Control Act ("TSCA"), National Emissions Standard for Hazardous
Pollutants ("NESHAP"), Occupational Safety and Health Act ("OSHA"), Federal
Water Pollution Control Act, Clean Air Act, and other laws relating to
pollution or protection of the environment, or to the manufacture, processing,
distribution, use, treatment, handling, storage, disposal or transportation of
Polluting Substances.

(d) "Polluting Substances" shall mean (a) asbestos, (b) urea
formaldehyde foam insulation, (c) oil and gasoline products or wastes, and (d)
all pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes and shall include, without limitation, any flammable
explosives, radioactive materials, oil, hazardous materials, hazardous or solid
wastes, hazardous or toxic substances or regulated materials defined in CERCLA,
SARA, RCRA, HSWA, HMTA, TSCA, OSHA, NESHAP and/or any other Environmental Laws,
as amended, and in the regulations adopted and publications promulgated
thereto; provided to the extent that the laws of the State of Texas establish a
meaning for "hazardous substance," "hazardous waste," "hazardous materials,"
"solid waste," or "toxic substance," which is broader than that specified in
any of CERCLA, SARA, RCRA, HSWA, HMTA, TSCA, OSHA or other Environmental Laws
such broader meaning shall apply.

(e) "Knowledge" or "known" -- An individual shall be deemed to
have "knowledge" of or to have "known" a particular fact or other matter if (i)
such individual is actually aware of such fact or other matter, or (ii) a
prudent individual could be expected to discover or otherwise become aware of
such fact or other matter in the course of conducting a reasonably
comprehensive investigation concerning the truth or existence of such fact or
other matter. A

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<PAGE> 157
corporation or bank shall be deemed to have "knowledge" of or to have "known" a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director or executive officer (or in any similar
capacity) of the corporation or bank, has, or at any time had, knowledge of
such fact or other matter. The Company and the Bank are understood to have
undertaken a separate investigation in connection with the transactions
contemplated hereby to determine the existence or absence of facts or other
matters in the statement qualified as "known" by, or the "knowledge" of, the
Company or the Bank.

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all as of
the day and year first above written.

ATTEST: VICTORIA BANKSHARES, INC.

By______________________ By: ______________________________
Secretary Its: _____________________________

ATTEST: UNITED BANCSHARES, INC.

By______________________ By: ______________________________
Secretary Its: _____________________________

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EXHIBIT A

POOLING TRANSFER RESTRICTIONS AGREEMENT

This Pooling Transfer Restrictions Agreement (this "Agreement") is
executed and delivered as of the 12th day of January, 1995 by and between
Victoria Bankshares, Inc. ("Victoria"), United Bancshares, Inc. (the
"Company"), and the undersigned shareholder of the Company (the "Shareholder").

WHEREAS, Victoria and the Company entered into an Agreement and Plan
of Merger dated as of the date hereof ("Merger Agreement") pursuant to which
the Company will be merged with and into Victoria (the "Merger"), and

WHEREAS, Victoria has required as a condition to entering into the
Merger Agreement that the Company and the Shareholder and each other affiliate
of the Company deliver to Victoria an agreement in substantially the form
hereof,

NOW, THEREFORE, in consideration of Victoria's agreement to enter into
the Merger Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned, intending to be
legally bound, hereby agree as follows:

1. The Shareholder agrees that he will not sell, pledge, transfer
or otherwise dispose of any shares of the Company's common stock, par value
$1.00 per share, Series A 7-1/2% Cumulative Preferred Stock, par value $7.50
per share, or Series B 10% Cumulative Preferred Stock, par value $7.50 per
share (collectively, the "Company Stock"), within 30 days prior to the
Effective Time (as defined in the Merger Agreement). The Shareholder further
agrees that until the publication of financial results covering at least 30
days of post-Merger combined operations of the Company and Victoria, he will
not sell, pledge, transfer or otherwise dispose of any shares of the Victoria
common stock, par value $1.00 per share ("Victoria Common Stock"), to be
acquired by him in the Merger, except for pledges by the Shareholder of all or
part of such Shareholder's Victoria Common Stock acquired in the Merger to
secure loans, provided the lender accepts any pledge of such Victoria Common
Stock subject to the terms of this Agreement. The Shareholder further agrees
that he will not sell, pledge, transfer or otherwise dispose of any shares of
the Victoria Common Stock to be acquired by him in the Merger except in a
manner which is consistent with any additional requirements for Victoria's
accounting for the Merger as a pooling of interests, including without
limitation any new requirements imposed by the applicable provisions of the
Securities Act of 1933, the Securities Exchange Act of 1934, and the respective
rules and regulations thereunder.

2. The Shareholder further acknowledges and agrees that he will
be subject to Rule 145 promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, and agrees not to transfer any Victoria
Common Stock received by him in the Merger except
<PAGE> 160
in compliance with the applicable provisions of the Securities Act of 1933, the
Securities Exchange Act of 1934 and the respective rules and regulations
thereunder.

3. The Shareholder agrees that the shares of Victoria Common
Stock to be issued to him in the merger will bear a restrictive transfer legend
in substantially the following form:

The shares represented by this certificate are subject to a Pooling
Transfer Restrictions Agreement dated as of January 12, 1995 which
restricts any sale or other transfer of such shares prior to [insert
due date of filing of next Quarterly Report on Form 10-Q or Annual
Report on Form 10-K that will contain required combined financial
results]. The issuer will furnish to the record holder of this
certificate, without charge, upon written request to the issuer at its
principal place of business, a copy of the Pooling Transfer
Restrictions Agreement.

Victoria agrees to instruct its transfer agent to remove the restrictive legend
from any certificates evidencing shares subject hereto promptly following the
expiration of the transfer restrictions described in Section 1.

4. The Company agrees that it will not permit the transfer of any
shares of Company Stock by the Shareholder within 30 days prior to the
Effective Time.

IN WITNESS WHEREOF, the undersigned have set their hands effective as
of the day first written above.

VICTORIA BANKSHARES, INC.

By:_____________________________________
Charles R. Hrdlicka
Chairman of the Board and
Chief Executive Officer

UNITED BANCSHARES, INC.

By:_____________________________________
D. W. Neuenschwander
President

________________________________________
Signature of Shareholder

________________________________________
Printed Name of Shareholder

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<PAGE> 161

EXHIBIT B

EXCHANGE AGENT AGREEMENT

This Exchange Agent Agreement, dated as of __________________, 1995,
is made and entered into by and among Victoria Bankshares, Inc., a Texas
corporation ("Victoria"), United Bancshares, Inc., a Texas corporation
("Company"), and Victoria Bank and Trust Company, a Texas chartered bank
("Exchange Agent").

PREAMBLE:

Pursuant to the Agreement and Plan of Merger dated as of January 12,
1995 ("Merger Agreement") between Victoria and the Company, the Company shall,
at the Effective Time, be merged into Victoria. The name of the surviving
corporation shall be Victoria Bankshares, Inc. ("Surviving Corporation").

After the Effective Time, the outstanding shares of the Common Stock,
par value $1.00 per share (the "Company Common Stock") of the Company issued
and outstanding immediately prior to the Effective Time shall solely represent,
in the aggregate, the right to payment by Victoria of total Merger
Consideration of _________________ shares of Victoria common stock, par value
$1.00 per share ("Victoria Common Stock") (or cash in lieu of fractional
shares), subject to the rights of qualified dissenting shareholders of the
Company.

The Company has requested Victoria to designate the Exchange Agent in
connection with the exchange (the "Exchange") of shares of Company Common Stock
for shares of Victoria Common Stock, subject to the terms and conditions hereof
and of the Merger Agreement. The Exchange Agent will receive Company Common
Stock delivered for exchange pursuant to the terms of the Merger Agreement, and
will process such certificates representing Company Common Stock
("Certificates") and related documents. Victoria desires that the Exchange
Agent act in such capacity.

NOW THEREFORE, in consideration of the premises and of the mutual
agreements and covenants contained herein, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:

1. Appointment of Exchange Agent. Victoria Bank and Trust Company
is hereby appointed as the Exchange Agent for payment of the Merger
Consideration to shareholders of the Company. Such appointment shall be in
accordance with the terms and conditions set forth herein. Nothing contained
herein, however, shall prevent Victoria or the Surviving Corporation from
revoking such appointment; provided, however, that any successor Exchange Agent
shall be agreeable to Victoria and the Surviving Corporation.

