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EXHIBIT 99.1

Encore Bancshares Reports Second Quarter 2011 Net Earnings of $2.1 Million or $0.13 Per Common Share

HOUSTON, July 29, 2011 (GLOBE NEWSWIRE) -- Encore Bancshares, Inc. (Nasdaq:EBTX) today announced its financial results for the second quarter of 2011.

Second Quarter Highlights

Earnings metrics improvement compared with second quarter 2010

  • Revenue was $19.1 million, up 1.0%, and up 7.3% excluding one-time items in 2010
  • Net interest margin (TE) expanded 62 basis points to 3.54%
  • Wealth management revenue increased 11.7%
  • Noninterest expense decreased 27.2%

Growth of Texas franchise compared with June 30, 2010

  • Demand deposit growth of 29.6%
  • Demand deposits were 22.7% of total deposits, up from 18.0%
  • Commercial loan growth of 25.6%, total loan growth of 4.9%
  • Assets under management grew 10.5% to $2.9 billion

Continued improvement in credit quality

  • Net charge-offs declined to $1.8 million, compared with $16.5 million for the second quarter 2010
  • Nonperforming assets decreased 69.5%, compared with June 30, 2010
  • Allowance for loan losses of 1.97% of loans, or $19.1 million, as the provision exceeded net charge-offs

Capital ratios remain solid

  • Estimated tier 1 capital ratio of 13.23%
  • Tangible common equity ratio of 7.13%

"The positive financial results for the second quarter reflect a continued improvement in credit quality and modest growth in loan demand," said James S. D'Agostino, Jr., Chairman and Chief Executive Officer of Encore Bancshares, Inc. "We have demonstrated good progress in increasing revenue by growing loans and assets under management while leveraging our cost structure. While national economic issues provide some caution, the Houston economy continues to recover and our lending team and asset management team are focused on building our share of this attractive market."

Earnings

For the three months ended June 30, 2011, our net earnings were $2.1 million, compared with a net loss of $12.7 million for the same period of 2010. Earnings per diluted common share for the second quarter of 2011 were $0.13, compared with a loss per diluted common share of $1.16 for the same period of 2010, after deducting preferred dividends for each period.

For the six months ended June 30, 2011, our net earnings were $3.2 million, compared with a net loss of $14.9 million for the same period of 2010. Earnings per diluted common share for the first half were $0.18, compared with a loss per diluted common share of $1.46, after deducting preferred dividends for each period. Earnings for both periods of 2011 improved due to lower credit costs and reduced expenses related to the sale of our Florida operations, which was completed December 31, 2010.

Net Interest Income

Net interest income on a tax equivalent basis (TE) for the second quarter of 2011 was $11.8 million, an increase of $784,000, or 7.1% compared with the same period of 2010, reflecting an improved net interest margin. The net interest margin (TE) expanded 62 basis points to 3.54% during the same comparison period. The increase in margin was due primarily to an improved balance sheet mix, as temporary investments and higher costing deposits decreased after the sale of our Florida operations. In addition, the loan yield was higher during the second quarter of 2011 due to an interest recovery of $418,000. Excluding the interest recovery, the net interest margin was 3.41%. On a linked quarter basis (compared with the immediately preceding quarter), net interest income (TE) increased $635,000, or 5.7%, and the net interest margin increased by 17 basis points, resulting mainly from the aforementioned interest recovery and lower deposit cost.

Noninterest Income

Noninterest income was $7.3 million for the second quarter of 2011, a decrease of $613,000, or 7.7%, compared with the same period of 2010, which included a $1.1 million gain on sale of two Florida branches. Excluding the gain on sale, noninterest income increased 7.3%. Trust and investment management fees increased $535,000, or 11.7%, as assets under management grew 10.5% primarily due to the improvements in the equity markets.

Noninterest Expense

Noninterest expense was $14.1 million for the second quarter of 2011, a decrease of $5.3 million, compared with the same period of 2010. The decrease in noninterest expenses was due primarily to the sale of our Florida operations, which resulted in a significant reduction in credit related costs, including write downs of assets held for sale, and other operating expenses.

Segment Earnings

On a segment basis, our banking segment had net earnings of $929,000, compared with a net loss of $13.5 million in the same period of 2010. The second quarter of 2010 included significant credit related costs, which were primarily in Florida. Our wealth management group had net earnings of $1.1 million for the second quarter of 2011, a $349,000, or 49.7% increase, compared with the same period of 2010. The growth in earnings resulted mainly from a 10.5% increase in assets under management. Our insurance agency had earnings of $278,000, down $19,000, compared with the same period of 2010, due to higher expenses reflecting growth in the Ft. Worth office.

Loans

Period end loans, including loans held for sale, were $971.4 million at June 30, 2011, a decrease of $79.3 million, or 7.5%, compared with June 30, 2010. This decrease was due primarily to the sale of Florida loans as we exited the Florida market. Excluding Florida loans, total loans increased $43.6 million, or 4.9% and commercial loans in Texas grew $82.1 million, or 25.6%, in the same comparison period. 

