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8-K - FORM 8-K - LegacyTexas Financial Group, Inc. | c20492e8vk.htm |
EX-99.2 - EX-99.2 - LegacyTexas Financial Group, Inc. | c20492exv99w2.htm |
Exhibit 99.1
Contact:
|
Mark Hord ViewPoint Financial Group, Inc. 972-578-5000, Ext. 7440 |
FOR IMMEDIATE RELEASE July 28, 2011 |
ViewPoint Financial Group, Inc. Reports Second Quarter 2011 Earnings
Quarterly Net Income Increased 52.0% to $4.9 million
Quarterly Net Income Increased 52.0% to $4.9 million
PLANO, Texas, July 28, 2011 ViewPoint Financial Group, Inc. (NASDAQ: VPFG) (the Company), the
holding company for ViewPoint Bank, announced financial results today for the quarter ended June
30, 2011. Detailed results of the quarter will be available in the Companys Quarterly Report on
Form 10-Q, which will be filed today and posted on our websites,
http://www.viewpointbank.com and http://www.viewpointfinancialgroup.com.
Performance Highlights
| Quarterly net income increased by $1.7 million, or 52.0%: The $1.7 million increase in net income for the quarter ended June 30, 2011, compared to the same period last year, was driven by higher net interest income and a lower provision for loan losses. |
| Basic and diluted EPS increased by $0.04: Basic and diluted earnings per share for the quarter ended June 30, 2011, was $0.15, up $0.04 from the quarter ended June 30, 2010. |
| Lower net charge-offs for both the three and six month periods: Net charge-offs declined by $102,000 during the quarter ended June 30, 2011, compared to the same period in 2010, while net charge-offs for the six months ended June 30, 2011, declined by $181,000 compared to the same period last year. |
| Lower deposit and borrowing rates fueled a 12 basis point increase in net interest margin to 2.82%: The net interest margin increased 12 basis points to 2.82% for the six months ended June 30, 2011, from 2.70% for the six months ended June 30, 2010. |
| Loan growth year-to-date: During the six months ended June 30, 2011, loans increased in all categories except for mortgage loans held for sale and the consumer portfolio. This increase includes a $33.6 million jump in commercial real estate loans and $5.2 million of growth in commercial non-mortgage loans. |
| Linked quarter growth in Warehouse Purchase Program: Compared to the quarter ended March 31, 2011, Warehouse Purchase Program loans increased by $104.5 million, or 34.8%. |
| Deposit growth of $53.3 million: Deposits increased by $53.3 million from December 31, 2010, primarily due to growth of $43.8 million in interest-bearing demand accounts. |
We are very pleased with how the company performed in the first half of 2011, said President and
Chief Executive Officer Gary Base. In addition to increasing our net income and improving our net
interest margin, weve made strong gains in our lending activities. Were especially pleased with
our increases in both commercial real estate and commercial non-mortgage lending.
Results of Operations for the Quarter Ended June 30, 2011
Net income for the three months ended June 30, 2011, was $4.9 million, an increase of $1.7 million,
or 52.0%, from net income of $3.2 million for the three months ended June 30, 2010. The increase
in net income was driven by higher net interest income and a reduction in the provision for loan
losses and was partially offset by lower non-interest income and higher non-interest expense. Our
basic and diluted earnings per share for the three months ended June 30, 2011, was $0.15, a $0.04
increase from $0.11 for the three months ended June 30, 2010.
The provision for loan losses was $1.1 million for the three months ended June 30, 2011, a decrease
of $823,000, or 43.6%, from the three months ended June 30, 2010. The balance of the allowance for
loan losses increased by $1.8 million from June 30, 2010, to June 30, 2011, as management increased
qualitative factors due to increased non-performing loans in the Companys loan portfolio and due
to the continued weak economic conditions. Despite these trends, the Company has not seen an
increase in charge-offs, as net charge-offs declined by $102,000 during the second quarter of 2011
compared to the same period last year.
