Exhibit 99.1
Amegy Bank of Texas Continues Growth in First Quarter
HOUSTON--(BUSINESS WIRE)--April 25, 2005--Southwest Bancorporation
of Texas, Inc., parent of Amegy Bank N.A. (NASDAQ:ABNK)
1st Quarter Highlights
-- Diluted earnings per common share were $0.24 for the quarter,
up 8.7% over the prior year; unchanged linked quarter
-- Diluted earnings per common share before merger-related
expenses, name change expenses, gains on sales of certain
assets, and intangible amortization expense was $0.26 for the
quarter, up 10%, adjusted, from the prior year
-- Total revenue increased 22% over prior year; up 1.6% linked
quarter
-- Noninterest income increased 31% over prior year; up 7.4%
linked quarter
-- Noninterest expenses before merger-related expenses, name
change expenses, and intangible amortization expense declined
$543,000 linked quarter
-- Average loans held for investment increased 27% over prior
year; 15% annualized on a linked quarter basis
-- Average deposits grew 22% over prior year; up 0.1% linked
quarter; excluding the loss of one large depository
relationship, deposits grew 1.6% linked quarter
-- Average assets increased 26% over prior year to $7.56 billion;
up 3.2% linked quarter
-- Asset quality indicators remain positive; nonperforming assets
were 48 basis points at quarter end
-- Successful operational conversion with Klein Bank occurred on
March 7
-- Veteran Amegy banker Debbie Innes assumes additional
leadership role as head of retail group
-- Name change enthusiastically launched; holding company name
change to Amegy Bancorporation, Inc. anticipated at May 4
shareholder meeting
Southwest Bancorporation of Texas, Inc., parent of Amegy Bank N.A.
(NASDAQ:ABNK), today reported first quarter results that reflect the
successful continuation of its strategy to build its core businesses.
For the quarter ended March 31, 2005, net income was $16.9
million, or $0.24 per diluted common share, compared to $15.3 million
for the quarter ended March 31, 2004, or $0.22 per diluted common
share. Adjusted for merger-related and name change expenses, and gains
on sales of certain assets, net income would have been $18.9 million,
or $0.26 per diluted common share, an increase of 10% from the same
period last year. (Exhibit IV presents reconcilements of all non-GAAP
disclosures.)
Return on average assets and return on average common
shareholders' equity for the three months ended March 31, 2005 were
0.91% and 11.66%, respectively, compared to 1.02% and 12.04%,
respectively, for the same period in 2004. Adjusted for merger-related
and name change expenses, and gains on sales of certain assets, return
on average assets and return on average common shareholders' equity
would have been 0.94% and 12.03% respectively.
Total revenue for the first quarter of 2005 was $91.0 million, an
increase of 22% over the same period in 2004 and up 1.6% linked
quarter. Average loans held for investment were $4.58 billion, a 27%
increase over the first quarter of 2004 and an increase of 3.8% linked
quarter or 15% on an annualized basis. Average deposits were $5.46
billion, an increase of 22% over the comparable period in 2004 and
0.1% linked quarter. An account with average deposit balances of $155
million in the fourth quarter of 2004 exited the bank in the first
quarter of 2005 due to a change in the client's business
relationships. This account represented the highest priced deposit
relationship in the bank and these funds were replaced at a lower
cost. Excluding this account, average deposits grew $86.2 million
linked quarter, up 1.6%. Average assets increased to $7.56 billion, a
26% increase from the first quarter of 2004 and an increase of 3.2%
linked quarter.
"As I reflect back over the past two years, I am very pleased with
our progress," said Paul Murphy, Chief Executive Officer. "First of
all, our core growth has been exceptional. Additionally, we
accomplished three strategic mergers with great banks and increased
our branch network from 33 to more than 75 branches in Texas' two
largest cities where we believe strong opportunities exist for our
type of banking. While important to our strategic growth, these
activities have had a cost in short term merger-related expenses, core
deposit intangible amortization expense, and in higher interest
expense. However, the results this quarter from our focus on merger
integration, expense management and deposit growth are meeting our
expectations. We believe we are very well-positioned for the future."
Net Interest Income
Net interest income increased to $62.2 million, or 18%, for the
first quarter of 2005 over the same period a year earlier and
decreased 0.9% linked quarter. The taxable-equivalent net interest
margin decreased 4 basis points linked quarter to 3.87%. The yield on
the loan portfolio increased by 31 basis points and the yield from the
securities portfolio increased 9 basis points from the fourth quarter
of 2004. Cost of funds, including demand deposits, was 147 basis
points for the quarter, up 28 basis points linked quarter.
"Our lending capabilities are fully engaged and we see deposit
growth as key. We are very pleased that, in addition to treasury
management, Debbie Innes will head up our retail group as we continue
the growth in this area since its successful launch six years ago. Her
track record has been outstanding and the team she has built is
extraordinary. We are looking forward to having her enthusiasm and
dedication in this expanded role," said Scott McLean, President. "Loan
growth was fairly well distributed among the lending groups with the
primary growth in the real estate and the commercial and industrial
groups. We also are delighted with our team in the Dallas-Fort Worth
Metroplex, which has grown loans outstanding to over $400 million at
quarter end. The lending and treasury management teams are making some
excellent headway in that market."
The fixed rate portion of the loan portfolio continues to decline
both in percentage and in dollar terms. Since June 2004, when it was
33% of the portfolio, the fixed rate portion of the loan portfolio has
declined to 30% at March 31, 2005. The shared national credit portion
of the portfolio declined to $755 million during the quarter from $766
million at year-end 2004.
"The banking industry continues to face a challenging environment
due to a flattening yield curve and margin compression and we are no
exception," added Murphy. "Fortunately, our strong sales culture is
enabling us to grow the Bank despite these headwinds."
Noninterest Income
For the three months ended March 31, 2005, noninterest income
totaled $28.8 million, a 31% increase from the same period in 2004 and
a 7.4% increase linked quarter. Service charges on deposit accounts
were $11.3 million, down 12% linked quarter, primarily due to seasonal
factors on balance levels on some major depository accounts, to an
increase in the earnings credit rate, and to lower retail service
charges. Investment services and trust fee income was consistent with
a record fourth quarter of 2004 and was up 21% over prior year. Other
fee income increased 5.7% linked quarter to $7.34 million driven by
gains in retail services, loan commitment and servicing fees. Other
operating income increased due to an $863,000 gain on the sale of the
Bank's interest in the PULSE network and a gain on the sale of an
unused drive-through facility in downtown Houston of $1.2 million.
Noninterest Expenses
Noninterest expenses before merger-related and name change
expenses and intangible amortization expense declined $543,000 linked
quarter. Adjusting for merger-related and name change expenses and
intangible amortization expense, first quarter expenses would have
been $59.1 million, down from fourth quarter adjusted expenses of
$59.6 million. Core deposit intangible amortization expenses were $2.2
million in the first quarter, unchanged linked quarter. On an as
reported basis, noninterest expenses were $64.2 million for the
quarter compared to $64.0 million linked quarter and $50.1 million in
the first quarter of 2004.
"We are moving toward a more normal operating expense level," said
Randy Meyer, Chief Financial Officer. "As predicted, operating
expenses in occupancy and the other expense categories continue to
decline as we experience the cost saves anticipated with the Klein
Bank operational merger which was completed on March 7. We anticipate
the $2.2 million core deposit intangible amortization expenses in this
quarter will begin to decline by the fourth quarter of this year. Our
goal is continued improvement as we complete the merger integration
process and right-size our expense run rate to revenue growth rates."
On a taxable-equivalent basis, the efficiency ratio was 66.94% for
the first quarter of 2005 down from 67.83% linked quarter. Adjusted
for merger-related and name change expenses, and gains on sales of
certain assets, the taxable-equivalent efficiency ratio would have
been 65.28% compared to 65.46% on a linked quarter basis.
The effective tax rate for the first quarter 2005 was 28.5%
compared to 24.5% linked quarter.
Asset Quality
Asset quality continued to be a strength during the first quarter.
