Veritex Holdings, Inc. Reports Fourth Quarter and Record Year-End 2018 Results, Initiates Dividend and Announces Stock Buyback Program

January 28, 2019

DALLAS, Jan. 28, 2019 (GLOBE NEWSWIRE) — Veritex Holdings, Inc. (“Veritex” or the “Company”) (Nasdaq: VBTX), the holding company for Veritex Community Bank, today announced the results for the fourth quarter and full year of 2018. Net income available to common stockholders was $9.8 million, or $0.40 diluted earnings per share (“EPS”), compared to $8.9 million, or $0.36 diluted EPS, for the quarter ended September 30, 2018 and $3.3 million, or $0.14 diluted EPS, for the quarter ended December 31, 2017. The fourth quarter and full year of 2018 results do not include the financial results of Green Bancorp, Inc. (“Green”), which was merged with and into the Company on January 1, 2019. Green’s results as a separate company for the fourth quarter and full year of 2018 are presented separately in this release.

Fourth Quarter 2018 Financial Highlights:

Diluted EPS was $0.40 and diluted operating EPS was $0.47 for the fourth quarter of 2018

Total loans increased $110.8 million, or 18.12% annualized during the fourth quarter of 2018

NIM expanded to 3.82%¹ for the fourth quarter 2018 compared to 3.73%¹ for the third quarter of 2018 excluding cash collections in excess of expected cash flows on purchased credit impaired (“PCI”) loans

Announced initiation of a regular quarterly cash dividend of $0.125

Announced stock buyback program to purchase up to $50.0 million during 2019 of our outstanding common stock

	Veritex						Green
	Q4 2018			Q3 2018			Q4 2018			Q3 2018
	(Dollars in thousands)
GAAP
Net income available to common stockholders	$	9,825		$	8,935		$	15,327		$	15,597
Diluted EPS	0.40			0.36			0.41			0.41
Return on average assets²	1.20		%	1.10		%	1.37		%	1.42		%
Efficiency ratio	54.27			57.58			50.52			53.64
Net loan growth^{2, 4}	18.12			4.40			4.06			17.83
Book value per common share	$	21.88		$	21.38		$	13.66		$	13.12
Non-GAAP³
Operating net income available to common stockholders	$	11,457		$	10,401		$	16,559		$	18,552
Diluted operating EPS	0.47			0.42			0.44			0.49
Operating return on average assets²	1.40		%	1.28		%	1.49		%	1.69		%
Operating efficiency ratio	50.65			49.09			47.77			47.07
Return on average tangible common equity²	12.12			11.41			15.20			16.01
Operating return on average tangible common equity²	13.99			13.14			16.40			19.00
Tangible book value per common share	$	14.57		$	14.02		$	11.18		$	10.63

¹Excludes $354 thousand and $2.0 million of cash collections in excess of expected cash flows on PCI loans for the quarters ended December 31, 2018 and September 30, 2018, respectively. Including the cash collections in excess of expected cash flows NIM was 3.87% and 4.00% for the quarters ended December 31, 2018 and September 30, 2018, respectively.
²Annualized ratio.
³Refer to “Reconciliation of Non-GAAP Financial Measures” after the financial highlights of Veritex and Green, respectively, for a reconciliation of this non-GAAP financial measure to their most directly comparable GAAP measure.
⁴ Loan growth for Green includes $83.8 million of branch assets (loans) held for sale as of December 31, 2018

“2018 has been another transformational year for the Company and with the consummation of the merger with Green on January 1, 2019, Veritex became one of the 10 largest banks headquartered in Texas,” said C. Malcolm Holland, Chairman and Chief Executive Officer of Veritex. “This strategic merger provides Veritex with the growth opportunities, scale and footprint to continue to deliver excellent customer service and generate top-tier financial performance for our stockholders.” Holland continued, “Our integration planning is right on track including organizational design, system selection, product mapping and training. We are encouraged by the way employees of both companies have come together to work on the consolidation and the creation of a premier Texas community banking franchise. We continue to anticipate meaningful earnings accretion and efficiency as we realize the benefits of the merger.”

Discussion of Veritex Q4 Results

Result of Operations for the Three Months Ended December 31, 2018

Net Interest Income

For the three months ended December 31, 2018, net interest income before provision for loan losses was $28.3 million and net interest margin was 3.87% compared to $29.2 million and 4.00%, respectively, for the three months ended September 30, 2018. The $889 thousand decrease in net interest income and 13 basis point decrease in net interest margin was primarily due to an increase in the average rate paid on interest-bearing liabilities during the three months ended December 31, 2018 compared to the three months ended September 30, 2018. Average interest-bearing deposits grew to $2.0 billion for the three months ended December 31, 2018 from $1.9 billion for the three months ended September 30, 2018, primarily due to increases in average outstanding correspondent money market and brokered deposit account balances which have interest rates above the average rate paid on our other interest-bearing deposits. As a result, the average cost of interest-bearing deposits increased to 1.75% for the three months ended December 31, 2018 from 1.59% for the three months ended September 30, 2018.

Net interest income before provision for loan losses increased by $2.5 million from $25.8 million to $28.3 million and net interest margin decreased 37 basis points from 4.24% to 3.87% for the three months ended December 31, 2018 as compared to the same period in 2017. The increase in net interest income before provision for loan losses was primarily driven by loan growth of $110.8 million during the three months ended December 31, 2018. For the three months ended December 31, 2018, average loan balances increased by $471.5 million compared to the three months ended December 31, 2017, which resulted in a $6.8 million increase in interest income. This was partially offset by an increase in the average rate paid on interest-bearing liabilities discussed above, which resulted in a $5.1 million increase in interest expense on deposit accounts. Net interest margin decreased 37 basis points compared to the three months ended December 31, 2017 primarily due to an increase in the average rate paid on interest-bearing liabilities during the three months ended December 31, 2018. Average interest-bearing deposit accounts grew to $2.0 billion for the three months ended December 31, 2018 compared to $1.6 billion for the three months ended December 31, 2017, primarily due to increases in average outstanding correspondent money market and brokered deposit account balances which have interest rates above the average rate paid on our other interest-bearing deposits. As a result, the average cost of interest-bearing deposits increased to 1.75% for the three months ended December 31, 2018 from 0.93% for the three months ended December 31, 2017.

Noninterest Income

Noninterest income for the three months ended December 31, 2018 was $4.0 million, an increase of $1.5 million or 60.4% compared to the three months ended September 30, 2018. The increase was primarily due to a $1.6 million increase in the gain on sale of Small Business Administration (“SBA”) loans for the three months ended December 31, 2018.

Compared to the three months ended December 31, 2017, noninterest income for the three months ended December 31, 2018 grew $1.7 million or 75.2%. The increase was primarily due to a $1.3 million increase in the gain on sale of SBA loans and a $171 thousand increase in rental income resulting from the purchase of our headquarter building on December 6, 2017.

Noninterest Expense

Noninterest expense was $17.5 million for the three months ended December 31, 2018, compared to $18.2 million for the three months ended September 30, 2018, a decrease of $708 thousand, or 3.9%. The decrease was primarily driven by a $1.5 million decrease in merger and acquisition expenses paid in connection with the merger with Green. The decrease was partially offset by a $884 thousand increase in salaries and employee benefits in the three months ended December 31, 2018 as compared to the three months ended September 30, 2018, primarily due to a $564 thousand decrease in amounts allocated or deferred as direct loan origination costs, which are required to be deferred in accordance with ASC 310-20 (formerly FAS91).

Compared to the three months ended December 31, 2017, noninterest expense for the three months ended December 31, 2018 increased $2.5 million, or 16.6%. The increase was primarily driven by a $1.1 million increase in professional and regulatory fees resulting from increased information technology professional support services and loan-related legal fees.The increase was also driven by a $921 thousand increase in salaries and employee benefit expenses compared to the three months ended December 31, 2017, primarily related to two additional months of salaries and employee benefit expenses for employees associated with Liberty Bancshares, Inc. (“Liberty”), which we acquired in a transaction that closed on December 1, 2017. Due to the acquisition of Liberty, one month of salaries and employee benefit expense related to Liberty employees were included for the three months ended December 31, 2017 compared to three months of expenses for the Liberty employees during the three months ended December 31, 2018.

Financial Condition

Total loans were $2.5 billion at December 31, 2018, an increase of $110.8 million, or 18.12% annualized, compared to September 30, 2018 and $322.4 million, or 14.4%, compared to December 31, 2017. The net increase was the result of the continued execution and success of our loan growth strategy.

Total deposits were $2.6 billion at December 31, 2018, a decrease of $33.8 million, or 1.3%, compared to September 30, 2018 and an increase of $343.8 million, or 15.1%, compared to December 31, 2017. The decrease from September 30, 2018 was primarily the result of a decrease of $35.5 million in non-interest bearing demand deposits, which was slightly offset by an increase of $2.6 million in interest bearing checking accounts. The increase from December 31, 2017 was primarily the result of an increase of $180.0 million and $204.2 million in correspondent money market accounts and brokered deposits, respectively.

Asset Quality

Allowance for loan losses as a percentage of loans was 0.75%, 0.73% and 0.57% of total loans held for investment at December 31, 2018, September 30, 2018 and December 31, 2017, respectively. The allowance for loan losses as a percentage of total loans for each of the three quarters ended was determined by an evaluation of the qualitative factors around the nature, volume and mix of the loan portfolio. The increase at December 31, 2018 in the allowance for loan losses as a percentage of loans from September 30, 2018 and December 31, 2017 was attributable to continued execution and success of our organic growth strategy, which was partially offset by payoffs of acquired loans and an increase in specific reserves on certain non-performing loans. We recorded a provision for loan losses of $1.4 million for the quarter ended December 31, 2018 compared to a provision of $3.1 million and $2.5 million for the quarter ended September 30, 2018 and December 31, 2017, respectively, which reflects adjustments to provision for loan losses as a result of our continued organic growth.

Nonperforming assets totaled $24.7 million, or 0.77%, of total assets at December 31, 2018 compared to $26.1 million, or 0.80%, of total assets at September 30, 2018 and $932 thousand, or 0.03%, of total assets at December 31, 2017. The decrease of $1.4 million compared to September 30, 2018 was primarily due to the renewal, during the fourth quarter of 2018, of a $3.8 million loan that was 90 days past due at September 30, 2018. The increase of $23.8 million in nonperforming assets compared to December 31, 2017 was primarily due to the placement of $17.2 million of PCI loans on non-accrual status as a result of information the Company obtained, that precluded the Company from reasonably estimating the timing and amount of future cash flows relating to these loans. Excluding these purchased credit impaired loans compared to December 31, 2017, the increase of $7.0 million in nonperforming assets was a result of an increase in nonperforming loans of $7.1 million, partially offset by a decrease in other real estate owned of $449 thousand.

