SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
and Exchange Act of 1934
Filed by Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to par. 240.14a-11(c) or
par 240.14a-12
First Financial Bankshares, Inc.
(Name of Registrant as Specified in its Charter)
Curtis R. Harvey
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: /
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated
and state how it was determined.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
FIRST FINANCIAL BANKSHARES, INC.
400 Pine Street
Abilene, Texas 79601
(915) 675-7155
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 23, 1996
TO OUR SHAREHOLDERS:
The annual meeting of shareholders of First Financial
Bankshares, Inc. will be held in the Abilene Civic Center, 1100
North 6th Street, Abilene, Texas, at 10:30 a.m. on Tuesday, April
23, 1996, for the following purposes:
(1) To elect 14 Directors of the Company.
(2) To approve the appointment by the Board of
Directors of Arthur Andersen LLP as the independent accountants
of the Company for the year 1996.
(3) To act on such other business as may properly come
before the meeting, or any adjournment thereof. The Board of
Directors ("management") is not aware of any other business to
come before the meeting.
The transfer books of the Company will not be closed, but
only the holders of common stock of record at the close of
business on March 15, 1996, will be entitled to notice of and to
vote at the annual meeting.
The management sincerely desires your presence at the annual
meeting and luncheon to be held immediately thereafter, but,
nevertheless, respectfully urges you to sign and return the
enclosed proxy in order to remove any question of your vote being
counted. If you sign and return the proxy, but later desire to
vote in person, you may revoke your proxy by a written request to
either of the named proxies. Revocation of your proxy can be
done either before or at the annual meeting, so long as your
written request is received by one of the named proxies before
your proxy is voted.
By order of the Board of Directors.
KENNETH T. MURPHY, Chairman
March 29, 1996
PAGE
<PAGE>
FIRST FINANCIAL BANKSHARES, INC.
400 Pine Street
Abilene, Texas 79601
(915) 675-7155
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 23, 1996
SOLICITATION AND REVOCABILITY OF PROXIES
The accompanying proxy is solicited by and on behalf of the
Board of Directors of First Financial Bankshares, Inc., a Texas
corporation (the "Company"), for use at the annual meeting of
shareholders to be held on Tuesday, April 23, 1996, at the time
and place and for the purposes set forth in the accompanying
notice and at any recess or adjournments thereof. The
solicitation will be by mail. The total expense of such
solicitation will be borne by the Company and will include
reimbursement paid to brokerage firms and other custodians,
nominees and fiduciaries for their expenses in forwarding
solicitation material regarding the meeting to beneficial owners.
It may be that further solicitation of proxies will be made by
telephone or oral communication with some of the shareholders of
the Company following the original solicitation. All further
solicitation will be made by the officers of the Company who will
not be additionally compensated therefor.
The accompanying proxy, even though executed and returned,
may be revoked at any time prior to voting of the proxy by
written request to either of the named proxies by the shareholder
of record.
The proxy materials were mailed to shareholders on March 29,
1996. Only shareholders of record at the close of business on
March 15, 1996, will be entitled to vote at such meeting. On such
date there were 5,345,059 shares of common stock outstanding and
entitled to vote. The holders of common stock will be entitled
to one vote per share and cumulative voting is not permitted.
ELECTION OF DIRECTORS
A Board of Directors is to be elected at the annual meeting.
Each Director elected will hold office until the next annual
meeting of the shareholders and until his or her successor shall
be elected and qualified. Under the Bylaws of the Company, an
individual may not stand for election or reelection as Director
upon attainment of 72 years of age unless such individual owns at
least 1% of the outstanding shares of the Company and is less
than 75 years of age. While Bylaws of the Company fix the number
of Directors at a number not less than three nor more than
thirty, fourteen nominees are named and proposed by management.
The reason that the number of Directors authorized exceeds the
number of nominees is to avoid the necessity of amending the
Bylaws of the Company each time that it would appear to be to
the advantage of the Company to increase the number of its
Directors. The proxies accompanying this proxy statement cannot
be voted by the proxy committee for a greater number of persons
than the number of nominees named. Other Directors could be
elected after nominations from the floor of the meeting, if such
nominees each receive a majority vote of the shareholders.
