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Veritex Holdings, Inc. Reports Fourth Quarter and Year-End 2015 Results

DALLAS, Jan. 26, 2016 (GLOBE NEWSWIRE) -- Veritex Holdings, Inc. (NASDAQ:VBTX), the holding company for Veritex Community Bank, announced the results today for the quarter and year ended December 31, 2015. The Company reported net income for the year ended December 31, 2015 of $8.8 million and $0.84 diluted earnings per common share, compared to net income of $5.2 million and $0.72 diluted earnings per common share for the year ended December 31, 2014, an increase of $3.6 million or 68.9% over the prior year. The Company also reported net income of $2.6 million and $0.23 diluted earnings per common share for the quarter ended December 31, 2015 compared to net income of $2.5 million and $0.23 diluted earnings per common share for the quarter ended September 30, 2015, an increase of $36,000 or 1.4%, over the prior quarter.

Malcolm Holland, the Company’s Chairman and Chief Executive Officer said, “I am excited to announce the results of another fantastic year. Earnings have increased each quarter since our IPO in October of 2014. I am pleased to see this trend continue throughout 2015.  Looking back on the year, I am proud of our many accomplishments. In addition to our record earnings trend, we saw a record level of loan originations, portfolio growth and improved returns on assets and equity.”

Mr. Holland also said, “Our fourth quarter was really the capstone of the year.  Loan growth in this quarter exceeded our expectations and drove a substantial increase in pre-tax, pre-provision income by $668,000 over the prior quarter. This quarter’s positive momentum will give us a great start into 2016.”

Full Year 2015 Highlights

  • Full year 2015 diluted earnings per common share increased to $0.84 or 16.7% compared to $0.72 for the full year 2014
  • Net income was $8.8 million for 2015, an increase of $3.6 million or 68.9% compared to $5.2 million for the full year 2014
  • Pre-tax, pre-provision income was $13.8 million for 2015, an increase of $4.4 million or 47.6% compared to $9.3 million for the full year 2014
  • Average loan balances increased $151.4 million or 27.7% compared to the full year 2014
  • Average noninterest deposits increased $36.7 million or 15.9% compared to the full year 2014
  • Credit quality remained excellent with nonperforming assets to total assets at 0.1% and net charge-offs for the full year 2015 at $77,000
  • The acquisition of IBT Bancorp, Inc. (“IBT”) closed successfully on July 1, 2015 and was fully integrated into systems and operations on August 22, 2015
  • No loans secured by oil and gas assets at December 31, 2015

2015 Fourth Quarter Highlights

  • Pre-tax, pre-provision income was $4.5 million, an increase of $668,000 or 17.5% compared to $3.8 million for the prior quarter
  • Net interest income grew $396,000 or 4.6% compared to the prior quarter
  • Noninterest income increased $164,000 or 15.7% compared to the prior quarter
  • Noninterest expense declined $108,000 or 1.8% compared to the prior quarter
  • Total loans increased $67.5 million or 8.9% to $823.4 million compared to the prior quarter
  • Total deposits increased $25.8 million or 3.1% to $868.4 million compared to the prior quarter
  • Hired an experienced commercial banking executive to lead larger, upper-end middle market efforts
  • In November 2015, Veritex Bank was named in the list of  Dallas Morning News’ Top 100 Places to Work 2015
  • Redeemed all 8,000 shares of the Company’s SBLF preferred stock at its liquidation value of $8 million plus accrued dividends of $18,000

Result of Operations for the Three Months Ended December 31, 2015

Net Interest Income

For the three months ended December 31, 2015, net interest income before provision for loan losses was $9.0 million and net interest margin was 3.78% compared to $8.6 million and 3.84%, respectively, for the three months ended September 30, 2015. Net interest income increased $396,000 primarily due to increased interest and fees on loans as average loan balances increased $35.3 million resulting from organic loan growth for the three months ended December 31, 2015 compared to the three months ended September 30, 2015. The net interest margin decreased 0.06% from the three months ended September 30, 2015. The average rate paid on interest-bearing liabilities increased 0.02% from 0.67% for the three months ended September 30, 2015. The increase in the rate is primarily due to an increase in premium rate money market accounts with an average rate of 0.70%. Average yield on loans decreased 0.01% from 4.84% for the three months ended September 30, 2015 to 4.83% for the quarter ended December 31, 2015. Competitive pricing pressure resulted in overall market yields for loan originations and renewals to be below the average yield of amortizing or paid-off loans.

