##### Table of Contents



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 March 31, 2011
 o
    
    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 001-34657
 TEXAS CAPITAL BANCSHARES, INC.
  Delaware
(State or other jurisdiction of incorporation or organization)
    
    75-2679109
(I.R.S. Employer Identification Number)2000 McKinney Avenue, Suite 700, Dallas, Texas, U.S.A.
(Address of principal executive officers)
    
    75201
(Zip Code)
 214/932-6600
 N/A
 þ o
 o o
  Large Accelerated Filer o
    
    Accelerated Filer þ
    

Non-Accelerated Filer o
    

Non-Accelerated
Filer o(Do not check if a smaller reporting company)
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##### 



Part I. Financial InformationItem 1. Financial Statements
    
    
    3Consolidated Statements of Income  Unaudited
    
    
    3Consolidated Balance Sheets  Unaudited
    
    
    4Consolidated Statements of Stockholders Equity  Unaudited
    
    
    5Consolidated Statements of Cash Flows  Unaudited
    
    
    6Notes to Consolidated Financial Statements  Unaudited
    
    
    7Financial Summaries  Unaudited
    
    
    21Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    34Item 4. Controls and Procedures
    
    
    37Part II. Other InformationItem 1A. Risk Factors
    
    
    37Item 5. Exhibits
    
    
    38Signatures
    
    
    39EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 TEXAS CAPITAL BANCSHARES, INC.
 
 CONSOLIDATED STATEMENTS OF INCOME  UNAUDITED
 Three months ended March 31,2011
    
    
    2010Interest incomeInterest and fees on loans
    
    $
    68,040
    
    
    $
    61,569Securities
    
    
    1,846
    
    
    
    2,726Federal funds sold
    
    
    28
    
    
    
    9Deposits in other banks
    
    
    197
    
    
    
    2Total interest income
    
    
    70,111
    
    
    
    64,306Interest expenseDeposits
    
    
    4,871
    
    
    
    7,758Federal funds purchased
    
    
    107
    
    
    
    365Repurchase agreements
    
    
    2
    
    
    
    4Other borrowings
    
    
    
    
    
    
    47Trust preferred subordinated debentures
    
    
    633
    
    
    
    904Total interest expense
    
    
    5,613
    
    
    
    9,078Net interest income
    
    
    64,498
    
    
    
    55,228Provision for credit losses
    
    
    7,500
    
    
    
    13,500Net interest income after provision for credit losses
    
    
    56,998
    
    
    
    41,728Non-interest incomeService charges on deposit accounts
    
    
    1,783
    
    
    
    1,483Trust fee income
    
    
    954
    
    
    
    954Bank owned life insurance (BOLI) income
    
    
    523
    
    
    
    471Brokered loan fees
    
    
    2,520
    
    
    
    1,904Equipment rental income
    
    
    783
    
    
    
    1,344Other
    
    
    1,121
    
    
    
    792Total non-interest income
    
    
    7,684
    
    
    
    6,948Non-interest expenseSalaries and employee benefits
    
    
    24,172
    
    
    
    20,069Net occupancy expense
    
    
    3,310
    
    
    
    3,014Leased equipment depreciation
    
    
    556
    
    
    
    1,059Marketing
    
    
    2,123
    
    
    
    787Legal and professional
    
    
    2,723
    
    
    
    1,950Communications and technology
    
    
    2,347
    
    
    
    1,926FDIC insurance assessment
    
    
    2,511
    
    
    
    1,868Allowance and other carrying costs for OREO
    
    
    4,030
    
    
    
    2,292Other
    
    
    4,627
    
    
    
    4,221Total non-interest expense
    
    
    46,399
    
    
    
    37,186Income from continuing operations before income taxes
    
    
    18,283
    
    
    
    11,490Income tax expense
    
    
    6,344
    
    
    
    3,890Income from continuing operations
    
    
    11,939
    
    
    
    7,600Loss from discontinued operations (after-tax)
    
    
    (60
    )
    
    
    (55
    )Net income
    
    $
    11,879
    
    
    $
    7,545Basic earnings per common shareIncome from continuing operations
    
    $
    0.32
    
    
    $
    0.21Net income
    
    $
    0.32
    
    
    $
    0.21Diluted earnings per common shareIncome from continuing operations
    
    $
    0.31
    
    
    $
    0.21Net income
    
    $
    0.31
    
    
    $
    0.21
  3




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##### Table of Contents



TEXAS CAPITAL BANCSHARES, INC.
 
 CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2011
    
    
    2010(Unaudited)AssetsCash and due from banks
    
    $
    213,480
    
    
    $
    104,866Federal funds sold
    
    
    10,240
    
    
    
    75,000Securities, available-for-sale
    
    
    171,990
    
    
    
    185,424Loans held for sale
    
    
    811,400
    
    
    
    1,194,209Loans held for sale from discontinued operations
    
    
    488
    
    
    
    490Loans held for investment (net of unearned income)
    
    
    4,711,424
    
    
    
    4,711,330Less: Allowance for loan losses
    
    
    70,248
    
    
    
    71,510Loans held for investment, net
    
    
    4,641,176
    
    
    
    4,639,820Premises and equipment, net
    
    
    11,652
    
    
    
    11,568Accrued interest receivable and other assets
    
    
    191,706
    
    
    
    225,309Goodwill and intangible assets, net
    
    
    9,402
    
    
    
    9,483Total assets
    
    $
    6,061,534
    
    
    $
    6,446,169Liabilities and Stockholders EquityLiabilities:Deposits:Non-interest bearing
    
    $
    1,480,695
    
    
    $
    1,451,307Interest bearing
    
    
    3,429,358
    
    
    
    3,545,146Interest bearing in foreign branches
    
    
    311,938
    
    
    
    458,948Total deposits
    
    
    5,221,991
    
    
    
    5,455,401Accrued interest payable
    
    
    1,662
    
    
    
    2,579Other liabilities
    
    
    45,555
    
    
    
    48,577Federal funds purchased
    
    
    115,870
    
    
    
    283,781Repurchase agreements
    
    
    14,716
    
    
    
    10,920Other borrowings
    
    
    3,409
    
    
    
    3,186Trust preferred subordinated debentures
    
    
    113,406
    
    
    
    113,406Total liabilities
    
    
    5,516,609
    
    
    
    5,917,850Stockholders equity:Preferred stock, $.01 par value, $1,000 liquidation valueAuthorized shares  10,000,000Issued shares
    
    
    
    
    
    
    Common stock, $.01 par value:Authorized shares  100,000,000Issued shares 37,217,346 and 36,957,104 at March 31, 2011 and
December 31, 2010)
    
    
    372
    
    
    
    369Additional paid-in capital
    
    
    341,680
    
    
    
    336,796Retained earnings
    
    
    197,686
    
    
    
    185,807Treasury stock (shares at cost: 417 at March 31, 2011 and
December 31, 2010)
    
    
    (8
    )
    
    
    (8
    )Accumulated other comprehensive income, net of taxes
    
    
    5,195
    
    
    
    5,355Total stockholders equity
    
    
    544,925
    
    
    
    528,319Total liabilities and stockholders equity
    
    $
    6,061,534
    
    
    $
    6,446,169
  4




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##### Table of Contents



TEXAS
CAPITAL BANCSHARES, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 AccumulatedOtherAdditional
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ComprehensivePreferred Stock
    
    
    Common Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Treasury Stock
    
    
    Income, Net ofShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Shares
    
    
    Amount
    
    
    Taxes
    
    
    TotalBalance at December 31, 2009
    
    
    
    
    
    $
    
    
    
