OmniAmerican Bancorp Inc., the holding company for OmniAmerican Bank, reported Aug. 1 net income of $898,000 for the second quarter ended June 30, 2014, an increase of $224,000, or 33.2 percent, compared with the second quarter of 2013.
On a per share basis, earnings were 8 cents per diluted share compared with 6 cents per diluted share for the second quarter of 2013.
According to the Fort Worth-based bank, the primary contributors to the increase in net income were a $531,000 increase in noninterest income, a $505,000 increase in net interest income, and a $375,000 decrease in the provision for loan losses.
The increase in noninterest income was primarily attributable to increases of $348,000 in net gains on sales of investments and $159,000 in net gains on sales of loans. These increases in net income were partially offset by a $1.1 million increase in noninterest expense, resulting primarily from $825,000 of expenses related to OmniAmerican’s pending merger with Southside Bancshares Inc. incurred during the second quarter of 2014.
As previously announced in April, OmniAmerican Bancorp (OABC) entered into a definitive agreement to merge with Southside Bancshares Inc., headquartered in Tyler, Texas, in a stock swap deal valued at about $307 million. Upon completion of the merger, the company will operate under the Southside name and brand. The transaction is expected to be completed during the fourth quarter of 2014, subject to shareholder and regulatory approval and other customary closing conditions.
The combined company will have nearly $5 billion in assets and become the ninth-largest bank headquartered in Texas, by deposits.
OmniAmerican said commercial and mortgage loan growth continued with increases of $9.1 million, or 13.1 percent, in commercial business loans, $6.7 million, or 6.3 percent, in commercial real estate loans, and $6.5 million, or 2.5 percent, in one- to four-family residential real estate loans. The growth in these portfolios was primarily offset by a $60.2 million decrease in indirect automobile loans resulting from the discontinuation of the bank’s indirect lending program in October 2013.
Due to the decrease in the indirect automobile loans, total loans decreased $40.8 million, or 4.9 percent, to $784.1 million at June 30, 2014, from $824.9 million at Dec. 31, 2013.
Total assets for OABC decreased $14.5 million to $1.38 billion as of June 30, from $1.39 billion on Dec. 31, 2013, primarily due to a $40.8 million decrease in loans, net of the allowance for loan losses and deferred fees and discounts, partially offset by a $27.2 million increase in securities classified as available for sale.
“OmniAmerican’s loan growth in commercial business, commercial real estate and mortgage loans continues to be our primary strategic focus and we have achieved steady progress in these areas,” said Tim Carter, president and CEO of OmniAmerican Bank and OABC, in a news release. “The decrease in our indirect automobile loans is aligned with our expectations for exiting this line of business. Unfunded commercial loan commitments have increased and commercial loan activity has been robust. We intend to continue our strategic focus in these areas as we complete our merger with Southside Bank.”
OmniAmerican Bancorp Inc. is traded on the NASDAQ Global Select Market under the symbol OABC. OmniAmerican Bank operates 14 full-service branches in the Dallas-Fort Worth area.