Texas United Bancshares Reports 2005 First Quarter Net Income of
$2.8 Million, or $0.35 Per Diluted Share LA GRANGE, Texas, April 26
/PRNewswire-FirstCall/ -- Texas United Bancshares, Inc.
(NASDAQ:TXUI), a community banking organization located in central
and south central Texas and in areas north and south of the
Dallas-Fort Worth metroplex, reported net income for the first
quarter of 2005 of $2.8 million, an increase of 79.0 percent
compared with $1.6 million for the first quarter of 2004 and an
increase of 96.1 percent compared with the $1.4 million for the
fourth quarter of 2004. The increase in the first quarter of 2005
compared with the same period in 2004 is primarily due to the
acquisitions of Community Home Loan, Inc., on February 5, 2004, the
Central Bank branches on July 30, 2004, and GNB Bancshares, Inc.,
on October 1, 2004. In addition, the increase in net income is also
attributed to an improvement in the net interest margin and an
increase in non-interest income. Diluted earnings per share for the
first quarter of 2005 were $0.35 compared with $0.37 and $0.18,
respectively, for the first and fourth quarters of 2004. Per share
results for the fourth quarter of 2004 and first quarter of 2005
reflect the sale of 2,300,000 shares of common stock through a
public offering in August 2004 and the issuance of approximately
1,457,000 shares in connection with the acquisition of GNB
Bancshares, Inc. in October 2004. Weighted average diluted shares
outstanding for the first quarter of 2005 were 7,968,000 compared
with 4,193,000 weighted average diluted shares outstanding for the
same period in 2004. Don Stricklin, President and CEO, commented,
"We are extremely pleased with our first quarter results. We worked
hard to assimilate our fourth quarter 2004 acquisition of GNB
Bancshares, and we are very satisfied with our progress. GNB
Financial, one of our two banking subsidiaries, was a strong
performer this past quarter." Net interest income for the first
quarter of 2005 was $12.5 million compared with $11.6 million for
the fourth quarter of 2004, an increase of 8.1 percent, primarily
due to a 2.5 percent increase in average earning assets as a result
of the GNB Bancshares acquisition combined with a 35 basis point
improvement in the net interest margin to 5.05 percent. Net
interest income for the first quarter of 2004 was $6.7 million. Mr.
Stricklin noted, "Our net interest income has benefited from our
recent acquisition of GNB Bancshares, which contributed quality
earning assets and low-cost core deposits, as well as strong loan
volume over the previous two quarters and our ability to control
deposit cost in our markets." Noninterest income for the first
quarter of 2005 was $5.9 million, an increase of 26.8 percent
compared with the $4.6 million for the fourth quarter of 2004. The
$1.3 million improvement primarily reflects $550,000 premiums
received on the sale of SBA loans, commissions on investment
products, and service charges on deposit accounts. Noninterest
expense was $13.4 million for the first quarter of 2005, unchanged
from the fourth quarter of 2004. During the first quarter of 2005,
Texas United announced the beginning of construction of three
full-service banking centers, two in Bryan-College Station and one
in Magnolia (part of the Houston metropolitan area), which are all
scheduled for completion during the third quarter of 2005. Over the
past five quarters, Texas United also expanded its mortgage banking
activities and acquired GNB Bancshares and the two Central Bank
branches. For the first quarter of 2005, the efficiency ratio
improved to 73.42 percent compared with 82.94 percent for the
fourth quarter of 2004. Net charge-offs were $476,000 for the first
quarter of 2005, or 0.27 percent of average loans compared with
$456,000, or 0.27 percent of average loans for the fourth quarter
of 2004, and net recoveries of $50,000 or 0.01 percent of average
loans for the first quarter of 2004. Nonperforming assets were 0.33
percent of total assets at March 31, 2005, compared with 0.33
percent at December 31, 2004 and 0.37 percent at March 31, 2004.
