SNBT Snb Bancshares (Texas) (MM)

* Net Earnings for the Third Quarter up 19.6% to $2.2 million * Third Quarter Average Loans up 23.5% SUGAR LAND, Texas, Oct. 27 /PRNewswire-FirstCall/ -- SNB Bancshares, Inc. (NASDAQ:SNBT), a Sugar Land bank holding company and the parent company of Southern National Bank of Texas, a community-oriented, independent bank with offices in both Harris and Fort Bend Counties, today reported strong growth in net earnings for the third quarter 2005 compared with the same quarter a year ago. Net earnings for the quarter ended September 30, 2005 were $2.2 million or $0.17 per diluted share, an increase in net earnings of $356 thousand or 19.6% compared with $1.8 million or $0.19 per diluted share for the third quarter of 2004. Notwithstanding the increase in net earnings, the slight decrease in diluted earnings per share for the third quarter of 2005 compared with the same period in 2004 was the result of the comparative impact of the 5.4 million shares of common stock issued in connection with our initial public offering in August 2004. For computation of diluted earnings per share, weighted average shares of common stock and Class B stock outstanding during the third quarter of 2005 were 12.6 million compared with 9.3 million weighted average shares outstanding during the third quarter of 2004. Net earnings for the nine months ended September 30, 2005 were $2.3 million, a decrease of $2.2 million or 47.9% compared with $4.5 million for the same period in 2004. This decrease in net earnings for the nine months ended September 30, 2005 as compared with the nine months ended September 30, 2004 is primarily the result of the balance sheet restructuring plan initiated during March 2005 which resulted in an impairment writedown loss of approximately $6.1 million before tax, or approximately $4.1 million net of tax, during the quarter ended March 31, 2005 on approximately $169 million of securities identified for sale from our available-for-sale securities portfolio. Diluted earnings per share for the nine months ended September 30, 2005, were $0.19 on 12.6 million shares compared with $0.57 on 7.9 million shares for the same period of 2004. Year-to-date earnings per share comparisons are also affected by the increased number of shares outstanding as a result of our initial public offering in August 2004. "Previously issued earnings releases and other documents filed with the Securities and Exchange Commission discussed more fully this first quarter restructuring and de-leveraging of our balance sheet and the associated impairment charge," said R. Darrell Brewer, Treasurer and Chief Financial Officer. Net earnings for the nine months ended September 30, 2005, excluding the first quarter's non-recurring after-tax impairment writedown loss of $4.1 million or $0.32 per basic share, would have been $6.4 million, a 42.2% increase compared with $4.5 million in the same period of 2004. Diluted earnings per share, excluding the non-recurring impairment writedown loss, would have been $0.51 on 12.6 million shares for the nine months ended September 30, 2005 compared with $0.57 per share on 7.9 million shares for the same period of 2004. Net earnings excluding the non-recurring impairment writedown loss and diluted earnings per share excluding the non-recurring impairment writedown loss are considered non-GAAP financial measures as defined under the rules and regulations of the Securities and Exchange Commission. Management believes that this presentation of net earnings and diluted earnings per share excluding such charge should clarify investors' understanding of the Company's earnings performance during the nine months ended September 30, 2005 compared with the same period of 2004. THIRD QUARTER RESULTS Net earnings for the quarter ended September 30, 2005 of $2.2 million or $0.17 per diluted share, represented an increase in net earnings of $356 thousand or 19.6% compared with $1.8 million or $0.19 per diluted share for the third quarter of 2004. This $356 thousand increase in net earnings was the result of an $897 thousand increase in net interest income, partially offset by a $152 thousand decrease in total noninterest income, a $216 thousand increase in total noninterest expense and a $198 thousand increase in our provision for income taxes. During the third quarter 2005, strong loan growth and improving yields from the loan portfolio helped offset higher cost of funds. Since June 2004, the Fed funds rate increased from 1.00% to 2.25% by year-end 2004, and to 3.75% at September 30, 2005. The Wall Street Journal prime rate has followed suit, its rate increasing from 4.00% to 5.25% by year-end 2004, and to 6.75% at September 30, 2005. Notwithstanding this significant increase in short term interest rates over the past fifteen months, our net interest margin on a tax equivalent basis in the third quarter of 2005 expanded 29 basis points to 3.14% compared with 2.85% for the third quarter of 2004. However, we remain a liability sensitive bank, and rising interest rates have caused our net interest