FORM 8-K/A
NO. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):Commission File Number
March 12, 1994 0-7674
FIRST FINANCIAL BANKSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
Texas 75-0944023
(State of Incorporation) (I.R.S. Employer
Identification No.)
400 Pine Street, Abilene, Texas 79601
(Address of Executive Offices and Zip Code)
Registrant's Telephone Number (915) 675-7155
Amendment No. 1 to Form 8-K
The undersigned registrant hereby amends its Current Report on Form
8-K dated March 24, 1994, as set forth on the pages attached hereto:
Item 7. Financial Statements and Exhibits.
ITEM 7. Financial Statements and Exhibits.
Item 7 of the Form 8-K is amended by adding thereto the following:
In accordance with the Instructions to Form 8-K, there is submitted
with this Form 8-K the following financial information:
1. Audited financial statements of Concho Bancshares, Inc. in
accordance with Item 7 of the Instructions to Form 8-K and
Regulation S-X.
2. Pro forma Combined Condensed Financial Statements of First
Financial Bankshares, Inc. and Concho Bancshares, Inc. in
accordance with Item 7 of the Instructions to Form 8-K and
Article 11 of Regulation S-X.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized.
FIRST FINANCIAL BANKSHARE, INC.
(Registrant)
By:
DATE: May 12, 1994 CURTIS R. HARVEY
Executive Vice President
and
Chief Financial Officer
<PAGE>
Item 7. Financial Statements and Exhibits
1. Audited Financial Statements
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1993 and 1992
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1993 and 1992
TABLE OF CONTENTS
Page
Independent Auditor's Report 1
Consolidated Balance Sheets 2 - 3
Consolidated Statements of Income 4 - 5
Consolidated Statements of Changes in
Shareholders' Equity 6
Consolidated Statements of Cash Flows 7 - 8
Notes to Consolidated Financial Statements 9 - 20
Independent Auditor's Report of
Additional Information 21
Additional Information 22 - 27
<PAGE>
Board of Directors
Concho Bancshares, Inc.
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying consolidated balance sheets of Concho
Bancshares, Inc. and subsidiary as of December 31, 1993 and 1992 and the
related consolidated statements of income, changes in shareholders'
equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Concho Bancshares, Inc. and subsidiary as of December 31, 1993 and 1992,
and the results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles.
February 18, 1994, except for
Note 15, for which the date
is March 10, 1994
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
CONSOLIDATED BALANCE SHEETS
December 31, 1993 and 1992
<CAPTION>
ASSETS
1993 1992
<S> <C> <C>
Cash and due from banks (Note 1)$ 4,043,541 $ 4,747,085
Federal funds sold (Note 1) 7,150,000 2,550,000
Investment securities: (Notes 1 & 2)
United States government 18,982,149 17,511,071
United States agencies 8,902,755 12,211,810
Collateralized mortgage obligations 5,623,765 2,938,724
Stock in FHLB 311,240 303,337
Mutual funds (net of unrealized
loss of $ 91,111 and $ 122,927) 624,011 841,916
Loans and discounts (net of unearned
income of $ 236,260 and $ 373,174
and allowance for loan losses of
$627,560 and $598,734) (Notes 1,4 & 9) 43,124,36242,596,605
Land, building and equipment, net
(Notes 1 & 5)2,825,101 2,967,864
Other real estate 403,976 853,229
Accrued interest 834,504 839,531
Other assets (Note 8) 527,309 503,174
TOTAL ASSETS $ 93,352,713 $ 88,864,346
/TABLE
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
LIABILITIES
<CAPTION>
1993 1992
<S> <C> <C>
Deposits: (Notes 1 & 2)
Demand $ 14,821,377$ 13,002,139
NOW 32,431,066 29,225,118
Savings 3,192,575 2,961,858
Time, $ 100,000 and over 13,096,272 12,992,397
Other time 21,376,942 22,913,661
Federal funds purchased (Note 1) 90,000 85,000
Accrued interest 190,386 210,548
Federal income tax payable 180,112 181,858
Mortgage payable (Note 10) 1,150,988 1,239,164
Other liabilities (Note 8) 356,214 325,782
Deferred federal income tax 204,996 -0-
Minority interests 19,233 20,622
TOTAL LIABILITIES $ 87,110,161$ 83,158,147
</TABLE>
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY
<S> <C> <C>
Common stock, par value $ .50,
500,000 shares authorized,
210,270 shares issued,
201,653 and 201,653 shares
outstanding, respectively $ 105,135 $ 105,135
Surplus 4,660,218 4,660,218
Retained earnings (Note 11) 1,652,745 1,189,750
Treasury stock ( 126,356) ( 126,356)
Unrealized loss on investment
in mutual funds (Note 2) ( 49,190)( 122,548)
TOTAL SHAREHOLDERS' EQUITY $ 6,242,552 $ 5,706,199
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 93,352,713 $88,864,346
/TABLE
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 1993 and 1992
<CAPTION>
1993 1992
<S> <C> <C>
Interest Income (Notes 1,4 & 9)
Interest and fees on loans $ 3,758,063 $ 3,818,426
Interest on Federal funds 113,698 119,555
Interest on investment securities:
United States government 1,012,970 618,308
United States agencies 635,244 928,353
Corporate bonds -0- 23,556
Mutual funds 29,768 78,716
Collateralized mortgage obligations 218,365 280,111
$ 5,768,108 $ 5,867,025
Interest Expense
Interest on deposits $ 2,195,015 $ 2,665,097
Interest on Federal funds 2,572 2,933
Interest on mortgage payable (Note 10) 117,475 119,512
$ 2,315,062 $ 2,787,542
Net interest income $ 3,453,046 $ 3,079,483
Provision for loan losses (Notes 1 & 4) 163,000 205,000
Net Interest Income After
Provision for Loan Losses $ 3,290,046 $ 2,874,483
Other Operating Income
Gain (loss) on sale of assets ($ 8,007)($ 9,939)
Securities gains (losses) ( 35,086)( 85,405)
Service charges 686,384 630,855
Rents 87,064 88,717
FHLB dividends 7,700 3,587
Brokerage fees and other income 429,025 490,839
$ 1,167,080 $ 1,118,654
Total Interest and Other
Operating Income $ 4,457,126 $ 3,993,137
