TRBS Texas Regional Bancshares

Texas Regional Bancshares, Inc. Reports Record Annual Earnings MCALLEN, Texas, Jan. 18 /PRNewswire-FirstCall/ -- Texas Regional Bancshares, Inc. (NASDAQ:TRBS) ("Texas Regional"), bank holding company for Texas State Bank, today reported net income for fourth quarter 2004 of $20,848,000, or $0.42 per diluted common share, compared to $15,944,000, or $0.36 per diluted common share, for the comparable 2003 period. Return on assets and return on shareholders' equity averaged 1.46 percent and 14.10 percent, respectively, compared to 1.52 percent and 15.18 percent, respectively, for the corresponding 2003 period. For the year ended December 31, 2004, net income totaled $76,658,000, or $1.59 per diluted common share, compared to $62,309,000, or $1.40 per diluted common share, for the corresponding 2003 period. Return on assets and return on shareholders' equity averaged 1.45 percent and 14.24 percent, respectively for the year ended December 31, 2004, compared to 1.54 percent and 15.41 percent, respectively, for the matching 2003 period. Net realized gains on sales of securities available for sale, net of taxes, represented $0.08 per diluted common share for the year ended December 31, 2004 compared to $0.16 for the comparable 2003 period. "We are pleased to report record results as Texas Regional topped $76 million in annual earnings and $5.8 billion in assets for the first time in the company's history. Loan growth, adjusted to exclude the effect of acquisitions, totaled 21.5 percent during the last twelve months," commented Glen E. Roney, Chairman of the Board. "Total return to shareholders on Texas Regional stock exceeded 34 percent during the twelve months ended December 31, 2004 while total market value of our outstanding stock exceeded $1.6 billion for the first time." Texas Regional completed the acquisition through merger of Corpus Christi Bancshares, Inc. on February 14, 2003, Southeast Texas Bancshares, Inc. ("Southeast Texas") on March 12, 2004 and Valley Mortgage Company, Inc. on November 23, 2004. The results of operations for these acquisitions have been included in the consolidated financial statements since their respective purchase dates. Operating Highlights Net interest income of $55,591,000 for fourth quarter 2004 improved $15,643,000 or 39.2 percent over fourth quarter 2003. Average total interest- earning assets, the primary factor in growth of net interest income, increased 34.3 percent from fourth quarter 2003 to $5,172,820,000 for fourth quarter 2004 in large part due to the Southeast Texas merger. The net yield, on a taxable-equivalent basis, on average total interest-earning assets increased fifteen basis points to 4.36 percent for fourth quarter 2004 compared to the corresponding 2003 period. For the year ended December 31, 2004, net interest income totaled $204,250,000, reflecting a $55,858,000 or 37.6 percent increase from the equivalent 2003 period. This growth resulted principally from an increase of 29.0 percent in average total interest-earning assets to $4,823,170,000 for the year ended December 31, 2004 over the corresponding 2003 period. The net yield, on a taxable-equivalent basis, on average total interest-earning assets increased by twenty-six basis points to 4.31 percent for the year ended December 31, 2004 compared to the matching 2003 period. Provision for loan losses of $5,769,000 for fourth quarter 2004 increased $2,585,000 or 81.2 percent from fourth quarter 2003, primarily due to higher loan production. Loans held for investment grew internally by $212,007,000 or 6.0 percent during fourth quarter 2004 compared to $102,449,000 or 4.2 percent during fourth quarter 2003. The provision for loan losses represented 0.63 percent of average loans held for investment for fourth quarter 2004 compared to 0.51 percent for fourth quarter 2003. Net charge-offs totaled $3,897,000 for fourth quarter 2004, representing an increase of $2,023,000 from fourth quarter 2003. For the year ended December 31, 2004, provision for loan losses totaled $20,583,000, reflecting a $7,428,000 or 56.5 percent increase over the comparable prior year period. Provision for loan losses totaled 0.62 percent of average loans held for investment for the year ended December 31, 2004 compared to 0.55 