Common use of Financial Statements and Records Clause in Contracts

Financial Statements and Records. 1. First State Bank has delivered to Texas State Bank (i) the audited balance sheet of First State Bank as of December 31, 1994 (the "December 31, 1994 Balance Sheet"), and the related audited statements of income, changes in stockholders' equity and changes in financial position for the year then ended, together with the notes thereto, accompanied by the report thereon of the independent certified public accountant who 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 years then ended. Except to the extent qualified by the report of the independent accountant thereon, these financial statements fairly present the financial position of First State Bank as of the dates thereof and the results of its operations for the periods 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, First State Bank has delivered to Texas State Bank its unaudited balance sheet and regulatory report of condition as of September 30, 1995 (collectively, the "September 30, 1995 Balance Sheet") and the related unaudited statements of income, changes in stockholders' equity and changes in financial position for the twelve-month period then ended. In the opinion of the management of First State Bank, these financial statements also fairly present the financial position of First State Bank as of the date thereof and the results of its operations for the period indicated and the financial records upon which such financial statements are based have been kept in 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, consistently applied. The December 31, 1994 Balance Sheet and the 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 "First State

Financial Statements and Records. 1. First State Bank 2.5.1 Southeast Texas has delivered to Texas State Bank Regional (i) the audited consolidated balance sheet of First State Bank Southeast Texas and its subsidiaries as of December 31, 1994 (the "December 31, 1994 Balance Sheet")2002 and 2001, and the related audited consolidated statements of income, changes in stockholders' ’ equity and changes in financial position cash flows for each of the year years then ended, together with the notes thereto, accompanied by the audit report thereon of the independent certified public accountant who examined audited such statements; and statements (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 years then ended“Southeast Texas Year End Financial Statements”). Except to the extent qualified by the report of the independent accountant thereon, these financial statements The Southeast Texas Year End Financial Statements fairly present the financial position of First State Bank Southeast Texas and its subsidiaries as of the dates thereof and the results of its operations for the periods indicated. The December 31, 1994 Balance Sheet and audited financial statements for the fiscal year then ended, have been prepared indicated 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, First State Bank Southeast Texas has delivered to Texas State Bank its 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, 1995 (collectively, the "September 30, 1995 Balance Sheet") 2003 and the related unaudited statements of income, changes in stockholders' equity income for each of Southeast Texas and changes in financial position Community Bank & Trust for the twelvenine-month period then endedended (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 First State BankSoutheast Texas, these financial statements the Southeast Texas Interim Financial Statements also fairly present the financial position of First State Southeast Texas and Community Bank & Trust as of the date thereof and the results of its their respective operations for the period indicated and the financial records upon which such financial statements are based have been kept in 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 conformity with generally accepted accounting principles, consistently appliedprinciples applied on a consistent basis. The December 31, 1994 Balance Sheet Southeast Texas Year End Financial Statements and the September 30, 1995 Balance Sheet, and the financial statements for the twelve and nine-month periods then ended, described above Southeast Texas Interim Financial Statements are collectively referred to hereinafter as the "First State“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. 1. First State Bank 2.4.1 Raymondville has delivered to Texas State Bank Regional (i) the audited consolidated balance sheet of First State Bank Raymondville and its subsidiaries as of December 31, 1996, 1995 and 1994 (the "December 31, 1994 Balance Sheet"), and the related audited consolidated statements of income, changes in stockholders' equity and changes in financial position for the year years then ended, together with the notes thereto, accompanied as compiled by the report thereon Comptroller of Bank of Texas, from the independent certified public accountant who examined such statements; books and (ii) the unaudited regulatory reports records of condition of First State Bank as of December 31, 1993, 1992 and 1991, Raymondville and the related unaudited statements Bank of income and changes in equity capital for each of the years then endedTexas. Except to the extent qualified by the report of the independent accountant thereon, these These financial statements fairly present the financial position of First State Bank Raymondville and its subsidiaries as of the dates thereof and the results of its operations for the periods indicated. The December 31, 1994 Balance Sheet and audited financial statements for the fiscal year then ended, have been prepared indicated in conformity with generally accepted accounting principles applied on a consistent basis. To the best knowledge of First State BankRaymondville, audits the compiled consolidated financial statements of First State Bank Raymondville and its subsidiaries have been conducted prepared in accordance with generally accepted auditing standardsaccounting principles. In addition, First State Bank Raymondville has delivered to Texas State Bank Regional its unaudited parent company only balance sheet sheets and regulatory report reports of condition of Raymondville as of September 30October 31, 1995 1997, and its unaudited bank only balance sheets and regulatory reports of condition of Bank of Texas as of October 31, 1997 (collectively, such balance sheets are hereafter sometimes called the "September 30, 1995 Raymondville Balance Sheet" and the "Bank of Texas Balance Sheet, respectively) and the related unaudited statements of income, changes in stockholders' equity and changes in financial position for the twelveten-month period then ended. In the opinion of the management of First State BankRaymondville, these financial statements also fairly present the financial position of First State Raymondville and Bank of Texas as of the date thereof and the results of its their respective operations for the period indicated and the financial records upon which such financial statements are based have been kept in 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 conformity with generally accepted accounting principles, consistently appliedprinciples applied on a consistent basis. The December 31, 1994 Balance Sheet and the September 30, 1995 Balance Sheet, and All of the financial statements for the twelve and nine-month periods then ended, described above in this paragraph are collectively referred to hereinafter as the "First StateRaymondville Financial Statements." 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, except as described in SCHEDULE 2.4.1, Raymondville specifically represents to Texas Regional that 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 Raymondville Financial Statements (including the Raymondville Balance Sheet and the Bank of Texas Balance Sheet) or which have been incurred in the ordinary course of business since the date of the Raymondville Balance Sheet and the Bank of Texas Balance Sheet. As of the time of Closing, any material liabilities, accrued, contingent or otherwise, which have been incurred since September 30, 1997, will have been fully disclosed to Texas Regional.

