September 2006

Dear Shareholders, Customers, and Friends:

More than one hundred years ago, local leaders joined together and founded our Bank. They envisioned an organization that would serve as a pillar of our community by employing local people, providing for hometown charities, offering quality customer service, and supporting the local economy. Today we are proud stewards of that legacy. On that note, we are pleased to announce a significant development in the history of our Bank – and by extension, our community.

Last week our board of directors announced that it is forming a local investor group to purchase 360,000 shares – or approximately 66% of the outstanding stock – of the bank holding company that owns BankTexas.

When this transaction is completed, our organization will be locally owned. Nothing else is changing. We will still have the same management, employees, and office locations. As we grow in the future, we will continue hiring local people, helping local businesses, and adding to the area’s tax base.

As fellow members of our community, we hope you will take faith in our commitment to local ownership. In this era of bank mergers and relentless transformation, BankTexas remains the same. Our values that have endured for more than a century – quality service, technological innovation, and community involvement – will not change.

We invite you to contact us with any questions you may have about this exciting opportunity in the lives of our customers, employees, and community.

Our best wishes,