##### Table of Contents





UNITED STATES
    SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C.
    20549
      FORM 10-K
  (Mark One)x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES  EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES  EXCHANGE ACT OF 1934For the transition period from
    
    to    Commission file number 001-32992
  VIEWPOINT FINANCIAL
    GROUP
 (Exact name of registrant as
    specified in its charter)
  United States

20-4484783(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer Identification
    No.)1309 W. 15th Street,
    Plano, Texas

75075(Address of Principal Executive
    Offices)

(Zip Code)   Registrants telephone number, including area code:
    (972) 578-5000
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which
    RegisteredCommon Stock, par value $0.01 per share

Nasdaq Global Select Market   Securities registered pursuant to Section 12(g) of the
    Act: None
  o x
  o x
  x o
  Regulation S-K Form 10-K Form 10-K. x
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer x
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o x
      DOCUMENTS INCORPORATED BY REFERENCE:
  Document

Part of
    Form 10-KPortions of the definitive Proxy Statement to be used in
    conjunction with the Registrants

Part IIIAnnual Meeting of Stockholders




---



##### 





VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
  FORM 10-K
  December 31,
    2007
  INDEX
   
 PagePART IItem 1


Business


3Item 1A


Risk Factors


34Item 1B


Unresolved Staff Comments


36Item 2


Properties


37Item 3


Legal Proceedings


41Item 4


Submission of Matters to a Vote of Security
    Holders


41PART IIItem 5


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


42Item 6


Selected Financial Data


45Item 7


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


47Item 7A


Quantitative and Qualitative Disclosures about
    Market Risk


60Item 8


Financial Statements and Supplementary Data


63Item 9


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


102Item 9A


Controls and Procedures


102Item 9B


Other Information


102PART IIIItem 10


Directors, Executive Officers and Corporate
    Governance


103Item 11


Executive Compensation


103Item 12


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


103Item 13


Certain Relationships and Related Transactions,
    and Director Independence


103Item 14


Principal Accountant Fees and Services


103PART IVItem 15


Exhibits, Financial Statement Schedules


104Signatures


106Subsidiaries of the RegistrantConsent of AccountantsCertification of the Chief Executive OfficerCertification of the Chief Financial OfficerSection 1350 Certifications




---



##### Table of Contents



PART I  Item 1.
    Business  Special
    Note Regarding Forward-Looking Statements
  Form 10-K
  and/or
    General
     3




---



##### Table of Contents



Market
    Areas
       4




---



##### Table of Contents





Lending
    Activities
    December 31,2007


2006


2005


2004


2003Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent(Dollars in Thousands)Real Estate Loans:One- to four-family

$
345,952



37.31
%

$
287,276



29.56
%

$
274,230



25.51
%

$
225,170



20.72
%

$
201,063



19.53
%Commercial


252,140



27.19



183,670



18.90



99,334



9.24



45,667



4.20



27,037



2.63Home equity


85,064



9.17



83,899



8.64



85,365



7.94



79,548



7.32



65,002



6.31Total real estate loans


683,156



73.67



554,845



57.10



458,929



42.69



350,385



32.24



293,102



28.47Other Loans:Consumer loans:Automobile indirect


104,156



11.23



219,147



22.56



364,046



33.86



450,971



41.50



435,598



42.31Automobile direct


98,817



10.66



151,861



15.63



196,254



18.25



224,021



20.61



242,718



23.57Other secured


12,626



1.36



14,678



1.51



18,263



1.70



21,242



1.96



17,620



1.71Lines of credit/unsecured


16,351



1.76



21,284



2.19



28,804



2.68



34,722



3.19



36,749



3.57Total consumer loans


231,950



25.01



406,970



41.89



607,367



56.49



730,956



67.26



732,685



71.16Commercial business loans


12,278



1.32



9,780



1.01



8,813



0.82



5,446



0.50



3,762



0.37Total loans


927,384



100.00
%


971,595



100.00
%


1,075,109



100.00
%


1,086,787



100.00
%


1,029,549



100.00
%Less:Deferred fees and discounts


603







3,576







8,061







11,323







11,835Loans held for sale


(13,172
)






(3,212
)






(2,306
)






(3,238
)






(8,477
)Allowance for loan losses


(6,165
)






(6,507
)






(7,697
)






(8,424
)






(8,655
)Total loans receivable, net

$
908,650






$
965,452






$
1,073,167






$
1,086,448






$
1,024,252  5




---



##### Table of Contents



December 31,2007


2006


2005


2004


2003Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent(Dollars in Thousands)Fixed-Rate Loans:Real Estate:One- to four-family

$
314,059



33.87
%

$
251,704



25.90
%

$
230,003



21.40
%

$
176,562



16.25
%

$
158,036



15.35
%Commercial


76,044



8.20



141,875



14.60



66,622



6.20



32,416



2.98



20,339



1.98Home equity


70,643



7.62



68,795



7.08



68,050



6.33



65,208



6.00



62,851



6.10Total real estate loans


460,746



49.69



462,374



47.58



364,675



33.93



274,186



25.23



241,226



23.43Consumer:Automobile indirect


104,156



11.23



219,115



22.55



364,046



33.86



450,971



41.50



435,598



42.31Automobile direct


98,817



10.66



151,816



15.62



196,254



18.25



224,020



20.61



242,715



23.57Other secured


5,454



0.59



7,050



0.72



8,999



0.84



12,512



1.16



10,003



0.97Lines of credit/unsecured


4,168



0.45



7,652



0.79



11,158



1.04



13,026



1.19



13,556



1.32Total consumer


212,595



22.93



385,633



39.68



580,457



53.99



700,529



64.46



701,872



68.17Commercial business


9,359



1.01



7,979



0.82



5,004



0.47



3,720



0.34



3,610



0.35Total fixed-rate loans


682,700



73.63



855,986



88.08



950,136



88.39



978,435



90.03



946,708



91.95Adjustable-Rate Loans:Real Estate:One-to four-family


31,893



3.44



35,572



3.66



44,227



4.11



48,608



4.47



43,027



4.18Commercial


176,096



18.99



41,795



4.30



32,712



3.04



13,251



1.22



6,698



0.65Home equity


14,421



1.55



15,104



1.56



17,315



1.61



14,340



1.32



2,151



0.21Total real estate loans


222,410



23.98



92,471



9.52



94,254



8.76



76,199



7.01



51,876



5.04Consumer:Automobile indirect










32



0.01























Automobile direct










45



0.01











1







3



Other secured


7,172



0.77



7,628



0.79



9,264



0.86



8,730



0.80



7,617



0.74Lines of credit/unsecured


12,183



1.31



13,632



1.40



17,646



1.64



21,696



2.00



23,193



2.25Total consumer


19,355



2.08



21,337



2.21



26,910



2.50



30,427



2.80



30,813



2.99Commercial business


2,919



0.31



1,801



0.19



3,809



0.35



1,726



0.16



152



0.02Total adjustable-rate loans


244,684



26.37



115,609



11.92



124,973



11.61



108,352



9.97



82,841



8.05Total loans


927,384



100.00
%


971,595



100.00
%


1,075,109



100.00
%


1,086,787



100.00
%


1,029,549



100.00
%Less:Deferred fees and discounts


603







3,576







8,061







11,323







11,835Loans held for sale


(13,172
)






(3,212
)






(2,306
)






(3,238
)






(8,477
)Allowance for loan losses


(6,165
)






(6,507
)






(7,697
)






(8,424
)






(8,655
)Total loans receivable, net

$
908,650






$
965,452






$
1,073,167






$
1,086,448






$
1,024,252  6




---



##### Table of Contents





due-on-sale
  Mortgage


Consumer


Commercial


TotalWeighted





Weighted





Weighted





WeightedAverage





Average





Average





AverageAmount


Rate


Amount


Rate


Amount


Rate


Amount


Rate(Dollars in Thousands)Due During Years
    Ending December 31,2008(1)

$
13,751



6.11
%

$
40,964



7.53
%

$
18,717



6.78
%

$
73,432



7.07
%2009 to 2012


22,173



5.85



185,791



6.31



119,077



6.51



327,041



6.352013 and following


395,092



6.02



5,195



7.57



126,624



6.34



526,911



6.11Total

$
431,016






$
231,950






$
264,418






$
927,384     (1)
    
    Includes demand loans, loans having
    no stated maturity, overdraft loans and loans held for sale.    Lending Authority.
    One- to Four-Family Real Estate Lending.
     7




---



##### Table of Contents



8




---



##### Table of Contents



Commercial Real Estate Lending.
  25-30 year
       9




---



##### Table of Contents



Home Equity Lending.
    Consumer Lending.
         10




---



##### Table of Contents



Commercial Business Lending.
          Loan
    Originations, Purchases, Sales, Repayments and
    Servicing
       11




---



##### Table of Contents



12




---



##### Table of Contents



Year Ended December 31,2007


2006


2005(In Thousands)Originations by type:Adjustable rate:Real estateOne- to four-family

$
5,975


$
4,465


$
10,705Commercial


43,748



9,905



11,494Home equity


3,064



4,046



10,994ConsumerAutomobile indirect










Automobile direct






26



Other secured


5,621



6,150



8,571Lines of credit/unsecured


703



793



2,475Commercial business


4,489



755



6,473Total adjustable-rate


63,600



26,140



50,712Fixed rate:Real estateOne- to four-family


121,209



50,162



123,687Commercial


75,655



93,304



70,342Home equity


24,276



20,542



24,280ConsumerAutomobile indirect


181



17,361



111,782Automobile direct


27,216



56,292



98,038Other secured


2,299



2,628



3,856Lines of credit/unsecured


2,241



4,141



6,698Commercial business


3,767



5,668



3,832Total fixed-rate


256,844



250,098



442,515Total loans originated


320,444



276,238



493,227Purchases:Real estate-one-to four-family


44,407



18,519



Real estate  commercial


1,160



8,887



8,825Total loans purchased


45,567



27,406



8,825Sales and Repayments:Real estateOne-to four-family


77,418



26,221



21,244Commercial


1,128



7,408



18,430Consumer


4,012



3,816



3,066Total loans sold


82,558



37,445



42,740Principal repayments


337,624



370,619



470,058Total reductions


420,182



408,064



512,798Increase (decrease) in other items, net


(2,631
)


(3,295
)


(2,535
)Net increase (decrease)

$
(56,802
)

$
(107,715
)

$
(13,281
)  13




---



##### Table of Contents



Asset
    Quality
        30-89 days
 14




---



##### Table of Contents



Delinquent Loans.
  Loans Delinquent For:


