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ViewPoint Financial Group, Inc. Reports Record Quarterly Earnings and Strong Loan Growth For Third Quarter 2012

Oct 25, 2012

PLANO, Texas, Oct. 25, 2012 /PRNewswire/ -- ViewPoint Financial Group, Inc. (NASDAQ: VPFG) (the "Company"), the holding company for ViewPoint Bank, N.A. (the "Bank"), today announced third quarter 2012 net income of $11.3 million, an increase of $4.8 million, or 74.3%, from $6.5 million for the second quarter of 2012.  Earnings per share of $0.30 increased $0.13, or 76.5%, from $0.17 for the second quarter of 2012.

Third Quarter 2012 Highlights Compared to Second Quarter 2012

  • Earnings per share: Quarterly earnings per share were $0.30 per share, up $0.13 per share, or 76.5%, from June 30, 2012.   
  • Record net income of $11.3 million for the quarter, up 74% from prior quarter and up 120% from same time last year:  Net income for the three months ended September 30, 2012, was $11.3 million, up $4.8 million, or 74.3%, from the second quarter of 2012.  The increase primarily reflected lower non-interest expense, higher net interest income, and a decrease in the provision expense, partially offset by a decrease in non-interest income.
  • $140 million in loan growth during the third quarter of 2012, including $80 million of commercial loan growth: Gross loans increased $139.9 million, or 5.5%, to $2.67 billion at September 30, 2012, from $2.53 billion at June 30, 2012, primarily reflecting growth of $88.8 million in mortgage loans held for sale (due to Warehouse Purchase Program) and $79.7 million in commercial loans (commercial real estate and commercial and industrial). Commercial and industrial ("C&I") loans (excluding warehouse lines of credit) grew $45.7 million, or 25.3%, during the quarter and totaled $226.4 million at September 30, 2012.
  • Net interest margin increased by eight basis points for the three months ended September 30, 2012: Due to changes in the earning asset mix and lower deposit and borrowing rates, the net interest margin increased by eight basis points on a linked quarter basis to 3.70% for the three months ended September 30, 2012, from 3.62% for the three months ended June 30, 2012.
  • Announced quarterly cash dividend of $0.10 per share, up 25% from prior quarter: The Company today declared a quarterly cash dividend of $0.10 per share, up $0.02, or 25%, from $0.08 per share in the prior quarter.

"We are very pleased with our quarterly performance and with the continued execution of our plans," said President and CEO Kevin Hanigan. "Not only did the Company post record quarterly earnings, our net interest margin is also at a record high, and our C&I, commercial real estate and warehouse lending programs showed solid growth. In addition, our employees were able to accomplish these results in concert with the successful system conversion and integration of the former Highlands Bank to ViewPoint Bank."


At Or For The Quarters Ended


September


June


September


(Dollars in thousands, except share and per share amounts)

2012


2012


2011









Net interest income

$      31,619


$      29,186


$      20,479


Provision for loan losses

814


1,447


581


Non-interest income

7,819


8,513


6,207


Non-interest expense

21,210


26,323


18,567


Income tax expense

6,098


3,437


2,395









Net income

11,316


6,492


5,143









Diluted earnings per common share

0.30


0.17


0.16









Weighted average common shares outstanding - diluted

37,466,031


37,236,213


32,497,283









Tier 1 risk-based capital ratio1

22.16

%

22.55

%

21.20

%

Tangible common equity to tangible assets - Non-GAAP2

13.45


12.96


12.54









Net interest margin

3.70


3.62


2.87



 

1

Calculated at the ViewPoint Financial Group, Inc. level, which is subject to the capital adequacy requirements of the Federal Reserve. On December 19, 2011, the Bank converted its charter from a federal thrift charter to a national banking charter, with regulatory oversight by the OCC.

2

See the section labeled "Supplemental Information - Non-GAAP Financial Measures" at the end of this document.

 

Net Interest Income and Net Interest Margin


At Or For The Quarters Ended


September


June


September


(Dollars in thousands)

2012


2012


2011









Net interest income

$      31,619


$      29,186


$      20,479









Net interest margin

3.70

%

3.62

%

2.87

%








Selected average balances







   Total earning assets

$ 3,414,701


$ 3,221,482


$ 2,854,251


   Total securities

914,818


976,611


1,237,853


   Total loans

2,450,143


2,211,630


1,543,162









   Total deposits

2,183,998


2,244,578


2,066,657


   Total borrowings

863,949


626,055


458,620


   Total noninterest-bearing deposits

338,074


316,237


193,725



Third quarter net interest income increased by $2.4 million, or 8.3%, to $31.6 million, compared to the second quarter of 2012, primarily due to a $2.4 million increase in interest income earned on loans.  The increase in interest income on loans was driven by a $205.6 million increase in the average balance of mortgage loans held for sale (due to Warehouse Purchase Program), a $37.7 million increase in the average balance of commercial real estate loans and a $20.9 million increase in average C&I loans. The increase in interest income on loans was partially offset by a $559,000 decrease in interest income earned on securities, as the average balance of the securities portfolio (including FHLB and FRB stock) declined by $61.8 million, or 6.3%, during the third quarter of 2012 compared to the second quarter of 2012.

