0001501570-21-000176 | 10-Q | XBRL Viewer

Fair Value

The following table summarizes assets measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:


	March 31, 2021
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
Available for sale debt securities	$	—	$	1,043,951	$	—	$	1,043,951
Equity securities with a readily determinable fair value	11,164		—		—		11,164
PPP loans	—		407,353		—		407,353
Loans held for sale(1)	—		7,628		—		7,628
Interest rate swap designated as hedging instruments	—		1,839		—		1,839
Correspondent interest rate swaps not designated as hedging instruments	—		1,307		—		1,307
Customer interest rate swaps not designated as hedging instruments	—		5,548		—		5,548
Correspondent interest rate caps and collars not designated as hedging instruments	—		1		—		1

Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	2,124	$	—	$	2,124
Correspondent interest rate swaps not designated as hedging instruments	—		5,844		—		5,844
Customer interest rate swaps not designated as hedging instruments	—		1,248		—		1,248

Customer interest rate caps and collars not designated as hedging instruments	—		1		—		1

(1) Represents loans held for sale elected to be carried at fair value upon origination or acquisition.


	December 31, 2020
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
Available for sale debt securities	$	—	$	1,024,329	$	—	$	1,024,329
Equity securities with a readily determinable fair value	11,363		—		—		11,363
PPP loans	—		358,042		—		358,042
Loans held for sale(1)	—		6,681		—		6,681
Interest rate swap designated as hedging instruments	—		17,543		—		17,543
Customer interest rate swaps not designated as hedging instruments	—		10,937		—		10,937
Correspondent interest rate caps and collars not designated as hedging instruments	—		1		—		1

Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	2,255	$	—	$	2,255
Correspondent interest rate swaps not designated as hedging instruments	—		11,666		—		11,666
Customer interest rate caps and collars not designated as hedging instruments	—		1		—		1

(1) Represents loans held for sale elected to be carried at fair value upon origination or acquisition.

There were no transfers between Level 2 and Level 3 during the three months ended March 31, 2021 and 2020.

The following table summarizes assets measured at fair value on a non-recurring basis as of March 31, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:


	Fair Value Measurements Using
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
As of March 31, 2021
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	8,986	$	8,986
Servicing assets with a valuation allowance	—		—		2,739		2,739
As of December 31, 2020
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	2,386	$	2,386
Servicing assets with a valuation allowance	—		—		2,975		2,975

At March 31, 2021, collateral dependent loans with an allowance had a recorded investment of $15,325, with $6,339 specific allowance for credit loss allocated. At December 31, 2020, impaired loans had a carrying value of $7,115, with $4,729 specific allowance for credit loss allocated.

At March 31, 2021, servicing assets of $3,167 had a valuation allowance totaling $428. At December 31, 2020, servicing assets of $3,531 had a valuation allowance totaling $556.

There were no liabilities measured at fair value on a non-recurring basis as of March 31, 2021 or December 31, 2020.

Fair Value of Financial Instruments

The Company’s methods of determining fair value of financial instruments in this Note are consistent with its methodologies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Please refer to Note 17 in the Company’s Annual Report on Form 10-K for information on these methods.

The estimated fair values and carrying values of all financial instruments not measured at fair value on a recurring basis under current authoritative guidance as of March 31, 2021 and December 31, 2020 were as follows:


			Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
March 31, 2021
Financial assets:
Cash and cash equivalents	$	468,029	$	—	$	468,029	$	—
Held to maturity debt securities	33,909		—		36,527		—
Loans held for sale(1)	12,236		—		12,236		—


Loans held for investment(2)	6,442,233		—		—		6,491,166
Accrued interest receivable	27,661		—		27,661		—
Bank-owned life insurance	83,318		—		83,318		—
Servicing asset	624		—		624		—
Equity securities without a readily determinable fair value	3,575		N/A		N/A		N/A
FHLB and FRB stock	71,469		N/A		N/A		N/A
Financial liabilities:
Deposits	$	6,904,570	$	—	$	6,794,051	$	—
Advances from FHLB	777,679		—		791,021		—
Accrued interest payable	2,132		—		2,132		—
Subordinated debentures and subordinated notes	262,774		—		262,774		—
Securities sold under agreement to repurchase	2,777		—		2,727		—

December 31, 2020
Financial assets:
Cash and cash equivalents	$	230,825	$	—	$	230,825	$	—
Held to maturity debt securities	30,872		—		34,283		—
Loans held for sale(1)	14,733		—		14,733		—

Loans held for investment(2)	6,317,986		—		—		6,335,402
Accrued interest receivable	23,798		—		23,798		—
Bank-owned life insurance	82,855		—		82,855		—
Servicing asset	388		—		486		—
Equity securities without a readily determinable fair value	3,575		N/A		N/A		N/A
FHLB and FRB stock	71,236		N/A		N/A		N/A
Financial liabilities:
Deposits	$	6,512,846	$	—	$	6,608,849	$	—
Advances from FHLB	777,718		—		782,321		—
Accrued interest payable	2,665		—		2,665		—
Subordinated debentures and subordinated notes	262,778		—		262,778		—
Securities sold under agreement to repurchase	2,225		—		2,199		—

(1) Loans held for sale represent mortgage loans held for sale that are carried at lower of cost or market.

(2) Loans held for investment includes MW and is carried at amortized cost.

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Derivative Financial Instruments

3 Months Ended

Mar. 31, 2021

Derivative Financial Instruments

The Company primarily uses derivatives to manage exposure to market risk, including interest rate risk and credit risk and to assist customers with their risk management objectives. Management will designate certain derivatives as hedging instruments in a qualifying hedge accounting relationship. The Company’s remaining derivatives consist of derivatives held for customer accommodation or other purposes.

The fair value of derivative positions outstanding is included in other assets and accounts payable and other liabilities on the accompanying condensed consolidated balance sheets and in the net change in each of these financial statement line items in the accompanying condensed consolidated statements of cash flows. For derivatives not designated as hedging instruments, swap fee income and gains and losses due to changes in fair value are included in other noninterest income and the operating section of the condensed consolidated statement of cash flows. For derivatives designated as hedging instruments, the entire change in the fair value related to the derivative instrument is recognized as a component of other comprehensive income and subsequently reclassified into interest income or interest expense when the forecasted transaction affects income. The notional amounts and estimated fair values as of March 31, 2021 and December 31, 2020 are as shown in the table below.


	March 31, 2021						December 31, 2020
			Estimated Fair Value						Estimated Fair Value
	Notional Amount		Asset Derivative		Liability Derivative		Notional Amount		Asset Derivative		Liability Derivative
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on borrowing advances	$	—	$	—	$	—	$	500,000	$	17,543	$	—
Interest rate swap on money market deposit account payments	250,000		1,839		—		250,000		—		2,255
Interest rate swap on customer loan interest payments	125,000		—		1,140		—		—		—
Interest rate swap on customer loan interest payments	125,000		—		792		—		—		—
Interest rate swap on customer loan interest payments	125,000		—		192		—		—		—
Total derivatives designated as hedging instruments	$	625,000	$	1,839	$	2,124	$	750,000	$	17,543	$	2,255

Derivatives not designated as hedging instruments:
Financial institution counterparty:
Interest rate swaps	$	236,551	$	1,307	$	5,844	$	303,918	$	—	$	11,666
Interest rate caps and collars	41,916		1		—		41,916		1		—
Commercial customer counterparty:
Interest rate swaps	236,551		5,548		1,248		303,918		10,937		—
Interest rate caps and collars	41,916		—		1		41,916		—		1
Total derivatives not designated as hedging instruments	$	556,934	$	6,856	$	7,093	$	691,668	$	10,938	$	11,667
Offsetting derivative assets/liabilities			(2,466)		(2,466)				1		1
Total derivatives	$	1,181,934	$	6,229	$	6,751	$	1,441,668	$	28,482	$	13,923

Pre-tax gain (loss) included in the condensed consolidated statements of income and related to derivative instruments for the three months ended March 31, 2021 and 2020 were as follows.


	For the Three Months Ended March 31, 2021						For the Three Months Ended March 31, 2020
	Gain (loss) recognized in other comprehensive income on derivative		Gain (loss) reclassified from accumulated other comprehensive income into income		Location of gain (loss) reclassified from accumulated other comprehensive income into income		Gain recognized in other comprehensive income on derivative		Gain (loss) reclassified from accumulated other comprehensive income into income		Location of gain (loss) reclassified from accumulated other comprehensive income into income
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on borrowing advances	$	26,357	$	—	Interest Expense		$	1,022	$	284	Interest Expense
Interest rate swap on money market deposit account payments	3,895		(199)		Interest Expense		2,710		—		Interest Income
Commercial loan interest rate floor	—		541		Interest Income		—		—
Interest rate swaps on customer loan interest payments	(2,981)		224		Interest Income		—		—
Total	$	27,271	$	566			$	3,732	$	284

					Net gain recognized in other noninterest income						Net gain recognized in other noninterest income
Derivatives not designated as hedging instruments:
Interest rate swaps, caps and collars					$	98					$	501

Cash Flow Hedges

Cash flow hedge relationships mitigate exposure to the variability of future cash flows or other forecasted transactions. The Company uses interest rate swaps, floors, caps and collars to manage overall cash flow changes related to interest rate risk exposure on benchmark interest rate loans.

In March 2021, the Company entered into three fixed receive/pay variable interest rate swaps, each with a notional amount of $125,000, to hedge the variability of cash flow payments attributable to changes in interest rates in regards to forecasted of three-month attributable to changes in interest rates in regards to forecasted money market account borrowings from March 2021 through March 2028 and March 2021 through March 2031.

