Texas Regional Bancshares, Inc. Reports Second Quarter Earnings

Texas Regional Bancshares, Inc. Reports Second Quarter Earnings



MCALLEN, Texas, July 18  /PRNewswire-FirstCall/ -- Texas Regional Bancshares,
Inc. ("Texas Regional") (NASDAQ:TRBS), bank holding company for Texas State
Bank, today reported net income for second quarter 2005 of $21,914,000, or
$0.44 per diluted common share, compared to $18,832,000, or $0.38 per diluted
common share, for the comparable 2004 period. All per share amounts for prior
periods have been adjusted for the three-for-two stock split effected as a 50
percent stock dividend declared and distributed to shareholders of Texas
Regional during third quarter 2004. Return on assets and return on
shareholders' equity averaged 1.43 percent and 14.26 percent, respectively,
compared to 1.39 percent and 13.79 percent, respectively, for the corresponding
2004 period.

For the six months ended June 30, 2005, net income totaled $45,713,000, or
$0.92 per diluted common share, compared to $35,989,000, or $0.76 per diluted
common share, for the corresponding 2004 period. Return on assets and return on
shareholders' equity averaged 1.51 percent and 15.07 percent, respectively for
the six months ended June 30, 2005, compared to 1.46 percent and 14.41 percent,
respectively, for the matching 2004 period.

Texas Regional completed the acquisitions of Southeast Texas Bancshares, Inc.
("Southeast Texas") on March 12, 2004, Valley Mortgage Company, Inc. ("Valley
Mortgage") on November 23, 2004 and Mercantile Bank & Trust, FSB ("Mercantile")
on January 14, 2005. The results of operations for Southeast Texas, Valley
Mortgage and Mercantile have been included in the consolidated financial
statements since their respective purchase dates.

The Company benefited from special distributions received during the first and
second quarters of 2005, as a result of the merger of PULSE EFT Association
with Discover Financial Services, a business unit of Morgan Stanley.  Such
distributions amounted to $0.01 per diluted common share for second quarter of
2005 and $0.08 per diluted common share for the six months ended June 30, 2005.

"Our earnings per share continue to show increases over the corresponding
periods of the prior year. Adjusted for securities gains and one-time gains,
earnings per share grew 16.7 percent for the second quarter of 2005, and 13.7
percent for the first half of the year as compared to the respective 2004
periods," said Glen E. Roney, Chairman of the Board. "We are also expanding our
71 banking center network. There are currently new banking centers under
construction in Houston, Dallas and Bishop and in June we moved into our new
facility in Eagle Pass. Furthermore, we have acquired three additional sites in
Houston and one in Corpus Christi."

Operating Highlights

Net interest income of $58,475,000 for second quarter 2005 increased
$6,741,000, or 13.0 percent over second quarter 2004. Average total interest-
earning assets, the primary factor in net interest income growth, increased
13.6 percent from second quarter 2004 to $5,594,489,000 for second quarter
2005. The net interest margin, on a taxable-equivalent basis, decreased four
basis points to 4.26 percent for second quarter 2005 compared to the
corresponding 2004 period.

For the six months ended June 30, 2005, net interest income totaled
$116,155,000, reflecting a $21,317,000 or 22.5 percent increase from the
equivalent 2004 period. This growth resulted principally from an increase of
21.9 percent in average total interest-earning assets to $5,539,218,000 for the
six months ended June 30, 2005 as compared to the 2004 period. The net interest
margin, on a taxable-equivalent basis, for the six months ended June 30, 2005
was 4.30 percent, an increase of two basis points when compared to the matching
2004 period.

Provision for loan losses of $5,801,000 for second quarter 2005 increased
$1,108,000 or 23.6 percent as compared to the provision for loan losses during
second quarter 2004, primarily due to an increase in loan volume. The provision
for loan losses represented 0.60 percent of average loans held for investment
for second quarter 2005 compared to 0.56 percent for second quarter 2004. Net
charge-offs totaled $5,091,000 for second quarter 2005, representing 0.53
percent of average loans held for investment compared to 0.46 percent of
average loans held for investment for second quarter 2004.