Results of Operations for the Six Months Ended June 30, 2011
Net income for the six months ended June 30, 2011, was $11.4 million, an increase of $5.5 million,
or 93.4%, from net income of $5.9 million for the six months ended June 30, 2010. Net income for
the six months ended June 30, 2011, included a $2.2 million net of tax gain on the sale of
available for sale securities. The increase in net income, which was also driven by higher net
interest income and a lower provision for loan losses, was partially offset by a $2.0 million
decline in the net gain on sales of loans. Our basic and diluted earnings per share for the six
months ended June 30, 2011, was $0.35, a $0.14 increase from $0.21 for the six months ended June
30, 2010.
Net Interest Spread and Margin
The net interest rate spread increased six basis points to 2.52% for the three months ended June
30, 2011, from 2.46% for the same period last year. The net interest margin increased ten basis
points to 2.83% for the three months ended June 30, 2011, from 2.73% for the same period last year.
The net interest rate spread increased nine basis points to 2.52% for the six months ended June
30, 2011, from 2.43% for the same period last year. The net interest margin increased 12 basis
points to 2.82% for the six months ended June 30, 2011, from 2.70% for the same period last year.
The increase in the net interest rate spread and margin was primarily attributable to lower deposit
and borrowing rates. Over the past year, we have adjusted the terms on our Absolute Checking
product and certain money market accounts and modified $91.6 million in FHLB advances to reduce our
cost of funds. The net interest margin increased by three basis points, from 2.80% for the first
quarter of 2011 to 2.83% for the second quarter of 2011, primarily due to improvement in our
earning asset mix.
Financial Condition as of June 30, 2011
Total assets increased by $21.9 million, or 0.74%, to $2.96 billion at June 30, 2011, from $2.94
billion at December 31, 2010. The increase in total assets was primarily due to a $112.4 million
increase in securities held to maturity and a $38.2 million increase in net loans held for
investment. This increase was partially offset by a $71.4 million decrease in loans held for sale
and a $33.6 million decrease in securities available for sale. Total deposits increased by $53.3
million, or 2.6%, to $2.07 billion at June 30, 2011, from $2.02 billion at December 31, 2010,
primarily due to a $46.4 million increase in our interest-bearing Absolute Checking product.
Loan Portfolio and Asset Quality
During the six months ended June 30, 2011, loans increased in all categories except for mortgage
loans held for sale and the consumer portfolio. This increase includes a $33.6 million jump in
commercial real estate loans and $5.2 million of growth in commercial non-mortgage loans as
compared to December 31, 2010. Gross loans (including $420.6 million in mortgage loans held for
sale) decreased by $32.2 million, or 2.0%, to $1.57 billion at June 30, 2011, from $1.60 billion at
December 31, 2010.
At June 30, 2011, mortgage loans held for sale consisted of $405.0 million in Warehouse Purchase
Program loans and $15.6 million in loans originated for sale by our mortgage banking subsidiary,
ViewPoint Mortgage (VPM). Mortgage loans held for sale decreased by $71.4 million, or 14.5%,
from December 31, 2010, with $55.9 million of this variance attributable to a reduction in
Warehouse Purchase Program loans purchased for sale under our standard loan participation
agreement. The remaining $15.5 million of the decline was associated with loans originated for sale
by VPM. VPM originated $167.6 million in one- to four-family mortgage loans during the six months
ended June 30, 2011, compared to $223.0 million during the six months ended June 30, 2010. Of the
$167.6 million originated during the six months ended June 30, 2011, $115.0 million were sold or
committed to be sold to investors, generating a net gain on sale of loans of $3.8 million during
that period. The remaining $52.6 million of VPM production was retained in the Companys loan
portfolio. The decrease in mortgage production seen in the Warehouse Purchase Program and VPM
compared to December 31, 2010, is primarily attributable to an overall decline in the mortgage
market as refinance volume has dropped industry-wide.
