þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 6035 | 27-2176993 | ||
(State or other jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer Identification No.) | ||
incorporation or organization) | Classification Code Number) |
Large accelerated filer o
|
Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Class: Common Stock | Shares Outstanding as of October 27, 2011: 33,906,691 |
Page | ||||||||
Number | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
8 | ||||||||
36 | ||||||||
61 | ||||||||
64 | ||||||||
65 | ||||||||
65 | ||||||||
65 | ||||||||
65 | ||||||||
65 | ||||||||
65 | ||||||||
66 | ||||||||
68 | ||||||||
69 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
Page 2 of 69
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
ASSETS |
||||||||
Cash and due from financial institutions |
$ | 16,374 | $ | 16,465 | ||||
Short-term interest-bearing deposits in other financial institutions |
37,786 | 52,185 | ||||||
Total cash and cash equivalents |
54,160 | 68,650 | ||||||
Securities available for sale, at fair value |
655,925 | 717,497 | ||||||
Securities held to maturity (fair value: September 30, 2011 $557,586,
December 31, 2010 $434,296) |
539,257 | 432,519 | ||||||
Loans held for sale (includes $9,899 and $16,877 carried at fair value
at September 30, 2011 and December 31, 2010) |
691,204 | 491,985 | ||||||
Loans held for investment (net of allowance for loan losses of
$16,535 at September 30, 2011 and $14,847 at December 31, 2010) |
1,149,626 | 1,092,114 | ||||||
FHLB stock, at cost |
29,210 | 20,569 | ||||||
Bank-owned life insurance |
28,904 | 28,501 | ||||||
Foreclosed assets, net |
2,098 | 2,679 | ||||||
Premises and equipment, net |
48,595 | 48,731 | ||||||
Goodwill |
818 | 1,089 | ||||||
Accrued interest receivable |
8,159 | 9,248 | ||||||
Prepaid FDIC assessment |
5,325 | 6,606 | ||||||
Other assets |
21,997 | 21,807 | ||||||
Total assets |
$ | 3,235,278 | $ | 2,941,995 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Deposits |
||||||||
Non-interest-bearing demand |
$ | 207,940 | $ | 201,998 | ||||
Interest-bearing demand |
496,269 | 438,719 | ||||||
Savings and money market |
762,238 | 711,911 | ||||||
Time |
607,180 | 664,922 | ||||||
Total deposits |
2,073,627 | 2,017,550 | ||||||
FHLB advances (net of prepayment penalty of $4,481 at September 30, 2011
and $5,259 at December 31, 2010) |
671,761 | 461,219 | ||||||
Repurchase agreement |
25,000 | 25,000 | ||||||
Other borrowings |
10,000 | 10,000 | ||||||
Accrued interest payable |
1,506 | 1,541 | ||||||
Other liabilities |
46,698 | 30,096 | ||||||
Total liabilities |
2,828,592 | 2,545,406 | ||||||
Commitments and contingent liabilities |
| | ||||||
Shareholders equity |
||||||||
Common stock, $.01 par value; 90,000,000 shares authorized;
34,262,491 shares issued September 30, 2011 and
34,839,491 shares issued December 31, 2010 |
342 | 349 | ||||||
Additional paid-in capital |
284,974 | 289,591 | ||||||
Retained earnings |
136,454 | 125,125 | ||||||
Accumulated other comprehensive income, net |
4,665 | 2,373 | ||||||
Unearned Employee Stock Ownership Plan (ESOP) shares; 2,148,282 shares
at September 30, 2011 and 2,286,428 shares at December 31, 2010 |
(19,749 | ) | (20,849 | ) | ||||
Total shareholders equity |
406,686 | 396,589 | ||||||
Total liabilities and shareholders equity |
$ | 3,235,278 | $ | 2,941,995 | ||||
Page 3 of 69
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Interest and dividend income |
||||||||||||||||
Loans, including fees |
$ | 21,838 | $ | 22,953 | $ | 63,132 | $ | 64,921 | ||||||||
Taxable securities |
6,633 | 6,656 | 20,140 | 17,642 | ||||||||||||
Nontaxable securities |
473 | 410 | 1,419 | 1,073 | ||||||||||||
Interest-bearing deposits in other financial
institutions |
44 | 67 | 144 | 344 | ||||||||||||
FHLB stock |
18 | 15 | 52 | 47 | ||||||||||||
29,006 | 30,101 | 84,887 | 84,027 | |||||||||||||
Interest expense |
||||||||||||||||
Deposits |
5,702 | 8,316 | 18,045 | 23,834 | ||||||||||||
FHLB advances |
2,467 | 2,910 | 7,360 | 9,071 | ||||||||||||
Repurchase agreement |
206 | 205 | 611 | 610 | ||||||||||||
Other borrowings |
152 | 151 | 450 | 449 | ||||||||||||
8,527 | 11,582 | 26,466 | 33,964 | |||||||||||||
Net interest income |
20,479 | 18,519 | 58,421 | 50,063 | ||||||||||||
Provision for loan losses |
581 | 756 | 2,741 | 3,790 | ||||||||||||
Net interest income after provision for loan losses |
19,898 | 17,763 | 55,680 | 46,273 | ||||||||||||
Non-interest income |
||||||||||||||||
Service charges and fees |
4,659 | 4,694 | 14,027 | 13,838 | ||||||||||||
Other charges and fees |
144 | 171 | 544 | 509 | ||||||||||||
Net gain on sale of mortgage loans |
1,710 | 3,697 | 5,538 | 9,517 | ||||||||||||
Bank-owned life insurance income |
118 | 135 | 403 | 305 | ||||||||||||
Gain on sale of available for sale securities |
| | 3,415 | | ||||||||||||
Loss on sale and disposition of assets |
(533 | ) | (24 | ) | (749 | ) | (365 | ) | ||||||||
Impairment of goodwill |
| | (271 | ) | | |||||||||||
Other |
109 | 381 | 1,403 | 975 | ||||||||||||
6,207 | 9,054 | 24,310 | 24,779 | |||||||||||||
Non-interest expense |
||||||||||||||||
Salaries and employee benefits |
11,751 | 11,843 | 35,147 | 34,476 | ||||||||||||
Advertising |
351 | 280 | 1,217 | 878 | ||||||||||||
Occupancy and equipment |
1,511 | 1,520 | 4,333 | 4,467 | ||||||||||||
Outside professional services |
769 | 648 | 2,126 | 1,591 | ||||||||||||
Regulatory assessments |
409 | 819 | 1,866 | 2,409 | ||||||||||||
Data processing |
1,168 | 1,036 | 3,366 | 3,081 | ||||||||||||
Office operations |
1,521 | 1,458 | 4,452 | 4,337 | ||||||||||||
Other |
1,087 | 1,096 | 3,189 | 2,980 | ||||||||||||
18,567 | 18,700 | 55,696 | 54,219 | |||||||||||||
Income before income tax expense |
7,538 | 8,117 | 24,294 | 16,833 | ||||||||||||
Income tax expense |
2,395 | 2,709 | 7,740 | 5,524 | ||||||||||||
Net income |
$ | 5,143 | $ | 5,408 | $ | 16,554 | $ | 11,309 | ||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | 0.16 | $ | 0.17 | $ | 0.51 | $ | 0.38 | ||||||||
Diluted |
$ | 0.16 | $ | 0.17 | $ | 0.51 | $ | 0.38 | ||||||||
Page 4 of 69
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income |
$ | 5,143 | $ | 5,408 | $ | 16,554 | $ | 11,309 | ||||||||
Change in unrealized gains on securities available for sale |
2,982 | 1,469 | 6,977 | 3,325 | ||||||||||||
Reclassification of amount realized through sale of securities |
| | (3,415 | ) | | |||||||||||
Tax effect |
(1,063 | ) | (509 | ) | (1,270 | ) | (1,152 | ) | ||||||||
Other comprehensive income, net of tax |
1,919 | 960 | 2,292 | 2,173 | ||||||||||||
Comprehensive income |
$ | 7,062 | $ | 6,368 | $ | 18,846 | $ | 13,482 | ||||||||
Page 5 of 69
Accumulated | ||||||||||||||||||||||||||||
Additional | Other | Unearned | Total | |||||||||||||||||||||||||
Common | Paid-In | Retained | Comprehensive | ESOP | Treasury | Shareholders | ||||||||||||||||||||||
Stock | Capital | Earnings | Income (Loss) | Shares | Stock | Equity | ||||||||||||||||||||||
For the Nine Months ended September 30, 2010 |
||||||||||||||||||||||||||||
Balance at January 1, 2010 |
$ | 305 | $ | 118,254 | $ | 111,188 | $ | 3,802 | $ | (6,159 | ) | $ | (21,708 | ) | $ | 205,682 | ||||||||||||
ESOP shares earned, 111,343 shares |
| 321 | | | 832 | | 1,153 | |||||||||||||||||||||
Share-based compensation expense |
| 1,367 | | | | | 1,367 | |||||||||||||||||||||
Restricted stock forfeiture |
| 334 | | | | (334 | ) | | ||||||||||||||||||||
Treasury stock purchased at cost, 25,634 shares |
| | | | | (407 | ) | (407 | ) | |||||||||||||||||||
Dividends declared ($0.12 per share) |
| | (2,468 | ) | | | | (2,468 | ) | |||||||||||||||||||
Items relating to Conversion and stock offering: |
||||||||||||||||||||||||||||
Merger of ViewPoint MHC pursuant to
reorganization |
| 207 | | | | | 207 | |||||||||||||||||||||
Treasury stock retired pursuant to
reorganization (1,305,435 shares) |
(13 | ) | (22,102 | ) | | | | 22,115 | | |||||||||||||||||||
Cancellation of ViewPoint MHC shares
(14,183,812 shares) |
(142 | ) | 142 | | | | | | ||||||||||||||||||||
Proceeds from stock offering (19,857,337
shares), net of expense of $7,773 |
199 | 190,602 | | | | | 190,801 | |||||||||||||||||||||
Purchase of shares by ESOP pursuant to
reorganization (1,588,587 shares) |
| | | | (15,886 | ) | | (15,886 | ) | |||||||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||||||
Net income |
| | 11,309 | | | | 11,309 | |||||||||||||||||||||
Change in unrealized gains (losses) on securities
available for sale, net of reclassifications and taxes |
| | | 2,173 | | | 2,173 | |||||||||||||||||||||
Total comprehensive income |
13,482 | |||||||||||||||||||||||||||
Balance at September 30, 2010 |
$ | 349 | $ | 289,125 | $ | 120,029 | $ | 5,975 | $ | (21,213 | ) | $ | (334 | ) | $ | 393,931 | ||||||||||||
For the Nine Months ended September 30, 2011 |
||||||||||||||||||||||||||||
Balance at January 1, 2011 |
$ | 349 | $ | 289,591 | $ | 125,125 | $ | 2,373 | $ | (20,849 | ) | $ | | $ | 396,589 | |||||||||||||
ESOP shares earned, 138,146 shares |
| 652 | | | 1,100 | | 1,752 | |||||||||||||||||||||
Share-based compensation expense |
| 1,399 | | | | | 1,399 | |||||||||||||||||||||
Dividends declared ($0.15 per share) |
| | (5,225 | ) | | | | (5,225 | ) | |||||||||||||||||||
Share repurchase, 577,000 shares |
(7 | ) | (6,668 | ) | (6,675 | ) | ||||||||||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||||||
Net income |
| | 16,554 | | | | 16,554 | |||||||||||||||||||||
Change in unrealized gains (losses) on securities
available for sale, net of reclassifications and taxes |
| | | 2,292 | | | 2,292 | |||||||||||||||||||||
Total comprehensive income |
18,846 | |||||||||||||||||||||||||||
Balance at September 30, 2011 |
$ | 342 | $ | 284,974 | $ | 136,454 | $ | 4,665 | $ | (19,749 | ) | $ | | $ | 406,686 | |||||||||||||
Page 6 of 69
Nine Months Ended | ||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
Operating activities |
||||||||
Net income |
$ | 16,554 | $ | 11,309 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||
Provision for loan losses |
2,741 | 3,790 | ||||||
Depreciation and amortization |
2,625 | 2,689 | ||||||
Deferred tax expense (benefit) |
(189 | ) | (712 | ) | ||||
Premium amortization and accretion of securities, net |
3,406 | 2,761 | ||||||
Gain on sale of available for sale securities |
(3,415 | ) | | |||||
ESOP compensation expense |
1,752 | 1,153 | ||||||
Share-based compensation expense |
1,399 | 1,367 | ||||||
Net gain on loans held for sale |
(5,538 | ) | (9,517 | ) | ||||
Loans originated or purchased for sale |
(5,471,076 | ) | (5,455,990 | ) | ||||
Proceeds from sale of loans held for sale |
5,277,395 | 5,217,496 | ||||||
FHLB stock dividends |
(52 | ) | (47 | ) | ||||
Bank owned life insurance (BOLI) income |
(403 | ) | (305 | ) | ||||
Loss on sale and disposition of assets |
609 | 553 | ||||||
Impairment of goodwill |
271 | | ||||||
Net change in deferred loan fees |
(623 | ) | (556 | ) | ||||
Net change in accrued interest receivable |
1,089 | (1,334 | ) | |||||
Net change in other assets |
1,957 | 1,084 | ||||||
Net change in other liabilities |
15,297 | 23,227 | ||||||
Net cash provided by (used in) operating activities |
(156,201 | ) | (203,032 | ) | ||||
Investing activities |
||||||||
Available-for-sale securities: |
||||||||
Maturities, prepayments and calls |
103,124 | 171,251 | ||||||
Purchases |
(129,232 | ) | (475,665 | ) | ||||
Proceeds from sale of securities |
93,008 | | ||||||
Held-to-maturity securities: |
||||||||
Maturities, prepayments and calls |
75,642 | 46,030 | ||||||
Purchases |
(184,137 | ) | (60,472 | ) | ||||
Net change in loans held for investment |
(60,707 | ) | 992 | |||||
Redemption (purchase) of FHLB stock, net |
(8,589 | ) | (6,755 | ) | ||||
Purchases of premises and equipment |
(2,623 | ) | (1,359 | ) | ||||
Proceeds from sale of assets |
506 | 3,516 | ||||||
Net cash (used in) investing activities |
(113,008 | ) | (322,462 | ) | ||||
Financing activities |
||||||||
Net change in deposits |
56,077 | 232,292 | ||||||
Proceeds from FHLB advances |
422,000 | 200,000 | ||||||
Repayments on FHLB advances |
(211,458 | ) | (36,860 | ) | ||||
Share repurchase |
(6,675 | ) | | |||||
Net proceeds from stock offering |
| 190,801 | ||||||
Merger of ViewPoint MHC pursuant to reorganization |
| 207 | ||||||
Purchase of shares by ESOP pursuant to reorganization |
| (15,886 | ) | |||||
Payment of dividends |
(5,225 | ) | (2,468 | ) | ||||
Treasury stock purchased |
| (407 | ) | |||||
Net cash provided by financing activities |
254,719 | 567,679 | ||||||
Net change in cash and cash equivalents |
(14,490 | ) | 42,185 | |||||
Beginning cash and cash equivalents |
68,650 | 55,470 | ||||||
Ending cash and cash equivalents |
$ | 54,160 | $ | 97,655 | ||||
Supplemental cash flow information: |
||||||||
Interest paid |
$ | 26,501 | $ | 33,862 | ||||
Income taxes paid |
