Southwest Bancorporation of Texas Reports 23 Percent Increase in First Quarter Net Income

Apr 17, 2001, 01:00 ET from Southwest Bancorporation of Texas, Inc.

    HOUSTON, April 17 /PRNewswire/ --
 Southwest Bancorporation of Texas, Inc. (Nasdaq:   SWBT), the largest
 independent bank-holding company in Houston, reported continued strong growth
 in the first quarter of 2001.  For the three months ended March 31, 2001, net
 income increased 23 percent to $12.5 million compared to $10.2 million in the
 first quarter of 2000.  Earnings per common share for the first quarter of
 2001 were 38 cents basic and 37 cents diluted, compared to 32 cents basic and
 31 cents diluted per common share for the same period in 2000, an increase of
 20 percent and 19 percent, respectively.
     Average loans in the first quarter of 2001 totaled $2.55 billion, up
 $476.0 million, or 23 percent, from the same period last year, while linked
 quarter average loans grew $92.3 million, or 4 percent, compared with the
 fourth quarter of 2000.  Noninterest income (excluding security gains/losses)
 for the three months ended March 31, 2001, was $13.4 million, up $3.0 million
 from the same period last year and up $1.8 million or 15 percent on a linked
 quarter basis.  Return on average assets was 1.32 percent for the first
 quarter of 2001, and return on average common shareholders' equity was
 16.63 percent.  The company's efficiency ratio was 61.30 percent for the three
 months ended March 31, 2001, compared with 62.27 percent for the same period
 last year.
     "I think our year is off to a good start," said Paul B. Murphy, Jr., chief
 executive officer and president.  "We have some margin pressure, but overall
 things are going well.  Our bankers are doing a great job of making calls on
 quality prospects and moving business to Southwest.  I must give credit to the
 Houston economy as well.  Virtually all short-term indicators show strength in
 the Houston economy, in contrast with the National economy that has shown
 weakness.  Many economists point to Houston as the bright spot in the national
 economy.  While we remain optimistic about the bank's ability to grow fee
 income, loans and deposits in a vibrant Houston economy, we must recognize
 that it is realistic to expect additional margin pressure throughout the year.
 Accordingly we expect 2001 earnings per diluted common share to fall within a
 range from $1.56 to $1.59."
     On December 29, 2000, Southwest and Citizens Bankers, Inc. completed their
 previously announced merger.  Citizens is a three-bank holding company in east
 Harris County and is the largest Harris County bank holding company that does
 not operate in Houston.  The operational merger is on track to be completed
 during the second quarter of 2001, with resulting cost saves to be recognized
 in the second half of 2001.  The two organizations are already implementing
 cross-selling initiatives.  The following historical financial data has been
 restated to include the accounts and operations of Citizens for all periods
 presented prior to the acquisition date.
 
                              Net Interest Income
 
     Net interest income for the three months ended March 31, 2001, was
 $38.8 million, an increase of $4.1 million, or 12 percent, from the same
 period last year.  This increase is attributable primarily to a 15 percent
 growth in average earning assets.  This growth was partially offset by a
 4 basis point decrease in the net interest margin.
     During the first quarter of 2001, market interest rates declined due to
 actions of the Federal Reserve aimed at stimulating the national economy.
 This decline in interest rates has unfavorably impacted the company's net
 interest margin.  For the three months ended March 31, 2001, the net interest
 margin was 4.53 percent, compared to 4.67 percent for the three months ended
 December 31, 2000, and 4.57 percent for the three months ended March 31, 2000.
 The company's management routinely reviews and implements activities which
 attempt to control the inherent risks associated with interest rate movements.
 While additional reductions in interest rates may be expected, the company
 believes that its ability to manage its interest rate sensitivity will
 minimize the potential adverse impact.
 
                                 Asset Quality
 
     Nonperforming assets declined from $9.9 million at December 31, 2000 to
 $8.5 million or 0.34 percent of loans and other real estate at March 31, 2001.
 The allowance for loan losses to total loans was 1.16 percent and the
 allowance for loan losses to nonperforming loans was 397.20 percent at
 March 31, 2001.
     "I am pleased with our asset quality," said Murphy.  "With annualized net
 charge-offs of 14 basis points and nonperforming assets of 0.34 percent of
 loans and other real estate, our asset quality remains among the best in the
 industry.  Our credit culture continues to be conservative and consistent."
 
