vbtx-20210727
0001501570false00015015702021-07-272021-07-27

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): July 27, 2021


VERITEX HOLDINGS, INC.
(Exact name of Registrant as specified in its charter) 
 
Texas 001-36682 27-0973566
(State or other jurisdiction of
incorporation or organization)
 (Commission File Number) (I.R.S. Employer
Identification Number)
 
8214 Westchester Drive, Suite 800
Dallas, Texas 75225
(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:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareVBTXNasdaq Global Market


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 2.02 Results of Operations and Financial Condition
 
On July 27, 2021, Veritex Holdings, Inc. (the “Company”), the holding company for Veritex Community Bank (the “Bank”), a Texas state chartered bank, issued a press release describing its results of operations for the second quarter ended June 30, 2021. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

    As provided in General Instruction B.2 to Form 8-K, the information furnished in this Item 2.02 (including 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 (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 7.01 Regulation FD Disclosure
On Wednesday, July 28, 2021 at 8:30 a.m., Central Time, the Company will host an investor conference call and webcast to review its second quarter financial results. The webcast will include a slide presentation that consists of information regarding the Company’s operating and growth strategies and financial performance. The presentation materials will be posted on the Company’s website on July 27, 2021. The presentation materials are attached hereto as Exhibit 99.2 and are incorporated herein by reference.
    As provided in General Instruction B.2 to Form 8-K, the information furnished in this Item 7.01 (including Exhibit 99.2) of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of 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 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01 Other Events
    On July 27, 2021, the Company issued a press release announcing the declaration of a quarterly cash dividend of $0.20 per share on its outstanding common stock. The dividend will be paid on or after August 19, 2021 to shareholders of record as of the close of business on August 5, 2021. The press release is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
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, 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
 
 
104Cover 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:July 27, 2021
 


Document
Exhibit 99.1
VERITEX HOLDINGS, INC. REPORTS SECOND QUARTER OPERATING RESULTS

Dallas, TX — July 27, 2021 —Veritex Holdings, Inc. (“Veritex” or the “Company”) (Nasdaq: VBTX), the holding company for Veritex Community Bank, today announced the results for the quarter ended June 30, 2021.
“Our second quarter of 2021 was another outstanding financial and growth quarter for our Company. The investments made over the last two plus years, including our strategic merger with Green in 2019 and targeted talent hires, continue to deliver the benefits we expected. Our 21% Q2-21 annualized loan growth, record Q2-21 loan production of $1.4 billion, strengthening loan pipelines and improving credit profile make us optimistic about the second half of the year. In addition to a strong quarter, we are pleased to announce the completion of our 49% investment in Thrive Mortgage and an 18% increase in our quarterly dividend.”

Second Quarter Highlights

Net income of $29.5 million, or $0.59 diluted earnings per share (“EPS”), compared to $31.8 million, or $0.64 diluted EPS, for the quarter ended March 31, 2021 and $24.0 million, or $0.48 diluted EPS, for the quarter ended June 30, 2020;
Operating earnings1 of $30.0 million, or $0.60 diluted operating EPS1, compared to $32.2 million, or $0.64 diluted operating EPS1, for the quarter ended March 31, 2021 and $21.2 million, or $0.43 diluted operating EPS1, for the quarter ended June 30, 2020;
Total loans held for investment (“LHI”), excluding mortgage warehouse (“MW”) and Paycheck Protection Program (“PPP”) loans, grew $308.6 million from the first quarter of 2021, or 20.7% annualized;
Total LHI, excluding MW and PPP, grew $424.2 million from December 31, 2020, or 14.5% annualized, and $545.2 million, or 9.5%, year over year.
Total deposits grew $74.3 million from the first quarter of 2021, or 4.3% annualized, with the average cost of total deposits decreasing to 0.23% for the three months ended June 30, 2021 from 0.31% for the three months ended March 31, 2021;
Total noninterest-bearing deposits grew $216.3 million from the first quarter of 2021, representing 34.2% of total deposits as of June 30, 2021;
Book value per common share increased to $25.72 from $24.96 as of March 31, 2021 and tangible book value per common share1 increased to $17.16 from $16.34 as of March 31, 2021; and
Declared quarterly cash dividend of $0.20 per share of outstanding common stock, an increase of 17.6% over the first quarter of 2021, payable on August 19, 2021.

QTDYTD
Financial HighlightsQ2 2021Q1 2021Q2 2021Q2 2020
(Dollars in thousands)
(unaudited)
GAAP
Net income$29,456 $31,787 $61,243 $28,162 
Diluted EPS0.59 0.64 1.22 0.56 
Book value per common share25.72 24.96 25.72 23.45 
Return on average assets2
1.27 %1.44 %1.35 %0.68 %
Efficiency ratio52.42 49.62 51.01 46.76 
Non-GAAP1
Operating earnings$29,952 $32,213 $62,165 $25,322 
Diluted operating EPS0.60 0.64 1.24 0.50 
Tangible book value per common share17.16 16.34 17.16 14.71 
Pre-tax, pre-provision operating earnings38,497 40,210 78,707 84,775 
Pre-tax, pre-provision operating return on average assets2
1.66 %1.82 %1.74 %2.03 %
Operating return on average assets2
1.29 1.46 1.37 0.61 
Operating efficiency ratio51.63 49.62 50.62 46.62 
Return on average tangible common equity2
15.18 17.17 16.15 9.12 
Operating return on average tangible common equity2
15.42 17.39 16.38 8.31 
1 Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of these non-generally accepted accounting principles (“GAAP”) financial measures to their most directly comparable GAAP measures.
2 Annualized ratio.

