10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2014

OR

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____________ to ____________

Commission file number 001-34605

OMNIAMERICAN BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland	27-0983595
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)
1320 S. University Drive, Fort Worth, Texas	76107
(Address of Principal Executive Offices)	(Zip Code)

(817) 367-4640

(Registrant’s Telephone Number, including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer ¨ Accelerated filer þ Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

There were 11,551,419 shares of Common Stock, par value $0.01 per share, issued and outstanding as of August 1, 2014.

	Page Number
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at June 30, 2014, Unaudited and December 31, 2013	1
Unaudited Consolidated Statements of Income for the Three and Six Months Ended June 30, 2014 and 2013	2
Unaudited Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2014 and 2013	3
Unaudited Consolidated Statement of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2014	4
Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013	5
Condensed Notes to Unaudited Consolidated Interim Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3. Quantitative and Qualitative Disclosures about Market Risk	47
Item 4. Controls and Procedures	49
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	50
Item 1A. Risk Factors	50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3. Defaults Upon Senior Securities	51
Item 4. Mine Safety Disclosures	51
Item 5. Other Information	51
Item 6. Exhibits	51
SIGNATURES	52
EXHIBIT INDEX	53
Exhibit 31.1
Exhibit 31.2
Exhibit 32
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

i

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OmniAmerican Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands, except per share data)

	June 30, 2014			December 31, 2013
ASSETS
Cash and due from financial institutions	$	13,547		$	11,498
Short-term interest-earning deposits in other financial institutions	7,663			4,382
Total cash and cash equivalents	21,210			15,880
Investments:
Securities available for sale (Amortized cost of $454,106 on June 30, 2014 and $433,580 on December 31, 2013)	457,956			430,775
Other	17,106			19,782
Loans held for sale	876			1,509
Loans, net of deferred fees and discounts	790,464			831,326
Less allowance for loan losses	(6,388		)	(6,445		)
Loans, net	784,076			824,881
Premises and equipment, net	40,630			41,512
Bank-owned life insurance	44,323			43,606
Other real estate owned	785			177
Mortgage servicing rights	1,552			1,473
Deferred tax asset, net	1,796			4,066
Accrued interest receivable	3,259			3,447
Other assets	3,213			4,205
Total assets	$	1,376,782		$	1,391,313
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	71,952		$	58,071
Interest-bearing	750,056			755,503
Total deposits	822,008			813,574
Federal Home Loan Bank advances	328,667			362,000
Other borrowings	2,000			2,000
Accrued expenses and other liabilities	9,577			6,597
Total liabilities	1,162,252			1,184,171
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01 per share; 100,000,000 shares authorized; 11,548,984 shares issued and outstanding at June 30, 2014 and 11,451,596 shares issued and outstanding at December 31, 2013	116			115
Additional paid-in capital	110,698			109,250
Unallocated Employee Stock Ownership Plan (“ESOP”) shares; 780,804 shares at June 30, 2014 and 799,848 shares at December 31, 2013	(7,808		)	(7,999		)
Retained earnings	109,660			108,304
Accumulated other comprehensive income (loss):
Unrealized gain (loss) on securities available for sale, net of income taxes	2,541			(1,851		)
Unrealized loss on pension plan, net of income taxes	(677		)	(677		)
Total accumulated other comprehensive income (loss)	1,864			(2,528		)
Total stockholders’ equity	214,530			207,142
Total liabilities and stockholders’ equity	$	1,376,782		$	1,391,313

See Condensed Notes to Unaudited Consolidated Interim Financial Statements.

1

OmniAmerican Bancorp, Inc. and Subsidiary

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014		2013			2014			2013
Interest income:
Loans, including fees	$	8,934	$	9,265		$	18,136		$	18,166
Securities — taxable	2,647		2,115			5,235			4,278
Securities — nontaxable	—		1			1			1
Total interest income	11,581		11,381			23,372			22,445
Interest expense:
Deposits	1,023		1,390			2,036			2,847
Borrowed funds	625		563			1,334			1,186
Total interest expense	1,648		1,953			3,370			4,033
Net interest income	9,933		9,428			20,002			18,412
Provision for loan losses	725		1,100			1,375			1,600
Net interest income after provision for loan losses	9,208		8,328			18,627			16,812
Noninterest income:
Service charges and other fees	2,102		2,228			4,160			4,446
Net gains on sales of loans	395		236			578			1,022
Net gains on sales of securities available for sale (reclassified from unrealized gains (losses) on available-for-sale securities in accumulated other comprehensive income)	348		—			607			1,701
Net (losses) gains on disposition of premises and equipment	—		—			(1		)	344
Net gains (losses) on sales of repossessed assets	48		27			10			(3		)
Commissions	403		297			777			605
Increase in cash surrender value of bank-owned life insurance	351		367			717			683
Other income	267		228			524			447
Total noninterest income	3,914		3,383			7,372			9,245
Noninterest expense:
Salaries and benefits	6,442		6,040			12,624			12,797
Software and equipment maintenance	508		696			1,095			1,306
Depreciation of furniture, software, and equipment	276		415			593			828
FDIC insurance	173		139			353			329
Net loss on write-down of other real estate owned	22		22			22			22
Real estate owned expense (income)	29		(15		)	64			(35		)
Service fees	154		126			298			240
Communications costs	221		249			457			473
Other operations expense	831		805			1,582			1,566
Occupancy	954		945			1,919			1,925
Professional and outside services	1,949		1,002			2,991			2,040
Loan servicing	166		121			244			232
Marketing	71		158			193			308
Total noninterest expense	11,796		10,703			22,435			22,031
Income before income tax expense	1,326		1,008			3,564			4,026
Income tax expense (includes income tax expense from items reclassified from accumulated other comprehensive income of $118 and $0 for the three months ended June 30, 2014 and 2013, respectively, and $206 and $578 for the six months ended June 30, 2014 and 2013, respectively)	428		334			1,137			1,419
Net income	$	898	$	674		$	2,427		$	2,607
Earnings per share:
Basic	$	0.08	$	0.06		$	0.23		$	0.25
Diluted	$	0.08	$	0.06		$	0.22		$	0.25

See Condensed Notes to Unaudited Consolidated Interim Financial Statements.

2

OmniAmerican Bancorp, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(Dollars in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Net income	$	898		$	674		$	2,427		$	2,607
Change in unrealized gains (losses) on securities available for sale	4,590			(7,949		)	7,262			(9,364		)
Reclassification of amount realized through sale of securities	(348		)	—			(607		)	(1,701		)
Income tax effect	(1,442		)	2,703			(2,263		)	3,762
Other comprehensive income (loss), net of income tax	2,800			(5,246		)	4,392			(7,303		)
Comprehensive income (loss)	$	3,698		$	(4,572	)	$	6,819		$	(4,696	)

See Condensed Notes to Unaudited Consolidated Interim Financial Statements.

3

OmniAmerican Bancorp, Inc. and Subsidiary

Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)

(Dollars in thousands, except share data)

	Common Stock		Additional Paid-in Capital			Unallocated ESOP Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balances at January 1, 2014	$	115	$	109,250		$	(7,999	)	$	108,304		$	(2,528	)	$	207,142
ESOP shares allocated, 19,044 shares	—		256			191			—			—			447
Stock purchased and retired at cost, 5,962 shares	—		(12		)	—			—			—			(12		)
Share-based compensation expense	—		1,041			—			—			—			1,041
Tax benefit from the exercise of stock options and the vesting of restricted stock	—		111			—			—			—			111
Stock options exercised, 12,272 shares	—		53			—			—			—			53
Restricted stock issued, net of forfeitures, 91,078 shares	1		(1		)	—			—			—			—
Net income	—		—			—			2,427			—			2,427
Dividends declared and paid	—		—			—			(1,071		)	—			(1,071		)
Other comprehensive income	—		—			—			—			4,392			4,392
Balances at June 30, 2014	$	116	$	110,698		$	(7,808	)	$	109,660		$	1,864		$	214,530

See Condensed Notes to Unaudited Consolidated Interim Financial Statements.

4

OmniAmerican Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	Six Months Ended
	June 30,
	2014			2013
Cash flows from operating activities:
Net income	$	2,427		$	2,607
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,527			1,699
Provision for loan losses	1,375			1,600
Amortization of net premium on investments	1,298			1,788
Amortization and impairment of mortgage servicing rights	146			(16		)
Net gains on sales of securities available for sale	(607		)	(1,701		)
Net gains on sales of loans	(578		)	(1,022		)
Proceeds from sales of loans held for sale	26,205			43,859
Loans originated for sale	(25,168		)	(34,468		)
Net loss on write-downs of other real estate owned	22			22
Net losses (gains) on disposition of premises and equipment	1			(344		)
Net (gains) losses on sales of repossessed assets	(10		)	3
Increase in cash surrender value of bank-owned life insurance	(717		)	(683		)
Federal Home Loan Bank stock dividends	(32		)	(21		)
ESOP compensation expense	447			461
Share-based compensation	1,041			894
Excess tax benefit from share-based compensation	(111		)	(88		)
Changes in operating assets and liabilities:
Accrued interest receivable	188			(34		)
Other assets	399			3,584
Accrued interest payable and other liabilities	2,980			3,223
Net cash provided by operating activities	10,833			21,363
Cash flows from investing activities:
Securities available for sale:
Purchases	(72,263		)	(110,214		)
Proceeds from sales	18,099			46,212
Proceeds from maturities, calls, and principal repayments	32,947			60,346
Purchases of other investments	(46		)	(2,620		)
Redemptions of other investments	2,754			1,119
Purchase of bank-owned life insurance	—			(10,000		)
Net decrease (increase) in loans held for investment	37,119			(68,942		)
Purchases of premises and equipment	(646		)	(1,026		)
Proceeds from sales of premises and equipment	—			680
Proceeds from sales of foreclosed assets	2,087			1,497
Proceeds from sales of other real estate owned	264			696
Net cash provided by (used in) investing activities	20,315			(82,252		)
Cash flows from financing activities:
Net increase in deposits	8,434			2,010
Net (decrease) increase in Federal Home Loan Bank advances	(33,333		)	73,333
Net decrease in other borrowings	—			(17,000		)
Payment of dividends	(1,071		)	—
Proceeds from stock options exercised	53			53
Excess tax benefit from share-based compensation	111			88
Purchase of common stock	(12		)	(13		)
Net cash (used in) provided by financing activities	(25,818		)	58,471
Net increase (decrease) in cash and cash equivalents	5,330			(2,418		)
Cash and cash equivalents, beginning of period	15,880			23,853
Cash and cash equivalents, end of period	$	21,210		$	21,435
Supplemental cash flow information:
Interest paid	$	3,422		$	4,127
Income tax paid, net of refunds	$	1,355		$	1,300
Non-cash transactions:
Loans transferred to other real estate owned	$	858		$	184
Loans transferred to foreclosed assets	$	1,453		$	1,412
Change in unrealized gains on securities available for sale	$	6,655		$	(11,065	)

See Condensed Notes to Unaudited Consolidated Interim Financial Statements.

5

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements

NOTE 1 — Basis of Financial Statement Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of OmniAmerican Bancorp, Inc. (referred to herein as “the Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These interim consolidated financial statements and notes should be read in conjunction with the Company’s consolidated financial statements, and notes thereto, for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2014. In management’s opinion, the interim data as of June 30, 2014 and for the three- and six-month periods ended June 30, 2014 and 2013, includes all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. References to the Company include, where appropriate, OmniAmerican Bank, the Company’s wholly-owned subsidiary.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for loan losses and the fair values of financial instruments are particularly subject to change.

NOTE 2 — Recent Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-04, “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.” This update clarifies that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of the residential real estate property collateralizing a consumer mortgage loan, upon either: (i) the creditor obtaining legal title to the property upon completion of the foreclosure; or (ii) the borrower conveying all interest in the property to the creditor to satisfy the loan through completion of a deed-in-lieu of foreclosure or through a similar legal agreement. ASU 2014-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” Under the new guidance, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results when any of the following occurs: (i) the component of an entity or group of components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale; (ii) the component of an entity or group of components of an entity is disposed of by sale; or (iii) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). ASU 2014-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This update states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update affects entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is not permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

6

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

In June 2014, the FASB issued ASU 2014-11, “Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.” This update aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements by accounting for these transactions as secured borrowings. This update also requires a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return of the transferred financial assets throughout the term of the transaction. ASU 2014-11 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. Early adoption is not permitted. The adoption of this guidance is not expected to have a significant impact on the Company's financial statements.

NOTE 3 — Investment Securities

The amortized cost and estimated fair values of investment securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) as of June 30, 2014 and December 31, 2013 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
June 30, 2014
U. S. government sponsored mortgage-backed securities	$	290,897	$	4,675	$	(1,995	)	$	293,577
U. S. government sponsored collateralized mortgage obligations	152,029		2,123		(703		)	153,449
Agency bonds	5,000		—		(262		)	4,738
Municipal obligations	180		—		(4		)	176
Other equity securities	6,000		16		—			6,016
Total investment securities available for sale	$	454,106	$	6,814	$	(2,964	)	$	457,956
December 31, 2013
U. S. government sponsored mortgage-backed securities	$	282,180	$	2,616	$	(5,208	)	$	279,588
U. S. government sponsored collateralized mortgage obligations	140,221		1,758		(1,403		)	140,576
Agency bonds	5,000		—		(462		)	4,538
Municipal obligations	179		—		(9		)	170
Other equity securities	6,000		—		(97		)	5,903
Total investment securities available for sale	$	433,580	$	4,374	$	(7,179	)	$	430,775

7

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

Investment securities available for sale with gross unrealized losses at June 30, 2014 and December 31, 2013, aggregated by investment category and length of time that individual securities have been in a continuous loss position, were as follows:

	Continuous Unrealized Losses Existing for
	Less Than 12 Months					Greater Than 12 Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
June 30, 2014
U. S. government sponsored mortgage-backed securities	$	2,986	$	(2	)	$	94,245	$	(1,993	)	$	97,231	$	(1,995	)
U. S. government sponsored collateralized mortgage obligations	29,129		(126		)	14,197		(577		)	43,326		(703		)
Agency bonds	—		—			4,738		(262		)	4,738		(262		)
Municipal obligations	—		—			176		(4		)	176		(4		)
	$	32,115	$	(128	)	$	113,356	$	(2,836	)	$	145,471	$	(2,964	)
December 31, 2013
U. S. government sponsored mortgage-backed securities	$	142,715	$	(5,088	)	$	2,248	$	(120	)	$	144,963	$	(5,208	)
U. S. government sponsored collateralized mortgage obligations	50,066		(1,403		)	—		—			50,066		(1,403		)
Agency bonds	4,538		(462		)	—		—			4,538		(462		)
Municipal obligations	170		(9		)	—		—			170		(9		)
Other equity securities	5,903		(97		)	—		—			5,903		(97		)
	$	203,392	$	(7,059	)	$	2,248	$	(120	)	$	205,640	$	(7,179	)

At June 30, 2014, the Company owned 191 investment securities of which 61 had unrealized losses. At December 31, 2013, the Company owned 202 investment securities of which 82 had unrealized losses. Unrealized losses generally result from interest rate levels differing from those existing at the time of purchase of the securities and, as to mortgage-backed securities, estimated prepayment speeds. These unrealized losses are considered to be temporary as they reflect fair values on June 30, 2014 and December 31, 2013, and are subject to change daily as interest rates fluctuate. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell prior to recovery. Management evaluates investment securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent of the Company to sell or whether it would be more likely than not required to sell its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

The amortized cost and fair value of securities available for sale by contractual maturity at June 30, 2014 are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or earlier redemptions that may occur.

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	—	$	—
Due from one to five years	—		—
Due from five to ten years	31,915		31,549
Due after ten years	416,191		420,391
Equity securities	6,000		6,016
Total	$	454,106	$	457,956

Investment securities with a fair value of $125.8 million and $161.6 million at June 30, 2014 and December 31, 2013, respectively, were pledged to secure Federal Home Loan Bank advances. In addition, investment securities with a fair value of

8

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

$2.6 million and $2.2 million at June 30, 2014 and December 31, 2013, respectively, were pledged to secure repurchase agreements which are included in other borrowings.

Sales activity of securities available for sale for the three and six months ended June 30, 2014 and 2013 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Proceeds from sales of investment securities	$	11,671	$	—	$	18,099	$	46,212
Gross gains from sales of investment securities	348		—		607		1,701

Gains or losses on the sales of securities are recognized at the trade date utilizing the specific identification method.

NOTE 4 — Loans and Allowance for Loan Losses

The composition of the loan portfolio was as follows at the dates indicated:

	June 30, 2014			December 31, 2013
	(In thousands)
Residential real estate loans:
One- to four-family	$	269,233		$	262,723
Home equity	15,937			17,106
Total residential real estate loans	285,170			279,829
Commercial loans:
Commercial real estate	113,229			106,560
Real estate construction	59,886			59,648
Commercial business	78,381			69,320
Total commercial loans	251,496			235,528
Consumer loans:
Automobile, indirect	204,468			264,671
Automobile, direct	31,628			31,598
Other consumer	15,028			15,330
Total consumer loans	251,124			311,599
Total loans	787,790			826,956
Plus (less):
Deferred fees and discounts	2,674			4,370
Allowance for loan losses	(6,388		)	(6,445		)
Total loans receivable, net	$	784,076		$	824,881

The Company originates one- to four-family residential real estate loans which are sold in the secondary market. The Company retains the servicing for residential real estate loans that are sold to the Federal National Mortgage Association (“FNMA”). Residential real estate loans serviced for FNMA are not included as assets on the consolidated balance sheets. The following

9

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

table presents loans sold and serviced as of June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013
	(In thousands)
Principal balances of the loans sold and serviced for FNMA	$	199,901	$	189,084
Mortgage servicing rights associated with the mortgage loans serviced for FNMA	1,552		1,473

10

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

The following table presents loans identified as impaired by class of loans as of June 30, 2014 and December 31, 2013:

	Recorded Balance		Unpaid Principal Balance		Related Allowance		Average Recorded Balance		Interest Income Recognized
	(In thousands)
June 30, 2014:
With no related allowance recorded:
One- to four-family	$	7,017	$	7,017	$	—	$	7,434	$	109
Home equity	34		34		—		37		—
Commercial real estate	2,331		2,331		—		2,337		83
Real estate construction	—		—		—		—		—
Commercial business	178		178		—		418		1
Automobile, indirect	787		787		—		554		8
Automobile, direct	34		34		—		296		—
Other consumer	10		10		—		11		—
Impaired loans with no related allowance recorded	10,391		10,391		—		11,087		201
With an allowance recorded:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity	—		—		—		—		—
Commercial real estate	517		517		287		545		—
Real estate construction	—		—		—		—		—
Commercial business	725		725		216		838		3
Automobile, indirect	—		—		—		—		—
Automobile, direct	—		—		—		—		—
Other consumer	—		—		—		—		—
Impaired loans with an allowance recorded	1,242		1,242		503		1,383		3
Total	$	11,633	$	11,633	$	503	$	12,470	$	204
December 31, 2013:
With no related allowance recorded:
One- to four-family	$	7,531	$	7,531	$	—	$	7,468	$	305
Home equity	42		42		—		14		1
Commercial real estate	2,347		2,347		—		4,237		31
Real estate construction	—		—		—		3,171		66
Commercial business	591		591		—		700		21
Automobile, indirect	824		824		—		738		26
Automobile, direct	32		32		—		34		2
Other consumer	15		15		—		4		—
Impaired loans with no related allowance recorded	11,382		11,382		—		16,366		452
With an allowance recorded:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity	—		—		—		—		—
Commercial real estate	551		551		321		46		—
Real estate construction	—		—		—		—		—
Commercial business	1,040		1,040		200		1,064		8
Automobile, indirect	—		—		—		—		—
Automobile, direct	—		—		—		—		—
Other consumer	—		—		—		—		—
Impaired loans with an allowance recorded	1,591		1,591		521		1,110		8
Total	$	12,973	$	12,973	$	521	$	17,476	$	460

For the six months ended June 30, 2013, the average recorded investment in impaired loans and the related amount of interest income recognized during the time within the period that the loans were impaired were $20.0 million and $201,000, respectively.

11

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

As of June 30, 2014 and December 31, 2013, no additional funds were committed to be advanced in connection with impaired loans.

The following table presents the recorded investment in non-accrual loans by class of loans as of June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013
	(In thousands)
Residential real estate loans:
One- to four-family	$	1,716	$	2,050
Home equity	34		42
Commercial loans:
Commercial real estate	758		800
Real estate construction	—		—
Commercial business	654		864
Consumer loans:
Automobile, indirect	557		558
Automobile, direct	23		15
Other consumer	10		15
Total	$	3,752	$	4,344

There were no loans greater than 90 days past due that continued to accrue interest at June 30, 2014 or December 31, 2013.

The following table presents the aging of the recorded investment in past due loans as of June 30, 2014 and December 31, 2013 by class of loans:

	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Loans Not Past Due		Total
	(In thousands)
June 30, 2014:
Residential real estate loans:
One- to four-family	$	—	$	984	$	1,604	$	2,588	$	266,645	$	269,233
Home equity	—		—		34		34		15,903		15,937
Commercial loans:
Commercial real estate	49		—		119		168		113,061		113,229
Real estate construction	—		—		—		—		59,886		59,886
Commercial business	—		85		53		138		78,243		78,381
Consumer loans:
Automobile, indirect	2,121		399		557		3,077		201,391		204,468
Automobile, direct	55		8		23		86		31,542		31,628
Other consumer	51		20		10		81		14,947		15,028
Total loans	$	2,276	$	1,496	$	2,400	$	6,172	$	781,618	$	787,790

12

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Loans Not Past Due		Total
	(In thousands)
December 31, 2013:
Residential real estate loans:
One- to four-family	$	1,170	$	—	$	1,932	$	3,102	$	259,621	$	262,723
Home equity	1		—		42		43		17,063		17,106
Commercial loans:
Commercial real estate	—		—		120		120		106,440		106,560
Real estate construction	876		—		—		876		58,772		59,648
Commercial business	—		—		—		—		69,320		69,320
Consumer loans:
Automobile, indirect	2,217		615		558		3,390		261,281		264,671
Automobile, direct	48		21		15		84		31,514		31,598
Other consumer	72		33		15		120		15,210		15,330
Total loans	$	4,384	$	669	$	2,682	$	7,735	$	819,221	$	826,956

Our methodology for evaluating the adequacy of the allowance for loan losses consists of:

• a specific loss component which is the allowance for impaired loans; and

• a general loss component for all other loans not individually evaluated for impairment but that, on a portfolio basis, are believed to have some inherent but unidentified loss.

The specific component of the allowance for loan losses relates to loans that are considered impaired, which are generally classified as doubtful or substandard. For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan are lower than the carrying value of that loan. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for non-homogeneous loans, including one- to four-family residential real estate loans with balances in excess of $1 million, commercial real estate, real estate construction, and commercial business loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, consumer and one- to four-family residential real estate loans with balances less than $1 million are not separately identified for impairment disclosures, unless such loans are the subject of a restructuring agreement.

The general component of the allowance for loan losses covers unimpaired loans and is based on the historical loss experience adjusted for other qualitative factors. The loan portfolio is stratified into homogeneous groups of loans that possess similar loss potential characteristics, and an appropriate loss ratio adjusted for other qualitative factors is applied to the homogeneous pools of loans to estimate the incurred losses in the loan portfolio. The other qualitative factors considered by management include, but are not limited to, the following:

• changes in lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices;

• changes in national and local economic and business conditions and developments, including the condition of various market segments;

13

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

• changes in the nature and volume of the loan portfolio;

• changes in the experience, ability, and depth of knowledge of the lending staff;

• changes in the trend of the volume and severity of past due and classified loans; and trends in the volume of non-accrual loans, troubled debt restructurings, and other loan modifications;

• changes in the quality of our loan review system and the degree of oversight by the board of directors;

• the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and

• the effect of external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in our current portfolio.

Consumer loans generally have greater risk of loss or default than one- to four-family residential real estate loans, particularly in the case of loans that are secured by rapidly depreciable assets, such as automobiles, or loans that are unsecured. In these cases, a risk exists that the collateral, if any, for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the ability to recover on consumer loans.

Commercial real estate loans generally have greater credit risks compared to one- to four-family residential real estate loans, as they typically involve larger loan balances concentrated with single borrowers or groups of related borrowers. In addition, the payment experience on loans secured by income-producing properties typically depends on the successful operation of the related real estate project and thus may be subject to a greater extent to adverse conditions in the real estate market and in the general economy.

Commercial business loans involve a greater risk of default than residential real estate loans of like duration since their repayment generally depends on the successful operation of the borrower’s business and the sufficiency of collateral, if any. Loans secured by multi-family residential real estate generally involve a greater degree of credit risk than one- to four-family residential real estate loans and carry larger loan balances. This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the effects of general economic conditions on income producing properties, and the increased difficulty of evaluating and monitoring these types of loans. Furthermore, the repayment of loans secured by multi-family mortgages typically depends upon the successful operation of the related real estate property. If the cash flow from the project is reduced, the borrower’s ability to repay the loan may be impaired.

Real estate construction loans generally have greater credit risk than traditional one- to four-family residential real estate loans. The repayment of these loans depends upon the sale of the property to third parties or the availability of permanent financing upon completion of all improvements. In the event a loan is made on property that is not yet approved for the planned development, there is the risk that approvals will not be granted or will be delayed. These events may adversely affect the borrower and the collateral value of the property. Real estate construction loans also expose the Company to the risk that improvements will not be completed on time in accordance with specifications and projected costs. In addition, the ultimate sale or rental of the property may not occur as anticipated.

When establishing the allowance for loan losses, management categorizes loans into risk categories based on the class of loans — residential real estate, commercial, or consumer — and relevant information about the ability of the borrowers to repay the loans, such as the current economic conditions, historical payment experience, the nature and volume of the loan portfolio, the financial strength of the borrower, and the estimated value of any underlying collateral, among other factors. Management classifies the loans individually analyzed for impairment as to credit risk. This analysis includes residential real estate loans with an outstanding balance in excess of $1 million and non-homogeneous loans, such as commercial real estate, real estate construction, and commercial business loans. The following definitions for the credit risk ratings are used for such loans:

Special mention. Special mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose the institution to sufficient risk to warrant adverse classification.

Substandard. Substandard loans have well defined weaknesses where a payment default and/or a loss is possible, but not yet probable. Loans so classified are inadequately protected by the current net worth and repayment capacity of the obligor or of the collateral pledged, if any. If deficiencies are not corrected quickly, there is a possibility of loss.

14

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

Doubtful. Doubtful loans have the weaknesses and characteristics of substandard loans, but the available information suggests that collection or liquidation in its entirety, on the basis of currently existing facts, conditions and values, is highly improbable. The possibility of a loss is exceptionally high, but certain identifiable contingencies could possibly arise (proposed merger, acquisition, capital injection, refinancing plans, and pledging of additional collateral) that may strengthen the loan, such that it is reasonable to defer its classification as a loss until a more exact status is determined.

Loans not meeting the criteria described above are considered to be pass-rated loans. The following table presents the risk category of loans by class for loans individually analyzed for impairment as of June 30, 2014 and December 31, 2013:

	Commercial Real Estate		Real Estate Construction		Commercial Business		One- to Four- Family		Total
	(In thousands)
June 30, 2014:
Pass	$	107,424	$	59,886	$	74,300	$	14,831	$	256,441
Special Mention	321		—		1,241		—		1,562
Substandard	5,484		—		2,840		4,583		12,907
Doubtful	—		—		—		—		—
	$	113,229	$	59,886	$	78,381	$	19,414	$	270,910
December 31, 2013:
Pass	$	101,134	$	59,536	$	64,155	$	15,514	$	240,339
Special Mention	735		—		2,164		—		2,899
Substandard	4,691		112		3,001		3,175		10,979
Doubtful	—		—		—		—		—
	$	106,560	$	59,648	$	69,320	$	18,689	$	254,217

The Company classifies residential real estate loans that are not analyzed individually for impairment (less than $1 million) as prime or subprime. The Company defines a subprime residential real estate loan as any loan to a borrower who has no credit score or a credit score of less than 661 along with at least one of the following at the time of funding:

• Two or more 30 day delinquencies in the past 12 months;

• One or more 60 day delinquencies in the past 24 months;

• Bankruptcy filing within the past 60 months;

• Judgment or unpaid charge-off of $500 or more in the last 24 months; and

• Foreclosure or repossession in the past 24 months.

All other residential real estate loans not individually analyzed for impairment are classified as prime.

The following table presents the prime and subprime residential real estate loans collectively evaluated for impairment as of June 30, 2014 and December 31, 2013:

	One- to Four- Family		Home Equity		Total
	(In thousands)
June 30, 2014:
Prime	$	194,841	$	15,432	$	210,273
Subprime	54,978		505		55,483
	$	249,819	$	15,937	$	265,756
December 31, 2013:
Prime	$	195,919	$	16,521	$	212,440
Subprime	48,115		585		48,700
	$	244,034	$	17,106	$	261,140

15

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

The Company evaluates consumer loans based on the credit score for each borrower when the loan is originated. The Company defines a subprime consumer loan as any loan to a borrower who has a credit score of less than 661 at the time of funding. The following table presents the credit score for each of the classes of consumer loans as of June 30, 2014 and December 31, 2013:

Risk Tier	Credit Score	Automobile, indirect		Automobile, direct		Other consumer		Total
	(In thousands)
June 30, 2014:
A	720+	$	106,657	$	23,101	$	10,949	$	140,707
B	690–719	40,476		4,207		2,260		46,943
C	661–689	34,299		2,408		1,463		38,170
D	660 and under	23,036		1,912		356		25,304
		$	204,468	$	31,628	$	15,028	$	251,124
December 31, 2013:
A	720+	$	135,583	$	23,137	$	11,453	$	170,173
B	690–719	53,678		4,311		2,228		60,217
C	661–689	44,732		2,320		1,268		48,320
D	660 and under	30,678		1,830		381		32,889
		$	264,671	$	31,598	$	15,330	$	311,599

16

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

The following table presents the activity in the allowance for loan losses by portfolio segment based on impairment method for the three months ended June 30, 2014 and 2013:

	Residential Real Estate			Commercial			Consumer			Total
	(In thousands)
June 30, 2014:
Allowance for loan losses for the three months ended:
Beginning balance	$	809		$	2,750		$	2,909		$	6,468
Charge-offs	(84		)	(79		)	(746		)	(909		)
Recoveries of loans previously charged-off	9			10			85			104
Provision for loan losses	137			172			416			725
Ending balance	$	871		$	2,853		$	2,664		$	6,388
Allowance for loan losses for the six months ended:
Beginning balance	$	851		$	2,517		$	3,077		$	6,445
Charge-offs	(102		)	(79		)	(1,494		)	(1,675		)
Recoveries of loans previously charged-off	23			34			186			243
Provision for loan losses	99			381			895			1,375
Ending balance	$	871		$	2,853		$	2,664		$	6,388
Ending balance attributable to loans:
Individually evaluated for impairment	$	—		$	503		$	—		$	503
Collectively evaluated for impairment	871			2,350			2,664			5,885
Total ending balance	$	871		$	2,853		$	2,664		$	6,388
June 30, 2013:
Allowance for loan losses for the three months ended:
Beginning balance	$	831		$	3,345		$	2,746		$	6,922
Charge-offs	—			(203		)	(846		)	(1,049		)
Recoveries of loans previously charged-off	14			15			80			109
Provision for loan losses	(51		)	218			933			1,100
Ending balance	$	794		$	3,375		$	2,913		$	7,082
Allowance for loan losses for the six months ended:
Beginning balance	$	870		$	3,133		$	2,897		$	6,900
Charge-offs	(153		)	(202		)	(1,299		)	(1,654		)
Recoveries of loans previously charged-off	22			30			184			236
Provision for loan losses	55			414			1,131			1,600
Ending balance	$	794		$	3,375		$	2,913		$	7,082
Ending balance attributable to loans:
Individually evaluated for impairment	$	—		$	294		$	—		$	294
Collectively evaluated for impairment	794			3,081			2,913			6,788
Total ending balance	$	794		$	3,375		$	2,913		$	7,082

17

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

The Company’s recorded investment in loans as of June 30, 2014, December 31, 2013, and June 30, 2013 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company’s impairment methodology is as follows:

	Residential Real Estate		Commercial		Consumer		Total
	(In thousands)
June 30, 2014:
Loans individually evaluated for impairment	$	7,051	$	3,751	$	831	$	11,633
Loans collectively evaluated for impairment	278,119		247,745		250,293		776,157
Total ending balance	$	285,170	$	251,496	$	251,124	$	787,790
December 31, 2013:
Loans individually evaluated for impairment	$	7,573	$	4,529	$	871	$	12,973
Loans collectively evaluated for impairment	272,256		230,999		310,728		813,983
Total ending balance	$	279,829	$	235,528	$	311,599	$	826,956
June 30, 2013:
Loans individually evaluated for impairment	$	7,732	$	10,716	$	754	$	19,202
Loans collectively evaluated for impairment	262,014		223,999		298,516		784,529
Total ending balance	$	269,746	$	234,715	$	299,270	$	803,731

A loan is considered a troubled debt restructuring (“TDR”) if the Company, for economic or legal reasons related to a debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. Concessions granted under a TDR typically involve a temporary or permanent reduction in the interest rate to less than a current market rate of interest or an extension of a loan’s stated maturity date. Loans classified as TDRs are designated as impaired.

