R | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
£ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 6021 | 27-2176993 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) | ||
1309 W. 15th Street, Plano, Texas | 75075 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer o | Accelerated filer x | |
Non-accelerated filer o | Smaller reporting company o | |
(Do not check if a smaller reporting company) |
Class: Common Stock | Shares Outstanding as of April 29, 2013: | |
39,948,031 |
March 31, | December 31, | ||||||
2013 | 2012 | ||||||
ASSETS | (unaudited) | ||||||
Cash and due from financial institutions | $ | 25,724 | $ | 34,227 | |||
Short-term interest-bearing deposits in other financial institutions | 26,783 | 34,469 | |||||
Total cash and cash equivalents | 52,507 | 68,696 | |||||
Securities available for sale, at fair value | 315,438 | 287,034 | |||||
Securities held to maturity (fair value: March 31, 2013 — $344,836, December 31, 2012— $376,153) | 329,993 | 360,554 | |||||
Loans held for sale | 757,472 | 1,060,720 | |||||
Loans held for investment (net of allowance for loan losses of $18,642 at March 31, 2013 and $18,051 at December 31, 2012) | 1,727,455 | 1,673,204 | |||||
FHLB and Federal Reserve Bank stock, at cost | 31,607 | 45,025 | |||||
Bank-owned life insurance | 35,078 | 34,916 | |||||
Foreclosed assets, net | 1,505 | 1,901 | |||||
Premises and equipment, net | 53,050 | 53,160 | |||||
Goodwill | 29,650 | 29,650 | |||||
Accrued interest receivable | 9,026 | 9,900 | |||||
Prepaid FDIC assessment | 4,660 | 4,809 | |||||
Other assets | 26,195 | 33,489 | |||||
Total assets | $ | 3,373,636 | $ | 3,663,058 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Deposits | |||||||
Non-interest-bearing demand | $ | 392,759 | $ | 357,800 | |||
Interest-bearing demand | 481,966 | 488,748 | |||||
Savings and money market | 888,874 | 880,924 | |||||
Time | 449,491 | 450,334 | |||||
Total deposits | 2,213,090 | 2,177,806 | |||||
FHLB advances (net of prepayment penalty of $2,937 at March 31, 2013 and $3,193 at December 31, 2012) | 564,221 | 892,208 | |||||
Repurchase agreement | 25,000 | 25,000 | |||||
Accrued interest payable | 1,148 | 1,216 | |||||
Other liabilities | 39,210 | 45,957 | |||||
Total liabilities | 2,842,669 | 3,142,187 | |||||
Commitments and contingent liabilities | — | — | |||||
Shareholders’ equity | |||||||
Preferred stock, $.01 par value; 10,000,000 shares authorized; 0 shares issued — March 31, 2013 and December 31, 2012 | — | — | |||||
Common stock, $.01 par value; 90,000,000 shares authorized; 39,948,031 shares issued — March 31, 2013 and 39,612,911 shares issued — December 31, 2012 | 399 | 396 | |||||
Additional paid-in capital | 373,492 | 372,168 | |||||
Retained earnings | 172,386 | 164,328 | |||||
Accumulated other comprehensive income, net | 2,239 | 1,895 | |||||
Unearned Employee Stock Ownership Plan (ESOP) shares; 1,871,991 shares at March 31, 2013 and 1,918,039 shares at December 31, 2012 | (17,549 | ) | (17,916 | ) | |||
Total shareholders’ equity | 530,967 | 520,871 | |||||
Total liabilities and shareholders’ equity | $ | 3,373,636 | $ | 3,663,058 | |||
See accompanying notes to consolidated financial statements. |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Interest and dividend income | |||||||
Loans, including fees | $ | 30,378 | $ | 24,320 | |||
Taxable securities | 2,403 | 4,458 | |||||
Nontaxable securities | 474 | 473 | |||||
Interest-bearing deposits in other financial institutions | 31 | 19 | |||||
FHLB and Federal Reserve Bank stock | 133 | 106 | |||||
33,419 | 29,376 | ||||||
Interest expense | |||||||
Deposits | 2,432 | 3,229 | |||||
FHLB advances | 2,261 | 2,454 | |||||
Repurchase agreement | 201 | 203 | |||||
4,894 | 5,886 | ||||||
Net interest income | 28,525 | 23,490 | |||||
Provision for loan losses | 883 | 895 | |||||
Net interest income after provision for loan losses | 27,642 | 22,595 | |||||
Non-interest income | |||||||
Service charges and fees | 4,291 | 4,238 | |||||
Other charges and fees | 212 | 128 | |||||
Net gain on sale of mortgage loans | — | 2,232 | |||||
Bank-owned life insurance income | 162 | 109 | |||||
Gain (loss) on sale of available for sale securities (reclassified from accumulated other comprehensive income for unrealized gains (losses) on available-for-sale securities) | (177 | ) | — | ||||
Gain (loss) on sale and disposition of assets | 230 | (81 | ) | ||||
Other | 1,141 | 104 | |||||
5,859 | 6,730 | ||||||
Non-interest expense | |||||||
Salaries and employee benefits | 12,915 | 11,724 | |||||
Acquisition costs | — | 144 | |||||
Advertising | 513 | 285 | |||||
Occupancy and equipment | 1,790 | 1,470 | |||||
Outside professional services | 684 | 483 | |||||
Regulatory assessments | 579 | 581 | |||||
Data processing | 1,518 | 1,245 | |||||
Office operations | 1,648 | 1,545 | |||||
Other | 1,226 | 975 | |||||
20,873 | 18,452 | ||||||
Income before income tax expense | 12,628 | 10,873 | |||||
Income tax expense (includes $62 and $0 income tax benefit from items reclassified from accumulated other comprehensive income for the three months ended March 31, 2013 and 2012, respectively) | 4,570 | 3,801 | |||||
Net income | $ | 8,058 | $ | 7,072 | |||
Earnings per share: | |||||||
Basic | $ | 0.21 | $ | 0.22 | |||
Diluted | $ | 0.21 | $ | 0.22 | |||
See accompanying notes to consolidated financial statements. |
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Net income | $ | 8,058 | $ | 7,072 | |||
Change in unrealized gains (losses) on securities available for sale | 326 | 331 | |||||
Reclassification of amount realized through sale of securities | 177 | — | |||||
Tax effect | (159 | ) | (118 | ) | |||
Other comprehensive income (loss), net of tax | 344 | 213 | |||||
Comprehensive income | $ | 8,402 | $ | 7,285 | |||
See accompanying notes to consolidated financial statements. |
For the three months ended March 31, 2012 | Common Stock | Additional Paid-In Capital | Unearned ESOP Shares | Retained Earnings | Accumulated Other Comprehensive Income, Net | Total Shareholders’ Equity | |||||||||||||||||
Balance at January 1, 2012 | $ | 337 | $ | 279,473 | $ | (19,383 | ) | $ | 144,535 | $ | 1,347 | $ | 406,309 | ||||||||||
ESOP shares earned, 46,049 shares | — | 299 | 367 | — | — | 666 | |||||||||||||||||
Share-based compensation expense | — | 333 | — | — | — | 333 | |||||||||||||||||
Net issuance of common stock under employee stock plans (2,681 shares) | — | 34 | — | — | — | 34 | |||||||||||||||||
Dividends declared ($0.06 per share) | — | — | — | (2,022 | ) | — | (2,022 | ) | |||||||||||||||
Net income | — | — | — | 7,072 | — | 7,072 | |||||||||||||||||
Other comprehensive income | — | — | — | — | 213 | 213 | |||||||||||||||||
Total comprehensive income | 7,285 | ||||||||||||||||||||||
Balance at March 31, 2012 | $ | 337 | $ | 280,139 | $ | (19,016 | ) | $ | 149,585 | $ | 1,560 | $ | 412,605 |
For the three months ended March 31, 2013 | |||||||||||||||||||||||
Balance at January 1, 2013 | $ | 396 | $ | 372,168 | $ | (17,916 | ) | $ | 164,328 | $ | 1,895 | $ | 520,871 | ||||||||||
ESOP shares earned, 46,048 shares | — | 598 | 367 | — | — | 965 | |||||||||||||||||
Share-based compensation expense | — | 572 | — | — | — | 572 | |||||||||||||||||
Net issuance of common stock under employee stock plans (335,120 shares) | 3 | 154 | — | — | — | 157 | |||||||||||||||||
Net income | — | — | — | 8,058 | — | 8,058 | |||||||||||||||||
Other comprehensive income | — | — | — | — | 344 | 344 | |||||||||||||||||
Total comprehensive income | 8,402 | ||||||||||||||||||||||
Balance at March 31, 2013 | $ | 399 | $ | 373,492 | $ | (17,549 | ) | $ | 172,386 | $ | 2,239 | $ | 530,967 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 8,058 | $ | 7,072 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan losses | 883 | 895 | |||||
Depreciation and amortization | 1,140 | 916 | |||||
Deferred tax expense (benefit) | 246 | (507 | ) | ||||
Premium amortization and accretion of securities, net | 1,778 | 1,044 | |||||
Accretion related to acquired loans | (945 | ) | — | ||||
Loss on sale of available for sale securities | 177 | — | |||||
ESOP compensation expense | 965 | 666 | |||||
Share-based compensation expense | 572 | 333 | |||||
Net gain on loans held for sale | — | (2,232 | ) | ||||
Loans originated or purchased for sale | (3,431,487 | ) | (2,886,917 | ) | |||
Proceeds from sale of loans held for sale | 3,734,735 | 2,989,093 | |||||
FHLB stock dividends | (34 | ) | (32 | ) | |||
Bank-owned life insurance (BOLI) income | (162 | ) | (109 | ) | |||
Gain (loss) on sale and disposition of assets | (230 | ) | 81 | ||||
