Texas United Bancshares (NASDAQ:TXUI)
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Texas United Bancshares Reports 2004 Fourth Quarter Net Income of
$1.4 Million, Up 20.2%
Fiscal Year 2004 Net Income Up 15.4%
LA GRANGE, Texas, Feb. 17 /PRNewswire-FirstCall/ -- Texas United Bancshares,
Inc. (NASDAQ:TXUI), a growing community banking organization located in central
and south central Texas and in areas north and south of the Dallas-Fort Worth
metroplex, reported net income for the fourth quarter of 2004 of $1.4 million,
an increase of 20.2 percent compared with $1.2 million for the fourth quarter
of 2003. Diluted earnings per share for the fourth quarter of 2004 were $0.18
compared with $0.29 for the same period in 2003. Per share results reflect the
sale of 2,300,000 shares of common stock through a public offering in August
2004 and the issuance of approximately 1,457,000 shares in connection with the
acquisition of GNB Bancshares, Inc. in October 2004. Weighted average diluted
shares outstanding for the fourth quarter of 2004 were 7,953,000, an increase
of 91.5 percent compared with 4,154,000 weighted average diluted shares
outstanding for the same period in 2003.
For the year 2004, Texas United reported net income of $6.1 million, up 15.4
percent compared with $5.2 million reported for 2003. Diluted earnings per
share for 2004 were $1.11 compared with $1.26 for 2003, reflecting the shares
of common stock issued in connection with the aforementioned public offering
and acquisition of GNB Bancshares. Weighted average diluted shares outstanding
for 2004 were 5,442,000, a 31.2 percent increase compared with 4,149,000
weighted average shares outstanding for 2003.
Don Stricklin, President and CEO, commented, "2004 was a year of growth and
opportunity. We surpassed the $1.0 billion asset mark at year-end 2004, the
result of our recent branch and bank acquisitions combined with strong organic
loan growth in several lines of business.
"Our reputation as a knowledgeable and responsive commercial lender was
enhanced by the addition of four seasoned commercial lenders in 2004, as well
as a specialist in SBA loans. Commercial loans, including commercial
mortgages, outstanding totaled $266 million at December 31, 2004, an increase
of $87 million, or 48.7 percent year-over-year. With the acquisition of
Community Home Loan, Inc. last February, the opening of three new mortgage loan
offices, and the hiring of 14 experienced mortgage lenders, our mortgage
banking business has also become a significant contributor to our revenue
stream.
"The GNB Bancshares acquisition signals our entry into areas surrounding the
Dallas-Fort Worth metroplex, reflecting our strategy of expansion into bedroom
communities of larger metropolitan areas. Our geographic footprint now extends
into some of the fastest growing suburban metropolitan markets in Texas. 2004
was a strong growth year for us, but looking forward, we are excited about the
opportunities to expand our services through our network of banking locations
and talented team of lending professionals."
Total revenue, comprised of net interest income and non-interest income, was
$16.2 million for the fourth quarter of 2004, an increase of 57.0 percent
compared with the $10.3 million earned in the prior-year period. Net interest
income, before the provision for loan losses, for the fourth quarter of 2004
increased 74.8 percent to $11.6 million compared with $6.6 million for the same
period in 2003, primarily as a result of a 72.6 percent increase in average
earning assets, partially offset by a five basis point decline in the net
interest margin to 4.70 percent. The linked quarter net interest margin was
4.42 percent. Mr. Stricklin noted, "Net interest income trends were favorably
impacted by our recent acquisition of GNB; we added quality earning assets and
low-cost core deposits that improved our consolidated margin relative to the
third quarter of 2004. The increase in interest rates has also had a positive
impact on our margin, and we should continue to benefit from a rising interest
rate environment going forward."
Non-interest income for the fourth quarter of 2004 was $4.6 million, an
increase of 25.2 percent compared with $3.7 million for the fourth quarter of
2004. The increase primarily reflected a $1.9 million gain on the sale of
mortgage loans by Community Home Loan, Inc., partially offset by a $523,000
reduction in mortgage servicing revenue during the quarter.
Total revenue was $51.8 million for the 2004 fiscal year, an increase of 29.3
percent compared with the $40.0 million earned during 2003. Net interest
income, before the provision for loan losses, for 2004 increased 28.0 percent
to $33.6 million compared with $26.2 million for 2003, primarily reflecting
35.1 percent growth in average earning assets, partially offset by a 25 basis
point decline in the net interest margin to 4.56 percent. Non-interest income
for 2004 was $18.2 million compared with $13.8 million for 2003, an increase of
31.8 percent. The increase primarily reflects a $7.5 million gain on the sale
of mortgage loans by Community Home Loan, Inc., partially offset by a $1.4
million decrease in mortgage servicing revenue during the year and a $1.1
million decrease in gains on the sale of securities.