margin to decrease 19 basis points from 3.33% for the linked quarter ended June 30, 2005. Net Interest Income Net interest income for the third quarter of 2005 increased by $897 thousand or 11.9% to $8.5 million compared with $7.6 million for the same period in 2004. Total interest income increased by $3.3 million to $15.6 million for the third quarter of 2005 compared with $12.3 million for the same quarter in 2004, partially offset by a $2.5 million increase in total interest expense to $7.2 million for the third quarter of 2005 compared with $4.7 million for the same quarter in 2004. The $3.3 million increase in total interest income was primarily due to a $3.5 million increase in loan interest income, resulting from a 23.5% increase in volume of average loans outstanding combined with a 97 basis point increase in the average yield on loans. The average balance of loans in the third quarter of 2005 increased $125.1 million to $658.8 million compared with $533.7 million for the same period in 2004, while the average yield on loans increased to 6.86% from 5.89%. The $2.5 million increase in total interest expense was principally the result of a 112 basis point increase in average rates on interest-bearing liabilities to 3.15% in the third quarter of 2005 compared with 2.03% in the third quarter of 2004. The average balance of interest-bearing liabilities decreased $19.9 million in the third quarter of 2005 compared with the third quarter of 2004. The provision for loan losses in the third quarter of 2005 was $600 thousand, a $25 thousand decrease compared with $625 thousand in the third quarter of 2004. Net interest income after provision for loan losses increased $922 thousand or 13.3% to $7.9 million for the third quarter of 2005 compared with $6.9 million in the same period in 2004. Noninterest Income Noninterest income totaled $391 thousand in the third quarter of 2005 compared with $543 thousand in the third quarter of 2004, a decrease of $152 thousand primarily as a result of reduced gains on sales of securities. We posted $197 thousand in gains on the sale of securities in the third quarter of 2004 compared with no sales of securities during the same period in 2005. Noninterest Expense Noninterest expense in the third quarter of 2005 increased $216 thousand or 4.6% to $4.9 million compared with $4.7 million in the third quarter of 2004, primarily due to increases in data processing expenses and higher legal and professional fees associated with being a publicly traded company, including Sarbanes-Oxley compliance costs, partially offset by reduced salaries and employee benefit expenses, net occupancy expenses and other expenses. RESULTS FOR NINE MONTHS ENDED SEPTEMBER 30, 2005 Net earnings for the nine months ended September 30, 2005 were $2.3 million or $0.19 per diluted share, a decrease of $2.2 million or 47.9%, compared with $4.5 million or $0.57 per diluted share for same period in 2004. This decrease in net earnings for the nine months ended September 30, 2005 compared with the same period in 2004 is primarily the result of our balance sheet restructuring plan which resulted in a non-recurring impairment writedown loss of approximately $6.1 million before tax (approximately $4.1 million after tax) during the quarter ended March 31, 2005. This $6.1 million non-recurring impairment writedown loss, combined with a decrease in gains on sales of securities of $572 thousand and a $1.4 million increase in noninterest expenses, was partially offset by a $4.3 million increase in net interest income, a $1.1 million decrease in the provision for Federal income taxes and a $425 thousand decrease in the provision for loan losses. Diluted earnings per share excluding the non-recurring impairment writedown loss would have been $0.51 on 12.6 million shares for the nine months ended September 30, 2005 compared with $0.57 per share on 7.9 million shares for the same period of 2004. Net Interest Income For the nine months ended September 30, 2005, net interest income increased by $4.3 million or 20.8% to $25.0 million compared with $20.7 million for the same period in 2004. This increase is primarily due to a 31.4% increase in average loans outstanding, along with an 80 basis point increase in the average yield on loans outstanding, partially offset by an 88 basis point increase in weighted average rates on total interest-bearing liabilities. Total interest income increased by $10.7 million to $44.1 million for the nine months ended September 30, 2005 compared with $33.4 million for the same period in 2004, partially offset by a $6.4 million increase in total interest expense to $19.1 million for the nine months ended September 30, 2005 compared with $12.7 million for the same period in 2004. The $10.7 million increase in total interest income was primarily due to a $10.6 million increase in loan interest income, resulting from a 31.4% increase in volume of average loans outstanding combined with an 80 basis point increase in the average yield on loans. The average balance of loans for the nine months ended September 