<PAGE>   1
   
                              AMENDED AND RESTATED

                                 FORM 10-QSB/A

                                AMENDMENT NO. 1
    
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

(Mark One)

[ X ] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange 
      Act of 1934 

For the quarterly period ended June 30, 1996

[    ] Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from                  to 
                               ----------------     -----------------

                          Commission File No. 0-13668

                        CORPUS CHRISTI BANCSHARES, INC.
            -------------------------------------------------------
            (Exact name of Registrant as specified in its charter.)

                 Texas                                 74-2351663 
--------------------------------------------------------------------------------
    (State or other jurisdiction of        (IRS Employer Identification No.) 
     Incorporation or Organization)

      2402 Leopard Street, Corpus Christi, Texas            78408            
--------------------------------------------------------------------------------
       (Address of principal executive offices)           (Zip Code)

                                 (512) 887-3000          
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past twelve months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

                             Yes [ X ]    No [    ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

               Class                      Outstanding at August 13, 1996 
--------------------------------------------------------------------------------
   COMMON STOCK, $5.00 PAR VALUE                    1,600,000

           Transitional Small Business Disclosure Format (check one):
                             Yes [    ]  No [  X  ]



                                       1
<PAGE>   2
                CORPUS CHRISTI BANCSHARES, INC. AND SUBSIDIARIES

                                    INDEX

<TABLE>
<CAPTION>
                                                                                          PAGE
                                                                                          NUMBER
<S>                                                                                       <C>
Part I. Financial Information                                                             
                                                                                          
        Item 1. Financial Statements                                                      
                                                                                          
           Consolidated Balance Sheets - June 30, 1996 and                                
              December 31, 1995                                                            3
                                                                                          
           Consolidated Statements of Income -                                            
              Three months and six months ended June 30, 1996 and June 30, 1995            5
                                                                                          
           Consolidated Statements of Changes in Shareholders'                            
              Equity - Six months ended June 30, 1996 and June 30,1995                     6
                                                                                          
           Consolidated Statements of Cash Flows -                                        
              Three months and six months ended June 30, 1996 and June 30, 1995            7
                                                                                          
           Notes to Consolidated Financial Statements                                      8
                                                                                          
        Item 2. Management's Discussion and Analysis of Financial                         
                  Condition and Results of Operation                                      12
                                                                                          
Part II. Other Information                                                                
                                                                                          
        Item 4. Submission of Matters to a Vote of Security Holders                       18
                                                                                          
        Item 6. Exhibits and Reports on Form 8-K                                          19
                                                                                          
                 Signatures                                                               20
</TABLE>





                                       2
<PAGE>   3
                         Part I. Financial Information
                          Item 1. Financial Statements

                CORPUS CHRISTI BANCSHARES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                        June 30,                   December 31,
                                                                          1996                         1995
ASSETS:                                                                (Unaudited)                  (Audited)
                                                                     ===========================================
<S>                                                                  <C>                        <C>
Cash and due from banks                                              $    11,413,504            $    18,568,553
Interest bearing deposits with Federal Home Loan Bank                         28,192                    114,615
Federal funds sold                                                           100,000                  6,000,000
                                                                       
Securities available for sale: (Note 3)                                
  U.S. Treasury securities                                                31,227,812                 40,597,190
  Mortgage pass-through and related securities                            41,295,897                 40,061,876
  Other securities                                                           753,100                    610,150
                                                                     ------------------------------------------
      Total securities available for sale                                 73,276,809                 81,269,216
                                                                       
Securities held to maturity: (Note 4)                                  
   U.S. Government agencies                                                1,002,261                  1,003,210
   Obligations of states and political subdivisions                        4,692,960                  4,859,314
                                                                     ------------------------------------------
      Total securities held to maturity                                    5,695,221                  5,862,524
                                                                       
Loans (Note 5)                                                           113,573,376                108,978,196
  Less: Unearned discount                                                 (4,607,388)                (4,444,346)
  Less: Allowance for loan losses (Note 6)                                (2,334,942)                (2,542,513)
                                                                     ------------------------------------------
     Net loans                                                           106,631,046                101,991,337
                                                                       
Bank premises and equipment, net                                           4,979,720                  5,213,133
Accrued interest receivable                                                1,794,321                  1,842,287
Intangible assets                                                          1,740,059                  1,781,854
Other real estate                                                            345,567                    529,560
Other assets                                                                 609,386                    694,284
                                                                     ------------------------------------------
          Total assets                                               $   206,613,825            $   223,867,363
                                                                     ==========================================
</TABLE>


See accompanying notes to Consolidated Financial Statements.





                                       3
<PAGE>   4
                CORPUS CHRISTI BANCSHARES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                  (Continued)

<TABLE>
<CAPTION>
                                                                              June 30,                 December 31,
                                                                                1996                       1995
                                                                             (Unaudited)                (Audited)
                                                                          ============================================
<S>                                                                       <C>                      <C>         
LIABILITIES AND SHAREHOLDERS' EQUITY:

Deposits:
   Demand                                                                 $      49,808,780         $       58,790,068
   Interest bearing transaction accounts                                         62,224,302                 72,494,574
   Savings                                                                       15,382,514                 15,600,520
   Certificates of deposit (Note 7)                                              52,234,418                 54,012,748
                                                                          --------------------------------------------
          Total deposits                                                        179,650,014                200,897,910

Federal funds purchased                                                           5,825,000                       ----
Securities sold with agreements to repurchase                                     3,465,000                  5,459,000
Accrued interest payable                                                            324,733                    370,369
Dividends payable                                                                   120,000                    100,000
Other liabilities                                                                   810,646                    985,387
                                                                          --------------------------------------------
          Total liabilities                                                     190,195,393                207,812,666
                                                                          --------------------------------------------
SHAREHOLDERS' EQUITY:
   Common stock, $5.00 par value;
     4,000,000 shares authorized; 1,600,000
     shares issued and outstanding                                                8,000,000                  8,000,000
   Retained earnings                                                              9,002,150                  8,032,273
   Unrealized gains (losses) on securities available for sale                      (583,718)                    22,424
                                                                          --------------------------------------------
          Total shareholders' equity                                             16,418,432                 16,054,697
                                                                          --------------------------------------------
          Total liabilities and shareholders' equity                      $     206,613,825         $      223,867,363
                                                                          ============================================
</TABLE>


See accompanying notes to Consolidated Financial Statements.





