Texas United Bancshares, Inc. Announces Fourth Quarter and Full Year 2005 Financial Results

Diluted EPS for 2005 Increased 18.0% over 2004















LA GRANGE, Texas, Jan. 25  /PRNewswire-FirstCall/ -- Texas United Bancshares, Inc. (NASDAQ:TXUI), a community banking organization and parent company of State Bank, La Grange, Texas, GNB Financial, n.a., Gainesville, Texas, and Gateway National Bank, Dallas, Texas, today reports net earnings of $2.6 million for the fourth quarter ended December 31, 2005, an increase of $1.2 million or 84.2% compared with $1.4 million for the fourth quarter of 2004.  Diluted earnings per share for the fourth quarter of 2005 were $0.31, up $0.13 or 72.2% compared with $0.18 per diluted share for the fourth quarter of 2004.  The higher net earnings and diluted earnings per share for the fourth quarter of 2005, compared with the same quarter of 2004, were primarily due to internal growth and higher market interest rates on earning assets resulting in continued net interest margin improvement, and the acquisition of Gateway on December 1, 2005.  Diluted earnings per share for the fourth quarter of 2005 were impacted by the issuance of approximately 1,357,000 shares of common stock in connection with the acquisition of Gateway. Weighted average diluted shares outstanding for the fourth quarter of 2005 were approximately 8,555,000 compared with 7,953,000 for the fourth quarter of 2004, a weighted average increase of approximately 602,000 shares.

Net earnings for the year ended December 31, 2005 were $10.7 million, an increase of $4.7 million or 77.5% compared with $6.1 million for the year 2004.  Diluted earnings per share for the year ended December 31, 2005 were $1.31, up $0.20 per diluted share or 18.0% compared with $1.11 for the year 2004.  The increase in net earnings for the year 2005, compared with the year 2004, was primarily due to higher market interest rates on increased earning assets and increased noninterest income as a result of internal growth, the full year effect of the GNB acquisition in October 2005, and the Gateway acquisition.  Diluted earnings per share for the year ended December 31, 2005 were impacted by the issuance of approximately 1,357,000 shares of common stock in connection with the Gateway acquisition, the issuance of approximately 1,457,000 shares of common stock in connection with the GNB acquisition in October 2004 and the sale of 2,300,000 shares of common stock through a public offering in August 2004.  Weighted average diluted shares outstanding for the year 2005 were approximately 8,184,000 compared with 5,442,000 for the year 2004, a weighted average increase of approximately 2,742,000 shares.

Don Stricklin, President and CEO of Texas United Bancshares, Inc., said, "We were very pleased to report record earnings for Texas United in 2005 which reflects our continued growth over the past year and a half with our expanding presence in growing Texas markets.  Our acquisition of Gateway was completed in December 2005 and, pending regulatory approval, we expect to complete the acquisition of The Express Bank of Texas in the first quarter of 2006, and pending regulatory and Northwest shareholder approval, we expect to complete the acquisition of Northwest Bancshares and its subsidiary, Northwest Bank, in the second of quarter of 2006."

Income Statement Data.

Net interest income, before the provision for loan losses, for the fourth quarter ended December 31, 2005 was $14.7 million, up $3.3 million or 29.4% compared with $11.4 million for the fourth quarter of 2004.  The net interest margin for the fourth quarter of 2005 was 4.94%, up 9 basis points compared with 4.85% for the third quarter of 2005 and up 30 basis points compared with 4.64% for the fourth quarter of 2004.  Net interest income, before the provision for loan losses, for the year ended December 31, 2005 was $53.0 million, up $20.3 million or 62.0% compared with $32.7 million for the year 2004.  The net interest margin for the year ended December 31, 2005 was 4.92%, up 48 basis points compared with 4.44% for the year 2004.  The increases in net interest income and the improved net interest margin for both the fourth quarter of 2005 and year 2005 were primarily due to additional interest income earned on larger earning-asset volumes as a result of internal growth and acquisitions, with higher earning-asset yields as a result of increases in short-term market interest rates, that were partially offset by additional interest expense on higher volumes of interest-bearing liabilities with slightly higher interest rates paid for those funding sources.