    
    35,919,941
    
    
    $
    359
    
    
    $
    326,224
    
    
    $
    148,620
    
    
    
    (417
    )
    
    $
    (8
    )
    
    $
    6,165
    
    
    $
    481,360Comprehensive income:Net income (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,545
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,545Change in unrealized gain on available-for-sale securities,
net of taxes of $100 (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    185
    
    
    
    185Total comprehensive income (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,730Tax expense related to exercise of stock options (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115Stock-based compensation expense recognized in earnings (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,572
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,572Issuance of stock related to stock-based awards (unaudited)
    
    
    
    
    
    
    
    
    
    
    57,068
    
    
    
    1
    
    
    
    305
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    306Issuance of common stock (unaudited)
    
    
    
    
    
    
    
    
    
    
    547,721
    
    
    
    5
    
    
    
    8,908
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,913Balance at March 31, 2010 (unaudited)
    
    
    
    
    
    $
    
    
    
    
    36,524,730
    
    
    $
    365
    
    
    $
    337,124
    
    
    $
    156,165
    
    
    
    (417
    )
    
    $
    (8
    )
    
    $
    6,350
    
    
    $
    499,996Balance at December 31, 2010
    
    
    
    
    
    $
    
    
    
    
    36,957,104
    
    
    $
    369
    
    
    $
    336,796
    
    
    $
    185,807
    
    
    
    (417
    )
    
    $
    (8
    )
    
    $
    5,355
    
    
    $
    528,319Comprehensive income:Net income (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,879
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,879Change in unrealized gain on available-for-sale securities,
net of taxes of $86 (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (160
    )
    
    
    (160
    )Total comprehensive income (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,719Tax expense related to exercise of stock options (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,160
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,160Stock-based compensation expense recognized in earnings (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,134
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,134Issuance of stock related to stock-based awards (unaudited)
    
    
    
    
    
    
    
    
    
    
    260,242
    
    
    
    3
    
    
    
    1,590
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,593Balance at March 31, 2011 (unaudited)
    
    
    
    
    
    $
    
    
    
    
    37,217,346
    
    
    $
    372
    
    
    $
    341,680
    
    
    $
    197,686
    
    
    
    (417
    )
    
    $
    (8
    )
    
    $
    5,195
    
    
    $
    544,925
  5




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##### Table of Contents



TEXAS
CAPITAL BANCSHARES, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS  UNAUDITED
 Three months ended March 31,2011
    
    
    2010Operating activitiesNet income from continuing operations
    
    $
    11,939
    
    
    $
    7,600Adjustments to reconcile net income to net cash provided by operating
activities:Provision for credit losses
    
    
    7,500
    
    
    
    13,500Depreciation and amortization
    
    
    1,469
    
    
    
    1,905Amortization and accretion on securities
    
    
    25
    
    
    
    39Bank owned life insurance (BOLI) income
    
    
    (523
    )
    
    
    (471
    )Stock-based compensation expense
    
    
    2,134
    
    
    
    1,572Tax benefit from stock option exercises
    
    
    1,160
    
    
    
    115Excess tax benefits from stock-based compensation arrangements
    
    
    (3,313
    )
    
    
    (329
    )Originations of loans held for sale
    
    
    (4,725,151
    )
    
    
    (3,204,634
    )Proceeds from sales of loans held for sale
    
    
    5,107,959
    
    
    
    3,305,702Loss on sale of assets
    
    
    (63
    )
    
    
    44Changes in operating assets and liabilities:Accrued interest receivable and other assets
    
    
    20,136
    
    
    
    13,008Accrued interest payable and other liabilities
    
    
    (3,852
    )
    
    
    (1,584
    )Net cash provided by operating activities of continuing operations
    
    
    419,420
    
    
    
    136,467Net cash (used in) operating activities of discontinued operations
    
    
    (58
    )
    
    
    (53
    )Net cash provided by operating activities
    
    
    419,362
    
    
    
    136,414Investing activitiesMaturities and calls of available-for-sale securities
    
    
    1,610
    
    
    
    1,515Principal payments received on available-for-sale securities
    
    
    11,552
    
    
    
    18,650Net (increase) decrease in loans held for investment
    
    
    (8,855
    )
    
    
    3,126Purchase of premises and equipment, net
    
    
    (916
    )
    
    
    (422
    )Proceeds from sale of foreclosed assets
    
    
    13,497
    
    
    
    601Net cash provided by investing activities of continuing operations
    
    
    16,888
    
    
    
    23,470Financing activitiesNet increase (decrease) in deposits
    
    
    (233,410
    )
    
    
    289,094Proceeds from issuance of stock related to stock-based awards
    
    
    1,593
    
    
    
    306Proceeds from issuance of common stock
    
    
    
    
    
    
    8,913Net increase (decrease) in other borrowings
    
    
    4,019
    
    
    
    (350,388
    )Excess tax benefits from stock-based compensation arrangements
    
    
    3,313
    
    
    
    329Net (decrease) in federal funds purchased
    
    
    (167,911
    )
    
    
    (154,580
    )Net cash (used in) financing activities of continuing operations
    
    
    (392,396
    )
    
    
    (206,326
    )Net increase (decrease) in cash and cash equivalents
    
    
    43,854
    
    
    
    (46,442
    )Cash and cash equivalents at beginning of period
    
    
    179,866
    
    
    
    125,439Cash and cash equivalents at end of period
    
    $
    223,720
    
    
    $
    78,997Supplemental disclosures of cash flow information:Cash paid during the period for interest
    
    $
    5,989
    
    
    $
    9,508Cash paid during the period for income taxes
    
    
    173
    
    
    
    299Non-cash transactions:Transfers from loans/leases to OREO and other repossessed assets
    
    
    926
    
    
    
    4,151
  6




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##### Table of Contents



TEXAS CAPITAL BANCSHARES, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  UNAUDITED
 (1) OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Nature of Operations
  Basis of Presentation
   Use of Estimates
  Accumulated Other Comprehensive Income, Net
  Fair Values of Financial Instruments
  7




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##### Table of Contents



(2) EARNINGS PER COMMON SHARE
  Three months ended March 31,2011
    
    
    2010Numerator:Net income from continuing operations
    
    $
    11,939
    
    
    $
    7,600Loss from discontinued operations
    
    
    (60
    )
    
    
    (55
    )Net income
    
    $
    11,879
    
    
    $
    7,545Denominator:Denominator for basic earnings per share  weighted average shares
    
    
    37,090,882
    
    
    
    36,191,373Effect of employee stock options(1)
    
    
    957,779
    
    
    
    509,935Effect of warrants to purchase common stock
    
    
    293,018
    
    
    
    82,411Denominator for dilutive earnings per share  adjusted weighted average
shares and assumed conversions
    
    
    38,341,679
    
    
    
    36,783,719Basic earnings per common share from continuing operations
    
    $
    0.32
    
    
    $
    0.21Basic earnings per common share from discontinued operations
    
    
    
    
    
    
    Basic earnings per common share
    
    $
    0.32
    
    
    $
    0.21Diluted earnings per share from continuing operations
    
    $
    0.31
    
    
    $
    0.21Diluted earnings per share from discontinued operations
    
    
    
    
    
    
    Diluted earnings per common share
    
    $
    0.31
    
    
    $
    0.21
 
 (1)
    
    Stock options, SARs and RSUs outstanding of 116,000 at March 31, 2011 and 1,601,380 at
March 31, 2010 have not been included in diluted earnings per share because to do so would
have been anti-dilutive for the periods presented. (3) SECURITIES
   8




