DALLAS — ViewPoint Bank, the former Community Credit Union, continues to demonstrate that former credit unions do not just survive as banks, they can thrive as well.
According to financial reports the bank's mutual holding company, ViewPoint Financial Group, has filed with the Securities and Exchange Commission, the bank has posted the sorts of numbers that many other banks would envy.
The company reported that Viewpoint increased its assets 12.1% since the end of 2007, from $1.66 billion to just over $2.01 billion as of end of June this year. During the same period, the bank saw total deposits rise 8.4% to $1.41 billion and an increase in net income of 23.3%, to $3 million dollars, over the same period last year.
Former credit union CEO and now bank CEO Gary Base attributed the strong performance to the bank's essentially conservative loan underwriting, which kept the bank from offering any subprime loan originations and full documentation products.
Viewpoint's asset quality remains solid, Base explained. Net charge-offs for the six months ended June 30, 2008, totaled $1.5 million, down $399,000 from net charge-offs of $1.9 million for the six months ended June 30, 2007.
"Midway through 2008, we are very pleased with our financial results," Base said in a release accompanying the filing. "We have continued to grow our residential and commercial real estate loan portfolios while maintaining our asset quality, and net income and earnings per share have increased compared to last year. We look forward to continuing these positive trends through the rest of the year."
Neither Base nor any of the banks senior executives would comment further on the bank's performance.
The care and caution that ViewPoint has exhibited in its lending has paid dividends as the bank saw loan quality improve at a time when loan quality at similar institutions has been sliding.
According to the bank's filing, the ratio of the bank's nonperforming loans to total loans ratio was 0.33% at the end of the second quarter, down five basis points from 0.38% at end of 2007.
The bank attributed the loan health to its careful lending, noting that it has stringent underwriting standards and careful evaluation.
"The vast majority of our residential real estate loans are full-documentation, standard A-type products," the bank said. "In 2008, the loans originated by our mortgage banking division, Bankers Financial Mortgage Group (operated through a wholly owned subsidiary, Community Financial Services Inc.) and retained in our portfolio had an average loan-to-value ratio of 73.88% and an average credit score of 748."
The bank also noted that part of its income for the period included $96,000 from Visa Inc.'s initial stock offering.
The numbers also reflected the continuing shift in focus at the bank, moving from loan products that are traditionally seen as credit union strengths to other products more associated with retail banking. While mortgages for one- to four-family housing were up, along with home equity and commercial and business loans, all banking products, more credit union associated products, like automobile loans and other commercial loans, were down.
ViewPoint also benefited somewhat from having a local economy that has gone through the same degree of downturn that other local economies have. Real estate and home prices in the Dallas-Fort Worth area, while softening, have not generally fallen as far other regions of the country. And the area has seen fewer layoffs that have hiked the unemployment rate in other areas.
But there are also signs that the region's good economy might start faltering a bit more, and that could challenge the bank's success.
The Federal Reserve Bank of Dallas in reporting on a recent survey pointed to possible dark clouds ahead.
Comparing by industry, most sectors experienced slower job growth in the second quarter 2008, compared to the first quarter this year, the Dallas Fed reported. High fuel costs negatively affected the trade, transportation and utilities sectors–which had been chugging along through the first three months of 2008. Since March of this year, the transportation industry has lost jobs, especially in the airline industry, which is struggling to stem losses from skyrocketing fuel expenses.
ViewPoint Bank started out in 1952 as Collins Radio Credit Union and became Community Credit Union. In 2005, the credit union changed to a mutual bank charter through a controversial procedure that caused a legal battle with NCUA, which the agency lost, over how it conducted the charter-change balloting.
According to its Web site (viewpointbank.com), the bank has 180,000 customers and 28 branches throughout the Dallas-Fort Worth and Plano area. The bank also has mortgage offices in Dallas and Plano and a commercial lending office located in Houston.
–dmorrison@cutimes.com
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