vbtx-202304250001501570false00015015702023-04-252023-04-25
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): April 25, 2023
VERITEX HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
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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:
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Title of each class | | Trading Symbol | | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | | VBTX | | Nasdaq 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).
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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 April 25, 2023, Veritex Holdings, Inc. (the “Company”), the holding company for Veritex Community Bank, a Texas state chartered bank, issued a press release describing its results of operations for the quarter ended March 31, 2023. 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, April 26, 2023, at 8:30 a.m., Central Time, the Company will host an investor conference call and webcast to review its first 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 after the close of the market on Tuesday, April 25, 2023. 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
After the close of the market on Tuesday, April 25, 2023, 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 May 25, 2023 to shareholders of record as of the close of business on May 11, 2023. The press release is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
Forward Looking Statement
This Current Report includes “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors, which change over time and are beyond our control, that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to the expected payment of Veritex Holdings, Inc.’s (“Veritex”) quarterly cash dividend; the impact of certain changes in Veritex’s accounting policies, standards and interpretations; the effects of the COVID-19 pandemic and actions taken in response thereto; a continuation of recent turmoil in the banking industry, responsive measures to mitigate and manage it and related supervisory and regulatory actions and costs and Veritex’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,” “seeks,” “targets,” “outlooks,” “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 Veritex’s Annual Report on Form 10-K for the year ended December 31, 2022 and any updates to those risk factors set forth in Veritex’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 Veritex’s underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex 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. Veritex does not undertake any obligation, and specifically declines any obligation, to supplement, 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 Veritex or persons acting on Veritex’s behalf may issue.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
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Exhibit Number | | Description |
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104 | | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Veritex Holdings, Inc. | | |
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By: | | /s/ C. Malcolm Holland, III |
| | C. Malcolm Holland, III |
| | Chairman and Chief Executive Officer |
Date: | | April 25, 2023 |
DocumentVERITEX HOLDINGS, INC. REPORTS FIRST QUARTER OPERATING RESULTS
Dallas, TX — April 25, 2023 —Veritex Holdings, Inc. (“Veritex”, the “Company”, “we” or “our”) (Nasdaq: VBTX), the holding company for Veritex Community Bank, today announced the results for the quarter ended March 31, 2023.
“I am incredibly pleased with our first quarter operating performance. We reported outstanding earnings metrics while all banks were navigating the impact of the recent banking environment”, said C. Malcolm Holland, III. “These recent events have given our bankers an opportunity to connect with our customers and prospects to provide reassurance of our Company’s ability to meet their needs. I am encouraged that the time and focus put in over the years resulted in very little deposit outflow since last quarter.”
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| | Quarter to Date |
Financial Highlights | | Q1 2023 | | Q4 2022 | | Q1 2022 |
| | (Dollars in thousands, except per share data) (unaudited) |
GAAP | | | | | | |
Net income | | $ | 38,411 | | | $ | 39,897 | | | $ | 33,470 | |
Diluted EPS | | 0.70 | | | 0.73 | | | 0.65 | |
Book value per common share | | 27.54 | | | 26.83 | | | 26.86 | |
Return on average assets2 | | 1.28 | % | | 1.35 | % | | 1.36 | % |
Efficiency ratio | | 48.42 | | | 47.63 | | | 52.84 | |
Return on average equity2 | | 10.55 | | | 11.03 | | | 10.00 | |
Non-GAAP1 | | | | | | |
Operating earnings | | $ | 43,274 | | | $ | 40,395 | | | $ | 34,014 | |
Diluted operating EPS | | 0.79 | | | 0.74 | | | 0.66 | |
Tangible book value per common share | | 19.43 | | | 18.64 | | | 18.51 | |
Pre-tax, pre-provision operating earnings | | 66,461 | | | 63,694 | | | 42,265 | |
Pre-tax, pre-provision operating return on average assets2 | | 2.21 | % | | 2.15 | % | | 1.71 | % |
Pre-tax, pre-provision operating return on average loans 2 | | 2.84 | | | 2.78 | | | 2.34 | |
Operating return on average assets2 | | 1.44 | | | 1.36 | | | 1.38 | |
Operating efficiency ratio | | 45.63 | | | 47.11 | | | 52.05 | |
Return on average tangible common equity2 | | 15.81 | | | 16.75 | | | 15.84 | |
Operating return on average tangible common equity2 | | 17.72 | | | 16.95 | | | 16.08 | |
1 Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of these non-generally accepted accounting principles (“GAAP”) financial measures to their most directly comparable GAAP measures.