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##### Table of Contents



March 31, 2011Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueAvailable-for-Sale Securities:Residential mortgage-backed securities
    
    $
    115,270
    
    
    $
    6,665
    
    
    $
    (22
    )
    
    $
    121,913Corporate securities
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000Municipals
    
    
    36,221
    
    
    
    1,305
    
    
    
    
    
    
    
    37,526Equity securities(1)
    
    
    7,506
    
    
    
    45
    
    
    
    
    
    
    
    7,551$
    163,997
    
    
    $
    8,015
    
    
    $
    (22
    )
    
    $
    171,990
 December 31, 2010Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueAvailable-for-Sale Securities:Residential mortgage-backed securities
    
    $
    126,838
    
    
    $
    6,891
    
    
    $
    (5
    )
    
    $
    133,724Corporate securities
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000Municipals
    
    
    37,841
    
    
    
    1,244
    
    
    
    
    
    
    
    39,085Equity securities(1)
    
    
    7,506
    
    
    
    109
    
    
    
    
    
    
    
    7,615$
    177,185
    
    
    $
    8,244
    
    
    $
    (5
    )
    
    $
    185,424
 
 (1)
    
    Equity securities consist of Community Reinvestment Act funds.  March 31, 2011After One
    
    
    After FiveLess Than
    
    
    Through
    
    
    Through
    
    
    After TenOne Year
    
    
    Five Years
    
    
    Ten Years
    
    
    Years
    
    
    TotalAvailable-for-sale:Residential mortgage-backed
securities:(1)Amortized cost
    
    $
    6,968
    
    
    $
    10,717
    
    
    $
    45,832
    
    
    $
    51,753
    
    
    $
    115,270Estimated fair value
    
    
    6,996
    
    
    
    11,070
    
    
    
    48,802
    
    
    
    55,045
    
    
    
    121,913Weighted average yield(3)
    
    
    4.502
    %
    
    
    4.351
    %
    
    
    4.814
    %
    
    
    4.021
    %
    
    
    4.396
    %Corporate securities:Amortized cost
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000Estimated fair value
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000Weighted average yield(3)
    
    
    
    
    
    
    7.375
    %
    
    
    
    
    
    
    
    
    
    
    7.375
    %Municipals:(2)Amortized cost
    
    
    2,751
    
    
    
    24,702
    
    
    
    8,768
    
    
    
    
    
    
    
    36,221Estimated fair value
    
    
    2,789
    
    
    
    25,710
    
    
    
    9,027
    
    
    
    
    
    
    
    37,526Weighted average yield(3)
    
    
    5.082
    %
    
    
    5.476
    %
    
    
    5.836
    %
    
    
    
    
    
    
    5.506
    %Equity securities:Amortized cost
    
    
    7,506
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,506Estimated fair value
    
    
    7,551
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,551Total available-for-sale securities:Amortized cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    163,997Estimated fair value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    171,990
 
 (1)
    
    Actual maturities may differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without prepayment penalties.(2)
    
    Yields have been adjusted to a tax equivalent basis assuming a 35% federal tax rate.(3)
    
    Yields are calculated based on amortized cost. 9




---



##### Table of Contents



Less Than 12 Months
    
    
    12 Months or Longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossMortgage-backed
securities
    
    $
    3,180
    
    
    $
    (22
    )
    
    $
    
    
    
    $
    
    
    
    $
    3,180
    
    
    $
    (22
    )Corporate securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Municipals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,180
    
    
    $
    (22
    )
    
    $
    
    
    
    $
    
    
    
    $
    3,180
    
    
    $
    (22
    )
  Less Than 12 Months
    
    
    12 Months or Longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossMortgage-backed
securities
    
    $
    3,681
    
    
    $
    (5
    )
    
    $
    
    
    
    $
    
    
    
    $
    3,681
    
    
    $
    (5
    )Corporate securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Municipals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,681
    
    
    $
    (5
    )
    
    
    
    
    
    $
    
    
    
    $
    3,681
    
    
    $
    (5
    )
  (4) LOANS AND ALLOWANCE FOR LOAN LOSSES
  March 31,
    
    
    December 31,2011
    
    
    2010Commercial
    
    $
    2,541,784
    
    
    $
    2,592,924Construction
    
    
    349,442
    
    
    
    270,008Real estate
    
    
    1,746,100
    
    
    
    1,759,758Consumer
    
    
    21,590
    
    
    
    21,470Leases
    
    
    80,694
    
    
    
    95,607Gross loans held for investment
    
    
    4,739,610
    
    
    
    4,739,767Deferred income (net of direct origination costs)
    
    
    (28,186
    )
    
    
    (28,437
    )Allowance for loan losses
    
    
    (70,248
    )
    
    
    (71,510
    )Total loans held for investment, net
    
    
    4,641,176
    
    
    
    4,639,820Loans held for sale
    
    
    811,400
    
    
    
    1,194,209Total
    
    $
    5,452,576
    
    
    $
    5,834,029
  10




---



##### Table of Contents



11




---



##### Table of Contents



Commercial
    
    
    Construction
    
    
    Real Estate
    
    
    Consumer
    
    
    Leases
    
    
    TotalGrade:Pass
    
    $
    2,414,750
    
    
    $
    316,077
    
    
    $
    1,563,548
    
    
    $
    20,703
    
    
    $
    63,879
    
    
    $
    4,378,957Special mention
    
    
    59,076
    
    
    
    24,286
    
    
    
    46,974
    
    
    
    139
    
    
    
    5,946
    
    
    
    136,421Substandard-accruing
    
    
    24,965
    
    
    
    6,439
    
    
    
    69,403
    
    
    
    80
    
    
    
    6,866
    
    
    
    107,753Non-accrual
    
    
    42,993
    
    
    
    2,640
    
    
    
    66,174
    
    
    
    669
    
    
    
    4,003
    
    
    
    116,479Total loans held for
investment
    
    $
    2,541,784
    
    
    $
    349,442
    
    
    $
    1,746,099
    
    
    $
    21,591
    
    
    $
    80,694
    
    
    $
    4,739,610
  Commercial
    
    
    Construction
    
    
    Real Estate
    
    
    Consumer
    
    
    Leases
    
    
    TotalGrade:Pass
    
    $
    2,461,769
    
    
    $
    243,843
    
    
    $
    1,549,400
    
    
    $
    20,312
    
    
    $
    78,715
    
    
    $
    4,354,039Special mention
    
    
    45,754
    
    
    
    19,856
    
    
    
    59,294
    
    
    
    76
    
    
    
    1,552
    
    
    
    126,532Substandard-accruing
    
    
    42,858
    
    
    
    6,288
    
    
    
    88,567
    
    
    
    376
    
    
    
    9,017
    
    
    
    147,106Non-accrual
    
    
    42,543
    
    
    
    21
    
    
    
    62,497
    
    
    
    706
    
    
    
    6,323
    
    
    
    112,090Total loans held for
investment
    
    $
    2,592,924
    
    
    $
    270,008
    
    
    $
    1,759,758
    
    
    $
    21,470
    
    
    $
    95,607
    
    
    $
    4,739,767
  (in thousands)
    
    Commercial
    
    
    Construction
    
    
    Real Estate
    
    
    Consumer
    
    
    Leases
    
    
    Unallocated
    
    
    TotalBeginning balance
    
    $
    15,918
    
    
    $
    7,336
    
    
    $
    38,049
    
    
    $
    306
    
    
    $
    5,405
    
    
    $
    4,496
    
    
    $
    71,510Provision for possible loan losses
    
    
    99
    
    
    
    (757
    )
    