2. Closing of Stock Transfer Books. At the Effective Time, the
Company's stock transfer books will be closed and no transfers shall be
permitted.
<PAGE> 162
3. Duties of Exchange Agent. The Exchange Agent is authorized
and directed to perform the following functions contemplated by the Merger
Agreement and the Letter of Transmittal:

(a) Distribution of Letter of Transmittal. The Exchange
Agent shall deliver at the closing or mail to the holders of record of
Company Common Stock, by first class United States mail, postage
prepaid, copies of Letters of Transmittal, including Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9
in substantially the form attached hereto as Annex A ("Letter of
Transmittal"), and return envelopes to the Exchange Agent, at the
earliest practicable time following the Effective Time. A form of
Stock Assignment, Power of Attorney and Lost Stock Certificate
Affidavit will be provided to the Exchange Agent for use by
shareholders if necessary.

(b) Acceptance of Certificates.

(i) The Exchange Agent will examine the Letter of
Transmittal, Certificates and other documents and instruments
delivered to the Exchange Agent by or on behalf of holders tendering
Company Common Stock and shall determine whether (i) the Letter of
Transmittal have been completed and executed properly, and are
accompanied by proper evidence of authority, (ii) Certificates
corresponding to the names of the registered holders, Certificate
numbers and the number of shares represented thereby with the
information set forth in the Company's shareholder and other records
and which appear to be in negotiable, good delivery form, properly
endorsed or accompanied by stock powers with transfer tax stamps or
evidence of payment or exemption from transfer taxes affixed (where
required), and (iii) signatures are guaranteed (where required), all
in accordance with the terms and conditions of the Merger Agreement
and the Letter of Transmittal. The Exchange Agent shall accept
Certificates which are surrendered in accordance with the provisions
of the Merger Agreement and accompanied by the executed Letter of
Transmittal. Such Certificates and Letter of Transmittal shall only
be accepted by the Exchange Agent and eligible for payment hereunder
if they have been properly executed and completed in accordance with
the instructions contained in the Letter of Transmittal and if the
person or persons surrendering such Certificates and Letter of
Transmittal appears as a shareholder of record of the number of shares
surrendered on the list of shareholders supplied and certified to the
Exchange Agent by the Company ("Shareholder List") attached as Annex B
hereto. In the event the Exchange Agent shall have any questions as
to whether a Certificate and Letter of Transmittal have been properly
executed and completed or whether the Certificates have been
surrendered by the holder of record thereof, the Exchange Agent shall
promptly refer such questions to Victoria for resolution by Victoria
and the Exchange Agent shall be able to rely on the written
instructions and decisions of any officer of Victoria. Determination
of all questions as to the proper completion or execution of the
Letter of Transmittal or as to the proper form for transfer of the
Certificates for Company Common Stock shall be made by Victoria
together with its attorneys, and such other persons as Victoria shall
designate, and such determinations shall be final and binding;
provided, however, that the rejection by Victoria of any Letter of
Transmittal or Certificates deemed by Victoria

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to be ineffective to transfer the Certificates shall not affect the
right of any shareholder in or to his respective share of the Merger
Consideration;

(ii) If any defect or irregularity appears to exist in
connection with a purported tender, the Exchange Agent will notify
promptly the persons by whom the tender was made and will return all
documents delivered in connection therewith or take such action as is
necessary or advisable to cause such defect or irregularity to be
cured;

(iii) Tenders may be made only as set forth in the
Letter of Transmittal;

(iv) Letters of Transmittal, and facsimiles thereof
submitted to the Exchange Agent, shall be marked by the Exchange
Agent's designated officers to show the date and time of receipt and
their review and acceptance thereof;

(v) At the close of business each Friday, the Exchange
Agent shall inform Victoria in writing of the number of shares of
Company Common Stock which have been properly tendered and the number
which have been improperly tendered to the Exchange Agent during the
week then ended and on a cumulative basis through that day. The
Exchange Agent shall provide Victoria such other information
concerning the Company Common Stock as it may reasonably request. Such
communications should be sent to:

Victoria Bankshares, Inc.
One O'Connor Plaza
Victoria, Texas 77901
Attn: Gregory Sprawka
Telephone No. (512) 573-9432

(c) Exchange Fund. In order to provide for payment of the
Merger Consideration in accordance with the terms of the Merger
Agreement, Victoria, from time to time prior to or after the Effective
Time, shall deposit or cause to be deposited with the Exchange Agent
cash in an amount sufficient to make payments in lieu of fractional
shares (the "Exchange Fund"). This Exchange Fund shall not be used
for any purpose except as provided by this Agreement.

(d) Victoria Common Stock. Victoria and the Company
shall jointly advise the Exchange Agent as to the number of shares of
Victoria Common Stock to be distributed to each shareholder which
shall be calculated by Victoria and the Company as follows:

(i) Company Common Stock. Each holder of Company Common
Stock shall receive Merger Consideration equal to ___________ shares of
Victoria Common Stock for each share of Company Common Stock held
immediately prior to the Effective Time.

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(ii) Fractional Shares. For each fractional share of
Victoria Common Stock which would be delivered upon the surrender of
Company Common Stock, each holder of Company Common Stock shall
receive cash in an amount equal to the product of such fraction and
$____________.

The Exchange Agent shall also act as Victoria's
transfer agent hereunder. As soon as practicable after acceptance of
properly executed Certificates and accompanying Letter of Transmittal
in accordance with the terms of paragraph 3(b) hereof, the Exchange
Agent shall issue and mail certificates representing shares of
Victoria Common Stock to the shareholders surrendering such
certificates. The Exchange Agent shall promptly make the payments in
lieu of fractional shares out of the Exchange Fund upon surrender of
the Certificates.

(e) Other Duties of Exchange Agent.

(i) The Exchange Agent shall have no obligation to make
payment for surrendered Certificates unless Victoria shall have issued
sufficient Victoria Common Stock or caused such stock to be issued and
shall have deposited or caused to be deposited in the Exchange Fund
sufficient cash with which to pay all amounts due and payable for such
shares.

(ii) The Exchange Agent shall be regarded as having made
no representations or warranties as to the validity, sufficiency,
value or genuineness of any Certificates or the shares of Company
Common Stock represented thereby, and the Exchange Agent shall not be
deemed to have made any representations as to the value of such
shares.

(iii) The Exchange Agent may rely on and shall be protected
in acting upon the written instructions of any officer of Victoria or
the Surviving Corporation with respect to any matter relating to its
actions or duties hereunder; and the Exchange Agent shall be entitled
to request further instructions from Victoria or the Surviving
Corporation, as appropriate, and to act in accordance therewith.

(iv) The Exchange Agent may consult attorneys satisfactory
to the Exchange Agent (including, without limitation, attorneys for
Victoria or the Surviving Corporation) and the written advice and
opinion of such attorneys shall constitute full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion.

(v) The Exchange Agent shall take all other actions which
it or Victoria deems necessary or appropriate under the terms of the
Merger Agreement, the Letter of Transmittal and under the customs and
practices normally applied to transactions of this type and
appropriate to the proper transfer of the Company Common Stock and the
proper maintenance of the Company's and Victoria's shareholder books
and records. Following payment in accordance with the terms hereof,
the Exchange Agent shall forward to Victoria all documents received by
it in connection with tenders of

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<PAGE> 165
Certificates (including Letter of Transmittal, telegrams, facsimile
transmissions or letters representing tenders made without concurrent
deposit of certificates) and the tendered Certificates prominently
marked "CANCELLED" on the front thereof.

5. Alteration of Instructions. The Exchange Agent shall follow
and act upon any written amendments, modifications or supplements to these
instructions and upon any further instructions from Victoria or the Surviving
Corporation in connection with the Merger Agreement or any of the transactions
contemplated thereby.

6. Indemnification of Exchange Agent. Victoria and the Surviving
Corporation covenant and agree to indemnify the Exchange Agent and hold it
harmless against any loss, liability or expense it may incur in the absence of
negligence or bad faith on the part of the Exchange Agent arising out of or in
connection with the administration of its duties hereunder, including, but not
limited to, legal fees and other costs and expenses of defending or preparing
to defend against any claim or liabilities in connection with this Agreement.

7. Compensation for Services. Victoria shall compensate the
Exchange Agent for its services hereunder.

8. Payment of Amounts Due Dissenting Shareholders. In the event
that qualified dissenting shareholders of the Company exercise the rights
afforded them under the Texas Business Corporation Act, such shareholders may
be entitled to payment of an amount other than the Merger Consideration. Any
payment for shares other than the Merger Consideration will be paid only upon
the written instructions of the Surviving Corporation. The Exchange Agent may
request and shall be provided additional funds from the Surviving Corporation
in order to make any required payment to dissenting shareholders, and the
Exchange Agent shall return to Victoria any Merger Consideration which would
have otherwise been payable to such persons. The Exchange Agent shall rely on
the instructions of the Surviving Corporation as to all matters covered by this
Paragraph, including, without limitation, the time and amount of payment to
dissenting shareholders.