30, 2005 increased $152.6 million to $638.1 million compared with $485.5 million for the same period in 2004, while the average yield on loans increased to 6.65% from 5.85%. The $6.4 million increase in total interest expense for the nine months ended September 30, 2005 was principally the result of an 88 basis point increase in weighted average rates on total interest-bearing liabilities. The weighted average rate on total interest bearing liabilities increased to 2.83% for the nine months ended September 30, 2005 compared with 1.95% for the same period in 2004, while the average balance of interest-bearing liabilities increased $33.8 million to $904.3 million for the nine months ended September 30, 2005 compared with $870.5 million for the same period of 2004. Our net interest margin on a tax equivalent basis increased 31 basis points to 3.12% for the nine months ended September 30, 2005 compared with 2.81% for the same period in 2004. Noninterest Income For the nine months ended September 30, 2005, noninterest income decreased by $6.6 million to a negative $4.8 million compared with noninterest income of $1.8 million for the same period of 2004, principally as a result of the $6.1 million non-recurring impairment writedown loss in connection with the balance sheet restructuring plan and a decrease of $572 thousand in gains on sales of securities. Noninterest Expense Noninterest expense for the nine months ended September 30, 2005 was $14.7 million compared with $13.4 million for the same period in 2004, an increase of $1.3 million or 10.4%, primarily due to a $589 thousand increase in legal and professional fees, a $443 thousand increase in data processing expenses and a $393 thousand increase in salaries and employee benefits. BALANCE SHEET REVIEW Assets at September 30, 2005 were $1.1 billion, up 2.4% from September 30, 2004 and down 0.8% from December 31, 2004, principally as a result of the balance sheet restructuring plan. As of September 30, 2005, total loans were up $104.8 million or 18.9% to $658.0 million compared with $553.2 million as of September 30, 2004 and down 1.0% from $664.9 million at June 30, 2005. Commented Harvey Zinn, President and Chief Executive Officer, "Although our loans were down slightly from the end of the second quarter, our average loan growth continues. For the three months ended September 30, 2005, our loans averaged $658.8 million, up from $641.7 million for the linked second quarter of 2005 and up $125.2 million or 23.5% from the average for the three months ended September 30, 2004. For the nine months ended September 30, 2005, our loans averaged $638.1 million, up $152.6 million or 31.4% compared with average loans of $485.5 million for the nine months ended September 30, 2004." Commercial mortgage loans accounted for 46.6% of the loan portfolio compared with 47.1% at September 30, 2004 and construction and land development loans accounted for 21.0% of the loan portfolio compared with 19.3% at September 30, 2004. Average deposits in the first nine months of 2005 increased 1.2% to $826.7 million compared with $816.7 million for the first nine months of 2004. Noninterest-bearing demand deposits increased 8.1% and lower cost NOW, savings and money market accounts increased 2.7%, more than offsetting the 2.0% decline in higher cost time deposits. "We continued our strategy of allowing broker and internet deposits to run off upon maturity, as these higher costing deposits decreased approximately $72.4 million to $9.4 million at September 30, 2005 compared with $81.8 million at September 30, 2004. We remain focused on our business strategy of providing exceptional service to our community, allowing us to retain our core deposit customers," Brewer stated. Shareholders' equity at September 30, 2005 was $88.3 million compared with $86.1 million at September 30, 2004. Book value per share was $7.10 at September 30, 2005, compared with $6.92 at September 30, 2004. ASSET QUALITY Nonperforming assets as of September 30, 2005 were $11.8 million, an increase of $5.4 million compared with $6.4 million as of September 30, 2004, principally as a result of an increase of $7.2 million in nonaccrual loans, partially offset by a decrease in other real estate owned of $1.7 million to $490 thousand at September 30, 2005 compared with $2.2 million at September 30, 2004. The $7.2 million increase in nonaccrual loans was primarily the result of two real estate loans and one business and industrial loan. The business and industrial loan, collateralized by furniture, fixtures and equipment and by accounts receivable, in the amount of approximately $3.9 million was placed on nonaccrual status during June 2005. Although this loan is performing in accordance with its terms, management was concerned about its future performance and therefore placed it on nonaccrual status. The two real estate loans, both related to the same guarantor and placed on nonaccrual status in February 2005, consisted of one loan in the amount of $2.4 million secured by multi-family real estate and another loan in the