Texas Capital Bancshares Announces Operating Results for Q2 2006

-- Net income decreased 4%

-- EPS decreased 4%

-- Net income and EPS %'s remained unchanged versus Q2-2005 as adjusted for FAS 123R

-- Loans held for investment grew 34%

-- Total loans grew 34%

-- Demand deposits grew 12%

-- Total deposits grew 48%

"We are pleased by the strong growth in both loans and deposits inthe quarter," said Jody Grant, Chairman and CEO. "We are increasingmarket share with credit quality remaining our highest priority. Theprovision we incurred resulted primarily from exceptional loan growthfrom the beginning of 2006 and two specific credits. We have seen thatcertain newer and developing lines of business are performing underexpectation, and accordingly, we believe lowering our guidance for2006 net income to $29 million to $31 million is appropriate. Weremain confident in our middle market business model and believe thefundamentals are in place for the long-term success of Texas Capital."

FINANCIAL SUMMARY
(dollars and shares in thousands)

Q2 2006 Q2 2005 % Change
----------- ----------- ---------
OPERATING RESULTS
Net Income $6,341 $6,587 (4)%
Diluted EPS $.24 $.25 (4)%
ROA .78% .97%
ROE 11.39% 13.14%
Diluted Shares 26,525 26,543

BALANCE SHEET
Total Assets $3,412,480 $2,818,039 21%
Demand Deposits 532,130 475,516 12%
Total Deposits 2,922,494 1,971,005 48%
Loans Held for Investment 2,417,814 1,805,630 34%
Total Loans 2,582,307 1,926,338 34%
Stockholders' Equity 224,693 205,880 9%

DETAILED FINANCIALS

Texas Capital Bancshares, Inc. reported net income of $6.3 millionfor the second quarter of 2006 compared to $6.6 million for the secondquarter of 2005. On a fully diluted basis, earnings per share were$.24 for the three months ended June 30, 2006, compared to $.25 forthe same quarter last year, representing a decrease of 4 percent. On afully diluted basis, assuming FAS 123R had been adopted at June 30,2005, the earnings per share in the second quarter of 2006 would havebeen unchanged from the $.24 for second quarter of 2005. FAS 123Rexpense for the second quarter of 2006 is approximately $695,000,representing $.02 on a fully diluted basis.

Return on average equity was 11.39 percent and return on averageassets was .78 percent for the second quarter of 2006 compared to13.14 percent and .97 percent, respectively, for the second quarter of2005. The primary reason for the decline in return on equity andreturn on assets was related to the $2.25 million of loan lossprovision in the second quarter of 2006.

Net interest income was $31.1 million for the second quarter of2006, compared to $24.5 million for the second quarter of 2005. Theincrease was due to an increase in average earning assets of $507.5million over levels reported in the second quarter of 2005 and animprovement in the net interest margin. The increase in averageearning assets included a $604.9 million increase in average loansheld for investment and an increase of $52.8 million in average loansheld for sale, offset by a decrease of $147.2 million in averagesecurities. The net interest margin in the second quarter of 2006 was4.10 percent, a 22 basis point increase from the second quarter of2005 and a 1 basis point increase from the first quarter of 2006. Theimprovement in the net interest margin for the second quarter of 2006as compared to the second quarter of 2005 resulted primarily from a169 basis point increase in the yield on earning assets while interestexpense as a percentage of earning assets increased by only 146 basispoints.

Average interest bearing liabilities increased $449.0 million fromthe second quarter of 2005, which included a $511.7 million increasein interest bearing deposits offset by a $106.7 million decrease inother borrowings. For the same periods, the average balance of demanddeposits increased to $468.4 million from $397.3 million.

