|(X)  | Quarterly Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 
|---- | -----------------------------------------------------------------------------------------
|     | For the quarterly period ended March 31, 2002                                            
|(  ) | Transition Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
|     | For the transition period from _______________ to ___________________                    

---

---

---

---

---

| | Class        | Shares Outstandingas of April 30, 2002
| | ------------ | --------------------------------------
| | Common Stock | 471,411                               

---

|**PART I - FINANCIAL INFORMATION**
|----------------------------------
|                                  
|**ITEM 1 - FINANCIAL STATEMENTS** 
|                                  
|                                  
|                                  
|                                  
|                                  
|                                  
|                                  
|                                  
|                                  
|**ITEM 2 -**                      
|                                  
|**PART II - OTHER INFORMATION**   
|                                  
|Other Information                 
|                                  
|Signatures                        

---

---

|                                                                                                                                                         | March   | September
|-------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | ---------
|                                                                                                                                                         | 2002    | 2001     
|**ASSETS**                                                                                                                                               |         |          
|Cash and due from banks                                                                                                                                  | $2,914  | $3,017   
|Interest-bearing deposits in other financial institutions                                                                                                | 11,185  | 1,102    
|Total cash and cash equivalents                                                                                                                          | 14,099  | 4,119    
|                                                                                                                                                         |         |          
|Securities available-for-sale                                                                                                                            | 3,504   | 9,536    
|Securities held-to-maturity, at cost (fair value: Mar -$353  September - $415)                                                                           | 387     | 421      
|Loans held for sale                                                                                                                                      | 2,355   | 2,355    
|Loans receivable, (net of allowance for loan losses:
Mar - $382; September - $417)                                                                       | 57,605  | 61,857   
|Federal Home Loan Bank stock                                                                                                                             | 465     | 458      
|Servicing rights                                                                                                                                         | 67      | 110      
|Real estate owned (net of allowance for losses:
  Mar. - $0; September. - $15)                                                                           | 430     | 677      
|Repossessed assets and insurance claims (net of allowance
  for losses:  Mar. - $7; September. - $100)                                                   | 333     | 1,023    
|Premises and equipment                                                                                                                                   | 1,895   | 2,004    
|Accrued interest receivable                                                                                                                              | 463     | 544      
|Other assets                                                                                                                                             | 497     | 467      
|                                                                                                                                                         | 82,100  | $83,571  
|                                                                                                                                                        
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                    
|Liabilities                                                                                                                                             
|Deposits                                                                                                                                                 | $75,629 | $76,182  
|Advance payments by borrowers for insurance and taxes                                                                                                    | 250     | 709      
|Debentures                                                                                                                                               | 3,629   | 3,629    
|Accrued supplemental retirement plan benefits                                                                                                            | 532     | 542      
|Accrued interest payable and other liabilities                                                                                                           | 660     | 782      
|                                                                                                                                                         | 80,700  | 81,844   
|                                                                                                                                                        
|Minority interest                                                                                                                                        | 873     | 873      
|                                                                                                                                                        
|Stockholders' equity                                                                                                                                    
|Common stock - par value $.01 per share; authorized  
1,500,000 shares, issued and outstanding 471,411 shares at  
March 31, 2002 and September 30, 2001 | 5       | 5        
|Additional paid-in capital                                                                                                                               | 2,117   | 2,117    
|Retained deficit                                                                                                                                         | (1,605) | (1,278)  
|Accumulated other comprehensive income                                                                                                                   | 10      | 10       
|                                                                                                                                                         | 527     | 854      
|                                                                                                                                                         | $82,100 | $83,571  

See accompanying notes to unaudited consolidated financial statements

---

THE BRYAN-COLLEGE STATION FINANCIAL HOLDING COMPANY
BRYAN/COLLEGE STATION, TEXAS
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months and six months ended March 31, 2002 and 2001
(Unaudited)
In thousands, except per share data

