UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004 |
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 000-49928
TEXAS UNITED BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
| Texas | 75-2768656 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
202 W. COLORADO
LA GRANGE, TEXAS 78945
(Address of principal executive offices, including zip code)
(979) 968-8451
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $1.00 per share
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12-b-2 of the Exchange Act).
Yes ¨ No x.
As of April 30, 2004, the number of outstanding shares of Common Stock, par value $1.00 per share, was 4,016,736.
PART I
FINANCIAL INFORMATION
| Item 1. | Condensed Consolidated Financial Statements. |
TEXAS UNITED BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
| March 31, 2004 |
December 31, 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and cash equivalents: |
||||||||
| Cash and due from banks |
$ | 17,572 | $ | 17,268 | ||||
| Federal funds sold and other temporary investments |
1,913 | — | ||||||
| Total cash and cash equivalents |
19,485 | 17,268 | ||||||
| Investment securities available-for-sale, at fair value |
180,318 | 184,547 | ||||||
| Loans, net |
384,252 | 376,628 | ||||||
| Loans held for sale |
18,495 | 3,810 | ||||||
| Premises and equipment, net |
26,397 | 25,802 | ||||||
| Accrued interest receivable |
2,871 | 2,984 | ||||||
| Goodwill |
9,528 | 9,073 | ||||||
| Core deposit intangibles |
367 | 393 | ||||||
| Mortgage servicing rights |
4,470 | 4,475 | ||||||
| Other assets |
12,537 | 12,704 | ||||||
| Total assets |
$ | 658,720 | $ | 637,684 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Deposits: |
||||||||
| Noninterest-bearing |
$ | 96,457 | $ | 96,337 | ||||
| Interest-bearing |
440,292 | 404,799 | ||||||
| Total deposits |
536,749 | 501,136 | ||||||
| Federal funds purchased |
— | 6,891 | ||||||
| Other liabilities |
7,131 | 6,646 | ||||||
| Borrowings |
57,837 | 71,875 | ||||||
| Securities sold under repurchase agreements |
3,793 | 784 | ||||||
| Junior subordinated deferrable interest debentures |
12,365 | 12,365 | ||||||
| Total liabilities |
617,875 | 599,697 | ||||||
| Commitments and contingencies |
— | — | ||||||
| Shareholders’ equity: |
||||||||
| Preferred stock, $1.00 par value, 500,000 shares authorized, none of which are issued and outstanding |
— | — | ||||||
| Common stock, $1.00 par value, 20,000,000 shares authorized; 4,022,831 shares issued and 4,016,736 shares outstanding as of March 31, 2004 and 4,008,192 shares issued and 4,002,097 shares outstanding as of December 31, 2003 |
4,023 | 4,008 | ||||||
| Additional paid-in capital |
17,118 | 16,911 | ||||||
| Retained earnings |
18,705 | 17,422 | ||||||
| Accumulated other comprehensive income |
1,116 | (237 | ) | |||||
| Less treasury stock, at cost |
(117 | ) | (117 | ) | ||||
| Total shareholders’ equity |
40,845 | 37,987 | ||||||
| Total liabilities and shareholders’ equity |
$ | 658,720 | $ | 637,684 | ||||
See accompanying notes to condensed consolidated financial statements
1
TEXAS UNITED BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
| For the three months ended March 31, | |||||||
| 2004 |
2003 | ||||||
| Interest income: |
|||||||
| Loans |
$ | 7,517 | $ | 7,807 | |||
| Investment securities: |
|||||||
| Taxable |
1,587 | 1,264 | |||||
| Tax-exempt |
98 | 151 | |||||
| Federal funds sold and other temporary investments |
4 | 9 | |||||
| Total interest income |
9,206 | 9,231 | |||||
| Interest expense: |
|||||||
| Deposits |
1,789 | 1,933 | |||||
| Federal funds purchased |
14 | 40 | |||||
| Borrowings |
473 | 490 | |||||
| Subordinated notes and debentures |
— | 87 | |||||
| Junior subordinated deferrable interest debentures |
266 | 183 | |||||
| Total interest expense |
