UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): May 5, 2021
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||||
(Address of principal executive offices)
(972 ) 349-6200
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 7.01 Regulation FD Disclosure
The attached presentation contains information that the members of Veritex Holdings, Inc. (the "Company" or "Veritex") management will use during visits with investors, analysts, and other interested parties to assist their understanding of the Company from time to time throughout the second quarter of 2021.
As provided in General Instruction B.2 to Form 8-K, the information furnished in Item 7.01 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Forward Looking Statement
This Current Report on Form 8-K contains certain “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 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 the anticipated closing of the Company’s investment in Thrive, the expected payment date of the Company’s quarterly cash dividend, the impact of certain changes in the Company’s accounting policies, standards and interpretations, the effects of the COVID-19 pandemic and actions taken in response thereto, the Company’s future financial performance, business and growth strategy, projected plans and objectives, as well as other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. We refer you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and any updates to those risk factors set forth in the Company’s Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. The Company does not undertake any obligation, and specifically declines any obligation, to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, expressed or implied, included in this Current Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on the Company’s behalf may issue.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit Number | Description | |||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
SIGNATURE
Pursuant to the requirements 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.
| Veritex Holdings, Inc. | ||||||||
| By: | /s/ C. Malcolm Holland, III | |||||||
| C. Malcolm Holland, III | ||||||||
| Chairman and Chief Executive Officer | ||||||||
| Date: | May 5, 2021 | |||||||
Veritex Holdings, Inc.
Franchise Overview • Headquartered in Dallas, Texas • Commenced banking operations in 2010; completed IPO in 2014 • Focused on relationship-driven commercial and private banking across a variety of industries, predominantly in Texas Overview Footprint1 Company Highlights Balance Sheet Asset Quality 1 One branch in Kentucky, not shown on the map. 2 Please refer to “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a description and reconciliation of these non-GAAP financial measures. 3 Total Loans Held for Investment excludes mortgage warehouse and Paycheck Protection Program (“PPP”) loans. 4 Net charge-offs for the quarter ended March 31, 2021. First Quarter 2021 Consolidated Capital Ratios Market Cap (April 28, 2021) $1.63 B Total Texas Branches 39 ROAA 1.44% PTPP ROAA2 1.82% ROAE 10.53% Operating ROATCE2 17.39% Efficiency Ratio 49.62% Total Assets ($mm) $9,238 Total Loans Held for Investment3 ($mm) $5,963 Total Deposits ($mm) $6,905 NCO / Average Loans4 0.00% NPAs / Total Assets 0.92% ACL / Total Loans Held for Investment3 1.76% Common Equity / Assets 13.36% TCE / TA2 9.17% CET1 Ratio 9.27% Leverage Ratio 9.50% Tier 1 Capital Ratio 9.61% Total Capital Ratio 13.38%
Franchise Overview (cont.) • Experienced management team 35 years average banking experience • Strong presence in Dallas and Houston Texas is experiencing continued strong population inflow – population growth is nearly double the U.S. average Significant growth opportunities within our footprint • Scarcity value 3rd largest bank solely focused on major Texas MSAs • Excellent core earnings profile has supported reserves 1.82% PTPP ROAA1 for 1Q21 and 1.76% ACL / Total Loans HFI • Strong capital levels2 9.27% common equity tier 1 ratio 13.38% total risk-based capital ratio • Steady balance sheet growth2 Total loans, excluding PPP, increased $137.0 million, or 8.65% linked quarter annualized Total deposits grew $391.7 million, or 24.0% linked quarter annualized Total demand deposits grew $231.2 million, or 31.3% linked quarter annualized • Track record of successfully integrating acquisitions 1 Please refer to “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a description and reconciliation of these non-GAAP financial measures. 2 Financial data as of March 31, 2021.
Scarcity Value in Texas Metro Markets Total Texas Metro Deposits1 / Assets Company Total Deposits Company Name Ticker ($mm) (%) 11 Veritex Holdings, Inc. VBTX 8,588 98.9 Includes all U.S. banks headquartered in Texas; sorted by Total Assets
Well Positioned in Attractive Texas Markets • 9th in the world no 50 Fortune 500 #1 14.1 million Source: Texas Office of the Governor (Economic Development and Tourism) Job Growth is the Primary Demand Driver for Office Space Top 5 MSAs Office Job Growth 2. DFW 5. Houston (0.71%) (4.74%) MSA Deposits ($ in billion) (Top 25 Rank1) 2021-2026 Est. Pop. Growth (Top 25 Rank1) 2021-2026 Est. HHI Growth (Top 25 Rank1) United States $13,768 2.9% 9.0% Source: FDIC, S&P Global Market Intelligence, 1Represents Houston and DFW rank amongst the Top 25 largest U.S. MSAs by population 1 Rolling 3-month basis as of July 31, 2020. Source: BLS, D.A. Davidson & Co.
Well Positioned in Attractive Texas Markets DFW Houston Houston Employment• • • • • Veritex Regional Distribution as of March 31, 2021 Branches Loans Deposits Total Branches: 39 Total Loans1: $5,964 Total Deposits: $6,905 Source: Texas Workforce Commission, Greater Houston Partnership 1 Excludes mortgage warehouse and PPP loans DFW Employment
Well Positioned in Attractive Texas Markets Organic Growth Strategic Acquisitions • • • 983 1,156 2,556 2,730 5,848 5,964 2016 2017 2018 2019 2020 1Q21 Total Loans 1,120 1,080 2,622 2,825 6,513 6,905 2016 2017 2018 2019 2020 1Q21 Total Deposits • • • ($ in millions) $1,065 $3,202 $1,199 $3,473
Proven Track Record as a Strategic Acquirer Overview Acquisition History • • • • • • Date Target Loans Branches
Stock Performance History Comparison of Cumulative Total Return 1
Analyst Remain Bullish Post 1Q21 Earnings Firm Rating Price Target 2021 Estimate 2022 Estimate Consensus
Analyst Remain Bullish Post 1Q21 Earnings VBTX : “Thrive”ing in Challenging Environment Michael Rose, CFA; Raymond James & Associates “We continue to view risk-reward positively given solid PTPP profitability projections (bolstered by Thrive Investment), NIM expansion, solid loan growth, and capital flexibility. We believe a premium multiple vs. peers is warranted given solid profitability profile, loan growth potential, and increasing franchise/scarcity value.” VBTX : Announces Accretive Thrive Mortgage Deal Alongside 1Q21; EPS/PT Going Higher Brady Gailey, CFA; Keefe Bruyette & Woods “Along with impressive 1Q21 results, we are fans of the Thrive deal announcement as it is EPS accretive without any TBV dilution, increases fee income for VBTX, and will improve profitability. We agree with VBTX’s assessment of its M&A optionality in today’s landscape and looking forward to see how M&A plays out through the year.” VBTX : Increasing Estimates & Price Target Brad Milsaps, CFA; Piper Sandler “VBTX remains one of our favorite names for investors seeking exposure to growth oriented banks in Texas as we continue to believe that VBTX should report relatively better loan and earnings growth than peers given a number of new lending hires and strength in the Texas economy.” VBTX : Positive Revision on Solid Result and Thrive Investment Gary Tenner, CFA; D.A. Davidson & Co. “Raising estimates, maintaining BUY rating and raising price target from $38 to $40. Increases are largely driven by a lower provision estimate for all periods, and increased revenue, related primarily to the pending investment in Thrive Mortgage.” VBTX : Standout 1Q21 Results Matt Olney, CFA; Stephens Inc. “Our positive EPS revision in 2022 (+13% to $2.44) is broad based and includes higher fees, better loan growth along with lower LLP expense. From a strategic view, the Thrive Mortgage acquisition will provide a counter-cyclical revenue stream to balance the company’s asset sensitive balance sheet.”
Strong Earnings Loan and Deposit Growth Capital • Net income of $31.8 million, or $0.64 diluted earnings per share (“EPS”), for 1Q21 compared to $22.8 million, or $0.46 diluted EPS, for 4Q20 • Operating net income1 of $32.2 million, or $0.64 diluted operating EPS1, for 1Q21 compared to $29.7 million, or $0.60 diluted operating EPS, for 4Q20 • Operating ROATCE1 increased to 17.39% in 1Q21 compared to 16.44% in 4Q20 • Total loans, excluding Paycheck Protection Program (“PPP”) loans, increased $137.0 million, or 8.6% linked quarter annualized (“LQA”). Excluding PPP and mortgage warehouse (“MW”), total loans grew 7.9% LQA • Total deposits grew $391.7 million, or 24.0% LQA • Average cost of total deposits decreased to 0.31% for 1Q21 from 0.38% for 4Q20 • Tangible book value per common share increased to $16.34 from $15.70 at December 31, 2020 • Declared quarterly dividend of $0.17 in 1Q21 • Repurchased 147,622 shares during 1Q21 at an average price of $25.92 and extended the expiration date of the stock buyback program to December 31, 2021 1 Please refer to the “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a description and reconciliation of these non-GAAP financial measures. 12 First Quarter 2021 Overview
Key Financial Metrics 46.02% 48.12% 62.52% 47.61% 45.74% 48.11% 49.49% 49.62% 1Q20 2Q20 3Q20 4Q20 1Q21 Reported Operating Efficiency Ratio 1.11% 1.06% 1.04% 1.44% 0.20% 1.35% 1.94% 2.11% 1.82% 1.75% 1.82% 1Q20 2Q20 3Q20 4Q20 1Q21 Reported Operating ROAA PTPP Operating 0.98% $14.39 $14.71 $15.19 $15.70 $16.34 1Q20 2Q20 3Q20 4Q20 1Q21 NPAs / Total Assets Return on Average Tangible Common Equity1 $0.08 $0.48 $0.64 $0.43 $0.46 $0.60 1Q20 2Q20 3Q20 4Q20 1Q21 Diluted EPS Diluted Operating EPS $0.46 3.27% 14.49% 13.27% 12.84% 17.17% 1Q20 2Q20 3Q20 4Q20 1Q21 ROATCE Operating ROATCE Diluted EPS Tangible Book Value per Common Share1 13 16.44% ($ in millions) $51.3 $53.3 $96.4 $87.6 $85.0 0.60% 0.62% 1.11% 0.99% 0.92% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1Q20 2Q20 3Q20 4Q20 1Q21 NPAs NPAs/Total Assets 1 Please refer to the “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a description and reconciliation of these non-GAAP financial measures. 1 11 1 1 12.90% 17.39% 1.46% ROAA 1
• Net interest income of $65.6 million, down $1.2 million from 4Q20 primarily driven by a decrease in the number of days in 1Q21 compared to 4Q20 • Average earning assets grew $191.4 million, or 9.5% LQA, during 1Q21 • 1Q21 weighted average loan production rate of 3.64%, excluding MW loans • 1Q21 weighted average interest-bearing deposit rate of 25 bps on production Net Interest Income 14 $65.8 $65.9 $66.8 $65.6 3.67% 3.31% 3.32% 3.29% 3.22% 3.39% 3.13% 3.10% 3.15% 3.12% 1Q20 2Q20 3Q20 4Q20 1Q21 Net Interest Income NIM Adjusted NIM (Excludes All Purchase Accounting) $67.4 $8,002 $7,900 $8,066 $8,257 1Q20 2Q20 3Q20 4Q20 1Q21 Average Earning Assets $7,388 Average Earning Assets Net Interest Income Rollforward ($ in millions) ($ in millions) 1 Please refer to the “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a description and reconciliation of these non-GAAP financial measures. 4Q20 Net Interest Income 66,766 Day Count < 1,451 > Purchase Accounting Accretion < 755 > Loan Rates < 510 > Deposit Volume < 393 > Deposit Rates 1,128 Loan Volume 721 Other changes 129 1Q21 Net Interest Income 65,635
Loans, excluding PPP, totaled $6.4 billion at December 31, 2020 Loan portfolio 69% ($4.5 billion) variable at December 31, 2020 (excludes PPP) 70% of variable loans are LIBOR-based 86% of the LIBOR loans are tied to 1 month LIBOR; 14% of the LIBOR loans are tied to 1 year LIBOR 30% of variable loans are tied to WSJ Prime Net Interest Income at risk from rate shocks Risk to Veritex is rates falling or staying lower for longer To compensate for this risk, the following actions were taken in 1Q21: Terminated $500 million forward starting 10 year swap at a gain of $43 million that will be recognized on a straight-line basis starting March 2022 Initiated $375 million of average 8 year received fixed / pay variable swaps (receive 131 bps, pay 1 month LIBOR) Interest Rate Risk 15 12/31/2020 3/31/2021 Year 1 +100 Shock 5.40% 4.77% +200 Shock 12.10% 10.33% Year 2 +100 Shock 8.30% 5.43% +200 Shock 17.10% 11.48%
Operating Noninterest Inc./Exp. 16 Operating Noninterest Income1 Composition $3,642 $2,960 $3,130 $3,971 $3,629 $845 $1,240 $1,787 $684 $1,341 $2,179 $2,897 $2,141 $3,336 $2,147 1Q20 2Q20 3Q20 4Q20 1Q21 Other Government guaranteed loan income, net Gain on sale of mortgage loans Loan fees Service charges and fees on deposit accounts 1 Please refer to the “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a description and reconciliation of these non-GAAP financial measures. Operating Noninterest Expense1 Composition $18,870 $20,019 $20,553 $20,011 $22,932 $4,273 $3,994 $3,980 $4,116 $4,096 $2,196 $2,796 $3,159 $3,578 $3,441 $2,696 $2,696 $2,840 $2,558 $2,537 $7,510 $7,750 $5,744 $7,364 $6,591 1Q20 2Q20 3Q20 4Q20 1Q21 Salaries and employee benefits Occupany and equipment Professional and regulatory fees Amortization of intangibles COVID related expenses Other ($ in thousands) $7,247 $35,545 $18,411 $11,006 $38,500 $9,803 $36,408 $2,257 $9,268 $448 $37,627 $14,172 $39,597 $6,548 $1,245 $132
1.37% 0.84% 0.67% 0.55% 0.45% 1.02% 0.59% 0.46% 0.38% 0.31% 1Q20 2Q20 3Q20 4Q20 1Q21 Average cost of interest-bearing deposits Average cost of total deposits Cost of Interest-bearing Deposits and Total Deposits Total deposit balances increased $392 million, or 24% LQA1, and increased $1.1 billion, or 19% YOY1 Total deposit cost down 7 bps compared to 4Q20 due to pricing diligence and product mix Excluding MW and PPP loans, the loan to deposit ratio was 86.4% at March 31, 2021 compared to 89.8% at December 31, 2020 Certificates & Time Maturity Table $2,537 $2,958 $3,190 $1,549 $2,097 $2,172 $1,714 $1,457 $1,543 1 Q 2 0 4 Q 2 1 1 Q 2 1 Demand & Savings Non-Int Bearing Certificates & Time Deposits Deposits Composition 46.2% 31.5% 22.3%$5,800 $6,512 $6,905 Deposit Growth LQA YOY Demand & Savings +31.3% +25.7% Non-Int Bearing +14.2% +40.2% Certificates and Time Deposits +23.6% -10.0% 1 Linked quarter annualized (“LQA”), Year-over-year (“YOY”) 17 ($ in millions) Balance ($000) WA Rate Q2 2021 419,368 0.88% Q3 2021 289,208 0.73% Q4 2021 214,176 0.77% Q1 2022 260,384 0.60% Q2 2022 47,601 0.73% Q3 2022 118,958 0.35% Q4 2022 63,972 0.47% Q1 2023 88,435 0.44% Q2 2023 + 41,056 1.81% Total 1,543,158 0.73%
Total loans, excluding PPP and MW, increased $116.0 million, or 7.9% LQA , and increased $114.1 million, or 2.0% YOY Loan Growth 18 $1.2 Billion ($ in millions) $3,521 $3,753 $3,829 $1,778 $1,560 $1,632 $373 $578 $599 $553 $537 $505 1Q20 4Q20 1Q21 Secured by RE Commercial MW Mortgage/Consumer Loans Held for Investment (excluding PPP) $6,225 $6,428 $6,565 9.1% 24.9% 58.3% 14.1% 8.8% 17.7% -35.9% 18.6% 14.8% -24.1% LQA % Change by Portfolio 7.7% $0.0 $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar CRE ADC Construction LOC Unfunded (Non Revolving) 2021 Unfunded 2020 Unfunded ($ in billions) 40% 42% 44% 46% 48% 50% 52% 54% 56% 58% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Revolving C&I Utilization 2020 2021 Down 1200 bps YOY and from peak
PPP Update 19 Loan Origination Pool Fair Value of Total Funded (in thousands) # of Loans Fair Value of Loans Forgiven (in thousands) % Forgiven $ Fee Collected in 2020 (in millions) < $50,000 $ 23,569 1,118 $ 5,079 24% $ 1.2 $50,001 -$150,000 $ 52,086 591 $ 14,797 28% $ 2.6 $150,001 -$350,000 $ 71,368 314 $ 31,702 44% $ 3.6 $350,000 - $2,000,000 $ 143,395 210 $ 85,052 57% $ 4.3 > $2,000,000 $ 115,047 32 $ 7,124 6% $ 1.1 TOTAL $ 405,465 2,265 $ 143,754 36% $ 12.8 ROUND 1 UPDATE ROUND 2 UPDATE Loan Origination Pool Fair Value of Total Funded (in thousands) # of Loans Fair Value of Loans Forgiven % Forgiven $ Fee Collected in 2021 (in millions) < $50,000 $ 10,809 459 - - $ 1.1 $50,001 -$150,000 $ 25,306 278 - - $ 1.3 $150,001 -$350,000 $ 29,744 135 - - $ 1.5 $350,000 - $2,000,000 $ 79,783 97 - - $ 2.4 TOTAL $ 145,642 969 - - $ 6.3 1Q21 Remaining Valuation Allowance = $2.1 Million
Capital Build 20 10.76% 10.89% 11.89% 10.89% 9.50% 9.61% 13.38% 9.27% Leverage Ratio Tier 1 Ratio Total Capital Ratio CET1 Bank VBTX 1 Estimated capital measures inclusive of CECL capital transition provisions as of March 31, 2021. 2 Total assets includes PPP loans that we did not utilize the Paycheck Protection Program Liquidity Facility to fund. 3 Please refer to the “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a description and reconciliation of these non-GAAP financial measures. Ratios as of March 31, 2021 $0.64 $0.44 $0.05 $0.05 $15.70 $16.34 $(0.17) $(0.04)$(0.02) TBVPS Rollforward $(0.31) ($ in thousands) March 31, 2021 December 31, 2020 $ Change Basel III Standarized1 CET1 capital 779,057$ 753,261$ 25,796$ CET1 capital ratio 9.3% 9.3% Leverage capital 808,338$ 782,487$ 25,851$ Leverage capital ratio 9.5% 9.4% Tier 1 capital 808,338$ 782,487$ 25,851$ Tier 1 capital ratio 9.6% 9.7% Total capital 1,124,859$ 1,099,031$ 25,828$ Total capital ratio 13.4% 13.6% Risk weighted assets 8,401,800$ 8,105,484$ 296,316$ Total assets2 9,237,510$ 8,820,871$ 416,639$ Tangible common equity / Tangible Assets3 9.17% 9.23%
1 Past due (“PD”) loans exclude purchased credit deteriorated loans that are accounted for on a pooled basis and non-accrual (“NA”) loans. 2 Total loans excludes Loans Held for Sale, MW and PPP loans. 1Q20 2Q20 3Q20 4Q20 1Q21 0.00% 0.10% 0.20% 0.30% 0.40% 30-59 Past Due 60-89 Past Due 90+ Past Due Past Due1 Trends % of Total Loans2 Asset Quality and ACL 21 ($ in millions) 1Q20 2Q20 3Q20 4Q20 1Q21 Acquired $- $1,740 $2,421 $16,462 $130 Originated $(236) $50 $45 $45 $18 Net Charge-offs ($ in thousands) Totals $34,501 $24,120 $11,738 $18,691 $101.0 $115.4 $121.6 $105.1 $104.9 1.73% 2.01% 2.10% 1.80% 1.76% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 1Q20 2Q20 3Q20 4Q20 1Q21 ACL ACL/Total Loans ACL / Total Loans2 ($ in millions) 1Q20 2Q20 3Q20 4Q20 1Q21 NA loans Accruing 90+ PD OREO Nonperforming Assets Trend $46,556 ($ in millions) NA+OREO $51,310 $94,673 $83,433 $75,931 0.55% 0.60% 1.09% 0.95% 0.82% NA+OREO/Total Assets $22,637
Credit 22 Portfolio continues to show improving trends Revenues increased by 11.4% QOQ2 Occupancy improved 9.8% QOQ March 2021 was the high water mark for revenue, occupancy and revenue per available room since the COVID-19 pandemic began One NPA in the hospitality book totaling $7.1 million was resolved after quarter end Hospitality Portfolio Non-Owner Occupied (“NOO”) Office Portfolio ($ in millions) # $ Commitment $ Outstanding Avg. Loan Amount Term 82 $ 337.9 $ 334.5 $ 4.0 In-Process Construction 4 $ 65.4 $ 45.4 $ 6.8 SBA / USDA 24 $ 14.0 $ 14.0 $ 0.3 Total 110 $ 417.3 $ 393.9 $ 2.9 % of Total Loans1 6.6% ($ in millions) # $ Commitment $ Outstanding Avg. Loan Amount NOO Office 98 $ 698.9 $ 602.4 $ 5.8 Constructi on 7 $ 118.9 $ 82.7 $ 11.8 Total 105 $ 817.8 $ 685.1 $ 6.2 % of Total Loans1 9.8% 9.8% of the funded loan portfolio A weighted average LTV of 59% 51% of the exposure is in the DFW market and 29% is in the Houston market Top 10 relationships make up 32% of our office portfolio and have an average DSCR of 1.78x Only one credit in the Top 10 office exposure is rated as a watch credit 1.6% of the office portfolio is classified in one credit1 Total loans excludes loans held for sale and PPP loans. 2 Quarter-over-quarter (“QOQ”)
Thrive Mortgage Investment
