-----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, QYuL5oTyMfOdImkfNQC1+G7skLO05fLkwyc18ILRWuYEJybw8OfxNenFOkespS8h CWHLLcfFOTr+mM+M4WNw+Q== 0000899243-96-001343.txt : 19961028 0000899243-96-001343.hdr.sgml : 19961028 ACCESSION NUMBER: 0000899243-96-001343 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960816 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961025 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORT BEND HOLDING CORP CENTRAL INDEX KEY: 0000896766 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 760391720 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21328 FILM NUMBER: 96647799 BUSINESS ADDRESS: STREET 1: 3400 AVENUE H CITY: ROSENBERG STATE: TX ZIP: 77471 BUSINESS PHONE: 7133425571 8-K/A 1 FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) August 16, 1996 FORT BEND HOLDING CORP. ----------------------------------------------------------------- (Exact name of Registrant as specified in its Charter) DELAWARE 0-21328 76-0391720 - ----------------------------- --------------------- ----------------------- (State or other jurisdiction (Commission File No.) (IRS Employer of incorporation) Identification Number) 3400 AVENUE H, ROSENBERG, TEXAS 77471-3808 - ---------------------------------------- ------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 342-5571 ------------------------------------------------------------------------ ------------------------------------------------------------------------ (Former name or former address, if changed since last report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of business acquired [COOPERS & LYBRAND LETTERHEAD APPEARS HERE] FIRSTBANC SAVINGS ASSOCIATION OF TEXAS FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS FOR THE YEARS ENDED APRIL 30, 1996 AND 1995 TABLE OF CONTENTS
Page Report of Independent Accountants 1 Financial Statements: Statement of Financial Condition as of April 30, 1996 and 1995 2 Statement of Income for the years ended April 30, 1996 and 1995 3 Statement of Changes in Stockholders' Equity for the years ended April 30, 1996 and 1995 4 Statement of Cash Flows for the years ended April 30, 1996 and 1995 5 Notes to Financial Statements 6
[COOPERS & LYBRAND LETTERHEAD APPEARS HERE] REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors FirstBanc Savings Association of Texas: We have audited the accompanying statements of financial condition of FirstBanc Savings Association of Texas (the "Association") as of April 30, 1996 and 1995 and the related statements of income, changes in stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Association's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in Note 17, in May 1996, the Association entered into an agreement to be acquired by Fort Bend Holding Corp. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Association as of April 30, 1996 and 1995 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/ COOPERS & LYBRAND L.L.P. Houston, Texas July 12, 1996 FirstBanc Savings Association of Texas Statement of Financial Condition April 30, 1996 and 1995
ASSETS 1996 1995 ----------- ----------- Cash and cash equivalents $ 6,224,248 $ 1,246,934 Certificates of deposit 199,641 Investment securities held to maturity 989,091 Mortgage-backed securities held to maturity 4,512,103 Mortgage loans held for sale 259,096 339,050 Loans receivable, net 22,810,780 26,615,017 Office premises and equipment, net 608,083 624,348 Accrued interest receivable 239,693 334,037 Real estate owned 735,879 210,830 Federal Home Loan Bank stock, at cost 364,300 342,000 Prepaid expenses and other assets 163,794 101,372 Income taxes receivable 21,585 40,911 Deferred income taxes 35,604 56,209 ----------- ----------- Total assets $31,463,062 $35,611,543 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits $28,095,387 $29,850,540 Borrowings 2,400,000 Advances from borrowers for taxes and insurance 93,454 125,429 Accrued interest payable 68,482 90,727 Other liabilities 124,659 172,475 ----------- ----------- Total liabilities 28,381,982 32,639,171 ----------- ----------- Commitments and contingencies Stockholders' equity: Common stock, $5.00 par value, 500,000 shares authorized 300,000 shares issued and outstanding 1,500,000 1,500,000 Additional paid-in capital 1,725,000 1,725,000 Accumulated deficit (143,920) (252,628) ----------- ----------- Total stockholders' equity 3,081,080 2,972,372 ----------- ----------- Total liabilities and stockholders' equity $31,463,062 $35,611,543 =========== ===========
The accompanying notes are an integral part of the financial statements. 2 FirstBanc Savings Association of Texas Statement of Income for the years ended April 30, 1996 and 1995
1996 1995 ---------- ---------- Interest income: Loans $2,542,579 $2,536,643 Investments 343,558 345,337 ---------- ---------- Total interest income 2,886,137 2,881,980 ---------- ---------- Interest expense: Time deposits 933,318 850,621 Savings deposits 221,562 229,367 Demand deposits 66,564 69,714 Borrowed funds 44,822 43,986 ---------- ---------- Total interest expense 1,266,266 1,193,688 ---------- ---------- Net interest income 1,619,871 1,688,292 Provision for loan losses 144,000 51,206 ---------- ---------- Net interest income after provision for loan losses 1,475,871 1,637,086 ---------- ---------- Noninterest income: Income from mortgage loan sales 109,180 131,227 Service fee income 183,366 165,322 Other income 157,298 19,586 ---------- ---------- Total noninterest income 449,844 316,135 ---------- ---------- Noninterest expense: Personnel salaries and benefits 672,084 732,701 Occupancy 199,254 190,117 Deposit insurance premiums 76,748 80,934 Real estate owned 139,781 53,319 Other operating 676,712 762,069 ---------- ---------- Total noninterest expense 1,764,579 1,819,140 ---------- ---------- Income before income taxes 161,136 134,081 Income tax expense 52,428 46,353 ---------- ---------- Net income $ 108,708 $ 87,728 ========== ==========
The accompanying notes are an integral part of the financial statements. 3 FirstBanc Savings Association of Texas Statement of Changes in Stockholders' Equity for the years ended April 30, 1996 and 1995
