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Veritex Holdings, Inc. Reports Second Quarter Financial Results

DALLAS, July 28, 2015 (GLOBE NEWSWIRE) -- Veritex Holdings, Inc. (NASDAQ:VBTX), the holding company for Veritex Community Bank, announced the results today for the quarter ended June 30, 2015. The Company reported net income of $1.9 million or $0.19 diluted earnings per common share compared to $1.8 million or $0.19 diluted earnings per common share for the quarter ended March 31, 2015 and $1.2 million or $0.18 diluted earnings per common share for the quarter ended June 30, 2014.

Veritex Holdings, Inc. Chairman and Chief Executive Officer Malcolm Holland said, "I am very proud to share our second quarter results, another record quarter for Veritex. Net income for the second quarter of 2015 increased $658,000 or 54.9%, average loans increased $103.8 million or 19.9% to $625.0 million and average deposits increased $82.4 million or 14.2% to $662.7 million from a year ago. In addition to strong organic growth during the second quarter, we completed our acquisition of IBT Bancorp, Inc. ("IBT"), the parent holding company of Independent Bank of Texas on July 1, 2015. As of June 30, 2015, IBT, on a consolidated basis, reported total assets of $113.7 million, total loans of $89.7 million and total deposits of $98.4 million."

Mr. Holland continued, "We continue to see good organic growth and we had solid loan demand through the second quarter. We expect stronger loan growth in the third quarter as we believe that we are on pace to increase average loans by at least $30 million over second quarter average loans, excluding growth from the acquisition of IBT. While our deposits grew at a slower rate during the second quarter, we anticipate more robust growth in deposits in the third quarter as a result of our continued focus on developing deep deposit relationships within our market. Our credit metrics remain strong, demonstrating the quality of our loan portfolio. As noted in past quarters, we expect pressure on pricing of new loans, however we believe our net interest margin will hold within the range we have seen over the past several quarters."

Mr. Holland noted, "The IBT acquisition leaves us well positioned to grow income, increase profitability and serve our customers even better than before. I am excited about our future, including our ability to continue our organic growth and to identify opportunities to execute a disciplined M&A strategy."

Second Quarter 2015 Highlights

  • Total loans increased $103.9 million or 19.2% year-over-year to $644.9 million as of June 30, 2015.
  • Deposits increased $61.9 million or 10.1% year-over-year to $673.1 million as of June 30, 2015.
  • Net income from operations increased $907,000 or 48.4% from second quarter 2014 with net interest income after provision for loan losses increasing $1.1 million or 19.8%.
  • Noninterest expense (excluding acquisition expenses) for the second quarter 2015 was $4.7 million, an increase of $255,000 or 5.7% from the same period in 2014.
  • Continued strong asset quality with nonperforming assets to total assets of 0.10%, net recoveries to average loans outstanding of 0.01% and other real estate owned of $548,000 as of and for the quarter ended June 30, 2015.

Results of operations for the three months ended June 30, 2015

For the three months ended June 30, 2015, net income was $1.9 million and net income available to common stockholders was $1.8 million compared to net income and net income available to common stockholders of $1.8 million for the three months ended March 31, 2015 and $1.2 million for the three months ended June 30, 2014. Diluted earnings per common share was $0.19 for the three months ended June 30, 2015 and March 31, 2015, compared to $0.18 for the three months ended June 30, 2014.

Return on average assets ("ROA") and return on average common equity ("ROE") for the three months ended June 30, 2015 were 0.93% and 6.39%, respectively, compared to 0.94% and 6.45% for the three months ended March 31, 2015, and 0.71% and 6.49% for the three months ended June 30, 2014. The slight decline in ROA compared to the three months ended March 31, 2015 was primarily due to a decline in the yield on interest-bearing assets to 4.19% from 4.24% for the three months ended March 31, 2015. This reduction was due to competitive pricing on new loans which resulted in lower loan yields as a result of this pricing pressure. The increase in ROA from June 30, 2014 was the result of year-over-year growth in net income from new clients, expansion of existing client relationships, continued improvement in credit quality, and gains in efficiencies from our operating platform.