2 Annualized ratio.
Other First Quarter Highlights
•Pre-tax, pre-provision operating return on average assets increased 6 bps from the fourth quarter of 2022 to 2.21% and increased 50 bps from the first quarter 2022;
•Pre-tax, pre-provision operating return on average loans increased 6 bps from the fourth quarter of 2022 to 2.84% and increased 50 bps from the first quarter 2022;
•Tangible book value per common share increased to $19.43 during the three months ended March 31, 2023 compared to $18.64 for the three months ended December 31, 2022 and $18.51 for the three months ended March 31, 2022;
•Non-performing assets (“NPAs”) to total assets decreased to 0.35%, or 1 bps from December 31, 2022 and 11 bps from March 31, 2022, respectively;
•Annualized net charge-offs to average loans outstanding were 4 bps for the first quarter of 2023 compared to 28 bps for the three months ended December 31, 2022;
•Total loans held for investment (“LHI”), excluding mortgage warehouse (“MW”), grew $200.7 million, or 8.9% annualized, during the three months ended March 31, 2023 from $9.04 billion at the end of the fourth quarter of 2022;
•Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on May 25, 2023.
Results of Operations for the Three Months Ended March 31, 2023
Net Interest Income
For the three months ended March 31, 2023, net interest income before provision for credit losses was $103.4 million and net interest margin was 3.69% compared to $106.1 million and 3.87%, respectively, for the three months ended December 31, 2022. The $2.7 million decrease in net interest income before provision for credit losses was primarily due to a $12.4 million increase in interest expense on certificates and other time deposits and a $5.8 million increase in transaction and savings deposits driven by an increase in funding costs on deposits, partially offset by a $14.9 million increase in loan yields and average balances during the three months ended March 31, 2023. Net interest margin decreased 18 basis points compared to the three months ended December 31, 2022, primarily due to the increase in funding costs on deposits during three months ended March 31, 2023, partially offset by an increase in loan yields and average balances.
Compared to the three months ended March 31, 2022, net interest income before provision for credit losses for the three months ended March 31, 2023 increased by $30.3 million, or 41.6%. The increase was primarily due to a $80.3 million increase in interest income on loans driven by an increase in average balances and loan yields, partially offset by a $28.1 million increase in transaction and savings deposits and a $19.6 million increase in certificates and other time deposits driven by an increase in funding costs. Net interest margin increased 47 basis points to 3.69% for the three months ended March 31, 2023 from 3.22% for the three months ended March 31, 2022. The increase was primarily due to the increase in average balances and loan yields during the three months ended March 31, 2023, partially offset by an increase in funding costs.
Noninterest Income
Noninterest income for the three months ended March 31, 2023 was $13.5 million, a decrease of $795 thousand, or 5.5%, compared to the three months ended December 31, 2022. The decrease was primarily due to a $5.3 million loss on sales of investment securities due to the Company selling $116.2 million of investment securities in early March 2023 and a $2.1 million decrease in customer swap income. The decrease was partially offset by a $3.9 million decrease in equity method investment losses and a $1.9 million increase in government guaranteed loan income primarily driven by an increase in USDA loans sold through our wholly owned subsidiary North Avenue Capital, LLC (“NAC”).
Compared to the three months ended March 31, 2022, noninterest income for the three months ended March 31, 2023 decreased by $1.6 million, or 10.4%. The decrease was primarily due to a $5.3 million loss on sales of investment securities due to the Company selling $116.2 million of investment securities in early March 2023 and a $1.9 million decrease in equity method investment income. The decrease was partially offset by a $4.8 million increase in government guaranteed loan income primarily driven by an increase in USDA loans sold through NAC and a $959 thousand increase in BOLI income.
Noninterest Expense
Noninterest expense was $56.6 million for the three months ended March 31, 2023, compared to $57.4 million for the three months ended December 31, 2022, a decrease of $744 thousand, or 1.3%. The decrease was primarily due to a $1.8 million decrease in salaries and employee benefits, partially offset by a $523 thousand increase in data processing and software expenses, a $196 thousand increase in third party banking services, a $120 thousand increase in telephone and communications expenses, and a $459 thousand increase in other miscellaneous expenses.
Compared to the three months ended March 31, 2022, noninterest expense for the three months ended March 31, 2023 increased by $10.0 million, or 21.6%. The increase was primarily driven by a $4.4 million increase in salaries and employee benefits, a $1.8 million increase in data processing and software expenses, a $1.4 million increase in loan and collection expenses, a $1.2 million increase in professional and regulatory fees, and a $429 thousand increase in third party banking services.