percent for the year ended December 31, 2003. Noninterest income of $20,180,000 for fourth quarter 2004 increased $9,217,000 or 84.1 percent over fourth quarter 2003. Service charges on deposits amounted to $10,449,000 for fourth quarter 2004, an increase of $3,514,000 over fourth quarter 2003 principally due to growth in demand deposits. Other service charges increased $2,368,000 to $3,786,000 for fourth quarter 2004 primarily due to title insurance agency fee income of $1,245,000, which was derived from the title insurance agencies acquired in the Southeast Texas merger. Trust service fees of $1,843,000 for fourth quarter 2004 increased $1,102,000 over fourth quarter 2003. The fair value of assets held by the trust department increased $971,248,000 from December 31, 2003 to $1,466,841,000 at December 31, 2004. The increase in trust assets held resulted primarily from the Southeast Texas merger and additional trust business developed in the southeast Texas markets. Net realized gains on sales of securities available for sale decreased $177,000 to $1,010,000 for fourth quarter 2004 measured against fourth quarter 2003. Loan servicing loss, net of amortization of the mortgage servicing rights ("MSR") asset, narrowed $1,569,000 to $59,000 for fourth quarter 2004 from fourth quarter 2003. MSR amortization decreased $1,400,000 from fourth quarter 2003 to $675,000 for fourth quarter 2004 due to a reduction in mortgage prepayments experienced during fourth quarter 2004. For the year ended December 31, 2004, noninterest income totaled $73,735,000, reflecting an increase of $23,480,000 or 46.7 percent over the corresponding 2003 period. Service charges on deposits increased 54.7 percent to $38,541,000 for the year ended December 31, 2004 compared to the same 2003 period while average demand deposits increased 56.0 percent from the comparable prior year. Other service charges increased $7,121,000 to $13,356,000 for the year ended December 31, 2004 primarily due to title insurance agency fees of $3,779,000 resulting from the Southeast Texas merger and an increase in debit card income of $1,275,000. Net realized gains on sales of securities available for sale of $5,855,000 for the year ended December 31, 2004 decreased $4,985,000 from the comparable prior year period as callable security sales were curtailed in the face of rising interest rates. Data processing service fees increased 17.0 percent during the year ended December 31, 2004 to $8,531,000 compared to the corresponding 2003 period. The increase was primarily related to increased volume of data processing business for existing data processing clients. The number of data processing clients totaled 27 at December 31, 2004 compared to 26 at December 31, 2003. Loan servicing loss, net which includes the amortization of the MSR asset, decreased $3,633,000 to $1,197,000 for the year ended December 31, 2004 compared to the matching 2003 period. MSR amortization decreased $4,050,000 to $3,075,000 for the year ended December 31, 2004 compared to the corresponding 2003 period, primarily as a result of lower mortgage prepayments experienced during 2004 compared to 2003. Noninterest expense of $38,738,000 for fourth quarter 2004 increased $14,951,000 or 62.9 percent over fourth quarter 2003. This expansion generally corresponds with growth in business volumes as banking locations increased by 33 to 67 during the twelve months ended December 31, 2004, including 29 acquired in the Southeast Texas merger. The efficiency ratio was 51.13 percent for the quarter ended December 31, 2004, compared to 46.72 percent for the quarter ended December 31, 2003. Salaries and employee benefits increased 65.4 percent during fourth quarter 2004 to $20,528,000 compared to fourth quarter 2003 due to higher staffing levels as a result of the Southeast Texas acquisition, salary and other compensation increases and expansion of medical benefits for eligible part-time employees. The number of full-time equivalent employees of 1,997 at December 31, 2004 increased 55.5 percent from December 31, 2003. Approximately 32.3 percent of the increase was a result of the Southeast Texas acquisition. For the year ended December 31, 2004, noninterest expense totaled $142,810,000 reflecting an increase of $50,920,000 or 55.4 percent