LEGACYTEXAS FINANCIAL GROUP, INC. PLANO, Texas, Jan. 27, 2015 /PRNewswire/ -- LegacyTexas Financial Group, Inc. (formerly known as ViewPoint Financial Group, Inc.) (NASDAQ: LTXB) (the "Company"), the holding company for LegacyTexas Bank (the "Bank"), today announced net income of $5.5 million and core net income (which is net income adjusted for the impact of merger and acquisition costs and certain other items) of $11.2 million for the quarter ended December 31, 2014. Basic earnings per share for the quarter ended December 31, 2014, was $0.14, while core basic earnings per share for the same period was $0.29. Net income for the year ended December 31, 2014 totaled $31.3 million, or $0.82 basic earnings per share, and core net income for the same period totaled $38.9 million, or $1.03 basic earnings per share. The reconciliation of non-GAAP measures, which the Company believes facilitates the assessment of its banking operations and peer comparability, is included in tabular form at the end of this release.
For the Quarters Ended Linked Quarter Year-over-Year For the Years Ended December 31,
---------------------- -------------- -------------- --------------------------------
Q4 2014 Q3 2014 Q4 2013 $ change % change $ change % change 2014 2013 $ change % change
(Dollars in thousands, except per share amounts; all periods unaudited except for net income and earnings per share for full year 2013)
Net
income $5,466 $9,312 $7,244 $(3,846) (41.3)% $(1,778) (24.5)% $31,278 $31,688 $(410) (1.3)%
Core
net
income 11,186 10,026 7,776 1,160 11.6 3,410 43.9 38,902 32,096 6,806 21.2
Basic
EPS 0.14 0.24 0.19 (0.10) (41.7) (0.05) (26.3) 0.82 0.83 (0.01) (1.2)
Core
basic
EPS 0.29 0.26 0.21 0.03 11.5 0.08 38.1 1.03 0.85 0.18 21.2
------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Fourth Quarter 2014 Performance Highlights
-- Loans held for investment at December 31, 2014, excluding Warehouse
Purchase Program loans, grew $144.6 million, or 5.8%, from September 30,
2014, with commercial loans ending the year at $2.06 billion, an
increase of $133.9 million, or 6.9%, from the linked quarter. Since
December 31, 2013, loans held for investment, excluding Warehouse
Purchase Program loans, grew by $583.8 million, or 28.5%, including a
$503.8 million, or 32.3%, increase in commercial loans.
-- Warehouse Purchase Program loans at December 31, 2014, grew on both a
linked-quarter and year-over-year basis, increasing by $49.8 million, or
6.8%, from September 30, 2014, and by $112.9 million, or 16.8%, from
December 31, 2013.
-- Net interest income for the fourth quarter of 2014 increased by $1.2
million, or 3.3%, from the linked quarter and $5.8 million, or 19.2%,
from the fourth quarter of 2013. Non-interest income grew on both a
linked-quarter and year-over-year basis. Excluding the impact of merger
and acquisition costs, non-interest expense declined by $89,000 from the
third quarter of 2014 and by $2.0 million from the fourth quarter of
2013.
-- Deposits increased by $161.3 million, or 6.5%, from September 30, 2014,
with growth in all deposit categories. Compared to December 31, 2013,
deposits increased by $393.2 million, or 17.4%.
-- Net interest margin for the quarter ended December 31, 2014 was 3.84%, a
four basis point increase from the linked quarter and a one basis point
increase compared to the fourth quarter of 2013.
"2014 was a great year for the Company," said President and CEO Kevin Hanigan. "Core earnings were up for both the year and the fourth quarter, loans and deposits continued to show impressive growth, our net interest margin improved and we controlled our operating costs. Closing the merger with LegacyTexas on January 1 was a great way to start 2015. With most of the one-time costs related to the merger now behind us, we look forward to executing our plans for 2015."
On January 1, 2015, the Company completed its merger with LegacyTexas Group, Inc. and changed its name from ViewPoint Financial Group, Inc. to LegacyTexas Financial Group, Inc. On January 2, the Company's common stock began trading on the NASDAQ Global Select Market under the ticker symbol LTXB. The Company's bank subsidiary, ViewPoint Bank, N.A., was merged into LegacyTexas Bank, the banking subsidiary of LegacyTexas Group, Inc. ViewPoint Bank will publicly adopt the LegacyTexas name when the bank's branch and branding integration is complete on February 17. At that time, customers of both institutions will be able to conduct business at any LegacyTexas Bank location.
At completion of the merger, Mays Davenport (Executive Vice President of LegacyTexas Bank) joined the Company as Executive Vice President and Chief Financial Officer, and George Fisk (Chief Executive Officer and Vice Chairman of LegacyTexas Group, Inc.) and Greg Wilkinson (director of LegacyTexas Group, Inc.) began serving on the Boards of Directors of the Company and the merged LegacyTexas Bank. Kevin Hanigan continues to serve the Company and the merged LegacyTexas Bank as President and Chief Executive Officer. Additionally, Arcilia Acosta, who has served on the Board of Directors of ViewPoint Bank since 2013, was appointed to the Board of Directors of the Company, effective January 1, 2015.
Financial Highlights
At or For the Quarters Ended
----------------------------
December September December
(unaudited) 2014 2014 2013
---- ---- ----
(Dollars in thousands, except per share amounts)
Net interest
income $35,830 $34,670 $30,069
Provision for
loan losses 2,637 2,511 616
Non-interest
income 5,294 5,058 5,005
Non-interest
expense 29,796 22,791 24,128
Income tax
expense 3,225 5,114 3,086
----- ----- -----
Net income $5,466 $9,312 $7,244
====== ====== ======
Basic earnings
per common
share $0.14 $0.24 $0.19
Basic core
(non-GAAP)
earnings per
common
share(2) $0.29 $0.26 $0.21
Weighted
average common
shares
outstanding -
basic 38,051,511 37,971,790 37,686,866
Estimated Tier
1 risk-based
capital
ratio(1) 15.14% 16.04% 18.17%
Total equity to
total assets 13.65% 14.28% 15.44%
Tangible common
equity to
tangible
assets - Non-
GAAP (2) 13.01% 13.61% 14.70%
1 Calculated at the Company level,
which is subject to the capital
adequacy requirements of the
Federal Reserve.
