LEGACYTEXAS FINANCIAL GROUP, INC. PLANO, Texas, Jan. 23, 2018 /PRNewswire/ -- LegacyTexas Financial Group, Inc. (Nasdaq: LTXB) (the "Company"), the holding company for LegacyTexas Bank (the "Bank"), today announced net income of $14.7 million for the fourth quarter of 2017, a decrease of $14.0 million from the third quarter of 2017 and $10.6 million from the fourth quarter of 2016. Net income for the fourth quarter of 2017 included a $13.5 million income tax adjustment to the Company's deferred tax asset related to the December 22, 2017 enactment of the Tax Cuts and Jobs Act. Net income, excluding this one-time tax adjustment, totaled $28.2 million for the fourth quarter of 2017, a decrease of $556,000 from the third quarter of 2017 and an increase of $2.8 million from the fourth quarter of 2016.
"We are pleased to report another strong quarter and a strong full year of results for 2017," said President and CEO Kevin Hanigan. "Our dedicated team continues to execute our strategy and grow our customer base and franchise while actively serving each of our communities. We look forward to continued success in 2018 and the future."
Fourth Quarter 2017 Performance Highlights
- Company assets of $9.09 billion generated basic earnings per share for the fourth quarter of 2017 of $0.31 on a GAAP basis and $0.60 on a core (non-GAAP) basis.
- Average gross loans held for investment for the quarter ended December 31, 2017, excluding Warehouse Purchase Program loans, grew $208.6 million from the quarter ended September 30, 2017, leading to a seven basis point increase in net interest margin to 3.78% for the quarter ended December 31, 2017.
- The Company's efforts to grow non-interest-bearing demand deposits resulted in a linked-quarter increase in these deposits of $106.6 million, or 7.0%, to $1.64 billion at December 31, 2017. Non-interest-bearing deposits totaled 24.2% of total deposits at December 31, 2017.
- Return on average assets for the quarter ended December 31, 2017 was 0.66%, compared to 1.29% for the quarter ended September 30, 2017, while core (non-GAAP) return on average assets for the quarter ended December 31, 2017 was 1.27%, compared to 1.28% for the quarter ended September 30, 2017.
Full Year 2017 Performance Highlights
- Net income for the year ended December 31, 2017 totaled $89.5 million, which included the impact of the above-mentioned $13.5 million income tax adjustment to the Company's deferred tax asset. Excluding this adjustment, net income totaled $103.0 million for the year ended December 31, 2017, an increase of $5.2 million from the year ended December 31, 2016.
- Basic earnings per share on a GAAP basis for the year ended December 31, 2017 was $1.91, down $0.20 from $2.11 for the year ended December 31, 2016, while core (non-GAAP) basic earnings per share for the year ended December 31, 2017 was $2.19, up $0.11 from $2.08 for the year ended December 31, 2016.
- GAAP efficiency ratio improved to 45.17% for the year ended December 31, 2017, compared to 46.79% for the year ended December 31, 2016. Core (non-GAAP) efficiency ratio improved to 45.38% for the year ended December 31, 2017, compared to 47.30% for the year ended December 31, 2016.
- Gross loans held for investment at December 31, 2017, excluding Warehouse Purchase Program loans, grew $584.0 million from December 31, 2016, while total deposits increased by $402.2 million for the same period.
Financial Highlights | |||||||||||
At or For the Quarters Ended | |||||||||||
(unaudited) | Dec 31, 2017 | Sep 30, 2017 | Dec 31, 2016 | ||||||||
(Dollars in thousands, except per share amounts) | |||||||||||
Net interest income | $ | 80,199 | $ | 78,964 | $ | 74,084 | |||||
Provision for credit losses | 3,743 | 7,157 | 7,833 | ||||||||
Non-interest income | 6,901 | 12,226 | 12,277 | ||||||||
Non-interest expense | 40,708 | 40,295 | 39,548 | ||||||||
Income tax expense | 27,989 | 15,029 | 13,675 | ||||||||
Net income | $ | 14,660 | $ | 28,709 | $ | 25,305 | |||||
Basic earnings per common share | $ | 0.31 | $ | 0.61 | $ | 0.54 | |||||
Basic core (non-GAAP) earnings per common share1 | $ | 0.60 | $ | 0.61 | $ | 0.55 | |||||
Weighted average common shares outstanding - basic | 46,729,160 | 46,664,233 | 46,346,053 | ||||||||
Estimated Tier 1 common equity risk-based capital ratio2 | 9.40 | % | 9.17 | % | 9.13 | % | |||||
Total equity to total assets | 10.56 | % | 10.48 | % | 10.59 | % | |||||
Tangible common equity to tangible assets - Non-GAAP1 | 8.77 | % | 8.67 | % | 8.63 | % | |||||
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 $28.2 million for the quarter ended December 31, 2017, down $319,000 from the third quarter of 2017 and up $2.8 million from the fourth quarter of 2016. Basic earnings per share for the quarter ended December 31, 2017 was $0.31, a decrease of $0.30 from the third quarter of 2017 and $0.23 from the fourth quarter of 2016. Basic core (non-GAAP) earnings per share for the fourth quarter of 2017 was $0.60, down $0.01 from the third quarter of 2017 and up $0.05 from the fourth quarter of 2016.
At or For the Years Ended | |||||||
(unaudited) | Dec 31, 2017 | Dec 31, 2016 | |||||
(Dollars in thousands, except per share amounts) | |||||||
Net interest income | $ | 311,431 | $ | 282,269 | |||
Provision for credit losses | 39,456 | 26,900 | |||||
Non-interest income | 43,582 | 51,931 | |||||
Non-interest expense | 160,344 | 156,377 | |||||
Income tax expense | 65,719 | 53,102 | |||||
Net income | $ | 89,494 | $ | 97,821 | |||
Basic earnings per common share | $ | 1.91 | $ | 2.11 | |||
Basic core (non-GAAP) earnings per common share1 | $ | 2.19 | $ | 2.08 | |||
Weighted average common shares outstanding - basic | 46,611,780 | 46,184,074 | |||||
1 | See the section labeled "Supplemental Information- Non-GAAP Financial Measures" at the end of this document. |
Core (non-GAAP) net income totaled $101.9 million for the year ended December 31, 2017, up $5.7 million from the year ended December 31, 2016. Basic earnings per share for the year ended December 31, 2017 was $1.91, a decrease of $0.20 from the year ended December 31, 2016. Basic core (non-GAAP) earnings per share for the year ended December 31, 2017 was $2.19, up $0.11 from the year ended December 31, 2016. 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) | Dec 31, 2017 | Sep 30, 2017 | Dec 31, 2016 | ||||||||
(Dollars in thousands) | |||||||||||
Interest income: | |||||||||||
Loans held for investment, excluding Warehouse Purchase Program loans | $ | 81,134 | $ | 78,986 | $ | 71,090 | |||||
Warehouse Purchase Program loans | 9,998 | 9,873 | 9,112 | ||||||||
Loans held for sale | 202 | 225 | 192 | ||||||||
Securities | 3,979 | 3,855 | 3,410 | ||||||||
Interest-earning deposit accounts | 798 | 1,524 | 693 | ||||||||
Total interest income | $ | 96,111 | $ | 94,463 | $ | 84,497 | |||||
Net interest income | $ | 80,199 | $ | 78,964 | $ | 74,084 | |||||
Net interest margin | 3.78 | % | 3.71 | % | 3.68 | % | |||||
Selected average balances: | |||||||||||
Total earning assets | $ | 8,426,339 | $ | 8,451,478 | $ | 8,011,431 | |||||
Total loans held for investment | 7,533,172 | 7,331,173 | 6,886,696 | ||||||||
Total securities | 648,917 | 652,841 | 620,775 | ||||||||
Total deposits | 6,759,364 | 6,632,649 | 6,282,454 | ||||||||
Total borrowings | 1,007,747 | 1,178,031 | 1,201,004 | ||||||||
Total non-interest-bearing demand deposits | 1,568,665 | 1,481,654 | 1,349,561 | ||||||||
Total interest-bearing liabilities | 6,198,446 | 6,329,026 | 6,133,897 | ||||||||
Net interest income for the quarter ended December 31, 2017 was $80.2 million, a $1.2 million increase from the third quarter of 2017 and a $6.1 million increase from the fourth quarter of 2016, which was primarily driven by increased interest income on loans. The average balance of commercial real estate loans increased by $176.4 million to $3.03 billion from the third quarter of 2017, resulting in a $2.2 million increase in interest income, while the average balance of consumer real estate loans increased by $29.4 million to $1.21 billion for the same period, resulting in a $345,000 increase in interest income. Interest income earned on commercial and industrial loans declined by $402,000 for the quarter ended December 31, 2017 compared to the third quarter of 2017, primarily due to $295,000 in unamortized loan origination fees that were recognized as interest income during the third quarter of 2017 on the payoff of an energy loan, with no comparable transactions occurring during the fourth quarter of 2017, as well as a $5.0 million decrease in the average balance of the commercial and industrial loan portfolio during the fourth quarter of 2017. Interest income earned on Warehouse Purchase Program loans increased by $125,000 from the third quarter of 2017, due to a nine basis point increase in the average yield, which offset an $11.0 million decrease in the average balance during the fourth quarter of 2017. Interest income on loans for the fourth quarter of 2017 included $529,000 in accretion of purchase accounting fair value adjustments on acquired loans, which included $151,000 on acquired commercial real estate loans, $74,000 on acquired commercial and industrial loans, $2,000 on acquired construction and land loans and $302,000 on acquired consumer loans.
