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Southside Bancshares, Inc. Announces Net Income for the Three Months and Year Ended December 31, 2015

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TYLER, Texas, Jan. 29, 2016 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. ("Southside" or the "Company") (NASDAQ: SBSI) today reported its financial results for the three months and year ended December 31, 2015.

Southside reported net income of $11.7 million for the three months ended December 31, 2015, an increase of $15.6 million, or 396.4%, when compared to a net loss of $3.9 million for the same period in 2014.  Net income for the year ended December 31, 2015 increased $23.2 million, or 111.2%, to $44.0 million when compared to $20.8 million for the same period in 2014.

Diluted earnings (losses) per common share were $0.46 and $(0.19) for the three months ended December 31, 2015 and 2014, respectively, an increase of $0.65, or 342.1%.  For the year ended December 31, 2015, diluted earnings per common share increased $0.69, or 66.3%, to $1.73 when compared to $1.04 for the same period in 2014.

The return on average shareholders' equity for the year ended December 31, 2015 was 10.04%, compared to 7.24% for the same period in 2014.  The return on average assets was 0.90% for the year ended December 31, 2015 when compared to 0.60% for the same period in 2014.

"We are delighted with the outstanding financial results achieved during the fourth quarter and year ended December 31, 2015," stated Sam Dawson, Chief Executive Officer of Southside Bancshares, Inc.  "For the second quarter in a row, we experienced double digit annualized loan growth as both prior and current quarter loan commitments funded.  Annualized loan growth during the fourth quarter was 34.4%.  For the year we achieved loan growth of 11.5%, in line with our expectations.  Approximately 50% of the loan growth during the fourth quarter was booked in December, enhancing the anticipated increase in loan revenue during the first quarter of 2016.  We are pleased to report loan production remains strong, especially in Austin and Fort Worth.  Southside's balance sheet, asset quality, liquidity and capital all remain solid, allowing for continued steady growth in our market areas."

"On January 28, 2016, the Board of Directors approved a Stock Repurchase Plan.  The Board authorized the repurchase, from time to time, of up to five percent of the issued and outstanding common stock, or approximately 1.27 million shares, in open market purchases and privately negotiated transactions at prevailing market prices.  We believe repurchasing shares in a company we know quite well, Southside Bancshares, Inc., at current market prices, is prudent.  The Company has no obligation to repurchase any shares under the Stock Repurchase Plan and may suspend or discontinue it at any time."

"In late December, we offered an early retirement package to 24 of our employees with an acceptance deadline of January 29, 2016.  One employee accepted the offer in December and expense was recorded of approximately $160,000, net of tax.  An additional 15 employees have accepted the early retirement package in 2016 and we will record an estimated one-time expense of approximately $1.3 million, net of tax, during the quarter ended March 31, 2016.  We currently estimate the annual cost savings associated with the early retirement packages to be approximately $1.0 million, net of tax.  The merger-related expense reductions resulting from our acquisition of OmniAmerican Bancorp, Inc. ("OmniAmerican") should be complete after recording approximately $208,000, net of tax, of merger-related expense during the fourth quarter.  During 2015, we recorded $3.6 million, net of tax, of merger-related expense.  During the fourth quarter we also incurred expenses related to branch closings of approximately $270,000, net of tax."

"We continue to focus on additional operational efficiencies and revenue generating and cost containment opportunities.  We are utilizing a consultant for assistance with this effort and incurred professional fees of approximately $310,000, net of tax, during the quarter.  The anticipated results are operational efficiencies through changes in our back office processes, revised branch models commensurate with today's customer delivery preferences and enhanced noninterest income programs."

"Loans increased $192.6 million during the fourth quarter of 2015, more than offsetting the continued roll off of the indirect automobile loan portfolio and payoffs in our 1-4 family residential loans.  During the quarter, commercial real estate loans increased $98 million, construction loans increased $96 million, municipal loans increased $26 million and commercial loans increased $14 million.  Based on loans committed and activity in our pipeline, we continue to anticipate healthy overall net loan growth during 2016.  We are focused on executing our business plan and we continue to add value to our customers and the communities we serve."