9. Unclaimed Funds. Any monies or certificates deposited
hereunder which shall remain unclaimed by the holders of shares of Company
Common Stock for a period of six (6) months following the Effective Time shall,
upon written request of the Surviving Corporation, be returned to Victoria,
plus interest earned on the cash portion thereof and the shareholders of
Certificates not theretofore presented to and accepted by the Exchange Agent
shall look to Victoria only, and not the Exchange Agent, for the payment of any
Merger Consideration in respect of such Certificates.

10. Investment of Exchange Fund. At the direction of the
Surviving Corporation, the Exchange Agent shall invest portions of the Exchange
Fund and remit earnings thereon monthly to the Surviving Corporation, provided
that all such investments shall be in
_____________________________________________________________ [(the "Fund")],
[managed by ________________________________________________________________],
or if for any reason [the Fund] is not available to the Exchange Agent as an
investment alternative, as otherwise directed by the Surviving Corporation.

- 5 -
<PAGE> 166
11. Amendment. Except as otherwise expressly provided herein,
neither this Agreement nor any provision hereof may be amended, modified,
waived, discharged or terminated except in a writing signed by all of the
parties hereto prior to the Effective Time or by Victoria and the Exchange
Agent after the Effective Time; provided, however, that no amendment shall be
made if such modification shall reduce the amount of or eliminate the
opportunity of any shareholder to receive his share of the Merger Consideration
contemplated by the Merger Agreement.

12. Section Headings. The section headings used herein are for
convenience of reference only and shall not define or limit the provisions of
this Agreement.

13. GOVERNING LAW. THIS AGREEMENT AND THE APPOINTMENT OF THE
EXCHANGE AGENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS AND SHALL INURE TO THE BENEFIT OF AND BE BINDING UPON THE
SUCCESSORS AND ASSIGNS OF THE PARTIES HERETO.

14. Notices. Notices under this Agreement shall be deemed given
if made in writing and sent via prepaid first-class United States mail, or by
overnight courier, to:

If to Victoria or, following the Effective Time, the Surviving
Corporation:

Victoria Bankshares, Inc.
One O'Connor Plaza
Victoria, Texas 77901
Attn: Charles R. Hrdlicka,
Chairman of the Board and
Chief Executive Officer

If to the Exchange Agent:

Victoria Bank and Trust Company
One O'Connor Plaza
Victoria, Texas 77901
Attn: _____________________________________

If to the Company prior
to the Effective Time:

United Bancshares, Inc.
2214 Avenue H
Rosenberg, Texas 77471
Attn: D.W. Neuenschwander

- 6 -
<PAGE> 167
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

16. Conflict. In the event the terms of this Agreement conflict
with the terms and provisions of the Merger Agreement, the terms and provisions
of the Merger Agreement shall be controlling.

17. Defined Terms. Capitalized terms not defined herein have the
meanings ascribed to them in the Merger Agreement.

- 7 -
<PAGE> 168
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized appointed officers on the date first
written above.

VICTORIA BANKSHARES, INC.

By: ______________________________________
Charles R. Hrdlicka
Chairman of the Board and Chief
Executive Officer

UNITED BANCSHARES, INC.

By: ______________________________________
D. W. Neuenschwander
President

VICTORIA BANK AND TRUST COMPANY

By: ______________________________________

Name: ____________________________________

Title: ___________________________________

- 8 -
<PAGE> 169
ANNEX A

LETTER OF TRANSMITTAL

For Shares of Common Stock of

UNITED BANCSHARES, INC.

Delivered Pursuant to the Agreement and Plan of Merger
dated as of January 12, 1995

By Mail or Overnight Delivery Service:

Victoria Bank and Trust Company
One O'Connor Plaza
Victoria, Texas 77901
Attention: __________________________

DO NOT HAND DELIVER

DESCRIPTION OF SHARES SURRENDERED

Based on its stock transfer records, United Bancshares, Inc. (the
"Company") has listed below your name, address and the certificate numbers
representing your shares of Common Stock, par value $1.00 per share ("Shares"),
of the Company. If any of the listed information appears to be incorrect,
please notify _____________________________________________ at
_____________________ at once.

_______________________________________________________________________________
_______________________________________________________________________________

Name, Address and Social Security
Number of Registered Holders Certificate(s) Surrendered
_______________________________________________________________________________

Total Number of
Certificate Shares Represented
Number(s) By Certificate(s)
_________________________________ _________________ __________________
Name
_________________ __________________

_________________ __________________
_________________________________

_________________________________
Address

_________________________________ Total Shares __________________
Social Security Number

_______________________________________________________________________________
_______________________________________________________________________________

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Gentlemen:

I, as the registered holder of the above described Shares of the
Company, hereby tender to Victoria Bankshares, Inc. ("Victoria"), such Shares
pursuant to the Agreement and Plan of Merger dated as of January 12, 1995 ("the
Merger Agreement"), by and between Victoria and the Company. I hereby
acknowledge receipt of the Proxy Statement dated _________________, 1995, which
described the merger ("Merger") provided by the Merger Agreement.

I represent and warrant to Victoria that I am the true and lawful
owner of the Shares, and have full capacity, power and authority to exchange
the Shares, free and clear of all liens, restrictions and encumbrances of any
kind whatsoever, and the Shares will not be subject to any adverse claim. I
understand that Victoria Bank and Trust Company, as Exchange Agent for this
exchange, may require additional documentation, and I agree, upon request, to
execute and deliver any additional documents or instruments deemed by the
Exchange Agent or Victoria reasonably necessary to complete the exchange of the
Shares.
<PAGE> 170
The authority conferred in this Letter of Transmittal shall not be
affected by, and shall survive, my death or incapacity, and any obligation I
may have hereunder shall be binding upon my successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and personal and legal
representatives. I acknowledge that the tender of my Shares is irrevocable.

INSTRUCTIONS REGARDING ISSUANCE OF SHARES

If you wish to have the shares of Victoria Common Stock to be issued
pursuant to the Merger Agreement in the name and at the address set forth
above, please sign and date this letter on page 3. If you wish to have the
shares of Victoria Common Stock to be issued pursuant to the Merger Agreement
in a name or to an address other than the name and address specified above,
please complete the following section. You will be required to pay any
transfer or other taxes required by reason of the payment and delivery of
Victoria Common Stock to such other person.

NEW CERTIFICATES TO BE ISSUED
IN A DIFFERENT NAME OR TO A DIFFERENT ADDRESS

If you are entitled to receive shares of Victoria Common Stock and
wish to have certificates representing Victoria Common Stock issued in a name
or to an address other than the name or address shown on your Company stock
certificates, please indicate the name and address of your assignee below:

Name and Address of Assignee

Name:____________________________ Taxpayer I.D. No. or
(Type or print full name) Social Security No.:________________

Address:_______________________________________________________________________

City, State, Zip Code:_________________________________________________________

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<PAGE> 171
PLEASE SIGN AND DATE BELOW AS INDICATED
THEN PLEASE COMPLETE SUBSTITUTE FORM W-9

Signatures _________________________________
_________________________________

Dated _________________________, 1995

Name(s) _____________________________________________________________
(Please Print)

Capacity _________________________________
(Full Title)

Address _________________________________
_________________________________
(Include Zip Code)

Area Code and Telephone Number _____________________________

Tax Identification or Social Security Number _____________________________

________________________________________________________________________________

GUARANTEE OF SIGNATURES

(Must be signed by registered holder(s) as name(s) appear on the certificate(s)
or by person(s) authorized to become registered holder(s) by certificate(s) and
documents transmitted. If signing is by an officer or a corporation, or by an
attorney, executor, administrator, trustee, guardian, agent or other person
acting in a fiduciary or representative capacity, please set forth full title.
See Instruction 1.)

