Toggle SGML Header (+)


Section 1: 425 (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 24, 2019
LEGACYTEXAS FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Maryland
 
001-34737
 
27-2176993
(State or other Jurisdiction of Incorporation)
 
(Commission File No.)
 
(I.R.S. Employer Identification No.)
5851 Legacy Circle, Plano, Texas
 
 
 
75024
(Address of principal executive offices)
 
 
 
(Zip Code)
Registrant’s telephone number, including area code: (972) 578-5000
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
x
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Trading Symbol
 
Name of Each Exchange on Which Registered
 
 
 
 
 
Common Stock, par value $0.01 per share
 
LTXB
 
Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).    
Emerging growth company o
 
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 






ITEM 2.02
Results of Operations and Financial Condition
On July 24, 2019, the Registrant announced second quarter 2019 earnings. The press release is attached to this report as Exhibit 99.1, which is incorporated herein by reference.
ITEM 8.01
Other Events
The information set forth in Item 2.02 above, including the contents of the press release attached as Exhibit 99.1, is incorporated by reference into this Item 8.01.
On July 24, 2019, the Registrant issued a press release announcing the declaration of a quarterly cash dividend of $0.25 per share, payable on August 19, 2019, to stockholders of record as of the close of business on August 5, 2019. The press release is attached to this report as Exhibit 99.2, which is incorporated herein by reference.
ITEM 9.01
Financial Statements and Exhibits
(d)
Exhibits
Exhibit 99.1
Exhibit 99.2
 
 






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 hereunto duly authorized.
 
 
 
LEGACYTEXAS FINANCIAL GROUP, INC.
 
 
 
 
Date:
July 24, 2019
By:
/s/ J. Mays Davenport
 
 
 
J. Mays Davenport, Executive Vice President and Chief Financial Officer



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
EXHIBIT 99.1

398858855_pressreleaselogo.jpg
FOR IMMEDIATE RELEASE
July 24, 2019
Contact: Investor Inquiries:
Kimberly Whitaker
972-801-5871/[email protected]
Media Inquiries:
Jennifer Dexter
972-461-7157/[email protected]

LegacyTexas Financial Group, Inc. Reports Second Quarter 2019 Earnings

PLANO, Texas, July 24, 2019 -- LegacyTexas Financial Group, Inc. (Nasdaq: LTXB) (the “Company”), the holding company for LegacyTexas Bank (the “Bank”), today announced net income of $27.0 million for the second quarter of 2019, a decrease of $2.1 million from the first quarter of 2019 and a decrease of $854,000 from the second quarter of 2018. Core (non-GAAP) net income totaled $28.8 million for the second quarter of 2019, down $231,000 from the first quarter of 2019 and up $886,000 from the second quarter of 2018. See “Supplemental Information- Non-GAAP Financial Measures” at the end of this document.

On June 17, 2019, the Company and Prosperity Bancshares, Inc.® (“Prosperity”) jointly announced the signing of a definitive merger agreement pursuant to which the Company will merge with Prosperity. Under the terms of the merger agreement, shareholders of the Company will receive 0.5280 shares of Prosperity common stock and $6.28 cash for each share of Company common stock. The completion of the transaction is subject to certain conditions, including the approval by the Company shareholders and Prosperity shareholders and customary regulatory approvals. For additional information regarding the Company’s proposed merger with Prosperity, see the Company’s Current Report filed on Form 8-K with the SEC on June 17, 2019.

“We continue to grow our franchise and serve our customers and communities,” said President and CEO Kevin Hanigan. “We grew loans by $581.9 million (including Warehouse Purchase Program) in the second quarter, while our non-interest-bearing deposits grew by $94.5 million. Additionally, the talented bankers at both LegacyTexas and Prosperity Bank have begun the process of preparing for the merger of the two banks, which we hope to consummate in the fourth quarter of 2019.”

Second Quarter 2019 Performance Highlights

Assets of $9.94 billion generated basic earnings per share for the second quarter of 2019 of $0.57 on a GAAP basis and $0.61 on a core (non-GAAP) basis.*

Gross loans held for investment at June 30, 2019, excluding Warehouse Purchase Program loans, grew $135.3 million, or 1.9%, from March 31, 2019, which includes linked-quarter increases in all loan portfolios.

Warehouse Purchase Program loans at June 30, 2019 grew $446.5 million, or 40.7%, from March 31, 2019.

The balance of non-interest-bearing demand deposits at June 30, 2019 increased by $94.5 million, or 5.4%, from March 31, 2019, while the average balance of these deposits for the second quarter of 2019 grew by $123.1 million, or 7.3%, compared to the linked quarter.

Net interest income totaled $85.6 million for the second quarter of 2019, an increase of $4.4 million, or 5.4%, from the quarter ended March 31, 2019.

*See the section labeled “Supplemental Information- Non-GAAP Financial Measures” at the end of this document.

1


Financial Highlights
 
At or For the Quarters Ended
(unaudited)
June 30, 2019
 
March 31, 2019
 
June 30, 2018
 
(Dollars in thousands, except per share amounts)
Net interest income
$
85,554

 
$
81,164

 
$
83,929

Provision for credit losses
16,100

 
9,800

 
17,478

Non-interest income
12,232

 
9,894

 
10,852

Non-interest expense
47,526

 
44,307

 
42,191

Income tax expense
7,177

 
7,871

 
7,275

Net income
$
26,983

 
$
29,080

 
$
27,837

 
 
 
 
 
 
Basic earnings per common share
$
0.57

 
$
0.61

 
$
0.59

Basic core (non-GAAP) earnings per common share1
$
0.61

 
$
0.62

 
$
0.59

Weighted average common shares outstanding - basic
47,383,314

 
47,246,282

 
47,000,405

Estimated Tier 1 common equity risk-based capital ratio2
10.48
%
 
10.92
%
 
9.78
%
Total equity to total assets
11.50
%
 
12.00
%
 
10.83
%
Tangible common equity to tangible assets - Non-GAAP1
9.88
%
 
10.28
%
 
9.07
%
1 
See the section labeled “Supplemental Information - Non-GAAP Financial Measures” at the end of this document.
2 
Calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve.

