OmniAmerican Bancorp (OABC) 10-Q 2010 Q1 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                    

Commission file number001-34605

OMNIAMERICAN BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland	27-0983595
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)
1320 S. University Drive, Fort Worth, Texas	76107
(Address of Principal Executive Offices)	(Zip Code)

(817) 367-4640

(Telephone Number, including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yeso Noþ

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yeso Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filero	Accelerated filero	Non-accelerated filerþ	Smaller reporting companyo
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso Noþ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

There were 11,902,500 shares of Common Stock, par value $0.01 per share, issued and outstanding as of May 10, 2010.

	Page
	Number
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Consolidated Balance Sheets at March 31, 2010 and December 31, 2009		1
Unaudited Consolidated Statements of Income for the Three Months Ended March 31, 2010 and 2009		2
Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2010 and 2009		3
Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009		4
Condensed Notes to Unaudited Consolidated Interim Financial Statements		5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures about Market Risk		28
Item 4T. Controls and Procedures		32
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		33
Item 1A. Risk Factors		33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 3. Defaults Upon Senior Securities		34
Item 4. Reserved		34
Item 5. Other Information		34
Item 6. Exhibits		34
SIGNATURE PAGE		34
EXHIBIT INDEX		35
Exhibit 31.1
Exhibit 31.2
Exhibit 32

i

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OmniAmerican Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands, except per share data)

	March 31,			December 31,
	2010			2009
ASSETS
Cash and due from financial institutions	$	14,296		$	14,729
Short-term interest-earning deposits in other financial institutions		11,110			125,415
Total cash and cash equivalents		25,406			140,144
Investments:
Securities available for sale (Amortized cost of $301,303 on March 31, 2010 and $207,338 on December 31, 2009)		304,287			210,421
Other		3,855			3,850
Loans held for sale		1,087			241
Loans, net of deferred fees and discounts		692,194			706,455
Less allowance for loan losses		(8,695	)		(8,328	)
Loans, net		683,499			698,127
Premises and equipment, net		50,156			50,951
Other real estate owned		6,726			6,762
Mortgage servicing rights		1,245			1,168
Deferred tax asset, net		7,267			7,514
Accrued interest receivable		3,729			3,523
Other assets		8,218			11,226
Total assets	$	1,095,475		$	1,133,927
LIABILITIES AND EQUITY CAPITAL
Deposits:
Noninterest-bearing	$	71,237		$	75,628
Interest-bearing		703,985			834,338
Total deposits		775,222			909,966
Federal Home Loan Bank advances		56,000			66,400
Other secured borrowings		58,000			58,000
Accrued expenses and other liabilities		8,625			8,405
Total liabilities		897,847			1,042,771
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01 per share; 100,000,000 shares authorized; 11,902,500 shares issued and outstanding at March 31, 2010, 0 shares issued and outstanding at December 31, 2009		119			—
Additional paid-in capital		115,407			—
Unallocated ESOP Shares		(9,522	)		—
Retained earnings		91,088			90,555
Accumulated other comprehensive income (loss):
Unrealized gain on securities available for sale, net of income taxes		1,970			2,035
Unrealized loss on pension plan, net of income taxes		(1,434	)		(1,434	)
Total accumulated other comprehensive income (loss):		536			601
Total stockholders’ equity		197,628			91,156
Total liabilities and stockholders’ equity	$	1,095,475		$	1,133,927

See Condensed Notes to Unaudited Consolidated Interim Financial Statements.

1

OmniAmerican Bancorp, Inc. and Subsidiary

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended
	March 31,
	2010			2009
Interest income:
Loans, including fees	$	10,642		$	11,241
Securities — taxable		2,505			2,622
Securities — nontaxable		13			52
Total interest income		13,160			13,915
Interest expense:
Deposits		2,413			3,727
Borrowed funds		1,056			2,182
Total interest expense		3,469			5,909
Net interest income		9,691			8,006
Provision for loan losses		800			1,500
Net interest income after provision for loan losses		8,891			6,506
Noninterest income:
Service charges and other fees		2,502			2,586
Net gains on sales of securities available for sale		91			799
Net gains (losses) on sales of repossessed assets		17			(10	)
Net gains on sales of loans		297			560
Commissions		135			217
Other income		182			251
Total noninterest income		3,224			4,403
Noninterest expense:
Salaries and benefits		5,673			5,318
Software and equipment maintenance		787			630
Depreciation of furniture, software and equipment		798			981
FDIC insurance		506			327
Service fees		216			210
Communications costs		272			256
Other operations expense		975			859
Occupancy		960			975
Professional and outside services		842			784
Loan servicing		60			96
Marketing		254			120
Total noninterest expense		11,343			10,556
Income before income tax expense		772			353
Income tax expense		239			190
Net income	$	533		$	163
Earnings per share:
Basic	$	0.03	(1)		N/A
Diluted	$	0.03	(1)		N/A

(1) Calculated from the effective date of January 20, 2010.

See Condensed Notes to Unaudited Consolidated Interim Financial Statements.

2

OmniAmerican Bancorp, Inc. and Subsidiary

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(Dollars in thousands, except share data)

										Accumulated
			Additional		Unallocated					Other			Total
	Common		Paid-in		ESOP			Retained		Comprehensive			Stockholders’
	Stock		Capital		Shares			Earnings		Income (Loss)			Equity
Balances at January 1, 2009	$	—	$	—	$	—		$	89,900	$	(571	)	$	89,329
Three months ended March 31, 2009
Comprehensive income (loss):
Net income									163		—			163
Change in fair value of securities available for sale, net of reclassification to earnings of $(799) and income tax effect of $(187)									—		(363	)		(363	)
Total comprehensive loss														(200	)
Balances at March 31, 2009	$	—	$	—	$	—		$	90,063	$	(934	)	$	89,129
Balances at January 1, 2010	$	—	$	—	$	—		$	90,555	$	601		$	91,156
Three months ended March 31, 2010
Comprehensive income (loss):
Net income									533		—			533
Change in fair value of securities available for sale, net of reclassification to earnings of $(91) and income tax effect of $(34)									—		(65	)		(65	)
											��
Total comprehensive income														468
Issuance of 11,902,500 shares of common stock, net of offering costs		119		115,407		(9,522	)							106,004
Balances at March 31, 2010	$	119	$	115,407	$	(9,522	)	$	91,088	$	536		$	197,628

See Condensed Notes to Unaudited Consolidated Interim Financial Statements.

3

OmniAmerican Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flow (Unaudited)

(In thousands)

	Three Months Ended
	March 31,
	2010			2009
Cash flows from operating activities:
Net income	$	533		$	163
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,215			1,408
Provision for loan losses		800			1,500
Amortization of net premium on investments		370			124
Net gain on sale of securities available for sale		(91	)		(799	)
Net gain on sales of loans held for sale		(297	)		(560	)
Proceeds from sales of loans held for sale		3,902			2,304
Loans originated for sale		(4,748	)		(2,778	)
Net gain on sale of other real estate owned		(10	)		—
Federal Home Loan Bank stock dividends		(5	)		(10	)
Changes in operating assets and liabilities:
Accrued interest receivable		(206	)		230
Other assets		3,212			(680	)
Accrued interest payable and other liabilities		220			517
Net cash provided by operating activities		4,895			1,419
Cash flows from investing activities:
Securities available for sale:
Purchases		(113,376	)		—
Proceeds from sales		1,734			28,742
Proceeds from maturities, calls and principal repayments		17,398			12,983
Redemptions of other investments		—			2,358
Purchases of loans held for investment		(130	)		(11,542	)
Net decrease (increase) in loans held for investment		2,846			(27,324	)
Proceeds from sales of loans held for investment		10,931			26,716
Purchases of premises and equipment		(420	)		(446	)
Proceeds from sales of other real estate owned		524			—
Net cash (used in) provided by investing activities		(80,493	)		31,487
Cash flows from financing activities:
Net (decrease) increase in deposits		(134,744	)		24,611
Net decrease in Federal Home Loan Bank advances		(10,400	)		(24,000	)
Net decrease in other secured borrowings		—			(664	)
Proceeds from issuance of common stock		106,004			—
Net cash used in financing activities		(39,140	)		(53	)
Net (decrease) increase in cash and cash equivalents		(114,738	)		32,853
Cash and cash equivalents, beginning of period		140,144			41,242
Cash and cash equivalents, end of period	$	25,406		$	74,095
Supplemental cash flow information:
Interest paid	$	3,445		$	6,121
Non-cash transactions:
Loans transferred to other real estate owned	$	478		$	100
Loans transferred to foreclosed assets	$	760		$	1,506

See Condensed Notes to Unaudited Consolidated Interim Financial Statements.

