____________

             If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. [  ]

             If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. [  ]

CALCULATION OF REGISTRATION FEE

---

Title of Each Class of Securities To Be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee
Common Stock, par value $.01 per share	11,009,813 shares	$10.00	$110,098,130	$11,780.50

⁽¹⁾ Estimated solely for the purpose of calculating the registration fee.

             The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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ViewPoint Financial Group
Proposed Holding Company for ViewPoint Bank
9,573,750 Shares of Common Stock

             ViewPoint Bank, Plano, Texas, is reorganizing into the mutual holding company form of organization. ViewPoint Bank will become a wholly owned subsidiary of ViewPoint Financial Group, a federally chartered corporation to be formed in connection with the reorganization. As part of the reorganization, ViewPoint Financial Group is offering for sale up to 9,573,750 shares of its common stock. The shares being offered represent 45.0% of ViewPoint Financial Group's outstanding common stock following the offering. After the offering, 55.0% of ViewPoint Financial Group's outstanding common stock will be owned by ViewPoint MHC, our federally chartered mutual holding company parent to be formed as part of the reorganization.

             We must sell a minimum of 7,076,250 shares to complete the offering, and we will terminate the offering if we do not sell the minimum number of shares. We may sell up to 11,009,813 shares because of regulatory considerations or changes in market or economic conditions without resoliciting subscribers. The offering is scheduled to terminate at 12:00 noon, Plano, Texas time, on _________ __, 2006. We may extend the termination date without notice to you, until _________ __, 2006, unless the Office of Thrift Supervision approves a later date, which may not be beyond _________ __, 2008.

             The minimum purchase is 25 shares of common stock. Generally, the maximum purchase that an individual may make through a single deposit account is 40,000 shares and no person, alone or together with an associate or group of persons acting in concert, may purchase more than 70,000 shares. For further information concerning the limitations on purchases of common stock, see "The Reorganization and Stock Offering–Limitations on Stock Purchases." Once submitted, orders are irrevocable unless the offering is terminated or extended beyond _________ __, 2006. If the offering is extended beyond _________ __, 2006, subscribers will have the right to modify or rescind their purchase orders. Funds received prior to the completion of the offering will be held in an account at ViewPoint Bank or, at our discretion, at another federally insured depository institution, and will bear interest at our statement savings rate, which is currently 0.50% per annum. If the offering is terminated, subscribers will have their funds returned promptly, with interest.

             Keefe, Bruyette & Woods, Inc. will use its best efforts to assist us in selling our common stock, but is not obligated to purchase any of the common stock that is being offered for sale. Subscribers will not pay any commissions to purchase shares of common stock in the offering. There is currently no public market for the common stock. Keefe, Bruyette & Woods has advised us that it intends to make a market in the common stock, but is under no obligation to do so. We expect that the common stock of ViewPoint Financial Group will be quoted on The NASDAQ National Market under the symbol "VPFG."

This investment involves risk, including the possible loss of principal.

Please read the "Risk Factors" beginning on page 15.

TERMS OF THE OFFERING

	Minimum	Maximum	Maximum, as adjusted
Per Share Price	$10.00	$10.00	$10.00
Number of Shares	7,076,250	9,573,750	11,009,813
Underwriting Commission	$629,000	$859,000	$991,000
Other Expenses	$1,750,000	$1,750,000	$1,750,000
Net Proceeds to ViewPoint Financial Group	$68,384,000	$93,129,000	$107,357,000
Net Proceeds Per Share	$9.66	$9.73	$9.75

             See "The Reorganization and Stock Offering – Plan of Distribution and Marketing Arrangements" for a complete description of the underwriting commission paid in connection with this offering.

             These securities are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

             Neither the Securities and Exchange Commission, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, nor any state securities regulator has approved or disapproved these securities or has determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

For information on how to subscribe, call the Stock Information Center at (___) ___-____.
__________________

K EEFE, B RUYETTE & W OODS
__________________

The date of this prospectus is __________ __, 2006

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TABLE OF CONTENTS

	Page
SUMMARY	1
RISK FACTORS	15
FORWARD-LOOKING STATEMENTS	20
SELECTED FINANCIAL AND OTHER DATA	22
VIEWPOINT FINANCIAL GROUP	24
VIEWPOINT BANK	24
VIEWPOINT MHC	24
HOW WE INTEND TO USE THE PROCEEDS	25
MARKET FOR THE COMMON STOCK	27
OUR POLICY REGARDING DIVIDENDS	27
PRO FORMA DATA	28
CAPITALIZATION	32
WE EXCEED ALL REGULATORY CAPITAL REQUIREMENTS	33
THE REORGANIZATION AND STOCK OFFERING	35
PROPOSED PURCHASES BY MANAGEMENT	56
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	57
BUSINESS OF VIEWPOINT BANK	73
MANAGEMENT	101
HOW WE ARE REGULATED	111
TAXATION	116
RESTRICTIONS ON ACQUISITION OF VIEWPOINT FINANCIAL GROUP AND VIEWPOINT BANK	117
DESCRIPTION OF CAPITAL STOCK OF VIEWPOINT FINANCIAL GROUP	120
TRANSFER AGENT AND REGISTRAR	121
EXPERTS	121
LEGAL AND TAX OPINIONS	121
ADDITIONAL INFORMATION	121
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1

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[INSERT MAP WITH OFFICE LOCATIONS AND MARKET AREA]

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SUMMARY

             The following summary explains selected information regarding the reorganization, the offering of common stock by ViewPoint Financial Group and the business of ViewPoint Bank. We have included a summary of material information; however, no summary can contain all the information that may be important to you. For additional information, you should read this prospectus carefully, including the consolidated financial statements and the notes to the consolidated financial statements.

Overview

            As part of the reorganization to the mutual holding company form of ownership, ViewPoint Financial Group is conducting this offering of between 7,076,250 and 9,573,750 shares of common stock to raise additional capital to support operational growth. The shares purchased in this offering will constitute 45.0% of the outstanding shares of ViewPoint Financial Group, and the remaining 55.0% of its shares will be owned by ViewPoint MHC, as required by regulations of the Office of Thrift Supervision. The offering includes a subscription offering in which certain persons, including depositors of ViewPoint Bank, have prioritized subscription rights. There are limitations on how many shares a person may purchase. The amount of capital being raised is based on an appraisal of ViewPoint Financial Group and a decision by management to offer 45.0% of our shares of common stock to the public. Most of the terms and requirements of this offering are required by regulations of the Office of Thrift Supervision. The same directors and certain officers who manage ViewPoint Bank will manage ViewPoint Financial Group and ViewPoint MHC.

The Companies

ViewPoint Financial Group

             ViewPoint Financial Group will be the mid-tier holding company for ViewPoint Bank when our change in structure is complete. It is not currently an operating company and has not engaged in any business to date. ViewPoint Financial Group will be chartered under federal law and will own 100% of the stock of ViewPoint Bank. After completion of the reorganization, ViewPoint Financial Group will direct ViewPoint Bank's business activities and may, in the future, acquire or organize other operating subsidiaries, including other financial institutions or other financial services companies, although it currently has no specific plans or agreements to do so. ViewPoint Financial Group's main office is located at 1309 W. 15th Street, Plano, Texas 75075 and its telephone number is (972) 578-5000.

ViewPoint Bank

             ViewPoint Bank is a federal mutual savings bank that converted on January 1, 2006 from a state-chartered credit union known as Community Credit Union. We are changing our structure by becoming a stock savings bank. Unless the context indicates otherwise, references to ViewPoint Bank prior to January 1, 2006 shall include Community Credit Union. Our executive office is located at 1309 W. 15th Street, Plano, Texas 75075 and our telephone number at this address is (972) 578-5000.

             We operate in the Dallas/Fort Worth Metroplex, which is ranked ninth nationally in population size according to the U.S. Census Bureau. We are in the business of attracting deposits from the public through our branch network and borrowing funds to originate loans and to invest in securities. A large percentage of our loans consist of automobile loans. We also originate mortgage loans secured by one- to four-family residential real estate and commercial real estate and other consumer and commercial business loans. We are currently emphasizing one- to four-family residential real estate lending and reducing our focus on indirect automobile lending. We offer a variety of deposit accounts and emphasize customer service. Deposits, particularly money market and demand deposit accounts, are our primary source of funds for our lending and investing activities. We are subject to comprehensive regulation and examination by the Office of Thrift Supervision. At December 31, 2005, we had total assets of $1.43 billion, deposits of $1.26 billion, and equity of $101.2 million.

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ViewPoint MHC

             Upon completion of our change in structure and the stock offering, ViewPoint MHC is expected to own 55.0% of the outstanding shares of ViewPoint Financial Group. Persons who had membership rights in ViewPoint Bank as of the date of the change in structure will have these rights automatically exchanged for identical rights in ViewPoint MHC after the change in structure. So long as ViewPoint MHC exists, it is required by the Office of Thrift Supervision regulations to own a majority of the voting stock of ViewPoint Financial Group. As a result, shareholders other than ViewPoint MHC will not be able to exercise voting control over most matters put to a vote of shareholders of ViewPoint Financial Group. ViewPoint MHC, through its board of directors, will be able to exercise voting control over most matters put to a vote of shareholders.

             ViewPoint MHC is not expected to engage in any business activity other than holding more than half of the shares of ViewPoint Financial Group and investing any funds retained by it. ViewPoint MHC's main office is located at 1309 W. 15th Street, Plano, Texas 75075 and its telephone number is (972) 578-5000.

Our Operating Strategy

             Our mission is to operate and grow a profitable community-oriented financial institution serving primarily retail customers and small businesses in our market area. After the reorganization and stock offering, we plan to continue our strategy of:

• retaining our essentially mutual, community oriented charter and reinvesting the proceeds of the offering consistent with our historical commitment to meet the financial needs of the communities we serve;

• controlling operating expenses while continuing to provide quality personal service to our customers;

• growing and diversifying our loan portfolio by emphasizing the origination of one- to four-family residential mortgage loans, commercial real estate loans and secured business loans, and de-emphasizing indirect automobile lending, which will allow us to meet our qualified thrift lender requrements;

• selectively emphasizing products and services to provide diversification of revenue sources and to capture our customer's full relationship. We intend to continue to expand our business by cross selling our loan and deposit products and services to our customers;

• expanding our banking network by opening loan production offices and de novo branches, and by selectively acquiring branch offices and other financial institutions;

• enhancing our focus on core deposits, including savings and checking accounts;

• borrowing from the Federal Home Loan Bank of Dallas for interest rate risk management purposes; and

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• maintaining a high level of asset quality.

For a more detailed description of our products and services, as well as our business strategy, see "Business of ViewPoint Bank" beginning on page __.

The Reorganization

             Reorganization into a Mutual Holding Company. We do not have stockholders in our current mutual form of ownership. Our depositors currently have the right to vote on certain matters such as the election of directors and a mutual holding company reorganization. The reorganization is a series of transactions by which we will convert our corporate structure from a mutual savings bank to the mutual holding company form of ownership. Following the reorganization, ViewPoint Bank will become a federal stock savings bank subsidiary of ViewPoint Financial Group. ViewPoint Financial Group will be a majority-owned subsidiary of ViewPoint MHC. Our members will become members of ViewPoint MHC, and will continue to have the same voting rights in ViewPoint MHC as they presently have in ViewPoint Bank. As a federal stock savings bank, we will continue to be subject to the regulation and supervision of the Office of Thrift Supervision and the Federal Deposit Insurance Corporation.

             After the reorganization, our ownership structure will be as follows:

             We are offering between 7,076,250 and 9,573,750 shares of ViewPoint Financial Group at $10.00 per share. In the event of changes in financial market conditions before we complete the offering, the offering may increase to 11,009,813 shares with the approval of the Office of Thrift Supervision and without any notice to you. If we increase the offering, you will not have the opportunity to change or cancel your stock order.

             Keefe, Bruyette & Woods will assist us in selling the stock. For further information about Keefe, Bruyette & Woods' role in the offering, see "The Reorganization and Stock Offering – Plan of Distribution and Marketing Arrangements."

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Reasons for the Reorganization and the Stock Offering

             The primary reasons for the reorganization and our decision to conduct the offering are to:

• provide us with greater operating flexibility and allow us to better compete with other financial institutions;

• increase our capital to support future growth and profitability while remaining within regulatory capital requirements; and

• retain the characteristics of a mutual organization. The mutual holding company structure will allow our mutual holding company to retain voting control over most decisions to be made by ViewPoint Financial Group shareholders.

             The reorganization and the capital raised in the offering are expected to:

• help us remain an independent community bank by giving us the financial strength to grow our bank and better enable us to serve our customers in our market area;

• enable us to increase lending limits and support our emphasis on real estate lending and the development of new products and services;

• provide additional funding to continue the growth of our branch network in our market area;

• help us retain and attract qualified management through stock-based compensation plans; and

• structure our business in a form that will enable us to access the capital markets.

             We intend to expand our branch network, primarily within our existing market area over the next few years. We do not, however, have any specific plans or arrangements for this expansion and/or any specific acquisition plans. We also intend to open three loan production offices within the next few months in the Oak Cliff section of Dallas, Grapevine and Wylie, Texas. In March 2006, we opened a commercial real estate loan production office in Houston.

Conditions to Completing the Reorganization

             We are conducting the reorganization under the terms of our plan of reorganization and stock issuance. We cannot complete the reorganization and related offering unless the plan of reorganization and stock issuance is approved by at least a majority of votes eligible to be cast by members of ViewPoint Bank, we sell at least the minimum number of shares offered and we receive the final approval of the Office of Thrift Supervision to complete the reorganization and offering.

Terms of the Offering

             We are offering the shares of common stock in a subscription offering to those with subscription rights listed below in the following order of priority:

1. Depositors who held at least $50 with us on December 31, 2004;

2. The ViewPoint Financial Group employee stock ownership plan;

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1. Depositors, other than directors and officers of ViewPoint Financial Group and ViewPoint Bank, who held at least $50 with us on March 31, 2006 who do not qualify under priority (1) above; and

2. Depositors with us on ______ __, 2006, to the extent not already included in a prior category.

             If we receive subscriptions for more shares than are to be sold in this subscription offering, shares will be allocated in order of the priorities described above under a formula outlined in the plan of reorganization and stock issuance. If we increase the number of shares to be sold above 9,573,750, the employee stock ownership plan will have the first priority right to purchase any shares exceeding that amount to the extent that its subscription has not previously been filled. Any shares remaining will be allocated in the order of priorities described above. Shares of common stock not subscribed for in the subscription offering will be offered to the general public in a direct community offering with a preference to natural persons residing in Collin, Dallas, Denton, Grayson, Rockwall and Tarrant counties, Texas and, if necessary, through a public offering. See "The Reorganization and Stock Offering" for a description of the allocation procedure.

Purchase Limitations

             The minimum purchase is 25 shares of common stock. Generally, no individual, or individuals through a single account, may purchase more than $400,000 (40,000 shares of common stock). If any of the following persons purchase shares of common stock, their purchases, when combined with your purchases, cannot exceed $700,000 (70,000 shares):

• your spouse, or relatives of you or your spouse living in your house;

• companies or other entities in which you have a 10% or greater equity or substantial beneficial interest or in which you serve as a senior officer or partner;

• a trust or other estate if you have a substantial beneficial interest in the trust or estate or you are a trustee or fiduciary for the trust or other estate; or

• other persons who may be acting together with you (including, but not limited to, persons who file jointly a Schedule 13G or Schedule 13D Beneficial Ownership Report with the SEC).

             Subject to Office of Thrift Supervision approval, we may increase or decrease the purchase limitations in the offering at any time. In addition, in any direct community offering or public offering, we will first fill orders for our common stock up to a maximum of 1,000 shares. Thereafter, we will allocate any remaining shares of common stock on an equal number of shares per order basis, until we fill all orders. Our tax-qualified benefit plans, including our employee stock ownership plan, are authorized to purchase up to 10% of the shares sold in the offering without regard to these purchase limitations. See "The Reorganization and Stock Offering - Limitations on Stock Purchases."

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How We Determined the Offering Range and the $10.00 Price Per Share

             The independent appraisal by Feldman Financial Advisors dated as of March 31, 2006, established the offering range. This appraisal was based on our financial condition and operations and the effect of the additional capital raised in this offering. The $10.00 price per share was determined by our board of directors and is the price most commonly used in stock offerings involving reorganizations of mutual savings institutions. Feldman Financial Advisors will receive fees totaling $65,000 for its appraisal services, plus reasonable out-of-pocket expense incurred in connection with the appraisal.

             Two measures that some investors use to analyze whether a stock may be a good investment are the ratio of the offering price to the issuer's "book value" and the ratio of the offering price to the issuer's annual net income. Feldman Financial Advisors considered these ratios, among other factors, in preparing its appraisal. Book value is the same as total equity and represents the difference between the issuer's assets and liabilities. Feldman Financial Advisors' appraisal also incorporated an analysis of a peer group of publicly traded thrift holding companies that Feldman Financial Advisors considered to be comparable to ViewPoint Financial Group. This analysis included an evaluation of the average and median price-to-earnings and price-to-book value ratios indicated by the market prices of the peer companies. Feldman Financial Advisors applied the peer group's pricing ratios, as adjusted for certain qualitative valuation factors to account for differences between ViewPoint Financial Group and the peer group, to ViewPoint Financial Group's pro forma earnings and book value to derive the estimated pro forma market value of ViewPoint Financial Group.

             Feldman Financial Advisors has estimated that as of March 31, 2006, the pro forma market value of ViewPoint Financial Group ranged from a minimum of $157,250,000 to a maximum of $212,750,000, with a midpoint of $185,000,000. Based on this valuation, the decision to sell 45.0% of this value to the public and the $10.00 per share price, the number of shares of common stock being issued by ViewPoint Financial Group to the public will range from 7,076,250 shares to 9,573,750 shares, with a midpoint of 8,325,000 shares. The estimated offering range of ViewPoint Financial Group may be increased by up to 15%, up to $110,098,125.

             The following table presents a summary of selected pricing ratios for the peer group companies and for ViewPoint Financial Group on a non-fully converted basis as of and for the year ended December 31, 2005. The peer group, which consists of 11 publicly traded thrift holding companies, which are all in mutual holding company form, includes companies that range in asset size from $543.8 million to $2.1 billion and have market capitalizations ranging from $76.9 million to $996.3 million. Compared to the average pricing ratios of the peer group, our pro forma pricing ratios at the maximum of the offering range indicated a premium of 44.4% on a price-to-earnings basis and a discount of 41.1% on a price-to-book basis. The estimated appraised value and the resulting discounts took into consideration the potential financial impact of the offering. Care should be exercised in using this non-fully converted basis of calculating price to earnings multiple and price to book value ratio, as a number of the peer group companies sold less than 45% of their value in their offerings. Further, a number of these companies have repurchased some of their common stock which also increases the mutual holding company's percentage ownership and distorts a comparative calculation.