    
    6,594
    
    
    
    (42
    )
    
    
    (936
    )
    
    
    2,732
    
    
    
    7,690Charge-offs
    
    
    1,993
    
    
    
    
    
    
    
    7,364
    
    
    
    34
    
    
    
    532
    
    
    
    
    
    
    
    9,923Recoveries
    
    
    546
    
    
    
    243
    
    
    
    31
    
    
    
    1
    
    
    
    150
    
    
    
    
    
    
    
    971Net charge-offs
    
    
    1,447
    
    
    
    (243
    )
    
    
    7,333
    
    
    
    33
    
    
    
    382
    
    
    
    
    
    
    
    8,952Ending balance
    
    $
    14,570
    
    
    $
    6,822
    
    
    $
    37,310
    
    
    $
    231
    
    
    $
    4,087
    
    
    $
    7,228
    
    
    $
    70,248Period end amount allocated to:Loans
individually evaluated for impairment
    
    $
    5,891
    
    
    $
    425
    
    
    $
    10,980
    
    
    $
    216
    
    
    $
    816
    
    
    $
    
    
    
    $
    18,328Loans collectively evaluated
for impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    5,891
    
    
    $
    425
    
    
    $
    10,980
    
    
    $
    216
    
    
    $
    816
    
    
    $
    
    
    
    $
    18,328
  Balance at the beginning of the period
    
    $
    67,931Provision for loan losses
    
    
    13,054Net charge-offs:Loans charged-off
    
    
    9,331Recoveries
    
    
    51Net charge-offs
    
    
    9,280Balance at the end of the period
    
    $
    71,705
 12




---



##### Table of Contents



CommercialBusiness loans
    
    $
    22,992Energy
    
    
    20,001ConstructionMarket risk
    
    
    2,640Real estateMarket risk
    
    
    56,887Commercial
    
    
    6,733Secured by 1-4 family
    
    
    2,554Consumer
    
    
    669Leases
    
    
    4,003Total non-accrual loans
    
    $
    116,479
  13




---



##### Table of Contents



Unpaid Principal
    
    
    
    
    
    
    Average Recorded
    
    
    Interest IncomeRecorded Investment
    
    
    Balance
    
    
    Related Allowance
    
    
    Investment
    
    
    RecognizedWith no related allowance recorded:CommercialBusiness loans
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Energy
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ConstructionMarket risk
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Secured by 1-4 family
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Real EstateMarket risk
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Secured by 1-4 family
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Leases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total impaired loans with no related
allowance
recorded
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    With an allowance recorded:CommercialBusiness loans
    
    $
    22,992
    
    
    $
    28,920
    
    
    $
    4,891
    
    
    $
    22,692
    
    
    $
    Energy
    
    
    20,001
    
    
    
    20,001
    
    
    
    1,000
    
    
    
    20,001
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ConstructionMarket risk
    
    
    2,640
    
    
    
    2,640
    
    
    
    425
    
    
    
    2,641
    
    
    
    Secured by 1-4 family
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Real EstateMarket risk
    
    
    56,887
    
    
    
    72,011
    
    
    
    9,502
    
    
    
    55,104
    
    
    
    Commercial
    
    
    6,733
    
    
    
    6,733
    
    
    
    1,179
    
    
    
    6,606
    
    
    
    Secured by 1-4 family
    
    
    2,554
    
    
    
    2,554
    
    
    
    299
    
    
    
    2,013
    
    
    
    Consumer
    
    
    669
    
    
    
    669
    
    
    
    216
    
    
    
    694
    
    
    
    Leases
    
    
    4,003
    
    
    
    4,003
    
    
    
    816
    
    
    
    5,550
    
    
    
    Total impaired loans with an allowance
recorded
    
    $
    116,479
    
    
    $
    137,531
    
    
    $
    18,328
    
    
    $
    115,301
    
    
    $
    Combined:CommercialBusiness loans
    
    $
    22,992
    
    
    $
    28,920
    
    
    $
    4,891
    
    
    $
    22,692
    
    
    $
    Energy
    
    
    20,001
    
    
    
    20,001
    
    
    
    1,000
    
    
    
    20,001
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ConstructionMarket risk
    
    
    2,640
    
    
    
    2,640
    
    
    
    425
    
    
    
    2,641
    
    
    
    Secured by 1-4 family
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Real EstateMarket risk
    
    
    56,887
    
    
    
    72,011
    
    
    
    9,502
    
    
    
    55,104
    
    
    
    Commercial
    
    
    6,733
    
    
    
    6,733
    
    
    
    1,179
    
    
    
    6,606
    
    
    
    Secured by 1-4 family
    
    
    2,554
    
    
    
    2,554
    
    
    
    299
    
    
    
    2,013
    
    
    
    Consumer
    
    
    669
    
    
    
    669
    
    
    
    216
    
    
    
    694
    
    
    
    Leases
    
    
    4,003
    
    
    
    4,003
    
    
    
    816
    
    
    
    5,550
    
    
    
    Total impaired loans
    
    $
    116,479
    
    
    $
    137,531
    
    
    $
    18,328
    
    
    $
    115,301
    
    
    $
    
 14




---



##### Table of Contents



Greater
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Greater Than30-59 Days
    
    
    60-89 Days
    
    
    Than 90
    
    
    Total Past
    
    
    
    
    
    
    
    
    
    
    90 Days andPast Due
    
    
    Past Due
    
    
    Days
    
    
    Due
    
    
    Current
    
    
    Total
    
    
    Accruing(1)CommercialBusiness loans
    
    $
    5,323
    
    
    $
    5,543
    
    
    $
    2,426
    
    
    $
    13,292
    
    
    $
    2,045,715
    
    
    $
    2,059,007
    
    
    $
    2,426Energy
    
    
    11,279
    
    
    
    230
    
    
    
    
    
    
    
    11,509
    
    
    
    428,275
    
    
    
    439,784
    
    
    
    ConstructionMarket risk
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    334,526
    
    
    
    334,526
    
    
    
    Secured by 1-4
family
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,276
    
    
    
    12,276
    
    
    
    Real estateMarket risk
    
    
    13,707
    
    
    
    
    
    
    
    69
    
    
    
    13,776
    
    
    
    1,285,621
    
    
    
    1,299,397
    
    
    
    69Commercial
    
    
    1,559
    
    
    
    668
    
    
    
    
    
    
    
    2,227
    
    
    
    296,978
    
    
    
    299,205
    
    
    
    Secured by 1-4
family
    
    
    7,793
    
    
    
    137
    
    
    
    34
    
    
    
    7,964
    
    
    
    73,360
    
    
    
    81,324
    
    
    
    34Consumer
    
    
    267
    
    
    
    18
    
    
    
    
    
    
    
    285
    
    
    
    20,636
    
    
    
    20,921
    
    
    
    Leases
    
    
    1,423
    
    
    
    123
    
    
    
    
    
    
    
    1,546
    
    
    
    75,145
    
    
    
    76,691
    
    
    
    Total loans held for
investment
    
    $
    41,351
    
    
    $
    6,719
    
    
    $
    2,529
    
    
    $
    50,599
    
    
    $
    4,572,532
    
    
    $
    4,623,131
    
    
    $
    2,529
 
 (1)
    
    Loans past due 90 days and still accruing includes premium finance loans of $2.4 million.
These loans are generally secured by obligations of insurance carriers to refund premiums on
cancelled insurance policies. The refund of premiums from the insurance carriers can take 180
days or longer from the cancellation date. (5) OREO AND VALUATION ALLOWANCE FOR LOSSES ON OREO
  Three months ended March 31,2011
    