over the corresponding 2003 period due to the growth in banking operations, primarily through the Southeast Texas merger. Noninterest expense increased forty-three basis points to 2.70 percent of average total assets for the year ended December 31, 2004 compared to the corresponding 2003 period. Salaries and employee benefits increased $26,670,000 to $74,252,000 for the year ended December 31, 2004 compared to the matching 2003 period, representing an increase of twenty-three basis points to 1.40 percent of average total assets. The efficiency ratio totaled 51.37 percent for the year ended December 31, 2004 compared to 46.26 percent for the corresponding 2003 period. Financial Condition Assets totaled $5,838,894,000 at December 31, 2004, reflecting an increase of $1,620,958,000 or 38.4 percent from December 31, 2003, primarily due to the Southeast Texas merger. Loans held for investment of $3,750,519,000 at December 31, 2004 increased $1,230,825,000 or 48.8 percent from December 31, 2003. Deposits increased to $4,760,387,000 at December 31, 2004, up $1,243,952,000 or 35.4 percent from December 31, 2003. Excluding volumes acquired through business combinations, internal growth rates for loans and deposits averaged 21.5 percent and 7.9 percent, respectively, for the twelve months ended December 31, 2004. Other assets at December 31, 2004 included goodwill and identifiable intangibles of $204,110,000. Shareholders' equity of $594,068,000 at December 31, 2004 increased $172,337,000 from December 31, 2003, reflecting a 40.9 percent increase. The increase resulted primarily from issuance of common stock in the Southeast Texas acquisition of $110,074,000 and net income of $76,658,000 for the year ended December 31, 2004. The total risk-based, tier 1 risk-based and leverage capital ratios of 11.91 percent, 10.84 percent and 8.32 percent at December 31, 2004, respectively, substantially exceeded regulatory requirements for a well-capitalized bank holding company. Asset Quality At December 31, 2004, total loans held for investment of $3,750,519,000 included $19,750,000 or 0.53 percent classified as nonperforming compared to 0.40 percent on December 31, 2003. The allowance for loan losses of $45,024,000 represented 1.20 percent of loans held for investment and 228.0 percent of nonperforming loans at December 31, 2004. Net charge-offs for fourth quarter 2004 averaged 0.43 percent of average loans held for investment compared to 0.30 percent for fourth quarter 2003. Total nonperforming assets at December 31, 2004 of $27,148,000 represented 0.72 percent of total loans held for investment and foreclosed and other assets compared to 0.82 percent at December 31, 2003. Accruing loans 90 days or more past due of $19,684,000 at December 31, 2004 totaled 0.52 percent of total loans held for investment and foreclosed and other assets compared to 0.35 percent at December 31, 2003. Other Information Texas Regional today announced the completion of its acquisition through merger of Mercantile Bank & Trust, FSB ("Mercantile"), effective at the close of business on January 14, 2005. Mercantile is a privately held bank headquartered at 5820 West Northwest Highway, Dallas, Texas with two additional banking locations in the Dallas metropolitan area. As of December 31, 2004, Mercantile had total assets of $178.8 million, loans of $118.9 million, deposits of $163.7 million and shareholders' equity of $13.9 million. Texas Regional is a McAllen-based bank holding company whose stock trades on The Nasdaq Stock Market(R) under the symbol TRBS. Texas State Bank, its wholly-owned subsidiary, will now operate 70 banking locations across Texas primarily located in the metropolitan areas of Beaumont-Port Arthur, Brownsville-Harlingen-San Benito, Corpus Christi, Dallas, Houston, McAllen- Edinburg-Mission and Tyler. Texas Regional files annual, quarterly and special reports, proxy and information statements, and other information with the SEC. Investors may read and copy any of these reports, statements and other information at the SEC's public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549. Investors should call the SEC at 1-800-SEC-0330 for further information on the public reference room. The reports, statements and other information filed by Texas Regional