The $6.1 million increase in net interest income compared to the fourth quarter of 2016 was primarily due to a $10.9 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 the commercial and industrial portfolio and Warehouse Purchase Program loans. The average balance of commercial real estate loans increased by $431.8 million from the fourth quarter of 2016, resulting in a $5.6 million increase in interest income. The average balance of commercial and industrial loans increased by $181.4 million from the fourth quarter of 2016, while the average yield earned on this portfolio increased by 20 basis points for the same period, resulting in a $3.2 million increase in interest income. The average balance of consumer real estate loans increased by $154.1 million compared to the fourth quarter of 2016, which offset a six basis point decline in the average yield and led to a $1.6 million increase in interest income. Despite a $91.1 million decline in the average balance compared to the prior year period, interest income on Warehouse Purchase Program loans increased by $886,000 due to a 64 basis point increase in the average yield earned for the fourth quarter of 2017, compared to the same quarter last year.
Interest expense for the quarter ended December 31, 2017 increased by $413,000 compared to the linked quarter, which was primarily due to higher average deposit and borrowing rates, as well as increases of $53.9 million and $50.4 million in the average balances of savings and money market and interest-bearing demand deposits, respectively, compared to the third quarter of 2017. A $170.3 million decrease in the average balance of borrowings was partially offset by a 19 basis point increase in the average rate paid for borrowings, resulting in a $270,000 linked-quarter decrease in interest expense on borrowed funds.
Compared to the fourth quarter of 2016, interest expense for the quarter ended December 31, 2017 increased by $5.5 million, primarily due to higher average deposit and borrowing rates, as well as increases of $224.9 million and $86.9 million in the average balances of savings and money market and interest-bearing demand deposits, respectively, compared to the fourth quarter of 2016. A $193.3 million decrease in the average balance of borrowings from the fourth quarter of 2016 was partially offset by a 73 basis point increase in the average rate, resulting in a $1.3 million year-over-year decrease in interest expense on borrowed funds.
The net interest margin for the fourth quarter of 2017 was 3.78%, a seven basis point increase from the third quarter of 2017 and a ten basis point increase from the fourth quarter of 2016. The average yield on earning assets for the fourth quarter of 2017 was 4.53%, a nine basis point increase from the third quarter of 2017 and a 33 basis point increase from the fourth quarter of 2016. The cost of deposits for the fourth quarter of 2017 was 0.64%, up three basis points from the linked quarter and up 21 basis points from the fourth quarter of 2016.
Non-interest Income
Non-interest income for the fourth quarter of 2017 was $6.9 million, a $5.3 million decrease from the third quarter of 2017 and a $5.4 million decrease from the fourth quarter of 2016. Gain (loss) on sale and disposition of assets for the fourth quarter of 2017 included a $3.9 million write-down on a foreclosed property. Service charges and other fees decreased by $1.2 million from the third quarter of 2017, which was primarily due to a $541,000 decrease in title premiums and a $358,000 decrease in commercial loan fee income (consisting of syndication, arrangement, non-usage and pre-payment fees). The Company recognized $1.6 million in net gains on the sale of mortgage loans held for sale during the fourth quarter of 2017, which included gains recognized on $46.7 million of one-to four-family mortgage loans that were sold or committed for sale during the fourth quarter of 2017 and fair value changes on mortgage derivatives and mortgage fees collected, compared to $2.0 million in comparable net gains recorded during the third quarter of 2017 on $52.4 million of one-to four-family mortgage loans sold or committed for sale.
The $5.4 million decrease in non-interest income from the fourth quarter of 2016 was primarily due to a $3.1 million loss in gain (loss) on sale and disposition of assets due to the above-mentioned write-down on a foreclosed property recorded in the fourth quarter of 2017, compared to a $407,000 loss on the sale of a foreclosed property recorded in the fourth quarter of 2016. Service charges and other fees decreased by $1.8 million, which was driven by a $695,000 incentive payment received from Mastercard in the fourth quarter of 2016 for 2015 transaction performance, a $577,000 decrease in commercial loan fee income (consisting of syndication, arrangement, non-usage and pre-payment fees), and a $544,000 decrease in title premiums. Net gains on the sale of mortgage loans held for sale during the fourth quarter of 2017 decreased by $456,000 compared to the fourth quarter of 2016, which included gains recognized on $57.8 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 2016 period, compared to $46.7 million for the fourth quarter of 2017.
Non-interest Expenses
Non-interest expense for the quarter ended December 31, 2017 was $40.7 million, a $413,000 increase from the third quarter of 2017 and a $1.2 million increase from the fourth quarter of 2016. Occupancy and equipment expense increased by $477,000 compared to the third quarter of 2017, primarily resulting from an early termination fee collected from a tenant in the third quarter of 2017. Data processing expense increased by $450,000 on a linked-quarter basis as the Company transitions to outsourcing certain segments of its data processing, while advertising expense increased by $422,000 due to a higher number of events and sponsorships compared to the linked quarter. These increases in non-interest expense were reduced by a $1.0 million decrease in salaries and employee benefits expense from the third quarter of 2017, which was primarily driven by lower health care costs, as well as a reduction in performance incentive accruals based on increased non-performing assets, and were partially offset by decreased deferred salary costs related to loan originations that will be accounted for over the lives of the related loans.
The $1.2 million increase in non-interest expense from the fourth quarter of 2016 was primarily related to a $746,000 increase in data processing expense as the Company transitions to outsourcing certain segments of its data processing and a $411,000 increase in outside professional services expense related to higher consulting and legal costs.
Financial Condition - Loans
Gross loans held for investment at December 31, 2017, excluding Warehouse Purchase Program loans, grew $31.6 million from September 30, 2017, which included growth in commercial real estate, commercial and industrial and consumer real estate loans. Commercial real estate and commercial and industrial loans at December 31, 2017 increased by $2.8 million and $18.7 million, respectively, from September 30, 2017, and consumer real estate loans increased by $15.5 million for the same period. These linked-quarter increases were partially offset by a $4.7 million decline in construction and land loans and a $771,000 decline in other consumer loans.
