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ViewPoint Financial Group, Inc. Reports Record Fourth Quarter and Full Year 2011 Earnings

 
 

$205.6 Million Linked Quarter Increase in Gross Loans

PLANO, Texas, Feb. 28, 2012 /PRNewswire/ -- ViewPoint Financial Group, Inc. (Nasdaq: VPFG) (the "Company"), the holding company for ViewPoint Bank, N.A., announced financial results today for the quarter and year ended December 31, 2011.  Detailed results of the year will be available in the Company's Annual Report on Form 10-K, which will be filed today and posted on our websites, http://www.viewpointbank.com and http://www.viewpointfinancialgroup.com.  

Performance Highlights

  • All-time high quarterly net income of $9.8 million, an increase of $4.6 million, or 90.0%, from last quarter: The $4.6 million linked quarter increase in net income, excluding the $1.9 million net of tax gain on sale of securities, was driven by an increase in net interest income of $3.7 million.  Full year 2011 net income was $26.3 million, an increase of $8.5 million, or 47.9%, from 2010.
  • Linked quarter growth in Warehouse Purchase Program, commercial real estate and C&I loans drives $205.6 million increase in gross loans: Warehouse Purchase Program loan balances at December 31, 2011, increased by $137.1 million from September 30, 2011, while commercial real estate loan balances increased by $51.8 million and commercial and industrial loan balances increased by $26.6 million.
  • 26 basis point linked quarter increase in net interest margin: Net interest margin increased 26 basis points to 3.13% for the quarter ended December 31, 2011, compared to 2.87% for the quarter ended September 30, 2011.  
  • Full-year 2011 loan growth of 29.0%: During the year ended December 31, 2011, loans increased by $463.4 million, or 29.0%. This increase was driven by a $340.0 million increase in Warehouse Purchase Program loans held for sale and a $104.4 million increase in commercial real estate loan balances.
  • Basic and diluted EPS increased by $0.15 linked quarter to $0.31: Basic and diluted earnings per share for the quarter ended December 31, 2011, were $0.31, up $0.15 from the quarter ended September 30, 2011.  Basic and diluted earnings per share for the year ended December 31, 2011, was $0.81, a $0.22 increase from $0.59 for the year ended December 31, 2010.

"We are very pleased with our results for the quarter," said Interim President and Chief Executive Officer Mark Hord.  "Record quarterly and full-year earnings cap a year in which we also achieved substantial and broad-based loan growth, successfully converted to a national bank charter, and announced a strategic in-market bank acquisition."

James McCarley, Chairman of the Board of the Company, said, "After a strong 2011, and with long-time Texas commercial banker Kevin Hanigan joining ViewPoint as our new President and Chief Executive Officer upon the closing of the Highlands Bancshares, Inc. acquisition, we believe we are well positioned to achieve our goal of becoming the Metroplex's premier community bank."

Net Interest Margin

The net interest margin for the fourth quarter of 2011 was 3.13%, a 26 basis point increase from the third quarter of 2011 and a 15 basis point increase from the fourth quarter of 2010.  The linked quarter increase was primarily due to increased volume in our Warehouse Purchase Program, as the average balance of these loans increased by $309.6 million, and lower deposit costs due to gradual rate reductions in Absolute Checking and other interest-bearing deposit accounts.  The year over year increase was primarily due to increased volume in the Warehouse Purchase Program and commercial real estate loans, as well as reduced deposit and borrowing costs.  The decrease in the average rate paid on borrowings was caused by the strategic decision to fund a portion of the increase in Warehouse Purchase Program balances with short-term advances and the November 2010 restructuring of $91.6 million in fixed-rate FHLB advances.

Results of Operations for the Quarter Ended December 31, 2011

Net income for the quarter ended December 31, 2011, was $9.8 million, an increase of $4.6 million, or 90.0%, from the quarter ended September 30, 2011.  The increase was driven by a $3.7 million increase in net interest income and a $1.9 million net of tax gain on the sale of available for sale securities.   The proceeds from the fourth quarter securities sale funded growth in the Warehouse Purchase Program and commercial real estate and commercial and industrial lending, improving the yield on earnings assets.  

