Nov. 5, 2009 (PR Newswire) -- PLANO, Texas, Nov. 5 /PRNewswire-FirstCall/ -- ViewPoint Financial Group (Nasdaq: VPFG) (the "Company"), the holding company for ViewPoint Bank, announced unaudited financial results today for the three and nine month periods ended September 30, 2009. Detailed results of the quarter will be available in the Company's Quarterly Report on Form 10-Q, which will be filed today and posted on our website, http://viewpointbank.com or http://viewpointfinancialgroup.com. Highlights for the quarter include:
-- Quarterly EPS more than doubled from this time last year: Basic and
diluted earnings per share of $0.12, up $0.07 from the same period last
year.
-- Quarterly net income increased by 143.3%: Net income for the quarter
ended September 30, 2009, was $2.9 million, an increase of $1.7 million,
or 143.3%, from the quarter ended September 30, 2008.
-- Purchase Program continued to fuel loan growth: $322.9 million of
Purchase Program loans helped gross loans (including loans held for
sale) to increase by $69.4 million, or 4.9%, from December 31, 2008.
-- Deposit growth in all categories: Deposits increased by $190.0 million,
or 12.3%, from December 31, 2008.
-- Continued capital strength: The Company's equity to total assets was
8.58%, and the Bank's tier one capital ratio was 7.65%, exceeding the
regulatory minimum of 5% for a well-capitalized institution.
"ViewPoint Financial Group posted its highest quarterly earnings per share ever," said Gary Base, President and Chief Executive Officer. "Not only did we dramatically improve our earnings, we increased deposits and continued to show loan growth. These accomplishments in such a competitive banking environment and challenging economy are a testament to our front-line employees who are out there making relationships, attracting deposits, and making a difference in their communities."
Results of Operations for the Three Months Ended September 30, 2009
Net income for the three months ended September 30, 2009, was $2.9 million, an increase of $1.7 million, or 143.3%, from $1.2 million for the three months ended September 30, 2008. This increase in net income was driven by higher gain on sale of loans and net interest income, as well as operating expense reductions in advertising and outside professional services expense. Our basic and diluted earnings per share for the three months ended September 30, 2009, increased by $0.07 to $0.12.
Interest income increased by $969,000, or 3.8%, from $25.4 million for the three months ended September 30, 2008, to $26.4 million for the three months ended September 30, 2009.
Three Months Ended
September 30,
----------------------- Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
Interest and dividend income (Dollars in Thousands)
Loans, including fees $21,031 $17,602 $3,429 19.5%
Securities 5,039 7,601 (2,562) -33.7%
Interest-bearing deposits in
other financial
institutions 315 176 139 79.0%
Federal Home Loan Bank
stock 7 44 (37) -84.1%
--- -- ---
$26,392 $25,423 $969 3.8%
======= ======= ====
This increase was primarily due to an increase in interest income on loans as the average balance of loans (including loans held for sale) increased by $237.9 million, or 20.4%, from the three months ended September 30, 2008. This increase was driven by higher average balances in residential real estate (primarily a result of our Purchase Program that was introduced in July 2008) and commercial real estate loans.
Interest expense increased by $521,000, or 4.5%, from $11.7 million for the three months ended September 30, 2008, to $12.2 million for the three months ended September 30, 2009.
Three Months Ended
September 30,
--------------------- Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
Interest expense (Dollars in Thousands)
Deposits $8,545 $8,647 $(102) -1.2%
Federal Home Loan Bank
advances 3,421 2,900 521 18.0%
Repurchase agreement 206 104 102 98.1%
--- --- ---
$12,172 $11,651 $521 4.5%
======= ======= ====
This increase was primarily caused by increased interest expense on Federal Home Loan Bank advances. The average balance of borrowings increased by $36.8 million, or 11.6%, from the three months ended September 30, 2008, and the average rate paid on borrowings increased by 31 basis points. While volume increased in all of our deposit categories, lower rates paid on our savings, money market, and time accounts contributed to lower interest expense on deposit accounts.
Noninterest income increased by $1.7 million, or 21.9%, from $8.0 million for the three months ended September 30, 2008, to $9.7 million for the three months ended September 30, 2009.
