UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended: December 31, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period from to
Commission File Number: 0-10196
INDEPENDENT BANKSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
Texas 75-1717279
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
547 Chestnut Street
Abilene, Texas 79602
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (915) 677-5550
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
___________________________________________ ________________________
Common Stock, $0.25 Par Value American Stock Exchange
8.5% Cumuative Trust Preferred Securites American Stock Exchange
Guaranteed by Independent Bankshares, Inc.
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 the 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 market value of such stock on March 18,
1999, was $18,130,000. For purposes of this computation, all executive
officers, directors and 5% beneficial owners of the Registrant are deemed
to be affiliates. Such determination should not be deemed an admission
that such executive officers, directors and beneficial owners are, in fact,
affiliates of the Registrant. At March 18, 1999, 2,228,780 shares of the
Registrant's common stock, $0.25 par value per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference into the
indicated part or parts of this report:
(1) Annual Report to Shareholders for the fiscal year ended December 31,
1998, furnished to the Commission pursuant to Rule 14a-3(b) - Part II
and Part IV.
(2) Definitive proxy statement filed with the Commission pursuant to
Regulation 14A in connection with the Annual Meeting of Shareholders
held April 27, 1999 - Part III.
_____________________________________________________________________________
<PAGE>
Pursuant to Rule 15d-21 under the Securities Exchange Act of 1934, the
undersigned registrant ("Registrant") hereby amends its annual report on Form
10-K for the fiscal year ended December 31, 1998 to include the following
information, financial statements, and exhibits required by Form 10-K/A with
respect to the Independent Bankshares, Inc. Employee Stock Ownership/401(k) Plan
("Plan") for the year ended December 31, 1998. Independent Bankshares, Inc. is
the issuer of the securities held pursuant to the Plan. The schedules called for
under Article 6A-05 in Regulation S-X have been omitted because they are
inapplicable or the required information has been given in the financial
statements or notes thereto:
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP /
401(k) PLAN
FINANCIAL STATEMENTS AND AUDITORS' REPORT
CONTENTS
--------
December 31, 1998 and 1997
Page
----
FINANCIAL STATEMENTS:
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits
with Fund Information 2
Statements of Changes in Net Assets Available for
Benefits with Fund Information 4
Notes to Financial Statements 6
SUPPLEMENTARY INFORMATION:
Independent Auditors' Report on Supplementary Information 12
Schedule of Assets Held for Investment Purposes 13
Schedule of Reportable Transactions 14
<PAGE>
March 23, 1999
To the Employee Stock Ownership / 401(k) Plan Committee of
Independent Bankshares, Inc.
Abilene, Texas
Independent Auditors' Report
----------------------------
We have audited the accompanying statements of net assets
available for benefits with fund information of the
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K)
PLAN as of December 31, 1998 and 1997, and the related
statements of changes in net assets available for benefits
with fund information 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
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits with fund information of the
Independent Bankshares, Inc. Employee Stock Ownership / 401(k)
Plan as of December 31, 1998 and 1997, and the changes in net
assets available for benefits with fund information for the years
then ended in conformity with generally accepted accounting principles.
/s/ CONDLEY AND COMPANY, L.L.P.
Certified Public Accountants
-1-
<PAGE>
INDEPENDENT BANKSHARES, INC., EMPLOYEE STOCK OWNERSHIP 401(K) PLAN
Abilene, Texas
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------------------------------
Federated
Federated Federated Federated Managed Trust for Independent
Managed Managed Growth Managed Aggressive U.S. Treasury Bankshares, Inc.
Income Fund & Income Fund Growth Fund Growth Fund Obligations Common Stock
----------- -------------- ----------- ----------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
------
Cash $ $ $ $ $ $
Contributions receivable
Participant loans
Investments,at fair value
Federated Managed Income Fund 10,031
Federated Managed Growth &
Income Fund 45,569
Federated Managed Growth Fund 20,820
Federated Managed Aggressive
Growth Fund 41,038
Trust for U.S. Treasury Obligations 34,966
Independent Bankshares, Inc.
