LegacyTexas Financial Group Inc
LegacyTexas Financial — Q4 2018 Earnings Presentation
25 slides from LegacyTexas Financial's earnings presentation, Jan 22, 2019
Slide 1: Fourth Quarter and Full Year 2018 Investor Presentation
EXHIBIT 99.3 Fourth Quarter and Full Year 2018 Investor Presentation January 23, 2019
Slide 2: Safe harbor statement
FOURTH QUARTER AND FY 2018 Safe harbor statement When used in filings by LegacyTexas Financial Group, Inc. (the "Company”) with the Securities and Exchange Commission (the “SEC”), in the Company's press releases or other public or stockholder communications, and in oral statements made with the appr
Slide 3: Today's presenters
FOURTH QUARTER AND FY 2018 Today’s presenters President and Chief Executive Officer • CEO and President of LegacyTexas Financial Group, Inc. • Former Chairman and Chief Executive Officer of Highlands Bancshares in 2010 • Former Chairman and Chief Executive Officer of Guaranty Bank in 2009 • 38+ year
Slide 4: Key franchise highlights - Q4 2018
FOURTH QUARTER AND FY 2018 – FRANCHISE HIGHLIGHTS Key franchise highlights - Q4 2018 • #1 deposit market share among all banks in affluent Collin County • #2 deposit market share among Dallas-based banks1 in the attractive DFW market, which is North Texas home to 22 companies on the 2018 Fortune 500
Slide 5: Fourth quarter highlights
FOURTH QUARTER AND FY 2018 – QUARTERLY HIGHLIGHTS Fourth quarter highlights ($ in millions except for per share data) Quarter ended December 31, September 30, December 31, 2017 2018 2018 Linked Q ∆ YOY ∆ Selected balance sheet data Gross loans held for investment1 $ 6,483.2 $ 6,764.1 $ 6,790.7 0.4 %
Slide 6: Balance sheet strengthened while minimizing risk
FOURTH QUARTER AND FY 2018 – BALANCE SHEET HIGHLIGHTS Balance sheet strengthened while minimizing risk • Lower CRE and C&D loan concentrations • Reduced level of non-performing assets • Increased non-interest-bearing deposits • Higher capital ratios ($ in millions except for per share data) Year end
Slide 7: Full year profitability highlights
FOURTH QUARTER AND FY 2018 – FULL YEAR PROFITABILITY HIGHLIGHTS Full year profitability highlights ($ in millions except for per share data) Year ended December 31, December 31, 2017 2018 YOY ∆ Selected profitability data Net income $ 89.5 $ 154.2 72.3% Core net income1 101.9 138.4 35.8 Basic EPS 1.
Slide 8: Commercially focused loan portfolio
FOURTH QUARTER AND FY 2018 – BALANCE SHEET Commercially focused loan portfolio Gross loans held for investment1 at Q4 2018 grew $26.7 million from Q3 2018, which included growth in commercial real estate, consumer real estate, and other consumer loans. Total Loans HFI1 $6,791 1 ($ in millions) $6,48
Slide 9: Energy lending: Geographic Concentration of Reserves
FOURTH QUARTER AND FY 2018 – ENERGY LENDING Energy lending Geographic Concentration of Reserves • Reserve-based energy portfolio at December 31, 2018 consisted of 58% 10% 17% crude oil reserves and 42% natural gas 6% R: 000 6% reserves 8% 3% G: 048 • At December 31, 2018, 52 reserve- 7% B: 135 based
Slide 10: Energy lending
FOURTH QUARTER AND FY 2018 – ENERGY LENDING Energy lending • Energy loans are all first liens • No unsecured commitments/exposure R: 000 SNC Breakout of Energy Loans Outstanding loan balances and related loan loss reserves G: 048 ($ in millions) B: 135 7% $34.8 7% $15.4 $23.2 $547.4 $38.1 $531.7 $52
Slide 11: Asset quality
FOURTH QUARTER AND FY 2018 – ASSET QUALITY Asset quality NPAs at Q4 2018 totaled $23.8 million, up $5.5 million from Q3 2018 and down $79.1 million from Q4 2017 . Total Non-performing Assets (including foreclosed assets) ($ in millions) $75.3 $74.4 $67.6 R: 000 $58.4 G: 048 1.46% 1.43% 1.25% $51.0 B
Slide 12: Core funded, low cost deposit base
FOURTH QUARTER AND FY 2018 – BALANCE SHEET Core funded, low cost deposit base Total deposits at Q4 2018 grew $62.0 million from Q3 2018, which included growth in interest-bearing demand and time deposits. Total Deposits ($ in millions) $6,768 $6,842 As of December 31, 2018 $6,365 $5,227 $1,628 25.9%
Slide 13: Net interest income
FOURTH QUARTER AND FY 2018 – INCOME STATEMENT Net interest income • Net interest income for Q4 2018 was $84.3 million, down $1.4 million from Q3 2018 and up $4.1 million from Q4 2017. • The net interest margin for Q4 2018 was 3.98%, up 8 basis points from Q3 2018 and up 20 basis points from Q4 2017.