$ | 8,480 | $ | 4,310 | ||||
Supplemental noncash disclosures: |
||||||||
Transfers from loans to other real estate owned |
$ | 1,077 | $ | 3,417 |
Page 7 of 69
Page 8 of 69
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Basic earnings per share: |
||||||||||||||||
Numerator: |
||||||||||||||||
Net income |
$ | 5,143 | $ | 5,408 | $ | 16,554 | $ | 11,309 | ||||||||
Distributed and undistributed earnings to
participating securities |
(17 | ) | (39 | ) | (83 | ) | (115 | ) | ||||||||
Income available to common shareholders |
$ | 5,126 | $ | 5,369 | $ | 16,471 | $ | 11,194 | ||||||||
Denominator: |
||||||||||||||||
Weighted average common shares outstanding |
34,757,882 | 34,555,356 | 34,811,989 | 31,012,378 | ||||||||||||
Less: Average unallocated ESOP shares |
(2,178,647 | ) | (2,275,964 | ) | (2,224,243 | ) | (1,315,369 | ) | ||||||||
Average unvested restricted stock awards |
(110,595 | ) | (234,074 | ) | (164,825 | ) | (301,227 | ) | ||||||||
Average shares for basic earnings per share |
32,468,640 | 32,045,318 | 32,422,921 | 29,395,782 | ||||||||||||
Basic earnings per common share |
$ | 0.16 | $ | 0.17 | $ | 0.51 | $ | 0.38 | ||||||||
Diluted earnings per share: |
||||||||||||||||
Numerator: |
||||||||||||||||
Income available to common shareholders |
$ | 5,126 | $ | 5,369 | $ | 16,471 | $ | 11,194 | ||||||||
Denominator: |
||||||||||||||||
Average shares for basic earnings per share |
32,468,640 | 32,045,318 | 32,422,921 | 29,395,782 | ||||||||||||
Dilutive effect of share-based compensation plan |
28,643 | | 56,171 | 9,740 | ||||||||||||
Average shares for diluted earnings per share |
32,497,283 | 32,045,318 | 32,479,092 | 29,405,522 | ||||||||||||
Diluted earnings per common share |
$ | 0.16 | $ | 0.17 | $ | 0.51 | $ | 0.38 | ||||||||
Page 9 of 69
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||
September 30, 2011 | Cost | Gains | Losses | Fair Value | ||||||||||||
Agency residential mortgage-backed securities |
$ | 251,665 | $ | 3,496 | $ | (232 | ) | $ | 254,929 | |||||||
Agency residential collateralized mortgage
obligations |
392,617 | 4,223 | (298 | ) | 396,542 | |||||||||||
SBA pools |
4,393 | 61 | | 4,454 | ||||||||||||
Total available for sale securities |
$ | 648,675 | $ | 7,780 | $ | (530 | ) | $ | 655,925 | |||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||
December 31, 2010 | Cost | Gains | Losses | Fair Value | ||||||||||||
Agency residential mortgage-backed securities |
$ | 351,385 | $ | 4,545 | $ | (1,433 | ) | $ | 354,497 | |||||||
Agency residential collateralized mortgage
obligations |
357,340 | 3,031 | (2,479 | ) | 357,892 | |||||||||||
SBA pools |
5,084 | 24 | | 5,108 | ||||||||||||
Total available for sale securities |
$ | 713,809 | $ | 7,600 | $ | (3,912 | ) | $ | 717,497 | |||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||
September 30, 2011 | Cost | Gains | Losses | Fair Value | ||||||||||||
Agency residential mortgage-backed securities |
189,892 | 8,533 | (24 | ) | $ | 198,401 | ||||||||||
Agency commercial mortgage-backed securities |
9,437 | 644 | | 10,081 | ||||||||||||
Agency residential collateralized mortgage obligations |
289,452 | 5,415 | (171 | ) | 294,696 | |||||||||||
Municipal bonds |
50,476 | 3,932 | | 54,408 | ||||||||||||
Total held to maturity securities |
$ | 539,257 | $ | 18,524 | $ | (195 | ) | $ | 557,586 | |||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||
December 31, 2010 | Cost | Gains | Losses | Fair Value | ||||||||||||
U.S. government and federal agency |
$ | 9,997 | $ | 168 | $ | | $ | 10,165 | ||||||||
Agency residential mortgage-backed securities |
162,841 | 5,305 | (380 | ) | 167,766 | |||||||||||
Agency residential collateralized mortgage obligations |
209,193 | 1,951 | (4,864 | ) | 206,280 | |||||||||||
Municipal bonds |
50,488 | 578 | (981 | ) | 50,085 | |||||||||||
Total held to maturity securities |
$ | 432,519 | $ | 8,002 | $ | (6,225 | ) | $ | 434,296 | |||||||
Page 10 of 69
Available | ||||||||||||
Held to maturity | for sale | |||||||||||
Carrying | ||||||||||||
Amount | Fair Value | Fair Value | ||||||||||
Due from one to five years |
$ | 3,663 | $ | 3,951 | $ | | ||||||
Due from five to ten years |
11,215 | 12,198 | 4,454 | |||||||||
Due after ten years |
35,598 | 38,259 | | |||||||||
Agency residential mortgage-backed securities |
189,892 | 198,401 | 254,929 | |||||||||
Agency commercial mortgage-backed securities |
9,437 | 10,081 | | |||||||||
Agency residential collateralized mortgage obligations |
289,452 | 294,696 | 396,542 | |||||||||
Total |
$ | 539,257 | $ | 557,586 | $ | 655,925 | ||||||
Page 11 of 69
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||
September 30, 2011 | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | |||||||||||||||||||||||||||
Agency residential mortgage-backed securities |
$ | 37,890 | $ | (160 | ) | 6 | $ | 8,758 | $ | (72 | ) | 2 | $ | 46,648 | $ | (232 | ) | 8 | ||||||||||||||||||
Agency residential collateralized mortgage obligations |
16,948 | (93 | ) | 3 | 32,917 | (205 | ) | 12 | 49,865 | (298 | ) | 15 | ||||||||||||||||||||||||
Total temporarily impaired |
$ | 54,838 | $ | (253 | ) | 9 | $ | 41,675 | $ | (277 | ) | 14 | $ | 96,513 | $ | (530 | ) | 23 | ||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||
September 30, 2011 | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | |||||||||||||||||||||||||||
Agency residential mortgage-backed securities |
$ | 6,360 | $ | (24 | ) | 1 | $ | | $ | | | $ | 6,360 | $ | (24 | ) | 1 | |||||||||||||||||||
Agency residential collateralized mortgage obligations |
20,385 | (171 | ) | 3 | | | | 20,385 | (171 | ) | 3 | |||||||||||||||||||||||||
Total temporarily impaired |
$ | 26,745 | $ | (195 | ) | 4 | $ | | $ | | | $ | 26,745 | $ | (195 | ) | 4 | |||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||
December 31, 2010 | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | |||||||||||||||||||||||||||
Agency residential mortgage-backed securities |
$ | 161,854 | $ | (1,433 | ) | 32 | $ | | $ | | | $ | 161,854 | $ | (1,433 | ) | 32 | |||||||||||||||||||
Agency residential collateralized mortgage obligations |
125,819 | (2,372 | ) | 18 | 32,358 | (107 | ) | 11 | 158,177 | (2,479 | ) | 29 | ||||||||||||||||||||||||
Total temporarily impaired |
$ | 287,673 | $ | (3,805 | ) | 50 | $ | 32,358 | $ | (107 | ) | 11 | $ | 320,031 | $ | (3,912 | ) | 61 | ||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||
December 31, 2010 | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | |||||||||||||||||||||||||||
Agency residential mortgage-backed securities |
$ | 28,394 | $ | (380 | ) | 4 | $ | | $ | | | $ | 28,394 | $ | (380 | ) | 4 | |||||||||||||||||||
Agency residential collateralized mortgage obligations |
137,099 | (4,864 | ) | 15 | | | | 137,099 | (4,864 | ) | 15 | |||||||||||||||||||||||||
Municipal bonds |
30,316 | (981 | ) | 72 | | | | 30,316 | (981 | ) | 72 | |||||||||||||||||||||||||
Total temporarily impaired |
$ | 195,809 | $ | (6,225 | ) | 91 | $ | | $ | | | $ | 195,809 | $ | (6,225 | ) | 91 | |||||||||||||||||||
Page 12 of 69
Page 13 of 69
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
Real estate loans: |
||||||||
One- to four-family |
$ | 372,949 | $ | 370,149 | ||||
Commercial |
531,729 | 479,071 | ||||||
One- to four-family construction |
9,870 | 11,435 | ||||||
Commercial construction |
15,185 | 569 | ||||||
Home equity/home improvement |
140,945 | 139,165 | ||||||
Total real estate loans |
1,070,678 | 1,000,389 | ||||||
Consumer loans: |
||||||||
Automobile loans |
32,525 | 42,550 | ||||||
Government-guaranteed student loans |
| 4,557 | ||||||
Consumer lines of credit and unsecured loans |
11,918 | 14,197 | ||||||
Other consumer loans, secured |
6,476 | 6,062 | ||||||
Total consumer loans |
50,919 | 67,366 | ||||||
Commercial and industrial loans |
44,014 | 39,279 | ||||||
Gross loans |
1,165,611 | 1,107,034 | ||||||
Deferred loan origination fees/costs, net |
550 | (73 | ) | |||||
Allowance for loan losses |
(16,535 | ) | (14,847 | ) | ||||
Net loans held for investment |
$ | 1,149,626 | $ | 1,092,114 | ||||
Mortgage loans held for sale: |
||||||||
ViewPoint Mortgage |
$ | 27,410 | $ | 31,073 | ||||
Warehouse Purchase Program |
663,794 | 460,912 | ||||||
Total mortgage loans held for sale |
$ | 691,204 | $ | 491,985 | ||||
Page 14 of 69
Home | ||||||||||||||||||||||||
One- to Four- | Equity/Home | Commercial | Commercial and | |||||||||||||||||||||
Quarter to date September 30, 2011 | Family | Improvement | Real Estate | Industrial | Consumer | Total | ||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||
Beginning balance July 1, 2011 |
$ | 3,023 | $ | 873 | $ | 9,559 | $ | 1,897 | $ | 807 | $ | 16,159 | ||||||||||||
Charge-offs |
| (23 | ) | | (128 | ) | (163 | ) | (314 | ) | ||||||||||||||
Recoveries |
4 | 14 | 2 | 3 | 86 | 109 | ||||||||||||||||||
Provision expense (benefit) |
(51 | ) | 180 | 320 | 109 | 23 | 581 | |||||||||||||||||
Ending balance September 30, 2011 |
$ | 2,976 | $ | 1,044 | $ | 9,881 | $ | 1,881 | $ | 753 | $ | 16,535 | ||||||||||||
Home | ||||||||||||||||||||||||
One- to Four- | Equity/Home | Commercial | Commercial and | |||||||||||||||||||||
Year to date September 30, 2011 | Family | Improvement | Real Estate | Industrial | Consumer | Total | ||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||
Beginning balance January 1, 2011 |
$ | 3,307 | $ | 936 | $ | 7,949 | $ | 1,652 | $ | 1,003 | $ | 14,847 | ||||||||||||
Charge-offs |
(74 | ) | (161 | ) | (15 | ) | (470 | ) | (694 | ) | (1,414 | ) | ||||||||||||
Recoveries |
27 | 14 | 29 | 20 | 271 | 361 | ||||||||||||||||||
Provision expense (benefit) |
(284 | ) | 255 | 1,918 | 679 | 173 | 2,741 | |||||||||||||||||
Ending balance September 30, 2011 |
$ | 2,976 | $ | 1,044 | $ | 9,881 | $ | 1,881 | $ | 753 | $ | 16,535 | ||||||||||||
Ending balance: individually evaluated for impairment |
$ | 755 | $ | 304 | $ | 1,731 | $ | 25 | $ | 3 | $ | 2,818 | ||||||||||||
Ending balance: collectively evaluated for impairment |
2,221 | 740 | 8,150 | 1,856 | 750 | 13,717 | ||||||||||||||||||
Loans: |
||||||||||||||||||||||||
Ending balance |
$ | 382,819 | $ | 140,945 | $ | 546,914 | $ | 44,014 | $ | 50,919 | $ | 1,165,611 | ||||||||||||
Ending balance: individually evaluated for impairment |
5,176 | 1,330 | 13,629 | 445 | 47 | 20,627 | ||||||||||||||||||
Ending balance: collectively evaluated for impairment |
377,643 | 139,615 | 533,285 | 43,569 | 50,872 | 1,144,984 |
Page 15 of 69
Home | ||||||||||||||||||||||||
One- to Four- | Equity/Home | Commercial | Commercial and | |||||||||||||||||||||
Quarter to date September 30, 2010 | Family | Improvement | Real Estate | Industrial | Consumer | Total | ||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||
Beginning balance July 1, 2010 |
$ | 2,440 | $ | 802 | $ | 8,357 | $ | 1,614 | $ | 1,102 | $ | 14,315 | ||||||||||||
Charge-offs |
(14 | ) | (94 | ) | | (142 | ) | (313 | ) | (563 | ) | |||||||||||||
Recoveries |
3 | 2 | | 25 | 53 | 83 | ||||||||||||||||||
Provision expense |
175 | 89 | 62 | 196 | 234 | 756 | ||||||||||||||||||
Ending balance September 30, 2010 |
$ | 2,604 | $ | 799 | $ | 8,419 | $ | 1,693 | $ | 1,076 | $ | 14,591 | ||||||||||||
Home | ||||||||||||||||||||||||
One- to Four- | Equity/Home | Commercial | Commercial and | |||||||||||||||||||||
Year to date September 30, 2010 | Family | Improvement | Real Estate | Industrial | Consumer | Total | ||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||
Beginning balance January 1, 2010 |
$ | 2,379 | $ | 730 | $ | 6,457 | $ | 1,382 | $ | 1,362 | $ | 12,310 | ||||||||||||
Charge-offs |
(174 | ) | (122 | ) | | (455 | ) | (1,058 | ) | (1,809 | ) | |||||||||||||
Recoveries |
11 | 4 | | 26 | 259 | 300 | ||||||||||||||||||
Provision expense |
388 | 187 | 1,962 | 740 | 513 | 3,790 | ||||||||||||||||||
Ending balance September 30, 2010 |
$ | 2,604 | $ | 799 | $ | 8,419 | $ | 1,693 | $ | 1,076 | $ | 14,591 | ||||||||||||
Ending balance: individually evaluated for impairment |
$ | 491 | $ | 57 | $ | 1,060 | $ | 158 | $ | 18 | $ | 1,784 | ||||||||||||
Ending balance: collectively evaluated for impairment |
2,113 | 742 | 7,359 | 1,535 | 1,058 | 12,807 | ||||||||||||||||||
Loans: |
||||||||||||||||||||||||
Ending balance |
$ | 380,914 | $ | 138,444 | $ | 486,927 | $ | 36,492 | $ | 72,934 | $ | 1,115,711 | ||||||||||||
Ending balance: individually evaluated for impairment |
5,569 | 567 | 10,674 | 452 | 359 | 17,621 | ||||||||||||||||||
Ending balance: collectively evaluated for impairment |
375,345 | 137,877 | 476,253 | 36,040 | 72,575 | 1,098,090 |
Page 16 of 69
Page 17 of 69
September 30, 2011 | |||||||||||||||||||||||||||||
Current | Current | ||||||||||||||||||||||||||||
Quarter | Year-to-Date | Quarter | Year-to-Date | ||||||||||||||||||||||||||
Unpaid | Average | Average | Interest | Interest | |||||||||||||||||||||||||
Recorded | Principal | Related | Recorded | Recorded | Income | Income | |||||||||||||||||||||||