Three Months Ended
September 30,
-------------------- Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
Noninterest income (Dollars in Thousands)
Service charges and fees $4,798 $5,034 $(236) -4.7%
Brokerage fees 90 144 (54) -37.5%
Net gain on sale of loans 3,797 2,352 1,445 61.4%
Loan servicing fees 82 69 13 18.8%
Bank-owned life insurance
income 103 301 (198) -65.8%
Valuation adjustment on
mortgage servicing rights 109 - 109 100.0%
Gain (loss) on sale of
foreclosed assets 495 (8) 503 6287.5%
Gain (loss) on disposition
of assets (96) (1) (95) 9500.0%
Other 353 90 263 292.2%
--- -- ---
$9,731 $7,981 $1,750 21.9%
====== ====== ======
Net gain on sale of loans increased as our mortgage banking subsidiary, ViewPoint Bankers Mortgage, Inc. (VPBM), sold $162.1 million in loans to outside investors during the three months ended September 30, 2009, compared to $67.6 million for the same period in 2008. The increase in sales can be attributed to a higher volume of one- to four-family loan originations partially due to increased refinance volume resulting from lower market interest rates. Gain on sale of foreclosed assets increased primarily due to a $440,000 recovery recognized in September 2009 on an REO property; this recovery offset losses recognized on this property throughout 2008 and 2009. Fees of $563,000 generated by our Purchase Program partially offset the decrease in service charges and fees, which was primarily attributable to a decrease in non-sufficient funds fees and a decline in debit card income as we have seen a trend of lower volume in these types of transactions.
Noninterest expense decreased by $136,000, or 0.74%, from $18.2 million for the three months ended September 30, 2008, to $18.1 million for the three months ended September 30, 2009.
Three Months Ended
September 30,
-------------------- Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
Noninterest expense (Dollars in Thousands)
Salaries and employee
benefits $11,451 $11,427 $24 0.2%
Advertising 286 529 (243) -45.9%
Occupancy and equipment 1,474 1,491 (17) -1.1%
Outside professional
services 460 832 (372) -44.7%
Regulatory assessments 844 317 527 166.2%
Data processing 1,085 1,040 45 4.3%
Office operations 1,456 1,488 (32) -2.2%
Deposit processing charges 203 245 (42) -17.1%
Lending and collection 326 344 (18) -5.2%
Other 485 493 (8) -1.6%
--- --- --
$18,070 $18,206 $(136) -0.7%
======= ======= =====
The decrease in noninterest expense was primarily attributable to a decline in outside professional services expense, which was lower for the three months ended September 30, 2009, due to a decrease in consulting expense. In 2008, we employed consulting firms to streamline our processes and assist in meeting our staffing needs as we expanded our community and mortgage banking network and introduced our Purchase Program. We did not incur similar expenses during the same time period in 2009. Also, during the three months ended September 30, 2008, we recorded a litigation liability related to Visa, Inc.'s settlement with Discover Financial Services, which was covered litigation under Visa's retrospective responsibility plan-we had no similar transactions during the same time period in 2009. Advertising expense decreased as we shifted our focus to emphasize community marketing efforts rather than mass branding campaigns. The decline in noninterest expense was partially offset by an increase in regulatory assessments expense, as FDIC deposit insurance assessment rates have increased along with an increase in assessable deposits.
The slight increase in salaries and employee benefits was primarily due to organic growth, as we had $300,000 of increased salary expense in 2009 related to five new community bank offices opened in 2008 and 2009 and the addition of our Purchase Program division in July 2008. Also, salaries increased by $230,000 due to a higher number of salaried VPBM employees, as the headcount of employees paid on a salaried basis increased from 44 employees at August 31, 2008, to 60 employees at August 31, 2009. These increases were partially offset by salary expense savings due to the closure of nine in-store banking centers in 2009.
Results of Operations for the Nine Months Ended September 30, 2009
Non-GAAP net income for the nine months ended September 30, 2009, was $8.5 million, an increase of $4.3 million, or 100.0%, from $4.2 million for the nine months ended September 30, 2008. This increase was driven by higher gain on sale of loans and net interest income. Our non-GAAP basic and diluted earnings per share for the nine months ended September 30, 2009, increased by $0.17 to $0.35. A reconciliation of these non-GAAP income items to GAAP net income can be found in the tables accompanying this press release. Net income for the nine months ended September 30, 2009, was $306,000, a decrease of $3.8 million, or 92.5%, from net income of $4.1 million for the nine months ended September 30, 2008. This decline in net income was primarily due to an $8.1 million (net of tax, using a tax rate of 34%) impairment charge on the Company's collateralized debt obligations. We no longer have any collateralized debt obligations on our books. Net income before this impairment charge was $8.4 million, an increase of $4.3 million, or 105.2%, from the nine months ended September 30, 2008.
