LEGACYTEXAS FINANCIAL GROUP, INC. PLANO, Texas, Jan. 26, 2016 /PRNewswire/ -- LegacyTexas Financial Group, Inc. (Nasdaq: LTXB) (the "Company"), the holding company for LegacyTexas Bank (the "Bank"), today announced net income of $16.4 million for the fourth quarter of 2015, a decrease of $1.4 million from the third quarter of 2015 and an increase of $11.0 million from the fourth quarter of 2014.
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"Despite energy headwinds, 2015 was a fabulous year for our company," said President and CEO Kevin Hanigan. "We closed on the transformative Legacy merger in January, grew both our loans and deposits substantially, improved key operating metrics and issued $75 million of subordinated notes to support our growth. We are fortunate to be operating in a business environment as strong and diversified as DFW."
Fourth Quarter 2015 Performance Highlights
-- Gross loans held for investment at December 31, 2015, excluding
Warehouse Purchase Program loans, grew $377.7 million, or 8.1%, from
September 30, 2015, with $317.3 million of growth in commercial real
estate and commercial and industrial loans.
-- Deposits at December 31, 2015 increased by $456.7 million, or 9.6%, from
September 30, 2015, with $227.0 million of growth in savings and money
market deposits and $126.9 million of growth in time deposits.
-- The allowance for loan losses allocated to energy loans at December 31,
2015 totaled $12.0 million, or 2.3% of total energy loans (including
both reserve based and midstream), up $7.1 million ($0.15 per share on a
pre-tax basis, $0.10 per share after tax) from $4.9 million at September
30, 2015.
-- Net interest margin for the quarter ended December 31, 2015 was 3.94%, a
six basis point decrease from the linked quarter and a ten basis point
increase compared to the fourth quarter of 2014.
-- In November 2015, the Company completed a public offering of $75.0
million of fixed-to-floating rate subordinated notes due in 2025, the
proceeds of which are being used for general corporate purposes,
potential strategic acquisitions and investments in the Bank as
regulatory capital.
Financial Highlights
--------------------
At or For the Quarters Ended
----------------------------
December September December
(unaudited) 2015 2015 2014
---- ---- ----
(Dollars in thousands, except per share amounts)
Net interest
income $63,742 $61,188 $35,830
Provision for
loan losses 11,200 7,515 2,637
Non-interest
income 11,593 11,851 5,294
Non-interest
expense 39,043 37,827 29,796
Income tax
expense 8,646 9,802 3,225
----- ----- -----
Net income $16,446 $17,895 $5,466
======= ======= ======
Basic earnings
per common
share $0.36 $0.39 $0.14
Basic core
(non-GAAP)
earnings per
common
share(1) $0.35 $0.39 $0.29
Weighted
average common
shares
outstanding -
basic 45,939,817 45,862,840 38,051,511
Estimated Tier
1 common risk-
based capital
ratio(2) 9.56% 9.97% 15.14%
Total equity to
total assets 10.45% 11.52% 13.65%
Tangible common
equity to
tangible
assets - Non-
GAAP (1) 8.29% 9.12% 13.01%
1 See the section labeled
"Supplemental Information- Non-
GAAP Financial Measures" at the
end of this document.
2 Calculated at the Company level,
which is subject to the capital
adequacy requirements of the
Federal Reserve.
Earnings for the fourth quarter of 2015 were impacted by a provision for loan losses totaling $11.2 million, a $3.7 million increase from the third quarter of 2015 and an $8.6 million increase from the fourth quarter of 2014. The increased provision for loan losses directly resulted from the Company's effort to enhance its allowance for loan losses on energy loans due to a sustained increase in economic and regulatory uncertainty. The increased provision for loan losses was partially offset by higher net interest income, which was up $2.6 million from the third quarter of 2015 and up $27.9 million from the fourth quarter of 2014.
Core (non-GAAP) net income (which is net income adjusted for the impact of merger and acquisition costs and certain other items) totaled $16.3 million for the quarter ended December 31, 2015, down $1.5 million from the third quarter of 2015 and up $5.1 million from the fourth quarter of 2014. Basic earnings per share for the quarter ended December 31, 2015 was $0.36, a decrease of $0.03 from the third quarter of 2015 and an increase of $0.22 from the fourth quarter of 2014. Core earnings per share for the fourth quarter of 2015 was $0.35, down $0.04 from the third quarter of 2015 and up $0.06 from the fourth quarter of 2014.
Net income for the year ended December 31, 2015 was $70.9 million, up $39.6 million from the year ended December 31, 2014, which reflects the impact of the merger with LegacyTexas Group, Inc. on January 1, 2015. Core (non-GAAP) net income totaled $71.9 million for the year ended December 31, 2015, up $33.0 million from the year ended December 31, 2014. Basic earnings per share for the year ended December 31, 2015 was $1.54, an increase of $0.72 from the year ended December 31, 2014. Core earnings per share for the year ended December 31, 2015 was $1.57, up $0.54 from the year ended December 31, 2014. The reconciliation of non-GAAP measures, which the Company believes facilitates the assessment of its banking operations and peer comparability, is included in tabular form at the end of this release.
Net Interest Income and Net Interest Margin
-------------------------------------------
For the Quarters Ended
----------------------
December September December
(unaudited) 2015 2015 2014
---- ---- ----
(Dollars in thousands)
Interest income:
Loans held for
investment,
excluding
Warehouse
Purchase
Program loans $59,405 $55,778 $31,667
Warehouse
Purchase
Program loans 6,473 7,073 5,440
Loans held for
sale 176 177 -
Securities 3,318 3,363 2,808
Interest-
earning deposit
accounts 210 137 64
--- --- ---
Total interest
income $69,582 $66,528 $39,979
======= ======= =======
Net interest
income $63,742 $61,188 $35,830
Net interest
margin 3.94% 4.00% 3.84%
Selected average
balances:
Total earning
assets $6,469,511 $6,117,873 $3,732,058
Total loans held
for investment 5,588,437 5,291,291 3,120,214
Total securities 631,916 648,241 505,692
Total deposits 4,939,893 4,683,346 2,612,125
Total borrowings 1,075,948 984,708 654,396
Total non-
interest-
bearing demand
deposits 1,198,337 1,108,928 473,996
Total interest-
bearing
liabilities 4,817,504 4,559,126 2,792,525
Net interest income for the quarter ended December 31, 2015 was $63.7 million, a $2.6 million increase from the third quarter of 2015 and a $27.9 million increase from the fourth quarter of 2014. The $2.6 million increase from the linked quarter was primarily due to an increase in interest income on loans, which was driven by increased volume in all loan categories with the exception of Warehouse Purchase Program and other consumer loans. The average balance of commercial and industrial loans increased by $162.7 million to $1.50 billion from the third quarter of 2015, resulting in a $1.9 million increase in interest income. The average balance of commercial real estate loans increased by $133.7 million to $2.10 billion from the third quarter of 2015, which was partially offset by an 18 basis point linked-quarter decrease in the average yield earned on this portfolio, resulting in an $833,000 increase in interest income. The average balance of construction and land loans and consumer real estate loans increased by $38.0 million and $40.3 million, respectively, compared to the third quarter of 2015, leading to increases in interest income of $511,000 and $476,000, respectively. The increased interest income related to commercial, construction and consumer real estate loan volume was partially offset by a $67.9 million linked-quarter decline in the average balance of Warehouse Purchase Program balances, which reduced interest income by $600,000.