Basic earnings per share for the quarter ended June 30, 2019 was $0.57, a decrease of $0.04 from the first quarter of 2019 and a decrease of $0.02 from the second quarter of 2018. Basic core (non-GAAP) earnings per share for the second quarter of 2019 was $0.61, a decrease of $0.01 from the first quarter of 2019 and an increase of $0.02 from the second quarter of 2018.

Net Interest Income and Net Interest Margin
 
For the Quarters Ended
(unaudited)
June 30, 2019
 
March 31, 2019
 
June 30, 2018
Interest income:
(Dollars in thousands)
Loans held for investment, excluding Warehouse Purchase Program loans 
$
92,903

 
$
91,360

 
$
86,105

Warehouse Purchase Program loans
14,927

 
8,771

 
12,137

Loans held for sale
324

 
170

 
328

Securities
4,553

 
4,526

 
4,324

Interest-earning deposit accounts
1,370

 
1,277

 
1,097

Total interest income
$
114,077

 
$
106,104

 
$
103,991

Net interest income
$
85,554

 
$
81,164

 
$
83,929

Net interest margin
3.77
%
 
3.89
%
 
3.93
%
Selected average balances:
 
 
 
 
 
Total earning assets
$
9,091,192

 
$
8,433,085

 
$
8,566,131

Total loans held for investment
8,158,810

 
7,528,531

 
7,636,235

Total securities
668,948

 
670,599

 
667,183

Total deposits
7,134,996

 
6,754,156

 
6,859,944

Total borrowings
1,101,559

 
882,061

 
1,018,945

Total non-interest-bearing demand deposits
1,812,042

 
1,688,937

 
1,694,082

Total interest-bearing liabilities
6,424,513

 
5,947,280

 
6,184,807


Net interest income for the quarter ended June 30, 2019 was $85.6 million, a $4.4 million, or 5.4%, increase from the first quarter of 2019 and a $1.6 million, or 1.9%, increase from the second quarter of 2018. The $4.4 million increase from the first quarter of 2019 was primarily driven by increased volume in Warehouse Purchase Program and commercial real estate loans

2


compared to the linked quarter. Interest income earned on Warehouse Purchase Program loans increased by $6.2 million from the first quarter of 2019, as the average balance increased by $529.2 million, which was partially offset by a 13 basis point decrease in the average yield earned compared to the first quarter of 2019. A $71.1 million increase in the average balance of the commercial real estate portfolio from the first quarter of 2019, as well as a three basis point increase in the average yield, resulted in a $1.6 million increase in interest income. Interest income earned on the construction and land portfolio increased by $254,000 from the first quarter of 2019, as the average balance increased by $9.5 million and the average yield increased by ten basis points, while interest income earned on the consumer real estate portfolio increased by $234,000, driven by a $30.5 million linked-quarter increase in the average balance. The average balance of commercial and industrial loans decreased by $2.2 million from the first quarter of 2019, resulting in a $573,000 decrease in interest income. Interest income on loans for the second quarter of 2019 included $237,000 in accretion of purchase accounting fair value adjustments on acquired loans, which primarily consisted of $61,000 on acquired commercial real estate loans, $43,000 on acquired commercial and industrial loans and $133,000 on acquired consumer loans.

The $1.6 million increase in net interest income compared to the second quarter of 2018 was primarily due to a $9.6 million increase in interest income on loans, which was driven by higher yields earned on all loan portfolios, with the exception of the other consumer loan portfolio and loans held for sale, as well as increased volume in all loan portfolios. The average balance of Warehouse Purchase Program loans increased by $178.0 million from the second quarter of 2018, while the average yield earned on this portfolio increased by 25 basis points, resulting in a $2.8 million increase in interest income compared to the second quarter of 2018. The average balance of consumer real estate loans increased by $169.1 million from the second quarter of 2018, while the average yield earned on this portfolio increased by 11 basis points, which led to a $2.4 million increase in interest income. A $64.0 million increase in the average balance of commercial real estate loans compared to the second quarter of 2018, as well as a 12 basis point increase in the average yield, resulted in a $1.8 million increase in interest income. The average balance of commercial and industrial loans increased by $83.3 million from the second quarter of 2018, while the average yield earned on this portfolio increased by ten basis points from the same period, resulting in a $1.7 million increase in interest income.

Interest expense for the quarter ended June 30, 2019 increased by $3.6 million, or 14.4%, compared to the linked quarter, which was primarily due to increases of $108.4 million and $94.0 million in the average balances of time and savings and money market deposits, respectively, compared to the first quarter of 2019, as well as an increase of $219.5 million in the average balance of borrowings. Additionally, higher average rates paid on savings, money market and time deposits also contributed to the linked-quarter increase in interest expense. A five basis point decrease in the average rate paid on interest-bearing demand deposits compared to the linked quarter partially offset a $55.4 million increase in the average balance of interest-bearing demand deposits. The average rate paid on borrowings decreased by 15 basis points from the first quarter of 2019, which partially offset the linked-quarter increase in interest expense related to the increase in average borrowing balances.

Compared to the second quarter of 2018, interest expense for the quarter ended June 30, 2019 increased by $8.5 million, or 42.2%, primarily due to higher average savings and money market, time deposit, and borrowing rates, as well as a $252.5 million increase in the average balance of time deposits. A 17 basis point decrease in the average rate paid on interest-bearing demand deposits compared to the second quarter of 2018, as well as a $99.0 million decrease in the average balance of these deposits, partially offset these year-over-year increases in interest expense. A 45 basis point increase in the average rate paid on borrowings compared to the second quarter of 2018, as well as an $82.6 million increase in the average balance, resulted in a $1.7 million year-over-year increase in interest expense on borrowed funds.

The net interest margin for the second quarter of 2019 was 3.77%, a 12 basis point decrease from the first quarter of 2019 and a 16 basis point decrease from the second quarter of 2018. The average yield on earning assets for the second quarter of 2019 was 5.03%, a six basis point decrease from the first quarter of 2019 and a 16 basis point increase from the second quarter of 2018. The cost of deposits for the second quarter of 2019 was 1.15%, up six basis points from the linked quarter and up 35 basis points from the second quarter of 2018.