with the SEC are also available free at the SEC's web site at http://www.sec.gov/ . You can also obtain a free copy of these reports, statements and other information from Texas Regional. Additional financial, statistical and business-related information, as well as business trends, is included in a Financial Supplement. This release, the Financial Supplement and other information are available on Texas Regional's website at http://www.trbsinc.com/ . The Financial Supplement and other information available on Texas Regional's website can also be obtained by calling Janie Moran, Controller, at (956) 631-5400. Forward-Looking Information This document, information filed by Texas Regional with the SEC and information on Texas Regional's website may contain forward-looking information (including information related to plans, projections or future performance of Texas Regional and its subsidiaries and planned market opportunities, employment opportunities and synergies from mergers), the occurrence of which involve certain risks, uncertainties, assumptions and other factors which could materially affect future results. If any of these risks or uncertainties materializes or any of these assumptions prove incorrect, Texas Regional's results could differ materially from Texas Regional's expectations in these statements. Texas Regional assumes no obligation and does not intend to update these forward-looking statements. For further information, please see Texas Regional's reports filed with the SEC pursuant to the Securities Exchange Act of 1934, which are available at the SEC's website at http://www.sec.gov/ . For further information, contact Glen E. Roney, Chief Executive Officer at (956) 631-5400. Texas Regional Bancshares, Inc. Reports 2004 Annual Results Texas Regional Bancshares, Inc. and Subsidiaries Financial Highlights (Unaudited) (Dollars in Thousands, At / For Three Months Ended Except Per Share Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Data) 2004 2004 2004 2004 2003 Condensed Income Statements Loans Held for Investment $62,149 $57,904 $54,669 $44,515 $41,476 Securities 13,283 13,399 12,573 12,130 11,608 Other Interest-Earning Assets 521 254 389 293 453 Total Interest Income 75,953 71,557 67,631 56,938 53,537 Deposits 17,538 15,638 14,185 12,438 12,125 Other Borrowed Money 2,824 2,098 1,712 1,396 1,464 Total Interest Expense 20,362 17,736 15,897 13,834 13,589 Net Interest Income 55,591 53,821 51,734 43,104 39,948 Provision for Loan Losses 5,769 6,197 4,693 3,924 3,184 Service Charges - Deposits 10,449 10,530 10,264 7,298 6,935 Other Service Charges 3,786 3,773 3,400 2,397 1,418 Trust Service Fees 1,843 1,674 1,444 727 741 Net Realized Gains on Sales of Securities Available for Sale 1,010 2,963 1,383 499 1,187 Data Processing Service Fees 2,201 2,080 2,128 2,122 1,881 Loan Servicing Loss, Net (59) (677) (279) (182) (1,628) Other Noninterest Income 950 659 745 607 429 Total Noninterest Income 20,180 21,002 19,085 13,468 10,963 Salaries and Employee Benefits 20,528 20,514 19,428 13,782 12,408 Net Occupancy Expense 2,977 3,157 3,293 2,173 1,627 Equipment Expense 4,398 4,020 3,909 3,219 2,668 Other Real Estate (Income) Expense, Net (200) (57) 572 121 299 Amortization - Identifiable Intangibles 1,780 1,995 1,591 798 838 Other Noninterest Expense, Net 9,255 9,069 9,718 6,770 5,947 Total Noninterest Expense 38,738 38,698 38,511 26,863 23,787 Income Before Income Tax Expense 31,264 29,928 27,615 25,785 23,940 Income Tax Expense 10,416 10,107 8,783 8,628 7,996 Net Income $20,848 $19,821 $18,832 $17,157 $15,944 Per Common Share Data (A) Net Income-Basic $0.42 $0.41 $0.39 $0.38 $0.36 Net Income-Diluted 0.42 0.40 0.38 0.38 0.36 Market Value at Period End 32.68 31.09 30.61 28.37 24.67 Book Value at Period End 11.99 11.67 11.04 11.34 9.54 Cash Dividends Declared 0.100 0.100 0.083 0.083 0.080 Share Data (A) (in Thousands) Basic 49,185 48,921 48,858 45,236 44,189 Diluted 49,566 49,500 49,424 45,749 44,667 Shares Outstanding at Period End (A) 49,553 48,960 48,875 48,846 44,206 Selected Financial Data Return on Average Assets 1.46% 1.43% 1.39% 1.53% 1.52% Return on Average Equity 14.10 14.10 13.79 14.29 15.18 Leverage Capital Ratio 8.32 8.17 7.99 9.38 9.26 Expense Efficiency Ratio (B) 51.13 51.72 54.38 47.48 46.72 TE Net Interest Income (C) $56,681 $54,813 $52,653 $43,967 $40,856 TE Adjustment (C) 1,090 992 919 863 908 Net Interest Income, as Reported $55,591 $53,821 $51,734 $43,104 $39,948 TE Net Interest Margin (C) 4.36% 4.34% 4.30% 4.25% 4.21% Goodwill $174,503 $163,928 $165,637 $165,808 $29,856 Identifiable Intangibles, Net 29,607 30,803 30,668 32,259 15,263 Trust Assets Held, at Fair Value 1,466,841 1,420,664 1,315,346 1,138,061 495,593 Full-Time Equivalent Employees 1,997 1,914 1,901 1,674 1,284 Texas Regional Bancshares, Inc. Reports 2004 Annual Results Texas Regional Bancshares, Inc. and Subsidiaries Financial Highlights (Unaudited) (Dollars in Thousands, At / For Three Months Ended Except Per Share Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Data) 2004 2004 2004 2004 2003 Condensed Balance Sheets Loans Held for Investment $3,750,519 $3,538,428 $3,438,666 $3,297,220 $2,519,694 Securities 1,530,713 1,513,536 1,470,178 1,514,357 1,386,224 Other Interest- Earning Assets 29,316 20,471 17,904 55,514 24,833 Total Interest- Earning Assets 5,310,548 5,072,435 4,926,748 4,867,091 3,930,751 Cash and Due from Banks 145,528 138,860 134,731 173,974 100,167 Premises and Equipment, Net 134,239 131,443 128,302 125,582 107,875 Other Assets, Net 293,603 319,697 290,923 327,818 110,377 Allowance for Loan Losses (45,024) (43,153) (41,956) (41,094) (31,234) Total Assets $5,838,894 $5,619,282 $5,438,748 $5,453,371 $4,217,936 Savings and Time Deposits $3,893,614 $3,721,681 $3,740,983 $3,719,274 $2,980,224 Other Borrowed Money 461,751 437,970 280,868 307,881 259,565 Total Interest- Bearing Liabilities 4,355,365 4,159,651 4,021,851 4,027,155 3,239,789 Demand Deposits 866,773 850,432 860,241 828,470 536,211 Other Liabilities 22,688 37,808 17,155 43,949 20,205 Total Liabilities 5,244,826 5,047,891 4,899,247 4,899,574 3,796,205 Shareholders' Equity 594,068 571,391 539,501 553,797 421,731 Total Liabilities and Equity $5,838,894 $5,619,282 $5,438,748 $5,453,371 $4,217,936 Condensed Average Balance Sheets Loans Held for Investment $3,631,640 $3,483,354 $3,383,797 $2,713,645 $2,463,839 Securities 1,517,518 1,523,544 1,501,918 1,416,884 1,351,869 Other Interest- Earning Assets 23,662 17,987 40,884 33,162 36,811 Total Interest- Earning Assets 5,172,820 5,024,885 4,926,599 4,163,691 3,852,519 Cash and Due from Banks 136,899 126,523 141,361 100,336 117,675 Premises and Equipment, Net 132,538 129,560 126,577 111,448 107,490 Other Assets, Net 294,785 292,067 290,574 156,374 118,056 Allowance for Loan Losses (44,804) (43,108) (43,849) (35,057) (31,526) Total Assets $5,692,238 $5,529,927 $5,441,262 $4,496,792 $4,164,214 Savings and Time Deposits $3,803,982 $3,758,880 $3,747,073 $3,177,044 $2,922,640 Other Borrowed Money 399,386 312,575 283,272 212,613 266,317 Total Interest- Bearing Liabilities 4,203,368 4,071,455 4,030,345 3,389,657 3,188,957 Demand Deposits 871,569 864,818 834,725 596,331 533,745 Other Liabilities 29,216 34,473 26,852 27,893 24,832 Total Liabilities 5,104,153 4,970,746 4,891,922 4,013,881 3,747,534 Shareholders' Equity 588,085 559,181 549,340 482,911 416,680 Total Liabilities and Equity $5,692,238 $5,529,927 $5,441,262 $4,496,792 $4,164,214 Nonperforming Assets, Past Due Loans Nonaccrual Loans $19,750 $16,610 $11,965 $15,154 $10,122 Foreclosed and Other Assets 7,398 11,386 10,594 13,362 10,547 Total Nonperforming Assets 27,148 27,996 22,559 28,516 20,669 Accruing Loans 90 Days or More Past Due 19,684 6,785 8,105 7,994 8,886 Net Charge-Offs 3,897 5,000 3,831 2,859 1,874 Net Charge-Offs to Average Loans 0.43% 0.57% 0.46% 0.42% 0.30% (A) Restated to retroactively give effect for the three-for-two stock split declared and distributed by Texas Regional during third quarter 2004, effected as a 50% stock dividend. (B) Ratio of Noninterest Expense divided by the sum of Net Interest Income and Noninterest Income. (C) Taxable equivalent adjustment computed based on a 35% tax rate. Texas Regional Bancshares, Inc. Reports 2004 Annual Results Texas Regional Bancshares, Inc. and Subsidiaries Financial Highlights (Unaudited) At / For Year Ended (Dollars in Thousands, Dec 31, Dec 31, Except Per Share Data) 2004 2003 Condensed Income Statements Loans Held for Investment $219,237 $161,978 Securities 51,385 44,045 Other Interest-Earning Assets 1,457 2,754 Total Interest Income 272,079 