amount of $711 thousand secured by commercial real estate. Although these two loans are performing in accordance with their terms, management was concerned about the cash flow of the related properties and the financial status of the related guarantor. As a percentage of total loans and other real estate owned, nonperforming assets were 1.79% at September 30, 2005, compared with 1.15% at September 30, 2004. At June 30, 2005, nonperforming assets were $10.7 million, or 1.61% of total loans and other real estate owned. During the nine months ended September 30, 2005, we recorded a provision for loan losses of $1.9 million compared with $2.3 million for the same period in 2004. Although the provision recorded in 2005 is less than the same period in 2004, the allowance for loan losses as a percentage of total loans at September 30, 2005 increased to 1.40% compared with 1.35% at September 30, 2004. FRANCHISE GROWTH "Our Katy branch has been open for approximately one year and continues to meet our goals, with deposit growth of approximately $1 million per month," said Zinn. "Our Pecan Grove location, housed in leased space in Richmond, Texas just southwest of Sugar Land, opened on September 30, 2005. In addition, we expect our Cinco Ranch location in Katy, Texas to open during 2006. Additionally, in September, 2005, we became the depository for two school districts, Katy Independent School District and Fort Bend Independent School District." THE COMPANY SNB Bancshares, Inc. is a bank holding company headquartered approximately 15 miles southwest of downtown Houston in Sugar Land, Texas, the largest city in fast growing Fort Bend County. The Company, with total assets of $1.1 billion, total loans of $658.0 million, total deposits of $738.3 million and total shareholders' equity of $88.3 million, as of September 30, 2005, has five full-service branches and two drive-through locations in Harris and Fort Bend Counties. Notice under the Private Securities Litigation Reform Act of 1995 Except for historical information contained herein, this press release may constitute forward-looking statements for the purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and as such, may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from the results, performance or achievements expressed or implied by such forward-looking statements. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Act of 1995, and is including this statement for purposes of said safe harbor provisions. The Company's actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation, the following: (a) the effects of future economic and business conditions on the Company and our customers; (b) changes in governmental legislation and regulations; (c) the risks of changes in interest rates; (d) competition from other banks and financial institutions for customer deposits and loans; (e) the failure of assumptions underlying the establishment of reserves for loan losses; (f) changes in the levels of loan prepayments and the resulting effects on the value of the Company's loan portfolio; (g) the failure of assumptions underlying the establishment of and provisions made to the allowance for loan losses; (h) the effect of changes in accounting policies and practices which may be adopted by regulatory agencies and/or the Financial Accounting Standards Board; (i) technological changes; (j) acquisition and integration of acquired businesses; (k) the loss of senior management or operating personnel and the potential inability to hire qualified personnel at reasonable compensation levels; (l) acts of terrorism; and (m) other risks and uncertainties listed from time to time in the Company's reports and other documents filed with the Securities and Exchange Commission. Contacts: R. Darrell Brewer, CFO (281) 269-7271 Whitney Rowe, Investor Relations & Corporate Secretary (281) 269-7220 SNB BANCSHARES, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars in thousands, except outstanding shares and per share data) (Unaudited) For the Three Months Ended September 30, 2005 2004 % chg EARNINGS SUMMARY: Net earnings $2,174 $1,818 19.6% Basic earnings per share $0.17 $0.20 (12.1) Diluted earnings per share 0.17 0.19 (10.5) Weighted average shares outstanding: Common stock 9,782,761 6,456,156 51.5 Class B stock 2,652,475 2,680,521 (1.0) Total 12,435,236 9,136,677 36.1 Shares outstanding at end of period: Common stock 9,782,878 9,750,312 0.3 Class B stock 2,652,475 2,680,041 (1.0) Total 12,435,353 12,430,353 0.0 EARNINGS STATEMENT DATA: Interest income: Loans $11,551 $8,031 43.8% Securities: Taxable 3,845 4,184 (8.1) Nontaxable 197 50 294.0 Federal funds sold and earning deposits 41 14 192.9 Total interest income 15,634 12,279 27.3 Interest expense: Demand deposits 1,860 1,215 53.1 Certificates and other time deposits 2,899 2,179 33.0 Junior subordinated debentures 701 566 23.9 Other borrowings 1,711 753 127.2 Total interest expense 7,171 4,713 52.2 Net interest income 8,463 7,566 11.9 Provision for loan losses 600 625 (4.0) Net interest income after provision 7,863 6,941 13.3 Noninterest