<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
August 16, 1996
FORT BEND HOLDING CORP.
-----------------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
DELAWARE 0-21328 76-0391720
- ----------------------------- --------------------- -----------------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification Number)
3400 AVENUE H, ROSENBERG, TEXAS 77471-3808
- ---------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 342-5571
------------------------------------------------------------------------
------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired
<PAGE>
[COOPERS & LYBRAND LETTERHEAD APPEARS HERE]
FIRSTBANC SAVINGS ASSOCIATION OF TEXAS
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT ACCOUNTANTS
FOR THE YEARS ENDED APRIL 30, 1996 AND 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statement of Financial Condition as of April 30, 1996 and 1995 2
Statement of Income for the years ended April 30, 1996 and 1995 3
Statement of Changes in Stockholders' Equity for the years ended
April 30, 1996 and 1995 4
Statement of Cash Flows for the years ended April 30, 1996 and 1995 5
Notes to Financial Statements 6
</TABLE>
<PAGE>
[COOPERS & LYBRAND LETTERHEAD APPEARS HERE]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
FirstBanc Savings Association of Texas:
We have audited the accompanying statements of financial condition of
FirstBanc Savings Association of Texas (the "Association") as of April 30, 1996
and 1995 and the related statements of income, changes in stockholders' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Association'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. These 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.
As discussed in Note 17, in May 1996, the Association entered into an
agreement to be acquired by Fort Bend Holding Corp.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Association as of April
30, 1996 and 1995 and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
Houston, Texas
July 12, 1996
<PAGE>
FirstBanc Savings Association of Texas
Statement of Financial Condition
April 30, 1996 and 1995
<TABLE>
<CAPTION>
ASSETS 1996 1995
----------- -----------
<S> <C> <C>
Cash and cash equivalents $ 6,224,248 $ 1,246,934
Certificates of deposit 199,641
Investment securities held to maturity 989,091
Mortgage-backed securities held to maturity 4,512,103
Mortgage loans held for sale 259,096 339,050
Loans receivable, net 22,810,780 26,615,017
Office premises and equipment, net 608,083 624,348
Accrued interest receivable 239,693 334,037
Real estate owned 735,879 210,830
Federal Home Loan Bank stock, at cost 364,300 342,000
Prepaid expenses and other assets 163,794 101,372
Income taxes receivable 21,585 40,911
Deferred income taxes 35,604 56,209
----------- -----------
Total assets $31,463,062 $35,611,543
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $28,095,387 $29,850,540
Borrowings 2,400,000
Advances from borrowers for taxes and insurance 93,454 125,429
Accrued interest payable 68,482 90,727
Other liabilities 124,659 172,475
----------- -----------
Total liabilities 28,381,982 32,639,171
----------- -----------
Commitments and contingencies
Stockholders' equity:
Common stock, $5.00 par value, 500,000 shares authorized
300,000 shares issued and outstanding 1,500,000 1,500,000
Additional paid-in capital 1,725,000 1,725,000
Accumulated deficit (143,920) (252,628)
----------- -----------
Total stockholders' equity 3,081,080 2,972,372
----------- -----------
Total liabilities and stockholders' equity $31,463,062 $35,611,543
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
FirstBanc Savings Association of Texas
Statement of Income
for the years ended April 30, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Interest income:
Loans $2,542,579 $2,536,643
Investments 343,558 345,337
---------- ----------
Total interest income 2,886,137 2,881,980
---------- ----------
Interest expense:
Time deposits 933,318 850,621
Savings deposits 221,562 229,367
Demand deposits 66,564 69,714
Borrowed funds 44,822 43,986
---------- ----------
Total interest expense 1,266,266 1,193,688
---------- ----------
Net interest income 1,619,871 1,688,292
Provision for loan losses 144,000 51,206
---------- ----------
Net interest income after provision for loan losses 1,475,871 1,637,086
---------- ----------
Noninterest income:
Income from mortgage loan sales 109,180 131,227
Service fee income 183,366 165,322
Other income 157,298 19,586
---------- ----------
Total noninterest income 449,844 316,135
---------- ----------
Noninterest expense:
Personnel salaries and benefits 672,084 732,701
Occupancy 199,254 190,117
Deposit insurance premiums 76,748 80,934
Real estate owned 139,781 53,319
Other operating 676,712 762,069
---------- ----------
Total noninterest expense 1,764,579 1,819,140
---------- ----------
Income before income taxes 161,136 134,081
Income tax expense 52,428 46,353
---------- ----------
Net income $ 108,708 $ 87,728
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
FirstBanc Savings Association of Texas
Statement of Changes in Stockholders' Equity
for the years ended April 30, 1996 and 1995
<TABLE>
<CAPTION>
Unrealized
Common Stock Additional Loss on
---------------------- Paid-In Accumulated Available for
Shares Amount Capital Deficit Sale Securities Total
------- ---------- ----------- ----------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at April 30, 1994 300,000 $1,500,000 $1,725,000 $(340,356) $2,884,644
Net income 87,728 87,728
------- ---------- ---------- --------- ----------
Balance at April 30, 1995 300,000 1,500,000 1,725,000 (252,628) 2,972,372
Transfer of securities
held to maturity to
securities available for
sale; net of taxes of
$7,849 $ 15,236
Net change in unrealized
loss on securities
available for sale (15,236)
Net income 108,708 108,708
------- ---------- ---------- --------- --------- ----------
Balance at April 30, 1996 300,000 $1,500,000 $1,725,000 $(143,920) $ -- $3,081,080
======= ========== ========== ========= ========= ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
FirstBanc Savings Association of Texas
Statement of Cash Flows
for the years ended April 30, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Operating activities:
Net income $ 108,708 $ 87,728
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for losses on loans and real estate 268,736 82,376
Depreciation 89,467 80,329
Amortization of deferred fees, net 104,557 124,522
Amortization of premiums 15,596 22,448
Loss on sale of investment securities held for sale 37,834
Gain on sale of mortgage-backed securities held for sale (17,561)
Gain on sale of other assets (40,852)
(Gain) loss on sale of office premises and equipment (3,362) 6,988