Discussion of Green Q4 Results

Result of Operations for the Three Months Ended December 31, 2018

Net Interest Income

For the three months ended December 31, 2018, net interest income before provision for loan losses was $40.4 million and net interest margin was 3.82% compared to $39.5 million and 3.78%, respectively, for the three months ended September 30, 2018. The $927 thousand increase in net interest income and 4 basis point increase in net interest margin was primarily driven by continued total loan growth of $34.2 million during the three months ended December 31, 2018, which includes branch assets held for sale. For the three months ended December 31, 2018, average loan balances increased by $57.9 million compared to the three months ended September 30, 2018, which resulted in a $2.3 million increase in interest income. This was partially offset by an increase in the average rate paid on interest-bearing liabilities during the three months ended December 31, 2018. Average interest-bearing deposits grew $92.3 million for the three months ended December 31, 2018 to $2.7 billion from $2.6 billion for the three months ended September 30, 2018, primarily due to increases in average outstanding money market account balances and certificates of deposit. As a result, the average cost of interest-bearing deposits increased to 1.61% for the three months ended December 31, 2018 from 1.39% for the three months ended September 30, 2018.

Compared to the three months ended December 31, 2017, net interest income before provision for loan losses increased by $3.6 million from $36.8 million to $40.4 million and net interest margin increased 18 basis points from 3.64% to 3.82% for the three months ended December 31, 2018. The $3.6 million increase in net interest income and 18 basis point increase in net interest margin were primarily driven by continued loan growth as discussed above. For the three months ended December 31, 2018, average loan balances increased by $264.7 million compared to the three months ended December 31, 2017, which resulted in a $9.0 million increase in interest income. This was partially offset by an increase in the average rate paid on interest-bearing liabilities during the three months ended December 31, 2018. Average interest-bearing deposits decreased $4.1 million, and the average cost of interest-bearing deposits increased to 1.61%, for the three months ended December 31, 2018 compared to the three months ended December 31, 2017.

Noninterest Income

Noninterest income for the three months ended December 31, 2018 was $4.4 million, a decrease of $1.1 million, or 19.4%, compared to the three months ended September 30, 2018. The decrease was primarily due to a $624 thousand decrease in the gain on sale of guaranteed portion of loans and a $320 thousand decrease in loan fees.

Noninterest income for the three months ended December 31, 2018 was $4.4 million, an increase of $485 thousand or 12.3% compared to the three months ended December 31, 2017. The increase was primarily due to a $582 thousand increase in customer service fees and a $1.1 million decrease in net loss on held for sale loans. This increase was slightly offset by a $1.6 million decrease in gain on sale of guaranteed portion of loans.

Noninterest Expense

Noninterest expense was $22.7 million for the three months ended December 31, 2018, compared to $24.1 million for the three months ended September 30, 2018, a decrease of $1.4 million, or 6.1%. The decrease was primarily driven by a $1.7 million decrease in merger and acquisition expenses.

Compared to the three months ended December 31, 2017, noninterest expense for the three months ended December 31, 2018 decreased $919 thousand, or 3.9%. The decrease was primarily driven by a $1.2 million decrease in professional and regulatory fees, a $781 thousand decrease in salaries and employee benefits and a $445 thousand decrease in loan related expenses. This increase was slightly offset by a $1.2 million increase in merger and acquisition expenses.

Financial Condition

Total loans were $3.3 billion at December 31, 2018, a decrease of $50.0 million, or 1.5%, compared to September 30, 2018 and increased $123.3 million, or 3.9%, compared to December 31, 2017. Including $83.8 million of loans that are included in branch assets held for sale as of December 31, 2018, total loans increased $34.2 million, or 1.0%, compared to September 30, 2018 and increased $207.5 million, or 6.5%, compared to December 31, 2017. The net increase was the result of the continued execution and success of Green’s loan growth strategy.

Total deposits were $3.5 billion at December 31, 2018, an increase of $51.9 million, or 1.5%, compared to September 30, 2018 and an increase of $69.2 million, or 2.0%, compared to December 31, 2017. Including $52.3 million of deposits that are included in branch liabilities held for sale as of December 31, 2018, total deposits increased $104.1 million, or 3.0%, compared to September 30, 2018 and increased $121.5 million, or 3.6%, compared to December 31, 2017. The increase from September 30, 2018 was primarily the result of an increase of $102.9 million in interest-bearing transaction and savings deposits. The increase from December 31, 2017 was primarily the result of increases of $91.5 million and $37.0 million in time deposits and noninterest-bearing deposits, respectively.

Asset Quality

Allowance for loan losses as a percentage of loans was 0.98%, 1.05% and 0.98% of total loans held for investment at December 31, 2018, September 30, 2018 and December 31, 2017, respectively. The allowance for loan losses as a percentage of total loans for each of the three quarters ended was determined by loss migration analysis and a review of the qualitative factors and specific reserves for impaired loans. A provision for loan losses of $2.4 million was recorded for the quarter ended December 31, 2018 compared to provisions of $320 thousand and $4.4 million for the quarter ended September 30, 2018 and December 31, 2017, respectively, which is a result of the general provision required from continued organic growth. During the three months ended September 30, 2018, there was a $1.6 million reduction in the specific reserves for a syndicated health care credit, which offset the addition of general reserves due to loan growth. There was no corresponding reduction in specific reserves for the quarters ended December 31, 2018 and December 31, 2017.

Nonperforming assets totaled $61.0 million, or 1.38%, of total assets at December 31, 2018 compared to $72.5 million, or 1.64%, of total assets at September 30, 2018 and $71.6 million, or 1.68%, of total assets at December 31, 2017. The decrease was due to decreases in nonaccrual loans and real estate acquired through foreclosure.

Dividend Information

On January 28, 2019, Veritex’s Board of Directors declared a quarterly cash dividend of $0.125 per share on its outstanding shares of common stock, payable on February 21, 2019, to stockholders of record as of February 7, 2019.

Non-GAAP Financial Measures

The Company’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its operating performance and provide information that is important to investors. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. Specifically, the Company reviews and reports tangible book value per common share, tangible common equity to tangible assets, return on average tangible common equity, operating earnings, pre-tax, pre-provision operating earnings, diluted operating earnings per share, operating return on average assets, operating return on average tangible common equity and operating efficiency ratio. The Company has included in this earnings release information related to these non-GAAP financial measures for the applicable periods presented. Please refer to “Reconciliation of Non-GAAP Financial Measures” after the financial highlights for both Veritex and Green, respectively, at the end of this earnings release for a reconciliation of these non-GAAP financial measures.

Conference Call

The Company will host an investor conference call to review the results on Tuesday, January 29, 2019 at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/m6/p/r6d2ku78 and will receive a unique PIN number, which can be used when dialing in for the call. This will allow attendees to enter the call immediately. Alternatively, participants may call toll-free at (877) 703-9880.

The call and corresponding presentation slides will be webcast live on the home page of the Company’s website, www.veritexbank.com. An audio replay will be available one hour after the conclusion of the call at (855) 859-2056, Conference #6808679. This replay, as well as the webcast, will be available until February 5, 2019.

About Veritex Holdings, Inc.

Headquartered in Dallas, Texas, Veritex is a bank holding company that conducts banking activities through its wholly-owned subsidiary, Veritex Community Bank, with locations throughout the Dallas-Fort Worth metroplex and in the Houston 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.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on various facts and derived utilizing assumptions and current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements include, without limitation, statements relating to the impact Veritex expects its acquisition of Green to have on Veritex’s operations, financial condition, and financial results, and Veritex’s expectations about its ability to successfully integrate the combined businesses and the amount of cost savings and overall operational efficiencies Veritex expects to realize as a result of the acquisition. Forward-looking statements may also include statements about Veritex’s future financial performance, business and growth strategy, projected plans and objectives, as well as 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 words. Further, certain factors that could affect future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to, the possibility that the businesses of Veritex and Green will not be integrated successfully, that the cost savings and any synergies from the acquisition may not be fully realized or may take longer to realize than expected, disruption from the acquisition making it more difficult to maintain relationships with employees, customers or other parties with whom Veritex has (or Green had) business relationships, diversion of management time on integration-related issues, the reaction to the transaction of the companies’ customers, employees and counterparties and other factors, many of which are beyond the control of Veritex. We refer you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Veritex’s Annual Report on Form 10-K for the year ended December 31, 2017 and any updates to those risk factors set forth in Veritex’s Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the SEC, which are available on the SEC’s website at www.sec.gov. If one or more events related to these or other risks or uncertainties materialize, or if Veritex’s underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex anticipates. Accordingly, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. Veritex does not undertake any obligation, and specifically declines any obligation, to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. All forward-looking statements, expressed or implied, included in this earnings release are expressly qualified in their entirety by the cautionary statements contained or referred to herein.

