ViewPoint Financial Group, Inc. Reports Third Quarter 2013 Earnings Commercial Loan Growth Continues

PLANO, Texas, Oct. 22, 2013 /PRNewswire/ -- ViewPoint Financial Group, Inc. (NASDAQ: VPFG) (the "Company"), the holding company for ViewPoint Bank, N.A. (the "Bank"), today announced net income of $8.2 million for the quarter ended September 30, 2013, a decrease of $3.1 million, or 27.4%, from the quarter ended September 30, 2012.  Compared to the second quarter of 2013, net income increased by $38,000, or 0.5%.  Basic earnings per share for the quarter ended September 30, 2013, increased $.01 on a linked quarter basis to $0.22.  Compared to the quarter ended September 30, 2012, basic earnings per share declined by $0.08. Diluted earnings per share for the quarter ended September 30, 2013, was $0.21.

Third Quarter 2013 Results

  • Continued shift in earning asset revenue as commercial loan portfolio grows: Our commercial loan portfolio, consisting of commercial real estate and commercial and industrial ("C&I") loans, totaled $1.4 billion at September 30, 2013, up $392.2 million, or 37.5%, from September 30, 2012, and up $121.4 million, or 9.2%, from June 30, 2013. Interest income on the commercial loan portfolio increased $2.3 million, or 15.1%, from the quarter ended September 30, 2012, with commercial loans generating 51.8% of the Company's interest income during the third quarter of 2013, compared to 41.2% of interest income earned during the same quarter in 2012.
  • Strong growth in energy lending portfolio: In May 2013, the Company formed its Energy Finance group, which provides loans to oil and gas companies throughout the United States. Oil and gas loans, which are included in our commercial and industrial loan portfolio, totaled $114.2 million at September 30, 2013, up from $57.5 million at June 30, 2013.
  • Non-performing loans hit lowest level in eight quarters: Non-performing loans totaled $22.3 million at September 30, 2013, which is the lowest level in eight quarters. Net charge-offs for the quarter ended September 30, 2013 totaled $250,000, down from $1.2 million for the quarter ended June 30, 2013, and up $42,000 from the quarter ended September 30, 2012.
  • Announced quarterly cash dividend of $0.12 per share, up 20% from prior quarter: The Company today announced a quarterly cash dividend of $0.12 per share, up $0.02, or 20%, from $0.10 per share in the prior quarter.

"I continue to be pleased with the results of our commercial banking strategy," said President and CEO Kevin Hanigan. "Once again, our commercial lending team produced solid loan growth, as well as increased valuable non-interest-bearing deposits. I'm also encouraged by the strong performance of our new Energy Finance group. We're in the right place, we've got the right team, and I'm excited about our future."

Financial Highlights



At or For the Quarters Ended


September


June


September

(unaudited)

2013


2013


2012


(Dollars in thousands, except per share amounts)

Net interest income

$

29,188



$

30,438



$

31,619


Provision (benefit) for loan losses

(158)



1,858



814


Non-interest income

5,226



5,743



7,819


Non-interest expense

22,173



21,703



21,210


Income tax expense

4,187



4,446



6,098


Net income

$

8,212



$

8,174



$

11,316








Basic earnings per common share

$

0.22



$

0.21



$

0.30


Weighted average common shares outstanding - basic

37,594,701



37,545,050



37,362,535


Estimated Tier 1 risk-based capital ratio1

19.17

%


17.97

%


22.16

%

Tangible common equity to tangible assets - Non-GAAP 2

15.18

%


14.10

%


13.45

%

1

 Calculated at the ViewPoint Financial Group, Inc. level, which is subject to the capital adequacy requirements of the Federal Reserve.  The decline in our September 2013 and June 2013 ratio is primarily the result of a risk weighting change from 50% to 100% on our Warehouse Purchase Program loans.

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


September


June


September

(unaudited)

2013


2013


2012


(Dollars in thousands)

Interest income:






Loans held for investment

$

24,188



$

24,844



$

23,635


Loans held for sale

6,617



7,307



9,104


Securities

3,038



3,120



4,240


Interest-earning deposit accounts

32



25



29


Total interest income

$

33,875



$

35,296



$

37,008








Net interest income

$

29,188



$

30,438



$

31,619


Net interest margin

3.63

%


3.72

%


3.70

%

Selected average balances:






Total earning assets

$

3,212,156



$

3,271,436



$

3,414,701


Total loans

$

2,517,255



$

2,544,695



$

2,450,143


Total securities

$

640,041



$

680,931



$

914,818


Total deposits

$

2,204,371



$

2,187,865



$

2,183,998


Total borrowings

$

587,651



$

679,693



$

863,949


Total non-interest-bearing demand deposits

$

405,344



$

393,815



$

338,074


Total interest-bearing liabilities

$

2,386,678



$

2,473,743



$

2,709,873


Net interest income for the quarter ended September 30, 2013, was $29.2 million, a $2.4 million decrease from the third quarter of 2012 and a $1.3 million decrease from the second quarter of 2013. The year-over-year decrease was primarily due to a $1.9 million decrease in interest income on loans and a $1.2 million decrease in interest income on securities, partially offset by a $702,000 decrease in interest expense. 