Total Loans Delinquent60-89 Days


90 Days and Over


60 Days or MorePercent








Percent








Percentof Loan








of Loan








of LoanNumber


Amount


Category


Number


Amount


Category


Number


Amount


Category(Dollars in Thousands)Real Estate Loans:One- to four-family


7


$
493



0.14
%


6


$
673



0.19
%


13


$
1,166



0.34
%Commercial


































Home equity


2



44



0.05



1



22



0.03



3



66



0.08Total real estate loans


9



537



0.08



7



695



0.10



16



1,232



0.18Other Loans:Consumer Loans:Automobile indirect


18



139



0.13



6



60



0.06



24



199



0.19Automobile direct


4



23



0.02



5



65



0.07



9



88



0.09Other secured


1



1



0.01



1



1



0.01



2



2



0.02Lines of credit/unsecured


15



69



0.42



11



63



0.39



26



132



0.81Total consumer loans


38



232



0.10



23



189



0.08



61



421



0.18Commercial business loans


1



5



0.04















1



5



0.04Total loans


48


$
774



0.08
%


30


$
884



0.10
%


78


$
1,658



0.18
%Total as a percentage of gross loans










0.08
%










0.10
%










0.18
%  15




---



##### Table of Contents



Non-performing Assets. and/or
  December 31,2007


2006


2005


2004


2003(Dollars in Thousands)Non-accruing loans:One-to four-family

$
689


$



$
139


$
16


$
Commercial


989



639











Home equity


22



72



77



5



2Automobile indirect


185



207



1,084



2,827



3,681Automobile direct


86



145



223



1,464



1,951Other secured


1







903



20



48Lines of credit/unsecured


63



177



136



105



109Commercial business


67



64



30







Total


2,102



1,304



2,592



4,437



5,791Accruing loans delinquent more than 90 days:One- to four-family














301



470Commercial














68



Home equity














25



Automobile indirect


















Automobile direct






30











Other secured


















Lines of credit/unsecured


















Commercial business














50



Total






30







444



470Troubled debt restructurings:One- to four-family


















Commercial


















Home equity


















Automobile indirect


607



592







413



309Automobile direct


759



1,365



1,669



1,651



748Other secured


5



4



86



294



36Lines of credit/unsecured


40



76



248



246



138Commercial business


















Total


1,411



2,037



2,003



2,604



1,231Foreclosed assets:One- to four-family


615



460



50



113



633Automobile indirect


212



146



310



662



525Automobile direct


13



45



159



341



270Commercial business






4











Total


840



655



519



1,116



1,428Total non-performing assets

$
4,353


$
4,026


$
5,114


$
8,601


$
8,920Total non-performing assets as a percentage of total assets


0.26
%


0.26
%


0.36
%


0.61
%


0.68
%Total non-performing loans as a percentage of gross loans


0.38
%


0.35
%


0.43
%


0.69
%


0.73
%  16




---



##### Table of Contents



Other Loans of Concern.
  Classified Assets.
        At December 31,2007


2006Loss

$



$
Doubtful


506



Substandard


3,860



3,116Total

$
4,366


$
3,116  17




---



##### Table of Contents



Allowance for Loan Losses.
   18




---



##### Table of Contents



Year Ended December 31,2007


2006


2005


2004


2003(Dollars in Thousands)Balance at beginning of period

$
6,507


$
7,697


$
8,424


$
8,655


$
8,858Charge-offs:One- to four-family


120



83



127



205



Commercial


















Home equity


32



62



43



52



Total real estate loans


152



145



170



257



Consumer:Automobile indirect


2,251



2,670



4,575



4,617



5,493Automobile direct


620



518



678



374



1,299Other secured


31



21



869



795



663Lines of credit/unsecured


1,862



1,510



754



791



1,026Total consumer


4,764



4,719



6,876



6,577



8,481Commercial business


164



102



204



52



Total charge-offs


5,080



4,966



7,250



6,886



8,481Recoveries:One- to four-family


14



29











Commercial


















Home equity


13



39











Total real estate loans


27



68











Consumer:Automobile indirect


700



744



102



161



95Automobile direct


305



230



72



91



43Other secured


14



8



102



113



56Lines of credit/unsecured


376



156



127



91



38Total consumer


1,395



1,138



403



456



232Commercial business


48



5











Total recoveries


1,470



1,211



403



456



232Net charge-offs


3,610



3,755



6,847



6,430



8,249Additions charged to operations


3,268



2,565



6,120



6,199



8,046Balance at end of period

$
6,165


$
6,507


$
7,697


$
8,424


$
8,655Ratio of net charge-offs during the period to average loans
    outstanding during the period


0.39
%


0.37
%


0.63
%


0.61
%


0.86
%Ratio of net charge-offs during the period to average
    non-performing assets


86.16
%


82.17
%


99.84
%


73.39
%


99.85
%Allowance as a percentage on non-performing loans


175.49
%


193.03
%


167.51
%


112.55
%


115.52
%Allowance as a percentage of gross loans(end of period)


0.66
%


0.67
%


0.72
%


0.78
%


0.84
%  19




---



##### Table of Contents





December 31,2007


2006


2005


2004


2003Percent





Percent





Percent





Percent





Percentof





of





of





of





ofLoans in





Loans in





Loans in





Loans in





Loans inEach





Each





Each





Each





EachCategory





Category





Category





Category





Categoryto





to





to





to





toTotal





Total





Total





Total





TotalAmount


Loans


Amount


Loans


Amount


Loans


Amount


Loans


Amount


Loans(Dollars in Thousands)Real Estate:One- to four-family

$
1,201



37.31
%

$
449



29.56
%

$
311



25.51
%

$
349



20.72
%

$
479



19.53
%Commercial real estate


2,597



27.19



2,025



18.90



659



9.24



98



4.20



22



2.63Home equity


170



9.17



182



8.64



86



7.94



80



7.32



63



6.31Consumer:Automobile indirect


946



11.23



2,232



22.56



3,608



33.86



4,610



41.50



4,092



42.31Automobile direct


278



10.66



526



15.63



1,848



18.25



2,086



20.61



2,387



23.57Other secured


13



1.36



9



1.51



364



1.70



119



1.96



100



1.71Lines of credit/unsecured


626



1.76



694



2.19



592



2.68



1,049



3.19



1,466



3.57Commercial Business


334



1.32



390



1.01



229



0.82



33



0.50



46



0.37Total

$
6,165



100.00
%

$
6,507



100.00
%

$
7,697



100.00
%

$
8,424



100.00
%

$
8,655



100.00
%  20




---



##### Table of Contents





Investment
    Activities
               21




---



##### Table of Contents



December 31,2007


2006


2005Amortized





Amortized





AmortizedCost


Fair Value


Cost


Fair Value


Cost


Fair Value(Dollars in Thousands)Available for Sale:Investment securities:US Government and agency

$
35,006


$
35,152


$
30,059


$
29,475


$
22,605


$
21,892Collateralized debt obligations


21,496



19,616















Agency collateralized mortgage obligations


347,376



349,234



214,788



215,011



60,617



60,059Agency mortgage-backed securities


137,678



138,873



79,782



80,037



19,870



19,909Total available for sale


541,556



542,875



324,629



324,523



103,092



101,860Held to maturity:Investment securities:US Government and agency


















18,007



17,736Corporate bonds


















3,009



3,010Agency collateralized mortgage obligations


5,688



5,683



11,271



11,236



20,946



20,750Agency mortgage-backed securities


14,403



14,519















Total held to maturity


20,091



20,202



11,271



11,236



41,962



41,496Total investment securities


561,647



563,077



335,900



335,759



145,054



143,356Federal Home Loan Bank stock


6,241



6,241



3,724



3,724



3,958



3,958Total

$
567,888


$
569,318


$
339,624


$
339,483


$
149,012


$
147,314  22




---



##### Table of Contents





1 year or less


Over 1 to 5 years


Over 5 to 10 years


Over 10 years


Total SecuritiesWeighted





Weighted





Weighted





Weighted





WeightedAmortized


Average


Amortized


Average


Amortized


Average


Amortized


Average


Amortized


Average


FairCost


Yield


Cost


Yield


Cost


Yield


Cost


Yield


Cost


Yield


Value(Dollars in Thousands)Securities available for sale:US Government and agency

$
8,010



3.26
%

$
26,996



4.84
%

$





%

$





%

$
35,006



4.48
%

$
35,152Collateralized debt obligations


























21,496



7.33



21,496



7.33



19,616Agency mortgage-backed and collateralized mortgage obligations










16,918



5.28



23,842



5.44



444,294



5.32



485,054



5.32



488,107Total securities available for sale


8,010



3.26



43,914



5.01



23,842



5.44



465,790



5.41



541,556



5.35



542,875Held to maturity:Agency mortgage-backed and collateralized mortgage obligations










659



5.35











19,432



5.07



20,091



5.08



20,202Total securities held to maturity










659



5.35











19,432



5.07



20,091



5.08



20,202Total investment securities

$
8,010



3.26
%

$
44,573



5.02
%

$
23,842



5.44
%

$
485,222



5.40
%

$
561,647



5.34
%

$
563,077  23




---



##### Table of Contents





Sources
    of Funds
  General.
  Deposits.
      Year Ended December 31,2007


2006


2005(Dollars in Thousands)Opening balance

$
1,234,881


$
1,257,727


$
1,228,999Net of deposits and withdrawals


25,639



(51,764
)


7,766Interest credited


37,073



28,918



20,962Ending balance

$
1,297,593


$
1,234,881


$
1,257,727Net increase (decrease)

$
62,712


$
(22,846
)

$
28,728Percent increase


5.08
%


(1.82
)%


2.34
%  24




---



##### Table of Contents



December 31,2007


2006


2005Percent





Percent





PercentAmount


of Total


Amount


of Total


Amount


of Total(Dollars in Thousands)Transactions and Savings Deposits:Non- interest-bearing demand

$
185,149



14.27
%

$
211,301



17.11
%

$
195,377



15.53
%Interest bearing demand


76,948



5.93



69,711



5.64



106,604



8.48Savings


156,129



12.03



198,546



16.08



277,006



22.02Money market


414,483



31.94



438,570



35.52



469,399



37.32IRA


8,116



0.63



10,590



0.86



14,037



1.12Total non-certificates


840,825



64.80



928,718



75.21



1,062,423



84.47Certificates:0.00 - 1.99%


89



0.01



487



.04



2,474



0.202.00 - 3.99%


22,973



1.77



36,672



2.97



123,818



9.844.00 - 5.99%


433,155



33.38



269,004



21.78



68,830



5.476.00% and over


551



0.04











182



0.02Total certificates


456,768



35.20



306,163



24.79



195,304



15.53Total deposits

$
1,297,593



100.00
%

$
1,234,881



100.00
%

$
1,257,727



100.00
%  25




---



##### Table of Contents



0.00-


2.00-


4.00-


6.00%





Percent1.99%


3.99%


5.99%


and over


Total


of Total(Dollars in Thousands)Certificate accounts maturing in quarter ending:March 31, 2008