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)

	For the Quarter Ended															For the Year Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Dec 31, 2018			Dec 31, 2017

	(Dollars and shares in thousands)
Per Share Data (Common Stock):
Basic EPS	$	0.41		$	0.37		$	0.42		$	0.43		$	0.14		$	1.63		$	0.82
Diluted EPS	0.40			0.36			0.42			0.42			0.14			1.60			0.80
Book value per common share	21.88			21.38			21.03			20.60			20.28			21.88			20.28
Tangible book value per common share¹	14.57			14.02			13.63			13.14			12.75			14.57			12.75

Common Stock Data:
Shares outstanding at period end	24,251			24,192			24,181			24,149			24,110			24,251			24,110
Weighted average basic shares outstanding for the period	24,224			24,176			24,148			24,120			23,124			24,169			18,404
Weighted average diluted shares outstanding for the period	24,532			24,613			24,546			24,539			23,524			24,590			18,810

Summary Performance Ratios:
Return on average assets²	1.20		%	1.10		%	1.34		%	1.41		%	0.48		%	1.26		%	0.76		%
Pre-tax, pre-provision operating return on average assets^{1, 2}	1.95			1.98			2.03			2.14			2.07			2.02			1.81
Return on average equity²	7.44			6.88			8.11			8.55			2.78			7.73			4.54
Return on average tangible common equity^{1, 2}	12.12			11.41			13.53			14.70			4.93			12.89			6.27
Efficiency ratio	54.27			57.58			53.51			54.28			53.60			54.92			56.24

Selected Performance Metrics – Operating:
Diluted operating EPS¹	$	0.47		$	0.42		$	0.46		$	0.50		$	0.31		$	1.84		$	1.08
Operating return on average assets^{1, 2}	1.40		%	1.28		%	1.47		%	1.65		%	1.09		%	1.45		%	1.03		%
Operating return on average tangible common equity^{1, 2}	13.99			13.14			14.82			16.99			10.26			14.68			8.32
Operating efficiency ratio¹	50.65			49.09			48.67			49.94			49.98			49.60			52.70

Veritex Holdings, Inc. Capital Ratios:
Average stockholders’ equity to average total assets	16.14		%	15.92		%	16.48		%	16.48		%	17.26		%	16.25		%	16.81		%
Tier 1 capital to average assets (leverage)	12.04			11.74			12.08			11.84			12.92			12.04			12.92
Common equity tier 1 capital	11.80			12.02			12.17			12.04			12.03			11.80			12.03
Tier 1 capital to risk-weighted assets	12.18			12.43			12.60			12.48			12.48			12.18			12.48
Total capital to risk-weighted assets	12.98			13.22			13.31			13.17			13.16			12.98			13.16
Tangible common equity to tangible assets¹	11.66			10.95			11.15			11.01			11.12			11.66			11.12

Veritex Bank Capital Ratios:
Tier 1 capital to average assets (leverage)	10.87		%	10.53		%	10.70		%	10.39		%	11.28		%	10.87		%	11.28		%
Common equity tier 1 capital	11.01		%	11.13		%	11.16		%	10.94		%	10.88		%	11.01		%	10.88		%
Tier 1 capital to risk-weighted assets	11.01		%	11.13		%	11.16		%	10.94		%	10.88		%	11.01		%	10.88		%
Total capital to risk-weighted assets	11.64		%	11.75		%	11.70		%	11.45		%	11.37		%	11.64		%	11.37		%

¹Refer to “Reconciliation of Non-GAAP Financial Measures” after the financial highlights of Veritex and Green, respectively, for a reconciliation of this non-GAAP financial measure to their most directly comparable GAAP measure.
²Annualized ratio.

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights

	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
	(Dollars in thousands)
Period End Balance Sheet Data:
Cash and cash equivalents	$	84,449		$	261,790		$	146,740		$	195,194		$	149,044
Investment securities	262,695			256,237			252,187			243,164			228,117

Loans held for sale	1,258			1,425			453			893			841
Loans held for investment	2,555,494			2,444,499			2,418,886			2,316,065			2,233,490
Total Loans	2,556,752			2,445,924			2,419,339			2,316,958			2,234,331
Allowance for loan losses	(19,255		)	(17,909		)	(14,842		)	(13,401		)	(12,808		)
Accrued interest receivable	8,828			8,291			8,137			7,127			7,676
Bank-owned life insurance	22,064			21,915			21,767			21,620			21,476
Bank premises, furniture and equipment, net	78,409			77,346			76,348			76,045			75,251
Non-marketable equity securities	22,822			27,417			27,086			20,806			13,732
Investment in unconsolidated subsidiary	352			352			352			352			352
Other real estate owned	—			—			—			10			449
Intangible assets, net	15,896			16,603			17,482			18,372			20,441
Goodwill	161,447			161,447			161,447			161,685			159,452
Other assets	14,091			16,433			15,831			13,634			14,518
Branch assets held for sale	—			—			1,753			1,753			33,552
Total assets	$	3,208,550		$	3,275,846		$	3,133,627		$	3,063,319		$	2,945,583

Noninterest-bearing deposits	$	626,283		$	661,754		$	611,315		$	597,236		$	612,830
Interest-bearing transaction and savings deposits	1,313,161			1,346,264			1,252,774			1,354,757			1,200,487
Certificates and other time deposits	682,984			648,236			626,329			541,801			465,313
Total deposits	2,622,428			2,656,254			2,490,418			2,493,794			2,278,630
Accounts payable and accrued expenses	5,413			6,875			4,130			3,862			5,098
Accrued interest payable and other liabilities	5,361			5,759			5,856			3,412			5,446
Advances from Federal Home Loan Bank	28,019			73,055			108,092			48,128			71,164
Subordinated debentures and subordinated notes	16,691			16,691			16,690			16,690			16,689
Other borrowings	—			—			—			—			15,000
Branch liabilities held for sale	—			—			—			—			64,627
Total liabilities	2,677,912			2,758,634			2,625,186			2,565,886			2,456,654
Stockholders’ equity	530,638			517,212			508,441			497,433			488,929
Total liabilities and stockholders’ equity	$	3,208,550		$	3,275,846		$	3,133,627		$	3,063,319		$	2,945,583

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)

	For the Quarter Ended												For the Year Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Dec 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Interest income:
Loans, including fees	$	35,028		$	35,074		$	32,291	$	32,067	$	28,182	$	134,460		$	73,795
Investment securities	1,908			1,722			1,647		1,328		1,211		6,605			3,462
Deposits in other banks	833			1,016			613		687		500		3,149			2,287
Other investments	5			6			4		5		4		20			8
Total interest income	37,774			37,818			34,555		34,087		29,897		144,234			79,552
Interest expense:
Transaction and savings deposits	5,412			4,694			4,204		3,289		2,397		17,599			8,981
Certificates and other time deposits	3,394			3,068			2,248		1,004		1,280		9,714			897
Advances from FHLB	377			630			234		460		213		1,701			531
Subordinated debentures and subordinated notes	304			250			245		232		257		1,031			635
Total interest expense	9,487			8,642			6,931		4,985		4,147		30,045			11,044
Net interest income	28,287			29,176			27,624		29,102		25,750		114,189			68,508
Provision for loan losses	1,364			3,057			1,504		678		2,529		6,603			5,114
Net interest income after provision for loan losses	26,923			26,119			26,120		28,424		23,221		107,586			63,394
Noninterest income:
Service charges and fees on deposit accounts	832			809			846		933		769		3,420			2,502
Loan fees	387			410			261		274		206		1,332			657
(Loss) gain on sales of investment securities, net	(42		)	(34		)	4		8		17		(64		)	222
Gain on sales of loans and other assets owned	1,789			270			416		581		882		3,056			3,141
Rental income	310			414			452		478		139		1,654			139
Other	751			641			613		507		285		2,512			915
Total noninterest income	4,027			2,510			2,592		2,781		2,298		11,910			7,576
Noninterest expense:
Salaries and employee benefits	8,278			7,394			7,657		7,809		7,357		31,138			20,828
Occupancy and equipment	2,412			2,890			2,143		3,234		1,996		10,679			5,618
Professional and regulatory fees	1,889			1,893			1,528		1,972		811		7,282			4,158
Data processing and software expense	888			697			689		746		766		3,020			2,217
Marketing	570			306			446		461		388		1,783			1,293
Amortization of intangibles	835			798			856		978		551		3,467			964
Telephone and communications	223			236			414		426		282		1,299			720
Merger and acquisition expenses	1,150			2,692			1,043		335		1,018		5,220			2,691
Other	1,293			1,340			1,393		1,345		1,866		5,371			4,300
Total noninterest expense	17,538			18,246			16,169		17,306		15,035		69,259			42,789
Net income from operations	13,412			10,383			12,543		13,899		10,484		50,237			28,181
Income tax expense	3,587			1,448			2,350		3,511		7,227		10,896			13,029
Net income	9,825			8,935			10,193		10,388		3,257		39,341			15,152
Preferred stock dividends	—			—			—		—		—		—			42
Net income available to common stockholders	$	9,825		$	8,935		$	10,193	$	10,388	$	3,257	$	39,341		$	15,110

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)

	For the Quarter Ended
	December 31, 2018							September 30, 2018							December 31, 2017
	Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate

	(Dollars in thousands)
Assets
Interest-earning assets:
Loans¹	$	2,502,084		$	35,028	5.55	%	$	2,432,095		$	35,074	5.72	%	$	2,030,587		$	28,182	5.51	%
Investment securities	263,182			1,908		2.88		254,242			1,722		2.69		233,244			1,211		2.06
Interest-earning deposits in financial institutions	136,879			833		2.41		203,750			1,016		1.98		145,099			500		1.37
Other investments	352			5		5.64		352			6		6.76		352			4		4.51
Total interest-earning assets	2,902,497			37,774		5.16		2,890,439			37,818		5.19		2,409,282			29,897		4.92
Allowance for loan losses	(18,338		)					(16,160		)					(10,658		)
Noninterest-earning assets	359,009							358,935							292,664
Total assets	$	3,243,168						$	3,233,214						$	2,691,288

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	1,337,901		5,412		1.60	%	$	1,278,798		$	4,694	1.46	%	$	1,091,711		2,397		0.87	%
Certificates and other time deposits	655,776			3,394		2.05		655,034			3,068		1.86		478,239			1,280		1.06
Advances from FHLB	52,436			377		2.85		120,114			630		2.08		74,589			213		1.13
Subordinated debentures and subordinated notes	16,691			304		7.23		16,690			250		5.94		25,398			257		4.01
Total interest-bearing liabilities	2,062,804			9,487		1.82		2,070,636			8,642		1.66		1,669,937			4,147		0.98

Noninterest-bearing liabilities:
Noninterest-bearing deposits	643,958							635,952							542,918
Other liabilities	12,816							11,750							13,819
Total liabilities	2,719,578							2,718,338							2,226,674
Stockholders’ equity	523,590							514,876							464,614
Total liabilities and stockholders’ equity	$	3,243,168						$	3,233,214						$	2,691,288

Net interest rate spread²						3.34	%						3.53	%						3.94	%
Net interest income and margin³				$	28,287	3.87	%				$	29,176	4.00	%				$	25,750	4.24	%

¹Includes average outstanding balances of loans held for sale of $1,019, $1,091, and $3,155 for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively.
²Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
³Net interest margin is equal to net interest income divided by average interest-earning assets.