Nonperforming assets declined to $22.1 million, or 0.48% of loans and
other real estate, compared to $25.1 million, or 0.55% of loans and
other real estate, linked quarter. Allowance for credit losses to
total loans is 1.09% at March 31, 2005, compared to 1.11% linked
quarter. The allowance for loan losses to nonperforming loans was
358.92% at March 31, 2005 compared to 304.50% linked quarter.
Total Loans, Deposits, Investments, Assets, and Equity
Total loans held for investment were $4.61 billion at March 31,
2005, an increase of 24% from the first quarter of 2004 and 1.5% on a
linked quarter basis. Total deposits at March 31, 2005 were $5.81
billion, an increase of 23% from the first quarter of 2004 and 3.3% on
a linked quarter basis. Investment securities were $1.92 billion at
March 31, 2005, an increase of 22% from the first quarter of 2004 and
a decrease of 3.3% linked quarter. At March 31, 2005, total assets
were $7.56 billion, an increase of 24% from the first quarter of 2004
and an increase of 0.7% linked quarter. Total shareholders' equity was
$577.2 million at March 31, 2005 and the Tier 1 leverage ratio was
7.80%.
Southwest Bancorporation of Texas, Inc., the parent company of
Amegy Bank N.A., is the largest independent bank holding company
headquartered in Houston, Texas. The Company focuses on commercial
lending, treasury management and investment services for businesses in
the southwest, private financial management and trust services for
families and individuals, and retail and mortgage banking services.
The Company, with $7.56 billion in assets, has more than 75
full-service branches located throughout the Houston and Dallas
metropolitan areas.
Utilization of Financial and Certain Non-GAAP Financial Measures:
Consolidated financial information and supplemental unaudited data
schedules follow in this release. Exhibits I and II provide additional
information on the net interest margin, including average balances and
average rates for both assets and liabilities for the periods
presented. Exhibit III presents quarterly comparative data. Exhibit IV
presents reconcilements of non-GAAP disclosures. Management believes
that these non-GAAP financial measures provide information useful to
investors in understanding the underlying operational performance of
the Company and facilitates comparisons with the performance of others
in the financial services industry. Because of the significant amount
of deposit base intangible amortization, Management believes the
exclusion of this expense provides investors with consistent and
meaningful comparisons to other financial services firms. Management
also believes the presentation of net interest income on a
tax-equivalent basis ensures comparability of net interest income
arising from both taxable and tax-exempt sources and is consistent
with industry standards. Management uses non-GAAP measures internally
for performance measurement and goal setting for incentive
compensation purposes and for benchmarking purposes in relation to
peer institutions in the banking industry. Although Management
believes the above non-GAAP financial measures enhance investors'
understanding of its business and performance, these non-GAAP
financial measures should not be considered as an alternative to GAAP
basis financial measures.
Conference Call Information:
The Company's earnings release and the related financial
supplements will be available on www.amegybank.com, the Company's
website, prior to the beginning of the conference call.
The conference call for analysts and investors will be Tuesday,
April 26 at 10:30 a.m. CST (11:30 a.m. EST) and may be accessed by
dialing 1-866-837-9781 and referencing "Southwest Bancorporation of
Texas/ABNK First Quarter Earnings Call." The call is also available on
the web http://www.vcall.com/CEPage.asp?ID=91336. The call will be
archived and may be accessed by calling 1-888-266-2081 and entering
678833 as the PIN.
Forward-Looking Statements:
Certain of the matters discussed in this press release may
constitute forward-looking statements for the purposes of the
Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Southwest Bancorporation of Texas, Inc.
(the "Company") to be materially different from future results,
performance or achievements expressed or implied by such
forward-looking statements. The words "expect," "anticipated,"
"intend," "plan," "believe," "seek," "estimate," and similar
expressions are intended to identify such forward-looking statements.
The Company's actual results may differ materially from the results
anticipated in these forward-looking statements due to a variety of
factors, including, without limitation (a) the effects of future
economic conditions on the Company and its customers; (b) the costs
and effects of litigation and of unexpected or adverse outcomes in
such litigation; (c) governmental monetary and fiscal policies, as
well as legislative and regulatory changes; (d) the effect of changes
in accounting policies and practices, as may be adopted by the
regulatory agencies, as well as the Financial Accounting Standards
Board and other accounting standard setters; (e) the risks of changes
in interest rates on the level and composition of deposits, loan
demand, and the values of loan collateral, securities and interest
rate protection agreements, as well as interest rate risks; (f) the
effects of competition from other commercial banks, thrifts, mortgage
banking firms, consumer finance companies, credit unions, securities
brokerage firms, insurance companies, money market and other mutual
funds and other financial institutions operating in the Company's
market area and elsewhere, including institutions operating locally,
regionally, nationally and internationally, together with such
competitors offering banking products and services by mail, telephone,
computer and the internet; (g) technological changes; (h) acquisition
and integration of acquired businesses; (i) the failure of assumptions
underlying the establishment of reserves for loan loses and
estimations of values of collateral in various financial assets and
liabilities; (j) acts of war or terrorism. All written or oral
forward-looking statements attributable to the Company are expressly
qualified in their entirety by these cautionary statements.
Southwest Bancorporation of Texas, Inc.
Consolidated Financial Information (unaudited)
(dollars in thousands, except per share data)
1Q-05 1Q-04 % change
----------- ----------- ---------
Balance sheet averages
- ----------------------
Loans held for investment $4,578,891 $3,601,637 27.1%
Loans held for sale 103,679 95,617 8.4%
Investment securities 1,957,288 1,555,791 25.8%
Securities purchased under resale
agreements - 23,077 -100.0%
Fed funds sold and other interest-
earning assets 44,143 51,512 -14.3%
----------- -----------
Total interest-earning assets 6,684,001 5,327,634 25.5%
----------- -----------
Allowance for loan losses (50,663) (45,770) 10.7%
Cash and due from banks 321,832 323,517 -0.5%
Goodwill 149,863 45,689 228.0%
Core deposit intangibles 26,119 7,934 229.2%
Other assets 429,243 354,793 21.0%
----------- -----------
Total assets $7,560,395 $6,013,797 25.7%
=========== ===========
Noninterest-bearing deposits $1,764,238 $1,491,064 18.3%
Interest-bearing demand deposits 110,646 60,359 83.3%
Savings deposits 2,254,124 1,912,839 17.8%
Time deposits 1,329,170 1,005,189 32.2%
----------- -----------
Total deposits 5,458,178 4,469,451 22.1%
Repurchase agreements and other
borrowed funds 1,479,886 1,008,229 46.8%
Other liabilities 33,073 25,425 30.1%
Shareholders' equity 589,258 510,692 15.4%
----------- -----------
Total liabilities and
shareholders' equity $7,560,395 $6,013,797 25.7%
=========== ===========
Income statement data
- ---------------------
Interest and fees on loans $67,200 $48,862 37.5%
Interest on securities 19,830 14,549 36.3%
Interest on fed funds sold and
other interest-earning assets 284 189 50.3%
----------- -----------
Total interest income 87,314 63,600 37.3%
----------- -----------
Interest on deposits 15,494 8,070 92.0%
Interest on subordinated
debentures 2,516 545 361.7%
Interest on other borrowings 7,104 2,387 197.6%