Although the management of the Company does not contemplate that
any of the nominees will be unable to serve, if such a situation
arises prior to the meeting, the proxy committee will vote in
accordance with its best judgment.
PAGE
<PAGE>
The names and principal occupations of the nominees, together
with the length of service as a Director and the number of shares
of common stock of the Company beneficially owned by each of them
on March 6, 1996, are as follows:
<TABLE>
<CAPTION>
Shares
Of the Percent
Principal Company of
Occupation Bene- Shares
Years as During Last ficially Out-
Name Age Office Director Five Years Owned standing
(1)
<S> <C><C> <C><C> <C> <C>
Joseph E. Canon 53 Director - Executive Director 2,542 -
Dodge Jones
Foundation
Mac A. Coalson 57 Director - Real Estate and 60,213 1.1
Ranching
F. Scott Dueser(2)42 Director 5 President and 33,894 0.6
Chief Executive
Officer,First
National Bank of
Abilene, Abilene,
Texas* since May
18, 1993;President,
First National
Bank of Abilene,
Abilene,Texas*,
January 15, 1991,
to May 18, 1993;
Executive Vice
President,First
National Bank of
Abilene, Abilene,
Texas*
Patrick N. Gerald 56 Director 15 Chairman and 19,041 0.4
President, First
National Bank,
Sweetwater,
Sweetwater, Texas*
Robert E. Hitt 71 Director 23 Investments 51,798 0.9
(2) (3) (5)
Raymond A.
McDaniel, Jr.(3) 62 Director 4 McDaniel Associates 14,696 0.2
Bynum Miers (5) 59 Director 4 Ranching and 13,453 0.2
Investments
Kenneth T.
Murphy (2) 58 Chairman,24 See "Executive 56,251 1.0
President Officers"
and Chief on Page 5
Executive
Officer,
and
Director
Dian Graves
Owen (5) 56 Director 3 Chairman, Owen 13,595 0.2
James M. Parker 65 Director 23 President, Parker 202,655 3.8
(2) (3) (4) Properties, Inc.
O.L. Schuch 70 Director 1 Investments 15,878 0.3
Craig Smith 53 Director 6 Chairman and 25,140 0.5
President,
Hereford State Bank,
Hereford, Texas*
H.T.Wilson(2)(5) 68 Director 13 Chairman, Eastland 50,286 0.9
National Bank,
Eastland, Texas*
Walter F.
Worthington 69 Director - Chairman and 86,618 1.6
President,
Weatherford
National Bank,
Weatherford, Texas*
Shares beneficially owned by all Executive Officers and Directors
as a group 648,323 12.1
*The bank shown is a subsidiary of the Company.
(1) The years indicated are the approximate number of years each
person has continuously served as Director of the Company, or,
prior thereto, of First National Bank of Abilene, which became a
wholly-owned subsidiary of the Company in April 1973, when all
the then Directors of First National Bank of Abilene became
Directors of the Company.
(2) This Director/Nominee is a member of the Executive Committee.
(3) This Director/Nominee is a member of the Stock Option
Committee.
(4) This Director/Nominee is a member of the Administrative
Committee of the Company Profit Sharing and Pension Plan.
(5) This Director/Nominee is a member of the Directors' Audit
Committee.
</TABLE>
PAGE
<PAGE>
MEETINGS OF BOARD OF DIRECTORS
During the last full year, four regular quarterly meetings of
the Board of Directors were called and held. All Directors
except Mrs. Owen were able to attend at least 75% of the
aggregate of the meetings of the Board of Directors and the
meetings held by all committees of the Board on which they
served. Directors who are not officers of the Company receive
$800 for each Board meeting attended.
COMMITTEES
First Financial Bankshares, Inc. does not have a standing
nominating or compensation committee of the Board of Directors.
The Company has a standing Executive Committee whose
responsibilities include functioning as a compensation committee
and a nominating committee with appropriate recommendations to
the entire Board. The Executive Committee met seven times
during 1995 and, among other items, considered and took action on
matters relating to its capacity as compensation and/or
nominating committee. In its capacity as nominating committee,
the Executive Committee will consider director nominations from
security holders. There are no prescribed procedures that the
security holder must follow. The Company has a Directors' Audit
Committee that has the responsibility of acting on behalf of
the Board in receiving and reviewing both internal and external
audit reports. During 1995 the Audit Committee met three times.