Compared to the three months ended December 31, 2014, net interest income before provision for loan losses increased by $2.2 million from $6.8 million to $9.0 million for the three months ended December 31, 2015. The increase in net interest income before provision for loan losses was primarily due to increased interest and fees as average loan balances increased $90.5 million from the acquisition of IBT, which closed in July 2015, and organic loan growth of $101.5 million compared to average loans for the three months ended December 31, 2014. Net interest margin improved 0.04% over 3.74% for the same three months in 2014. The rate paid on interest-bearing liabilities decreased from 0.73% for the three months ended December 31, 2014 to 0.69% for the three months ended December 31, 2015. The decrease was related to a change in the mix of deposits from premium money market accounts with an average rate of 0.65% and certificates of deposits with an average rate paid of 1.14% to money market accounts with average rate paid of 0.25%. Average yield on loans declined 0.02% from 4.85% for the three months ended December 31, 2014 to 4.83% for the quarter ended December 31, 2015. Competitive pricing pressure resulted in overall market yields for loan originations and renewals to be below the average yield of amortizing or paid-off loans.

Noninterest Income

Noninterest income for the three months ended December 31, 2015 was $1.2 million, an increase of $164,000 or 15.7% compared to the three months ended September 30, 2015. The increase was primarily a result of bi-annual dividends received on Federal Reserve Bank stock of $85,000, increased gains on sale of SBA loans of $49,000, and seasonal growth in service charges and fees on deposit accounts of $39,000.

Compared to the three months ended December 31, 2014, noninterest income grew $551,000 or 84.0%, primarily as a result of gains on sale of SBA loans and servicing fees totaling $345,000, increased deposit service charges and fees on deposit accounts of $127,000, and increased insurance income from the bank owned life insurance (BOLI) acquired in connection with the acquisition of IBT.

Noninterest Expense

Noninterest expense was $5.7 million for the three months ended December 31, 2015, compared to noninterest expense of $5.8 million for the three months ended September 30, 2015, a decrease of $108,000 or 1.8%. The decrease was primarily driven by a reduction in investment banker professional fees incurred in the three months ended September 30, 2015 related to the successful acquisition of IBT in July 2015.

Compared to the three months ended December 31, 2014, noninterest expense increased $1.1 million. This increase was in large part due to increases in salary and employee benefit expenses of $575,000 and occupancy and equipment expenses of $131,000 primarily related to the acquisition of IBT.  The IBT acquisition was also the primary driver of increases in data processing and software expense of $32,000, FDIC assessment fees of $26,000, telephone and communication expense of $23,000 and other non-interest expense of $150,000.

Income Taxes

Income tax expense for the three months ended December 31, 2015 totaled $1.3 million, an increase of $22,000 or 1.7% compared to the three months ended September 2015. The Company’s effective tax rate was approximately 33.6% for the three months ended December 31, 2015 and the three months ended September 30, 2015.

Compared to the three months ended December 31, 2014, income tax expense increased $510,000 or 64.3% for the three months ended December 31, 2015. The Company’s effective tax rate was approximately 33.6% for the three months ended December 31, 2015 compared to 31.9% for the three months ended December 31, 2014. The increase in effective tax rate was primarily the result of a net discrete tax benefit associated with recognition of deferred tax assets related to non-qualified stock options during the three months ended December 31, 2014.

Financial Condition

Loans (excluding loans held for sale and deferred loan fees) at December 31, 2015 were $820.6 million, an increase of $66.4 million or 8.8% compared to $754.2 million at September 30, 2015. The increase from September 30, 2015 was primarily the result of the continued execution and success of our organic growth strategy.

Loans (excluding loans held for sale and deferred loan fees) increased $217.3 million or 36.0% compared to $603.3 million at December 31, 2014. The acquisition of IBT represents approximately 41.5% of the increase from the prior year with the remainder of $127.1 million achieved through organic growth.

Deposits at December 31, 2015 were $868.4 million, an increase of $25.8 million or 3.1% compared to $842.6 million at September 30, 2015 due to growth in retail money market accounts and wholesale deposits.

