FORT BEND HOLDING CORP, PRE 14A, 1997-06-09

FORT BEND HOLDING CORP
PRE 14A, 1997-06-09
SAVINGS INSTITUTION, FEDERALLY CHARTERED

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant X
---
Filed by a Party other than the Registrant
---
Check the appropriate box:

X Preliminary Proxy Statement
- ---
Confidential, for Use of the Commission Only (as permitted
- --- by Rule 14a-6(e)(2))

- --- Definitive Proxy Statement

- --- Definitive Additional Materials

- --- Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

FORT BEND HOLDING CORP.
- -------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

N/A
- -------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other
than Registrant)

Payment of Filing Fee (check the appropriate box):

X No fee required
- ---

- --- 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:
$_________________

5) Total fee paid:

- --- Fee paid previously with preliminary materials.

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>
<PAGE>

FORT BEND HOLDING CORP.
3400 Avenue H P.O. Box 951 ROSENBERG, TEXAS 77471 (281) 342-5571

June 25, 1997

Dear Fellow Stockholder:

On behalf of the Board of Directors and management of Fort Bend Holding
Corp. (the "Company"), we cordially invite you to attend the Annual Meeting of
Stockholders of the Company (the "Meeting"). The Meeting will be held at
2:00 p.m., local time, on July 29, 1997 at the Fort Bend Country Club, 2627
Farm to Market Road 762, Richmond, Texas.

An important aspect of the Meeting is the stockholder vote on corporate
business items. I urge you to exercise your rights as a stockholder to vote
and participate in this process. Stockholders are being asked to consider and
vote upon (i) the election of two directors of the Company; (ii) an amendment
to the Company's Certificate of Incorporation to increase the number of
authorized shares of common stock from 2,000,000 to 4,000,000, (iii) an
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of preferred stock from 500,000 to 1,000,000; (iv) an
amendment to the Company's 1993 Stock Option and Incentive Plan to increase
the number of shares of common stock reserved thereunder from 87,750 to
128,865; and (v) the ratification of the appointment of Coopers & Lybrand
L.L.P. as the Company's independent accountants. Your Board of Directors
unanimously recommends that you vote in favor of each proposal.

We encourage you to attend the Meeting in person. Whether or not you
plan to attend, however, please read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy and return it in the accompanying
postpaid return envelope as promptly as possible. This action will save the
Company additional expense in soliciting proxies and will ensure that your
shares are represented at the Meeting.

Thank you for your attention to this important matter.

Very truly yours,

ROBERT W. LINDSEY
Chairman of the Board

FORT BEND HOLDING CORP.
3400 Avenue H
Rosenberg, Texas 77471
(281) 342-5571

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on July 29, 1997

Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Fort Bend Holding Corp. (the "Company") will be held at the Fort
Bend County Club, 2627 Farm to Market Road 762, Richmond, Texas at 2:00 p.m.,
local time, on July 29, 1997.

A Proxy Card and a Proxy Statement for the Meeting are enclosed.

The Meeting is for the purpose of considering and acting upon:

1. The election of two directors of the Company;

2. The amendment of the Company's Certificate of Incorporation to
increase the number of authorized shares of common stock from
2,000,000 to 4,000,000;

3. The amendment of the Company's Certificate of Incorporation to
increase the number of authorized shares of preferred stock from
500,000 to 1,000,000;

4. The amendment of the Company's 1993 Stock Option and Incentive
Plan to increase the number of shares of common stock reserved
thereunder from 87,750 to 128,865;

5. The ratification of the appointment of Coopers & Lybrand L.L.P.
as independent accountants for the Company for the fiscal year
ending March 31, 1998;

and such other matters as may properly come before the Meeting, or any
adjournments or postponements thereof. The Board of Directors is not aware of
any other business to come before the Meeting.

Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned or postponed. Stockholders of record as of the close of business on
June 13, 1997 are the stockholders entitled to vote at the Meeting, and any
adjournments or postponements thereof. A complete list of stockholders
entitled to vote at the Meeting will be available at the main office of the
Company during the ten days prior to the Meeting, as well as at the Meeting.

You are requested to complete and sign the enclosed form of proxy which
is solicited on behalf of the Board of Directors, and to mail it promptly in
the enclosed envelope. The proxy will not be used if you attend and vote at
the Meeting in person.

By Order of the Board of Directors

Robert W. Lindsey
Chairman of the Board
Rosenberg, Texas
June 25, 1997

- -----------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED WITHIN THE UNITED STATES.
- -----------------------------------------------------------------------------
<PAGE>
<PAGE>

PROXY STATEMENT

FORT BEND HOLDING CORP.
3400 Avenue H
Rosenberg, Texas 77471
(281) 342-5571

ANNUAL MEETING OF STOCKHOLDERS
July 29, 1997

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Fort Bend Holding Corp. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company
(the "Meeting") which will be held at the Fort Bend County Club, 2627 Farm to
Market Road 762, Richmond, Texas on July 29, 1997, at 2:00 p.m., local time,
and all adjournments and postponements of the Meeting. The accompanying
Notice of Meeting and this Proxy Statement are first being mailed to
stockholders on or about June 25, 1997. Certain of the information provided
herein relates to Fort Bend Federal Savings and Loan Association of Rosenberg
("Fort Bend" or the "Association"), a wholly-owned subsidiary and predecessor
of the Company.

At the Meeting, stockholders of the Company are being asked to consider
and vote upon (i) the election of two directors of the Company; (ii) an
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of common stock from 2,000,000 to 4,000,000, (iii) an
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of preferred stock from 500,000 to 1,000,000; (iv) an
amendment to the Company's 1993 Stock Option and Incentive Plan to increase
the number of shares of common stock reserved thereunder from 87,750 to
128,865; and (v) the ratification of the appointment of Coopers & Lybrand
L.L.P. as the Company's independent accountants. Your Board of Directors
unanimously recommends that you vote in favor of each proposal.

Vote Required and Proxy Information

All shares of the Common Stock represented at the Meeting by properly
executed proxies received prior to or at the Meeting, and not revoked, will be
voted at the Meeting in accordance with the instructions thereon. If no
instructions are indicated, properly executed proxies will be voted for the
nominees and the adoption of the proposals set forth in this Proxy Statement.
The Company does not know of any matters, other than as described in the
Notice of Meeting, that are to come before the Meeting. If any other matters
are properly presented at the Meeting for action, the persons named in the
enclosed form of proxy and acting thereunder will have the discretion to vote
on such matters in accordance with their best judgment.

Directors shall be elected by a plurality of the votes present in person
or represented by proxy at the Meeting and voted on the election of directors.
Votes withheld and broker non-votes will have no effect on the election of
directors. Approval of the amendment to the Certificate requires the
affirmative vote of a majority of the outstanding shares of Common Stock
entitled to vote thereon. Proxies marked to abstain and broker non-votes will
have the same effect as votes against the proposal to amend the Certificate.
Approval of the amendment to the Stock Option Plan and the ratification of the
appointment of auditors require the affirmative vote of a majority of the
votes cast on the proposal. Proxies marked to abstain will have the same
effect as votes against the proposals to amend the Stock Option Plan and to
ratify the appointment of independent accountants. Broker non-votes will have
no effect on these proposals. One-third of the shares of the Common Stock,
present in person or represented by proxy, shall constitute a quorum for
purposes of the Meeting. Abstentions and broker non-votes are counted for
purposes of determining a quorum.

A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary

of the Company at or before the Meeting a written notice of revocation bearing
a later date than the proxy; (ii) duly executing a subsequent proxy relating
to the same shares and delivering it to the Secretary of the Company at or
before the Meeting; or (iii) attending the Meeting and voting in person
(although attendance at the Meeting will not in and of itself constitute
revocation of a proxy). Any written notice revoking a proxy should be
delivered to Sandra C. Samford, Secretary, Fort Bend Holding Corp., 3400
Avenue H, Rosenberg, Texas 77471.

Voting Securities and Principal Holders Thereof

Stockholders of record as of the close of business on June 13, 1997,
will be entitled to one vote for each share then held. As of that date, the
Company had 827,215 shares of Common Stock issued and outstanding. The
following table sets forth information regarding the share ownership, as of
June 13, 1997, of: (i) those persons or entities known by management to
beneficially own more than five percent of the Common Stock, (ii) the
Company's Chief Executive Officer and each other executive officer who made in
excess of $100,000 during fiscal 1997 (the "Named Officers") and (iii) all
directors, nominees and executive officers of the Company and the Association
as a group.

Beneficial Owner Shares Beneficially Owned Percent of Class
- ----------------------------- ------------------------- ----------------
<S> <C> <C>

Over 5% Beneficial Owners:
- -------------------------

Wellington Management Company 77,700(1) 9.39%
75 State Street
Boston, Massachusetts 02109

First Financial Fund, Inc. (1) (1)
Gateway Center Three
100 Mulberry Street, 9th Floor
Newark, New Jersey 07102-4077

First Manhattan Co. 77,800(2) 9.41
437 Madison Avenue
New York, New York 10022

John Hancock Mutual Life 79,000(3) 9.55
Insurance Company and
John Hancock Subsidiaries, Inc.
P.O. Box 111
Boston, Massachusetts 02117
and
The Berkeley Financial Group and
John Hancock Advisors, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199

Jeffrey L. Gendell 81,000(4) 9.79
Tontine Partners, L.P.
200 Park Avenue, Suite 3900
New York, New York 10166

The Millers Mutual Fire Insurance 81,435(5) 9.11
Company
300 Burnett Street
Fort Worth, Texas 76102-2799
</TABLE>

Beneficial Owner Shares Beneficially Owned Percent of Class
- ----------------------------- ------------------------- ----------------
<S> <C> <C>

George B. Harrop 84,784(6) 9.69
10190 Old Katy Road
Suite 350
Houston, Texas 77043

Kennedy Capital Management, Inc. 57,863(7) 6.99
10829 Olive Boulevard
St. Louis, Missouri 63141

Fort Bend Holding Corp. 61,425(8) 7.43
Employee Stock Ownership Plan
3400 Avenue H
Rosenberg, Texas 77471

Named Officers:
- --------------

Lane Ward 39,306(9) 4.64

David D. Rinehart 16,189(9) 1.94

Directors and executive 162,952(10) 18.16
officers of the Company and
the Association as a group
(11 persons)
_______________________