The efficiency ratio, defined as noninterest expense divided by the sum of net interest income and noninterest income, was 61.75% for the three months ended June 30, 2015 compared to 66.67% and 65.98% for the three months ended March 31, 2015 and June 30, 2014, respectively. Excluding acquisition related expenses, the efficiency ratio was 61.55% for the three months ended June 30, 2015 and 64.08% for the three months ended March 31, 2015. The overall decrease in the efficiency ratio, excluding acquisition expense, from March 31, 2015 and June 30, 2014 was the result of growing income from loans and other customer related income streams at a faster rate than growth in operating expenses.

For the three months ended June 30, 2015, net interest income before provision for loan losses was $7.0 million and net interest margin was 3.77% compared to $6.9 million and 3.82% for the three months ended March 31, 2015 and $6.1 million and 3.92% for the three months ended June 30, 2014. The net interest margin decreased 0.05% from the three months ended March 31, 2015 primarily due to a decline of 0.07% in average yield on loans from 4.85% for the three months ended March 31, 2015 to 4.78% for the three months ended June 30, 2015. Competitive pricing pressure resulted in overall market yields for loan originations and renewals below the average yield of amortizing or paid-off loans. The average rate paid on interest-bearing liabilities was relatively flat at 0.70% for the three months ended June 30, 2015 compared to 0.71% for the three months ended March 31, 2015.

The net interest margin declined 0.15% from the same period in 2014 primarily due to a decline of 0.27% in average yield on loans from 5.05% for the three months ended June 30, 2014. Competitive pricing pressure resulted in overall market yields for loan originations and renewals below the average yield of amortizing or paid-off loans. Partially offsetting the decrease in net interest margin was a 0.03% decrease in the rate paid on interest-bearing liabilities from 0.73% to 0.70% for the three months ended June 30, 2014 and June 30, 2015, respectively. The decrease was related to a change in mix of deposits from certificates of deposits with average rate paid of 1.11% to money market accounts with average rate paid of 0.61%.

Noninterest income for the three months ended June 30, 2015 was $688,000, a decrease of $78,000 or 10.2% compared to the three months ended March 31, 2015 and an increase of $48,000 or 7.5% compared to the three months ended June 30, 2014. The decrease from the three months ended March 31, 2015 was driven by a decline in mortgage production and corresponding decrease in gains on loans held for sale. This decrease was partially offset by dividend income from the bi-annual Federal Reserve Bank stock dividends received in June 2015. The increase from the three months ended June 30, 2014 was primarily related to the increase in revenue from bank owned life insurance and an increase in service charges on deposit accounts.

Noninterest expense was $4.7 million for the three months ended June 30, 2015 compared to $5.1 million for the three months ended March 31, 2015 and $4.5 million for the three months ended June 30, 2014, a decrease of $352,000 or 6.9% and an increase of $270,000 or 6.1%, respectively. Noninterest expense included $15,000 and $197,000 of acquisition expenses for the three months ended June 30, 2015 and March 31, 2015, respectively, related to the preparation and execution of the definitive agreement to acquire IBT on March 9, 2015. Excluding acquisition related expenses, noninterest expense for the three months ended June 30, 2015 was $4.7 million compared to $4.9 million, a decrease of $170,000 or 3.5% from the three months ended March 31, 2015. The decrease was primarily due to reduced professional service fees and other public company-related annual reporting costs and decreased employee expense primarily related to seasonal payroll taxes. The increase from the three months ended June 30, 2014 was primarily an increase in employee expense of $392,000 related to annual merit increases, seasonal payroll taxes, and stock grant expense and was partially offset by the absence of initial public offering costs.

Income tax expense for the three months ended June 30, 2015 totaled $926,000, an increase of $319,000 or 52.6% from $607,000 for the three months ended March 31, 2015 and an increase of $249,000 or 36.8% compared to $677,000 for the three months ended June 30, 2014. The increase from the three months ended March 31, 2015 was primarily related 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 recognized during that period and an increase of $351,000 in taxable income for the three months ended June 30, 2015. The increase from the three months ended June 30, 2014 was primarily attributable to the $907,000 increase in net operating income from $1.9 million. The Company's estimated annual effective tax rate, before reporting the net impact of discrete items, was approximately 33.3%, 32.6% and 36.1% for the three months ended June 30, 2015, March 31, 2015 and June 30 2014, respectively.