----------- -----------
Total interest expense 25,114 11,002 128.3%
----------- -----------
Net interest income 62,200 52,598 18.3%
Provision for loan losses 3,100 1,909 62.4%
----------- -----------
Net interest income after
provision 59,100 50,689 16.6%
----------- -----------
Service charges on deposit
accounts 11,347 11,040 2.8%
Investment services 3,605 2,970 21.4%
Other fee income 7,335 4,803 52.7%
Other operating income 6,482 3,049 112.6%
Gain (loss) on sales of
securities, net 2 26 -92.3%
----------- -----------
Total noninterest income 28,771 21,888 31.4%
----------- -----------
Total revenue 90,971 74,486 22.1%
----------- -----------
Salaries and benefits 34,729 27,981 24.1%
Occupancy expenses 10,605 8,258 28.4%
Other expenses 18,839 13,862 35.9%
----------- -----------
Total noninterest expenses 64,173 50,101 28.1%
----------- -----------
Income before income taxes 23,698 22,476 5.4%
Provision for income taxes 6,754 7,189 -6.1%
----------- -----------
Net income $16,944 $15,287 10.8%
=========== ===========
Basic earnings per common share $0.24 $0.22 8.3%
=========== ===========
Diluted earnings per common
share $0.24 $0.22 8.7%
=========== ===========
Dividends per common share $0.03 $0.03 0.0%
=========== ===========
Period end # of shares
outstanding 70,194 68,612 2.3%
Weighted avg # of shares
outstanding (incl CSE's) 71,644 70,282 1.9%
Nonperforming assets
- --------------------
Nonaccrual loans $12,421 $17,671 -29.7%
Accruing loans 90 or more days past
due 1,312 3,044 -56.9%
Restructured loans - - 0.0%
ORE and OLRA 8,378 4,722 77.4%
----------- -----------
Total nonperforming assets $22,111 $25,437 -13.1%
=========== ===========
Changes in allowance for credit
losses
- -------------------------------
Allowance for loan losses -
beginning of period $49,408 $41,611 18.7%
Provision for loan losses 3,100 1,909 62.4%
Charge-offs (4,527) (1,382) 227.6%
Recoveries 1,310 2,329 -43.8%
Allowance acquired through mergers
and acquisitions - 2,116 -100.0%
----------- -----------
Allowance for loan losses - end of
period 49,291 46,583 5.8%
----------- -----------
Reserve for unfunded lending
commitments - beginning of period 1,851 1,397 32.5%
Provision for unfunded lending
commitments 54 91 -40.7%
----------- -----------
Reserve for unfunded lending
commitments - end of period 1,905 1,488 28.0%
----------- -----------
Allowance for credit losses $51,196 $48,071 6.5%
=========== ===========
Ratios
- ------
Return on average assets 0.91% 1.02%
Return on average common
shareholders' equity 11.66% 12.04%
Tier 1 leverage ratio 7.80% 8.35%
Total capital to risk weighted
assets 11.22%(a) 10.76%
Taxable-equivalent yield on
interest-earning assets 5.39% 4.88%
Cost of funds with demand accounts 1.47% 0.81%
Taxable-equivalent net interest
margin 3.87% 4.05%
Taxable-equivalent efficiency
ratio 66.94% 65.16%
Demand deposits to total deposits 32.32% 33.36%
Noninterest income to total income 31.63% 29.39%
Noninterest expense to average
interest-earning assets 3.89% 3.78%
Operating leverage $1,279 $(1,932)
Nonperforming assets to loans and
other real estate 0.48% 0.68%
Net charge-offs to average loans 0.28% (0.11)%
Allowance for credit losses to
total loans 1.09% 1.29%
Allowance for loan losses to
nonperforming loans 358.92% 224.88%
Common stock performance
- ------------------------
Market value of common stock -
Close $18.350 $18.865
Market value of common stock -
High $23.690 $19.955
Market value of common stock - Low $18.020 $18.425
Book value of common stock $8.22 $7.63
Market/book value of common stock 223% 247%
Price/12 month trailing earnings
ratio 19 22
Other data
- ----------
EOP Employees - full time
equivalent 2,133 1,839 16.0%
Period end balances
- -------------------
Loans held for investment $4,605,813 $3,720,950 23.8%
Loans held for sale 110,239 101,944 8.1%
Investment securities 1,919,265 1,576,977 21.7%
Securities purchased under resale
agreements - - 0.0%
Fed funds sold and other interest-
earning assets 63,367 52,678 20.3%
----------- -----------
Total interest-earning assets 6,698,684 5,452,549 22.9%
----------- -----------
Allowance for loan losses (49,291) (46,583) 5.8%
Cash and due from banks 274,842 290,796 -5.5%
Goodwill 150,042 55,094 172.3%
Core deposit intangibles 24,998 11,661 114.4%
Other assets 460,233 352,189 30.7%
----------- -----------
Total assets $7,559,508 $6,115,706 23.6%
=========== ===========
Noninterest-bearing demand
deposits $1,751,106 $1,625,647 7.7%
Interest-bearing demand deposits 114,570 72,009 59.1%
Savings deposits 2,227,186 1,985,622 12.2%
Time deposits 1,712,845 1,019,666 68.0%
----------- -----------
Total deposits 5,805,707 4,702,944 23.4%
Repurchase agreements and other
borrowed funds 1,138,460 854,005 33.3%
Other liabilities 38,153 35,526 7.4%
Shareholders' equity 577,188 523,231 10.3%
----------- -----------
Total liabilities and
shareholders' equity $7,559,508 $6,115,706 23.6%
=========== ===========
FY 04 FY 03 % change
----------- ----------- ---------
Balance sheet averages
- ----------------------
Loans held for investment $3,953,737 $3,266,246 21.0%
Loans held for sale 98,607 95,931 2.8%
Investment securities 1,715,176 1,355,900 26.5%
Securities purchased under resale
agreements 6,350 27,041 -76.5%
Fed funds sold and other interest-
earning assets 47,260 62,538 -24.4%
----------- -----------
Total interest-earning assets 5,821,130 4,807,656 21.1%
----------- -----------
Allowance for loan losses (49,139) (40,546) 21.2%
Cash and due from banks 279,885 264,233 5.9%
Goodwill 77,082 14,169 444.0%
Core deposit intangibles 14,523 3,235 348.9%
Other assets 359,375 301,540 19.2%
----------- -----------
Total assets $6,502,856 $5,350,287 21.5%
=========== ===========
Noninterest-bearing deposits $1,611,636 $1,281,546 25.8%
Interest-bearing demand deposits 81,286 45,493 78.7%
Savings deposits 2,045,793 1,790,072 14.3%
Time deposits 1,105,856 1,004,928 10.0%
----------- -----------
Total deposits 4,844,571 4,122,039 17.5%
Repurchase agreements and other
borrowed funds 1,096,049 722,038 51.8%
Other liabilities 29,047 34,024 -14.6%
Shareholders' equity 533,189 472,186 12.9%
----------- -----------
Total liabilities and
shareholders' equity $6,502,856 $5,350,287 21.5%
=========== ===========
Income statement data
- ---------------------
Interest and fees on loans $217,140 $185,666 17.0%
Interest on securities 65,363 49,610 31.8%
Interest on fed funds sold and
other interest-earning assets 726 968 -25.0%
----------- -----------
Total interest income 283,229 236,244 19.9%
----------- -----------
Interest on deposits 39,830 36,971 7.7%
Interest on subordinated debentures 3,561 516 590.1%
Interest on other borrowings 13,286 8,238 61.3%
----------- -----------
Total interest expense 56,677 45,725 24.0%
----------- -----------
Net interest income 226,552 190,519 18.9%
Provision for loan losses 10,212 11,850 -13.8%
----------- -----------
Net interest income after
provision 216,340 178,669 21.1%
----------- -----------
Service charges on deposit accounts 46,345 40,065 15.7%
Investment services 12,682 9,712 30.6%
Other fee income 22,722 18,326 24.0%
Other operating income 14,768 13,882 6.4%
Gain (loss) on sales of securities,
net (12) 1,224 -101.0%
----------- -----------
Total noninterest income 96,505 83,209 16.0%
----------- -----------
Total revenue 323,057 273,728 18.0%
----------- -----------
Salaries and benefits 117,869 97,176 21.3%
Occupancy expenses 37,657 29,690 26.8%
Other expenses 61,085 46,876 30.3%
----------- -----------
Total noninterest expenses 216,611 173,742 24.7%
----------- -----------
Income before income taxes 96,234 88,136 9.2%
Provision for income taxes 27,691 27,407 1.0%
----------- -----------
Net income $68,543 $60,729 12.9%
=========== ===========
Basic earnings per common share $0.99 $0.89 11.0%
=========== ===========
Diluted earnings per common share $0.97 $0.87 11.0%
=========== ===========
Dividends per common share $0.12 $0.05 140.0%
=========== ===========
Period end # of shares
outstanding 70,096 68,458 2.4%
Weighted avg # of shares
outstanding (incl CSE's) 70,875 69,716 1.7%
Nonperforming assets
- --------------------
Nonaccrual loans
Accruing loans 90 or more days past
due
Restructured loans