Deposits increased $229.7 million or 36.0% compared to $638.7 million at September 30, 2014. The increase from December 31, 2014 was due to the acquisition of IBT’s deposits of approximately $98.3 million, customer deposit growth of approximately $55.6 million, and wholesale deposit growth of approximately $75.8 million.

Advances from the Federal Home Loan Bank were $28.4 million at December 31, 2015 compared to $18.5 million at September 30, 2015 and $40.0 million at December 31, 2014.

Asset Quality

Nonperforming assets totaled $1.1 million or 0.1% of total assets at December 31, 2015 compared to $921,000 or 0.09% at September 30, 2015.  Nonperforming assets were $541,000 or 0.07% of total assets at December 31, 2014.

The allowance for loan losses was 0.83% of total loans at December 31, 2015 compared to 0.82% of total loans at September 30, 2015 and 0.99% of total loans at December 31, 2014. The increase in allowance for loan losses as a percentage of total loans compared to September 30, 2015 was minimal as credit quality remained strong.  The decrease in allowance for loan losses as a percentage of total loans compared to December 31, 2014 was primarily due to the recording of IBT acquired loans at an estimated fair value.

Other real estate owned totaled $493,000 at December 31, 2015 and September 30, 2015 compared to $105,000 at December 31, 2014. Nonaccrual loans were $593,000 at December 31, 2015 compared to $428,000 at September 30, 2015 and $436,000 at December 31, 2014.

The provision for loan losses for the three months ended December 31, 2015 totaled $610,000 compared to no provision for loan losses for three months ended September 30, 2015 and $326,000 for the three months ended December 31, 2014.  The increases were related to general provision requirements related to loan growth as credit quality remained strong.

Non-GAAP Financial Measures

The Company’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, the Company reviews and reports tangible book value per common share, the tangible common equity to tangible assets ratio and pre-tax, pre-provision income. The Company has included in this release information related to these non-GAAP financial measures for the applicable periods presented. Please refer to “Consolidated Financial Highlights” at the end of this release for a reconciliation of these non-GAAP financial measures.

About Veritex Holdings, Inc.

Headquartered in Dallas, Texas, Veritex Holdings, Inc. is a bank holding company that conducts banking activities through its wholly-owned subsidiary, Veritex Community Bank, with ten locations throughout the Dallas metropolitan area. Veritex Community Bank is a Texas state chartered bank regulated by the Texas Department of Banking and the Board of Governors of the Federal Reserve System.

Acquisition of IBT Bancorp, Inc.

On July 1, 2015, the Company completed the acquisition of IBT, the parent holding company of Independent Bank, headquartered in Irving, Texas with two banking locations in the Dallas metropolitan area. Under the terms of the definitive agreement, the Company issued 1,185,067 shares of its common stock (with cash in lieu of fractional shares) and paid approximately $4.0 million in cash for the outstanding shares of IBT common stock in connection with the closing of the acquisition, which resulted in goodwill of $6.9 million as of July 1, 2015. Additionally, we recognized $1.1 million of core deposit intangibles as of July 1, 2015.  The fair values of loans purchased and goodwill are preliminary estimates as of December 31, 2015 as fair value adjustments are still being finalized as of the date of this press release.

For more information, visit www.veritexbank.com

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release may contain certain forward-looking statements within the meaning of the securities laws that are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about the Company and its subsidiaries. Forward-looking statements include information regarding the Company’s future financial performance, business and growth strategy, projected plans and objectives, expectations concerning the costs associated with the acquisition of IBT and related transactions, integration of the acquired business, ability to recognize  anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to whether the Company can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions; continue to sustain internal growth rate; provide competitive products and services that appeal to its customers and target market; continue to have access to debt and equity capital markets; and achieve its performance goals.  Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); economic conditions, including currency rate fluctuations and interest rate fluctuations; and weather. These and various other factors are discussed in the Company’s Final Prospectus, dated October 10, 2014, filed pursuant to Rule 424(b)(4), the Company’s Annual Report on Form 10-K filed on March 27, 2015, and other reports and statements the Company has filed with the Securities and Exchange Commission. Copies of such filings are available for download free of charge from www.veritexbank.com under the Investor Relations tab.