Financial Condition

Loans (excluding loans held for sale and deferred loan fees) at June 30, 2015 were $644.9 million, an increase of $29.4 million or 4.8% compared to $615.5 million at March 31, 2015, and an increase of $103.9 million or 19.2% compared to $541.0 million at June 30, 2014. This increase was primarily due to strong organic growth and successful execution of our relationship banking strategy.

Deposits at June 30, 2015 were $673.1 million compared to $668.3 million at March 31, 2015, and $611.2 million at June 30, 2014. Deposits increased $4.8 million or 0.7% from March 31, 2015 primarily due to growth in money market and interest-bearing checking account balances. Deposits increased $61.9 million or 10.1% from June 30, 2014 primarily due to growth in money market deposits. Noninterest-bearing deposits were $240.9 million at June 30, 2015, $241.7 million at March 31, 2015 and $236.2 at June 30, 2014. Noninterest-bearing deposits were flat to prior quarter and increased $4.7 million or 2.0% compared to June 30, 2014.

Advances from the Federal Home Loan Bank increased to $27.0 million at June 30, 2015 compared to $15.0 million at March 31, 2015 and $15.0 million at June 30, 2014. The increase in advances compared to March 31, 2015 was due to overnight borrowings related to short term liquidity needs.

Asset Quality

Nonperforming assets totaled $860,000 or 0.10% of total assets at June 30, 2015 compared to $941,000 or 0.12% at March 31, 2015 and $3 million or 0.42% of total assets at June 30, 2014. The allowance for loan losses was 0.96% of total loans at June 30, 2015 compared to 0.98% of total loans at March 31, 2015 and 1.02% of total loans at June 30, 2014.

Other real estate owned totaled $548,000 at June 30, 2015 and at March 31, 2015 and $2.5 million at June 30, 2014. The decrease in other real estate owned from June 30, 2014 was due to the sale of three properties from June 30, 2014 to June 30, 2015. Nonaccrual loans were $312,000 at June 30, 2015 compared to $323,000 at March 31, 2015 and $107,000 at June 30, 2014.

The provision for loan losses for the three months ended June 30, 2015 was $148,000 compared to $110,000 and $425,000 for the three months ended March 31, 2015 and June 30, 2014, respectively. While the growth in the loan portfolio drove an increase in general provision requirements over March 31, 2015 levels, offsetting reductions from the continued improvement in credit quality drove down overall provision requirements.

Non-GAAP Financial Measures

Certain financial measures we use to evaluate our performance and discuss in this release are identified as being "non-GAAP financial measures." In accordance with the SEC's rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles as in effect from time to time in the United States in our statements of income, balance sheet or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.

The non-GAAP financial measures that we discuss in this release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this release may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures we have discussed in this release when comparing such non-GAAP financial measures.

Tangible book value per common share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as stockholders' equity less preferred stock, goodwill and core deposit intangibles and other intangible assets, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by shares of common stock outstanding. For tangible book value per common share, the most directly comparable financial measure calculated in accordance with GAAP is our book value per common share.

We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate tangible common equity as described above, and : tangible assets as total assets less goodwill and core deposit intangibles and other intangible assets, net of accumulated amortization. For common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total common stockholders' equity to total assets.

We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, each exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total stockholders' equity and assets while not increasing our tangible common equity or tangible assets.

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 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.