2 See the section labeled
"Supplemental Information- Non-
GAAP Financial Measures" at the
end of this document.
Net Interest Income and Net Interest Margin
For the Quarters Ended
----------------------
December September December
(unaudited) 2014 2014 2013
---- ---- ----
(Dollars in thousands)
Interest
income:
Loans held for
investment,
excluding
Warehouse
Purchase
Program loans $31,667 $30,134 $26,050
Warehouse
Purchase
Program loans 5,440 5,738 5,138
Securities 2,808 2,926 3,273
Interest-
earning
deposit
accounts 64 57 38
--- --- ---
Total interest
income $39,979 $38,855 $34,499
======= ======= =======
Net interest
income $35,830 34,670 $30,069
Net interest
margin 3.84% 3.80% 3.83%
Selected
average
balances:
Total earning
assets $3,732,058 $3,652,243 $3,139,253
Total loans $3,120,214 $3,029,047 $2,482,274
Total
securities $505,692 $532,950 $592,769
Total deposits $2,612,125 $2,469,482 $2,240,333
Total
borrowings $654,396 $733,615 $468,855
Total non-
interest-
bearing demand
deposits $473,996 $456,115 $404,087
Total interest-
bearing
liabilities $2,792,525 $2,746,982 $2,305,101
Net interest income for the quarter ended December 31, 2014, was $35.8 million, a $1.2 million increase from the third quarter of 2014 and a $5.8 million increase from the fourth quarter of 2013. The $1.2 million increase from the linked quarter was due to an increase in interest income on loans, which was driven by increased volume in commercial real estate and commercial and industrial loans. The average balance of commercial and industrial loans increased by $68.1 million, or 10.3%, to $730.6 million from the third quarter of 2014, resulting in a $1.1 million increase in interest income. Additionally, the average balance of commercial real estate loans increased by $42.0 million, or 3.5%, from the linked quarter, contributing $439,000 of the increase in interest income. The increases in interest income driven by commercial loan volume was partially offset by a $298,000 decline in interest income on Warehouse Purchase Program loans, as the average balance of the portfolio declined by $25.4 million on a linked-quarter basis.
Interest expense for the quarter ended December 31, 2014, slightly decreased compared to the linked quarter, declining by $36,000, or 0.86%. A $133,000 linked-quarter increase in interest expense related to savings and money market accounts was offset by a $180,000 decrease in interest expense related to borrowings. The average balance of borrowings declined by $79.2 million, or 10.8%, from the linked quarter, which was primarily related to the decline in the Warehouse Purchase Program average balance for the same period, as these loans are partially funded by short-term advances.
The $5.8 million increase in net interest income compared to the fourth quarter of 2013 was due to a $5.9 million, or 19.0%, increase in interest income on loans, which was driven by higher commercial loan volume. For the quarter ended December 31, 2014, the average balance of commercial and industrial loans increased by $338.8 million, or 86.4%, compared to the quarter ended December 31, 2013, which resulted in a $3.2 million increase in interest income. Additionally, the average balance of commercial real estate loans increased by $152.9 million, or 14.2%, for the quarter ended December 31, 2014, compared to the same period in 2013, contributing $1.7 million of the increase in interest income. Increased volume in consumer real estate and Warehouse Purchase Program loans also added to the growth in interest income on a year-over-year basis, which was partially offset by reductions in yields earned on most loan portfolios.
Compared to the fourth quarter of 2013, interest expense for the quarter ended December 31, 2014, decreased by $281,000, or 6.3%, which was primarily due to a 35 basis point reduction in the average rate paid on time deposits, as well as a 65 basis point decrease in the average rate paid on borrowings. Average balances of savings, money market and time deposits, as well as the average balance of borrowings, increased compared to the fourth quarter of 2013, which partially offset the decline in interest expense related to lower rates.
The net interest margin for the fourth quarter of 2014 was 3.84%, a four basis point increase from the third quarter of 2014 and a one basis point increase from the fourth quarter of 2013. Accretion of interest related to the 2012 Highlands acquisition contributed three basis points to the net interest margin for the quarter ended December 31, 2014, compared to three basis points for the quarter ended September 30, 2014, and ten basis points for the quarter ended December 31, 2013. The average yield on earning assets for the fourth quarter of 2014 was 4.28%, a two basis point increase from the third quarter of 2014 and a 12 basis point decrease from the fourth quarter of 2013. The cost of deposits for the fourth quarter of 2014 was 0.33%, unchanged from the third quarter of 2014 and a seven basis point decrease from the fourth quarter of 2013.
Non-interest Income
Non-interest income for the fourth quarter of 2014 was $5.3 million, a $236,000, or 4.7%, increase from the third quarter of 2014 and a $289,000, or 5.8%, increase from the fourth quarter of 2013. The increase from the linked quarter was primarily due to a $153,000, or 3.3%, increase in service charges and fees, which was driven by an increase in commercial loan pre-prepayment and other one-time commercial loan fees. Additionally, the increase in non-interest income from the linked quarter included a $100,000 increase in the gain (loss) on sale and disposition of assets, attributable to a net gain of $11,000 on other real estate owned recognized in the fourth quarter of 2014, compared to a net loss of $85,000 on other real estate owned recognized in the third quarter of 2014.
The $289,000 increase in non-interest income for the fourth quarter of 2014 was primarily due to a $465,000, or 10.9%, increase in service charges and fees compared to the fourth quarter of 2013. This growth in service charges and fees was driven by increased commercial loan pre-payment and debit card fee income, and was partially offset by a $105,000 decline in the gain (loss) on sale and disposition of assets, primarily related to a gain recognized on a purchased credit impaired loan obtained in the Highlands acquisition that was paid in full during the fourth quarter of 2013, with no comparable gain recognized in the 2014 period.