income: Service charges on deposit accounts 195 193 1.0 Gain on sale of securities-net --- 197 (100.0) Impairment write-down of securities --- --- --- Other 196 153 28.1 Total noninterest income 391 543 (28.0) Noninterest Expense: Salaries and employee benefits 2,912 2,944 (1.1) Net occupancy expense 477 494 (3.4) Data processing 457 284 60.9 Legal and professional fees 295 158 86.7 FDIC deposit insurance premium 29 31 (6.5) Other 777 820 (5.2) Total noninterest expense 4,947 4,731 4.6 Earnings before income taxes 3,307 2,753 20.1 Provision for income taxes 1,133 935 21.2 Net earnings $2,174 $1,818 19.6% For the Nine Months Ended September 30, 2005 2004 % chg EARNINGS SUMMARY: Net earnings $2,343 $4,494 (47.9)% Basic earnings per share $0.19 $0.58 (67.7) Diluted earnings per share 0.19 0.57 (66.7) Weighted average shares outstanding: Common stock 9,767,868 4,738,974 106.1 Class B stock 2,666,993 2,974,458 (10.3) Total 12,434,861 7,713,432 61.2 Shares outstanding at end of period: Common stock 9,782,878 9,750,312 0.3 Class B stock 2,652,475 2,680,041 (1.0) Total 12,435,353 12,430,353 0.0 EARNINGS STATEMENT DATA: Interest income: Loans $32,167 $21,617 48.8% Securities: Taxable 11,364 11,535 (1.5) Nontaxable 489 91 437.4 Federal funds sold and earning deposits 102 135 (24.4) Total interest income 44,122 33,378 32.2 Interest expense: Demand deposits 5,354 3,190 67.8 Certificates and other time deposits 8,335 6,708 24.3 Junior subordinated debentures 1,996 1,603 24.5 Other borrowings 3,479 1,209 187.8 Total interest expense 19,164 12,710 50.8 Net interest income 24,958 20,668 20.8 Provision for loan losses 1,850 2,275 (18.7) Net interest income after provision 23,108 18,393 25.6 Noninterest income: Service charges on deposit accounts 646 623 3.7 Gain on sale of securities-net 128 700 (81.7) Impairment write-down of securities (6,144) --- --- Other 572 453 26.3 Total noninterest income (4,798) 1,776 (370.2) Noninterest Expense: Salaries and employee benefits 8,779 8,386 4.7 Net occupancy expense 1,322 1,382 (4.3) Data processing 1,284 841 52.7 Legal and professional fees 1,037 448 131.5 FDIC deposit insurance premium 89 84 6.0 Other 2,235 2,221 0.6 Total noninterest expense 14,746 13,362 10.4 Earnings before income taxes 3,564 6,807 (47.6) Provision for income taxes 1,221 2,313 (47.2) Net earnings $2,343 $4,494 (47.9)% SNB BANCSHARES, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars in thousands, except outstanding shares and per share data) (Unaudited) Q3 Q2 Q1 Q4 Q3 2005 2005 2005 2004 2004 EARNINGS STATEMENT DATA: Interest income: Loans $11,551 $10,819 $9,797 $9,153 $8,031 Securities: Taxable 3,845 3,593 3,926 3,992 4,184 Nontaxable 197 159 133 111 50 Federal funds sold and earning deposits 41 47 14 19 14 Total interest income 15,634 14,618 13,870 13,275 12,279 Interest expense: Demand deposits 1,860 1,708 1,786 1,323 1,215 Certificates and other time deposits 2,899 2,768 2,668 2,333 2,179 Junior subordinated debentures 701 671 624 592 566 Other borrowings 1,711 885 883 1,047 753 Total interest expense 7,171 6,032 5,961 5,295 4,713 Net interest income 8,463 8,586 7,909 7,980 7,566 Provision for loan losses 600 650 600 675 625 Net interest income after provision 7,863 7,936 7,309 7,305 6,941 Noninterest income: Service charges on deposit accounts 195 228 223 163 193 Gain on sale of securities-net --- 128 --- --- 197 Impairment write-down of securities --- --- (6,144) --- --- Other 196 189 187 182 153 Total noninterest income 391 545 (5,734) 345 543 Noninterest Expense: Salaries and employee benefits 2,912 2,934 2,933 2,980 2,944 Net occupancy expense 477 440 405 480 494 Data processing 457 414 413 377 284 Legal and professional fees 295 353 389 205 158 FDIC deposit insurance premium 29 31 29 31 31 Other 777 732 726 1,388 820 Total noninterest expense 4,947 4,904 4,895 5,461 4,731 Earnings (loss) before income taxes 3,307 3,577 (3,320) 2,189 2,753 Provision (benefit) for income taxes 1,133 1,222 (1,134) 736 935 Net earnings (loss) $2,174 $2,355 $(2,186) $1,453 $1,818 Basic EPS $0.17 $0.19 $(0.18) $0.12 $0.20 Diluted EPS 0.17 0.19 (0.17) 0.11 0.19 Weighted average shares outstanding: Common stock 9,782,761 9,764,858 9,755,689 9,752,284 6,456,156 Class B stock 2,652,475 2,670,095 2,678,696 2,679,498 2,680,521 Total 12,435,236 12,434,953 12,434,385 12,431,782 9,136,677 SNB BANCSHARES, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars in thousands) (Unaudited) Q3 Q3 2005 2004 % chg BALANCE SHEET AVERAGES: Loans $658,760 $533,607 23.5% Allowance for loan losses (9,414) (7,258) 29.7 Loans, net 649,346 526,349 23.4 Investment securities 406,438 517,041 (21.4) Federal funds sold 3,449 816 322.7 Interest-earning deposits in other financial institutions 1,106 2,985 (62.9) Cash and due from banks 19,831 13,116 51.2 Premises and equipment 20,702 13,061 58.5 Accrued interest receivable and other assets 13,330 15,542 (14.2) Total assets $1,114,202 $1,088,910 2.3% Demand deposits $117,312 $111,968 4.8% NOW, savings, and money market accounts 327,733 334,347 (2.0) Time deposits 339,671 351,116 (3.3) Total deposits 