ViewPoint Financial Group (VPFG) went through a second-step conversion and increased commercial loans during the height of the financial crisis, gaining market share from larger banks in the Dallas – Fort Worth area in Texas, says Jonathan S. Vyorst, Senior Vice President at Paradigm Capital Management, Inc.
“ViewPoint management had also done some interesting things during the financial crisis. It started a commercial loan business, and when a lot of the bigger banks stopped lending money at the height of the crisis, ViewPoint captured market share by hiring commercial mortgage lenders,” Vyorst said.
Vyorst says VPFG‘s is now more fully valued after its second-step conversion, before which the company was trading for a discount to book value, below what most banks tend to trade. Vyorst says financials don’t normally generate much cash flow due to the nature of their business, but he says he invests in companies with high equity-to-asset ratios and other strong financial metrics.
“ViewPoint is located in Plano, Texas. The Texas economy is doing much better than the rest of the country, and Plano is a nice suburb in the Dallas-Fort Worth area that is doing particularly well economically,” Vyorst said. “[VPFG] also had a warehouse funding business for residential mortgages, which did very well during that time period.”
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