                               Noninterest Income
 
     Noninterest income for the quarter increased 29 percent from the same
 period last year due to: significant growth in service charges on deposit
 accounts -- up  $691,000 or 14 percent; net gain on sales of loans -- up
 $590,000 or 453 percent; income from bank-owned life insurance -- up
 $464,000 or 98 percent due to an additional purchase of $50 million in bank-
 owned life insurance; investment services fee income -- up $305,000 or
 22 percent; loan fee income -- up $367,000 or 33 percent; and factoring fee
 income -- up $272,000 or 31 percent.
 
                              Noninterest Expense
 
     Noninterest expenses increased $4.0 million from the same period last year
 to $32.0 million for the quarter, an increase of 14 percent.  The majority of
 the increase is attributable to costs associated with maintaining the
 company's growth, such as: additional salaries and benefits expense -- up
 $2.9 million or 18 percent; rent expense -- up $476,000 or 46 percent;
 depreciation expense -- up $253,000 or 16 percent; and maintenance contract
 expense -- up $91,000 or 17 percent.  Included in the first quarter of 2001
 are approximately $600,000 in expenses associated with the Bank's new
 operations facility, which opened in December 2000.
     Total assets were $3.83 billion on March 31, 2001 -- a decrease of
 $112.1 million or 3 percent from $3.94 billion on December 31, 2000.  Deposits
 increased to $3.10 billion on March 31, 2001, up from $3.09 billion on
 December 31, 2000 -- an increase of $2.41 million or 0.1 percent.  The changes
 in total assets and total deposits were both negatively impacted by the
 seasonal nature of a particular municipal account.  This account collects
 large tax deposits near year-end and withdraws the funds early in the
 following year.  In addition, the merger with Citizens greatly enhanced
 Southwest's liquidity.  As a result, management chose to reduce renewals of
 some higher-priced deposits, thus resulting in slower deposit growth than in
 previous quarters.  This strategy will contribute to improved net interest
 margins.
 
     Southwest Bancorporation of Texas is the largest independent bank-holding
 company headquartered in Houston, Texas with $3.83 billion in assets.  The
 company focuses on commercial, treasury management, private, retail and
 mortgage banking services to small and middle-market businesses and
 individuals.  The bank has 32 full-service branches located throughout the
 Houston metropolitan area.
     This press release includes forward-looking statements that are subject to
 risks and uncertainties.  Actual results might differ materially from those
 projected in the forward-looking statements.  Additional information
 concerning factors that could cause actual results to materially differ from
 those in the forward-looking statements is contained in Southwest
 Bancorporation's Securities and Exchange Commission filings.
 
 
      Southwest Bancorporation of Texas, Inc.
      Consolidated Financial Information (unaudited)
 
                        1Q-01      1Q-00    % change     FY 00        FY99
     Balance sheet
      averages                 ($ in 000's except per share data)
       Total
        loans       $2,548,076  $2,072,059    23.0%  $2,281,340   $1,762,826
       Investment
        securities     835,349     905,248    -7.7%     909,512      954,593
       Securities
        purchased
        under
        resale
        agreements         ---         ---     0.0%       9,626          959
       Fed funds
        sold and
        other
        earning
        assets          82,075      41,354    98.5%      43,537       52,941
         Total
          earning
          assets     3,465,500   3,018,661    14.8%   3,244,015    2,771,319
       Allowance for
        loan losses    (28,891)    (23,097)   25.1%     (25,326)     (20,161)
       Cash and due
        from banks     192,655     167,620    14.9%     161,180      112,048
       Other assets    229,439     130,388    76.0%     154,264      145,559
         Total
          assets    $3,858,703  $3,293,572    17.2%  $3,534,133   $3,008,765
 
