PLANO, Texas, July 23 /PRNewswire-FirstCall/ -- ViewPoint Financial Group, Inc. , the holding company for ViewPoint Bank, announced financial results today for its predecessor entity, ViewPoint Financial Group (the "Company"), for the three and six month periods ended June 30, 2010. Detailed results of the quarter will be available in ViewPoint Financial Group, Inc.'s Quarterly Report on Form 10-Q, which we expect to be filed on July 26, 2010, and posted on our websites, http://viewpointbank.com/ and http://viewpointfinancialgroup.com/. References to the Company in this document refer to ViewPoint Financial Group, ViewPoint Financial Group, Inc., and ViewPoint Bank, as the context requires.
Performance Highlights -- Shareholders and depositors approved plan of conversion and reorganization: In June 2010, the Company's shareholders and ViewPoint Bank's depositors approved the plan of conversion and reorganization, and the conversion and offering was completed on July 6, 2010. -- EPS of $0.13 the highest since becoming public company: Basic and diluted quarterly earnings per share of $0.13, up $0.02 from last quarter and up $0.29 from the same period last year, is our highest quarterly EPS since becoming a public company in 2006. -- NPA ratio below 1.00%: Our non-performing assets to total assets ratio was 0.85% at June 30, 2010, outperforming the SNL Bank and Thrift industry index of 2.72%. -- Net charge-offs declined by 50%: Net charge-offs for the three months ended June 30, 2010, decreased $494,000, or 49.6%, from the same period last year. -- Continued loan growth: Warehouse Purchase Program and commercial non-mortgage loans helped gross loans (including loans held for sale) increase by $161.1 million, or 11.0%, from December 31, 2009. -- Deposit growth of $152.4 million: Deposits increased by $152.4 million, or 8.5%, from December 31, 2009, primarily due to growth of $123.1 million in interest bearing demand accounts.
"We are pleased to report continued earnings improvement and our new status as a full-stock company," said Gary Base, President and Chief Executive Officer. "Many thanks to the shareholders, depositors and employees who made our reorganization possible. We look forward to taking advantage of new opportunities for growth in the months and years ahead."
Results of Operations for the Three and Six Months Ended June 30, 2010
Net income for the three months ended June 30, 2010, was $3.2 million, an increase of $7.0 million from a net loss of $3.8 million for the three months ended June 30, 2009. The net loss for the three months ended June 30, 2009, resulted from a $7.8 million (net of tax, using a tax rate of 34%) impairment charge on the Company's collateralized debt obligations. These collateralized debt obligations were sold in June 2009, eliminating this type of investment from the Company's books. Net income excluding this impairment charge for the three months ended June 30, 2009, was $3.9 million. The $748,000 decrease in net income in the June 30, 2010, period compared to June 30, 2009, results, excluding the 2009 impairment charge, was driven by lower non-interest income and higher provision for loan losses for the three months ended June 30, 2010, and was partially offset by higher net interest income and lower non-interest expense. Our basic and diluted earnings per share for the three months ended June 30, 2010, increased $0.29 from the three months ended June 20, 2009, to $0.13, which is the highest quarterly earnings per share the Company has recorded since becoming public in 2006.
Net income for the six months ended June 30, 2010, was $5.9 million, an increase of $8.5 million from a net loss of $2.6 million for the six months ended June 30, 2009. Net income excluding an $8.1 million (net of tax) impairment charge for the six months ended June 30, 2009, was $5.5 million. The $406,000 increase in net income in the June 30, 2010, period compared to June 30, 2009, results, excluding the 2009 impairment charge on collateralized debt obligations, was driven by higher net interest income and lower non-interest expense and was partially offset by higher provision for loan losses and lower non-interest income. The decrease in non-interest income was primarily due to lower net gains on sale of loans during the six months ended June 30, 2010, compared to the same period last year and a $2.4 million gain on the sale of available for sale securities during the six months ended June 30, 2009, with no similar transaction in the 2010 period. Our basic and diluted earnings per share for the six months ended June 30, 2010, increased to $0.24 from a loss per share of $.11 for the six months ended June 30, 2009.
Net Interest Rate Spread and Margin
The net interest rate spread increased one basis point to 2.46% for the three months ended June 30, 2010, from 2.45% for the same period last year. The net interest margin decreased seven basis points to 2.73% for the three months ended June 30, 2010, from 2.80% for the three months ended June 30, 2009.
