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Veritex Holdings, Inc. Reports First Quarter Financial Results

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DALLAS, April 26, 2016 (GLOBE NEWSWIRE) -- Veritex Holdings, Inc. (NASDAQ: VBTX), the holding company for Veritex Community Bank, announced the results today for the quarter ended March 31, 2016. The Company reported net income of $2.8 million or $0.26 diluted earnings per common share, compared to $2.6 million or $0.23 diluted earnings per common share for the quarter ended December 31, 2015 and $1.8 million or $0.19 diluted earnings per common share for the quarter ended March 31, 2015.

Malcolm Holland, the Company's Chairman and Chief Executive Officer, said, "I am proud to report another consecutive quarter of record earnings driven by a record level of loan growth. Loans grew $64.8 million or 7.9%, an annualized rate of 32% this quarter."

"Our pre-tax, pre-provision income has more than doubled to $5.1 million for the first quarter 2016 compared to $2.5 million in the first quarter of 2015.  We continue to be effective at organically growing our loan portfolio, expanding fee-generating businesses, keeping interest rates paid on deposits flat while efficiently managing operating expenses. In addition, the successful IBT acquisition and the cost savings achieved from the integration of the IBT business onto our platform contributed to our growth in pre-tax pre-provision income," stated Mr. Holland.

Mr. Holland continued, "Loan demand is robust and our pipelines are strong. I remain extremely optimistic about our growth opportunities through 2016. Our first quarter results put us on track to deliver another great year."

First Quarter 2016 Financial Highlights

  • Pre-tax, pre-provision income was $5.1 million, an increase of $2.6 million or 104.0% compared to $2.5 million for the same period in 2015.
  • Net interest income was $9.7 million, an increase of $2.8 million or 41.3% compared to $6.9 million for the same period in 2015.
  • Year-over-year improvement in the following performance ratios (annualized):
    • Efficiency ratio of 54.01% compared to 66.67% for the same period in 2015.
    • Return on average assets of 1.04% compared to 0.94% for the same period in 2015.
    • Return on average equity of 8.39% compared to 6.45% for the same period in 2015.
  • Total loans increased $269.9 million or 43.9% to $885.4 million compared to $615.5 million as of March 31, 2015.
  • Total deposits increased $277.8 million or 41.6% to $946.1 million compared to $668.3 million as of March 31, 2015.

Result of Operations for the Three Months Ended March 31, 2016

Net Interest Income

For the three months ended March 31, 2016, net interest income before provision for loan losses was $9.7 million and net interest margin was 3.87% compared to $9.0 million and 3.78%, respectively, for the three months ended December 31, 2015. Net interest income increased $677,000 primarily due to increased interest income on loans as average loan balances increased $65.1 million from organic loan growth during the three months ended March 31, 2016 compared to the three months ended December 31, 2015. The net interest margin increased 0.09% from the three months ended December 31, 2015 as the average rate paid on interest-bearing liabilities decreased 0.02% to 0.67% for the three months ended March 31, 2016 from 0.69% for the three months ended December 31, 2015. The decline in rate is primarily due to a decrease in the average rate paid on money market accounts. Also contributing to the increase in net interest margin, the average yield on loans increased 0.02% to 4.85% from 4.83% for the three months ended December 31, 2015, primarily due to an increase in average interest yield on real estate loans.

Compared to the three months ended March 31, 2015, net interest income before provision for loan losses increased by $2.8 million from $6.9 million to $9.7 million for the three months ended March 31, 2016. The increase in net interest income before provision for loan losses was primarily due to increased interest income on loans as average loan balances increased by $243.0 million compared to March 31, 2015 due to the loans acquired in the acquisition of IBT Bancorp, Inc. ("IBT"), which closed in July 2015, and organic loan growth.  Average loan balance grew $90.5 million from the acquisition of IBT and $152.5 million from organic growth. The net interest margin improved 0.05% to 3.87% from 3.82% for the same three months in 2015. The rate paid on interest-bearing liabilities decreased from 0.71% for the three months ended March 31, 2015 to 0.67% for the three months ended March 31, 2016 primarily due to a decrease in the average rate paid on money market accounts. Average yield on loans was 4.85% for both the three months ended March 31, 2016 and the three months ended March 31, 2015.

