Veritex Holdings, Inc. Reports Second Quarter Operating Results
“The second quarter of 2022 was another exceptional quarter for our Company, reporting 1.76% in PTPP operating return,” said President and CEO,
Quarter to Date | Year to Date | ||||||||||||||||
Financial Highlights | Q2 2022 | Q1 2022 | Q2 2022 | Q2 2021 | |||||||||||||
(Dollars in thousands, except per share data) (unaudited) |
|||||||||||||||||
GAAP | |||||||||||||||||
Net income | $ | 29,626 | $ | 33,470 | $ | 63,096 | $ | 61,243 | |||||||||
Diluted EPS | 0.54 | 0.65 | 1.19 | 1.22 | |||||||||||||
Book value per common share | 26.50 | 26.86 | 26.50 | 25.72 | |||||||||||||
Return on average assets2 | 1.11 | % | 1.36 | % | 1.23 | % | 1.35 | % | |||||||||
Efficiency ratio | 50.76 | 52.84 | 51.76 | 51.01 | |||||||||||||
Return on average equity2 | 8.21 | 10.00 | 9.07 | 9.96 | |||||||||||||
Non-GAAP1 | |||||||||||||||||
Operating earnings | $ | 29,855 | $ | 34,014 | $ | 63,869 | $ | 62,165 | |||||||||
Diluted operating EPS | 0.55 | 0.66 | 1.20 | 1.24 | |||||||||||||
Tangible book value per common share | 18.20 | 18.51 | 18.20 | 17.16 | |||||||||||||
Pre-tax, pre-provision operating earnings | 47,000 | 42,265 | 89,265 | 78,707 | |||||||||||||
Pre-tax, pre-provision operating return on average assets2 | 1.76 | % | 1.71 | % | 1.74 | % | 1.74 | % | |||||||||
Operating return on average assets2 | 1.12 | 1.38 | 1.24 | 1.37 | |||||||||||||
Operating efficiency ratio | 50.45 | 52.05 | 51.22 | 50.62 | |||||||||||||
Return on average tangible common equity2 | 12.68 | 15.84 | 14.17 | 16.15 | |||||||||||||
Operating return on average tangible common equity2 | 12.77 | 16.08 | 14.34 | 16.38 |
1 Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of these non-generally accepted accounting principles (“”GAAP”) financial measures to their most directly comparable GAAP measures.
2 Annualized ratio.
Other Second Quarter Highlights
- Pre-tax, pre-provision operating return on average assets increased 5 bps from the first quarter of 2022 to 1.76%;
- Non-performing assets (“NPAs”) to total assets decreased to 0.40%, or 6 bps from
March 31, 2022 , and decreased to 0.40% or 45 bps fromJune 30, 2021 , respectively; - Net charge-offs to average loans outstanding of 1 basis point for the second quarter of 2022;
- Net interest margin increased to 3.42%, up 20 basis points from the first quarter of 2022;
- Total loans held for investment (“LHI”), excluding mortgage warehouse (“MW”) and paycheck protection program (“PPP”) loans, grew
$790.4 million , or 44.4% annualized, during the three months endedJune 30, 2022 from$7.1 billion at the end of the first quarter of 2022; - Total deposits grew
$628.1 million , or 31.8% annualized, during the three months endedJune 30, 2022 from$7.9 billion at the end of the first quarter of 2022; and - Declared quarterly cash dividend of
$0.20 per share of outstanding common stock payable onAugust 26, 2022 .
Results of Operations for the Three Months Ended
Net Interest Income
For the three months ended
Compared to the three months ended
Noninterest Income
Noninterest income for the three months ended
Compared to the three months ended
Noninterest Expense
Noninterest expense was
Compared to the three months ended
Financial Condition
Total LHI, excluding MW and PPP loans, were
Total deposits were
Asset Quality
Nonperforming assets totaled
The Company recorded a provision for credit losses of
Dividend Information
On
Non-GAAP Financial Measures
Veritex’s management uses certain non-GAAP (
Conference Call
The Company will host an investor conference call and webcast to review the results on
Participants may also register via teleconference at:
https://register.vevent.com/register/BI70101fb149e640b7a111c50ba9b1bef1. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.
A replay will be available within approximately two hours after the completion of the call, and made accessible for one week. You may access the replay via webcast through the investor relations section of Veritex’s website.
About
Headquartered in
Forward-Looking Statements
This earnings release includes “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors, which change over time and are beyond our control, that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
For the Quarter Ended | For the Six Months Ended | |||||||||||||||||||||||||||
2022 |
2022 |
2021 |
2021 |
2021 |
2022 |
2021 |
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(Dollars and shares in thousands) | ||||||||||||||||||||||||||||
Per Share Data (Common Stock): | ||||||||||||||||||||||||||||
Basic EPS | $ | 0.55 | $ | 0.66 | $ | 0.84 | $ | 0.75 | $ | 0.60 | $ | 1.21 | $ | 1.24 | ||||||||||||||
Diluted EPS | 0.54 | 0.65 | 0.82 | 0.73 | 0.59 | 1.19 | 1.22 | |||||||||||||||||||||
Book value per common share | 26.50 | 26.86 | 26.64 | 26.09 | 25.72 | 26.50 | 25.72 | |||||||||||||||||||||
Tangible book value per common share1 | 18.20 | 18.51 | 17.49 | 17.53 | 17.16 | 18.20 | 17.16 | |||||||||||||||||||||
Dividends paid per common share outstanding2 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.40 | 0.37 | |||||||||||||||||||||
Common Stock Data: | ||||||||||||||||||||||||||||
Shares outstanding at period end | 53,951 | 53,907 | 49,372 | 49,229 | 49,498 | 53,951 | 49,498 | |||||||||||||||||||||
Weighted average basic shares outstanding for the period | 53,949 | 50,695 | 49,329 | 49,423 | 49,476 | 52,331 | 49,435 | |||||||||||||||||||||
Weighted average diluted shares outstanding for the period | 54,646 | 51,571 | 50,441 | 50,306 | 50,331 | 53,121 | 50,187 | |||||||||||||||||||||
Summary of Credit Ratios: | ||||||||||||||||||||||||||||
ACL to total LHI, excluding MW and PPP loans | 1.02 | % | 1.02 | % | 1.15 | % | 1.42 | % | 1.59 | % | 1.02 | % | 1.59 | % | ||||||||||||||
NPAs to total assets | 0.40 | 0.46 | 0.51 | 0.77 | 0.85 | 0.40 | 0.85 | |||||||||||||||||||||
Net charge-offs to average loans outstanding | 0.01 | 0.07 | 0.19 | 0.09 | 0.09 | 0.08 | 0.09 | |||||||||||||||||||||
Summary Performance Ratios: | ||||||||||||||||||||||||||||
Return on average assets3 | 1.11 | 1.36 | 1.68 | 1.56 | 1.27 | 1.23 | 1.35 | |||||||||||||||||||||
Return on average equity3 | 8.21 | 10.00 | 12.65 | 11.32 | 9.42 | 9.07 | 9.96 | |||||||||||||||||||||
Return on average tangible common equity1, 3 | 12.68 | 15.84 | 20.06 | 17.72 | 15.18 | 14.17 | 16.15 | |||||||||||||||||||||
Efficiency ratio | 50.76 | 52.84 | 48.53 | 47.55 | 52.42 | 51.76 | 51.01 | |||||||||||||||||||||
Net interest margin | 3.42 | 3.22 | 3.37 | 3.26 | 3.11 | 3.32 | 3.16 | |||||||||||||||||||||
Selected Performance Metrics - Operating: | ||||||||||||||||||||||||||||
Diluted operating EPS1 | $ | 0.55 | $ | 0.66 | $ | 0.84 | $ | 0.70 | $ | 0.60 | $ | 1.20 | $ | 1.24 | ||||||||||||||
Pre-tax, pre-provision operating return on average assets1, 2 | 1.76 | % | 1.71 | % | 1.97 | % | 1.85 | % | 1.66 | % | 1.74 | % | 1.74 | % | ||||||||||||||
Operating return on average assets1, 3 | 1.12 | 1.38 | 1.72 | 1.48 | 1.29 | 1.24 | 1.37 | |||||||||||||||||||||
Operating return on average tangible common equity1, 3 | 12.77 | 16.08 | 20.48 | 16.92 | 15.42 | 14.34 | 16.38 | |||||||||||||||||||||
Operating efficiency ratio1 | 50.45 | 52.05 | 47.64 | 48.51 | 51.63 | 51.22 | 50.62 | |||||||||||||||||||||
Average stockholders' equity to average total assets | 13.51 | % | 13.58 | % | 13.30 | % | 13.75 | % | 13.46 | % | 13.54 | % | 13.57 | % | ||||||||||||||
Tangible common equity to tangible assets1 | 9.04 | 9.98 | 9.28 | 9.43 | 9.51 | 9.04 | 9.51 | |||||||||||||||||||||
Tier 1 capital to average assets (leverage) | 10.14 | 10.66 | 9.05 | 9.54 | 9.38 | 10.14 | 9.38 | |||||||||||||||||||||
Common equity tier 1 capital | 9.25 | 9.84 | 8.58 | 8.75 | 9.03 | 9.25 | 9.03 | |||||||||||||||||||||
Tier 1 capital to risk-weighted assets | 9.52 | 10.14 | 8.89 | 9.06 | 9.36 | 9.52 | 9.36 | |||||||||||||||||||||
Total capital to risk-weighted assets | 11.95 | 12.73 | 11.60 | 12.31 | 12.86 | 11.95 | 12.86 |
1Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” after the financial highlights for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.
2Dividend amount represents dividend paid per common share subsequent to each respective quarter end.
3Annualized ratio for quarterly metrics.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands)
2022 |
2022 |
2021 |
2021 |
2021 |
||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | 410,716 | $ | 551,573 | $ | 379,784 | $ | 229,712 | $ | 390,027 | ||||||||||
1,354,403 | 1,244,514 | 1,052,494 | 1,103,745 | 1,125,877 | ||||||||||||||||
Other investments | 202,685 | 188,699 | 190,591 | 191,786 | 87,558 | |||||||||||||||
Loans held for sale | 14,210 | 18,721 | 26,007 | 18,896 | 12,065 | |||||||||||||||
LHI, PPP loans, carried at fair value | 7,339 | 18,512 | 53,369 | 135,842 | 291,401 | |||||||||||||||
LHI, MW | 629,291 | 542,877 | 565,645 | 615,045 | 559,939 | |||||||||||||||
LHI, excluding MW and PPP | 7,915,792 | 7,125,429 | 6,766,009 | 6,615,905 | 6,272,087 | |||||||||||||||
Total loans | 8,566,632 | 7,705,539 | 7,411,030 | 7,385,688 | 7,135,492 | |||||||||||||||
ACL | (80,576 | ) | (72,485 | ) | (77,754 | ) | (93,771 | ) | (99,543 | ) | ||||||||||
Bank-owned life insurance | 84,097 | 83,641 | 83,194 | 83,781 | 83,304 | |||||||||||||||
Bank premises, furniture and equipment, net | 108,769 | 109,138 | 109,271 | 116,063 | 123,504 | |||||||||||||||
Other real estate owned (“OREO”) | 1,032 | 1,062 | — | — | 2,467 | |||||||||||||||
Intangible assets, net of accumulated amortization | 59,011 | 63,986 | 66,017 | 54,682 | 57,143 | |||||||||||||||
404,452 | 404,452 | 403,771 | 370,840 | 370,840 | ||||||||||||||||
Other assets | 193,590 | 173,561 | 138,851 | 129,774 | 72,856 | |||||||||||||||
Total assets | $ | 11,304,811 | $ | 10,453,680 | $ | 9,757,249 | $ | 9,572,300 | $ | 9,349,525 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing deposits | $ | 2,947,830 | $ | 2,765,895 | $ | 2,510,723 | $ | 2,302,925 | $ | 2,388,068 | ||||||||||
Interest-bearing transaction and savings deposits | 4,007,250 | 3,688,292 | 3,276,312 | 3,228,306 | 3,112,974 | |||||||||||||||
Certificates and other time deposits | 1,562,626 | 1,435,409 | 1,576,580 | 1,647,521 | 1,477,860 | |||||||||||||||
Total deposits | 8,517,706 | 7,889,596 | 7,363,615 | 7,178,752 | 6,978,902 | |||||||||||||||
Accounts payable and other liabilities | 126,116 | 105,552 | 69,160 | 66,571 | 55,499 | |||||||||||||||
Advances from |
1,000,000 | 777,522 | 777,562 | 777,601 | 777,640 | |||||||||||||||
Subordinated debentures and subordinated notes | 228,272 | 228,018 | 227,764 | 262,761 | 262,766 | |||||||||||||||
Securities sold under agreements to repurchase | 3,275 | 4,996 | 4,069 | 2,455 | 1,811 | |||||||||||||||
Total liabilities | 9,875,369 | 9,005,684 | 8,442,170 | 8,288,140 | 8,076,618 | |||||||||||||||
Commitments and contingencies | ||||||||||||||||||||
Stockholders’ equity: | ||||||||||||||||||||
Common stock | 606 | 605 | 560 | 559 | 558 | |||||||||||||||
Additional paid-in capital | 1,300,170 | 1,297,161 | 1,142,758 | 1,137,889 | 1,134,603 | |||||||||||||||
Retained earnings | 317,664 | 298,830 | 275,273 | 243,633 | 216,704 | |||||||||||||||
Accumulated other comprehensive (loss) income | (21,416 | ) | 18,982 | 64,070 | 69,661 | 77,189 | ||||||||||||||
(167,582 | ) | (167,582 | ) | (167,582 | ) | (167,582 | ) | (156,147 | ) | |||||||||||
Total stockholders’ equity | 1,429,442 | 1,447,996 | 1,315,079 | 1,284,160 | 1,272,907 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 11,304,811 | $ | 10,453,680 | $ | 9,757,249 | $ | 9,572,300 | $ | 9,349,525 |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands, except per share data)
For the Quarter Ended | For the Six Months Ended | |||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||
Loans, including fees | $ | 82,191 | $ | 71,443 | $ | 74,174 | $ | 71,139 | $ | 67,814 | $ | 153,634 | $ | 135,213 | ||||||||||
Debt securities | 9,632 | 7,762 | 9,553 | 7,613 | 7,529 | 17,394 | 14,966 | |||||||||||||||||
Deposits in financial institutions and Fed Funds sold | 714 | 262 | 165 | 130 | 167 | 976 | 294 | |||||||||||||||||
Equity securities and other investments | 1,057 | 910 | 1,004 | 898 | 672 | 1,967 | 1,335 | |||||||||||||||||
Total interest income | 93,594 | 80,377 | 84,896 | 79,780 | 76,182 | 173,971 | 151,808 | |||||||||||||||||
Interest expense: | ||||||||||||||||||||||||
Transaction and savings deposits | 4,094 | 1,751 | 1,629 | 1,588 | 1,661 | 5,845 | 3,641 | |||||||||||||||||
Certificates and other time deposits | 1,465 | 1,380 | 1,661 | 1,934 | 2,423 | 2,845 | 5,484 | |||||||||||||||||
Advances from FHLB | 834 | 1,547 | 1,847 | 1,848 | 1,829 | 2,381 | 3,641 | |||||||||||||||||
Subordinated debentures and subordinated notes | 2,721 | 2,659 | 3,018 | 3,134 | 3,138 | 5,380 | 6,276 | |||||||||||||||||
Total interest expense | 9,114 | 7,337 | 8,155 | 8,504 | 9,051 | 16,451 | 19,042 | |||||||||||||||||
Net interest income | 84,480 | 73,040 | 76,741 | 71,276 | 67,131 | 157,520 | 132,766 | |||||||||||||||||
Provision (benefit) for credit losses | 9,000 | (500 | ) | (3,349 | ) | — | — | 8,500 | — | |||||||||||||||
Provision (benefit) for unfunded commitments | — | 493 | (1,040 | ) | (448 | ) | 577 | 493 | 7 | |||||||||||||||
Net interest income after provisions | 75,480 | 73,047 | 81,130 | 71,724 | 66,554 | 148,527 | 132,759 | |||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||
Service charges and fees on deposit accounts | 5,039 | 4,710 | 4,782 | 4,484 | 3,847 | 9,749 | 7,476 | |||||||||||||||||
Loan fees | 2,385 | 2,794 | 2,697 | 1,746 | 1,823 | 5,179 | 3,164 | |||||||||||||||||
Loss on sales of investment securities | — | — | — | (188 | ) | — | — | — | ||||||||||||||||
Gain on sales of mortgage loans held for sale | 223 | 307 | 293 | 407 | 385 | 530 | 892 | |||||||||||||||||
Government guaranteed loan income, net | 789 | 4,891 | 3,423 | 2,341 | 3,448 | 5,680 | 9,996 | |||||||||||||||||
Equity method investment income | 966 | 367 | 1,238 | 4,522 | — | 1,333 | — | |||||||||||||||||
Other | 976 | 2,028 | 3,717 | 2,315 | 2,953 | 3,004 | 5,100 | |||||||||||||||||
Total noninterest income | 10,378 | 15,097 | 16,150 | 15,627 | 12,456 | 25,475 | 26,628 | |||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||
Salaries and employee benefits | 26,924 | 27,513 | 25,401 | 22,964 | 23,451 | 54,437 | 46,383 | |||||||||||||||||
Occupancy and equipment | 4,496 | 4,517 | 4,398 | 4,536 | 4,233 | 9,013 | 8,329 | |||||||||||||||||
Professional and regulatory fees | 2,865 | 3,158 | 3,017 | 3,401 | 3,086 | 6,023 | 6,527 | |||||||||||||||||
Data processing and software expense | 3,386 | 2,921 | 2,597 | 2,494 | 2,536 | 6,307 | 4,855 | |||||||||||||||||
Marketing | 2,306 | 1,187 | 1,443 | 1,151 | 1,841 | 3,493 | 2,750 | |||||||||||||||||
Amortization of intangibles | 2,495 | 2,495 | 2,494 | 2,509 | 2,517 | 4,990 | 5,054 | |||||||||||||||||
Telephone and communications | 352 | 385 | 380 | 380 | 337 | 737 | 674 | |||||||||||||||||
Merger and acquisition (“M&A”) expense | 295 | 700 | 826 | — | — | 995 | — | |||||||||||||||||
Other | 5,034 | 3,696 | 4,521 | 3,886 | 3,716 | 8,730 | 6,742 | |||||||||||||||||
Total noninterest expense | 48,153 | 46,572 | 45,077 | 41,321 | 41,717 | 94,725 | 81,314 | |||||||||||||||||
Income before income tax expense | 37,705 | 41,572 | 52,203 | 46,030 | 37,293 | 79,277 | 78,073 | |||||||||||||||||
Income tax expense | 8,079 | 8,102 | 10,697 | 9,195 | 7,837 | 16,181 | 16,830 | |||||||||||||||||
Net income | $ | 29,626 | $ | 33,470 | $ | 41,506 | $ | 36,835 | $ | 29,456 | $ | 63,096 | $ | 61,243 | ||||||||||
Net income available to common stockholders | $ | 29,626 | $ | 33,470 | $ | 41,506 | $ | 36,835 | $ | 29,456 | $ | 63,096 | $ | 61,243 | ||||||||||
Basic EPS | $ | 0.55 | $ | 0.66 | $ | 0.84 | $ | 0.75 | $ | 0.60 | $ | 1.21 | $ | 1.24 | ||||||||||
Diluted EPS | $ | 0.54 | $ | 0.65 | $ | 0.82 | $ | 0.73 | $ | 0.59 | $ | 1.19 | $ | 1.22 | ||||||||||
Weighted average basic shares outstanding | 53,949 | 50,695 | 49,329 | 49,423 | 49,476 | 52,331 | 49,435 | |||||||||||||||||
Weighted average diluted shares outstanding | 54,646 | 51,571 | 50,441 | 50,306 | 50,331 | 53,121 | 50,187 |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
For the Quarter Ended | ||||||||||||||||||||||||||||||
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
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(In thousands, expect percentages) | ||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||
Loans1 | $ | 7,547,564 | $ | 78,234 | 4.16 | % | $ | 6,872,943 | $ | 68,297 | 4.03 | % | $ | 6,108,527 | $ | 63,427 | 4.16 | % | ||||||||||||
LHI, MW | 479,187 | 3,929 | 3.29 | 421,680 | 3,069 | 2.95 | 455,334 | 3,476 | 3.06 | |||||||||||||||||||||
PPP loans | 11,402 | 28 | 1.00 | 31,335 | 77 | 1.00 | 364,020 | 911 | 1.00 | |||||||||||||||||||||
Debt securities | 1,318,502 | 9,632 | 2.93 | 1,140,834 | 7,762 | 2.76 | 1,095,678 | 7,529 | 2.76 | |||||||||||||||||||||
Interest-bearing deposits in other banks | 369,847 | 714 | 0.77 | 554,864 | 262 | 0.19 | 548,087 | 167 | 0.12 | |||||||||||||||||||||
Equity securities and other investments | 167,327 | 1,057 | 2.53 | 190,002 | 910 | 1.94 | 87,413 | 672 | 3.08 | |||||||||||||||||||||
Total interest-earning assets | 9,893,829 | 93,594 | 3.79 | 9,211,658 | 80,377 | 3.54 | 8,659,059 | 76,182 | 3.53 | |||||||||||||||||||||
ACL | (74,268 | ) | (77,843 | ) | (105,050 | ) | ||||||||||||||||||||||||
Noninterest-earning assets | 892,102 | 865,107 | 767,270 | |||||||||||||||||||||||||||
Total assets | $ | 10,711,663 | $ | 9,998,922 | $ | 9,321,279 | ||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||
Interest-bearing demand and savings deposits | $ | 3,770,098 | $ | 4,094 | 0.44 | % | $ | 3,471,645 | $ | 1,751 | 0.20 | % | $ | 3,191,405 | $ | 1,661 | 0.21 | % | ||||||||||||
Certificates and other time deposits | 1,459,690 | 1,465 | 0.40 | 1,501,852 | 1,380 | 0.37 | 1,515,092 | 2,423 | 0.64 | |||||||||||||||||||||
Advances from FHLB | 828,769 | 834 | 0.40 | 777,538 | 1,547 | 0.81 | 777,655 | 1,829 | 0.94 | |||||||||||||||||||||
Subordinated debentures and subordinated notes | 232,043 | 2,721 | 4.70 | 231,875 | 2,659 | 4.65 | 264,931 | 3,138 | 4.75 | |||||||||||||||||||||
Total interest-bearing liabilities | 6,290,600 | 9,114 | 0.58 | 5,982,910 | 7,337 | 0.50 | 5,749,083 | 9,051 | 0.63 | |||||||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 2,870,692 | 2,591,504 | 2,266,470 | |||||||||||||||||||||||||||
Other liabilities | 102,994 | 67,060 | 51,355 | |||||||||||||||||||||||||||
Total liabilities | 9,264,286 | 8,641,474 | 8,066,908 | |||||||||||||||||||||||||||
Stockholders’ equity | 1,447,377 | 1,357,448 | 1,254,371 | |||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 10,711,663 | $ | 9,998,922 | $ | 9,321,279 | ||||||||||||||||||||||||
Net interest rate spread2 | 3.21 | % | 3.04 | % | 2.90 | % | ||||||||||||||||||||||||
Net interest income and margin3 | 84,480 | 3.42 | % | 73,040 | 3.22 | % | 67,131 | 3.11 | % |
1 Includes average outstanding balances of loans held for sale of
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(In thousands except percentages)
Six Months Ended | ||||||||||||||||||||
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
|||||||||||||||
Assets | ||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Loans1 | $ | 7,205,954 | $ | 146,500 | 4.10 | % | $ | 6,003,754 | $ | 126,128 | 4.24 | % | ||||||||
LHI, WH | 450,592 | 6,998 | 3.13 | 482,853 | 7,292 | 3.05 | ||||||||||||||
PPP loans | 27,477 | 136 | 1.00 | 360,209 | 1,793 | 1.00 | ||||||||||||||
Debt securities | 1,230,159 | 17,394 | 2.85 | 1,079,697 | 14,966 | 2.80 | ||||||||||||||
Interest-bearing deposits in other banks | 461,844 | 976 | 0.43 | 445,356 | 294 | 0.13 | ||||||||||||||
Equity securities and other investments | 178,602 | 1,967 | 2.22 | 87,296 | 1,335 | 3.08 | ||||||||||||||
Total interest-earning assets | 9,554,628 | 173,971 | 3.67 | 8,459,165 | 151,808 | 3.62 | ||||||||||||||
ACL | (76,046 | ) | (105,509 | ) | ||||||||||||||||
Noninterest-earning assets | 878,679 | 778,691 | ||||||||||||||||||
Total assets | $ | 10,357,261 | $ | 9,132,347 | ||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest-bearing demand and savings deposits | $ | 3,621,697 | $ | 5,845 | 0.33 | % | $ | 3,115,417 | $ | 3,641 | 0.24 | % | ||||||||
Certificates and other time deposits | 1,480,654 | 2,845 | 0.39 | 1,512,479 | 5,484 | 0.73 | ||||||||||||||
Advances from FHLB | 803,295 | 2,381 | 0.60 | 777,675 | 3,641 | 0.94 | ||||||||||||||
Subordinated debentures and subordinated notes | 231,959 | 5,380 | 4.68 | 265,142 | 6,276 | 4.77 | ||||||||||||||
Total interest-bearing liabilities | 6,137,605 | 16,451 | 0.54 | 5,670,713 | 19,042 | 0.68 | ||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||
Noninterest-bearing deposits | 2,731,869 | 2,168,396 | ||||||||||||||||||
Other liabilities | 85,126 | 53,823 | ||||||||||||||||||
Total liabilities | 8,954,600 | 7,892,932 | ||||||||||||||||||
Stockholders’ equity | 1,402,661 | 1,239,415 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 10,357,261 | $ | 9,132,347 | ||||||||||||||||
Net interest rate spread2 | 3.13 | % | 2.94 | % | ||||||||||||||||
Net interest income and margin3 | $ | 157,520 | 3.32 | % | $ | 132,766 | 3.16 | % |
1 Includes average outstanding balances of loans held for sale of
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
Yield Trend
For the Quarter Ended | |||||||||||||||
2022 |
2022 |
2021 |
2021 |
2021 |
|||||||||||
Average yield on interest-earning assets: | |||||||||||||||
Loans1 | 4.16 | % | 4.03 | % | 4.12 | % | 4.16 | % | 4.16 | % | |||||
LHI, MW | 3.29 | 2.95 | 2.98 | 3.15 | 3.06 | ||||||||||
PPP loans | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | ||||||||||
Debt securities | 2.93 | 2.76 | 3.47 | 2.70 | 2.76 | ||||||||||
Interest-bearing deposits in other banks | 0.77 | 0.19 | 0.16 | 0.15 | 0.12 | ||||||||||
Equity securities and other investments | 2.53 | 1.94 | 2.09 | 2.13 | 3.08 | ||||||||||
Total interest-earning assets | 3.79 | % | 3.54 | % | 3.72 | % | 3.64 | % | 3.53 | % | |||||
Average rate on interest-bearing liabilities: | |||||||||||||||
Interest-bearing demand and savings deposits | 0.44 | % | 0.20 | % | 0.19 | % | 0.20 | % | 0.21 | % | |||||
Certificates and other time deposits | 0.40 | 0.37 | 0.41 | 0.50 | 0.64 | ||||||||||
Advances from FHLB | 0.40 | 0.81 | 0.94 | 0.94 | 0.94 | ||||||||||
Subordinated debentures and subordinated notes | 4.70 | 4.65 | 4.62 | 4.70 | 4.75 | ||||||||||
Total interest-bearing liabilities | 0.58 | % | 0.50 | % | 0.54 | % | 0.59 | % | 0.63 | % | |||||
Net interest rate spread2 | 3.21 | % | 3.04 | % | 3.18 | % | 3.05 | % | 2.90 | % | |||||
Net interest margin3 | 3.42 | % | 3.22 | % | 3.37 | % | 3.26 | % | 3.11 | % |
1Includes average outstanding balances of loans held for sale of
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.
Supplemental Yield Trend
For the Quarter Ended | |||||||||||||||
2022 |
2022 |
2021 |
2021 |
2021 |
|||||||||||
Average cost of interest-bearing deposits | 0.43 | % | 0.26 | % | 0.26 | % | 0.30 | % | 0.35 | % | |||||
Average costs of total deposits, including noninterest-bearing | 0.28 | 0.17 | 0.18 | 0.20 | 0.23 |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
LHI and Deposit Portfolio Composition
2022 |
2022 |
2021 |
2021 |
2021 |
|||||||||||||||||||||||||||||||
(In thousands, expect percentages) | |||||||||||||||||||||||||||||||||||
LHI1 | |||||||||||||||||||||||||||||||||||
Commercial | $ | 2,450,403 | 30.9 | % | $ | 2,125,900 | 29.8 | % | $ | 2,006,876 | 29.6 | % | $ | 1,793,740 | 27.1 | % | $ | 1,771,100 | 28.2 | % | |||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||||||||
Owner occupied commercial (“OOCRE”) | 646,723 | 8.2 | 633,615 | 8.9 | 665,537 | 9.8 | 711,476 | 10.7 | 744,899 | 11.9 | |||||||||||||||||||||||||
Non-owner occupied commercial (“NOOCRE”) | 2,203,970 | 27.8 | 2,145,826 | 30.0 | 2,120,309 | 31.3 | 2,194,438 | 33.1 | 1,986,538 | 31.6 | |||||||||||||||||||||||||
Construction and land | 1,532,997 | 19.3 | 1,297,338 | 18.2 | 1,062,144 | 15.7 | 936,174 | 14.1 | 871,765 | 13.9 | |||||||||||||||||||||||||
Farmland | 47,319 | 0.6 | 48,095 | 0.7 | 55,827 | 0.8 | 73,550 | 1.1 | 13,661 | 0.2 | |||||||||||||||||||||||||
1-4 family residential | 765,260 | 9.6 | 604,408 | 8.5 | 542,566 | 8.0 | 543,518 | 8.2 | 513,635 | 8.2 | |||||||||||||||||||||||||
Multi-family residential | 276,632 | 3.5 | 272,250 | 3.8 | 310,241 | 4.6 | 356,885 | 5.4 | 367,445 | 5.9 | |||||||||||||||||||||||||
Consumer | 7,520 | 0.1 | 9,533 | 0.1 | 11,998 | 0.2 | 14,266 | 0.3 | 10,530 | 0.1 | |||||||||||||||||||||||||
Total LHI | $ | 7,930,824 | 100 | % | $ | 7,136,965 | 100 | % | $ | 6,775,498 | 100 | % | $ | 6,624,047 | 100 | % | $ | 6,279,573 | 100 | % | |||||||||||||||
MW | 629,291 | 542,877 | 565,645 | 615,045 | 559,939 | ||||||||||||||||||||||||||||||
PPP loans | 7,339 | 18,512 | 53,369 | 135,842 | 291,401 | ||||||||||||||||||||||||||||||
Total LHI1 | $ | 8,567,454 | $ | 7,698,354 | $ | 7,394,512 | $ | 7,374,934 | $ | 7,130,913 | |||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||||||||||||
Noninterest-bearing | $ | 2,947,830 | 34.6 | % | $ | 2,765,895 | 35.1 | % | $ | 2,510,723 | 34.1 | % | $ | 2,302,925 | 32.1 | % | $ | 2,388,068 | 34.1 | % | |||||||||||||||
Interest-bearing transaction | 660,557 | 7.8 | 599,580 | 7.6 | 579,408 | 7.9 | 514,537 | 7.2 | 451,307 | 6.5 | |||||||||||||||||||||||||
Money market | 3,217,195 | 37.8 | 2,958,790 | 37.5 | 2,568,843 | 34.9 | 2,585,926 | 36.0 | 2,539,061 | 36.4 | |||||||||||||||||||||||||
Savings | 129,498 | 1.5 | 129,922 | 1.6 | 128,061 | 1.7 | 127,843 | 1.8 | 122,606 | 1.8 | |||||||||||||||||||||||||
Certificates and other time deposits | 1,562,626 | 18.3 | 1,435,409 | 18.2 | 1,576,580 | 21.4 | 1,647,521 | 22.9 | 1,477,860 | 21.2 | |||||||||||||||||||||||||
Total deposits | $ | 8,517,706 | 100 | % | $ | 7,889,596 | 100 | % | $ | 7,363,615 | 100 | % | $ | 7,178,752 | 100 | % | $ | 6,978,902 | 100 | % | |||||||||||||||
Loan to Deposit Ratio | 100.6 | % | 97.6 | % | 100.4 | % | 102.7 | % | 102.2 | % | |||||||||||||||||||||||||
Loan to Deposit Ratio, excluding MW and PPP loans | 93.1 | % | 90.5 | % | 92.0 | % | 92.3 | % | 90.0 | % |
1 Total LHI does not include deferred fees of
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Asset Quality
For the Quarter Ended | For the Six Months Ended | ||||||||||||||||||||||||||
2022 |
2022 |
2021 |
2021 |
2021 |
2022 |
2021 |
|||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
NPAs: | |||||||||||||||||||||||||||
Nonaccrual loans | $ | 42,242 | $ | 46,680 | $ | 49,687 | $ | 72,317 | $ | 76,994 | $ | 42,242 | $ | 76,994 | |||||||||||||
Accruing loans 90 or more days past due1 | 1,753 | 264 | 441 | 1,711 | 462 | 1,753 | 462 | ||||||||||||||||||||
Total nonperforming loans held for investment (“NPLs”) | 43,995 | 46,944 | 50,128 | 74,028 | 77,456 | 43,995 | 77,456 | ||||||||||||||||||||
OREO | 1,032 | 1,062 | — | — | 2,467 | 1,032 | 2,467 | ||||||||||||||||||||
Total NPAs | $ | 45,027 | $ | 48,006 | $ | 50,128 | $ | 74,028 | $ | 79,923 | $ | 45,027 | $ | 79,923 | |||||||||||||
Charge-offs: | |||||||||||||||||||||||||||
1-4 family residential | $ | — | $ | — | $ | — | $ | (64 | ) | $ | (300 | ) | $ | — | $ | (315 | ) | ||||||||||
OOCRE | (244 | ) | (1,341 | ) | (898 | ) | (813 | ) | (689 | ) | (1,585 | ) | (689 | ) | |||||||||||||
NOOCRE | — | (553 | ) | (7,936 | ) | — | — | (553 | ) | — | |||||||||||||||||
Commercial | (528 | ) | (3,294 | ) | (4,114 | ) | (5,508 | ) | (5,608 | ) | (3,822 | ) | (5,954 | ) | |||||||||||||
Consumer | (1,091 | ) | (134 | ) | (44 | ) | (17 | ) | (20 | ) | (1,225 | ) | (38 | ) | |||||||||||||
Total charge-offs | (1,863 | ) | (5,322 | ) | (12,992 | ) | (6,402 | ) | (6,617 | ) | (7,185 | ) | (6,996 | ) | |||||||||||||
Recoveries: | |||||||||||||||||||||||||||
1-4 family residential | 3 | — | 6 | 26 | 29 | 3 | 32 | ||||||||||||||||||||
OOCRE | 245 | — | — | — | 500 | 245 | 500 | ||||||||||||||||||||
NOOCRE | 93 | 400 | — | — | — | 493 | — | ||||||||||||||||||||
Commercial | 572 | 144 | 61 | 596 | 659 | 716 | 885 | ||||||||||||||||||||
Consumer | 41 | 9 | 257 | 8 | 36 | 50 | 38 | ||||||||||||||||||||
Total recoveries | 954 | 553 | 324 | 630 | 1,224 | 1,507 | 1,455 | ||||||||||||||||||||
Net charge-offs | $ | (909 | ) | $ | (4,769 | ) | $ | (12,668 | ) | $ | (5,772 | ) | $ | (5,393 | ) | $ | (5,678 | ) | $ | (5,541 | ) | ||||||
ACL | $ | 80,576 | $ | 72,485 | $ | 77,754 | $ | 93,771 | $ | 99,543 | $ | 80,576 | $ | 99,543 | |||||||||||||
Asset Quality Ratios: | |||||||||||||||||||||||||||
NPAs to total assets | 0.40 | % | 0.46 | % | 0.51 | % | 0.77 | % | 0.85 | % | 0.40 | % | 0.85 | % | |||||||||||||
NPLs to total LHI, excluding MW and PPP loans | 0.55 | 0.66 | 0.74 | 1.12 | 1.23 | 0.55 | 1.23 | ||||||||||||||||||||
ACL to total LHI, excluding MW and PPP loans | 1.02 | 1.02 | 1.15 | 1.42 | 1.59 | 1.02 | 1.59 | ||||||||||||||||||||
Net charge-offs to average loans outstanding | 0.01 | 0.07 | 0.19 | 0.09 | 0.09 | 0.08 | 0.09 |
1 Accruing loans greater than 90 days past due exclude purchase credit deteriorated loans greater than 90 days past due that are accounted for on a pooled basis.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
We identify certain financial measures discussed in this earnings release as being “non-GAAP financial measures.” In accordance with
The non-GAAP financial measures that we present in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we present in this earnings release may differ from that of other companies reporting measures with similar names. You should understand how such other financial institutions calculate their financial measures that appear to be similar or have similar names to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures.
Tangible Book Value Per Common Share. Tangible book value is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by number of common shares outstanding. For tangible book value per common share, the most directly comparable financial measure calculated in accordance with GAAP is book value per common share.
We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in core deposit intangibles.
The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:
As of | ||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Tangible Common Equity | ||||||||||||||||||||
Total stockholders' equity | $ | 1,429,442 | $ | 1,447,996 | $ | 1,315,079 | $ | 1,284,160 | $ | 1,272,907 | ||||||||||
Adjustments: | ||||||||||||||||||||
(404,452 | ) | (404,452 | ) | (403,771 | ) | (370,840 | ) | (370,840 | ) | |||||||||||
Core deposit intangibles | (43,122 | ) | (45,560 | ) | (47,998 | ) | (50,436 | ) | (52,873 | ) | ||||||||||
Tangible common equity | $ | 981,868 | $ | 997,984 | $ | 863,310 | $ | 862,884 | $ | 849,194 | ||||||||||
Common shares outstanding | 53,951 | 53,907 | 49,372 | 49,229 | 49,498 | |||||||||||||||
Book value per common share | $ | 26.50 | $ | 26.86 | $ | 26.64 | $ | 26.09 | $ | 25.72 | ||||||||||
Tangible book value per common share | $ | 18.20 | $ | 18.51 | $ | 17.49 | $ | 17.53 | $ | 17.16 |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity, less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For tangible common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total stockholders’ equity to total assets.
We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, in each case, exclusive of changes in core deposit intangibles.
The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:
As of | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Tangible Common Equity | ||||||||||||||||||||
Total stockholders' equity | $ | 1,429,442 | $ | 1,447,996 | $ | 1,315,079 | $ | 1,284,160 | $ | 1,272,907 | ||||||||||
Adjustments: | ||||||||||||||||||||
(404,452 | ) | (404,452 | ) | (403,771 | ) | (370,840 | ) | (370,840 | ) | |||||||||||
Core deposit intangibles | (43,122 | ) | (45,560 | ) | (47,998 | ) | (50,436 | ) | (52,873 | ) | ||||||||||
Tangible common equity | $ | 981,868 | $ | 997,984 | $ | 863,310 | $ | 862,884 | $ | 849,194 | ||||||||||
Tangible Assets | ||||||||||||||||||||
Total assets | $ | 11,304,811 | $ | 10,453,680 | $ | 9,757,249 | $ | 9,572,300 | $ | 9,349,525 | ||||||||||
Adjustments: | ||||||||||||||||||||
(404,452 | ) | (404,452 | ) | (403,771 | ) | (370,840 | ) | (370,840 | ) | |||||||||||
Core deposit intangibles | (43,122 | ) | (45,560 | ) | (47,998 | ) | (50,436 | ) | (52,873 | ) | ||||||||||
Tangible Assets | $ | 10,857,237 | $ | 10,003,668 | $ | 9,305,480 | $ | 9,151,024 | $ | 8,925,812 | ||||||||||
Tangible Common Equity to Tangible Assets | 9.04 | % | 9.98 | % | 9.28 | % | 9.43 | % | 9.51 | % |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Return on Average Tangible Common Equity. Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) net income available for common stockholders adjusted for amortization of core deposit intangibles (which we refer to as “return”) as net income, plus amortization of core deposit intangibles, less tax benefit at the statutory rate; (b) average tangible common equity as total average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.
We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of core deposit intangibles.
The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income available for common stockholders adjusted for amortization of core deposit intangibles, net of taxes to net income and presents our return on average tangible common equity:
For the Quarter Ended | For the Six Months Ended | |||||||||||||||||||||||||||
2022 |
2022 |
2021 |
2021 |
2021 |
2022 |
2021 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Net income available for common stockholders adjusted for amortization of core deposit intangibles | ||||||||||||||||||||||||||||
Net income | $ | 29,626 | $ | 33,470 | $ | 41,506 | $ | 36,835 | $ | 29,456 | $ | 63,096 | $ | 61,243 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Plus: Amortization of core deposit intangibles | 2,438 | 2,438 | 2,438 | 2,438 | 2,438 | 4,876 | 4,885 | |||||||||||||||||||||
Less: Tax benefit at the statutory rate | 512 | 512 | 512 | 512 | 512 | 1,024 | 1,026 | |||||||||||||||||||||
Net income available for common stockholders adjusted for amortization of core deposit intangibles |
$ | 31,552 | $ | 35,396 | $ | 43,432 | $ | 38,761 | $ | 31,382 | $ | 66,948 | $ | 65,102 | ||||||||||||||
Average Tangible Common Equity | ||||||||||||||||||||||||||||
Total average stockholders' equity | $ | 1,447,377 | $ | 1,357,448 | $ | 1,301,676 | $ | 1,290,528 | $ | 1,254,371 | $ | 1,402,661 | $ | 1,239,415 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Average goodwill | (404,452 | ) | (404,014 | ) | (393,220 | ) | (370,840 | ) | (370,840 | ) | (404,234 | ) | (370,840 | ) | ||||||||||||||
Average core deposit intangibles | (44,720 | ) | (47,158 | ) | (49,596 | ) | (52,043 | ) | (54,471 | ) | (45,932 | ) | (55,685 | ) | ||||||||||||||
Average tangible common equity | $ | 998,205 | $ | 906,276 | $ | 858,860 | $ | 867,645 | $ | 829,060 | $ | 952,495 | $ | 812,890 | ||||||||||||||
Return on Average Tangible Common Equity (Annualized) | 12.68 | % | 15.84 | % | 20.06 | % | 17.72 | % | 15.18 | % | 14.17 | % | 16.15 | % |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Assets, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings, pre-tax, pre-provision operating earnings and the performance metrics calculated using these metrics, listed below, are non-GAAP measures used by management to evaluate the Company’s financial performance. We calculate (a) operating earnings as net income plus severance payments, plus loss on sale of debt securities AFS, net, less Thrive PPP loan forgiveness income, plus M&A expenses, less tax impact of adjustments, plus nonrecurring tax adjustments. We calculate (b) diluted operating earnings per share as operating earnings as described in clause (a) divided by weighted average diluted shares outstanding. We calculate (c) pre-tax, pre-provision operating earnings as operating earnings as described in clause (a) plus provision for income taxes, plus provision (benefit) for credit losses and unfunded commitments. We calculate (d) pre-tax, pre-provision operating return on average assets as pre-tax, pre-provision operating earnings as described in clause (a) divided by total average assets. We calculate (e) operating return on average assets as operating earnings as described in clause (a) divided by total average assets. We calculate (f) operating return on average tangible common equity as operating earnings as described in clause (a), adjusted for the amortization of intangibles and tax benefit at the statutory rate, divided by total average tangible common equity (average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization). We calculate (g) operating efficiency ratio as non interest expense plus adjustments to operating non interest expense divided by non interest income plus adjustments to operating non interest income, plus net interest income.
We believe that these measures and the operating metrics calculated utilizing these measures are important to management and many investors in the marketplace who are interested in understanding the ongoing operating performance of the Company and provide meaningful comparisons to its peers.
