Market Overview

Veritex Holdings, Inc. Reports Second Quarter Financial Results

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DALLAS, July 26, 2016 (GLOBE NEWSWIRE) -- Veritex Holdings, Inc. (NASDAQ: VBTX), the holding company for Veritex Community Bank, announced today the results for the quarter ended June 30, 2016. The Company reported net income of $3.2 million, or $0.29 diluted earnings per share (EPS), compared to $2.8 million, or $0.26 diluted EPS, for the quarter ended March 31, 2016 and $1.9 million, or $0.19 diluted EPS, for the quarter ended June 30, 2015.

Malcolm Holland, the Company's Chairman and Chief Executive Officer, said, "I am excited to announce another quarter of record earnings. With the reported $0.29 diluted earnings per share for the second quarter 2016, we have grown 2016 diluted earnings per share to $0.55 through the first six months of 2016, a 45% increase over $0.38 for the same period in 2015. The growth in earnings continues to be fueled by our strong loan growth with loans increasing by $43 million between March 31, 2016 and June 30, 2016.  I take great pride in noting that we have grown loans by $107 million, or 13%, since December 31, 2015, an annualized rate of 26%."

"Loan demand continues to be robust reflecting the strength of the Dallas market. I expect that we will see a strong second half of the year," Mr. Holland stated. "In addition to our loan growth, we have been very focused on core deposit growth over the last six months. We continue to hire experienced bankers with deep relationships in our market. We maintain that much of our franchise value is linked to our ability to retain and grow deposits," continued Mr. Holland.

Second Quarter 2016 Financial Highlights

  • Net interest income was $10.2 million, an increase of $3.2 million or 46.7% compared to $7.0 million for the same period in 2015.
  • Total loans increased $283.1 million, or 43.9%, to $928.0 million compared to $644.9 million as of June 30, 2015.
  • Total deposits increased $354.6 million, or 52.7%, to $1.0 billion compared to $673.1 million as of June 30, 2015.
  • Pre-tax, pre-provision income was $5.3 million, an increase of $2.4, million or 82.2%, compared to $2.9 million for the same period in 2015.
  • Year-over-year improvement in the following performance ratios (annualized):
    • Return on average assets of 1.12% compared to 0.93% for the same period in 2015.
    • Return on average equity of 9.23% compared to 6.39% for the same period in 2015.
    • Efficiency ratio of 54.13% compared to 61.75% for the same period in 2015.

Result of Operations for the Three Months Ended June 30, 2016

Net Interest Income

For the three months ended June 30, 2016, net interest income before provision for loan losses was $10.2 million and net interest margin was 3.90% compared to $9.7 million and 3.88%, respectively, for the three months ended March 31, 2016. Net interest income increased $538,000 primarily due to increased interest income on loans as average loan balances increased $57.3 million due to organic loan growth during the three months ended June 30, 2016 compared to the three months ended March 31, 2016. The net interest margin increased 0.02% from the three months ended March 31, 2016. The increase in net interest margin was due to an increase in the accretion of purchase discount of 0.03% and a change in the mix of interest earning assets.  Total loans, which had an average yield of 4.86% represented 86.7% of earning assets as of June 30, 2016 compared to total loans, which had an average yield of 4.86%, representing 85.3% of earning assets as of March 31, 2016.  This was offset by an increase of 0.06% in the cost of interest bearing deposits primarily due to an increase in the rate paid on money market deposit accounts.

Net interest income before provision for loan losses increased by $3.2 million from $7.0 million to $10.2 million for the three months ended June 30, 2016 as compared to the same period during 2015. The increase in net interest income before provision for loan losses was primarily due to $3.6 million in increased interest income on loans resulting from average loan balance increases of $289.2 million compared to June 30, 2015. The net interest margin improved 0.13% to 3.90% from the three months ended June 30, 2016 from 3.77% for the same three-month period in 2015. The primary driver of the increase was an increase in average yield on loans of 0.08% to 4.86% for the three months ended June 30, 2016 from 4.78% for the same period in 2015.  This increase in average yield was primarily the result of an additional $149,000 in purchase discount accretion representing an addition of 0.06% to loan yields.

The average rate paid on interest-bearing liabilities increased 0.02% from 0.70% for the three months ended June 30, 2015 to 0.72% for the three months ended June 30, 2016 primarily due to an increase in the average rate paid on money market accounts.