Loans and Deposits

For the year ended December 31, 2015, total loans increased by $250.6 million, or 11.5%, when compared to December 31, 2014.  During the year ended December 31, 2015, construction loans increased $170.4 million, other real estate loans increased $167.0 million, municipal loans increased $30.6 million, commercial loans increased $16.1 million, 1-4 family real estate loans decreased $35.5 million and loans to individuals decreased $98.0 million, primarily as a result of the decrease in the indirect automobile loan portfolio.  Our oil and gas exposure in the loan portfolio remained minimal at 1.34% of the loan portfolio at December 31, 2015.

Nonperforming assets increased for the year ended December 31, 2015 by $20.2 million, or 164.6%, to $32.5 million, or 0.63% of total assets, when compared to 0.26% at December 31, 2014, primarily due to the downgrade of one large commercial borrowing relationship to impaired status during the first quarter of 2015 and the restructure of a large purchase credit impaired commercial loan during the third quarter of 2015.

During the year ended December 31, 2015, the allowance for loan losses increased $6.4 million, or 48.5%, to $19.7 million, or 0.8% of total loans, when compared to 0.6% at December 31, 2014, as a result of the additional provision associated with loan growth and impaired loans.

During the year ended December 31, 2015, deposits, net of brokered deposits, increased $18.1 million, or 0.5%, compared to December 31, 2014.  During this period, public fund deposits increased $56.8 million.

Net Interest Income for the Three Months

Net interest income increased $9.3 million, or 36.9%, to $34.7 million for the three months ended December 31, 2015, when compared to $25.4 million for the same period in 2014.  The increase in net interest income was primarily the result of the increase in interest income of $10.4 million, compared to the same period in 2014, which was a result of the increase in total loans and total securities.  For the three months ended December 31, 2015, our net interest spread decreased to 3.26%, compared to 3.29% for the same period in 2014, primarily as a result of the merger with OmniAmerican.  The net interest margin decreased to 3.35% for the three months ended December 31, 2015, compared to 3.42% for the same period in 2014.  The net interest spread and margin each decreased as a result of the decrease in the yield on interest-earning assets, which more than offset the decrease in the rate on interest-bearing liabilities compared to the same period in 2014, primarily as a result of the merger with OmniAmerican.  The net interest spread and margin on a linked quarter basis were unchanged at 3.26% and 3.35%, respectively.

Net Interest Income for the Year

Net interest income increased $27.9 million, or 26.1%, to $134.7 million for the year ended December 31, 2015, when compared to $106.8 million for the same period in 2014.  The increase in net interest income was primarily the result of the increase in interest income of $30.8 million, compared to the same period in 2014, which was a result of the increase in total loans and total securities.  For the year ended December 31, 2015, our net interest spread decreased to 3.31%, compared to 3.63% for the same period in 2014.  The net interest margin decreased to 3.40% for the year ended December 31, 2015, compared to 3.77% for the same period in 2014.  The net interest spread and margin each decreased as a result of the decrease in the yield on interest-earning assets, which more than offset the decrease in the rate on interest-bearing liabilities compared to the same period in 2014.

Net Income for the Three Months

Net income increased $15.6 million, or 396.4%, for the three months ended December 31, 2015, to $11.7 million when compared to the same period in 2014.  The increase was primarily the result of an increase in interest income of $10.4 million combined with a decrease in provision for loan loss of $1.3 million and a decrease in noninterest expense of $8.6 million, which were partially offset by a $5.4 million increase in income tax expense.

Noninterest expense decreased $8.6 million, or 23.3%, for the three months ended December 31, 2015, compared to the same period in 2014, primarily due to decreases in salaries and employee benefits expense, professional fees, software and data processing expense and FHLB prepayment fees, which were partially offset by increases in occupancy expense and ATM and debit card expense.

Net Income for the Year

Net income increased $23.2 million, or 111.2%, for the year ended December 31, 2015, to $44.0 million when compared to the same period in 2014.  The increase was primarily the result of an increase in interest income of $30.8 million and an increase in noninterest income of $13.4 million, combined with a decrease in provision for loan loss of $6.6 million, which were partially offset by a $15.3 million increase in noninterest expense and a $9.4 million increase in income tax expense.

Noninterest expense increased $15.3 million, or 15.6%, for the year ended December 31, 2015, compared to the same period in 2014, primarily due to increases in salaries and employee benefits expense, occupancy expense, ATM and debit card expense, telephone and communications expense and other noninterest expense which were partially offset by decreases in professional fees and software and data processing expense.