                                       4
<PAGE>   5
               CORPUS CHRISTI BANCSHARES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                           Three months ended June 30,           Six months ended June 30,
Interest income:                                              1996              1995               1996              1995
                                                        ------------------------------------------------------------------------
<S>                                                     <C>                <C>               <C>                <C>
   Interest on loans                                    $     2,346,261    $     2,168,788   $      4,731,256   $      4,205,787
   Interest on deposits with other banks                          2,609                853              4,104              1,674
   Interest on federal funds sold                                 9,698            214,103             36,137            333,385
   Interest and dividends on securities                 
     available for sale:                                
     U.S. Treasury securities                                   461,453            431,017            999,150            912,394
     Mortgage pass-through and related securities               659,555             62,443          1,336,039            120,179
     Other securities                                             9,920              9,014             18,867             16,928
   Interest on securities held to maturity:             
     U.S. Government agencies                                    23,401             74,900             46,801            149,801
     State and Political subdivisions                            77,316             80,536            155,270            161,073
                                                        ------------------------------------------------------------------------
           Total interest income                              3,590,213          3,041,654          7,327,624          5,901,221
                                                        ------------------------------------------------------------------------  
Interest expense:                                       
    Interest on deposits:                               
       Interest bearing transaction accounts                    481,002            496,272            955,699            962,692
       Savings                                                  124,020            135,765            237,899            260,916
       Certificates of deposit                                  670,400            532,193          1,364,615            983,837
       Federal funds purchased                                   26,266               ----             44,231               ----
       Securities sold with agreements to repurchase             48,520             21,846            118,479             21,885
                                                        ------------------------------------------------------------------------
          Total interest expense                              1,350,208          1,186,076          2,720,923          2,229,330
                                                        ------------------------------------------------------------------------
          Net interest income                                 2,240,005          1,855,578          4,606,701          3,671,891
Provision for loan losses                                          ----           (200,000)              ----           (400,000)
                                                        ------------------------------------------------------------------------
          Net interest income after provision           
             for loan losses                                  2,240,005          2,055,578          4,606,701          4,071,891
                                                        ------------------------------------------------------------------------
Other income:                                           
    Trust department income                                     277,819            294,541            565,078            605,124
    Service charges                                             283,718            255,155            556,466            497,860
    Credit card fees                                             46,006             46,512             83,072             87,187
    Brokerage fees                                              100,801             75,968            181,048            115,284
    Other income                                                134,429             92,653            275,470            186,145
                                                        ------------------------------------------------------------------------
          Total other income                                    842,773            764,829          1,661,134          1,491,600
                                                        ------------------------------------------------------------------------
Other expenses:                                         
    Salaries and employee benefits                            1,064,275          1,000,457          2,159,693          1,974,462
    Net occupancy expenses                                      264,714            238,562            527,741            481,761
    Furniture and equipment expenses                            193,360            171,456            374,548            349,900
    Amortization of intangible assets                            30,612               ----             60,605               ----
    Net cost to operate other real estate                        17,364             37,748             38,775             52,192
    Legal and professional fees                                 277,831            159,465            411,701            330,223
    Insurance expenses                                           19,777             95,426             41,306            197,856
    Advertising expenses                                         19,189             36,691             35,216             83,998
    Other operating expenses                                    409,275            402,116            778,315            773,056
                                                        ------------------------------------------------------------------------
         Total other expense                                  2,296,397          2,141,921          4,427,900          4,243,448
                                                        ------------------------------------------------------------------------
         Income before income taxes                             786,381            678,486          1,839,935          1,320,043
Applicable income taxes                                         239,625            233,223            630,058            454,676
                                                        ------------------------------------------------------------------------
         Net income                                     $       546,756    $       445,263   $      1,209,877   $        865,367
                                                        ========================================================================
Weighted average of common stock and common                                                                                     
  stock equivalents outstanding                               1,709,206          1,681,260          1,705,660          1,680,348
                                                        ========================================================================
Net income per common share                             $           .32    $           .26   $            .71   $            .51
                                                        ========================================================================
</TABLE>
See accompanying notes to Consolidated Financial Statements.


                                       5
<PAGE>   6
                CORPUS CHRISTI BANCSHARES, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                        Net
                                                                                    Unrealized
                                                                                 Gains (Losses) on
                                                                                     Securities
                                                Common             Retained         Available for
                                                 Stock             Earnings             Sale              Total
                                            -----------------------------------------------------------------------
<S>                                         <C>                <C>               <C>                  <C>
Balance at January 1, 1995                  $     8,000,000    $     6,497,204    $     (1,058,743)   $  13,438,461

Net income for six months
  ended June 30, 1995                                  ----            865,367                ----          865,367

Cash dividends, declared,
  $.1250 per share                                     ----           (200,000)               ----         (200,000)

Net change in unrealized gains
  on securities available for sale
  for the six months ended
  June 30, 1995                                        ----               ----             898,323          898,323
                                            =======================================================================
Balance at June 30, 1995                    $     8,000,000    $     7,162,571   $        (160,420)   $  15,002,151
                                            =======================================================================

Balance at January 1, 1996                  $     8,000,000    $     8,032,273   $          22,424    $  16,054,697

Net income for six months
  ended June 30, 1996                                  ----          1,209,877                ----        1,209,877

Cash dividends, declared,
$.1500 per share                                       ----           (240,000)               ----         (240,000)

Net change in unrealized losses
  on securities available for sale
  for the six months ended
  June 30, 1996                                        ----               ----            (606,142)        (606,142)
                                            -----------------------------------------------------------------------
Balance at June 30, 1996                    $     8,000,000    $     9,002,150   $        (583,718)   $  16,418,432
                                            =======================================================================
</TABLE>

See accompanying notes to Consolidated Financial Statements.





