<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-K/A
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-8937
BancTEXAS GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1604965
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
8820 WESTHEIMER ROAD
P. O. BOX 630369
HOUSTON, TEXAS 77263-0369
(Address of principal executive offices) (Zip Code)
(713) 781-7171
(Registrant's telephone number, including area code)
<TABLE>
Securities registered pursuant to Section 12(b) of the Act:
<CAPTION>
Name of each exchange on
Title of class which registered
-------------- ----------------
<S> <C>
COMMON STOCK, $.01 PAR VALUE PER SHARE NEW YORK STOCK EXCHANGE
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
--------------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by
nonaffiliates of the registrant, based on the closing price of the
Common Stock on the New York Stock Exchange on March 13, 1995, was
$23,200,903. For purposes of this computation, officers, directors
and 5% beneficial owners of the registrant are deemed to be
affiliates. Such determination should not be deemed an admission
that such directors, officers or 5% beneficial owners are, in fact,
affiliates of the registrant.
As of March 13, 1995, 20,654,025 shares of the registrant's Common
Stock, $.01 par value and 37,500,000 shares of the registrant's
Class B Common Stock, $.01 par value, were outstanding.
Documents incorporated by reference: Portions of the Annual Report
to Stockholders for the year ended December 31, 1994 are
incorporated by reference into Parts I and II of this report.
===============================================================================
<PAGE> 2
BancTexas Group Inc. (the "Company" or "BancTEXAS") previously
filed its Annual Report on Form 10-K for the year ended December
31, 1994 and included in Part III thereof responses based upon the
expectation that a proxy statement for an annual meeting of
stockholders, then tentatively scheduled to occur on May 18, 1995,
would be filed on or before April 30, 1995. However, the date for
the annual meeting has not yet been set, and the Company is filing
this Form 10-K/A to amend Part III of the Form 10-K, in accordance
with General Instruction G.(3) to Form 10-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ACQUISITION OF CONTROL BY FIRST BANKS
On August 31, 1994, BancTEXAS completed a private placement
transaction in which First Banks, Inc., a bank holding company based
in Missouri ("First Banks"), acquired 37,500,000 shares of Class B
Common Stock for an aggregate purchase price of $30,000,000. First
Banks thereby acquired the power to vote approximately 65% of all
outstanding voting stock of the Company.
The transaction with First Banks was completed pursuant to the
terms of a Stock Purchase and Operating Agreement dated May 19,
1994 (the "Agreement") and following approval by the Company's
stockholders at the 1994 Annual Meeting of Stockholders, which was
held on August 18, 1994, and also following the receipt of
necessary regulatory approvals. Immediately following the
consummation of the transaction with First Banks, three directors
resigned from the Board of Directors of BancTEXAS, in accordance
with the terms of the Agreement, and Messrs. James F. Dierberg,
Allen H. Blake and Mark T. Turkcan were appointed to fill the
vacancies created by such resignations. Effective January 2, 1995
Nathan C. Collins, who had served since 1987 as Chairman of the
Board, President and Chief Executive Officer of the Company,
resigned from those positions and was succeeded by Mr. Dierberg.
The vacancy on the Board of Directors created by Mr. Collins'
resignation as a director has not yet been filled.
BOARD OF DIRECTORS
As of April 21, 1995 the Board of Directors consisted of five
members, who are identified in the table on the following page.
Each of the directors was elected or appointed to serve a one-year
term and until his successor has been duly qualified for office.
<PAGE> 3
<TABLE>
<CAPTION>
DIRECTOR OF PRINCIPAL OCCUPATION DURING LAST
BancTEXAS FIVE YEARS AND DIRECTORSHIPS
NAME AGE SINCE OF PUBLIC COMPANIES
---- --- ----- --------------------------------
<C> <C> <C> <S>
Allen H. Blake 52 1994 Chief Financial Officer since September, 1994
and Secretary of BancTEXAS since December, 1994;
Senior Vice President of First Banks since 1992;
Secretary and Director of First Banks since
1988; joined First Banks as Vice President and
Chief Financial Officer in 1984.
Charles A. Crocco, Jr. <F1> 56 1988 Partner in the law firm of Crocco & De Maio,
P.C., New York City since 1968; director of The
Hallwood Group Incorporated (merchant banking)
since January 1981; director of Showbiz Pizza
Time, Inc. since January 1988.
