ViewPoint Financial Group Reports Operating Results (10-Q)
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 $326.6 million; its shares were traded at around $13.1 with a P/E ratio of 262 and P/S ratio of 2.5. The dividend yield of Viewpoint Financial Group stocks is 1.5%. Highlight of Business Operations:General. Total assets increased by $136.4 million, or 6.2%, to $2.35 billion at September 30, 2009, from $2.21 billion at December 31, 2008. The rise in total assets was primarily due to a $69.4 million, or 4.9%, increase in gross loans (including loans held for sale) and an $81.8 million, or 47.4%, increase in securities held to maturity. This increase was partially offset by an $11.8 million, or 2.5%, reduction in securities available for sale.
Loans. Gross loans (including $350.1 million in mortgage loans held for sale) increased by $69.4 million, or 4.9%, from $1.41 billion at December 31, 2008 to $1.48 billion at September 30, 2009.
At September 30, 2009, mortgage loans held for sale consisted of $27.2 million of loans originated for sale by our mortgage banking subsidiary, VPBM, and $322.9 million of Purchase Program loans purchased for sale under our standard loan participation agreement. Our Purchase Program currently serves 20 clients and disbursed $1.42 billion in loans during the third quarter of 2009. The $190.2 million, or 119.0%, increase in mortgage loans held for sale over the last nine months was attributable to a $185.4 million increase in the volume of Purchase Program loans held under our standard loan participation agreement and VPBMs increased real estate production.
ViewPoint Bankers Mortgage. At September 30, 2009, VPBM had total assets of $35.9 million, which primarily consisted of $27.2 million in one- to four- family mortgage loans held for sale. VPBMs net income for the three and nine months ended September 30, 2009, was $42,000 and $982,000, respectively, which primarily consisted of gains on sales of mortgage loans. VPBM operates 15 loan production offices in Texas and has 130 employees.
Our non-performing loans to total loans ratio at September 30, 2009, was 1.30% compared to 0.38% at December 31, 2008. Non-performing loans increased by $9.9 million, from $4.7 million at December 31, 2008, to $14.6 million at September 30, 2009. The increase in non-performing loans was primarily due to three commercial real estate loans totaling $7.2 million that moved to non-performing during the nine months ended September 30, 2009. We have set aside a total of $955,000 in specific valuation allowances for these three loans. One loan, with an outstanding balance of $3.4 million, is secured by an office/flex building and is currently in the process of foreclosure. It is rated doubtful and has a specific valuation allowance in the amount of $799,000 based on a current appraisal. At September 30, 2009, this loan was 91 days delinquent. The second loan, with an outstanding balance of $2.9 million, is not delinquent and is secured by three office buildings. It is rated substandard and was placed on nonaccrual when it was classified as a troubled debt restructuring. Based on a current appraisal, there is no anticipated loss for this loan and no specific reserve required. The third is a $907,000 loan in which the Company is a participant that is collateralized by a hotel property experiencing financial difficulties. This loan is also a troubled debt restructuring. A $156,000 specific valuation allowance was set aside for this loan based on a current appraisal. At September 30, 2009, this loan was 61 days delinquent.
Our allowance for loan losses at September 30, 2009, was $11.0 million, or 0.97% of gross loans, compared to $9.1 million, or 0.73% of gross loans, at December 31, 2008. The $1.9 million, or 20.8%, increase in our allowance for loan losses was primarily due to an in
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