Conference Call

Southside's management team will host a conference call to discuss its fourth quarter and year end 2015 results on Friday, January 29, 2016 at 9:00 am CST.  The call can be accessed by dialing 877-340-9220 and by identifying the conference ID number 26660694 or by identifying "Southside Bancshares, Inc., Fourth Quarter and Year End 2015 Earnings Call."  To listen to the call via webcast, register at www.southside.com/about/investor-relations.

For those unable to listen to the conference call live, a recording of the conference call with be available from approximately 3:00 pm CST January 29, 2016 through February 10, 2016 by accessing the company website, www.southside.com/about/investor-relations.

Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting principles (GAAP) in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. These include the following fully-taxable equivalent measures: tax-equivalent net interest income, tax-equivalent net interest margin, tax-equivalent net interest spread, and tax-equivalent efficiency ratio., which include the effects of taxable-equivalent adjustments using a federal income tax rate of 35% to increase tax-exempt interest income to a tax-equivalent basis.  Tax-equivalent adjustments are reported in Notes 2 and 3 to the Average Balances with Average Yields and Rates tables under Results of Operations below.

Tax-equivalent net interest income, net interest margin and net interest spread.  Net Interest Income on a tax-equivalent basis is a non-GAAP measure that adjusts for the tax-favored status of net interest income from loans and investments. We believe this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources. The most directly comparable financial measure calculated in accordance with GAAP is our net interest income. Net interest margin on a tax-equivalent basis is net interest income on a tax-equivalent basis divided by average interest-earning assets on a tax-equivalent basis.  Net interest spread on a tax-equivalent basis is the difference in the average yield on average interest-earning assets on a tax equivalent basis and the average rate paid on average interest-bearing liabilities.

Tax-equivalent efficiency ratio.  The efficiency ratio on a tax-equivalent basis is a non-GAAP measure that provides a measure of productivity in the banking industry. This ratio is calculated to measure the cost of generating one dollar of revenue. That is, the ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. We calculate this ratio by dividing noninterest expense, excluding amortization of intangibles and certain non-recurring expense by the sum of net interest income on a tax-equivalent basis and noninterest income, excluding gains (losses) on sales of investment securities and certain non-recurring impairments.

These non-GAAP financial measures should not be considered an alternative to GAAP-basis financial statements, and other bank holding companies may define or calculate these or similar measures differently.

About Southside Bancshares, Inc.

Southside Bancshares, Inc. is a bank holding company with approximately $5.2 billion in assets that owns 100% of Southside Bank.  Southside Bank currently has 60 banking centers in Texas and operates a network of over 70 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 Deborah Wilkinson at (817) 367-4962, or deborah.wilkinson@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, 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 and revenue growth, merger-related expense reductions, the benefits of the Share Repurchase Plan, 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.

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, 2014 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.

  
 SOUTHSIDE BANCSHARES, INC.
 CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
 (In thousands, except per share data)
          
          
 As of
 2015 2014
 Dec. 31, Sept 30, June 30, Mar. 31, Dec. 31,
ASSETS         
Cash and due from banks$54,288  $52,311  $50,406  $55,055  $64,001 
Interest-bearing deposits26,687  19,583  26,623  52,123  20,654 
Investment securities:         
Available for sale, at estimated fair value366,639  301,627  371,019  293,735  306,706 
Held to maturity, at carrying value385,496  386,385  387,212  388,106  388,823 
Mortgage-backed securities:         
Available for sale, at estimated fair value1,093,853  1,073,368  1,094,802  1,140,140  1,142,002 
Held to maturity, at carrying value398,800  385,529  356,669  249,430  253,496 
Federal Home Loan Bank stock, at cost51,047  43,446  37,769  39,978  39,942 
Loans held for sale3,811  4,883  7,431  4,096  2,899 
Loans2,431,753  2,239,146  2,179,863  2,174,614  2,181,133 
Less: Allowance for loan losses(19,736) (18,402) (16,822) (16,926) (13,292)
Net loans2,412,017  2,220,744  2,163,041  2,157,688  2,167,841 
Premises & equipment, net107,929  109,087  110,493  111,903  112,860 
Goodwill91,520  91,520  90,571  90,394  91,372 
Other intangible assets, net6,548  7,090  7,654  8,242  8,844 
Bank owned life insurance95,080  94,303  93,673  93,021  92,384 
Other assets68,361  47,599  58,655  48,482  115,437 
Total assets$5,162,076  $4,837,475  $4,856,018  $4,732,393  $4,807,261 
          