Net income for the quarter ended December 31, 2011, increased $3.3 million, or 50.6%, from the quarter ended December 31, 2010.  The increase in net income was primarily due to a $3.0 million reduction in interest expense and a $1.9 million net of tax gain on the sale of available for sale securities. Our basic and diluted earnings per share for the three months ended December 31, 2011, was $0.31, an $0.11 increase from $0.20 for the three months ended December 31, 2010.

The provision for loan losses was $1.2 million for the three months ended December 31, 2011, a decrease of $100,000, or 7.5%, from the three months ended December 31, 2010.  The balance of the allowance for loan losses increased by $2.7 million from December 31, 2010, to December 31, 2011, as management increased qualitative factors considered in determining the appropriateness of the allowance, due to the continued weak economic conditions and an increase in non-performing loans.  Despite these trends, the Company has not seen an increase in charge-offs, as net charge-offs declined by $796,000 during the fourth quarter of 2011 compared to the same period last year.  

Results of Operations for the Year Ended December 31, 2011

Net income for the year ended December 31, 2011, was $26.3 million, an increase of $8.5 million, or 47.9%, from net income of $17.8 million for the year ended December 31, 2010.  Net income for the year ended December 31, 2011, included a $4.1 million net of tax gain on the sale of available for sale securities.  The increase in net income was driven by higher net interest income, the gain on sale of securities and a lower provision for loan losses, and was partially offset by a $5.4 million decline in the net gain on sales of loans and a $2.1 million increase in noninterest expense.  Our basic and diluted earnings per share for the year ended December 31, 2011, was $0.81, a $0.22 increase from $0.59 for the year ended December 31, 2010.

Financial Condition as of December 31, 2011

Total assets increased by $238.6 million, or 8.1%, to $3.18 billion at December 31, 2011, from $2.94 billion at December 31, 2010.  The increase in total assets was primarily due to a $463.4 million increase in gross loans, primarily funded by a $285.2 million increase in net FHLB advances and a $215.8 million decline in investment securities.

Loan Portfolio

During the year ended December 31, 2011, loans increased in all categories except for the consumer portfolio and one- to four-family construction loans.  This increase included a $340.0 million increase in Warehouse Purchase Program balances, a $104.4 million increase in commercial real estate loans and $31.3 million of growth in commercial and industrial loans.  Gross loans (including $834.3 million in mortgage loans held for sale) increased by $463.4 million, or 29.0%, to $2.06 billion at December 31, 2011, from $1.60 billion at December 31, 2010.  

Our allowance for loan losses at December 31, 2011, was $17.5 million, or 1.42% of total loans, compared to $14.8 million, or 1.34% of total loans, at December 31, 2010.  Our allowance for loan losses to non-performing loans ratio was 75.71% at December 31, 2011, compared to 84.22% as of December 31, 2010.  Our non-performing loans to total loans ratio at December 31, 2011, was 1.88%, compared to 1.59% at December 31, 2010.  Non-performing loans increased by $5.5 million, from $17.6 million at December 31, 2010, to $23.1 million at December 31, 2011.  Compared to September 30, 2011, non-performing loans increased by $5.7 million, primarily due to a $5.3 million increase in commercial real estate non-performing loans.  This increase was due to one commercial real estate loan with a principal balance of $6.1 million that was placed on nonaccrual status in December 2011.

Merger with Highlands Bancshares, Inc.