Interest income increased by $10.8 million, or 15.3%, from $70.8 million for the nine months ended September 30, 2008, to $81.6 million for the nine months ended September 30, 2009.
Nine Months Ended
September 30,
------------- Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
Interest and dividend income (Dollars in Thousands)
Loans, including fees $62,993 $47,208 $15,785 33.4%
Securities 18,066 22,360 (4,294) -19.2%
Interest-bearing deposits in
other financial institutions 543 967 (424) -43.8%
Federal Home Loan Bank stock 10 225 (215) -95.6%
--- --- ----
$81,612 $70,760 $10,852 15.3%
======= ======= =======
This increase was primarily due to an increase in interest income on loans as the average balance of loans (including loans held for sale) increased by $380.0 million, or 36.1%, from the nine months ended September 30, 2008. This increase was driven by higher average balances in residential real estate (primarily a result of our Purchase Program) and commercial real estate loans.
Interest expense increased by $4.5 million, or 13.7%, from $33.2 million for the nine months ended September 30, 2008, to $37.7 million for the nine months ended September 30, 2009.
Nine Months Ended
September 30,
------------- Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
Interest expense (Dollars in Thousands)
Deposits $26,404 $26,637 $(233) -0.87%
Federal Home Loan Bank
advances 10,782 6,341 4,441 70.0%
Federal Reserve Bank
borrowings 29 - 29 100.0%
Repurchase agreement 502 196 306 156.1%
--- --- ---
$37,717 $33,174 $4,543 13.7%
======= ======= ======
This increase was primarily caused by increased interest expense on Federal Home Loan Bank advances. The average balance of borrowings increased by $162.6 million, or 75.0%, from the nine months ended September 30, 2008, which was partially offset by a four basis point decrease in the average rate paid for borrowings from the nine months ended September 30, 2008. While volume increased in all of our deposit categories, lower rates paid on our savings, money market, and time accounts contributed to lower interest expense on deposit accounts.
Noninterest income decreased by $6.2 million, or 25.8%, from $24.2 million for the nine months ended September 30, 2008, to $18.0 million for the nine months ended September 30, 2009.
Nine Months Ended
September 30,
------------- Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
Noninterest income (Dollars in Thousands)
Service charges and fees $14,063 $14,918 $(855) -5.7%
Brokerage fees 229 364 (135) -37.1%
Net gain on sale of loans 12,834 6,520 6,314 96.8%
Loan servicing fees 183 196 (13) -6.6%
Bank-owned life insurance
income 444 849 (405) -47.7%
Gain on redemption of Visa,
Inc. shares - 771 (771) -100.0%
Valuation adjustment on
mortgage servicing rights (102) - (102) -100.0%
Impairment of collateralized
debt obligation (all credit) (12,246) - (12,246) -100.0%
Gain on sale of available for
sale securities 2,377 - 2,377 100.0%
Gain (loss) on sale of
foreclosed assets 219 (33) 252 763.6%
Gain (loss) on disposition of
assets (1,038) 11 (1,049) -9536.4%
Other 1,005 622 383 61.6%
----- --- ---
$17,968 $24,218 $(6,250) -25.8%
======= ======= =======
Net gain on sale of loans increased as VPBM sold $518.3 million in loans to outside investors during the nine months ended September 30, 2009, compared to $193.0 million for the same period in 2008. The increase in sales can be attributed to a higher volume of one- to four-family loan originations partially due to increased refinance volume resulting from lower market interest rates. Non-interest income for the nine months ended September 30, 2009, included non-recurring losses such as a $12.2 million impairment on the remaining collateralized debt obligations--which were impaired to their fair value and sold in June 2009--and $993,000 in lease termination fees and leasehold improvement write-offs for in-store banking centers closed during the nine months ended September 30, 2009, which are reported as losses on disposition of assets.
