2015 ANNUAL REPORT
To our
SHAREHOLDERS and CUSTOMERS
Your Happy company had a chockfull, year-long party in 2015, celebrating the 25th
Anniversary of Happy Bancshares, Inc. Both Happy State Bank & Trust Co. and its
parent company, Happy Bancshares, Inc. (hereafter, HBI) had a phenomenal year, and
note that this report will focus on HBI’s performance. The little bank in Happy, Texas,
had just over $10 million total assets back when we bought it and yet last year alone, the
company grew $282 million, or almost 11%, to $2.86 billion. Net income grew to a
record $24.7 million, up 31.3% in one year. Now, that’s how to celebrate an anniversary.
And I am confident we stand poised for another great year in 2016.
With nearly 650 employees in 34 offices and 25 communities, we are now serving over 83,000 Happy friends and
neighbors. Highlights from this past year for your company include:
✯ The strengthening of our capital base with a successful $51 million stock offering and the
successful issuance of $72.5 million in subordinated debt.
✯ Deposits grew $113 million to $2.37 billion, up 5.0%.
✯ Loans grew $157 million, or 8.1%, to $2.09 billion.
✯ We opened our Fort Worth office at I-30 and Ridgmar.
✯ We acquired a new banking office in Shamrock, Texas.
✯ We were named one of the “Top 50 Banks to Work for in the USA” by American Banker.
(That’s two years in a row!)
✯ HBI’s return on average assets was 0.92% (the ROA of the Bank was at 1.02%).
✯ Earnings per share increased 25.2% to $1.74.
✯ The HBI stock valuation as of year-end increased 18.5% to $32.00 a share.
We are looking for and chasing new expansion opportunities. We plan to continue strengthening our presence in the
Panhandle. We also are looking to expand into other metro markets, as we have done in Lubbock, Abilene, Dallas, and
Fort Worth. We take our responsibility to our communities very seriously and plan to open at least two branches this
year in low to moderate income areas. We remain committed to our current markets and are very excited about the
opening of our new four-story building in Lubbock within the next three months.
Everyone is aware of the downturn in the oil & gas industry. Excepting those problems, the economies in our markets
remain strong. Our energy related loans make up 6% of our total loans and we believe they do not pose a threat to
earnings. Earnings last year were driven by the quantity and quality of new loans, and we expect the loan growth to
continue in 2016. Our optimism is tempered a bit because of lower commodity prices in energy and agriculture sectors;
that’s just simply part of the economic cycle and we’ve been here before.
Many of you told me you enjoyed (or are enjoying) Sam Silverstein’s book, “Non-Negotiable: The Story of Happy
State Bank & The Power of Accountability”. I think Sam did a great job of revealing our “secret sauce for success”. I
believe one can break down our success to two points: (1) I’m surrounded by a great team of bankers, directors and
stockholders, and (2) We lean daily on God’s direction and wisdom in the decisions we make. I remain excited and
honored that I get to lead this company. I know 2016 is going to be a great year. Thank you for investing in us. Thank
you for banking with us. Thank you for your trust. God Bless!
Sincerely,
J. Pat Hickman
Chairman and CEO
$3,000,000
HBI HISTORIC GROWTH
(dollars in thousands)
‘90
‘98
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
‘91
‘92
‘93
‘94
‘95
‘96
‘97
HBI HISTORIC EARNINGS
‘99
‘00
‘01
‘03
‘02
‘04
‘05
‘06 ‘07
‘08
‘10
‘09
‘12
‘11
‘14
‘13
‘15
(dollars in millions)
$26
$24.66
$24
$22
$20
18.79
$18
16.21
$16
15.08
$14
$12
$8
6.80
$6
6.32
4.38
$4
2.79
$2
$0
11.17
9.97
$10
‘90
‘91
‘92
‘93
‘94
1.35
1.15
33¢
05¢
‘95
‘96
‘97
‘98
‘99
‘00
‘01
‘02
‘03
‘04
TOTAL DEPOSIT PORTFOLIO
‘05
‘06 ‘07
‘09
‘10
2%
‘12
‘13
‘14
‘15
Agriculture
13%
Commercial & Industrial
Interest Bearing Transaction
23%
26%
31%
‘11
TOTAL LOAN PORTFOLIO
Consumer
Money Market & Savings
‘08
Residential Real Estate
Jumbo Time
5%
15%
Construction & Land
10%
Time Under $250
Non Interest Bearing
Transaction
11%
Commercial Real Estate
37%
27%
As of December 31
HAPPY BANCSHARES INC.