In March 2020, the Company entered into an interest rate swap for a notional amount of $500,000 to hedge the variability of cash flow payments attributable to changes in interest rates in regards to forecasted issuances of three-month term debt arrangements every three months from March 2022 through March 2032. These forecasted borrowings can be sourced from a FHLB advance, repurchase agreement, brokered certificate of deposit or some combination. This interest rate swap was terminated on February 24, 2021. The pre-tax gain of $43,900, resulting from the termination of the interest rate swap, will remain in other comprehensive income (loss) and will be accreted over a 10 year period starting in March 2022 unless the forecasted transactions become probable of not occurring.

In March 2020, the Company entered into an interest rate swap for a notional amount of $250,000 to hedge the variability of cash flow payments attributable to changes in interest rates in regards to forecasted money market account borrowings from March 2020 through March 2025.

In May 2019, the Company entered into a $275,000 notional interest rate floor for commercial loans with a two-year term. The interest rate floor had a purchased floor strike of 2.43%. In February 2020, the Company terminated this interest rate floor. The gain resulting from the termination of the interest rate floor will remain in other comprehensive income (loss) and will be accreted into earnings over the remaining period of the former hedging relationship unless the forecasted transaction becomes probable of not occurring.

Interest Rate Swap, Floor, Cap and Collar Agreements Not Designated as Hedging Derivatives

In order to accommodate the borrowing needs of certain commercial customers, the Company has entered into interest rate swap or cap agreements with those customers. These interest rate derivative contracts effectively allow the Company’s customers to convert a variable rate loan into a fixed rate loan. In order to offset the exposure and manage interest rate risk, at the time an agreement was entered into with a customer, the Company entered into an interest rate swap or cap with a correspondent bank counterparty with offsetting terms. These derivative instruments are not designated as accounting hedges and changes in the net fair value are recognized in noninterest income or expense. Because the Company acts as an intermediary for its customers, changes in the fair value of the underlying derivative contracts substantially offset each other and do not have a material impact on the Company’s results of operations. The fair value amounts are included in other assets and other liabilities.

The following is a summary of the interest rate swaps, caps and collars outstanding as of March 31, 2021 and December 31, 2020.


	March 31, 2021
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
Non-hedging derivative instruments:
Customer interest rate derivative:
Interest rate swaps - receive fixed/pay floating	$	236,551	3.140% - 8.470%	LIBOR 1 month + 0% - 5.00%	Wtd. Avg. 5.1 years	$	(4,537)
Interest rate caps and collars	$	41,916	3.000% / 5.000%	LIBOR 1 month + —%- 2.5%	Wtd. Avg. 1.3 years	$	1

Correspondent interest rate derivative:
Interest rate swaps - pay fixed/receive floating	$	236,551	3.140% - 8.470%	LIBOR 1 month + —% - 5.00%	Wtd. Avg. 5.1 years	$	4,301
Interest rate caps and collars	$	41,916	2.500% / 3.000%	LIBOR 1 month + 0%	Wtd. Avg. 1.3 years	$	(1)

	December 31, 2020
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
Non-hedging derivative instruments:
Customer interest rate derivative:
Interest rate swaps - receive fixed/pay floating	$	303,918	3.140% - 8.470%	LIBOR 1 month + —% - 5.00% PRIME H15 - 0.250%	Wtd. Avg. 4.1 years	$	(11,666)
Interest rate caps and collars	$	41,916	2.500% / 3.000%	LIBOR 1 month + —%	Wtd. Avg. 1.6 years	$	1

Correspondent interest rate derivative:
Interest rate swaps - pay fixed/receive floating	$	303,918	3.140% - 8.470%	LIBOR 1 month + —% - 5.00% PRIME H15 - 25	Wtd. Avg. 4.1 years	$	10,937
Interest rate caps and collars	$	41,916	3.000% / 5.000%	LIBOR 1 month + —% - 2.5%	Wtd. Avg. 1.6 years	$	(1)

Off-Balance Sheet Loan Commitments

3 Months Ended

Mar. 31, 2021

Off-Balance Sheet Loan Commitments

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, MW commitments and standby and commercial letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the condensed consolidated balance sheets.

The Company’s exposure to credit loss in the event of nonperformance by the other party to a financial instrument for commitments to extend credit, MW commitments and standby and commercial letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

The following table sets forth the approximate amounts of these financial instruments as of March 31, 2021 and December 31, 2020:


	March 31,		December 31,
	2021		2020
Commitments to extend credit	$	3,075,949	$	2,743,571
MW commitments	353,884		354,603
Standby and commercial letters of credit	50,243		44,427
Total	$	3,480,076	$	3,142,601

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Management evaluates each customer’s creditworthiness on a case-by-case basis and substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of future loan funding. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the borrower.

MW commitments are unconditionally cancellable and represent the unused capacity on MW facilities the Company has approved. The Company reserves the right to refuse to buy any mortgage loans offered for sale by a customer, for any reason, at the Company’s sole and absolute discretion.

Standby and commercial letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby and commercial letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company’s policy for obtaining collateral and the nature of such collateral is substantially the same as that involved in making commitments to extend credit.

The table below presents the activity in the allowance for unfunded commitment credit losses related to those financial instruments discussed above. This allowance is recorded in accounts payable and other liabilities on the condensed consolidated balance sheets:


	Three Months Ended March 31,
		2021		2020
Beginning balance for allowance for credit losses on unfunded commitments		$	10,747	$	878
Impact of CECL adoption		—		840
Provision for credit losses on unfunded commitments		(570)		3,881
Ending balance of allowance for credit losses on unfunded commitments		$	10,177	$	5,599

Stock-Based Awards

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Awards

2010 Stock Option and Equity Incentive Plan (“2010 Incentive Plan”)

The Company recognized no stock compensation expense related to the 2010 Incentive Plan for the three months ended March 31, 2021 and 2020.

A summary of option activity under the 2010 Incentive Plan for the three months ended March 31, 2021 and 2020, and changes during the periods then ended, is presented below:


	2010 Incentive Plan
	Non-Performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	257,500	$	10.28	1.37 years



Exercised	(202,500)	10.14
Outstanding and exercisable at March 31, 2020	55,000	$	10.77	2.02 years


Outstanding at January 1, 2021	20,000	$	10.09	1.06 years	$	374



Exercised	(18,300)	10.00
Outstanding and exercisable at March 31, 2021	1,700	$	10.37	1.69 years	$	127

As of March 31, 2021, December 31, 2020 and March 31, 2020 there was no unrecognized stock compensation expense related to non-performance based stock options.

A summary of the fair value of the Company’s stock options exercised under the 2010 Incentive Plan for the three months ended March 31, 2021 and 2020 is presented below:


	Fair Value of Options Exercised as of March 31,
	2021	2020
Nonperformance-based stock options exercised	543	5,745

2019 Amended Plan and Green Acquired Omnibus Plans

2021 Grants of Restricted Stock Units

During the three months ending March 31, 2021, the Company granted non-performance-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) under the 2019 Amended and Restatement Omnibus Incentive Plan (the “2019 Amended Plan”) and the Veritex (Green) 2014 Omnibus Equity Incentive Plan (the “Veritex (Green) 2014 Plan”). The majority of the RSUs granted to employees during the three months ending March 31, 2021 with annual graded vesting over a three year period from the grant date.

The PSUs granted in February 2021 are subject to a service, performance and market condition. The performance and market condition determine the number of awards to vest. The service period is from February 1, 2021 to January 31, 2024, the performance condition performance period is from January 1, 2021 to December 31, 2023 and the market condition performance period is from February 1, 2021 to January 31, 2024. A Monte Carlo simulation was used to estimate the fair value of PSUs on the grant date.

Stock Compensation Expense

Stock compensation expense for options, RSUs and PSUs granted under the 2019 Amended Plan and the Veritex (Green) 2014 Plan were as follows:


	Three months ended March 31,
	2021		2020
2019 Amended Plan	$	1,981	$	1,488
Veritex (Green) 2014 Plan	497		470

2019 Amended Plan

A summary of the status of the Company’s stock options under the 2019 Amended Plan as of March 31, 2021 and 2020, and changes during the three months then ended, is as follows:


	2019 Amended Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	849,768	$	23.61	8.24 years
Granted	144,025	29.13

Forfeited	(21,891)	28.17

Exercised	(33,439)	19.19
Outstanding at March 31, 2020	938,463	$	24.51	8.28 years
Options exercisable at March 31, 2020	469,983	$	24.15	7.50 years

Outstanding at January 1, 2021	975,801	$	24.26


Forfeited	(13,996)	25.93

Exercised	(71,479)	23.03
Outstanding at March 31, 2021	890,326	$	24.34	7.54 years	$	7,463
Options exercisable at March 31, 2021	560,176	$	24.31	7.07 years	$	4,709

As of March 31, 2021, December 31, 2020 and March 31, 2020, there was $2,047, $2,470 and $3,563 of total unrecognized compensation expense related to options awarded under the 2019 Amended Plan, respectively. The unrecognized compensation expense at March 31, 2021 is expected to be recognized over the remaining weighted average requisite service period of 1.38 years.

A summary of the status of the Company’s RSUs under the 2019 Amended Plan as of March 31, 2021 and 2020, and changes during the three months then ended, is as follows:


	2019 Amended Plan

	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2020	175,688	$	21.65
Granted	95,885	29.10

Vested into shares	(46,926)	28.99

Outstanding at March 31, 2020	224,647	$	24.97

Outstanding at January 1, 2021	441,132	$	20.39
Granted	232,149	26.38

Vested into shares	(41,362)	23.29

Outstanding at March 31, 2021	631,919	$	22.40

A summary of the status of the Company’s PSUs under the 2019 Amended Plan as of March 31, 2021 and 2020, and changes during the three months then ended, is as follows:


	2019 Amended Plan

	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2020	63,727	$	22.76
Granted	39,398	29.13

Vested into shares	(1,841)	26.65

Outstanding at March 31, 2020	101,284	$	25.22

Outstanding at January 1, 2021	100,195	$	23.20
Granted	56,276	26.12



Outstanding at March 31, 2021	156,471	$	24.23

As of March 31, 2021, December 31, 2020 and March 31, 2020 there was $14,217, $8,222 and $7,209 of total unrecognized compensation related to RSUs and PSUs awarded under the 2019 Amended Plan, respectively. The unrecognized compensation expense at March 31, 2021 is expected to be recognized over the remaining weighted average requisite service period of 2.51 years.