Financial Condition
Total LHI, excluding MW, were $9.24 billion at March 31, 2023, an increase of $200.7 million, or 8.9% annualized, compared to December 31, 2022. The increase was the result of the continued execution, and success of our loan growth strategy, including our continued investment in talent.
Total deposits were $9.03 billion at March 31, 2023, a decrease of $88.5 million, or 3.9% annualized, compared to December 31, 2022. The decrease was primarily the result of a decrease of $447.8 million in correspondent money market deposits and a decrease of $428.2 million in non-interest bearing deposits, partially offset by an increase of $810.2 million in certificates and other time deposits.
Credit Quality
Nonperforming assets totaled $44.5 million, or 0.35% of total assets, at March 31, 2023, compared to $43.7 million, or 0.36% of total assets, at December 31, 2022. The Company had net charge-offs of $858 thousand for the quarter, which were fully reserved against in prior quarters under our allowance for credit loss (“ACL”) model.
The Company recorded a provision for credit losses of $8.5 million for the three months ended March 31, 2023, an $11.8 million provision for credit losses for the three months ended December 31, 2022 and a $500 thousand benefit for credit losses for the three months ended March 31, 2022. The recorded provision for credit losses for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, was primarily attributable to an increase in general reserves as a result of changes in economic factors and loan growth. The Company recorded a provision for unfunded commitments of $1.5 million for the three months ended March 31, 2023, a $523 thousand benefit for unfunded commitments for the three months ended December 31, 2022, and a $493 thousand provision for unfunded commitments for the three months ended March 31, 2022. The recorded provision for unfunded commitments for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, was attributable to changes in economic factors partially offset by a decrease in unfunded commitment balances. ACL as a percentage of LHI, excluding MW, was 1.07%, 1.01% and 1.02% at March 31, 2023, December 31, 2022 and March 31, 2022, respectively.
Dividend Information
After the close of the market on Tuesday, April 25, 2023, 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 May 25, 2023 to stockholders of record as of the close of business on May 11, 2023.
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, pre-tax, pre-provision operating return on average loans, pre-tax, pre-provision operating return on average loans, 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.
Conference Call
The Company will host an investor conference call and webcast to review the results on Wednesday, April 26, 2023, at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/4tvcudmz and will receive a unique PIN, which can be used when dialing in for the call.
Participants may also register via teleconference at:
https://register.vevent.com/register/BI557c0ef1335341a3870ff09ae09bc101. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.
A replay will be available within approximately two hours after the completion of the call, and made accessible for one week thereafter. You may access the replay via webcast through the investor relations section of Veritex’s website.
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 includes “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors, which change over time and are beyond our control, that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to the expected payment of Veritex Holdings, Inc.’s (“Veritex”) quarterly cash dividend; the impact of certain changes in Veritex’s accounting policies, standards and interpretations; the effects of the COVID-19 pandemic and actions taken in response thereto; a continuation of recent turmoil in the banking industry, responsive measures to mitigate and manage
it and related supervisory and regulatory actions and costs and Veritex’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,” “seeks,” “targets,” “outlooks,” “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 Veritex’s Annual Report on Form 10-K for the year ended December 31, 2022 and any updates to those risk factors set forth in Veritex’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 Veritex’s underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex 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. Veritex does not undertake any obligation, and specifically declines any obligation, to supplement, 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 Veritex or persons acting on Veritex’s behalf may issue.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