A summary of the Company’s loans classified as TDRs at June 30, 2014 and December 31, 2013 is presented below:

	June 30, 2014		December 31, 2013
	(In thousands)
TDR
Residential Real Estate	$	5,413	$	6,276
Commercial	2,549		2,581
Consumer	310		382
Total TDR	8,272		9,239
Less: TDR in non-accrual status
Residential Real Estate	112		795
Commercial	460		483
Consumer	70		99
Total performing TDR	$	7,630	$	7,862

18

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

The Company may grant concessions through a number of different restructuring methods. The following table presents the outstanding principal balance of loans by class and by method of concession that were the subject of a TDR during thesix months ended June 30, 2014 and 2013:

	Residential Real Estate		Commercial		Consumer		Total
	(In thousands)
Six Months Ended June 30, 2014:
Interest rate reduction	$	1,445	$	—	$	21	$	1,466
Loan maturity extension	—		—		—		—
Forbearance	—		—		—		—
Principal reduction	—		—		—		—
Total	$	1,445	$	—	$	21	$	1,466
Six Months Ended June 30, 2013:
Interest rate reduction	$	—	$	—	$	27	$	27
Loan maturity extension	—		—		29		29
Forbearance	—		—		—		—
Principal reduction	—		—		—		—
Total	$	—	$	—	$	56	$	56

The following table presents the number of loans modified and the balances before and after modification for thesix months ended June 30, 2014 and 2013:

	Number of Loans	Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
	(Dollar amounts in thousands)
Six Months Ended June 30, 2014:
Residential Real Estate	1	$	1,445	$	1,445
Commercial	—	—		—
Consumer	1	21		21
Total	2	$	1,466	$	1,466
Six Months Ended June 30, 2013:
Residential Real Estate	—	$	—	$	—
Commercial	—	—		—
Consumer	3	56		56
Total	3	$	56	$	56

Included in the impaired loans as of June 30, 2014 and December 31, 2013 were TDRs of $8.3 million and $9.2 million, respectively. The Company has allocated $66,000 and $72,000 of specific reserves to customers whose loan terms have been modified as TDRs at June 30, 2014 and December 31, 2013, respectively. As of June 30, 2014 and December 31, 2013, no additional funds were committed to be advanced in connection with TDRs.

The Company’s other real estate owned and foreclosed assets represent properties and personal collateral acquired through customer loan defaults. The property is recorded at fair value less the estimated costs to sell at the date acquired. Any difference between the book value and estimated market value is recognized as a charge-off through the allowance for loan losses. Subsequently, should the fair market value of an asset less the estimated cost to sell decline to less than the carrying amount of the asset, the deficiency is recognized in the period in which it becomes known and is included in noninterest expense.

19

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

At June 30, 2014 and December 31, 2013, the Company had balances in non-performing assets consisting of the following:

	June 30, 2014			December 31, 2013
	(Dollar amounts in thousands)
Other real estate owned and foreclosed assets
Residential Real Estate	$	715		$	107
Commercial	70			70
Consumer	190			850
Total other real estate owned and foreclosed assets	975			1,027
Total non-accrual loans	3,752			4,344
Total non-performing assets	$	4,727		$	5,371
Non-accrual loans/Total loans	0.48		%	0.53		%
Non-performing assets/Total assets	0.34		%	0.39		%

NOTE 5 — Derivative Financial Instruments

The Company has entered into commitments with prospective residential mortgage borrowers to originate loans whereby the interest rate on the loan is determined prior to funding and the borrowers have locked into that interest rate. The interest rate lock commitments on loans originated for sale are recorded at fair value in accordance with ASC 815, “Derivatives and Hedging,” and are recorded as an other asset or an accrued liability in the consolidated balance sheets. The estimated fair values of the interest rate lock commitments are based on quoted secondary market pricing, include the fair value of the servicing rights based on the discounted present value of expected future cash flows, and assume an approximate closure rate based on recent historical experience. Changes in the fair value of interest rate lock commitments are recorded in current earnings as a component of net gains on sales of loans.

To manage the interest rate risk associated with interest rate lock commitments and mortgage loans held for sale, the Company may enter into forward loan sales commitments to deliver mortgage loan inventory to investors. The estimated fair values of forward loan sales commitments are based on quoted secondary market pricing. The fair values of the forward loan sales commitments are recorded as an other asset or an accrued liability in the consolidated balance sheets. Changes in the fair values of forward loan sales commitments are recorded in current earnings as a component of net gains on sales of loans.

The outstanding notional value and fair values of outstanding positions as of June 30, 2014, and 2013, and December 31, 2013, and the recorded gains and losses during the six months ended June 30, 2014 and 2013, and the year ended December 31, 2013 were as follows:

	Outstanding Notional Balance		Fair Value		Recorded (Losses)/Gains
	(In thousands)
June 30, 2014:
Interest rate lock commitments	$	3,553	$	5	$	(51	)
December 31, 2013:
Interest rate lock commitments	$	3,453	$	56	$	(208	)
June 30, 2013:
Interest rate lock commitments	$	5,025	$	49	$	(215	)

The Company had no forward loan sales commitments at June 30, 2014, December 31, 2013, or June 30, 2013.

20

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

NOTE 6 — Other Borrowings

Beginning July 26, 2007, the Company entered into sales of securities under agreements to repurchase (“Repurchase Agreements”) with PNC Bank, N.A. (“PNC”). The Repurchase Agreements are structured as the sale of a specified amount of identified securities to PNC which the Company has agreed to repurchase five years after the initial sale. The Repurchase Agreements are treated as financings, and the obligations to repurchase securities sold are included in other borrowings in the consolidated balance sheets. The underlying securities continue to be carried as assets of the Company, and the Company is entitled to receive interest and principal payments on the underlying securities. The Company had $2.0 million in repurchase agreements outstanding at June 30, 2014 and December 31, 2013. These repurchase agreements were secured by investment securities with a fair value of $2.6 million and $2.2 million at June 30, 2014 and December 31, 2013, respectively.

NOTE 7 — Employee Benefit Plans

Employee Stock Ownership Plan

OmniAmerican Bank adopted an Employee Stock Ownership Plan (“ESOP”) effective January 1, 2010. The ESOP enables all eligible employees of OmniAmerican Bank to share in the growth of the Company through the acquisition of Company common stock. Employees are generally eligible to participate in the ESOP after completion of one year of service and attaining age 21.

The ESOP purchased 8% of the shares sold in the initial public offering of the Company (952,200 shares). This purchase was facilitated by a note payable to the Company from the ESOP in the amount of $9.5 million. The note is secured by a pledge of the ESOP shares. The shares pledged as collateral are reported as unallocated ESOP shares in the accompanying consolidated balance sheets. The corresponding note is to be paid back in 25 approximately equal annual payments of $561,000 on the last day of each fiscal year, beginning December 31, 2010, including interest at an adjustable rate equal to the Wall Street Journal prime rate (3.25% as of June 30, 2014 and December 31, 2013). The note payable and the corresponding note receivable have been eliminated for consolidation purposes.

The Company may make discretionary contributions to the ESOP in the form of debt service. Dividends received on the unallocated ESOP shares, if any, are utilized to service the debt. Shares are released for allocation to plan participants based on principal and interest payments of the note. Compensation expense is recognized based on the number of shares allocated to plan participants each year at the average market price of the stock for the current year. Released ESOP shares become outstanding for earnings per share computations.

As compensation expense is incurred, the unallocated ESOP shares account is reduced based on the original cost of the stock. The difference between the cost and average market price of shares released for allocation is applied to additional paid-in capital.

The ESOP shares as of June 30, 2014 and December 31, 2013 were as follows:

	June 30, 2014		December 31, 2013
Allocated shares	171,396		152,352
Unearned shares	780,804		799,848
Total ESOP shares	952,200		952,200
Fair value of unearned shares (in thousands)	$	19,520	$	17,101
Year-to-date compensation expense recognized from the release of shares from the ESOP (in thousands)	447		893

Pension Plan

The Company has a noncontributory defined benefit pension plan (the “Pension Plan”) that provides for benefits to be paid to eligible employees at retirement based primarily upon years of service with the Company and compensation levels at retirement. Effective December 31, 2006, the Company froze benefits under the Pension Plan, so that no further benefits would be earned by employees after that date. In addition, no new participants may be added to the Pension Plan after December 31, 2006.

21

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

The net periodic pension cost for the three and six months ended June 30, 2014 and 2013 includes the following components:

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
Interest cost on projected benefit obligation	$	55		$	57		$	110		$	114
Expected return on assets	(86		)	(74		)	(172		)	(148		)
Amortization of net loss	11			48			22			96
Net periodic pension cost	$	(20	)	$	31		$	(40	)	$	62

Share-Based Compensation

At its annual meeting held May 24, 2011, the Company’s shareholders approved the OmniAmerican Bancorp, Inc. 2011 Equity Incentive Plan (the “Plan”) which provides for the grant of stock-based and other incentive awards to officers, employees, and directors of the Company. The Plan provides the board or a committee thereof with the flexibility to award no less than half the eligible awards, constituting 7% of the shares issued in the Company’s initial public offering, in the form of stock options and up to 7% of the shares issued in the initial public offering in the form of restricted stock. By resolution by the board of directors, the board confirmed that restricted stock awards will not exceed 4% of the common stock sold in the Company’s initial public offering. Pursuant to board resolution, 1,190,250 options to purchase shares of common stock and 476,100 restricted shares of common stock were made available. Share-based compensation expense for the three and six months ended June 30, 2014 and 2013 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Share-based compensation expense	$	616	$	499	$	1,041	$	894

Restricted Stock

Compensation expense for restricted stock is recognized over the vesting period of the awards based on the fair value of the stock at grant date, which is determined using the last sale price as quoted on the NASDAQ Stock Market. Shares awarded to employees vest at a rate of 20% of the initially awarded amount per year, beginning on the first anniversary date of the award, and are contingent upon continuous service by the recipient through the vesting date. Shares awarded to directors vest at rates of 20% to 33% of the initially awarded amount per year, beginning on the first anniversary date of the award, and are contingent upon continuous service by the recipient through the vesting date. Under the terms of the Plan, awarded shares are restricted as to transferability and may not be sold, assigned, or transferred prior to vesting. The vesting period is subject to acceleration of vesting upon the involuntary termination of the award recipient’s service following a change in control of the Company or upon the termination of the award recipient’s service due to death or disability. Total restricted shares issuable pursuant to board resolution were 476,100 at June 30, 2014, of which 392,616 shares had been issued under the Plan through June 30, 2014.

A summary of changes in the Company’s non-vested restricted shares for the six months ended June 30, 2014 follows:

	Shares		Weighted- Average Grant Date Fair Value Per Share
Non-vested at January 1, 2014	179,583		$	19.18
Granted	97,078		21.16
Vested	(29,170	)	(14.59		)
Forfeited	(6,000	)	(21.06		)
Non-vested at June 30, 2014	241,491		$	20.48

As of June 30, 2014, the Company had $3.5 million of unrecognized compensation expense related to non-vested shares of restricted stock awarded under the Plan. The unrecognized compensation expense is expected to be recognized over a weighted-

22

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

average period of 3.67 years. The Company applied an estimated forfeiture rate of 13.03% to employees’ and 0.00% to directors’ shares based on the historical turnover rates.

Stock Options

Under the terms of the Plan, stock options may not be granted with an exercise price less than the fair market value of the Company’s common stock on the date the option is granted and may not be exercised later than 10 years after the grant date. The fair market value is the last sale price as quoted on the NASDAQ Stock Market on the date of grant. All stock options granted must vest over at least three years and not more than five years, subject to acceleration of vesting upon the involuntary termination of the award recipient’s service following a change in control of the Company or upon the termination of the award recipient’s service due to death or disability.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model. The risk-free interest rate utilized in the model is the implied yield available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the stock option in effect at the time of the grant. Although the contractual term of the stock options granted is 10 years, the expected term of the stock options is less because option restrictions do not permit recipients to sell or hedge their options. Management believes these restrictions encourage exercise of the option before the end of the contractual term. The Company does not have sufficient historical information about its own employees’ vesting behavior; therefore, the expected term of stock options is estimated using the average of the vesting period and contractual term. The expected volatility is based on historical information about the Company's stock volatility and the volatility of peer banks.

The weighted average fair value of each stock option granted during the six months ended June 30, 2014 was $7.03. The fair value of options granted was determined using the following weighted-average assumptions as of grant date:

Risk-free interest rate	2.12	%
Expected term of stock options (years)	7.5
Expected stock price volatility	30.64	%
Expected dividends	0.90	%
Forfeiture rate — for officers and employees	13.03	%
Forfeiture rate — for directors	—	%

A summary of activity in the stock option portion of the Plan for the six months ended June 30, 2014 follows:

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2014	394,933		$	16.13	7.54	$	2,088
Granted	428,788		21.11		9.68	1,668
Exercised	(12,272	)	14.29		—	(108		)
Forfeited	(22,400	)	21.09		—	(88		)
Expired	(2,400	)	22.24		—	(7		)
Outstanding at June 30, 2014	786,649		$	18.71	8.44	$	4,946
Fully vested and expected to vest	683,953		$	18.53	8.34	$	4,425
Exercisable at June 30, 2014	198,117		$	14.99	6.74	$	1,982

As of June 30, 2014, the Company had $3.1 million of total unrecognized compensation expense related to non-vested stock options. That expense is expected to be recognized over a weighted-average period of 4.04 years. The intrinsic value for stock options is calculated based on the difference between the exercise price of the underlying awards and the market price of our common stock as of June 30, 2014.

23

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

NOTE 8 — Earnings Per Share

Basic earnings per common share is computed by dividing net income adjusted for distributed and undistributed earnings to participating securities by the weighted-average number of common shares outstanding for the period, reduced for average unallocated ESOP shares and average unvested restricted stock awards. Unvested share-based awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock awards and options) were exercised or converted to common stock, or resulted in the issuance of common stock that then shared in the Company’s earnings. Diluted earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding for the period increased for the dilutive effect of unexercised stock options and unvested restricted stock awards. The table below presents the information used to compute basic and diluted earnings per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(Dollars in thousands, except per share data)
Earnings:
Net income	$	898		$	674		$	2,427		$	2,607
Distributed and undistributed earnings to participating securities	(22		)	—			(54		)	—
Income available to common shareholders	876			674			2,373			2,607
Basic shares:
Weighted-average common shares outstanding	11,549,939			11,446,129			11,518,158			11,445,175
Less: Average unallocated ESOP shares	(785,565		)	(822,066		)	(788,739		)	(826,827		)
Average unvested restricted stock awards	(267,967		)	(247,374		)	(240,108		)	(250,489		)
Average shares for basic earnings per share	10,496,407			10,376,689			10,489,311			10,367,859
Net income per common share, basic	$	0.08		$	0.06		$	0.23		$	0.25
Diluted shares:
Weighted-average common shares outstanding for basic earnings per common share	10,496,407			10,376,689			10,489,311			10,367,859
Add: Dilutive effects of share-based compensation plan	82,891			148,869			73,631			157,534
Average shares for diluted earnings per share	10,579,298			10,525,558			10,562,942			10,525,393
Net income per common share, diluted	$	0.08		$	0.06		$	0.22		$	0.25

NOTE 9 — Fair Value Measurements

ASC 820, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

• Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.), or inputs that are derived principally from or corroborated by market data by correlation or other means.

• Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the fair value hierarchy, is set forth below.

24

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

Securities available for sale:Securities available for sale are valued at fair value on a recurring basis. The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

Interest rate lock commitments: Interest rate locks on commitments to originate loans for the held for sale portfolio are reported at fair value in other assets on the consolidated balance sheets with changes in value recorded in current earnings. The estimated fair values of the interest rate lock commitments are based on quoted secondary market pricing, include the fair value of the servicing rights based on the discounted present value of expected future cash flows, and assume an approximate closure rate based on recent historical experience. At June 30, 2014, for loans with terms of 180 months, the fair value of the servicing rights was estimated as 0.93% of the loan balance if the loan had an interest rate of 3.50% or lower, 0.89% of the loan balance if the loan had an interest rate of higher than 3.50% and equal to or less than 4.00%, and 0.83% if the interest rate was higher than 4.00%. For loans with terms greater than 180 months, the fair value was estimated as 1.25% of the loan balance if the loan had an interest rate of 4.00% or lower, 1.17% of the loan balance if the loan had an interest rate higher than 4.00% but equal to or less than 4.50%, 1.10% of the loan balance if the loan had an interest rate higher than 4.50% but less than 5.00%, and 0.99% of the loan balance if the loan had an interest rate of 5.00% or higher. At December 31, 2013, the fair value of the servicing rights was estimated as 1.00% of the loan balance for loans with terms of 180 months, and for loans with terms of greater than 180 month, the fair value was estimated as 1.31% of the loan balance if the loan had an interest rate of 4.50% or lower and 1.08% of the loan balance if the loan had an interest rate higher than 4.50%. A significant change in the closure rate may result in a significant change in the ending fair value measurement of these derivatives relative to their total fair value. At June 30, 2014 and December 31, 2013, the estimated closure rate based on historical experience over the preceding two-year period was 82.4% and 77.1%, respectively. Because the closure rate and fair value of servicing rights are significant unobservable assumptions, interest rate lock commitments are included in Level 3 of the hierarchy.

Assets and liabilities measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at June 30, 2014, Using						Total Fair Value at June 30, 2014
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(In thousands)
Measured on a recurring basis:
Assets:
Investment securities available for sale:
U.S. government sponsored mortgage-backed securities	$	—	$	293,577	$	—	$	293,577
U.S. government sponsored collateralized mortgage obligations	—		153,449		—		153,449
U.S. government agency securities	—		4,738		—		4,738
Municipal obligations	—		176		—		176
Other equity securities	—		6,016		—		6,016
Interest rate lock commitments	—		—		5		5

25

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

	Fair Value Measurements at December 31, 2013 Using						Total Fair Value at December 31, 2013
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(In thousands)
Measured on a recurring basis:
Assets:
Investment securities available for sale:
U.S. government sponsored mortgage-backed securities	$	—	$	279,588	$	—	$	279,588
U.S. government sponsored collateralized mortgage obligations	—		140,576		—		140,576
U.S. government agency securities	—		4,538		—		4,538
Municipal obligations	—		170		—		170
Other equity securities	—		5,903		—		5,903
Interest rate lock commitments	—		—		56		56

A reconciliation and income statement classification of gains and losses for the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2014 and 2013 has not been provided since the amounts are not significant.

In accordance with ASC Topic 820, certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial assets or liabilities required to be measured at fair value on a nonrecurring basis include impaired loans and mortgage servicing rights. Nonfinancial assets or liabilities required to be measured at fair value on a nonrecurring basis include other real estate owned.

Impaired loans (loans which are not expected to repay all principal and interest amounts due in accordance with the original contractual terms) are measured at an observable market price (if available) or at the fair value of the loan’s collateral (if collateral dependent). Fair value of the loan’s collateral is determined by appraisals or independent valuation which is then adjusted for the estimated costs related to liquidation of the collateral. Management’s ongoing review of appraisal information may result in additional discounts or adjustments to valuation based upon more recent market sales activity or more current appraisal information derived from properties of similar type and/or locale. A significant portion of the Company’s impaired loans are measured using the estimated fair market value of the collateral less the estimated costs to sell. Therefore, the Company has categorized its impaired loans as Level 3.

The following table presents impaired loans that were remeasured and reported at fair value through a specific reserve of the allowance for loan losses based upon the fair value of the underlying collateral during the six months ended June 30, 2014 and 2013:

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Carrying value of impaired loans	$	1,242		$	1,207
Specific reserve	(503		)	(294		)
Fair Value	$	739		$	913

Mortgage servicing rights are carried at the lower of amortized cost or estimated fair value. The estimated fair values of mortgage servicing rights are classified as Level 3 because they are obtained from independent third-party valuations through an analysis of cash flows and incorporating estimates of assumptions market participants would use in determining fair value, including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market-driven data, such as the market’s perception of future interest rate movements. The Company’s mortgage servicing rights were recorded at $1.6 million and $1.5 million at June 30, 2014 and December 31, 2013, respectively.

Non-financial assets measured at fair value on a non-recurring basis are limited to other real estate owned. Other real estate owned is carried at fair value less estimated selling costs (as determined by independent appraisal) within Level 3 of the fair value hierarchy. At the time of foreclosure, the value of the underlying loan is written down to the fair value of the real estate to

26

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

be acquired by a charge to the allowance for loan losses, if necessary. The fair value is reviewed periodically and subsequent write-downs are recorded accordingly. The following table represents other real estate owned that was remeasured and reported at fair value as of June 30, 2014 and June 30, 2013:

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Carrying value of other real estate owned prior to remeasurement	$	954		$	1,631
Less: charge-offs recognized in the allowance for loan losses at initial acquisition	(96		)	(18		)
Add: fair value adjustments recognized in noninterest income at initial acquisition	—			43
Less: subsequent write-downs included in net loss on write-down of other real estate owned	(22		)	(22		)
Less: sales of other real estate owned	(228		)	(422		)
Carrying value of remeasured other real estate owned at end of period	$	608		$	1,212

27

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

Significant unobservable inputs used in Level 3 fair value measurements for financial assets and nonfinancial assets measured at fair value on a non-recurring basis at June 30, 2014 and December 31, 2013, are summarized below:

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value (In thousands)		Valuation Techniques	Unobservable Input	Range  (Average)
June 30, 2014:
Impaired loans, net of allowance	$	484	Discounted Cash Flow Analysis	Interest rate	1.5% - 7.0% (3.9%)
				Loan term (in months)	60 - 120 (95)
	$	255	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	0% - 6.0% (5.4%)
				Estimated property maintenance	0% - 3.6% (3.3%)
Mortgage servicing rights	$	1,552	Discounted Cash Flow Analysis	Interest rate	2.6% - 7.9% (4.3%)
				Loan term (in months)	111 - 527 (312)
Other real estate owned	$	785	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	0% - 8.0% (6.7%)
				Estimated property maintenance	0% (0%)
December 31, 2013:
Impaired loans, net of allowance	$	840	Discounted Cash Flow Analysis	Interest rate	1.5% - 7.0% (4.9%)
				Loan term (in months)	60 - 120 (91)
	$	230	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	6.0% (6.0%)
				Estimated property maintenance	3.6% (3.6%)
Mortgage servicing rights	$	1,473	Discounted Cash Flow Analysis	Interest rate	2.6% - 7.9% (4.3%)
				Loan term (in months)	82 - 527 (312)
Other real estate owned	$	177	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	0.0% - 6.0% (2.4%)
				Estimated property maintenance	0% (0%)

There were no transfers between levels during the six months ended June 30, 2014 or the year ended December 31, 2013.

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The methodologies for the other financial assets and financial liabilities are discussed below:

Cash and cash equivalents: The carrying amounts for cash and cash equivalents approximate fair values.

Accrued interest receivable and payable: The carrying amounts for accrued interest receivable and payable approximate fair values.

28

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

Other investments: The carrying amount for other investments, which consists primarily of Federal Home Loan Bank stock, approximates fair values.

Loans held for sale: The fair value of loans held for sale is based on quoted market prices in the secondary market for loans with similar characteristics.

Loans: The estimated fair values for all fixed-rate loans are derived utilizing discounted cash flow analyses, the calculations of which are performed on groupings of loan receivables that are similar in terms of loan type and characteristics. The expected future cash flows of each grouping are discounted using the U.S. Treasury curve and current offering rates to calculate a discount spread to the curve. The estimated fair value for variable rate loans is the carrying amount. The impact of delinquent loans on the estimation of the fair values described above is not considered to have a material effect and, accordingly, delinquent loans have been disregarded in the valuation methodologies employed. Significant inputs to the fair value measurement of the loan portfolio are unobservable, and as such are classified as Level 3.

Deposits: The estimated fair value of demand deposit accounts is the carrying amount. The fair value of fixed-maturity certificates is estimated by discounting the estimated cash flows using the interest curve and current offering rates to calculate a discount spread to the curve.

Borrowed funds: The estimated fair value for borrowed funds is determined by discounting the estimated cash flows using the current rate at which similar borrowings would be made with similar ratings and maturities.

Off-balance sheet financial instruments: The fair values for the Company’s off-balance sheet commitments are estimated based on fees charged to others to enter into similar agreements taking into account the remaining terms of the agreements and credit standing of the members. The estimated fair value of these commitments is not significant.

The carrying amount and estimated fair value of the Company’s financial instruments at June 30, 2014 and December 31, 2013 are summarized as follows:

	June 30, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets:
Level 1 inputs:
Cash and cash equivalents	$	21,210	$	21,210	$	15,880	$	15,880
Level 2 inputs:
Securities available for sale	457,956		457,956		430,775		430,775
Other investments	17,106		17,106		19,782		19,782
Loans held for sale	876		882		1,509		1,522
Accrued interest receivable	3,259		3,259		3,447		3,447
Level 3 inputs:
Loans, net	784,076		793,853		824,881		840,478
Mortgage servicing rights	1,552		1,552		1,473		1,473
Interest rate lock commitments	5		5		56		56
Financial liabilities:
Level 2 inputs:
Federal Home Loan Bank advances	$	328,667	$	327,125	$	362,000	$	360,576
Accrued interest payable	337		337		389		389
Level 3 inputs:
Deposits	822,008		832,456		813,574		824,856
Repurchase agreements	2,000		2,026		2,000		2,049
Off-balance sheet financial instruments:
Loan commitments	$	—	$	—	$	—	$	—
Letters of credit	—		—		—		—

29

OmniAmerican Bancorp, Inc. and Subsidiary

Condensed Notes to Unaudited Consolidated Interim Financial Statements — (Continued)

NOTE 10 — Business Combination

On April 28, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Southside Bancshares, Inc. (“Southside”), and Omega Merger Sub, Inc., a wholly owned subsidiary of Southside (“Merger Sub”), whereby Merger Sub will merge with and into the Company with the Company as the surviving corporation (the “First Merger”). Immediately after the First Merger, the Company will be merged into Southside and, subsequently, OmniAmerican Bank will be merged into Southside’s subsidiary, Southside Bank. If the First Merger is completed, shareholders of the Company will receive 0.4459 of a share of Southside’s common stock plus $13.125 in cash for each outstanding share of OmniAmerican common stock. Concurrently with the execution of the Merger Agreement, Southside entered into voting and support agreements with each non-employee director of the Company pursuant to which each director agreed to, among other things, vote his or her shares in favor of the Merger Agreement. Completion of the mergers is subject to the approval of the First Merger by the Company’s shareholders, the approval of the issuance of shares of Southside common stock to OmniAmerican shareholders in connection with the First Merger, approval by the appropriate regulatory agencies, and other customary terms and conditions as described in the Merger Agreement. The Merger Agreement was filed with the Securities and Exchange Commission as an exhibit to the Company’s Form 10-Q for the Quarterly Period Ended March 31, 2014.

NOTE 11 — Commitments and Contingencies

On June 25, 2014, a purported stockholder of OmniAmerican filed a lawsuit in the Circuit Court for Baltimore City, Maryland captioned McDougal v. OmniAmerican Bancorp, Inc., et al., Case No. 24-C-14-003920, naming OmniAmerican, members of OmniAmerican’s board of directors, Southside and Merger Sub as defendants. The lawsuit is purportedly brought on behalf of a putative class of OmniAmerican’s public stockholders and seeks a declaration that it is properly maintainable as a class action and a certification of the plaintiff and her counsel as class representative and class counsel. The lawsuit asserts direct and derivative claims against OmniAmerican’s directors and alleges that they breached their fiduciary duties and that OmniAmerican, Southside and Merger Sub aided and abetted those alleged breaches by, among other things, (a) failing to take steps to maximize shareholder value for OmniAmerican public stockholders; (b) failing to properly value OmniAmerican; (c) failing to protect against conflicts of interest; (d) failing to disclose material information necessary for OmniAmerican stockholders to make an informed vote on the First Merger; and (e) agreeing to deal protection devices that preclude a fair sales process. Among other relief, the plaintiff seeks to enjoin the mergers. On July 9, 2014, the plaintiff filed a motion to transfer the case to Maryland's Business and Technology Case Management Program.

OmniAmerican and Southside believe the claims asserted are without merit and intend to vigorously defend against this lawsuit.

30

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “may,” and words of similar meaning. These forward-looking statements include, but are not limited to:

• statements of our goals, intentions, and expectations;

• statements regarding our business plans, prospects, growth, and operating strategies;

• statements regarding the asset quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this Quarterly Report.