On December 8, 2011, the Company and Highlands Bancshares, Inc. ("Highlands")  announced that they had entered into a definitive merger agreement whereby the Company will acquire Highlands and its subsidiary bank, the First National Bank of Jacksboro (which operates in the Dallas marketplace as Highlands Bank), in a stock-for-stock transaction.  Under the terms of the agreement, each outstanding share of Highlands common stock will be exchanged for 0.6636 shares of Company stock upon closing.  In addition, the Company announced that Kevin Hanigan, the President, Chief Executive Officer and Chairman of the Board of Directors of Highlands, will assume the role of President and Chief Executive Officer of the Company and the Bank upon the closing of the acquisition.  The Company and Highlands expect to complete the transaction in the second quarter of 2012, after receipt of regulatory approvals, the approval of the shareholders of Highlands and the satisfaction of other customary closing conditions.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company or the solicitation of any vote or approval.  In connection with the proposed merger, the Company filed with the Securities and Exchange Commission ("SEC"), and the SEC has declared effective, a Registration Statement on Form S-4 that includes a proxy statement of Highlands and that also constitutes a prospectus of the Company (the "Proxy Statement/Prospectus").  Investors are strongly urged to read the definitive Proxy Statement/Prospectus regarding the proposed merger and other documents filed with the SEC by the Company, because they contain important information about the proposed merger.

Investors and security holders of the Company and Highlands may obtain free copies of the definitive Proxy Statement/Prospectus for the proposed merger and other documents filed with the SEC by the Company through the SEC's website at www.sec.gov.  These documents are also available free of charge by accessing the Company's website (www.viewpointfinancialgroup.com, under "SEC Filings") or by contacting Mark Hord at (972) 578-5000, Ext. 7440.  

The Company and Highlands and their respective directors and certain of their executive officers, may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the agreement between the Company and Highlands. Information regarding the Company's directors and executive officers is contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, which was filed with the SEC on March 3, 2011, and in its proxy statement prepared in connection with its 2011 Annual Meeting of Shareholders, which was filed with the SEC on April 18, 2011.  Information regarding Highland's directors and officers and a more complete description of the interests of Highlands's directors and officers in the proposed transaction is available in the definitive Proxy Statement/Prospectus.

Conference Call

The Company will host an investor conference call to review these results on Wednesday, February 29, 2012, at 10 a.m., Central Time. Participants are asked to call (toll-free) 1-877-317-6789 at least five minutes prior to the call.  International participants are asked to call 1-412-317-6789 and participants in Canada are asked to call (toll-free) 1-866-605-3852.

The call and corresponding presentation slides will be webcast live on the home page of the Company's website, www.viewpointfinancialgroup.com.  An audio replay will be available one hour after the conclusion of the call at 1-877-344-7529, Conference #10001726.  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 25 community bank offices and eight loan production offices.  For more information, please visit www.viewpointbank.com or www.viewpointfinancialgroup.com.

When used in filings by the Company with the Securities and Exchange Commission (the "SEC") in the Company's press releases or other public or shareholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements are subject to certain risks and uncertainties, including, among other things, completion of our merger with Highlands Bancshares, Inc., 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 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 Company wishes to advise readers that the factors listed above could materially affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

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


VIEWPOINT FINANCIAL GROUP, INC.

Consolidated Balance Sheets

December 31,

(Dollar amounts in thousands, except share data)






2011


2010

ASSETS




Cash and due from financial institutions

$          16,661


$         16,465

Short-term interest-bearing deposits in other financial institutions

29,687


52,185

Total cash and cash equivalents

46,348


68,650

Securities available for sale, at fair value

433,745


717,497

Securities held to maturity (fair value: December 31, 2011 – $518,142




December 31, 2010 – $434,296)

500,488


432,519

Loans held for sale (includes $16,607 and $16,877 carried at fair value at




December 31, 2011 and 2010)

834,352


491,985

Loans held for investment (net of allowance for loan losses of




$17,487 at December 31, 2011 and $14,847 at December 31, 2010)    

1,211,057


1,092,114

FHLB and Federal Reserve Bank stock, at cost

37,590


20,569

Bank-owned life insurance

29,007


28,501

Foreclosed assets, net

2,293


2,679

Premises and equipment, net

50,261


48,731

Goodwill

818


1,089

Accrued interest receivable

8,982


9,248

Prepaid FDIC assessment

4,967


6,606

Other assets

20,670


21,807

Total assets

$     3,180,578


$    2,941,995





LIABILITIES AND SHAREHOLDERS' EQUITY




Deposits




  Non-interest-bearing demand

$        211,670


$       201,998

  Interest-bearing demand

498,253


438,719

  Savings and money market

759,576


711,911

  Time

493,992


664,922

    Total deposits

1,963,491


2,017,550

FHLB advances (net of prepayment penalty of $4,222 at December 31, 2011




 and $5,259 at December 31, 2010)