The decrease in interest income on loans from the quarter ended September 30, 2012, was primarily due to a $2.5 million decrease in interest income from loans held for sale, as well as a decline in yields earned on most loan portfolios.  The average balance of loans held for sale decreased by $200.9 million, or 22.7%, compared to the third quarter of 2012. (The 2012 period included $11.1 million in loans held for sale at our former mortgage subsidiary, ViewPoint Mortgage.) This decline was more than offset by a $376.0 million, or 38.8%, increase in the average balance of commercial loans. Growth in commercial loan volume was partially offset by lower yields, as the average yield on commercial real estate and commercial and industrial loans declined by 94 and 135 basis points, respectively, from the third quarter of 2012. The average yield on loans decreased 44 basis points to 4.90% for the third quarter of 2013, compared to 5.34% for the third quarter of 2012.

The average balance of securities declined $274.8 million, or 30.0%, during the third quarter of 2013 compared to the same period in 2012, while the average yield on securities increased by five basis points for the comparable periods. The decline in average balances in our securities portfolio over the past year was primarily due to normal paydowns and the sale of securities that were not consistent with our portfolio strategy. The proceeds from the securities paydowns and sales were re-deployed to support commercial loan growth.

Third quarter 2013 interest expense decreased $702,000 from the 2012 third quarter, primarily due to a $449,000, or 17.9%, decrease in the interest paid on FHLB advances, and a $245,000, or 9.2%, decrease in interest paid on deposits. The average balances of FHLB advances and other borrowings declined by $276.3 million, or 32.0%, from the comparable prior year period, primarily due to lower Warehouse Purchase Program balances during the 2013 period, of which a portion was strategically funded with short-term advances. Additionally, the average rate paid on interest-bearing demand deposits declined by 22 basis points to 0.39% for the quarter ended September 30, 2013, from 0.61% for the quarter ended September 30, 2012.  Average interest-bearing liabilities decreased by $323.2 million to $2.4 billion for the quarter ended September 30, 2013, compared to $2.7 billion for the same period in 2012, while the average cost of interest-bearing liabilities declined by one basis point to 0.79% for the quarter ended September 30, 2013.

The decrease in net interest income for the current period compared to the second quarter of 2013 was primarily due to a $1.3 million decrease in interest income from loans, driven primarily by lower yields earned on most loan portfolios. A $67.3 million increase in the average balance of commercial loans compared to the second quarter of 2013 partially offset a $69.7 million decline in the average balance of loans held for sale.

The average yield on the loan portfolio decreased by 15 basis points from 5.05% for the second quarter of 2013. The yield on loans was negatively impacted in the third quarter of 2013 by $377,000 of interest income reversed in September 2013 on three non-performing commercial real estate loans that were sold at par in the same month. Conversely, the yield on loans was positively impacted in the second quarter of 2013 by a $480,000 interest recovery on two commercial real estate loans that were paid in full, $154,000 in deferred fees immediately amortized due to the early payoff of two C&I loans, and $109,000 in accretion related to a purchased credit impaired C&I loan that was paid in full.

The net interest margin for the third quarter of 2013 was 3.63%, a seven basis point decrease from the third quarter of 2012 and a nine basis point decrease from the second quarter of 2013. Accretion of interest related to the Highlands acquisition contributed seven basis points to the net interest margin for the quarter ended September 30, 2013, compared to nine basis points for the quarter ended June 30, 2013. The average yield on earning assets for the 2013 third quarter was 4.22%, a 12 basis point decrease from the third quarter of 2012 and a ten basis point decrease from the second quarter of 2013. 

Non-interest Income

Non-interest income for the quarter ended September 30, 2013, was $5.2 million, a $2.6 million decrease from the third quarter of 2012 and a $517,000 decrease from the second quarter of 2013. The decrease from the third quarter of 2012 was primarily attributable to a $1.0 million gain on the sale of mortgage loans and an $898,000 gain on the sale of available-for-sale securities recorded in 2012, with no comparable gains in the 2013 period.  The Company no longer sells one- to four- family real estate loans due to the sale of ViewPoint Mortgage in the third quarter of 2012.  Additionally, service charges and fees decreased $425,000 from the third quarter of 2012, primarily due to a decline in Warehouse Purchase Program collateral and wire fees, as well as $122,000 in ATM surcharge refunds, with no corresponding refunds in the 2012 period.  In the fourth quarter of 2012, the Company began offering ATM refunds on certain checking products.