Compared to December 31, 2016, gross loans held for investment, excluding Warehouse Purchase Program loans, grew $584.0 million, which included growth in commercial real estate, commercial and industrial and consumer real estate loans. On a year-over-year basis, commercial real estate, commercial and industrial and consumer real estate loans increased by $348.9 million, $122.1 million and $138.5 million, respectively. These year-over-year increases were partially offset by declines of $17.0 million and $8.5 million in construction and land and other consumer loans, respectively.
At December 31, 2017, Warehouse Purchase Program loans increased by $26.7 million compared to September 30, 2017 and by $99.2 million compared to December 31, 2016.
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 $531.7 million at December 31, 2017, up $4.9 million from $526.8 million at September 30, 2017 and up $4.5 million from $527.2 million at December 31, 2016. 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 from declining commodity prices. At December 31, 2017, "Midstream and Other" loans had a total outstanding balance of $15.4 million, down $12.4 million from $27.8 million at September 30, 2017 and down $23.6 million from $39.0 million at December 31, 2016.
Financial Condition - Deposits
Total deposits at December 31, 2017 increased by $7.3 million from September 30, 2017, which included growth of $139.7 million and $106.6 million in interest-bearing demand and non-interest-bearing demand deposits, respectively. These increases were partially offset by declines of $232.4 million and $6.6 million in savings and money market and time deposit balances, respectively.
Compared to December 31, 2016, total deposits increased by $402.2 million, which included growth in all deposit categories with the exception of time deposit balances, which declined by $514,000. Non-interest-bearing demand and interest-bearing demand deposits increased by $251.7 million and $126.1 million, respectively, while savings and money market deposits increased by $25.0 million from December 31, 2016.
Credit Quality | |||||||||||
At or For the Quarters Ended | |||||||||||
(unaudited) | Dec 31, 2017 | Sep 30, 2017 | Dec 31, 2016 | ||||||||
(Dollars in thousands) | |||||||||||
Net charge-offs | $ | 2,643 | $ | 12,347 | $ | 242 | |||||
Net charge-offs/Average loans held for investment, excluding Warehouse Purchase Program loans | 0.16 | % | 0.78 | % | 0.02 | % | |||||
Net charge-offs/Average loans held for investment | 0.14 | 0.67 | 0.01 | ||||||||
Provision for credit losses | $ | 3,743 | $ | 7,157 | $ | 7,833 | |||||
Non-performing loans ("NPLs") | 94,403 | 76,915 | 111,389 | ||||||||
NPLs/Total loans held for investment, excluding Warehouse Purchase Program loans | 1.42 | % | 1.16 | % | 1.84 | % | |||||
NPLs/Total loans held for investment | 1.21 | 0.99 | 1.56 | ||||||||
Non-performing assets ("NPAs") | $ | 102,835 | $ | 90,500 | $ | 122,227 | |||||
NPAs to total assets | 1.13 | % | 1.00 | % | 1.46 | % | |||||
NPAs/Loans held for investment and foreclosed assets, excluding Warehouse Purchase Program loans | 1.54 | 1.36 | 2.01 | ||||||||
NPAs/Loans held for investment and foreclosed assets | 1.32 | 1.17 | 1.71 | ||||||||
Allowance for loan losses | $ | 71,301 | $ | 70,044 | $ | 64,576 | |||||
Allowance for loan losses/Total loans held for investment, excluding Warehouse Purchase Program loans | 1.07 | % | 1.06 | % | 1.06 | % | |||||
Allowance for loan losses/Total loans held for investment | 0.91 | 0.90 | 0.91 | ||||||||
Allowance for loan losses/Total loans held for investment, excluding acquired loans & Warehouse Purchase Program loans1 | 1.14 | 1.13 | 1.18 | ||||||||
Allowance for loan losses/NPLs | 75.53 | 91.07 | 57.97 | ||||||||
1 | Excludes loans acquired in the Highlands and LegacyTexas transactions, which were initially recorded at fair value. |
The Company recorded a provision for credit losses of $3.7 million for the quarter ended December 31, 2017, a decrease of $3.4 million from the quarter ended September 30, 2017 and $4.1 million from the quarter ended December 31, 2016. The decrease in provision expense on a linked-quarter basis was primarily related to $11.9 million in charge-offs recorded during the third quarter of 2017 on the resolution of two reserve-based energy relationships, while the decrease in provision expense on a year-over-year basis was primarily due to increased qualitative factors that were applied during the 2016 period related to some negative migration in asset quality during the fourth quarter of 2016.
The below table shows criticized (rated "special mention") and classified (rated "substandard" or "doubtful") loans at December 31, 2017, September 30, 2017 and December 31, 2016.
Dec 31, 2017 | Sep 30, 2017 | Dec 31, 2016 | Linked-Quarter Change | Year-over-Year Change | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Commercial real estate | $ | 30,656 | $ | 28,187 | $ | 7,972 | $ | 2,469 | $ | 22,684 | |||||||||
Commercial and industrial, excluding energy | 15,496 | 16,300 | 13,316 | (804) | 2,180 | ||||||||||||||
Energy | 27,665 | 27,754 | 141,794 | (89) | (114,129) | ||||||||||||||
Consumer | 1,409 | 1,491 | 2,120 | (82) | (711) | ||||||||||||||
Total criticized (all performing) | $ | 75,226 | $ | 73,732 | $ | 165,202 | $ | 1,494 | $ | (89,976) | |||||||||
Commercial real estate | $ | 3,893 | $ | 7,094 | $ | 8,446 | $ | (3,201) | $ | (4,553) | |||||||||
Commercial and industrial, excluding energy | 1,295 | 14,516 | 17,215 | (13,221) | (15,920) | ||||||||||||||
Energy | 11,352 | 25,589 | — | (14,237) | 11,352 | ||||||||||||||
Construction and land | — | — | 86 | — | (86) | ||||||||||||||
Consumer | 2,823 | 2,391 | 2,559 | 432 | 264 | ||||||||||||||
Total classified performing | 19,363 | 49,590 | 28,306 | (30,227) | (8,943) | ||||||||||||||
Commercial real estate | 4,134 | 4,064 | 5,195 | 70 | (1,061) | ||||||||||||||
Commercial and industrial, excluding energy | 25,579 | 14,548 | 19,088 | 11,031 | 6,491 | ||||||||||||||
Energy | 58,424 | 51,012 | 67,576 | 7,412 | (9,152) | ||||||||||||||
Construction and land | — | — | 11,385 | — | (11,385) | ||||||||||||||
Consumer | 6,266 | 7,291 | 8,145 | (1,025) | (1,879) | ||||||||||||||
Total classified non-performing | 94,403 | 76,915 | 111,389 | 17,488 | (16,986) | ||||||||||||||
Total classified loans | $ | 113,766 | $ | 126,505 | $ | 139,695 | $ | (12,739) | $ | (25,929) | |||||||||
At December 31, 2017, the allowance for loan losses allocated to the Company's $547.1 million energy loan portfolio totaled $20.7 million, while the allowance for loan losses allocated to the Company's $38.0 million corporate healthcare finance portfolio totaled $3.4 million.
Conference Call
The Company will host an investor conference call to review the results on Wednesday, January 24, 2018 at 8 a.m. Central Time. Participants may pre-register for the call by visiting http://dpregister.com/10115614 and will receive a unique PIN that can be used when dialing in for the call. This will allow attendees to enter the call immediately. Alternatively, participants may call (toll-free) 1-877-513-4119 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) 1-855-669-9657.