             The financial impact of the offering includes the gross proceeds of the offering, less offering expenses and the effects of the benefit plans we expect to implement. Earnings used in the calculation of the price-to-earnings ratio are defined as our earnings for the year ended December 31, 2005, plus the financial impact of the offering. The financial impact of the offering includes the pro forma after-tax income generated from the reinvestment of the net proceeds of the offering, less the expense related to the benefit plans.

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	Non-Fully Converted Price to Earnings Multiple	Non-Fully Converted Price to Book Value Ratio
ViewPoint Financial Group
Maximum	58.8x	116.6%
Minimum	45.5x	97.8%
Valuation of peer group companies as of March 31, 2006 (1)
Averages	40.7x	199.0%
Medians	38.6x	194.2%
____________ (1) Reflects earnings and equity as of or for the most recent 12-month period.

        

             The following table presents a summary of selected pricing ratios for the peer group companies and ViewPoint Financial Group with the ratios adjusted to the hypothetical case of being fully converted. Compared to the average fully converted pricing ratios of the peer group, our pro forma fully converted pricing ratios at the maximum of the offering range indicated a premium of 27.1% on a price-to-earnings basis and a discount of 22.5% on a price-to-book basis. Feldman Financial Advisors' calculations of the fully converted pricing multiples for the peer group companies assume the pro forma impact of selling the mutual holding company shares of each of the peer group companies at their respective trading prices as of March 31, 2006. Feldman Financial Advisors' calculation of our fully converted pricing ratios assumes the pro forma impact of selling 100% of the shares to be outstanding at $10.00 per share.

	Fully Converted Price to Earnings Multiple	Fully Converted Price to Book Value Ratio
ViewPoint Financial Group
Maximum	41.7x	74.7%
Minimum	35.7x	66.5%
Valuation of peer group companies as of March 31, 2006 (1)
Averages	32.8x	96.4%
Medians	28.1x	95.7%
____________ (1) Reflects earnings and equity as of or for the most recent 12-month period.

The independent appraisal does not indicate market value. Do not assume or expect that our appraised value means that our common stock will trade at or above $10.00 per share after the offering.

             The following table was provided to our board of directors by Feldman Financial Advisors as part of its appraisal. It presents information for all mutual holding company organizations conducting a minority stock offering that was completed during the period from January 1, 2005 through March 31, 2006. The table presents the average percentage stock price appreciation from the initial trading date to the dates presented in the table. Feldman Financial Advisors advised our board of directors that its appraisal was prepared in conformance with the regulatory appraisal methodology. That methodology requires a valuation based on an analysis of the trading prices of comparable public thrift holding companies whose stock has traded for at least one year prior to the valuation date. Feldman Financial Advisors also advised our board of directors that the aftermarket trading experience of recent transactions was considered in the appraisal as a general indicator of current market conditions, but was not relied upon as a primary valuation methodology.

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             This table is not intended to indicate how our stock may perform. Furthermore, this table presents only short-term price performance and may not be indicative of the longer-term stock price performance of these companies. The increase in any particular company's stock price is subject to various factors, including, but not limited to, the amount of proceeds a company raises, the company's historical and anticipated operating results, the nature and quality of the company's assets, the company's market area, and the quality of management and management's ability to deploy proceeds (such as through loans and investments, the acquisition of other financial institutions or other businesses, the payment of dividends and common stock repurchases). In addition, stock prices may be affected by general market and economic conditions, the interest rate environment, the market for financial institutions and merger or takeover transactions, the presence of professional and other investors who purchase stock on speculation, as well as other unforeseeable events not in the control of management. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the "Risk Factors."

Number of Transactions	Price Appreciation After One Month	Price Appreciation Through March 31, 2006
20	3.5%	16.0%

             The independent appraisal will be updated before we complete the offering. Any changes in the appraisal would be subject to Office of Thrift Supervision approval.

             Data presented in the table reflects a small number of transactions. While stock prices of similar institutions have, on average, increased for the limited period presented, there can be no assurance that our stock price will appreciate the same amount, if at all. There also can be no assurance that our stock price will not trade below $10.00 per share. The substantial proceeds raised as a percentage of pro forma stockholders' equity may have a negative effect on our stock price performance. See "Risk Factors - Our Stock Price May Decline When Trading Commences." After this offering, our compensation expense will increase. Our return on equity will also be low compared to other companies. These factors could negatively impact the price of our stock. If interest rates rise, our net interest income and the value of our assets could be reduced, negatively affecting our stock price. See "Risk Factors - Rising interest rates may hurt our profits."

How to Purchase Common Stock

             Once we receive your order, you cannot cancel or change it without our consent. If we intend to sell fewer than 7,076,250 shares or more than 11,009,813 shares, all subscribers will be notified and given the opportunity to maintain, change or cancel their orders. If you do not respond to this notice, we will return your funds promptly with interest.

             If you want to subscribe for shares you must complete an original stock order form and drop it off at any ViewPoint Bank banking office or send it, together with full payment or withdrawal authorization, to ViewPoint Financial Group. You must sign the certification that is part of the stock order form. We must actually receive your properly completed stock order form, together with payment for the shares before noon, Plano, Texas time, on ________, 2006.

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             To ensure that we properly identify your subscription rights, you should list all of your deposit accounts as of the eligibility dates on the stock order form. If you fail to do so, your subscription may be reduced or rejected if the offering is oversubscribed.

             You may pay for shares in any of the following ways:

• by authorizing a withdrawal from deposit accounts at ViewPoint Bank;

• by check or money order made payable to ViewPoint Financial Group; or

• by cash, if delivered in person to a full-service banking office of ViewPoint Bank, although we request that you exchange cash for a check with any of our tellers.

             We will pay interest on your subscription funds at the rate ViewPoint Bank pays on statement savings accounts from the date we receive your funds until the offering is completed or terminated. All funds authorized for withdrawal from deposit accounts with ViewPoint Bank will earn interest at the applicable account rate until the offering is completed. There will be no early withdrawal penalty for withdrawals from certificates of deposit at ViewPoint Bank used to pay for stock subscribed for in this offering.

             You may not authorize direct withdrawal from a ViewPoint Bank individual retirement account. If you wish to use your ViewPoint Bank IRA to pay for your shares, please be aware that federal law requires that such funds first be transferred to a self-directed retirement account with a trustee other than ViewPoint Bank. The transfer of such funds to a new trustee takes time. If you would like to use your individual retirement funds held at ViewPoint Bank or elsewhere, we recommend that you contact our Stock Information Center promptly, preferably at least two weeks before the end of the offering period, for assistance. We cannot guarantee that you will be able to use retirement funds held at ViewPoint Bank or elsewhere, for this purchase. Your ability to use these retirement funds may depend on time constraints and, possibly, limitations imposed by the individual retirement account trustee.

Subscription Rights Are Not Transferrable

             Subscription rights are not allowed to be transferred, and we will act to ensure that you do not do so. We will not accept any stock orders that we believe involve any transfer of subscription rights.

Termination of the Offering

             The subscription offering will expire at 12:00 noon, Plano, Texas time, on _____________, 2006. We expect that the direct community offering and public offering, if any, would expire at the same time, although they may continue for up to 45 days after the end of the subscription offering, or longer if the Office of Thrift Supervision approves a later date. If the offering extends beyond ______________, 2006 or if we intend to sell fewer than 7,076,250 shares or more than 11,009,813 shares, we will resolicit subscriptions before proceeding with the offerings. If fewer than the minimum number of shares are subscribed for in the offering, and we do not get orders for at least the minimum number of shares by________, 2006, we will either:

• promptly return any payment you made to us, with interest, or cancel any withdrawal authorization you gave us; or

• extend the offering, if allowed, and give you notice of the extension and of your rights to maintain, cancel or change your order. If we extend the offering and you do not respond to the notice, then we will cancel your order and return your payment, with interest, or cancel any withdrawal authorization you gave us.

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             The value of the restricted stock awards will be based on the price of ViewPoint Financial Group's common stock at the time those shares are granted, which, subject to stockholder approval, cannot occur until at least six months after the offering is completed. The following table presents the total value of all restricted shares to be available for award and issuance under the stock-based incentive plan, assuming the shares for the plan are purchased or issued in a range of market prices from $8.00 per share to $14.00 per share.

Share Price	283,100 Shares Awarded at Minimum of Range	383,000 Shares Awarded at Maximum of Range	440,400 Shares Awarded at Maximum of Range, As Adjusted
$8.00	$	$	$
$10.00
$12.00
$14.00

             The grant-date fair value of the options granted under the stock-based incentive plan will be based in part on the price of ViewPoint Financial Group's common stock at the time the options are granted, which, subject to stockholder approval, cannot occur until at least six months after the offering is completed. The value also will depend on the various assumptions utilized in estimating the value using the Black-Scholes option pricing model. The following table presents the total estimated value of the options to be available for grant under the stock-based incentive plan, assuming the market price and exercise price for the stock options are equal and the range of market prices for the shares are $8.00 per share to $14.00 per share.

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Market/ Exercise Price	Grant-Date Fair Value Per Option	707,625 Options at Minimum of Range	957,375 Options at Maximum of Range	1,100,981 Options at Maximum of Range, As Adjusted
$8.00	$	$	$	$
$10.00
$12.00
$14.00

             We also will enter into an employment agreement with our chief executive officer, and change in control severance agreements with seven other officers. For a further discussion of benefits to management, see "Management."

We Currently Intend to Pay a Cash Dividend in the Future

             We currently plan to pay a quarterly cash dividend at an annualized rate of $0.20 per share, beginning after the first full quarter following the completion of the offering. Based on our earnings history and the proceeds from the stock offering, we believe we will have the financial ability to pay this dividend. Based upon the offering expenses and other assumptions described in "Pro Forma Data," we expect to have between $59.9 million and $81.6 million in net proceeds at the minimum and maximum of the offering, respectively, that, subject to annual earnings and expenses, could be used to pay dividends. Future dividends are not guaranteed and will depend on our ability to pay them. We will not pay or take any steps to pay a tax-free dividend that qualifies as a return of capital for at least one year following the stock offering. We anticipate that ViewPoint MHC will waive receipt of any dividends that we may pay. "Our Policy Regarding Dividends."

             You should consider these risk factors, in addition to the other information in this prospectus, before deciding whether to make an investment in this stock.

Risks Related to Our Business

Our loan portfolio possesses increased risk due to our substantial number of consumer loans, as well as our commercial real estate and commercial business loans.

             Our consumer loans accounted for approximately $607.4 million, or 56.5% of our total loan portfolio, as of December 31, 2005, of which $560.3 million consisted of automobile loans. Generally, we consider these types of loans to involve a higher degree of risk compared to first mortgage loans on one- to four-family, owner-occupied residential properties. As a result of our large portfolio of consumer loans, it may become necessary to increase the level of our provision for loan losses, which could hurt our profits. Consumer loans generally entail greater risk than do one- to four-family residential mortgage loans, particularly in the case of loans that are secured by rapidly depreciable assets, such as automobiles. In these cases, any repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. In addition, the majority of our automobile loans are comprised of indirect automobile loans which are originated by a third party on our behalf through a network of automobile dealers. Because these loans are originated through a third party and not directly by us, they present greater risks than other types of lending activities. See "Business of ViewPoint Bank - Lending Activities – Consumer Lending" and "Asset Quality."

             In addition, at December 31, 2005, our loan portfolio included $108.1 million of commercial real estate loans and commercial business loans, or approximately 10.1% of our total loan portfolio. We have been increasing, and intend to continue to increase, our origination of these types of loans after this offering. The credit risk related to these types of loans is considered to be greater than the risk related to one- to four-family residential loans because the repayment of commercial real estate loans and commercial business loans typically is dependent on the successful operations and income stream of the borrowers' business and the real estate securing the loan as collateral, which can be significantly affected by economic conditions.

             Several of our borrowers have more than one commercial real estate loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to significantly greater risk of loss compared to an adverse development with respect to a one- to four-family residential mortgage loan. Finally, if we foreclose on a commercial real estate loan, our holding period for the collateral, if any, typically is longer than for one- to four-family residential mortgage loan because there are fewer potential purchasers of the collateral. Since we plan to continue to increase our originations of these loans, it may be necessary to increase the level of our allowance for loan losses due to the increased risk characteristics associated with these types of loans. Any increase to our allowance for loan losses would adversely affect our earnings. In addition, these loans generally carry larger balances to single borrowers or related groups of borrowers than one- to four-family loans. Any delinquent payments or the failure to repay these loans would hurt our earnings. See "Business of ViewPoint Bank - Lending Activities -- Commercial Real Estate Lending" and "-- Commercial Business Lending."

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If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.

             We make various assumptions and judgments about the collectibility of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience, and we evaluate economic conditions. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover actual losses, resulting in additions to our allowance. Material additions to our allowance could materially decrease our net income. Our allowance for loan losses was 0.71% of gross loans receivable, excluding loans held for sale, and 167.5% of non-performing loans at December 31, 2005.

             In addition, bank regulators periodically review our allowance for loan losses and may require us to increase our provision for loan losses or recognize additional loan charge-offs. Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities will have a material adverse effect on our financial condition and results of operations.

Rising interest rates may hurt our profits.

             To be profitable we have to earn more interest on our loans and investments than we pay on our deposits and borrowings. If interest rates continue to rise, our net interest income and the value of our assets could be reduced if interest paid on interest-bearing liabilities, such as deposits and borrowings, increases more quickly than interest received on interest-earning assets, such as loans and investments. This is most likely to occur if short-term interest rates increase at a faster rate than long-term interest rates, which would cause income to go down. In addition, rising interest rates may hurt our income because they may reduce the demand for loans and the value of our securities. A flat yield curve may also hurt our income, because it would reduce our ability to reinvest proceeds from loan and investment repayments at higher rates. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Asset and Liability Management and Market Risk."

We operate in a highly regulated environment and we may be adversely affected by changes in laws and regulations.

             We are subject to extensive regulation, supervision and examination by the Office of Thrift Supervision, our chartering authority, and by the Federal Deposit Insurance Corporation, as insurer of our deposits. Since converting from a credit union on January 1, 2006, ViewPoint Bank has not yet been examined by the Office of Thrift Supervision. Both ViewPoint MHC and ViewPoint Financial Group will be subject to regulation and supervision by the Office of Thrift Supervision. This regulation and supervision governs the activities in which an institution and its holding company may engage, and are intended primarily for the protection of the insurance fund and depositors. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our allowance for loan losses. Any change in this regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations. See "How We Are Regulated -- ViewPoint Bank - Office of Thrift Supervision."

Strong competition within our market area may limit our growth and profitability.

             Competition in the banking and financial services industry is intense. In our market area, we compete with numerous commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere. Some of our competitors have substantially greater resources and lending limits than we have, have greater name recognition and market presence that benefit them in attracting business, and offer certain services that we do not or cannot provide. In addition, larger competitors may be able to price loans and deposits more aggressively than we do. Our profitability depends upon our continued ability to successfully compete in our market area. The greater resources and deposit and loan products offered by some of our competitors may limit our ability to increase our interest-earning assets. See "Business - Competition."

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Our business is geographically concentrated in Texas and a downturn in conditions in the state could reduce our profits.

             Most of our loans are to individuals and businesses located in Texas. Any decline in the economy of the state could have an adverse impact on our earnings. Decreases in local real estate values could adversely affect the value of property used as collateral. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings.

Risks Related to this Offering

After this offering, our compensation expenses will increase. Our return on equity also will be low compared to other companies. These factors could negatively impact the price of our stock.

             The proceeds we will receive from the sale of our common stock will significantly increase our capital and it will take us time to fully deploy those proceeds in our business operations. Our compensation expense will increase because of the costs associated with the employee stock ownership and stock-based incentive plans. We estimate the increase in compensation expense to be approximately $1.40 million on an after-tax basis, based on the maximum of the valuation range. Expenses also are expected to increase as a result of the costs of being a public company. Therefore, we expect our return on equity to be below our historical level and less than many of our regional and national peers. This low return on equity could hurt our stock price. We cannot guarantee when or if we will achieve returns on equity that are comparable to industry peers. For further information regarding pro forma income and expenses, see "Pro Forma Data."

We may have potentially lower net income as a result of being subject to federal and state taxes.

             As a credit union, we were generally exempt from paying state and federal income tax. As a savings bank, we are now subject to a federal income tax rate of approximately 34.0% and a state franchise tax of approximately 4.5%. Our new federal and state tax burden will negatively impact our net income and may reduce our net income from historical levels. If we had been subject to federal and state taxes for fiscal 2005, our earnings would have been reduced from $2.7 to $1.7 million for fiscal year ended 2005. See "Management's Discussion and Analysis of Financial Condition and Results of Operations."

We had material weaknesses in our internal control over financial reporting during the period when we were a credit union, which could affect our ability to provide accurate financial statements.

             In connection with the audit of our 2003, 2004 and 2005 financial statements, our independent auditing firm issued a letter to our audit committee identifying four material weaknesses in our internal control over financial reporting. A material weakness is a significant deficiency in an internal control system that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. These weaknesses related to (i) our classification of collateral-in-process loans as foreclosed assets and charging off the difference between the carrying value of the loan and the estimated value of the foreclosed asset, (ii) the need to update our historical charge-off experience to reflect current conditions in connection with our allowance for loan loss estimates, (iii) our timing for recording charge-offs against the allowance for loan losses, and (iv) our system for providing access to our FedLine controls. We are currently addressing or have already addressed these material weaknesses by having made the necessary adjustments to properly account for collateral-in-process loans, by having made adjustments to our allowance for loan loss calculations and the timing of our charge-offs in connection with the 2005 audit, and by instituting monitoring systems to ensure that all FedLine wire controls and access are appropriately limited.

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             We are in the process of upgrading our internal control over financial reporting in connection with our transition from a private to a public company. However, there can be no assurance that we will be able to maintain effective internal control over financial reporting in the future. Any future failure to maintain effective internal control over financial reporting could impair the reliability of our financial statements which in turn could harm our business, impair investor confidence and subject us to regulatory penalties.

The cost of additional finance and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements will increase our expenses.

             As a result of the completion of this offering, we will become a public reporting company. We expect that the obligations of being a public company, including the substantial public reporting obligations, will require significant expenditures and place additional demands on our management team. Compliance with the Sarbanes-Oxley Act of 2002, particularly Section 404 of the Sarbanes-Oxley Act regarding required internal controls and procedures, and the related rules and regulations of the SEC will require us to assess our internal controls and procedures and evaluate our accounting systems. In addition, we may need to hire additional internal audit, compliance, accounting and financial staff with appropriate public company experience and technical knowledge, and we may not be able to do so in a timely fashion. These obligations will increase our operating expenses and could divert our management's attention from our operations.

We have broad discretion in using the proceeds of the offering. Our failure to effectively use these proceeds could reduce our profits.