Fees of $1.2 million generated by our Purchase Program partially offset the decrease in service charges and fees, which was primarily attributable to a decrease in non-sufficient funds fees and a decline in debit card income as we have seen a trend of lower volume in these types of transactions. Excluding the impairment related to collateralized debt obligations and the gain on sale of securities, non-interest income would have been $24.5 million, a 1.1% increase over the same time period in 2008.
Noninterest expense increased by $5.6 million, or 11.0%, from $51.0 million for the nine months ended September 30, 2008, to $56.6 million for the nine months ended September 30, 2009.
Nine Months Ended
September 30,
------------- Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
Noninterest expense (Dollars in Thousands)
Salaries and employee
benefits $35,655 $31,786 $3,869 12.2%
Advertising 975 1,899 (924) -48.7%
Occupancy and equipment 4,538 4,113 425 10.3%
Outside professional services 1,425 1,588 (163) -10.3%
Regulatory assessments 3,250 916 2,334 254.8%
Data processing 3,127 3,110 17 0.5%
Office operations 4,424 4,497 (73) -1.6%
Deposit processing charges 666 755 (89) -11.8%
Lending and collection 1,001 941 60 6.4%
Other 1,579 1,438 141 9.8%
----- ----- ---
$56,640 $51,043 $5,597 11.0%
======= ======= ======
This increase in noninterest expense was primarily due to organic growth as we have opened multiple new locations over the past year and paid additional mortgage loan production incentives due to higher mortgage originations. The increase in salary expense due to increased mortgage commissions is more than offset by a $6.3 million increase in the net gain on sale of loans, which is reported in noninterest income.
Over the past year, the Company opened five new community bank offices in Northeast Tarrant County, Oak Cliff, Grapevine, West Frisco, and Wylie and added a new Purchase Program division in July 2008, resulting in additional salary expense. This increase was partially offset by salary expense savings due to the closure of nine in-store banking centers during the nine months ended September 30, 2009. Since August 2008, VPBM has increased its salaried headcount by 16 employees, resulting in increased salary expense.
Advertising expense decreased as we shifted our focus to emphasize community marketing efforts rather than mass branding campaigns. Regulatory assessments expense increased due to increased regulatory fees, which included a $1.1 million FDIC special assessment booked as expense in the second quarter of 2009. This special assessment, adopted in May 2009, assessed FDIC-insured banks five basis points on a base of total assets less Tier One capital.
Financial Condition as of September 30, 2009
Total assets increased by $136.4 million, or 6.2%, to $2.35 billion at September 30, 2009, from $2.21 billion at December 31, 2008. The rise in total assets was primarily due to an increase in gross loans (including loans held for sale) and securities.
September 30, December 31, Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
(Dollars in Thousands)
Mortgage loans:
One- to four-family $453,892 $498,961 $(45,069) -9.0%
Commercial 442,626 436,483 6,143 1.4%
One- to four-family
construction 3,860 503 3,357 667.4%
Commercial construction 757 - 757 100.0%
Mortgage loans held for
sale 350,116 159,884 190,232 119.0%
Home equity 98,917 101,021 (2,104) -2.1%
------ ------- ------
Total mortgage loans 1,350,168 1,196,852 153,316 12.8%
Automobile loans 76,780 111,870 (35,090) -31.4%
Other consumer loans 27,727 29,299 (1,572) -5.4%
Commercial non-mortgage
loans 24,601 18,574 6,027 32.4%
Warehouse lines of credit - 53,271 (53,271) -100.0%
- ------ -------
Total non-mortgage
loans 129,108 213,014 (83,906) -39.4%
Gross loans $1,479,276 $1,409,866 $69,410 4.9%
========== ========== =======
At September 30, 2009, mortgage loans held for sale consisted of $27.2 million of loans originated for sale by VPBM and $322.9 million of Purchase Program loans purchased for sale under our standard loan participation agreement, which enables our mortgage banking company clients to close one- to four-family real estate loans in their own name and temporarily finance their inventory of these closed loans until the loans are sold to investors approved by the Company. Our Purchase Program currently serves 20 clients and disbursed $1.42 billion in loans during the third quarter of 2009. The increase in mortgage loans held for sale over the last nine months was attributable to a $185.4 million increase in the volume of Purchase Program loans held under our standard loan participation agreement and VPBM's increased real estate production.
