Attached files
| file | filename |
|---|---|
| 8-K - 8-K - LegacyTexas Financial Group, Inc. | a8k1q2015covererslides.htm |
| EX-99.3 - EXHIBIT 99.3 - LegacyTexas Financial Group, Inc. | ex993q12015investorprese.htm |
| EX-99.2 - EXHIBIT 99.2 - LegacyTexas Financial Group, Inc. | ex992q12015dividendannounc.htm |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
April 21, 2015
Contact: Investor Inquiries:
Casey Farrell
972-801-5871/ShareholderRelations@LegacyTexasFinancialGroup.com
Media Inquiries:
Jennifer Dexter
972-461-7157/Jennifer.Dexter@LegacyTexas.com
LegacyTexas Financial Group, Inc. Reports First Quarter 2015 Earnings
GAAP EPS for Merged Company Increases to $0.35 per Share and Core EPS Increases to $0.39 per Share
PLANO, Texas, April 21, 2015 -- LegacyTexas Financial Group, Inc. (NASDAQ: LTXB) (the “Company”), the holding company for LegacyTexas Bank (the “Bank”), today announced net income of $16.3 million, an increase of $10.9 million from the fourth quarter of 2014 and an increase of $8.6 million from the first quarter of 2014. Core net income (which is net income adjusted for the impact of merger and acquisition costs and certain other items) totaled $17.7 million for the quarter ended March 31, 2015, up $6.6 million from the fourth quarter of 2014 and up $9.9 million from the first quarter of 2014. Basic earnings per share for the quarter ended March 31, 2015 was $0.35, an increase of $0.21 from the fourth quarter of 2014 and an increase of $0.15 from the first quarter of 2014. Core earnings per share for the same period was $0.39, up $0.10 from the fourth quarter of 2014 and up $0.18 from the first quarter of 2014. The reconciliation of non-GAAP measures, which the Company believes facilitates the assessment of its banking operations and peer comparability, is included in tabular form at the end of this release.
First Quarter 2015 Performance Highlights
• | Gross loans held for investment at March 31, 2015, excluding Warehouse Purchase Program loans, grew $1.56 billion from December 31, 2014, with $1.40 billion of growth resulting from loans acquired from LegacyTexas Group, Inc. Excluding loans acquired from LegacyTexas Group, Inc., gross loans held for investment, excluding Warehouse Purchase Program loans, increased by $163.3 million, or 4.0%, from December 31, 2014. |
• | Warehouse Purchase Program loans at March 31, 2015 totaled $1.04 billion, a $252.5 million, or 32.1%, increase from December 31, 2014, and a $448.0 million, or 75.8%, increase from March 31, 2014. |
• | Deposits increased by $1.74 billion from December 31, 2014, with $1.63 billion of growth resulting from deposits acquired from LegacyTexas Group, Inc. Excluding deposits acquired from LegacyTexas Group, Inc., deposits increased by $110.6 million, or 2.6%. |
• | Net interest margin for the quarter ended March 31, 2015 was 4.04%, a 20 basis point increase from the linked quarter and a 31 basis point increase compared to the first quarter of 2014, which includes 23 basis points of accretion of interest related to purchase accounting fair value adjustments for the first quarter of 2015. |
• | During the first quarter of 2015, the Company repurchased and retired 357,950 shares of its common stock at an average price of $22.32 per share, reducing shareholders' equity by $8.0 million at March 31, 2015. |
"We are excited to report our first quarterly results since completing the merger on January 1st," said President and CEO Kevin Hanigan. "Our impressive operating results are an early sign of the success of this financially attractive deal. With annualized organic loan growth of 16%, core EPS of $0.39, a net interest margin of 4.04% and a core return on assets of 1.18%, we are well on our way to the successful integration and execution of our strategic plans."
1
On January 1, 2015, the Company completed its merger with LegacyTexas Group, Inc. ("LegacyTexas") and changed its name from ViewPoint Financial Group, Inc. to LegacyTexas Financial Group, Inc. On January 2, the Company’s common stock began trading on the NASDAQ Global Select Market under the ticker symbol LTXB. The Company’s bank subsidiary, ViewPoint Bank, N.A., was merged into LegacyTexas Bank, the banking subsidiary of LegacyTexas. On February 17, 2015,
we completed our core system conversion and branch integration, allowing all ViewPoint and LegacyTexas customers to conduct business at any of the Bank's 48 branches and to have access to the Bank's complete line of products and services.
Financial Highlights
At or For the Quarters Ended | |||||||||||
March | December | March | |||||||||
(unaudited) | 2015 | 2014 | 2014 | ||||||||
(Dollars in thousands, except per share amounts) | |||||||||||
Net interest income | $ | 56,326 | $ | 35,830 | $ | 29,585 | |||||
Provision for loan losses | 3,000 | 2,637 | 376 | ||||||||
Non-interest income | 8,386 | 5,294 | 4,962 | ||||||||
Non-interest expense | 36,756 | 29,796 | 22,155 | ||||||||
Income tax expense | 8,632 | 3,225 | 4,334 | ||||||||
Net income | $ | 16,324 | $ | 5,466 | $ | 7,682 | |||||
Basic earnings per common share | $ | 0.35 | $ | 0.14 | $ | 0.20 | |||||
Basic core (non-GAAP) earnings per common share1 | $ | 0.39 | $ | 0.29 | $ | 0.21 | |||||
Weighted average common shares outstanding - basic | 45,824,812 | 38,051,511 | 37,775,677 | ||||||||
Estimated Tier 1 common risk-based capital ratio2 | 10.47 | % | 15.14 | % | 17.88 | % | |||||
Total equity to total assets | 11.69 | % | 13.65 | % | 15.27 | % | |||||
Tangible common equity to tangible assets - Non-GAAP 1 | 9.17 | % | 13.01 | % | 14.54 | % | |||||
1 See the section labeled "Supplemental Information- Non-GAAP Financial Measures" at the end of this document.
2 Calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve.
2
Net Interest Income and Net Interest Margin
For the Quarters Ended | |||||||||||
March | December | March | |||||||||
(unaudited) | 2015 | 2014 | 2014 | ||||||||
(Dollars in thousands) | |||||||||||
Interest income: | |||||||||||
Loans held for investment, excluding Warehouse Purchase Program loans | $ | 52,082 | $ | 31,667 | $ | 26,326 | |||||
Warehouse Purchase Program loans | 5,775 | 5,440 | 4,062 | ||||||||
Loans held for sale | 178 | — | — | ||||||||
Securities | 3,425 | 2,808 | 3,259 | ||||||||
Interest-earning deposit accounts | 158 | 64 | 57 | ||||||||
Total interest income | $ | 61,618 | $ | 39,979 | $ | 33,704 | |||||
Net interest income | $ | 56,326 | 35,830 | $ | 29,585 | ||||||
Net interest margin | 4.04 | % | 3.84 | % | 3.73 | % | |||||
Selected average balances: | |||||||||||
Total earning assets | $ | 5,582,041 | $ | 3,732,058 | $ | 3,170,341 | |||||
Total loans held for investment | 4,720,980 | 3,120,214 | 2,511,442 | ||||||||
Total securities | 620,412 | 505,692 | 562,607 | ||||||||
Total deposits | 4,371,462 | 2,612,125 | 2,287,496 | ||||||||
Total borrowings | 820,969 | 654,396 | 464,723 | ||||||||
Total non-interest-bearing demand deposits | 985,596 | 473,996 | 414,919 | ||||||||
Total interest-bearing liabilities | 4,206,835 | 2,792,525 | 2,337,300 | ||||||||
Net interest income for the quarter ended March 31, 2015 was $56.3 million, a $20.5 million increase from the fourth quarter of 2014 and a $26.7 million increase from the first quarter of 2014. The $20.5 million increase from the linked quarter was primarily due to an increase in interest income on loans, which was driven by increased volume in all loan categories resulting from loans acquired from LegacyTexas on January 1, 2015, as well as organic growth during the first quarter of 2015. The average balance of commercial real estate loans increased by $801.4 million to $2.03 billion from the fourth quarter of 2014, resulting in a $10.5 million increase in interest income. The $801.4 million in growth includes $737.3 million in commercial real estate and commercial construction and land loans acquired from LegacyTexas; excluding these loans, the average balance of commercial real estate loans increased by $64.1 million from the linked quarter. The average balance of commercial and industrial loans increased by $404.2 million to $1.13 billion from the fourth quarter of 2014, resulting in a $5.9 million increase in interest income. The $404.2 million in growth includes $337.1 million in commercial and industrial loans acquired from LegacyTexas; excluding these loans, the average balance of commercial and industrial loans increased by $67.1 million from the linked quarter. The average balance of consumer real estate loans increased by $289.5 million to $813.5 million from the fourth quarter of 2014, resulting in a $3.4 million increase in interest income. The $289.5 million in growth includes $276.0 million in consumer real estate loans acquired from LegacyTexas; excluding these loans, the average balance of consumer real estate loans increased by $13.5 million from the linked quarter. The average balance of Warehouse Purchase Program loans increased by $67.8 million, or 10.9%, to $687.5 million from the fourth quarter of 2014, which resulted in a $335,000 increase in interest income.