For the six months ended June 30, 2005, provision for loan losses totaled
$11,208,000, reflecting a $2,591,000 or 30.1 percent increase over the
comparable prior year period. Provision for loan losses totaled 0.58 percent of
average loans held for investment for the six months ended June 30, 2005
compared to 0.57 percent for the six months ended June 30, 2004.

Noninterest income of $20,441,000 for second quarter 2005 increased $1,497,000
or 7.9 percent over second quarter 2004. Service charges on deposits amounted
to $9,641,000 for second quarter 2005, a decrease of $623,000 as compared to
second quarter 2004. The decrease in service charges on deposits resulted
primarily from a $715,000 reduction in non-sufficient and return item charges
during the second quarter of 2005 compared to the same quarter of 2004. Trust
service fees of $1,904,000 for second quarter 2005 increased 31.9 percent over
second quarter 2004 attributable to an increase in the average fair value of
trust accounts by 29.0 percent during second quarter 2005 compared to the same
period of the prior year. The increase in the average fair value of trust
accounts was primarily due to additional trust business developed during the
last twelve months. The fair value of assets managed by the trust department
totaled $1,681,922,000 at June 30, 2005.

Net realized gains on sales of securities available for sale decreased to a
$323,000 net gain for second quarter 2005 compared to a $1,383,000 net gain for
second quarter 2004. Loan servicing income (loss), net of amortization of the
mortgage servicing rights ("MSR") asset, increased to $3,000 net servicing
income for second quarter 2005 compared to $279,000 net servicing loss for
second quarter 2004. This reflects an increase of $282,000 from the prior year
period. The increase resulted primarily from $170,000 in servicing income from
Valley Mortgage, as well as a decrease in MSR amortization of $219,000 during
second quarter 2005 compared to second quarter 2004. Other noninterest income
increased by $1,993,000 to $2,738,000 for second quarter 2005 compared to
second quarter 2004, primarily due to a $1,112,000 increase in gains on sale of
loans held for sale and mortgage servicing rights. In addition, during second
quarter 2005, the Company received a $908,000 special distribution, as a result
of the merger of PULSE EFT Association with Discover Financial Services.

For the six months ended June 30, 2005, noninterest income totaled $45,102,000
reflecting an increase of $12,763,000 or 39.5 percent over the corresponding
2004 period. Service charges on deposits increased $1,219,000 to $18,781,000
for the six months ended June 30, 2005 compared to the same 2004 period,
primarily due to deposit growth, including related item charges. Total deposits
increased 12.0 percent from the comparable prior year. Other service charges
increased $1,444,000 to $5,654,000 for the six months ended June 30, 2005,
primarily due to an increase in merchant credit and debit card income of
$841,000 and mortgage banking fees of $236,000.

Net realized gains on sales of securities available for sale of $321,000 for
the six months ended June 30, 2005 decreased $1,561,000 from the comparable
prior year period as callable security sales were decreased during a period of
rising interest rates. Loan servicing income (loss), net of amortization of the
MSR asset, increased $617,000 to $156,000 net servicing income for the six
months ended June 30, 2005 compared to the net servicing loss for the matching
2004 period. The increase is primarily due to $351,000 in servicing income
generated from Valley Mortgage, as well as a decrease of $476,000 in MSR
amortization for the six months ended June 30, 2005 compared to the
corresponding 2004 period. Other noninterest income increased by $8,344,000 to
$9,696,000 for the six months ended June 30, 2005 compared to the same 2004
period.  The increase is primarily due to an aggregate $6,160,000 in special
distributions received during the first two quarters of 2005, as a result of
the merger of PULSE EFT Association with Discover Financial Services.

Noninterest expense of $39,072,000 for second quarter 2005 increased $703,000
or 1.8 percent over second quarter 2004. This increase corresponds generally
with growth in business volumes during the twelve months ended June 30, 2005,
including business volumes attributable to the acquisition of Mercantile and
its three banking centers in January 2005 and increases from the Weslaco
banking center opened in February 2005. As of June 30, 2005, Texas State Bank
had a total of 71 banking centers.  The efficiency ratio was 49.51 percent for
the quarter ended June 30, 2005, compared to 54.29 percent for the quarter
ended June 30, 2004. The improvement in the efficiency ratio resulted primarily
from the minor increase in noninterest expense. Noninterest expense increased
only 1.8 percent during second quarter 2005 compared to the same period in 2004
primarily due to the reversal of $1,179,000 in pension plan and bonus expense
accrued during the first quarter of 2005 compared to $1,322,000 in pension plan
and bonus expense during the second quarter of 2004. The efficiency ratio was
also affected by the $908,000 special distribution received from the merger of
PULSE EFT Association with Discover Financial Services during second quarter
2005.