Interest income on loans for the fourth quarter of 2015 included $1.4 million in accretion of purchase accounting fair value adjustments on loans acquired through the merger with LegacyTexas Group, Inc., a decrease of $633,000 from the $2.0 million in accretion income recorded on these loans for the third quarter of 2015. The $1.4 million includes $550,000 in accretion income recorded on acquired commercial real estate loans, $229,000 in accretion income recorded on acquired commercial and industrial loans, $78,000 in accretion income recorded on acquired construction and land loans and $520,000 recorded on acquired consumer loans. Accretion of purchase accounting fair value adjustments related to the LegacyTexas Group, Inc. acquisition, as well as a smaller amount related to the Highlands Bank acquisition in 2012, contributed 13 basis points, six basis points and 22 basis points to the average yields on commercial real estate, commercial and industrial and consumer real estate loans, respectively, for the fourth quarter of 2015, compared to 18 basis points, 12 basis points and 22 basis points, respectively, for the third quarter of 2015.
The $27.9 million increase in net interest income, compared to the fourth quarter of 2014, was primarily due to a $28.9 million increase in interest income on loans, which was driven by increased volume in all loan categories resulting from the merger with LegacyTexas Group, Inc. on January 1, 2015, as well as organic growth during the year. The average balance of commercial real estate loans increased by $886.4 million from the fourth quarter of 2014, resulting in a $10.5 million increase in interest income. The $886.4 million in growth includes $551.0 million in commercial real estate loans acquired through the merger with LegacyTexas Group, Inc. Excluding these loans, the average balance of commercial real estate loans increased by $335.4 million from the fourth quarter of 2014. The average balance of commercial and industrial loans increased by $772.2 million from the fourth quarter of 2014, resulting in an $8.9 million increase in interest income. The $772.2 million in growth includes $337.1 million in commercial and industrial loans acquired through the merger with LegacyTexas Group, Inc. Excluding these loans, the average balance of commercial and industrial loans increased by $435.1 million from the fourth quarter of 2014. The average balance of consumer real estate loans increased by $376.9 million from the fourth quarter of 2014, resulting in a $4.5 million increase in interest income. The $376.9 million in growth includes $264.0 million in consumer real estate loans acquired through the merger with LegacyTexas Group, Inc. Excluding these loans, the average balance of consumer real estate loans increased by $112.9 million from the fourth quarter of 2014. The average balance of Warehouse Purchase Program loans increased by $158.2 million to $777.9 million from the fourth quarter of 2014, which resulted in a $1.0 million increase in interest income.
Interest expense for the quarter ended December 31, 2015 increased by $503,000 compared to the linked quarter, which was primarily due to $462,000 in interest expense resulting from the $75.0 million of fixed-to-floating rate subordinated notes issued by the Company in the fourth quarter of 2015. Compared to the fourth quarter of 2014, interest expense for the quarter ended December 31, 2015 increased by $1.7 million, primarily due to the additional interest expense associated with the subordinated notes and an increase in interest expense on deposits, which was driven by increased volume in all deposit categories resulting from the merger with LegacyTexas Group, Inc. on January 1, 2015, as well as organic growth since December 31, 2014. An $859.1 million increase in the average balance of savings and money market deposits to $2.03 billion from the fourth quarter of 2014 was partially offset by a 13 basis point reduction in the average rate paid on such deposits, resulting in a $32,000 increase in interest expense. The $859.1 million in growth includes $534.6 million in savings and money market deposits acquired through the merger with LegacyTexas Group, Inc. Excluding these deposits, the average balance of savings and money market deposits increased by $324.5 million from the fourth quarter of 2014. The average balance of time deposits increased by $451.3 million to $965.1 million from the fourth quarter of 2014, resulting in an $890,000 increase in interest expense. The $451.3 million in growth includes $336.8 million in time deposits acquired through the merger with LegacyTexas Group, Inc. Excluding these deposits, the average balance of time deposits increased by $114.5 million from the fourth quarter of 2014. The average balance of interest-bearing demand deposits increased by $293.0 million to $748.2 million from the fourth quarter of 2014, resulting in a $482,000 increase in interest expense. The $293.0 million in growth includes $258.7 million in interest-bearing demand deposits acquired through the merger with LegacyTexas Group, Inc. Excluding these deposits, the average balance of interest-bearing demand deposits increased by $34.3 million from the fourth quarter of 2014.
The net interest margin for the fourth quarter of 2015 was 3.94%, a six basis point decrease from the third quarter of 2015 and a ten basis point increase from the fourth quarter of 2014. Accretion of interest resulting from the merger with LegacyTexas Group, Inc. on January 1, 2015, as well as the 2012 Highlands acquisition, contributed ten basis points to the net interest margin and average yield on earning assets for the quarter ended December 31, 2015, compared to 12 basis points for the quarter ended September 30, 2015 and three basis points for the quarter ended December 31, 2014. The average yield on earning assets for the fourth quarter of 2015 was 4.30%, a five basis point decline from the third quarter of 2015 and a two basis point increase from the fourth quarter of 2014. The cost of deposits for the fourth quarter of 2015 was 0.29%, unchanged from the third quarter of 2015 and down four basis points from the fourth quarter of 2014.
