SOUTHSIDE BANCSHARES, INC.
ANNOUNCES NET INCOME FOR THE
THREE AND SIX MONTHS ENDED JUNE 30, 2014
NASDAQ Global Select Market Symbol - “SBSI”
Tyler, Texas, (July 24, 2014) Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ:SBSI) today reported its financial results for the three and six months ended June 30, 2014.
Southside reported net income of $10.5 million for the three months ended June 30, 2014, a decrease of $611,000, or 5.5%, when compared to $11.1 million for the same period in 2013. Net income for the six months ended June 30, 2014 decreased $1.4 million,
or 7.1%, to $18.7 million when compared to $20.1 million for the same period in 2013.
Diluted earnings per common share were $0.55 and $0.59 for the three months ended June 30, 2014 and 2013, respectively, a decrease of $0.04, or 6.8%. For the six months ended June 30, 2014, diluted earnings per common share decreased $0.08, or 7.5% to $0.99 when compared to $1.07 for the same period in 2013.
The return on average shareholders’ equity for the six months ended June 30, 2014, was 13.80%, compared to 15.69% for the same period in 2013. The return on average assets was 1.09% for the six months ended June 30, 2014 compared to 1.24% for the same period in 2013.
“We are very pleased to report our financial results for the quarter and six months ended June 30, 2014,” stated Sam Dawson, President and Chief Executive Officer of Southside Bancshares, Inc. “During the second quarter of 2014, our net interest income increased 12% as our net interest margin improved 28 basis points to 3.94% when compared to the second quarter of 2013. The increase in our net interest income was 20.3% for the first six months of 2014 compared to 2013 as our net interest margin increased 43 basis points. For the quarter and six months ended June 30, 2014, the decrease in net income of $611,000 and $1.4 million, respectively, was due to the reduction in the net gain on sale of available for sale securities of $4.5 million and $8.8 million, respectively. Continued cost containment efforts resulted in a decrease in total noninterest expense for the first half of 2014, which included approximately $680,000 of merger related expenses associated with the pending acquisition of OmniAmerican Bancorp.”
“On April 29, 2014, we announced the signing of a merger agreement with OmniAmerican Bancorp, Inc.. We have filed all of our applications with relevant regulatory authorities and the preliminary joint proxy statement/prospectus included in our registration statement on Form S-4 with the Securities and Exchange Commission. We anticipate closing this transaction sometime during the fourth quarter of 2014, subject to regulatory and shareholder approvals and customary closing conditions.”
“Loan growth continues at a steady pace and we expect to see that pace quicken in the second half of the year. Austin and the Fort Worth/Arlington markets are providing tremendous lending opportunities and our East Texas market is showing signs of growth and increased lending opportunities as well. We look forward to strategically expanding Southside’s franchise in the dynamic greater Fort Worth market area with the closing of the OmniAmerican transaction in late 2014.”
Loans and Deposits
For the six months ended June 30, 2014, total loans increased by $40.0 million, or 3.0%, when compared to December 31, 2013. During the six months ended June 30, 2014, construction loans increased $39.4 million, other real estate loans increased $9.3 million, 1-4 family real estate loans increased $1.2 million, loans to individuals decreased $3.5 million, municipal loans decreased $5.7 million, and commercial loans decreased $762,000.
Nonperforming assets increased during the first six months of 2014 by $929,000, or 6.8%, to $14.5 million, or 0.42% of total assets, when compared to 0.39% at December 31, 2013.
During the six months ended June 30, 2014, deposits, net of brokered deposits, increased $108.6 million, or 4.4%, compared to December 31, 2013, due primarily to a business account that had a temporary increase of approximately $150 million, which has since been withdrawn. During this six-month period, public fund deposits decreased $70.1 million.