Commercial real estate loans increased by $33.6 million, or 7.0%, from December 31, 2010. Our
commercial real estate portfolio consists almost exclusively of loans secured by existing,
multi-tenanted commercial buildings. 91% of our commercial real estate loan balances are secured by
properties located in Texas, a market that we do not believe has experienced the same level of
economic pressure experienced in certain other geographic areas in the United States. Our
commercial non-mortgage portfolio increased by $5.2 million, or 13.1%, from December 31, 2010, as
we continue to focus on developing this portfolio by adding experienced commercial lenders and
applying local loan decisioning and a sophisticated loan pricing model. During the six months
ended June 30, 2011, we
originated $14.3 million in commercial non-mortgage loans, with the average balance of this
portfolio increasing by $4.6 million during the six months ended June 30, 2011, compared to the
same time period last year.
Page 2 of 7
Our non-performing loans to total loans ratio at June 30, 2011, was 1.56%, compared to 1.59% at
December 31, 2010. Non-performing loans increased by $238,000, from $17.6 million at December 31,
2010, to $17.9 million at June 30, 2011. Compared to March 31, 2011, non-performing loans
increased by $1.8 million, primarily due to increases of $1.3 million and $711,000 in one- to
four-family and commercial real estate non-performing loans, respectively.
Our allowance for loan losses at June 30, 2011, was $16.2 million, or 1.41% of total loans,
compared to $14.8 million, or 1.34% of total loans, at December 31, 2010. Our allowance for loan
losses to non-performing loans was 90.45% at June 30, 2011, compared to 84.22% as of December 31,
2010.
Goodwill
In June 2011, the Company impaired its goodwill by $271,000, reducing the goodwill balance from
$1.1 million at December 31, 2010, to $818,000 at June 30, 2011. The goodwill resulted from the
Banks 2007 purchase of the assets of Bankers Financial Mortgage Group, Ltd (now VPM). Due to
the downturn in mortgage market conditions, reduced earnings and loan production personnel changes,
the Company performed an evaluation of its goodwill outside of the normal annual review cycle which
showed a $271,000 excess of carrying value of the goodwill over its fair value.
Conference Call
The Company will host an investor conference call to review these results on Friday, July 29, 2011,
at 10 a.m., Central Time. Participants are asked to call (toll-free) 1-877-317-6789 at least five
minutes prior to the call. International participants are asked to call 1-412-317-6789 and
participants in Canada are asked to call (toll-free) 1-866-605-3852.
The call and corresponding presentation slides will be webcast live on the home page of the
Companys website, www.viewpointfinancialgroup.com. An audio replay will be available one hour
after the conclusion of the call at 1-877-344-7529, Conference #10001717. This replay will be
available until October 28, 2011, at 8 a.m., Central Time. The webcast will be archived on the
Companys website until October 28, 2011.
About ViewPoint Financial Group, Inc.
ViewPoint Financial Group, Inc. is the holding company for ViewPoint Bank. ViewPoint Bank operates
23 community bank offices and 12 loan production offices. For more information, please visit
www.viewpointbank.com or www.viewpointfinancialgroup.com.
When used in filings by the Company with the Securities and Exchange Commission (the SEC) in the
Companys press releases or other public or shareholder communications, and in oral statements made
with the approval of an authorized executive officer, the words or phrases will likely result,
are expected to, will continue, is anticipated, estimate, project, intends or similar
expressions are intended to identify forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and
uncertainties, including, among other things, changes in economic conditions, legislative changes,
changes in policies by regulatory agencies, fluctuations in interest rates, the risks of lending
and investing activities, including changes in the level and direction of loan delinquencies and
write-offs and changes in estimates of the adequacy of the allowance for loan losses, the Companys
ability to access cost-effective funding, fluctuations in real estate values and both residential
and commercial real estate market conditions, demand for loans and deposits in the Companys market
area, the industry-wide decline in mortgage production, competition, changes in managements
business strategies and other factors set forth under Risk Factors in the Companys Form 10-K, that
could cause actual results to differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to advise readers that the factors listed above could
materially affect the Companys financial performance and could cause the Companys actual results
for future periods to differ materially from any opinions or statements expressed with respect to
future periods in any current statements.
The Company does not undertake and specifically declines any obligation to publicly release
the result of any revisions which may be made to any forward-looking statements to reflect events
or circumstances after the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
Page 3 of 7
VIEWPOINT FINANCIAL GROUP, INC.
