Guaranty Financial Corp · OTC:GFCJ
Guaranty Financial — Q3 2008 Earnings Presentation
21 slides from Guaranty Financial's earnings presentation, Nov 5, 2008
Slide 1: Third Quarter 2008 Financial Highlights
Third Quarter 2008 Financial Highlights November 5, 2008
Slide 2: Forward Looking Statements
Forward Looking Statements Some statements made in this news release and any hyperlinked materials may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by their use of terms and phrases
Slide 3: Earnings Highlights
($ in millions, except per share data) 3Q08 2Q08 3Q07 Net Interest Income before LLP $83 $100 $99 (Provision) Credit for Credit Losses (78 ) (99 ) (19 ) Net Interest Income After Provision 5 1 80 Non-Interest Income (19 )* 41 42 Non-Interest Expense (105 )** (99 ) (90 ) (Loss) Income Before Taxes (1
Slide 4: Net Interest Margin
Net Interest Margin 2004 2005 2006 2007 9/30/2008 Guaranty Net Interest Margin 0.0255 0.0258 0.0258 0.0259 0.0239 Average Fed Funds 0.014 0.0321 0.0496 0.0503 0.024 YTD
Slide 5: Balance Sheet Highlights
($ in billions, except per share data) (all data is as of the end of the period) 3Q08 2Q08 3Q07 Total Assets $15.4 $16.0 $16.5 Loans, net of allowance 10.1 10.0 9.6 Securities - amortized cost 4.4 5.1 5.8 Net Unrealized Losses on Avail-for-Sale Securities (0.4 ) (0.5 ) - Total Liabilities 14.4 15.2
Slide 6: Deposit Mix
Deposit Mix Deposits Noninterest-bearing demand Interest-bearing Demand Brokered Certificates of Deposit Certificates of deposit Savings deposits % 0.03 0.42 0.01 0.52 0.02 Total: $9.2 billion as of 9/30/2008 $11.0 billion in total deposits as of October 31, 2008. Increase of $1.8 billion during Oct
Slide 7: Liquidity
Liquidity Core deposits CDs >$100k Brokered deposits Long term borrowings Short term borrowings % 0.54 0.11 0.01 0.08 0.27 Total: $14.3 billion as of 9/30/2008 Funding Position As of October 31, 2008: Excess borrowing capacity is in excess of $5.7 billion $0.2 billion in non- commercial deposits abo
Slide 8: Loan Portfolio
Loan Portfolio Outstanding as of 9/30/08 Change Since 6/30/08 Single-family mortgage $1,397 ($88) Single-family mortgage warehouse 924 (47) Single-family construction (homebuilders) 1,060 (163) Multifamily and senior housing 2,044 167 Commercial real estate 1,837 63 Commercial and business 1,432 48
Slide 9: Nonperforming Assets by Type
Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sept-08 Residential Mortgage 23.029 30 40 69 97 108 REO 7 9 13 23 42 50 Other 6 5 9 10 34 67 Homebuilder (Private) 86 117 182 233 295 Nonperforming Assets by Type Homebuilder Other REO Residential Mortgage $284 ($ in millions) $406 6 7 23 3 9 30 117 182 233 $179 $1
Slide 10: Allowance for Loan Losses by Category
Allowance for Loan Losses by Category ($ in millions) 3Q 2008 3Q 2008 2Q 2008 2Q 2008 2007 2007 2006 2006 Allowance Allowance as a % of Loan Category Allowance Allowance as a % of Loan Category Allowance Allowance as a % of Loan Category Allowance Allowance as a % of Loan Category Single-family mort
Slide 11: Allowance for credit losses and nonaccrual loans and other loans