                                       6
<PAGE>   7
                CORPUS CHRISTI BANCSHARES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                              Three months ended June 30,             Six months ended June 30,

                                                               1996               1995                1996                1995
                                                              ==================================================================
<S>                                                           <C>              <C>              <C>              <C>
Cash flows from operating activities:
Net income                                                    $     546,756    $     445,263    $   1,209,877     $      865,367
Adjustments to reconcile net income to net cash
  provided by operating activities:
   Depreciation                                                     165,100          164,121          334,679            323,575
   Provision for loan losses                                           ----         (200,000)            ----           (400,000)
   Deferred federal income tax expense (benefit)                    (88,563)          78,111          (12,942)           160,630
   Gain on sale of property and equipment                              (857)            ----          (14,292)              ----
   Gain on sale of securities available for sale                       ----             ----             ----               ----
   Gain on sale of other real estate                                   ----             ----             ----            (18,344)
   Net amortization of investment securities available
     for sale and securities held to maturity                       133,456          105,876          298,422            228,068
   Valuation provisions for other real estate                         5,000           30,000           20,000             60,000
   Decrease (increase) in accrued interest receivable               (12,112)        (104,749)          47,966             95,546
   Decrease (increase) in other assets                               (1,634)         229,389          126,693           (261,798)
   Increase (decrease) in accrued interest payable                  (22,293)          13,131          (45,636)            28,565
   Increase (decrease) in other liabilities                        (509,714)         119,316          150,338            530,274
                                                              ------------------------------------------------------------------
        Net cash provided by  (used)
            by operating activities                                 215,139          880,458        2,115,105          1,611,883
                                                              ------------------------------------------------------------------
Cash flows from investing activities:
   Net decrease (increase) in federal funds sold                       ----       (5,125,000)       5,900,000         (9,550,000)
   Proceeds from sales of securities available for sale                ----             ----             ----               ----
   Proceeds from maturities of securities available for sale      7,064,082        5,848,933       12,583,738         12,765,828
   Proceeds from maturities of securities held to maturity          100,000             ----          130,000               ----
   Purchase of securities available for sale                        (10,150)         (56,000)      (5,770,729)        (1,994,750)
   Purchase of securities held to maturity                             ----             ----             ----               ----
   Net increase in loans                                         (3,267,037)      (2,898,991)      (4,989,723)        (6,578,317)
   Recoveries of charged-off loans                                  172,994          350,417          350,014            505,844
   Purchase of bank premises and equipment                          (43,135)         (96,789)        (110,164)          (230,190)
   Proceeds from sale of bank premises and equipment                 23,190             ----           23,190               ----
   Proceeds from sale of other real estate                           89,333            4,300          163,993             93,989
                                                              ------------------------------------------------------------------
        Net cash provided (used) by investing activities          4,129,277       (1,973,130)       8,280,319         (4,987,596)
                                                              ------------------------------------------------------------------
Cash flows from financing activities:
   Net decrease in demand, interest bearing
     transaction and savings accounts                            (4,685,281)      (1,509,290)     (19,469,566)        (3,148,601)
   Net increase (decrease)  in certificates of deposit           (1,303,703)       2,561,502       (1,778,330)         3,742,354
   Net increase in federal funds purchased                        4,925,000             ----        5,825,000               ----
   Net increase (decrease) in securities sold with
     agreements to repurchase                                    (2,681,611)       2,068,929       (1,994,000)         2,471,929
   Dividends paid                                                  (100,000)        (100,000)        (220,000)          (200,000)
                                                              ------------------------------------------------------------------
       Net cash provided (used) by financing                                                                        
           activities                                            (3,845,595)       3,021,141      (17,636,896)         2,865,682
                                                              ------------------------------------------------------------------
       Net increase(decrease) in cash and cash                                                                         
           equivalents                                              498,821        1,928,469       (7,241,472)          (510,031)
       Cash and cash equivalents at beginning of                                                                    
           period                                                10,942,875       12,722,517       18,683,168         15,161,017
                                                              ------------------------------------------------------------------
       Cash and cash equivalents at end of period             $  11,441,696    $  14,650,986    $  11,441,696     $   14,650,986
                                                              ==================================================================
Supplementary information:
   Interest paid                                              $   1,372,501    $   1,172,945    $   2,766,559     $    2,200,765
                                                              ==================================================================
   Income taxes paid                                          $     790,000    $     260,000    $     879,007     $      260,000
                                                              ==================================================================
                                                                                                                                
</TABLE>


See accompanying notes to Consolidated Financial Statements.


                                       7
<PAGE>   8
                CORPUS CHRISTI BANCSHARES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  Basis of Presentation

    The Consolidated Financial Statements herein have been prepared by Corpus
    Christi Bancshares, Inc. (the "Company"), without audit, pursuant to the
    rules and regulations of the Securities and Exchange Commission. The
    consolidated financial statements include all adjustments (including normal
    recurring accruals) which, in the opinion of management, are necessary for
    the fair presentation of the results of the periods presented. Certain
    information and footnote disclosures normally included in financial
    statements prepared in accordance with generally accepted accounting
    principles have been omitted pursuant to such rules and regulations,
    although the Company believes that the disclosures are adequate to make the
    information presented not misleading. It is suggested that these financial
    statements be read in conjunction with the consolidated financial
    statements and the notes thereto in the Company's latest Annual Report on
    Form 10-KSB.

2.  Principles of Consolidation

    The consolidated financial statements for the Company include the accounts
    of Corpus Christi Bancshares, Inc. and its wholly owned subsidiaries,
    C.S.B.C.C., Inc. and Citizens State Bank ("Bank"), consolidated in
    accordance with generally accepted accounting principles. All major items
    of income and expense are recorded on the accrual basis of accounting, and
    all significant intercompany accounts and transactions have been
    eliminated. In the opinion of management, the consolidated financial
    statements present fairly the results of the periods presented. These
    statements have not been examined by independent public accountants and are
    subject to year-end audit and adjustments.

    Statements of Cash Flows

    For purposes of the consolidated statements of cash flows, the Company
    considers cash, due from bank accounts and interest bearing deposits with
    the Federal Home Loan Bank to be cash equivalent accounts.