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)

	For the Year Ended December 31,
	2018							2017
	Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate

	(Dollars in thousands)
Assets
Interest-earning assets:
Loans¹	$	2,382,946		$	134,460	5.64	%	$	1,441,295		$	73,795	5.12	%
Investment securities	247,163			6,605		2.67	%	170,253			3,462		2.03	%
Interest-earning deposits in financial institutions	160,402			3,149		1.96	%	202,314			2,287		1.13	%
Other investments	340			20		5.88	%	202			8		3.96	%
Total interest-earning assets	2,790,851			144,234		5.17	%	1,814,064			79,552		4.39	%
Allowance for loan losses	(15,324		)					(9,567		)
Noninterest-earning assets	356,901							176,471
Total assets	$	3,132,428						$	1,980,968

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	1,277,186		17,599		1.38	%	$	871,212		8,981		1.03	%
Certificates and other time deposits	608,041			9,714		1.60	%	279,821			897		0.32	%
Advances from FHLB	87,366			1,701		1.95	%	51,196			531		1.04	%
Subordinated debentures and subordinated notes	16,748			1,031		6.16	%	13,878			635		4.58	%
Total interest-bearing liabilities	1,989,341			30,045		1.51	%	1,216,107			11,044		0.91	%

Noninterest-bearing liabilities:
Noninterest-bearing deposits	621,613							425,124
Other liabilities	12,456							6,802
Total liabilities	2,623,410							1,648,033
Stockholders’ equity	509,018							332,935
Total liabilities and stockholders’ equity	$	3,132,428						$	1,980,968

Net interest rate spread²						3.66	%						3.48	%
Net interest income and margin³				$	114,189	4.09	%				$	68,508	3.77	%

¹Includes average outstanding balances of loans held for sale of $1,198 and $2,493 for the twelve months ended December 31, 2018 and 2017, respectively.
²Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
³Net interest margin is equal to net interest income divided by average interest-earning assets.

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)

Yield Trend

	For the Quarter Ended
	December 31, 2018		September 30, 2018		June 30, 2018		March 31, 2018		December 31, 2017
Average yield on interest-earning assets:
Total loans¹	5.55	%	5.72	%	5.55	%	5.75	%	5.51	%
Securities available for sale	2.88		2.69		2.66		2.43		2.06
Interest-bearing deposits in other banks	2.41		1.98		1.80		1.70		1.37
Investment in unconsolidated subsidiary	5.64		6.76		4.91		6.20		4.51
Total interest-earning assets	5.16	%	5.19	%	5.10	%	5.22	%	4.92	%

Average rate on interest-bearing liabilities:
Interest-bearing demand and savings deposits	1.60	%	1.46	%	1.33	%	1.10	%	0.87	%
Certificates and other time deposits	2.05		1.86		1.52		0.77		1.06
Advances from FHLB	2.85		2.08		1.57		1.59		1.13
Subordinated debentures and subordinated notes	7.23		5.94		5.89		5.56		4.01
Total interest-bearing liabilities	1.82	%	1.66	%	1.43	%	1.08	%	0.98	%

Net interest rate spread²	3.34	%	3.53	%	3.67	%	4.14	%	3.94	%
Net interest margin³	3.87	%	4.00	%	4.07	%	4.46	%	4.24	%

¹Includes average outstanding balances of loans held for sale of $1,019, $1,091, $1,349, $1,336 and $3,155 for the three months ended December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018 and December 31, 2017, respectively.
²Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
³Net interest margin is equal to net interest income divided by average interest-earning assets.

Supplemental Yield Trend

	For the Quarter Ended
	December 31, 2018		September 30, 2018		June 30, 2018		March 31, 2018		December 31, 2017
Average cost of interest-bearing deposits	1.75	%	1.59	%	1.39	%	1.00	%	0.93	%
Average costs of total deposits, including noninterest-bearing	1.32		1.20		1.05		0.74		0.69

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)

Portfolio Composition

	For the Quarter Ended
	December 31, 2018					September 30, 2018					June 30, 2018					March 31, 2018					December 31, 2017

	(Dollars in thousands)
Loans held for investment:
Commercial	$	760,772		29.8	%	$	723,140		29.6	%	$	691,718		28.6	%	$	672,820		29.0	%	$	684,551		30.6	%
Real Estate:
Owner occupied commercial	321,279			12.6		313,287			12.8		285,139			11.8		306,787			13.3		312,284			14.0
Commercial	781,753			30.6		755,801			30.9		730,324			30.2		648,754			28.0		597,008			26.7
Construction and land	324,863			12.7		294,143			12.0		300,262			12.4		301,023			13.0		277,825			12.4
Farmland	10,528			0.4		10,853			0.5		10,815			0.5		9,366			0.4		9,385			0.4
1-4 family residential	297,917			11.6		289,808			11.9		283,486			11.7		246,806			10.7		236,542			10.6
Multi-family residential	51,285			2.0		50,317			2.0		109,621			4.5		122,482			5.3		106,275			4.8
Consumer	7,112			0.3		7,166			0.3		7,543			0.3		8,051			0.3		9,648			0.5
Total loans held for investment¹	$	2,555,509		100	%	$	2,444,515		100	%	$	2,418,908		100	%	$	2,316,089		100	%	$	2,233,518		100	%

Deposits:
Noninterest-bearing	$	626,283		23.8	%	$	661,754		24.9	%	$	611,315		24.5	%	$	597,236		24.0	%	$	612,830		27.0	%
Interest-bearing transaction	146,969			5.6		144,328			5.4		143,561			5.8		156,174			6.3		187,516			8.2
Money market	1,133,045			43.2		1,168,262			44.0		1,074,048			42.5		1,165,773			46.1		960,149			42.1
Savings	33,147			1.3		33,674			1.3		35,165			1.4		32,810			1.3		52,822			2.3
Certificates and other time deposits	682,984			26.1		648,236			24.4		626,329			25.8		541,801			22.3		465,313			20.4
Total deposits	$	2,622,428		100	%	$	2,656,254		100	%	$	2,490,418		100	%	$	2,493,794		100	%	$	2,278,630		100	%

Loan to Deposit Ratio	97.4		%			92.0		%			97.1		%			92.9		%			98.0		%

¹ Total loans held for investment does not includes deferred fees of $15 thousand at December 31, 2018, $16 thousand at September 30, 2018, $22 thousand at June 30, 2018, $24 thousand at March 31, 2018 and $28 thousand at December 31, 2018.

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)

Asset Quality

	For the Quarter Ended															For the Year Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Dec 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Nonperforming Assets:
Nonaccrual loans	$	24,745		$	21,822		$	4,252		$	3,438		$	465		$	24,745		$	465
Accruing loans 90 or more days past due	—			4,302			613			374			18			—			18
Total nonperforming loans held for investment	24,745			26,124			4,865			3,812			483			24,745			483
Other real estate owned	—			—			—			10			449			—			449
Total nonperforming assets	$	24,745		$	26,124		$	4,865		$	3,822		$	932		$	24,745		$	932

Charge-offs:
Residential	$	—		$	—		$	—		$	—		$	—		$	—		$	(11	)
Commercial	(26		)	—			(77		)	(72		)	(218		)	(175		)	(828		)
Consumer	—			—			—			(22		)	—			(22		)	—
Total charge-offs	(26		)	—			(77		)	(94		)	(218		)	(197		)	(839		)

Recoveries:
Commercial	7			10			15			9			4			41			9
Total recoveries	7			10			15			9			4			41			9

Net charge-offs	$	(19	)	$	10		$	(62	)	$	(85	)	$	(214	)	$	(156	)	$	(830	)

Allowance for loan losses at end of period	$	19,255		$	17,909		$	14,842		$	13,401		$	12,808		$	19,255		$	12,808

Asset Quality Ratios:
Nonperforming assets to total assets	0.77		%	0.80		%	0.16		%	0.12		%	0.03		%	0.77		%	0.03		%
Nonperforming loans to total loans held for investment	0.97			1.07			0.20			0.16			0.02			0.97			0.02
Allowance for loan losses to total loans held for investment	0.75			0.73			0.61			0.58			0.57			0.75			0.57
Net charge-offs to average loans outstanding	—			—			—			—			0.01			0.01			0.06

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

We identify certain financial measures discussed in this earnings release as being “non GAAP financial measures.” In accordance with SEC 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 (GAAP), in our statements of income, balance sheets or statements of cash flows. Non GAAP financial measures do not include operating and other statistical measures or ratios calculated using exclusively either one or both of (i) financial measures calculated in accordance with GAAP and (ii) operating measures or other measures that are not non GAAP financial measures.

The non-GAAP financial measures that we present in this earnings 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 present in this earnings release may differ from that of other companies reporting measures with similar names. You should understand how such other financial institutions calculate their financial measures that appear to be similar or have similar names to the non-GAAP financial measures we have discussed in this earnings release when comparing such non GAAP financial measures.

Tangible Book Value Per Common Share. Tangible book value 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 goodwill and 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 number of common shares 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.

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:

	For the Quarter Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017

	(Dollars in thousands, except per share data)
Tangible Common Equity
Total stockholders’ equity	$	530,638		$	517,212		$	508,441		$	497,433		$	488,929
Adjustments:
Goodwill	(161,447		)	(161,447		)	(161,447		)	(161,685		)	(159,452		)
Intangible assets¹	(15,896		)	(16,603		)	(17,482		)	(18,372		)	(22,165		)
Tangible common equity	$	353,295		$	339,162		$	329,512		$	317,376		$	307,312
Common shares outstanding	24,251			24,192			24,181			24,149			24,110

Book value per common share	$	21.88		$	21.38		$	21.03		$	20.60		$	20.28
Tangible book value per common share	$	14.57		$	14.02		$	13.63		$	13.14		$	12.75

¹ Intangible assets includes branch intangible assets held for sale of $1.7 million for the quarter ended December 31, 2017.

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Tangible Common Equity to Tangible Assets. 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: (a) tangible common equity as stockholders’ equity, less goodwill and intangible assets, net of accumulated amortization; (b) tangible assets as total assets less goodwill and intangible assets, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total 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, in each case, 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.