Net Interest Income for the Three Months
Net interest income increased $3.0 million, or 12.0%, to $27.9 million for the three months ended June 30, 2014, when compared to $24.9 million for the same period in 2013. For the three months ended June 30, 2014, our net interest spread increased to 3.79% when compared to 3.51% for the same period in 2013. The net interest margin increased to 3.94% for the three months ended June 30, 2014 compared to 3.66% for the same period in 2013. The reason for the increase in the net interest spread and margin was the increase in the yield on the interest earning assets combined with the decrease in the yield on the interest bearing liabilities compared to the same period in 2013.
Net Interest Income for the Six Months
Net interest income increased $9.4 million, or 20.3%, to $55.7 million for the six months ended June 30, 2014, when compared to $46.3 million for the same period in 2013. For the six months ended June 30, 2014, our net interest spread increased to 3.79% from 3.33% for the same period in 2013. The net interest margin increased to 3.93% for the six months ended June 30, 2014, compared to 3.50% for the same period in 2013.
Net Income for the Three Months
Net income decreased $611,000, or 5.5%, for the three months ended June 30, 2014, to $10.5 million when compared to the same period in 2013. The decrease was primarily the result of a decrease in net gain on available for sale securities of $4.5 million and an increase in provision for loan losses of $629,000, which was partially offset by a $2.9 million increase in interest income, and decreases in noninterest expense of $740,000, and provision for income tax expense of $874,000 .
Noninterest expense decreased $740,000, or 3.5%, for the three months ended June 30, 2014, compared to the same period in 2013, primarily due to decreases in FHLB prepayment fees and salary and employee benefit expense which were partially offset by an increase in professional fees associated with the pending OmniAmerican merger.
Net Income for the Six Months
Net income for the six months ended June 30, 2014 decreased $1.4 million, or 7.1%, to $18.7 million, when compared to $20.1 million for the same period in 2013. This decrease was mainly due to a decrease in net gain on sale of available for sale securities
of $8.8 million and a $4.3 million increase in provision for loan losses, which was mostly offset by an increase in net interest income of $9.4 million, and decreases in noninterest expense of $877,000 and provision for income tax expense of $1.6 million.
Noninterest expense decreased $877,000, or 2.1%, for the six months ended June 30, 2014, compared to the same period in 2013, primarily due to decreases in FHLB prepayment fees, salary and employee benefit expense and occupancy expense, which were partially offset by an increase in professional fees associated with the pending OmniAmerican merger.
About Southside Bancshares, Inc.
Southside Bancshares, Inc. is a bank holding company with approximately $3.5 billion in assets that owns 100% of Southside Bank. Southside Bank currently has 50 banking centers in Texas and operates a network of 49 ATMs.
To learn more about Southside Bancshares, Inc., please visit our investor relations website at www.southside.com/investor. Our investor relations site provides a detailed overview of our activities, financial information and historical stock price data. To receive e-mail notification of company news, events and stock activity, please register on the E-mail Notification portion of the website. Questions or comments may be directed to Susan Hill at (903)531-7220, or susan.hill@southside.com.
Forward-Looking Statements
Certain statements of other than historical fact that are contained in this document and in other written material, press releases and oral statements issued by or on behalf of the Company, a bank holding company, may be considered to be “forward-looking statements” within the meaning of and subject to the protections of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. These statements may include words such as “expect,” “estimate,” “project,” “anticipate,” “appear,” “believe,” “could,” “should,” “may,” “likely,” “intend,” “probability,” “risk,” “target,” “objective,” “plans,” “potential,” and similar expressions. Forward-looking statements are statements with respect to the Company’s beliefs, plans, expectations, objectives, goals, anticipations, assumptions, estimates, intentions and future performance and are subject to significant known and unknown risks and uncertainties, which could cause the Company's actual results to differ materially from the results discussed in the forward-looking statements. For example, discussions about trends in asset quality, capital, liquidity, the pace of loan growth, earnings and certain market risk disclosures, including the impact of interest rate and other economic uncertainty, are based upon information presently available to management and are dependent on choices about key model characteristics and assumptions and are subject to various limitations. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual income gains and losses could materially differ from those that have been estimated.
Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 under “Forward-Looking Information” and Item 1A. “Risk Factors,” and in the Company’s other filings with the Securities and Exchange Commission. The Company disclaims any obligation to update any factors or to announce publicly the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.
Additional Information About the Proposed Merger and Where to Find It
This document does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed merger between Southside and OmniAmerican, Southside has filed with the SEC a Registration Statement on Form S-4, which includes a preliminary joint proxy statement of Southside and OmniAmerican and constitutes a preliminary prospectus. After the registration statement is declared effective by the SEC, Southside and OmniAmerican will deliver a definitive joint proxy statement/prospectus to their respective shareholders. SOUTHSIDE AND OMNIAMERICAN URGE INVESTORS AND SECURITY HOLDERS TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors and security holders may obtain (when available) copies of all documents filed with the SEC regarding the merger, free of charge, at the SEC’s website (www.sec.gov). You may also obtain these documents, free of charge, from (i) Southside’s website (www.southside.com) under the tab “Investor Relations,” and then under the tab “Documents”; (ii) Southside upon written request to Corporate Secretary, P.O. Box 8444, Tyler, Texas 75711; (iii) OmniAmerican’s website (www.omniamerican.com) under the tab “Investor Relations,” and then under the tab “SEC Filings”; or (iv) OmniAmerican upon written request to Keishi High at 1320 South University Drive, Suite 900, Fort Worth, Texas 76107.
Participants in the Solicitation
Southside, OmniAmerican and their respective directors and executive officers may be considered participants in the solicitation of proxies from Southside and OmniAmerican shareholders in connection with the proposed merger and related matters. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of Southside and OmniAmerican shareholders in connection with the proposed merger and a description of their direct and indirect interests, by security holdings or otherwise, will be set forth in the joint proxy statement/prospectus that filed with the SEC. You can find information about Southside’s directors and executive officers in Southside’s definitive proxy statement filed with the SEC on March 14, 2014 for its 2014 Annual Meeting of Shareholders, as amended. You can find information about OmniAmerican’s directors and executive officers in OmniAmerican’s definitive proxy statement filed with the SEC on April 16, 2014 for its 2014 Annual Meeting of Shareholders. Additional information about Southside’s directors and executive officers and OmniAmerican’s directors and executive officers is also be set forth in the above-referenced Registration Statement on Form S-4 filed with the SEC. Investors should read the definitive joint proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You can obtain, when available, free copies of these documents from Southside and OmniAmerican using the contact information above.
|
| | | | | | | | | | | |
| | At
June 30,
2014 | | At
December 31,
2013 | | At
June 30,
2013 |
| | | |
| | | |
| | (dollars in thousands) |
| | (unaudited) |
| Selected Financial Condition Data (at end of period): | | | | | |
| | | | | | |
| Total assets | $ | 3,498,662 |
| | $ | 3,445,663 |
| | $ | 3,385,665 |
|