       Noninterest-
        bearing
        deposits      $825,631    $729,520    13.2%    $774,111     $656,428
       Interest-
        bearing
        demand
        deposits        64,912      56,529    14.8%      59,096       69,859
       Savings
        deposits     1,311,356   1,100,962    19.1%   1,158,770      939,121
       Time deposits   891,912     704,348    26.6%     829,047      718,037
         Total
          deposits   3,093,811   2,591,359    19.4%   2,821,024    2,383,445
       Fed funds
        purchased and
        other
        interest-
        bearing
        liabilities    424,196     442,368    -4.1%     415,029      381,052
       Other
        liabilities     34,072      26,551    28.3%      41,168       25,245
       Minority
        interest in
        consolidated
        subsidiary       1,335       1,137    17.4%       1,319        1,595
       Shareholders'
        equity         305,289     232,157    31.5%     255,593      217,428
         Total
          liabilities
          and
          equity    $3,858,703  $3,293,572    17.2%  $3,534,133   $3,008,765
 
     Income statement data
       Interest and
        fees on
        loans          $55,977     $45,796    22.2%    $210,990     $150,576
       Interest on
        securities      13,593      14,339    -5.2%      57,755       58,007
       Interest on
        fed funds
        sold and
        other
        earning
        assets           1,126         569    97.9%       3,421        2,649
         Total
          interest
          income        70,696      60,704    16.5%     272,166      211,232
       Interest on
        deposits        26,523      20,357    30.3%      98,688       70,149
       Interest on
        fed funds
        purchased
        and other
        borrowings       5,423       5,740    -5.5%      22,974       18,070
         Total
          interest
          expense       31,946      26,097    22.4%     121,662       88,219
         Net
          interest
          income        38,750      34,607    12.0%     150,504      123,013
       Provision
        for loan
        losses           1,750       1,561    12.1%       7,053        6,474
         Net
          interest
          income
          after
          provision     37,000      33,046    12.0%     143,451      116,539
       Service
        charges
        on deposit
        accounts         5,684       4,993    13.8%      20,765       17,017
       Investment
        services         1,693       1,388    22.0%       6,017        4,868
       Other fee
        income           2,864       2,155    32.9%       9,719        8,740
       Other
        operating
        income           3,206       1,889    69.7%       6,859        6,973
       Gains/
        (losses) on
        sales of
        securities          17           1  1600.0%        (467)        (134)
         Total
          noninterest
          income        13,464      10,426    29.1%      42,893       37,464
       Salaries and
        benefits        18,787      15,929    17.9%      67,060       57,516
       Net occupancy
        expenses         4,987       4,175    19.4%      18,021       16,112
       Merger-related
        expenses and
        other charges      ---         ---     0.0%       4,122        4,474
       Other expenses    8,225       7,938     3.6%      30,954       26,409
         Total
          noninterest
          expenses      31,999      28,042    14.1%     120,157      104,511
         Income before
          income
          taxes and
          minority
          interest      18,465      15,430    19.7%      66,187       49,492
       Provision for
        income taxes     5,920       5,187    14.1%      22,607       17,500
       Minority interest    30          43   -30.2%         119           29
 
         Net income
          available
          for common
          share-
          holders      $12,515     $10,200    22.7%     $43,461(A)  $31,963(B)
         Basic
          earnings
          per common
          share          $0.38       $0.32    20.1%       $1.34        $1.01
         Diluted
          earnings
          per common
          share          $0.37       $0.31    19.0%       $1.29        $0.97
 
         Period end
          # of shares
          outstanding   32,807      32,034     2.4%      32,705       32,018
         Weighted avg
          # of shares
          outstanding
          (incl CSE's)  34,141      33,114     3.1%      33,629       32,943
 
      (A)  Excluding merger-related expenses and other charges and net losses
           on the sales of securities, net income available to common
           shareholders would have been $46,888 or $1.39 per diluted common
           share for the year ended December 31, 2000.
      (B)  Excluding merger-related expenses and other charges and net losses
           on the sales of securities, net income available to common
           shareholders would have been $35,675 or $1.08 per diluted common
           share for the year ended December 31, 1999.
 