Interest income on loans was impacted by $3.1 million in accretion of purchase accounting fair value adjustments recorded during the first quarter of 2015 on loans acquired from LegacyTexas, which included $1.5 million in accretion income recorded on acquired commercial and industrial loans, $852,000 in accretion income recorded on acquired commercial real estate loans and $701,000 recorded on acquired consumer real estate loans. Accretion of purchase accounting fair value adjustments related to the LegacyTexas acquisition, as well as a smaller amount related to the Highlands Bank acquisition in 2012, increased the average yields on commercial real estate, commercial and industrial and consumer real estate loans by approximately 18 basis points, 53 basis points and 34 basis points, respectively, for the three months ended March 31, 2015.
3
The $26.7 million increase in net interest income compared to the first quarter of 2014 was primarily due to a $27.6 million increase in interest income on loans, which was driven by higher loan balances resulting from the merger with LegacyTexas and organic growth. For the quarter ended March 31, 2015, the average balance of commercial and industrial loans increased by $667.0 million compared to the quarter ended March 31, 2014, which resulted in a $9.0 million increase in interest income. Additionally, the average balance of commercial real estate loans increased by $901.1 million for the quarter ended March 31, 2015, compared to the same period in 2014, contributing $12.0 million of the increase in interest income. Increased volume in all other loan categories also added to the growth in interest income on a year-over-year basis, which was partially offset by reductions in yields earned on commercial real estate and Warehouse Purchase Program loans.
Interest expense for the quarter ended March 31, 2015 increased by $1.1 million compared to the linked quarter, primarily due to an increase in interest expense on deposits, which was driven by increased volume in all deposit categories resulting from deposits acquired from LegacyTexas on January 1, 2015, as well as organic growth during the first quarter of 2015 in interest-bearing demand, savings and money market deposit balances. The average balance of savings and money market deposits increased by $635.8 million to $1.8 billion from the fourth quarter of 2014, resulting in a $342,000 increase in interest expense. The $635.8 million in growth includes $546.8 million in savings and money market deposits acquired from LegacyTexas; excluding these deposits, the average balance of savings and money market deposits increased by $89.0 million from the linked quarter. The average balance of interest-bearing demand deposits increased by $340.4 million to $795.6 million from the fourth quarter of 2014, resulting in a $177,000 increase in interest expense. The $340.4 million in growth includes $271.2 million in interest-bearing demand deposits acquired from LegacyTexas; excluding these deposits, the average balance of interest-bearing demand deposits increased by $69.2 million from the linked quarter. The average balance of time deposits increased by $271.5 million to $785.3 million from the fourth quarter of 2014, resulting in a $443,000 increase in interest expense. The $271.5 million in growth includes $312.1 million in time deposits acquired from LegacyTexas; excluding these deposits, the average balance of time deposits decreased by $40.6 million from the linked quarter. The increased interest expense attributable to higher volume was partially offset by linked quarter decreases in the average rate paid on interest-bearing demand, savings and money market deposits.
Compared to the first quarter of 2014, interest expense for the quarter ended March 31, 2015 increased by $1.2 million, which was primarily due to increased average balances in all deposit categories resulting from the merger with LegacyTexas. The increase in deposit balances was partially offset by lower rates paid on interest-bearing demand and time deposits.
The net interest margin for the first quarter of 2015 was 4.04%, a 20 basis point increase from the fourth quarter of 2014 and a 31 basis point increase from the first quarter of 2014. Accretion of interest related to the merger with LegacyTexas on January 1, 2015, as well as the 2012 Highlands acquisition, contributed 23 basis points to the net interest margin and average yield on earning assets for the quarter ended March 31, 2015, compared to three basis points for the quarter ended December 31, 2014, and five basis points for the quarter ended March 31, 2014. The average yield on earning assets for the first quarter of 2015 was 4.42%, a 14 basis point increase from the fourth quarter of 2014 and a 17 basis point increase from the first quarter of 2014. The cost of deposits for the first quarter of 2015 was 0.29%, down four basis points from the fourth quarter of 2014 and down six basis points from the first quarter of 2014.
Non-interest Income
Non-interest income for the first quarter of 2015 was $8.4 million, a $3.1 million increase from the fourth quarter of 2014 and a $3.4 million increase from the first quarter of 2014. Core non-interest income for the first quarter of 2015, excluding one-time gains and losses on assets, was $9.0 million, up $3.8 million from the fourth quarter of 2014 and up $4.1 million from the first quarter of 2014. The Company recognized $2.1 million in net gains on the sale of mortgage loans, which includes the gain recognized on $54.5 million of one-to four-family mortgage loans that were sold or committed for sale during the first quarter of 2015, fair value changes on mortgage derivatives and mortgage fees collected. Prior to the January 1, 2015 merger with LegacyTexas, the Company did not originate or sell mortgage loans to outside investors; therefore, a comparable gain was not recorded in the fourth quarter of 2014. A $924,000 increase in service charges and fees was driven by a $673,000 increase in non-sufficient funds fees and debit card income and a $215,000 increase in service charges related to accounts acquired from LegacyTexas. These increases were partially offset by a $364,000 decrease in other non-interest income, which was primarily caused by a $674,000 net decrease in the value of investments in community development-oriented private equity funds used for Community Reinvestment Act purposes (the "CRA Funds") recorded in the first quarter of 2015.
4
The $3.4 million increase in non-interest income from the first quarter of 2014 was primarily due to the $2.1 million in net gains recognized on the sale of mortgage loans described above. Additionally, compared to the first quarter of 2014, services charges and fees increased by $1.4 million, which was driven by a $413,000 increase in non-sufficient funds fees and debit card income, a $298,000 increase in commercial loan pre-payment fees, a $170,000 increase in Warehouse Purchase Program fees and a $256,000 increase in service charges related to accounts acquired from LegacyTexas. These increases were partially offset by the $674,000 net decrease from the first quarter of 2014 in the value of the CRA Funds.