Non-interest Income

Non-interest income for the second quarter of 2019 was $12.2 million, a $2.3 million, or 23.6%, increase from the first quarter of 2019 and a $1.4 million, or 12.7%, increase from the second quarter of 2018. Service charges and other fees increased by $2.6 million compared to the first quarter of 2019, primarily resulting from higher title company income and commercial loan fee income (consisting of syndication, arrangement, non-usage and pre-payment fees), as well as increased debit card interchange and Warehouse Purchase Program income. Net gains on the sale of mortgage loans held for sale during the second quarter of 2019 increased by $1.4 million compared to the linked quarter, which included gains recognized on $74.8 million of consumer real estate loans that were sold or committed for sale, fair value changes on mortgage derivatives and mortgage fees collected during the second quarter of 2019, compared to $32.6 million for the first quarter of 2019. Other non-interest income

3


for the second quarter of 2019 included a $1.2 million net decrease in the value of investments in community development-oriented private equity funds used for Community Reinvestment Act purposes (the “CRA Funds”), down from a $21,000 net increase in the CRA Funds for the first quarter of 2019, as well as a $366,000 interest payment received from the Internal Revenue Service in the first quarter of 2019 related to a prior year tax refund, with no comparable payment received in the second quarter of 2019.

The $1.4 million increase in non-interest income from the second quarter of 2018 was primarily due to a $1.2 million increase in net gains on the sale of mortgage loans held for sale, related to $74.8 million of consumer real estate loans that were sold or committed for sale, fair value changes on mortgage derivatives and mortgage fees collected during the 2019 period, compared to $50.8 million for the 2018 period. Service charges and other fees increased by $1.0 million from the second quarter of 2018, which was driven by higher title company income and commercial loan fee income (consisting of syndication, arrangement, non-usage and pre-payment fees), as well as increased debit card interchange income. Other non-interest income for the second quarter of 2019 included a $1.2 million net decrease in the CRA Funds, down from a $15,000 net decrease in the CRA Funds for the second quarter of 2018.
   
Non-interest Expenses

Non-interest expense for the second quarter of 2019 was $47.5 million, up $3.2 million, or 7.3%, from the first quarter of 2019 and up $5.3 million, or 12.6%, from the second quarter of 2018. The second quarter of 2019 included $2.4 million in merger costs with no comparable charges in the first quarter of 2019, related to the proposed merger with Prosperity, which was announced on June 17, 2019. Outside professional services expense for the second quarter of 2019 increased by $389,000 from the first quarter of 2019, primarily due to higher legal expenses, while other non-interest expense increased by $371,000 from the linked quarter, primarily due to higher lending and recruiting expenses. These linked-quarter increases in non-interest expense were partially offset by a $285,000 decline in salaries and employee benefits expense from the first quarter of 2019, which was driven by lower share-based compensation expense in the second quarter of 2019 related to fluctuations in the Company’s share price, as well as decreased payroll taxes related to Social Security wage base limits starting over at the beginning of the year, which increased salary expense in the first quarter of 2019. Additionally, in the second quarter of 2019, deferred salary costs related to loan originations that will be accounted for over the lives of the related loans increased compared to the linked quarter, which lowered salary expense for the current period.

The $5.3 million increase in non-interest expense from the second quarter of 2018 was primarily due to $2.4 million in merger costs with no comparable charges in the second quarter of 2018, related to the above-mentioned proposed merger with Prosperity, as well as a $2.3 million increase in salaries and employee benefits expense, which was primarily related to higher mortgage commissions paid in the 2019 period attributable to increased mortgage loan production, as well as higher share-based compensation expense in the 2019 period related to fluctuations in the Company’s share price. Additionally, merit increases granted in the 2019 period also contributed to the increased salary expense compared to the second quarter of 2018. Data processing expense increased by $594,000 from the second quarter of 2018 due to system upgrades, technology refreshments and outsourcing certain segments of its data processing. These increases in non-interest expense compared to the 2018 period were partially offset by a $376,000 decrease in advertising expense, primarily due to a lower number of events, media advertisements and sponsorships in the second quarter of 2019.

Financial Condition - Loans

Gross loans held for investment at June 30, 2019, excluding Warehouse Purchase Program loans, grew $135.3 million from March 31, 2019, which included growth in all loan portfolios. At June 30, 2019, commercial real estate and consumer real estate loans increased by $57.9 million and $37.3 million, respectively, from March 31, 2019, while commercial and industrial and construction and land loans increased by $32.2 million and $6.0 million, respectively, for the same period.

Compared to June 30, 2018, gross loans held for investment at June 30, 2019, excluding Warehouse Purchase Program loans, grew $408.9 million, which included growth in all loan portfolios. Consumer real estate and commercial real estate loans increased by $172.7 million and $159.4 million, respectively, at June 30, 2019, compared to June 30, 2018, while commercial and industrial loans increased by $51.0 million from the same date. Additionally, construction and land and other consumer loans increased by $22.7 million and $3.1 million, respectively, compared to June 30, 2018.

At June 30, 2019, Warehouse Purchase Program loans increased by $446.5 million compared to March 31, 2019 and by $251.6 million compared to June 30, 2018.

Reserve-based energy loans, which are secured by deeds of trust on properties containing proven oil and natural gas reserves and included in the Company’s commercial and industrial loan portfolio, totaled $518.6 million at June 30, 2019, up $18.8

4


million from $499.8 million at March 31, 2019 and up $31.8 million from $486.8 million at June 30, 2018. In addition to reserve-based energy loans, the Company has loans categorized as “Midstream and Other,” which are typically related to the transmission of oil and natural gas and would only be indirectly impacted by declining commodity prices. At June 30, 2019, “Midstream and Other” loans had a total outstanding balance of $20.6 million, down $1.5 million from $22.1 million at March 31, 2019 and down $8.1 million from $28.7 million at June 30, 2018.

Financial Condition - Deposits

Total deposits at June 30, 2019 decreased by $21.6 million from March 31, 2019. The growth in non-interest-bearing demand and savings and money market deposits of $94.5 million and $56.7 million, respectively, was more than offset by declines in time and interest-bearing demand deposits of $143.4 million and $29.5 million, respectively.

Compared to June 30, 2018, total deposits increased by $174.4 million, which included growth in non-interest-bearing demand and time deposits of $125.8 million and $91.9 million, respectively, while savings and money market and interest-bearing demand deposits decreased by $31.1 million and $12.3 million, respectively. At June 30, 2019, non-interest-bearing demand deposits totaled 26.2% of total deposits, compared to 25.0% of total deposits at June 30, 2018.
  