---

|                                                                          | Six Months EndedMarch 31                            | Three Months EndedMarch 31             
|------------------------------------------------------------------------- | --------------------------------------------------- | ---------------------------------------
|                                                                          | 2002                                                | 2001                                   
|Interest income                                                          
|                                                                          | Loans                                               | $2,856                                 
|                                                                          | Mortgage-backed securities                          | 40                                     
|                                                                          | Other                                               | 214                                    
|                                                                          |                                                     | Total interest income                  
|                                                                         
|Interest expense                                                         
|                                                                          | Deposits                                            | 1,341                                  
|                                                                          | Other borrowings                                    | 211                                    
|                                                                          |                                                     | Total interest expense                 
|                                                                         
|                                                                         
|**Net  interest  income**                                                 | 1,558                                               | 1,833                                  
|                                                                         
|Provision for loan losses                                                 | 125                                                 | 237                                    
|                                                                         
|                                                                         
|**Net interest income after provision for loan
losses**                   | 1,433                                               | 1,596                                  
|                                                                         
|Noninterest income                                                       
|                                                                          | Service charges                                     | 397                                    
|                                                                          | Gain on sale of loans and mortgage servicing
rights | 32                                     
|                                                                          | Servicing fee income net of amortization            | 8                                      
|                                                                          | Other                                               | 2                                      
|                                                                          | Total noninterest income                            | 439                                    
|                                                                         
|Noninterest expense                                                      
|                                                                         
|                                                                          | Compensation and benefits                           | 867                                    
|                                                                          | Occupancy and equipment expense                     | 246                                    
|                                                                          | Federal insurance premiums                          | 44                                     
|                                                                          | Net (gain) loss on real estate owned,              
|                                                                          |                                                     | Repossessed assets and insurance claims
|                                                                          |                                                     | Including provision                    
|                                                                          | Professional fees                                   | 212                                    
|                                                                          | Data processing                                     | 143                                    
|                                                                          | Office supplies                                     | 41                                     
|                                                                          | Telephone                                           | 40                                     
|                                                                          | Postage                                             | 58                                     
|                                                                          | Other                                               | 335                                    
|                                                                          |                                                     | Total noninterest expense              
|                                                                         
|                                                                         
|Loss before income taxes                                                  | (327)                                               | (457)                                  
|                                                                         
|Income tax benefit                                                        | -                                                   | (140)                                  
|                                                                         
|**Net Loss**                                                              | $(327)                                              | $(317)                                 
|                                                                         
|Comprehensive loss                                                        | $(327)                                              | $(317)                                 
|                                                                          |                                                     |                                        
|******************************Loss per common share, basic and diluted:**
|                                                                          |                                                     | Loss per common share                  
|                                                                         

See accompanying notes to unaudited consolidated financial statements

---

THE BRYAN-COLLEGE STATION FINANCIAL HOLDING COMPANY
BRYAN/COLLEGE STATION, TEXAS
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended March 31, 2002 and 2001
(Unaudited)
In thousands

---

|                                                                               | Six Months Ended
March 31,
|------------------------------------------------------------------------------ | --------------------------
|                                                                               | 2002                      
|**Cash flows from operating activities**                                      
|Net loss                                                                       | $(327)                    
|Adjustments to reconcile net loss to net cash from
operating activities        |                           
|Depreciation                                                                   | 117                       
|Net change in loans held for sale                                              | -                         
|Net change in servicing rights                                                 | 43                        
|Net (gains) losses on sales of 
  Mortgage loans and mortgage servicing rights | (32)                      
|Real estate owned, repossessed assets and
  insurance claims                   | 27                        
|Provision for loan losses                                                      | 125                       
|Federal Home Loan Bank stock dividend                                          | (7)                       
|Change in                                                                      |                           
|Repossessed assets                                                             | 741                       
|Accrued interest receivable                                                    | 81                        
|Other assets                                                                   | (30)                      
|Accrued supplemental retirement plan, interest
payable                         |                           
|and other liabilities                                                          | (130)                     
|Net cash from operating activities                                             | 608                       
|                                                                              
|**Cash flows from investing activities**                                      
|Net change in loans receivable                                                 | 4,012                     
|Investment in mortgage-backed and other
securities                             | (132)                     
|Proceeds from sales of securities available for sale                           | 6,000                     
|Principal payments on mortgage-backed securities                               | 198                       
|Investment in office properties and equipment, net                             | (8)                       
|Proceeds from sale of foreclosed real estate                                   | 346                       
|Capital expenditures on foreclosed real estate                                 | (32)                      
|Net cash from investing activities                                             | 10,384                    
|                                                                              
|**Cash flows from financing activities**                                      
|Net increase (decrease) in deposits                                            | (553)                     
|Net decrease in advance payments by                                            |                           
|borrowers for insurance and taxes                                              | (459)                     
|Net change in Federal Home Loan Bank advances                                  | -                         
|Net cash from financing activities                                             | (1,012)                   
|                                                                              
|Change in cash and cash equivalents                                            | 9,980                     
|                                                                              
|Cash and cash equivalents at beginning of period                               | 4,119                     
|                                                                              
|**Cash and cash equivalents at end of period**                                 | $14,099                   
|                                                                              

See accompanying notes to unaudited consolidated financial statements

---

**NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

The accompanying unaudited consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America for
interim financial information and with the instructions to Form 10-QSB.  Accordingly, they do
not include all the information and footnotes required for complete financial statements.

In the opinion of management, the unaudited consolidated financial statements contain all
adjustments (consisting only of normal recurring adjustments) necessary to present fairly the
financial condition of The Bryan-College Station Financial Holding Company (the "Company")
and its wholly-owned subsidiary, First Federal Savings Bank, Bryan-College Station, Texas
("First Federal" or the "Bank") as of March 31, 2002 and September 30, 2001, and the results of
its operations for the three-month and six-month periods ended March 31, 2002 and 2001.  The
annualized results of operations for the three and six months ended March 31, 2002, are not
necessarily indicative of the results expected for the full year ending September 30, 2002.