A summary of the fair value of the Company’s stock options exercised, RSUs and PSUs vested under the 2019 Amended Plan during the three months ended March 31, 2021 and 2020 is presented below:


	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2021	2020
Non-performance-based stock options exercised	2,090	943
RSUs vested	1,113	116
PSUs vested	—	18

Veritex (Green) 2014 Plan

A summary of the status of the Company’s stock options under the Veritex (Green) 2014 Plan as of March 31, 2021 and 2020, and changes during the three months then ended, is as follows:



	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	386,969	$	19.30

Granted	31,075	29.13
Forfeited	(23,736)	21.38

Exercised	(32,526)	19.81
Outstanding at March 31, 2020	361,782	$	19.97	7.77 years
Options exercisable at March 31, 2020	214,342	$	17.87	6.94 years

Outstanding at January 1, 2021	352,000	$	19.99	6.97 years	$	2,124


Forfeited	(3,960)	21.38

Exercised	(54,241)	19.77
Outstanding at March 31, 2021	293,799	$	20.01	6.65 years	$	3,748
Options exercisable at March 31, 2021	222,312	$	18.84	6.19 years	$	3,080

As of March 31, 2021, December 31, 2020 and March 31, 2020, there was $497, $626, and $1,047 of total unrecognized compensation expense related to options awarded under the Veritex (Green) 2014 Plan, respectively. The unrecognized compensation expense at March 31, 2021 is expected to be recognized over the remaining weighted average requisite service period of 0.91 years.

A summary of the status of the Company’s RSUs under the Veritex (Green) 2014 Plan as of March 31, 2021 and 2020 and changes during the three months then ended, is as follows:




	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2020	116,250	$	21.38
Granted	33,918	29.13
Vested into shares	(38,744)	29.13
Forfeited	(3,492)	29.13
Outstanding at March 31, 2020	107,932	$	24.45

Outstanding at January 1, 2021	156,187	$	21.15
Granted	5,692	26.12
Vested into shares	(33,335)	21.38
Forfeited	(2,646)	24.25
Outstanding at March 31, 2021	125,898	$	21.25

A summary of the status of the Company’s PSUs under the Veritex (Green) 2014 Plan as of March 31, 2021 and 2020 and changes during the three months then ended, is as follows:




	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2020	25,320	$	21.38
Granted	8,531	29.13


Outstanding at March 31, 2020	33,851	$	23.33

Outstanding at January 1, 2021	30,728	$	21.43
Granted	6,231	26.12

Forfeited	(724)	19.69
Outstanding at March 31, 2021	36,235	$	22.27

As of March 31, 2021, December 31, 2020 and March 31, 2020, there was $2,429, $2,484, and $2,577, respectively, of total unrecognized compensation related to outstanding RSUs and PSUs awarded under the Veritex (Green) 2014 Plan to be recognized over a remaining weighted average requisite service period of 1.92 years.

A summary of the fair value of the Company’s stock options exercised and RSUs vested under the Veritex (Green) 2014 Plan during the three months ended March 31, 2021 and 2020 presented below:


	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2021		2020
Non-performance-based stock options exercised	$	1,582	$	950
RSUs vested	713		142

Green 2010 Plan

In addition to the Veritex (Green) 2014 Plan discussed earlier in this Note, the Company assumed the Green Bancorp Inc. 2010 Stock Option Plan (“Green 2010 Plan”).

A summary of the status of the Company’s stock options under the Green 2010 Plan as of March 31, 2021 and 2020, and changes during the three months then ended, is as follows:


	Green 2010 Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	571,735	$	10.64



Exercised	(386,960)	10.35
Outstanding at March 31, 2020	184,775	$	11.24	4.09 years

Outstanding at January 1, 2021	131,083	$	11.60



Exercised	(62,000)	10.50
Outstanding at March 31, 2021	69,083	$	12.59	2.90 years	$	1,391

A summary of the fair value of the Company’s stock options exercised under the Green 2010 Plan during the three months ended March 31, 2021 and 2020 presented below:


	Fair Value of Options Exercised as of March 31,
	2021	2020
Nonperformance-based stock options exercised	1,812	11,259

Income Taxes

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income tax expense for the three months ended March 31, 2021 and 2020 was as follows:


	Three Months Ended March 31,
		2021			2020
Income tax expense (benefit) for the period		$	8,993		$	(684)
Effective tax rate		22.1		%	(19.8)		%

For the three months ended March 31, 2021, the Company had an effective tax rate of 22.1%. The Company had a net discrete tax expense of $272 associated with the recognition of a $426 true-up of a deferred tax liability and $154 in excess tax benefit realized on share-based payment awards during the three months ended March 31, 2021. Excluding this discrete tax item, the Company had an effective tax rate of 21.4% for the three months ended March 31, 2021.

For the three months ended March 31, 2020, the Company had an effective tax rate of (19.8)%. The decrease in the effective tax rate was primarily due to a net discrete tax benefit of $1,388 primarily associated with the recognition of excess tax benefit realized on share-based payment awards. Excluding this discrete tax item, the Company had an effective tax rate of 22.1% for the three months ended March 31, 2020.

Legal Contingencies	3 Months Ended
Legal Contingencies	Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Legal Contingencies	Legal Contingencies Litigation The Company may from time to time be involved in legal actions arising from normal business activities. In the opinion of management, there are no claims for which it is reasonably possible that an adverse outcome would have a material effect on the Company's financial position, liquidity or results of operations. The Company is not aware of any material unasserted claims.

Capital Requirements and Restrictions on Retained Earnings

3 Months Ended

Mar. 31, 2021

Banking and Thrift [Abstract]

Capital Requirements and Restrictions on Retained Earnings

Under applicable U.S. banking laws, there are legal restrictions limiting the amount of dividends the Company can declare. Approval of the regulatory authorities is required if, among other things, the effect of the dividends declared would cause regulatory capital of the Company to fall below specified minimum levels.

The Company on a consolidated basis and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements triggers certain mandatory and may lead to additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for Prompt Corrective Action (“PCA”), the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and, if the Bank were not eligible for or did not opt into the Community Bank Leverage Ratio (“CBLR”) framework, certain off-balance sheet items as calculated under regulatory accounting practices. If the Company were not eligible for or did not opt into the CBLR framework, its capital amounts and classification would also be subject to qualitative judgments by the regulators about components of capital, risk weightings of assets, and other factors.

Under the Economic Growth, Regulatory Reform, and Consumer Protection Act and implementing regulations of the federal banking agencies, certain banking organizations with less than $10 billion in assets may elect to satisfy a single CBLR of Tier 1 capital to average total consolidated assets in lieu of the generally applicable capital requirements of the capital rules implementing Basel III. We have elected to use the CBLR framework. Accordingly, if we and the Bank continue to meet all requirements under this framework, we and the Bank will not be required to report or calculate risk-based capital, and the Bank will be considered to have met the well-capitalized ratio requirements under PCA regulations. The federal banking agencies have finalized the CBLR minimum at 9% and we and the Bank exceed this standard. The CARES Act temporarily reduced the CBLR to 8% until the earlier of December 31, 2020 or the expiration of the national emergency declaration, and rules issued by the federal banking agencies provide a graduated transition back to the 9% threshold by January 1, 2022.

If we were not eligible for or did not opt into the CBLR framework, we would be subject to other quantitative measures established by regulation to ensure capital adequacy. These generally applicable capital requirements require a banking organization that does not operate under the CBLR framework to maintain minimum amounts and ratios (set forth in the table below) of total Tier 1, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets (each as defined in the regulations). Additionally, to be categorized as “well capitalized,” a banking organization that does not operate under the CBLR framework is required to maintain minimum total risk-based common equity Tier 1, Tier 1, and total capital ratios and Tier 1 leverage ratios as set forth in the table below.

As of March 31, 2021 and December 31, 2020, the Company’s and the Bank’s capital ratios exceeded those levels necessary to be categorized as “well capitalized” if the Company and the Bank were not operating under the CBLR framework. There are no conditions or events since March 31, 2021 that management believes have changed the Company’s category.

In the first quarter of 2020, U.S. federal regulatory authorities issued an interim final rule that provides banking organizations that adopt the current expected credit losses (“CECL”) methodology during the 2020 calendar year with the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of the capital

benefit provided during the initial two-year delay (i.e., a five-year transition in total). In connection with our adoption of CECL on January 1, 2020, we have elected to utilize the five-year CECL transition. As a result, the effects of CECL on the Company’s and the Bank’s regulatory capital will be delayed through the year 2021, after which the effects will be phased-in over a three-year period from January 1, 2022 through December 31, 2024.