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| | For the Quarter Ended | | |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 | | | | |
| | (Dollars and shares in thousands, except per share data) |
Per Share Data (Common Stock): | | | | | | | | | | | | | | |
Basic EPS | | $ | 0.71 | | | $ | 0.74 | | | $ | 0.80 | | | $ | 0.55 | | | $ | 0.66 | | | | | |
Diluted EPS | | 0.70 | | | 0.73 | | | 0.79 | | | 0.54 | | | 0.65 | | | | | |
Book value per common share | | 27.54 | | | 26.83 | | | 26.15 | | | 26.50 | | | 26.86 | | | | | |
Tangible book value per common share1 | | 19.43 | | | 18.64 | | | 17.91 | | | 18.20 | | | 18.51 | | | | | |
Dividends paid per common share outstanding2 | | 0.20 | | | 0.20 | | | 0.20 | | | 0.20 | | | 0.20 | | | | | |
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Common Stock Data: | | | | | | | | | | | | | | |
Shares outstanding at period end | | 54,229 | | | 54,030 | | | 53,988 | | | 53,951 | | | 53,907 | | | | | |
Weighted average basic shares outstanding for the period | | 54,149 | | | 54,011 | | | 53,979 | | | 53,949 | | | 50,695 | | | | | |
Weighted average diluted shares outstanding for the period | | 54,606 | | | 54,780 | | | 54,633 | | | 54,646 | | | 51,571 | | | | | |
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Summary of Credit Ratios: | | | | | | | | | | | | | | |
ACL to total LHI, excluding MW | | 1.07 | % | | 1.01 | % | | 1.00 | % | | 1.02 | % | | 1.02 | % | | | | |
NPAs to total assets | | 0.35 | | | 0.36 | | | 0.26 | | | 0.40 | | | 0.46 | | | | | |
NPAs, excluding nonaccrual purchase credit deteriorated (“PCD”) loans, to total assets3 | | 0.25 | | | 0.25 | | | 0.26 | | | 0.40 | | | 0.46 | | | | | |
Net charge-offs to average loans outstanding, excluding MW4 | | 0.04 | | | 0.28 | | | 0.12 | | | 0.04 | | | 0.28 | | | | | |
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Summary Performance Ratios: | | | | | | | | | | | | | | |
Return on average assets4 | | 1.28 | % | | 1.35 | % | | 1.50 | % | | 1.11 | % | | 1.36 | % | | | | |
Return on average equity4 | | 10.55 | | | 11.03 | | | 11.82 | | | 8.21 | | | 10.00 | | | | | |
Return on average tangible common equity1, 4 | | 15.81 | | | 16.75 | | | 17.82 | | | 12.68 | | | 15.84 | | | | | |
Efficiency ratio | | 48.42 | | | 47.63 | | | 44.71 | | | 50.76 | | | 52.84 | | | | | |
Net interest margin | | 3.69 | | | 3.87 | | | 3.77 | | | 3.42 | | | 3.22 | | | | | |
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Selected Performance Metrics - Operating: | | | | | | | | | | | | | | |
Diluted operating EPS1 | | $ | 0.79 | | | $ | 0.74 | | | $ | 0.80 | | | $ | 0.55 | | | $ | 0.66 | | | | | |
Pre-tax, pre-provision operating return on average assets1, 4 | | 2.21 | % | | 2.15 | % | | 2.20 | % | | 1.76 | % | | 1.71 | % | | | | |
Pre-tax, pre-provision operating return on average loans1, 4 | | 2.84 | | | 2.78 | | | 2.88 | | | 2.35 | | | 2.34 | | | | | |
Operating return on average assets1,4 | | 1.44 | | | 1.36 | | | 1.51 | | | 1.12 | | | 1.38 | | | | | |
Operating return on average tangible common equity1,4 | | 17.72 | | | 16.95 | | | 17.94 | | | 12.77 | | | 16.08 | | | | | |
Operating efficiency ratio1 | | 45.63 | | | 47.11 | | | 44.37 | | | 50.45 | | | 52.05 | | | | | |
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Veritex Holdings, Inc. Capital Ratios: | | | | | | | | | | | | | | |
Average stockholders' equity to average total assets | | 12.09 | % | | 12.20 | % | | 12.69 | % | | 13.51 | % | | 13.58 | % | | | | |
Tangible common equity to tangible assets1 | | 8.66 | | | 8.60 | | | 8.58 | | | 9.04 | | | 9.98 | | | | | |
Tier 1 capital to average assets (leverage) | | 9.67 | | | 9.82 | | | 9.79 | | | 10.14 | | | 10.66 | | | | | |
Common equity tier 1 capital | | 9.32 | | | 9.09 | | | 9.09 | | | 9.25 | | | 9.84 | | | | | |
Tier 1 capital to risk-weighted assets | | 9.56 | | | 9.34 | | | 9.35 | | | 9.52 | | | 10.14 | | | | | |
Total capital to risk-weighted assets | | 11.99 | | | 11.63 | | | 11.68 | | | 11.95 | | | 12.73 | | | | | |
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1Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” after the financial highlights for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.
2Dividend amount represents dividend paid per common share subsequent to each respective quarter end.
3Nonaccrual PCD loans consist of PCD loans that transitioned upon adoption of ASC326 and were accounted for on a pooled basis that have subsequently been placed on nonaccrual status.