Gain (loss) on sale of real estate owned (17,022) 21,529
Dividends on Federal Home Loan Bank stock (22,300) (17,500)
Deferred income tax expense 20,605 46,353
Decrease in mortgage loans held for sale 79,954 106,450
Decrease (increase) in accrued interest receivable 94,344 (106,246)
(Increase) decrease in prepaid expenses and other assets (82,949) 59,066
Decrease (increase) in income taxes receivable 19,326 (40,911)
(Decrease) increase in accrued interest payable (22,245) 24,942
Decrease in income taxes payable (24,318)
(Decrease) increase in other liabilities (47,816) 72,396
----------- -----------
Net cash provided by operating activities 585,020 546,152
----------- -----------
Cash flows from investing activities:
Decrease (increase) in loans receivable 2,623,351 (2,608,029)
Proceeds from sale of real estate owned 387,002 204,185
Purchases and improvements to real estate owned (87,436) (2,217)
Purchases of office premises and equipment (87,340) (37,934)
Proceeds from sale of office equipment 17,500
Proceeds from sale of investment securities held for sale 953,438
Purchases of mortgage-backed securities (1,967,364)
Proceeds from sales of mortgage-backed securities 3,984,392
Proceeds from sale of other assets 61,380
Principal payments on mortgage-backed securities 527,494 618,927
Maturities of certificates of deposit 199,641 594,000
----------- -----------
Net cash provided by (used by) investing activities 8,579,422 (3,198,432)
----------- -----------
Cash flows from financing activities:
Decrease in deposits (1,755,153) (1,946,716)
Decrease in advances from borrowers for taxes and insurance (31,975) (38,841)
(Decrease) increase in borrowings (2,400,000) 2,400,000
----------- -----------
Net cash provided by (used by) financing activities (4,187,128) 414,443
----------- -----------
Increase (decrease) in cash and cash equivalents 4,977,314 (2,237,837)
Cash and cash equivalents, beginning of year 1,246,934 3,484,771
----------- -----------
Cash and cash equivalents, end of year $ 6,224,248 $ 1,246,934
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
FIRSTBANC SAVINGS ASSOCIATION OF TEXAS
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The accounting policies followed by FirstBanc Savings Association of Texas,
(the "Association"), are summarized below:
Nature of Operations
The Association is principally engaged in the business of attracting retail
deposits from the general public and investing those funds in first mortgage
single-family residential loans, residential construction loans and consumer
loans.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
Cash Equivalents
Cash equivalents include amounts due from other financial institutions,
federal funds sold, and short-term liquid investments with original maturities
of three months or less. Short term investments are carried at cost.
Securities
Investment and mortgage-backed securities held to maturity are carried at
cost and adjusted for amortization of premiums and accretion of discounts as
the Association has the intent and ability to hold them to maturity. Premiums
and discounts are amortized/accreted using the level-yield method.
Available for sale securities are carried at market value. Unrealized gains
and losses, net of tax, are recorded as a component of stockholders' equity.
Realized gains and losses on sales of securities, as determined on a specific
identification basis, are recognized in the statement of income as they occur.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. Summary of Significant Accounting Policies, continued:
Securities, continued
Transfers of securities between classifications are accounted for at fair
value. In November 1995, the Financial Accounting Standards Board issued "A
Guide to Implementation of Statement 115 on Accounting for Certain Investments
in Debt and Equity Securities" which provided a one-time opportunity to
reassess the appropriateness of the classification of all securities. Based on
such reassessment, all investment securities and mortgage-backed securities
with an aggregate amortized cost and unrealized loss of approximately
$5,085,000 and $23,000, respectively, classified as held-to-maturity were
transferred to the available for sale classification on December 31, 1995. The
unrealized loss at the date of transfer was recorded, net of tax, as a
component of stockholders' equity.
Securities Sold Under Agreements to Repurchase
The Association enters into sales of securities under agreements to
repurchase (reverse repurchase agreements). Fixed coupon reverse repurchase
agreements are treated as financing arrangements, and obligations to repurchase
securities sold are reflected as a liability in the statement of financial
condition. The dollar amounts of securities underlying the agreements are
recorded in the respective asset accounts.
Mortgage Loans Held for Sale
Mortgage loans originated and intended for sale in the secondary market are
carried at the lower of cost or estimated market value in the aggregate.
Market value is determined based upon the contractual sales price. Net
unrealized losses are recognized in a valuation allowance by charges to income.
If loans receivable are transferred to loans held for sale, the lower of cost
or market is applied immediately.
Loans Receivable
Loans are stated at the amount of unpaid principal balances, net of the
allowance for loan losses, undisbursed portion of loans and deferred loan fees.
The allowance for loan losses is increased by charges to income and decreased
by charge-offs (net of recoveries).
Accrual of interest is discontinued on a loan when management believes,
after considering economic and business conditions and collection efforts, that
the borrower's financial condition is such that collection of interest is
doubtful. Interest income on such loans is then recognized only to the extent
that cash is received and where the future collection of principal is
probable.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. Summary of Significant Accounting Policies, continued:
Allowance for Loan Losses
The Association adopted Statement of Financial Accounting Standards No. 114
("SFAS 114"), "Accounting by Creditors for Impairment of a Loan" as of May 1,
1995. Under SFAS 114, a loan is considered impaired, based on current
information and events, if it is probable that the Association will be unable
to collect the scheduled payments of principal or interest when due according
to the contractual terms of the loan agreement. The measurement of impaired
loans and related allowance for loan losses is based on the present value of
expected future cash flows discounted at the loan's effective interest rate or
based on the fair value of the collateral if the loan is collateral dependent.