<FN>

(1) As reported by Wellington Management Company ("Wellington") in a
statement as of January 24, 1997 on Amendment No.4 to a Schedule 13G
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Wellington reported shared dispositive power as to all of
such shares. The shares reported as beneficially owned by Wellington
are owned by various investment advisory clients of Wellington. None
of such clients owned more than 5% of the Company's outstanding shares
of Common Stock, other than First Financial Fund, Inc. ("FFF"). In a
statement as of February 18, 1997 on Amendment No. 3 to a Schedule 13G
under the Exchange Act, FFF reported sole voting and shared
dispositive power as to 77,000 shares.
(2) As reported by First Manhattan Co. ("First Manhattan") in a statement
as of January 30, 1997 on a Schedule 13G under the Exchange Act.
First Manhattan reported sole voting and dispositive powers as to
72,810 shares and shared voting and dispositive powers as to 4,990
shares.
(3) Based on information provided by John Hancock Mutual Life Insurance
Company ("JHMLI"), JHMLI's wholly owned subsidiary John Hancock
Subsidiaries, Inc. ("JHSI"), JHSI's wholly owned subsidiary The
Berkeley Financial Group ("TBFG"), and TBFG's wholly owned subsidiary
John Hancock Advisers, Inc. ("JHA"). JHMLI, JHSI and TBFG did not
report beneficial ownership of any of such shares. JHA reported sole
voting and dispositive power as to all of such shares.
(4) As reported by Mr. Gendell and Tontine Partners in a statement as of
February 13, 1997 on Amendment No. 2 to a Schedule 13D under the
Exchange Act. Mr. Gendell reported sole voting and dispositive powers
as to 21,500 shares, and Mr. Gendell and Tontine Partners together
reported shared voting and dispositive powers as to 59,500 shares.
(5) As reported by The Millers Mutual Fire Insurance Company ("Millers"),
in a statement as of March 17, 1997 on a Schedule 13D under the
<PAGE>
<PAGE>

Exchange Act. Of the amount reported above, 15,000 represent shares
of Common Stock currently held and 66,435 represent shares of Common
Stock that may be obtained upon conversion of 8% Convertible
Subordinated Debentures of the Company (the "Convertible Debentures").
The amount reported excludes 4,700 shares (all of which represent
shares of Common Stock currently held) held by F. George Dunham III,
C.P.A., President and Chief Executive Officer of Millers, of which
Millers disclaims beneficial ownership. Mr. Dunham disclaims
beneficial ownership of the 81,435 shares held by Millers.
(6) As reported by Mr. Harrop in a statement as of March 7, 1997 on a
Schedule 13D under the Exchange Act. Mr. Harrop reported sole voting
and dispositive powers as to 45,062 shares (which amount includes
12,962 shares that may be obtained upon conversion of Convertible
Debentures), and shared voting and dispositive powers with his wife as
to 39,722 shares (which amount includes 34,722 shares that may be
obtained upon conversion of Convertible Debentures).
(7) As reported by Kennedy Capital Management, Inc. ("Kennedy") in a
Statement as of February 10, 1997 on a Schedule 13G under the Exchange
Act. Kennedy reported sole voting power as to 47,910 shares, sole
dispositive power as to 57,863 shares and shared voting and
dispositive powers as to no shares.
(8) Represents shares held by the Company's Employee Stock Ownership Plan
(the "ESOP"), 33,706 of which have been allocated to accounts of
participants. First Bankers Trust Company, N.A., the trustee of the
ESOP, may be deemed to beneficially own the shares held by the ESOP
which have not been allocated to the accounts of participants.
(9) Includes shares held directly and jointly with family members, as well
as shares which are held in retirement accounts, or held by certain
members of the named individuals' families, or held by trusts of which
the named individual is a trustee or substantial beneficiary, with
respect to which shares the respective individuals may be deemed to
have sole or shared voting and/or dispositive powers. Also includes
(i) 2,595 and 1,474 restricted shares of Common Stock awarded under
the Company's Recognition and Retention Plan ("RRP") to Mr. Ward and
Mr. Rinehart, respectively, which have not yet vested but over which
such individuals have sole voting power, (ii) 16,918 and 8,581 shares
subject to options granted under the Stock Option Plan to Mr. Ward and
Mr. Rinehart, respectively, which are currently exercisable, (iii)
2,314 and 46 shares attributed to Mr. Ward and Mr. Rinehart,
respectively, which are issuable upon conversion of the Convertible
Debentures, and (iv) 2,399 and 1,788 shares allocated to the ESOP
accounts of Mr. Ward and Mr. Rinehart, respectively.
(10) Includes shares held directly, as well as jointly with family members,
and shares held in retirement accounts, in a fiduciary capacity or by
certain family members, with respect to which shares the listed
individuals or group members may be deemed to have sole voting and/or
dispositive powers. Also includes (i) 821, 2,595, 1,474, 946, 187 and
230 restricted shares of Common Stock awarded under the RRP to
Chairman Robert W. Lindsey, Mr. Lane Ward, Mr. David D. Rinehart, Mr.
Larry J. Dobrava (Senior Vice President and Chief Lending Officer),
Ms. Sandra C. Samford (Vice President and Corporate Secretary) and
each of Directors J. Patrick Gubbels, Wayne O. Poldrack, William A.
Little and George C. Brady, respectively, which have not yet vested
but over which such individuals have sole voting power, (ii) 16,918,
8,581, 4,888, 1,128, 1,661 and 3,839 shares subject to options granted
under the Stock Option Plan to Mr. Ward, Mr. Rinehart, Mr. Dobrava,
Ms. Samford, Director Doyle G. Callender and each of Directors
Gubbels, Poldrack, Little, Brady and Workman, respectively, which are
currently exercisable, (iii) 2,314, 2,314, 46, 2,314, 1,157, 3,240,
1,157, 2,314, 1,157 and 1,620 shares attributed to Mr. Lindsey, Mr.
Ward, Mr. Rinehart, Ms. Samford and Directors Brady, Gubbels, Little,
Poldrack, Callender and Workman, respectively, which are issuable
upon conversion of the Convertible Debentures , and (iv) 2,399, 1,788,
1,617 and 726 shares allocated to the ESOP accounts of Mr. Ward, Mr.
Rinehart, Mr. Dobrava and Ms. Samford, respectively.
</TABLE>
<PAGE>
<PAGE>

I. ELECTION OF DIRECTORS

General

The Company's Board of Directors consists of eight members. Six
directors of the Company have served in such capacity since its incorporation
in January 1993. Mr. Callender and Mr. Workman, who were serving as advisory
directors, have been regular directors since July 30, 1996. The Board is
divided into three classes, each of which contains approximately one-third of
the Board. Approximately one-third of the directors are elected annually.
Directors of the Company are generally elected to serve for three-year periods
or until their respective successors are elected and qualified.

The table below sets forth certain information as of June 13, 1997
regarding the composition of the Company's Board of Directors, including each
director's term of office. The Board of Directors acting as the nominating
committee has recommended and approved the nominees identified in the
following table. It is intended that the proxies solicited on behalf of the
Board of Directors (other than proxies in which the vote is withheld as to a
nominee) will be voted at the Meeting FOR the election of the nominees
identified below. If any nominee is unable to serve, the shares represented
by all valid proxies will be voted for the election of such substitute nominee
as the Board of Directors may recommend. At this time, the Board of Directors
knows of no reason why any nominee may be unable to serve, if elected.
Except as disclosed herein, there are no arrangements or understandings
between the nominees and any other person pursuant to which the nominees were
selected.

Election of the director nominees named below requires the affirmative
vote of a plurality of the shares of Common Stock present or represented at
the meeting and voted thereon. Votes may be cast in favor or withheld with
respect to all of the director nominees. Votes that are withheld will be
counted toward a quorum, but will be excluded entirely from the tabulation for
the proposal and, therefore, will not otherwise affect the outcome of the vote
on the proposal.

<TABLE>
<CAPTION>
Shares of
Common Stock Percent
Position(s) Held Director Term to Beneficially of
Name Age in the Company Since(1) Expire Owned(2) Class(2)
- ----------------- --- ---------------- -------- ------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES

Robert W. Lindsey 85 Chairman of the Board 1950 2000 21,606 2.60%

Lane Ward 48 Vice Chairman, President 1985 2000 39,306 4.64
and Chief Executive
Officer

DIRECTORS CONTINUING IN OFFICE

J. Patrick Gubbels 55 Director 1989 1999 13,581 1.63

Wayne O. Poldrack 57 Director 1980 1999 14,805 1.78

Doyle G. Callender 46 Director 1996 1999 4,996 .60

Ron L. Workman 45 Director 1996 1998 9,459 1.14

George C. Brady 76 Director 1955 1998 11,148 1.34

William A. Little 65 Director 1985 1998 13,648 1.64

</TABLE>

- -------------
(1) Includes service as a director of the Association.

(2) Includes shares held directly and jointly with family members, as well
as shares which are held in retirement accounts, or held by certain
members of the named individuals' families, or held by trusts of which
the named individual is a trustee or substantial beneficiary, with
respect to which shares the respective directors may be deemed to have
sole or shared voting and/or dispositive powers. Also includes (i) 821,
2,595 and 230 restricted shares of Common Stock awarded under the RRP to
Mr. Lindsey, Mr. Ward and each of Messrs. Gubbels, Poldrack, Little and
Brady, respectively, which have not yet vested but over which such
individuals have sole voting power, (ii) 16,918, 1,661 and 3,839 shares
subject to options granted under the Stock Option Plan to Mr. Ward, Mr.
Callender and each of Messrs. Gubbels, Poldrack, Little, Brady and
Workman, respectively, which are currently exercisable, (iii) 2,314,
2,314, 1,157, 3,240, 1,157, 2,314, 1,157 and 1,620 shares attributed to
Messrs. Lindsey, Ward, Brady, Gubbels, Little, Poldrack, Callender and
Workman, respectively, which are issuable upon conversion of the
Convertible Debentures, and (iv) 2,399 shares allocated to the ESOP
account of Mr. Ward.

The business experience of each nominee and director of the Company is
set forth below. All directors have held their present positions for at least
five years unless otherwise indicated.

Robert W. Lindsey - Mr. Lindsey has been a partner in the law firm of
Joerger, Lindsey & Lindsey since 1948 and has served as the Association's
Legal Counsel since 1950. Mr. Lindsey served as President of Fort Bend from
1980 to 1987 and has served as Chairman of the Board since 1963.

Lane Ward - Mr. Ward joined the Association in 1978 as Financial Vice
President before being promoted to Executive Vice President in 1981, to
President and Chief Operating Officer in 1987 and to Vice Chairman in 1996.
Mr. Ward is a Certified Public Accountant. Mr. Ward is also Chairman of
Mitchell Mortgage Company, L.L.C., in which the Association owns a 51%
interest.

J. Patrick Gubbels - Mr. Gubbels is self-employed in farming and
ranching in Fort Bend County, Texas. In addition, Mr. Gubbels serves as
trustee for trusts and estates and has further interests in various
businesses, including oil and gas concerns.

Wayne O. Poldrack - Mr. Poldrack has been a self-employed certified
public accountant practicing in Rosenberg, Texas since 1972.

Doyle G. Callender - Mr. Callender is Executive Vice President and
General Manger of Fort Bend Telephone Company. Mr. Callender has been with
the Company for 24 years, the last 15 of which he has served in these
capacities.