Non-interest expense for the fourth quarter of 2004 was $13.4 million compared
with $8.2 million for the same period in 2003, an increase of 64.7 percent.
Employee compensation and benefits, the largest component of non-interest
expense, grew 86.0 percent. Mr. Stricklin commented, "Our FTE employee base
grew 66.8 percent due to our acquisitions and our commercial and mortgage
banking expansion. We anticipate efficiency improvements as loan production
grows into the infrastructure we have added." The efficiency ratio increased
to 82.94 percent for the fourth quarter of 2004 compared with 79.09 percent for
the same period in 2003.
Non-interest expense for the 2004 fiscal year was $41.1 million compared with
$30.0 million for 2003, an increase of 36.9 percent. The increase was
primarily due to a 42.6 percent increase in employee compensation and benefits.
Texas United's efficiency ratio increased to 79.49 percent for 2004 compared
with 77.33 percent for 2003.
Mr. Stricklin noted that asset quality remained strong and stable throughout
2004. "Despite an 80.5 percent increase in loans outstanding for the year," he
added, "net charge-offs actually decreased by 58 percent. During the fourth
quarter, we charged off $621,000 in problem assets, which resulted in elevated
charge-offs levels in that quarter." Net charge-offs were $964,000 or 0.19
percent of average loans for fiscal year 2004, compared with $2.3 million or
0.61 percent of average loans for fiscal year 2003. Nonperforming assets were
0.33 percent of total assets at December 31, 2004, compared with 0.35 percent
at December 31, 2003. The loan loss allowance was 0.96 percent of total loans
at December 31, 2004.
Total assets were $1.1 billion at year-end 2004, an increase of $503.7 million,
or 79.0 percent, from year-end 2003. Loans rose $309.2 million, or 80.5
percent, during the same time period; of this total, approximately 30 percent
represented organic growth. Deposits increased $378.9 million, or 75.6
percent, of which approximately 18 percent represented organic growth. Texas
United continues to grow its low-cost deposit base; at year-end 2004,
non-interest bearing deposits represented 21.3 percent of total deposits
compared with 19.2 percent at year-end 2003.
Shareholders' equity at December 31, 2004 was $104.8 million, an increase of
$66.8 million, or 175.9 percent compared with 38.0 million at December 31,
2003. The increase reflects the issuance of 2,300,000 shares of common stock
in the August 2004 public offering, which yielded net proceeds of $36.1
million, as well as the issuance of approximately 1,457,000 shares of common
stock in connection with the acquisition of GNB and $6.1 million of 2004
earnings. Texas United's leverage ratio at December 31, 2004 was 9.34 percent,
compared with 5.85 percent at December 31, 2003.
About the Company
Texas United Bancshares, Inc. is a registered financial holding company listed
on the Nasdaq National Market under the symbol "TXUI". Texas United operates
through two wholly owned subsidiary banks, State Bank and GNB Financial, n.a.
and, offers a complete range of banking services through 20 full service State
Bank banking centers located in the greater central and south central Texas
area and seven full service GNB Financial banking centers located in
Gainesville, Denton and Ennis, Texas. In addition, State Bank has 18 mortgage
loan production offices located in Houston, San Antonio and Austin through the
Bank and its wholly-owned subsidiary, Community Home Loan, Inc.
Forward-Looking Statements
Except for historical information, certain of the matters discussed in this
news release may constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties, including, but not limited to, the following: general business
and economic conditions in the markets Texas United serves may be less
favorable than expected which could decrease the demand for loan, deposit and
other financial services and increase loan delinquencies and defaults; changes
in the interest rate environment which could reduce Texas United's net interest
margin; acquisition integration may be more difficult than anticipated;
legislative or regulatory developments including changes in laws concerning
taxes, banking, securities, insurance and other aspects of the financial
securities industry; competitive factors may increase, including product and
pricing pressures among financial services organizations; and changes in
accounting principles, policies or guidelines. All written or oral
forward-looking statements are expressly qualified in their entirety by these
cautionary statements. Please also read the additional risks and factors
described from time to time in Texas United's reports and registration
statements filed with the Securities and Exchange Commission. We disclaim any
obligation to update or revise any forward-looking statements contained in this
release.
