<PAGE>
FORM 11-K
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 33-39386
A. Full title of the plan and the address of plan, if different from that
of the issuer named below:
TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(including 401(k) provisions)
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
TEXAS REGIONAL BANCSHARES, INC.
3700 North 10th, Suite 301
McAllen, Texas 78501
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Required Information
Item 1 and 2. Financial Statements
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[KPMG LOGO]
TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
FINANCIAL STATEMENTS
AND SCHEDULES
DECEMBER 31, 1995 AND 1994
(WITH INDEPENDENT AUDITORS'
REPORT THEREON)
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INDEPENDENT AUDITOR'S REPORT
Administrative Committee
Texas Regional Bancshares, Inc.
Employee Stock Ownership Plan
(with 401(k) provisions):
We have audited the accompanying statement of net assets available for plan
benefits of Texas Regional Bancshares, Inc. Employee Stock Ownership Plan
(with 401(k) provisions) as of December 31, 1995 and the related statement of
changes in net assets available for plan benefits for the year ended December
31, 1995. These financial statements are the responsibility of the Plan
Administrator. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of Texas
Regional Bancshares, Inc. Employee Stock Ownership Plan (with 401(k)
provisions) as of December 31, 1994, and for the years ended December 31,
1994 and 1993, were audited by other auditors whose report thereon dated May
11, 1995, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by the Plan Administrator, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of Texas
Regional Bancshares, Inc. Employee Stock Ownership Plan (with 401(k)
provisions) as of December 31, 1995, and the changes in net assets available
for plan benefits for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The information contained in
Schedules 1 and 2 is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is 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 information in Schedules 1 and 2 has been subjected to the
auditing procedures applied in the audit of the basic statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
KPMG Peat Marwick LLP
March 29, 1996
Houston, Texas
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TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 1995 and 1994
<TABLE>
<CAPTION>
ASSETS 1995 1994
------ ---------- ---------
<S> <C> <C>
Investments, at fair value (note 3):
Certificates of deposit $ 371,313 232,552
U.S. government securities 1,251 26,561
Common stock 5,209,621 3,927,450
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Total investments 5,582,185 4,186,563
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Cash 370,415 147,614
Employer contributions receivable 495 79,214
Accrued interest receivable 2,541 891
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Net assets available for plan benefits $5,955,636 4,414,282
---------- ---------
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</TABLE>
See accompanying notes to financial statements.
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TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Years ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- --------- ---------
<S> <C> <C> <C>
Investment income:
Net appreciation in fair value of
investments (note 3) $1,432,110 173,072 862,037
Interest 19,906 10,478 10,913
Dividends 116,340 49,579 2,450
Employer contributions 526,115 463,115 570,859
Employee contributions 163,051 127,964 98,314
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Total additions 2,257,522 824,208 1,544,573
---------- --------- ---------
Depreciation in fair value of investments
(note 3) - 85 967
Realized loss on sale of U.S.
government securities - - 214
Administrative expenses - - 367
Benefits paid to participants 716,168 169,505 148,971
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Total deductions 716,168 169,590 150,519
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Net increase in net assets available
for plan benefits 1,541,354 654,618 1,394,054
Net assets available for plan benefits:
Beginning of year 4,414,282 3,759,664 2,365,610
---------- --------- ---------
End of year $5,955,636 4,414,282 3,759,664
---------- --------- ---------
---------- --------- ---------
</TABLE>
See accompanying notes to financial statements.
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TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
(1) DESCRIPTION OF THE PLAN
The following description of Texas Regional Bancshares, Inc.'s
(the Company) Employee Stock Ownership Plan (with 401(k) provisions)
(the ESOP or Plan) provides only general information. Participants
should refer to the plan agreement for a more complete description of
the Plan's provisions.