4

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements

NOTE 1 — Basis of Financial Statement Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of OmniAmerican Bancorp, Inc. (referred to herein as “the Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These interim consolidated financial statements and notes should be read in conjunction with the Company’s consolidated financial statements, and notes thereto, for the year ended December 31, 2009, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 24, 2010. In management’s opinion, the interim data as of March 31, 2010 and for the three months ended March 31, 2010 and 2009 includes all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. References to the Company include, where appropriate, OmniAmerican Bank.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for loan losses and the fair values of financial instruments are particularly subject to change.

NOTE 2 — Plan of Conversion and Reorganization

On June 23, 2009, the Board of Directors of OmniAmerican Bank (the “Bank”) adopted a Plan of Conversion (the “Plan”) whereby the Bank would convert from a federally chartered mutual savings bank to a federally chartered stock savings bank. The Plan provided for the formation of a holding company, OmniAmerican Bancorp, Inc., that would sell shares of common stock to the public and would own 100% of the common stock of the Bank. On September 11, 2009, OmniAmerican Bancorp, Inc. filed a Registration Statement on Form S-1 with the Securities and Exchange Commission (File No. 333-161894) with respect to the shares to be offered and sold pursuant to the Plan. OmniAmerican Bancorp, Inc. registered for offer and sale 11,902,500 shares of common stock, par value $0.01 per share, at a sales price of $10.00 per share. The registration statement was declared effective by the Securities and Exchange Commission on November 12, 2009. In addition, the Plan was approved by the Office of Thrift Supervision on November 12, 2009. The Bank’s members approved the Plan on January 15, 2010. The shares of common stock were offered to eligible account holders, depositors as of March 31, 2008, of OmniAmerican Bank and tax-qualified employee benefit plans sponsored by the Bank.

The public stock offering closed on January 20, 2010 and the common stock began trading on the NASDAQ Global Market on January 21, 2010 under the symbol “OABC”.

The stock offering resulted in gross proceeds of $119.0 million through the sale of 11,902,500 shares at $10.00 per share. Expenses related to the offering were approximately $3.5 million. OmniAmerican Bancorp, Inc. received net proceeds from the initial public offering of $115.5 million and loaned $9.5 million to OmniAmerican Bank’s employee stock ownership plan to enable it to purchase 952,200 shares of common stock in the offering. The remaining net proceeds were $106.0 million, of which $86.6 million was contributed to OmniAmerican Bank in the form of additional paid-in capital and the remainder has been retained by OmniAmerican Bancorp, Inc. to be utilized for general corporate purposes.

5

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

NOTE 3 — Recent Accounting Pronouncements

In March 2008, the Financial Accounting Standards Board (“FASB”) issued new authoritative guidance under Accounting Standards Codification (“ASC”) Topic 815, “Derivatives and Hedging.” The new authoritative guidance requires entities to provide enhanced disclosures for derivative and hedging activities with regard to the reasons for employing derivative instruments, how they are accounted for, and how these instruments affect an entity’s financial position, financial performance and cash flows. The new authoritative guidance became effective for the Company on January 1, 2009 and did not have a material effect on the Company’s financial statements.

In April 2009, the FASB issued new authoritative guidance under ASC Topic 320, “Investments — Debt and Equity Securities.” The new authoritative guidance amends the other-than-temporary impairment guidance in GAAP for debt securities. Consistent with previous requirements for recording other-than-temporary impairments, the new authoritative guidance states that the amount of impairment loss recorded in earnings for a debt security will be the entire difference between the security’s cost and its fair value if the company intends to sell the debt security prior to recovery or it is more-likely-than not that the company will have to sell the debt security prior to recovery. If, however, the company does not intend to sell the debt security or it concludes that it is more-likely-than-not that it will not have to sell the debt security prior to recovery, the new authoritative guidance requires a company to recognize the credit loss component of an other-than-temporary impairment of a debt security in earnings and the remaining portion of the impairment loss in other comprehensive income. The credit loss component of an other-than-temporary impairment must be determined based on a company’s best estimate of cash flows expected to be collected. The new authoritative guidance became effective for interim and annual periods ending after June 15, 2009. The Company adopted the new authoritative guidance for the period ended June 30, 2009. Adoption did not have a material effect on the Company’s financial statements.

In April 2009, the FASB revised ASC Topic 825, “Financial Instruments,” to require interim reporting period disclosure about the fair value of financial instruments, including assets, liabilities and off-balance sheet items for which it is practicable to estimate fair value. The fair value estimates are made based upon relevant market information, if available, and upon the characteristics of the financial instruments themselves. The Company adopted this guidance for the period ended June 30, 2009. The adoption of the revised interim reporting period disclosures did not have a material effect on the Company’s financial statements.

In April 2009, the FASB issued new authoritative accounting guidance under ASC Topic 820, “Fair Value Measurements and Disclosures,” to address issues related to the determination of fair value when the volume and level of activity for an asset or liability has significantly decreased. It also provides guidance on identifying circumstances that indicate a transaction is not orderly. Determination of whether a transaction is orderly or not orderly in instances when there has been a significant decrease in the volume and level of activity for an asset or liability depends on an evaluation of facts and circumstances and requires the use of significant judgment. The new authoritative guidance requires a company to disclose the inputs and valuation techniques used to measure fair value and to discuss changes in such inputs and valuation techniques, if any, that occurred during the reporting period. The new authoritative guidance became effective for interim and annual periods ending after June 15, 2009. The Company adopted the new authoritative accounting guidance for the period ended June 30, 2009. Adoption did not have a material effect on the Company’s financial statements.

6

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

In May 2009, the FASB issued ASC 855, “Subsequent Events.” The objective of the guidance is to establish principles and requirements for subsequent events and, in particular, the period after the balance sheet date during which management of a reporting entity shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. The guidance is effective for interim and annual reporting periods ending after June 15, 2009. Adoption of this guidance did not have a material effect on the Company’s consolidated financial statements. The Company has evaluated all events or transactions that occurred after December 31, 2009 through the date the Company issued these consolidated financial statements.

In June 2009, the FASB issued new authoritative guidance under ASC Topic 860, “Transfers and Servicing,” to enhance reporting about transfers of financial assets, including securitizations, and where companies have continuing exposure to the risks related to transferred financial assets. The new authoritative guidance eliminates the concept of a “qualifying special-purpose entity” and changes the requirements for derecognizing financial assets. The new authoritative guidance also requires additional disclosures about all continuing involvements with transferred financial assets including information about gains and losses resulting from transfers during the period. The new authoritative guidance under ASC Topic 860 is effective for interim and annual reporting periods beginning after November 15, 2009. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

In June 2009, the FASB issued new authoritative guidance under Statement of Financial Accounting Standard (“SFAS”) No. 167, “Amendments to FASB Interpretation No. 46R.” Under ASC 105-10-65-1d, SFAS No. 167 will remain authoritative until integrated into the FASB Codification. SFAS 167 amends certain requirements of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities” to improve financial reporting by enterprises involved with variable interest entities and to provide more relevant and reliable information to users of financial statements. The Statement is effective for interim and annual reporting periods beginning after November 15, 2009. The adoption of this guidance did not have a material effect on the Company’s results of operations or financial position.

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles,” which is codified as ASC Topic 105, “Generally Accepted Accounting Principles.” This guidance identifies the sources of authoritative accounting principles and the framework for selecting the principles used in the preparation of financial statements that are presented in conformity with U.S. GAAP by nongovernmental entities. This guidance was effective for financial statements issued for interim and annual periods ending after September 15, 2009. Since the codification did not alter existing GAAP, it did not have an impact on the financial statements of the Company.

In August 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, “Measuring Liabilities at Fair Value,” which was codified as ASC Topic 820, “Fair Value Measurements and Disclosures.” This Update applies to all entities that measure liabilities at fair value under ASC 820 and amends sections of ASC Topic 820-10. This ASU states that, in circumstances in which a quoted price in an active market for the identical liability is not available, fair value of the liability must be measured by either (a) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets, or (b) another valuation technique that is consistent with the principles of ASC 820, such as an income approach or a market approach. Further, if a restriction on the transference of the liability exists, the ASU clarifies that an entity is not required to factor that into the inputs of the fair value determination. Lastly, the ASU also clarifies that a quoted price in an active market for the identical liability, or an unadjusted quoted price in an active market for the identical liability, when traded as an asset, are level 1 measurements within the fair value hierarchy. The guidance in this ASU is effective for the first reporting period beginning after August 2009. The adoption of this guidance did not have a material impact upon the Company’s financial statements.