The loan loss allowance was 0.96 percent of total loans at March
31, 2005. Total assets were $1.2 billion at March 31, 2005, up
$38.8 million or 3.4 percent from December 31, 2004. Since
year-end, loans have grown $32.2 million or 4.6 percent, with
growth notably strong in the residential real estate sector (up
$14.4 million or 7.5 percent) and the commercial real estate sector
(up $9.8 million or 4.4 percent). While deposits have remained
stable since December 31, 2004, Texas United utilized federal funds
purchased to fund loan growth. Since year-end, non-interest bearing
deposits increased $5.3 million or 2.8 percent. At March 31, 2005,
non-interest bearing deposits represented 21.9 percent of total
deposits compared with 21.3 percent at December 31, 2004.
Shareholders' equity at March 31, 2005 was $104.2 million, a
decrease of $752,000 or 0.7% from the $104.9 million at December
31, 2004. The decrease is attributed to an unrealized loss
adjustment on available for sale securities in the first quarter of
2005 of $2.9 million and dividends payable of $624,000, partially
offset by earnings retention of $2.8 million. About the Company
Texas United Bancshares, Inc. is a registered financial holding
company listed on the Nasdaq National Market under the symbol
"TXUI". Texas United operates through two wholly-owned subsidiary
banks, State Bank and GNB Financial, n.a., and offers a complete
range of banking services through 20 full service State Bank
banking centers located in the greater central and south central
Texas areas and seven full service GNB Financial banking centers
located in Cooke, Denton and Ellis counties in Texas. In addition,
State Bank has 18 mortgage loan production offices located in
Houston, San Antonio and Austin through the Bank and its
wholly-owned subsidiary, Community Home Loan, Inc. Forward-Looking
Statements Except for historical information, certain of the
matters discussed in this news release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve risks and
uncertainties, including, but not limited to, the following:
general business and economic conditions in the markets Texas
United serves may be less favorable than expected which could
decrease the demand for loan, deposit and other financial services
and increase loan delinquencies and defaults; changes in the
interest rate environment which could reduce Texas United's net
interest margin; acquisition integration may be more difficult than
anticipated; legislative or regulatory developments including
changes in laws concerning taxes, banking, securities, insurance
and other aspects of the financial securities industry; competitive
factors may increase, including product and pricing pressures among
financial services organizations; and changes in accounting
principles, policies or guidelines. All written or oral
forward-looking statements are expressly qualified in their
entirety by these cautionary statements. Please also read the
additional risks and factors described from time to time in Texas
United's reports and registration statements filed with the
Securities and Exchange Commission. We disclaim any obligation to
update or revise any forward-looking statements contained in this
release. Texas United Bancshares First Quarter 2005 Results TEXAS
UNITED BANCSHARES CONSOLIDATED FINANCIAL HIGHLIGHTS (dollars in
thousands, except per share data) (Unaudited) Quarterly 2005 2004
2004 2004 2004 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr EARNINGS Net
interest income $12,505 $11,571 $8,191 $7,148 $6,664 Provision for
