LEGACYTEXAS FINANCIAL GROUP, INC. PLANO, Texas, Oct. 16, 2018 /PRNewswire/ -- LegacyTexas Financial Group, Inc. (Nasdaq: LTXB) (the "Company"), the holding company for LegacyTexas Bank (the "Bank"), today announced record net income of $42.8 million for the third quarter of 2018, an increase of $15.0 million from the second quarter of 2018 and an increase of $14.1 million from the third quarter of 2017.
"What a fabulous quarter for our company, as we continued to grow our customer base and deliver on our strategic initiatives," said President and CEO Kevin Hanigan. "By delivering what our customers need, we have produced record levels of earnings and return on assets for our shareholders."
Third Quarter 2018 Performance Highlights
- Assets of $9.08 billion generated basic earnings per share for the third quarter of 2018 of $0.91 on a GAAP basis and $0.92 on a core (non-GAAP) basis.*
- Non-performing assets totaled $18.3 million at September 30, 2018, a decline of $8.7 million, or 32.2%, from June 30, 2018. Non-performing loans to total loans held for investment improved to 0.22% at September 30, 2018, compared to 0.25% at June 30, 2018 and 0.99% at September 30, 2017.
- The Company's efforts to grow non-interest-bearing demand deposits resulted in a linked-quarter increase in these deposits of $76.7 million to $1.80 billion at September 30, 2018. Non-interest-bearing deposits totaled 26.5% of total deposits at September 30, 2018.
- Return on average assets on an annualized basis improved to an all-time high of 1.87% for the quarter ended September 30, 2018, compared to 1.24% for the quarter ended June 30, 2018, while core (non-GAAP) return on average assets for the quarter ended September 30, 2018 was 1.88%, compared to 1.24% for the quarter ended June 30, 2018.*
- GAAP efficiency ratio improved to a record 42.66% for the quarter ended September 30, 2018, compared to 44.51% for the quarter ended June 30, 2018, while core (non-GAAP) efficiency ratio improved to 42.46% for the quarter ended September 30, 2018, compared to 44.44% for the quarter ended June 30, 2018.*
*See the section labeled "Supplemental Information- Non-GAAP Financial Measures" at the end of this document.
Financial Highlights | |||||||||||
At or For the Quarters Ended | |||||||||||
(unaudited) | Sep 30, 2018 | Jun 30, 2018 | Sep 30, 2017 | ||||||||
(Dollars in thousands, except per share amounts) | |||||||||||
Net interest income | $ | 85,667 | $ | 83,929 | $ | 78,964 | |||||
Provision for credit losses | 2,656 | 17,478 | 7,157 | ||||||||
Non-interest income | 13,227 | 10,852 | 12,226 | ||||||||
Non-interest expense | 42,192 | 42,191 | 40,295 | ||||||||
Income tax expense | 11,225 | 7,275 | 15,029 | ||||||||
Net income | $ | 42,821 | $ | 27,837 | $ | 28,709 | |||||
Basic earnings per common share | $ | 0.91 | $ | 0.59 | $ | 0.61 | |||||
Basic core (non-GAAP) earnings per common share1 | $ | 0.92 | $ | 0.59 | $ | 0.61 | |||||
Weighted average common shares outstanding - basic | 47,105,655 | 47,000,405 | 46,664,233 | ||||||||
Estimated Tier 1 common equity risk-based capital ratio2 | 10.46 | % | 9.78 | % | 9.17 | % | |||||
Total equity to total assets | 11.45 | % | 10.83 | % | 10.48 | % | |||||
Tangible common equity to tangible assets - Non-GAAP1 | 9.67 | % | 9.07 | % | 8.67 | % | |||||
1 | See the section labeled "Supplemental Information - Non-GAAP Financial Measures" at the end of this document. |
2 | Calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve. |
Core (non-GAAP) net income (which is net income adjusted for the impact of infrequent or non-recurring items) totaled $43.2 million for the quarter ended September 30, 2018, up $15.2 million from the second quarter of 2018 and up $14.7 million from the third quarter of 2017. Basic earnings per share for the quarter ended September 30, 2018 was $0.91, an increase of $0.32 from the second quarter of 2018 and an increase of $0.30 from the third quarter of 2017. Basic core (non-GAAP) earnings per share for the third quarter of 2018 was $0.92, up $0.33 from the second quarter of 2018 and up $0.31 from the third quarter of 2017. The reconciliation of non-GAAP measures, which the Company believes facilitates the assessment of its banking operations and peer comparability, is included in tabular form at the end of this release.
Net Interest Income and Net Interest Margin | |||||||||||
For the Quarters Ended | |||||||||||
(unaudited) | September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||
(Dollars in thousands) | |||||||||||
Interest income: | |||||||||||
Loans held for investment, excluding Warehouse Purchase Program loans | $ | 89,034 | $ | 86,105 | $ | 77,366 | |||||
Warehouse Purchase Program loans | 12,938 | 12,137 | 11,493 | ||||||||
Loans held for sale | 295 | 328 | 225 | ||||||||
Securities | 4,512 | 4,324 | 3,855 | ||||||||
Interest-earning deposit accounts | 1,368 | 1,097 | 1,524 | ||||||||
Total interest income | $ | 108,147 | $ | 103,991 | $ | 94,463 | |||||
Net interest income | $ | 85,667 | $ | 83,929 | $ | 78,964 | |||||
Net interest margin | 3.90 | % | 3.93 | % | 3.71 | % | |||||
Selected average balances: | |||||||||||
Total earning assets | $ | 8,736,076 | $ | 8,566,131 | $ | 8,451,478 | |||||
Total loans held for investment | 7,758,802 | 7,636,235 | 7,331,173 | ||||||||
Total securities | 678,483 | 667,183 | 652,841 | ||||||||
Total deposits | 6,851,449 | 6,859,944 | 6,632,649 | ||||||||
Total borrowings | 1,154,079 | 1,018,945 | 1,178,031 | ||||||||
Total non-interest-bearing demand deposits | 1,752,095 | 1,694,082 | 1,481,654 | ||||||||
Total interest-bearing liabilities | 6,253,433 | 6,184,807 | 6,329,026 | ||||||||
Net interest income for the quarter ended September 30, 2018 was $85.7 million, a $1.7 million, or 2.1%, increase from the second quarter of 2018 and a $6.7 million, or 8.5%, increase from the third quarter of 2017. The $1.7 million increase from the second quarter of 2018 was primarily driven by higher yields earned on all loan portfolios, as well as increased volume in all loan portfolios with the exception of commercial real estate loans and loans held for sale. The average balance of commercial and industrial loans increased by $85.8 million from the second quarter of 2018, while the average yield earned on this portfolio increased by seven basis points for the same period, resulting in a $1.9 million increase in interest income. A six basis point increase in the average yield earned on the commercial real estate portfolio from the second quarter of 2018 offset a $38.3 million decline in the average balance of the portfolio, resulting in a $365,000 increase in interest income. The average balance of the consumer real estate portfolio increased by $29.6 million from the second quarter of 2018, which drove a $367,000 increase in interest income. The average balance of the construction and land portfolio increased by $11.3 million on a linked-quarter basis, while the average yield earned on this portfolio increased by six basis points from the second quarter of 2018, leading to a $229,000 increase in interest income. Interest income earned on Warehouse Purchase Program loans increased by $801,000 from the second quarter of 2018, as the average balance increased by $22.6 million and the average yield increased by 15 basis points compared to the linked quarter.