Interest expense on deposits decreased by $591,000 during the third quarter of 2012 compared to the second quarter of 2012, primarily due to interest-bearing demand and time deposits. The average balances of interest-bearing demand and time deposits decreased by $31.2 million and $53.3 million, respectively, while the average rate paid on interest-bearing demand and time deposits declined by 23 basis points and six basis points, respectively. A $21.8 million increase in non-interest-bearing checking average balances helped to offset these balance declines. 

The net interest margin for the third quarter of 2012 was 3.70%, an eight basis point increase from the second quarter of 2012, and an 83 basis point increase from the third quarter of 2011. The increase in the net interest margin was primarily attributable to changes in the earning asset mix, lower deposit and borrowing rates paid, and the accretion of the Highlands purchase accounting discount.

Non-interest Income

Third quarter non-interest income declined $694,000, or 8.2%, to $7.8 million compared to the second quarter of 2012, primarily reflecting a $1.8 million gain in the value of an investment in a community development-oriented private equity fund used for Community Reinvestment Act purposes recorded in the second quarter of 2012, with no corresponding gain in the third quarter.  Also, due to the third quarter 2012 sale of ViewPoint Mortgage (VPM), net gain on the sale of mortgage loans decreased by $1.1 million in the third quarter when compared to the quarter ended June 30, 2012.  The decreases in non-interest income for the third quarter were partially offset by the $818,000 second quarter goodwill impairment charge due to the sale of ViewPoint Mortgage, with no corresponding charge in the third quarter of 2012, and a $782,000 increase in gain on the sale of available-for-sale securities in the third quarter.

Non-interest Expenses

Non-interest expense totaled $21.2 million for the third quarter of 2012, a decrease of $5.1 million, or 19.4%, from $26.3 million for the second quarter of 2012.  The decrease in non-interest expenses was primarily due to a $3.5 million decrease in acquisition costs and a $1.4 million decrease in salaries and employee benefits.  The decrease in salaries and employee benefits primarily resulted from the sale of VPM, as well as $308,000 in unrestricted stock awarded to the Company's newly appointed CEO in the second quarter, with no corresponding charge in the third quarter of 2012.

Non-interest expense for the third quarter of 2012 included Highlands-related acquisition costs of $242,000 and severance and benefits costs of $273,000 paid for the departure of our Chief Operating Officer in August 2012, while non-interest expense for the second quarter of 2012 included Highlands-related acquisition costs of $3.7 million and severance costs of $493,000 related to the Highlands acquisition, the sale of VPM, and the departure of our General Counsel.

Financial Condition

Total assets decreased by $56.8 million to $3.64 billion at September 30, 2012, from $3.69 billion at June 30, 2012, primarily due to a $184.7 million decrease in securities, partially offset by a $139.9 million increase in gross loans.  The decrease in securities reflects a shift in the average earning asset mix as we transition from lower yielding securities to higher yielding commercial loans. 

Gross loans (including $1.01 billion in mortgage loans held for sale at September 30, 2012) increased by $139.9 million, or 5.5%, to $2.67 billion at September 30, 2012, from $2.53 billion at June 30, 2012.  Mortgage loans held for sale (Warehouse Purchase Program loans) increased $88.8 million from the prior quarter, while commercial loans grew $79.7 million.  C&I loans grew $45.7 million, or 25.3%, during the quarter and totaled $226.4 million at September 30, 2012.  These increases were partially offset by a $34.5 million decline in one- to four-family loan balances.

Total deposits decreased by $36.5 million, or 1.6%, to $2.19 billion at September 30, 2012, compared to $2.23 billion at June 30, 2012.  Decreases in interest-bearing demand and time deposits of $38.0 million and $18.1 million, respectively, primarily drove the decline, offset by increases of $12.0 million in savings and money market funds and $7.6 million in non-interest-bearing demand deposits.  