(a) GENERAL
The Texas Regional Bancshares, Inc. Employee Stock Ownership Plan
(with 401(k) provisions) is a defined contribution plan
established effective January 1, 1990 for eligible employees of
Texas Regional Bancshares, Inc. and its subsidiaries. The ESOP is
a complete amendment and restatement of the Texas Regional
Bancshares, Inc. Target Benefit Plan (the Target Benefit Plan), a
target benefit plan established effective January 1, 1984 for
eligible employees of the Company and its subsidiaries.
The Plan is a stock bonus plan containing Section 401(k) features
that is intended to qualify under Section 401(a) of the Internal
Revenue Code (the Code). The Plan is also designed to be an
employee stock ownership plan under Section 4975(e)(7) of the
Code. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974. All employees who participated in
the Company's Target Benefit Plan continue to participate in the
ESOP. Each other employee is eligible to participate in the ESOP
on January 1 or July 1 immediately following the completion of one
year of service, as defined in the Plan provided the employee has
attained the age of 21.
(b) CONTRIBUTIONS
A participant may authorize the Company and its subsidiary
(collectively referred to as Employer) to reduce his salary and
contribute to the 401(k) account an amount which shall not be less
than one (1) percent or more than fifteen (15) percent of the
participant's compensation. Such contributions when taken into
account with other employer contributions shall not exceed the
maximum deferral percentage computed in accordance with Internal
Revenue Code 401(k)(3).
The Employer may make a Discretionary Matching Contribution
(Matching Contribution), a Discretionary Basic Contribution
(Basic Contribution) and a Discretionary Optional Contribution
(Optional Contribution). All Employer Contributions shall be
determined at the sole discretion of the Board of Directors of
the Company.
A Matching Contribution may be made on behalf of each participant
up to a maximum of one hundred (100) percent of the participant's
salary reduction contribution. The maximum Matching Contribution
shall be based on a participant's salary reduction contribution;
however, the Matching Contribution shall not exceed four (4)
percent of a participant's compensation.
Contributions to the Plan are subject to limitations.
(Continued)
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2
TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
NOTES TO FINANCIAL STATEMENTS
(c) PARTICIPANT ACCOUNTS
Each participant's account is adjusted annually with the amount of
Employer contributions, participants' contributions, if any,
forfeitures and Plan earnings. Employer contributions and
forfeitures are allocated in proportion to the amount that each
participant's adjusted compensation, as defined, bears to the
aggregate of all participant's adjusted compensation at the
end of the plan year. The Basic Contribution, if any, is
allocated as of the anniversary date, defined as the 31st day of
December (last day of Plan year), among the participants in a
manner necessary to satisfy the nondiscrimination requirements of
the Code. Optional Contributions, if any, are allocated as of the
anniversary date in the ratio which the adjusted compensation of
each participant bears to the total adjusted compensation of all
participants for the Plan year.
(d) VESTING
Participants are immediately vested in their 401(k) contributions
and Employer Basic and Matching Contributions plus allocated
earnings thereon. Vesting in the remainder of their accounts is
based on years of service. A participant is 100 percent vested
after six years of service, upon death, upon reaching normal
retirement age or upon becoming disabled. The Plan is not
considered top heavy under the Internal Revenue Code Section 416.
(e) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has
the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA.
(f) PAYMENT OF BENEFITS
On termination of service, with the approval of the Administrative
Committee, a participant may elect to receive either a lump-sum
amount equal to the vested balance of the account, installments
certain not to exceed the greater of the life expectancy of the
participant or the joint lives and last survivor expectancies of
the participant and the participant's designated beneficiary, a
combination of the previous methods of payment or a joint and
survivor annuity.
(g) ADMINISTRATION AND TRUSTEES
The general administration of the Plan is performed by an
Administrative Committee appointed by the Board of Directors of
the Company. This administrator has broad powers regarding
supervision and administration of the Plan.
(Continued)
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3
TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
NOTES TO FINANCIAL STATEMENTS
Pursuant to the terms of the Plan, the Company's Board of
Directors has appointed three members to act on a Board of
Trustees. Among other duties, the Board of Trustees is
responsible for receiving and investing contributions, managing
investments, making payments to members in accordance with the
Plan and performing other actions as directed by the
administrator.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared on the accrual
basis of accounting.