Noninterest Income

Noninterest income for the three months ended March 31, 2016 was $1.4 million, an increase of $166,000 or 13.8% compared to the three months ended December 31, 2015. The increase was primarily the result of a non-recurring gain on the sale of a loan acquired in the IBT acquisition of $193,000 and increased gains on the sales of mortgage loans of $83,000 which was partially offset by the decreased sale of SBA loans of $44,000 and the bi-annual dividends received on Federal Reserve Bank stock of $85,000 in December 2015.

Compared to the three months ended March 31, 2015, noninterest income grew $607,000 or 79.2%. The increase was primarily a result of the following: increased gains on sale of SBA loans and SBA servicing fees totaling $308,000; increased deposit service charges and fees on deposit accounts of $189,000 primarily related to the deposit accounts acquired with the acquisition of IBT; and a non-recurring gain on the sale of a loan acquired in the IBT acquisition of $193,000.

Noninterest Expense

Noninterest expense was $6.0 million for the three months ended March 31, 2016, compared to noninterest expense of $5.7 million for the three months ended December 31, 2015, an increase of $241,000 or 4.2%. The increase was primarily due to increases in employee expense of $155,000 related to annual merit raises, bonuses, and seasonal payroll taxes. Professional services fees of $86,000 primarily related to annual reporting requirements for the Company also contributed to the increase.

Compared to the three months ended March 31, 2015, noninterest expense increased $893,000 or 17.6%. This increase was in large part due to increases in salary and employee benefit expenses of $517,000, and other operating expense increases of $123,000 primarily related to the acquisition of IBT. Write-downs of other asset owned of $62,000 for the three months ended March 31, 2016 also contributed to the increase as there were no such write-downs for the three months ended March 31, 2015.

Income Taxes

Income tax expense for the three months ended March 31, 2016 totaled $1.4 million, an increase of $127,000 or 9.7% compared to the three months ended December 31, 2015. The Company's effective tax rate was approximately 33.7% and 33.6% for the three months ended March 31, 2016 and the three months ended December 31, 2015, respectively.

Compared to the three months ended March 31, 2015, income tax expense increased $823,000 or 135.6% for the three months ended March 31, 2016. The Company's effective tax rate was approximately 33.7% for the three months ended March 31, 2016 compared to 25.0% for the three months ended March 31, 2015. The increase in the effective tax rate from the three months ended March 31, 2015 was primarily due to the effect of a net discrete tax benefit of $186,000 associated with the recognition of non-qualified stock option related deferred tax assets during the first quarter of 2015.

Financial Condition

Loans (excluding loans held for sale and deferred loan fees) at March 31, 2016 were $885.4 million, an increase of $64.8 million or 7.9% compared to $820.6 million at December 31, 2015. The increase from December 31, 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 $269.9 million or 43.9% compared to $615.5 million at March 31, 2015. The acquisition of IBT represented approximately 33.4% of the increase from the prior year. The additional growth of $179.8 million was achieved through organic growth. 

Deposits at March 31, 2016 were $946.1 million, an increase of $77.7 million or 8.9% compared to $868.4 million at December 31, 2015 primarily due to growth in retail money market accounts of $36.2 million and wholesale deposits of $46.4 million.

Deposits increased $277.8 million or 41.6% compared to $668.3 million at March 31, 2015. The increase from March 31, 2015 was due to the acquisition of IBT's deposits of approximately $98.3 million, customer deposit growth of $103.0 million and wholesale deposit growth of $76.5 million.

Advances from the Federal Home Loan Bank were $38.4 million at March 31, 2016 compared to $28.4 million at December 31, 2015 and $15.0 million at March 31, 2015.

Asset Quality

Nonperforming assets totaled $1.2 million or 0.11% of total assets at March 31, 2016 compared to $1.1 million or 0.10% of total assets at December 31, 2015.  Nonperforming assets were $941,000 or 0.12% of total assets at March 31, 2015.