A comparison of the Company’s and Bank’s actual capital amounts and ratios to required capital amounts and ratios that would be required if the Company and Bank were not operating under the CBLR framework is presented in the following table:


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under PCA Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of March 31, 2021
Total capital (to risk-weighted assets)
Company	$	1,124,859	13.38	%	$	672,561	8.0	%	n/a		n/a
Bank	998,704		11.89	%	671,962		8.0	%	$	839,953	10.0	%
Tier 1 capital (to risk-weighted assets)
Company	808,338		9.61	%	504,686		6.0	%	n/a		n/a
Bank	914,656		10.89	%	503,943		6.0	%	671,924		8.0	%
Common equity tier 1 (to risk-weighted assets)
Company	779,057		9.27	%	378,183		4.5	%	n/a		n/a
Bank	914,656		10.89	%	377,957		4.5	%	545,938		6.5	%
Tier 1 capital (to average assets)
Company	808,338		9.50	%	340,353		4.0	%	n/a		n/a
Bank	914,656		10.76	%	340,021		4.0	%	425,026		5.0	%
As of December 31, 2020
Total capital (to risk-weighted assets)
Company	$	1,099,031	13.57	%	$	647,918	8.0	%	n/a		n/a
Bank	968,481		11.96	%	647,813		8.0	%	$	809,767	10.0	%
Tier 1 capital (to risk-weighted assets)
Company	782,487		9.66	%	486,017		6.0	%	n/a		n/a
Bank	884,471		10.92	%	485,973		6.0	%	647,964		8.0	%
Common equity tier 1 (to risk-weighted assets)
Company	753,261		9.30	%	364,481		4.5	%	n/a		n/a
Bank	884,471		10.92	%	364,480		4.5	%	526,471		6.5	%
Tier 1 capital (to average assets)
Company	782,487		9.43	%	331,914		4.0	%	n/a		n/a
Bank	884,471		10.66	%	331,884		4.0	%	414,855		5.0	%

Dividend Restrictions — Dividends paid by the Bank are subject to certain restrictions imposed by regulatory agencies. Capital requirements further limit the amount of dividends that may be paid by the Bank. Dividends of $8,440 and $25,000 were paid by the Bank to the Holdco during the three months ended March 31, 2021 and 2020, respectively. Dividends of $8,358, or $0.17 per outstanding share on the applicable record date, were paid by the Company during the three months ended March 31, 2021. Dividends of $8,728, or $0.17 per outstanding share on the applicable record date, were paid by the Company during the three months ended March 31, 2020.

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

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Schedule of Reconciliation Between Weighted Average Shares Used for Calculating Basic and Diluted EPS

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On April 27, 2021, the Company announced the execution by the Bank of a definitive agreement pursuant to which the Bank will acquire a 49% interest in Thrive Mortgage, LLC (“Thrive”) for $53.9 million in cash. Upon completion of the investment, the Company will obtain the right to designate a member to Thrive’s board of directors. The investment, which is expected to close in the middle of 2021, is subject to receipt of required regulatory approvals and other customary closing conditions. Thrive, headquartered in Georgetown, Texas, is a family-owned business and an industry leader in transforming the home financing process into a customer centered digital experience and is the first company in Texas to close a fully electronic note with a remote notary. Thrive’s markets include, among others, Texas, Ohio, Colorado, Kentucky, North Carolina, Kansas, Virginia, Florida, Maryland and Indiana.

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2021
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Veritex Holdings, Inc. and its subsidiaries, including Veritex Community Bank. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), but do not include all of the information and footnotes required for complete financial statements. Intercompany transactions and balances are eliminated in consolidation. In management’s opinion, these unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s condensed consolidated financial position at March 31, 2021 and December 31, 2020, condensed consolidated results of operations for the three months ended March 31, 2021 and 2020, condensed consolidated stockholders’ equity for the three months ended March 31, 2021 and 2020 and condensed consolidated cash flows for the three months ended March 31, 2021 and 2020. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown herein are not necessarily indicative of results to be expected for the full year due in part to global economic and financial market conditions, interest rates, access to sources of liquidity, market competition and interruptions of business processes. These unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Quarterly Reports on Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 26, 2021. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Segment Reporting	Segment Reporting The Company has one reportable segment. All of the Company’s activities are interrelated, and each activity is dependent and assessed based on how each activity of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with deposits and borrowings while managing interest rate and credit risk. Accordingly, all significant operating decisions are based upon an analysis of the Bank as one segment or unit. The Company’s chief operating decision-maker, the Chief Executive Officer, uses the consolidated results to make operating and strategic decisions.
Earnings Per Share ("EPS")	Earnings Per Share (“EPS”)EPS are based upon the weighted average shares outstanding.
Recent Accounting Pronouncements	Recent Accounting Pronouncements ASU 2019-12, "Income Taxes (Topic 740)" ("ASU 2019-12") simplifies the accounting for income taxes by removing certain exceptions and improves the consistent application of GAAP by clarifying and amending other existing guidance. ASU 2019-12 was effective for us on January 1, 2021 and did not have a significant impact on our consolidated financial statements and related disclosures. ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04") amendments provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures. ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs ("ASU 2020-08") clarifies the accounting for the amortization of purchase premiums for callable debt securities with multiple call dates. ASU 2020-08 was effective for us on January 1, 2021 and did not have a significant impact on our consolidated financial statements and related disclosures.

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

The table below sets forth the reconciliation between weighted average shares used for calculating basic and diluted EPS for the three months ended March 31, 2021 and 2020:


	Three Months Ended March 31,
		2021		2020
Earnings (numerator)
Net income		$	31,787	$	4,134


Shares (denominator)
Weighted average shares outstanding for basic EPS		49,394		50,725
Dilutive effect of employee stock-based awards		604		331
Adjusted weighted average shares outstanding		49,998		51,056
EPS:
Basic		$	0.64	$	0.08
Diluted		$	0.64	$	0.08

Supplemental Statement of Cash Flows (Tables)

3 Months Ended

Mar. 31, 2021

Supplemental Cash Flow Elements [Abstract]

Schedule of Other Supplemental Cash Flow Information

Other supplemental cash flow information is presented below:


	Three Months Ended March 31,
	2021		2020
	(in thousands)
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	7,602	$	18,489
Cash paid for income taxes	15		2,330
Supplemental Disclosures of Non-Cash Flow Information:



Net foreclosure of other real estate owned and repossessed assets	—		1,725

Securities (Tables)

3 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Schedule of Gross Unrealized Gain Recognized on Equity Securities

The gross unrealized loss recognized on equity securities with readily determinable fair values recorded in other noninterest income in the Company’s condensed consolidated statements of income were as follows:


	Three Months Ended March 31,
		2021		2020
Unrealized loss recognized on equity securities with a readily determinable fair value		$	199	$	249

Schedule of Carrying Amount and Approximate Fair Values of Available-for-Sale Securities

The amortized cost, related gross unrealized gains and losses, allowance for credit losses and the fair value of available for sale and held to maturity securities are as follows:


	March 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Available for sale

Corporate bonds	$	173,198	$	6,206	$	276	$	—	$	179,128
Municipal securities	117,704		7,579		849		—		124,434
Mortgage-backed securities	249,950		11,748		1,887		—		259,811
Collateralized mortgage obligations	396,158		12,806		1,425		—		407,539
Asset-backed securities	71,367		2,139		467		—		73,039
	$	1,008,377	$	40,478	$	4,904	$	—	$	1,043,951


	March 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Held to maturity
Mortgage-backed securities	$	10,863	$	608	$	99	$	—	$	11,372
Collateralized mortgage obligations	1,547		49		—		—		1,596
Municipal securities	21,499		2,060		—		—		23,559
	$	33,909	$	2,717	$	99	$	—	$	36,527

The Company did not transfer any debt securities from available for sale to held to maturity at fair value during the three months ended March 31, 2021.


	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Available for sale

Corporate bonds	$	173,050	$	6,417	$	1,297	$	—	$	178,170
Municipal securities	115,533		10,129		6		—		125,656
Mortgage-backed securities	240,320		16,047		42		—		256,325
Collateralized mortgage obligations	388,080		20,895		66		—		408,909
Asset-backed securities	52,335		2,934		—		—		55,269
	$	969,318	$	56,422	$	1,411	$	—	$	1,024,329

	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Held to maturity
Mortgage-backed securities	$	6,982	$	849	$	—	$	—	$	7,831
Collateralized mortgage obligations	1,620		103		—		—		1,723
Municipal securities	22,270		2,459		—		—		24,729
	$	30,872	$	3,411	$	—	$	—	$	34,283

Schedule of Investment Securities That Have Been in a Continuous Unrealized Loss Position


	March 31, 2021
	Less Than 12 Months				12 Months or More				Totals
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available for sale

Corporate bonds	$	30,724	$	276	$	—	$	—	$	30,724	$	276
Municipal securities	14,640		806		2,495		43		17,135		849
Mortgage-backed securities	67,186		1,887		—		—		67,186		1,887
Collateralized mortgage obligations	56,420		1,425		—		—		56,420		1,425
Asset-backed securities	11,602		467		—		—		11,602		467
	$	180,572	$	4,861	$	2,495	$	43	$	183,067	$	4,904


	December 31, 2020
	Less Than 12 Months				12 Months or More				Totals
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
Available for sale

Municipal securities	$	2,667	$	6	$	—	$	—	$	2,667	$	6
Corporate bonds	31,953		1,297		—		—		31,953		1,297
Mortgage-backed securities	34,402		108		—		—		34,402		108

	$	69,022	$	1,411	$	—	$	—	$	69,022	$	1,411

Schedule of Amortized Costs and Estimated Fair Values of Securities Available for Sale, By Contractual Maturity

Therefore, these securities are not included in the maturity categories below.