/TABLE
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 1993 and 1992
(Continued)
<CAPTION>
1993 1992
<S> <C> <C>
Other Operating Expenses
Salaries $ 1,344,355 $ 1,227,319
Employee benefits (Note 3) 166,631 173,193
Occupancy expense (Notes 1 & 5) 302,426 318,013
Other expenses (Notes 1,8 & 12) 1,675,403 1,490,746
Capitalized loan costs (Note 4) ( 137,470) ( 155,419)
$ 3,351,345 $ 3,053,852
NET INCOME BEFORE INCOME TAXES $ 1,105,781 $ 939,285
Federal Income Tax (Note 6)
Current $ 343,000 $ 191,000
Deferred 15,578 -0-
Total Federal Income Tax $ 358,578 $ 191,000
NET INCOME BEFORE
MINORITY INTEREST $ 747,203 $ 748,285
NET INCOME ATTRIBUTABLE
TO MINORITY INTEREST 2,582 2,809
NET INCOME BEFORE CUMULATIVE
ADJUSTMENT $ 744,621 $ 745,476
Cumulative Adjustment
Cumulative adjustment - change in
accounting principle (Note 6) ( 231,213) -0-
NET INCOME AFTER CUMULATIVE
ADJUSTMENT DUE TO CHANGE IN
ACCOUNTING PRINCIPLE $ 513,408 $ 745,476
NET INCOME PER SHARE BEFORE
CUMULATIVE ADJUSTMENT $ 3.85 $ 3.68
NET INCOME PER SHARE AFTER CUMULATIVE
ADJUSTMENT $ 2.65 $ 3.68
DIVIDENDS PER SHARE $ 0.26 $ 0.26
/TABLE
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Years Ended December 31, 1993 and 1992
<CAPTION>
UNREALIZED
LOSS ON
RETAINED INVESTMENTS
COMMON TREASURY EARNINGS IN MUTUAL
STOCK SURPLUS STOCK (DEFICIT) FUNDS TOTAL
<S> <C> <C> <C> <C> <C> <C>
Balance,
12-31-91 $105,135 $4,660,218 ($ 3,825) $ 496,807 ($ 170,680)$5,087,655
Dividends ( 52,533) ( 52,533)
Unrealized
depreciation
on investment
in mutual
funds (Note 2) ( 37,009)( 37,009)
Loss realized
on sale of
mutual funds 85,141 85,141
Purchase of
8,515 shares
of stock for
the treasury ( 122,531) ( 122,531)
Net income 745,476 745,476
Balance,
12-31-92 $ 105,135 $4,660,218 ($ 126,356) $1,189,750 ($ 122,548)$5,706,199
Dividends ( 50,413) ( 50,413)
Deferred federal
income tax
applicable to
unrealized loss 41,688 41,688
Unrealized
appreciation
on investment
in mutual
funds (Note 2) 966 966
Loss realized on
sale of mutual
funds 30,704 30,704
Net income 513,408 513,408
Balance,
12-31-93 $ 105,135 $4,660,218 ($ 126,356) $ 1,652,745 ($ 49,190)$ 6,242,552
</TABLE>
<PAGE>
/ CONCHO BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1993 and 1992
<CAPTION>
1993 1992
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest received from:
Loans $ 3,938,325 $ 3,972,863
Investment securities 2,209,375 2,041,812
Federal funds sold 113,698 119,555
Rental income 87,063 88,717
Service fees 686,384 630,855
Other income 422,638 434,798
Interest paid to depositors ( 2,213,530)( 2,783,267)
Interest paid on Federal funds purchased ( 2,572)( 2,933)
Interest paid on mortgage indebtedness ( 119,122)( 100,353)
Cash paid to suppliers and employees ( 3,251,677)( 2,926,346)
Recoveries of bad debts 55,984 27,336
Redemption of cash value of life insurance -0- 238,274
Federal income tax paid ( 344,746)( 56 142)
Net cash provided by operating activities $ 1,581,820 $ 1,685,169
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investment securities $ 214,635 $ 1,060,075
Proceeds from maturities of
investment securities 8,120,526 8,387,673
Purchase of investment securities ( 9,310,224)( 14,851,183)
Federal funds sold, net (increase) decrease ( 4,600,000) 350,000
Federal funds purchased, net increase(decrease) 5,000 ( 85,000)
Net (increase) in loans made to customers ( 920,887)( 4,050,974)
Purchase of fixed assets ( 23,503)( 157,242)
Proceeds from sale of other assets and
other real estate owned 546,803 252,828
Cost incurred on other real estate owned -0- ( 128,205)
Net cash used in investing activities ($ 5,967,650)($ 9,222,028)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand deposits,
NOW accounts and savings accounts $ 5,255,841 $ 8,357,623
Net increase (decrease) in time deposits ( 1,432,845)( 927,180)
Payments on mortgage indebtedness ( 88,177)( 60,837)
Dividends paid ( 52,533)( 52,542)
Cash received on refinance of note payable -0- 132,379
Cash paid for treasury stock -0- ( 122,531)
Net cash provided by financing activities $ 3,682,286 $ 7,326,912
Net increase (decrease) in cash and
cash equivalents ($ 703,544)($ 209,947)
Cash and cash equivalents, beginning of year 4,747,085 4,957,032
Cash and cash equivalents, end of year $ 4,043,541 $ 4,747,085
RECONCILIATION OF NET INCOME
TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
Net income $ 513,408 $ 745,476
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization $ 159,639 $ 139,910
Amortization of construction period interest 10,219 10,219
Provision for loan losses 163,000 205,000
Loss on sale of investment securities 35,086 85,405
Loss on sale of assets 8,007 9,939
Amortization of capitalized loan fees 164,692 131,505
Accretion of bond discount ( 63,493)( 39,825)
Amortization of bond premium 398,224 296,180
Recoveries on bad debts 55,984 27,336
Capitalized net loan costs ( 137,470)( 155,419)
Write-offs - other real estate owned and
other assets 45,067 113,648
Cumulative effect of accounting change 231,213 -0-
Net income attributable to minority interest 2,582 2,809
(Increase) decrease in interest receivable 10,585 ( 77,787)
(Increase) decrease in other assets ( 36,985) 170,773
Increase (decrease) in interest payable ( 20,162)( 99,012)
Increase (decrease) in other liabilities 28,392 ( 15,846)
Increase in deferred federal income tax 15,578 -0-
Increase (decrease) in federal
income tax payable
( 1,746) 134,858
Total adjustments $ 1,068,412 $ 939,693
Net cash provided by operating activities $ 1,581,820 $ 1,685,169
SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Assets acquired through foreclosure $ 157,568 $ 403,570
/TABLE
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1993 and 1992
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies adopted by the Company are
summarized below.
