Texas		6712		75-2371232
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(IRS Employer Identification No.)

Item 1—Financial Statements		Page
Consolidated Balance Sheets		3
Consolidated Statements of Income		4
Consolidated Statements of Changes in Stockholders’ Equity		5
Condensed Consolidated Statements of Cash Flows		6
Notes to Consolidated Financial Statements		7
Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3—Quantitative and Qualitative Disclosure About Market Risk		18
PART II—OTHER INFORMATION		19
SIGNATURES		20

		June 30, 2002				December 31, 2001
ASSETS
Cash and due from banks		$	12,509			14,390
Interest-bearing deposits with financial institutions			200			4,659
Federal funds sold			21,890			16,860
Total cash and cash equivalents			34,599			35,909
Interest-bearing time deposits			1,784			7,287
Securities available for sale, at fair value			150,220			185,410
Securities held to maturity, estimated fair value of $100,391 in 2002 and $57,171 in 2001			98,720			57,170
Loans, net			220,473			212,665
Premises and equipment, net			11,289			11,302
Accrued interest receivable			3,953			4,157
Intangible assets and goodwill			11,032			10,077
Other assets			4,837			2,208
		$	536,907			526,185
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand—non interest-bearing			72,410			70,527
Interest-bearing transaction accounts			88,092			87,781
Money market and savings			87,083			94,844
Certificates of deposit and other time deposits			236,215			220,578
Total deposits			483,800			473,730
Accrued interest payable			1,220			1,394
Other borrowings			1,704			4,098
Other liabilities			4,007			3,029
			490,731			482,251
Stockholders’ equity:
Preferred stock, $5 par value; 2,000,000 shares authorized, none issued or outstanding			—			—
Common stock, $5 par value; 10,000,000 shares authorized, 2,160,000 issued			10,800			10,800
Surplus			5,400			5,400
Retained earnings			32,032			29,243
Accumulated other comprehensive income			361			903
Treasury stock, 165,782 shares in 2002 and 165,582 shares in 2001 at cost			(2,417	)		(2,412	)
Total stockholders’ equity			46,176			43,934
		$	536,907			526,185

		Three months ended June 30,					Six months ended June 30,
		2002			2001		2002		2001
Interest income:
Loans, including fees		$	3,978		3,625		7,940		7,201
Securities:
Taxable—available for sale			1,900		2,290		3,837		4,650
Taxable—held to maturity			628		120		1,158		251
Tax-exempt—held to maturity			485		488		969		980
Federal funds sold			79		210		183		485
Interest-bearing deposits with financial institutions			38		196		132		381
Total interest income			7,108		6,929		14,219		13,948
Interest expense:
Deposits:
Transaction accounts			234		319		508		716
Money market and savings			331		466		690		971
Certificates of deposit and other time deposits			2,210		3,015		4,555		6,067
Other borrowed funds			12		10		29		20
Total interest expense			2,787		3,810		5,782		7,774
Net interest income			4,321		3,119		8,437		6,174
Provision for loan losses			230		120		490		230
Net interest income after provision for loan losses			4,091		2,999		7,947		5,944
Noninterest income:
Service charges, commissions, and fees			1,602		1,133		2,992		2,152
Income from fiduciary activities			368		328		737		657
Net realized gains on securities transactions			172		10		1,034		13
Other			274		250		536		465
Total noninterest income			2,416		1,721		5,299		3,287
Noninterest expenses:
Salaries and employee benefits			2,701		2,078		5,361		4,122
Occupancy and equipment			615		486		1,181		967
Other			1,131		881		2,132		1,744
Total other expenses			4,447		3,445		8,674		6,833
Income before income tax expense			2,060		1,275		4,572		2,398
Income tax expense			476		210		1,104		370
Net income		$	1,584		1,065		3,468		2,028
Basic earnings per common share		$	0.79		0.53		1.74		1.02
Weighted average number of shares outstanding			1,994,218		1,995,216		1,994,255		1,995,216

		Preferred Stock			Common Stock		Surplus		Retained Earnings			Accumulated Other Comprehensive Income(Loss)			Treasury Stock			Total
Balances at January 1, 2001		$	—		10,800		5,400		25,894			(575	)		(2,397	)		39,122
Comprehensive income:
Net Income			—		—		—		2,028			—			—			2,028
Other comprehensive income:
Unrealized gain (loss) on available-for-sale securities arising during the period			—		—		—					1,516			—			1,516
Reclassification adjustment for net realized gains (losses) on available-for-sale securities included in net income			—		—		—		—			(13	)		—			(13	)
Net unrealized gain (loss)			—		—		—		—			1,503			—			1,503
Tax effect of other comprehensive income			—		—		—		—			(511	)		—			(511	)
Total other comprehensive income			—		—		—		—			992			—