Non-interest Expenses
Non-interest expense for the quarter ended March 31, 2015 was $36.8 million, a $7.0 million increase from the fourth quarter of 2014 and a $14.6 million increase from the first quarter of 2014. The linked-quarter comparison includes a $6.7 million decrease in merger and acquisition costs related to the merger with LegacyTexas, which was completed on January 1, 2015. Excluding the impact of these merger costs, core non-interest expense, which totaled $35.2 million for the quarter ended March 31, 2015, increased by $13.7 million, which was driven by an $8.8 million increase in salaries and employee benefits expense, primarily due to the addition of 277 full-time equivalent employees related to the merger with LegacyTexas. Additionally, shortly following the completion of the LegacyTexas merger, certain senior managers from LegacyTexas who joined the Company received immediately-vested stock awards, which resulted in $600,000 of share-based compensation expense recognized during the first quarter of 2015. Compared to the fourth quarter of 2014, occupancy and equipment expense increased by $2.1 million and office operations expense increased by $721,000, primarily due to the addition of LegacyTexas' 11 owned buildings and 14 leased spaces. Data processing expense increased by $1.0 million on a linked-quarter basis, as the Company added LegacyTexas into their information technology infrastructure and upgraded various systems to enhance customer service and increase efficiency.
The increase in non-interest expense from the first quarter of 2014 includes a $1.4 million increase in merger and acquisition costs related to the merger with LegacyTexas. Excluding the impact of these merger costs, core non-interest expense increased by $13.2 million, which was driven by a $7.8 million increase in salaries and employee benefits expense, primarily due to the addition of employees and grants of share-based compensation related to the merger with LegacyTexas. Compared to the quarter ended March 31, 2014, non-interest expense increased due to the merger with LegacyTexas, including increases in occupancy and equipment expense ($2.1 million), data processing expense ($1.1 million) and office operations expense ($662,000.)
Financial Condition - Loans
Gross loans held for investment at March 31, 2015, excluding Warehouse Purchase Program loans, grew $1.56 billion from December 31, 2014 and by $1.99 billion from March 31, 2014, with $1.40 billion of growth resulting from loans acquired from LegacyTexas. Excluding loans acquired from LegacyTexas and Warehouse Purchase Program loans, gross loans held for investment increased by $163.3 million, or 4.0%, from December 31, 2014 and by $589.4 million, or 16.3%, from March 31, 2014. The below table breaks out the growth in gross loans held for investment, excluding Warehouse Purchase Program, compared to December 31, 2014:
Acquired from LegacyTexas Group, Inc. | Organic Growth | Total Linked-Quarter Growth | % Change excluding Acquired Loans | % Change including Acquired Loans | |||||||||||||
Commercial real estate | $ | 737,252 | $ | 59,298 | $ | 796,550 | 2.9 | % | 62.2 | % | |||||||
Commercial and industrial | 337,057 | 93,349 | 430,406 | 8.3 | 55.1 | ||||||||||||
Consumer | 325,469 | 10,605 | 336,074 | 1.2 | 58.8 | ||||||||||||
Total linked-quarter growth | $ | 1,399,778 | $ | 163,252 | $ | 1,563,030 | 4.0 | 59.3 | |||||||||
5
The below table breaks out the growth in gross loans held for investment, excluding Warehouse Purchase Program, compared to March 31, 2014:
Acquired from LegacyTexas Group, Inc. | Organic Growth | Total Year-over-Year Growth | % Change excluding Acquired Loans | % Change including Acquired Loans | |||||||||||||
Commercial real estate | $ | 737,252 | $ | 187,038 | $ | 924,290 | 9.9 | % | 80.2 | % | |||||||
Commercial and industrial | 337,057 | 331,593 | 668,650 | 37.7 | 123.0 | ||||||||||||
Consumer | 325,469 | 70,721 | 396,190 | 8.4 | 77.5 | ||||||||||||
Total year-over-year growth | $ | 1,399,778 | $ | 589,352 | $ | 1,989,130 | 16.3 | 90.1 | |||||||||
Energy loans, which are reported as commercial and industrial loans, totaled $371.1 million at March 31, 2015, up $11.5 million from $359.6 million at December 31, 2014 and up $158.3 million from March 31, 2014. The growth includes $5.6 million in energy loans acquired from LegacyTexas. In May 2013, the Company formed its Energy Finance group, which is comprised of a group of seasoned lenders, executives and credit risk professionals with more than 100 years of combined Texas energy experience, to focus on providing loans to private and public oil and gas companies throughout the United States. The group also offers the Bank's full array of commercial services, including Treasury Management and letters of credit, to its customers. Substantially all of the loans in the Energy portfolio are reserve based loans, secured by deeds of trust on properties containing proven oil and natural gas reserves. Two loans managed by the Energy Finance group are not secured by oil and gas reserves. These loans, with a combined commitment of $29.5 million and a total outstanding balance of $12.7 million at March 31, 2015, are categorized as “Midstream and Other” loans. Loans in this category are typically related to the transmission of oil and natural gas and would have only an indirect impact from declining commodity prices.
Financial Condition - Deposits
The below table breaks out the growth in deposits compared to December 31, 2014:
Acquired from LegacyTexas Group, Inc. | Organic Change | Total Linked-Quarter Growth | % Change excluding Acquired Deposits | % Change including Acquired Deposits | |||||||||||||
Non-interest-bearing demand | $ | 499,684 | $ | (87,626 | ) | $ | 412,058 | (8.8 | )% | 83.3 | % | ||||||
Interest-bearing demand | 271,157 | 142,887 | 414,044 | 19.2 | 87.6 | ||||||||||||
Savings and money market | 546,802 | 115,207 | 662,009 | 6.7 | 56.3 | ||||||||||||
Time | 312,139 | (59,883 | ) | 252,256 | (7.2 | ) | 49.1 | ||||||||||
Total linked-quarter growth | $ | 1,629,782 | $ | 110,585 | $ | 1,740,367 | 2.6 | 65.5 | |||||||||
The below table breaks out the growth in deposits compared to March 31, 2014:
Acquired from LegacyTexas Group, Inc. | Organic Change | Total Year-over-Year Growth | % Change excluding Acquired Deposits | % Change including Acquired Deposits | |||||||||||||
Non-interest-bearing demand | $ | 499,684 | $ | (27,713 | ) | $ | 471,971 | (3.0 | )% | 108.6 | % | ||||||
Interest-bearing demand | 271,157 | 136,158 | 407,315 | 18.1 | 85.0 | ||||||||||||
Savings and money market | 546,802 | 346,910 | 893,712 | 23.3 | 94.6 | ||||||||||||
Time | 312,139 | (56,207 | ) | 255,932 | (6.8 | ) | 50.2 | ||||||||||
Total year-over-year growth | $ | 1,629,782 | $ | 399,148 | $ | 2,028,930 | 10.0 | 85.6 | |||||||||
6
Credit Quality
At or For the Quarters Ended | |||||||||||
March | December | March | |||||||||
(unaudited) | 2015 | 2014 | 2014 | ||||||||
(Dollars in thousands) | |||||||||||
Net charge-offs (recoveries) | $ | 273 | $ | (327 | ) | $ | 332 | ||||
Net charge-offs (recoveries)/Average loans held for investment, excluding Warehouse Purchase Program loans | 0.03 | % | (0.05 | )% | 0.06 | % | |||||
Net charge-offs (recoveries)/Average loans held for investment | 0.02 | (0.04 | ) | 0.05 | |||||||
Provision for loan losses | $ | 3,000 | $ | 2,637 | $ | 376 | |||||
Non-performing loans ("NPLs") | 22,869 | 23,507 | 22,829 | ||||||||
NPLs/Total loans held for investment, excluding Warehouse Purchase Program loans | 0.54 | % | 0.89 | % | 1.03 | % | |||||
NPLs/Total loans held for investment | 0.44 | 0.69 | 0.82 | ||||||||
Non-performing assets ("NPAs") | $ | 29,034 | $ | 24,058 | $ | 23,216 | |||||
NPAs to total assets | 0.45 | % | 0.58 | % | 0.64 | % | |||||
NPAs/Loans held for investment and foreclosed assets, excluding Warehouse Purchase Program loans | 0.69 | 0.91 | 1.05 | ||||||||
NPAs/Loans held for investment and foreclosed assets | 0.55 | 0.70 | 0.83 | ||||||||
Allowance for loan losses | $ | 28,276 | $ | 25,549 | $ | 19,402 | |||||
Allowance for loan losses/Total loans held for investment, excluding Warehouse Purchase Program loans | 0.67 | % | 0.97 | % | 0.88 | % | |||||
Allowance for loan losses/Total loans held for investment | 0.54 | 0.75 | 0.69 | ||||||||
Allowance for loan losses/Total Loans held for investment, excluding acquired loans & Warehouse Purchase Program loans 1 | 1.00 | 1.00 | 0.92 | ||||||||