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:

• general economic conditions, either nationally or in our market areas, that are worse than expected;

• competition among depository and other financial institutions;

• inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;

• adverse changes in the securities markets;

• changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

• our ability to enter new markets successfully and capitalize on growth opportunities;

• our ability to successfully integrate acquired entities, if any;

• changes in consumer spending, borrowing, and savings habits;

• changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission, and the Public Company Accounting Oversight Board;

• inability of borrowers and/or third-party providers to perform their obligations to us;

• the effect of developments in the secondary market affecting our loan pricing;

• changes in our organization, compensation, and benefit plans;

• changes in our financial condition or results of operations that reduce capital available to pay dividends;

• changes in the financial condition or future prospects of issuers of securities that we own;

• changes resulting from intense compliance and regulatory costs associated with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”);

• changes in our regulatory capital resulting from compliance with the final Basel III capital rules;

• the Company’s pending merger with Southside could have a negative impact on our business; and

31

• the failure to complete the merger with Southside could negatively impact our business.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. For a more detailed discussion of these and other factors that may affect our business, see the discussion under the caption “Risk Factors” in our Annual Report on Form 10-K and the discussion in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

OmniAmerican Bancorp, Inc. (referred to herein as “we,” “us,” “our,” or the “Company”) is the Maryland corporation that owns all of the outstanding shares of common stock of OmniAmerican Bank (the “Bank”) following the January 20, 2010 completion of the mutual-to-stock conversion of the Bank and initial public stock offering of the Company. The Company has no significant assets other than all of the outstanding shares of common stock of the Bank and the net proceeds that we retained in connection with the offering.

The Bank is a federally chartered savings bank headquartered in Fort Worth, Texas. The Bank was originally chartered in 1956 as a federal credit union serving the active and retired military personnel of Carswell Air Force Base. The Bank converted from a Texas credit union charter to a federal mutual savings bank charter on January 1, 2006. The objective of the charter conversion was to convert to a savings bank charter in order to carry out our business strategy of broadening our banking services into residential real estate and commercial lending, selling loans, and servicing loans for others, which has allowed us to better serve the needs of our customers and the local community.

Our principal business consists primarily of accepting deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in loans and investments. Our lending activity has focused primarily on mortgage loans secured by residential real estate, consumer loans, consisting primarily of indirect automobile loans (automobile loans referred to us by automobile dealerships), and to a lesser extent, commercial real estate, real estate construction, commercial business, and direct automobile loans. In recent years, we have increased our residential real estate, real estate construction, commercial real estate and commercial business lending while deemphasizing our consumer lending activities.

On April 28, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Southside Bancshares, Inc. (“Southside”), and Omega Merger Sub, Inc., a wholly owned subsidiary of Southside (“Merger Sub”), whereby Merger Sub will merge with and into the Company with the Company as the surviving corporation (the “First Merger”). Immediately after the First Merger, the Company will be merged into Southside and, subsequently, OmniAmerican Bank will be merged into Southside’s subsidiary, Southside Bank. If the First Merger is completed, shareholders of the Company will receive 0.4459 of a share of Southside’s common stock plus $13.125 in cash for each outstanding share of OmniAmerican common stock. Concurrently with the execution of the Merger Agreement, Southside entered into voting and support agreements with each non-employee director of the Company pursuant to which each director agreed to, among other things, vote his or her shares in favor of the Merger Agreement. Completion of the mergers is subject to the approval of the First Merger by the Company’s shareholders, the approval of the issuance of shares of Southside common stock to OmniAmerican shareholders in connection with the First Merger, approval by the appropriate regulatory agencies, and other customary terms and conditions as described in the Merger Agreement. The Merger Agreement was filed with the Securities and Exchange Commission as an exhibit to the Company’s Form 10-Q for the Quarterly Period Ended March 31, 2014.

On October 9, 2013, the Company announced its plan to discontinue the purchase of auto loans originated through auto dealerships in order to further strengthen the Company’s focus on its commercial, direct retail and mortgage lending strategies. In addition, the Company eliminated 24 positions in the auto lending and administrative functions, or approximately eight percent of its total workforce.

Loans are originated from our main office in Fort Worth, Texas, and from our branch network in the Dallas-Fort Worth Metroplex and surrounding communities in North Texas. We generally sell the long-term, fixed-rate one- to four-family residential mortgage loans (terms 15 years or greater) that we originate either to the Federal National Mortgage Association on a servicing-retained basis or into the secondary mortgage market on a servicing-released basis, in order to generate fee income and for interest rate risk management purposes. We retain in our portfolio all adjustable-rate loans that we originate, as well as fixed-rate one- to four-family residential mortgage loans with terms less than 15 years.

In addition to loans, we invest in a variety of investments, primarily government sponsored mortgage-backed securities and government sponsored collateralized mortgage obligations, and to a lesser extent municipal obligations, agency bonds and equity securities. At June 30, 2014, our investment securities portfolio had an amortized cost of $454.1 million.

32

We attract retail deposits from the general public in the areas surrounding our main office and our branch offices. We offer a variety of deposit accounts, including noninterest-bearing and interest-bearing demand accounts, savings accounts, money market accounts, and certificates of deposit.

Our revenues are derived primarily from interest on loans, mortgage-backed securities, and other investment securities. We also generate revenues from fees and service charges. Our primary sources of funds are deposits, principal and interest payments on securities and loans, and borrowings.

The Securities and Exchange Commission’s Division of Corporation Finance staff issued disclosure guidance that summarizes its observations about Management’s Discussion and Analysis of Financial Condition and Results of Operations and accounting policy disclosures of smaller financial institutions. The focus of the guidance is on asset quality and loan accounting issues. Please refer to Note 4 of our unaudited interim financial statements for our detailed disclosures related to asset quality and loan accounting issues.

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2014.

Comparison of Financial Condition at June 30, 2014 and December 31, 2013

Assets. Total assets slightly decreased to $1.38 billion at June 30, 2014 from $1.39 billion at December 31, 2013. Loans, net of the allowance for loan losses and deferred fees and discounts, decreased $40.8 million while securities available for sale increased $27.2 million, and cash and cash equivalents increased $5.3 million.

Cash and Cash Equivalents. Total cash and cash equivalents increased$5.3 million, or 33.6%, to $21.2 million at June 30, 2014from $15.9 million at December 31, 2013. The increase in total cash and cash equivalents reflects loan principal repayments of $117.6 million, principal repayments and maturities of securities of $32.9 million, proceeds from the sales of loans of $26.2 million, proceeds from the sales of securities available for sale of $18.1 million, and a net increase in deposits of $8.4 million. The loans sold during the six months ended June 30, 2014 consisted of one- to four-family residential real estate loans with terms 15 years or greater. These loans were sold in order to manage our interest rate risk. These increases in cash and cash equivalents were partially offset by $72.3 million in cash used to purchase securities classified as available for sale, $105.9 million in cash used to originate loans, and a $33.3 million net decrease in Federal Home Loan Bank advances during the six months ended June 30, 2014.

Loans held for sale. Loans held for sale decreased$633,000, or 41.9%, to $876,000 at June 30, 2014 from $1.5 million at December 31, 2013. The decrease in loans held for sale resulted from $25.8 million in sales, partially offset by originations of $25.2 million during the six months ended June 30, 2014.

Securities. Securities classified as available for sale increased$27.2 million, or 6.3%, to $458.0 million at June 30, 2014 from $430.8 million at December 31, 2013. The increase was primarily due to purchases of $72.3 million in securities classified as available for sale and a decrease in unrealized losses of $6.7 million during the six months ended June 30, 2014, partially offset by principal repayments and maturities of $32.9 million, sales of investment securities of $17.5 million, and the amortization of net premiums on investments of $1.3 million. At June 30, 2014, securities classified as available for sale consisted of government sponsored mortgage-backed securities, government sponsored collateralized mortgage obligations, agency bonds, municipal obligations, and other equity securities.

33

Loans. Loans, net of the allowance for loan losses and deferred fees and discounts, decreased$40.8 million, or 4.9%, to $784.1 million at June 30, 2014 from $824.9 million at December 31, 2013.

	June 30, 2014			December 31, 2013			Dollar change			Percent change
	(Dollars in thousands)
One- to four-family	$	269,233		$	262,723		$	6,510		2.5	%
Home equity	15,937			17,106			(1,169		)	(6.8	)
Commercial real estate	113,229			106,560			6,669			6.3
Real estate construction	59,886			59,648			238			0.4
Commercial business	78,381			69,320			9,061			13.1
Automobile, indirect	204,468			264,671			(60,203		)	(22.7	)
Automobile, direct	31,628			31,598			30			0.1
Other consumer	15,028			15,330			(302		)	(2.0	)
Total loans	787,790			826,956			(39,166		)	(4.7	)
Other items:
Unearned fees and discounts, net	2,674			4,370			(1,696		)	(38.8	)
Allowance for loan losses	(6,388		)	(6,445		)	57			(0.9	)
Total loans, net	$	784,076		$	824,881		$	(40,805	)	(4.9	)%

The decrease in indirect automobile loans of $60.2 million, or 22.7%, to $204.5 million at June 30, 2014 from $264.7 million at December 31, 2013, was primarily due to the discontinuation of our indirect lending program in October 2013. This decrease was partially offset by an increase in commercial business loans of $9.1 million, or 13.1%, to $78.4 million at June 30, 2014 from $69.3 million at December 31, 2013, an increase in commercial real estate loans of $6.6 million, or 6.3%, to $113.2 million at June 30, 2014 from $106.6 million at December 31, 2013, and an increase in one- to four-family residential real estate loans of $6.5 million, or 2.5% to $269.2 million at June 30, 2014 from $262.7 million at December 31, 2013. We continue to monitor the composition of our loan portfolio and seek to obtain a reasonable return while containing the potential for risk of loss.

Allowance for Loan Losses. The allowance for loan losses decreased $57,000 during the six months ended June 30, 2014. The decrease was due to a $39,000 decrease in the general reserve and an $18,000 decrease in specific reserve to $503,000 at June 30, 2014 from $521,000 at December 31, 2013. Impaired loans with balances totaling $10.4 million did not require specific reserves at June 30, 2014. Impaired loans with balances totaling $11.4 million did not require specific reserves at December 31, 2013. The allowance for loan losses represented 0.81% and 0.78% of total loans at June 30, 2014 and December 31, 2013, respectively.

The significant changes in the amount of the allowance for loan losses during the six months ended June 30, 2014 related to a (i) $413,000 decrease in the allowance for loan losses attributable to unimpaired consumer loans primarily due to the discontinuation of the indirect lending program in October 2013, partially offset by a (ii) $354,000 increase in the allowance for loan losses attributable to unimpaired commercial loans resulting from a $16.7 million, or 7.2%, increase in unimpaired commercial loans outstanding at June 30, 2014 from December 31, 2013. Management also considered local economic factors and unemployment as well as the higher risk profile of real estate construction and commercial business loans when evaluating the adequacy of the allowance for loan losses as it pertains to these types of loans.

Bank-Owned Life Insurance. Bank-owned life insurance increased$717,000, or 1.6%, to $44.3 million at June 30, 2014 from $43.6 million at December 31, 2013. The increase in bank-owned life insurance is due to the increase in the cash surrender value of the policies.

Deposits. Deposits increased $8.4 million, or 1.0%, to $822.0 million at June 30, 2014 from $813.6 million at December 31, 2013.

34

	June 30, 2014		December 31, 2013		Dollar change			Percent change
	(Dollars in thousands)
Noninterest-bearing demand	$	71,952	$	58,071	$	13,881		23.9	%
Interest-bearing demand	145,495		146,818		(1,323		)	(0.9	)
Savings	108,919		105,030		3,889			3.7
Money market	232,414		233,918		(1,504		)	(0.6	)
Certificates of deposit	263,228		269,737		(6,509		)	(2.4	)
Total deposits	$	822,008	$	813,574	$	8,434		1.0	%

The increase in deposits was primarily attributable to an increase in noninterest-bearing demand deposits of $13.9 million. The increase in noninterest-bearing deposits was due to an increase in commercial deposits which resulted primarily from our efforts to deepen our commercial relationships. Savings deposits also increased $3.9 million, primarily due to organic growth in the bank’s 14 branches. These increases in deposits were partially offset by a $6.5 milliondecrease in certificates of deposit, a $1.5 million decrease in money market deposits, and a $1.3 million decrease in interest-bearing demand deposits. The decrease in certificates of deposits resulted from certificates of deposit that matured and were not renewed.

Borrowings. Federal Home Loan Bank advances decreased $33.3 million, or 9.2%, to $328.7 million at June 30, 2014 from $362.0 million at December 31, 2013. The decrease in Federal Home Loan Bank advances was attributable to scheduled maturities of $98.3 million advances, offset by new advances of $65.0 million during the six months ended June 30, 2014. Other borrowings remained unchanged at $2.0 million at June 30, 2014 and December 31, 2013.

Stockholders’ Equity. At June 30, 2014, our stockholders’ equity was $214.5 million, an increase of $7.4, or 3.6%, from $207.1 million at December 31, 2013.

	June 30, 2014			December 31, 2013			Dollar change		Percent change
	(Dollars in thousands)
Common stock	$	116		$	115		$	1	0.9	%
Additional paid-in capital	110,698			109,250			1,448		1.3	%
Unallocated ESOP shares	(7,808		)	(7,999		)	191		(2.4	)%
Retained earnings	109,660			108,304			1,356		1.3	%
Accumulated other comprehensive (loss) income	1,864			(2,528		)	4,392		(173.7	)%
Total stockholders’ equity	$	214,530		$	207,142		$	7,388	3.6	%

The increase in stockholders’ equity was primarily due to a decrease in unrealized losses on available for sale securities of $4.4 million after tax, net income of $2.4 million, share-based compensation expense of $1.0 million, and ESOP compensation expense of $447,000 during the six months ended June 30, 2014. These increases were partially offset by dividends declared and paid of $1.1 million.

Comparison of Operating Results for the Three Months Ended June 30, 2014 and 2013

General. Net income increased $224,000, or 33.2%, to $898,000 for the three months ended June 30, 2014 from $674,000 for the prior year period. The increase in net income reflected an increase in noninterest income of $531,000, an increase in net interest income of $505,000, a decrease in the provision for loan losses of $375,000, and a $94,000 decrease in the income tax expense, partially offset by an increase in noninterest expense of $1.1 million.

Interest Income. Interest income increased $200,000, or 1.8%, to $11.6 million for the three months ended June 30, 2014 from $11.4 million for the three months ended June 30, 2013. The increase resulted primarily due to a $104.0 million, or 8.8%, increase in the average balance of interest-earning assets to $1.28 billion for the three months ended June 30, 2014 from $1.18 billion for the three months ended June 30, 2013, partially offset by a 25 basis point decrease in the average yield on interest-earning assets.

35

	Three Months Ended June 30,				Dollar change			Percent change
	2014		2013
	(Dollars in thousands)
Interest income:
Loans, including fees	$	8,934	$	9,265	$	(331	)	(3.6	)%
Securities—taxable	2,647		2,115		532			25.2
Securities—nontaxable	—		1		(1		)	—
Total interest income	$	11,581	$	11,381	$	200		1.8	%

The decrease in interest income on loans of $331,000 was primarily due to a decrease in the average yield on our loan portfolio of 29 basis points to 4.51% for the three months ended June 30, 2014 from 4.80% for the three months ended June 30, 2013, partially offset by an increase in the average balance of our loan portfolio of $21.4 million, or 2.8%, to $792.9 million for the three months ended June 30, 2014 from $771.5 million for the three months ended June 30, 2013

The increase in interest income on investment securities of $532,000 resulted primarily from a $69.5 million, or 17.7%, increase in the average balance of our securities portfolio to $461.1 million for the three months ended June 30, 2014 from $391.6 million for the three months ended June 30, 2013, primarily due to purchases of securities. In addition to the increase in the average balance of our securities portfolio, the average yield on our securities portfolio increased 13 basis points to 2.27% for the three months ended June 30, 2014 from 2.14% for the three months ended June 30, 2013.

Interest Expense. Interest expense decreased by $305,000, or 15.6%, to $1.6 million for the three months ended June 30, 2014 from $2.0 million for the three months ended June 30, 2013.

	Three Months Ended June 30,				Dollar change			Percent change
	2014		2013
	(Dollars in thousands)
Interest expense:
Deposits	$	1,023	$	1,390	$	(367	)	(26.4	)%
Borrowed funds	625		563		62			11.0
Total interest expense	$	1,648	$	1,953	$	(305	)	(15.6	)%

The decrease in interest expense on deposits of $367,000 resulted from a decrease in the average rate we paid on deposits and a decrease in the average balance of interest-bearing deposits. The average rate we paid decreased 19 basis points to 0.54% for the three months ended June 30, 2014 from 0.73% for the three months ended June 30, 2013, as we were able to reprice our deposits lower as market interest rates declined. The average balance of interest-bearing deposits decreased $7.0 million, or 0.9%, to $757.0 million for the three months ended June 30, 2014 from $764.0 million for the three months ended June 30, 2013. The decrease in the average balance of our interest-bearing deposits was due to decreases in the average balances of our certificates of deposit.

Interest expense on certificates of deposit decreased $371,000, or 30.3%, to $852,000 for the three months ended June 30, 2014 from $1.2 million for the three months ended June 30, 2013. The average rate paid on certificates of deposit decreased 41 basis points to 1.28% for the three months ended June 30, 2014 from 1.69% for the three months ended June 30, 2013, reflecting the continuing low market interest rate environment. In addition, the average balance of certificates of deposit decreased $22.2 million, or 7.7%, to $266.6 million for the three months ended June 30, 2014 from $288.8 million for the three months ended June 30, 2013.

The increase in interest expense on borrowed funds of $62,000 resulted primarily from an increase of $83.8 million, or 32.9%, in the average balance of borrowed funds to $338.2 million for the three months ended June 30, 2014 from $254.4 million for the three months ended June 30, 2013, partially offset by a 15 basis point decrease in the average rate paid on borrowed funds to 0.74% for the three months ended June 30, 2014 from 0.89% for the three months ended June 30, 2013.

Net Interest Income. Net interest income increased by $505,000, or 5.4%, to $9.9 million for the three months ended June 30, 2014 from $9.4 million for the prior year period. The increase in net interest income was primarily attributable to an increase of $104.0 million, or 8.8%, in the average balance of interest earning assets to $1.28 billion for the three months ended June 30, 2014 from $1.18 billion for the three months ended June 30, 2013. The increase in income was partially offset by an 8

36

basis point decrease in our interest rate spread to 3.01% for the three months ended June 30, 2014 from 3.09% for the three months ended June 30, 2013. Our net interest margin decreased 10 basis points to 3.10% for the three months ended June 30, 2014 from 3.20% for the three months ended June 30, 2013. The decrease in the net interest margin resulted primarily from a 29 basis point decrease in the yields on loans to 4.51% for the three months ended June 30, 2014 from 4.80% for the three months ended June 30, 2013. Partially offsetting the decrease in the yields on loans was a decrease in our average rates on certificates of deposit of 41 basis points to 1.28% for the three months ended June 30, 2014 from 1.69% for the three months ended June 30, 2013.

Provision for Loan Losses. We recorded a provision for loan losses of $725,000 for the three months ended June 30, 2014 compared to $1.1 million provision for loan losses for the three months ended June 30, 2013. The provision for loan losses is charged to operations to bring the allowance for loan losses to a level that reflects management’s best estimate of the losses inherent in the portfolio. Net chargeoffs decreased $135,000, to $805,000, or 0.41% of average loans outstanding, for the quarter ended June 30, 2014 from $940,000, or 0.49% of average loans outstanding, for the quarter ended June 30, 2013. Total loans decreased $15.9 million, or 2.0%, to $787.8 million at June 30, 2014 from $803.7 million at June 30, 2013. An evaluation of the loan portfolio, current economic conditions, and other factors is performed at each balance sheet date. The allowance for loan losses to total loans receivable decreased to 0.81% at June 30, 2014 from 0.88% at June 30, 2013. Total substandard loans decreased $4.7 million, or 26.6%, to $12.9 million at June 30, 2014 from $17.6 million at June 30, 2013. Total impaired loans decreased $7.6 million, or 39.4%, to $11.6 million at June 30, 2014 from $19.2 million at June 30, 2013.

Non-performing loans include loans on non-accrual status or loans delinquent 90 days or greater and still accruing interest. None of our loans were delinquent 90 days or greater and still accruing interest at either June 30, 2014 or June 30, 2013. At June 30, 2014, non-performing loans totaled $3.8 million, or 0.48% of total loans, compared to $9.0 million, or 1.12% of total loans, at June 30, 2013. The allowance for loan losses as a percentage of non-performing loans increased to 170.26% at June 30, 2014 from 78.41% at June 30, 2013.

Noninterest Income. Noninterest income increased $531,000, or 15.7%, to $3.9 million for the three months ended June 30, 2014 from $3.4 million for the three months ended June 30, 2013.

	Three Months Ended June 30,				Dollar change			Percent change
	2014		2013
	(Dollars in thousands)
Noninterest income:
Service charges and other fees	$	2,102	$	2,228	$	(126	)	(5.7	)%
Net gains on sales of loans	395		236		159			67.4
Net gains on sales of securities available for sale	348		—		348			100.0
Net losses on sales of repossessed assets	48		27		21			77.8
Commissions	403		297		106			35.7
Increase in cash surrender value of bank-owned life insurance	351		367		(16		)	(4.4	)
Other income	267		228		39			17.1
Total noninterest income	$	3,914	$	3,383	$	531		15.7	%

The increase in noninterest income was primarily attributable to a $348,000increase in net gains on the sales of investments, a $159,000increase in net gains on the sales of loans, and a $106,000increase in commissions, partially offset by a $126,000decrease in service charges and other fees. The increase in net gains on sales of investments is attributable to sales of $11.3 million of investment securities for a gain of $348,000 during the three months ended June 30, 2014, while there were no investment securities sold during the three months ended June 30, 2013. The increase in net gains on sales of loans resulted primarily from a net gain on derivative financial instruments of $21,000 for the three months ended June 30, 2014 from a net loss of $244,000 for the three months ended June 30, 2013, partially offset by a decrease in the volume of loans sold to 87 loans for the three months ended June 30, 2014 compared to 100 loans for the three months ended June 30, 2013. The increase in commissions is primarily due to increases in sales of variable annuity, fixed annuity, and real estate investment trust (REIT) investment products. Decreases in service charges and other fees was primarily due to a $76,000 decrease in insufficient funds fee income and a $63,000 increase in the amortization of mortgage servicing rights due to the stabilization of prepayment speeds resulting from consistent volumes of mortgage loan refinancing.

37

Noninterest Expense. Noninterest expense increased $1.1 million, or 10.2%, to $11.8 million for the three months ended June 30, 2014 from $10.7 million for the three months ended June 30, 2013.

	Three Months Ended June 30,					Dollar change			Percent change
	2014		2013
	(Dollars in thousands)
Noninterest expense:
Salaries and benefits	$	6,442	$	6,040		$	402		6.7	%
Software and equipment maintenance	508		696			(188		)	(27.0	)
Depreciation of furniture, software, and equipment	276		415			(139		)	(33.5	)
FDIC insurance	173		139			34			24.5
Net loss on write-down of other real estate owned	22		22			—			—
Real estate owned expense (income)	29		(15		)	44			(293.3	)
Service fees	154		126			28			22.2
Communications costs	221		249			(28		)	(11.2	)
Other operations expense	831		805			26			3.2
Occupancy	954		945			9			1.0
Professional and outside services	1,949		1,002			947			94.5
Loan servicing	166		121			45			37.2
Marketing	71		158			(87		)	(55.1	)
Total noninterest expense	$	11,796	$	10,703		$	1,093		10.2	%

The increase in noninterest expense was primarily attributable to a $947,000increase in professional and outside services and a $402,000increase in salaries and benefits expense. The increase in professional and outside services was attributable to $745,000 of expenses related to the pending merger with Southside Bancshares incurred during the three months ended June 30, 2014, a $51,000 increase in directors' equity compensation expense due to new stock option and restricted stock grants in the first quarter of 2014, and a $29,000 increase in mobile and online banking expense. The increase in salaries and benefits was primarily due to a $282,000 increase in health insurance expense due to unfavorable medical claims experience, a $269,000 increase in commissions paid to employees for mortgage loan originations and sales of investment products, and a $245,000 increase in the incentive accrual based on improved performance of loan production and branch operations, partially offset by a $437,000 decrease in salaries expense primarily from the reduction in force which occurred during the fourth quarter of 2013.

Income Tax Expense. Income tax expense increased $94,000, or 28.1%, to $428,000 for the three months ended June 30, 2014 from $334,000 for the three months ended June 30, 2013 which reflected an effective tax rate of 32.28% and 33.13% for the three months ended June 30, 2014 and June 30, 2013, respectively. The increase in income tax expense was primarily due to increases in net income.

Analysis of Net Interest Income — Three Months Ended June 30, 2014 and 2013

Net interest income, the primary contributor to earnings, represents the difference between income on interest-earning assets and expenses on interest-bearing liabilities. Net interest income depends upon the volume of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them.

38

Average Balances and Yields

The following table sets forth average balance sheets, average yields and costs, and certain other information at or for the periods indicated. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

	For the Three Months Ended June 30,
	2014							2013
	Average Outstanding Balance			Interest		Yield/ Rate(1)		Average Outstanding Balance			Interest		Yield/ Rate(1)
	(Dollars in thousands)
Interest-earning assets:
Loans	$	792,852		$	8,934	4.51	%	$	771,460		$	9,265	4.80	%
Investment securities available for sale	461,082			2,616		2.27		391,626			2,098		2.14
Cash and cash equivalents	11,643			6		0.21		2,104			1		0.19
Other	17,356			25		0.58		13,706			17		0.50
Total interest-earning assets	1,282,933			11,581		3.61		1,178,896			11,381		3.86
Noninterest-earning assets	103,177							110,936
Total assets	$	1,386,110						$	1,289,832
Interest-bearing liabilities:
Interest-bearing demand	$	148,113		$	24	0.06	%	$	142,766		$	25	0.07	%
Savings accounts	107,652			12		0.04		106,523			12		0.05
Money market accounts	234,609			135		0.23		225,960			130		0.23
Certificates of deposit	266,578			852		1.28		288,778			1,223		1.69
Total interest-bearing deposits	756,952			1,023		0.54		764,027			1,390		0.73
Federal Home Loan Bank advances	335,974			611		0.73		237,038			544		0.92
Other secured borrowings	2,203			14		2.54		17,399			19		0.44
Total interest-bearing liabilities	1,095,129			1,648		0.60		1,018,464			1,953		0.77
Noninterest-bearing liabilities(2)	77,873							64,736
Total liabilities	1,173,002							1,083,200
Equity	213,108							206,632
Total liabilities and equity	$	1,386,110						$	1,289,832
Net interest income				$	9,933						$	9,428
Interest rate spread (3)						3.01	%						3.09	%
Net interest-earning assets (4)	$	187,804						$	160,432
Net interest margin (5)						3.10	%						3.20	%
Average interest-earning assets to interest-bearing liabilities	117.14		%					115.75		%

_______________________

(1) Annualized.

(2) Includes noninterest-bearing deposits.

(3) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average total interest-earning assets.

39

Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by later volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the changes due to volume.

	Three Months Ended June 30, 2014 vs. 2013
	Increase (Decrease) Due to						Total Increase (Decrease)
	Volume			Rate
	(In thousands)
Interest-earning assets:
Loans	$	257		$	(588	)	$	(331	)
Investment securities available for sale	372			146			518
Cash and cash equivalents	5			—			5
Other	5			3			8
Total interest-earning assets	$	639		$	(439	)	$	200
Interest-bearing liabilities:
Interest-bearing demand	$	1		$	(2	)	$	(1	)
Savings accounts	—			—			—
Money market accounts	5			—			5
Certificates of deposit	(94		)	(277		)	(371		)
Total interest-bearing deposits	(88		)	(279		)	(367		)
Federal Home Loan Bank advances	227			(160		)	67
Other secured borrowings	(17		)	12			(5		)
Total interest-bearing liabilities	$	122		$	(427	)	$	(305	)
Change in net interest income	$	517		$	(12	)	$	505

Comparison of Operating Results for the Six Months EndedJune 30, 2014 and 2013

General. Net income decreased $180,000, or 6.9%, to $2.4 million for the six months ended June 30, 2014 from $2.6 million for the prior year period. The decrease in net income for the six months ended June 30, 2014 reflected a decrease in noninterest income of $1.8 million and an increase in noninterest expense of $404,000, partially offset by an increase in interest income of $927,000 and a decrease in interest expense of $663,000.

Interest Income. Interest income increased $927,000, or 4.1%, to $23.4 million for the six months ended June 30, 2014 from $22.4 million for the six months ended June 30, 2013. The increase resulted from an increase of $119.5 million, or 10.2%, in the average balance of interest-earning assets to $1.29 billion for the six months ended June 30, 2014 from $1.17 billion for the six months ended June 30, 2013, partially offset by a decrease in the average yield on interest-earning assets of 22 basis points to 3.63% for the six months ended June 30, 2014 from 3.85% for the six months ended June 30, 2013. The decrease in our average yield on interest-earning assets during the six months ended June 30, 2014 as compared to the prior year period was due to the sustained low short-term market interest rate environment.

40

	Six Months Ended June 30,				Dollar change			Percent change
	2014		2013
	(Dollars in thousands)
Interest income:
Loans, including fees	$	18,136	$	18,166	$	(30	)	(0.2	)%
Securities—taxable	5,235		4,278		957			22.4
Securities—nontaxable	1		1		—			—
Total interest income	$	23,372	$	22,445	$	927		4.1	%

The decrease in interest income on loans of $30,000 was due to a decrease in the average yield on our loan portfolio of 27 basis points to 4.52% for the six months ended June 30, 2014 from 4.79% for the six months ended June 30, 2013, partially offset by an increase in the average balance of loans of $44.0 million, or 5.8%, to $803.1 million for the six months ended June 30, 2014 from $759.1 million for the six months ended June 30, 2013.

Interest income on investment securities increased $957,000, or 22.4%, to $5.2 million for the six months ended June 30, 2014 from $4.3 million for the six months ended June 30, 2013. The increase resulted primarily from increases in the average balance and average yield of our securities portfolio. The average balance of our securities portfolio increased $56.3 million, or 14.4%, to $447.7 million for the six months ended June 30, 2014 from $391.4 million for the six months ended June 30, 2013, due to purchases of securities, primarily U.S. government sponsored mortgage-backed securities and collateralized mortgage obligations. The average yield on our securities portfolio increased 14 basis points to 2.31% for the six months ended June 30, 2014 from 2.17% for the six months ended June 30, 2013.

Interest Expense. Interest expense decreased by $663,000, or 16.4%, to $3.4 million for the six months ended June 30, 2014 from $4.0 million for the six months ended June 30, 2013.

	Six Months Ended June 30,				Dollar change			Percent change
	2014		2013
	(Dollars in thousands)
Interest expense:
Deposits	$	2,036	$	2,847	$	(811	)	(28.5	)%
Borrowed funds	1,334		1,186		148			12.5
Total interest expense	$	3,370	$	4,033	$	(663	)	(16.4	)%

The decrease in interest expense on deposits of $811,000 resulted from a decrease in the average rate we paid on deposits and a decrease in the average balance of interest-bearing deposits. The average rate we paid decreased 21 basis points to 0.54% for the six months ended June 30, 2014 from 0.75% for the six months ended June 30, 2013, as we were able to reprice our deposits lower as market interest rates declined. The average balance of interest-bearing deposits decreased $7.0 million, or 0.9%, to $756.6 million for the six months ended June 30, 2014 from $763.6 million for the six months ended June 30, 2013. The decrease in the average balance of our interest-bearing deposits was primarily due to decreases in the average balances of our certificates of deposit, partially offset by increases in the average balances of our money market accounts, interest-bearing demand accounts, and savings accounts. This shift in deposit composition also contributed to the decrease in the average rate paid on deposits.