LIABILITIES AND SHAREHOLDERS' EQUITY         
Noninterest-bearing deposits$672,470  $681,618  $715,966  $680,122  $661,014 
Interest-bearing deposits2,782,937  2,646,259  2,752,717  2,815,218  2,713,403 
Total deposits3,455,407  3,327,877  3,468,683  3,495,340  3,374,417 
Short-term obligations647,836  445,008  284,783  143,371  301,605 
Long-term obligations562,592  558,867  632,565  609,856  660,363 
Other liabilities52,179  58,575  38,313  49,012  45,633 
Total liabilities4,718,014  4,390,327  4,424,344  4,297,579  4,382,018 
Shareholders' equity444,062  447,148  431,674  434,814  425,243 
Total liabilities and shareholders' equity$5,162,076  $4,837,475  $4,856,018  $4,732,393  $4,807,261 

 

 At or For the Three Months Ended
  2015  2014 
 Dec. 31,  Sept. 30, June 30,  Mar. 31, Dec. 31,
Income Statement:                   
Total interest income$39,964  $38,211  $37,750  $38,607  $29,613 
Total interest expense 5,267   4,926   4,845   4,816   4,259 
Net interest income 34,697   33,285   32,905   33,791   25,354 
Provision for loan losses 1,951   2,276   268   3,848   3,287 
Net interest income after provision for loan losses 32,746   31,009   32,637   29,943   22,067 
Noninterest income 
Deposit services 4,990   5,213   4,920   4,989   3,988 
Net gain on sale of securities available for sale 204   875   105   2,476   1,170 
Impairment of investment in SFG Finance, LLC             (516)
Gain on sale of loans 578   305   822   377   54 
Trust income 871   835   820   893   805 
Bank owned life insurance income 640   661   653   669   393 
Other 1,532   1,472   1,611   1,384   1,255 
Total noninterest income 8,815   9,361   8,931   10,788   7,149 
Noninterest expense 
Salaries and employee benefits 16,420   15,733   16,869   18,199   21,829 
Occupancy expense 3,263   3,316   3,105   3,199   1,946 
Advertising, travel & entertainment 726   642   683   657   582 
ATM and debit card expense 1,086   617   750   679   385 
Professional fees 1,517   825   793   742   4,464 
Software and data processing expense 771   819   1,237   1,031   3,099 
Telephone and communications 372   534   603   469   332 
FDIC insurance 619   624   629   638   446 
FHLB prepayment fees             539 
Other 3,657   3,527   3,768   3,835   3,457 
Total noninterest expense 28,431   26,637   28,437   29,449   37,079 
Income (loss) before income tax expense 13,130   13,733   13,131   11,282   (7,863)
Income tax expense (benefit) 1,438   1,971   1,967   1,903   (3,918)
Net income (loss)$11,692  $11,762  $11,164  $9,379  $(3,945)
          
Common share data: 
Weighted-average basic shares outstanding 25,380   25,360   25,337   25,322   20,757 
Weighted-average diluted shares outstanding 25,467   25,445   25,425   25,403   20,757 
Shares outstanding end of period 25,396   25,373   25,351   25,331   25,317 
Net income (loss) per common share 
Basic$0.46  $0.46  $0.44  $0.37  $(0.19)
Diluted 0.46   0.46   0.44   0.37   (0.19)
Cash dividend paid per common share 0.31   0.23   0.23   0.23   0.32 
          
Selected Performance Ratios: 
Return on average assets 0.92%  0.96%  0.93%  0.79%  (0.43)%
Return on average shareholders' equity 10.35   10.65   10.30   8.79   (4.94)
Average yield on interest earning assets 3.80   3.79   3.83   3.95   3.92 
Average rate on interest bearing liabilities 0.54   0.53   0.53   0.53   0.63 
Net interest spread 3.26   3.26   3.30   3.42   3.29 
Net interest margin 3.35   3.35   3.39   3.50   3.42 
          