James F. Dierberg 57 1994 Chairman of the Board of Directors, Chief
Executive Officer and President of BancTEXAS
since January 2, 1995; Chairman of the Board and
Chief Executive Officer of First Banks since
1988; director of First Banks since 1979;
President of First Banks, 1979-1992 and May 1994-present.
Edward T. Story, Jr. <F1> 51 1987 President and Chief Executive Officer of SOCO
International, Inc., a subsidiary of Snyder Oil
Corporation, engaged in international oil and
gas operations, since August 1991; from August
1990 until August 1991, Chairman of Thaitex
Petroleum Company; from August 1981 to August
1990 Vice Chairman and Chief Financial Officer
of Conquest Exploration Company; director of
Hi-Lo Automotive, Inc. since 1987; director of
Territorial Resources, Inc. since 1992; director
of Command Petroleum Limited since 1993;
director of Holland Sea Search Holding N.V.
since 1993.
Mark T. Turkcan 39 1994 Senior Vice President (Retail Banking), First
Banks, since 1994; Vice President (Mortgage
Banking), First Banks since 1990; joined First
Banks when Clayton Savings and Loan Association,
St. Louis, Missouri (now First Bank A Savings
Bank) for whom Mr. Turkcan was employed in
various capacities since 1985, was acquired by
First Banks in 1990.
<FN>
- ------------------------
<F1> Member of the Audit Committee.
</TABLE>
-2-
<PAGE> 4
EXECUTIVE OFFICERS
<TABLE>
The executive officers of the Company as of April 21, 1995 were
as follows:
<CAPTION>
NAME AGE OFFICE(S) HELD
---- --- --------------
<C> <C> <S>
James F. Dierberg 57 Chairman of the Board, Chief Executive Officer and
President.
Allen H. Blake 52 Chief Financial Officer and Secretary.
David F. Weaver 47 Executive Vice President of BancTEXAS since January, 1995;
Chairman of the Board, Chief Executive Officer and President
of BankTEXAS N.A. since December, 1994; President of
BankTEXAS Houston N.A. from 1988 until the bank became a
part of BankTEXAS N.A. as a result of merger.
Jerry V. Garrett 54 Senior Vice President (Consumer Lending), BankTEXAS N.A.
since 1988.
</TABLE>
The executive officers were each elected by the Board of
Directors to the office indicated. There is no family relationship
between any of the nominees for director, directors or executive
officers of BancTEXAS or its subsidiaries.
ITEM 11. EXECUTIVE COMPENSATION
The table on the following page sets forth certain information
regarding compensation earned during the year ended December 31,
1994, and specified information with respect to the two preceding
years, by the chief executive officer, Mr. Collins, and two of the
other most highly compensated executive officers of BancTEXAS, as
determined based upon salary and bonus earned during 1994. Mr.
Collins resigned from his positions with BancTEXAS effective
January 2, 1995; Mr. Braucher resigned from his positions effective
November 30, 1994.
James F. Dierberg became the Chief Executive Officer and
President of the Company on January 2, 1995, and Allen H. Blake
became the Company's Chief Financial Officer on September 30, 1994,
and the Secretary on December 1, 1994. Neither Mr. Dierberg nor
Mr. Blake receives any compensation directly from either the
Company or the Bank. The Company and BankTEXAS N.A., its wholly-
owned indirect banking subsidiary (the "Bank"), have entered into
various contracts with First Banks, of which Messrs. Dierberg and
Blake are directors and executive officers, pursuant to which
services are provided to the Company and the Bank (see "ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" for additional
information regarding contracts with First Banks).
No information is included in the table with respect to other
executive officers whose combined salary and bonus did not exceed
$100,000 in any year covered by the table.
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<PAGE> 5
<TABLE>
SUMMARY COMPENSATION TABLE FOR YEAR ENDED DECEMBER 31, 1994
<CAPTION>
Long-Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------------------------------- ----------------------------------------------
Name and Year Salary Bonus Other Restricted Securities LTIP All Other
Principal ($) ($) Annual Stock Award(s) underlying Payouts Compensation
Position Compensation ($) Options/SARs ($) ($)<F2>
($)<F1> (#)
- -------------------------------------------------------------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nathan C. 1994 200,000 -0- N/A none none none 500,750
Collins
Chairman of 1993 250,000 -0- N/A none none none 899
the Board,
President & 1992 250,000 23,200 N/A none none none 1,000
Chief
Executive
Officer
David F. 1994 107,500 -0- N/A none none none 538
Weaver,
Executive 1993 107,500 -0- N/A none none none 840
Vice
President; 1992 107,500 10,750 N/A none none none 2,942
Chairman of
the Board,
Chief
Executive
Officer and
President of
BankTEXAS
N.A.