Unrealized Common Stock Additional Loss on ---------------------- Paid-In Accumulated Available for Shares Amount Capital Deficit Sale Securities Total ------- ---------- ----------- ----------- --------------- ------------ Balance at April 30, 1994 300,000 $1,500,000 $1,725,000 $(340,356) $2,884,644 Net income 87,728 87,728 ------- ---------- ---------- --------- ---------- Balance at April 30, 1995 300,000 1,500,000 1,725,000 (252,628) 2,972,372 Transfer of securities held to maturity to securities available for sale; net of taxes of $7,849 $ 15,236 Net change in unrealized loss on securities available for sale (15,236) Net income 108,708 108,708 ------- ---------- ---------- --------- --------- ---------- Balance at April 30, 1996 300,000 $1,500,000 $1,725,000 $(143,920) $ -- $3,081,080 ======= ========== ========== ========= ========= ==========
The accompanying notes are an integral part of the financial statements. 4 FirstBanc Savings Association of Texas Statement of Cash Flows for the years ended April 30, 1996 and 1995
1996 1995 ----------- ----------- Operating activities: Net income $ 108,708 $ 87,728 Adjustments to reconcile net income to net cash provided by operating activities: Provision for losses on loans and real estate 268,736 82,376 Depreciation 89,467 80,329 Amortization of deferred fees, net 104,557 124,522 Amortization of premiums 15,596 22,448 Loss on sale of investment securities held for sale 37,834 Gain on sale of mortgage-backed securities held for sale (17,561) Gain on sale of other assets (40,852) (Gain) loss on sale of office premises and equipment (3,362) 6,988 Gain (loss) on sale of real estate owned (17,022) 21,529 Dividends on Federal Home Loan Bank stock (22,300) (17,500) Deferred income tax expense 20,605 46,353 Decrease in mortgage loans held for sale 79,954 106,450 Decrease (increase) in accrued interest receivable 94,344 (106,246) (Increase) decrease in prepaid expenses and other assets (82,949) 59,066 Decrease (increase) in income taxes receivable 19,326 (40,911) (Decrease) increase in accrued interest payable (22,245) 24,942 Decrease in income taxes payable (24,318) (Decrease) increase in other liabilities (47,816) 72,396 ----------- ----------- Net cash provided by operating activities 585,020 546,152 ----------- ----------- Cash flows from investing activities: Decrease (increase) in loans receivable 2,623,351 (2,608,029) Proceeds from sale of real estate owned 387,002 204,185 Purchases and improvements to real estate owned (87,436) (2,217) Purchases of office premises and equipment (87,340) (37,934) Proceeds from sale of office equipment 17,500 Proceeds from sale of investment securities held for sale 953,438 Purchases of mortgage-backed securities (1,967,364) Proceeds from sales of mortgage-backed securities 3,984,392 Proceeds from sale of other assets 61,380 Principal payments on mortgage-backed securities 527,494 618,927 Maturities of certificates of deposit 199,641 594,000 ----------- ----------- Net cash provided by (used by) investing activities 8,579,422 (3,198,432) ----------- ----------- Cash flows from financing activities: Decrease in deposits (1,755,153) (1,946,716) Decrease in advances from borrowers for taxes and insurance (31,975) (38,841) (Decrease) increase in borrowings (2,400,000) 2,400,000 ----------- ----------- Net cash provided by (used by) financing activities (4,187,128) 414,443 ----------- ----------- Increase (decrease) in cash and cash equivalents 4,977,314 (2,237,837) Cash and cash equivalents, beginning of year 1,246,934 3,484,771 ----------- ----------- Cash and cash equivalents, end of year $ 6,224,248 $ 1,246,934 =========== ===========
The accompanying notes are an integral part of the financial statements. 5 FIRSTBANC SAVINGS ASSOCIATION OF TEXAS NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The accounting policies followed by FirstBanc Savings Association of Texas, (the "Association"), are summarized below: Nature of Operations The Association is principally engaged in the business of attracting retail deposits from the general public and investing those funds in first mortgage single-family residential loans, residential construction loans and consumer loans. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Cash Equivalents Cash equivalents include amounts due from other financial institutions, federal funds sold, and short-term liquid investments with original maturities of three months or less. Short term investments are carried at cost. Securities Investment and mortgage-backed securities held to maturity are carried at cost and adjusted for amortization of premiums and accretion of discounts as the Association has the intent and ability to hold them to maturity. Premiums and discounts are amortized/accreted using the level-yield method. Available for sale securities are carried at market value. Unrealized gains and losses, net of tax, are recorded as a component of stockholders' equity. Realized gains and losses on sales of securities, as determined on a specific identification basis, are recognized in the statement of income as they occur. 6 NOTES TO FINANCIAL STATEMENTS, CONTINUED 1. Summary of Significant Accounting Policies, continued: Securities, continued Transfers of securities between classifications are accounted for at fair value. In November 1995, the Financial Accounting Standards Board issued "A Guide to Implementation of Statement 115 on Accounting for Certain Investments in Debt and Equity Securities" which provided a one-time opportunity to reassess the appropriateness of the classification of all securities. Based on such reassessment, all investment securities and mortgage-backed securities with an aggregate amortized cost and unrealized loss of approximately $5,085,000 and $23,000, respectively, classified as held-to-maturity were transferred to the available for sale classification on December 31, 1995. The unrealized loss at the date of transfer was recorded, net of tax, as a component of stockholders' equity. Securities Sold Under Agreements to Repurchase The Association enters into sales of securities under agreements to repurchase (reverse repurchase agreements). Fixed coupon reverse repurchase agreements are treated as financing arrangements, and obligations to repurchase securities sold are reflected as a liability in the statement of financial condition. The dollar amounts of securities underlying the agreements are recorded in the respective asset accounts. Mortgage Loans Held for