Average interest earnings assets to average interest bearing liabilities 120.29   121.61   120.22   118.36   125.71 
Noninterest expense to average total assets 2.25   2.18   2.38   2.48   4.04 
Efficiency ratio 58.45   56.59   60.43   61.85   60.04 


 At or For the
 Year Ended
 December 31,
  2015   2014 
Income Statement:   
Total interest income$154,532  $123,778 
Total interest expense 19,854   16,956 
Net interest income 134,678   106,822 
Provision for loan losses 8,343   14,938 
Net interest income after provision for loan losses 126,335   91,884 
Noninterest income   
Deposit services 20,112   15,280 
Net gain on sale of securities available for sale 3,660   2,830 
Impairment of investment in SFG Finance, LLC    (2,755)
Gain on sale of loans 2,082   323 
Trust income 3,419   3,145 
Bank owned life insurance income 2,623   1,334 
Other 5,999   4,332 
Total noninterest income 37,895   24,489 
Noninterest expense   
Salaries and employee benefits 67,221   60,821 
Occupancy expense 12,883   7,259 
Advertising, travel & entertainment 2,708   2,219 
ATM and debit card expense 3,132   1,331 
Professional fees 3,877   7,827 
Software and data processing expense 3,858   4,629 
Telephone and communications 1,978   1,222 
FDIC insurance 2,510   1,765 
FHLB prepayment fees    539 
Other 14,787   10,092 
Total noninterest expense 112,954   97,704 
Income before income tax expense 51,276   18,669 
Income tax expense (benefit) 7,279   (2,164)
Net income$43,997  $20,833 
    
Common share data:   
Weighted-average basic shares outstanding 25,350   20,028 
Weighted-average diluted shares outstanding 25,435   20,127 
Net income per common share   
Basic$1.74  $1.04 
Diluted 1.73   1.04 
Book value per common share 17.49   16.80 
Cash dividend paid per common share 1.00   0.96 
    
Selected Performance Ratios:   
Return on average assets 0.90%  0.60%
Return on average shareholders' equity 10.04   7.24 
Average yield on interest earning assets 3.84   4.29 
Average rate on interest bearing liabilities 0.53   0.66 
Net interest spread 3.31   3.63 
Net interest margin 3.40   3.77 
Average interest earnings assets to average interest bearing liabilities 120.12   126.26 
Noninterest expense to average total assets 2.32   2.81 
Efficiency ratio 59.32   55.42 

 

 Southside Bancshares, Inc.
 Selected Financial Data (Unaudited)
 (In thousands)
  
 Three Months Ended
  2015   2014 
 Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
Nonperforming assets 32,480   33,621   27,794   27,262   12,277 
Nonaccrual loans (1) 20,526   20,988   21,223   20,321   4,096 
Accruing loans past due more than 90 days (1) 3      30   1   4 
Restructured loans (1) 11,143   11,772   5,667   5,782   5,874 
Other real estate owned 744   793   787   985   1,738 
Repossessed assets 64   68   87   173   565 
          
Asset Quality Ratios: 
Nonaccruing loans to total loans 0.84%  0.94%  0.97%  0.93%  0.19%
Allowance for loan losses to nonaccruing loans 96.15   87.68   79.26   83.29   324.51 
Allowance for loan losses to nonperforming assets 60.76   54.73   60.52   62.09   108.27 
Allowance for loan losses to total loans 0.81   0.82   0.77   0.78   0.61 
Nonperforming assets to total assets 0.63   0.70   0.57   0.58   0.26 
Net charge-offs to average loans 0.11   0.13   0.07   0.04   0.88 
          
Capital Ratios: 
Shareholders' equity to total assets 8.60   9.24   8.89   9.19   8.85 
Average shareholders' equity to average total assets 8.92   9.03   9.07   8.98   8.71 
  
(1)  Excludes purchased credit impaired loans measured at fair value at acquisition for the three months ended December 31, 2014.
          
Loan Portfolio Composition
          
The following table sets forth loan totals by category for the periods presented:
  
Real Estate Loans: 
Construction$438,247   342,282  $295,633  $275,960  $267,830 
1-4 Family Residential 655,410   678,431   683,944   693,137   690,895 
Other 635,210   537,161   500,906   470,877   468,171 
Commercial Loans 242,527   228,272   228,789   241,100   226,460 
Municipal Loans 288,115   262,384   256,492   252,756   257,492 
Loans to Individuals 172,244   190,616   214,099   240,784   270,285 
Total Loans$2,431,753  $2,239,146  $2,179,863  $2,174,614  $2,181,133 
                    

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 rate of the interest bearing liabilities.