784,716 797,431 (1.6) Other borrowed funds 197,209 199,093 (0.9) Junior subordinated debentures 38,250 38,250 0.0 Accrued interest payable and other liabilities 5,449 3,536 54.1 Total liabilities 1,025,624 1,038,310 (1.2) Shareholders' equity 88,578 50,600 75.1 Total liabilities and shareholders' equity $1,114,202 $1,088,910 2.3% September 30, 2005 2004 PERIOD END BALANCES: Loans $658,003 $553,185 18.9% Allowance for loan losses (9,185) (7,473) 22.9 Loans, net 648,818 545,712 18.9 Investment securities 408,473 503,584 (18.9) Federal funds sold 1,450 1,735 (16.4) Interest-earning deposits in other financial institutions 7,267 2,179 233.5 Cash and due from banks 19,472 13,692 42.2 Premises and equipment 21,835 13,837 57.8 Accrued interest receivable and other assets 13,432 13,797 (2.6) Total assets $1,120,747 $1,094,536 2.4% Demand deposits $128,090 $103,007 24.4% NOW, savings, and money market accounts 330,463 356,036 (7.2) Time deposits 279,766 356,154 (21.4) Total deposits 738,319 815,197 (9.4) Other borrowed funds 250,500 151,500 65.3 Junior subordinated debentures 38,250 38,250 0.0 Accrued interest payable and other liabilities 5,341 3,536 51.0 Total liabilities 1,032,410 1,008,483 2.4 Shareholders' equity 88,337 86,053 2.7 Total liabilities and shareholders' equity $1,120,747 $1,094,536 2.4% YTD YTD 2005 2004 % chg BALANCE SHEET AVERAGES: Loans $638,095 $485,532 31.4% Allowance for loan losses (8,945) (6,572) 36.1 Loans, net 629,150 478,960 31.4 Investment securities 426,444 478,067 (10.8) Federal funds sold 1,894 11,446 (83.5) Interest-earning deposits in other financial institutions 2,375 7,168 (66.9) Cash and due from banks 17,366 15,269 13.7 Premises and equipment 18,645 12,799 45.7 Accrued interest receivable and other assets 13,829 12,921 7.0 Total assets $1,109,703 $1,016,630 9.2% Demand deposits $113,615 $105,136 8.1% NOW, savings, and money market accounts 346,896 337,891 2.7 Time deposits 366,234 373,668 (2.0) Total deposits 826,745 816,695 1.2 Other borrowed funds 152,899 120,642 26.7 Junior subordinated debentures 38,250 38,250 0.0 Accrued interest payable and other liabilities 4,600 3,258 41.2 Total liabilities 1,022,494 978,845 4.5 Shareholders' equity 87,209 37,785 130.8 Total liabilities and shareholders' equity $1,109,703 $1,016,630 9.2% SNB BANCSHARES, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars in thousands) (Unaudited) Q3 Q2 Q1 2005 2005 2005 QUARTERLY AVERAGE BALANCE SHEET HISTORY: Loans $658,760 $641,650 $613,375 Allowance for loan losses (9,414) (9,013) (8,396) Loans, net 649,346 632,637 604,979 Investment securities 406,438 386,894 486,885 Federal funds sold 3,449 1,366 838 Interest-earning deposits in other financial institutions 1,106 5,032 986 Cash and due from banks 19,831 14,907 17,333 Premises and equipment 20,702 18,810 16,375 Accrued interest receivable and other assets 13,330 13,150 15,024 Total assets $1,114,202 $1,072,796 $1,142,420 Demand deposits $117,312 $118,122 $105,280 NOW, savings, and money market accounts 327,733 337,496 375,990 Time deposits 339,671 369,909 389,669 Total deposits 784,716 825,527 870,939 Other borrowed funds 197,209 118,715 142,167 Junior subordinated debentures 38,250 38,250 38,250 Accrued interest payable and other liabilities 5,449 4,127 4,209 Total liabilities 1,025,624 986,619 1,055,565 Shareholders' equity 88,578 86,177 86,855 Total liabilities and shareholders' equity $1,114,202 $1,072,796 $1,142,420 PERIOD END BALANCES HISTORY: Loans $658,003 $664,899 $630,048 Allowance for loan losses (9,185) (9,387) (8,738) Loans, net 648,818 655,512 621,310 Investment securities 408,473 399,523 371,684 Federal funds sold 1,450 1,150 1,210 Interest-earning deposits in other financial institutions 7,267 642 25,773 Cash and due from banks 19,472 20,793 15,950 Premises and equipment 21,835 19,615 17,769 Accrued interest receivable and other assets 13,432 12,063 14,282 Total assets $1,120,747 $1,109,298 $1,067,978 Demand deposits $128,090 $118,165 $111,408 NOW, savings, and money market accounts 330,463 327,181 368,949 Time deposits 279,766 360,413 387,012 Total deposits 738,319 805,759 867,369 Other borrowed funds 250,500 173,100 75,500 Junior subordinated debentures 38,250 38,250 38,250 Accrued interest payable and other liabilities 5,341 4,570 3,489 Total liabilities 1,032,410 1,021,679 984,608 Shareholders' equity 88,337 87,619 83,370 Total liabilities and shareholders' equity $1,120,747 $1,109,298 $1,067,978 Q4 Q3 2004 2004 QUARTERLY AVERAGE BALANCE SHEET HISTORY: Loans $579,459 $533,607 Allowance for loan losses (7,748) (7,258) Loans, net 571,711 526,349 Investment securities 496,204 517,041 Federal funds sold 1,496 816 Interest-earning deposits in other financial institutions 1,849 2,985 Cash and due from banks 16,316 13,116 Premises and equipment 15,453 13,061 Accrued interest receivable and other assets 14,328 15,542 Total assets $1,117,357 $1,088,910 Demand deposits $103,502 $111,968 NOW, savings, and money market accounts 325,857 334,347 Time deposits 351,178 351,116 Total deposits 780,537 797,431 Other borrowed funds 207,593 199,093 