Net change in deferred loan fees | 126 | 120 | |||||
Net change in accrued interest receivable | 874 | 937 | |||||
Net change in other assets | 7,111 | 2,653 | |||||
Net change in other liabilities | (6,974 | ) | (2,123 | ) | |||
Net cash provided by operating activities | 316,833 | 111,890 | |||||
Cash flows from investing activities | |||||||
Available-for-sale securities: | |||||||
Maturities, prepayments and calls | 126,337 | 222,281 | |||||
Purchases | (165,941 | ) | (200,000 | ) | |||
Proceeds from sale of AFS securities | 10,614 | — | |||||
Held-to-maturity securities: | |||||||
Maturities, prepayments and calls | 31,049 | 33,768 | |||||
Purchases | (1,354 | ) | — | ||||
Net change in loans held for investment | (54,905 | ) | (29,084 | ) | |||
Purchase of FHLB and Federal Reserve Bank stock | 13,452 | 4,698 | |||||
Purchases of premises and equipment | (910 | ) | (394 | ) | |||
Proceeds from sale of assets | 1,182 | 746 | |||||
Net cash provided by (used in) investing activities | (40,476 | ) | 32,015 |
Cash flows from financing activities | |||||||
Net change in deposits | 35,284 | (29,872 | ) | ||||
Proceeds from FHLB advances | 230,000 | 345,500 | |||||
Repayments on FHLB advances | (557,987 | ) | (459,386 | ) | |||
Payment of dividends | — | (2,022 | ) | ||||
Proceeds from stock option exercises | 157 | 34 | |||||
Net cash used in financing activities | (292,546 | ) | (145,746 | ) | |||
Net change in cash and cash equivalents | (16,189 | ) | (1,841 | ) | |||
Beginning cash and cash equivalents | 68,696 | 46,348 | |||||
Ending cash and cash equivalents | $ | 52,507 | $ | 44,507 | |||
Supplemental cash flow information: | |||||||
Interest paid | $ | 4,962 | $ | 5,935 | |||
Income taxes paid | 7 | 506 | |||||
Supplemental noncash disclosures: | |||||||
Transfers from loans to other real estate owned | 590 | 640 | |||||
See accompanying notes to consolidated financial statements. |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Basic earnings per share: | |||||||
Numerator: | |||||||
Net income | $ | 8,058 | $ | 7,072 | |||
Distributed and undistributed earnings to participating securities | (64 | ) | (15 | ) | |||
Income available to common shareholders | $ | 7,994 | $ | 7,057 | |||
Denominator: | |||||||
Weighted average common shares outstanding | 39,732,156 | 33,700,929 | |||||
Less: Average unallocated ESOP shares | (1,902,178 | ) | (2,086,378 | ) | |||
Average unvested restricted stock awards | (300,185 | ) | (68,803 | ) | |||
Average shares for basic earnings per share | 37,529,793 | 31,545,748 | |||||
Basic earnings per common share | $ | 0.21 | $ | 0.22 | |||
Diluted earnings per share: | |||||||
Numerator: | |||||||
Income available to common shareholders | $ | 7,994 | $ | 7,057 | |||
Denominator: | |||||||
Average shares for basic earnings per share | 37,529,793 | 31,545,748 | |||||
Dilutive effect of share-based compensation plan | 151,609 | 120,607 | |||||
Average shares for diluted earnings per share | 37,681,402 | 31,666,355 | |||||
Diluted earnings per common share | $ | 0.21 | 0.22 |
Amortized | Gross Unrealized | Gross Unrealized | |||||||||||||
March 31, 2013 | Cost | Gains | Losses | Fair Value | |||||||||||
Agency residential mortgage-backed securities | $ | 212,119 | $ | 2,599 | $ | 124 | $ | 214,594 | |||||||
Agency residential collateralized mortgage obligations | 96,693 | 920 | 50 | 97,563 | |||||||||||
SBA pools | 3,177 | 104 | — | 3,281 | |||||||||||
Total securities | $ | 311,989 | $ | 3,623 | $ | 174 | $ | 315,438 |
Amortized | Gross Unrealized | Gross Unrealized | |||||||||||||
December 31, 2012 | Cost | Gains | Losses | Fair Value | |||||||||||
Agency residential mortgage-backed securities | $ | 164,023 | $ | 2,195 | $ | 118 | $ | 166,100 | |||||||
Agency residential collateralized mortgage obligations | 116,723 | 996 | 233 | 117,486 | |||||||||||
SBA pools | 3,342 | 106 | — | 3,448 | |||||||||||
Total securities | $ | 284,088 | $ | 3,297 | $ | 351 | $ | 287,034 |
Amortized | Gross Unrealized | Gross Unrealized | |||||||||||||
March 31, 2013 | Cost | Gains | Losses | Fair Value | |||||||||||
Agency residential mortgage-backed securities | $ | 102,710 | $ | 5,741 | $ | — | $ | 108,451 | |||||||
Agency commercial mortgage-backed securities | 9,203 | 1,140 | — | 10,343 | |||||||||||
Agency residential collateralized mortgage obligations | 166,274 | 3,588 | 78 | 169,784 | |||||||||||
Municipal bonds | 51,806 | 4,499 | 47 | 56,258 | |||||||||||
Total securities | $ | 329,993 | $ | 14,968 | $ | 125 | $ | 344,836 |
Amortized | Gross Unrealized | Gross Unrealized | |||||||||||||
December 31, 2012 | Cost | Gains | Losses | Fair Value | |||||||||||
Agency residential mortgage-backed securities | $ | 114,388 | $ | 6,324 | $ | — | $ | 120,712 | |||||||
Agency commercial mortgage-backed securities | 9,243 | 1,303 | — | 10,546 | |||||||||||
Agency residential collateralized mortgage obligations | 186,467 | 3,129 | 173 | 189,423 | |||||||||||
Municipal bonds | 50,456 | 5,018 | 2 | 55,472 | |||||||||||
Total securities | $ | 360,554 | $ | 15,774 | $ | 175 | $ | 376,153 |
Available | |||||||||||
Held to maturity | for sale | ||||||||||
Carrying Amount | Fair Value | Fair Value | |||||||||
Due in one year or less | $ | 1,481 | $ | 1,495 | $ | — | |||||
Due after one to five years | 6,685 | 7,226 | 465 | ||||||||
Due after five to ten years | 14,835 | 16,326 | 2,816 | ||||||||
Due after ten years | 28,805 | 31,211 | — | ||||||||
Agency residential mortgage-backed securities | 102,710 | 108,451 | 214,594 | ||||||||
Agency commercial mortgage-backed securities | 9,203 | 10,343 | — | ||||||||
Agency residential collateralized mortgage obligations | 166,274 | 169,784 | 97,563 | ||||||||
Total | $ | 329,993 | $ | 344,836 | $ | 315,438 |
March 31, 2013 | December 31, 2012 | ||||||
Public fund certificates of deposit | $ | 136,419 | $ | 134,846 | |||
Repurchase agreements | 25,000 | 25,000 | |||||
Carrying value of securities pledged on above funds | 142,811 | 176,508 |
March 31, | |||||||
2013 | 2012 | ||||||
Proceeds | $ | 10,614 | $ | — | |||
Gross losses | 177 | — |
AFS | Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||
March 31, 2013 | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | |||||||||||||||||||||||
Agency residential mortgage-backed securities | $ | 41,511 | $ | 124 | 8 | $ | — | $ | — | — | $ | 41,511 | $ | 124 | 8 | |||||||||||||||||
Agency residential collateralized mortgage obligations | 3,358 | 4 | 2 | 5,296 | 46 | 3 | 8,654 | 50 | 5 | |||||||||||||||||||||||
Total temporarily impaired | $ | 44,869 | $ | 128 | 10 | $ | 5,296 | $ | 46 | 3 | $ | 50,165 | $ | 174 | 13 |
HTM | Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||
March 31, 2013 | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | |||||||||||||||||||||||
Agency residential collateralized mortgage obligations | $ | 4,696 | $ | 24 | 2 | $ | 3,662 | $ | 54 | 3 | $ | 8,358 | $ | 78 | 5 | |||||||||||||||||
Municipal bonds | 1,589 | 47 | 5 | — | — | — | 1,589 | 47 | 5 | |||||||||||||||||||||||
Total temporarily impaired | $ | 6,285 | $ | 71 | 7 | $ | 3,662 | $ | 54 | 3 | $ | 9,947 | $ | 125 | 10 |
AFS | Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||
December 31, 2012 | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | |||||||||||||||||||||||
Agency residential mortgage-backed securities | $ | 24,462 | $ | 118 | 4 | $ | — | $ | — | — | $ | 24,462 | $ | 118 | 4 | |||||||||||||||||
Agency residential collateralized mortgage obligations | 2 | — | 1 | 16,912 | 233 | 6 | 16,914 | 233 | 7 | |||||||||||||||||||||||
Total temporarily impaired | $ | 24,464 | $ | 118 | 5 | $ | 16,912 | $ | 233 | 6 | $ | 41,376 | $ | 351 | 11 |
HTM | Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||
December 31, 2012 | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | Fair Value | Unrealized Loss | Number | |||||||||||||||||||||||
Agency residential collateralized mortgage obligations | $ | 19,311 | $ | 62 | 5 | $ | 4,972 | $ | 111 | 4 | $ | 24,283 | $ | 173 | 9 | |||||||||||||||||
Municipal bonds | 281 | 2 | 1 | — | — | — | 281 | 2 | 1 | |||||||||||||||||||||||
Total temporarily impaired | $ | 19,592 | $ | 64 | 6 | $ | 4,972 | $ | 111 | 4 | $ | 24,564 | $ | 175 | 10 |
March 31, 2013 | December 31, 2012 | ||||||
Commercial real estate | $ | 897,534 | $ | 839,908 | |||
Commercial and industrial loans: | |||||||
Commercial | 271,605 | 245,799 | |||||
Warehouse lines of credit | 30,861 | 32,726 | |||||
Total commercial and industrial loans | 302,466 | 278,525 | |||||
Consumer: | |||||||
One- to four-family real estate | 358,823 | 378,255 | |||||