1


Results of Operations for the Three Months Ended June 30, 2021
Net Interest Income
For the three months ended June 30, 2021, net interest income before provision for credit losses was $67.1 million and net interest margin was 3.11% compared to $65.6 million and 3.22%, respectively, for the three months ended March 31, 2021. Net interest margin decreased 11 basis points from the three months ended March 31, 2021 primarily due to a decrease in the average yields earned on loans, partially offset by a decrease in the average rates paid on interest-bearing demand and savings deposits and certificate and other time deposits for the three months ended June 30, 2021. As a result, the average cost of interest-bearing deposits decreased 10 basis points to 0.35% for the three months ended June 30, 2021 from 0.45% for the three months ended March 31, 2021.
Net interest income before provision for credit losses increased by $1.4 million from $65.8 million to $67.1 million and net interest margin decreased by 20 basis points from 3.31% to 3.11% for the three months ended June 30, 2021 as compared to the same period in 2020. The increase in net interest income before provision for credit losses was primarily due to a $4.1 million decrease in interest expense on certificate and other time deposits, partially offset by a $2.6 million decrease in interest income on loans during the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Net interest margin decreased 20 basis points from the three months ended June 30, 2020 primarily due to a decrease in the average yields earned on loans, partially offset by decreases in the average rate paid on interest-bearing demand and savings deposits and certificates and other time deposits for the three months ended June 30, 2021. As a result, the average cost of interest-bearing deposits decreased 49 basis points to 0.35% for the three months ended June 30, 2021 from 0.84% for the three months ended June 30, 2020.

Noninterest Income
Noninterest income for the three months ended June 30, 2021 was $12.5 million, a decrease of $1.7 million, or 12.1%, compared to the three months ended March 31, 2021. The decrease was primarily due to a $3.1 million decrease in government guaranteed loan income, net, driven by a $5.6 million decrease in fee income earned on PPP loans during the three months ended June 30, 2021 compared to the three months ended March 31, 2021. This decrease was partially offset by a $2.0 million increase in gain on sale of Small Business Administration (“SBA”) loans during the three months ended June 30, 2021. The decrease in noninterest income was partially offset by a $663 thousand increase in insurance income recognized during the three months ended June 30, 2021 associated with the Company’s bank owned life insurance policy.
Compared to the three months ended June 30, 2020, noninterest income for the three months ended June 30, 2021 decreased by $8.8 million, or 41.5%. The decrease was primarily due to a $7.6 million decrease in government guaranteed loan income, net, driven by an $11.5 million decrease in fee income earned on PPP loans during the three months ended June 30, 2021 compared the same period in 2020, partially offset by a $2.6 million increase in the valuation of PPP loans held at fair value and a $2.0 million increase in gain on sale of SBA loans during the three months ended June 30, 2021 compared to the same period in 2020. The decrease was also due in part to a $2.9 million decrease in gain on sales of investment securities during the three months ended June 30, 2021 compared to the same period in 2020. This decrease was partially offset by $811 thousand increase in insurance income recognized during the three months ended June 30, 2021 associated with the Company’s bank owned life insurance policy.

Noninterest Expense
Noninterest expense was $41.7 million for the three months ended June 30, 2021, compared to $39.6 million for the three months ended March 31, 2021, an increase of $2.1 million, or 5.4%. The increase was primarily driven by a $932 thousand increase in marketing expenses as a result of increased advertising and Community Reinvestment Act donations, a $627 thousand increase in severance payments made as a result of branch restructurings, a $203 thousand increase in write downs of certain other real estate owned properties and a $194 thousand increase in loan related legal expenses during the three months ended June 30, 2021 compared to the three months ended March 31, 2021.
2


Compared to the three months ended June 30, 2020, noninterest expense for the three months ended June 30, 2021 increased by $1.7 million, or 4.1%. The increase was primarily driven by a $3.4 million increase in salaries and employee benefits as a result of a $1.6 million increase in accrued employee bonus, a $1.4 million increase in salaries and a $786 thousand increase in employee stock based compensation during the three months ended June 30, 2021 compared to the same period in 2020. The increase was also driven by a $1.3 million increase in marketing expenses as a result of increased advertising during the three months ended June 30, 2021 compared to the same period in 2020. These increases were partially offset by a $1.2 million decrease in COVID-19 expenses and a $1.6 million decrease in debt extinguishment costs, which were both incurred during the three months ended June 30, 2020 with no corresponding expense during the same period in 2021.

