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FRY{OMB Mrmber 71fi829?ApFfial oghes No\rembor 3{r, 2019Page 1 ot 2
Board of Governorc of the Federal Reserue System
Annual Report of Holding Companies-FR JUL 0 B 20ii lr ;--lt"/
Report at tte close of business as of the end of flscal yearThls Report r's rcquired by law: Section S(cX1XA) of the BankHolding Company Act (12 U.S.C. S 18aa(c)(1)(A); sections 8(a)and 13(a) of ths lnternational Banking Ac/.(12 U,S.C. SS 31{Xi(a)and 3108(a)); sections 11(aX1), 25, and 25A of the FederalReserve Act (12 U.S,C. SS 2a8(a)(1), 602. and 611a); and sec-tions 113, 165, 312, 6'18, and 809 of the DoddfrankAd (12 U.S.C.SS 5361, 5365, 5412, 1850a(c)(1), and 5468(bX1)). Retum to theappropriate Federal Reserve Bank the original and the number ofcopies specified.
This report form is to be filed by all top-tier bank holding compa-nles, top-tier savings and loan holding companies, and U.S. inter-mediaE holding companies organized under U.S, law, and byany fureign banking organization that does not meet the require-ments of and is not treated as a qualiffing foreign banking orga-nization under Section 211.23 of Regulation K (12 C.F.R. $211.23\. (Se€ page one of the general instructions for more detailofwho must file.) The Federal Reserve may not conduct or spon-sor, and an organization (or a person) is not reguired to respondto, an information collection unless it displays a currentty validOMB conbot number.
NOTE The Annual Report of Holding Companies must be signed byone director of the top-tier hoHlng company. This individual shouldalso be a senior oficial of the toptrler holding company. ln the eventthat the toptier holding company does not have an individual who isa sonior offcial and is also a direc-tor, the chairman of the board mustsign the report lf the holding company is an ESOP/ESOT fonned asa corporalion or is an LLC, see the General Instructions fur theauthorized individual who mustsign fio reportt, Christopher C. Doyle
Name of the Holdlng Company DlrBcbr and Oflidal
President and Chief Executive fficerTtfle of the Holdlng Company Dlrscbr and Ofrclal
attest that the Annual Repofi of Holdlng Companies (includlngthe supporting atachments) tur this report date has been pre-pared in conformance with the instructions issued by tha FederalReserve System and are true and conect to the best of myknorledge and belief.
Wrth rcspect to information ragardlng individuals cpntained in thisrcpoil" the Repofter eftifies that it has the authoity to provide thisinformation to the Fedenl Reserve. Tha Roportor also ceftifiesthat it has the author$ ai behalf of each individual, to consent orobject to public release of information rcSadW that idividual.The Federal Reserve may assume, in the aDsence of a request farconfrdentiat trcatment submifted in acardance with the Boad's'Rules Regarding Availability of lnfomation,' 12 C.F.R. Patt 261,that the Reporter and individual consent to publb rclaase of all
Date of Report (toptier holdlng company's fiscal year-end):
December 31 2017Month/ Day/Year
N/ARcporb/s Legal Entty ldentf,er (LEl) (2GCharsctsr LEI Codc)
Reporter's Name, Street and Mailing Address
Texas lndeoendent Bancshares- lnc.Lsgal Tlio of Hotdlng Gompany
3232 Palmer Highway(llatlng Address ot the Holdhg Company) Slreet / P.O. gor
Texas City TX 77590City skb Zp Code
Phycical Locadon (if difiarcnt from maillng sdd.ess)
Person to whom questions about this reporl should be directed:Catherine PotterName
409-76il.324Trte
Area CodE / Phono Number/ Exbnslon
409-9486219Area Code, FAX NumbBr
details report nnoeming that kitty. potter@texasfi rstbank.comE+ntil Addrcss
NIA(URL) fortho Holdlng Company's ryeb pag€
Date of Slgnature
For Federal Reserue Bank Use Only
RSSD IDc.l.
Pubflc rBportng burden tor lhls inhamaum collec0on ls es[rnat6d lo yary fom 1.3 to lol holrs psr ]Brponle. rrth an avcraga d 5.50 houE pr Bpon8q hdudhg Ume b gathsr gld
Ofllce of Mana0ornont and Budgrt Papen ofi Roducdon ProFct Ot0O{)297). l,Vashlngton, DC 2OSg1 O3f201 B
lndlcate status of Annual Report to Shareholders
E] b tndud.d with the FR Y€ reportI witl be sent underseparate coverE is not prepared
For holding registeredwith fie SEG.0
ls confdentiel t eatment requested for any portion ofthis report submlssion?,.,.......ln accordance with the General lnslruc{ons br this report(dteck only one),
1. a lefferpstifying thls requast ls belng provr'ded alongwith lho report...........
2- a letter justiffing thls request has been provlded separately . . .
NOTE: lnformation brwhlch conffiential treatnentls bdng requesbdrnust be provlded separably and labeledas "confidenllal,"
trtr
FRY-6Page2ol2'
For Use By Tiered Holding CompaniesTop-tiered holding companies must list the names, mailing address, and physical locations of each of their subsidiary holding companiesbelow.