Common Stock 166,992
Accrued income
----------- -------------- ----------- ----------- -------------- ----------------
TOTAL ASSETS $ 10,031 $ 45,569 $ 20,820 $ 41,038 $ 34,966 $ 166,992
=========== ============== =========== =========== ============== ================
LIABILITIES
-----------
Benefit claims payable $ $ $ $ $ 2,357 $ 1,110
Accrued liabilities
Notes payable
----------- -------------- ----------- ----------- -------------- ----------------
NET ASSETS (DEFICIT) AVAILABLE FOR
PLAN BENEFITS $ 10,031 $ 45,569 $ 20,820 $ 41,038 $ 32,609 $ 165,882
=========== ============== =========== =========== ============== ================
</TABLE>
The accompanying notes are an integral part of the financial statement
-2-
<PAGE>
<TABLE>
<CAPTION>
Non-Participant Directed December 31,
- --------------------------------------------------------------------- ------------------------
Independent Bankshares, Inc., Common Stock
Participant ------------------------------------------
Loans Other Allocated Unallocated 1998 1997
- ------------------ ----------- -------------- ---------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ $ 8,854 $ 4,232 $ $ 13,086 $ 41,508
(305) (305) 4,614
63,390 63,390 56,252
10,031 9,011
45,569 36,533
20,820 21,564
41,038 25,447
34,966 23,863
1,445,646 193,541 1,806,179 3,035,793
300 300 285
- ------------------ ---------- ------------- --------------- ---------- -----------
$ 63,390 $ 8,849 $ 1,449,878 $ 193,541 $2,035,074 $ 3,254,870
================== ========== ============= =============== ========== ===========
$ $ $ $ $ 3,467 $ 0
5,341 5,341 5,366
234,166 234,166 193,832
- ------------------ ---------- ------------- --------------- ---------- ------------
$ 63,390 $ 3,508 $ 1,449,878 $ (40,625) $1,792,100 $ 3,055,672
================== ========== ============= =============== ========== ============
</TABLE>
The accompanying notes are an integral part of the financial statement
-3-
<PAGE>
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
Abilene, Texas
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
<TABLE>
<CAPTION>
Participant Directed
----------------------------------------------------------------------------------------------
Federated Federated Federated Federated Trust for Independent
Managed Managed Growth Managed Managed Aggressive U.S. Treasury Bankshares, Inc.
Income Fund & Income Fund Growth Fund Growth Fund Obligations Common Stock
------------ -------------- ----------- ------------------ ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Net unrealized appreciation
(depreciation) in fair
value of investments $ 117 $ 1,770 $ 872 $ 2,349 $ $ (93,164)
Dividend income 5,473
Interest income 1,065 5,232 3,388 4,164 3,725
Gain on sale of investments 44 568 626 263 (5,190)
----------- ------------- ----------- ------------------ ------------- ----------------
Total Investment Income 1,226 7,570 4,886 6,776 3,725 (92,881)
Plan transfers (2,357) (3,869) (7,016) (175) (9,295) 13,927
Employer contributions
Employee contributions 2,543 10,111 6,020 12,627 19,454 32,621
Allocation of 4306.021 shares
of ISBI Common Stock,
at market
----------- ------------- ----------- ------------------ ------------- ----------------
Total Additions 1,412 13,812 3,890 19,228 13,884 (46,333)
----------- ------------- ----------- ------------------ ------------- ----------------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Distributions to participants 392 4,776 4,634 3,636 5,218 3,475
Allocation of 4306.021 shares
of ISBI Common Stock, at market
Interest expense
Administrative expenses (80)
----------- ------------ ----------- ------------------ ------------- ----------------
Total Deductions 392 4,776 4,634 3,636 5,138 3,475
INCREASE (DECREASE) IN NET ASSETS
AVAILABLE FOR BENEFITS 1,020 9,036 (744) 15,592 8,746 (49,808)
Net Assets Available For Benefits:
Beginning of Year 9,011 36,533 21,564 25,446 23,863 215,690
----------- ------------ ----------- ------------------ ------------- ----------------
End of Year $ 10,031 $ 45,569 $ 20,820 $ 41,038 $ 32,609 $ 165,882
=========== ============ =========== ================== ============= ================
</TABLE>
The accompanying notes are an integral part of the financial statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
Non-Participant Directed December 31,
- -------------------------------------------------------------------- -------------------------
Independent Bankshares, Inc. Common Stock
