Common use of Financial Statements and Records Clause in Contracts

Financial Statements and Records. 2.5.1 Southeast Texas has delivered to Texas Regional (i) the audited consolidated balance sheet of Southeast Texas and its subsidiaries as of December 31, 2002 and 2001, and the related audited consolidated statements of income, changes in stockholders’ equity and cash flows for each of the years then ended, together with the notes thereto, accompanied by the audit report thereon of the independent certified public accountant who audited such statements (the “Southeast Texas Year End Financial Statements”). The Southeast Texas Year End Financial Statements fairly present the financial position of Southeast Texas and its subsidiaries as of the dates thereof and the results of its operations for the periods indicated in conformity with generally accepted accounting principles applied on a consistent basis. In addition, Southeast Texas has delivered to Texas Regional the unaudited balance sheet of Southeast Texas as of September 30, 2003, and the unaudited balance sheet and regulatory report of condition of Community Bank & Trust as of September 30, 2003 and the related unaudited statements of income for each of Southeast Texas and Community Bank & Trust for the nine-month period then ended (collectively, the “Southeast Texas Interim Financial Statements”). The Balance Sheet included within the Southeast Texas Interim Financial Statements is herein referred to as the “Southeast Texas Current Balance Sheet.” In the opinion of the management of Southeast Texas, the Southeast Texas Interim Financial Statements also fairly present the financial position of Southeast Texas and Community Bank & Trust as of the date thereof and the results of their respective operations for the period indicated in conformity with generally accepted accounting principles applied on a consistent basis. The Southeast Texas Year End Financial Statements and the Southeast Texas Interim Financial Statements are collectively referred to hereinafter as the “Southeast Texas Financial Statements.” The Southeast Texas Financial Statements do not, as of the dates thereof, include any material assets or omit to state any material liability, absolute or contingent, or other fact, the inclusion or omission of which renders such financial statements, in light of the circumstances under which they were made, materially misleading. Without limiting the generality of the foregoing, Southeast Texas specifically represents to Texas Regional that Southeast Texas and its subsidiaries have no liabilities, either accrued, contingent or otherwise, which, individually or in the aggregate, are material, which have not been reflected in the Southeast Texas Financial Statements, except (a) deposit liabilities and other current liabilities incurred in the ordinary course of business since the date of the balance sheets included therein, and (b) in the case of interim financial statements, normal recurring year-end adjustments, none of which are or will be material. As of the time of Closing, any material liabilities, accrued, contingent or otherwise, which have been incurred since December 31, 2002, will have been fully disclosed to Texas Regional. Southeast Texas shall record as liabilities all obligations arising as a result of the consummation of the transactions contemplated by this Agreement at Closing. Such obligations shall include, but not be limited to, required payments under stock appreciation rights agreements and any required payments to settle and terminate material contracts for data processing services and automated teller machine contracts effective as of May 8, 2004, or such other date determined by mutual decision of Texas Regional and Southeast Texas. The Southeast Texas Current Balance Sheet does not reflect such obligations; however, the financial statements provided for purposes of Section 5.9.1 of this Agreement will reflect such liabilities.