$
76


$
5,586


$
135,979


$
273


$
141,914



31.07
%June 30, 2008


2



8,899



104,766



118



113,785



24.91September 30, 2008






4,049



72,511



160



76,720



16.80December 31, 2008






2,507



47,915







50,422



11.04March 31, 2009






1,056



14,003







15,059



3.30June 30, 2009


11



825



4,608







5,444



1.19September 30, 2009






6



7,516







7,522



1.65December 31, 2009










22,646







22,646



4.96March 31, 2010






38



2,832







2,870



0.63June 30, 2010






7



3,655







3,662



0.80September 30, 2010










5,265







5,265



1.15December 31, 2010










1,105







1,105



0.24Thereafter










10,354







10,354



2.26Total

$
89


$
22,973


$
433,155


$
551


$
456,768



100.00
%Percent of Total


0.02
%


5.03
%


94.83
%


0.12
%


100.00
%     Maturity3 Months


Over 3 to


Over 6 to


Over 12or Less


6 Months


12 Months


Months


Total(In thousands)Certificates of deposit less than $100,000

$
57,092


$
49,976


$
47,116


$
30,954


$
185,138Certificates of deposit of $100,000 or more


20,487



13,274



14,501



23,238



71,500Public
    funds(1)


64,336



50,533



65,526



19,735



200,130Total certificates of deposit

$
141,915


$
113,783


$
127,143


$
73,927


$
456,768     (1)
    
    Deposits from governmental and other public entities.  Borrowings.
   26




---



##### Table of Contents



Year Ended December 31,2007


2006


2005(In Thousands)Maximum Balance:FHLB advances

$
128,451


$
55,762


$
56,717Average Balance Outstanding:FHLB advances

$
83,501


$
51,187


$
52,149     December 31,2007


2006


2005(Dollars in Thousands)FHLB advances

$
128,451


$
55,762


$
47,680Weighted average interest rate of FHLB advances during the period


4.85
%


4.66
%


4.56
%Weighted average interest rate of FHLB advances at end of period


3.15
%


4.28
%


4.99
%   How We
    Are Regulated
  General.
    cease-and-desist
    ViewPoint Bank.
 27




---



##### Table of Contents



Office of Thrift Supervision.
             28




---



##### Table of Contents



Insurance of Accounts and Regulation by the
    FDIC.
  Transactions with Affiliates.
  ViewPoint Financial Group and ViewPoint
    MHC.
        Capital Requirements for ViewPoint
    Bank.
   29




---



##### Table of Contents



Capital Requirements for ViewPoint Financial Group and
    ViewPoint MHC.
  Limitations on Dividends and Other Capital
    Distributions.
 30




---



##### Table of Contents



year-to-date
      Federal Securities Law.
        Taxation
  Federal
    Taxation
  General.
 31




---



##### Table of Contents



Method of Accounting.
  Minimum Tax.
  Net Operating Loss Carryovers.
  Corporate Dividends-Received Deduction.
  State
    Taxation
      Subsidiary
    and Other Activities
       32




---



##### Table of Contents



©
  Competition
    Executive
    Officers of ViewPoint Financial Group and ViewPoint
    Bank
  Garold (Gary) R. Base.
  Mark E. Hord.
  Pathie (Patti) E. McKee.
  James C. Parks.
  Rick M. Robertson.
 33




---



##### Table of Contents



Employees
    Internet
    Website
  Form 10-K. Form 10-K, Form 10-Q Form 8-K,
  Item 1A.
    Risk
    Factors    Our loan
    portfolio possesses increased risk due to our increasing
    percentage of commercial real estate and commercial business
    loans.
      Our loan
    portfolio possesses increased risk due to our number of consumer
    loans.
   34




---



##### Table of Contents



If our
    allowance for loan losses is not sufficient to cover actual loan
    losses, our earnings could decrease.
          Changes
    in Market Interest Rates May Have An Adverse Effect On The
    Banks Profits.
    
    interest income earned on interest-earning assets, such as
    loans, investment securities, and overnight cash; and
    interest expense paid on interest-bearing liabilities, such as
    deposits and borrowings.     35




---



##### Table of Contents



We
    operate in a highly regulated environment and we may be
    adversely affected by negative examination results and changes
    in laws and regulations.
    The loss
    of key employees could negatively affect us from a production
    standpoint.
    Strong
    competition within our market area may limit our growth and
    profitability.
    Our
    business is geographically concentrated in Texas and a downturn
    in conditions in the state could reduce our profits.
    Electronic
    fraud may affect our earnings.
    Item 1B.
    Unresolved
    Staff Comments   36




---



##### Table of Contents



Item 2.
    Properties        Lease

Net BookSquare


Owned or


Expiration

Value atLocation

Footage


Leased


Date

12/31/07(Dollars in Thousands)ADMINISTRATIVE OFFICES:Pitman West (Main Office)


53,022



Owned


N/A

$2,0021309 W. 15th Street 
    Plano, TX 75075Pitman East


54,409



Owned


N/A

$5,3481201 W 15th St. 
    Plano, TX 75075Richardson Annex


3,800



Owned


N/A

$  72700 E. Arapaho
    Richardson, TX 75081Contact Center


31,762



Owned


N/A

$2,8712101 Custer Rd.
    Plano, TX 75075BRANCH OFFICES:Addison


6,730



Leased


04/30/13

N/A4560 Beltline Suite 100
    Addison, TX 75001Allen


4,500



Owned


N/A

$ 396321 East McDermott
    Allen, TX 75002Carrollton


6,800



Owned


N/A

$1,1741801 Keller Springs
    Carrollton, TX 75006 37




---



##### Table of Contents



Lease

Net BookSquare


Owned or


Expiration

Value atLocation

Footage


Leased


Date

12/31/07(Dollars in Thousands)Carrolton Kroger*


484



Leased


12/12/10

N/A4038 Old Denton Road
    Carrollton, TX 75007Coppell


5,674



Owned


N/A

$1,662687 Denton Tap Rd
    Coppell, TX 75019East Plano


5,900



Owned


N/A

$1,3922501 East Plano Pkwy
    Plano, TX 75074Forest Lane Albertsons*


471



Leased


07/13/13

N/A3630 Forest Lane
    Dallas, TX 75229Frisco


4,800



Owned


N/A

$1,0513833 Preston
    Frisco, TX 75034Garland


4,800



Owned


N/A

$ 8392218 N. Jupiter
    Garland, TX 75044Garland Tom Thumb*


550



Leased


06/30/12

N/A2645 Arapaho Rd
    Garland, TX 75044Grand Prairie Albertsons*


452



Leased


08/08/12

N/A215 N. Carrier Pkwy
    Grand Prairie, TX 75050Lake Highlands Albertsons*


391



Leased


11/14/11

N/A10203 East Northwest Hwy
    Dallas, TX 75238Los Rios Kroger*


473



Leased


04/21/09

N/A4017 14th Street
    Plano, TX 75074McKinney


4,500



Owned


N/A

$ 6632500 W. Virginia Pkwy
    McKinney, TX 75070McKinney Albertsons*


425



Leased


08/29/12

N/A6800 W. Virginia Pkwy
    McKinney, TX 75070McKinney Mini


1,800



Owned


N/A

$ 96231 N. Chestnut
    McKinney, TX 75069 38




---



##### Table of Contents



Lease

Net BookSquare


Owned or


Expiration

Value atLocation

Footage


Leased


Date

12/31/07(Dollars in Thousands)Midway Albertsons*


325



Leased


12/28/14

N/A4349 W. Northwest Hwy
    Dallas, TX 75220North Dallas Tom Thumb*


550



Leased


04/30/12

N/A18212 Preston Road
    Dallas, TX 75252NW Frisco Albertsons*


470



Leased


07/13/13

N/A309 Main Street
    Frisco, TX 75034Plano Albertsons*


311



Leased


06/19/11

N/A1301 Custer Road Ste 200
    Plano, TX 75075Plano Central


1,680



Owned


N/A

$ 8411201 W
    15thSt.
    Plano, TX 75075Richardson


22,000



Owned


N/A

$ 924720 E. Arapaho
    Richardson, TX 75081Richardson Mini


2,500



Owned


N/A

$ 1461775 North Plano Rd
    Richardson, TX 75081Tollroad Express


2,000



Owned


N/A

$ 5025900 West Park Blvd.
    Plano, TX 75093West Allen


4,800



Owned


N/A

$ 855225 S. Custer Rd.
    Allen, TX 75013West Plano


22,800



Owned


N/A

$1,9935400 Independence Pkwy
    Plano, TX 75023West Richardson


4,500



Owned


N/A

$ 5571280 West Campbell Rd.
    Richardson, TX 75080Wylie Albertsons*


425



Leased


08/29/12

N/A921 Westgate Way
    Wylie, TX 75098  39




---



##### Table of Contents



Lease

Net BookSquare


Owned or


Expiration

Value atLocation

Footage


Leased


Date

12/31/07LOAN PRODUCTION OFFICES:Houston LPO


400



Leased


month to

N/A7500 San Felipe
    Suite 600 
    Houston, TX 77063









monthDallas LPO


2,678



Leased


06/01/09

N/A2231 W. Ledbetter
    Suite 280 
    Dallas, TX 75224Grapevine LPO


2,180



Leased


06/30/09

N/A304 South Park Blvd.
    Suite 100
    Grapevine, TX 76051LOAN PRODUCTION OFFICES 
    OPERATED BY CFS 
    (MORTGAGE SUBSIDIARY):Dallas LPO/CFS Corporate Office


7,670



Leased


01/31/10

N/A13101 Preston Rd.
    Suite 100
    Dallas, TX 75240Coppell LPO


2,540



Leased


08/31/12

N/A275 S. Denton Tap Rd.
    Suite 100
    Coppell, TX 75019Ennis LPO


100



Leased


02/29/08

N/A1905 W. Ennis Ave.
    Suite 240B
    Ennis, TX 75119Fort Worth LPO


190



Leased


04/30/08

N/A4150 International Plaza
    Suite 600
    Fort Worth, TX 76109Southlake LPO


2,400



Leased


03/31/13

N/A751 E. Southlake Blvd.
    Suite 120
    Southlake, TX 76092Waxahachie LPO


1,273



Leased


05/31/09

N/A102 Professional Place
    Suite 101
    Waxahachie, TX 75165     *
    
    Represents in-store location. 40




---



##### Table of Contents



Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   41




---



##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities      Market Price RangeDividendsHigh


Low


Declared2006Quarter ended December 31,
    20061

$
17.45


$
14.90


$
2007Quarter ended March 31, 2007


17.44



16.05



0.05Quarter ended June 30, 2007


18.91



17.06



0.05Quarter ended September 30, 2007


18.80



14.80



0.05Quarter ended December 31, 2007


18.20



15.56



0.05   1
    Stock offering ended on September 29, 2006, and the Company
    began trading on October 3, 2006.      MaximumTotal Number of


