Download Texas Bancorp, Inc. Ownership & Shareholding Info as of Dec 31, 2017 and more Lecture notes Accounting in PDF only on Docsity!
FR Y- OMB Number 7100- Appoval expirB Norember 30, 2019 Pa€,e1o,
Board of Governorc of the Federal Reserve System
Annual Report of Holding Companies-FR (^022076)
Report at the close of business as of the end of fiscal year
This Report is requircd by law: Section 5(c)(1)(A) of the Bank This report form is to be filed by all toptier bank holding oompa- Holding Company Ad (12 U.S.C. (^) $ 1&04(c)(1)(A)); sections 8(a) nies, toptier savings and loan hotding companies, and U.S. inter-
and13(a)ofthelntemdionalBankirgAd(12 U.S.C.SS3106(a) mediate holding cornpanies organized under U.S. laur, and by
and 3108(a)); sections 11(a)(1), 25, and 25A of the Federal arry forcign banking organization that does not meet the reguire- Reserve Act (12^ U.S.C. (^) $$ 248(a)(1), 602, and 611a); and sec- ments of and is not treated as a qualiffing foreign banking orga- tions113,165,312,618,and809of theDodd-FrankAct(12U.S.C. nization under Section 211.23 of Regulation K (12 C.F.R. (^) S SS 5361,^ 5365,^ 5412, 1850a(cXl), and 5a68(bX1)).^ Retum^ to^ the^ 211.23). (See page^ one^ of^ the general^ instructions^ for^ more detail appropriate Federal Reserve Bank the or[inal and the number of of who must file.) The Federal Reserve may not conduct or spon- copiesspecineo il'#f"el::?f,1?,iJ"[:l",Hiff"]5'#'lff:*ff"BJrfHiil OMB control number. NOTE:The Annual Repoft of Holding hmpanies must be signed by one director of the toptier holding company. This individual should also be a senior ofiicial of the toptier holding company. ln the event that the toptier holding company does not have an individual who is a senior official and is also a diredor, the chairman of the board must sign the report. lf the holding company is an ESOP/ESOT formed as
a corporation or is an LLC, see the General lnstructions for the
authorized individual who must sign the report. l, (^) Gary Cox
Date of Report (toptier holding company's fiscal year-end):
December 31 2017
Narne of the Houing Company Director and Ofiicial
President / Director
Texas BancorD, lnc.
fiile of the Holding Company Director and Oficial attest that lhe Annual Repoft of Holding Companies (including the supporting attachments) for^ this repoil^ date has been pre. pared in conformance with the instructions issued by the Federal
Reserve System and are true and conect to the best of my
knowledge and belief. Wth respect to information rcgading individuals contained in this report, the Reporter ceftil?es fhat it has the authoity to provide this information to the Federal Reserve. The Repofter a/so cerflfes that it has the authority, m behalf of each individual, to consent or
object to public rclease of information regarding that individual.
The Fedenl Reserue may assume, in the absence of a rcquest for conftdential treatment submitted in acmrdance with the Boad's "Rules Regarding Availability of lnformation," 12 C.F.R. Paft 261,
Legal Title of Holding Company 2201 Sherwood Way (Mailing Address of the Holding Company) Street / P.O. Box San Angelo 76901
that the Reporter and individual consent to public^ release of all Area code / FAX Number details report (^) marks@txbank.com E-mailAddress Director Offcial (^) www txbank.com 7 t2018 (^) Address (URL) for the Holding Company's web page DaE of
For Federal Reserue Bank Use Only RSSD ID c.l.