Non-interest Expenses
Non-interest expense for the quarter ended December 31, 2014 was $29.8 million, a $7.0 million, or 30.7%, increase from the third quarter of 2014, and a $5.7 million, or 23.5%, increase from the fourth quarter of 2013. The linked-quarter increase includes a $7.1 million increase in merger and acquisition costs related to the merger with LegacyTexas Group, Inc., which was completed on January 1, 2015. Excluding the impact of these merger costs, non-interest expense declined by $89,000, which was driven by a $524,000, or 3.8%, decrease in salaries and employee benefits expense, primarily due to reductions in salary and incentive accruals compared to the linked quarter. In the latter half of 2014, several high-level employees left the Company in advance of the merger with LegacyTexas Group, Inc. This decline was partially offset by a $163,000 increase in advertising expense and a $142,000 increase in outside professional services expense.
The increase in non-interest expense from the fourth quarter of 2013 includes a $7.6 million increase in merger and acquisition costs related to the merger with LegacyTexas Group, Inc., which was completed on January 1, 2015. Excluding the impact of these merger costs, non-interest expense declined by $2.0 million, which was driven by a $1.2 million, or 8.4%, decrease in salaries and employee benefits expense, primarily due to reductions in salary and incentive accruals compared to the fourth quarter of 2013 related to a decrease in the number of employees. This was partially offset by a $622,000 increase in restricted stock expense, caused by $666,000 of expense that was reversed in the 2013 period due to the cancellation of certain stock awards that did not meet performance-based vesting conditions, with no comparable expense reversals recognized in the current period. Compared to the fourth quarter of 2013, advertising expense decreased by $335,000, while occupancy and equipment and office operations expense declined by $261,000 and $160,000, respectively.
Financial Condition
Gross loans held for investment at December 31, 2014, excluding Warehouse Purchase Program loans, increased by $144.6 million, or 5.8%, from September 30, 2014, and by $583.8 million, or 28.5%, from December 31, 2013, with increased commercial lending driving the loan growth. Commercial real estate loan balances at December 31, 2014 increased by $46.4 million, or 3.8%, from September 30, 2014, and by $174.7 million, or 16.0%, from December 31, 2013. Commercial and industrial loans at December 31, 2014 increased by $86.3 million, or 12.4%, from September 30, 2014, and by $342.4 million, or 77.9%, from December 31, 2013. Warehouse Purchase Program loans at December 31, 2014 increased by $49.8 million, or 6.8%, from September 30, 2014, and by $112.9 million, or 16.8%, from December 31, 2013. Consumer loans at December 31, 2014 increased by $7.5 million, or 1.3%, from September 30, 2014, and by $75.7 million, or 15.5%, from December 31, 2013.
Energy loans, which are reported as commercial and industrial loans, totaled $359.6 million at December 31, 2014, up $76.0 million from $283.6 million at September 30, 2014, and up $193.1 million from December 31, 2013. In May 2013, the Company formed its Energy Finance group, which is comprised of a group of seasoned lenders, executives, and credit risk professionals with more than 100 years of combined Texas energy experience, to focus on providing loans to private and public oil and gas companies throughout the United States. The group also offers the Bank's full array of commercial services, including Treasury Management and letters of credit, to its customers. The vast majority of the loans in the Energy portfolio are reserve based loans, secured by deeds of trust on properties containing both oil and natural gas reserves. Four loans managed by the Energy Finance group are not secured by oil and gas reserves. These loans, with a combined commitment of $39.5 million and a total outstanding balance of $16.5 million at December 31, 2014, are categorized as "Midstream and Other" loans. Loans in this category are typically related to the transmission of oil and natural gas and would have only an indirect impact from declining commodity prices.
Total deposits at December 31, 2014 increased by $161.3 million, or 6.5%, from September 30, 2014, and by $393.2 million, or 17.4%, from December 31, 2013. Savings and money market deposits increased by $118.8 million, or 11.2%, from September 30, 2014, and by $272.2 million, or 30.1%, from December 31, 2013. Over the past year, non-interest-bearing demand deposits have grown by $83.4 million, or 20.3%, and totaled $494.4 million at December 31, 2014, or 18.6% of total deposits. This increase was driven by higher balances in commercial checking products. Time deposits increased by $13.6 million, or 2.7%, from September 30, 2014, and by $39.4 million, or 8.3%, from December 31, 2013.
Total shareholders' equity increased by $4.1 million to $568.2 million at December 31, 2014, from $564.1 million at September 30, 2014. The Company's tangible common equity ratio was 13.01% at December 31, 2014, a decrease of 60 basis points from September 30, 2014, and 169 basis points from December 31, 2013.
Credit Quality
At or For the Quarters Ended
----------------------------
December September December
(unaudited) 2014 2014 2013
---- ---- ----
(Dollars in thousands)
Net charge-offs (recoveries) $(327) $366 $127
Net charge-offs
(recoveries)/Average loans held
for investment, excluding
Warehouse Purchase Program loans (0.05)% 0.06% 0.03%
Net charge-offs
(recoveries)/Average loans held
for investment (0.04) 0.05 0.02
Provision for loan losses $2,637 $2,511 $616
Non-performing loans ("NPLs") 23,507 24,382 22,124
NPLs/Total loans held for
investment, excluding Warehouse
Purchase Program loans 0.89% 0.98% 1.08%
NPLs/Total loans held for
investment 0.69 0.76 0.81
Non-performing assets ("NPAs") $24,058 $24,488 $22,604
NPAs to total assets 0.58% 0.62% 0.64%
NPAs/Loans held for investment and
foreclosed assets, excluding
Warehouse Purchase Program loans 0.91 0.98 1.10
NPAs/Loans held for investment and
foreclosed assets 0.70 0.76 0.83
Allowance for loan losses $25,549 $22,585 $19,358
Allowance for loan losses/Total
loans held for investment,
excluding Warehouse Purchase
Program loans 0.97% 0.91% 0.94%
Allowance for loan losses/Total
loans held for investment 0.75 0.70 0.71
Allowance for loan losses/Total
Loans held for investment,
excluding acquired loans &
Warehouse Purchase Program loans
(1) 1.00 0.94 1.00
Allowance for loan losses/NPLs 108.69 92.63 87.50
1 Excludes loans acquired
in 2012 from Highlands,
which were initially
recorded at fair value.