	March 31, 2021
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value

Due from one year to five years	$	5,179	$	5,340	$	—	$	—
Due from five years to ten years	154,476		160,043		3,882		4,177
Due after ten years	131,247		138,179		17,617		19,382
	290,902		303,562		21,499		23,559
Mortgage-backed securities and collateralized mortgage obligations	646,108		667,350		12,410		12,968
Asset-backed securities	71,367		73,039		—		—
	$	1,008,377	$	1,043,951	$	33,909	$	36,527


	December 31, 2020
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value

Due from one year to five years	$	4,935	$	5,139	$	—	$	—
Due from five years to ten years	154,576		158,510		3,334		3,591
Due after ten years	129,072		140,177		18,936		21,138
	288,583		303,826		22,270		24,729
Mortgage-backed securities and collateralized mortgage obligations	628,400		665,234		8,602		9,554
Asset-backed securities	52,335		55,269		—		—
	$	969,318	$	1,024,329	$	30,872	$	34,283

Loans Held for Investment and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Summary of Loans in the Accompanying Consolidated Balance Sheets

Loans held for investment in the accompanying condensed consolidated balance sheets are summarized as follows:


	March 31, 2021		December 31, 2020
Loans held for investment, carried at amortized cost:
Real estate:
Construction and land	$	723,444	$	693,030
Farmland	14,751		13,844
1 - 4 family residential	492,609		524,344
Multi-family residential	386,844		424,962
OOCRE	733,310		717,472
NOOCRE	1,970,945		1,904,132
Commercial	1,632,040		1,559,546
MW	599,001		577,594
Consumer	12,431		13,000
	6,565,375		6,427,924

Deferred loan fees, net	(2,881)		(2,468)
Allowance for credit losses	(104,936)		(105,084)
Loans held for investment carried at amortized cost, net	6,457,558		6,320,372

Loans held for investment, carried at fair value:
PPP loans	407,353		358,042



Total loans held for investment, net	$	6,864,911	$	6,678,414

Schedule of Activity in Allowance for Credit Loss

The activity in the ACL related to loans held for investment is as follows:


	Three Months Ended March 31, 2021
	Construction and Land			Farmland		Residential		Multifamily		OOCRE		NOOCRE		Commercial		Consumer		Total
Balance at beginning of year	$	7,768		$	56	$	8,148	$	6,231	$	9,719	$	35,237	$	37,554	$	371	$	105,084
Credit loss expense non-PCD loans	(949)			(9)		(1,144)		(1,417)		(1,615)		4,074		(1,103)		(54)		(2,217)
Credit loss expense PCD loans	(14)			—		(24)		—		1,018		192		1,050		(5)		2,217
Charge-offs	—			—		(15)		—		—		—		(346)		(18)		(379)
Recoveries	—			—		3		—		—		—		226		2		231
Ending Balance	$	6,805	0	$	47	$	6,968	$	4,814	$	9,122	$	39,503	$	37,381	$	296	$	104,936


	Three Months Ended March 31, 2020
	Construction and Land		Farmland		Residential		Multifamily		OOCRE		NOOCRE		Commercial		Consumer		Total
Balance at beginning of year	$	3,822	$	61	$	1,378	$	1,965	$	1,978	$	8,139	$	12,369	$	122	$	29,834
Impact of adopting ASC 326 non-PCD loans	(707)		4		3,716		628		3,406		5,138		7,025		217		19,427
Impact of adoption ASC 326 PCD loans	645		—		908		—		7,682		2,037		8,335		103		19,710
Credit loss expense non-PCD loans	2,965		(7)		2,488		2,306		918		9,955		10,226		(15)		28,836
Credit loss expense PCD loans	113		—		(173)		—		2,477		412		126		(15)		2,940
Charge-offs	—		—		—		—		—		—		—		(68)		(68)
Recoveries	—		—		1		—		—		—		29		274		304
Ending Balance	$	6,838	$	58	$	8,318	$	4,899	$	16,461	$	25,681	$	38,110	$	618	$	100,983

Schedule of Amortized Cost Basis of Collateral Dependent Loans


	March 31, 2021					December 31, 2020
		Real Property(1)		ACL Allocation			Real Property(1)		ACL Allocation
Real estate:


1 - 4 family residential		$	199	$	13		$	199	$	11


NOOCRE		21,861		2,142			16,080		—
Commercial		7,349		4,184			8,666		4,668

Consumer		—		—			143		50
Total		$	29,409	$	6,339		$	25,088	$	4,729

(1) Loans reported exclude PCD loans that transitioned upon adoption of ASC 326 and accounted for on a pooled basis.

Schedule of Non-Accrual Loans

Nonaccrual loans aggregated by class of loans, as of March 31, 2021 and December 31, 2020, were as follows:


	March 31, 2021				December 31, 2020
	Nonaccrual		Nonaccrual With No ACL			Nonaccrual		Nonaccrual With No ACL
Real estate:


1 - 4 family residential	$	3,282	$	3,173		$	3,308	$	3,199

OOCRE	5,781		4,948			6,266		5,645
NOOCRE	37,131		15,836			40,830		19,213
Commercial	26,177		1,057			29,318		1,015

Consumer	1,223		1,212			1,374		1,220
Total	$	73,594	$	26,226		$	81,096	$	30,292

Schedule of Age Analysis of Past Due Loans, Aggregated by Class of Loans

An age analysis of past due loans, aggregated by class of loans and including past due nonaccrual loans, as of March 31, 2021 and December 31, 2020, is as follows:


	March 31, 2021
	30 to 59 Days		60 to 89 Days		90 Days or Greater		Total Past Due		Total Current		PCD		Total Loans		Total 90 Days Past Due and Still Accruing(1)
Real estate:
Construction and land	$	444	$	—	$	—	$	444	$	720,325	$	2,675	$	723,444	$	—
Farmland	—		—		—		—		14,751		—		14,751		—
1 - 4 family residential	2,820		325		5,073		8,218		475,735		8,656		492,609		1,899
Multi-family residential	—		—		—		—		386,844		—		386,844		—
OOCRE	452		743		451		1,646		693,748		37,916		733,310		—
NOOCRE	505		—		10,429		10,934		1,931,382		28,629		1,970,945		7,040
Commercial	6,878		2,953		14,507		24,338		1,589,177		18,525		1,632,040		73
MW	—		—		—		—		599,001		—		599,001		—
Consumer	115		42		1,215		1,372		10,863		196		12,431		81
Total	$	11,214	$	4,063	$	31,675	$	46,952	$	6,421,826	$	96,597	$	6,565,375	$	9,093

(1) Loans 90 days past due and still accruing excludes $46,722 of pooled PCD loans as of March 31, 2021 that transitioned upon adoption of ASC 326.


	December 31, 2020
	30 to 59 Days		60 to 89 Days		90 Days or Greater		Total Past Due		Total Current		PCD		Total Loans		Total 90 Days Past Due and Still Accruing(1)
Real estate:
Construction and land	$	—	$	—	$	—	$	—	$	690,345	$	2,685	$	693,030	$	—
Farmland	—		—		—		—		13,844		—		13,844		—
1 - 4 family residential	2,338		122		4,802		7,262		508,341		8,741		524,344		1,670
Multi-family residential	—		—		—		—		424,962		—		424,962		—
OOCRE	2,278		2,143		2,814		7,235		672,246		37,991		717,472		1,280
NOOCRE	7,675		2,911		17,586		28,172		1,832,784		43,176		1,904,132		—
Commercial	1,983		1,431		20,360		23,774		1,516,312		19,460		1,559,546		1,230
MW	—		—		—		—		577,594		—		577,594		—
Consumer	75		77		1,338		1,490		11,308		202		13,000		24
Total	$	14,349	$	6,684	$	46,900	$	67,933	$	6,247,736	$	112,255	$	6,427,924	$	4,204

(1) Loans 90 days past due and still accruing excludes $32,627 of PCD loans accounted for on a pooled basis as of December 31, 2020.

Schedule of Loans Modified as TDRs

The following tables presents the pre- and post-modification amortized cost of loans modified as TDRs during the three months ended March 31, 2021 and 2020.


	During the Three Months Ended March 31, 2021
	Adjusted Payment Structure		Payment Deferrals		Total Modifications		Number of Loans






Commercial	$	240	—		$	240	1


Total	$	240	$	—	$	240	1


	During the Three Months Ended March 31, 2020
	Adjusted Payment Structure		Payment Deferrals		Total Modifications		Number of Loans





Commercial real estate	$	—	$	970	$	970	1



Total	$	—	$	970	$	970	1

Summary of Internal Ratings of Loans, Including Purchased Credit Impaired Loans

Based on the most recent analysis performed, the risk category of loans by class of loans based on year or origination is as follows:


	Term Loans Amortized Cost Basis by Origination Year1
	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2021
Construction and land:
Pass	$	37,642	$	205,166	$	282,702	$	125,256	$	9,728	$	37,673	$	20,581	$	—	$	718,748
Special mention	—		—		—		1,511		—		—		—		—		1,511
Substandard	—		—		—		510		—		—		—		—		510
PCD	—		—		—		—		—		2,675		—		—		2,675
Total construction and land	$	37,642	$	205,166	$	282,702	$	127,277	$	9,728	$	40,348	$	20,581	$	—	$	723,444

Farmland:
Pass	$	1,550	$	854	$	526	$	3,367	$	3,650	$	3,606	$	1,198	$	—	$	14,751



Total farmland	$	1,550	$	854	$	526	$	3,367	$	3,650	$	3,606	$	1,198	$	—	$	14,751

1 - 4 family residential:
Pass	$	26,738	$	117,110	$	68,660	$	81,977	$	39,154	$	125,524	$	17,897	$	865	$	477,925
Special mention	—		—		576		153		758		430		—		—		1,917
Substandard	—		—		—		130		1,018		2,039		924		—		4,111
PCD	—		—		—		—		—		8,656		—		—		8,656
Total 1 - 4 family residential	$	26,738	$	117,110	$	69,236	$	82,260	$	40,930	$	136,649	$	18,821	$	865	$	492,609

Multi-family residential:
Pass	$	32,825	$	65,896	$	106,294	$	115,094	$	13,890	$	39,645	$	55	$	—	$	373,699
Special mention	—		—		—		13,145		—		—		—		—		13,145