**NOTE 2 - ALLOWANCE FOR LOAN LOSSES**

The summary of changes in the allowance for loan losses is as follows:

|                                | Three Months Ended
March 31,
(In thousands) | Six Months Ended
March 31,
(In thousands)
|------------------------------- | ------------------------------------------- | -----------------------------------------
|                                | 2002                                        | 2001                                     
|                                |                                             |                                          
|Balance, beginning of period    | $ 417                                       | $ 332                                    
|Provision charged to operations | 35                                          | 126                                      
|Charge-offs                     | (105)                                       | (163)                                    
|Recoveries                      | 35                                          | 37                                       
|                                |                                             |                                          
|Balances, end of period         | $ 382                                       | $ 332                                    

The Company had a "Second Chance" auto loan program that originated loans to individuals with
less than prime credit.  This program was discontinued in the quarter ended June 30, 2000.
These loans are partially insured by credit-default insurance for losses due to charge-offs and
sales of repossessed assets.  Repossessed assets are carried at the lower of cost or fair value
adjusted for expected credit-default insurance proceeds and estimated costs of repairs.  The
activity in the reserve for repossessed assets was as follows:

|                  | Three Months Ended
March 31,
(In thousands) | Six Months Ended
March 31,(In thousands)
|----------------- | ------------------------------------------- | ----------------------------------------
|                  | 2002                                        | 2001                                    
|                  |                                             |                                         
|Beginning balance | $   64                                      | $  122                                  
|Provision         | 10                                          | 47                                      
|Charge-offs       | (67)                                        | -                                       
|                  |                                             |                                         
|Ending balance    | $    7                                      | $  169                                  

---

**NOTE 4 - CAPITAL REQUIREMENTS**

The Bank is subject to various regulatory capital requirements administered by the federal
banking agencies.  The Office of Thrift Supervision ("OTS") has applied various restrictions as
further explained under Item 2-Management's Discussion and Analysis of Financial Condition
and Results of Operation - Liquidity and Capital Resources.

At March 31, actual capital levels of the Bank and minimum required levels were:

|                                                 | Minimum Required | Minimum Required 
|------------------------------------------------ | ---------------- | -----------------
|                                                 | for Capital      | to Be Well       
|                                                 | Actual           | Adequacy Purposes
|                                                 | Amount           | Ratio            
|2002                                            
|Total capital (to risk-weighted assets)          | $5,232           | 9.84%            
|Tier 1 (core) capital (to risk-weighted
assets)  | 4,943            | 9.30             
|Tier 1 (core) capital (to adjusted total
assets) | 4,943            | 6.03             
|                                                
|2001                                            
|Total capital (to risk-weighted assets)          | $5,593           | 9.37%            
|Tier 1 (core) capital (to risk-weighted
assets)  | 5,259            | 8.81             
|Tier 1 (core) capital (to adjusted total
assets) | 5,259            | 6.26             

**NOTE 5 - LOSS PER COMMON SHARE**

A reconciliation of the numerator and denominator of the loss per common share computation for
the three and six month periods ended March 31, 2002 and 2001 is presented below.

|                                    | Three Months EndedMarch 31, | Six Months Ended
March 31,
|----------------------------------- | --------------------------- | --------------------------
|                                    | 2002                        | 2001                      
|                                    | (Dollars in thousands)      | (Dollars in thousands)    
|**EPS Computation**
Net (loss)      | $     (147)                 | $     (277)               
|Weighted average shares outstanding | 471,411                     | 471,411                   
|Loss per common share               | $       (.31)               | $       (.59)             

The effect of stock options were not included in the computation of diluted loss per common
share because to do so would be anti-dilutive.

**NOTE 6 - SUPERVISORY AGREEMENT, MERGER AND DIVIDEND PAYMENT
RESTRICTIONS**

In September of 2000, the Board of Directors received a Supervisory Agreement ("Agreement")
from the OTS.  The Agreement requires the Bank to (1) take all necessary and appropriate
actions to comply with various OTS regulations; (2) make provisions, within 30 days prior to the
termination of the interim president and chief executive officer's employment contract, to retain
or employ an OTS approved president and chief executive officer; (3) not make any severance
payments to its former president except after receipt of a written notice of non-objection from the
Regional Director of the OTS.  In addition, the Board of Directors shall establish a workable
committee structure that provides for all committees to meet on a regular basis; (4) develop a
one-year business plan, which will be monitored by the Board of

---

The OTS approved the various plans, policies, and procedures developed by the Bank except
that, although the Bank submitted the required strategic plan and earnings projections on a timely
basis, the Bank, due to the settlement of the supplemental employee retirement plan, did not
anticipate being able to achieve a well capitalized status by March 31, 2001.  As a part of the
original strategic plan, the Company developed various contingency plans in case earnings and
capital did not improve by March 31, 2001.  These contingency plans included the (1) sale of real
estate and/or the sale of Second Chance auto loans, which would result in an after-tax gains, (2)
capital raising initiatives, and (3) a strategic alliance.