Number of SharesTotal





Shares Purchased


that May Yet BeNumber


Average


as Part of Publicly


Purchased Underof Shares


Price Paid


Announced Plans


the Plans orPeriod

Purchased


per Share


or Programs


ProgramsOctober 1, 2007 through October 31, 2007





$








580,247November 1, 2007 through November 30, 2007


580,247



17.70



580,247



December 1, 2007 through December 31, 2007














Total


580,247


$
17.70



580,247



  42




---



##### Table of Contents



Equity
    Compensation Plans
    Number ofSecurities





Number ofto be Issued





SecuritiesUpon


Weighted


RemainingExercise of


Average


Available ForOutstanding


Exercise


IssuanceOptions


Price


Under Plan2007 Equity Incentive Plan


202,942


$
18.44



1,001,541
(1)    43




---



##### Table of Contents



Stockholder
    Return Performance Graph Presentation
    COMPARISON OF
    CUMULATIVE TOTAL RETURN
    AMONG VIEWPOINT FINANCIAL GROUP,
    NASDAQ MARKET INDEX AND SAVINGS AND LOAN (HEMSCOTT GROUP)
    INDEX
  
  10/03/2006

12/29/2006

3/30/2007

6/29/2007

9/28/2007

12/31/2007Viewpoint Financial Group

$
100.00


$
169.40


$
174.00


$
173.08


$
186.47


$
167.26Savings & Loan Index


100.00



106.88



100.63



95.34



88.88



62.63NASDAQ Market Index


100.00



107.19



107.55



115.65



119.94



117.85  44




---



##### Table of Contents



Item 6.
    Selected
    Financial Data    December 31,2007


2006


2005


2004


2003(Dollars in Thousands)Selected Financial Condition Data:Total assets

$
1,658,204


$
1,529,760


$
1,428,062


$
1,400,021


$
1,312,906Loans held for sale


13,172



3,212



2,306



3,238



8,477Loans receivable, net


908,650



965,452



1,073,167



1,086,448



1,024,252Securities available for sale, at fair value:U.S. government and federal agency securities


35,152



29,475



21,892



24,917



Agency mortgage-backed and collateralized mortgage obligations


488,107



295,048



79,968



1,305



2,135Collateralized debt obligations


19,616















Securities held to maturity, at amortized cost:U.S. Government and Agency securities


20,091



11,271



18,007



23,040



47,110Corporate bonds










3,009



5,094



5,183Agency mortgage-backed and collateralized mortgage obligations










20,946



35,295



64,748Federal Home Loan Bank stock


6,241



3,724



3,958



4,481



4,159Bank-owned life insurance


26,497















Deposits


1,297,593



1,234,881



1,257,727



1,228,999



1,168,305Borrowings


128,451



55,762



47,680



57,545



39,889Stockholders equity


203,794



214,778



101,181



99,431



90,676   Year Ended December 31,2007


2006


2005


2004


2003(Dollars in Thousands)Selected Operations Data:Total interest income

$
84,054


$
72,726


$
64,421


$
59,428


$
61,466Total interest expense


41,121



31,386



23,342



18,285



19,558Net interest income


42,933



41,340



41,079



41,143



41,908Provision for loan losses


3,268



2,565



6,120



6,199



8,046Net interest income after provision for loan losses


39,665



38,775



34,959



34,944



33,862Service charges and fees


22,389



20,589



20,359



21,693



16,939Net gain on sales of loans


1,298



199



351



631



2,122Loan servicing fees


305



262



383



191



407Brokerage fees


602



557



548



583



510Gain on sale of membership interests










855







Bank-owned life insurance income


460















Title fee income






384



524



466



1,120Other noninterest income


1,049



1,443



1,465



1,158



1,066Total noninterest income


26,103



23,434



24,485



24,722



22,164Total noninterest expense


57,957



56,080



56,720



50,650



46,083Income before income tax expense ( benefit)


7,811



6,129



2,724



9,016



9,943Income tax expense (benefit)(1)


2,744



(3,557
)










Net income (1)

$
5,067


$
9,686


$
2,724


$
9,016


$
9,943  45




---



##### Table of Contents



Year Ended December 31,2007


2006


2005


2004


2003Selected Financial Ratios and Other Data (Unaudited):Performance Ratios:Return on assets (ratio of net income to average total assets)


0.32
%


0.65
%


0.19
%


0.67
%


0.78
%Return on assets tax effected


n/a



n/a



0.12
%


0.42
%


0.49
%Return on equity (ratio of net income to average equity)


2.39
%


6.76
%


2.72
%


9.49
%


11.60
%Return on equity tax effected


n/a



n/a



1.71
%


5.98
%


7.31
%Interest rate spread information:Average during period


2.11
%


2.42
%


2.83
%


3.06
%


3.36
%End of period


2.14
%


2.19
%


2.78
%


2.95
%


3.26
%Net interest margin


2.87
%


3.00
%


3.13
%


3.29
%


3.59
%Non-interest income to operating revenue


23.70
%


24.37
%


27.54
%


29.38
%


26.50
%Operating expense to average total assets


3.62
%


3.79
%


4.00
%


3.76
%


3.61
%Average interest-earning assets to average interest-bearing
    liabilities


127.87
%


125.49
%


117.04
%


116.24
%


114.11
%Efficiency ratio


83.95
%


86.58
%


86.51
%


76.90
%


71.92
%Asset Quality Ratios:Non-performing assets to total assets at end of period


0.26
%


0.26
%


0.36
%


0.61
%


0.68
%Non-performing loans to gross loans


0.38
%


0.35
%


0.43
%


0.69
%


0.73
%Allowance for loan losses to non-performing loans


175.49
%


193.03
%


167.51
%


112.55
%


115.52
%Allowance for loan losses to gross loans


0.66
%


0.67
%


0.72
%


0.78
%


0.84
%Capital Ratios:Equity to total assets at end of period


12.29
%


14.04
%


7.09
%


7.10
%


6.91
%Average equity to average assets


13.25
%


9.69
%


7.07
%


7.06
%


6.72
%Other Data:Number of branches (including in-store locations and loan
    production offices)


37



34



33



33



31Number of in-store branches


12



16



18



18



17     (1)
    
    Until its conversion to a federally chartered savings bank
    on January 1, 2006, ViewPoint Bank was a credit union,
    generally exempt from federal and state income taxes. As a
    result of the change in tax status on January 1, 2006,
    ViewPoint Bank recorded a deferred tax asset in the amount of
    $6.6 million, as well as a related tax benefit in the
    income statement of $6.1 million. The following table
    illustrates a reconciliation to pro forma net income for all
    periods presented, had ViewPoint Bank been subject to federal
    and state income taxes:  2007


2006


2005


2004


2003(In Thousands)Historical net income

$
5,067


$
9,686


$
2,724


$
9,016


$
9,943Less: pro forma tax expense


n/a



n/a



(1,008
)


(3,336
)


(3,679
)Less: tax benefit


n/a



6,108



n/a



n/a



n/aPro forma net income

$
5,067


$
3,578


$
1,716


$
5,680


$
6,264  46




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  General
      Critical
    Accounting Policies
    Allowance for Loan Losses.
   47




---



##### Table of Contents



Deferred Income Taxes.
  Business
    Strategy
    
    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
    discontinuing indirect automobile lending;
    Selectively emphasizing products and services to provide
    diversification of revenue sources and to capture our
    customers 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 with de novo branches, and by
    selectively acquiring branch offices and other financial
    institutions;
    Enhancing our focus on core retail and business 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, 2007, and
    December 31, 2006
  General.
   48




---



##### Table of Contents



Loans.
        Allowance for Loan Losses.
       49




---



##### Table of Contents



Cash and Cash Equivalents.
  Securities.
  Deposits.
    Borrowings.
  Shareholders Equity.
 50




---



##### Table of Contents



Average
    Balances, Net Interest Income, Yields Earned and Rates
    Paid
    Year Ended December 31,2007


2006


2005Average


Interest





Average


Interest





Average


InterestOutstanding


Earned/


Yield/


Outstanding


Earned/


Yield/


Outstanding


Earned/


Yield/Balance


Paid


Rate


Balance


Paid


Rate


Balance


Paid


Rate(Dollars in Thousands)Interest-earning assets
    Loans receivable(1)

$
921,387


$
54,674



5.93
%

$
1,009,131


$
56,154



5.56
%

$
1,090,906


$
57,573



5.28
%Mortgage-backed securities


126,158



6,296



4.99



58,074



2,851



4.91



2,512



78



3.11Collateralized mortgage obligations


316,469



16,965



5.36



147,025



7,060



4.80



70,284



2,652



3.77Investment securities


44,664



2,046



4.58



38,967



1,420



3.64



48,996



1,454



2.97FHLB stock


4,581



208



4.54



3,750



185



4.93



4,435



160



3.61Interest-earning deposit accounts


83,182



3,865



4.65



121,587



5,056



4.16



91,598



2,393



2.61Other earnings assets


























2,324



111



4.78Total interest-earning assets


1,496,441



84,054



5.62



1,378,534



72,726



5.28



1,311,055



64,421



4.91Noninterest-earning assets


102,687











101,627











107,068Total assets

$
1,599,128










$
1,480,161










$
1,418,123Interest-bearing liabilitiesInterest-bearing demand

$
72,399



428



0.59


$
67,116



226



0.34


$
109,424



239



0.22Savings and money market


619,716



17,711



2.86



719,921



18,432



2.56



775,906



14,792



1.91Time


394,658



18,934



4.80



249,537



10,260



4.11



182,724



5,931



3.25Borrowings


83,501



4,048



4.85



51,187



2,385



4.66



52,149



2,380



4.56Other interest-bearing liabilities














10,775



83



0.77











Total interest-bearing liabilities


1,170,274



41,121



3.51



1,098,536



31,386



2.86



1,120,203



23,342



2.08Noninterest-bearing liabilities


216,985











238,251











197,614Total liabilities


1,387,259











1,336,787











1,317,817Total Capital


211,869











143,374











100,306Total liabilities and capital

$
1,599,128










$
1,480,161










$
1,418,123Net interest income





$
42,933










$
41,340










$
41,079Net interest rate spread










2.11
%










2.42
%










2.83
%Net earnings assets

$
326,167










$
279,998










$
190,852Net interest margin










2.87
%










3.00
%










3.13
%Average interest-earning assets to average interest-bearing
    liabilities


127.87
%










125.49
%










117.04
%     1
    
    Calculated net of deferred fees, loan discounts, loans in
    process and allowance for loan losses. 51




---



##### Table of Contents



Rate/Volume
    Analysis
    Year Ended December 31,2007 vs. 2006


2006 vs. 2005Increase





Increase(Decrease)


Total


(Decrease)


TotalDue to


Increase


Due to


IncreaseVolume


Rate


(Decrease)


Volume


Rate


(Decrease)(In Thousands)Interest-earning assetsLoans receivable

$
(5,066
)

$
3,586


$
(1,480
)

$
(4,452
)

$
3,033


$
(1,419
)Mortgage-backed securities


3,397



48



3,445



2,702



71



2,773Collateralized mortgage obligations


8,997



908



9,905



3,527



881



4,408Investment securities


227



399



626



(330
)


296



(34
)FHLB stock


39



(16
)


23



(27
)


52



25Interest earning deposit accounts


(1,734
)


543



(1,191
)


949



1,714



2,663Other earning assets














(111
)






(111
)Total interest-earning assets

$
5,860


$
5,468



11,328


$
2,258


$
6,047



8,305Interest-bearing liabilitiesSavings and money market

$
(2,728
)

$
2,007



(721
)

$
(1,131
)

$
4,771



3,640Interest-bearing demand


19



183



202



(113
)


100



(13
)Time


6,740



1,934



8,674



2,503



1,826



4,329Borrowings


1,563



100



1,663



(44
)


49



5Other interest-bearing liabilities


(83
)






(83
)


83







83Total interest-bearing liabilities

$
5,511


$
4,224



9,735


$
1,298


$
6,746



8,044Net interest income









$
1,593










$
261   Comparison
    of Results of Operation for the Years Ended December 31,
    2007 and 2006
  General.
  Interest Income.
 52




---



##### Table of Contents



Interest Expense.
    Net Interest Income.
    Provision for Loan Losses.
       53




---



##### Table of Contents



Noninterest Income.
    Noninterest Expense.
  Income Tax Expense.
  Comparison
    of Results of Operation for the Years Ended December 31,
    2006 and 2005
  General.
  Interest Income.
     54




---



##### Table of Contents



Interest Expense.
  Net Interest Income.
  Provision for Loan Losses.
    Noninterest Income.
  Noninterest Expense.
  Income Tax Expense.
 55




---



##### Table of Contents



Liquidity
               56




---



##### Table of Contents



Off-Balance
    Sheet Arrangements, Contractual Obligations and
    Commitments
    December 31, 2007Less


Onethan


Through


FourOne


Three


Through


After FiveYear


Years


Five Years


Years


Total(In Thousands)Contractual obligations:Federal Home Loan Bank advances

$
18,655


$
51,958


$
39,867


$
17,971


$
128,451Operating leases (premises)


1,008



2,177



633







3,818New markets equity fund


640















640Total borrowings and operating leases

$
20,303


$
54,135


$
40,500


$
17,971



132,909Off-balance sheet loan commitments:Undisbursed portion of loans closed


















68,540Unused lines of credit


















70,586Total loan commitments


















139,126Total contractual obligations and loan commitments

















$
272,035       Capital
    Resources
       57




---



##### Table of Contents



Impact of
    Inflation
    Recent
    Accounting Pronouncements
          Accounting for Certain
    Hybrid Financial Instruments Derivatives Implementation Group Issue
    B40, Application of Paragraph 13(b) to Securitized
    Interests in Prepayable Financial Assets
 58




---



##### Table of Contents



Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  No. 06-4, Accounting for Deferred Compensation and Postretirement
    Benefit Aspects of Endorsement Split-Dollar Life Insurance
    Arrangements
   59




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Asset/Liability
    Management
  Our Risk When Interest Rates Change.
  How We Measure Our Risk of Interest Rate
    Changes.
               60




---



##### Table of Contents



December 31, 2007Change inInterestRates in


Net Portfolio Value


NPVBasis Points


$ Amount


$ Change


% Change


Ratio%(Dollars in Thousands)300



110,428



(48,605)



(30.56)



7.10200



126,159



(32,874)



(20.67)



7.95100



142,872



(16,161)



(10.16)



8.820



159,033











9.62(100)



174,047



15,014



9.44



10.35(200)



186,643



27,610



17.36



10.93(300)



199,493



40,460



25.44



11.52   December 31, 2006Change inInterestRates in


Net Portfolio Value


NPVBasis Points


$ Amount


$ Change


% Change


Ratio%(Dollars in Thousands)300



109,283



(42,252)



(27.88)



7.59200



122,966



(28,569)



(18.85)



8.39100



137,722



(13,813)



(9.12)



9.230



151,535











9.97(100)



165,111



13,576



8.96



10.69(200)



176,053



24,518



16.18



11.25(300)



187,052



35,517



23.44



11.80      61




---



##### Table of Contents



62




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    FINANCIAL STATEMENTS
    December 31, 2007, 2006, and 2005
    INDEX
   
 PageREPORT OF INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM


64CONSOLIDATED FINANCIAL STATEMENTSConsolidated Balance Sheets


65Consolidated Statements of Income


66Consolidated Statements of Comprehensive
    Income


67Consolidated Statements of Changes in
    Stockholders Equity


68Consolidated Statements of Cash Flows


69Notes to Consolidated Financial Statements


70   63




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                 
    64




---



##### Table of Contents



CONSOLIDATED BALANCE SHEETS
    2007


2006ASSETSCash and due from financial institutions

$
25,427


$
40,464Short-term interest-bearing deposits in otherfinancial institutions


48,051



115,391Total cash and cash equivalents


73,478



155,855Securities available for sale


542,875



324,523Securities held to maturity (fair value 2007 
    $20,202,
    2006  $11,236)


20,091



11,271Loans held for sale


13,172



3,212Loans, net of allowance of $6,165- 2007, 
    $6,507  2006


908,650



965,452Federal Home Loan Bank stock, at cost


6,241



3,724Bank-owned life insurance


26,497



Mortgage servicing rights


1,648



1,760Foreclosed assets, net


840



655Premises and equipment, net


40,862



42,262Membership capital account at corporate credit union


1,000



1,000Goodwill


1,089



Accrued interest receivable


6,778



5,867Other assets


14,983



14,179Total assets

$
1,658,204


$
1,529,760LIABILITIES AND SHAREHOLDERS EQUITYDepositsNon-interest-bearing demand

$
185,149


$
211,301Interest-bearing demand


76,948



69,711Savings and money market


578,728



647,706Time


456,768



306,163Total deposits


1,297,593



1,234,881Federal Home Loan Bank advances


128,451



55,762Other liabilities


28,366



24,339Total liabilities


1,454,410



1,314,982Commitments and contingent liabilities (See Note 18)






Shareholders equityCommon stock, $.01 par value; 75,000,000 shares
    authorized; 26,208,958 shares issued  2007,
    25,788,750 shares issued  2006


262



258Additional paid-in capital


113,612



111,844Retained earnings


114,801



111,849Accumulated other comprehensive income (loss)


861



(69
)Unearned Employee Stock Ownership Plan (ESOP) shares, at cost;812,346 shares  2007,
    905,185 shares  2006


(8,176
)


(9,104
)Treasury stock, at cost;
    1,000,455 shares  2007,
    0 shares  2006


(17,566
)


Total shareholders equity


203,794



214,778Total liabilities and shareholders equity

$
1,658,204


$
1,529,760    65




---



##### Table of Contents



CONSOLIDATED
    STATEMENTS OF INCOME
    Years ended December 31,
    (Dollar amounts in thousands, except per share data)  2007


2006


2005Interest and dividend incomeLoans, including fees

$
54,674


$
56,154


$
57,573Taxable securities


25,307



11,331



4,184Interest-bearing deposits in other financial institutions


3,865



5,056



2,393Other


208



185



27184,054



72,726



64,421Interest expenseDeposits


37,073



28,918



20,962Federal Home Loan Bank advances


4,048



2,385



2,380Other






83



41,121



31,386



23,342Net interest income


42,933



41,340



41,079Provision for loan losses


3,268



2,565



6,120Net interest income after provision for loan losses


39,665



38,775



34,959Noninterest incomeService charges and fees


22,389



20,589



20,359Brokerage fees


602



557



548Gain on sale of membership interest










855Net gain on sales of loans


1,298



199



351Loan servicing fees


305



262



383Bank-owned life insurance income


460







Title fee income






384



524Other


1,049



1,443



1,46526,103



23,434



24,485Noninterest expenseSalaries and employee benefits


31,557



31,641



31,654Advertising


2,238



2,636



2,517Occupancy and equipment


5,198



5,426



5,402Outside professional services


4,159



1,605



322Data processing


4,055



4,223



4,453Office operations


6,287



6,359



6,540Charter conversion costs






101



1,137Deposit processing charges


1,145



915



1,207Other


3,318



3,174



3,48857,957



56,080



56,720Income before income tax expense (benefit)


7,811



6,129



2,724Income tax expense (benefit)


2,744



(3,557
)


Net income

$
5,067


$
9,686


$
2,724Unaudited pro forma income information (See Note 13):Less pro forma income tax expense










1,008Less tax benefit- change in status






6,108



Pro forma net income

$
5,067


$
3,578


$
1,716Earnings per share:Basic

$
0.20


$
0.081


$
n/a2Diluted

$
0.20


$
0.081


$
n/a2       1
    Stock offering ended on
    September 29, 2006. Earnings per share is for the period
    September 29, 2006, to December 31, 2006.  2 n/a 
    not applicable
 66




---



##### Table of Contents



CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME
    Years ended December 31,
    (Dollar amounts in thousands)  2007


2006


2005Net income

$
5,067


$
9,686


$
2,724Other comprehensive income (loss):Change in unrealized gains (losses) on securities available for
    sale


1,423



1,763



(974
)Tax effect


(493
)


(600
)


Other comprehensive income (loss), net of tax


930



1,163



(974
)Comprehensive income

$
5,997


$
10,849


$
1,750    67




---



##### Table of Contents





CONSOLIDATED
    STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
    Years ended December 31,
    (Dollar amounts in thousands, except per share and share data)  AccumulatedAdditional


Unearned








OtherCommon


Paid-In


ESOP


Regular


Retained


Comprehensive


Treasury


TotalStock


Capital


Shares


Reserve


Earnings


Income (Loss)


Stock


EquityBalance at January 1, 2005

$



$



$



$
35,786


$
63,903


$
(258
)

$



$
99,431Comprehensive income:Net income


















2,724











2,724Change in net unrealized gains (losses) on securities available
    for sale






















(974
)






(974
)Total comprehensive income






























1,750Balance at December 31,2005

$



$



$



$
35,786


$
66,627


$
(1,232
)

$



$
101,181Transfer due to conversion














(35,786
)


35,786











Common stock issued in initial public offering, net of issuance
    costs, 25,788,750 shares


258



111,732



(9,284
)


















102,706Capitalization of Mutual Holding Company


















(250
)










(250
)ESOP shares earned, 23,210 shares






112



180



















292Comprehensive income:






















Net income


















9,686











9,686Change in net unrealized gains (losses) on securities available
    for sale






















1,163







1,163Total comprehensive income






























10,849Balance at December 31, 2006

$
258


$
111,844


$
(9,104
)

$



$
111,849


$
(69
)