For the six months ended June 30, 2005, noninterest expense totaled $80,094,000
reflecting an increase of $14,942,000 or 22.9 percent over the corresponding
2004 period due to the above mentioned growth in banking operations.
Noninterest expense as a percent of average total assets for the six months
ended June 30, 2005 was 2.65 percent, representing an increase of two basis
points when compared to the same 2004 period.

Salaries and employee benefits increased $9,121,000 to $42,326,000 for the six
months ended June 30, 2005 compared to the six months ended June 30, 2004
primarily due to higher salaries and staffing levels resulting from recent
acquisitions. The number of full-time equivalent employees of 2,057 at June 30,
2005 represented an increase of 8.2 percent as compared to the number of
full-time equivalent employees at June 30, 2004. Salaries and employee benefits
represented 1.40 percent of average total assets for the six months ended June
30, 2005, an increase of six basis points compared to the six months ended June
30, 2004. The efficiency ratio totaled 49.67 percent for the six months ended
June 30, 2005 compared to 51.23 percent for the corresponding 2004 period.

Financial Condition

Assets totaled $6,226,165,000 at June 30, 2005, reflecting an increase of
$787,417,000, or 14.5 percent from June 30, 2004, primarily due to an increase
in loan production. Loans held for investment of $3,903,850,000 at June 30,
2005 increased $465,184,000 or 13.5 percent from June 30, 2004. Deposits
increased to $5,153,937,000 at June 30, 2005, up $552,713,000 or 12.0 percent
from June 30, 2004. Excluding volumes acquired through business combinations,
internal growth rates for loans and deposits averaged 10.1 percent and 8.2
percent, respectively, for the twelve months ended June 30, 2005. Other assets
at June 30, 2005 included total goodwill and identifiable intangibles of
$223,402,000.

Shareholders' equity at June 30, 2005 increased $82,123,000 from June 30, 2004
to $621,624,000, reflecting a 15.2 percent increase. The increase resulted
primarily from net income for the twelve months ended June 30, 2005 of
$86,382,000. The total risk-based, tier 1 risk-based and leverage capital
ratios of 11.74 percent, 10.66 percent and 7.98 percent at period end,
respectively, substantially exceeded regulatory requirements for a well-
capitalized bank holding company.

Asset Quality

At June 30, 2005, total loans held for investment of $3,903,850,000 included
$46,688,000 or 1.20 percent classified as nonperforming compared to 0.35
percent at June 30, 2004. Nonperforming loans increased by $34,723,000 to
$46,688,000 at June 30, 2005 compared to $11,965,000 at June 30, 2004. The
increase resulted primarily from the addition of five loan relationships
totaling $33,465,000. The allowance for loan losses of $48,022,000 represented
1.23 percent of loans held for investment and 102.86 percent of nonperforming
loans at June 30, 2005. The allowance for loan losses of $41,956,000 at June
30, 2004 represented 1.22 percent of loans held for investment and 350.66
percent of nonperforming loans. Net charge-offs for second quarter 2005 were
0.53 percent of average loans held for investment compared to 0.46 percent for
second quarter 2004. Total nonperforming assets at June 30, 2005 of $56,010,000
represented 1.43 percent of total loans held for investment and foreclosed and
other assets compared to 0.65 percent at June 30, 2004. Accruing loans 90 days
or more past due of $22,782,000 at June 30, 2005 totaled 0.58 percent of total
loans held for investment and foreclosed and other assets compared to 0.23
percent at June 30, 2004. Accruing loans 90 days or more past due increased by
$14,677,000 to $22,782,000 at June 30, 2005 compared to $8,105,000 at June 30,
2004. This increase is primarily a result of the addition of six loan
relationships totaling $17,632,000 during the last year.