Home equity/home improvement | 131,776 | 135,001 | |||||
Other consumer loans | 55,138 | 59,080 | |||||
Total consumer | 545,737 | 572,336 | |||||
Gross loans held for investment | 1,745,737 | $ | 1,690,769 | ||||
Net of: | |||||||
Deferred fees and discounts, net | 360 | 486 | |||||
Allowance for loan losses | (18,642 | ) | (18,051 | ) | |||
Net loans held for investment | $ | 1,727,455 | $ | 1,673,204 | |||
Loans held for sale | $ | 757,472 | $ | 1,060,720 |
March 31, 2013 | Commercial Real Estate | Commercial and Industrial | One- to Four-Family Real Estate | Home Equity/Home Improvement | Other Consumer | Total | |||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||
Beginning balance - January 1, 2013 | $ | 11,304 | $ | 2,574 | $ | 2,356 | $ | 1,199 | $ | 618 | $ | 18,051 | |||||||||||
Charge-offs | (87 | ) | (210 | ) | (29 | ) | — | (150 | ) | (476 | ) | ||||||||||||
Recoveries | — | 38 | 6 | — | 140 | 184 | |||||||||||||||||
Provision expense (benefit) | (312 | ) | 1,166 | 192 | (125 | ) | (38 | ) | 883 | ||||||||||||||
Ending balance - March 31, 2013 | $ | 10,905 | $ | 3,568 | $ | 2,525 | $ | 1,074 | $ | 570 | $ | 18,642 | |||||||||||
Allowance ending balance: | |||||||||||||||||||||||
Individually evaluated for impairment | $ | 2,513 | $ | 1,405 | $ | 996 | $ | 198 | $ | 73 | $ | 5,185 | |||||||||||
Collectively evaluated for impairment | 8,392 | 2,163 | 1,529 | 876 | 497 | 13,457 | |||||||||||||||||
Loans: | |||||||||||||||||||||||
Individually evaluated for impairment | $ | 16,067 | $ | 7,009 | $ | 7,748 | $ | 1,055 | $ | 440 | $ | 32,319 | |||||||||||
Collectively evaluated for impairment | 873,428 | 294,256 | 350,115 | 130,510 | 54,505 | 1,702,814 | |||||||||||||||||
PCI Loans | 8,039 | 1,201 | 960 | 211 | 193 | 10,604 | |||||||||||||||||
Ending balance | $ | 897,534 | $ | 302,466 | $ | 358,823 | $ | 131,776 | $ | 55,138 | $ | 1,745,737 |
March 31, 2012 | Commercial Real Estate | Commercial and Industrial | One- to Four-Family Real Estate | Home Equity/Home Improvement | Other Consumer | Total | |||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||
Beginning balance - January 1, 2012 | $ | 10,621 | $ | 2,090 | $ | 3,027 | $ | 1,043 | $ | 706 | $ | 17,487 | |||||||||||
Charge-offs | — | (215 | ) | (84 | ) | — | (197 | ) | (496 | ) | |||||||||||||
Recoveries | — | 23 | 7 | — | 107 | 137 | |||||||||||||||||
Provision expense (benefit) | 561 | 266 | 59 | (29 | ) | 38 | 895 | ||||||||||||||||
Ending balance - March 31, 2012 | $ | 11,182 | $ | 2,164 | $ | 3,009 | $ | 1,014 | $ | 654 | $ | 18,023 | |||||||||||
Allowance ending balance: | |||||||||||||||||||||||
Individually evaluated for impairment | $ | 2,346 | $ | 135 | $ | 607 | $ | 209 | $ | 12 | $ | 3,309 | |||||||||||
Collectively evaluated for impairment | 8,836 | 2,029 | 2,402 | 805 | 642 | 14,714 | |||||||||||||||||
Loans: | |||||||||||||||||||||||
Individually evaluated for impairment | $ | 18,861 | $ | 489 | $ | 5,361 | $ | 1,275 | $ | 150 | $ | 26,136 | |||||||||||
Collectively evaluated for impairment | 605,196 | 69,827 | 366,709 | 138,064 | 50,181 | 1,229,977 | |||||||||||||||||
Ending balance | $ | 624,057 | $ | 70,316 | $ | 372,070 | $ | 139,339 | $ | 50,331 | $ | 1,256,113 |
March 31, 2013 | Unpaid Contractual Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Total Recorded Investment | Related Allowance | |||||||||||||||
Commercial real estate | $ | 16,786 | $ | 4,089 | $ | 11,978 | $ | 16,067 | $ | 2,302 | ||||||||||
Commercial and industrial | 9,127 | 3,218 | 3,791 | 7,009 | 1,349 | |||||||||||||||
Consumer: | ||||||||||||||||||||
One- to four- family real estate | 7,359 | 5,028 | 2,720 | 7,748 | 934 | |||||||||||||||
Home equity/home improvement | 1,087 | 835 | 220 | 1,055 | 197 | |||||||||||||||
Other consumer | 465 | — | 440 | 440 | 73 | |||||||||||||||
Total | $ | 34,824 | $ | 13,170 | $ | 19,149 | $ | 32,319 | $ | 4,855 | ||||||||||
December 31, 2012 | ||||||||||||||||||||
Commercial real estate | $ | 17,768 | $ | 4,383 | $ | 12,609 | $ | 16,992 | $ | 2,756 | ||||||||||
Commercial and industrial | 7,632 | 3,284 | 2,325 | 5,609 | 630 | |||||||||||||||
Consumer: | ||||||||||||||||||||
One- to four- family real estate | 7,515 | 4,472 | 2,891 | 7,363 | 722 | |||||||||||||||
Home equity/home improvement | 1,157 | 819 | 307 | 1,126 | 238 | |||||||||||||||
Other consumer | 338 | 28 | 301 | 329 | 23 | |||||||||||||||
Total | $ | 34,410 | $ | 12,986 | $ | 18,433 | $ | 31,419 | $ | 4,369 |
March 31, 2013 | March 31, 2012 | ||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | ||||||||||||
Commercial real estate | $ | 16,169 | $ | 62 | $ | 19,086 | $ | 52 | |||||||
Commercial and industrial | 5,808 | 3 | 538 | — | |||||||||||
Consumer: | |||||||||||||||
One- to four- family real estate | 7,607 | 13 | 5,096 | 20 | |||||||||||
Home equity/home improvement | 1,009 | 1 | 1,281 | 2 | |||||||||||
Other consumer | 379 | — | 164 | — | |||||||||||
Total | $ | 30,972 | $ | 79 | $ | 26,165 | $ | 74 |
March 31, 2013 | December 31, 2012 | ||||||
Commercial real estate | $ | 12,696 | $ | 13,609 | |||
Commercial and industrial | 6,807 | 5,401 | |||||
Consumer: | |||||||
One- to four- family real estate | 6,833 | 6,854 | |||||
Home equity/home improvement | 1,007 | 1,077 | |||||
Other consumer | 378 | 262 | |||||
Total | $ | 27,721 | $ | 27,203 |
March 31, 2013 | December 31, 2012 | ||||||
Nonaccrual TDRs(1) | $ | 14,136 | $ | 13,760 | |||
Performing TDRs (2) | 4,599 | 4,216 | |||||
Total | $ | 18,735 | $ | 17,976 | |||
Specific reserves on TDRs | $ | 2,217 | $ | 2,643 | |||
Outstanding commitments to lend additional funds to borrowers with TDR loans | — | — | |||||
1 Nonaccrual TDR loans are included in the nonaccrual loan totals. | |||||||
2 Performing TDR loans are loans that have been performing under the restructured terms for at least six months and the Company is accruing interest on these loans. |
Three Months Ended March 31, 2013 | Principal Deferrals | Combination of Rate Reduction and Principal Deferral | Other | Total | |||||||||||||
Commercial real estate | $ | 690 | $ | — | $ | — | $ | 690 | |||||||||
Commercial and industrial | — | 33 | — | 33 | |||||||||||||
Consumer: | |||||||||||||||||
Other consumer | 75 | — | — | 75 | |||||||||||||
Total | $ | 765 | $ | 33 | $ | — | $ | 798 | |||||||||
Three Months Ended March 31, 2012 | |||||||||||||||||
Commercial and industrial | $ | — | $ | — | $ | 82 | $ | 82 | |||||||||
Consumer: | |||||||||||||||||
One- to four- family real estate | — | 383 | 250 | 633 | |||||||||||||
Total | $ | — | $ | 383 | $ | 332 | $ | 715 |
Three Months Ended March 31, 2013 | |||
Consumer: | |||
One- to four- family real estate | $ | 558 | |
Home equity/home improvement | 40 | ||
Total | $ | 598 |
March 31, 2013 | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days and Greater Past Due | Total Loans Past Due | Current Loans 1 | Total Loans | |||||||||||||||||
Commercial real estate | $ | 1,418 | $ | 1,589 | $ | 267 | $ | 3,274 | $ | 894,260 | $ | 897,534 | |||||||||||
Commercial and industrial | 1,045 | 141 | 4,200 | 5,386 | 297,080 | 302,466 | |||||||||||||||||
Consumer loans: | |||||||||||||||||||||||
One- to four- family real estate | 7,925 | 854 | 3,134 | 11,913 | 346,910 | 358,823 | |||||||||||||||||
Home equity/home improvement | 1,014 | 160 | 437 | 1,611 | 130,165 | 131,776 | |||||||||||||||||
Other consumer | 641 | 87 | 69 | 797 | 54,341 | 55,138 | |||||||||||||||||
Total | $ | 12,043 | $ | 2,831 | $ | 8,107 | $ | 22,981 | $ | 1,722,756 | $ | 1,745,737 |
December 31, 2012 | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days and Greater Past Due | Total Loans Past Due | Current Loans 1 | Total Loans | |||||||||||||||||
Commercial real estate | $ | 2,243 | $ | 1,182 | $ | 1,128 | $ | 4,553 | $ | 835,355 | $ | 839,908 | |||||||||||
Commercial and industrial | 2,066 | 530 | 2,867 | 5,463 | 273,062 | 278,525 | |||||||||||||||||
Consumer loans: | |||||||||||||||||||||||
One- to four- family real estate | 7,099 | 1,867 | 3,845 | 12,811 | 365,444 | 378,255 | |||||||||||||||||
Home equity/home improvement | 1,046 | 107 | 624 | 1,777 | 133,224 | 135,001 | |||||||||||||||||
Other consumer | 563 | 151 | 49 | 763 | 58,317 | 59,080 | |||||||||||||||||
Total | $ | 13,017 | $ | 3,837 | $ | 8,513 | $ | 25,367 | $ | 1,665,402 | $ | 1,690,769 |
March 31, 2013 | Commercial Real Estate | Commercial and Industrial | One- to Four-Family Real Estate | Home Equity/Home Improvement | |||||||||||
Grade: 1 | |||||||||||||||
Pass | $ | 853,452 | $ | 290,279 | $ | 345,197 | $ | 128,699 | |||||||
Special Mention | 17,070 | 354 | 3,041 | 384 | |||||||||||