Credit Quality
 
At or For the Quarters Ended
(unaudited)
June 30, 2019
 
March 31, 2019
 
June 30, 2018
 
(Dollars in thousands)
Net charge-offs (recoveries)
$
1,434

 
$
(263
)
 
$
27,663

Net charge-offs (recoveries)/Average loans held for investment, excluding Warehouse Purchase Program loans
0.08
%
 
(0.02
)%
 
1.69
%
Net charge-offs (recoveries)/Average loans held for investment
0.07

 
(0.01
)
 
1.45

Provision for credit losses
$
16,100

 
$
9,800

 
$
17,478

Non-performing loans (“NPLs”)
62,056

 
61,028

 
19,610

NPLs/Total loans held for investment, excluding Warehouse Purchase Program loans
0.88
%
 
0.88
 %
 
0.29
%
NPLs/Total loans held for investment
0.72

 
0.76

 
0.25

Non-performing assets (“NPAs”)
$
62,640

 
$
61,810

 
$
26,951

NPAs to total assets
0.63
%
 
0.66
 %
 
0.29
%
NPAs/Loans held for investment and foreclosed assets, excluding Warehouse Purchase Program loans
0.88

 
0.89

 
0.40

NPAs/Loans held for investment and foreclosed assets
0.73

 
0.77

 
0.34

Allowance for loan losses
$
92,219

 
$
77,530

 
$
64,445

Allowance for loan losses/Total loans held for investment, excluding Warehouse Purchase Program loans
1.30
%
 
1.12
 %
 
0.97
%
Allowance for loan losses/Total loans held for investment
1.07

 
0.96

 
0.81

Allowance for loan losses/Total loans held for investment, excluding acquired loans & Warehouse Purchase Program loans1
1.35

 
1.16

 
1.02

Allowance for loan losses/NPLs
148.61

 
127.04

 
328.63

1 
Excludes loans acquired in previous bank acquisitions, which were initially recorded at fair value.

The Company recorded a provision for credit losses of $16.1 million for the quarter ended June 30, 2019, compared to $9.8 million for the quarter ended March 31, 2019 and $17.5 million for the quarter ended June 30, 2018. The increase in provision expense on a linked-quarter basis was primarily due to increased specific reserves allocated to the Company’s one remaining corporate healthcare finance relationship, which totaled $19.9 million at June 30, 2019, and the Company’s impaired energy loans, which totaled $19.9 million at June 30, 2019. These impaired corporate healthcare finance and energy loans have been included in the estimated pre-tax gross credit mark of $175.0 million that was disclosed as an assumption in the merger with Prosperity, as reported in the Company’s investor presentation filed under a Current Report on Form 8-K with the SEC on June 17, 2019.


5


The decrease in provision expense on a year-over-year basis was primarily due to decreased net charge-offs during the quarter ended June 30, 2019. Net charge-offs totaled $1.4 million for the three months ended June 30, 2019, compared to net charge-offs totaling $27.7 million for the three months ended June 30, 2018.


The below table shows criticized (rated “special mention”) and classified (rated “substandard” or “doubtful”) loans at June 30, 2019, March 31, 2019 and June 30, 2018.

 
June 30,
2019
 
March 31,
2019
 
June 30,
2018
 
Linked-Quarter
 Change
 
Year-over-Year
 Change
 
(Dollars in thousands)
Commercial real estate
$
18,074

 
$
20,561

 
$
25,540

 
$
(2,487
)
 
$
(7,466
)
Commercial and industrial, excluding energy
9,275

 
8,631

 
11,065

 
644

 
(1,790
)
Energy
44,644

 
48,434

 
24,975

 
(3,790
)
 
19,669

Consumer
2,711

 
2,761

 
1,501

 
(50
)
 
1,210

Total criticized (all performing)
$
74,704

 
$
80,387

 
$
63,081

 
$
(5,683
)
 
$
11,623

 
 
 
 
 
 
 
 
 
 
Commercial real estate
$
1,421

 
$
1,442

 
$
3,846

 
$
(21
)
 
$
(2,425
)
Commercial and industrial, excluding energy
869

 
1,000

 
1,234

 
(131
)
 
(365
)
Energy
70,775

 
46,095

 
28,804

 
24,680

 
41,971

Consumer
2,688

 
1,316

 
1,993

 
1,372

 
695

Total classified (performing)
75,753

 
49,853

 
35,877

 
25,900

 
39,876

 
 
 
 
 
 
 
 
 
 
Commercial real estate
7,293

 
6,623

 
3,656

 
670

 
3,637

Commercial and industrial, excluding energy
28,471

 
27,395

 
8,860

 
1,076

 
19,611

Energy
19,896

 
21,866

 
1,365

 
(1,970
)
 
18,531

Construction and land
228

 

 

 
228

 
228

Consumer
6,168

 
5,144

 
5,729

 
1,024

 
439

Total classified (non-performing)
62,056

 
61,028

 
19,610

 
1,028

 
42,446

 
 
 
 
 
 
 
 
 
 
Total classified loans
$
137,809

 
$
110,881

 
$
55,487

 
$
26,928

 
$
82,322


About LegacyTexas Financial Group, Inc.

LegacyTexas Financial Group, Inc. is the holding company for LegacyTexas Bank, a commercially oriented community bank based in Plano, Texas. LegacyTexas Bank operates 42 banking offices in the Dallas/Fort Worth Metroplex and surrounding counties. For more information, please visit www.LegacyTexasFinancialGroup.com or www.LegacyTexas.com.
This document and other filings by LegacyTexas Financial Group, Inc. (the Company) with the Securities and Exchange Commission (the SEC), as well as press releases or other public or stockholder communications released by the Company, may contain forward-looking statements, including, but not limited to, (i) statements regarding the financial condition, results of operations and business of the Company, (ii) statements about the Company’s plans, objectives, expectations and intentions and other statements that are not historical facts and (iii) other statements identified by the words or phrases “will likely result,“are expected to, “will continue, “is anticipated, “estimate, “project, “intends or similar expressions that are intended to identify “forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current beliefs and expectations of the Company’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.