As permitted by SFAS 114, smaller-balance homogenous loans consisting of
residential mortgages and consumer loans are evaluated for reserves
collectively based on historical loss experience. The adoption of SFAS 114 had
no material impact on the Association's financial statements as the
Association's existing policy of measuring loan impairment was generally
consistent with methods prescribed by SFAS 114.
The allowance for loan losses represents management's best estimate of
future losses which may be sustained when existing loans become due, based upon
past loan loss experience, known and inherent risks in the portfolio, adverse
situations that may affect the borrower's ability to repay, the estimated value
of any underlying collateral, and current economic conditions. Because of
changing economic conditions, the valuations determined from such estimates and
appraisals may also change. Accordingly, losses may ultimately be incurred in
amounts different from management's current estimates. Additionally, the
Association is subject to regulatory examinations and may be directed to record
loss allowances by regulatory authorities. Adjustments to the allowance for
estimated losses will be reported in the period such adjustments become known
or are reasonably estimable.
The allowance for loan losses is established through charges to operations
in the form of a provision for loan losses. Increases and decreases in the
allowance due to changes in the measurement of the impaired loans are included
in the provision for loan losses. Loans continue to be classified as impaired
unless they are brought fully current and the collection of scheduled interest
and principal is considered probable. When a loan is determined to be
uncollectible, the portion deemed uncollectible is charged against the
allowance and subsequent recoveries if any are credited to the allowance.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. Summary of Significant Accounting Policies, continued:
Loan Origination Fees, Commitment Fees and Related Costs
Loan fees and certain direct loan origination costs are deferred, and the
net fee or cost is recognized as an adjustment to interest income using a
method which approximates the level-yield method over the contractual life of
the loans, adjusted for estimated prepayments based on the Association's
historical prepayment experience. Commitment fees and costs relating to
commitments, the likelihood of exercise of which is remote, are recognized over
the commitment period on a straight-line basis. If the commitment is
subsequently exercised during the commitment period, the remaining unamortized
commitment fee at the time of exercise is recognized over the life of the loan
as an adjustment of yield.
Office Premises and Equipment
Office premises and equipment are stated at cost less accumulated
depreciation. For financial accounting purposes, depreciation is provided
using the straight-line method over the estimated useful lives of the assets,
which range from three to twenty years. Maintenance, repairs and minor
replacements are expensed when incurred. The cost and accumulated depreciation
relating to assets retired or otherwise disposed of are eliminated from the
accounts, and any resultant gains or losses are credited or charged to
operations.
Real Estate Owned
Real estate properties acquired through, or in lieu of, loan foreclosure are
initially recorded at the lower of the outstanding loan balance or fair value.
Subsequent to foreclosure, real estate owned is carried at the lower of the
property's new basis or its fair value less estimated selling costs. Costs
related to development or improvement of properties are capitalized as
incurred, provided that such costs do not cause the carrying value of the
property to exceed the fair value. Costs related to the holding of the
property are expensed. Losses upon foreclosure are charged to the allowance
for loan losses. Valuation adjustments subsequent to foreclosure are charged
to expense through the establishment of a valuation reserve.
Income Taxes
Deferred income taxes are recognized for the tax consequences in future
years of differences between the tax bases of assets and liabilities and their
financial reporting amounts at each year-end based on enacted tax laws and
statutory tax rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
Income tax expense includes the tax payable for the period and the change
during the period in deferred tax assets and liabilities.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. Summary of Significant Accounting Policies, continued:
Impact of New Accounting Standards
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of "
("SFAS 121"). The Association is required to adopt SFAS 121 on May 1, 1996.
Management has determined the adoption of SFAS 121 will not have a material
impact on the Association's financial position, results of operations or cash
flows.
In May 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 122, "Accounting for Mortgage Servicing
Rights ("SFAS 122"). SFAS 122 amends SFAS 65, "Accounting for Certain Mortgage
Banking Activities", to require that a mortgage banking enterprise recognize as
separate assets rights to service mortgage loans for others, however those
servicing rights are acquired. The Association is required to adopt SFAS 122
on May 1, 1996. Management has determined the adoption of SFAS 122 will not
have a material impact on the Association's financial position, results of
operations or cash flows.
2. Investment Securities:
The carrying value and estimated market value of investment securities,
consisting of U.S. Government and agency obligations, are as follows:
April 30, 1995
-----------------------------------------
Gross Unrealized Estimated
Amortized ------------------ Market
Cost Gains Losses Value
---------- ------ ------- ---------
Held to maturity $989,091 $ $81,891 $907,200
The Association held no investment securities at April 30, 1996.
Proceeds from sales of investment securities during 1996 were $953,438 and
gross losses of $37,834 were realized on those sales during the year. There
were no sales of investment securities during 1995.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. Mortgage-Backed Securities:
The amortized cost and estimated market value of mortgage-backed securities
are as follows:
<TABLE>
<CAPTION>
April 30, 1995
-----------------------------------------------
Gross Unrealized Estimated
Amortized ------------------- Market
Cost Gains Losses Value
---------- ------ ------- -----------
<S> <C> <C> <C> <C>
FNMA certificates $1,457,068 $ $ (80,082) $1,376,986
FHLMC certificates 3,055,035 (49,734) 3,005,301
---------- -------- --------- ----------
Total mortgage-backed
securities $4,512,103 $ $(129,816) $4,382,287
========== ======== ========= ==========
</TABLE>
The Association held no mortgage-backed securities at April 30, 1996.