Key measures of credit quality remained favorable and consistentwith previous guidance for 2006 operating results. In the secondquarter of 2006, net charge-offs were $1.5 million, compared to netrecoveries of $59,000, in the second quarter of 2005 and netrecoveries of $12,000 in the first quarter of 2006. For the mostrecent 12-month period, the net charge-off ratio was .07 percent.Non-accrual loans were $5.1 million, or .21 percent of loans, at theend of the second quarter of 2006, compared to $5.7 million, or .32percent of loans, at the end of second quarter of 2005. Loans 90 dayspast due and still accruing were $2.7 million at the end of the secondquarter of 2006 and included $2.5 million in premium finance loans,compared to $0 at the end of the second quarter of 2005. The premiumfinance loans are primarily secured by obligations of insurancecarriers to refund premiums on cancelled insurance policies. Therefund of premiums from the insurance carriers can take up to 180 daysfrom the cancellation date. Due to the combined effects of loan growthand the increase in loan charge-offs as compared to prior quarters,the Company recorded a $2.25 million provision for loan losses in thesecond quarter of 2006. Reserve coverage of historical losses,non-performing assets and classified loans remains strong. Inmanagement's opinion, the reserve is sufficient to cover allreasonably expected losses in the portfolio and is derived fromconsistent application of the methodology for establishing theadequacy of reserves for Texas Capital Bank's loan portfolio.

Non-interest income for the second quarter of 2006 increased $2.2million, or 46 percent, to $6.9 million from $4.7 million in thesecond quarter of 2005. The increase is primarily related to a$584,000 increase in insurance commission income from $172,000 to$756,000 due to increased focus on the insurance business. Rentalincome on leased equipment increased $814,000 related to expansion ofour operating lease portfolio. Additionally, trust fee incomeincreased $251,000 due to continued growth of trust assets, and gainon sale of loans increased $239,000.

Non-interest expense for the second quarter of 2006 increased $6.9million, or 36 percent, to $26.1 million from $19.2 million in thesecond quarter of 2005. The increase is primarily related to a $4.4million increase in salaries and employee benefits to $16.3 millionfrom $11.9 million. The increase in salaries and employee benefitsresulted from increases in commissions and incentives for bothresidential lending and insurance lines of business, the total numberof employees related to the addition of the premium finance businessand general business growth. Occupancy expense increased $1.3 millionfrom $1.9 million to $3.2 million in the second quarter of 2006relating to our general business growth, continued growth in theresidential mortgage lending division, and depreciation related toexpansion of our operating lease portfolio.

On April 28, 2006, Texas Capital Bancshares, Inc. issued $25.8million of trust preferred, which matures in 2036. The proceeds wereused to augment capital for support of future growth.

ABOUT TEXAS CAPITAL BANCSHARES, INC.

Texas Capital Bancshares, Inc. (Nasdaq:TCBI) is the parent companyof Texas Capital Bank, a commercial bank that delivers highlypersonalized financial services to businesses and private clients.Headquartered in Dallas, the Bank has full-service locations inAustin, Dallas, Fort Worth, Houston and San Antonio.

This release contains forward-looking statements, which aresubject to risks and uncertainties. A number of factors, many of whichare beyond Texas Capital Bancshares' control, could cause actualresults to differ materially from future results expressed or impliedby such forward-looking statements. These risks and uncertaintiesinclude the risk of adverse impacts from general economic conditions,competition, interest rate sensitivity and exposure to regulatory andlegislative changes. These and other factors that could cause resultsto differ materially from those described in the forward-lookingstatements can be found in the Form 10-K and other filings made byTexas Capital Bancshares with the Securities and Exchange Commission.
TEXAS CAPITAL BANCSHARES, INC.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
(Dollars in thousands except per share data)


2nd Quarter 1st Quarter 4th Quarter
2006 2006 2005
----------- ----------- -----------
CONSOLIDATED STATEMENT OF
OPERATIONS
Interest income $59,896 $52,807 $49,195
Interest expense 28,770 24,086 20,734
----------- ----------- -----------
Net interest income 31,126 28,721 28,461
Provision for loan losses 2,250 -- --
----------- ----------- -----------
Net interest income after provision
for loan losses 28,876 28,721 28,461
Non-interest income 6,859 6,072 5,986
Non-interest expense 26,112 24,713 22,736
----------- ----------- -----------
Income before income taxes 9,623 10,080 11,711
Income tax expense 3,282 3,437 3,966
----------- ----------- -----------
Net income $6,341 $6,643 $7,745
=========== =========== ===========
Diluted EPS $.24 $.25 $.29