On November 5, 2001, Texas United Bancshares, Inc. ("Texas United") and the Company
entered into a definitive agreement for Texas United to acquire the Company and merge the
respective banking operations.  The proposed transaction is subject to regulatory approval and the
approval of the Company's stockholders.  See Item - 5.

The accompanying consolidated financial statements have been prepared assuming the Company
will continue as a going concern, which contemplates the continuation of operations in the
ordinary course of business and does not reflect any adjustments that might result if the Company
is unable to operate as a going concern.  The Company is dependent on operating cash and
dividends from the Bank in order to pay interest on the debentures and operating expenses.
Failure to timely pay the interest on the debentures may result in a default under the indenture
governing the debentures, resulting in acceleration of the maturity of the principal balance and a
demand for payment from debenture holders that the Company could not currently meet.  The
Bank is required to apply to the OTS for approval to pay dividends to the Company.  As of
January 3, 2002, the Bank had received OTS approval to pay dividends of $487,000.
Management has projected that these dividends will allow the Company to make all of the
necessary interest payments and pay expected operating expenses for the year ending September
30, 2002.  However, there is no assurance that the OTS will approve future dividends.

**NOTE 7 - NEW ACCOUNTING PRONOUNCEMENTS**

In 2001, new accounting guidance was issued that requires the purchase method of accounting
for all business combinations initiated after June 30, 2001 and prohibits the use of the pooling-of-interests method of accounting after this time.  The new guidance revises the accounting for
goodwill and intangible assets.  Intangible assets with indefinite lives and goodwill will no longer
be amortized, but will periodically be reviewed for impairment and written down if impaired.
Additional disclosures about intangible assets and goodwill may be required.  Since the Company
does not have any intangibles for which the standard applies, the standard will not currently have
an impact on the financial statements.

**Item 2.  Management's Discussion and Analysis of Financial Condition and Results of
Operations**

The following discussion is intended to assist in understanding the financial condition and results
of operations of The Bryan-College Station Financial Holding Company.  The discussion includes
comments relating to the Company and its wholly owned subsidiary, First Federal Savings Bank,
Bryan, Texas since the Bank is wholly-owned by the Company and comprises a majority of the
assets and sources of income for the Company.

---

**Financial Condition**

The Company's total assets decreased by $1.5 million to $82.1 million at March 31, 2002 from $83.6
million at September 30, 2001.  Net loans receivable (excluding loans held for sale) decreased $4.3
million to $57.6 million at March 31, 2002, compared to $61.9 million at September 30, 2001.  This
decrease was due primarily to repayments of principal balances on loans originally issued under the
Bank's discontinued Second Chance Auto Loan Program.  During the six months ended March 31,
2002, the Company originated and purchased for portfolio and sale an aggregate of $19.3 million
as compared to the originations and purchases for portfolio and sale of an aggregate of $18.3 million
for the same period in the prior year.

Securities available-for-sale decreased by $6.0 million to $3.5 million at March 31, 2002 from
$9.5 million at September 30, 2001.  The decrease was primarily due to the sale of securities,
which were reinvested into higher yielding interest-bearing deposits in other financial
institutions, including a subsidiary of Texas United Bancshares, Inc. See Item 5.

Repossessed assets and insurance claims receivable decreased from $1.0 million at September
30, 2001 to $333,000 at March 31, 2002.  This decrease was due primarily to an increase in the
insurance claims received, related to our discontinued Second Chance Auto loan program.

Real estate owned decreased from $677,000 at September 30, 2001 to $430,000 at March
31, 2002 due to sales that resulted in a loss of $ 15,600.

Deposits decreased $533,000 to $75.6 million at March 31, 2002, compared to $76.2 million at
September 30, 2001.  Escrowed funds for property taxes related to real estate loans held by the
Bank decreased $459,000 to $250,000 at March 31, 2002 from $709,000 at September 30, 2001.

Stockholders' equity in the Company decreased $327,000 to $527,000 at March 31, 2002 from
$854,000 at September 30, 2001 due primarily to the net loss in the first six months of the fiscal
year

**Asset/Liability Management**

The Company's subsidiary, First Federal, like all financial institutions, is subject to interest rate
risk to the degree that its interest-bearing liabilities (deposits) mature or reprice more rapidly, or
on a different basis, than its interest-earning assets (loans), some of which may be longer term or
fixed interest rate.  As a continuing part of its financial strategy, First Federal continually
considers methods of managing any asset/liability mismatch, consistent with maintaining
acceptable levels of net interest income and interest rate risk.

In order to monitor and manage interest rate sensitivity and interest rate spread, First Federal
created an Asset/Liability Committee ("ALCO").  This committee is composed of senior
management, including the President and Chief Executive Officer and three outside Directors.
The responsibilities of the ALCO are to assess First Federal's asset/liability mix and recommend
strategies that will enhance income while managing First Federal's vulnerability to changes in
interest rates.

