text: range of services to individuals, associations, and corporations. These services include administering estates, 
  testamentary trusts, various types of living trusts, and agency accounts. In addition, First National Bank of Abilene, 
  First Financial Bank, Cleburne, San Angelo National Bank and First Financial Bank, National Association, 
  Southlake, Texas provide securities brokerage services through arrangements with various third parties. 
  
  We have filed an application with the office of the Comptroller of the Currency to form a limited purpose 
  national bank under which we will consolidate the management of our current trust departments. The new entity 
  will operate as a subsidiary of our subsidiary holding company, First Financial Bankshares of Delaware, Inc. We 
  believe that with this structure we can more effectively manage our current trust operations and provide trust 
  services to customers of our banks that do not currently have trust departments. We anticipate that the new trust 
  company will begin operations in the latter part of 2003. 
  
  **Competition**
  
  Commercial banking in Texas is highly competitive, and because we hold less than 1% of the state’s deposits, 
  we represent only a minor segment of the industry. To succeed in this industry, our management believes that our 
  banks must have the capability to compete in the areas of (1) interest rates paid or charged; (2) scope of services 
  offered; and (3) prices charged for such services. Our subsidiary banks compete in their respective service areas 
  against highly competitive banks, thrifts, savings and loan associations, small loan companies, credit unions, 
  mortgage companies, and brokerage firms, all of which are engaged in providing financial products and services and 
  some of which are larger than our subsidiary banks in terms of capital, resources and personnel. 