Deposits

Period end deposits were $1.0 billion at June 30, 2011, a decrease of $156.2 million, or 13.0%, compared with June 30, 2010. The decrease was mainly due to the sale of approximately $231.3 million in Florida deposits in 2010. Total Texas deposits increased 2.7% in the same comparison period. Texas noninterest-bearing deposits at June 30, 2011 were $236.9 million, an increase of $54.1 million, or 29.6%, and represented 22.7% of total deposits.

Credit Quality and Capital Ratios

The provision for loan losses was $1.9 million for the second quarter of 2011, compared with $18.0 million for the same period of 2010. The decline in the provision for loan losses reflected improving credit quality. Net charge-offs for the second quarter were $1.8 million, or 0.76% of average total loans on an annualized basis, compared with $16.5 million, or 6.23% of average total loans on an annualized basis for the same period of 2010. Commercial loan charge-offs were $1.0 million for the second quarter of 2011, compared with $13.6 million in the same period of 2010.  The commercial charge-offs in the second quarter of 2010 were primarily in our Florida loan portfolio. The allowance for loan losses was $19.1 million, or 1.97% of loans, excluding loans held for sale, at June 30, 2011, compared with $26.7 million, or 2.74% of loans, excluding loans held for sale, at June 30, 2010.  

At June 30, 2011, nonperforming assets were $23.8 million compared with $35.0 million at March 31, 2011 and $77.8 million at June 30, 2010. Of the nonperforming assets at June 30, 2011, $11.9 million were in Florida. Nonperforming loans were $16.6 million at June 30, 2011, compared with $27.7 million at March 31, 2011, a decrease of $11.2 million, or 40.3%. The decrease in nonperforming loans was due primarily to a combination of the resolution of a $6.6 million lending relationship in Texas and a $1.1 million commercial real estate loan in Florida. We also sold 3 nonperforming Florida commercial real estate loans totaling $3.5 million.

Investment in real estate was $7.2 million at June 30, 2011, compared with $7.3 million at March 31, 2011, a decrease of $111,000, or 1.5%. Restructured loans still accruing were $1.5 million at June 30, 2011, compared with $1.8 million at March 31, 2011. The decrease was due mainly to two residential loans in Houston.

As of June 30, 2011, our estimated Tier 1 risk-based, total risk-based and leverage capital ratios were 13.23%, 14.49%, and 9.67%, respectively. In addition, Encore Bank was considered "well capitalized" pursuant to regulatory capital definitions. Book value per common share and tangible book value per common share were $12.17 and $8.72 at June 30, 2011, compared with $11.97 and $8.48 at March 31, 2011.

Conference Call

Encore will host a conference call for investors and analysts that will be broadcast live via the Internet on Friday, July 29, 2011, at 10:30 a.m. Eastern Time. Interested parties may participate by calling 877-303-6295 at least ten minutes prior to the start time.

To listen to this conference call live via the Internet, please visit the Investor Relations section of the Company's web site at http://www.encorebank.com at least fifteen minutes prior to the call to register, download and install any necessary audio software. An audio archive of the call will also be available on the web site on or before Monday, August 1, 2011.

About Encore Bancshares, Inc.

Encore Bancshares, Inc. is a financial holding company headquartered in Houston, Texas and offers a broad range of banking, wealth management and insurance services through Encore Bank, N.A., and its affiliated companies. Encore Bank operates 11 private client offices in the Greater Houston area. Headquartered in Houston and with $1.5 billion in assets, Encore Bank builds relationships with professional firms, privately-owned businesses, investors and affluent individuals. Encore Bank offers a full range of business and personal banking products and services, as well as financial planning, wealth management, trust and insurance products through its trust division, Encore Trust, and its affiliated companies, Linscomb & Williams and Town & Country Insurance. Products and services offered by Encore Bank's affiliates are not FDIC insured. The Company's common stock is listed on the NASDAQ Global Market under the symbol "EBTX".

The Encore Bancshares, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4257

This press release contains certain financial information determined by methods other than in accordance with GAAP. Specifically, Encore reviews tangible book value per share, return on average tangible common equity and the tangible common equity to tangible assets ratio for internal planning and forecasting purposes. Encore reviews its net interest income, net interest spread and net interest margin on a tax equivalent basis, which is standard practice in the banking industry.  Encore has included in this press release information relating to these non-GAAP financial measures for the applicable periods presented. Encore's management believes these non-GAAP financial measures provide information useful to investors in understanding our financial results and believes that its presentation, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. These non-GAAP measures should not be considered a substitute for operating results determined in accordance with GAAP and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

This press release contains certain forward-looking information about Encore Bancshares that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve risks and uncertainties that may cause actual results to differ materially from those expressed in or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to:  competitive pressure among financial institutions; volatility and disruption in national and international financial markets; government intervention in the U.S. financial system; our ability to expand and grow our businesses and operations and to realize the cost savings and revenue enhancements expected from such activities; a deterioration of credit quality or a reduced demand for credit; incorrect assumptions underlying the establishment of and provisions made to the allowance for loan losses; changes in the interest rate environment; the continued service of key management personnel; our ability to attract, motivate and retain key employees; the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations; changes in availability of funds; our ability to fully realize our net deferred tax asset; our ability to raise capital when needed; general economic conditions, either nationally, regionally or in the market areas in which we operate; legislative or regulatory developments or changes in laws; changes in the securities markets and other risks that are described from time to time in our 2010 Annual Report on Form 10-K and other reports and documents filed with the Securities and Exchange Commission.