Consolidation - The consolidated financial statements include
Concho Bancshares, Inc. and its subsidiary, Southwest Bank of San
Angelo, after elimination of significant intercompany accounts.
A consolidated federal income tax return is filed with Concho
Bancshares, Inc.'s subsidiary, Southwest Bank of San Angelo.
Concho Bancshares, Inc. owns 99.69% of the outstanding common stock
of Southwest Bank of San Angelo.
Cash flows - For purposes of reporting cash flows, cash and cash
equivalents include cash on hand and amounts due from banks. Cash
flows from loans, demand deposits, NOW accounts, savings accounts,
federal funds purchased and sold, and certificates of deposit, are
reported net.
Investment securities - Investments in debt securities are stated
at cost, adjusted for amortization of premiums and accretion of
discounts computed on the straight-line method over the period from
date of purchase to date of maturity. Investments in mutual funds
are stated at the lower of aggregate cost or market as of the
balance sheet date. The investment in stock of the Federal Home
Loan Bank of Dallas is stated at cost.
Interest income on loans - Interest on commercial, real estate and
student loans is recognized as earned based upon the principal
amounts outstanding. Interest on installment loans is recognized
as earned based on the rule of seventy-eights method.
Building and equipment - Building and equipment are stated at cost
less accumulated depreciation computed by the straight-line and
accelerated cost recovery system methods. Accumulated depreciation
as of December 31, 1993 and 1992 is $ 2,213,196 and $ 2,075,690,
respectively. Maintenance and repairs are charged to expense as
incurred while improvements are capitalized and depreciated over
the useful life of such improvements.
Allowance for loan losses - The allowance for loan losses is
available for losses incurred on loans and is increased by
provisions charged to operating expenses and reduced by charge-
offs, net of recoveries. The allowance is based on management's
evaluation of the adequacy of the reserve. This evaluation
encompasses consideration of past loss experience and other
factors, including changes in the composition and volume of the
portfolio, the relationship of the allowance to the portfolio, and
current economic conditions.
<PAGE>
Amortization - Certain costs associated with the Company's
investment services have been capitalized and are being amortized
by the straight-line method over a period of 60 months. Total
amortization expense for 1993 and 1992 was $ 4,000 each year.
Per Share Data - Earnings per share are based on the weighted
average number of common shares outstanding in 1993 and 1992 of
193,408 and 202,387, respectively.
NOTE 2: INVESTMENT SECURITIES
At December 31, 1993 and 1992 the subsidiary held mutual fund
investments with a cost basis of $ 715,122 and $ 964,803,
respectively. The portfolios of these mutual funds consisted of
obligations of the United States government and agencies. As of
December 31, 1993 and 1992, the aggregate cost of mutual fund
investments exceeded their aggregate market value by $ 91,111 and
$ 122,927, respectively.
Investments in debt securities shown in the balance sheet are
reflected net of accumulated accretion and amortization.
At December 31, 1993 and 1992, the amortized cost, estimate market
values, and the gross unrealized gains and losses of investments
in debt securities were as follows:
<TABLE>
December 31, 1993
<CAPTION>
Gross Gross
Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
United States government $ 18,982,149 $ 382,336 $ -0- $19,364,485
United States agencies 8,902,755 173,775( 102,620) 8,973,910
Collateralized mortgage
obligation 5,623,765 39,525 ( 43,785) 5,619,505
Total debt securities $ 33,508,669 $ 595,636($ 146,405) $33,957,900
</TABLE>
The carrying value and approximate market value of debt securities
at December 31, 1993, by contractual maturities, are shown below.
Expected maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.
<TABLE>
<CAPTION>
Amortized Estimated
Cost Market Value
<S> <C> <C>
Due in one year or less $ 7,064,327$ 7,138,485
Due after one year through five years 14,408,68314,662,262
Due after five years through ten years 3,543,819 3,549,506
Due after ten years 8,491,840 8,607,647
$ 33,508,669 $ 33,957,900
</TABLE>
<PAGE>
<TABLE>
December 31, 1992
<CAPTION>
Gross Gross Estimated
Amortized UnrealizedUnrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
United States government $ 17,511,071 $ 277,758 ($ 25,073) $ 17,763,756
United States agencies 12,211,810 352,867 ( 58,156) 12,506,521
Collateralized mortgage
obligation 2,938,724 84,839 ( 91,733) 2,931,830
Total debt securities $ 32,661,605 $ 715,464($ 174,962) $ 33,202,107
</TABLE>
The carrying value and approximate market value of debt securities
at December 31, 1992, by contractual maturities, are shown below.