Richard H. 1994 91,800 -0- N/A none none none 91,800
Braucher,
Senior Vice 1993 91,800 -0- N/A none none none 459
President,
Secretary & 1992 91,800 9,180 N/A none none none -0-
General
Counsel
<FN>
<F1> The total of all other annual compensation for each of the named
officers is less than the amount required to be reported, which
is the lesser of (a) $50,000 or (b) ten percent (10%) of the
total of the annual salary and bonus paid to that person.
<F2> Except as indicated in Note <F3>, all items reported are
BancTEXAS' matching contributions to the 401(k) Plan for the year
indicated except that in 1992, the total for Mr. Weaver is
comprised of $1,592 as relocation assistance to cover mortgage
rate differential and $1,350 as BancTEXAS's contribution to the
401(k) Plan.
<F3> Mr. Collins received a severance payment in the amount of
$500,000 in January, 1995 resulting from the change in control of
BancTEXAS which occurred in 1994. Mr. Braucher received a
severance payment in the amount of $91,800, also resulting from
the change in control.
</TABLE>
STOCK OPTION EXERCISES AND VALUES
The table on the following page indicates the number of options,
if any, exercised by the named executive officers during the year
ended December 31, 1994 and the number and value of options held as of
December 31, 1994. BancTEXAS does not have any outstanding stock
appreciation rights.
-4-
<PAGE> 6
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END VALUES
<CAPTION>
Name Shares Acquired on Value Realized Number of Securities Value of Unexercised
Exercise (#) ($)<F1> Underlying Unexercised In-the-Money
Options at FY-End (#) Options at FY-End
($) <F2>
Exercisable/ Exercisable/
Unexercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nathan C. Collins 200,000 175,000.00 700,000 shares $437,500.00
exercisable
none - unexercisable
David F. Weaver -0- -0- 50,000 shares $ 31,250.00
exercisable
none - unexercisable
Richard H. Braucher -0- -0- 75,000 shares exercisable $ 46,875.00
none - unexercisable
<FN>
<F1> Value realized is before applicable taxes, based on the difference
between exercise prices and closing prices on the dates of exercise.
<F2> Value is based upon the difference between exercise prices and the
closing price of BancTEXAS Common Stock on December 30, 1994.
</TABLE>
BancTEXAS has omitted from this Report tables which would disclose
information regarding stock options granted during 1994 and Long Term
Incentive Plan awards. No options were granted in 1994, and BancTEXAS does
not currently have any Long Term Incentive Plan.
DIRECTOR COMPENSATION
During 1994, each director of BancTEXAS (excluding Mr. Collins, who
was not paid separately for his services as a director, and Messrs. Blake,
Dierberg and Turkcan, who do not receive any compensation from the Company)
was paid $5,000 as an annual retainer and $750 for each meeting of the
Board of Directors attended. In addition, the chairman of each committee
was paid an annual retainer of $2,000 and each member of a committee was
paid $500 for each committee meeting attended. Also, directors traveling
more than 75 miles to attend a meeting were reimbursed for their actual
travel expenses. The Company entered into a consulting agreement with
Edward T. Story, Jr. in 1990 whereby he is, when requested by the Chairman
of the Board, obligated to assist with certain capital formation projects.
Mr. Story did not receive any compensation under the consulting agreement
in 1994.
During the first eight months of 1994, each director of BancTEXAS also
served as director of BankTEXAS N.A., the company's wholly-owned banking
subsidiary (the "Bank"). With the exception of Mr. Collins, who was not
paid for his services as a director, each director of the Bank received an
annual retainer of $2,500 from the Bank and $250 for each Board meeting
attended. During the remainder of 1994, the Bank's Board of Directors
consisted of persons who were not also directors of BancTEXAS (except for
Mr. Collins, who continued to
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<PAGE> 7
serve as a director of the Company until January, 1995 and of the Bank
until November, 1994).
The 1993 Directors' Stock Bonus Plan (the "Stock Bonus Plan") provides
for annual grants of Common Stock to the non-employee directors of
BancTEXAS. Directors' compensation of $67,000 was recorded relating to
this plan for the year ended December 31, 1994. This amount represented
the market value of the 37,500 shares granted under the Stock Bonus Plan
as of the date of each grant.