Since June 30, 2005, a cash payment of $4,000,000 has been made on the
Company's largest nonperforming credit. Also since June 30, 2005, the borrower
on the Company's second largest problem credit closed a real estate
transaction, which according to the terms of the settlement, provides for a
payment of approximately $4,000,000 to be paid to the Company. As of June 30,
2005, this problem credit was classified as 90 days past due and still
accruing, and had a principal balance of approximately $7,000,000. Management
anticipates that upon receipt of the funding of this payment, the principal
balance of the credit will be substantially reduced without a change in the
Company's collateral position. Over $2,600,000 of the Company's foreclosed real
estate properties as of June 30, 2005 have pending contracts for sale.
Management anticipates closing on most if not all of these transactions within
the next 60 days.

Other Information

Texas Regional will host a conference call with analysts and investment
professionals on Monday, July 18, 2005 at 10:00 a.m. CDT. Interested parties
may listen to the live call by dialing [phone] or can access the live
webcast on the Internet at http://www.trbsinc.com/.  The broadcast can be
accessed by clicking the webcast link from the home page. A telephone replay
will be available through the end of day Friday, July 22nd.  To access the
replay, dial [phone]; ID number 6478948.  The webcast of the conference
call will be archived on the Company's website at http://www.trbsinc.com/.

Texas Regional paid a quarterly cash dividend of $0.12 per share on July 15,
2005 to common shareholders of record on July 1, 2005. This dividend represents
a $0.037 per share, or 44.6 percent increase over the dividend paid for the
same period in 2004.

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, conducts commercial banking business through 71 banking
centers primarily located in the metropolitan areas of Beaumont-Port Arthur,
Brownsville-Harlingen-San Benito, Corpus Christi, Dallas, Houston,
McAllen-Edinburg-Mission and Tyler.

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 John A. Martin, Chief Financial Officer, at [phone].

This document 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 materialize 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 Texas
Regional's website at http://www.trbsinc.com/ and the SEC's website at
http://www.sec.gov/.

  Texas Regional Bancshares, Inc.
   and Subsidiaries
  Financial Highlights (Unaudited)     At / For Three Months Ended
  (Dollars in Thousands,  Jun 30,    Mar 31,   Dec 31,    Sep 30,   Jun 30,
  Except Per Share Data)   2005       2005       2004       2004      2004
  Condensed Income Statements
   Loans Held for
    Investment          $70,001    $66,061    $62,127    $57,904    $54,669
   Securities            15,459     14,139     13,283     13,399     12,573
   Other Interest-
    Earning Assets          856        776        498        254        389
    Total Interest
     Income              86,316     80,976     75,908     71,557     67,631
   Deposits              24,280     20,238     17,538     15,638     14,185
   Other Borrowed Money   3,561      3,058      2,802      2,098      1,712
    Total Interest
     Expense             27,841     23,296     20,340     17,736     15,897
    Net Interest Income  58,475     57,680     55,568     53,821     51,734
   Provision for Loan
    Losses                5,801      5,407      5,769      6,197      4,693
   Service Charges -
    Deposits              9,641      9,140     10,449     10,530     10,264
   Other Service Charges  2,704      2,950      2,326      2,194      2,182
   Insurance Commission,
    Fees and Premiums       980        998      1,259      1,173      1,077
   Trust Service Fees     1,904      1,840      1,843      1,674      1,444
   Net Realized Gains (Losses)
    on Sales of Securities
    Available for Sale      323         (2)     1,010      2,963      1,383
   Data Processing Service
    Fees                  2,148      2,624      2,201      2,080      2,128
   Loan Servicing Income
    (Loss), Net               3        153       (188)       (67)     (279)
   Other Noninterest
    Income                2,738      6,958      1,097        658       745
    Total Noninterest
     Income              20,441     24,661     19,997     20,595     18,944
   Salaries and Employee
    Benefits             19,609     22,717     20,527     20,372     19,428
   Net Occupancy Expense  3,747      3,414      3,000      3,136      3,299
   Equipment Expense      3,610      3,323      3,655      3,222      3,234
   Other Real Estate
    (Income) Expense, Net   418        229       (199)       (57)       572
   Amortization -
    Identifiable
    Intangibles           1,652      1,841      1,791      1,987      1,602
   Other Noninterest
    Expense, Net         10,036      9,498      9,758      9,624     10,234
    Total Noninterest
     Expense             39,072     41,022     38,532     38,284     38,369
    Income Before Income
     Tax Expense         34,043     35,912     31,264     29,935     27,616
   Income Tax Expense    12,129     12,113     10,416     10,114      8,784
    Net Income          $21,914    $23,799    $20,848    $19,821    $18,832
  Per Common Share Data (1)
   Net Income-Basic     $  0.44    $  0.48    $  0.42    $  0.41    $  0.39
   Net Income-Diluted      0.44       0.48       0.42       0.40       0.38
   Market Value at Period
    End                   30.48      30.11      32.68      31.09      30.61