Total multi-family residential	$	32,825	$	65,896	$	106,294	$	128,239	$	13,890	$	39,645	$	55	$	—	$	386,844

OOCRE:
Pass	$	26,935	$	124,381	$	75,566	$	72,364	$	74,326	$	234,997	$	6,366	$	—	$	614,935
Special mention	—		—		941		22,389		3,698		17,059		—		—		44,087
Substandard	—		421		—		13,156		1,221		15,299		170		6,105		36,372
PCD	—		1,442		—		—		7,338		29,136		—		—		37,916
Total OOCRE	$	26,935	$	126,244	$	76,507	$	107,909	$	86,583	$	296,491	$	6,536	$	6,105	$	733,310

NOOCRE:
Pass	$	79,082	$	361,319	$	250,909	$	470,531	$	111,088	$	445,504	$	15,780	$	—	$	1,734,213
Special mention	—		238		33,501		37,652		17,221		63,581		493		—		152,686
Substandard	—		1,495		9,634		2,783		4,025		24,912		12,568		—		55,417
PCD	—		—		—		18,771		—		9,858		—		—		28,629


Total NOOCRE	$	79,082	$	363,052	$	294,044	$	529,737	$	132,334	$	543,855	$	28,841	$	—	$	1,970,945

Commercial:
Pass	$	142,114	$	221,280	$	155,091	$	90,098	$	51,810	$	53,463	$	782,443	$	12,723	$	1,509,022
Special mention	411		1,303		2,539		8,058		9,963		2,743		4,395		3,565		32,977
Substandard	—		873		3,828		21,840		6,616		4,613		30,473		3,273		71,516
PCD	—		—		—		567		4,787		13,171		—		—		18,525
Total commercial	$	142,525	$	223,456	$	161,458	$	120,563	$	73,176	$	73,990	$	817,311	$	19,561	$	1,632,040

MW:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	596,423	$	—	$	596,423
Special mention	—		—		—		—		—		—		2,578		—		2,578


Total MW	$	—	$	—	$	—	$	—	$	—	$	—	$	599,001	$	—	$	599,001

Consumer:
Pass	$	877	$	2,165	$	1,045	$	898	$	3,690	$	1,219	$	1,062	$	—	$	10,956
Special mention	—		—		—		—		—		95		—		—		95
Substandard	—		—		—		—		59		61		1,064		—		1,184
PCD	—		—		—		—		34		162		—		—		196
Total consumer	$	877	$	2,165	$	1,045	$	898	$	3,783	$	1,537	$	2,126	$	—	$	12,431

Total Pass	$	347,763	$	1,098,171	$	940,793	$	959,585	$	307,336	$	941,631	$	1,441,805	$	13,588	$	6,050,672
Total Special Mention	411		1,541		37,557		82,908		31,640		83,908		7,466		3,565		248,996
Total Substandard	—		2,789		13,462		38,419		12,939		46,924		45,199		9,378		169,110
Total PCD	—		1,442		—		19,338		12,159		63,658		—		—		96,597
Total	$	348,174	$	1,103,943	$	991,812	$	1,100,250	$	364,074	$	1,136,121	$	1,494,470	$	26,531	$	6,565,375

1 Term loans amortized cost basis by origination year excludes $2,881 of deferred loan fees, net.


	Term Loans Amortized Cost Basis by Origination Year1
	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2020
Construction and land:
Pass	$	155,358	$	282,497	$	179,372	$	11,791	$	9,938	$	27,147	$	21,066	$	—	$	687,169
Special mention	—		—		2,666		—		—		—		—		—		2,666
Substandard	—		—		510		—		—		—		—		—		510
PCD	—		—		—		—		—		2,685		—		—		2,685
Total construction and land	$	155,358	$	282,497	$	182,548	$	11,791	$	9,938	$	29,832	$	21,066	$	—	$	693,030

Farmland:
Pass	$	867	$	972	$	3,367	$	3,688	$	—	$	3,656	$	1,294	$	—	$	13,844



Total farmland	$	867	$	972	$	3,367	$	3,688	$	—	$	3,656	$	1,294	$	—	$	13,844

1 - 4 family residential:
Pass	$	120,580	$	79,617	$	91,890	$	49,338	$	31,936	$	115,797	$	19,065	$	2,968	$	511,191
Special mention	—		1,077		154		760		—		687		—		—		2,678
Substandard	—		—		142		668		—		—		924		—		1,734


PCD	—			—			—		—		—		8,741		—		—		8,741
Total 1 - 4 family residential	$	120,580		$	80,694		$	92,186	$	50,766	$	31,936	$	125,225	$	19,989	$	2,968	$	524,344

Multi-family residential:
Pass	$	107,332		$	106,559		$	139,721	$	18,722	$	32,672	$	7,218	$	58	$	—	$	412,282
Special mention	—			—			12,680		—		—		—		—		—		12,680


Total multi-family residential	$	107,332		$	106,559		$	152,401	$	18,722	$	32,672	$	7,218	$	58	$	—	$	424,962

OOCRE:
Pass	$	113,741		$	65,262		$	75,940	$	79,253	$	79,202	$	176,668	$	5,532	$	—	$	595,598
Special mention	—			948			22,725		3,701		12,860		4,326		—		—		44,560
Substandard	370			—			10,579		3,830		11,315		6,822		201		6,206		39,323
PCD	—			—			—		—		7,951		30,040		—		—		37,991
Total OOCRE	$	114,111		$	66,210		$	109,244	$	86,784	$	111,328	$	217,856	$	5,733	$	6,206	$	717,472

NOOCRE:
Pass	$	361,246		$	255,976		$	445,079	$	90,738	$	174,893	$	309,572	$	13,413	$	—	$	1,650,917
Special mention	101			31,714			37,572		19,262		25,997		37,951		493		—		153,090
Substandard	1,226		0	9,850		0	4,562		4,108		—		23,098		14,105		—		56,949
PCD	—			—			18,744		—		6,652		17,780		—		—		43,176
Total NOOCRE	$	362,573		$	297,540		$	505,957	$	114,108	$	207,542	$	388,401	$	28,011	$	—	$	1,904,132

Commercial:
Pass	$	251,004		$	158,158		$	112,961	$	50,734	$	19,821	$	41,856	$	758,832	$	13,400	$	1,406,766
Special mention	1,306			2,539			8,224		10,033		1,201		2,165		26,922		3,670		56,060
Substandard	722			4,487			23,245		3,772		7,216		2,083		30,460		5,275		77,260
PCD	—			—			—		3,382		4,196		11,882		—		—		19,460
Total commercial	$	253,032		$	165,184		$	144,430	$	67,921	$	32,434	$	57,986	$	816,214	$	22,345	$	1,559,546

MW:
Pass	$	—		$	—		$	—	$	—	$	—	$	—	$	577,594	$	—	$	577,594



Total MW	$	—		$	—		$	—	$	—	$	—	$	—	$	577,594	$	—	$	577,594

Consumer:
Pass	$	2,489		$	1,216		$	1,038	$	3,899	$	887	$	353	$	1,475	$	—	$	11,357
Special mention	—			—			—		—		25		227		—		—		252
Substandard	—			—			—		60		—		66		1,063		—		1,189
PCD	—			—			—		36		—		166		—		—		202
Total consumer	$	2,489		$	1,216		$	1,038	$	3,995	$	912	$	812	$	2,538	$	—	$	13,000

Total Pass	$	1,112,617		$	950,257		$	1,049,368	$	308,163	$	349,349	$	682,267	$	1,398,329	$	16,368	$	5,866,718
Total Special Mention	1,407			36,278			84,021		33,756		40,083		45,356		27,415		3,670		271,986
Total Substandard	2,318			14,337			39,038		12,438		18,531		32,069		46,753		11,481		176,965
Total PCD	—			—			18,744		3,418		18,799		71,294		—		—		112,255
Total	$	1,116,342		$	1,000,872		$	1,191,171	$	357,775	$	426,762	$	830,986	$	1,472,497	$	31,519	$	6,427,924

1 Term loans amortized cost basis by origination year excludes $2,468 of deferred loan fees, net.

Schedule of Summary of Changes in Servicing Assets

A summary of the changes in the related servicing assets are as follows:


	Three Months Ended March 31,
		2021		2020
Balance at beginning of period		$	3,363	$	3,113

Increase from loan sales		—		109
Net recoveries		128		—
Amortization charged as a reduction to income		(89)		(232)
Balance at end of period		$	3,402	$	2,990

Fair Value (Tables)

3 Months Ended

Mar. 31, 2021

Schedule of Assets Measured at Fair Value on a Recurring Basis


	March 31, 2021
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
Available for sale debt securities	$	—	$	1,043,951	$	—	$	1,043,951
Equity securities with a readily determinable fair value	11,164		—		—		11,164
PPP loans	—		407,353		—		407,353
Loans held for sale(1)	—		7,628		—		7,628
Interest rate swap designated as hedging instruments	—		1,839		—		1,839
Correspondent interest rate swaps not designated as hedging instruments	—		1,307		—		1,307
Customer interest rate swaps not designated as hedging instruments	—		5,548		—		5,548
Correspondent interest rate caps and collars not designated as hedging instruments	—		1		—		1

Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	2,124	$	—	$	2,124
Correspondent interest rate swaps not designated as hedging instruments	—		5,844		—		5,844
Customer interest rate swaps not designated as hedging instruments	—		1,248		—		1,248

Customer interest rate caps and collars not designated as hedging instruments	—		1		—		1

(1) Represents loans held for sale elected to be carried at fair value upon origination or acquisition.