Investment | Balance | Allowance | Investment | Investment | Recognized | Recognized | |||||||||||||||||||||||
With no related allowance recorded : |
|||||||||||||||||||||||||||||
Real estate loans: |
|||||||||||||||||||||||||||||
One- to four- family |
$ | 1,795 | $ | 1,795 | $ | | $ | 1,880 | $ | 1,867 | $ | 21 | $ | 50 | |||||||||||||||
Home equity/home improvement |
859 | 859 | | 1,085 | 974 | 5 | 19 | ||||||||||||||||||||||
Commercial |
2,860 | 2,860 | | 1,052 | 865 | 15 | 41 | ||||||||||||||||||||||
Total real estate loans |
5,514 | 5,514 | | 4,017 | 3,706 | 41 | 110 | ||||||||||||||||||||||
Impaired loans with no related
allowance recorded |
5,514 | 5,514 | | 4,017 | 3,706 | 41 | 110 | ||||||||||||||||||||||
With an allowance recorded : |
|||||||||||||||||||||||||||||
Real estate loans: |
|||||||||||||||||||||||||||||
One- to four- family |
3,381 | 3,381 | 755 | 3,697 | 3,215 | 19 | 43 | ||||||||||||||||||||||
Home equity/home improvement |
471 | 471 | 304 | 295 | 291 | | 2 | ||||||||||||||||||||||
Commercial |
10,769 | 10,769 | 1,731 | 10,775 | 10,401 | 111 | 327 | ||||||||||||||||||||||
Total real estate loans |
14,621 | 14,621 | 2,790 | 14,767 | 13,907 | 130 | 372 | ||||||||||||||||||||||
Consumer loans: |
|||||||||||||||||||||||||||||
Automobile |
44 | 44 | 2 | 137 | 154 | | | ||||||||||||||||||||||
Other secured |
3 | 3 | 1 | 4 | 9 | | | ||||||||||||||||||||||
Lines of credit/unsecured |
| | | 8 | 36 | | | ||||||||||||||||||||||
Total consumer loans |
47 | 47 | 3 | 149 | 199 | | | ||||||||||||||||||||||
Commercial and industrial |
445 | 445 | 25 | 421 | 371 | 4 | 9 | ||||||||||||||||||||||
Impaired loans with allowance recorded |
15,113 | 15,113 | 2,818 | 15,337 | 14,477 | 134 | 381 | ||||||||||||||||||||||
Total: |
|||||||||||||||||||||||||||||
Residential real estate |
6,506 | 6,506 | 1,059 | 6,957 | 6,347 | 45 | 114 | ||||||||||||||||||||||
Commercial real estate |
13,629 | 13,629 | 1,731 | 11,827 | 11,266 | 126 | 368 | ||||||||||||||||||||||
Consumer |
47 | 47 | 3 | 149 | 199 | | | ||||||||||||||||||||||
Commercial and industrial |
445 | 445 | 25 | 421 | 371 | 4 | 9 | ||||||||||||||||||||||
$ | 20,627 | $ | 20,627 | $ | 2,818 | $ | 19,354 | $ | 18,183 | $ | 175 | $ | 491 | ||||||||||||||||
Page 18 of 69
December 31, 2010 | ||||||||||||||||||||
Unpaid | Average | Interest | ||||||||||||||||||
Recorded | Principal | Related | Recorded | Income | ||||||||||||||||
Investment | Balance | Allowance | Investment | Recognized | ||||||||||||||||
With no related allowance recorded : |
||||||||||||||||||||
Real estate loans: |
||||||||||||||||||||
One- to four- family |
$ | 3,188 | $ | 3,188 | $ | | $ | 3,651 | $ | 107 | ||||||||||
Home equity/home improvement |
455 | 455 | | 366 | 16 | |||||||||||||||
Commercial |
1,635 | 1,635 | | 2,710 | 203 | |||||||||||||||
Total real estate loans |
5,278 | 5,278 | | 6,727 | 326 | |||||||||||||||
Commercial and industrial |
| | | 54 | 8 | |||||||||||||||
Impaired loans with no related allowance recorded |
5,278 | 5,278 | | 6,781 | 334 | |||||||||||||||
With an allowance recorded : |
||||||||||||||||||||
Real estate loans: |
||||||||||||||||||||
One- to four- family |
2,893 | 2,893 | 474 | 1,631 | 59 | |||||||||||||||
Home equity/home improvement |
851 | 851 | 95 | 381 | 2 | |||||||||||||||
Commercial |
9,295 | 9,295 | 1,407 | 6,432 | 134 | |||||||||||||||
Total real estate loans |
13,039 | 13,039 | 1,976 | 8,444 | 195 | |||||||||||||||
Consumer loans: |
||||||||||||||||||||
Automobile |
205 | 205 | 16 | 286 | | |||||||||||||||
Other secured |
13 | 13 | 2 | 8 | | |||||||||||||||
Lines of credit/unsecured |
108 | 108 | 5 | 120 | | |||||||||||||||
Total consumer loans |
326 | 326 | 23 | 414 | | |||||||||||||||
Commercial and industrial |
272 | 272 | 8 | 299 | 6 | |||||||||||||||
Impaired loans with allowance recorded |
13,637 | 13,637 | 2,007 | 9,157 | 201 | |||||||||||||||
Total: |
||||||||||||||||||||
Residential real estate |
7,387 | 7,387 | 569 | 6,029 | 184 | |||||||||||||||
Commercial real estate |
10,930 | 10,930 | 1,407 | 9,142 | 337 | |||||||||||||||
Consumer |
326 | 326 | 23 | 414 | | |||||||||||||||
Commercial and industrial |
272 | 272 | 8 | 353 | 14 | |||||||||||||||
$ | 18,915 | $ | 18,915 | $ | 2,007 | $ | 15,938 | $ | 535 | |||||||||||
Page 19 of 69
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
Real estate loans: |
||||||||
One- to four- family |
$ | 4,896 | $ | 5,938 | ||||
Commercial |
10,768 | 9,812 | ||||||
Home equity/home improvement |
1,330 | 1,306 | ||||||
Total real estate loans |
16,994 | 17,056 | ||||||
Consumer loans: |
||||||||
Automobile |
| 179 | ||||||
Consumer other secured |
| 13 | ||||||
Consumer lines of credit/unsecured |
| 108 | ||||||
Total consumer loans |
| 300 | ||||||
Commercial and industrial |
445 | 272 | ||||||
Total |
$ | 17,439 | $ | 17,628 | ||||
Page 20 of 69
Three Months Ended September 30, 2011 | Nine Months Ended September 30, 2011 | |||||||||||||||||||||||
Pre- | Post- | Pre- | Post- | |||||||||||||||||||||
Modification | Modification | Modification | Modification | |||||||||||||||||||||
Outstanding | Outstanding | Outstanding | Outstanding | |||||||||||||||||||||
Number of | Recorded | Recorded | Number of | Recorded | Recorded | |||||||||||||||||||
Contracts | Investment | Investment | Contracts | Investment | Investment | |||||||||||||||||||
Real estate loans: |
||||||||||||||||||||||||
One- to four- family |
2 | $ | 269 | $ | 273 | 3 | $ | 333 | $ | 339 | ||||||||||||||
Consumer loans: |
||||||||||||||||||||||||
Automobile |
| | | 2 | 7 | 9 | ||||||||||||||||||
Total |
2 | $ | 269 | $ | 273 | 5 | $ | 340 | $ | 348 | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, 2011 | September 30, 2011 | |||||||
Extended maturity automobile |
$ | | $ | 6 | ||||
Combination of rate and
principal adjustment one- to
four- family real estate |
273 | 339 | ||||||
Other automobile |
| 3 | ||||||
Total |
$ | 273 | $ | 348 | ||||
Page 21 of 69
90 Days | Total | |||||||||||||||||||||||
30-59 Days | 60-89 Days | and Greater | Loans Past | |||||||||||||||||||||
September 30, 2011 | Past Due | Past Due | Past Due | Due | Current Loans | Total Loans | ||||||||||||||||||
Real estate loans: |
||||||||||||||||||||||||
One- to four- family |
$ | 7 | $ | 2,364 | $ | 3,269 | $ | 5,640 | $ | 377,179 | $ | 382,819 | ||||||||||||
Commercial |
| | 899 | 899 | 546,015 | 546,914 | ||||||||||||||||||
Home equity/home improvement |
9 | 132 | 1,167 | 1,308 | 139,637 | 140,945 | ||||||||||||||||||
Total real estate loans |
16 | 2,496 | 5,335 | 7,847 | 1,062,831 | 1,070,678 | ||||||||||||||||||
Consumer loans: |
||||||||||||||||||||||||
Consumer loans: |
||||||||||||||||||||||||
Automobile |
112 | | | 112 | 32,413 | 32,525 | ||||||||||||||||||
Other secured |
3 | 29 | | 32 | 6,444 | 6,476 | ||||||||||||||||||
Lines of credit/unsecured |
50 | 14 | | 64 | 11,854 | 11,918 | ||||||||||||||||||
Total consumer loans |
165 | 43 | | 208 | 50,711 | 50,919 | ||||||||||||||||||
Commercial and industrial |
34 | 230 | | 264 | 43,750 | 44,014 | ||||||||||||||||||
Total |
$ | 215 | $ | 2,769 | $ | 5,335 | $ | 8,319 | $ | 1,157,292 | $ | 1,165,611 | ||||||||||||
90 Days | Total | |||||||||||||||||||||||
30-59 Days | 60-89 Days | and Greater | Loans Past | |||||||||||||||||||||
December 31, 2010 | Past Due | Past Due | Past Due | Due | Current Loans | Total Loans | ||||||||||||||||||
Real estate loans: |
||||||||||||||||||||||||
One- to four- family |
$ | 3,248 | $ | 3,068 | $ | 3,952 | $ | 10,268 | $ | 371,316 | $ | 381,584 | ||||||||||||
Commercial |
2,869 | | 1,645 | 4,514 | 475,126 | 479,640 | ||||||||||||||||||
Home equity/home improvement |
1,009 | 175 | 1,047 | 2,231 | 136,934 | 139,165 | ||||||||||||||||||
Total real estate loans |
7,126 | 3,243 | 6,644 | 17,013 | 983,376 | 1,000,389 | ||||||||||||||||||
Consumer loans: |
||||||||||||||||||||||||
Consumer loans: |
||||||||||||||||||||||||
Automobile |
249 | 18 | 142 | 409 | 42,141 | 42,550 | ||||||||||||||||||
Other secured |
32 | | 2 | 34 | 10,585 | 10,619 | ||||||||||||||||||
Lines of credit/unsecured |
84 | 47 | 108 | 239 | 13,958 | 14,197 | ||||||||||||||||||
Total consumer loans |
365 | 65 | 252 | 682 | 66,684 | 67,366 | ||||||||||||||||||
Commercial and industrial |
174 | | 52 | 226 | 39,053 | 39,279 | ||||||||||||||||||
Total |
$ | 7,665 | $ | 3,308 | $ | 6,948 | $ | 17,921 | $ | 1,089,113 | $ | 1,107,034 | ||||||||||||
Page 22 of 69
One- to Four- | Commercial Real | Commercial and | Home Equity/Home | |||||||||||||
September 30, 2011 | Family | Estate | Industrial | Improvement | ||||||||||||
Grade: |
||||||||||||||||
Pass |
$ | 374,440 | $ | 513,241 | $ | 43,519 | $ | 138,074 | ||||||||
Special Mention |
1,482 | 21,980 | 50 | 142 | ||||||||||||
Substandard |
3,693 | 10,794 | 215 | 1,628 | ||||||||||||
Doubtful |
3,204 | 899 | 230 | 1,101 | ||||||||||||
Total |
$ | 382,819 | $ | 546,914 | $ | 44,014 | $ | 140,945 | ||||||||
One- to Four- | Commercial Real | Commercial and | Home Equity/Home | |||||||||||||
December 31, 2010 | Family | Estate | Industrial | Improvement | ||||||||||||
Grade: |
||||||||||||||||
Pass |
$ | 374,790 | $ | 466,230 | $ | 38,768 | $ | 137,796 | ||||||||
Special Mention |
713 | 2,479 | 239 | 63 | ||||||||||||
Substandard |
3,663 | 10,185 | 220 | 337 | ||||||||||||
Doubtful |
2,418 | 746 | 52 | 969 | ||||||||||||
Total |
$ | 381,584 | $ | 479,640 | $ | 39,279 | $ | 139,165 | ||||||||
Lines of | ||||||||||||
September 30, 2011 | Automobile | Other Secured | Credit/Unsecured | |||||||||
Performing |
$ | 32,525 | $ | 6,476 | $ | 11,918 | ||||||
Non-performing |
| | | |||||||||
Total |
$ | 32,525 | $ | 6,476 | $ | 11,918 | ||||||
Lines of | ||||||||||||
December 31, 2010 | Automobile | Other Secured | Credit/Unsecured | |||||||||
Performing |
$ | 42,371 | $ | 10,606 | $ | 14,089 | ||||||
Non-performing |
179 | 13 | 108 | |||||||||
Total |
$ | 42,550 | $ | 10,619 | $ | 14,197 | ||||||
Page 23 of 69
Page 24 of 69
Fair Value Measurements at September 30, 2011, Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
September 30, | Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||||
2011 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: |
||||||||||||||||
Agency residential mortgage-backed securities |
$ | 254,929 | $ | | $ | 254,929 | $ | | ||||||||
Agency residential collateralized mortgage
obligations |
396,542 | | 396,542 | | ||||||||||||
SBA pools |
4,454 | | 4,454 | | ||||||||||||
Total securities available for sale |
$ | 655,925 | $ | | $ | 655,925 | $ | | ||||||||
Loans held for sale |
$ | 9,899 | $ | | $ | 9,899 | $ | | ||||||||
Derivative instruments |
$ | (49 | ) | $ | | $ | (49 | ) | $ | |
Fair Value Measurements at December 31, 2010, Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
December 31, | Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||||
2010 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: |
||||||||||||||||
Agency residential mortgage-backed securities |
$ | 354,497 | $ | | $ | 354,497 | $ | | ||||||||
Agency residential collateralized mortgage
obligations |
357,892 | | 357,892 | | ||||||||||||
SBA pools |
5,108 | | 5,108 | | ||||||||||||
Total securities available for sale |
$ | 717,497 | $ | | $ | 717,497 | $ | | ||||||||
Loans held for sale |
$ | 16,877 | $ | | $ | 16,877 | $ | | ||||||||
Derivative instruments |
$ | 116 | $ | | $ | 116 | $ | |
Fair Value Measurements at September 30, 2011, Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
September 30, | Identical Assets | Observable Inputs | Unobservable | |||||||||||||
2011 | (Level 1) | (Level 2) | Inputs (Level 3) | |||||||||||||
Assets: |
||||||||||||||||
Impaired loans |
$ | 12,295 | $ | | $ | | $ | 12,295 | ||||||||
Other real estate owned |
2,098 | | 392 | 1,706 |
Fair Value Measurements at December 31, 2010, Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
December 31, | Identical Assets | Observable Inputs | Unobservable | |||||||||||||
2010 | (Level 1) | (Level 2) | Inputs (Level 3) | |||||||||||||
Assets: |
||||||||||||||||
Impaired loans |
$ | 11,630 | $ | | $ | | $ | 11,630 | ||||||||
Other real estate owned |
2,668 | | 2,219 | 449 |
Page 25 of 69
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Beginning balance |
$ | 2,326 | $ | 4,436 | $ | 2,668 | $ | 3,917 | ||||||||
Transfers in at fair value |
556 | 253 | 1,077 | 3,274 | ||||||||||||
Change in valuation allowance |
(550 | ) | (141 | ) | (589 | ) | (408 | ) | ||||||||
Sale of property (gross) |
(234 | ) | (1,678 | ) | (1,058 | ) | (3,913 | ) | ||||||||
Ending balance |
$ | 2,098 | $ | 2,870 | $ | 2,098 | $ | 2,870 | ||||||||
Valuation allowance: |
||||||||||||||||
Beginning balance |
$ | 491 | $ | 304 | $ | 452 | $ | 37 | ||||||||
Sale of property |
| (2 | ) | (77 | ) | (62 | ) | |||||||||
Valuation adjustment |
550 | 143 | 666 | 470 | ||||||||||||
Ending balance |
$ | 1,041 | $ | 445 | $ | 1,041 | $ | 445 | ||||||||