746,398


461,219

Repurchase agreement

25,000


25,000

Other borrowings

-


10,000

Accrued interest payable

1,220


1,541

Other liabilities

38,160


30,096

      Total liabilities

2,774,269


2,545,406





Commitments and contingent liabilities

-


-





Shareholders' equity




  Preferred stock, $.01 par value; 10,000,000 shares authorized;      




   0 shares issued – December 31, 2011 and December 31, 2010

-


-

  Common stock, $.01 par value; 90,000,000 shares      




    authorized; 33,700,399 shares issued – December 31, 2011




    and 34,839,491 shares issued – December 31, 2010                        

337


349

  Additional paid-in capital

279,473


289,591

  Retained earnings

144,535


125,125

  Accumulated other comprehensive income, net

1,347


2,373

  Unearned Employee Stock Ownership Plan (ESOP) shares; 2,102,234 shares




    at December 31, 2011 and 2,286,428 shares at December 31, 2010

(19,383)


(20,849)

    Total shareholders' equity

406,309


396,589

      Total liabilities and shareholders' equity

$     3,180,578


$    2,941,995





VIEWPOINT FINANCIAL GROUP, INC.

Consolidated Statements of Income

December 31,

(Dollar amounts in thousands, except share data)








2011


2010


2009

Interest and dividend income






  Loans, including fees

$           88,238


$      88,550


$      83,802

  Taxable securities

25,830


24,837


22,919

  Nontaxable securities

1,892


1,528


517

  Interest-bearing deposits in other financial institutions

170


402


652

  FHLB and Federal Reserve Bank stock

94


68


16


116,224


115,385


107,906

Interest expense






  Deposits

22,474


31,015


34,366

  FHLB advances

9,882


11,723


14,056

  Repurchase agreement

816


816


707

  Other borrowings

474


599


157


33,646


44,153


49,286







Net interest income

82,578


71,232


58,620

Provision for loan losses

3,970


5,119


7,652

Net interest income after provision for loan losses

78,608


66,113


50,968







Non-interest income






  Service charges and fees

18,556


18,505


18,954

  Other charges and fees

723


711


586

  Net gain on sale of mortgage loans

7,639


13,041


16,591

  Bank-owned life insurance income

506


384


539

  Impairment of collateralized debt obligations (all credit)

-


-


(12,246)

  Gain on sale of available for sale securities

6,268


-


2,377

  Loss on sale and disposition of assets

(798)


(365)


(1,041)

  Impairment of goodwill

(271)


-


-

  Other

1,925


1,188


1,439


34,548


33,464


27,199

Non-interest expense






  Salaries and employee benefits

47,360


46,203


46,777

  Advertising

1,519


1,285


1,284

  Occupancy and equipment

5,966


5,907


5,999

  Outside professional services

2,644


2,369


1,882

  Regulatory assessments

2,401


3,235


4,018

  Data processing

4,648


4,232


4,209

  Office operations

5,972


5,790


5,984

  Other

4,730


4,125


4,384


75,240


73,146


74,537







Income before income tax expense

37,916


26,431


3,630

Income tax expense

11,588


8,632


960







Net income

$           26,328


$      17,799


$        2,670







Weighted average common shares outstanding - basic

32,219,841


30,128,985


27,881,941

Weighted average common shares outstanding - diluted

32,283,107


30,131,960


27,882,874

Per share information






Basic

$               0.81


$          0.59


$          0.09

Diluted

$               0.81


$          0.59


$          0.09

Cash dividends declared per share

$               0.20


$          0.16


$          0.18





VIEWPOINT FINANCIAL GROUP, INC.