Non-interest Income
Non-interest income for the fourth quarter of 2015 was $11.6 million, a $258,000 decrease from the third quarter of 2015 and a $6.3 million increase from the fourth quarter of 2014. Core non-interest income for the fourth quarter of 2015, which excludes one-time gains and losses on assets and security sales, was $11.4 million, down $305,000 from the third quarter of 2015 and up $6.1 million from the fourth quarter of 2014. Service charges and other fees decreased by $154,000 from the third quarter of 2015, which includes a $520,000 decrease in commercial loan fee income from fees collected in the third quarter of 2015 that were not duplicated in the fourth quarter, as well as a $92,000 linked-quarter decline in Warehouse Purchase Program fee income. These declines in commercial loan and Warehouse Purchase Program fee income were partially offset by a linked-quarter $394,000 increase in debit card and ATM fee income.
The $6.3 million increase in non-interest income from the fourth quarter of 2014 was primarily due to a $3.1 million increase in service charges and other fees, which was driven by the addition of $1.3 million of title income, as well as increased debit card income and service charges related to accounts acquired through the merger with LegacyTexas Group, Inc. Additionally, the Company recognized $1.9 million in net gains on the sale of mortgage loans during the fourth quarter of 2015, which includes the gain recognized on $47.8 million of one-to four-family mortgage loans that were sold or committed for sale during the fourth quarter of 2015, fair value changes on mortgage derivatives and mortgage fees collected. Prior to the January 1, 2015 merger with LegacyTexas Group, Inc., the Company did not originate or sell mortgage loans to outside investors; therefore, a comparable gain was not recorded in the fourth quarter of 2014. Other non-interest income increased by $883,000 from the fourth quarter of 2014, primarily due to $799,000 of insurance income added through the acquisition of LegacyTexas Group, Inc.
Non-interest Expenses
Non-interest expense for the quarter ended December 31, 2015 was $39.0 million, a $1.2 million increase from the third quarter of 2015 and a $9.2 million increase from the fourth quarter of 2014. Salaries and employee benefits expense decreased by $259,000 from the third quarter of 2015, primarily due to lower health care claims compared to the third quarter of 2015, as well as a reduction in share-based compensation expense due to a decline in the Company's stock price. Advertising expense increased by $495,000 from the third quarter of 2015, primarily due to increased donations to support community outreach, while other non-interest expense increased by $410,000 compared to the linked quarter, primarily due to increased debit card fraud losses incurred during the fourth quarter of 2015.
The $9.2 million increase in non-interest expense from the fourth quarter of 2014 includes an $8.3 million decrease in merger and acquisition costs related to the merger with LegacyTexas Group, Inc. Excluding the impact of these merger costs, core non-interest expense increased by $17.5 million, which was driven by a $10.2 million increase in salaries and employee benefits expense, primarily due to the addition of employees and grants of share-based compensation related to the merger with LegacyTexas Group, Inc. The merger with LegacyTexas Group, Inc. also resulted in a $1.7 million increase in occupancy and equipment expense, a $1.2 million increase in office operations expense and a $1.4 million increase in data processing expense for the quarter ended December 31, 2015, compared to the same period in 2014.
Financial Condition - Loans
Gross loans held for investment at December 31, 2015, excluding Warehouse Purchase Program loans, grew $377.7 million from September 30, 2015, which included growth in all loan categories with the exception of other consumer loans, which declined by $5.2 million. Commercial and industrial and commercial real estate loans at December 31, 2015 increased by $175.4 million and $141.9 million, respectively, from September 30, 2015, while consumer real estate and construction and land loans increased by $56.2 million and $9.3 million, respectively, for the same period. Warehouse Purchase Program loans at December 31, 2015 increased by $83.3 million from September 30, 2015, and by $257.3 million compared to December 31, 2014.
Compared to December 31, 2014, gross loans held for investment, excluding Warehouse Purchase Program loans, grew $2.43 billion, which includes $1.40 billion in loans acquired from LegacyTexas Group, Inc. on January 1, 2015. On a year over year basis, commercial real estate and commercial and industrial loans increased by $911.7 million and $830.8 million, respectively, while consumer real estate and construction and land loans increased by $412.6 million and $248.4 million, respectively, for the same period.
Energy loans, which are reported as commercial and industrial loans, totaled $459.8 million at December 31, 2015, up $28.4 million from $431.4 million at September 30, 2015 and up $100.2 million from December 31, 2014. In May 2013, the Company formed its Energy Finance group, which is comprised of a group of seasoned lenders, executives and credit risk professionals with more than 100 years of combined Texas energy experience, to focus on providing loans to private and public oil and gas companies throughout the United States. The group also offers the Bank's full array of commercial services, including Treasury Management and letters of credit, to its customers. Substantially all of the loans in the Energy portfolio are reserve based loans, secured by deeds of trust on properties containing proven oil and natural gas reserves. In addition to the reserve based energy loans, the Company has loans categorized as "Midstream and Other," which are typically related to the transmission of oil and natural gas and would only be indirectly impacted from declining commodity prices. At December 31, 2015, "Midstream and Other" loans had a total outstanding balance of $64.6 million.
Financial Condition - Deposits
Total deposits at December 31, 2015 increased by $456.7 million from September 30, 2015, with all deposit categories growing on a linked-quarter basis, including a $227.0 million increase in savings and money market deposits and a $126.9 million increase in time deposits. Interest-bearing and non-interest-bearing demand deposits increased by $68.8 million and $34.0 million, respectively, compared to September 30, 2015.
Compared to December 31, 2014, total deposits increased by $2.57 billion, which includes $1.63 billion of deposits acquired from LegacyTexas Group, Inc. on January 1, 2015. On a year over year basis, savings and money market and time deposits increased by $1.03 billion and $513.4 million, respectively, while non-interest-bearing demand and interest-bearing demand deposits increased by $675.9 million and $346.6 million, respectively, for the same period. At December 31, 2015, non-interest-bearing demand deposits comprised 22.4% of total deposits, compared to 18.6% of total deposits at December 31, 2014.