Noninterest income for the fourth quarter ended December 31, 2005 was $5.8 million, up $947,000 or 19.7% compared with $4.8 million for the fourth quarter of 2004.  Noninterest income for the year ended December 31, 2005 was $24.7 million, up $5.6 million or 29.2% compared with $19.1 million for the year 2004.  The increases in both periods were primarily due to increased fees collected on additional loan and deposit accounts as a result of internal growth, the full year effect of the GNB acquisition, and the Gateway acquisition.  Increased mortgage servicing revenue was principally the result of increased mortgage banking activities and higher mortgage loan origination volumes.

Noninterest expense for the fourth quarter ended December 31, 2005 was $15.4 million, an increase of $1.9 million or 14.5% compared with $13.4 million for the fourth quarter of 2004.  Noninterest expense for the year ended December 31, 2005 was $57.6 million, up $16.6 million or 40.4% compared with $41.1 million for the year 2004.  The increase in both periods reflect the impact of Texas United's expansion and acquisition activities over the past eighteen months, including the impact of additional staffing and occupancy costs from each acquisition, staffing to handle expanded back office operations, professional and legal fees related to compliance and acquisition projects, the construction of three full-service banking centers in the third and fourth quarters of 2005, and increased mortgage banking activities.

The efficiency ratios for the fourth quarter of 2005 and for the year ended December 31, 2005 were 73.21% and 72.40%, respectively.  These ratios were calculated on a net basis which excludes intangible amortization and securities gains and losses, and includes interest income on a fully tax- equivalent basis.  Historically, Texas United has reported efficiency ratios on a gross basis (which does not adjust for intangible amortization or the tax equivalency of interest income).  Calculated on a gross basis, the efficiency ratios would have been 75.11% for the fourth quarter of 2005 and 74.09% for the year ended December 31, 2005, compared with 83.02% for the fourth quarter of 2004 and 79.49% for the year ended December 31, 2004.  Going forward, Texas United plans to present the efficiency ratio on a net basis.  Although noninterest expense has increased comparatively in recent periods, management believes that Texas United has achieved increased economies of scale through its expansion activities, and this is positively reflected in its improved efficiency ratio.

Asset Quality Data.

Nonperforming assets at December 31, 2005 were $7.1 million or 0.46% of total assets, compared with $3.9 million or 0.34% of total assets at December 31, 2004.  A portion of the increase was attributable to a parcel of other real estate owned acquired in the Gateway acquisition.  Texas United has a contract for the sale of the property and management expects to complete the sale for a full recovery in the first quarter of 2006.  Net charge-offs for the fourth quarter of 2005 were $1.1 million or 0.47% of average loans, compared with $456,000 or 0.27% of average loans at December 31, 2004.  Net charge-offs for the year ended December 31, 2005 were $2.7 million or 0.35% of average loans, compared with $964,000 or 0.19% of average loans at December 31, 2004.  The allowance for loan losses at December 31, 2005 was $9.6 million or 0.93% of total loans.

Balance Sheet Data.

Total assets at December 31, 2005 were $1.6 billion, up $411.1 million or 36.0% compared with $1.1 billion at December 31, 2004.  Total investment securities at December 31, 2005 were $269.2 million, down $32.5 million or 10.8% compared with $301.6 million at December 31, 2004.  Total loans at December 31, 2005 were $1.0 billion, up $338.3 million or 48.8% compared with $693.5 million at December 31, 2004.  Total deposits at December 31, 2005 were $1.1 billion, up $241.3 million or 27.4% compared with $880.1 million at December 31, 2004.  Total borrowings at December 31, 2005 were $265.3 million, up $126.7 million or 91.4% compared with $138.6 million at December 31, 2004.