Interest income on loans for the third quarter of 2018 included $330,000 in accretion of purchase accounting fair value adjustments on acquired loans, which primarily consisted of $132,000 on acquired commercial real estate loans, $77,000 on acquired commercial and industrial loans and $120,000 on acquired consumer loans.
The $6.7 million increase in net interest income compared to the third quarter of 2017 was primarily due to a $13.2 million increase in interest income on loans, which was driven by increased volume in the commercial real estate, commercial and industrial and consumer real estate loan portfolios, as well as higher yields earned on all loan portfolios. The average balance of commercial and industrial loans increased by $237.7 million from the third quarter of 2017, while the average yield earned on this portfolio increased by 78 basis points for the same period, resulting in a $7.1 million increase in interest income. The average yield earned on the commercial and industrial portfolio for the quarter ended September 30, 2018 was positively impacted by four increases in the Fed Funds rate totaling 100 basis points since September 2017, as well as the resolution of multiple non-performing relationships over the past year. The average balance of commercial real estate loans increased by $162.5 million from the third quarter of 2017, resulting in a $2.7 million increase in interest income, while the average balance of consumer real estate loans increased by $118.4 million for the same period, which led to a $1.8 million increase in interest income.
Although the average balance of Warehouse Purchase Program loans decreased by $95.0 million from the third quarter of 2017, the average yield earned on this portfolio increased by 86 basis points, resulting in a $1.4 million increase in interest income compared to the third quarter of 2017.
Interest expense for the quarter ended September 30, 2018 increased by $2.4 million, or 12.1%, compared to the linked quarter, which was primarily due to higher average savings and money market deposit, time deposit and borrowing rates, as well as increases of $76.8 million, $50.8 million and $135.1 million in the average balances of savings and money market deposits, time deposits and borrowings, respectively, compared to the second quarter of 2018. These linked-quarter increases in interest expense were partially offset by lower interest expense on interest-bearing demand deposits, which was due to a 23 basis point decline in the average rate paid on these deposits, as well as a $194.1 million decrease in the average balance.
Compared to the third quarter of 2017, interest expense for the quarter ended September 30, 2018 increased by $7.0 million, primarily due to higher average deposit and borrowing rates, as well as an increase of $265.4 million in the average balance of time deposits. A $24.0 million decrease in the average balance of borrowings from the third quarter of 2017 was more than offset by a 79 basis point increase in the average rate, resulting in a $2.2 million year-over-year increase in interest expense on borrowed funds.
The net interest margin for the third quarter of 2018 was 3.90%, a three basis point decrease from the second quarter of 2018 and a 19 basis point increase from the third quarter of 2017. The average yield on earning assets for the third quarter of 2018 was 4.92%, a five basis point increase from the second quarter of 2018 and a 48 basis point increase from the third quarter of 2017. The cost of deposits for the third quarter of 2018 was 0.87%, up seven basis points from the linked quarter and up 26 basis points from the third quarter of 2017.
Non-interest Income
Non-interest income for the third quarter of 2018 was $13.2 million, a $2.4 million, or 21.9%, increase from the second quarter of 2018 and a $1.0 million, or 8.2%, increase from the third quarter of 2017. Other non-interest income for the third quarter of 2018 included a $1.5 million net increase in the value of investments in community development-oriented private equity funds used for Community Reinvestment Act purposes (the "CRA Funds"), compared to a $15,000 net decrease in the CRA Funds for the second quarter of 2018. Gain (loss) on sale and disposition of assets for the third quarter of 2018 included $1.3 million in gains on the sale of foreclosed properties, compared to only $9,000 of comparable gains recorded in the second quarter of 2018, which was partially offset by a $471,000 loss recorded on the anticipated disposition of a leased branch location, with the branch expected to close in the fourth quarter of 2018. Service charges and other fees decreased by $218,000 from the second quarter of 2018, primarily resulting from decreased title premiums.
The $1.0 million increase in non-interest income from the third quarter of 2017 was primarily due to a $1.4 million increase in other non-interest income, which included the above-mentioned $1.5 million net increase in the value of CRA Funds recorded in the third quarter of 2018, compared to a $134,000 net increase in the CRA funds recorded in the third quarter of 2017. Gain (loss) on sale and disposition of assets for the third quarter of 2018 included the above-mentioned $1.3 million in gains on the sale of foreclosed properties, compared to a $14,000 comparable loss recorded in the third quarter of 2017. Service charges and other fees decreased by $665,000 from the third quarter of 2017, which was driven by decreases in title premiums, Warehouse Purchase Program fee income, commercial loan fee income (consisting of syndication, arrangement, non-usage and pre-payment fees) and brokerage income, after the Company discontinued its brokerage services in the third quarter of 2017. These decreases in service charges and other fees were partially offset by increased commercial account analysis fee and debit card interchange income recorded in the 2018 period. Net gains on the sale of mortgage loans held for sale during the third quarter of 2018 decreased by $385,000 compared to the third quarter of 2017, which included gains recognized on $52.4 million of one-to four-family mortgage loans that were sold or committed for sale and fair value changes on mortgage derivatives and mortgage fees collected during the third quarter of 2017, compared to $38.7 million for the third quarter of 2018.
Non-interest Expenses
Non-interest expense for the quarter ended September 30, 2018 was $42.2 million, unchanged from the second quarter of 2018 and up $1.9 million, or 4.7%, from the third quarter of 2017. Salaries and employee benefits expense increased by $740,000 from the second quarter of 2018, driven by an increase in performance incentive accruals based on decreased non-performing assets, increased share-based compensation expenses, and lower deferred salary costs related to loan originations that will be accounted for over the lives of the related loans. These increases in salaries and employee benefits expense were partially offset by lower health care costs, severance costs, and commissions related to lower mortgage loan production recorded during the third quarter of 2018. Data processing expense increased by $217,000 from the second quarter of 2018 due to system upgrades, which was offset by decreased advertising expense of $534,000, decreased outside professional services expense of $231,000 and decreased other non-interest expense of $198,000, which was primarily due to lower lending and foreclosed property expenses.
The $1.9 million increase in non-interest expense from the third quarter of 2017 was primarily due to a $1.1 million increase in data processing expense as the Company has outsourced certain segments of its data processing operations and invested in system upgrades. This outsourcing cost was partially offset by a reduction in full-time equivalent employees in the technology area. Salaries and employee benefits expense increased by $878,000 from the third quarter of 2017, which was driven by an increase in performance incentive accruals based on decreased non-performing assets, increased share-based compensation expenses, and lower deferred salary costs related to loan originations that will be accounted for over the lives of the related loans. These increases in salaries and employee benefits expense were partially offset by lower health care costs, severance costs, and commissions related to lower mortgage loan production during the third quarter of 2018. Occupancy and equipment expense increased by $661,000 from the third quarter of 2017 primarily due to an early termination fee collected from a tenant in the third quarter of 2017 that was not repeated in the current period. These increases were partially offset by decreases from the third quarter of 2017 in regulatory assessments expense of $261,000, advertising expense of $156,000, and office operations expense of $146,000.
Financial Condition - Loans
Gross loans held for investment at September 30, 2018, excluding Warehouse Purchase Program loans, grew $92.9 million from June 30, 2018, which included growth in commercial and industrial, consumer real estate, and construction and land loans. At September 30, 2018, commercial and industrial and consumer real estate loans increased by $59.6 million and $30.3 million, respectively, from June 30, 2018, while construction and land loans increased by $12.5 million for the same period. These increases were partially offset by linked-quarter declines of $8.8 million and $714,000 in commercial real estate and other consumer loans, respectively.