Shareholders' equity was $516.4 million at September 30, 2012, compared to $505.6 million at June 30, 2012. There were approximately 39.6 million common shares outstanding at September 30, 2012.  On October 25, 2012, the Company declared a quarterly cash dividend of $0.10 per share, up $0.02, or 25%, from $0.08 per share in the prior quarter.

On August 22, 2012, the Company issued a press release announcing its intention to repurchase up to 5% of its total common shares outstanding, or approximately 1,978,871 shares.  The stock repurchase program, which is open-ended, commenced on August 27, 2012, and allows the Company to repurchase its shares from time to time in the open market and in negotiated transactions, depending upon market conditions.  The Board of Directors of the Company also authorized management to enter into a trading plan with Sandler O'Neill & Partners, LP in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, to facilitate repurchases of its common stock pursuant to the above- mentioned stock repurchase program.  There were no repurchases of common stock in the third or second quarters of 2012.

The Company's tangible common equity ratio was 13.45% at September 30, 2012, an increase of 49 basis points from June 30, 2012. The Tier 1 risk-based capital ratio decreased 39 basis points, to 22.16% at September 30, 2012, from June 30, 2012.

Credit Quality


At Or For The Quarters Ended


September


June


September


(Dollars in thousands)

2012


2012


2011









Net charge-offs

$         208


$      241


$         205


Net charge-offs/Average total loans held for investment

0.01

%

0.02

%

0.02

%








Provision for loan losses

$         814


$   1,447


$         581









Nonperforming loans

28,081


22,557


17,439


Nonperforming assets

31,931


25,880


19,537


NPAs/Total loans held for investment and foreclosed property

1.93

%

1.61

%

1.67

%








Allowance for loan losses

$    19,835


$ 19,229


$    16,535









Allowance for loan losses/Total loans (a)

1.20

%

1.20

%

1.42

%

Allowance for loan losses/Nonperforming loans

70.63


85.25


94.82



(a)

Reflects the impact of acquired loans, which were initially recorded at fair value, with no related allowance for loan losses

The provision for loan losses was $814,000 for the three months ended September 30, 2012, a decrease of $633,000, or 43.7%, from the three months ended June 30, 2012.  In the third quarter of 2012, the decrease in provision expense was primarily driven by management's assessment, and subsequent decrease, of qualitative factors on certain portfolios where trends have indicated decreased loss exposure.  The balance of the allowance for loan losses at September 30, 2012, was $19.8 million, an increase of $606,000 from $19.2 million at June 30, 2012, which was primarily due to loan growth.  The allowance for loan losses to total loans ratio was 1.20% for both the quarters ended September 30, 2012 and June 30, 2012.

Our non-performing loans to total loans ratio at September 30, 2012, was 1.70%, compared to 1.41% at June 30, 2012.  Non-performing loans increased by $5.5 million to $28.1 million at September 30, 2012, from $22.6 million at June 30, 2012.  This increase was primarily due to three substandard line of credit C&I loans acquired from Highlands totaling $2.9 million that were placed on nonaccrual in the third quarter of 2012.  The $1.6 million in purchase accounting discounts applied to these loans cover any estimated losses.  At September 30, 2012, no purchased credit impaired loans from the Highlands transaction were included in non-performing loans.  Our allowance for loan losses to non-performing loans ratio was 70.63% at September 30, 2012, compared to 85.25% as of June 30, 2012.

ViewPoint Mortgage Sale

On June 5, 2012, the Bank and its wholly owned subsidiary, ViewPoint Bankers Mortgage, Inc., doing business as ViewPoint Mortgage ("VPM"), entered into a definitive agreement (the "Agreement") with Highlands Residential Mortgage, Ltd. ("HRM") to sell substantially all of the assets of VPM to HRM, subject to certain closing conditions. The terms of the Agreement provided for HRM to, subject to certain conditions contained in the Agreement, (i) purchase VPM's loan pipeline and all of VPM's existing construction loan portfolio, together with certain furniture, fixtures and equipment, (ii) assume substantially all of VPM's loan production office leases and its equipment leases, (iii) hire no less than 95% of the current VPM employees and satisfactorily release VPM from certain employment contracts, and (iv) make additional earn out payments to VPM. The sale closed during the third quarter of 2012, and the Agreement provides an opportunity for the Bank to partner with HRM to continue providing the Bank's customers with residential mortgage services. 

Conference Call

The Company will host an investor conference call to review these results on Friday, October 26, 2012, 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 Company's website, www.viewpointfinancialgroup.com. An audio replay will be available one hour after the conclusion of the call at 1-877-344-7529, Conference #10017636. This audio replay, as well as the webcast, will be available until the Company's next quarterly webcast/conference call.  