The Stock Bonus Plan is self-operative, and the timing, amounts,
recipients and terms of individual grants are determined automatically.
On July 1 of each year, each non-employee director will automatically
receive a grant of 7,500 shares of Common Stock. Future grants under the
plan would apply equally to current directors and to any individual who
becomes a director of BancTEXAS in the future. The maximum number of plan
shares that may be issued shall not exceed 250,000 shares. The plan will
expire on July 1, 2001.
In 1993, BancTEXAS also adopted a noncontributory defined benefit
pension plan (the "Directors' Retirement Plan") covering non-employee
directors of the holding company. Under this plan, retirement benefits are
primarily a function of years of service as a director. During 1994,
coverage under the Directors' Retirement Plan was extended to include non-
employee directors of the Bank. BancTEXAS recorded an expense of $65,000
to reflect the costs accrued in 1994 in connection with this plan.
As noted above, the three directors who are also executive officers
of First Banks (Messrs. Blake, Dierberg and Turkcan) do not receive any
compensation for serving as directors (and, in the case of Messrs. Blake
and Dierberg, as executive officers) of BancTEXAS, and, in that regard,
they do not receive any benefits under the Stock Bonus Plan or the
Directors' Retirement Plan discussed above. First Banks, of which Messrs.
Dierberg, Blake and Turkcan are executive officers and Messrs. Dierberg and
Blake are directors, provides various services to BancTEXAS and the Bank
for which it is compensated, and a subsidiary of First Banks purchased
certain mortgage-backed securities from BancTEXAS in 1994 (see "ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS").
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Until September 1994, the Board of Directors had a Compensation
Committee composed of two Directors. The Board of Directors eliminated the
Compensation Committee and the entire Board now performs responsibilities
formerly assigned to that committee. Messrs. Dierberg and Blake are the
only officers of BancTEXAS or its subsidiaries who participate as members
of the Board of Directors in deliberations regarding executive officer
compensation. As noted above, they do not receive any compensation from
BancTEXAS for their services as officers and directors. First Banks, of
which Messrs. Dierberg, Blake and Turkcan are executive officers and
Messrs. Dierberg and Blake are directors, provides various services to
BancTEXAS and the Bank for which it is compensated, and a subsidiary of
First Banks purchased certain mortgage-backed securities from BancTEXAS in
1994 (see "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS").
-6-
<PAGE> 8
EMPLOYMENT AGREEMENTS
Mr. Weaver is party to an employment agreement whereby he would be
entitled to receive additional compensation in the event that, prior to
August 31, 1995, he is terminated or he resigns after determining in good
faith that a significant reduction or other adverse change has occurred in
the nature or scope of his responsibilities, authorities or compensation.
In such event, Mr. Weaver would receive a severance payment equal to one
year's salary. The agreement is substantially similar to employment
agreements between BancTEXAS and other management personnel which were
first implemented in 1989 and extended through December 31, 1994.
EMPLOYEE BENEFIT PLANS
BancTEXAS maintains various employee benefit plans. Directors are not
eligible to participate in such plans except the 1990 Stock Option Plan and
the 1993 Directors' Stock Bonus Plan unless they are also employees of
BancTEXAS or one of its subsidiaries. Although Messrs. Blake and Dierberg
are executive officers, they are not participants in any employee benefit
plans of BancTEXAS.
Pension Plan. The BancTEXAS Group Inc. and Subsidiaries' Employees
Retirement Plan (the "Pension Plan") is a noncontributory, defined benefit
plan for all eligible officers and employees of BancTEXAS and its
subsidiaries. Benefits under the Pension Plan are based upon annual base
salaries and years of service and are payable only upon retirement or
disability and, in some instances, at death. An employee is eligible to
participate in the Pension Plan after completing one year of employment if
he or she was hired before attaining age 60, is at least 21 years of age
and worked 1,000 hours or more in the first year of employment. A
participant who has fulfilled the eligibility and tenure requirements will
receive, upon reaching the normal retirement age of 65, monthly benefits
based upon average monthly compensation during the five consecutive
calendar years out of his or her last ten calendar years that provided the
highest average compensation.
During 1994, BancTEXAS discontinued the accumulation of benefits under
the Pension Plan. While the Pension Plan will continue in existence and
provide benefits which have been accumulated, no additional benefits will
accrue to participants, and no new participants will become eligible for
benefits thereunder.