The Company also has an Administrative Committee for the Profit
Sharing, Pension and Flexible Spending Account Benefit Plans.
Pursuant to the 1992 Incentive Stock Option Plan for Key
Employees of First Financial Bankshares, Inc. and its
Subsidiaries, the Board of Directors has also appointed a Stock
Option Committee composed of five members. The Directors serving
on these committees are indicated in the section titled "ELECTION
OF DIRECTORS." Directors who are not officers of the Company
receive $400 for each committee meeting attended.
APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP to
serve as independent certified public accountants to the Company
and its subsidiaries for the year 1996 and to serve until the
next annual meeting in April 1997. Arthur Andersen LLP has
served as the Company's independent accountants since
1990. The Company has been advised by Arthur Andersen LLP that
neither its firm nor any of its members has any financial
interest, direct or indirect, in the Company or any of its
subsidiaries, nor has had any connection with the Company or any
of its subsidiaries in any capacity other than independent
accountants.
The Board of Directors recommends that you vote for the
approval of the appointment of Arthur Andersen LLP. If the
shareholders do not approve the appointment of Arthur Andersen
LLP, then the appointment of independent accountants will be
reconsidered by the Board of Directors.
Representatives of Arthur Andersen LLP are expected to be
present at the annual shareholders meeting, and they may have the
opportunity to make a statement, if they desire to do so, and to
respond to appropriate questions.
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS
The executive officers of First Financial Bankshares, Inc.
are:
Years Principal
Served Occupation
Term of In Such During
Name Age Office Office Office Past 5 Years
<S> <C> <C> <C> <C> <C>
Kenneth T. Murphy 58 Chairman, 1 year 9 years Chairman,
President President and
and Chief Chief Executive
Executive Officer;
Officer Chairman,
First National
Bank of
Abilene,
Abilene, Texas*
Curtis R. Harvey 50 Executive 1 year 5 years Executive Vice
Vice President and
President Chief Financial
and Chief Officer
Financial
Officer
Tommy J. Barrow 48 Executive 1 year 1 year Executive Vice
Vice President since
President October 1,1995;
President,
First National
Bank of Andrews
* The bank shown is a subsidiary of the Company.
</TABLE>
PAGE
<PAGE>
COMPENSATION OF OFFICERS
The following table provides individual compensation
information on the Chief Executive Officer and the four most
highly compensated officers of the Company and its subsidiaries.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compen-
Compen- sation
sation Awards
Number of All
Securities other
Underlying Compen-
Options sation
Name and Principal Position Year Salary($) (#) (1) ($) (2)
<S> <C> <C> <C> <C>
Kenneth T. Murphy, Chairman, 1995 $ 295,500 3,000 $ 18,143
President & CEO 1994 277,000 - 17,605
First Financial 1993 257,000 3,750 26,516
Bankshares, Inc.
F. Scott Dueser, 1995 173,250 2,000 20,397
President & CEO 1994 168,000 - 18,380
First National Bank 1993 151,250 2,500 18,382
of Abilene
Patrick N. Gerald, Chairman, 1995 137,500 1,000 19,561
President & CEO 1994 137,500 - 8,186
First National Bank, 1993 132,000 1,250 14,031
Sweetwater
Craig Smith, Chairman, 1995 132,000 1,000 19,700
President & CEO 1994 130,000 - 15,986
Hereford State Bank 1993 124,500 1,250 15,299
Curtis R. Harvey, Executive 1995 124,000 1,000 14,829
Vice President & CFO 1994 121,800 - 14,157
First Financial 1993 117,000 1,250 13,050
Bankshares, Inc.
(1) Adjusted for stock splits and stock dividends.
(2) The Company's contribution to Profit Sharing Plan.