Expected maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.
<TABLE>
<CAPTION>
Carrying Approximate
Value Market Value
<S> <C> <C>
Due in one year or less $ 2,545,483$ 2,575,470
Due after one year through five years 18,181,82518,392,451
Due after five years through ten years -0- -0-
Due after ten years 11,934,297 12,234,186
$ 32,661,605 $ 33,202,107
</TABLE>
Obligations of the United States government with par values of
$ 3,000,000, were pledged to secure various deposits as of
December 31, 1993 and 1992.
The Company has opted not to early apply Statement of Financial
Accounting Standards #115 in regard to accounting for its
investment in debt securities. The Company considers all of its
debt securities as "available for sale" as of December 31, 1993.
Had the Company applied the provisions of SFAS #115 as of December
31, 1993, investments in debt securities and stockholders' equity
would be increased by $ 449,231.
NOTE 3: PENSION AND PROFIT SHARING PLANS
The subsidiary has a non-contributory profit-sharing plan available
to all regular employees who have completed six months of service.
Contributions to this plan are at the discretion of the
subsidiary's board of directors. The subsidiary also sponsors a
pension plan, whereby it matches 100% of employee contributions up
to 4% of their compensation and 50% of contributions on the next
2% of compensation. Total expense, relating to the pension plan
for the years ended December 31, 1993 and 1992 was $ 41,279, and
$ 42,154, respectively. For the years ended December 31, 1993 and
1992 the subsidiary's board of directors elected to contribute
$ 25,000 to the profit sharing plan.
NOTE 4: LOANS AND ALLOWANCE FOR LOAN LOSSES
Major classifications of loans are as follows:
<TABLE>
<CAPTION>
December 31, December 31,
1993 1992
<S> <C> <C>
Commercial $ 32,369,200 $ 32,561,474
Real estate 3,598,935 4,162,896
Installment, net of unearned discount 2,648,672 3,821,648
Student loans 6,396,600 4,101,729
Overdrafts 26,629 28,742
Participations sold ( 1,288,114)( 1,481,150)
$ 43,751,922 $ 43,195,339
Less allowance for loan losses 627,560 598,734
NET LOANS $ 43,124,362 $ 42,596,605
Non-accrual loans are as follows:
Principal balances of loans on
non-accrual status $ 628,574 $ 638,371
Approximate interest foregone related to
non-accrual loans $ 53,000 $ 68,000
Changes in the allowance for loan losses were as follows:
BALANCE, BEGINNING OF YEAR $ 598,734 $ 547,354
Provision charged to operations 163,000 205,000
Loans charged off ( 189,658) ( 181,171)
Recoveries 55,484 27,551
BALANCE, END OF YEAR $ 627,560 $ 598,734
</TABLE>
During the year ended December 31, 1988, the Subsidiary changed its
method of accounting for nonrefundable fees and costs associated
with lending activities to comply with the requirements of
Statement of Financial Accounting Standards No. 91. Under the new
accounting method, certain lending related costs are capitalized
into the loan balance and amortized against interest income over
the term of the loan. Total capitalized loan cost and related
amortization are as follows:
<TABLE>
<CAPTION>
Beginning of End of
the Year the Year
Unamortized Capitalized Unamortized
Loan Costs Loan Costs Amortization Loan Costs
<S> <C> <C> <C> <C>
1993 $ 180,461 $ 137,470 $ 164,692 $ 153,239
1992 $ 156,576 $ 155,419 $ 131,534 $ 180,461
</TABLE>
Loans at variable and fixed interest rates as of December 31, 1993
are as follows:
<TABLE>
<CAPTION>
Variable Fixed
<S> <C> <C>
Commercial $ 12,160,441$ 19,020,176
Real estate $ 810,987$ 2,715,046
Installment $ 51,786$ 2,596,886
Student $ -0-$ 6,396,600
</TABLE>
Original maturities for each loan category as of December 31, 1993 are
as follows:
Commercial - less than 1 year to 30 years
Real estate - 1 year to 30 years
Installment - less than 1 year to 10 years
Student - 1 to 2 years
The subsidiary routinely sells its student loans to the Panhandle
Plains Higher Education Agency prior to the loans reaching repayment
stage. For 1993 and 1992, the subsidiary sold approximately
$ 2,777,041 and $ 2,351,013, respectively, of these loans under this
program.
NOTE 5: LAND, BUILDING AND EQUIPMENT
Major classifications of these assets are as follows:
<TABLE>
<CAPTION>
December 31,December 31,
1993 1992
<S> <C> <C>
Land $ 327,000 $ 327,000
Buildings 3,744,247 3,711,293
Leasehold improvements 147,900 145,077
Automobiles 58,528 58,528
Furniture and fixtures 760,622 743,263
Assets not in service -0- 58,393
$ 5,038,297 $ 5,043,554
Accumulated depreciation and amortization $ 2,213,196 $ 2,075,690
Land, building and equipment, net $ 2,825,101 $ 2,967,864
Depreciation and amortization expense $ 165,858 $ 146,129
</TABLE>
NOTE 6: FEDERAL INCOME TAXES
Deferred income taxes arise from timing differences resulting from
income and expense items reported for financial accounting and tax
purposes in different periods. The principal sources of timing
differences are different depreciation methods for tax and
financial purposes, and differences in tax and financial accounting
for deferred compensation arrangements, bad debt losses and bond
discount accretion. No deferred federal income taxes were recorded
as of December 31, 1992.
Effective January 1, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes". The cumulative effect of the change in accounting
principle totalled $231,213 and has been included in determining
net income for the year ended December 31, 1993. $ 41,795 of this
amount arose from unrealized loss on investments in mutual funds
and has been credited to stockholders' equity. The remaining $
189,418 was recorded as a deferred tax liability upon adoption of
SFAS #109.