The allowance for loan losses was 0.83% of total loans at March 31, 2016 and December 31, 2015 compared to 0.98% of total loans at March 31, 2015. The decrease in allowance for loan losses as a percentage of total loans compared to March 31, 2015 was primarily due to the recording of IBT acquired loans at an estimated fair value in the later part of 2015 with no significant additional loan loss reserves since the acquisition.

Other real estate owned totaled $493,000 at March 31, 2016 and December 31, 2015 compared to $548,000 at March 31, 2015. Nonaccrual loans were $525,000 at March 31, 2016 compared to $593,000 at December 31, 2015 and $323,000 at March 31, 2015.

The provision for loan losses for the three months ended March 31, 2016 totaled $845,000 compared to $610,000 for three months ended December 31, 2015 and $110,000 for the three months ended March 31, 2015. The increase in provision for loan losses was due to general provision requirements related to loan growth.

In the Company's Annual Report on Form 10-K for the year ended December 31, 2015, the Company disclosed a borrowing relationship comprised of loans to multiple affiliated funds in which one of the funds had publicly disclosed that it was subject to ongoing SEC investigations and that the Federal Bureau of Investigation served a search warrant in February 2016 at the fund's corporate offices in connection with a law enforcement investigation. The borrowing relationship consists of four loans to five affiliated funds secured by various assets, including multiple notes made to numerous residential developers in favor of the funds and further secured by deeds of trust. These loans are made to separate and distinct borrowing entities, and are not dependent on each other for repayment.  Each loan has specific collateral note assignments that relate to particular single-family residential projects in either the Houston, Dallas, Austin or San Antonio markets. The specific collateral note assignments are not cross-collateralized. As of March 31, 2016, $12.7 million of the borrowing relationship was classified as Pass reflecting the continued ability to pay according to the contractual terms of the loans and the strength of collateral.  The Company determined that $10.3 million of loans affiliated with this borrowing relationship demonstrated weakness consistent with the Special Mention classification, and the Company downgraded the notes accordingly. Subsequent to March 31, 2016, the Company further downgraded a $6.0 million note classified as Special Mention to the Substandard classification. The Company believes that the value of collateral securing each loan is well in excess of loan amounts with the loan to value ratios less than 50%. The borrowing relationship is not considered to be impaired and no specific reserves have been established at this time.

The following table shows loans for the past two quarters and most recent balance to date in the above mentioned borrowing relationship.

            
  April 22,  March 31,   December 31,    
Borrower 2016  2016  2015 Comments 
     (In thousands)    Note: classifications referenced below are as of 04/22/2016 
Loan 1$6,000 $6,000 $6,000 Substandard: payment 30 days past due 
Loan 2 1,579  1,579  3,082 Pass: paying in accordance with contractual terms 
Loan 3 2,652  5,116  5,116 Pass: paying in accordance with contractual terms 
Loan 4 9,259  10,290  11,250 Split grade: $4,969 Pass; $4,290 Special Mention due
to change in funding plan to complete a project
 
Total$19,490 $22,985 $25,448   
            

The total is presented for informational purposes only; debts are not required to be aggregated for legal lending limit purposes.

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 $7.7 million. Additionally, we recognized $1.1 million of core deposit intangibles in connection with the acquisition.