Noninterest Income

Noninterest income for the three months ended June 30, 2016 was $1.4 million, an increase of $39,000 or 2.8% compared to the three months ended March 31, 2016. The net increase was a result of increased dividend income of $95,000 as a result of bi-annual Federal Reserve Bank stock dividends reflected in the three months ended June 30, 2016, and increased gain on sales of mortgage loans of $154,000 compared to three months ended March 31, 2016.  These increases were partially offset by a non-recurring gain on the sale of a loan acquired in the IBT acquisition of $193,000 reflected in the three months ended March 31, 2016, and a decrease in gain on sale of securities of $15,000 compared to the three months ended March 31, 2016.

Compared to the three months ended June 30, 2015, noninterest income grew $724,000 or 105.2%. The increase was primarily a result of increased gains on sale of Small Business Administration ("SBA") loans totaling $252,000, increased gains on sale of mortgage loans totaling $239,000, and increased deposit service charges and fees on deposit accounts of $161,000 primarily related to the deposit accounts acquired with the acquisition of IBT.

Noninterest Expense

Noninterest expense was $6.3 million for the three months ended June 30, 2016, compared to noninterest expense of $6.0 million for the three months ended March 31, 2016, an increase of $326,000 or 5.5%. The increase was primarily due to increases in employee expense of $415,000 related to the hiring of additional staff members, seasonal mortgage commissions, and a decrease in deferred direct origination costs.  This increase was partially offset by a decrease in professional services fees of $70,000 primarily related to annual reporting requirements for the Company as well as decreases in data processing and expenses related to other assets owned.

Compared to the three months ended June 30, 2015, noninterest expense increased $1.6 million, or 33.2%, to $6.3 million for the three months ended June 30, 2016. This increase was primarily due to the hiring of additional employees resulting in additional salary and employee benefit expenses of $1.0 million, increased professional fees of $138,000 related to increased directors' compensation, audit fees and legal support, and increased other operating expenses of $442,000 primarily related to the acquisition of IBT.

Income Taxes

Income tax expense for the three months ended June 30, 2016 totaled $1.6 million, an increase of $209,000, or 14.6%, compared to the three months ended March 31, 2016. The Company's effective tax rate was approximately 34.1% and 33.7% for the three months ended June 30, 2016 and the three months ended March 31, 2016, respectively.

Compared to the three months ended June 30, 2015, income tax expense increased $713,000, or 77.0%, to $1.6 million for the three months ended June 30, 2016. The increase in the income tax expense was primarily due to the $2.0 million increase in net operating income from $2.8 million for the three months ended June 30, 2015 to $4.8 million for the three months ended June 2016.  The Company's effective tax rate was approximately 34.1% for the three months ended June 30, 2016 compared to 33.3% for the three months ended June 30, 2015.

Financial Condition

Loans (excluding loans held for sale and deferred loan fees) at June 30, 2016 were $928.0 million, an increase of $42.6 million or 4.8% compared to $885.4 million at March 31, 2016. The Company believes the increase from March 31, 2016 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 $283.1 million, or 43.9%, compared to $645.0 million at June 30, 2015. The acquisition of IBT represented approximately $89.7 million or 31.7% of the increase from June 30, 2015. The additional growth of $193.4 million was achieved through organic growth.

Deposits at June 30, 2016 were $1.0 billion, an increase of $81.7 million, or 8.6%, compared to $946.1 million at March 31, 2016 primarily due to growth in noninterest-bearing accounts of $58.1 million and interest bearing accounts of $23.6 million. A significant contributor to the growth in noninterest-bearing accounts was a single customer deposit of $38.6 million, the customer is expected to withdraw these funds within the next 90 days.

Deposits increased $354.6 million, or 52.7%, compared to $673.1 million at June 30, 2015. The increase from June 30, 2015 was due to the acquisition of IBT's deposits of approximately $98.3 million, customer deposit growth of $233.0 million and wholesale deposit growth of $23.3 million.

Advances from the Federal Home Loan Bank were $38.4 million at June 30, 2016 and March 31, 2016 compared to $27.0 million at June 30, 2015.

Asset Quality

The allowance for loan losses was 0.85% and 0.83% of total loans at June 30, 2016 and March 31, 2016, respectively, compared to 0.96% of total loans at June 30, 2015. The decrease in allowance for loan losses as a percentage of total loans compared to June 30, 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.