Shareholders' equity at December 31, 2005 was $137.9 million, an increase of $33.1 million or 31.6% compared with $104.8 million at December 31, 2004. The increase was primarily the result of the Gateway acquisition and full year 2005 earnings.  At December 31, 2005, there were 9,225,106 shares of Texas United common stock outstanding.

Texas United Bancshares, Inc. is a registered financial holding company listed on the NASDAQ National Market under the symbol "TXUI." Texas United operates through three wholly-owned subsidiary banks, State Bank, GNB Financial, n.a., and Gateway National Bank, all of which offer a complete range of banking services.  State Bank is headquartered in La Grange, Texas with twenty-two full-service banking centers located in central and south central Texas.  GNB Financial is headquartered in Gainesville, Texas with seven full-service banking centers located in Cooke, Denton and Ellis counties, north and south of the Dallas-Fort Worth metroplex.  Gateway National Bank is headquartered in Dallas, Texas with six Dallas area banking centers.  In addition, State Bank operates five loan production offices and eleven limited service branches located in Houston, San Antonio and Austin, Texas.

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, INC.
                       CONSOLIDATED BALANCE SHEETS
                          (Dollars in thousands)

                                                 December 31,
                                     2005        2004      Change   Percent
                                 (Unaudited)
   ASSETS
      Cash and due from banks       $61,764     $36,752    $25,012    68.1%
      Federal funds sold             33,620       4,015     29,605   737.4%
         Total cash and cash
          equivalents                95,384      40,767     54,617   134.0%

      Securities available for
       sale, at fair value          232,965     301,631    (68,666)  -22.8%
      Securities held to
       maturity, at cost             36,209           -     36,209

      Total loans, including
       loans held for sale        1,031,838     693,548    338,290    48.8%
      Allowance for loan losses      (9,592)     (6,685)    (2,907)  -43.5%
         Total loans, net         1,022,246     686,863    335,383    48.8%

      Premises and equipment, net    53,520      39,730     13,790    34.7%
      Accrued interest receivable     7,433       5,214      2,219    42.6%
      Goodwill                       63,396      40,117     23,279    58.0%
      Core deposit intangibles,
       net                            8,847       5,341      3,506    65.6%
      Mortgage servicing rights,
       net                            4,878       4,698        180     3.8%
      Other assets                   27,579      17,005     10,574    62.2%

         Total assets            $1,552,457  $1,141,366   $411,091    36.0%


   LIABILITIES AND SHAREHOLDERS' EQUITY
      Deposits:
         Noninterest-bearing       $317,721    $187,454   $130,267    69.5%
         Interest-bearing           803,699     692,621    111,078    16.0%
            Total deposits        1,121,420     880,075    241,345    27.4%

      Securities sold under
       repurchase agreements          7,120       6,291        829    13.2%
      Federal funds purchased        21,901      15,125      6,776    44.8%
      Junior subordinated
       deferrable interest
       debentures                    37,624      17,520     20,104   114.7%
      Borrowings                    205,755     105,940     99,815    94.2%
      Other liabilities              20,724      11,603      9,121    78.6%
            Total liabilities     1,414,544   1,036,554    377,990    36.5%

   SHAREHOLDERS' EQUITY
      Common stock                    9,210       7,802      1,408    18.0%
      Additional paid-in capital    102,682      75,935     26,747    35.2%
      Retained earnings              30,045      21,921      8,124    37.1%
      Accumulated other
       comprehensive loss            (3,907)       (729)    (3,178) -435.9%
      Less treasury stock, at cost     (117)       (117)         -     0.0%
         Total shareholders' equity 137,913     104,812     33,101    31.6%

         Total liabilities and
          shareholders' equity   $1,552,457  $1,141,366   $411,091    36.0%



                        TEXAS UNITED BANCSHARES, INC.
                     CONSOLIDATED STATEMENTS OF EARNINGS
                    (In thousands, except per share data)