| Loans | 1,391,285 |
| | 1,351,273 |
| | 1,293,429 |
|
| Allowance for loan losses | 18,408 |
| | 18,877 |
| | 18,370 |
|
| Mortgage-backed securities: | | | | | |
| Available for sale, at estimated fair value | 751,740 |
| | 840,258 |
| | 821,760 |
|
| Held to maturity, at carrying value | 260,659 |
| | 275,569 |
| | 240,514 |
|
| Investment securities: | | | | | |
| Available for sale, at estimated fair value | 351,908 |
| | 337,429 |
| | 488,321 |
|
| Held to maturity, at carrying value | 390,221 |
| | 391,552 |
| | 302,994 |
|
| Federal Home Loan Bank stock, at cost | 25,512 |
| | 34,065 |
| | 27,153 |
|
| Deposits | 2,601,478 |
| | 2,527,808 |
| | 2,499,338 |
|
| Long-term obligations | 566,021 |
| | 559,660 |
| | 502,119 |
|
| Shareholders' equity | 283,960 |
| | 259,518 |
| | 236,120 |
|
| Nonperforming assets | 14,535 |
| | 13,606 |
| | 12,270 |
|
| Nonaccrual loans | 9,620 |
| | 8,088 |
| | 8,179 |
|
| Accruing loans past due more than 90 days | 4 |
| | 3 |
| | — |
|
| Restructured loans | 4,036 |
| | 3,888 |
| | 3,053 |
|
| Other real estate owned | 383 |
| | 726 |
| | 772 |
|
| Repossessed assets | 492 |
| | 901 |
| | 266 |
|
| | | | | | |
| Asset Quality Ratios: | | | | | |
| Nonaccruing loans to total loans | 0.69 | % | | 0.60 | % | | 0.63 | % |
| Allowance for loan losses to nonaccruing loans | 191.35 |
| | 233.40 |
| | 224.60 |
|
| Allowance for loan losses to nonperforming assets | 126.65 |
| | 138.74 |
| | 149.71 |
|
| Allowance for loan losses to total loans | 1.32 |
| | 1.40 |
| | 1.42 |
|
| Nonperforming assets to total assets | 0.42 |
| | 0.39 |
| | 0.36 |
|
| Net charge-offs to average loans | 1.07 |
| | 0.82 |
| | 0.75 |
|
| | | | | | |
| Capital Ratios: | | | | | |
| Shareholders’ equity to total assets | 8.12 |
| | 7.53 |
| | 6.97 |
|
| Average shareholders’ equity to average total assets | 7.88 |
| | 7.39 |
| | 7.89 |
|
Loan Portfolio Composition
The following table sets forth loan totals by category for the periods presented:
|
| | | | | | | | | | | |
| | At
June 30,
2014 | | At
December 31,
2013 | | At
June 30,
2013 |
| | (in thousands) |
| | (unaudited) |
| Real Estate Loans: | | | | | |
| Construction | $ | 164,668 |
| | $ | 125,219 |
| | $ | 123,493 |
|
| 1-4 Family Residential | 391,675 |
| | 390,499 |
| | 385,241 |
|
| Other | 271,858 |
| | 262,536 |
| | 232,632 |
|
| Commercial Loans | 156,893 |
| | 157,655 |
| | 153,985 |
|
| Municipal Loans | 239,883 |
| | 245,550 |
| | 224,134 |
|
| Loans to Individuals | 166,308 |
| | 169,814 |
| | 173,944 |
|
| Total Loans | $ | 1,391,285 |
| | $ | 1,351,273 |
| | $ | 1,293,429 |
|
|
| | | | | | | | | | | | | | | |
| | At or For the
Three Months Ended
June 30, | | At or For the
Six Months Ended
June 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
| | (dollars in thousands) |
| | (unaudited) |
| Selected Operating Data: | | | | | | | |
| Total interest income | $ | 32,086 |
| | $ | 29,215 |
| | $ | 64,325 |
| | $ | 55,776 |
|
| Total interest expense | 4,230 |
| | 4,344 |
| | 8,577 |
| | 9,445 |
|
| Net interest income | 27,856 |
| | 24,871 |
| | 55,748 |
| | 46,331 |
|
| Provision for loan losses | 2,650 |
| | 2,021 |
| | 6,783 |
| | 2,513 |
|
| Net interest income after provision for loan losses | 25,206 |
| | 22,850 |
| | 48,965 |
| | 43,818 |
|
| Noninterest income | | | | | | | |
| Deposit services | 3,794 |
| | 3,904 |
| | 7,432 |
| | 7,657 |
|
| Net gain on sale of securities available for sale | 498 |
| | 5,001 |
| | 509 |
| | 9,346 |
|
| | | | | | | | |