Allowance for loan losses/NPLs | 123.64 | 108.69 | 84.99 | ||||||||
1 Excludes loans acquired from Highlands Bank and LegacyTexas Bank, which were initially recorded at fair value.
The Company recorded a provision for loan losses of $3.0 million for the quarter ended March 31, 2015, compared to $2.6 million for the quarter ended December 31, 2014 and $376,000 for the quarter ended March 31, 2014. The increase in the provision for loan losses on a linked-quarter basis, as well as compared to the first quarter of 2014, was primarily related to increased organic loan production, as well as loans acquired from LegacyTexas that were re-underwritten during the first quarter of 2015. Once an acquired loan undergoes new underwriting and meets the criteria for a new loan, any remaining fair value adjustments are taken to interest income and the loan becomes subject to the Company's allowance for loan loss methodology.
Consistent with the fourth quarter of 2014, the Company continued to apply qualitative reserve factors to provide for additional allowance for loan losses due to the economic uncertainty in Texas related to the recent decline in the price of oil. To date, the Company has not recognized a loss from loans in the Energy portfolio, which we believe is a reflection of prudent risk mitigation techniques. These techniques include sound underwriting (reasonable advance rates based on number and diversification of wells), sound policy (requiring hedges on production sales) and conservative collateral valuations (frequent borrowing base determinations at prices below NYMEX posted rates). All borrowing base valuations are performed by experienced and nationally recognized third party firms intimately familiar with the properties and their production history. At March 31, 2015, less than 1% of the Company's loan portfolio (excluding Warehouse Purchase Program loans) consisted of criticized energy loans, and all energy loans were performing.
7
Subsequent Events
The Company is required, under generally accepted accounting principles, to evaluate subsequent events through the filing of its consolidated financial statements for the quarter ended March 31, 2015 on Form 10-Q. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of March 31, 2015 and will adjust amounts preliminarily reported, if necessary.
Conference Call
The Company will host an investor conference call to review the results on Wednesday, April 22, 2015 at 8 a.m. Central Time. Participants may pre-register for the call by visiting http://dpregister.com/10063456 and will receive a unique pin number, which can be used when dialing in for the call. This will allow attendees to enter the call immediately. Alternatively, participants may call (toll-free) 1-877-513-4119 at least five minutes prior to the call to be placed into the call by an operator. International participants are asked to call 1-412-902-4148, and participants in Canada are asked to call (toll-free) 1-855-669-9657.
The call and corresponding presentation slides will be webcast live on the home page of the Company's website, www.legacytexasfinancialgroup.com. An audio replay will be available one hour after the conclusion of the call at 1-877-344-7529, Conference #10063456. This replay, as well as the webcast, will be available until May 13, 2015.
About LegacyTexas Financial Group, Inc.
LegacyTexas Financial Group, Inc. is the holding company for LegacyTexas Bank, a commercially oriented community bank based in Plano, Texas. LegacyTexas Bank operates 48 banking offices in the Dallas/Fort Worth Metroplex and surrounding counties. For more information, please visit www.legacytexasfinancialgroup.com or www.legacytexas.com.
When used in filings by LegacyTexas Financial Group, Inc. (the "Company”) with the Securities and Exchange Commission (the “SEC”), in the Company's press releases or other public or stockholder 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 that could cause actual results to differ materially from historical earnings and those presently anticipated or projected, including, among other things: the expected cost savings, synergies and other financial benefits from the Company-LegacyTexas Group, Inc. merger (the “Merger”) might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters might be greater than expected; 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 Company's 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 Company's market area; fluctuations in the price of oil, natural gas and other commodities; competition; changes in management’s business strategies and other factors set forth in the Company's filings with the SEC.
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.
8
LegacyTexas Financial Group, Inc.
Consolidated Balance Sheets
March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
ASSETS | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
Cash and due from financial institutions | $ | 53,739 | $ | 28,416 | $ | 27,669 | $ | 35,276 | $ | 33,627 | |||||||||
Short-term interest-bearing deposits in other financial institutions | 230,175 | 103,605 | 62,616 | 130,632 | 88,238 | ||||||||||||||
Total cash and cash equivalents | 283,914 | 132,021 | 90,285 | 165,908 | 121,865 | ||||||||||||||
Securities available for sale, at fair value | 290,615 | 199,699 | 211,364 | 224,184 | 236,062 | ||||||||||||||
Securities held to maturity | 261,670 | 241,920 | 254,665 | 267,614 | 280,490 | ||||||||||||||
Total securities | 552,285 | 441,619 | 466,029 | 491,798 | 516,552 | ||||||||||||||
Loans held for sale | 23,983 | — | — | — | — | ||||||||||||||
Loans held for investment: | |||||||||||||||||||
Loans held for investment - Warehouse Purchase Program | 1,038,886 | 786,416 | 736,624 | 769,566 | 590,904 | ||||||||||||||
Loans held for investment | 4,196,710 | 2,633,680 | 2,489,063 | 2,349,509 | 2,207,580 | ||||||||||||||
Gross loans | 5,259,579 | 3,420,096 | 3,225,687 | 3,119,075 | 2,798,484 | ||||||||||||||
Less: allowance for loan losses and deferred fees on loans held for investment | (31,565 | ) | (28,476 | ) | (24,773 | ) | (22,139 | ) | (21,291 | ) | |||||||||
Net loans | 5,228,014 | 3,391,620 | 3,200,914 | 3,096,936 | 2,777,193 | ||||||||||||||
FHLB and Federal Reserve Bank stock, at cost | 65,470 | 44,084 | 41,473 | 44,532 | 33,632 | ||||||||||||||
Bank-owned life insurance | 54,339 | 36,193 | 36,010 | 35,863 | 35,718 | ||||||||||||||
Premises and equipment, net | 81,757 | 48,743 | 51,118 | 51,955 | 52,736 | ||||||||||||||
Goodwill | 179,258 | 29,650 | 29,650 | 29,650 | 29,650 | ||||||||||||||
Other assets | 67,471 | 40,184 | 35,045 | 34,602 | 36,242 | ||||||||||||||
Total assets | $ | 6,512,508 | $ | 4,164,114 | $ | 3,950,524 | $ | 3,951,244 | $ | 3,603,588 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
Non-interest-bearing demand | $ | 906,434 | $ | 494,376 | $ | 483,784 | $ | 433,194 | $ | 434,463 | |||||||||
Interest-bearing demand | 886,747 | 472,703 | 454,416 | 476,203 | 479,432 | ||||||||||||||
Savings and money market | 1,838,758 | 1,176,749 | 1,057,912 | 1,032,496 | 945,046 | ||||||||||||||
Time | 766,237 | 513,981 | 500,356 | 493,833 | 510,305 | ||||||||||||||
Total deposits | 4,398,176 | 2,657,809 | 2,496,468 | 2,435,726 | 2,369,246 | ||||||||||||||
FHLB advances | 1,171,623 | 862,907 | 799,704 | 874,866 | 607,996 | ||||||||||||||
Repurchase agreement | 25,000 | 25,000 | 25,000 | 25,000 | 25,000 | ||||||||||||||
Other borrowings | 91,612 | — | — | — | — | ||||||||||||||
Accrued expenses and other liabilities | 65,038 | 50,175 | 65,225 | 58,240 | 51,247 | ||||||||||||||
Total liabilities | 5,751,449 | 3,595,891 | 3,386,397 | 3,393,832 | 3,053,489 | ||||||||||||||
Shareholders’ equity | |||||||||||||||||||
Common stock | 476 | 400 | 400 | 400 | 399 | ||||||||||||||
Additional paid-in capital | 568,396 | 386,549 | 383,779 | 381,808 | 379,578 | ||||||||||||||
Retained earnings | 205,431 | 195,327 | 194,663 | 190,150 | 186,126 | ||||||||||||||
Accumulated other comprehensive income, net | 1,372 | 930 | 635 | 770 | 78 | ||||||||||||||
Unearned Employee Stock Ownership Plan (ESOP) shares | (14,616 | ) | (14,983 | ) | (15,350 | ) | (15,716 | ) | (16,082 | ) | |||||||||
Total shareholders’ equity | 761,059 | 568,223 | 564,127 | 557,412 | 550,099 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,512,508 | $ | 4,164,114 | $ | 3,950,524 | $ | 3,951,244 | $ | 3,603,588 | |||||||||
9
LegacyTexas Financial Group, Inc.