Substandard | 26,027 | 11,808 | 6,882 | 1,875 | |||||||||||
Doubtful | 985 | 25 | 3,703 | 818 | |||||||||||
Total | $ | 897,534 | $ | 302,466 | $ | 358,823 | $ | 131,776 |
Commercial Real Estate | Commercial and Industrial | One- to Four-Family Real Estate | Home Equity/Home Improvement | ||||||||||||
December 31, 2012 | |||||||||||||||
Grade: 1 | |||||||||||||||
Pass | $ | 793,507 | $ | 264,528 | $ | 365,858 | $ | 131,889 | |||||||
Special Mention | 17,504 | 645 | 2,219 | 398 | |||||||||||
Substandard | 27,669 | 13,227 | 7,092 | 1,850 | |||||||||||
Doubtful | 1,228 | 125 | 3,086 | 864 | |||||||||||
Total | $ | 839,908 | $ | 278,525 | $ | 378,255 | $ | 135,001 |
March 31, 2013 | December 31, 2012 | |||||||
Performing | $ | 54,760 | $ | 58,818 | ||||
Non-performing | 378 | 262 | ||||||
Total | $ | 55,138 | $ | 59,080 |
March 31, 2013 | Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | ||
Assets: | |||
Agency residential mortgage-backed securities | $ | 214,594 | |
Agency residential collateralized mortgage obligations | 97,563 | ||
SBA pools | 3,281 | ||
Total securities available for sale | $ | 315,438 |
December 31, 2012 | |||
Assets: | |||
Agency residential mortgage-backed securities | $ | 166,100 | |
Agency residential collateralized mortgage obligations | 117,486 | ||
SBA pools | 3,448 | ||
Total securities available for sale | $ | 287,034 |
Fair Value Measurements Using | |||||||||||
March 31, 2013 | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||
Assets: | |||||||||||
Impaired loans | $ | 14,294 | $ | — | $ | 14,294 | |||||
Other real estate owned | 1,505 | 965 | 540 |
Fair Value Measurements Using | |||||||||||
December 31, 2012 | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||
Assets: | |||||||||||
Impaired loans | $ | 14,064 | $ | — | $ | 14,064 | |||||
Other real estate owned | 1,886 | 416 | 1,470 |
Quantitative Information about Level 3 Fair Value Measurements | |||||||||
Fair Value | Range (Average) | ||||||||
March 31, 2013 | December 31, 2012 | Valuation Technique | Unobservable Input | ||||||
Impaired loans | $ | 11,235 | $ | 10,986 | Third party appraisal | Discount of market value | 0%-20% (7%) | ||
Estimated marketing costs | 0%-7% (6%) | ||||||||
Estimated legal expenses | $0-$7 ($2) | ||||||||
3,059 | 3,078 | Discounted cash flow analysis | Interest rate | 2.4%-5.4% (3.8%) | |||||
Loan term (in months) | 10-251 (107) | ||||||||
Other real estate owned | 540 | 1,470 | Third party appraisal | Discount of market value | 0%-70% (17%) | ||||
Estimated marketing costs | 0%-7% (6%) |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Balance at January 1 | $ | 1,886 | $ | 2,286 | |||
Transfers in at fair value | 590 | 640 | |||||
Change in valuation allowance | (2 | ) | (80 | ) | |||
Sale of property (gross) | (969 | ) | (825 | ) | |||
Balance at March 31 | $ | 1,505 | $ | 2,021 | |||
Valuation allowance: | |||||||
Balance at January 1 | $ | 57 | $ | 1,076 | |||
Sale of property | (32 | ) | (15 | ) | |||
Valuation adjustment | 34 | 95 | |||||
Balance at March 31 | $ | 59 | $ | 1,156 |
Fair Value | |||||||||||||||
March 31, 2013 | Carrying Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Financial assets | |||||||||||||||
Cash and cash equivalents | $ | 52,507 | $ | 52,507 | $ | — | $ | — | |||||||
Securities available for sale | 315,438 | — | 315,438 | — | |||||||||||
Securities held to maturity | 329,993 | — | 344,836 | — | |||||||||||
Loans held for sale | 757,472 | — | — | 757,835 | |||||||||||
Loans held for investment, net | 1,727,455 | — | — | 1,756,608 | |||||||||||
FHLB and Federal Reserve Bank stock | 31,607 | N/A | N/A | N/A | |||||||||||
Bank-owned life insurance | 35,078 | 35,078 | — | — | |||||||||||
Accrued interest receivable | 9,026 | 9,026 | — | — | |||||||||||
Financial liabilities | |||||||||||||||
Deposits | 2,213,090 | — | — | 2,123,362 | |||||||||||
FHLB advances | 564,221 | — | — | 581,798 | |||||||||||
Repurchase agreement | 25,000 | — | — | 28,266 | |||||||||||
Accrued interest payable | 1,148 | 1,148 | — | — |
Fair Value | |||||||||||||||
December 31, 2012 | Carrying Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Financial assets | |||||||||||||||
Cash and cash equivalents | $ | 68,696 | $ | 68,696 | $ | — | $ | — | |||||||
Securities available for sale | 287,034 | — | 287,034 | — | |||||||||||
Securities held to maturity | 360,554 | — | 376,153 | — | |||||||||||
Loans held for sale | 1,060,720 | — | — | 1,061,334 | |||||||||||
Loans held for investment, net | 1,673,204 | — | — | 1,696,060 | |||||||||||
FHLB and Federal Reserve Bank stock | 45,025 | N/A | N/A | N/A | |||||||||||
Bank-owned life insurance | 34,916 | 34,916 | — | — | |||||||||||
Accrued interest receivable | 9,900 | 9,900 | — | — | |||||||||||
Financial liabilities | |||||||||||||||
Deposits | $ | 2,177,806 | $ | — | $ | — | $ | 2,097,063 | |||||||
FHLB advances | 892,208 | — | — | 912,817 | |||||||||||
Repurchase agreement | 25,000 | — | — | 28,501 | |||||||||||
Accrued interest payable | 1,216 | 1,216 | — | — |
Three Months Ended March 31, 2013 | |||
Restricted stock | $ | 430 | |
Stock options | 142 | ||
Income tax benefit | 200 |
Three Months Ended March 31, 2013 | ||||||
Shares | Weighted- Average Grant Date Fair Value | |||||
Non-vested at January 1 | 185,296 | $ | 17.60 | |||
Granted | 331,000 | 20.85 | ||||
Vested | (2,800 | ) | 11.81 | |||
Forfeited | — | — | ||||
Non-vested at March 31 | 513,496 | $ | 19.73 |
Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||
Options | Shares | |||||||||||
Outstanding at December 31, 2012 | 500,049 | $ | 13.70 | 7.6 | $ | 3,619 | ||||||
Granted | 507,000 | 20.85 | 10.0 | — | ||||||||
Exercised | (4,120 | ) | 11.02 | 0.0 | 41 | |||||||
Forfeited | (1,500 | ) | 14.77 | 0.0 | — | |||||||
Outstanding at March 31, 2013 | 1,001,429 | $ | 17.33 | 8.7 | $ | 3,164 | ||||||
Fully vested and expected to vest | 969,663 | $ | 17.25 | 8.6 | $ | 3,132 | ||||||
Exercisable at March 31, 2013 | 149,569 | $ | 12.33 | 5.3 | $ | 1,163 |
March 31, 2013 | December 31, 2012 | ||||||
Net deferred tax assets | $ | 13,333 | $ | 14,026 | |||
Valuation allowance | — | — | |||||
Estimated annual effective tax rate | 35% to 36% |
Three Months Ended March 31, 2012 | |||||||||||||||
Banking | VPM | Eliminations and Adjustments1 | Total Segments (Consolidated Total) | ||||||||||||
Results of Operations: | |||||||||||||||
Total interest income | $ | 29,356 | $ | 410 | $ | (390 | ) | $ | 29,376 | ||||||
Total interest expense | 6,077 | 390 | (581 | ) | 5,886 | ||||||||||
Provision (credit) for loan losses | 899 | (4 | ) | — | 895 | ||||||||||
Net interest income after provision for loan losses | 22,380 | 24 | 191 | 22,595 | |||||||||||
Other revenue | 4,561 | — | (63 | ) | 4,498 | ||||||||||
Net gain (loss) on sale of loans | (571 | ) | 2,803 | — | 2,232 | ||||||||||
Total non-interest expense | 15,266 | 2,748 | 438 | 18,452 | |||||||||||
Income before income tax expense (benefit) | 11,104 | 79 | (310 | ) | 10,873 | ||||||||||
Income tax expense (benefit) | 3,857 | 27 | (83 | ) | 3,801 | ||||||||||
Net income | $ | 7,247 | $ | 52 | $ | (227 | ) | $ | 7,072 | ||||||
Segment assets | $ | 3,041,234 | $ | 37,159 | $ | (37,281 | ) | $ | 3,041,112 | ||||||
Noncash items: | |||||||||||||||
Net gain (loss) on sale of loans | (571 | ) | 2,803 | — | 2,232 | ||||||||||
Depreciation | 851 | 64 | — | 915 | |||||||||||
Provision (credit) for loan losses | 899 | (4 | ) | — | 895 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Continued success in commercial loan growth strategy: Our commercial loan portfolio, consisting of commercial real estate and commercial and industrial loans, provided solid growth as we continue to shift our focus to commercial lending. The commercial loan portfolio totaled $1.20 billion at March 31, 2013, up $81.6 million, or 7.3%, from December 31, 2012. |
• | Net interest margin increased by 34 basis points compared to first quarter 2012: Due to changes in the earning asset mix and lower deposit and borrowing rates, the net interest margin increased by 34 basis points to 3.64% for the three months ended March 31, 2013, compared to 3.30% for the same period in 2012. |
• | Net charge-offs decline: Net charge-offs totaled $292,000 for the first quarter of 2013, down from $1.8 million and $359,000, respectively, for the quarters ended December 31, 2012 and March 31, 2012. |