First Federal's asset/liability management strategy has two goals.  First, the Bank seeks to build
its net interest income and noninterest income, while adhering to its underwriting and lending
guidelines.  Second, First Federal seeks to effectively match the maturities of its interest-earning
assets with the maturities of its interest-bearing liabilities so as to reduce First Federal's overall
sensitivity to changes in interest rates.  There can be no assurance that this strategy will achieve
the desired results and will not result in substantial losses in the event of an increase in interest
rate risk.

---

As part of this strategy, management continues to emphasize growth in noninterest-bearing
deposits such as checking accounts or lower interest-bearing savings deposits by offering full
service retail banking to its targeted customer base.  In order to minimize the possible adverse
impact that a rise in interest rates may have on net interest income, First Federal has developed
several strategies to manage its interest rate risk.  Primarily, First Federal is currently selling all
newly originated one-to four-family residential mortgage loans that are saleable in the secondary
market. Most of these loans are long-term fixed-rate loans.  In addition, First Federal currently
offers adjustable rate loans and a diversified short-term consumer lending program, giving First
Federal an opportunity to reprice its loans on a more frequent basis.

*Net Portfolio Value*

Senior management and the Board of Directors review First Federal's exposure to interest rate risk
on a quarterly basis.  Interest rate risk is measured by computing estimated changes in net interest
income and the net portfolio value ("NPV") of cash flows from assets, liabilities and off-balance
sheet items within a range of assumed changes in market interest rates.  If estimated changes to NPV
and net interest income are not within the limits established by the Board, the Board may direct
management to adjust First Federal's asset and liability mix to bring interest rate risk within Board
approved limits.  The Board limits have been established with consideration of the dollar impact of
various rate changes and First Federal's capital position.

The balance sheet consists of investments in interest-earning assets, primarily loans, which are
primarily funded by interest-bearing liabilities, deposits and borrowings.  These financial
instruments have varying levels of sensitivity to changes in market interest rates, resulting in
market risk.  Other than loans that are originated and held for sale, all of our financial
instruments are for other than trading purposes.  First Federal is subject to interest rate risk to the
extent that its interest-bearing liabilities with short and intermediate-term maturities reprice more
rapidly, or on a different basis, than its interest-earning assets.  It has been, and continues to be,
an objective of First Federal's Board of Directors and management to manage interest rate risk.
First Federal's asset/liability policy, established by the Board of Directors, dictates acceptable
limits on the amount of change in NPV given certain changes in interest rates.

Presented below, as of December 31, 2001, the latest date for which information is available, is
an analysis of First Federal's interest rate risk as measured by changes in NPV for instantaneous
and sustained parallel shifts in the yield curve, in 100 basis point increments, up and down 300
basis points in accordance with OTS regulations.  OTS assumptions are used in calculating the
amounts in this table.

|Change in

Interest Rate(Basis Points) | EstimatedNPV                                  | At December 31, 2001                   | Acceptable LimitsEstablished byBoard of Directors
|-------------------------------------- | --------------------------------------------- | -------------------------------------- | -------------------------------------------------
|$ Change                               | % Change                                      | % Change                              
|(Dollars in Thousands)                 |                                               |                                        |                                                  
|+300
+200
+100
0
-100
-200
-300        | 7,671
8,330
8,809
9,102
9,325
n/m (1)
n/m (1) | -1,431
-772
-293
0
223
n/m (1)
n/m (1) | -16
-8
-3
0
+2
n/m (1)
n/m (1)                   

(1) Not meaningful because of the abnormally low prevailing interest rate environment.

---

Management reviews the OTS measurements on a quarterly basis.  In addition to monitoring
selected measures on NPV, management also monitors effects on net interest income resulting
from increases or decreases in rates.  This measure is used in conjunction with NPV measures to
identify excessive interest rate risk.  In the event of a 200 basis point increase in interest rates,
First Federal would experience a 8% decrease in the NPV. As illustrated in the table, NPV is
more sensitive to rising rates than declining rates.  This occurs principally because, as rates rise,
the market value of fixed-rate loans declines due to both the rate increase and slowing
prepayments. When rates decline, First Federal does not experience a significant rise in market
value for these loans because borrowers prepay at relatively high rates.

In evaluating First Federal's exposure to interest rate risk, certain shortcomings inherent in the
method of analysis presented in the foregoing tables must be considered.  For example, although
certain assets and liabilities may have similar maturities or periods to repricing, they may react in
different degrees to changes in market interest rates.  Also, the interest rates on certain types of
assets and liabilities may fluctuate in advance of changes in market interest rates, while interest
rates on other types may lag behind changes in market rates.  Further, in the event of a change in
interest rates, prepayment and early withdrawal levels would likely deviate significantly from
those assumed in calculating the table.  For example, projected passbook, money market and
checking account maturities may also materially change if interest rates change.  Finally, the
ability of many borrowers to service their debt may decrease in the event of an interest rate
increase.  First Federal considers all of these factors in monitoring its exposure to interest rate
risk.