The Company recorded a provision for loan losses of $2.6 million for the quarter ended December 31, 2014, compared to $2.5 million for the quarter ended September 30, 2014, and $616,000 for the quarter ended December 31, 2013. The increase in the provision for loan losses on a linked-quarter basis, as well as compared to the fourth quarter of 2013, was primarily related to increased commercial loan production, as commercial balances increased by $133.9 million compared to September 30, 2014, and by $503.8 million from December 31, 2013. Additionally, in the fourth quarter of 2014, the Company increased its qualitative reserve factors to set aside additional allowance for loan losses due to the economic uncertainty in Texas related to the recent decline in the price of oil. To date, the Company has not recognized a loss from loans in the Energy portfolio, which we believe is a reflection of prudent risk mitigation techniques. These techniques include sound underwriting (reasonable advance rates based on number and diversification of wells), sound policy (requiring hedges on production sales), and conservative collateral valuations (frequent borrowing base determinations at prices below NYMEX posted rates). All borrowing base valuations are performed by highly qualified and nationally recognized third party firms intimately familiar with the properties and their production history. At December 31, 2014, less than 1% of the Company's loan portfolio (excluding Warehouse Purchase Program loans) consisted of criticized energy loans, and all energy loans were performing.
Subsequent Events
The Company is required under generally accepted accounting principles to evaluate subsequent events through the filing of its consolidated financial statements for the year ended December 31, 2014, on Form 10-K. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2014, and will adjust amounts preliminarily reported, if necessary.
Conference Call
The Company will host an investor conference call to review these results on Wednesday, January 28, 2015, at 8 a.m. Central Time. Participants may pre-register for the call by visiting http://dpregister.com/10057578 and will receive a unique pin number, which can be used when dialing in for the call. This will allow attendees to enter the call immediately. Alternatively, participants may call (toll-free) 1-877-513-4119 at least five minutes prior to the call to be placed into the call by an operator. International participants are asked to call 1-412-902-4148 and participants in Canada are asked to call (toll-free) 1-855-669-9657.
The call and corresponding presentation slides will be webcast live on the home page of the Company's website, www.legacytexasfinancialgroup.com. An audio replay will be available one hour after the conclusion of the call at 1-877-344-7529, Conference #10057578. This replay, as well as the webcast, will be available until February 18, 2015.
About LegacyTexas Financial Group, Inc.
LegacyTexas Financial Group, Inc. is a bank holding company based in Plano, Texas. The Company's holdings include LegacyTexas Bank, which also operates as ViewPoint Bank and First National Bank of Jacksboro. Beginning February 17, 2015, the Bank will operate under the LegacyTexas brand in each of its markets, with 48 banking offices in 19 North Texas cities, including 45 branches in the Dallas-Fort Worth Metroplex. For more information, please visit www.legacytexasfinancialgroup.com.
When used in filings by LegacyTexas Financial Group, Inc. (the "Company") with the Securities and Exchange Commission (the "SEC"), in the Company's press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected, including, among other things: the expected cost savings, synergies and other financial benefits from the Company-LegacyTexas Group, Inc. merger (the "Merger") might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters might be greater than expected; changes in economic conditions; legislative changes; changes in policies by regulatory agencies; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company's ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company's market area; fluctuations in the price of oil, natural gas and other commodities; competition; changes in management's business strategies and other factors set forth in the Company's filings with the SEC.
The Company does not undertake - and specifically declines any obligation - to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
LegacyTexas Financial Group, Inc. (formerly known as ViewPoint Financial Group, Inc.)
Consolidated Balance Sheets
December 31, 2014 September 30, 2014 June 30, March 31, December 31, 2013
2014 2014
---
(Dollars in thousands)
ASSETS (unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------
Cash and due from
financial institutions $28,416 $27,669 $35,276 $33,627 $30,012
Short-term interest-
bearing deposits in
other financial
institutions 103,605 62,616 130,632 88,238 57,962
------- ------ ------- ------ ------
Total cash and cash
equivalents 132,021 90,285 165,908 121,865 87,974
Securities available for
sale, at fair value 199,699 211,364 224,184 236,062 248,012
Securities held to
maturity 241,920 254,665 267,614 280,490 294,583
------- ------- ------- ------- -------
Total securities 441,619 466,029 491,798 516,552 542,595
Loans held for investment:
Loans held for
investment -Warehouse
Purchase Program 786,416 736,624 769,566 590,904 673,470
Loans held for
investment 2,633,680 2,489,063 2,349,509 2,207,580 2,049,902
--------- --------- --------- --------- ---------
Gross loans 3,420,096 3,225,687 3,119,075 2,798,484 2,723,372
Less: allowance for loan
losses and deferred
fees on loans held for
investment (28,476) (24,773) (22,139) (21,291) (20,625)
------- ------- ------- ------- -------
Net loans 3,391,620 3,200,914 3,096,936 2,777,193 2,702,747
FHLB and Federal Reserve
Bank stock, at cost 44,084 41,473 44,532 33,632 34,883
Bank-owned life
insurance 36,193 36,010 35,863 35,718 35,565
Premises and equipment,
net 48,743 51,118 51,955 52,736 53,272
Goodwill 29,650 29,650 29,650 29,650 29,650
Other assets 40,184 35,045 34,602 36,242 38,546
------ ------ ------ ------ ------
Total assets $4,164,114 $3,950,524 $3,951,244 $3,603,588 $3,525,232
========== ========== ========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest-bearing
demand $494,376 $483,784 $433,194 $434,463 $410,933
Interest-bearing demand 472,703 454,416 476,203 479,432 474,515
Savings and money market 1,176,749 1,057,912 1,032,496 945,046 904,576
Time 513,981 500,356 493,833 510,305 474,615
------- ------- ------- ------- -------
Total deposits 2,657,809 2,496,468 2,435,726 2,369,246 2,264,639
FHLB advances 862,907 799,704 874,866 607,996 639,096
Repurchase agreement and
other borrowings 25,000 25,000 25,000 25,000 25,000
Accrued expenses and
other liabilities 50,175 65,225 58,240 51,247 52,037
------ ------ ------ ------ ------
Total liabilities 3,595,891 3,386,397 3,393,832 3,053,489 2,980,772
Shareholders' equity
Common stock 400 400 400 399 399
Additional paid-in
capital 386,549 383,779 381,808 379,578 377,657
Retained earnings 195,327 194,663 190,150 186,126 183,236
Accumulated other
comprehensive income
(loss), net 930 635 770 78 (383)
Unearned Employee Stock
Ownership Plan (ESOP)
shares (14,983) (15,350) (15,716) (16,082) (16,449)
------- ------- ------- ------- -------
Total shareholders'
equity 568,223 564,127 557,412 550,099 544,460
Total liabilities and
shareholders' equity $4,164,114 $3,950,524 $3,951,244 $3,603,588 $3,525,232
========== ========== ========== ========== ==========
LegacyTexas Financial Group, Inc. (formerly known as ViewPoint Financial Group, Inc.)