Authorized Signature __________________________________

Name __________________________________
(Please Print)
Title __________________________________

Name of Firm __________________________________

Address __________________________________
__________________________________
(Include Zip Code)

Area Code and Telephone Number __________________________

Dated ____________________________, 1995

________________________________________________________________________________

PLEASE COMPLETE SUBSTITUTE FORM W-9
IT IS THE LAST FORM IN THIS PACKAGE
________________________________________________________________________________

DO NOT WRITE IN SPACE BELOW

Date Received:_________________ By:___________________ Date:______________, 1995

<TABLE>
<CAPTION>
=========================================================================================================================
Company Victoria No. of
Shares Share Accepted Stock Certificate Fractional Cash Check
Surrendered for Exchange Certificate Nos. No. issued Shares Paid No.
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

=========================================================================================================================
</TABLE>

Accepted by:__________________ Checked By:___________ Date:______________, 1995

-3-
<PAGE> 172
LETTER OF TRANSMITTAL
INSTRUCTIONS

1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; SIGNATURE
GUARANTEES. Please send all certificates for Shares to Victoria Bank and Trust
Company, as Exchange Agent (the "Exchange Agent"), with the Letter of
Transmittal, or a facsimile thereof, fully completed and signed by you, the
registered holder(s). Victoria retains the right to require that a signature
on the Letter of Transmittal and the Share certificates be guaranteed by an
Eligible Institution. An Eligible Institution is a member of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc. (the "NASD") or a commercial bank or trust company having an
office, branch or agency located in the United States. If Victoria wishes to
have your signature guaranteed by an Eligible Institution, you will be notified
by separate letter.

If certificates are registered in the name of a person other
than you, the certificate(s) must be duly endorsed or accompanied by stock
powers signed by the registered holder and the Letter of Transmittal. If the
Letter of Transmittal is executed by an officer on behalf of a corporation or
by an executor, administrator, trustee, guardian, attorney, agent or other
person acting in a fiduciary or representative capacity, the Exchange Agent
reserves the right to require that proper documentary evidence of the authority
of the person executing the Letter of Transmittal. If the tendered
certificates are owned of record by two or more joint owners, each of you must
sign the Letter of Transmittal. Questions regarding such evidence of authority
may be referred to _________ _____________________________, a representative of
the Exchange Agent, at ___________________.

THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS IS AT YOUR OPTION AND
RISK. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS STRONGLY RECOMMENDED.

2. ISSUANCE OF VICTORIA COMMON STOCK. You will receive the
Victoria Common Stock for your Shares only after receipt and acceptance by the
Exchange Agent and Victoria of all of the certificates representing your
Shares, a properly completed and executed Letter of Transmittal, and any other
required documents and upon processing of the documents by the Exchange Agent.

3. PAYMENT FOR FRACTIONAL SHARES. As provided in Section 1.6(c)
of the Merger Agreement, Victoria will not issue any certificates of Victoria
Common Stock for fractional shares. In lieu of issuing fractional shares,
Victoria will pay to any Company shareholder entitled to receive a fractional
share of Victoria Common Stock, a cash payment based on a price of $_______ per
share.

4. NO CONDITIONAL TENDERS; WAIVER OF NOTICE. No alternative,
conditional, irregular or contingent deliveries of Shares will be accepted. By
execution of the Letter of Transmittal or any manually signed facsimile
thereof, you waive any rights to receive any notice of the acceptance of your
Shares for exchange.

5. SIGNATURES ON LETTER OF TRANSMITTAL. In order for the Letter
of Transmittal to be properly signed by you, the signature must correspond
exactly with the name(s) as written on the face of the certificate(s).

If the Shares tendered hereby are owned of record by two or
more joint owners, all of you must sign the Letter of Transmittal.

If your Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.

If the certificate(s) representing the Shares transmitted
hereby are registered in your name and the Letter of Transmittal is properly
signed by you, no endorsements of certificates or separate stock powers are
required. In all other cases, the certificate(s) representing the Shares
transmitted hereby must be endorsed or accompanied by appropriate stock powers,
in either case signed exactly as the name(s) of the registered holder(s) appear
on the certificate(s), and if required, signature(s) on such certificate(s) or
stock power(s) must be guaranteed by an Eligible Institution.

If the Letter of Transmittal or any certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of corporation or other acting in a fiduciary or representative
capacity, such person should so indicate when signing, and the Exchange Agent
reserves the right to require proper evidence of their authority to so act.

6. IRREGULARITIES. All questions as to the validity, form,
eligibility, acceptance of and delivery of Shares and the issuance of Victoria
Common Stock and the payment of cash in lieu of fractional shares will be
determined by Victoria, which determination shall be final and binding.
Victoria reserves the absolute right to reject any or all tenders determined by
Victoria not to be in appropriate form or which would, in the opinion of
Victoria's counsel, be unlawful. Victoria also reserves the absolute right in
its sole discretion, to waive any of the conditions hereof, or any defect in
any tender with respect to any particular Shares of any particular shareholder,
and Victoria's interpretations of the terms and conditions of the Merger
Agreement and these instructions shall be final

-4-
<PAGE> 173
and binding. The Exchange Agent and Victoria shall not be obligated to give
notice of defects or irregularities in tenders, nor shall they incur any
liability for failure to give any such notice. Tenders will be deemed not to
have been made until all defects and irregularities have been cured or waived.

7. 20% BACKUP WITHHOLDING. Under the Federal income tax law, you
must provide Victoria with a correct taxpayer identification number ("TIN")
unless an exemption applies. If the correct TIN is not provided, a $50 penalty
may be imposed upon you by the Internal Revenue Service and you will be subject
to backup withholding of 20% of the payments to be received by you.

8. REQUEST FOR ASSISTANCE OF ADDITIONAL COPIES. Questions and
requests for assistance or additional copies of the Letter of Transmittal may
be directed to the Exchange Agent at the addresses set forth at the top of page
1.

IMPORTANT TAX INFORMATION

Under the Federal income tax law, you are to provide Victoria (as
payer) with a correct taxpayer identification number on Substitute Form W-9
below. If Victoria is not provided with the correct taxpayer identification
number, you may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, all payments that are made to you with respect to Shares
(including any cash payable to you under the Merger Agreement in lieu of
fractional shares) may be subject to backup withholding.

Exempt shareholders (including among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. Nonetheless, exempt shareholders should complete the
Substitute Form W-9 below and so indicate their exempt status by writing
"exempt" across the face of the Substitute Form W-9. In order for a foreign
individual to qualify as an exempt recipient, that shareholder must submit a
statement, signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Exchange Agent. See
the enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional information.

If backup withholding applies, Victoria is required to withhold 20% of
any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.

Purpose of Substitute Form W-9

To prevent backup withholding on payments that are made to you with
respect to shares of Victoria Common Stock acquired as a result of the Merger
or with respect to cash payments, if any, receivable in lieu of fractional
shares pursuant to the Merger Agreement, you are required to notify Victoria of
your correct taxpayer identification number by completing the form below
certifying that the taxpayer identification number provided on Substitute Form
W-9 is correct (or that you are awaiting a taxpayer identification number).

What Number to Give

As the record owner of the Shares, you are required to give Victoria
your Social Security Number or Employer Identification Number. If the Shares
are in more than one name or are not in the name of the actual owners, consult
the enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional guidelines on which number to report.

-5-
<PAGE> 174
SUBSTITUTE FORM W-9
Department of the Treasury
Internal Revenue Service

Taxpayer Identification Number

<TABLE>
<S> <C> <C>
PART 1 - PLEASE PROVIDE YOUR TAXPAYER IDENTIFICATION NUMBER IN THE BOX ______________________________
AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW
______________________________
Social Security Number or
Employer Identification Number

PART 2 - Check the following box if you are NOT subject to backup ______________________________
withholding under the provisions of Section 3406(a)(1)(C) of
the Internal Revenue Code because (1) you have not been ______________________________
notified that you are subject to backup withholding as a
result of failure to report all interest or dividends or (2)
the Internal Revenue Service has notified you that you are no
longer subject to backup withholding.

PART 3 - Check the following box if you are awaiting a Taxpayer ______________________________
Identification Number.
______________________________
</TABLE>

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

By checking the box in Part 3, I certify under penalties of perjury that a
taxpayer identification number has not been issued to me, and either (a) I have
mailed or delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office, or (b) I intend to mail or deliver an application in the
near future. I understand that if I do not provide a taxpayer identification
number within sixty (60) days, 20% of all reportable payments made to me
thereafter will be withheld until I provide a number.

CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION
PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.

Signature: _____________________________ Date:_______________________________

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 20% OF ANY PAYMENTS MADE TO YOU. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

________________________________________________________________________________

-6-
<PAGE> 175
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.---Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.