Financial Statements and Records. 2.5.1 Southeast Texas San Xxxx Bancshares has delivered to Texas Regional (i) the audited consolidated unaudited parent company only balance sheet of Southeast San Xxxx Bancshares, (ii) the unaudited parent company only balance sheet of San Xxxx Delaware and (iii) the uaudited internally prepared balance sheet of Texas and its subsidiaries Country Bank, in each case as of December 31, 2002 2001, 2000 and 20011999, and the related audited unaudited consolidated statements of income, changes in stockholders’ equity and cash flows income for each of the years then ended, together with and the notes theretounaudited statements of changes in stockholders' equity and cash flows for the each of the years then ended for each of San Xxxx Bancshares and San Xxxx Delaware, accompanied by the audit compilation report thereon of the independent certified public accountant who audited prepared such statements (collectively, the “Southeast Texas "San Xxxx Year End Financial Statements”"). The Southeast Texas San Xxxx Year End Financial Statements fairly present the financial position of Southeast Texas San Xxxx Bancshares and its subsidiaries as of the dates thereof and the results of its operations for the periods indicated in conformity with generally accepted accounting principles applied on a consistent basis. In addition, Southeast Texas San Xxxx Bancshares has delivered to Texas Regional the unaudited balance sheet of Southeast Texas as of September 30, 2003, and the unaudited balance sheet and regulatory report of condition of Community Bank & Trust San Xxxx Bancshares as of September June 30, 2003 2002, and unaudited balance sheet and regulatory report of condition of Texas Country Bank as of June 30, 2002 and the related unaudited statements of income for each of Southeast Texas and Community Bank & Trust for the ninesix-month period then ended (collectively, the “Southeast Texas "San Xxxx Interim Financial Statements”"). The Balance Sheet included within the Southeast Texas San Xxxx Interim Financial Statements is herein referred to as the “Southeast Texas "San Xxxx Current Balance Sheet.” " In the opinion of the management of Southeast TexasSan Xxxx Bancshares, the Southeast Texas San Xxxx Interim Financial Statements also fairly present the financial position of Southeast San Xxxx Bancshares and Texas and Community Country Bank & Trust as of the date thereof and the results of their respective operations for the period indicated in conformity with generally accepted accounting principles applied on a consistent basis. The Southeast Texas San Xxxx Year End Financial Statements and the Southeast Texas San Xxxx Interim Financial Statements are collectively referred to hereinafter as the “Southeast Texas "San Xxxx Financial Statements.” " The Southeast Texas San Xxxx Financial Statements do not, as of the dates thereof, include any material assets or omit to state any material liability, absolute or contingent, or other fact, the inclusion or omission of which renders such financial statements, in light of the circumstances under which they were made, materially misleading. Without limiting the generality of the foregoing, Southeast Texas San Xxxx Bancshares specifically represents to Texas Regional that Southeast Texas San Xxxx Bancshares and its subsidiaries have no liabilities, either accrued, contingent or otherwise, which, individually or in the aggregate, are material, which have not been reflected in the Southeast Texas San Xxxx Financial Statements, except (a) deposit liabilities and other current liabilities incurred in the ordinary course of business since the date of the balance sheets included therein, and (b) in the case of interim financial statements, normal recurring year-end adjustments, none of which are or will be material. As of the time of Closing, any material liabilities, accrued, contingent or otherwise, which have been incurred since December 31June 30, 2002, will have been fully disclosed to Texas Regional. Southeast Texas shall record as liabilities all obligations arising as a result of the consummation of the transactions contemplated by this Agreement at Closing. Such obligations shall include, but not be limited to, required payments under stock appreciation rights agreements and any required payments to settle and terminate material contracts for data processing services and automated teller machine contracts effective as of May 8, 2004, or such other date determined by mutual decision of Texas Regional and Southeast Texas. The Southeast Texas Current Balance Sheet does not reflect such obligations; however, the financial statements provided for purposes of Section 5.9.1 of this Agreement will reflect such liabilities.