**Non-Performing Assets and Loan Loss Provision**

The provision for loan losses is based on management's periodic review of the Company's loan
portfolio which considers, among other factors, actual loan loss experience, current economic
conditions, changes in composition and risks inherent in the loan portfolio, concentrations of
credit, internal loan reviews and specific borrower considerations such as the ability to repay the
loan and the estimated value of the underlying collateral.  Accordingly, the calculation of the
adequacy of the allowance for loan losses was not based directly on our level of non-performing
assets.  Although the Company maintains the allowance for loan losses at a level which it
considers to be adequate to provide for probable incurred losses, there can be no assurance that
future losses will not exceed estimated amounts or that additional provisions for loan losses will
not be required in future periods.    In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Company's allowance for loan losses.  Such
agencies may require the Company to provide additions to the allowance based upon judgments
that differ from those of management.

At March 31, 2002, the allowance for loan losses totaled $382,000 or 0.63% of gross
loans and 89% of total non-performing loans.  At September 30, 2001, our allowance for loan
losses totaled $417,000, or 0.65% of gross loans and 62% of total non-performing loans.

Non-performing assets include non-accrual loans, loans 90 days or more delinquent and still
accruing interest, foreclosed real estate and other repossessed assets.  Loans greater than 90 days
past due, and other designated loans of concern, are placed on non-accrual status, unless it is
determined that the loans are well collateralized and in the process of collection.  The following
table presents non-performing assets for the periods indicated.

---

|                                                            | March 31,2001 | September 30,2001
|----------------------------------------------------------- | ------------- | -----------------
|Non-accrual loans                                           | $   430,671   | $    97,749      
|Loans past due 90 days or more                              | -             | 574,747          
|Total non-performing loans                                  | $   430,671   | $   672,496      
|Foreclosed real estate and other repossessed assets         | 644,876       | 1,160,492        
|Total non-performing assets                                 | $1,075,547    | $1,832,988       
|Total non-performing loans as a percentage of total loans   | 0.72%         | 1.05%            
|Total non-performing assets as a percentage of total assets | 1.31%         | 2.19%            

Non-performing loans at March 31, 2002 decreased $241,000 to $431,000, as compared to
$672,000 at September 30, 2001.   At March 31, 2002, non-performing loans were comprised of
two loans secured by single-family residential property totaling $138,000, four loans secured by
commercial real estate totaling $175,000, and fourteen loans secured by automobiles totaling
$118,000. Management does not expect to incur any losses in excess of the amounts already
reserved on these loans.

Total non-performing assets decreased for the period ended March 31, 2002 to $1.1 million or
1.31% of total assets as compared to $1.8 million or 2.19% of total assets at September 30, 2001.
The decrease in non-performing assets was primarily attributable to decreases in foreclosed real
estate, repossessed vehicles and loans 90 day past due.

**Results of Operations**

The Company's results of operations are primarily dependent on its net interest income, which is
the difference between interest income on interest-earning assets and interest expense on
interest-bearing liabilities.  Interest income is a function of the average balances of
interest-earning assets outstanding during the period and the average yields earned on such
assets.  Interest expense is a function of the average amount of interest-bearing liabilities
outstanding during the period and the average rates paid on such liabilities.  The Company also
generates noninterest income, such as income from service charges and fees on checking
accounts, loan servicing and other fees and charges and gains on sales of loans and servicing
rights.  The level of its noninterest expenses, such as employee salaries and benefits, occupancy
and equipment expenses, and federal deposit insurance premiums, also affects the Company's net
income.

**Comparison of Six Months Ended March 31, 2002 and March 31, 2001**

The Company reported net loss after taxes of $327,000 for the six months ended March 31, 2002,
compared to a net loss of $317,000 reported for the six months ended March 31, 2001.  The
decrease in net income, as discussed in more detail below, resulted primarily from a decrease in
net interest income of $275,000. These items were partially offset by decreases in the provision
for loan losses, compensation and benefits expense and various other noninterest expenses as
more fully discussed below.

Net interest income, after provision for loan losses, decreased $163,000 to $1.4 million for the
six months ended March 31, 2002, compared to $1.6 million for the six months ended March 31,
2001.  This decrease was the result of lower interest income earned on loans of $731,000,
partially offset by a decrease in interest expense on deposits of $416,000.  The spread between
the average yield on interest earning assets and the average cost of funds decreased to 4.93% at
March 31, 2002 from 5.82% at March 31, 2001.  The Company anticipates that this spread will
continue to decrease as lower yielding assets that exhibit less credit risk replace higher yielding
Second Chance Auto Loans currently held in portfolio.

---

Noninterest income decreased $31,000 to $439,000 for the six months ended March 31, 2002
from $470,000 for the six months ended March 31, 2001.  This decrease was the result of a
decrease of $70,000 in gain on sale of loans and mortgage servicing rights.  This decrease was
partially offset by an increase in deposit account service charges of $29,000 and a $14,000
increase on servicing fee income.   The increase in deposit account service charges was primarily
the result of an increase in fees collected on deposit accounts.