About ViewPoint Financial Group, Inc.

ViewPoint Financial Group, Inc. is the holding company for ViewPoint Bank, National Association. ViewPoint Bank, N.A. operates 31 community bank offices, including two First National Bank of Jacksboro locations in Jack and Wise Counties. 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 Company's 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 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; the industry-wide decline in mortgage production; competition; changes in management's business strategies; our ability to successfully integrate any assets, liabilities, customers, systems and management personnel we have acquired or may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; and other factors set forth under Risk Factors in the Company's Form 10-K that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The factors listed above could materially affect the Company's financial performance and could cause the Company's 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 that may be made to any forward-looking statements to reflect events or circumstances occurring after the date of such statements. 

 

VIEWPOINT FINANCIAL GROUP, INC.

Consolidated Balance Sheets










September 30,


June 30,


December 31,


September 30,


2012


2012


2011


2011

(Dollar amounts in thousands, except share data)

(unaudited)


(unaudited)




(unaudited)

ASSETS








Cash and due from financial institutions

$          24,429


$      30,407


$         16,661


$          16,374

Short-term interest-bearing deposits in other financial institutions

36,301


39,571


29,687


37,786

     Total cash and cash equivalents

60,730


69,978


46,348


54,160

Securities available for sale, at fair value

316,780


467,515


433,745


655,925

Securities held to maturity

396,437


430,368


500,488


539,257

     Total securities

713,217


897,883


934,233


1,195,182

Loans held for sale

1,014,445


925,637


834,352


691,204

Loans held for investment

1,651,755


1,600,963


1,228,544


1,166,161

     Total loans

2,666,200


2,526,600


2,062,896


1,857,365

Less: allowance for loan losses

(19,835)


(19,229)


(17,487)


(16,535)

     Net loans

2,646,365


2,507,371


2,045,409


1,840,830

FHLB and Federal Reserve Bank stock, at cost

43,383


45,241


37,590


29,210

Bank-owned life insurance

34,701


34,491


29,007


28,904

Premises and equipment, net

53,348


53,725


50,261


48,595

Goodwill

29,650


29,203


818


818

Accrued income and other assets

54,639


54,964


36,912


37,579

       Total assets

$     3,636,033


$ 3,692,856


$    3,180,578


$     3,235,278









LIABILITIES AND SHAREHOLDERS' EQUITY








Deposits








   Non-interest-bearing demand

$        349,880


$    342,228


$       211,670


$        207,940

   Interest-bearing demand

471,672


509,650


498,253


496,269

   Savings and money market

897,515


885,550


759,576


762,238

   Time

473,834


491,978


493,992


607,180

     Total deposits

2,192,901


2,229,406


1,963,491


2,073,627

FHLB advances - net of prepayment penalty

852,168


875,102


746,398


671,761

Repurchase agreement and other borrowings

25,000


38,682


25,000


35,000

Accrued expenses and other liabilities

49,611


44,091


39,380


48,204

       Total liabilities

3,119,680


3,187,281


2,774,269


2,828,592









Commitments and contingent liabilities

-


-


-


-









Shareholders' equity








   Common stock, $.01 par value; 90,000,000 shares authorized;








          Issued and Outstanding - 39,579,667 shares at 9/30/12, 39,344,167 shares at 6/30/12, 33,700,399 shares at 12/31/11, and 34,262,491 shares at 9/30/11 

396


393


337


342

   Additional paid-in capital

369,904


367,938


279,473


284,974

   Retained earnings

161,887


153,722


144,535


136,454

   Accumulated other comprehensive income, net 

2,449


2,171


1,347


4,665

   Unearned Employee Stock Ownership Plan (ESOP)

(18,283)


(18,649)


(19,383)


(19,749)

     Total shareholders' equity

516,353


505,575


406,309


406,686

       Total liabilities and shareholders' equity

$     3,636,033


$ 3,692,856


$    3,180,578


$     3,235,278

 

 

 

VIEWPOINT FINANCIAL GROUP, INC.