We saw increases in both our commercial real estate and commercial non-mortgage portfolios, while warehouse lines of credit decreased by $53.3 million. We have decided to discontinue warehouse lines of credit and focus on our Purchase Program due to the added benefits associated with direct relationship lending. Consumer loans decreased as we have continued to reduce our emphasis on consumer lending and are focused on originating residential and commercial loans. Nevertheless, we remain committed to meeting all of the banking needs of our customers, which includes offering them competitive consumer lending products.
Our non-performing loans to total loans ratio at September 30, 2009, was 1.30% compared to 0.38% at December 31, 2008. Non-performing loans increased by $9.9 million, from $4.7 million at December 31, 2008, to $14.6 million at September 30, 2009. The increase in non-performing loans was primarily due to three commercial real estate loans totaling $7.2 million that moved to non-performing during the nine months ended September 30, 2009. We have set aside a total of $955,000 in specific valuation allowances for these three loans.
The increase in our securities portfolio of $69.9 million was primarily caused by $458.6 million of securities purchased and was partially offset by maturities and paydowns totaling $315.0 million and sales proceeds totaling $73.8 million. The sale of 22 agency residential collateralized mortgage obligations and two agency residential mortgage-backed securities, with a cost basis of $71.2 million, resulted in a $1.6 million after-tax increase to earnings. We no longer have any collateralized debt obligations in our securities portfolio.
Total deposits increased by $190.0 million, or 12.3%, to $1.74 billion at September 30, 2009, from $1.55 billion at December 31, 2008.
September 30, December 31, Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
(Dollars in Thousands)
Non-interest-bearing
demand $184,869 $172,395 $12,474 7.2%
Interest-bearing demand 207,223 98,884 108,339 109.6%
Savings 144,580 144,530 50 0.0%
Money Market 533,755 482,525 51,230 10.6%
IRA savings 8,749 8,188 561 6.9%
Time 658,905 641,568 17,337 2.7%
------- ------- ------
Total deposits $1,738,081 $1,548,090 $189,991 12.3%
========== ========== ========
We saw increases in all deposit categories, with the largest being a $108.3 million, or 109.6%, increase in interest-bearing demand accounts. This was primarily attributable to our Absolute Checking product, which currently provides a 4.0% annual percentage yield on account balances up to $50,000. This product encourages relationship accounts with required electronic transactions. Money market deposits increased due to a $50.8 million, or 11.8%, increase in consumer money market accounts. Additionally, time accounts increased primarily due to our participation in the CDARS® network. Non-interest-bearing demand accounts include $27.8 million of growth in our Purchase Program checking account, which is a non-interest-bearing demand account opened by our mortgage banking company clients who participate in the Purchase Program.
Federal Home Loan Bank advances decreased due to monthly principal paydowns. During the nine months ended September 30, 2009, the Company used deposit growth to fund loans more often than utilizing borrowings as a funding source.
Total shareholders' equity increased by $7.4 million, or 3.8%, from $194.1 million at December 31, 2008, to $201.5 million at September 30, 2009.
September 30, December 31, Dollar Percent
2009 2008 Change Change
---- ---- ------ ------
(Dollars in Thousands)
Common stock $262 $262 $- 0.0%
Additional paid-in
capital 117,491 115,963 1,528 1.3%
Retained Earnings 109,547 108,332 1,215 1.1%
Accumulated other
comprehensive income
(loss) 2,354 (1,613) 3,967 245.9%
Unearned ESOP shares (6,393) (7,097) 704 9.9%
Treasury stock (21,708) (21,708) - 0.0%
------- ------- ---
Total shareholders'
equity $201,553 $194,139 $7,414 3.8%
======== ======== ======
This increase was primarily caused by the change in unrealized gains and losses on securities available for sale. The payment of dividends totaling $0.18 per share so far this year resulted in a $1.9 million reduction to shareholders' equity.
About ViewPoint Financial Group
ViewPoint Financial Group is the holding company for ViewPoint Bank. ViewPoint Bank operates 23 community bank offices and 16 loan production offices. For more information, please visit www.viewpointbank.com or www.viewpointfinancialgroup.com.
When used in filings by the Company with the Securities and Exchange Commission (the "SEC"), in the 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, competition, changes in management's business strategies and other factors set forth under Risk Factors in our Form 10-K, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to advise readers that the factors listed above could materially affect the 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 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.