7

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

In January 2010, the FASB issued ASU No. 2010-06, which was codified as ASC Topic 820, “Fair Value Measurements and Disclosures.” The guidance requires companies to disclose transfers in and out of levels 1 and 2, and to expand the reconciliation of level 3 fair value measurements by presenting separately information about purchases, sales, issuances and settlements. The updated guidance also clarifies existing disclosure requirements on the level of disaggregation (provide fair value measurement disclosures for each class of assets and liabilities) and inputs and valuation techniques (disclose for fair value measurements that fall in either level 2 or level 3). This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for disclosures about purchases, sales, issuances and settlements in the reconciliation of level 3 fair value measurements. Those disclosures are effective for periods beginning after December 15, 2010. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

NOTE 4 — Investment Securities

The amortized cost and estimated fair values of investment securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) as of March 31, 2010 and December 31, 2009 were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(In thousands)
March 31, 2010
U. S. government sponsored mortgage-backed securities	$	138,031	$	5,296	$	(205	)	$	143,122
U. S. government sponsored collateralized mortgage obligations		104,982		971		(470	)		105,483
Private-label collateralized mortgage obligations (residential)		5,028		8		(339	)		4,697
Trust preferred securities		7,757		—		(2,246	)		5,511
Municipal obligations		4,495		—		—			4,495
Agency bonds		36,010		—		(106	)		35,904
Other equity securities		5,000		75		—			5,075
Total investment securities available for sale	$	301,303	$	6,350	$	(3,366	)	$	304,287
December 31, 2009
U. S. government sponsored mortgage-backed securities	$	130,090	$	5,000	$	(123	)	$	134,967
U. S. government sponsored collateralized mortgage obligations		54,378		999		(229	)		55,148
Private-label collateralized mortgage obligations (residential)		5,513		—		(438	)		5,075
Trust preferred securities		7,762		—		(2,158	)		5,604
Municipal obligations		4,595		—		—			4,595
Other equity securities		5,000		32		—			5,032
Total investment securities available for sale	$	207,338	$	6,031	$	(2,948	)	$	210,421

8

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

Investment securities available for sale with gross unrealized losses at March 31, 2010 and December 31, 2009, aggregated by investment category and length of time that individual securities have been in a continuous loss position, were as follows:

	Continuous Unrealized Losses Existing for
	Less Than 12 Months					Greater Than 12 Months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	(In thousands)
March 31, 2010
U. S. government sponsored mortgage-backed securities	$	21,779	$	(205	)	$	—	$	—		$	21,779	$	(205	)
U. S. government sponsored collateralized mortgage obligations		32,112		(470	)		—		—			32,112		(470	)
Private-label collateralized mortgage obligations (residential)		—		—			3,408		(339	)		3,408		(339	)
Trust preferred securities		—		—			5,511		(2,246	)		5,511		(2,246	)
Agency bonds		35,904		(106	)		—		—			35,904		(106	)
	$	89,795	$	(781	)	$	8,919	$	(2,585	)	$	98,714	$	(3,366	)
December 31, 2009
U. S. government sponsored mortgage-backed securities	$	11,680	$	(123	)	$	—	$	—		$	11,680	$	(123	)
U. S. government sponsored collateralized mortgage obligations		11,090		(229	)		—		—			11,090		(229	)
Private-label collateralized mortgage obligations (residential)		1,380		(2	)		3,695		(436	)		5,075		(438	)
Trust preferred securities		—		—			5,604		(2,158	)		5,604		(2,158	)
	$	24,150	$	(354	)	$	9,299	$	(2,594	)	$	33,449	$	(2,948	)

At March 31, 2010, the Company owned 205 investments of which 37 had unrealized losses. At December 31, 2009, the Company owned 168 investments of which 15 had unrealized losses. Unrealized losses generally result from interest rate levels differing from those existing at the time of purchase of the securities and, as to mortgage-backed securities, estimated prepayment speeds. These unrealized losses are considered temporary as they reflect fair values on March 31, 2010 and December 31, 2009, and are subject to change daily as interest rates fluctuate. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell prior to recovery. Management evaluates investment securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent of the Company to sell or whether it would be more likely than not required to sell its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

9

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

The amortized cost and fair value of securities available for sale by contractual maturity at March 31, 2010 are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or earlier redemptions that may occur.

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	2,258	$	2,277
Due from one to five years		43,233		41,137
Due from five to ten years		80,411		83,714
Due after ten years		170,401		172,084
Equity securities		5,000		5,075
Total	$	301,303	$	304,287

Investment securities with an amortized cost of $220.7 million and $130.4 million at March 31, 2010 and December 31, 2009, respectively, were pledged to secure Federal Home Loan Bank advances. In addition, investment securities with an amortized cost of $71.7 million and $67.3 million at March 31, 2010 and December 31, 2009, respectively, were pledged to secure other borrowings.

Sales activity of securities available for sale for the three months ended March 31, 2010 and 2009 was as follows:

	Three Months Ended March 31,
	2010		2009
	(In thousands)
Proceeds from sales of investment securities	$	1,734	$	28,742
Gross gains from sales of investment securities		91		799
Gross losses from sales of investment securities		—		—

Gains or losses on the sales of securities are recognized at the trade date utilizing the specific identification method.

10

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

NOTE 5 — Loans and Allowance for Loan Losses

The composition of the loan portfolio was as follows at the dates indicated:

	March 31,			December 31,
	2010			2009
	(In thousands)
Real Estate Loans:
One- to four-family	$	259,186		$	257,265
Home equity		27,796			28,526
Commercial real estate		99,116			100,985
Real estate construction		36,660			36,843
Total real estate loans		422,758			423,619
Consumer Loans:
Automobile, indirect		166,160			176,775
Automobile, direct		27,325			28,722
Unsecured		14,007			14,323
Other		4,883			5,001
Total consumer loans		212,375			224,821
Commercial Business Loans		58,239			59,325
Total loans		693,372			707,765
Less:
Deferred fees and discounts		(1,178	)		(1,310	)
Allowance for losses		(8,695	)		(8,328	)
Total loans receivable, net	$	683,499		$	698,127

Individually impaired loans were as follows:

	March 31,		December 31,
	2010		2009
	(In thousands)
Loans with no allocated allowance	$	14,820	$	10,622
Loans with allocated allowance		6,625		6,561
Total	$	21,445	$	17,183
Amount of the allowance for loan losses allocated to impaired loans	$	1,510	$	687

The average recorded investment in impaired loans was $19.3 million during the three months ended March 31, 2010 and $4.6 million for the three months ended March 31, 2009. Interest income of $162,000 was recognized on troubled debt restructurings (loans for which a portion of interest or principal has been forgiven and loans modified at interest rates materially less than current market rates) included in impaired loans during the three months ended March 31, 2010. No interest income was recognized on impaired loans subsequent to their classification as impaired during the three months ended March 31, 2009.

11

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

At March 31, 2010 and December 31, 2009, loans on which accrual of interest had been discontinued were $9.0 million and $8.3 million, respectively. In addition, at March 31, 2010 and December 31, 2009, the Company had troubled debt restructurings of $17.7 million and $17.2 million, respectively. If interest on non-accruing and troubled debt restructured loans had been current in accordance with their original terms, such income would have been approximately $377,000 and $560,000 for the three months ended March 31, 2010 and 2009, respectively. There were no loans greater than 90 days past due that continued to accrue interest at March 31, 2010 or December 31, 2009.

The Company originates real estate mortgage loans which are sold in the secondary market. The Company retains the servicing for residential mortgage loans that are sold to the Federal National Mortgage Association (“FNMA”). Mortgage loans serviced for FNMA are not included as assets on the consolidated balance sheets. The principal balances of the loans at March 31, 2010 and December 31, 2009 were $113.6 million and $104.9 million, respectively. Mortgage servicing rights associated with the mortgage loans serviced for FNMA totaled $1.2 million and $1.2 million as of March 31, 2010 and December 31, 2009, respectively.

Activity in the allowance for loan losses was as follows for the periods indicated:

	Three Months Ended
	March 31,
	2010			2009
	(In thousands)
Balance, beginning of period	$	8,328		$	8,270
Provision for loan losses		800			1,500
Loans charged-off		(531	)		(1,132	)
Recoveries of loans previously charged-off		98			113
Balance, end of period	$	8,695		$	8,751

NOTE 6 — Repurchase Agreements

On July 24, 2007, the Company entered into a sale of securities under agreement to repurchase (“Repurchase Agreement”) with PNC Bank, N.A. (“PNC”). The Repurchase Agreement is structured as the sale of a specified amount of identified securities to PNC which the Company has agreed to repurchase five years after the initial sale. The Repurchase Agreement is treated as financing and the obligation to repurchase securities sold is included in other secured borrowings in the consolidated balance sheets. The underlying securities continue to be carried as assets of the Company and the Company is entitled to receive interest and principal payments on the underlying securities. The Company had $58.0 million in repurchase agreements outstanding at March 31, 2010 and December 31, 2009. These repurchase agreements were secured by investment securities with an amortized cost of $71.7 million and $67.3 million at March 31, 2010 and December 31, 2009, respectively.