Ron L. Workman - Mr. Workman is President of Workman Construction, Inc.
Mr. Workman started the Company in 1991.

George C. Brady - Mr. Brady was the owner of Brady Insurance Agency,
located in Wharton, Texas until his retirement in 1985. Mr. Brady presently
serves as an insurance agency consultant. Mr. Brady was named Municipal Judge
for the City of Wharton in 1995.

William A. Little - Mr. Little was the Senior Vice President of Sales
and Marketing of Imperial Holly Corporation, a sugar refiner located in Sugar
Land, Texas. He was employed by Imperial Holly Corporation from 1962 until
his retirement in December 1993.

Meetings and Committees of the Board of Directors

The Company's Board of Directors meets monthly and upon the written
request of the President or at least two directors. The Board of Directors
met 13 times during fiscal 1997. During fiscal 1997, no incumbent director of
the Company attended fewer than 75% of the total number of Board meetings and
the total number of meetings held by the committees of the Board of Directors
on which he served. The Company's directors are not paid fees for service on
the Board of Directors in addition to fees received for service on the Board
of the Association and committees thereof. The Board of Directors of the
Company has standing Audit and Compensation Committees which meet and act in
conjunction with the Association's Audit and Compensation Committees,
respectively.

The Audit Committee is responsible for selecting the Company's and the
Association's independent accountants and meeting with the independent
accountants to outline the scope and review the results of the annual audit.
The Audit Committee also reviews loan loss reserve adequacy, electronic data
processing performance and internal audit performance. The members of this
committee during fiscal 1997 were Directors Poldrack (Chairman), Brady and
Little. This committee held four meetings during the year ended March 31,
1997.

The Compensation Committee was established during 1993 to determine
compensation levels for the Association's staff and to administer the Stock
Option Plan and RRP. The members of this committee during fiscal 1997 were
Directors Little (Chairman), Brady and Gubbels. This committee held four
meetings during the year ended March 31, 1997.

In addition to what has been described above, the Audit and Compensation
Committees address matters as necessary during the course of the year.
However, these matters may be presented in the course of meetings of the full
Board of Directors.

The full Board of the Company acts as a nominating committee for the
annual selection of nominees for election as directors. While the Board will
consider nominees recommended by others, it has not actively solicited
nominations nor established any procedures for this purpose. Pursuant to the
Company's Bylaws, nominations generally must be delivered in writing to the
Secretary of the Company at least 30 days before the date of the annual
meeting.

The Association's Board of Directors meets monthly and may have
additional special meetings. The Board of Directors met 14 times during the
year ended March 31, 1997. During fiscal 1997, no incumbent director of the
Association attended fewer than 75% of the aggregate of the total number of
Board meetings and the total number of meetings held by the committees of the
Board of Directors on which he served. During fiscal 1997, each non-employee
director received a fee of $750 per month for service on the Board. In
addition, each member of the Audit and Compensation Committees received a fee
of $350 per meeting attended, except for the chairmen of such committees who
received $400 per meeting attended. Mr. Poldrack received a fee of $650 per
month during fiscal 1997 for service on the Association's Loan and Appraisal
Review Committee. Messrs. Callender and Workman each received fees of $375
per month over a four month period for service as advisory directors.

Executive Compensation

The following table sets forth information regarding compensation paid
by the Company and the Association to their Chief Executive Officer for
services rendered during the past three fiscal years. One other executive
officer earned in excess of $100,000 in salary and bonus during the fiscal
year ended March 31, 1997.

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
-----------------------
Annual Compensation Awards
------------------------------------ ----------------------
Restricted Securities
Other Annual Stock Underlying All Other
Name and Principal Salary Bonus Compensation Award(s) Options Compensation
Position Year ($) ($) ($)(1) ($)(5) (#) ($)
- ------------------ ---- -------- ------- ------------ ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>

Lane Ward 1997 $128,797 $ 8,500 --- 18,250(4) 1,000 ---
Vice Chairman, 1996 125,047 8,498 --- 7,813(3) --- ---
President and Chief 1995 121,405 10,000 --- 5,938(2) 1,000 ---
Executive Officer

David D. Rinehart 1997 100,000 5,000 --- 9,125(4) 1,000 ---
Executive Vice 1996 94,524 6,424 --- 6,822(3) --- ---
President, Chief 1995 91,771 7,500 --- 3,563(2) 1,000 ---
Financial Officer

<FN>

(1) Does not include perquisites which did not exceed the lesser of $50,000
or 10% of Messrs. Ward's and Rinehart's respective salaries and bonuses.

(2) Represents the dollar value, based on the $11.875 average of the closing
bid and ask prices per share of the Common Stock on April 4, 1994, the
date of grant. The shares of restricted stock shall vest in five equal
annual installments (the first installment having vested on April 1,
1995), provided the individual maintains "Continuous Service" (as defined
in the RRP) with the Company and/or the Association. Dividends are paid
on the restricted shares to the extent and on the same date as dividends
are paid on all other outstanding shares of the Common Stock.

(3) Represents the dollar value, based on the $15.625 closing price per share
of the Common Stock on April 3, 1995, the date of grant. The shares of
restricted stock shall vest in five equal annual installments (the first
installment having vested on April 1, 1996), provided the individual
maintains "Continuous Service" (as defined in the RRP) with the Company
and/or the Association. Dividends are paid on the restricted shares to
the extent and on the same date as dividends are paid on all other
outstanding shares of the Common Stock.

(4) Represents the dollar value, based on the $18.25 closing price per share
of the Common Stock on April 1, 1996, the date of grant. The shares of
restricted stock shall vest in five equal annual installments (the first
installment having vested on April 1, 1997), provided the individual
maintains "Continuous Service" (as defined in the RRP) with the Company
and/or the Association. Dividends are paid on the restricted shares to
the extent and on the same date as dividends are paid on all other
outstanding shares of the Common Stock. On April 1, 1997, Mr. Ward
received an additional award of 1,000 shares of restricted stock and Mr.
Rinehart received an additional award of 500 shares of restricted stock.<PAGE>
<PAGE>

(5) Based on the $24.75 closing price per share of the Common Stock on March
31, 1997, the 2,595 restricted shares held by Mr. Ward and the 1,474
restricted shares held by Mr. Rinehart as of March 31, 1997, had
aggregate market values of $64,226 and $36,482, respectively.

</TABLE>

The following table sets forth certain information concerning grants of
stock options pursuant to the Stock Option Plan to the named officers in
fiscal 1997. No stock appreciation rights ("SARs") were granted in fiscal
1996.

<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR

Individual Grants Potential Realizab
--------------------------------------------- Value at Assumed
Number of % of Total Annual Rates of Stock
Shares Options Price Appreciation
Underlying Granted to Per Share for Option Term
Options Employees in Exercise Expiration ---------------------
Granted Fiscal Year Price Date 5% 10%
---------- ------------ --------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>

Lane Ward 1,000 5% $18.625 04/01/06 $10,269 $25,292

David D. Rinehart 1,000 5% 18.625 04/01/06 $10,269 $25,292

</TABLE>

The following table provides information as to stock options exercised
by the Named Officers during the fiscal year ended March 31, 1997, and the
value of the options held by the Named Officers on March 31, 1997.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
------------------------ -------------------------
Shares
Acquired Value
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) # # ($)(1) ($)
- ----------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>

Lane Ward --- $ --- 16,918 --- $235,416 ---

David D. Rinehart --- $ --- 8,581 --- 112,445 ---

<FN>
(1) Represents the aggregate market value (market price of the Common Stock
less the exercise price) of the options held based upon the exercise
prices of the option ($10.00 per share with respect to 14,918 shares,
$15.50 per share with respect to 1,000 shares and $18.625 per share with
respect to 1,000 shares for Mr. Ward and $10.00 per share with respect to
6,581 shares, $15.50 per share with respect to 1,000 shares and $18.625
per share with respect to 1,000 shares for Mr. Rinehart) and the closing
price of $24.75 per share of the Common Stock as reported on the Nasdaq
National Market on March 31, 1997.
</TABLE>
<PAGE>
<PAGE>

Employment Agreements

The Association has entered into employment agreements with Messrs.
Ward, Rinehart and Dobrava. The employment agreements are designed to assist
the Association and the Company in maintaining a stable and competent
management base. The continued success of the Association and the Company
depends to a significant degree on the skills and competence of their
officers. The employment agreements provide for annual base salaries in
amounts not less than the employees' salaries on June 30, 1993, the date the
agreements became effective. The employment agreements for Messrs. Ward and
Rinehart provide for a three year term and the agreement for Mr. Dobrava
provides for a two year term. All three employment agreements further provide
that such term be automatically extended (subject to the approval of the
Association's Board of Directors) for an additional year on each fiscal year
end, unless either party gives timely notice in writing to the other that such
term is not to be extended. The agreements provide for termination upon the
employee's death, for cause or in certain events specified by OTS regulations.
The employment agreements are terminable by the employee upon 90 days notice
to the Association. The employment agreements provide for payment to the
employee of up to 100% of the employee's then-current annual compensation in
the event there is a change in control of the Association where employment
terminates involuntarily in connection with such change in control or within
twelve months thereafter. This termination payment is subject to reduction by
the amount of all other compensation to the employee deemed for purposes of
the Internal Revenue Code of 1986, as amended (the "Code"), to be contingent
on a change in control. Such termination payments are provided on a similar
basis in connection with a voluntary termination of employment, where the
change in control was at any time opposed by the Company's Board of Directors.

For the purposes of the employment agreements, a change in control is
defined to mean: (i) the acquisition by a person or group of persons of
beneficial ownership of 25% or more of the Common Stock of the Company, (ii)
as a result of any cash tender offer, merger or other business combination,
sale of assets or contested election, the persons who were directors of the
Company cease to constitute a majority of the Board, or (iii) the stockholders
approve the sale or other disposition of all or substantially all of the
assets of the Company; provided, however, that any such events shall not
constitute a "change in control" if approved by the Company's Board of
Directors. The agreements provide, among other things, for participation in
an equitable manner in employee benefits applicable to executive personnel.

Based on their current salaries, if Messrs. Ward, Rinehart and Dobrava
had been terminated as of March 31, 1997, under circumstances entitling them
to severance pay as described above, they would have been entitled to receive
lump sum cash payments of approximately $133,297, $103,500 and $89,723,
respectively.

II. APPROVAL OF AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE AUTHORIZED COMMON STOCK

The Board of Directors of the Company has approved and recommends to the
stockholders an amendment to the certificate of incorporation (the
"Certificate") which would increase the number of shares of Common Stock
authorized for issuance from 2,000,000 to 4,000,000 shares. As of June 13,
1997, 827,215 shares of Common Stock were issued and outstanding. At that
date, the Company also had 556,944 shares reserved for issuance upon
conversion of the Convertible Debentures and 77,552 shares reserved for
issuance upon exercise of stock options.