The net interest rate spread increased six basis points to 2.43% for the six months ended June 30, 2010, from 2.37% for the same period last year. The net interest margin decreased four basis points to 2.71% for the six months ended June 30, 2010, from 2.75% for the six months ended June 30, 2009.
Financial Condition as of June 30, 2010
Total assets increased by $385.0 million, or 16.2%, to $2.76 billion at June 30, 2010, from $2.38 billion at December 31, 2009. The rise in total assets was primarily due to a $163.4 million increase in loans held for sale, a $117.8 million increase in securities available for sale and a $79.0 million increase in interest bearing deposits in other financial institutions. Asset growth was funded by a $152.4 million increase in deposits and a $132.3 million increase in FHLB advances.
Loan Portfolio and Asset Quality
The Company's mortgage subsidiary, VPBM, originated $126.6 million in one-to four-family mortgage loans during the three months ended June 30, 2010, and sold $92.4 million to investors, generating a net gain on sale of loans of $3.2 million. Also, $9.8 million in VPBM-originated loans were retained in our portfolio. Commercial real estate loans increased by $26.9 million, or 5.9%, from December 31, 2009. Our commercial real estate portfolio consists almost exclusively of loans secured by existing, multi-tenanted commercial buildings. 89% of our commercial real estate loan balances are secured by properties located in Texas, a market that has not experienced the same economic pressures currently being experienced in other geographic areas.
The percentage of non-performing loans to total loans at June 30, 2010, was 1.71%, compared to 1.13% at December 31, 2009. Non-performing loans increased by $6.4 million, from $12.7 million at December 31, 2009, to $19.1 million at June 30, 2010. The increase in non-performing loans was primarily due to the addition of three commercial real estate loans totaling $8.1 million that were placed on nonaccrual. The non-performing asset ratio for June 30, 2010 was 0.85%, which remains well below the SNL Bank and Thrift industry index of 2.72%.
The provision for loan losses was $1.9 million for the three months ended June 30, 2010, an increase of $394,000, or 26.4%, from $1.5 million for the same time last year. This increase was primarily due to a higher level of non-performing loans. This increase in the provision was partially offset by a decrease in net charge-offs of $493,000 over the same period last year and minimal loan growth. The provision for loan losses was $3.0 million for the six months ended June 30, 2010, an increase of $98,000, or 3.3%, from $2.9 million for the same time last year. Our resulting allowance for loan losses increased from $12.3 million, or 1.10% of gross loans, at December 31, 2009, to $14.3 million, or 1.28%, of gross loans, at June 30, 2010.
Conversion, Reorganization and Related Stock Offering
On July 6, 2010, we completed our conversion from the mutual holding company structure and related public stock offering. As a result of that conversion, ViewPoint Bank has a new stock form holding company, ViewPoint Financial Group, Inc., that is wholly owned by public shareholders. All outstanding shares of ViewPoint Financial Group common stock (other than those owned by ViewPoint MHC) were converted into the right to receive 1.40 shares of ViewPoint Financial Group, Inc. common stock. ViewPoint Financial Group, Inc. sold a total of 19,857,337 shares of common stock at a purchase price of $10.00 per share in the offering, including 1,588,587 shares purchased by the ViewPoint Bank Employee Stock Ownership Plan. The offering resulted in proceeds of $198.6 million, which includes ESOP proceeds of $15.9 million. Following the conversion, ViewPoint Financial Group, Inc. had 34,864,800 shares of common stock outstanding. The below table shows earnings per share on a pro-forma basis assuming that the conversion had taken place at the beginning of the periods set forth below and that we maintained the same number of shares outstanding throughout each period.
Three Months Six Months Ended Ended June 30, 2010 June 30, 2010 ------------- ------------- (Dollar amounts in thousands, except share and per share data) Shares outstanding after conversion 34,864,800 34,864,800 Less: unvested restricted shares (243,705) (243,705) Less: existing unearned ESOP shares (789,286) (789,286) Less: new unearned ESOP shares (1,588,587) (1,588,587) ---------- ---------- 32,243,222 32,243,222 Net income $3,196 $5,901 Pro forma earnings per share after conversion $0.10 $0.18 About ViewPoint Financial Group, Inc.
