Texas Regional Bancshares Inc.'s chairman and chief executive said it is continuing to defer bonuses for senior executives; he does not expect to pay any this year and will not authorize any until nonperforming assets drop by about 50%.
"It's pretty well established that there will not be bonuses accrued for 2005," Glen E. Roney said Monday in a conference call with analysts and investors. "Hopefully, we'll be back on stream for next year."
The $6.3 billion-asset McAllen company also reported its third-quarter results Monday. Its profits rose by only $8,000 from a year earlier, to $19.8 million. However, nonperforming assets surged 78%, to $50 million, or 1.26% of Texas Regional's loan portfolio as of Sept. 30. A year earlier nonperformers equaled 0.79% of total loans.
Texas Regional attributed the credit-quality troubles to five problem loans worth more than $31 million. Two of the loans, worth $9.4 million, are in foreclosure, Mr. Roney said.
He indicated that the lingering effects of Hurricane Rita, which affected its markets in east Texas, Houston, and Corpus Christi, might add to its difficulties. Texas Regional said it has deferred $880,000 of payments on $17.7 million of loans in the affected region, and it added $2.5 million to its loan-loss provision specifically in anticipation of Rita-related losses.
For the first nine months of this year Texas Regional's earning rose 17% from the same period last year, to $65.5 million.
In late trading Monday, Texas Regional's stock was down 2% from Friday's close, to $27.71.