   Book Value at Period
    End                   12.53      12.12      11.99      11.67      11.04
   Cash Dividends
    Declared              0.120      0.100      0.100      0.100      0.083
  Share Data (1) (in Thousands)
   Basic                 49,606     49,570     49,185     48,921     48,858
   Diluted               49,855     49,855     49,566     49,500     49,424
  Shares Outstanding at
   Period End (1)        49,624     49,592     49,553     48,960     48,875
  Selected Financial Data
   Return on Average
    Assets                1.43%      1.60%      1.46%      1.43%      1.39%
   Return on Average
    Equity                14.26      15.90      14.10      14.10      13.79
   Leverage Capital Ratio  7.98       7.83       8.32       8.17       7.99
   Expense Efficiency
    Ratio (2)             49.51      49.82      50.99      51.45      54.29
   TE Net Interest
    Income (3)          $59,396    $58,679    $56,658    $54,813    $52,653
   TE Adjustment (3)        921        999      1,090        992        919
    Net Interest Income,
     as Reported         58,475     57,680     55,568     53,821     51,734
  TE Net Interest
   Margin (3)             4.26%      4.34%      4.36%      4.34%      4.30%
  Goodwill, Net         194,849    194,963    174,503    163,928    165,637
  Identifiable Intangibles,
   Net                   28,553     30,022     29,607     30,803     30,668
  Selected Financial Data - Continued
   Trust Assets Held,
   at Fair Value     $1,681,922 $1,475,545 $1,466,841 $1,420,664 $1,315,346
   Full-Time Equivalent
    Employees             2,057      2,061      1,997      1,914      1,901
  Condensed Balance Sheets
   Loans Held for
    Investment       $3,903,850 $3,843,779 $3,750,519 $3,538,428 $3,438,666
   Securities         1,741,827  1,652,438  1,530,713  1,513,536  1,470,178
   Other Interest-Earning
    Assets               24,307     47,834     29,769     20,471     17,728
    Total Interest-
     Earning Assets   5,669,984  5,544,051  5,311,001  5,072,435  4,926,572
   Cash and Due from
    Banks               141,181    133,450    145,528    138,860    134,907
   Premises and
    Equipment, Net      143,136    140,145    134,239    131,443    128,302
   Other Assets, Net    319,886    319,140    293,603    319,697    290,923
   Allowance for Loan
    Losses              (48,022)   (47,313)   (45,024)   (43,153)  (41,956)
      Total Assets   $6,226,165 $6,089,473 $5,839,347 $5,619,282 $5,438,748
   Savings and Time
    Deposits         $4,237,210 $4,081,869 $3,894,067 $3,721,681 $3,740,983
   Other Borrowed Money 405,888    441,329    461,751    437,970    280,868
    Total Interest-   4,643,098  4,523,198  4,355,818  4,159,651  4,021,851
     Bearing Liabilities
   Demand Deposits      916,727    920,271    866,773    850,432    860,241
   Other Liabilities     44,716     45,108     22,698     37,808     17,155
     Total
      Liabilities     5,604,541  5,488,577  5,245,289  5,047,891  4,899,247
   Shareholders' Equity 621,624    600,896    594,058    571,391    539,501
      Total Liabilities
       and Equity    $6,226,165 $6,089,473 $5,839,347 $5,619,282 $5,438,748
  Condensed Average Balance Sheets
   Loans Held for
    Investment       $3,876,051 $3,858,477 $3,631,640 $3,483,354 $3,383,797
   Securities         1,685,893  1,581,314  1,517,518  1,523,544  1,501,918
   Other Interest-Earning
    Assets               32,545     43,542     23,820     17,987     40,621
    Total Interest-
     Earning Assets   5,594,489  5,483,333  5,172,978  5,024,885  4,926,336
   Cash and Due from
    Banks               130,212    143,284    136,899    126,523    141,624
   Premises and
    Equipment, Net      141,391    138,366    132,538    129,560    126,577
   Other Assets, Net    321,237    314,765    294,784    292,067    290,574
   Allowance for Loan
    Losses              (48,500)   (48,548)   (44,804)   (43,108)  (43,849)
     Total Assets    $6,138,829 $6,031,200 $5,692,395 $5,529,927 $5,441,262
   Savings and Time
    Deposits         $4,184,552 $4,103,834 $3,804,139 $3,758,880 $3,747,073
   Other Borrowed Money 404,928    396,068    399,386    312,575    283,272
    Total Interest-   4,589,480  4,499,902  4,203,525  4,071,455  4,030,345
     Bearing Liabilities
   Demand Deposits      902,549    896,633    871,569    864,818    834,725
   Other Liabilities     30,556     27,655     29,216     34,473     26,852
    Total Liabilities 5,522,585  5,424,190  5,104,310  4,970,746  4,891,922
   Shareholders' Equity 616,244    607,010    588,085    559,181    549,340
    Total Liabilities
     and Equity      $6,138,829 $6,031,200 $5,692,395 $5,529,927 $5,441,262
  Nonperforming Assets &
   Past Due Loans
    Nonaccrual Loans    $44,884    $41,518    $19,750    $16,610    $11,965
    Restructured Loans    1,804         --         --         --         --
    Foreclosed and Other
     Assets               9,322      8,002      7,398     11,386     10,594
     Total Nonperforming
      Assets             56,010     49,520     27,148     27,996     22,559
    Accruing Loans 90
     Days or More Past
      Due                22,782     27,764     19,684      6,785      8,105
    Net Charge-Offs       5,091      4,642      3,898      5,000      3,831
    Net Charge-Offs to
     Average Loans        0.53%      0.49%      0.43%      0.57%      0.46%