Sale Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated market value in the aggregate. Market value is determined based upon the contractual sales price. Net unrealized losses are recognized in a valuation allowance by charges to income. If loans receivable are transferred to loans held for sale, the lower of cost or market is applied immediately. Loans Receivable Loans are stated at the amount of unpaid principal balances, net of the allowance for loan losses, undisbursed portion of loans and deferred loan fees. The allowance for loan losses is increased by charges to income and decreased by charge-offs (net of recoveries). Accrual of interest is discontinued on a loan when management believes, after considering economic and business conditions and collection efforts, that the borrower's financial condition is such that collection of interest is doubtful. Interest income on such loans is then recognized only to the extent that cash is received and where the future collection of principal is probable. 7 NOTES TO FINANCIAL STATEMENTS, CONTINUED 1. Summary of Significant Accounting Policies, continued: Allowance for Loan Losses The Association adopted Statement of Financial Accounting Standards No. 114 ("SFAS 114"), "Accounting by Creditors for Impairment of a Loan" as of May 1, 1995. Under SFAS 114, a loan is considered impaired, based on current information and events, if it is probable that the Association will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. The measurement of impaired loans and related allowance for loan losses is based on the present value of expected future cash flows discounted at the loan's effective interest rate or based on the fair value of the collateral if the loan is collateral dependent. As permitted by SFAS 114, smaller-balance homogenous loans consisting of residential mortgages and consumer loans are evaluated for reserves collectively based on historical loss experience. The adoption of SFAS 114 had no material impact on the Association's financial statements as the Association's existing policy of measuring loan impairment was generally consistent with methods prescribed by SFAS 114. The allowance for loan losses represents management's best estimate of future losses which may be sustained when existing loans become due, based upon past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay, the estimated value of any underlying collateral, and current economic conditions. Because of changing economic conditions, the valuations determined from such estimates and appraisals may also change. Accordingly, losses may ultimately be incurred in amounts different from management's current estimates. Additionally, the Association is subject to regulatory examinations and may be directed to record loss allowances by regulatory authorities. Adjustments to the allowance for estimated losses will be reported in the period such adjustments become known or are reasonably estimable. The allowance for loan losses is established through charges to operations in the form of a provision for loan losses. Increases and decreases in the allowance due to changes in the measurement of the impaired loans are included in the provision for loan losses. Loans continue to be classified as impaired unless they are brought fully current and the collection of scheduled interest and principal is considered probable. When a loan is determined to be uncollectible, the portion deemed uncollectible is charged against the allowance and subsequent recoveries if any are credited to the allowance. 8 NOTES TO FINANCIAL STATEMENTS, CONTINUED 1. Summary of Significant Accounting Policies, continued: Loan Origination Fees, Commitment Fees and Related Costs Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income using a method which approximates the level-yield method over the contractual life of the loans, adjusted for estimated prepayments based on the Association's historical prepayment experience. Commitment fees and costs relating to commitments, the likelihood of exercise of which is remote, are recognized over the commitment period on a straight-line basis. If the commitment is subsequently exercised during the commitment period, the remaining unamortized commitment fee at the time of exercise is recognized over the life of the loan as an adjustment of yield. Office Premises and Equipment Office premises and equipment are stated at cost less accumulated depreciation. For financial accounting purposes, depreciation is provided using the straight-line method over the estimated useful lives of the assets, which range from three to twenty years. Maintenance, repairs and minor replacements are expensed when incurred. The cost and accumulated depreciation relating to assets retired or otherwise disposed of are eliminated from the accounts, and any resultant gains or losses are credited or charged to operations. Real Estate Owned Real estate properties acquired through, or in lieu of, loan foreclosure are initially recorded at the lower of the outstanding loan balance or fair value. Subsequent to foreclosure, real estate owned is carried at the lower of the property's new basis or its fair value less estimated selling costs. Costs related to development or improvement of properties are capitalized as incurred, provided that such costs do not cause the carrying value of the property to exceed the fair value. Costs related to the holding of the property are expensed. Losses upon foreclosure are charged to the allowance for loan losses. Valuation adjustments subsequent to foreclosure are charged to expense through the establishment of a valuation reserve. Income Taxes Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense includes the tax payable for the period and the change during the period in deferred tax assets and liabilities. 9 NOTES TO FINANCIAL STATEMENTS, CONTINUED 1. Summary of Significant Accounting Policies, continued: Impact of New Accounting Standards In March 1995, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of " ("SFAS 121"). The Association is required to adopt SFAS 121 on May 1, 1996. Management has determined the adoption of SFAS 121 will not have a material impact on the Association's financial position, results of operations or cash flows. In May 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage Servicing Rights ("SFAS 122"). SFAS 122 amends SFAS 65, "Accounting for Certain Mortgage Banking Activities", to require that a mortgage banking enterprise recognize as separate assets rights to service mortgage loans for others, however those servicing rights are acquired. The Association is required to adopt SFAS 122 on May 1, 1996. Management has determined the adoption of SFAS 122 will not have a material impact on the Association's financial position, results of operations or cash flows. 