Participant -----------------------------------------
Loans Other Allocated Unallocated 1998 1997
----------- --------- ----------------- --------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ $ $ (1,018,817) $ (147,288) $(1,254,162) $ 1,093,948
25,695 4,376 35,544 29,601
15 17,589 9,038
(1,919) (2,644) (8,251) 1,236
----------- ---------- ----------------- --------------- ----------- -----------
0 15 (995,041) (145,556) (1,209,280) 1,133,823
7,138 1,647 (54,183) 54,183 0 0
(1,511) 106,681 105,170 99,690
(2,953) 80,423 71,372
54,187 54,187
----------- ---------- ----------------- ---------------- ----------- -----------
7,138 (2,802) (888,356) (91,373) (969,500) 1,304,885
----------- ---------- ----------------- ---------------- ----------- -----------
166,395 188,526 170,952
54,187 54,187
22,822 22,822 18,370
(26) 28,643 28,537 27,223
---------- ---------- ----------------- ---------------- ----------- -----------
0 (26) 195,038 77,009 294,072 216,545
7,138 (2,776) (1,083,394) (168,382) (1,263,572) 1,088,340
56,252 6,284 2,533,272 127,757 3,055,672 1,967,332
---------- ---------- -------------- ---------------- ---------- -----------
$ 63,390 $ 3,508 $ 1,449,878 $ (40,625) $ 1,792,100 $ 3,055,672
========== ========== ============== ================ =========== ===========
</TABLE>
-5-
<PAGE>
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
NOTE 1: DESCRIPTION OF PLAN
Independent Bankshares, Inc. (the "Company") established the
Independent Bankshares, Inc. Employee Stock Ownership Plan
(the "Plan") effective January 1, 1987. The Plan is an
employee stock ownership plan, and is designed to
comply with Section 4975 (e)(7) and the regulations
thereunder of the Internal Revenue Code of 1986, as
amended (the "Code"), and is subject to the applicable
provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). The Plan is administered by
Independent Bankshares, Inc. Employers participating in
the Plan during the year are Independent Bankshares, Inc.
and its wholly owned subsidiary First State Bank, N.A.,
Abilene, Texas. First State Bank, N.A., Abilene is the
Plan's trustee. The Company's wholly owned subsidiary, Azle
State Bank, Azle, Texas, did not participate in the Plan
during 1998.
The Plan was amended in 1993 to add a 401(k) provision. This
allows plan participants to make salary deferrals which are
credited to each participant's account. The Plan name was
changed to the Independent Bankshares, Inc. Employee Stock
Ownership / 401(k) Plan.
During 1997, the Plan purchased additional shares of Company Common
Stock using the proceeds of a bank borrowing guaranteed by
the Company, and holds the stock in a trust established
under the Plan. The borrowing is to be repaid by fully
deductible Company contributions to the trust fund. As
the Plan makes each payment of principal, an appropriate
percentage of stock will be allocated to eligible
employees' accounts in accordance with applicable
regulations under the Code. Shares vest fully upon
allocation. The borrowing is collateralized by the
unallocated shares of stock and is guaranteed by the
Company. The lender has no rights against shares once
they are allocated under the Plan. Accordingly, the
financial statements of the Plan for the year 1998
presents separately the assets and liabilities and changes
therein pertaining to:
(a) the accounts of employees with vested rights in allocated stock
(Allocated) and
(b) stock not yet allocated to employees (Unallocated).
The more significant aspects of the Plan are summarized below:
Eligibility to Participate
--------------------------
An employee becomes a participant on the January 1 or July 1
coincident with or immediately following the later of the
date on which he or she completes one year of service
(1,000 hours), and attains age 21.
Employer's Contributions
------------------------
The Company, at its discretion, annually will determine the amount
of its contribution, if any, to the Plan. The Company may
make its contribution to the Plan in cash or in the
Company's Common Stock or such property that is acceptable
to the trustee. For each plan year the Company and its
subsidiaries contribute to the Plan, the allocation of the
contribution will be based upon a participant's
proportionate share of the total compensation paid during
that plan year to all participants in the Plan. The
Company may also, at its discretion, make a matching
contribution of up to 5% of eligible participants' yearly
compensation.