• | Net income increased by $986,000, or 13.9%: Net income for the three months ended March 31, 2013 was $8.1 million, an increase of $986,000, or 13.9%, from net income of $7.1 million for the three months ended March 31, 2012. The increase in net income was driven by an increase in net interest income and was partially offset by higher non-interest expense and lower non-interest income. Basic and diluted earnings per share for the three months ended March 31, 2013, were $0.21, a $0.01 decrease from $0.22 for the three months ended March 31, 2012. |
March 31, 2013 | December 31, 2012 | Dollar Change | Percent Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Commercial real estate | $ | 897,534 | $ | 839,908 | $ | 57,626 | 6.86 | % | ||||||
Commercial and industrial loans: | ||||||||||||||
Commercial | 271,605 | 245,799 | 25,806 | 10.50 | ||||||||||
Warehouse lines of credit | 30,861 | 32,726 | (1,865 | ) | (5.70 | ) | ||||||||
Total commercial and industrial loans | 302,466 | 278,525 | 23,941 | 8.60 | ||||||||||
Consumer: | ||||||||||||||
One- to four-family real estate | 358,823 | 378,255 | (19,432 | ) | (5.14 | ) | ||||||||
Home equity/home improvement | 131,776 | 135,001 | (3,225 | ) | (2.39 | ) | ||||||||
Other consumer | 55,138 | 59,080 | (3,942 | ) | (6.67 | ) | ||||||||
Total consumer loans | 545,737 | 572,336 | (26,599 | ) | (4.65 | ) | ||||||||
Gross loans held for investment | 1,745,737 | 1,690,769 | 54,968 | 3.25 | ||||||||||
Loans held for sale | 757,472 | 1,060,720 | (303,248 | ) | (28.59 | ) | ||||||||
Gross loans | $ | 2,503,209 | $ | 2,751,489 | $ | (248,280 | ) | (9.02 | )% |
March 31, 2013 | December 31, 2012 | ||||||
(Dollars in thousands) | |||||||
Loss | $ | — | $ | — | |||
Doubtful | 5,558 | 5,334 | |||||
Substandard | 47,229 | 50,351 | |||||
Total classified loans | 52,787 | 55,685 | |||||
Foreclosed assets | 1,505 | 1,901 | |||||
Total classified assets | $ | 54,292 | $ | 57,586 |
March 31, 2013 | December 31, 2012 | Dollar Change | Percent Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Non-interest-bearing demand | $ | 392,759 | $ | 357,800 | $ | 34,959 | 9.8 | % | ||||||
Interest-bearing demand | 481,966 | 488,748 | (6,782 | ) | (1.4 | ) | ||||||||
Savings and money market | 888,874 | 880,924 | 7,950 | 0.9 | ||||||||||
Time | 449,491 | 450,334 | (843 | ) | (0.2 | ) | ||||||||
Total deposits | $ | 2,213,090 | $ | 2,177,806 | $ | 35,284 | 1.6 | % |
Balance | Weighted Average Rate | |||||
(Dollars in thousands) | ||||||
Less than 90 days | $ | 364,269 | 0.30 | % | ||
90 days to less than one year | 12,976 | 4.47 | ||||
One to three years | 97,304 | 3.35 | ||||
After three to five years | 78,047 | 2.91 | ||||
After five years | 14,562 | 4.89 | ||||
567,158 | 1.40 | % | ||||
Restructuring prepayment penalty | (2,937 | ) | ||||
Total | $ | 564,221 |
March 31, 2013 | December 31, 2012 | Dollar Change | Percent Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Common stock | $ | 399 | $ | 396 | $ | 3 | 0.8 | % | ||||||
Additional paid-in capital | 373,492 | 372,168 | 1,324 | 0.4 | ||||||||||
Retained earnings | 172,386 | 164,328 | 8,058 | 4.9 | ||||||||||
Accumulated other comprehensive income, net | 2,239 | 1,895 | 344 | 18.2 | ||||||||||
Unearned ESOP shares | (17,549 | ) | (17,916 | ) | 367 | (2.0 | ) | |||||||
Total shareholders’ equity | $ | 530,967 | $ | 520,871 | $ | 10,096 | 1.9 | % |
Three Months Ended March 31, | Dollar | Percent | ||||||||||||
2013 | 2012 | Change | Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Interest and dividend income | ||||||||||||||
Loans, including fees | $ | 30,378 | $ | 24,320 | $ | 6,058 | 24.9 | % | ||||||
Securities | 2,877 | 4,931 | (2,054 | ) | (41.7 | ) | ||||||||
Interest-bearing deposits in other financial institutions | 31 | 19 | 12 | 63.2 | ||||||||||
FHLB and Federal Reserve Bank stock | 133 | 106 | 27 | 25.5 | ||||||||||
$ | 33,419 | $ | 29,376 | $ | 4,043 | 13.8 | % |
Three Months Ended March 31, | Dollar | Percent | ||||||||||||
2013 | 2012 | Change | Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Interest expense | ||||||||||||||
Deposits | $ | 2,432 | $ | 3,229 | $ | (797 | ) | (24.7 | )% | |||||
FHLB advances | 2,261 | 2,454 | (193 | ) | (7.9 | ) | ||||||||
Repurchase agreement | 201 | 203 | (2 | ) | (1.0 | ) | ||||||||
$ | 4,894 | $ | 5,886 | $ | (992 | ) | (16.9 | )% |
Three Months Ended March 31, | Dollar | Percent | ||||||||||||
2013 | 2012 | Change | Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Non-interest income | ||||||||||||||
Service charges and fees | $ | 4,291 | $ | 4,238 | $ | 53 | 1.3 | % | ||||||
Other charges and fees | 212 | 128 | 84 | 65.6 | ||||||||||
Net gain on sale of mortgage loans | — | 2,232 | (2,232 | ) | (100.0 | ) | ||||||||
Bank-owned life insurance income | 162 | 109 | 53 | 48.6 | ||||||||||
Gain (loss) on sale of available for sale securities | (177 | ) | — | (177 | ) | N/M 1 | ||||||||
Gain (loss) on sale and disposition of assets | 230 | (81 | ) | 311 | N/M 1 | |||||||||
Other | 1,141 | 104 | 1,037 | 997.1 | ||||||||||
$ | 5,859 | $ | 6,730 | $ | (871 | ) | (12.9 | )% |
Three Months Ended March 31, | Dollar | Percent | ||||||||||||
2013 | 2012 | Change | Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Non-interest expense | ||||||||||||||
Salaries and employee benefits | $ | 12,915 | $ | 11,724 | $ | 1,191 | 10.2 | % | ||||||
Acquisition costs | — | 144 | (144 | ) | N/M 1 | |||||||||
Advertising | 513 | 285 | 228 | 80.0 | ||||||||||
Occupancy and equipment | 1,790 | 1,470 | 320 | 21.8 | ||||||||||
Outside professional services | 684 | 483 | 201 | 41.6 | ||||||||||
Regulatory assessments | 579 | 581 | (2 | ) | (0.3 | ) | ||||||||
Data processing | 1,518 | 1,245 | 273 | 21.9 | ||||||||||
Office operations | 1,648 | 1,545 | 103 | 6.7 | ||||||||||
Other | 1,226 | 975 | 251 | 25.7 | ||||||||||
$ | 20,873 | $ | 18,452 | $ | 2,421 | 13.1 | % |
Three Months Ended March 31, | ||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||
Average Outstanding Balance | Interest Earned/Paid | Yield/ Rate | Average Outstanding Balance | Interest Earned/Paid | Yield/ Rate | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Commercial real estate | $ | 839,155 | $ | 12,336 | 5.88 | % | $ | 582,710 | $ | 9,054 | 6.22 | % | ||||||||||
Commercial and industrial | 283,547 | 3,274 | 4.62 | 69,519 | 908 | 5.22 | ||||||||||||||||
One- to four- family real estate | 371,674 | 4,868 | 5.24 | 371,257 | 4,711 | 5.08 | ||||||||||||||||
Home equity/home improvement | 133,291 | 1,824 | 5.47 | 140,754 | 1,955 | 5.56 | ||||||||||||||||
Other consumer | 57,164 | 834 | 5.84 | 50,635 | 776 | 6.13 | ||||||||||||||||
Loans held for sale | 738,234 | 7,242 | 3.92 | 661,688 | 6,916 | 4.18 | ||||||||||||||||
Less: deferred fees and allowance for loan loss | (17,240 | ) | — | — | (16,812 | ) | — | — | ||||||||||||||
Loans receivable 1 | 2,405,825 | 30,378 | 5.05 | 1,859,751 | 24,320 | 5.23 | ||||||||||||||||
Agency mortgage-backed securities | 294,995 | 1,501 | 2.04 | 308,324 | 2,125 | 2.76 | ||||||||||||||||
Agency collateralized mortgage obligations | 288,958 | 881 | 1.22 | 552,215 | 2,308 | 1.67 | ||||||||||||||||
Investment securities | 55,126 | 495 | 3.59 | 56,813 | 498 | 3.51 | ||||||||||||||||
FHLB and FRB stock | 35,030 | 133 | 1.52 | 33,554 | 106 | 1.26 | ||||||||||||||||
Interest-earning deposit accounts | 54,096 | 31 | 0.23 | 33,809 | 19 | 0.22 | ||||||||||||||||
Total interest-earning assets | 3,134,030 | 33,419 | 4.27 | 2,844,466 | 29,376 | 4.13 | ||||||||||||||||
Non-interest-earning assets | 188,869 | 131,352 | ||||||||||||||||||||
Total assets | $ | 3,322,899 | $ | 2,975,818 | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing demand | $ | 465,385 | 470 | 0.40 | $ | 473,687 | 1,108 | 0.94 | ||||||||||||||
Savings and money market | 877,690 | 588 | 0.27 | 759,590 | 486 | 0.26 | ||||||||||||||||
Time | 450,071 | 1,374 | 1.22 | 472,097 | 1,635 | 1.39 | ||||||||||||||||
Borrowings | 590,238 | 2,462 | 1.67 | 610,255 | 2,657 | 1.74 | ||||||||||||||||
Total interest-bearing liabilities | 2,383,384 | 4,894 | 0.82 | 2,315,629 | 5,886 | 1.02 | ||||||||||||||||
Non-interest-bearing demand | 367,217 | 213,220 | ||||||||||||||||||||
Non-interest-bearing liabilities | 44,340 | 35,920 | ||||||||||||||||||||
Total liabilities | 2,794,941 | 2,564,769 | ||||||||||||||||||||
Total shareholders’ equity | 527,958 | 411,049 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 3,322,899 | $ | 2,975,818 | ||||||||||||||||||
Net interest income and margin | $ | 28,525 | 3.64 | % | $ | 23,490 | 3.30 | % | ||||||||||||||
Net interest income and margin (tax-equivalent basis) 2 | $ | 28,696 | 3.66 | % | $ | 23,663 | 3.33 | % | ||||||||||||||
Net interest rate spread | 3.45 | % | 3.11 | % | ||||||||||||||||||
Net earning assets | $ | 750,646 | $ | 528,837 | ||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 131.49 | % | 122.84 | % | ||||||||||||||||||