Consolidated Quarterly Statements of Income (unaudited)
For the Quarters Ended | First Quarter 2015 Compared to: | ||||||||||||||||||||||||||||||
Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Fourth Quarter 2014 | First Quarter 2014 | |||||||||||||||||||||||||
Interest and dividend income | (Dollars in thousands) | ||||||||||||||||||||||||||||||
Loans, including fees | $ | 58,035 | $ | 37,107 | $ | 35,872 | $ | 33,888 | $ | 30,388 | $ | 20,928 | 56.4 | % | $ | 27,647 | 91.0 | % | |||||||||||||
Taxable securities | 2,499 | 2,109 | 2,225 | 2,453 | 2,565 | 390 | 18.5 | (66 | ) | (2.6 | ) | ||||||||||||||||||||
Nontaxable securities | 718 | 561 | 562 | 561 | 564 | 157 | 28.0 | 154 | 27.3 | ||||||||||||||||||||||
Interest-bearing deposits in other financial institutions | 158 | 64 | 57 | 71 | 57 | 94 | 146.9 | 101 | 177.2 | ||||||||||||||||||||||
FHLB and Federal Reserve Bank stock and other | 208 | 138 | 139 | 136 | 130 | 70 | 50.7 | 78 | 60.0 | ||||||||||||||||||||||
61,618 | 39,979 | 38,855 | 37,109 | 33,704 | 21,639 | 54.1 | 27,914 | 82.8 | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||||
Deposits | 3,127 | 2,165 | 2,021 | 2,035 | 1,991 | 962 | 44.4 | 1,136 | 57.1 | ||||||||||||||||||||||
FHLB advances | 1,706 | 1,778 | 1,957 | 1,948 | 1,927 | (72 | ) | (4.0 | ) | (221 | ) | (11.5 | ) | ||||||||||||||||||
Repurchase agreement and other borrowings | 459 | 206 | 207 | 204 | 201 | 253 | 122.8 | 258 | 128.4 | ||||||||||||||||||||||
5,292 | 4,149 | 4,185 | 4,187 | 4,119 | 1,143 | 27.5 | 1,173 | 28.5 | |||||||||||||||||||||||
Net interest income | 56,326 | 35,830 | 34,670 | 32,922 | 29,585 | 20,496 | 57.2 | 26,741 | 90.4 | ||||||||||||||||||||||
Provision for loan losses | 3,000 | 2,637 | 2,511 | 1,197 | 376 | 363 | 13.8 | 2,624 | 697.9 | ||||||||||||||||||||||
Net interest income after provision for loan losses | 53,326 | 33,193 | 32,159 | 31,725 | 29,209 | 20,133 | 60.7 | 24,117 | 82.6 | ||||||||||||||||||||||
Non-interest income | |||||||||||||||||||||||||||||||
Service charges and other fees | 5,887 | 4,963 | 4,798 | 5,113 | 4,508 | 924 | 18.6 | 1,379 | 30.6 | ||||||||||||||||||||||
Net gain on sale of mortgage loans | 2,072 | — | — | — | — | 2,072 | N/M 1 | 2,072 | N/M 1 | ||||||||||||||||||||||
Bank-owned life insurance income | 419 | 183 | 147 | 145 | 153 | 236 | 129.0 | 266 | 173.9 | ||||||||||||||||||||||
Gain on sale of available for sale securities | 211 | — | — | — | — | 211 | N/M 1 | 211 | N/M 1 | ||||||||||||||||||||||
Gain (loss) on sale and disposition of assets | 28 | 15 | (85 | ) | 727 | 1 | 13 | 86.7 | 27 | N/M 1 | |||||||||||||||||||||
Other | (231 | ) | 133 | 198 | (556 | ) | 300 | (364 | ) | N/M 1 | (531 | ) | N/M 1 | ||||||||||||||||||
8,386 | 5,294 | 5,058 | 5,429 | 4,962 | 3,092 | 58.4 | 3,424 | 69.0 | |||||||||||||||||||||||
10
For the Quarters Ended | First Quarter 2015 Compared to: | ||||||||||||||||||||||||||||||
Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Fourth Quarter 2014 | First Quarter 2014 | |||||||||||||||||||||||||
Non-interest expense | |||||||||||||||||||||||||||||||
Salaries and employee benefits | 21,938 | 13,137 | 13,661 | 14,127 | 14,132 | 8,801 | 67.0 | 7,806 | 55.2 | ||||||||||||||||||||||
Merger and acquisition costs | 1,545 | 8,282 | 1,188 | 652 | 169 | (6,737 | ) | (81.3 | ) | 1,376 | 814.2 | ||||||||||||||||||||
Advertising | 915 | 425 | 262 | 493 | 355 | 490 | 115.3 | 560 | 157.7 | ||||||||||||||||||||||
Occupancy and equipment | 3,991 | 1,856 | 1,807 | 1,819 | 1,892 | 2,135 | 115.0 | 2,099 | 110.9 | ||||||||||||||||||||||
Outside professional services | 747 | 711 | 569 | 486 | 525 | 36 | 5.1 | 222 | 42.3 | ||||||||||||||||||||||
Regulatory assessments | 822 | 700 | 698 | 687 | 628 | 122 | 17.4 | 194 | 30.9 | ||||||||||||||||||||||
Data processing | 2,787 | 1,753 | 1,739 | 1,708 | 1,662 | 1,034 | 59.0 | 1,125 | 67.7 | ||||||||||||||||||||||
Office operations | 2,342 | 1,621 | 1,566 | 1,717 | 1,680 | 721 | 44.5 | 662 | 39.4 | ||||||||||||||||||||||
Other | 1,669 | 1,311 | 1,301 | 1,661 | 1,112 | 358 | 27.3 | 557 | 50.1 | ||||||||||||||||||||||
36,756 | 29,796 | 22,791 | 23,350 | 22,155 | 6,960 | 23.4 | 14,601 | 65.9 | |||||||||||||||||||||||
Income before income tax expense | 24,956 | 8,691 | 14,426 | 13,804 | 12,016 | 16,265 | 187.1 | 12,940 | 107.7 | ||||||||||||||||||||||
Income tax expense | 8,632 | 3,225 | 5,114 | 4,986 | 4,334 | 5,407 | 167.7 | 4,298 | 99.2 | ||||||||||||||||||||||
Net income | $ | 16,324 | $ | 5,466 | $ | 9,312 | $ | 8,818 | $ | 7,682 | $ | 10,858 | 198.6 | % | $ | 8,642 | 112.5 | % | |||||||||||||
1N/M - not meaningful
11
LegacyTexas Financial Group, Inc.