The decrease in non-interest income from second quarter 2013 was primarily due to a $403,000 decrease in gain on sale and disposition of assets and a $308,000 decrease in service charges and fees. The decrease in gain on sale and disposition of assets was primarily due to gains on the disposition of purchased credit impaired loans (acquired from Highlands) during the second quarter of 2013, with no corresponding gains during the third quarter. The decrease in service charges and fees was primarily due to a $230,000 decline in commercial loan pre-payment penalty fee income, as well as a decline in Warehouse Purchase Program collateral and wire fees.

Non-interest Expenses

Non-interest expense for the quarter ended September 30, 2013, was $22.2 million, a $963,000 increase from the third quarter of 2012 and a $470,000 increase from the second quarter of 2013. The year-over-year increase in non-interest expense was primarily due to an $861,000 increase in salaries and employee benefits expense. This was partially offset by acquisition costs of $242,000 recognized in the 2012 period, with no corresponding costs in the 2013 period.  The increase in salaries and employee benefits expenses primarily reflected increased health benefit costs as well as an increase in share-based compensation expense for the comparable periods due to additional share-based grants in 2013 and a rise in the price of the Company's stock, which impacts expense amounts.

The $470,000 increase in non-interest expense from the second quarter of 2013 was primarily due to a $1.0 million increase in salaries and employee benefits expense, which was partially offset by a $302,000 decrease in other non-interest expense. The increase in salaries and employee benefits expense primarily reflected a $577,000 increase in health benefit costs and an approximate $244,000 increase due to new hires and an additional pay day in the third quarter of 2013. Also, salary and employee benefit costs increased by $122,000 due to higher share-based compensation expenses resulting from new grants and a rise in the Company's average stock price. Other non-interest expense decreased for the comparable quarters primarily due to $400,000 in director retirement payments made during the second quarter of 2013.

Financial Condition

Gross loans held for investment at September 30, 2013, increased by $98.5 million, or 5.4%, from June 30, 2013, and 17.1% from September 30, 2012. Loans held for sale at September 30, 2013, decreased by $264.2 million, or 29.2%, from June 30, 2013, and 36.9% from September 30, 2012.  Commercial real estate loan balances at September 30, 2013, increased by $43.7 million, or 4.4%, from June 30, 2013, and 31.9% from September 30, 2012, while commercial and industrial loans at September 30, 2013, increased by $77.7 million, or 24.8%, from June 30, 2013, and 54.9% from September 30, 2012. 

Oil and gas loans, which are included in our commercial and industrial loans, totaled $114.2 million at September 30, 2013, up from $57.5 million at June 30, 2013.  To further develop this line of business, the Company formed a new energy lending group in May 2013. The Energy Finance group focuses on providing loans to private and public oil and gas companies throughout the United States, with an emphasis on reserve-based transactions for development drilling, capital expenditures against oil and gas reserves, and acquisitions of oil and gas reserves. The group's offerings also include the Bank's full array of commercial services, including Treasury Management and Letters of Credit. 

Total deposits increased by $58.8 million, or 2.7%, to $2.2 billion from June 30, 2013. The total reflects increases in all deposit categories except for interest-bearing demand deposits. Compared to September 30, 2012, deposits increased by $55.0 million, or 2.5%, which included a $51.3 million increase in non-interest-bearing demand deposits. Non-interest-bearing demand deposits totaled $401.1 million, or 17.8%, of total deposits at September 30, 2013, reaching a new high for the category.

In line with our commercial banking strategy, commercial non-interest-bearing demand deposits totaled $270.4 million at September 30, 2013, compared to $221.9 million at September 30, 2012, and helped to generate $315,000 in billed analysis treasury management fee income during the nine months ended September 30, 2013.

Total shareholders' equity increased by $6.7 million to $540.1 million at September 30, 2013, from $533.4 million at June 30, 2013.  The Company's tangible common equity ratio was 15.18% at September 30, 2013, an increase of 108 basis points from June 30, 2013, and 173 basis points from September 30, 2012. 