             ViewPoint Financial Group will use a portion of the net proceeds it retains to finance the purchase of common stock in the offering by the employee stock ownership plan and may use the remaining net proceeds to pay dividends to stockholders, repurchase shares of common stock, purchase securities, deposit funds in ViewPoint Bank or other financial institutions, acquire other financial services companies or for other general corporate purposes. ViewPoint Bank may use the proceeds it receives to fund new loans, establish or acquire new branches, purchase securities, or for general corporate purposes. In addition, we intend to expand our presence inside and outside our primary market area through acquisitions and de novo branching and new loan production offices, which may negatively affect our earnings until these branches and loan production offices achieve profitability. We have not, however, identified specific amounts of proceeds for any of these purposes and we will have significant flexibility in determining the amount of net proceeds we apply to different uses and the timing of these applications. Our failure to utilize these funds effectively could reduce our profitability. We have not established a timetable for the effective deployment of the proceeds, and we cannot predict how long we will require to effectively deploy the proceeds.

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ViewPoint MHC will own more than half of the stock of ViewPoint Financial Group. This means that ViewPoint MHC will have enough votes to control what happens on most matters submitted to a vote of stockholders.

             ViewPoint MHC is required by the regulations of the Office of Thrift Supervision to own more than half of the common stock of ViewPoint Financial Group. We expect ViewPoint MHC will own approximately 55% of our shares immediately after the offering. The board of directors of ViewPoint MHC will have the power to direct the voting of this stock. We cannot assure you that the votes cast by ViewPoint MHC will be in your personal best interests as a minority stockholder of ViewPoint Financial Group. For more information regarding your lack of voting control over ViewPoint Financial Group, see "ViewPoint MHC" and "Restrictions on Acquisitions of ViewPoint Financial Group and ViewPoint Bank."

The amount of stock controlled by ViewPoint MHC, and provisions in our charter and bylaws limiting the rights of stockholders, may deter potential takeovers and may reduce the trading price of our stock.

             In addition to the voting control position of ViewPoint MHC, provisions in our charter and bylaws may make it difficult and expensive to pursue a change in control or takeover attempt that our board of directors opposes. As a result, you may not have an opportunity to participate in such a transaction, and the trading price of our stock may not rise to the level of other institutions that are more vulnerable to hostile takeovers. These provisions include:

• the election of directors to staggered three-year terms;

• provisions restricting the calling of special meetings of stockholders;

• the absence of cumulative voting by stockholders in elections of directors;

• advance notice requirements for stockholder nominations and new business; and

• the authorization of 25,000,000 shares of serial preferred stock that could be issued without stockholder approval on terms or in circumstances that could deter a future takeover attempt.

See "Restrictions on Acquisition of ViewPoint Financial Group - Charter and Bylaws of ViewPoint Financial Group."

The implementation of a stock-based incentive plan may dilute your ownership interest.

             We intend to adopt a stock-based incentive plan following the offering. This stock-based incentive plan will be funded through either open market purchases, if permitted, or from the issuance of authorized but unissued shares of our common stock. Stockholders would experience a reduction in ownership interest (including shares held by ViewPoint MHC) totaling approximately 6.08% in the event newly issued shares of our common stock are used to fund stock options or awards of shares of common stock under the plan in an amount equal to 4.5% and 1.8%, respectively, of the shares to be outstanding after the offering.

Our stock price may decline when trading commences.

             We cannot assure you that if you purchase shares in the offering you will later be able to sell them at or above the $10.00 purchase price. In numerous recent cases, shares of common stock issued by newly converted savings institutions or mutual holding companies have traded below the price at which the shares were sold in the offering conducted by those companies. The final aggregate purchase price of the shares of common stock in the offering will be based on an independent appraisal. The appraisal is not intended, and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of common stock. The valuation is based on estimates and projections of a number of matters, all of which are subject to change from time to time. After our shares begin trading, the trading price of our common stock will be determined by the marketplace and may be influenced by many factors, including prevailing interest rates, the overall performance of the economy, investor perceptions of ViewPoint Financial Group and the outlook for the financial institutions industry in general.

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There may be a limited trading market in our common stock, which would hinder your ability to sell our common stock and may lower the market price of the stock.

             ViewPoint Financial Group has never issued stock and, therefore, there is no current trading market for the shares of common stock. We expect that our common stock will be quoted on The NASDAQ National Market under the symbol "VPFG." There is no guarantee that an active and liquid trading market in shares of our common stock will develop. Persons purchasing shares may not be able to sell their shares when they desire if a liquid trading market does not develop or sell them at a price equal to or above the initial purchase price of $10.00 per share even if a liquid trading market develops. This limited trading market for our common stock may reduce the market value of the common stock and make it difficult to buy or sell our shares on short notice. See "Market for the Common Stock."

Office of Thrift Supervision policy on remutualization transactions could prohibit an acquisition of ViewPoint Financial Group, which may lower our stock price.

             Current Office of Thrift Supervision regulations permit a mutual holding company to be acquired by a mutual institution in a remutualization transaction. The possibility of a remutualization transaction has on occasion resulted in a degree of takeover speculation for mutual holding companies which is reflected in the per share price of mutual holding companies' common stock. However, the Office of Thrift Supervision has issued a policy statement indicating that it views remutualization transactions as raising significant issues concerning disparate treatment of minority stockholders and mutual members of the target entity and raising issues concerning the effect on the mutual members of the acquiring entity. Under certain circumstances, the Office of Thrift Supervision intends to give these issues special scrutiny and reject applications providing for the remutualization of a mutual holding company unless the applicant can clearly demonstrate that the Office of Thrift Supervision's concerns are not warranted in the particular case. Should the Office of Thrift Supervision prohibit or otherwise restrict these transactions in the future, our per share stock price may be adversely affected.

             When used in this prospectus and in future filings by ViewPoint Financial Group with the SEC, in ViewPoint Financial Group's press releases or other public or stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases, "anticipate," "believes," "expects," "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "projected," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties, including but not limited to changes in economic conditions in ViewPoint Financial Group's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in ViewPoint Financial Group's market area, changes in the position of banking regulators on the adequacy of our allowance for loan losses, and competition, all or some of which could cause actual results to differ materially from historical earnings and those presently anticipated or projected.

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             ViewPoint Financial Group wishes to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, and advise readers that various factors, including regional and national economic conditions, substantial changes in levels of market interest rates, credit and other risks of lending and investing activities, and competitive and regulatory factors, could affect ViewPoint Financial Group's financial performance and could cause ViewPoint Financial Group's actual results for future periods to differ materially from those anticipated or projected.

             ViewPoint Financial Group does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

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             The summary information presented below under "Selected Financial Condition Data" and "Selected Operations Data" for, and as of the end of, each of the years ended December 31 is derived from our audited consolidated financial statements. The following information is only a summary and you should read it in conjunction with our consolidated financial statements and notes beginning on page F-1.

	December 31,
	2005	2004	2003	2002	2001
	(In Thousands)
Selected Financial Condition Data :
Total assets	$1,428,062	$1,400,021	$1,312,906	$1,155,635	$1,061,516
Loans held for sale	2,306	3,238	8,477	---	---
Loans receivable, net	1,073,167	1,086,448	1,024,252	872,533	787,382
Securities available for sale, at fair value:
U.S. government and federal        agency securities	21,892	24,917	---	---	---
Mortgage-backed and collateralized        mortgage obligations	79,968	1,305	2,135	3,595	14,768
Securities held to maturity, at amortized cost:
U.S. Government and Agency securities	18,007	23,040	47,110	17,144	26,609
Corporate bonds	3,009	5,094	5,183	5,268	---
Mortgage-backed and collateralized        mortgage obligations	20,946	35,295	64,748	77,883	43,285
Federal Home Loan Bank stock	3,958	4,481	4,159	2,570	2,197
Deposits	1,261,614	1,228,999	1,168,305	1,032,628	944,539
Borrowings	47,680	57,545	39,889	23,424	20,867
Equity	101,181	99,431	90,676	80,719	73,165

	Year Ended December 31,
	2005	2004	2003	2002	2001
	(In Thousands)
Selected Operations Data :
Total interest income	$ 64,421	$ 59,428	$ 61,466	$ 65,199	$ 63,037
Total interest expense	23,342	18,285	19,558	23,037	27,787
Net interest income	41,079	41,143	41,908	42,162	35,250
Provision for loan losses	6,120	6,199	8,046	12,465	4,242
Net interest income after provision          for loan losses	34,959	34,944	33,862	29,697	31,008
Service charges and fees	20,359	21,693	16,939	11,759	10,280
Net gain (loss) on sales of loans	351	631	2,122	1,101	1,077
Brokerage fees	548	583	510	539	663
Gain on sale of membership interests	855	---	---	---	---
Title premium income	524	466	1,120	730	422
Other noninterest income	1,848	1,349	1,473	5,395	5,396
Total noninterest income	24,485	24,722	22,164	19,524	17,838
Total noninterest expense	56,720	50,650	46,083	41,699	37,506
Net income (1)	$  2,724	$  9,016	$  9,943	$  7,522	$ 11,340

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	Year Ended December 31,
	2005	2004	2003	2002	2001
Selected Financial Ratios and Other Data :
Performance Ratios:
Return on assets (ratio of net income to      average total assets)	0.19%	0.67%	0.78%	0.67%	1.19%
Return on assets tax effected	0.12%	0.42%	0.49%	0.42%	0.75%
Return on equity (ratio of net income     to average equity)	2.72%	9.49%	11.60%	9.78%	16.80%
Return on equity tax effected	1.71%	5.98%	7.31%	6.16%	10.58%
Interest rate spread information:
Average during period	2.83%	3.06%	3.36%	3.75%	3.60%
End of period	2.78%	2.95%	3.26%	3.68%	3.19%
Net interest margin	3.13%	3.29%	3.59%	4.07%	4.07%
Non-interest income to operating revenue	27.54%	29.38%	26.50%	23.04%	22.06%
Operating expense to average total assets	4.00%	3.76%	3.61%	3.70%	3.92%
Average interest-earning assets to     average interest-bearing liabilities	117.04%	116.24%	114.11%	114.89%	114.92%
Efficiency ratio	86.51%	76.90%	71.92%	67.60%	70.65%
Asset Quality Ratios:
Non-performing assets to total assets at end     of period	0.36%	0.61%	0.68%	0.66%	0.53%
Non-performing loans to gross loans	0.43%	0.68%	0.73%	0.48%	0.43%
Allowance for loan losses to non-performing     loans	167.51%	112.55%	115.52%	208.18%	139.96%
Allowance for loan losses to gross loans	0.71%	0.77%	0.84%	1.01%	0.60%
Capital Ratios:
Equity to total assets at end of period	7.09%	7.10%	6.91%	6.98%	6.89%
Average equity to average assets	7.07%	7.06%	6.72%	6.83%	7.06%
Other Data:
Number of full-service offices         (including in-store locations)	34	34	32	30	28
Number of full-service in-store locations	18	18	17	12	4

_____________

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             ViewPoint Financial Group will be incorporated under federal law to hold all of the stock of ViewPoint Bank. ViewPoint Financial Group has applied for the approval of the Office of Thrift Supervision to become a savings and loan holding company and will be subject to regulation by that agency. After we complete the stock sale, ViewPoint Financial Group will be a unitary savings and loan holding company. See "How We are Regulated - ViewPoint Financial Group." ViewPoint Financial Group will have no significant assets other than all of the outstanding shares of common stock of ViewPoint Bank, the portion of the net proceeds it keeps and its loan to the ViewPoint Financial Group employee stock ownership plan. ViewPoint Financial Group will have no significant liabilities. See "How We Intend to Use the Proceeds." Initially, the management of ViewPoint Financial Group and ViewPoint Bank will be substantially the same and ViewPoint Financial Group will use the offices of ViewPoint Bank. ViewPoint Financial Group intends to utilize the support staff of ViewPoint Bank from time to time and will pay ViewPoint Bank for this expense. If ViewPoint Financial Group expands or changes its business in the future, we may hire our own employees.

             We believe the proposed mutual holding company structure will give us more flexibility to change our business activities by forming new companies which we own, or by buying other companies, including other financial institutions and financial services companies. We do not have any current plans to do these things. ViewPoint Financial Group intends to pay for its business activities with the proceeds it keeps from the stock sale and the money we earn from investing the proceeds, as well as from dividends from ViewPoint Bank. See "Our Policy Regarding Dividends."

             The principal executive offices of ViewPoint Financial Group will be located at 1309 W. 15th Street, Plano, Texas 75075, and its telephone number will be (972) 578-5000.

             ViewPoint Bank is a federally chartered and insured mutual savings institution with 34 full service offices, including 18 in-store locations. At December 31, 2005, ViewPoint Bank had total assets of $1.43 billion, total deposits of $1.26 billion and equity of $101.2 million. For more information regarding the business and operations of ViewPoint Bank, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business of ViewPoint Bank."

             ViewPoint Bank is examined and regulated by the Office of Thrift Supervision, its primary federal regulator. ViewPoint Bank is also regulated by the FDIC. ViewPoint Bank is required to have certain reserves set by the Federal Reserve Board and is a member of the Federal Home Loan Bank of Dallas, which is one of the 12 regional banks in the Federal Home Loan Bank System.

             The executive offices of ViewPoint Bank are located at 1309 W. 15th Street, Plano, Texas 75075, and its telephone number is (972) 578-5000.

             As part of the restructuring of ViewPoint Bank pursuant to the plan of reorganization and stock issuance, ViewPoint Bank will organize ViewPoint MHC as a federal mutual holding company. Persons with membership or liquidation rights in ViewPoint Bank as of the date of the reorganization will continue to have these rights in ViewPoint MHC after the reorganization as long as they remain depositors of ViewPoint Bank. Members of ViewPoint MHC, consisting solely of depositors of ViewPoint Bank, will have the authority to elect the board of directors of ViewPoint MHC.

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             ViewPoint MHC's principal assets will be the shares of common stock of ViewPoint Financial Group received in the reorganization and $250,000 contributed by ViewPoint Bank as its initial capitalization. Initially, ViewPoint MHC does not intend to conduct any business except to own a majority of the common stock of ViewPoint Financial Group and invest any money it has. ViewPoint MHC will be a mutual corporation chartered under federal law and regulated by the Office of Thrift Supervision. ViewPoint MHC will be subject to the limitations and restrictions imposed on savings and loan holding companies by the Home Owners' Loan Act. See "How We are Regulated -ViewPoint MHC."

             The executive offices of ViewPoint MHC will be located at 1309 W. 15th Street, Plano, Texas 75075, and its telephone number will be (972) 578-5000.

             Although the actual net proceeds from the sale of the shares of common stock cannot be determined until the reorganization is completed, we presently anticipate that the net proceeds from this offering will be between $68.4 million and $93.1 million and up to $107.4 million assuming an increase in the estimated value of the common stock sold in the reorganization by 15%. See "Pro Forma Data" and "The Reorganization and Stock Offering - How We Determined Our Price and the Number of Shares to be Issued in the Stock Offering" as to the assumptions used to arrive at such amounts.

             We intend to use the net proceeds received from the stock offering as follows:

	Minimum	Maximum	Maximum, as adjusted
	(In Thousands)
Retained by ViewPoint Financial Group and initially     placed in short-term investments for general     corporate purposes	$28,531	$38,905	$44,870
Loan to employee stock ownership plan	5,661	7,659	8,808
Used to buy the stock of ViewPoint Bank	34,192	46,565	53,679
Net proceeds from stock offering	$68,384	$93,129	$107,357

             ViewPoint Financial Group will retain 50% of the net offering proceeds and will purchase all of the capital stock of ViewPoint Bank to be issued in the reorganization in exchange for the remaining offering proceeds. ViewPoint Financial Group intends to use a portion of the retained net proceeds to make a loan directly to the employee stock ownership plan to enable the employee stock ownership plan to purchase up to a number of shares equal to 3.6% of the shares outstanding after the offering. Based upon the issuance to the employee stock ownership plan of 566,100 shares of common stock and 765,900 shares of common stock at the minimum and maximum of the estimated offering range, respectively, the loan to the employee stock ownership plan would be $5.7 million and $7.7 million, respectively. See "Management - Benefits -- Employee Stock Ownership Plan." The remaining net proceeds retained by ViewPoint Financial Group initially may be used to invest in U.S. Government and federal agency securities of various maturities, mortgage-backed or other securities, deposits in either ViewPoint Bank or other financial institutions, or a combination thereof. The net proceeds may ultimately be used to:

• support ViewPoint Bank's lending activities;

• repay borrowings in the ordinary course of business;

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support the future expansion of operations through the establishment of additional banking offices, loan production offices or other customer facilities or through acquisitions of other financial institutions or branch offices, although no such acquisition transactions are specifically being considered at this time; or

support general corporate purposes.

             The net proceeds from the offering may also be used for other business and investment purposes, including the payment of regular or special cash dividends, possible repurchases of the common stock, or returns of capital. ViewPoint MHC and ViewPoint Bank have committed, however, not to take any action to further the payment of any return of capital on the common stock during the one-year period subsequent to completion of the offering. In addition, the Office of Thrift Supervision generally will not permit us to repurchase shares of common stock for one year after completion of this offering, except to cover share awards under the stock-based incentive plan approved by stockholders and tax qualified employee stock benefit plans. Management may consider expanding or diversifying its activities, as such opportunities become available.

             Following the completion of the reorganization, to the extent permitted by the Office of Thrift Supervision, which generally prohibits repurchases for one year, and based upon then existing facts and circumstances, our board of directors may determine to repurchase shares of common stock, subject to any applicable statutory and regulatory requirements. These facts and circumstances may include but not be limited to:

• market and economic factors, including the price at which the stock is trading in the market, the volume of trading, the attractiveness of other investment alternatives in terms of the rate of return and risk involved in the investment, the ability to increase the book value and/or earnings per share of the remaining outstanding shares, and an improvement in our return on equity;

• the avoidance of dilution to stockholders by not having to issue additional shares to cover the exercise of stock options or to fund employee stock benefit plans; and

• any other circumstances in which repurchases would be in the best interests of ViewPoint Financial Group and its stockholders.

Any stock repurchases will be subject to the determination of our board of directors that ViewPoint Bank will be capitalized in excess of all applicable regulatory requirements after any such repurchases.

             The portion of the net proceeds used by ViewPoint Financial Group to purchase the capital stock of ViewPoint Bank will be added to ViewPoint Bank's general funds to be used for general corporate purposes, including increased lending activities. The amount of net proceeds received by ViewPoint Bank will further strengthen ViewPoint Bank's capital position, which already exceeds all regulatory requirements. After the reorganization, based upon the maximum of the estimated offering range, ViewPoint Bank's tangible capital ratio will be approximately 9.35%. As a result, ViewPoint Bank will continue to be a well-capitalized institution.

             The net proceeds may vary because total expenses of the offering may be more or less than those estimated. The net proceeds will also vary if the number of shares to be issued in the offering is adjusted to reflect a change in the estimated pro forma market value of ViewPoint Financial Group. In addition, payments for shares made through withdrawals from existing deposit accounts at ViewPoint Bank will not result in the receipt of new funds for investment by ViewPoint Bank but will result in a reduction of ViewPoint Bank's interest expense and liabilities as funds are transferred from interest-bearing certificates or other deposit accounts.