Diluted shares 26,524,552 26,567,893 26,736,858

CONSOLIDATED BALANCE SHEET DATA
Total assets $3,412,480 $3,192,932 $3,042,225
Loans held for investment 2,417,814 2,263,007 2,075,961
Loans held for sale 164,493 130,285 111,178
Securities 573,053 604,987 630,482
Demand deposits 532,130 481,410 512,294
Total deposits 2,922,494 2,463,719 2,495,179
Other borrowings 173,730 441,991 265,721
Long-term debt 72,168 46,394 46,394
Stockholders' equity 224,693 221,766 215,523

End of period shares 25,940,874 25,854,651 25,771,718
Book value (excluding securities
gains/losses) $9.20 $8.94 $8.68

SELECTED FINANCIAL RATIOS
Net interest margin 4.10% 4.09% 4.13%
Return on average assets .78% .88% 1.04%
Return on average equity 11.39% 12.22% 14.53%
Non-interest expense to earning
assets 3.42% 3.49% 3.28%
Efficiency ratio 68.7% 71.0% 66.0%
Tier 1 capital ratio 10.1% 9.6% 10.1%
Total capital ratio 10.7% 10.3% 10.8%
Tier 1 leverage ratio 9.1% 8.6% 8.7%

ASSET QUALITY SUMMARY
Net charge-offs (recoveries) $1,513 $(12) $11
Net charge-offs (recoveries) to
average loans(1) .26% (.00)% .00%
Net charge-offs (recoveries) to
average loans for last twelve
months(1) .07% (.01)% (.01)%
Non-accrual loans $5,063 $6,032 $5,657
Loans past due (90 days) $2,746 $2,824 $2,795
Non-accrual loans to loans(1) .21% .27% .27%
Loans past due 90 days to loans(1) .11% .12% .13%
Non-performing loans to loans(1) .32% .39% .41%
Reserve to loans(1) .81% .84% .91%


3rd Quarter 2nd Quarter
2005 2005
----------- -----------
CONSOLIDATED STATEMENT OF OPERATIONS
Interest income $45,146 $39,167
Interest expense 18,188 14,683
----------- -----------
Net interest income 26,958 24,484
Provision for loan losses -- --
----------- -----------
Net interest income after provision for loan
losses 26,958 24,484
Non-interest income 5,790 4,694
Non-interest expense 21,249 19,190
----------- -----------
Income before income taxes 11,499 9,988
Income tax expense 3,915 3,401
----------- -----------
Net income $7,584 $6,587
=========== ===========
Diluted EPS $.28 $.25

Diluted shares 26,676,335 26,543,191

CONSOLIDATED BALANCE SHEET DATA
Total assets $2,932,662 $2,818,039
Loans held for investment 1,935,818 1,805,630
Loans held for sale 118,929 120,708
Securities 674,792 725,554
Demand deposits 457,333 475,516
Total deposits 2,312,345 1,971,005
Other borrowings 366,501 610,254
Long-term debt 20,620 20,620
Stockholders' equity 212,318 205,880

End of period shares 25,672,369 25,616,829
Book value (excluding securities gains/losses) $8.36 $8.06

SELECTED FINANCIAL RATIOS
Net interest margin 3.97% 3.88%
Return on average assets 1.04% .97%
Return on average equity 14.41% 13.14%
Non-interest expense to earning assets 3.10% 3.01%
Efficiency ratio 64.9% 65.8%
Tier 1 capital ratio 9.5% 9.9%
Total capital ratio 10.3% 10.7%
Tier 1 leverage ratio 7.8% 8.1%

ASSET QUALITY SUMMARY
Net charge-offs (recoveries) $(134) $(59)
Net charge-offs (recoveries) to average
loans(1) (.03)% (.01)%
Net charge-offs (recoveries) to average loans
for last twelve months(1) .00% .01%
Non-accrual loans $1,353 $5,718
Loans past due (90 days) $941 $--
Non-accrual loans to loans(1) .07% .32%
Loans past due 90 days to loans(1) .05% .00%
Non-performing loans to loans(1) .12% .32%
Reserve to loans(1) .98% 1.04%

(1) Excludes loans held for sale.



TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
June 30, June 30, %
2006 2005 Change
----------- ----------- --------
Assets
Cash and due from banks $163,737 $107,982 52%
Federal funds sold -- 5,000 (100)%
Securities, available-for-sale 573,053 725,554 (21)%
Loans held for sale 164,493 120,708 36%
Loans held for investment (net of
unearned income) 2,417,814 1,805,630 34%
Less: Allowance for loan losses 19,646 18,774 5%
----------- ----------- --------
Loans held for investment, net 2,398,168 1,786,856 34%
Premises and equipment, net 26,031 5,398 382%
Accrued interest receivable and other
assets 74,590 60,124 24%
Goodwill and intangibles, net 12,408 6,417 93%
----------- ----------- --------
Total assets $3,412,480 $2,818,039 21%
=========== =========== ========

Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing $532,130 $475,516 12%
Interest bearing 1,592,239 1,208,972 32%
Interest bearing in foreign
branches 798,125 286,517 179%
----------- ----------- --------
Total deposits 2,922,494 1,971,005 48%

Accrued interest payable 5,880 3,410 72%
Other liabilities 13,515 6,870 97%
Federal funds purchased 100,060 129,262 (23)%
Repurchase agreements 70,557 354,159 (80)%
Other borrowings 3,113 126,833 (98)%
Long-term debt 72,168 20,620 250%
----------- ----------- --------
Total liabilities 3,187,787 2,612,159 22%

Stockholders' equity:
Common stock, $.01 par value:
Authorized shares - 100,000,000
Issued shares - 25,940,874 and
25,616,829 at June 30, 2006 and
2005, respectively 259 256
Additional paid-in capital 178,204 174,183
Retained earnings 60,223 31,910
Treasury stock (shares at cost:
84,274 at June 30, 2006 and 2005,
respectively) (573) (573)
Deferred compensation 573 573
Accumulated other comprehensive
income (loss) (13,993) (469)
----------- ----------- --------
Total stockholders' equity 224,693 205,880 9%
----------- ----------- --------
Total liabilities and stockholders'
equity $3,412,480 $2,818,039 21%
=========== =========== ========


CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands except per share data)

Three Months Ended Six Months Ended
June 30 June 30
2006 2005 2006 2005
-------- -------- -------- --------

Interest income
Interest and fees on loans $53,154 $31,255 $99,095 $56,947
Securities 6,726 7,887 13,557 16,183
Federal funds sold 3 14 27 94
Deposits in other banks 13 11 24 130
-------- -------- -------- --------
Total interest income 59,896 39,167 112,703 73,354
Interest expense
Deposits 22,369 10,446 41,676 9,379
Federal funds purchased 2,782 1,374 4,977 2,235
Repurchase agreements 1,562 2,151 2,764 4,545
Other borrowings 890 354 1,444 358
Long-term debt 1,167 358 1,995 685
-------- -------- -------- --------
Total interest expense 28,770 14,683 52,856 27,202
-------- -------- -------- --------
Net interest income 31,126 24,484 59,847 46,152
Provision for loan losses 2,250 -- 2,250 --
-------- -------- -------- --------
Net interest income after
provision for loan losses 28,876 24,484 57,597 46,152
Non-interest income
Service charges on deposit
accounts 805 793 1,661 1,574
Trust fee income 866 615 1,709 1,201
Bank owned life insurance (BOLI)
income 292 291 578 579
Brokered loan fees 483 399 852 618
Gain on sale of mortgage loans 2,150 1,911 3,773 3,676
Insurance commissions 756 172 1,479 285
Equipment rental income 815 1 1,328 15
Other 692 512 1,551 925
-------- -------- -------- --------
Total non-interest income 6,859 4,694 12,931 8,873
Non-interest expense
Salaries and employee benefits 16,333 11,858 31,785 23,387
Net occupancy and equipment
expense 3,150 1,875 5,902 3,558
Marketing 990 922 1,798 1,621
Legal and professional 1,365 1,097 2,833 2,194
Communications and data processing 756 914 1,455 1,569
Franchise taxes 104 45 165 90
Other 3,414 2,479 6,887 4,625
-------- -------- -------- --------
Total non-interest expense 26,112 19,190 50,825 37,044
-------- -------- -------- --------
Income before income taxes 9,623 9,988 19,703 17,981
Income tax expense 3,282 3,401 6,719 6,118
-------- -------- -------- --------
Net income $6,341 $6,587 $12,984 $11,863
======== ======== ======== ========

Earnings per share:
Basic $.24 $.26 $.50 $.46
Diluted $.24 $.25 $.49 $.45


TEXAS CAPITAL BANCSHARES, INC.

SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in thousands)
2nd 1st 4th 3rd 2nd
Quarter Quarter Quarter Quarter Quarter
2006 2006 2005 2005 2005
-------- -------- -------- -------- --------

Beginning balance $18,909 $18,897 $18,908 $18,774 $18,715
Loans charged-off:
Commercial 1,618 -- 60 14 70
Real estate -- -- -- -- 28
Consumer -- 3 8 32 52
Leases 30 10 6 -- 2
-------- -------- -------- -------- --------
Total 1,648 13 74 46 152
Recoveries:
Commercial 5 4 3 115 171
Consumer -- 1 -- -- --
Leases 130 20 60 65 40
-------- -------- -------- -------- --------
Total recoveries 135 25 63 180 211
-------- -------- -------- -------- --------
Net charge-offs
(recoveries) 1,513 (12) 11 (134) (59)
Provision for loan losses 2,250 -- -- -- --
-------- -------- -------- -------- --------
Ending balance $19,646 $18,909 $18,897 $18,908 $18,774
======== ======== ======== ======== ========

Reserve to loans held for
investment (2) .81% .84% .91% .98% 1.04%
Reserve to average loans
held for investment (2) .83% .87% .94% 1.00% 1.07%
Net charge-offs
(recoveries) to average
loans (1) (2) .26% (.00)% .00% (.03)% (.01)%
Provision for loan losses
to average loans (1) (2) .38% -- -- -- --
Recoveries to gross
charge-offs 8.19% 192.31% 85.14% 391.3% 138.8%
Reserve as a multiple of
net charge-offs 13.0x N/M 1,717.9x N/M N/M

Non-performing loans:
Loans past due (90 days)
(3) $2,746 $2,824 $2,795 $941 $--
Non-accrual 5,063 6,032 5,657 1,353 5,718
-------- -------- -------- -------- --------
Total $7,809 $8,856 $8,452 $2,294 $5,718
======== ======== ======== ======== ========

Reserve as a percent of
non-performing loans 2.5x 2.1x 2.2x 8.2x 3.3x
Reserve as a percent of
non-accrual loans 3.9x 3.1x 3.3x 14.0x 3.3x


(1) Interim period ratios are annualized.

(2) Excludes loans held for sale.

(3) At June 30, 2006, loans past due 90 days and still accruing
includes premium finance loans of $2.5 million (92% of total).
These loans are primarily secured by obligations of insurance
carriers to refund premiums on cancelled insurance policies. The
refund of premiums from the insurance carriers can take up to 180
days from the cancellation date.



TEXAS CAPITAL BANCSHARES, INC.

CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Dollars in thousands)