Selected Financial Highlights (unaudited)
At or For the Quarters Ended | |||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||
(Dollars in thousands, except per share amounts) | |||||||||||
SHARE DATA: | |||||||||||
Weighted average common shares outstanding- basic | 45,824,812 | 38,051,511 | 37,775,677 | ||||||||
Weighted average common shares outstanding- diluted | 46,002,821 | 38,275,814 | 38,019,519 | ||||||||
Shares outstanding at end of period | 47,602,721 | 40,014,851 | 39,946,560 | ||||||||
Income available to common shareholders1 | $ | 16,186 | $ | 5,412 | $ | 7,592 | |||||
Basic earnings per common share | 0.35 | 0.14 | 0.20 | ||||||||
Basic core (non-GAAP) earnings per common share2 | 0.39 | 0.29 | 0.21 | ||||||||
Diluted earnings per common share | 0.35 | 0.14 | 0.20 | ||||||||
Dividends declared per share | 0.13 | 0.12 | 0.12 | ||||||||
Total shareholders' equity | 761,059 | 568,223 | 550,099 | ||||||||
Common shareholders' equity per share (book value per share) | 15.99 | 14.20 | 13.77 | ||||||||
Tangible book value per share- Non-GAAP2 | 12.20 | 13.44 | 13.00 | ||||||||
Market value per share for the quarter: | |||||||||||
High | 25.09 | 27.61 | 28.85 | ||||||||
Low | 19.82 | 21.33 | 23.73 | ||||||||
Close | 22.73 | 23.85 | 28.85 | ||||||||
KEY RATIOS: | |||||||||||
Return on average common shareholders' equity | 8.66 | % | 3.83 | % | 5.62 | % | |||||
Core return on average common shareholders' equity2 | 9.42 | 7.85 | 5.70 | ||||||||
Return on average assets | 1.09 | 0.56 | 0.92 | ||||||||
Core return on average assets2 | 1.18 | 1.14 | 0.93 | ||||||||
Efficiency ratio3 | 53.87 | 52.22 | 63.39 | ||||||||
Estimated Tier 1 common risk-based capital ratio4 | 10.47 | 15.14 | 17.88 | ||||||||
Estimated total risk-based capital ratio4 | 11.46 | 15.87 | 18.55 | ||||||||
Estimated Tier 1 leverage ratio4 | 10.41 | 13.86 | 15.66 | ||||||||
Total equity to total assets | 11.69 | 13.65 | 15.27 | ||||||||
Tangible equity to tangible assets- Non-GAAP2 | 9.17 | 13.01 | 14.54 | ||||||||
Number of employees- full-time equivalent | 794 | 517 | 549 | ||||||||
1 Net of distributed and undistributed earnings to participating securities
2 See the section labeled "Supplemental Information- Non-GAAP Financial Measures" at the end of this document.
3 Calculated by dividing total non-interest expense by net interest income plus non-interest income, excluding gain (loss) on foreclosed and fixed assets, changes in value of the CRA Funds, amortization of intangible assets, gains (losses) from securities transactions and merger and acquisition costs.
4 Calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve.
12
LegacyTexas Financial Group, Inc.
Selected Loan Data (unaudited)
At the Quarter Ended | |||||||||||||||||||
March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | |||||||||||||||
Loans: | (Dollars in thousands) | ||||||||||||||||||
Commercial real estate | $ | 1,890,607 | $ | 1,265,868 | $ | 1,219,436 | $ | 1,162,035 | $ | 1,118,059 | |||||||||
Warehouse Purchase Program loans | 1,038,886 | 786,416 | 736,624 | 769,566 | 590,904 | ||||||||||||||
Commercial and industrial loans: | |||||||||||||||||||
Commercial | 1,182,842 | 741,678 | 668,421 | 579,561 | 517,247 | ||||||||||||||
Warehouse lines of credit | 29,388 | 40,146 | 27,122 | 31,426 | 26,333 | ||||||||||||||
Total commercial and industrial loans | 1,212,230 | 781,824 | 695,543 | 610,987 | 543,580 | ||||||||||||||
Construction and land loans: | |||||||||||||||||||
Commercial construction and land | 186,207 | 14,396 | 13,206 | 28,496 | 34,465 | ||||||||||||||
Consumer construction and land | 29,554 | 6,902 | 3,694 | 3,445 | 2,604 | ||||||||||||||
Total construction and land loans | 215,761 | 21,298 | 16,900 | 31,941 | 37,069 | ||||||||||||||
Consumer: | |||||||||||||||||||
Consumer real estate | 792,995 | 524,199 | 515,706 | 501,328 | 463,857 | ||||||||||||||
Other consumer loans | 85,117 | 40,491 | 41,478 | 43,218 | 45,015 | ||||||||||||||
Total consumer | 878,112 | 564,690 | 557,184 | 544,546 | 508,872 | ||||||||||||||
Gross loans held for investment | $ | 5,235,596 | $ | 3,420,096 | $ | 3,225,687 | $ | 3,119,075 | $ | 2,798,484 | |||||||||
Non-performing assets: | |||||||||||||||||||
Commercial real estate | $ | 6,745 | $ | 6,703 | $ | 7,452 | $ | 7,386 | $ | 8,110 | |||||||||
Commercial and industrial | 5,691 | 5,778 | 6,328 | 6,245 | 5,990 | ||||||||||||||
Construction and land | 141 | 149 | 150 | 213 | — | ||||||||||||||
Consumer real estate | 9,946 | 10,591 | 10,106 | 9,304 | 8,203 | ||||||||||||||
Other consumer loans | 346 | 286 | 346 | 457 | 526 | ||||||||||||||
Total non-performing loans | 22,869 | 23,507 | 24,382 | 23,605 | 22,829 | ||||||||||||||
Foreclosed assets | 6,165 | 551 | 106 | 240 | 387 | ||||||||||||||
Total non-performing assets | $ | 29,034 | $ | 24,058 | $ | 24,488 | $ | 23,845 | $ | 23,216 | |||||||||
Total non-performing assets to total assets | 0.45 | % | 0.58 | % | 0.62 | % | 0.60 | % | 0.64 | % | |||||||||
Total non-performing loans to total loans held for investment, excluding Warehouse Purchase Program loans | 0.54 | % | 0.89 | % | 0.98 | % | 1.00 | % | 1.03 | % | |||||||||
Total non-performing loans to total loans held for investment | 0.44 | % | 0.69 | % | 0.76 | % | 0.76 | % | 0.82 | % | |||||||||
Allowance for loan losses to non-performing loans | 123.64 | % | 108.69 | % | 92.63 | % | 86.59 | % | 84.99 | % | |||||||||
Allowance for loan losses to total loans held for investment, excluding Warehouse Purchase Program loans | 0.67 | % | 0.97 | % | 0.91 | % | 0.87 | % | 0.88 | % | |||||||||
Allowance for loan losses to total loans held for investment | 0.54 | % | 0.75 | % | 0.70 | % | 0.66 | % | 0.69 | % | |||||||||
Allowance for loan losses to total loans held for investment, excluding acquired loans and Warehouse Purchase Program loans 1 | 1.00 | % | 1.00 | % | 0.94 | % | 0.90 | % | 0.92 | % | |||||||||
13
At the Quarter Ended | |||||||||||||||||||
March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | |||||||||||||||
Troubled debt restructured loans ("TDRs"): | |||||||||||||||||||
Performing TDRs: | |||||||||||||||||||
Commercial real estate | $ | 738 | $ | 702 | $ | 706 | $ | 666 | $ | — | |||||||||
Commercial and industrial | 147 | 153 | 158 | 162 | 167 | ||||||||||||||
Construction and land | — | — | — | — | 2 | ||||||||||||||
Consumer real estate | 203 | 204 | 407 | 729 | 732 | ||||||||||||||