Junior subordinated debentures 38,250 38,250 Accrued interest payable and other liabilities 3,977 3,536 Total liabilities 1,030,357 1,038,310 Shareholders' equity 87,000 50,600 Total liabilities and shareholders' equity $1,117,357 $1,088,910 PERIOD END BALANCES HISTORY: Loans $598,292 $553,185 Allowance for loan losses (8,121) (7,473) Loans, net 590,171 545,712 Investment securities 488,523 503,584 Federal funds sold --- 1,735 Interest-earning deposits in other financial institutions 441 2,179 Cash and due from banks 20,794 13,692 Premises and equipment 16,137 13,837 Accrued interest receivable and other assets 14,022 13,797 Total assets $1,130,088 $1,094,536 Demand deposits $110,858 $103,007 NOW, savings, and money market accounts 398,051 356,036 Time deposits 359,477 356,154 Total deposits 868,386 815,197 Other borrowed funds 132,900 151,500 Junior subordinated debentures 38,250 38,250 Accrued interest payable and other liabilities 4,151 3,536 Total liabilities 1,043,687 1,008,483 Shareholders' equity 86,401 86,053 Total liabilities and shareholders' equity $1,130,088 $1,094,536 SNB BANCSHARES, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars in thousands) (Unaudited) YIELD ANALYSIS: For the Three Months Ended September 30, 2005 2004 Average Interest Average Average Interest Average Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Balance Paid Rate Balance Paid Rate Assets: Interest-earning assets: Loans $658,760 $11,551 6.86% $533,607 $8,031 5.89% Investment securities 406,438 4,042 4.08 517,041 4,234 3.20 Federal funds sold 3,449 31 3.52 816 3 1.33 Interest-earning deposits in other financial institutions 1,106 10 3.58 2,985 11 1.45 Total interest- earning assets 1,069,753 15,634 5.79% 1,054,449 12,279 4.55% Less allowance for loan losses (9,414) (7,258) Total interest- earning assets, net of allowance 1,060,339 1,047,191 Non-earning assets: Cash and due from banks 19,831 13,116 Premises and equipment 20,702 13,061 Accrued interest receivable and other assets 13,330 15,542 Total noninterest- earning assets 53,863 41,719 Total assets $1,114,202 $1,088,910 Liabilities and Shareholders' Equity: Interest-bearing liabilities: NOW, savings, and money market accounts $327,733 $1,860 2.25% $334,347 $1,215 1.45% Time deposits 339,671 2,899 3.39 351,116 2,179 2.47 Other borrowed funds 197,209 1,711 3.39 199,093 753 1.51 Junior subordinated debentures 38,250 701 7.17 38,250 566 5.79 Total interest- bearing liabilities 902,863 7,171 3.15% 922,806 4,713 2.03% Noninterest- bearing liabilities: Demand deposits 117,312 111,968 Accrued interest payable and other liabilities 5,449 3,536 Total noninterest- bearing liabilities 122,761 115,504 Total liabilities 1,025,624 1,038,310 Shareholders' equity 88,578 50,600 Total liabilities and shareholders' equity $1,114,202 $1,088,910 Net interest income $8,463 $7,566 Net interest spread 2.64 2.52 Net interest margin (tax equivalent) 3.14% 2.85% SNB BANCSHARES, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars in thousands) (Unaudited) RATE VOLUME ANALYSIS: For the Three Months Ended September 30, 2005 Compared with the Same Period in 2004 Increase (Decrease) Q3 Q3 Increase Due to Change in 2005 2004 (Decrease) Volume Rate Total Interest-earning assets: Loans $11,551 $8,031 $3,520 $1,858 $1,662 $3,520 Investment securities 4,042 4,234 (192) (890) 698 (192) Federal funds sold 31 3 28 9 19 28 Interest-bearing deposits in other financial institutions 10 11 (1) (7) 6 (1) Total interest income 15,634 12,279 3,355 970 2,385 3,355 Interest-bearing liabilities: NOW, savings and money market accounts 1,860 1,215 645 (24) 669 645 Time deposits 2,899 2,179 720 (71) 791 720 Other borrowed funds 1,711 753 958 (7) 965 958 Junior subordinated debentures 701 566 135 --- 135 135 Total in interest expense 7,171 4,713 2,458 (102) 2,560 2,458 Net interest income $8,463 $7,566 $897 $1,072 $(175) $897 SNB BANCSHARES, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars in thousands) (Unaudited) YIELD ANALYSIS: For the Nine Months Ended September 30, 2005 2004 Average Interest Average Average Interest Average Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Balance Paid Rate Balance Paid Rate Assets: Interest-earning assets: Loans $638,095 $32,167 6.65% $485,532 $21,617 5.85% Investment securities 426,444 11,853 3.79 478,067 11,626 3.19 Federal funds sold 1,894 46 3.18 11,446 80 0.92 Interest-earning deposits in other financial institutions 2,375 56 3.13 7,168 55 1.00 Total interest- earning assets 1,068,808 44,122 5.49% 982,213 33,378 4.46% Less allowance for loan losses (8,945) (6,572) Total interest- earning assets, net of allowance 1,059,863 975,641 Non-earning assets: Cash and due from banks 17,366 15,269 Premises and equipment 18,645 12,799 Accrued interest receivable and other assets 13,829 12,921 Total noninterest- earning assets 49,840 40,989 Total assets $1,109,703 $1,016,630 Liabilities and Shareholders' Equity: Interest-bearing liabilities: NOW, savings, and money market accounts $346,896 $5,354 2.06% $337,891 $3,190 1.26% Time deposits 366,234 8,335 3.04 373,668 6,708 