Credit Quality
--------------
At or For the Quarters Ended
----------------------------
December September December
(unaudited) 2015 2015 2014
---- ---- ----
(Dollars in thousands)
489 2,000 (327)
Net charge-offs $ $ $
%
%
Net charge-offs/
Average loans
held for
investment,
excluding
Warehouse
Purchase Program
loans 0.04 0.18% (0.05)
Net charge-offs/
Average loans
held for
investment 0.04 0.15 (0.04)
11,200 7,515 2,637
Provision for loan
losses $ $ $
Non-performing
loans ("NPLs") 38,216 66,413 23,507
%
%
NPLs/Total loans
held for
investment,
excluding
Warehouse
Purchase Program
loans 0.75 1.42% 0.89
NPLs/Total loans
held for
investment 0.63 1.18 0.69
44,908 71,053 24,058
Non-performing
assets ("NPAs") $ $ $
%
%
%
NPAs to total
assets 0.58 1.03 0.58
NPAs/Loans held
for investment
and foreclosed
assets, excluding
Warehouse
Purchase Program
loans 0.89 1.51 0.91
NPAs/Loans held
for investment
and foreclosed
assets 0.73 1.26 0.70
47,093 36,382 25,549
Allowance for loan
losses $ $ $
%
%
Allowance for loan
losses/Total
loans held for
investment,
excluding
Warehouse
Purchase Program
loans 0.93% 0.78 0.97
Allowance for loan
losses/Total
loans held for
investment 0.77 0.64 0.75
Allowance for loan
losses/Total
loans held for
investment,
excluding
acquired loans &
Warehouse
Purchase Program
loans (1) 1.14 1.00 1.00
Allowance for loan
losses/NPLs 123.23 54.78 108.69
1 Excludes loans acquired in the
Highlands and LegacyTexas
transactions, which were
initially recorded at fair value.
The Company recorded a provision for loan losses of $11.2 million for the quarter ended December 31, 2015, an increase of $3.7 million from the quarter ended September 30, 2015 and an increase of $8.6 million from the quarter ended December 31, 2014. The increase in the provision for loan losses on a linked-quarter basis, as well as compared to the fourth quarter of 2014, was primarily related to increased qualitative reserve factors applied to the energy portfolio. The Company increased these qualitative factors in the fourth quarter of 2015 due to the impact of continued pressure on the price of oil, which has led to a sustained increase in economic and regulatory uncertainty surrounding energy loans. Also, over the past year, risk rating downgrades on energy loans have increased, primarily in the special mention category, which consists entirely of performing loans. The below table shows criticized energy loans at December 31, 2015, September 30, 2015 and December 31, 2014.
December 31, September 30, Linked-Quarter December 31, Year-over-Year
2015 2015 Change 2014 Change
---- ------
(Dollars in thousands)
Special Mention
(all performing) $68,348 $30,457 $37,891 $ - $68,348
Substandard
(performing) 38,712 8,108 30,604 12,000 26,712
Substandard (non-
performing) 12,110 36,217 (24,107) - 12,110
------ ------ ------- --- ------
$119,170 $74,782 $44,388 $12,000 $107,170
======== ======= ======= ======= ========
The $24.1 million decrease in substandard non-performing energy loans from September 30, 2015 was primarily due to the sale of a $24.3 million non-performing energy relationship to an unrelated third party during the fourth quarter of 2015. The sale generated a $923,000 interest recovery and resulted in no recorded loss. The loan purchase was financed by the Company to a new, unrelated borrower the Company believes offers sufficient collateral, guarantor support and experience to ensure the successful resolution of the former criticized energy relationship. The resulting new loan, which is performing, was graded as substandard at December 31, 2015 and included in the $38.7 million reported above.
The increase in special mention and substandard performing energy loans on a linked-quarter and year-over-year basis resulted from collateral value deterioration due to commodity price declines. At December 31, 2015, the Company did not have any specific loss reserves set aside for these loans. The Company continues to take action to improve the risk profile of the criticized energy loans by instituting monthly commitment reductions, obtaining additional collateral, obtaining additional guarantor support and/or requiring additional equity injections or asset sales.
Due to the increase in qualitative reserve factors discussed above, the allowance for loan losses allocated to energy loans at December 31, 2015 totaled $12.0 million, up $7.1 million from $4.9 million at September 30, 2015 and up $8.6 million from $3.4 million at December 31, 2014. These reserve amounts result entirely from the increase in qualitative factors and the increase in the energy portfolio, as the Company has not experienced a loss on energy loans to date, which we believe is a reflection of prudent risk mitigation techniques. These techniques include sound underwriting (reasonable advance rates based on number and diversification of wells), sound policy (requiring hedges on production sales) and conservative collateral valuations (frequent borrowing base determinations at prices below NYMEX posted rates). All borrowing base valuations are performed by experienced and nationally recognized third party firms intimately familiar with the properties and their production history. The Company believes that the current level of loan loss reserve for energy loans is sufficient to cover credit losses in the portfolio based on currently available information; however, future sustained declines in oil pricing could lead to further risk rating downgrades, additional loan loss reserves, or losses.
In addition to the changes in qualitative factors related to energy lending, the increase in loan loss reserves and provision expense was caused by increased organic loan production, as well as loans acquired through the merger with LegacyTexas Group, Inc. that were re-underwritten following completion of the merger. During the fourth quarter of 2015, the Company added $499.3 million in net loan production that required additional allowance for loan losses, which includes loans acquired through the merger with LegacyTexas Group, Inc. that were re-underwritten pursuant to this process.
Net charge-offs for the fourth quarter of 2015 totaled $489,000, a decrease of $1.5 million from the third quarter of 2015 and an increase of $816,000 from the fourth quarter of 2014. The $24.7 million decrease in non-performing commercial and industrial loans from the third quarter of 2015 was primarily due to the $24.3 million energy relationship discussed above.
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, 2015 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, 2015 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 27, 2016 at 8 a.m. Central Time. Participants may pre-register for the call by visiting http://dpregister.com/10078603 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 #10078603. This replay, as well as the webcast, will be available until February 27, 2016.
About LegacyTexas Financial Group, Inc.
LegacyTexas Financial Group, Inc. is the holding company for LegacyTexas Bank, a commercially oriented community bank based in Plano, Texas. LegacyTexas Bank operates 47 banking offices in the Dallas/Fort Worth Metroplex and surrounding counties. For more information, please visit www.legacytexasfinancialgroup.com or www.legacytexas.com.
This document and other filings by LegacyTexas Financial Group, Inc. (the "Company") with the Securities and Exchange Commission (the "SEC"), as well as press releases or other public or stockholder communications released by the Company, may contain forward-looking statements, including, but not limited to, (i) statements regarding the financial condition, results of operations and business of the Company, (ii) statements about the Company's plans, objectives, expectations and intentions and other statements that are not historical facts and (iii) other statements identified by the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions that are intended to identify "forward-looking statements", within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current beliefs and expectations of the Company's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: 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 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. When considering forward-looking statements, you should keep in mind these risks and uncertainties. You should not place undue reliance on any forward-looking statement, which speaks only as of the date made. You should refer to our periodic and current reports filed with the SEC for specific risks that could cause actual results to be significantly different from those expressed or implied by any forward-looking statements.
LegacyTexas Financial Group, Inc.