Noninterest expense decreased $324,000 to $2.2 million for the six months ended March 31,
2002.  This decrease was the result of a decrease in compensation and benefits of $238,000,
decreased occupancy and equipment expense of $69,000, a decrease in data processing of
$16,000, a decrease in postage of $13,000 and a decrease in various other miscellaneous
noninterest expenses of $13,000.  During the first quarter of 2002 a majority of the Company's
lending personnel resigned. The Company has been unable to hire qualified replacements, as
potential hires are deterred by concerns that their employment may be terminated following the
Company's anticipated merger with Texas United Bancshares, Inc. These deceases in noninterest
expense were partially offset by increases in federal insurance premiums of $13,000 and in net
loss on real estate owned, repossessed assets and insurance claims of $14,000.

Income tax benefit decreased $140,000 to $0 for the six months ended March 31, 2002 from a
$140,000 benefit for the six months ended March 31, 2001.  The $0 tax benefit reflects the
recording of a valuation allowance  to offset the benefit of the net operating loss for the current
period.

**Comparison of Three Months Ended March 31, 2002 and March 31, 2001**

The Company reported net loss after taxes of $147,000 for the three months ended March 31,
2002, compared to a net loss of $277,000 reported for the three months ended March 31, 2001.
The decrease in the net loss, as discussed in more detail below, resulted primarily from a
decrease in noninterest expense of $360,000.  This was partially offset by a decrease in net
interest income and noninterest expense.

Net interest income, after provision for loan losses, decreased $48,000 to $717,000 for the three
months ended March 31, 2002, compared to $765,000 for the three months ended March 31,
2001. This decrease is the result of lower interest earned on assets of $408,000 and offset by a
decrease in the provision for loan losses of $91,000, and a decrease in interest expense on
deposits of $269,000.  The spread between the average yield on interest earning assets and the
average cost of funds decreased to 4.93% at March 31, 2002 from 5.82% at March 31, 2001.

Noninterest income decreased $50,000 to $187,000 for the three months ended March 31, 2002
from $237,000 for the three months ended March 31, 2001.  This decrease is the result of a
decrease in gain on sale of loans and mortgage servicing rights of $71,000.  This was partially
offset by an increase in deposit account service charges of $9,000 and a $12,000 increase in
servicing fee income.  The increase in deposit account service charges was primarily the result of
an increase in fees collected on deposit accounts.

Noninterest expense decreased $360,000 to $1.1 million for the three months ended March 31,
2002 from $1.4 million for the three months ended March 2001.  This decrease was the result of
a decrease in compensation and benefits of $176,000, a decrease in occupancy and equipment
expense of $44,000, a decrease in net loss on real estate owned, repossessed assets and insurance
claims including provision of $134,000 and various other miscellaneous noninterest expenses of
$27,000. These decreases in noninterest expense were partially offset by an increase in
professional fees of $9,000 and other noninterest expense of $11,000.

---

Income tax benefit decreased $132,000 to $0 for the three months ended March 31, 2002 from a
$132,000 benefit for the three months ended March 31, 2001.   The $0 tax benefit reflects the
recording of a valuation allowance to offset the benefit of the net operating loss for the current
period.

**Liquidity and Capital Resources**

The Company's primary sources of funds are deposits, principal and interest payments on loans
and other funds provided from operations.  Additionally, the Company in the past has borrowed
funds from the Federal Home Loan Bank of Dallas or utilized particular sources of funds based
on need, comparative costs and availability at the time.

While scheduled loan repayments, short-term investments, and FHLB of Dallas borrowings are
relatively stable sources of funds, deposit flows are unpredictable and are a function of external
factors including competition, the general level of interest rates, general economic conditions and
the restructuring occurring in the banking industry.

The Company maintains investments in liquid assets based on management's assessment of cash
needs, expected deposit flows, availability of advances from the FHLB of Dallas, available yield
on liquid assets (both short-term and long-term) and the objectives of its asset/liability
management program.  Several options are available to increase liquidity, including reducing
loan originations, increasing deposit marketing activities, and increasing borrowings from the
FHLB of Dallas.

At March 31, 2002, the Company had commitments to originate loans, including loans in
process, totaling $3.0 million.  The Company also had $1.3 million of outstanding unused lines
of credit and $103,000 of letters of credit.  The Company considers its liquidity and capital
resources to be adequate to meet its foreseeable short -term needs.  The Company expects to be
able to fund or refinance, on a timely basis, its material commitments and long-term liabilities.
At March 31, 2002, the Company had no advances outstanding from the FHLB of Dallas.

At March 31, 2002, the Bank had Tier I capital of $4.9 million, or 6.03% of total assets, which
was $1.6 million above the minimum capital requirement of $3.3 million, or 4% of total assets.

At March 31, 2002, the Bank had total risk-based capital of $5.2 million and risk-weighted assets
of $53.2 million or total Risk-based Capital of 9.84% of risk-weighted assets.  This amount was
$980,000 above the minimum regulatory requirement of $4.3 million, or 8.0% of risk-weighted
assets.