    
    2010Beginning balance
    
    $
    42,261
    
    
    $
    27,264Additions
    
    
    926
    
    
    
    4,151Sales
    
    
    (13,695
    )
    
    
    (601
    )Valuation allowance for OREO
    
    
    (1,921
    )
    
    
    (1,838
    )Direct write-downs
    
    
    (1,399
    )
    
    
    (111
    )Ending balance
    
    $
    26,172
    
    
    $
    28,865
 (6) FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
   15




---



##### Table of Contents



Commitments to extend credit
    
    $
    1,436,490Standby letters of credit
    
    
    103,075
 (7) REGULATORY MATTERS
    March 31,2011
    
    
    2010Risk-based capital:Tier 1 capital
    
    
    11.21
    %
    
    
    11.28
    %Total capital
    
    
    12.46
    %
    
    
    12.53
    %Leverage
    
    
    10.29
    %
    
    
    10.98
    %
 (8) STOCK-BASED COMPENSATION
  16




---



##### Table of Contents



Compensation  Stock Compensation
 Three months ended March 31,(in thousands)
    
    2011
    
    
    2010Stock- based compensation expense recognized:Unvested options
    
    $
    
    
    
    $
    110SARs
    
    
    506
    
    
    
    478RSUs
    
    
    1,628
    
    
    
    984Total compensation expense recognized
    
    $
    2,134
    
    
    $
    1,572
 March 31, 2011Options
    
    
    SARs and RSUsUnrecognized compensation expense related to unvested awards
    
    $
    
    
    
    $
    14,220Weighted average period over which expense is expected to be
recognized, in years
    
    
    
    
    
    
    2.22
 (9) DISCONTINUED OPERATIONS
   (10) FAIR VALUE DISCLOSURES
 Fair Value Measurements and Disclosures
  Level 1
    
    Quoted prices in active markets for identical assets or liabilities. Level 1
assets include U.S. Treasuries that are highly liquid and are actively traded in
over-the-counter markets.
 17




---



##### Table of Contents



Level 2
    
    Observable inputs other than Level 1 prices, such as quoted prices for similar
assets or liabilities; quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data for substantially the full
term of the assets or liabilities. Level 2 assets include U.S. government and agency
mortgage-backed debt securities, corporate securities, municipal bonds, and Community
Reinvestment Act funds. This category includes derivative assets and liabilities where
values are based on internal cash flow models supported by market data inputs.Level 3
    
    Unobservable inputs that are supported by little or no market activity and that
are significant to the fair value of the assets or liabilities. Level 3 assets and
liabilities include financial instruments whose value is determined using pricing models,
discounted cash flow methodologies, or similar techniques, as well as instruments for
which the determination of fair values requires significant management judgment or
estimation. This category also includes impaired loans and OREO where collateral values
have been based on third party appraisals; however, due to current economic
conditions, comparative sales data typically used in appraisals may be unavailable or more
subjective due to lack of market activity. Additionally, this category includes certain
mortgage loans that were transferred from loans held for sale to loans held for investment
at a lower of cost or fair value.
  Fair Value Measurements UsingLevel 1
    
    Level 2
    
    Level 3Available for sale securities:(1)Mortgage-backed securities
    $
    
    
    $
    121,913
    
    
    $
    Corporate securities
    
    
    
    
    5,000
    
    
    
    Municipals
    
    
    
    
    37,526
    
    
    
    Other
    
    
    
    
    7,551
    
    
    
    Loans(2) (4)
    
    
    
    
    
    
    
    
    75,909OREO(3) (4)
    
    
    
    
    
    
    
    
    26,172Derivative asset(5)
    
    
    
    
    5,122
    
    
    
    Derivative liability(5)
    
    
    
    
    (5,122
    )
    
    
    
 
 (1)
    
    Securities are measured at fair value on a recurring basis, generally monthly.(2)
    
    Includes certain mortgage loans that have been transferred to loans held for investment from
loans held for sale at the lower of cost or market. Also, includes impaired loans that have
been measured for impairment at the fair value of the loans collateral.(3)
    
    OREO is transferred from loans to OREO at fair value less selling costs.(4)
    
    Fair value of loans and OREO is measured on a nonrecurring basis, generally annually or more
often as warranted by market and economic conditions(5)
    
    Derivative assets and liabilities are measured at fair value on a recurring basis, generally
quarterly. Level 3 Valuations
  Loans
  18




---



##### Table of Contents



OREO
  Fair Value of Financial Instruments
   March 31, 2011
    
    
    December 31, 2010Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair ValueCash and cash equivalents
    
    $
    223,720
    
    
    $
    223,720
    
    
    $
    179,866
    
    
    $
    179,866Securities, available-for-sale
    
    
    171,990
    
    
    
    171,990
    
    
    
    185,424
    
    
    
    185,424Loans held for sale
    
    
    811,400
    
    
    
    811,400
    
    
    
    1,194,209
    
    
    
    1,194,209Loans held for sale from discontinued
operations
    
    
    488
    
    
    
    488
    
    
    
    490
    
    
    
    490Loans held for investment, net
    
    
    4,641,176
    
    
    
    4,653,368
    
    
    
    4,639,820
    
    
    
    4,652,588Derivative asset
    
    
    5,122
    
    
    
    5,122
    
    
    
    6,874
    
    
    
    6,874Deposits
    
    
    5,221,991
    
    
    
    5,231,602
    
    
    
    5,455,401
    
    
    
    5,457,692Federal funds purchased
    
    
    115,870
    
    
    
    115,870
    
    
    
    283,781
    
    
    
    283,781Borrowings
    
    
    18,125
    
    
    
    18,126
    
    
    
    14,106
    
    
    
    14,107Trust preferred subordinated debentures
    
    
    113,406
    
    
    
    113,406
    
    
    
    113,406
    
    
    
    113,406Derivative liability
    
    
    5,122
    
    
    
    5,122
    
    
    
    6,874
    
    
    
    6,874
  Cash and cash equivalents
  Securities
  19




---



##### Table of Contents



Loans, net
  Derivatives
  Deposits
  Federal funds purchased, other borrowings and trust preferred subordinated debentures
  Off-balance sheet instruments
  (11) STOCKHOLDERS EQUITY
  (12) NEW ACCOUNTING PRONOUNCEMENTS
 FASB ASC 310 Receivables
  20




---



##### Table of Contents



QUARTERLY FINANCIAL SUMMARY  UNAUDITED
 For the three months ended
    
    For the three months endedMarch 31, 2011
    
    March 31, 2010Average
    
    
    Revenue/
    
    
    Yield/
    
    
    Average
    
    
    Revenue/
    
    
    Yield/Balance
    
    
    Expense(1)
    
    
    Rate
    
    
    Balance
    
    
    Expense(1)
    
    
    RateAssetsSecurities  taxable
    
    $
    140,007
    
    
    $
    1,500
    
    
    
    4.35
    %
    
    $
    211,618
    
    
    $
    2,341
    
    
    
    4.49
    %Securities  non-taxable(2)
    
    
    37,154
    
    
    
    532
    
    
    
    5.81
    %
    
    
    41,654
    
    
    
    592
    
    
    
    5.76
    %Federal funds sold
    
    
    44,322
    
    
    
    28
    
    
    
    0.26
    %
    
    
    7,471
    
    
    
    2
    
    
    
    0.11
    %Deposits in other banks
    
    
    277,228
    
    
    
    197
    
    
    
    0.29
    %
    
    
    12,457
    
    
    
    9
    
    
    
    0.29
    %Loans held for sale from continuing
operations
    
    
    735,682
    
    
    