The provision for loan losses for the three months ended June 30, 2016 totaled $527,000 compared to $845,000 for three months ended March 31, 2016 and $148,000 for the three months ended June 30, 2015. The decrease in provision for loan losses for the three months ended June 30, 2016 compared to March 31, 2016 was due to a decrease in general provision requirements as loan growth was 4.8% for the three months ended June 30, 2016 compared to 7.9% for the three months ended March 31, 2016. The increase in provision for loan losses for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 was due to the general provision required from the increasing loan growth compared to the same period in 2015.

Other real estate owned totaled $493,000 at June 30, 2016 and March 31, 2016 compared to $548,000 at June 30, 2015. Nonaccrual loans were $1.0 million at June 30, 2016 compared to $525,000 at March 31, 2016 and $312,000 at June 30, 2015. The increase in the nonaccrual loans at June 30, 2016 compared to March 31, 2016 was primarily due to the addition of a single loan. At June 30, 2016 and March 31, 2016, nonaccrual loans to our total loans held for investment was minimal at 0.11% and 0.06%, respectively.

Nonperforming assets totaled $7.2 million or 0.59% of total assets at June 30, 2016 compared to $1.2 million or 0.11% of total assets at March 31, 2016. Nonperforming assets were $860,000 or 0.10% of total assets at June 30, 2015. The increase of $6.0 million in nonperforming assets compared to March 31, 2016 is primarily related to the addition of a single $5.4 million loan to the accruing loans 90 or more days past due category.  This $5.4 million loan is part of the borrowing relationship detailed in the following paragraph and table below.  The Company believes this loan is well-secured, and a plan is in place for the borrower to bring the note fully current through contractual commitments to sell the underlying collateral and accelerate principal payments in advance of the original contractual terms within the next 90 days.

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. 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 the principal balance of loans as of the dates specified for the above mentioned borrowing relationship.
 
  June 30,  March 31,   December 31,   
Borrower 2016  2016  2015 Comments
  (In thousands)  
Loan 1$5,400 $6,000 $6,000 Substandard: payment 90 days past due, interest current as of
6/30/2016
Loan 2 1,579  1,579  3,082 Pass: paying in accordance with contractual terms
Loan 3   5,116  5,116 Paid in full
Loan 4 8,644  10,290  11,250 Split grade: $3,690 Pass; $4,950 Special Mention, principal and
interest are current; note renewed May 8, 2016 with a maturity
date of September 5, 2016
Total:$15,623 $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 branch locations throughout the Dallas metropolitan area and one mortgage office. 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, the Company 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 
  June 30,  March 31,  December 31,  September 30,  June 30,  
  2016 2016 2015 2015 2015 
Selected Financial Data:                
Net income $ 3,173 $2,813 $2,573 $ 2,537 $ 1,856 
Net income available to common stockholders   3,173  2,813  2,535   2,517   1,836 
Total assets   1,215,497  1,130,480  1,039,600   1,009,539   827,140 
Total loans(1)   928,000  885,415  820,567   754,199   644,938 
Provision for loan losses   527  845  610      148 
Allowance for loan losses   7,910  7,372  6,772   6,214   6,193 
Noninterest‑bearing deposits   354,570  296,481  301,367   299,864   240,919 
Total deposits   1,027,729  946,058  868,410   842,607   673,106 
Total stockholders' equity   138,850  135,241  132,046   137,508   117,085 
Summary Performance Ratios:                
Return on average assets(2)   1.12% 1.04% 0.99%  1.04%  0.93%
Return on average equity(2)   9.26  8.39  7.37   7.38   6.39 
Net interest margin(3)   3.90  3.87  3.78   3.84   3.77 
Efficiency ratio(4)   54.13  54.01  56.11   60.48   61.75 
Noninterest expense to average assets(2)   2.23  2.20  2.22   2.39   2.36 
Summary Credit Quality Data:                
Nonaccrual loans $ 1,028 $525 $593 $ 428 $ 312 
Accruing loans 90 or more days past due   5,634  141  84       
Other real estate owned   493  493  493   493   548 
Nonperforming assets to total assets   0.59% 0.11% 0.11%  0.09%  0.10%
Nonperforming loans to total loans   0.72  0.08  0.08   0.06   0.05 
Allowance for loan losses to total loans   0.85  0.83  0.83   0.82   0.96 
Net (recoveries) charge‑offs to average loans outstanding   (0.03 0.03  0.01   (0.00)  (0.01)
Capital Ratios:                
Total stockholders' equity to total assets   11.42% 11.96% 12.70%  13.62%  14.16%
Tangible common equity to tangible assets(5)   9.25  9.63  10.17   10.30   11.01 
Tier 1 capital to average assets   10.21  10.38  10.75   12.02   12.82 
Tier 1 capital to risk‑weighted assets   11.88  12.03  12.85   14.73   14.87 
Common equity tier 1 (to risk weighted assets)   11.56  11.69  12.48   13.29   13.23 
Total capital to risk‑weighted assets   13.23  13.38  14.25   16.18   16.52 