    Net Income Per Common Share

    Primary net income per common share is computed on the weighted average
    number of shares of common stock outstanding, including common stock
    assumed outstanding to reflect the potential dilutive effect of common
    stock options. Fully diluted net income per common share is computed on the
    weighted average number of shares of common stock outstanding, including
    the common stock assumed outstanding to reflect the maximum dilutive effect
    of common stock options. Fully diluted net income per common share was not
    applicable for the periods presented because the effect is not significant.

3.  Securities Available for Sale

    Management determines the appropriate classification of securities at the
    time of purchase. Securities to be held for sale for indefinite periods of
    time and not intended to be held to maturity or on a long-term basis are
    classified as securities available for sale and are carried at market
    value.

    The securities available for sale portfolio provides the Company with an
    additional measure of liquidity and added flexibility in managing the
    Company's asset liability management strategy and such securities may be
    sold in





                                       8
<PAGE>   9
    response to changes in interest rates, resultant prepayment risk and other
    factors related to interest rate and resultant risk changes.

    Included in securities classified as securities available for sale are
    mortgage pass-through and related securities which represent participating
    interest in pools of long-term first mortgage loans originated and serviced
    by the issuers of the securities. Mortgage pass-through and related
    securities are carried at fair value. Market interest rate fluctuations can
    affect both the timing of prepayments of principal and the yield on the
    securities. Other securities include investments in the Federal Home Loan
    Bank of $690,100, Texas Independent Bank of $62,750 and the Corpus Christi
    Development Corporation of $250 at June 30, 1996. Premiums and discounts
    are amortized using the straight-line method over the remaining period to
    contractual maturity. The net unrealized gains or losses on securities
    available for sale are recorded as a separate component of shareholders'
    equity.

    The amortized cost and market value of securities available for sale at
    June 30, 1996 and December 31, 1995 were as follows:

<TABLE>
<CAPTION>
                                                               June 30, 1996
                                   ======================================================================
                                                          Gross              Gross
                                      Amortized        Unrealized         Unrealized          Market
                                        Cost             Gains              Losses            Value
                                   ======================================================================
<S>                                <C>               <C>                <C>               <C>
U.S. Treasury securities           $    31,208,412   $        81,270    $       (61,870)  $    31,227,812
Mortgage pass-through and
  related securities                    41,954,325            12,525           (670,953)       41,295,897
Other securities                           753,100              ----               ----           753,100
                                   ----------------------------------------------------------------------
                                   $    73,915,837   $        93,795    $      (732,823)  $    73,276,809
                                   ======================================================================
</TABLE>


<TABLE>
<CAPTION>
                                                             December 31, 1995
                                   ======================================================================
                                                          Gross              Gross
                                      Amortized        Unrealized         Unrealized          Market
                                        Cost             Gains              Losses            Value
                                   ======================================================================
<S>                                <C>               <C>                <C>               <C>
U.S. Treasury securities           $    40,429,105   $       210,918    $       (42,833)  $    40,597,190
Mortgage pass-through and
  related securities                    39,950,710           187,002            (75,836)       40,061,876
Other securities                           610,150              ----               ----           610,150
                                   ----------------------------------------------------------------------
                                   $    80,989,965   $       397,920    $      (118,669)  $    81,269,216
                                   ======================================================================
</TABLE>


    Securities available for sale with market values of $58,514,229 at June 
    30, 1996 and $6,599,170 at December 31, 1995 were pledged to secure 
    public deposits and for other purposes required or permitted by law.





                                       9
<PAGE>   10
4.  Securities Held to Maturity

    Securities held to maturity are stated at cost adjusted for amortization of
    premium and accretion of discounts which are recognized as adjustments to
    interest income. Management determines the appropriate classification of
    securities at the time of purchase. Securities held to maturity are
    acquired for long term investment purposes. Management is of the opinion
    that the Company has the intention and ability to hold securities
    classified as securities held to maturity until maturity.

    The amortized cost and approximate market value of securities classified as
    held to maturity at June 30, 1996 and December 31, 1995 are as follows:

<TABLE>
<CAPTION>
                                                               June 30, 1996
                                   ======================================================================
                                                          Gross             Gross
                                      Amortized        Unrealized        Unrealized           Market
                                        Cost              Gains            Losses             Value
                                   ======================================================================
<S>                                <C>               <C>               <C>              <C>
U.S. Government agencies           $     1,002,261   $        38,364  $          ----   $       1,040,625
Obligations of states and
  political subdivisions                 4,692,960            97,268          (10,295)          4,779,933
                                   ----------------------------------------------------------------------
                                   $     5,695,221   $       135,632  $       (10,295)  $       5,820,558
                                   ======================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                               December 31, 1995
                                   ======================================================================
                                                          Gross             Gross
                                      Amortized        Unrealized        Unrealized           Market
                                        Cost              Gains            Losses             Value
                                   ======================================================================
<S>                                <C>                <C>                <C>              <C>
U.S. Government agencies           $     1,003,210   $        61,790    $         ----    $     1,065,000
Obligations of states and
political subdivisions                   4,859,314           177,768            (6,387)         5,030,695
                                   ----------------------------------------------------------------------
                                   $     5,862,524   $       239,558    $       (6,387)   $     6,095,695
                                   ======================================================================
</TABLE>


    Securities held to maturity with amortized costs of $1,165,678 at June 30,
    1996 and $2,355,126 at December 31, 1995 were pledged to secure public and
    trust-fund deposits and for other purposes required or permitted by law.