Encore Bancshares, Inc. and Subsidiaries
         
FINANCIAL HIGHLIGHTS
         
(Unaudited, amounts in thousands, except per share data)
     
  As of and for the Three As of and for the Six 
  Months Ended June 30, Months Ended June 30,
   2011   2010   2011   2010 
         
Operations Statement Data:        
Interest income  $ 16,383  $ 17,201  $ 32,222  $ 35,156
Interest expense  4,648  6,262  9,392  12,727
Net interest income  11,735  10,939  22,830  22,429
Provision for loan losses  1,919  18,013  4,089  22,973
 Net interest income after provision for loan losses  9,816  (7,074)  18,741  (544)
Noninterest income  7,334  7,947  14,400  14,856
Noninterest expense  14,112  19,395  28,467  37,659
Net earnings (loss) before income taxes  3,038  (18,522)  4,674  (23,347)
Income tax expense (benefit)  973  (5,869)  1,457  (8,443)
Net earnings (loss)  $ 2,065  $ (12,653)  $ 3,217  $ (14,904)
         
Earnings (loss) available to common shareholders  $ 1,507  $ (13,209)  $ 2,101  $ (16,016)
         
Common Share Data:        
Basic earnings (loss) per share (1)  $ 0.13  $ (1.16)  $ 0.18  $ (1.46)
Diluted earnings (loss) per share (1)  0.13  (1.16)  0.18  (1.46)
Book value per share  12.17  13.06  12.17  13.06
Tangible book value per share (2)  8.72  9.47  8.72  9.47
         
Average common shares outstanding   11,582  11,375  11,537  10,969
Diluted average common shares outstanding   11,628  11,375  11,602  10,969
Common shares outstanding at end of period  11,663  11,380  11,663  11,380
         
Selected Performance Ratios:        
Return on average assets 0.57% (3.13)% 0.45% (1.85)%
Return on average common equity (1) 4.33% (32.89)% 3.06% (20.24)%
Return on average tangible common equity (1)(2) 6.09% (44.09)% 4.32% (27.24)%
Taxable-equivalent net interest margin (2) 3.54% 2.92% 3.46% 3.01%
Efficiency ratio 70.78% 93.16% 74.31% 89.05%
Noninterest income to total revenue 38.46% 42.08% 38.68% 39.84%
 
(1) Using earnings (loss) available to common shareholders. 
(2) Non-GAAP measure. See calculation of tangible common equity and taxable-equivalent amounts in subsequent tables. 
         
 
Encore Bancshares, Inc. and Subsidiaries
             
CONSOLIDATED BALANCE SHEETS
             
(Unaudited, dollars in thousands, except per share data)
             
     June 30,   March 31,   Dec 31,   Sept 30,   June 30, 
     2011   2011   2010   2010   2010 
             
ASSETS          
Cash and due from banks  $ 13,025  $ 18,477  $ 13,523  $ 16,825  $ 14,718
Interest-bearing deposits in banks  91,790  49,109  49,478  231,866  314,624
Federal funds sold and other   904  856  1,098  993  902
Cash and cash equivalents   105,719  68,442  64,099  249,684  330,244
Securities available-for-sale, at estimated fair value  183,058  241,370  251,784  198,530  72,153
Securities held-to-maturity, at amortized cost  104,565  101,235  107,618  55,436  68,628
Loans held-for-sale, at lower of cost or fair value  863  2,913  10,915  111,505  77,914
Loans receivable  970,566  936,036  920,457  924,589  972,765
Allowance for loan losses  (19,110)  (19,008)  (18,639)  (20,967)  (26,675)
Net loans receivable  951,456  917,028  901,818  903,622  946,090
Federal Home Loan Bank of Dallas stock, at cost  9,810  10,206  9,610  9,602  9,593
Investment in real estate  7,200  7,311  9,298  10,852  13,602
Premises and equipment, net  6,545  6,757  7,023  7,284  7,567
Cash surrender value of life insurance policies  16,217  16,078  15,935  15,786  15,637
Goodwill  35,799  35,799  35,799  35,799  35,799
Other intangible assets, net  4,434  4,575  4,716  4,876  5,034
Other assets  40,829  46,467  47,882  44,430  40,085
Other assets held-for-sale  --  --  --  3,256  3,269
     $ 1,466,495  $ 1,458,181  $ 1,466,497  $ 1,650,662  $ 1,625,615
             
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits:          
Noninterest-bearing  $ 236,873  $ 219,629  $ 219,756  $ 205,927  $ 182,729
Interest-bearing  806,627  821,163  830,688  838,125  832,876
Deposits held-for-sale  --  --  --  187,433  184,106
Total deposits  1,043,500  1,040,792  1,050,444  1,231,485  1,199,711
Borrowings and repurchase agreements  222,879  221,582  219,777  220,818  219,602
Junior subordinated debentures  20,619  20,619  20,619  20,619  20,619
Other liabilities  7,783  7,274  9,016  8,028  7,804
Other liabilities held-for-sale  --  --  --  6  6
Total liabilities  1,294,781  1,290,267  1,299,856  1,480,956  1,447,742
             