Consolidated Statements of Income






Three Months Ended
September 30,


Nine Months Ended
September 30,


2012


2011


2012


2011

(Dollars in thousands, except share and per share amounts)

(unaudited)


(unaudited)

Interest and dividend income








   Loans, including fees

$      32,739


$      21,838


$      87,349


$      63,132

   Taxable securities

3,616


6,633


12,259


20,140

   Nontaxable securities

473


473


1,419


1,419

   Interest-bearing deposits in other financial institutions

29


44


86


144

   FHLB and Federal Reserve Bank stock

151


18


398


52


37,008


29,006


101,511


84,887

Interest expense








   Deposits

2,656


5,702


9,132


18,045

   FHLB advances

2,515


2,467


7,384


7,360

   Repurchase agreement

217


206


671


611

   Other borrowings

1


152


29


450


5,389


8,527


17,216


26,466









Net interest income

31,619


20,479


84,295


58,421

Provision for loan losses

814


581


3,156


2,741

Net interest income after provision for loan losses

30,805


19,898


81,139


55,680









Non-interest income








   Service charges and fees

4,885


4,659


13,950


14,027

   Other charges and fees

144


144


437


544

   Net gain on sale of mortgage loans

1,030


1,710


5,436


5,538

   Bank-owned life insurance income

210


118


484


403

   Gain on sale of available for sale securities

898


-


1,014


3,415

   Gain (loss) on sale and disposition of assets

187


(533)


50


(749)

   Impairment of goodwill

-


-


(818)


(271)

   Other

465


109


2,509


1,403


7,819


6,207


23,062


24,310

Non-interest expense








   Salaries and employee benefits

12,685


11,751


38,519


35,147

   Acquisition costs

242


-


4,127


-

   Advertising

379


351


1,154


1,217

   Occupancy and equipment

2,009


1,511


5,431


4,333

   Outside professional services

578


769


1,752


2,126

   Regulatory assessments

668


409


1,873


1,866

   Data processing

1,530


1,168


4,392


3,366

   Office operations

1,834


1,521


5,313


4,452

   Other

1,285


1,087


3,424


3,189


21,210


18,567


65,985


55,696









Income before income tax expense

17,414


7,538


38,216


24,294

Income tax expense

6,098


2,395


13,336


7,740









Net income

$      11,316


$        5,143


$      24,880


$      16,554









Weighted  average common shares outstanding - basic

37,362,535


32,468,640


35,348,911


32,422,921

Weighted average common shares outstanding - diluted

37,466,031


32,497,283


35,475,596


32,479,092

Per share information








Basic

$          0.30


$          0.16


$          0.70


$          0.51

Diluted

0.30


0.16


0.70


0.51

Cash dividends declared per share

0.08


0.05


0.20


0.15






VIEWPOINT FINANCIAL GROUP, INC.

Consolidated Quarterly Statements of Income















For The Quarters Ended












September


June


March


December


September


Third Quarter 2012 Compared To:


(Dollars in thousands)


2012


2012


2012


2011


2011


Second Quarter 2012


Third quarter 2011


Interest and dividend income




















   Loans, including fees


$    32,739


$ 30,290


$ 24,320


$   25,106


$    21,838


$ 2,449


8.09

%

$ 10,901


49.92

%

   Taxable securities


3,616


4,185


4,458


5,690


6,633


(569)


(13.60)


(3,017)


(45.48)


   Nontaxable securities


473


473


473


473


473


-


0.00


-


0.00


   Interest-bearing deposits in other financial institutions


29


38


19


26


44


(9)


(23.68)


(15)


(34.09)


   FHLB and Federal Reserve Bank stock


151


141


106


42


18


10


7.09


133


N/M




37,008


35,127


29,376


31,337


29,006


1,881


5.35


8,002


27.59


Interest expense




















   Deposits


2,656


3,247


3,229


4,429


5,702


(591)


(18.20)


(3,046)


(53.42)


   FHLB advances


2,515


2,415


2,454


2,522


2,467


100


4.14


48


1.95


   Repurchase agreement


217


251


203


205


206


(34)


(13.55)


11


5.34


   Other borrowings


1


28


-


24


152


(27)


(96.43)


(151)


(99.34)




5,389


5,941


5,886


7,180


8,527


(552)


(9.29)


(3,138)


(36.80)






















Net interest income


31,619


29,186


23,490


24,157


20,479


2,433


8.34


11,140


54.40


Provision for loan losses


814


1,447


895


1,229


581


(633)


(43.75)


233


40.10


Net interest income after provision for loan losses


30,805


27,739


22,595


22,928


19,898


3,066


11.05


10,907


54.81






















Non-interest income




















   Service charges and fees


4,885


4,827


4,238


4,529


4,659


58


1.20


226


4.85


   Other charges and fees


144


165


128


179


144


(21)


(12.73)


-


0.00


   Net gain on sale of mortgage loans


1,030


2,174


2,232


2,101


1,710


(1,144)


(52.62)


(680)


(39.77)