5.  Loans

    Major classifications of loans as of June 30, 1996 and December 31, 1995
    are as follows:

<TABLE>
<CAPTION>
                                    June 30,          December 31,
                                      1996                1995
                               =======================================
<S>                            <C>                  <C>
Commercial and industrial      $       28,465,740   $       28,481,910
Energy                                  1,773,164            1,691,571
Installment                            40,288,418           36,670,868
Real estate construction                2,345,159            1,172,986
Real estate mortgage                   36,075,406           37,835,935
Agricultural                            4,563,910            3,102,465
Other                                      61,579               22,461
                               ---------------------------------------
                                      113,573,376          108,978,196
Unearned discount                      (4,607,388)          (4,444,346)
                               ---------------------------------------
                                      108,965,988          104,533,850
Allowance for loan losses              (2,334,942)          (2,542,513)
                               ---------------------------------------
                               $      106,631,046   $      101,991,337
                               =======================================
</TABLE>


                                       10
<PAGE>   11
6.  Allowance for Loan Losses

    Transactions in the allowance for loan losses for the six months ending
    June 30, 1996, and for the year ended December 31, 1995 are summarized as
    follows:

<TABLE>
<CAPTION>
                                                    June 30,           December 31,
                                                      1996                 1995
                                              =========================================
<S>                                           <C>                   <C> 
Balance at beginning of period                $          2,542,513  $         1,990,638
Loans charged-off                                         (557,585)            (475,134)
Recoveries on loans                                        350,014            1,369,464
                                              -----------------------------------------
Net loans recovered (charged-off)                         (207,571)             894,330
Provisions charged to operating expenses                      ----             (600,000)
Allowance acquired in purchase transaction                    ----              257,545
                                              -----------------------------------------
Balance at end of period                      $          2,334,942  $         2,542,513
                                              =========================================
</TABLE>

7.  Certificates of Deposit

    Included in certificates of deposits are certificates of deposits in
    denominations of $100,000 or more aggregating $14,848,238 and $15,156,682
    at June 30, 1996 and December 31, 1995, respectively. Interest expense on
    certificates of deposits in denominations of $100,000 or more amounted to
    $401,434 and $261,338 for the six months ended June 30, 1996 and June 30,
    1995, respectively.

8.  Nonqualified Stock Option Plan

    On October 20, 1993, the Board of Directors authorized 160,000 shares of
    Company common stock for issuance under a nonqualified stock option plan
    for directors and key officers who the Board of Directors believe have a
    significant impact on the profitability of the Company. The options were
    granted in 1993 at an option price of $5 per common share, the estimated
    market value per common share on the date of the grant.  On May 14, 1996,
    options for 200 shares of the Company's common stock were exercised.  At
    June 30, 1996, those shares had not been issued pending delivery of
    required payment of taxes and certain documents required by the Company.
    At June 30, 1996, options for 159,800 shares were outstanding, all of which
    are exercisable through that date. Expiration dates are ten (10) years from
    the date of the grant.





                                       11
<PAGE>   12
                                    Item 2.

                CORPUS CHRISTI BANCSHARES, INC. AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The following discussion highlights the major changes affecting the operations
and condition of the Company for the quarter and six months ended June 30,
1996 as compared to the same periods of 1995.

Overall Performance:

The Company had second quarter 1996 net income of $546,756, or $.32 net income
per share, up $101,493, compared to $445,263, or $.26 net income per share for
the same quarter of 1995.

The Company's net income for the six months ended June 30, 1996 was $1,209,877,
or $.71 net income per share, up $344,510, compared to $865,367, or $.51 net
income per share, for the same period of 1995. The increase in net income for
the six months period ended June 30,1996 compared to the same period of 1995 is
attributable in large part to the increase in net interest income totaling
$934,810 and to an increase in noninterest income totaling $169,534.

Provision for Loan Losses

The Company had no provisions for loan losses during the second quarter of 1996
nor the six months ended June 30, 1996.  This compares to "negative" provisions
made by the Company during the second quarter of 1995 and the six months ended
June 30, 1995 of $200,000 and $400,000, respectively. The "negative" provisions
made by the Company during 1995 were the result of increased recoveries on
prior loans charged-off. The Company had net charge-offs totaling $207,571 for
the six months ended June 30, 1996 compared to net recoveries totaling $362,799
for the same period in 1995.

The allowance for loan losses is established through charges to operations in
the form of provisions for loan losses.  Loan losses (or recoveries) are
charged (or credited) directly to the allowance for loan losses. The provision
for loan losses is determined by management, based upon considerations of
several factors including: (1) a continuing review by management of the
portfolio with particular emphasis on problem loans; (2) regular examination of
the loan portfolio; (3) loss experience on various types of loans in relation
to outstanding loans; and (4) an ongoing assessment of current and anticipated
economic conditions in the market place served by the subsidiary bank.

The Company's Credit Review Committee ("CRC"), independent consultants, and
Federal and State regulators, conduct periodic examinations of the Company's
subsidiary bank to make evaluations of the subsidiary bank's loan portfolio. In
addition, appropriate regulatory authorities and independent consultants make
evaluations of the effectiveness of the Company's loan review and
administrative functions and make periodic reports to the Company's Board of
Directors.

As the Company's CRC examines the loan portfolio, loans are assigned a risk
grading which is used to determine the reserve requirements for each loan. In
addition to these specific allocations of reserves, an appropriate amount is
set aside to recognize the likelihood that there are unidentified additional
risks in the portfolio.

While there is no precise method of predicting loan losses, it is the judgment
of the Company's management that the allowance for loan losses at June 30,
1996, was adequate to absorb possible losses from the loans in the portfolio at
that date.





                                       12
<PAGE>   13
Nonperforming assets and past-due accounts were as follows:

<TABLE>
<CAPTION>
                                                   June 30,                 December 31,
                                                     1996                       1995
                                           ===================================================
<S>                                        <C>                       <C>
Nonperforming assets:
   Nonaccrual loans                        $              1,530,725  $               1,185,565
   Other real estate                                        345,567                    529,560
                                           ---------------------------------------------------
                                           $              1,876,292  $               1,715,125
                                           ===================================================
Accruing loans past due 90 days or more    $                280,920  $                 134,350
                                           ===================================================
</TABLE>

Generally, the accrual of income is discontinued when the full collection of
principal and interest is in doubt, or when the payment of principal or
interest has become contractually 90 days past due unless the obligation is
well secured and in the process of collection. Loans are not restored to full
earnings status until the borrower's ability to make payments of principal and
interest at original or prevailing market terms has been demonstrated through
substantial performance on the loan over an extended period of time. At June
30, 1996, nonaccrual loans totaled $1,530,725 compared to $1,185,565 and
$101,819 at December 31, 1995 and June 30, 1995, respectively. Further
information regarding the balance of nonaccrual loans at June 30, 1996, and
related interest payment information, is as follows:

<TABLE>
<CAPTION>
                                                       Book                    Contractual
                                                     Balance                     Balance
                                            =====================================================
<S>                                         <C>                         <C>
Nonaccrual loans at December 31, 1995       $               1,185,565   $               1,289,548
   Additions                                                  506,619                     507,906
   Reductions-principal payments                              (71,775)                    (72,426)
   Reductions-interest payments                               (42,713)                       ----
   Charge-offs                                                (46,971)                    (47,490)
   Transferred to other real estate                              ----                        ----
                                            -----------------------------------------------------
Nonaccrual loans at June 30, 1996           $               1,530,725   $               1,677,538
                                            =====================================================
</TABLE>



The Company considers a nonaccrual loan to have substantial performance if
eighty percent (80%) of principal payment and interest is collected.


<TABLE>
<CAPTION>
                                                                                   Cash interest payments in 1996
                                                                                             applied as:
                                    Book Balance       Contractual       ----------------------------------------------------
                                         at             Balance at                           Recoveries of
                                      June 30,           June 30,           Interest         Prior Partial     Reduction of
                                        1996               1996              Income           Charge-offs      Principal
                                      =======================================================================================
<S>                                   <C>               <C>               <C>                <C>                <C>      
Contractually past due with:
  substantial performance             $     50,852     $       87,288     $          ----    $         ----    $        5,055
  limited performance                       43,417             43,417                ----              ----              ----
  no performance                              ----               ----                ----              ----              ----

Contractually current, however:
  payment in full of principal
    or interest in doubt                 1,436,456          1,546,833                ----              ----            37,658
                                      ---------------------------------------------------------------------------------------
                                      $  1,530,725     $    1,677,538     $          ----    $         ----    $       42,713
                                      =======================================================================================
</TABLE>





                                       13
<PAGE>   14
   
Total nonperforming assets increased to $1,876,292 at June 30, 1996, up
$161,167, compared to $1,715,125 at December 31, 1995. Nonperforming assets at
June 30, 1995 totaled $730,930.
    

The recorded investments in loans for which an impairment has been recognized
and the related allowance for loan losses at June 30, 1996 were $2,048,559 and
$520,628, respectively. The average recorded investment in impaired loans
during the six months ended June 30, 1996 was $2,126,005. Interest recognized
on impaired loans during the six months ended June 30, 1996 was $40,291.

As part of the CRC process, loans are graded according to risk. Loans having a
greater degree of risk, but not necessarily a greater potential for loss, are
placed on a watchlist. Such loans are performing and are either considered to
be collateralized or higher reserves are allocated for unsecured exposures. The
total amount of such loans at June 30, 1996 and December 31, 1995 not
classified as nonaccrual, restructured, or past due 90 days and still accruing
in the above table totaled $3,817,342 and $3,062,924, respectively. Such loans
totaled $4,221,688 at June 30, 1995.

In addition, a substantial amount of the Company's nonperforming assets are
attributable to other real estate located in the Corpus Christi, Texas area.
Other real estate at June 30, 1996 was $345,567, down $183,993, compared to
$529,560 at December 31, 1995. Other real estate totaled $629,111 at June 30,
1995. Other real estate has been adjusted to estimated fair value less
estimated selling costs, if lower than cost, and includes some income producing
property.

With respect to other real estate, management of the Company believes it has
made appropriate valuations, using independent appraisers, of these properties
based on strict appraisal guidelines. The carrying value of other real estate
is reviewed at least annually and the valuation allowance is revised through
subsequent valuation provisions charged to other operating expenses. During the
second quarter ended June 30, 1996, the Company made valuation provisions for
other real estate totaling $5,000 compared to $30,000 for the same quarter of
1995. For the six months ended June 30, 1996, the Company made valuation
provisions for other real estate totaling $20,000 compared to $60,000 for the
same period of 1995. In the opinion of management, this appraisal process
results in values which represent current market conditions at June 30, 1996
and 1995.

Net Interest Income

Net interest income (the difference between interest income and interest
expense) for the quarter ended June 30, 1996 was $2,240,005, up $384,427,
compared to $1,855,578 for the same quarter of 1995. Net interest income for
the six months ended June 30, 1996 was $4,606,701, up $934,810, compared to
$3,671,891 for the same period of 1995. The increase for the second quarter and
the six months ended June 30, 1996 was largely attributable to the increase in
the volume of earning assets as a result of the acquisition of The First
National Bank of Taft, Texas ("Taft Acquisition") on October 31, 1995.

Earning assets at June 30, 1996 were $186.5 million, up $30.0 million, compared
to $156.5 million at June 30, 1995. The yield on earning assets at June 30,
1996 was 7.5% compared to 8.1% for the same period last year. Interest-bearing
liabilities at June 30, 1996 were $139.1 million, up $23.0 million, compared to
$116.1 million at June 30, 1995. The yields on interest-bearing liabilities was
3.9% at June 30, 1996 compared to 4.2% at June 30, 1995. Net interest income as
a percentage of average earning assets ("net interest margin") was 4.6% at June
30, 1996 compared to 5.0% at June 30, 1995. The net interest margin averaged
4.7% in 1995.

Noninterest Income

Noninterest income for the six months ended June 30, 1996 was 1,661,134, up
$169,534, compared to $1,491,600 for the same period of 1995. Trust fees for
the six months ended June 30, 1996 were $565,078, down $40,046,





                                       14
<PAGE>   15
compared to $605,124 for the same period in 1995. The decrease was largely
attributable to non-recurring estate and stock transfer fees collected during
1995 totaling approximately $50,000. Service charges on deposit accounts were
$556,466 for the six months ended June 30, 1996, up $58,606, compared to
$497,860 for the same period in 1995. The increase was largely attributable to
an increase in nonsufficient fund charges totaling $40,442. Credit card fees
were $83,072 for the six months ended June 30, 1996, down $4,115 compared to
$87,187 for the same period last year. Brokerage fees were $181,048 for the six
months ended June 30, 1996, up $65,764, compared to $115,284 for the same
period in 1995.  Other income totaled $275,470 for the six months ended June
30, 1996, up $89,325, compared to $186,145 for the same period in 1995. The
increase in other income for the first six months of 1996 was largely
attributable to increases in automated teller machine interchange fees totaling
$79,856. The increase in automated teller machine interchange fees was due in
part to the addition of two automated teller machines in 1995 acquired in the
Taft Acquisition.