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:

	For the Quarter Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Tangible Common Equity
Total stockholders’ equity	$	530,638		$	517,212		$	508,441		$	497,433		$	488,929
Adjustments:
Goodwill	(161,447		)	(161,447		)	(161,447		)	(161,685		)	(159,452		)
Intangible assets¹	(15,896		)	(16,603		)	(17,482		)	(18,372		)	(22,165		)
Tangible common equity	$	353,295		$	339,162		$	329,512		$	317,376		$	307,312
Tangible Assets
Total assets	$	3,208,550		$	3,275,846		$	3,133,627		$	3,063,319		$	2,945,583
Adjustments:
Goodwill	(161,447		)	(161,447		)	(161,447		)	(161,685		)	(159,452		)
Intangible assets¹	(15,896		)	(16,603		)	(17,482		)	(18,372		)	(22,165		)
Tangible Assets	$	3,031,207		$	3,097,796		$	2,954,698		$	2,883,262		$	2,763,966
Tangible Common Equity to Tangible Assets	11.66		%	10.95		%	11.15		%	11.01		%	11.12		%

¹ Intangible assets includes branch intangible assets held for sale of $1.7 million for the quarter ended December 31, 2017.

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Return on Average Tangible Common Equity. Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) return as net income less the effect of intangible assets as net income, plus amortization of intangibles, net of taxes; (b) average tangible common equity as average stockholders’ equity less average goodwill and average intangible assets, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.

We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of intangible assets. Goodwill and other intangible assets have the effect of increasing total stockholders’ equity while not increasing our tangible common equity. This measure is particularly relevant to acquisitive institutions who may have higher balances in goodwill and other intangible assets than non-acquisitive institutions.

The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income available for common stockholders excluding amortization of intangibles, net of tax to net income and presents our return on average tangible common equity:

	For the Quarter Ended															For the Year Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Dec 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Net income available for common stockholders adjusted for amortization of core deposit intangibles
Net income	$	9,825		$	8,935		$	10,193		$	10,388		$	3,257		$	39,341		$	15,110
Adjustments:
Plus: Amortization of intangibles	945			935			975			1,205			685			4,060			1,270
Less: Tax benefit at the statutory rate	204			196			206			253			134			859			445
Net income available for common stockholders adjusted for amortization of intangibles	$	10,566		$	9,674		$	10,962		$	11,340		$	3,808		$	42,542		$	15,935

Average Tangible Common Equity
Total average stockholders’ equity	$	523,590		$	514,876		$	504,328		$	492,869		$	464,614		$	509,018		$	332,935
Adjustments:
Average goodwill	(161,447		)	(161,447		)	(161,433		)	(159,272		)	(144,042		)	(160,907		)	(73,656		)
Average intangible assets¹	(16,254		)	(17,107		)	(17,984		)	(20,734		)	(14,240		)	(18,005		)	(5,311		)
Average tangible common equity	$	345,889		$	336,322		$	324,911		$	312,863		$	306,332		$	330,106		$	253,968
Return on Average Tangible Common Equity (Annualized)	12.12		%	11.41		%	13.53		%	14.70		%	4.93		%	12.89		%	6.27		%

¹ Intangible assets includes branch intangible assets held for sale for the quarter ended December 31, 2017.

VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings and pre-tax, pre-provision operating earnings are non GAAP measures used by management to evaluate the Company’s financial performance. We calculate (a) operating earnings as net income available to common stockholders plus loss on sale of securities available-for-sale, net, less gain on sale of disposed branch assets, plus lease exit costs, net, plus branch closure expenses, plus one-time issuance of shares to all employees, plus merger and acquisition expenses, less tax impact of adjustments, plus re-measurement of deferred tax assets as a result of the reduction in the corporate income tax rate under the Tax Cuts and Jobs Act, plus other corporate development discrete tax items. We calculate (b) pre-tax, pre-provision operating earnings as operating earnings as described in clause (a) plus provision for income taxes, plus provision for loan losses. We calculate (c) diluted operating earnings per share as operating earnings as described in clause (a) divided by weight average diluted shares outstanding. We calculate (d) operating return on average tangible common equity as operating earnings as described in clause (a) divided by average tangible common equity. (average stockholders’ equity less average goodwill and average intangible assets, net of accumulated amortization.) We calculate (e) operating efficiency ratio as non-interest expense plus adjustments to operating non-interest expense divided by (i) non-interest income plus adjustments to operating non-interest income plus (ii) net interest income.

We believe that these measures and the operating metrics calculated utilizing these measures are important to management and many investors in the marketplace who are interested in understanding the ongoing operating performance of the company and provide meaningful comparisons to its peers.

The following tables reconcile, as of the dates set forth below, operating earnings and pre-tax, pre-provision operating earnings and related metrics:

	For the Quarter Ended														For the Year Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017		Dec 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Operating Earnings¹
Net Income available to common stockholders	$	9,825		$	8,935		$	10,193		$	10,388		$	3,257	$	39,341		$	15,110
Plus: Loss on sale of securities available for sale, net	42			—			—			—			—		42			—
Les: Gain on sale of disposed branch assets	—			—			—			(388		)	—		(388		)	—
Plus: Lease exit costs, net²	—			—			—			1,071			—		1,071			—
Plus: Branch closure expenses	—			—			—			172			—		172			—
Plus: One-time issuance of shares to all employees	—			—			421			—			—		421			—
Plus: Merger and acquisition expenses	1,150			2,692			1,043			335			1,018		5,220			2,691
Operating pre-tax income	11,017			11,627			11,657			11,578			4,275		45,879			17,801
Less: Tax impact of adjustments³	(440		)	538			293			242			356		633			942
Plus: Tax Act re-measurement	—			(688		)	(127		)	820			3,051		5			3,051
Plus: Other M&A discrete tax items	—			—			—			—			398		—			398
Net operating earnings	$	11,457		$	10,401		$	11,237		$	12,156		$	7,368	$	45,251		$	20,308

Weighted average diluted shares outstanding	24,532			24,613			24,546			24,539			23,524		24,590			18,810
Diluted EPS	$	0.40		$	0.36		$	0.42		$	0.42		$	0.14	$	1.60		$	0.80
Diluted operating EPS	0.47			0.42			0.46			0.50			0.31		1.84			1.08

¹ The Company previously adjusted operating income by excluding the impact of income recognized on acquired loans. The Company no longer includes this adjustment in order to align with industry peers for comparability purposes.
² Lease exit costs, net for the three months ended March 31, 2018 includes a $1.5 million consent fee and $240 thousand in professional services paid in January 2018 to separately assign and sublease two of our branch leases that the Company ceased using in 2017 offset by the reversal of the corresponding assigned lease cease-use liability totaling $669 thousand.
³ During the fourth quarter, the Company initiated a transaction cost study which to through December 31, 2018 resulted in $727 thousand of expenses paid that are non-deductible merger and acquisition expenses. As such, the $727 thousand of non-deductible expenses are reflected in the quarter ended and year-ended December 31, 2018 tax impact of adjustments amounts reported. All other non-merger related adjustments to operating earnings are taxed at the statutory rate.

	For the Quarter Ended															For the Year Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Dec 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Pre-Tax, Pre-Provision Operating Earnings
Net Income available to common stockholders	$	9,825		$	8,935		$	10,193		$	10,388		$	3,257		$	39,341		$	15,110
Plus: Provision for income taxes	3,587			1,448			2,350			3,511			7,227			10,896			13,029
Pus: Provision for loan losses	1,364			3,057			1,504			678			2,529			6,603			5,114
Plus: Loss on sale of securities available for sale, net	42			—			—			—			—			42			—
Plus: Loss (gain) on sale of disposed branch assets	—			—			—			(388		)	—			(388		)	—
Plus: Lease exit costs, net¹	—			—			—			1,071			—			1,071			—
Plus: Branch closure expenses	—			—			—			172			—			172			—
Plus: One-time issuance of shares to all employees	—			—			421			—			—			421			—
Plus: Merger and acquisition expenses	1,150			2,692			1,043			335			1,018			5,220			2,691
Net pre-tax, pre-provision operating earnings	$	15,968		$	16,132		$	15,511		$	15,767		$	14,031		$	63,311		$	35,944

Total average assets	$	3,243,168		$	3,233,214		$	3,059,456		$	2,989,974		$	2,691,288		$	3,132,428		$	1,980,968
Pre-tax, pre-provision operating return on average assets²	1.95		%	1.98		%	2.03		%	2.14		%	2.07		%	2.02		%	1.81		%

Average Total Assets	$	3,243,168		$	3,233,214		$	3,059,456		$	2,989,974		$	2,691,288		$	3,132,428		$	1,980,968
Return on average assets²	1.20		%	1.10		%	1.34		%	1.41		%	0.48		%	1.26		%	0.76		%
Operating return on average assets²	1.40			1.28			1.47			1.65			1.09			1.45			1.03

Operating earnings adjusted for amortization of intangibles
Net operating earnings	$	11,457		$	10,401		$	11,237		$	12,156		$	7,368		$	45,251		$	20,308
Adjustments:
Plus: Amortization of intangibles	945			935			975			1,205			685			4,060			1,270
Less: Tax benefit at the statutory rate	204			196			206			253			134			859			445
Operating earnings adjusted for amortization of intangibles	$	12,198		$	11,140		$	12,006		$	13,108		$	7,919		$	48,452		$	21,133

Average Tangible Common Equity
Total average stockholders’ equity	$	523,590		$	514,876		$	504,328		$	492,869		$	464,614		$	509,018		$	332,935
Adjustments:
Average goodwill	(161,447		)	(161,447		)	(161,433		)	(159,272		)	(144,042		)	(160,907		)	(73,656		)
Average intangibles assets	(16,254		)	(17,107		)	(17,984		)	(20,734		)	(14,240		)	(18,005		)	(5,311		)
Average tangible common equity	$	345,889		$	336,322		$	324,911		$	312,863		$	306,332		$	330,106		$	253,968
Operating Return on average tangible common equity²	13.99		%	13.14		%	14.82		%	16.99		%	10.26		%	14.68		%	8.32		%

Efficiency ratio	54.27		%	57.58		%	53.51		%	54.28		%	53.60		%	54.92		%	56.24		%
Operating efficiency ratio	50.65		%	49.09		%	48.67		%	49.94		%	49.98		%	49.60		%	52.70		%

¹ Lease exit costs, net for the three months ended March 31, 2018 includes a $1.5 million consent fee and $240 thousand in professional services paid in January 2018 to separately assign and sublease two of our branch leases that the Company ceased using in 2017 offset by the reversal of the corresponding assigned lease cease-use liability totaling $669 thousand.
² Annualized ratio.