Financial Statements and Records. 2.5.1 Southeast Texas 2.4.1 Raymondville has delivered to Texas Regional (i) the audited consolidated balance sheet of Southeast Texas Raymondville and its subsidiaries as of December 31, 2002 1996, 1995 and 20011994 (the "Balance Sheet"), and the related audited consolidated statements of income, changes in stockholders’ ' equity and cash flows changes in financial position for each of the years then ended, together with the notes thereto, accompanied as compiled by the audit report thereon Comptroller of Bank of Texas, from the independent certified public accountant who audited such books and records of Raymondville and the Bank of Texas. These financial statements (the “Southeast Texas Year End Financial Statements”). The Southeast Texas Year End Financial Statements fairly present the financial position of Southeast Texas Raymondville and its subsidiaries as of the dates thereof and the results of its operations for the periods indicated in conformity with generally accepted accounting principles applied on a consistent basis. To the best knowledge of Raymondville, the compiled consolidated financial statements of Raymondville and its subsidiaries have been prepared in accordance with generally accepted accounting principles. In addition, Southeast Texas Raymondville has delivered to Texas Regional the its unaudited parent company only balance sheet sheets and regulatory reports of Southeast condition of Raymondville as of October 31, 1997, and its unaudited bank only balance sheets and regulatory reports of condition of Bank of Texas as of September 30October 31, 20031997 (collectively, such balance sheets are hereafter sometimes called the "Raymondville Balance Sheet" and the unaudited balance sheet and regulatory report "Bank of condition of Community Bank & Trust as of September 30Texas Balance Sheet, 2003 respectively) and the related unaudited statements of income for each of Southeast Texas income, changes in stockholders' equity and Community Bank & Trust changes in financial position for the nineten-month period then ended (collectively, the “Southeast Texas Interim Financial Statements”)ended. The Balance Sheet included within the Southeast Texas Interim Financial Statements is herein referred to as the “Southeast Texas Current Balance Sheet.” In the opinion of the management of Southeast TexasRaymondville, the Southeast Texas Interim Financial Statements these financial statements also fairly present the financial position of Southeast Raymondville and Bank of Texas and Community Bank & Trust as of the date thereof and the results of their respective operations for the period indicated in conformity with generally accepted accounting principles applied on a consistent basis. The Southeast Texas Year End Financial Statements and All of the Southeast Texas Interim Financial Statements financial statements described in this paragraph are collectively referred to hereinafter as the “Southeast Texas "Raymondville Financial Statements.” The Southeast Texas " Except as described in SCHEDULE 2.4.1, the Raymondville Financial Statements do not, as of the dates thereof, include any material assets or omit to state any material liability, absolute or contingent, or other fact, the inclusion or omission of which renders such financial statements, in light of the circumstances under which they were made, materially misleading. Without limiting the generality of the foregoing, Southeast Texas except as described in SCHEDULE 2.4.1, Raymondville specifically represents to Texas Regional that Southeast Texas Raymondville and its subsidiaries have no liabilities, either accrued, contingent or otherwise, which, individually or in the aggregate, are material, which have not been reflected in the Southeast Raymondville Financial Statements (including the Raymondville Balance Sheet and the Bank of Texas Financial Statements, except (aBalance Sheet) deposit liabilities and other current liabilities or which have been incurred in the ordinary course of business since the date of the balance sheets included therein, Raymondville Balance Sheet and (b) in the case Bank of interim financial statements, normal recurring year-end adjustments, none of which are or will be materialTexas Balance Sheet. As of the time of Closing, any material liabilities, accrued, contingent or otherwise, which have been incurred since December 31September 30, 20021997, will have been fully disclosed to Texas Regional. Southeast Texas shall record as liabilities all obligations arising as a result of the consummation of the transactions contemplated by this Agreement at Closing. Such obligations shall include, but not be limited to, required payments under stock appreciation rights agreements and any required payments to settle and terminate material contracts for data processing services and automated teller machine contracts effective as of May 8, 2004, or such other date determined by mutual decision of Texas Regional and Southeast Texas. The Southeast Texas Current Balance Sheet does not reflect such obligations; however, the financial statements provided for purposes of Section 5.9.1 of this Agreement will reflect such liabilities.