$



$
214,778ESOP shares earned, 92,839 shares






682



928



















1,610Treasury stock purchased at cost, 1,000,455 shares


























(17,566
)


(17,566
)Management restricted stock granted


4



(4
)






















Share- based compensation expense






1,090























1,090Dividends declared ($0.20 per share)


















(2,115
)










(2,115
)Comprehensive income:Net income


















5,067











5,067Change in net unrealized gains (losses) on securities available
    for sale






















930







930Total comprehensive income






























5,997Balance at December 31, 2007

$
262


$
113,612


$
(8,176
)

$



$
114,801


$
861


$
(17,566
)

$
203,794    68




---



##### Table of Contents





CONSOLIDATED
    STATEMENTS OF CASH FLOWS
    Years ended December 31,
    (Dollar amounts in thousands)  2007


2006


2005Cash flows from operating activitiesNet income

$
5,067


$
9,686


$
2,724Adjustments to reconcile net income to net cash from operating
    activitiesProvision for loan losses


3,268



2,565



6,120Depreciation and amortization


4,469



4,683



5,043Premium amortization and accretion of securities, net


(873
)


(264
)


662ESOP compensation expense


1,610



292



Share-based compensation expense


1,090







Loss on new markets equity fund


178







Amortization of mortgage servicing rights


291



404



467Net (gain)on loans held for sale


(1,298
)


(199
)


(351
)Loans originated for sale


(87,378
)


(27,127
)


(20,902
)Proceeds from sale of loans held for sale


78,716



26,420



22,185FHLB stock dividends


(208
)


(185
)


(159
)Earnings on bank-owned life insurance


(460
)






(Gain)/loss on disposition of property and equipment


165



265



(3
)Net (gain)/loss on sales of other real estate owned


156



67



(6
)Net change in deferred loan costs


2,973



4,485



3,262Net change in accrued interest receivable


(911
)


(857
)


(977
)Net change in other assets


(1,625
)


(6,178
)


1,273Net change in other liabilities


5,627



625



7,428Net cash from operating activities


10,857



14,682



26,766Cash flows from investing activitiesNet decrease in certificates of deposit with other financial
    institutions






11,000



5,000Contribution to new markets equity fund


(1,600
)


(960
)


Available-for-sale
    securities:Maturities, prepayments and calls


103,299



346,476



18,805Purchases


(319,337
)


(567,597
)


(95,851
)Held-to-maturity
    securities:Maturities, prepayments and calls


5,565



30,540



21,239Purchases


(14,403
)






Loans purchased


(45,567
)


(27,406
)


(8,825
)Participation loans sold


1,128



7,408



18,430Student loans sold


4,012



3,816



3,066Net change in loans


90,127



115,973



(8,872
)Purchase of the assets of Bankers Financial Mortgage Group,
    Ltd.


(1,323
)






Purchase of bank-owned life insurance


(26,037
)






Net change in NCUSIF deposit






10,424



(641
)(Purchase) redemption of FHLB stock


(2,309
)


419



682Purchases of premises and equipment


(3,212
)


(2,633
)


(2,905
)Proceeds from sale of premises and equipment


154



110



Proceeds on sale of other real estate owned


549



398



157Net cash from investing activities


(208,954
)


(72,032
)


(49,715
)Cash flows from financing activitiesNet change in deposits


62,712



(22,846
)


28,728Proceeds from Federal Home Loan Bank advances


84,507



17,003



Repayments on Federal Home Loan Bank advances


(11,818
)


(8,921
)


(9,865
)Proceeds from sale of common stock, net of issuance costs






102,706



Capitalization of MHC






(250
)


Treasury stock purchased


(17,566
)






Payment of dividends


(2,115
)






Net cash from financing activities


115,720



87,692



18,863Net change in cash and cash equivalents


(82,377
)


30,342



(4,086
)Beginning cash and cash equivalents


155,855



125,513



129,599Ending cash and cash equivalents

$
73,478


$
155,855


$
125,513Supplemental cash flow information:Interest paid

$
40,610


$
31,021


$
23,372Income taxes paid

$
3,567


$
1,332


$
Supplemental noncash disclosures:Transfers from loans to other real estate owned

$
983


$
916


$
100Payable for new markets equity fund

$
640


$
2,240


$
    69




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollar amounts in thousands)
  NOTE 1 -
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Organization
    Nature of Operations and Principles of
    Consolidation
        Use of Estimates
 70




---



##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 1 -
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES(Continued)  Cash Flows
  Securities
      Loans Held for Sale
    Loans
      Allowance for Loan Losses
 71




---



##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 1 -
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES(Continued)        Servicing Rights
        Transfers of Financial Assets
 72




---



##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 1 -
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES(Continued)    Foreclosed Assets
  Premises and Equipment
  Federal Home Loan Bank (FHLB) stock
  Bank-Owned Life Insurance EITF 06-5,
  No. 06-5, Bulletin No. 85-4 EITF 06-5
  Goodwill
  Long-term Assets
  Membership Capital Account at Corporate Credit
    Union
  National Credit Union Share Insurance
    Fund Deposit
 73




---



##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 1 -
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES(Continued)    Brokerage Fee Income
  Title Fee Income
  Mortgage Servicing Revenue
  Charter Conversion Costs
  Advertising Expense :
  Loan Commitments and Related Financial
    Instruments
  Income Taxes
    Accounting for
    Uncertainty in Income Taxes
     74




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 1 -
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES(Continued)  and/or
  Share-Based Compensation
  Retirement Plans
  Comprehensive Income
  Loss Contingencies
  Restrictions on Cash
  Equity
  Earnings per common share
  Employee stock ownership plan (ESOP) 93-6.
 75




---



##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 1 -
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES(Continued)    Dividend Restriction
  Fair Value of Financial Instruments
  Operating Segments
  Reclassifications
  Adoption of New Accounting Standards
    Accounting for Certain Hybrid
    Financial Instruments
  Derivatives Implementation Group Issue B40, Application of
    Paragraph 13(b) to Securitized Interests in Prepayable
    Financial Assets
 76




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 1 -
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES(Continued)    Effect of Newly Issued But Not Yet Effective Accounting
    Standards
  Fair Value Measurements 157-2, Effective Date of FASB Statement No. 157
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  No. 06-4, Accounting for Deferred Compensation and Postretirement
    Benefit Aspects of Endorsement Split-Dollar Life Insurance
    Arrangements
    NOTE 2 -
    STOCK ISSUANCE
   77




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 2 -
    STOCK
    ISSUANCE (Continued)
               78




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
  NOTE 3 -
    CONCENTRATION
    OF FUNDS    December 31,2007


2006Federal Reserve Bank of Dallas

$
3,224


$
15,396Federal Home Loan Bank of Dallas


9,238



16,106Texas Independent Bank


4,979



Texas Capital Bank


33,832



99,281Southwest Corporate Federal Credit Union


1,002



1,003$
52,275


$
131,786       NOTE 4 -
    SECURITIES    Gross


GrossUnrealized


UnrealizedDecember 31, 2007

Fair Value


Gains


LossesU.S. government and federal agency

$
35,152


$
189


$
(43
)Agency mortgage-backed and collateralized mortgage obligations


488,107



4,150



(1,098
)Collateralized debt obligations


19,616







(1,880
)Total debt securities

$
542,875


$
4,339


$
(3,021
)   Gross


GrossUnrealized


UnrealizedDecember 31, 2006

Fair Value


Gains


LossesU.S. government and federal agency

$
29,475


$
2


$
(586
)Agency mortgage-backed and collateralized mortgage obligations


295,048



1,232



(754
)Total debt securities

$
324,523


$
1,234


$
(1,340
)  79




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 4 -
    SECURITIES(Continued)    Gross


GrossCarrying


Unrecognized


Unrecognized


FairDecember 31, 2007

Amount


Gains


Losses


ValueAgency mortgage-backed and collateralized mortgage obligations

$
20,091


$
117


$
(5
)

$
20,202Total

$
20,091


$
117


$
(5
)

$
20,202   Gross


GrossCarrying


Unrecognized


Unrecognized


FairDecember 31, 2006

Amount


Gains


Losses


ValueAgency mortgage-backed and collateralized mortgage obligations

$
11,271


$
16


$
(51
)

$
11,236Total

$
11,271


$
16


$
(51
)

$
11,236     Held-to-maturity


AvailableCarrying





for saleDecember 31, 2007

Amount


Fair Value


Fair ValueDue in one year or less

$



$



$
7,975Due from one to five years










27,177Due after ten years










19,616Agency mortgage-backed and collateralized mortgage obligations


20,091



20,202



488,107Total

$
20,091


$
20,202


$
542,875        80




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 4 -
    SECURITIES(Continued)    Less than 12 Months


12 Months or More


TotalDescription of

Fair


Unrealized


Fair


Unrealized


Fair


UnrealizedSecurities

Value


Loss


Value


Loss


Value


LossDecember 31, 2007U.S. Government and federal agency

$



$



$
11,990


$
(43
)

$
11,990


$
(43
)Agency mortgage-backed and collateralized mortgage obligations


127,165



(1,017
)


14,128



(86
)


141,293



(1,103
)Collateralized debt obligations


19,616



(1,880
)










19,616



(1,880
)Total temporarily impaired

$
146,781


$
(2,897
)

$
26,118


$
(129
)

$
172,899


$
(3,026
)   Less than 12 Months


12 Months or More


TotalDescription of

Fair


Unrealized


Fair


Unrealized


Fair


UnrealizedSecurities

Value


Loss


Value


Loss


Value


LossDecember 31, 2006U.S. Government and federal agency

$
2,499


$
(1
)

$
21,977


$
(585
)

$
24,476


$
(586
)Agency mortgage-backed and collateralized mortgage obligations


101,240



(332
)


40,113



(473
)


141,353



(805
)Total temporarily impaired

$
103,739


$
(333
)

$
62,090


$
(1,058
)

$
165,829


$
(1,391
)    81




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
  NOTE 5 
    LOANS    December 31,2007


2006Mortgage loans:One-to four-family

$
332,780


$
282,918Commercial


251,915



179,635One-to four-family construction






1,146Commercial construction


225



4,035Home equity


85,064



83,899669,984



551,633Automobile indirect loans


104,156



219,147Automobile direct loans


98,817



151,861Government-guaranteed student loans


5,422



5,410Commercial  non-mortgage loans


12,278



9,780Consumer lines of credit and unsecured loans


16,351



21,284Other consumer loans, secured


7,204



9,268Total gross loans


914,212



968,383Deferred net loan origination costs


603



3,576Allowance for loan losses


(6,165
)


(6,507
)$
908,650


$
965,452     Years EndedDecember 31,2007


2006


2005Beginning balance

$
6,507


$
7,697


$
8,424Provision for loan losses


3,268



2,565



6,120Loans charged-off


(5,080
)


(4,966
)