Statement of Condition
BALANCE SHEET
(Dollars in thousands)
ASSETS
Cash & due from banks
Investments
Loans
Fixed assets
Other assets
TOTAL ASSETS
LIABILITIES
Deposits
Other liabilities
TOTAL LIABILITIES
CAPITAL
Preferred stock
Common stock
Capital surplus
Retained earnings
Accumulated other comprehensive income
Noncontrolling interest in subsidiary
TOTAL CAPITAL
TOTAL LIABILITIES
& EQUITY CAPITAL
INCOME STATEMENT
(Dollars in thousands)
NET INTEREST INCOME
Interest income
Interest expense
Provision for loan losses
NONINTEREST INCOME
Service charges
Other noninterest income
NONINTEREST EXPENSE
Salaries and employee benefits
Occupancy and equipment expense, net
Data processing
Other
Net Income Before Tax
Income Tax
NET INCOME
2013
$
2014
66,414
562,367
1,601,849
83,874
131,364
2,445,868
$
65,048
382,951
1,909,580
93,136
124,322
2,575,037
$
2015
Change from
2014 to 2015
73,447
476,045
2,065,943
96,773
144,751
2,856,959
13%
24%
8%
4%
16%
11%
2,141,228
65,710
2,206,938
2,252,389
66,722
2,319,111
2,365,880
198,335
2,564,215
5%
197%
11%
31,929
13,146
112,446
81,261
(3,966)
4,114
238,930
31,929
13,467
108,244
99,651
2,557
78
255,926
15,269
149,728
124,033
3,636
78
292,744
-100%
13%
38%
24%
42%
0%
14%
2,575,037
$ 2,856,959
11%
2014
2015
Change from
2014 to 2015
101,431
7,743
93,688
3,650
10%
32%
8%
-55%
$ 2,445,868
$
2013
$ 77,628
6,183
71,445
3,950
$
92,498
5,855
86,643
8,117
$
12,128
16,573
28,701
12,803
16,114
28,917
13,319
16,125
29,444
4%
0%
2%
35,883
12,713
5,572
20,258
74,426
21,770
5,557
$ 16,213
42,508
12,375
5,801
21,563
82,247
25,196
6,408
$ 18,788
45,769
12,971
6,598
20,487
85,825
33,657
8,997
$ 24,660
8%
5%
14%
-5%
4%
34%
40%
31%
D IR ECTO RS & O FFICERS
Happy Bancshares Inc.
DIRECTORS
Tom L. Burdett
J. Pat Hickman
Mike H. Kuhlman
Frank O. Marrs
Drayton McLane Jr.
Bailey Peyton
Brian Sims
Trent Sisemore
Happy State Bank
DIRECTORS
Bobby W. Barker
George D. Briant
Matthew Bumstead
Tom L. Burdett
Rocky Farrar
J. Pat Hickman
Mike H. Kuhlman
Drayton McLane III
Bailey Peyton
J. Brian Sims, M.D.
Trent Sisemore
Brian L. Vincent
Linda L. West
Happy State Bank
ADVISORS
David Seim
Audit & Compliance
Connie Ratliff
Marci Willis
Linda Crank
Assistant Vice President
Jo Hinds
Assistant Vice President
Elaine Lee
Bank Officer
Ian Currie
Bank Officer
Denise Farmer
Bank Officer
Kim Mauldin
Bank Officer
Eric Vigil
Bank Officer
Daniel Stuart
Bank Officer
Bobby Gregg
Bank Officer
Executive Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Vice President
Vice President
Vice President
Vice President
Assistant Vice President
Bank Officer
David Jones
General Counsel
Facilities
Randy Crawford
Vice President
Human Resources
Renee McNeely
Debbie Gray
Senior Vice President
Vice President
Kraig Knox
Vice President
Gary Sefton
Vice President
Vice President
Assistant Vice President
Jessie Castillo
Assistant Vice President
David Norris
David Melear
Gary Wells
Mark Murray
Micki Boyle
Joe Cowden
Senior Banking Officer
Senior Banking Officer
Executive Assistant
Kim Mullane
Executive Assistant
Assistant Vice President
Assistant Vice President
IT Officer
Kendall Hunt
Network Officer
Cathy Tate
Andrew Jones
Mari Daniel
Adam Laughlin
Executive Assistant
Project Officer
Bank Officer
IT Officer
Support Services
Accounting
Eric Alexander
Database Officer
Jeff Peatrowsky
Ross Glenn
Executive Vice President
Senior Vice President
Misde Shillings
Vice President
Mary Beth Bjork
Bank Officer
JD Morrison
Kim Stover
Senior Vice President
Marketing Officer
Mortgage Lending
Missy Villarreal
Senior Vice President
Monica Aragon
Vice President - Canyon
Kristin Mendez
Greg Houlette
Senior Vice President
Tonya Ingram
Information Technology
David McCullough
Ryan Atkins
Jennifer Lang
Sarah Green
Lonnie Granado
Matthew Smith
Senior Vice President
Holly Cardenas