 
     Nonperforming assets      ($ in 000's except per share data)
       Nonaccrual loans $6,336      $2,250   181.6%      $8,345       $2,471
       Accruing loans
        90 or more
        days past due      982       1,964   -50.0%       1,107        1,847
       ORE and OLRA      1,222       1,209     1.1%         454        1,840
         Total
          nonperforming
          assets        $8,540      $5,423    57.5%      $9,906       $6,158
 
     Changes in
      allowance for
      loan losses
       Allowance for
        loan losses -
        beginning of
        period         $28,150     $22,436    25.5%     $22,436      $17,532
       Provision for
        loan losses      1,750       1,561    12.1%       7,053        6,474
       Charge-offs        (989)       (329)  200.6%      (2,093)      (2,211)
       Recoveries          156         108    44.4%         754          641
       Allowance for
        loan losses -
        end of period  $29,067     $23,776    22.3%     $28,150      $22,436
 
     Ratios
       Return on
        average assets   1.32%       1.25%                1.23%(C)     1.06%
       Return on
        average common
        equity          16.63%      17.67%               17.00%(C)    14.70%
       Leverage ratio    8.12%       7.84%                7.94%        7.81%
       Yield on
        earning assets   8.27%       8.02%                8.39%        7.62%
       Cost of funds
        with demand
        accounts         3.68%       3.46%                3.76%        3.19%
       Net interest
        margin           4.53%       4.57%                4.64%        4.44%
       Efficiency ratio 61.30%      62.27%               61.98%(C)    65.07%
       Noninterest
        expense to
        average earning
        assets           3.74%       3.74%                3.70%(C)     3.77%
       Nonperforming
        assets to
        loans and other
        real estate      0.34%       0.26%                0.41%        0.31%
       Net charge-
        offs(recoveries)
        to average loans 0.14%       0.04%                0.06%        0.09%
       Allowance for
        loan losses to
        total loans      1.16%       1.15%                1.16%        1.15%
       Allowance for
        loan losses to
        nonperforming
        loans          397.20%     564.21%              297.82%      519.59%
 
     Common stock performance
       Market value
        of stock -
        Close          $31.375     $19.438              $42.938      $19.813
       Market value
        of stock -
        High           $45.563     $20.250              $45.625      $20.000
       Market value
        of stock -
        Low            $25.375     $14.875              $14.875      $11.875
       Book value
        of stock         $9.75       $7.45                $9.11        $7.28
       Market/book
        value of stock    322%        261%                 471%         272%
       Price/12 month
        trailing
        earnings ratio      23          19                   33           20
 
     Other data
       EOP Employees -
        full time
        equivalent       1,382       1,196    15.6%       1,313        1,168
 
 
     Period end balances                  ($ in 000's )
       Total loans  $2,577,793  $2,156,037    19.6%  $2,511,437   $2,035,342
       Investment
        securities     797,086     901,869   -11.6%     848,164      890,369
       Securities
        purchased
        under
        resale
        agreements      54,313         ---   100.0%      55,000          ---
       Fed funds
        sold and
        other
        earning
        assets          18,204      23,304   -21.9%      24,341       25,642
         Total
          earning
          assets     3,447,396   3,081,210    11.9%   3,438,942    2,951,353
       Allowance
        for loan
        losses         (29,067)    (23,776)   22.3%     (28,150)     (22,436)
       Cash and
        due from
        banks          160,343     172,969    -7.3%     331,965      188,432
       Other
        assets         249,601     160,306    55.7%     197,585      153,839
         Total
          assets    $3,828,273  $3,390,709    12.9%  $3,940,342   $3,271,188
 
       Noninterest-
        bearing
        demand
        deposits      $827,502    $758,096     9.2%    $892,296     $716,785
       Interest-
        bearing
        demand
        deposits        61,858      63,199    -2.1%      62,773       70,935
       Savings
        deposits     1,370,507   1,127,185    21.6%   1,231,523    1,042,673
       Time deposits   836,410     712,347    17.4%     907,278      701,240
         Total
          deposits   3,096,277   2,660,827    16.4%   3,093,870    2,531,633
       Fed funds
        purchased
        and other
        interest-
        bearing
        liabilities    379,730     464,367   -18.2%     517,761      483,978
       Other
        liabilities     30,950      25,807    19.9%      29,388       21,519
       Minority
        interest in
        consolidated
        subsidiary       1,382       1,137    21.5%       1,313        1,097
       Shareholders'
        equity         319,934     238,571    34.1%     298,010      232,961
         Total
          liabilities
          and
          equity    $3,828,273  $3,390,709    12.9%  $3,940,342   $3,271,188
 
     (C)   Excluding merger-related expenses and other charges net losses on
           sales of securities ROA, ROE, Efficiency ratio and NIE to average
           earning assets would have been 1.35%, 18.62%, 59.85% and 3.58%,
           respectively, for the year ended December 31, 2000.
 