Financial Statements and Records. 2.5.1 Southeast Texas 2.6.1 Riverway Holdings has delivered to Texas Regional (i) the audited consolidated balance sheet of Southeast Texas Riverway Holdings and its subsidiaries as of December 31, 2002 2000, 1999 and 20011998, and the related audited consolidated statements of income, changes in stockholders’ ' equity and cash flows for the each of the years then ended, together with the notes thereto, accompanied by the audit report thereon of the independent certified public accountant who audited examined such statements (the “Southeast Texas Year End "Riverway Audited Financial Statements”"). The Southeast Texas Year End Except to the extent qualified by the report of the independent accountant thereon, the Riverway Audited Financial Statements fairly present the financial position of Southeast Texas Riverway Holdings and its subsidiaries as of the dates thereof and the results of its operations for the periods indicated in conformity with generally accepted accounting principles applied on a consistent basis. To the best knowledge of Riverway Holdings, audits of Riverway Holdings and its subsidiaries have been conducted in accordance with generally accepted auditing standards. In addition, Southeast Texas Riverway Holdings has delivered to Texas Regional the unaudited balance sheet of Southeast Texas as of September 30, 2003, and the its unaudited balance sheet and regulatory report of condition of Community Bank & Trust Riverway Holdings as of September June 30, 2003 2001, and unaudited balance sheet and regulatory report of condition of Riverway Bank as of June 30, 2001 and the related unaudited statements of income for each of Southeast Texas and Community Bank & Trust for the ninesix-month period then ended (collectively, the “Southeast Texas "Riverway Interim Financial Statements”"). The Balance Sheet balance sheet included within the Southeast Texas Riverway Interim Financial Statements is herein referred to as the “Southeast Texas "Riverway Current Balance Sheet.” " In the opinion of the management of Southeast TexasRiverway Holdings, the Southeast Texas Riverway Interim Financial Statements also fairly present the financial position of Southeast Texas Riverway Holdings and Community Riverway Bank & Trust as of the date thereof and the results of their respective operations for the period indicated in conformity with generally accepted accounting principles applied on a consistent basis. The Southeast Texas Year End Riverway Audited Financial Statements and the Southeast Texas Riverway Interim Financial Statements are collectively referred to hereinafter as the “Southeast Texas "Riverway Financial Statements.” The Southeast Texas " Except for the July Trust Preferred Issue, and as described in the accountant's reports on the Riverway Financial Statements and on Section 2.1 of the Disclosure Letter, the Riverway Financial Statements do not, as of the dates thereof, include any material assets or omit to state any material liability, absolute or contingent, or other fact, the inclusion or omission of which renders such financial statements, in light of the circumstances under which they were made, materially misleading. Without limiting the generality of the foregoing, Southeast Texas specifically Riverway Holdings represents to Texas Regional that Southeast Texas that, except for the July Trust Preferred Issue and as noted in Section 2.1 of the Disclosure Letter, Riverway Holdings and its subsidiaries have no liabilities, either accrued, contingent or otherwise, which, individually or in the aggregate, are material, which have not been reflected in the Southeast Texas Riverway Financial Statements, except (a) deposit liabilities and other current liabilities incurred in the ordinary course of business since the date of the balance sheets included therein, and (b) in the case of interim financial statements, normal recurring year-end adjustments, none of which are or will be material. As of the time of Closing, any material liabilities, accrued, contingent or otherwise, which have been incurred since December 31June 30, 20022001, will have been fully disclosed to Texas Regional. Southeast Texas shall record as liabilities all obligations arising as a result of the consummation of the transactions contemplated by this Agreement at Closing. Such obligations shall include, but not be limited to, required payments under stock appreciation rights agreements and any required payments to settle and terminate material contracts for data processing services and automated teller machine contracts effective as of May 8, 2004, or such other date determined by mutual decision of Texas Regional and Southeast Texas. The Southeast Texas Current Balance Sheet does not reflect such obligations; however, the financial statements provided for purposes of Section 5.9.1 of this Agreement will reflect such liabilities.