</TABLE>
<PAGE>
COMPENSATION PURSUANT TO PLANS
General
Effective January 1, 1984, the Company adopted First Financial
Bankshares, Inc. Pension and Profit Sharing Plans, at which time
the authority for the Plans was placed under the Directors of the
Company. These Plans were previously under authority of the
Directors of First National Bank of Abilene as these plans had
originated through that bank. An employee is eligible to
become a participant in the Company Pension and Profit Sharing
Plans on January 1, coincident with or immediately following date
of employment. The Company and all of its then subsidiary banks
adopted a Flexible Spending Account Benefit Plan for all
employees that became effective in 1988. First National Bank in
Cleburne adopted all benefit plans effective in 1991.
Stephenville Bank & Trust Co. adopted all benefit plans effective
in 1993. Southwest Bank of San Angelo adopted the Pension and
Flexible Spending Account Benefit Plan effective in 1994 and
Profit Sharing Plan effective in 1995.
PAGE
<PAGE>
Profit Sharing Plan
Each participating employer (that is, the Company and each
subsidiary that has adopted the Plan) determines on an annual
basis the contribution that it will make to the Profit Sharing
Plan from such employer's operating profits. Contributions under
the Profit Sharing Plan are administered by an Administrative
Committee appointed by the Board of Directors of First Financial
Bankshares, Inc. for the exclusive benefit of Plan participants
under the provisions of a Trust Agreement. Under the Profit
Sharing Plan, eligible employees may contribute between 1% and 5%
of their eligible earnings, although contributions by employees
are not required as a condition of participation. Each
employer's annual contribution is allocated among the accounts of
the active Plan participants employed by such employer, in the
ratio that each participant's compensation bears to the total
compensation of all participants of such employer. Compensation
means the total amount paid to an employee during the year
including bonuses, commissions, and overtime pay, but excluding
reimbursed expenses, director fees, group insurance benefits and
pension and profit sharing contributions. Notwithstanding the
foregoing, the compensation amount used to calculate a
participant's benefit is limited by the IRS to a maximum of
$150,000. Additionally, the Annual Addition that may be
allocated to a participant is limited to $30,000.
Effective January 1, 1988, compensation also includes the amount
elected by an employee as salary reduction under the Flexible
Spending Account Benefit Plan.
The Profit Sharing Plan provides for benefits to vest (become
nonforfeitable) in graduated percentages for the first six (6)
years of participation, with benefits being fully vested after
seven (7) years of credited service. Generally, an employee's
benefit at normal retirement will be the contributions allocated
to his account while a participant, increased by gains and
decreased by losses from investments of the trust and increased
by any forfeitures allocated to his account. An employee is
always fully vested with respect to any voluntary contributions
he makes, and death or disability of a participant while employed
by the Company or one of its subsidiaries results in immediate
full vesting with respect to employer contributions. If a
participant terminates employment for any other reason,
the total amount of his employee contribution account and the
vested portion of his employer contribution account are
distributed to him.
Pension Plan
The Company's Pension Plan requires annual contributions
sufficient to provide the pension benefits accruing to employees
under the Plan. The annual benefit for a participant in the
Pension Plan who retires on his normal retirement date is the
Accrued Benefit at December 31, 1988, plus 1.25% of average
compensation multiplied by years of service from January
1, 1989. "Average Compensation" is the average compensation
during the 10 years immediately preceding the date of
determination. Compensation means the total amount paid to an
employee during the year including bonuses, commissions, and
overtime pay, but excluding reimbursed expenses, director fees,
group insurance benefits and pension and profit sharing
contributions. There are provisions in the Plan for early
retirement with reduced benefits. There is no vesting of Plan
benefits until a participant has 5 or more years of credited
service with participating employers. Full (100%)
vesting occurs upon the completion of 5 years of credited service
or upon reaching age 65 without regard to credited service.
The Company Pension Plan is subject to the minimum funding
requirements of the Employee Retirement Income Security Act of
1974 (ERISA) and there is no present funding deficiency.
Contributions to the Company Pension Plan for the past five years
(1991-1995) have been $99,602; $98,097; $162,052; $272,346;
and $533,411, respectively.
The following table illustrates estimated retirement benefits
under the Company Pension Plan for persons in specified
remuneration and years of service categories and which benefits
are payable annually for life with 10 years certain. The
benefits listed in the table are not subject to any deduction for
social security or other offset amounts. This illustration does
not reflect any benefit that a participant may have accrued at
December 31, 1988.