                                   For the Three Months Ended December 31,
                                      2005      2004     Change   Percent
                                        (Unaudited)
  INTEREST INCOME
     Loans                          $19,141   $12,866    $6,275    48.8%
     Investment securities
      - taxable                       2,093     2,522      (429)  -17.0%
     Investment securities
      - tax-exempt                      292       144       148   102.8%
     Federal funds sold and other
      temporary investments             177        16       161  1006.3%
        Total interest income        21,703    15,548     6,155    39.6%

  INTEREST EXPENSE
     Deposits                         4,097     3,079     1,018    33.1%
     Federal funds purchased             74        75        (1)   -1.3%
     Borrowings                       2,227       622     1,605   258.0%
     Securities sold under repurchase
      agreements                         32         -        32       -
     Junior subordinated deferrable
      interest debentures               550       391       159    40.7%
        Total interest expense        6,980     4,167     2,813    67.5%

        Net interest income          14,723    11,381     3,342    29.4%
     Provision for loan losses        1,040       700       340    48.6%
        Net interest income after
         provision for loan losses   13,683    10,681     3,002    28.1%

  NONINTEREST INCOME
     Service charges on deposit
      accounts                        2,489     1,735       754    43.5%
     Mortgage servicing revenue         220       173        47    27.2%
     Net gain (loss) on sale of
      securities                         15       (53)       68   128.3%
     Net gain on sale of loans        2,047     2,283      (236)  -10.3%
     Other noninterest income           982       668       314    47.0%
        Total noninterest income      5,753     4,806       947    19.7%

  NONINTEREST EXPENSE
     Salaries and benefits            9,123     8,138       985    12.1%
     Occupancy                        2,023     2,177      (154)   -7.1%
     Other noninterest expense        4,222     3,111     1,111    35.7%
        Total noninterest expense    15,368    13,426     1,942    14.5%

        Earnings before provision for
         income tax expense           4,068     2,061     2,007    97.4%
     Provision for income tax expense 1,436       632       804   127.2%

        Net earnings                 $2,632    $1,429    $1,203    84.2%

  Earnings per common share:
      Basic                           $0.32     $0.18     $0.14    77.8%
      Diluted                         $0.31     $0.18     $0.13    72.2%

  Dividends per common share          $0.08     $0.07     $0.01    14.3%

  Weighted average shares
   outstanding - basic                8,298     7,776       522     6.7%
  Weighted average shares
   outstanding - diluted              8,555     7,953       602     7.6%



                      TEXAS UNITED BANCSHARES, INC.
                   CONSOLIDATED STATEMENTS OF EARNINGS
                  (In thousands, except per share data)

                                          For the Years Ended December 31,
                                          2005     2004    Change   Percent
                                           (Unaudited)
  INTEREST INCOME
     Loans                               $64,593  $36,822  $27,771    75.4%
     Investment securities - taxable      10,087    8,161    1,926    23.6%
     Investment securities - tax-exempt      821      436      385    88.3%
     Federal funds sold and other
      temporary investments                  234       30      204   680.0%
        Total interest income             75,735   45,449   30,286    66.6%

  INTEREST EXPENSE
     Deposits                             14,024    9,223    4,801    52.1%
     Federal funds purchased                 925      194      731   376.8%
     Borrowings                            5,992    2,157    3,835   177.8%
     Securities sold under repurchase
      agreements                             107      -        107      -
     Junior subordinated deferrable
      interest debentures                  1,721    1,189      532    44.7%
        Total interest expense            22,769   12,763   10,006    78.4%

        Net interest income               52,966   32,686   20,280    62.0%
     Provision for loan losses             3,838    1,850    1,988   107.5%
        Net interest income after
         provision for loan losses        49,128   30,836   18,292    59.3%

  NONINTEREST INCOME
     Service charges on deposit accounts   9,185    6,931    2,254    32.5%
     Mortgage servicing revenue            1,137      888      249    28.0%
     Net (loss) gain on sale of
      securities                            (169)     114     (283) -248.2%
     Net gain on sale of loans             9,543    9,213      330     3.6%
     Other noninterest income              4,966    1,937    3,029   156.4%
        Total noninterest income          24,662   19,083    5,579    29.2%