Consolidated Balance Sheets
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
---- ---- ---- ---- ----
(Dollars in thousands)
ASSETS (unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------
Cash and due from
financial institutions $53,847 $47,720 $48,911 $53,739 $28,416
Short-term interest-
bearing deposits in
other financial
institutions 561,792 193,994 143,106 230,175 103,605
------- ------- ------- ------- -------
Total cash and cash
equivalents 615,639 241,714 192,017 283,914 132,021
Securities available for
sale, at fair value 311,708 318,219 314,040 290,615 199,699
Securities held to
maturity 240,433 249,838 254,526 261,670 241,920
------- ------- ------- ------- -------
Total securities 552,141 568,057 568,566 552,285 441,619
Loans held for sale 22,535 22,802 19,903 23,983 -
Loans held for investment:
Loans held for
investment -Warehouse
Purchase Program 1,043,719 960,377 1,084,997 1,038,886 786,416
Loans held for
investment 5,066,507 4,688,826 4,394,786 4,196,710 2,633,680
--------- --------- --------- --------- ---------
Gross loans 6,132,761 5,672,005 5,499,686 5,259,579 3,420,096
Less: allowance for loan
losses and deferred
fees on loans held for
investment (48,953) (39,611) (34,264) (31,565) (28,476)
------- ------- ------- ------- -------
Net loans 6,083,808 5,632,394 5,465,422 5,228,014 3,391,620
FHLB stock and other
restricted securities,
at cost 63,075 63,891 69,224 65,470 44,084
Bank-owned life
insurance 55,231 54,920 54,614 54,339 36,193
Premises and equipment,
net 77,637 79,153 80,095 81,853 48,743
Goodwill 180,776 180,632 180,632 179,258 29,650
Other assets 63,633 58,082 59,054 65,818 40,184
------ ------ ------ ------ ------
Total assets $7,691,940 $6,878,843 $6,669,624 $6,510,951 $4,164,114
========== ========== ========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest-bearing
demand $1,170,272 $1,136,255 $1,084,146 $1,030,861 $494,376
Interest-bearing demand 819,350 750,551 734,430 713,199 472,703
Savings and money market 2,209,698 1,982,729 1,834,075 1,826,097 1,176,749
Time 1,027,391 900,515 875,132 822,904 513,981
--------- ------- ------- ------- -------
Total deposits 5,226,711 4,770,050 4,527,783 4,393,061 2,657,809
FHLB advances 1,439,904 1,152,916 1,217,305 1,171,623 862,907
Repurchase agreements 83,269 71,643 66,172 89,772 25,000
Subordinated debt 84,992 11,522 11,474 26,840 -
Accrued expenses and
other liabilities 52,988 80,075 69,966 68,596 50,175
------ ------ ------ ------ ------
Total liabilities 6,887,864 6,086,206 5,892,700 5,749,892 3,595,891
Shareholders' equity
Common stock 476 476 476 476 400
Additional paid-in
capital 576,753 573,929 571,083 568,396 386,549
Retained earnings 240,496 230,720 219,493 205,431 195,327
Accumulated other
comprehensive income
(loss), net (133) 1,395 122 1,372 930
Unearned Employee Stock
Ownership Plan (ESOP)
shares (13,516) (13,883) (14,250) (14,616) (14,983)
------- ------- ------- ------- -------
Total shareholders'
equity 804,076 792,637 776,924 761,059 568,223
Total liabilities and
shareholders' equity $7,691,940 $6,878,843 $6,669,624 $6,510,951 $4,164,114
========== ========== ========== ========== ==========
LegacyTexas Financial Group, Inc.
Consolidated Quarterly Statements of Income (unaudited)
For the Quarters Ended Fourth Quarter 2015 Compared to:
---------------------- --------------------------------
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Third Quarter Fourth Quarter
2015 2015 2015 2015 2014
2015 2014
----
Interest and
dividend income (Dollars in thousands)
Loans, including
fees $66,054 $63,025 $61,551 $58,035 $37,107 $3,029 4.8% $28,947 78.0%
Taxable securities 2,264 2,292 2,252 2,499 2,109 (28) (1.2) 155 7.3
Nontaxable
securities 780 773 724 718 561 7 0.9 219 39.0
Interest-bearing
deposits in other
financial
institutions 210 137 139 158 64 73 53.3 146 228.1
FHLB and Federal
Reserve Bank stock
and other 274 298 301 208 138 (24) (8.1) 136 98.6
--- --- --- --- --- --- ---
69,582 66,525 64,967 61,618 39,979 3,057 4.6 29,603 74.0
Interest expense
Deposits 3,569 3,382 3,049 3,127 2,165 187 5.5 1,404 64.8
FHLB advances 1,466 1,606 1,774 1,706 1,778 (140) (8.7) (312) (17.5)
Repurchase agreement
and other
borrowings 805 349 323 459 206 456 130.7 599 290.8
5,840 5,337 5,146 5,292 4,149 503 9.4 1,691 40.8
Net interest income 63,742 61,188 59,821 56,326 35,830 2,554 4.2 27,912 77.9
Provision for loan
losses 11,200 7,515 3,750 3,000 2,637 3,685 49.0 8,563 324.7
------ ----- ----- ----- ----- ----- -----
Net interest income
after provision for
loan losses 52,542 53,673 56,071 53,326 33,193 (1,131) (2.1) 19,349 58.3
Non-interest income
Service charges and
other fees 8,041 8,195 7,941 6,759 4,963 (154) (1.9) 3,078 62.0
Net gain on sale of
mortgage loans 1,899 1,944 2,121 2,072 - (45) (2.3) 1,899 100.0
Bank-owned life
insurance income 432 424 424 419 183 8 1.9 249 136.1
Gain (loss) on sale
of available for
sale securities 17 (25) - 211 - 42 N/M (1) 17 100.0
Gain on sale and
disposition of
assets 188 228 429 28 15 (40) (17.5) 173 1,153.3
Other 1,016 1,085 1,049 (82) 133 (69) (6.4) 883 663.9
----- ----- ----- --- --- --- ---
11,593 11,851 11,964 9,407 5,294 (258) (2.2) 6,299 119.0
Non-interest expense
Salaries and
employee benefits 23,374 23,633 22,549 22,971 13,137 (259) (1.1) 10,237 77.9
Merger and
acquisition costs - - 8 1,545 8,282 - - (8,282) (100.0)
Advertising 1,140 645 1,048 940 425 495 76.7 715 168.2
Occupancy and
equipment 3,592 3,622 3,838 3,808 1,856 (30) (0.8) 1,736 93.5
Outside professional
services 1,114 934 625 750 711 180 19.3 403 56.7
Regulatory
assessments 1,266 1,026 1,146 822 700 240 23.4 566 80.9
Data processing 3,116 2,830 2,537 2,795 1,753 286 10.1 1,363 77.8
Office operations 2,773 2,879 2,652 2,393 1,621 (106) (3.7) 1,152 71.1
Other 2,668 2,258 2,505 1,753 1,311 410 18.2 1,357 103.5
----- ----- ----- ----- ----- --- -----
39,043 37,827 36,908 37,777 29,796 1,216 3.2 9,247 31.0
Income before income
tax expense 25,092 27,697 31,127 24,956 8,691 (2,605) (9.4) 16,401 188.7
Income tax expense 8,646 9,802 10,876 8,632 3,225 (1,156) (11.8) 5,421 168.1
----- ----- ------ ----- ----- ------ -----
Net income $16,446 $17,895 $20,251 $16,324 $5,466 $(1,449) (8.1)% $10,980 200.9%
======= ======= ======= ======= ====== ======= =======
(1)N/M - not meaningful
LegacyTexas Financial Group, Inc.