   Bank-owned life insurance income


210


165


109


103


118


45


27.27


92


77.97


   Gain on sale of available for sale securities


898


116


-


2,853


-


782


N/M


898


N/M


   Gain (loss) on sale and disposition of assets


187


(56)


(81)


(49)


(533)


243


N/M


720


N/M


   Impairment of goodwill


-


(818)


-


-


-


818


(100.00)


-


N/M


   Other


465


1,940


104


522


109


(1,475)


(76.03)


356


N/M




7,819


8,513


6,730


10,238


6,207


(694)


(8.15)


1,612


25.97


Non-interest expense




















   Salaries and employee benefits


12,685


14,110


11,724


12,213


11,751


(1,425)


(10.10)


934


7.95


   Acquisition costs


242


3,741


144


-


-


(3,499)


(93.53)


242


N/M


   Advertising


379


490


285


302


351


(111)


(22.65)


28


7.98


   Occupancy and equipment


2,009


1,952


1,470


1,633


1,511


57


2.92


498


32.96


   Outside professional services


578


691


483


518


769


(113)


(16.35)


(191)


(24.84)


   Regulatory assessments


668


624


581


535


409


44


7.05


259


63.33


   Data processing


1,530


1,617


1,245


1,282


1,168


(87)


(5.38)


362


30.99


   Office operations


1,834


1,934


1,545


1,520


1,521


(100)


(5.17)


313


20.58


   Other


1,285


1,164


975


1,541


1,087


121


10.40


198


18.22




21,210


26,323


18,452


19,544


18,567


(5,113)


(19.42)


2,643


14.23






















Income before income tax expense


17,414


9,929


10,873


13,622


7,538


7,485


75.39


9,876


131.02


Income tax expense


6,098


3,437


3,801


3,848


2,395


2,661


77.42


3,703


154.61






















Net income


$    11,316


$   6,492


$   7,072


$     9,774


$      5,143


$ 4,824


74.31

%

$   6,173


120.03

%





VIEWPOINT FINANCIAL GROUP, INC.

Selected Financial Highlights (unaudited)








At Or For The Quarters Ended

At Or For The Nine Months Ended




September


June


September


September


September




2012


2012


2011


2012


2011


(Dollars in thousands, except share and per share amounts)












SHARE DATA:












Basic earnings per common share


$            0.30


$            0.17


$            0.16


$            0.70


$            0.51


Diluted earnings per common share


0.30


0.17


0.16


0.70


0.51


Dividends declared per share


0.08


0.06


0.05


0.20


0.15


Total shareholders' equity


516,353


505,575


406,686






Common shareholders' equity per share of common stock (Book value per share)


13.05


12.85


11.87






Tangible book value per share - Non-GAAP 1


12.25


12.06


11.83






Market value per share for the quarter:












   High


19.50


16.72


14.00


19.50


14.00


   Low


15.88


14.79


10.81


13.19


10.81


   Close


19.17


15.64


11.45


19.17


11.45


Shares outstanding at end of period


39,579,667


39,344,167


34,262,491


39,579,667


34,262,491


Weighted average common shares outstanding - basic


37,362,535


37,116,322


32,468,640


35,348,911


32,422,921


Weighted average common shares outstanding - diluted


37,466,031


37,236,213


32,497,283


35,475,596


32,479,092














KEY RATIOS:












Return on average common shareholders' equity


8.82

%

5.15

%

5.02

%

6.96

%

5.40

%

Return on average assets


1.25


0.76


0.69


0.99


0.77


Efficiency ratio2


55.37


72.03


68.29


62.76


69.99


Tier 1 risk-based capital ratio3


22.16


22.55


21.20






Total risk-based capital ratio3


23.08


23.47


21.93






Tier 1 leverage ratio3


13.54


13.95


12.31






Tangible equity to tangible assets - Non-GAAP 1


13.45


12.96


12.54


















Number of employees - full time equivalent


555


620


579



















1

See the section labeled "Supplemental Information - Non-GAAP Financial Measures" at the end of this document.

2

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.

3

Calculated at the ViewPoint Financial Group, Inc. level, which is subject to the capital adequacy requirements of the Federal Reserve. On December 19, 2011, the Bank converted its charter from a federal thrift charter to a national banking charter, with regulatory oversight by the OCC.





VIEWPOINT FINANCIAL GROUP, INC.