GREEN BANCORP, INC.
Financial Highlights
(Unaudited)

	For the Quarter Ended															For the Twelve Months Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Dec 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Per Share Data (Common Stock):
Basic earnings per common share	$	0.41		$	0.42		$	0.44		$	0.25		$	0.07		$	1.52		$	0.92
Diluted earnings per share	0.41			0.41			0.44			0.25			0.07			1.50			0.92
Book value per common share	13.66			13.12			12.86			12.62			12.50			13.66			12.50
Tangible book value per common share¹	11.18			10.63			10.36			10.10			9.97			11.18			9.97

Common Stock Data:
Shares outstanding at period end	37,384			37,368			37,289			37,163			37,103			37,384			37,103
Weighted average basic shares outstanding for the period	37,375			37,339			37,274			37,341			37,103			37,288			37,043
Weighted average diluted shares outstanding for the period	37,767			37,726			37,646			37,586			37,393			37,681			37,297

Selected Performance Metrics:
Return on average assets²	1.37		%	1.42		%	1.54		%	0.90		%	0.25		%	1.32		%	0.83		%
Pre-tax, pre-provision operating return on average assets(1)(2)	2.10			2.17			2.15			2.10			2.01			2.11			1.97
Return on average equity²	12.20			12.75			13.96			8.15			2.23			11.80			7.57
Return on average tangible common equity^{1, 2}	15.20			16.01			17.65			10.47			3.02			14.88			9.84
Efficiency ratio	50.52			53.64			50.05			50.81			57.87			51.26			52.71
Loans to deposits ratio	95.55			98.50			94.05			90.81			93.92			95.55			93.92
Net interest margin	3.82			3.78			3.94			3.87			3.64			3.85			3.60
Noninterest expense to average assets²	2.03			2.20			2.13			2.13			2.23			2.12			2.04

Selected Performance Metrics – Operating:
Diluted operating earnings per share	$	0.44		$	0.49		$	0.44		$	0.26		$	0.14		$	1.61		$	1.01
Operating return on average assets²	1.49		%	1.69		%	1.56		%	0.93		%	0.50		%	1.41		%	0.92		%
Operating return on average tangible common equity²	16.40			19.00			17.88			10.81			5.90			15.97			10.82
Operating efficiency ratio	47.77			47.07			49.45			49.90			47.69			48.95			49.32

Green Bancorp Capital Ratios:
Average shareholders’ equity to average total assets	11.3		%	11.1		%	11.1		%	11.1		%	11.1		%	11.1		%	11.0		%
Tier 1 capital to average assets (leverage)	10.2			10.1			10.0			9.8			9.5			10.2			9.5
Common equity tier 1 capital	11.2			10.9			10.9			10.9			10.5			11.2			10.5
Tier 1 capital to risk-weighted assets	11.6			11.2			11.3			11.2			10.9			11.6			10.9
Total capital to risk-weighted assets	13.3			13.1			13.2			13.3			12.7			13.3			12.7
Tangible common equity to tangible assets¹	9.7			9.2			9.0			9.1			8.9			9.7			8.9

Green Bank Capital Ratios:
Tier 1 capital to average assets (leverage)	10.8		%	10.7		%	10.6		%	10.4		%	10.1		%	10.8		%	10.1		%
Common equity tier 1 capital	12.3			12.0			12.0			12.0			11.6			12.3			11.6
Tier 1 capital to risk-weighted assets	12.3			12.0			12.0			12.0			11.6			12.3			11.6
Total capital to risk-weighted assets	13.1			12.9			13.0			13.0			12.4			13.1			12.4

¹ Refer to “Reconciliation of Non-GAAP Financial Measures” after the financial highlights of Veritex and Green, respectively, for a reconciliation of this non-GAAP financial measure to their most directly comparable GAAP measure.
² Annualized ratio.

GREEN BANCORP, INC.
Financial Highlights
(Unaudited)

	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Period End Balance Sheet Data:
Cash and cash equivalents	$	112,720		$	141,090		$	231,251		$	142,144		$	140,681
Securities	661,714			673,089			699,863			729,146			718,814
Other investments	40,953			44,775			42,962			38,157			27,283

Loans held for sale	9,360			7,627			4,992			7,461			7,156
Loans held for investment	3,311,967			3,363,354			3,222,108			3,136,336			3,190,485
Total Loans	3,321,327			3,370,981			3,227,100			3,143,797			3,197,641
Allowance for loan losses	(32,534		)	(35,186		)	(35,086		)	(38,233		)	(31,220		)
Goodwill	85,291			85,291			85,291			85,291			85,291
Core deposit intangibles, net	7,307			7,584			7,881			8,187			8,503
Real estate acquired through foreclosure	609			2,532			802			802			802
Premises and equipment, net	28,580			28,873			29,178			23,694			24,002
Bank owned life insurance	56,841			56,457			56,066			55,682			55,302
Other assets	38,377			44,388			46,369			36,580			34,817
Branch assets held for sale	84,568			—			—			—			—
Total assets	$	4,405,753		$	4,419,874		$	4,391,677		$	4,225,247		$	4,261,916

Noninterest-bearing deposits	$	825,365		$	833,827		$	824,753		$	849,297		$	803,210
Interest-bearing transaction and savings deposits	1,300,825			1,221,640			1,281,255			1,337,973			1,331,601
Certificates and other time deposits	1,340,159			1,359,005			1,320,042			1,266,457			1,262,332
Total deposits	3,466,349			3,414,472			3,426,050			3,453,727			3,397,143
Securities sold under agreements to repurchase	3,226			3,502			4,141			4,948			5,173
Advances from Federal Home Loan Bank	300,000			437,000			412,000			230,000			325,000
Subordinated debentures and subordinated notes	48,302			48,161			48,019			47,878			47,737
Other liabilities	25,004			26,535			21,974			19,816			23,068
Branch liabilities held for sale	52,293			—			—			—			—
Total liabilities	3,895,174			3,929,670			3,912,184			3,756,369			3,798,121
Shareholders’ equity	510,579			490,204			479,493			468,878			463,795
Total liabilities and equity	$	4,405,753		$	4,419,874		$	4,391,677		$	4,225,247		$	4,261,916

GREEN BANCORP, INC.
Financial Highlights
(Unaudited)

	For the Quarter Ended												For the Twelve Months Ended
	Dec 31, 2018		Sep 30, 2018			Jun 30, 2018		Mar 31, 2018		Dec 31, 2017			Dec 31, 2018		Dec 31, 2017

	(Dollars in thousands)
Income Statement Data:
Interest income:
Loans, including fees	$	48,903	$	46,612		$	44,479	$	41,799	$	39,870		$	181,793	$	154,266
Securities	4,353		4,277			4,734		4,558		4,446			17,922		15,294
Other investments	398		360			341		300		241			1,399		847
Deposits in financial institutions and fed funds sold	872		651			659		493		671			2,675		1,843
Total interest income	54,526		51,900			50,213		47,150		45,228			203,789		172,250
Interest expense:
Transaction and savings deposits	4,455		3,393			3,023		2,464		2,588			13,335		9,298
Certificates and other time deposits	6,403		5,671			4,712		4,071		4,017			20,857		15,452
Subordinated debentures and subordinated notes	1,124		1,120			1,109		1,079		1,065			4,432		4,216
Other borrowed funds	2,098		2,197			1,608		1,294		738			7,197		2,237
Total interest expense	14,080		12,381			10,452		8,908		8,408			45,821		31,203
Net interest income	40,446		39,519			39,761		38,242		36,820			157,968		141,047
Provision for loan losses	2,420		320			1,897		9,663		4,405			14,300		14,360
Net interest income after provision for loan losses	38,026		39,199			37,864		28,579		32,415			143,668		126,687
Noninterest income:
Customer service fees	2,855		2,874			2,578		2,395		2,273			10,702		9,103
Loan fees	622		942			996		833		704			3,393		3,515
(Loss) gain on sale of available-for-sale securities, net	—		—			66		—		—			66		(38		)
Loss on held for sale loans, net	—		—			—		—		(1,098		)	—		(2,308		)
Gain on sale of guaranteed portion of loans, net	81		705			1,112		941		1,648			2,839		5,755
Other	855		952			733		989		401			3,529		2,485
Total noninterest income	4,413		5,473			5,485		5,158		3,928			20,529		18,512
Noninterest expense:
Salaries and employee benefits	14,216		13,729			13,640		13,601		14,996			55,186		52,542
Occupancy	2,126		2,068			2,263		2,077		2,069			8,534		8,194
Professional and regulatory fees	1,054		1,359			2,172		2,261		2,241			6,846		8,868
Data processing	1,002		923			1,029		972		981			3,926		3,808
Software license and maintenance	643		732			703		716		636			2,794		2,027
Marketing	278		354			257		176		259			1,065		775
Loan related	187		587			467		47		632			1,288		1,804
Real estate acquired by foreclosure, net	128		(5		)	4		12		30			139		704
Merger and acquisition expenses	1,232		2,955			—		—		—			4,187		—
Other	1,797		1,430			2,110		2,191		1,738			7,528		5,377
Total noninterest expense	22,663		24,132			22,645		22,053		23,582			91,493		84,099
Income before income taxes	19,776		20,540			20,704		11,684		12,761			72,704		61,100
Provision for income taxes	4,449		4,943			4,283		2,322		10,142			15,997		26,964
Net income	$	15,327	$	15,597		$	16,421	$	9,362	$	2,619		$	56,707	$	34,136

GREEN BANCORP, INC.
Financial Highlights
(Unaudited)

	For the Quarter Ended
	December 31, 2018							September 30, 2018							December 31, 2017
	Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate

	(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans¹	$	3,346,657		$	48,903	5.80	%	$	3,288,748		$	46,612	5.62	%	$	3,082,005		$	39,870	5.13	%
Securities	663,210			4,353		2.60		689,930			4,277		2.46		713,137			4,446		2.47
Other investments	44,531			398		3.55		43,655			360		3.27		23,359			241		4.09
Interest earning deposits in financial institutions and federal funds sold	151,026			872		2.29		126,021			651		2.05		197,454			671		1.35
Total interest-earning assets	4,205,424			54,526		5.14	%	4,148,354			51,900		4.96	%	4,015,955			45,228		4.47	%
Allowance for loan losses	(35,191		)					(36,003		)					(33,708		)
Noninterest-earning assets¹	253,037							247,893							221,858
Total assets	$	4,423,270						$	4,360,244						$	4,204,105

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits¹	$	1,310,165		$	4,455	1.35	%	$	1,236,585		$	3,393	1.09	%	$	1,387,873		$	2,588	0.74	%
Certificates and other time deposits¹	1,363,898			6,403		1.86		1,345,168			5,671		1.67		1,290,277			4,017		1.24
Other borrowed funds	348,232			2,098		2.39		390,225			2,197		2.23		243,142			738		1.20
Subordinated debentures and subordinated notes	48,239			1,124		9.24		48,096			1,120		9.24		47,673			1,065		8.86
Total interest-bearing liabilities	3,070,534			14,080		1.82	%	3,020,074			12,381		1.63	%	2,968,965			8,408		1.12	%

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits¹	827,271							830,040							745,707
Other liabilities¹	26,944							24,753							23,574
Total liabilities	3,924,749							3,874,867							3,738,246
Shareholders’ equity	498,521							485,377							465,859
Total liabilities and shareholders’ equity	$	4,423,270						$	4,360,244						$	4,204,105

Net interest rate spread ²						3.32	%						3.33	%						3.35	%
Net interest income and margin³				$	40,446	3.82	%				$	39,519	3.78	%				$	36,820	3.64	%

¹Includes average outstanding balances of branch assets and liabilities held for sale in total loans, noninterest-bearing assets, interest-bearing demand and saving deposits, certificates and other time deposits, noninterest-bearing demand deposits and other liabilities.
²Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
³Net interest margin is equal to net interest income divided by interest-earning assets.