ORE and OLRA
Total nonperforming assets
Changes in allowance for credit
losses
- -------------------------------
Allowance for loan losses -
beginning of period $41,611 $35,449 17.4%
Provision for loan losses 10,212 11,850 -13.8%
Charge-offs (9,032) (8,265) 9.3%
Recoveries 3,147 1,151 173.4%
Allowance acquired through mergers
and acquisitions 3,470 1,426 143.3%
----------- -----------
Allowance for loan losses - end of
period 49,408 41,611 18.7%
----------- -----------
Reserve for unfunded lending
commitments - beginning of period 1,397 1,247 12.0%
Provision for unfunded lending
commitments 454 150 202.7%
----------- -----------
Reserve for unfunded lending
commitments - end of period 1,851 1,397 32.5%
----------- -----------
Allowance for credit losses $51,259 $43,008 19.2%
=========== ===========
Ratios
- ------
Return on average assets 1.05% 1.14%
Return on average common
shareholders' equity 12.86% 12.86%
Tier 1 leverage ratio 7.81% 9.15%
Total capital to risk weighted
assets 11.02% 11.90%
Taxable-equivalent yield on
interest-earning assets 4.96% 4.99%
Cost of funds with demand accounts 0.95% 0.94%
Taxable-equivalent net interest
margin 3.99% 4.04%
Taxable-equivalent efficiency ratio 64.41% 62.42%
Demand deposits to total deposits 33.27% 31.09%
Noninterest income to total income 29.87% 30.40%
Noninterest expense to average
interest-earning assets 3.72% 3.61%
Operating leverage $6,460 $2,750
Nonperforming assets to loans and
other real estate
Net charge-offs to average loans 0.15% 0.22%
Allowance for credit losses to
total loans
Allowance for loan losses to
nonperforming loans
Common stock performance
- ------------------------
Market value of common stock -
Close $23.290 $19.425
Market value of common stock - High $25.010 $19.645
Market value of common stock - Low $18.425 $13.795
Book value of common stock
Market/book value of common stock
Price/12 month trailing earnings
ratio
(a) Estimated
EXHIBIT I
Rate Volume
3 Months Ended Analysis
(dollars in thousands)
(unaudited)
Three Months Ended
March 31, 2005
--------------------------------
Average Interest Average
Outstanding Earned/ Yield/
Balance Paid(1) Rate
----------- ---------- ---------
Interest-earning assets:
Loans $4,682,570 $67,413 5.84%
Securities 1,957,288 21,162 4.38
Federal funds sold and other 44,143 284 2.61
----------- ---------- ---------
Total interest-earning assets 6,684,001 88,859 5.39%
---------- ---------
Less allowance for loan losses (50,663)
-----------
6,633,338
Noninterest-earning assets 927,057
-----------
Total assets $7,560,395
===========
Interest-bearing liabilities:
Money market and savings deposits $2,364,770 7,012 1.20%
Time deposits 1,329,170 8,482 2.59%
Repurchase agreements and other
borrowed funds 1,479,886 9,620 2.64
----------- ---------- ---------
Total interest-bearing
liabilities 5,173,826 25,114 1.97%
---------- ---------
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits 1,764,238
Other liabilities 33,073
-----------
Total liabilities 6,971,137
Shareholders' equity 589,258
-----------
Total liabilities and
shareholders' equity $7,560,395
===========
Taxable-equivalent net interest income $63,745
==========
Net interest spread 3.42%
=========
Taxable-equivalent net interest margin 3.87%
=========
Three Months Ended
March 31, 2004
--------------------------------
Average Interest Average
Outstanding Earned/ Yield/
Balance Paid(1) Rate
----------- ---------- ---------
Interest-earning assets:
Loans $3,697,254 $49,001 5.33%
Securities 1,555,791 15,452 3.99
Federal funds sold and other 74,589 189 1.02
----------- ---------- ---------
Total interest-earning assets 5,327,634 64,642 4.88%
---------- ---------
Less allowance for loan losses (45,770)
-----------
5,281,864
Noninterest-earning assets 731,933
-----------
Total assets $6,013,797
===========
Interest-bearing liabilities:
Money market and savings deposits $1,973,198 3,208 0.65%
Time deposits $1,005,189 4,862 1.95
Repurchase agreements and other
borrowed funds 1,008,229 2,932 1.17
----------- ---------- ---------
Total interest-bearing
liabilities 3,986,616 11,002 1.11%
---------- ---------
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits 1,491,064
Other liabilities 25,425
-----------
Total liabilities 5,503,105
Shareholders' equity 510,692
-----------
Total liabilities and
shareholders' equity $6,013,797
===========
Taxable-equivalent net interest income $53,640
==========
Net interest spread 3.77%
=========
Taxable-equivalent net interest margin 4.05%
=========
(1) Taxable-equivalent rates used where applicable.
Three Months Ended
Q1 2005 vs Q1 2004
----------------------------------------
Increase (Decrease)
Due to
----------------------------------------
Volume Rate Days Total
--------- --------- --------- ----------
Interest-earning assets:
Loans $13,042 $5,908 $(538) $18,412
Securities 3,983 1,897 (170) 5,710
Federal funds sold and other (77) 174 (2) 95
--------- --------- --------- ----------
Total increase (decrease) in
taxable-equivalent interest
income 16,948 7,979 (710) 24,217
--------- --------- --------- ----------
Interest-bearing liabilities:
Money market and savings
deposits 632 3,207 (35) 3,804
Time deposits 1,560 2,113 (53) 3,620
Repurchase agreements and
borrowed funds 1,362 5,358 (32) 6,688
--------- --------- --------- ----------
Total increase (decrease) in
interest expense 3,554 10,678 (120) 14,112
--------- --------- --------- ----------
Increase (decrease) in
taxable-equivalent net
interest income $13,394 $(2,699) $(590) $10,105
========= ========= ========= ==========
EXHIBIT II
Rate Volume
Linked Quarter Analysis
(dollars in thousands)
(unaudited)
Three Months Ended
March 31, 2005
--------------------------------
Average Interest Average
Outstanding Earned/ Yield/
Balance Paid(1) Rate
----------- ---------- ---------
Interest-earning assets:
Loans $4,682,570 $67,413 5.84%
Securities 1,957,288 21,162 4.38
Federal funds sold and other 44,143 284 2.61
----------- ---------- ---------
Total interest-earning assets 6,684,001 88,859 5.39%
---------- ---------
Less allowance for loan losses (50,663)
-----------
6,633,338
Noninterest-earning assets 927,057
-----------
Total assets $7,560,395
===========
Interest-bearing liabilities:
Money market and savings deposits $2,364,770 7,012 1.20%
Time deposits 1,329,170 8,482 2.59%
Repurchase agreements and other
borrowed funds 1,479,886 9,620 2.64
----------- ---------- ---------
Total interest-bearing
liabilities 5,173,826 25,114 1.97%
---------- ---------
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits 1,764,238
Other liabilities 33,073
-----------
Total liabilities 6,971,137
Shareholders' equity 589,258
-----------
Total liabilities and
shareholders' equity $7,560,395
===========
Taxable-equivalent net interest income $63,745
==========
Net interest spread 3.42%
=========
Taxable-equivalent net interest margin 3.87%
=========
Three Months Ended
December 31, 2004
--------------------------------
Average Interest Average
Outstanding Earned/ Yield/
Balance Paid(1) Rate
----------- ---------- ---------
Interest-earning assets:
Loans $4,509,677 $62,712 5.53%
Securities 1,981,982 21,359 4.29
Federal funds sold and other 45,008 226 2.00
----------- ---------- ---------
Total interest-earning assets 6,536,667 84,297 5.13%
---------- ---------
Less allowance for loan losses (51,673)
-----------
6,484,994
Noninterest-earning assets 841,702
-----------
Total assets $7,326,696
===========
Interest-bearing liabilities:
Money market and savings deposits $2,395,980 6,016 1.00%
Time deposits 1,262,469 7,308 2.30
Repurchase agreements and other
borrowed funds 1,259,392 6,665 2.11
----------- ---------- ---------
Total interest-bearing
liabilities 4,917,841 19,989 1.62%
---------- ---------
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits 1,791,695
Other liabilities 39,779
-----------
Total liabilities 6,749,315
Shareholders' equity 577,381
-----------
Total liabilities and
shareholders' equity $7,326,696
===========
Taxable-equivalent net interest income $64,308
==========
Net interest spread 3.51%
=========
Taxable-equivalent net interest margin 3.91%
=========
(1) Taxable-equivalent rates used where applicable.
