Market Overview

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

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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.





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