Yesterday I made my way over to Plano, Texas to attend the annual meeting for one of my companies, Legacy Texas Financial Group. Inspired by A Path To Forever Financial Freedom‘s analyses of his AGMs, I will attempt to present my impressions – especially since I still accumulating on price weakness until I attain my 3% threshold.
Prior to the meeting, one of the Directors made the rounds shaking hands with everyone present. It should be noted, refreshments were served as well. Once the meeting was called to order, the voting took place. Then the President, Kevin Hanigan, presented the Report of Management. The two items that left an impression were:
- They have the #2 position in Collin County (Dallas suburb), behind JPM and ahead of WFC
- Their Cost of Funds is .29%!
Next was the shareholder Q&A session with five questions:
- A shareowner asked about efforts engaging millennials and their wealth. The president acknowledged more could be done in this regard, but currently LTXB is a “fast follower” rather than a leader in this area.
- A shareowner asked about M&A possibilities with the response being they expect to grow organically for the next couple of years until they attain the $10B asset level. Meanwhile, they aren’t opposed to entertaining takeover offers either.
- A shareowner asked about remaining competitive with other banks in regards to interest rates. LTXB recognizes that we are in a rising interest rate environment. They will react as necessary but will squeeze as much profit from the spread as they can without alienating the customers.
- A shareowner asked about future dividends with the response being that the board is committed to a payout ratio of 30-40%. (I suspect an increase to be forthcoming in the next quarter or two)
- A shareowner asked about exposure to the energy sector. The response being 8.5% (I believe this excludes indirect). They also mentioned there is one loan in BK (fully provisioned) and they expect the peak of loss provisioning – industry-wide – to be next quarter.