Compared to September 30, 2017, gross loans held for investment, excluding Warehouse Purchase Program loans, grew $378.5 million, which included growth in commercial and industrial and consumer real estate loans. Commercial and industrial and consumer real estate loans increased by $269.2 million and $120.1 million, respectively, at September 30, 2018, compared to September 30, 2017. These increases were partially offset by declines of $4.3 million, $4.2 million and $2.4 million in construction and land, commercial real estate, and other consumer loans, respectively, compared to September 30, 2017.
At September 30, 2018, Warehouse Purchase Program loans decreased by $236.6 million compared to June 30, 2018 and by $305.7 million compared to September 30, 2017.
Reserve-based energy loans, which are secured by deeds of trust on properties containing proven oil and natural gas reserves and included in the Company's commercial and industrial loan portfolio, totaled $547.4 million at September 30, 2018, up $60.6 million from $486.8 million at June 30, 2018 and up $20.6 million from $526.8 million at September 30, 2017. In addition to reserve-based energy loans, the Company has loans categorized as "Midstream and Other," which are typically related to the transmission of oil and natural gas and would only be indirectly impacted by declining commodity prices. At September 30, 2018, "Midstream and Other" loans had a total outstanding balance of $34.8 million, up $6.1 million from $28.7 million at June 30, 2018 and up $7.0 million from $27.8 million at September 30, 2017.
Financial Condition - Deposits
Total deposits at September 30, 2018 decreased by $101.6 million from June 30, 2018, which included declines of $86.8 million, $73.9 million and $17.6 million in interest-bearing demand, time, and savings and money market balances, respectively. These declines were partially offset by growth of $76.7 million in non-interest-bearing demand deposits from June 30, 2018.
Compared to September 30, 2017, total deposits increased by $19.4 million, which included growth in time and non-interest-bearing demand deposits of $264.8 million and $269.1 million, respectively, while savings and money market and interest-bearing demand deposits decreased by $405.3 million and $109.2 million, respectively, from September 30, 2017.
Credit Quality | |||||||||||
At or For the Quarters Ended | |||||||||||
(unaudited) | Sep 30, 2018 | Jun 30, 2018 | Sep 30, 2017 | ||||||||
(Dollars in thousands) | |||||||||||
Net charge-offs | $ | 791 | $ | 27,663 | $ | 12,347 | |||||
Net charge-offs/Average loans held for investment, excluding Warehouse Purchase Program loans | 0.05 | % | 1.69 | % | 0.78 | % | |||||
Net charge-offs/Average loans held for investment | 0.04 | 1.45 | 0.67 | ||||||||
Provision for credit losses | $ | 2,656 | $ | 17,478 | $ | 7,157 | |||||
Non-performing loans ("NPLs") | 17,584 | 19,610 | 76,915 | ||||||||
NPLs/Total loans held for investment, excluding Warehouse Purchase Program loans | 0.26 | % | 0.29 | % | 1.20 | % | |||||
NPLs/Total loans held for investment | 0.22 | 0.25 | 0.99 | ||||||||
Non-performing assets ("NPAs") | $ | 18,282 | $ | 26,951 | $ | 90,500 | |||||
NPAs to total assets | 0.20 | % | 0.29 | % | 1.00 | % | |||||
NPAs/Loans held for investment and foreclosed assets, excluding Warehouse Purchase Program loans | 0.27 | 0.40 | 1.41 | ||||||||
NPAs/Loans held for investment and foreclosed assets | 0.23 | 0.34 | 1.17 | ||||||||
Allowance for loan losses | $ | 66,354 | $ | 64,445 | $ | 70,044 | |||||
Allowance for loan losses/Total loans held for investment, excluding Warehouse Purchase Program loans | 0.98 | % | 0.97 | % | 1.10 | % | |||||
Allowance for loan losses/Total loans held for investment | 0.85 | 0.81 | 0.90 | ||||||||
Allowance for loan losses/Total loans held for investment, excluding acquired loans & Warehouse Purchase Program loans1 | 1.03 | 1.02 | 1.17 | ||||||||
Allowance for loan losses/NPLs | 377.35 | 328.63 | 91.07 | ||||||||
1 | Excludes loans acquired in previous bank acquisitions, which were initially recorded at fair value. |
The Company recorded a provision for credit losses of $2.7 million for the quarter ended September 30, 2018, a decrease of $14.8 million from the quarter ended June 30, 2018 and a decrease of $4.5 million from the quarter ended September 30, 2017. The decrease in provision expense on a linked-quarter and year-over-year basis was primarily due to decreased charge-offs during the quarter ended September 30, 2018. Net charge-offs totaled $791,000 for the three months ended September 30, 2018, down $26.9 million from the three months ended June 30, 2018 and down $11.6 million from the three months ended September 30, 2017. Non-performing assets at September 30, 2018 totaled $18.3 million, down $8.7 million from June 30, 2018, primarily due to the sale of a foreclosed medical facility in the third quarter of 2018, which generated a $1.3 million gain.
The below table shows criticized (rated "special mention") and classified (rated "substandard" or "doubtful") loans at September 30, 2018, June 30, 2018 and September 30, 2017.
September 30, | June 30, | September 30, | Linked-Quarter Change | Year-over-Year Change | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Commercial real estate | $ | 16,750 | $ | 25,540 | $ | 28,187 | $ | (8,790) | $ | (11,437) | |||||||||
Commercial and industrial, excluding energy | 7,884 | 11,065 | 16,300 | (3,181) | (8,416) | ||||||||||||||
Energy | 51,983 | 24,975 | 27,754 | 27,008 | 24,229 | ||||||||||||||
Consumer | 1,313 | 1,501 | 1,491 | (188) | (178) | ||||||||||||||
Total criticized (all performing) | $ | 77,930 | $ | 63,081 | $ | 73,732 | $ | 14,849 | $ | 4,198 | |||||||||
Commercial real estate | $ | 1,757 | $ | 3,846 | $ | 7,094 | $ | (2,089) | $ | (5,337) | |||||||||
Commercial and industrial, excluding energy | 1,059 | 1,234 | 14,516 | (175) | (13,457) | ||||||||||||||
Energy | 40,156 | 28,804 | 25,589 | 11,352 | 14,567 | ||||||||||||||
Consumer | 1,527 | 1,993 | 2,391 | (466) | (864) | ||||||||||||||
Total classified performing | 44,499 | 35,877 | 49,590 | 8,622 | (5,091) | ||||||||||||||
Commercial real estate | 3,739 | 3,656 | 4,064 | 83 | (325) | ||||||||||||||
Commercial and industrial, excluding energy | 5,861 | 8,860 | 14,548 | (2,999) | (8,687) | ||||||||||||||
Energy | 1,317 | 1,365 | 51,012 | (48) | (49,695) | ||||||||||||||
Consumer | 6,667 | 5,729 | 7,291 | 938 | (624) | ||||||||||||||
Total classified non-performing | 17,584 | 19,610 | 76,915 | (2,026) | (59,331) | ||||||||||||||
Total classified loans | $ | 62,083 | $ | 55,487 | $ | 126,505 | $ | 6,596 | $ | (64,422) | |||||||||
Conference Call
The Company will host an investor conference call to review the results on Wednesday, October 17, 2018 at 8 a.m. Central Time. Participants may pre-register for the call by visiting http://dpregister.com/10123554 and will receive a unique PIN which can be used when dialing in for the call. This will allow attendees to enter the call immediately. Alternatively, participants may call (toll-free) 877-513-4119 at least five minutes prior to the call to be placed into the call by an operator. International participants are asked to call 1-412-902-4148 and participants in Canada are asked to call (toll-free) 855-669-9657.