 

SOURCE Southwest Bancorporation of Texas, Inc.
    HOUSTON, April 17 /PRNewswire/ --
 Southwest Bancorporation of Texas, Inc. (Nasdaq:   SWBT), the largest
 independent bank-holding company in Houston, reported continued strong growth
 in the first quarter of 2001.  For the three months ended March 31, 2001, net
 income increased 23 percent to $12.5 million compared to $10.2 million in the
 first quarter of 2000.  Earnings per common share for the first quarter of
 2001 were 38 cents basic and 37 cents diluted, compared to 32 cents basic and
 31 cents diluted per common share for the same period in 2000, an increase of
 20 percent and 19 percent, respectively.
     Average loans in the first quarter of 2001 totaled $2.55 billion, up
 $476.0 million, or 23 percent, from the same period last year, while linked
 quarter average loans grew $92.3 million, or 4 percent, compared with the
 fourth quarter of 2000.  Noninterest income (excluding security gains/losses)
 for the three months ended March 31, 2001, was $13.4 million, up $3.0 million
 from the same period last year and up $1.8 million or 15 percent on a linked
 quarter basis.  Return on average assets was 1.32 percent for the first
 quarter of 2001, and return on average common shareholders' equity was
 16.63 percent.  The company's efficiency ratio was 61.30 percent for the three
 months ended March 31, 2001, compared with 62.27 percent for the same period
 last year.
     "I think our year is off to a good start," said Paul B. Murphy, Jr., chief
 executive officer and president.  "We have some margin pressure, but overall
 things are going well.  Our bankers are doing a great job of making calls on
 quality prospects and moving business to Southwest.  I must give credit to the
 Houston economy as well.  Virtually all short-term indicators show strength in
 the Houston economy, in contrast with the National economy that has shown
 weakness.  Many economists point to Houston as the bright spot in the national
 economy.  While we remain optimistic about the bank's ability to grow fee
 income, loans and deposits in a vibrant Houston economy, we must recognize
 that it is realistic to expect additional margin pressure throughout the year.
 Accordingly we expect 2001 earnings per diluted common share to fall within a
 range from $1.56 to $1.59."
     On December 29, 2000, Southwest and Citizens Bankers, Inc. completed their
 previously announced merger.  Citizens is a three-bank holding company in east
 Harris County and is the largest Harris County bank holding company that does
 not operate in Houston.  The operational merger is on track to be completed
 during the second quarter of 2001, with resulting cost saves to be recognized
 in the second half of 2001.  The two organizations are already implementing
 cross-selling initiatives.  The following historical financial data has been
 restated to include the accounts and operations of Citizens for all periods
 presented prior to the acquisition date.
 
                              Net Interest Income
 
     Net interest income for the three months ended March 31, 2001, was
 $38.8 million, an increase of $4.1 million, or 12 percent, from the same
 period last year.  This increase is attributable primarily to a 15 percent
 growth in average earning assets.  This growth was partially offset by a
 4 basis point decrease in the net interest margin.
     During the first quarter of 2001, market interest rates declined due to
 actions of the Federal Reserve aimed at stimulating the national economy.
 This decline in interest rates has unfavorably impacted the company's net
 interest margin.  For the three months ended March 31, 2001, the net interest
 margin was 4.53 percent, compared to 4.67 percent for the three months ended
 December 31, 2000, and 4.57 percent for the three months ended March 31, 2000.
 The company's management routinely reviews and implements activities which
 attempt to control the inherent risks associated with interest rate movements.
 While additional reductions in interest rates may be expected, the company
 believes that its ability to manage its interest rate sensitivity will
 minimize the potential adverse impact.
 
                                 Asset Quality
 
     Nonperforming assets declined from $9.9 million at December 31, 2000 to
 $8.5 million or 0.34 percent of loans and other real estate at March 31, 2001.
 The allowance for loan losses to total loans was 1.16 percent and the
 allowance for loan losses to nonperforming loans was 397.20 percent at
 March 31, 2001.
     "I am pleased with our asset quality," said Murphy.  "With annualized net
 charge-offs of 14 basis points and nonperforming assets of 0.34 percent of
 loans and other real estate, our asset quality remains among the best in the
 industry.  Our credit culture continues to be conservative and consistent."
 