<PAGE>
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Years of Service
Remuneration 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$ 25,000 $ 4,688 $ 6,250 $ 7,813 $ 9,375 $ 10,938
50,000 9,375 12,500 15,625 18,750 21,875
75,000 14,063 18,750 23,438 28,125 32,813
100,000 18,750 25,000 31,250 37,500 43,750
125,000 23,438 31,250 39,063 46,875 54,688
150,000 28,125 37,500 46,875 56,250 65,625
The maximum annual pension benefit payable allowable under
current law is $120,000.
</TABLE>
<PAGE>
<PAGE>
As of December 31, 1995, Mr. Murphy was credited with 25 years
of service under the Company Pension Plan, Mr. Gerald was
credited with 20 years of service, Mr. Smith was credited with 26
years of service, Mr. Dueser was credited with 19 years of
service, and Mr. Harvey was credited with 5 years of
service. The covered compensation of each of these officers and
directors during 1995 was $150,000; $137,711; $132,591; $150,000;
and $125,746, respectively.
In 1992, the Board of Directors approved a deferred
compensation agreement between First Financial Bankshares, Inc.
and Kenneth T. Murphy, Chairman, President and Chief Executive
Officer. The agreement was made in recognition of his
contribution to the success of the Company and as an inducement
to remain, subject to the discretion of the Board of Directors,
in the employ of the Company. The agreement provided that
following retirement in December 2002, or such later date as may
be mutually agreed upon by the parties, the Company would pay Mr.
Murphy, or his beneficiary, the sum of $6,250 per month for a
period of 84 months. In 1995 the agreement was revised to
provide for the sum of $8,750 per month for a period of 84
months. The increase serves to offset the reduction in Mr.
Murphy's pension benefit resulting from a lower covered
compensation amount now allowable under Federal tax law.
The monthly amount is considered to be an appropriate level of
supplemental income to partially offset Mr. Murphy's reduction in
personal income following retirement and is based on an analysis
of the difference in projected final year compensation and
retirement compensation. The agreement also provides
for 70% vesting at age 62, 80% vesting at age 63, and 90% vesting
at age 64.
Flexible Spending Account Benefit Plan
Effective January 1, 1988, the Company and its subsidiaries
adopted a Flexible Spending Account Benefit Plan. An employee is
eligible to become a participant in this plan on the first day of
the month following completion of two months of service. The
Flexible Spending Account Benefit Plan allows each participant to
redirect a portion of his/her salary, before taxes, to pay
certain medical and/or dependent care expenses. This plan is
administered by the Administrative Committee appointed by the
Board of Directors of First Financial Bankshares, Inc.
STOCK OPTIONS
At the 1992 Annual Meeting, the "1992 Incentive Stock Option
Plan" was approved and adopted. The purposes of the Plan are to
attract and retain key employees and to encourage employee
performance by providing them with a proprietary interest in the
Company through the granting of stock options.
The maximum aggregate number of shares of the Company's common
stock that may be issued under the Plan is 100,000, subject to
adjustment for stock dividends and similar events. The 1992 Plan
includes substantially the same features as the expired 1982 Plan
and is administered by a Stock Option Committee appointed by the
Board of Directors. The following table contains information
concerning options granted during 1995 to the Company's chief
executive officer and four other most highly compensated
executive officers.
<PAGE>
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
% of
Total
Number Options
Of Granted
Securities to
Under- Employ-
lying ees Exercise
Options in or Base
Granted Fiscal Price Expiration
Name (#) (1)Year ($/Sh) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Kenneth T. Murphy 3,000 9.7% $32.00 10/17/05 $ 51,822 $ 139,382
F. Scott Dueser 2,000 6.5 32.00 10/17/05 34,548 92,921
Patrick N. Gerald 1,000 3.2 32.00 10/17/05 17,274 46,461
Craig Smith 1,000 3.2 32.00 10/17/05 17,274 46,461
Curtis R. Harvey 1,000 3.2 32.00 10/17/05 17,274 46,461
(1) Granted under incentive stock option plan.