Credit Quality



At or For the Quarters Ended


September


June


September

(unaudited)

2013


2013


2012


(Dollars in thousands)

Net charge-offs

$

250



$

1,223



$

208


Net charge-offs/Average loans held for investment

0.05

%


0.27

%


0.05

%

Provision (benefit) for loan losses

$

(158)



$

1,858



$

814


Non-performing loans ("NPLs")

$

22,307



$

23,799



$

28,081


NPLs/Total loans held for investment

1.15

%


1.30

%


1.70

%

Non-performing assets ("NPAs")

$

22,735



$

24,356



$

31,931


NPAs/Total assets

0.67

%


0.68

%


0.88

%

NPAs/Loans held for investment and foreclosed assets

1.18



1.33



1.93


Allowance for loan losses

$

18,869



$

19,277



$

19,835


Allowance for loan losses/Total loans held for investment

0.98

%


1.05

%


1.20

%

Allowance for loan losses/Total loans held for investment excluding acquired loans 1

1.05



1.15



1.41


Allowance for loan losses/NPLs

84.59



81.00



70.63


1 

Excludes loans acquired from Highlands, which were initially recorded at fair value. 

The Company recorded a provision benefit of $158,000 for the quarter ended September 30, 2013, compared to a provision expense of $1.9 million for the 2013 second quarter and $814,000 for the quarter ended September 30, 2012. Non-performing loans to total loans at September 30, 2013, was 1.15%, compared to 1.30% at June 30, 2013, and 1.70% at September 30, 2012. Non-performing loans decreased by $1.5 million to $22.3 million at September 30, 2013, from $23.8 million at June 30, 2013, and decreased $5.8 million from $28.1 million at September 30, 2012. At September 30, 2013, non-performing loans were at their lowest level in eight quarters.  In the third quarter of 2013, three commercial real estate loans that were placed in nonaccrual status in September were sold at par in the same month, which avoided an increase in non-performing loans, as well as any potential losses on these three loans. 

Net charge-offs totaled $250,000 for the third quarter of 2013, compared to $1.2 million for the second quarter and $208,000 for the third quarter of 2012.  Second quarter charge-offs included $716,000 to settle the remaining balances of two commercial real estate loans.  We believe that our credit quality has continued to improve due to sound underwriting of new transactions, enhancements in loan oversight and improved economic conditions in our market area. 

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 quarter ended September 30, 2013 on Form 10-Q.  As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of September 30, 2013, and will adjust amounts preliminarily reported, if necessary.

On October 7, 2013, the Federal Financial Institutions Examination Council ("FFIEC") issued Supplemental Instructions for the September 30, 2013, Call Report, stating that certain residential mortgage loan purchase programs (like the Company's Warehouse Purchase Program) should be reported as loans held for investment. The Company has historically reported these loans as loans held for sale in our Call Reports and US GAAP basis financial statements. We are currently evaluating the impact of the FFIEC Supplemental Instructions on our financial reporting.  If we were to change our consolidated balance sheet classification from loans held for sale to loans held for investment, the change would have no material impact in net income or the balance sheet. In addition, the activity from the program would be reclassified out of operating activities to investing activities within our consolidated statement of cash flows. 

Conference Call

The Company will also host an investor conference call to review these results on Wednesday, October 23, 2013, at 8 a.m. Central Time. Participants are asked to call (toll-free) 1-888-317-6016 at least five minutes prior to the call.  International participants are asked to call 1-412-317-6016 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.viewpointfinancialgroup.com. An audio replay will be available one hour after the conclusion of the call at 1-877-344-7529, Conference #10030674. This replay, as well as the webcast, will be available until the Company's next quarterly webcast/conference call. 

About ViewPoint Financial Group, Inc.

ViewPoint Financial Group, Inc. is the holding company for ViewPoint Bank, N.A. ViewPoint Bank, N.A. operates 31 banking offices in the Dallas/Fort Worth metropolitan area, including two First National Bank of Jacksboro locations in Jack and Wise Counties. For more information, please visit www.viewpointbank.com or www.viewpointfinancialgroup.com.   

When used in filings by the Company with the Securities and Exchange Commission (the "SEC") in the Company's press releases or other public or shareholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, including, among other things: changes in economic conditions; legislative changes; changes in policies by regulatory agencies; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company's ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company's market area; the industry-wide decline in mortgage production; competition; changes in management's business strategies; our ability to successfully integrate any assets, liabilities, customers, systems and management personnel we have acquired or may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; and other factors set forth under Risk Factors in the Company's Form 10-K that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The factors listed above could materially affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not undertake - and specifically declines any obligation - to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances occurring after the date of such statements. 

 

 

VIEWPOINT FINANCIAL GROUP, INC.