Consolidated Statements of Income for the Years Ended December 31,
(Dollar amounts in
thousands, except
per share data) 2015 2014 2013
---- ---- ----
Interest and
dividend income (unaudited)
Loans, including
fees $248,665 $137,255 $124,522
Taxable securities 9,307 9,352 9,780
Nontaxable
securities 2,995 2,248 2,133
Interest-bearing
deposits in other
financial
institutions 631 249 126
FHLB and Federal
Reserve Bank stock
and other 1,094 543 528
----- --- ---
262,692 149,647 137,089
Interest expense
Deposits 13,127 8,212 9,545
FHLB advances 6,552 7,610 8,503
Repurchase agreement
and other
borrowings 1,936 818 821
21,615 16,640 18,869
------ ------ ------
Net interest income 241,077 133,007 118,220
Provision for loan
losses 25,465 6,721 3,199
------ ----- -----
Net interest income
after provision for
loan losses 215,612 126,286 115,021
Non-interest income
Service charges and
other fees 30,936 19,382 18,715
Net gain on sale of
mortgage loans 8,036 - -
Bank-owned life
insurance income 1,699 628 649
Gain (loss) on sale
of available-for-
sale securities 203 - (177)
Gain on sale and
disposition of
assets 873 658 835
Other 3,068 75 1,811
----- --- -----
44,815 20,743 21,833
Non-interest expense
Salaries and
employee benefits 92,527 55,057 53,328
Merger and
acquisition costs 1,553 10,291 663
Advertising 3,773 1,535 2,690
Occupancy and
equipment 14,860 7,374 7,675
Outside professional
services 3,332 2,291 2,760
Regulatory
assessments 4,260 2,713 2,477
Data processing 11,278 6,862 6,727
Office operations 10,697 6,584 6,783
Other 9,275 5,385 5,774
----- ----- -----
151,555 98,092 88,877
Income before income
tax expense 108,872 48,937 47,977
Income tax expense 37,956 17,659 16,289
Net income $70,916 $31,278 $31,688
======= ======= =======
Earnings per share:
Basic $1.54 $0.82 $0.83
===== ===== =====
Diluted $1.53 $0.81 $0.83
===== ===== =====
Dividends declared
per share $0.54 $0.48 $0.32
===== ===== =====
LegacyTexas Financial Group, Inc.
Selected Financial Highlights (unaudited)
At or For the Quarters Ended
----------------------------
December 31, September 30, December 31,
2015 2015 2014
---- ---- ----
(Dollars in thousands, except per share amounts)
SHARE DATA:
Weighted average
common shares
outstanding- basic 45,939,817 45,862,840 38,051,511
Weighted average
common shares
outstanding-
diluted 46,267,956 46,188,461 38,275,814
Shares outstanding
at end of period 47,645,826 47,640,193 40,014,851
Income available to
common
shareholders(1) $16,336 $17,768 $5,412
Basic earnings per
common share 0.36 0.39 0.14
Basic core (non-
GAAP) earnings per
common share(2) 0.35 0.39 0.29
Diluted earnings per
common share 0.35 0.38 0.14
Dividends declared
per share 0.14 0.14 0.12
Total shareholders'
equity 804,076 792,637 568,223
Common shareholders'
equity per share
(book value per
share) 16.88 16.64 14.20
Tangible book value
per share- Non-
GAAP(2) 13.06 12.82 13.44
Market value per share for the
quarter:
High 31.97 31.32 27.61
Low 24.59 26.11 21.33
Close 25.02 30.48 23.85
-----
KEY RATIOS:
Return on average
common
shareholders'
equity 8.22% 9.11% 3.83%
Core return on
average common
shareholders'
equity(2) 8.15 9.05 7.85
Return on average
assets 0.95 1.10 0.56
Core return on
average assets(2) 0.95 1.09 1.14
Efficiency ratio(3) 51.85 51.89 52.22
Estimated Tier 1
common equity risk-
based capital
ratio4 9.56 9.97 -
Estimated total
risk-based capital
ratio4 11.58 10.75 15.87
Estimated Tier 1
risk-based capital
ratio4 9.73 10.16 15.14
Estimated Tier 1
leverage ratio4 9.46 9.79 13.86
Total equity to
total assets 10.45 11.52 13.65
Tangible equity to
tangible assets-
Non-GAAP(2) 8.29 9.12 13.01
------------------
Number of employees-
full-time
equivalent 840 831 517
1 Net of distributed and
undistributed earnings to
participating securities.
(2) See the section labeled
"Supplemental Information- Non-
GAAP Financial Measures" at the
end of this document.
(3) Calculated by dividing total
non-interest expense by net
interest income plus non-interest
income, excluding gain (loss) on
foreclosed and fixed assets,
changes in value of the CRA Funds,
amortization of intangible assets,
gains (losses) from securities
transactions and merger and
acquisition costs.
4 Calculated at the Company level,
which is subject to the capital
adequacy requirements of the
Federal Reserve. The Tier 1
common equity risk-based capital
ratio was added as a required
regulatory capital ratio in March
2015.
LegacyTexas Financial Group, Inc.