Proceeds from sales of mortgage-backed securities during 1996 were
$3,984,392 and gross gains and losses of $65,682 and $48,121, respectively,
were realized on those sales during the year. There were no sales of
mortgage-backed securities during 1995.
4. Loans Receivable:
Loans by major category at April 30, 1996 and 1995 are summarized as follows:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Commercial loans $ 244,185 $ 244,328
Consumer loans 974,486 1,390,052
Mortgage loans (approximately $9.2 million and $9.0
million, respectively, are single family residential) 11,848,473 14,497,181
Construction loans 14,238,730 15,613,825
----------- -----------
27,305,874 31,745,386
Less:
Undisbursed portion of loans 4,064,589 4,804,158
Allowance for loan losses 337,555 201,193
Deferred loan fees, net of related costs 92,950 125,018
----------- -----------
Total loans, net $22,810,780 $26,615,017
=========== ===========
</TABLE>
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans Receivable, continued:
Changes in the allowance for loan losses for the years ended April 30, 1996
and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
-------- ---------
<S> <C> <C>
Balance, beginning of year $201,193 $ 494,175
Provision charged to income 144,000 51,206
Charge-offs and recoveries, net (7,638) (344,188)
-------- ---------
Balance, end of year $337,555 $ 201,193
======== =========
</TABLE>
The Association originates construction, residential, commercial and
consumer loans primarily to customers in the greater Houston, Texas area and,
accordingly, a substantial portion of its debtors' ability to honor their
contracts is dependent upon the local Houston economy and real estate market.
The Association evaluates each customer's credit worthiness on a case-by-case
basis. The amount of collateral obtained, if deemed necessary upon extension
of credit, is based on management's credit evaluation of the counterparty.
Collateral obtained upon funding of the commitment consists primarily of
residential and commercial real estate.
Nonaccrual loans for which interest has been reduced totaled approximately
$1,167,000 at April 30, 1995. Interest income which has not been recognized as
a result of such loans totaled approximately $28,000 at April 30, 1995. There
were no nonaccrual loans at April 30, 1996.
Restructured loans totaled approximately $931,000 and $1,106,000 at April
30, 1996 and 1995, respectively. If interest on restructured loans had been
recognized at the original rates, interest income would have been increased by
approximately $2,200 and $23,000 for the years ended April 30, 1996 and 1995,
respectively. Interest income related to the restructured loans amounted to
approximately $89,000 and $99,000 for the years ended April 30, 1996 and 1995,
respectively. There are no commitments to lend additional funds to borrowers
whose loans have been restructured.
The following table summarizes impaired loan information at April 30, 1996:
Impaired loans $999,158
Impaired loans for which no specific reserve
is required under SFAS 114 999,158
The allowance for loan losses related to impaired loans totaled
approximately $50,000 at April 30, 1996. The average recorded investment on
impaired loans during the year was approximately $887,000 and $89,000 of
interest income on impaired loans was recognized using the cash basis method
during 1996.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. Loans Receivable, continued:
In the normal course of business, the Association has outstanding
commitments to extend credit which are not reflected in the financial
statements. Officials of the Association do not anticipate losses as a result
of these transactions. The Association had outstanding unfunded loan
commitments or lines of credit totaling $1,339,880 and $2,884,384 at April 30,
1996 and 1995, respectively, substantially all of which are construction loan
related.
5. Office Premises and Equipment:
Office premises and equipment at April 30, 1996 and 1995 are summarized as
follows:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Land $ 218,907 $ 218,907
Drive-in facilities and improvements 333,326 333,326
Furniture and equipment 673,027 612,345
---------- ----------
1,225,260 1,164,578
Less accumulated depreciation 617,177 540,230
---------- ----------
$ 608,083 $ 624,348
========== ==========
</TABLE>
Depreciation expense on office premises and equipment was $89,467 and
$80,329 for the years ended April 30, 1996 and 1995, respectively.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
6. Real Estate Owned:
Real estate owned at April 30, 1996 and 1995 is summarized as follows:
<TABLE>
<CAPTION>
1996 1995
--------- --------
<S> <C> <C>
Real estate acquired in settlement of loans:
Single family residential properties $469,958 $210,830
Commercial property 265,921
-------- --------
$735,879 $210,830
======== ========
</TABLE>
Changes in the allowance for real estate losses for the years ended April
30, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
--------- --------
<S> <C> <C>
Balance, beginning of year $ -- $ 11,958
Provision charged to operations 124,736 31,170
Losses charged against allowance (124,736) (43,128)
--------- --------
Balance, end of year $ -- $ --
========= ========
</TABLE>
The Association has entered into a contract for the sale of its commercial
real estate property. The sale was scheduled to close on June 30, 1996;
however, closing has been postponed due to a dispute regarding easement access.
The ultimate outcome of the dispute and the effect, if any, on the carrying
value of the property cannot be determined.
7. Deposits:
Deposits at April 30, 1996 and 1995 are summarized as follows:
<TABLE>
<CAPTION>
RATE AT
APRIL 30,
ORIGINAL MATURITY 1996 1996 1995
------------------- ----------- ----------- -----------
<S> <C> <C> <C>
Interest-bearing demand and savings
account $10,440,969 $11,322,257
Certificates of deposit:
7 - 89 days 3.36% 33,081 87,698
90 - 179 days 3.94%-4.52% 616,744 625,705
180 - 364 days 4.5%-5.67% 1,369,721 2,137,142
1 - 2 years 3.94%-6.95% 6,459,929 9,297,140
Greater than two years 4.25%-9.00% 6,895,430 4,742,681
----------- -----------
Total interest-bearing deposits 25,815,874 28,212,623
Demand deposits 2,279,513 1,637,917
----------- -----------
Total deposits $28,095,387 $29,850,540
=========== ===========
</TABLE>
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
7. Deposits, continued:
The aggregate amount of short-term certificates of deposit with a minimum
denomination of $100,000 was approximately $2,901,000 and $1,777,000 at April
30, 1996 and 1995, respectively.