Interest expense on certificates of deposit decreased $801,000, or 32.1%, to $1.7 million for the six months ended June 30, 2014 from $2.5 million for the six months ended June 30, 2013. The average rate paid on certificates of deposit decreased 45 basis points to 1.27% for the six months ended June 30, 2014 from 1.72% for the six months ended June 30, 2013, reflecting the continuing low market interest rate environment. In addition, the average balance of certificates of deposit decreased $23.1 million, or 7.9%, to $267.9 million for the six months ended June 30, 2014 from $291.0 million for the six months ended June 30, 2013.

The increase in interest expense on borrowed funds of $148,000 resulted primarily from an increase of $103.4 million, or 42.4%, in the average balance of borrowed funds to $347.3 million for the six months ended June 30, 2014 from $243.9 million for the six months ended June 30, 2013, partially offset by a decrease in the average rate paid on borrowed funds of 20 basis points to 0.77% for the three months ended June 30, 2014 from 0.97% for the six months ended June 30, 2013.

41

Net Interest Income. Net interest income increased by $1.6 million, or 8.6%, to $20.0 million for the six months ended June 30, 2014 from $18.4 million for the prior year period. The increase in net interest income was primarily attributable to a $119.5 million increase in average interest earning assets to $1.29 billion for the six months ended June 30, 2014 from $1.17 billion for the six months ended June 30, 2013. The increase in income was partially offset by a 3 basis point decrease in our interest rate spread to 3.02% for the six months ended June 30, 2014 from 3.05% for the six months ended June 30, 2013. Our net interest margin decreased 4 basis points to 3.11% for the six months ended June 30, 2014 from 3.15% for the six months ended June 30, 2013. The decrease in the net interest margin resulted primarily from a 27 basis point decrease in the yields on loans to 4.52% for the six months ended June 30, 2014 from 4.79% for the six months ended June 30, 2013. Partially offsetting the decrease in the yields on loans was a decrease in our average rates on certificates of deposit of 45 basis points to 1.27% for the six months ended June 30, 2014 from 1.72% for the six months ended June 30, 2013.

Provision for Loan Losses. We recorded a provision for loan losses of $1.4 million for the six months ended June 30, 2014 compared to a provision for loan losses of $1.6 million for the six months ended June 30, 2013. The provision for loan losses is charged to operations to bring the allowance for loan losses to a level that reflects management’s best estimate of the losses inherent in the portfolio. An evaluation of the loan portfolio, current economic conditions and other factors is performed at each balance sheet date. Net charge-offs remained relatively unchanged at $1.4 million for the six months ended June 30, 2014 and June 30, 2013. Annualized net charge-offs as a percentage of average loans outstanding was 0.36% for the six months ended June 30, 2014 compared to 0.37% for the six months ended June 30, 2013. The allowance for loan losses to total loans decreased to 0.81% at June 30, 2014 from 0.88% at June 30, 2013. Total substandard loans decreased $4.7 million, or 26.6%, to $12.9 million at June 30, 2014 from $17.6 million at June 30, 2013. Total impaired loans decreased $7.6 million, or 39.4%, to $11.6 million at June 30, 2014 from $19.2 million at June 30, 2013. Total loans decreased$15.9 million, or 2.0%, to $787.8 million at June 30, 2014 from $803.7 million at June 30, 2013.

Non-performing loans include loans on non-accrual status or loans delinquent 90 days or greater and still accruing interest. None of our loans were delinquent 90 days or greater and still accruing interest at either June 30, 2014 or June 30, 2013. At June 30, 2014, non-performing loans totaled $3.8 million, or 0.48% of total loans, compared to $9.0 million, or 1.12% of total loans, at June 30, 2013. The allowance for loan losses as a percentage of non-performing loans increased to 170.26% at June 30, 2014 from 78.41% at June 30, 2013.

Noninterest Income. Noninterest income decreased $1.8 million, or 20.3%, to $7.4 million for the six months ended June 30, 2014 from $9.2 million for the six months ended June 30, 2013.

	Six Months Ended June 30,						Dollar change			Percent change
	2014			2013
	(Dollars in thousands)
Noninterest income:
Service charges and other fees	$	4,160		$	4,446		$	(286	)	(6.4	)%
Net gains on sales of loans	578			1,022			(444		)	(43.4	)
Net gains on sales of securities available for sale	607			1,701			(1,094		)	(64.3	)
Net gains on sales of premises and equipment	(1		)	344			(345		)	(100.3	)
Net gains (losses) on sales of repossessed assets	10			(3		)	13			(433.3	)
Commissions	777			605			172			28.4
Increase in cash surrender value of bank-owned life insurance	717			683			34			5.0
Other income	524			447			77			17.2
Total noninterest income	$	7,372		$	9,245		$	(1,873	)	(20.3	)%

The decrease was primarily attributable to a $1.1 million decrease in net gains on sales of investment securities, $444,000 decrease in the net gains on sales of loans, a $345,000decrease in net gains on sales of premises and equipment, and a $286,000 decrease in service charges and other fees. The decrease in gains on sales of investment securities was attributable to sales of $17.5 million of securities available for sale with gross realized gains of $607,000 for the six months ended June 30, 2014 compared to sales of $44.5 million of securities available for sale with gross realized gains of $1.7 million for the six months ended June 30, 2013. The decrease in gains on sales of loans resulted primarily from a decrease in the volume of loans sold during the six months ended June 30, 2014 compared to the six months ended June 30, 2013. The decrease in gains on sales of premises and equipment resulted primarily from the sale of land adjacent to one of our branch locations during the six months ended June 30, 2013. The decrease in service charges and other fees was primarily due to a $162,000 decrease in

42

insufficient funds fee income and a $162,000 increase in the amortization of mortgage servicing rights due to the stabilization of prepayment speeds resulting from consistent volumes of mortgage loan refinancing.

Noninterest Expense. Noninterest expense increased $404,000, or 1.8%, to $22.4 million for the six months ended June 30, 2014 from $22.0 million for the six months ended June 30, 2013.

	Six Months Ended June 30,					Dollar change			Percent change
	2014		2013
	(Dollars in thousands)
Noninterest expense:
Salaries and benefits	$	12,624	$	12,797		$	(173	)	(1.4	)%
Software and equipment maintenance	1,095		1,306			(211		)	(16.2	)
Depreciation of furniture, software, and equipment	593		828			(235		)	(28.4	)
FDIC insurance	353		329			24			7.3
Net loss on write-down of other real estate owned	22		22			—			—
Real estate owned (income) expense	64		(35		)	99			(282.9	)
Service fees	298		240			58			24.2
Communications costs	457		473			(16		)	(3.4	)
Other operations expense	1,582		1,566			16			1.0
Occupancy	1,919		1,925			(6		)	(0.3	)
Professional and outside services	2,991		2,040			951			46.6
Loan servicing	244		232			12			5.2
Marketing	193		308			(115		)	(37.3	)
Total noninterest expense	$	22,435	$	22,031		$	404		1.8	%

The increase in noninterest expense was primarily due to a $951,000 increase in professional and outside services, partially offset by a $235,000 decrease in depreciation of furniture, software, and equipment, a $211,000 decrease in software and equipment maintenance, and a $173,000 decrease in salaries and benefits. The increase in professional and outside services was attributable to $826,000 of expenses related to the pending merger with Southside Bancshares incurred during the six months ended June 30, 2014, a $74,000 increase in directors' equity compensation expense due to new stock option and restricted stock grants in the first quarter of 2014, and a $50,000 increase in mobile and online banking expense. The decrease in salaries and benefits was primarily due to a $1.1 million decrease in salaries expense primarily from the reduction in force which occurred during the fourth quarter of 2013 and a $102,000 decrease in pension cost, partially offset by a $544,000 increase in the incentive accrual based on improved performance of loan production and branch operations, a $289,000 increase in commissions paid to employees for mortgage loan originations and sales of investment products, and a $217,000 increase in health insurance expense due to unfavorable medical claims experience. The decrease in depreciation of furniture, software, and equipment was primarily due to items reaching full depreciation in 2013. The decrease in software and equipment maintenance expense was primarily due to contracts not renewed or renewed at reduced prices for 2014.

Income Tax Expense. During the six months ended June 30, 2014, we recognized income tax expense of $1.1 million, reflecting an effective tax rate of 31.90%, compared to income tax expense of $1.4 million, reflecting an effective tax rate of 35.25%, for the six months ended June 30, 2013. The decrease in the effective tax rate was primarily due to an increase in tax-deductible items.

Analysis of Net Interest Income — Six Months EndedJune 30, 2014 and 2013

Net interest income, the primary contributor to earnings, represents the difference between income on interest-earning assets and expenses on interest-bearing liabilities. Net interest income depends upon the volume of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them.

43

Average Balances and Yields

The following table sets forth average balance sheets, average yields and costs, and certain other information at or for the periods indicated. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

	For the Six Months Ended June 30,
	2014							2013
	Average Outstanding Balance			Interest		Yield/ Rate(1)		Average Outstanding Balance			Interest		Yield/ Rate(1)
	(Dollars in thousands)
Interest-earning assets:
Loans	$	803,111		$	18,136	4.52	%	$	759,135		$	18,166	4.79	%
Investment securities available for sale	447,684			5,172		2.31		391,443			4,239		2.17
Cash and cash equivalents	17,928			18		0.20		3,207			5		0.31
Other	17,985			46		0.51		13,455			35		0.52
Total interest-earning assets	1,286,708			23,372		3.63		1,167,240			22,445		3.85
Noninterest-earning assets	103,200							109,058
Total assets	$	1,389,908						$	1,276,298
Interest-bearing liabilities:
Interest-bearing demand	$	147,547		$	48	0.07	%	$	140,151		$	54	0.08	%
Savings accounts	106,231			24		0.05		105,206			24		0.05
Money market accounts	234,939			267		0.23		227,281			271		0.24
Certificates of deposit	267,902			1,697		1.27		290,979			2,498		1.72
Total interest-bearing deposits	756,619			2,036		0.54		763,617			2,847		0.75
Federal Home Loan Bank advances	344,808			1,306		0.76		229,698			1,143		1.00
Other secured borrowings	2,446			28		2.29		14,244			43		0.60
Total interest-bearing liabilities	1,103,873			3,370		0.61		1,007,559			4,033		0.80
Noninterest-bearing liabilities(2)	65,589							62,382
Total liabilities	1,169,462							1,069,941
Equity	220,446							206,357
Total liabilities and equity	$	1,389,908						$	1,276,298
Net interest income				$	20,002						$	18,412
Interest rate spread (3)						3.02	%						3.05	%
Net interest-earning assets (4)	$	182,835						$	159,681
Net interest margin (5)						3.11	%						3.15	%
Average interest-earning assets to interest-bearing liabilities	116.56		%					115.85		%

_______________________

(1) Annualized.

(2) Includes noninterest-bearing deposits.

(3) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average total interest-earning assets.

44

Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by later volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the changes due to volume.

	Six Months Ended June 30, 2014 vs. 2013
	Increase (Decrease) Due to						Total Increase (Decrease)
	Volume			Rate
	(In thousands)
Interest-earning assets:
Loans	$	1,052		$	(1,082	)	$	(30	)
Investment securities available for sale	609			324			933
Cash and cash equivalents	23			(10		)	13
Other	12			(1		)	11
Total interest-earning assets	$	1,696		$	(769	)	$	927
Interest-bearing liabilities:
Interest-bearing demand	$	3		$	(9	)	$	(6	)
Savings accounts	—			—			—
Money market accounts	9			(13		)	(4		)
Certificates of deposit	(198		)	(603		)	(801		)
Total interest-bearing deposits	(186		)	(625		)	(811		)
Federal Home Loan Bank advances	573			(410		)	163
Other secured borrowings	(36		)	21			(15		)
Total interest-bearing liabilities	$	351		$	(1,014	)	$	(663	)
Change in net interest income	$	1,345		$	245		$	1,590

Liquidity and Capital Resources

Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments, advances from the Federal Home Loan Bank of Dallas, and maturities and sales of available-for-sale securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. We monitor our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies.

We regularly monitor and adjust our investments in liquid assets based upon our assessment of:

(i) expected loan demand;

(ii) expected deposit flows and borrowing maturities;

(iii) yields available on interest-earning deposits and securities; and

(iv) the objectives of our asset/liability management program.

Excess liquid assets are invested generally in interest-earning deposits and short- and intermediate-term securities.

Our most liquid assets are cash and cash equivalents. The levels of these assets are affected by our operating, financing, lending and investing activities during any given period. At June 30, 2014, cash and cash equivalents totaled $21.2 million. Securities classified as available for sale, which provide additional sources of liquidity, totaled $458.0 million at June 30, 2014. On that date, we had $328.7 million in Federal Home Loan Bank advances, with the ability to borrow an additional $316.7 million.

45

Our cash flows are derived from operating activities, investing activities, and financing activities as reported in our Consolidated Statements of Cash Flows included in our consolidated financial statements.

At June 30, 2014, we had $126.3 million in commitments to extend credit. Included in these commitments to extend credit were $112.5 million in unused lines of credit to borrowers. Certificates of deposit due within one year of June 30, 2014 totaled $127.7 million, or 15.5% of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including loan sales and Federal Home Loan Bank advances. Depending on unfavorable market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before June 30, 2015. We believe, however, based on past experience, that a significant portion of such deposits will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

Generally, our primary investing activity is originating loans. During the six months ended June 30, 2014, we originated $105.9 million of loans. In addition, we purchased $72.3 million of securities classified as available for sale during the six months ended June 30, 2014.

Financing activities consist primarily of activity in deposit accounts and Federal Home Loan Bank advances and other borrowings. Total deposits increased$8.4 million for the six months ended June 30, 2014. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors, and by other factors.

Liquidity management is both a daily and long-term function of business management. If we require funds beyond our ability to generate them internally, we may utilize our borrowing agreements with the Federal Home Loan Bank of Dallas, which provides an additional source of funds. Federal Home Loan Bank advances decreased by $33.3 million for the six months ended June 30, 2014. At June 30, 2014, we had the ability to borrow up to $645.4 million from the Federal Home Loan Bank of Dallas. In addition, we maintained $55.0 million in federal funds lines with other financial institutions at June 30, 2014. We also have a line of credit with the Federal Reserve Bank of Dallas, which allows us to borrow on a collateralized basis at a fixed term with pledged assignments. At June 30, 2014, the borrowing limit for this line of credit was $256.9 million.

The Bank is subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At June 30, 2014, the Bank exceeded all regulatory capital requirements. The Bank is considered “well capitalized” under regulatory guidelines. The table below presents the capital required as a percentage of total and risk-weighted assets and the percentage and the total amount of capital maintained at June 30, 2014 and December 31, 2013 without giving effect to the final Basel III capital rules adopted by the Federal Reserve Board on July 2, 2013 and by the Office of the Comptroller of the Currency on July 9, 2013.

	Actual				Minimum For Capital Adequacy Purposes				Minimum To Be Well Capitalized Under Prompt Corrective Actions Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
Consolidated as of June 30, 2014
Total risk-based capital to risk-weighted assets	$	216,722	24.58	%	$	70,539	8.00	%	$	88,174	10.00	%
Tier I risk-based capital to risk-weighted assets	209,754		23.79	%	35,270		4.00	%	52,904		6.00	%
Tier I (Core) capital to adjusted total assets	209,754		15.26	%	54,972		4.00	%	68,715		5.00	%
OmniAmerican Bank as of June 30, 2014
Total risk-based capital to risk-weighted assets	$	201,049	22.79	%	$	70,560	8.00	%	$	88,200	10.00	%
Tier I risk-based capital to risk-weighted assets	194,081		22.00	%	35,280		4.00	%	52,920		6.00	%
Tier I (Core) capital to adjusted total assets	194,081		14.12	%	54,982		4.00	%	68,727		5.00	%
Consolidated as of December 31, 2013
Total risk-based capital to risk-weighted assets	$	213,553	23.41	%	$	72,948	8.00	%	$	91,185	10.00	%
Tier I risk-based capital to risk-weighted assets	206,662		22.66	%	36,474		4.00	%	54,711		6.00	%
Tier I (Core) capital to adjusted total assets	206,662		14.86	%	55,633		4.00	%	69,542		5.00	%
OmniAmerican Bank as of December 31, 2013
Total risk-based capital to risk-weighted assets	$	196,115	21.50	%	$	72,957	8.00	%	$	91,197	10.00	%
Tier I risk-based capital to risk-weighted assets	189,224		20.75	%	36,479		4.00	%	54,718		6.00	%
Tier I (Core) capital to adjusted total assets	189,224		13.60	%	55,638		4.00	%	69,548		5.00	%

46

Management continues to evaluate the final Basel III capital rules and their impact, which rules will apply beginning in reporting periods after January 1, 2015.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make.

Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities.

The following table summarizes our significant fixed and determinable contractual obligations and other funding needs by payment date at June 30, 2014. The payment amounts represent those amounts due to the recipient and do not include any unamortized premiums or discounts or other similar carrying amount adjustments.

	Payments Due by Period
	One year or less		More than one year to three years		More than three years to five years		More than five years		Total
	(In thousands)
Contractual obligations:
Long-term debt (1)	$	143,167	$	179,167	$	8,333	$	—	$	330,667
Operating leases	596		1,003		972		693		3,264
Certificates of deposit	127,728		92,008		43,492		—		263,228
Total contractual obligations	$	271,491	$	272,178	$	52,797	$	693	$	597,159
Off-balance sheet loan commitments:
Undisbursed portion of loans closed	$	13,764	$	—	$	—	$	—	$	13,764
Unused lines of credit (2)	—		—		—		—		112,521
Total loan commitments	$	13,764	$	—	$	—	$	—	$	126,285
Total contractual obligations and loan commitments	$	285,255	$	272,178	$	52,797	$	693	$	723,444

_______________________

(1) Includes Federal Home Loan Bank advances and securities sold under agreements to repurchase.

(2) Because lines of credit may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General. Because the majority of our assets and liabilities are sensitive to changes in interest rates, our most significant form of market risk is interest rate risk. We are vulnerable to an increase in interest rates to the extent that our interest-bearing liabilities mature or reprice more quickly than our interest-earning assets. As a result, a principal part of our business strategy is to manage interest rate risk and limit the exposure of our net interest income to changes in market interest rates. Accordingly, our board of directors has established an Asset/Liability Management Committee, which is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity, and performance objectives, and for managing this risk consistent with the guidelines approved by the board of directors.

Our interest rate sensitivity is monitored through the use of a net interest income simulation model which generates estimates of the change in our net interest income over a range of interest rate scenarios. The model assumes loan prepayment rates, reinvestment rates, and deposit decay rates based on historical experience and current economic conditions.

We have sought to manage our interest rate risk in order to control the exposure of our earnings and capital to changes in interest rates. As part of our ongoing asset-liability management, we currently use the following strategies to manage our interest rate risk:

47

(i) sell the long-term, fixed-rate one- to four-family residential mortgage loans (terms 15 years or greater) that we originate into the secondary mortgage market;

(ii) lengthen the weighted-average maturity of our liabilities through retail deposit pricing strategies and through longer-term wholesale funding sources such as fixed-rate advances from the Federal Home Loan Bank of Dallas;

(iii) invest in shorter- to medium-term securities;

(iv) originate commercial business and consumer loans, which tend to have shorter terms and higher interest rates than residential mortgage loans, and which generate customer relationships that can result in larger noninterest-bearing demand deposit accounts;

(v) maintain adequate levels of capital; and

(vi) evaluate the performance of the leveraging strategy by utilizing our internal measuring and monitoring systems which include interest rate sensitivity analysis.

We have not engaged in hedging through the use of derivatives.

Net Portfolio Value. We currently use a net portfolio value (“NPV”) analysis to monitor our level of interest rate risk. This analysis measures interest rate risk by capturing changes in the NPV of our cash flows from assets, liabilities, and off-balance sheet items, based on a range of assumed changes in market interest rates. NPV represents the market value of portfolio equity and is equal to the market value of assets minus the market value of liabilities, with adjustments made for off-balance sheet items. These analyses assess the risk of loss in market risk-sensitive instruments in the event of a sudden and sustained 100 to 300 basis point increase or 100 basis point decrease in the United States Treasury yield curve with no effect given to any steps that we might take to counter the effect of that interest rate movement.

The table below sets forth, as of June 30, 2014, our calculation of the estimated changes in our NPV that would result from the designated immediate changes in the United States Treasury yield curve. In addition to NPV calculations, we analyze our sensitivity to changes in interest rates through our internal net interest income model which is also summarized in the table below at June 30, 2014:

At June 30, 2014
								NPV as a Percentage of
								Present Value of Assets(3)			Net Interest Income
													Increase (Decrease) in
Change in			Estimated Increase							Increase	Estimated		Estimated Net Interest
Interest Rates	Estimated		(Decrease) in NPV							(Decrease)	Net Interest		Income
(basis points)(1)	NPV(2)		Amount			Percent		NPV Ratio(4)		(basis points)	Income		Amount			Percent
	(Dollars in thousands)
+300	$	263,362	$	12,520		4.99	%	19.86	%	305	$	38,393	$	(1,878	)	(4.66	)%
+200	266,097		15,255			6.08	%	19.04	%	223	38,473		(1,798		)	(4.46	)%
+100	266,253		15,411			6.14	%	18.09	%	128	38,528		(1,743		)	(4.33	)%
—	250,842		—			—		16.81	%	—	40,271		—			—
-100	237,695		(13,147		)	(5.24	)%	17.18	%	37	36,343		(3,928		)	(9.75	)%

(1) Assumes an instantaneous uniform change in interest rates at all maturities.

(2) NPV is the discounted present value of expected cash flows from assets, liabilities, and off-balance sheet contracts.

(3) Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

(4) NPV Ratio represents NPV divided by the present value of assets.

The table above indicates that at June 30, 2014, in the event of a 200 basis point increase in interest rates, we would experience a 6.08% decrease in NPV. In the event of a 100 basis point decrease in interest rates, we would experience a 5.24% decrease in NPV.

Net Interest Income. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. In our model, we estimate what our net interest income would be for a rolling forward twelve-month period using historical data for assumptions such as loan prepayment rates and deposit decay rates, the current term structure for interest rates, and

48

current deposit and loan offering rates. We then calculate what the net interest income would be for the same period in the event of an instantaneous 200 basis point increase or a 100 basis point decrease in market interest rates. As of June 30, 2014, using our internal interest rate risk model, we estimated that our net interest income for the six months ended June 30, 2014 would decrease by 4.46% in the event of an instantaneous 200 basis point increase in market interest rates, and would decrease by 9.75% in the event of an instantaneous 100 basis point decrease in market interest rates.

We use various assumptions in assessing interest rate risk through changes in NPV and net interest income. These assumptions relate to interest rates, loan prepayment rates, deposit decay rates and the market values of certain assets under differing interest rate scenarios, among others. As with any method of measuring interest rate risk, certain shortcomings are inherent in the methods of analyses presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate mortgage loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset. Further, if there is a change in interest rates, expected rates of prepayments on loans and early withdrawals from certificates could deviate significantly from those assumed in calculating the table. Prepayment rates can have a significant impact on interest income. Because of the large percentage of loans and mortgage-backed securities we hold, rising or falling interest rates have a significant impact on the prepayment speeds of our earning assets that in turn affect the rate sensitivity position. While we believe these assumptions to be reasonable, there can be no assurance that assumed prepayment rates will approximate actual future mortgage-backed security and loan repayment activity.

ITEM 4. CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of the Company’s management, including the President and Chief Executive Officer and the Senior Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of June 30, 2014. Based on that evaluation, the Company’s management, including the President and Chief Executive Officer and the Senior Executive Vice President and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

During the quarter ended June 30, 2014, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

49

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in legal actions that are considered ordinary routine litigation incidental to the business of the Company. In the opinion of management, based on currently available information, the resolution of these legal actions is not expected to have a materially adverse effect on the Company’s financial condition, results of operations, or cash flows.

On June 25, 2014, a purported stockholder of OmniAmerican filed a lawsuit in the Circuit Court for Baltimore City, Maryland captioned McDougal v. OmniAmerican Bancorp, Inc., et al., Case No. 24-C-14-003920, naming OmniAmerican, members of OmniAmerican's board of directors, Southside and Merger Sub as defendants. The lawsuit is purportedly brought on behalf of a putative class of OmniAmerican's public stockholders and seeks a declaration that it is properly maintainable as a class action and a certification of the plaintiff and her counsel as class representative and class counsel. The lawsuit asserts direct and derivative claims against OmniAmerican's directors and alleges that they breached their fiduciary duties and that OmniAmerican, Southside and Merger Sub aided and abetted those alleged breaches by, among other things, (a) failing to take steps to maximize shareholder value for OmniAmerican public stockholders; (b) failing to properly value OmniAmerican; (c) failing to protect against conflicts of interest; (d) failing to disclose material information necessary for OmniAmerican stockholders to make an informed vote on the First Merger; and (e) agreeing to deal protection devices that preclude a fair sales process. Among other relief, the plaintiff seeks to enjoin the mergers. On July 9, 2014, the plaintiff filed a motion to transfer the case to Maryland's Business and Technology Case Management Program.

OmniAmerican and Southside believe the claims asserted are without merit and intend to vigorously defend against this lawsuit.

ITEM 1A. RISK FACTORS

There are no material changes to the risk factors as previously disclosed in the Company’s Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission on March 7, 2014, and the Company's Form 10-Q for the quarter ended March 31, 2014, as filed with the Securities and Exchange Commission on May 2, 2014.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Not applicable.

(b) Not applicable.

(c) The following table provides information with respect to purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of the Company’s common stock during the three months ended June 30, 2014.

Period	(a) Total Number of Shares Purchased (1)	(b) Average Cost Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	(d) Maximum Number of Shares That May Yet Be Purchased Under the Plans or Program (2)
April 1, 2014 through April 30, 2014	—	$	—	—	411,469
May 1, 2014 through May 31, 2014	—	—		—	411,469
June 1, 2014 through June 30, 2014	495	24.74		—	411,469
Total	495	$	24.74	—	411,469

______________________

(1) Consists of 495 shares withheld from employees to satisfy tax withholding obligations upon the vesting of restricted shares awarded under our 2011 Executive Stock Incentive Plan. The shares were purchased pursuant to the terms of the plan and not pursuant to our publicly announced share repurchase program.

(2) On September 1, 2011, the Company’s Board of Directors approved a stock repurchase program under which the Company may repurchase up to 565,369 shares of the Company’s common stock, from time to time, subject to market conditions. The repurchase program will continue until completed or terminated by the Board of Directors.

50

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

The exhibits required by Item 601 of Regulation S-K are included with this Form 10-Q and are listed on the “Index to Exhibits” immediately following the Signatures.

51

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 thereunto duly authorized.

	OMNIAMERICAN BANCORP, INC.
	(Registrant)
Date: August 1, 2014	/s/ Tim Carter
	Tim Carter
	President and Chief Executive Officer
Date: August 1, 2014	/s/ Deborah B. Wilkinson
	Deborah B. Wilkinson
	Senior Executive Vice President and Chief Financial Officer

52

INDEX TO EXHIBITS

Exhibit Number	Description
31.1	Certification of Tim Carter, President and Chief Executive Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
31.2	Certification of Deborah B. Wilkinson, Senior Executive Vice President and Chief Financial Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
32	Certification of Tim Carter, President and Chief Executive Officer, and Deborah B. Wilkinson, Senior Executive Vice President and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101+	Interactive Data File

+ As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

53

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Tim Carter, certify that:

1. I have reviewed this quarterly report on Form 10-Q of OmniAmerican Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2014

/s/ Tim Carter

Tim Carter

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Deborah B. Wilkinson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of OmniAmerican Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2014

/s/ Deborah B. Wilkinson

Deborah B. Wilkinson

Senior Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of OmniAmerican Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2014, as filed with the Securities and Exchange Commission (the “Report”), we hereby certify, in our capacities of Chief Executive Officer and Chief Financial Officer, respectively, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company as of and for the periods covered by the Report.