| Total other-than-temporary impairment losses | — |
| | — |
| | — |
| | (52 | ) |
| Portion of loss recognized in other comprehensive income (before taxes) | — |
| | — |
| | — |
| | 10 |
|
| Net impairment losses recognized in earnings | — |
| | — |
| | — |
| | (42 | ) |
| | | | | | | | |
| Gain on sale of loans | 81 |
| | 241 |
| | 161 |
| | 560 |
|
| Trust income | 762 |
| | 733 |
| | 1,542 |
| | 1,453 |
|
| Bank owned life insurance income | 307 |
| | 264 |
| | 621 |
| | 518 |
|
| Other | 1,073 |
| | 953 |
| | 2,056 |
| | 1,844 |
|
| Total noninterest income | 6,515 |
| | 11,096 |
| | 12,321 |
| | 21,336 |
|
| Noninterest expense | | | | | | | |
| Salaries and employee benefits | 13,092 |
| | 13,401 |
| | 26,194 |
| | 26,610 |
|
| Occupancy expense | 1,786 |
| | 1,897 |
| | 3,540 |
| | 3,768 |
|
| Advertising, travel & entertainment | 605 |
| | 656 |
| | 1,148 |
| | 1,297 |
|
| ATM and debit card expense | 302 |
| | 303 |
| | 619 |
| | 684 |
|
| Professional fees | 1,304 |
| | 562 |
| | 2,231 |
| | 1,202 |
|
| Software and data processing expense | 486 |
| | 444 |
| | 987 |
| | 987 |
|
| Telephone and communications | 320 |
| | 384 |
| | 598 |
| | 835 |
|
| FDIC insurance | 434 |
| | 409 |
| | 882 |
| | 830 |
|
| FHLB prepayment fees | — |
| | 988 |
| | — |
| | 988 |
|
| Other | 2,097 |
| | 2,122 |
| | 4,409 |
| | 4,284 |
|
| Total noninterest expense | 20,426 |
| | 21,166 |
| | 40,608 |
| | 41,485 |
|
| Income before income tax expense | 11,295 |
| | 12,780 |
| | 20,678 |
| | 23,669 |
|
| Provision for income tax expense | 838 |
| | 1,712 |
| | 1,997 |
| | 3,559 |
|
| Net income | $ | 10,457 |
| | $ | 11,068 |
| | $ | 18,681 |
| | $ | 20,110 |
|
|
| | | | | | | | | | | | | | | |
| Common share data: | | | | | | |
| Weighted-average basic shares outstanding | 18,832 |
| | 18,744 |
| | 18,825 |
| | 18,748 |
|
| Weighted-average diluted shares outstanding | 18,925 |
| | 18,778 |
| | 18,914 |
| | 18,776 |
|
| Net income per common share | | | | | | | |
| Basic | $ | 0.55 |
| | $ | 0.59 |
| | $ | 0.99 |
| | $ | 1.07 |
|
| Diluted | 0.55 |
| | 0.59 |
| | 0.99 |
| | 1.07 |
|
| Book value per common share | — |
| | — |
| | 15.07 |
| | 12.59 |
|
| Cash dividend paid per common share | 0.21 |
| | 0.20 |
| | 0.42 |
| | 0.40 |
|
|
| | | | | | | | | | | |
| | At or For the
Three Months Ended
June 30, | | At or For the
Six Months Ended
June 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
| | (unaudited) | | (unaudited) |
| Selected Performance Ratios: | | | | | | | |
| Return on average assets | 1.22 | % | | 1.33 | % | | 1.09 | % | | 1.24 | % |
| Return on average shareholders’ equity | 15.09 |
| | 17.17 |
| | 13.80 |
| | 15.69 |
|
| Average yield on interest earning assets | 4.46 |
| | 4.22 |
| | 4.46 |
| | 4.12 |
|
| Average yield on interest bearing liabilities | 0.67 |
| | 0.71 |
| | 0.67 |
| | 0.79 |
|
| Net interest spread | 3.79 |
| | 3.51 |
| | 3.79 |
| | 3.33 |
|
| Net interest margin | 3.94 |
| | 3.66 |
| | 3.93 |
| | 3.50 |
|
| Average interest earnings assets to average interest bearing liabilities | 127.57 |
| | 128.33 |
| | 125.58 |
| | 127.59 |
|
| Noninterest expense to average total assets | 2.37 |
| | 2.54 |
| | 2.36 |
| | 2.55 |
|
| Efficiency ratio | 53.51 |
| | 57.98 |
| | 53.40 |
| | 61.86 |
|
RESULTS OF OPERATIONS
The analysis below shows average interest earning assets and interest bearing liabilities together with the average yield on the interest earning assets and the average cost of the interest bearing liabilities.