                               Noninterest Income
 
     Noninterest income for the quarter increased 29 percent from the same
 period last year due to: significant growth in service charges on deposit
 accounts -- up  $691,000 or 14 percent; net gain on sales of loans -- up
 $590,000 or 453 percent; income from bank-owned life insurance -- up
 $464,000 or 98 percent due to an additional purchase of $50 million in bank-
 owned life insurance; investment services fee income -- up $305,000 or
 22 percent; loan fee income -- up $367,000 or 33 percent; and factoring fee
 income -- up $272,000 or 31 percent.
 
                              Noninterest Expense
 
     Noninterest expenses increased $4.0 million from the same period last year
 to $32.0 million for the quarter, an increase of 14 percent.  The majority of
 the increase is attributable to costs associated with maintaining the
 company's growth, such as: additional salaries and benefits expense -- up
 $2.9 million or 18 percent; rent expense -- up $476,000 or 46 percent;
 depreciation expense -- up $253,000 or 16 percent; and maintenance contract
 expense -- up $91,000 or 17 percent.  Included in the first quarter of 2001
 are approximately $600,000 in expenses associated with the Bank's new
 operations facility, which opened in December 2000.
     Total assets were $3.83 billion on March 31, 2001 -- a decrease of
 $112.1 million or 3 percent from $3.94 billion on December 31, 2000.  Deposits
 increased to $3.10 billion on March 31, 2001, up from $3.09 billion on
 December 31, 2000 -- an increase of $2.41 million or 0.1 percent.  The changes
 in total assets and total deposits were both negatively impacted by the
 seasonal nature of a particular municipal account.  This account collects
 large tax deposits near year-end and withdraws the funds early in the
 following year.  In addition, the merger with Citizens greatly enhanced
 Southwest's liquidity.  As a result, management chose to reduce renewals of
 some higher-priced deposits, thus resulting in slower deposit growth than in
 previous quarters.  This strategy will contribute to improved net interest
 margins.
 
     Southwest Bancorporation of Texas is the largest independent bank-holding
 company headquartered in Houston, Texas with $3.83 billion in assets.  The
 company focuses on commercial, treasury management, private, retail and
 mortgage banking services to small and middle-market businesses and
 individuals.  The bank has 32 full-service branches located throughout the
 Houston metropolitan area.
     This press release includes forward-looking statements that are subject to
 risks and uncertainties.  Actual results might differ materially from those
 projected in the forward-looking statements.  Additional information
 concerning factors that could cause actual results to materially differ from
 those in the forward-looking statements is contained in Southwest
 Bancorporation's Securities and Exchange Commission filings.
 
 
      Southwest Bancorporation of Texas, Inc.
      Consolidated Financial Information (unaudited)
 
                        1Q-01      1Q-00    % change     FY 00        FY99
     Balance sheet
      averages                 ($ in 000's except per share data)
       Total
        loans       $2,548,076  $2,072,059    23.0%  $2,281,340   $1,762,826
       Investment
        securities     835,349     905,248    -7.7%     909,512      954,593
       Securities
        purchased
        under
        resale
        agreements         ---         ---     0.0%       9,626          959
       Fed funds
        sold and
        other
        earning
        assets          82,075      41,354    98.5%      43,537       52,941
         Total
          earning
          assets     3,465,500   3,018,661    14.8%   3,244,015    2,771,319
       Allowance for
        loan losses    (28,891)    (23,097)   25.1%     (25,326)     (20,161)
       Cash and due
        from banks     192,655     167,620    14.9%     161,180      112,048
       Other assets    229,439     130,388    76.0%     154,264      145,559
         Total
          assets    $3,858,703  $3,293,572    17.2%  $3,534,133   $3,008,765
 
       Noninterest-
        bearing
        deposits      $825,631    $729,520    13.2%    $774,111     $656,428
       Interest-
        bearing
        demand
        deposits        64,912      56,529    14.8%      59,096       69,859
       Savings
        deposits     1,311,356   1,100,962    19.1%   1,158,770      939,121
       Time deposits   891,912     704,348    26.6%     829,047      718,037
         Total
          deposits   3,093,811   2,591,359    19.4%   2,821,024    2,383,445
       Fed funds
        purchased and
        other
        interest-
        bearing
        liabilities    424,196     442,368    -4.1%     415,029      381,052
       Other
        liabilities     34,072      26,551    28.3%      41,168       25,245
       Minority
        interest in
        consolidated
        subsidiary       1,335       1,137    17.4%       1,319        1,595
       Shareholders'
        equity         305,289     232,157    31.5%     255,593      217,428
         Total
          liabilities
          and
          equity    $3,858,703  $3,293,572    17.2%  $3,534,133   $3,008,765
 