By:	/s/ Tim Carter
	Tim Carter
	President and Chief Executive Officer
	August 1, 2014
By:	/s/ Deborah B. Wilkinson
	Deborah B. Wilkinson
	Senior Executive Vice President and Chief Financial Officer
	August 1, 2014

XML

Loans and Allowance for Loan Losses - Past due loan aging (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013
Analysis of the age of recorded investment in loans
30 - 59 Days Past Due	$ 2,276	$ 4,384
60 - 89 Days Past Due	1,496	669
90 Days and Greater Past Due	2,400	2,682
Total Past Due	6,172	7,735
Loans Not Past Due	781,618	819,221
Total loans	787,790	826,956	803,731
One- to four-family
Analysis of the age of recorded investment in loans
30 - 59 Days Past Due	0	1,170
60 - 89 Days Past Due	984	0
90 Days and Greater Past Due	1,604	1,932
Total Past Due	2,588	3,102
Loans Not Past Due	266,645	259,621
Total loans	269,233	262,723
Home Equity Loans and Lines of Credit [Member]
Analysis of the age of recorded investment in loans
30 - 59 Days Past Due	0	1
60 - 89 Days Past Due	0	0
90 Days and Greater Past Due	34	42
Total Past Due	34	43
Loans Not Past Due	15,903	17,063
Total loans	15,937	17,106
Commercial real estate
Analysis of the age of recorded investment in loans
30 - 59 Days Past Due	49	0
60 - 89 Days Past Due	0	0
90 Days and Greater Past Due	119	120
Total Past Due	168	120
Loans Not Past Due	113,061	106,440
Total loans	113,229	106,560
Real estate construction
Analysis of the age of recorded investment in loans
30 - 59 Days Past Due	0	876
60 - 89 Days Past Due	0	0
90 Days and Greater Past Due	0	0
Total Past Due	0	876
Loans Not Past Due	59,886	58,772
Total loans	59,886	59,648
Commercial business
Analysis of the age of recorded investment in loans
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	85	0
90 Days and Greater Past Due	53	0
Total Past Due	138	0
Loans Not Past Due	78,243	69,320
Total loans	78,381	69,320
Automobile, indirect
Analysis of the age of recorded investment in loans
30 - 59 Days Past Due	2,121	2,217
60 - 89 Days Past Due	399	615
90 Days and Greater Past Due	557	558
Total Past Due	3,077	3,390
Loans Not Past Due	201,391	261,281
Total loans	204,468	264,671
Automobile, direct
Analysis of the age of recorded investment in loans
30 - 59 Days Past Due	55	48
60 - 89 Days Past Due	8	21
90 Days and Greater Past Due	23	15
Total Past Due	86	84
Loans Not Past Due	31,542	31,514
Total loans	31,628	31,598
Other consumer
Analysis of the age of recorded investment in loans
30 - 59 Days Past Due	51	72
60 - 89 Days Past Due	20	33
90 Days and Greater Past Due	10	15
Total Past Due	81	120
Loans Not Past Due	14,947	15,210
Total loans	$ 15,028	$ 15,330

XML

Employee Benefit Plans - Pension Plan (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Employee Benefits and Share-based Compensation [Abstract]
Interest cost on projected benefit obligation	$ 55	$ 57	$ 110	$ 114
Expected return on assets	(86)	(74)	(172)	(148)
Amortization of net loss	11	48	22	96
Net periodic pension cost	$ (20)	$ 31	$ (40)	$ 62

XML

Loans and Allowance for Loan Losses - Impaired TDR Narrative (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Receivables [Abstract]
Financing Receivable, Modifications, Recorded Investment	$ 8,272	$ 9,239
Specific Reserve for Troubled Debt Restructurings	66	72
Loans and Leases Receivable, Troubled Debt Restructurings, Commitment to Lend	$ 0	$ 0

XML

Commitments and Contingencies (Details)	6 Months Ended
	Jun. 30, 2014
Commitments and Contingencies Disclosure [Abstract]
Loss Contingency, Lawsuit Filing Date	June 25, 2014
Loss Contingency, Name of Plaintiff	McDougal
Loss Contingency, Name of Defendant	OmniAmerican Bancorp, Inc.
Loss Contingency, Date of Motion to Transfer the Case	Jul. 09, 2014

XML

Employee Benefit Plans - Share based compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Share-based Compensation
Equity Incentive Plan Approval Date			May 24, 2011
IPO Shares Authorized for Stock Options			7.00%
IPO Shares Authorized for Restricted Stock			7.00%
Maximum Restricted Stock Awards			4.00%
Share-based Compensation	$ 616	$ 499	$ 1,041	$ 894
Stock Options
Share-based Compensation
Number of Shares Authorized	1,190,250		1,190,250
Restricted Stock
Share-based Compensation
Number of Shares Authorized	476,100		476,100

XML

Loans and Allowance for Loan Losses - TDR method of concession (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	$ 1,466	$ 56
Residential Real Estate
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	1,445	0
Commercial
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Consumer
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	21	56
Interest rate reduction
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	1,466	27
Interest rate reduction | Residential Real Estate
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	1,445	0
Interest rate reduction | Commercial
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Interest rate reduction | Consumer
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	21	27
Loan maturity extension
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	29
Loan maturity extension | Residential Real Estate
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Loan maturity extension | Commercial
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Loan maturity extension | Consumer
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	29
Forbearance
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Forbearance | Residential Real Estate
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Forbearance | Commercial
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Forbearance | Consumer
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Principal reduction
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Principal reduction | Residential Real Estate
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Principal reduction | Commercial
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	0	0
Principal reduction | Consumer
Troubled Debt Restructurings
Troubled debt restructuring loans, restructured during the current period	$ 0	$ 0

XML

Investment Securities - Realized Gains and Losses (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales of investment securities	$ 11,671	$ 0	$ 18,099	$ 46,212
Gross gains from sales of investment securities	$ 348	$ 0	$ 607	$ 1,701

XML

Employee Benefit Plans - Restricted Shares (Details) (USD $)	6 Months Ended
	Jun. 30, 2014
Employee Benefits and Share-based Compensation [Abstract]
Shares, Non-vested at Beginning of Period	179,583
Shares, Granted	97,078
Shares, Vested	(29,170)
Shares, Forfeited	(6,000)
Shares, Non-vested at End of Period	241,491
Weighted Average Grant Date Fair Value, Non-vested at Beginning of Period	$ 19.18
Weighted Average Grant Date Fair Value, Granted	$ 21.16
Weighted Average Grant Date Fair Value, Vested	$ (14.59)
Weighted Average Grant Date Fair Value, Forfeited	$ (21.06)
Weighted Average Grant Date Fair Value, Non-vested at End of Period	$ 20.48

XML

Employee Benefit Plans - (Tables)

6 Months Ended

Jun. 30, 2014

Employee Benefits and Share-based Compensation [Abstract]

Summary of Employee Stock Ownership Plan (ESOP) shares

	June 30, 2014		December 31, 2013
Allocated shares	171,396		152,352
Unearned shares	780,804		799,848
Total ESOP shares	952,200		952,200
Fair value of unearned shares (in thousands)	$	19,520	$	17,101
Year-to-date compensation expense recognized from the release of shares from the ESOP (in thousands)	447		893

Summary of net periodic pension cost

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
Interest cost on projected benefit obligation	$	55		$	57		$	110		$	114
Expected return on assets	(86		)	(74		)	(172		)	(148		)
Amortization of net loss	11			48			22			96
Net periodic pension cost	$	(20	)	$	31		$	(40	)	$	62

Share-based compensation

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Share-based compensation expense	$	616	$	499	$	1,041	$	894

Restricted shares activity

	Shares		Weighted- Average Grant Date Fair Value Per Share
Non-vested at January 1, 2014	179,583		$	19.18
Granted	97,078		21.16
Vested	(29,170	)	(14.59		)
Forfeited	(6,000	)	(21.06		)
Non-vested at June 30, 2014	241,491		$	20.48

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

Risk-free interest rate	2.12	%
Expected term of stock options (years)	7.5
Expected stock price volatility	30.64	%
Expected dividends	0.90	%
Forfeiture rate — for officers and employees	13.03	%
Forfeiture rate — for directors	—	%

Stock options activity

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2014	394,933		$	16.13	7.54	$	2,088
Granted	428,788		21.11		9.68	1,668
Exercised	(12,272	)	14.29		—	(108		)
Forfeited	(22,400	)	21.09		—	(88		)
Expired	(2,400	)	22.24		—	(7		)
Outstanding at June 30, 2014	786,649		$	18.71	8.44	$	4,946
Fully vested and expected to vest	683,953		$	18.53	8.34	$	4,425
Exercisable at June 30, 2014	198,117		$	14.99	6.74	$	1,982

XML

Derivative Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Interest Rate Lock Commitments
Derivatives, Fair Value
Derivative, Notional Amount	$ 3,553	$ 5,025	$ 3,453
Interest Rate Lock Commitment Assets, at Fair Value	5	49	56
(Loss) Gain on Interest Rate Lock Commitments	(51)	(215)	(208)
Forward Loan Sales Commitments
Derivatives, Fair Value
Forward loan sales commitments, at Fair Value	$ 0	$ 0	$ 0

XML

Loans and Allowance for Loan Losses - Consumer loans by credit score (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013
Loans
Automobile, indirect	$ 204,468	$ 264,671
Automobile, direct	31,628	31,598
Other consumer	15,028	15,330
Total consumer loans	251,124	311,599	299,270
Risk Tier A | Credit Score Greater than 720
Loans
Automobile, indirect	106,657	135,583
Automobile, direct	23,101	23,137
Other consumer	10,949	11,453
Total consumer loans	140,707	170,173
Risk Tier B | Credit Score 690 to 719
Loans
Automobile, indirect	40,476	53,678
Automobile, direct	4,207	4,311
Other consumer	2,260	2,228
Total consumer loans	46,943	60,217
Risk Tier C | Credit Score 661 to 689
Loans
Automobile, indirect	34,299	44,732
Automobile, direct	2,408	2,320
Other consumer	1,463	1,268
Total consumer loans	38,170	48,320
Risk Tier D | Credit Score 660 and under
Loans
Automobile, indirect	23,036	30,678
Automobile, direct	1,912	1,830
Other consumer	356	381
Total consumer loans	$ 25,304	$ 32,889

XML

Loans and Allowance for Loan Losses - Impaired Loans Narrative (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Impaired Loans Narrative [Abstract]
Commitment to Lend on Impaired loans	$ 0	$ 0

XML

Employee Benefit Plans - Employee Stock Ownership Plan (ESOP) Narrative (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Employee Stock Ownership Plan (ESOP)
ESOP plan effective date	January 1, 2010
ESOP, minimum years of service of participant	1
ESOP, minimum participant age	21
Percentage of shares purchased by the bank for the ESOP plan	8.00%
Employee Stock Ownership Plan (ESOP), Shares in ESOP	952,200	952,200.0
Note payable to the Company from the ESOP	$ 9,500,000
ESOP interest rate - Wall Street Journal Prime Rate	3.25%	3.25%
Number of equal annual payments of ESOP loan
Employee Stock Ownership Plan (ESOP)
ESOP debt structure	25
Amount of equal annual payments of ESOP loan
Employee Stock Ownership Plan (ESOP)
Repayment of Employee Stock Ownership Plan Loan	$ 561,000

XML

Fair Value Measurements - Level 3 Asset Valuation Techniques and Unobservable Inputs (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Assets, Fair Value Disclosure [Abstract]
Mortgage servicing rights	$ 1,552	$ 1,473
Other real estate owned	785	177
Discounted Cash Flow Valuation Technique
Assets, Fair Value Disclosure [Abstract]
Impaired Loans, Net of Allowance	484	840
Mortgage servicing rights	1,552	1,473
Third Party Appraisal Valuation Technique
Assets, Fair Value Disclosure [Abstract]
Impaired Loans, Net of Allowance	255	230
Other real estate owned	$ 785	$ 177
Impaired Loans, Net of Allowance | Discounted Cash Flow Valuation Technique
Unobservable Inputs
Interest Rate, Range Minimum	1.50%	1.50%
Interest Rate, Range Maximum	7.00%	7.00%
Interest Rate, Range Average	3.90%	4.90%
Loan Term (in months), Range Minimum	60	60
Loan Term (in months), Range Maximum	120	120
Loan Term (in months), Range Average	95	91
Impaired Loans, Net of Allowance | Third Party Appraisal Valuation Technique
Unobservable Inputs
Discount of Market Value, Range Minimum	0.00%	0.00%
Discount of Market Value, Range Maximum	0.00%	0.00%
Discount of Market Value, Range Average	0.00%	0.00%
Estimated Marketing Costs, Range Minimum	0.00%	6.00%
Estimated Marketing Costs, Range Maximum	6.00%	6.00%
Estimated Marketing Costs, Range Average	5.40%	6.00%
Estimated Property Maintenance, Range Minimum	0.00%	3.60%
Estimated Property Maintenance, Range Maximum	3.60%	3.60%
Estimated Property Maintenance, Range Average	3.30%	3.60%
Mortgage Servicing Rights | Discounted Cash Flow Valuation Technique
Unobservable Inputs
Interest Rate, Range Minimum	2.60%	2.60%
Interest Rate, Range Maximum	7.90%	7.90%
Interest Rate, Range Average	4.30%	4.30%
Loan Term (in months), Range Minimum	111	82
Loan Term (in months), Range Maximum	527	527
Loan Term (in months), Range Average	312	312
Other Real Estate Owned | Third Party Appraisal Valuation Technique
Unobservable Inputs
Discount of Market Value, Range Minimum	0.00%	0.00%
Discount of Market Value, Range Maximum	0.00%	0.00%
Discount of Market Value, Range Average	0.00%	0.00%
Estimated Marketing Costs, Range Minimum	0.00%	0.00%
Estimated Marketing Costs, Range Maximum	8.00%	6.00%
Estimated Marketing Costs, Range Average	6.70%	2.40%
Estimated Property Maintenance, Range Minimum	0.00%	0.00%
Estimated Property Maintenance, Range Maximum	0.00%	0.00%
Estimated Property Maintenance, Range Average	0.00%	0.00%

XML

Earnings Per Share - (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Earnings Per Share [Abstract]
Net income	$ 898	$ 674	$ 2,427	$ 2,607
Distributed and undistributed earnings to participating securities	(22)	0	(54)	0
Income available to common shareholders	$ 876	$ 674	$ 2,373	$ 2,607
Basic Shares
Weighted average common shares outstanding, basic	11,549,939	11,446,129	11,518,158	11,445,175
Less: Average unallocated ESOP shares	(785,565)	(822,066)	(788,739)	(826,827)
Average unvested restricted stock awards	(267,967)	(247,374)	(240,108)	(250,489)
Average shares for basic earnings per share	10,496,407	10,376,689	10,489,311	10,367,859
Net income per common share, basic	$ 0.08	$ 0.06	$ 0.23	$ 0.25
Diluted shares:
Weighted average common shares outstanding for basic earnings per common share	10,496,407	10,376,689	10,489,311	10,367,859
Add: Dilutive effects of share-based compensation plan	82,891	148,869	73,631	157,534
Average shares for diluted earnings per share	10,579,298	10,525,558	10,562,942	10,525,393
Net income per common share, diluted	$ 0.08	$ 0.06	$ 0.22	$ 0.25

XML

Loans and Allowance for Loan Losses - TDR loans modified during the period (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Troubled Debt Restructurings
Financing Receivable, Modifications, Number of Contracts	2	3
Pre-Modification Outstanding Recorded Balance	$ 1,466	$ 56
Post-Modification Outstanding Recorded Balance	1,466	56
Residential Real Estate
Troubled Debt Restructurings
Financing Receivable, Modifications, Number of Contracts	1	0
Pre-Modification Outstanding Recorded Balance	1,445	0
Post-Modification Outstanding Recorded Balance	1,445	0
Commercial
Troubled Debt Restructurings
Financing Receivable, Modifications, Number of Contracts	0	0
Pre-Modification Outstanding Recorded Balance	0	0
Post-Modification Outstanding Recorded Balance	0	0
Consumer
Troubled Debt Restructurings
Financing Receivable, Modifications, Number of Contracts	1	3
Pre-Modification Outstanding Recorded Balance	21	56
Post-Modification Outstanding Recorded Balance	$ 21	$ 56

XML

Consolidated Statements of Cash Flow (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net income	$ 2,427	$ 2,607
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,527	1,699
Provision for loan losses	1,375	1,600
Amortization of net premium on investments	1,298	1,788
Amortization and impairment of mortgage servicing rights	146	(16)
Net gains on sales of securities available for sale	(607)	(1,701)
Net gains on sales of loans	(578)	(1,022)
Proceeds from sales of loans held for sale	26,205	43,859
Loans originated for sale	(25,168)	(34,468)
Net loss on write-down of other real estate owned	22	22
Net losses (gains) on disposition of premises and equipment	1	(344)
Net (gains) losses on sales of repossessed assets	(10)	3
Increase in cash surrender value of bank-owned life insurance	(717)	(683)
Federal Home Loan Bank Stock Dividends	(32)	(21)
ESOP compensation expense	447	461
Share-based compensation	1,041	894
Excess Tax Benefit from Share-based Compensation	(111)	(88)
Changes in operating assets and liabilities:
Accrued interest receivable	188	(34)
Other assets	399	3,584
Accrued interest payable and other liabilities	2,980	3,223
Net cash provided by operating activities	10,833	21,363
Securities available for sale:
Purchases	(72,263)	(110,214)
Proceeds from sales	18,099	46,212
Proceeds from maturities, calls, and principal repayments	32,947	60,346
Purchases of other investments	(46)	(2,620)
Redemptions of other investments	2,754	1,119
Purchase of bank-owned life insurance	0	(10,000)
Net decrease (increase) in loans held for investment	37,119	(68,942)
Purchases of premises and equipment	(646)	(1,026)
Proceeds from sales of premises and equipment	0	680
Proceeds from sales of foreclosed assets	2,087	1,497
Proceeds from sales of other real estate owned	264	696
Net cash provided by (used in) investing activities	20,315	(82,252)
Cash flows from financing activities:
Net increase in deposits	8,434	2,010
Net (decrease) increase in Federal Home Loan Bank advances	(33,333)	73,333
Net decrease in other borrowings	0	(17,000)
Payment of Dividends	(1,071)	0
Proceeds from stock options exercised	53	53
Excess tax benefit from share-based compensation	111	88
Purchase of common stock	(12)	(13)
Net cash (used in) provided by financing activities	(25,818)	58,471
Net increase (decrease) in cash and cash equivalents	5,330	(2,418)
Cash and cash equivalents, beginning of period	15,880	23,853
Cash and cash equivalents, end of period	21,210	21,435
Supplemental cash flow information:
Interest paid	3,422	4,127
Income taxes paid, net of refunds	1,355	1,300
Non-cash transactions:
Loans transfered to other real estate owned	858	184
Loans transferred to foreclosed assets	1,453	1,412
Change in unrealized gains on securities available for sale	$ 6,655	$ (11,065)

XML

Fair Value Measurements Fair Value Measurements - Interest Rate Locks Narrative (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Fair Value Disclosures - Interest Rate Locks Narrative [Abstract]
Fair Value of Servicing Rights as a Percentage of Loans with a Term of 180 Months and an interest rate of 3.5% or lower	0.93%	1.00%
Fair Value of Servicing Rights as a Percentage of Loans with a Term of 180 Months and an interest rate greater than 3.5% and equal to or less than 4.0%	0.89%	1.00%
Fair Value of Servicing Rights as a Percentage of Loans with a Term of 180 Months and an interest rate greater than 4.0%	0.83%	1.00%
Fair Value of Servicing Rights as a Percentage of Loans with a Term greater than 180 Months and interest rate equal to or less than 4.0%	1.25%
Fair Value of Servicing Rights as a Percentage of Loans with a Term greater than 180 Months and an interest rate greater than 4.0% and equal to or less than 4.5%	1.17%
Fair Value of Servicing Rights as a Percentage of Loans with a Term greater than 180 Months and interest rate equal to or less than 4.5%		1.31%
Fair Value of Servicing Rights as a Percentage of Loans with a Term greater than 180 Months and an interest rate greater than 4.5% and equal to or less than 5.0%	1.10%	1.08%
Fair Value of Servicing Rights as a Percentage of Loans with a Term greater than 180 Months and an interest rate greater than 5.0%	0.99%
Estimated Closure Rate of Interest Rate Lock Commitments	82.40%	77.10%
Fair Value of Servicing Rights as a Percentage of Loans with a Term greater than 180 Months and an interest rate greater than 5.0%		1.08%

XML

Loans and Allowance for Loan Losses - Allowance rollforward (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Financing Receivable, Allowance for Credit Losses
Beginning balance	$ 6,468	$ 6,922	$ 6,445	$ 6,900
Charge-offs	(909)	(1,049)	(1,675)	(1,654)
Recoveries of loans previously charged-off	104	109	243	236
Provision for loan losses	725	1,100	1,375	1,600
Ending balance	6,388	7,082	6,388	7,082
Individually evaluated for impairment	503	294	503	294
Collectively evaluated for impairment	5,885	6,788	5,885	6,788
Residential Real Estate
Financing Receivable, Allowance for Credit Losses
Beginning balance	809	831	851	870
Charge-offs	(84)	0	(102)	(153)
Recoveries of loans previously charged-off	9	14	23	22
Provision for loan losses	137	(51)	99	55
Ending balance	871	794	871	794
Individually evaluated for impairment	0	0	0	0
Collectively evaluated for impairment	871	794	871	794
Commercial
Financing Receivable, Allowance for Credit Losses
Beginning balance	2,750	3,345	2,517	3,133
Charge-offs	(79)	(203)	(79)	(202)
Recoveries of loans previously charged-off	10	15	34	30
Provision for loan losses	172	218	381	414
Ending balance	2,853	3,375	2,853	3,375
Individually evaluated for impairment	503	294	503	294
Collectively evaluated for impairment	2,350	3,081	2,350	3,081
Consumer
Financing Receivable, Allowance for Credit Losses
Beginning balance	2,909	2,746	3,077	2,897
Charge-offs	(746)	(846)	(1,494)	(1,299)
Recoveries of loans previously charged-off	85	80	186	184
Provision for loan losses	416	933	895	1,131
Ending balance	2,664	2,913	2,664	2,913
Individually evaluated for impairment	0	0	0	0
Collectively evaluated for impairment	$ 2,664	$ 2,913	$ 2,664	$ 2,913

XML

Investment Securities - Continuous Unrealized Losses (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Investment Securities
Continuous Unrealized Losses Existing for, Less than 12 Months, Fair Value	$ 32,115	$ 203,392
Continuous Unrealized Losses Existing for, Less than 12 Months, Unrealized Losses	(128)	(7,059)
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Fair Value	113,356	2,248
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Unrealized Losses	(2,836)	(120)
Continuous Unrealized Losses, Total, Fair Value	145,471	205,640
Continuous Unrealized Losses, Total, Unrealized Losses	(2,964)	(7,179)
U. S. government sponsored mortgage-backed securities
Investment Securities
Continuous Unrealized Losses Existing for, Less than 12 Months, Fair Value	2,986	142,715
Continuous Unrealized Losses Existing for, Less than 12 Months, Unrealized Losses	(2)	(5,088)
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Fair Value	94,245	2,248
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Unrealized Losses	(1,993)	(120)
Continuous Unrealized Losses, Total, Fair Value	97,231	144,963
Continuous Unrealized Losses, Total, Unrealized Losses	(1,995)	(5,208)
U. S. government sponsored collateralized mortgage obligations
Investment Securities
Continuous Unrealized Losses Existing for, Less than 12 Months, Fair Value	29,129	50,066
Continuous Unrealized Losses Existing for, Less than 12 Months, Unrealized Losses	(126)	(1,403)
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Fair Value	14,197	0
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Unrealized Losses	(577)	0
Continuous Unrealized Losses, Total, Fair Value	43,326	50,066
Continuous Unrealized Losses, Total, Unrealized Losses	(703)	(1,403)
Agency Bonds
Investment Securities
Continuous Unrealized Losses Existing for, Less than 12 Months, Fair Value	0	4,538
Continuous Unrealized Losses Existing for, Less than 12 Months, Unrealized Losses	0	(462)
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Fair Value	4,738	0
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Unrealized Losses	(262)	0
Continuous Unrealized Losses, Total, Fair Value	4,738	4,538
Continuous Unrealized Losses, Total, Unrealized Losses	(262)	(462)
Municipal obligations
Investment Securities
Continuous Unrealized Losses Existing for, Less than 12 Months, Fair Value	0	170
Continuous Unrealized Losses Existing for, Less than 12 Months, Unrealized Losses	0	(9)
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Fair Value	176	0
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Unrealized Losses	(4)	0
Continuous Unrealized Losses, Total, Fair Value	176	170
Continuous Unrealized Losses, Total, Unrealized Losses	(4)	(9)
Other equity securities
Investment Securities
Continuous Unrealized Losses Existing for, Less than 12 Months, Fair Value		5,903
Continuous Unrealized Losses Existing for, Less than 12 Months, Unrealized Losses		(97)
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Fair Value		0
Continuous Unrealized Losses Existing for, Greater Than 12 Months, Unrealized Losses		0
Continuous Unrealized Losses, Total, Fair Value		5,903
Continuous Unrealized Losses, Total, Unrealized Losses		$ (97)

XML

Investment Securities - Amortized Cost and Estimated Fair Value (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Investment Securities
Amortized Cost	$ 454,106	$ 433,580
Gross Unrealized Gains	6,814	4,374
Gross Unrealized Losses	(2,964)	(7,179)
Fair Value	457,956	430,775
U. S. government sponsored mortgage-backed securities
Investment Securities
Amortized Cost	290,897	282,180
Gross Unrealized Gains	4,675	2,616
Gross Unrealized Losses	(1,995)	(5,208)
Fair Value	293,577	279,588
U. S. government sponsored collateralized mortgage obligations
Investment Securities
Amortized Cost	152,029	140,221
Gross Unrealized Gains	2,123	1,758
Gross Unrealized Losses	(703)	(1,403)
Fair Value	153,449	140,576
Agency Bonds
Investment Securities
Amortized Cost	5,000	5,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(262)	(462)
Fair Value	4,738	4,538
Municipal obligations
Investment Securities
Amortized Cost	180	179
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(4)	(9)
Fair Value	176	170
Other equity securities
Investment Securities
Amortized Cost	6,000	6,000
Gross Unrealized Gains	16	0
Gross Unrealized Losses	0	(97)
Fair Value	$ 6,016	$ 5,903

XML

Employee Benefit Plans - Restricted Shares Narrative (Details) (Restricted Stock, USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Share-based Compensation
Number of Shares Authorized	476,100
Total Shares Issued	392,616
Unrecognized compensation expense related to non-vested shares of restricted stock	$ 3.5
Weighted-average period which expense is expected to be recognized	3 years 7 months 30 days
Officer
Share-based Compensation
Annual vesting percentage	20.00%
Forfeiture rate	13.03%
Director
Share-based Compensation
Minimum vesting period	20.00%
Maximum vesting period	33.00%
Forfeiture rate	0.00%

XML

Loans and Allowance for Loan Losses - Recorded investment in loans by allowance category (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013
Loans
Loans individually evaluated for impairment	$ 11,633	$ 12,973	$ 19,202
Loans collectively evaluated for impairment	776,157	813,983	784,529
Total residential real estate loans	285,170	279,829	269,746
Total commercial loans	251,496	235,528	234,715
Total consumer loans	251,124	311,599	299,270
Total loans	787,790	826,956	803,731
Residential Real Estate
Loans
Loans individually evaluated for impairment	7,051	7,573	7,732
Loans collectively evaluated for impairment	278,119	272,256	262,014
Commercial
Loans
Loans individually evaluated for impairment	3,751	4,529	10,716
Loans collectively evaluated for impairment	247,745	230,999	223,999
Consumer
Loans
Loans individually evaluated for impairment	831	871	754
Loans collectively evaluated for impairment	$ 250,293	$ 310,728	$ 298,516

XML

Investment Securities - Unrealized Losses Narrative (Details)	Jun. 30, 2014	Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Available-for-sale, Number of investments	191	202
Available-for-sale, Securities in Unrealized Loss Positions, Number of Positions	61	82

XML

Investment Securities - Contractual Maturity (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Due in one year or less, Amortized Cost	$ 0
Due from one to five year, Amortized Cost	0
Due from five to ten years, Amortized Cost	31,915
Due after ten years, Amortized Cost	416,191
Equity securities, Amortized Cost	6,000
Amortized Cost	454,106	433,580
Due in one year or less, Fair Value	0
Due from one to five years, Fair Value	0
Due from five to ten years, Fair Value	31,549
Due after ten years, Fair Value	420,391
Equity securities, Fair Value	6,016
Fair Value	$ 457,956	$ 430,775

XML

Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (Parenthetical)	6 Months Ended
	Jun. 30, 2014
Statement of Stockholders' Equity Parenthetical [Abstract]
ESOP shares allocated	19,044
Stock purchased and retired at cost	5,962
Stock options exercised	12,272
Restricted Stock Award, Net of Forfeitures	91,078

XML

Investment Securities - Pledged Securities Narrative (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Federal Home Loan Bank Advances [Member]
Investment Securities
Securities Pledged as Collateral	$ 125.8	$ 161.6
Borrowings [Member]
Investment Securities
Securities Pledged as Collateral	$ 2.6	$ 2.2

XML

Loans and Allowance for Loan Losses - Risk category for loans by class for loans individually analyzed for impairment (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013
Loans
Commercial real estate	$ 113,229	$ 106,560
Real estate construction	59,886	59,648
Commercial business	78,381	69,320
One- to four-family	269,233	262,723
Home equity	15,937	17,106
Total loans	787,790	826,956	803,731
Individually evaluated for impairment
Loans
Commercial real estate	113,229	106,560
Real estate construction	59,886	59,648
Commercial business	78,381	69,320
One- to four-family	19,414	18,689
Total loans	270,910	254,217
Individually evaluated for impairment | Pass
Loans
Commercial real estate	107,424	101,134
Real estate construction	59,886	59,536
Commercial business	74,300	64,155
One- to four-family	14,831	15,514
Total loans	256,441	240,339
Individually evaluated for impairment | Special Mention
Loans
Commercial real estate	321	735
Real estate construction	0	0
Commercial business	1,241	2,164
One- to four-family	0	0
Total loans	1,562	2,899
Individually evaluated for impairment | Substandard
Loans
Commercial real estate	5,484	4,691
Real estate construction	0	112
Commercial business	2,840	3,001
One- to four-family	4,583	3,175
Total loans	12,907	10,979
Individually evaluated for impairment | Doubtful
Loans
Commercial real estate	0	0
Real estate construction	0	0
Commercial business	0	0
One- to four-family	0	0
Total loans	$ 0	$ 0

XML

Employee Benefit Plans - Employee Stock Ownership Plan (ESOP) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Employee Benefits and Share-based Compensation [Abstract]
Allocated Shares	171,396		152,352
Unearned shares	780,804		799,848
Total ESOP shares	952,200		952,200
Fair Value of unearned ESOP shares	$ 19,520		$ 17,101
ESOP compensation expense	$ 447	$ 461	$ 893

XML

Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Cash and due from financial institutions	$ 13,547	$ 11,498
Short-term interest-earning deposits in other financial institutions	7,663	4,382
Total cash and cash equivalents	21,210	15,880
Investments:
Securities available for sale (Amortized cost of $454,106 on June 30, 2014 and $433,580 on December 31, 2013)	457,956	430,775
Other	17,106	19,782
Loans held for sale	876	1,509
Loans, net of deferred fees and discounts	790,464	831,326
Less allowance for loan losses	(6,388)	(6,445)
Loans, net	784,076	824,881
Premises and equipment, net	40,630	41,512
Bank-owned life insurance	44,323	43,606
Other real estate owned	785	177
Mortgage servicing rights	1,552	1,473
Deferred tax asset, net	1,796	4,066
Accrued interest receivable	3,259	3,447
Other assets	3,213	4,205
Total assets	1,376,782	1,391,313
Deposits:
Noninterest-bearing	71,952	58,071
Interest-bearing	750,056	755,503
Total deposits	822,008	813,574
Federal Home Loan Bank advances	328,667	362,000
Other borrowings	2,000	2,000
Accrued expenses and other liabilities	9,577	6,597
Total liabilities	1,162,252	1,184,171
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01 per share; 100,000,000 shares authorized; 11,548,984 shares issued and outstanding at June 30, 2014 and 11,451,596 shares issued and outstanding at December 31, 2013	116	115
Additional paid-in capital	110,698	109,250
Unallocated Employee Stock Ownership Plan (“ESOP”) shares; 780,804 shares at June 30, 2014 and 799,848 shares at December 31, 2013	(7,808)	(7,999)
Retained earnings	109,660	108,304
Accumulated other comprehensive income (loss):
Unrealized gain (loss) on securities available for sale, net of income taxes	2,541	(1,851)
Unrealized loss on pension plan, net of income taxes	(677)	(677)
Total accumulated other comprehensive income (loss)	1,864	(2,528)
Total stockholders’ equity	214,530	207,142
Total liabilities and stockholders’ equity	$ 1,376,782	$ 1,391,313

XML

Loans and Allowance for Loan Losses - Troubled debt restructuring summary (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Troubled Debt Restructurings
Troubled debt restructuring loans	$ 8,272	$ 9,239
Total performing troubled debt restructuring	7,630	7,862
Residential Real Estate
Troubled Debt Restructurings
Troubled debt restructuring loans	5,413	6,276
Troubled debt restructuring in non-accrual status	112	795
Commercial
Troubled Debt Restructurings
Troubled debt restructuring loans	2,549	2,581
Troubled debt restructuring in non-accrual status	460	483
Consumer
Troubled Debt Restructurings
Troubled debt restructuring loans	310	382
Troubled debt restructuring in non-accrual status	$ 70	$ 99