Three Months Ended
Q1 2005 vs Q4 2004
----------------------------------------
Increase (Decrease)
Due to
----------------------------------------
Volume Rate Days Total
--------- --------- --------- ----------
Interest-earning assets:
Loans $2,425 $3,639 $(1,363) $4,701
Securities (190) 457 (464) (197)
Federal funds sold and other (4) 67 (5) 58
--------- --------- --------- ----------
Total increase (decrease) in
taxable-equivalent interest
income 2,231 4,163 (1,832) 4,562
--------- --------- --------- ----------
Interest-bearing liabilities:
Money market and savings
deposits (76) 1,203 (131) 996
Time deposits 384 949 (159) 1,174
Repurchase agreements and
borrowed funds 1,152 1,948 (145) 2,955
--------- --------- --------- ----------
Total increase (decrease) in
interest expense 1,460 4,100 (435) 5,125
--------- --------- --------- ----------
Increase (decrease) in
taxable-equivalent net
interest income $771 $63 $(1,397) $(563)
========= ========= ========= ==========
EXHIBIT III
Southwest Bancorporation of Texas, Inc.
Consolidated Financial Information (unaudited)
Quarterly Trend Analysis
(dollars in thousands, except per share data)
2003
-----------------------------------------------
2Q 3Q 4Q
--------------- --------------- ---------------
Balance sheet averages
- ----------------------
Loans held for
investment $3,218,818 $3,351,647 $3,362,374
Loans held for sale 86,001 105,064 98,777
Investment securities 1,222,798 1,497,754 1,539,469
Securities purchased
under resale
agreements 30,000 30,000 30,000
Fed funds sold and
other interest-
earning assets 66,204 90,474 39,997
--------------- --------------- ---------------
Total interest-
earning assets 4,623,821 5,074,939 5,070,617
--------------- --------------- ---------------
Allowance for loan
losses (39,930) (41,469) (42,513)
Cash and due from
banks 233,126 257,010 268,099
Goodwill 2,590 25,471 25,647
Core deposit
intangibles - 6,327 6,509
Other assets 290,585 287,289 338,571
--------------- --------------- ---------------
Total assets $5,110,192 $5,609,567 $5,666,930
=============== =============== ===============
Noninterest-bearing
deposits $1,208,477 $1,342,560 $1,399,592
Interest-bearing
demand deposits 35,451 73,142 37,997
Savings deposits 1,775,535 1,854,140 1,829,947
Time deposits 964,980 1,064,502 1,023,668
--------------- --------------- ---------------
Total deposits 3,984,443 4,334,344 4,291,204
Repurchase agreements
and other borrowed
funds 627,729 771,132 847,109
Other liabilities 27,349 27,493 40,991
Shareholders' equity 470,671 476,598 487,626
--------------- --------------- ---------------
Total liabilities
and equity $5,110,192 $5,609,567 $5,666,930
=============== =============== ===============
Income statement data
- ----------------------
Interest and fees on
loans $46,306 $47,681 $47,176
Interest on
securities 11,489 12,314 13,856
Interest on fed funds
sold and other
interest-earning
assets 284 303 175
--------------- --------------- ---------------
Total interest
income 58,079 60,298 61,207
--------------- --------------- ---------------
Interest on deposits 9,535 9,106 8,224
Interest on
subordinated
debentures - - 516
Interest on other
borrowings 2,050 2,105 1,957
--------------- --------------- ---------------
Total interest
expense 11,585 11,211 10,697
--------------- --------------- ---------------
Net interest income 46,494 49,087 50,510
Provision for loan
losses 2,961 2,979 2,935
--------------- --------------- ---------------
Net interest income
after provision 43,533 46,108 47,575
--------------- --------------- ---------------
Service charges on
deposit accounts 9,316 10,551 10,581
Investment services 2,430 2,489 2,498
Other fee income 3,652 6,515 4,725
Other operating
income 2,513 3,621 4,662
Gain (loss) on sales
of securities 1,115 31 43
--------------- --------------- ---------------
Total noninterest
income 19,026 23,207 22,509
--------------- --------------- ---------------
Total revenue 65,520 72,294 73,019
--------------- --------------- ---------------
Salaries and benefits 22,341 25,975 26,473
Occupancy expenses 6,885 8,006 8,299
Other expenses 10,241 15,495 11,930
--------------- --------------- ---------------
Total noninterest
expenses 39,467 49,476 46,702
--------------- --------------- ---------------
Income before
income taxes 23,092 19,839 23,382
Provision for income
taxes 7,129 6,459 7,071
--------------- --------------- ---------------
Net income $15,963 $13,380 $16,311
=============== =============== ===============
Basic earnings per
common share $0.24 $0.20 $0.24
=============== =============== ===============
Diluted earnings
per common share $0.23 $0.19 $0.23
=============== =============== ===============
Dividends per
common share - $0.02 $0.03
=============== =============== ===============
Period end # of
shares outstanding 68,114 68,362 68,428
Weighted avg # of
shares outstanding
(incl CSE's) 69,456 70,008 70,190
Nonperforming assets
- ----------------------
Nonaccrual loans $14,609 $14,173 $11,443
Accruing loans 90 or
more days past due 4,308 983 1,299
Restructured loans - - -
ORE and OLRA 3,398 3,688 4,248
--------------- --------------- ---------------
Total nonperforming
assets $22,315 $18,844 $16,990
=============== =============== ===============
Changes in allowance
for credit losses
- ----------------------
Allowance for loan
losses - beginning
of period $37,236 $37,412 $39,803
Provision for loan
losses 2,961 2,979 2,935
Charge-offs (3,054) (2,157) (1,735)
Recoveries 269 143 608
Allowance acquired
through mergers and
acquisitions - 1,426 -
--------------- --------------- ---------------
Allowance for loan
losses - end of
period 37,412 39,803 41,611
--------------- --------------- ---------------
Reserve for unfunded
lending commitments
- beginning of
period 1,272 1,311 1,332
Provision for
unfunded lending
commitments 39 21 65
--------------- --------------- ---------------
Reserve for unfunded
lending commitments
- end of period 1,311 1,332 1,397
--------------- --------------- ---------------
Allowance for credit
losses $38,723 $41,135 $43,008
=============== =============== ===============
Ratios
- ----------------------
Return on average
assets 1.25% 0.95% 1.14%
Return on average
common shareholders'
equity 13.60% 11.14% 13.27%
Tier 1 leverage ratio 9.06% 8.06% 9.15%
Total capital to risk
weighted assets 11.61% 11.02% 11.90%
Taxable-equivalent
yield on interest-
earning assets 5.11% 4.79% 4.86%
Cost of funds with
demand accounts 1.01% 0.87% 0.83%
Taxable-equivalent
net interest margin 4.11% 3.91% 4.03%
Taxable-equivalent
efficiency ratio 60.47% 66.60% 62.25%
Demand deposits to
total deposits 30.33% 30.97% 32.62%
Noninterest income to
total income 29.04% 32.10% 30.83%
Noninterest expense
to average interest-
earning assets 3.42% 3.87% 3.65%
Operating leverage $1,255 $(3,235) $3,499
Nonperforming assets
to loans and other
real estate 0.68% 0.57% 0.49%
Net charge-offs
(recoveries) to
average loans 0.35% 0.24% 0.13%
Allowance for credit
losses to total
loans 1.18% 1.24% 1.23%
Allowance for loan
losses to
nonperforming loans 197.77% 262.62% 326.57%
Common stock
performance
- ----------------------
Market value of stock
- Close $16.255 $18.245 $19.425
Market value of stock
- High $17.975 $19.225 $19.645
Market value of stock
- Low $14.825 $16.025 $17.600
Book value of stock $7.05 $7.03 $7.29
Market/book value of
stock 231% 259% 266%
Price/earnings ratio 18 21 22
Other data
- ----------------------
EOP Employees - full
time equivalent 1,556 1,728 1,760
Period end balances
- ----------------------
Loans held for
investment $3,277,684 $3,328,827 $3,491,673