6


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: the expected cost savings, synergies and other financial benefits from our proposed merger with Prosperity might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters might be greater than expected; the requisite shareholder and regulatory approvals and other closing conditions for the proposed merger of the Company and Prosperity may be delayed or may not be obtained or the merger agreement may be terminated; business disruption may occur following or in connection with the proposed merger of the Company and Prosperity; the Company's businesses may experience disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities; the diversion of managements' attention from ongoing business operations and opportunities as a result of the proposed merger or otherwise; changes in economic conditions; legislative changes; changes in policies by regulatory agencies; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company’s ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company’s market area; fluctuations in the price of oil, natural gas and other commodities; competition; changes in management’s business strategies; changes in the regulatory and tax environments in which the Company operates, including the impact of the “Tax Cuts and Jobs Act (the “TCJA) on the Company’s deferred tax asset, and the anticipated impact of the TCJA on the Company’s future earnings; and other factors set forth in the Company’s filings with the SEC.

The factors listed above could materially affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not undertake - and specifically declines any obligation - to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. When considering forward-looking statements, keep in mind these risks and uncertainties. Undue reliance should not be placed on any forward-looking statement, which speaks only as of the date made. Refer to the Company’s periodic and current reports filed with the SEC for specific risks that could cause actual results to be significantly different from those expressed or implied by any forward-looking statements.

Additional Information about the Merger and Where to Find It
In connection with the proposed merger of the Company into Prosperity, Prosperity will file with the SEC a registration statement on Form S-4 to register the shares of Prosperity Common Stock to be issued to the stockholders of the Company. The registration statement will include a joint proxy statement/prospectus which will be sent to the stockholders of the Company and Prosperity seeking their approval of the proposed transaction.
WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PROSPERITY, THE COMPANY AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov. Documents filed with the SEC by Prosperity will be available free of charge by directing a request by telephone or mail to Prosperity Bancshares, Inc., Prosperity Bank Plaza, 4295 San Felipe, Houston, Texas 77027 Attn: Investor Relations, (281) 269-7199 and documents filed with the SEC by the Company will be available free of charge by directing a request by telephone or mail to LegacyTexas Financial Group, Inc., 5851 Legacy Circle, Suite 1200, Plano, Texas 75024, (972) 578-5000.
Participants in the Solicitation
Prosperity, the Company and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Prosperity and stockholders of the Company in connection with the proposed transaction. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus regarding the proposed transaction when it becomes available. Additional information about Prosperity and its directors and executive officers may be found in the definitive proxy statement of Prosperity relating to its 2019 Annual Meeting of Shareholders filed with the SEC on March 14, 2019, and other documents filed by Prosperity with the SEC. Additional information about the Company and its directors and executive officers may be found in the definitive proxy statement of the Company relating to its 2019 Annual

7


Meeting of Stockholders filed with the SEC on April 12, 2019, and other documents filed by the Company with the SEC. These documents can be obtained free of charge from the sources described above.
No Offer or Solicitation
This communication is for informational purposes only and is not intended to and does not constitute an offer to subscribe for, buy or sell, or the solicitation of an offer to subscribe for, buy or sell, or an invitation to subscribe for, buy or sell any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, invitation, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.


8


LegacyTexas Financial Group, Inc. Consolidated Balance Sheets (unaudited)
(Dollars in thousands)
ASSETS
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Cash and due from financial institutions
$
56,949

 
$
55,472

 
$
60,416

 
$
64,681

 
$
60,104

Short-term interest-bearing deposits in other financial institutions
206,894

 
219,051

 
208,777

 
189,634

 
199,807

Total cash and cash equivalents
263,843

 
274,523

 
269,193

 
254,315

 
259,911

Securities available for sale, at fair value
459,749

 
479,426

 
471,746

 
455,454

 
445,613

Securities held to maturity
127,836

 
135,276

 
146,046

 
145,148

 
155,252

Total securities
587,585

 
614,702

 
617,792

 
600,602

 
600,865

Loans held for sale
46,571

 
11,380

 
23,193

 
22,175

 
33,548

Loans held for investment:
 
 
 
 
 
 
 
 
 
Loans held for investment - Warehouse Purchase Program
1,542,684

 
1,096,160

 
960,404

 
1,054,505

 
1,291,129

Loans held for investment
7,080,075

 
6,944,731

 
6,790,723

 
6,764,052

 
6,671,139

Gross loans
8,669,330

 
8,052,271

 
7,774,320

 
7,840,732

 
7,995,816

Less: allowance for loan losses and deferred fees on loans held for investment
(80,468
)
 
(66,712
)
 
(57,031
)
 
(56,499
)
 
(55,321
)
Net loans
8,588,862

 
7,985,559

 
7,717,289

 
7,784,233

 
7,940,495

FHLB stock and other restricted securities, at cost
79,195

 
56,044

 
56,226

 
60,596

 
66,061

Bank-owned life insurance
59,724

 
59,377

 
59,036

 
58,692

 
58,345

Premises and equipment, net
106,313

 
107,684

 
73,073

 
72,291

 
70,893

Goodwill
178,559

 
178,559

 
178,559

 
178,559

 
178,559

Other assets
71,853

 
69,624

 
79,974

 
73,504

 
73,957

Total assets
$
9,935,934

 
$
9,346,072

 
$
9,051,142

 
$
9,082,792

 
$
9,249,086

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
Non-interest-bearing demand
$
1,847,229

 
$
1,752,694

 
$
1,773,762

 
$
1,798,109

 
$
1,721,380

Interest-bearing demand
855,026

 
884,494

 
826,755

 
780,474

 
867,323

Savings and money market
2,548,966

 
2,492,226

 
2,455,787

 
2,562,399

 
2,580,017

Time
1,804,569

 
1,948,011

 
1,785,411

 
1,638,776

 
1,712,628

Total deposits
7,055,790

 
7,077,425

 
6,841,715

 
6,779,758

 
6,881,348

FHLB advances
1,384,765

 
820,084

 
825,409

 
932,317

 
1,065,941

Repurchase agreements
52,414

 
37,277

 
50,340

 
40,408

 
41,330

Subordinated debt
135,257

 
135,135

 
135,012

 
134,890

 
134,767

Accrued expenses and other liabilities
165,063

 
155,064

 
104,299

 
155,820

 
124,250

Total liabilities
8,793,289

 
8,224,985

 
7,956,775

 
8,043,193

 
8,247,636

Common stock
488

 
487

 
485

 
485

 
483

Additional paid-in capital
628,730

 
625,405

 
619,983

 
617,270

 
611,967

Retained earnings
523,693

 
508,887

 
491,948

 
444,848

 
409,765

Accumulated other comprehensive income (loss), net
860

 
(2,433
)
 