VERITEX HOLDINGS, INC. AND SUBSIDIARY
Consolidated Financial Highlights - (Unaudited)
(In thousands, except share and per share data)
 
    At and For the Three Months Ended  
    December 31,   September 30,   June 30,   March 31,   December 31,  
    2015   2015   2015   2015   2014  
Selected Financial Data:                      
Net income   $ 2,573   $ 2,537   $ 1,856   $ 1,824   $ 1,690  
Net income available to common stockholders   2,535   2,517   1,836   1,804   1,670  
Total assets   1,039,600   1,009,539   827,140   808,906   802,286  
Total loans(1)   820,605   754,199   644,938   615,495   603,310  
Provision for loan losses   610     148   110   326  
Allowance for loan losses   6,772   6,214   6,193   6,006   5,981  
Noninterest‑bearing deposits   301,367   299,864   240,919   241,732   251,124  
Total deposits   868,410   842,607   673,106   668,255   638,743  
Total stockholders’ equity   132,046   137,508   117,085   115,133   113,312  
Summary Performance Ratios:                      
Return on average assets(2)   0.99 % 1.04 % 0.93 % 0.94 % 0.86 %
Return on average equity(2)   7.37   7.38   6.39   6.45   6.21  
Net interest margin(3)   3.78   3.84   3.77   3.82   3.74  
Efficiency ratio(4)   56.11   60.48   61.75   66.67   62.49  
Noninterest expense to average assets(2)   2.22   2.39   2.36   2.61   2.38  
Summary Credit Quality Data:                      
Nonaccrual loans   $ 593   $ 428   $ 312   $ 323   $ 436  
Accruing loans 90 or more days past due   84          
Other real estate owned   493   493   548   548   105  
Nonperforming assets to total assets   0.10 % 0.09 % 0.10 % 0.12 % 0.07 %
Nonperforming loans to total loans   0.07   0.06   0.05   0.05   0.07  
Allowance for loan losses to total loans   0.83   0.82   0.96   0.98   0.99  
Net (recoveries) charge‑offs to average loans outstanding   0.01   (0.00 ) (0.01 ) 0.01   0.04  
Capital Ratios:(6)                      
Total stockholders’ equity to total assets   12.70 % 13.62 % 14.16 % 14.23 % 14.11 %
Tangible common equity to tangible assets(5)   10.18   10.30   11.01   11.01   10.86  
Tier 1 capital to average assets   10.83   12.02   12.82   12.78   12.66  
Tier 1 capital to risk‑weighted assets   12.93   14.73   14.87   15.43   15.45  
Common equity tier 1 (to risk weighted assets)   12.56   13.29   13.23   13.70   n/a  
Total capital to risk‑weighted assets   14.34   16.18   16.52   17.16   17.21  
                       
(1)  Total loans does not include loans held for sale and deferred fees. Loans held for sale were $2.8 million at December 31, 2015, $1.8 million at September 30, 2015, $2.1 million at June 30, 2015, $2.5 million at March 31, 2015 and $8.9 million at December 31, 2014. Deferred fees were $61,000 at December 31, 2015, $55,000 at September 30, 2015, $49,000 at June 30, 2015, $50,000 at March 31, 2015 and $51,000 at December 31, 2014.  
(2)  We calculate our average assets and average equity for a period by dividing the sum of our total assets or total stockholders’ equity, as the case may be, at the close of business on each day in the relevant period, by the number of days in the period. We have calculated our return on average assets and return on average equity for a period by dividing net income for that period by our average assets and average equity, as the case may be, for that period.  
(3)  Net interest margin represents net interest income, annualized on a fully tax equivalent basis, divided by average interest-earning assets.  
(4)  Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.  
(5)  We calculate tangible common equity as total stockholders’ equity less preferred stock, goodwill, core deposit intangibles and other intangible assets, net of accumulated amortization, and we calculate tangible assets as total assets less goodwill and core deposit intangibles and other intangible assets, net of accumulated amortization. Tangible common equity to tangible assets is a non-GAAP financial measure, and, as we calculate tangible common equity to tangible assets, the most directly comparable GAAP financial measure is total stockholders’ equity to total assets. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures in the table captioned “Reconciliation GAAP —NON-GAAP (Unaudited)”.  
(6)  Decrease in capital ratios primarily driven by redemption of $8 million in SBLF preferred stock.  
   


VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets - (Unaudited)
(In thousands, except share and per share data)
 
    December 31,   September 30,   June 30,   March 31,   December 31,  
    2015   2015   2015   2015   2014  
ASSETS                      
Cash and due from banks   $  10,989   $  10,478   $  11,699   $  9,338   $  9,223  
Interest bearing deposits in other banks   60,562   113,031   51,570   76,206   84,028  
Total cash and cash equivalents   71,551   123,509   63,269   85,544   93,251  
Investment securities   75,813   61,023   59,299   53,391   45,127  
Loans held for sale   2,831   1,766   2,127   2,508   8,858  
Loans, net   813,771   747,930   638,696   609,439   597,278  
Accrued interest receivable   2,216   2,088   1,557   1,539   1,542  
Bank‑owned life insurance   19,459   19,299   18,115   17,969   17,822  
Bank premises, furniture and equipment, net   17,449   17,585   12,107   11,526   11,150  
Non‑marketable equity securities   4,167   4,045   3,970   3,136   4,139  
Investment in unconsolidated subsidiary   93   93   93   93   93  
Other real estate owned   493   493   548   548   105  
Intangible assets   2,410   2,458   1,110   1,186   1,261  
Goodwill   26,827   26,025   19,148   19,148   19,148  
Other assets   3,131   3,225   7,101   2,879   2,512  
Total assets   $ 1,039,600   $ 1,009,539   $ 827,140   $ 808,906   $ 802,286  
LIABILITIES AND STOCKHOLDERS’ EQUITY                      
Deposits:                      
Noninterest‑bearing   $ 301,367   $ 299,864   $ 240,919   $ 241,732   $ 251,124  
Interest‑bearing   567,043   542,743   432,187   426,523   387,619  
Total deposits   868,410   842,607   673,106   668,255   638,743  
Accounts payable and accrued expenses   1,776   1,782   1,202   1,049   1,582  
Accrued interest payable and other liabilities   848   1,089   672   1,395   575  
Advances from Federal Home Loan Bank   28,444   18,478   27,000   15,000   40,000  
Junior subordinated debentures   3,093   3,093   3,093   3,093   3,093  
Subordinated notes   4,983   4,982   4,982   4,981   4,981  
Total liabilities   907,554   872,031   710,055   693,773   688,974  
Commitments and contingencies                      
Stockholders’ equity:                      
Preferred stock     8,000   8,000   8,000   8,000  
Common stock   107   107   95   95   95  
Additional paid‑in capital   115,721   115,579   97,761   97,480   97,469  
Retained earnings   16,739   14,204   11,687   9,851   8,047  
Unallocated Employee Stock Ownership Plan shares   (309 ) (406 ) (406 ) (401 ) (401 )
Accumulated other comprehensive income   (142 ) 94   18   178   172  
Treasury stock, 10,000 shares at cost   (70 ) (70 ) (70 ) (70 ) (70 )
Total stockholders’ equity   132,046   137,508   117,085   115,133   113,312  
Total liabilities and stockholders’ equity   $ 1,039,600   $ 1,009,539   $ 827,140   $ 808,906   $ 802,286  
                                 


VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income - (Unaudited)
(In thousands, except share and per share data)
 