VIEWPOINT FINANCIAL GROUP AND SUBSIDIARY
Condensed Consolidated Statements of Condition
(In thousands)
September 30, December 31,
2009 2008
---- ----
ASSETS (Unaudited)
Total cash and cash equivalents $32,090 $32,513
Securities available for sale, at
fair value 471,178 483,016
Securities held to maturity 254,103 172,343
Mortgage loans held for sale 350,116 159,884
Loans, net of allowance of $10,955-
September 30, 2009, $9,068-December
31, 2008 1,117,012 1,239,708
Federal Home Loan Bank stock 15,469 18,069
Bank-owned life insurance 28,022 27,578
Premises and equipment, net 50,455 45,937
Accrued interest receivable and other
assets 31,382 34,367
------ ------
Total assets $2,349,827 $2,213,415
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest-bearing demand 184,869 172,395
Interest-bearing demand 207,223 98,884
Savings and money market 687,084 635,243
Time 658,905 641,568
------- -------
Total deposits 1,738,081 1,548,090
Federal Home Loan Bank advances 344,735 410,841
Repurchase agreement 25,000 25,000
Accrued interest payable and other
liabilities 40,458 35,345
------ ------
Total liabilities 2,148,274 2,019,276
--------- ---------
Total shareholders' equity 201,553 194,139
------- -------
Total liabilities and shareholders'
equity $2,349,827 $2,213,415
========== ==========
VIEWPOINT FINANCIAL GROUP AND SUBSIDIARY
Condensed Consolidated Statements of Income
(In thousands except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------- ---------------
2009 2008 2009 2008
---- ---- ---- ----
Interest and dividend income (unaudited)
Loans, including fees $21,031 $17,602 $62,993 $47,208
Securities 5,039 7,601 18,066 22,360
Interest-bearing deposits in
other
financial institutions 315 176 543 967
Federal Home Loan Bank stock 7 44 10 225
- -- -- ---
26,392 25,423 81,612 70,760
Interest expense
Deposits 8,545 8,647 26,404 26,637
Federal Home Loan Bank advances 3,421 2,900 10,782 6,341
Other borrowings 206 104 531 196
--- --- --- ---
12,172 11,651 37,717 33,174
Net interest income 14,220 13,772 43,895 37,586
Provision for loan losses 1,775 1,867 4,711 4,505
----- ----- ----- -----
Net interest income after provision
for loan losses 12,445 11,905 39,184 33,081
Noninterest income 9,731 7,981 17,968 24,218
Noninterest expense 18,070 18,206 56,640 51,043
------ ------ ------ ------
Income before income tax expense 4,106 1,680 512 6,256
Income tax expense 1,213 491 206 2,168
----- --- --- -----
Net income $2,893 $1,189 $306 $4,088
====== ====== ==== ======
Basic and diluted earnings per share $0.12 $0.05 $0.01 $0.17
===== ===== ===== =====
VIEWPOINT FINANCIAL GROUP AND SUBSIDIARY
Reconciliation of Non-GAAP to GAAP Net Income
(In thousands except per share data)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(unaudited)
Net income $2,893 $1,189 $306 $4,088
Share-based compensation expense, net of
tax 316 307 915 853
Impairment of collateralized debt
obligations (all credit), net of tax - - 8,082 -
Gain on sale of available for sale
securities, net of tax - - (1,569) -
Valuation adjustment on mortgage
servicing rights, net of tax (72) - 67 -
Loss relating to closure of in-store
banking centers, net of tax 59 - 655 -
Visa litigation liability, net of tax - 84 - 84
Reversal of Visa litigation liability,
net of tax - - - (294)
Gain on redemption of Class B Visa, Inc.