Financial Condition
Total LHI, excluding MW and PPP, were $6.3 billion, an increase of $308.6 million, or 20.7%, annualized, compared to March 31, 2021. Total loans were $7.1 billion at June 30, 2021, an increase of $145.8 million, or 8.3% annualized, compared to March 31, 2021. The increases were the result of the continued execution and success of our loan growth strategy.
Total deposits were $7.0 billion at June 30, 2021, an increase of $74.3 million, or 4.3% annualized, compared to March 31, 2021. The increase was primarily the result of an increase of $216.3 million in noninterest-bearing demand deposits, partially offset by a decrease of $76.7 million in interest-bearing transaction and savings deposits and a decrease of $65.3 million in certificates and other time deposits.

Asset Quality
NPAs totaled $79.9 million, or 0.85% of total assets at June 30, 2021, compared to $85.0 million, or 0.92% of total assets, at March 31, 2021. Included in NPAs as of June 30, 2021 is $462 thousand of accruing loans 90 or more days past due that are considered well-secured and in the process of collection which is down from $9.1 million as of March 31, 2021. The Company’s net charge-offs for the three months ended June 30, 2021 were $5.4 million, which were fully reserved against in prior periods.
The Company recorded no provision for credit losses for the three months ended June 30, 2021 and March 31, 2021, compared to $16.2 million for the three months ended June 30, 2020. The decrease in the recorded provision for credit losses for the three months ended June 30, 2021, compared to the three months ended June 30, 2020, was primarily attributable to improvement in the Texas economic forecasts used in the Current Expected Credit Losses (“CECL”) model in the second quarter of 2021 to reflect the expected impact of the COVID-19 pandemic as of June 30, 2021, as compared to our Texas economic forecasts and expected impact of the COVID-19 pandemic as of June 30, 2020. In the second quarter of 2021, we also recorded a $577 thousand provision for unfunded commitments, which was attributable to higher unfunded balances.
ACL as a percentage of LHI, excluding MW and PPP loans, was 1.59%, 1.76% and 2.01% at June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

Dividend Information

On July 27, 2021, Veritex’s Board of Directors declared a quarterly cash dividend of $0.20 per share on its outstanding shares of common stock. The dividend will be paid on or after August 19, 2021 to stockholders of record as of the close of business on August 5, 2021.

Non-GAAP Financial Measures
Veritex’s management uses certain non-GAAP (U.S. generally accepted accounting principles) financial measures to evaluate its operating performance and provide information that is important to investors. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, Veritex’s reported results prepared in accordance with GAAP. Specifically, Veritex reviews and reports tangible book value per common share, operating earnings, tangible common equity to tangible assets, return on average tangible common equity, pre-tax, pre-provision operating earnings, pre-tax, pre-provision operating return on average assets, diluted operating earnings per share, operating return on average assets, operating return on average tangible common equity and operating efficiency ratio. Veritex has included in this earnings release information related to these non-GAAP financial measures for the applicable periods presented. Please refer to “Reconciliation of Non-GAAP Financial Measures” after the financial highlights at the end of this earnings release for a reconciliation of these non-GAAP financial measures.
3


Conference Call
The Company will host an investor conference call to review the results on Wednesday, July 28, 2021 at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/zs89r9jr and will receive a unique PIN, which can be used when dialing in for the call. This will allow attendees to access the call immediately. Alternatively, participants may call toll-free at (877) 703-9880.

The call and corresponding presentation slides will be webcast live on the home page of the Company's website, https://ir.veritexbank.com/. An audio replay will be available one hour after the conclusion of the call at (855) 859-2056, Conference
#3492033. This replay, as well as the webcast, will be available until August 4, 2021.

About Veritex Holdings, Inc.
Headquartered in Dallas, Texas, Veritex is a bank holding company that conducts banking activities through its wholly owned subsidiary, Veritex Community Bank, with locations throughout the Dallas-Fort Worth metroplex and in the Houston metropolitan area. Veritex Community Bank is a Texas state chartered bank regulated by the Texas Department of Banking and the Board of Governors of the Federal Reserve System. For more information, visit www.veritexbank.com.

Media and Investor Relations:
investorrelations@veritexbank.com
Forward-Looking Statements
This earnings release 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 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 earnings release 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.
4