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O'lfice of irdlagerEnt and Br/dg6t Pap€riiork Reductbn Ploilct (71fix)294,^ t/ttashington, DC 205m. 03,/
Month / Day /Year none Reporte/s Legal Entity ldentifier^ (LEl) (2o-Characbr^ LEI Code) Reportefs Name, Street, and Mailing Address
TX
City State^ Zip^ Code
Physical Location (if difierent^ from^ mailing address) Person to whom questions^ about this report should be directed Mark Stevenson Controller Narne Trte 325-944- Area Code / Phone Number / Extensbn
Forholding mmpanies not rcgistercdwiththe SEG
lndiete status of Annual Repoil to Shareholderc: E is inauoeo with the FR Y€ report
EI will^ be sent under separate^ cover
E is not prepared
0=No 1=Yes (^0)
ls confidential treatrnent rcquested for any portion^ of this report submission? ......... ln accordance with the General lnsfudbns brthis repot (cfieck only one),
- a letter justifing^ this request is being provided along with the rcport..........
- (^) a letter justrting (^) this request has been provided (^) separately ... NOTE: lnformaton brwhicfr confidential beatnent is being requested must be provided separately and labeled as "confidential."
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Current ShareholdeE with ownership, control or holdings of 5% or more of the power to vote as of December 31, (1 (^) Xa) Name / City, State
(1 (^) )(b) Country of Citizenshio
(1 (^) Xc) Number and Percentage (^) of each class of votino securities McLauohlin Family J, Mark McLaughlin San Angelo, Texas
USA 't4,069 shares - 11.99% common stock Brian Thomas McLaughlin Midland, Texas
USA (^) 9,910 shares - 8.45% common stock J. Matthew McLaughlin Fort Worth, Texas
USA 9,832 shares - 8.38% common stock Laure McLaughlin Austin, Texas
USA 9,933 shares - (^) 8. common stock Evelyn McLaughlin Davies Lubbock, Texas
USA (^) 8,820 shares - 7.52% common stock Stuart Andrew McLaughlin Fort Worth, Texas
USA 900 shares - 0.77% common stock Sara Carolyn McLaughlin Fort Worth, Texas
USA (^) 900 shares - 0.77% common stock Blake Thomas McLaughlin Midland, Texas
USA 900 shares -^ 0.770lo common stock Anna Elizabeth McLaughlin Midland, Texas
USA 900 shares - 0.77% common stock Claire Augusta McLaughlin Midland, Texas
USA 900 shares - 0.77% common stock Emily Claire McLaughlin Fort Worth, Texas
USA 900 shares - 0,77% common stock Barbara Riddle Fendley Paris, Texas
USA 2,425 shares - 2.07o/o common stock Mitzi Riddle Barker Santa Fe, New Mexico
USA 2,424 sharcs - 2.07Vo common stock David Riddle Farmers Branch, Texas
USA 2,424 shares -^ 2.07o/o common stock McLaughlin Family Total 65,237 shares - 55.64% Millspauoh Familv Sara Millspaugh lngram San Angelo, Texas
USA 9,1 16 shares - 7.77% common stock
Marguerite Gunn Miller New Braunfels, Texas
USA 3,077 shares - 2.62% common stock
Virginia G Young Comfort, Texas
USA 3,056 shares - 2.61% common stock
Rick Young Boerne, Texas
20 shares - 0.02% common stock Millspaugh Family Total
USA
15,269 (^) sharos - 13.02o/c
Form FR Y Texas BanGorp, ln, San Angelo, Texas Fiscal Year Ending December 31, 2016 Report ltom 3: Shareholders
dff:ffiT
or or December 7 Country of Number and Percentage^ of each class of securities
Name / Address
(
7,276 shares - 6.20% common stock
Jean Mclaughlin Kahle USA Fort Worth, Texas
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CONSOLIDATED FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR'S REPORT
TEXAS BAI\CORP, INC. AI{D SUBSIDIARY
December 31, 2017 and 2016
q
HAM BY & l-t EtrlGELr LLC occou ntonts^ o ncl^ crdvrsclrs
INDEPENDENT AUDITOR'S REPORT
Audit Committee
Texas Bancorp, Inc. San Angelo, Texas
We have audited the accompanying consolidated^ financialstatements^ of^ Texas^ Bancorp, Inc.^ and^ Subsidiary^ which^ are comprised of the consolidated balance sheets as of^ December^ 31,2017^ and 2016, and^ the^ related^ consolidated
statements of income, comprehensive income, changes in stockholders' equity and cash flows for the years then ended,
and the related notes to the consolidated financial statements.