N/ALegal Title of Subsidiary Holding Company Legal Trtle of Subsidiary Holding Company
(Mailing Address of the Subsidiary Holding Company) Street / P.O. Box
City State Zip Code
(Mailing Address of the Subsidiary Holding Company) Street / P.O. Box
City State Zip Code
Physical Location (if different from mailing address) Physical Location (if different from mailing address)
LegalTitle of Subsidiary Holding Company Legal litle of Subsidiary Holding Company
(Mailing Address of the Subsidiary Holding Company) Sheet / P.O. Box
City State Zp Code
(Mailing Address of the Subsidiary Holding Company) Street / P.O. Box
City State ZipCode
Physical Location (if different from mailing address) Physical Location (if differentfrom mailing address)
LegalTitle of Subsidiary Holding Company Legal Title of Subsidiary Holding Company
(Mailing Address of the Subsidiary Holding Company) Street / P.O. Box (Mailing Address of the Subsidiary Holding Company) Skeet / P.O. Box
City State Zip Code State Zip CodeCity
Physical Location (if different from mailing address) Physical Location (if different ftom mailing address)
LegalTitle of Subsidiary Holding company LegalTitle of Subsidiary Holding Company
(Mailing Address of the Subsidiary Holding Company) Street/ P.O. Box
City State
(Mailing Address of the Subsidiary Holding Company) Street/ P.O. Box
City State
Physical Location (if difierent from mailing address)
Zip Code
Physical Location (if different from mailing address)
ZipCode
1212012
Texas Independent Bancshares, Inc,FR Y.5
Annual Repoft of Bank Holding CompaniesAs of L2l3LlL7
Repoft Item 1: Annual Repoft to Shareholders - Exhibit ANote: Independent audit is Exhibit B
Repoft Item 2(a): Organization Chart:Texas Independent Bancshares, Inc.
Incorporated in TexasTexas City, TX 77590
I
Texas First Bank - 100o/oIncorporated in Texas
Texas City, TX 77590
7l24l2Ot8
No LEI available
Rust, Ewing, Watt & Haney, Inc. - 100%Incorporated in Texas
Texas City, TX 7759L No LEI's available
Shares-o/o Owned Common86.640/o 436,2OL
14,630/o 73,673
LL.94o/o 60,136
Repoft Item 3: Securities Holders
Texas Independent Bancshares, Inc. Voting TrustTexas City, Texas (United States)
Mitchell Chuoke, Jr., TrusteeGaddis Wittjen, TrusteeCharles T. Doyle, TrusteeChristopher C. Doyle, TrusteeMatthew T. Doyle, Trustee
T.I.B. Employees' 4O1-K PlanTexas City, Texas (United States)
Dennis Bettison, Trustee
Doyle Family Children's TrustTexas City, Texas (United States)
Matlhew T. Doyle, TrusteeChristopher C. Doyle, Trustee
Charles T. DoyleTexas City, TX USA
Voting TrustDoyle Family Trust
Counted in Voting TrustEmployees'401-K Plan
Counted in Voting TrustCharles T. Doyle
Counted in Voting TrustMatthew T. Doyle
Counted in Voting TrustChritopher C. Doyle
Counted in Voting TrustPatrick F. Doyle
Citizen of United StatesShares:
436,20160,1 36
(60,136)
73,673(73,136)
10,782(L0,782)19,000
(19,000)
8,110(7,7O2)
6,743
11.94% Personal
14.63%
2.140lo Personal
3.77o/o Personal
1.610lo Personal
1.34% Personal
Counted in Voting TrustDavid R. Doyle
Counted in Voting TrustTOTAL
Lawrence J. Del Papa, Jr.Galveston, TX USA
Lawrence J. Del Papa, Jr.
Subtotal - Lawrence Del PapaLaura Del Papa Murray
TOTALCounted in Voting Trust
Olivia Estrada, + Estrada EstateHouston, TX USA
Counted in Voting Trust
Mitchell Chuoke, Jr.Texas City, TX USA
(6,468)
1,883
(1,534)
437,770
Citizen of United StatesShares: 32,530
20,00010,380
62,9L0
59,810L22,720
-LLL,O74
TOTAL LL,646
0.37% Personal
86.95% TOTAL
6.460/o Personal
3.97o/o Personal
2.060/o Trust, Child ren
12.49Vo
11.88o/o Personal
24.37o/o W*x-22.060/o
2.3Lo/o
Citizen of United StatesShares: 26,867
19,L92
7,6009,0707,155
-69,878
TOTAL O
5.34o/o Personal
3.81olo Family Trust
1.51% Wm. J.Estrada, II - Trus1.80% Vicki Estrada West
\.42o/o Olivia Estrada Trust
-13.BBo/o
0.00o/o
Citizen of United StatesShares: 6,238
436,20r-5,988
TOTAL 436,45L
!.24o/o Personal
86.64% Wxx-7.19o/o
86.690/o
Counted in Voting Trust
Texas Independent Bancshares, Inc, - 401-kShares
Dennis Bettison - TrusteeCounted in Voting Trust
TOTAL
73,6733,917
-77,5900
74.630/o
0.677o Personal
-15.41%
TEXAS INDEPENDENT BANCSHARES, INC.