Senior Vice President
Kayla Carpenter
Senior Vice President
Michael Blankenship
Matt Murdy
EVP & Chief Operating Officer
Gary Hinders
Executive Vice President
Matt Baggs
Mikel Williamson
Brian Barrett
Alan VanOngevalle
Rachel Sarine
Bank Officer
Senior Vice President
President
Charlotte Mullican
Marketing
Cari Roach
Richard Johnson
Administration
J. Pat Hickman
Chairman and CEO
Vice President
Ty O’Kelly
Loan Administration
Jim Bryan
Executive Vice President - Credit
Executive Vice President
Benny Teafatiller
Executive Vice President - Lending
Dianne Monroe
Senior Vice President
Andy Cash
Vice President
Nicole Houle
Vice President
Angela Shafer
Vice President
Vice President
Vice President
Donna Donnell
Assistant Vice President
Cindy Hanson
Assistant Vice President
Patti Mittelstet
Assistant Vice President
Donna Cooper
Mortgage Officer
Heather Schrader
Mortgage Officer
Michelle Willis
Mortgage Officer
Operations
David Weiner
Senior Vice President
Kelly Lindley
Senior Vice President
Cassie Ashford
Vice President
Rian Clinton
Vice President
Randy Morris
Vice President
Judy Riske
Vice President
Terri Fry
Assistant Vice President
Colby Gatlin
Assistant Vice President
Chris Powell
Assistant Vice President
Sherry States
Assistant Vice President
Lourdes Aranda
Bank Officer
Jared Blake
Bank Officer
Kira Kunkel
Bank Officer
Lisa Sudbrink
Bank Officer
Training
Chancy Via
Jeff Irwin
Leslie Chisholm
Marianne McCoy
Senior Vice President
Mike Sluder
Melissa Curtis
Ryan Monroe
Senior Vice President
David Tarver
Stacie Smith
Assistant Vice President
Erin Viermann
Chrisy Thomason
Trust Services
Joby Mills
Chris Castle
Vice President
Assistant Vice President
Senior Vice President
Chris Klemme
Senior Vice President - Dallas
Bryan Limmer
Senior Vice President - Lubbock
Terry Wright
Senior Trust Officer
Eric Barbee
Vice President - Lubbock
Buffy Haden
Vice President
Kathy McKaskle
Vice President
Kevin Rider
Vice President
Lupita Rosales
Vice President
Senior Vice President
Senior Vice President
Vice President
Vice President
Vice President
Vice President
Assistant Vice President
Jason Reep
Dalhart
Salvador Gonzalez
Christy Heuston
Nemo Rodriguez
Vice President
Assistant Vice President
Shelly Kearns
Assistant Vice President
Matthew Tavern
Assistant Vice President
Shane Watson
President
Bank Officer
Dallas Metro
Scott Lewis
Market President
Staci Scott
Addison
Lisa Clawson
Mason Reinbold
Chris Jamison
Assistant Vice President
Bank Officer
President
Bank Officer
Senior Vice President
Bell
Courtney Evans
Senior Vice President
Kenneth Maynard
Kyle Whisman
Alisa Villyard
Assistant Vice President
Senior Vice President
Todd Wetsel
Coulter
Debbie Davis
Vice President
Vice President
Vice President
Terri Wright
Vice President
GoldStar Protective
Services
Marvin Daniels
Vice President
Happy Investment
Services
Beverly Gaines
Senior Vice President
Jon Burnett
Senior Vice President – Soncy
Greg Brown
Senior Vice President
Chad Carlile
Vice President – Lubbock
Cyan Batchelor
Bank Officer - Lubbock
Sandi Brandt
Bank Officer
Abilene
Scotty W. Lindley
Market President
Scott Jones
Senior Vice President
Assistant Vice President
Express
Bill Latimer
Assistant Vice President
Georgia
Valerie de la Fuente
Assistant Vice President
Soncy
Scott Martin
President
Steve Seabourn
Senior Vice President
Geoff Phemister
Vice President
Leslie Otwell
Assistant Vice President
Stacy Armstrong
Bank Officer
Tascosa
Jennifer Currie
Assistant Vice President
Teckla
Lisa Kirkwood
Steve Rodriguez
Bank Officer
Annette Anders
Western
Debbie Loyless
Senior Vice President
Vice President
Janet McKeehan
Bank Officer
Assistant Vice President
Anthony Sandoval
Assistant Vice President
Lea Beaty
Bank Officer
Lyn Rosario
Bank Officer
Amarillo
Steve Bowen
Market President
Downtown
Rusty Conway