XML

Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
Net income	$ 898	$ 674	$ 2,427	$ 2,607
Change in unrealized gains (losses) on securities available for sale	4,590	(7,949)	7,262	(9,364)
Reclassification of amount realized through sale of securities	(348)	0	(607)	(1,701)
Income tax effect	(1,442)	2,703	(2,263)	3,762
Other comprehensive income (loss), net of income tax	2,800	(5,246)	4,392	(7,303)
Comprehensive income (loss)	$ 3,698	$ (4,572)	$ 6,819	$ (4,696)

XML

Employee Benefit Plans Employee Benefit Plans - Stock Options Granted Valuation Assumptions (Details) (Stock Options)	6 Months Ended
	Jun. 30, 2014
Share-based Compensation
Risk-free interest rate	2.12%
Expected term of stock options (years)	7 years 6 months 0 days
Expected stock price volatility	30.64%
Expected dividends	0.90%
Officer
Share-based Compensation
Forfeiture rate	13.03%
Director
Share-based Compensation
Forfeiture rate	0.00%

XML

Loans and Allowance for Loan Losses - Mortgage Servicing (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Receivables [Abstract]
Loans sold with servicing retained	$ 199,901	$ 189,084
Mortgage servicing rights	$ 1,552	$ 1,473

XML

Fair Value Measurements - Mortgage Servicing Rights (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fair Value Disclosures [Abstract]
Mortgage servicing rights at fair value	$ 1,552	$ 1,473

XML

Investment Securities (Tables)

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Amortized cost and estimated fair value

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
June 30, 2014
U. S. government sponsored mortgage-backed securities	$	290,897	$	4,675	$	(1,995	)	$	293,577
U. S. government sponsored collateralized mortgage obligations	152,029		2,123		(703		)	153,449
Agency bonds	5,000		—		(262		)	4,738
Municipal obligations	180		—		(4		)	176
Other equity securities	6,000		16		—			6,016
Total investment securities available for sale	$	454,106	$	6,814	$	(2,964	)	$	457,956
December 31, 2013
U. S. government sponsored mortgage-backed securities	$	282,180	$	2,616	$	(5,208	)	$	279,588
U. S. government sponsored collateralized mortgage obligations	140,221		1,758		(1,403		)	140,576
Agency bonds	5,000		—		(462		)	4,538
Municipal obligations	179		—		(9		)	170
Other equity securities	6,000		—		(97		)	5,903
Total investment securities available for sale	$	433,580	$	4,374	$	(7,179	)	$	430,775

Continuous unrealized losses

	Continuous Unrealized Losses Existing for
	Less Than 12 Months					Greater Than 12 Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
June 30, 2014
U. S. government sponsored mortgage-backed securities	$	2,986	$	(2	)	$	94,245	$	(1,993	)	$	97,231	$	(1,995	)
U. S. government sponsored collateralized mortgage obligations	29,129		(126		)	14,197		(577		)	43,326		(703		)
Agency bonds	—		—			4,738		(262		)	4,738		(262		)
Municipal obligations	—		—			176		(4		)	176		(4		)
	$	32,115	$	(128	)	$	113,356	$	(2,836	)	$	145,471	$	(2,964	)
December 31, 2013
U. S. government sponsored mortgage-backed securities	$	142,715	$	(5,088	)	$	2,248	$	(120	)	$	144,963	$	(5,208	)
U. S. government sponsored collateralized mortgage obligations	50,066		(1,403		)	—		—			50,066		(1,403		)
Agency bonds	4,538		(462		)	—		—			4,538		(462		)
Municipal obligations	170		(9		)	—		—			170		(9		)
Other equity securities	5,903		(97		)	—		—			5,903		(97		)
	$	203,392	$	(7,059	)	$	2,248	$	(120	)	$	205,640	$	(7,179	)

Contractual maturity

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	—	$	—
Due from one to five years	—		—
Due from five to ten years	31,915		31,549
Due after ten years	416,191		420,391
Equity securities	6,000		6,016
Total	$	454,106	$	457,956

Realized gains and losses

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Proceeds from sales of investment securities	$	11,671	$	—	$	18,099	$	46,212
Gross gains from sales of investment securities	348		—		607		1,701

XML

Loans and Allowance for Loan Losses - Impaired Loans (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Impaired Loans
Recorded Balance	$ 11,633		$ 12,973
Unpaid Principal Balance	11,633		12,973
Related Allowance	503		521
Average Recorded Balance	12,470	20,019	17,476
Interest Income Recognized	204	201	460
Impaired loan with no related allowance [Member]
Impaired Loans
Recorded Balance	10,391		11,382
Unpaid Principal Balance	10,391		11,382
Related Allowance	0		0
Average Recorded Balance	11,087		16,366
Interest Income Recognized	201		452
Impaired loans with related allowance [Member]
Impaired Loans
Recorded Balance	1,242		1,591
Unpaid Principal Balance	1,242		1,591
Related Allowance	503		521
Average Recorded Balance	1,383		1,110
Interest Income Recognized	3		8
One- to four-family | Impaired loan with no related allowance [Member]
Impaired Loans
Recorded Balance	7,017		7,531
Unpaid Principal Balance	7,017		7,531
Related Allowance	0		0
Average Recorded Balance	7,434		7,468
Interest Income Recognized	109		305
One- to four-family | Impaired loans with related allowance [Member]
Impaired Loans
Recorded Balance	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance	0		0
Interest Income Recognized	0		0
Home equity | Impaired loan with no related allowance [Member]
Impaired Loans
Recorded Balance	34		42
Unpaid Principal Balance	34		42
Related Allowance	0		0
Average Recorded Balance	37		14
Interest Income Recognized	0		1
Home equity | Impaired loans with related allowance [Member]
Impaired Loans
Recorded Balance	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance	0		0
Interest Income Recognized	0		0
Commercial real estate | Impaired loan with no related allowance [Member]
Impaired Loans
Recorded Balance	2,331		2,347
Unpaid Principal Balance	2,331		2,347
Related Allowance	0		0
Average Recorded Balance	2,337		4,237
Interest Income Recognized	83		31
Commercial real estate | Impaired loans with related allowance [Member]
Impaired Loans
Recorded Balance	517		551
Unpaid Principal Balance	517		551
Related Allowance	287		321
Average Recorded Balance	545		46
Interest Income Recognized	0		0
Real estate construction | Impaired loan with no related allowance [Member]
Impaired Loans
Recorded Balance	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance	0		3,171
Interest Income Recognized	0		66
Real estate construction | Impaired loans with related allowance [Member]
Impaired Loans
Recorded Balance	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance	0		0
Interest Income Recognized	0		0
Commercial business | Impaired loan with no related allowance [Member]
Impaired Loans
Recorded Balance	178		591
Unpaid Principal Balance	178		591
Related Allowance	0		0
Average Recorded Balance	418		700
Interest Income Recognized	1		21
Commercial business | Impaired loans with related allowance [Member]
Impaired Loans
Recorded Balance	725		1,040
Unpaid Principal Balance	725		1,040
Related Allowance	216		200
Average Recorded Balance	838		1,064
Interest Income Recognized	3		8
Automobile, indirect | Impaired loan with no related allowance [Member]
Impaired Loans
Recorded Balance	787		824
Unpaid Principal Balance	787		824
Related Allowance	0		0
Average Recorded Balance	554		738
Interest Income Recognized	8		26
Automobile, indirect | Impaired loans with related allowance [Member]
Impaired Loans
Recorded Balance	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance	0		0
Interest Income Recognized	0		0
Automobile, direct | Impaired loan with no related allowance [Member]
Impaired Loans
Recorded Balance	34		32
Unpaid Principal Balance	34		32
Related Allowance	0		0
Average Recorded Balance	296		34
Interest Income Recognized	0		2
Automobile, direct | Impaired loans with related allowance [Member]
Impaired Loans
Recorded Balance	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance	0		0
Interest Income Recognized	0		0
Other consumer | Impaired loan with no related allowance [Member]
Impaired Loans
Recorded Balance	10		15
Unpaid Principal Balance	10		15
Related Allowance	0		0
Average Recorded Balance	11		4
Interest Income Recognized	0		0
Other consumer | Impaired loans with related allowance [Member]
Impaired Loans
Recorded Balance	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Balance	0		0
Interest Income Recognized	$ 0		$ 0

XML

Derivative Financial Instruments Derivatives Table (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

	Outstanding Notional Balance		Fair Value		Recorded (Losses)/Gains
	(In thousands)
June 30, 2014:
Interest rate lock commitments	$	3,553	$	5	$	(51	)
December 31, 2013:
Interest rate lock commitments	$	3,453	$	56	$	(208	)
June 30, 2013:
Interest rate lock commitments	$	5,025	$	49	$	(215	)

XML

Fair Value Measurements - Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and Cash Equivalents	$ 21,210	$ 15,880	$ 21,435	$ 23,853
Available-for-sale Securities	457,956	430,775
Other investments	17,106	19,782
Loans held for sale	876	1,509
Accrued interest receivable	3,259	3,447
Loans, net	784,076	824,881
Mortgage servicing rights	1,552	1,473
Federal Home Loan Bank advances	328,667	362,000
Deposits	822,008	813,574
Fair Value, Level 1 Inputs | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and Cash Equivalents	21,210	15,880
Fair Value, Level 1 Inputs | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and Cash Equivalents	21,210	15,880
Fair Value, Level 2 Inputs | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Available-for-sale Securities	457,956	430,775
Other investments	17,106	19,782
Loans held for sale	876	1,509
Accrued interest receivable	3,259	3,447
Federal Home Loan Bank advances	328,667	362,000
Accrued interest payable	337	389
Fair Value, Level 2 Inputs | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Available-for-sale Securities	457,956	430,775
Other investments	17,106	19,782
Loans held for sale	882	1,522
Accrued interest receivable	3,259	3,447
Federal Home Loan Bank advances	327,125	360,576
Accrued interest payable	337	389
Fair Value, Level 3 Inputs | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Loans, net	784,076	824,881
Mortgage servicing rights	1,552	1,473
Interest Rate Lock Commitment Assets	5	56
Deposits	822,008	813,574
Repurchase Agreements	2,000	2,000
Fair Value, Level 3 Inputs | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Loans, net	793,853	840,478
Mortgage servicing rights	1,552	1,473
Interest Rate Lock Commitment Assets	5	56
Deposits	832,456	824,856
Repurchase Agreements	2,026	2,049
Off-balance Sheet Financial Instruments [Member] | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Commitments, Fair Value Disclosure	0	0
Letters of Credit Outstanding, Amount	0	0
Off-balance Sheet Financial Instruments [Member] | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Commitments, Fair Value Disclosure	0	0
Letters of Credit Outstanding, Amount	$ 0	$ 0

XML

Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (USD $) In Thousands	Total	Common Stock	Additional Paid-in Capital	Unallocated ESOP shares	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2013	$ 207,142	$ 115	$ 109,250	$ (7,999)	$ 108,304	$ (2,528)
ESOP shares allocated, 19,044 shares	447	0	256	191	0	0
Stock purchased and retired at cost, 5,962 shares	(12)	0	(12)	0	0	0
Share-based compensation expense	1,041	0	1,041	0	0	0
Tax benefit from the exercise of stock options and the vesting of restricted stock	111	0	111	0	0	0
Stock options exercised, 12,272 shares	53	0	53	0	0	0
Restricted stock issued, net of forfeitures, 91,078 shares	0	1	(1)	0	0	0
Net income	2,427	0	0	0	2,427	0
Dividends declared and paid	(1,071)	0	0	0	(1,071)	0
Other comprehensive income	4,392	0	0	0	0	4,392
Ending balance at Jun. 30, 2014	$ 214,530	$ 116	$ 110,698	$ (7,808)	$ 109,660	$ 1,864

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Amortized cost of available for sale securities	$ 454,106	$ 433,580
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	11,548,984	11,451,596
Common stock, shares outstanding	11,548,984	11,451,596
Unallocated Employee Stock Ownership Plan (ESOP) shares	780,804	799,848

XML

Earnings Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Earnings Per Share

Basic earnings per common share is computed by dividing net income adjusted for distributed and undistributed earnings to participating securities by the weighted-average number of common shares outstanding for the period, reduced for average unallocated ESOP shares and average unvested restricted stock awards. Unvested share-based awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock awards and options) were exercised or converted to common stock, or resulted in the issuance of common stock that then shared in the Company’s earnings. Diluted earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding for the period increased for the dilutive effect of unexercised stock options and unvested restricted stock awards. The table below presents the information used to compute basic and diluted earnings per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(Dollars in thousands, except per share data)
Earnings:
Net income	$	898		$	674		$	2,427		$	2,607
Distributed and undistributed earnings to participating securities	(22		)	—			(54		)	—
Income available to common shareholders	876			674			2,373			2,607
Basic shares:
Weighted-average common shares outstanding	11,549,939			11,446,129			11,518,158			11,445,175
Less: Average unallocated ESOP shares	(785,565		)	(822,066		)	(788,739		)	(826,827		)
Average unvested restricted stock awards	(267,967		)	(247,374		)	(240,108		)	(250,489		)
Average shares for basic earnings per share	10,496,407			10,376,689			10,489,311			10,367,859
Net income per common share, basic	$	0.08		$	0.06		$	0.23		$	0.25
Diluted shares:
Weighted-average common shares outstanding for basic earnings per common share	10,496,407			10,376,689			10,489,311			10,367,859
Add: Dilutive effects of share-based compensation plan	82,891			148,869			73,631			157,534
Average shares for diluted earnings per share	10,579,298			10,525,558			10,562,942			10,525,393
Net income per common share, diluted	$	0.08		$	0.06		$	0.22		$	0.25

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 01, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Entity Registrant Name	OmniAmerican Bancorp, Inc.
Entity Central Index Key	0001470795
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		11,551,419

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

ASC 820, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

• Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.), or inputs that are derived principally from or corroborated by market data by correlation or other means.

• Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the fair value hierarchy, is set forth below.

Securities available for sale:Securities available for sale are valued at fair value on a recurring basis. The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

Interest rate lock commitments: Interest rate locks on commitments to originate loans for the held for sale portfolio are reported at fair value in other assets on the consolidated balance sheets with changes in value recorded in current earnings. The estimated fair values of the interest rate lock commitments are based on quoted secondary market pricing, include the fair value of the servicing rights based on the discounted present value of expected future cash flows, and assume an approximate closure rate based on recent historical experience. At June 30, 2014, for loans with terms of 180 months, the fair value of the servicing rights was estimated as 0.93% of the loan balance if the loan had an interest rate of 3.50% or lower, 0.89% of the loan balance if the loan had an interest rate of higher than 3.50% and equal to or less than 4.00%, and 0.83% if the interest rate was higher than 4.00%. For loans with terms greater than 180 months, the fair value was estimated as 1.25% of the loan balance if the loan had an interest rate of 4.00% or lower, 1.17% of the loan balance if the loan had an interest rate higher than 4.00% but equal to or less than 4.50%, 1.10% of the loan balance if the loan had an interest rate higher than 4.50% but less than 5.00%, and 0.99% of the loan balance if the loan had an interest rate of 5.00% or higher. At December 31, 2013, the fair value of the servicing rights was estimated as 1.00% of the loan balance for loans with terms of 180 months, and for loans with terms of greater than 180 month, the fair value was estimated as 1.31% of the loan balance if the loan had an interest rate of 4.50% or lower and 1.08% of the loan balance if the loan had an interest rate higher than 4.50%. A significant change in the closure rate may result in a significant change in the ending fair value measurement of these derivatives relative to their total fair value. At June 30, 2014 and December 31, 2013, the estimated closure rate based on historical experience over the preceding two-year period was 82.4% and 77.1%, respectively. Because the closure rate and fair value of servicing rights are significant unobservable assumptions, interest rate lock commitments are included in Level 3 of the hierarchy.

Assets and liabilities measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at June 30, 2014, Using						Total Fair Value at June 30, 2014
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(In thousands)
Measured on a recurring basis:
Assets:
Investment securities available for sale:
U.S. government sponsored mortgage-backed securities	$	—	$	293,577	$	—	$	293,577
U.S. government sponsored collateralized mortgage obligations	—		153,449		—		153,449
U.S. government agency securities	—		4,738		—		4,738
Municipal obligations	—		176		—		176
Other equity securities	—		6,016		—		6,016
Interest rate lock commitments	—		—		5		5

	Fair Value Measurements at December 31, 2013 Using						Total Fair Value at December 31, 2013
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(In thousands)
Measured on a recurring basis:
Assets:
Investment securities available for sale:
U.S. government sponsored mortgage-backed securities	$	—	$	279,588	$	—	$	279,588
U.S. government sponsored collateralized mortgage obligations	—		140,576		—		140,576
U.S. government agency securities	—		4,538		—		4,538
Municipal obligations	—		170		—		170
Other equity securities	—		5,903		—		5,903
Interest rate lock commitments	—		—		56		56

A reconciliation and income statement classification of gains and losses for the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2014 and 2013 has not been provided since the amounts are not significant.

In accordance with ASC Topic 820, certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial assets or liabilities required to be measured at fair value on a nonrecurring basis include impaired loans and mortgage servicing rights. Nonfinancial assets or liabilities required to be measured at fair value on a nonrecurring basis include other real estate owned.

Impaired loans (loans which are not expected to repay all principal and interest amounts due in accordance with the original contractual terms) are measured at an observable market price (if available) or at the fair value of the loan’s collateral (if collateral dependent). Fair value of the loan’s collateral is determined by appraisals or independent valuation which is then adjusted for the estimated costs related to liquidation of the collateral. Management’s ongoing review of appraisal information may result in additional discounts or adjustments to valuation based upon more recent market sales activity or more current appraisal information derived from properties of similar type and/or locale. A significant portion of the Company’s impaired loans are measured using the estimated fair market value of the collateral less the estimated costs to sell. Therefore, the Company has categorized its impaired loans as Level 3.

The following table presents impaired loans that were remeasured and reported at fair value through a specific reserve of the allowance for loan losses based upon the fair value of the underlying collateral during the six months ended June 30, 2014 and 2013:

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Carrying value of impaired loans	$	1,242		$	1,207
Specific reserve	(503		)	(294		)
Fair Value	$	739		$	913

Mortgage servicing rights are carried at the lower of amortized cost or estimated fair value. The estimated fair values of mortgage servicing rights are classified as Level 3 because they are obtained from independent third-party valuations through an analysis of cash flows and incorporating estimates of assumptions market participants would use in determining fair value, including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market-driven data, such as the market’s perception of future interest rate movements. The Company’s mortgage servicing rights were recorded at $1.6 million and $1.5 million at June 30, 2014 and December 31, 2013, respectively.

Non-financial assets measured at fair value on a non-recurring basis are limited to other real estate owned. Other real estate owned is carried at fair value less estimated selling costs (as determined by independent appraisal) within Level 3 of the fair value hierarchy. At the time of foreclosure, the value of the underlying loan is written down to the fair value of the real estate to be acquired by a charge to the allowance for loan losses, if necessary. The fair value is reviewed periodically and subsequent write-downs are recorded accordingly. The following table represents other real estate owned that was remeasured and reported at fair value as of June 30, 2014 and June 30, 2013:

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Carrying value of other real estate owned prior to remeasurement	$	954		$	1,631
Less: charge-offs recognized in the allowance for loan losses at initial acquisition	(96		)	(18		)
Add: fair value adjustments recognized in noninterest income at initial acquisition	—			43
Less: subsequent write-downs included in net loss on write-down of other real estate owned	(22		)	(22		)
Less: sales of other real estate owned	(228		)	(422		)
Carrying value of remeasured other real estate owned at end of period	$	608		$	1,212

Significant unobservable inputs used in Level 3 fair value measurements for financial assets and nonfinancial assets measured at fair value on a non-recurring basis at June 30, 2014 and December 31, 2013, are summarized below:

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value (In thousands)		Valuation Techniques	Unobservable Input	Range  (Average)
June 30, 2014:
Impaired loans, net of allowance	$	484	Discounted Cash Flow Analysis	Interest rate	1.5% - 7.0% (3.9%)
				Loan term (in months)	60 - 120 (95)
	$	255	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	0% - 6.0% (5.4%)
				Estimated property maintenance	0% - 3.6% (3.3%)
Mortgage servicing rights	$	1,552	Discounted Cash Flow Analysis	Interest rate	2.6% - 7.9% (4.3%)
				Loan term (in months)	111 - 527 (312)
Other real estate owned	$	785	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	0% - 8.0% (6.7%)
				Estimated property maintenance	0% (0%)
December 31, 2013:
Impaired loans, net of allowance	$	840	Discounted Cash Flow Analysis	Interest rate	1.5% - 7.0% (4.9%)
				Loan term (in months)	60 - 120 (91)
	$	230	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	6.0% (6.0%)
				Estimated property maintenance	3.6% (3.6%)
Mortgage servicing rights	$	1,473	Discounted Cash Flow Analysis	Interest rate	2.6% - 7.9% (4.3%)
				Loan term (in months)	82 - 527 (312)
Other real estate owned	$	177	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	0.0% - 6.0% (2.4%)
				Estimated property maintenance	0% (0%)

There were no transfers between levels during the six months ended June 30, 2014 or the year ended December 31, 2013.

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The methodologies for the other financial assets and financial liabilities are discussed below:

Cash and cash equivalents: The carrying amounts for cash and cash equivalents approximate fair values.

Accrued interest receivable and payable: The carrying amounts for accrued interest receivable and payable approximate fair values.

Other investments: The carrying amount for other investments, which consists primarily of Federal Home Loan Bank stock, approximates fair values.

Loans held for sale: The fair value of loans held for sale is based on quoted market prices in the secondary market for loans with similar characteristics.

Loans: The estimated fair values for all fixed-rate loans are derived utilizing discounted cash flow analyses, the calculations of which are performed on groupings of loan receivables that are similar in terms of loan type and characteristics. The expected future cash flows of each grouping are discounted using the U.S. Treasury curve and current offering rates to calculate a discount spread to the curve. The estimated fair value for variable rate loans is the carrying amount. The impact of delinquent loans on the estimation of the fair values described above is not considered to have a material effect and, accordingly, delinquent loans have been disregarded in the valuation methodologies employed. Significant inputs to the fair value measurement of the loan portfolio are unobservable, and as such are classified as Level 3.

Deposits: The estimated fair value of demand deposit accounts is the carrying amount. The fair value of fixed-maturity certificates is estimated by discounting the estimated cash flows using the interest curve and current offering rates to calculate a discount spread to the curve.

Borrowed funds: The estimated fair value for borrowed funds is determined by discounting the estimated cash flows using the current rate at which similar borrowings would be made with similar ratings and maturities.

Off-balance sheet financial instruments: The fair values for the Company’s off-balance sheet commitments are estimated based on fees charged to others to enter into similar agreements taking into account the remaining terms of the agreements and credit standing of the members. The estimated fair value of these commitments is not significant.

The carrying amount and estimated fair value of the Company’s financial instruments at June 30, 2014 and December 31, 2013 are summarized as follows:

	June 30, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets:
Level 1 inputs:
Cash and cash equivalents	$	21,210	$	21,210	$	15,880	$	15,880
Level 2 inputs:
Securities available for sale	457,956		457,956		430,775		430,775
Other investments	17,106		17,106		19,782		19,782
Loans held for sale	876		882		1,509		1,522
Accrued interest receivable	3,259		3,259		3,447		3,447
Level 3 inputs:
Loans, net	784,076		793,853		824,881		840,478
Mortgage servicing rights	1,552		1,552		1,473		1,473
Interest rate lock commitments	5		5		56		56
Financial liabilities:
Level 2 inputs:
Federal Home Loan Bank advances	$	328,667	$	327,125	$	362,000	$	360,576
Accrued interest payable	337		337		389		389
Level 3 inputs:
Deposits	822,008		832,456		813,574		824,856
Repurchase agreements	2,000		2,026		2,000		2,049
Off-balance sheet financial instruments:
Loan commitments	$	—	$	—	$	—	$	—
Letters of credit	—		—		—		—

XML

Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Interest income:
Loans, including fees	$ 8,934	$ 9,265	$ 18,136	$ 18,166
Securities - taxable	2,647	2,115	5,235	4,278
Securities - nontaxable	0	1	1	1
Total interest income	11,581	11,381	23,372	22,445
Interest expense:
Deposits	1,023	1,390	2,036	2,847
Borrowed funds	625	563	1,334	1,186
Total interest expense	1,648	1,953	3,370	4,033
Net interest income	9,933	9,428	20,002	18,412
Provision for loan losses	725	1,100	1,375	1,600
Net interest income after provision for loan losses	9,208	8,328	18,627	16,812
Noninterest income:
Service charges and other fees	2,102	2,228	4,160	4,446
Net gains on sales of loans	395	236	578	1,022
Net gains on sales of securities available for sale (reclassified from unrealized gains (losses) on available-for-sale securities in accumulated other comprehensive income)	348	0	607	1,701
Net (losses) gains on disposition of premises and equipment	0	0	(1)	344
Net gains (losses) on sales of repossessed assets	48	27	10	(3)
Commissions	403	297	777	605
Increase in cash surrender value of bank-owned life insurance	351	367	717	683
Other income	267	228	524	447
Total noninterest income	3,914	3,383	7,372	9,245
Noninterest expense:
Salaries and benefits	6,442	6,040	12,624	12,797
Software and equipment maintenance	508	696	1,095	1,306
Depreciation of furniture, software, and equipment	276	415	593	828
FDIC insurance	173	139	353	329
Net loss on write-down of other real estate owned	22	22	22	22
Real estate owned expense (income)	29	(15)	64	(35)
Service fees	154	126	298	240
Communications costs	221	249	457	473
Other operations expense	831	805	1,582	1,566
Occupancy	954	945	1,919	1,925
Professional and outside services	1,949	1,002	2,991	2,040
Loan servicing	166	121	244	232
Marketing	71	158	193	308
Total noninterest expense	11,796	10,703	22,435	22,031
Income before income tax expense	1,326	1,008	3,564	4,026
Income tax expense (includes income tax expense from items reclassified from accumulated other comprehensive income of $118 and $0 for the three months ended June 30, 2014 and 2013, respectively, and $206 and $578 for the six months ended June 30, 2014 and 2013, respectively)	428	334	1,137	1,419
Net income	$ 898	$ 674	$ 2,427	$ 2,607
Earnings per share:
Basic	$ 0.08	$ 0.06	$ 0.23	$ 0.25
Diluted	$ 0.08	$ 0.06	$ 0.22	$ 0.25

XML

Investment Securities

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The amortized cost and estimated fair values of investment securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) as of June 30, 2014 and December 31, 2013 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
June 30, 2014
U. S. government sponsored mortgage-backed securities	$	290,897	$	4,675	$	(1,995	)	$	293,577
U. S. government sponsored collateralized mortgage obligations	152,029		2,123		(703		)	153,449
Agency bonds	5,000		—		(262		)	4,738
Municipal obligations	180		—		(4		)	176
Other equity securities	6,000		16		—			6,016
Total investment securities available for sale	$	454,106	$	6,814	$	(2,964	)	$	457,956
December 31, 2013
U. S. government sponsored mortgage-backed securities	$	282,180	$	2,616	$	(5,208	)	$	279,588
U. S. government sponsored collateralized mortgage obligations	140,221		1,758		(1,403		)	140,576
Agency bonds	5,000		—		(462		)	4,538
Municipal obligations	179		—		(9		)	170
Other equity securities	6,000		—		(97		)	5,903
Total investment securities available for sale	$	433,580	$	4,374	$	(7,179	)	$	430,775

Investment securities available for sale with gross unrealized losses at June 30, 2014 and December 31, 2013, aggregated by investment category and length of time that individual securities have been in a continuous loss position, were as follows:

	Continuous Unrealized Losses Existing for
	Less Than 12 Months					Greater Than 12 Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
June 30, 2014
U. S. government sponsored mortgage-backed securities	$	2,986	$	(2	)	$	94,245	$	(1,993	)	$	97,231	$	(1,995	)
U. S. government sponsored collateralized mortgage obligations	29,129		(126		)	14,197		(577		)	43,326		(703		)
Agency bonds	—		—			4,738		(262		)	4,738		(262		)
Municipal obligations	—		—			176		(4		)	176		(4		)
	$	32,115	$	(128	)	$	113,356	$	(2,836	)	$	145,471	$	(2,964	)
December 31, 2013
U. S. government sponsored mortgage-backed securities	$	142,715	$	(5,088	)	$	2,248	$	(120	)	$	144,963	$	(5,208	)
U. S. government sponsored collateralized mortgage obligations	50,066		(1,403		)	—		—			50,066		(1,403		)
Agency bonds	4,538		(462		)	—		—			4,538		(462		)
Municipal obligations	170		(9		)	—		—			170		(9		)
Other equity securities	5,903		(97		)	—		—			5,903		(97		)
	$	203,392	$	(7,059	)	$	2,248	$	(120	)	$	205,640	$	(7,179	)

At June 30, 2014, the Company owned 191 investment securities of which 61 had unrealized losses. At December 31, 2013, the Company owned 202 investment securities of which 82 had unrealized losses. Unrealized losses generally result from interest rate levels differing from those existing at the time of purchase of the securities and, as to mortgage-backed securities, estimated prepayment speeds. These unrealized losses are considered to be temporary as they reflect fair values on June 30, 2014 and December 31, 2013, and are subject to change daily as interest rates fluctuate. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell prior to recovery. Management evaluates investment securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent of the Company to sell or whether it would be more likely than not required to sell its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

The amortized cost and fair value of securities available for sale by contractual maturity at June 30, 2014 are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or earlier redemptions that may occur.

	Amortized Cost		Fair Value
	(In thousands)
Due in one year or less	$	—	$	—
Due from one to five years	—		—
Due from five to ten years	31,915		31,549
Due after ten years	416,191		420,391
Equity securities	6,000		6,016
Total	$	454,106	$	457,956

Investment securities with a fair value of $125.8 million and $161.6 million at June 30, 2014 and December 31, 2013, respectively, were pledged to secure Federal Home Loan Bank advances. In addition, investment securities with a fair value of $2.6 million and $2.2 million at June 30, 2014 and December 31, 2013, respectively, were pledged to secure repurchase agreements which are included in other borrowings.

Sales activity of securities available for sale for the three and six months ended June 30, 2014 and 2013 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Proceeds from sales of investment securities	$	11,671	$	—	$	18,099	$	46,212
Gross gains from sales of investment securities	348		—		607		1,701

Gains or losses on the sales of securities are recognized at the trade date utilizing the specific identification method.

XML

Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2014

New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-04, “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.” This update clarifies that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of the residential real estate property collateralizing a consumer mortgage loan, upon either: (i) the creditor obtaining legal title to the property upon completion of the foreclosure; or (ii) the borrower conveying all interest in the property to the creditor to satisfy the loan through completion of a deed-in-lieu of foreclosure or through a similar legal agreement. ASU 2014-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” Under the new guidance, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results when any of the following occurs: (i) the component of an entity or group of components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale; (ii) the component of an entity or group of components of an entity is disposed of by sale; or (iii) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). ASU 2014-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This update states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update affects entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is not permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

In June 2014, the FASB issued ASU 2014-11, “Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.” This update aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements by accounting for these transactions as secured borrowings. This update also requires a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return of the transferred financial assets throughout the term of the transaction. ASU 2014-11 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. Early adoption is not permitted. The adoption of this guidance is not expected to have a significant impact on the Company's financial statements.