The principal purpose for the proposed amendment is to give the Company
greater flexibility in its financial affairs by making additional shares of
Common Stock available for issuance by the Company in such transactions and at
such times as the Board of Directors considers appropriate, whether in public
or private offerings, as stock splits or dividends or in connection with
mergers and acquisitions or otherwise. The Company's stockholders may or may

not be given the opportunity to vote on such a transaction, depending on the
nature of the transaction, applicable law, the rules and policies of the
National Association of Securities Dealers, Inc. applicable to Nasdaq National
Market issuing companies and the judgment of the Company's Board of Directors
regarding the submission of such transaction to a vote of the Company's
stockholders. The Company has no present plans, understandings or agreements
for the issuance or use of the proposed additional shares of Common Stock,
except that the Company is currently considering a split in the Common Stock
in the form of a stock dividend.

Because stockholders do not have preemptive rights under the
Certificate, the interests of existing stockholders may (depending on the
particular circumstances in which additional capital stock is issued) be
diluted by any such issuance of Common Stock.

It is possible that additional shares of Common Stock could be issued
for the purpose of making an acquisition by an unwanted suitor of a
controlling interest in the Company more difficult, time-consuming or costly
or to otherwise discourage an attempt to acquire control of the Company.
Under such circumstances, the availability of authorized and unissued shares
may make it more difficult for stockholders of the Company to obtain a premium
for their shares. Such authorized and unissued shares could be used to create
voting or other impediments or to frustrate a person or other entity seeking
to obtain control of the Company by means of a merger, tender offer, proxy
contest or other means. For instance, such shares could be privately placed
with purchasers who might cooperate with the Company's Board of Directors in
opposing an attempt by a third party to gain control of the Company by voting
such shares against the transaction with the third party or could be used to
dilute the stock ownership or voting rights of a person or entity seeking to
obtain control of the Company. Although the Company's Board of Directors does
not currently anticipate issuing additional shares of Common Stock for
purposes of preventing a takeover of the Company, the Company's Board of
Directors reserves its right (consistent with its fiduciary responsibilities)
to issue shares for such purpose.

The resolutions of the Board of Directors setting forth the proposed
amendment are attached to this Proxy Statement as Exhibit A.

Adoption of the proposed amendment requires the affirmative vote of a
majority of the outstanding shares of Common Stock entitled to vote thereon.
As soon as practicable after such vote has been taken and certified, the
amendment will be filed with the Secretary of State of Delaware and will
thereupon become effective.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION

III. APPROVAL OF AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE AUTHORIZED PREFERRED STOCK

The Board of Directors of the Company has approved and recommends to the
stockholders an amendment to the Certificate which would increase the number
of shares of Preferred Stock authorized for issuance from 500,000 to
1,000,000. As of June 13, 1997, no shares of Preferred Stock were issued and
outstanding.

The principal purpose for the proposed amendment is to give the Company
greater flexibility in its financial affairs by making additional shares of
Preferred Stock available for issuance by the Company in such transactions and
at such times as the Board of Directors considers appropriate, whether in
public or private offerings, as stock splits or dividends or in connection
with mergers and acquisitions or otherwise. The Company's stockholders may or
may not be given the opportunity to vote on such a transaction, depending on
the nature of the transaction, applicable law, the rules and policies of the
National Association of Securities Dealers, Inc. applicable to Nasdaq National

Market issuing companies and the judgment of the Company's Board of Directors
regarding the submission of such transaction to a vote of the Company's
stockholders. The Company has no present plans, understandings or agreements
for the issuance or use of the proposed additional shares of Preferred Stock.

Under Article Fourth of the Certificate, the Board of Directors has the
authority to issue authorized shares of the Preferred Stock in series and to
fix the number, designation, relative rights, preferences and limitations of
the shares of each series, subject to applicable law. The authority of the
Board includes the right to fix for each series the dividend rate, redemption
price, liquidation rights, sinking fund provisions, conversion rights, and
voting rights. Until the Board of Directors determines the specific rights,
preferences and limitations of any shares of Preferred Stock to be issued, the
actual effect on the holders of Common Stock of the issuance of such shares
cannot be ascertained. However, such effects might include restrictions on
dividends on the Common Stock if dividends on Preferred Stock are in arrears,
dilution of the voting power of the Common Stock to the extent that any series
of Preferred Stock has voting rights, and reduction of amounts available on
liquidation as a result of any liquidation preference granted to any series of
Preferred Stock.

It is possible that additional shares of Preferred Stock could be issued
for the purpose of making an acquisition by an unwanted suitor of a
controlling interest in the Company more difficult, time-consuming or costly
or to otherwise discourage an attempt to acquire control of the Company.
Under such circumstances, the availability of authorized and unissued shares
may make it more difficult for stockholders of the Company to obtain a premium
for their shares. Such authorized and unissued shares could be used to create
voting or other impediments or to frustrate a person or other entity seeking
to obtain control of the Company by means of a merger, tender offer, proxy
contest or other means. For instance, such shares could be privately placed
with purchasers who might cooperate with the Company's Board of Directors in
opposing an attempt by a third party to gain control of the Company by voting
such shares against the transaction with the third party or could be used to
dilute the stock ownership or voting rights of a person or entity seeking to
obtain control of the Company. The Company might also seek to frustrate a
takeover attempt by issuing shares of Preferred Stock which would acquire
certain characteristics (such as conversion or redemption rights) upon an
unfriendly attempted takeover. In addition, as noted above, the Board of
Directors has the ability to fix the characteristics of shares of the
authorized Preferred Stock. These include, among other things, each share
having more than one vote, voting as a separate class on certain matters,
special conversion rights or redemption features, which features could be a
significant factor in opposing any takeover attempt. Although the Company's
Board of Directors does not currently anticipate issuing any shares of
Preferred Stock for purposes of preventing a takeover of the Company, the
Company's Board of Directors reserves its right (consistent with its fiduciary
responsibilities) to issue shares for such purpose.

The resolutions of the Board of Directors setting forth the proposed
amendment are attached to this Proxy Statement as Exhibit B.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION

IV. APPROVAL OF AMENDMENT TO THE COMPANY'S
1993 STOCK OPTION AND INCENTIVE PLAN

In 1993, the Board of Directors of the Company adopted the Stock Option

Plan and the Stock Option Plan was approved by stockholders at the 1994 Annual
Meeting of Stockholders. The Stock Option Plan provides for the grant of a
variety of long-term incentive awards to directors, officers and employees as
a means of enhancing and encouraging the recruitment and retention of those
individuals on whom the continued success of the Company most depends.

As of March 31, 1997, of the 87,750 shares of Company Common Stock
reserved for issuance under the Stock Option Plan, only 2,913 shares remained
available for future issuance. Without approval of the proposed amendment to
reserve additional shares for issuance, the Company will soon be unable to
award any options under the Plan. The Board of Directors therefore recommends
that the stockholders approve an amendment to the Stock Option Plan in order
to increase by 41,115 (4.97% of the outstanding shares of Common Stock as of
June 13, 1997) the number of shares available for issuance under the Stock
Option Plan to meet anticipated requirements for future grants to directors,
officers and employees of the Company and its subsidiaries. Approval of the
amendment to the Stock Option Plan requires the affirmative vote of a majority
of the votes cast on the proposal.

Principal Features of the Stock Option Plan

The Stock Option Plan provides for awards in the form of stock options,
stock appreciation rights ("SARs"), limited stock appreciation rights
("Limited SARs") and restricted stock. Each award shall be on such terms and
conditions, consistent with the Plan, as the committee administering the Plan
may determine.

Shares may be either authorized but unissued shares or reacquired shares
held by the Company in its treasury. Any shares subject to an award which
expires or is terminated unexercised will again be available for issuance
under the Stock Option Plan or any other plan of the Company or its
subsidiaries. Generally, no award or any right or interest therein is
assignable or transferable except under certain limited exceptions set forth
in the Plan.

The Stock Option Plan is administered by the Compensation Committee (the
"Committee") which must consist of at least two "Non-Employee Directors" (as
defined in the Stock Option Plan). Non-employee Directors Little, Gubbels and
Brady have been appointed as the present members of the Committee. In
granting awards under the Stock Option Plan, the Committee considers, among
other things, position and years of service, value of the participant's
services to the Company and the Association and the added responsibilities of
such individuals as directors, officers and employees of a public company.

Stock Options

The term of stock options may not exceed ten years from the date of
grant. The Committee may grant either "incentive stock options" as defined
under Section 422 of the Code or stock options not intended to qualify as such
("non-qualified stock options").

In general, stock options will not be exercisable after the expiration
of their terms. Unless otherwise determined by the Committee, in the event
that a participant ceases to maintain continuous service (as defined in the
Stock Option Plan) to the Company, or one of its subsidiaries, for any reason
other than death or termination for cause, an exercisable stock option will
continue to be exercisable for three months but in no event after the
expiration date of the option. Notwithstanding the foregoing, if a
participant to whom an option was granted ceases to maintain continuous
service due to normal retirement, and such participant has served the Company
or the Association for at least five years, his or her option shall become
immediately exercisable, and the participant may, but only within three years
immediately following normal retirement and in no event after the expiration
of such option, exercise such option. In the event of the death of a
participant during such service or within the three-month or three-year

periods referred to above, an exercisable option will continue to be
exercisable for one year, to the extent exercisable by the participant
immediately prior to his or her death, but in no event later than ten years
after grant. Following the death of any participant, the Committee may, as an
alternative means of settlement of an option, elect to pay to the holder an
amount of cash equal to the amount by which the market value of the shares
covered by the option on the date of exercise exceeds the exercise price. A
stock option will automatically terminate and will no longer be exercisable as
of the date a participant is terminated for cause.

Subject to certain limited exceptions, the exercise price for the
purchase of shares subject to a stock option at the date of grant may not be
less than 100% of the market value of the shares covered by the option on that
date. The exercise price must be paid in full in cash or shares of Common
Stock, or a combination of both.

Stock Appreciation Rights

The Committee may grant SARs at any time, whether or not the participant
then holds stock options, granting the right to receive the excess of the
market value of the shares represented by the SARs on the date exercised over
the exercise price. SARs generally will be subject to the same terms and
conditions and exercisable to the same extent as stock options, as described
above. Upon the exercise of a SAR, the participant will receive the amount
due in cash or shares, or a combination of both, as determined by the
Committee. SARs may be related to stock options ("tandem SARs"), in which
case the exercise of one will reduce to that extent the number of shares
represented by the other.

SARs require an expense accrual by the Company each year for the
appreciation on the SARs which it is anticipated will be exercised. The
amount of the accrual is dependent upon whether and the extent to which the
SARs are granted and the amount, if any, by which the market value of the SARs
exceeds the exercise price.