ViewPoint Financial Group, Inc. is the holding company for ViewPoint Bank. ViewPoint Bank operates 23 community bank offices and 16 loan production offices. For more information, please visit http://www.viewpointbank.com/ or http://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, competition, changes in management's business strategies and other factors set forth under Risk Factors in our 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 AND SUBSIDIARY Condensed Consolidated Statements of Condition (In thousands) December June 30, 31, 2010 2009 ---- ---- ASSETS (unaudited) Total cash and cash equivalents $131,086 $55,470 Securities available for sale, at fair value 601,888 484,058 Securities held to maturity 280,515 254,724 Mortgage loans held for sale 504,858 341,431 Loans, net of deferred net loan origination fees and allowance of $14,315 - 1,104,141 1,108,159 June 30, 2010, $12,310 - December 31, 2009 Federal Home Loan Bank stock 19,680 14,147 Bank-owned life insurance 28,287 28,117 Premises and equipment, net 49,318 50,440 Accrued interest receivable and other assets 44,688 42,958 ------ ------ Total assets $2,764,461 $2,379,504 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Non-interest bearing demand 185,381 193,581 Interest bearing demand 391,129 268,063 Savings and money market 722,656 701,835 Time 649,912 633,186 ------- ------- Total deposits 1,949,078 1,796,665 Federal Home Loan Bank advances 444,835 312,504 Repurchase agreement and other borrowings 35,000 35,000 Accrued interest payable and other liabilities 122,668 29,653 ------- ------ Total liabilities 2,551,581 2,173,822 --------- --------- Total shareholders' equity 212,880 205,682 ------- ------- Total liabilities and shareholders' equity $2,764,461 $2,379,504 ========== ========== VIEWPOINT FINANCIAL GROUP AND SUBSIDIARY Condensed Consolidated Statements of Income (Loss) (In thousands except per share data) Three Months Six Months Ended Ended June 30, June 30, -------- -------- 2010 2009 2010 2009 ---- ---- ---- ---- Interest and dividend income (unaudited) Loans, including fees $21,637 $21,224 $42,010 $41,962 Securities 5,931 5,913 11,649 12,627 Interest bearing deposits in other financial institutions 129 169 277 228 Federal Home Loan Bank stock 15 3 32 3 --- --- --- --- 27,712 27,309 53,968 54,820 Interest expense Deposits 7,889 8,714 15,518 17,859 Federal Home Loan Bank advances 3,022 3,585 6,161 7,361 Other borrowings 354 195 703 325 --- --- --- --- 11,265 12,494 22,382 25,545 Net interest income 16,447 14,815 31,586 29,275 Provision for loan losses 1,888 1,494 3,034 2,936 ----- ----- ----- ----- Net interest income after provision for loan losses 14,559 13,321 28,552 26,339 Net gain on sales of loans 3,165 5,331 5,820 9,037 Other non-interest income (loss) 5,004 (4,123) 9,905 (400) Non-interest expense 18,002 19,951 35,561 38,570 ------ ------ ------ ------ Income (loss) before income tax expense (benefit) 4,726 (5,422) 8,716 (3,594) Income tax expense (benefit) 1,530 (1,591) 2,815 (1,007) ----- ------ ----- ------ Net income (loss) $3,196 $(3,831) $5,901 $(2,587) ====== ======= ====== ======= Basic and diluted earnings (loss) per share $0.13 $(0.16) $0.24 $(0.11) ===== ====== ===== ====== VIEWPOINT FINANCIAL GROUP AND SUBSIDIARY Selected Financial Data (Dollar amounts in thousands, except share and per share data) (unaudited) Three Months Ended ------------------ June Mar Dec 2010 2010 2009 ---- ---- ---- Share Data for Earnings per Share Calculation:(1) Weighted average common shares outstanding 24,918,453 24,929,157 24,929,157 Less: average unallocated ESOP shares (579,142) (602,575) (626,017) Less: average unvested restricted shares (221,176) (258,118) (260,118) -------- -------- -------- Average shares 24,118,135 24,068,464 24,043,022 Diluted average shares 24,118,135 24,068,464 24,043,022 Net income (loss) $3,196 $2,705 $2,364 Earnings (loss) per share $0.13 $0.11 $0.10 Share data at period-end:(1) Total shares issued 26,208,958 26,208,958 26,208,958 Less: Treasury stock (1,305,435) (1,279,801) (1,279,801) ---------- ---------- ---------- Total shares outstanding 24,903,523 24,929,157 24,929,157 Location Data: Number of full-service community bank offices 21 21 21 Number of in-store banking centers 2 2 2 --- --- --- Total community bank offices 23 23 23 Number of loan production offices 16 15 15 Performance Ratios (2): Return on assets 0.50% 0.45% 0.40% Return on equity 5.89% 5.23% 4.65% Non-interest income to operating revenues 22.77% 22.35% 24.58% Operating expenses to average total assets 2.82% 2.92% 3.09% Efficiency ratio (3) 73.13% 77.37% 75.12% Capital Ratios: Equity to total assets 7.70% 8.42% 8.64% Risk-based capital to risk- weighted assets (4) 14.55% 15.28% 15.27% Tier 1 capital to risk- weighted assets (4) 13.64% 14.37% 14.39% ----------------------- ----- ----- ----- (unaudited) Three Months Ended ------------------ Sept June 2009 2009 ---- ---- Share Data for Earnings per Share Calculation:(1) Weighted average common shares outstanding 24,929,157 24,929,157 Less: average unallocated ESOP shares (649,537) (672,886) Less: average unvested restricted shares (260,118) (307,219) -------- -------- Average shares 24,019,502 23,949,052 Diluted average shares 24,019,502 23,949,052 Net income (loss) $2,893 $(3,831) Earnings (loss) per share $0.12 $(0.16) Share data at period-end:(1) Total shares issued 26,208,958 26,208,958 Less: Treasury stock (1,279,801) (1,279,801) ---------- ---------- Total shares outstanding 24,929,157 24,929,157 Location Data: Number of full-service community bank offices 21 20 Number of in-store banking centers 2 3 --- --- Total community bank offices 23 23 Number of loan production offices 16 15 Performance Ratios (2): Return on assets 0.51% -0.68% Return on equity 5.78% -7.86% Non-interest income to operating revenues 26.94% 2.86% Operating expenses to average total assets 3.16% 3.54% Efficiency ratio (3) 75.45% 71.76% Capital Ratios: Equity to total assets 8.58% 8.65% Risk-based capital to risk- weighted assets (4) 14.33% 13.83% Tier 1 capital to risk- weighted assets (4) 13.60% 13.14% ----------------------- ----- ----- (unaudited) Six Months Ended ---------------- June June 2010 2009 ---- ---- Share Data for Earnings per Share Calculation:(1) Weighted average common shares outstanding 24,923,775 24,929,157 Less: average unallocated ESOP shares (590,794) (684,538) Less: average unvested restricted shares (239,545) (325,588) -------- -------- Average shares 24,093,436 23,919,031 Diluted average shares 24,093,436 23,919,031 Net income (loss) $5,901 $(2,587) Earnings (loss) per share $0.24 $(0.11) Share data at period-end:(1) Total shares issued 26,208,958 26,208,958 Less: Treasury stock (1,305,435) (1,279,801) ---------- ---------- Total shares outstanding 24,903,523 24,929,157 Location Data: Number of full-service community bank offices 21 20 Number of in-store banking centers 2 3 --- --- Total community bank offices 23 23 Number of loan production offices 16 15 Performance Ratios (2): Return on assets 0.48% -0.23% Return on equity 5.59% -2.65% Non-interest income to operating revenues 22.56% 13.61% Operating expenses to average total assets 2.87% 3.43% Efficiency ratio (3) 75.16% 76.90% Capital Ratios: Equity to total assets 7.70% 8.65% Risk-based capital to risk- weighted assets (4) 14.55% 13.83% Tier 1 capital to risk- weighted assets (4) 13.64% 13.14% ----------------------- ----- ----- (1) Per share information is based on shares outstanding as of dates indicated and does not reflect effects of conversion and reorganization. (2) With the exception of end of period ratios, all ratios are based on average monthly balances and are annualized where appropriate. (3) Calculated by dividing total noninterest expense by net interest income plus noninterest income, excluding impairment on securities. (4) Calculated at the ViewPoint Bank level, which is subject to capital adequacy requirements by the Office of Thrift Supervision. VIEWPOINT FINANCIAL GROUP AND SUBSIDIARY Selected Financial Data, continued (Dollar amounts in thousands, except share and per share data) (unaudited) ----------- As