  Texas Regional Bancshares, Inc.
   and Subsidiaries
  Financial Highlights (Unaudited)                At / For Six Months Ended
  (Dollars in Thousands,                              Jun 30,    Jun 30,
  Except Per Share Data)                                2005       2004
  Condensed Income Statements
   Loans Held for Investment                          $136,062    $99,184
   Securities                                           29,598     24,703
   Other Interest-Earning Assets                         1,632        682
    Total Interest Income                              167,292    124,569
   Deposits                                             44,518     26,623
   Other Borrowed Money                                  6,619      3,108
    Total Interest Expense                              51,137     29,731
    Net Interest Income                                116,155     94,838
   Provision for Loan Losses                            11,208      8,617
   Service Charges - Deposits                           18,781     17,562
   Other Service Charges                                 5,654      4,210
   Insurance Commission, Fees and Premiums               1,978      1,373
   Trust Service Fees                                    3,744      2,171
   Net Realized Gains on Sales of
    Securities Available for Sale                          321      1,882
   Data Processing Service Fees                          4,772      4,250
   Loan Servicing Income (Loss), Net                       156       (461)
   Other Noninterest Income                              9,696      1,352
   Total Noninterest Income                             45,102     32,339
   Salaries and Employee Benefits                       42,326     33,205
   Net Occupancy Expense                                 7,161      5,472
   Equipment Expense                                     6,933      5,961
   Other Real Estate Expense, Net                          647        693
   Amortization - Identifiable Intangibles               3,493      2,400
   Other Noninterest Expense, Net                       19,534     17,421
    Total Noninterest Expense                           80,094     65,152
   Income Before Income Tax Expense                     69,955     53,408
   Income Tax Expense                                   24,242     17,419
    Net Income                                         $45,713    $35,989
  Per Common Share Data (1)
   Net Income-Basic                                      $0.92      $0.76
   Net Income-Diluted                                     0.92       0.76
   Market Value at Period End                            30.48      30.61
   Book Value at Period End                              12.53      11.04
   Cash Dividends Declared                               0.220      0.166
  Share Data (1) (in Thousands)
   Basic                                                49,588     47,048
   Diluted                                              49,824     47,576
  Shares Outstanding at Period End (1)                  49,624     48,875
  Selected Financial Data
   Return on Average Assets                               1.51%      1.46%
   Return on Average Equity                              15.07      14.41
   Leverage Capital Ratio                                 7.98       7.99
   Expense Efficiency Ratio (2)                          49.67      51.23
   TE Net Interest Income (3)                         $118,075    $96,620
   TE Adjustment (3)                                     1,920      1,782
    Net Interest Income, as Reported                  $116,155    $94,838
   TE Net Interest Margin (3)                             4.30%      4.28%
   Goodwill, Net                                      $194,849   $165,637
   Identifiable Intangibles, Net                        28,553     30,668
   Trust Assets Held, at Fair Value                  1,681,922  1,315,346
   Full-Time Equivalent Employees                        2,057      1,901
  Condensed Balance Sheets