</TABLE>
PAGE
<PAGE>
The following table contains information concerning each
exercise of stock options during the last fiscal year by each of
the persons named below and the fiscal year-end value of
unexercised options.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
Number of
Securities Value of
Underlying Unexercised
Number of Unexercised In-the-Money
Securities Options at FY- Options at
Underlying End(#)(1) FY-End($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized($)Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Kenneth T. Murphy 6,173 $ 112,161 3,500 $ 57,330
15,611 91,897
F. Scott Dueser - - 454 9,852
9,078 92,288
Patrick N. Gerald - - 681 14,778
4,993 50,754
Craig Smith 681 14,097 - -
6,025 61,244
Curtis R. Harvey 619 9,724 - -
3,487 22,037
(1) Adjusted for stock splits and other stock dividends.
</TABLE>
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person who served as a member of the Executive Committee
in its capacity as compensation committee was, during the past
fiscal year, an officer or employee of the Company or any of its
subsidiaries, or had any relationship requiring disclosure in
this Notice to Shareholders except for Mr. Tom Wilson, who is a
former subsidiary bank officer. However, committee members
Robert Hitt and James Parker did obtain loans from a subsidiary
bank during the past year. In each case, such loans were made in
the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons and did
not involve more than the normal risk of collectibility or
present other unfavorable features. No executive officer
of the Company served as a member of the compensation committee
(or other board committee performing equivalent functions or, in
the absence of any such committee, the entire Board of Directors)
of another entity, one of whose executive officers served as a
Director of the Company.
EXECUTIVE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During the past fiscal year the Company's executive
compensation program was administered by the Executive Committee
acting in the capacity of compensation committee. The Company's
executive compensation program consists of base salary, profit
sharing, and incentive stock options. With the exception of the
Chief Executive Officer, and Mr. Dueser whose salary is reviewed
in February and adjusted March 1, the base salaries for the
executive officers named on page 6 of this Notice are reviewed in
December of each year with adjustments made effective January 1.
Included among the factors that the committee considers when
approving annual base salaries are: attainment of planned goals
and objectives, scope of responsibility (asset size of subsidiary
bank and/or degree of influence on the Company's profitability
and operations), tenure with the Company, evaluation input from
subsidiary bank directors, and relationship of base salary to the
base salaries of other members of the executive officer group.
PAGE
<PAGE>
The base salary for Mr. Murphy was reviewed in March 1995
with an adjustment made effective April 1, 1995. The increase
was based on the following factors:
- The Company's financial performance for 1995.
- Performance of Chief Executive Officer's
duties that relate primarily to leading and
managing the Company within the broad
guidelines set by the Board of Directors.
- Base salary compared to SNL Securities, Inc.
compensation survey data for chief executive
officers of similar size organizations within
the industry.
- Subjective evaluations of Mr. Murphy's
contribution to the overall success of the
Company.
Stock options are granted under the Incentive Stock Option
Plan upon recommendation of the Stock Option Committee of the
Board of Directors. The Executive Committee believes that the
Stock Option Plan is an integral part of the executive
compensation program that encourages key employees to align
their long-range interest with those of shareholders by
accomplishing longer-term corporate goals.
Robert E. Hitt H.T. Wilson
James Parker
The line graph below compares cumulative total shareholder
return with a performance indication of the overall stock market,
the S&P 500 Stock Index, and a nationally-recognized banking
industry index, the Keefe, Bruyette and Woods, Inc. (KBW) 50
Total Return Index, which is comprised of fifty of the nation's
top banking companies.
The required performance graph is not included in this electronic
filing. The graph has been provided to shareholders of the
Company and has been filed separately in paper under cover of
Form SE to the Securities and Exchange Commission.
<PAGE>
PRINCIPAL SHAREHOLDERS OF FIRST FINANCIAL BANKSHARES, INC.