The call and corresponding presentation slides will be webcast live on the home page of the Company's website, www.LegacyTexasFinancialGroup.com. An audio replay will be available one hour after the conclusion of the call at 877-344-7529, Conference #10123554. This replay will be available until November 17, 2018.
About LegacyTexas Financial Group, Inc.
LegacyTexas Financial Group, Inc. is the holding company for LegacyTexas Bank, a commercially oriented community bank based in Plano, Texas. LegacyTexas Bank operates 43 banking offices in the Dallas/Fort Worth Metroplex and surrounding counties. For more information, please visit www.LegacyTexasFinancialGroup.com or www.LegacyTexas.com.
This document and other filings by LegacyTexas Financial Group, Inc. (the "Company") with the Securities and Exchange Commission (the "SEC"), as well as press releases or other public or stockholder communications released by the Company, may contain forward-looking statements, including, but not limited to, (i) statements regarding the financial condition, results of operations and business of the Company, (ii) statements about the Company's plans, objectives, expectations and intentions and other statements that are not historical facts and (iii) other statements identified by the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions that are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current beliefs and expectations of the Company's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: the expected cost savings, synergies and other financial benefits from acquisition or disposition transactions might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters might be greater than expected; changes in economic conditions; legislative changes; changes in policies by regulatory agencies; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company's ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company's market area; fluctuations in the price of oil, natural gas and other commodities; competition; changes in management's business strategies; changes in the regulatory and tax environments in which the Company operates, including the impact of the "Tax Cuts and Jobs Act" (the "TCJA") on the Company's deferred tax asset, and the anticipated impact of the TCJA on the Company's future earnings; and other factors set forth in the Company's filings with the SEC.
The factors listed above could materially affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.
The Company does not undertake - and specifically declines any obligation - to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. When considering forward-looking statements, you should keep in mind these risks and uncertainties. You should not place undue reliance on any forward-looking statement, which speaks only as of the date made. You should refer to our periodic and current reports filed with the SEC for specific risks that could cause actual results to be significantly different from those expressed or implied by any forward-looking statements.
LegacyTexas Financial Group, Inc. Consolidated Balance Sheets (unaudited) | |||||||||||||||||||
(Dollars in thousands) ASSETS | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
Cash and due from financial institutions | $ | 64,681 | $ | 60,104 | $ | 51,824 | $ | 61,713 | $ | 58,776 | |||||||||
Short-term interest-bearing deposits in other financial institutions | 189,634 | 199,807 | 243,080 | 231,743 | 268,567 | ||||||||||||||
Total cash and cash equivalents | 254,315 | 259,911 | 294,904 | 293,456 | 327,343 | ||||||||||||||
Securities available for sale, at fair value | 455,454 | 445,613 | 431,413 | 419,717 | 410,450 | ||||||||||||||
Securities held to maturity | 145,148 | 155,252 | 156,898 | 173,509 | 180,968 | ||||||||||||||
Total securities | 600,602 | 600,865 | 588,311 | 593,226 | 591,418 | ||||||||||||||
Loans held for sale | 22,175 | 33,548 | 31,123 | 16,707 | 25,955 | ||||||||||||||
Loans held for investment: | |||||||||||||||||||
Loans held for investment - Warehouse Purchase Program | 1,054,505 | 1,291,129 | 1,019,840 | 1,320,846 | 1,360,219 | ||||||||||||||
Loans held for investment | 6,764,052 | 6,671,139 | 6,569,123 | 6,483,192 | 6,385,602 | ||||||||||||||
Gross loans | 7,840,732 | 7,995,816 | 7,620,086 | 7,820,745 | 7,771,776 | ||||||||||||||
Less: allowance for loan losses and deferred fees on loans held for investment | (56,499) | (55,321) | (66,878) | (64,921) | (64,632) | ||||||||||||||
Net loans | 7,784,233 | 7,940,495 | 7,553,208 | 7,755,824 | 7,707,144 | ||||||||||||||
FHLB stock and other restricted securities, at cost | 60,596 | 66,061 | 46,842 | 64,790 | 50,333 | ||||||||||||||
Bank-owned life insurance | 58,692 | 58,345 | 57,999 | 57,684 | 57,383 | ||||||||||||||
Premises and equipment, net | 72,291 | 70,893 | 70,427 | 69,693 | 70,052 | ||||||||||||||
Goodwill | 178,559 | 178,559 | 178,559 | 178,559 | 178,559 | ||||||||||||||
Other assets | 73,504 | 73,957 | 75,374 | 72,964 | 86,380 | ||||||||||||||
Total assets | $ | 9,082,792 | $ | 9,249,086 | $ | 8,865,624 | $ | 9,086,196 | $ | 9,068,612 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
Non-interest-bearing demand | $ | 1,798,109 | $ | 1,721,380 | $ | 1,681,067 | $ | 1,635,622 | $ | 1,529,052 | |||||||||
Interest-bearing demand | 780,474 | 867,323 | 996,737 | 1,029,375 | 889,627 | ||||||||||||||
Savings and money market | 2,562,399 | 2,580,017 | 2,707,046 | 2,735,296 | 2,967,672 | ||||||||||||||
Time | 1,638,776 | 1,712,628 | 1,569,557 | 1,367,390 | 1,374,017 | ||||||||||||||
Total deposits | 6,779,758 | 6,881,348 | 6,954,407 | 6,767,683 | 6,760,368 | ||||||||||||||
FHLB advances | 932,317 | 1,065,941 | 604,562 | 1,043,163 | 998,146 | ||||||||||||||
Repurchase agreements | 40,408 | 41,330 | 76,610 | 84,676 | 81,073 | ||||||||||||||
Subordinated debt | 134,890 | 134,767 | 134,645 | 134,522 | 134,400 | ||||||||||||||