<TABLE>
<CAPTION>
- ----------------------------------------------------------- --------------------------------------------------------
GIVE THE SOCIAL GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: SECURITY NUMBER FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER
OF ---- OF ----
- ----------------------------------------------------------- --------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 9. A valid trust, estate, or The legal entity (Do
pension trust not furnish the
2. Two or more individuals (joint The actual owner of identifying number of
account) the account or, if the personal
combined funds, any representative or
one of the trustee unless the
individuals (1) legal entity itself
is not designated in
3. Husband and wife (joint The actual owner of the account title.)
account) the account or, if (5)
joint funds, either
person(1)

4. Custodian account of a minor The minor(2) 10. Corporate account The corporation
(Uniform Gift to Minors Act)

5. Adult and minor (joint The adult or, if the 11. Religious, charitable, or The organization
account) minor is the only educational organization
contributor, the account
minor(1)
12. Partnership account held in The partnership
the name of the business

6. Account in the name of The ward, minor, or 13. Association, club, or other The organization
guardian or committee for a incompetent person tax-exempt organization
designated ward, minor, or (3)
incompetent person

7. a The usual revocable savings The grantor- 14. A broker or registered The broker or nominee
trust account (grantor is trustee(1) nominee
also trustee)

b So-called trust account that The actual owner(1) 15. Account with the The public entity
is not a legal or valid Department of Agriculture
trust under State law in the name of a public
entity (such as a State or
local government, school
8. Sole proprietorship account The owner(4) district, or prison) that
receives agricultural
program payments
- ----------------------------------------------------------- --------------------------------------------------------
</TABLE>

(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.

Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.

-7-
<PAGE> 176
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2

OBTAINING A NUMBER

If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and apply
for a number.

PAYEES EXEMPT FROM BACKUP WITHHOLDING

Payees specifically exempted from backup withholding on ALL payments include
the following:

- -- A corporation.

- -- A financial institution.

- -- An organization exempt from tax under section 501(a), or an individual
retirement plan.

- -- The United States or any agency or instrumentality thereof.

- -- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.

- -- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.

- -- An international organization or any agency, or instrumentality thereof.

- -- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.

- -- A real estate investment trust.

- -- A common trust fund operated by a bank under section 584(a).

- -- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).

- -- An entity registered at all times under the Investment Company Act of 1940.

- -- A foreign central bank of issue.

Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:

- -- Payments to nonresident aliens subject to withholding under section 1441.

- -- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.

- -- Payments of patronage dividends where the amount received is not paid in
money.

- -- Payments made by certain foreign organizations.

- -- Payments made to a nominee.

Payments of interest not generally subject to backup withholding include the
following:

- -- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.

- -- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).

- -- Payments described in section 6049(b)(5) to nonresident aliens.

- -- Payments on tax-free covenant bonds under section 1451.

- -- Payments made by certain foreign organizations.

- -- Payments made to a nominee.

Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER. WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.

Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045 and 6050A.

PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Beginning January 1, 1984, payers
must generally withhold 20% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number to a
payer. Certain penalties may also apply.

PENALTIES

(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.

(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.

(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDINGS.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.

(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE

-8-
<PAGE> 177

EXHIBIT C

POOLING OF INTEREST CRITERIA

ATTRIBUTES OF COMBINING ENTERPRISES

(a) AUTONOMY CONDITION. Each of the combining enterprises is autonomous
and has not been a subsidiary or division of another enterprise within
two years before the plan of combination is initiated.

(b) INDEPENDENCE CONDITION. Each of the combining enterprises is
independent of the other combining enterprises.

MANNER OF COMBINING INTERESTS

(c) ONE-YEAR RULE. The combination is effected in a single transaction or
is completed in accordance with a specific plan within one year after
the plan is initiated.

(d) COMMON-STOCK-FOR-COMMON-STOCK-CONDITION. An enterprise offers and
issues only common stock with rights identical to those of the
majority of its outstanding voting common stock in exchange for
substantially all of the voting common stock interest of another
enterprise at the date the plan of combination is consummated.

(e) CHANGE-IN-EQUITY-INTERESTS CONDITION. None of the combining
enterprises changes the equity interest of the voting common stock in
contemplation of effecting the combination either within two years
before the plan of combination is initiated or between the dates the
combination is initiated and consummated; changes in contemplation of
effecting the combination may include distributions to stockholders
and additional issuances, exchanges, and retirements of securities.

(f) TREASURY-STOCK CONDITION. Each of the combining enterprises
reacquires shares of voting common stock only for purposes other than
business combinations, and no enterprise reacquires more than a normal
number of shares between the dates the plan of combination is
initiated and consummated.

(g) PROPORTIONATE-INTEREST CONDITION. The ratio of the interest of an
individual common stockholder to those of other common stockholders in
a combining enterprise remains the same as a result of the exchange of
stock to effect the combination.

(h) VOTING-RIGHTS CONDITION. The voting rights to which the common stock
ownership interests in the resulting combined enterprise are entitled
are exercisable by the stockholders; the stockholders are neither
deprived of nor restricted in exercising those rights for a period.
<PAGE> 178
(i) CONTINGENCY CONDITION. The combination is resolved at the date the
plan is consummated and no provisions of the plan relating to the
issue of securities or other consideration are pending.

ABSENCE OF PLANNED TRANSACTIONS

(j) The combined enterprise does not agree directly or indirectly to
retire or reacquire all or part of the common stock issued to effect
the combination.

(k) The combined enterprise does not enter into other financial
arrangements for the benefit of the former stockholders of a combining
enterprise, such as a guaranty of loans secured by stock issued in the
combination, that in effect negates the exchange of equity securities.

(l) The combined enterprise does not intend or plan to dispose of a
significant part of the assets of the combining enterprises within two
years after the combination other than disposals in the ordinary
course of business of the formerly separate enterprise and to
eliminate duplicate facilities or excess capacity.
<PAGE> 179

EXHIBIT D

VOTING AGREEMENT
AND IRREVOCABLE PROXY

This Voting Agreement and Irrevocable Proxy (this "Agreement")
dated as of ______________, 1995 is executed by and among United Bancshares,
Inc., a Texas corporation (the "Company"), Victoria Bankshares, Inc., a Texas
corporation ("Victoria"), and the other persons who are signatories hereto
(referred to herein individually as a "Shareholder" and collectively as the
"Shareholders").

WHEREAS, the Company and Victoria have executed that certain
Agreement and Plan of Merger dated as of January 12, 1995 (the "Merger
Agreement") whereby the Company will be merged with and into Victoria (the
"Merger"); and

WHEREAS, Section 7.12 of the Merger Agreement requires that
the Company deliver to Victoria the irrevocable proxies of the Shareholders;
and

WHEREAS, Victoria and the Company are relying on the
irrevocable proxies in incurring expenses in reviewing the Company's business,
in preparing a proxy statement, in proceeding with the filing of applications
for regulatory approvals, and in undertaking other actions necessary for the
consummation of the Merger;

NOW THEREFORE, the parties hereto agree as follows:

1. Each of the Shareholders hereby represents and
warrants to Victoria and the Company that he is the registered holder of and
has the exclusive right to vote the shares of common stock ("Stock") of the
Company set forth below his name on the signature pages hereto. Each
Shareholder hereby agrees to vote at the shareholders' meeting referred to in
Section 1.8 of the Merger Agreement (the "Meeting") the shares of Stock set
forth below his name on the signature pages hereto and all other shares of
Stock such Shareholder owns of record as of the date of the Meeting and to
direct the vote of all shares of Stock which such Shareholder holds
beneficially and has the power and authority to direct the voting thereof as of
the date of the Meeting (the "Shares") in favor of the authorization and
approval of the Merger Agreement, and the other agreements and transactions
contemplated thereby; provided, however, that no Shareholder shall have any
obligation to vote any shares of Stock in favor of the authorization and
approval of the Merger Agreement and the other agreements and transactions
contemplated thereby if the Pricing Average (as defined in the Merger
Agreement) of Victoria Common Stock, par value $1.00 per share ("Victoria
Common Stock"), decreases below $21.25 per share.

2. In order better to effect the provisions of Section
1, each Shareholder hereby revokes any previously executed proxies and hereby
constitutes and appoints Victoria (the
<PAGE> 180
"Proxy Holder"), with full power of substitution, his true and lawful proxy and
attorney-in-fact to vote at the Meeting all of such Shareholder's Shares in
favor of the authorization and approval of the Merger Agreement and the other
agreements and transactions contemplated thereby, with such modifications to
the Merger Agreement and the other agreements and transactions contemplated
thereby as the parties thereto may make, in the event such Shareholder does not
vote in favor of the authorization and approval of the Merger Agreement and the
other agreements and transactions contemplated thereby; provided, however, that
this proxy shall not apply with respect to any vote on the Merger Agreement and
the other agreements and transactions contemplated thereby if (i) the Merger
Agreement shall have been modified so as to reduce the amount of consideration
to be received by the Shareholders under the Merger Agreement in its present
form, or (ii) if the Pricing Average decreases below $21.25 per share.