2nd 1st 4th 3rd 2nd
Quarter Quarter Quarter Quarter Quarter
2006 2006 2005 2005 2005
-------- -------- -------- -------- --------
Interest income
Interest and fees on
loans $53,154 $45,941 $41,915 $37,363 $31,255
Securities 6,726 6,831 7,087 7,442 7,887
Federal funds sold 3 24 183 334 14
Deposits in other banks 13 11 10 7 11
-------- -------- -------- -------- --------
Total interest income 59,896 52,807 49,195 45,146 39,167
Interest expense
Deposits 22,369 19,307 16,991 13,658 10,446
Federal funds purchased 2,782 2,195 1,159 989 1,374
Repurchase agreements 1,562 1,202 1,727 2,706 2,151
Other borrowings 890 554 68 451 354
Long-term debt 1,167 828 789 384 358
-------- -------- -------- -------- --------
Total interest expense 28,770 24,086 20,734 18,188 14,683
-------- -------- -------- -------- --------
Net interest income 31,126 28,721 28,461 26,958 24,484
Provision for loan losses 2,250 -- -- -- --
-------- -------- -------- -------- --------
Net interest income after
provision for loan
losses 28,876 28,721 28,461 26,958 24,484
Non-interest income
Service charges on
deposit accounts 805 856 833 816 793
Trust fee income 866 843 760 778 615
Bank owned life insurance
(BOLI) income 292 286 290 267 291
Brokered loan fees 483 369 178 962 400
Gain on sale of mortgage
loans 2,150 1,623 2,118 2,198 1,911
Insurance commissions 756 723 648 114 172
Equipment rental income 815 513 178 43 1
Other 692 859 981 612 511
-------- -------- -------- -------- --------
Total non-interest income 6,859 6,072 5,986 5,790 4,694
Non-interest expense
Salaries and employee
benefits 16,333 15,452 13,874 13,465 11,858
Net occupancy and
equipment expense 3,150 2,752 2,025 1,937 1,875
Marketing 990 808 894 821 922
Legal and professional 1,365 1,468 1,783 1,183 1,103
Communications and data
processing 756 699 673 658 914
Franchise taxes 104 61 134 49 45
Other 3,414 3,473 3,353 3,136 2,473
-------- -------- -------- -------- --------
Total non-interest
expense 26,112 24,713 22,736 21,249 19,190
-------- -------- -------- -------- --------
Income before income
taxes 9,623 10,080 11,711 11,499 9,988
Income tax expense 3,282 3,437 3,966 3,915 3,401
-------- -------- -------- -------- --------
Net income $6,341 $6,643 $7,745 $7,584 $6,587
======== ======== ======== ======== ========

QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
(Dollars in thousands)



2nd Quarter 2006 1st Quarter 2006
--------------------------- ---------------------------
Average Revenue/ Yield/ Average Revenue/ Yield/
Balance Expense Rate Balance Expense Rate
(1) (1)
----------- -------- ------ ----------- -------- ------
Assets
Securities -
Taxable $537,934 $6,291 4.69% $567,653 $6,396 4.57%
Securities -
Non-taxable(2) 48,614 669 5.52% 48,635 669 5.58%
Federal funds
sold 200 3 6.02% 2,233 24 4.36%
Deposits in
other banks 908 13 5.74% 1,079 11 4.13%
Loans held for
sale (3) 137,289 4,214 12.31% 102,030 3,295 13.10%
Loans held for
investment 2,360,189 48,940 8.32% 2,168,410 42,646 7.98%
Less reserve
for loan
losses 19,129 -- -- 18,898 -- --
----------- -------- ------ ----------- -------- ------
Loans, net of
reserve 2,478,349 53,154 8.60% 2,251,542 45,941 8.28%
----------- -------- ------ ----------- -------- ------
Total earning
assets 3,066,005 60,130 7.87% 2,871,142 53,041 7.49%
Cash and other
assets 208,502 205,999
----------- -----------
Total assets $3,274,507 $3,077,141
=========== ===========

Liabilities and
Stockholders'
Equity
Transaction
deposits $112,046 $310 1.11% $117,685 $312 1.08%
Savings
deposits 701,007 7,257 4.15% 671,102 6,195 3.74%
Time deposits 684,630 7,784 4.56% 635,250 6,664 4.25%
Deposits in
foreign
branches 562,223 7,018 5.01% 541,084 6,136 4.60%
----------- -------- ------ ----------- -------- ------
Total interest
bearing
deposits 2,059,906 22,369 4.36% 1,965,121 19,307 3.98%
Other
borrowings 439,230 5,234 4.78% 380,832 3,951 4.21%
Long-term debt 64,521 1,167 7.25% 46,394 828 7.24%
----------- -------- ------ ----------- -------- ------
Total interest
bearing
liabilities 2,563,657 28,770 4.50% 2,392,347 24,086 4.08%
Demand deposits 468,449 445,012
Other
liabilities 19,055 19,309
Stockholders'
equity 223,346 220,473
----------- -----------
Total
liabilities
and
stockholders'
equity $3,274,507 $3,077,141
=========== ===========