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             Because this is our first offering of shares in a public offering, there is no established market for our common stock. We have applied to have our common stock listed for trading on The NASDAQ National Market under the symbol "VPFG." Keefe, Bruyette & Woods has advised us that it intends to make a market in our common stock following the offering, but it is under no obligation to do so. Although we will attempt before completion of the offering to obtain commitments from at least two other broker-dealers to make a market in our common stock, there can be no assurance that we will be successful in obtaining these commitments.

             The development of a public market having the desirable characteristics of depth, liquidity and orderliness depends on the existence of willing buyers and sellers, the presence of which is not within our control or the control of any market maker. Accordingly, the number of active buyers and sellers of our common stock at any particular time may be limited. Although we intend to meet the requirements for listing on The NASDAQ National Market, you could have difficulty selling your shares of common stock. We cannot assure you that an active and liquid trading market for our common stock will develop or, if developed, will be maintained. Nor can we assure you that, if you purchase shares of common stock in the offering, you will be able to sell them at a price equal to or above $10.00 per share.

             Our board of directors currently intends to pay quarterly cash dividends on the common stock, beginning after the first full quarter following completion of the offering. The initial annual dividend rate to be paid on our common stock will be at an annualized rate of $0.20 per share. The continued payment of dividends will depend upon a number of factors, including capital requirements, ViewPoint Financial Group's and ViewPoint Bank's financial condition and results of operations, tax considerations, statutory and regulatory limitations and general economic conditions. Based upon anticipated offering expenses and other assumptions described in "Pro Forma Data," including the contribution of 50% of the net proceeds to ViewPoint Bank, we expect to have between $28.5 million and $44.9 million from the retained net proceeds at the minimum and maximum of the offering, respectively, that could be used to pay dividends, subject to our annual earnings and expenses. Future dividends are not guaranteed and will depend on our ability to pay them.

             If we pay dividends to our stockholders, we also will be required to pay dividends to ViewPoint MHC unless ViewPoint MHC elects to waive the receipt of dividends. We anticipate that ViewPoint MHC will waive any dividends paid by us. Any decision to waive dividends will be subject to regulatory approval of the Office of Thrift Supervision. Under applicable federal regulations, public stockholders would not be diluted for any dividends waived by ViewPoint MHC in the event ViewPoint MHC converts to stock form. See "How We are Regulated - Holding Company Regulation."

             Our future payment of dividends will depend, in large part, upon receipt of dividends from ViewPoint Bank. We initially will have no source of income other than dividends from ViewPoint Bank, earnings from the investment of existing capital and proceeds of this offering retained by us, and interest payments on our loan to the employee stock ownership plan. A regulation of the Office of Thrift Supervision imposes limitations on "capital distributions" by savings institutions. See "How We Are Regulated - Limitations on Dividends and Other Capital Distributions."

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             No assurances can be given that any dividends will be paid or that, if paid, will not be reduced or eliminated in future periods. If ViewPoint MHC does not waive the receipt of any dividends we pay, the amount of dividends payable by us to public stockholders may be reduced. Special cash dividends, stock dividends or returns of capital may be paid in addition to, or in lieu of, regular cash dividends, to the extent permitted by Office of Thrift Supervision policy and regulations. We have no intention to initiate any action that leads to a return of capital (as distinguished from a dividend) to stockholders

             The actual net proceeds from the sale of common stock in the offering cannot be determined until the offering is completed. However, the net proceeds in the offering are currently estimated to be between $68.4 million and $93.1 million, or up to $107.4 million at the maximum, as adjusted, in the event the offering range is increased by 15%, based on the following assumptions:

• all shares of common stock will be sold in the subscription offering;

• the employee stock ownership plan will purchase an amount equal to 3.6% of the shares of common stock outstanding after the offering. The employee stock ownership plan is assumed to be funded internally with a loan from ViewPoint Financial Group;

• expenses of the offering, other than the fees to be paid to Keefe, Bruyette & Woods are estimated to be $1.75 million;

• Keefe, Bruyette & Woods will receive a fee equal to 1.0% of the aggregate purchase price of the shares of stock sold in the offering, excluding any shares purchased by any employee benefit plans, our directors, officers or employees, or members of their immediate families;

• pro forma earnings have been calculated for the year ended December 31, 2005 assuming the stock had been sold at the beginning of the period and the net proceeds had been invested at an average yield of 4.38%, which approximates the yield on a one-year U.S. Treasury bill adjusted to a constant maturity on December 31, 2005;

• the pro forma after-tax yield on the net proceeds from the offering is assumed to be 2.76% for the year ended December 31, 2005, based on a combined federal and state estimated effective tax rate of 37.0%;

• no withdrawals are made from ViewPoint Bank's deposit accounts for the purchase of shares in the offering;

• ViewPoint Financial Group will grant options under the stock-based incentive plan to acquire common stock equal to 4.5% of the shares of common stock outstanding after the offering, and will grant restricted stock awards in an amount equal to 1.8% of such shares. ViewPoint Financial Group will acquire these option and award shares through open market purchases. The estimated fair value of the options, estimated using an application of the Black-Scholes option pricing model, is recognized as an expense over the vesting term of the options;

• historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the indicated number of shares of stock issued in the offering, as adjusted in the pro forma net income per share to give effect to the purchase of shares by the employee stock ownership plan;

• pro forma stockholders' equity amounts have been calculated as if the common stock had been sold in the offering on December 31, 2005, and, accordingly, no effect has been given to the assumed earnings effect of the transactions.

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             The following pro forma information may not be representative of the financial effects of the offering at the date on which the offering actually occurs and should not be taken as indicative of future results of operations.

             Pro forma stockholders' equity represents the difference between the stated amount of ViewPoint Financial Group assets and liabilities computed in accordance with U.S. generally accepted accounting principles. Stockholders' equity does not give effect to intangible assets in the event of a liquidation. The pro forma stockholders' equity is not intended to represent the fair market value of the common stock and may be different than amounts that would be available for distribution to stockholders in the event of liquidation.

             The following table presents historical data of ViewPoint Bank's and ViewPoint Financial Group's pro forma data at or for the date and period indicated based on the assumptions set forth above and in the tables and should not be used as a basis for projection of the market value of the common stock following the offering.

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	At or for the year ended December 31, 2005 (Based upon a price of $10.00 per share)
	7,076,250 shares (Minimum of Offering Range)		8,325,000 shares (Midpoint of Offering Range)		9,573,750 shares (Maximum of Offering Range)		11,009,813 shares (Maximum, as adjusted, of Offering Range) (1)
	(In thousands, except share and per share data)
Pro forma market capitalization:
Gross proceeds of public offering	$70,763		$83,250		$95,738		$110,098
Less: offering expenses	(2,379	)	(2,494	)	(2,609	)	(2,741	)
Estimated net proceeds	68,384		80,756		93,129		107,357
Less: common stock acquired by employee             stock ownership plan(2)	(5,661	)	(6,660	)	(7,659	)	(8,808	)
Less: common stock acquired for restricted stock             awards(3)	(2,831	)	(3,330	)	(3,830	)	(4,404	)
Estimated net proceeds, as adjusted	$59,892		$70,766		$81,640		$94,145
Pro forma consolidated net income:
Historical	$2,724		$2,724		$2,724		$2,724
Pro forma income on net proceeds	1,653		1,953		2,253		2,598
Less: pro forma employee stock ownership plan             adjustment(2)	(357	)	(420	)	(483	)	(555	)
Less: pro forma restricted stock adjustment(3)	(357	)	(420	)	(483	)	(555	)
Less: pro forma stock option adjustment(4)	(323	)	(380	)	(437	)	(503	)
Pro forma net income	$3,340		$3,457		$3,574		$3,709
Per share net income:
Historical	$0.18		$0.15		$0.13		$0.12
Pro forma income on net proceeds	0.11		0.11		0.11		0.11
Less: pro forma employee stock ownership plan             adjustment(2)	(0.02	)	(0.02	)	(0.02	)	(0.02	)
Less: pro forma restricted stock adjustment(3)	(0.02	)	(0.02	)	(0.02	)	(0.02	)
Less: pro forma stock option adjustment(4)	(0.02	)	(0.02	)	(0.02	)	(0.02	)
Pro forma net income per share	$0.23		$0.20		$0.18		$0.17
Shares used for calculating pro forma earnings per share	15,215,510		17,900,600		20,585,690		23,673,543
Stock price as a multiple of pro forma earnings per share	45.5	x	52.6	x	58.8	x	62.5x
Pro forma stockholders' equity:
Historical	$101,181		$101,181		$101,181		$101,181
Estimated net proceeds	68,384		80,756		93,129		107,357
Capitalization of MHC	(250	)	(250	)	(250	)	(250	)
Less: common stock acquired by employee             stock ownership plan(2)	(5,661	)	(6,660	)	(7,659	)	(8,808	)
Less: common stock acquired for restricted stock             awards(3)	(2,831	)	(3,330	)	(3,830	)	(4,404	)
Pro forma stockholders' equity	$160,824		$171,697		$182,572		$195,076
Stockholders' equity per share:
Historical	$6.43		$5.47		$4.76		$4.14
Estimated net proceeds	4.35		4.37		4.38		4.39
Less: common stock acquired by employee             stock ownership plan(2)	(0.02	)	(0.01	)	(0.01	)	(0.01	)
Capitalization of MHC	(0.36	)	(0.36	)	(0.36	)	(0.36	)
Less: common stock acquired for restricted stock             awards(3)	(0.18	)	(0.18	)	(0.18	)	(0.18	)
Pro forma stockholders' equity per share	$10.22		$9.29		$8.59		$7.98
Shares used for pro forma stockholders' equity per share	15,725,000		18,500,000		21,275,000		24,466,250
Stock price as a percentage of pro forma stockholders'             equity per share	97.8	%	107.8	%	116.6	%	125.5	%

Footnotes on following page

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________________

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             The following table presents the historical deposits, borrowings and consolidated capitalization of ViewPoint Bank at December 31, 2005, and the approximate pro forma consolidated capitalization of ViewPoint Financial Group after giving effect to the reorganization, excluding assumed earnings on the net proceeds. The pro forma capitalization gives effect to the assumptions listed under "Pro Forma Data" based on the sale of the number of shares of common stock indicated below.

		ViewPoint Financial Group – Pro Forma (Based upon a price of $10.00 per share)
	ViewPoint Bank - Historical Capitalization		7,076,250 shares (Minimum of Offering Range)		8,325,000 shares (Midpoint of Offering Range)		9,573,750 shares (Maximum of Offering Range)		11,009,813 shares (Maximum, as adjusted, of Offering Range)
	(In thousands except share and per share data)
Deposits (1)	$1,261,614		$1,261,614		$1,261,614		$1,261,614		$1,261,614
Borrowings	47,680		47,680		47,680		47,680		47,680
Total deposits and borrowed funds	$1,309,294		$1,309,294		$1,309,294		$1,309,294		$1,309,294
Stockholders' equity
Preferred stock, $0.01 par value,     25,000,000 shares authorized;     none issued	---		---		---		---		---
Common stock, $0.01 par value,     75,000,000 shares authorized;     shares to be issued as reflected (2)	---		$         157		$          185		$          213		$          245
Additional paid-in capital (2)	---		68,227		80,571		92,916		107,112
Retained earnings (3)	$102,413		102,163		102,163		102,163		102,163
Accumulated comprehensive       income/(loss)	(1,232	)	(1,232	)	(1,232	)	(1,232	)	(1,232	)
Less:
Common stock acquired by      employee stock ownership plan (4)	---		(5,661	)	(6,660	)	(7,659	)	(8,808	)
Common stock acquired for      restricted stock awards (5)	---		(2,831	)	(3,330	)	(3,830	)	(4,404	)
Total stockholders' equity	$101,181		$160,823		$171,697		$182,571		$195,076

________________

(1)	Does not reflect withdrawals from deposit accounts for the purchase of common stock in the offering. Such withdrawals would reduce pro forma deposits by the amount of such withdrawals.
(2)	Reflects the issuance of the shares of common stock to be sold in the offering. No effect has been given to the issuance of additional common stock pursuant to the proposed stock-based incentive plan.
(3)	Pro forma retained earnings reduced by $250,000 to fund capitalization of ViewPoint MHC.
(4)	Assumes that a number of shares equal to 3.60% of the shares outstanding after the offering will be acquired by the employee stock ownership plan with funds borrowed from ViewPoint Financial Group and will represent unearned compensation, reflected as a reduction of capital.
(5)	Assumes that a number of shares equal to 1.8% of the shares outstanding after the offering are purchased in the open market by the stock-based incentive plan subsequent to the offering at the purchase price of $10.00 per share.

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             At December 31, 2005, ViewPoint Bank exceeded all of its regulatory capital requirements. On that date, we were a credit union subject to capital requirements imposed by the National Credit Union Administration and the Texas Credit Union Department. Upon our conversion to a federal savings bank on January 1, 2006, ViewPoint Bank became subject to the capital requirements imposed by the Office of Thrift Supervision.

             The following table sets forth the regulatory capital of ViewPoint Bank under regulations of the Office of Thrift Supervision (as if it were subject to those regulations on that date) and the pro forma regulatory capital of ViewPoint Bank under these regulations after giving effect to the offering, based on the assumptions set forth in the table on page __ as to net offering proceeds and the cash cost of the employee stock ownership plan loan. The pro forma regulatory capital amounts reflect the receipt by ViewPoint Bank of 50% of the net proceeds, after expenses. The pro forma risk-based capital amounts assume the investment of the net proceeds received by ViewPoint Bank in assets which have a risk-weight of 20% under applicable regulations, as if the net proceeds had been received and so applied at December 31, 2005.

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				Pro Forma at December 31, 2005
	Historical at December 31, 2005			7,076,250 Shares Sold at $10.00 per share			8,325,000 Shares Sold at $10.00 per share			9,573,750 Shares Sold at $10.00 per share			11,009,813 Shares Sold at $10.00 per share
	Amount	Percent of Assets (1)		Amount	Percent of Assets (1)		Amount	Percent of Assets (1)		Amount	Percent of Assets (1)		Amount	Percent of Assets (1)
	(Dollars in Thousands)
GAAP capital	$101,181	7.09	%	$126,632	8.71	%	$131,319	9.01	%	$136,007	9.30	%	$141,398	9.63	%
Tangible capital	102,413	7.15	%	127,864	8.77	%	132,551	9.06	%	137,239	9.35	%	142,630	9.69	%
Tangible requirement	57,298	4.00		58,316	4.00		58,504	4.00		58,691	4.00		58,907	4.00
Excess capital	$45,115	3.15	%	$69,547	4.77	%	$74,047	5.06	%	$78,548	5.35	%	$83,723	5.69	%
Core capital	102,413	9.57	%	127,864	11.90	%	132,551	12.32	%	137,239	12.75	%	142,630	13.23	%
Core requirement	42,786	4.00		42,990	4.00		43,027	4.00		43,065	4.00		43,108	4.00
Excess capital	$59,627	4.16	%	$84,874	5.82	%	$89,524	6.12	%	$94,174	6.42	%	$99,522	6.76	%
Risk-based capital	110,110	10.29	%	135,561	12.61	%	140,248	13.04	%	144,936	13.46	%	150,327	13.95	%
Risk-based requirement	85,572	8.00		85,979	8.00		86,054	8.00		86,129	8.00		86,215	8.00
Excess capital	$24,538	2.29	%	$49,581	4.61	%	$54,194	5.04	%	$58,807	5.46	%	$64,111	5.95	%

________________

(1)	Based on adjusted total assets or adjusted risk-weighted assets, as appropriate.

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             The board of directors of ViewPoint Bank and the Office of Thrift Supervision have approved the plan of reorganization and stock issuance. Office of Thrift Supervision approval is subject to approval of the plan of reorganization and stock issuance by our members and the satisfaction of certain other conditions imposed by the Office of Thrift Supervision. Office of Thrift Supervision approval does not constitute recommendation or endorsement of the plan.

             The following is a summary of material aspects of the plan of reorganization and stock issuance. The summary is qualified in its entirety by reference to the provisions of the plan of reorganization and stock issuance. Copies of the plan of reorganization and stock issuance are available for inspection at any office of ViewPoint Bank and at the Office of Thrift Supervision. The plan of reorganization and stock issuance is also filed as an exhibit to the Registration Statement of which this prospectus is a part, copies of which may be obtained from the SEC. See "Additional Information."

General

             The board of directors of ViewPoint Bank adopted the plan of reorganization and stock issuance. Under this plan, ViewPoint Bank will reorganize into the federal mutual holding company structure as a wholly owned subsidiary of ViewPoint Financial Group, which in turn will be a majority-owned subsidiary of ViewPoint MHC. Following receipt of all required regulatory approvals, the approval of the members of ViewPoint Bank entitled to vote on the plan of reorganization and stock issuance, and the satisfaction of all other conditions precedent to the reorganization, ViewPoint Bank will complete the reorganization. ViewPoint Bank, in its stock form, will continue to conduct its business and operations from the same offices with the same personnel as ViewPoint Bank conducted prior to the reorganization. The reorganization will not affect the balances, interest rates or other terms of ViewPoint Bank's loans or deposit accounts, and the deposit accounts will continue to be insured by the FDIC. ViewPoint MHC initially will be capitalized with $250,000. When the reorganization is completed, this capital will be used for general corporate purposes.

             Pursuant to the plan of reorganization and stock issuance, we will accomplish our corporate change as follows or in any other manner that is consistent with applicable federal law and regulations and the intent of the plan:

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             ViewPoint Financial Group expects to receive the approval of the Office of Thrift Supervision to become a savings and loan holding company and to own all of the common stock of ViewPoint Bank. ViewPoint Financial Group intends to retain 50% of the net proceeds of the offering. The reorganization will be effected only upon completion of the sale of all of the shares of common stock to be issued pursuant to the plan of reorganization and stock issuance.

Our Reasons for the Corporate Change

             As a mutual institution, ViewPoint Bank has no authority to issue shares of capital stock and consequently has no access to market sources of equity capital. Only by generating and retaining earnings from year to year is ViewPoint Bank able to increase its equity capital position.

             As a stock corporation upon completion of the reorganization, ViewPoint Bank will be organized in the form used by commercial banks, most major corporations and a majority of savings institutions. The ability to raise new equity capital through the issuance and sale of ViewPoint Bank's or ViewPoint Financial Group's capital stock will allow ViewPoint Bank the flexibility to increase its equity capital position more rapidly than by accumulating earnings, and at times deemed advantageous by the board of directors of ViewPoint Bank. It also will support future growth and expanded operations, including increased lending and investment activities, as business and regulatory needs require. The ability to attract new capital also will help ViewPoint Bank address the needs of the communities it serves and enhance its ability to make acquisitions or expand into new businesses. The acquisition alternatives available to ViewPoint Bank are quite limited as a mutual institution because of a requirement in Office of Thrift Supervision regulations that the surviving institution in a merger involving a mutual institution generally must be in mutual form. After the reorganization, ViewPoint Bank will have an increased ability to merge with other mutual and stock institutions and ViewPoint Financial Group may acquire control of other mutual or stock savings associations and retain the acquired institution as a separate subsidiary of ViewPoint Financial Group. Finally, ViewPoint Bank is expected to benefit from its directors and employees having a stock ownership in its business, since that is viewed as an effective performance incentive and a means of attracting, retaining and compensating directors and employees. For a description of the proposed stock-based incentive plan, see "Management."