Report ltem 4: lnsiders
(1) Name & Address(2) Principal Occupation - Other than with holding company(3a) Title & Position with holding company(3b) Title & Position with Subsidiaries(3c) Title & Position with Other Businesses(4a) Percentage owned of TIB(4b) Percentage owned of Subsidiaries(4c) Companies - greater than 25% ownership
(1) Charles T. DoyleTexas City, Texas
(2) N/A(3a) Chairman, Director(3b) Chairman Emeritus, Director - Texas First Bank
Director - Rust Ewing lnsuranceTrustee - TIB Voting Trust
(3c) Owner, Director - United States ManagementDirector - Q2 Corporation
(4a) 10,782 2.L4% Personal436,20L 86.64% Voting Trust
(4b) N/A(4c) United States Management - !OO%
(1) Matthew T. DoyleTexas City, Texas
(2) N/A(3a) Vice Chairman, Director(3b) Chairman, Director - Texas First Bank
Chairman, Director - Rust Ewing lnsurance
Trustee - TIB Voting TrustTrustee - Doyle Family Trust
(3c) Director - United States Management(4a) 19,000 3.77% Personal
436,201. 86.64% Voting Trust60,135 \L.94% Doyle Family Trust
(4b) N/A(4c) Doyle & Sons Cattle Company -
Cattle Ranch 28.33%Doyle Farms P/S 5O.O0%2 Bayous Ranch 5O.OO%
(1) Christopher C. DoyleTexas City, Texas
(2) Banking
(4b) N/A(4c) N/A
(3a) President/CEO, Director(3b) President/CEO, Director - Texas First Bank
Vice President, Director - Rust Ewing lnsuranceTrustee - TIB Voting TrustTrustee - Doyle Family Trust
(3c) Director - United States Management(4a) 8,110 7.61% Personal
436,201 86.64% Voting Trust60,136 Lt.94% Doyle Family Trust
(1) Mitchell Chuoke, Jr.Texas City, Texas
(21 Commercial Plumbing Contractor(3a) Director(3b) Director - Texas First Bank
Trustee - TIB Voting Trust(3c) N/A(4a) 6,238 1,.24% Personal
436,201 86.64% Voting Trust(4b) N/A(4c) Mitchell Chuoke Plumbing - LOO%
Mitchell Chuoke, Jr. Properties - 50%CUK Properties, LLC - 50%
A&S,lnc. -37.50%
(1) Gaddis P. WittjenLaMarque, Texas
(2) Property Management(3a) Director(3b) Director - Texas First Bdnk
Trustee - TIB Voting Trust(3c) N/A(4a) 18,000
436,201(4b) N/A(4c) B. Wittjen & Son - 50%
Cambridge Farms - 50%
Wynnewood Energy - 50%
358% Personal86.64% Voting Trust
Commercial PlumbingProperty Management
Property Management
Property Management
Property Management
Property ManagementProperty Management
(1) Texas lndependent Bancshares, lnc. Voting TrustTexas City, Texas
Trustees: Mitchell Chuoke, Jr., Gaddis P. WittjenCharles T. Doyle, Christopher C. Doyle, Matthew T. Doyle
(2) N/A(3a) N/A
(3b) N/A(3c) N/A(4a)
(4b) N/A(4c) N/A
32,53020,000
(4b) N/A(4c) Del Papa Distributing - 1O0%
Del Papa Holdings - !OO%L&L Realty - 50%
UD Holdings - 7OO%
436,20L 86.6% Voting Trust
(1) T.l.B. Employees' 401-k Profit Sharing PlanTexas City, Texas
Trustees: Mitchell Chuoke, Jr., Gadis P. Wittjen
Charles T. Doyle, Christopher C' Doyle, Matthew T. Doyle
(2) N/A(3a) N/A(3b) N/A(3c) N/A(4a) 73,673 14.63% Voting Trust(4b) N/A(4c) N/A
(1) Doyle Family TrustTexas City, Texas
Trustees: Christopher C. Doyle, Matthew T. Doyle
(2) N/A(3a) N/A(3b) N/A(3c) N/A(4a) 60,136 L7.94% Doyle Family Trust(4b) N/A(4c) N/A
(1) Larry Del Papa, Jr.Texas City, Texas
(2) Beer distributor(3a) Principal.Securities Holder(3b) N/A(3c) N/A(4a) 6.46% Personal
3.97% Bancshares Trust
Budweiser DistributorAircraftReal Estate
Florida Asset
(1) Olivia Ann EstradaHouston, Texas
(2) Homemaker(3a) Principalsecurities Holder
(3b) N/A(3c) N/A(4a) 534% Personal
3.8L% Family Trust, Trustee
L.42% Personal Trust, TrusteeN/A(4b) N/A(4c) N/A
ADVISORY DIRECTORS
Dennis R. Bettison(1) Galveston, Texas
Attorney(2) AdvisoryDirector, LegalCounsel(3a) Advisory Director, Legal Counsel - Texas First Bank(3b) N/A(3c) N/A(4a) 3,9L7 0.78% Personal
73,673 L4.63% TIB 401-K Plan, Trustee(4b) N/A(4c) DBA Realty Partnership .33.33%
BDAB Realty Partnership - 33.33%
Joseph Blackshear
(1) Galveston, Texas(2) lnsurance Broker(3a) Advisory Director(3b President, Director - Rust-Ewing lnsurance
N/A2,022 O.4O% Personal
N/A
N/A
(3c
David R. Doyle(1) Plano, Texas(2) CorporateFinancialManagement(3a) Advisory Director(3b) Advisory Director-Texas First Bank
Director - Rust-Ewing lnsurance(3c) N/A(4a) 1,883 O.37% Personal(4b) N/A(4c) N/A
(1) Patrick F. DoyleTexas City, Texas
(2) Attorney, Title Company Owner(3a) Advisory Director
26,86!19,L92
7,155
(4a
(4b
(4c)
a
(3b) Director - Rust-Ewing lnsurance(3c) Owner - see 4c below(4a) 6,743 L.34% Personal(4b) N/A(4c) DBA Realty Partnership - 33.33%
BDAB Realty Partnership -33.33o/o
Texas Title Realty Holdings, LLC - 100%Realty Tax Search, lnc. - 7OO%
Texas Title Holdings, LLC - LOO%Doyle Law Firm, PLLC - 7OO%
Prominent Title, LLC
Security Abstract & Title Company
Southland Title, LLC
lsland Financial Solutions, LLC
Real Estate
Real Estate
Title CompanyTitle Search Company
Title CompanyLaw Firm
Title Company
Title CompanyTitle CompanyAccounting Services
(1) Timothy R. O'BrienLeague City, Texas
l2') CFo - Texas First Bank(3a) CFO, Advisory Director(3b) CFO, Advisory Director - Texas City(3c) N/A(aa) N/A(4b) N/A(4c) N/A
(1) A. Pat Plaia, Jr. RETIRED lN 2017
(1) Catherine O. PotterTexas City, TX
12) Corporate Secretary Texas First BankiAal RAvisory Director, Corporate Secretary(3b) Advisory Director, Corporate Secretary - Texas First Bank(3c) N/A(4a) 1,150 O.23% Personal(4b) N/A(4c) N/A
Signature & Title
Chrisopher C. Doyle
President/chief Executive Off icer
Exhibit B
He lping Texa*s Build T*as
March 5, 2018
TO:
SUBJECT
Shareholders of Texas Independent Bancshares, Inc
Annual Meeting of the Shareholders
Thursday, March 22, 2018, 11:30 A.M.