<TABLE>
The following table sets forth, based upon certain assumptions, the
approximate annual benefits payable under the Pension Plan at normal
retirement age to persons retiring with the indicated average base salaries
and years of credited service:
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<PAGE> 9
<CAPTION>
REMUNERATION <F1> YEARS OF CREDITED SERVICE <F2>
- ----------------- ------------------------------
10 15 20 25 30 35
<S> <C> <C> <C> <C> <C> <C>
$100,000 $14,700 $22,050 $29,400 [No additional credit after
$150,000 $22,200 $33,300 $44,400 20 years]
<FN>
- ------------------------
<F1> Compensation covered by the Pension Plan is equal to the salary
shown in the Summary Compensation Table for each of the executive
officers shown, except that Mr. Collins' compensation covered by
the Pension Plan is limited to $150,000.00 (see footnote (3)).
<F2> Benefits shown are computed based on straight life annuities with a
10-year guarantee and are not subject to deduction for social
security, but are subject to withholding for federal income tax
purposes.
<F3> Maximum annual retirement income of $118,800 is permitted under the
Internal Revenue Code, as amended; the maximum compensation allowed
for retirement benefit computations is $150,000.
</TABLE>
<TABLE>
The amounts of current annual covered compensation and the credited
years of service under the Pension Plan at December 31, 1994, for each
of the executive officers of BancTEXAS named in the Summary Compensation
Table are as follows:
<CAPTION>
1994
COMPENSATION CREDITED YEARS
COVERED BY THE OF SERVICE AT
NAME OF INDIVIDUAL PENSION PLAN DECEMBER 31, 1994
- ------------------ ----------------- ---------------------
<S> <C> <C>
Nathan C. Collins $150,000 7
David F. Weaver 107,500 7
Richard H. Braucher 91,800 16
</TABLE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
The following table sets forth, as of April 21, 1995,
certain information with respect to the beneficial ownership of
Common Stock and Class B Common Stock by each person known to the
Company to be the beneficial owner of more than five percent of
the outstanding shares of either class of stock, by each
director, by certain executive officers and by all executive
officers and directors of BancTEXAS as a group:
-8-
<PAGE> 10
<CAPTION>
NUMBER OF
SHARES
AND NATURE
NAME OF OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER RELATIONSHIP TO THE COMPANY OWNERSHIP <F1> CLASS
- ---------------- --------------------------- -------------- ----------
<C> <S> <C> <C>
First Banks, Inc. 5% Stockholder 37,500,000 <F2> 100
135 North Meramec
Clayton, Missouri
63105
Allen H. Blake Director, Chief Financial -0- <F*>
Officer and Secretary
Charles A. Crocco, Jr. Director 116,600 <F3> <F*>
James F. Dierberg Chairman of the Board 37,500,000 <F2> 100
of Directors, Chief
Executive Officer and
President
Jerry V. Garrett Senior Vice President 46,000 <F4> <F*>
(Consumer Lending),
BankTEXAS N.A.
Edward T. Story, Jr. Director 115,250 <F5> <F*>
Mark T. Turkcan Director -0- <F*>
David F. Weaver Executive Vice President, 100,400 <F6> <F*>
BancTEXAS; Chairman of
the Board, Chief Executive
Officer and President,
BankTEXAS N.A.
All executive officers 378,250 Common 1.8% of
and directors as a Stock Common
group (7 persons) Stock
37,500,000 Class B 100% of Class
Common Stock B Common
Stock
<FN>
- --------------------------
<F*> Less than one percent.
<F1> Shares shown for First Banks and James F. Dierberg comprise
100% of the outstanding shares of Class B Common Stock; for
all other persons listed, the shares and percentages
reflected are Common Stock. With respect to Messrs. Crocco,
Garrett, Story and Weaver, the indicated numbers of shares
include shares subject to vested stock options granted under
the 1990 Stock Option Plan. All of the options reflected in
the table are vested and may be exercised at any time.
<F2> The controlling shareholders of First Banks are (i) Mary W.
Dierberg and James F. Dierberg, II, trustees under the
living trust of James F. Dierberg, II, dated July 24, 1989,
(ii) Mary W. Dierberg and Michael James Dierberg, trustees
-9-
<PAGE> 11
under the living trust of Michael James Dierberg, dated July
24, 1989, (iii) Mary W. Dierberg and Ellen C. Dierberg,
trustees under the living trust of Ellen C. Dierberg, dated
July 17, 1992, and (iv) James F. Dierberg, trustee of the
James F. Dierberg living trust, dated October 8, 1985. Mr.