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | AVERAGE BALANCES AND YIELDS | | |
| | | | | | (dollars in thousands) | | | | |
| | | | | | (unaudited) | | | | |
| | | | | | Six Months Ended | | | | |
| | June 30, 2014 | | June 30, 2013 |
| | AVG | | | | AVG | | AVG | | | | AVG |
| | BALANCE | | INTEREST | | YIELD | | BALANCE | | INTEREST | | YIELD |
| ASSETS | | | | | | | | | | | |
| INTEREST EARNING ASSETS: | | | | | | | | | | | |
| Loans (1) (2) | $ | 1,368,110 |
| | $ | 38,677 |
| | 5.70 | % | | $ | 1,277,991 |
| | $ | 37,950 |
| | 5.99 | % |
| Loans Held For Sale | 379 |
| | 8 |
| | 4.26 | % | | 1,786 |
| | 28 |
| | 3.16 | % |
| Securities: | | | | | | | | | | | |
| Investment Securities (Taxable)(4) | 28,856 |
| | 266 |
| | 1.86 | % | | 64,835 |
| | 533 |
| | 1.66 | % |
| Investment Securities (Tax-Exempt)(3)(4) | 649,639 |
| | 17,874 |
| | 5.55 | % | | 603,286 |
| | 15,392 |
| | 5.15 | % |
| Mortgage-backed Securities (4) | 1,136,608 |
| | 15,239 |
| | 2.70 | % | | 1,038,261 |
| | 8,616 |
| | 1.67 | % |
| Total Securities | 1,815,103 |
| | 33,379 |
| | 3.71 | % | | 1,706,382 |
| | 24,541 |
| | 2.90 | % |
| FHLB stock and other investments, at cost | 29,855 |
| | 108 |
| | 0.73 | % | | 27,999 |
| | 99 |
| | 0.71 | % |
| Interest Earning Deposits | 51,947 |
| | 65 |
| | 0.25 | % | | 56,369 |
| | 78 |
| | 0.28 | % |
| Total Interest Earning Assets | 3,265,394 |
| | 72,237 |
| | 4.46 | % | | 3,070,527 |
| | 62,696 |
| | 4.12 | % |
| NONINTEREST EARNING ASSETS: | | | | | | | | | | | |
| Cash and Due From Banks | 44,430 |
| | | | | | 46,485 |
| | | | |
| Bank Premises and Equipment | 52,699 |
| | | | | | 50,171 |
| | | | |
| Other Assets | 123,572 |
| | | | | | 127,715 |
| | | | |
| Less: Allowance for Loan Loss | (18,641 | ) | | | | | | (19,044 | ) | | | | |
| Total Assets | $ | 3,467,454 |
| | | | | | $ | 3,275,854 |
| | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | |
| INTEREST BEARING LIABILITIES: | | | | | | | | | | | |
| Savings Deposits | $ | 114,052 |
| | 69 |
| | 0.12 | % | | $ | 106,444 |
| | 71 |
| | 0.13 | % |
| Time Deposits | 620,631 |
| | 2,233 |
| | 0.73 | % | | 618,157 |
| | 2,280 |
| | 0.74 | % |
| Interest Bearing Demand Deposits | 1,239,645 |
| | 1,798 |
| | 0.29 | % | | 1,070,951 |
| | 1,720 |
| | 0.32 | % |
| Total Interest Bearing Deposits | 1,974,328 |
| | 4,100 |
| | 0.42 | % | | 1,795,552 |
| | 4,071 |
| | 0.46 | % |
| Short-term Interest Bearing Liabilities | 60,952 |
| | 127 |
| | 0.42 | % | | 152,090 |
| | 1,639 |
| | 2.17 | % |
| Long-term Interest Bearing Liabilities – FHLB Dallas | 504,617 |
| | 3,644 |
| | 1.46 | % | | 398,570 |
| | 3,011 |
| | 1.52 | % |
| Long-term Debt (5) | 60,311 |
| | 706 |
| | 2.36 | % | | 60,311 |
| | 724 |
| | 2.42 | % |
| Total Interest Bearing Liabilities | 2,600,208 |