Loans held for sale 91,757 100,366 96,899
Investment securities 1,303,613 1,507,504 1,549,398
Securities purchased
under resale
agreements 30,000 30,000 30,000
Fed funds sold and
other interest-
earning assets 244,117 88,592 64,908
--------------- --------------- ---------------
Total interest-
earning assets 4,947,171 5,055,289 5,232,878
--------------- --------------- ---------------
Allowance for loan
losses (37,412) (39,803) (41,611)
Cash and due from
banks 270,711 286,417 390,890
Goodwill 2,590 25,647 25,647
Core deposit
intangibles - 6,858 6,185
Other assets 260,383 330,434 333,144
--------------- --------------- ---------------
Total assets $5,443,443 $5,664,842 $5,947,133
=============== =============== ===============
Noninterest-bearing
demand deposits $1,343,749 $1,341,277 $1,513,038
Interest-bearing
demand deposits 31,479 40,496 43,452
Savings deposits 1,766,818 1,875,665 1,840,814
Time deposits 997,407 1,051,815 1,005,935
--------------- --------------- ---------------
Total deposits 4,139,453 4,309,253 4,403,239
Repurchase agreements
and other borrowed
funds 789,993 842,644 1,016,930
Other liabilities 34,081 32,041 27,643
Minority interest - - -
Shareholders' equity 479,916 480,904 499,321
--------------- --------------- ---------------
Total liabilities
and equity $5,443,443 $5,664,842 $5,947,133
=============== =============== ===============
2004
-----------------------------------------------
1Q 2Q 3Q 4Q
----------- ----------- ----------- -----------
Balance sheet averages
- ----------------------
Loans held for
investment $3,601,637 $3,768,629 $4,027,343 $4,411,499
Loans held for sale 95,617 104,545 96,119 98,178
Investment securities 1,555,791 1,628,789 1,691,472 1,981,982
Securities purchased
under resale
agreements 23,077 - 2,435 -
Fed funds sold and
other interest-
earning assets 51,512 42,375 50,138 45,008
----------- ----------- ----------- -----------
Total interest-
earning assets 5,327,634 5,544,338 5,867,507 6,536,667
----------- ----------- ----------- -----------
Allowance for loan
losses (45,770) (49,658) (49,422) (51,673)
Cash and due from
banks 323,517 266,082 251,686 278,580
Goodwill 45,689 55,077 54,998 151,936
Core deposit
intangibles 7,934 11,149 10,240 28,734
Other assets 354,793 354,592 355,606 382,452
----------- ----------- ----------- -----------
Total assets $6,013,797 $6,181,580 $6,490,615 $7,326,696
=========== =========== =========== ===========
Noninterest-bearing
deposits $1,491,064 $1,574,075 $1,587,990 $1,791,695
Interest-bearing
demand deposits 60,359 71,089 71,430 121,927
Savings deposits 1,912,839 1,981,168 2,012,963 2,274,053
Time deposits 1,005,189 1,065,937 1,088,302 1,262,469
----------- ----------- ----------- -----------
Total deposits 4,469,451 4,692,269 4,760,685 5,450,144
Repurchase agreements
and other borrowed
funds 1,008,229 940,165 1,173,762 1,259,392
Other liabilities 25,425 33,824 27,246 39,779
Shareholders' equity 510,692 515,322 528,922 577,381
----------- ----------- ----------- -----------
Total liabilities
and equity $6,013,797 $6,181,580 $6,490,615 $7,326,696
=========== =========== =========== ===========
Income statement data
- ----------------------
Interest and fees on
loans $48,862 $50,488 $55,282 $62,508
Interest on
securities 14,549 14,678 16,143 19,993
Interest on fed funds
sold and other
interest-earning
assets 189 119 192 226
----------- ----------- ----------- -----------
Total interest
income 63,600 65,285 71,617 82,727
----------- ----------- ----------- -----------
Interest on deposits 8,070 8,408 10,028 13,324
Interest on
subordinated
debentures 545 550 698 1,767
Interest on other
borrowings 2,387 2,110 3,892 4,898
----------- ----------- ----------- -----------
Total interest
expense 11,002 11,068 14,618 19,989
----------- ----------- ----------- -----------
Net interest income 52,598 54,217 56,999 62,738
Provision for loan
losses 1,909 2,923 2,878 2,502
----------- ----------- ----------- -----------
Net interest income
after provision 50,689 51,294 54,121 60,236
----------- ----------- ----------- -----------
Service charges on
deposit accounts 11,040 11,190 11,184 12,931
Investment services 2,970 2,885 3,164 3,663
Other fee income 4,803 5,070 5,907 6,942
Other operating
income 3,049 3,394 5,115 3,210
Gain (loss) on sales
of securities 26 (25) (46) 33
----------- ----------- ----------- -----------
Total noninterest
income 21,888 22,514 25,324 26,779
----------- ----------- ----------- -----------
Total revenue 74,486 76,731 82,323 89,517
----------- ----------- ----------- -----------
Salaries and benefits 27,981 28,458 28,828 32,602
Occupancy expenses 8,258 8,887 9,395 11,117
Other expenses 13,862 12,884 14,060 20,279
----------- ----------- ----------- -----------
Total noninterest
expenses 50,101 50,229 52,283 63,998
----------- ----------- ----------- -----------
Income before
income taxes 22,476 23,579 27,162 23,017
Provision for income
taxes 7,189 7,358 7,496 5,648
----------- ----------- ----------- -----------
Net income $15,287 $16,221 $19,666 $17,369
=========== =========== =========== ===========
Basic earnings per
common share $0.22 $0.24 $0.28 $0.25
=========== =========== =========== ===========
Diluted earnings
per common share $0.22 $0.23 $0.28 $0.24
=========== =========== =========== ===========
Dividends per
common share $0.03 $0.03 $0.03 $0.03
=========== =========== =========== ===========
Period end # of
shares outstanding 68,612 69,068 69,154 70,096
Weighted avg # of
shares outstanding
(incl CSE's) 70,282 70,528 70,830 71,906
Nonperforming assets
- ----------------------
Nonaccrual loans $17,671 $10,668 $11,370 $14,174
Accruing loans 90 or
more days past due 3,044 1,805 845 2,052
Restructured loans - - - -
ORE and OLRA 4,722 11,461 8,076 8,887
----------- ----------- ----------- -----------
Total nonperforming
assets $25,437 $23,934 $20,291 $25,113
=========== =========== =========== ===========
Changes in allowance
for credit losses
- ----------------------
Allowance for loan
losses - beginning
of period $41,611 $46,583 $45,927 $47,516
Provision for loan
losses 1,909 2,923 2,878 2,502
Charge-offs (1,382) (3,748) (1,666) (2,236)
Recoveries 2,329 169 377 272
Allowance acquired
through mergers and
acquisitions 2,116 - - 1,354
----------- ----------- ----------- -----------
Allowance for loan
losses - end of
period 46,583 45,927 47,516 49,408
----------- ----------- ----------- -----------
Reserve for unfunded
lending commitments
- beginning of
period 1,397 1,488 1,565 1,687
Provision for
unfunded lending
commitments 91 77 122 164
----------- ----------- ----------- -----------
Reserve for unfunded
lending commitments
- end of period 1,488 1,565 1,687 1,851
----------- ----------- ----------- -----------
Allowance for credit
losses $48,071 $47,492 $49,203 $51,259
=========== =========== =========== ===========
Ratios
- ----------------------
Return on average
assets 1.02% 1.06% 1.21% 0.94%
Return on average
common shareholders'
equity 12.04% 12.66% 14.79% 11.97%
Tier 1 leverage ratio 8.35% 8.45% 8.90% 7.82%
Total capital to risk
weighted assets 10.76% 10.39% 12.05% 11.02%
Taxable-equivalent
yield on interest-
earning assets 4.88% 4.84% 4.96% 5.13%
Cost of funds with
demand accounts 0.81% 0.79% 0.98% 1.19%
Taxable-equivalent
net interest margin 4.05% 4.03% 3.97% 3.91%
Taxable-equivalent
efficiency ratio 65.16% 62.98% 61.36% 67.83%
Demand deposits to
total deposits 33.36% 33.55% 33.36% 32.87%
Noninterest income to
total income 29.39% 29.34% 30.76% 29.91%
Noninterest expense
to average interest-
earning assets 3.78% 3.64% 3.54% 3.89%
Operating leverage $(1,932) $2,117 $3,538 $(4,521)