loan losses 722 700 700 300 150 NonInterest income 5,851 4,616
5,008 4,667 3,904 NonInterest expense 13,439 13,426 10,289 9,196
8,150 Net income 2,802 1,429 1,561 1,495 1,565 Basic earnings per
share 0.36 0.18 0.30 0.37 0.39 Diluted earnings per share 0.35 0.18
0.29 0.36 0.37 Weighted average basic shares outstanding (in 000's)
7,798 7,776 5,249 4,020 4,010 Weighted average diluted shares
outstanding (in 000's) 7,968 7,953 5,421 4,200 4,193 PERFORMANCE
RATIOS Return on average assets 0.97% 0.50% 0.76% 0.83% 0.97%
Return on average equity 10.66% 5.40% 10.35% 15.75% 15.99% Net
interest margin 5.05% 4.70% 4.42% 4.46% 4.63% Efficiency ratio
73.42% 82.94% 77.95% 78.01% 77.69% Full-time equivalent employees
557 522 409 377 369 CAPITAL Average equity to average assets 9.08%
9.34% 7.39% 5.30% 6.28% Tier 1 leverage capital ratio 7.10% 7.08%
9.07% 6.04% 6.46% Tier 1 risk-based capital ratio 9.96% 10.40%
13.53% 8.88% 9.61% Total risk-based capital ratio 10.83% 11.31%
14.39% 9.74% 10.56% Book value per share $13.35 $13.44 $12.43 $9.34
$10.17 Cash dividend per share 0.08 0.07 0.07 0.07 0.07 ASSET
QUALITY Gross charge-offs $684 $621 $449 $392 $244 Net charge-offs
(recoveries) 476 456 287 271 (50) Net charge-offs (recoveries) to
average loans 0.27% 0.27% 0.24% 0.26% (0.01)% Allowance for loan
losses $6,931 $6,685 $4,535 $4,122 $4,093 Allowance for loan losses
to total loans 0.96% 0.96% 0.91% 0.95% 1.01% Nonperforming loans
$3,208 $2,970 $1,978 $976 $2,073 Other real estate and repossessed
assets 641 843 586 1,672 333 Nonperforming assets to total assets
0.33% 0.33% 0.31% 0.35% 0.37% END OF PERIOD BALANCES Loans $725,724
$693,548 $498,632 $435,128 $406,840 Total earning assets (before
allowance) 1,035,947 999,194 754,385 676,414 589,071 Total assets
1,180,166 1,141,366 839,327 751,631 658,720 Deposits 880,306
880,075 688,899 567,440 536,749 Shareholders' equity 104,177
104,812 78,653 37,570 40,845 AVERAGE BALANCES Loans $699,763
$679,149 $476,826 $424,805 $391,820 Total earning assets (before
allowance) 1,004,551 980,258 736,516 645,214 578,730 Total assets
1,157,872 1,128,209 811,834 716,168 650,610 Deposits 884,117
890,913 664,560 561,454 517,475 Shareholders' equity 105,190
105,320 59,999 37,960 39,373 Year ended December 31, 2004 2003
EARNINGS Net interest income $33,574 $26,223 Provision for loan
losses 1,850 2,900 NonInterest income 18,195 13,804 NonInterest
expense 41,061 29,992 Net income 6,050 5,241 Basic earnings per
share 1.15 1.31 Diluted earnings per share 1.11 1.26 Weighted
average basic shares outstanding (in 000's) 5,264 3,984 Weighted
average diluted shares outstanding (in 000's) 5,442 4,149
PERFORMANCE RATIOS Return on average assets 0.74% 0.86% Return on
average equity 9.97% 14.12% Net interest margin 4.56% 4.81%
Efficiency ratio 79.49% 77.33% Full-time equivalent employees 522
313 CAPITAL Average equity to average assets 7.43% 6.07% Tier 1
leverage capital ratio 7.08% 6.46% Tier 1 risk-based capital ratio
10.40% 9.54% Total risk-based capital ratio 11.31% 10.47% Book
value per share $13.44 $9.49 Cash dividend per share 0.28 0.28
ASSET QUALITY Gross charge-offs $1,706 $3,238 Net charge-offs
(recoveries) 964 2,303 Net charge-offs (recoveries) to average
loans 0.19% 0.61% Allowance for loan losses $6,685 $3,893 Allowance
for loan losses to total loans 0.96% 1.01% Nonperforming loans
$2,970 $1,988 Other real estate and repossessed assets 843 273
Nonperforming assets to total assets 0.33% 0.35% END OF PERIOD
BALANCES Loans $693,548 $384,331 Total earning assets (before