The components of income tax expense are:
<PAGE>
<TABLE>
<CAPTION>
December 31,December 31,
1993 1992
<S> <C> <C>
Current income taxes:
Federal $ 371,070 $ 251,629
Minimum tax credit ( 28,070)( 12,050)
General business credit -0- ( 48,579)
Total current taxes $ 343,000 $ 191,000
Deferred tax expense (benefit): $ 15,578 $ -0-
Total income tax expense $ 358,578 $ 191,000
A reconciliation of income tax expense at the statutory rate to income tax
at the company's effective rate is as follows:
</TABLE>
<TABLE>
<CAPTION>
December 31,December 31,
1993 1992
<S> <C> <C>
Tax at statutory rate $ 375,966 $ 319,356
Tax benefit from net operating
loss carryforward -0- ( 67,727)
Minimum tax credit ( 28,070)( 12,050)
General business credit ( -0-)( 48,579)
Other 10,682 -0-
Income tax expense $ 358,578 $ 191,000
</TABLE>
A consolidated tax return is filed with the Company's subsidiary,
Southwest Bank of San Angelo. The above tax computations are based
on the incomes and tax attributes of the consolidated entity. The
net taxes of the consolidated entity are attributed to the Bank,
since it was the only member of the affiliated group which
generated a net income.
NOTE 7: FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
The subsidiary is a party to financial instruments with
off-balance-sheet risk in the normal course of business to meet the
financing needs of its customers. These financial instruments
include commitments to extend credit and letters of credit. Those
instruments involve elements of credit risk in excess of the amount
recognized in the balance sheet. The contract amounts of those
instruments reflect the extent of involvement the subsidiary has
in particular classes of financial instruments.
The subsidiary's exposure to credit loss in the event of
nonperformance by the other party to the financial instruments for
commitments to extend credit and letters of credit is represented
by the contractual amount of those instruments. The subsidiary
uses the same credit policies in making commitments and conditional
obligations as it does for on-balance-sheet instruments.
<TABLE>
<CAPTION>
Contract Amount
1993 1992
<S> <C> <C>
Financial instruments whose contract
amounts represent credit risk:
Commitments to extend credit $ 5,469,874$ 4,740,485
Letters of Credit 619,685 726,980
$ 6,089,559$ 5,467,465
</TABLE>
Commitments to extend credit are agreements to lend to a customer
as long as there is no violation of any condition established in
the contract. Commitments may expire without being drawn upon;
therefore, the total commitment amounts do not necessarily
represent future cash requirements. The subsidiary evaluates each
customer's creditworthiness on a case by case basis. The amount
of collateral obtained if deemed necessary by the Subsidiary upon
extension of credit is based upon management's credit evaluation.
Letters of credit are conditional commitments issued by the bank
to guarantee the performance of a customer to a third party. The
credit risk involved in issuing letters of credit is essentially
the same as that involved in extending loan facilities to
customers.
NOTE 8: DEFERRED COMPENSATION
The subsidiary maintains a deferred compensation plan for its
directors funded by the purchase of life insurance policies on each
participant. Other pertinent financial information relating to the
subsidiary's deferred compensation plans is as follows:
<TABLE>
<CAPTION>
December 31, December 31,
1993 1992
<S> <C> <C>
Life insurance premiums paid $ 4,800 $ 5,600
Cash surrender value of life
insurance policies $ 278,531 $ 244,957
Accrued deferred compensation liability $ 130,715 $ 100,548
Current year deferred compensation expense $ 30,168 $ 22,744
</TABLE>
The deferred compensation plan of a former director was
discontinued during 1992. The subsidiary recognized a gain of $
67,514 from the discontinuance of this director's plan.
NOTE 9: RELATED PARTY TRANSACTIONS
As of December 31, 1993 and 1992, certain officers and directors
and companies in which they have a beneficial ownership were
indebted to the subsidiary in the aggregate amount of $ 629,590 and
$ 789,332, respectively.
<PAGE>
NOTE 10: NOTES PAYABLE
Notes payable represents 13 individual promissory notes issued to
certain of the company's customers and directors. Each note was
issued for $ 100,000 and all notes bear the same terms, maturity
date and collateral. The collateral for these notes is held at
Bank of the West, San Angelo, Texas. The terms of these notes are
as follows:
Date of notes January 21, 1993
Maturity date January 21, 1997
Collateral Real Estate and 119,504
shares of Southwest Bank
common stock
Interest rate 9.50%
Payments 19 quarterly payments of
$ 50,702.86, including
interest; balance due at
maturity.
Following are the maturities of this note over the next five years:
<TABLE>
<S> <C>
1994 $ 96,857
1995 106,392
1996 116,865
1997 830,874
Total $ 1,150,988
</TABLE>
NOTE 11: RETAINED EARNINGS
Banking regulations limit the amount of dividends that may be paid
without prior approval of the Subsidiary's regulatory agency.
<PAGE>
NOTE 12: LEASES
As of December 31, 1992 the subsidiary leased computer equipment
under agreements determined to be operating leases. The
provisions of these lease agreements are described as follows:
<TABLE>
<CAPTION>
Computer Computer Computer
Equipment EquipmentEquipment
Lease #1 Lease #2 Lease #3
<S> <C> <C> <C>
Primary lease term 36 mos 36 mos 36 mos
Date of lease 12-27-89 08-23-89 01-29-90
Lease renewal option at
expiration of primary term 24 mos 24 mos 24 mos
Monthly lease amount
Primary term:
Year one $ 5,664 $ 1,950 $ 345
Year two 6,231 2,145 380
Year three 6,854 2,359 418
Option period:
Year one 7,539 2,595 459
Year two 8,141 2,846 467
Penalty for non-renewal 18,626 6,430 1,136
</TABLE>
Minimum future rental payments under the primary and optional terms
of these lease agreements as of December 31, 1992 for each of the
next five years and in the aggregate are as follows:
<TABLE>
<CAPTION>
December 31,
1992
<S> <C>
1993 $ 122,596
1994 117,012
1995 8,141
1996 -0-
1997 -0-
Total $ 247,749
</TABLE>
The subsidiary leased computer equipment under an agreement
determined to be an operating lease. The lease agreements that
previously existed were terminated and combined into one lease
agreement dated February 23, 1993. The provisions of this
agreement are described as follows:
<TABLE>
<S> <C>
Primary term 36 mos.