 AVERAGE BALANCES WITH AVERAGE YIELDS AND RATES
     (dollars in thousands)    
     (unaudited)    
     Three Months Ended    
 December 31, 2015 September 30, 2015
     AVG     AVG
 AVG   YIELD/ AVG   YIELD/
 BALANCE INTEREST RATE BALANCE INTEREST RATE
ASSETS           
INTEREST EARNING ASSETS:           
Loans (1)(2)$2,318,162  $25,865  4.43% $2,200,241  $24,779  4.47%
Loans Held For Sale2,740  30  4.34% 5,327  52  3.87%
Securities:           
Investment Securities (Taxable) (4)81,344  416  2.03% 86,105  475  2.19%
Investment Securities (Tax-Exempt)(3)(4)637,993  8,645  5.38% 638,767  8,750  5.43%
Mortgage-backed Securities (4)1,493,020  9,215  2.45% 1,441,129  8,318  2.29%
Total Securities2,212,357  18,276  3.28% 2,166,001  17,543  3.21%
FHLB stock and other investments, at cost53,643  75  0.55% 45,963  65  0.56%
Interest Earning Deposits34,147  23  0.27% 26,216  15  0.23%
Total Interest Earning Assets4,621,049  44,269  3.80% 4,443,748  42,454  3.79%
NONINTEREST EARNING ASSETS:           
Cash and Due From Banks53,267      49,285     
Bank Premises and Equipment108,812      110,028     
Other Assets258,917      263,038     
Less: Allowance for Loan Loss(18,720)     (17,021)    
Total Assets$5,023,325      $4,849,078     
LIABILITIES AND SHAREHOLDERS' EQUITY           
INTEREST BEARING LIABILITIES:           
Savings Deposits$232,561  61  0.10% $232,903  60  0.10%
Time Deposits833,141  1,477  0.70% 833,962  1,360  0.65%
Interest Bearing Demand Deposits1,594,109  1,117  0.28% 1,600,454  1,065  0.26%
Total Interest Bearing Deposits2,659,811  2,655  0.40% 2,667,319  2,485  0.37%
Short-term Interest Bearing Liabilities630,998  600  0.38% 398,905  354  0.35%
Long-term Interest Bearing Liabilities – FHLB Dallas490,396  1,638  1.33% 527,591  1,720  1.29%
Long-term Debt (5)60,311  374  2.46% 60,311  367  2.41%
Total Interest Bearing Liabilities3,841,516  5,267  0.54% 3,654,126  4,926  0.53%
NONINTEREST BEARING LIABILITIES:           
Demand Deposits686,574      715,326     
Other Liabilities47,155      41,606     
Total Liabilities4,575,245      4,411,058     
SHAREHOLDERS' EQUITY448,080      438,020     
Total Liabilities and Shareholders' Equity$5,023,325      $4,849,078     
NET INTEREST INCOME  $39,002      $37,528   
NET INTEREST MARGIN ON AVERAGE EARNING ASSETS    3.35%     3.35%
NET INTEREST SPREAD    3.26%     3.26%
              

(1) Interest on loans includes net fees on loans that are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $1,068 and $1,044 for the three months ended December 31, 2015 and September 30, 2015, respectively.
(3) Interest income includes taxable-equivalent adjustments of $3,237 and $3,199 for the three months ended December 31, 2015 and September 30, 2015, 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 December 31, 2015 and September 30, 2015, loans on nonaccrual status totaled $20,526 and $20,988, 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.