Texas United Bancshares
Fourth Quarter 2004 Results
TEXAS UNITED BANCSHARES
CONSOLIDATED FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
Quarterly
2004 2004 2004 2004 2003
4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
EARNINGS
Net interest income $11,571 $8,191 $7,148 $6,664 $6,621
Provision for loan
losses 700 700 300 150 800
NonInterest income 4,616 5,008 4,667 3,904 3,687
NonInterest expense 13,426 10,289 9,196 8,150 8,153
Net income 1,429 1,561 1,495 1,565 1,189
Basic earnings per
share 0.18 0.30 0.37 0.39 0.30
Diluted earnings per
share 0.18 0.29 0.36 0.37 0.29
Weighted average
shares outstanding 7,776 5,249 4,020 4,010 4,000
Weighted average
diluted shares
outstanding 7,953 5,421 4,200 4,193 4,154
PERFORMANCE RATIOS
Return on average
assets 0.50% 0.76% 0.83% 0.97% 0.75%
Return on average
equity 5.40% 10.35% 15.75% 15.99% 12.86%
Net interest margin 4.70% 4.42% 4.46% 4.63% 4.75%
Efficiency ratio 82.94% 77.95% 78.01% 77.69% 79.09%
Full-time equivalent
employees 522 409 377 369 313
CAPITAL
Average equity to
average assets 9.34% 7.39% 5.30% 6.28% 5.85%
Tier 1 leverage
capital ratio 7.08% 9.07% 6.04% 6.46% 6.46%
Tier 1 risk-based
capital ratio 10.40% 13.53% 8.88% 9.61% 9.54%
Total risk-based
capital ratio 11.31% 14.39% 9.74% 10.56% 10.47%
Book value per share $13.44 $12.43 $9.34 $10.17 $9.49
Cash dividend per
share 0.07 0.07 0.07 0.07 0.07
ASSET QUALITY
Gross charge-offs $621 $449 $392 $244 $1,007
Net charge-offs
(recoveries) 456 287 271 (50) 803
Net charge-offs
(recoveries) to
average loans 0.63% 0.12% 0.26% (0.01)% 0.85%
Allowance for loan
losses $6,685 $4,535 $4,122 $4,093 $3,893
Allowance for loan
losses to total
loans 0.96% 0.91% 0.95% 1.01% 1.01%
Nonperforming loans $2,970 $1,978 $976 $2,073 $1,988
Other real estate
and repossessed
assets 843 586 1,672 333 273
Nonperforming assets
to total assets 0.33% 0.31% 0.35% 0.37% 0.35%
END OF PERIOD BALANCES
Loans $693,548 $498,632 $435,128 $406,840 $384,331
Total earning assets
(before allowance) 999,194 754,385 676,414 589,071 568,878
Total assets 1,141,366 839,327 751,631 658,720 637,684
Deposits 880,075 688,899 567,440 536,749 501,136
Shareholders' equity 104,812 78,653 37,570 40,845 37,987
AVERAGE BALANCES
Loans $679,149 $476,826 $424,805 $391,820 $376,623
Total earning assets
(before allowance) 980,258 736,516 645,214 578,730 568,074
Total assets 1,128,209 811,834 716,168 650,610 632,285
Deposits 890,913 664,560 561,454 517,475 505,431
Shareholders' equity 105,320 59,999 37,960 39,373 36,970
Texas United Bancshares
Fourth Quarter 2004 Results
TEXAS UNITED BANCSHARES
CONSOLIDATED FINANCIAL HIGHLIGHTS (continued)
(dollars in thousands, except per share data)
(Unaudited)
Years ended December 31,
2004 2003
EARNINGS
Net interest income $33,574 $26,223
Provision for loan losses 1,850 2,900
NonInterest income 18,195 13,804
NonInterest expense 41,061 29,992
Net income 6,050 5,241
Basic earnings per share 1.15 1.31
Diluted earnings per share 1.11 1.26
Weighted average shares
outstanding 5,264 3,984
Weighted average diluted shares
outstanding 5,442 4,149
PERFORMANCE RATIOS
Return on average assets 0.74% 0.86%
Return on average equity 9.97% 14.12%
Net interest margin 4.56% 4.81%
Efficiency ratio 79.49% 77.33%
Full-time equivalent employees 522 313
CAPITAL
Average equity to average assets 7.43% 6.07%
Tier 1 leverage capital ratio 7.08% 6.46%
Tier 1 risk-based capital ratio 10.40% 9.54%
Total risk-based capital ratio 11.31% 10.47%
Book value per share $13.44 $9.49
Cash dividend per share 0.28 0.28
ASSET QUALITY
Gross charge-offs $1,706 $3,238
Net charge-offs (recoveries) 964 2,303
Net charge-offs (recoveries) to
average loans 0.19% 0.61%
Allowance for loan losses $6,685 $3,893
Allowance for loan losses to total