Limited Stock Appreciation Rights

Limited SARs are exercisable only for a limited period in the event of a
tender or exchange offer for shares of the Company's Common Stock, other than
by the Company, where 25% or more of the outstanding shares are acquired in
that offer or any other offer which expires within 60 days of that offer. The
amount paid on exercise of a Limited SAR is the excess of (i) the market value
of the shares on the date of exercise, or (ii) the highest price paid pursuant
to the offer, over the exercise price. Payment upon exercise of a Limited SAR
is in cash.

Limited SARs may be granted at the time of, and must be related to, the
grant of a stock option or SAR. The exercise of one will reduce to that
extent the number of shares represented by the other. Limited SARs are
exercisable only for the 45 days following the expiration of the tender or
exchange offer, during which period the related stock option or SAR will be
exercisable.

Restricted Stock

The Committee may grant restricted stock, subject to forfeiture, if the
participant fails to remain in the continuous service of the Company, or one
of its subsidiaries, as a director, officer or employee for a stipulated
period. The holder of restricted stock shall have all of the rights of a
stockholder, including the right to receive dividends (with payment deferred
if the Committee so decides) and the right to vote the shares. The
participant may not, however, sell, assign, transfer, pledge or otherwise
encumber any of the restricted stock during the restricted period.

The Committee may, in its discretion, accelerate the time at which any
or all restrictions will lapse, or may remove any or all of the restrictions.
<PAGE>
<PAGE>

In the event a participant ceases to be employed by reason of death,
disability or retirement, restricted stock still subject to restrictions will
be free of these restrictions in proportion to the portion of the restricted
period then elapsed, unless otherwise provided by the Committee. In the event
of termination for any other reason, all shares will be forfeited and returned
to the Company, unless the Committee provides otherwise.

Effect of Merger and Other Adjustments

Shares as to which awards may be granted under the Stock Option Plan,
and shares then subject to awards, will be adjusted by the Committee in the
event of any merger, consolidation, reorganization, recapitalization, stock
dividend, stock split or other change in the corporate structure of the
Company.

In the case of any merger or consolidation of the Company with or into
another company or other entity, whereby either the Company is not the
continuing company or its outstanding shares are converted into or exchanged
for securities, cash or property, or any combination thereof pursuant to a
plan or agreement the terms of which are binding upon all stockholders, any
participant to whom a stock option, SAR or Limited SAR has been granted will
have the right (subject to other provisions of the Stock Option Plan) upon
exercise of the option, SAR or Limited SAR to an amount equal to the excess of
fair market value on the date of exercise of the consideration receivable in
the merger, consolidation or combination with respect to the shares covered or
represented by the stock option, SAR or Limited SAR over the exercise price of
the option, SAR or Limited SAR multiplied by the number of shares with respect
to which the option, SAR or Limited SAR has been exercised.

The restricted period with respect to an award of restricted stock will
lapse, and the stock will become fully vested, if the service of a participant
is involuntarily terminated for any reason within 18 months after a change in
control of the Company. A change in control will be deemed to occur when (i)
a person or group becomes the beneficial owner of shares of the Company
representing 25% or more of the total number of votes which may be cast for
the election of the Board of Directors of the Company, (ii) in connection with
any tender offer, merger or other business combination, sale of assets or
contested election, or combination of the foregoing, the persons who are
directors of the Company cease to be a majority of the Board of Directors, or
(iii) stockholders of the Company approve a transaction pursuant to which the
Company will cease to be an independent publicly-owned thrift holding company
or pursuant to which substantially all of its assets will be sold; provided,
however, that the occurrence of any such events shall not be deemed a change
in control if, prior to such occurrence, at least a majority of the Board of
Directors approves such occurrence.

In addition, in the event of a tender or exchange offer (other than an
offer made by the Company) or if the event specified in clause (iii) above
occurs, all outstanding stock options and SARs not fully exercisable will
become exercisable in full and remain so for a period of 60 days, after which
they will revert to being exercisable in accordance with their terms.
However, no stock option or SAR will be exercisable by any director, senior
officer or ten percent beneficial owner of the Company, or one of its
subsidiaries, which has been previously exercised or terminated.

Amendment and Termination

The Board of Directors of the Company may at any time amend, suspend or
terminate the Stock Option Plan or any portion thereof but may not, without
the prior approval of the stockholders, make any amendment which (i)
materially increases the total number of shares which may be subject to
awards, (ii) materially increases the number of shares which may be subject to
awards to participants who are not employees, or (iii) changes the class of
persons eligible to participate in the Stock Option Plan. Unless previously
terminated, the Stock Option Plan shall continue in effect for a term of ten

years, after which no further awards may be granted under the Stock Option
Plan.

Federal Income Tax Consequences

Under present federal income tax laws, awards under the Stock Option
Plan will have the following consequences:

(1) The grant of an award will neither, by itself, result in the
recognition of taxable income to the participant nor entitle the Company to a
deduction at the time of such grant.

(2) The exercise of a stock option which is an "Incentive Stock Option"
within the meaning of Section 422 of the Code will generally not, by itself,
result in the recognition of taxable income to the participant nor entitle the
Company to a deduction at the time of such exercise. However, the difference
between the exercise price and the fair market value of the option shares on
the date of exercise is an item of tax preference which may, in certain
situations, trigger the alternative minimum tax. The alternative minimum tax
is incurred only when it exceeds the regular income tax. The alternative
minimum tax will be payable at the rate of 26% to the first $175,000 of
"minimum taxable income" in excess of $33,750 (single person) or $45,000
(married person filing jointly). This tax applies at a flat rate of 28% of so
much of the taxable excess as exceeds $175,000. If a taxpayer has alternative
minimum taxable income in excess of $150,000 (married persons filing jointly)
or $112,500 (single person), the $45,000 or $33,750 exemptions are reduced by
an amount equal to 25% of the amount by which the alternative minimum taxable
income of the taxpayer exceeds $150,000 or $112,500, respectively. The gain
recognized upon the sale of shares received pursuant to the exercise of the
Incentive Stock Option generally will be taxed at the capital gains tax rates
then in effect.

(3) The exercise of a stock option which is not an Incentive Stock
Option will result in the recognition of ordinary income by the participant on
the date of exercise in an amount equal to the difference between the exercise
price and the fair market value on the date of exercise of the shares acquired
pursuant to the stock option.

(4) The exercise of a SAR will result in the recognition of ordinary
income by the participant on the date of exercise in an amount of cash, and/or
the fair market value on that date of the shares, acquired pursuant to the
exercise.

(5) Holders of restricted stock will recognize ordinary income on the
date that the shares of restricted stock are no longer subject to a
substantial risk of forfeiture, in an amount equal to the fair market value of
the shares on that date. In certain circumstances, a holder may elect to
recognize ordinary income and determine such fair market value on the date of
the grant of the restricted stock. Holders of restricted stock also will
recognize ordinary income equal to their dividend or dividend equivalent
payments when such payments are received.

(6) The Company will be allowed a deduction at the time, and in the
amount of, any ordinary income recognized by the participant under the various
circumstances described above, provided that the Company meets its federal
withholding tax obligations.

Awards Under the Stock Option Plan

The following table presents information as of March 31, 1997, with
respect to the dollar value and the number of awards granted by the
Compensation Committee, subject to stockholder approval of this amendment to
the Stock Option Plan.<PAGE>
<PAGE>

<TABLE>
<CAPTION>
1993 STOCK OPTION AND INCENTIVE PLAN

Participant Dollar Value ($) Number of Units(1)
- ---------------------------------------- ---------------- ------------------
<S> <C> <C>

All current employees of the Company
who are not executive officers
as a group (150 persons)............... 0 20,500(2)

<FN>

(1) Each unit represents an option to purchase one share of the Common
Stock.

(2) Pursuant to employment agreements between Mitchell Mortgage Company,
L.L.C., a limited liability company in which the Association recently
acquired a 51% interest, and three of its officers (collectively, the
"Employees"), the Employees are entitled to receive options to purchase
a total of 34,000 shares, of which, options to purchase only 13,500
shares have been granted to date due to the unavailability of additional
options under the Stock Option Plan. The remaining amount will be
granted to the Employees, at an exercise price equal to the market value
per share of the Common Stock on date of the grant, if stockholders
approve the increase in the number of shares available for issuance
under the Stock Option Plan at the Meeting.

</TABLE>

No other grants of awards have been made, however, additional awards
under the Stock Option Plan may be granted to eligible participants in the
future at the discretion of the Compensation Committee.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE AMENDMENT TO THE 1993 STOCK OPTION AND INCENTIVE PLAN.

V. RATIFICATION OF THE APPOINTMENT OF ACCOUNTANTS

The Board of Directors has renewed the Company's arrangement for Coopers
& Lybrand L.L.P. to be its independent accountants for the 1998 fiscal year,
subject to the ratification of the appointment by the Company's stockholders.
A representative of Coopers & Lybrand L.L.P. is expected to attend the Meeting
to respond to appropriate questions and will have an opportunity to make a
statement if he so desires. Ratification of the appointment of independent
accountants requires approval by a majority of the votes cast on the proposal.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING MARCH 31, 1998.

STOCKHOLDER PROPOSALS

In order to be eligible for inclusion in the Company's proxy materials
for the next Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's main office located
at 3400 Avenue H, Rosenberg, Texas 77471 no later than February 25, 1998. Any
such proposal shall be subject to the requirements of the proxy rules adopted
under the Exchange Act.

OTHER MATTERS

The Board of Directors is not aware of any business to come before the

Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.

The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of Common Stock. In addition to
solicitation by mail, directors, officers and regular employees of the Company
and/or the Association may solicit proxies personally or by telegraph or
telephone without additional compensation. The Company has retained Kissel-
Blake Inc. to assist in the solicitation of proxies, for a fee estimated to be
approximately $3,500.

BY ORDER OF THE BOARD OF DIRECTORS

Robert W. Lindsey
Chairman of the Board

Rosenberg, Texas
June 25, 1997

EXHIBIT A

PROPOSED AMENDMENT TO SECTION A OF ARTICLE FOURTH OF THE
CERTIFICATE OF
INCORPORATION OF FORT BEND HOLDING CORP.

Resolutions of the Board of Directors adopted on May 15, 1997 setting forth
the proposed amendment with respect to the increase in authorized shares of
common stock:

RESOLVED, that Section A of Article Fourth of the Certificate of Incorporation
of the Corporation be amended to read as follows:

FOURTH:

A. The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is five million
(5,000,000) consisting of:

2. four million (4,000,000) shares of common stock, par value
one cent ($.01) per share (the "Common Stock").

EXHIBIT B

PROPOSED AMENDMENT TO SECTION A OF ARTICLE FOURTH OF THE CERTIFICATE OF
INCORPORATION OF FORT BEND HOLDING CORP.