-6-
<PAGE>
Employee Contributions
----------------------
The Plan permits (but does not require) employees to make voluntary
contributions or salary deferrals up to the maximum amount
allowable by law.
Vesting
-------
An employee's interest in the contributions by the Company and its
subsidiaries to the Plan for the employee's benefit
becomes 100% vested (nonforfeitable) upon the employee
attaining age 65, or if the employee terminates employment
because of death or disability. If an employee terminates
employment prior to normal retirement age for any reason
other than death or disability, then the employee's
interest in the contributions by the Company and its
subsidiaries to the Plan for the employee's benefit
becomes vested in accordance with the following schedule:
Years of Service Nonforfeitable
With the Employer Accrued Benefit
----------------------- -----------------------
Less than 2 None
2 10%
3 20%
4 40%
5 60%
6 80%
7 100%
Forfeitures
-----------
The Plan provides two methods of vesting forfeitures. The primary
method of vesting forfeitures is the "forfeiture break in
service" rule. The secondary method of forfeiture is the
"cash out" rule. Termination of employment alone will not
result in a forfeiture under the Plan unless an employee
does not return to employment with the Company before
incurring a "forfeiture break in service" (a period of 5
consecutive plan years). The cash out rule becomes
operative if an employee terminates employment and
receives a total distribution of the vested portion of his
or her account balance.
Distributions
-------------
Distributions after an employee attains age 65 will be paid as soon
thereafter as is practical.
If an employee dies prior to receiving all of his or her benefits
under the Plan, the trustee will pay the balance of their
account to their beneficiary.
If an employee becomes disabled, the trustee will pay his or her
account balance as if he or she had retired.
If an employee terminates employment prior to attaining normal
retirement age, the trustee will distribute the employee's
vested interest in lump sum or in equal installments over
a fixed period of time. The Employee Stock Ownership /
401(k) Plan Committee will direct the trustee to
distribute the employee's vested interest in the Plan at
any time prior to the close of the plan year in which the
employee separates from service, postpone distribution
until after the plan year in which the employee separates
from service, or postpone distribution until the employee
attains age 65.
-7-
<PAGE>
Plan Termination
----------------
The Company reserves the right to terminate the Plan at any time,
subject to Plan provisions. Upon such termination of the
Plan, the interest of each participant will be distributed
to such participant or his or her beneficiary at the time
prescribed by the Plan terms and the Code.
Tax Status
----------
The Internal Revenue Service has determined and informed the Company
by a letter dated June 28, 1995, that the Plan is
qualified and tax-exempt under the appropriate sections of
the Code.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment Valuation and Income Recognition
-------------------------------------------
The shares of Common Stock of the Company are valued at fair value
on December 31 of each year. Fair values at December 31,
1998 and 1997, were determined by using the closing sales
prices for the last market transaction on or prior to
those dates according to the American Stock Exchange.
Mutual funds owned by the Company are valued at fair value on
December 31 of each year. Fair value is determined by the
fair value on December 31 as published in the Wall Street
Journal.
Dividend income is accrued on the ex-dividend date.
Purchases and sales of securities are recorded on a trade-date
basis. Realized gains and losses from security
transactions are reported on the specific identification
method.
Contributions
-------------
Contributions are recognized in the year in which they are declared
and not received.
NOTE 3: ADMINISTRATION OF PLAN ASSETS
The Plan's assets, which consist principally of the Company's Common
Stock and mutual funds, are held by the trustee of the
Plan.
Contributions are held and managed by the trustee under the
direction of the Employee Stock Ownership / 401(k) Plan
Committee. The trustee invests contributions received,
interest, and dividend income and makes distributions to
participants.
Certain administrative functions are performed by officers or
employees of the Company or its subsidiaries. No such
officer or employee receives compensation from the Plan.
NOTE 4: INVESTMENTS
The Plan's investments, at December 31, are presented in the
following table:
1998
-----------------------------------
Number of
Shares Held Cost Fair Value
------------ -------- ----------
Participant Directed:
Federated Managed Income
Fund 919.4625 $ 9,677 $ 10,031
Federated Managed Growth
& Income Fund 3,848.7479 42,446 45,569
Federated Managed Growth
Fund 1,616.425 19,190 20,820
-8-
<PAGE>
Federated Managed Aggressive
Growth Fund 2,941.820 37,067 41,038
Trust for U.S. Treasury
Obligations 34,966.4 34,966 34,966
Independent Bankshares, Inc.