Selected Financial Highlights (unaudited)







Ending Balances At




September


June


March


December


September


(Dollars in thousands)


2012


2012


2012


2011


2011


Loans:












Real Estate:












One- to four- family


$    400,951


$    435,486


$    372,070


$    379,944


$    382,819


Commercial


794,619


760,609


624,057


585,328


546,914


Home equity/home improvement


141,152


144,147


139,339


140,966


140,945


Total real estate loans


1,336,722


1,340,242


1,135,466


1,106,238


1,070,678


Automobile


39,271


37,376


32,867


33,027


32,525


Other consumer


23,319


25,267


17,464


18,143


18,394


Total consumer loans


62,590


62,643


50,331


51,170


50,919


Commercial and industrial:












Warehouse lines of credit


25,936


16,965


19,072


16,141


-


Commercial


226,391


180,706


51,244


54,479


44,014


Gross loans held for investment


1,651,639


1,600,556


1,256,113


1,228,028


1,165,611


Mortgage loans held for sale


1,014,445


925,637


734,408


834,352


691,204


Gross loans


$ 2,666,084


$ 2,526,193


$ 1,990,521


$ 2,062,380


$ 1,856,815


Nonaccruing loans: 1












One- to four- family real estate


$        5,142


$        4,158


$        4,987


$        5,340


$        4,896


Commercial real estate


16,572


16,378


15,774


16,076


10,768


Home equity/home improvement


1,519


1,112


1,170


1,226


1,330


Consumer


251


36


29


26


-


Commercial and industrial


4,597


873


467


430


445


Total non-performing loans


28,081


22,557


22,427


23,098


17,439


Foreclosed assets


3,850


3,323


2,021


2,293


2,098


Total non-performing assets


$      31,931


$      25,880


$      24,448


$      25,391


$      19,537














Total non-performing assets to total assets


0.88

%

0.70

%

0.80

%

0.80

%

0.60

%

Total non-performing loans to total loans 2


1.70


1.41


1.79


1.88


1.50


Allowance for loan losses to non-performing loans


70.63


85.25


80.36


75.71


94.82


Allowance for loan losses to total loans 2


1.20


1.20


1.43


1.42


1.42














Troubled Debt Restructured Loans:












Performing troubled debt restructurings:












One- to four- family real estate


$           682


$           498


$           374


$           136


$           280


Commercial real estate


3,087


3,087


3,087


2,860


2,860


Home equity/home improvement


106


45


106


107


-


Consumer


88


107


121


142


48


Commercial and industrial


213


20


21


26


-


Total


$        4,176


$        3,757


$        3,709


$        3,271


$        3,188


Nonaccruing troubled debt restructurings:












One- to four- family real estate


$        1,709


$        1,103


$        1,093


$           843


$           855


Commercial real estate


8,849


8,952


9,063


9,266


9,264


Home equity/home improvement


234


75


77


81


-


Consumer


88


-


13


18


-


Commercial and industrial


105


281


287


212


214


Total


$      10,985


$      10,411


$      10,533


$      10,420


$      10,333














Allowance for loan losses:












Balance at beginning of period


$      19,229


$      18,023


$      17,487


$      16,535


$      16,159


Provision expense


814


1,447


895


1,229


581


Charge-offs


(412)


(358)


(496)


(408)


(314)


Recoveries


204


117


137


131


109


Balance at end of period


$      19,835


$      19,229


$      18,023


$      17,487


$      16,535














Net Charge-Offs (Recoveries)












One- to four- family real estate


$             15


$             57


$             77


$           161


$             (4)


Commercial real estate


2


-


-


-


(2)


Home equity/home improvement


79


63


-


72


9


Consumer


143


111


90


62


77


Commercial and industrial


(31)


10


192


(18)


125


Total


$           208


$           241


$           359


$           277


$           205



 

1

Includes nonaccruing troubled debt restructurings.

2

Total loans does not include loans held for sale.





VIEWPOINT FINANCIAL GROUP, INC.

Average Balances and Yields/Rates





For The Quarters Ended



September


June


March


December


September



2012


2012


2012


2011


2011


Loans:

(Dollars in thousands)

One- to four- family real estate

$    407,216


$    430,696


$    371,257


$    377,106


$    381,322


Loans held for sale

886,743


681,095


661,688


736,745


416,924


Commercial real estate

762,521


724,775


582,710


556,909


524,516


Home equity/home improvement

143,125


145,095


140,754


140,000


141,483


Consumer

63,142


62,192


50,635


51,225


51,246


Commercial and industrial:











   Warehouse lines of credit

22,639


16,013


15,865


5,796


-


   Commercial

183,870


169,567


53,654


46,130


43,806


Less: deferred fees and allowance for loan loss

(19,113)


(17,803)


(16,812)


(16,155)


(16,135)