2. Investment Securities: The carrying value and estimated market value of investment securities, consisting of U.S. Government and agency obligations, are as follows: April 30, 1995 ----------------------------------------- Gross Unrealized Estimated Amortized ------------------ Market Cost Gains Losses Value ---------- ------ ------- --------- Held to maturity $989,091 $ $81,891 $907,200 The Association held no investment securities at April 30, 1996. Proceeds from sales of investment securities during 1996 were $953,438 and gross losses of $37,834 were realized on those sales during the year. There were no sales of investment securities during 1995. 10 NOTES TO FINANCIAL STATEMENTS, CONTINUED 3. Mortgage-Backed Securities: The amortized cost and estimated market value of mortgage-backed securities are as follows:
April 30, 1995 ----------------------------------------------- Gross Unrealized Estimated Amortized ------------------- Market Cost Gains Losses Value ---------- ------ ------- ----------- FNMA certificates $1,457,068 $ $ (80,082) $1,376,986 FHLMC certificates 3,055,035 (49,734) 3,005,301 ---------- -------- --------- ---------- Total mortgage-backed securities $4,512,103 $ $(129,816) $4,382,287 ========== ======== ========= ==========
The Association held no mortgage-backed securities at April 30, 1996. Proceeds from sales of mortgage-backed securities during 1996 were $3,984,392 and gross gains and losses of $65,682 and $48,121, respectively, were realized on those sales during the year. There were no sales of mortgage-backed securities during 1995. 4. Loans Receivable: Loans by major category at April 30, 1996 and 1995 are summarized as follows:
1996 1995 ----------- ----------- Commercial loans $ 244,185 $ 244,328 Consumer loans 974,486 1,390,052 Mortgage loans (approximately $9.2 million and $9.0 million, respectively, are single family residential) 11,848,473 14,497,181 Construction loans 14,238,730 15,613,825 ----------- ----------- 27,305,874 31,745,386 Less: Undisbursed portion of loans 4,064,589 4,804,158 Allowance for loan losses 337,555 201,193 Deferred loan fees, net of related costs 92,950 125,018 ----------- ----------- Total loans, net $22,810,780 $26,615,017 =========== ===========
11 NOTES TO FINANCIAL STATEMENTS, CONTINUED 4. Loans Receivable, continued: Changes in the allowance for loan losses for the years ended April 30, 1996 and 1995 are as follows:
1996 1995 -------- --------- Balance, beginning of year $201,193 $ 494,175 Provision charged to income 144,000 51,206 Charge-offs and recoveries, net (7,638) (344,188) -------- --------- Balance, end of year $337,555 $ 201,193 ======== =========
The Association originates construction, residential, commercial and consumer loans primarily to customers in the greater Houston, Texas area and, accordingly, a substantial portion of its debtors' ability to honor their contracts is dependent upon the local Houston economy and real estate market. The Association evaluates each customer's credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management's credit evaluation of the counterparty. Collateral obtained upon funding of the commitment consists primarily of residential and commercial real estate. Nonaccrual loans for which interest has been reduced totaled approximately $1,167,000 at April 30, 1995. Interest income which has not been recognized as a result of such loans totaled approximately $28,000 at April 30, 1995. There were no nonaccrual loans at April 30, 1996. Restructured loans totaled approximately $931,000 and $1,106,000 at April 30, 1996 and 1995, respectively. If interest on restructured loans had been recognized at the original rates, interest income would have been increased by approximately $2,200 and $23,000 for the years ended April 30, 1996 and 1995, respectively. Interest income related to the restructured loans amounted to approximately $89,000 and $99,000 for the years ended April 30, 1996 and 1995, respectively. There are no commitments to lend additional funds to borrowers whose loans have been restructured. The following table summarizes impaired loan information at April 30, 1996: Impaired loans $999,158 Impaired loans for which no specific reserve is required under SFAS 114 999,158 The allowance for loan losses related to impaired loans totaled approximately $50,000 at April 30, 1996. The average recorded investment on impaired loans during the year was approximately $887,000 and $89,000 of interest income on impaired loans was recognized using the cash basis method during 1996. 12 NOTES TO FINANCIAL STATEMENTS, CONTINUED 4. Loans Receivable, continued: In the normal course of business, the Association has outstanding commitments to extend credit which are not reflected in the financial statements. Officials of the Association do not anticipate losses as a result of these transactions. The Association had outstanding unfunded loan commitments or lines of credit totaling $1,339,880 and $2,884,384 at April 30, 1996 and 1995, respectively, substantially all of which are construction loan related. 5. Office Premises and Equipment: Office premises and equipment at April 30, 1996 and 1995 are summarized as follows:
1996 1995 ---------- ---------- Land $ 218,907 $ 218,907 Drive-in facilities and improvements 333,326 333,326 Furniture and equipment 673,027 612,345 ---------- ---------- 1,225,260 1,164,578 Less accumulated depreciation 617,177 540,230 ---------- ---------- $ 608,083 $ 624,348 ========== ==========
Depreciation expense on office premises and equipment was $89,467 and $80,329 for the years ended April 30, 1996 and 1995, respectively. 13 NOTES TO FINANCIAL STATEMENTS, CONTINUED 6. Real Estate Owned: Real estate owned at April 30, 1996 and 1995 is summarized as follows:
1996 1995 --------- -------- Real estate acquired in settlement of loans: Single family residential properties $469,958 $210,830 Commercial property 265,921 -------- -------- $735,879 $210,830 ======== ========