1 | Calculated net of deferred fees, loan discounts, loans in process and allowance for loan losses. Includes loans held for sale. | |||||||||||||||||||||
2 | In order to make pretax income and resultant yields on tax-exempt investments and loans comparable to those on taxable investments and loans, a tax-equivalent adjustment has been computed using a federal income tax rate of 35% for 2013 and 2012. Tax-exempt investments and loans had an average balance of $51.9 million and $52.6 million for the three months ended March 31, 2013 and 2012, respectively. |
Three Months Ended March 31, | |||||||||||
2013 versus 2012 | |||||||||||
Increase (Decrease) Due to | Total Increase | ||||||||||
Volume | Rate | (Decrease) | |||||||||
(Dollars in thousands) | |||||||||||
Interest-earning assets: | |||||||||||
Commercial real estate | $ | 3,793 | $ | (511 | ) | $ | 3,282 | ||||
Commercial and industrial | 2,483 | (117 | ) | 2,366 | |||||||
One- to four- family real estate | 5 | 152 | 157 | ||||||||
Home equity/home improvement | (102 | ) | (29 | ) | (131 | ) | |||||
Other consumer | 97 | (39 | ) | 58 | |||||||
Loans held for sale | 768 | (442 | ) | 326 | |||||||
Loans receivable | 7,044 | (986 | ) | 6,058 | |||||||
Agency mortgage-backed securities | (88 | ) | (536 | ) | (624 | ) | |||||
Agency collateralized mortgage obligations | (910 | ) | (517 | ) | (1,427 | ) | |||||
Investment securities | (15 | ) | 12 | (3 | ) | ||||||
FHLB and FRB stock | 5 | 22 | 27 | ||||||||
Interest-earning deposit accounts | 12 | — | 12 | ||||||||
Total interest-earning assets | 6,048 | (2,005 | ) | 4,043 | |||||||
Interest-bearing liabilities: | |||||||||||
Interest-bearing demand | (19 | ) | (619 | ) | (638 | ) | |||||
Savings and money market | 78 | 24 | 102 | ||||||||
Time | (74 | ) | (187 | ) | (261 | ) | |||||
Borrowings | (86 | ) | (109 | ) | (195 | ) | |||||
Total interest bearing liabilities | (101 | ) | (891 | ) | (992 | ) | |||||
Net interest income | $ | 6,149 | $ | (1,114 | ) | $ | 5,035 |
March 31, 2013 | |||||||||||||||||||
Less than One Year | One through Three Years | Four through Five Years | After Five Years | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Contractual obligations: | |||||||||||||||||||
Deposits without a stated maturity | $ | 1,763,599 | $ | — | $ | — | $ | — | $ | 1,763,599 | |||||||||
Certificates of deposit | 315,548 | 114,542 | 17,545 | 1,856 | 449,491 | ||||||||||||||
FHLB advances (gross of restructuring prepayment penalty of $2,937) | 377,245 | 97,304 | 78,047 | 14,562 | 567,158 | ||||||||||||||
Repurchase agreement | — | — | — | 25,000 | 25,000 | ||||||||||||||
Private equity fund for Community Reinvestment Act purposes | 1,800 | — | — | — | 1,800 | ||||||||||||||
Operating leases (premises) | 2,402 | 4,606 | 3,057 | 5,679 | 15,744 | ||||||||||||||
Total contractual obligations | $ | 2,460,594 | $ | 216,452 | $ | 98,649 | $ | 47,097 | $ | 2,822,792 | |||||||||
Off-balance sheet loan commitments: 1 | |||||||||||||||||||
Unused commitments to extend credit | $ | 300,367 | $ | — | $ | — | $ | — | $ | 300,367 | |||||||||
Unused commitment on Warehouse Purchase Program loans | 605,528 | — | — | — | 605,528 | ||||||||||||||
Letters of credit | 2,042 | — | — | — | 2,042 | ||||||||||||||
Total loan commitments | $ | 907,937 | $ | — | $ | — | $ | — | $ | 907,937 | |||||||||
Total contractual obligations and loan commitments | $ | 3,730,729 | |||||||||||||||||
1 Loans having no stated maturity are reported in the “Less than One Year” category. |
Actual | Required for Capital Adequacy Purposes | To Be Well-Capitalized Under Prompt Corrective Action Regulations | ||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
March 31, 2013 | (Dollars in Thousands) | |||||||||||||||||||
Total risk-based capital | ||||||||||||||||||||
the Company | $ | 516,036 | 20.29 | % | $ | 203,464 | 8.00 | % | 254,331 | 10.00 | % | |||||||||
the Bank | 414,419 | 16.30 | 203,376 | 8.00 | 254,221 | 10.00 | ||||||||||||||
Tier 1 risk-based capital | ||||||||||||||||||||
the Company | 497,393 | 19.56 | 101,732 | 4.00 | 152,598 | 6.00 | ||||||||||||||
the Bank | 395,777 | 15.57 | 101,688 | 4.00 | 152,532 | 6.00 | ||||||||||||||
Tier 1 leverage | ||||||||||||||||||||
the Company | 497,393 | 15.16 | 131,207 | 4.00 | 164,008 | 5.00 | ||||||||||||||
the Bank | 395,777 | 12.07 | 131,156 | 4.00 | 163,945 | 5.00 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Total risk-based capital | ||||||||||||||||||||
the Company | $ | 505,566 | 22.47 | % | $ | 179,957 | 8.00 | % | $ | 224,947 | 10.00 | % | ||||||||
the Bank | 404,562 | 18.00 | 179,847 | 8.00 | 224,809 | 10.00 | ||||||||||||||
Tier 1 risk-based capital | ||||||||||||||||||||
the Company | 487,515 | 21.67 | 89,979 | 4.00 | 134,968 | 6.00 | ||||||||||||||
the Bank | 386,511 | 17.19 | 89,923 | 4.00 | 134,885 | 6.00 | ||||||||||||||
Tier 1 leverage | ||||||||||||||||||||
the Company | 487,515 | 13.97 | 139,620 | 4.00 | 174,525 | 5.00 | ||||||||||||||
the Bank | 386,511 | 11.08 | 139,595 | 4.00 | 174,493 | 5.00 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
March 31, 2013 | |||||||||||||||||||||
Change in Interest Rates in Basis Points | Economic Value of Equity | Earnings at Risk (12 months) | |||||||||||||||||||
Estimated EVE | Estimated Increase / (Decrease) in EVE | EVE Ratio % | Estimated Net Interest Income | Increase / (Decrease) in Estimated Net Interest Income | |||||||||||||||||
$ Amount | $ Change | % Change | $ Amount | $ Change | % Change | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
400 | 559,800 | 15,194 | 2.79 | 17.58 | 133,831 | 14,737 | 12.37 | ||||||||||||||
300 | 566,212 | 21,606 | 3.97 | 17.43 | 128,134 | 9,040 | 7.59 | ||||||||||||||
200 | 566,743 | 22,137 | 4.06 | 17.13 | 122,451 | 3,357 | 2.82 | ||||||||||||||
100 | 559,402 | 14,796 | 2.72 | 16.62 | 117,547 | (1,547 | ) | (1.30 | ) | ||||||||||||
— | 544,606 | — | — | 15.93 | 119,094 | — | — | ||||||||||||||
(100 | ) | 514,270 | (30,336 | ) | (5.57 | ) | 14.86 | 117,257 | (1,837 | ) | (1.54 | ) |
December 31, 2012 | |||||||||||||||||||||
Change in Interest Rates in Basis Points | Economic Value of Equity | Earnings at Risk (12 months) | |||||||||||||||||||
Estimated EVE | Estimated Increase / (Decrease) in EVE | EVE Ratio % | Estimated Net Interest Income | Increase / (Decrease) in Estimated Net Interest Income | |||||||||||||||||
$ Amount | $ Change | % Change | $ Amount | $ Change | % Change | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
400 | 534,416 | 18,473 | 3.58 | 15.40 | 140,514 | 11,608 | 9.01 | ||||||||||||||
300 | 541,071 | 25,128 | 4.87 | 15.31 | 134,215 | 5,309 | 4.12 | ||||||||||||||
200 | 541,636 | 25,693 | 4.98 | 15.07 | 127,916 | (990 | ) | (0.77 | ) | ||||||||||||
100 | 534,009 | 18,066 | 3.50 | 14.62 | 125,333 | (3,573 | ) | (2.77 | ) | ||||||||||||
— | 515,943 | — | — | 13.94 | 128,906 | — | — | ||||||||||||||
(100 | ) | 493,055 | (22,888 | ) | (4.44 | ) | 13.15 | 127,524 | (1,382 | ) | (1.07 | ) |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
Exhibit | |||
Number | Description | ||
2.1 | Agreement and Plan of Merger by and between the Registrant and Highlands Bancshares, Inc. (incorporated herein by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on December 9, 2011 (File No. 001-34737)) | ||
3.1 | Charter of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-165509)) | ||
3.2 | Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-165509)) | ||
4.0 | Certificate of Registrant’s Common Stock (incorporated herein by reference to Exhibit 4.0 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-165509)) | ||
10.1 | Form of Severance Agreement between ViewPoint Bank and the following executive officers: Pathie E. McKee and Mark L. Williamson (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 17, 2011 (File No. 001-34737)) | ||
10.2 | Summary of Director Board Fee Arrangements (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2007 (File No. 001-32992)) | ||
10.3 | ViewPoint Bank Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 0-24566-01)) | ||
10.4 | Amended and Restated ViewPoint Bank Supplemental Executive Retirement Plan (incorporated herein by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1, as amended (File No. 0-24566-01)) | ||
10.5 | 2013 Executive Annual Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 6, 2013 (File No. 001-34737)) | ||
10.6 | Resignation, Consulting, Noncompetition, Non-solicitation and Confidentiality Agreement and Release between the Registrant and Garold R. Base (incorporated herein by reference to Exhibit 10.11 to the Registrant's Annual Report on Form 10-K filed with the SEC on February 28, 2012 (File No. 001-34737) |