 

 (1)Total loans does not include loans held for sale and deferred fees. Loans held for sale were $4.8 million at June 30, 2016, $3.6 million at March 31, 2016, $2.8 million at December 31, 2015, $1.8 million at September 30, 2015 and $2.1 million at June 30, 2015. Deferred fees were $52,000 at June 30, 2016, $65,000 at March 31, 2016, $61,000 at December 31, 2015, $55,000 at September 30, 2015, and $49,000 at June 30, 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)
                 
  June 30,  March 31,  December 31,  September 30,  June 30,  
  2016 2016 2015 2015 2015 
ASSETS                
Cash and due from banks $ 12,951  $ 12,416  $ 10,989  $ 10,478  $ 11,699  
Interest bearing deposits in other banks   114,293    79,967    60,562    113,031    51,570  
Total cash and cash equivalents   127,244    92,383    71,551    123,509    63,269  
Investment securities   83,677    79,146    75,813    61,023    59,299  
Loans held for sale   4,793    3,597    2,831    1,766    2,127  
Loans, net   920,039    877,978    813,733    747,930    638,696  
Accrued interest receivable   2,259    2,252    2,216    2,088    1,557  
Bank‑owned life insurance   19,767    19,614    19,459    19,299    18,115  
Bank premises, furniture and equipment, net   17,243    17,248    17,449    17,585    12,107  
Non‑marketable equity securities   7,035    5,541    4,167    4,045    3,970  
Investment in unconsolidated subsidiary   93    93    93    93    93  
Other real estate owned   493    493    493    493    548  
Intangible assets   2,264    2,347    2,410    2,458    1,110  
Goodwill   26,865    26,865    26,865    26,025    19,148  
Other assets   3,725    2,923    2,520    3,225    7,101  
Total assets $ 1,215,497  $ 1,130,480  $ 1,039,600  $ 1,009,539  $ 827,140  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Deposits:                
Noninterest‑bearing $ 354,570  $ 296,481  $ 301,367  $ 299,864  $ 240,919  
Interest‑bearing   673,159    649,577    567,043    542,743    432,187  
Total deposits   1,027,729    946,058    868,410    842,607    673,106  
Accounts payable and accrued expenses   1,611    2,122    1,776    1,782    1,202  
Accrued interest payable and other liabilities   855    573    848    1,089    672  
Advances from Federal Home Loan Bank   38,375    38,410    28,444    18,478    27,000  
Junior subordinated debentures   3,093    3,093    3,093    3,093    3,093  
Subordinated notes   4,984    4,983    4,983    4,982    4,982  
Total liabilities   1,076,647    995,239    907,554    872,031    710,055  
Commitments and contingencies                
Stockholders' equity:                
Preferred stock               8,000    8,000  
Common stock   107    107    107    107    95  
Additional paid‑in capital   116,111    115,876    115,721    115,579    97,761  
Retained earnings   22,725    19,552    16,739    14,204    11,687  
Unallocated Employee Stock Ownership Plan shares   (309)   (309)   (309)   (406)   (406) 
Accumulated other comprehensive income   286    85    (142)   94    18  
Treasury stock, 10,000 shares at cost   (70)   (70)   (70)   (70)   (70) 
Total stockholders' equity   138,850    135,241    132,046    137,508    117,085  
Total liabilities and stockholders' equity $ 1,215,497  $ 1,130,480  $ 1,039,600  $ 1,009,539  $ 827,140  


 
 
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income - (Unaudited)
(In thousands, except share and per share data)
 