Consolidated Balance Sheets



September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012


September 30,
2012


(Dollars in thousands)

ASSETS

(unaudited)


(unaudited)


(unaudited)




(unaudited)

Cash and due from financial institutions

$

33,803



$

30,504



$

25,724



$

34,227



$

24,429


Short-term interest-bearing deposits in other financial institutions

40,223



27,280



26,783



34,469



36,301


Total cash and cash equivalents

74,026



57,784



52,507



68,696



60,730


Securities available for sale, at fair value

264,657



287,834



315,438



287,034



316,780


Securities held to maturity

307,822



330,969



329,993



360,554



396,437


Total securities

572,479



618,803



645,431



647,588



713,217


Loans held for sale

640,028



904,228



757,472



1,060,720



1,014,445


Loans held for investment

1,933,669



1,835,187



1,745,737



1,690,769



1,651,639


Gross loans

2,573,697



2,739,415



2,503,209



2,751,489



2,666,084


Less: allowance for loan losses and deferred fees on loans held for investment

(19,513)



(19,162)



(18,282)



(17,565)



(19,719)


Net loans

2,554,184



2,720,253



2,484,927



2,733,924



2,646,365


FHLB and Federal Reserve Bank stock, at cost

29,632



41,475



31,607



45,025



43,383


Bank-owned life insurance

35,379



35,231



35,078



34,916



34,701


Premises and equipment, net

52,729



52,865



53,050



53,160



53,348


Goodwill

29,650



29,650



29,650



29,650



29,650


Other assets

35,528



38,423



41,386



50,099



54,639


Total assets

$

3,383,607



$

3,594,484



$

3,373,636



$

3,663,058



$

3,636,033


LIABILITIES AND SHAREHOLDERS' EQUITY










Non-interest-bearing demand

$

401,136



$

384,836



$

392,759



$

357,800



$

349,880


Interest-bearing demand

451,248



464,262



481,966



488,748



471,672


Savings and money market

896,330



887,082



888,874



880,924



897,515


Time

499,228



453,000



449,491



450,334



473,834


Total deposits

2,247,942



2,189,180



2,213,090



2,177,806



2,192,901


FHLB advances

511,166



800,208



564,221



892,208



852,168


Repurchase agreement and other borrowings

25,000



25,000



25,000



25,000



25,000


Accrued expenses and other liabilities

59,410



46,662



40,358



47,173



49,611


Total liabilities

2,843,518



3,061,050



2,842,669



3,142,187



3,119,680












Shareholders' equity










Common stock

400



399



399



396



396


Additional paid-in capital

375,563



373,378



373,492



372,168



369,904


Retained earnings

180,787



176,569



172,386



164,328



161,887


Accumulated other comprehensive income, net

155



271



2,239



1,895



2,449


Unearned Employee Stock Ownership Plan (ESOP) shares

(16,816)



(17,183)



(17,549)



(17,916)



(18,283)


Total shareholders' equity

540,089



533,434



530,967



520,871



516,353


Total liabilities and shareholders' equity

$

3,383,607



$

3,594,484



$

3,373,636



$

3,663,058



$

3,636,033


 

 

VIEWPOINT FINANCIAL GROUP, INC.

Consolidated Quarterly Statements of Income (unaudited)



For the Quarters Ended


Third Quarter 2013 Compared to:


Sep 30, 2013


Jun 30, 2013


Mar 31, 2013


Dec 31, 2012


Sep 30, 2012


Second Quarter 2013


Third Quarter 2012

Interest and dividend income

(Dollars in thousands)

Loans, including fees

$

30,805



$

32,151



$

30,378



$

33,247



$

32,739



$

(1,346)


(4.2)%


$

(1,934)


(5.9)%

Taxable securities

2,337



2,457



2,403



2,591



3,616



(120)


(4.9)


(1,279)


(35.4)

Nontaxable securities

568



529



474



472



473



39


7.4


95


20.1

Interest-bearing deposits in other financial institutions

32



25



31



31



29



7


28.0


3


10.3

FHLB and Federal Reserve Bank stock

133



134



133



140



151



(1)


(0.7)


(18)


(11.9)


33,875



35,296



33,419



36,481



37,008



(1,421)


(4.0)


(3,133)


(8.5)

Interest expense















Deposits

2,411



2,450



2,432



2,321



2,656



(39)


(1.6)


(245)


(9.2)

FHLB advances

2,066



2,205



2,261



2,423



2,515



(139)


(6.3)


(449)


(17.9)

Repurchase agreement

206



203



201



205



217



3


1.5


(11)


(5.1)

Other borrowings

4







4



1



4


N/M

3


300.0


4,687



4,858



4,894



4,953



5,389



(171)


(3.5)


(702)


(13.0)

Net interest income

29,188



30,438



28,525



31,528



31,619



(1,250)


(4.1)


(2,431)


(7.7)

Provision (benefit) for loan losses

(158)



1,858



883



(17)



814



(2,016)


(108.5)