	December 31, 2020
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial Assets:
Available for sale debt securities	$	—	$	1,024,329	$	—	$	1,024,329
Equity securities with a readily determinable fair value	11,363		—		—		11,363
PPP loans	—		358,042		—		358,042
Loans held for sale(1)	—		6,681		—		6,681
Interest rate swap designated as hedging instruments	—		17,543		—		17,543
Customer interest rate swaps not designated as hedging instruments	—		10,937		—		10,937
Correspondent interest rate caps and collars not designated as hedging instruments	—		1		—		1

Financial Liabilities:
Interest rate swap designated as hedging instruments	$	—	$	2,255	$	—	$	2,255
Correspondent interest rate swaps not designated as hedging instruments	—		11,666		—		11,666
Customer interest rate caps and collars not designated as hedging instruments	—		1		—		1

(1) Represents loans held for sale elected to be carried at fair value upon origination or acquisition.

Schedule of Assets Measured at Fair Value on a Non-Recurring Basis


	Fair Value Measurements Using
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
As of March 31, 2021
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	8,986	$	8,986
Servicing assets with a valuation allowance	—		—		2,739		2,739
As of December 31, 2020
Assets:
Collateral dependent loans with an ACL	$	—	$	—	$	2,386	$	2,386
Servicing assets with a valuation allowance	—		—		2,975		2,975

Schedule of Estimated Fair Values and Carrying Values of All Financial Instruments


			Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
March 31, 2021
Financial assets:
Cash and cash equivalents	$	468,029	$	—	$	468,029	$	—
Held to maturity debt securities	33,909		—		36,527		—
Loans held for sale(1)	12,236		—		12,236		—


Loans held for investment(2)	6,442,233		—		—		6,491,166
Accrued interest receivable	27,661		—		27,661		—
Bank-owned life insurance	83,318		—		83,318		—
Servicing asset	624		—		624		—
Equity securities without a readily determinable fair value	3,575		N/A		N/A		N/A
FHLB and FRB stock	71,469		N/A		N/A		N/A
Financial liabilities:
Deposits	$	6,904,570	$	—	$	6,794,051	$	—
Advances from FHLB	777,679		—		791,021		—
Accrued interest payable	2,132		—		2,132		—
Subordinated debentures and subordinated notes	262,774		—		262,774		—
Securities sold under agreement to repurchase	2,777		—		2,727		—

December 31, 2020
Financial assets:
Cash and cash equivalents	$	230,825	$	—	$	230,825	$	—
Held to maturity debt securities	30,872		—		34,283		—
Loans held for sale(1)	14,733		—		14,733		—

Loans held for investment(2)	6,317,986		—		—		6,335,402
Accrued interest receivable	23,798		—		23,798		—
Bank-owned life insurance	82,855		—		82,855		—
Servicing asset	388		—		486		—
Equity securities without a readily determinable fair value	3,575		N/A		N/A		N/A
FHLB and FRB stock	71,236		N/A		N/A		N/A
Financial liabilities:
Deposits	$	6,512,846	$	—	$	6,608,849	$	—
Advances from FHLB	777,718		—		782,321		—
Accrued interest payable	2,665		—		2,665		—
Subordinated debentures and subordinated notes	262,778		—		262,778		—
Securities sold under agreement to repurchase	2,225		—		2,199		—

(1) Loans held for sale represent mortgage loans held for sale that are carried at lower of cost or market.

(2) Loans held for investment includes MW and is carried at amortized cost.

Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Balance Sheet

The notional amounts and estimated fair values as of March 31, 2021 and December 31, 2020 are as shown in the table below.


	March 31, 2021						December 31, 2020
			Estimated Fair Value						Estimated Fair Value
	Notional Amount		Asset Derivative		Liability Derivative		Notional Amount		Asset Derivative		Liability Derivative
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on borrowing advances	$	—	$	—	$	—	$	500,000	$	17,543	$	—
Interest rate swap on money market deposit account payments	250,000		1,839		—		250,000		—		2,255
Interest rate swap on customer loan interest payments	125,000		—		1,140		—		—		—
Interest rate swap on customer loan interest payments	125,000		—		792		—		—		—
Interest rate swap on customer loan interest payments	125,000		—		192		—		—		—
Total derivatives designated as hedging instruments	$	625,000	$	1,839	$	2,124	$	750,000	$	17,543	$	2,255

Derivatives not designated as hedging instruments:
Financial institution counterparty:
Interest rate swaps	$	236,551	$	1,307	$	5,844	$	303,918	$	—	$	11,666
Interest rate caps and collars	41,916		1		—		41,916		1		—
Commercial customer counterparty:
Interest rate swaps	236,551		5,548		1,248		303,918		10,937		—
Interest rate caps and collars	41,916		—		1		41,916		—		1
Total derivatives not designated as hedging instruments	$	556,934	$	6,856	$	7,093	$	691,668	$	10,938	$	11,667
Offsetting derivative assets/liabilities			(2,466)		(2,466)				1		1
Total derivatives	$	1,181,934	$	6,229	$	6,751	$	1,441,668	$	28,482	$	13,923

Derivative Instruments, Gain (Loss)

Pre-tax gain (loss) included in the condensed consolidated statements of income and related to derivative instruments for the three months ended March 31, 2021 and 2020 were as follows.


	For the Three Months Ended March 31, 2021						For the Three Months Ended March 31, 2020
	Gain (loss) recognized in other comprehensive income on derivative		Gain (loss) reclassified from accumulated other comprehensive income into income		Location of gain (loss) reclassified from accumulated other comprehensive income into income		Gain recognized in other comprehensive income on derivative		Gain (loss) reclassified from accumulated other comprehensive income into income		Location of gain (loss) reclassified from accumulated other comprehensive income into income
Derivatives designated as hedging instruments (cash flow hedges):
Interest rate swap on borrowing advances	$	26,357	$	—	Interest Expense		$	1,022	$	284	Interest Expense
Interest rate swap on money market deposit account payments	3,895		(199)		Interest Expense		2,710		—		Interest Income
Commercial loan interest rate floor	—		541		Interest Income		—		—
Interest rate swaps on customer loan interest payments	(2,981)		224		Interest Income		—		—
Total	$	27,271	$	566			$	3,732	$	284

					Net gain recognized in other noninterest income						Net gain recognized in other noninterest income
Derivatives not designated as hedging instruments:
Interest rate swaps, caps and collars					$	98					$	501

Schedule of Derivative Instruments Outstanding

The following is a summary of the interest rate swaps, caps and collars outstanding as of March 31, 2021 and December 31, 2020.


	March 31, 2021
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
Non-hedging derivative instruments:
Customer interest rate derivative:
Interest rate swaps - receive fixed/pay floating	$	236,551	3.140% - 8.470%	LIBOR 1 month + 0% - 5.00%	Wtd. Avg. 5.1 years	$	(4,537)
Interest rate caps and collars	$	41,916	3.000% / 5.000%	LIBOR 1 month + —%- 2.5%	Wtd. Avg. 1.3 years	$	1

Correspondent interest rate derivative:
Interest rate swaps - pay fixed/receive floating	$	236,551	3.140% - 8.470%	LIBOR 1 month + —% - 5.00%	Wtd. Avg. 5.1 years	$	4,301
Interest rate caps and collars	$	41,916	2.500% / 3.000%	LIBOR 1 month + 0%	Wtd. Avg. 1.3 years	$	(1)

	December 31, 2020
	Notional Amount		Fixed Rate	Floating Rate	Maturity	Fair Value
Non-hedging derivative instruments:
Customer interest rate derivative:
Interest rate swaps - receive fixed/pay floating	$	303,918	3.140% - 8.470%	LIBOR 1 month + —% - 5.00% PRIME H15 - 0.250%	Wtd. Avg. 4.1 years	$	(11,666)
Interest rate caps and collars	$	41,916	2.500% / 3.000%	LIBOR 1 month + —%	Wtd. Avg. 1.6 years	$	1

Correspondent interest rate derivative:
Interest rate swaps - pay fixed/receive floating	$	303,918	3.140% - 8.470%	LIBOR 1 month + —% - 5.00% PRIME H15 - 25	Wtd. Avg. 4.1 years	$	10,937
Interest rate caps and collars	$	41,916	3.000% / 5.000%	LIBOR 1 month + —% - 2.5%	Wtd. Avg. 1.6 years	$	(1)

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

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Off-Balance Sheet Loan Commitments (Tables)

3 Months Ended

Mar. 31, 2021

Schedule of the Approximate Amounts of Financial Instruments with Off-Balance Sheet Risk

The following table sets forth the approximate amounts of these financial instruments as of March 31, 2021 and December 31, 2020:


	March 31,		December 31,
	2021		2020
Commitments to extend credit	$	3,075,949	$	2,743,571
MW commitments	353,884		354,603
Standby and commercial letters of credit	50,243		44,427
Total	$	3,480,076	$	3,142,601

Schedule of Allowance for Unfunded Commitments

This allowance is recorded in accounts payable and other liabilities on the condensed consolidated balance sheets:


	Three Months Ended March 31,
		2021		2020
Beginning balance for allowance for credit losses on unfunded commitments		$	10,747	$	878
Impact of CECL adoption		—		840
Provision for credit losses on unfunded commitments		(570)		3,881
Ending balance of allowance for credit losses on unfunded commitments		$	10,177	$	5,599

Stock-Based Awards (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Summary of Option Activity

A summary of option activity under the 2010 Incentive Plan for the three months ended March 31, 2021 and 2020, and changes during the periods then ended, is presented below:


	2010 Incentive Plan
	Non-Performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	257,500	$	10.28	1.37 years



Exercised	(202,500)	10.14
Outstanding and exercisable at March 31, 2020	55,000	$	10.77	2.02 years


Outstanding at January 1, 2021	20,000	$	10.09	1.06 years	$	374



Exercised	(18,300)	10.00
Outstanding and exercisable at March 31, 2021	1,700	$	10.37	1.69 years	$	127