The weighted average stated interest rates for all deposits was 4.38% and
3.62% at April 30, 1996 and 1995, respectively.
8. Borrowings:
Borrowings at April 30, 1995 consist of $2,400,000 of securities sold under
agreements to repurchase with the Federal Home Loan Bank of Dallas. These
agreements matured in May 1995 and had a stated interest rate of 5.98%. These
agreements were collateralized by certain mortgage-backed securities which were
maintained in safekeeping by the Federal Home Loan Bank of Dallas. There were
no securities sold under agreements to repurchase at April 30, 1996.
9. Income Taxes:
The types of temporary differences between the tax bases of assets and
liabilities and their financial reporting amounts that give rise to a
significant portion of the deferred tax asset and liability and their
approximate tax effects are as follows:
<TABLE>
<CAPTION>
April 30, 1996 April 30, 1995
---------------------------- -----------------------------
Temporary Tax Temporary Tax
Difference Effect Difference Effect
---------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Allowance for loan losses $337,555 $114,768 $201,193 $ 68,405
Investment securities 14,427 4,905
Alternative minimum tax credit
carryforward 13,999 41,636
Net operating losses 177,053 60,198
-------- -------- -------- ---------
Deferred tax assets $337,555 128,767 $392,673 175,144
======== -------- ======== ---------
Accumulated depreciation $ 99,048 (33,676) $119,747 (40,714)
Tax reserve for loan losses 155,654 (52,923) 188,249 (64,005)
Conversion from cash to accrual
accounting 34,148 (11,610)
Prepaid insurance 19,307 (6,564) 7,665 (2,606)
-------- -------- -------- ---------
Deferred tax liabilities $274,009 (93,163) $349,809 (118,935)
======== -------- ======== ---------
Net deferred tax asset $ 35,604 $ 56,209
======== =========
</TABLE>
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
9. Income Taxes, continued:
The components of federal income tax expense are as follows:
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Current $31,823
Deferred 20,605 $46,353
------- -------
$52,428 $46,353
======= =======
</TABLE>
Total income tax expense differed from the amounts computed by applying the
federal statutory rate to pre-tax income as follows:
<TABLE>
<CAPTION>
1996 1995
-------- -------
<S> <C> <C>
Tax expense computed by applying the federal
statutory rate $54,786 $45,588
Over accrual of taxes in prior years (2,921)
Other 563 765
------- -------
Total income tax expense $52,428 $46,353
======= =======
</TABLE>
The Association had alternative minimum tax credit carryforwards of
approximately $14,000 at April 30, 1996 that may be carried forward
indefinitely to reduce future income taxes in years when the Association's
regular income tax exceeds its alternative minimum tax.
10. Related Party Transactions:
In the normal course of business, the Association enters into loans and
other transactions with officers, directors, and other related parties. Loans
outstanding to employees, officers, directors, and their affiliated entities
totaled approximately $480,000 and $619,000 as of April 30, 1996 and 1995,
respectively. Funds on deposit from employees, officers, directors and their
affiliated entities approximated $348,000 and $428,000 as of April 30, 1996 and
1995, respectively. Payment for services to directors and their affiliated
entities totaled approximately $23,000 and $91,000 during the years ended April
30, 1996 and 1995, respectively.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
11. Employee Stock Ownership Plan:
During the year ended April 30, 1988, the Association established a
leveraged Employee Stock Ownership Plan (ESOP) for the benefit of its
employees. A trust was formed for the ESOP which was administered by an
Administrative Committee designated by the board of directors. The ESOP
purchased (or expected to purchase) shares of the Association's common stock
with borrowed funds. These borrowings were collateralized by the Association's
common stock and guaranteed by certain stockholders of the Association. The
Association was committed to make future contributions to the ESOP sufficient
to meet future principal and interest payments and thus reported the unpaid
balance of these borrowings as a liability and a deduction from stockholders'
equity.
During the fiscal year ended April 30, 1994, at the direction of the
Association's regulatory authorities a new trustee was appointed for the ESOP
and certain directors paid $363,979 to the ESOP to purchase Association stock
owned by the ESOP, enabling it to pay off all outstanding debt and eliminate
any future obligation of the Association to buy stock back from the ESOP.
During the fiscal year ended April 30, 1995, the ESOP made application to the
Internal Revenue Service ("IRS") to terminate the plan and approval for the
termination was received during the fiscal year ended April 30, 1996. As of
April 30, 1996, all remaining funds of the ESOP were disbursed to the qualified
employees. The Association is indemnified by a former officer and director for
certain expenses, including taxes, that may be incurred as a result of the IRS
review of the plan for termination.
12. Employee Benefit Plan:
A profit sharing plan covering substantially all employees has been
established which is a qualified plan under Section 401(k) of the Internal
Revenue Code. Contributions to the profit sharing plan are determined by the
board of directors. Employees may also make contributions to the profit
sharing plan based upon a percentage of qualified compensation in accordance
with the Internal Revenue Service rules and regulations. Contributions made to
the plan by the Association were $5,828 and $8,024 for 1996 and 1995,
respectively.
13. Fair Value of Financial Instruments:
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments" ("SFAS 107") requires all entities to disclose
the estimated fair value of certain on- and off-balance sheet financial
instruments.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair Value of Financial Instruments, continued:
In many instances, the assumptions used in estimating fair values were based
upon subjective assessments of market conditions and perceived risks of the
financial instruments at a certain point in time. The fair value estimates can
be subject to significant variability with changes in assumptions.