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 #10115614. This replay will be available until February 24, 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 44 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 | |||||||||||||||||||
(Dollars in thousands) | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||
ASSETS | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
Cash and due from financial institutions | $ | 61,713 | $ | 58,776 | $ | 61,989 | $ | 60,073 | $ | 59,823 | |||||||||
Short-term interest-bearing deposits in other financial institutions | 231,743 | 268,567 | 256,251 | 294,955 | 229,389 | ||||||||||||||
Total cash and cash equivalents | 293,456 | 327,343 | 318,240 | 355,028 | 289,212 | ||||||||||||||
Securities available for sale, at fair value | 419,717 | 410,450 | 397,957 | 381,831 | 354,515 | ||||||||||||||
Securities held to maturity | 173,509 | 180,968 | 191,578 | 200,541 | 210,387 | ||||||||||||||
Total securities | 593,226 | 591,418 | 589,535 | 582,372 | 564,902 | ||||||||||||||
Loans held for sale | 16,707 | 25,955 | 19,374 | 19,315 | 21,279 | ||||||||||||||
Loans held for investment: | |||||||||||||||||||
Loans held for investment - Warehouse Purchase Program | 1,154,588 | 1,127,929 | 1,256,742 | 846,973 | 1,055,341 | ||||||||||||||
Loans held for investment | 6,649,450 | 6,617,892 | 6,409,259 | 6,265,263 | 6,065,423 | ||||||||||||||
Gross loans | 7,820,745 | 7,771,776 | 7,685,375 | 7,131,551 | 7,142,043 | ||||||||||||||
Less: allowance for loan losses and deferred fees on loans held for investment | (64,921) | (64,632) | (70,642) | (67,834) | (66,827) | ||||||||||||||
Net loans | 7,755,824 | 7,707,144 | 7,614,733 | 7,063,717 | 7,075,216 | ||||||||||||||
FHLB stock and other restricted securities, at cost | 64,790 | 50,333 | 56,618 | 43,156 | 43,266 | ||||||||||||||
Bank-owned life insurance | 57,684 | 57,383 | 57,078 | 56,768 | 56,477 | ||||||||||||||
Premises and equipment, net | 69,693 | 70,052 | 71,068 | 72,312 | 74,226 | ||||||||||||||
Goodwill | 178,559 | 178,559 | 178,559 | 178,559 | 178,559 | ||||||||||||||
Other assets | 72,964 | 86,380 | 84,544 | 84,630 | 80,397 | ||||||||||||||
Total assets | $ | 9,086,196 | $ | 9,068,612 | $ | 8,970,375 | $ | 8,436,542 | $ | 8,362,255 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
Non-interest-bearing demand | $ | 1,635,622 | $ | 1,529,052 | $ | 1,522,856 | $ | 1,449,656 | $ | 1,383,951 | |||||||||
Interest-bearing demand | 1,029,375 | 889,627 | 893,544 | 873,085 | 903,314 | ||||||||||||||
Savings and money market | 2,735,296 | 2,967,672 | 2,685,627 | 2,679,538 | 2,710,307 | ||||||||||||||
Time | 1,367,390 | 1,374,017 | 1,460,479 | 1,377,367 | 1,367,904 | ||||||||||||||
Total deposits | 6,767,683 | 6,760,368 | 6,562,506 | 6,379,646 | 6,365,476 | ||||||||||||||
FHLB advances | 1,043,163 | 998,146 | 1,151,682 | 830,195 | 833,682 | ||||||||||||||
Repurchase agreements | 84,676 | 81,073 | 73,433 | 76,880 | 86,691 | ||||||||||||||
Subordinated debt | 134,522 | 134,400 | 134,277 | 134,155 | 134,032 | ||||||||||||||
Accrued expenses and other liabilities | 96,278 | 144,533 | 123,194 | 115,749 | 57,009 | ||||||||||||||
Total liabilities | 8,126,322 | 8,118,520 | 8,045,092 | 7,536,625 | 7,476,890 | ||||||||||||||
Common stock | 481 | 480 | 480 | 479 | 479 | ||||||||||||||
Additional paid-in capital | 603,884 | 598,820 | 595,730 | 592,159 | 589,408 | ||||||||||||||
Retained earnings | 370,858 | 363,890 | 342,384 | 321,648 | 310,641 | ||||||||||||||
Accumulated other comprehensive income (loss), net | (3,429) | (1,045) | (1,125) | (2,051) | (2,713) | ||||||||||||||
Unearned Employee Stock Ownership Plan (ESOP) shares | (11,920) | (12,053) | (12,186) | (12,318) | (12,450) | ||||||||||||||
Total shareholders' equity | 959,874 | 950,092 | 925,283 | 899,917 | 885,365 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 9,086,196 | $ | 9,068,612 | $ | 8,970,375 | $ | 8,436,542 | $ | 8,362,255 | |||||||||
LegacyTexas Financial Group, Inc. | |||||||||||||||||||||||||||||||
Consolidated Quarterly Statements of Income (unaudited) | |||||||||||||||||||||||||||||||
For the Quarters Ended | Fourth Quarter 2017 Compared to: | ||||||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Third Quarter 2017 | Fourth Quarter 2016 | |||||||||||||||||||||||||
Interest and dividend income | (Dollars in thousands) | ||||||||||||||||||||||||||||||
Loans, including fees | $ | 91,334 | $ | 89,084 | $ | 83,917 | $ | 83,103 | $ | 80,394 | $ | 2,250 | 2.5 | % | $ | 10,940 | 13.6 | % | |||||||||||||
Taxable securities | 2,819 | 2,694 | 2,725 | 2,562 | 2,269 | 125 | 4.6 | 550 | 24.2 | ||||||||||||||||||||||
Nontaxable securities | 700 | 713 | 739 | 755 | 756 | (13) | (1.8) | (56) | (7.4) | ||||||||||||||||||||||
Interest-bearing deposits in other financial institutions | 798 | 1,524 | 955 | 732 | 693 | (726) | (47.6) | 105 | 15.2 | ||||||||||||||||||||||
FHLB and Federal Reserve Bank stock and other | 460 | 448 | 411 | 384 | 385 | 12 | 2.7 | 75 | 19.5 | ||||||||||||||||||||||
96,111 | 94,463 | 88,747 | 87,536 | 84,497 | 1,648 | 1.7 | 11,614 | 13.7 | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||||
Deposits | 10,954 | 10,271 | 8,359 | 7,110 | 6,734 | 683 | 6.6 | 4,220 | 62.7 | ||||||||||||||||||||||
FHLB advances | 2,647 | 2,944 | 2,427 | 1,632 | 1,526 | (297) | (10.1) | 1,121 | 73.5 | ||||||||||||||||||||||
Repurchase agreements and other borrowings | 2,311 | 2,284 | 2,241 | 2,246 | 2,153 | 27 | 1.2 | 158 | 7.3 | ||||||||||||||||||||||
15,912 | 15,499 | 13,027 | 10,988 | 10,413 | 413 | 2.7 | 5,499 | 52.8 | |||||||||||||||||||||||
Net interest income | 80,199 | 78,964 | 75,720 | 76,548 | 74,084 | 1,235 | 1.6 | 6,115 | 8.3 | ||||||||||||||||||||||
Provision for credit losses | 3,743 | 7,157 | 6,255 | 22,301 | 7,833 | (3,414) | (47.7) | (4,090) | (52.2) | ||||||||||||||||||||||
Net interest income after provision for credit losses | 76,456 | 71,807 | 69,465 | 54,247 | 66,251 | 4,649 | 6.5 | 10,205 | 15.4 | ||||||||||||||||||||||