2,542 | 2,733 | |||||
| Net interest income |
6,664 | 6,498 | |||||
| Provision for loan losses |
150 | 800 | |||||
| Net interest income after provision for loan losses |
6,514 | 5,698 | |||||
| Non-interest income: |
|||||||
| Service charges on deposit accounts |
1,597 | 1,609 | |||||
| Net servicing fees |
(5 | ) | 18 | ||||
| Gain on sale of investment securities, net |
77 | 231 | |||||
| Other non-interest income |
2,022 | 721 | |||||
| Total non-interest income |
3,691 | 2,579 | |||||
| Non-interest expense: |
|||||||
| Employee compensation and benefits |
4,274 | 3,456 | |||||
| Occupancy |
1,088 | 1,121 | |||||
| Other non-interest expense |
2,575 | 2,139 | |||||
| Total non-interest expense |
7,937 | 6,716 | |||||
| Income before provision for income taxes |
2,268 | 1,561 | |||||
| Provision for income taxes |
703 | 430 | |||||
| Net income |
$ | 1,565 | $ | 1,131 | |||
| Earnings per common share: |
|||||||
| Basic |
$ | 0.39 | $ | 0.29 | |||
| Diluted |
$ | 0.37 | $ | 0.27 | |||
| Dividends declared per common share: |
|||||||
| Basic |
$ | 0.07 | $ | 0.07 | |||
| Diluted |
$ | 0.07 | $ | 0.07 | |||
| Weighted average shares outstanding: |
|||||||
| Basic |
4,010 | 3,965 | |||||
| Diluted |
4,193 | 4,120 | |||||
See accompanying notes to condensed consolidated financial statements
2
TEXAS UNITED BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(In thousands)
(Unaudited)
| For the three months ended March 31, | ||||||
| 2004 |
2003 | |||||
| Net income |
$ | 1,565 | $ | 1,131 | ||
| Other comprehensive income, net of tax: |
||||||
| Unrealized holding gains on investment securities arising during the period |
1,404 | 646 | ||||
| Less: reclassification adjustment for gains included in net income |
51 | 152 | ||||
| Other comprehensive income |
1,353 | 494 | ||||
| Total comprehensive income |
$ | 2,918 | $ | 1,625 | ||
See accompanying notes to condensed consolidated financial statements
3
TEXAS UNITED BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders’ Equity
Year Ended December 31, 2003 and
Three Months Ended March 31, 2004
(In thousands, except share amounts)
| Common Stock |
Additional Capital |
Retained Earnings |
Accumulated Other Income (loss) |
Treasury Stock at Cost |
Total |
||||||||||||||||||||
| Shares |
Amount |
||||||||||||||||||||||||
| Balance at January 1, 2003 |
2,646,139 | $ | 2,646 | $ | 16,683 | $ | 14,594 | $ | 1,612 | $ | (117 | ) | $ | 35,418 | |||||||||||
| Net income |
— | — | — | 5,241 | — | — | 5,241 | ||||||||||||||||||
| Unrealized loss on securities, net of tax and reclassification adjustment |
— | — | — | — | (1,849 | ) | — | (1,849 | ) | ||||||||||||||||
| Other comprehensive income |
— | — | — | — | — | — | 3,392 | ||||||||||||||||||
| Three-for-two stock split |
1,331,403 | 1,331 | — | (1,331 | ) | — | — | — | |||||||||||||||||
| Issuance of common stock upon exercise of employee stock options |
30,650 | 31 | 234 | — | — | — | 265 | ||||||||||||||||||
| Cash paid in lieu of fractional shares |
— | — | (6 | ) | — | — | — | (6 | ) | ||||||||||||||||
| Dividends |
— | — | — | (1,082 | ) | — | — | (1,082 | ) | ||||||||||||||||
| Balance at December 31, 2003 |
4,008,192 | $ | 4,008 | $ | 16,911 | $ | 17,422 | $ | (237 | ) | $ | (117 | ) | $ | 37,987 | ||||||||||
| Unaudited | Common Stock |
Additional Capital |
Retained Earnings |
Accumulated Other Comprehensive Income (loss) |
Treasury Stock at Cost |
Total |
||||||||||||||||||
| Shares |
Amount |
|||||||||||||||||||||||
| Balance at January 1, 2004 |
4,008,192 | $ | 4,008 | $ | 16,911 | $ | 17,422 | $ | (237 | ) | $ | (117 | ) | $ | 37,987 | |||||||||
| Net income |
— | — | — | 1,565 | — | — | 1,565 | |||||||||||||||||
| Unrealized gain on securities, net of tax and reclassification adjustment |
— | — | — | — | 1,353 | — | 1,353 | |||||||||||||||||