Condensed Consolidated Statements of Condition
(In thousands)
Condensed Consolidated Statements of Condition
(In thousands)
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
ASSETS |
||||||||
Total cash and cash equivalents |
$ | 50,825 | $ | 68,650 | ||||
Securities available for sale, at fair value |
683,849 | 717,497 | ||||||
Securities held to maturity |
544,976 | 432,519 | ||||||
Mortgage loans held for sale |
420,617 | 491,985 | ||||||
Loans, net of allowance for loan losses of
$16,159 at June 30, 2011 and $14,847 at
December 31, 2010 |
1,130,277 | 1,092,114 | ||||||
FHLB stock |
18,352 | 20,569 | ||||||
Bank-owned life insurance |
28,786 | 28,501 | ||||||
Premises and equipment, net |
48,007 | 48,731 | ||||||
Accrued interest receivable and other assets |
38,193 | 41,429 | ||||||
Total assets |
$ | 2,963,882 | $ | 2,941,995 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Deposits |
||||||||
Non-interest-bearing demand |
$ | 194,704 | $ | 201,998 | ||||
Interest-bearing demand |
482,552 | 438,719 | ||||||
Savings and money market |
741,723 | 711,911 | ||||||
Time |
651,915 | 664,922 | ||||||
Total deposits |
2,070,894 | 2,017,550 | ||||||
FHLB advances, net |
406,602 | 461,219 | ||||||
Repurchase agreement and other borrowings |
35,000 | 35,000 | ||||||
Accrued interest payable and other liabilities |
44,380 | 31,637 | ||||||
Total liabilities |
2,556,876 | 2,545,406 | ||||||
Total shareholders equity |
407,006 | 396,589 | ||||||
Total liabilities and shareholders equity |
$ | 2,963,882 | $ | 2,941,995 | ||||
Page 4 of 7
VIEWPOINT FINANCIAL GROUP, INC.
Condensed Consolidated Statements of Income
(In thousands except per share data)
Condensed Consolidated Statements of Income
(In thousands except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(unaudited) | ||||||||||||||||
Interest and dividend income |
||||||||||||||||
Loans, including fees |
$ | 20,833 | $ | 21,643 | $ | 41,294 | $ | 41,969 | ||||||||
Securities |
7,112 | 5,931 | 14,453 | 11,649 | ||||||||||||
Interest-bearing deposits in other financial institutions |
28 | 129 | 100 | 277 | ||||||||||||
FHLB stock |
13 | 15 | 34 | 32 | ||||||||||||
27,986 | 27,718 | 55,881 | 53,927 | |||||||||||||
Interest expense |
||||||||||||||||
Deposits |
6,260 | 7,889 | 12,343 | 15,518 | ||||||||||||
FHLB advances |
2,407 | 3,022 | 4,893 | 6,161 | ||||||||||||
Other borrowings |
354 | 354 | 703 | 703 | ||||||||||||
9,021 | 11,265 | 17,939 | 22,382 | |||||||||||||
Net interest income |
18,965 | 16,453 | 37,942 | 31,545 | ||||||||||||
Provision for loan losses |
1,065 | 1,888 | 2,160 | 3,034 | ||||||||||||
Net interest income after provision for loan losses |
17,900 | 14,565 | 35,782 | 28,511 | ||||||||||||
Net gain on sales of loans |
1,879 | 3,165 | 3,828 | 5,820 | ||||||||||||
Other non-interest income |
5,757 | 5,004 | 14,275 | 9,905 | ||||||||||||
Non-interest expense |
18,268 | 18,008 | 37,129 | 35,520 | ||||||||||||
Income before income tax expense |
7,268 | 4,726 | 16,756 | 8,716 | ||||||||||||
Income tax expense |
2,411 | 1,530 | 5,345 | 2,815 | ||||||||||||
Net income |
$ | 4,857 | $ | 3,196 | $ | 11,411 | $ | 5,901 | ||||||||
Basic and diluted earnings per share |
$ | 0.15 | $ | 0.11 | $ | 0.35 | $ | 0.21 | ||||||||
Page 5 of 7
VIEWPOINT FINANCIAL GROUP, INC.