(972)


(119.4)

Net interest income after provision (benefit) for loan losses

29,346



28,580



27,642



31,545



30,805



766


2.7


(1,459)


(4.7)

Non-interest income















Service charges and fees

4,460



4,768



4,291



5,562



4,885



(308)


(6.5)


(425)


(8.7)

Other charges and fees

300



179



212



142



144



121


67.6


156


108.3

Net gain on sale of mortgage loans









1,030




N/M

(1,030)


(100.0)

Bank-owned life insurance income

148



153



162



216



210



(5)


(3.3)


(62)


(29.5)

Gain (loss) on sale of available for sale securities





(177)





898




N/M

(898)


(100.0)

Gain (loss) on sale and disposition of assets

41



444



230



(241)



187



(403)


(90.8)


(146)


(78.1)

Other

277



199



1,141



815



465



78


39.2


(188)


(40.4)


5,226



5,743



5,859



6,494



7,819



(517)


(9.0)


(2,593)


(33.2)

Non-interest expense















Salaries and employee benefits

13,546



12,528



12,915



13,200



12,685



1,018


8.1


861


6.8

Acquisition costs









242




N/M

(242)


(100.0)

Advertising

666



751



513



599



379



(85)


(11.3)


287


75.7

Occupancy and equipment

1,830



1,938



1,790



1,934



2,009



(108)


(5.6)


(179)


(8.9)

Outside professional services

682



570



684



568



578



112


19.6


104


18.0

Regulatory assessments

629



650



579



661



668



(21)


(3.2)


(39)


(5.8)

Data processing

1,733



1,729



1,518



1,717



1,530



4


0.2


203


13.3

Office operations

1,603



1,751



1,648



1,831



1,834



(148)


(8.5)


(231)


(12.6)

Other

1,484



1,786



1,226



1,195



1,285



(302)


(16.9)


199


15.5


22,173



21,703



20,873



21,705



21,210



470


2.2


963


4.5

Income before income tax expense

12,399



12,620



12,628



16,334



17,414



(221)


(1.8)


(5,015)


(28.8)

Income tax expense

4,187



4,446



4,570



5,973



6,098



(259)


(5.8)


(1,911)


(31.3)

Net income

$

8,212



$

8,174



$

8,058



$

10,361



$

11,316



$

38


0.5%


$

(3,104)


(27.4)%

 

                                                                           

VIEWPOINT FINANCIAL GROUP, INC.

Selected Financial Highlights (unaudited)



At or For the Quarters Ended


September


June


September


2013


2013


2012


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

SHARE DATA:






Weighted average common shares outstanding- basic

37,594,701



37,545,050



37,362,535


Weighted average common shares outstanding- diluted

37,774,400



37,692,513



37,466,031


Shares outstanding at end of period

39,951,884



39,926,716



39,579,667


Income available to common shareholders1

$

8,096



$

8,058



$

11,280


Basic earnings per common share

0.22



0.21



0.30


Diluted earnings per common share

0.21



0.21



0.30


Dividends declared per share

0.10



0.10



0.08


Total shareholders' equity

540,089



533,434



516,353


Common shareholders' equity per share (book value per share)

13.52



13.36



13.05


Tangible book value per share- Non-GAAP2

12.74



12.58



12.25


Market value per share for the quarter:






High

22.34



20.81



19.50


Low

19.62



17.97



15.88


Close

$

20.67



$

20.81



$

19.17


KEY RATIOS:






Return on average common shareholders' equity

6.11

%


6.14

%


8.82

%

Return on average assets

0.97



0.95



1.25


Efficiency ratio3

64.28



60.45



54.47


Estimated Tier 1 risk-based capital ratio4

19.17



17.97



22.16


Estimated total risk-based capital ratio4

19.88



18.66



23.08


Estimated Tier 1 leverage ratio4

15.17



14.71



13.54


Tangible equity to tangible assets- Non-GAAP2

15.18

%


14.10

%


13.45

%

Number of employees- full-time equivalent

561



561



555


 

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 assets, impairment of goodwill, amortization of intangible assets, gains (losses) from securities transactions and other non-recurring items.

4

Calculated at the ViewPoint Financial Group, Inc. level, which is subject to the capital adequacy requirements of the Federal Reserve.  Beginning March 2013, capital ratios reflect a risk weighting change from 50% to 100% on our Warehouse Purchase Program loans.

 

 

VIEWPOINT FINANCIAL GROUP, INC.