Financial Statements and Records. 2.5.1 Southeast Texas 1. First State Bank has delivered to Texas Regional State Bank (i) the audited consolidated balance sheet of Southeast Texas and its subsidiaries First State Bank as of December 31, 2002 and 20011994 (the "December 31, 1994 Balance Sheet"), and the related audited consolidated statements of income, changes in stockholders’ ' equity and cash flows changes in financial position for each of the years year then ended, together with the notes thereto, accompanied by the audit report thereon of the independent certified public accountant who audited examined such statements; and (ii) the unaudited regulatory reports of condition of First State Bank as of December 31, 1993, 1992 and 1991, and the related unaudited statements (of income and changes in equity capital for each of the “Southeast Texas Year End Financial Statements”)years then ended. The Southeast Texas Year End Financial Statements Except to the extent qualified by the report of the independent accountant thereon, these financial statements fairly present the financial position of Southeast Texas and its subsidiaries First State Bank as of the dates thereof and the results of its operations for the periods indicated indicated. The December 31, 1994 Balance Sheet and audited financial statements for the fiscal year then ended, have been prepared in conformity with generally accepted accounting principles applied on a consistent basis. To the best knowledge of First State Bank, audits of First State Bank have been conducted in accordance with generally accepted auditing standards. In addition, Southeast Texas First State Bank has delivered to Texas Regional the unaudited balance sheet of Southeast Texas as of September 30, 2003, and the State Bank its unaudited balance sheet and regulatory report of condition of Community Bank & Trust as of September 30, 2003 1995 (collectively, the "September 30, 1995 Balance Sheet") and the related unaudited statements of income for each of Southeast Texas income, changes in stockholders' equity and Community Bank & Trust changes in financial position for the ninetwelve-month period then ended (collectively, the “Southeast Texas Interim Financial Statements”)ended. The Balance Sheet included within the Southeast Texas Interim Financial Statements is herein referred to as the “Southeast Texas Current Balance Sheet.” In the opinion of the management of Southeast TexasFirst State Bank, the Southeast Texas Interim Financial Statements these financial statements also fairly present the financial position of Southeast Texas and Community First State Bank & Trust as of the date thereof and the results of their respective its operations for the period indicated and the financial records upon which such financial statements are based have been kept in conformity accordance with prudent banking practices and the past practices of First State Bank. Except as disclosed in SCHEDULE 2.3.1, the September 30, 1995 Balance Sheet and related financial statements for the nine-month period then ended, have been prepared in accordance with generally accepted accounting principles applied on a consistent basisprinciples, consistently applied. The Southeast Texas Year End Financial Statements December 31, 1994 Balance Sheet and the Southeast Texas Interim Financial Statements September 30, 1995 Balance Sheet, and the financial statements for the twelve and nine-month periods then ended, described above are collectively referred to hereinafter as the “Southeast Texas Financial Statements.” The Southeast Texas Financial Statements do not, as of the dates thereof, include any material assets or omit to state any material liability, absolute or contingent, or other fact, the inclusion or omission of which renders such financial statements, in light of the circumstances under which they were made, materially misleading. Without limiting the generality of the foregoing, Southeast Texas specifically represents to Texas Regional that Southeast Texas and its subsidiaries have no liabilities, either accrued, contingent or otherwise, which, individually or in the aggregate, are material, which have not been reflected in the Southeast Texas Financial Statements, except (a) deposit liabilities and other current liabilities incurred in the ordinary course of business since the date of the balance sheets included therein, and (b) in the case of interim financial statements, normal recurring year-end adjustments, none of which are or will be material. As of the time of Closing, any material liabilities, accrued, contingent or otherwise, which have been incurred since December 31, 2002, will have been fully disclosed to Texas Regional. Southeast Texas shall record as liabilities all obligations arising as a result of the consummation of the transactions contemplated by this Agreement at Closing. Such obligations shall include, but not be limited to, required payments under stock appreciation rights agreements and any required payments to settle and terminate material contracts for data processing services and automated teller machine contracts effective as of May 8, 2004, or such other date determined by mutual decision of Texas Regional and Southeast Texas. The Southeast Texas Current Balance Sheet does not reflect such obligations; however, the financial statements provided for purposes of Section 5.9.1 of this Agreement will reflect such liabilities."First State