Dear Fellow Shareholder:
We are pleased to invite you to attend the Thirry-Ninth Annual Meeting of our Corporation at 1 1 :30 A.M.
on Thursday, March 22,2018, at the Rust-Ewing Insurance Agency located at:
7900 Emmett F. Lowry ExpresswayTexas City, Texas 77591.
Attached are the Notice of Annual Meeting and a Proxy Statement. You are requested to complete theProxy Statement in accordance with the instructions and return it as soon as possible in the self-addressed.
stamped envelope. in order that we may be assured of a quorum for our Annual Meeting. Should youattend the meeting in person, the Proxy may be canceled, and you will be permitted to vote your shares inperson.
Enclosed are the financial statements as of December 3 I , 2017 . A copy of the audited financial statements
will be available at the meeting and will also be available to any shareholders at the TIB offices in TexasCity. If you wish to have a copy, please contact Kitty Potter at (409) 948-1990. Financial information willbe reviewed as a part of the Operations Report at the Annual Meeting.
Representatives from the accounting firm Briggs & Veselka Co., CPAs, will be available to answer anyquestions regarding the 2017 audit. You are free to contact our auditors at any time during business hours ifyou have any questions:
The federal tax return and the K-1s were completed by Herman & Sexton, P.C. If there are any questions inregards to your K-1, you may contact Tim O'Brien, CFO, at (409) 766-4314 or contact Don Herman or Tim
Sexton at Herman & Sexton, P.C.:
John Flatowicz, Partner
Lincoln McKinnon, Manager
Don Herman, Partner
Tim Sexton, Partner
(713) 3s3-r9r0(713) 366-8s2s
(281) 44s-1120(281) 44s-1120
(Continued on reverse side.)
jflatowicz@bvccpa.com
lmckinnon@bvccpa.com
don@hmsp.com
tim@hmspc.com
P.O. Box 334,3232 Palmer Highway, Texas City, Texas 77592-3344409-948-6577 * 281-280-9422
www.texasfirst.bank
Shareholders of Texas lndependent Bancshares, Inc.March 5,2018Page 2
During the year, the economy improved from the previous years and there is much more optimism aboutfurther growth in 2018. However, many of our communities and families were impacted by the floods ofHurricane Harvey. We are committed to the success of our communities and temporarily changed ourMission Statement to reflect that commitment, "Helping Texans Re-Build Texas."
Overall, the company had another outstanding year. The company earned $16,440,651 for 2017 versus$18,215,691. Adjusting for non-recuning items, the company earned in 2017, $16,369,727 versusprevious year of $14,056,506, an increase of $2,313,221 or 16.5oh increase in recurring net income.
Our outstanding staff and their hard work allowed the company to have another excellent year. Our staff,both at the Bank and Insurance Agency, continues to build upon the relationships we have with our clients.Exceeding our customers' expectations is Job No. l.
Our Galveston Stewart Road Banking Center was the recipient of the Chairman's Award during the annualEmployee Rally held earlier this year. The Stewart Road Banking Center was recognized as a result of theiroverall growth and profitability. Listed below are a few highlights on their accomplishments:
20L7 2076 5 Growth % Growth
Listed below are financial highlights for the year ending December 31,2017
20L7 2076Texas First BankTotal AssetsTotal DepositsTotal LoansTotal Stockholder's EquityNet lncomeTier 1 Capital to Average AssetsTier 1 Capital to Risk Weighted AssetsTotal Capital to Risk Weighted Assets
Loans
DepositsProfit Contribution
Rust. Ewing, Watt & Hanev, lnc.Total AssetsTotal Stockholder's EquityGross RevenuesNet lncome
62,977,94Ot34,054,750
2,530,560
L,067,L4L,125952,562,674568,4O5,720111,518,680
15,51L,229L0.22%
15.06%76.30%
6,L56,3705,046,4768,477,OOO
1,601,167
5L,375,734L32,970,32L
7,799,72L
987,21L,558879,196,551577,97t,667L04,626,806
74,05L,789
tO.2to/o
L5.35o/o
16.60%
6,443,0054,248,5328,643,2521,810,395
L,013,410,657875,423,49851L,971,667L32,O28,438
1.7,602,2061,084,4291,330,839
79,929,567
73,366,12356,434,053
6,891,8741,459,440
0.0L%-0.29o/o
-0.30%
(286,635)
797,944(166,2521(2O9,228)
74,688,L8668,036,44756,434,053
8,075,647
22.6%o.8%
LL0.9%
8.L%8.3%
77.0%
6.6%
L0.4%
o.L%-1.9%
-t.8%
-4.4%
L8.8%
-1.9%
-71-.6%
7.4%7.8%
tt.0%6.Lo/o
Variance % Variance
Texas lndependent Bancshares, lnc.(consolidated)Total Assets 1,088,098,843Total Deposits 943,459,945Total Loans 568,405,720Total Stockholder's Equity 140,104,085
(Continued on next page)
Shareholders of Texas Independent Bancshares, Inc.March 5, 2018Page 3
Texas lndependent Bancshares, lnc.(consolidated)2017 2016 S Variance % Variance
Net lncomeTier 1 Capital to Average AssetsTier 1 Capital to Risk Weighted AssetsTotal Capital to Risk Weighted Assets
Average Outstanding SharesEarnings per share (basic)
Evaluation per share
Charles T. DoyleChairman
CTD:MTD:CCD:csl
16,44O,651Lt.80%17.22%
78.43%
509,982
32.24360
Doyle
L8,215,69171s3%77.48o/o
78.72%
s06,16435.99
320
(L,775,04O)-o.13%
-0.26o/o
-0.29%
3,818.73(3.7s)
40
Christopher C. DoylePresident
-9.7%
-L.7%
-L.5%
-t.5%
o.8%-LO.4%
12.5%
For 2017, TIB distributed 56,220,928 to our shareholders, which represented approximately 50.0% oftaxable income. The Board generally distributes funds to our shareholders to cover their potential taxliability associated with TIB, a Subchapter S corporation under the IRS code.