3. Each Shareholder hereby covenants and agrees that
until this Agreement is terminated in accordance with its terms, such
Shareholder will not, and will not agree to, without the consent of Victoria,
directly or indirectly, sell, transfer, assign, pledge, hypothecate, cause to
be redeemed or otherwise dispose of any of the Shares or grant any proxy or
interest in or with respect to any such Shares or deposit such shares into a
voting trust or enter into another voting agreement or arrangement with respect
to such Shares except as contemplated by this Agreement, unless the Shareholder
causes the transferee of such Shares to deliver to Victoria an amendment to
this Agreement whereby such transferee or other holder becomes bound by the
terms of this Agreement.

4. This proxy shall be limited strictly and solely to
the power to vote the Shares in the manner set forth in Section 2 and shall not
extend to any other matters.

5. Each Shareholder has no present plan or intention to
sell or otherwise dispose of the common stock of Victoria to be received
pursuant to the Merger. As of the date of consummation of the Merger, each
Shareholder agrees to deliver to Victoria a certificate stating that the
Shareholder has no plan or intention to sell or otherwise dispose of the common
stock of Victoria to be issued pursuant to the Merger as of the date of
consummation of the Merger.

6. Each Shareholder acknowledges that Victoria and the
Company are relying on this Agreement in incurring expenses in reviewing the
Company's business, in preparing a proxy statement, in proceeding with the
filing of applications for regulatory approvals, and in undertaking other
actions necessary for the consummation of the Merger and that the proxy granted
hereby is coupled with an interest and is irrevocable to the full extent
permitted by applicable law, including Article 2.29C of the Texas Business
Corporation Act. Each Shareholder and the Company acknowledge that the
performance of this Agreement is intended to benefit Victoria.

7. The irrevocable proxy granted pursuant hereto shall
continue in effect until the earlier to occur of (i) the termination of the
Merger Agreement, as it may be amended or

2
<PAGE> 181
extended from time to time, or (ii) the consummation of the Merger. In no
event shall this Agreement apply to shares of Victoria Common Stock to be
received by the Shareholders upon consummation of the Merger.

8. The vote of the Proxy Holder shall control in any
conflict between its vote of the Shares and a vote by the Shareholders of the
Shares and the Company agrees to recognize the vote of the Proxy Holder instead
of the vote of the Shareholders in the event the Shareholders do not vote in
favor of the approval of the Merger Agreement as set forth in Section 1 hereof.

9. This Agreement may not be modified, amended, altered
or supplemented with respect to a particular Shareholder except upon the
execution and delivery of a written agreement executed by the Company, Victoria
and the Shareholder.

10. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument.

11. This Agreement, together with the Merger Agreement
and the agreements contemplated thereby, embody the entire agreement and
understanding of the parties hereto in respect to the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
among the parties with respect to such subject matter contained herein.

12. All notices, requests, demands and other
communications required or permitted hereby shall be in writing and shall be
deemed to have been duly given if delivered by hand or mail, certified or
registered mail (return receipt requested) with postage prepaid to the
addresses of the parties hereto set forth below their signature on the
signature pages hereof or to such other address as any party may have furnished
to the others in writing in accordance herewith.

13. This Agreement and the relations among the parties
hereto arising from this Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.

3
<PAGE> 182
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date above written.

UNITED BANCSHARES, INC.

By: ___________________________________

D. W. Neuenschwander
President

Address:

P. O. Box 712
Rosenberg, Texas 77471
Attention: D. W. Neuenschwander

VICTORIA BANKSHARES, INC.

By: ___________________________________
Charles R. Hrdlicka
Chairman of the Board and
Chief Financial Officer

Address:

One O'Connor Plaza
Victoria, Texas 77902
Attention: Mr. Gregory Sprawka

4
<PAGE> 183

SHAREHOLDERS:

___________________________________________________________

Printed Name: _____________________________________________

Address: _________________________________________

_________________________________________

____________ shares of Common Stock

(if applicable)

Pledgee: _________________________________________

Address:
__________________________________________________

________________________________________

Loan No.:
________________________________________

5
<PAGE> 184

EXHIBIT E

OPINIONS REQUIRED FROM COUNSEL
TO THE COMPANY AND THE BANK

(i) the Company is a Texas corporation and a bank holding
company under the Bank Holding Company Act of 1956, as amended, and is duly
organized, validly existing and in good standing under the laws of the State of
Texas. The Bank is a Texas state bank duly organized, validly existing and in
good standing under the laws of the State of Texas. Each of the Company and
the Bank has all requisite corporate power and authority to carry on its
business as we know it to be conducted and to own, lease and operate its
properties and assets as now owned, leased or operated. Each of the Company and
the Bank is duly qualified and in good standing in Texas.

(ii) the Company has all requisite power and authority to
execute and deliver the Agreement, the Exchange Agent Agreement, and any other
agreements contemplated by the Agreement (collectively, the "Other Agreements")
and to consummate the transactions contemplated thereby; all acts (corporate or
otherwise) and other proceedings required to be taken by or on the part of the
Company to execute and deliver the Agreement and the Other Agreements and to
consummate the transactions contemplated therein have been duly and validly
taken; and the Agreement and the Other Agreements have been duly executed and
delivered by, and constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, subject to the
effect of (a) any applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally and
(b) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);

(iii) the authorized capital stock of the Company consists
solely of (a) 5,000,000 shares of Company Common Stock, of which 235,806 shares
are issued and outstanding, and 92 shares of which are held in the treasury;
and (b) 1,000,000 shares of Preferred Stock, which are divided into (x) 66,726
shares of Series A 7 1/2% Cumulative Preferred Stock, of which 42,589 shares
are issued and outstanding, and none of which are held in treasury; and (y)
26,667 shares of Series B 10% Cumulative Preferred Stock, all of which are
issued and outstanding, and none of which are held in treasury; the Company is
the record holder of all of the issued and outstanding capital stock of the
Bank; all of the outstanding shares of the Company Common Stock are validly
issued, fully paid and nonassessable and all of the capital stock of the Bank
is validly issued, fully paid and nonassessable; and to the best of our
knowledge, none of such stock was issued in violation of the preemptive rights
of any person;

(iv) to the best of our knowledge, there are no outstanding
subscriptions, options, rights, warrants, calls, convertible securities,
irrevocable proxies, or other agreements or commitments obligating the Company
or the Bank to issue any shares of, restricting the transfer of, or otherwise
relating to shares of their respective capital stock of any class;
<PAGE> 185
(v) the execution and delivery by the Company of the
Agreement does not and the consummation of the transactions contemplated
thereby will not contravene or violate any provision of or constitute a default
under (a) the articles of incorporation or association or bylaws of the Company
or the Bank, (b) to the best of our knowledge and except as disclosed in the
Agreement, any note, license, instrument, mortgage, deed of trust, or other
agreement or understanding, permit, authorization or contract, order,
arbitration award, judgment or decree, or any other restriction of any kind or
character known to us to which the Company or the Bank is a party or by which
the Company or the Bank or any of their respective assets or properties is
bound, and (c) to the best of our knowledge and except as disclosed in the
Agreement, any law, regulation, rule, administrative regulation or decree of
any court or any governmental agency or body whether domestic or foreign
applicable to the Company or the Bank, or their respective assets or
properties;

(vi) except as disclosed in the Agreement and except for
such consents, approvals, authorizations, actions or filings as have already
been obtained by Victoria, no consent, approval, authorization, action or
filing with any court, governmental agency or public body is required in
connection with the execution, delivery and performance by the Company of the
Agreement;

(vii) except as set forth in Schedule 3.12 to the Agreement,
to the best of our knowledge, neither the Company nor the Bank is a party to
any Proceeding (as defined in the Agreement), nor to the best of our knowledge,
is any Proceeding threatened against or affecting the Company or the Bank,
which by the terms of the Agreement would be required to be set forth in
Section 3.12;

(viii) to the best of our knowledge and except as set forth on
Schedule 3.18 to the Agreement, neither the Company nor the Bank is in material
default under any law or regulation, or under any order of any court,
commission, board, bureau, agency or instrumentality wherever located; and

(ix) upon consummation of the transactions contemplated by
the Agreement in accordance with its terms and upon filing of the Articles of
Merger relating to the Merger by the Secretary of State of Texas, and upon
filing by the Secretary of State of Delaware of a Certificate of Merger the
Merger will have been legally consummated in accordance with the laws of the
State of Texas with the consequences specified in Article 5.06 of the Texas
Business Corporation Act.

-2-
<PAGE> 186

EXHIBIT F

OPINIONS REQUIRED FROM COUNSEL
TO VICTORIA

(i) Victoria is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, and is a
bank holding company under the Bank Holding Company Act of 1956, as amended.
Victoria has all requisite corporate power and authority to carry on its
business as now being conducted and to own, lease and operate its properties as
now owned, leased or operated. Victoria is duly qualified and in good standing
in the respective states where such qualification is required.