Furthermore, these fair value estimates do not reflect any premium or discount
that could result from offering for sale at one time the Association's entire
holdings of a particular financial instrument, nor are the tax ramifications
related to the realization of unrealized gains and losses permitted to be
considered in the estimation of fair value. In addition, fair value estimates
are based solely on existing on- and off-balance sheet financial instruments
without attempting to estimate the value of anticipated future business and the
value of assets and liabilities that are not considered financial instruments.
Examples would include portfolios of loans serviced for others, investments in
real estate, premises and equipment, and deferred tax assets. Fair value
estimates, methods and assumptions are set forth below for the Association's
financial instruments.
Cash and Cash Equivalents
The carrying amount for cash and cash equivalents approximates the assets'
fair value because of the short maturity of those instruments.
Investment and Mortgage-Backed Securities
The fair value of long-term investments such as U.S. Government and agency
obligations and mortgage-backed securities is estimated based on bid prices
published in financial newspapers or bid quotations received from securities
dealers.
Loans
Fair values are estimated for portfolios of loans with similar financial
characteristics. Mortgage loans are segregated by type, including but not
limited to residential, commercial and construction. Consumer loans are
segregated by type, including but not limited to home improvement loans,
automobile loans, loans secured by deposits and secured and unsecured personal
loans. Each loan category may be segmented, as appropriate, into fixed and
adjustable interest rate terms, ranges of interest rates, performing and
nonperforming, and repricing frequency.
For certain homogeneous categories of loans, such as some residential
mortgages, fair value is estimated using the quoted market prices for
securities backed by similar loans, adjusted for differences in loan
characteristics. The fair values of other types of loans are estimated by
discounting the future scheduled and unscheduled cash flows using the current
rates at which similar loans should be made to borrowers with similar credit
ratings and for the same remaining maturities. Unscheduled cash flows take the
form of estimated prepayments and may be based upon historical experience as
well as anticipated experience derived from current and prospective economic
and interest rate environments. For certain types of loans, anticipated
prepayment experience exists in published tables from securities
dealers.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair Value of Financial Instruments, continued:
Loans, continued
The fair value of significant nonperforming mortgage loans is based on
estimated value of the collateral. Where appraisals are not available,
estimated cash flows are discounted using a rate commensurate with the credit
risk associated with those cash flows. Assumptions regarding credit risk, cash
flows and discount rates are judgmentally determined using available market
information and specific borrower information. The fair value of nonperforming
consumer loans is based on historical experience with such loans.
The fair value of loans held for sale is estimated based on outstanding
commitments from investors or current market prices for similar loans.
Federal Home Loan Bank Stock
The fair value of stock in the Federal Home Loan Bank of Dallas is estimated
to be equal to its carrying amount given it is not a publicly traded equity
security, it has an adjustable dividend rate, and transactions in the stock
have been executed at the stated par value.
Deposits and Advances from Borrowers for Taxes and Insurance
The fair value of deposits with no stated maturity, such as interest-bearing
or non-interest-bearing checking accounts, passbook and statement savings
accounts, money market accounts and advances from borrowers for taxes and
insurance is equal to the amount payable upon demand. The fair value of
certificates of deposit is based on the lower of redemption or discounted value
of contractual cash flows. Discount rates for certificates of deposit are
estimated using current market rates.
Borrowings
Borrowings consist of securities sold under agreements to repurchase with
the Federal Home Loan Bank of Dallas. The estimated fair value of securities
sold under agreements to repurchase approximates carrying value because of the
short maturity of these instruments.
Off-Balance Sheet Financial Instruments
The fair value of commitments to extend credit is estimated using the fees
currently charged to enter into similar agreements, taking into account the
remaining terms of the agreements and the present creditworthiness of the
counterparties. For fixed-rate loan commitments, fair value also considers the
difference between current levels of interest rates and the committed rates.
The fair value of guarantees and letters of credit is based on fees currently
charged for similar agreements or on the estimated cost to terminate them or
otherwise settle the obligations with the counterparties at the reporting date.
The fair value of off-balance sheet financial instruments is estimated to
equal the carrying amount at April 30, 1996.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
13. Fair Value of Financial Instruments, continued:
Nonfinancial Instruments
SFAS 107 does not permit financial institutions to take into account the
value of long-term relationships with depositors, commonly known as core
deposit intangibles, when estimating the fair value of deposit liabilities.
These intangibles are considered to be separate intangible assets that are not
financial instruments. Nonetheless, financial institutions' core deposits have
typically traded at premiums to their book values under both historical and
current market conditions.
Likewise, SFAS 107 does not permit financial institutions to take into
account the value of the cash flows and income stream derived from its
portfolio of loans serviced for others.
The carrying values and estimated fair values of financial instruments, all
of which are held for purposes other than trading, at April 30, 1996 are as
follows:
<TABLE>
<CAPTION>
Carrying Estimated
Value Fair Value
<S> <C> <C>
Financial assets:
Cash and cash equivalents $ 6,224,248 $ 6,224,248
Loans held for sale 259,096 259,096
Loans receivable, net 22,810,780 23,503,000
Federal Home Loan Bank stock 364,300 364,300
Financial liabilities:
Deposits 28,095,387 28,081,000
Advances from borrowers for taxes and
insurance 93,454 93,454
</TABLE>
14. Regulatory Capital Requirements:
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") established new regulatory capital guidelines which require the
Association to maintain minimum levels of capital under three different
standards: tangible capital, core capital and risk-based capital. The
following table sets forth the regulatory capital position of the Association
at April 30, 1996.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
14. Regulatory Capital Requirements, continued:
<TABLE>
<CAPTION>
Core Tangible Risk-Based
---------- ---------- ------------
<S> <C> <C> <C>
Net worth per the financial statements $3,081,080 $3,081,080 $3,081,080
Additional capital items:
General valuation allowance limited 275,636
Regulatory capital 3,081,080 3,081,080 3,356,716
Minimum required capital 944,423 944,423 1,769,103
Excess capital 2,136,657 2,136,657 1,587,613
Capital ratios:
Required as of April 30, 1996 3.0% 3.0% 8.0%
Actual 9.8% 9.8% 15.22%
</TABLE>
The regulatory authorities for banks have issued capital leverage ratio
guidelines in connection with their risk-based capital requirements. The
leverage ratio is composed of core capital measured as a percent of average
total assets. The minimum leverage ratio for all banks is 3%, with a higher
minimum ratio (4-5%) dependent upon the macro rating of the bank given by the
regulatory authorities after their examination. Under the provisions of
FIRREA, the capital requirement for savings institutions may not be any less
stringent than those requirements for national banking institutions.