Consolidated Quarterly Statements of Income (unaudited)
For the Quarters Ended Fourth Quarter 2014 Compared to:
---------------------- --------------------------------
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Third Quarter Fourth Quarter
2014 2014 2014 2014 2013 2014 2013
---- ---- ---- ---- ---- ---- ----
Interest and dividend income (Dollars in thousands)
Loans, including fees $37,107 $35,872 $33,888 $30,388 $31,188 $1,235 3.4% $5,919 19.0%
Taxable securities 2,109 2,225 2,453 2,565 2,583 (116) (5.2) (474) (18.4)
Nontaxable securities 561 562 561 564 562 (1) (0.2) (1) (0.2)
Interest-bearing deposits in other financial institutions 64 57 71 57 38 7 12.3 26 68.4
FHLB and Federal Reserve Bank stock 138 139 136 130 128 (1) (0.7) 10 7.8
--- --- --- --- --- --- ---
39,979 38,855 37,109 33,704 34,499 1,124 2.9 5,480 15.9
Interest expense
Deposits 2,165 2,021 2,035 1,991 2,252 144 7.1 (87) (3.9)
FHLB advances 1,778 1,957 1,948 1,927 1,971 (179) (9.1) (193) (9.8)
Repurchase agreement 206 205 204 201 206 1 0.5 - -
Other borrowings - 2 - - 1 (2) N/M (1) (1) N/M (1)
--- --- --- --- --- --- ---
4,149 4,185 4,187 4,119 4,430 (36) (0.9) (281) (6.3)
Net interest income 35,830 34,670 32,922 29,585 30,069 1,160 3.3 5,761 19.2
Provision for loan losses 2,637 2,511 1,197 376 616 126 5.0 2,021 328.1
----- ----- ----- --- --- --- -----
Net interest income after provision for loan losses 33,193 32,159 31,725 29,209 29,453 1,034 3.2 3,740 12.7
Non-interest income
Service charges and fees 4,724 4,571 4,874 4,298 4,259 153 3.3 465 10.9
Other charges and fees 239 227 239 210 246 12 5.3 (7) (2.8)
Bank-owned life insurance income 183 147 145 153 186 36 24.5 (3) (1.6)
Gain (loss) on sale and disposition of assets 15 (85) 727 1 120 100 N/M (1) (105) (87.5)
Other 133 198 (556) 300 194 (65) (32.8) (61) (31.4)
--- --- ---- --- --- --- ---
5,294 5,058 5,429 4,962 5,005 236 4.7 289 5.8
Non-interest expense
Salaries and employee benefits 13,137 13,661 14,127 14,132 14,339 (524) (3.8) (1,202) (8.4)
Merger and acquisition costs 8,282 1,188 652 169 663 7,094 597.1 7,619 1,149.2
Advertising 425 262 493 355 760 163 62.2 (335) (44.1)
Occupancy and equipment 1,856 1,807 1,819 1,892 2,117 49 2.7 (261) (12.3)
Outside professional services 711 569 486 525 824 142 25.0 (113) (13.7)
Regulatory assessments 700 698 687 628 619 2 0.3 81 13.1
Data processing 1,753 1,739 1,708 1,662 1,747 14 0.8 6 0.3
Office operations 1,621 1,566 1,717 1,680 1,781 55 3.5 (160) (9.0)
Other 1,311 1,301 1,661 1,112 1,278 10 0.8 33 2.6
----- ----- ----- ----- ----- --- ---
29,796 22,791 23,350 22,155 24,128 7,005 30.7 5,668 23.5
Income before income tax expense 8,691 14,426 13,804 12,016 10,330 (5,735) (39.8) (1,639) (15.9)
Income tax expense 3,225 5,114 4,986 4,334 3,086 (1,889) (36.9) 139 4.5
----- ----- ----- ----- ----- ------ ---
Net income $5,466 $9,312 $8,818 $7,682 $7,244 $(3,846) (41.3)% $(1,778) (24.5)%
====== ====== ====== ====== ====== ======= =======
(1)N/M - not meaningful
LegacyTexas Financial Group, Inc. (formerly known as ViewPoint Financial Group, Inc.)