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
 For the Three Months EndedFor the Six Months Ended
Jun 30, 2021Mar 31, 2021Dec 31, 2020Sep 30, 2020Jun 30, 2020Jun 30, 2021Jun 30, 2020
(Dollars and shares in thousands, except per-share data)
Per Share Data (Common Stock):
Basic EPS$0.60 $0.64 $0.46 $0.46 $0.48 $1.24 $0.56 
Diluted EPS0.59 0.64 0.46 0.46 0.48 1.22 0.56 
Book value per common share25.72 24.96 24.39 23.87 23.45 25.72 23.45 
Tangible book value per common share1
17.16 16.34 15.70 15.19 14.71 17.16 14.71 
Common Stock Data:
Shares outstanding at period end49,498 49,433 49,340 49,650 49,633 49,498 49,633 
Weighted average basic shares outstanding for the period49,476 49,394 49,571 49,647 49,597 49,435 50,161 
Weighted average diluted shares outstanding for the period50,331 49,998 49,837 49,775 49,727 50,187 50,383 
Summary of Credit Ratios:
ACL to total LHI, excluding MW and PPP loans1.59 %1.76 %1.80 %2.10 %2.01 %1.59 %2.01 %
NPAs to total assets0.85 0.92 0.99 1.11 0.62 0.85 0.62 
Net charge-offs to average loans outstanding0.09 — 0.28 0.04 0.03 0.09 0.03 
Summary Performance Ratios:   
Return on average assets2
1.27 1.44 1.04 1.06 1.11 1.35 0.68 
Return on average equity2
9.42 10.53 7.58 7.74 8.36 9.96 4.96 
Return on average tangible common equity1, 2
15.18 17.17 12.84 13.27 14.49 16.15 9.12 
Efficiency ratio52.42 49.62 62.52 48.12 46.02 51.01 46.76 
Selected Performance Metrics - Operating:
Diluted operating EPS1
$0.60 $0.64 $0.60 $0.46 $0.43 $1.24 $0.50 
Pre-tax, pre-provision operating return on average assets1, 2
1.66 %1.82 %1.75 %1.82 %2.11 %1.74 %2.03 %
Operating return on average assets1, 2
1.29 1.46 1.35 1.06 0.98 1.37 0.61 
Operating return on average tangible common equity1, 2
15.42 17.39 16.44 13.27 12.90 16.38 8.31 
Operating efficiency ratio1
51.63 49.62 49.49 48.11 45.74 50.62 46.62 
Veritex Holdings, Inc. Capital Ratios:   
Tier 1 capital to average assets (leverage)9.38 9.50 9.43 9.54 9.16 9.38 9.16 
Common equity tier 1 capital9.03 9.27 9.30 9.67 9.66 9.03 9.66 
Tier 1 capital to risk-weighted assets9.36 9.61 9.66 10.05 10.05 9.36 10.05 
Total capital to risk-weighted assets12.86 13.38 13.56 12.70 12.71 12.86 12.71 
Tangible common equity to tangible assets1
9.51 9.17 9.23 9.12 8.96 9.51 8.96 
1Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” after the financial highlights for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.
2Annualized ratio for quarterly metrics.


5


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands)
 
Jun 30, 2021Mar 31, 2021Dec 31, 2020Sep 30, 2020Jun 30, 2020
(unaudited)(unaudited)(unaudited)(unaudited)
ASSETS    
Cash and cash equivalents$390,027 $468,029 $230,825 $128,767 $160,306 
Debt securities1,125,877 1,077,860 1,055,201 1,091,440 1,112,061 
Other investments87,558 87,226 87,192 98,023 104,213 
Loans held for sale12,065 19,864 21,414 13,928 28,041 
LHI, PPP loans, carried at fair value291,401 407,353 358,042 405,465 398,949 
LHI, MW559,939 599,001 577,594 544,845 441,992 
LHI, excluding MW and PPP6,272,087 5,963,493 5,847,862 5,789,293 5,726,873 
Total loans7,135,492 6,989,711 6,804,912 6,753,531 6,595,855 
ACL(99,543)(104,936)(105,084)(121,591)(115,365)
Bank-owned life insurance83,304 83,318 82,855 82,366 81,876 
Bank premises, furniture and equipment, net123,504 114,585 115,063 115,794 115,560 
Other real estate owned (“OREO”)2,467 2,337 2,337 5,796 7,716 
Intangible assets, net of accumulated amortization57,143 59,236 61,733 64,716 66,705 
Goodwill370,840 370,840 370,840 370,840 370,840 
Other assets72,856 89,304 114,997 112,693 88,091 
Total assets$9,349,525 $9,237,510 $8,820,871 $8,702,375 $8,587,858 
LIABILITIES AND STOCKHOLDERS’ EQUITY     
Deposits:     
Noninterest-bearing deposits$2,388,068 $2,171,719 $2,097,099 $1,920,715 $1,907,697 
Interest-bearing transaction and savings deposits3,112,974 3,189,693 2,958,456 2,821,945 2,714,149 
Certificates and other time deposits1,477,860 1,543,158 1,457,291 1,479,896 1,503,701 
Total deposits6,978,902 6,904,570 6,512,846 6,222,556 6,125,547 
Accounts payable and other liabilities55,499 55,902 61,928 69,540 68,713 
Advances from Federal Home Loan Bank (“FHLB”)777,640 777,679 777,718 1,082,756 1,087,794 
Subordinated debentures and subordinated notes262,766 262,774 262,778 140,158 140,283 
Securities sold under agreements to repurchase1,811 2,777 2,225 2,028 1,772 
Total liabilities8,076,618 8,003,702 7,617,495 7,517,038 7,424,109 
Commitments and contingencies    
Stockholders’ equity:     
Common stock558 557 555 555 555 
Additional paid-in capital1,134,603 1,131,324 1,126,437 1,124,148 1,122,063 
Retained earnings216,704 195,661 172,232 157,639 143,277 
Accumulated other comprehensive income77,189 62,413 56,225 47,155 42,014 
Treasury stock
(156,147)(156,147)(152,073)(144,160)(144,160)
Total stockholders’ equity1,272,907 1,233,808 1,203,376 1,185,337 1,163,749 
Total liabilities and stockholders’ equity$9,349,525 $9,237,510 $8,820,871 $8,702,375 $8,587,858 