NOTE 7 — Employee Benefit Plans

The Company has a noncontributory defined benefit pension plan (the “Pension Plan”) that provides for benefits to be paid to eligible employees at retirement based primarily upon years of service with the Company and compensation levels at retirement. Effective December 31, 2006, the Company froze benefits under the Pension Plan, so that no further benefits would be earned by employees after that date. In addition, no new participants may be added to the Pension Plan after December 31, 2006.

12

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

The net periodic pension cost for the three months ended March 31, 2010 and 2009 includes the following components:

	Three Months Ended
	March 31,
	2010			2009
	(In thousands)
Interest cost on projected benefit obligation	$	60		$	69
Expected return on assets		(48	)		(56	)
Amortization of net loss		19			25
Net periodic pension cost	$	31		$	38

NOTE 8 — Earnings Per Share

Basic earnings per share are computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. The Company has no dilutive potential common shares for the three-month period ended March 31, 2010. Because the mutual to stock conversion was not completed until January 20, 2010, per share earnings data is not presented for the three-month period ended March 31, 2009.

	Three Months Ended
	March 31, 2010
	(Dollars in thousands,
	except per share data)
Basic and diluted
Earnings:
Net income(1)	$	366
Shares(1):
Weighted average common shares outstanding		11,902,500
Less: Average unallocated ESOP shares		(952,200	)
Average shares		10,950,300
Net income per common share, basic and diluted(1)	$	0.03

(1) Calculated from the effective date of January 20, 2010 to the period end.

13

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

NOTE 9 — Fair Value Measurements

ASC 820, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

• Level 1 Inputs— Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 Inputs— Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

• Level 3 Inputs— Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the fair value hierarchy, is set forth below.

Securities available for sale include U. S. government sponsored mortgage-backed securities, U. S. government sponsored collateralized mortgage obligations, private-label collateralized mortgage obligations (residential), trust preferred securities, municipal obligations, agency securities, and other equity securities. Securities available for sale are valued at fair value on a recurring basis. The fair values of securities available for sale is determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). U. S. government sponsored mortgage-backed securities, U. S. government sponsored collateralized mortgage obligations, private-label collateralized mortgage obligations (residential), municipal obligations, agency securities, and other equity securities are categorized as Level 2. Trust preferred securities which are issued by financial institutions and insurance companies are categorized as Level 3. The decline in the level of observable inputs and market activity in this class of investments by the measurement date has been significant and resulted in unreliable external pricing. Broker pricing and bid/ask spreads, when available, vary widely. There are currently very few market participants who are willing and/or able to transact for these securities.

In accordance with ASC 820, certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial assets or liabilities required to be measured at fair value on a nonrecurring basis include impaired loans, mortgage servicing rights and other real estate owned.

Impaired loans (loans which are not expected to repay all principal and interest amounts due in accordance with the original contractual terms) are measured at an observable market price (if available) or at the fair value of the loan’s collateral (if collateral dependent). Fair value of the loan’s collateral is determined by appraisals or independent valuation which is then adjusted for the estimated costs related to liquidation of the collateral. Management’s ongoing review of appraisal information may result in additional discounts or adjustments to valuation based upon more recent market sales activity or more current appraisal information derived from properties of similar type and/or locale. A significant portion of the Company’s impaired loans are measured using the estimated fair market value of the collateral less the estimated costs to sell. Therefore, the Company has categorized its impaired loans as Level 3.

14

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

Mortgage servicing rights are carried at the lower of cost or estimated fair value. The estimated fair values of mortgage servicing rights are obtained through independent third-party valuations through an analysis of cash flows, incorporating estimates of assumptions market participants would use in determining fair value, including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market-driven data, including the market’s perception of future interest rate movements and, as such, are classified as Level 3.

Other real estate owned is carried at the lower of cost or fair value less estimated selling costs. Fair value is estimated through current appraisals, real estate brokers or listing prices. As these properties are actively marketed, estimated fair values may be adjusted by management to reflect current economic and market conditions and, as such, are classified as Level 3.

Assets and liabilities measured at fair value on a recurring and nonrecurring basis are summarized below:

	Fair Value Measurements at March 31, 2010, Using						Total Fair Value at
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		March 31, 2010
	(In thousands)
Measured on a recurring basis:
Assets:
U. S. government sponsored mortgage-backed securities	$	—	$	143,122	$	—	$	143,122
U. S. government sponsored collateralized mortgage obligations		—		105,483		—		105,483
Private-label collateralized mortgage obligations (residential)		—		4,697		—		4,697
Trust preferred securities		—		—		5,511		5,511
Municipal obligations		—		4,495		—		4,495
Agency securities		—		35,904		—		35,904
Other equity securities		—		5,075		—		5,075
Measured on a nonrecurring basis:
Assets:
Impaired loans	$	—	$	—	$	5,115	$	5,115
Mortgage servicing rights		—		—		1,245		1,245
Other real estate owned		—		—		6,726		6,726

15

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

	Fair Value Measurements at December 31, 2009, Using						Total Fair Value at
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		December 31, 2009
	(In thousands)
Measured on a recurring basis:
Assets:
U. S. government sponsored mortgage-backed securities	$	—	$	134,967	$	—	$	134,967
U. S. government sponsored collateralized mortgage obligations		—		55,148		—		55,148
Private-label collateralized mortgage obligations (residential)		—		5,075		—		5,075
Trust preferred securities		—		—		5,604		5,604
Municipal obligations		—		4,595		—		4,595
Other equity securities		—		5,032		—		5,032
Measured on a nonrecurring basis:
Assets:
Impaired loans	$	—	$	—	$	5,874	$	5,874
Mortgage servicing rights		—		—		1,168		1,168
Other real estate owned		—		—		6,762		6,762

The table below presents a reconciliation and income statement classification of gains and losses for trust preferred securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2010:

	Securities
	available for sale
	(In thousands)
Beginning balance, January 1, 2010	$	5,604
Total gains or losses (realized / unrealized)		—
Included in earnings:
Interest income on securities		12
Included in other comprehensive income		(87	)
Settlements		(18	)
Transfers into Level 3		—
Ending balance, March 31, 2010	$	5,511

No changes in unrealized gains or losses were recorded through earnings for the three months ended March 31, 2010 or the year ended December 31, 2009 for the assets measured using significant unobservable inputs (Level 3 Inputs).

16

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

ASC 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The methodologies for the other financial assets and financial liabilities are discussed below:

Cash and cash equivalents:The carrying amounts for cash and cash equivalents approximate fair values.

Accrued interest receivable and payable:The carrying amounts for accrued interest receivable and payable approximate fair values.

Other investments:The carrying amount for other investments, which consist primarily of Federal Home Loan Bank stock, approximates fair values.

Loans:The estimated fair value for all fixed rate loans is determined by discounting the estimated cash flows using the current rate at which similar loans would be made to borrowers with similar credit ratings and maturities. The estimated fair value for variable rate loans is the carrying amount. The impact of delinquent loans on the estimation of the fair values described above is not considered to have a material effect and, accordingly, delinquent loans have been disregarded in the valuation methodologies employed.

Deposits:The estimated fair value of demand deposit accounts is the carrying amount. The fair value of fixed-maturity certificates is estimated by discounting the estimated cash flows using the current rate at which similar certificates would be issued.

Borrowed Funds:The estimated fair value for borrowed funds is determined by discounting the estimated cash flows using the current rate at which similar borrowings would be made with similar ratings and maturities.

Off-balance sheet financial instruments:The fair values for the Company’s off-balance sheet commitments are estimated based on fees charged to others to enter into similar agreements taking into account the remaining terms of the agreements and credit standing of the members. The estimated fair value of these commitments is not significant.

17

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

The carrying amount and estimated fair value of the Company’s financial instruments at March 31, 2010 and December 31, 2009 were summarized as follows:

	March 31, 2010				December 31, 2009
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(In thousands)
Financial assets:
Cash and cash equivalents	$	25,406	$	25,406	$	140,144	$	140,144
Securities available for sale		304,287		304,287		210,421		210,421
Other investments		3,855		3,855		3,850		3,850
Loans held for sale		1,087		1,087		241		241
Loans, net		683,499		694,678		698,127		707,198
Mortgage servicing rights		1,245		1,245		1,168		1,168
Accrued interest receivable		3,729		3,729		3,523		3,523
Financial liabilities:
Deposits	$	775,222	$	778,628	$	909,966	$	913,903
Federal Home Loan Bank advances		56,000		57,596		66,400		68,182
Other secured borrowings		58,000		61,858		58,000		62,037
Accrued interest payable		876		876		852		852
Off-balance sheet financial instruments:
Loan commitments	$	—	$	—	$	—	$	—
Letters of credit		—		—		—		—

18

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may” and words of similar meaning. These forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;

• statements regarding our business plans, prospects, growth and operating strategies;

• statements regarding the asset quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this Quarterly Report.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

• general economic conditions, either nationally or in our market areas, that are worse than expected;

• competition among depository and other financial institutions;

• inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;

• adverse changes in the securities markets;

• changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

• our ability to enter new markets successfully and capitalize on growth opportunities;

• our ability to successfully integrate acquired entities, if any;

• changes in consumer spending, borrowing and savings habits;

• changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;

• changes in our organization, compensation and benefit plans;

• changes in our financial condition or results of operations that reduce capital available to pay dividends; and

• changes in the financial condition or future prospects of issuers of securities that we own.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

19

General

OmniAmerican Bancorp, Inc. is the Maryland corporation that owns all of the outstanding shares of common stock of OmniAmerican Bank following the January 20, 2010 completion of the mutual-to-stock conversion of OmniAmerican Bank and initial public stock offering of OmniAmerican Bancorp, Inc. OmniAmerican Bancorp, Inc. has no significant assets other than all of the outstanding shares of common stock of OmniAmerican Bank and the net proceeds that it retained in connection with the offering.