208,777 Deposits 59,799 53,533 Other Borrowed Money 8,030 6,852 Total Interest Expense 67,829 60,385 Net Interest Income 204,250 148,392 Provision for Loan Losses 20,583 13,155 Service Charges - Deposits 38,541 24,920 Other Service Charges 13,356 6,235 Trust Service Fees 5,688 2,870 Net Realized Gains on Sales of Securities Available for Sale 5,855 10,840 Data Processing Service Fees 8,531 7,293 Loan Servicing Loss, Net (1,197) (4,830) Other Noninterest Income 2,961 2,927 Total Noninterest Income 73,735 50,255 Salaries and Employee Benefits 74,252 47,582 Net Occupancy Expense 11,600 6,848 Equipment Expense 15,546 10,510 Other Real Estate Expense, Net 436 734 Amortization - Identifiable Intangibles 6,164 3,370 Other Noninterest Expense, Net 34,812 22,846 Total Noninterest Expense 142,810 91,890 Income Before Income Tax Expense 114,592 93,602 Income Tax Expense 37,934 31,293 Net Income $76,658 $62,309 Per Common Share Data (A) Net Income-Basic $1.60 $1.41 Net Income-Diluted 1.59 1.40 Market Value at Period End 32.68 24.67 Book Value at Period End 11.99 9.54 Cash Dividends Declared 0.366 0.320 Share Data (A) (in Thousands) Basic 48,043 44,058 Diluted 48,355 44,548 Shares Outstanding at Period End (A) 49,553 44,206 Selected Financial Data Return on Average Assets 1.45% 1.54% Return on Average Equity 14.24 15.41 Leverage Capital Ratio 8.32 9.26 Expense Efficiency Ratio (B) 51.37 46.26 TE Net Interest Income (C) $208,114 $151,584 TE Adjustment (C) 3,864 3,192 Net Interest Income, as Reported $204,250 $148,392 TE Net Interest Margin (C) 4.31% 4.05% Goodwill $174,503 $29,856 Identifiable Intangibles, Net 29,607 15,263 Trust Assets Held, at Fair Value 1,466,841 495,593 Full-Time Equivalent Employees 1,997 1,284 Texas Regional Bancshares, Inc. Reports 2004 Annual Results Texas Regional Bancshares, Inc. and Subsidiaries Financial Highlights (Unaudited) At / For Year Ended (Dollars in Thousands, Dec 31, Dec 31, Except Per Share Data) 2004 2003 Condensed Balance Sheets Loans Held for Investment $3,750,519 $2,519,694 Securities 1,530,713 1,386,224 Other Interest-Earning Assets 29,316 24,833 Total Interest-Earning Assets 5,310,548 3,930,751 Cash and Due from Banks 145,528 100,167 Premises and Equipment, Net 134,239 107,875 Other Assets, Net 293,603 110,377 Allowance for Loan Losses (45,024) (31,234) Total Assets $5,838,894 $4,217,936 Savings and Time Deposits $3,893,614 $2,980,224 Other Borrowed Money 461,751 259,565 Total Interest-Bearing Liabilities 4,355,365 3,239,789 Demand Deposits 866,773 536,211 Other Liabilities 22,688 20,205 Total Liabilities 5,244,826 3,796,205 Shareholders' Equity 594,068 421,731 Total Liabilities and Equity $5,838,894 $4,217,936 Condensed Average Balance Sheets Loans Held for Investment $3,304,499 $2,374,353 Securities 1,490,140 1,297,218 Other Interest-Earning Assets 28,531 67,218 Total Interest-Earning Assets 4,823,170 3,738,789 Cash and Due from Banks 127,263 119,668 Premises and Equipment, Net 125,064 100,183 Other Assets, Net 259,778 116,861 Allowance for Loan Losses (41,717) (30,583) Total Assets $5,293,558 $4,044,918 Savings and Time Deposits $3,622,617 $2,855,834 Other Borrowed Money 310,764 246,256 Total Interest-Bearing Liabilities 3,933,381 3,102,090 Demand Deposits 793,121 508,571 Other Liabilities 28,854 30,003 Total Liabilities 4,755,356 3,640,664 Shareholders' Equity 538,202 404,254 Total Liabilities and Equity $5,293,558 $4,044,918 Nonperforming Assets, Past Due Loans Nonaccrual Loans $19,750 $10,122 Foreclosed and Other Assets 7,398 10,547 Total Nonperforming Assets 27,148 20,669 Accruing Loans 90 Days or More Past Due 19,684 8,886 Net Charge-Offs 15,587 10,265 Net Charge-Offs to Average Loans 0.47% 0.43% (A) Restated to retroactively give effect for the three-for-two stock split declared and distributed by Texas Regional during third quarter 2004, effected as a 50% stock dividend. (B) Ratio of Noninterest Expense divided by the sum of Net Interest Income and Noninterest Income. (C) Taxable-equivalent adjustment computed based on a 35% tax rate. DATASOURCE: Texas Regional Bancshares, Inc. CONTACT: Glen E. Roney, Chief Executive Officer of Texas Regional Bancshares, Inc., +1-956-631-5400 Web site: http://www.sec.gov/ Web site: http://www.trbsinc.com/

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