Selected Loan Data (unaudited)
At the Quarter Ended
--------------------
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
---- ---- ---- ---- ----
Loans held for
investment: (Dollars in thousands)
Commercial real
estate $2,177,543 $2,035,631 $1,930,256 $1,890,518 $1,265,868
Warehouse Purchase
Program 1,043,719 960,377 1,084,997 1,038,886 786,416
Commercial and
industrial 1,612,669 1,437,241 1,308,168 1,212,328 781,824
Construction and land 269,708 260,433 230,582 215,752 21,298
Consumer real estate 936,757 880,532 845,982 792,995 524,199
Other consumer 69,830 74,989 79,798 85,117 40,491
------ ------ ------ ------ ------
Gross loans held for
investment $6,110,226 $5,649,203 $5,479,783 $5,235,596 $3,420,096
========== ========== ========== ========== ==========
Non-performing assets:
Commercial real
estate $11,418 $13,717 $3,549 $6,745 $6,703
Commercial and
industrial 16,877 41,538 12,498 5,691 5,778
Construction and land 33 39 141 141 149
Consumer real estate 9,781 10,894 10,419 9,946 10,591
Other consumer 107 225 243 346 286
--- --- --- --- ---
Total non-performing
loans 38,216 66,413 26,850 22,869 23,507
Foreclosed assets 6,692 4,640 4,553 6,274 551
----- ----- ----- ----- ---
Total non-performing
assets $44,908 $71,053 $31,403 $29,143 $24,058
======= ======= ======= ======= =======
Total non-performing
assets to total
assets 0.58% 1.03% 0.47% 0.45% 0.58%
Total non-performing
loans to total loans
held for investment,
excluding Warehouse
Purchase Program
loans 0.75% 1.42% 0.61% 0.54% 0.89%
Total non-performing
loans to total loans
held for investment 0.63% 1.18% 0.49% 0.44% 0.69%
Allowance for loan
losses to non-
performing loans 123.23% 54.78% 114.96% 123.64% 108.69%
Allowance for loan
losses to total
loans held for
investment,
excluding Warehouse
Purchase Program
loans 0.93% 0.78% 0.70% 0.67% 0.97%
Allowance for loan
losses to total
loans held for
investment 0.77% 0.64% 0.56% 0.54% 0.75%
Allowance for loan
losses to total
loans held for
investment,
excluding acquired
loans and Warehouse
Purchase Program
loans (1) 1.14% 1.00% 0.98% 1.00% 1.00%
Troubled debt
restructured loans
("TDRs"): (Dollars in thousands)
Performing TDRs:
Commercial real
estate $161 $163 $733 $738 $702
Commercial and
industrial 30 266 142 147 153
Consumer real estate 368 134 202 203 204
Other consumer 46 1 35 37 39
--- --- --- --- ---
Total performing TDRs $605 $564 $1,112 $1,125 $1,098
==== ==== ====== ====== ======
Non-performing TDRs:(2)
Commercial real
estate $946 $3,233 $3,240 $6,616 $6,569
Commercial and
industrial 1,793 1,760 1,862 1,985 2,031
Construction and land - - 101 101 103
Consumer real estate 3,393 3,808 3,608 3,936 4,034
Other consumer 75 160 155 201 245
--- --- --- --- ---
Total non-performing
TDRs $6,207 $8,961 $8,966 $12,839 $12,982
====== ====== ====== ======= =======
Allowance for loan losses:
Balance at beginning
of period $36,382 $30,867 $28,276 $25,549 $22,585
Provision expense 11,200 7,515 3,750 3,000 2,637
Charge-offs (722) (2,124) (1,357) (504) (203)
Recoveries 233 124 198 231 530
--- --- --- --- ---
Balance at end of
period $47,093 $36,382 $30,867 $28,276 $25,549
======= ======= ======= ======= =======
Net charge-offs (recoveries):
Commercial real
estate $71 $6 $78 $(17) $(435)
Commercial and
industrial 317 1,626 935 5 77
Construction and land - - - - -
Consumer real estate (19) 100 13 142 (1)
Other consumer 120 268 133 143 32
--- --- --- --- ---
Total net charge-
offs $489 $2,000 $1,159 $273 $(327)
==== ====== ====== ==== =====
1 Excludes loans acquired in the
Highlands and LegacyTexas
acquisitions, which were
initially recorded at fair value.
(2) Non-performing TDRs are
included in the non-performing
assets reported above.
LegacyTexas Financial Group, Inc.
Average Balances and Yields/Rates (unaudited)
For the Quarters Ended
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
---- ---- ---- ---- ----
Loans: (Dollars in thousands)
Commercial real
estate $2,102,708 $1,969,031 $1,850,134 $1,835,205 $1,216,348
Warehouse Purchase
Program 777,927 845,787 920,034 687,496 619,736
Commercial and
industrial 1,502,875 1,340,177 1,248,447 1,135,074 730,629
Construction and land 277,597 239,567 214,038 223,815 19,140
Consumer real estate 895,336 855,015 805,573 786,872 518,472
Other consumer 72,981 77,404 83,296 89,123 41,169
Less: deferred fees
and allowance for
loan loss (40,987) (35,690) (31,991) (29,098) (25,280)
------- ------- ------- ------- -------
Total loans held for
investment 5,588,437 5,291,291 5,089,531 4,728,487 3,120,214
Loans held for sale 18,560 17,651 19,414 19,672 -
Securities 631,916 648,241 620,071 620,490 505,692
Overnight deposits 230,598 160,690 164,499 222,159 106,152
------- ------- ------- ------- -------
Total interest-
earning assets $6,469,511 $6,117,873 $5,893,515 $5,590,808 $3,732,058
========== ========== ========== ========== ==========
Deposits:
Interest-bearing
demand $748,176 $736,142 $701,592 $702,333 $455,210
Savings and money
market 2,028,249 1,936,090 1,806,857 1,809,191 1,169,133
Time 965,131 902,186 839,604 820,050 513,786
FHLB advances and
other borrowings 1,075,948 984,708 1,112,198 882,461 654,396
--------- ------- --------- ------- -------
Total interest-
bearing liabilities $4,817,504 $4,559,126 $4,460,251 $4,214,035 $2,792,525
========== ========== ========== ========== ==========
Total assets $6,891,210 $6,532,738 $6,315,710 $6,021,795 $3,910,111
Non-interest-
bearing demand
deposits $1,198,337 $1,108,928 $1,024,108 $975,067 $473,996
Total deposits $4,939,893 $4,683,346 $4,372,161 $4,306,641 $2,612,125
Total shareholders'
equity $800,411 $786,056 $762,497 $760,130 $570,120
Yields/Rates:
Loans:
Commercial real
estate 5.13% 5.31% 5.20% 5.30% 5.42%
Warehouse Purchase
Program 3.33% 3.35% 3.36% 3.36% 3.51%
Commercial and
industrial 4.49% 4.48% 4.75% 4.90% 4.38%
Construction and land 5.41% 5.42% 6.25% 5.92% 5.63%
Consumer real estate 4.81% 4.82% 5.11% 4.77% 4.83%
Other consumer 5.63% 5.63% 5.49% 5.30% 6.23%
Total loans held for
investment 4.72% 4.75% 4.82% 4.89% 4.76%
Loans held for sale 3.79% 3.94% 3.65% 3.62% - %
Securities 2.10% 2.08% 2.11% 2.21% 2.22%
Overnight deposits 0.36% 0.34% 0.34% 0.28% 0.24%
Total interest-
earning assets 4.30% 4.35% 4.41% 4.41% 4.28%
Deposits:
Interest-bearing
demand 0.47% 0.47% 0.48% 0.41% 0.35%
Savings and money
market 0.19% 0.19% 0.17% 0.22% 0.32%
Time 0.71% 0.71% 0.70% 0.68% 0.64%
FHLB advances and
other borrowings 0.84% 0.79% 0.75% 0.98% 1.21%
Total interest-
bearing liabilities 0.48% 0.47% 0.46% 0.50% 0.59%
Net interest spread 3.82% 3.88% 3.95% 3.91% 3.69%
Net interest margin 3.94% 4.00% 4.06% 4.03% 3.84%
Cost of deposits
(including non-
interest-bearing
demand) 0.29% 0.29% 0.28% 0.29% 0.33%
LegacyTexas Financial Group, Inc.