OmniAmerican Bank was originally chartered in 1956 as a federal credit union serving the active and retired military personnel of Carswell Air Force Base. The Bank converted from a Texas credit union charter to a federal mutual savings bank charter on January 1, 2006. The objective of the charter conversion was to convert to a banking charter in order to carry out our business strategy of broadening our banking services into residential real estate and commercial lending and selling loans and servicing loans for others, which has allowed the Bank to better serve the needs of its customers and the local community.

Our principal business consists primarily of accepting deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in mortgage loans secured by residential real estate, consumer loans, consisting primarily of indirect automobile loans (automobile loans referred to us by automobile dealerships), and to a lesser extent, commercial real estate, real estate construction, commercial business loans and direct automobile loans. Since we completed our conversion from a credit union to a savings bank, we have increased our residential real estate, real estate construction, commercial real estate and commercial business lending while deemphasizing our consumer lending activities. Loans are originated from our main office in Fort Worth, Texas, and from our branch network in the Dallas-Fort Worth Metroplex and surrounding communities in North Texas. We retain in our portfolio all adjustable-rate loans that we originate, as well as fixed-rate one- to four-family residential mortgage loans with terms of 15 years or less. We currently sell most of the long-term, fixed-rate one- to four-family residential mortgage loans (terms greater than 15 years) that we originate either to Fannie Mae on a servicing-retained basis or into the secondary mortgage market on a servicing-released basis, in order to generate fee income and for interest rate risk management purposes.

In addition to loans, we invest in a variety of investments, primarily government sponsored mortgage-backed securities, and to a lesser extent, government sponsored collateralized mortgage obligations, municipal obligations, agency bonds and equity securities. We have in the past invested in trust preferred securities issued by third parties and private-label collateralized mortgage obligations, but this is not an integral part of our investment portfolio. At March 31, 2010, our investment securities portfolio had an amortized cost of $301.3 million.

We attract retail deposits from the general public in the areas surrounding our main office and our branch offices. We offer a variety of deposit accounts, including noninterest-bearing and interest-bearing demand accounts, savings accounts, money market accounts and certificates of deposit.

20

Our revenues are derived primarily from interest on loans, mortgage-backed securities and other investment securities. We also generate revenues from fees and service charges. Our primary sources of funds are deposits, principal and interest payments on securities and loans, and borrowings.

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in OmniAmerican Bancorp, Inc.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 24, 2010.

Comparison of Financial Condition at March 31, 2010 and December 31, 2009

Assets.Total assets decreased $38.5 million, or 3.4%, to $1.10 billion at March 31, 2010 from $1.13 billion at December 31, 2009. The decrease was primarily the result of decreases in cash and cash equivalents of $114.7 million and loans, net of the allowance for loan losses and deferred fees and discounts of $14.6 million, partially offset by an increase in securities classified as available for sale of $93.9 million.

Cash and Cash Equivalents.Total cash and cash equivalents decreased $114.7 million, or 81.9%, to $25.4 million at March 31, 2010 from $140.1 million at December 31, 2009 primarily due to $113.4 million in cash used to purchase securities classified as available for sale, $48.3 million used to originate and purchase loans, and $10.4 million used to repay Federal Home Loan Bank advances during the three months ended March 31, 2010. These cash decreases were partially offset by $19.1 million of proceeds from sales, principal repayments and maturities of securities, $18.4 million in cash received from loan principal repayments and $14.8 million of proceeds from the sales of longer term (greater than 15 years) one- to four-family residential mortgage loans during the three months ended March 31, 2010.

Loans.Loans, net of the allowance for loan losses and deferred fees and discounts, decreased $14.6 million, or 2.1%, to $683.5 million at March 31, 2010 from $698.1 million at December 31, 2009. Automobile loans (consisting of direct and indirect loans) decreased $12.0 million, or 5.8%, to $193.5 million at March 31, 2010. Commercial real estate loans decreased $1.9 million, or 1.9%, to $99.1 million. Commercial business loans decreased $1.1 million, or 1.8%, to $58.2 million at March 31, 2010. One- to four-family residential mortgage loans increased $1.9 million, or 0.7%, to $259.2 million at March 31, 2010 from $257.3 million at December 31, 2009 as $26.2 million in originations and purchases of one- to four-family residential mortgage loans were offset by sales of $14.5 million, repayments of $10.3 million and a $478,000 reclassification to other real estate owned.

Securities.Securities classified as available for sale increased $93.9 million, or 44.6%, to $304.3 million at March 31, 2010 from $210.4 million at December 31, 2009. The increase in these securities during the three months ended March 31, 2010 is attributable to purchases of $56.9 million of government-sponsored collateralized mortgage obligations, $36.0 million in agency investments and $20.4 million of government-sponsored mortgage backed securities, as we invested the proceeds of the initial public stock offering in interest-earning assets. The increase in securities due to purchases was partially offset by principal repayments, maturities and calls of $17.4 million and sales of $1.7 million.

Deposits.Deposits decreased $134.7 million, or 14.8%, to $775.2 million at March 31, 2010 from $910.0 million at December 31, 2009. Our core deposits (consisting of interest-bearing and non-interest-bearing demand accounts, money market accounts and savings accounts) decreased $135.5 million, or 23.5%, to $440.7 million at March 31, 2010 from $576.2 million at December 31, 2009. The core deposit balance at December 31, 2009 included $159.5 million in subscriptions for the purchase of shares of common stock in our stock offering, which was completed on January 20, 2010. Certificates of deposit increased $687,000, or 0.2%, to $334.5 million at March 31, 2010 from $333.8 million at December 31, 2009.

21

Borrowings.Federal Home Loan Bank borrowings decreased $10.4 million, or 15.7%, to $56.0 million at March 31, 2010 from $66.4 million at December 31, 2009. The decrease was the result of scheduled maturities during the three months ended March 31, 2010 and was funded with available liquidity. Securities sold under agreements to repurchase were unchanged at $58.0 million at March 31, 2010 and at December 31, 2009.

Equity.At March 31, 2010, our equity was $197.6 million, an increase of $106.4 million, or 116.7%, from $91.2 million at December 31, 2009. The increase resulted from the receipt of net proceeds totaling $106.0 million following the completion of our initial public stock offering on January 20, 2010, as well as net income of $533,000 for the three months ended March 31, 2010.

Comparison of Operating Results for the Three Months Ended March 31, 2010 and 2009

General. Net income increased $370,000, or 227.0%, to $533,000 for the three months ended March 31, 2010 from $163,000 for the prior year period. The increase in net income for the three months ended March 31, 2010 reflected an increase in net interest income of $1.7 million and a decrease in the provision for loan losses of $700,000, partially offset by decreases in noninterest income of $1.2 million, and increases in noninterest expense of $787,000 and income tax expense of $49,000.

Interest Income. Interest income decreased $755,000, or 5.4%, to $13.2 million for the three months ended March 31, 2010 from $13.9 million for the three months ended March 31, 2009. The decrease resulted from a decrease of 40 basis points in our average yield on interest-earning assets to 5.22% for the three months ended March 31, 2010 from 5.62% for the three months ended March 31, 2009. The decrease in our average yield on interest-earning assets during the three months ended March 31, 2010 as compared to the prior year period was due to the general decline in short-term market interest rates. Partially offsetting the decrease in the average yield on interest-earning assets was a $19.2 million, or 1.9%, increase in the average balance of interest-earning assets to $1.01 billion for the three months ended March 31, 2010 from $990.1 million for the three months ended March 31, 2009.

Interest income on loans decreased $599,000, or 5.3%, to $10.6 million for the three months ended March 31, 2010 from $11.2 million for the three months ended March 31, 2009. The decrease resulted primarily from a decrease in the average balance of loans of $35.9 million, or 4.9%, to $695.0 million for the three months ended March 31, 2010 from $730.9 million for the three months ended March 31, 2009. In addition, the average yield on our loan portfolio decreased by two basis points to 6.13% for the three months ended March 31, 2010 from 6.15% for the three months ended March 31, 2009.

