-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G3jtxQXFZfKpq5A9Q9+topSU33vOy1vVoBdY0KrryKakq089SNdn0rvi+gLpSrU4 1m9hhEPcorriL1c4mJzCbg== 0000890566-99-000782.txt : 19990623 0000890566-99-000782.hdr.sgml : 19990623 ACCESSION NUMBER: 0000890566-99-000782 CONFORMED SUBMISSION TYPE: 11-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990622 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEXAS REGIONAL BANCSHARES INC CENTRAL INDEX KEY: 0000787648 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 742294235 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K/A SEC ACT: SEC FILE NUMBER: 000-14517 FILM NUMBER: 99649989 BUSINESS ADDRESS: STREET 1: 3700 N TENTH STE 301 STREET 2: PO BOX 5910 CITY: MCALLEN STATE: TX ZIP: 78501 BUSINESS PHONE: 9566315400 MAIL ADDRESS: STREET 1: P O BOX 5910 STREET 2: P O BOX 5910 CITY: MCALLEN STATE: TX ZIP: 78501-5910 11-K/A 1 FORM 11-K AMENDMENT N0. 1 [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 33-39386 A. Full title of the plan and the address of plan, if different from that of the issuer named below: TEXAS REGIONAL BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN (including 401(k) provisions) B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: TEXAS REGIONAL BANCSHARES, INC. 3900 North 10th Street, 11th floor McAllen, Texas 78501 REQUIRED INFORMATION ITEM 1 AND 2. FINANCIAL STATEMENTS INDEPENDENT AUDITORS' REPORT Administrative Committee Texas Regional Bancshares, Inc. Employee Stock Ownership Plan (With 401(k) Provisions): We have audited the accompanying statements of net assets available for plan benefits of Texas Regional Bancshares, Inc. Employee Stock Ownership Plan (with 401(k) provisions) as of December 31, 1998 and 1997 and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan administrator. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Plan administrator, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of Texas Regional Bancshares, Inc. Employee Stock Ownership Plan (with 401(k) provisions) as of December 31, 1998 and 1997, and the changes in net assets available for plan benefits for the years ended December 31, 1998 and 1997, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The information contained in the Schedule is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The information in the Schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ KPMG PEAT MARWICK LLP Houston, Texas April 9, 1999 TEXAS REGIONAL BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN (With 401(k) Provisions) Statements of Net Assets Available for Plan Benefits December 31, 1998 and 1997 ASSETS 1998 1997 ----------- ----------- Investments, at fair value (note 3): Certificates of deposit $ 983,534 753,564 U.S. government securities -- 293 Common stock 13,383,275 15,743,429 Participant loans 4,449 -- ----------- ----------- Total investments 14,371,258 16,497,286 ----------- ----------- Cash 44,463 134,960 Employer contributions receivable -- 8,988 ----------- ----------- Net assets available for plan benefits $14,415,721 16,641,234 =========== =========== See accompanying notes to financial statements. 2 TEXAS REGIONAL BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN (With 401(k) Provisions) Statements of Changes in Net Assets Available for Plan Benefits Years ended December 31, 1998 and 1997 1998 1997 ------------ ------------ Investment income: Net (depreciation) appreciation in fair value of common stock (note 3) $ (2,772,518) 3,952,624 Interest 55,250 40,847 Dividends 234,268 161,751 Employer contributions 480,000 648,988 Employee contributions 614,191 400,594 ------------ ------------ Total additions (1,388,809) 5,204,804 ------------ ------------ Benefits paid to participants 836,704 700,458 ------------ ------------ Net (decrease) increase in net assets available for plan benefits (2,225,513) 4,504,346 Net assets available for plan benefits: Beginning of year 16,641,234 12,136,888 ------------ ------------ End of year $ 14,415,721 16,641,234 ============ ============ See accompanying notes to financial statements. 3 TEXAS REGIONAL BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN (With 401(k) Provisions) Notes to Financial Statements December 31, 1998 and 1997 (1) DESCRIPTION OF THE PLAN The following description of Texas Regional Bancshares, Inc.'s (the Company) Employee Stock Ownership Plan (with 401(k) provisions) (the ESOP or Plan) provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan's provisions. (A) GENERAL The Texas Regional Bancshares, Inc. Employee Stock Ownership Plan (with 401(k) provisions) is a defined contribution plan established effective January 1, 1990 for eligible employees of Texas Regional Bancshares, Inc. and its subsidiary. The ESOP is a complete amendment and restatement of the Texas Regional Bancshares, Inc. Target Benefit Plan (the Target Benefit Plan), a target benefit plan established effective January 1, 1984 for eligible employees of the Company and its subsidiaries. The Plan is a stock bonus plan