| | 8,577 |
| | 0.67 | % | | 2,406,523 |
| | 9,445 |
| | 0.79 | % |
| NONINTEREST BEARING LIABILITIES: | | | | | | | | | | | |
| Demand Deposits | 566,782 |
| | | | | | 559,762 |
| | | | |
| Other Liabilities | 27,392 |
| | | | | | 51,087 |
| | | | |
| Total Liabilities | 3,194,382 |
| | | | | | 3,017,372 |
| | | | |
| SHAREHOLDERS’ EQUITY | 273,072 |
| | | | | | 258,482 |
| | | | |
| Total Liabilities and Shareholders’ Equity | $ | 3,467,454 |
| | | | | | $ | 3,275,854 |
| | | | |
| NET INTEREST INCOME | | | $ | 63,660 |
| | | | | | $ | 53,251 |
| | |
| NET INTEREST MARGIN ON AVERAGE EARNING ASSETS | | | | | 3.93 | % | | | | | | 3.50 | % |
| NET INTEREST SPREAD | | | | | 3.79 | % | | | | | | 3.33 | % |
| |
| (1) | Interest on loans includes net fees on loans that are not material in amount. |
| |
| (2) | Interest income includes taxable-equivalent adjustments of $2,017 and $1,923 for the six months ended June 30, 2014 and 2013, respectively. |
| |
| (3) | Interest income includes taxable-equivalent adjustments of $5,895 and $4,997 for the six months ended June 30, 2014 and 2013, respectively. |
| |
| (4) | For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. |
| |
| (5) | Represents the issuance of junior subordinated debentures. |
Note: As of June 30, 2014 and 2013, loans on nonaccrual status totaled $9,620 and $8,179, respectively. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | AVERAGE BALANCES AND YIELDS | | |
| | | | | | (dollars in thousands) | | | | |
| | | | | | (unaudited) | | | | |
| | | | | | Three Months Ended | | | | |
| | June 30, 2014 | | June 30, 2013 |
| | AVG | | | | AVG | | AVG | | | | AVG |
| | BALANCE | | INTEREST | | YIELD | | BALANCE | | INTEREST | | YIELD |
| ASSETS | | | | | | | | | | | |
| INTEREST EARNING ASSETS: | | | | | | | | | | | |
| Loans (1)(2) | $ | 1,371,609 |
| | $ | 19,302 |
| | 5.64 | % | | $ | 1,288,494 |
| | $ | 19,322 |
| | 6.01 | % |
| Loans Held For Sale | 335 |
| | 3 |
| | 3.59 | % | | 1,311 |
| | 12 |
| | 3.67 | % |
| Securities: | | | | | | | | | | | |
| Investment Securities (Taxable) (4) | 31,250 |
| | 143 |
| | 1.84 | % | | 39,719 |
| | 169 |
| | 1.71 | % |
| Investment Securities (Tax-Exempt)(3)(4) | 655,865 |
| | 9,032 |
| | 5.52 | % | | 692,237 |
| | 8,720 |
| | 5.05 | % |
| Mortgage-backed Securities (4) | 1,125,085 |
| | 7,557 |
| | 2.69 | % | | 1,036,866 |
| | 4,680 |
| | 1.81 | % |
| Total Securities | 1,812,200 |
| | 16,732 |
| | 3.70 | % | | 1,768,822 |
| | 13,569 |
| | 3.08 | % |
| FHLB stock and other investments, at cost | 28,109 |
| | 38 |
| | 0.54 | % | | 29,074 |
| | 34 |
| | 0.47 | % |
| Interest Earning Deposits | 34,693 |
| | 22 |
| | 0.25 | % | | 46,362 |
| | 35 |
| | 0.30 | % |
| Total Interest Earning Assets | 3,246,946 |
| | 36,097 |