A summary of the status of the Company’s stock options under the 2019 Amended Plan as of March 31, 2021 and 2020, and changes during the three months then ended, is as follows:


	2019 Amended Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	849,768	$	23.61	8.24 years
Granted	144,025	29.13

Forfeited	(21,891)	28.17

Exercised	(33,439)	19.19
Outstanding at March 31, 2020	938,463	$	24.51	8.28 years
Options exercisable at March 31, 2020	469,983	$	24.15	7.50 years

Outstanding at January 1, 2021	975,801	$	24.26


Forfeited	(13,996)	25.93

Exercised	(71,479)	23.03
Outstanding at March 31, 2021	890,326	$	24.34	7.54 years	$	7,463
Options exercisable at March 31, 2021	560,176	$	24.31	7.07 years	$	4,709

A summary of the status of the Company’s stock options under the Veritex (Green) 2014 Plan as of March 31, 2021 and 2020, and changes during the three months then ended, is as follows:



	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	386,969	$	19.30

Granted	31,075	29.13
Forfeited	(23,736)	21.38

Exercised	(32,526)	19.81
Outstanding at March 31, 2020	361,782	$	19.97	7.77 years
Options exercisable at March 31, 2020	214,342	$	17.87	6.94 years

Outstanding at January 1, 2021	352,000	$	19.99	6.97 years	$	2,124


Forfeited	(3,960)	21.38

Exercised	(54,241)	19.77
Outstanding at March 31, 2021	293,799	$	20.01	6.65 years	$	3,748
Options exercisable at March 31, 2021	222,312	$	18.84	6.19 years	$	3,080

A summary of the status of the Company’s stock options under the Green 2010 Plan as of March 31, 2021 and 2020, and changes during the three months then ended, is as follows:


	Green 2010 Plan
	Non-performance Based Stock Options
	Shares Underlying Options	Weighted Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	571,735	$	10.64



Exercised	(386,960)	10.35
Outstanding at March 31, 2020	184,775	$	11.24	4.09 years

Outstanding at January 1, 2021	131,083	$	11.60



Exercised	(62,000)	10.50
Outstanding at March 31, 2021	69,083	$	12.59	2.90 years	$	1,391

Schedule of Fair Value of Stock Options Exercised or Restricted Stock Units Vested

A summary of the fair value of the Company’s stock options exercised under the 2010 Incentive Plan for the three months ended March 31, 2021 and 2020 is presented below:


	Fair Value of Options Exercised as of March 31,
	2021	2020
Nonperformance-based stock options exercised	543	5,745

A summary of the fair value of the Company’s stock options exercised, RSUs and PSUs vested under the 2019 Amended Plan during the three months ended March 31, 2021 and 2020 is presented below:


	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2021	2020
Non-performance-based stock options exercised	2,090	943
RSUs vested	1,113	116
PSUs vested	—	18

A summary of the fair value of the Company’s stock options exercised and RSUs vested under the Veritex (Green) 2014 Plan during the three months ended March 31, 2021 and 2020 presented below:


	Fair Value of Options Exercised or RSUs Vested in the Three Months Ended March 31,
	2021		2020
Non-performance-based stock options exercised	$	1,582	$	950
RSUs vested	713		142

A summary of the fair value of the Company’s stock options exercised under the Green 2010 Plan during the three months ended March 31, 2021 and 2020 presented below:


	Fair Value of Options Exercised as of March 31,
	2021	2020
Nonperformance-based stock options exercised	1,812	11,259

Schedule of Share-based Compensation Expense

Stock compensation expense for options, RSUs and PSUs granted under the 2019 Amended Plan and the Veritex (Green) 2014 Plan were as follows:


	Three months ended March 31,
	2021		2020
2019 Amended Plan	$	1,981	$	1,488
Veritex (Green) 2014 Plan	497		470

Summary of Status of the Company's Restricted Shares or Restricted Stock Units

A summary of the status of the Company’s RSUs under the 2019 Amended Plan as of March 31, 2021 and 2020, and changes during the three months then ended, is as follows:


	2019 Amended Plan

	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2020	175,688	$	21.65
Granted	95,885	29.10

Vested into shares	(46,926)	28.99

Outstanding at March 31, 2020	224,647	$	24.97

Outstanding at January 1, 2021	441,132	$	20.39
Granted	232,149	26.38

Vested into shares	(41,362)	23.29

Outstanding at March 31, 2021	631,919	$	22.40

A summary of the status of the Company’s PSUs under the 2019 Amended Plan as of March 31, 2021 and 2020, and changes during the three months then ended, is as follows:


	2019 Amended Plan

	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2020	63,727	$	22.76
Granted	39,398	29.13

Vested into shares	(1,841)	26.65

Outstanding at March 31, 2020	101,284	$	25.22

Outstanding at January 1, 2021	100,195	$	23.20
Granted	56,276	26.12



Outstanding at March 31, 2021	156,471	$	24.23

A summary of the status of the Company’s RSUs under the Veritex (Green) 2014 Plan as of March 31, 2021 and 2020 and changes during the three months then ended, is as follows:




	RSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2020	116,250	$	21.38
Granted	33,918	29.13
Vested into shares	(38,744)	29.13
Forfeited	(3,492)	29.13
Outstanding at March 31, 2020	107,932	$	24.45

Outstanding at January 1, 2021	156,187	$	21.15
Granted	5,692	26.12
Vested into shares	(33,335)	21.38
Forfeited	(2,646)	24.25
Outstanding at March 31, 2021	125,898	$	21.25

A summary of the status of the Company’s PSUs under the Veritex (Green) 2014 Plan as of March 31, 2021 and 2020 and changes during the three months then ended, is as follows:




	PSUs
	Units	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2020	25,320	$	21.38
Granted	8,531	29.13


Outstanding at March 31, 2020	33,851	$	23.33

Outstanding at January 1, 2021	30,728	$	21.43
Granted	6,231	26.12

Forfeited	(724)	19.69
Outstanding at March 31, 2021	36,235	$	22.27

Income Taxes (Tables)

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Income Tax Expense

Income tax expense for the three months ended March 31, 2021 and 2020 was as follows:


	Three Months Ended March 31,
		2021			2020
Income tax expense (benefit) for the period		$	8,993		$	(684)
Effective tax rate		22.1		%	(19.8)		%

Capital Requirements and Restrictions on Retained Earnings (Tables)

3 Months Ended

Mar. 31, 2021

Banking and Thrift [Abstract]

Schedule of Comparison of the Company's and Bank's Actual Capital Amounts and Ratios to Required Capital Amounts and Ratios


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under PCA Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of March 31, 2021
Total capital (to risk-weighted assets)
Company	$	1,124,859	13.38	%	$	672,561	8.0	%	n/a		n/a
Bank	998,704		11.89	%	671,962		8.0	%	$	839,953	10.0	%
Tier 1 capital (to risk-weighted assets)
Company	808,338		9.61	%	504,686		6.0	%	n/a		n/a
Bank	914,656		10.89	%	503,943		6.0	%	671,924		8.0	%
Common equity tier 1 (to risk-weighted assets)
Company	779,057		9.27	%	378,183		4.5	%	n/a		n/a
Bank	914,656		10.89	%	377,957		4.5	%	545,938		6.5	%
Tier 1 capital (to average assets)
Company	808,338		9.50	%	340,353		4.0	%	n/a		n/a
Bank	914,656		10.76	%	340,021		4.0	%	425,026		5.0	%
As of December 31, 2020
Total capital (to risk-weighted assets)
Company	$	1,099,031	13.57	%	$	647,918	8.0	%	n/a		n/a
Bank	968,481		11.96	%	647,813		8.0	%	$	809,767	10.0	%
Tier 1 capital (to risk-weighted assets)
Company	782,487		9.66	%	486,017		6.0	%	n/a		n/a
Bank	884,471		10.92	%	485,973		6.0	%	647,964		8.0	%
Common equity tier 1 (to risk-weighted assets)
Company	753,261		9.30	%	364,481		4.5	%	n/a		n/a
Bank	884,471		10.92	%	364,480		4.5	%	526,471		6.5	%
Tier 1 capital (to average assets)
Company	782,487		9.43	%	331,914		4.0	%	n/a		n/a
Bank	884,471		10.66	%	331,884		4.0	%	414,855		5.0	%

Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 branch office segment shares	Mar. 31, 2020 USD ($) shares
Segment Reporting Information [Line Items]
Number of reportable segments \| segment	1
Gain on sale of mortgage loans held for sale		$ 746
Reclassification of net gain on sales of loans and other assets to government guaranteed loan income		439
Reclassification of net gain on sales of loans and other assets to gain on sale of mortgage loans		142
Reclassification of net gain on sales of loans and other assets to other income		165
Reclassification of rental income		$ 551
Excluded from diluted EPS weighted average shares (in shares) \| shares	75	1,341
Restricted Stock Units
Segment Reporting Information [Line Items]
Excluded from diluted EPS weighted average shares (in shares) \| shares	23
Employee Stock Options
Segment Reporting Information [Line Items]
Excluded from diluted EPS weighted average shares (in shares) \| shares	52
Dallas-Fort Worth
Segment Reporting Information [Line Items]
Number of branches \| branch	25
Number of mortgage offices \| office	1
Houston
Segment Reporting Information [Line Items]
Number of branches \| branch	12
Louisville, Kentucky
Segment Reporting Information [Line Items]
Number of branches \| branch	1

Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings (numerator)
Net income	$ 31,787	$ 4,134
Shares (denominator)
Weighted average shares outstanding for basic EPS (in shares)	49,394	50,725
Dilutive effect of employee stock based awards (in shares)	604	331
Adjusted weighted average shares outstanding (in shares)	49,998	51,056
EPS:
Basic (in dollars per share)	$ 0.64	$ 0.08
Diluted (in dollars per share)	$ 0.64	$ 0.08

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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