The Association has entered into a Supervisory Agreement with the Office of
Thrift Supervision ("OTS"). The Supervisory Agreement requires the Association
to reduce, by no later than December 31, 1996, its classified assets to a level
of 50% of its core capital plus its allowance for loan losses, requires OTS
approval of new officers and directors, requires OTS approval of increases in
total assets or liabilities during any calendar quarter in excess of the amount
of interest credited on deposits for that calendar quarter and requires
submission of a business plan for approval by the OTS. Management believes the
Association has complied with the terms of the Supervisory Agreement.
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
15. Lease Commitments:
The Association has an operating lease for its office space. The primary
lease term expired June 30, 1996 and contained two five-year renewal options.
The renewal options call for monthly payments at the then prevailing market
rates. The first renewal option was executed on January 1, 1996 and the
renewal term expires on June 30, 2001. The minimum lease payments for fiscal
years subsequent to April 30, 1996 are as follows:
1997 $113,318
1998 114,021
1999 114,021
2000 114,021
2001 114,021
--------
$569,402
--------
Rent expense was approximately $109,000 for the years ended April 30, 1996
and 1995.
16. Supplemental Cash Flow Disclosures:
The following is information related to noncash investing activities:
1996 1995
-------- --------
Real estate acquired by foreclosure $932,329 $250,962
Loans originated related to sales of real estate -- 374,400
Cash paid for interest amounted to approximately $1,244,000 and $1,169,000
for 1996 and 1995, respectively. Cash paid for income taxes was $33,295 and
$67,650 in 1996 and 1995, respectively.
17. Subsequent Event:
On May 10, 1996, the Association entered into an agreement to be acquired by
Fort Bend Federal Holding Corp. for approximately $4.2 million in cash. The
transaction is subject to satisfaction of certain contractual conditions to
closing and approval by the OTS and the Association's shareholders.
22
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS, continued
(b) Pro forma financial information.
<PAGE>
FORT BEND HOLDING CORP.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF FINANCIAL CONDITION
JUNE 30, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA COMBINED
FORT BEND ADJUSTMENTS PRO FORMA
HOLDING FIRSTBANC (REFLECTING (REFLECTING
CORP. (11) ACQUISITION) ACQUISITION)
----------- ----------- ------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 4,347 $ 7,775 $ 12,122
Short-term investments 7,051 $(4,234)(1) 2,817
Certificates of deposit 200 200
-------- ------- --------
TOTAL CASH AND CASH EQUIVALENTS 11,598 7,775 15,139
Investment securities available for sale,
at market value 2,705 2,705
Investment securities held to maturity 20,219 20,219
Mortgage-backed securities available for sale,
at market value 745 745
Mortgage-backed securities held to maturity 107,130 107,130
Loans receivable, net 101,509 20,571 218 (2) 122,298
Accrued interest receivable 1,549 1,549
Real estate, net 148 373 (86)(3) 435
Federal Home Loan Bank stock, at cost 1,481 370 1,851
Premises and equipment, net 3,850 607 83 (4) 4,540
Mortgage servicing rights, net 1,915 1,915
Prepaid expenses and other assets 1,890 313 (128)(1) 2,073
(2)(5)
Goodwill 1,337 (1) 1,337
-------- ------- ------ --------
TOTAL ASSETS $254,739 $30,009 $2,812 $281,936
======== ======= ====== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $204,875 $26,777 $ 126 (6) $231,778
Convertible Subordinated Debentures 12,100 12,100
Other borrowings 10,308 10,308
Advances from borrowers for taxes
and insurance 7,445 161 7,606
Accounts payable, accrued expenses
and other liabilities 2,003 67 66 (7) 2,136
-------- ------- --------
TOTAL LIABILITIES 236,731 27,005 263,928
-------- ------- --------
Stockholders' Equity:
Serial preferred stock, $.01 par value
- 500,000 shares authorized, none
outstanding
Common stock $.01 par value, 2,000,000 shares
authorized 907,372 shares issued and
819,198 shares outstanding 9 1,500 (1,500)(1) 9
Additional paid-in capital 8,581 1,725 (1,725)(6) 8,581
Unearned employee stock ownership plan shares
and deferred compensation (470) (470)
Net unrealized depreciation on available for
sale securities, net of tax (24) (24)
Retained earnings (substantially restricted) 11,369 (221) 221 (1) 11,369
Treasury stock, at cost - 88,174 shares (1,457) (1,457)
-------- ------- --------
TOTAL STOCKHOLDERS' EQUITY 18,008 3,004 18,008
-------- ------- ------ --------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $254,739 $30,009 $2,812 $281,936
======== ======= ====== ========
</TABLE>
<PAGE>
FORT BEND HOLDING CORP.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FISCAL YEARS ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FORT BEND FIRSTBANC PRO FORMA COMBINED
HOLDING (11) ADJUSTMENTS PRO FORMA