James F. Dierberg and Mrs. Mary W. Dierberg are husband and
wife, and Messrs. James F. Dierberg, II, Michael James
Dierberg and Miss Ellen C. Dierberg are their children.
<F3> Mr. Crocco has a vested option covering 100,000 shares; he
owns directly 16,600 shares.
<F4> Mr. Garrett has a vested option covering 45,000 shares and
owns directly 1,000 shares.
<F5> Mr. Story has a vested option covering 100,000 shares; he
owns directly 15,250 shares.
<F6> Mr. Weaver has a vested option covering 75,000 shares; he
owns directly 25,400 shares.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Bank had in 1994, and it may have in the future, loan
transactions in the ordinary course of business with directors of
BancTEXAS and their respective affiliates. These loan
transactions have been and will be on the same terms, including
interest rates and collateral, as those prevailing at the time
for comparable transactions with unaffiliated persons and did not
involve more than the normal risk of collectibility or present
other unfavorable features. At December 31, 1994, such loans
totalled $42,216 and represented .11% of stockholders' equity.
None of the indebtedness has been classified in any manner by
regulatory authorities or charged-off by the Bank. The Bank does
not extend credit to officers of BancTEXAS or of the Bank, except
extensions of credit secured by mortgages on personal residences,
loans to purchase automobiles and personal credit card accounts.
As discussed under "ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT," First Banks became the largest stockholder of
BancTEXAS in August, 1994. Following that transaction, BancTEXAS
began purchasing certain services and supplies from or through
First Banks. During the remaining four months of 1994 this was
primarily limited to the purchase of insurance policies, office
supplies and other commonly-used banking products which could be
acquired more economically than BancTEXAS had previously been able
to realize as a separate company. The amounts of these purchases
were not material to the consolidated financial position or results
of operations of BancTEXAS for the year ended December 31, 1994.
In December 1994, the Board of Directors of the Bank approved
a data processing agreement and a management fee agreement with
First Banks. Under the data processing agreement, a subsidiary of
First Banks began providing data processing and various related
services to BancTEXAS in February 1995. The fees for such services
are significantly lower than BancTEXAS has previously paid a non-
affiliated vendor. The management fee agreement provides that
BancTEXAS will compensate First Banks on an hourly basis for its
use of personnel for various functions including internal auditing,
loan review, income tax preparation and assistance, accounting,
asset/liability and investments services, loan servicing and other
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<PAGE> 12
management and administrative services. Hourly rates for such
services compare favorably with those for similar services from
unrelated sources, as well as the internal costs of BancTEXAS
personnel which were used previously, and BancTEXAS estimates that
the aggregate cost for the services will be significantly more
economical than those previously incurred by BancTEXAS. Total fees
paid under these agreements were $14,000 in 1994.
In September 1994, BancTEXAS sold mortgage-backed securities
with an original aggregate cost of $113,852,000, in connection with
a review by management of the nature of the Company's investment
securities portfolio. Of that amount, $60,091,000, which had been
acquired by BancTEXAS from October 1990 through April 1994, were
sold to a subsidiary of First Banks for an aggregate price of
$55,273,000. The prices at which the securities were sold by
BancTEXAS to a subsidiary of First Banks were agreed upon by
personnel of BancTEXAS and First Banks based upon market quotations
for such securities by unrelated third party securities firms.
Certain of the directors and officers of BancTEXAS and their
respective affiliates have deposit accounts with the Bank. It is
the Bank's policy not to permit any officers or directors of
BancTEXAS or their affiliates to overdraw their respective deposit
accounts unless that person has been previously approved for
overdraft protection under a plan whereby a credit limit has been
established in accordance with the Bank's standard credit criteria.
During 1994 the Bank engaged in a series of repurchase
transactions with Edward T. Story, Jr., a director of BancTEXAS
and, until September 1994, of the Bank. These transactions are
short-term in nature and involve the deposit with the Bank of U.S.
government securities, subject to agreements to repurchase. The
principal amounts of the repurchase transactions have varied and
the largest principal amount of any transaction in 1994 was
$189,402.46. All of the transactions with Mr. Story have been at
market interest rates and, in the opinion of management, have been
on terms as favorable to the Bank as are available in transactions
with unaffiliated persons.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized.
BancTEXAS GROUP INC.
(Registrant)
By: /s/ Allen H. Blake
--------------------------------
Chief Financial Officer
Date: April 28, 1995
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