  Six Months Ended  
  June 30,  June 30,  
  2016 2015 
Interest income:       
Interest and fees on loans $ 21,407 $  14,802  
Interest on investment securities   679    464  
Interest on deposits in other banks   173    109  
Interest on other   2    1  
Total interest income   22,261    15,376  
Interest expense:       
Interest on deposit accounts   2,007    1,297  
Interest on borrowings   335    249  
Total interest expense   2,342    1,546  
Net interest income   19,919    13,830  
Provision for loan losses   1,372    258  
Net interest income after provision for loan losses   18,547    13,572  
Noninterest income:       
Service charges and fees on deposit accounts   877    527  
Gain on sales of investment securities   15    7  
Gain on sales of loans   1,282    431  
Gain on sales of other assets owned   —    (2) 
Bank‑owned life insurance   384    357  
Other   227    134  
Total noninterest income   2,785    1,454  
Noninterest expense:       
Salaries and employee benefits   6,763    5,245  
Occupancy and equipment   1,795    1,665  
Professional fees   1,076    905  
Data processing and software expense   554    535  
FDIC assessment fees   269    196  
Marketing   411    367  
Other assets owned expenses and write-downs   130    35  
Amortization of intangibles   190    148  
Telephone and communications   197    114  
Other   892    603  
Total noninterest expense   12,277    9,813  
Net income from operations   9,055    5,213  
Income tax expense   3,069    1,533  
Net income $ 5,986 $  3,680  
Preferred stock dividends $ — $  40  
Net income available to common stockholders $ 5,986 $  3,640  
Basic earnings per share $ 0.56 $  0.39  
Diluted earnings per share $ 0.55 $  0.38  
Weighted average basic shares outstanding   10,695,083    9,447,807  
Weighted average diluted shares outstanding   10,978,284    9,703,510  


 
 
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income - (Unaudited)
(In thousands, except share and per share data)
 
  For the Three Months Ended 
  June 30,  March 31,  December 31,  September 30,  June 30,  
  2016 2016 2015 2015 2015 
Interest income:                
Interest and fees on loans $11,052 $10,355 $9,648 $ 9,230  $7,454 
Interest on investment securities  344  335  285   247   252 
Interest on deposits in other banks  80  92  73   60   55 
Interest on other  1  1  1   1    
Total interest income  11,477  10,783  10,007   9,538   7,761 
Interest expense:                
Interest on deposit accounts  1,072  935  843   778   666 
Interest on borrowings  177  158  151   143   123 
Total interest expense  1,249  1,093  994   921   789 
Net interest income  10,228  9,690  9,013   8,617   6,972 
Provision for loan losses  527  845  610      148 
Net interest income after provision for loan losses  9,701  8,845  8,403   8,617   6,824 
Noninterest income:                
Service charges and fees on deposit accounts  443  434  419   380   282 
Gain on sales of investment securities    15         
Gain on sales of loans  620  662  430   392   129 
Gain (loss) on sales of other assets owned         21    
Bank‑owned life insurance  191  193  195   194   179 
Other  158  69  163   56   98 
Total noninterest income  1,412  1,373  1,207   1,043   688 
Noninterest expense:                
Salaries and employee benefits  3,589  3,174  3,019   3,001   2,588 
Occupancy and equipment  894  901  917   894   808 
Professional fees  503  573  487   632   365 
Data processing and software expense  270  284  313   368   272 
FDIC assessment fees  132  137  131   121   96 
Marketing  211  200  205   227   162 
Other assets owned expenses and write-downs  55  75  24   (5)  22 
Amortization of intangibles  95  95  95   96   74 
Telephone and communications  100  97  81   68   57 
Other  452  439  462   440   286 
Total noninterest expense  6,301  5,975  5,734   5,842   4,730 
Net income from operations  4,812  4,243  3,876   3,818   2,782 
Income tax expense  1,639  1,430  1,303   1,281   926 
Net income $3,173 $2,813 $2,573 $ 2,537  $1,856 
Preferred stock dividends $ $ $38 $ 20  $20 
Net income available to common stockholders $3,173 $2,813 $2,535 $ 2,517  $1,836 
Basic earnings per share $0.30 $0.26 $0.24 $ 0.24  $0.19 
Diluted earnings per share $0.29 $0.26 $0.23 $ 0.23  $0.19 
Weighted average basic shares outstanding  10,696,366  10,693,800  10,675,948   10,652,602   9,447,807 
Weighted average diluted shares outstanding  10,993,921  10,963,986  10,954,920   10,940,427   9,708,673 
                   