    For the Year Ended  
    December 31,   December 31,  
    2015   2014  
Interest income:          
Interest and fees on loans   $ 33,680   $ 27,236  
Interest on investment securities   997   839  
Interest on deposits in other banks   241   182  
Interest on other   2   2  
Total interest income   34,920   28,259  
Interest expense:          
Interest on deposit accounts   2,918   2,421  
Interest on borrowings   543   498  
Total interest expense   3,461   2,919  
Net interest income   31,459   25,340  
Provision for loan losses   868   1,423  
Net interest income after provision for loan losses   30,591   23,917  
Noninterest income:          
Service charges and fees on deposit accounts   1,326   1,099  
Gain on sales of investment securities   7   34  
Gain on sales of loans   1,254   641  
Gain on sales of other assets owned   19   10  
Bank‑owned life insurance   747   427  
Other   351   285  
Total noninterest income   3,704   2,496  
Noninterest expense:          
Salaries and employee benefits   11,265   10,037  
Occupancy and equipment   3,477   3,246  
Professional fees   2,023   1,382  
Data processing and software expense   1,216   1,041  
FDIC assessment fees   448   421  
Marketing   799   588  
Other assets owned expenses and write-downs   53   211  
Amortization of intangibles   338   295  
Telephone and communications   263   226  
Other   1,506   1,056  
Total noninterest expense   21,388   18,503  
Net income from operations   12,907   7,910  
Income tax expense   4,117   2,705  
Net income   $ 8,790   $ 5,205  
Preferred stock dividends   $ 98   $ 80  
Net income available to common stockholders   $ 8,692   $ 5,125  
Basic earnings per share   $ 0.86   $ 0.73  
Diluted earnings per share   $ 0.84   $ 0.72  
Weighted average basic shares outstanding   10,061,015   6,991,585  
Weighted average diluted shares outstanding   10,332,158   7,152,328  
           


VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income - (Unaudited)
(In thousands, except share and per share data)
 
    For the Three Months Ended  
    December 31,   September 30,   June 30,   March 31,   December 31,  
    2015   2015   2015   2015   2014  
Interest income:                      
Interest and fees on loans   $ 9,648   $ 9,230   $ 7,454   $ 7,348   $ 7,335  
Interest on investment securities   285   247   252   212   209  
Interest on deposits in other banks   73   60   55   54   63  
Interest on other   1   1        
Total interest income   10,007   9,538   7,761   7,614   7,607  
Interest expense:                      
Interest on deposit accounts   843   778   666   631   652  
Interest on borrowings   151   143   123   126   123  
Total interest expense   994   921   789   757   775  
Net interest income   9,013   8,617   6,972   6,857   6,832  
Provision for loan losses   610     148   110   326  
Net interest income after provision for loan losses   8,403   8,617   6,824   6,747   6,506  
Noninterest income:                      
Service charges and fees on deposit accounts   419   380   282   245   292  
Gain on sales of investment securities         7    
Gain on sales of loans   430   392   129   302   155  
Gain (loss) on sales of other assets owned     21     (2 ) 6  
Bank‑owned life insurance   195   194   179   178   111  
Other   163   56   98   36   92  
Total noninterest income   1,207   1,043   688   766   656  
Noninterest expense:                      
Salaries and employee benefits   3,019   3,001   2,588   2,657   2,444  
Occupancy and equipment   917   894   808   857   786  
Professional fees   487   632   365   540   439  
Data processing and software expense   313   368   272   263   281  
FDIC assessment fees   131   121   96   100   105  
Marketing   205   227   162   205   156  
Other assets owned expenses and write-downs   24   (5 ) 22   13   24  
Amortization of intangibles   95   96   74   74   74  
Telephone and communications   81   68   57   57   58  
Other   462   440   286   316   312  
Total noninterest expense   5,734   5,842   4,730   5,082   4,679  
Net income from operations   3,876   3,818   2,782   2,431   2,483  
Income tax expense   1,303   1,281   926   607   793  
Net income   $ 2,573   $ 2,537   $ 1,856   $ 1,824   $ 1,690  
Preferred stock dividends   $ 38   $ 20   $ 20   $ 20   $ 20  
Net income available to common stockholders   $ 2,535   $ 2,517   $ 1,836   $ 1,804   $ 1,670  
Basic earnings per share   $ 0.24   $ 0.24   $ 0.19   $ 0.19   $ 0.18  
Diluted earnings per share   $ 0.23   $ 0.23   $ 0.19   $ 0.19   $ 0.18  
Weighted average basic shares outstanding   10,675,948   10,652,602   9,447,807   9,447,706   9,157,582  
Weighted average diluted shares outstanding   10,954,920   10,940,427   9,708,673   9,743,576   9,405,168  
                       


VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation GAAP — NON GAAP - (Unaudited)
(In thousands, except share and per share data)
 
The following table reconciles, at the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets:
 