Senior Vice President
Ryan Evans
Senior Vice President
Borger
Mike Amos
President
Jackie Whatley
Assistant Vice President
Canadian
Ronda Bartlett
President
Tanya Cowgill
Cheryl Johnson
Vice President
Tammee Reeves
Bank Officer
Allen
Hunter Lord
Senior Vice President
Marco Navarro
Vice President
JoAnn Dowling
Assistant Vice President
Ariel Gunn
Bank Officer
Jody Hervey
Bank Officer
Rebecca Smith
Bank Officer
Fort Worth
Robert Gottlich
Market President
Mike Monroe
Senior Vice President
Carol Langford
Vice President
Travis Atwood
Assistant Vice President
Cade Carpenter
Assistant Vice President
Christie Johnson
Assistant Vice President
Stephanie Martin
Assistant Vice President
Max Price
Bank Officer
Ryan Vance
Bank Officer
Dumas
Alvia Calvert
President
Teresa Chastain
Senior Vice President
Mark Hanbury
Mandi Willis
Cheryl Hohertz
Donna Nelson
Senior Vice President
Vice President
Vice President
Bank Officer
Canyon
David Hutson
Bank Officer
President
Crysta Stallwitz
Floydada
Robbie Hilton
Assistant Vice President
Happy
Judy Shipman
President
Hereford
Tamara Vogel
President
Higgins
Trish Baker
Assistant Vice President
Lockney
Monty Teeter
Vice President
Yara Poole
Bank Officer
Lubbock
David Seim
Market Chairman
Bud Holmes
Market President
Jay House
Senior Vice President
Mike Jackson
Senior Vice President
Sara Lackey
Senior Vice President
Brad Petty
Senior Vice President
Peter Smith
Senior Vice President
Trey Weaver
Senior Vice President
Jennifer Bledsoe
Vice President
Craig Wells
Vice President
Geni Arndt
Assistant Vice President
Jessica Terrell
Assistant Vice President
Leah Cleavinger
Bank Officer
Jarred McNeill
Bank Officer
Loan Review
Kim Timmons
Senior Vice President
Lauren Maclaskey
Vice President
Bryan Reaves
Bank Officer
Olton
Ernie Gandy
President
Gladys Harper
Assistant Vice President
Jimma Bradley
Bank Officer
Pampa
Alan Eubank
President
Jolita Sells
Vice President
Kay West
Assistant Vice President
Erica Guzman
Assistant Vice President
Misty Auwen
Bank Officer
Panhandle
Brady Shadid
President
Plainview
Willis McCutcheon
President
Kay Ashmore
Vice President
Brandon Harrison
Assistant Vice President
Brent Falkenberg
Bank Officer
Nancy Stukey
Bank Officer
Shamrock
Kelly Livingston
• M I S S I O N S TAT E M E N T •
Work hard, have fun, make money,
while providing outstanding customer service
and honoring the Golden Rule.
President
Ann Brown
Bank Officer
Sae McAllister
Bank Officer
Silverton
Kyle Fuston
President
Beverly Minyard
Assistant Vice President
Stratford
Doak Crabtree
President
Trisha Keener
Assistant Vice President
Sunray
Lanny Crow
O Named one of the Best 50 Banks in the nation to work for in 2015.
(A project by American Banker and Best Companies Group).
President
Texline
Salvador Gonzalez
President
O Ranked 3rd Largest Farm Lender in Texas and 35th in the USA
by dollar volume. (Source FDIC Data).
Gayle Koehn
Bank Officer
GoldStar Trust Co.
John Johnson
President
David Schnierle
O Recipient of the “Torch Award for Marketplace Ethics”
by The Better Business Bureau in the Texas Panhandle.
Senior Vice President
Jeff Worley
Senior Vice President
Daisy Balderaz
Vice President
Rhonda Cox
Vice President
O Awarded the “Rising Star Award” for the West Texas District Office
by the U.S. Small Business Administration.
Wanda Perdue
Vice President
Josh Duckworth
O Recipient of the “Employer Award College of Business”
Marty McClish
from West Texas A&M University.
Assistant Vice President
Assistant Vice President
Rachel Garman
Trust Officer
Kelsea Heiman
Trust Officer
Carla McCaslin
Trust Officer
Jeremy Self
O In 2015, Happy State Bank supported over 845 community
and non-profit organizations and programs.
Trust Officer
Jolenna Wright
Trust Officer
O Employees volunteered over 8,700 hours of community service in 2015.
Member FDIC