INVESTMENTS
All of the investments of the Plan are held in trust by the Company and
the Federal Reserve and are stated at fair value. Unrealized
appreciation or depreciation in the fair value of investments held at
year-end and realized gain or loss on sales of investments during the
year are determined using the realized value at the beginning of the
year or cost if acquired since that date. Purchases and sales of
securities are recorded on a trade date basis. Interest income is
recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
TAX STATUS
The Plan obtained its latest determination letter on July 29, 1993, in
which the Internal Revenue Service stated that the plan, as then
designated, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. The Plan has not applied for a new determination
letter. The Plan administrator believes the Plan is currently designed
and operated in compliance with the applicable requirements of the
Internal Revenue Code. Therefore, they believe that the Plan was
qualified and tax exempt as of the financial statement date.
EXPENSES
All expenses incident to the administration of the Plan may be paid by
the Company and, if not paid by the Company, shall be paid by the Plan.
The Company elected to pay all expenses in the years ended December 31,
1995 and 1994.
(Continued)
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4
TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
NOTES TO FINANCIAL STATEMENTS
(3) INVESTMENTS COMPRISING AT LEAST 5% OF NET ASSETS AVAILABLE
FOR PLAN BENEFITS
The following individual investments comprised at least 5% of net
assets available for plan benefits at December 31, 1995.
<TABLE>
<CAPTION>
IDENTITY OF ISSUE, FAIR
BORROWER, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE
-------------------------- ------------------------- ---------- ----------
<S> <C> <C> <C>
Texas Regional Bancshares, Inc. Common stock, 302,007 shares,
$1 par value $2,570,421 $5,209,621
---------- ----------
---------- ----------
</TABLE>
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SCHEDULE 1
TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1995
<TABLE>
<CAPTION>
IDENTITY OF ISSUE, BORROWER, FAIR
LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE
---------------------------- ------------------------- ---------- ----------
<S> <C> <C> <C>
U.S. Government Securities:
Federal National Mortgage $1,212 par value, 8.5%,
Association due May 1, 1998 $ 1,226 1,251
Corporate stocks:
Texas Regional Bancshares, Inc. Common stock 302,007
shares, $1 par value 2,570,421 5,209,621
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$2,571,647 5,210,872
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</TABLE>
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SCHEDULE 2
TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
ITEM 27(d) SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
ADDITIONS DISPOSITIONS
----------------------------- ----------------------
NUMBER OF NUMBER OF SELLING
DESCRIPTION OF ASSET TRANSACTIONS PURCHASE PRICE TRANSACTIONS PRICE
-------------------- ------------ -------------- ------------ -------
<S> <C> <C> <C> <C>
Texas Regional Bancshares, Inc.
common stock 1 $12,753 - $ -
------------ -------------- ------------ -------
------------ -------------- ------------ -------
</TABLE>
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934,the trustee (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on in its behalf by the
undersigned hereunto duly authorized.
TEXAS REGIONAL BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(Including 401(k) provisions)
Date: 4-19-96 /s/ George R. Carruthers
----------------------------- --------------------------------------
George R. Carruthers
Member of Administrative Committee
<PAGE>
INDEX TO EXHIBITS FILED HEREWITH
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- ------- ------- ------------
<S> <C> <C>
1 Independent Accountants' Consent
</TABLE>
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INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Texas Regional Bancshares, Inc.
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Texas Regional Bancshares, Inc. (filed under Securities and
Exchange Commission File No. 33-39386) of our report dated March 29, 1996,
relating to the statement of net assets available for plan benefits of Texas
Regional Bancshares, Inc. Employee Stock Ownership Plan (with 401(k)
provisions) at December 31, 1995, the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1995,
which report appears in the December 31, 1995 annual report of Form 11-k of
Texas Regional Bancshares, Inc. Employee Stock Ownership Plan (with 401(k)
provisions).
KPMG Peat Marwick LLP
Houston, Texas
March 19, 1996