Exhibit | |||
Number | Description | ||
10.7 | Employment Agreement between the Registrant and ViewPoint Bank, N.A. and Kevin Hanigan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-4 filed with the SEC on January 17, 2012 (File No. 333-179037)) | ||
10.8 | Form of General Release between the Registrant and Mark E. Hord (incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on July 5, 2012 (File No. 001-34737) | ||
10.9 | Form of General Release between the Registrant and James C. Parks (incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on August 10, 2012 (File No. 001-34737) | ||
10.10 | Form of Severance Agreement between ViewPoint Bank and the following executive officers: Scott A. Almy, Charles D. Eikenberg and Thomas S. Swiley (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on November 1, 2012 (File No. 001-34737)) | ||
10.11 | Form of Director's Agreement between the Registrant and James B. McCarley (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 6, 2013 (File No. 001-34737)) | ||
10.12 | Form of Director's Agreement between the Registrant and Gary D. Basham (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 6, 2013 (File No. 001-34737)) | ||
10.13 | Form of Director's Agreement between the Registrant and Jack D. Ersman (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 6, 2013 (File No. 001-34737)) | ||
10.14 | Form of Director's Agreement between the Registrant and V. Keith Sockwell (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 6, 2013 (File No. 001-34737)) | ||
11 | Statement regarding computation of per share earnings (See Note 2 of the Condensed Notes to Unaudited Consolidated Interim Financial Statements included in this Form 10-Q). | ||
31.1 | Rule 13a — 14(a)/15d — 14(a) Certification (Chief Executive Officer) | ||
31.2 | Rule 13a — 14(a)/15d — 14(a) Certification (Chief Financial Officer) | ||
32 | Section 1350 Certifications | ||
101* | The following materials from the ViewPoint Financial Group, Inc. Annual Report on Form 10-Q for the quarter ended March 31, 2013, formatted in eXtensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (vi) the Consolidated Statements of Cash Flows and (vii) related notes. |
* | This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934. |
Date: | April 30, 2013 | By: | /s/ Kevin J. Hanigan | |
Kevin J. Hanigan, | ||||
President and Chief Executive Officer | ||||
(Duly Authorized Officer) | ||||
Date: | April 30, 2013 | By: | /s/ Pathie E. McKee | |
Pathie E. McKee, | ||||
Executive Vice President, Chief Financial Officer and Treasurer | ||||
(Principal Financial and Accounting Officer) |
31.1 | Certification of the Chief Executive Officer |
31.2 | Certification of the Chief Financial Officer |
32.0 | Section 1350 Certifications |
101* | Financial statements from Quarterly Report on Form 10-Q of the Registrant for the quarter ended March 31, 2013, formatted in Extensible Business Reporting Language: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders' Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Condensed Notes to Unaudited Consolidated Interim Financial Statements.* |
* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934. |
1. | I have reviewed this Quarterly Report on Form 10-Q of ViewPoint Financial Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | April 30, 2013 | By: | /s/ Kevin J. Hanigan | |
Kevin J. Hanigan, | ||||
President and Chief Executive Officer | ||||
1. | I have reviewed this Quarterly Report on Form 10-Q of ViewPoint Financial Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | April 30, 2013 | By: | /s/ Pathie E. McKee | |
Pathie E. McKee, | ||||
Executive Vice President, Chief Financial Officer and Treasurer |
1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and | |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of the dates and for the periods presented in the financial statements included in such Report. |
Date: | April 30, 2013 | By: | /s/ Kevin J. Hanigan | |
Kevin J. Hanigan, | ||||
President and Chief Executive Officer | ||||
Date: | April 30, 2013 | By: | /s/ Pathie E. McKee | |
Pathie E. McKee, | ||||
Executive Vice President, Chief Financial Officer and Treasurer |
SHARE-BASED COMPENSATION - Narrative (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Restricted stock
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation expense related to non-vested shares | $ 9,234 |
Weighted-average period | 3 years 8 months 16 days |
Stock options
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation expense related to non-vested shares | $ 3,953 |
Weighted-average period | 4 years 0 months 25 days |
FAIR VALUE - Narrative (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2012
|
|
Fair Value Disclosures [Abstract] | |
Gain on change in fair value on loans held for sale | $ 371 |
Gain (Loss) on Fair Value Hedges Recognized in Earnings | $ (211) |
SECURITIES - Summarized Information Regarding Pledged Securities (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Public fund certificates of deposit | $ 136,419 | $ 134,846 |
Repurchase agreements | 25,000 | 25,000 |
Carrying value of securities pledged on above funds | $ 142,811 | $ 176,508 |
SHARE-BASED COMPENSATION - (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
|
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Compensation cost charged to income for share-based compensation is presented below:
|
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Nonvested Shares for the Company's Stock Plans | A combined summary of changes in the nonvested shares for the Company's stock plans follows:
|
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of activity in the stock option portion of the plans as of March 31, 2013, is presented below:
|
FAIR VALUE - Activity for Other Real Estate Owned and Related Valuation Allowances (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Other Real Estate Owned Fair Value [Roll Forward] | ||
Beginning Balance | $ 1,886 | $ 2,286 |
Sale of property (gross) | 969 | 825 |
Ending Balance | 1,505 | 2,021 |
Other real estate owned
|
||
Other Real Estate Owned Fair Value [Roll Forward] | ||
Transfers in at fair value | 590 | 640 |
Change in valuation allowance | (2) | (80) |
Valuation allowance
|
||
Real Estate Owned Valuation Allowance [Roll Forward] | ||
Beginning balance | 57 | 1,076 |
Sale of property | (32) | (15) |
Valuation adjustment | 34 | 95 |
Ending balance | $ 59 | $ 1,156 |
LOANS - Information on Loans Modified as Troubled Debt Restructuring by Category (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | $ 798 | $ 715 |
Financing receivable, modifications, subsequent default, recorded investment | 598 | |
Commercial real estate
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 690 | |
Commercial and Industrial
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 33 | 82 |
Other Consumer
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 75 | |
One- to Four-Family Real Estate
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 633 | |
Financing receivable, modifications, subsequent default, recorded investment | 558 | |
Home Equity/Home Improvement
|
||
Financing Receivable, Modifications [Line Items] | ||
Financing receivable, modifications, subsequent default, recorded investment | 40 | |
Principal Deferrals
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 765 | 0 |
Principal Deferrals | Commercial real estate
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 690 | |
Principal Deferrals | Commercial and Industrial
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 0 | 0 |
Principal Deferrals | Other Consumer
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 75 | |
Principal Deferrals | One- to Four-Family Real Estate
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 0 | |
Combination Of Rate And Maturity
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 33 | 383 |
Combination Of Rate And Maturity | Commercial real estate
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 0 | |
Combination Of Rate And Maturity | Commercial and Industrial
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 33 | 0 |
Combination Of Rate And Maturity | Other Consumer
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 0 | |
Combination Of Rate And Maturity | One- to Four-Family Real Estate
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 383 | |
Other Member
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 0 | 332 |
Other Member | Commercial real estate