  NONINTEREST EXPENSE
     Salaries and benefits                33,855   23,798   10,057    42.3%
     Occupancy                             7,809    5,596    2,213    39.5%
     Other noninterest expense            15,976   11,667    4,309    36.9%
        Total noninterest expense         57,640   41,061   16,579    40.4%

        Earnings before provision for
         income tax expense               16,150    8,858    7,292    82.3%
     Provision for income tax expense      5,414    2,808    2,606    92.8%

        Net earnings                     $10,736   $6,050   $4,686    77.5%

  Earnings per common share:
      Basic                                $1.35    $1.15    $0.20    17.4%
      Diluted                              $1.31    $1.11    $0.20    18.0%

  Dividends per common share               $0.32    $0.28    $0.04    14.3%

  Weighted average shares outstanding -
   basic                                   7,930    5,264    2,666    50.6%
  Weighted average shares outstanding -
   diluted                                 8,184    5,442    2,742    50.4%


                      TEXAS UNITED BANCSHARES, INC.
                    CONSOLIDATED FINANCIAL HIGHLIGHTS
              (Dollars in thousands, except per share data)

                                            Quarterly
                                         2005                      2004
                        4th Qtr   3rd Qtr    2nd Qtr    1st Qtr   4th Qtr
                                           (Unaudited)
  EARNINGS
    Net interest income $14,723   $13,754    $12,942    $12,059   $11,381
    Provision for loan
     losses               1,040     1,035      1,041        722       700
    Noninterest income    5,753     6,420      5,246      6,297     4,806
    Noninterest expense  15,368    15,202     13,197     13,439    13,426
    Net earnings          2,632     2,690      2,612      2,802     1,429
    Basic earnings per
     share                $0.32     $0.34      $0.33      $0.36     $0.18
    Diluted earnings
     per share            $0.31     $0.34      $0.33      $0.35     $0.18
    Weighted average
     basic shares
     outstanding
     (in 000s)            8,298     7,815      7,805      7,798     7,776
    Weighted average
     diluted shares
     outstanding
     (in 000s)            8,555     7,979      7,964      7,968     7,953

  PERFORMANCE RATIOS
    Return on average
     assets                0.77%     0.84%      0.86%      0.97%     0.50%
    Return on average
     equity                8.87%    10.01%      9.88%     10.66%     5.40%
    Net interest margin    4.94%     4.85%      4.88%      4.87%     4.64%
    Efficiency ratio,
     gross                75.11%    75.12%     73.02%     73.42%    82.94%
    Full-time equivalent
     employees              628       573        595        557       522

  CAPITAL
    Average equity to
     average assets        8.72%     8.41%      8.75%      9.08%     9.34%
    Tier 1 leverage
     capital ratio         8.31%     6.92%      6.97%      7.10%     7.08%
    Book value per
     share               $14.95    $13.89     $13.75     $13.35    $13.44
    Cash dividend per
     share                 0.08     $0.08      $0.08      $0.08     $0.07

  ASSET QUALITY
    Gross charge-offs    $1,282      $833       $857       $684      $621
    Net charge-offs      $1,081      $584       $589       $476      $456
    Net charge-offs to
     average loans         0.47%     0.28%      0.30%      0.27%     0.27%
    Allowance for loan
     losses              $9,592    $7,835     $7,383     $6,931    $6,685
    Allowance for loan
     losses to total
     loans                 0.93%     0.92%      0.94%      0.96%     0.96%
    Nonperforming loans  $4,716    $4,953     $4,765     $3,208    $3,011
    Other real estate
     and repossessed
     assets              $2,360    $1,167       $896       $641      $906
    Nonperforming assets
     to total assets       0.46%     0.49%      0.46%      0.33%     0.34%