Resolutions of the Board of Directors adopted on May 15, 1997 setting forth
the proposed amendment with respect to the increase in authorized shares of
preferred stock:

RESOLVED, that Section A of Article Fourth of the Certificate of Incorporation
of the Corporation be amended to read as follows:

FOURTH:

A. The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is five million
(5,000,000) consisting of:

1. one million (1,000,000) shares of preferred stock, par value
one cent ($.01) per share (the "Preferred Stock"); and

FORT BEND HOLDING CORP.

ANNUAL MEETING OF STOCKHOLDERS - JULY 29, 1997

The undersigned hereby appoints the Board of Directors of Fort Bend
Holding Corp. (the "Company"), with full powers of substitution, to act as
attorneys and proxies for the undersigned to vote all shares of capital stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting") to be held at the Fort Bend Country Club
located at 2627 Farm to Market Road 762, Richmond, Texas, on July 29, 1997 at
2:00 p.m., local time, and at any and all adjournments and postponements
thereof.

I. The election as directors of all nominees listed below (except as
marked to the contrary)

___ FOR ___ VOTE WITHHELD

INSTRUCTION: To withhold your vote for any individual nominee, strike a line
in that nominee's name below.

ROBERT W. LINDSEY LANE WARD

II. The approval and adoption of an amendment to the Company's
Certificate of Incorporation to increase the number of shares of
common stock which the Company is authorized to issue from
2,000,000 to 4,000,000

___ FOR ___ AGAINST ___ ABSTAIN

III. The approval and adoption of an amendment to the Company's
Certificate of Incorporation to increase the number of shares of
preferred stock which the Company is authorized to issue
from 500,000 to 1,000,000

___ FOR ___ AGAINST ___ ABSTAIN

IV. The approval and adoption of an amendment to the Company's 1993
Stock Option and Incentive Plan to increase the number of shares
available for issuance thereunder from 87,750 to 128,865

___ FOR ___ AGAINST ___ ABSTAIN

V. The ratification of the appointment of Coopers & Lybrand L.L.P.
as the Company's independent accountants for the fiscal year
ending March 31, 1998

___ FOR ___ AGAINST ___ ABSTAIN

In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment or
postponement thereof.

THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES LISTED
ABOVE AND FOR EACH OF THE FOREGOING PROPOSALS. IF ANY OTHER BUSINESS IS
PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY
IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.

The Board of Directors recommends a vote "FOR" the election of the
nominees listed above and "FOR" each of the foregoing proposals.

(Continued and to be SIGNED on Reverse Side)

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

This proxy may be revoked at any time before it is voted by:
(i) filing with the Secretary of the Company at or before the Meeting a
written notice of revocation bearing a later date than the proxy; (ii) duly
executing a subsequent proxy relating to the same shares and delivering it to
the Secretary of the Company at or before the Meeting; or (iii) attending the
Meeting and voting in person (although attendance at the Meeting will not in
and of itself constitute revocation of a proxy). If this proxy is properly
revoked as described above, then the power of such attorneys or proxies shall
be deemed terminated and of no further force and effect.

The undersigned acknowledges receipt from the Company, prior to the
execution of this proxy, of notice of the Meeting, a Proxy Statement and an
Annual Report to Stockholders.

Dated:__________________, 1997

_______________________________
Signature of Stockholder

Please sign exactly as your name(s)
appear(s) to the left. When signing as
attorney, executor, administrator,
trustee or guardian, please give
your full title. If shares are held
jointly, each holder should sign.

PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE

FORT BEND HOLDING CORP.
Holding Company for
Fort Bend Federal Savings and Loan Association
of Rosenberg

1993 STOCK OPTION AND INCENTIVE PLAN

1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, officers and employees of the Corporation
and its Affiliates. It is intended that designated Options granted pursuant
to the provisions of this Plan to persons employed on a full-time basis will
qualify as Incentive Stock Options. Options granted to persons who are not
full-time employees will be Non-Qualified Stock Options.

2. Definitions. The following definitions are applicable to the Plan:

"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in Section 424(e)
and (f), respectively, of the Code.

"Award" - means the grant of an Incentive Stock Option, a
Non-Qualified Stock Option, a Stock Appreciation Right, a Limited Stock
Appreciation Right, or of Restricted Stock, or any combination thereof, as
provided in the Plan.

"Association" - means Fort Bend Federal Savings and Loan Association
of Rosenberg and its successors.

"Code" - means the Internal Revenue Code of 1986, as amended.

"Committee" - means the Committee referred to in Section 3 hereof.

"Continuous Service" - means the absence of any interruption or
termination of service as a director, officer or employee of the Corporation
or an Affiliate, except that when used with respect to persons granted an
Incentive Stock Option such term means the absence of any interruption or
termination of service as a full-time employee of the Corporation or an
Affiliate. Service shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by the
Corporation or in the case of transfers between payroll locations of the
Corporation or between the Corporation, its parent, its subsidiaries or its
successor.

"Corporation" - means Fort Bend Holding Corp., a Delaware
corporation.

"Employee" - means any person, including an officer or director, who
is employed by the Corporation or any Affiliate.

"ERISA" - means the Employee Retirement Income Security Act of 1974,
as amended.

"Exercise Price" - means (i) in the case of an Option, the price per
Share at which the Shares subject to such Option may be purchased upon
exercise of such Option and (ii) in the case of a Right, the price per Share
(other than the Market Value per Share on the date of exercise and the Offer
Price per Share as defined in Section 10 hereof) which, upon grant, the
Committee determines shall be utilized in calculating the aggregate value
which a Participant shall be entitled to receive pursuant to Sections 9, 10 or
13 hereof upon exercise of such Right.

"Incentive Stock Option" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code.<PAGE>
<PAGE>

"Limited Stock Appreciation Right" - means a stock appreciation
right with respect to Shares granted by the Committee pursuant to Sections 6
and 10 hereof.

"Market Value" - means the average of the high and low quoted sales
price on the date in question (or, if there is no reported sale on such date,
on the last preceding date on which any reported sale occurred) of a Share on
the Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on
such date the Shares are not quoted on the Composite Tape, on the New York
Stock Exchange, or, if the Shares are not listed or admitted to trading on
such Exchange, on the principal United States securities exchange registered
under the Securities Exchange Act of 1934 on which the Shares are listed or
admitted to trading, or, if the Shares are not listed or admitted to trading
on any such exchange, the mean between the closing high bid and low asked
quotations with respect to a Share on such date on the National Association of
Securities Dealers, Inc., Automated Quotations System, or any similar system
then in use, or, if no such quotations are available, the fair market value on
such date of a Share as the Committee shall determine.

"Non-Employee Director" - means a director who (a) is not currently
an officer or employee of the Corporation; (b) is not a former employee of the
Corporation who receives compensation for prior services (other than from a
tax-qualified retirement plan); (c) has not been an officer of the
Corporation; (d) does not receive remuneration from the Corporation in any
capacity other than as a director; and (e) does not possess an interest in any
other transactions or is not engaged in a business relationship for which
disclosure would be required under Item 404(a) or (b) of Regulation S-K.

"Non-Qualified Stock Option" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof, which option is not
intended to qualify under Section 422 of the Code.

"Option" - means an Incentive Stock Option or a Non-Qualified Stock
Option.

"Participant" - means any officer or employee of the Corporation or
any Affiliate who is selected by the Committee to receive an Award and any
director of the Corporation who is granted an Award pursuant to Section 21
hereof.

"Plan" - means the 1993 Stock Option and Incentive Plan of the
Corporation.

"Related" - means (i) in the case of a Right, a Right which is
granted in connection with, and, to the extent exercisable, in whole or in
part, in lieu of, an Option or another Right and (ii) in the case of an
Option, an Option with respect to which and to the extent a Right is
exercisable, in whole or in part, in lieu thereof has been granted.

"Restricted Period" - means the period of time selected by the
Committee for the purpose of determining when restrictions are in effect under
Section 11 hereof with respect to Restricted Stock awarded under the Plan.

"Restricted Stock" - means Shares which have been contingently
awarded to a Participant by the Committee subject to the restrictions referred
to in Section 11 hereof, so long as such restrictions are in effect.

"Right" - means a Limited Stock Appreciation Right or a Stock
Appreciation Right.

"Shares" - means the shares of common stock of the Corporation.

"Stock Appreciation Right" - means a stock appreciation right with
respect to Shares granted by the Committee pursuant to Sections 6 and 9
hereof.

"Ten Percent Beneficial Owner" - means the beneficial owner of more
than ten percent of any class of the Corporation's equity securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934.

3. Administration. The Plan shall be administered by a Committee
consisting of two or more members, each of whom shall be a Non-Employee
Director. The members of the Committee shall be appointed by the Board of
Directors of the Corporation. Except as limited by the express provisions of
the Plan, the Committee shall have sole and complete authority and discretion
to (i) select Participants and grant Awards, (ii) determine the number of
Shares to be subject to types of Awards generally, as well as to individual
Awards granted under the Plan, (iii) determine the terms and conditions upon
which Awards shall be granted under the Plan, (iv) prescribe the form and
terms of instruments evidencing such grants, and (v) establish from time to
time regulations for the administration of the Plan, interpret the Plan, and
make all determinations deemed necessary or advisable for the administration
of the Plan.

A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.

4. Participation in Committee Awards. The Committee may select from
time to time Participants in the Plan from those directors, officers and
employees, of the Corporation or its Affiliates who, in the opinion of the
Committee, have the capacity for contributing to the successful performance of
the Corporation or its Affiliates.

5. Shares Subject to Plan. Subject to adjustment by the operation of
Section 12 hereof, the maximum number of Shares with respect to which Awards
may be made under the Plan is 87,750 Shares. The Shares with respect to which
Awards may be made under the Plan may be either authorized and unissued shares
or issued shares heretofore or hereafter reacquired and held as treasury
shares. Shares which are subject to Related Rights and Related Options shall
be counted only once in determining whether the maximum number of Shares with
respect to which Awards may be granted under the Plan has been exceeded. An
Award shall not be considered to have been made under the Plan with respect to
any Option or Right which terminates or with respect to Restricted Stock which
is forfeited, and new Awards may be granted under the Plan with respect to the
number of Shares as to which such termination or forfeiture has occurred.

6. General Terms and Conditions of Options and Rights. The Committee
shall have full and complete authority and discretion, except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms
and conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than
the Market Value per Share at the date of grant of such Option or Right,
except as set forth in Section 21 hereof, (ii) the number of Shares subject
to, and the expiration date of, any Option or Right, which expiration date
shall not exceed ten years from the date of grant, (iii) the manner, time and
rate (cumulative or otherwise) of exercise of such Option or Right, and (iv)
the restrictions, if any, to be placed upon such Option or Right or upon
Shares which may be issued upon exercise of such Option or Right. The
Committee may, as a condition of granting any Option or Right, require that a
Participant agree not to thereafter exercise one or more Options or Rights
previously granted to such Participant.