Selected Financial Data
Selected Financial Data
(unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June | Mar | Dec | Sept | June | ||||||||||||||||
2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
Share Data for Earnings per Share Calculation:1 |
||||||||||||||||||||
Weighted average common shares outstanding |
34,839,491 | 34,839,491 | 34,839,491 | 34,555,356 | 29,206,205 | |||||||||||||||
Less: average unallocated ESOP shares |
(2,224,524 | ) | (2,270,567 | ) | (2,316,413 | ) | (2,275,964 | ) | (810,799 | ) | ||||||||||
Less: average unvested restricted shares |
(169,440 | ) | (215,593 | ) | (218,393 | ) | (234,074 | ) | (309,643 | ) | ||||||||||
Average shares |
32,445,527 | 32,353,331 | 32,304,685 | 32,045,318 | 28,085,763 | |||||||||||||||
Diluted average shares |
32,510,134 | 32,432,793 | 32,312,993 | 32,045,318 | 28,116,397 | |||||||||||||||
Net income (in thousands) |
$ | 4,857 | $ | 6,554 | $ | 6,490 | $ | 5,408 | $ | 3,196 | ||||||||||
Earnings per share |
$ | 0.15 | $ | 0.20 | $ | 0.20 | $ | 0.17 | $ | 0.11 | ||||||||||
Location Data: |
||||||||||||||||||||
Number of full-service community bank offices |
21 | 21 | 21 | 21 | 21 | |||||||||||||||
Number of in-store banking centers |
2 | 2 | 2 | 2 | 2 | |||||||||||||||
Total community bank offices |
23 | 23 | 23 | 23 | 23 | |||||||||||||||
Number of loan production offices |
12 | 13 | 14 | 15 | 16 | |||||||||||||||
Performance Ratios: 2 |
||||||||||||||||||||
Return on assets |
0.69 | % | 0.92 | % | 0.87 | % | 0.76 | % | 0.50 | % | ||||||||||
Return on equity |
4.69 | % | 6.51 | % | 6.37 | % | 5.22 | % | 5.89 | % | ||||||||||
Non-interest income to operating revenues |
21.44 | % | 27.28 | % | 21.69 | % | 23.12 | % | 22.77 | % | ||||||||||
Operating expenses to average total assets |
2.59 | % | 2.65 | % | 2.53 | % | 2.63 | % | 2.82 | % | ||||||||||
Efficiency ratio 3 |
67.97 | % | 71.88 | % | 63.49 | % | 67.76 | % | 72.55 | % | ||||||||||
Capital Ratios: |
||||||||||||||||||||
Equity to total assets |
13.73 | % | 14.30 | % | 13.48 | % | 13.19 | % | 7.70 | % | ||||||||||
Risk-based capital to risk-weighted assets 4 |
19.50 | % | 21.07 | % | 18.42 | % | 19.79 | % | 14.55 | % | ||||||||||
Tier 1 capital to risk-weighted assets 4 |
18.63 | % | 20.15 | % | 17.61 | % | 18.92 | % | 13.64 | % |
1 | Per share data for periods prior to the Conversion (July 2010) has been revised to reflect the 1.4:1 conversion ratio on publicly traded shares, which resulted in a 4,287,752 increase in outstanding shares. | |
2 | With the exception of end of period ratios, all ratios are based on average daily balances and are annualized where appropriate. | |
3 | Calculated by dividing total noninterest expense by net interest income plus noninterest income, excluding gain (loss) on sale of foreclosed assets, impairment of goodwill, gains from securities transactions and other nonrecurring items. | |
4 | Calculated at the ViewPoint Bank level, which is subject to the capital adequacy requirements of the Office of Thrift Supervision. |
Page 6 of 7
VIEWPOINT FINANCIAL GROUP, INC.