(ii) Victoria has all requisite power and authority to
execute and deliver the Agreement and to consummate the transactions
contemplated thereby; all acts (corporate or otherwise) and other proceedings
required to be taken by or on the part of Victoria to execute and deliver the
Agreement and to consummate the transactions contemplated therein have been
duly and validly taken; and the Agreement has been duly executed and delivered
by, and constitutes the valid and binding obligation of each of Victoria
enforceable against Victoria in accordance with its terms, subject to the
effect of (a) any applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally and
(b) general principles or equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);

(iii) the shares of Victoria Common Stock to be issued
pursuant to the Agreement are validly issued, fully paid and nonassessable;
and, to the best of our knowledge and except as contemplated by the Agreement,
the shares of Victoria Common Stock issued pursuant to the Agreement are not
subject to any agreements or understandings to which Victoria is a party with
respect to the voting or transfer of such shares, are not subject to any
agreements or understandings among any other parties with respect to the voting
or transfer of such shares, and have not been issued in violation of the
preemptive rights of any person;

(iv) the execution and delivery by Victoria of the Agreement
does not and the consummation of the transactions contemplated thereby will not
contravene or violate any provision of or constitute a default under (a) the
certificate of incorporation or bylaws of Victoria, (b) to the best of our
knowledge and except as disclosed in the Agreement, any note, license,
instrument, mortgage, deed of trust, or other agreement or understanding,
permit, authorization or contract, order, arbitration award, judgment of
decree, or any other restriction of any kind known to us to which Victoria is a
party or by which Victoria or any of its assets or properties is bound, the
breach or violation of which could have a material adverse effect on Victoria
and its Subsidiaries taken as a whole, and (c) to the best of our knowledge and
except as disclosed in the Agreement, any law, regulation, rule, administrative
regulation or decree of any court or any governmental agency or body applicable
to Victoria or its assets or properties;
<PAGE> 187
(v) except as disclosed in the Agreement and except for
such consents, approvals, authorizations, actions or filings as have already
been obtained, no consent, approval, authorization, action or filing with any
court, governmental agency or public body is required in connection with the
execution, delivery and performance by Victoria of the Agreement;

(vi) to the best of our knowledge, Victoria is not in
violation of or default under the Certificate of Incorporation or Bylaws of
Victoria or any agreement, document or instrument under which Victoria is
obligated or bound, or any law, order, judgment, or regulation applicable to
Victoria or any of its Subsidiaries, the violation of which could have a
material adverse effect on Victoria and its Subsidiaries taken as a whole; and

(vii) the shares of Victoria Common Stock to be issued
pursuant to the Agreement have been registered under the Securities Act of
1933, as amended.

-2-
<PAGE> 188

EXHIBIT G

RELEASE OF CLAIMS

THIS RELEASE OF CLAIMS ("Release") dated the ___ day of ___________,
1995, is executed and delivered by the undersigned individual to United
Bancshares, Inc., a Texas corporation (the "Company"), and Rosenberg Bank and
Trust, a Texas state bank (the "Bank").

WHEREAS, Victoria Bankshares, Inc. ("Victoria") will acquire the
Company pursuant to that certain Agreement and Plan of Merger dated as of
January 12, 1995 by and between Victoria and the Company (the "Agreement"),
whereby the Company will be merged with and into Victoria; and

WHEREAS, Victoria has required as a condition to such acquisition that
the undersigned execute and deliver this Release to confirm the absence of any
claims by the undersigned against the Company or the Bank;

NOW, THEREFORE, in consideration of the premises contained herein and
ten dollars and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby agrees as
follows:

Section 1. Release. The undersigned hereby RELEASES and FOREVER
DISCHARGES the Company and the Bank from all manners of action, causes of
action, suits, debts, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, premises,
variances, trespasses, damages, judgments, executions, claims and demands
whatsoever in law or in equity which the undersigned ever had, now has, or
hereafter can, shall or may have against the Company or the Bank, in respect of
any and all agreements and obligations incurred on or prior to the date hereof,
or in respect of any event occurring or circumstances existing on or prior to
the date hereof; provided, however, that the Company and the Bank shall not be
released from any of their respective obligations or liabilities to the
undersigned (i) in respect of accrued compensation permitted by his agreement
with the Company or the Bank; (ii) pursuant to the provisions of the articles
of incorporation or association or bylaws of the Company or the Bank regarding
the indemnification of directors and officers; and (iii) in connection with any
indebtedness or contractual obligation or liability to the undersigned existing
on the date hereof.

Section 2. Successors. This Release shall be binding upon the
undersigned and his or her heirs, devisees, administrators, executors, personal
representatives, successors and assigns and shall inure to the benefit of the
Company and the Bank and their respective successors and assigns.

Section 3. Governing Law. This Release shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to Texas principles of conflicts of law.
<PAGE> 189
Section 4. Modification. This Release may be modified only by a
written instrument executed by the undersigned and the Company and the Bank.

IN WITNESS WHEREOF, the undersigned has executed this Release
effective as of the date first above written.

________________________________________
Signature

________________________________________
Printed Name

STATE OF TEXAS )
)
COUNTY OF FORT BEND )

This instrument was acknowledged before me on _______________, 1995 by
____________________.

________________________________________
Notary Public in and for the
State of Texas

________________________________________
Notary's Name Typed or Printed

My Commission Expires: _________________

2
<PAGE> 190

EXHIBIT H

RELEASE OF CLAIMS

THIS RELEASE OF CLAIMS ("Release") dated the _____ day of
_________________, 1995, is executed and delivered by United Bancshares, Inc.,
a Texas corporation (the "Company"), and Rosenberg Bank and Trust, a Texas
state bank (the "Bank").

WHEREAS, the persons listed on Exhibit A attached hereto and made a
part hereof constitute the duly elected officers ("Officers") and directors
("Directors") of the Company and the Bank on the date hereof;

WHEREAS, Victoria Bankshares, Inc., a Texas corporation ("Victoria"),
will acquire the Company pursuant to that certain Agreement and Plan of Merger
dated as of January 12, 1995 by and between Victoria or the Company
("Agreement"), whereby the Company will be merged with and into Victoria; and

WHEREAS, the Company has required as a condition to such acquisition
that the Officers and Directors be released of any claims by the Company or the
Bank against the Officers and Directors;

Section 1. Release. The Company and the Bank hereby RELEASE and
FOREVER DISCHARGE the Officers and Directors from all manners of action, causes
of action, suits, debts, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, premises,
variances, trespasses, damages, judgments, executions, claims and demands
whatsoever in law or in equity which the Company or the Bank ever had, now
have, or hereafter can, shall or may have against the Officers and Directors,
in respect of any and all agreements and obligations incurred on or prior to
the date hereof, or in respect of any event occurring or circumstances existing
on or prior to the date hereof; provided, however, that no Officer or Director
shall be released from (i) any action arising from intentional fraud, deceit or
wilful misconduct in connection with the transactions contemplated by the
Agreement or otherwise, or (ii) his or her obligations or liabilities to the
Company or the Bank in connection with any indebtedness or any contractual
obligation or liability of such Officer or Director to the Company or the Bank
existing on the date hereof.

Section 2. Successors. This Release shall be binding upon the Company
and the Bank and their respective successors and assigns and shall inure to the
benefit of the Officers and Directors and their respective heirs, devisees,
administrators, executors, successors and assigns.
<PAGE> 191
Section 3. Governing Law. This Release shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to Texas principles of conflicts of law.

Section 4. Counterparts. This Release may be executed in several
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same instrument.

Section 5. Modification. This Release may be modified as to any
Officer or Director only by a written instrument executed by the undersigned
and such Officer or Director.

IN WITNESS WHEREOF, the Company and the Bank have executed this
Release effective as of the date first above written.

UNITED BANCSHARES, INC.

By: _______________________________________
D. W. Neuenschwander
President

ROSENBERG BANK AND TRUST

By: _______________________________________
D. W. Neuenschwander
President

2
<PAGE> 192
STATE OF TEXAS )
)
COUNTY OF FORT BEND )

This instrument was acknowledged before me on _______________, 1995 by
D.W. Neuenschwander, President of United Bancshares, Inc. and Rosenberg Bank
and Trust.

_______________________________________
Notary Public in and for the
State of Texas

_______________________________________
Notary's Name Typed or Printed

My Commission Expires: ________________

3
<PAGE> 193

______________________________

APPENDIX II

DISSENTERS' RIGHTS
OF APPRAISAL

______________________________
<PAGE> 194

PROVISIONS OF THE TEXAS BUSINESS CORPORATION ACT
RELATING TO
RIGHTS OF DISSENTING SHAREHOLDERS

ART. 5.12. PROCEDURE FOR DISSENT BY SHAREHOLDERS AS TO SAID CORPORATE
ACTIONS

A. Any shareholder of any domestic corporation who has the right
to dissent from any of the corporate actions referred to in Article 5.11 of
this Act may exercise that right to dissent only by complying with the
following procedures:

(1)(a) With respect to proposed corporate action that is
submitted to a vote of shareholders at a meeting, the shareholder shall file
with the corporation, prior to the meeting, a written objection to the action,
setting out that the shareholder's right to dissent will be exercised if the
action is effective and giving the shareholder's address, to which notice
thereof shall be delivered or mailed in that event. If the action is effected
and the shareholder shall not have voted in favor of the action, the
corporation, in the case of action other than a merger, or the surviving or new
corporation (foreign or domestic) or other entity that is liable to discharge
the shareholder's right of dissent, in the case of a merger, shall, within ten
(10) days after the action is effected, deliver or mail to the shareholder
written notice that the action has been effected, and the shareholder may,
within ten (10) days from the delivery or mailing of the notice, make written
demand on the existing, surviving, or new corporation (foreign or domestic) or
other entity, as the case may be, for payment of the fair value of the
shareholder's shares. The fair value of the shares shall be the value thereof
as of the day immediately preceding the meeting, excluding any appreciation or
depreciation in anticipation of the proposed action. The demand shall state
the number and class of the shares owned by the shareholder and the fair value
of the shares as estimated by the shareholder. Any shareholder failing to make
demand within the ten (10) day period shall be bound by the action.

(b) With respect to proposed corporate action that is
approved pursuant to Section A of Article 9.10 of this Act, the corporation, in
the case of action other than a merger, and the surviving or new corporation
(foreign or domestic) or other entity that is liable to discharge the
shareholder's right of dissent, in the case of a merger, shall, within ten (10)
days after the date the action is effected, mail to each shareholder of record
as of the effective date of the action notice of the fact and date of the
action and that the shareholder may exercise the shareholder's right to dissent
from the action. The notice shall be accompanied by a copy of this Article and
any articles or documents filed by the corporation with the Secretary of State
to effect the action. If the shareholder shall not have consented to the
taking of the action, the shareholder may, within twenty (20) days after the
mailing of the notice, make written demand on the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may be, for
payment of the fair value of the shareholder's shares. The fair value of the
shares shall be the value thereof as of the date the written consent
authorizing the action was delivered to the corporation pursuant to Section A
of Article 9.10 of this Act, excluding any appreciation or depreciation in
anticipation of the action. The demand shall state the number and class of
shares owned by the dissenting shareholder and the fair value of the shares as
estimated by the shareholder. Any shareholder failing to make demand within
the twenty (20) day period shall be bound by the action.

(2) Within twenty (20) days after receipt by the
existing, surviving, or new corporation (foreign or domestic) or other entity,
as the case may be, of a demand for payment made by a dissenting shareholder in
accordance with Subsection (1) of this Section, the corporation (foreign or
domestic) or other entity shall deliver or mail to the shareholder a written
notice that shall either set out that the corporation (foreign or domestic) or
other entity accepts the amount claimed in the demand and agrees to pay that
amount within ninety (90) days after the date on which the action was effected,
and, in the case of shares represented by certificates, upon the surrender of
the certificates duly endorsed, or shall contain an estimate by the corporation
(foreign or domestic) or other entity of the fair value of the shares, together
with an offer to pay the amount of that estimate within ninety (90) days after
the date on which the action was effected, upon receipt of notice within sixty
(60) days after that date from the shareholder that the shareholder agrees to
accept that amount and, in the case of shares represented by certificates, upon
the surrender of the certificates duly endorsed.
<PAGE> 195

(3) If, within sixty (60) days after the date on which
the corporate action was effected, the value of the shares is agreed upon
between the shareholder and the existing, surviving, or new corporation
(foreign or domestic) or other entity, as the case may be, payment for the
shares shall be made within ninety (90) days after the date on which the action
was effected and, in the case of shares represented by certificates, upon
surrender of the certificates duly endorsed. Upon payment of the agreed value,
the shareholder shall cease to have any interest in the shares or in the
corporation.

B. If, within the period of sixty (60) days after the date on
which the corporate action was effected, the shareholder and the existing,
surviving, or new corporation (foreign or domestic) or other entity, as the
case may be, do not so agree, then the shareholder or the corporation (foreign
or domestic) or other entity may, within sixty (60) days after the expiration
of the sixty (60) day period, file a petition in any court of competent
jurisdiction in the county in which the principal office of the domestic
corporation is located, asking for a finding and determination of the fair
value of the shareholder's shares. Upon the filing of any such petition by the
shareholder, service of a copy thereof shall be made upon the corporation
(foreign or domestic) or other entity, which shall, within ten (10) days after
service, file in the office of the clerk of the court in which the petition was
filed a list containing the names and addresses of all shareholders of the
domestic corporation who have demanded payment for their shares and with whom
agreements as to the value of their shares have not been reached by the
corporation (foreign or domestic) or other entity. If the petition shall be
filed by the corporation (foreign or domestic) or other entity, the petition
shall be accompanied by such a list. The clerk of the court shall give notice
of the time and place fixed for the hearing of the petition by registered mail
to the corporation (foreign or domestic) or other entity and to the
shareholders named on the list at the addresses therein stated. The forms of
the notices by mail shall be approved by the court. All shareholders thus
notified and the corporation (foreign or domestic) or other entity shall
thereafter be bound by the final judgment of the court.

C. After the hearing of the petition, the court shall determine
the shareholders who have complied with the provisions of this Article and have
become entitled to the valuation of and payment for their shares, and shall
appoint one or more qualified appraisers to determine that value. The
appraisers shall have power to examine any of the books and records of the
corporation the shares of which they are charged with the duty of valuing, and
they shall make a determination of the fair value of the shares upon such
investigation as to them may seem proper. The appraisers shall also afford a
reasonable opportunity to the parties interested to submit to them pertinent
evidence as to the value of the shares. The appraisers shall also have such
power and authority as may be conferred on Masters in Chancery by the Rules of
Civil Procedure or by the order of their appointment.

D. The appraisers shall determine the fair value of the shares of
the shareholders adjudged by the court to be entitled to payment for their
shares and shall file their report of that value in the office of the clerk of
the court. Notice of the filing of the report shall be given by the clerk to
the parties in interest. The report shall be subject to exceptions to be heard
before the court both upon the law and the facts. The court shall by its
judgment determine the fair value of the shares of the shareholders entitled to
payment for their shares and shall direct the payment of that value by the
existing, surviving, or new corporation (foreign or domestic) or other entity,
together with interest thereon, beginning 91 days after the date on which the
applicable corporate action from which the shareholder elected to dissent was
effected to the date of such judgment, to the shareholders entitled to payment.
The judgment shall be payable to the holders of uncertificated shares
immediately but to the holders of shares represented by certificates only upon,
and simultaneously with, the surrender to the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may be, of duly
endorsed certificates for those shares. Upon payment of the judgment, the
dissenting shareholders shall cease to have any interest in those shares or in
the corporation. The court shall allow the appraisers a reasonable fee as
court costs, and all court costs shall be allotted between the parties in the
manner that the court determines to be fair and equitable.

E. Shares acquired by the existing, surviving, or new corporation
(foreign or domestic) or other entity, as the case may be, pursuant to the
payment of the agreed value of the shares or pursuant to payment of the
judgment entered for the value of the shares, as in this Article provided,
shall, in the case of a merger, be treated as provided in the plan of merger
and, in all other cases, may be held and disposed of by the corporation as in
the case of other treasury shares.
<PAGE> 196

F. The provisions of this Article shall not apply to a merger if,
on the date of the filing of the articles of merger, the surviving corporation
is the owner of all the outstanding shares of the other corporations, domestic
or foreign, that are parties to the merger.

G. In the absence of fraud in the transaction, the remedy
provided by this Article to a shareholder objecting to any corporate action
referred to in Article 5.11 of this Act is the exclusive remedy for the
recovery of the value of his shares or money damages to the shareholder with
respect to the action. If the existing, surviving, or new corporation (foreign
or domestic) or other entity, as the case may be, complies with the
requirements of this Article, any shareholder who fails to comply with the
requirements of this Article shall not be entitled to bring suit for the
recovery of the value of his shares or money damages to the shareholder with
respect to the action.