   Loans Held for Investment                        $3,903,850 $3,438,666
   Securities                                        1,741,827  1,470,178
   Other Interest-Earning Assets                        24,307     17,728
    Total Interest-Earning Assets                    5,669,984  4,926,572
   Cash and Due from Banks                             141,181    134,907
   Premises and Equipment, Net                         143,136    128,302
   Other Assets, Net                                   319,886    290,923
   Allowance for Loan Losses                           (48,022)   (41,956)
     Total Assets                                   $6,226,165 $5,438,748
   Savings and Time Deposits                        $4,237,210 $3,740,983
   Other Borrowed Money                                405,888    280,868
    Total Interest-Bearing Liabilities               4,643,098  4,021,851
   Demand Deposits                                     916,727    860,241
   Other Liabilities                                    44,716     17,155
    Total Liabilities                                5,604,541  4,899,247
   Shareholders' Equity                                621,624    539,501
     Total Liabilities and Equity                   $6,226,165 $5,438,748
  Condensed Average Balance Sheets
   Loans Held for Investment                        $3,867,312 $3,048,721
   Securities                                        1,633,892  1,459,414
   Other Interest-Earning Assets                        38,014     36,321
    Total Interest-Earning Assets                    5,539,218  4,544,456
   Cash and Due from Banks                             136,712    122,766
   Premises and Equipment, Net                         139,887    119,013
   Other Assets, Net                                   318,019    225,763
   Allowance for Loan Losses                           (48,524)  (39,453)
     Total Assets                                   $6,085,312 $4,972,545
   Savings and Time Deposits                        $4,144,416 $3,462,058
   Other Borrowed Money                                400,523    265,050
    Total Interest-Bearing Liabilities               4,544,939  3,727,108
   Demand Deposits                                     899,607    717,224
   Other Liabilities                                    29,114     25,830
    Total Liabilities                                5,473,660  4,470,162
   Shareholders' Equity                                611,652    502,383
     Total Liabilities and Equity                   $6,085,312 $4,972,545
  Nonperforming Assets & Past Due Loans
   Nonaccrual Loans                                    $44,884    $11,965
   Restructured Loans                                    1,804         --
   Foreclosed and Other Assets                           9,322     10,594
    Total Nonperforming Assets                          56,010     22,559
   Accruing Loans 90 Days or More Past Due              22,782      8,105
   Net Charge-Offs                                       9,733      6,690
   Net Charge-Offs to Average Loans                       0.51%      0.44%



Certain amounts in the prior periods' presentation have been reclassified to
conform to the current presentation. These reclassifications have no effect on
previously reported net income.

   (1) Restated to retroactively give effect for the three-for-two stock
       split effected as a 50% stock dividend declared and distributed by
       the Company during third quarter 2004.
   (2) Ratio of Noninterest Expense divided by the sum of Net Interest
       Income and Noninterest Income.
   (3) Taxable-equivalent adjustment computed based on a 35% tax rate.



CONTACT: Glen E. Roney, Chief Executive Officer, or John A. Martin, Chief
Financial Officer, [phone], both of Texas Regional. 

DATASOURCE: Texas Regional Bancshares, Inc.



CONTACT:  Glen E. Roney, Chief Executive Officer, or John A. Martin,

Chief Financial Officer, [phone], both of Texas Regional



Web site:  http://www.trbsinc.com/ 

Copyright