Page 26 of 69
September 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||
Financial assets |
||||||||||||||||
Cash and cash equivalents |
$ | 54,160 | $ | 54,160 | $ | 68,650 | $ | 68,650 | ||||||||
Securities available for sale |
655,925 | 655,925 | 717,497 | 717,497 | ||||||||||||
Securities held to maturity |
539,257 | 557,586 | 432,519 | 434,296 | ||||||||||||
Loans held for sale |
691,204 | 691,795 | 491,985 | 492,367 | ||||||||||||
Loans held for investment, net |
1,149,626 | 1,181,871 | 1,092,114 | 1,107,640 | ||||||||||||
FHLB stock |
29,210 | N/A | 20,569 | N/A | ||||||||||||
Bank-owned life insurance |
28,904 | 28,904 | 28,501 | 28,501 | ||||||||||||
Accrued interest receivable |
8,159 | 8,159 | 9,248 | 9,248 | ||||||||||||
Derivative instruments |
(49 | ) | (49 | ) | 116 | 116 | ||||||||||
Financial liabilities |
||||||||||||||||
Deposits |
$ | (2,073,627 | ) | $ | (2,008,954 | ) | $ | (2,017,550 | ) | $ | (2,087,160 | ) | ||||
FHLB advances |
(671,761 | ) | (690,235 | ) | (461,219 | ) | (470,729 | ) | ||||||||
Repurchase agreement |
(25,000 | ) | (28,300 | ) | (25,000 | ) | (27,255 | ) | ||||||||
Other borrowings |
(10,000 | ) | (10,000 | ) | (10,000 | ) | (10,000 | ) | ||||||||
Accrued interest payable |
(1,506 | ) | (1,506 | ) | (1,541 | ) | (1,541 | ) |
Page 27 of 69
Outstanding | ||||||||||||||||
Expiration | Notional | Recorded | ||||||||||||||
September 30, 2011 | Dates | Balance | Fair Value | Gains/(Losses) | ||||||||||||
Other Assets |
||||||||||||||||
IRLCs |
2011 | $ | 12,651 | $ | 120 | $ | 109 | |||||||||
Loan sale commitments |
2011 | 3,216 | 51 | 964 | ||||||||||||
Forward mortgage-backed securities trades |
2011 | 12,000 | (168 | ) | (915 | ) |
Outstanding | ||||||||||||||||
Expiration | Notional | Recorded | ||||||||||||||
December 31, 2010 | Dates | Balance | Fair Value | Gains/(Losses) | ||||||||||||
Other Assets |
||||||||||||||||
IRLCs |
2011 | $ | 16,082 | $ | 11 | $ | 11 | |||||||||
Loan sale commitments |
2011 | 10,207 | (79 | ) | 1,367 | |||||||||||
Forward mortgage-backed securities trades |
2011 | 23,102 | 105 | (1,176 | ) |
Page 28 of 69
Weighted | ||||||||
Average | ||||||||
Balance | Rate | |||||||
2011 |
$ | 378,121 | 0.14 | % | ||||
2012 |
36,720 | 2.25 | ||||||
2013 |
67,134 | 1.70 | ||||||
2014 |
36,517 | 2.86 | ||||||
2015 |
61,742 | 3.66 | ||||||
Thereafter |
96,008 | 3.27 | ||||||
676,242 | 1.32 | % | ||||||
Restructruing prepayment penalty |
(4,481 | ) | ||||||
Total |
$ | 671,761 | ||||||
Page 29 of 69
Weighted- | ||||||||
Average | ||||||||
Grant Date | ||||||||
Shares | Fair Value | |||||||
Non-vested at January 1, 2011 |
218,393 | $ | 13.14 | |||||
Granted |
| | ||||||
Vested |
(107,798 | ) | 13.15 | |||||
Forfeited |
| | ||||||
Non-vested at September 30, 2011 |
110,595 | $ | 13.12 | |||||
Weighted- | ||||||||||||||||
Weighted- | Average | |||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||
Exercise | Contractual | Intrinsic | ||||||||||||||
Options | Shares | Price | Term | Value | ||||||||||||
Outstanding at January 1, 2011 |
457,555 | $ | 12.01 | 7.6 | $ | 170 | ||||||||||
Granted |
108,500 | 12.72 | 10.0 | | ||||||||||||
Exercised |
| | | | ||||||||||||
Forfeited |
(17,164 | ) | 11.36 | | 6 | |||||||||||
Outstanding at September 30, 2011 |
548,891 | $ | 12.17 | 7.3 | $ | 116 | ||||||||||
Fully vested and expected to vest |
528,035 | $ | 12.19 | 7.1 | $ | 94 | ||||||||||
Exercisable at September 30, 2011 |
131,764 | $ | 12.24 | 6.4 | $ | 26 | ||||||||||
Page 30 of 69
Page 31 of 69
Three Months Ended | ||||||||||||||||
September 30, 2011 | ||||||||||||||||
Total | ||||||||||||||||
Eliminations | Segments | |||||||||||||||
and | (Consolidated | |||||||||||||||
Banking | VPM | Adjustments1 | Total) | |||||||||||||
Results of Operations: |
||||||||||||||||
Total interest income |
$ | 28,953 | $ | 368 | $ | (315 | ) | $ | 29,006 | |||||||
Total interest expense |
8,581 | 315 | (369 | ) | 8,527 | |||||||||||
Provision (benefit) for loan losses |
582 | (1 | ) | | 581 | |||||||||||
Net interest income after provision for loan losses |
19,790 | 54 | 54 | 19,898 | ||||||||||||
Other revenue |
3,851 | (3 | ) | 649 | 4,497 | |||||||||||
Net gain (loss) on sale of mortgage loans |
(682 | ) | 2,392 | | 1,710 | |||||||||||
Total noninterest expense |
14,895 | 3,411 | 261 | 18,567 | ||||||||||||
Income before income tax expense (benefit) |
8,064 | (968 | ) | 442 | 7,538 | |||||||||||
Income tax expense (benefit) |
2,770 | (305 | ) | (70 | ) | 2,395 | ||||||||||
Net income (loss) |
$ | 5,294 | $ | (663 | ) | $ | 512 | $ | 5,143 | |||||||
Segment assets |
$ | 3,234,538 | $ | 42,939 | $ | (42,199 | ) | $ | 3,235,278 | |||||||
Noncash items: |
||||||||||||||||
Net gain (loss) on sale of mortgage loans |
(682 | ) | 2,392 | | 1,710 | |||||||||||
Depreciation |
797 | 72 | | 869 | ||||||||||||
Provision (benefit) for loan losses |
582 | (1 | ) | | 581 |
Three Months Ended | ||||||||||||||||
September 30, 2010 | ||||||||||||||||
Total | ||||||||||||||||
Eliminations | Segments | |||||||||||||||
and | (Consolidated | |||||||||||||||
Banking | VPM | Adjustments1 | Total) | |||||||||||||
Results of Operations: |
||||||||||||||||
Total interest income |
$ | 30,014 | $ | 693 | $ | (606 | ) | $ | 30,101 | |||||||
Total interest expense |
11,645 | 606 | (669 | ) | 11,582 | |||||||||||
Provision for loan losses |
748 | 8 | | 756 | ||||||||||||
Net interest income after provision for loan losses |
17,621 | 79 | 63 | 17,763 | ||||||||||||
Other revenue |
5,788 | | (431 | ) | 5,357 | |||||||||||
Net gain (loss) on sale of mortgage loans |
(761 | ) | 4,458 | | 3,697 | |||||||||||
Total noninterest expense |
14,561 | 3,917 | 222 | 18,700 | ||||||||||||
Income before income tax expense (benefit) |
8,087 | 620 | (590 | ) | 8,117 | |||||||||||
Income tax expense (benefit) |
2,480 | 209 | 20 | 2,709 | ||||||||||||
Net income (loss) |
$ | 5,607 | $ | 411 | $ | (610 | ) | $ | 5,408 | |||||||
Segment assets |
$ | 2,986,322 | $ | 65,743 | $ | (65,653 | ) | $ | 2,986,412 | |||||||
Noncash items: |
||||||||||||||||
Net gain (loss) on sale of mortgage loans |
(761 | ) | 4,458 | | 3,697 | |||||||||||
Depreciation |
683 | 78 | | 761 | ||||||||||||
Provision for loan losses |
748 | 8 | | 756 |
Page 32 of 69
Nine Months Ended | ||||||||||||||||
September 30, 2011 | ||||||||||||||||
Total | ||||||||||||||||
Eliminations | Segments | |||||||||||||||
and | (Consolidated | |||||||||||||||
Banking | VPM | Adjustments1 | Total) | |||||||||||||
Results of Operations: |
||||||||||||||||
Total interest income |
$ | 84,698 | $ | 1,227 | $ | (1,038 | ) | $ | 84,887 | |||||||
Total interest expense |
26,632 | 1,038 | (1,204 | ) | 26,466 | |||||||||||
Provision (benefit) for loan losses |
2,761 | (20 | ) | | 2,741 | |||||||||||
Net interest income after provision for
loan losses |
55,305 | 209 | 166 | 55,680 | ||||||||||||
Other revenue |
17,446 | (275 | ) | 1,601 | 18,772 | |||||||||||
Net gain (loss) on sale of mortgage loans |
(1,574 | ) | 7,112 | | 5,538 | |||||||||||
Total noninterest expense |
45,416 | 9,457 | 823 | 55,696 | ||||||||||||
Income before income tax expense (benefit) |
25,761 | (2,411 | ) | 944 | 24,294 | |||||||||||
Income tax expense (benefit) |
8,734 | (771 | ) | (223 | ) | 7,740 | ||||||||||
Net income (loss) |
$ | 17,027 | $ | (1,640 | ) | $ | 1,167 | $ | 16,554 | |||||||
Segment assets |
$ | 3,234,538 | $ | 42,939 | $ | (42,199 | ) | $ | 3,235,278 | |||||||
Noncash items: |
||||||||||||||||
Net gain (loss) on sale of mortgage loans |
(1,574 | ) | 7,112 | | 5,538 | |||||||||||
Depreciation |
2,401 | 225 | | 2,626 | ||||||||||||
Provision (benefit) for loan losses |
2,761 | (20 | ) | | 2,741 | |||||||||||
Nine Months Ended | ||||||||||||||||
September 30, 2010 | ||||||||||||||||
Total | ||||||||||||||||
Eliminations | Segments | |||||||||||||||
and | (Consolidated | |||||||||||||||
Banking | VPM | Adjustments1 | Total) | |||||||||||||
Results of Operations: |
||||||||||||||||
Total interest income |
$ | 83,751 | $ | 1,699 | $ | (1,423 | ) | $ | 84,027 | |||||||
Total interest expense |
33,903 | 1,424 | (1,363 | ) | 33,964 | |||||||||||
Provision for loan losses |
3,725 | 65 | | 3,790 | ||||||||||||
Net interest income after provision for
loan losses |
46,123 | 210 | (60 | ) | 46,273 | |||||||||||
Other revenue |
15,216 | | 46 | 15,262 | ||||||||||||
Net gain (loss) on sale of mortgage loans |
(1,228 | ) | 10,745 | | 9,517 | |||||||||||
Total noninterest expense |
42,714 | 11,106 | 399 | 54,219 | ||||||||||||
Income before income tax expense (benefit) |
17,397 | (151 | ) | (413 | ) | 16,833 | ||||||||||
Income tax expense (benefit) |
5,666 | (46 | ) | (96 | ) | 5,524 | ||||||||||
Net income (loss) |
$ | 11,731 | $ | (105 | ) | $ | (317 | ) | $ | 11,309 | ||||||
Segment assets |
$ | 2,986,322 | $ | 65,743 | $ | (65,653 | ) | $ | 2,986,412 | |||||||
Noncash items: |
||||||||||||||||
Net gain (loss) on sale of mortgage loans |
(1,228 | ) | 10,745 | | 9,517 | |||||||||||
Depreciation |
2,100 | 219 | | 2,319 | ||||||||||||
Provision for loan losses |
3,725 | 65 | | 3,790 |
Page 33 of 69
Page 34 of 69
Page 35 of 69
Page 36 of 69
| Lower deposit and borrowing rates fueled a ten basis point increase in net interest
margin to 2.84%: A $5.8 million reduction in deposit cost improved the net interest margin
by ten basis points to 2.84% for the nine months ended September 30, 2011, from 2.74% for
the nine months ended September 30, 2010. |
| Loan growth year-to-date: During the nine months ended September 30, 2011, loans
increased by $257.8 million, or 16.1%. This increase was driven by a $202.9 million
increase in Warehouse Purchase Program loans held for sale and a $52.7 million increase in
commercial real estate loan balances. |
| $44.1 million in business lending production in 2011: By adding experienced business
lenders and enabling local loan decisioning, $44.1 million of business loans (including
small to mid-size business real estate and commercial and industrial loans) have been
originated during the nine months ended September 30, 2011. |
| Lower net charge-offs led to decrease in provision expense: The provision for loan
losses decreased by $1.0 million, or 27.7%, during the nine months ended September 30,
2011, compared to the same period last year. |
| Year-to-date net income increased by $5.3 million, or 46.4%: The $5.3 million increase
in net income was driven by higher net interest income, a gain on the sale of available for
sale securities and a lower provision for loan losses. |
| Basic and diluted EPS increased by $0.13: Basic and diluted earnings per share for the
nine months ended September 30, 2011, was $0.51, up $0.13 from the nine months ended
September 30, 2010. |
| Deposit growth of $56.1 million: Deposits increased by $56.1 million from December 31,
2010, primarily due to growth of $57.6 million in interest-bearing demand accounts. |
Page 37 of 69
| Continuing the growth and diversification of our loan portfolio. |
|
During the past six years, we have successfully transitioned our lending activities from a
predominantly consumer-driven model to become a more diversified consumer and business lender by
emphasizing three key lending initiatives: our Warehouse Purchase Program, through which we fund
third party mortgage banks; residential mortgage lending through our own mortgage banking
company; and commercial real estate lending. Additionally, we are diversifying our loan
portfolio by increasing secured commercial and industrial lending to small to mid-size
businesses in our market area. Loan diversification improves our earnings because commercial
real estate and commercial and industrial loans generally have higher interest rates than
residential mortgage loans. Another benefit of commercial lending is that it improves the
sensitivity of our interest-earning assets because commercial loans typically have shorter terms
than residential mortgage loans and in some cases have variable interest rates. |
||
| Maintaining our historically high asset quality. |
|
We believe that strong asset quality is a key to long-term financial success. We have sought to
maintain high asset quality and moderate credit risk by strictly adhering to our strong lending
policies, as evidenced by our low charge-off ratios and non-performing assets. Although we
intend to continue our efforts to grow our loan portfolio, including through commercial real
estate and commercial and industrial lending, we intend to continue our philosophy of managing
credit exposures through our conservative approach to lending. |
Page 38 of 69
| Capturing our customers full relationship. |
|
We offer a wide range of products and services that provide diversification of revenue sources
and solidify our relationship with our customers. We focus on core retail and business
deposits, including savings and checking accounts, that lead to long-term customer retention.