Date of lease 2-23-93
Lease renewal option at
expiration of primary term 24 mos.
Primary term $ 6,890/mo.
Option period $ 6,890/mo.
Penalty for non-renewal $ 20,150
</TABLE>
Minimum future rental payments under the primary and optional terms
of this lease agreement as of December 31, 1993 for each of the
next five years and in the aggregate are as follows:
<TABLE>
<S> <C>
1994 $ 82,680
1995 82,680
1996 82,680
1997 82,680
1998 6,890
Total $ 337,610
</TABLE>
Lease expense under all operating leases is as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Non-cancelable operating leases $ 86,342 $ 98,478
Other leases 25,903 41,008
Total $112,245 $ 139,486
</TABLE>
NOTE 13: FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosures
about Fair Value of Financial Instruments", requires all entities
to disclose the estimated fair value of its financial instrument
assets and liabilities. For the Company, as for most financial
institutions, approximately 95% of its assets and 99% of its
liabilities are considered financial instruments as defined in
Statement No. 107. Many of the Company's financial instruments,
however, lack an available trading market as characterized by a
willing buyer and willing seller engaging in an exchange
transaction. It is also the Company's general practice and intent
to hold its financial instruments to maturity and to not engage in
trading or sales activities. Therefore, significant estimations
and present value calculations were used by the Company for the
purpose of this disclosure.
<PAGE>
Estimated fair values have been determined by the Company using the
best available data, as generally provided in the Company's
Regulatory Reports, and an estimation methodology suitable for each
category of financial instruments. For those loans and deposits
with floating interest rates, it is presumed that estimated fair
values generally approximate the recorded book balances. The
estimation methodologies used, the estimated fair values, and
recorded book balances at December 31, 1993 and 1992 were as
follows:
*Financial instruments actively traded in a secondary market have
been valued using quoted available market prices.
<TABLE>
<CAPTION>
Estimated Recorded
Fair Book
Value Balance
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Cash and due from
banks $ 4,043,541 $4,747,085$ 4,403,541 $4,747,085
Federal funds sold 7,150,000 2,550,000 7,150,000 2,550,000
Investment securities
(Note 2) 34,893,151 34,347,360 34,443,920 33,806,858
</TABLE>
*Financial instruments with stated maturities have been valued
using a present value discounted cash flow with a discount rate
approximating current market for similar assets and liabilities.
Financial instrument assets with variable rates and financial
instrument liabilities with no stated maturities have an estimated
fair value equal to both the amount payable on demand and the
recorded book balance.
<TABLE>
<CAPTION>
Estimated Recorded
Fair Book
Value Balance
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Deposits with stated
maturities $ 34,645,699 $ 36,061,445$ 34,473,214$ 35,906,058
Deposits with no
stated maturities 50,656,428 45,189,115 $ 50,656,428$ 45,189,115
</TABLE>
<TABLE>
<CAPTION>
Estimated Recorded
Fair Book
Value Balance
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Net loans $ 43,129,542 $ 43,125,697$ 43,124,362$ 42,596,605
</TABLE>
Changes in assumptions or estimation methodologies may have a
material effect on these estimated fair values.
The Company's remaining assets and liabilities which are not
considered financial instruments have not been valued differently
than has been customary with historical cost accounting. No
disclosure of the relationship value of the Company's deposits is
required by Statement No. 107 nor has the Company estimated its
value. There is no material difference between the notional amount
and the estimated fair value of off-balance-sheet unfunded loan
commitments which total $ 5,469,874 and $ 4,740,485 at December 31,
1993 and 1992, respectively, and are generally priced at market at
the time of funding. Letters of credit discussed in Note 7 have
an estimated fair value based on fees currently charged for similar
agreements. At December 31, 1993 and 1992, fees related to the
unexpired term of the letters of credit are not significant.
<PAGE>
Management is concerned that reasonable comparability between
financial institutions may not be likely due to the wide range of
permitted valuation techniques and numerous estimates which must
be made given the absence of active secondary markets for many of
the financial instruments. This lack of uniform valuation
methodologies also introduces a greater degree of subjectivity to
these estimated fair values.
NOTE 14: SUBSEQUENT EVENT
Pursuant to Stock Exchange Agreement and Plan of Reorganization
dated as of December 7, 1993 by and between the First Financial
Bankshares, Inc., Concho Bancshares, Inc. and Southwest Bank of San
Angelo, First Financial Bankshares, Inc. has offered to acquire
from the Concho Bancshares, Inc. shareholders all of the
outstanding shares of Concho Bancshares, Inc. for shares of First
Financial Bankshares, Inc. at an exchange rate specified in the
exchange agreement.
Consummation of the Exchange Offer is subject to certain
conditions, including without limitation, the valid tender by
Concho Bancshares, Inc. shareholders of at least ninety percent
(90%) of Concho Bancshares, Inc. common stock. As of March 10,
1994, the expiration date for the exchange offer, the 90% threshold
had been met and the parties are proceeding with the transaction
which is to be accounted for as a pooling of interest.
NOTE 15: CONCENTRATIONS OF CREDIT
All of the Subsidiary's loans, commitments, and commercial and
standby letters of credit have been granted to customers in the
Subsidiary's market area. Generally such customers are depositors
of the Subsidiary. The concentrations of credit by type of loan
are set forth in Note 4. The distribution of commitments to extend
credit approximates the distribution of loans outstanding.