Selected Loan Data (unaudited)



Ending Balances at


September 30, 2013


June 30, 2013


March 31, 2013


December 31, 2012


September 30, 2012

Loans:

(Dollars in thousands)

Loans held for sale

$

640,028



$

904,228



$

757,472



$

1,060,720



$

1,014,445


Commercial real estate

1,048,428



1,004,719



897,534



839,908



794,619


Commercial and industrial loans:










Commercial

373,390



288,054



271,605



245,799



226,391


Warehouse lines of credit

17,356



24,977



30,861



32,726



25,936


Total commercial and industrial loans

390,746



313,031



302,466



278,525



252,327


Consumer:










Consumer real estate

444,380



465,055



490,599



513,256



542,103


Other consumer loans

50,115



52,382



55,138



59,080



62,590


Total consumer

494,495



517,437



545,737



572,336



604,693


Gross loans held for investment

1,933,669



1,835,187



1,745,737



1,690,769



1,651,639


Gross loans

$

2,573,697



$

2,739,415



$

2,503,209



$

2,751,489



$

2,666,084


Non-performing assets:










Commercial real estate

$

7,770



$

8,625



$

12,696



$

13,609



$

16,572


Commercial and industrial

5,788



6,849



6,807



5,401



4,597


Consumer real estate

8,237



7,913



7,840



7,931



6,661


Other consumer loans

512



412



378



262



251


Total non-performing loans

22,307



23,799



27,721



27,203



28,081


Foreclosed assets

428



557



1,505



1,901



3,850


Total non-performing assets

$

22,735



$

24,356



$

29,226



$

29,104



$

31,931


Total non-performing assets to total assets

0.67

%


0.68

%


0.87

%


0.79

%


0.88

%

Total non-performing loans to total loans held for investment

1.15



1.30



1.59



1.61



1.70


Allowance for loan losses to non-performing loans

84.59



81.00



67.25



66.36



70.63


Allowance for loan losses to total loans held for investment

0.98



1.05



1.07



1.07



1.20


Allowance for loan losses to total loans held for investment excluding acquired loans 1

1.05

%


1.15

%


1.19

%


1.23

%


1.41

%

Troubled debt restructured loans ("TDRs"):










Performing TDRs:










Commercial real estate

$



$



$

3,372



$

3,384



$

3,087


Commercial and industrial

190



196



202



207



213


Consumer real estate

744



748



963



558



788


Other consumer loans

51



54



62



67



88


Total performing TDRs

$

985



$

998



$

4,599



$

4,216



$

4,176


Non-performing TDRs:2










Commercial real estate

$

7,559



$

8,344



$

11,786



$

11,218



$

8,849


Commercial and industrial

277



75



71



102



105


Consumer real estate

2,690



2,215



2,018



2,235



1,943


Other consumer loans

470



317



261



205



88


Total non-performing TDRs

$

10,996



$

10,951



$

14,136



$

13,760



$

10,985


Allowance for loan losses:










Balance at beginning of period

$

19,277



$

18,642



$

18,051



$

19,835



$

19,229


Provision expense (benefit)

(158)



1,858



883



(17)



814


Charge-offs

(356)



(1,394)



(476)



(1,936)



(412)


Recoveries

106



171



184



169



204


Balance at end of period

$

18,869



$

19,277



$

18,642



$

18,051



$

19,835


Net charge-offs (recoveries)










Commercial real estate

$

34



$

716



$

87



$

185



$

2


Commercial and industrial

204



64



172



893



(31)


Consumer real estate

(18)



320



23



437



94


Other consumer loans

30



123



10



252



143


Total net charge-offs

$

250



$

1,223



$

292



$

1,767



$

208












Excludes loans acquired from Highlands, which were initially recorded at fair value. 

2  Non-performing TDRs are included in the non-performing assets above. 

 

 

VIEWPOINT FINANCIAL GROUP, INC.

Average Balances and Yields/Rates (unaudited)



For the Quarters Ended


September 30, 2013


June 30, 2013


March 31, 2013


December 31, 2012


September 30, 2012

Loans:

(Dollars in thousands)

Commercial real estate

$

1,007,449



$

961,631



$

839,155



$

805,362



$

762,521


Commercial and industrial loans:










Commercial

316,506



288,481



257,510



251,447



183,870


Warehouse lines of credit

21,077



27,670



26,037



26,072



22,639


Consumer real estate

453,939



476,226



504,965



524,213



550,341


Other consumer loans

51,414



53,759



57,164



60,435



63,142


Loans held for sale

685,852



755,577



738,234



908,603



886,743


Less: deferred fees and allowance for loan loss

(18,982)



(18,649)



(17,240)



(19,326)



(19,113)


Loans receivable

2,517,255



2,544,695



2,405,825



2,556,806



2,450,143


Securities

640,041



680,931



674,109



734,598



914,818


Overnight deposits

54,860



45,810



54,096



50,556



49,740


Total interest-earning assets

$

3,212,156



$

3,271,436



$

3,134,030



$

3,341,960



$

3,414,701


Deposits:










Interest-bearing demand

$

448,241



$

459,433



$

465,385



$

463,465



$

474,342


Savings and money market

892,355



883,507



877,690



888,410



894,916


Time

458,431



451,110



450,071



469,772



476,666


FHLB advances and other borrowings

587,651



679,693



590,238



770,627



863,949


Total interest-bearing liabilities

$

2,386,678



$

2,473,743



$

2,383,384



$

2,592,274



$

2,709,873












Total assets

$

3,390,837



$

3,453,699



$

3,322,899



$

3,529,665



$

3,607,101


Non-interest-bearing demand deposits

$

405,344



$

393,815



$

367,217



$

358,707



$

338,074


Total deposits

$

2,204,371



$

2,187,865



$

2,160,363



$

2,180,354



$

2,183,998


Total shareholders' equity

$

537,901



$

532,897



$

527,958



$

520,684



$

513,431












Yields/Rates:










Commercial real estate

5.50

%


5.85

%


5.88

%


6.17

%


6.44

%

Commercial and industrial loans:










Commercial

4.45

%


4.97

%


4.72

%


5.24

%


5.98

%

Warehouse lines of credit

3.56

%


3.57

%


3.63

%


3.71

%


3.82

%

Consumer real estate

5.15

%


5.16

%


5.30

%


5.48

%


5.40

%

Other consumer loans

6.19

%


5.94

%


5.84

%


6.00

%


6.03

%

Loans held for sale

3.86

%


3.87

%


3.92

%


4.05

%


4.11

%

Loans receivable

4.90

%


5.05

%


5.05

%


5.20

%


5.34

%

Securities

1.90

%


1.83

%


1.79

%


1.74

%


1.85

%

Overnight deposits

0.23

%


0.22

%


0.23

%


0.25

%


0.23

%

Total interest-earning assets

4.22

%


4.32

%


4.27

%


4.37

%


4.34

%

Deposits:










Interest-bearing demand

0.39

%


0.41

%


0.40

%


0.43

%


0.61

%

Savings and money market

0.28

%


0.27

%


0.27

%


0.27

%


0.27

%

Time

1.18

%


1.23

%


1.22

%


1.03

%


1.11

%

FHLB advances and other borrowings

1.55

%


1.42

%


1.67

%


1.37

%


1.27

%

Total interest-bearing liabilities

0.79

%


0.79

%


0.82

%


0.76

%


0.80

%

Net interest spread

3.43

%


3.53

%


3.45

%


3.61

%


3.54

%

Net interest margin

3.63

%


3.72

%


3.64

%


3.77

%


3.70

%

Cost of deposits (including non-interest-bearing demand)

0.44

%


0.45

%


0.45

%


0.43

%


0.49

%

 

 

VIEWPOINT FINANCIAL GROUP, INC.

Supplemental Information- Non-GAAP Financial Measures (unaudited)



Ending Balances At


September 30, 2013


June 30, 2013


March 31, 2013


December 31, 2012


September 30, 2012

Calculation of Tangible Book Value per Share:

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

Total shareholders' equity

$

540,089



$

533,434



$

530,967



$

520,871



$

516,353


Less:  Goodwill

(29,650)



(29,650)



(29,650)



(29,650)



(29,650)


Identifiable intangible assets, net

(1,365)



(1,446)



(1,541)



(1,653)



(1,793)


Total tangible shareholders' equity

$

509,074



$

502,338



$

499,776



$

489,568



$

484,910












Shares outstanding at end of period

39,951,884



39,926,716



39,948,031



39,612,911



39,579,667












Book value per share- GAAP

$

13.52



$

13.36



$

13.29



$

13.15



$

13.05


Tangible book value per share- Non-GAAP

12.74



12.58



12.51



12.36



12.25












Calculation of Tangible Equity to Tangible Assets:










Total assets

$

3,383,607



$

3,594,484



$

3,373,636



$

3,663,058



$

3,636,033


Less:  Goodwill

(29,650)



(29,650)



(29,650)



(29,650)



(29,650)


Identifiable intangible assets, net

(1,365)



(1,446)



(1,541)



(1,653)



(1,793)


Total tangible assets

$

3,352,592



$

3,563,388



$

3,342,445



$

3,631,755



$

3,604,590












Equity to assets- GAAP

15.96

%


14.84

%


15.74

%


14.22

%


14.20

%

Tangible common equity to tangible assets- Non-GAAP

15.18



14.10



14.95



13.48



13.45


 

SOURCE ViewPoint Financial Group, Inc.



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