     Income statement data
       Interest and
        fees on
        loans          $55,977     $45,796    22.2%    $210,990     $150,576
       Interest on
        securities      13,593      14,339    -5.2%      57,755       58,007
       Interest on
        fed funds
        sold and
        other
        earning
        assets           1,126         569    97.9%       3,421        2,649
         Total
          interest
          income        70,696      60,704    16.5%     272,166      211,232
       Interest on
        deposits        26,523      20,357    30.3%      98,688       70,149
       Interest on
        fed funds
        purchased
        and other
        borrowings       5,423       5,740    -5.5%      22,974       18,070
         Total
          interest
          expense       31,946      26,097    22.4%     121,662       88,219
         Net
          interest
          income        38,750      34,607    12.0%     150,504      123,013
       Provision
        for loan
        losses           1,750       1,561    12.1%       7,053        6,474
         Net
          interest
          income
          after
          provision     37,000      33,046    12.0%     143,451      116,539
       Service
        charges
        on deposit
        accounts         5,684       4,993    13.8%      20,765       17,017
       Investment
        services         1,693       1,388    22.0%       6,017        4,868
       Other fee
        income           2,864       2,155    32.9%       9,719        8,740
       Other
        operating
        income           3,206       1,889    69.7%       6,859        6,973
       Gains/
        (losses) on
        sales of
        securities          17           1  1600.0%        (467)        (134)
         Total
          noninterest
          income        13,464      10,426    29.1%      42,893       37,464
       Salaries and
        benefits        18,787      15,929    17.9%      67,060       57,516
       Net occupancy
        expenses         4,987       4,175    19.4%      18,021       16,112
       Merger-related
        expenses and
        other charges      ---         ---     0.0%       4,122        4,474
       Other expenses    8,225       7,938     3.6%      30,954       26,409
         Total
          noninterest
          expenses      31,999      28,042    14.1%     120,157      104,511
         Income before
          income
          taxes and
          minority
          interest      18,465      15,430    19.7%      66,187       49,492
       Provision for
        income taxes     5,920       5,187    14.1%      22,607       17,500
       Minority interest    30          43   -30.2%         119           29
 
         Net income
          available
          for common
          share-
          holders      $12,515     $10,200    22.7%     $43,461(A)  $31,963(B)
         Basic
          earnings
          per common
          share          $0.38       $0.32    20.1%       $1.34        $1.01
         Diluted
          earnings
          per common
          share          $0.37       $0.31    19.0%       $1.29        $0.97
 
         Period end
          # of shares
          outstanding   32,807      32,034     2.4%      32,705       32,018
         Weighted avg
          # of shares
          outstanding
          (incl CSE's)  34,141      33,114     3.1%      33,629       32,943
 
      (A)  Excluding merger-related expenses and other charges and net losses
           on the sales of securities, net income available to common
           shareholders would have been $46,888 or $1.39 per diluted common
           share for the year ended December 31, 2000.
      (B)  Excluding merger-related expenses and other charges and net losses
           on the sales of securities, net income available to common
           shareholders would have been $35,675 or $1.08 per diluted common
           share for the year ended December 31, 1999.
 
 
     Nonperforming assets      ($ in 000's except per share data)
       Nonaccrual loans $6,336      $2,250   181.6%      $8,345       $2,471
       Accruing loans
        90 or more
        days past due      982       1,964   -50.0%       1,107        1,847
       ORE and OLRA      1,222       1,209     1.1%         454        1,840
         Total
          nonperforming
          assets        $8,540      $5,423    57.5%      $9,906       $6,158
 
     Changes in
      allowance for
      loan losses
       Allowance for
        loan losses -
        beginning of
        period         $28,150     $22,436    25.5%     $22,436      $17,532
       Provision for
        loan losses      1,750       1,561    12.1%       7,053        6,474
       Charge-offs        (989)       (329)  200.6%      (2,093)      (2,211)
       Recoveries          156         108    44.4%         754          641
       Allowance for
        loan losses -
        end of period  $29,067     $23,776    22.3%     $28,150      $22,436
 