For example, our Absolute Checking account product, which offers a higher rate of interest when
electronic transaction volume and other requirements are satisfied, provides cost savings and
drives fee revenue while creating what we believe to be a stable customer relationship. As part
of our commercial lending process we cross-sell the entire business banking relationship,
including non-interest-bearing deposits and business banking products such as online cash
management, treasury management and direct deposit /payment processing. |
||
| Expanding our reach. |
|
In addition to deepening our relationships with existing customers, we intend to expand our
business to new customers by leveraging our well-established involvement in the community and by
selectively emphasizing products and services designed to meet their banking needs. We also
intend to continue to pursue expansion in our market area by growing our branch network. We may
also consider the acquisition of other financial institutions or branches of other banks in or
contiguous to our market area. |
September 30, | December 31, | Dollar | Percent | |||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Real estate loans: |
||||||||||||||||
One- to four- family |
$ | 372,949 | $ | 370,149 | $ | 2,800 | 0.8 | % | ||||||||
Commercial |
531,729 | 479,071 | 52,658 | 11.0 | ||||||||||||
One- to four- family construction |
9,870 | 11,435 | (1,565 | ) | (13.7 | ) | ||||||||||
Commercial construction |
15,185 | 569 | 14,616 | 2,568.7 | ||||||||||||
Home equity/home improvement |
140,945 | 139,165 | 1,780 | 1.3 | ||||||||||||
Mortgage loans held for sale |
691,204 | 491,985 | 199,219 | 40.5 | ||||||||||||
Total real estate loans |
1,761,882 | 1,492,374 | 269,508 | 18.1 | ||||||||||||
Automobile loans |
32,525 | 42,550 | (10,025 | ) | (23.6 | ) | ||||||||||
Other consumer loans |
18,394 | 24,816 | (6,422 | ) | (25.9 | ) | ||||||||||
Total consumer loans |
50,919 | 67,366 | (16,447 | ) | (24.4 | ) | ||||||||||
Commercial and industrial |
44,014 | 39,279 | 4,735 | 12.1 | ||||||||||||
Gross loans |
$ | 1,856,815 | $ | 1,599,019 | $ | 257,796 | 16.1 | % | ||||||||
Page 39 of 69
Texas |
91 | % | ||
Louisiana |
2 | |||
Oklahoma |
2 | |||
California |
2 | |||
Illinois |
1 | |||
Other* |
2 | |||
100 | % | |||
* | Other consists of Arizona, Georgia, Nevada, New Mexico, Oregon, Kansas, Missouri and
Washington. |
Page 40 of 69
Page 41 of 69
September 30, 2011 | December 31, 2010 | |||||||
(Dollars in thousands) | ||||||||
Loss |
$ | | $ | | ||||
Doubtful |
5,434 | 4,185 | ||||||
Substandard |
18,701 | 17,410 | ||||||
Total |
$ | 24,135 | $ | 21,595 | ||||
Page 42 of 69
September 30, | December 31, | Dollar | Percent | |||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Non-interest-bearing demand |
$ | 207,940 | $ | 201,998 | $ | 5,942 | 2.9 | % | ||||||||
Interest-bearing demand |
496,269 | 438,719 | 57,550 | 13.1 | ||||||||||||
Savings |
155,476 | 148,399 | 7,077 | 4.8 | ||||||||||||
Money Market |
596,561 | 554,261 | 42,300 | 7.6 | ||||||||||||
IRA |
10,201 | 9,251 | 950 | 10.3 | ||||||||||||
Time |
607,180 | 664,922 | (57,742 | ) | (8.7 | ) | ||||||||||
Total deposits |
$ | 2,073,627 | $ | 2,017,550 | $ | 56,077 | 2.8 | % | ||||||||
Page 43 of 69
September 30, | December 31, | Dollar | Percent | |||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Common stock |
$ | 342 | $ | 349 | $ | (7 | ) | (2.0 | %) | |||||||
Additional paid-in capital |
284,974 | 289,591 | (4,617 | ) | (1.6 | ) | ||||||||||
Retained earnings |
136,454 | 125,125 | 11,329 | 9.1 | ||||||||||||
Accumulated other comprehensive income |
4,665 | 2,373 | 2,292 | 96.6 | ||||||||||||
Unearned ESOP shares |
(19,749 | ) | (20,849 | ) | 1,100 | 5.3 | ||||||||||
Total shareholders equity |
$ | 406,686 | $ | 396,589 | $ | 10,097 | 2.5 | % | ||||||||
Page 44 of 69
Three Months Ended | ||||||||||||||||
September 30, | Dollar | Percent | ||||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Interest and dividend income |
||||||||||||||||
Loans, including fees |
$ | 21,838 | $ | 22,953 | $ | (1,115 | ) | (4.9 | %) | |||||||
Securities |
7,106 | 7,066 | 40 | 0.6 | ||||||||||||
Interest-bearing deposits in other financial institutions |
44 | 67 | (23 | ) | (34.3 | ) | ||||||||||
FHLB stock |
18 | 15 | 3 | 20.0 | ||||||||||||
$ | 29,006 | $ | 30,101 | $ | (1,095 | ) | (3.6 | %) | ||||||||
Three Months Ended | ||||||||||||||||
September 30, | Dollar | Percent | ||||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Interest expense |
||||||||||||||||
Deposits |
$ | 5,702 | $ | 8,316 | $ | (2,614 | ) | (31.4 | %) | |||||||
FHLB advances |
2,467 | 2,910 | (443 | ) | (15.2 | ) | ||||||||||
Repurchase agreement |
206 | 205 | 1 | | ||||||||||||
Other borrowings |
152 | 151 | 1 | | ||||||||||||
$ | 8,527 | $ | 11,582 | $ | (3,055 | ) | (26.4 | %) | ||||||||
Page 45 of 69
Page 46 of 69
Three Months Ended September 30, | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Outstanding | Interest | Outstanding | Interest | |||||||||||||||||||||
Balance | Earned/Paid | Yield/Rate | Balance | Earned/Paid | Yield/Rate | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||
One- to four- family real estate |
$ | 381,322 | $ | 5,047 | 5.29 | % | $ | 382,238 | $ | 5,295 | 5.54 | % | ||||||||||||
Warehouse Purchase Program loans held for sale |
395,711 | 4,310 | 4.36 | 423,567 | 5,195 | 4.91 | ||||||||||||||||||
ViewPoint Mortgage loans held for sale |
21,213 | 230 | 4.34 | 49,883 | 557 | 4.47 | ||||||||||||||||||
Commercial real estate |
524,516 | 8,660 | 6.60 | 481,178 | 8,067 | 6.71 | ||||||||||||||||||
Home equity/home improvement |
141,483 | 2,019 | 5.71 | 135,776 | 2,026 | 5.97 | ||||||||||||||||||
Consumer |
51,246 | 875 | 6.83 | 76,978 | 1,209 | 6.28 | ||||||||||||||||||
Commercial and industrial |
43,806 | 697 | 6.36 | 36,738 | 604 | 6.58 | ||||||||||||||||||
Less: deferred fees and allowance for loan loss |
(16,135 | ) | | | (14,926 | ) | | | ||||||||||||||||
Loans receivable 1 |
1,543,162 | 21,838 | 5.66 | 1,571,432 | 22,953 | 5.84 | ||||||||||||||||||
Agency mortgage-backed securities |
463,480 | 3,233 | 2.79 | 490,285 | 3,789 | 3.09 | ||||||||||||||||||
Agency collateralized mortgage obligations |
695,367 | 3,336 | 1.92 | 364,323 | 2,336 | 2.56 | ||||||||||||||||||
Investment securities |
59,577 | 537 | 3.61 | 110,858 | 941 | 3.40 | ||||||||||||||||||
FHLB stock |
19,429 | 18 | 0.37 | 16,032 | 15 | 0.37 | ||||||||||||||||||
Interest-earning deposit accounts |
73,236 | 44 | 0.24 | 87,549 | 67 | 0.31 | ||||||||||||||||||
Total interest-earning assets |
2,854,251 | 29,006 | 4.06 | 2,640,479 | 30,101 | 4.56 | ||||||||||||||||||
Non-interest-earning assets |
128,364 | 203,688 | ||||||||||||||||||||||
Total assets |
$ | 2,982,615 | $ | 2,844,167 | ||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
Interest-bearing demand |
$ | 484,926 | 2,155 | 1.78 | $ | 419,770 | 2,781 | 2.65 | ||||||||||||||||
Savings and money market |
753,252 | 871 | 0.46 | 724,333 | 2,407 | 1.33 | ||||||||||||||||||
Time |
634,754 | 2,676 | 1.69 | 641,021 | 3,128 | 1.95 | ||||||||||||||||||
Borrowings |
458,620 | 2,825 | 2.46 | 379,422 | 3,266 | 3.44 | ||||||||||||||||||
Total interest-bearing liabilities |
2,331,552 | 8,527 | 1.46 | 2,164,546 | 11,582 | 2.14 | ||||||||||||||||||
Non-interest-bearing checking |
193,725 | 187,639 | ||||||||||||||||||||||
Non-interest-bearing liabilities |
47,260 | 75,317 | ||||||||||||||||||||||
Total liabilities |
2,572,537 | 2,427,502 | ||||||||||||||||||||||
Total shareholders equity |
410,078 | 416,665 | ||||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 2,982,615 | $ | 2,844,167 | ||||||||||||||||||||
Net interest income and margin |
$ | 20,479 | 2.87 | % | $ | 18,519 | 2.81 | % | ||||||||||||||||
Net interest income and margin (tax-equivalent basis)2 |
$ | 20,653 | 2.89 | % | $ | 18,669 | 2.83 | % | ||||||||||||||||
Net interest rate spread |
2.60 | % | 2.42 | % | ||||||||||||||||||||
Net earning assets |
$ | 522,699 | $ | 475,933 | ||||||||||||||||||||
Average interest-earning assets to
average interest-bearing liabilities |
122.42 | % | 121.99 | % |
1 | Calculated net of deferred fees, loan discounts, loans in process and allowance for
loan losses. 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% for 2011 and 2010. Tax-exempt investments and loans had
average balances of $52.6 million and $44.3 million for the three months ended September 30, 2011
and 2010, respectively. |
Page 47 of 69
Three Months Ended September 30, | ||||||||||||
2011 versus 2010 | ||||||||||||
Increase (Decrease) Due to | ||||||||||||
Total | ||||||||||||
Increase | ||||||||||||
Volume | Rate | (Decrease) | ||||||||||
(Dollars in thousands) | ||||||||||||
Interest-earning assets: |
||||||||||||
One- to four- family real estate |
$ | (13 | ) | $ | (235 | ) | $ | (248 | ) | |||
Warehouse Purchase Program loans held for sale |
(327 | ) | (558 | ) | (885 | ) | ||||||
ViewPoint Mortgage loans held for sale |
(311 | ) | (16 | ) | (327 | ) | ||||||
Commercial real estate |
717 | (124 | ) | 593 | ||||||||
Home equity/home improvement |
83 | (90 | ) | (7 | ) | |||||||
Consumer |
(432 | ) | 98 | (334 | ) | |||||||
Commercial and industrial |
113 | (20 | ) | 93 | ||||||||
Loans receivable |
(170 | ) | (945 | ) | (1,115 | ) | ||||||
Agency mortgage-backed securities |
(200 | ) | (356 | ) | (556 | ) | ||||||
Agency collateralized mortgage obligations |
1,704 | (704 | ) | 1,000 | ||||||||
Investment securities |
(459 | ) | 55 | (404 | ) | |||||||
FHLB stock |
3 | | 3 | |||||||||
Interest-earning deposit accounts |
(10 | ) | (13 | ) | (23 | ) | ||||||
Total interest-earning assets |
868 | (1,963 | ) | (1,095 | ) | |||||||
Interest-bearing liabilities: |
||||||||||||
Interest-bearing demand |
386 | (1,012 | ) | (626 | ) | |||||||
Savings and money market |
92 | (1,628 | ) | (1,536 | ) | |||||||
Time |
(30 | ) | (422 | ) | (452 | ) | ||||||
Borrowings |
600 | (1,041 | ) | (441 | ) | |||||||
Total interest-bearing liabilities |
1,048 | (4,103 | ) | (3,055 | ) | |||||||
Net interest income |
$ | (180 | ) | $ | 2,140 | $ | 1,960 | |||||
Page 48 of 69
Page 49 of 69
Three Months Ended | ||||||||||||||||
September 30, | Dollar | Percent | ||||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Non-interest income |
||||||||||||||||
Service charges and fees |
$ | 4,659 | $ | 4,694 | $ | (35 | ) | (0.7 | %) | |||||||
Other charges and fees |
144 | 171 | (27 | ) | (15.8 | ) | ||||||||||
Net gain on sale of mortgage loans |
1,710 | 3,697 | (1,987 | ) | (53.7 | ) | ||||||||||
Bank-owned life insurance income |
118 | 135 | (17 | ) | (12.6 | ) | ||||||||||
Loss on sale and disposition of assets |
(533 | ) | (24 | ) | (509 | ) | (2,120.8 | ) | ||||||||
Other |
109 | 381 | (272 | ) | (71.4 | ) | ||||||||||
$ | 6,207 | $ | 9,054 | $ | (2,847 | ) | (31.4 | %) | ||||||||
Three Months Ended | ||||||||||||||||
September 30, | Dollar | Percent | ||||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Non-interest expense |
||||||||||||||||
Salaries and employee benefits |
$ | 11,751 | $ | 11,843 | $ | (92 | ) | (0.8 | %) | |||||||
Advertising |
351 | 280 | 71 | 25.4 | ||||||||||||
Occupancy and equipment |
1,511 | 1,520 | (9 | ) | (0.6 | ) | ||||||||||
Outside professional services |
769 | 648 | 121 | 18.7 | ||||||||||||
Regulatory assessments |
409 | 819 | (410 | ) | (50.1 | ) | ||||||||||
Data processing |
1,168 | 1,036 | 132 | 12.7 | ||||||||||||
Office operations |
1,521 | 1,458 | 63 | 4.3 | ||||||||||||
Other |
1,087 | 1,096 | (9 | ) | (0.8 | ) | ||||||||||
$ | 18,567 | $ | 18,700 | $ | (133 | ) | (0.7 | %) | ||||||||
Page 50 of 69
Nine Months Ended | ||||||||||||||||
September 30, | Dollar | Percent | ||||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Interest and dividend income |
||||||||||||||||
Loans, including fees |
$ | 63,132 | $ | 64,921 | $ | (1,789 | ) | (2.8 | %) | |||||||
Securities |
21,559 | 18,715 | 2,844 | 15.2 | ||||||||||||
Interest-bearing deposits in other financial institutions |
144 | 344 | (200 | ) | (58.1 | ) | ||||||||||
FHLB stock |
52 | 47 | 5 | 10.6 | ||||||||||||
$ | 84,887 | $ | 84,027 | $ | 860 | 1.0 | % | |||||||||
Page 51 of 69
Nine Months Ended | ||||||||||||||||
September 30, | Dollar | Percent | ||||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Interest expense |
||||||||||||||||
Deposits |
$ | 18,045 | $ | 23,834 | $ | (5,789 | ) | (24.3 | %) | |||||||
FHLB advances |
7,360 | 9,071 | (1,711 | ) | (18.9 | ) | ||||||||||
Repurchase agreement |
611 | 610 | 1 | | ||||||||||||
Other borrowings |
450 | 449 | 1 | | ||||||||||||
$ | 26,466 | $ | 33,964 | $ | (7,498 | ) | (22.1 | %) | ||||||||
Page 52 of 69
Nine Months Ended September 30, | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Outstanding | Interest | Outstanding | Interest | |||||||||||||||||||||
Balance | Earned/Paid | Yield/Rate | Balance | Earned/Paid | Yield/Rate | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||
One- to four- family real estate |