(7,250
)Recoveries


1,470



1,211



403Ending balance

$
6,165


$
6,507


$
7,697     December 31, 2007


December 31, 2006Year-end loans with no allocated allowance for loan losses

$
2,729


$
986Year-end loans with allocated allowance for loan losses


3,042



2,461Total

$
5,771


$
3,447Amount of the allowance for loan losses allocated to impaired
    loans at year-end

$
328


$
305   82




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 5 
    LOANS(Continued)  Years EndedDecember 31,2007


2006


2005Average of individually impaired loans during year

$
4,027


$
6,114


$
3,935Interest income recognized during impairment


370



470



284Cash-basis interest income recognized


351



469



280     December 31, 2007


December 31, 2006Loans past due over 90 days still on accrual

$



$
30Nonaccrual loans


2,102



1,304        NOTE 6 
    LOAN
    SALES AND SERVICING  2007


2006Loans held for sale activity was as follows:Beginning balance

$
3,212


$
2,306Loans originated for sale


87,378



27,127Proceeds from sale of loans held for sale


(78,716
)


(26,420
)Net gain on sale of loans held for sale


1,298



199Loans held for sale, net

$
13,172


$
3,212     2007


2006


2005Mortgage loan portfolios serviced for 
    FNMA

$
203,933


$
216,518


$
240,370Other investors


194,518



148,811



134,842      83




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
     NOTE 6 
    LOAN
    SALES AND
    SERVICING(Continued)     2007


2006


2005Servicing rights:Beginning of year

$
1,760


$
2,068


$
2,254Additions


179



96



281Amortized to expense


(291
)


(404
)


(467
)End of year

$
1,648


$
1,760


$
2,068         2008

$
2252009


1992010


1722011


1492012


130    NOTE 7 
    ACCRUED
    INTEREST RECEIVABLE    December 31, 2007


December 31, 2006Loans

$
3,993


$
4,298Securities


2,785



1,569Total

$
6,778


$
5,867   84




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
  NOTE 8 
    PREMISES
    AND EQUIPMENT    December 31, 2007


December 31, 2006Land

$
9,740


$
9,740Buildings


36,897



35,446Furniture, fixtures and equipment


34,594



32,774Leasehold improvements


2,321



2,80183,552



80,761Less: Accumulated depreciation


(42,690
)


(38,499
)Total

$
40,862


$
42,262     Operating Leases
  2008

$
1,0082009


8532010


7432011


5812012


477Thereafter


156Total

$
3,818     NOTE 9 
    DEPOSITS      2008

$
382,8412009


50,6712010


12,9022011


4,7212012


5,622Thereafter


11Total

$
456,768    85




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 9 
    DEPOSITS(Continued)     Years EndedDecember 31,2007


2006


2005Interest-bearing demand

$
428


$
226


$
239Savings and money market


17,711



18,432



14,792Time


18,934



10,260



5,931Total

$
37,073


$
28,918


$
20,962    NOTE 10 
    FEDERAL
    HOME LOAN BANK ADVANCES        2008

$
18,6552009


18,1882010


17,2492011


16,5212012


33,110Thereafter


24,728Total

$
128,451    NOTE 11 
    BENEFITS  Post-Retirement Healthcare Plan:
 86




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 11 
    BENEFITS(Continued)   401(k) Plan
  Deferred Compensation Plan
           87




---



##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 11 
    BENEFITS(Continued)    NOTE 12 
    ESOP
    PLAN        2007


2006Allocated to participants


116,049



23,210Unearned


812,346



905,185Total ESOP shares


928,395



928,395Fair value of unearned shares

$
13,428


$
15,334    NOTE 13 
    INCOME TAXES
    Accounting for Income Taxes
 88




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 13 
    INCOME
    TAXES (Continued)
     2007


2006Current expense

$
2,468


$
1,879Deferred expense


276



310Change in tax status






(6,108
)Impact of new Texas margin tax on deferred taxes






362Total income tax expense (benefit)

$
2,744


$
(3,557
)     December 31,


December 31,2007


2006Deferred tax assets:Allowance for loan losses

$
2,137


$
2,255Depreciation


2,735



3,059Deferred compensation arrangements


982



432Self-funded health insurance


161



359Visa litigation


199



Other


177



576,391



6,162Deferred tax liabilities:Mortgage servicing assets


(571
)


(610
)FAS 115


(457
)


Other


(72
)


(80
)(1,100
)


(690
)Net deferred tax asset

$
5,291


$
5,472    89




---



##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 13 
    INCOME
    TAXES (Continued)
     Year EndedDecember 31,2007


2006Federal statutory rate times financial statement income

$
2,656


$
2,084Effect of:State taxes, net of federal benefit


179



81New market tax credit


(84
)


(32
)Bank-owned life insurance income


(156
)


Change in tax status






(6,108
)Impact of new Texas margin tax






362ESOP


133



Other


16



56Total income tax expense (benefit)

$
2,744


$
(3,557
)       NOTE 14 
    SALE OF MEMBERSHIP INTERESTS
     90




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 15 
    RELATED
    PARTY TRANSACTIONS    Beginning balance

$
1,952New loans


99Effect of changes in composition of related parties


(17
)Repayments


(298
)Ending balance

$
1,736     NOTE 16 
    SHARE-BASED
    COMPENSATION         91




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 16 
    SHARE-BASED
    COMPENSATION(Continued)     Weighted-AverageGrantDate FairShares


ValueOutstanding at January 1, 2007





$
Granted May 22, 2007


420,208



18.47Vested






Forfeited






Non-vested at December 31, 2007


420,208


$
18.47             Risk-free interest rate


3.82 to 4.79
%Expected term of stock options (years)


7.50Expected stock price volatility


21.20 to 22.40
%Expected dividends


1.08 to 1.12
%    92




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 16 
    SHARE-BASED
    COMPENSATION(Continued)      Weighted-AverageWeighted-


Remaining


AggregateAverage


Contractual


IntrinsicOptions

Shares


Exercise Price


Term


ValueOutstanding at beginning of year





$
Granted


247,818



18.44Exercised






Forfeited


(44,876
)


18.43Outstanding at end of year


202,942


$
18.44



9.4


$
         NOTE 17 
    REGULATORY
    CAPITAL MATTERS       93




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 17 
    REGULATORY
    CAPITAL
    MATTERS(Continued)      To Be Well CapitalizedRequired for Capital


Under Prompt CorrectiveActual


Adequacy Purposes


Action RegulationsAmount

Ratio


Amount

Ratio


Amount

Ratio(Dollars in Thousands)As of December 31, 2007:Total capital (to risk weighted assets)

$
167,002


16.36
%

$
81,649


8.00
%

$
102,061


10.00
%Tier 1 (core) capital (to risk weighted assets)


161,167


15.79



40,824


4.00



61,236


6.00Tier 1 (core) capital (to adjusted total assets)


161,167


9.75



66,099


4.00



82,624


5.00As of December 31, 2006:Total capital (to risk weighted assets)

$
161,239


16.34
%

$
78,964


8.00
%

$
98,706


10.00
%Tier 1 (core) capital (to risk weighted assets)


155,038


15.71



39,482


4.00



59,223


6.00Tier 1 (core) capital (to adjusted total assets)


155,038


10.16



61,043


4.00



76,302


5.00     Dividend Restrictions
 94




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 17 
    REGULATORY
    CAPITAL
    MATTERS(Continued)    December 31,2007


2006GAAP equity

$
166,435


$
158,741Disallowed servicing and deferred tax assets


(3,308
)


(3,783
)Unrealized loss (gain) on securities available for sale


(861
)


69Goodwill and other assets


(1,099
)


11Tier I Capital


161,167



155,038General allowance for loan losses


5,835



6,201Total capital

$
167,002


$
161,239   NOTE 18 
    LOAN
    COMMITMENTS, CONTINGENT LIABILITIES AND OTHER RELATED
    ACTIVITIES      2007


2006Fixed


Variable


Fixed


VariableRate


Rate


Rate


RateCommitments to make loans

$
43,037



25,503


$
11,010


$
4,005Unused lines of credit


7,714



62,872



8,071



62,878        95




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 18 
    LOAN
    COMMITMENTS, CONTINGENT LIABILITIES AND OTHER RELATED ACTIVITIES(Continued)          NOTE 19 
    BUSINESS
    COMBINATION     96




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 19 
    BUSINESS
    COMBINATION(Continued)      Fixed assets

$
176Pre-paid rents on assigned contracts


33Security deposits on assigned contracts


25Goodwill


1,089Total

$
1,323     2007Beginning of year

$
Acquired goodwill


1,089Impairment


End of year

$
1,089     NOTE 20 
    FAIR
    VALUES OF FINANCIAL INSTRUMENTS    2007


2006Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueFinancial assetsCash and cash equivalents

$
73,478


$
73,478


$
155,855


$
155,855Securities available for sale


542,875



542,875



324,523



324,523Securities held to maturity


20,091



20,202



11,271



11,236Loans held for sale


13,172



13,172



3,212



3,212Loans, net


908,650



903,831



965,452



955,639Federal Home Loan Bank stock


6,241







3,724



Membership capital account at corporate credit union


1,000



1,000



1,000



1,000Accrued interest receivable


6,778



6,778



5,867



5,867Financial liabilitiesDeposits


(1,297,593
)


(1,325,853
)


(1,234,881
)


(1,235,432
)Federal Home Loan Bank advances


(128,451
)


(130,588
)


(55,762
)


(54,454
)Accrued interest payable


(982
)


(982
)


(470
)


(470
)  97




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 20 
    FAIR
    VALUES OF FINANCIAL INSTRUMENTS(Continued)        NOTE 21 
    PARENT
    COMPANY ONLY CONDENSED FINANCIAL INFORMATION    CONDENSED BALANCE SHEETSYear ended December 31,

2007


2006ASSETSCash on deposit at subsidiary

$
27,953


$
46,933Investment in banking subsidiary


166,435



158,741Receivable from banking subsidiary


1,090



ESOP note receivable and other assets


8,551



9,104Total assets

$
204,029


$
214,778LIABILITIES AND EQUITYIncome tax payable

$
51


$
Other liabilities


184



Shareholders equity


203,794



214,778Total liabilities and shareholders equity

$
204,029


$
214,778  98




---



##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
   NOTE 21 
    PARENT
    COMPANY ONLY CONDENSED FINANCIAL INFORMATION(Continued)  CONDENSED
    STATEMENTS OF INCOME
  September 29,2006,Year Ended


throughDecember 31,


December 31,2007


2006Interest income on ESOP loans

$
481


$
125Other income


1



Operating expenses


333



Income before income tax and equity in undistributed earnings of
    subsidiary


149



125Income tax expense


50



Equity in undistributed earnings of subsidiary


4,968



1,824Net income

$
5,067


$
1,949   CONDENSED
    STATEMENTS OF CASH FLOWS
  September 29,2006,Year Ended


throughDecember 31,


December 31,2007


2006Cash flows from operating activities:Net income

$
5,067


$
1,949Adjustments:Equity in undistributed income of bank subsidiary


(4,968
)