     Ratios
       Return on
        average assets   1.32%       1.25%                1.23%(C)     1.06%
       Return on
        average common
        equity          16.63%      17.67%               17.00%(C)    14.70%
       Leverage ratio    8.12%       7.84%                7.94%        7.81%
       Yield on
        earning assets   8.27%       8.02%                8.39%        7.62%
       Cost of funds
        with demand
        accounts         3.68%       3.46%                3.76%        3.19%
       Net interest
        margin           4.53%       4.57%                4.64%        4.44%
       Efficiency ratio 61.30%      62.27%               61.98%(C)    65.07%
       Noninterest
        expense to
        average earning
        assets           3.74%       3.74%                3.70%(C)     3.77%
       Nonperforming
        assets to
        loans and other
        real estate      0.34%       0.26%                0.41%        0.31%
       Net charge-
        offs(recoveries)
        to average loans 0.14%       0.04%                0.06%        0.09%
       Allowance for
        loan losses to
        total loans      1.16%       1.15%                1.16%        1.15%
       Allowance for
        loan losses to
        nonperforming
        loans          397.20%     564.21%              297.82%      519.59%
 
     Common stock performance
       Market value
        of stock -
        Close          $31.375     $19.438              $42.938      $19.813
       Market value
        of stock -
        High           $45.563     $20.250              $45.625      $20.000
       Market value
        of stock -
        Low            $25.375     $14.875              $14.875      $11.875
       Book value
        of stock         $9.75       $7.45                $9.11        $7.28
       Market/book
        value of stock    322%        261%                 471%         272%
       Price/12 month
        trailing
        earnings ratio      23          19                   33           20
 
     Other data
       EOP Employees -
        full time
        equivalent       1,382       1,196    15.6%       1,313        1,168
 
 
     Period end balances                  ($ in 000's )
       Total loans  $2,577,793  $2,156,037    19.6%  $2,511,437   $2,035,342
       Investment
        securities     797,086     901,869   -11.6%     848,164      890,369
       Securities
        purchased
        under
        resale
        agreements      54,313         ---   100.0%      55,000          ---
       Fed funds
        sold and
        other
        earning
        assets          18,204      23,304   -21.9%      24,341       25,642
         Total
          earning
          assets     3,447,396   3,081,210    11.9%   3,438,942    2,951,353
       Allowance
        for loan
        losses         (29,067)    (23,776)   22.3%     (28,150)     (22,436)
       Cash and
        due from
        banks          160,343     172,969    -7.3%     331,965      188,432
       Other
        assets         249,601     160,306    55.7%     197,585      153,839
         Total
          assets    $3,828,273  $3,390,709    12.9%  $3,940,342   $3,271,188
 
       Noninterest-
        bearing
        demand
        deposits      $827,502    $758,096     9.2%    $892,296     $716,785
       Interest-
        bearing
        demand
        deposits        61,858      63,199    -2.1%      62,773       70,935
       Savings
        deposits     1,370,507   1,127,185    21.6%   1,231,523    1,042,673
       Time deposits   836,410     712,347    17.4%     907,278      701,240
         Total
          deposits   3,096,277   2,660,827    16.4%   3,093,870    2,531,633
       Fed funds
        purchased
        and other
        interest-
        bearing
        liabilities    379,730     464,367   -18.2%     517,761      483,978
       Other
        liabilities     30,950      25,807    19.9%      29,388       21,519
       Minority
        interest in
        consolidated
        subsidiary       1,382       1,137    21.5%       1,313        1,097
       Shareholders'
        equity         319,934     238,571    34.1%     298,010      232,961
         Total
          liabilities
          and
          equity    $3,828,273  $3,390,709    12.9%  $3,940,342   $3,271,188
 
     (C)   Excluding merger-related expenses and other charges net losses on
           sales of securities ROA, ROE, Efficiency ratio and NIE to average
           earning assets would have been 1.35%, 18.62%, 59.85% and 3.58%,
           respectively, for the year ended December 31, 2000.
 
 SOURCE  Southwest Bancorporation of Texas, Inc.