FIRST FINANCIAL BANKSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
F-29
17. BUSINESS COMBINATION:
In July 2001, the Company purchased all of the outstanding stock of City Bancshares, Inc. (“City”) and its
subsidiary, City National Bank for $16,500,000 in cash.  The total purchase price exceeded the estimated fair market
value of net assets acquired by approximately $7,800,000, of which approximately $950,000 was assigned to an
identifiable intangible asset with the balance recorded by the Company as goodwill.  The identifiable intangible
asset represents the future benefit associated with the acquisition of the core deposits of City and is being amortized
over seven years utilizing a method that approximates the expected attrition of the deposits.
The primary purpose of the acquisition was to expand the Company’s market share in areas with close proximity to
Dallas/Ft. Worth, Texas.  Factors that contributed to a purchase price resulting in goodwill include City’s
historically stable record of earnings, capable management and its geographic location, which complements the
Company’s existing service locations.  Subsequent to the acquisition, the Company liquidated the stock of City and
City National Bank is operating as a subsidiary of the Company.  The results of operations of City National Bank are
included in the consolidated earnings of the Company commencing July 1, 2001.
The following is a condensed consolidated balance sheet disclosing the preliminary estimated fair value amounts
assigned to the major asset and liability captions at the acquisition date.
ASSETS
Cash and cash equivalents $    9,651,769
Investment securities 29,717,834
Loans, net 51,061,735
Goodwill 6,891,959
Identifiable intangible asset 946,073
Other assets     1,465,727
Total assets $  99,735,097
LIABILITIES AND SHAREHOLDER’S EQUITY
Noninterest-bearing deposits $  11,949,766
Interest-bearing deposits 70,575,256
Other liabilities 710,075
Shareholders' equity   16,500,000
Total liabilities and shareholder’s equity $  99,735,097
Goodwill recorded in the acquisition of City has been accounted for in accordance with SFAS No. 142.
Accordingly, goodwill has not been amortized, rather it has been tested for impairment.  The goodwill and
identifiable intangible asset recorded are not deductible for federal income tax purposes.  The proforma impact of
City is insignificant to the Company's financial statements.
Cash flow information relative to the acquisition of City is, as follows:
Fair value of assets acquired $   99,735,097
Cash paid for the capital stock of City    16,500,000
Liabilities assumed $   83,235,097