             Although ViewPoint Bank's ability to raise capital and general business flexibility will be improved by this reorganization, these advantages will be limited by the requirement in applicable laws and regulations that a mutual holding company maintain a majority ownership interest in its savings bank holding company subsidiary. These advantages also will be limited by ViewPoint Financial Group's offering of 45.0% of its to-be-outstanding common stock, which will affect ViewPoint Financial Group's ability to issue additional shares of common stock in the future without additional issuances of stock to ViewPoint MHC.

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             The advantages of the reorganization also could be achieved if ViewPoint Bank were to reorganize into a wholly owned subsidiary of a stock holding company, known as a standard conversion, rather than as a second-tier subsidiary of a mutual holding company. A standard conversion would free ViewPoint Bank from the restrictions on its ability to raise capital which result from the requirement that its mutual holding company maintain a majority ownership interest in ViewPoint Financial Group.

             Office of Thrift Supervision regulations require that savings institutions converting to stock form in a standard conversion sell all of their to-be-outstanding capital stock rather than a minority interest. The amount of equity capital that would be raised in a standard conversion would be substantially more than the amount raised in a minority stock offering by a subsidiary of a mutual holding company. A standard conversion would make it more difficult for ViewPoint Bank to maximize the return on its equity. A standard conversion also would eliminate all aspects of the mutual form of organization. Completion of the reorganization does not eliminate the possibility of ViewPoint MHC converting from mutual to stock form in the future; however, a full conversion is not contemplated at this time.

             After considering the advantages and disadvantages of the reorganization, as well as applicable fiduciary duties and alternative transactions, including a reorganization into a wholly owned subsidiary of a stock holding company rather than as a second-tier subsidiary of a mutual holding company, the board of directors of ViewPoint Bank unanimously approved the reorganization as being in the best interests of ViewPoint Bank and equitable to its account holders.

Effects of the Corporate Change

             General. The reorganization will have no effect on ViewPoint Bank's present business of accepting deposits and investing its funds in loans and other investments permitted by law. The reorganization will not result in any change in the existing services provided to depositors and borrowers, or in existing offices, management and staff. ViewPoint Bank will continue to be subject to regulation, supervision and examination by the Office of Thrift Supervision and the FDIC.

              Deposits and Loans. Each holder of a deposit account in ViewPoint Bank at the time of the reorganization will continue as an account holder in ViewPoint Bank after the reorganization, and the reorganization will not affect the deposit balance, interest rate or other terms of these accounts. Each account will be insured by the FDIC to the same extent as before the reorganization. Depositors in ViewPoint Bank will continue to hold their existing certificates, statements and other evidence of their accounts. The reorganization will not affect the loan terms of any borrower from ViewPoint Bank. The amount, interest rate, maturity, security for and obligations under each loan will remain as they existed prior to the reorganization. See "-- Voting Rights" and "-- Depositors Rights if We Liquidate" below for a discussion of the effects of the reorganization on the voting and liquidation rights of the depositors of ViewPoint Bank.

              Continuity. During the reorganization and stock issuance process, the normal business of ViewPoint Bank of accepting deposits and making loans will continue without interruption. Following completion of the reorganization and stock issuance, ViewPoint Bank will continue to be subject to regulation by the Office of Thrift Supervision, and FDIC insurance of accounts will continue without interruption. After the reorganization and stock issuance, ViewPoint Bank will continue to provide services for depositors and borrowers under current policies and by its present management and staff.

             The board of directors presently serving ViewPoint Bank will serve as the board of directors of ViewPoint Bank after the reorganization and stock issuance. The initial members of the board of directors of ViewPoint Financial Group and ViewPoint MHC will consist of the individuals currently serving on the board of directors of ViewPoint Bank. After the reorganization, the voting stockholders of ViewPoint Financial Group will elect approximately one-third of ViewPoint Financial Group's directors annually, and approximately one-third of the directors of ViewPoint MHC will be elected annually by the members of ViewPoint MHC, who will consist of the former members of ViewPoint Bank who maintain deposits with ViewPoint Bank, and all persons who become depositors of ViewPoint Bank after the reorganization. All current officers of ViewPoint Bank will retain their positions with ViewPoint Bank after the reorganization and stock issuance.

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              Voting Rights. After completion of the reorganization and stock issuance, members will have no voting rights in ViewPoint Bank or ViewPoint Financial Group and, therefore, will not be able to elect directors of ViewPoint Bank or ViewPoint Financial Group or to control their affairs. Currently these rights are held by depositors of ViewPoint Bank. After the reorganization and stock issuance, voting rights for ViewPoint Financial Group will be vested exclusively in the stockholders of ViewPoint Financial Group, which will own all of the stock of ViewPoint Bank. Each holder of common stock will be entitled to vote on any matter to be considered by the stockholders of ViewPoint Financial Group, subject to the provisions of ViewPoint Financial Group's charter.

             As a federally chartered mutual holding company, ViewPoint MHC will have no authorized capital stock and no stockholders. ViewPoint MHC will be controlled by members of ViewPoint Bank. These members may have signed proxies giving their voting rights to ViewPoint Bank's board of directors. The revocable proxies that members of ViewPoint Bank have granted to the board of directors of ViewPoint Bank give the board of directors of ViewPoint Bank general authority to cast a member's vote on any and all matters presented to the members. These proxies are deemed to cover the member's votes as members of ViewPoint MHC, and this authority is given to the board of directors of ViewPoint MHC. The plan of reorganization also provides for the transfer of proxy rights to the board of directors of ViewPoint MHC. As a result, the board of directors of ViewPoint MHC may be able to govern the operations of ViewPoint Bank and ViewPoint Financial Group, notwithstanding objections raised by members of ViewPoint MHC or stockholders of ViewPoint Financial Group, respectively, if the board of directors has been appointed proxy for a majority of the outstanding votes of members of ViewPoint MHC and these proxies have not been revoked. In addition, all persons who become depositors of ViewPoint Bank following the reorganization will have membership rights with respect to ViewPoint MHC.

              Depositors' Rights if We Liquidate. In the event of a voluntary liquidation of ViewPoint Bank prior to the reorganization, holders of deposit accounts in ViewPoint Bank would be entitled to distribution of any assets of ViewPoint Bank remaining after the claims of depositors and all other creditors are satisfied. Following the reorganization, the holder of ViewPoint Bank's common stock, which will be ViewPoint Financial Group, would be entitled to any assets remaining upon a liquidation, dissolution or winding up of ViewPoint Bank and, except through their liquidation interests in ViewPoint MHC, discussed below, holders of deposit accounts in ViewPoint Bank would not have any interest in these assets.

             In the event of a voluntary or involuntary liquidation, dissolution or winding up of ViewPoint MHC following completion of the reorganization, holders of deposit accounts in ViewPoint Bank would be entitled, pro rata to the value of their accounts, to distribution of any assets of ViewPoint MHC remaining after the claims of all creditors of ViewPoint MHC are satisfied. Stockholders of ViewPoint Financial Group will have no liquidation or other rights with respect to ViewPoint MHC solely as stockholders.

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             In the event of a liquidation, dissolution or winding up of ViewPoint Financial Group, each holder of shares of the common stock would be entitled to receive, after payment of all debts and liabilities of ViewPoint Financial Group, a pro rata portion of all assets of ViewPoint Financial Group available for distribution to holders of the common stock.

             There currently are no plans to liquidate ViewPoint Bank, ViewPoint Financial Group or ViewPoint MHC in the future.

              Tax Effects of Our Corporate Change and Stock Offering. ViewPoint Bank has received an opinion from its special counsel, Silver, Freedman & Taff L.L.P., Washington, D.C., as to the material federal income tax consequences of the reorganization and stock issuance to ViewPoint Bank, ViewPoint Financial Group and ViewPoint MHC, and as to the generally applicable material federal income tax consequences of the reorganization and stock issuance to ViewPoint Bank's account holders and to persons who purchase common stock in the offering.

             The opinion provides that, among other things:

• ViewPoint Bank's adoption of a charter in stock form, known as the bank conversion, will qualify as a tax-free reorganization under Internal Revenue Code of 1986, as amended, Section 368(a)(1)(F);

• no gain or loss will be recognized by ViewPoint Bank or the stock bank in the bank conversion;

• no gain or loss will be recognized by the depositors of ViewPoint Bank on the receipt of equity interests with respect to ViewPoint MHC in exchange for their equity interests surrendered therefor;

• the receipt of stock by depositors for equity interests in ViewPoint MHC will constitute a tax-free exchange of property solely for voting "stock" pursuant to Internal Revenue Code Section 351;

• the transfer by ViewPoint MHC of the stock bank's stock to ViewPoint Financial Group will constitute a tax-free exchange of property solely for voting stock pursuant to Internal Revenue Code Section 351;

• ViewPoint MHC will recognize no gain or loss upon the transfer of the stock bank stock to ViewPoint Financial Group in exchange for common stock pursuant to Internal Revenue Code Section 351;

• ViewPoint Financial Group will recognize no gain or loss upon its receipt of stock bank stock from ViewPoint MHC in exchange for common stock;

• ViewPoint Financial Group will recognize no gain or loss upon the receipt of money in exchange for shares of common stock;

• no gain or loss will be recognized by ViewPoint Bank's account holders upon the issuance to them of accounts in the stock bank in stock form immediately after the reorganization and stock issuance, in the same dollar amounts and on the same terms and conditions as their accounts at ViewPoint Bank immediately prior to the reorganization and stock issuance; and

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• it is more likely than not that no gain or loss will be recognized to account holders upon the receipt or exercise of subscription rights in the reorganization and stock issuance, as discussed below.

             The opinion of Silver, Freedman & Taff, L.L.P. is based in part upon, and subject to the continuing validity in all material respects through the date of the reorganization and stock issuance of, various representations of ViewPoint Bank and upon certain assumptions and qualifications, including that the reorganization and stock issuance are completed in the manner and according to the terms provided in the plan of reorganization and stock issuance. This opinion is also based upon the Internal Revenue Code, regulations now in effect, current administrative rulings and practice and judicial authority, all of which are subject to change and any change may be made with retroactive effect. Unlike private letter rulings received from the IRS, an opinion is not binding upon the IRS and there can be no assurance that the IRS will not take a position contrary to the positions reflected in this opinion, or that this opinion will be upheld by the courts if challenged by the IRS.

             ViewPoint Bank also has obtained an opinion from Crowe Chizek and Company LLC that the income tax effects of the reorganization and stock issuance under Texas tax laws will be substantially the same as described above with respect to federal income tax laws.

             ViewPoint Financial Group and ViewPoint Bank have received a letter from Feldman Financial Advisors, stating its belief that the subscription rights do not have any value, based on the fact that these rights are acquired by the recipients without cost, are nontransferable and of short duration, and give the recipients the right only to purchase the common stock at a price equal to its estimated fair market value, which will be the same price as the purchase price for the unsubscribed shares of common stock. If the subscription rights granted to eligible subscribers are deemed to have an ascertainable value, receipt of these rights would be taxable probably only to those eligible subscribers who exercise the subscription rights, either as a capital gain or ordinary income, in an amount equal to such value, and ViewPoint Financial Group and ViewPoint Bank could recognize gain on any distribution. Eligible subscribers are encouraged to consult with their own tax advisor as to the tax consequences in the event that subscription rights are deemed to have an ascertainable value. Unlike private rulings, the letter of Feldman Financial Advisors is not binding on the IRS, and the IRS could disagree with conclusions reached in the letter. In the event of any disagreement, there can be no assurance that the IRS would not prevail in a judicial or administrative proceeding.

How We Determined Our Price and the Number of Shares to be Issued in the Stock Offering

             The plan of reorganization and stock issuance requires that the purchase price of the common stock must be based on the appraised pro forma market value of ViewPoint Financial Group and ViewPoint Bank, as determined on the basis of an independent valuation. ViewPoint Bank has retained Feldman Financial Advisors to make this valuation. For its services in making this appraisal, Feldman Financial Advisors' fees and out-of-pocket expenses are estimated to be $65,000. ViewPoint Bank has agreed to indemnify Feldman Financial Advisors and any employees of Feldman Financial Advisors who act for or on behalf of Feldman Financial Advisors in connection with the appraisal against any and all loss, cost, damage, claim, liability or expense of any kind, including claims under federal and state securities laws, arising out of any misstatement or untrue statement of a material fact or an omission to state a material fact in the information supplied by ViewPoint Bank to Feldman Financial Advisors, unless Feldman Financial Advisors is determined to be negligent or otherwise at fault.

             An appraisal has been made by Feldman Financial Advisors in reliance upon the information contained in this prospectus, including the financial statements. Feldman Financial Advisors also considered the following factors, among others:

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• the present and projected operating results and financial condition of ViewPoint Financial Group and ViewPoint Bank, which were prepared by ViewPoint Bank then adjusted by Feldman Financial Advisors to reflect the net proceeds of this offering and the economic and demographic conditions in ViewPoint Bank's existing market areas as prepared by ViewPoint Bank;

• certain historical, financial and other information relating to ViewPoint Bank, which were prepared by ViewPoint Bank;

• the impact of the reorganization on ViewPoint Bank's net worth and earnings potential as calculated by Feldman Financial Advisors; and

• the proposed dividend policy of ViewPoint Financial Group and ViewPoint Bank.

             The appraisal also incorporated an analysis of a peer group of publicly traded thrift mutual holding companies that Feldman Financial Advisors considered to be comparable to ViewPoint Financial Group. The peer group analysis conducted by Feldman Financial Advisors included a total of 11 publicly traded thrift holding companies. The analysis of comparable publicly traded mutual holding companies included an evaluation of the average and median price-to-earnings and price-to-book value ratios indicated by the market prices of the peer companies. Feldman Financial Advisors applied the peer group's pricing ratios as adjusted for certain qualitative valuation factors to account for differences between ViewPoint Financial Group and the peer group, to ViewPoint Financial Group's pro forma earnings and book value to derive the estimated pro forma market value of ViewPoint Financial Group on a fully converted basis.

             In its review of the appraisal provided by Feldman Financial Advisors, the board of directors reviewed the methodologies and the appropriateness of the assumptions used by Feldman Financial Advisors in addition to the factors listed above, and the board of directors believes that these assumptions were reasonable.

             On the the basis of the foregoing, Feldman Financial Advisors has advised ViewPoint Financial Group that, in its opinion dated March 31, 2006, the estimated pro forma market value of the common stock on a fully converted basis, ranged from a minimum of $157.3 million to a maximum of $212.8 million with a midpoint of $185.0 million. The board of directors of ViewPoint Financial Group determined that the common stock should be sold at $10.00 per share. Based on the estimated pro forma market value and the purchase price, the number of shares of common stock that ViewPoint Financial Group will issue will range from between 15,725,000 shares and 21,275,000 shares, with a midpoint of 18,500,000 shares. The board determined to offer 45.0% of these shares, or between 7,076,250 shares and 9,573,750 shares with a midpoint of 8,325,000 shares, the "estimated offering range," to depositors and the public pursuant to this prospectus. After the offering, purchasers in the offering will own 45.0% and ViewPoint MHC will own 55.0% of ViewPoint Financial Group's outstanding shares of common stock. The estimated offering range may be amended with the approval of the Office of Thrift Supervision or if necessitated by subsequent developments in the financial condition of ViewPoint Financial Group or market conditions generally. In the event the estimated market value is updated to amend the value of the ViewPoint Financial Group on a fully converted basis below $157.3 million or above $244.7 million, which is the maximum of the estimated valuation range, as adjusted by 15%, a new appraisal will be filed with the Office of Thrift Supervision.

             Based upon current market and financial conditions and recent practices and policies of the Office of Thrift Supervision, in the event ViewPoint Financial Group receives orders for common stock in excess of $95.7 million, the maximum of the estimated offering range, and up to $110.1 million, the maximum of the estimated offering range, as adjusted by 15%, ViewPoint Financial Group may be required by the Office of Thrift Supervision to accept all such orders. No assurances, however, can be made that ViewPoint Financial Group will receive orders for common stock in excess of the maximum of the estimated offering range or that, if these orders are received, that all these orders will be accepted because ViewPoint Financial Group's final valuation and number of shares to be issued are subject to the receipt of an updated appraisal from Feldman Financial Advisors, which reflects the increase in the valuation and the approval of the increase by the Office of Thrift Supervision. In addition, an increase in the number of shares above 9,573,750 shares, will first be used, if necessary, to fill the order of the employee stock ownership plan. There is no obligation or understanding on the part of management to take and/or pay for any shares in order to complete the offering.

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             The following table presents a summary of selected pricing ratios for the peer group companies and for ViewPoint Financial Group on a non-fully converted basis as of and for the year ended December 31, 2005. The peer group, which consists of 11 publicly traded thrift holding companies, which are all in mutual holding company form, includes companies that range in asset size from $543.8 million to $2.1 billion and have market capitalizations ranging from $76.9 million to $996.3 million. Compared to the average pricing ratios of the peer group, our pro forma pricing ratios at the maximum of the offering range indicated a premium of 44.4% on a price-to-earnings basis and a discount of 41.1% on a price-to-book basis. The estimated appraised value and the resulting discounts took into consideration the potential financial impact of the offering. Since not all mutual holding companies retained 55% of the total shares issued, and some have repurchased shares, a distortion of the price to earnings multiples and price to book value ratios may be present.

             The financial impact of the offering includes the gross proceeds of the offering, less offering expenses and the effects of the benefit plans we expect to implement. Earnings used in the calculation of the price-to-earnings ratio are defined as our earnings for the year ended December 31, 2005, plus the financial impact of the offering. The financial impact of the offering includes the pro forma after-tax income generated from the reinvestment of the net proceeds of the offering, less the expense related to the benefit plans.

             The following table presents a summary of selected pricing ratios for the peer group companies and ViewPoint Financial Group with the ratios adjusted to the hypothetical case of being fully converted. Compared to the average fully converted pricing ratios of the peer group, our pro forma fully converted pricing ratios at the maximum of the offering range indicated a premium of 27.1% on a price-to-earnings basis and a discount of 22.5% on a price-to-book basis. Feldman Financial Advisors' calculations of the fully converted pricing multiples for the peer group companies assume the pro forma impact of selling the mutual holding company shares of each of the peer group companies at their respective trading prices as of March 31, 2006. Feldman Financial Advisors' calculation of our fully converted pricing ratios assumes the pro forma impact of selling 100% of the shares to be outstanding at $10.00 per share.

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	Fully Converted Price to Earnings Multiple	Fully Converted Price to Book Value Ratio
ViewPoint Financial Group
Maximum	41.7x	74.7%
Minimum	35.7x	66.5%
Valuation of peer group companies as of March 31, 2006 (1)
Averages	32.8x	96.4%
Medians	28.1x	95.7%
____________ (1) Reflects earnings and equity as of or for the most recent 12-month period.