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 merger 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 our performance goals. 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)
At and For the Three Months Ended
June 30, March 31, December 31, September 30, June 30,
2015 2015 2014 2014 2014
(Dollars in thousands, except per share data)
Selected Financial Data:
Net income $1,856 $1,824 $1,690 $1,359 $1,198
Net income (loss) available to common stockholders 1,836 1,804 1,670 1,339 1,178
Total assets 827,140 808,906 802,286 745,344 710,382
Total loans(1) 644,938 615,495 603,310 581,338 540,990
Allowance for loan losses 6,193 6,006 5,981 5,880 5,516
Noninterest-bearing deposits 240,919 241,732 251,124 242,688 236,198
Total deposits 673,106 668,255 638,743 644,543 611,174
Total stockholders' equity 117,085 115,133 113,312 75,603 74,244
Summary Performance Ratios:
Return on average assets(2) 0.93% 0.94% 0.86% 0.74% 0.71%
Return on average equity(2) 6.39 6.45 6.21 7.16 6.49
Net interest margin(3) 3.77 3.82 3.74 3.95 3.92
Efficiency ratio(4) 61.75 66.67 62.49 65.87 65.98
Noninterest expense to average assets(2) 2.36 2.61 2.38 2.63 2.70
Summary Credit Quality Data:
Nonaccrual loans $312 $323 $436 $445 $107
Accruing loans 90 or more days past due 3 390
Other real estate owned 548 548 105 1,434 2,494
Nonperforming assets to total assets 0.10% 0.12% 0.07% 0.25% 0.42%
Nonperforming loans to total loans 0.05 0.05 0.07 0.08 0.09
Allowance for loan losses to total loans 0.96 0.98 0.99 1.01 1.02
Net (recoveries) charge-offs to average loans outstanding (0.01) 0.01 0.04 0.01 0.02
Capital Ratios:
Total stockholders' equity to total assets 14.16% 14.23% 14.11% 10.14% 10.45%
Tangible common equity to tangible assets(5) 11.01 11.01 10.86 6.50 6.62
Tier 1 capital to average assets 12.82 12.78 12.66 8.28 8.66
Tier 1 capital to risk-weighted assets 14.87 15.43 15.45 10.04 10.44
Common equity tier 1 (to risk weighted assets) 13.23 13.70 n/a n/a n/a
Total capital to risk-weighted assets 16.52 17.16 17.21 11.90 12.35
(1) Total loans does not include loans held for sale and deferred fees. Loans held for sale were $2.1 million at June 30, 2015, $2.5 million at March 31, 2015, $8.9 million at December 31, 2014, $3.5 million at September 30, 2014 and $6.3 million at June 30, 2014. Deferred loan fees were $49,000 at June 30, 2015, $50,000 at March 31, 2015, $51,000 at December 31, 2014, $60,000 at September 30, 2014 and $71,000 at June 30, 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).
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
June 30, March 31, December 31, June 30,
2015 2015 2014 2014
ASSETS
Cash and due from banks $11,699 $9,338 $9,223 $10,038
Interest bearing deposits in other banks 51,570 76,206 84,028 56,512
Total cash and cash equivalents 63,269 85,544 93,251 66,550
Investment securities 59,299 53,391 45,127 50,547
Loans held for sale 2,127 2,508 8,858 6,342
Loans, net 638,696 609,439 597,278 535,403
Accrued interest receivable 1,557 1,539 1,542 1,359
Bank-owned life insurance 18,115 17,969 17,822 10,647
Bank premises, furniture and equipment, net 12,107 11,526 11,150 11,303
Non-marketable equity securities 3,970 3,136 4,139 2,959
Investment in unconsolidated subsidiary 93 93 93 93
Other real estate owned 548 548 105 2,494
Intangible assets 1,110 1,186 1,261 1,413
Goodwill 19,148 19,148 19,148 19,148
Other assets 7,101 2,879 2,512 2,124
Total assets $827,140 $808,906 $802,286 $710,382
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $240,919 $241,732 $251,124 $236,198
Interest-bearing 432,187 426,523 387,619 374,976
Total deposits 673,106 668,255 638,743 611,174
Accounts payable and accrued expenses 1,202 1,049 1,582 1,195
Accrued interest payable and other liabilities 672 1,395 575 696