Management's Responsibility^ for^ the^ Consolidated Financial^ Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally^ accepted in^ the^ United^ States^ of America;^ this^ includes^ the^ design,^ implementation^ and
maintenance of intemal control relevant to the preparation and fair^ presentation^ of financial^ statements^ that are free
from material misstatement, whether due to fraud or elror.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with^ auditing standards^ generally^ accepted in^ the^ United^ States^ of^ America.^ Those standards^ require^ that
we plan^ and perform^ the audits to obtain reasonable assurance^ about whether^ the financial^ statements^ are free^ from
material misstatement.
An audit involves performing^ procedures^ to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the
auditor considers intemal control relevant to the entity's preparation and fair presentation of the financial statements in
order to design audit procedures^ that^ are^ appropriate^ in^ the^ circumstances,^ but not^ for^ the^ purpose^ of^ expressing^ an
opinion on the effectiveness of the entity's intemal^ control.^ Accordingly, we^ express^ no^ such^ opinion. An^ audit^ also
includes evaluating the appropriateness of accounting policies^ used and the reasonableness^ of significant accounting
estimates made by management, as well as evaluating the overall presentation^ of the financial^ statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion,^ the^ consolidated^ financial^ statements^ referred^ to^ above present^ fairly,^ in all^ material^ respects, the
financial position^ of^ Texas Bancorp,^ Inc.^ and Subsidiary^ as^ of^ December^ 31, 2017^ and^2016 and^ the^ results^ of^ their
operations and their cash^ flows^ for^ the^ years^ then ended,^ in conformity with^ accounting principles generally^ accepted^ in the United States of^ America.
ct-
San Angelo, Texas February 21,
A/-^{"t LLC
Certified Public^ Accountonts
2909 Sherwood Woy, Suite 204, Son Angelo, TX 76901
325.9 49.2567 | www.^ HombyHengeli.com^
t
TEXAS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SI#ETS
ASSETS
Cash and due from banks Federalfunds (^) sold and overnight deposits Cash and cash equivalents
Certificates of deposit in banks
Securities available for sale
Federal Home Loan Bank stock Loans, net Premises and equipment, net Bank owned life insurance Accrued interest receivable Other assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities Deposits Noninterest-bearing Interest-bearing Totaldeposits Advances from FederalHome (^) Loan Bank Accrued interest payable Other liabilities Total liabilities
Commitments (Notes H and J)
Stockholders' equity Common stock - (^) $l par value, 200,000 (^) shares authorized and issued Capitalsurplus Treasury stock, at cost (2017^ -^ 87,709 shares; 2016 - 75,433 shares) Retained eamings Accumulated other comprehensive income (loss) Total (^) stockholders' equlty
The accompanying (^) notes are an integral part (^) of these consolidated statements.
2
December 3l 2017 2016
$ 15,625, 12,690,
$ 14,942, 14,485,1 1 I 28,315, 4,776, 93,275, 254, 128,152, 4,913, 5,782, 1,594, 706,
5, l46,ooo 89,018, 239, I 19,065, 5,137, 5,635, 1,448, 7t4 899 $ 267,760,517^ $ 255,998,
$ 88,962, 145,035,
$ 83,192, 139,479, 233,997, 3,399, 9, 750,
8, 745 889 238,157,182 226,135,
338 303 29.603,335 29,863,
Net income Other comprehensive income (loss)
Gross unrealized losses on securities available for sale
Reclassification adjustment for gains realiz,ed in net income Total other comprehensive (^) loss
TOTAL COMPREHENSIVE INCOME
The accompanying notes (^) are an integral part (^) of these consolidated statements.