$ | 379,074 | $ | 15,198 | 5.35 | % | $ | 392,530 | $ | 16,303 | 5.54 | % | ||||||||||||
Warehouse Purchase Program loans held for sale |
317,630 | 10,801 | 4.53 | 330,197 | 12,115 | 4.89 | ||||||||||||||||||
ViewPoint Mortgage loans held for sale |
21,744 | 835 | 5.12 | 39,041 | 1,370 | 4.68 | ||||||||||||||||||
Commercial real estate |
504,343 | 25,424 | 6.72 | 468,749 | 23,522 | 6.69 | ||||||||||||||||||
Home equity/home improvement |
140,953 | 6,089 | 5.76 | 131,511 | 5,998 | 6.08 | ||||||||||||||||||
Consumer |
55,946 | 2,794 | 6.66 | 83,752 | 3,932 | 6.26 | ||||||||||||||||||
Commercial and industrial |
40,676 | 1,991 | 6.53 | 35,229 | 1,681 | 6.36 | ||||||||||||||||||
Less: deferred fees and allowance for loan loss |
(15,543 | ) | | | (14,056 | ) | | | ||||||||||||||||
Loans receivable 1 |
1,444,823 | 63,132 | 5.83 | 1,466,953 | 64,921 | 5.90 | ||||||||||||||||||
Agency mortgage-backed securities |
468,553 | 9,796 | 2.79 | 447,733 | 10,148 | 3.02 | ||||||||||||||||||
Agency collateralized mortgage obligations |
677,082 | 10,064 | 1.98 | 312,331 | 5,993 | 2.56 | ||||||||||||||||||
Investment securities |
63,437 | 1,699 | 3.57 | 101,986 | 2,574 | 3.37 | ||||||||||||||||||
FHLB stock |
16,932 | 52 | 0.41 | 15,322 | 47 | 0.41 | ||||||||||||||||||
Interest-earning deposit accounts |
76,170 | 144 | 0.25 | 94,213 | 344 | 0.49 | ||||||||||||||||||
Total interest-earning assets |
2,746,997 | 84,887 | 4.12 | 2,438,538 | 84,027 | 4.59 | ||||||||||||||||||
Non-interest-earning assets |
137,055 | 162,444 | ||||||||||||||||||||||
Total assets |
$ | 2,884,052 | $ | 2,600,982 | ||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
Interest-bearing demand |
$ | 464,261 | 6,623 | 1.90 | $ | 353,841 | 6,590 | 2.48 | ||||||||||||||||
Savings and money market |
731,869 | 2,901 | 0.53 | 716,254 | 7,472 | 1.39 | ||||||||||||||||||
Time |
650,843 | 8,521 | 1.75 | 653,312 | 9,772 | 1.99 | ||||||||||||||||||
Borrowings |
397,658 | 8,421 | 2.82 | 362,905 | 10,130 | 3.72 | ||||||||||||||||||
Total interest-bearing liabilities |
2,244,631 | 26,466 | 1.57 | 2,086,312 | 33,964 | 2.17 | ||||||||||||||||||
Non-interest-bearing checking |
192,184 | 181,705 | ||||||||||||||||||||||
Non-interest-bearing liabilities |
38,257 | 52,407 | ||||||||||||||||||||||
Total liabilities |
2,475,072 | 2,320,424 | ||||||||||||||||||||||
Total shareholders equity |
408,980 | 280,558 | ||||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 2,884,052 | $ | 2,600,982 | ||||||||||||||||||||
Net interest income and margin |
$ | 58,421 | 2.84 | % | $ | 50,063 | 2.74 | % | ||||||||||||||||
Net interest income and margin (tax-equivalent
basis)2 |
$ | 58,944 | 2.86 | % | $ | 50,457 | 2.76 | % | ||||||||||||||||
Net interest rate spread |
2.55 | % | 2.42 | % | ||||||||||||||||||||
Net earning assets |
$ | 502,366 | $ | 352,226 | ||||||||||||||||||||
Average interest-earning assets to
average interest-bearing liabilities |
122.38 | % | 116.88 | % |
1 | Calculated net of deferred fees, loan discounts, loans in process and allowance for
loan losses. 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% for 2011 and 2010. Tax-exempt investments and loans had
average balances of $52.7 million and $38.8 million for the nine months ended September 30, 2011
and 2010, respectively. |
Page 53 of 69
Nine Months Ended September 30, | ||||||||||||
2011 versus 2010 | ||||||||||||
Increase (Decrease) Due to | ||||||||||||
Total | ||||||||||||
Increase | ||||||||||||
Volume | Rate | (Decrease) | ||||||||||
(Dollars in thousands) | ||||||||||||
Interest-earning assets: |
||||||||||||
One- to four- family real estate |
$ | (549 | ) | $ | (556 | ) | $ | (1,105 | ) | |||
Warehouse Purchase Program loans held for sale |
(450 | ) | (864 | ) | (1,314 | ) | ||||||
ViewPoint Mortgage loans held for sale |
(654 | ) | 119 | (535 | ) | |||||||
Commercial real estate |
1,794 | 108 | 1,902 | |||||||||
Home equity/home improvement |
418 | (327 | ) | 91 | ||||||||
Consumer |
(1,375 | ) | 237 | (1,138 | ) | |||||||
Commercial and industrial |
266 | 44 | 310 | |||||||||
Loans receivable |
(550 | ) | (1,239 | ) | (1,789 | ) | ||||||
Agency mortgage-backed securities |
458 | (810 | ) | (352 | ) | |||||||
Agency collateralized mortgage obligations |
5,677 | (1,606 | ) | 4,071 | ||||||||
Investment securities |
(1,024 | ) | 149 | (875 | ) | |||||||
FHLB stock |
5 | | 5 | |||||||||
Interest-earning deposit accounts |
(57 | ) | (143 | ) | (200 | ) | ||||||
Total interest-earning assets |
4,509 | (3,649 | ) | 860 | ||||||||
Interest-bearing liabilities: |
||||||||||||
Interest-bearing demand |
1,781 | (1,748 | ) | 33 | ||||||||
Savings and money market |
159 | (4,730 | ) | (4,571 | ) | |||||||
Time |
(37 | ) | (1,214 | ) | (1,251 | ) | ||||||
Borrowings |
904 | (2,613 | ) | (1,709 | ) | |||||||
Total interest-bearing liabilities |
2,807 | (10,305 | ) | (7,498 | ) | |||||||
Net interest income |
$ | 1,702 | $ | 6,656 | $ | 8,358 | ||||||
Page 54 of 69
Page 55 of 69
Nine Months Ended | ||||||||||||||||
September 30, | Dollar | Percent | ||||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Non-interest income |
||||||||||||||||
Service charges and fees |
$ | 14,027 | $ | 13,838 | $ | 189 | 1.4 | % | ||||||||
Other charges and fees |
544 | 509 | 35 | 6.9 | ||||||||||||
Net gain on sale of mortgage loans |
5,538 | 9,517 | (3,979 | ) | (41.8 | ) | ||||||||||
Bank-owned life insurance income |
403 | 305 | 98 | 32.1 | ||||||||||||
Gain on sale of available for sale securities |
3,415 | | 3,415 | N/M | ||||||||||||
Loss on sale and disposition of assets |
(749 | ) | (365 | ) | (384 | ) | (105.2 | ) | ||||||||
Impairment of goodwill |
(271 | ) | | (271 | ) | | ||||||||||
Other |
1,403 | 975 | 428 | 43.9 | ||||||||||||
$ | 24,310 | $ | 24,779 | $ | (469 | ) | (1.9 | %) | ||||||||
Nine Months Ended | ||||||||||||||||
September 30, | Dollar | Percent | ||||||||||||||
2011 | 2010 | Change | Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Non-interest expense |
||||||||||||||||
Salaries and
employee benefits |
$ | 35,147 | $ | 34,476 | $ | 671 | 1.9 | % | ||||||||
Advertising |
1,217 | 878 | 339 | 38.6 | ||||||||||||
Occupancy and equipment |
4,333 | 4,467 | (134 | ) | (3.0 | ) | ||||||||||
Outside professional services |
2,126 | 1,591 | 535 | 33.6 | ||||||||||||
Regulatory assessments |
1,866 | 2,409 | (543 | ) | (22.5 | ) | ||||||||||
Data processing |
3,366 | 3,081 | 285 | 9.3 | ||||||||||||
Office operations |
4,452 | 4,337 | 115 | 2.7 | ||||||||||||
Other |
3,189 | 2,980 | 209 | 7.0 | ||||||||||||
$ | 55,696 | $ | 54,219 | $ | 1,477 | 2.7 | % | |||||||||
Page 56 of 69
Page 57 of 69
Page 58 of 69
September 30, 2011 | ||||||||||||||||||||
Less than | One through | Four through | After Five | |||||||||||||||||
One Year | Three Years | Five Years | Years | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Contractual obligations: |
||||||||||||||||||||
FHLB advances (gross of restructuring prepayment
penalty of $4,481) |
$ | 410,624 | $ | 84,504 | $ | 95,374 | $ | 85,740 | $ | 676,242 | ||||||||||
Repurchase agreement |
| | | 25,000 | 25,000 | |||||||||||||||
Other borrowings |
| | 10,000 | | 10,000 | |||||||||||||||
Operating leases (premises) |
1,353 | 2,183 | 1,509 | 4,572 | 9,617 | |||||||||||||||
Total advances and operating leases |
$ | 411,977 | $ | 86,687 | $ | 106,883 | $ | 115,312 | 720,859 | |||||||||||
Off-balance sheet loan commitments: (1) |
||||||||||||||||||||
Undisbursed portions of loans closed |
$ | 41,082 | $ | | $ | | $ | | 41,082 | |||||||||||
Commitments to originate loans |
114,092 | | | | 114,092 | |||||||||||||||
Unused commitment on Warehouse Purchase Program loans |
216,706 | | | | 216,706 | |||||||||||||||
Unused lines of credit |
85,169 | | | | 85,169 | |||||||||||||||
Total loan commitments |
$ | 457,049 | $ | | $ | | $ | | 457,049 | |||||||||||
Total contractual obligations and loan commitments |
$ | 1,177,908 | ||||||||||||||||||
(1) | Loans having no stated maturity are reported in the Less than One Year category |
Page 59 of 69
To Be Well-Capitalized | ||||||||||||||||||||||||
Required for Capital | Under Prompt Corrective | |||||||||||||||||||||||
Actual | Adequacy Purposes | Action Regulations | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||
As of September 30, 2011: |
||||||||||||||||||||||||
Total capital (to
risk-weighted assets) |
317,546 | 16.98 | % | 149,628 | 8.00 | % | 187,036 | 10.00 | % | |||||||||||||||
Tier 1 (core) capital
(to risk-weighted
assets) |
303,829 | 16.24 | % | 74,814 | 4.00 | % | 112,221 | 6.00 | % | |||||||||||||||
Tier 1 (core) capital
(to adjusted total
assets) |
303,829 | 9.43 | % | 128,880 | 4.00 | % | 161,100 | 5.00 | % | |||||||||||||||
As of December 31, 2010: |
||||||||||||||||||||||||
Total capital (to
risk-weighted assets) |
298,739 | 18.42 | % | 129,717 | 8.00 | % | 162,147 | 10.00 | % | |||||||||||||||
Tier 1 (core) capital
(to risk-weighted
assets) |
285,494 | 17.61 | % | 64,859 | 4.00 | % | 97,288 | 6.00 | % | |||||||||||||||
Tier 1 (core) capital
(to adjusted total
assets) |
285,494 | 9.73 | % | 117,320 | 4.00 | % | 146,650 | 5.00 | % |
Page 60 of 69
Page 61 of 69
September 30, 2011 | ||||||||||||||||||
Change in | ||||||||||||||||||
Interest | ||||||||||||||||||
Rates in | ||||||||||||||||||
Basis | EVE | |||||||||||||||||
Points | Economic Value of Equity | Ratio % | ||||||||||||||||
$ Amount | $ Change | % Change | ||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||
400 | 385,884 | (17,139 | ) | (4.25 | ) | 12.90 | ||||||||||||
300 | 395,059 | (7,964 | ) | (1.98 | ) | 12.79 | ||||||||||||
200 | 409,199 | 6,176 | 1.53 | 12.96 | ||||||||||||||
100 | 415,562 | 12,539 | 3.11 | 12.89 | ||||||||||||||
| 403,023 | | | 12.28 | ||||||||||||||
(100 | ) | 382,727 | (20,296 | ) | (5.04 | ) | 11.53 | |||||||||||
(200 | ) | 342,153 | (60,870 | ) | (15.10 | ) | 10.26 |
December 31, 2010 | ||||||||||||||||||
Change in | ||||||||||||||||||
Interest | ||||||||||||||||||
Rates in | ||||||||||||||||||
Basis | EVE | |||||||||||||||||
Points | Economic Value of Equity | Ratio % | ||||||||||||||||
$ Amount | $ Change | % Change | ||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||
400 | 216,942 | (108,087 | ) | (33.25 | ) | 8.03 | ||||||||||||
300 | 244,653 | (80,376 | ) | (24.73 | ) | 8.84 | ||||||||||||
200 | 276,441 | (48,588 | ) | (14.95 | ) | 9.75 | ||||||||||||
100 | 304,179 | (20,850 | ) | (6.41 | ) | 10.48 | ||||||||||||
| 325,029 | | | 10.96 | ||||||||||||||
(100 | ) | 327,497 | 2,468 | 0.76 | 10.89 | |||||||||||||
(200 | ) | 326,489 | 1,460 | 0.45 | 10.74 |
Page 62 of 69
Page 63 of 69
Page 64 of 69
Item 1. | Legal Proceedings |
Item 1.A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Total Number of | Maximum Number | |||||||||||||||
Shares Purchased as | of Shares that May | |||||||||||||||
Total Number | Average | Part of Publicly | Yet Be Purchased | |||||||||||||
of Shares | Price Paid per | Announced Plans or | Under the Plans or | |||||||||||||
Period | Purchased | Share | Programs | Programs | ||||||||||||
July 1, 2011
to July 31, 2011 |
0 | $ | | 0 | 0 | |||||||||||
August 1, 2011 to August 31, 2011 |
0 | | 0 | 1,741,975 | ||||||||||||
September 1, 2011 to September
30, 2011 |
577,000 | 11.70 | 577,000 | 1,164,975 | ||||||||||||
Total |
577,000 | $ | 11.70 | 577,000 | 1,164,975 | |||||||||||
Item 3. | Defaults upon Senior Securities |
Item 4. | (Removed and Reserved) |
Item 5. | Other Information |
Page 65 of 69
Item 6. | Exhibits |
Exhibit | ||||
Number | Description | |||
2.1 | Amended and Restated Plan of Conversion and Reorganization of
ViewPoint MHC (incorporated herein by reference to Exhibit 2.1 to the
Registrants Annual Report on Form 10-K filed with the SEC on March
4, 2010 (File No. 001-32992)) |
|||
3.1 | Charter of the Registrant (incorporated herein by reference to
Exhibit 3.1 to the Registrants Registration Statement on Form S-1,
as amended (File No. 333-165509)) |
|||
3.2 | Bylaws of the Registrant (incorporated herein by reference to
Exhibit 3.2 to the Registrants Registration Statement on Form S-1
(File No. 333-165509)) |
|||
4.0 | Certificate of Registrants Common Stock (incorporated herein by
reference to Exhibit 4.0 to the Registrants Registration Statement
on Form S-1, as amended (File No. 333-165509)) |
|||
10.1 | Employment Agreement by and between the Registrant and Garold R. Base
(incorporated herein by reference to Exhibit 10.1 to the Registrants
Current Report on Form 8-K filed with the SEC on October 4, 2006
(File No. 001-32992)) |
|||
10.2 | Amendment to Employment Agreement by and between the Registrant and
Garold R. Base (incorporated herein by reference to Exhibit 10.1 to
the Registrants Current Report on Form 8-K filed with the SEC on
January 10, 2008 (File No. 001-32992)) |
|||
10.3 | Employment Agreement by and between ViewPoint Bank, the Registrants
wholly owned operating subsidiary, and Garold R. Base (incorporated
herein by reference to Exhibit 10.2 to the Registrants Current
Report on Form 8-K filed with the SEC on October 4, 2006 (File No.