Commitments and contingencies          
Shareholders' equity:          
Preferred stock  29,766  29,633  29,500  29,368  29,238
Common stock  11,733  11,603  11,479  11,421  11,416
Additional paid-in capital  123,771  123,329  122,678  121,939  121,533
Retained earnings   6,742  5,235  4,641  6,098  15,079
Common stock in treasury, at cost  (735)  (497)  (455)  (389)  (346)
Accumulated other comprehensive income (loss)  437  (1,389)  (1,202)  1,269  953
Shareholders' equity  171,714  167,914  166,641  169,706  177,873
     $ 1,466,495  $ 1,458,181  $ 1,466,497  $ 1,650,662  $ 1,625,615
             
Ratios and Common Share Data:          
Leverage ratio (1) 9.67% 9.29% 8.10% 9.18% 9.93%
Tier 1 risk-based capital ratio (1) 13.23% 13.05% 12.83% 13.53% 14.59%
Total risk-based capital ratio (1) 14.49% 14.31% 14.09% 14.79% 15.86%
Book value per share  $ 12.17  $ 11.97  $ 12.00  $ 12.33  $ 13.06
Tangible book value per share (2)  8.72  8.48  8.45  8.76  9.47
Tangible common equity to tangible assets (2) 7.13% 6.91% 6.78% 6.19% 6.80%
             
(1) Estimated at June 30, 2011.          
(2) Non-GAAP measure. See calculation of tangible common equity in subsequent table.     
 
 
Encore Bancshares, Inc. and Subsidiaries
               
CONSOLIDATED STATEMENTS OF OPERATIONS
               
(Unaudited, amounts in thousands, except per share data)
               
  Three Months Ended Six Months Ended
  June 30, March 31, Dec 31, Sept 30, June 30, June 30,
   2011   2011   2010   2010   2010   2011   2010 
Interest income:              
Loans, including fees  $ 14,254  $ 13,442  $ 14,646  $ 15,408  $ 15,441  $ 27,696  $ 31,135
Securities  2,025  2,305  1,872  1,276  1,526  4,330  3,572
Federal funds sold and other  104  92  207  238  234  196  449
Total interest income  16,383  15,839  16,725  16,922  17,201  32,222  35,156
Interest expense:              
Deposits  2,234  2,340  2,562  2,827  2,962  4,574  6,004
Deposits held-for-sale  --  --  636  698  863  --  1,873
Borrowings and repurchase agreements  2,117  2,106  2,128  2,127  2,139  4,223  4,255
Junior subordinated debentures  297  298  298  301  298  595  595
Total interest expense  4,648  4,744  5,624  5,953  6,262  9,392  12,727
Net interest income  11,735  11,095  11,101  10,969  10,939  22,830  22,429
Provision for loan losses  1,919  2,170  2,597  9,599  18,013  4,089  22,973
Net interest income after provision for loan losses  9,816  8,925  8,504  1,370  (7,074)  18,741  (544)
Noninterest income:              
Trust and investment management fees  5,126  5,072  5,122  4,639  4,591  10,198  9,209
Mortgage banking  97  140  501  150  78  237  114
Insurance commissions and fees  1,587  1,440  1,120  1,524  1,488  3,027  3,127
Net gain (loss) on sale of available-for-sale securities  (64)  (31)  38  261  120  (95)  219
Gain on sale of branches  --  --  2,567  --  1,115  --  1,115
Other  588  445  511  454  555  1,033  1,072
Total noninterest income  7,334  7,066  9,859  7,028  7,947  14,400  14,856
Noninterest expense:              
Compensation  8,414  8,706  8,469  8,503  8,638  17,120  17,189
Occupancy   1,128  1,287  1,339  1,395  1,454  2,415  2,932
Equipment  268  241  261  274  330  509  693
Advertising and promotion  156  156  137  146  153  312  334
Outside data processing  793  783  910  874  897  1,576  1,767
Professional fees  905  1,134  1,165  1,325  1,435  2,039  2,356
Intangible amortization  143  140  160  158  159  283  317
FDIC assessment  472  798  790  1,532  703  1,270  1,358
Foreclosed real estate expenses, net  666  83  119  4,458  1,402  749  2,526
Write down of assets held-for-sale  427  21  5,744  1,012  2,793  448  5,328
Other  740  1,006  1,119  1,051  1,431  1,746  2,859
Total noninterest expense  14,112  14,355  20,213  20,728  19,395  28,467  37,659
Net earnings (loss) before income taxes   3,038  1,636  (1,850)  (12,330)  (18,522)  4,674  (23,347)
Income tax expense (benefit)  973  484  (950)  (3,904)  (5,869)  1,457  (8,443)
Net earnings (loss)  $ 2,065  $ 1,152  $ (900)  $ (8,426)  $ (12,653)  $ 3,217  $ (14,904)
Earnings (loss) available to common shareholders  $ 1,507  $ 594  $ (1,457)  $ (8,981)  $ (13,209)  $ 2,101  $ (16,016)
Earnings (loss) per common share:              
Basic  $ 0.13  $ 0.05  $ (0.13)  $ (0.79)  $ (1.16)  $ 0.18  $ (1.46)
Diluted  0.13  0.05  (0.13)  (0.79)  (1.16)  0.18  (1.46)
Average common shares outstanding  11,582  11,491  11,391  11,380  11,375  11,537  10,969
Diluted average common shares outstanding  11,628  11,575  11,391  11,380  11,375  11,602  10,969
 