    December 31,   September 30,   June 30,   March 31,   December 31,  
    2015   2015   2015   2015   2014  
Tangible Common Equity                      
Total stockholders’ equity   $ 132,046   $ 137,508   $ 117,085   $ 115,133   $ 113,312  
Adjustments:                      
Preferred stock     (8,000 ) (8,000 ) (8,000 ) (8,000 )
Goodwill(3)   (26,827 ) (26,025 ) (19,148 ) (19,148 ) (19,148 )
Intangible assets   (2,410 ) (2,458 ) (1,110 ) (1,186 ) (1,261 )
Total tangible common equity   $ 102,809   $ 101,025   $ 88,827   $ 86,799   $ 84,903  
Tangible Assets                      
Total assets   $ 1,039,600   $ 1,009,539   $ 827,140   $ 808,906   $ 802,286  
Adjustments:                      
Goodwill(3)   (26,827 ) (26,025 ) (19,148 ) (19,148 ) (19,148 )
Intangible assets   (2,410 ) (2,458 ) (1,110 ) (1,186 ) (1,261 )
Total tangible assets   $ 1,010,363   $ 981,056   $ 806,882   $ 788,572   $ 781,877  
Tangible Common Equity to Tangible Assets   10.18 % 10.30 % 11.01 % 11.01 % 10.86 %
Common shares outstanding   10,712   10,700   9,494   9,485   9,471  
                       
Book value per common share(1)   $ 12.33   $ 12.10   $ 11.49   $ 11.29   $ 11.12  
Tangible book value per common share(2)   $ 9.60   $ 9.44   $ 9.36   $ 9.15   $ 8.96  
                                 
(1) We calculate book value per common share as stockholders’ equity less preferred stock at the end of the relevant period divided by the outstanding number of shares of our common stock at the end of the relevant period.  
(2) We calculate tangible book value per common share as total stockholders’ equity less preferred stock, goodwill, and intangible assets, net of accumulated amortization at the end of the relevant period, divided by the outstanding number of shares of our common stock at the end of the relevant period. Tangible book value per common share is a non-GAAP financial measure, and, as we calculate tangible book value per common share, the most directly comparable GAAP financial measure is total stockholders’ equity per common share.  
(3) Goodwill reflects provisional estimates of fair value of assets and liabilities acquired in the IBT acquisition as of the date of this earnings release.
 
   


VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation GAAP — NON GAAP - (Unaudited)
(In thousands)
 
The following table reconciles net income from operations to pre-tax, pre-provision income:
 
    For the Three Months Ended  
    December 31,   September 30,   June 30,   March 31,   December 31,  
    2015   2015   2015   2015   2014  
Pre-Tax, Pre-Provision Income                      
Provision for loan losses   610     148   110   326  
Net Income from Operations   3,876   3,818   2,782   2,431   2,483  
Total pre-tax, pre-provision income(1)   $ 4,486   $ 3,818   $ 2,930   $ 2,541   $ 2,809  
                                 
(1) We calculate pre-tax, pre-provision income by adding the total provision for loan losses to net income from operations for the relevant period.  


The following table reconciles net income from operations to pre-tax, pre-provision income:
       
    For the Year Ended  
    December 31,   December 31,  
    2015   2014  
Pre-Tax, Pre-Provision Income          
Provision for loan losses   868   1,423  
Net Income from Operations   12,907   7,910  
Total pre-tax, pre-provision income(1)   $ 13,775   $ 9,333  
               
(1) We calculate pre-tax, pre-provision income by adding the total provision for loan losses to net income from operations for the relevant period.  
   


VERITEX HOLDINGS, INC. AND SUBSIDIARY
Net Interest Margin - (Unaudited)
(In thousands)
 