6


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands, except per share data)
 For the Three Months EndedFor the Six Months Ended
Jun 30, 2021Mar 31, 2021Dec 31, 2020Sep 30, 2020Jun 30, 2020Jun 30, 2021Jun 30, 2020
Interest income:     
Loans, including fees$67,814 $67,399 $69,597 $68,685 $70,440 $135,213 $148,301 
Debt securities7,529 7,437 7,652 7,852 7,825 14,966 15,222 
Deposits in financial institutions and Fed Funds sold167 127 99 65 186 294 1,057 
Equity securities and other investments672 663 752 827 891 1,335 1,741 
Total interest income76,182 75,626 78,100 77,429 79,342 151,808 166,321 
Interest expense:   
Transaction and savings deposits1,661 1,980 2,105 2,105 2,471 3,641 9,023 
Certificates and other time deposits2,423 3,061 3,919 5,004 6,515 5,484 14,755 
Advances from FHLB1,829 1,812 2,222 2,707 2,801 3,641 5,680 
Subordinated debentures and subordinated notes3,138 3,138 3,088 1,743 1,798 6,276 3,701 
Total interest expense9,051 9,991 11,334 11,559 13,585 19,042 33,159 
Net interest income67,131 65,635 66,766 65,870 65,757 132,766 133,162 
Provision for credit losses— — — 8,692 16,172 — 47,948 
Provision (benefit) for unfunded commitments577 (570)902 1,447 2,799 6,680 
Net interest income after provisions66,554 66,205 65,864 55,731 46,786 132,759 78,534 
Noninterest income:   
Service charges and fees on deposit accounts3,847 3,629 3,971 3,130 2,960 7,476 6,602 
Loan fees1,823 1,341 684 1,787 1,240 3,164 2,085 
(Loss) gain on sales of investment securities— — (256)(8)2,879 — 2,879 
Gain on sales of mortgage loans held for sale385 507 317 472 308 892 450 
Government guaranteed loan income, net3,448 6,548 448 2,257 11,006 9,996 11,445 
Other2,953 2,147 3,848 2,157 2,897 5,100 5,076 
Total noninterest income12,456 14,172 9,012 9,795 21,290 26,628 28,537 
Noninterest expense:   
Salaries and employee benefits23,451 22,932 20,011 20,553 20,019 46,383 38,889 
Occupancy and equipment4,233 4,096 4,116 3,980 3,994 8,329 8,267 
Professional and regulatory fees3,086 3,441 3,578 3,159 2,796 6,527 4,992 
Data processing and software expense2,536 2,319 2,238 2,452 2,434 4,855 4,523 
Marketing1,841 909 945 1,062 561 2,750 1,644 
Amortization of intangibles2,517 2,537 2,558 2,840 2,696 5,054 5,392 
Telephone and communications337 337 340 345 308 674 627 
COVID expenses— — — 132 1,245 — 1,245 
Debt extinguishment costs— — 9,746 — 1,561 — — 
Other3,716 3,026 3,841 1,885 4,447 6,742 10,027 
Total noninterest expense41,717 39,597 47,373 36,408 40,061 81,314 75,606 
Income before income tax expense37,293 40,780 27,503 29,118 28,015 78,073 31,465 
Income tax expense7,837 8,993 4,702 6,198 3,987 16,830 3,303 
Net income$29,456 $31,787 $22,801 $22,920 $24,028 $61,243 $28,162 
Basic EPS$0.60 $0.64 $0.46 $0.46 $0.48 $1.24 $0.56 
Diluted EPS$0.59 $0.64 $0.46 $0.46 $0.48 $1.22 $0.56 
Weighted average basic shares outstanding49,476 49,394 49,571 49,647 49,597 49,435 50,161 
Weighted average diluted shares outstanding50,331 49,998 49,837 49,775 49,727 50,187 50,383 

7


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands except percentages)
 