 
Encore Bancshares, Inc. and Subsidiaries
           
AVERAGE CONSOLIDATED BALANCE SHEETS
           
(Unaudited, dollars in thousands)
           
  Three Months Ended 
  June 30, March 31, Dec 31, Sept 30, June 30,
   2011   2011   2010   2010   2010 
           
Assets:          
Interest-earning assets:          
Loans  $ 955,019  $ 933,361  $ 1,004,472  $ 1,056,657  $ 1,059,695
Securities  315,681  354,250  292,241  209,365  186,777
Federal funds sold and other  71,909  60,084  243,304  290,541  275,148
Total interest-earning assets  1,342,609  1,347,695  1,540,017  1,556,563  1,521,620
Less: Allowance for loan losses  (19,219)  (18,604)  (20,433)  (27,144)  (24,796)
Noninterest-earning assets  127,583  131,183  131,861  128,197  122,236
Noninterest-earning assets held-for-sale  --  --  4,403  4,196  4,481
Total assets  $ 1,450,973  $ 1,460,274  $ 1,655,848  $ 1,661,812  $ 1,623,541
           
Liabilities and shareholders' equity:          
Interest-bearing liabilities:          
Interest checking  $ 163,926  $ 162,577  $ 148,875  $ 139,820  $ 145,856
Money market and savings   269,422  287,029  298,725  279,084  238,000
Time deposits  379,721  379,142  386,634  410,318  415,615
Interest-bearing deposits held-for-sale  --  --  167,869  171,805  201,919
Total interest-bearing deposits  813,069  828,748  1,002,103  1,001,027  1,001,390
Borrowings and repurchase agreements  223,145  224,792  220,042  220,068  218,794
Junior subordinated debentures  20,619  20,619  20,619  20,619  20,619
Total interest-bearing liabilities  1,056,833  1,074,159  1,242,764  1,241,714  1,240,803
Noninterest-bearing liabilities:          
Noninterest-bearing deposits  217,624  210,885  220,169  220,166  168,021
Noninterest-bearing deposits held-for-sale  --  --  14,767  14,983  17,830
Other liabilities  7,225  8,344  8,019  7,132  6,384
Other liabilities held-for-sale  --  --  197  216  253
Total liabilities  1,281,682  1,293,388  1,485,916  1,484,211  1,433,291
Shareholders' equity   169,291  166,886  169,932  177,601  190,250
Total liabilities and shareholders' equity   $ 1,450,973  $ 1,460,274  $ 1,655,848  $ 1,661,812  $ 1,623,541
 
 
Encore Bancshares, Inc. and Subsidiaries
           
SELECTED FINANCIAL DATA
           
(Unaudited, dollars in thousands)
           
  June 30, March 31, Dec 31, Sept 30, June 30,
Loan Portfolio:  2011   2011   2010   2010   2010 
Commercial:          
Commercial  $ 194,260  $ 164,053  $ 147,090  $ 138,594  $ 131,712
Commercial real estate   167,973  168,893  166,043  154,476  189,471
Real estate construction   54,769  52,106  46,326  54,140  55,332
Total commercial  417,002  385,052  359,459  347,210  376,515
Consumer:          
Residential real estate first lien  205,171  205,012  205,531  207,386  215,911
Residential real estate second lien  262,958  263,286  269,727  280,245  290,934
Home equity lines  58,553  59,832  60,609  63,983  66,311
Consumer other  26,882  22,854  25,131  25,765  23,094
Total consumer  553,564  550,984  560,998  577,379  596,250
Loans receivable  970,566  936,036  920,457  924,589  972,765
Loans held-for-sale  863  2,913  10,915  111,505  77,914
Total loans  $ 971,429  $ 938,949  $ 931,372  $ 1,036,094  $ 1,050,679
           
Asset Quality:          
Nonaccrual loans - Texas (1)  $ 7,655  $ 14,557  $ 15,167  $ 17,445  $ 22,441
Nonaccrual loans - Florida (1)  8,897  13,169  11,310  34,251  41,773
Total nonaccrual loans (1)  16,552  27,726  26,477  51,696  64,214
Investment in real estate - Texas  4,155  4,226  4,783  5,762  6,194
Investment in real estate - Florida  3,045  3,085  4,515  5,090  7,408
Total investment in real estate  7,200  7,311  9,298  10,852  13,602
Total nonperforming assets  $ 23,752  $ 35,037  $ 35,775  $ 62,548  $ 77,816
Accruing loans past due 90 days or more  $ --  $ --  $ 313  $ --  $ --
Restructured loans still accruing  $ 1,522  $ 1,755  $ 804  $ 2,570  $ 1,072
           
