FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
F-16
The average recorded investment in impaired loans for the years ended December 31, 2002 and 2001, was
approximately $3,776,000 and $3,773,000, respectively.   The Company had approximately $4,266,000 and
$4,824,000 in nonperforming assets at December 31, 2002 and 2001, respectively.  No additional funds are
committed to be advanced in connection with impaired loans.
Interest payments received on impaired loans are recorded as interest income unless collections of the remaining
recorded investment are doubtful, at which time payments received are recorded as reductions of principal.  The
Company recognized interest income on impaired loans of approximately $111,000, $136,000 and $213,000 during
the years ended December 31, 2002, 2001, and 2000, respectively, of which approximately $2,000, $9,000 and
$16,000 represented cash interest payments received and recorded as interest income.  If interest on impaired loans
had been recognized on a full accrual basis during the years ended December 31, 2002, 2001, and 2000,
respectively, such income would have approximated $317,000, $399,000 and $449,000.
The allowance for loan losses as of December 31, 2002 and 2001, is presented below.  Management has evaluated
the adequacy of the allowance for loan losses by estimating the losses in various categories of the loan portfolio
which are identified below:
      2002            2001      
Allowance for loan losses provided for:
Loans specifically evaluated as impaired $     752,385 $     926,636
Remaining portfolio   10,466,344     9,675,783
Total allowance for loan losses $11,218,729 $10,602,419
Changes in the allowance for loan losses are summarized as follows:
                                December 31,                            
      2002            2001            2000      
Balance at beginning of year $10,602,419 $ 9,887,646 $ 8,937,542
Add:
Provision for loan losses 2,369,634 1,964,050 2,397,750
Loan recoveries 834,150 968,535 1,545,080
Allowance established at acquisition -      407,129 -
Deduct:
Loan charge-offs   (2,587,474)   (2,624,941 )  (2,992,726)
Balance at end of year $11,218,729 $10,602,419 $  9,887,646
An analysis of the changes in loans to officers, directors, principal shareholders, or associates of such persons for the
years ended December 31, 2002 and 2001 (determined as of each respective year-end) follows:
Beginning Additional Ending
  Balance       Loans       Payments    Balance  
Year ended December 31, 2002 $44,426,313 $27,349,995 $44,235,855 $27,540,453
Year ended December 31, 2001 $35,575,573 $51,556,164 $42,970,581 $44,161,156
In the opinion of management, those loans are on substantially the same terms, including interest rates and collateral
requirements, as those prevailing at the time for comparable transactions with unaffiliated persons.