    8,677
    
    
    
    4.78
    %
    
    
    457,459
    
    
    
    5,490
    
    
    
    4.87
    %Loans
    
    
    4,721,928
    
    
    
    59,363
    
    
    
    5.10
    %
    
    
    4,413,960
    
    
    
    56,079
    
    
    
    5.15
    %Less reserve for loan losses
    
    
    70,142
    
    
    
    
    
    
    
    
    
    
    
    66,726
    
    
    
    
    
    
    
    Loans, net of reserve
    
    
    5,387,468
    
    
    
    68,040
    
    
    
    5.12
    %
    
    
    4,804,693
    
    
    
    61,569
    
    
    
    5.20
    %Total earning assets
    
    
    5,886,179
    
    
    
    70,297
    
    
    
    4.84
    %
    
    
    5,077,893
    
    
    
    64,513
    
    
    
    5.15
    %Cash and other assets
    
    
    297,060
    
    
    
    
    
    
    
    
    
    
    
    311,128Total assets
    
    $
    6,183,239
    
    
    
    
    
    
    
    
    
    
    $
    5,389,021Liabilities and Stockholders EquityTransaction deposits
    
    $
    345,978
    
    
    $
    55
    
    
    
    0.06
    %
    
    $
    365,205
    
    
    $
    264
    
    
    
    0.29
    %Savings deposits
    
    
    2,469,435
    
    
    
    2,371
    
    
    
    0.39
    %
    
    
    1,773,201
    
    
    
    3,524
    
    
    
    0.81
    %Time deposits
    
    
    709,604
    
    
    
    1,921
    
    
    
    1.10
    %
    
    
    840,820
    
    
    
    2,787
    
    
    
    1.34
    %Deposits in foreign branches
    
    
    376,570
    
    
    
    524
    
    
    
    0.56
    %
    
    
    353,803
    
    
    
    1,183
    
    
    
    1.36
    %Total interest bearing deposits
    
    
    3,901,587
    
    
    
    4,871
    
    
    
    0.51
    %
    
    
    3,333,029
    
    
    
    7,758
    
    
    
    0.94
    %Other borrowings
    
    
    159,450
    
    
    
    109
    
    
    
    0.28
    %
    
    
    461,477
    
    
    
    416
    
    
    
    0.37
    %Trust preferred subordinated debentures
    
    
    113,406
    
    
    
    633
    
    
    
    2.26
    %
    
    
    113,406
    
    
    
    904
    
    
    
    3.23
    %Total interest bearing liabilities
    
    
    4,174,443
    
    
    
    5,613
    
    
    
    0.55
    %
    
    
    3,907,912
    
    
    
    9,078
    
    
    
    0.94
    %Demand deposits
    
    
    1,417,734
    
    
    
    
    
    
    
    
    
    
    
    956,359Other liabilities
    
    
    47,753
    
    
    
    
    
    
    
    
    
    
    
    28,643Stockholders equity
    
    
    543,309
    
    
    
    
    
    
    
    
    
    
    
    496,107Total liabilities and stockholders equity
    
    $
    6,183,239
    
    
    
    
    
    
    
    
    
    
    $
    5,389,021Net interest income
    
    
    
    
    
    $
    64,684
    
    
    
    
    
    
    
    
    
    
    $
    55,435Net interest margin
    
    
    
    
    
    
    
    
    
    
    4.46
    %
    
    
    
    
    
    
    
    
    
    
    4.43
    %Net interest spread
    
    
    
    
    
    
    
    
    
    
    4.29
    %
    
    
    
    
    
    
    
    
    
    
    4.21
    %Additional information from discontinued operations:Loans held for sale
    
    $
    489
    
    
    
    
    
    
    
    
    
    
    $
    585Borrowed funds
    
    
    489
    
    
    
    
    
    
    
    
    
    
    
    585Net interest income
    
    
    
    
    
    $
    10
    
    
    
    
    
    
    
    
    
    
    $
    13Net interest margin  consolidated
    
    
    
    
    
    
    
    
    
    
    4.46
    %
    
    
    
    
    
    
    
    
    
    
    4.43
    %
 
 (1)
    
    The loan averages include loans on which the accrual of interest has been discontinued and
are stated net of unearned income.(2)
    
    Taxable equivalent rates used where applicable. 21




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 Forward-Looking Statements
   (1)
    
    Changes in interest rates and the relationship between rate indices, including LIBOR
and Fed Funds(2)
    
    Changes in the levels of loan prepayments, which could affect the value of our loans
or investment securities(3)
    
    Changes in general economic and business conditions in areas or markets where we
compete(4)
    
    Competition from banks and other financial institutions for loans and customer
deposits(5)
    
    The failure of assumptions underlying the establishment of and provisions made to the
allowance for credit losses and differences in assumptions utilized by banking regulators
which could have retroactive impact(6)
    
    The loss of senior management or operating personnel and the potential inability to
hire qualified personnel at reasonable compensation levels(7)
    
    Changes in government regulations including changes as a result of the current
economic crisis. On July 21, 2010, the Dodd-Frank Act was signed into law. The Dodd-Frank
Act represents a significant overhaul of many aspects of the regulation of the financial
services industry.
  Results of Operations
  Summary of Performance
   22




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##### Table of Contents



Net Interest Income
    Three months endedMarch 31, 2011/2010Change Due To(1)Change
    
    
    Volume
    
    
    Yield/RateInterest income:Securities(2)
    
    $
    (901
    )
    
    $
    (856
    )
    
    $
    (45
    )Loans held for sale
    
    
    3,187
    
    
    
    3,339
    
    
    
    (152
    )Loans held for investment
    
    
    3,284
    
    
    
    3,913
    
    
    
    (629
    )Federal funds sold
    
    
    26
    
    
    
    10
    
    
    
    16Deposits in other banks
    
    
    188
    
    
    
    191
    
    
    
    (3
    )Total
    
    
    5,784
    
    
    
    6,597
    
    
    
    (813
    )Interest
expense:Transaction deposits
    
    
    (209
    )
    
    
    (14
    )
    
    
    (195
    )Savings deposits
    
    
    (1,153
    )
    
    
    1,384
    
    
    
    (2,537
    )Time deposits
    
    
    (866
    )
    
    
    (435
    )
    
    
    (431
    )Deposits in foreign branches
    
    
    (659
    )
    
    
    76
    
    
    
    (735
    )Borrowed funds
    
    
    (578
    )
    
    
    (272
    )
    
    
    (306
    )Total
    
    
    (3,465
    )
    
    
    739
    
    
    
    (4,204
    )Net interest income
    
    $
    9,249
    
    
    $
    5,858
    
    
    $
    3,391
 
 (1)
    
    Changes attributable to both volume and yield/rate are allocated to both volume and
yield/rate on an equal basis.(2)
    
    Taxable equivalent rates used where applicable.  23




---



##### Table of Contents



Non-interest Income
  Three months ended March 31,2011
    
    
    2010Service charges on deposit accounts
    
    $
    1,783
    
    
    $
    1,483Trust fee income
    
    
    954
    
    
    
    954Bank owned life insurance (BOLI) income
    
    
    523
    
    
    
    471Brokered loan fees
    
    
    2,520
    
    
    
    1,904Equipment rental income
    
    
    783
    
    
    
    1,344Other
    
    
    1,121
    
    
    
    792Total non-interest income
    
    $
    7,684
    
    
    $
    6,948
   Non-interest Expense
  Three months ended March 31,2011
    
    
    2010Salaries and employee benefits
    
    $
    24,172
    
    
    $
    20,069Net occupancy expense
    
    
    3,310
    
    
    