GREEN BANCORP, INC.
Financial Highlights
(Unaudited)


	2018							2017
	Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate

	(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans¹	$	3,231,133		$	181,793	5.63	%	$	3,065,360		$	154,266	5.03	%
Securities	696,499			17,922		2.57		669,588			15,294		2.28
Other investments	40,053			1,399		3.49		22,823			847		3.71
Interest earning deposits in financial institutions and federal funds sold	135,161			2,675		1.98		160,810			1,843		1.15
Total interest-earning assets	4,102,846			203,789		4.97	%	3,918,581			172,250		4.40	%
Allowance for loan losses	(35,084		)					(31,471		)
Noninterest-earning assets¹	243,242							225,674
Total assets	$	4,311,004						$	4,112,784

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits¹	$	1,284,569		$	13,335	1.04	%	$	1,370,503		$	9,298	0.68	%
Certificates and other time deposits¹	1,316,548			20,857		1.58		1,317,180			15,452		1.17
Other borrowed funds	343,569			7,197		2.09		216,177			2,237		1.03
Subordinated debentures and subordinated notes	48,028			4,432		9.23		47,533			4,216		8.87
Total interest-bearing liabilities	2,992,714			45,821		1.53	%	2,951,393			31,203		1.06	%

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits¹	814,309							690,786
Other liabilities¹	23,412							19,458
Total liabilities	3,830,435							3,661,637
Shareholders’ equity	480,569							451,147
Total liabilities and shareholders’ equity	$	4,311,004						$	4,112,784

Net interest rate spread¹						3.44	%						3.34	%
Net interest income and margin²				$	157,968	3.85	%				$	141,047	3.60	%

GREEN BANCORP, INC.
Financial Highlights
(Unaudited)

Yield Trend

	For the Quarter Ended
	Dec 31, 2018		Sep 30, 2018		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017
Average yield on interest-earning assets:
Loans, including fees¹	5.80	%	5.62	%	5.65	%	5.42	%	5.13	%
Securities	2.60		2.46		2.66		2.57		2.47
Other investments	3.55		3.27		3.45		3.78		4.09
Interest-earning deposits in financial institutions and federal funds sold	2.29		2.05		1.90		1.61		1.35
Total interest-earning assets	5.14	%	4.96	%	4.97	%	4.77	%	4.47	%

Average rate on interest-bearing liabilities:
Interest-bearing transaction and savings¹	1.35	%	1.09	%	0.94	%	0.77	%	0.74	%
Certificates and other time deposits¹	1.86		1.67		1.46		1.31		1.24
Other borrowed funds	2.39		2.23		2.05		1.64		1.20
Subordinated debentures and subordinated notes	9.24		9.24		9.28		9.15		8.86
Total interest-bearing liabilities	1.82	%	1.63	%	1.42	%	1.23	%	1.12	%

Net interest rate spread²	3.32	%	3.33	%	3.55	%	3.54	%	3.35	%
Net interest margin³	3.82	%	3.78	%	3.94	%	3.87	%	3.64	%

¹Includes average outstanding balances of branch assets and liabilities held for sale in total loans, noninterest-bearing assets, interest-bearing demand and saving deposits, certificates and other time deposits, noninterest-bearing demand deposits and other liabilities.
² Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
³Net interest margin is equal to net interest income divided by interest-earning assets.

Supplemental Yield Trend

	For the Quarter Ended
	Dec 31, 2018		Sep 30, 2018		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017
Average cost of interest-bearing deposits	1.61	%	1.39	%	1.20	%	1.03	%	0.98	%
Average cost of total deposits, including noninterest-bearing	1.23		1.05		0.91		0.79		0.77

GREEN BANCORP, INC.
Financial Highlights
(Unaudited)

Portfolio Composition

	For the Quarter Ended
	Dec 31, 2018					Sep 30, 2018					Jun 30, 2018					Mar 31, 2018					Dec 31, 2017

	(Dollars in thousands)
Loans held for investment:

Commercial & industrial	$	1,137,251		34.4	%	$	1,142,733		34.0	%	$	1,070,420		33.2	%	$	1,038,715		33.1	%	$	1,066,266		33.4	%
Mortgage warehouse	211,709			6.4		236,307			7.0		244,041			7.6		185,849			5.9		220,230			6.9
Real Estate:
Owner occupied commercial	426,777			12.9		435,667			13.0		436,153			13.5		435,366			13.9		415,230			13.0
Commercial	1,130,472			34.1		1,133,427			33.6		1,092,036			33.9		1,068,832			34.2		1,067,779			33.5
Construction, land & land development	136,004			4.1		153,257			4.6		130,533			4.1		148,732			4.7		164,952			5.2
Residential mortgage	255,611			7.7		249,046			7.4		235,192			7.3		242,529			7.7		238,580			7.5
Consumer and Other	14,143			0.4		12,917			0.4		13,733			0.4		16,313			0.5		17,448			0.5
Total loans held for investment	$	3,311,967		100.0	%	$	3,363,354		100.0	%	$	3,222,108		100.0	%	$	3,136,336		100.0	%	$	3,190,485		100.0	%

Deposits:
Noninterest-bearing	$	825,365		23.8	%	$	833,827		24.4	%	$	824,753		24.1	%	$	849,297		24.6	%	$	803,210		23.6	%
Interest-bearing transaction	232,894			6.7		229,686			6.7		234,653			6.8		248,680			7.2		200,769			5.9
Money market	999,601			28.8		921,268			27.0		969,606			28.4		1,004,174			29.0		1,041,954			30.7
Savings	68,330			2.0		70,686			2.1		76,996			2.2		85,119			2.5		88,878			2.6
Certificates and other time deposits	1,340,159			38.7		1,359,005			39.8		1,320,042			38.5		1,266,457			36.7		1,262,332			37.2
Total deposits	$	3,466,349		100.0	%	$	3,414,472		100.0	%	$	3,426,050		100.0	%	$	3,453,727		100.0	%	$	3,397,143		100.0	%

Loan to Deposit Ratio	95.5		%			98.5		%			94.0		%			90.8		%			93.9		%

GREEN BANCORP, INC.
Financial Highlights
(Unaudited)

Asset Quality

	As of and for the Quarter Ended															For the Twelve Months Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Dec 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Nonperforming Assets:
Nonaccrual loans	$	54,055		$	60,211		$	52,885		$	55,565		$	47,892		$	54,055		$	47,892
Accruing loans 90 or more days past due	1,417				4,825			907			5,412			375		1,417				375
Restructured loans—nonaccrual	1,880				1,910			1,944			9,298			9,446		1,880				9,446
Restructured loans—accrual	2,955				3,009			3,055			13,623			13,093		2,955				13,093
Total nonperforming loans held for investment	60,307				69,955			58,791			83,898			70,806		60,307				70,806
Real estate acquired through foreclosure and repossessed assets	653				2,532			802			802			802		609				802
Total nonperforming assets	$	60,960		$	72,487		$	59,593		$	84,700		$	71,608		$	60,916		$	71,608

Charge-offs:
Commercial and industrial	$	(5,374	)	$	(179	)	$	(5,300	)	$	(2,699	)	$	(6,447	)	$	(13,552	)	$	(9,065	)
Owner occupied commercial real estate	—				—			—			—			(126	)	—				(1,087	)
Commercial real estate	—				—			—			—			—		—				—
Construction, land & land development	—				—			—			—			—		—				(95	)
Residential mortgage	—				—			—			—			(19	)	—				(19	)
Other consumer	(55		)		(113	)		(52	)		(24	)		(112	)	(244		)		(256	)
Total charge-offs	(5,429		)		(292	)		(5,352	)		(2,723	)		(6,704	)	(13,796		)		(10,522	)

Recoveries:
Commercial and industrial	$	117		$	4		$	4		$	8		$	6		$	133		$	676
Owner occupied commercial real estate	—				—			—			—			—		—				4
Commercial real estate	1				2			5			2			1		10				8
Construction, land & land development	—				—			—			—			2		—				77
Residential mortgage	9				42			290			15			27		356				121
Other consumer	230				24			9			48			3		311				132
Total recoveries	357				72			308			73			39		810				1,018

Net (charge-offs) recoveries	$	(5,072	)	$	(220	)	$	(5,044	)	$	(2,650	)	$	(6,665	)	$	(12,986	)	$	(9,504	)

Allowance for loan losses at end of period	$	32,534		$	35,186		$	35,086		$	38,233		$	31,220		$	32,534		$	31,220

Asset Quality Ratios:
Nonperforming assets to total assets	1.38		%		1.64	%		1.36	%		2.00	%		1.68	%	1.38		%		1.68	%
Nonperforming loans to total loans held for investment	1.82				2.08			1.82			2.68			2.22		1.82				2.22
Allowance for loan losses to total loans held for investment	0.98				1.05			1.09			1.22			0.98		0.98				0.98
Net charge-offs (recoveries) to average loans outstanding	0.15				0.01			0.16			0.08			0.22		0.40				0.31

GREEN BANCORP, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Tangible Book Value Per Common Share. Tangible book value is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Green calculates: (a) tangible common equity as stockholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by number of 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.

Green believes 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.