4
TEXAS BAI\ICORP, INC. AI\ID SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPRETIENSTVE INCOME
Years ended December 3l 2017 2016 $ 3,350,768^ $ 3,052,
(1,01l)
s 2,913,173 $ 2,112,
TEXAS BANCORP, INC. SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years Ended December 31,2017 and20l
Common Stock
Capital Surplus
Treasury Stock
Retained Eamingp
Accumulated Other Comprehensive Income Total $ 200,000^ $ 13,915,842^ $ (6,623,452)^ $20,537,499 $ 1,277,
$29,307, 3,052, (939,340) (l,557,097)
Balance at December 3 1, 2015
Net income
Other comprehensive loss
Cash dividends paid
Balance at December 31,
Net income
Other comprehensive loss
Purchase of treasury stock
Cash dividends paid
Balance at December^ 31,
200,000 13,915,842 (6,623,452) 22,032,
- (^) 3,350, (437,595) (1,589,806) ( (^1) ,5 83,433)
$ 200,000^ $ 13,915,842^ $ (8,213,258)^ $^ 23,800,043^ $ (99,292)^ $ 29,603,
338,303 29,863, 3,350, (437,595) (1,589,806) (1,583,433)
The accompanying notes are an integral part^ of^ these^ consolidated^ statements. 5
TEXAS BANCORP, rNC. AI{D SUBSTDTARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2017 and 2016
NOTE A. SUMMARY OF SIGNIFICANT ACCOT'NTING POLICIES
The accounting and reporting policies^ of Texas Bancorp, [nc. and Subsidiary conform to accounting principles
generally accepted in the United States of America and to general practice within (^) the banking industry, The
following is a summary of the significant accounting and reporting policies:
Organization and Principles of Consolidation Texas Bancorp, Inc. is a bank holding company which owns 100% of the common stock of Texas State
Bank ("the^ Bank"). The entities are collectively referred to as "the Company".
The accompanying consolidated financial statements include the consolidated totals of the accounts of the
Company. Significant intercompany accounts and transactions have been eliminated in consolidation.
Nature of Operations
The Company provides a variety of banking services to individuals and businesses through their locations in
San Angelo, Texas. Their primary^ deposit products^ are checking, savings and term deposit accounts. Their
primary lending products are agricultural and commercial business loans, real estate mortgages and
installment loans. The Bank is subject to competition from other financial institutions and to regulation by
certain federalagencies. The Bank undergoes periodic examinations by these regulatory authorities.
Use of Estimates
To prepare financial statements in conformity with accounting principles generally accepted in the United
State of^ America^ management makes estimates and assumptions^ based^ on available information.^ These estimates and assumptions affect the amounts reported in the financial statements and the disclosures
provided and actual results could differ.
Significant Concentrations of Credit Risk
Most of the Company's activities are with customers located in Tom Green County. Therefore, the
Company's exposure to credit risk is significantly affected by changes in the economy in this area. Note C
discusses the types of securities that the Company invests in. Note D discusses the types of lending that the Company engages^ in.^ The Company^ does^ not^ have^ any significant^ concentrations^ to^ any one^ industry^ or customer.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company has defined cash equivalents as those amounts
included in the balance sheet caption "Cash and due^ from^ banks" and "Federal funds sold and overnight
deposits".
Balances in transaction accounts at other financial institutions and at the^ Federal Home^ Loan Bank^ may
exceed amounts covered by federal deposit insurance. Management regularly evaluates the credit risk
associated with other financial institutions and believes that the Company is not exposed to any significant
credit risks on cash and cash equivalents.
Certificates of Deposit in Banks
Certificates ofdeposit^ in^ banks are^ carried^ at^ cost,^ and are^ fully^ covered^ by^ federal deposit insurance.