Consolidated Statements of Income for the Years Ended December 31,
(Dollars in
thousands) 2014 2013 2012
---- ---- ----
Interest and
dividend income (unaudited)
Loans, including
fees $137,255 $124,522 $120,596
Taxable securities 9,352 9,780 14,850
Nontaxable
securities 2,248 2,133 1,891
Interest-bearing
deposits in other
financial
institutions 249 126 117
FHLB and Federal
Reserve Bank
stock 543 528 538
--- --- ---
149,647 137,089 137,992
Interest expense
Deposits 8,212 9,545 11,453
FHLB advances 7,610 8,503 9,807
Repurchase
agreement 816 816 876
Other borrowings 2 5 33
--- --- ---
16,640 18,869 22,169
------ ------ ------
Net interest
income 133,007 118,220 115,823
Provision for loan
losses 6,721 3,199 3,139
----- ----- -----
Net interest
income after
provision for
loan losses 126,286 115,021 112,684
Non-interest income
Service charges
and fees 18,467 17,778 19,512
Other charges and
fees 915 937 579
Net gain on sale
of mortgage loans - - 5,436
Bank-owned life
insurance income 628 649 699
Gain (loss) on
sale of
available-for-
sale securities - (177) 1,014
Gain (loss) on
sale and
disposition of
assets 658 835 (191)
Impairment of
goodwill - - (818)
Other 75 1,811 3,325
--- ----- -----
20,743 21,833 29,556
Non-interest expense
Salaries and
employee benefits 55,057 53,328 51,719
Merger and
acquisition costs 10,291 663 4,127
Advertising 1,535 2,690 1,753
Occupancy and
equipment 7,374 7,675 7,365
Outside
professional
services 2,291 2,760 2,320
Regulatory
assessments 2,713 2,477 2,534
Data processing 6,862 6,727 6,109
Office operations 6,584 6,783 7,144
Other 5,385 5,774 4,619
----- ----- -----
98,092 88,877 87,690
Income before
income tax
expense 48,937 47,977 54,550
Income tax expense 17,659 16,289 19,309
------ ------ ------
Net income $31,278 $31,688 $35,241
======= ======= =======
Earnings per share:
Basic $0.82 $0.83 $0.98
===== ===== =====
Diluted $0.81 $0.83 $0.98
===== ===== =====
Dividends declared
per share $0.48 $0.32 $0.40
===== ===== =====
LegacyTexas Financial Group, Inc. (formerly known as ViewPoint Financial Group, Inc.)
Selected Financial Highlights (unaudited)
At or For the Quarters Ended
----------------------------
December 31, September 30, December 31,
2014 2014 2013
---- ---- ----
(Dollars in thousands, except per share amounts)
SHARE DATA:
Weighted average
common shares
outstanding- basic 38,051,511 37,971,790 37,686,866
Weighted average
common shares
outstanding-
diluted 38,275,814 38,203,508 37,911,775
Shares outstanding
at end of period 40,014,851 40,006,941 39,938,816
Income available to
common
shareholders(1) $5,412 $9,215 $7,147
Basic earnings per
common share 0.14 0.24 0.19
Basic core (non-
GAAP) earnings per
common share(2) 0.29 0.26 0.21
Diluted earnings per
common share 0.14 0.24 0.19
Dividends declared
per share 0.12 0.12 0.12
Total shareholders'
equity 568,223 564,127 544,460
Common shareholders'
equity per share
(book value per
share) 14.20 14.10 13.63
Tangible book value
per share- Non-
GAAP(2) 13.44 13.34 12.86
Market value per share for the
quarter:
High 27.61 27.52 27.66
Low 21.33 23.94 20.19
Close 23.85 23.94 27.45
-----
KEY RATIOS:
Return on average
common
shareholders'
equity 3.83% 6.63% 5.34%
Core return on
average common
shareholders'
equity(2) 7.85 7.14 5.73
Return on average
assets 0.56 0.97 0.87
Core return on
average assets(2) 1.14 1.05 0.94
Efficiency ratio(3) 52.22 54.17 67.07
Estimated Tier 1
risk-based capital
ratio4 15.14 16.04 18.17
Estimated total
risk-based capital
ratio4 15.87 16.72 18.85
Estimated Tier 1
leverage ratio4 13.86 14.03 15.67
Total equity to
total assets 13.65 14.28 15.44
Tangible equity to
tangible assets-
Non-GAAP(2) 13.01 13.61 14.70
------------------
Number of employees-
full-time
equivalent 517 512 561
1 Net of distributed and
undistributed earnings to
participating securities
(2) See the section labeled
"Supplemental Information- Non-
GAAP Financial Measures" at the
end of this document.
(3) Calculated by dividing total
non-interest expense by net
interest income plus non-interest
income, excluding gain (loss) on
foreclosed assets, amortization of
intangible assets, gains (losses)
from securities transactions,
merger and acquisition costs and
other non-recurring items.
4 Calculated at the Company level,
which is subject to the capital
adequacy requirements of the
Federal Reserve.
LegacyTexas Financial Group, Inc. (formerly known as ViewPoint Financial Group, Inc.)
Selected Loan Data (unaudited)
At the Quarter Ended
--------------------
December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Loans: (Dollars in thousands)
Commercial real
estate $1,265,868 $1,219,436 $1,162,035 $1,118,059 $1,091,200
Warehouse Purchase
Program loans 786,416 736,624 769,566 590,904 673,470
Commercial and industrial loans:
Commercial 741,678 668,421 579,561 517,247 425,030
Warehouse lines of
credit 40,146 27,122 31,426 26,333 14,400
------ ------ ------ ------ ------
Total commercial and
industrial loans 781,824 695,543 610,987 543,580 439,430
Construction and land loans:
Commercial
construction and
land 14,396 13,206 28,496 34,465 27,619
Consumer construction
and land 6,902 3,694 3,445 2,604 2,628
----- ----- ----- ----- -----
Total construction
and land loans 21,298 16,900 31,941 37,069 30,247
Consumer:
Consumer real estate 524,199 515,706 501,328 463,857 441,226
Other consumer loans 40,491 41,478 43,218 45,015 47,799
------ ------ ------ ------ ------
Total consumer 564,690 557,184 544,546 508,872 489,025
Gross loans held for
investment $3,420,096 $3,225,687 $3,119,075 $2,798,484 $2,723,372
========== ========== ========== ========== ==========
Non-performing assets:
Commercial real
estate $6,703 $7,452 $7,386 $8,110 $7,604
Commercial and
industrial 5,778 6,328 6,245 5,990 5,141
Construction and land 149 150 213 - -