Allowance for credit losses and nonaccrual loans and other loans Three Months Ended Sept 30, 2008 Three Months Ended June 30, 2008 Balance at beginning of period $261 $181 Provision (credit) for credit losses 78 99 Net (charge-offs) recoveries (100) (19) Balance at end of period 239 261 Allowance fo
Slide 12: Homebuilder Portfolios
Homebuilder Portfolios Sep-07 Dec-07 Mar-08 Jun-08 Sept-08 National 0.3 0.2 0.1 0.1 0.1 Regional 1.5 1.3 1.2 1.1 1 Regional builders National builders Outstanding balance
Slide 13: Regional Homebuilder Loans
Regional Homebuilder Loans As of September 30, 2008 ($ in millions) Houses Land/Lots & Other Total % of Total Northern & Central California $41 $101 $142 15% Other California 64 118 182 19% Texas 74 21 95 10% Florida 15 64 79 8% Colorado 39 27 66 7% Arizona 21 33 54 6% Other 60 256 316 35% 314 620 9
Slide 14: Single-Family Mortgages Detail
Single-Family Mortgages Detail September 30, 2008 September 30, 2008 September 30, 2008 September 30, 2008 September 30, 2008 September 30, 2008 September 30, 2008 September 30, 2008 September 30, 2008 September 30, 2008 September 30, 2008 $ in millions $ in millions $ in millions $ in millions $ in
Slide 15: MBS Portfolio Overview
MBS Portfolio Overview September 30, 2008 Amortized Cost ($ in billions) Held to Maturity Available for Sale Total % of Total Agency $0.7 $0.2 $0.9 21% Non-agency 2.2 1.3 3.5 79% Total 2.9 1.5 4.4 100% % of Total 65% 35% 100%
Slide 16: Non-agency MBS Product Type
Non-agency MBS Product Type Non-agency MBS by State Mortgage-Backed Securities Product Type <=2004 2005 2006 2007 MBS 0.04 0.39 0.16 0.41 Unpaid Principal Balance ($ in billions) % of Total Traditional Option Arms $2.9 82% Hybrid Option Arm 0.5 14% Hybrid Arm 0.1 4% TOTAL $3.5 100% California 60% Fl
Slide 17: MBS Portfolio Detail
As of September 30, 2008 ($ Billions) Amortized Cost Fair Value Available for Sale: Agency $0.23 $0.23 Non-agency $1.33 $0.92 Held to Maturity: Agency $0.72 $0.72 Non-agency $2.16 $1.38 Total: $4.44 $3.25 Non-agency MBS Adjustable rate Underlying collateral total delinquency rate (including foreclos
Slide 18: MBS Valuation and Subordination
MBS Valuation and Subordination Valuation of each Non-Agency MBS: Currently no observable transactions for our non-agency MBS, and little reliable observable evidence. Broker price estimates vary widely from broker-to-broker. The SEC and FASB both recently addressed fair value measurements when ther
Slide 19: Operating Efficiency
Operating Efficiency 3Q08 2Q08 1Q08 2007 2006 2005 Compensation and benefits $46 $48 $51 $181 $184 $182 Occupancy 9 9 8 28 28 27 Information systems and technology 5 4 5 14 14 16 Other 31 35 35 149 151 154 91 96 99 372 377 379 Charges related to asset impairments and severance 14 3 - -- - -- 11 5 10
Slide 20: Capital
Capital Tangible Equity/Tangible Assets * Peers: BOKF, BXS, CRBC, CYN, CNB, CFR, DSL, FBC, FULT, PBCT, STSA, TSFG, SUSQ, VLY, and WBS . Total Risk-Based Capital Tier 1 Risk-Based Capital Tier 1 (Core) Capital (Leverage) 10.0% 6.0% 5.0% 12.6% 13.2% 9.0% 8.3% 9.7% 10.1% 5.6% 8.0% (Bank Level) (Bank Le
Slide 21: Third Quarter 2008 Financial Highlights
Third Quarter 2008 Financial Highlights November 5, 2008
Guaranty Financial Group — Q3 2008 Earnings Presentation on 6ix