containing Section 401(k) features that is intended to qualify under Section 401(a) of the Internal Revenue Code, as amended (the Code). The Plan is also designed to be an employee stock ownership plan under Section 4975(e)(7) of the Code. It is subject to the provisions of the Employee Retirement Income Security Act of 1974. All employees who participated in the Company's Target Benefit Plan continue to participate in the ESOP. Each other employee is eligible to participate in the ESOP on January 1 or July 1 immediately following the completion of one year of service, as defined in the Plan provided the employee has attained the age of 21. (B) CONTRIBUTIONS A participant may authorize the Company and its subsidiary (collectively referred to as Employer) to reduce his salary and contribute to the 401(k) account an amount which shall not be less than one (1) percent or more than fifteen (15) percent of the participant's compensation. Such contributions when taken into account with other employer contributions shall not exceed the maximum deferral percentage computed in accordance with Internal Revenue Code 401(k)(3). The Employer may make a Discretionary Matching Contribution (Matching Contribution), a Discretionary Basic Contribution (Basic Contribution) and a Discretionary Optional Contribution (Optional Contribution). All Employer Contributions shall be determined at the sole discretion of the Board of Directors of the Company. A Matching Contribution may be made on behalf of each participant up to a maximum of one hundred (100) percent of the participant's salary reduction contribution. The maximum Matching Contribution shall be based on a participant's salary reduction contribution; however, the Matching Contribution shall not exceed four (4) percent of a participant's compensation. Contributions to the Plan are subject to limitations. 4 (continued) TEXAS REGIONAL BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN (With 401(k) Provisions) Notes to Financial Statements December 31, 1998 and 1997 (C) PARTICIPANT ACCOUNTS Each participant's account is adjusted annually with the amount of Employer contributions, participants' contributions, if any, forfeitures and Plan earnings. Employer optional contributions and forfeitures are allocated in proportion to the amount that each participant's adjusted compensation, as defined, bears to the aggregate of all such participant's adjusted compensation at the end of the plan year. The Basic Contribution, if any, is allocated as of the anniversary date, defined as the 31st day of December (last day of Plan year), among the entitled participants in a manner necessary to satisfy the nondiscrimination requirements of the Code. Employer Matching Contributions, if any, are allocated as of the anniversary date among the participants based upon their salary reduction contributions. (D) VESTING Participants are immediately vested in their 401(k) contributions and Employer Basic and Matching Contributions plus allocated earnings thereon. Vesting in the remainder of their accounts is based on years of service. A participant is 100 percent vested after six years of service, upon death, upon reaching normal retirement age or upon becoming disabled. The Plan is not considered top heavy under the Code Section 416. (E) PARTICIPANT LOANS Participants may borrow from their accounts up to a maximum equal to the lesser of $50,000 or 50 percent of their account balance. Loan terms shall not exceed five years unless the loan is for the primary residence of the participant. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined by the Administrative Committee. (F) PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. The amounts in the Plan's participant accounts are then distributed to the Plan's participants who become automatically 100% vested upon Plan termination. (G) PAYMENT OF BENEFITS On termination of service, with the approval of the Administrative Committee, a participant may elect to receive either the normal form of payment which is a straight life annuity if single or a qualified joint and survivor annuity if married or one of the optional forms of payment. The optional forms of payment include a lump-sum amount equal to the vested balance of the account, installments certain not to exceed the greater of the life expectancy of the participant or the joint lives and last survivor expectancies of the participant and the participant's designated beneficiary, a combination of the previous methods of payment or a direct rollover to a rollover account. 5 (continued) TEXAS REGIONAL BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN (With 401(k) Provisions) Notes to Financial Statements December 31, 1998 and 1997 (H) ADMINISTRATION AND TRUSTEES The general administration of the Plan is performed by the Administrative Committee appointed by the Board of Directors of the Company. This administrator has broad powers regarding supervision and administration of the Plan. Pursuant to the terms of the Plan, the Company's Board of Directors has appointed three members to act on a Board of Trustees. Among other duties, the Board of Trustees is responsible for receiving and investing contributions, managing investments, making payments to members in accordance with the Plan and performing other actions as directed by the administrator. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) BASIS OF PRESENTATION The accompanying financial statements have been prepared on the accrual basis of accounting. (B) USE OF ESTIMATES The Plan administrator has made a number of estimates and assumptions relating to reporting of assets to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. (C) INVESTMENTS All of the investments of the Plan are held in trust by the Company and the Federal Reserve. All investments are stated at fair value except participant loans which are at contract value. Unrealized appreciation or depreciation in the fair value of investments held at year end and realized gain or loss on sales of investments during the year are determined using the realized value at the beginning of the year or cost if acquired since that date. Purchases and sales of securities are recorded on a trade date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the record date. (D) TAX STATUS The Plan obtained its latest determination letter on July 29, 1993, in which the Internal Revenue Service stated that the plan, as then designated, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. The Plan has not applied for a new determination letter. The Plan administrator believes the Plan is currently designed and operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, they believe that the Plan was qualified and tax exempt as of the financial statement date. 6 (continued) TEXAS REGIONAL BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN (With 401(k) Provisions) Notes to Financial Statements December 31, 1998 and 1997 (E) EXPENSES All expenses incident to the administration of the Plan may be paid by the Company and, if not paid by the Company, shall be paid by the Plan. The Company elected to pay all expenses in the years ended December 31, 1998 and 1997. (3) INVESTMENTS COMPRISING AT LEAST 5% OF NET ASSETS AVAILABLE FOR PLAN BENEFITS The following individual investments comprised at least 5% of net assets available for plan benefits at December 31, 1998. IDENTITY OF ISSUE, DESCRIPTION FAIR BORROWER, OR SIMILAR PARTY OF INVESTMENT COST VALUE ---------------------------- --------------------- ----------- ----------- Texas Regional Bancshares, Common stock, 533,966 $ 4,244,725 13,383,275 Inc. shares, $1 par value 7 SCHEDULE TEXAS REGIONAL BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN (With 401(k) Provisions) Item 27(a) - Schedule of Assets Held for Investment Purposes December 31, 1998
IDENTITY OF ISSUE, BORROWER, LESSOR, FAIR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE - -------------------------------- -------------------------------------- -------------- -------------- Certificates of deposit: * Texas State Bank 5.00%, due March 1, 1999 $ 50,262 50,262 * Texas State Bank 6.00%, due March 1, 1999 262,764 262,764 * Texas State Bank 5.75%, due June 2, 1999 228,125 228,125 * Texas State Bank 5.65%, due September 2, 1999 64,258 64,258 * Texas State Bank 5.65%, due September 2, 1999 164,998 164,998 * Texas State Bank 4.50%, due December 1, 1999 213,127 213,127 Common stock: * Texas Regional Common stock 533,966 shares, Bancshares, Inc. $1 par value 4,244,725 13,383,275 - Participant loans, bearing interest at 6%, due in 2003 4,449 4,449 -------------- -------------- $ 5,232,708 14,371,258 ============== ==============
* Party-in-interest See accompanying independent auditors' report 8 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. TEXAS REGIONAL BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN (Including 401(k) provisions) Date: ___________________________ ______________________________________ G. E. Roney Trustee INDEX TO EXHIBITS FILED HEREWITH SEQUENTIALLY EXHIBIT NUMBERED NUMBER EXHIBIT PAGE - ------- ------- ------------ 1 Independent Auditors' Consent EX-1 2 EXHIBIT 1 INDEPENDENT AUDITORS' CONSENT The Board of Trustees Texas Regional Bancshares, Inc.: We consent to the incorporation by reference in the Registration Statement on Form S-8 of Texas Regional Bancshares, Inc. (filed under Securities and Exchange Commission File No. 33-39386) of our report dated April 9, 1999, relating to the statement of net assets available for plan benefits of Texas Regional Bancshares, Inc. Employee Stock Ownership Plan (with 401(k) provisions) at December 31, 1998, the related statement of changes in net assets available for plan benefits for the year ended December 31, 1998, which report appears in the December 31, 1998 annual report of Form 11-K of Texas Regional Bancshares, Inc. Employee Stock Ownership Plan (with 401(k) provisions). /s/ KPMG PEAT MARWICK LLP Houston, Texas June 22, 1999 -----END PRIVACY-ENHANCED MESSAGE-----