(6,658
)
 
(11,481
)
 
(9,109
)
Unearned Employee Stock Ownership Plan (ESOP) shares
(11,126
)
 
(11,259
)
 
(11,391
)
 
(11,523
)
 
(11,656
)
Total shareholders’ equity
1,142,645

 
1,121,087

 
1,094,367

 
1,039,599

 
1,001,450

Total liabilities and shareholders’ equity
$
9,935,934

 
$
9,346,072

 
$
9,051,142

 
$
9,082,792

 
$
9,249,086



9


LegacyTexas Financial Group, Inc.
Consolidated Quarterly Statements of Income (unaudited)
 
For the Quarters Ended
 
Second Quarter 2019 Compared to:
 
Jun 30,
2019
 
Mar 31,
2019
 
Dec 31,
2018
 
Sep 30,
2018
 
Jun 30,
2018
 
First Quarter
 2019
 
Second Quarter 2018
Interest and dividend income
 
(Dollars in thousands)
 
 
 
Loans, including fees
$
108,154

 
$
100,301

 
$
101,031

 
$
102,267

 
$
98,570

 
$
7,853

7.8
 %
 
$
9,584

9.7
 %
Taxable securities
3,460

 
3,602

 
3,463

 
3,254

 
3,132

 
(142
)
(3.9
)
 
328

10.5

Nontaxable securities
410

 
343

 
595

 
614

 
641

 
67

19.5

 
(231
)
(36.0
)
Interest-bearing deposits in other financial institutions
1,370

 
1,277

 
1,507

 
1,368

 
1,097

 
93

7.3

 
273

24.9

FHLB and Federal Reserve Bank stock and other
683

 
581

 
582

 
644

 
551

 
102

17.6

 
132

24.0

 
114,077

 
106,104

 
107,178

 
108,147

 
103,991

 
7,973

7.5

 
10,086

9.7

Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
20,444

 
18,215

 
16,634

 
15,077

 
13,732

 
2,229

12.2

 
6,712

48.9

FHLB advances
5,794

 
4,456

 
4,000

 
5,198

 
4,131

 
1,338

30.0

 
1,663

40.3

Repurchase agreements and other borrowings
2,285

 
2,269

 
2,245

 
2,205

 
2,199

 
16

0.7

 
86

3.9

 
28,523

 
24,940

 
22,879

 
22,480

 
20,062

 
3,583

14.4

 
8,461

42.2

Net interest income
85,554

 
81,164

 
84,299

 
85,667

 
83,929

 
4,390

5.4

 
1,625

1.9

Provision for credit losses
16,100

 
9,800

 

 
2,656

 
17,478

 
6,300

64.3

 
(1,378
)
(7.9
)
Net interest income after provision for credit losses
69,454

 
71,364

 
84,299

 
83,011

 
66,451

 
(1,910
)
(2.7
)
 
3,003

4.5

Non-interest income
 
 
 
 
 
 
 
 
 
 
 
 
Service charges and other fees
9,882

 
7,255

 
9,923

 
8,626

 
8,844

 
2,627

36.2

 
1,038

11.7

Net gain on sale of mortgage loans held for sale
2,879

 
1,525

 
1,499

 
1,597

 
1,668

 
1,354

88.8

 
1,211

72.6

Bank-owned life insurance income
489

 
482

 
482

 
482

 
479

 
7

1.5

 
10

2.1

Net gain (loss) on securities transactions

 
6

 

 
(10
)
 

 
(6
)
(100.0
)
 

Gain (loss) on sale and disposition of assets
18

 
(14
)
 
(56
)
 
977

 
(153
)
 
32

N/M
 
171

N/M
Other
(1,036
)
 
640

 
416

 
1,555

 
14

 
(1,676
)
N/M
 
(1,050
)
N/M
 
12,232

 
9,894

 
12,264

 
13,227

 
10,852

 
2,338

23.6

 
1,380

12.7


10


 
For the Quarters Ended
 
Second Quarter 2019 Compared to:
 
Jun 30,
2019
 
Mar 31,
2019
 
Dec 31,
2018
 
Sep 30,
2018
 
Jun 30,
2018
 
First Quarter
 2019
 
Second Quarter 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest expense
(Dollars in thousands)
 
Salaries and employee benefits
26,586

 
26,871

 
23,728

 
25,053

 
24,313

 
(285
)
(1.1
)
 
2,273

9.3

Merger costs
2,362

 

 

 

 

 
2,362

100.0

 
2,362

100.0

Advertising
982

 
903

 
1,301

 
824

 
1,358

 
79

8.7

 
(376
)
(27.7
)
Occupancy and equipment
3,950

 
3,899

 
3,843

 
3,960

 
3,980

 
51

1.3

 
(30
)
(0.8
)
Outside professional services
1,674

 
1,285

 
2,021

 
1,151

 
1,382

 
389

30.3

 
292

21.1

Regulatory assessments
831

 
618

 
886

 
750

 
731

 
213

34.5

 
100

13.7

Data processing
5,739

 
5,933

 
6,168

 
5,362

 
5,145

 
(194
)
(3.3
)
 
594

11.5

Office operations
2,568

 
2,335

 
2,249

 
2,232

 
2,224

 
233

10.0

 
344

15.5

Other
2,834

 
2,463

 
2,672

 
2,860

 
3,058

 
371

15.1

 
(224
)
(7.3
)
 
47,526

 
44,307

 
42,868

 
42,192

 
42,191

 
3,219

7.3

 
5,335

12.6

Income before income tax expense (benefit)
34,160

 
36,951

 
53,695

 
54,046

 
35,112

 
(2,791
)
(7.6
)
 
(952
)
(2.7
)
Income tax expense (benefit)
7,177

 
7,871

 
(4,074
)
 