Common Stock 14,521 163,720 166,992
Non Participant Directed:
Independent Bankshares, Inc.
Common Stock:
Allocated 125,708 380,960 1,445,646
Unallocated 16,830 51,002 193,541
-------- ----------
Total $739,028 $1,958,603
======== ==========
1997
-----------------------------------
Number of
Shares Held Cost Fair Value
------------ -------- ----------
Participant Directed:
Federated Managed Income
Fund 839.7655 $ 8,688 $ 9,011
Federated Managed Growth &
Income Fund 3,210.2689 34,890 36,533
Federated Managed Growth
Fund 1,768.955 20,162 21,564
Federated Managed Aggressive
Growth Fund 1,974.148 23,563 25,447
Trust for U.S. Treasury
Obligations 23,863.22 23,863 23,863
Independent Bankshares, Inc.
Common Stock 10,923 110,899 215,047
Non-Participant Directed:
Independent Bankshares, Inc.
Common Stock:
Allocated 126,966 394,306 2,499,636
Unallocated 16,310 50,654 321,110
-------- ----------
Total $667,025 $3,152,211
======== ==========
NOTE 5: NOTES RECEIVABLE
Notes receivable from participants as of December 31, consist of the
following:
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Albert Jordan, originated December 16, 1998, at $20,000 with
monthly payments of $405, including interest at 7.75% $ 20,000 $ 0
Luther Snell, originated November 15, 1997 at $13,000 with
monthly payments of $270, including interest at 8.5% 10,585 12,821
Luther Snell, originated January 10, 1997, at $15,000 with
monthly payments of $306, including interest at 8.25% 9,883 12,668
-9-
<PAGE>
1998 1997
---------- ----------
Luther Snell, originated December 3, 1998, at $8,000 with
monthly payments of $165, including interest at 7.75% $ 8,000 $ 0
Randal Crosswhite, originated January 17, 1997, at $10,439
with monthly payments of $212, including interest at 8.25% 6,734 8,633
Carolyn Marshall, originated November 5, 1996, at $3,850 with
monthly payments of $100, including interest at 8.75% 1,885 2,872
Karen Timmons, originated November 12, 1998, at $1,700 with
monthly payments of $63, including interest at 8% 1,650 0
Joel Velasquez, originated August 18, 1997, at $2,322 with
monthly payments of $65, including interest at 8.25% 1,503 2,126
Mary Ann Martin, originating April 17, 1998, at $1,500 with
monthly payments of $48, including interest at 8.5% 1,197 0
Sandra Fowler, originated January 7, 1998, at $1,500 with
monthly payments of $70, including interest at 8.5% 826 0
Karen Timmons, originated November 15, 1997, at $1,387 with
monthly payments of $65, including interest at 8.5% 698 1,332
Albert Jordan, originated December 16, 1997, at $15,800 with
monthly payments of $500, including interest at 8.5% 429 15,800
-------- --------
Total $ 63,390 $ 56,252
======== ========
</TABLE>
NOTE 6: NOTES PAYABLE
During January 1997, the Plan established a note payable to
the Company in the original amount of $213,750,
the proceeds of which were used to purchase Common
Stock of the Company in a public stock offering.
Monthly payments are $3,480 including interest at
the Company's floating prime interest rate plus 1%
(8.75% at December 31, 1998). The loan is
scheduled to mature in January, 2004. The balance
at December 31, 1998, was $169,162.
The Plan also has a $65,000 revolving line of credit with
the Company, of which the entire amount was used
at December 31, 1998. The balance is payable on
June 30, 1999, with interest at the Company's
floating prime interest rate plus 1%.