Loans receivable

2,450,143


2,211,630


1,859,751


1,897,756


1,543,162


Securities

914,818


976,611


950,906


1,147,794


1,237,853


Overnight deposits

49,740


33,241


33,809


43,787


73,236


Total interest-earning assets

$ 3,414,701


$ 3,221,482


$ 2,844,466


$ 3,089,337


$ 2,854,251


Deposits:











Interest-bearing demand

$    474,342


$    505,569


$    473,687


$    485,897


$    484,926


Savings and money market

894,916


892,844


759,590


758,191


753,252


Time

476,666


529,928


472,097


559,169


634,754


FHLB advances and other borrowings

863,949


626,055


610,255


750,202


458,620


Total interest-bearing liabilities

$ 2,709,873


$ 2,554,396


$ 2,315,629


$ 2,553,459


$ 2,331,552













Total assets

$ 3,607,101


$ 3,427,807


$ 2,975,818


$ 3,216,502


$ 2,982,615


Non-interest-bearing demand deposits

338,074


316,237


213,220


204,458


193,725


Total deposits

2,183,998


2,244,578


1,918,594


2,007,715


2,066,657


Total shareholders' equity

513,431


504,596


411,049


406,139


410,078













Yields/Rates:











One- to four- family real estate

5.40

%

5.53

%

5.08

%

5.16

%

5.29

%

Loans held for sale

4.11


4.10


4.18


4.22


4.36


Commercial real estate

6.44


6.41


6.22


6.39


6.60


Home equity/home improvement

5.41


5.58


5.56


5.67


5.71


Consumer

6.03


6.43


6.13


6.47


6.83


Commercial and industrial:











      Warehouse lines of credit

3.82


3.31


3.29


3.43


-


      Commercial

5.98


6.08


5.80


6.24


6.36


Loans receivable 

5.34


5.48


5.23


5.29


5.66


Securities

1.85


1.97


2.12


2.16


2.30


Overnight deposits

0.23


0.46


0.22


0.24


0.24


Total interest-earning assets

4.34


4.36


4.13


4.06


4.06













Deposits:











Interest-bearing demand

0.61


0.84


0.94


1.39


1.78


Savings and money market

0.27


0.29


0.26


0.30


0.46


Time

1.11


1.17


1.39


1.56


1.69


FHLB advances and other borrowings

1.27


1.72


1.74


1.47


2.46


Total interest-bearing liabilities

0.80


0.93


1.02


1.12


1.46


Net interest spread

3.54


3.43


3.11


2.94


2.60


Net interest margin

3.70


3.62


3.30


3.13


2.87


Cost of deposits including non-interest-bearing demand 

0.49


0.58


0.67


0.88


1.10





VIEWPOINT FINANCIAL GROUP, INC.

SUPPLEMENTAL INFORMATION – Non-GAAP Financial Measures (unaudited)






Ending Balances At



September


June


March


December


September



2012


2012


2012


2011


2011



(Dollars in thousands, except share and per share amounts)

Calculation of Tangible Book Value per Share:











Total shareholders' equity at end of period


$    516,353


$    505,575


$    412,605


$    406,309


$    406,686

Less:   Goodwill


(29,650)


(29,203)


(818)


(818)


(818)

Identifiable intangible assets, net


(1,793)


(1,949)


(371)


(420)


(466)

Total tangible shareholders' equity at end of period


$    484,910


$    474,423


$    411,416


$    405,071


$    405,402












Shares outstanding at end of period


39,579,667


39,344,167


33,703,080


33,700,399


34,262,491












Book value per share - GAAP


$        13.05


$        12.85


$        12.24


$        12.06


$        11.87

Tangible book value per share - Non-GAAP


$        12.25


$        12.06


$        12.21


$        12.02


$        11.83












Calculating of Tangible Equity to Tangible Assets:











Total assets at end of period


$ 3,636,033


$ 3,692,856


$ 3,041,112


$ 3,180,578


$ 3,235,278

Less:   Goodwill


(29,650)


(29,203)


(818)


(818)


(818)

Identifiable intangible assets, net


(1,793)


(1,949)


(371)


(420)


(466)

Total tangible assets at end of period


$ 3,604,590


$ 3,661,704


$ 3,039,923


$ 3,179,340


$ 3,233,994












Equity to assets - GAAP


14.20%


13.69%


13.57%


12.77%


12.57%

Tangible common equity to tangible assets - Non-GAAP


13.45%


12.96%


13.53%


12.74%


12.54%

 

 

 

SOURCE ViewPoint Financial Group, Inc.

For further information: Patti McKee, ViewPoint Financial Group, Inc., +1-972-578-5000, Ext. 7223


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