Press Release Details

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.

Media Contact:
LaVonda Renfro
972-349-6200
lrenfro@veritexbank.com

Investor Relations:
972-349-6200
scaudle@veritexbank.com

Veritex Holdings, Inc.