Nonperforming assets
to loans and other
real estate 0.68% 0.61% 0.49% 0.55%
Net charge-offs
(recoveries) to
average loans (0.11)% 0.38% 0.13% 0.18%
Allowance for credit
losses to total
loans 1.29% 1.21% 1.19% 1.11%
Allowance for loan
losses to
nonperforming loans 224.88% 368.21% 389.00% 304.50%
Common stock
performance
- ----------------------
Market value of stock
- Close $18.865 $22.060 $20.140 $23.290
Market value of stock
- High $19.955 $22.085 $22.055 $25.010
Market value of stock
- Low $18.425 $18.605 $19.500 $20.050
Book value of stock $7.63 $7.39 $7.95 $8.28
Market/book value of
stock 247% 299% 253% 281%
Price/earnings ratio 22 25 21 24
Other data
- ----------------------
EOP Employees - full
time equivalent 1,839 1,830 1,832 2,126
Period end balances
- ----------------------
Loans held for
investment $3,720,950 $3,912,212 $4,134,125 $4,539,578
Loans held for sale 101,944 97,929 96,022 107,404
Investment securities 1,576,977 1,624,540 1,702,393 1,985,237
Securities purchased
under resale
agreements - - - -
Fed funds sold and
other interest-
earning assets 52,678 45,612 75,848 14,417
----------- ----------- ----------- -----------
Total interest-
earning assets 5,452,549 5,680,293 6,008,388 6,646,636
----------- ----------- ----------- -----------
Allowance for loan
losses (46,583) (45,927) (47,516) (49,408)
Cash and due from
banks 290,796 270,551 246,002 327,558
Goodwill 55,094 54,998 54,998 149,846
Core deposit
intangibles 11,661 10,653 9,855 27,246
Other assets 352,189 390,958 363,330 403,725
----------- ----------- ----------- -----------
Total assets $6,115,706 $6,361,526 $6,635,057 $7,505,603
=========== =========== =========== ===========
Noninterest-bearing
demand deposits $1,625,647 $1,622,348 $1,593,652 $1,871,228
Interest-bearing
demand deposits 72,009 62,316 69,531 135,003
Savings deposits 1,985,622 1,998,375 2,010,178 2,297,217
Time deposits 1,019,666 1,097,130 1,131,101 1,316,595
----------- ----------- ----------- -----------
Total deposits 4,702,944 4,780,169 4,804,462 5,620,043
Repurchase agreements
and other borrowed
funds 854,005 1,031,866 1,253,242 1,267,864
Other liabilities 35,526 39,311 27,568 37,282
Minority interest - - - -
Shareholders' equity 523,231 510,180 549,785 580,414
----------- ----------- ----------- -----------
Total liabilities
and equity $6,115,706 $6,361,526 $6,635,057 $7,505,603
=========== =========== =========== ===========
2005
------------------
1Q
------------------
Balance sheet averages
- ----------------------
Loans held for
investment $4,578,891
Loans held for sale 103,679
Investment securities 1,957,288
Securities purchased
under resale
agreements -
Fed funds sold and
other interest-
earning assets 44,143
------------------
Total interest-
earning assets 6,684,001
------------------
Allowance for loan
losses (50,663)
Cash and due from
banks 321,832
Goodwill 149,863
Core deposit
intangibles 26,119
Other assets 429,243
------------------
Total assets $7,560,395
==================
Noninterest-bearing
deposits $1,764,238
Interest-bearing
demand deposits 110,646
Savings deposits 2,254,124
Time deposits 1,329,170
------------------
Total deposits 5,458,178
Repurchase agreements
and other borrowed
funds 1,479,886
Other liabilities 33,073
Shareholders' equity 589,258
------------------
Total liabilities
and equity $7,560,395
==================
Income statement data
- ----------------------
Interest and fees on
loans $67,200
Interest on
securities 19,830
Interest on fed funds
sold and other
interest-earning
assets 284
------------------
Total interest
income 87,314
------------------
Interest on deposits 15,494
Interest on
subordinated
debentures 2,516
Interest on other
borrowings 7,104
------------------
Total interest
expense 25,114
------------------
Net interest income 62,200
Provision for loan
losses 3,100
------------------
Net interest income
after provision 59,100
------------------
Service charges on
deposit accounts 11,347
Investment services 3,605
Other fee income 7,335
Other operating
income 6,482
Gain (loss) on sales
of securities 2
------------------
Total noninterest
income 28,771
------------------
Total revenue 90,971
------------------
Salaries and benefits 34,729
Occupancy expenses 10,605
Other expenses 18,839
------------------
Total noninterest
expenses 64,173
------------------
Income before
income taxes 23,698
Provision for income
taxes 6,754
------------------
Net income $16,944
==================
Basic earnings per
common share $0.24
==================
Diluted earnings
per common share $0.24
==================
Dividends per
common share $0.03
==================
Period end # of
shares outstanding 70,194
Weighted avg # of
shares outstanding
(incl CSE's) 71,644
Nonperforming assets
- ----------------------
Nonaccrual loans $12,421
Accruing loans 90 or
more days past due 1,312
Restructured loans -
ORE and OLRA 8,378
------------------
Total nonperforming
assets $22,111
==================
Changes in allowance
for credit losses
- ----------------------
Allowance for loan
losses - beginning
of period $49,408
Provision for loan
losses 3,100
Charge-offs (4,527)
Recoveries 1,310
Allowance acquired
through mergers and
acquisitions -
------------------
Allowance for loan
losses - end of
period 49,291
------------------
Reserve for unfunded
lending commitments
- beginning of
period 1,851
Provision for
unfunded lending
commitments 54
------------------
Reserve for unfunded
lending commitments
- end of period 1,905
------------------
Allowance for credit
losses $51,196
==================
Ratios
- ----------------------
Return on average
assets 0.91%
Return on average
common shareholders'
equity 11.66%
Tier 1 leverage ratio 7.80%
Total capital to risk
weighted assets 11.22%(a)
Taxable-equivalent
yield on interest-
earning assets 5.39%
Cost of funds with
demand accounts 1.47%
Taxable-equivalent
net interest margin 3.87%
Taxable-equivalent
efficiency ratio 66.94%
Demand deposits to
total deposits 32.32%
Noninterest income to
total income 31.63%
Noninterest expense
to average interest-
earning assets 3.89%
Operating leverage $1,279
Nonperforming assets
to loans and other
real estate 0.48%
Net charge-offs
(recoveries) to
average loans 0.28%
Allowance for credit
losses to total
loans 1.09%
Allowance for loan
losses to
nonperforming loans 358.92%
Common stock
performance
- ----------------------
Market value of stock
- Close $18.350
Market value of stock
- High $23.690
Market value of stock
- Low $18.020
Book value of stock $8.22
Market/book value of
stock 223%
Price/earnings ratio 19
Other data
- ----------------------
EOP Employees - full
time equivalent 2,133
Period end balances
- ----------------------
Loans held for
investment $4,605,813
Loans held for sale 110,239
Investment securities 1,919,265
Securities purchased
under resale
agreements -
Fed funds sold and
other interest-
earning assets 63,367
------------------
Total interest-
earning assets 6,698,684
------------------
Allowance for loan
losses (49,291)
Cash and due from
banks 274,842
Goodwill 150,042
Core deposit
intangibles 24,998
Other assets 460,233
------------------
Total assets $7,559,508
==================
Noninterest-bearing
demand deposits $1,751,106
Interest-bearing
demand deposits 114,570
Savings deposits 2,227,186
Time deposits 1,712,845
------------------
Total deposits 5,805,707
Repurchase agreements
and other borrowed
funds 1,138,460
Other liabilities 38,153
Minority interest -
Shareholders' equity 577,188
------------------
Total liabilities
and equity $7,559,508
==================
(a) Estimated
EXHIBIT IV
Southwest Bancorporation of Texas, Inc.