Noninterest income for the second quarter ended June 30, 1996 was $842,773, up
$77,944, compared to $764,829 for the same quarter of 1995.

The following table details the changes in noninterest income for the six
months ended June 30, 1996 as compared with the same period of 1995.

<TABLE>
<CAPTION>
                                                                                                       Change for the
                                                                                                      Six Months Ended
                                                        June 30,             June 30,                   June 30, 1996
                                                          1996                 1995               Amount         Percentage
                                                   =========================================================================
<S>                                                <C>                  <C>                  <C>                 <C>
Trust department income                            $        565,078    $        605,124     $      (40,046)          (6.6)%
Service charges                                             556,466             497,860             58,606            11.8%
Credit card fees                                             83,072              87,187             (4,115)          (4.7)%
Brokerage fees                                              181,048             115,284             65,764            57.0%
Other income                                                275,470             186,145             89,325            48.0%
                                                   -------------------------------------------------------------------------
     Total noninterest income                      $      1,661,134    $      1,491,600     $      169,534            11.4%
                                                   =========================================================================
</TABLE>


Noninterest expenses

The Company's noninterest expenses were $4,427,900 for the six months ended
June 30, 1996, up $184,452, compared to $4,243,448 for the same period of 1995.
Salaries and employee benefits for the six months ended June 30, 1996 were
$2,159,693, up $185,231, compared to $1,974,462 for the same period of 1995.
The increase in salaries and employee benefits was primarily attributable to
salaries and benefits related to the Taft Acquisition totaling $113,425,
increases in medical insurance totaling $29,988, and a 3% merit increase during
1995. Full time equivalent employees at June 30, 1996 were 138 compared to 130
employees at June 30, 1995. Net occupancy expenses were $527,741 for the six
months ended June 30, 1996, up $45,980, compared to $481,761 for the same
period in 1995. Furniture and equipment cost totaled $374,548 for the six
months ended June 30, 1996, up $24,648, compared to $349,900 for the same
period in 1995.  The increase in net occupancy expenses and furniture and
equipment cost for the six months ended June 30,1996 compared to the same
period of 1995 was largely attributable to depreciation expenses related to
assets acquired in the Taft Acquisition totaling $52,860 and $26,032,
respectively. Amortization of intangible assets related to the Taft Acquisition
totaled $60,605 during the six months ended June 30, 1996. Net cost to operate
other real estate was $38,775 for the six months ended June 30, 1996, down
$13,417, compared to $52,192 for the same period of 1995. The decrease in net
cost to operate other real estate was primarily attributable to a decrease in
valuation provisions on other real estate in 1996 totaling $40,000. Legal and
professional fees were $411,701 for the six months ended June 30, 1996, up
$81,478, compared to $330,223 for the same period in 1995. The increase was
largely attributable to an increase in legal fees totaling $74,905 in 1996.
Insurance expenses for the six months ended June 30, 1996 were $41,306, down
$156,550, compared to $197,856 for the same period in 1995.  The decrease in
insurance expenses was the result of lower





                                       15
<PAGE>   16
Federal Deposit Insurance Corporation (FDIC) insurance assessment fees totaling
approximately $165,527. Advertising expenses totaled $35,216 at June 30, 1996,
down $48,782, compared to $83,998 for the same period in 1995. Other operating
expenses totaled $778,315 for the six months ended June 30, 1996, up $5,259,
compared to $773,056 for the same period in 1995.

Noninterest expenses for the second quarter ended June 30, 1996 were
$2,296,397, up $154,476, compared to $2,141,921 for the same period in 1995.

The following table details the changes in noninterest expenses for the six
months ended June 30,1996 as compared to the same period of 1995.


<TABLE>
<CAPTION>
                                                          Percent of                      Percent of          Change for the  
                                                         Net Interest                    Net Interest        Six Months Ended 
                                                              and                            and              June 30, 1996   
                                             June 30,     Noninterest       June 30,     Noninterest   ----------------------------
                                               1996         Income            1995         Income          Amount       Percentage
                                       ============================================================================================
<S>                                    <C>                  <C>         <C>                   <C>      <C>                <C>
Salaries and employee benefits         $     2,159,693      34.5%       $    1,974,462        38.2%    $     185,231         9.4%
Net occupancy expenses                         527,741       8.4%              481,761         9.3%           45,980         9.6%
Furniture and equipment expenses               374,548       6.0%              349,900         6.8%           24,648         7.0%
Amortization of intangible assets               60,605       1.0%                  --           --            60,605       100.0%
Net cost to operate other real                                                                                            
   estate                                       38,775        .6%               52,192         1.0%          (13,417)     (25.7)%
Legal and professional fees                    411,701       6.6%              330,223         6.4%           81,478        24.7%
Insurance expenses                              41,306        .7%              197,856         3.8%         (156,550)     (79.1)%
Advertising expenses                            35,216        .5%               83,998         1.6%          (48,782)     (58.1)%
Other operating expenses                       778,315      12.4%              773,056        15.0%            5,259         1.0%
                                       -------------------------------------------------------------------------------------------
    Total noninterest expenses         $     4,427,900      70.7%       $    4,243,448        82.1%    $     184,452         4.3%
                                       ============================================================================================
</TABLE>


Liquidity

Generally, the Company's largest source of funds is provided through deposits.
Total deposits at June 30, 1996 were $179.7 million, down $21.2 million,
compared to $200.9 million at December 31, 1995. The decline in deposits during
the six months ended June 30, 1996 is in part reflective of seasonal trends
experienced during the prior five years and to a decline in deposits at the
Taft branch of $9.8 million since year-end 1995. Total deposits at June 30,
1995 were $158.3 million. In addition, at June 30, 1996 and at December 31,
1995, the Company had approximately $100.0 thousand and $6.0 million,
respectively, in federal funds sold that could be readily converted to cash.
Another source of liquidity, if the need arises, could come from the
liquidation of securities available for sale totaling $73.3 million at June 30,
1996.

