Encore Bancshares Reports Second Quarter 2010 Net Loss Of $12.7 Million, Or $1.16 Per Diluted Share

HOUSTON, July 23, 2010 (GLOBE NEWSWIRE) -- Encore Bancshares, Inc. (Nasdaq:EBTX) today announced its financial results for the second quarter of 2010.

Earnings significantly reduced by credit costs associated with exiting Florida

• Net commercial loan charge-offs of $13.2 million in the Florida portfolio
• Write down of loans held for sale of $2.8 million
• Florida legacy commercial loans reduced to $56.2 million

Florida transactions

• Closed sale of two Florida branches in May, which included $50.5 million in deposits
• Final Florida exit transaction remains on track

• Loans held for sale of $70.6 million

• Deposits held for sale of $184.1 million

Capital position and credit reserves remain strong

• Estimated tier 1 capital of 14.59% and tangible common equity ratio of 6.80%
• Allowance for loan losses of 2.74% of loans, excluding loans held for sale

Texas franchise shows strong core deposit growth

• DDA growth of 17.1%, linked quarter
• DDA as a percent of total deposits in Texas grew to 18%
• Total Texas deposits top $1.0 billion at June 30, 2010

"We continue to work through our Florida problem loans and to reduce our exposure as rapidly as reasonable. I am pleased that our exit of the Florida market remains on track," said James S. D'Agostino, Jr., Chairman and Chief Executive Officer of Encore Bancshares, Inc. "I am optimistic about the opportunity to continue to build our Houston franchise."

Earnings

For the three months ended June 30, 2010, our net loss was $12.7 million, compared with net earnings of $821,000 for the same period of 2009. Loss per diluted common share for the second quarter of 2010 was $1.16, after deducting preferred dividends, compared with earnings per diluted common share of $0.02 for the same period of 2009. The loss for the quarter was due primarily to credit costs related to the Florida market.