| | 4.46 | % | | 3,134,063 |
| | 32,972 |
| | 4.22 | % |
| NONINTEREST EARNING ASSETS: | | | | | | | | | | | |
| Cash and Due From Banks | 42,887 |
| | | | | | 44,334 |
| | | | |
| Bank Premises and Equipment | 53,108 |
| | | | | | 50,214 |
| | | | |
| Other Assets | 126,015 |
| | | | | | 125,881 |
| | | | |
| Less: Allowance for Loan Loss | (18,635 | ) | | | | | | (18,095 | ) | | | | |
| Total Assets | $ | 3,450,321 |
| | | | | | $ | 3,336,397 |
| | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | |
| INTEREST BEARING LIABILITIES: | | | | | | | | | | | |
| Savings Deposits | $ | 116,390 |
| | 34 |
| | 0.12 | % | | $ | 108,446 |
| | 35 |
| | 0.13 | % |
| Time Deposits | 603,903 |
| | 1,070 |
| | 0.71 | % | | 614,115 |
| | 1,118 |
| | 0.73 | % |
| Interest Bearing Demand Deposits | 1,223,788 |
| | 880 |
| | 0.29 | % | | 1,080,605 |
| | 848 |
| | 0.31 | % |
| Total Interest Bearing Deposits | 1,944,081 |
| | 1,984 |
| | 0.41 | % | | 1,803,166 |
| | 2,001 |
| | 0.45 | % |
| Short-term Interest Bearing Liabilities | 32,777 |
| | 56 |
| | 0.69 | % | | 149,913 |
| | 389 |
| | 1.04 | % |
| Long-term Interest Bearing Liabilities – FHLB Dallas | 508,128 |
| | 1,836 |
| | 1.45 | % | | 428,800 |
| | 1,592 |
| | 1.49 | % |
| Long-term Debt (5) | 60,311 |
| | 354 |
| | 2.35 | % | | 60,311 |
| | 362 |
| | 2.41 | % |
| Total Interest Bearing Liabilities | 2,545,297 |
| | 4,230 |
| | 0.67 | % | | 2,442,190 |
| | 4,344 |
| | 0.71 | % |
| NONINTEREST BEARING LIABILITIES: | | | | | | | | | | | |
| Demand Deposits | 597,852 |
| | | | | | 580,572 |
| | | | |
| Other Liabilities | 29,241 |
| | | | | | 55,120 |
| | | | |
| Total Liabilities | 3,172,390 |
| | | | | | 3,077,882 |
| | | | |
| SHAREHOLDERS’ EQUITY | 277,931 |
| | | | | | 258,515 |
| | | | |
| Total Liabilities and Shareholders’ Equity | $ | 3,450,321 |
| | | | | | $ | 3,336,397 |
| | | | |
| NET INTEREST INCOME | | | $ | 31,867 |
| | | | | | $ | 28,628 |
| | |
| NET INTEREST MARGIN ON AVERAGE EARNING ASSETS | | | | | 3.94 | % | | | | | | 3.66 | % |
| NET INTEREST SPREAD | | | | | 3.79 | % | | | | | | 3.51 | % |
| |
| (1) | Interest on loans includes net fees on loans that are not material in amount. |
| |
| (2) | Interest income includes taxable-equivalent adjustments of $1,000 and $944 for the three months ended June 30, 2014 and 2013, respectively. |
| |
| (3) | Interest income includes taxable-equivalent adjustments of $3,011 and $2,813 for the three months ended June 30, 2014 and 2013, respectively. |
| |
| (4) | For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. |
| |
| (5) | Represents the issuance of junior subordinated debentures. |
Note: As of June 30, 2014 and 2013, loans on nonaccrual status totaled $9,620 and $8,179, respectively. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.