 For the Three Months Ended
 June 30, 2021March 31, 2021June 30, 2020
Average
Outstanding
Balance
Interest
Earned/
Interest
Paid
Average
Yield/
Rate
Average
Outstanding
Balance
Interest
Earned/
Interest
Paid
Average
Yield/
Rate
Average
Outstanding
Balance
Interest
Earned/
Interest
Paid
Average
Yield/
Rate
Assets         
Interest-earning assets:         
Loans1
$6,108,527 $63,427 4.16 %$5,897,815 $62,702 4.31 %$5,797,989 $67,404 4.68 %
LHI, MW455,334 3,476 3.06 510,678 3,815 3.03 304,873 2,279 3.01 
PPP loans364,020 911 1.00 356,356 882 1.00 303,223 757 1.00 
Debt securities1,095,678 7,529 2.76 1,063,538 7,437 2.84 1,117,964 7,825 2.82 
Interest-bearing deposits in other banks548,087 167 0.12 341,483 127 0.15 366,764 186 0.20 
Equity securities and other investments87,413 672 3.08 87,178 663 3.08 110,672 891 3.24 
Total interest-earning assets8,659,059 76,182 3.53 8,257,048 75,626 3.71 8,001,485 79,342 3.99 
ACL(105,050)  (105,972)  (110,483)  
Noninterest-earning assets767,270   790,195   798,772   
Total assets$9,321,279   $8,941,271   $8,689,774   
Liabilities and Stockholders’ Equity         
Interest-bearing liabilities:         
Interest-bearing demand and savings deposits$3,191,405 $1,661 0.21 %$3,038,586 $1,980 0.26 %$2,684,897 $2,471 0.37 %
Certificates and other time deposits1,515,092 2,423 0.64 1,509,836 3,061 0.82 1,625,971 6,515 1.61 
Advances from FHLB777,655 1,829 0.94 777,694 1,812 0.94 1,206,930 2,801 0.93 
Subordinated debentures and subordinated notes264,931 3,138 4.75 265,356 3,138 4.80 142,549 1,798 5.07 
Total interest-bearing liabilities5,749,083 9,051 0.63 5,591,472 9,991 0.72 5,660,347 13,585 0.97 
Noninterest-bearing liabilities:         
Noninterest-bearing deposits2,266,470   2,069,233   1,826,327   
Other liabilities51,355   56,272   47,302   
Total liabilities8,066,908   7,716,977   7,533,976   
Stockholders’ equity1,254,371   1,224,294   1,155,798   
Total liabilities and stockholders’ equity$9,321,279   $8,941,271   $8,689,774   
Net interest rate spread2
  2.90 %  2.99 %  3.02 %
Net interest income $67,131   $65,635   $65,757  
Net interest margin3
  3.11 %  3.22 %  3.31 %
1 Includes average outstanding balances of loans held for sale of $14,364, $16,602 and $22,958 for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively, and average balances of LHI, excluding MW and PPP loans.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.











8


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands except percentages)
Six Months Ended
June 30, 2021June 30, 2020
Average Outstanding BalanceInterest Earned/ Interest PaidAverage Yield/ RateAverage Outstanding BalanceInterest Earned/ Interest PaidAverage Yield/ Rate
Assets
Interest-earning assets:
Loans1
$6,003,754 $126,128 4.24 %$5,790,227 $143,931 5.00 %
LHI, MW482,8537,2923.05 234,2603,6133.10 
PPP loans360,2091,7931.00 152,8617571.00 
Debt securities1,079,69714,9662.80 1,078,45915,2222.84 
Interest-bearing deposits in other banks445,3562940.13 337,6551,0570.63 
Equity securities and other investments87,2961,3353.08 101,2941,7413.46 
Total interest-earning assets8,459,165151,8083.62 7,694,756166,3214.35 
ACL(105,509)(77,376)
Noninterest-earning assets778,691763,567
Total assets$9,132,347 $8,380,947 
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits$3,115,417 $3,641 0.24 %$2,668,726 $9,023 0.68 %
Certificates and other time deposits1,512,4795,484 0.73 1,639,80714,7551.81 
Advances from FHLB777,6753,641 0.94 1,072,4165,6801.07 
Subordinated debentures and subordinated notes265,1426,276 4.77 143,8693,7015.17 
Total interest-bearing liabilities5,670,71319,0420.68 5,524,81833,1591.21 
Noninterest-bearing liabilities:
Noninterest-bearing deposits2,168,3961,675,015
Other liabilities53,82338,488
Total liabilities7,892,9327,238,321
Stockholders’ equity1,239,4151,142,626
Total liabilities and stockholders’ equity$9,132,347 $8,380,947 
Net interest rate spread2
2.94 %3.14 %
Net interest income$132,766 $133,162 
Net interest margin3
3.16 %3.48 %
1 Includes average outstanding balances of loans held for sale of $15,476 and $16,977 for the six months ended June 30, 2021 and June 30, 2020, respectively, and average balances of loans held for investment, excluding MW and PPP loans.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.
9


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights

Yield Trend
 For the Three Months Ended
June 30, 2021March 31,
2021
December 31,
2020
September 30,
2020
June 30, 2020
Average yield on interest-earning assets:   
Loans1
4.16 %4.31 %4.48 %4.49 %4.68 %
LHI, MW3.06 3.03 2.99 3.00 3.01 
PPP loans1.00 1.00 1.00 1.00 1.00 
Debt securities2.76 2.84 2.83 2.84 2.82 
Interest-bearing deposits in other banks0.12 0.15 0.15 0.15 0.20 
Equity securities and other investments3.08 3.08 3.13 3.17 3.24 
Total interest-earning assets3.53 %3.71 %3.85 %3.90 %3.99 %
Average rate on interest-bearing liabilities:
Interest-bearing demand and savings deposits0.21 %0.26 %0.29 %0.31 %0.37 %
Certificates and other time deposits0.64 0.82 1.06 1.36 1.61 
Advances from FHLB0.94 0.94 1.00 1.01 0.93 
Subordinated debentures and subordinated notes4.75 4.80 4.73 4.87 5.07 
Total interest-bearing liabilities0.63 %0.72 %0.82 %0.85 %0.97 %
Net interest rate spread2
2.90 %2.99 %3.03 %3.05 %3.02 %
Net interest margin3
3.11 %3.22 %3.29 %3.32 %3.31 %
1Includes average outstanding balances of loans held for sale of $14,364, $16,602, $11,938, $15,404 and $22,958 for the three months ended June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively, and average balances of LHI, excluding MW and PPP loans.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.