7. Exercise of Options or Rights.

(a) An Option or Right granted under the Plan shall be exercisable
during the lifetime of the Participant to whom such Option or Right was
granted only by such Participant and, except as provided in paragraphs (c) and
(d) of this Section 7, no such Option or Right may be exercised unless at the
time such Participant exercises such Option or Right, such Participant has
maintained Continuous Service since the date of grant of such Option or Right.

(b) To exercise an Option or Right under the Plan, the Participant
to whom such Option or Right was granted shall give written notice to the
Corporation in form satisfactory to the Committee (and, if partial exercises
have been permitted by the Committee, by specifying the number of Shares with
respect to which such Participant elects to exercise such Option or Right)
together with full payment of the Exercise Price, if any and to the extent
required. The date of exercise shall be the date on which such notice is
received by the Corporation. Payment, if any is required, shall be made
either (i) in cash (including check, bank draft or money order) or (ii) by
delivering (A) Shares already owned by the Participant and having a fair
market value equal to the applicable exercise price, such fair market value to
be determined in such appropriate manner as may be provided by the Committee
or as may be required in order to comply with or to conform to requirements of
any applicable laws or regulations, or (B) a combination of cash and such
Shares.

(c) If a Participant to whom an Option or Right was granted shall
cease to maintain Continuous Service for any reason (including total or
partial disability and normal or early retirement, but excluding death and
termination of employment by the Corporation or any Affiliate for cause), such
Participant may, but only within the period of three months immediately
succeeding such cessation of Continuous Service and in no event after the
expiration date of such Option or Right, exercise such Option or Right to the
extent that such Participant was entitled to exercise such Option or Right at
the date of such cessation, provided, however, that such right of exercise
after cessation of Continuous Service shall not be available to a Participant
if the Committee otherwise determines and so provides in the applicable
instrument or instruments evidencing the grant of such Option or Right.
Notwithstanding the foregoing, if a Participant to whom an Option or Right was
granted shall cease to maintain Continuous Service due to normal retirement,
and such Participant has served the Corporation or the Association for at
least five years, such Option or Right granted to such Participant shall
become immediately exercisable, and the Participant may, but only during the
period of three years immediately succeeding such cessation of Continuous
Service and in no event after the expiration of such Option or Right, exercise
such Option or Right. If the Continuous Service of a Participant to whom an
Option or Right was granted by the Corporation is terminated for cause, all
rights under any Option or Right of such Participant shall expire immediately
upon the giving to the Participant of notice of such termination.

(d) In the event of the death of a Participant while in the
Continuous Service of the Corporation or an Affiliate or within the three
month and three year periods referred to in paragraph (c) of this Section 7,
the person to whom any Option or Right held by the Participant at the time of
his death is transferred by will or the laws of descent and distribution may,
but only to the extent such Participant was entitled to exercise such Option
or Right immediately prior to his death, exercise such Option or Right at any
time within a period of one year succeeding the date of death of such
Participant, but in no event later than ten years from the date of grant of
such Option or Right. Following the death of any Participant to whom an
Option was granted under the Plan, irrespective of whether any Related Right
shall have theretofore been granted to the Participant or whether the person
entitled to exercise such Related Right desires to do so, the Committee may,
as an alternative means of settlement of such Option, elect to pay to the
person to whom such Option is transferred by will or by the laws of descent
and distribution or, with respect to an Award other than an Incentive Stock
Option, pursuant to a qualified domestic relations order as defined in the
Code or Title I of the ERISA or the rules thereunder, the amount by which the
Market Value per Share on the date of exercise of such Option shall exceed the
Exercise Price of such Option, multiplied by the number of Shares with respect
to which such Option is properly exercised. Any such settlement of an Option
shall be considered an exercise of such Option for all purposes of the Plan.

8. Incentive Stock Options. Incentive Stock Options may be granted
only to Participants who are Employees. Any provision of the Plan to the
contrary notwithstanding, (i) no Incentive Stock Option shall be granted more
than ten years from the date the Plan is adopted by the Board of Directors of
the

Corporation and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value
per Share on the date such Incentive Stock Option is granted, (iii) any
Incentive Stock Option shall not be transferable by the Participant to whom
such Incentive Stock Option is granted other than by will or the laws of
descent and distribution and shall be exercisable during such Participant's
lifetime only by such Participant, (iv) no Incentive Stock Option shall be
granted to any individual who, at the time such Incentive Stock Option is
granted, owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Corporation or any Affiliate
unless the Exercise Price of such Incentive Stock Option is at least 110
percent of the Market Value per Share at the date of grant and such Incentive
Stock Option is not exercisable after the expiration of five years from the
date such Incentive Stock Option is granted, and (v) the aggregate Market
Value (determined as of the time any Incentive Stock Option is granted) of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by a Participant in any calendar year shall not exceed $100,000.

9. Stock Appreciation Rights. A Stock Appreciation Right shall, upon
its exercise, entitle the Participant to whom such Stock Appreciation Right
was granted to receive a number of Shares or cash or combination thereof, as
the Committee in its discretion shall determine, the aggregate value of which
(i.e., the sum of the amount of cash and/or Market Value of such Shares on
date of exercise) shall equal (as nearly as possible, it being understood that
the Corporation shall not issue any fractional shares) the amount by which the
Market Value per Share on the date of such exercise shall exceed the Exercise
Price of such Stock Appreciation Right, multiplied by the number of Shares
with respect to which such Stock Appreciation Right shall have been exercised.
A Stock Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in each
case determine. At the time of grant of an Option the Committee shall
determine whether and to what extent a Related Stock Appreciation Right shall
be granted with respect thereto; provided, however, and notwithstanding any
other provision of the Plan, that if the Related Option is an Incentive Stock
Option, the Related Stock Appreciation Right shall satisfy all the
restrictions and limitations of Section 8 hereof as if such Related Stock
Appreciation Right were an Incentive Stock Option and as if other rights which
are Related to Incentive Stock Options were Incentive Stock Options. In the
case of a Related Option, such Related Option shall cease to be exercisable to
the extent of the Shares with respect to which the Related Stock Appreciation
Right was exercised. Upon the exercise or termination of a Related Option,
any Related Stock Appreciation Right shall terminate to the extent of the
Shares with respect to which the Related Option was exercised or terminated.

10. Limited Stock Appreciation Rights. At the time of grant of an
Option or Stock Appreciation Right to any Participant, the Committee shall
have full and complete authority and discretion to also grant to such
Participant a Limited Stock Appreciation Right which is Related to such Option
or Stock Appreciation Right; provided, however, and notwithstanding any other
provision of the Plan, that if the Related Option is an Incentive Stock
Option, the Related Limited Stock Appreciation Right shall satisfy all the
restrictions and limitations of Section 8 hereof as if such Related Limited
Stock Appreciation Right were an Incentive Stock Option and as if all other
Rights which are Related to Incentive Stock Options were Incentive Stock
Options. Notwithstanding any other provision of the Plan, a Limited Stock
Appreciation Right shall be exercisable only during the period beginning on
the first day following the date of expiration of any "offer" (as such term is
hereinafter defined) and ending on the forty-fifth day following such date.

A Limited Stock Appreciation Right shall, upon its exercise, entitle the
Participant to whom such Limited Stock Appreciation Right was granted to
receive an amount of cash equal to the amount by which the "Offer Price per
Share" (as such term is hereinafter defined) or the Market Value on the date
of such exercise, as shall have been provided by the Committee in its
discretion at the time of grant, shall exceed the Exercise Price of such

<PAGE>

Limited Stock Appreciation Right, multiplied by the number of Shares with
respect to which such Limited Stock Appreciation Right shall have been
exercised. Upon the exercise of a Limited Stock Appreciation Right, any
Related Option and/or Related Stock Appreciation Right shall cease to be
exercisable to the extent of the Shares with respect to which such Limited
Stock Appreciation Right was exercised. Upon the exercise or termination of
a Related Option or Related Stock Appreciation Right, any Related Limited
Stock Appreciation Right shall terminate to the extent of the Shares with
respect to which such Related Option or Related Stock Appreciation Right
was exercised or terminated.

For the purposes of this Section 10, the term "Offer" shall mean any
tender offer or exchange offer for Shares other than one made by the
Corporation, provided that the corporation, person or other entity making the
offer acquires pursuant to such offer either (i) 25% of the Shares outstanding
immediately prior to the commencement of such offer or (ii) a number of Shares
which, together with all other Shares acquired in any tender offer or exchange
offer (other than one made by the Corporation) which expired within sixty days
of the expiration date of the offer in question, equals 25% of the Shares
outstanding immediately prior to the commencement of the offer in question.
The term "Offer Price per Share" as used in this Section 10 shall mean the
highest price per Share paid in any Offer which Offer is in effect any time
during the period beginning on the sixtieth day prior to the date on which a
Limited Stock Appreciation Right is exercised and ending on the date on which
such Limited Stock Appreciation Right is exercised. Any securities or
property which are part or all of the consideration paid for Shares in the
Offer shall be valued in determining the Offer Price per Share at the higher
of (A) the valuation placed on such securities or property by the corporation,
person or other entity making such Offer or (B) the valuation placed on such
securities or property by the Committee.

11. Terms and Conditions of Restricted Stock. The Committee shall have
full and complete authority, subject to the limitations of the Plan, to grant
awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 11, to provide such
other terms and conditions (which need not be identical among Participants) in
respect of such Awards, and the vesting thereof, as the Committee shall
determine and provide in the agreement referred to in paragraph (d) of this
Section 11.

(a) At the time of an award of Restricted Stock, the Committee
shall establish for each Participant a Restricted Period during which or at
the expiration of which, as the Committee shall determine and provide in the
agreement referred to in paragraph (d) of this Section 11, the Shares awarded
as Restricted Stock shall vest. Subject to any such other terms and
conditions as the Committee shall provide, shares of Restricted Stock may not
be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, except as hereinafter provided, during the Restricted Period.
Except for such restrictions, and subject to paragraphs (c), (d) and (e) of
this Section 11 and Section 12 hereof, the Participant as owner of such shares
shall have all the rights of a stockholder, including but not limited to the
right to receive all dividends paid on such shares and the right to vote such
shares. The Committee shall have the authority, in its discretion, to
accelerate the time at which any or all of the restrictions shall lapse with
respect to any shares of Restricted Stock prior to the expiration of the
Restricted Period with respect thereto, or to remove any or all of such
restrictions, whenever it may determine that such action is appropriate by
reason of changes in applicable tax or other laws or other changes in
circumstances occurring after the commencement of such Restricted Period.