CORP. (REFLECTING (REFLECTING
ACQUISITION ACQUISITION
--------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans $ 7,375 $ 2,543 $ (27) (8) $ 9,891
Investment securities 1,323 343 1,666
Mortgage-backed securities 7,719 7,719
------- ------- ---------- -------
TOTAL INTEREST INCOME 16,417 2,886 (27) 19,276
------- ------- ---------- -------
INTEREST EXPENSE:
Deposits 9,294 1,221 (63) (9) 10,452
Borrowings 730 45 775
------ ------- ---------- -------
TOTAL INTEREST EXPENSE 10,024 1,266 (63) 11,227
------ ------- ---------- -------
NET INTEREST INCOME BEFORE PROVISION FOR
LOAN LOSSES 6,393 1,620 36 8,049
PROVISION FOR LOAN LOSSES 123 144 267
------ ------- --------- -------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 6,270 1,476 36 7,782
------ ------- --------- -------
NONINTEREST INCOME:
Gain on sale of loans 313 109 422
Service charges 322 183 505
Loan servicing income 546 546
Other income 924 158 1,082
------- ------- --------- -------
TOTAL NONINTEREST INCOME 2,105 450 2,555
------- ------- --------- -------
NONINTEREST EXPENSES:
Compensation and benefits 3,108 672 3,780
Office occupancy and equipment 657 199 856
Federal insurance premiums 465 77 542
Amortization of mortgage servicing rights 208 208
Insurance and surety bond expense 126 126
Other 1,211 817 89 (10) 2,117
------- ------- --------- -------
TOTAL NONINTEREST EXPENSES 5,775 1,765 81 7,629
------- ------- --------- -------
INCOME BEFORE INCOME TAX 2,600 161 (53) 2,708
INCOME TAX PROVISION 913 52 965
------- ------- --------- -------
NET INCOME $ 1,687 $ 109 $ (53) $ 1,743
======= ======= ========= =======
PRIMARY EARNINGS PER COMMON SHARE $ 1.94 0.36 $ 2.01
======= ======= =======
FULLY DILUTED EARNINGS PER COMMON SHARE $ 1.81 $ 0.36 $ 1.87
======= ======= =======
</TABLE>
<PAGE>
FORT BEND HOLDING CORP.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA COMBINED
FORT BEND ADJUSTMENTS PRO FORMA
HOLDING FIRSTBANC (REFLECTING (REFLECTING
CORP. (11) ACQUISITION) ACQUISITION)
--------- --------- ------------ ------------
INTEREST INCOME:
Loans $2,131 $ 671 $ (6) (8) $2,796
Investment securities 335 94 429
Mortgage-backed securities 1,829 1,829
------ ------ ---- ------
TOTAL INTEREST INCOME 4,295 765 (6) 5,054
------ ------ ---- ------
INTEREST EXPENSE:
Deposits 2,320 334 (16) (9) 2,638
Borrowings 330 330
------ ------ ---- ------
TOTAL INTEREST EXPENSE 2,650 334 (16) 2,968
------ ------ ---- ------
NET INTEREST INCOME
BEFORE PROVISION FOR
LOAN LOSSES 1,645 431 10 2,086
PROVISION FOR LOAN LOSSES 25 47 72
------ ------ ---- ------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,620 384 10 2,014
------ ------ ---- ------
NONINTEREST INCOME:
Gain on sale of loans 50 8 58
Service charges 113 12 125
Loan servicing income 170 2 172
Other income 279 50 329
------ ------ ---- ------
TOTAL NONINTEREST INCOME 612 72 684
------ ------ ---- ------
NONINTEREST EXPENSES:
Compensation and benefits 832 203 1,035
Office occupancy and
equipment 187 72 259
Federal insurance premiums 124 18 142
Amortization of mortgage
servicing rights 64 64
Insurance and surety
bond expense 34 7 41
Other 376 271 22 (10) 669
------ ------ ---- ------
TOTAL NONINTEREST EXPENSES 1,617 571 22 2,210
INCOME (LOSS) BEFORE
INCOME TAX 615 (115) (12) 488
INCOME TAX PROVISION
(BENEFIT) 209 (37) 172
------ ------ ---- ------
NET INCOME $ 406 $ (78) $(12) $ 316
====== ====== ==== ======
PRIMARY EARNINGS PER
COMMON SHARE $ 0.48 $(0.25) $ 0.38
====== ====== ======
FULLY DILUTED EARNINGS
PER COMMON SHARE $ 0.40 $(0.25) $ 0.34
====== ====== ======
<PAGE>
FORT BEND HOLDING CORP AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. To record the purchase of FirstBanc
2. Adjustment to reflect loans receivable at fair value
3. Adjustment to reflect real estate at fair value based on change in new
management's intent with respect to disposition of real estate.
4. Adjustment to reflect premises and equipment at fair value
5. Adjustment to record deferred tax effect of fair value adjustments
6. Adjustment to reflect deposits assumed at fair value
7. To record liabilities related to the acquisition, primarily employer
terminal costs
8. To record amortization of fair value adjustment on loans receivable
acquired over a five year period
9. To record amortization of fair value adjustment on deposits assumed over a
two year period
10. To record amortization of goodwill over a fifteen year period
11. FirstBanc had an April 30 fiscal year end. Accordingly, April 30 has been
used for March 31, and July 31 has been used for June 30.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS, CONTINUED
(c) Exhibits
2 Agreement and Plan of Merger, dated as of May 10, 1996, by and
among Fort Bend, The Association and FirstBanc (filed previously).
99 Press Release of Fort Bend, dated August 16, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
FORT BEND HOLDING CORP.
Date: October 28, 1996 By: /s/ LANE WARD
-----------------------------
Lane Ward
President and Chief
Executive Officer
