Robert S. Patterson First National Bank  of Abilene David Byrd San Angelo  National Bank Perry Elliott Stephenville Bank  & Trust Co. Janis McDowell First National Bank,  Sweetwater TRUST FEES  in millions TRUST ASSETS  in millions 98 99 00 01 02 $0 $500 $600 $700 $800 $900 $1000 $100 $200 $300 $400 $845 $911 $959 $986 $774 98 99 00 01 02 $0 $4 $3 $5 $6 $1 $2 $5.10 $5.50 $5.89 $5.83 $4.75 13 J. Bruce Hildebrand Executive Vice President To further enhance our risk management assessments in 2003, we will be introducing an Operational Peer Review Team similar to the successful peer review teams used in the Personal Trust areas of our four locations. During 2002, we saw a successful conversion of Stephenville Bank & Trust to the SEI Corporation account- ing system. In March 2003, we will be converting First National Bank, Sweetwater, to this system as well. This will provide all First Financial Bankshares trust clients with the strength and advantages of a uniform accounting system. Other operational systems have been examined and con- sistent practices and procedures have been implemented.  The performance of the stock market the past three years has been a challenge that our trust investment profes- sionals have managed well. Not since 1939-1941 have we seen the S&P 500 drop 35% in a three-year period. Our portfolio managers outperformed their indices in Large Cap stocks by 83 basis points and Fixed Income securi- ties by 168 basis points. This performance bodes well for the present and future of our client accounts. With skilled trust professionals offering a complete range of financial products and services, the future of our trust departments look bright. Through dedication to individu- alized portfolio design and personalized service, our trust departments stand ready to meet the needs of our pres- ent and future clients. Plans for the formation of a First Financial Bankshares trust company are moving forward with regulatory approval anticipated in late Spring or early Summer. This will permit your Company to provide quality, locally delivered trust services to additional markets. Assets managed by the Trust Departments at First National Bank of Abilene, San Angelo National Bank, Stephenville Bank & Trust Co. and First National Bank, Sweetwater, increased $27.3 million during the past year to a  December 31, 2002 book value of $986.2 million. However, due to depressed stock market values and volumes, trust department revenue declined in 2002. Trust combined revenues for the year were down slightly from $5.89 mil- lion in 2001 to $5.83 million for 2002. In 2003, we anticipate a return to improved income growth.  Robert S. Patterson Senior Vice President, Trust Services