Interest income on investment securities decreased $156,000, or 5.8%, to $2.5 million for the three months ended March 31, 2010 from $2.7 million for the three months ended March 31, 2009. The decrease resulted primarily from a decrease in the average yield on our securities portfolio (excluding nontaxable investment securities) of 106 basis points to 3.79% for the three months ended March 31, 2010 from 4.85% for the three months ended March 31, 2009. Partially offsetting the decrease in the average yield on our securities portfolio was a $46.7 million, or 21.5%, increase in the average balance of our securities portfolio to $264.4 million for the three months ended March 31, 2010 from $217.7 million for the three months ended March 31, 2009, due to increased purchases of securities, primarily U.S. government sponsored collateralized mortgage obligations. The increase in the average balance of securities reflects the investment of a portion of the net proceeds from our offering of $106.0 million.

Interest Expense.Interest expense decreased by $2.4 million, or 40.7%, to $3.5 million for the three months ended March 31, 2010 from $5.9 million for the three months ended March 31, 2009. The decrease resulted primarily from decreases in interest expense on deposits of $1.3 million and interest expense on borrowed funds of $1.1 million. The average rate we paid on deposits decreased 80 basis points to 1.39% for the three months ended March 31, 2010 from 2.19% for the three months ended March 31, 2009. Partially offsetting the decrease in interest expense was an increase in the average balance of interest-bearing deposits of $13.4 million, or 2.0%, to $694.1 million for the three months ended March 31, 2010 from $680.7 million for the three months ended March 31, 2009. The increase in the average balance of our deposits was primarily due to a $30.4 million increase in the average balance of our core deposits (consisting of demand accounts, money market accounts and savings accounts), partially offset by a $17.0 million decrease in the average balance of our certificates of deposit.

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Interest expense on certificates of deposit decreased $1.2 million, or 40.0%, to $1.8 million for the three months ended March 31, 2010 from $3.0 million for the three months ended March 31, 2009. The average rate paid on certificates of deposit decreased 123 basis points to 2.19% for the three months ended March 31, 2010 from 3.42% for the three months ended March 31, 2009, reflecting lower market interest rates. In addition, the average balance of certificates of deposit decreased by $17.0 million, to $330.3 million for the three months ended March 31, 2010 from $347.3 million for the three months ended March 31, 2009. The interest expense on our core deposits decreased $152,000, or 20.2%, to $602,000 for the three months ended March 31, 2010 from $754,000 for the prior year period, primarily due to a 24 basis point decrease in the average rate paid on core deposits, partially offset by a $30.4 million increase in the average balance of core deposits.

Interest expense on borrowed funds decreased by $1.1 million, or 50.0%, to $1.1 million for the three months ended March 31, 2010 from $2.2 million for the prior year period primarily due to a $100.3 million decrease in the average balance of Federal Home Loan Bank borrowings to $58.6 million for the three months ended March 31, 2010 from $158.9 million for the three months ended March 31, 2009. In addition, the average rate paid on borrowed funds decreased 40 basis points to 3.62% for the three months ended March 31, 2010 from 4.02% for the three months ended March 31, 2009.

Net Interest Income. Net interest income increased by $1.7 million, or 21.3%, to $9.7 million for the three months ended March 31, 2010 from $8.0 million for the prior year period, resulting from a 52 basis point improvement in our interest rate spread to 3.51% for the three months ended March 31, 2010 from 2.99% for the three months ended March 31, 2009. Our net interest margin increased 61 basis points to 3.84% for the three months ended March 31, 2010 from 3.23% for the three months ended March 31, 2009. The increase in our interest rate spread and net interest margin reflected the steepening yield curve as short-term market interest rates used to price our deposits have continued to decline in 2010.

Provision for Loan Losses.We recorded a provision for loan losses of $800,000 for the three months ended March 31, 2010 compared to a provision for loan losses of $1.5 million for the three months ended March 31, 2009, primarily due to a $586,000 decrease in net charge-offs to $433,000 for the three months ended March 31, 2010 from $1.0 million for the three months ended March 31, 2009. Net charge-offs decreased to 0.25% of average loans outstanding for the three months ended March 31, 2010 from 0.55% for the three months ended March 31, 2009. Substandard loans increased $4.9 million, or 19.2%, to $30.4 million at March 31, 2010 from $25.5 million at March 31, 2009. At March 31, 2010, we identified 69 impaired loans with balances totaling $21.4 million. Seven of these impaired loans with balances totaling $6.6 million had specific allowance for loan losses totaling $1.5 million. At March 31, 2009, 20 loans with balances totaling $4.7 million were considered to be impaired. One of the impaired loans at March 31, 2009 with a balance of $2.3 million had a specific allowance for loan losses of $836,000. In addition, two loans with balances totaling $478,000 were reclassified to other real estate owned during the three months ended March 31, 2010. The allowance for loan losses to total loans receivable increased to 1.25% at March 31, 2010 from 1.19% at March 31, 2009.

Non-performing loans include loans on non-accrual status or loans delinquent 90 days or greater and still accruing interest. None of our loans were delinquent 90 days or greater and still accruing interest at either March 31, 2010 or March 31, 2009. At March 31, 2010, non-performing loans totaled $9.0 million, or 1.31% of total loans, compared to $2.5 million, or 0.34% of total loans, at March 31, 2009. The allowance for loan losses as a percentage of non-performing loans decreased to 96.09% at March 31, 2010 from 348.78% at March 31, 2009. To the best of our knowledge, we have provided for all losses that are both probable and reasonable to estimate at March 31, 2010 and 2009.

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Noninterest Income. Noninterest income decreased $1.2 million, or 27.3%, to $3.2 million for the three months ended March 31, 2010 from $4.4 million for the three months ended March 31, 2009. The decrease was primarily attributable to a $708,000 decrease in net gains on the sale of securities available for sale, consisting of mortgage-backed securities, and a $263,000 decrease in net gains on the sale of loans, consisting of one- to four-family residential mortgage loans.

Noninterest Expense. Noninterest expense increased $787,000, or 7.5%, to $11.3 million for the three months ended March 31, 2010 from $10.6 million for the three months ended March 31, 2009. The increase was primarily attributable to a $355,000 increase in salaries and benefits expense, a $179,000 increase in the FDIC insurance assessment, a $157,000 increase in software and equipment maintenance expense, and a $134,000 increase in marketing expense, partially offset by a $183,000 decrease in depreciation expense on furniture, software and equipment. The increase in salaries and benefits was due primarily to annual wage adjustments effective January 1, 2010, an increase in incentives expense related to a new incentive plan that includes a larger employee base with higher percentages and severance expenses related to the termination of certain employees. The increase in the FDIC insurance assessment for the three months ended March 31, 2010 compared to the three months ended March 31, 2009 was primarily attributable to increases in the general assessment rate and deposits upon which the assessment is based. The increase in software and equipment maintenance expense related primarily to expenditures incurred to enhance the performance and security of our information systems. The increase in marketing expense was due primarily to a new debit card rewards program offered to customers. The decrease in depreciation expense on furniture, software and equipment for the three months ended March 31, 2010 compared to the three months ended March 31, 2009 was primarily attributable to assets fully depreciated at December 31, 2009.

Income Tax Expense. Income tax expense was $239,000 for the three months ended March 31, 2010 compared to $190,000 for the same period in 2009, reflecting the increase in income before income tax expense during the three months ended March 31, 2010 as compared to the same period in 2009. Our effective tax rate, including provisions for the Texas state margin tax was 31.0% for the three months ended March 31, 2010 compared to 53.8% for the three months ended March 31, 2009. The decrease in the effective tax rate is attributable to a change in the application of the Texas margin tax law as it relates to the calculation of in-state taxable margin.

Analysis of Net Interest Income — Three Months Ended March 31, 2010 and 2009

Net interest income, the primary contributor to earnings, represents the difference between income on interest-earning assets and expenses on interest-bearing liabilities. Net interest income depends upon the volume of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them.