Selected Financial Highlights (unaudited)






At or for the Quarters Ended



December


September


June


March


December



2011


2011


2011


2011


2010



(Dollars in thousands, except per share amounts)

Financial Data:











Total assets


3,180,578


3,235,278


2,963,882


2,796,016


2,941,995

Total loans


2,045,409


1,840,830


1,550,894


1,405,151


1,584,099

Total securities


934,233


1,195,182


1,228,825


1,223,713


1,150,016

Total deposits


1,963,491


2,073,627


2,070,894


2,033,019


2,017,550

Total shareholders' equity


406,309


406,686


407,006


399,785


396,589

Net interest income


24,157


20,479


18,965


18,977


21,168

Provision for loan losses


1,229


581


1,065


1,095


1,329

Noninterest income


10,238


6,207


7,636


10,467


8,686

Noninterest expense


19,544


18,567


18,268


18,861


18,927

Income tax expense


3,848


2,395


2,411


2,934


3,108

Net income


9,774


5,143


4,857


6,554


6,490












Share Data:











Basic earnings per common share


0.31


0.16


0.15


0.20


0.20

Diluted earnings per common share


0.31


0.16


0.15


0.20


0.20

Dividends declared per share


0.05


0.05


0.05


0.05


0.04

Book value per share


12.06


11.87


11.68


11.48


11.38

Tangible book value per share - Non-GAAP (1)


12.02


11.83


11.64


11.43


11.33












Shares outstanding at end of period


33,700,399


34,262,491


34,839,491


34,839,491


34,839,491

Weighted average common shares outstanding - basic


31,617,219


32,468,640


32,445,527


32,353,331


32,304,685

Weighted average common shares outstanding - diluted


31,553,113


32,497,283


32,510,134


32,432,793


32,312,993












Key Ratios:











Tier 1 risk-based capital ratio (2)


24.40%


21.20%


24.93%


27.17%


24.00%

Total risk-based capital ratio (2)


25.46%


21.93%


25.79%


28.09%


24.82%

Tier 1 leverage ratio (2)


12.58%


12.31%


13.50%


14.15%


13.27%

Equity to total assets


12.77%


12.57%


13.73%


14.30%


13.48%

Tangible equity to tangible assets - Non-GAAP (1)


12.74%


12.54%


13.69%


14.25%


13.43%












(1) See the section labeled "Supplemental Information - Non-GAAP Financial Measures" at the end of this document.

(2) Calculated at the ViewPoint Financial Group level, which is subject to the capital adequacy requirements of the Federal Reserve.  On December 19, 2011, the Bank converted its charter from a federal thrift charter to a national banking charter, with regulatory oversight by the OCC.








Ending Balances At



December


September


June


March


December



2011


2011


2011


2011


2010

Deposits:


(Dollars in thousands)

Non-interest bearing demand


$         211,670


$         207,940


$         194,704


$         189,632


$         201,998

Interest-bearing demand


498,253


496,269


482,552


461,272


438,719

Savings


155,276


155,476


156,659


158,399


148,399

Money market


592,979


596,561


575,041


550,503


554,261

IRA


11,321


10,201


10,023


9,555


9,251

Certificates


493,992


607,180


651,915


663,658


664,922

Total Deposits


$      1,963,491


$      2,073,627


$      2,070,894


$      2,033,019


$      2,017,550







Ending Balances At



December


September


June


March


December



2011


2011


2011


2011


2010

Loans:


(Dollars in thousands)

Commercial:











Real estate


583,487


531,729


512,636


483,140


479,071

Construction


1,841


15,185


9,212


1,659


569

Commercial and industrial


70,620


44,014


44,441


38,539


39,279

Total commercial


655,948


590,928


566,289


523,338


518,919

Residential real estate:











One- to four- family


371,655


372,949


376,618


370,852


370,149

Construction


8,289


9,870


8,840


10,662


11,435

Home equity/home improvement


140,966


140,945


142,328


140,518


139,165

Loans held for sale


834,352


691,204


420,617


318,998


491,985

Total residential real estate


1,355,262


1,214,968


948,403


841,030


1,012,734

Consumer loans:











Automobile


33,027


32,525


33,800


37,387


42,550

Unsecured loans


11,747


11,918


12,255


12,999


14,197

Secured consumer loans


6,396


6,476


6,060


5,758


10,619

Total consumer loans


51,170


50,919


52,115


56,144


67,366

Total loans


2,062,380


1,856,815


1,566,807


1,420,512


1,599,019












Nonaccruing loans:











One- to four- family real estate


$         5,340


$        4,896


$        5,337


$        4,081


$            5,938

Commercial real estate


16,076


10,768


10,785


10,074


9,812

Home equity/home improvement


1,226


1,330


1,292


1,153


1,306

Consumer


26


-


186


267


300

Commercial and industrial


430


445


266


455


272

Total non-performing loans


23,098


17,439


17,866


16,030


17,628

Foreclosed assets


2,293


2,098


2,377


2,465


2,679

Total non-performing assets


$       25,391


$      19,537


$      20,243


$      18,495


$          20,307












Total past due loans to total loans (1)


2.19%


0.71%


0.87%


1.31%


1.62%

Total non-performing assets to total assets


0.80%


0.60%


0.68%


0.66%


0.69%

Total non-performing loans to total loans (1)


1.88%


1.50%


1.56%


1.46%


1.59%

Allowance for loan losses to non-performing loans


75.71%


94.82%


90.45%


96.66%


84.22%

Allowance for loan losses to total loans (1)


1.42%


1.42%


1.41%


1.41%


1.34%












Troubled Debt Restructured Loans:











Performing troubled debt restructurings:











One- to four- family real estate


$            136


$           280


$           226


$           131


$               143

Commercial real estate


2,860


2,860


-


-


1,119

Home equity/home improvement


107


-


-


-


-

Consumer


142


48


39


52


26

Commercial and industrial


26


-


-


-


-

Total


$         3,271


$        3,188


$           265


$           183


$            1,288

Nonaccruing troubled debt restructurings:











One- to four- family real estate


$            843


$           855


$           346


$           574


$            2,012

Commercial real estate


9,266


9,264


9,270


9,274


6,252

Home equity/home improvement


81


-


-


-


92

Consumer


18


-


41


44


93

Commercial and industrial


212


214


217


218


220

Total


$       10,420


$      10,333


$        9,874


$      10,110


$            8,669












Allowance for loan losses:











Balance at beginning of period


$       16,535


$      16,159


$      15,494


$      14,847


$          14,591

Provision expense


1,229


581


1,065


1,095


1,329

Charge-offs


(408)


(314)


(527)


(573)


(1,185)

Recoveries


131


109


127


125


112

Balance at end of period


$       17,487


$      16,535


$      16,159


$      15,494


$          14,847












Net Charge-Offs (Recoveries)











One- to four- family real estate


$            161


$             (4)


$             55


$             (4)


101

Commercial real estate


-


(2)


-


(12)


624

Home equity/home improvement


72


9


61


77


1

Consumer


62


77


143


203


205

Commercial and industrial


(18)


125


141


184


142

Total


$            277


$           205


$           400


$           448


$            1,073












(1) Total loans does not include loans held for sale.







Average Balances and Yields/Rates for Quarter Ended



December


September


June


March


December



2011


2011


2011


2011


2010

Loans:


(Dollars in thousands)

One- to four- family real estate


$     377,106


381,322


380,152


375,686


$        378,534

Loans held for sale:











Warehouse Purchase Program


705,261


395,711


282,266


273,572


481,530

ViewPoint Mortgage loans


31,484


21,213


20,894


23,145


38,662

Commercial real estate


556,909


524,516


505,290


482,763


487,200

Home equity/home improvement


140,000


141,483


141,349


140,011


138,725

Consumer


51,225


51,246


53,903


62,815


70,048

Commercial and industrial


51,926


43,806


38,523


39,654


35,442

Less: deferred fees and allowance for loan loss


(16,155)


(16,135)


(15,264)


(15,218)


(15,231)

Loans receivable


1,897,756


1,543,162


1,407,113


1,382,428


1,614,910

Securities


1,147,794


1,237,853


1,228,066


1,211,806


1,148,875

Overnight deposits


43,787


73,236


41,969


113,748


79,934

Total interest-earning assets


3,089,337


$ 2,854,251


$ 2,677,148


$ 2,707,982


$     2,843,719

Deposits:











Interest-bearing demand


$     485,897


$    484,926


$    468,964


$    438,383


$        434,147

Savings and money market


758,191


753,252


733,517


708,342


724,075

Time


559,169


634,754


654,852


663,235


675,830

FHLB advances and other borrowings


750,202


458,620


316,518


417,383


509,597

Total interest-bearing liabilities


$  2,553,459


$ 2,331,552


$ 2,173,851


$ 2,227,343


$     2,343,649












Loans:











One- to four- family real estate


5.16%


5.29%


5.38%


5.37%


5.41%

Loans held for sale:











Warehouse Purchase Program


4.22%


4.36%


4.61%


4.74%


4.87%

ViewPoint Mortgage loans


4.17%


4.34%


5.44%


5.53%


4.52%

Commercial real estate


6.39%


6.60%


6.83%


6.74%


6.97%

Home equity/home improvement


5.67%


5.71%


5.79%


5.78%


5.84%

Consumer


6.47%


6.83%


6.56%


6.59%


6.31%

Commercial and industrial


5.92%


6.36%


6.46%


6.78%


6.74%

Less: deferred fees and allowance for loan loss


-


-


-


-


-

Loans receivable


5.29%


5.66%


5.92%


5.92%


5.85%

Securities


2.16%


2.30%


2.32%


2.43%


2.67%

Overnight deposits


0.24%


0.24%


0.27%


0.25%


0.29%

Total interest-earning assets


4.06%


4.06%


4.18%


4.12%


4.41%












Deposits:











Interest-bearing demand


1.39%


1.78%


2.02%


1.92%


2.20%

Savings and money market


0.30%


0.46%


0.57%


0.56%


0.90%

Time


1.56%


1.69%


1.75%


1.80%


1.87%

FHLB advances and other borrowings


1.47%


2.46%


3.49%


2.72%


2.36%

Total interest-bearing liabilities


1.12%


1.46%


1.66%


1.60%


1.74%

Net interest spread


2.94%


2.60%


2.52%


2.52%


2.67%

Net interest margin


3.13%


2.87%


2.83%


2.80%


2.98%






Average Balance and Interest Rate Information for the Year Ended December 31,


2011


2010


Average

Outstanding

Balance


Interest

Earned/Paid


Yield/

Rate


Average

Outstanding

Balance


Interest

Earned/Paid


Yield/

Rate


(Dollars in thousands)

Interest-earning assets:












One- to four- family real estate

$      378,578


$      20,058


5.30%


$     389,002


$       21,422


5.51%

Warehouse Purchase Program loans held for sale

415,334


18,243


4.39%


368,341


17,973


4.88%

ViewPoint Mortgage loans held for sale

24,199


1,163


4.81%


38,946


1,808


4.64%

Commercial real estate

517,592


34,320


6.63%


473,400


32,006


6.76%

Home equity/home improvement

140,713


8,072


5.74%


133,328


8,025


6.02%

Consumer

54,756


3,622


6.61%


80,298


5,038


6.27%

Commercial and industrial

43,512


2,760


6.34%


35,283


2,278


6.46%

Less: deferred fees and allowance for loan loss

(15,697)


-


-


(14,352)


-


-%

Loans receivable (1)

1,558,987


88,238


5.66%


1,504,246


88,550


5.89%

Agency mortgage-backed securities

455,552


12,583


2.76%


466,536


13,959


2.99%

Agency collateralized mortgage obligations

666,861


12,940


1.94%


361,453


9,025


2.50%

Investment securities

62,410


2,199


3.52%


100,879


3,381


3.35%

FHLB  and FRB stock

21,468


94


0.44%


16,939


68


0.40%

Interest earning deposit accounts

68,007


170


0.25%


90,614


402


0.44%

Total interest-earning assets

2,833,285


116,224


4.10%


2,540,667


115,385


4.54%













Non-interest-earning assets

134,562






157,703

















Total assets

$   2,967,847






$  2,698,370

















Interest-bearing liabilities:












Interest-bearing demand

469,715


8,309


1.77%


374,083


8,976


2.40%

Savings and money market

738,503


3,466


0.47%


718,224


9,102


1.27%

Time

627,736


10,699


1.70%


658,988


12,937


1.96%

Borrowings

486,519


11,172


2.30%


399,880


13,138


3.29%

Total interest-bearing liabilities

2,322,473


33,646


1.45%


2,151,175


44,153


2.05%













Non-interest-bearing checking

195,278






183,720

















Non-interest-bearing liabilities

41,832






50,853

















Total liabilities

2,559,583






2,385,748

















Total shareholders' equity

408,264






312,622

















Total liabilities and shareholders'












equity

$   2,967,847






$  2,698,370

















Net interest income and margin



$      82,578


2.91%




$       71,232


2.80%

Net interest income and margin (tax-equivalent basis) (2)



$      83,273


2.94%




$       72,096


2.84%

Net interest rate spread





2.65%






2.49%

Net earning assets

$      510,812






$     389,492





Average interest-earning assets to












  average interest-bearing liabilities

121.99%






118.11%



















(1) Calculated net of deferred fees, loan discounts, loans in process and allowance for loan losses.  Includes loans held for sale.   Construction loans have been included in the one- to four- family and commercial real estate line items, as appropriate.

(2) In order to make pretax income and resultant yields on tax-exempt investments and loans comparable to those on taxable investments and loans, a tax-equivalent adjustment has been computed using a federal income tax rate of 35%.  Tax-exempt investments and loans had an average balance of $52.6 million and $41.7 million for the years ended December 31, 2011 and 2010.





At December 31, 2011


Amortized

Cost


Unrealized

Gains


Unrealized

Losses


Fair Value



(Dollars in thousands)

Securities Available for Sale:









Agency mortgage-backed securities


$     133,907


$      1,125


$       (179)


$  134,853

Agency collateralized mortgage obligations


293,584


1,676


(590)


294,670

SBA pools


4,161


61


-


4,222

    Total securities


$     431,652


$      2,862


$       (769)


$  433,745










Securities Held to Maturity:









Agency mortgage-backed securities


$     180,499


$      8,243


$         (23)


$  188,719

Agency collateralized mortgage obligations


269,516


4,712


(218)


274,010

Municipal bonds


50,473


4,940


-


55,413

    Total securities


$     500,488


$    17,895


$       (241)


$  518,142





VIEWPOINT FINANCIAL GROUP, INC.

SUPPLEMENTAL INFORMATION – Non-GAAP Financial Measures (unaudited)






Ending Balances At



December


September


June


March


December



2011


2011


2011


2011


2010



(Dollars in thousands, except per share amounts)

Calculation of Tangible Book Value per Share:










Total shareholders' equity at end of period


$     406,309


$      406,686


$       407,006


$     399,785


$     396,589

Less:   Goodwill


(818)


(818)


(818)


(1,089)


(1,089)

Identifiable intangible assets, net


(420)


(466)


(578)


(638)


(636)

Total tangible shareholders' equity at end of period

$     405,071


$      405,402


$       405,610


$     398,058


$     394,864












Shares outstanding at end of period


33,700,399


34,262,491


34,839,491


34,839,491


34,839,491












Book value per share - GAAP


12.06


11.87


11.68


11.48


11.38

Tangible book value per share - Non-GAAP


12.02


11.83


11.64


11.43


11.33












Calculating of Tangible Equity to Tangible Assets:









Total assets at end of period


$  3,180,578


$   3,235,278


$    2,963,882


$  2,796,016


$  2,941,995

Less:   Goodwill


(818)


(818)


(818)


(1,089)


(1,089)

Identifiable intangible assets, net


(420)


(466)


(578)


(638)


(636)

Total tangible assets at end of period


$  3,179,340


$   3,233,994


$    2,962,486


$  2,794,289


$  2,940,270












Equity to assets - GAAP


12.77%


12.57%


13.73%


14.30%


13.48%

Tangible equity to tangible assets - Non-GAAP


12.74%


12.54%


13.69%


14.25%


13.43%




SOURCE ViewPoint Financial Group, Inc.

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