You will find enclosed copies of the Minutes of our Annual Meeting held on April 20. 2017, and we ask youto review them carefully for any amendments or corrections prior to this year's meeting. Nominations tothe Board are posted at each banking facility, in accordance with our By-Laws. Mitchell Chuoke, Jr., isthe Director nominated for re-election, with Charles T. Doyle; Matthew T. Doyle; Gaddis P. Wittjen; and
Christopher C. Doyle continuing unexpired terms as Directors.
We encourage each of our shareholders and their spouses to join in the business session of our AnnualMeeting. Should you have any questions regarding our reports, please feel free to call us or submit them in
writing in advance of ourmeeting. Food and refreshments will be served. We look forward to seeing youat l1:30 a.m. on Thursday, March 22, at the Rust-Ewing Insurance Agency, 7900 Emmett F. LowryExpressway, Texas City, Texas.
As you recall, our shareholders elected to be taxed as a Subchapter S Corporation effective January 1,2014.
It is extremely important that we, as company and shareholders, continue the governance to maintain theSubchapter S status. To that end. we are mailing under separate cover to each shareholder a certification
statement and ask you please read carefully. sign. and return it promptly.
Sincerely yours,
qtuVice
Notice of Shareholders MeetingProxy Statement with self-addressed, stamped envelopeFinancial Statement - December 31,2017Minutes of the Annual Meeting of April 20,2017
Enclosures
March 31,2017
" NOTICE OF ANNUAL SHAREHOLDERS MEETING *TEXAS INDEPENDENT BANCSHARES, INC.
Notice is hereby given that the Annual Meeting of the Shareholders of TEXAS INDEPENDENTBANCSHARES, lNC., Texas City, Texas, will be held at the Texas First Bank - Hitchcock,8128 Highway6, Hitchcock, Texas, on Thursday, April 20,2017, at 11:00 A.M. for the election of Directors and thetransaction of such other business as may properly come before the meeting.
Below is a Proxy Statement which you are requested to please sign and return in the envelope provided. lnthe event that you are able to be present at the meeting and desire to vote in person, you may withdraw yourproxy and do so.
Respectfully,
CHARLES T. DOYLECHAIRMAN OF THE BOARD
_}<* PROXYSTATEMENT -
KNOW ALL MEN BY THESE PRESENTS that the undersigned Shareholder of TEXAS INDEPENDENTBANCSHARES, lNC., of Texas City, Texas, hereby constitutes and appoints CHARLES T. DOYLE or
the true and lawful attorney and proxy of the undersigned at theANNUAL MEETING OF TEXAS INDEPENDENT BANCSHARES, lNC., to be held at the Texas First Bank -Hitchcock,8128 Highway 6, Hitchcock, Texas, on Thursday, April 20,2017, at 11:00 A.M., and for andon behalf of the undersigned to vote on any question, proposition, or resolution, or any other matter or thingthat may come before said meeting, or any adjournment or adjournments thereof, according to the numberof shares of stock of said corporation which the undersigned would be entitled to vote if personally present,and the undersigned hereby gives and warrants unto said attorney and proxy full power of substitution andrevocation, thereby confirming all that said attorney and proxy shall do in the premise.
lNWlTNESSWHEREoF,lhavehereuntosetmyhandthisthe-dayof-,2017.
SIGNED IN THE PRESENCE OF: SIGNED:
WITNESS (Signature) SHAREHOLDER (Signature)
Shareholder's Name - Printed
Home Phone Num () /)
E-MailAddress:
Cell Phone Num
TEXAS !NDEPENDENT BANCSHARES, INC.
CONSOTIDATED BATANCE SH EET
DECEMBER 3L,2OL7 AND 2016
2017 20L6 S Variance %o VarianceASSETS
Cash and cash equivalents
Cash and due from bankslnterest-bearing deposits with banksFederal funds sold
TOTAL CASH AND CASH EQUIVALENTS
lnterest-bearing time deposits in other banks
lnvestments
Available-for-sale securities
Held-to-maturity securitiesTOTAL INVESTMENTS
Loans receivable
Allowance for loan lossesLOANS RECEIVABLE, NET
Accrued interest receivablePremises and equipment, netNonmarketable eq uity securities
Goodwilllntangibles, core deposit and other, netBank-owned life insurance
Other real estate ownedOther assets
TOTAL ASSETS
LIABILITIES AND STOCKHOLDERS' EQU ITY
Deposits
No ninte rest-bea ri ng
I nterest-bea ring
TOTAL DEPOSITS
Accrued interest payable
Notes payable
Other liabilitiesTOTAL LIABILITIES
Stockholders'equityCommon stock
Additional paid-in capitalRetained earnings
Accumulated other comprehensive income (loss)
Treasury stock, at costTOTAL STOCKHOLDERS. EQUITY
S 1,088,098,843 S 1,013,4Lo,6s7 S 74,688,186
S 32,134,005
48,O79,47L
500,000
28,735,394
35,666,447
2,098,000
S g,:gs,orrL2,353,024(1,s98,000)
14,153,63s
100,000
L7,t93,377(12,634,9s8)
) r7.8%34.6%
-76.2%
80,653,476
200,000
72,442,794
3L3,297,tO0
66,499,841
100,000
55,249,4L7
32s,932,Os8
2L3%
too.oo/.