Asset Quality Ratios:          
Nonperforming assets to total loans and investment in real estate 2.43% 3.70% 3.80% 5.97% 7.31%
Net charge-offs to average total loans  0.76% 0.78% 1.95% 5.75% 6.23%
Allowance for loan losses to period end loans (excluding loans held-for-sale) 1.97% 2.03% 2.02% 2.27% 2.74%
Allowance for loan losses to nonperforming loans (excluding loans held-for-sale) 115.45% 74.72% 94.11% 88.89% 45.47%
           
Deposits:          
Noninterest-bearing deposits  $ 236,873  $ 219,629  $ 219,756  $ 205,927  $ 182,729
Interest checking  179,292  155,262  173,839  145,257  152,041
Money market and savings  252,100  285,612  278,507  293,381  259,189
Time deposits less than $100  112,975  114,819  117,974  124,132  132,514
Core deposits   781,240  775,322  790,076  768,697  726,473
Time deposits $100 and greater  236,653  239,936  239,129  251,271  265,076
Brokered deposits  25,607  25,534  21,239  24,084  24,056
Deposits held-for-sale  --  --  --  187,433  184,106
Total deposits  $ 1,043,500  $ 1,040,792  $ 1,050,444  $ 1,231,485  $ 1,199,711
Assets Under Management  $ 2,863,293  $ 2,855,544  $ 2,857,390  $ 2,732,757  $ 2,592,186
 
(1) Nonaccrual troubled debt restructurings are included in nonaccrual loans.
 
 
Encore Bancshares, Inc. and Subsidiaries
           
ALLOWANCE FOR LOAN LOSSES
           
(Unaudited, dollars in thousands)
           
  Three Months Ended
  June 30, March 31, Dec 31, Sept 30, June 30,
   2011   2011   2010   2010   2010 
           
Allowance for loan losses at beginning of quarter  $ 19,008  $ 18,639  $ 20,967  $ 26,675  $ 25,132
           
Charge-offs:          
Commercial:          
Commercial  (112)  (196)  (21)  (160)  (402)
Commercial real estate  (752)  (465)  (14)  (10,049)  (10,118)
Real estate construction   (137)  (4)  (2,329)  (3,407)  (3,101)
Total commercial   (1,001)  (665)  (2,364)  (13,616)  (13,621)
           
Consumer:          
Residential real estate first lien   (305)  (222)  (1,261)  (503)  (1,707)
Residential real estate second lien   (513)  (1,059)  (1,106)  (879)  (1,301)
Home equity lines   (360)  (296)  (430)  (664)  (237)
Consumer other   (67)  (36)  (9)  (73)  (248)
Total consumer  (1,245)  (1,613)  (2,806)  (2,119)  (3,493)
           
Total charge-offs  (2,246)  (2,278)  (5,170)  (15,735)  (17,114)
           
Recoveries:          
Commercial:          
Commercial  10  3  52  157  543
Commercial real estate   141  12  --  --  17
Real estate construction   18  131  54  1  3
Total commercial   169  146  106  158  563
           
Consumer:          
Residential real estate first lien   41  223  --  161  9
Residential real estate second lien   123  71  31  36  27
Home equity lines   23  19  80  11  11
Consumer other   73  18  28  62  34
Total consumer  260  331  139  270  81
           
Total recoveries  429  477  245  428  644
           
Net charge-offs  (1,817)  (1,801)  (4,925)  (15,307)  (16,470)
           
Provision for loan losses  1,919  2,170  2,597  9,599  18,013
           
Allowance for loan losses at end of quarter  $ 19,110  $ 19,008  $ 18,639  $ 20,967  $ 26,675
 
 
Encore Bancshares, Inc. and Subsidiaries
               
SEGMENT OPERATIONS
               
(Unaudited, dollars in thousands)
               
  As of and for the Three Months Ended As of and for the Six 
  June 30, March 31, Dec 31, Sept 30, June 30, Months Ended June 30,
   2011   2011   2010   2010   2010   2011   2010 
Banking               
Net interest income   $ 12,014  $ 11,367  $ 11,361  $ 11,231  $ 11,191  $ 23,381  $ 22,933
Provision for loan losses  1,919  2,170  2,597  9,599  18,013  4,089  22,973
Noninterest income  535  529  3,602  857  1,800  1,064  2,447
Noninterest expense  9,348  9,563  15,476  16,133  14,747  18,911  28,422
Earnings (loss) before income taxes  1,282  163  (3,110)  (13,644)  (19,769)  1,445  (26,015)
Income tax expense (benefit)  353  (34)  (1,309)  (4,370)  (6,311)  319  (9,387)
Net earnings (loss)   $ 929  $ 197  $ (1,801)  $ (9,274)  $ (13,458)  $ 1,126  $ (16,628)
Total assets at period end  $ 1,469,429  $ 1,467,887  $ 1,473,837  $ 1,650,297  $ 1,628,706  $ 1,469,429  $ 1,628,706
               