Other consumer loans | 37 | 39 | 41 | 43 | 44 | ||||||||||||||
Total performing TDRs | $ | 1,125 | $ | 1,098 | $ | 1,312 | $ | 1,600 | $ | 945 | |||||||||
Non-performing TDRs:2 | |||||||||||||||||||
Commercial real estate | $ | 6,616 | $ | 6,569 | $ | 6,646 | $ | 6,694 | $ | 7,401 | |||||||||
Commercial and industrial | 1,985 | 2,031 | 2,125 | 2,194 | 2,333 | ||||||||||||||
Construction and land | 101 | 103 | 104 | — | — | ||||||||||||||
Consumer real estate | 3,936 | 4,034 | 3,606 | 3,199 | 3,024 | ||||||||||||||
Other consumer loans | 201 | 245 | 300 | 411 | 471 | ||||||||||||||
Total non-performing TDRs | $ | 12,839 | $ | 12,982 | $ | 12,781 | $ | 12,498 | $ | 13,229 | |||||||||
Allowance for loan losses: | |||||||||||||||||||
Balance at beginning of period | $ | 25,549 | $ | 22,585 | $ | 20,440 | $ | 19,402 | $ | 19,358 | |||||||||
Provision expense | 3,000 | 2,637 | 2,511 | 1,197 | 376 | ||||||||||||||
Charge-offs | (504 | ) | (203 | ) | (493 | ) | (294 | ) | (471 | ) | |||||||||
Recoveries | 231 | 530 | 127 | 135 | 139 | ||||||||||||||
Balance at end of period | $ | 28,276 | $ | 25,549 | $ | 22,585 | $ | 20,440 | $ | 19,402 | |||||||||
Net charge-offs (recoveries): | |||||||||||||||||||
Commercial real estate | $ | (17 | ) | $ | (435 | ) | $ | — | $ | — | $ | — | |||||||
Commercial and industrial | 5 | 77 | 152 | 53 | 192 | ||||||||||||||
Construction and land | — | — | 50 | — | — | ||||||||||||||
Consumer real estate | 142 | (1 | ) | 69 | 54 | 77 | |||||||||||||
Other consumer loans | 143 | 32 | 95 | 52 | 63 | ||||||||||||||
Total net charge-offs | $ | 273 | $ | (327 | ) | $ | 366 | $ | 159 | $ | 332 | ||||||||
1 Excludes loans acquired from Highlands Bank and LegacyTexas Bank, which were initially recorded at fair value. | |||||||||||||||||||
2 Non-performing TDRs are included in the non-performing assets reported above. | |||||||||||||||||||
14
LegacyTexas Financial Group, Inc.
Average Balances and Yields/Rates (unaudited)
For the Quarters Ended | |||||||||||||||||||
March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | |||||||||||||||
Loans: | (Dollars in thousands) | ||||||||||||||||||
Commercial real estate | $ | 2,031,363 | $ | 1,229,962 | $ | 1,187,982 | $ | 1,169,484 | $ | 1,130,304 | |||||||||
Warehouse Purchase Program loans | 687,496 | 619,736 | 645,148 | 571,922 | 446,935 | ||||||||||||||
Commercial and industrial loans: | |||||||||||||||||||
Commercial | 1,102,446 | 703,326 | 633,208 | 561,026 | 449,867 | ||||||||||||||
Warehouse lines of credit | 32,405 | 27,303 | 29,296 | 29,327 | 17,988 | ||||||||||||||
Consumer real estate | 813,474 | 523,998 | 513,768 | 480,512 | 440,662 | ||||||||||||||
Other consumer loans | 90,219 | 41,169 | 42,308 | 44,162 | 46,453 | ||||||||||||||
Less: deferred fees and allowance for loan loss | (36,423 | ) | (25,280 | ) | (22,663 | ) | (21,683 | ) | (20,767 | ) | |||||||||
Total loans held for investment | 4,720,980 | 3,120,214 | 3,029,047 | 2,834,750 | 2,511,442 | ||||||||||||||
Loans held for sale | 19,379 | — | — | — | — | ||||||||||||||
Securities | 620,412 | 505,692 | 532,950 | 545,944 | 562,607 | ||||||||||||||
Overnight deposits | 221,270 | 106,152 | 90,246 | 118,529 | 96,292 | ||||||||||||||
Total interest-earning assets | $ | 5,582,041 | $ | 3,732,058 | $ | 3,652,243 | $ | 3,499,223 | $ | 3,170,341 | |||||||||
Deposits: | |||||||||||||||||||
Interest-bearing demand | $ | 795,641 | $ | 455,210 | $ | 460,192 | $ | 468,283 | $ | 460,745 | |||||||||
Savings and money market | 1,804,916 | 1,169,133 | 1,060,311 | 1,000,243 | 918,636 | ||||||||||||||
Time | 785,309 | 513,786 | 492,864 | 503,035 | 493,196 | ||||||||||||||
FHLB advances and other borrowings | 820,969 | 654,396 | 733,615 | 678,817 | 464,723 | ||||||||||||||
Total interest-bearing liabilities | $ | 4,206,835 | $ | 2,792,525 | $ | 2,746,982 | $ | 2,650,378 | $ | 2,337,300 | |||||||||
Total assets | $ | 6,015,890 | $ | 3,910,111 | $ | 3,837,424 | $ | 3,683,042 | $ | 3,354,668 | |||||||||
Non-interest-bearing demand deposits | $ | 985,596 | $ | 473,996 | $ | 456,115 | $ | 414,746 | $ | 414,919 | |||||||||
Total deposits | $ | 4,371,462 | $ | 2,612,125 | $ | 2,469,482 | $ | 2,386,307 | $ | 2,287,496 | |||||||||
Total shareholders' equity | $ | 753,792 | $ | 570,120 | $ | 562,022 | $ | 554,501 | $ | 547,201 | |||||||||
Yields/Rates: | |||||||||||||||||||
Loans: | |||||||||||||||||||
Commercial real estate | 5.36 | % | 5.43 | % | 5.47 | % | 5.47 | % | 5.38 | % | |||||||||
Warehouse Purchase Program loans | 3.36 | % | 3.51 | % | 3.56 | % | 3.56 | % | 3.64 | % | |||||||||
Commercial and industrial loans: | |||||||||||||||||||
Commercial | 4.94 | % | 4.41 | % | 4.21 | % | 4.21 | % | 4.24 | % | |||||||||
Warehouse lines of credit | 3.68 | % | 3.59 | % | 3.55 | % | 3.64 | % | 3.60 | % | |||||||||
Consumer real estate | 4.80 | % | 4.83 | % | 4.92 | % | 4.97 | % | 4.98 | % | |||||||||
Other consumer loans | 5.24 | % | 6.23 | % | 6.03 | % | 6.07 | % | 5.95 | % | |||||||||
Total loans held for investment | 4.90 | % | 4.76 | % | 4.74 | % | 4.78 | % | 4.84 | % | |||||||||
Loans held for sale | 3.67 | % | — | % | — | % | — | % | — | % | |||||||||
Securities | 2.21 | % | 2.22 | % | 2.20 | % | 2.31 | % | 2.32 | % | |||||||||
Overnight deposits | 0.29 | % | 0.24 | % | 0.25 | % | 0.24 | % | 0.24 | % | |||||||||
Total interest-earning assets | 4.42 | % | 4.28 | % | 4.26 | % | 4.24 | % | 4.25 | % | |||||||||
Deposits: | |||||||||||||||||||
Interest-bearing demand | 0.29 | % | 0.35 | % | 0.35 | % | 0.37 | % | 0.37 | % | |||||||||
15
For the Quarters Ended | |||||||||||||||||||
March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | |||||||||||||||
Savings and money market | 0.29 | % | 0.32 | % | 0.31 | % | 0.30 | % | 0.28 | % | |||||||||
Time | 0.65 | % | 0.64 | % | 0.65 | % | 0.69 | % | 0.75 | % | |||||||||
FHLB advances and other borrowings | 1.05 | % | 1.21 | % | 1.18 | % | 1.27 | % | 1.83 | % | |||||||||
Total interest-bearing liabilities | 0.50 | % | 0.59 | % | 0.61 | % | 0.63 | % | 0.70 | % | |||||||||
Net interest spread | 3.92 | % | 3.69 | % | 3.65 | % | 3.61 | % | 3.55 | % | |||||||||
Net interest margin | 4.04 | % | 3.84 | % | 3.80 | % | 3.76 | % | 3.73 | % | |||||||||
Cost of deposits (including non-interest-bearing demand) | 0.29 | % | 0.33 | % | 0.33 | % | 0.34 | % | 0.35 | % | |||||||||
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LegacyTexas Financial Group, Inc.