2.40 Other borrowed funds 152,899 3,479 3.00 120,642 1,209 1.34 Junior subordinated debentures 38,250 1,996 6.88 38,250 1,603 5.51 Total interest- bearing liabilities 904,279 19,164 2.83% 870,451 12,710 1.95% Noninterest- bearing liabilities: Demand deposits 113,615 105,136 Accrued interest payable and other liabilities 4,600 3,258 Total noninterest- bearing liabilities 118,215 108,394 Total liabilities 1,022,494 978,845 Shareholders' equity 87,209 37,785 Total liabilities and shareholders' equity $1,109,703 $1,016,630 Net interest income $24,958 $20,668 Net interest spread 2.66 2.51 Net interest margin (tax equivalent) 3.12% 2.81% SNB BANCSHARES, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars in thousands) (Unaudited) RATE VOLUME ANALYSIS: For the Nine Months Ended September 30, 2005 Compared with the Same Period in 2004 Increase (Decrease) Increase Due to Change in 2005 2004 (Decrease) Volume Rate Total Interest-earning assets: Loans $32,167 $21,617 $10,550 6,675 3,875 $10,550 Investment securities 11,853 11,626 227 (1,230) 1,457 227 Federal funds sold 46 80 (34) (66) 32 (34) Interest-bearing deposits in other financial institutions 56 55 1 (36) 37 1 Total interest income 44,122 33,378 10,744 5,343 5,401 10,744 Interest-bearing liabilities: NOW, savings and money market accounts 5,354 3,190 2,164 85 2,079 2,164 Time deposits 8,335 6,708 1,627 (133) 1,760 1,627 Other borrowed funds 3,479 1,209 2,270 322 1,948 2,270 Junior subordinated debentures 1,996 1,603 393 --- 393 393 Total in interest expense 19,164 12,710 6,454 274 6,180 6,454 Net interest income $24,958 $20,668 $4,290 $5,069 $(779) $4,290 SNB BANCSHARES, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars in thousands) (Unaudited) LOAN PORTFOLIO: As of As of As of September 30, December 31, September 30, 2005 2004 2004 Amount Percent Amount Percent Amount Percent Business and industrial $77,614 11.8% $70,101 11.7% $64,152 11.6% Real estate: Construction and land development 137,997 21.0 123,655 20.7 106,536 19.3 Residential 123,908 18.8 126,200 21.1 110,828 20.0 Commercial mortgages 306,610 46.6 267,158 44.7 260,359 47.1 Consumer 13,135 2.0 12,592 2.1 12,715 2.3 Other 345 0.0 227 0.0 154 0.0 Gross loans 659,609 100.2 599,933 100.3 554,744 100.3 Less unearned discounts and fees (1,606) (0.2) (1,641) (0.3) (1,559) (0.3) Total loans $658,003 100.0% $598,292 100.0% $553,185 100.0% NONPERFORMING ASSETS: As of As of As of September 30, December 31, September 30, 2005 2004 2004 Nonaccrual loans $9,472 $1,489 $2,237 Accruing loans past due 90 days or more --- 62 --- Restructured loans 1,839 1,917 1,942 Other real estate and repossessed assets 490 1,320 2,183 Total nonperforming assets $11,801 $4,788 $6,362 Nonperforming assets to total loans and other real estate 1.79% 0.80% 1.15% ALLOWANCE FOR LOAN LOSSES: As of and As of and for the for the Nine Months Ended Year Ended September 30, September 30, December 31, 2005 2004 2004 Allowance for loan losses at beginning of period $8,121 $5,650 $5,650 Provision for loan losses 1,850 2,275 2,950 Charge-Offs: Business and industrial (801) (242) (242) Real estate --- (235) (262) Consumer (68) (84) (110) Total charge-offs (869) (561) (614) Recoveries: Business and industrial 59 33 50 Real estate 13 60 63 Consumer 11 16 22 Total recoveries 83 109 135 Net recoveries (charge-offs) (786) (452) (479) Allowance for loan losses at end of period $9,185 $7,473 $8,121 Allowance for loan losses to end of period loans 1.40% 1.35% 1.36% Net charge-offs to average loans 0.12 0.09 0.09 Allowance for loans losses to end of period nonperforming loans 81.20 178.82 234.17 SNB BANCSHARES, INC. AND CONSOLIDATED SUBSIDIARIES SELECTED FINANCIAL DATA (Unaudited) SELECTED RATIOS AND OTHER DATA: Q3 Q3 YTD YTD 2005 2004 2005 2004 Return on average assets 0.77% 0.66% 0.28% 0.59% Return on average equity 9.74 14.30 3.59 15.89 Leverage ratio 11.15 10.83 Tier 1 Capital to RWA ratio 16.96 18.28 Total Capital (Tier 1 + Tier 2) to RWA ratio 18.99 20.56 Average equity to average total assets 7.95 4.65 7.86 3.72 Tax equivalent yield on earning assets 5.72 4.55 5.42 4.46 Cost of funds with demand accounts 2.79 1.81 2.52 1.74 Net interest margin, tax equivalent 3.14 2.85 3.12 2.81 Non-interest expense to average total assets 1.76 1.73 1.78 1.76 Efficiency ratio 55.88 59.79 56.34 61.45 End of period book value per share $7.10 $6.92 Full time equivalent employees 162 156 COMMON STOCK PERFORMANCE: Third Second quarter quarter 2005 2005 Market value of common stock - End of period $11.25 $11.00 Market value of common stock - High 11.90 11.49 Market value of common stock - Low 10.85 9.21 As of As of September 30, June 30, 2005 2005 Book value of common stock $7.10 $7.05 Market/book value of common stock 158.37% 156.11% Price/12 month trailing earnings ratio 36.85X 36.67X DATASOURCE: SNB Bancshares, Inc. CONTACT: R. Darrell Brewer, CFO, +1-281-269-7271, or , or Whitney Rowe, Investor Relations & Corporate Secretary, +1-281-269-7220, or , for SNB Bancshares, Inc. Web site: http://www.snbtx.com/

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