XML

Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2014

Receivables [Abstract]

Loan Composition

	June 30, 2014			December 31, 2013
	(In thousands)
Residential real estate loans:
One- to four-family	$	269,233		$	262,723
Home equity	15,937			17,106
Total residential real estate loans	285,170			279,829
Commercial loans:
Commercial real estate	113,229			106,560
Real estate construction	59,886			59,648
Commercial business	78,381			69,320
Total commercial loans	251,496			235,528
Consumer loans:
Automobile, indirect	204,468			264,671
Automobile, direct	31,628			31,598
Other consumer	15,028			15,330
Total consumer loans	251,124			311,599
Total loans	787,790			826,956
Plus (less):
Deferred fees and discounts	2,674			4,370
Allowance for loan losses	(6,388		)	(6,445		)
Total loans receivable, net	$	784,076		$	824,881

Mortgage servicing

	June 30, 2014		December 31, 2013
	(In thousands)
Principal balances of the loans sold and serviced for FNMA	$	199,901	$	189,084
Mortgage servicing rights associated with the mortgage loans serviced for FNMA	1,552		1,473

Impaired Loans

	Recorded Balance		Unpaid Principal Balance		Related Allowance		Average Recorded Balance		Interest Income Recognized
	(In thousands)
June 30, 2014:
With no related allowance recorded:
One- to four-family	$	7,017	$	7,017	$	—	$	7,434	$	109
Home equity	34		34		—		37		—
Commercial real estate	2,331		2,331		—		2,337		83
Real estate construction	—		—		—		—		—
Commercial business	178		178		—		418		1
Automobile, indirect	787		787		—		554		8
Automobile, direct	34		34		—		296		—
Other consumer	10		10		—		11		—
Impaired loans with no related allowance recorded	10,391		10,391		—		11,087		201
With an allowance recorded:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity	—		—		—		—		—
Commercial real estate	517		517		287		545		—
Real estate construction	—		—		—		—		—
Commercial business	725		725		216		838		3
Automobile, indirect	—		—		—		—		—
Automobile, direct	—		—		—		—		—
Other consumer	—		—		—		—		—
Impaired loans with an allowance recorded	1,242		1,242		503		1,383		3
Total	$	11,633	$	11,633	$	503	$	12,470	$	204
December 31, 2013:
With no related allowance recorded:
One- to four-family	$	7,531	$	7,531	$	—	$	7,468	$	305
Home equity	42		42		—		14		1
Commercial real estate	2,347		2,347		—		4,237		31
Real estate construction	—		—		—		3,171		66
Commercial business	591		591		—		700		21
Automobile, indirect	824		824		—		738		26
Automobile, direct	32		32		—		34		2
Other consumer	15		15		—		4		—
Impaired loans with no related allowance recorded	11,382		11,382		—		16,366		452
With an allowance recorded:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity	—		—		—		—		—
Commercial real estate	551		551		321		46		—
Real estate construction	—		—		—		—		—
Commercial business	1,040		1,040		200		1,064		8
Automobile, indirect	—		—		—		—		—
Automobile, direct	—		—		—		—		—
Other consumer	—		—		—		—		—
Impaired loans with an allowance recorded	1,591		1,591		521		1,110		8
Total	$	12,973	$	12,973	$	521	$	17,476	$	460

Nonaccrual loans

	June 30, 2014		December 31, 2013
	(In thousands)
Residential real estate loans:
One- to four-family	$	1,716	$	2,050
Home equity	34		42
Commercial loans:
Commercial real estate	758		800
Real estate construction	—		—
Commercial business	654		864
Consumer loans:
Automobile, indirect	557		558
Automobile, direct	23		15
Other consumer	10		15
Total	$	3,752	$	4,344

Past due loan aging

	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Loans Not Past Due		Total
	(In thousands)
June 30, 2014:
Residential real estate loans:
One- to four-family	$	—	$	984	$	1,604	$	2,588	$	266,645	$	269,233
Home equity	—		—		34		34		15,903		15,937
Commercial loans:
Commercial real estate	49		—		119		168		113,061		113,229
Real estate construction	—		—		—		—		59,886		59,886
Commercial business	—		85		53		138		78,243		78,381
Consumer loans:
Automobile, indirect	2,121		399		557		3,077		201,391		204,468
Automobile, direct	55		8		23		86		31,542		31,628
Other consumer	51		20		10		81		14,947		15,028
Total loans	$	2,276	$	1,496	$	2,400	$	6,172	$	781,618	$	787,790

	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Loans Not Past Due		Total
	(In thousands)
December 31, 2013:
Residential real estate loans:
One- to four-family	$	1,170	$	—	$	1,932	$	3,102	$	259,621	$	262,723
Home equity	1		—		42		43		17,063		17,106
Commercial loans:
Commercial real estate	—		—		120		120		106,440		106,560
Real estate construction	876		—		—		876		58,772		59,648
Commercial business	—		—		—		—		69,320		69,320
Consumer loans:
Automobile, indirect	2,217		615		558		3,390		261,281		264,671
Automobile, direct	48		21		15		84		31,514		31,598
Other consumer	72		33		15		120		15,210		15,330
Total loans	$	4,384	$	669	$	2,682	$	7,735	$	819,221	$	826,956

Risk category of loans by class for loans individually analyzed for impairment

	Commercial Real Estate		Real Estate Construction		Commercial Business		One- to Four- Family		Total
	(In thousands)
June 30, 2014:
Pass	$	107,424	$	59,886	$	74,300	$	14,831	$	256,441
Special Mention	321		—		1,241		—		1,562
Substandard	5,484		—		2,840		4,583		12,907
Doubtful	—		—		—		—		—
	$	113,229	$	59,886	$	78,381	$	19,414	$	270,910
December 31, 2013:
Pass	$	101,134	$	59,536	$	64,155	$	15,514	$	240,339
Special Mention	735		—		2,164		—		2,899
Substandard	4,691		112		3,001		3,175		10,979
Doubtful	—		—		—		—		—
	$	106,560	$	59,648	$	69,320	$	18,689	$	254,217

Real estate loans collectively evaluated for impairment

	One- to Four- Family		Home Equity		Total
	(In thousands)
June 30, 2014:
Prime	$	194,841	$	15,432	$	210,273
Subprime	54,978		505		55,483
	$	249,819	$	15,937	$	265,756
December 31, 2013:
Prime	$	195,919	$	16,521	$	212,440
Subprime	48,115		585		48,700
	$	244,034	$	17,106	$	261,140

Consumer loans by credit score

Risk Tier	Credit Score	Automobile, indirect		Automobile, direct		Other consumer		Total
	(In thousands)
June 30, 2014:
A	720+	$	106,657	$	23,101	$	10,949	$	140,707
B	690–719	40,476		4,207		2,260		46,943
C	661–689	34,299		2,408		1,463		38,170
D	660 and under	23,036		1,912		356		25,304
		$	204,468	$	31,628	$	15,028	$	251,124
December 31, 2013:
A	720+	$	135,583	$	23,137	$	11,453	$	170,173
B	690–719	53,678		4,311		2,228		60,217
C	661–689	44,732		2,320		1,268		48,320
D	660 and under	30,678		1,830		381		32,889
		$	264,671	$	31,598	$	15,330	$	311,599

Activity in the allowance for loan losses by portfolio segment

	Residential Real Estate			Commercial			Consumer			Total
	(In thousands)
June 30, 2014:
Allowance for loan losses for the three months ended:
Beginning balance	$	809		$	2,750		$	2,909		$	6,468
Charge-offs	(84		)	(79		)	(746		)	(909		)
Recoveries of loans previously charged-off	9			10			85			104
Provision for loan losses	137			172			416			725
Ending balance	$	871		$	2,853		$	2,664		$	6,388
Allowance for loan losses for the six months ended:
Beginning balance	$	851		$	2,517		$	3,077		$	6,445
Charge-offs	(102		)	(79		)	(1,494		)	(1,675		)
Recoveries of loans previously charged-off	23			34			186			243
Provision for loan losses	99			381			895			1,375
Ending balance	$	871		$	2,853		$	2,664		$	6,388
Ending balance attributable to loans:
Individually evaluated for impairment	$	—		$	503		$	—		$	503
Collectively evaluated for impairment	871			2,350			2,664			5,885
Total ending balance	$	871		$	2,853		$	2,664		$	6,388
June 30, 2013:
Allowance for loan losses for the three months ended:
Beginning balance	$	831		$	3,345		$	2,746		$	6,922
Charge-offs	—			(203		)	(846		)	(1,049		)
Recoveries of loans previously charged-off	14			15			80			109
Provision for loan losses	(51		)	218			933			1,100
Ending balance	$	794		$	3,375		$	2,913		$	7,082
Allowance for loan losses for the six months ended:
Beginning balance	$	870		$	3,133		$	2,897		$	6,900
Charge-offs	(153		)	(202		)	(1,299		)	(1,654		)
Recoveries of loans previously charged-off	22			30			184			236
Provision for loan losses	55			414			1,131			1,600
Ending balance	$	794		$	3,375		$	2,913		$	7,082
Ending balance attributable to loans:
Individually evaluated for impairment	$	—		$	294		$	—		$	294
Collectively evaluated for impairment	794			3,081			2,913			6,788
Total ending balance	$	794		$	3,375		$	2,913		$	7,082

Investment in loans disaggregated on the basis of impairment methodology

	Residential Real Estate		Commercial		Consumer		Total
	(In thousands)
June 30, 2014:
Loans individually evaluated for impairment	$	7,051	$	3,751	$	831	$	11,633
Loans collectively evaluated for impairment	278,119		247,745		250,293		776,157
Total ending balance	$	285,170	$	251,496	$	251,124	$	787,790
December 31, 2013:
Loans individually evaluated for impairment	$	7,573	$	4,529	$	871	$	12,973
Loans collectively evaluated for impairment	272,256		230,999		310,728		813,983
Total ending balance	$	279,829	$	235,528	$	311,599	$	826,956
June 30, 2013:
Loans individually evaluated for impairment	$	7,732	$	10,716	$	754	$	19,202
Loans collectively evaluated for impairment	262,014		223,999		298,516		784,529
Total ending balance	$	269,746	$	234,715	$	299,270	$	803,731

Troubled debt restructuring summary

	June 30, 2014		December 31, 2013
	(In thousands)
TDR
Residential Real Estate	$	5,413	$	6,276
Commercial	2,549		2,581
Consumer	310		382
Total TDR	8,272		9,239
Less: TDR in non-accrual status
Residential Real Estate	112		795
Commercial	460		483
Consumer	70		99
Total performing TDR	$	7,630	$	7,862

Troubled debt restructurings by method of concession

	Residential Real Estate		Commercial		Consumer		Total
	(In thousands)
Six Months Ended June 30, 2014:
Interest rate reduction	$	1,445	$	—	$	21	$	1,466
Loan maturity extension	—		—		—		—
Forbearance	—		—		—		—
Principal reduction	—		—		—		—
Total	$	1,445	$	—	$	21	$	1,466
Six Months Ended June 30, 2013:
Interest rate reduction	$	—	$	—	$	27	$	27
Loan maturity extension	—		—		29		29
Forbearance	—		—		—		—
Principal reduction	—		—		—		—
Total	$	—	$	—	$	56	$	56

TDR loans modified during the period

	Number of Loans	Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
	(Dollar amounts in thousands)
Six Months Ended June 30, 2014:
Residential Real Estate	1	$	1,445	$	1,445
Commercial	—	—		—
Consumer	1	21		21
Total	2	$	1,466	$	1,466
Six Months Ended June 30, 2013:
Residential Real Estate	—	$	—	$	—
Commercial	—	—		—
Consumer	3	56		56
Total	3	$	56	$	56

Non-performing assets

	June 30, 2014			December 31, 2013
	(Dollar amounts in thousands)
Other real estate owned and foreclosed assets
Residential Real Estate	$	715		$	107
Commercial	70			70
Consumer	190			850
Total other real estate owned and foreclosed assets	975			1,027
Total non-accrual loans	3,752			4,344
Total non-performing assets	$	4,727		$	5,371
Non-accrual loans/Total loans	0.48		%	0.53		%
Non-performing assets/Total assets	0.34		%	0.39		%

XML

Business Combination Business Combination

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Business Combination

On April 28, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Southside Bancshares, Inc. (“Southside”), and Omega Merger Sub, Inc., a wholly owned subsidiary of Southside (“Merger Sub”), whereby Merger Sub will merge with and into the Company with the Company as the surviving corporation (the “First Merger”). Immediately after the First Merger, the Company will be merged into Southside and, subsequently, OmniAmerican Bank will be merged into Southside’s subsidiary, Southside Bank. If the First Merger is completed, shareholders of the Company will receive 0.4459 of a share of Southside’s common stock plus $13.125 in cash for each outstanding share of OmniAmerican common stock. Concurrently with the execution of the Merger Agreement, Southside entered into voting and support agreements with each non-employee director of the Company pursuant to which each director agreed to, among other things, vote his or her shares in favor of the Merger Agreement. Completion of the mergers is subject to the approval of the First Merger by the Company’s shareholders, the approval of the issuance of shares of Southside common stock to OmniAmerican shareholders in connection with the First Merger, approval by the appropriate regulatory agencies, and other customary terms and conditions as described in the Merger Agreement. The Merger Agreement was filed with the Securities and Exchange Commission as an exhibit to the Company’s Form 10-Q for the Quarterly Period Ended March 31, 2014.

XML

Other Borrowings

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Other Borrowings [Text Block]

Other Borrowings

Beginning July 26, 2007, the Company entered into sales of securities under agreements to repurchase (“Repurchase Agreements”) with PNC Bank, N.A. (“PNC”). The Repurchase Agreements are structured as the sale of a specified amount of identified securities to PNC which the Company has agreed to repurchase five years after the initial sale. The Repurchase Agreements are treated as financings, and the obligations to repurchase securities sold are included in other borrowings in the consolidated balance sheets. The underlying securities continue to be carried as assets of the Company, and the Company is entitled to receive interest and principal payments on the underlying securities. The Company had $2.0 million in repurchase agreements outstanding at June 30, 2014 and December 31, 2013. These repurchase agreements were secured by investment securities with a fair value of $2.6 million and $2.2 million at June 30, 2014 and December 31, 2013, respectively.

XML

Employee Benefit Plans - Stock Options activity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Employee Benefits and Share-based Compensation [Abstract]
Shares, Outstanding at Beginning of Period	394,933
Shares, Granted	428,788
Shares, Exercised	(12,272)
Shares, Forfeited	(22,400)
Shares, Expired	(2,400)
Shares, Outstanding at End of Period	786,649	394,933
Shares, Fully vested and expected to vest	683,953
Shares, Exercisable at End of Period	198,117
Weighted Average Exercise Price, Outstanding at Beginning of Period	$ 16.13
Weighted Average Exercise Price, Granted	$ 21.11
Weighted Average Exercise Price, Exercised	$ 14.29
Weighted Average Exercise Price, Forfeited	$ 21.09
Weighted Average Exercise Price, Expired	$ 22.24
Weighted Average Exercise Price, Outstanding at End of Period	$ 18.71	$ 16.13
Weighted Average Exercise Price, Fully vested and expected to vest	$ 18.53
Weighted Average Exercise Price, Exercisable at End of Period	$ 14.99
Weighted Average Remaining Contractual Term (years), Outstanding at Beginning of Period	8 years 5 months 9 days	7 years 6 months 16 days
Weighted Average Remaining Contractual Term, Granted	9 years 8 months 5 days
Weighted Average Remaining Contractual Term, Fully vested and expected to vest	8 years 4 months 1 day
Weighted Average Remaining Contractual Term, Exercisable at End of Period	6 years 8 months 28 days
Aggregate Intrinsic Value, Outstanding at Beginning of Period	$ 2,088
Aggregate Intrinsic Value, Granted	1,668
Aggregate Intrinsic Value, Exercised	(108)
Aggregate Intrinsic Value, Forfeited	(88)
Aggregate Intrinsic Value, Expired	(7)
Aggregate Intrinsic Value, Outstanding at End of Period	4,946	2,088
Aggregate Intrinsic Value, Fully vested and expected to vest	4,425
Aggregate Intrinsic Value, Exercisable at End of Period	$ 1,982

XML

Loans and Allowance for Loan Losses

6 Months Ended

Jun. 30, 2014

Receivables [Abstract]

Loans and Allowance for Loan Losses

Loans and Allowance for Loan Losses

The composition of the loan portfolio was as follows at the dates indicated:

	June 30, 2014			December 31, 2013
	(In thousands)
Residential real estate loans:
One- to four-family	$	269,233		$	262,723
Home equity	15,937			17,106
Total residential real estate loans	285,170			279,829
Commercial loans:
Commercial real estate	113,229			106,560
Real estate construction	59,886			59,648
Commercial business	78,381			69,320
Total commercial loans	251,496			235,528
Consumer loans:
Automobile, indirect	204,468			264,671
Automobile, direct	31,628			31,598
Other consumer	15,028			15,330
Total consumer loans	251,124			311,599
Total loans	787,790			826,956
Plus (less):
Deferred fees and discounts	2,674			4,370
Allowance for loan losses	(6,388		)	(6,445		)
Total loans receivable, net	$	784,076		$	824,881

The Company originates one- to four-family residential real estate loans which are sold in the secondary market. The Company retains the servicing for residential real estate loans that are sold to the Federal National Mortgage Association (“FNMA”). Residential real estate loans serviced for FNMA are not included as assets on the consolidated balance sheets. The following table presents loans sold and serviced as of June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013
	(In thousands)
Principal balances of the loans sold and serviced for FNMA	$	199,901	$	189,084
Mortgage servicing rights associated with the mortgage loans serviced for FNMA	1,552		1,473

The following table presents loans identified as impaired by class of loans as of June 30, 2014 and December 31, 2013:

	Recorded Balance		Unpaid Principal Balance		Related Allowance		Average Recorded Balance		Interest Income Recognized
	(In thousands)
June 30, 2014:
With no related allowance recorded:
One- to four-family	$	7,017	$	7,017	$	—	$	7,434	$	109
Home equity	34		34		—		37		—
Commercial real estate	2,331		2,331		—		2,337		83
Real estate construction	—		—		—		—		—
Commercial business	178		178		—		418		1
Automobile, indirect	787		787		—		554		8
Automobile, direct	34		34		—		296		—
Other consumer	10		10		—		11		—
Impaired loans with no related allowance recorded	10,391		10,391		—		11,087		201
With an allowance recorded:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity	—		—		—		—		—
Commercial real estate	517		517		287		545		—
Real estate construction	—		—		—		—		—
Commercial business	725		725		216		838		3
Automobile, indirect	—		—		—		—		—
Automobile, direct	—		—		—		—		—
Other consumer	—		—		—		—		—
Impaired loans with an allowance recorded	1,242		1,242		503		1,383		3
Total	$	11,633	$	11,633	$	503	$	12,470	$	204
December 31, 2013:
With no related allowance recorded:
One- to four-family	$	7,531	$	7,531	$	—	$	7,468	$	305
Home equity	42		42		—		14		1
Commercial real estate	2,347		2,347		—		4,237		31
Real estate construction	—		—		—		3,171		66
Commercial business	591		591		—		700		21
Automobile, indirect	824		824		—		738		26
Automobile, direct	32		32		—		34		2
Other consumer	15		15		—		4		—
Impaired loans with no related allowance recorded	11,382		11,382		—		16,366		452
With an allowance recorded:
One- to four-family	$	—	$	—	$	—	$	—	$	—
Home equity	—		—		—		—		—
Commercial real estate	551		551		321		46		—
Real estate construction	—		—		—		—		—
Commercial business	1,040		1,040		200		1,064		8
Automobile, indirect	—		—		—		—		—
Automobile, direct	—		—		—		—		—
Other consumer	—		—		—		—		—
Impaired loans with an allowance recorded	1,591		1,591		521		1,110		8
Total	$	12,973	$	12,973	$	521	$	17,476	$	460

For the six months ended June 30, 2013, the average recorded investment in impaired loans and the related amount of interest income recognized during the time within the period that the loans were impaired were $20.0 million and $201,000, respectively.

As of June 30, 2014 and December 31, 2013, no additional funds were committed to be advanced in connection with impaired loans.

The following table presents the recorded investment in non-accrual loans by class of loans as of June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013
	(In thousands)
Residential real estate loans:
One- to four-family	$	1,716	$	2,050
Home equity	34		42
Commercial loans:
Commercial real estate	758		800
Real estate construction	—		—
Commercial business	654		864
Consumer loans:
Automobile, indirect	557		558
Automobile, direct	23		15
Other consumer	10		15
Total	$	3,752	$	4,344

There were no loans greater than 90 days past due that continued to accrue interest at June 30, 2014 or December 31, 2013.

The following table presents the aging of the recorded investment in past due loans as of June 30, 2014 and December 31, 2013 by class of loans:

	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Loans Not Past Due		Total
	(In thousands)
June 30, 2014:
Residential real estate loans:
One- to four-family	$	—	$	984	$	1,604	$	2,588	$	266,645	$	269,233
Home equity	—		—		34		34		15,903		15,937
Commercial loans:
Commercial real estate	49		—		119		168		113,061		113,229
Real estate construction	—		—		—		—		59,886		59,886
Commercial business	—		85		53		138		78,243		78,381
Consumer loans:
Automobile, indirect	2,121		399		557		3,077		201,391		204,468
Automobile, direct	55		8		23		86		31,542		31,628
Other consumer	51		20		10		81		14,947		15,028
Total loans	$	2,276	$	1,496	$	2,400	$	6,172	$	781,618	$	787,790

	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Loans Not Past Due		Total
	(In thousands)
December 31, 2013:
Residential real estate loans:
One- to four-family	$	1,170	$	—	$	1,932	$	3,102	$	259,621	$	262,723
Home equity	1		—		42		43		17,063		17,106
Commercial loans:
Commercial real estate	—		—		120		120		106,440		106,560
Real estate construction	876		—		—		876		58,772		59,648
Commercial business	—		—		—		—		69,320		69,320
Consumer loans:
Automobile, indirect	2,217		615		558		3,390		261,281		264,671
Automobile, direct	48		21		15		84		31,514		31,598
Other consumer	72		33		15		120		15,210		15,330
Total loans	$	4,384	$	669	$	2,682	$	7,735	$	819,221	$	826,956

Our methodology for evaluating the adequacy of the allowance for loan losses consists of:

• a specific loss component which is the allowance for impaired loans; and

• a general loss component for all other loans not individually evaluated for impairment but that, on a portfolio basis, are believed to have some inherent but unidentified loss.

The specific component of the allowance for loan losses relates to loans that are considered impaired, which are generally classified as doubtful or substandard. For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan are lower than the carrying value of that loan. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for non-homogeneous loans, including one- to four-family residential real estate loans with balances in excess of $1 million, commercial real estate, real estate construction, and commercial business loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, consumer and one- to four-family residential real estate loans with balances less than $1 million are not separately identified for impairment disclosures, unless such loans are the subject of a restructuring agreement.

The general component of the allowance for loan losses covers unimpaired loans and is based on the historical loss experience adjusted for other qualitative factors. The loan portfolio is stratified into homogeneous groups of loans that possess similar loss potential characteristics, and an appropriate loss ratio adjusted for other qualitative factors is applied to the homogeneous pools of loans to estimate the incurred losses in the loan portfolio. The other qualitative factors considered by management include, but are not limited to, the following:

• changes in lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices;

• changes in national and local economic and business conditions and developments, including the condition of various market segments;

• changes in the nature and volume of the loan portfolio;

• changes in the experience, ability, and depth of knowledge of the lending staff;

• changes in the trend of the volume and severity of past due and classified loans; and trends in the volume of non-accrual loans, troubled debt restructurings, and other loan modifications;

• changes in the quality of our loan review system and the degree of oversight by the board of directors;

• the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and

• the effect of external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in our current portfolio.

Consumer loans generally have greater risk of loss or default than one- to four-family residential real estate loans, particularly in the case of loans that are secured by rapidly depreciable assets, such as automobiles, or loans that are unsecured. In these cases, a risk exists that the collateral, if any, for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the ability to recover on consumer loans.

Commercial real estate loans generally have greater credit risks compared to one- to four-family residential real estate loans, as they typically involve larger loan balances concentrated with single borrowers or groups of related borrowers. In addition, the payment experience on loans secured by income-producing properties typically depends on the successful operation of the related real estate project and thus may be subject to a greater extent to adverse conditions in the real estate market and in the general economy.

Commercial business loans involve a greater risk of default than residential real estate loans of like duration since their repayment generally depends on the successful operation of the borrower’s business and the sufficiency of collateral, if any. Loans secured by multi-family residential real estate generally involve a greater degree of credit risk than one- to four-family residential real estate loans and carry larger loan balances. This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the effects of general economic conditions on income producing properties, and the increased difficulty of evaluating and monitoring these types of loans. Furthermore, the repayment of loans secured by multi-family mortgages typically depends upon the successful operation of the related real estate property. If the cash flow from the project is reduced, the borrower’s ability to repay the loan may be impaired.

Real estate construction loans generally have greater credit risk than traditional one- to four-family residential real estate loans. The repayment of these loans depends upon the sale of the property to third parties or the availability of permanent financing upon completion of all improvements. In the event a loan is made on property that is not yet approved for the planned development, there is the risk that approvals will not be granted or will be delayed. These events may adversely affect the borrower and the collateral value of the property. Real estate construction loans also expose the Company to the risk that improvements will not be completed on time in accordance with specifications and projected costs. In addition, the ultimate sale or rental of the property may not occur as anticipated.

When establishing the allowance for loan losses, management categorizes loans into risk categories based on the class of loans — residential real estate, commercial, or consumer — and relevant information about the ability of the borrowers to repay the loans, such as the current economic conditions, historical payment experience, the nature and volume of the loan portfolio, the financial strength of the borrower, and the estimated value of any underlying collateral, among other factors. Management classifies the loans individually analyzed for impairment as to credit risk. This analysis includes residential real estate loans with an outstanding balance in excess of $1 million and non-homogeneous loans, such as commercial real estate, real estate construction, and commercial business loans. The following definitions for the credit risk ratings are used for such loans:

Special mention. Special mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose the institution to sufficient risk to warrant adverse classification.

Substandard. Substandard loans have well defined weaknesses where a payment default and/or a loss is possible, but not yet probable. Loans so classified are inadequately protected by the current net worth and repayment capacity of the obligor or of the collateral pledged, if any. If deficiencies are not corrected quickly, there is a possibility of loss.

Doubtful. Doubtful loans have the weaknesses and characteristics of substandard loans, but the available information suggests that collection or liquidation in its entirety, on the basis of currently existing facts, conditions and values, is highly improbable. The possibility of a loss is exceptionally high, but certain identifiable contingencies could possibly arise (proposed merger, acquisition, capital injection, refinancing plans, and pledging of additional collateral) that may strengthen the loan, such that it is reasonable to defer its classification as a loss until a more exact status is determined.

Loans not meeting the criteria described above are considered to be pass-rated loans. The following table presents the risk category of loans by class for loans individually analyzed for impairment as of June 30, 2014 and December 31, 2013:

	Commercial Real Estate		Real Estate Construction		Commercial Business		One- to Four- Family		Total
	(In thousands)
June 30, 2014:
Pass	$	107,424	$	59,886	$	74,300	$	14,831	$	256,441
Special Mention	321		—		1,241		—		1,562
Substandard	5,484		—		2,840		4,583		12,907
Doubtful	—		—		—		—		—
	$	113,229	$	59,886	$	78,381	$	19,414	$	270,910
December 31, 2013:
Pass	$	101,134	$	59,536	$	64,155	$	15,514	$	240,339
Special Mention	735		—		2,164		—		2,899
Substandard	4,691		112		3,001		3,175		10,979
Doubtful	—		—		—		—		—
	$	106,560	$	59,648	$	69,320	$	18,689	$	254,217

The Company classifies residential real estate loans that are not analyzed individually for impairment (less than $1 million) as prime or subprime. The Company defines a subprime residential real estate loan as any loan to a borrower who has no credit score or a credit score of less than 661 along with at least one of the following at the time of funding:

• Two or more 30 day delinquencies in the past 12 months;

• One or more 60 day delinquencies in the past 24 months;

• Bankruptcy filing within the past 60 months;

• Judgment or unpaid charge-off of $500 or more in the last 24 months; and

• Foreclosure or repossession in the past 24 months.

All other residential real estate loans not individually analyzed for impairment are classified as prime.

The following table presents the prime and subprime residential real estate loans collectively evaluated for impairment as of June 30, 2014 and December 31, 2013:

	One- to Four- Family		Home Equity		Total
	(In thousands)
June 30, 2014:
Prime	$	194,841	$	15,432	$	210,273
Subprime	54,978		505		55,483
	$	249,819	$	15,937	$	265,756
December 31, 2013:
Prime	$	195,919	$	16,521	$	212,440
Subprime	48,115		585		48,700
	$	244,034	$	17,106	$	261,140

The Company evaluates consumer loans based on the credit score for each borrower when the loan is originated. The Company defines a subprime consumer loan as any loan to a borrower who has a credit score of less than 661 at the time of funding. The following table presents the credit score for each of the classes of consumer loans as of June 30, 2014 and December 31, 2013:

Risk Tier	Credit Score	Automobile, indirect		Automobile, direct		Other consumer		Total
	(In thousands)
June 30, 2014:
A	720+	$	106,657	$	23,101	$	10,949	$	140,707
B	690–719	40,476		4,207		2,260		46,943
C	661–689	34,299		2,408		1,463		38,170
D	660 and under	23,036		1,912		356		25,304
		$	204,468	$	31,628	$	15,028	$	251,124
December 31, 2013:
A	720+	$	135,583	$	23,137	$	11,453	$	170,173
B	690–719	53,678		4,311		2,228		60,217
C	661–689	44,732		2,320		1,268		48,320
D	660 and under	30,678		1,830		381		32,889
		$	264,671	$	31,598	$	15,330	$	311,599

The following table presents the activity in the allowance for loan losses by portfolio segment based on impairment method for the three months ended June 30, 2014 and 2013:

	Residential Real Estate			Commercial			Consumer			Total
	(In thousands)
June 30, 2014:
Allowance for loan losses for the three months ended:
Beginning balance	$	809		$	2,750		$	2,909		$	6,468
Charge-offs	(84		)	(79		)	(746		)	(909		)
Recoveries of loans previously charged-off	9			10			85			104
Provision for loan losses	137			172			416			725
Ending balance	$	871		$	2,853		$	2,664		$	6,388
Allowance for loan losses for the six months ended:
Beginning balance	$	851		$	2,517		$	3,077		$	6,445
Charge-offs	(102		)	(79		)	(1,494		)	(1,675		)
Recoveries of loans previously charged-off	23			34			186			243
Provision for loan losses	99			381			895			1,375
Ending balance	$	871		$	2,853		$	2,664		$	6,388
Ending balance attributable to loans:
Individually evaluated for impairment	$	—		$	503		$	—		$	503
Collectively evaluated for impairment	871			2,350			2,664			5,885
Total ending balance	$	871		$	2,853		$	2,664		$	6,388
June 30, 2013:
Allowance for loan losses for the three months ended:
Beginning balance	$	831		$	3,345		$	2,746		$	6,922
Charge-offs	—			(203		)	(846		)	(1,049		)
Recoveries of loans previously charged-off	14			15			80			109
Provision for loan losses	(51		)	218			933			1,100
Ending balance	$	794		$	3,375		$	2,913		$	7,082
Allowance for loan losses for the six months ended:
Beginning balance	$	870		$	3,133		$	2,897		$	6,900
Charge-offs	(153		)	(202		)	(1,299		)	(1,654		)
Recoveries of loans previously charged-off	22			30			184			236
Provision for loan losses	55			414			1,131			1,600
Ending balance	$	794		$	3,375		$	2,913		$	7,082
Ending balance attributable to loans:
Individually evaluated for impairment	$	—		$	294		$	—		$	294
Collectively evaluated for impairment	794			3,081			2,913			6,788
Total ending balance	$	794		$	3,375		$	2,913		$	7,082

The Company’s recorded investment in loans as of June 30, 2014, December 31, 2013, and June 30, 2013 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company’s impairment methodology is as follows:

	Residential Real Estate		Commercial		Consumer		Total
	(In thousands)
June 30, 2014:
Loans individually evaluated for impairment	$	7,051	$	3,751	$	831	$	11,633
Loans collectively evaluated for impairment	278,119		247,745		250,293		776,157
Total ending balance	$	285,170	$	251,496	$	251,124	$	787,790
December 31, 2013:
Loans individually evaluated for impairment	$	7,573	$	4,529	$	871	$	12,973
Loans collectively evaluated for impairment	272,256		230,999		310,728		813,983
Total ending balance	$	279,829	$	235,528	$	311,599	$	826,956
June 30, 2013:
Loans individually evaluated for impairment	$	7,732	$	10,716	$	754	$	19,202
Loans collectively evaluated for impairment	262,014		223,999		298,516		784,529
Total ending balance	$	269,746	$	234,715	$	299,270	$	803,731

A loan is considered a troubled debt restructuring (“TDR”) if the Company, for economic or legal reasons related to a debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. Concessions granted under a TDR typically involve a temporary or permanent reduction in the interest rate to less than a current market rate of interest or an extension of a loan’s stated maturity date. Loans classified as TDRs are designated as impaired.