  END OF PERIOD BALANCES
    Loans, including
     loans held for
     sale            $1,031,838  $847,861   $786,675   $725,724  $693,548
    Total earning
     assets (before
     allowance for
     loan losses)     1,334,632 1,102,692  1,084,723  1,035,947   999,194
    Total assets      1,552,457 1,255,522  1,242,003  1,180,166 1,141,366
    Deposits          1,121,420   880,728    902,356    880,306   880,075
   Shareholders'
    equity              137,913   108,986    107,445    104,177   104,812

  AVERAGE BALANCES
    Loans, including
     loans held for
     sale              $914,300  $822,938   $754,879   $699,763  $679,149
    Total earning
     assets (before
     allowance for
     loan losses)     1,183,377 1,124,095  1,063,221  1,004,551   980,258
    Total assets      1,350,593 1,267,287  1,212,045  1,157,872 1,128,209
    Deposits            954,579   885,055    895,889    884,117   890,913
    Shareholders'
     equity             117,756   106,598    106,065    105,190   105,320


                                        For the Years Ended
                                    2005                 2004
                                 (Unaudited)


  EARNINGS
    Net interest income           $52,966              $32,686
    Provision for loan losses       3,838                1,850
    Noninterest income             24,662               19,083
    Noninterest expense            57,640               41,061
    Net earnings                   10,736                6,050
    Basic earnings per share        $1.35                $1.15
    Diluted earnings per share      $1.31                $1.11
    Weighted average basic
     shares outstanding (in 000s)   7,930                5,264
    Weighted average diluted
     shares outstanding (in 000s)   8,184                5,442

  PERFORMANCE RATIOS
    Return on average assets         0.87%                0.74%
    Return on average equity         9.80%                9.97%
    Net interest margin              4.92%                4.44%
    Efficiency ratio, gross         74.09%               79.49%
    Full-time equivalent employees    628                  522

  CAPITAL
    Average equity to average
     assets                          8.93%                7.43%
    Tier 1 leverage capital ratio    9.20%                7.08%
    Book value per share           $14.95               $13.44
    Cash dividend per share         $0.32                $0.28

  ASSET QUALITY
    Gross charge-offs              $3,656               $1,706
    Net charge-offs                $2,730                 $964
    Net charge-offs to average
     loans                           0.35%                0.19%
    Allowance for loan losses      $9,592               $6,685
    Allowance for loan losses
     to total loans                  0.93%                0.96%
    Nonperforming loans            $4,716               $3,011
    Other real estate and
     repossessed assets            $2,360                 $906
    Nonperforming assets to
     total assets                    0.46%                0.34%

  END OF PERIOD BALANCES
    Loans, including loans
     held for sale             $1,031,838             $693,548
    Total earning assets
     (before allowance for
     loan losses)               1,334,632              999,194
    Total assets                1,552,457            1,141,366
    Deposits                    1,121,420              880,075
    Shareholders' equity          137,913              104,812

  AVERAGE BALANCES
    Loans, including loans
     held for sale               $783,512             $493,490
    Total earning assets
     (before allowance for
     loan losses)               1,076,767              735,847
    Total assets                1,227,298              816,705
    Deposits                      887,786              639,850
    Shareholders' equity          109,591               60,663


                        TEXAS UNITED BANCSHARES, INC.
                       CONSOLIDATED YIELD/RATE ANALYSIS
                                 (Unaudited)

                                    For the Three Months Ended December 31,
                                                    2005
                                       Average      Interest     Average
                                     Outstanding    Earned /     Yield /
                                       Balance        Paid       Rate
                                           (Dollars in Thousands)
  ASSETS
  Interest-earning assets:
    Total loans                         $914,300     $19,141     8.31%
    Taxable securities                   223,373       2,093     3.72%
    Tax-exempt securities                 28,729         292     4.03%
    Federal funds sold                    16,975         177     4.14%
         Total interest-earning assets 1,183,377      21,703     7.28%
    Less: allowance for loan
     losses (ALL)                         (8,910)
    Total interest-earning assets, net
     of ALL                            1,174,467
  Noninterest-earning assets             176,126
         Total assets                 $1,350,593