Consumer real estate 10,591 10,106 9,304 8,203 8,812
Other consumer loans 286 346 457 526 567
--- --- --- --- ---
Total non-performing
loans 23,507 24,382 23,605 22,829 22,124
Foreclosed assets 551 106 240 387 480
--- --- --- --- ---
Total non-performing
assets $24,058 $24,488 $23,845 $23,216 $22,604
======= ======= ======= ======= =======
Total non-performing
assets to total
assets 0.58% 0.62% 0.60% 0.64% 0.64%
Total non-performing
loans to total loans
held for investment,
excluding Warehouse
Purchase Program
loans 0.89% 0.98% 1.00% 1.03% 1.08%
Total non-performing
loans to total loans
held for investment 0.69% 0.76% 0.76% 0.82% 0.81%
Allowance for loan
losses to non-
performing loans 108.69% 92.63% 86.59% 84.99% 87.50%
Allowance for loan
losses to total
loans held for
investment,
excluding Warehouse
Purchase Program
loans 0.97% 0.91% 0.87% 0.88% 0.94%
Allowance for loan
losses to total
loans held for
investment 0.75% 0.70% 0.66% 0.69% 0.71%
Allowance for loan
losses to total
loans held for
investment,
excluding acquired
loans and Warehouse
Purchase Program
loans (1) 1.00% 0.94% 0.90% 0.92% 1.00%
Troubled debt restructured loans ("TDRs"):
Performing TDRs:
Commercial real
estate $702 $706 $666 $ - $ -
Commercial and
industrial 153 158 162 167 185
Construction and land - - - 2 2
Consumer real estate 204 407 729 732 737
Other consumer loans 39 41 43 44 47
--- --- --- --- ---
Total performing TDRs $1,098 $1,312 $1,600 $945 $971
====== ====== ====== ==== ====
Non-performing TDRs:(2)
Commercial real
estate $6,569 $6,646 $6,694 $7,401 $7,446
Commercial and
industrial 2,031 2,125 2,194 2,333 349
Construction and land 103 104 - - -
Consumer real estate 4,034 3,606 3,199 3,024 3,070
Other consumer loans 245 300 411 471 503
--- --- --- --- ---
Total non-performing
TDRs $12,982 $12,781 $12,498 $13,229 $11,368
======= ======= ======= ======= =======
Allowance for loan losses:
Balance at beginning
of period $22,585 $20,440 $19,402 $19,358 $18,869
Provision expense 2,637 2,511 1,197 376 616
Charge-offs (203) (493) (294) (471) (255)
Recoveries 530 127 135 139 128
--- --- --- --- ---
Balance at end of
period $25,549 $22,585 $20,440 $19,402 $19,358
======= ======= ======= ======= =======
Net charge-offs (recoveries):
Commercial real
estate $(435) $ - $ - $ - $ -
Commercial and
industrial 77 152 53 192 43
Construction and land - 50 - - -
Consumer real estate (1) 69 54 77 14
Other consumer loans 32 95 52 63 70
--- --- --- --- ---
Total net charge-
offs $(327) $366 $159 $332 $127
===== ==== ==== ==== ====
1 Excludes loans acquired
from Highlands, which were
initially recorded at fair
value.
(2) Non-performing TDRs are
included in the non-
performing assets reported
above.
LegacyTexas Financial Group, Inc. (formerly known as ViewPoint Financial Group, Inc.)
Average Balances and Yields/Rates (unaudited)
For the Quarters Ended
December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 December 31, 2013
----------------- ------------------ ------------- -------------- -----------------
Loans: (Dollars in thousands)
Commercial real
estate $1,229,962 $1,187,982 $1,169,484 $1,130,304 $1,077,112
Warehouse Purchase
Program loans 619,736 645,148 571,922 446,935 542,367
Commercial and industrial loans:
Commercial 703,326 633,208 561,026 449,867 376,557
Warehouse lines of
credit 27,303 29,296 29,327 17,988 15,316
Consumer real estate 523,998 513,768 480,512 440,662 441,722
Other consumer loans 41,169 42,308 44,162 46,453 49,202
Less: deferred fees
and allowance for
loan loss (25,280) (22,663) (21,683) (20,767) (20,002)
------- ------- ------- ------- -------
Loans receivable 3,120,214 3,029,047 2,834,750 2,511,442 2,482,274
Securities 505,692 532,950 545,944 562,607 592,769
Overnight deposits 106,152 90,246 118,529 96,292 64,210
------- ------ ------- ------ ------
Total interest-
earning assets $3,732,058 $3,652,243 $3,499,223 $3,170,341 $3,139,253
========== ========== ========== ========== ==========
Deposits:
Interest-bearing
demand $455,210 $460,192 $468,283 $460,745 $455,983
Savings and money
market 1,169,133 1,060,311 1,000,243 918,636 902,019
Time 513,786 492,864 503,035 493,196 478,244
FHLB advances and
other borrowings 654,396 733,615 678,817 464,723 468,855
------- ------- ------- ------- -------
Total interest-
bearing liabilities $2,792,525 $2,746,982 $2,650,378 $2,337,300 $2,305,101
========== ========== ========== ========== ==========
Total assets $3,910,111 $3,837,424 $3,683,042 $3,354,668 $3,318,500
Non-interest-
bearing demand
deposits $473,996 $456,115 $414,746 $414,919 $404,087
Total deposits $2,612,125 $2,469,482 $2,386,307 $2,287,496 $2,240,333
Total shareholders'
equity $570,120 $562,022 $554,501 $547,201 $542,360
Yields/Rates:
Loans:
Commercial real
estate 5.43% 5.47% 5.47% 5.38% 5.56%
Warehouse Purchase
Program loans 3.51% 3.56% 3.56% 3.64% 3.79%
Commercial and industrial loans:
Commercial 4.41% 4.21% 4.21% 4.24% 4.92%
Warehouse lines of
credit 3.59% 3.55% 3.64% 3.60% 3.51%
Consumer real estate 4.83% 4.92% 4.97% 4.98% 5.05%
Other consumer loans 6.23% 6.03% 6.07% 5.95% 6.07%
Loans receivable 4.76% 4.74% 4.78% 4.84% 5.03%
Securities 2.22% 2.20% 2.31% 2.32% 2.21%
Overnight deposits 0.24% 0.25% 0.24% 0.24% 0.24%
Total interest-
earning assets 4.28% 4.26% 4.24% 4.25% 4.40%
Deposits:
Interest-bearing
demand 0.35% 0.35% 0.37% 0.37% 0.38%
Savings and money
market 0.32% 0.31% 0.30% 0.28% 0.28%
Time 0.64% 0.65% 0.69% 0.75% 0.99%
FHLB advances and
other borrowings 1.21% 1.18% 1.27% 1.83% 1.86%
Total interest-
bearing liabilities 0.59% 0.61% 0.63% 0.70% 0.77%
Net interest spread 3.69% 3.65% 3.61% 3.55% 3.63%
Net interest margin 3.84% 3.80% 3.76% 3.73% 3.83%
Cost of deposits
(including non-
interest-bearing
demand) 0.33% 0.33% 0.34% 0.35% 0.40%
LegacyTexas Financial Group, Inc. (formerly known as ViewPoint Financial Group, Inc.)