001-32992)) |
|||
10.4 | Amendment to Employment Agreement by and between ViewPoint Bank, the
Registrants wholly owned operating subsidiary, and Garold R. Base
(incorporated herein by reference to Exhibit 10.2 to the Registrants
Current Report on Form 8-K filed with the SEC on January 10, 2008
(File No. 001-32992)) |
|||
10.5 | Amendment to Employment Agreement by and between ViewPoint Bank, the
Registrants wholly owned operating subsidiary, and Garold R. Base
(incorporated herein by reference to Exhibit 10.1 to the Registrants
Current Report on Form 8-K filed with the SEC on March 6, 2008 (File
No. 001-32992)) |
|||
10.6 | Form of Severance Agreement between ViewPoint Bank and the following
executive officers: Pathie E. McKee, Mark E. Hord, James C. Parks and
Mark L. Williamson (incorporated herein by reference to Exhibit 10.1
to the Registrants Current Report on Form 8-K filed with the SEC on
February 17, 2011 (File No. 001-34737)) |
|||
10.7 | Amendment to Form of Severance Agreement between ViewPoint Bank and
the following executive officers: Pathie E. McKee, Mark E. Hord,
James C. Parks and Mark L. Williamson (incorporated herein by
reference to the Registrants Current Report on Form 8-K filed with
the SEC on September 6, 2011 (File No. 001-34737)) |
|||
10.8 | Summary of Director Board Fee Arrangements (incorporated herein by
reference to Exhibit 10.4 to the Registrants Quarterly Report on
Form 10-Q filed with the SEC on August 9, 2007 (File No. 001-32992)) |
|||
10.9 | ViewPoint Bank Deferred Compensation Plan (incorporated herein by
reference to Exhibit 10.7 to the Registrants Registration Statement
on Form S-1, as amended (File No. 0-24566-01)) |
|||
10.10 | Amended and Restated ViewPoint Bank Supplemental Executive Retirement
Plan (incorporated herein by reference to Exhibit 10.8 to the
Registrants Registration Statement on Form S-1, as amended (File No.
0-24566-01)) |
|||
10.11 | Executive Officer Incentive Plan (incorporated herein by reference to
Exhibit 10.1 to the Registrants Current Report on Form 8-K filed
with the SEC on January 26, 2011 (File No. 001-34737)) |
|||
10.12 | Form of promissory note between ViewPoint Financial Group and four
lenders, totaling $10 million (incorporated herein by reference to
Exhibit 10.1 to the Registrants Current Report on Form 8-K filed
with the SEC on October 22, 2009 (File No. 001-32992)) |
Page 66 of 69
Exhibit | ||||
Number | Description | |||
11 | Statement regarding computation of per share earnings (See Note 3 of
the Condensed Notes to Unaudited Consolidated Interim Financial
Statements included in this Form 10-Q). |
|||
31.1 | Rule 13a 14(a)/15d 14(a) Certification (Chief Executive Officer) |
|||
31.2 | Rule 13a 14(a)/15d 14(a) Certification (Chief Financial Officer) |
|||
32 | Section 1350 Certifications |
|||
101 | + ++ | The following materials from the ViewPoint Financial Group, Inc.
Quarterly Report on Form 10-Q for the quarter ended September 30,
2011, formatted in eXtensible Business Reporting Language (XBRL): (i)
the Consolidated Balance Sheets, (ii) the Consolidated Statements of
Income, (iii) the Consolidated Statements of Comprehensive Income,
(iv) the Consolidated Statements of Changes in Shareholders Equity,
(vi) the Consolidated Statements of Cash Flows and (vii) related
notes, tagged as blocks of text. |
+ | This exhibit shall not be deemed filed for purposes of Section 18
of the Securities Exchange Act of 1934, or otherwise subject to the
liability of that section, and shall not be deemed to be incorporated
by reference into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934. |
|
++ | As provided in Rule 406T of Regulation S-T, this information is
furnished and not filed for purposes of Sections 11 and 12 of the
Securities Act of 1933 and Section 18 of the Securities Exchange Act
of 1934. |
Page 67 of 69
ViewPoint Financial Group, Inc. |
||||
(Registrant) |
||||
Date: October 27, 2011
|
/s/ Garold R. Base
|
|||
President and Chief Executive Officer | ||||
(Duly Authorized Officer) | ||||
Date: October 27, 2011
|
/s/ Pathie E. McKee
|
|||
Executive Vice President, Chief Financial Officer and Treasurer |
||||
(Principal Financial and Accounting Officer) |
Page 68 of 69
Exhibits: | ||||
31.1 | Certification of the Chief Executive Officer |
|||
31.2 | Certification of the Chief Financial Officer |
|||
32.0 | Section 1350 Certifications |
|||
101 | + ++ | The following materials from the ViewPoint Financial Group, Inc. Quarterly Report on Form
10-Q for the quarter ended September 30, 2011, formatted in XBRL: (i) the Consolidated Balance
Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of
Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders Equity,
(vi) the Consolidated Statements of Cash Flows and (vii) related notes, tagged as blocks of
text. |
+ | This exhibit shall not be deemed filed for purposes of Section 18 of the
Securities Exchange Act of 1934, or otherwise subject to the liability of that
section, and shall not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933 or the Securities Exchange Act of 1934. |
|
++ | As provided in Rule 406T of Regulation S-T, this information is furnished and not
filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section
18 of the Securities Exchange Act of 1934. |
Page 69 of 69
1. | I have reviewed this Quarterly Report on Form 10-Q of ViewPoint Financial Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in
this report fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
4. | The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurances regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting. |
5. | The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent
functions): |
a) | All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and |
b) | Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting. |
Date: October 27, 2011
|
/s/ Garold R. Base
|
|||
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of ViewPoint Financial Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in
this report fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
4. | The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurances regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting. |
5. | The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent
functions): |
a) | All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and |
b) | Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting. |
Date: October 27, 2011
|
/s/ Pathie E. McKee
|
|||
Executive Vice President, Chief Financial Officer and Treasurer |
1) | The Report fully complies with the requirements of Section 13(a) of
the Securities Exchange Act of 1934; and |
||
2) | The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of
the Company as of the dates and for the periods presented in the
financial statements included in such Report. |
Date: October 27, 2011
|
By: | /s/ Garold R. Base
Chief Executive Officer |
||||
Date: October 27, 2011
|
By: | /s/ Pathie E. McKee | ||||
Pathie E. McKee, Executive Vice President, | ||||||
Chief Financial Officer and Treasurer |
Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
ASSETS | ||
Fair value of securities held to maturity | $ 557,586 | $ 434,296 |
Loans held for sale | 9,899 | 16,877 |
Loans held for investment (net of allowance for loan losses) | 16,535 | 14,847 |
Deposits | ||
FHLB advances (net of prepayment penalty) | $ 4,481 | $ 5,259 |
Shareholders' equity | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 34,262,491 | 34,839,491 |
Unearned Employee Stock Ownership Plan, shares | 2,148,282 | 2,286,428 |
Goodwill | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Goodwill [Abstract] | |
Goodwill |
15. Goodwill
Goodwill is evaluated for impairment on an annual basis in the fourth quarter. According to ASC
350-20-35-30, goodwill shall be tested for impairment between annual tests if an event occurs or
circumstances change that would more likely than not reduce the fair value below its carrying
amount. Adverse changes in the economic environment, declining operations, or other factors could
result in a decline in the implied fair value of goodwill. A goodwill impairment test includes two
steps. Step One, used to identify potential impairment, compares the estimated fair value of a
reporting unit with its carrying amount, including goodwill. If the estimated fair value of a
reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not
impaired. If the carrying amount of a reporting unit exceeds its estimated fair value, the second
step of the goodwill impairment test is performed to measure the amount of impairment loss, if any.
Step Two of the goodwill impairment test compares the implied estimated fair value of reporting
unit goodwill with the carrying amount of that goodwill. If the carrying amount of goodwill for
that reporting unit exceeds the implied fair value of that unit’s goodwill, an impairment loss is
recognized in an amount equal to that excess.
On September 1, 2007, the Company, through the Bank’s wholly-owned subsidiary, Community Financial
Services, Inc. (now known as VPM), completed its acquisition of substantially all of the assets and
the loan origination business of Bankers Financial Mortgage Group, Ltd. The terms of the agreement
provided for an initial payment of an amount equal to the net book value of the purchased assets
plus $1,000. The excess of the cost of the acquired entity over the net of the amounts assigned to
assets acquired was recognized as goodwill in the amount of $1,000. An additional $89 of goodwill
was recognized in October 2007 due to further expenses associated with the acquisition, resulting
in total goodwill of $1,089.
Due to the downturn in current mortgage market conditions and the loss of key production personnel,
an evaluation of goodwill was performed outside of the normal annual cycle. For purposes of
performing Step One of the goodwill impairment test, the fair value was determined using the income
approach by discounting the next five years projected cash flows. The assumptions in the model
considered market economic and industry forecasts and management’s judgment. Based on the estimated
results in the Step Two analysis, a goodwill impairment of $271 was recognized during the nine
months ended September 30, 2011. There was no goodwill
impairment recognized during the three months ended
September 30, 2011.
Deterioration in economic market
conditions, changes in key personnel, increased estimates of the effects of recent
regulatory or legislative changes, or additional regulatory or legislative changes may result in
declines in projected business performance beyond management’s current expectations. Such declines
in business performance could cause the estimated fair value of VPM’s associated goodwill to
decline, which could result in an impairment charge to earnings in a future period related to some
portion of the associated goodwill.
|
Document and Entity Information (USD $) In Millions, except Share data | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Oct. 27, 2011 | Jun. 30, 2010 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ViewPoint Financial Group Inc. | ||
Entity Central Index Key | 0001487052 | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2011 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q3 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 140.7 | ||
Entity Common Stock, Shares Outstanding | 33,906,691 |
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Dividends | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Share Transactions/Dividends [Abstract] | |
Dividends |
4. Dividends
On January 20, 2011, the Company’s Board of Directors declared a quarterly cash dividend of $0.05
per share. The dividend was paid on February 17, 2011, to the Company’s shareholders of record as
of February 3, 2011. On April 21, 2011, the Company’s Board of Directors declared a quarterly cash
dividend of $0.05 per share. The dividend was paid on May 19, 2011, to the Company’s shareholders
of record as of May 5, 2011. On July 21, 2011, the Company’s Board of Directors declared a
quarterly cash dividend of $0.05 per share. The dividend was paid on
August 18, 2011, to the
Company’s shareholders of record as of August 4, 2011. The Company’s Board of Directors meeting to
declare the dividend for the fourth quarter of 2011 will be held on October 27 and the dividend
will be announced thereafter.
|
Recent Accounting Developments | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Recent Accounting Developments [Abstract] | |
Recent Accounting Developments |
17. Recent Accounting Developments
In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards
Update (“ASU”) 2011-08, Intangibles–Goodwill and Other (Topic 350): Testing Goodwill for
Impairment. This ASU simplifies how entities test goodwill for impairment by permitting an entity
to first assess qualitative factors to determine whether it is more likely than not that the fair
value of a reporting unit is less than its carrying amount as a basis for determining whether it is
necessary to perform the two-step goodwill impairment test described in Topic 350. The
more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Previous
guidance under Topic 350 required an entity to test goodwill for impairment on at least an annual
basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill
(step one). If the fair value of a reporting unit is less than its carrying amount, then the second
step of the test must be performed to measure the amount of the impairment loss, if any. Under the
amendments in this Update, an entity is not required to calculate the fair value of a reporting
unit unless the entity determines that it is more likely than not that its fair value is less than
its carrying amount. This ASU is effective for annual and interim goodwill impairment tests
performed for fiscal years beginning after December 15, 2011. Early adoption is permitted,
including for interim goodwill impairment tests performed as of a date before September 15, 2011,
if an entity’s financial statements for the most recent annual or interim period have not yet been
issued. The Company is currently evaluating this guidance and does not expect the adoption of this
ASU to have a significant impact to the Company’s financial statements.
|
Repurchase Agreement | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Repurchase Agreement [Abstract] | |
Repurchase Agreement |
9. Repurchase Agreement
In April 2008, the Company entered into a ten-year term structured repurchase callable agreement
with Credit Suisse Securities (U.S.A.) LLC for $25,000 to leverage the balance sheet and reduce the
cost of funds. The interest rate was fixed at 1.62% for the first year of the agreement. After
the first year, the interest rate adjusts quarterly to 6.25% less the three month Libor rate,
subject to a lifetime cap of 3.22%. The rate was 3.22% at
September 30, 2011, and December 31,
2010. The securities sold under agreement to repurchase had an average balance of $31,818 and an
average interest rate of 1.76% during the nine months ended September 30, 2011. The maximum
month-end balance during the nine months ended September 30, 2011 was $32,501. At maturity, the
securities underlying the agreement are returned to the Company. The fair value of these
securities sold under the agreement to repurchase was $32,179 at September 30, 2011. The Company
retains the right to substitute securities under the terms of the agreement.
|
Loans | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Loans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans |
6. Loans
Loans consist of the following:
Activity in the allowance for loan losses for the three and nine months ended September 30, 2011
and 2010, segregated by portfolio segment and evaluation for impairment is as follows:
The allowance for loan losses and related provision expense are susceptible to change if the credit
quality of our loan portfolio changes, which is evidenced by many
factors including but not limited to charge-offs and
non-performing loan trends. Generally, one- to four-family residential real estate lending has a
lower credit risk profile compared to consumer lending (such as automobile or personal line of
credit loans). Commercial real estate and commercial and industrial lending, however, have higher
credit risk profiles than consumer and one- to four- family residential real estate loans due to
these loans being larger in amount and non-homogenous in structure and term. Changes in economic
conditions, the mix and size of the loan portfolio and individual borrower conditions can
dramatically impact our level of allowance for loan losses in relatively short periods of time.