(1,824
)Change in income tax payable


50



Net cash from operating activities


149



125Cash flows from investing activities:Initial investment in banking subsidiary






(55,828
)Fund ESOP note receivable






(9,284
)Distribution to capitalize ViewPoint MHC






(250
)Payments received on ESOP note receivable


552



180Net cash from investing activities


552



(65,182
)Cash flows from financing activities:Treasury stock purchased


(17,566
)Dividends paid


(2,115
)Proceeds from sale of common stock, net of issuance costs






111,990Net cash from financing activities


(19,681
)


111,990Net change in cash and cash equivalents


(18,980
)


46,933Beginning cash and cash equivalents


46,933



Ending cash and cash equivalents

$
27,953


$
46,933   99




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
  NOTE 22 
    EARNINGS
    PER SHARE    2007


2006BasicNet income

$
5,067


$
1,949Weighted average common shares outstanding


25,746,038



25,788,750Less: Average unallocated ESOP shares


862,296



922,406Average unvested restricted stock awards


257,176



Average shares


24,626,566



24,866,344Basic earnings per common share

$
0.20


$
0.08DilutedNet income

$
5,067


$
1,949Weighted average common shares outstanding for basic earnings
    per common share


24,626,566



24,866,344Add: Dilutive effects of assumed exercises of stock options






Dilutive effects of full vesting of stock awardsAverage shares and dilutive potential common shares


24,626,566



24,866,344Diluted earnings per common share

$
0.20


$
0.08    100




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##### Table of Contents



VIEWPOINT
    FINANCIAL GROUP AND SUBSIDIARY
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollar amounts in thousands)
  NOTE 23 
    QUARTERLY
    FINANCIAL
    DATA(Unaudited)  Net InterestIncome afterInterest


Provision for


Net


Earnings per ShareIncome


Loan Losses


Income (Loss)


Basic


Diluted2007First quarter

$
19,910


$
9,565


$
1,099


$
0.04


$
0.04Second quarter


20,772



10,054



1,315



0.05



0.05Third quarter


21,792



10,513



1,601



0.07



0.07Fourth quarter


21,580



9,533



1,052



0.04



0.042006First quarter

$
16,577


$
9,392


$
6,383
1

$
n/a


$
n/aSecond quarter


17,610



9,587



(172
)


n/a



n/aThird quarter


18,954



9,955



1,526



n/a
2


n/a
2Fourth quarter


19,585



9,841



1,949



0.08



0.08     1
  2
 101




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   Item 9A. Controls
    and Procedures  (a)
    Evaluation of Disclosure Controls and Procedures: An
    evaluation of our disclosure controls and procedures (as defined
    in
    Rule 13a-15(e)
    under the Securities Exchange Act of 1934 (the Act))
    was carried out as of December 31, 2007, under the
    supervision and with the participation of our Chief Executive
    Officer, Chief Financial Officer and several other members of
    our senior management. Our Chief Executive Officer and Chief
    Financial Officer concluded that, as of December 31, 2007,
    our disclosure controls and procedures were effective in
    ensuring that the information we are required to disclose in the
    reports we file or submit under the Act is (i) accumulated
    and communicated to our management (including the Chief
    Executive Officer and Chief Financial Officer) in a timely
    manner, and (ii) recorded, processed, summarized and
    reported within the time periods specified in the SECs
    rules and forms.  (b)
    Managements Report on Internal Control Over Financial
    Reporting: Management of ViewPoint Financial Group and
    Subsidiary (the Company) is responsible for
    establishing and maintaining an effective system of internal
    control over financial reporting. The Companys system of
    internal control over financial reporting is designed to provide
    reasonable assurance regarding the reliability of financial
    reporting and the preparation of financial statements for
    external purposes in accordance with generally accepted
    accounting principles. There are inherent limitations in the
    effectiveness of any system of internal control over financial
    reporting, including the possibility of human error and
    circumvention or overriding of controls. Accordingly, even an
    effective system of internal control over financial reporting
    can provide only reasonable assurance with respect to financial
    statement preparation. Projections of any evaluation of
    effectiveness to future periods are subject to the risks that
    controls may become inadequate because of changes in conditions
    or that the degree of compliance with the policies or procedures
    may deteriorate.    Form 10-K,
  (c)
    Changes in Internal Control Over Financial Reporting:
    During the quarter ended December 31, 2007, no change
    occurred in our internal control over financial reporting that
    has materially affected, or is reasonably likely to materially
    affect, our internal control over financial reporting.  Item 9B.
    Other
    Information   102




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##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Directors and Executive Officers. Form 10-K,
  Section 16(a) Beneficial Ownership Reporting
    Compliance.
  Code of Ethics. www.viewpointbank.com.
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Form 10-K
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   103




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##### Table of Contents



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  (a)(1)
    
    Financial Statements: See Part II  Item 8.
    Financial Statements and Supplementary Data.(a)(2)
    
    Financial Statement Schedules: All financial statement schedules
    have been omitted as the information is not required under the
    related instructions or is not applicable.(a)(3)
    
    Exhibits: See below.(b)
    
    Exhibits:  ExhibitNumber

Description3.1

Charter of the Registrant (incorporated herein by reference to
    Exhibit 3.1 to the Registrants Registration Statement
    on
    Form S-1,
    as amended (File
    No. 0-24566-01))3.2

Bylaws of the Registrant (incorporated herein by reference to
    Exhibit 3.2 to the Registrants Quarterly Report on
    Form 10-Q
    filed with the SEC on August 9, 2007 (File
    No. 001-32992))4.1

Certificate of Registrants Common Stock (incorporated
    herein by reference to Exhibit 4.0 to the Registrants
    Registration Statement on
    Form S-1,
    as amended (File
    No. 0-24566-01))10.1

Employment Agreement by and between the Registrant and Garold R.
    Base (incorporated herein by reference to Exhibit 10.1 to
    the Registrants Current Report on
    Form 8-K
    filed with the SEC on October 4, 2006 (File
    No. 001-32992))10.2

Amendment to Employment Agreement by and between the Registrant
    and Garold R. Base (incorporated herein by reference to
    Exhibit 10.1 to the Registrants Current Report on
    Form 8-K
    filed with the SEC on January 10, 2008 (File
    No. 001-32992))10.3

Employment Agreement by and between ViewPoint Bank, the
    Registrants wholly owned operating subsidiary, and Garold
    R. Base (incorporated herein by reference to Exhibit 10.2
    to the Registrants Current Report on
    Form 8-K
    filed with the SEC on October 4, 2006 (File
    No. 001-32992))10.4

Amendment to Employment Agreement by and between ViewPoint Bank,
    the Registrants wholly owned operating subsidiary, and
    Garold R. Base (incorporated herein by reference to
    Exhibit 10.2 to the Registrants Current Report on
    Form 8-K
    filed with the SEC on January 10, 2008 (File
    No. 001-32992))10.5

Amendment to Employment Agreement by and between ViewPoint Bank,
    the Registrants wholly owned operating subsidiary, and
    Garold R. Base (incorporated herein by reference to
    Exhibit 10.1 to the Registrants Current Report on
    Form 8-K
    filed with the SEC on March 6, 2008 (File
    No. 001-32992))10.6

Form of Severance Agreement (incorporated herein by reference to
    Exhibit 10.3 to the Registrants Current Report on
    Form 8-K
    filed with the SEC on October 1, 2007 (File
    No. 001-32992))10.7

Summary of Director Board Fee Arrangements (incorporated herein
    by reference to Exhibit 3.2 to the Registrants
    Quarterly Report on
    Form 10-Q
    filed with the SEC on August 9, 2007 (File
    No. 001-32992))10.8

ViewPoint Bank Deferred Compensation Plan (incorporated herein
    by reference to Exhibit 10.7 to the Registrants
    Registration Statement on
    Form S-1,
    as amended (File
    No. 0-24566-01))10.9

Amended and Restated ViewPoint Bank Supplemental Executive
    Retirement Plan (incorporated herein by reference to
    Exhibit 10.8 to the Registrants Registration
    Statement on
    Form S-1,
    as amended (File
    No. 0-24566-01))10.10

ViewPoint Bank 2007 Executive Officer Incentive Plan
    (incorporated herein by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    filed with the SEC on July 31, 2007 (File
    No. 001-32992)) 104




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##### Table of Contents



ExhibitNumber

Description11

Statement regarding computation of per share earnings (See
    Note 22 of the Notes to Consolidated Financial Statements
    included in this
    Form 10-K).21

Subsidiaries of the Registrant23

Consent of Accountants24

Power of Attorney (on signature page)31.1

Rule 13a  14(a)/15d  14(a)
    Certification (Chief Executive Officer)31.2

Rule 13a  14(a)/15d  14(a)
    Certification (Chief Financial Officer)32

Section 1350 Certifications  105




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##### Table of Contents



SIGNATURES  Pursuant to the requirements of Section 13 or 15
    (d) of the Securities Exchange Act of 1934, the registrant
    has duly caused this report to be signed on its behalf by the
    undersigned hereunto duly authorized.
  VIEWPOINT FINANCIAL GROUP(Registrant)Date:  March 12, 2008

By: /s/ Garold R.
    BaseGarold R. BasePresident and Chief Executive Officer(Principal Executive Officer)   his/her Form 10-K
  Pursuant to the requirements of the Securities Exchange Act
    of 1934, this report has been signed below by the following
    persons on behalf of the Registrant and in the capacities and on
    the dates indicated.
  /s/  Garold
    R. Base

Date:  March 12, 2008Garold R. Base, President,  Chief Executive Officer and
    Director(Duly authorized representative and Principal Executive
    Officer)/s/  James
    B. McCarley

Date:  March 12, 2008James B. McCarley, Chairman of the Board and Director/s/  Gary
    D. Basham

Date:  March 12, 2008Gary D. Basham, Vice Chairman of the Board and Director/s/  Jack
    D. Ersman

Date:  March 12, 2008Jack D. Ersman, Director/s/  Anthony
    J. LeVecchio

Date:  March 12, 2008Anthony J. LeVecchio, Director/s/  Karen
    H. OShea

Date:  March 12, 2008Karen H. OShea, Director/s/  V.
    Keith Sockwell

Date:  March 12, 2008V. Keith Sockwell, Director/s/  Pathie
    E. McKee

Date:  March 12, 2008Pathie E. McKee, Executive Vice President, Chief Financial
    Officer
    and Treasurer  (Principal Financial and Accounting
    Officer)  106




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##### Table of Contents



EXHIBIT INDEX
  Exhibits:21


Subsidiaries of the Registrant23


Consent of Accountants31
.1

Certification of the Chief Executive Officer31
.2

Certification of the Chief Financial Officer32
.0

Section 1350 Certifications