ViewPoint Financial Group Inc. | 2013 | FY | 3

ADJUSTMENTS TO FINANCIAL STATEMENTS
The Company previously reported the Warehouse Purchase Program loans as held for sale as the Company believed that was the most meaningful presentation to our financial statement users, given the collection of the loan was based on sale of the loan. The Company has now concluded that under US GAAP these loans should be accounted for as held for investment. This correction changes the accounting for the warehouse loans from a lower of cost or market accounting method to accounting for loans under ASC 310 with any credit losses incurred as of the balance sheet date recognized in the allowance for loan losses. As we had not reported any valuation decreases below cost in prior periods and we have experienced no credit losses on these loans, this correction had no impact on net income, comprehensive income, earnings per share or income taxes. Additionally, total assets and shareholders' equity remained unchanged. However, this correction does adjust the statement of cash flows by moving cash flows associated with the Warehouse Purchase Program from operating cash flows to investing cash flows.
The tables below illustrate the impact of this change on the Company's Consolidated Balance Sheets for December 31, 2012 and on the Consolidated Statement of Cash Flows for the year ended December 31, 2012. There was no impact to the Company's Consolidated Statements of Income for the year ended December 31, 2012.
Impact to the Consolidated Balance Sheets
December 31, 2012
 
As Originally Presented
 
As Adjusted
Loans held for sale - Warehouse Purchase Program
 
$
1,060,720

 
N/A

Loans held for investment:
 
 
 
 
Loans held for investment, net of allowance for loan losses
 
1,673,204

 
1,673,204

Loans held for investment - Warehouse Purchase Program
 
N/A

 
1,060,720

Total loans held for investment
 
1,673,204

 
2,733,924

Impact to the Consolidated Statements of Cash Flows
 
Year ended December 31, 2012
 
Year ended December 31, 2011
 
As Originally Presented
 
As Adjusted
 
As Originally Presented
 
As Adjusted
Cash flows from operating activities
 
 
 
 
 
 
 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Loans originated or purchased for sale
$
(12,755,753
)
 
$
(145,819
)
 
$
(7,872,727
)
 
$
(271,107
)
Proceeds from sale of loans held for sale
12,534,821

 
184,672

 
7,537,999

 
276,402

Net cash provided by (used in) operating activities
(167,746
)
 
92,039

 
(294,157
)
 
45,866

Cash flows from investing activities
 
 
 
 
 
 
 
Originations of Warehouse Purchase Program loans
N/A

 
(12,609,934
)
 
N/A

 
(7,601,620
)
Proceeds from pay-offs of Warehouse Purchase Program loans
N/A

 
12,350,149

 
N/A

 
7,261,597

Net change in loans held for investment, excluding Warehouse Purchase Program
(182,658
)
 
(182,658
)
 
(123,995
)
 
(123,995
)
Net cash provided by (used in) investing activities
283,857

 
24,072

 
70,665

 
(269,358
)
Cash flows from financing activities
 
 
 
 
 
 
 
Net cash provided by (used in) financing activities
(93,763
)
 
(93,763
)
 
201,190

 
201,190

Net change in cash and cash equivalents
22,348

 
22,348

 
(22,302
)
 
(22,302
)
Beginning cash and cash equivalents
46,348

 
46,348

 
68,650

 
68,650

Ending cash and cash equivalents
$
68,696

 
$
68,696

 
$
46,348

 
$
46,348

us-gaap:AccountingChangesTextBlock