shares, net of tax - - - (504)
--- --- --- ----
Non-GAAP net income $3,196 $1,580 $8,456 $4,227
====== ====== ====== ======
Basic and diluted non-GAAP earnings per
share $0.13 $0.07 $0.35 $0.18
===== ===== ===== =====
VIEWPOINT FINANCIAL GROUP AND SUBSIDIARY
Selected Financial Data
(Dollar amounts in thousands, except per share data)
(unaudited)
Three Months Ended
----------------------------------------------------
Sept June Mar Dec Sept
2009 2009 2009 2008 2008
---- ---- ---- ---- ----
Share Data for
Earnings per
Share Calculation:
Weighted
average
common
shares
outstanding 24,929,157 24,929,157 24,929,157 24,929,157 24,958,368
Less:
average
unallocated
ESOP shares (649,537) (672,886) (696,319) (722,090) (749,177)
Less:
average
unvested
restricted
shares (260,118) (307,219) (344,161) (346,161) (346,161)
-------- -------- -------- -------- --------
Average
shares 24,019,502 23,949,052 23,888,677 23,860,906 23,863,030
Diluted
average
shares 24,019,502 23,949,052 23,888,677 23,860,906 23,863,030
Net income
(loss) $2,893 $(3,831) $1,244 $(7,403) $1,189
EPS $0.12 $(0.16) $0.05 $(0.31) $0.05
Non-GAAP EPS $0.13 $0.13 $0.09 $0.08 $0.07
Share data at
period-end:
Total shares
issued 26,208,958 26,208,958 26,208,958 26,208,958 26,208,958
Less:
Treasury
stock (1,279,801) (1,279,801) (1,279,801) (1,279,801) (1,279,801)
---------- ---------- ---------- ---------- ----------
Total shares
outstanding 24,929,157 24,929,157 24,929,157 24,929,157 24,929,157
Location Data:
Number of
full-
service
community
bank offices 21 20 18 18 17
Number of in-
store
banking
centers 2 3 4 12 12
--- --- --- --- ---
Total
community
bank offices 23 23 22 30 29
Number of
loan
production
offices 16 15 14 15 20
Performance
Ratios (1):
Return on
assets 0.51% -0.68% 0.22% -1.41% 0.24%
Return on
equity 5.78% -7.86% 2.55% -15.34% 2.41%
Noninterest
income to
operating
revenues 26.94% 2.86% 21.29% -26.12% 23.89%
Operating
expenses to
average
total assets 3.16% 3.54% 3.33% 3.49% 3.74%
Efficiency
ratio (2) 75.45% 71.76% 83.31% 83.47% 83.69%
Capital Ratios:
Equity to
total assets 8.58% 8.65% 8.76% 8.77% 10.03%
Risk-based
capital to
risk-
weighted
assets (3) 14.33% 13.83% 10.97% 11.17% 13.68%
Tier 1
capital to
risk-
weighted
assets (3) 13.60% 13.14% 10.40% 10.58% 13.05%
(unaudited)
Nine Months Ended
-------------------
Sept Sept
2009 2008
---- ----
Share Data for Earnings
per Share
Calculation:
Weighted average
common shares
outstanding 24,929,157 25,128,775
Less:
average
unallocated
ESOP shares (672,743) (776,000)
Less:
average unvested
restricted shares (303,525) (389,718)
-------- --------
Average shares 23,952,889 23,963,057
Diluted average
shares 23,952,889 23,963,057
Net income (loss) $306 $4,088
EPS $0.01 $0.17
Non-GAAP EPS $0.35 $0.18
Share data at period-end:
Total shares issued 26,208,958 26,208,958
Less:
Treasury stock (1,279,801) (1,279,801)
---------- ----------
Total shares outstanding 24,929,157 24,929,157
Location Data:
Number of full-
service community
bank offices 21 17
Number of in-store
banking centers 2 12
--- ---
Total community
bank offices 23 29
Number of loan
production offices 16 20
Performance Ratios (1):
Return on assets 0.02% 0.30%
Return on equity 0.21% 2.69%
Noninterest income to
operating revenues 18.04% 25.50%
Operating expenses to
average total assets 3.34% 3.71%
Efficiency ratio (2) 76.43% 82.59%
Capital Ratios:
Equity to total assets 8.58% 10.03%
Risk-based capital to
risk-weighted
assets (3) 14.33% 13.68%
Tier 1 capital to
risk-weighted
assets (3) 13.60% 13.05%
(1) With the exception of end of period ratios, all ratios are based on
average monthly balances and are annualized where appropriate.
(2) Calculated by dividing total noninterest expense by net interest
income plus noninterest income, excluding impairment on securities.
(3) Calculated at the ViewPoint Bank level, which is subject to capital
adequacy requirements by the Office of Thrift Supervision.