7
TEXAS BANCORP, INC. AND SUBSIDIARY
SUPPLEMENTAL CONSOLIDATING STATEMENT OF TNCOME
Year Ended December 31,
Investment Securities
Debt securities that management has the positive intent and ability to hold to maturity are classified as "held
to maturity" and recorded at amortized cost. Securities not classified as trading, including equity securities
with readily determinable fair values, are classified as "available for sale" and recorded at fair value, with
unrealized gains and losses excluded from earnings and reported in other comprehensive income, net of tax.
The amortized cost of debt securities classified as held-to-maturity or available-for-sale is adjusted for amortization (^) of purchase premiums (^) and accretion of purchase (^) discounts. Premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on
the sale of securities are determined using the specific identification method.
Management evaluates securities for other-than-temporary impairment ("OTTI")^ on at least a quarterly
basis, and more frequently when economic or market conditions warrant such an evaluation. For securities
in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the
financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely (^) than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is
met, the entire difference between amortized cost and fair value is recognized as an impairment charge to
eamings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split
into two components as follows: 1) OTTI related to credit loss, which is recognized as an impairment charge to earnings, and 2) OTTI related to other factors, which is recognized in other comprehensive
income. The credit loss is defined as the difference between the present value of the cash flows expected to
be collected and the amortized cost basis. For equity (^) securities, the entire amount of impairment is recognized (^) through earnings.
Federal Home Loan Bank Stock
The Company, as a member of the Federal Home Loan Bank of Dallas (FHLB), is required to maintain an
investment in their capital stock. No ready market exists for this stock, and it has no quoted market value.
For financial reporting purposes, (^) such stock is considered restricted and is carried at cost.
Periodically, management evaluates these securities for other-than-temporary impairment. Management reviews for (^) impairment based on the ultimate recoverability of the cost basis in the stock. Both cash and stock dividends are reported (^) as income.
Loans
The Company grants real (^) estate, commercial, agricultural and consumer loans to customers. A substantial portion (^) of the loan portfolio is represented by real estate and commercial loans principally in the San
Angelo, Texas area. The ability of the Company's borrowers to honor their conffacts is dependent upon the
real estate and general economic (^) conditions in this area.
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-
off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs and the
allowance for loan losses. Interest income is accrued on the unpaid principal balance.
Past due loans are any loans for which payments of interest, principal or both have not been received within
the timeframes designated by the loan agreements. Loans with payments in arrears but for which borrowers
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TEXAS BAI\CORP, INC. AND SUBSIDIARY
SUPPLEMENTAL CONSOLIDATING STATEMENT OF INCOME
Year Ended December 31,
impaired loans for which repayment is expected solely from the collateral, impairment is measured based
on the fair value of the collateral. For other impaired loans, impairment may be measured based^ on^ the^ fair
value of the collateral or on the present value of expected future cash flows discounted at the loan's original
effective interest rate. When the measure of the impaired loan is less than the recorded investment in^ the loan, the impairment is recorded through a valuation allowance.
Troubled debt restructurings are individually evaluated for impairment and included in the separately
identified impairment disclosures. TDRs are measured at the present^ value of estimated future^ cash^ flows
using the loan's effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently defaulq the Company determines the amount of the allowance on that loan in accordance with the accounting policy^ for^ the
allowance for loan losses on loans individually identified as impaired.
The general component relates to non-impaired loans, and is based on historical loss experience adjusted for
the effects of economic factors that are likely to cause estimated credit losses as of the evaluation date to
differ from the portfolio's historical loss experience. The historical loss experience is determined by
portfolio segment and is based on the actual loss history experienced by the Company. This actual loss
experience is supplemented with other economic factors based on the risks present for each portfolio
segment. Economic factors include the following: current and expected economic conditions; changes in
national and local economic business conditions; changes in lending policies and procedures; trends in the
volume and terms of loans; the experience, ability and depth (^) of lending staff; levels and trends in delinquencies and impaired loans; levels and trends in charge-off and recovery activity; levels and trends of
loan quality as determined by an internal loan grading system; portfolio concentrations.