(b) Except as provided in Section 14 hereof, if a Participant
ceases to maintain Continuous Service for any reason (other than death, total
or partial disability or normal or early retirement), unless the Committee
shall otherwise determine, all shares of Restricted Stock theretofore awarded
to such Participant and which at the time of such termination of Continuous
Service are subject to the restrictions imposed by paragraph (a) of this
Section 11 shall upon such termination of Continuous Service be forfeited and
returned to the Corporation. Unless the Committee shall have provided in the
agreement referred to in

paragraph (d) of this Section 11 for a ratable lapse of restrictions with
respect to an award of shares of Restricted Stock during the Restricted
Period, if a Participant ceases to maintain Continuous Service by reason of
death, total or partial disability or normal or early retirement, such portion
of such shares of Restricted Stock awarded to such Participant which at the
time of such termination of Continuous Service are subject to the restrictions
imposed by paragraph (a) of this Section 11 as shall be equal to the portion
of the Restricted Period with respect to such shares which shall have elapsed
at the time of such termination of Continuous Service shall be free of
restrictions and shall not be forfeited.

(c) Each certificate in respect of shares of Restricted Stock
awarded under the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in blank,
with the Corporation and shall bear the following (or a similar) legend:

"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the 1993 Stock Option and Incentive Plan of Fort Bend
Holding Corp. and an Agreement entered into between the registered owner and
Fort Bend Holding Corp. Copies of such Plan and Agreement are on file in the
offices of the Secretary of Fort Bend Holding Corp., 1011 Millie Street,
Rosenberg, Texas 77471-3808.

(d) At the time of an award of shares of Restricted Stock, the
Participant may enter into an Agreement with the Corporation in a form
specified by the Committee, agreeing to the terms and conditions of the award
and such other matters as the Committee shall in its sole discretion
determine.

(e) At the time of an award of shares of Restricted Stock, the
Committee may, in its discretion, determine that the payment to the
Participant of dividends declared or paid on such shares, or specified portion
thereof, by the Corporation shall be deferred until the earlier to occur of
(i) the lapsing of the restrictions imposed under paragraph (a) of this
Section 11 or (ii) the forfeiture of such shares under paragraph (b) of this
Section 11, and shall be held by the Corporation for the account of the
Participant until such time. In the event of such deferral, there shall be
credited at the end of each year (or portion thereof) interest on the amount
of the account at the beginning of the year at a rate per annum as the
Committee, in its discretion, may determine. Payment of deferred dividends,
together with interest accrued thereon as aforesaid, shall be made upon the
earlier to occur of the events specified in (i) and (ii) of the immediately
preceding sentence.

(f) At the expiration of the restrictions imposed by paragraph (a)
of this Section 11, the Corporation shall redeliver to the Participant (or
where the relevant provision of paragraph (b) of this Section 11 applies in
the case of a deceased Participant, to his legal representative, beneficiary
or heir) the certificate(s) and stock power deposited with it pursuant to
paragraph (c) of this Section 11 and the Shares represented by such
certificate(s) shall be free of the restrictions referred to in paragraph (a)
of this Section 11.

12. Adjustments Upon Changes in Capitalization. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan
by reason of any reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation or any
change in the corporate structure or Shares of the Corporation, the maximum
aggregate number and class of shares as to which Awards may be granted under
the Plan and the number and class of shares with respect to which Awards
theretofore have been granted under the Plan shall be appropriately adjusted
by the Committee, whose determination shall be conclusive. Any shares of
stock or other securities received, as a result of any of the foregoing, by a
Participant with respect to Restricted Stock shall be subject to the same
restrictions and the certificate(s) or other instruments representing or
evidencing such shares or securities shall be legended and deposited with the
Corporation in the manner provided in Section 11 hereof.<PAGE>
<PAGE>

13. Effect of Merger on Options or Rights. In the event of any merger
or consolidation of the Corporation (other than a merger or consolidation in
which the Corporation is the continuing entity and which does not result in
the outstanding Shares being converted into or exchanged for different
securities, cash or other property, or any combination thereof) pursuant to a
plan or agreement the terms of which are binding upon all stockholders of the
Corporation (except to the extent that dissenting stockholders may be
entitled, under statutory provisions or provisions contained in the
certificate of incorporation, to receive the appraised or fair value of their
holdings), any Participant to whom an Option or Right has been granted shall
have the right (subject to the provisions of the Plan and any limitation
applicable to such Option or Right), thereafter and during the term of each
such Option or Right, to receive upon exercise of any such Option or Right an
amount equal to the excess of the fair market value on the date of such
exercise of the securities, cash or other property, or combination thereof,
receivable upon such merger, consolidation or combination in respect of a
Share over the Exercise Price of such Right or Option, multiplied by the
number of Shares with respect to which such Option or Right shall have been
exercised. Such amount may be payable fully in cash, fully in one or more of
the kind or kinds of property payable in such merger, consolidation or
combination, or partly in cash and partly in one or more of such kind or kinds
of property, all in the discretion of the Committee.

14. Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 14 shall be deemed a
"change of control": (i) any third person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, shall become the
beneficial owner of shares of the Corporation with respect to which 25% or
more of the total number of votes for the election of the Board of Directors
of the Corporation may be cast, (ii) as a result of, or in connection with,
any cash tender offer, merger or other business combination, sale of assets or
contested election, or combination of the foregoing, the persons who were
directors of the Corporation shall cease to constitute a majority of the Board
of Directors of the Corporation or (iii) the shareholders of the Corporation
shall approve an agreement providing either for a transaction in which the
Corporation will cease to be an independent publicly owned entity or for a
sale or other disposition of all or substantially all the assets of the
Corporation; provided, however, that the occurrence of any such events shall
not be deemed a "change in control" if, prior to such occurrence, a resolution
specifically approving such occurrence shall have been adopted by at least a
majority of the Board of Directors of the Corporation. If the Continuous
Service of any Participant of the Corporation or any Affiliate is
involuntarily terminated for whatever reason, at any time within eighteen
months after a change in control, unless the Committee shall have otherwise
provided in the agreement referred to in paragraph (d) of Section 11 hereof,
any Restricted Period with respect to Restricted Stock theretofore awarded to
such Participant shall lapse upon such termination and all Shares awarded as
Restricted Stock shall become fully vested in the Participant to whom such
Shares were awarded. If a tender offer or exchange offer for Shares (other
than such an offer by the Corporation) is commenced, or if the event specified
in clause (iii) above shall occur, unless the Committee shall have otherwise
provided in the instrument evidencing the grant of an Option or Stock
Appreciation Right, all Options and Stock Appreciation Rights theretofore
granted and not fully exercisable shall become exercisable in full upon the
happening of such event and shall remain so exercisable for a period of sixty
days following such date, after which they shall revert to being exercisable
in accordance with their terms; provided, however, that no Option or Stock
Appreciation Right which has previously been exercised or otherwise terminated
shall become exercisable.

15. Assignments and Transfers. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the
Plan may be assigned, encumbered or transferred except, in the event of the
death of a Participant, by will or the laws of descent and distribution or in
the case of an Award other than an Incentive Stock Option, pursuant to a
qualified domestic relations order as defined in the Code or Title I of the
ERISA or the rules thereunder.<PAGE>
<PAGE>

16. Employee Rights Under the Plan. No director, officer or employee
shall have a right to be selected as a Participant nor, having been so
selected, to be selected again as a Participant and no director, officer,
employee or other person shall have any claim or right to be granted an Award
under the Plan or under any other incentive or similar plan of the Corporation
or any Affiliate. Neither the Plan nor any action taken thereunder shall be
construed as giving any employee any right to be retained in the employ of the
Corporation or any Affiliate.

17. Delivery and Registration of Stock. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests,
be conditioned upon the receipt of a representation as to the investment
intention of the Participant to whom such Shares are to be delivered, in such
form as the Committee shall determine to be necessary or advisable to comply
with the provisions of the Securities Act of 1933 or any other Federal, state
or local securities legislation or regulation. It may be provided that any
representation requirement shall become inoperative upon a registration of the
Shares or other action eliminating the necessity of such representation under
such Securities Act or other securities legislation. The Corporation shall
not be required to deliver any Shares under the Plan prior to (i) the
admission of such shares to listing on any stock exchange on which Shares may
then be listed, and (ii) the completion of such registration or other
qualification of such Shares under any state or Federal law, rule or
regulation, as the Committee shall determine to be necessary or advisable.

18. Withholding Tax. Upon the termination of the Restricted Period with
respect to any shares of Restricted Stock (or at any such earlier time, if
any, that an election is made by the Participant under Section 83(b) of the
Code, or any successor provision thereto, to include the value of such shares
in taxable income), the Corporation shall have the right to require the
Participant or other person receiving such shares to pay the Corporation the
amount of any taxes which the Corporation is required to withhold with respect
to such shares, or, in lieu thereof, to retain or sell without notice, a
sufficient number of shares held by it to cover the amount required to be
withheld. The Corporation shall have the right to deduct from all dividends
paid with respect to shares of Restricted Stock the amount of any taxes which
the Corporation is required to withhold with respect to such dividend
payments.

The Corporation shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a Right under the Plan any taxes required
by law to be withheld with respect to such cash payments. Where a Participant
or other person is entitled to receive Shares pursuant to the exercise of an
Option or Right pursuant to the Plan, the Corporation shall have the right to
require the Participant or such other person to pay the Corporation the amount
of any taxes which the Corporation is required to withhold with respect to
such Shares, or, in lieu thereof, to retain, or sell without notice, a number
of such Shares sufficient to cover the amount required to be withheld.

19. Amendment or Termination. The Board of Directors of the Corporation
may amend, suspend or terminate the Plan or any portion thereof at any time,
but (except as provided in Section 12 hereof) no amendment shall be made
without approval of the stockholders of the Corporation which shall (i)
materially increase the aggregate number of Shares with respect to which
Awards may be made under the Plan, (ii) materially increase the aggregate
number of Shares which may be subject to Awards to Participants who are not
Employees or (iii) change the class of persons eligible to participate in the
Plan; provided, however, that no such amendment, suspension or termination
shall impair the rights of any Participant, without his consent, in any Award
theretofore made pursuant to the Plan.

20. Effective Date and Term of Plan. The Plan shall become effective
upon its adoption by the Board of Directors of the Corporation, subject to the
Association converting to a stock institution and approval of the Plan by vote
of the holders of a majority of the outstanding shares of the Corporation
entitled to vote on the adoption of the Plan. It shall continue in effect for
a term of ten years unless sooner terminated under Section 19 hereof.<PAGE>
<PAGE>

21. Initial Grant. By, and simultaneously with, the adoption of this
Plan, each member of the Board of Directors of the Corporation and/or the
Association at the time of the Association's conversion to stock form, and
each newly elected member as of the date of his election to the Board of
Directors of the Corporation and/or the Association, who is not a full-time
Employee, is hereby granted Options to purchase an amount of shares equal to
3,839 Shares and 100 Shares, respectively. Each such Option shall be
evidenced by a Non-Qualified Stock Option Agreement in a form approved by the
Board of Directors and shall be subject in all respects to the terms and
conditions of this Plan, which are controlling.