11,225

 
7,275

 
(694
)
(8.8
)
 
(98
)
(1.3
)
Net income
$
26,983

 
$
29,080

 
$
57,769

 
$
42,821

 
$
27,837

 
$
(2,097
)
(7.2
)%
 
$
(854
)
(3.1
)%
N/M - Not meaningful


11


LegacyTexas Financial Group, Inc.
Selected Quarterly Financial Highlights (unaudited)
 
At or For the Quarters Ended
 
June 30,
2019
 
March 31,
2019
 
June 30,
2018
SHARE DATA:
(Dollars in thousands, except per share amounts)
Weighted average common shares outstanding - basic
47,383,314

 
47,246,282

 
47,000,405

Weighted average common shares outstanding - diluted
47,923,391

 
47,835,693

 
47,618,157

Shares outstanding at end of period
48,833,238

 
48,704,070

 
48,311,220

Income available to common shareholders1
$
26,837

 
$
28,955

 
$
27,770

Basic earnings per common share
0.57

 
0.61

 
0.59

Basic core (non-GAAP) earnings per common share2
0.61

 
0.62

 
0.59

Diluted earnings per common share
0.56

 
0.61

 
0.58

Dividends declared per share
0.25

 
0.25

 
0.16

Total shareholders’ equity
1,142,645

 
1,121,087

 
1,001,450

Common shareholders’ equity per share (book value per share)
23.40

 
23.02

 
20.73

Tangible book value per share - Non-GAAP2
19.74

 
19.35

 
17.03

Market value per share for the quarter:
 
 
 
 
 
High
41.22

 
43.88

 
43.92

Low
36.50

 
33.08

 
38.80

Close
40.71

 
37.39

 
39.02

KEY RATIOS:
 
 
 
 
 
Return on average common shareholders’ equity
9.52
%
 
10.50
%
 
11.20
%
Core (non-GAAP) return on average common shareholders’ equity2
10.18

 
10.50

 
11.25

Return on average assets
1.13

 
1.31

 
1.24

Core (non-GAAP) return on average assets2
1.21

 
1.31

 
1.24

Efficiency ratio (GAAP basis)
48.60

 
48.66

 
44.51

Core (non-GAAP) efficiency ratio2
46.19

 
48.66

 
44.44

Estimated Tier 1 common equity risk-based capital ratio3
10.48

 
10.92

 
9.78

Estimated total risk-based capital ratio3
12.97

 
13.39

 
12.14

Estimated Tier 1 risk-based capital ratio3
10.62

 
11.06

 
9.93

Estimated Tier 1 leverage ratio3
10.42

 
10.98

 
9.56

Total equity to total assets
11.50

 
12.00

 
10.83

Tangible equity to tangible assets - Non-GAAP2
9.88

 
10.28

 
9.07

Number of employees - full-time equivalent
883

 
875

 
847

1 
Net of distributed and undistributed earnings to participating securities.
2 
See the section labeled “Supplemental Information - Non-GAAP Financial Measures” at the end of this document.
3 
Calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve.



12



LegacyTexas Financial Group, Inc.
Selected Loan Data (unaudited)
 
At or for the Quarter Ended
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Loans held for investment:
(Dollars in thousands)
 
 
Commercial real estate
$
3,180,582

 
$
3,122,726

 
$
3,026,754

 
$
3,012,352

 
$
3,021,148

Warehouse Purchase Program
1,542,684

 
1,096,160

 
960,404

 
1,054,505

 
1,291,129

Commercial and industrial
2,102,917

 
2,070,715

 
2,057,791

 
2,111,510

 
2,051,955

Construction and land
288,491

 
282,463

 
270,629

 
278,278

 
265,745

Consumer real estate
1,460,417

 
1,423,095

 
1,390,378

 
1,318,038

 
1,287,703

Other consumer
47,668

 
45,732

 
45,171

 
43,874

 
44,588

Gross loans held for investment
$
8,622,759

 
$
8,040,891

 
$
7,751,127

 
$
7,818,557

 
$
7,962,268

Non-performing assets:
 
 
 
 
 
 
 
 
Commercial real estate
$
7,293

 
$
6,623

 
$
159

 
$
3,739

 
$
3,656

Commercial and industrial
48,367

 
49,261

 
16,710

 
7,178

 
10,225

Construction and land
228

 

 

 

 

Consumer real estate
6,144

 
5,123

 
5,506

 
6,617

 
5,652

Other consumer
24

 
21

 
46

 
50

 
77

Total non-performing loans
62,056

 
61,028

 
22,421

 
17,584

 
19,610

Foreclosed assets
584

 
782

 
1,333

 
698

 
7,341

Total non-performing assets
$
62,640

 
$
61,810

 
$
23,754

 
$
18,282

 
$
26,951

Total non-performing assets to total assets
0.63
%
 
0.66
%
 
0.26
%
 
0.20
%
 
0.29
%
Total non-performing loans to total loans held for investment, excluding Warehouse Purchase Program loans
0.88
%
 
0.88
%
 
0.33
%
 
0.26
%
 
0.29
%
Total non-performing loans to total loans held for investment
0.72
%
 
0.76
%
 
0.29
%
 
0.22
%
 
0.25
%
Allowance for loan losses to non-performing loans
148.61
%
 
127.04
%
 
300.74
%
 
377.35
%
 
328.63
%
Allowance for loan losses to total loans held for investment, excluding Warehouse Purchase Program loans
1.30
%
 
1.12
%
 
0.99
%
 
0.98
%
 
0.97
%
Allowance for loan losses to total loans held for investment
1.07
%
 
0.96
%
 
0.87
%
 
0.85
%
 
0.81
%
Allowance for loan losses to total loans held for investment, excluding acquired loans and Warehouse Purchase Program loans 1
1.35
%
 
1.16
%
 
1.04
%
 
1.03
%
 
1.02
%

13


 
At or for the Quarter Ended
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Troubled debt restructured loans (“TDRs”):
(Dollars in thousands)
 
 
Performing TDRs:
 
 
 
 
 
 
 
 
 