Supplemental Information- Non-GAAP Financial Measures (unaudited and net of tax)
At or For the Quarters Ended
----------------------------
December 31, September 30 June 30, March 31, December 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Reconciliation of Core
(non-GAAP) to GAAP
Net Income and
Earnings per Share: (Dollars in thousands, except per share amounts)
GAAP net income
available to common
shareholders (1) $5,412 $9,215 $8,721 $7,592 $7,147
Distributed and
undistributed earnings
to participating
securities (1) 54 97 97 90 97
--- --- --- --- ---
GAAP net income 5,466 9,312 8,818 7,682 7,244
Merger and acquisition
costs 5,765 772 424 110 431
One-time payroll and
severance costs - - 234 - 137
One-time (gain) loss
on assets (45) (58) 415 7 (36)
Core (non-GAAP) net
income $11,186 $10,026 $9,891 $7,799 $7,776
======= ======= ====== ====== ======
Average shares for
basic earnings per
share 38,051,511 37,971,790 37,873,671 37,775,677 37,686,866
GAAP basic earnings per
share $0.14 $0.24 $0.23 $0.20 $0.19
Core (non-GAAP) basic
earnings per share $0.29 $0.26 $0.26 $0.21 $0.21
Average shares for
diluted earnings per
share 38,275,814 38,203,508 38,121,374 38,019,519 37,911,775
GAAP diluted earnings
per share $0.14 $0.24 $0.23 $0.20 $0.19
Core (non-GAAP)
diluted earnings per
share $0.29 $0.26 $0.26 $0.21 $0.21
Calculation of Tangible Book Value per Share:
Total shareholders'
equity $568,223 $564,127 $557,412 $550,099 $544,460
Less: Goodwill (29,650) (29,650) (29,650) (29,650) (29,650)
Identifiable intangible
assets, net (813) (910) (1,005) (1,127) (1,239)
---- ---- ------ ------ ------
Total tangible
shareholders' equity $537,760 $533,567 $526,757 $519,322 $513,571
======== ======== ======== ======== ========
Shares outstanding at
end of period 40,014,851 40,006,941 39,995,720 39,946,560 39,938,816
Book value per share-
GAAP $14.20 $14.10 $13.94 $13.77 $13.63
Tangible book value per
share- Non-GAAP $13.44 $13.34 $13.17 $13.00 $12.86
Calculation of Tangible Equity to Tangible Assets:
Total assets $4,164,114 $3,950,524 $3,951,244 $3,603,588 $3,525,232
Less: Goodwill (29,650) (29,650) (29,650) (29,650) (29,650)
Identifiable intangible
assets, net (813) (910) (1,005) (1,127) (1,239)
---- ---- ------ ------ ------
Total tangible assets $4,133,651 $3,919,964 $3,920,589 $3,572,811 $3,494,343
========== ========== ========== ========== ==========
Equity to assets- GAAP 13.65% 14.28% 14.11% 15.27% 15.44%
Tangible equity to
tangible assets- Non-
GAAP 13.01% 13.61% 13.44% 14.54% 14.70%
At or For the Quarters Ended
----------------------------
(Dollars in
thousands) December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013
---- ---- ---- ---- ----
Calculation of Return on Average Assets and Return on Average Equity Ratios (GAAP and core)
Net income $5,466 $9,312 $8,818 $7,682 $7,244
Core (non-GAAP)
net income 11,186 10,026 9,891 7,799 7,776
Average total
equity 570,120 562,022 554,501 547,201 542,360
Average total
assets 3,910,111 3,837,424 3,683,042 3,354,668 3,318,500
Return on average
common
shareholders'
equity 3.83% 6.63% 6.36% 5.62% 5.34%
Core return on
average common
shareholders'
equity 7.85 7.14 7.14 5.70 5.73
Return on average
assets 0.56 0.97 0.96 0.92 0.87
Core return on
average assets 1.14 1.05 1.07 0.93 0.94
At or For the Years Ended
-------------------------
December 31, December 31,
2014 2013
---- ----
Reconciliation (Dollars in thousands, except per
of Core share amounts)
(non-
GAAP) to
GAAP Net
Income and
Earnings
per Share:
GAAP net
income
available
to common
shareholders
(1) $30,942 $31,294
Distributed
and
undistributed
earnings to
participating
securities
(1) 336 394
--- ---
GAAP net
income 31,278 31,688
Merger and
acquisition
costs 7,071 431
One-time
payroll
and
severance
costs 234 436
One-time
(gain)
loss on
assets 319 (574)
(Gain) loss
on sale of
available-
for-sale
securities - 115
--- ---
Core (non-
GAAP) net
income $38,902 $32,096
======= =======
Average
shares for
basic
earnings
per share 37,919,065 37,589,548
GAAP basic
earnings
per share $0.82 $0.83
Core (non-
GAAP)
basic
earnings
per share $1.03 $0.85
Average
shares for
diluted
earnings
per share 38,162,094 37,744,786
GAAP
diluted
earnings
per share $0.81 $0.83
Core (non-
GAAP)
diluted
earnings
per share $1.02 $0.85
( )
(1) Unvested share-based awards
that contain nonforfeitable
rights to dividends (whether paid
or unpaid) are participating
securities and are included in
the computation of GAAP earnings
per share pursuant to the two-
class method described in ASC
260-10-45-60B.
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SOURCE LegacyTexas Financial Group, Inc.