    For the Three Months Ended  
    December 31,  2015   September 30,  2015   December 31, 2014  
        Interest           Interest           Interest      
    Average   Earned/   Average   Average   Earned/   Average   Average   Earned/   Average  
    Outstanding   Interest   Yield/   Outstanding   Interest   Yield/   Outstanding   Interest   Yield/  
    Balance   Paid   Rate   Balance   Paid   Rate   Balance   Paid   Rate  
Assets                                      
Interest-earning assets:                                      
Total loans(1)   $ 791,799   $ 9,648   4.83 % $ 756,542   $ 9,230   4.84 % $ 599,813   $ 7,335   4.85 %
Securities available for sale   67,062   285   1.69   63,204   248   1.56   46,750   209   1.77  
Investment in subsidiary   93   1   4.27   93       93      
Interest-earning deposits in financial institutions   86,079   73   0.34   70,363   60   0.34   78,611   63   0.32  
Total interest-earning assets   945,033   10,007   4.20   890,202   9,538   4.25   725,267   7,607   4.16  
Allowance for loan losses   (6,436 )         (7,146 )         (5,906 )        
Noninterest-earning assets   88,382           88,023           60,649          
Total assets   $ 1,026,979           $ 971,079           $ 780,010          
Liabilities and Stockholders’ Equity                                      
Interest-bearing liabilities:                                      
Interest-bearing deposits   $ 540,311   $ 843   0.62 % $ 520,806   $ 778   0.59 % $ 396,438   $ 652   0.65 %
Advances from FHLB   20,748   55   1.05   19,404   56   1.14   18,533   30   0.64  
Other borrowings   11,272   96   3.38   9,077   87   3.80   8,073   93   4.57  
Total interest-bearing liabilities   572,331   994   0.69   549,287   921   0.67   423,044   775   0.73  
Noninterest-bearing liabilities:                                      
Noninterest-bearing deposits   312,783           282,934           246,868          
Other liabilities   3,419           2,403           2,171          
Total noninterest-bearing liabilities   316,202           285,337           249,039          
Stockholders’ equity   138,446           136,455           107,927          
Total liabilities and stockholders’ equity   $ 1,026,979           $ 971,079           $ 780,010          
Net interest rate spread(2)           3.51 %         3.59 %         3.43 %
Net interest income       $ 9,013           $ 8,617           $ 6,832      
Net interest margin(3)           3.78 %         3.84 %         3.74 %
                                       
(1) Includes average outstanding balances of loans held for sale of $2,482, $4,215 and $5,173 for the three months ended December 31, 2015, September 30, 2015, and December 31, 2014, respectively.  
(2) Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.  
(3) Net interest margin is equal to net interest income divided by average interest-earning assets.  
   


VERITEX HOLDINGS, INC. AND SUBSIDIARY
Net Interest Margin - (Unaudited)
(In thousands)
 
    For the Year Ended December 31,  
    2015   2014  
        Interest           Interest      
    Average   Earned/   Average   Average   Earned/   Average  
    Outstanding   Interest   Yield/   Outstanding   Interest   Yield/  
    Balance   Paid   Rate   Balance   Paid   Rate  
Assets                          
Interest-earning assets:                          
Total loans(1)   $ 697,439   $ 33,680   4.83 % $ 546,041   $ 27,236   4.99 %
Securities available for sale   59,088   997   1.69   49,058   839   1.71  
Investment in subsidiary   93   1   1.08   93   2   2.15  
Interest-bearing deposits in other banks   70,630   242   0.34   63,176   182   0.29  
Total interest-earning assets   827,250   34,920   4.22   658,368   28,259   4.29  
Allowance for loan losses   (6,419 )         (5,498 )        
Noninterest-earning assets   78,006           60,168          
Total assets   $ 898,837           $ 713,038          
Liabilities and Stockholders’ Equity                          
Interest-bearing liabilities:                          
Interest-bearing deposits   $ 475,034   $ 2,918   0.61 % $ 374,074   $ 2,421   0.65 %
Advances from FHLB   18,055   25   0.14   15,890   118   0.74  
Other borrowings   9,212   518   5.62   8,073   380   4.71  
Total interest-bearing liabilities   502,301   3,461   0.69   398,037   2,919   0.73  
Noninterest-bearing liabilities:                          
Noninterest-bearing deposits   267,550           230,875          
Other liabilities   2,408           1,783          
Total noninterest-bearing liabilities   269,958           232,658          
Stockholders’ equity   126,578           82,343          
Total liabilities and stockholders’ equity   $ 898,837           $ 713,038          
Net interest rate spread(2)           3.53 %         3.56 %
Net interest income       $ 31,459           $ 25,340      
Net interest margin(3)           3.80 %         3.85 %
                           
(1) Includes average outstanding balances of loans held for sale of $3,134 and $3,569 for the twelve months ended December 31, 2015 and December 31, 2014, respectively.  
(2) Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.  
(3) Net interest margin is equal to net interest income divided by average interest-earning assets.  


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