 
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:
 
  June 30,  March 31,  December 31,  September 30,  June 30,  
  2016 2016 2015 2015 2015 
Tangible Common Equity                
Total stockholders' equity $ 138,850  $ 135,241  $ 132,046  $ 137,508  $ 117,085  
Adjustments:                
Preferred stock               (8,000)   (8,000) 
Goodwill   (26,865)   (26,865)   (26,865)   (26,025)   (19,148) 
Intangible assets   (2,264)   (2,347)   (2,410)   (2,458)   (1,110) 
Total tangible common equity $ 109,721  $ 106,029  $ 102,771  $ 101,025  $ 88,827  
Tangible Assets                
Total assets $ 1,215,497  $ 1,130,480  $ 1,039,600  $ 1,009,539  $ 827,140  
Adjustments:                
Goodwill   (26,865)   (26,865)   (26,865)   (26,025)   (19,148) 
Intangible assets   (2,264)   (2,347)   (2,410)   (2,458)   (1,110) 
Total tangible assets $ 1,186,368  $ 1,101,268  $ 1,010,325  $ 981,056  $ 806,882  
Tangible Common Equity to Tangible Assets   9.25%   9.63%   10.17%   10.30%   11.01% 
Common shares outstanding   10,728    10,724    10,712    10,700    9,494  
                 
Book value per common share(1) $ 12.94  $ 12.61  $ 12.33  $ 12.10  $ 11.49  
Tangible book value per common share(2) $ 10.23  $ 9.89  $ 9.59  $ 9.44  $ 9.36  


 (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 
  June 30,  March 31,  December 31,  September 30,  June 30,  
  2016 2016 2015 2015 2015 
Pre-Tax, Pre-Provision Income                
Provision for loan losses   527   845   610   —   148 
Net income from operations   4,812   4,243   3,876   3,818   2,782 
Total pre-tax, pre-provision income(1) $ 5,339 $ 5,088 $ 4,486 $ 3,818 $ 2,930 


 (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 
  June 30,  2016 March 31,  2016 June 30,  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) $ 914,121  $11,052 4.86%$ 856,861  $10,355 4.86%$ 624,971  $7,454 4.78%
Securities available for sale   80,498   344 1.72   77,567   335 1.74   56,603   252 1.79 
Investment in subsidiary   93   1 4.32   93   1 4.32   93     
Interest‑earning deposits in financial institutions   59,506   80 0.54   70,103   92 0.53   60,630   55 0.36 
Total interest‑earning assets   1,054,218   11,477 4.38   1,004,624   10,783 4.32   742,297   7,761 4.19 
Allowance for loan losses   (7,604)        (6,891)        (6,069)      
Noninterest‑earning assets   92,179         90,275         68,046       
Total assets $ 1,138,793       $ 1,088,008       $ 804,274       
Liabilities and Stockholders' Equity                         
Interest‑bearing liabilities:                         
Interest‑bearing deposits $ 636,875  $1,072 0.68%$ 605,829  $935 0.62%$ 428,146  $666 0.62%
Advances from FHLB   54,425   80 0.59   43,596   62 0.57   15,132   30 0.80 
Other borrowings   8,077   97 4.83   8,076   96 4.78   8,077   93 4.62 
Total interest‑bearing liabilities   699,377   1,249 0.72   657,501   1,093 0.67   451,355   789 0.70 
Noninterest‑bearing liabilities:                         
Noninterest‑bearing deposits   298,887         293,438         234,510       
Other liabilities   2,687         2,624         1,974       
Total noninterest‑bearing liabilities   301,574         296,062         236,484       
Stockholders' equity   137,842         134,445         116,435       
Total liabilities and stockholders' equity $ 1,138,793       $ 1,088,008       $ 804,274       
Net interest rate spread(2)       3.66%      3.65%      3.49%
Net interest income    $10,228      $9,690      $6,972   
Net interest margin(3)       3.90%      3.88%      3.77%


 (1)Includes average outstanding balances of loans held for sale of $5,192, $3,542 and $1,429 for the three months ended June 30, 2016, March 31, 2016, and June 30, 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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