A summary of the Company’s loans classified as TDRs at June 30, 2014 and December 31, 2013 is presented below:

	June 30, 2014		December 31, 2013
	(In thousands)
TDR
Residential Real Estate	$	5,413	$	6,276
Commercial	2,549		2,581
Consumer	310		382
Total TDR	8,272		9,239
Less: TDR in non-accrual status
Residential Real Estate	112		795
Commercial	460		483
Consumer	70		99
Total performing TDR	$	7,630	$	7,862

The Company may grant concessions through a number of different restructuring methods. The following table presents the outstanding principal balance of loans by class and by method of concession that were the subject of a TDR during thesix months ended June 30, 2014 and 2013:

	Residential Real Estate		Commercial		Consumer		Total
	(In thousands)
Six Months Ended June 30, 2014:
Interest rate reduction	$	1,445	$	—	$	21	$	1,466
Loan maturity extension	—		—		—		—
Forbearance	—		—		—		—
Principal reduction	—		—		—		—
Total	$	1,445	$	—	$	21	$	1,466
Six Months Ended June 30, 2013:
Interest rate reduction	$	—	$	—	$	27	$	27
Loan maturity extension	—		—		29		29
Forbearance	—		—		—		—
Principal reduction	—		—		—		—
Total	$	—	$	—	$	56	$	56

The following table presents the number of loans modified and the balances before and after modification for thesix months ended June 30, 2014 and 2013:

	Number of Loans	Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
	(Dollar amounts in thousands)
Six Months Ended June 30, 2014:
Residential Real Estate	1	$	1,445	$	1,445
Commercial	—	—		—
Consumer	1	21		21
Total	2	$	1,466	$	1,466
Six Months Ended June 30, 2013:
Residential Real Estate	—	$	—	$	—
Commercial	—	—		—
Consumer	3	56		56
Total	3	$	56	$	56

Included in the impaired loans as of June 30, 2014 and December 31, 2013 were TDRs of $8.3 million and $9.2 million, respectively. The Company has allocated $66,000 and $72,000 of specific reserves to customers whose loan terms have been modified as TDRs at June 30, 2014 and December 31, 2013, respectively. As of June 30, 2014 and December 31, 2013, no additional funds were committed to be advanced in connection with TDRs.

The Company’s other real estate owned and foreclosed assets represent properties and personal collateral acquired through customer loan defaults. The property is recorded at fair value less the estimated costs to sell at the date acquired. Any difference between the book value and estimated market value is recognized as a charge-off through the allowance for loan losses. Subsequently, should the fair market value of an asset less the estimated cost to sell decline to less than the carrying amount of the asset, the deficiency is recognized in the period in which it becomes known and is included in noninterest expense.

At June 30, 2014 and December 31, 2013, the Company had balances in non-performing assets consisting of the following:

	June 30, 2014			December 31, 2013
	(Dollar amounts in thousands)
Other real estate owned and foreclosed assets
Residential Real Estate	$	715		$	107
Commercial	70			70
Consumer	190			850
Total other real estate owned and foreclosed assets	975			1,027
Total non-accrual loans	3,752			4,344
Total non-performing assets	$	4,727		$	5,371
Non-accrual loans/Total loans	0.48		%	0.53		%
Non-performing assets/Total assets	0.34		%	0.39		%

XML

Derivative Financial Instruments

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivative Financial Instruments

The Company has entered into commitments with prospective residential mortgage borrowers to originate loans whereby the interest rate on the loan is determined prior to funding and the borrowers have locked into that interest rate. The interest rate lock commitments on loans originated for sale are recorded at fair value in accordance with ASC 815, “Derivatives and Hedging,” and are recorded as an other asset or an accrued liability in the consolidated balance sheets. The estimated fair values of the interest rate lock commitments are based on quoted secondary market pricing, include the fair value of the servicing rights based on the discounted present value of expected future cash flows, and assume an approximate closure rate based on recent historical experience. Changes in the fair value of interest rate lock commitments are recorded in current earnings as a component of net gains on sales of loans.

To manage the interest rate risk associated with interest rate lock commitments and mortgage loans held for sale, the Company may enter into forward loan sales commitments to deliver mortgage loan inventory to investors. The estimated fair values of forward loan sales commitments are based on quoted secondary market pricing. The fair values of the forward loan sales commitments are recorded as an other asset or an accrued liability in the consolidated balance sheets. Changes in the fair values of forward loan sales commitments are recorded in current earnings as a component of net gains on sales of loans.

The outstanding notional value and fair values of outstanding positions as of June 30, 2014, and 2013, and December 31, 2013, and the recorded gains and losses during the six months ended June 30, 2014 and 2013, and the year ended December 31, 2013 were as follows:

	Outstanding Notional Balance		Fair Value		Recorded (Losses)/Gains
	(In thousands)
June 30, 2014:
Interest rate lock commitments	$	3,553	$	5	$	(51	)
December 31, 2013:
Interest rate lock commitments	$	3,453	$	56	$	(208	)
June 30, 2013:
Interest rate lock commitments	$	5,025	$	49	$	(215	)

The Company had no forward loan sales commitments at June 30, 2014, December 31, 2013, or June 30, 2013.

XML

Employee Benefit Plans

6 Months Ended

Jun. 30, 2014

Employee Benefits and Share-based Compensation [Abstract]

Employee Benefit Plans

Employee Benefit Plans

Employee Stock Ownership Plan

OmniAmerican Bank adopted an Employee Stock Ownership Plan (“ESOP”) effective January 1, 2010. The ESOP enables all eligible employees of OmniAmerican Bank to share in the growth of the Company through the acquisition of Company common stock. Employees are generally eligible to participate in the ESOP after completion of one year of service and attaining age 21.

The ESOP purchased 8% of the shares sold in the initial public offering of the Company (952,200 shares). This purchase was facilitated by a note payable to the Company from the ESOP in the amount of $9.5 million. The note is secured by a pledge of the ESOP shares. The shares pledged as collateral are reported as unallocated ESOP shares in the accompanying consolidated balance sheets. The corresponding note is to be paid back in 25 approximately equal annual payments of $561,000 on the last day of each fiscal year, beginning December 31, 2010, including interest at an adjustable rate equal to the Wall Street Journal prime rate (3.25% as of June 30, 2014 and December 31, 2013). The note payable and the corresponding note receivable have been eliminated for consolidation purposes.

The Company may make discretionary contributions to the ESOP in the form of debt service. Dividends received on the unallocated ESOP shares, if any, are utilized to service the debt. Shares are released for allocation to plan participants based on principal and interest payments of the note. Compensation expense is recognized based on the number of shares allocated to plan participants each year at the average market price of the stock for the current year. Released ESOP shares become outstanding for earnings per share computations.

As compensation expense is incurred, the unallocated ESOP shares account is reduced based on the original cost of the stock. The difference between the cost and average market price of shares released for allocation is applied to additional paid-in capital.

The ESOP shares as of June 30, 2014 and December 31, 2013 were as follows:

	June 30, 2014		December 31, 2013
Allocated shares	171,396		152,352
Unearned shares	780,804		799,848
Total ESOP shares	952,200		952,200
Fair value of unearned shares (in thousands)	$	19,520	$	17,101
Year-to-date compensation expense recognized from the release of shares from the ESOP (in thousands)	447		893

Pension Plan

The Company has a noncontributory defined benefit pension plan (the “Pension Plan”) that provides for benefits to be paid to eligible employees at retirement based primarily upon years of service with the Company and compensation levels at retirement. Effective December 31, 2006, the Company froze benefits under the Pension Plan, so that no further benefits would be earned by employees after that date. In addition, no new participants may be added to the Pension Plan after December 31, 2006.

The net periodic pension cost for the three and six months ended June 30, 2014 and 2013 includes the following components:

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
Interest cost on projected benefit obligation	$	55		$	57		$	110		$	114
Expected return on assets	(86		)	(74		)	(172		)	(148		)
Amortization of net loss	11			48			22			96
Net periodic pension cost	$	(20	)	$	31		$	(40	)	$	62

Share-Based Compensation

At its annual meeting held May 24, 2011, the Company’s shareholders approved the OmniAmerican Bancorp, Inc. 2011 Equity Incentive Plan (the “Plan”) which provides for the grant of stock-based and other incentive awards to officers, employees, and directors of the Company. The Plan provides the board or a committee thereof with the flexibility to award no less than half the eligible awards, constituting 7% of the shares issued in the Company’s initial public offering, in the form of stock options and up to 7% of the shares issued in the initial public offering in the form of restricted stock. By resolution by the board of directors, the board confirmed that restricted stock awards will not exceed 4% of the common stock sold in the Company’s initial public offering. Pursuant to board resolution, 1,190,250 options to purchase shares of common stock and 476,100 restricted shares of common stock were made available. Share-based compensation expense for the three and six months ended June 30, 2014 and 2013 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Share-based compensation expense	$	616	$	499	$	1,041	$	894

Restricted Stock

Compensation expense for restricted stock is recognized over the vesting period of the awards based on the fair value of the stock at grant date, which is determined using the last sale price as quoted on the NASDAQ Stock Market. Shares awarded to employees vest at a rate of 20% of the initially awarded amount per year, beginning on the first anniversary date of the award, and are contingent upon continuous service by the recipient through the vesting date. Shares awarded to directors vest at rates of 20% to 33% of the initially awarded amount per year, beginning on the first anniversary date of the award, and are contingent upon continuous service by the recipient through the vesting date. Under the terms of the Plan, awarded shares are restricted as to transferability and may not be sold, assigned, or transferred prior to vesting. The vesting period is subject to acceleration of vesting upon the involuntary termination of the award recipient’s service following a change in control of the Company or upon the termination of the award recipient’s service due to death or disability. Total restricted shares issuable pursuant to board resolution were 476,100 at June 30, 2014, of which 392,616 shares had been issued under the Plan through June 30, 2014.

A summary of changes in the Company’s non-vested restricted shares for the six months ended June 30, 2014 follows:

	Shares		Weighted- Average Grant Date Fair Value Per Share
Non-vested at January 1, 2014	179,583		$	19.18
Granted	97,078		21.16
Vested	(29,170	)	(14.59		)
Forfeited	(6,000	)	(21.06		)
Non-vested at June 30, 2014	241,491		$	20.48

As of June 30, 2014, the Company had $3.5 million of unrecognized compensation expense related to non-vested shares of restricted stock awarded under the Plan. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 3.67 years. The Company applied an estimated forfeiture rate of 13.03% to employees’ and 0.00% to directors’ shares based on the historical turnover rates.

Stock Options

Under the terms of the Plan, stock options may not be granted with an exercise price less than the fair market value of the Company’s common stock on the date the option is granted and may not be exercised later than 10 years after the grant date. The fair market value is the last sale price as quoted on the NASDAQ Stock Market on the date of grant. All stock options granted must vest over at least three years and not more than five years, subject to acceleration of vesting upon the involuntary termination of the award recipient’s service following a change in control of the Company or upon the termination of the award recipient’s service due to death or disability.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model. The risk-free interest rate utilized in the model is the implied yield available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the stock option in effect at the time of the grant. Although the contractual term of the stock options granted is 10 years, the expected term of the stock options is less because option restrictions do not permit recipients to sell or hedge their options. Management believes these restrictions encourage exercise of the option before the end of the contractual term. The Company does not have sufficient historical information about its own employees’ vesting behavior; therefore, the expected term of stock options is estimated using the average of the vesting period and contractual term. The expected volatility is based on historical information about the Company's stock volatility and the volatility of peer banks.

The weighted average fair value of each stock option granted during the six months ended June 30, 2014 was $7.03. The fair value of options granted was determined using the following weighted-average assumptions as of grant date:

Risk-free interest rate	2.12	%
Expected term of stock options (years)	7.5
Expected stock price volatility	30.64	%
Expected dividends	0.90	%
Forfeiture rate — for officers and employees	13.03	%
Forfeiture rate — for directors	—	%

A summary of activity in the stock option portion of the Plan for the six months ended June 30, 2014 follows:

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2014	394,933		$	16.13	7.54	$	2,088
Granted	428,788		21.11		9.68	1,668
Exercised	(12,272	)	14.29		—	(108		)
Forfeited	(22,400	)	21.09		—	(88		)
Expired	(2,400	)	22.24		—	(7		)
Outstanding at June 30, 2014	786,649		$	18.71	8.44	$	4,946
Fully vested and expected to vest	683,953		$	18.53	8.34	$	4,425
Exercisable at June 30, 2014	198,117		$	14.99	6.74	$	1,982

As of June 30, 2014, the Company had $3.1 million of total unrecognized compensation expense related to non-vested stock options. That expense is expected to be recognized over a weighted-average period of 4.04 years. The intrinsic value for stock options is calculated based on the difference between the exercise price of the underlying awards and the market price of our common stock as of June 30, 2014.

XML

Fair Value Measurements - Fair value of Impaired loans (Details) (Fair Value, Measurements, Nonrecurring, Fair Value, Level 3 Inputs, USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Fair Value, Measurements, Nonrecurring | Fair Value, Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Carrying value of impaired loans	$ 1,242	$ 1,207
Specific reserve	(503)	(294)
Fair value	$ 739	$ 913

XML

Fair Value Measurements - Other Real Estate Owned Remeasured and Reported at Fair Value (Details) (Foreclosed Assets Remeasured during the period [Member], Fair Value, Level 3 Inputs, USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Foreclosed Assets Remeasured during the period [Member] | Fair Value, Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Carrying value of other real estate owned prior to remeasurement	$ 954	$ 1,631
Less: charge-offs recognized in the allowance for loan losses at initial acquistion	(96)	(18)
Add: fair value adjustments recognized in noninterest income at initial acquisition	0	43
Less: subsequent write-downs included in net loss on write-down of other real estate owned	(22)	(22)
Less: sales of other real estate owned	(228)	(422)
Other Real Estate Owned Remeasured, Fair Value	$ 608	$ 1,212

XML

Fair Value Measurements- Assets and Liabilities Measured on a Recurring basis (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	$ 457,956	$ 430,775
U. S. government sponsored mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	293,577	279,588
U. S. government sponsored mortgage-backed securities | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	293,577	279,588
U. S. government sponsored mortgage-backed securities | Fair Value, Measurements, Recurring | Fair Value, Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	0	0
U. S. government sponsored mortgage-backed securities | Fair Value, Measurements, Recurring | Fair Value, Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	293,577	279,588
U. S. government sponsored mortgage-backed securities | Fair Value, Measurements, Recurring | Fair Value, Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	0	0
U. S. government sponsored collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	153,449	140,576
U. S. government sponsored collateralized mortgage obligations | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	153,449	140,576
U. S. government sponsored collateralized mortgage obligations | Fair Value, Measurements, Recurring | Fair Value, Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	0	0
U. S. government sponsored collateralized mortgage obligations | Fair Value, Measurements, Recurring | Fair Value, Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	153,449	140,576
U. S. government sponsored collateralized mortgage obligations | Fair Value, Measurements, Recurring | Fair Value, Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	0	0
Agency Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	4,738	4,538
Agency Bonds | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	4,738	4,538
Agency Bonds | Fair Value, Measurements, Recurring | Fair Value, Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	0	0
Agency Bonds | Fair Value, Measurements, Recurring | Fair Value, Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	4,738	4,538
Agency Bonds | Fair Value, Measurements, Recurring | Fair Value, Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	0	0
Municipal obligations | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	176	170
Municipal obligations | Fair Value, Measurements, Recurring | Fair Value, Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	0	0
Municipal obligations | Fair Value, Measurements, Recurring | Fair Value, Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	176	170
Municipal obligations | Fair Value, Measurements, Recurring | Fair Value, Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	0	0
Other equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	6,016	5,903
Other equity securities | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	6,016	5,903
Other equity securities | Fair Value, Measurements, Recurring | Fair Value, Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	0	0
Other equity securities | Fair Value, Measurements, Recurring | Fair Value, Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	6,016	5,903
Other equity securities | Fair Value, Measurements, Recurring | Fair Value, Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available-for-sale Securities	0	0
Interest rate lock commitments | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Interest Rate Lock Commitment Assets	5	56
Interest rate lock commitments | Fair Value, Measurements, Recurring | Fair Value, Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Interest Rate Lock Commitment Assets	0	0
Interest rate lock commitments | Fair Value, Measurements, Recurring | Fair Value, Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Interest Rate Lock Commitment Assets	0	0
Interest rate lock commitments | Fair Value, Measurements, Recurring | Fair Value, Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Interest Rate Lock Commitment Assets	$ 5	$ 56

XML

Loans and Allowance for Loan Losses - Loan Composition (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013
Residential Real Estate Loans:
One- to four-family	$ 269,233	$ 262,723
Home equity	15,937	17,106
Total residential real estate loans	285,170	279,829	269,746
Commercial Loans:
Commercial real estate	113,229	106,560
Real estate construction	59,886	59,648
Commercial business	78,381	69,320
Total commercial loans	251,496	235,528	234,715
Consumer Loans:
Automobile, indirect	204,468	264,671
Automobile, direct	31,628	31,598
Other consumer	15,028	15,330
Total consumer loans	251,124	311,599	299,270
Total loans	787,790	826,956	803,731
Plus (less):
Deferred fees and discounts	2,674	4,370
Allowance for loan losses	(6,388)	(6,445)
Loans, net	$ 784,076	$ 824,881

XML

Repurchase agreements (Details) (Repurchase Agreements, USD $)	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Repurchase Agreements
Other borrowings
Debt Instrument Maturity Date (years)	5 years
Securities Sold under Agreements to Repurchase	$ 2,000,000	$ 2,000,000
Securities Pledged as Collateral	$ 2,600,000	$ 2,200,000

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements of OmniAmerican Bancorp, Inc. (referred to herein as “the Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These interim consolidated financial statements and notes should be read in conjunction with the Company’s consolidated financial statements, and notes thereto, for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2014. In management’s opinion, the interim data as of June 30, 2014 and for the three- and six-month periods ended June 30, 2014 and 2013, includes all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. References to the Company include, where appropriate, OmniAmerican Bank, the Company’s wholly-owned subsidiary.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for loan losses and the fair values of financial instruments are particularly subject to change.

XML

Earnings Per Share - (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(Dollars in thousands, except per share data)
Earnings:
Net income	$	898		$	674		$	2,427		$	2,607
Distributed and undistributed earnings to participating securities	(22		)	—			(54		)	—
Income available to common shareholders	876			674			2,373			2,607
Basic shares:
Weighted-average common shares outstanding	11,549,939			11,446,129			11,518,158			11,445,175
Less: Average unallocated ESOP shares	(785,565		)	(822,066		)	(788,739		)	(826,827		)
Average unvested restricted stock awards	(267,967		)	(247,374		)	(240,108		)	(250,489		)
Average shares for basic earnings per share	10,496,407			10,376,689			10,489,311			10,367,859
Net income per common share, basic	$	0.08		$	0.06		$	0.23		$	0.25
Diluted shares:
Weighted-average common shares outstanding for basic earnings per common share	10,496,407			10,376,689			10,489,311			10,367,859
Add: Dilutive effects of share-based compensation plan	82,891			148,869			73,631			157,534
Average shares for diluted earnings per share	10,579,298			10,525,558			10,562,942			10,525,393
Net income per common share, diluted	$	0.08		$	0.06		$	0.22		$	0.25

XML

Loans and Allowance for Loan Losses - Non-performing assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Nonperforming assets
Total other real estate owned and foreclosed assets	$ 975	$ 1,027
Non-Accrual loans	3,752	4,344
Nonperforming Assets	4,727	5,371
Non-accrual loans/Total loans	0.48%	0.53%
Non-performing assets/Total assets	0.34%	0.39%
Residential Real Estate
Nonperforming assets
Other real estate owned	715	107
Commercial
Nonperforming assets
Other real estate owned	70	70
Consumer
Nonperforming assets
Foreclosed assets	$ 190	$ 850

XML

Loans and Allowance for Loan Losses - Residential real estate loans collectively evaluated for impairment (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013
Real Estate credit risk
One- to four-family	$ 269,233	$ 262,723
Home equity	15,937	17,106
Total residential real estate loans	285,170	279,829	269,746
Collectively evaluated for impairment
Real Estate credit risk
One- to four-family	249,819	244,034
Home equity	15,937	17,106
Total residential real estate loans	265,756	261,140
Prime | Collectively evaluated for impairment
Real Estate credit risk
One- to four-family	194,841	195,919
Home equity	15,432	16,521
Total residential real estate loans	210,273	212,440
Subprime | Collectively evaluated for impairment
Real Estate credit risk
One- to four-family	54,978	48,115
Home equity	505	585
Total residential real estate loans	$ 55,483	$ 48,700

XML

Consolidated Statements of Income (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]
Reclassifications from unrealized gains (losses) on available for sale securities in accumulated other comprehensive income	$ 348	$ 0	$ 607	$ 1,701
Income tax expense from items reclassified from accumulated other comprehensive income	$ 118	$ 0	$ 206	$ 578

XML

Basis of Financial Statement Presentation and Significant Accounting Policies

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Basis of Financial Statement Presentation and Significant Accounting Policies

Basis of Financial Statement Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of OmniAmerican Bancorp, Inc. (referred to herein as “the Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These interim consolidated financial statements and notes should be read in conjunction with the Company’s consolidated financial statements, and notes thereto, for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2014. In management’s opinion, the interim data as of June 30, 2014 and for the three- and six-month periods ended June 30, 2014 and 2013, includes all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the results of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. References to the Company include, where appropriate, OmniAmerican Bank, the Company’s wholly-owned subsidiary.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for loan losses and the fair values of financial instruments are particularly subject to change.

XML

Employee Benefit Plans - Stock Option Narrative (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Share-based Compensation
Minimum vesting period	3 years
Maximum vesting period	5 years
Weighted average fair value of each stock option granted	$ 7.03
Stock Options
Share-based Compensation
Contractual Term in years for stock options	10 years
Unrecognized compensation expense related to non-vested shares of stock options	$ 3.1
Weighted-average period which expense is expected to be recognized	4 years 0 months 16 days

XML

Business Combination (Details) (USD $)	6 Months Ended
	Jun. 30, 2014
Business Combinations [Abstract]
Date of Agreement and Plan of Merger with Southside Bancshares, Inc.	Apr. 28, 2014
Amount of Southside's common stock traded for each outstanding share of OmniAmerican common stock	$ 0.4459
Cash traded for each outstanding share of OmniAmerican common stock	$ 13.125

XML

Fair Value Measurements - (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured on a Recurring Basis

	Fair Value Measurements at June 30, 2014, Using						Total Fair Value at June 30, 2014
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(In thousands)
Measured on a recurring basis:
Assets:
Investment securities available for sale:
U.S. government sponsored mortgage-backed securities	$	—	$	293,577	$	—	$	293,577
U.S. government sponsored collateralized mortgage obligations	—		153,449		—		153,449
U.S. government agency securities	—		4,738		—		4,738
Municipal obligations	—		176		—		176
Other equity securities	—		6,016		—		6,016
Interest rate lock commitments	—		—		5		5

	Fair Value Measurements at December 31, 2013 Using						Total Fair Value at December 31, 2013
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
	(In thousands)
Measured on a recurring basis:
Assets:
Investment securities available for sale:
U.S. government sponsored mortgage-backed securities	$	—	$	279,588	$	—	$	279,588
U.S. government sponsored collateralized mortgage obligations	—		140,576		—		140,576
U.S. government agency securities	—		4,538		—		4,538
Municipal obligations	—		170		—		170
Other equity securities	—		5,903		—		5,903
Interest rate lock commitments	—		—		56		56

Fair value of impaired loans

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Carrying value of impaired loans	$	1,242		$	1,207
Specific reserve	(503		)	(294		)
Fair Value	$	739		$	913

Foreclosed Assets Remeasured and Reported at Fair Value

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Carrying value of other real estate owned prior to remeasurement	$	954		$	1,631
Less: charge-offs recognized in the allowance for loan losses at initial acquisition	(96		)	(18		)
Add: fair value adjustments recognized in noninterest income at initial acquisition	—			43
Less: subsequent write-downs included in net loss on write-down of other real estate owned	(22		)	(22		)
Less: sales of other real estate owned	(228		)	(422		)
Carrying value of remeasured other real estate owned at end of period	$	608		$	1,212

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value (In thousands)		Valuation Techniques	Unobservable Input	Range  (Average)
June 30, 2014:
Impaired loans, net of allowance	$	484	Discounted Cash Flow Analysis	Interest rate	1.5% - 7.0% (3.9%)
				Loan term (in months)	60 - 120 (95)
	$	255	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	0% - 6.0% (5.4%)
				Estimated property maintenance	0% - 3.6% (3.3%)
Mortgage servicing rights	$	1,552	Discounted Cash Flow Analysis	Interest rate	2.6% - 7.9% (4.3%)
				Loan term (in months)	111 - 527 (312)
Other real estate owned	$	785	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	0% - 8.0% (6.7%)
				Estimated property maintenance	0% (0%)
December 31, 2013:
Impaired loans, net of allowance	$	840	Discounted Cash Flow Analysis	Interest rate	1.5% - 7.0% (4.9%)
				Loan term (in months)	60 - 120 (91)
	$	230	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	6.0% (6.0%)
				Estimated property maintenance	3.6% (3.6%)
Mortgage servicing rights	$	1,473	Discounted Cash Flow Analysis	Interest rate	2.6% - 7.9% (4.3%)
				Loan term (in months)	82 - 527 (312)
Other real estate owned	$	177	Third-Party Appraisal	Discount of market value	0% (0%)
				Estimated marketing costs	0.0% - 6.0% (2.4%)
				Estimated property maintenance	0% (0%)

Fair Value of Financial Instruments

The carrying amount and estimated fair value of the Company’s financial instruments at June 30, 2014 and December 31, 2013 are summarized as follows:

	June 30, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets:
Level 1 inputs:
Cash and cash equivalents	$	21,210	$	21,210	$	15,880	$	15,880
Level 2 inputs:
Securities available for sale	457,956		457,956		430,775		430,775
Other investments	17,106		17,106		19,782		19,782
Loans held for sale	876		882		1,509		1,522
Accrued interest receivable	3,259		3,259		3,447		3,447
Level 3 inputs:
Loans, net	784,076		793,853		824,881		840,478
Mortgage servicing rights	1,552		1,552		1,473		1,473
Interest rate lock commitments	5		5		56		56
Financial liabilities:
Level 2 inputs:
Federal Home Loan Bank advances	$	328,667	$	327,125	$	362,000	$	360,576
Accrued interest payable	337		337		389		389
Level 3 inputs:
Deposits	822,008		832,456		813,574		824,856
Repurchase agreements	2,000		2,026		2,000		2,049
Off-balance sheet financial instruments:
Loan commitments	$	—	$	—	$	—	$	—
Letters of credit	—		—		—		—

XML

Loans and Allowance for Loan Losses - Nonaccrual Loans (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Loans
Non-Accrual loans	$ 3,752	$ 4,344
Loans past due greater than 90 days and still accruing interest	0	0
One- to four-family
Loans
Non-Accrual loans	1,716	2,050
Home Equity Loans and Lines of Credit
Loans
Non-Accrual loans	34	42
Commercial real estate
Loans
Non-Accrual loans	758	800
Real estate construction
Loans
Non-Accrual loans	0	0
Commercial business
Loans
Non-Accrual loans	654	864
Automobile, indirect
Loans
Non-Accrual loans	557	558
Automobile, direct
Loans
Non-Accrual loans	23	15
Other consumer
Loans
Non-Accrual loans	$ 10	$ 15

XML

Commitments and Contingencies (Notes)

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

On June 25, 2014, a purported stockholder of OmniAmerican filed a lawsuit in the Circuit Court for Baltimore City, Maryland captioned McDougal v. OmniAmerican Bancorp, Inc., et al., Case No. 24-C-14-003920, naming OmniAmerican, members of OmniAmerican’s board of directors, Southside and Merger Sub as defendants. The lawsuit is purportedly brought on behalf of a putative class of OmniAmerican’s public stockholders and seeks a declaration that it is properly maintainable as a class action and a certification of the plaintiff and her counsel as class representative and class counsel. The lawsuit asserts direct and derivative claims against OmniAmerican’s directors and alleges that they breached their fiduciary duties and that OmniAmerican, Southside and Merger Sub aided and abetted those alleged breaches by, among other things, (a) failing to take steps to maximize shareholder value for OmniAmerican public stockholders; (b) failing to properly value OmniAmerican; (c) failing to protect against conflicts of interest; (d) failing to disclose material information necessary for OmniAmerican stockholders to make an informed vote on the First Merger; and (e) agreeing to deal protection devices that preclude a fair sales process. Among other relief, the plaintiff seeks to enjoin the mergers. On July 9, 2014, the plaintiff filed a motion to transfer the case to Maryland's Business and Technology Case Management Program.

OmniAmerican and Southside believe the claims asserted are without merit and intend to vigorously defend against this lawsuit.