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ViewPoint Financial Group Reports Operating Results (10-Q)

May 07, 2009 | About:

ViewPoint Financial Group (VPFG) filed Quarterly Report for the period ended 2009-03-31.

VIEWPOINT FINANCIAL GROUP is the holding company for Plano-based ViewPoint Bank. ViewPoint Bank is the largest bank based in Collin County. It operates twenty eight branches and nine loan production offices. ViewPoint Financial Group has a market cap of $369.5 million; its shares were traded at around $14.82 with a P/E ratio of 59.3 and P/S ratio of 2.9. The dividend yield of ViewPoint Financial Group stocks is 2%.

Highlight of Business Operations:

Loans. Net loans (including $220.8 million in mortgage loans held for sale) increased $52.7 million, or 3.8%, from $1.40 billion at December 31, 2008 to $1.45 billion at March 31, 2009. This increase was primarily due to a $60.9 million increase in mortgage loans held for sale: $24.5 million of the increase in loans held for sale was contributed by ViewPoint Bankers Mortgage, while $36.4 million of growth was attributable to mortgage warehouse lines originated for sale under our standard loan participation agreement. Warehouse lines of credit increased by $17.9 million, or 33.6%, from $53.3 million at December 31, 2008, to $71.2 million at March 31, 2009, while commercial non-mortgage loans increased by $1.0 million, or 5.4%.

Our non-performing loans to total loans ratio at March 31, 2009, was 0.49% compared to 0.38% at December 31, 2008. Nonaccrual loans increased by $3.2 million, from $2.2 million at December 31, 2008, to $5.4 million at March 31, 2009, while troubled debt restructurings decreased by $1.9 million, from $2.5 million at December 31, 2008, to $674,000 at March 31, 2009. Two commercial real estate loans totaling $1.8 million were reported as troubled debt restructurings at December 31, 2008, but have since been placed into nonaccrual status during the quarter ended March 31, 2009. These two loans are delinquent and are currently graded as substandard. Based on current valuations, $84,000 of specific reserve has been allocated to these two loans. Additionally, one-to four-family mortgage nonaccruals increased from $1.4 million at December 31, 2008, to $2.6 million at March 31, 2009. At March 31, 2009, our non-performing assets made up 0.34% of total assets, compared to 0.29% of total assets at December 31, 2008.

Our allowance for loan losses at March 31, 2009, was $9.5 million, or 0.76% of gross loans, compared to $9.1 million, or 0.73% of gross loans, at December 31, 2008. The $430,000, or 4.7%, increase in our allowance for loan losses was primarily due to a $442,000 increase in specific allowance as our individually analyzed impaired loans increased by $1.2 million, from $4.7 million at December 31, 2008, to $5.9 million at March 31, 2009. Net charge-offs for the three months ended March 31, 2009, were $1.0 million, compared to $1.1 million for the three months ended December 31, 2008, and $748,000 for the three months ended March 31, 2008.

Deposits. Total deposits increased by $87.1 million, or 5.6%, to $1.64 billion at March 31, 2009, from $1.55 billion at December 31, 2008. We experienced growth in all of our deposit products, primarily in our savings and money market accounts, which increased by $36.3 million, or 5.7%, and our time accounts, which increased by $24.5 million, or 3.8%. The growth in time deposits is primarily attributable to certificates from the CDARS® network. Through CDARS®, the Company can provide a depositor the ability to place up to $50.0 million on deposit with the Company while receiving FDIC insurance on the entire deposit by virtue of the Company placing customer funds in excess of FDIC deposit insurance limits with other financial institutions in the CDARS® network. In return, these financial institutions place customer funds with the Company on a reciprocal basis. We also saw a significant increase in our interest-bearing demand accounts, which increased by $20.4 million, or 20.7%, from $98.9 million at December 31, 2008, to $119.3 million at March 31, 2009; this growth was due to our Absolute Checking product, which currently provides a 4.0% annual percentage yield on account balances up to $50,000 when certain stipulations are met.

Interest Income. Interest income increased by $5.4 million, or 24.3%, from $22.1 million for the three months ended March 31, 2008, to $27.5 million for the three months ended March 31, 2009. This increase was primarily due to a $6.4 million, or 44.8%, increase in interest income on loans, as the average balance of our loan portfolio increased by $504.2 million, or 52.8%, from $955.5 million for the three months ended March 31, 2008, to $1.46 billion for the three months ended March 31, 2009. Also, the average balance of mortgage-backed securities increased by $90.8 million, or 49.1%, from $184.6 million for the three months ended March 31, 2008, to $275.4 million for the three months ended March 31, 2009. These increases were partially offset by a $30.9 million, or 8.9%, decrease in the average balance of collateralized mortgage obligations, which decreased from $349.3 million for the three months ended March 31, 2008, to $318.4 million for the three months ended March 31, 2009. Overall, due to the lower interest rate environment, the yield on interest-earning assets decreased 42 basis points to 5.13% for the three months ended March 31, 2009, from 5.55% for the three months ended March 31, 2008.

Based on management’s evaluation, provisions for loan losses of $1.4 million and $1.1 million were made during the three months ended March 31, 2009, and March 31, 2008, respectively. The $310,000, or 27.4%, increase in provisions for loan losses was primarily caused by the growth of our loan portfolio, as well as an increase in impaired loans. Compared to the three months ended March 31, 2008, our average loans have increased by $504.2 million, or 52.8%, with the growth being driven by residential and commercial real estate loans and warehouse lines of credit. In addition, net charge-offs have increased from $748,000 for the three months ended March 31, 2008, to $1.0 million for the three months ended March 31, 2009 due to increased commercial non-mortgage, one-to four-family and direct automobile charge-offs. Additionally, impaired loans have increased by $1.9 million, from $4.0 million at March 31, 2008, to $5.9 million at March 31, 2009, with specific reserves allocated to impaired l

Read the The complete ReportVPFG is in the portfolios of John Keeley of Keeley Fund Management.

Rating: 3.5/5 (2 votes)

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