Accrued expenses and other liabilities | 155,820 | 124,250 | 115,906 | 96,278 | 144,533 | ||||||||||||||
Total liabilities | 8,043,193 | 8,247,636 | 7,886,130 | 8,126,322 | 8,118,520 | ||||||||||||||
Common stock | 485 | 483 | 483 | 481 | 480 | ||||||||||||||
Additional paid-in capital | 617,270 | 611,967 | 609,046 | 603,884 | 598,820 | ||||||||||||||
Retained earnings | 444,848 | 409,765 | 389,653 | 370,858 | 363,890 | ||||||||||||||
Accumulated other comprehensive income (loss), net | (11,481) | (9,109) | (7,899) | (3,429) | (1,045) | ||||||||||||||
Unearned Employee Stock Ownership Plan (ESOP) shares | (11,523) | (11,656) | (11,789) | (11,920) | (12,053) | ||||||||||||||
Total shareholders' equity | 1,039,599 | 1,001,450 | 979,494 | 959,874 | 950,092 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 9,082,792 | $ | 9,249,086 | $ | 8,865,624 | $ | 9,086,196 | $ | 9,068,612 | |||||||||
LegacyTexas Financial Group, Inc. Consolidated Quarterly Statements of Income (unaudited) | |||||||||||||||||||||||||||||||
For the Quarters Ended | Third Quarter 2018 Compared to: | ||||||||||||||||||||||||||||||
Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Second Quarter 2018 | Third Quarter 2017 | |||||||||||||||||||||||||
Interest and dividend income | (Dollars in thousands) | ||||||||||||||||||||||||||||||
Loans, including fees | $ | 102,267 | $ | 98,570 | $ | 90,631 | $ | 91,334 | $ | 89,084 | $ | 3,697 | 3.8 | % | $ | 13,183 | 14.8 | % | |||||||||||||
Taxable securities | 3,254 | 3,132 | 2,911 | 2,819 | 2,694 | 122 | 3.9 | 560 | 20.8 | ||||||||||||||||||||||
Nontaxable securities | 614 | 641 | 675 | 700 | 713 | (27) | (4.2) | (99) | (13.9) | ||||||||||||||||||||||
Interest-bearing deposits in other financial institutions | 1,368 | 1,097 | 969 | 798 | 1,524 | 271 | 24.7 | (156) | (10.2) | ||||||||||||||||||||||
FHLB and Federal Reserve Bank stock and other | 644 | 551 | 480 | 460 | 448 | 93 | 16.9 | 196 | 43.8 | ||||||||||||||||||||||
108,147 | 103,991 | 95,666 | 96,111 | 94,463 | 4,156 | 4.0 | 13,684 | 14.5 | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||||
Deposits | 15,077 | 13,732 | 12,032 | 10,954 | 10,271 | 1,345 | 9.8 | 4,806 | 46.8 | ||||||||||||||||||||||
FHLB advances | 5,198 | 4,131 | 2,680 | 2,647 | 2,944 | 1,067 | 25.8 | 2,254 | 76.6 | ||||||||||||||||||||||
Repurchase agreements and other borrowings | 2,205 | 2,199 | 2,341 | 2,311 | 2,284 | 6 | 0.3 | (79) | (3.5) | ||||||||||||||||||||||
22,480 | 20,062 | 17,053 | 15,912 | 15,499 | 2,418 | 12.1 | 6,981 | 45.0 | |||||||||||||||||||||||
Net interest income | 85,667 | 83,929 | 78,613 | 80,199 | 78,964 | 1,738 | 2.1 | 6,703 | 8.5 | ||||||||||||||||||||||
Provision for credit losses | 2,656 | 17,478 | 15,663 | 3,743 | 7,157 | (14,822) | (84.8) | (4,501) | (62.9) | ||||||||||||||||||||||
Net interest income after provision for credit losses | 83,011 | 66,451 | 62,950 | 76,456 | 71,807 | 16,560 | 24.9 | 11,204 | 15.6 | ||||||||||||||||||||||
Non-interest income | |||||||||||||||||||||||||||||||
Service charges and other fees | 8,626 | 8,844 | 7,927 | 8,124 | 9,291 | (218) | (2.5) | (665) | (7.2) | ||||||||||||||||||||||
Net gain on sale of mortgage loans held for sale | 1,597 | 1,668 | 1,809 | 1,556 | 1,982 | (71) | (4.3) | (385) | (19.4) | ||||||||||||||||||||||
Bank-owned life insurance income | 482 | 479 | 447 | 430 | 435 | 3 | 0.6 | 47 | 10.8 | ||||||||||||||||||||||
Net gain (loss) on securities transactions | (10) | — | (128) | — | (20) | (10) | N/M | 10 | 50.0 | ||||||||||||||||||||||
Gain (loss) on sale and disposition of assets | 977 | (153) | 2,213 | (3,480) | 352 | 1,130 | N/M | 625 | N/M | ||||||||||||||||||||||
Other | 1,555 | 14 | 630 | 271 | 186 | 1,541 | N/M | 1,369 | N/M | ||||||||||||||||||||||
13,227 | 10,852 | 12,898 | 6,901 | 12,226 | 2,375 | 21.9 | 1,001 | 8.2 | |||||||||||||||||||||||
Non-interest expense | (Dollars in thousands) | ||||||||||||||||||||||||||||||
Salaries and employee benefits | 25,053 | 24,313 | 27,076 | 23,126 | 24,175 | 740 | 3.0 | 878 | 3.6 | ||||||||||||||||||||||
Advertising | 824 | 1,358 | 888 | 1,402 | 980 | (534) | (39.3) | (156) | (15.9) | ||||||||||||||||||||||
Occupancy and equipment | 3,960 | 3,980 | 3,860 | 3,776 | 3,299 | (20) | (0.5) | 661 | 20.0 | ||||||||||||||||||||||
Outside professional services | 1,151 | 1,382 | 1,250 | 1,300 | 1,230 | (231) | (16.7) | (79) | (6.4) | ||||||||||||||||||||||
Regulatory assessments | 750 | 731 | 1,154 | 1,212 | 1,011 | 19 | 2.6 | (261) | (25.8) | ||||||||||||||||||||||
Data processing | 5,362 | 5,145 | 4,703 | 4,737 | 4,287 | 217 | 4.2 | 1,075 | 25.1 | ||||||||||||||||||||||
Office operations | 2,232 | 2,224 | 2,300 | 2,180 | 2,378 | 8 | 0.4 | (146) | (6.1) | ||||||||||||||||||||||
Other | 2,860 | 3,058 | 2,648 | 2,975 | 2,935 | (198) | (6.5) | (75) | (2.6) | ||||||||||||||||||||||
42,192 | 42,191 | 43,879 | 40,708 | 40,295 | 1 | — | 1,897 | 4.7 | |||||||||||||||||||||||
Income before income tax expense | 54,046 | 35,112 | 31,969 | 42,649 | 43,738 | 18,934 | 53.9 | 10,308 | 23.6 | ||||||||||||||||||||||
Income tax expense | 11,225 | 7,275 | 6,207 | 27,989 | 15,029 | 3,950 | 54.3 | (3,804) | (25.3) | ||||||||||||||||||||||
Net income | $ | 42,821 | $ | 27,837 | $ | 25,762 | $ | 14,660 | $ | 28,709 | $ | 14,984 | 53.8 | % | $ | 14,112 | 49.2 | % | |||||||||||||
N/M - Not meaningful |
LegacyTexas Financial Group, Inc. Selected Quarterly Financial Highlights (unaudited) | |||||||||||
At or For the Quarters Ended | |||||||||||
September 30, | June 30, | September 30, | |||||||||
SHARE DATA: | (Dollars in thousands, except per share amounts) | ||||||||||
Weighted average common shares outstanding- basic | 47,105,655 | 47,000,405 | 46,664,233 | ||||||||
Weighted average common shares outstanding- diluted | 47,755,441 | 47,618,157 | 47,158,729 | ||||||||
Shares outstanding at end of period | 48,491,169 | 48,311,220 | 48,040,059 | ||||||||