Selected Financial Data, continued
Selected Financial Data, continued
(unaudited) | ||||||||||||||||||||
As of or For the Three Months Ended | ||||||||||||||||||||
June | Mar | Dec | Sept | June | ||||||||||||||||
2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
Asset Quality Data and Ratios: |
||||||||||||||||||||
Non-performing loans |
$ | 17,866 | $ | 16,030 | $ | 17,628 | $ | 17,549 | $ | 15,817 | ||||||||||
Non-performing assets to total assets |
0.68 | % | 0.66 | % | 0.69 | % | 0.68 | % | 0.73 | % | ||||||||||
Non-performing loans to total loans 1 |
1.56 | % | 1.46 | % | 1.59 | % | 1.57 | % | 1.41 | % | ||||||||||
Allowance for loan losses to non-performing loans |
90.45 | % | 96.66 | % | 84.22 | % | 83.14 | % | 90.50 | % | ||||||||||
Allowance for loan losses to total loans 1 |
1.41 | % | 1.41 | % | 1.34 | % | 1.31 | % | 1.28 | % | ||||||||||
Average Balances: |
||||||||||||||||||||
Loans 2 |
$ | 1,407,113 | $ | 1,382,428 | $ | 1,614,910 | $ | 1,571,432 | $ | 1,461,993 | ||||||||||
Securities |
1,228,066 | 1,211,806 | 1,148,875 | 981,498 | 865,681 | |||||||||||||||
Overnight deposits |
41,969 | 113,748 | 79,934 | 87,549 | 81,941 | |||||||||||||||
Total interest-earning assets |
$ | 2,677,148 | $ | 2,707,982 | $ | 2,843,719 | $ | 2,640,479 | $ | 2,409,615 | ||||||||||
Deposits: |
||||||||||||||||||||
Interest-bearing demand |
$ | 468,964 | $ | 438,383 | $ | 434,147 | $ | 419,770 | $ | 356,062 | ||||||||||
Savings and money market |
733,517 | 708,342 | 724,075 | 724,333 | 723,955 | |||||||||||||||
Time |
654,852 | 663,235 | 675,830 | 641,021 | 662,117 | |||||||||||||||
FHLB advances and other borrowings |
316,518 | 417,383 | 509,597 | 379,422 | 366,509 | |||||||||||||||
Total interest-bearing liabilities |
$ | 2,173,851 | $ | 2,227,343 | $ | 2,343,649 | $ | 2,164,546 | $ | 2,108,643 | ||||||||||
Yields: |
||||||||||||||||||||
Loans |
5.92 | % | 5.92 | % | 5.85 | % | 5.84 | % | 5.92 | % | ||||||||||
Securities |
2.32 | % | 2.43 | % | 2.67 | % | 2.89 | % | 2.75 | % | ||||||||||
Overnight deposits |
0.27 | % | 0.25 | % | 0.29 | % | 0.31 | % | 0.63 | % | ||||||||||
Total interest-earning assets |
4.18 | % | 4.12 | % | 4.41 | % | 4.56 | % | 4.60 | % | ||||||||||
Deposits: |
||||||||||||||||||||
Interest-bearing demand |
2.02 | % | 1.92 | % | 2.20 | % | 2.65 | % | 2.47 | % | ||||||||||
Savings and money market |
0.57 | % | 0.56 | % | 0.90 | % | 1.33 | % | 1.36 | % | ||||||||||
Time |
1.75 | % | 1.80 | % | 1.87 | % | 1.95 | % | 1.95 | % | ||||||||||
FHLB advances and other borrowings |
3.49 | % | 2.72 | % | 2.36 | % | 3.44 | % | 3.68 | % | ||||||||||
Total interest-bearing liabilities |
1.66 | % | 1.60 | % | 1.74 | % | 2.14 | % | 2.14 | % | ||||||||||
Net interest spread |
2.52 | % | 2.52 | % | 2.67 | % | 2.42 | % | 2.46 | % | ||||||||||
Net interest margin |
2.83 | % | 2.80 | % | 2.98 | % | 2.81 | % | 2.73 | % |
1 | Total loans does not include loans held for sale. | |
2 | Includes loans held for sale |
Page 7 of 7