3L.L%
-3.9%
385,739,894
568,405,720(8,7s6,168)
38t,187,475
sLL,97t,667(8,ss6,101)
4,558,419
56,434,053(200,067)
7.2%
Lt.0%2.3%
559,649,552
4,80s,104
20,673,438
8,181,075
70,674,543
696,680
72,690,t8t2,069,807
2,065,093
503,415,566
4,274,769
2t,t73,OO87,589,798
to,699,542437,722
11,998,648
3,449,240
2,59L,O48
s6,233,986 tt.2%
L2.4%
-2.4%
7.8%
-0.2%
59.2%
5.8%
-40.o%
-20.3%
s30,33s(499,s70)
59L,277
|\24,999\
258,958
691,533(t,379,4331
(s2s,9ss)
7.4%
S 383,ss2,828559,907,LLt
S 329,999,ss054s,423,948
S s3,ss3,27814,483,t69
76.2%
943,459,945
99,259
4,435,554
77,972
69,6L25,877,L37
21,287(6s,612)
(1,37s,s83)
7.8%
27.3%
-too.o%
-23.7%
875,423,498 68,036,447
947,994,758
584,75s
878,854
L52,764,854
4,329,L48(18,4s3,s26)
88L,382,2L9
584,7s5
569,627
L43,260,87t3,048,503
(1s,435,318)
66,612,539
309,227
9,503,983
L,280,645(3,018,208)
7.60/.
o.o%
s4.3%
6.6%
42.O%
t9.6%
140,104,085
S 1,088,098,843
132,O28,438
S 1,013,410,6s7
8,075,647
S 74,688,186
6.r%
7.4%TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
TEXAS !NDEPENDENT BANCSHARES, INC.
CONSOLIDATED STATEMENT OF INCOME
DECEMBER 3 2017 AND 2015
lnterest incomeLoans, including fees
Debt securities:
Taxable
Tax-exempt
lnterest-beari nB deposits
Federal funds sold
Dividend income
Other interestTotal interest income
lnterest expenseDeposit accounts
Federal funds purchased
Notes payable
Total interest expense
Net interest incomeProvision for loan lossesNet interest income afterprovision for loan losses
Noninterest incomeFees and service charges
Galn on sale of other real estate ownedlnsurance commissions
Other noninterest incomeTotal noninterest income
Noninterest expenseSalaries and related expenses
Profit sharing and other employee benefitsOccupancy and premises expense, netOther operating expenseTotal noninterest expense
Net lncome - Recurring
Non-Recurring lncome
Dividend income (prioryears)
Gain on sale of premises
Gain on sale of securities - 2017 (net)
Total Non-Recurring lncome
Net lncome
2017 2016 $ Variance % Variance
30,826,27t
3p]-g,9343,941,69s
435,770
33,389
402,778
27,759,548
4,382,446
3,954,353
186,158
27,295
178,688
r,494
3,066,723 tt.o%
-LO.6%
-o.3%
L34.1/o
22.3%
L25.4%
LOO.O%
(462,sr2],
(12,658)
249,6126,O94
224,O90(1.,494)
39,559,837
L,674,549
LO,479
2,252
36,489,982
1,529,059
2,OLO
10,979
3,069,8ss
145,490
8,469(8,727],
8.4%
9.5%
42L.3%
-79.s%
t,687,280 t,542,O48 145,232 9.4%
37,872,557
965,000
34,947,934
593,257
2,924,623
371,743
8.4%
62.7%
36,907,557
6,190,618
206,L92
8,463,68s
994,3L7
34,354,677
6,457,7L8
93,845
8,762,379
407,36s
2,552,880
(267,1OO)
tLz,347(298,694)
s86,9s2
7.4%
-4.I%
LLg.7%
-3.4%
L44.t%
t5,854,8t2
t7,446,4064,998,148
4,450,939
9,497,L49
15,72L,307
17,030,086
4,628,248
4,528,9829,832,162
133,505
4L6,320369,900(78,043)
(33s,013)
0.8%
2.4%
8.O%
-t.7%-3.4%
36,392,642 36,0L9,478 373,t64 L.O%
5 t6,369,t27 S 140s6,506 S 2,3t2,22t t6.s%
31,355
39,s69
367,5t4L,76r,L352,030,536
(367,514)
(L,729,780)
|lr,99O,9671
-too.o%
-98.2%
-98.L%
70,924
I 16,440,6s1
4,159,185
t8,2t5,69t
(4,088,261)
s (1,77s,040)$
-98.3%
-9.7%
ETTS sm$snE$trp,ANNUAL MEETING OF THE SHAREHOLDERS
APRIL 20,2017
The 38'hAnnual Meeting ofthe Shareholders of Texas Independent Bancshares, Inc. (TIB), was convened at17:25 a.m. on Thursday, April 20,2017 , at the Texas First Bank - Hitchcock banking center, 8128 Highway6, Hitchcock, Texas 77563. Chairman Charles T. Doyle introduced himselt welcomed everyone, and calledthe meeting to order. He apologized for the late start of the meeting which was due to the concludingcelebration of the 55'h Anniversary of Texas First Bank - Hitchcock which had taken place at l0:00 a.m.
The invocation was given by Dickey Campbell. Chairman Doyle announced that he would be serving asChairman and Cathy Logan would be serving as Secretary for purposes of this meeting.