of or For the Three Months Ended ----------------------------------- June Mar Dec 2010 2010 2009 ---- ---- ---- Asset Quality Data and Ratios: Non-performing loans $19,088 $11,975 $12,653 Non-performing assets to total assets 0.85% 0.61% 0.70% Non-performing loans to total loans (1) 1.71% 1.07% 1.13% Allowance for loan losses to non-performing loans 74.99% 107.97% 97.29% Allowance for loan losses to total loans (1) 1.28% 1.15% 1.10% Average Balances: Loans (2) $1,461,923 $1,364,502 $1,420,831 Securities 865,662 782,093 758,054 Overnight deposits 82,157 113,512 57,516 ------ ------- ------ Total interest earning assets 2,409,742 2,260,107 2,236,401 Deposits: Interest bearing demand $356,048 $284,063 $231,817 Savings and money market 723,929 700,001 695,117 Time 662,139 657,090 650,055 FHLB advances and other borrowings 366,668 342,336 359,436 ------- ------- ------- Total interest bearing liabilities $2,108,784 $1,983,490 $1,936,425 Yields: Loans 5.92% 5.97% 5.97% Securities 2.75% 2.93% 3.05% Overnight deposits 0.63% 0.52% 0.76% Total interest earning assets 4.60% 4.65% 4.85% Deposits: Interest bearing demand 2.47% 2.27% 2.29% Savings and money market 1.36% 1.48% 1.56% Time 1.95% 2.08% 2.42% FHLB advances and other borrowings 3.68% 4.08% 4.01% Total interest bearing liabilities 2.14% 2.24% 2.39% Net interest spread 2.46% 2.41% 2.46% Net interest margin 2.73% 2.68% 2.78% ------------------- ---- ---- ---- (unaudited) ----------- As of or For the Three Months Ended ----------------------------------- Sept June 2009 2009 ---- ---- Asset Quality Data and Ratios: Non-performing loans $14,640 $7,337 Non-performing assets to total assets 0.67% 0.40% Non-performing loans to total loans (1) 1.30% 0.62% Allowance for loan losses to non-performing loans 74.83% 136.24% Allowance for loan losses to total loans (1) 0.97% 0.84% Average Balances: Loans (2) $1,406,372 $1,429,924 Securities 619,359 612,573 Overnight deposits 132,937 74,415 ------- ------ Total interest earning assets 2,158,668 2,116,912 Deposits: Interest bearing demand $180,997 $137,302 Savings and money market 674,768 667,376 Time 659,951 672,779 FHLB advances and other borrowings 354,095 365,950 ------- ------- Total interest bearing liabilities $1,869,811 $1,843,407 Yields: Loans 5.98% 5.94% Securities 3.26% 3.86% Overnight deposits 0.95% 0.91% Total interest earning assets 4.89% 5.16% Deposits: Interest bearing demand 2.16% 1.86% Savings and money market 1.73% 1.81% Time 2.82% 3.01% FHLB advances and other borrowings 4.10% 4.13% Total interest bearing liabilities 2.60% 2.71% Net interest spread 2.29% 2.45% Net interest margin 2.63% 2.80% ------------------- ---- ---- As of or For the Six Months Ended -------------------- June June 2010 2009 ---- ---- Asset Quality Data and Ratios: Non-performing loans $19,088 $7,337 Non-performing assets to total assets 0.85% 0.40% Non-performing loans to total loans (1) 1.71% 0.62% Allowance for loan losses to non-performing loans 74.99% 136.24% Allowance for loan losses to total loans (1) 1.28% 0.84% Average Balances: Loans (2) $1,413,161 $1,444,820 Securities 823,878 633,974 Overnight deposits 98,261 51,204 ------ ------ Total interest earning assets 2,335,300 2,129,998 Deposits: Interest bearing demand $320,055 $120,842 Savings and money market 711,965 655,796 Time 659,614 667,599 FHLB advances and other borrowings 354,502 392,051 ------- ------- Total interest bearing liabilities $2,046,136 $1,836,288 Yields: Loans 5.95% 5.81% Securities 2.84% 3.98% Overnight deposits 0.56% 0.89% Total interest earning assets 4.62% 5.15% Deposits: Interest bearing demand 2.38% 1.73% Savings and money market 1.42% 1.95% Time 2.01% 3.12% FHLB advances and other borrowings 3.87% 3.92% Total interest bearing liabilities 2.19% 2.78% Net interest spread 2.43% 2.37% Net interest margin 2.71% 2.75% ------------------- ---- ---- (1) Total loans does not include loans held for sale. (2) Includes loans held for sale
ViewPoint Financial Group, Inc.
CONTACT: Mark Hord of ViewPoint Financial Group, Inc., +1-972-578-5000,
ext. 7440