              Feldman Financial Advisors' valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing these shares. Feldman Financial Advisors did not independently verify the consolidated financial statements and other information provided by ViewPoint Financial Group, nor did Feldman Financial Advisors value independently the assets or liabilities of ViewPoint Financial Group. The valuation considers ViewPoint Financial Group as a going concern and should not be considered as an indication of the liquidation value of ViewPoint Financial Group. Moreover, because this valuation is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons purchasing common stock in the offerings will thereafter be able to sell such shares at prices at or above the purchase price or in the range of the valuation described above.

             Prior to completion of the offering, the maximum of the estimated offering range may be increased up to 15% and the number of shares of common stock offered may be increased to 11,009,813 shares to reflect changes in market and financial conditions or to fill the order of the employee stock ownership plan, without the resolicitation of subscribers. See "- Limitations on Stock Purchases" as to the method of distribution and allocation of additional shares that may be issued in the event of an increase in the estimated offering range to fill unfilled orders in the subscription offering.

             No sale of shares of common stock in the offering may be completed unless, prior to the completion, Feldman Financial Advisors confirms that nothing of a material nature has occurred which, taking into account all relevant factors, would cause it to conclude that the aggregate value of the common stock to be issued is materially incompatible with the estimate of the aggregate consolidated pro forma market value of ViewPoint Financial Group. If this confirmation is not received, ViewPoint Financial Group may cancel the offering, extend the offering period and establish a new estimated offering range and/or estimated price range, extend, reopen or hold a new offering or take any other action the Office of Thrift Supervision may permit.

             Depending upon market or financial conditions following the start of the subscription offering, the total number of shares of common stock may be increased or decreased without a resolicitation of subscribers, provided that the product of the total number of shares times the purchase price is not below the minimum or more than 15% above the maximum of the estimated offering range. In the event market or financial conditions change so as to cause the aggregate purchase price of the shares to be below the minimum of the estimated offering range or more than 15% above the maximum of such range, purchasers will be resolicited and be permitted to continue their orders, in which case they will need to reconfirm their subscriptions prior to the expiration of the resolicitation offering or their subscription funds will be promptly refunded with interest at ViewPoint Bank's statement savings rate of interest, or be permitted to modify or rescind their subscriptions. Any change in the estimated offering range must be approved by the Office of Thrift Supervision.

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             An increase in the number of shares of common stock as a result of an increase in the estimated pro forma market value would decrease both a subscriber's ownership interest and ViewPoint Financial Group's pro forma net income and stockholders' equity on a per share basis while increasing pro forma net income and stockholders' equity on an aggregate basis. A decrease in the number of shares of common stock would increase both a subscriber's ownership interest and ViewPoint Financial Group's pro forma net income and stockholders' equity on a per share basis while decreasing pro forma net income and stockholders' equity on an aggregate basis. See "Risk Factors – The implementation of stock-based incentive plans may dilute your ownership interest" and "Pro Forma Data."

             Copies of the appraisal report of Feldman Financial Advisors, including any amendments, and the detailed report of the appraiser setting forth the method and assumptions for the appraisal are available for inspection at the main office of ViewPoint Bank and the other locations specified under "Additional Information."

Subscription Offering and Subscription Rights

             Under the plan of reorganization and stock issuance, rights to subscribe for the purchase of common stock have been granted to the following persons in the following order of descending priority:

• depositors of ViewPoint Bank with account balances of at least $50 as of the close of business on December 31, 2004 ("Eligible Account Holders");

• tax-qualified employee plans ("Tax-Qualified Employee Plans");

• depositors of ViewPoint Bank, other than directors and officers of ViewPoint Bank, with account balances of at least $50 as of the close of business on March 31, 2006 ("Supplemental Eligible Account Holders"); and

• depositors of ViewPoint Bank as of the close of business on ________ __, 2006 ("Other Members").

All subscriptions received will be subject to the availability of common stock after satisfaction of all subscriptions of all persons having prior rights in the subscription offering and to the maximum and minimum purchase limitations set forth in the plan of reorganization and stock issuance and as described below under "- Limitations on Stock Purchases."

              Preference Category No. 1: Eligible Account Holders. Each Eligible Account Holder shall receive, without payment, first priority, nontransferable subscription rights to subscribe for shares of common stock in an amount equal to the greater of:

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See "- Limitations on Stock Purchases."

             If there are not sufficient shares available to satisfy all subscriptions, shares first will be allocated among subscribing Eligible Account Holders so as to permit each such Eligible Account Holder, to the extent possible, to purchase a number of shares sufficient to make his total allocation equal to the lesser of the number of shares subscribed for, or 100 shares. Thereafter, any shares remaining after each subscribing Eligible Account Holder has been allocated the lesser of the number of shares subscribed for or 100 shares will be allocated among the subscribing Eligible Account Holders whose subscriptions remain unfilled pro rata in the proportion that the amounts of their respective qualifying deposits bear to the total amount of qualifying deposits of all subscribing Eligible Account Holders whose subscriptions remain unfilled. For example, if an Eligible Account Holder with an unfilled subscription has qualifying deposits totaling $100, and the total amount of qualifying deposits for Eligible Account Holders with unfilled subscriptions was $1,000, then the number of shares that may be allocated to fill this Eligible Account Holder's subscription would be 10% of the shares remaining available, up to the amount subscribed for. Subscription Rights of Eligible Account Holders will be subordinated to the priority rights of Tax-Qualified Employee Plans to purchase shares in excess of the maximum of the estimated offering range.

             To ensure proper allocation of stock, each Eligible Account Holder must list on his subscription order form all accounts in which he has an ownership interest. Failure to list an account could result in fewer shares being allocated than if all accounts had been disclosed. The subscription rights of Eligible Account Holders who are also directors or officers of ViewPoint Financial Group and ViewPoint Bank or their associates will be subordinated to the subscription rights of other Eligible Account Holders to the extent attributable to increased deposits in the year preceding December 31, 2004.

              Preference Category No. 2: Tax-Qualified Employee Plans. Each Tax-Qualified Employee Plan, including the employee stock ownership plan, shall be entitled to receive, without payment, second priority, nontransferable subscription rights to purchase up to 10% of the common stock, provided that individually or in the aggregate such plans (other than that portion of such plans which is self-directed) shall not purchase more than 10% of the shares of common stock, including any increase in the number of shares of common stock after the date hereof as a result of an increase of up to 15% in the maximum of the estimated offering range. The employee stock ownership plan intends to purchase 3.6% of the shares of common stock to be outstanding following completion of the offering or 8.0% of the shares issued in the offering (excluding shares issued to ViewPoint MHC), or 765,000 shares and 957,375 shares based on the minimum and maximum of the estimated offering range, respectively. Subscriptions by any of the Tax-Qualified Employee Plans will not be aggregated with shares of common stock purchased directly by or which are otherwise attributable to any other participants in the subscription and direct community offerings, including subscriptions of any of ViewPoint Bank's directors, officers, employees or associates thereof. Subscription rights received pursuant to this category shall be subordinated to all rights received by Eligible Account Holders to purchase shares pursuant to category No.1; provided, however, that notwithstanding any other provision of the plan of reorganization and stock issuance to the contrary, the Tax-Qualified Employee Plans shall have a first priority subscription right to the extent that the total number of shares of common stock sold in the offering exceeds the maximum of the estimated offering. In the event that the total number of shares offered in the offering is increased to an amount greater than the number of shares representing the maximum of the estimated offering range, each Tax-Qualified Employee Plan will have a priority right to purchase any such shares exceeding the maximum of the estimated offering range up to an aggregate of 10% of the common stock sold in the offering. See "Management - Benefits -- Employee Stock Ownership Plan."

              Preference Category No. 3: Supplemental Eligible Account Holders. To the extent that there are sufficient shares remaining after satisfaction of subscriptions by Eligible Account Holders and the Tax-Qualified Employee Plans, each Supplemental Eligible Account Holder shall be entitled to receive, without payment, third priority, nontransferable subscription rights to subscribe for shares of common stock in an amount equal to the greater of:

See "- Limitations on Stock Purchases."

             If there are not sufficient shares available to satisfy all subscriptions of all Supplemental Eligible Account Holders, available shares first will be allocated among subscribing Supplemental Eligible Account Holders so as to permit each such Supplemental Eligible Account Holder, to the extent possible, to purchase a number of shares sufficient to make his total allocation (including the number of shares, if any, allocated in accordance with Category No.1) equal to the lesser of the number of shares subscribed for or 100 shares. Thereafter, any shares remaining available will be allocated pro rata among the Supplemental Eligible Account Holders whose subscriptions remain unfilled in the proportion that the amounts of their respective qualifying deposits bear to the total amount of qualifying deposits of all subscribing Supplemental Eligible Account Holders whose subscriptions remain unfilled.

              Preference Category No. 4: Other Members. To the extent that there are sufficient shares remaining after satisfaction of subscriptions by Eligible Account Holders, the Tax-Qualified Employee Plans and Supplemental Eligible Account Holders, each Other Member shall receive, without payment, fourth priority, nontransferable subscription rights to subscribe for shares of ViewPoint Financial Group common stock, up to the greater of $400,000 or 40,000 shares of common stock or one-tenth of one percent of the total offering of shares of common stock in the offerings, subject to the overall purchase limitations. See "-- Limitations on Stock Purchases."

             In the event the Other Members subscribe for a number of shares which, when added to the shares subscribed for by Eligible Account Holders, the Tax-Qualified Employee Plans and Supplemental Eligible Account Holders, is in excess of the total number of shares of common stock offered in the Stock Offering, available shares will be allocated among the subscribing Other Members pro rata in the same proportion that the Other Member's number of votes on the voting record date for approval of the plan of reorganization and stock issuance bears to the total number of votes on the voting record date of all subscribing Other Members on that date.

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              Expiration Date for the Subscription Offering. The subscription offering will expire at 12:00 noon, Plano, Texas time, on _________ __, 2006 (the "subscription expiration date"), unless extended for up to 45 days or for such additional periods by ViewPoint Financial Group as may be approved by the Office of Thrift Supervision. Subscription rights that have not been exercised prior to the subscription expiration date (unless extended) will become void.

             We will not execute orders until at least the minimum number of shares of common stock, 7,076,250 shares, have been subscribed for or otherwise sold. If all shares have not been subscribed for or sold within 45 days after the subscription expiration date, unless this period is extended with the consent of the Office of Thrift Supervision, all funds delivered to us pursuant to the subscription offering will be returned promptly to the subscribers with interest and all withdrawal authorizations will be canceled. If an extension beyond the 45-day period following the subscription expiration date is granted, we will notify subscribers of the extension of time and of any rights of subscribers to modify or rescind their subscriptions.

Direct Community Offering

             To the extent that shares remain available for purchase after satisfaction of all subscriptions of Eligible Account Holders, the Tax-Qualified Employee Plans, Supplemental Eligible Account Holders and Other Members, we anticipate we will offer shares pursuant to the plan of reorganization to members of the general public who receive a prospectus, with a preference given to natural persons residing in Collin, Dallas, Denton, Grayson, Rockwall and Tarrant counties in Texas. These natural persons are referred to as preferred subscribers. Persons, together with an associate or group of persons acting in concert with such persons, may not subscribe for or purchase more than $400,000 of common stock in the direct community offering, if any. We may limit total subscriptions in the direct community offering so as to assure that the number of shares available for the public offering may be up to a specified percentage of the number of shares of common stock. Finally, we may reserve shares offered in the direct community offering for sales to institutional investors. The opportunity to subscribe for shares of common stock in any direct community offering will be subject to our right, in our sole discretion, to accept or reject any such orders in whole or in part from any person either at the time of receipt of an order or as soon as practicable following the subscription expiration date. The direct community offering, if any, shall commence concurrently with, during or promptly after the subscription offering and shall not be for more than 45 days after the end of the subscription offering.

             In the event of an oversubscription for shares in the direct community offering, shares may be allocated, to the extent shares remain available, first to each preferred subscriber whose order is accepted by us. Thereafter, shares may be allocated to cover the orders of any other person subscribing for shares in the direct community offering so that each such person subscribing for shares may receive 1,000 shares, if available, and thereafter on a pro rata basis to such person based on the amount of their respective subscriptions.

Public Offering

             As a final step in the offering, the plan of reorganization and stock issuance provides that, if feasible, all shares of common stock not purchased in the subscription offering and direct community offering may be offered for sale to selected members of the general public in a public offering through our marketing agent, Keefe, Bruyette and Woods. We call this the public offering. It is expected that a public offering, if any, would commence as soon as practicable after termination of the subscription offering and the direct community offering. We, in our sole discretion, have the right to reject orders in whole or in part received in the public offering. Neither Keefe, Bruyette & Woods nor any registered broker-dealer shall have any obligation to take or purchase any shares of common stock in the public offering; however, Keefe, Bruyette & Woods has agreed to use its best efforts in the sale of shares in the public offering.

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             The price at which common stock is sold in the public offering will be the same price at which shares are offered and sold in the subscription offering and direct community offering. Subject to the overall purchase limitations, no person by himself or herself may purchase more than $400,000 or 40,000 shares of common stock in the public offering. See "- Limitations on Stock Purchases."

             Keefe, Bruyette & Woods may enter into agreements with broker-dealers to assist in the sale of the shares in the public offering, although no such agreements exist as of the date of this prospectus. No orders may be placed or filled by or for a selected dealer during the subscription offering. After the close of the subscription offering, Keefe, Bruyette & Woods will instruct selected dealers as to the number of shares to be allocated to each selected dealer. Only after the close of the subscription offering and upon allocation of shares to selected dealers may selected dealers take orders from their customers. During the subscription offering and direct community offering, selected dealers only may solicit indications of interest from their customers to place orders with us as of a certain order date for the purchase of shares of ViewPoint Financial Group common stock. When, and if, Keefe, Bruyette & Woods and we believe that enough indications of interest and orders have not been received in the subscription offering and direct community offering to consummate the reorganization, Keefe, Bruyette & Woods will request, as of the order date, selected dealers to submit orders to purchase shares for which they have previously received indications of interest from their customers. Selected dealers will send confirmations of the orders to such customers on the next business day after the order date. Selected dealers will debit the accounts of their customers on the settlement date, which date will be three business days from the order date. Customers who authorize selected dealers to debit their brokerage accounts are required to have the funds for payment in their account on but not before the settlement date. On the settlement date, selected dealers will deposit funds to the account established at ViewPoint Bank for each selected dealer. Each customer's funds forwarded to one of these accounts, along with all other accounts held in the same title, will be insured by the FDIC up to $100,000 in accordance with applicable regulations. After payment has been received by us from selected dealers, funds will earn interest at ViewPoint Bank's statement savings rate until the completion or termination of the offering. Funds will be promptly returned, with interest, in the event the offering is not completed as described above.

             The public offering will be completed within 45 days after the termination of the subscription offering, unless extended by us with the approval of the Office of Thrift Supervision. See "- How We Determined Our Price and the Number of Shares to be Issued in the Stock Offering" above for a discussion of rights of subscribers, if any, in the event an extension is granted.

Persons Who are Not Permitted to Participate in the Stock Offering

             We will make reasonable efforts to comply with the securities laws of all states in the United States in which persons entitled to subscribe for stock pursuant to the plan of reorganization and stock issuance reside. We are not required, however, to offer stock in the subscription offering to any person who resides in a foreign country or resides in a state of the United States with respect to which:

• the number of persons otherwise eligible to subscribe for shares under the plan of reorganization and stock issuance who reside in such jurisdiction is small; or

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• the granting of subscription rights or the offer or sale of shares of common stock to such persons would require us or any of our officers, directors or employees, under the laws of such jurisdiction, to register as a broker, dealer, salesman or selling agent or to register or otherwise qualify ViewPoint Financial Group securities for sale in such jurisdiction or to qualify as a foreign corporation or file a consent to service of process in such jurisdiction; and

• such registration, qualification or filing in our judgment would be impracticable or unduly burdensome for reasons of cost or otherwise.

Where the number of persons eligible to subscribe for shares in one state is small, we will base our decision as to whether or not to offer the common stock in that state on a number of factors, including but not limited to the size of accounts held by account holders in the state, the cost of registering or qualifying the shares, or the need for us, or our officers, directors or employees to register as brokers, dealers or salesmen.

Limitations on Stock Purchases

             The stock plan includes the following limitations on the number of shares of ViewPoint Financial Group common stock that may be purchased in the offering:

• $400,000 or 40,000 shares of common stock;

• one-tenth of one percent of the total offering of shares of common stock; or

• 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be issued by a fraction, of which the numerator is the amount of the qualifying deposit of the Eligible Account Holder and the denominator is the total amount of qualifying deposits of all Eligible Account Holders in ViewPoint Bank in each case as of the close of business on the Eligibility Record Date, subject to the overall limitation in clause (7) below;

• $400,000 or 40,000 shares of common stock;

• one-tenth of one percent of the total offering of shares of common stock; or

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• 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be issued by a fraction, of which the numerator is the amount of the qualifying deposit of the Supplemental Eligible Account Holder and the denominator is the total amount of qualifying deposits of all Supplemental Eligible Account Holders in ViewPoint Bank in each case as of the close of business on the Supplemental Eligibility Record Date, subject to the overall limitation in clause (7) below;

             Depending on the amount of shares subscribed for in this offering, and based upon market and financial conditions, we may increase or decrease these purchase limits, subject to regulatory approval, if required.

             Subject to any required regulatory approval and the requirements of applicable laws and regulations, our board of directors may, in its sole discretion, increase the individual amount permitted to be subscribed for to a maximum of 9.99% of the number of shares sold in the offering, provided that orders for shares exceeding 5% of the shares being offered in the offering shall not exceed, in the aggregate, 10% of the shares being offered in the offering. Requests to purchase additional shares of common stock will be allocated by our board of directors on a pro rata basis giving priority in accordance with the preference categories set forth in this prospectus.

             The term "associate" when used to indicate a relationship with any person means:

• any corporation or organization (other than ViewPoint Financial Group, ViewPoint Bank and ViewPoint MHC or a majority-owned subsidiary of any of them) of which the person is a director, officer or partner or is directly or indirectly the beneficial owner of 10% or more of any class of equity securities;

• any trust or other estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or in a similar fiduciary capacity;

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• any relative or spouse of the person, or any relative of the spouse, who has the same home as the person or who is a director or officer of ViewPoint Financial Group, ViewPoint Bank or ViewPoint MHC or a subsidiary or affiliate of any of them; and

• any person acting in concert with any of the persons or entities specified above;

provided, however, that any employee plans (whether tax-qualified or not) shall not be deemed to be an associate of any director or officer of ViewPoint Financial Group, ViewPoint Bank or ViewPoint MHC, to the extent provided in the plan of reorganization and stock issuance. When used to refer to a person other than an officer or director of ViewPoint Financial Group, ViewPoint Bank or ViewPoint MHC, our board of directors, or officers delegated by our board of directors, in their sole discretion may determine the persons that are associates of other persons.