Non-interest income | |||||||||||||||||||||||||||||||
Service charges and other fees | 8,124 | 9,291 | 9,896 | 8,431 | 9,912 | (1,167) | (12.6) | (1,788) | (18.0) | ||||||||||||||||||||||
Net gain on sale of mortgage loans held for sale | 1,556 | 1,982 | 2,156 | 1,628 | 2,012 | (426) | (21.5) | (456) | (22.7) | ||||||||||||||||||||||
Bank-owned life insurance income | 430 | 435 | 440 | 422 | 436 | (5) | (1.1) | (6) | (1.4) | ||||||||||||||||||||||
Net gain (loss) on securities transactions | — | (20) | — | (19) | (6) | 20 | N/M | 6 | N/M | ||||||||||||||||||||||
Gain (loss) on sale and disposition of assets | (3,480) | 352 | 157 | 1,399 | (412) | (3,832) | N/M | (3,068) | 744.7 | ||||||||||||||||||||||
Other | 271 | 186 | (324) | 269 | 335 | 85 | 45.7 | (64) | (19.1) | ||||||||||||||||||||||
6,901 | 12,226 | 12,325 | 12,130 | 12,277 | (5,325) | (43.6) | (5,376) | (43.8) | |||||||||||||||||||||||
Non-interest expense | (Dollars in thousands) | ||||||||||||||||||||||||||||||
Salaries and employee benefits | 23,126 | 24,175 | 23,391 | 24,444 | 23,446 | (1,049) | (4.3) | (320) | (1.4) | ||||||||||||||||||||||
Advertising | 1,402 | 980 | 1,179 | 817 | 1,039 | 422 | 43.1 | 363 | 34.9 | ||||||||||||||||||||||
Occupancy and equipment | 3,776 | 3,299 | 3,656 | 3,654 | 3,715 | 477 | 14.5 | 61 | 1.6 | ||||||||||||||||||||||
Outside professional services | 1,300 | 1,230 | 1,203 | 1,156 | 889 | 70 | 5.7 | 411 | 46.2 | ||||||||||||||||||||||
Regulatory assessments | 1,212 | 1,011 | 1,271 | 985 | 1,316 | 201 | 19.9 | (104) | (7.9) | ||||||||||||||||||||||
Data processing | 4,737 | 4,287 | 3,877 | 3,895 | 3,991 | 450 | 10.5 | 746 | 18.7 | ||||||||||||||||||||||
Office operations | 2,180 | 2,378 | 2,404 | 2,276 | 2,524 | (198) | (8.3) | (344) | (13.6) | ||||||||||||||||||||||
Other | 2,975 | 2,935 | 2,608 | 2,525 | 2,628 | 40 | 1.4 | 347 | 13.2 | ||||||||||||||||||||||
40,708 | 40,295 | 39,589 | 39,752 | 39,548 | 413 | 1.0 | 1,160 | 2.9 | |||||||||||||||||||||||
Income before income tax expense | 42,649 | 43,738 | 42,201 | 26,625 | 38,980 | (1,089) | (2.5) | 3,669 | 9.4 | ||||||||||||||||||||||
Income tax expense | 27,989 | 15,029 | 14,266 | 8,435 | 13,675 | 12,960 | 86.2 | 14,314 | 104.7 | ||||||||||||||||||||||
Net income | $ | 14,660 | $ | 28,709 | $ | 27,935 | $ | 18,190 | $ | 25,305 | $ | (14,049) | (48.9) | % | $ | (10,645) | (42.1) | % | |||||||||||||
N/M - Not meaningful |
LegacyTexas Financial Group, Inc. | |||||||||||
Selected Quarterly Financial Highlights (unaudited) | |||||||||||
At or For the Quarters Ended | |||||||||||
December 31, | September 30, | December 31, | |||||||||
SHARE DATA: | (Dollars in thousands, except per share amounts) | ||||||||||
Weighted average common shares outstanding- basic | 46,729,160 | 46,664,233 | 46,346,053 | ||||||||
Weighted average common shares outstanding- diluted | 47,290,308 | 47,158,729 | 46,873,215 | ||||||||
Shares outstanding at end of period | 48,117,390 | 48,040,059 | 47,876,198 | ||||||||
Income available to common shareholders1 | $ | 14,613 | $ | 28,617 | $ | 25,174 | |||||
Basic earnings per common share | 0.31 | 0.61 | 0.54 | ||||||||
Basic core (non-GAAP) earnings per common share2 | 0.60 | 0.61 | 0.55 | ||||||||
Diluted earnings per common share | 0.31 | 0.61 | 0.54 | ||||||||
Dividends declared per share | 0.16 | 0.15 | 0.15 | ||||||||
Total shareholders' equity | 959,874 | 950,092 | 885,365 | ||||||||
Common shareholders' equity per share (book value per share) | 19.95 | 19.78 | 18.49 | ||||||||
Tangible book value per share - Non-GAAP2 | 16.23 | 16.05 | 14.75 | ||||||||
Market value per share for the quarter: | |||||||||||
High | 43.03 | 39.92 | 43.81 | ||||||||
Low | 36.73 | 34.87 | 31.59 | ||||||||
Close | 42.21 | 39.92 | 43.06 | ||||||||
KEY RATIOS: | |||||||||||
Return on average common shareholders' equity | 6.09 | % | 12.21 | % | 11.50 | % | |||||
Core (non-GAAP) return on average common shareholders' equity2 | 11.69 | 12.11 | 11.50 | ||||||||
Return on average assets | 0.66 | 1.29 | 1.20 | ||||||||
Core (non-GAAP) return on average assets2 | 1.27 | 1.28 | 1.20 | ||||||||
Efficiency ratio (GAAP basis) | 46.74 | 44.19 | 45.79 | ||||||||
Core (non-GAAP) efficiency ratio2 | 46.74 | 44.37 | 45.79 | ||||||||
Estimated Tier 1 common equity risk-based capital ratio3 | 9.40 | 9.17 | 9.13 | ||||||||
Estimated total risk-based capital ratio3 | 11.87 | 11.61 | 11.71 | ||||||||
Estimated Tier 1 risk-based capital ratio3 | 9.54 | 9.32 | 9.28 | ||||||||
Estimated Tier 1 leverage ratio3 | 9.17 | 9.01 | 8.73 | ||||||||
Total equity to total assets | 10.56 | 10.48 | 10.59 | ||||||||
Tangible equity to tangible assets - Non-GAAP2 | 8.77 | 8.67 | 8.63 | ||||||||
Number of employees- full-time equivalent | 853 | 864 | 885 | ||||||||
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 Full Year Financial Highlights (unaudited) | |||||||
At or For the Years Ended | |||||||
December 31, 2017 | December 31, 2016 | ||||||
SHARE DATA: | (Dollars in thousands, except per share amounts) | ||||||
Basic earnings per common share | $ | 1.91 | $ | 2.11 | |||
Basic core (non-GAAP) earnings per common share1 | 2.19 | 2.08 | |||||
Diluted earnings per common share | 1.89 | 2.09 | |||||
Dividends declared per share | 0.61 | 0.58 | |||||
KEY RATIOS: | |||||||
Return on average common shareholders' equity | 9.62 | % | 11.52 | % | |||
Core (non-GAAP) return on average common shareholders' equity1 | 10.96 | 11.34 | |||||
Return on average assets | 1.04 | 1.24 | |||||
Core (non-GAAP) return on average assets1 | 1.18 | 1.22 | |||||
Efficiency ratio (GAAP basis) | 45.17 | 46.79 | |||||
Core (non-GAAP) efficiency ratio1 | 45.38 | 47.30 | |||||
1 | See the section labeled "Supplemental Information- Non-GAAP Financial Measures" at the end of this document. |
LegacyTexas Financial Group, Inc. | |||||||||||||||||||
Selected Loan Data (unaudited) | |||||||||||||||||||
