Texas Regional Bancshares Inc. said its fourth-quarter net income was up 9.6% from a year earlier, to $22.8 million, despite a 92% rise in chargeoffs, to $7.5 million.
Loan growth more than offset the cost increase, the $6.6 billion-asset McAllen company reported Tuesday.
Full-year earnings rose 15.3%, to $88.4 million, as net interest income rose nearly 16%, to $237 million. Nonperforming assets totaled $60.1 million at yearend, 1.46% of loans. Nonperformers were 21% higher than three months earlier and 55% higher than a year earlier.
Texas Regional attributed the decline in asset quality to three large loan relationships totaling about $32 million. Hurricane Rita also affected its results; through Dec. 31, it had charged off $900,000 as a result of the storm and deferred loan payments of $7.7 million.
"We're not particularly pleased with the number of problem credits we have at present … [but] all of our bankers are working hard to reduce those numbers and we hope for some improvement in the next few months," said Glen E. Roney, the company's chairman and chief executive, in a conference call Tuesday.