    3,014Leased equipment depreciation
    
    
    556
    
    
    
    1,059Marketing
    
    
    2,123
    
    
    
    787Legal and professional
    
    
    2,723
    
    
    
    1,950Communications and data processing
    
    
    2,347
    
    
    
    1,926FDIC insurance assessment
    
    
    2,511
    
    
    
    1,868Allowance and other carrying costs for OREO
    
    
    4,030
    
    
    
    2,292Other
    
    
    4,627
    
    
    
    4,221Total non-interest expense
    
    $
    46,399
    
    
    $
    37,186
    24




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##### Table of Contents



Analysis of Financial Condition
 Loan Portfolio
   March 31,
    
    
    December 31,2011
    
    
    2010Commercial
    
    $
    2,541,784
    
    
    $
    2,592,924Construction
    
    
    349,442
    
    
    
    270,008Real estate
    
    
    1,746,100
    
    
    
    1,759,758Consumer
    
    
    21,590
    
    
    
    21,470Leases
    
    
    80,694
    
    
    
    95,607Gross loans held for investment
    
    
    4,739,610
    
    
    
    4,739,767Deferred income (net of direct origination costs)
    
    
    (28,186
    )
    
    
    (28,437
    )Allowance for loan losses
    
    
    (70,248
    )
    
    
    (71,510
    )Total loans held for investment, net
    
    
    4,641,176
    
    
    
    4,639,820Loans held for sale
    
    
    811,400
    
    
    
    1,194,209Total
    
    $
    5,452,576
    
    
    $
    5,834,029
   25




---



##### Table of Contents



Summary of Loan Loss Experience
      26




---



##### Table of Contents



27




---



##### Table of Contents



Three months
    
    
    Three months
    
    
    Year endedended March 31,
    
    
    ended March 31,
    
    
    December 31,2011
    
    
    2010
    
    
    2010Reserve for loan losses:Beginning balance
    
    $
    71,510
    
    
    $
    67,931
    
    
    $
    67,931Loans charged-off:Commercial
    
    
    1,993
    
    
    
    7,551
    
    
    
    27,723Real estate  construction
    
    
    
    
    
    
    420
    
    
    
    12,438Real estate  term
    
    
    7,364
    
    
    
    766
    
    
    
    9,517Consumer
    
    
    34
    
    
    
    
    
    
    
    216Equipment leases
    
    
    532
    
    
    
    594
    
    
    
    1,555Total charge-offs
    
    
    9,923
    
    
    
    9,331
    
    
    
    51,449Recoveries:Commercial
    
    
    546
    
    
    
    23
    
    
    
    176Real estate  construction
    
    
    243
    
    
    
    
    
    
    
    1Real estate  term
    
    
    31
    
    
    
    8
    
    
    
    138Consumer
    
    
    1
    
    
    
    
    
    
    
    4Equipment leases
    
    
    150
    
    
    
    20
    
    
    
    158Total recoveries
    
    
    971
    
    
    
    51
    
    
    
    477Net charge-offs
    
    
    8,952
    
    
    
    9,280
    
    
    
    50,972Provision for loan losses
    
    
    7,690
    
    
    
    13,054
    
    
    
    54,551Ending balance
    
    $
    70,248
    
    
    $
    71,705
    
    
    $
    71,510Reserve for off-balance sheet credit losses:Beginning balance
    
    $
    1,897
    
    
    $
    2,948
    
    
    $
    2,948Provision (benefit) for off-balance sheet credit losses
    
    
    (190
    )
    
    
    446
    
    
    
    (1,051
    )Ending balance
    
    $
    1,707
    
    
    $
    3,394
    
    
    $
    1,897Total reserve for credit losses
    
    $
    71,955
    
    
    $
    75,099
    
    
    $
    73,407Total provision for credit losses
    
    $
    7,500
    
    
    $
    13,500
    
    
    $
    53,500Reserve for loan losses to loans held for investment(2)
    
    
    1.49
    %
    
    
    1.61
    %
    
    
    1.52
    %Net charge-offs to average loans(1) (2)
    
    
    0.77
    %
    
    
    0.85
    %
    
    
    1.14
    %Total provision for credit losses to average loans(2)
    
    
    0.64
    %
    
    
    1.24
    %
    
    
    1.20
    %Recoveries to total charge-offs
    
    
    9.79
    %
    
    
    0.55
    %
    
    
    0.93
    %Reserve for loan losses as a multiple of net charge-offs
    
    
    7.8
    x
    
    
    7.7
    x
    
    
    1.4
    xReserve for off-balance sheet credit losses to off-balance sheet credit commitments
    
    
    0.11
    %
    
    
    0.29
    %
    
    
    0.14
    %Combined reserves for credit losses to loans held for
investment(2)
    
    
    1.53
    %
    
    
    1.69
    %
    
    
    1.56
    %Non-performing assets:Non-accrual loans
    
    $
    116,479
    
    
    $
    115,926
    
    
    $
    112,090OREO(4)
    
    
    26,172
    
    
    
    28,865
    
    
    
    42,261Total
    
    $
    142,651
    
    
    $
    144,791
    
    
    $
    154,351Restructured loans
    
    $
    22,219
    
    
    $
    10,700
    
    
    $
    4,319Loans past due 90 days and still accruing(3)
    
    
    2,529
    
    
    
    2,390
    
    
    
    6,706Reserve as a percent of non-performing loans(2)
    
    
    .6x
    
    
    
    .6x
    
    
    
    .6x
 
 (1)
    
    Interim period ratios are annualized.(2)
    
    Excludes loans held for sale.(3)
    
    At March 31, 2011, December 31, 2010 and March 31, 2010, loans past due 90 days and still
accruing includes premium finance loans of $2.4 million, $3.3 million and $2.0 million,
respectively. These loans are generally secured by obligations of insurance carriers to refund
premiums on cancelled insurance policies. The refund of premiums from the insurance carriers
can take 180 days or longer from the cancellation date.(4)
    
    At March 31, 2011, December 31, 2010 and March 31, 2010, OREO balance is net of $10.4
million, $12.9 million and $8.5 million valuation allowance, respectively. 28




---



##### Table of Contents



Non-performing Assets
  March 31,
    
    
    March 31,
    
    
    December 31,2011
    
    
    2010
    
    
    2010Non-accrual loansCommercial
    
    $
    42,993
    
    
    $
    44,292
    
    
    $
    42,543Construction
    
    
    2,640
    
    
    
    19,183
    
    
    
    21Real estate
    
    
    66,174
    
    
    
    41,271
    
    
    
    62,497Consumer
    
    
    669
    
    
    
    535
    
    
    
    706Leases
    
    
    4,003
    
    
    
    10,645
    
    
    
    6,323Total non-accrual loans
    
    $
    116,479
    
    
    $
    115,926
    
    
    $
    112,090
  Non-accrual loans:CommercialLines of credit secured by the following:Oil and gas properties
    
    $
    19,980Various single family residences and notes receivable
    
    
    10,063Assets of the borrowers
    
    
    8,176Other
    
    
    4,774Total commercial
    
    
    42,993ConstructionSecured by:Unimproved land and/or undeveloped residential lots
    
    
    2,620Other
    
    
    20Total construction
    
    
    2,640Real estateSecured by:Commercial property
    
    
    26,236Unimproved land and/or undeveloped residential lots
    
    
    16,288Rental properties and multi-family residential real estate
    
    
    8,796Single family residences
    
    
    9,878Other
    
    
    4,976Total real estate
    
    
    66,174Consumer
    
    
    669Leases (commercial leases primarily secured by assets of the lessor)
    