At the Quarter Ended | |||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
Loans held for investment: | (Dollars in thousands) | ||||||||||||||||||
Commercial real estate | $ | 3,019,339 | $ | 3,016,533 | $ | 2,817,443 | $ | 2,786,477 | $ | 2,670,455 | |||||||||
Warehouse Purchase Program | 1,154,588 | 1,127,929 | 1,256,742 | 846,973 | 1,055,341 | ||||||||||||||
Commercial and industrial | 2,093,307 | 2,074,635 | 2,119,678 | 2,028,347 | 1,971,160 | ||||||||||||||
Construction and land | 277,864 | 282,536 | 270,050 | 290,258 | 294,894 | ||||||||||||||
Consumer real estate | 1,213,434 | 1,197,911 | 1,154,353 | 1,109,459 | 1,074,923 | ||||||||||||||
Other consumer | 45,506 | 46,277 | 47,735 | 50,722 | 53,991 | ||||||||||||||
Gross loans held for investment | $ | 7,804,038 | $ | 7,745,821 | $ | 7,666,001 | $ | 7,112,236 | $ | 7,120,764 | |||||||||
Non-performing assets: | |||||||||||||||||||
Commercial real estate | $ | 4,134 | $ | 4,064 | $ | 4,201 | $ | 4,337 | $ | 5,195 | |||||||||
Commercial and industrial | 84,003 | 65,560 | 87,599 | 94,503 | 86,664 | ||||||||||||||
Construction and land | — | — | — | 310 | 11,385 | ||||||||||||||
Consumer real estate | 6,190 | 7,175 | 7,265 | 7,193 | 7,987 | ||||||||||||||
Other consumer | 76 | 116 | 131 | 1,061 | 158 | ||||||||||||||
Total non-performing loans | 94,403 | 76,915 | 99,196 | 107,404 | 111,389 | ||||||||||||||
Foreclosed assets | 8,432 | 13,585 | 13,283 | 13,654 | 10,838 | ||||||||||||||
Total non-performing assets | $ | 102,835 | $ | 90,500 | $ | 112,479 | $ | 121,058 | $ | 122,227 | |||||||||
Total non-performing assets to total assets | 1.13 | % | 1.00 | % | 1.25 | % | 1.43 | % | 1.46 | % | |||||||||
Total non-performing loans to total loans held for investment, excluding Warehouse Purchase Program loans | 1.42 | % | 1.16 | % | 1.55 | % | 1.71 | % | 1.84 | % | |||||||||
Total non-performing loans to total loans held for investment | 1.21 | % | 0.99 | % | 1.29 | % | 1.51 | % | 1.56 | % | |||||||||
Allowance for loan losses to non-performing loans | 75.53 | % | 91.07 | % | 75.70 | % | 65.79 | % | 57.97 | % | |||||||||
Allowance for loan losses to total loans held for investment, excluding Warehouse Purchase Program loans | 1.07 | % | 1.06 | % | 1.17 | % | 1.13 | % | 1.06 | % | |||||||||
Allowance for loan losses to total loans held for investment | 0.91 | % | 0.90 | % | 0.98 | % | 0.99 | % | 0.91 | % | |||||||||
Allowance for loan losses to total loans held for investment, excluding acquired loans and Warehouse Purchase Program loans1 | 1.14 | % | 1.13 | % | 1.26 | % | 1.23 | % | 1.18 | % | |||||||||
Troubled debt restructured loans ("TDRs"): | (Dollars in thousands) | ||||||||||||||||||
Performing TDRs: | |||||||||||||||||||
Commercial real estate | $ | 145 | $ | 147 | $ | 150 | $ | 152 | $ | 154 | |||||||||
Commercial and industrial | 2 | — | — | — | — | ||||||||||||||
Consumer real estate | 600 | 263 | 265 | 267 | 269 | ||||||||||||||
Other consumer | 21 | 20 | 23 | 27 | 31 | ||||||||||||||
Total performing TDRs | $ | 768 | $ | 430 | $ | 438 | $ | 446 | $ | 454 | |||||||||
Non-performing TDRs:2 | |||||||||||||||||||
Commercial real estate | $ | 36 | $ | 37 | $ | 39 | $ | 40 | $ | 808 | |||||||||
Commercial and industrial | 16,328 | 7,984 | 22,946 | 23,338 | 9,181 | ||||||||||||||
Consumer real estate | 916 | 1,343 | 1,401 | 1,618 | 1,669 | ||||||||||||||
Other consumer | 14 | 25 | 31 | 38 | 43 | ||||||||||||||
Total non-performing TDRs | $ | 17,294 | $ | 9,389 | $ | 24,417 | $ | 25,034 | $ | 11,701 | |||||||||
Allowance for loan losses: | |||||||||||||||||||
Balance at beginning of period | $ | 70,044 | $ | 75,091 | $ | 70,656 | $ | 64,576 | $ | 57,318 | |||||||||
Provision expense for loans | 3,900 | 7,300 | 6,200 | 22,700 | 7,500 | ||||||||||||||
Charge-offs | (2,840) | (12,496) | (2,160) | (17,246) | (367) | ||||||||||||||
Recoveries | 197 | 149 | 395 | 626 | 125 | ||||||||||||||
Balance at end of period | $ | 71,301 | $ | 70,044 | $ | 75,091 | $ | 70,656 | $ | 64,576 | |||||||||
Net charge-offs (recoveries): | |||||||||||||||||||
Commercial real estate | $ | — | $ | — | $ | — | $ | (189) | $ | (5) | |||||||||
Commercial and industrial | 2,386 | 12,215 | 1,350 | 16,490 | 34 | ||||||||||||||
Construction and land | — | — | (75) | 418 | — | ||||||||||||||
Consumer real estate | 36 | (10) | 5 | 23 | 20 | ||||||||||||||
Other consumer | 221 | 142 | 485 | (122) | 193 | ||||||||||||||
Total net charge-offs | $ | 2,643 | $ | 12,347 | $ | 1,765 | $ | 16,620 | $ | 242 | |||||||||
Allowance for off-balance sheet lending-related commitments | |||||||||||||||||||
Provision expense (benefit) for credit losses | $ | (157) | $ | (143) | $ | 55 | $ | (399) | $ | 333 | |||||||||
1 | Excludes loans acquired in the Highlands and LegacyTexas 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 | |||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
Loans: | (Dollars in thousands) | ||||||||||||||||||
Commercial real estate | $ | 3,030,778 | $ | 2,854,343 | $ | 2,781,472 | $ | 2,724,167 | $ | 2,599,006 | |||||||||
Warehouse Purchase Program | 1,009,667 | 1,020,706 | 896,018 | 697,316 | 1,100,723 | ||||||||||||||
Commercial and industrial | 2,017,909 | 2,022,859 | 1,995,882 | 1,969,766 | 1,836,519 | ||||||||||||||
Construction and land | 287,965 | 279,189 | 278,986 | 290,856 | 300,460 | ||||||||||||||
Consumer real estate | 1,206,371 | 1,176,955 | 1,126,744 | 1,090,700 | 1,052,231 | ||||||||||||||
Other consumer | 46,094 | 47,169 | 49,721 | 52,655 | 56,480 | ||||||||||||||
Less: deferred fees and allowance for loan loss | (65,612) | (70,048) | (68,779) | (65,904) | (58,723) | ||||||||||||||
Total loans held for investment | 7,533,172 | 7,331,173 | 7,060,044 | 6,759,556 | 6,886,696 | ||||||||||||||
Loans held for sale | 20,642 | 23,154 | 22,581 | 12,667 | 22,509 | ||||||||||||||
Securities | 648,917 | 652,841 | 645,605 | 629,366 | 620,775 | ||||||||||||||
Overnight deposits | 223,608 | 444,310 | 324,406 | 332,664 | 481,451 | ||||||||||||||