Financial Statements and Records. 1. First State Bank 2.6.1 Riverway Holdings has delivered to Texas State Bank Regional (i) the audited consolidated balance sheet of First State Bank Riverway Holdings and its subsidiaries as of December 31, 1994 (the "December 312000, 1994 Balance Sheet")1999 and 1998, and the related audited consolidated statements of income, changes in stockholders' equity and changes in financial position cash flows for the year each of the years then ended, together with the notes thereto, accompanied by the report thereon of the independent certified public accountant who examined such statements; and statements (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 years then ended"Riverway Audited Financial Statements"). Except to the extent qualified by the report of the independent accountant thereon, these financial statements the Riverway Audited Financial Statements fairly present the financial position of First State Bank Riverway Holdings and its subsidiaries as of the dates thereof and the results of its operations for the periods indicated. The December 31, 1994 Balance Sheet and audited financial statements for the fiscal year then ended, have been prepared indicated in conformity with generally accepted accounting principles applied on a consistent basis. To the best knowledge of First State BankRiverway Holdings, audits of First State Bank Riverway Holdings and its subsidiaries have been conducted in accordance with generally accepted auditing standards. In addition, First State Bank Riverway Holdings has delivered to Texas State Bank Regional its unaudited balance sheet and regulatory report of condition of Riverway Holdings as of September June 30, 1995 (collectively2001, the "September and unaudited balance sheet and regulatory report of condition of Riverway Bank as of June 30, 1995 Balance Sheet") 2001 and the related unaudited statements of income, changes in stockholders' equity and changes in financial position income for the twelvesix-month period then endedended (collectively, the "Riverway Interim Financial Statements"). The balance sheet included within the Riverway Interim Financial Statements is herein referred to as the "Riverway Current Balance Sheet." In the opinion of the management of First State BankRiverway Holdings, these financial statements the Riverway Interim Financial Statements also fairly present the financial position of First State Riverway Holdings and Riverway Bank as of the date thereof and the results of its their respective operations for the period indicated and the financial records upon which such financial statements are based have been kept in 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 conformity with generally accepted accounting principles, consistently appliedprinciples applied on a consistent basis. The December 31, 1994 Balance Sheet Riverway Audited Financial Statements and the September 30, 1995 Balance Sheet, and the financial statements for the twelve and nine-month periods then ended, described above Riverway Interim Financial Statements are collectively referred to hereinafter as the "First StateRiverway Financial Statements." 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, Riverway Holdings represents to Texas Regional 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 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 June 30, 2001, will have been fully disclosed to Texas Regional.

Financial Statements and Records. 1. First State Bank 2.5.1 San Xxxx Bancshares has delivered to Texas State Bank Regional (i) the audited unaudited parent company only balance sheet of First State Bank 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 Country Bank, in each case as of December 31, 1994 (the "December 312001, 1994 Balance Sheet")2000 and 1999, and the related audited unaudited consolidated statements of incomeincome for each of the years then ended, and the unaudited statements of changes in stockholders' equity and changes in financial position cash flows for the year each of the years then ended, together with the notes theretoended for each of San Xxxx Bancshares and San Xxxx Delaware, accompanied by the compilation report thereon of the independent certified public accountant who examined prepared such statements; and statements (ii) collectively, 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 years then ended"San Xxxx Year End Financial Statements"). Except to the extent qualified by the report of the independent accountant thereon, these financial statements The San Xxxx Year End Financial Statements fairly present the financial position of First State Bank San Xxxx Bancshares and its subsidiaries as of the dates thereof and the results of its operations for the periods indicated. The December 31, 1994 Balance Sheet and audited financial statements for the fiscal year then ended, have been prepared indicated 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, First State Bank San Xxxx Bancshares has delivered to Texas State Bank its Regional the unaudited balance sheet and regulatory report of condition of San Xxxx Bancshares as of September June 30, 1995 (collectively2002, the "September and unaudited balance sheet and regulatory report of condition of Texas Country Bank as of June 30, 1995 Balance Sheet") 2002 and the related unaudited statements of income, changes in stockholders' equity and changes in financial position income for the twelvesix-month period then endedended (collectively, the "San Xxxx Interim Financial Statements"). The Balance Sheet included within the San Xxxx Interim Financial Statements is herein referred to as the "San Xxxx Current Balance Sheet." In the opinion of the management of First State BankSan Xxxx Bancshares, these financial statements the San Xxxx Interim Financial Statements also fairly present the financial position of First State San Xxxx Bancshares and Texas Country Bank as of the date thereof and the results of its their respective operations for the period indicated and the financial records upon which such financial statements are based have been kept in 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 conformity with generally accepted accounting principles, consistently appliedprinciples applied on a consistent basis. The December 31, 1994 Balance Sheet San Xxxx Year End Financial Statements and the September 30, 1995 Balance Sheet, and the financial statements for the twelve and nine-month periods then ended, described above San Xxxx Interim Financial Statements are collectively referred to hereinafter as the "First StateSan Xxxx Financial Statements." The 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, San Xxxx Bancshares specifically represents to Texas Regional that 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 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 June 30, 2002, will have been fully disclosed to Texas Regional.