Changes in the allowance for real estate losses for the years ended April 30, 1996 and 1995 are as follows:
1996 1995 --------- -------- Balance, beginning of year $ -- $ 11,958 Provision charged to operations 124,736 31,170 Losses charged against allowance (124,736) (43,128) --------- -------- Balance, end of year $ -- $ -- ========= ========
The Association has entered into a contract for the sale of its commercial real estate property. The sale was scheduled to close on June 30, 1996; however, closing has been postponed due to a dispute regarding easement access. The ultimate outcome of the dispute and the effect, if any, on the carrying value of the property cannot be determined. 7. Deposits: Deposits at April 30, 1996 and 1995 are summarized as follows:
RATE AT APRIL 30, ORIGINAL MATURITY 1996 1996 1995 ------------------- ----------- ----------- ----------- Interest-bearing demand and savings account $10,440,969 $11,322,257 Certificates of deposit: 7 - 89 days 3.36% 33,081 87,698 90 - 179 days 3.94%-4.52% 616,744 625,705 180 - 364 days 4.5%-5.67% 1,369,721 2,137,142 1 - 2 years 3.94%-6.95% 6,459,929 9,297,140 Greater than two years 4.25%-9.00% 6,895,430 4,742,681 ----------- ----------- Total interest-bearing deposits 25,815,874 28,212,623 Demand deposits 2,279,513 1,637,917 ----------- ----------- Total deposits $28,095,387 $29,850,540 =========== ===========
14 NOTES TO FINANCIAL STATEMENTS, CONTINUED 7. Deposits, continued: The aggregate amount of short-term certificates of deposit with a minimum denomination of $100,000 was approximately $2,901,000 and $1,777,000 at April 30, 1996 and 1995, respectively. The weighted average stated interest rates for all deposits was 4.38% and 3.62% at April 30, 1996 and 1995, respectively. 8. Borrowings: Borrowings at April 30, 1995 consist of $2,400,000 of securities sold under agreements to repurchase with the Federal Home Loan Bank of Dallas. These agreements matured in May 1995 and had a stated interest rate of 5.98%. These agreements were collateralized by certain mortgage-backed securities which were maintained in safekeeping by the Federal Home Loan Bank of Dallas. There were no securities sold under agreements to repurchase at April 30, 1996. 9. Income Taxes: The types of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts that give rise to a significant portion of the deferred tax asset and liability and their approximate tax effects are as follows:
April 30, 1996 April 30, 1995 ---------------------------- ----------------------------- Temporary Tax Temporary Tax Difference Effect Difference Effect ---------- --------- ----------- ---------- Allowance for loan losses $337,555 $114,768 $201,193 $ 68,405 Investment securities 14,427 4,905 Alternative minimum tax credit carryforward 13,999 41,636 Net operating losses 177,053 60,198 -------- -------- -------- --------- Deferred tax assets $337,555 128,767 $392,673 175,144 ======== -------- ======== --------- Accumulated depreciation $ 99,048 (33,676) $119,747 (40,714) Tax reserve for loan losses 155,654 (52,923) 188,249 (64,005) Conversion from cash to accrual accounting 34,148 (11,610) Prepaid insurance 19,307 (6,564) 7,665 (2,606) -------- -------- -------- --------- Deferred tax liabilities $274,009 (93,163) $349,809 (118,935) ======== -------- ======== --------- Net deferred tax asset $ 35,604 $ 56,209 ======== =========
15 NOTES TO FINANCIAL STATEMENTS, CONTINUED 9. Income Taxes, continued: The components of federal income tax expense are as follows:
1996 1995 ------- ------- Current $31,823 Deferred 20,605 $46,353 ------- ------- $52,428 $46,353 ======= =======
Total income tax expense differed from the amounts computed by applying the federal statutory rate to pre-tax income as follows:
1996 1995 -------- ------- Tax expense computed by applying the federal statutory rate $54,786 $45,588 Over accrual of taxes in prior years (2,921) Other 563 765 ------- ------- Total income tax expense $52,428 $46,353 ======= =======
The Association had alternative minimum tax credit carryforwards of approximately $14,000 at April 30, 1996 that may be carried forward indefinitely to reduce future income taxes in years when the Association's regular income tax exceeds its alternative minimum tax. 10. Related Party Transactions: In the normal course of business, the Association enters into loans and other transactions with officers, directors, and other related parties. Loans outstanding to employees, officers, directors, and their affiliated entities totaled approximately $480,000 and $619,000 as of April 30, 1996 and 1995, respectively. Funds on deposit from employees, officers, directors and their affiliated entities approximated $348,000 and $428,000 as of April 30, 1996 and 1995, respectively. Payment for services to directors and their affiliated entities totaled approximately $23,000 and $91,000 during the years ended April 30, 1996 and 1995, respectively. 16 NOTES TO FINANCIAL STATEMENTS, CONTINUED 11. Employee Stock Ownership Plan: During the year ended April 30, 1988, the Association established a leveraged Employee Stock Ownership Plan (ESOP) for the benefit of its employees. A trust was formed for the ESOP which was administered by an Administrative Committee designated by the board of directors. The ESOP purchased (or expected to purchase) shares of the Association's common stock with borrowed funds. These borrowings were collateralized by the Association's common stock and guaranteed by certain stockholders of the Association. The Association was committed to make future contributions to the ESOP sufficient to meet future principal and interest payments and thus reported the unpaid balance of these borrowings as a liability and a deduction from stockholders' equity. During the fiscal year ended April 30, 1994, at the direction of the Association's regulatory authorities a new trustee was appointed for the ESOP and certain directors paid $363,979 to the ESOP to purchase Association stock owned by the ESOP, enabling it to pay off all outstanding debt and eliminate any future obligation of the Association to buy stock back from the ESOP. During the fiscal year ended April 30, 1995, the ESOP made application to the Internal Revenue Service ("IRS") to terminate the plan and approval for the termination was received during the fiscal year ended April 30, 1996. As of April 30, 1996, all remaining funds of the ESOP were disbursed to the qualified employees. The Association is indemnified by a former officer and director for certain expenses, including taxes, that may be incurred as a result of the IRS review of the plan for termination. 