Total interest-earning assets | $ | 8,426,339 | $ | 8,451,478 | $ | 8,052,636 | $ | 7,734,253 | $ | 8,011,431 | |||||||||
Deposits: | |||||||||||||||||||
Interest-bearing demand | $ | 925,506 | $ | 875,097 | $ | 849,633 | $ | 855,075 | $ | 838,631 | |||||||||
Savings and money market | 2,911,726 | 2,857,790 | 2,703,291 | 2,652,866 | 2,686,847 | ||||||||||||||
Time | 1,353,467 | 1,418,108 | 1,355,681 | 1,314,607 | 1,407,415 | ||||||||||||||
FHLB advances and other borrowings | 1,007,747 | 1,178,031 | 1,142,998 | 1,040,835 | 1,201,004 | ||||||||||||||
Total interest-bearing liabilities | $ | 6,198,446 | $ | 6,329,026 | $ | 6,051,603 | $ | 5,863,383 | $ | 6,133,897 | |||||||||
Total assets | $ | 8,865,517 | $ | 8,889,914 | $ | 8,491,696 | $ | 8,172,072 | $ | 8,445,209 | |||||||||
Non-interest-bearing demand deposits | $ | 1,568,665 | $ | 1,481,654 | $ | 1,410,566 | $ | 1,341,315 | $ | 1,349,561 | |||||||||
Total deposits | $ | 6,759,364 | $ | 6,632,649 | $ | 6,319,171 | $ | 6,163,863 | $ | 6,282,454 | |||||||||
Total shareholders' equity | $ | 963,512 | $ | 940,606 | $ | 914,564 | $ | 900,118 | $ | 880,250 | |||||||||
Yields/Rates: | |||||||||||||||||||
Loans: | |||||||||||||||||||
Commercial real estate | 5.05 | % | 5.06 | % | 5.08 | % | 5.05 | % | 5.05 | % | |||||||||
Warehouse Purchase Program | 3.93 | % | 3.84 | % | 3.70 | % | 3.50 | % | 3.29 | % | |||||||||
Commercial and industrial | 4.83 | % | 4.89 | % | 4.63 | % | 5.40 | % | 4.63 | % | |||||||||
Construction and land | 5.04 | % | 5.16 | % | 5.12 | % | 5.18 | % | 5.08 | % | |||||||||
Consumer real estate | 4.54 | % | 4.54 | % | 4.59 | % | 4.54 | % | 4.60 | % | |||||||||
Other consumer | 5.67 | % | 5.64 | % | 5.57 | % | 5.51 | % | 5.66 | % | |||||||||
Total loans held for investment | 4.81 | % | 4.81 | % | 4.75 | % | 4.97 | % | 4.64 | % | |||||||||
Loans held for sale | 3.92 | % | 3.89 | % | 3.99 | % | 3.85 | % | 3.41 | % | |||||||||
Securities | 2.45 | % | 2.36 | % | 2.40 | % | 2.35 | % | 2.20 | % | |||||||||
Overnight deposits | 1.42 | % | 1.36 | % | 1.18 | % | 0.89 | % | 0.57 | % | |||||||||
Total interest-earning assets | 4.53 | % | 4.44 | % | 4.42 | % | 4.58 | % | 4.20 | % | |||||||||
Deposits: | |||||||||||||||||||
Interest-bearing demand | 0.71 | % | 0.67 | % | 0.58 | % | 0.53 | % | 0.50 | % | |||||||||
Savings and money market | 0.70 | % | 0.68 | % | 0.56 | % | 0.46 | % | 0.39 | % | |||||||||
Time | 1.21 | % | 1.10 | % | 0.99 | % | 0.91 | % | 0.86 | % | |||||||||
FHLB advances and other borrowings | 1.95 | % | 1.76 | % | 1.64 | % | 1.51 | % | 1.22 | % | |||||||||
Total interest-bearing liabilities | 1.02 | % | 0.97 | % | 0.86 | % | 0.76 | % | 0.68 | % | |||||||||
Net interest spread | 3.51 | % | 3.47 | % | 3.56 | % | 3.82 | % | 3.52 | % | |||||||||
Net interest margin | 3.78 | % | 3.71 | % | 3.77 | % | 4.00 | % | 3.68 | % | |||||||||
Cost of deposits (including non-interest-bearing demand) | 0.64 | % | 0.61 | % | 0.53 | % | 0.47 | % | 0.43 | % | |||||||||
LegacyTexas Financial Group, Inc. | |||||||||||||||||||
Supplemental Information- Non-GAAP Financial Measures | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
At or For the Quarters Ended | |||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
Reconciliation of Core (non-GAAP) to GAAP Net Income and Earnings per Share (calculated net of estimated tax rate of 35%, except as otherwise noted) | (Dollars in thousands, except per share amounts) | ||||||||||||||||||
GAAP net income available to common shareholders1 | $ | 14,613 | $ | 28,617 | $ | 27,837 | $ | 18,111 | $ | 25,174 | |||||||||
Distributed and undistributed earnings to participating securities1 | 47 | 92 | 98 | 79 | 131 | ||||||||||||||
GAAP net income | 14,660 | 28,709 | 27,935 | 18,190 | 25,305 | ||||||||||||||
(Gain) loss on one-time tax adjustments2 | 13,493 | — | — | — | — | ||||||||||||||
(Gain) on sale of branch locations and land | — | (237) | — | (847) | — | ||||||||||||||
Core (non-GAAP) net income | $ | 28,153 | $ | 28,472 | $ | 27,935 | $ | 17,343 | $ | 25,305 | |||||||||
Average shares for basic earnings per share | 46,729,160 | 46,664,233 | 46,596,467 | 46,453,658 | 46,346,053 | ||||||||||||||
Basic GAAP earnings per share | $ | 0.31 | $ | 0.61 | $ | 0.60 | $ | 0.39 | $ | 0.54 | |||||||||
Basic core (non-GAAP) earnings per share | $ | 0.60 | $ | 0.61 | $ | 0.60 | $ | 0.37 | $ | 0.55 | |||||||||
Average shares for diluted earnings per share | 47,290,308 | 47,158,729 | 47,005,554 | 47,060,306 | 46,873,215 | ||||||||||||||
Diluted GAAP earnings per share | $ | 0.31 | $ | 0.61 | $ | 0.59 | $ | 0.38 | $ | 0.54 | |||||||||
Diluted core (non-GAAP) earnings per share | $ | 0.60 | $ | 0.60 | $ | 0.59 | $ | 0.37 | $ | 0.54 | |||||||||
Reconciliation of Core (non-GAAP) to GAAP Non-Interest Income (gross of tax) | |||||||||||||||||||
GAAP non-interest income | $ | 6,901 | $ | 12,226 | $ | 12,325 | $ | 12,130 | $ | 12,277 | |||||||||
(Gain) on sale of branch locations and land | — | (365) | — | (1,304) | — | ||||||||||||||
Core (non-GAAP) non-interest income | $ | 6,901 | $ | 11,861 | $ | 12,325 | $ | 10,826 | $ | 12,277 | |||||||||
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 | 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 | |||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
Reconciliation of Core (non-GAAP) to GAAP Efficiency Ratio (gross of tax) | (Dollars in thousands) | ||||||||||||||||||
GAAP efficiency ratio: | |||||||||||||||||||
Non-interest expense | $ | 40,708 | $ | 40,295 | $ | 39,589 | $ | 39,752 | $ | 39,548 | |||||||||
Net interest income plus non-interest income | 87,100 | 91,190 | 88,045 | 88,678 | 86,361 | ||||||||||||||
Efficiency ratio- GAAP basis | 46.74 | % | 44.19 | % | 44.96 | % | 44.83 | % | 45.79 | % | |||||||||
Core (non-GAAP) efficiency ratio: | |||||||||||||||||||
Non-interest expense | $ | 40,708 | $ | 40,295 | $ | 39,589 | $ | 39,752 | $ | 39,548 | |||||||||