Chairman Doyle thanked the employees who helped to make this meeting happen, including Kathy Cruse,Shannon Belluomini, Hugo Garate, and their committee, and also recognized Corinna Bahr for puttingtogether the slide show and Renee Rockers for checking in the shareholders.
Chairman Doyle confirmed that the Notices of Annual Meeting of the Shareholders were duly mailed to allshareholders of record on April 4.2017, along with copies of the Minutes of the Annual ShareholdersMeeting held on March 23 ,20161' the proxy statement; the Audited Financial Statement as of December 3 1 ,2016; and the letter to the shareholders dated March 31,2017 . Upon motion duly made by Mitchell Chuoke,Jr., seconded by Dennis Bettison, and unanimously carried, the Shareholders accepted the Affidavit ofNoticeof Annual Meeting of the Shareholders [Exhibit "A"].
Renee Rockers reported that there were 479.646 shares, constituting 93.099 percent ofthe shares representedby proxy/presence out of a possible 515,199 shares issued and outstanding, with 69,556 shares held asTreasury Stock. Upon motion duly made by Dennis Bettison, seconded by Carlos Garza, and unanimouslycarried, the Report on the Certified Alphabetical List of Shareholders was accepted as presented. ChairmanDoyle declared that the proxies were filed with the Secretary, legal notice had been duly given, a quorum waspresent, and the meeting was lawfully convened to transact business.
Upon motion duly made by Carlos Pefla, seconded by Carlos Carza. and unanimously carried, NormanFranzke, Lee A. Sander, and Andrea Founds Maceo were elected to serve as Inspectors of the Election. TheOath of the Inspectors was administered, as shown in the attached Exhibit "B.'o
Upon motion duly made by Patrick Doyle, seconded by Gaddis Wittjen, and unanimously carried, theMinutes of the Annual Meeting of the Shareholders of Texas Independent Bancshares, Inc., held on March23,2016, were approved as presented.
Chairman Doyle explained the system of governance whereby the holding company, Texas IndependentBancshares, Inc., has five Directors. The three inside Directors are Charles T. Doyle, Matthew T. Doyle, andChristopher C. Doyle; and the two independent Directors are Mitchell Chuoke, Jr.. and Gaddis P. Wittjen.Charles T. Doyle was the Director standing for re-election for a four-year term, with the remaining Directorshaving unexpired terms - Mitchell Chuoke, Jr., one year; Matthew T. Doyle, two years; Gaddis P. Wittjen.three years; and Christopher C. Doyle having a permanent position on the Board as President and CEO.
Requests for nominations had been properly posted in the lobbies of the Banks, and no shareholder hadsubmitted a written nomination as called for in the bylaws to fill the open seat. Upon motion duly made byDennis Bettison, seconded by Carlos Garza, and unanimously carried, Charles T. Doyle was nominated for re-election to serve a'four-year term on the Board of Directors of TIB. President Christopher Doyle called forany other nominations to fill the position which Charles T. Doyle had held for the previous four years, andthere were none. Upon motion duly made by Dennis Bettison, seconded by Lee Ardell, and unanimouslycarried, Charles T. Doyle was re-elected to serve a four-year term on the Board of Directors of TIB.
Chairman Doyle reported that 2016had been a record year, with the employees receiving an extra bonus forreaching their goal. Distributions to shareholders had also increased from the previous year. In 2014,distributions were $5.5 million; in 2015, $5.2 million; and, in 2016,$6.2 million. He noted that Rust-Ewing
TlBAnnuafshseholde.sMeenng04-20-20t , 'age I of 4
HEInsurance Agency, under the leadership of Joe Blackshear, and the SBA Department, under the leadership ofMatt Crable, played a large role in the record earnings for 2016. Vining-Sparks had completed theindependent appraisal. The value in2016 was $275.00 per share, and the new valuation for TIB stock in 2017was $320.00 per share, one of the largest increases in value per share TIB has ever experienced. ChairmanDoyle stated that representatives from the independent appraisal firm of Briggs & Veselka were present toanswer any questions the shareholders might have. Additionally, Don Herman and Tim Sexton with Herman& Sexton, CPA's, were present to answer any questions about the financial statement. Any shareholderdesiring to review the financial statement was directed to do so by contacting Kitty Potter at the Texas Citybanking center.
Chairman Doyle reminded the shareholders that each of them had received a paper to sign, certifying that thatthey still met the qualifications to be a Subchapter S shareholder, and he asked the shareholders to pleasereturn the executed certification to the TIB offices as soon as possible.
Upon motion duly made by Carlos Pefla, seconded by Mitchell Chuoke, Jr., and unanimously carried, theactions of the Directors and Officers during 2016 were approved.
At this time Chairman Doyle turned the remainder of the meeting over to President/CEO Christopher Doyle.Chris introduced CFO Timothy O'Brien for the financial presentation.
Tim O'Brien stated that the holding company had reached $ I .0 I 3 billion in assets. Bank deposits were $876million at the end of the year, with moderate growth of 3.4 percent. The Bank remained under $l billion at$971 million in assets. Atthe Bank loans had a 10.4 percent increase, while investments declined 3.7 percent.At the holding company Shareholders' Equity was $ I32 million, an increase of 10.6 percent. Net income was$18.2 million, a 73.7 percent increase over 2015. He stated that emphasis had been placed on maintainingnoninterest expenses, which had decreased 1.4 percent from 20 I 5.
As Chairman Doyle had indicated, $6.2 million had been distributed to shareholders in the past year. Heexplained that distributions are made in January for fourth quarter income of the previous year, but the K- Ithe shareholders receive is actually based on a true calendar year of distributions from January throughDecember.