12. Employee Benefit Plan: A profit sharing plan covering substantially all employees has been established which is a qualified plan under Section 401(k) of the Internal Revenue Code. Contributions to the profit sharing plan are determined by the board of directors. Employees may also make contributions to the profit sharing plan based upon a percentage of qualified compensation in accordance with the Internal Revenue Service rules and regulations. Contributions made to the plan by the Association were $5,828 and $8,024 for 1996 and 1995, respectively. 13. Fair Value of Financial Instruments: Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments" ("SFAS 107") requires all entities to disclose the estimated fair value of certain on- and off-balance sheet financial instruments. 17 NOTES TO FINANCIAL STATEMENTS, CONTINUED 13. Fair Value of Financial Instruments, continued: In many instances, the assumptions used in estimating fair values were based upon subjective assessments of market conditions and perceived risks of the financial instruments at a certain point in time. The fair value estimates can be subject to significant variability with changes in assumptions. Furthermore, these fair value estimates do not reflect any premium or discount that could result from offering for sale at one time the Association's entire holdings of a particular financial instrument, nor are the tax ramifications related to the realization of unrealized gains and losses permitted to be considered in the estimation of fair value. In addition, fair value estimates are based solely on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Examples would include portfolios of loans serviced for others, investments in real estate, premises and equipment, and deferred tax assets. Fair value estimates, methods and assumptions are set forth below for the Association's financial instruments. Cash and Cash Equivalents The carrying amount for cash and cash equivalents approximates the assets' fair value because of the short maturity of those instruments. Investment and Mortgage-Backed Securities The fair value of long-term investments such as U.S. Government and agency obligations and mortgage-backed securities is estimated based on bid prices published in financial newspapers or bid quotations received from securities dealers. Loans Fair values are estimated for portfolios of loans with similar financial characteristics. Mortgage loans are segregated by type, including but not limited to residential, commercial and construction. Consumer loans are segregated by type, including but not limited to home improvement loans, automobile loans, loans secured by deposits and secured and unsecured personal loans. Each loan category may be segmented, as appropriate, into fixed and adjustable interest rate terms, ranges of interest rates, performing and nonperforming, and repricing frequency. For certain homogeneous categories of loans, such as some residential mortgages, fair value is estimated using the quoted market prices for securities backed by similar loans, adjusted for differences in loan characteristics. The fair values of other types of loans are estimated by discounting the future scheduled and unscheduled cash flows using the current rates at which similar loans should be made to borrowers with similar credit ratings and for the same remaining maturities. Unscheduled cash flows take the form of estimated prepayments and may be based upon historical experience as well as anticipated experience derived from current and prospective economic and interest rate environments. For certain types of loans, anticipated prepayment experience exists in published tables from securities dealers. 18 NOTES TO FINANCIAL STATEMENTS, CONTINUED 13. Fair Value of Financial Instruments, continued: Loans, continued The fair value of significant nonperforming mortgage loans is based on estimated value of the collateral. Where appraisals are not available, estimated cash flows are discounted using a rate commensurate with the credit risk associated with those cash flows. Assumptions regarding credit risk, cash flows and discount rates are judgmentally determined using available market information and specific borrower information. The fair value of nonperforming consumer loans is based on historical experience with such loans. The fair value of loans held for sale is estimated based on outstanding commitments from investors or current market prices for similar loans. Federal Home Loan Bank Stock The fair value of stock in the Federal Home Loan Bank of Dallas is estimated to be equal to its carrying amount given it is not a publicly traded equity security, it has an adjustable dividend rate, and transactions in the stock have been executed at the stated par value. Deposits and Advances from Borrowers for Taxes and Insurance The fair value of deposits with no stated maturity, such as interest-bearing or non-interest-bearing checking accounts, passbook and statement savings accounts, money market accounts and advances from borrowers for taxes and insurance is equal to the amount payable upon demand. The fair value of certificates of deposit is based on the lower of redemption or discounted value of contractual cash flows. Discount rates for certificates of deposit are estimated using current market rates. Borrowings Borrowings consist of securities sold under agreements to repurchase with the Federal Home Loan Bank of Dallas. The estimated fair value of securities sold under agreements to repurchase approximates carrying value because of the short maturity of these instruments. Off-Balance Sheet Financial Instruments The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of guarantees and letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. The fair value of off-balance sheet financial instruments is estimated to equal the carrying amount at April 30, 1996. 19 NOTES TO FINANCIAL STATEMENTS, CONTINUED 13. Fair Value of Financial Instruments, continued: Nonfinancial Instruments SFAS 107 does not permit financial institutions to take into account the value of long-term relationships with depositors, commonly known as core deposit intangibles, when estimating the fair value of deposit liabilities. These intangibles are considered to be separate intangible assets that are not financial instruments. Nonetheless, financial institutions' core deposits have typically traded at premiums to their book values under both historical and current market conditions. Likewise, SFAS 107 does not permit financial institutions to take into account the value of the cash flows and income stream derived from its portfolio of loans serviced for others. The carrying values and estimated fair values of financial instruments, all of which are held for purposes other than trading, at April 30, 1996 are as follows:
Carrying Estimated Value Fair Value Financial assets: Cash and cash equivalents $ 6,224,248 $ 6,224,248 Loans held for sale 259,096 259,096 Loans receivable, net 22,810,780 23,503,000 Federal Home Loan Bank stock 364,300 364,300 Financial liabilities: Deposits 28,095,387 28,081,000 Advances from borrowers for taxes and insurance 93,454 93,454
14. Regulatory Capital Requirements: The Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") established new regulatory capital guidelines which require the Association to maintain minimum levels of capital under three different standards: tangible capital, core capital and risk-based capital. The following table sets forth the regulatory capital position of the Association at April 30, 1996. 20 NOTES TO FINANCIAL STATEMENTS, CONTINUED 14. Regulatory Capital Requirements, continued:
Core Tangible Risk-Based ---------- ---------- ------------ Net worth per the financial statements $3,081,080 $3,081,080 $3,081,080 Additional capital items: General valuation allowance limited 275,636 Regulatory capital 3,081,080 3,081,080 3,356,716 Minimum required capital 944,423 944,423 1,769,103 Excess capital 2,136,657 2,136,657 1,587,613 Capital ratios: Required as of April 30, 1996 3.0% 3.0% 8.0% Actual 9.8% 9.8% 15.22%
The regulatory authorities for banks have issued capital leverage ratio guidelines in connection with their risk-based capital requirements. The leverage ratio is composed of core capital measured as a percent of average total assets. The minimum leverage ratio for all banks is 3%, with a higher minimum ratio (4-5%) dependent upon the macro rating of the bank given by the regulatory authorities after their examination. Under the provisions of FIRREA, the capital requirement for savings institutions may not be any less stringent than those requirements for national banking institutions. The Association has entered into a Supervisory Agreement with the Office of Thrift Supervision ("OTS"). The Supervisory Agreement requires the Association to reduce, by no later than December 31, 1996, its classified assets to a level of 50% of its core capital plus its allowance for loan losses, requires OTS approval of new officers and directors, requires OTS approval of increases in total assets or liabilities during any calendar quarter in excess of the amount of interest credited on deposits for that calendar quarter and requires submission of a business plan for approval by the OTS. Management believes the Association has complied with the terms of the Supervisory Agreement. 21 NOTES TO FINANCIAL STATEMENTS, CONTINUED 15. Lease Commitments: The Association has an operating lease for its office space. The primary lease term expired June 30, 1996 and contained two five-year renewal options. The renewal options call for monthly payments at the then prevailing market rates. The first renewal option was executed on January 1, 1996 and the renewal term expires on June 30, 2001. The minimum lease payments for fiscal years subsequent to April 30, 1996 are as follows: 1997 $113,318 1998 114,021 1999 114,021 2000 114,021 2001 114,021 -------- $569,402 -------- Rent expense was approximately $109,000 for the years ended April 30, 1996 and 1995. 16. Supplemental Cash Flow Disclosures: The following is information related to noncash investing activities: 1996 1995 -------- -------- Real estate acquired by foreclosure $932,329 $250,962 Loans originated related to sales of real estate -- 374,400 Cash paid for interest amounted to approximately $1,244,000 and $1,169,000 for 1996 and 1995, respectively. Cash paid for income taxes was $33,295 and $67,650 in 1996 and 1995, respectively. 17. Subsequent Event: On May 10, 1996, the Association entered into an agreement to be acquired by Fort Bend Federal Holding Corp. for approximately $4.2 million in cash. The transaction is subject to satisfaction of certain contractual conditions to closing and approval by the OTS and the Association's shareholders. 22 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS, continued (b) Pro forma financial information. FORT BEND HOLDING CORP. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF FINANCIAL CONDITION JUNE 30, 1996 (IN THOUSANDS)
PRO FORMA COMBINED FORT BEND ADJUSTMENTS PRO FORMA HOLDING FIRSTBANC (REFLECTING (REFLECTING CORP. (11) ACQUISITION) ACQUISITION) ----------- ----------- ------------- -------------- ASSETS Cash and due from banks $ 4,347 $ 7,775 $ 12,122 Short-term investments 7,051 $(4,234)(1) 2,817 Certificates of deposit 200 200 -------- ------- -------- TOTAL CASH AND CASH EQUIVALENTS 11,598 7,775 15,139 Investment securities available for sale, at market value 2,705 2,705 Investment securities held to maturity 20,219 20,219 Mortgage-backed securities available for sale, at market value 745 745 Mortgage-backed securities held to maturity 107,130 107,130 Loans receivable, net 101,509 20,571 218 (2) 122,298 Accrued interest receivable 1,549 1,549 Real estate, net 148 373 (86)(3) 435 Federal Home Loan Bank stock, at cost 1,481 370 1,851 Premises and equipment, net 3,850 607 83 (4) 4,540 Mortgage servicing rights, net 1,915 1,915 Prepaid expenses and other assets 1,890 313 (128)(1) 2,073 (2)(5) Goodwill 1,337 (1) 1,337 -------- ------- ------ -------- TOTAL ASSETS $254,739 $30,009 $2,812 $281,936 ======== ======= ====== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $204,875 $26,777 $ 126 (6) $231,778 Convertible Subordinated Debentures 12,100 12,100 Other