Reconciliation of Certain Non-GAAP Financial Measures
(dollars in thousands, except per share data)
1Q 04 4Q 04 1Q 05
----------- ----------- -----------
NET INCOME
- -----------------------------
Net income (GAAP) A $15,287 $17,369 $16,944
Merger-related expenses,
after tax (GAAP) 989 1,076 462
Name change expenses, after
tax (GAAP) - 327 1,400
Gain on sale of the PULSE
network, after tax (GAAP) - - (561)
Gain on sale of drive-through
facility, after tax (GAAP) - - (771)
----------- ----------- -----------
Net income, before merger-
related and name change
expenses and gains
on sales of PULSE network
and drive-through facility,
after tax B 16,276 18,772 17,474
Intangible amortization
expense, after tax (GAAP) 587 1,454 1,461
----------- ----------- -----------
Net income, before merger-
related and name change
expenses, gains on sales
of PULSE network and drive-
through facility and
intangible amortization
expense, after tax C $16,863 $20,226 $18,935
=========== =========== ===========
EARNINGS PER SHARE
- -----------------------------
Diluted earnings per common
share (GAAP) A/P $0.22 $0.24 $0.24
Merger-related expenses,
after tax (GAAP) 0.01 0.01 0.01
Name change expenses, after
tax (GAAP) - 0.01 0.02
Gain on sale of the PULSE
network, after tax (GAAP) - - (0.01)
Gain on sale of drive-through
facility, after tax (GAAP) - - (0.01)
----------- ----------- -----------
Diluted earnings per common
share, before merger-related
and name change expenses and
gains on sale of PULSE network
and drive-through facility,
after tax B/R 0.23 0.26 0.24
Intangible amortization
expense, after tax (GAAP) 0.01 0.02 0.02
----------- ----------- -----------
Diluted earnings per common
share, before merger-related
and name change expenses,
gains on sales of PULSE
network and drive-through
facility and intangible
amortization expense,
after tax C/R $0.24 $0.28 $0.26
=========== =========== ===========
RETURN ON AVERAGE ASSETS
- -----------------------------
Average assets (GAAP) D $6,013,797 $7,326,696 $7,560,395
Average intangible assets
(GAAP) (53,623) (180,670) (175,982)
----------- ----------- -----------
Average tangible assets
(GAAP) E $5,960,174 $7,146,026 $7,384,413
=========== =========== ===========
Average assets (GAAP) $6,013,797 $7,326,696 $7,560,395
Merger-related expenses
(GAAP) 247 1,292 61
Name change expenses (GAAP) - 92 378
Gain on sale of the PULSE
network (GAAP) - - (287)
Gain on sale of drive-through
facility (GAAP) - - (274)
----------- ----------- -----------
Average assets, before
merger-related and name
change expenses and gains
on sales of PULSE network
and drive-through
facility F 6,014,044 7,328,080 7,560,273
Average intangible assets
(GAAP) (53,623) (180,670) (175,982)
----------- ----------- -----------
Average tangible assets,
before merger-related and
name change expenses
and gains on sales of PULSE
network and drive-through
facility G $5,960,421 $7,147,410 $7,384,291
=========== =========== ===========
Return on average assets
GAAP A/D 1.02% 0.94% 0.91%
Before merger-related and
name change expenses and
gains on sales of PULSE
network and drive-through
facility B/F 1.09% 1.02% 0.94%
Return on average tangible
assets
GAAP A/E 1.03% 0.97% 0.93%
Before merger-related and
name change expenses, gains
on sales of PULSE network
and drive-through facility,
and intangible amortization C/G 1.14% 1.13% 1.04%
RETURN ON AVERAGE COMMON
SHAREHOLDERS' EQUITY
- -----------------------------
Average common shareholders'
equity (GAAP) H $510,692 $577,381 $589,258
Merger-related expenses
(GAAP) 247 1,292 61
Name change expenses (GAAP) - 92 378
Gain on sale of the PULSE
network (GAAP) - - (287)
Gain on sale of drive-through
facility (GAAP) - - (274)
----------- ----------- -----------
Average common shareholders'
equity, before merger-
related and name change
expenses and gains on sales
of PULSE network and
drive-through facility I 510,939 578,765 589,136
Average intangible assets
(GAAP) J (53,623) (180,670) (175,982)
----------- ----------- -----------
Average common shareholders'
equity, before merger-
related and name change
expenses, gains on sales
of PULSE network and
drive-through facility, and
average intangible assets K $457,316 $398,095 $413,154
=========== =========== ===========
Return on average common
shareholders' equity
GAAP A/H 12.04% 11.97% 11.66%
Before merger-related and
name change expenses and
gains on sales of PULSE
network and drive-through
facility B/I 12.81% 12.90% 12.03%
Return on average tangible
common shareholders' equity
GAAP A/H+J 13.45% 17.42% 16.63%
Before merger-related and
name change expenses, gains
on sales of PULSE network
and drive-through facility,
and intangible amortization C/K 14.83% 20.21% 18.59%
OVERHEAD EFFICIENCY RATIOS
- -----------------------------
Noninterest expense (GAAP) $50,101 $63,998 $64,173
Intangible amortization
expense (GAAP) 903 2,237 2,248
----------- ----------- -----------
Noninterest expense, before
intangible amortization
expense L 49,198 61,761 61,925
Merger-related expenses
(GAAP) 1,522 1,655 711
Name change expenses (GAAP) - 503 2,154
----------- ----------- -----------
Noninterest expenses, before
intangible amortization
expense, merger-related
and name change expenses M $47,676 $59,603 $59,060
=========== =========== ===========
Net interest income (GAAP) $52,598 $62,738 $62,200
Taxable-equivalent adjustment 1,042 1,570 1,545
----------- ----------- -----------
Taxable-equivalent net
interest income 53,640 64,308 63,745
Noninterest income, excluding
gain (loss) on sale of
securities (GAAP) 21,862 26,746 28,769
----------- ----------- -----------
Taxable-equivalent total
revenue N 75,502 91,054 92,514
Gain on sale of the PULSE
network (GAAP) - - (863)
Gain on sale of drive-through
facility (GAAP) - - (1,186)
----------- ----------- -----------
Taxable-equivalent total
revenue, before gains on
sales of the PULSE network
and drive-through facility O $75,502 $91,054 $90,465
=========== =========== ===========
Overhead efficiency ratios
Before intangible
amortization expense L/N 65.16% 67.83% 66.94%
Before intangible
amortization expense,
merger-related and name
change expenses, and gains
on sales of PULSE network
and drive-through
facility M/O 63.15% 65.46% 65.28%
SUBORDINATED DEBENTURES
INTEREST EXPENSE ANALYSIS
- -----------------------------
Interest on debentures (GAAP) P $545 $1,768 $2,516
Average interest-earning
assets (GAAP) Q 5,327,634 6,536,667 6,684,001
Estimated impact on taxable-
equivalent net interest
margin P/Q 0.04% 0.11% 0.15%
Taxable-equivalent net
interest margin, as reported 4.05% 3.91% 3.87%
WEIGHTED AVERAGE # OF SHARES
OUTSTANDING
- -----------------------------
Weighted average # of shares
outstanding (incl CSEs) R 70,282 71,906 71,644
Note: Earnings per share information may contain rounding differences.
CONTACT: Amegy Bank N.A.
Randy Meyer, 713-235-8832
randy.meyer@amegybank.com
or
Sarah Peterson, 713-232-1115
sarah.peterson@amegybank.com