          
     Three Months Ended    
 June 30, 2015 March 31, 2015
     AVG     AVG
 AVG   YIELD/ AVG   YIELD/
 BALANCE INTEREST RATE BALANCE INTEREST RATE
ASSETS           
INTEREST EARNING ASSETS:           
Loans (1)(2)$2,188,886  $24,889  4.56% $2,189,163  $24,938  4.62%
Loans Held For Sale3,675  45  4.91% 1,987  28  5.71%
Securities:           
Investment Securities (Taxable) (4)86,561  459  2.13% 49,437  237  1.94%
Investment Securities (Tax-Exempt)(3)(4)627,405  8,752  5.60% 645,231  8,834  5.55%
Mortgage-backed Securities (4)1,400,389  7,666  2.20% 1,392,606  8,462  2.46%
Total Securities2,114,355  16,877  3.20% 2,087,274  17,533  3.41%
FHLB stock and other investments, at cost42,741  65  0.61% 43,886  93  0.86%
Interest Earning Deposits39,609  29  0.29% 58,576  34  0.24%
Total Interest Earning Assets4,389,266  41,905  3.83% 4,380,886  42,626  3.95%
NONINTEREST EARNING ASSETS:           
Cash and Due From Banks49,760      57,367     
Bank Premises and Equipment111,384      112,635     
Other Assets259,319      282,421     
Less: Allowance for Loan Loss(17,059)     (13,625)    
Total Assets$4,792,670      $4,819,684     
LIABILITIES AND SHAREHOLDERS' EQUITY           
INTEREST BEARING LIABILITIES:           
Savings Deposits$234,097  59  0.10% $229,946  53  0.09%
Time Deposits853,410  1,313  0.62% 863,477  1,362  0.64%
Interest Bearing Demand Deposits1,701,559  1,121  0.26% 1,699,225  1,114  0.27%
Total Interest Bearing Deposits2,789,066  2,493  0.36% 2,792,648  2,529  0.37%
Short-term Interest Bearing Liabilities232,471  154  0.27% 272,302  142  0.21%
Long-term Interest Bearing Liabilities – FHLB Dallas569,302  1,837  1.29% 576,199  1,792  1.26%
Long-term Debt (5)60,311  361  2.40% 60,311  353  2.37%
Total Interest Bearing Liabilities3,651,150  4,845  0.53% 3,701,460  4,816  0.53%
NONINTEREST BEARING LIABILITIES:           
Demand Deposits669,068      645,573     
Other Liabilities37,607      40,058     
Total Liabilities4,357,825      4,387,091     
SHAREHOLDERS' EQUITY434,845      432,593     
Total Liabilities and Shareholders' Equity$4,792,670      $4,819,684     
NET INTEREST INCOME  $37,060      $37,810   
NET INTEREST MARGIN ON AVERAGE EARNING ASSETS    3.39%     3.50%
NET INTEREST SPREAD    3.30%     3.42%
            

(1) Interest on loans includes net fees on loans that are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $1,047 and $1,050 for the three months ended June 30, 2015 and March 31, 2015, respectively.
(3) Interest income includes taxable-equivalent adjustments of $3,108 and $2,969 for the three months ended June 30, 2015 and March 31, 2015, 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, 2015 and March 31, 2015, loans on nonaccrual status totaled $21,223 and $20,321, 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.

  
 Three Months Ended
 December 31, 2014
     AVG
 AVG   YIELD/
 BALANCE INTEREST RATE
ASSETS     
INTEREST EARNING ASSETS:     
Loans (1)(2)$1,529,467  $17,601  4.57%
Loans Held For Sale41,666  35  0.33%
Securities:     
Investment Securities (Taxable) (4)30,867  139  1.79%
Investment Securities (Tax-Exempt)(3)(4)638,849  8,775  5.45%
Mortgage-backed Securities (4)1,051,385  6,898  2.60%
Total Securities1,721,101  15,812  3.64%
FHLB stock and other investments, at cost28,942  37  0.51%
Interest Earning Deposits69,701  43  0.24%
Total Interest Earning Assets3,390,877  33,528  3.92%
NONINTEREST EARNING ASSETS:     
Cash and Due From Banks45,009     
Bank Premises and Equipment63,598     
Other Assets154,958     
Less: Allowance for Loan Loss(13,445)    
Total Assets$3,640,997     
LIABILITIES AND SHAREHOLDERS' EQUITY     
INTEREST BEARING LIABILITIES:     
Savings Deposits$138,724  35  0.10%
Time Deposits625,896  1,043  0.66%
Interest Bearing Demand Deposits1,278,924  899  0.28%
Total Interest Bearing Deposits2,043,544  1,977  0.38%
Short-term Interest Bearing Liabilities95,484  271  1.13%
Long-term Interest Bearing Liabilities – FHLB Dallas497,948  1,652  1.32%
Long-term Debt (5)60,311  359  2.36%
Total Interest Bearing Liabilities2,697,287  4,259  0.63%
NONINTEREST BEARING LIABILITIES:     
Demand Deposits594,326     
Other Liabilities32,360     
Total Liabilities3,323,973     
SHAREHOLDERS' EQUITY317,024     
Total Liabilities and Shareholders' Equity$3,640,997     
NET INTEREST INCOME  $29,269   
NET INTEREST MARGIN ON AVERAGE EARNING ASSETS    3.42%
NET INTEREST SPREAD    3.29%
      