Supplemental Information- Non-GAAP Financial Measures
(unaudited and net of tax, calculated using a 35% estimated tax rate)
At or For the Quarters Ended | |||||||||||||||||||
March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | |||||||||||||||
Reconciliation of Core (non-GAAP) to GAAP Net Income and Earnings per Share: | (Dollars in thousands, except per share amounts) | ||||||||||||||||||
GAAP net income available to common shareholders 1 | $ | 16,186 | $ | 5,412 | $ | 9,215 | $ | 8,721 | $ | 7,592 | |||||||||
Distributed and undistributed earnings to participating securities 1 | 138 | 54 | 97 | 97 | 90 | ||||||||||||||
GAAP net income | 16,324 | 5,466 | 9,312 | 8,818 | 7,682 | ||||||||||||||
Merger and acquisition costs | 1,004 | 5,765 | 772 | 424 | 110 | ||||||||||||||
One-time payroll and severance costs | — | — | — | 234 | — | ||||||||||||||
One-time (gain) loss on assets | 554 | (45 | ) | (58 | ) | 415 | 7 | ||||||||||||
Gain on sale of available for sale securities | (137 | ) | — | — | — | — | |||||||||||||
Core (non-GAAP) net income | $ | 17,745 | $ | 11,186 | $ | 10,026 | $ | 9,891 | $ | 7,799 | |||||||||
Average shares for basic earnings per share | 45,824,812 | 38,051,511 | 37,971,790 | 37,873,671 | 37,775,677 | ||||||||||||||
GAAP basic earnings per share | $ | 0.35 | $ | 0.14 | $ | 0.24 | $ | 0.23 | $ | 0.20 | |||||||||
Core (non-GAAP) basic earnings per share | $ | 0.39 | $ | 0.29 | $ | 0.26 | $ | 0.26 | $ | 0.21 | |||||||||
Average shares for diluted earnings per share | 46,002,821 | 38,275,814 | 38,203,508 | 38,121,374 | 38,019,519 | ||||||||||||||
GAAP diluted earnings per share | $ | 0.35 | $ | 0.14 | $ | 0.24 | $ | 0.23 | $ | 0.20 | |||||||||
Core (non-GAAP) diluted earnings per share | $ | 0.39 | $ | 0.29 | $ | 0.26 | $ | 0.26 | $ | 0.21 | |||||||||
Calculation of Tangible Book Value per Share: | |||||||||||||||||||
Total shareholders' equity | $ | 761,059 | $ | 568,223 | $ | 564,127 | $ | 557,412 | $ | 550,099 | |||||||||
Less: Goodwill | (179,258 | ) | (29,650 | ) | (29,650 | ) | (29,650 | ) | (29,650 | ) | |||||||||
Identifiable intangible assets, net | (1,042 | ) | (813 | ) | (910 | ) | (1,005 | ) | (1,127 | ) | |||||||||
Total tangible shareholders' equity | $ | 580,759 | $ | 537,760 | $ | 533,567 | $ | 526,757 | $ | 519,322 | |||||||||
Shares outstanding at end of period | 47,602,721 | 40,014,851 | 40,006,941 | 39,995,720 | 39,946,560 | ||||||||||||||
Book value per share- GAAP | $ | 15.99 | $ | 14.20 | $ | 14.10 | $ | 13.94 | $ | 13.77 | |||||||||
Tangible book value per share- Non-GAAP | $ | 12.20 | $ | 13.44 | $ | 13.34 | $ | 13.17 | $ | 13.00 | |||||||||
Calculation of Tangible Equity to Tangible Assets: | |||||||||||||||||||
Total assets | $ | 6,512,508 | $ | 4,164,114 | $ | 3,950,524 | $ | 3,951,244 | $ | 3,603,588 | |||||||||
Less: Goodwill | (179,258 | ) | (29,650 | ) | (29,650 | ) | (29,650 | ) | (29,650 | ) | |||||||||
Identifiable intangible assets, net | (1,042 | ) | (813 | ) | (910 | ) | (1,005 | ) | (1,127 | ) | |||||||||
Total tangible assets | $ | 6,332,208 | $ | 4,133,651 | $ | 3,919,964 | $ | 3,920,589 | $ | 3,572,811 | |||||||||
Equity to assets- GAAP | 11.69 | % | 13.65 | % | 14.28 | % | 14.11 | % | 15.27 | % | |||||||||
Tangible equity to tangible assets- Non-GAAP | 9.17 | % | 13.01 | % | 13.61 | % | 13.44 | % | 14.54 | % | |||||||||
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At or For the Quarters Ended | |||||||||||||||||||
(Dollars in thousands) | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | ||||||||||||||
Calculation of Return on Average Assets and Return on Average Equity Ratios (GAAP and core) (unaudited) | |||||||||||||||||||
Net income | $ | 16,324 | $ | 5,466 | $ | 9,312 | $ | 8,818 | $ | 7,682 | |||||||||
Core (non-GAAP) net income | 17,745 | 11,186 | 10,026 | 9,891 | 7,799 | ||||||||||||||
Average total equity | 753,792 | 570,120 | 562,022 | 554,501 | 547,201 | ||||||||||||||
Average total assets | 6,015,890 | 3,910,111 | 3,837,424 | 3,683,042 | 3,354,668 | ||||||||||||||
Return on average common shareholders' equity | 8.66 | % | 3.83 | % | 6.63 | % | 6.36 | % | 5.62 | % | |||||||||
Core return on average common shareholders' equity | 9.42 | 7.85 | 7.14 | 7.14 | 5.70 | ||||||||||||||
Return on average assets | 1.09 | 0.56 | 0.97 | 0.96 | 0.92 | ||||||||||||||
Core return on average assets | 1.18 | 1.14 | 1.05 | 1.07 | 0.93 | ||||||||||||||
1 Unvested share-based awards that contain nonforfeitable rights to dividends (whether paid or unpaid) are participating securities and are included in the computation of GAAP earnings per share pursuant to the two-class method described in ASC 260-10-45-60B.
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