             The term "acting in concert" is defined to mean knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not pursuant to an express agreement, or a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. A person or company that acts in concert with another person or company also shall be deemed to be acting in concert with any person or company who is also acting in concert with that other party, except that the Tax-Qualified Employee Plans will not be deemed to be acting in concert with their trustees or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by each plan will be aggregated. The determination of whether a group is acting in concert shall be made solely by our board of directors, or officers delegated by our board of directors, and may be based on any evidence upon which such board or delegatee chooses to rely.

General

             On January 1, 2006, ViewPoint Bank converted its charter from a state-chartered credit union to a federally chartered savings bank. On that date the name was changed from Community Credit Union to ViewPoint Bank, and we became a taxable organization.

             Our principal business has historically consisted of attracting deposits from the general public and the business community and making loans secured by various types of collateral, including real estate, automobiles and general business assets. ViewPoint Bank is significantly affected by prevailing economic conditions as well as government policies and regulations concerning, among other things, monetary and fiscal affairs, housing and financial institutions. Deposit flows are influenced by a number of factors, including interest rates paid on competing investments, account maturities, fee structures, and level of personal income and savings. Lending activities are influenced by the demand for funds, the number and quality of lenders, and regional economic cycles. Sources of funds for lending activities of ViewPoint Bank include deposits, borrowings, payments on loans, maturities of securities and income provided from operations. ViewPoint Bank's earnings are primarily dependent upon our net interest income, the difference between interest income and interest expense.

             Interest income is a function of the balances of loans and investments outstanding during a given period and the yield earned on these loans and investments. Interest expense is a function of the amount of deposits and borrowings outstanding during the same period and interest rates paid on these deposits and borrowings. ViewPoint Bank's earnings are also affected by our provision for loan losses, service charges and fees, gains from sales of loans, commission income, other income, operating expenses and income taxes.

             In connection with the audit of our 2003, 2004 and 2005 financial statements, our independent auditing firm issued a letter to our audit committee identifying four material weaknesses in our internal control over financial reporting. These weaknesses related to (i) our classification of collateral-in-process loans as foreclosed assets and charging off the difference between the carrying value of the loan and the estimated value of the foreclosed asset, (ii) the need to update our historical charge-off experience to reflect current conditions in connection with our allowance for loan loss estimates, (iii) our timing for recording charge-offs against the allowance for loan losses, and (iv) our system for providing access to our FedLine controls. We have addressed the weaknesses identified in (i), (ii) and (iii) above, by having made adjustments to our allowance for loan loss calculations and the timing of our charge-offs in connection with the 2005 audit, and are in the process of instituting monitoring systems to ensure that all FedLine wire controls and access are appropriately limited. We believe that the steps we have taken adequately address the material weaknesses identified by our independent registered public accountants. The effectiveness of the steps we have taken and are in the process of taking to correct the material weaknesses in our internal controls over financial reporting is subject to continued management review and supported by confirmation and testing as well as audit committee oversight.

Critical Accounting Policies

             Certain of our accounting policies are important to the portrayal of our financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances. Facts and circumstances which could affect these judgments include, but are not limited to, changes in interest rates, changes in the performance of the economy and changes in the financial condition of borrowers. Management believes that its critical accounting policies include determining the allowance for loan losses, accounting for mortgage servicing rights and accounting for deferred income taxes. Our accounting policies are discussed in detail in Note 1 of the Notes to Consolidated Financial Statements.

              Allowance for Loan Loss. We believe that the allowance for loan losses and related provision expense are particularly susceptible to change in the near term, as a result of changes in our credit quality, which are evidenced by charge-offs and nonperforming loan trends. Our loan mix is also changing as we increase our emphasis on real estate and commercial business lending. Generally, one- to four-family residential real estate lending has a lower credit risk profile compared to consumer lending such as automobile loans. Commercial real estate and business lending, however, has a higher credit risk profile due to these loans being larger in amount and non-homogenous. In addition, due to changes in the bankruptcy laws during the fourth quarter of 2005, ViewPoint Bank has experienced an increase in bankruptcy filings. The increase in filings impacted the allowance for loan loss and provision expense for 2005, and may continue to do so in 2006, as these cases work their way through the court process. Changes in economic conditions, the mix and size of the loan portfolio and individual borrower conditions can dramatically impact our level of allowance for loan losses in relatively short periods of time. Management believes that the allowance for loan losses is maintained at a level that represents our best estimate of probable losses in the loan portfolio. While management uses available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review our allowance for loan losses. These agencies may require us to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examination.

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             Management evaluates current information and events regarding a borrower's ability to repay its obligations and considers a loan to be impaired when the ultimate collectibility of amounts due, according the contractual terms of the loan agreement, is in doubt. If the loan is collateral-dependent, the fair value of the collateral is used to determine the amount of impairment. Impairment losses are included in the allowance for loan losses through a charge to the provision for loan losses.

             Subsequent recoveries are credited to the allowance for loan losses. Cash receipts for accruing loans are applied to principal and interest under the contractual terms of the loan agreement. Cash receipts on impaired loans for which the accrual of interest has been discontinued are applied first to principal and then to interest income.

              Mortgage Servicing Rights. We record mortgage servicing rights on loans sold with servicing retained. ViewPoint Bank stratifies its mortgage servicing rights that are capitalized based on one or more of the predominant risk characteristics of the underlying loans. Impairment is recognized through a valuation allowance for each impaired stratum. ViewPoint Bank assesses the carrying value of its mortgage servicing rights periodically in order to determine if its rights are impaired. Any impairment would be required to be recorded during the period identified. ViewPoint Bank's mortgage servicing rights totaled $2.1 million as of December 31, 2005. If our mortgage servicing rights were determined to be impaired, our financial results could be impacted.

              Deferred Income Taxes. After converting to a federally chartered savings association, effective January 1, 2006, ViewPoint Bank became a taxable organization. The Internal Revenue Code and applicable regulations are subject to interpretation with respect to the determination of the tax basis of assets and liabilities for credit unions that convert charters and become a taxable organization. Since our transition to a federally chartered thrift, ViewPoint Bank has recorded income tax expense based upon management's interpretation of the applicable tax regulations. On January 1, 2006, a net deferred tax asset of $6.7 million was established as a result of timing differences for certain items, including depreciation of premises and equipment, bad debt deductions, and mortgage servicing rights. Positions taken by ViewPoint Bank in preparing our federal and state tax returns are subject to the review of taxing authorities, and the review of the positions we have taken by taxing authorities could result in a material adjustment to our financial statements.

Business Strategy

             Historically, we were a Texas-chartered, community credit union. We concentrated our lending efforts on the origination of direct and indirect automobile lending and other general consumer lending. In recent years, we have expanded our one- to four-family and commercial real estate mortgage lending and commercial business lending while de-emphasizing our indirect automobile lending. We recently converted to a federal mutual savings bank, and adopted a plan of reorganization and stock issuance, primarily to increase our capital to support our expanded lending strategy.

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             Our primary objective is to remain an independent, community oriented financial institution serving customers in our primary market area. Our board of directors has sought to accomplish this objective through the adoption of a strategy designed to maintain profitability, a strong capital position and high asset quality. This strategy primarily involves:

• controlling operating expenses while continuing to provide quality personal service to our customers;

• growing and diversifying our loan portfolio by emphasizing the origination of one- to four-family residential mortgage loans, commercial real estate loans and secured business loans, and de-emphasizing indirect automobile lending, which will also allow us to meet our qualified thrift lending requirements;

• selectively emphasizing products and services to provide diversification of revenue sources and to capture our customer's full relationship. We intend to continue to expand our business by cross selling our loan and deposit products and services to our customers;

• expanding our banking network by opening loan production offices and de novo branches, and by selectively acquiring branch offices and other financial institutions;

• enhancing our focus on core deposits, including savings and checking accounts;

• borrowing from the Federal Home Loan Bank of Dallas for interest rate risk management purposes; and

• maintaining a high level of asset quality.

Comparison of Financial Condition at December 31, 2005 and December 31, 2004

             General. Total assets increased by $28.0 million, or 2.0%, to $1.43 billion at December 31, 2005 from $1.40 billion at December 31, 2004. The increase was primarily a result of an increase in securities of $54.2 million, partially offset by a decrease in the loan portfolio of $13.3 million, as further discussed below. The increase in total assets was funded by an increase in customer deposits of $32.6 million during 2005.

              Loans. Our loan portfolio decreased $13.3 million, or 1.2%, from $1.09 billion to $1.07 billion from December 31, 2004 to December 31, 2005. This decrease was primarily attributable to our lending strategy to diversify the loan portfolio. We are currently emphasizing the origination of residential mortgage loans and decreasing originations of consumer loans, particularly indirect automobile loans. In addition, we are focused on commercial lending, primarily commercial real estate lending. We have been successful over the past few years in diversifying our loan portfolio. See "Business of ViewPoint Bank – Lending Activities" for a presentation of our loan portfolio composition.

              Allowance for Loan Losses. The allowance for loan losses is maintained to cover losses that are probable and can be estimated on the date of the evaluation in accordance with U.S. generally accepted accounting principles. It is our estimate of probable incurred credit losses in our loan portfolio.

             Our methodology for analyzing the allowance for loan losses consists of specific and general components. We stratify the loan portfolio into homogeneous groups of loans that possess similar loss-potential characteristics and apply an appropriate loss ratio to the homogeneous pools of loans to estimate the incurred losses in the loan portfolio. The amount of loan losses incurred in our consumer portfolio is estimated by using historical loss ratios for major loan collateral types adjusted for current factors. We use historical peer group averages for commercial loans, due to the less-seasoned nature of this portion of our loan portfolio. The historical loss experience is generally defined as an average percentage of net loan losses to loans outstanding. A separate valuation of known losses for individual classified large-balance, non-homogeneous loans is also conducted in accordance with Statement of Financial Accounting Standards ("SFAS") No. 114. The allowance for loan losses on individually analyzed loans includes commercial business loans and one- to four-family and commercial real estate loans, where management has concerns about the borrower's ability to repay. Loss estimates include the difference between the current fair value of the collateral and the loan amount due.

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             Our allowance for loan losses at December 31, 2005 was $7.7 million or 0.71% of loans, compared to $8.4 million or 0.77% of loans at December 31, 2004. The decline in the allowance for loan losses was due primarily to the improvement in asset quality. Nonperforming loans totaled approximately $4.6 million and $7.5 million at December 31, 2005 and 2004. The decline in nonperforming loans was primarily due to the reduction in indirect automobile lending and improved underwriting standards. Additional factors included improved market conditions as discussed below.

             Our loan quality has improved over the past two years. We saw an increase in net charge offs and delinquencies during 2001 and continuing through 2003 as a result of the economic downturn associated with the terrorist events and technology company failures. Since that time, changes in underwriting guidelines and portfolio diversification, as well as improved economic conditions, has improved our overall delinquent loans to total loans ratio from a high of 0.79% at December 31, 2003 to 0.39% as of December 31, 2005. As we increase the number of our larger average balance real estate and commercial business loans, it is anticipated that increases in delinquencies and net charge offs could occur.

             Securities. For liquidity management purposes, we have begun to designate a higher percentage of the securities we purchase as available for sale. As a result, securities available for sale increased $75.6 million, or 288.5%, to $101.9 million at December 31, 2005 from $26.2 million at December 31, 2004.

              Deposits. Total deposits increased by $32.6 million, or 2.7%, to $1.26 billion at December 31, 2005 from $1.23 billion at December 31, 2004. Time deposits increased $4.4 million, demand deposits increased $16.4 million and savings and money market accounts increased $11.9 million during 2005. The increase in deposits was a result of organic growth within the existing branch infrastructure and expanded business banking efforts.

              Borrowings. Federal Home Loan Bank advances decreased $9.9 million, or 17.1%, to $47.7 million at December 31, 2005 from $57.5 million at December 31, 2004. We have established borrowing agreements with the Federal Home Loan Bank of Dallas that are secured by real estate loans. These Federal Home Loan Bank advances, which are non-callable, serve as an asset/liability management tool to match long-term real estate loans. We also use a Federal Home Loan Bank line of credit when cash flows tend to fluctuate. We were able to reduce our outstanding Federal Home Loan Bank advances due to our increase in deposits during 2005.

              Equity . Total equity increased $1.8 million, or 1.8%, to $101.2 million at December 31, 2005 from $99.4 million at December 31, 2004. The increase in equity was primarily due to net income of $2.7 million, partially offset by a reduction in accumulated other comprehensive loss resulting from a decline in the fair value of our available for sale securities of $974,000, due to the increase in market rates of interest during 2005.

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Average Balances, Net Interest Income, Yields Earned and Rates Paid

             The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. Also presented is the weighted average yield on interest-earning assets, rates paid on interest-bearing liabilities and the resultant spread at December 31, 2005. All average balances are monthly average balances. Non-accruing loans have been included in the table as loans carrying a zero yield. Management does not believe that the use of monthly average balances rather than daily average balances has caused any material difference in the information presented.

	At December 31, 2005		Year Ended December 31,
			2005					2004					2003
	Yield/ Rate		Average Outstanding Balance		Interest Earned/Paid	Yield/ Rate		Average Outstanding Balance		Interest Earned/Paid	Yield/ Rate		Average Outstanding Balance		Interest Earned/Paid	Yield/ Rate
	(Dollars in Thousands)
Interest-earning assets
Loans receivable (1)	5.35	%	$1,090,906		$ 57,520	5.27	%	$1,053,740		$ 56,027	5.32	%	$  940,802		$ 57,409	6.10	%
Mortgage-backed securities	0.76		2,512		78	3.11		---		---	0.00		---		---	0.00
Collateralized mortgage obligations	3.27		70,284		2,652	3.77		48,424		1,006	2.08		52,805		980	1.86
Investment securities	2.76		48,996		1,454	2.97		40,849		1,057	2.59		73,193		1,874	2.56
FHLB stock	4.04		4,435		160	3.61		4,337		80	1.84		3,291		73	2.22
Interest-earning deposit accounts	2.55		91,598		2,393	2.61		97,580		1,200	1.23		92,906		1,098	1.18
Other earnings assets	33.81		2,324		164	7.06		3,990		58	1.45		3,381		32	0.95
Total interest-earning assets	4.89		1,311,055		64,421	4.91		1,248,920		59,428	4.76		1,166,378		61,466	5.27
Noninterest-earning assets			107,068					98,148					109,525
Total assets			1,418,123					1,347,068					1,275,903
Interest-bearing liabilities
Interest-bearing demand	0.23		109,424		239	0.22		113,820		219	0.19		114,029		434	0.38
Savings and money market	1.95		775,906		14,792	1.91		745,513		11,396	1.53		726,968		13,528	1.86
Time	3.04		182,724		5,931	3.25		169,815		4,456	2.62		145,903		3,934	2.70
Borrowings	4.99		52,149		2,380	4.56		45,289		2,214	4.89		35,215		1,662	4.72
Total interest-bearing liabilities	2.11		1,120,203		23,342	2.08		1,074,437		18,285	1.70		1,022,115		19,558	1.91
Noninterest-bearing liabilities			197,614					177,577					168,090
Total liabilities			1,317,817					1,252,014					1,190,205
Total Capital			100,306					95,054					85,698
Total liabilities and capital			1,418,123					1,347,068					1,275,903
Net interest income					$ 41,079					$ 41,143					$ 41,908
Net interest rate spread	2.78	%				2.83	%				3.06	%				3.36	%
Net earnings assets			$1,311,055					$1,248,920					$1,166,378
Net interest margin						3.13	%				3.29	%				3.59	%
Average interest-earning assets to  average interest-bearing liabilities			117.04	%				116.24	%				114.11	%

__________________
(1)  Calculated net of deferred fees, loan discounts, loans in process and loss reserves.

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Rate/Volume Analysis

             The following schedule presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to outstanding balances and that due to changes in interest rates. The change in interest attributable to rate has been determined by applying the change in rate between years to average balances outstanding in the later year. The change in interest due to volume has been determined by applying the rate from the earlier year to the change in average balances outstanding between years. Changes attributable to both rate and volume which cannot be segregated have been allocated proportionately based on the changes due to rate and the changes due to volume.

	Year Ended December 31,
	2005 vs. 2004						2004 vs. 2003
	Increase (Decrease) Due to					Increase (Decrease) Due to
	Volume		Rate		Total Increase (Decrease)		Volume		Rate		Total Increase (Decrease)
	(In Thousands)
Interest-earning assets
Loans receivable	$ 1,963		$  (470	)	$ 1,493		$ 6,464		$ (7,846	)	$ (1,382	)
Mortgage-backed securities	78		---		78		---		---		---
Collateralized mortgage obligations	586		1,060		1,646		(85	)	111		26
Investment securities	229		168		397		(837	)	20		(817	)
FHLB stock	2		78		80		21		(14	)	7
Interest earning deposit accounts	(78	)	1,271		1,193		56		46		102
Other earning assets	(33	)	139		106		7		19		26
Total interest-earning assets	$ 2,747		$ 2,247		$ 4,993		$ 5,626		$ (7,664	)	$ (2,038	)
Interest-bearing liabilities
Savings and money market	$    481		$ 2,915		$ 3,396		$    337		$ (2,470	)	$ (2,133	)
Interest-bearing demand	(9	)	30		21		(1	)	(214	)	(215	)
Time	358		1,117		1,475		629		(107	)	522
Borrowings	320		(155	)	165		491		62		553
Total interest-bearing liabilities	$ 1,150		$ 3,907		$ 5,057		$ 1,456		$(2,729	)	$(1,273	)
Net interest income					$     (64	)					$   (765	)

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Comparison of Results of Operation for the Years Ended December 31, 2005 and 2004

             General. Net income for the year ended December 31, 2005 was $2.7 million, a decrease of $6.3 million, or 69.8%, from $9.0 million for the year ended December 31, 2004. The decrease in net income resulted primarily from a $6.1 million, or 12.0%, increase in non-interest expense.

              Interest Income. Interest income increased by $5.0 million, or 8.4%, to $64.4 million for 2005 from $59.4 million for the year ended December 31, 2004. The primary reason for the increase in interest income was related to an increase in the average loan portfolio of $37.2 million and an increase in rates in the securities portfolio.

             The weighted average yield on loans decreased from 5.32% for the year ended December 31, 2004 to 5.27% for the year ended December 31, 2005. The decrease was due to loans with higher rates maturing and the proceeds being reinvested at lower rates in 2005. The weighted average yield on collateralized mortgage obligations and other investment securities increased from 2.08% and 2.59% for 2004 to 3.77% and 2.97% for 2005, respectively. The increase was due to the securities portfolio being short in duration and increasing with the rising interest rate environment in 2005. Total average interest-earning assets increased $62.1 million from December 31, 2004 to December 31, 2005, and the weighted average yield on interest earning assets increased 15 basis points from 4.76% to 4.91% during the same period. We anticipate this trend to continue as we increase our emphasis on residential and commercial real estate and commercial business lending.

              Interest Expense. Interest expense increased $5.1 million, or 27.7%, to $23.3 million for fiscal 2005 from $18.3 million for 2004. The increase in interest expense was primarily due to the rising interest rate environment during 2005 and the repricing of deposit accounts to those higher interest rates. Our weighted average cost of interest-bearing liabilities was 2.08% for 2005 compared to 1.70% for 2004.