Advances from Federal Home Loan Bank 27,000 15,000 40,000 15,000
Junior subordinated debentures 3,093 3,093 3,093 3,093
Subordinated notes 4,982 4,981 4,981 4,980
Total liabilities 710,055 693,773 688,974 636,138
Commitments and contingencies
Stockholders' equity:
Preferred stock 8,000 8,000 8,000 8,000
Common stock 95 95 95 64
Additional paid-in capital 97,761 97,480 97,469 61,419
Retained earnings 11,687 9,851 8,047 5,038
Unallocated Employee Stock Ownership Plan shares (406) (401) (401) (401)
Accumulated other comprehensive income 18 178 172 194
Treasury stock, 10,000 shares at cost (70) (70) (70) (70)
Total stockholders' equity 117,085 115,133 113,312 74,244
Total liabilities and stockholders' equity $827,140 $808,906 $802,286 $710,382
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except share amounts)
Six Months Ended
June 30, June 30,
2015 2014
Interest income:
Interest and fees on loans $14,802 $12,718
Interest on investment securities 464 422
Interest on deposits in other banks 109 77
Interest on other 1 1
Total interest income 15,376 13,218
Interest expense:
Interest on deposit accounts 1,297 1,161
Interest on borrowings 249 251
Total interest expense 1,546 1,412
Net interest income 13,830 11,806
Provision for loan losses 258 677
Net interest income after provision for loan losses 13,572 11,129
Noninterest income:
Service charges on deposit accounts 401 396
Gain on sales of investment securities 7 34
Gain on sales of loans held for sale 431 245
(Loss) gain on sales of other real estate owned (2) 37
Bank-owned life insurance 358 212
Other 259 287
Total noninterest income 1,454 1,211
Noninterest expense:
Salaries and employee benefits 5,246 4,838
Occupancy of bank premises 1,000 920
Depreciation and amortization 645 667
Data processing 442 426
FDIC assessment fees 196 217
Legal fees 286 59
Other professional fees 470 543
Advertising and promotions 120 93
Utilities and telephone 148 141
Other real estate owned expenses and write-downs 34 134
Other 1,226 956
Total noninterest expense 9,813 8,994
Net income from operations 5,213 3,346
Income tax expense 1,533 1,190
Net income $3,680 $2,156
Preferred stock dividends $40 $40
Net income available to common stockholders $3,640 $2,116
Basic earnings per share $0.39 $0.34
Diluted earnings per share $0.38 $0.33
Weighted average basic shares outstanding 9,447,807 6,231,031
Weighted average diluted shares outstanding 9,703,510 6,359,031
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except share amounts)
Three Months Ended
June 30, March 31, December 31, September 30, June 30,
2015 2015 2014 2014 2014
Interest income:
Interest and fees on loans $7,454 $7,348 $7,335 $7,183 $6,566
Interest on investment securities 252 212 209 207 206
Interest on deposits in other banks 55 54 63 43 40
Interest on other 1 1
Total interest income 7,761 7,614 7,607 7,434 6,813
Interest expense:
Interest on deposit accounts 666 631 652 609 570
Interest on borrowings 123 126 123 123 123
Total interest expense 789 757 775 732 693
Net interest income 6,972 6,857 6,832 6,702 6,120
Provision for loan losses 148 110 326 420 425
Net interest income after provision for loan losses 6,824 6,747 6,506 6,282 5,695
Noninterest income:
Service charges on deposit accounts 216 185 223 213 190
Gain on sales of investment securities 7
Gain on sales of loans held for sale 129 302 155 241 168
(Loss) gain on sales of other real estate owned (2) 6 (33) 24
Bank-owned life insurance 180 178 111 105 103
Other 163 96 161 104 155
Total noninterest income 688 766 656 630 640
Noninterest expense:
Salaries and employee benefits 2,588 2,657 2,444 2,755 2,196
Occupancy of bank premises 474 526 445 497 474
Depreciation and amortization 320 325 334 338 334
Data processing 222 220 242 213 210
FDIC assessment fees 96 100 105 99 109
Legal fees 85 201 16 50 26