Mr. O'Brien reviewed the history of growth, showing the investments had decreased, while loans, deposits,and assets had increased in 2016. He stated that three major categories make up the balance sheets -investments, loans, and deposits. TIB has been growing its investments portfolio and has shifted its focusfrom taxable securities to non-taxable securities over the last two years and will continue to do so in 2016.The loan portfolio has also been growing, and Management would like to continue to grow it at a faster ratethan the investment portfolio. Loan demand was much better in the second half of 2016, and he expected thatto continue in20l7. Loan growth is projected to be $36.2 million or 6.7Yo growth. Deposits continue to grow,and core deposits are increasing.
TIB continues to have strong earnings as it organically grows its capital. The Board intends to distribute toshareholders the tax liability they will incur as a result of the Subchapter S status. The capital ratio remainsstrong, and TIB is considered to be well capitalized.
He reviewed the history of earnings. ln2013 earnings were a little over $20 per share, and20l6 earnings were$35.99 per share. The book value for 20 I 6 was $259.98 per share, and the appraised value was $320.00 pershare. Appraised value compared to book value represented about 16.2 percent premium for the market value.The appraised value increased $45 per share over the prior year.
Mr. O'Brien remarked that TIB had been with the audit firm of Whitney Penn and its predecessors for manyyears, but had taken bids for new audit firms and additional expertise in the local market. Briggs & VeselkaCo., CPAs, had been awarded a three-year contract and had performed the audit for 2016. He introducedKevin Chesser, Audit Shareholder, and Lincoln McKinnon, the manager onsite who performed the audit,
TlBAnnuatshdeholdersMeetrngo4-2o-2ot, Oage 2 of 4
EXIS BIIffiIilRESrc,along with Dan St. Clair, Audit Director. from Briggs & Veselka. Mr. Chesser stated it was a pleasure to beworking with TIB and offered to answer any questions the shareholders might have.
Next, Chris Doyle introduced the Directors who chair the Committees of the Bank: Lee Ardell,Asset/Liability & Investment Committee; Mitchell Chuoke, Jr., Loan & Discount Committee; Carlos Pefra,Regulatory Compliance, Risk Management, and Strategic Planning Committee; and Gaddis P. Wittjen, AuditCommittee. He thanked all of the Directors for their hard work.
Chris stated that TIB is looking to grow its footprint through acquisition. The Deer Park location had beenconsolidated with the Pasadena location which was only two miles away, and the Deer Park building had beensold, realizing real cost savings with no loss of business.
Next, Chris Doyle listed the Directors of Texas First Bank, asking those who were present to stand: LeeArdell; Dennis Bettison (Advisory); Michael G. Burkhart (Advisory); Dickey Campbell (Advisory); MitchellChuoke, Jr.; David A. Daspit (Advisory); Charles T. Doyle; Christopher C. Doyle; David R. Doyle(Advisory); Matthew T. Doyle; Carlos Garza; Travis Hardwick; Stephen Holmes; Warren T. Longmire, Jr..M.D.; Timothy R. O'Brien (Advisory); Carlos Pefla; Catherine O. Potter (Advisory); and Gaddis P. Wittjen.The TIB Advisory Directors were also introduced: Dennis Bettison; Joseph Blackshear, Jr.; David R. Doyle;Patrick F. Doyle; Timothy R. O'Brien; and Catherine O. Potter.
Next, he introduced the Texas First Bank Executive Team members who meet monthly to discuss strategy andhave discussions on problems, challenges, and opportunities every month:Tim O'Brien. Kitty Potter, DickeyCampbell, David Daspit, Mike Burkhart, Kenneth Holbrook, Matt Crable, Sam McGee. Robin McDougald,and Corinna Bahr.
Chris introduced the Rust-Ewing employees present: Joe Blackshear, Tommy Price, and Roy Starr. Hethanked Rust-Ewing for their hard work and contributions to the eamings every year.
Chris thanked Corinna Bahr and her committee for developing the new website, www.texasfirst.bank. Itincludes local things, has a new look. and is mobile friendly. There is a lot of contact information available onthe new website.
The core deposits are well above peer, and the Bank has introduced new accounts and is doing more thingsonline. The millennials love accounts that reward them for using debit cards, not checks, and things of thatnature, so the Bank is attracting a different group with the new products and just introduced Kasasa accountswhich pay cash back, depending on the balance in the account, and also refund ATM fees nationwide.
Additionally, the Bank has formed a committee made up of millennial employees. That committee has comeup with ten really important objectives for bank customers and employees, and Management will bereviewing their ideas and focusing on attracting and keeping the next generation of customers.
Chris briefly discussed some ofthe Bank's efforts to participate in FinTech endeavors, such as the partnershipwith Credit Novo for the purpose of offering consumer loans from $5.000 to $20,000 all done through anonline application. Additionally, the Bank was learning about other methods to evaluate borrowers other thana credit score, such as work history, how they pay their bills, and what they do on Facebook.
He mentioned that cybersecurity was a number one priority for the Bank, since the amount of money whichcould be lost due to cyberfraud is enormous. Sam McGee and his team work hard every day to protect theBank and its customer information and to keep the system secure.
Another part of the strategic plan is better communication with the employees. To that end, a new intranet sitewas launched for Bank and Insurance Agency employees only, to give them better access to the informationthey need to assist the customers and their fellow employees.
TlBAnnuAlshareholdersMeetingo4-2o-2ot '
'age 3 ol 4
At this point, Chris Doyle presented a pin to his father, Charles Doyle, to commemorate his 45-yearanniversary of employment with Texas First Bank.
Chairman Doyle thanked Chris for the pin and thanked everyone for their attendance at this meeting. Therebeing no further business to come before the Shareholders at this time, upon motion duly made by MattDoyle, seconded by Charles Doyle, and unanimously carried, the meeting was adjoumed at 12:10 p.m.
Charles T. Doyle, Chairman
Cathy S. Logan, Acting Secretary
TIB Annual Shseholders Meaing 04-20-201?Page 4 of 4
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