Net interest income plus core (non-GAAP) non-interest income | 87,100 | 90,825 | 88,045 | 87,374 | 86,361 | ||||||||||||||
Efficiency ratio- core (non-GAAP) basis | 46.74 | % | 44.37 | % | 44.96 | % | 45.50 | % | 45.79 | % | |||||||||
Calculation of Tangible Book Value per Share: | |||||||||||||||||||
Total shareholders' equity | $ | 959,874 | $ | 950,092 | $ | 925,283 | $ | 899,917 | $ | 885,365 | |||||||||
Less: Goodwill | (178,559) | (178,559) | (178,559) | (178,559) | (178,559) | ||||||||||||||
Identifiable intangible assets, net | (402) | (463) | (524) | (585) | (665) | ||||||||||||||
Total tangible shareholders' equity | $ | 780,913 | $ | 771,070 | $ | 746,200 | $ | 720,773 | $ | 706,141 | |||||||||
Shares outstanding at end of period | 48,117,390 | 48,040,059 | 48,009,379 | 47,940,133 | 47,876,198 | ||||||||||||||
Book value per share- GAAP | $ | 19.95 | $ | 19.78 | $ | 19.27 | $ | 18.77 | $ | 18.49 | |||||||||
Tangible book value per share- Non-GAAP | 16.23 | 16.05 | 15.54 | 15.03 | 14.75 | ||||||||||||||
Calculation of Tangible Equity to Tangible Assets: | |||||||||||||||||||
Total assets | $ | 9,086,196 | $ | 9,068,612 | $ | 8,970,375 | $ | 8,436,542 | $ | 8,362,255 | |||||||||
Less: Goodwill | (178,559) | (178,559) | (178,559) | (178,559) | (178,559) | ||||||||||||||
Identifiable intangible assets, net | (402) | (463) | (524) | (585) | (665) | ||||||||||||||
Total tangible assets | $ | 8,907,235 | $ | 8,889,590 | $ | 8,791,292 | $ | 8,257,398 | $ | 8,183,031 | |||||||||
Equity to assets- GAAP | 10.56 | % | 10.48 | % | 10.31 | % | 10.67 | % | 10.59 | % | |||||||||
Tangible equity to tangible assets- Non-GAAP | 8.77 | 8.67 | 8.49 | 8.73 | 8.63 | ||||||||||||||
Calculation of Return on Average Assets and Return on Average Equity Ratios (GAAP and Core) (unaudited) | |||||||||||||||||||
Net income | $ | 14,660 | $ | 28,709 | $ | 27,935 | $ | 18,190 | $ | 25,305 | |||||||||
Core (non-GAAP) net income | 28,153 | 28,472 | 27,935 | 17,343 | 25,305 | ||||||||||||||
Average total equity | 963,512 | 940,606 | 914,564 | 900,118 | 880,250 | ||||||||||||||
Average total assets | 8,865,517 | 8,889,914 | 8,491,696 | 8,172,072 | 8,445,209 | ||||||||||||||
Return on average common shareholders' equity | 6.09 | % | 12.21 | % | 12.22 | % | 8.08 | % | 11.50 | % | |||||||||
Core (non-GAAP) return on average common shareholders' equity | 11.69 | 12.11 | 12.22 | 7.71 | 11.50 | ||||||||||||||
Return on average assets | 0.66 | 1.29 | 1.32 | 0.89 | 1.20 | ||||||||||||||
Core (non-GAAP) return on average assets | 1.27 | 1.28 | 1.32 | 0.85 | 1.20 | ||||||||||||||
At or For the Years Ended | |||||||
December 31, 2017 | December 31, 2016 | ||||||
Reconciliation of Core (non-GAAP) to GAAP Net Income and Earnings per Share (calculated net of estimated tax rate of 35%, except as otherwise noted) | (Dollars in thousands, except per share amounts) | ||||||
GAAP net income available to common shareholders 1 | $ | 89,176 | $ | 97,324 | |||
Distributed and undistributed earnings to participating securities 1 | 318 | 497 | |||||
GAAP net income | 89,494 | 97,821 | |||||
(Gain) loss on one-time tax adjustments2 | 13,493 | — | |||||
Net (gain) on sale of insurance subsidiary operations3 | — | (39) | |||||
(Gain) on sale of branch locations | (1,084) | (2,529) | |||||
Loss on sale of FHA loan portfolio | — | 969 | |||||
Core (non-GAAP) net income | $ | 101,903 | $ | 96,222 | |||
Average shares for basic earnings per share | 46,611,780 | 46,184,074 | |||||
Basic (GAAP) earnings per share | $ | 1.91 | $ | 2.11 | |||
Basic core (non-GAAP) earnings per share | $ | 2.19 | $ | 2.08 | |||
Average shares for diluted earnings per share | 47,138,518 | 46,484,967 | |||||
Diluted GAAP earnings per share | $ | 1.89 | $ | 2.09 | |||
Diluted core (non-GAAP) earnings per share | $ | 2.16 | $ | 2.07 | |||
Reconciliation of Core (non-GAAP) to GAAP Non-Interest Income (gross of tax) | |||||||
GAAP non-interest income | $ | 43,582 | $ | 51,931 | |||
Net (gain) on sale of insurance subsidiary operations | — | (1,181) | |||||
(Gain) on sale of branch locations | (1,669) | (3,891) | |||||
Loss on sale of FHA loan portfolio | — | 1,491 | |||||
Core (non-GAAP) non-interest income | $ | 41,913 | $ | 48,350 | |||
Reconciliation of Core (non-GAAP) to GAAP Efficiency Ratio (gross of tax) | |||||||
Net interest income | $ | 311,431 | $ | 282,269 | |||
GAAP efficiency ratio: | |||||||
Non-interest expense | $ | 160,344 | $ | 156,377 | |||
Net interest income plus non-interest income | 355,013 | 334,200 | |||||
Efficiency ratio- GAAP basis | 45.17 | % | 46.79 | % | |||
Core (non-GAAP) efficiency ratio: | |||||||
Core (non-GAAP) non-interest expense | $ | 160,344 | $ | 156,377 | |||
Net interest income plus core (non-GAAP) non-interest income | 353,344 | 330,619 | |||||
Efficiency ratio- core (non-GAAP) basis | 45.38 | % | 47.30 | % | |||
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 | 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. |
3 | Calculated net of tax on extraordinary gain totaling $1.1 million. |
At or For the Years Ended | |||||||
December 31, 2017 | December 31, 2016 | ||||||
(Dollars in thousands, except per share amounts) | |||||||
Calculation of Return on Average Assets and Return on Average Equity Ratios (GAAP and core) (unaudited) | |||||||
Net income | $ | 89,494 | $ | 97,821 | |||
Core (non-GAAP) net income | 101,903 | 96,222 | |||||
Average total equity | 929,903 | 848,788 | |||||
Average total assets | 8,607,481 | 7,881,881 | |||||
Return on average common shareholders' equity | 9.62 | % | 11.52 | % | |||
Core (non-GAAP) return on average common shareholders' equity | 10.96 | 11.34 | |||||
Return on average assets | 1.04 | 1.24 | |||||
Core (non-GAAP) return on average assets | 1.18 | 1.22 | |||||
View original content with multimedia:http://www.prnewswire.com/news-releases/legacytexas-financial-group-inc-reports-fourth-quarter-and-full-year-2017-earnings-300586998.html
SOURCE LegacyTexas Financial Group, Inc.