    
    4,003Total non-accrual loans
    
    $
    116,479
   29




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##### Table of Contents



Three months ended March 31,2011
    
    
    2010Beginning balance
    
    $
    42,261
    
    
    $
    27,264Additions
    
    
    926
    
    
    
    29,559Sales
    
    
    (13,695
    )
    
    
    (6,058
    )Valuation allowance for OREO
    
    
    (1,921
    )
    
    
    (6,587
    )Direct write-downs
    
    
    (1,399
    )
    
    
    (1,917
    )Ending balance
    
    $
    26,172
    
    
    $
    42,261
  Unimproved commercial real estate lots and land
    
    $
    7,051Commercial buildings
    
    
    2,120Undeveloped land and residential lots
    
    
    11,054Multifamily lots and land
    
    
    1,229Other
    
    
    4,718Total OREO
    
    $
    26,172
  30




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##### Table of Contents



Liquidity and Capital Resources
   March 31,
    
    
    March 31,
    
    
    December 31,2011
    
    
    2010
    
    
    2010Deposits from core customers
    
    $
    5,222.0
    
    
    $
    4,359.2
    
    
    $
    5,455.4Deposits from core customers as a percent of total deposits
    
    
    100.0
    %
    
    
    98.9
    %
    
    
    100.0
    %Brokered deposits
    
    $
    
    
    
    $
    50.6
    
    
    $
    Brokered deposits as a percent of total deposits
    
    
    0.0
    %
    
    
    1.1
    %
    
    
    0.0
    %Average deposits from core customers(1)
    
    $
    5,319.3
    
    
    $
    4,191.5
    
    
    $
    4,982.6Average deposits from core customers as a percent of total
quarterly average deposits(1)
    
    
    100.0
    %
    
    
    97.7
    %
    
    
    99.4
    %Average brokered deposits(1)
    
    $
    
    
    
    $
    97.9
    
    
    $
    28.6Average brokered deposits as a percent of total quarterly
average deposits(1)
    
    
    0.0
    %
    
    
    2.3
    %
    
    
    0.6
    %
 
 (1)
    
    Annual averages presented for December 31, 2010.   31




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##### Table of Contents



Federal funds purchased
    
    $
    115,870Customer repurchase agreements
    
    
    14,716Treasury, tax and loan notes
    
    
    3,328FHLB borrowings
    
    
    81Trust preferred subordinated debentures
    
    
    113,406Total borrowings
    
    $
    247,401Maximum outstanding at any month-end during the year
    
    $
    289,207
  FHLB borrowing capacity relating to loans
    
    $
    897,864FHLB borrowing capacity relating to securities
    
    
    113,455Total FHLB borrowing capacity
    
    $
    1,011,319Unused federal funds lines available from commercial banks
    
    $
    393,360
   Commitments and Contractual Obligations
  After One but
    
    After Three butWithin One
    
    Within Three
    
    Within Five
    
    After FiveYear
    
    Years
    
    Years
    
    Years
    
    TotalDeposits without a stated maturity(1)
    
    $
    4,277,459
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    4,277,459Time deposits(1)
    
    
    864,338
    
    
    
    62,331
    
    
    
    17,076
    
    
    
    787
    
    
    
    944,532Federal funds purchased(1)
    
    
    115,870
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115,870Customer repurchase agreements(1)
    
    
    14,716
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,716Treasury, tax and loan notes(1)
    
    
    3,328
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,328FHLB borrowings(1)
    
    
    
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    81Operating lease obligations(1) (2)
    
    
    8,775
    
    
    
    17,481
    
    
    
    16,117
    
    
    
    43,592
    
    
    
    85,965Trust preferred subordinated
debentures(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113,406
    
    
    
    113,406Total contractual obligations
    
    $
    5,284,486
    
    
    $
    79,812
    
    
    $
    33,274
    
    
    $
    157,785
    
    
    $
    5,555,357
 
 (1)
    
    Excludes interest.(2)
    
    Non-balance sheet item.  32




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##### Table of Contents



Receivables Contingencies
 33




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    Interest Rate Risk Management
  34




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##### Table of Contents



Interest
Rate Sensitivity Gap Analysis  March 31, 2011
 0-3 mo
    
    
    4-12 mo
    
    
    1-3 yr
    
    
    3+ yr
    
    
    TotalBalance
    
    
    Balance
    
    
    Balance
    
    
    Balance
    
    
    BalanceSecurities(1)
    
    $
    34,550
    
    
    $
    33,355
    
    
    $
    48,562
    
    
    $
    55,523
    
    
    $
    171,990Total variable loans
    
    
    4,616,534
    
    
    
    73,928
    
    
    
    16,704
    
    
    
    2,579
    
    
    
    4,709,745Total fixed loans
    
    
    355,335
    
    
    
    205,783
    
    
    
    191,453
    
    
    
    89,181
    
    
    
    841,752Total loans(2)
    
    
    4,971,869
    
    
    
    279,711
    
    
    
    208,157
    
    
    
    91,760
    
    
    
    5,551,497Total interest sensitive assets
    
    $
    5,006,419
    
    
    $
    313,066
    
    
    $
    256,719
    
    
    $
    147,283
    
    
    $
    5,723,487Liabilities:Interest bearing customer deposits
    
    $
    3,108,702
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    3,108,702CDs & IRAs
    
    
    284,073
    
    
    
    268,327
    
    
    
    62,331
    
    
    
    17,863
    
    
    
    632,594Total interest bearing deposits
    
    
    3,392,775
    
    
    
    268,327
    
    
    
    62,331
    
    
    
    17,863
    
    
    
    3,741,296Repurchase agreements, Federal
funds purchased, FHLB borrowings
    
    
    133,995
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    133,995Trust preferred subordinated
debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113,406
    
    
    
    113,406Total borrowings
    
    
    133,995
    
    
    
    
    
    
    
    
    
    
    
    113,406
    
    
    
    247,401Total interest sensitive liabilities
    
    $
    3,526,770
    
    
    $
    268,327
    
    
    $
    62,331
    
    
    $
    131,269
    
    
    $
    3,988,697GAP
    
    $
    1,479,649
    
    
    $
    44,739
    
    
    $
    194,388
    
    
    $
    16,014
    
    
    $
    Cumulative GAP
    
    
    1,479,649
    
    
    
    1,524,388
    
    
    
    1,718,776
    
    
    
    1,734,790
    
    
    
    1,734,790Demand deposits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,480,695Stockholders equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    544,925Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,025,620
 
 (1)
    
    Securities based on fair market value.(2)
    
    Loans include loans held for sale and are stated at gross.    35




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##### Table of Contents



Anticipated Impact Over the Next Twelve Monthsas Compared to Most Likely Scenario200 bp IncreaseMarch 31, 2011Change in net interest income
    
    $
    15,775
  36




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
  
 PART II  OTHER INFORMATION
 
 ITEM 1A. RISK FACTORS
  37




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##### Table of Contents



ITEM 5. EXHIBITS
 (a)
    
    Exhibits
 31.1
    
    Certification of Chief Executive Officer pursuant to Rule
13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Rule
13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to Rule
13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.32.2
    
    Certification of Chief Financial Officer pursuant to Rule
13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
 38




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##### Table of Contents



SIGNATURES
    /s/ Peter B. BartholowPeter B. BartholowChief Financial Officer
(Duly authorized officer and principal
financial officer) 39




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##### Table of Contents



EXHIBIT INDEX
  31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the
Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the
Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the
Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.32.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the
Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.
 40