Wealth Management              
Net interest income   $ 16  $ 24  $ 34  $ 34  $ 41  $ 40  $ 81
Noninterest income  5,132  5,089  5,130  4,638  4,593  10,221  9,211
Noninterest expense  3,523  3,643  3,612  3,442  3,547  7,166  7,109
Earnings before income taxes  1,625  1,470  1,552  1,230  1,087  3,095  2,183
Income tax expense   574  516  475  438  385  1,090  773
Net earnings   $ 1,051  $ 954  $ 1,077  $ 792  $ 702  $ 2,005  $ 1,410
Total assets at period end  $ 56,105  $ 64,157  $ 63,254  $ 63,933  $ 62,518  $ 56,105  $ 62,518
               
Insurance              
Net interest income   $ 2  $ 2  $ 4  $ 5  $ 5  $ 4  $ 10
Noninterest income  1,667  1,448  1,127  1,533  1,554  3,115  3,198
Noninterest expense  1,241  1,149  1,125  1,153  1,101  2,390  2,128
Earnings before income taxes  428  301  6  385  458  729  1,080
Income tax expense (benefit)   150  106  (12)  134  161  256  379
Net earnings   $ 278  $ 195  $ 18  $ 251  $ 297  $ 473  $ 701
Total assets at period end  $ 7,370  $ 6,827  $ 9,095  $ 9,063  $ 8,714  $ 7,370  $ 8,714
               
Other              
Net interest expense  $ (297)  $ (298)  $ (298)  $ (301)  $ (298)  $ (595)  $ (595)
Loss before income taxes  (297)  (298)  (298)  (301)  (298)  (595)  (595)
Income tax benefit  (104)  (104)  (104)  (106)  (104)  (208)  (208)
Net loss  $ (193)  $ (194)  $ (194)  $ (195)  $ (194)  $ (387)  $ (387)
Total assets at period end  $ (66,409)  $ (80,690)  $ (79,689)  $ (72,631)  $ (74,323)  $ (66,409)  $ (74,323)
               
Consolidated               
Net interest income   $ 11,735  $ 11,095  $ 11,101  $ 10,969  $ 10,939  $ 22,830  $ 22,429
Provision for loan losses  1,919  2,170  2,597  9,599  18,013  4,089  22,973
Noninterest income  7,334  7,066  9,859  7,028  7,947  14,400  14,856
Noninterest expense  14,112  14,355  20,213  20,728  19,395  28,467  37,659
Earnings (loss) before income taxes  3,038  1,636  (1,850)  (12,330)  (18,522)  4,674  (23,347)
Income tax expense (benefit)   973  484  (950)  (3,904)  (5,869)  1,457  (8,443)
Net earnings (loss)   $ 2,065  $ 1,152  $ (900)  $ (8,426)  $ (12,653)  $ 3,217  $ (14,904)
Total assets at period end  $ 1,466,495  $ 1,458,181  $ 1,466,497  $ 1,650,662  $ 1,625,615  $ 1,466,495  $ 1,625,615
 
 
Encore Bancshares, Inc. and Subsidiaries
             
TAXABLE-EQUIVALENT (TE) YIELD ANALYSIS (1)
             
(Unaudited, dollars in thousands)
             
  Three Months Ended June 30,
  2011 2010
  Average Interest Average Average Interest Average
  Outstanding Income/ Yield/ Outstanding Income/ Yield/
  Balance Expense Rate Balance Expense Rate
Assets:            
Interest-earning assets:            
Loans - TE yield  $ 955,019  $ 14,304 6.01%  $ 1,059,695  $ 15,505 5.87%
Securities - TE yield  315,681  2,087 2.65%  186,777  1,586 3.41%
Federal funds sold and other  71,909  104 0.58%  275,148  234 0.34%
Total interest-earning assets - TE yield  1,342,609  16,495 4.93%  1,521,620  17,325 4.57%
Less: Allowance for loan losses  (19,219)      (24,796)    
Noninterest-earning assets  127,583      122,236    
Noninterest-earning assets held-for-sale  --      4,481    
Total assets  $ 1,450,973      $ 1,623,541    
             
Liabilities and shareholders' equity:            
Interest-bearing liabilities:            
Interest checking  $ 163,926  81 0.20%  $ 145,856  $ 113 0.31%
Money market and savings  269,422  274 0.41%  238,000  447 0.75%
Time deposits  379,721  1,879 1.98%  415,615  2,402 2.32%
Interest-bearing deposits held-for-sale  --   --     201,919  863 1.71%
Total interest-bearing deposits  813,069  2,234 1.10%  1,001,390  3,825 1.53%
Borrowings and repurchase agreements  223,145  2,117 3.81%  218,794  2,139 3.92%
Junior subordinated debentures  20,619  297 5.78%  20,619  298 5.80%
Total interest-bearing liabilities  1,056,833  4,648 1.76%  1,240,803  6,262 2.02%
Noninterest-bearing liabilities:            
Noninterest-bearing deposits  217,624      168,021    
Noninterest-bearing deposits held-for-sale  --      17,830    
Other liabilities  7,225      6,384    
Other liabilities held-for-sale  --      253    
Total liabilities  1,281,682      1,433,291    
Shareholders' equity   169,291      190,250    
Total liabilities and shareholders' equity   $ 1,450,973      $ 1,623,541    
             
Net interest income - TE    $ 11,847      $ 11,063  
             
Net interest spread - TE     3.17%     2.55%
Net interest margin - TE     3.54%     2.92%
             
(1) Non-GAAP measure. See calculation of taxable-equivalent amounts in subsequent table.
 