Commercial and standby letters of credit were granted primarily to
commercial borrowers. The Subsidiary, as a matter of policy, does
not extend credit to any single borrower or group of related
borrowers in excess of $ 775,000.
<PAGE>
ADDITIONAL INFORMATION
<PAGE>
To the Board of Directors
Concho Bancshares, Inc.
Our report on our audits of the basic consolidated financial statements
of Concho Bancshares, Inc. for 1993 and 1992 appears on page 1. Those
audits were made for the purpose of forming opinions on the basic
consolidated financial statements taken as a whole. The following
information, identified as balance sheets of Concho Bancshares, Inc. as
of December 31, 1993 and 1992, and the related statements of income,
changes in shareholders' equity and cash flows for the years then ended,
represents the financial statements of Concho Bancshares, Inc. without
the effects of consolidation with its subsidiary. This information is
presented for purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects
in relation to the basic financial statements taken as a whole.
February 18, 1994
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
BALANCE SHEETS - PARENT COMPANY ONLY
December 31, 1993 and 1992
<CAPTION>
ASSETS
1993 1992 <S> <C>
<C>
CURRENT ASSETS:
Cash $ 211,410 $ 141,019
Prepaid expenses 1,958 1,944
Total Current Assets $ 213,368 $ 142,963
BUILDING AND EQUIPMENT:
Building (net) $ 926,126 $ 976,156
Furniture and fixtures (net) 4,775 4,775
$ 930,901 $ 980,931
OTHER ASSETS:
Investment in subsidiary $ 6,858,908 $ 6,163,278
Total Other Assets $ 6,858,908 $ 6,163,278
TOTAL ASSETS $ 8,003,177 $ 7,287,172
/TABLE
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
BALANCE SHEETS - PARENT COMPANY ONLY
December 31, 1993 and 1992
<TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
LIABILITIES
1993 1992
<S> <C> <C>
CURRENT LIABILITIES:
Dividends payable $ 50,413 $ 52,533
Accrued liabilities 59,186 60,895
Current maturities of long-term liabilities 96,858 88,178
Total Current Liabilities $ 206,457 $ 201,606
LONG-TERM LIABILITIES:
Notes payable $ 1,150,988 $ 1,239,165
Less: current maturities ( 96,858)( 88,178)
Deferred intercompany gain 231,691 228,380
Deferred federal income tax 268,347 -0-
Total Long-Term Liabilities $ 1,554,168 $ 1,379,367
TOTAL LIABILITIES $ 1,760,625 $ 1,580,973
</TABLE>
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY
<S> <C> <C>
Common stock, par value $ .50,
500,000 shares authorized,
210,270 shares issued,
201,653 and 201,653 shares
outstanding, respectively $ 105,135 $ 105,135
Surplus 4,660,218 4,660,218
Retained earnings 1,652,745 1,189,750
Treasury stock ( 126,356)( 126,356)
Unrealized loss on securities ( 49,190)( 122,548)
TOTAL SHAREHOLDERS' EQUITY $ 6,242,552 $ 5,706,199
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 8,003,177 $ 7,287,172
/TABLE
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
STATEMENTS OF INCOME - PARENT COMPANY ONLY
Years Ended December 31, 1993 and 1992
<CAPTION>
1993 1992
<S> <C> <C>
OPERATING INCOME:
Rental income $ 87,064 $ 96,163
Total Operating Income $ 87,064 $ 96,163
OPERATING EXPENSE:
General and administrative $ 119,687 $ 50,380
Depreciation 45,050 44,640
Amortization 4,980 4,980
Interest 117,475 115,766
Taxes 19,946 27,184
Total Operating Expenses $ 307,138 $ 242,950
INCOME (LOSS) FROM OPERATIONS ($ 220,074)($ 146,787)
OTHER INCOME:
Miscellaneous 2,119 25
Equity in earnings of subsidiary 999,710 578,020
NET INCOME BEFORE FEDERAL INCOME TAX $ 781,755 $ 431,258
FEDERAL INCOME TAX
Current $ -0- $ -0-
Deferred 15,578 -0-
Total Federal Income Tax $ 15,578 $ -0-
NET INCOME BEFORE CUMULATIVE
ADJUSTMENT $ 766,177 $ 745,476
Cumulative Adjustment
Cumulative adjustment - change in
accounting principles ( 252,769) -0-
NET INCOME AFTER CUMULATIVE
ADJUSTMENT DUE TO CHANGE IN
ACCOUNTING PRINCIPLE $ 513,408 $ 745,476
/TABLE
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY -
PARENT COMPANY ONLY
Years Ended December 31, 1993 and 1992
<CAPTION>
UNREALIZED
LOSS ON
RETAINED INVESTMENTS
COMMON TREASURY EARNINGS IN MUTUAL
STOCK SURPLUS STOCK (DEFICIT) FUNDS TOTAL
<S> <C> <C> <C> <C> <C> <C>
Balance,
12-31-91 $105,135 $4,660,218 ($ 3,825) $ 496,807 ($ 170,680) $5,087,655
Dividends ( 52,533) ( 52,533)
Unrealized
depreciation
on investment
in mutual
funds (Note 2) ( 37,009) ( 37,009)
Loss realized on
sale of mutual
funds 85,141 85,141
Purchase of 8,515
shares of stock
for the treasury ( 122,531) ( 122,531)
Net income 745,476 745,476
Balance,
12-31-92 $105,135 $4,660,218 ($ 126,356) $1,189,750 ($ 122,548) $5,706,199
Dividends ( 50,413) ( 50,413)
Deferred federal
income tax
applicable to
unrealized loss 41,688 41,688
Unrealized
appreciation
on investment
in mutual
funds (Note 2) 966 966
Loss realized on
sale of mutual
funds 30,704 30,704
Net income 513,408 513,408
Balance,
12-31-93 $105,135 $4,660,218 ($ 126,356) $1,652,745 ($ 49,190) $6,242,552
</TABLE>
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