Income available to common shareholders1 | $ | 42,672 | $ | 27,770 | $ | 28,617 | |||||
Basic earnings per common share | 0.91 | 0.59 | 0.61 | ||||||||
Basic core (non-GAAP) earnings per common share2 | 0.92 | 0.59 | 0.61 | ||||||||
Diluted earnings per common share | 0.89 | 0.58 | 0.61 | ||||||||
Dividends declared per share | 0.16 | 0.16 | 0.15 | ||||||||
Total shareholders' equity | 1,039,599 | 1,001,450 | 950,092 | ||||||||
Common shareholders' equity per share (book value per share) | 21.44 | 20.73 | 19.78 | ||||||||
Tangible book value per share - Non-GAAP2 | 17.75 | 17.03 | 16.05 | ||||||||
Market value per share for the quarter: | |||||||||||
High | 46.86 | 43.92 | 39.92 | ||||||||
Low | 38.53 | 38.80 | 34.87 | ||||||||
Close | 42.60 | 39.02 | 39.92 | ||||||||
KEY RATIOS: | |||||||||||
Return on average common shareholders' equity | 16.76 | % | 11.20 | % | 12.21 | % | |||||
Core (non-GAAP) return on average common shareholders' equity2 | 16.90 | 11.25 | 12.11 | ||||||||
Return on average assets | 1.87 | 1.24 | 1.29 | ||||||||
Core (non-GAAP) return on average assets2 | 1.88 | 1.24 | 1.28 | ||||||||
Efficiency ratio (GAAP basis) | 42.66 | 44.51 | 44.19 | ||||||||
Core (non-GAAP) efficiency ratio2 | 42.46 | 44.44 | 44.37 | ||||||||
Estimated Tier 1 common equity risk-based capital ratio3 | 10.46 | 9.78 | 9.17 | ||||||||
Estimated total risk-based capital ratio3 | 12.88 | 12.14 | 11.61 | ||||||||
Estimated Tier 1 risk-based capital ratio3 | 10.60 | 9.93 | 9.32 | ||||||||
Estimated Tier 1 leverage ratio3 | 9.83 | 9.56 | 9.01 | ||||||||
Total equity to total assets | 11.45 | 10.83 | 10.48 | ||||||||
Tangible equity to tangible assets - Non-GAAP2 | 9.67 | 9.07 | 8.67 | ||||||||
Number of employees- full-time equivalent | 859 | 847 | 864 | ||||||||
1 | Net of distributed and undistributed earnings to participating securities. |
2 | See the section labeled "Supplemental Information - Non-GAAP Financial Measures" at the end of this document. |
3 | Calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve. |
LegacyTexas Financial Group, Inc. Selected Loan Data (unaudited) | |||||||||||||||||||
At or for the Quarter Ended | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Loans held for investment: | (Dollars in thousands) | ||||||||||||||||||
Commercial real estate | $ | 3,012,352 | $ | 3,021,148 | $ | 3,053,750 | $ | 3,019,339 | $ | 3,016,533 | |||||||||
Warehouse Purchase Program | 1,054,505 | 1,291,129 | 1,019,840 | 1,320,846 | 1,360,219 | ||||||||||||||
Commercial and industrial | 2,111,510 | 2,051,955 | 1,967,443 | 1,927,049 | 1,842,345 | ||||||||||||||
Construction and land | 278,278 | 265,745 | 252,213 | 277,864 | 282,536 | ||||||||||||||
Consumer real estate | 1,318,038 | 1,287,703 | 1,252,433 | 1,213,434 | 1,197,911 | ||||||||||||||
Other consumer | 43,874 | 44,588 | 43,284 | 45,506 | 46,277 | ||||||||||||||
Gross loans held for investment | $ | 7,818,557 | $ | 7,962,268 | $ | 7,588,963 | $ | 7,804,038 | $ | 7,745,821 | |||||||||
Non-performing assets: | |||||||||||||||||||
Commercial real estate | $ | 3,739 | $ | 3,656 | $ | 3,748 | $ | 4,134 | $ | 4,064 | |||||||||
Commercial and industrial | 7,178 | 10,225 | 40,455 | 84,003 | 65,560 | ||||||||||||||
Consumer real estate | 6,617 | 5,652 | 5,548 | 6,190 | 7,175 | ||||||||||||||
Other consumer | 50 | 77 | 85 | 76 | 116 | ||||||||||||||
Total non-performing loans | 17,584 | 19,610 | 49,836 | 94,403 | 76,915 | ||||||||||||||
Foreclosed assets | 698 | 7,341 | 8,160 | 8,432 | 13,585 | ||||||||||||||
Total non-performing assets | $ | 18,282 | $ | 26,951 | $ | 57,996 | $ | 102,835 | $ | 90,500 | |||||||||
Total non-performing assets to total assets | 0.20 | % | 0.29 | % | 0.65 | % | 1.13 | % | 1.00 | % | |||||||||
Total non-performing loans to total loans held for investment, excluding Warehouse Purchase Program loans | 0.26 | % | 0.29 | % | 0.76 | % | 1.46 | % | 1.20 | % | |||||||||
Total non-performing loans to total loans held for investment | 0.22 | % | 0.25 | % | 0.66 | % | 1.21 | % | 0.99 | % | |||||||||
Allowance for loan losses to non-performing loans | 377.35 | % | 328.63 | % | 149.51 | % | 75.53 | % | 91.07 | % | |||||||||
Allowance for loan losses to total loans held for investment, excluding Warehouse Purchase Program loans | 0.98 | % | 0.97 | % | 1.13 | % | 1.10 | % | 1.10 | % | |||||||||
Allowance for loan losses to total loans held for investment | 0.85 | % | 0.81 | % | 0.98 | % | 0.91 | % | 0.90 | % | |||||||||
Allowance for loan losses to total loans held for investment, excluding acquired loans and Warehouse Purchase Program loans 1 | 1.03 | % | 1.02 | % | 1.20 | % | 1.17 | % | 1.17 | % | |||||||||
Troubled debt restructured loans ("TDRs"): | (Dollars in thousands) | ||||||||||||||||||
Performing TDRs: | |||||||||||||||||||
Commercial real estate | $ | 139 | $ | 141 | $ | 143 | $ | 145 | $ | 147 | |||||||||
Commercial and industrial | — | — | 1 | 2 | — | ||||||||||||||
Consumer real estate | 786 | 561 | 574 | 600 | 263 | ||||||||||||||
Other consumer | 4 | 9 | 14 | 21 | 20 | ||||||||||||||
Total performing TDRs | $ | 929 | $ | 711 | $ | 732 | $ | 768 | $ | 430 | |||||||||
Non-performing TDRs:2 | |||||||||||||||||||
Commercial real estate | $ | 3,605 | $ | 33 | $ | 35 | $ | 36 | $ | 37 | |||||||||
Commercial and industrial | 2,299 | 2,095 | 16,183 | 16,328 | 7,984 | ||||||||||||||
Consumer real estate | 495 | 789 | 890 | 916 | 1,343 | ||||||||||||||
Other consumer | 2 | 7 | 9 | 14 | 25 | ||||||||||||||
Total non-performing TDRs | $ | 6,401 | $ | 2,924 | $ | 17,117 | $ | 17,294 | $ | 9,389 | |||||||||
Allowance for loan losses: | |||||||||||||||||||
Balance at beginning of period | $ | 64,445 | $ | 74,508 | $ | 71,301 | $ | 70,044 | $ | 75,091 | |||||||||
Provision expense for loans | 2,700 | 17,600 | 15,635 | 3,900 | 7,300 | ||||||||||||||
Charge-offs | (922) | (27,737) | (12,527) | (2,840) | (12,496) | ||||||||||||||
Recoveries | 131 | 74 | 99 | 197 | 149 | ||||||||||||||