             Interest expense on Federal Home Loan Bank advances increased $166,000, or 7.5%, to $2.4 million for the year ended December 31, 2005 from $2.2 million for the year ended December 31, 2004. The increase resulted from an increase in average Federal Home Loan Bank advances of $6.9 million to $52.1 million for the year ended December 31, 2005 from $45.3 million for the year ended December 31, 2004. This increase was partially offset by a 33 basis point decrease in the cost of Federal Home Loan Bank advances, from 4.89% for 2004 to 4.56% for 2005.

              Net Interest Income. Net interest income decreased $64,000, or 0.16%, to $41.1 million during the year ended December 31, 2005 from $41.1 million for the year ended December 31, 2004. The decrease in net interest income was primarily the result of the overall growth in our balance sheet and an increase in the cost of funds resulting from the continued rising interest rate environment. Our net interest margin was 3.13% for the year ended December 31, 2005 compared to 3.29% for the year ended December 31, 2004.

              Provision For Loan Losses. We establish provisions for loan losses, which are charged to earnings, at a level required to reflect probable incurred credit losses in the loan portfolio. In evaluating the level of the allowance for loan losses, management considers historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect borrowers' ability to repay, estimated value of any underlying collateral, peer group data, prevailing economic conditions, and current factors. Large groups of smaller balance homogenous loans, such as residential real estate, small commercial real estate, home equity and consumer loans, are evaluated in the aggregate using historical loss factors adjusted for current economic conditions and other relevant data. Larger non-homogeneous loans, such as commercial loans for which management has concerns about the borrowers' ability to repay, are evaluated individually, and specific loss allocations are provided for these loans when necessary.

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             Based on management's evaluation of these factors, provisions of $6.1 million and $6.2 million were made during the year ended December 31, 2005 and the year ended December 31, 2004, respectively. The decline in provision for loan losses was primarily attributable to a continued decline in the amount of indirect automobile loans associated with the diversification of our loan portfolio and improved underwriting standards, and the resulting decrease in non-performing indirect automobile loans. At December 31, 2005, the ratio of net charge-offs to average loans increased one basis point to 0.62% from 0.61% at December 31, 2004. The ratio of non-performing loans to gross loans decreased from 0.68% from December 31, 2004 to 0.43% at December 31, 2005.

              Noninterest Income. Noninterest income declined $237,000 to $24.5 million for the year ended December 31, 2005 from $24.7 million for the year ended December 31, 2004, a decreases of 1.0%. The overall decrease in noninterest income was primarily due to a decrease of $1.3 million in checking fee income associated with a decline in insufficient fund fees assessed on checking accounts due to reduced check writing as more customers use their debit cards for purchases, consistent with the nationwide trend. This decrease was partially offset by a gain on sale of membership interests. This consisted of $755,000 from Pulse EFT Association, resulting from its sale to Discover, and $100,000 from the sale of our membership interest in a limited liability company.

              Noninterest Expense. Noninterest expense increased $6.1 million, or 12.0%, to $56.7 million for the year ended December 31, 2005 compared to $50.7 million for the year ended December 31, 2004. The increase in noninterest expense was primarily due to an increase of $2.8 million in compensation and benefits, as well as expenses connected with our charter conversion from a credit union to a mutual savings bank and our core data processing system conversion of $1.1 million and $600,000, respectively. The increase in compensation and benefits was primarily related to our overall growth and expansion, including an increase in personnel in our accounting, compliance and lending areas, as well as merit increases.

              Income Tax Expense. For the periods ended December 31, 2005 and 2004, there was no material income tax expense, due to our not-for profit status as a credit union during these periods. Effective January 1, 2006, we became subject to income taxes. On January 1, 2006, a deferred tax asset was recorded in the amount of $6.6 million, as well as a corresponding tax benefit of an equal amount. The deferred tax asset is a result of timing differences associated with depreciation of premises and equipment, bad debt deduction and mortgage servicing rights. Beginning in 2006, our earnings will be subject to a combined federal and state rate of approximately 37.0%. If we had been subject to income taxes for 2005 and 2004, our income tax expense would have been $1.0 million and $3.3 million, respectively. As a result, our net income for 2005 and 2004 would have been $1.7 million and $5.7 million, respectively.

Comparison of Results of Operation for the Years Ended December 31, 2004 and 2003

             General. Net income for the year ended December 31, 2004 was $9.0 million, a decrease of $927,000 or 9.3%, from $9.9 million for the year ended December 31, 2003. The decrease in net income was primarily due to increases in noninterest expenses, partially offset by a decline in the provision for loan losses.

              Interest Income. Interest income decreased by $2.0 million, or 3.3%, to $59.4 million for the year ended December 31, 2004 from $61.5 million for the year ended December 31, 2003. The primary reason for the decrease in interest income was lower rates earned on loans and other earning assets as a result of the significant decrease in rates experienced during 2004. The decrease in interest income related to rates was partially offset by a $111.6 million increase in the average balance of our loans. The yield on loans decreased from 6.10% for fiscal 2003 to 5.32% for fiscal 2004. The yield on securities decreased from 2.59% for the year ended December 31, 2004 to 2.56% for 2003. Total average interest-earning assets increased $82.5 million, or 7.1%, from 2004 to 2003, and the yield on interest-earning assets declined 51 basis points from 5.27% to 4.76%.

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              Interest Expense. Interest expense decreased $1.3 million, or 6.5%, to $18.3 million for the year ended December 31, 2004 from $19.6 million for the year ended December 31, 2003. The decrease in interest expense was primarily due to a decrease in our cost of funds during 2004, resulting from the significant decreases in interest rates during the year ended December 31, 2004 and the resulting repricing of deposit accounts to lower interest rates. Our average cost of interest-bearing liabilities was 1.70% for 2004 compared to 1.91% for 2003. Interest expense on deposits decreased $1.8 million to $16.1 million for 2004 from $17.9 million for the year ended December 31, 2003. The decrease in interest expense is attributable to declines in interest rates paid on deposit accounts was partially offset by additional interest expense incurred due to the increase in average interest-bearing deposits of $42.2 million for the year ended December 31, 2004 compared to the year ended December 31, 2003.

             Interest expense on Federal Home Loan Bank advances increased $552,000, to $2.2 million for the year ended December 31, 2004 from $1.7 million for the year ended December 31, 2003. The increase resulted primarily from an increase in average Federal Home Loan Bank advances of $10.1 million to $45.3 million for the year ended December 31, 2004 from $35.2 million for 2003 as well as an increase in the cost of Federal Home Loan Bank advances, from 4.72% for 2003 to 4.89% for 2004. Our Federal Home Loan Bank advances increased in order to help fund the increase in loans.

              Net Interest Income. Net interest income decreased $765,000, or 1.8%, to $41.1 million during 2004 from $41.9 million for the year ended December 31, 2003. The decrease in net interest income was primarily the result of the decrease in interest rates occurring in the year ended December 31, 2004. Our net interest margin decreased 30 basis points to 3.29% for 2004 compared to 3.59% for the year ended December 31, 2003.

              Provision For Loan Losses. Based upon management's analysis of the allowance for loan losses, provisions for loan losses of $6.2 million and $8.0 million were made during the year ended December 31, 2004 and 2003, respectively. The decrease in provision for losses was primarily attributable to improved asset quality and a decrease in the level of net charge-offs for 2004 compared to 2003. Net charge-offs totaled approximately $6.4 million and $8.2 million for the years ended December 31, 2004 and 2003, respectively. The ratio of net charge-offs to average loans decreased during 2004 to 0.61% from 0.86% during 2003. The ratio of non-performing loans to total loans decreased from 0.73% at December 31, 2003 to 0.68% at December 31, 2004.

              Noninterest Income. Noninterest income increased $2.6 million, or 11.5%, to $24.7 million for the year ended December 31, 2004 from $22.2 million for the year ended December 31, 2003, primarily as a result of an increase in service charges and fees of $4.8 million. The growth in service charges and fees was primarily due to an increase in insufficient funds fees and debit card interchanges associated with the growth in deposit products. This increase was partially offset by a decline of $1.5 million in the gains on sale of real estate loans. Gains on sale of real estate loans for 2004 were $631,000 compared to $2.1 million for the previous year. The reduction in the gains on sale was primarily due to rates beginning to move up in the second half of 2004, which reduced the number of loans originated and sold.

              Noninterest Expense. Noninterest expense increased $4.6 million, or 9.9%, to $50.7 million for the year ended December 31, 2004 from $46.1 million for the year ended December 31, 2003. This increase was primarily the result of a $3.0 million increase in salaries and employee benefits and a $494,000 increase in occupancy and equipment expenses. The increase in compensation and benefits and other noninterest expenses was primarily related to our overall growth and expansion, including the building of a new branch location and expenses associated with additional personnel needed to operate the expanded branch. Advertising expense increased by $627,000, or 28.3%, in 2004 as compared to 2003 due to an increase in radio advertising and various promotions. Data processing expenses also increased by $461,000, or 13.6%, in 2004 as compared to 2003 due to an increase in the cost of our web hosting and costs related to our data processing conversion.

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              Income Tax Expense. We were generally not subject to income taxes during 2004 or 2003. Had we been subject to federal and state income taxes during 2004 and 2003, our income tax expense would have been $3.3 million and $3.7 million, respectively. As a result, our net income for 2004 and 2003 would have been $5.7 million and $6.3 million, respectively.

Asset/Liability Management

             Our Risk When Interest Rates Change. The rates of interest we earn on assets and pay on liabilities generally are established contractually for a period of time. Market rates change over time. Like other financial institutions, our results of operations are impacted by changes in interest rates and the interest rate sensitivity of our assets and liabilities. The risk associated with changes in interest rates and our ability to adapt to these changes is known as interest rate risk and is our most significant market risk.

              How We Measure Our Risk of Interest Rate Changes. As part of our attempt to manage our exposure to changes in interest rates and comply with applicable regulations, we monitor our interest rate risk. In doing so, we analyze and manage assets and liabilities based on their interest rates and payment streams, timing of maturities, repricing opportunities, and sensitivity to actual or potential changes in market interest rates.

             ViewPoint Bank is subject to interest rate risk to the extent that its interest-bearing liabilities, primarily deposits and Federal Home Loan Bank advances, reprice more rapidly or at different rates than its interest-earning assets. In order to minimize the potential for adverse effects of material prolonged increases or decreases in interest rates on our results of operations, we have adopted an asset and liability management policy. The board of directors sets the asset and liability policy for ViewPoint Bank, which is implemented by the asset/liability committee.

             The purpose of the asset/liability committee is to communicate, coordinate, and control asset/liability management consistent with our business plan and board-approved policies. The committee establishes and monitors the volume and mix of assets and funding sources, taking into account relative costs and spreads, interest rate sensitivity and liquidity needs. The objectives are to manage assets and funding sources to produce results that are consistent with liquidity, capital adequacy, growth, risk and profitability goals.

             The committee generally meets on a bimonthly basis to, among other things, protect capital through earnings stability over the interest rate cycle; maintain our well capitalized status; and provide a reasonable return on investment. The committee recommends appropriate strategy changes based on this review. The committee is responsible for reviewing and reporting the effects of the policy implementations and strategies to the board of directors at least quarterly. Senior managers oversee the process on a daily basis.

             A key element of ViewPoint Bank's asset/liability management plan is to protect net earnings by managing the maturity or repricing mismatch between its interest-earning assets and rate-sensitive liabilities. We seek to reduce exposure to earnings by extending funding maturities through the use of Federal Home Loan Bank advances, through the use of adjustable rate loans and through the sale of certain fixed rate loans in the secondary market.

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             As part of its efforts to monitor and manage interest rate risk, ViewPoint Bank uses the net portfolio value ("NPV") methodology adopted by the Office of Thrift Supervision as part of its capital regulations. In essence, this approach calculates the difference between the present value of expected cash flows from assets and liabilities. Management and the board of directors review NPV measurements on a quarterly basis to determine whether ViewPoint Bank's interest rate exposure is within the limits established by the board of directors.

             ViewPoint Bank's asset/liability management strategy dictates acceptable limits on the amounts of change in given changes in interest rates. For interest rate increases of 100, 200, and 300 basis points, our policy dictates that our NPV ratio should not fall below 6.25%, 5.50%, and 4.75%, respectively. As illustrated in the table below, we are in compliance with this aspect of our asset/liability management policy.

             The table presented below, as of December 31, 2005, is an internal analysis of our interest rate risk as measured by changes in NPV for instantaneous and sustained parallel shifts in the yield curve, in 100 basis point increments, up and down 300 basis points.

             As illustrated in the table below, ViewPoint Bank would benefit from a decrease in market rates of interest. Our NPV would be negatively impacted by an increase in interest rates. An increase in rates would negatively impact our NPV as a result of deposit accounts and Federal Home Loan Bank borrowings repricing more rapidly than loans and securities due to the fixed rate nature of a large portion of our loan and security portfolios. As rates rise, the market value of fixed rate assets declines due to both the rate increases and slowing prepayments.

December 31, 2005
Change in Interest Rates in Basis Points	Net Portfolio Value			NPV Ratio %
	Amount	$ Change	% Change
(Dollars in Thousands)
300	93,848	(14,671)	(13.52)	6.87%
200	98,530	(9,989)	(9.21)	7.10
100	103,376	(5,143)	(4.74)	7.33
0	108,519	---	---	7.58
(100)	117,336	8,817	8.12	8.08
(200)	124,667	16,148	14.88	8.49
(300)	134,633	26,114	24.06	9.07

             Specifically, the table above indicates that ViewPoint Bank's NPV was $108.5 million or 7.58% of the market value of portfolio assets as of December 31, 2005. Based upon the assumptions utilized, an immediate 200 basis point increase in market interest rates would result in a $10.0 million decrease in our NPV and would result in a 48 basis point decrease in our NPV ratio to 7.10%. An immediate 200 basis point decrease in market interest rates would result in a $16.1 million increase in our NPV ratio and a 91 basis point increase in our NPV ratio to 8.49%.

             In addition to monitoring selected measures of NPV, management also monitors effects on net interest income resulting from increases or decrease in rates. This process is used in conjunction with NPV measures to identify excessive interest rate risk. In managing our assets/liability mix, depending on the relationship between long and short term interest rates, market conditions and consumer preference, we may place somewhat greater emphasis on maximizing its net interest margin than on strictly matching the interest rate sensitivity of its assets and liabilities. Management also believes that the increased net income which may result from an acceptable mismatch in the actual maturity or repricing of its asset and liability portfolios can, during periods of declining or stable interest rates, provide sufficient returns to justify the increased exposure to sudden and unexpected increases in interest rates which may result from such a mismatch. Management believes that ViewPoint Bank's level of interest rate risk is acceptable under this approach.

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             In evaluating ViewPoint Bank's exposure to interest rate movements, certain shortcomings inherent in the method of analysis presented in the foregoing table must be considered. For example, although certain assets and liabilities may have similar maturities or repricing periods, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in interest rates. Additionally, certain assets, such as adjustable rate mortgages, have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Further, in the event of a significant change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed above. Finally, the ability of many borrowers to service their debt may decrease in the event of an interest rate increase. ViewPoint Bank considers all of these factors in monitoring its exposure to interest rate risk.

             The board of directors and management of ViewPoint Bank believe that certain factors afford ViewPoint Bank the ability to operate successfully despite its exposure to interest rate risk. ViewPoint Bank manages its interest rate risk by originating and retaining adjustable rate loans in its portfolio, by borrowing from the Federal Home Loan Bank to match the duration of our funding to the duration of originated fixed rated one- to four-family real estate loans held in portfolio and by selling on an ongoing basis certain currently originated fixed rate one- to four-family real estate loans.

Liquidity

             Management maintains a liquidity position that it believes will adequately provide funding for loan demand and deposit run-off that may occur in the normal course of business. ViewPoint Bank relies on a number of different sources in order to meet its potential liquidity demands. The primary sources are increases in deposit accounts and cash flows from loan payments and the securities portfolio.

             In addition to these primary sources of funds, management has several secondary sources available to meet potential funding requirements. As of December 31, 2005, ViewPoint Bank had an additional borrowing capacity of $180 million with the Federal Home Loan Bank of Dallas. Additionally, ViewPoint Bank has classified 70.8% of its securities portfolio as available for sale, providing an additional source of liquidity. Management believes that our security portfolio is of high quality and the securities would therefore be marketable. In addition, we have historically sold mortgage loans in the secondary market to reduce interest rate risk and to create still another source of liquidity.

             Liquidity management is both a daily and long-term function of business management. Excess liquidity is generally invested in short-term investments, such as overnight deposits and federal funds. On a longer term basis, we maintain a strategy of investing in various lending products and investment securities, including mortgage-backed securities. ViewPoint Bank uses its sources of funds primarily to meet its ongoing commitments, pay maturing deposits and fund withdrawals, and to fund loan commitments. At December 31, 2005, the total approved loan commitments and unused lines of credit outstanding amounted to $13.0 million and $69.4 million, respectively. Certificates of deposit scheduled to mature in one year or less at December 31, 2005, totaled $120.4 million. It is management's policy to manage deposit rates that are competitive with other local financial institutions. Based on this management strategy, we believe that a majority of maturing deposits will remain with ViewPoint Bank.

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             During 2005, cash and cash equivalents decreased $4.1 million, or 3.2%, from $129.6 million as of December 31, 2004 to $125.5 million as of December 31, 2005. Cash from operating activities of $22.9 million and cash from financing activities of $22.8 million were more than offset by cash used for investing activities of $49.7 million for the year ended December 31, 2005. Primary sources of cash for 2005 included net income from operations of $2.7 million, proceeds from sales of loans of $22.2 million, net participations sold of $45.0 million, proceeds from payments and maturities of available for sale securities totaling $18.8 million, and increases in deposits of $32.6 million. Primary uses of cash included net originations of portfolio loans and originations of loans held for sale totaling $53.3 million, purchases of loans from other financial institutions totaling $8.8 million, purchases of securities available for sale of $95.9 million, and repayment of Federal Home Loan Bank advances of $9.9 million.

             During 2004, cash and cash equivalents increased $51.8 million, or 66.6%, from $77.8 million as of December 31, 2003 to $129.6 million as of December 31, 2004. Cash from operating activities of $26.8 million and cash from financing activities of $78.4 million were less than cash used for investing activities of $53.3 million for the year ended December 31, 2004. Primary sources of cash for 2004 included net income from operations of $9.0 million, proceeds from sales of loans of $44.7 million, payments, maturities and calls on held-to-maturity securities totaling $53.0 million, and increases in deposits of $60.7 million. Primary uses of cash included net originations of portfolio loans and loans held for sale totaling $106.1 million, purchases of loans from other financial institutions totaling $7.1 million, purchases of securities available for sale of $25.2 million and repayment of Federal Home Loan Bank advances of $7.7 million.

             Management is not aware of any trends, events, or uncertainties that will have, or that are reasonably likely to have a material impact on liquidity, capital resources or operations. Further, management is not aware of any current recommendations by regulatory agencies which, if they were to be implemented, would have this effect.

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