VIEWPOINT FINANCIAL GROUP AND SUBSIDIARY
Selected Financial Data, continued
(Dollar amounts in thousands, except per share data)
(unaudited)
Three Months Ended
----------------------------------------------------
Sept June Mar Dec Sept
2009 2009 2009 2008 2008
---- ---- ---- ---- ----
Asset Quality
Data and Ratios:
Non-performing
loans $14,640 $7,337 $6,029 $4,745 $4,706
Non-performing
assets to
total assets 0.67% 0.40% 0.34% 0.29% 0.27%
Non-performing
loans to
total loans 4 1.30% 0.62% 0.49% 0.38% 0.39%
Allowance for
loan losses
to non-performing
loans 74.83% 136.24% 157.54% 191.11% 180.92%
Allowance for
loan losses
to total
loans (4) 0.97% 0.84% 0.76% 0.73% 0.70%
Average
Balances:
Loans (5) $1,406,372 $1,429,924 $1,459,716 $1,293,372 $1,168,465
Securities 619,359 616,683 659,476 630,598 645,433
Overnight
deposits 132,937 74,415 27,994 54,483 29,270
------- ------ ------ ------ ------
Total
interest-
earning
assets 2,158,668 2,121,022 2,147,186 1,978,453 1,843,168
Deposits:
Interest-
bearing
demand $180,997 $137,302 $104,381 $95,148 $83,742
Savings and
money
market 674,768 667,376 644,216 621,349 615,787
Time 659,951 672,779 662,419 567,040 503,943
FHLB advances
and other
borrowings 354,095 365,950 418,152 406,501 317,296
------- ------- ------- ------- -------
Total
interest-
bearing
liabilities $1,869,811 $1,843,407 $1,829,168 $1,690,038 $1,520,768
Yields:
Loans 5.98% 5.94% 5.68% 5.93% 6.03%
Securities 3.26% 4.09% 4.08% 4.59% 4.74%
Overnight
deposits 0.95% 0.91% 0.84% 1.67% 2.41%
Total
interest-
earning
assets 4.89% 5.22% 5.13% 5.39% 5.52%
Deposits:
Interest-
bearing
demand 2.16% 1.86% 1.56% 1.37% 1.23%
Savings and
money
market 1.73% 1.81% 2.10% 2.43% 2.44%
Time 2.82% 3.01% 3.24% 3.38% 3.68%
FHLB advances
and other
borrowings 4.10% 4.13% 3.74% 4.04% 3.79%
Total
interest-
bearing
liabilities 2.60% 2.71% 2.85% 3.08% 3.06%
Net interest
spread 2.29% 2.51% 2.28% 2.31% 2.46%
Net interest
margin 2.63% 2.87% 2.70% 2.76% 2.99%
(unaudited)
Nine Months Ended
-----------------
Sept Sept
2009 2008
---- ----
Asset Quality Data and
Ratios:
Non-performing loans $14,640 $4,706
Non-performing assets to
total assets 0.67% 0.27%
Non-performing
loans to total loans (4) 1.30% 0.39%
Allowance for loan losses
to non-performing
loans 74.83% 180.92%
Allowance for loan losses
to total loans (4) 0.97% 0.70%
Average Balances:
Loans (5) $1,432,004 $1,052,031
Securities 631,839 626,232
Overnight deposits 78,449 47,061
------ ------
Total interest-
earning assets 2,142,292 1,725,324
Deposits:
Interest-bearing
demand $140,893 $74,216
Savings and money
market 662,120 594,464
Time 665,050 509,980
FHLB advances
and other borrowings 379,399 216,757
------- -------
Total interest-
bearing liabilities $1,847,462 $1,395,417
Yields:
Loans 5.87% 5.98%
Securities 3.81% 4.81%
Overnight deposits 0.92% 2.74%
Total interest-
earning assets 5.08% 5.47%
Deposits:
Interest-bearing
demand 1.91% 0.98%
Savings and money market 1.87% 2.39%
Time 3.02% 4.03%
FHLB advances and other
borrowings 3.98% 4.02%
Total interest-bearing
liabilities 2.72% 3.17%
Net interest spread 2.36% 2.30%
Net interest margin 2.73% 2.90%
(4) Total loans does not include loans held for sale.
(5) Includes loans held for sale.
SOURCE ViewPoint Financial Group