Commercial real estate
$
132

 
$
134

 
$
136

 
$
139

 
$
141

Consumer real estate
704

 
722

 
788

 
786

 
561

Other consumer
1

 
1

 
2

 
4

 
9

Total performing TDRs
$
837

 
$
857

 
$
926

 
$
929

 
$
711

Non-performing TDRs:2
 
 
 
 
 
 
 
 
Commercial real estate
$
27

 
$
29

 
$
31

 
$
3,605

 
$
33

Commercial and industrial
7,870

 
7,999

 
661

 
2,299

 
2,095

Consumer real estate
1,037

 
447

 
467

 
495

 
789

Other consumer
4

 
4

 
1

 
2

 
7

Total non-performing TDRs
$
8,938

 
$
8,479

 
$
1,160

 
$
6,401

 
$
2,924

Allowance for loan losses:
 
 
 
 
 
 
 
Balance at beginning of period
$
77,530

 
$
67,428

 
$
66,354

 
$
64,445

 
$
74,508

Provision expense for loans
16,123

 
9,839

 

 
2,700

 
17,600

Charge-offs
(1,624
)
 
(359
)
 
(2,590
)
 
(922
)
 
(27,737
)
Recoveries
190

 
622

 
3,664

 
131

 
74

Balance at end of period
$
92,219

 
$
77,530

 
$
67,428

 
$
66,354

 
$
64,445

Net charge-offs (recoveries):
 
 
 
 
 
 
Commercial real estate
$

 
$

 
$

 
$

 
$
236

Commercial and industrial
1,236

 
(463
)
 
(1,355
)
 
537

 
27,261

Consumer real estate
(4
)
 
3

 
37

 
47

 
(9
)
Other consumer
202

 
197

 
244

 
207

 
175

Total net charge-offs (recoveries)
$
1,434

 
$
(263
)
 
$
(1,074
)
 
$
791

 
$
27,663

Allowance for off-balance sheet lending-related commitments
 
 
 
 
Provision expense (benefit) for credit losses
$
(23
)
 
$
(39
)
 
$

 
$
(44
)
 
$
(122
)
1 
Excludes loans acquired in previous bank acquisitions, which were initially recorded at fair value.
2 
Non-performing TDRs are included in the non-performing assets reported above.

14


LegacyTexas Financial Group, Inc.
Average Balances and Yields/Rates (unaudited)
 
For the Quarters Ended
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Loans:
(Dollars in thousands)
Commercial real estate
$
3,119,147

 
$
3,048,087

 
$
2,977,919

 
$
3,016,889

 
$
3,055,139

Warehouse Purchase Program
1,253,262

 
724,070

 
864,012

 
1,097,879

 
1,075,262

Commercial and industrial
2,085,820

 
2,088,056

 
2,024,676

 
2,088,318

 
2,002,490

Construction and land
286,163

 
276,642

 
272,631

 
271,829

 
260,560

Consumer real estate
1,434,812

 
1,404,292

 
1,327,912

 
1,295,353

 
1,265,751

Other consumer
47,014

 
45,339

 
44,559

 
44,508

 
43,779

Less: deferred fees and allowance for loan loss
(67,408
)
 
(57,955
)
 
(56,899
)
 
(55,974
)
 
(66,746
)
Total loans held for investment
8,158,810

 
7,528,531

 
7,454,810

 
7,758,802

 
7,636,235

Loans held for sale
30,572

 
15,347

 
24,279

 
26,121

 
29,378

Securities
668,948

 
670,599

 
667,939

 
678,483

 
667,183

Overnight deposits
232,862

 
218,608

 
266,434

 
272,670

 
233,335

Total interest-earning assets
$
9,091,192

 
$
8,433,085

 
$
8,413,462

 
$
8,736,076

 
$
8,566,131

Deposits:
 
 
 
 
 
 
 
 
 
Interest-bearing demand
$
855,948

 
$
800,557

 
$
775,921

 
$
760,889

 
$
954,960

Savings and money market
2,581,816

 
2,487,833

 
2,532,732

 
2,654,990

 
2,578,205

Time
1,885,190

 
1,776,829

 
1,703,421

 
1,683,475

 
1,632,697

FHLB advances and other borrowings
1,101,559

 
882,061

 
851,084

 
1,154,079

 
1,018,945

Total interest-bearing liabilities
$
6,424,513

 
$
5,947,280

 
$
5,863,158

 
$
6,253,433

 
$
6,184,807

 
 
 
 
 
 
 
 
 
 
Total assets
$
9,540,365

 
$
8,891,059

 
$
8,850,435

 
$
9,167,607

 
$
8,996,036

Non-interest-bearing demand deposits
$
1,812,042

 
$
1,688,937

 
$
1,778,681

 
$
1,752,095

 
$
1,694,082

Total deposits
$
7,134,996

 
$
6,754,156

 
$
6,790,754

 
$
6,851,449

 
$
6,859,944

Total shareholders’ equity
$
1,134,001

 
$
1,107,719

 
$
1,062,331

 
$
1,022,032

 
$
994,574

 
 
 
 
 
 
 
 
 
 

15


 
For the Quarters Ended
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Yields/Rates:
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
Commercial real estate
5.21
%
 
5.18
%
 
5.20
%
 
5.15
%
 
5.09
%
Warehouse Purchase Program
4.78
%
 
4.91
%
 
4.81
%
 
4.68
%
 
4.53
%
Commercial and industrial
5.81
%
 
5.98
%
 
6.00
%
 
5.78
%
 
5.71
%
Construction and land
6.13
%
 
6.03
%
 
5.87
%
 
5.41
%
 
5.35
%
Consumer real estate
4.77
%
 
4.81
%
 
4.81
%
 
4.67
%
 
4.66
%
Other consumer
5.66
%
 
5.88
%
 
5.80
%
 
5.81
%
 
5.74
%
Total loans held for investment
5.30
%
 
5.38
%
 
5.37
%
 
5.22
%
 
5.16
%
Loans held for sale
4.25
%
 
4.43
%
 
4.71
%
 
4.52
%
 
4.46
%
Securities
2.72
%
 
2.70
%
 
2.78
%
 
2.66
%
 
2.59
%
Overnight deposits
2.36
%
 
2.37
%
 
2.24
%
 
1.99
%
 
1.89
%
Total interest-earning assets
5.03
%
 
5.09
%
 
5.06
%
 
4.92