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Average Balances and Yields

The following table sets forth average balance sheets, average yields and costs, and certain other information at or for the periods indicated. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

	For the Three Months Ended March 31,
	2010								2009
	Average								Average
	Outstanding					Yield/			Outstanding					Yield/
	Balance			Interest		Rate(1)			Balance			Interest		Rate(1)
	(Dollars in thousands)
Interest-earning assets:
Loans	$	694,974		$	10,642		6.13	%	$	730,892		$	11,241		6.15	%
Taxable investment securities available for sale		259,844			2,461		3.79			212,448			2,577		4.85
Nontaxable investment securities available for sale		4,542			13		1.14	(5)		5,290			52		3.93	(5)
Cash and cash equivalents		46,039			32		0.28			33,763			11		0.13
Other		3,850			12		1.25			7,682			34		1.77
Total interest-earning assets		1,009,249			13,160		5.22			990,075			13,915		5.62
Noninterest-earning assets		87,929								76,835
Total assets	$	1,097,178							$	1,066,910
Interest-bearing liabilities:
Interest-bearing demand	$	70,868		$	87		0.49	%	$	62,589		$	72		0.46	%
Savings accounts		201,897			294		0.58			189,974			401		0.84
Money market accounts		91,048			221		0.97			80,867			281		1.39
Certificates of deposit		330,288			1,811		2.19			347,255			2,973		3.42
Total interest-bearing deposits		694,101			2,413		1.39			680,685			3,727		2.19
Federal Home Loan Bank advances		58,618			538		3.67			158,855			1,687		4.25
Other secured borrowings		58,000			518		3.57			58,149			495		3.41
Total interest-bearing liabilities		810,719			3,469		1.71			897,719			5,909		2.63
Noninterest-bearing liabilities(6)		123,319								78,953
Total liabilities		934,038								976,672
Equity		163,140								90,238
Total liabilities and equity	$	1,097,178							$	1,066,910
Net interest income				$	9,691							$	8,006
Interest rate spread(2)							3.51	%							2.99	%
Net interest-earning assets(3)	$	198,530							$	92,356
Net interest margin(4)							3.84	%							3.23	%
Average interest-earning assets to interest-bearing liabilities		124.49	%							110.29	%

(1)	Annualized.
(2)	Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(3)	Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4)	Net interest margin represents net interest income divided by average total interest-earning assets.
(5)	The tax equivalent yield of nontaxable investment securities was 1.73%, and 5.95% for the three months ended March 31, 2010 and 2009, respectively, assuming a marginal tax rate of 34%.
(6)	Includes noninterest-bearing deposits.

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Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the years indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by later volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the changes due to volume.

	Three Months Ended March 31,
	2010 vs. 2009
	Increase (Decrease)						Total
	Due to						Increase
	Volume			Rate			(Decrease)
	(In thousands)
Interest-earning assets:
Loans	$	(552	)	$	(47	)	$	(599	)
Taxable investment securities available for sale		575			(691	)		(116	)
Nontaxable investment securities available for sale		(7	)		(32	)		(39	)
Cash and cash equivalents		4			17			21
Other		(17	)		(5	)		(22	)
Total interest-earning assets	$	3		$	(758	)	$	(755	)
Interest-bearing liabilities:
Interest-bearing demand	$	10		$	5		$	15
Savings accounts		25			(132	)		(107	)
Money market accounts		35			(95	)		(60	)
Certificates of deposit		(145	)		(1,017	)		(1,162	)
Total interest-bearing deposits		(75	)		(1,239	)		(1,314	)
Federal Home Loan Bank advances		(1,065	)		(84	)		(1,149	)
Other secured borrowings		(1	)		24			23
Total interest-bearing liabilities	$	(1,141	)	$	(1,299	)	$	(2,440	)
Change in net interest income	$	1,144		$	541		$	1,685

Liquidity and Capital Resources

Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments, advances from the Federal Home Loan Bank of Dallas, and maturities and sales of available-for-sale securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. We monitor our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies.

We regularly monitor and adjust our investments in liquid assets based upon our assessment of:

(i)	expected loan demand;
(ii)	expected deposit flows and borrowing maturities;
(iii)	yields available on interest-earning deposits and securities; and
(iv)	the objectives of our asset/liability management program.

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Excess liquid assets are invested generally in interest-earning deposits and short- and intermediate-term securities.

Our most liquid assets are cash and cash equivalents. The levels of these assets are affected by our operating, financing, lending and investing activities during any given period. At March 31, 2010, cash and cash equivalents totaled $25.4 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $304.3 million at March 31, 2010. On that date, we had $56.0 million in Federal Home Loan Bank advances outstanding, with the ability to borrow an additional $371.3 million.

Our cash flows are derived from operating activities, investing activities and financing activities as reported in our Consolidated Statements of Cash Flows included in our consolidated financial statements.

At March 31, 2010, we had $26.0 million in commitments to extend credit. In addition to commitments to originate loans, we had $21.7 million in unused lines of credit to borrowers. Certificates of deposit due within one year of March 31, 2010 totaled $245.4 million, or 31.7% of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including loan sales and Federal Home Loan Bank advances. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before March 31, 2011. We believe, however, based on past experience, that a significant portion of such deposits will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

Generally, our primary investing activity is originating loans. During the three months ended March 31, 2010, we originated $48.2 million of loans. We purchased $113.4 million of securities during the three months ended March 31, 2010, as the proceeds from our initial public stock offering were invested in interest-earning assets upon the completion of the offering in January 2010.

Financing activities consist primarily of activity in deposit accounts and Federal Home Loan Bank advances. Total deposits decreased $134.7 million for the three months ended March 31, 2010, primarily due to the effects of the initial public stock offering. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors, and by other factors.

Liquidity management is both a daily and long-term function of business management. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of Dallas, which provides an additional source of funds. Federal Home Loan Bank advances decreased by $10.4 million for the three months ended March 31, 2010. Federal Home Loan Bank advances have primarily been used to fund loan demand and to purchase investment securities. At March 31, 2010, we had the ability to borrow up to $427.3 million from the Federal Home Loan Bank of Dallas. In addition, we maintained $27.5 million in federal funds lines with other financial institutions at March 31, 2010. We also have a line of credit with the Federal Reserve Bank of Dallas which allows us to borrow on a collateralized basis at a fixed term with pledged assignments. At March 31, 2010, the borrowing limit for this line of credit was $185.3 million.

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OmniAmerican Bank is subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At March 31, 2010, OmniAmerican Bank exceeded all regulatory capital requirements. OmniAmerican Bank is considered “well capitalized” under regulatory guidelines. The table below presents the capital required as a percentage of total and risk-weighted assets and the percentage and the total amount of capital maintained at March 31, 2010 and December 31, 2009.

											Minimum
											To Be Well
						Minimum					Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2010
Total risk-based capital to risk-weighted assets	$	168,119		23.23	%	$	57,907		8.00	%	$	72,384		10.00	%
Tier I risk-based capital to risk-weighted assets		160,934		22.23	%		28,954		4.00	%		43,430		6.00	%
Tier I (Core) capital to adjusted total assets		160,934		14.77	%		43,578		4.00	%		54,472		5.00	%
As of December 31, 2009
Total risk-based capital to risk-weighted assets	$	90,372		12.03	%	$	60,097		8.00	%	$	75,122		10.00	%
Tier I risk-based capital to risk-weighted assets		82,731		11.01	%		30,049		4.00	%		45,073		6.00	%
Tier I (Core) capital to adjusted total assets		82,731		7.35	%		45,022		4.00	%		56,277		5.00	%

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make.

Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities. There have not been any material changes in contractual obligations or funding needs since December 31, 2009.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General.Because the majority of our assets and liabilities are sensitive to changes in interest rates, our most significant form of market risk is interest rate risk. We are vulnerable to an increase in interest rates to the extent that our interest-bearing liabilities mature or reprice more quickly than our interest-earning assets. As a result, a principal part of our business strategy is to manage interest rate risk and limit the exposure of our net interest income to changes in market interest rates. Accordingly, our board of directors has established an Asset/Liability Management Committee, which is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the board of directors.

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We have sought to manage our interest rate risk in order to control the exposure of our earnings and capital to changes in interest rates. As part of our ongoing asset-liability management, we currently use the following strategies to manage our interest rate risk:

(i) sell the long-term, fixed-rate one- to four-family residential mortgage loans (terms greater than 15 years) that we originate into the secondary mortgage market;

(ii) lengthen the weighted average maturity of our liabilities through retail deposit pricing strategies and through longer-term wholesale funding sources such as fixed-rate advances from the Federal Home Loan Bank of Dallas;

(iii) invest in shorter- to medium-term securities;

(iv) originate commercial business and consumer loans, which tend to have shorter terms and higher interest rates than residential mortgage loans, and which generate customer relationships that can result in larger noninterest-bearing demand deposit accounts; and

(v) maintain adequate levels of capital.

We have not engaged in hedging through the use of derivatives.

Net Portfolio Value.The Office of Thrift Supervision requires the computation of amounts by which the net present value of an institution’s cash flow from assets, liabilities and off-balance sheet items (the institution’s net portfolio value or “NPV”) would change in the event of a range of assumed changes in market interest rates. The Office of Thrift Supervision provides all institutions that file a Consolidated Maturity/Rate Schedule as a part of their quarterly Thrift Financial Report with an interest rate sensitivity report of net portfolio value. The Office of Thrift Supervision simulation model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. Historically, the Office of Thrift Supervision model estimated the economic value of each type of asset, liability and off-balance sheet contract under the assumption that the United States Treasury yield curve increases or decreases instantaneously by 100 to 300 basis points in 100 basis point increments. However, given the current relatively low level of market interest rates, an NPV calculation for an interest rate decrease of greater than 100 basis points has not been prepared. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below. The Office of Thrift Supervision provides us the results of the interest rate sensitivity model, which is based on information we provide to the Office of Thrift Supervision to estimate the sensitivity of our net portfolio value.