The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:

	Dec 31, 2018		Sep 30, 2018		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017

	(Dollars in thousands, except per share data)
Tangible Common Equity
Total shareholders’ equity	$	510,579	$	490,204	$	479,493	$	468,878	$	463,795
Adjustments:
Goodwill	85,291		85,291		85,291		85,291		85,291
Core deposit intangibles	7,307		7,584		7,881		8,187		8,503
Tangible common equity	$	417,981	$	397,329	$	386,321	$	375,400	$	370,001
Common shares outstanding¹	37,384		37,368		37,289		37,163		37,103
Book value per common share¹	$	13.66	$	13.12	$	12.86	$	12.62	$	12.50
Tangible book value per common share¹	$	11.18	$	10.63	$	10.36	$	10.10	$	9.97

¹Excludes the dilutive effect of common stock issuable upon exercise of outstanding stock options. The number of exercisable options outstanding was 659,125 as of December 31, 2018; 618,289 as of September 30, 2018; 626,923 as of June 30, 2018; 627,059 as of March 31, 2018; and 754,110 as of December 31, 2017.

GREEN BANCORP, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Green calculates: (a) tangible common equity as shareholders’ equity, less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets, less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total shareholders’ equity to total assets.

Green believes 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, in each case, exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total shareholders’ equity and assets while not increasing Green’s tangible common equity or tangible assets.

The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and total assets to tangible assets and presents Green’s tangible common equity to tangible assets:

	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017
	(Dollars in thousands)
Tangible Common Equity
Total shareholders’ equity	$	510,579		$	490,204		$	479,493		$	468,878		$	463,795
Adjustments:
Goodwill	85,291			85,291			85,291			85,291			85,291
Core deposit intangibles	7,307			7,584			7,881			8,187			8,503
Tangible common equity	$	417,981		$	397,329		$	386,321		$	375,400		$	370,001
Tangible Assets
Total assets	$	4,405,753		$	4,419,874		$	4,391,677		$	4,225,247		$	4,261,916
Less Adjustments:
Goodwill	(85,291		)	(85,291		)	(85,291		)	(85,291		)	(85,291		)
Core deposit intangibles	(7,307		)	(7,584		)	(7,881		)	(8,187		)	(8,503		)
Tangible assets	$	4,313,155		$	4,326,999		$	4,298,505		$	4,131,769		$	4,168,122
Tangible Common Equity to Tangible Assets	9.69		%	9.18		%	8.99		%	9.09		%	8.88		%

GREEN BANCORP, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Return on Average Tangible Common Equity. Return on average tangible common equity is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Green calculates: (a) return as net income less the effect of intangible assets as net income, less amortization of core deposit intangibles, net of taxes; (b) average tangible common equity as average shareholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.

Green believes that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of intangible assets. Goodwill and other intangible assets, including core deposit intangibles, have the effect of increasing total shareholders’ equity, while not increasing Green’s tangible common equity. This measure is particularly relevant to acquisitive institutions who may have higher balances in goodwill and other intangible assets than non-acquisitive institutions.

The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income excluding amortization of core deposit intangibles, net of tax to net income and presents Green’s return on average tangible common equity:

	As of and for the Quarter Ended															For the Twelve Months Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Dec 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Net income adjusted for amortization of core deposit intangibles
Net income	$	15,327		$	15,597		$	16,421		$	9,362		$	2,619		$	56,707		$	34,136
Adjustments:
Plus: Amortization of core deposit intangibles	277			297			306			316			330			1,196			1,472
Less: Tax benefit at the statutory rate	59			62			64			66			116			251			515
Net income adjusted for amortization of core deposit intangibles	$	15,545		$	15,832		$	16,663		$	9,612		$	2,833		$	57,652		$	35,093

Average Tangible Common Equity
Total average shareholders’ equity	$	498,521		$	485,377		$	471,958		$	466,015		$	465,859		$	480,569		$	451,147
Adjustments:
Average goodwill	85,291			85,291			85,291			85,291			85,291			85,291			85,291
Average core deposit intangibles	7,440			7,726			8,029			8,343			8,661			7,881			9,254
Average tangible common equity	$	405,790		$	392,360		$	378,638		$	372,381		$	371,907		$	387,397		$	356,602
Return on Average Tangible Common Equity (Annualized)	15.20		%	16.01		%	17.65		%	10.47		%	3.02		%	14.88		%	9.84		%

GREEN BANCORP, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings and pre-tax, pre-provision operating earnings are non-GAAP measures used by management to evaluate the Company’s financial performance. Green calculates (a) operating earnings as net income (loss) plus loss (gain) on sale of securities available-for-sale, net, plus loss (gain) on held for sale loans, net, plus stock based compensation expense for performance option vesting, plus shelf and secondary offering expenses. Green calculates (b) pre-tax, pre-provision operating earnings as (a) operating earnings plus provision (benefit) for income taxes, plus provision for loan losses. Green calculates (c) diluted operating earnings per share as operating earnings as described in clause (a) divided by weighted average diluted shares outstanding. Green calculates (d) operating return on average tangible common equity as operating earnings as described in clause (a) divided by average tangible common equity (average tangible common equity as average stockholders’ equity less average goodwill and average intangible assets, net of accumulated amortization). Green calculates operating efficiency ratio as non-interest expense plus adjustments to operating non-interest expense divided by (i) non-interest income plus adjustments to operating non-interest income plus (ii) net interest income.

Green believes that these measures and the operating metrics calculated utilizing these measures are important to management and many investors in the marketplace who are interested in understanding the ongoing operating performance of the company and provide meaningful comparisons to its peers.

The following tables reconcile, as of the dates set forth below, operating earnings and pre-tax, pre-provision operating earnings and related metrics:

	For the Quarter Ended											For the Twelve Months Ended
	Dec 31, 2018		Sep 30, 2018		Jun 30, 2018			Mar 31, 2018		Dec 31, 2017		Dec 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Operating Earnings
Net Income	$	15,327	$	15,597	$	16,421		$	9,362	$	2,619	56,707			34,136
Plus: Loss (gain) on sale of securities available-for-sale, net	—		—		(66		)	—		—		(66		)	38
Plus: Loss on held for sale loans, net	—		—		—			—		1,098		—			2,308
Plus: Stock based compensation expense for performance option vesting	—		—		—			—		3,051		—			3,051
Plus: Shelf and secondary offering expenses	—		—		337			397		—		—			—
Less: Tax benefit at the statutory rate	—		—		$	57		83		1,452		$	(14	)	$	1,889
Plus: Non-deductible merger and acquisition expenses	1,232		2,955		—			—		—		4,187			—
Net operating earnings	$	16,559	$	18,552	$	16,635		$	9,676	$	5,316	$	60,842		$	37,644

Weighted average diluted shares outstanding	37,767		37,726		37,646			37,586		37,393		37,681			37,297
Diluted earnings per share	$	0.41	$	0.41	$	0.44		$	0.25	$	0.07	1.50			0.92
Diluted operating earnings per share	0.44		0.49		0.44			0.26		0.14		1.61			1.01

Pre-Tax, Pre-Provision Operating Earnings
Net Income	$	15,327	$	15,597	$	16,421		$	9,362	$	2,619	$	56,707		$	34,136
Plus: Provision for income taxes	4,449		4,943		4,283			2,322		10,142		15,997			26,964
Plus: Provision for loan losses	2,420		320		1,897			9,663		4,405		14,300			14,360
Plus: Loss (gain) on sale of securities available-for-sale, net	—		—		(66		)	—		—		(66		)	38
Plus: Loss on held for sale loans, net	—		—		—			—		1,098		—			2,308
Plus: Stock based compensation expense for performance option vesting	—		—		—			—		3,051		—			3,051
Plus: Shelf and secondary offering expenses	—		—		337			397		—		—			—
Plus: Merger and acquisition expenses	1,232		2,955		—			—		—		4,187			—
Net pre-tax, pre-provision operating earnings	$	23,428	$	23,815	$	22,872		$	21,744	$	21,315	$	91,125		$	80,857


	For the Quarter Ended															For the Twelve Months Ended
	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Dec 31, 2018			Dec 31, 2017

	(Dollars in thousands)
Total average assets	$	4,423,270		$	4,360,244		$	4,253,357		$	4,204,200		$	4,204,105		$	4,311,004		$	4,112,784
Pre-tax, pre-provision operating return on average assets (annualized)	2.10		%	2.17		%	2.15		%	2.10		%	2.01		%	2.11		%	1.97		%

Average Total Assets	$	4,423,270		$	4,360,244		$	4,253,357		$	4,204,200		$	4,204,105		4,311,004			4,112,784
Return on average assets¹	1.37		%	1.42		%	1.54		%	0.90		%	0.25		%	1.32		%	0.83		%
Operating return on average assets¹	1.49		%	1.69		%	1.56		%	0.93		%	0.50		%	1.41		%	0.92		%

Operating earnings adjusted for amortization of core deposit intangibles
Operating earnings	$	16,559		$	18,552		$	16,635		$	9,676		$	5,316		$	60,842		$	37,644
Adjustments:
Plus: Amortization of core deposit intangibles	277			297			306			316			330			1,196			1,472
Less: Tax benefit at the statutory rate	58			62			64			66			116			184			515
Operating earnings adjusted for amortization of core deposit intangibles	$	16,778		$	18,787		$	16,877		$	9,926		$	5,530		$	61,854		$	38,601

Average Tangible Common Equity
Total average shareholders’ equity	$	498,521		$	485,377		$	471,958		$	466,015		$	465,859		480,569			451,147
Adjustments:
Average goodwill	85,291			85,291			85,291			85,291			85,291			85,291			85,291
Average core deposit intangibles	7,440			7,726			8,029			8,343			8,661			7,881			9,254
Average tangible common equity	$	405,790		$	392,360		$	378,638		$	372,381		$	371,907		$	387,397		$	356,602
Operating return on average tangible common equity¹	16.40		%	19.00		%	17.88		%	10.81		%	5.90		%	15.97		%	10.82		%

Efficiency ratio	50.52		%	53.64		%	50.05		%	50.81		%	57.87		%	51.26		%	52.71		%
Operating efficiency ratio	47.77		%	47.07		%	49.45		%	49.90		%	47.69		%	48.95		%	49.32		%

¹ Annualized ratio.

CONTACT: Media Contact:
LaVonda Renfro
972-349-6200
[email protected]

Investor Relations:
Susan Caudle
972-349-6132
[email protected]

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