24 Company Background o The first company in Texas to close a fully electronic note with a remote notary. GSEs will purchase these notes within 24 hours of closing o Markets include TX, OH, CO, KY, NC, KS, VA, FL, MD and IN o Experienced management team with an average company tenure of 10+ years o Originate/underwrite/sell mortgages of all types o Efficient business model with comparable cultures Investment Summary 49% interest for $53.9 million (all cash transaction) VBTX obtains one board seat (25%) Fee income engine with limited integration Projected close date middle of 2021
25 Strategic Rationale + Financially compelling to increase fee income with a counter cyclical business to a rate and asset sensitive balance sheet Robust capital generation profile Deploys excess liquidity and capital Preserves bandwidth for other strategic core growth and/or acquisitive opportunities Strong cultural fit focused on risk controls, operating efficiency and strong, consistent financial performance Continuity of highly experienced leadership with all founders still with the Company Accounted for as an equity method investment
26 Historical Financial Information ($ in thousand) 1Q21 1Q20 Loans HFS 167,354 63,269 Total Assets 227,985 107,277 Members Equity 42,670 11,396 Pre-Tax Net Income 6,349 819 audited 1Q20 2Q20 3Q20 4Q20 1Q21 Purchase Refinance audited 2020 2019 179,702 70,774 242,169 108,891 36,906 10,934 31,942 5,817 unaudited unaudited 1Q20 2Q20 3Q20 4Q20 1Q21 Retail Correspondent 1Q20 2Q20 3Q20 4Q20 1Q21 Digital Traditional 69% 31% 52% 36% 48% 49% 51%64% 48% 52% 1% 3% 6% 16% 18% 74% 80% 85% 92% 90% 99% 97% 94% 84% 82% 26% 20% 15% 8% 10% 1Q20 2Q20 3Q20 4Q20 1Q21 $262.5 $546.0 $623.9 $822.4 $715.5 Total Quarterly Volume (in millions) Purchase v. Refinance Retail v. Correspondent Digital v. Traditional 4.67% 4.92% 5.59% 4.98% 4.79% 4.2% 4.7% 5.2% 5.7% 6.2% 6.7% 1Q20 2Q20 3Q20 4Q20 1Q21 Origination/Seconday Income GOS % Income and GOS % $11.6 $38.8 $34.0 $33.6 $23.4 (in millions)
Veritex Holdings, Inc. Supplemental Information
28 Reconciliation of Non-GAAP Financial Measures 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Tangible Common Equity Tangible common equity 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Tangible Common Equity Tangible common equity Tangible Assets Tangible Assets Tangible Common Equity to Tangible Assets As of (Dollars in thousands, except per share data) (Dollars in thousands) As of
29 Reconciliation of Non-GAAP Financial Measures 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Net income available for common stockholders adjusted for amortization of core deposit intangibles Net income available for common stockholders adjusted for amortization of core deposit intangibles Average Tangible Common Equity Average tangible common equity Return on Average Tangible Common Equity (Annualized) For the Quarter Ended (Dollars in thousands)
30 Reconciliation of Non-GAAP Financial Measures
31 Reconciliation of Non-GAAP Financial Measures 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Pre-Tax, Pre-Provision Operating Earnings Net pre-tax, pre-provision operating earnings Total average assets Pre-tax, pre-provision operating return on average assets1 Average Total Assets Operating earnings adjusted for amortization of core deposit intangibles Average Tangible Common Equity Average tangible common equity Operating return on average tangible common equity1 Efficiency ratio Operating efficiency ratio For the Quarter Ended (Dollars in thousands)
Reconciliation of Non-GAAP Financial Measures 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Operating noninterest income Operating noninterest income Operating noninterest expense Operating noninterest expense 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Adjusted net interest margin Adjusted net interest margin Adjusted net interest margin As of (Dollars in thousands, except per share data) For the Quarter Ended (Dollars in thousands, except per share data)
Veritex Holdings, Inc.