Supplemental Yield Trend
 For the Three Months Ended
June 30, 2021March 31,
2021
December 31,
2020
September 30,
2020
June 30, 2020
Average cost of interest-bearing deposits0.35 %0.45 %0.55 %0.67 %0.84 %
Average costs of total deposits, including noninterest-bearing0.23 0.31 0.38 0.46 0.59 

10


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands except percentages)

Total LHI and Deposit Portfolio Composition
June 30, 2021March 31,
2021
December 31,
2020
September 30,
2020
June 30, 2020
(Dollars in thousands)
LHI1
Commercial$1,771,10028.2 %$1,632,04027.4 %$1,559,54626.7 %$1,623,24928.0 %$1,555,30027.2 %
Real Estate:
Owner occupied commercial (“OOCRE”)744,89911.9 733,31012.3 717,47212.3 734,93912.7 769,95213.4 
Non-owner occupied commercial (“NOOCRE)1,986,53831.6 1,970,94533.0 1,904,13232.5 1,817,01331.4 1,847,48032.3 
Construction and land871,76513.9 723,44412.1 693,03011.8 623,49610.8 599,51010.5 
Farmland13,6610.2 14,7510.2 13,8440.2 14,4130.2 14,7230.3 
1-4 family residential 513,6358.2 492,6098.3 524,3449.0 548,9539.5 528,6889.2 
Multi-family residential367,4455.9 386,8446.5 424,9627.3 412,4127.0 394,8296.8 
Consumer10,5300.1 12,4310.2 13,0000.1 14,1270.2 14,9320.3 
Total LHI$6,279,573100 %$5,966,374100 %$5,850,330100 %$5,788,602100 %$5,725,414100 %
MW559,939599,001577,594544,845441,992
PPP loans291,401407,353358,042405,465398,949
Total LHI1
$7,130,913$6,972,728$6,785,966$6,738,912$6,566,355
Deposits
Noninterest-bearing$2,388,06834.3 %$2,171,71931.6 %$2,097,09932.2 %$1,920,71530.9 %$1,907,69731.1 %
Interest-bearing transaction451,3076.5 463,3436.7 453,1107.0 450,7397.2 343,6405.6 
Money market2,539,06136.4 2,602,90337.7 2,398,52636.8 2,267,19136.4 2,272,52037.1 
Savings122,6061.8 123,4471.8 106,8201.6 104,0151.7 97,9891.6 
Certificates and other time deposits1,477,86022.2 1,543,15822.3 1,457,29122.3 1,479,89623.7 1,503,70124.5 
Total deposits$6,978,902100 %$6,904,570100 %$6,512,846100 %$6,222,556100 %$6,125,547100 %
Loan to Deposit Ratio102.2 %101.0 %104.2 %108.3 %107.2 %
Loan to Deposit Ratio, excluding MW and PPP loans90.0 %86.4 %89.8 %93.0 %93.5 %

1 Total LHI does not include deferred fees of $7.5 million, $2.9 million, and $2.5 million at June 30, 2021, March 31, 2021 and December 31, 2020, respectively, or deferred costs of $691 thousand and $1.5 million at September 30, 2020 and June 30, 2020, respectively.

11


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands except percentages)

Asset Quality
 For the Three Months EndedFor the Six Months Ended
Jun 30, 2021Mar 31, 2021Dec 31, 2020Sep 30, 2020Jun 30, 2020Jun 30, 2021Jun 30, 2020
(Dollars in thousands)
NPAs:    
Nonaccrual loans$76,994$73,594$81,096$88,877$43,594$76,994$43,594
Accruing loans 90 or more days past due1
4629,0934,2041,6892,0214622,021
Total nonperforming loans held for investment (“NPLs”)77,45682,68785,30090,56645,61577,45645,615
OREO2,4672,3372,3375,7967,7162,4677,716
Total NPAs$79,923$85,024$87,637$96,362$53,331$79,923$53,331
Charge-offs:
Residential$(300)$(15)$(18)$$$(303)$
OOCRE(689)(2,421)(689)
NOOCRE(2,865)
Commercial(5,608)(346)(13,699)(68)(1,740)(5,966)(1,740)
Consumer(20)(18)(26)(11)(57)(38)(125)
Total charge-offs(6,617)(379)(16,608)(2,500)(1,797)(6,996)(1,865)
Recoveries:
Residential293497261
OOCRE500500
Commercial6592265214788536
Consumer3621344274
Total recoveries1,2242311013471,455311
Net charge-offs$(5,393)$(148)$(16,507)$(2,466)$(1,790)$(5,541)$(1,554)
CECL transition adjustment$$$$$$$39,137
ACL at end of period$99,543$104,936$105,084$121,591$115,365$99,543$115,365
Asset Quality Ratios:
NPAs to total assets0.85 %0.92 %0.99 %1.11 %0.62 %0.85 %0.62 %
NPLs to total LHI, excluding MW and PPP loans1.23 1.39 1.46 1.56 0.80 1.23 0.80 
ACL to total LHI, excluding MW and PPP loans1.59 1.76 1.80 2.10 2.01 1.59 2.01 
Net charge-offs to average loans outstanding0.09 — 0.28 0.04 0.03 0.09 0.03 
1 Accruing loans greater than 90 days past due exclude purchase credit deteriorated loans greater than 90 days past due that are accounted for on a pooled basis.