 
Encore Bancshares, Inc. and Subsidiaries
             
TAXABLE-EQUIVALENT (TE) YIELD ANALYSIS (1)
             
(Unaudited, dollars in thousands)
             
  Six Months Ended June 30,
  2011 2010
  Average Interest Average Average Interest Average
  Outstanding Income/ Yield/ Outstanding Income/ Yield/
  Balance Expense Rate Balance Expense Rate
Assets:            
Interest-earning assets:            
Loans - TE yield  $ 944,250  $ 27,799 5.94%  $ 1,062,022  $ 31,265 5.94%
Securities - TE yield  334,859  4,456 2.68%  208,463  3,692 3.57%
Federal funds sold and other  66,029  196 0.60%  247,736  449 0.37%
Total interest-earning assets - TE yield  1,345,138  32,451 4.86%  1,518,221  35,406 4.70%
Less: Allowance for loan losses  (18,913)      (25,729)    
Noninterest-earning assets  129,373      124,249    
Noninterest-earning assets held-for-sale  --      5,921    
Total assets  $ 1,455,598      $ 1,622,662    
             
Liabilities and shareholders' equity:            
Interest-bearing liabilities:            
Interest checking  $ 163,255  $ 172 0.21%  $ 149,420  $ 235 0.32%
Money market and savings  278,177  583 0.42%  239,140  953 0.80%
Time deposits  379,433  3,819 2.03%  408,075  4,816 2.38%
Interest-bearing deposits held-for-sale  --   --     210,814  1,873 1.79%
Total interest-bearing deposits  820,865  4,574 1.12%  1,007,449  7,877 1.58%
Borrowings and repurchase agreements  223,964  4,223 3.80%  219,771  4,255 3.90%
Junior subordinated debentures  20,619  595 5.82%  20,619  595 5.82%
Total interest-bearing liabilities  1,065,448  9,392 1.78%  1,247,839  12,727 2.06%
Noninterest-bearing liabilities:            
Noninterest-bearing deposits  214,273      157,459    
Noninterest-bearing deposits held-for-sale  --      17,523    
Other liabilities  7,782      10,873    
Other liabilities held-for-sale  --      278    
Total liabilities  1,287,503      1,433,972    
Shareholders' equity   168,095      188,690    
Total liabilities and shareholders' equity   $ 1,455,598      $ 1,622,662    
             
Net interest income - TE    $ 23,059      $ 22,679  
             
Net interest spread - TE     3.08%     2.64%
Net interest margin - TE     3.46%     3.01%
             
(1) Non-GAAP measure. See calculation of taxable-equivalent amounts in subsequent table.
 
 
Encore Bancshares, Inc. and Subsidiaries
           
NON-GAAP FINANCIAL MEASURES
           
(Unaudited, amounts in thousands)
           
   June 30,   March 31,   Dec 31,   Sept 30,   June 30, 
   2011   2011   2010   2010   2010 
           
Shareholders' equity (GAAP)  $ 171,714  $ 167,914  $ 166,641  $ 169,706  $ 177,873
Less: Preferred stock  29,766  29,633  29,500  29,368  29,238
Goodwill and other intangible assets, net  40,233  40,374  40,515  40,675  40,833
Tangible common equity (1)  $ 101,715  $ 97,907  $ 96,626  $ 99,663  $ 107,802
           
Total assets (GAAP)  $ 1,466,495  $ 1,458,181  $ 1,466,497  $ 1,650,662  $ 1,625,615
Less: Goodwill and other intangible assets, net  40,233  40,374  40,515  40,675  40,833
Tangible assets  $ 1,426,262  $ 1,417,807  $ 1,425,982  $ 1,609,987  $ 1,584,782
           
Common shares outstanding at end of period  11,663  11,552  11,431  11,380  11,380
           
(1) Tangible common equity, a non-GAAP financial measure, includes total equity, less preferred equity, goodwill and other intangible assets. Management reviews tangible common equity along with other measures of capital as part of its financial analyses and has included this information because of current interest on the part of market participants in tangible common equity as a measure of capital. The methodology of determining tangible common equity may differ among companies. 
           
           
  Three Months Ended   Six Months Ended
  June 30,   June 30,
   2011   2010     2011   2010 
Net interest income (GAAP)  $ 11,735  $ 10,939    $ 22,830  $ 22,429
Taxable-equivalent adjustment (1)  112  124    229  250
Net interest income on a taxable-equivalent basis   $ 11,847  $ 11,063    $ 23,059  $ 22,679
           
(1) Net interest income, net interest spread and net interest margin are reported on a taxable-equivalent basis. The taxable-equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets. Management believes that it is a standard practice in the banking industry to present net interest income, net interest spread and net interest margin on a fully taxable-equivalent basis. Management believes these measures provide useful information to investors by allowing them to make peer comparisons. 
CONTACT: L. Anderson Creel
         Chief Financial Officer
         713.787.3138

         James S. D'Agostino, Jr.
         Chairman and CEO
         713.787.3103