Balance at end of period | $ | 66,354 | $ | 64,445 | $ | 74,508 | $ | 71,301 | $ | 70,044 | |||||||||
Net charge-offs (recoveries): | |||||||||||||||||||
Commercial real estate | $ | — | $ | 236 | $ | 3 | $ | — | $ | — | |||||||||
Commercial and industrial | 537 | 27,261 | 12,214 | 2,386 | 12,215 | ||||||||||||||
Consumer real estate | 47 | (9) | (11) | 36 | (10) | ||||||||||||||
Other consumer | 207 | 175 | 222 | 221 | 142 | ||||||||||||||
Total net charge-offs | $ | 791 | $ | 27,663 | $ | 12,428 | $ | 2,643 | $ | 12,347 | |||||||||
Allowance for off-balance sheet lending-related commitments | |||||||||||||||||||
Provision expense (benefit) for credit losses | $ | (44) | $ | (122) | $ | 28 | $ | (157) | $ | (143) | |||||||||
1 | Excludes loans acquired in previous bank acquisitions, which were initially recorded at fair value. |
2 | Non-performing TDRs are included in the non-performing assets reported above. |
LegacyTexas Financial Group, Inc. Average Balances and Yields/Rates (unaudited) | |||||||||||||||||||
For the Quarters Ended | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Loans: | (Dollars in thousands) | ||||||||||||||||||
Commercial real estate | $ | 3,016,889 | $ | 3,055,139 | $ | 2,993,024 | $ | 3,030,778 | $ | 2,854,343 | |||||||||
Warehouse Purchase Program | 1,097,879 | 1,075,262 | 965,320 | 1,162,890 | 1,192,920 | ||||||||||||||
Commercial and industrial | 2,088,318 | 2,002,490 | 1,904,515 | 1,864,686 | 1,850,645 | ||||||||||||||
Construction and land | 271,829 | 260,560 | 270,899 | 287,965 | 279,189 | ||||||||||||||
Consumer real estate | 1,295,353 | 1,265,751 | 1,227,556 | 1,206,371 | 1,176,955 | ||||||||||||||
Other consumer | 44,508 | 43,779 | 44,891 | 46,094 | 47,169 | ||||||||||||||
Less: deferred fees and allowance for loan loss | (55,974) | (66,746) | (62,666) | (65,612) | (70,048) | ||||||||||||||
Total loans held for investment | 7,758,802 | 7,636,235 | 7,343,539 | 7,533,172 | 7,331,173 | ||||||||||||||
Loans held for sale | 26,121 | 29,378 | 20,988 | 20,642 | 23,154 | ||||||||||||||
Securities | 678,483 | 667,183 | 648,534 | 648,917 | 652,841 | ||||||||||||||
Overnight deposits | 272,670 | 233,335 | 239,936 | 223,608 | 444,310 | ||||||||||||||
Total interest-earning assets | $ | 8,736,076 | $ | 8,566,131 | $ | 8,252,997 | $ | 8,426,339 | $ | 8,451,478 | |||||||||
Deposits: | |||||||||||||||||||
Interest-bearing demand | $ | 760,889 | $ | 954,960 | $ | 970,998 | $ | 925,506 | $ | 875,097 | |||||||||
Savings and money market | 2,654,990 | 2,578,205 | 2,745,192 | 2,911,726 | 2,857,790 | ||||||||||||||
Time | 1,683,475 | 1,632,697 | 1,433,307 | 1,353,467 | 1,418,108 | ||||||||||||||
FHLB advances and other borrowings | 1,154,079 | 1,018,945 | 877,502 | 1,007,747 | 1,178,031 | ||||||||||||||
Total interest-bearing liabilities | $ | 6,253,433 | $ | 6,184,807 | $ | 6,026,999 | $ | 6,198,446 | $ | 6,329,026 | |||||||||
Total assets | $ | 9,167,607 | $ | 8,996,036 | $ | 8,682,461 | $ | 8,865,517 | $ | 8,889,914 | |||||||||
Non-interest-bearing demand deposits | $ | 1,752,095 | $ | 1,694,082 | $ | 1,576,792 | $ | 1,568,665 | $ | 1,481,654 | |||||||||
Total deposits | $ | 6,851,449 | $ | 6,859,944 | $ | 6,726,289 | $ | 6,759,364 | $ | 6,632,649 | |||||||||
Total shareholders' equity | $ | 1,022,032 | $ | 994,574 | $ | 973,187 | $ | 963,512 | $ | 940,606 | |||||||||
Yields/Rates: | |||||||||||||||||||
Loans: | |||||||||||||||||||
Commercial real estate | 5.15 | % | 5.09 | % | 5.09 | % | 5.05 | % | 5.06 | % | |||||||||
Warehouse Purchase Program | 4.68 | % | 4.53 | % | 4.23 | % | 3.95 | % | 3.82 | % | |||||||||
Commercial and industrial | 5.78 | % | 5.71 | % | 5.27 | % | 4.89 | % | 5.00 | % | |||||||||
Construction and land | 5.41 | % | 5.35 | % | 5.17 | % | 5.04 | % | 5.16 | % | |||||||||
Consumer real estate | 4.67 | % | 4.66 | % | 4.56 | % | 4.54 | % | 4.54 | % | |||||||||
Other consumer | 5.81 | % | 5.74 | % | 5.62 | % | 5.67 | % | 5.64 | % | |||||||||
Total loans held for investment | 5.22 | % | 5.16 | % | 4.98 | % | 4.81 | % | 4.81 | % | |||||||||
Loans held for sale | 4.52 | % | 4.46 | % | 4.04 | % | 3.92 | % | 3.89 | % | |||||||||
Securities | 2.66 | % | 2.59 | % | 2.51 | % | 2.45 | % | 2.36 | % | |||||||||
Overnight deposits | 1.99 | % | 1.89 | % | 1.64 | % | 1.42 | % | 1.36 | % | |||||||||
Total interest-earning assets | 4.92 | % | 4.87 | % | 4.69 | % | 4.53 | % | 4.44 | % | |||||||||
Deposits: | |||||||||||||||||||
Interest-bearing demand | 0.65 | % | 0.88 | % | 0.81 | % | 0.71 | % | 0.67 | % | |||||||||
Savings and money market | 0.92 | % | 0.79 | % | 0.75 | % | 0.70 | % | 0.68 | % | |||||||||
Time | 1.80 | % | 1.62 | % | 1.43 | % | 1.21 | % | 1.10 | % | |||||||||
FHLB advances and other borrowings | 2.55 | % | 2.49 | % | 2.32 | % | 1.95 | % | 1.76 | % | |||||||||
Total interest-bearing liabilities | 1.43 | % | 1.30 | % | 1.15 | % | 1.02 | % | 0.97 | % | |||||||||
Net interest spread | 3.49 | % | 3.57 | % | 3.54 | % | 3.51 | % | 3.47 | % | |||||||||
Net interest margin | 3.90 | % | 3.93 | % | 3.85 | % | 3.78 | % | 3.71 | % | |||||||||
Cost of deposits (including non-interest-bearing demand) | 0.87 | % | 0.80 | % | 0.73 | % | 0.64 | % | 0.61 | % | |||||||||
LegacyTexas Financial Group, Inc. Supplemental Information- Non-GAAP Financial Measures (unaudited) | |||||||||||||||||||
At or For the Quarters Ended | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||
Reconciliation of Core (non-GAAP) to GAAP Net Income and Earnings per Share (net of estimated tax, except as otherwise noted) | |||||||||||||||||||
GAAP net income available to common shareholders1 | $ | 42,672 | $ | 27,770 | $ | 25,687 | $ | 14,613 | $ | 28,617 | |||||||||
Distributed and undistributed earnings to participating securities1 | 149 | 67 | 75 | 47 | 92 | ||||||||||||||
GAAP net income | 42,821 | 27,837 | 25,762 | 14,660 | 28,709 | ||||||||||||||
Insurance settlement proceeds from pre-acquisition fraud2 | — | — | (1,778) | — | — | ||||||||||||||