Net interest
income $31,360 $28,955
Net interest
margin 4.10% 4.09%



4th Quarter 2005 3rd Quarter 2005
--------------------------- ---------------------------
Average Revenue/ Yield/ Average Revenue/ Yield/
Balance Expense Rate Balance Expense Rate
(1) (1)
----------- -------- ------ ----------- -------- ------
Assets
Securities -
Taxable $598,280 $6,653 4.41% $643,319 $7,007 4.32%
Securities -
Non-
taxable(2) 48,655 668 5.45% 48,675 669 5.45%
Federal funds
sold 18,553 183 3.91% 37,532 334 3.53%
Deposits in
other banks 980 10 4.05% 895 7 3.10%
Loans held for
sale (3) 99,882 3,521 13.99% 121,181 3,650 11.95%
Loans held for
investment 2,006,132 38,394 7.59% 1,884,161 33,713 7.10%
Less reserve
for loan
losses 18,924 -- -- 18,882 -- --
----------- -------- ------ ----------- -------- ------
Loans, net of
reserve 2,087,090 41,915 7.97% 1,986,460 37,363 7.46%
----------- -------- ------ ----------- -------- ------
Total earning
assets 2,753,558 49,429 7.12% 2,716,881 45,380 6.63%
Cash and other
assets 188,998 175,986
----------- -----------
Total assets $2,942,556 $2,892,867
=========== ===========

Liabilities
and
Stockholders'
Equity
Transaction
deposits $108,245 $282 1.03% $107,398 $271 1.00%
Savings
deposits 691,575 5,800 3.33% 628,019 4,442 2.81%
Time deposits 564,405 5,561 3.91% 614,433 5,548 3.58%
Deposits in
foreign
branches 518,316 5,348 4.09% 373,298 3,397 3.61%
----------- -------- ------ ----------- -------- ------
Total interest
bearing
deposits 1,882,541 16,991 3.58% 1,723,148 13,658 3.14%
Other
borrowings 325,350 2,954 3.60% 504,700 4,146 3.26%
Long-term debt 44,722 789 7.00% 20,620 384 7.39%
----------- -------- ------ ----------- -------- ------
Total interest
bearing
liabilities 2,252,613 20,734 3.65% 2,248,468 18,188 3.21%
Demand
deposits 458,743 420,288
Other
liabilities 19,702 15,265
Stockholders'
equity 211,498 208,846
----------- -----------
Total
liabilities
and
stockholders'
equity $2,942,556 $2,892,867
=========== ===========

Net interest
income $28,695 $27,192
Net interest
margin 4.13% 3.97%



2nd Quarter 2005
---------------------------
Average Revenue/ Yield/
Balance Expense Rate
(1)
----------- -------- ------
Assets
Securities - Taxable $685,058 $7,451 4.36%
Securities - Non-taxable(2) 48,694 671 5.53%
Federal funds sold 1,980 14 2.84%
Deposits in other banks 1,736 11 2.54%
Loans held for sale (3) 84,497 2,897 13.75%
Loans held for investment 1,755,311 28,358 6.48%
Less reserve for loan losses 18,753 -- --
----------- -------- ------
Loans, net of reserve 1,821,055 31,255 6.88%
----------- -------- ------
Total earning assets 2,558,523 39,402 6.18%
Cash and other assets 162,835
-----------
Total assets $2,721,358
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Liabilities and Stockholders' Equity
Transaction deposits $111,029 $272 0.98%
Savings deposits 654,519 3,906 2.39%
Time deposits 482,249 3,958 3.29%
Deposits in foreign branches 300,394 2,310 3.08%
----------- -------- ------
Total interest bearing deposits 1,548,191 10,446 2.71%
Other borrowings 545,896 3,879 2.85%
Long-term debt 20,620 358 6.96%
----------- -------- ------
Total interest bearing liabilities 2,114,707 14,683 2.78%
Demand deposits 397,266
Other liabilities 8,370
Stockholders' equity 201,015
-----------
Total liabilities and stockholders' equity $2,721,358
===========

Net interest income $24,719
Net interest margin 3.88%


(1) The loan averages include loans on which the accrual of interest
has been discontinued and are stated net of unearned income.

(2) Taxable equivalent rates used where applicable.

(3) Revenue includes origination fees and other loan fees for our
residential mortgage loans that are earned when the loan is sold.
This increases our overall yield on these loans since most of the
mortgage loans are on our books for less than 30 days.