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The table below sets forth, as of December 31, 2009 (the most recent date available), the Office of Thrift Supervision’s calculation of the estimated changes in our net portfolio value that would result from the designated immediate changes in the United States Treasury yield curve.

At December 31, 2009
									NPV as a Percentage of
									Present Value of Assets(3)
Change in												Increase
Interest Rates	Estimated		Estimated (Decrease) in NPV									(Decrease)
(basis points)(1)	NPV(2)		Amount			Percent			NPV Ratio(4)			(basis points)
	(Dollars in thousands)
+300	$	119,525	$	(17,256	)		(12.61	)%		10.53	%		(107	)
+200		127,930		(8,851	)		(6.47	)%		11.11	%		(49	)
+100		133,957		(2,824	)		(2.06	)%		11.48	%		(12	)
0		136,781		—			—			11.60	%		—
-100		135,457		(1,324	)		(0.97	)%		11.41	%		(19	)

(1)	Assumes an instantaneous uniform change in interest rates at all maturities.
(2)	NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.
(3)	Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.
(4)	NPV Ratio represents NPV divided by the present value of assets.

Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results. The Office of Thrift Supervision model illustrates the change in the economic value of our assets and liabilities at December 31, 2009 assuming an immediate change in interest rates. The table above indicates that at December 31, 2009, under the Office of Thrift Supervision model, in the event of a 200 basis point increase in interest rates, we would experience a 6.47% decrease in net portfolio value. In the event of a 100 basis point decrease in interest rates, we would experience a 0.97% decrease in net portfolio value.

In addition to the Office of Thrift Supervision’s calculations with respect to the effects of changes in interest rates on net portfolio value, we prepare our own internal calculations of the estimated changes in our net portfolio value that would result from the designated immediate changes in the United States Treasury yield curve. We also analyze our sensitivity to changes in interest rates through our net interest income model. The model assumes loan prepayment rates, reinvestment rates and deposit decay rates based on historical experience and current economic conditions.

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The following table presents our internal calculations of the estimated changes in our net portfolio value and net interest income that would result from the designated instantaneous changes in the interest rate yield curve as of March 31, 2010:

At March 31, 2010
									NPV as a Percentage of Present Value of Assets(3)						Net Interest Income
																	Increase (Decrease) in
Change in												Increase			Estimated		Estimated Net Interest
Interest Rates	Estimated		Estimated (Decrease) in NPV									(Decrease)			Net Interest		Income
(basis points)(1)	NPV(2)		Amount			Percent			NPV Ratio(4)			(basis points)			Income		Amount			Percent
	(Dollars in thousands)
+300	$	179,482	$	(55,429	)		(23.60	)%		17.26	%		(386	)	$	39,751	$	(2,686	)		(6.33	)%
+200		201,025		(33,886	)		(14.43	)%		18.84	%		(228	)		41,545		(897	)		(2.10	)%
+100		221,928		(12,983	)		(5.53	)%		20.29	%		(83	)		42,728		291			(0.69	)%
0		234,911		—			—			21.12	%		—			42,437		—			—
-100		239,683		4,772			2.03	%		21.37	%		25			43,141		704			1.66	%

(1)	Assumes an instantaneous uniform change in interest rates at all maturities.
(2)	NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.
(3)	Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.
(4)	NPV Ratio represents NPV divided by the present value of assets.

The table above indicates that at March 31, 2010, in the event of a 200 basis point increase in interest rates, we would experience a 14.43% decrease in net portfolio value. In the event of a 100 basis point decrease in interest rates, we would experience a 2.03% increase in net portfolio value.

Net Interest Income.As of March 31, 2010, using our internal interest rate risk model, we estimated that our net interest income for the three months ended March 31, 2010 would decrease by 2.10% in the event of an instantaneous 200 basis point increase in market interest rates, and would increase by 1.66% in the event of an instantaneous 100 basis point decrease in market interest rates. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. In our model, we estimate what our net interest income would be for a rolling forward twelve-month period using historical data for assumptions such as loan prepayment rates and deposit decay rates, the current term structure for interest rates, and current deposit and loan offering rates. We then calculate what the net interest income would be for the same period in the event of an instantaneous 200 basis point increase or a 100 basis point decrease in market interest rates.

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Certain shortcomings are inherent in the methodologies used in determining interest rate risk through changes in net portfolio value and net interest income. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the net portfolio value and net interest income information presented assume that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assume that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although interest rate risk calculations provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results.

ITEM 4T. CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of the Company’s management, including the President and Chief Executive Officer and the Senior Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2010. Based on that evaluation, the Company’s management, including the President and Chief Executive Officer and the Senior Executive Vice President and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

During the quarter ended March 31, 2010, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company and its subsidiary are subject to various legal actions that are considered ordinary routine litigation incidental to the business of the Company, and no claim for money damages exceeds ten percent of the Company’s consolidated assets. In the opinion of management, based on currently available information, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s results of operations.

ITEM 1A. RISK FACTORS

There are no material changes to the risk factors as previously disclosed in the Company’s Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission on March 24, 2010.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) There were no sales of unregistered equity securities during the period covered by this Report.

(b) On June 23, 2009, the Board of Directors of OmniAmerican Bank adopted a Plan of Conversion (the “Plan”) whereby the Bank would convert from a federally chartered mutual savings bank to a federally chartered stock savings bank. The Plan provided for the formation of a holding company, OmniAmerican Bancorp, Inc., that would sell shares of common stock to the public and would own 100% of the common stock of the Bank. On September 11, 2009, OmniAmerican Bancorp, Inc. filed a Registration Statement on Form S-1 with the Securities and Exchange Commission (File No. 333-161894) with respect to the shares to be offered and sold pursuant to the stock issuance plan. OmniAmerican Bancorp, Inc. registered for offer and sale 11,902,500 shares of common stock, par value $0.01 per share, at a sales price of $10.00 per share. The registration statement was declared effective by the Securities and Exchange Commission on November 12, 2009. In addition, the Plan was approved by the Office of Thrift Supervision on November 12, 2009. The Company’s depositors approved the Plan on January 15, 2010. The shares of common stock were offered to eligible account holders, depositors as of March 31, 2008, of OmniAmerican Bank and tax-qualified employee benefit plans sponsored by the Bank.

The public stock offering closed on January 20, 2010 and the common stock began trading on the NASDAQ Global Market on January 21, 2010 under the symbol “OABC”.

In accordance with the plan of conversion and pursuant to the registration statement, the shares of common stock were offered to eligible depositors of OmniAmerican Bank, OmniAmerican Bank’s employee stock ownership plan and members of the general public. Keefe Bruyette & Woods, Inc. was engaged to assist in the marketing of the common stock. For their services, Keefe, Bruyette & Woods, Inc. received a fee of 1.25% of the aggregate dollar amount of the shares of common stock sold in the subscription offering, excluding shares sold to the employee stock ownership plan, the 401(k) plan and to our officers, employees and directors and members of their immediate family.

The stock offering resulted in gross proceeds of $119.0 million through the sale of 11,902,500 shares at $10.00 per share. Expenses related to the offering were approximately $3.5 million. OmniAmerican Bancorp, Inc. received net proceeds from the initial public offering of $115.5 million and loaned $9.5 million to OmniAmerican Bank’s employee stock ownership plan to enable it to purchase 952,200 shares of common stock in the offering. The remaining net proceeds were $106.0 million, of which $86.6 million was contributed to OmniAmerican Bank in the form of additional paid-in capital and the remainder has been retained by OmniAmerican Bancorp, Inc. to be utilized for general corporate purposes.

(c) There were no issuer repurchases of equity securities during the period covered by this Report.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. RESERVED

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

The exhibits required by Item 601 of Regulation S-K are included with this Form 10-Q and are listed on the “Index to Exhibits” immediately following the Signatures.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	OMNIAMERICAN BANCORP, INC.
	(Registrant)
Date: May 10, 2010	/s/ Tim CarterTim Carter
	President and Chief Executive Officer
Date: May 10, 2010	/s/ Deborah B. WilkinsonDeborah B. Wilkinson
	Senior Executive Vice President and
	Chief Financial Officer

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INDEX TO EXHIBITS

Exhibit
Number		Description
	31.1	Certification of Tim Carter, President and Chief Executive Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
	31.2	Certification of Deborah B. Wilkinson, Senior Executive Vice President and Chief Financial Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
	32	Certification of Tim Carter, President and Chief Executive Officer, and Deborah B. Wilkinson, Senior Executive Vice President and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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