The following is a five-year maturity schedule of the note
payable:
1999 $ 26,837
2000 29,499
2001 32,428
2002 35,647
2003 39,185
Subsequent 5,566
------------
Total $ 169,162
============
-10-
<PAGE>
NOTE 7: RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets
available for benefits according to the financial
statements to Form 5500 at December 31, 1998:
Net assets available for benefits
per the financial statements $ 1,792,100
Net accrued income and expenses
per the financial statements $ 5,041
------------
Net assets available for benefits
per Form 5500 $ 1,797,141
============
The following is a reconciliation of the decrease
in net assets available for plan benefits per the
financial statements to Form 5500 for the year
December 31, 1998:
Decrease in net assets available
for benefits per the financial
statements $ (1,263,572)
Net accrued income and expenses
for 1998 5,041
Net accrued income and expenses
for 1997 (616)
------------
Decrease in net assets available
for benefits per Form 5500 $ (1,259,147)
============
-11-
<PAGE>
SUPPLEMENTARY INFORMATION
<PAGE>
March 23, 1999
To the Employee Stock Ownership / 401(k) Plan Committee of
Independent Bankshares, Inc.
Abilene, Texas
Independent Auditors' Report on Supplementary Information
----------------------------------------------------------
Our audit was conducted for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The supplemental schedules of assets held for investment and
reportable transactions are presented for the purpose of
additional analysis and are not a required part of the basic
financial statements but are supplementary information
required by the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. The supplemental schedules have
been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ CONDLEY AND COMPANY, L.L.P.
Certified Public Accountants
-12-
<PAGE>
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNDERSHIP / 401(K) PLAN
EIN 75-1717279
Plan No. 003
------------
Plan Year Ended December 31, 1998
Item 30a - Schedule of Assets Held for Investment Purposes
a b c d
- - - -
Description of
Investment
Including Maturity
Date, Rate
Identity of Issuer, of Investment,
Borrower, Lessor, or Collateral, Par or Current
Similar Party Maturity Value Cost Value
--------------------- ---------------------- -------- --------
Federated Managed
Income Fund 919.4625 fund units $ 9,677 $ 10,031
Federated Managed
Growth & Income Fund 3,848.7479 fund units 42,446 45,569
Federated Managed
Growth Fund 1,616.425 fund units 19,190 20,820
Federated Managed
Aggressive Growth Fund 2,941.820 fund units 37,067 41,038
Trust for U.S. Treasury
Obligation 34,966.4 fund units 34,966 34,966
Independent Bankshares,
Inc. 157,059 shares of $0.25
par value Common Stock 595,681 1,806,179
-13-
<PAGE>
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNDERSHIP / 401(K) PLAN
EIN 75-1717279
Plan No. 003
------------
Plan Year Ended December 31, 1998
Item 30d - Schedule of Reportable Transactions
<TABLE>
<CAPTION>
a b c d e f g h i
- - - - - - - - -
Description of Current
Asset (Include Expense Value of
Identity Interest Rate Incurred Asset on
of Party and Maturity in Purchase Selling Lease With Cost of Transaction Net Gain
Involved case of a Loan) Price Price Price Transaction Asset Date or (Loss)
- -------- --------------- --------- ------- ------ ----------- ------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
There were no reportable transactions in the current year.
</TABLE>
-14-
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents Filed as Part of Report.
3. Exhibits
The exhibits listed below are filed as part of or incorporated
by reference in this report. Where such filing is made by
incorporation by reference to a previously filed document, such
document is identified in parenthesis. See the Index of Exhibits
included with the exhibits filed as part of this report.
No. Description
-- -----------
3.1 Restated Articles of Incorporation of Independent
Bankshares, Inc. (Exhibit 3.1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1994).
3.2 Restated Bylaws of Independent Bankshares, Inc. (Exhibit
3.2 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994).
3.3 Amendment to Restated Bylaws of Independent Bankshares, Inc.
dated March 17, 1999 (previously filed)
4.1 Specimen Stock Certificate for Common Stock of the
Company (Exhibit 4.1 to the Company's Registration Statement
on Form S-1, SEC File No. 333-16419).
4.2 1999 Stock Option Plan of Indendent Bankshares, Inc.
(previously filed)
10.1 Form of Incentive Stock Option Agreement (previously filed)
10.2 Form of Nonqualified Stock Option Agreement (previously filed)
10.3 Master Equipment Lease Agreement, dated December 24,
1992, between Independent Bankshares, Inc. and NCR Credit
Corporation, Amendment to Master Equipment Lease Agreement
dated concurrently therewith, and related form of Schedule and
Commencement Certificate (Exhibit 10.7 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993).