The following tables reconcile, as of the dates set forth below, operating net income and pre-tax, pre-provision operating earnings and related metrics:
For the Quarter Ended | For the Six Months Ended | |||||||||||||||||||||
2022 |
2022 |
2021 |
2021 |
2021 |
2022 |
2021 |
||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Operating Earnings | ||||||||||||||||||||||
Net income | $ | 29,626 | $ | 33,470 | $ | 41,506 | $ | 36,835 | $ | 29,456 | $ | 63,096 | $ | 61,243 | ||||||||
Plus: Severance payments1 | — | — | — | — | 627 | — | 627 | |||||||||||||||
Plus: Loss on sale of debt securities AFS, net | — | — | — | 188 | — | — | — | |||||||||||||||
Less: Thrive PPP loan forgiveness income2 | — | — | — | 1,912 | — | — | — | |||||||||||||||
Plus: M&A expenses | 295 | 700 | 826 | — | — | 995 | — | |||||||||||||||
Operating pre-tax income | 29,921 | 34,170 | 42,332 | 35,111 | 30,083 | 64,091 | 61,870 | |||||||||||||||
Less: Tax impact of adjustments | 66 | 156 | (78 | ) | 39 | 131 | 222 | 131 | ||||||||||||||
Plus: Nonrecurring tax adjustments3 | — | — | — | — | — | — | 426 | |||||||||||||||
Operating earnings | $ | 29,855 | $ | 34,014 | $ | 42,410 | $ | 35,072 | $ | 29,952 | $ | 63,869 | $ | 62,165 | ||||||||
Weighted average diluted shares outstanding | 54,646 | 51,571 | 50,441 | 50,306 | 50,331 | 53,121 | 50,187 | |||||||||||||||
Diluted EPS | $ | 0.54 | $ | 0.65 | $ | 0.82 | $ | 0.73 | $ | 0.59 | $ | 1.19 | $ | 1.22 | ||||||||
Diluted operating EPS | $ | 0.55 | $ | 0.66 | $ | 0.84 | $ | 0.70 | $ | 0.60 | 1.20 | 1.24 |
1 Severance payments relate to branch restructurings made during the three months ended
2 During the third quarter of 2021, Thrive’s PPP loan with another bank was 100% forgiven by the
3 A nonrecurring tax adjustment of
For the Quarter Ended | For the Six Months Ended | |||||||||||||||||||||||||||
2022 |
2022 |
2021 |
2021 |
2021 |
2022 |
2021 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Pre-Tax, Pre-Provision Operating Earnings | ||||||||||||||||||||||||||||
Net income | $ | 29,626 | $ | 33,470 | $ | 41,506 | $ | 36,835 | $ | 29,456 | $ | 63,096 | $ | 61,243 | ||||||||||||||
Plus: Provision for income taxes | 8,079 | 8,102 | 10,697 | 9,195 | 7,837 | 16,181 | 16,830 | |||||||||||||||||||||
Plus: Provision (benefit) for credit losses and unfunded commitments | 9,000 | (7 | ) | (4,389 | ) | (448 | ) | 577 | 8,993 | 7 | ||||||||||||||||||
Plus: Severance payments | — | — | — | — | 627 | — | 627 | |||||||||||||||||||||
Plus: Loss on sale of AFS securities, net | — | — | — | 188 | — | — | — | |||||||||||||||||||||
Less: Thrive PPP loan forgiveness income | — | — | — | 1,912 | — | — | ||||||||||||||||||||||
Plus: M&A expenses | 295 | 700 | 826 | — | — | 995 | — | |||||||||||||||||||||
Pre-tax, pre-provision operating earnings | $ | 47,000 | $ | 42,265 | $ | 48,640 | $ | 43,858 | $ | 38,497 | $ | 89,265 | $ | 78,707 | ||||||||||||||
Average total assets | $ | 10,711,663 | $ | 9,998,922 | $ | 9,788,671 | $ | 9,385,470 | $ | 9,321,279 | $ | 10,357,261 | $ | 9,132,347 | ||||||||||||||
Pre-tax, pre-provision operating return on average assets1 | 1.76 | % | 1.71 | % | 1.97 | % | 1.85 | % | 1.66 | % | 1.74 | % | 1.74 | % | ||||||||||||||
Average total assets | $ | 10,711,663 | $ | 9,998,922 | $ | 9,788,671 | $ | 9,385,470 | $ | 9,321,279 | $ | 10,357,261 | $ | 9,132,347 | ||||||||||||||
Return on average assets1 | 1.11 | % | 1.36 | % | 1.68 | % | 1.56 | % | 1.27 | % | 1.23 | % | 1.35 | % | ||||||||||||||
Operating return on average assets1 | 1.12 | 1.38 | 1.72 | 1.48 | 1.29 | 1.24 | 1.37 | |||||||||||||||||||||
Operating earnings adjusted for amortization of core deposit intangibles | ||||||||||||||||||||||||||||
Operating earnings | $ | 29,855 | $ | 34,014 | $ | 42,410 | $ | 35,072 | $ | 29,952 | $ | 63,869 | $ | 62,165 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Plus: Amortization of core deposit intangibles | 2,438 | 2,438 | 2,438 | 2,438 | 2,438 | 4,876 | 4,885 | |||||||||||||||||||||
Less: Tax benefit at the statutory rate | 512 | 512 | 512 | 512 | 512 | 1,024 | 1,026 | |||||||||||||||||||||
Operating earnings adjusted for amortization of core deposit intangibles | $ | 31,781 | $ | 35,940 | $ | 44,336 | $ | 36,998 | $ | 31,878 | $ | 67,721 | $ | 66,024 | ||||||||||||||
Average Tangible Common Equity | ||||||||||||||||||||||||||||
Total average stockholders' equity | $ | 1,447,377 | $ | 1,357,448 | $ | 1,301,676 | $ | 1,290,528 | $ | 1,254,371 | $ | 1,402,661 | $ | 1,239,415 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Less: Average goodwill | (404,452 | ) | (404,014 | ) | (393,220 | ) | (370,840 | ) | (370,840 | ) | (404,234 | ) | (370,840 | ) | ||||||||||||||
Less: Average core deposit intangibles | (44,720 | ) | (47,158 | ) | (49,596 | ) | (52,043 | ) | (54,471 | ) | (45,932 | ) | (55,685 | ) | ||||||||||||||
Average tangible common equity | $ | 998,205 | $ | 906,276 | $ | 858,860 | $ | 867,645 | $ | 829,060 | $ | 952,495 | $ | 812,890 | ||||||||||||||
Operating return on average tangible common equity1 | 12.77 | % | 16.08 | % | 20.48 | % | 16.92 | % | 15.42 | % | 14.34 | % | 16.38 | % | ||||||||||||||
Efficiency ratio | 50.76 | % | 52.84 | % | 48.53 | % | 47.55 | % | 52.42 | % | 51.76 | % | 51.01 | % | ||||||||||||||
Net interest income | $ | 84,480 | $ | 73,040 | $ | 76,741 | $ | 71,276 | $ | 67,131 | $ | 157,520 | $ | 132,766 | ||||||||||||||
Noninterest income | 10,378 | 15,097 | 16,150 | 15,627 | 12,456 | 25,475 | 26,628 | |||||||||||||||||||||
Plus: Loss on sale of AFS securities, net | — | — | — | 188 | — | — | — | |||||||||||||||||||||
Less: Thrive PPP loan forgiveness income | — | — | — | 1,912 | — | — | — | |||||||||||||||||||||
Operating noninterest income | 10,378 | 15,097 | 16,150 | 13,903 | 12,456 | 25,475 | 26,628 | |||||||||||||||||||||
Noninterest expense | 48,153 | 46,572 | 45,077 | 41,321 | 41,717 | 94,725 | 81,314 | |||||||||||||||||||||
Less: Severance payments | — | — | — | — | 627 | — | 627 | |||||||||||||||||||||
Less: M&A expenses | 295 | 700 | 826 | — | — | 995 | — | |||||||||||||||||||||
Operating noninterest expense | $ | 47,858 | $ | 45,872 | $ | 44,251 | $ | 41,321 | $ | 41,090 | $ | 93,730 | $ | 80,687 | ||||||||||||||
Operating efficiency ratio | 50.45 | % | 52.05 | % | 47.64 | % | 48.51 | % | 51.63 | % | 51.22 | % | 50.62 | % |
1 Annualized ratio for quarterly metrics.
![](https://ml.globenewswire.com/media/MmY3YWVmYWMtOGJjYS00YzkxLTkyMjktOTZhMDFkZGU5OThiLTEwMjI3NzQ=/tiny/Veritex-Holdings-Inc-.png)
Media and Investor Relations: investorrelations@veritexbank.com
Source: Veritex Holdings, Inc.