allowance) 999,194 568,878 Total assets 1,141,366 637,684 Deposits
880,075 501,136 Shareholders' equity 104,812 37,987 AVERAGE
BALANCES Loans $493,490 $376,988 Total earning assets (before
allowance) 735,847 544,778 Total assets 816,705 611,645 Deposits
639,850 486,441 Shareholders' equity 60,663 37,112 Texas United
Bancshares First Quarter 2005 Results TEXAS UNITED BANCSHARES
CONSOLIDATED STATEMENTS OF EARNINGS (dollars in thousands) THREE
THREE MONTHS MONTHS ENDED ENDED YEAR ENDED YEAR ENDED March 31,
March 31, December 31, December 31, 2005 2004 2004 2003 (Unaudited)
(Unaudited) INTEREST INCOME Loans $14,105 $7,517 $37,710 $30,295
Investment securities 2,864 1,685 8,597 6,315 Federal funds sold 8
4 30 91 Total interest income 16,977 9,206 46,337 36,701 INTEREST
EXPENSE Deposits 3,077 1,789 9,223 7,487 Federal funds purchased
196 14 194 128 Junior subordinated deferrable interest debentures
390 266 1,189 746 Borrowings 809 473 2,157 2,117 Total interest
expense 4,472 2,542 12,763 10,478 Net interest income 12,505 6,664
33,574 26,223 Provision for loan losses 722 150 1,850 2,900 Net
interest income after provision for loan losses 11,783 6,514 31,724
23,323 NONINTEREST INCOME Service charges on deposit accounts 1,834
1,597 6,931 6,753 Mortgage servicing revenue 296 208 888 2,247 Net
(loss) gain on sales of securities (38) 77 114 1,244 Net gain on
sale of loans from CHL, Inc. 1,642 1,238 7,452 - Other noninterest
income 2,117 784 2,810 3,560 Total noninterest income 5,851 3,904
18,195 13,804 NONINTEREST EXPENSE Salaries and benefits 7,061 4,274
23,798 16,689 Occupancy 1,805 1,088 5,596 4,621 Other noninterest
expense 4,573 2,788 11,667 8,682 Total noninterest expense 13,439
8,150 41,061 29,992 Earnings before provision for income tax
expense 4,195 2,268 8,858 7,135 Provision for income tax expense
1,393 703 2,808 1,894 Net earnings $2,802 $1,565 $6,050 $5,241
Texas United Bancshares First Quarter 2005 Results TEXAS UNITED
BANCSHARES CONSOLIDATED BALANCE SHEETS (dollars in thousands) March
31, December 31, 2005 2004 (Unaudited) ASSETS Cash and due from
banks $34,334 $36,752 Federal funds sold 5,235 4,015 Total cash and
cash equivalents 39,569 40,767 Securities available for sale, at
fair value 304,988 301,631 Total loans, including loans held for
sale 725,724 693,548 Allowance for loan losses (6,931) (6,685)
Total loans, net 718,793 686,863 Premises and equipment, net 40,983
39,730 Accrued interest receivable 5,311 5,214 Goodwill 40,117
40,117 Core deposit intangibles, net 5,155 5,341 Mortgage servicing
rights, net 4,740 4,698 Other assets 20,510 17,005 Total assets
$1,180,166 $1,141,366 LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits: Noninterest-bearing $192,727 $187,454 Interest-bearing
687,579 692,621 Total deposits 880,306 880,075 Securities sold
under agreement to repurchase 5,243 6,291 Federal funds purchased
53,825 15,125 Junior subordinated deferrable interest debentures
17,520 17,520 Borrowings 107,593 105,940 Other liabilities 11,502
11,603 Total liabilities 1,075,989 1,036,554 SHAREHOLDERS' EQUITY
Common stock 7,811 7,802 Additional paid-in capital 75,976 75,935
Retained earnings 24,099 21,921 Accumulated other comprehensive
(loss) income (3,592) (729) Less treasury stock, at cost (117)
(117) Total shareholders' equity 104,177 104,812 Total liabilities
and shareholders' equity $1,180,166 $1,141,366 DATASOURCE: Texas
United Bancshares, Inc. CONTACT: Tom Adams of Texas United
Bancshares, Inc., +1-979-968-7261
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