12


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

We identify certain financial measures discussed in this earnings release as being “non-GAAP financial measures.” In accordance with SEC rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles as in effect from time to time in the United States (“GAAP”), in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios calculated using exclusively either one or both of (i) financial measures calculated in accordance with GAAP and (ii) operating measures or other measures that are not non-GAAP financial measures.

The non-GAAP financial measures that we present in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we present in this earnings release may differ from that of other companies reporting measures with similar names. You should understand how such other financial institutions calculate their financial measures that appear to be similar or have similar names to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures.

Tangible Book Value Per Common Share. Tangible book value is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by number of common shares outstanding. For tangible book value per common share, the most directly comparable financial measure calculated in accordance with GAAP is book value per common share.

We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:
 As of
Jun 30, 2021Mar 31, 2021Dec 31, 2020Sep 30, 2020Jun 30, 2020
(Dollars in thousands, except per share data)
Tangible Common Equity   
Total stockholders' equity$1,272,907 $1,233,808 $1,203,376 $1,185,337 $1,163,749 
Adjustments:
Goodwill(370,840)(370,840)(370,840)(370,840)(370,840)
Core deposit intangibles(52,873)(55,311)(57,758)(60,209)(62,661)
Tangible common equity$849,194 $807,657 $774,778 $754,288 $730,248 
Common shares outstanding49,498 49,433 49,340 49,650 49,633 
Book value per common share$25.72 $24.96 $24.39 $23.87 $23.45 
Tangible book value per common share$17.16 $16.34 $15.70 $15.19 $14.71 





13


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity, less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For tangible common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total stockholders’ equity to total assets.

We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, in each case, exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing both total stockholders’ equity and assets while not increasing our tangible common equity or tangible assets.

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:
 As of
Jun 30, 2021Mar 31, 2021Dec 31, 2020Sep 30, 2020Jun 30, 2020
(Dollars in thousands)
Tangible Common Equity   
Total stockholders' equity$1,272,907 $1,233,808 $1,203,376 $1,185,337 $1,163,749 
Adjustments:
Goodwill(370,840)(370,840)(370,840)(370,840)(370,840)
Core deposit intangibles(52,873)(55,311)(57,758)(60,209)(62,661)
Tangible common equity$849,194 $807,657 $774,778 $754,288 $730,248 
Tangible Assets
Total assets$9,349,525 $9,237,510 $8,820,871 $8,702,375 $8,587,858 
Adjustments:
Goodwill(370,840)(370,840)(370,840)(370,840)(370,840)
Core deposit intangibles(52,873)(55,311)(57,758)(60,209)(62,661)
Tangible Assets$8,925,812 $8,811,359 $8,392,273 $8,271,326 $8,154,357 
Tangible Common Equity to Tangible Assets9.51 %9.17 %9.23 %9.12 %8.96 %


14


VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Return on Average Tangible Common Equity. Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) net income available for common stockholders adjusted for amortization of core deposit intangibles (which we refer to as “return”) as net income, plus amortization of core deposit intangibles, less tax benefit at the statutory rate; (b) average tangible common equity as total average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; and (c) return on average tangible common equity as return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.

We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of goodwill and core deposit intangibles. Goodwill and core deposit intangibles have the effect of increasing total stockholders’ equity while not increasing our tangible common equity. This measure is particularly relevant to acquisitive institutions that may have higher balances in goodwill and core deposit intangibles than non-acquisitive institutions.

The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income available for common stockholders adjusted for amortization of core deposit intangibles, net of taxes to net income and presents our return on average tangible common equity:
 For the Three Months EndedFor the Six Months Ended
Jun 30, 2021Mar 31, 2021Dec 31, 2020Sep 30, 2020Jun 30, 2020Jun 30, 2021Jun 30, 2020
(Dollars in thousands)
Net income available for common stockholders adjusted for amortization of core deposit intangibles
Net income$29,456 $31,787 $22,801 $22,920 $24,028 $61,243 $28,162 
Adjustments:       
Plus: Amortization of core deposit intangibles2,438 2,447 2,451 2,451 2,451 4,885 4,902 
Less: Tax benefit at the statutory rate512 514 515 515 515 1,026 1,030 
Net income available for common stockholders adjusted for amortization of core deposit intangibles$31,382 $33,720 $24,737 $24,856 $25,964 $65,102 $32,034 
       
Average Tangible Common Equity
Total average stockholders' equity$1,254,371 $1,224,294 $1,196,274 $1,177,882 $1,155,798 $1,239,415 $1,142,626 
Adjustments: