<PAGE> 1
================================================================================
FORM 11-K
---------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File Number: 0-23113
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Prime Bank Employees' 401(k) Profit Sharing Plan and Trust
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Prime Bancshares, Inc.
12200 Northwest Freeway
Houston, Texas 77092
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<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.............................3
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN
BENEFITS ............................................................5
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS....................................................6
NOTES TO FINANCIAL STATEMENTS...........................................7
SUPPLEMENTARY INFORMATION
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES ON DECEMBER 31, 1998.......................................16
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR
THE YEAR ENDED DECEMBER 31, 1998....................................17
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Plan Committee
Prime Bank Employees' 401(k) Profit Sharing Plan and Trust
We have audited the accompanying statements of net assets available for
plan benefits of Prime Bank Employees' 401(k) Profit Sharing Plan and Trust
(Plan) as of December 31, 1998 and 1997, and the related statements of changes
in net assets available for plan benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan benefits of
the Plan as of December 31, 1998 and 1997, and the changes in its net assets
available for plan benefits for the years then ended, in conformity with
generally accepted accounting principles.
3
<PAGE> 4
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
are presented to comply with the Department of Labor Rules and Regulations for
Reporting and Disclosure Under the Employee Retirement Income Security Act of
1974 and are not a required part of the basic financial statements. The
supplemental schedules have been subjected to the auditing procedures applied in
our audit of the basic financial statements and, in our opinion, are fairly
stated, in all material respects, in relation to the basic financial statements
taken as a whole.
/s/ GRANT THORNTON LLP
Houston, Texas
June 10, 1999
4
<PAGE> 5
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31,
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
ASSETS
Investments at fair value:
Money market funds $ 33,649 $ 4,577
Equity investment 200,618 --
Mutual funds 5,551,120 4,438,832
Participant notes receivable 17,814 9,780
---------- ----------
5,803,201 4,453,189
Receivables:
Participants' contributions -- 22,718
Employer's contributions -- 4,494
---------- ----------
-- 27,212
---------- ----------
Total assets 5,803,201 4,480,401
LIABILITIES
Liabilities -- --
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $5,803,201 $4,480,401
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Year ended December 31,
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 460,784 $ 269,635
Interest, dividends and other 307,026 321,434
---------- ----------
767,810 591,069
Contributions:
Participants' 697,056 597,498
Employer's 138,309 118,776
Rollover 16,429 46,629
Rollover due to mergers 129,634 283,231
---------- ----------
981,428 1,046,134
---------- ----------
Total additions 1,749,238 1,637,203
Deductions from net assets attributed to:
Benefits paid to participants 397,745 392,104
Administrative expenses 28,693 22,246
---------- ----------
Total deductions 426,438 414,350
---------- ----------
Net increase 1,322,800 1,222,853
Net assets available for plan benefits:
Beginning of year 4,480,401 3,257,548
---------- ----------
End of year $5,803,201 $4,480,401
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE> 7
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN
The following description of Prime Bank Employees' 401(k) Profit Sharing
Plan and Trust (Plan) provides only general information. Participants should
refer to the plan agreement for a more complete description of the Plan's
provisions.
1. GENERAL
The Plan is a defined contribution plan covering all employees (except
security guards) of Prime Bank (the Company) who have completed six months
of service and are age 20-1/2 or older. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
2. CONTRIBUTIONS
Each year, participants may contribute up to 15% of pre-tax annual
compensation as defined in the Plan. The Company contributes 25% of the
first 6% of base compensation that a participant contributes to the Plan.
Additional amounts may be contributed at the option of the Company's Board
of Directors. The Company made no discretionary contributions during 1997
and 1998.
3. VESTING
Participants are immediately vested in their voluntary contributions, the
employer matching contributions, and Plan earnings. Vesting in the employer
discretionary contribution is based on years of continuous service subject
to the following schedule. Forfeitures are used to reduce future employer
matching contributions.
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
0-1 0%
2 20%
3 40%
4 60%
5 80%
6 100%
</TABLE>
4. RELATED PARTY TRANSACTIONS
Certain of the Plan's administrative expenses are paid by the Employer on
behalf of the Plan.
7
<PAGE> 8
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN - CONTINUED
5. PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts a maximum equal to the 50
percent of their account balance. Loan transactions are treated as a
transfer from the investment fund to the Loan fund. Loan terms range from
one to five years. The loans are secured by the balance in the participant's
account and bear interest at a rate commensurate with local prevailing rates
as determined quarterly by the Plan administrator. Interest rates range from
6.00 to 8.75 percent. Principal and interest are paid ratably through
monthly payroll deductions.
6. PAYMENT OF BENEFITS
On termination of service, a participant may elect to receive either a
lump-sum amount equal to the value of the participant's vested interest in
his or her account, or in periodic installments.
NOTE B - SUMMARY OF ACCOUNTING POLICIES
The following are the significant accounting policies followed by the Plan:
1. BASIS OF ACCOUNTING
The accompanying financial statements are prepared under the accrual method
of accounting.
2. USE OF ESTIMATES
In preparing the financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets, liabilities, and
changes therein and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
3. INVESTMENT VALUATION AND INCOME RECOGNITION
Investments are valued at their fair market value as reported to the Plan by
the Trustee.
8
<PAGE> 9
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE B - SUMMARY OF ACCOUNTING POLICIES - CONTINUED
4. DETERMINATION OF REALIZED AND UNREALIZED GAIN OR LOSS ON INVESTMENTS
Unrealized appreciation or depreciation of fair market values of investments
held at year end and gain or loss on sale of investments during the year are
determined using the basis of the applicable investment at the beginning of
the year or purchase price, if acquired during the year.
5. PAYMENT OF BENEFITS
Benefits are recorded when paid.
NOTE C - ADMINISTRATION OF PLAN ASSETS
The Plan's assets are held by Smith Barney Corporate Trust Company, the
trustee of the Plan. Company contributions are held and managed by the
trustee, which invests cash received, interest, and dividend income and
makes distributions to participants.
NOTE D - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
NOTE E - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The Form 5500 for 1998 has not been prepared as of the date of this report.
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500 as of December 31, 1997.
<TABLE>
<S> <C>
Net assets available for plan benefits per the financial
statements $4,480,401
Amounts allocated to withdrawing participants 4,241
----------
Net assets available for benefits per the Form 5500 $4,476,160
==========
</TABLE>
9
<PAGE> 10
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE E - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 - CONTINUED
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for the year ended December 31, 1997:
<TABLE>
<S> <C>
Benefits paid to participants per the financial statements $392,104
Amounts allocated to withdrawing participants 4,241
--------
Benefits paid to participants per the Form 5500 $396,345
========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior
to December 31, but not yet paid as of that date.
NOTE F - TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated July 14, 1995, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The
Plan has been amended since receiving the determination letter. However, the
Company's management believes that the Plan is designed and is currently
being operated in compliance with the applicable requirements of the IRC.
NOTE G -ROLLOVERS DUE TO MERGERS
During 1997, the Company completed a merger with First Northwestern Bank,
N.A. During 1998, the Company completed a merger with Sunbelt National Bank.
Assets that were previously held in the merged banks' Plans were transferred
in the Plan for employees that continued service with the Company.
NOTE H - INVESTMENTS WITH FUND INFORMATION
Following are the statements of net assets available for plan benefits and
the statements of changes in net assets available for plan benefits by
optional participant investment fund as of December 31, 1998 and 1997, and
for the years then ended.
10
<PAGE> 11
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE H - INVESTMENTS WITH FUND INFORMATION - CONTINUED
Statement of Net Assets Available for Plan Assets with Fund Information
December 31, 1998
<TABLE>
<CAPTION>
Smith Barney Shearson Consulting Group Capital Markets Funds
---------------------------------------------------------------------
Smith Barney
Shearson Large Large Small
Reserve Deposit Capitalization Capitalization Capitalization International
Account Money Growth Value Equity Growth Equity
Market Investments Investments Investments Investments
--------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Money market funds $ 33,649 $ -- $ -- $ -- $ --
Equity investments -- -- -- -- --
Mutual funds -- 1,649,105 1,426,802 857,763 332,049
Participant notes
receivable -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total investments 33,649 1,649,105 1,426,802 857,763 332,049
Receivables:
Participant -- -- -- -- --
Employer -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total receivables -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total assets 33,649 1,649,105 1,426,802 857,763 332,049
LIABILITIES
Liabilities -- -- -- -- --
---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 33,649 $1,649,105 $1,426,802 $ 857,763 $ 332,049
========== ========== ========== ========== ==========
<CAPTION>
Smith Barney Shearson
Consulting Group
Capital Markets Funds
---------------------
Stable Prime
Value Bancshares,
Investments Inc. Loan Fund Total
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Money market funds $ -- $ -- $ -- $ 33,649
Equity investments -- 200,618 -- 200,618
Mutual funds 1,285,401 -- -- 5,551,120
Participant notes
receivable -- -- 17,814 17,814
---------- ---------- ---------- ----------
Total investments 1,285,401 200,618 17,814 5,803,201
Receivables:
Participant -- -- -- --
Employer -- -- -- --
---------- ---------- ---------- ----------
Total receivables -- -- -- --
---------- ---------- ---------- ----------
Total assets 1,285,401 200,618 17,814 5,803,201
LIABILITIES
Liabilities -- -- -- --
---------- ---------- ---------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $1,285,401 $ 200,618 $ 17,814 $5,803,201
========== ========== ========== ==========
</TABLE>
11
<PAGE> 12
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE H - INVESTMENTS WITH FUND INFORMATION - CONTINUED
Statement of Net Assets Available for Plan Assets with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
Smith Barney Shearson Consulting Group Capital Markets Funds
---------------------------------------------------------------------
Smith Barney
Shearson Large Large Small
Reserve Deposit Capitalization Capitalization Capitalization International
Account Money Growth Value Equity Growth Equity
Market Investments Investments Investments Investments
--------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Money market funds $ 4,577 $ -- $ -- $ -- $ --
Mutual funds -- 1,058,515 1,142,865 745,146 277,988
Participant notes
receivable -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total investments 4,577 1,058,515 1,142,865 745,146 277,988
Receivables:
Participant -- 5,233 5,050 3,946 2,162
Employer -- 1,036 999 781 428
---------- ---------- ---------- ---------- ----------
Total receivables -- 6,269 6,049 4,727 2,590
---------- ---------- ---------- ---------- ----------
Total assets 4,577 1,064,784 1,148,914 749,873 280,578
LIABILITIES
Liabilities -- -- -- -- --
---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 4,577 $1,064,784 $1,148,914 $ 749,873 $ 280,578
========== ========== ========== ========== ==========
<CAPTION>
Smith Barney Shearson
Consulting Group
Capital Markets Funds
---------------------
Stable
Value
Investments Loan Fund Total
----------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Investments, at fair value:
Money market funds $ -- $ -- $ 4,577
Mutual funds 1,214,318 -- 4,438,832
Participant notes
receivable -- 9,780 9,780
---------- ---------- ----------
Total investments 1,214,318 9,780 4,453,189
Receivables:
Participant 6,327 -- 22,718
Employer 1,250 -- 4,494
---------- ---------- ----------
Total receivables 7,577 -- 27,212
---------- ---------- ----------
Total assets 1,221,895 9,780 4,480,401
LIABILITIES
Liabilities -- -- --
---------- ---------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $1,221,895 $ 9,780 $4,480,401
========== ========== ==========
</TABLE>
12
<PAGE> 13
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE H - INVESTMENTS WITH FUND INFORMATION - CONTINUED
Statement of Changes in Net Assets Available for
Plan Assets with Fund Information
December 31, 1998
<TABLE>
<CAPTION>
Smith Barney Shearson Consulting Group Capital Markets Funds
-------------------------------------------------------------
Smith Barney
Shearson Large Large Small
Reserve Deposit Capitalization Capitalization Capitalization International
Account Money Growth Value Equity Growth Equity
Market Investments Investments Investments Investments
-------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ -- $ 374,842 $ (30,393) $ (5,951) $ 37,250
Interest, dividends and other 1,501 64,163 189,626 25,032 25,293
----------- ----------- ----------- ----------- -----------
1,501 439,005 159,233 19,081 62,543
Contributions:
Participants' -- 170,948 171,038 123,005 62,561
Employer's -- 34,112 33,411 24,865 11,460
Rollover -- 4,487 3,423 1,872 755
Rollover due to mergers -- 45,695 35,415 21,477 8,071
----------- ----------- ----------- ----------- -----------
-- 255,242 243,287 171,219 82,847
----------- ----------- ----------- ----------- -----------
Total additions 1,501 694,247 402,520 190,300 145,390
Deductions from net assets
attributed to:
Benefits paid to participants -- 78,837 100,442 32,274 20,445
Administrative expenses -- 7,485 7,729 4,240 1,535
----------- ----------- ----------- ----------- -----------
Total deductions -- 86,322 108,171 36,514 21,980
Transfers - net 27,571 (23,604) (16,461) (45,896) (71,939)
----------- ----------- ----------- ----------- -----------
Net increase 29,072 584,321 277,888 107,890 51,471
Net assets available for plan benefits:
Beginning of year 4,577 1,064,784 1,148,914 749,873 280,578
----------- ----------- ----------- ----------- -----------
End of year $ 33,649 $ 1,649,105 $ 1,426,802 $ 857,763 $ 332,049
=========== =========== =========== =========== ===========
<CAPTION>
Smith Barney Shearson
Consulting Group
Capital Markets Funds
---------------------
Stable Prime
Value Bancshares,
Investments Inc. Loan Fund Total
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ 76,423 $ 8,613 $ -- $ 460,784
Interest, dividends and other -- 698 713 307,026
----------- ----------- ----------- -----------
76,423 9,311 713 767,810
Contributions:
Participants' 162,264 7,240 -- 697,056
Employer's 33,205 1,256 -- 138,309
Rollover 5,892 -- -- 16,429
Rollover due to mergers 18,976 -- -- 129,634
----------- ----------- ----------- -----------
220,337 8,496 -- 981,428
----------- ----------- ----------- -----------
Total additions 296,760 17,807 713 1,749,238
Deductions from net assets
attributed to:
Benefits paid to participants 165,747 -- -- 397,745
Administrative expenses 7,704 -- -- 28,693
----------- ----------- ----------- -----------
Total deductions 173,451 -- -- 426,438
Transfers - net (59,803) 182,811 7,321 --
----------- ----------- ----------- -----------
Net increase 63,506 200,618 8,034 1,322,800
Net assets available for plan benefits:
Beginning of year 1,221,895 -- 9,780 4,480,401
----------- ----------- ----------- -----------
End of year $ 1,285,401 $ 200,618 $ 17,814 $ 5,803,201
=========== =========== =========== ===========
</TABLE>
13
<PAGE> 14
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE H - INVESTMENTS WITH FUND INFORMATION - CONTINUED
Statement of Changes in Net Assets Available
for Plan Assets with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
Smith Barney Shearson Consulting Group Capital Markets Funds
------------------------------------------------------------------
Smith Barney
Shearson Large Large Small
Reserve Deposit Capitalization Capitalization Capitalization International
Account Money Growth Value Equity Growth Equity
Market Investments Investments Investments Investments
--------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in
fair value of investments $ -- $ 138,716 $ 48,324 $ 16,653 $ (7,991)
Interest, dividends and other 852 71,126 197,017 49,110 3,010
----------- ----------- ----------- ----------- -----------
852 209,842 245,341 65,763 (4,981)
Contributions:
Participants' -- 135,086 130,659 106,119 57,677
Employer's -- 27,399 26,420 21,560 10,609
Rollover -- 16,279 17,564 6,621 5,386
First Northwestern rollover -- 12,990 13,039 2,777 1,090
----------- ----------- ----------- ----------- -----------
-- 191,754 187,682 137,077 74,762
----------- ----------- ----------- ----------- -----------
Total additions 852 401,596 433,023 202,840 69,781
Deductions from net assets attributed to:
Benefits paid to participants -- 65,506 58,437 58,679 17,423
Administrative expenses -- 5,097 5,489 3,681 1,507
----------- ----------- ----------- ----------- -----------
Total deductions -- 70,603 63,926 62,360 18,930
Transfers - net 3,725 48,052 41,958 50,908 31,535
----------- ----------- ----------- ----------- -----------
Net increase 4,577 379,045 411,055 191,388 82,386
Net assets available for plan benefits:
Beginning of year -- 685,739 737,859 558,485 198,192
----------- ----------- ----------- ----------- -----------
End of year $ 4,577 $ 1,064,784 $ 1,148,914 $ 749,873 $ 280,578
=========== =========== =========== =========== ===========
<CAPTION>
Smith Barney Shearson
Consulting Group
Capital Markets Funds
---------------------
Stable
Value
Investments Loan Fund Total
----------- ---------- ----------
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in
fair value of investments $ 73,933 $ -- $ 269,635
Interest, dividends and other -- 319 321,434
----------- ----------- -----------
73,933 319 591,069
Contributions:
Participants' 167,957 -- 597,498
Employer's 32,788 -- 118,776
Rollover 779 -- 46,629
First Northwestern rollover 253,335 -- 283,231
----------- ----------- -----------
454,859 -- 1,046,134
----------- ----------- -----------
Total additions 528,792 319 1,637,203
Deductions from net assets attributed to:
Benefits paid to participants 192,059 -- 392,104
Administrative expenses 6,472 -- 22,246
----------- ----------- -----------
Total deductions 198,531 -- 414,350
Transfers - net (181,881) 5,703 --
----------- ----------- -----------
Net increase 148,380 6,022 1,222,853
Net assets available for plan benefits:
Beginning of year 1,073,515 3,758 3,257,548
----------- ----------- -----------
End of year $ 1,221,895 $ 9,780 $ 4,480,401
=========== =========== ===========
</TABLE>
14
<PAGE> 15
SUPPLEMENTARY INFORMATION
15
<PAGE> 16
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
(Plan #001, Employer Identification Number 74-1295535)
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1998
<TABLE>
<CAPTION>
Number of
Description shares Cost Fair Value
- ---------------------------------- --------- ---------- ----------
<S> <C> <C> <C>
*Smith Barney Shearson
Money Market -- $ 16,954 $ 16,954
*Smith Barney Shearson
Reserve Deposit Account 16,695 16,695 16,695
*Smith Barney Shearson Consulting
Group Capital Markets Fund
Large Capitalization Growth
Investments 73,034 1,113,584 1,649,105
*Smith Barney Shearson Consulting
Group Capital Markets Fund
Large Capitalization Value
Equity Investments 109,417 1,354,854 1,426,802
*Smith Barney Shearson Consulting
Group Capital Markets Fund
Small Capitalization Growth
Investments 50,906 810,032 857,763
*Smith Barney Shearson Consulting
Group Capital Markets Fund
Stable Value Investments 121,150 1,174,327 1,285,401
*Smith Barney Shearson Consulting
Group Capital Markets Fund
International Equity Investments 28,975 311,256 332,049
*Prime Bancshares, Inc. 11,630 191,307 200,618
Participant Notes Receivable
(interest rates range from 6% to 8.75%) -- 17,814 17,814
---------- ----------
$5,006,823 $5,803,201
========== ==========
</TABLE>
*Indicates party in interest.
16
<PAGE> 17
PRIME BANK EMPLOYEES' 401(k) PROFIT SHARING PLAN AND TRUST
(Plan #001, Employer Identification Number 74-1295535)
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
Year ended December 31, 1998
<TABLE>
<CAPTION>
Current
value of
asset on
Number of Purchase Selling transaction Gain/
transactions price price Cost date (loss)
------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Smith Barney Shearson
Consulting Group Capital
Markets Funds:
Large Capitalization Value
Equity Investments
Purchases 103 $ 612,723 $ -- $ 612,723 $ 612,723
Sales 81 -- 298,393 264,091 298,393 $ 34,302
International Equity
Investments
Purchases 81 133,622 -- 133,622 133,622
Sales 71 -- 116,811 115,147 116,811 1,664
Large Capitalization
Growth Investments
Purchases 84 459,757 -- 459,757 459,757
Sales 96 -- 244,009 179,740 244,009 64,269
Small Capitalization
Growth Investments
Purchases 87 299,031 -- 299,031 299,031
Sales 84 -- 180,463 185,558 180,463 (5,095)
Stable Value
Investments
Purchases 108 801,191 -- 801,191 801,191
Sales 127 -- 806,531 733,021 806,531 73,510
Smith Barney Shearson
Reserve Deposit Account
Money Market
Purchases 64 1,296,467 -- 1,296,467 1,296,467
Sales 65 -- 1,267,395 1,267,395 1,267,395 --
</TABLE>
17
<PAGE> 18
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Prime Bank Employees' 401(k) Profit Sharing Plan and Trust
Date: June 28, 1999 By: /s/ FREDRIC M. SAUNDERS
-----------------------
Fredric M. Saunders
Trustee
18
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
NO. EXHIBITS
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<S> <C>
23.1 Consent of Grant Thornton LLP
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated June 10, 1999, accompanying the
financial statements and schedules included in the Prime Bank Employees' 401(k)
Profit Sharing Plan and Trust's Form 11-K for the year ended December 31, 1998.
We hereby consent to the incorporation by reference of said report in the
Registration Statement of Prime Bancshares, Inc. on Form S-8 (File
No. 333-65141).
/s/ GRANT THORNTON LLP
Houston, Texas
June 10, 1999