On a quarterly^ basis, management estimates the allowance balance required using the criteria identified
above in relation to the relevant risks for each of the Company's major loan segments. Significant overall
risk (^) factors for both the Company's commercial and consumer portfolios (^) include the strength of the real estate and agricultural market in (^) the Company's lending area.
The quality (^) of the Company's loan portfolio is assessed as a function of the levels of past (^) due loans and
impaired loans, and internal credit quality ratings which are updated quarterly by management. The ratings
on the Company's internal credit scale are broadly grouped into the categories "pass", "special mention"
and 'osubstandard." Loans with a pass (^) rating are those loans with minimal identified credit risk. Special
mention loans include those with potential credit weaknesses which deserve management's attention but for
which full collection of contractual principal and interest is not significantly at risk. Substandard loans are those loans (^) that have well-defined (^) weakness that put (^) full collection of conffactual principal (^) or interest at risk, and doubtful loans for which it is probable that the Company will not collect all contractual principal
or interest are also considered impaired. The credit quality ratings are an important part of the Company's
overall credit risk management process^ and are considered in the determination of the allowance for loan losses.
Determination (^) of the allowance is inherently subjective as it requires estimates that are susceptible to
significant revision as more information becomes available. In addition, various regulatory agencies, as an
integral part^ of their examination process, periodically review the Company's allowance. Such agencies may require the (^) Company to recognize additional losses based on their judgments about information available to them (^) at the time of their examination.
10
TEXAS BANCORP, INC. AI\D SUBSIDIARY SUPPLEMENTAL CONSOLIDATTNG STATEMENT OF NCOME
Year Ended December 31,
Premises and Equipment
Land is carried at cost. Buildings^ and equipment are carried at cost, less^ accumulated depreciation computed on the straight-line method over the estimated useful lives of the assets. Maintenance and repairs, which do not extend the useful lives of buildings and equipment, are charged to expense as incurred.
Bank Owned Life Insurance
The Bank has purchased life insurance policies on certain key executives. Bank owned life insurance is
recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is
the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.
Income Taxes
The Company, with the consent of its stockholders, elected to be taxed under the provisions^ of Subchapter
S of the Intemal Revenue Code. Under those provisions, the Company neither pays corporate income taxes
on its^ taxable income^ nor^ is^ allowed^ a net^ operating^ loss^ carryover or^ carryback as a deduction.^ Instead,^ the
stockholders of the Company include their respective shares of the Company's net operating income or loss
in their individual income tax returns. Accordingly, no income taxes are reflected in the consolidated
financial statements.
Because the Company's stockholders will be obligated to pay income taxes on the earnings of the Company, the Company expects to declare cash dividends sufficient to fund the stockholders' tax payments as they^ come due.
The Company is no longer subject to examination by taxing authorities for years before 2014.
Loan Commitments and Related Financial Instruments
Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and
commercial letters of credit, issued to meet customer financing needs. The face amount for these items
represents the exposure to loss, before considering customer collateral or ability to repay. Such financial
instruments are recorded when they are funded.
Transfers of Financial Assets
Transfers of financial^ assets^ are accounted^ for^ as^ sales^ when^ control^ over the^ assets has^ been^ relinquished,
Control over transferred assets is deemed to be relinquished when the assets have been isolated from the
Company, the transferee obtains the right^ (free^ of^ conditions that constrain^ it^ from^ taking^ advantage^ of^ that
right) to pledge or exchange the transferred assets, and the Company does not maintain effective control
over the transferred assets through an agreement to repurchase them before^ their maturity.
Loss Contingencies
Loss contingencies, including claims and legal^ actions^ arising^ in^ the^ ordinary^ course^ of^ business,^ are recorded as^ liabilities^ when^ the likelihood^ of^ loss^ is^ probable^ and an^ amount^ or^ range^ of^ loss can^ be reasonably estimated. Management does not^ believe there^ now^ are^ such matters^ that^ will^ have a material effect on the financial statements.
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