At December 31, 1995, management was not aware of any person
(including any "group" as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934) who is the beneficial
owner of more than five percent (5%) of the Company's common
stock. However, First National Bank of Abilene, First National
Bank, Sweetwater, and Stephenville Bank & Trust Co. held of
record in various fiduciary capacities an aggregate of 1,096,595
shares of such stock. Of the total shares held, these
subsidiaries of the Company had sole power to vote 527,905 shares
(10.5%), 79,260 shares (1.6%), and 1,125 shares ( - %),
respectively. In addition, First National Bank of Abilene
and First National Bank, Sweetwater, shared, with other persons,
the power to vote the remaining 485,252 shares and 3,052 shares,
respectively. All the shares held by each subsidiary bank, which
are registered in its name as fiduciary or in the name of its
nominee, are owned by many different accounts, each of which is
governed by a separate instrument that sets forth the powers of
the fiduciary with regard to the securities held in such
accounts.
INTEREST IN CERTAIN TRANSACTIONS
As has been true in the past, some of the Company's officers
and directors, members of their families, and other businesses
with which they are affiliated, are or have been customers of one
or more of the subsidiary banks of the Company (First National
Bank of Abilene, Abilene, Texas; Hereford State Bank, Hereford,
Texas; First National Bank, Sweetwater, Sweetwater, Texas;
Eastland National Bank, Eastland, Texas; First National Bank in
Cleburne, Cleburne, Texas; Stephenville Bank & Trust Co.,
Stephenville, Texas; Southwest Bank of San Angelo, San Angelo,
Texas). As customers, they have had transactions in the ordinary
course of business with such banks including borrowings, all of
which were on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for
comparable transactions with other persons and did not involve
more than a normal risk of collectibility or present any other
unfavorable features to the subsidiary banks involved. None of
the transactions involving subsidiary banks of the Company and
the Company's officers and directors, or other businesses with
which they may be affiliated, have been classified or disclosed
as nonaccrual, past due, restructured or potential problems.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the
next annual meeting, to receive consideration, must be submitted
in writing and delivered to the Company no later than December 1,
1996.
UNDERTAKING TO FURNISH INFORMATION
The Company will furnish a copy of its Annual Report for the
year 1995 on Form 10-K, including the financial statements and
schedules thereto required to be filed with the Securities and
Exchange Commission, without charge to any person whose proxy is
solicited herewith upon such person's written request therefor,
which request shall contain a good faith representation that, as
of the record date for the annual meeting of the Company's
shareholders, the person making the request was a beneficial
owner of securities entitled to vote at such meeting and such
request shall be addressed to Curtis R. Harvey, Executive Vice
President and Chief Financial Officer, First Financial
Bankshares, Inc., P.O. Box 701, Abilene, Texas 79604. Exhibits
to the 10-K Annual Report shall also be furnished upon the
payment of a specified reasonable fee, which fee shall be limited
to the Company's reasonable expenses in furnishing such exhibits.
OTHER BUSINESS
Management does not know of any other matters that are likely
to be brought before the meeting for action. However, if any
matters do properly come before the meeting, it is intended that
the enclosed proxy will be voted in accordance with the judgment
of the person voting the proxy.
By Order of the Board of Directors.
KENNETH T. MURPHY, Chairman
March 29, 1996
<PAGE>
1. Subsidiaries of Registrant.
<TABLE>
SUBSIDIARIES OF REGISTRANT
<CAPTION>
Place of Percentage of
Organization Voting
Name of Subsidiary Securities
Owned
<S> <C> <C>
First Financial Bankshares of Delaware 100%
Delaware, Inc.
Wilmington, Delaware
First Financial Investments, Inc. Texas 100%
Abilene, Texas
First National Bank of Abilene Texas 100%*<G1>
Abilene, Texas
Hereford State Bank Texas 100%*<G1>
Hereford, Texas
First National Bank Texas 100%*<G1>
Sweetwater, Texas
First National Bank Texas 100%*<G1>
Eastland, Texas
The First National Bank in Cleburne Texas 100%*<G1>
Cleburne, Texas
Stephenville Bank & Trust Texas 100%*<G1>
Stephenville, Texas
Southwest Bank Texas 100%*<G1>
San Angelo, Texas
<G1>* By First Financial Bankshares of Delaware, Inc.
All subsidiaries (other than First Financial Investments, Inc.
which, as of December 31, 1995 had not yet been formally
organized)are included in the consolidated financial statements.
</TABLE>