Management evaluates current information and events regarding a borrower’s ability to repay its
obligations and considers a loan to be impaired when the ultimate collectability of amounts due,
according to the contractual terms of the loan agreement, is in doubt. If an impaired loan is
collateral-dependent, the fair value of the collateral, less the estimated cost to sell, is used to
determine the amount of impairment. For impaired loans, the amount of the impairment
can be adjusted, based on current data, until such time as the actual basis is established by
acquisition of the collateral or collected. Impairment losses are reflected in the allowance for loan losses
through a charge to the provision for loan losses. Subsequent recoveries are credited to the
allowance for loan losses. Cash receipts for accruing loans are applied to principal and interest
under the contractual terms of the loan agreement. Cash receipts on impaired loans for which the
accrual of interest has been discontinued are applied first to principal and then to interest
income.
The allowance for loan losses is maintained to cover losses that are estimated in accordance with
U.S. generally accepted accounting principles. It is our estimate of credit losses inherent in our
loan portfolio at each balance sheet date. Our methodology for analyzing the allowance for loan
losses consists of general and specific components.
For the general component, we stratify the loan portfolio into homogeneous groups of loans that
possess similar loss potential characteristics and apply a loss ratio to these groups of loans to
estimate the credit losses in the loan portfolio. We use both historical loss ratios and
qualitative loss factors assigned to major loan collateral types to establish loss allocations.
The historical loss ratio is generally defined as a percentage of net annual loan losses to average
loans outstanding. Qualitative loss factors are based on management’s judgment of company-specific
data and external economic indicators, which may not yet be reflected in the historical loss
ratios, and how this information could impact the Company’s specific loan portfolios. The
Allowance for Loan Loss Committee sets and adjusts qualitative loss factors by reviewing changes in
loan composition and the seasonality of specific portfolios. The Allowance for Loan Loss Committee
also considers credit quality and trends relating to delinquency, non-performing and/or classified
loans and bankruptcy within the Company’s loan portfolio when evaluating qualitative loss factors.
Additionally, the Allowance for Loan Loss Committee adjusts qualitative factors to account for the
potential impact of external economic factors, including the unemployment rate, housing price,
vacancy rates and inventory levels specific to our primary market area.
For the specific component, the allowance for loan losses on individually analyzed impaired loans
includes loans secured by mortgage and commercial and industrial loans where management has
concerns about the borrower’s ability to repay. Loss estimates include the negative difference, if
any, between the current fair value of the collateral or the estimated discounted cash flows and
the loan amount due.
Impaired
loans at September 30, 2011, and December 31, 2010, were as follows:
Average impaired loans outstanding during the three and nine months ended September 30, 2010,
totaled $17,946 and $14,951, respectively.
Loans that are past due 30 days or greater are considered delinquent. Interest income on loans is
discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in
process of collection. Consumer loans are typically charged off no later than 120 days past due.
Past due status is based on the contractual terms of the loan. In all cases, loans are placed on
nonaccrual or charged-off at an earlier date if collection of principal or interest is considered
doubtful. Nonaccrual loans include both smaller balance homogeneous loans that are collectively
evaluated for impairment and individually classified impaired loans. A loan is moved to nonaccrual
status in accordance with the Company’s policy, typically after 90 days of non-payment.
All interest accrued but not received for loans placed on nonaccrual is reversed against interest
income. Interest received on such loans is accounted for on the cash-basis or cost-recovery
method, until qualifying for return to accrual status. Loans are returned to accrual status when
all the principal and interest amounts contractually due are brought current and future payments
are reasonably assured.
Non-performing (nonaccrual) loans were as follows. There were no loans past due over 90 days that
were still accruing interest at September 30, 2011, or December 31, 2010.
A modified loan is considered a troubled debt restructuring (“TDR”) when two conditions are met:
1) the borrower is experiencing financial difficulty and 2) concessions are made by the Company
that would not otherwise be considered for a borrower or collateral with similar credit risk characteristics.
Modifications to loan terms may include a modification of the contractual interest rate to a
below-market rate (even if the modified rate is higher than the
original rate), forgiveness of
accrued interest, forgiveness of a portion of principal, an extended repayment period or a deed in
lieu of foreclosure or other transfer of assets other than cash to fully or partially satisfy a
debt. The Company’s policy is to place all TDRs on nonaccrual for a minimum period of six months.
Loans qualify for return to accrual status once they have demonstrated performance with the
restructured terms of the loan agreement for a minimum of six months and the collection of
principal and interest under the revised terms is deemed probable. TDR classification may be
removed if the borrower demonstrates compliance with the modified terms and the restructuring
agreement specifies a market rate of interest equal to that which would be provided to a borrower
with similar credit risk at the time of the restructuring.
At September 30, 2011, $10,333 of the $17,439 nonaccrual loans reported were TDRs. An additional
$3,188 of performing TDRs were not included as non-performing loans at September 30, 2011. These
loans have been performing under the restructured terms for at least six months and the Company is
accruing interest on these loans. At December 31, 2010, $8,669 of the $17,628 reported for
nonaccrual loans were TDRs. An additional $1,287 of performing TDRs were not included as
non-performing loans at December 31, 2010.
The Company set aside $1,530 and $947 of specific reserves on non-performing TDRs at September 30,
2011, and December 31, 2010, respectively. All TDRs are individually analyzed for impairment.
Loss estimates include the negative difference, if any, between the current fair value of the
collateral or the estimated discounted cash flows and the loan amount due. There were no
outstanding commitments to lend additional funds to borrowers with loans whose terms have been
modified in TDRs. The following table provides information on loans modified as a TDR during the
three and nine months ended September 30, 2011. This table does not reflect the end of period
recorded investment.
The following table provides information on how loans were modified as a TDR during the three
and nine months ended September 30, 2011:
There were no loans modified as a TDR within the previous 12 months that had a payment default
during the three and nine months ended September 30, 2011. For disclosure purposes a payment
default is defined as a loan that was 90 days or more past due.
Below is an analysis of the age of recorded investment in loans that were past due at September 30,
2011, and December 31, 2010:
There were no accruing loans that were greater than 90 days past due at September 30, 2011, or
December 31, 2010.
For loans collateralized by real property and commercial and industrial loans, credit exposure is
monitored by internally assigned grades used for classification of loans. A loan is considered
“special mention” if it is a potential problem loan that is currently performing and does not meet
the criteria for impairment, but where some concern exists. A loan is considered “substandard” if
it is inadequately protected by the current net worth and paying capacity of the obligor or of the
collateral pledged, if any. “Substandard” loans include those characterized by the “distinct
possibility” that the insured institution will sustain “some loss” if the deficiencies are not
corrected. Loans classified as “doubtful” have all of the weaknesses of those classified as
“substandard,” with the added characteristic that the weaknesses present make “collection or
liquidation in full,” on the basis of currently existing facts, conditions and values, “highly
questionable and improbable.” All other loans that do not fall into the above mentioned categories
are considered “pass” loans. Updates to internally assigned grades are made monthly and/or upon
significant developments.
For consumer loans, credit exposure is monitored by payment history of the loans. Non-performing
consumer loans are on nonaccrual status and are generally greater than 90 days past due.
The recorded investment in loans by credit quality indicators at September 30, 2011, and December
31, 2010 are as follows:
Real Estate and Commercial and Industrial Credit Exposure
Credit Risk Profile by Internally Assigned Grade
Consumer Credit Exposure
Credit Risk Profile Based on Payment Activity
|
Share-Based Compensation | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation |
11. Share-Based Compensation
In May 2007, ViewPoint Financial Group’s shareholders approved the ViewPoint Financial Group 2007
Equity Incentive Plan, which was assumed by the Company in connection with the Conversion. The
Company is accounting for this plan under ASC 718, Compensation – Stock Compensation, which
requires companies to record compensation cost for share-based payment transactions with employees
in return for employment service. Under this plan, 1,624,690 options to purchase shares of common
stock and 649,877 restricted shares of common stock were made available.
The compensation cost that has been charged against income for the restricted stock portion of the
Equity Incentive Plan was $356 and $340 for the three months ended September 30, 2011 and 2010,
respectively. The compensation cost that has been charged against income for the stock option
portion of the Equity Incentive Plan was $105 and $102 for the three months ended September 30,
2011 and 2010, respectively. The total income tax benefit recognized in the income statement for
share-based compensation was $162 and $155 for the three months ended September 30, 2011 and 2010,
respectively.
The compensation cost that has been charged against income for the restricted stock portion of the
Equity Incentive Plan was $1,059 and $1,126 for the nine months ended September 30, 2011 and 2010,
respectively. The compensation cost that has been charged against income for the stock option
portion of the Equity Incentive Plan was $340 and $241 for the nine months ended September 30, 2011
and 2010, respectively. The total income tax benefit recognized in the income statement for
share-based compensation was $490 and $478 for the nine months ended September 30, 2011 and 2010,
respectively.
A summary of the status of the non-vested shares of the restricted stock portion of the Equity
Incentive Plan at September 30, 2011, is presented below:
The grant date fair value is based on the last sale price as quoted on the NASDAQ Stock Market on
the grant date. As of September 30, 2011, there was $931 of total unrecognized compensation
expense related to non-vested shares awarded under the restricted stock portion of the Equity
Incentive Plan. That expense is expected to be recognized over a weighted-average period of 0.67
year.
A summary of the activity under the stock option portion of the Equity Incentive Plan as of
September 30, 2011, and changes for the nine months then ended is presented below.
As of September 30, 2011, there was $692 of total unrecognized compensation expense related to
non-exercisable shares awarded under the stock option portion of the Equity Incentive Plan. That
expense is expected to be recognized over a weighted-average period of 2.3 years.
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures |
7. Fair Value Disclosures
ASC 820, “Fair Value Measurements and Disclosures”, establishes a fair value hierarchy which
requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. The standard describes three levels of inputs that may be used
to measure fair value:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that
the entity has the ability to access as of the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices
for similar assets or liabilities; quoted prices in markets that are not active; or other inputs
that are observable or can be corroborated by observable market data.
Level 3: Prices or valuation techniques that require inputs that are both significant and
unobservable in the market. These instruments are valued using the best information
available, some of which is internally developed, and reflects a reporting entity’s own
assumptions about the risk premiums that market participants would generally require and the
assumptions they would use.
The fair values of securities available for sale are determined by obtaining quoted prices on
nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a
mathematical technique widely used in the industry to value debt securities without relying
exclusively on quoted prices for the specific securities but rather by relying on the securities’
relationship to other benchmark quoted securities (Level 2 inputs).
The Company elected the fair value option for certain residential mortgage loans held for sale
originated after May 1, 2010 in accordance with Statement of Financial Accounting Standard No. 159,
“The Fair Value Option for Financial Assets and Financial Liabilities” (as codified in ASC 820.)
This election allows for a more effective offset of the changes in fair values of the loans and the
derivative instruments used to economically hedge them without the burden of complying with the
requirements for hedge accounting under ASC 815, “Derivatives and Hedging.” The Company has not
elected the fair value option for other loans held for sale primarily because they are not
economically hedged using derivative instruments.
Fair values of certain loans held for sale are based on traded market prices of similar assets,
where available, and/or discounted cash flows at market interest rates. At September 30, 2011,
certain loans held for sale for which the fair value option was elected had an aggregate fair value
of $9,899 and an aggregate outstanding principal balance of $9,714 and were recorded in mortgage
loans held for sale in the consolidated balance sheet. At December 31, 2010, certain loans held
for sale for which the fair value option was elected had an aggregate fair value of $16,877 and an
aggregate outstanding principal balance of $17,092.
Interest income on certain mortgage loans held for sale is recognized based on contractual rates
and reflected in interest income on mortgage loans held for sale in the consolidated income
statement. Net gains of $591 and $964 resulting from changes in fair value of these loans were
recorded in mortgage income during the three and nine months ended September 30, 2011,
respectively, offset by economic hedging losses in the amounts of $655 and $915, respectively.
Mortgage loans held for sale for which the fair value option was elected are typically pooled
together and sold into the mortgage market, depending upon underlying attributes of the loan, such
as agency eligibility, product type, interest rate, and credit quality. These mortgage loans held
for sale are valued predominantly using quoted market prices for similar instruments. As these
prices are derived from quoted market prices, the Company classifies these valuations as Level 2 in
the fair value disclosures.
The Company enters into a variety of derivative financial instruments as part of its hedging
strategy. The majority of these derivatives are exchange-traded or traded within highly active
dealer markets. In order to determine the fair value of these instruments, the Company utilizes
the exchange price or dealer market price for the particular derivative contract; therefore, these
contracts are classified as Level 2.
Assets and Liabilities Measured on a Recurring Basis
Assets and liabilities measured at fair value on a recurring basis are summarized below:
Assets and Liabilities Measured on a Non-Recurring Basis
Assets and liabilities measured at fair value on a non-recurring basis are summarized below:
Impaired loans, which primarily consist of commercial and one- to four-family real estate,
home equity/home improvement and commercial and industrial loans, are measured for impairment using
the fair value of the collateral (as determined by third party appraisals using recent comparative
sales data and other Level 3 valuation inputs) for collateral dependent loans. Impaired loans with
an allocated allowance for loan losses at September 30, 2011, had a carrying amount of $12,295,
which is made up of the outstanding balance of $15,113, net of a valuation allowance of $2,818.
Impaired loans with an allocated allowance for loan losses at December 31, 2010, had a carrying
amount of $11,630, which is made up of the outstanding balance of $13,637, net of a valuation
allowance of $2,007.
At September 30, 2011, other real estate owned, which is measured at the lower of book or fair
value less costs to sell, had a net book value of $2,098, which is made up of the outstanding
balance of $3,139, net of a valuation allowance of $1,041. Other real estate owned that was valued
using third party appraisals less costs to sell is classified as Level 2, while other real estate
owned that was valued using third party appraisals less costs to sell and other Level 3 valuation
inputs is classified as Level 3. These Level 3 valuation inputs include discounts of the appraised
value based on real estate market activity. Of the $1,041, $666 resulted from write-downs during
the nine months ended September 30, 2011. At December 31, 2010, other real estate owned, which is
measured at the lower of book or fair value less costs to sell, had a net book value of $2,668,
which is made up of the outstanding balance of $3,120 net of a valuation allowance of $452,
resulting in net write-downs of $502 for the year ended December 31, 2010.
Activity for other real estate owned for the three and nine months ended September 30, 2011 and
2010, and the related valuation allowance follows:
Carrying amount and estimated fair values of financial instruments were as follows:
The methods and assumptions used to estimate fair value are described as follows:
Estimated fair value is the carrying amount for cash and cash equivalents, bank-owned life
insurance and accrued interest receivable and payable. For loans, fair value is based on
discounted cash flows using current market offering rates, estimated life, and applicable credit
risk. For deposits and borrowings, fair value is calculated using the FHLB advance curve to
discount cash flows for the estimated life for deposits and according to the contractual repayment
schedule for borrowings. Fair value of debt is based on discounting the estimated cash flows using
the current rate at which similar borrowings would be made with similar terms and remaining
maturities. It was not practicable to determine the fair value of FHLB stock due to restrictions
on its transferability. The fair value of off-balance sheet items is based on the current fees or
costs that would be charged to enter into or terminate such arrangements and are not considered
significant to this presentation.
|
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