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Interest-bearing liabilities:
    Interest-bearing demand deposits    $200,017        $612     1.21%
    Saving and money market accounts     196,576         894     1.80%
    Time deposits                        312,928       2,592     3.29%
     Federal funds purchased               7,709          73     3.76%
    Junior subordinated deferrable
     interest debentures                  29,548         550     7.38%
    Repurchase agreements                  5,600          32     2.27%
    Other borrowings                     218,339       2,227     4.05%
         Total interest-bearing
          liabilities                    970,717       6,980     2.85%
  Noninterest-bearing liabilities:
    Noninterest-bearing demand deposits  245,058
    Other liabilities                     17,062
         Total liabilities             1,232,837
         Shareholders' equity            117,756
        Total liabilities and
         shareholders' equity         $1,350,593

  Net interest income                                $14,723

  Net interest spread                                            4.42%
  Net interest margin                                            4.94%


                      TEXAS UNITED BANCSHARES, INC.
                     CONSOLIDATED YIELD/RATE ANALYSIS
                               (Unaudited)

                                 For the Years Ended December 31,
                                  2005                       2004
                     Average   Interest Average  Average    Interest Average
                   Outstanding Earned / Yield / Outstanding Earned / Yield /
                     Balance   Paid     Rate     Balance    Paid     Rate
                                   (Dollars in Thousands)
  ASSETS
  Interest-earning
   assets:
    Total loans     $783,512  $64,593  8.24%    $493,490   $36,822   7.46%
    Taxable
     securities      267,599   10,087  3.77%     231,526     8,161   3.52%
    Tax-exempt
     securities       19,653      821  4.18%       8,719       436   5.00%
    Federal funds
     sold              6,003      234  3.90%       2,112        30   1.42%
         Total
          interest-
          earning
          assets   1,076,767   75,735  7.03%     735,847    45,449   6.18%
    Less: allowance
     for loan losses
     (ALL)            (7,386)                     (4,654)
    Total interest-
     earning assets,
     net of ALL    1,069,381                     731,193
  Noninterest-earning
   assets            157,917                      92,321
         Total
          assets  $1,227,298                    $823,514

  LIABILITIES AND
   SHAREHOLDERS'
   EQUITY
  Interest-bearing
   liabilities:
    Interest-bearing
     demand
      deposits      $213,106   $2,746  1.29%    $186,079    $2,414   1.30%
    Saving and money
     market accounts 163,332    2,378  1.46%     117,148     1,352   1.15%
    Time deposits    305,627    8,900  2.91%     222,447     5,457   2.45%
    Federal funds
     purchased        24,689      925  3.75%      10,579       194   1.83%
    Junior
     subordinated
     deferrable
     interest
     debentures       20,527    1,721  8.38%      13,654     1,189   8.71%
    Repurchase
     agreements        6,016      107  1.78%           -         -   0.00%
    Other borrowings 165,353    5,992  3.62%      70,813     2,157   3.05%
        Total
         interest-
         bearing
         liabilities 898,650   22,769  2.53%     620,720    12,763   2.06%
  Noninterest-bearing
   liabilities:
    Noninterest-
     bearing demand
     deposits        205,721                     131,906
    Other
     liabilities      13,336                      10,639
       Total
        liabilities 1,117,707                    763,265
       Shareholders'
         equity       109,591                     60,249
        Total
         liabilities
         and
         shareholders'
         equity    $1,227,298                   $823,514

  Net interest income         $52,966                      $32,686

  Net interest spread                  4.50%                         4.12%
  Net interest margin                  4.92%                         4.44%


  Contact:
   Jeffrey A. Wilkinson
   Executive Vice President and Chief Financial Officer
   979-968-8451
   

First Call Analyst: 

FCMN Contact: [e-mail] 

DATASOURCE: Texas United Bancshares, Inc.



CONTACT:  Jeffrey A. Wilkinson, Executive Vice President and Chief

Financial Officer of Texas United Bancshares, Inc., [phone],

Copyright