One-time employee bonus related to tax law change2 | — | — | 537 | — | — | ||||||||||||||
(Gain) loss on one-time tax adjustments3 | — | — | — | 13,493 | — | ||||||||||||||
(Gain) loss on sale of branch locations and land2 | 372 | 126 | — | — | (237) | ||||||||||||||
Core (non-GAAP) net income | $ | 43,193 | $ | 27,963 | $ | 24,521 | $ | 28,153 | $ | 28,472 | |||||||||
Average shares for basic earnings per share | 47,105,655 | 47,000,405 | 46,872,333 | 46,729,160 | 46,664,233 | ||||||||||||||
Basic GAAP earnings per share | $ | 0.91 | $ | 0.59 | $ | 0.55 | $ | 0.31 | $ | 0.61 | |||||||||
Basic core (non-GAAP) earnings per share | $ | 0.92 | $ | 0.59 | $ | 0.52 | $ | 0.60 | $ | 0.61 | |||||||||
Average shares for diluted earnings per share | 47,755,441 | 47,618,157 | 47,564,587 | 47,290,308 | 47,158,729 | ||||||||||||||
Diluted GAAP earnings per share | $ | 0.89 | $ | 0.58 | $ | 0.54 | $ | 0.31 | $ | 0.61 | |||||||||
Diluted core (non-GAAP) earnings per share | $ | 0.90 | $ | 0.59 | $ | 0.52 | $ | 0.60 | $ | 0.60 | |||||||||
Reconciliation of Core (non-GAAP) to GAAP Non-Interest Income and Non-interest Expense (gross of tax) | |||||||||||||||||||
GAAP non-interest income | $ | 13,227 | $ | 10,852 | $ | 12,898 | $ | 6,901 | $ | 12,226 | |||||||||
Insurance settlement proceeds from pre-acquisition fraud | — | — | (2,250) | — | — | ||||||||||||||
(Gain) loss on sale of branch locations and land | 471 | 160 | — | — | (365) | ||||||||||||||
Core (non-GAAP) non-interest income | $ | 13,698 | $ | 11,012 | $ | 10,648 | $ | 6,901 | $ | 11,861 | |||||||||
GAAP non-interest expense | $ | 42,192 | $ | 42,191 | $ | 43,879 | $ | 40,708 | $ | 40,295 | |||||||||
One-time employee bonus related to tax law change | — | — | (679) | — | — | ||||||||||||||
Core (non-GAAP) non-interest expense | $ | 42,192 | $ | 42,191 | $ | 43,200 | $ | 40,708 | $ | 40,295 | |||||||||
1 | Unvested share-based awards that contain nonforfeitable rights to dividends (whether paid or unpaid) are participating securities and are included in the computation of GAAP earnings per share pursuant to the two-class method described in ASC 260-10-45-60B. |
2 | 2018 amounts calculated net of estimated tax using a tax rate of 21%; 2017 amount calculated net of estimated tax using a tax rate of 35%. |
3 | This one-time income tax expense adjustment consists of an adjustment to the Company's deferred tax asset related to the December 22, 2017 enactment of the Tax Cuts and Jobs Act. |
At or For the Quarters Ended | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Reconciliation of Core (non-GAAP) to GAAP Efficiency Ratio (gross of tax) | (Dollars in thousands) | ||||||||||||||||||
GAAP efficiency ratio: | |||||||||||||||||||
Non-interest expense | $ | 42,192 | $ | 42,191 | $ | 43,879 | $ | 40,708 | $ | 40,295 | |||||||||
Net interest income plus non-interest income | 98,894 | 94,781 | 91,511 | 87,100 | 91,190 | ||||||||||||||
Efficiency ratio- GAAP basis | 42.66 | % | 44.51 | % | 47.95 | % | 46.74 | % | 44.19 | % | |||||||||
Core (non-GAAP) efficiency ratio: | |||||||||||||||||||
Core (non-GAAP) non-interest expense | $ | 42,192 | $ | 42,191 | $ | 43,200 | $ | 40,708 | $ | 40,295 | |||||||||
Net interest income plus core (non-GAAP) non-interest income | 99,365 | 94,941 | 89,261 | 87,100 | 90,825 | ||||||||||||||
Efficiency ratio- core (non-GAAP) basis | 42.46 | % | 44.44 | % | 48.40 | % | 46.74 | % | 44.37 | % | |||||||||
Calculation of Tangible Book Value per Share: | |||||||||||||||||||
Total shareholders' equity | $ | 1,039,599 | $ | 1,001,450 | $ | 979,494 | $ | 959,874 | $ | 950,092 | |||||||||
Less: Goodwill | (178,559) | (178,559) | (178,559) | (178,559) | (178,559) | ||||||||||||||
Identifiable intangible assets, net | (279) | (313) | (347) | (402) | (463) | ||||||||||||||
Total tangible shareholders' equity | $ | 860,761 | $ | 822,578 | $ | 800,588 | $ | 780,913 | $ | 771,070 | |||||||||
Shares outstanding at end of period | 48,491,169 | 48,311,220 | 48,264,966 | 48,117,390 | 48,040,059 | ||||||||||||||
Book value per share- GAAP | $ | 21.44 | $ | 20.73 | $ | 20.29 | $ | 19.95 | $ | 19.78 | |||||||||
Tangible book value per share- Non-GAAP | 17.75 | 17.03 | 16.59 | 16.23 | 16.05 | ||||||||||||||
Calculation of Tangible Equity to Tangible Assets: | |||||||||||||||||||
Total assets | $ | 9,082,792 | $ | 9,249,086 | $ | 8,865,624 | $ | 9,086,196 | $ | 9,068,612 | |||||||||
Less: Goodwill | (178,559) | (178,559) | (178,559) | (178,559) | (178,559) | ||||||||||||||
Identifiable intangible assets, net | (279) | (313) | (347) | (402) | (463) | ||||||||||||||
Total tangible assets | $ | 8,903,954 | $ | 9,070,214 | $ | 8,686,718 | $ | 8,907,235 | $ | 8,889,590 | |||||||||
Equity to assets- GAAP | 11.45 | % | 10.83 | % | 11.05 | % | 10.56 | % | 10.48 | % | |||||||||
Tangible equity to tangible assets- Non-GAAP | 9.67 | 9.07 | 9.22 | 8.77 | 8.67 | ||||||||||||||
Calculation of Return on Average Assets and Return on Average Equity Ratios (GAAP and Core) | |||||||||||||||||||
Net income | $ | 42,821 | $ | 27,837 | $ | 25,762 | $ | 14,660 | $ | 28,709 | |||||||||
Core (non-GAAP) net income | 43,193 | 27,963 | 24,521 | 28,153 | 28,472 | ||||||||||||||
Average total equity | 1,022,032 | 994,574 | 973,187 | 963,512 | 940,606 | ||||||||||||||
Average total assets | 9,167,607 | 8,996,036 | 8,682,461 | 8,865,517 | 8,889,914 | ||||||||||||||
Return on average common shareholders' equity | 16.76 | % | 11.20 | % | 10.59 | % | 6.09 | % | 12.21 | % | |||||||||
Core (non-GAAP) return on average common shareholders' equity | 16.90 | 11.25 | 10.08 | 11.69 | 12.11 | ||||||||||||||
Return on average assets | 1.87 | 1.24 | 1.19 | 0.66 | 1.29 | ||||||||||||||
Core (non-GAAP) return on average assets | 1.88 | 1.24 | 1.13 | 1.27 | 1.28 | ||||||||||||||
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SOURCE LegacyTexas Financial Group, Inc.