STATEMENTS OF CASH FLOWS - PARENT COMPANY ONLY
Years Ended December 31, 1993 and 1992
<CAPTION>
1993 1992
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Rents received $ 87,064 $ 88,266
Dividends received 383,947 318,924
Miscellaneous receipts 2,120 -0-
Interest paid ( 119,122) ( 100,353)
General and administrative expenses paid ( 139,711) ( 73,388)
Net cash provided by operating activities $ 214,298 $ 233,449
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of subsidiary's stock ($ 3,197) ($ 1,323)
Purchase of fixed assets ( -0-) ( 2,316)
Net cash used by investing activities ($ 3,197) ($ 3,639)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal advanced on refinanced of debt $ -0- $ 132,379
Purchase of stock for treasury -0- ( 122,531)
Dividends paid ( 52,533) ( 52,542)
Payments on mortgage indebtedness ( 88,177) ( 60,836)
Net cash used by financing activities ($ 140,710) ($ 103,530)
NET INCREASE (DECREASE) IN CASH $ 70,391 $ 126,280
CASH, BEGINNING OF YEAR 141,019 14,739
CASH, END OF YEAR $ 211,410 $ 141,019
/TABLE
<PAGE>
CONCHO BANCSHARES, INC. AND SUBSIDIARY
<TABLE>
STATEMENTS OF CASH FLOWS - PARENT COMPANY ONLY
Years Ended December 31, 1993 and 1992
<CAPTION>
1993 1992
<S> <C> <C>
RECONCILIATION OF NET INCOME
TO NET CASH PROVIDED BY OPERATING
ACTIVITIES:
Net income (loss) $ 513,408 $ 745,476
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation $ 45,050 $ 44,800
Amortization 4,980 4,980
Equity in earnings of subsidiary ( 999,710)( 904,380)
Dividends received from subsidiary 383,947 318,924
Cumulative effect of change in
accounting principle 252,769 -0-
(Increase) Decrease in prepaid expenses ( 14)2,559
Increase in accrued liabilities ( 1,710) 21,090
Increase in deferred federal income
tax 15,578 -0-
Total adjustments ($ 299,110)($ 512,027)
Net cash provided by operating activities $ 214,298 $ 233,449
/TABLE
<PAGE>
Item 7. Financial Statements and Exhibits (continued)
2. Pro Forma Combined Condensed Financial Statements
FIRST FINANCIAL BANKSHARES, INC. AND
CONCHO BANCSHARES, INC.
PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited pro forma combined condensed
financial statements are presented in accordance with the
Securities and Exchange Commissions (SEC) rules and
regulations to show the effects on the historical
financial statements of the acquisition by First Financial
Bankshares, Inc. (First Financial) of Concho Bancshares
(Concho) and its wholly owned subsidiary; Southwest Bank
of San Angelo. The transaction was finalized on March 10,
1994 and accounted for as a pooling of interests. Pro
forma balance sheets for December 31, 1993 and 1992, and
statements of earnings for the three years ended December
31, 1993, are presented.
<PAGE>
FIRST FINANCIAL AND SUBSIDIARIES AND
CONCHO AND SUBSIDIARIES
PRO FORMA COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
1993 1992
<S> <C> <C>
Assets
Cash and due from banks $ 55,214,848 $ 66,583,710
Interest-bearing deposits in banks 787,000 791,000
Federal funds sold 45,506,000 43,255,000
Investment securities 456,179,536 404,440,212
Loans 420,243,003 374,486,682
Less:Allowance for loan losses 9,013,387 8,298,738
411,229,616 366,187,944
Bank premises and equipment-net 30,052,817 27,258,165
Other assets 19,012,828 19,822,149
Total Assets $1,017,982,645 $ 928,338,180
Liabilities
Demand deposits $ 193,934,140 $ 175,329,710
Time deposits 719,415,421 656,210,590
Total deposits 913,349,561 831,540,300
Short-term borrowings 90,000 85,000
Mortgage notes payable 1,150,988 1,239,164
Other liabilities 6,934,399 8,334,559
Total liabilities 921,524,948 841,199,023
Shareholders' Equity
Capital stock 39,708,470 36,166,860
Capital surplus 15,841,318 6,619,889
Retained earnings 40,907,909 44,352,408
Total Shareholders' equity 96,457,697 87,139,157
Total Liabiliities and Shareholders' equity $1,017,982,645$ 928,338,180
/TABLE
<PAGE>
FIRST FINANCIAL AND SUBSIDIARIES AND
CONCHO AND SUBSIDIARIES
PRO FORMA COMBINED CONDENSED STATEMENT OF EARNINGS
<TABLE>
<CAPTION>
Year ended December 31,
1993 1992 1991
<S> <C> <C> <C>
Interest Income $ 60,205,819 $ 61,441,201 $ 68,127,645
Interest Expense 20,333,004 24,202,331 35,912,324
Net Interest Income 39,872,815 37,238,870 32,215,321
Provision for Loan Losses 508,010 1,145,070 1,240,000
Noninterest Income 11,004,989 9,765,192 9,231,196
Noninterest Expense 31,541,839 28,935,173 27,306,076
Income Before Income Taxes 18,827,955 16,923,819 12,900,441
Provision for Income Taxes 6,105,087 5,189,018 3,824,146
Net income before cumulative
adjustment for Change in
Accounting for Income Taxes 12,722,868 11,734,8019,076,295
Cumulative Adjustment for
Change in Accounting for
Income Taxes
1,023,595 - -
Net income $ 13,746,463$ 11,734,801 $ 9,076,295
Net Income Per Share before
Cumulative Adjustment For
Change in Accounting for
Income Taxes $ 3.21$ 2.97 $ 2.32
Net Income Per Share $ 3.46$ 2.97 $ 2.32
Dividends Per Share $ 1.20$ 0.95 $ 0.82
</TABLE>