Slide 14: Disciplined expense management
FOURTH QUARTER AND FY 2018 – INCOME STATEMENT Disciplined expense management GAAP efficiency ratio was 44.39% for Q4 2018, compared to 42.66% for Q3 2018, while core (non-GAAP) efficiency ratio was 44.13% for Q4 2018, compared to 42.46% for Q3 2018. Net interest income Core non-interest income Core
Slide 15: Prudent capital management
FOURTH QUARTER AND FY 2018 – CAPITAL Prudent capital management TCE / TA1 Tier 1 common risk-based2 13.0% 15.1% 10.3% 11.1% 9.6% 9.4% 8.3% 8.6% 8.8% 9.1% 2014Y 2015Y 2016Y 2017Y 2018Y 2014Y 2015Y 2016Y 2017Y 2018Y Tier 1 leverage2 13.9% 10.8% 9.5% 8.7% 9.2% 2014Y 2015Y 2016Y 2017Y 2018Y Source: Comp
Slide 16: Key investment highlights
FOURTH QUARTER AND FY 2018 – INVESTMENT HIGHLIGHTS Key investment highlights One of the largest independent Texas financial services companies built upon a strong customer focus and a long history of serving Texans Commercially focused loan growth and disciplined expense management Growth balanced w
Slide 17: Looking ahead
FOURTH QUARTER AND FY 2018 – LOOKING AHEAD Looking ahead Expand our Texas footprint and solidify our deep-rooted culture Focus on growth – organically and through selective acquisitions Diversify income sources Prudent and focused expense management Maintain asset quality Strategic capital deploymen
Slide 18: Manifesto
FOURTH QUARTER AND FY 2018 – OUR VISION Manifesto We believe in our customers. Their goals. Their dreams. Their ambitions for tomorrow. And since 1952, we’ve been doing whatever it takes to support them as they advance in business and in life. We are responsive, accountable, trusted, experts at what
Slide 19: Appendix
Appendix
Slide 20: Reconciliation of Core (non-GAAP) to GAAP Net Income and EPS
Supplemental Information – Non-GAAP Financial Measures (unaudited) Reconciliation of Core (non-GAAP) to GAAP Net Income and Earnings per Share (net of tax): At or For the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2018 2018 2018 2018 2017 (Dollars in thousands, except p
Slide 21: Reconciliation of Core (non-GAAP) to GAAP Net Income and EPS, Full Year
Supplemental Information – Non-GAAP Financial Measures (unaudited) Reconciliation of Core (non-GAAP) to GAAP Net Income and Earnings per Share (net of tax): At or For the Year Ended December 31, 2018 2017 2016 2015 2014 GAAP net income available to common shareholders 1 $ 153,692 $ 89,176 $ 97,324 $
Slide 22: Non-GAAP Reconciliation: Non-Interest Income and Expense, Quarterly
Supplemental Information – Non-GAAP Financial Measures (unaudited) At or For the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2018 2018 2018 2018 2017 (Dollars in thousands, except per share amounts) Reconciliation of Core (non-GAAP) to GAAP Non-Interest Income (gross of
Slide 23: Non-GAAP Reconciliation: Non-Interest Income and Expense, Annual
Supplemental Information – Non-GAAP Financial Measures (unaudited) At or For the Year Ended December 31, 2018 2017 2016 Reconciliation of Core (non-GAAP) to GAAP Non-Interest Income and Expense (gross of tax): GAAP non-interest income $ 49,241 $ 43,582 $ 51,931 (Gain) loss on sale of branch location
Slide 24: Calculation of Tangible Book Value and Tangible Equity
Supplemental Information – Non-GAAP Financial Measures (unaudited) Calculation of Tangible Book Value and Tangible Equity to Tangible Assets: At or For the Quarter Ended December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 Calculation of Tangible Book Value per share: (Dollars in thousa
Slide 25: Calculation of Return on Average Assets and Equity
Supplemental Information – Non-GAAP Financial Measures (unaudited) Calculation of Return on Average Assets and Return on Average Equity Ratios (GAAP and core) At or For the Quarter Ended December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 (Dollars in thousands) Net in
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