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 15, 2016, 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 the Investor Relations section on the Company's website, www.veritexbank.com, under the About Us 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 
  March 31,  December 31,  September 30,  June 30,  March 31,  
  2016 2015 2015 2015 2015 
Selected Financial Data:                
Net income $2,813 $2,573 $ 2,537 $ 1,856 $1,824 
Net income available to common stockholders  2,813  2,535   2,517   1,836  1,804 
Total assets  1,130,480  1,039,600   1,009,539   827,140  808,906 
Total loans(1)  885,415  820,605   754,199   644,938  615,495 
Provision for loan losses  845  610      148  110 
Allowance for loan losses  7,372  6,772   6,214   6,193  6,006 
Noninterest‑bearing deposits  296,481  301,367   299,864   240,919  241,732 
Total deposits  946,058  868,410   842,607   673,106  668,255 
Total stockholders' equity  135,241  132,046   137,508   117,085  115,133 
Summary Performance Ratios:                
Return on average assets(2)  1.04% 0.99%  1.04%  0.93% 0.94%
Return on average equity(2)  8.39  7.37   7.38   6.39  6.45 
Net interest margin(3)  3.87  3.78   3.84   3.77  3.82 
Efficiency ratio(4)  54.01  56.11   60.48   61.75  66.67 
Noninterest expense to average assets(2)  2.20  2.22   2.39   2.36  2.61 
Summary Credit Quality Data:                
Nonaccrual loans $525 $593 $ 428 $ 312 $323 
Accruing loans 90 or more days past due  141  84         
Other real estate owned  493  493   493   548  548 
Nonperforming assets to total assets  0.11% 0.10%  0.09%  0.10% 0.12%
Nonperforming loans to total loans  0.08  0.07   0.06   0.05  0.05 
Allowance for loan losses to total loans  0.83  0.83   0.82   0.96  0.98 
Net (recoveries) charge‑offs to average loans outstanding  0.03  0.01   (0.00  (0.01 0.01 
Capital Ratios:                
Total stockholders' equity to total assets  11.96% 12.70%  13.62%  14.16% 14.23%
Tangible common equity to tangible assets(5)  9.63  10.18   10.30   11.01  11.01 
Tier 1 capital to average assets  10.38  10.83   12.02   12.82  12.78 
Tier 1 capital to risk‑weighted assets  12.03  12.93   14.73   14.87  15.43 
Common equity tier 1 (to risk weighted assets)  11.69  12.56   13.29   13.23  13.70 
Total capital to risk‑weighted assets  13.38  14.34   16.18   16.52  17.16 
                   

(1) Total loans does not include loans held for sale and deferred fees. Loans held for sale were $3.6 million at March 31, 2016, $2.8 million at December 31, 2015, $1.8 million at September 30, 2015, $2.1 million at June 20, 2015 and $2.5 million at March 31, 2015. Deferred fees were $65,000 at March 31, 2016, $61,000 at December 31, 2015, $55,000 at September 30, 2015, $49,000 at June 30, 2015, and $50,000 at March 31, 2015.

(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)".

 

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets - (Unaudited)
(In thousands, except share and per share data)
 
                 
  March 31,  December 31,  September 30,  June 30,  March 31,  
  2016 2015 2015 2015 2015 
ASSETS                
Cash and due from banks $  12,416  $  10,989  $  10,478  $  11,699  $  9,338  
Interest bearing deposits in other banks    79,967     60,562     113,031     51,570     76,206  
Total cash and cash equivalents    92,383     71,551     123,509     63,269     85,544  
Investment securities    79,146     75,813     61,023     59,299     53,391  
Loans held for sale    3,597     2,831     1,766     2,127     2,508  
Loans, net    877,978     813,733     747,930     638,696     609,439  
Accrued interest receivable    2,252     2,216     2,088     1,557     1,539  
Bank‑owned life insurance    19,614     19,459     19,299     18,115     17,969  
Bank premises, furniture and equipment, net    17,248     17,449     17,585     12,107     11,526  
Non‑marketable equity securities    5,541     4,167     4,045     3,970     3,136  
Investment in unconsolidated subsidiary    93     93     93     93     93  
Other real estate owned    493     493     493     548     548  
Intangible assets    2,347     2,410     2,458     1,110     1,186  
Goodwill    26,865     26,865     26,025     19,148     19,148  
Other assets    2,923     2,520     3,225     7,101     2,879  
Total assets $  1,130,480  $  1,039,600  $  1,009,539  $  827,140  $  808,906  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Deposits:                
Noninterest‑bearing $  296,481  $  301,367  $  299,864  $  240,919  $  241,732  
Interest‑bearing    649,577     567,043     542,743     432,187     426,523  
Total deposits    946,058     868,410     842,607     673,106     668,255  
Accounts payable and accrued expenses    2,122     1,776     1,782     1,202     1,049  
Accrued interest payable and other liabilities    573     848     1,089     672     1,395  
Advances from Federal Home Loan Bank    38,410     28,444     18,478     27,000     15,000  
Junior subordinated debentures    3,093     3,093     3,093     3,093     3,093  
Subordinated notes    4,983     4,983     4,982     4,982     4,981  
Total liabilities    995,239     907,554     872,031     710,055     693,773  
Commitments and contingencies                
Stockholders' equity:                
Preferred stock    —         8,000     8,000     8,000  
Common stock    107     107     107     95     95  
Additional paid‑in capital    115,876     115,721     115,579     97,761     97,480  
Retained earnings    19,552     16,739     14,204     11,687     9,851  
Unallocated Employee Stock Ownership Plan shares    (309)    (309)    (406)    (406)    (401) 
Accumulated other comprehensive income    85     (142)    94     18     178  
Treasury stock, 10,000 shares at cost    (70)    (70)    (70)    (70)    (70) 
Total stockholders' equity    135,241     132,046     137,508     117,085     115,133  
Total liabilities and stockholders' equity $  1,130,480  $  1,039,600  $  1,009,539  $  827,140  $  808,906  



VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income - (Unaudited)
(In thousands, except share and per share data)
                 
  For the Three Months Ended 
  March 31,  December 31,  September 30,  June 30,  March 31,  
  2016 2015 2015 2015 2015 
Interest income:                
Interest and fees on loans $ 10,355 $ 9,648 $  9,230  $ 7,454 $  7,348  
Interest on investment securities   335   285    247    252    212  
Interest on deposits in other banks   92   73    60    55    54  
Interest on other   1   1    1    —     
Total interest income   10,783   10,007    9,538    7,761    7,614  
Interest expense:                
Interest on deposit accounts   935   843    778    666    631  
Interest on borrowings   158   151    143    123    126  
Total interest expense   1,093   994    921    789    757  
Net interest income   9,690   9,013    8,617    6,972    6,857  
Provision for loan losses   845   610       148    110  
Net interest income after provision for loan losses   8,845   8,403    8,617    6,824    6,747  
Noninterest income:                
Service charges and fees on deposit accounts   434   419    380    282    245  
Gain on sales of investment securities   15   —       —    7  
Gain on sales of loans   662   430    392    129    302  
Gain (loss) on sales of other assets owned   —   —    21    —    (2) 
Bank-owned life insurance   193   195    194    179    178  
Other   69   163    56    98    36  
Total noninterest income   1,373   1,207    1,043    688    766  
Noninterest expense:                
Salaries and employee benefits   3,174   3,019    3,001    2,588    2,657  
Occupancy and equipment   901   917    894    808    857  
Professional fees   573   487    632    365    540  
Data processing and software expense   284   313    368    272    263  
FDIC assessment fees   137   131    121    96    100  
Marketing   200   205    227    162    205  
Other assets owned expenses and write-downs   75   24    (5)   22    13  
Amortization of intangibles   95   95    96    74    74  
Telephone and communications   97   81    68    57    57  
Other   439   462    440    286    316  
Total noninterest expense   5,975   5,734    5,842    4,730    5,082  
Net income from operations   4,243   3,876    3,818    2,782    2,431  
Income tax expense   1,430   1,303    1,281    926    607  
Net income $ 2,813 $ 2,573 $  2,537  $ 1,856 $  1,824  
Preferred stock dividends $ — $ 38 $  20  $ 20 $  20  
Net income available to common stockholders $ 2,813 $ 2,535 $  2,517  $ 1,836 $  1,804  
Basic earnings per share $ 0.26 $ 0.24 $  0.24  $ 0.19 $  0.19  
Diluted earnings per share $ 0.26 $ 0.23 $  0.23  $ 0.19 $  0.19  
Weighted average basic shares outstanding   10,693,800   10,675,948    10,652,602    9,447,807    9,447,706  
Weighted average diluted shares outstanding   10,963,986   10,954,920    10,940,427    9,708,673    9,743,576  
                     



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:
                 