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 0 | |
Other Member | Commercial and Industrial
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 0 | 82 |
Other Member | Other Consumer
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | 0 | |
Other Member | One- to Four-Family Real Estate
|
||
Financing Receivable, Modifications [Line Items] | ||
Loans Modified As Troubled Debt Restructurings During Period | $ 250 |
LOANS - Allowance for loan losses (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
|||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||
Beginning balance | $ 18,051 | $ 17,487 | |||||
Charge-offs | (476) | (496) | |||||
Recoveries | 184 | 137 | |||||
Provision expense (benefit) | 883 | 895 | |||||
Ending balance | 18,642 | 18,023 | |||||
Individually evaluated for impairment | 5,185 | 3,309 | |||||
Collectively evaluated for impairment | 13,457 | 14,714 | |||||
Individually evaluated for impairment | 32,319 | 26,136 | |||||
Collectively evaluated for impairment | 1,702,814 | 1,229,977 | |||||
PCI Loans | 10,604 | ||||||
Commercial real estate | 897,534 | [1] | 624,057 | 839,908 | [1] | ||
Total commercial and industrial loans | 302,466 | [1] | 70,316 | 278,525 | [1] | ||
One- to four-family real estate | 358,823 | [1] | 372,070 | 378,255 | [1] | ||
Home equity/home improvement | 131,776 | [1] | 139,339 | 135,001 | [1] | ||
Other consumer loans | 55,138 | 50,331 | 59,080 | ||||
Gross loans held for investment | 1,745,737 | 1,256,113 | 1,690,769 | ||||
Commercial real estate
|
|||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||
Beginning balance | 11,304 | 10,621 | |||||
Charge-offs | (87) | 0 | |||||
Recoveries | 0 | 0 | |||||
Provision expense (benefit) | (312) | 561 | |||||
Ending balance | 10,905 | 11,182 | |||||
Individually evaluated for impairment | 2,513 | 2,346 | |||||
Collectively evaluated for impairment | 8,392 | 8,836 | |||||
Individually evaluated for impairment | 16,067 | 18,861 | |||||
Collectively evaluated for impairment | 873,428 | 605,196 | |||||
PCI Loans | 8,039 | ||||||
Commercial and Industrial
|
|||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||
Beginning balance | 2,574 | 2,090 | |||||
Charge-offs | (210) | (215) | |||||
Recoveries | 38 | 23 | |||||
Provision expense (benefit) | 1,166 | 266 | |||||
Ending balance | 3,568 | 2,164 | |||||
Individually evaluated for impairment | 1,405 | 135 | |||||
Collectively evaluated for impairment | 2,163 | 2,029 | |||||
Individually evaluated for impairment | 7,009 | 489 | |||||
Collectively evaluated for impairment | 294,256 | 69,827 | |||||
PCI Loans | 1,201 | ||||||
One- to Four-Family Real Estate
|
|||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||
Beginning balance | 2,356 | 3,027 | |||||
Charge-offs | (29) | (84) | |||||
Recoveries | 6 | 7 | |||||
Provision expense (benefit) | 192 | 59 | |||||
Ending balance | 2,525 | 3,009 | |||||
Individually evaluated for impairment | 996 | 607 | |||||
Collectively evaluated for impairment | 1,529 | 2,402 | |||||
Individually evaluated for impairment | 7,748 | 5,361 | |||||
Collectively evaluated for impairment | 350,115 | 366,709 | |||||
PCI Loans | 960 | ||||||
Home Equity/Home Improvement
|
|||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||
Beginning balance | 1,199 | 1,043 | |||||
Charge-offs | 0 | 0 | |||||
Recoveries | 0 | 0 | |||||
Provision expense (benefit) | (125) | (29) | |||||
Ending balance | 1,074 | 1,014 | |||||
Individually evaluated for impairment | 198 | 209 | |||||
Collectively evaluated for impairment | 876 | 805 | |||||
Individually evaluated for impairment | 1,055 | 1,275 | |||||
Collectively evaluated for impairment | 130,510 | 138,064 | |||||
PCI Loans | 211 | ||||||
Other Consumer
|
|||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||
Beginning balance | 618 | 706 | |||||
Charge-offs | (150) | (197) | |||||
Recoveries | 140 | 107 | |||||
Provision expense (benefit) | (38) | 38 | |||||
Ending balance | 570 | 654 | |||||
Individually evaluated for impairment | 73 | 12 | |||||
Collectively evaluated for impairment | 497 | 642 | |||||
Individually evaluated for impairment | 440 | 150 | |||||
Collectively evaluated for impairment | 54,505 | 50,181 | |||||
PCI Loans | $ 193 | ||||||
|
SHARE-BASED COMPENSATION - Compensation Cost Charged to Income (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Compensation cost charged to income for: | |
Income tax benefit | $ 200 |
Restricted stock
|
|
Compensation cost charged to income for: | |
Compensation cost | 430 |
Stock options
|
|
Compensation cost charged to income for: | |
Compensation cost | $ 142 |
FAIR VALUE - Summary of Fair Value Measured on Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale, at fair value | $ 315,438 | $ 287,034 |
Agency residential mortgage-backed securities
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale, at fair value | 214,594 | 166,100 |
SBA pools
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale, at fair value | 3,281 | 3,448 |
Fair Value Measurements Using Significant Other Observable Inputs (Level 2)
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale, at fair value | 315,438 | 287,034 |
Fair Value, Measurements, Recurring
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value Measurements Using Significant Other Observable Inputs (Level 2)
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale, at fair value | 315,438 | 287,034 |
Fair Value, Measurements, Recurring | Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | Agency residential mortgage-backed securities
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale, at fair value | 214,594 | 166,100 |
Fair Value, Measurements, Recurring | Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | Agency residential collateralized mortgage obligations
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale, at fair value | 97,563 | 117,486 |
Fair Value, Measurements, Recurring | Fair Value Measurements Using Significant Other Observable Inputs (Level 2) | SBA pools
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale, at fair value | $ 3,281 | $ 3,448 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Cash flows from operating activities | ||
Net income | $ 8,058 | $ 7,072 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 883 | 895 |
Depreciation and amortization | 1,140 | 916 |
Deferred tax expense (benefit) | 246 | (507) |
Premium amortization and accretion of securities, net | 1,778 | 1,044 |
Accretion related to acquired loans | (945) | 0 |
Loss on sale of available for sale securities | 177 | 0 |
ESOP compensation expense | 965 | 666 |
Share-based compensation expense | 572 | 333 |
Net gain on loans held for sale | 0 | (2,232) |
Loans originated or purchased for sale | (3,431,487) | (2,886,917) |
Proceeds from sale of loans held for sale | 3,734,735 | 2,989,093 |
FHLB stock dividends | (34) | (32) |
Bank-owned life insurance (BOLI) income | (162) | (109) |
Gain (loss) on sale and disposition of assets | (230) | 81 |
Net change in deferred loan fees | 126 | 120 |
Net change in accrued interest receivable | 874 | 937 |
Net change in other assets | 7,111 | 2,653 |
Net change in other liabilities | (6,974) | (2,123) |
Net cash provided by operating activities | 316,833 | 111,890 |
Available-for-sale securities: | ||
Maturities, prepayments and calls | 126,337 | 222,281 |
Purchases | (165,941) | (200,000) |
Proceeds from sale of AFS securities | 10,614 | 0 |
Held-to-maturity securities: | ||
Maturities, prepayments and calls | 31,049 | 33,768 |
Purchases | (1,354) | 0 |
Net change in loans held for investment | (54,905) | (29,084) |
Purchase of FHLB and Federal Reserve Bank stock | 13,452 | 4,698 |
Purchases of premises and equipment | (910) | (394) |
Proceeds from sale of assets | 1,182 | 746 |
Net cash provided by (used in) investing activities | (40,476) | 32,015 |
Cash flows from financing activities | ||
Net change in deposits | 35,284 | (29,872) |
Proceeds from FHLB advances | 230,000 | 345,500 |
Repayments on FHLB advances | (557,987) | (459,386) |
Payment of dividends | 0 | (2,022) |
Proceeds from stock option exercises | 157 | 34 |
Net cash used in financing activities | (292,546) | (145,746) |
Net change in cash and cash equivalents | (16,189) | (1,841) |
Beginning cash and cash equivalents | 68,696 | 46,348 |
Ending cash and cash equivalents | 52,507 | 44,507 |
Supplemental cash flow information: | ||
Interest paid | 4,962 | 5,935 |
Income taxes paid | 7 | 506 |
Supplemental noncash disclosures: | ||
Transfers from loans to other real estate owned | $ 590 | $ 640 |