loans 0.96% 1.01%
Nonperforming loans $2,970 $1,988
Other real estate and repossessed
assets 843 273
Nonperforming assets to total
assets 0.33% 0.35%
END OF PERIOD BALANCES
Loans $693,548 $384,331
Total earning assets (before
allowance) 999,194 568,878
Total assets 1,141,366 637,684
Deposits 880,075 501,136
Shareholders' equity 104,812 37,987
AVERAGE BALANCES
Loans $493,490 $376,988
Total earning assets (before
allowance) 735,847 544,778
Total assets 816,705 611,645
Deposits 639,850 486,441
Shareholders' equity 60,663 37,112
Texas United Bancshares
Fourth Quarter 2004 Results
TEXAS UNITED BANCSHARES
CONSOLIDATED REPORTS OF INCOME
(dollars in thousands)
THREE MONTHS THREE MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED
December 31, December 31, December 31, December 31,
2004 2003 2004 2003
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
INTEREST INCOME
Loans $13,037 $7,289 $37,691 $30,295
Investment securities 2,685 1,748 8,616 6,315
Federal funds sold 16 21 30 91
Total interest income 15,738 9,058 46,337 36,701
INTEREST EXPENSE
Deposits 3,079 1,744 9,223 7,487
Federal funds purchased 75 13 194 128
Junior subordinated
deferrable interest
debentures 391 192 1,189 746
Borrowings 622 488 2,157 2,117
Total interest expense 4,167 2,437 12,763 10,478
Net interest income 11,571 6,621 33,574 26,223
Provision for loan
losses 700 800 1,850 2,900
Net interest income
after provision for
loan losses 10,871 5,821 31,724 23,323
NON INTEREST INCOME
Service charges on
deposit accounts 1,735 1,737 6,931 6,753
Mortgage servicing
revenue 173 696 888 2,247
Net gain on sales
of securities --- 3 114 1,244
Net gain on sale of
loans from CHL, Inc. 1,946 --- 7,452 ---
Other non interest
income 762 1,251 2,810 3,560
Total non interest
income 4,616 3,687 18,195 13,804
NON INTEREST EXPENSE
Salaries and benefits 8,138 4,375 23,798 16,689
Occupancy 2,177 1,142 5,596 4,621
Other non interest
expense 3,111 2,636 11,667 8,682
Total non interest
expense 13,426 8,153 41,061 29,992
Income before
provision for
income tax expense 2,061 1,355 8,858 7,135
Provision for income
tax expense 632 166 2,808 1,894
Net income $1,429 $1,189 $6,050 $5,241
Texas United Bancshares
Fourth Quarter 2004 Results
TEXAS UNITED BANCSHARES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
DECEMBER 31, DECEMBER 31,
2004 2003
(Unaudited)
ASSETS
Cash and due from banks $36,752 $17,268
Federal funds sold 4,015 ---
Total cash and cash equivalents 40,767 17,268
Securities available for sale, at fair value 301,631 184,547
Total loans, including loans held for sale 693,548 384,331
Allowance for loan losses (6,685) (3,893)
Total loans, net 686,863 380,438
Premises and equipment, net 39,730 25,802
Accrued interest receivable 5,214 2,984
Goodwill 40,117 9,073
Core deposit intangibles, net 5,341 393
Mortgage servicing rights, net 4,698 4,475
Other assets 17,005 12,704
Total assets $1,141,366 $637,684
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing $187,454 $96,337
Interest-bearing 692,621 404,799
Total deposits 880,075 501,136
Securities sold under agreement to
repurchase 6,291 784
Federal funds purchased 15,125 6,891
Junior subordinated deferrable interest
debentures 17,520 12,365
Borrowings 105,940 71,875
Other liabilities 11,603 6,646
Total liabilities 1,036,554 599,697
SHAREHOLDERS' EQUITY
Common stock 7,802 4,008
Additional paid-in capital 75,935 16,911
Retained earnings 21,921 17,422
Accumulated other comprehensive income (729) (237)
Less treasury stock, at cost (117) (117)
Total shareholders' equity 104,812 37,987
Total liabilities and shareholders'
equity $1,141,366 $637,684
DATASOURCE: Texas United Bancshares, Inc.
CONTACT: Tom Adams of Texas United Bancshares, Inc., +1-979-968-7261