  March 31,  December 31,  September 30,  June 30,  March 31,  
  2016 2015 2015 2015 2015 
Tangible Common Equity                
Total stockholders' equity $ 135,241  $ 132,046  $ 137,508  $ 117,085  $ 115,133  
Adjustments:                
Preferred stock           (8,000)   (8,000)   (8,000) 
Goodwill(3)   (26,865)   (26,865)   (26,025)   (19,148)   (19,148) 
Intangible assets   (2,347)   (2,410)   (2,458)   (1,110)   (1,186) 
Total tangible common equity $ 106,029  $ 102,771  $ 101,025  $ 88,827  $ 86,799  
Tangible Assets                
Total assets $ 1,130,480  $ 1,039,600  $ 1,009,539  $ 827,140  $ 808,906  
Adjustments:                
Goodwill   (26,865)   (26,865)   (26,025)   (19,148)   (19,148) 
Intangible assets   (2,347)   (2,410)   (2,458)   (1,110)   (1,186) 
Total tangible assets $ 1,101,268  $ 1,010,325  $ 981,056  $ 806,882  $ 788,572  
Tangible Common Equity to Tangible Assets   9.63 %  10.17 %  10.30 %  11.01 %  11.01 %
Common shares outstanding   10,724    10,712    10,700    9,494    9,485  
                 
Book value per common share(1) $ 12.61  $ 12.33  $ 12.10  $ 11.49  $ 11.29  
Tangible book value per common share(2) $ 9.89  $ 9.59  $ 9.44  $ 9.36  $ 9.15  
                           

(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.

 

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 
  March 31,  December 31,  September 30,  June 30,  March 31,  
  2016 2015 2015 2015 2015 
Pre-Tax, Pre-Provision Income                
Provision for loan losses  845  610    148  110 
Net income from operations  4,243  3,876  3,818  2,782  2,431 
Total pre-tax, pre-provision income(1) $5,088 $4,486 $3,818 $2,930 $2,541 
                 

(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 
  March 31,  2016  December 31,  2015  March 31,  2015 
     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) $ 856,861  $10,355 4.85% $ 791,799  $9,648 4.83% $ 613,840  $7,348 4.85%
Securities available for sale   77,567   335 1.73    67,062   285 1.69    49,242   212 1.75 
Investment in subsidiary   93   1 4.31    93   1 4.27    93     
Interest‑earning deposits in financial institutions   70,103   92 0.53    86,079   73 0.34    65,221   54 0.34 
Total interest‑earning assets   1,004,624   10,783 4.31    945,033   10,007 4.20    728,396   7,614 4.24 
Allowance for loan losses   (6,891)         (6,436)         (6,013)      
Noninterest‑earning assets   90,275          88,382          67,233       
Total assets $ 1,088,008        $ 1,026,979        $ 789,616       
Liabilities and Stockholders' Equity                           
Interest‑bearing liabilities:                           
Interest‑bearing deposits $ 605,829  $935 0.62% $ 540,311  $843 0.62% $ 408,926  $631 0.63%
Advances from FHLB   43,596   62 0.57    20,748   55 1.05    16,878   32 0.77 
Other borrowings   8,076   96 4.77    11,272   96 3.38    8,394   94 4.54 
Total interest‑bearing liabilities   657,501   1,093 0.67    572,331   994 0.69    434,198   757 0.71 
Noninterest‑bearing liabilities:                           
Noninterest‑bearing deposits   293,438          312,783          238,994       
Other liabilities   2,624          3,419          1,820       
Total noninterest‑bearing liabilities   296,062          316,202          240,814       
Stockholders' equity   134,445          138,446          114,604       
Total liabilities and stockholders' equity $ 1,088,008        $ 1,026,979        $ 789,616       
Net interest rate spread(2)       3.64%       3.51%       3.53%
Net interest income    $9,690       $9,013       $6,857   
Net interest margin(3)       3.87%       3.78%       3.82%
                            

(1) Includes average outstanding balances of loans held for sale of $3,542, $2,482 and $4,420 for the three months ended March 31, 2016, December 31, 2015, and March 31, 2015, 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
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