(1) Interest on loans includes net fees on loans that are not material in amount.
(2) Interest income includes taxable-equivalent adjustment of $874 for the three months ended December 31, 2014.
(3) Interest income includes taxable-equivalent adjustment of $3,041 for the three months ended December 31, 2014.
(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 December 31, 2014, loans on nonaccrual status totaled $4,096.  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 WITH AVERAGE YIELDS AND RATES
     (dollars in thousands)    
     (unaudited)    
     Years Ended    
 December 31, 2015 December 31, 2014
     AVG     AVG
 AVG   YIELD/ AVG   YIELD/
 BALANCE INTEREST RATE BALANCE INTEREST RATE
ASSETS           
INTEREST EARNING ASSETS:           
Loans (1) (2)$2,224,401  $100,471  4.52% $1,420,802  $74,450  5.24%
Loans Held For Sale3,439  155  4.51% 11,012  47  0.43%
Securities:           
Investment Securities (Taxable)(4)75,977  1,587  2.09% 33,168  615  1.85%
Investment Securities (Tax-Exempt)(3)(4)637,333  34,981  5.49% 659,219  36,263  5.50%
Mortgage-backed Securities (4)1,432,087  33,661  2.35% 1,056,095  28,207  2.67%
Total Securities2,145,397  70,229  3.27% 1,748,482  65,085  3.72%
FHLB stock and other investments, at cost46,584  298  0.64% 28,684  181  0.63%
Interest Earning Deposits39,533  101  0.26% 54,853  139  0.25%
Total Interest Earning Assets4,459,354  171,254  3.84% 3,263,833  139,902  4.29%
NONINTEREST EARNING ASSETS:           
Cash and Due From Banks52,400      43,342     
Bank Premises and Equipment110,704      55,680     
Other Assets265,851      133,641     
Less: Allowance for Loan Loss(16,621)     (17,177)    
Total Assets$4,871,688      $3,479,319     
LIABILITIES AND SHAREHOLDERS' EQUITY           
INTEREST BEARING LIABILITIES:           
Savings Deposits$232,385  233  0.10% $121,453  136  0.11%
Time Deposits845,882  5,512  0.65% 610,178  4,287  0.70%
Interest Bearing Demand Deposits1,648,416  4,417  0.27% 1,231,711  3,530  0.29%
Total Interest Bearing Deposits2,726,683  10,162  0.37% 1,963,342  7,953  0.41%
Short-term Interest Bearing Liabilities384,694  1,250  0.32% 64,160  624  0.97%
Long-term Interest Bearing Liabilities – FHLB Dallas540,600  6,987  1.29% 497,296  6,955  1.40%
Long-term Debt (5)60,311  1,455  2.41% 60,311  1,424  2.36%
Total Interest Bearing Liabilities3,712,288  19,854  0.53% 2,585,109  16,956  0.66%
NONINTEREST BEARING LIABILITIES:           
Demand Deposits679,346      576,770     
Other Liabilities41,627      29,672     
Total Liabilities4,433,261      3,191,551     
SHAREHOLDERS' EQUITY438,427      287,768     
Total Liabilities and Shareholders' Equity$4,871,688      $3,479,319     
NET INTEREST INCOME  $151,400      $122,946   
NET INTEREST MARGIN ON AVERAGE EARNING ASSETS    3.40%     3.77%
NET INTEREST SPREAD    3.31%     3.63%
              

(1) Interest on loans includes net fees on loans that are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $4,209 and $3,899 for the years ended December 31, 2015 and 2014, respectively.
(3) Interest income includes taxable-equivalent adjustments of $12,513 and $12,225 for the years ended December 31, 2015 and 2014, 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 December 31, 2015 and 2014, loans on nonaccrual status totaled $20,526 and $4,096, 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.

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