borrowings 10,308 10,308 Advances from borrowers for taxes and insurance 7,445 161 7,606 Accounts payable, accrued expenses and other liabilities 2,003 67 66 (7) 2,136 -------- ------- -------- TOTAL LIABILITIES 236,731 27,005 263,928 -------- ------- -------- Stockholders' Equity: Serial preferred stock, $.01 par value - 500,000 shares authorized, none outstanding Common stock $.01 par value, 2,000,000 shares authorized 907,372 shares issued and 819,198 shares outstanding 9 1,500 (1,500)(1) 9 Additional paid-in capital 8,581 1,725 (1,725)(6) 8,581 Unearned employee stock ownership plan shares and deferred compensation (470) (470) Net unrealized depreciation on available for sale securities, net of tax (24) (24) Retained earnings (substantially restricted) 11,369 (221) 221 (1) 11,369 Treasury stock, at cost - 88,174 shares (1,457) (1,457) -------- ------- -------- TOTAL STOCKHOLDERS' EQUITY 18,008 3,004 18,008 -------- ------- ------ -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $254,739 $30,009 $2,812 $281,936 ======== ======= ====== ========
FORT BEND HOLDING CORP. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FISCAL YEARS ENDED MARCH 31, 1996 (IN THOUSANDS, EXCEPT PER SHARE DATA)
FORT BEND FIRSTBANC PRO FORMA COMBINED HOLDING (11) ADJUSTMENTS PRO FORMA CORP. (REFLECTING (REFLECTING ACQUISITION ACQUISITION --------- ----------- ------------ ------------ INTEREST INCOME: Loans $ 7,375 $ 2,543 $ (27) (8) $ 9,891 Investment securities 1,323 343 1,666 Mortgage-backed securities 7,719 7,719 ------- ------- ---------- ------- TOTAL INTEREST INCOME 16,417 2,886 (27) 19,276 ------- ------- ---------- ------- INTEREST EXPENSE: Deposits 9,294 1,221 (63) (9) 10,452 Borrowings 730 45 775 ------ ------- ---------- ------- TOTAL INTEREST EXPENSE 10,024 1,266 (63) 11,227 ------ ------- ---------- ------- NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 6,393 1,620 36 8,049 PROVISION FOR LOAN LOSSES 123 144 267 ------ ------- --------- ------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 6,270 1,476 36 7,782 ------ ------- --------- ------- NONINTEREST INCOME: Gain on sale of loans 313 109 422 Service charges 322 183 505 Loan servicing income 546 546 Other income 924 158 1,082 ------- ------- --------- ------- TOTAL NONINTEREST INCOME 2,105 450 2,555 ------- ------- --------- ------- NONINTEREST EXPENSES: Compensation and benefits 3,108 672 3,780 Office occupancy and equipment 657 199 856 Federal insurance premiums 465 77 542 Amortization of mortgage servicing rights 208 208 Insurance and surety bond expense 126 126 Other 1,211 817 89 (10) 2,117 ------- ------- --------- ------- TOTAL NONINTEREST EXPENSES 5,775 1,765 81 7,629 ------- ------- --------- ------- INCOME BEFORE INCOME TAX 2,600 161 (53) 2,708 INCOME TAX PROVISION 913 52 965 ------- ------- --------- ------- NET INCOME $ 1,687 $ 109 $ (53) $ 1,743 ======= ======= ========= ======= PRIMARY EARNINGS PER COMMON SHARE $ 1.94 0.36 $ 2.01 ======= ======= ======= FULLY DILUTED EARNINGS PER COMMON SHARE $ 1.81 $ 0.36 $ 1.87 ======= ======= =======
FORT BEND HOLDING CORP. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1996 (IN THOUSANDS, EXCEPT PER SHARE DATA) PRO FORMA COMBINED FORT BEND ADJUSTMENTS PRO FORMA HOLDING FIRSTBANC (REFLECTING (REFLECTING CORP. (11) ACQUISITION) ACQUISITION) --------- --------- ------------ ------------ INTEREST INCOME: Loans $2,131 $ 671 $ (6) (8) $2,796 Investment securities 335 94 429 Mortgage-backed securities 1,829 1,829 ------ ------ ---- ------ TOTAL INTEREST INCOME 4,295 765 (6) 5,054 ------ ------ ---- ------ INTEREST EXPENSE: Deposits 2,320 334 (16) (9) 2,638 Borrowings 330 330 ------ ------ ---- ------ TOTAL INTEREST EXPENSE 2,650 334 (16) 2,968 ------ ------ ---- ------ NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 1,645 431 10 2,086 PROVISION FOR LOAN LOSSES 25 47 72 ------ ------ ---- ------ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,620 384 10 2,014 ------ ------ ---- ------ NONINTEREST INCOME: Gain on sale of loans 50 8 58 Service charges 113 12 125 Loan servicing income 170 2 172 Other income 279 50 329 ------ ------ ---- ------ TOTAL NONINTEREST INCOME 612 72 684 ------ ------ ---- ------ NONINTEREST EXPENSES: Compensation and benefits 832 203 1,035 Office occupancy and equipment 187 72 259 Federal insurance premiums 124 18 142 Amortization of mortgage servicing rights 64 64 Insurance and surety bond expense 34 7 41 Other 376 271 22 (10) 669 ------ ------ ---- ------ TOTAL NONINTEREST EXPENSES 1,617 571 22 2,210 INCOME (LOSS) BEFORE INCOME TAX 615 (115) (12) 488 INCOME TAX PROVISION (BENEFIT) 209 (37) 172 ------ ------ ---- ------ NET INCOME $ 406 $ (78) $(12) $ 316 ====== ====== ==== ====== PRIMARY EARNINGS PER COMMON SHARE $ 0.48 $(0.25) $ 0.38 ====== ====== ====== FULLY DILUTED EARNINGS PER COMMON SHARE $ 0.40 $(0.25) $ 0.34 ====== ====== ====== FORT BEND HOLDING CORP AND SUBSIDIARY NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS 1. To record the purchase of FirstBanc 2. Adjustment to reflect loans receivable at fair value 3. Adjustment to reflect real estate at fair value based on change in new management's intent with respect to disposition of real estate. 4. Adjustment to reflect premises and equipment at fair value 5. Adjustment to record deferred tax effect of fair value adjustments 6. Adjustment to reflect deposits assumed at fair value 7. To record liabilities related to the acquisition, primarily employer terminal costs 8. To record amortization of fair value adjustment on loans receivable acquired over a five year period 9. To record amortization of fair value adjustment on deposits assumed over a two year period 10. To record amortization of goodwill over a fifteen year period 11. FirstBanc had an April 30 fiscal year end. Accordingly, April 30 has been used for March 31, and July 31 has been used for June 30. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS, CONTINUED (c) Exhibits 2 Agreement and Plan of Merger, dated as of May 10, 1996, by and among Fort Bend, The Association and FirstBanc (filed previously). 99 Press Release of Fort Bend, dated August 16, 1996 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. FORT BEND HOLDING CORP. Date: October 28, 1996 By: /s/ LANE WARD ----------------------------- Lane Ward President and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----