Supplemental Information- Non-GAAP Financial Measures
(unaudited and net of tax, calculated using a 35% estimated tax rate)
At or For the Quarters Ended
----------------------------
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
---- ---- ---- ---- ----
Reconciliation of Core
(non-GAAP) to GAAP Net
Income and Earnings per
Share: (Dollars in thousands, except per share amounts)
GAAP net income
available to common
shareholders (1) $16,336 $17,768 $20,091 $16,186 $5,412
Distributed and
undistributed earnings
to participating
securities (1) 110 127 160 138 54
--- --- --- --- ---
GAAP net income 16,446 17,895 20,251 16,324 5,466
Merger and acquisition
costs - - 5 1,004 5,765
One-time (gain) loss on
assets (133) (130) (142) 554 (45)
(Gain) loss on sale of
available for sale
securities (11) 16 - (137) -
Core (non-GAAP) net
income $16,302 $17,781 $20,114 $17,745 $11,186
======= ======= ======= ======= =======
Average shares for basic
earnings per share 45,939,817 45,862,840 45,760,232 45,824,812 38,051,511
GAAP basic earnings per
share $0.36 $0.39 $0.44 $0.35 $0.14
Core (non-GAAP) basic
earnings per share $0.35 $0.39 $0.44 $0.39 $0.29
Average shares for
diluted earnings per
share 46,267,956 46,188,461 46,031,267 46,002,821 38,275,814
GAAP diluted earnings
per share $0.35 $0.38 $0.44 $0.35 $0.14
Core (non-GAAP) diluted
earnings per share $0.35 $0.38 $0.44 $0.39 $0.29
Calculation of Tangible Book Value per Share:
Total shareholders'
equity $804,076 $792,637 $776,924 $761,059 $568,223
Less: Goodwill (180,776) (180,632) (180,632) (179,258) (29,650)
Identifiable intangible
assets, net (1,030) (1,142) (1,280) (1,042) (813)
------ ------ ------ ------ ----
Total tangible
shareholders' equity $622,270 $610,863 $595,012 $580,759 $537,760
======== ======== ======== ======== ========
Shares outstanding at
end of period 47,645,826 47,640,193 47,619,493 47,602,721 40,014,851
Book value per share-
GAAP $16.88 $16.64 $16.32 $15.99 $14.20
Tangible book value per
share- Non-GAAP $13.06 $12.82 $12.50 $12.20 $13.44
Calculation of Tangible Equity to Tangible Assets:
Total assets $7,691,940 $6,878,843 $6,669,624 $6,510,951 $4,164,114
Less: Goodwill (180,776) (180,632) (180,632) (179,258) (29,650)
Identifiable intangible
assets, net (1,030) (1,142) (1,280) (1,042) (813)
------ ------ ------ ------ ----
Total tangible assets $7,510,134 $6,697,069 $6,487,712 $6,330,651 $4,133,651
========== ========== ========== ========== ==========
Equity to assets- GAAP 10.45% 11.52% 11.65% 11.69% 13.65%
Tangible equity to
tangible assets- Non-
GAAP 8.29% 9.12% 9.17% 9.17% 13.01%
At or For the Quarters Ended
----------------------------
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
---- ---- ---- ---- ----
(Dollars in thousands)
Calculation of Return on Average Assets and Return on Average Equity Ratios (GAAP and core) (unaudited)
Net income $16,446 $17,895 $20,251 $16,324 $5,466
Core (non-GAAP) net
income 16,302 17,781 20,114 17,745 11,186
Average total equity 800,411 786,056 762,497 760,130 570,120
Average total assets 6,891,210 6,532,738 6,315,710 6,021,795 3,910,111
Return on average common
shareholders' equity 8.22% 9.11% 10.62% 8.59% 3.83%
Core (non-GAAP) return
on average common
shareholders' equity 8.15 9.05 10.55 9.34 7.85
Return on average assets 0.95 1.10 1.28 1.08 0.56
Core (non-GAAP) return
on average assets 0.95 1.09 1.27 1.18 1.14
At or For the Years Ended
-------------------------
December 31, December 31,
2015 2014
---- ----
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) $70,382 $30,942
Distributed
and
undistributed
earnings
to
participating
securities
(1) 534 336
--- ---
GAAP net
income 70,916 31,278
Merger and
acquisition
costs 1,009 7,071
One-time
payroll
and
severance
costs - 234
One-time
(gain)
loss on
assets 149 319
(Gain)
loss on
sale of
available
for sale
securities (132) -
---- ---
Core (non-
GAAP) net
income $71,942 $38,902
======= =======
Average
shares
for basic
earnings
per share 45,847,284 37,919,065
GAAP basic
earnings
per share $1.54 $0.82
Core (non-
GAAP)
basic
earnings
per share $1.57 $1.03
Average
shares
for
diluted
earnings
per share 46,125,447 38,162,094
GAAP
diluted
earnings
per share $1.53 $0.81
Core (non-
GAAP)
diluted
earnings
per share $1.56 $1.02
(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.