As a result of regulatory classification by the OTS, the Bank is required to provide prior notice
to OTS of transactions between the Bank and its affiliates, such as the Company, and receipt of
OTS approval prior to paying a dividend from the Bank to the Company.  The Company's 11
1/2% debentures due March 31, 2003 require quarterly interest payments of approximately
$105,000.  As of January 3, 2002, the Bank had received OTS approval to pay dividends of
$487,000 to the Company. Management has projected that these dividends will allow the
Company to make all of the necessary interest payments and pay expected operating expenses for
the year ending September 30, 2002.    Failure to timely pay the interest would result in a default
under the indenture governing the debentures and may result in acceleration of the maturity of the
outstanding $3,629,000 principal balance and a demand for payment from debenture holders that
the Company could not currently meet.

---

**Safe Harbor Statement**

This report contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended.  The Company intends such forward-looking statements to be covered by the safe
harbor provision for forward-looking statements contained in the Private Securities Reform Act
of 1995, and is including this statement for purposes of these safe harbor provisions.  Forward-looking statements, which are based on certain assumptions and describe future plans, strategies
and expectations of the Company, are generally identifiable by use of words such as: believe,
expect, intend, anticipate, estimate, project or similar expressions.  The Company's ability to
predict results or the actual effect of future plans or strategies is inherently uncertain.  Factors
which could have a material adverse affect on the operations and future prospects of the
Company and the subsidiaries include, but are not limited to, changes in: interest rates, general
economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S.
Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality
or composition of the loan or investment portfolios, demand for loan products, deposit flows,
competition, demand for financial services in the Company's market area and accounting
principles, policies and guidelines.  These risks and uncertainties should be considered in
evaluating forward-looking statements and could affect the Company's financial performance
and cause the Company's actual results for future periods to differ materially from those
anticipated or projected.  The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made.

The Company does not undertake, and specifically disclaims any obligation, to revise any
forward-looking statements to reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.  Further information concerning the Company
and its business, including additional factors that could materially affect the Company's financial
results, is included in the Company's filings with the Securities and Exchange Commission.

---

**PART II- OTHER INFORMATION**

**Item 1.	Legal Proceedings**

The Company is, from time to time, a party to certain lawsuits arising in the ordinary course of its
business.  The Company believes that none of these lawsuits would, if adversely determined, have
a material adverse effect on its financial condition.

**Item 2.	Changes in Securities**

None.

**Item 3.	Defaults upon Senior Securities**

None.

**Item 4.	Submission of Matters to a Vote of Security Holders**

None.

**Item 5.	Other Information**

On November 5, 2001, Texas United Bancshares, Inc. ("Texas United") and the Company
entered into a definitive agreement for Texas United to acquire the Company and merge the
respective banking operations.  The agreement provided that the stockholders of the Company
would receive .31579 shares of Texas United common stock for each Company common share.
The proposed transaction is subject to regulatory approval and the approval of the Company's
stockholders. Based on the $19.00 per share agreed upon value for Texas United common stock,
the exchange ratio implied a price of $6.00 for each share of Company common stock.

During the second quarter of 2002, Texas United indicated that the reduction in net interest
income could be construed as a material adverse change in the Company since September 30,
2001, giving Texas United the right to terminate the merger agreement.  Texas United also
informed the Company that Texas United had not intended to provide in the merger agreement an
adjustment to the calculation of the Company's required equity capital at closing based on
reserves for loan losses.  In Texas United's view, the Company's total equity capital at March 31,
2002 was below $800,000, which, if the case at closing, would result in a reduction in the
exchange ratio.

Although the Company's Board of Directors disagreed with Texas United's interpretation of the
manner in which total equity capital should be calculated, the Board of Directors believed that
arguably a material adverse change had occurred which could permit Texas United to terminate
the merger agreement. The Board of Directors noted that, based upon computations performed by
the Company's management, if reserves for loan losses were included in the calculation of total
equity capital there would be no reduction in the exchange ratio, based upon the Company's total
equity capital at March 31, 2002; however, if reserves for loan losses were excluded from the
calculation of total equity capital, as suggested by Texas United, under the merger agreement the
value per share to be received by Company stockholders would be reduced from $6.00 to $4.80.
After much discussion, the Company's Board of Directors approved the terms of an amended and
restated merger agreement, providing for a fixed exchange ratio of 0.29211, resulting in a per
share value of $5.55 for Company stockholders based on a Texas United stock price of $19.00
per share.  Texas United's right to terminate the merger agreement based on the level of the
Company's total equity capital at closing was eliminated and its right to terminate for a material
adverse change in the Company was limited

---

**Item 6.	Exhibits and Reports on Form 8-K**

None.

---

**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.

|      |              | **THE BRYAN COLLEGE STATION FINANCIAL
HOLDING COMPANY**
|----- | ------------ | -------------------------------------------------------
|Date: | May 14, 2002 | /s/ Wilson Fletcher
Wilson FletcherPresident           
|Date: | May 14, 2002 | /s/ Mary L. Hegar
Mary L. HegarSr. VP/Accounting