Other professional fees 233 237 279 222 411
Advertising and promotions 47 73 52 41 37
Utilities and telephone 74 73 73 72 72
Other real estate owned expenses and write-downs 22 13 24 53 108
Other 569 657 665 490 483
Total noninterest expense 4,730 5,082 4,679 4,830 4,460
Net income from operations 2,782 2,431 2,483 2,082 1,875
Income tax expense 926 607 793 723 677
Net income $1,856 $1,824 $1,690 $1,359 $1,198
Preferred stock dividends $20 $20 $20 $20 $20
Net income available to common stockholders $1,836 $1,804 $1,670 $1,339 $1,178
Basic earnings per share $0.19 $0.19 $0.18 $0.21 $0.19
Diluted earnings per share $0.19 $0.19 $0.18 $0.21 $0.18
Weighted average basic shares outstanding 9,447,807 9,447,706 9,157,582 6,321,897 6,321,193
Weighted average diluted shares outstanding 9,708,673 9,743,576 9,405,168 6,462,897 6,452,656
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation GAAP — NON GAAP (Unaudited)
(In thousands)
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,
2015 2015 2014 2014 2014
Tangible Common Equity
Total stockholders' equity $117,085 $115,133 $113,312 $75,603 $74,244
Adjustments:
Preferred stock (8,000) (8,000) (8,000) (8,000) (8,000)
Goodwill (19,148) (19,148) (19,148) (19,148) (19,148)
Intangible assets (1,110) (1,186) (1,261) (1,337) (1,413)
Total tangible common equity $88,827 $86,799 $84,903 $47,118 $45,683
Tangible Assets
Total assets $827,140 $808,906 $802,286 $745,344 $710,382
Adjustments:
Goodwill (19,148) (19,148) (19,148) (19,148) (19,148)
Intangible assets (1,110) (1,186) (1,261) (1,337) (1,413)
Total tangible assets $806,882 $788,572 $781,877 $724,859 $689,821
Tangible Common Equity to Tangible Assets 11.01% 11.01% 10.86% 6.50% 6.62%
Common shares outstanding 9,494 9,485 9,471 6,359 6,359
Book value per common share(1) $11.49 $11.29 $11.12 $10.63 $10.42
Tangible book value per common share(2) $9.36 $9.15 $8.96 $7.41 $7.18
(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
Net Interest Margin (Unaudited)
(In thousands)
For the Three Months Ended
June 30, 2015 March 31, 2015 June 30, 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
Asset
Interest-earning assets:
Total loans(1) $624,971 $7,454 4.78% $613,840 $7,348 4.85% $521,218 $6,566 5.05%
Securities available for sale 56,603 252 1.79 49,242 212 1.75 51,637 206 1.60
Investment in subsidiary 93 93 93 1 4.31
Interest-earning deposits in financial institutions 60,630 55 0.36 65,221 54 0.34 52,610 40 0.30
Total interest-earning assets 742,297 7,761 4.19 728,396 7,614 4.24 625,558 6,813 4.37
Allowance for loan losses (6,069) (6,013) (5,275)
Noninterest-earning assets 68,046 67,233 58,609
Total assets $804,274 $789,616 $678,892
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits $428,146 $666 0.62% $408,926 $631 0.63% $356,821 $570 0.64%
Advances from FHLB 15,132 30 0.80 16,878 32 0.77 15,000 30 0.80
Other borrowings 8,077 93 4.62 8,394 94 4.54 8,072 93 4.62
Total interest-bearing liabilities 451,355 789 0.70 434,198 757 0.71 379,893 693 0.73
Noninterest-bearing liabilities:
Noninterest-bearing deposits 234,510 238,994 223,473
Other liabilities 1,974 1,820 1,556
Total noninterest-bearing liabilities 236,484 240,814 225,029
Stockholders' equity 116,435 114,604 73,970
Total liabilities and stockholders' equity $804,274 $789,616 $678,892
Net interest rate spread(2) 3.49% 3.53% 3.64%
Net interest income $6,972 $6,857 $6,120
Net interest margin(3) 3.77% 3.82% 3.92%
(1) Includes average outstanding balances of loans held for sale of $1,429, $4,420 and $3,653 for the three months ended June 30, 2015, March 31, 2015, and June 30, 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.

CONTACT: Media Contact: LaVonda Renfro 972-349-6200 lrenfro@veritexbank.com Investor Relations: 972-349-6200 scaudle@veritexbank.comSource:Veritex Holdings, Inc.