10.4 Loan Agreement, dated September 21, 1998, by and between
Bank One, Texas, National Association and the Company and
Independent Financial Corp. and First State Bank, National
Association and related Promissory Note of the Company, Pledge
Agreement of the Company and Pledge Agreement of Independent
Financial Corp. (Exhibit 10.1 to the Company's Current Report
on Form 8-K dated September 22, 1998).
10.5 Agreement and Plan of Reorganization dated May 29, 1998,
by and between the Company and Azle Bancorp (previously filed
as Exhibit 1.1 to the Company's Current Report on Form 8-K
dated June 19, 1998).
13.1 Annual Report to Shareholders for the year ended December
31, 1998 (previously filed).
21.1 Subsidiaries of Independent Bankshares, Inc. (previously
filed).
23.1 Consent of PricewaterhouseCoopers LLP (previously filed).
23.2 Consent of Condley and Company, L.L.P. (filed herewith)
27.1 Financial Data Schedule (previously filed).
(b) Current Reports on Form 8-K.
Current Report on Form 8-K dated September 22, 1998,
reporting the consummation of the acquisition of Azle Bancorp
and Azle State by the Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: June 21, 1999
INDEPENDENT BANKSHARES, INC.
By: /s/ BRYAN STEPHENSON
---------------------------------------
Bryan W. Stephenson,
President and Chief Executive Officer
By: /s/ RANDAL N. CROSSWHITE
----------------------------------------
Randal N. Crosswhite
Senior Vice President, Chief Financial
Officer, Corporate Secretary
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK
OWNERSHIP/401(K) PLAN
By: First State Bank, N.A., Abilene, Trustee
By: /s/ CAROLYN K. MARSHALL
---------------------------------
Name: Carolyn K. Marshall
-------------------------------
Title: VP/TO
-------------------------------
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
--------------- -----------------------------------------------------
3.1 Restated Articles of Incorporation of Independent
Bankshares, Inc. (Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the year ended December 31,
1994).
3.2 Restated Bylaws of Independent Bankshares, Inc. (Exhibit
3.2 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994).
3.3 Amendment to Restated Bylaws of Independent Bankshares,
Inc., dated March 17, 1999 (previously filed)
4.1 Specimen Stock Certificate for Common Stock of the
Company (Exhibit 4.1 to the Company's Registration
Statement on Form S-1, SEC File No. 333-16419).
4.2 1999 Stock Option Plan of Independent Bankshares, Inc.
(previously filed)
10.1 Form of Incentive Stock Option Agreement (previously
filed)
10.2 Form of Nonqualified Stock Option Agreement (previously
filed)
10.3 Master Equipment Lease Agreement, dated December 24,
1992, between Independent Bankshares, Inc. and NCR
Credit Corporation, Amendment to Master Equipment
Lease Agreement dated concurrently therewith, and
related form of Schedule and Commencement Certificate
(Exhibit 10.7 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1993).
10.4 Loan Agreement, dated September 21, 1998, by and between
Bank One, Texas, National Association and the Company
and Independent Financial Corp. and First State Bank,
National Association and related Promissory Note of the
Company, Pledge Agreement of the Company and Pledge
Agreement of Independent Financial Corp. (Exhibit 10.1
to the Company's Current Report on Form 8-K dated
September 22, 1998).
10.5 Agreement and Plan of Reorganization dated May 29, 1998,
by and between the Company and Azle Bancorp (previously
filed as Exhibit 1.1 to the Company's Current Report on
Form 8-K dated June 19, 1998).
13.1 Annual Report to Shareholders for the year
ended December 31, 1998 (previously filed).
21.1 Subsidiaries of Independent Bankshares, Inc.
(previously filed)
23.1 Consent of PricewaterhouseCoopers LLP
(previously filed)
23.2 Consent of Condley and Company, L.L.P. (filed herewith)
27.1 Financial Data Schedule (previously filed).
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports included in the Amendment No. 1 to Annual Report on Form 10-K/A into
Independent Bankshares, Inc.'s two currently effective Registration Statements
on Form S-8 (SEC File No. 33-83112 and 333-075671) regarding the Company's
Employee Stock Ownership/401(k) Plan.
/s/ CONDLEY AND COMPANY, L.L.P.
Certified Public Accountants
Abilene, Texas
June 21, 1999
<PAGE>