Funds are also generated through loan payoffs and maturities of investment
securities. Currently, management believes that it has an adequate level of
liquidity to meet its financial obligations that will arise during the normal
course of business in the coming year.

One principal ratio measurement used by regulatory authorities to measure
liquidity is the ratio of net loans to total deposits. At June 30, 1996, the
Company's ratio of net loans to total deposits was 59.4%, compared to 50.8% at
December 31, 1995. The Company's ratio of net loans to total deposits at June
30, 1995 was 62.3%. At June 30, 1996, the Company's net loans to total deposits
ratio of 59.4% compared favorably to peer banking institutions in Texas with
similar asset sizes which had net loans to total deposit ratios with a low of
41%, median of 52% and a high of 65% at December 31, 1995. The Company's
long-term planning targets a loan to deposit ratio of 65% to 70%.





                                       16
<PAGE>   17
Capital Resources

The Company and the Bank are required by federal regulations to meet certain
minimum regulatory capital guidelines utilizing a risk-based capital framework
that became effective on December 31, 1992. The Company and the Bank must have
a minimum ratio of Tier 1 capital to total risk-adjusted assets of not less
than 4%, a ratio of combined Tier 1 and Tier 2 capital to total risk-adjusted
assets of not less than 8% and a leverage ratio of not less than 4%. For the
purposes of these ratios, shareholders' equity does not include unrealized
gains or losses on securities available for sale or intangible assets in
accordance with regulatory guidelines. At June 30, 1996, the Company and the
Bank each had a Tier 1 capital ratio of 12.5%, combined Tier 1 and Tier 2
capital ratio of 13.9% and leverage ratio of 7.4%. At December 31, 1995, the
Company and the Bank each had a Tier 1 capital ratio of 12.0%, combined Tier 1
and Tier 2 capital ratio of 13.3% and leverage ratio of 6.4%.

The Company's equity to assets ratio is one indicator that management uses to
monitor capital adequacy. At June 30, 1996, the Company's equity to assets
ratio was 7.4% compared to 6.4% at December 31, 1995. The Company's equity to
asset ratio at June 30, 1995 was 8.6%. The decrease in the Company's equity to
assets ratio of 7.4% at June 30, 1996 compared to 8.6% at June 30, 1995 was a
direct result of the Taft Acquisition.

At June 30, 1996, the Company's subsidiary bank had an equity ratio of 7.4%,
which exceeds the minimum requirement guideline of 6.0% by the Texas Department
of Banking.





                                       17
<PAGE>   18
                                    PART II
                               OTHER INFORMATION
          Item 4. Submission of Matters to a Vote of Security Holders.

(a) The 1996 Annual Meeting of the Shareholders of Corpus Christi Bancshares,
    Inc. was held on May 29, 1996 at 3:00 P.M. (Central Daylight Savings Time)
    at Citizens State Bank of Corpus Christi, 2402 Leopard Street, Corpus
    Christi, Texas.

(b) Class B Directors elected at the 1996 Annual Meeting of Shareholders:

                 Marvin L. Berry
                 Joe R. DeLeon, Jr.
                 Stephen R. Karp
                 Roscoe M. Smith

    Class A Directors whose terms continue after the 1996 Annual Meeting of
    Shareholders:

                 John C. Brooke
                 Roy M. Grassedonio
                 Jack Powers
                 John T. Wright, III

    Class C Directors whose terms continue after the 1996 Annual Meeting of
    Shareholders:

                 J.B. Clark
                 R. Jay Phillips
                 L.L. Woodman, Jr.
                 John T. Wright, Jr.

(c) A brief description of matters voted upon at the Annual Meeting including
    the number of votes cast for, against or abstained from voting are as 
    follows:

Election of Directors

<TABLE>
<S>                       <C>   <C>                <C>        <C>
Marvin L. Berry           For:  1,128,730          Withheld:  148,596
Joe R. DeLeon, Jr.        For:  1,128,730          Withheld:  148,596
Stephen R. Karp           For:  1,128,730          Withheld:  148,596
Roscoe M. Smith           For:  1,128,730          Withheld:  148,596
</TABLE>

To ratify the selection of KPMG Peat Marwick LLP as the independent auditors 
of the Company for the current fiscal year.

<TABLE>
<S>                             <C>                             <C>
For:  1,270,340                 Against:   1,200                Abstained:   5,786
</TABLE>


(d) Not applicable.





                                       18
<PAGE>   19
Item 6. Exhibits and reports on Form-8-K.

            (a)  Exhibits: See Index to Exhibits, Page 22.

            (b)  The Company was not required to file any report on Form 8-K
                 during the six-month period ending June 30, 1996.





                                       19
<PAGE>   20
                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                 CORPUS CHRISTI BANCSHARES, INC.
                                 -------------------------------
                                            REGISTRANT
                                 
                                 
   
                                 
Date: December 19, 1996             /s/ John T. Wright, III
                                    -----------------------------------------
                                    John T. Wright, III
                                    Chairman of the Board
    
                                 


                                       20
<PAGE>   21
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                              ___________________



                                    EXHIBITS

                                       TO

                                  FORM 10-QSB

              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934


                              ___________________


                      For the Quarter Ended June 30, 1996
                         Commission File Number 0-13668


                              ___________________


                        CORPUS CHRISTI BANCSHARES, INC.





                                       21
<PAGE>   22
                        CORPUS CHRISTI BANCSHARES, INC.
                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
                                                                        Sequentially
                                                                          Numbered
                                                                           Pages
                                                                        ------------
<S>          <C>                                                        <C>
27           Financial Data Schedule                                     ----
</TABLE>





                                       22