4Annualized ratio for quarterly metrics.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 |
| | (unaudited) | | | | (unaudited) | | (unaudited) | | (unaudited) |
ASSETS | | | | | | | | | | |
Cash and cash equivalents | | $ | 808,395 | | | $ | 436,077 | | | $ | 433,897 | | | $ | 410,716 | | | $ | 551,573 | |
Debt securities, net | | 1,150,959 | | 1,282,460 | | 1,303,004 | | 1,354,403 | | 1,244,514 |
Other investments | | 137,621 | | | 122,450 | | | 115,551 | | | 202,685 | | | 188,699 | |
| | | | | | | | | | |
Loans held for sale | | 42,816 | | | 20,641 | | | 17,644 | | | 14,210 | | | 18,721 | |
| | | | | | | | | | |
LHI, MW | | 437,501 | | | 446,227 | | | 523,805 | | | 629,291 | | | 542,877 | |
LHI, excluding MW | | 9,237,159 | | | 9,036,424 | | | 8,513,254 | | | 7,923,131 | | | 7,143,941 | |
Total loans | | 9,717,476 | | | 9,503,292 | | | 9,054,703 | | | 8,566,632 | | | 7,705,539 | |
ACL, loans | | (98,694) | | | (91,052) | | | (85,037) | | | (80,576) | | | (72,485) | |
Bank-owned life insurance | | 84,962 | | | 84,496 | | | 84,030 | | | 84,097 | | | 83,641 | |
Bank premises, furniture and equipment, net | | 107,540 | | | 108,824 | | | 108,720 | | | 108,769 | | | 109,138 | |
Other real estate owned (“OREO”) | | — | | | — | | | — | | | 1,032 | | | 1,062 | |
Intangible assets, net of accumulated amortization | | 51,086 | | | 53,213 | | | 56,238 | | | 59,011 | | | 63,986 | |
Goodwill | | 404,452 | | | 404,452 | | | 404,452 | | | 404,452 | | | 404,452 | |
Other assets | | 245,690 | | | 250,149 | | | 238,896 | | | 193,590 | | | 173,561 | |
Total assets | | $ | 12,609,487 | | | $ | 12,154,361 | | | $ | 11,714,454 | | | $ | 11,304,811 | | | $ | 10,453,680 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | |
Deposits: | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 2,212,389 | | | $ | 2,640,617 | | | $ | 2,811,412 | | | $ | 2,947,830 | | | $ | 2,765,895 | |
Interest-bearing transaction and savings deposits | | 3,492,011 | | | 3,514,729 | | | 3,437,898 | | | 3,233,803 | | | 3,030,852 | |
Certificates and other time deposits | | 2,896,870 | | | 2,086,642 | | | 1,667,364 | | | 1,562,626 | | | 1,435,409 | |
Correspondent money market deposits | | 433,468 | | | 881,246 | | | 831,770 | | | 773,447 | | | 657,440 | |
Total deposits | | 9,034,738 | | | 9,123,234 | | | 8,748,444 | | | 8,517,706 | | | 7,889,596 | |
Accounts payable and other liabilities | | 171,985 | | | 177,579 | | | 173,198 | | | 126,116 | | | 105,552 | |
Advances from Federal Home Loan Bank (“FHLB”) | | 1,680,000 | | | 1,175,000 | | | 1,150,000 | | | 1,000,000 | | | 777,522 | |
Subordinated debentures and subordinated notes | | 229,027 | | | 228,775 | | | 228,524 | | | 228,272 | | | 228,018 | |
Securities sold under agreements to repurchase | | — | | | — | | | 2,389 | | | 3,275 | | | 4,996 | |
Total liabilities | | 11,115,750 | | | 10,704,588 | | | 10,302,555 | | | 9,875,369 | | | 9,005,684 | |
Commitments and contingencies | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | |
Common stock | | 609 | | | 607 | | | 606 | | | 606 | | | 605 | |
Additional paid-in capital | | 1,308,345 | | | 1,306,852 | | | 1,303,171 | | | 1,300,170 | | | 1,297,161 | |
Retained earnings | | 406,873 | | | 379,299 | | | 350,195 | | | 317,664 | | | 298,830 | |
| | | | | | | | | | |
Accumulated other comprehensive (loss) income | | (54,508) | | | (69,403) | | | (74,491) | | | (21,416) | | | 18,982 | |
Treasury stock | | (167,582) | | | (167,582) | | | (167,582) | | | (167,582) | | | (167,582) | |
Total stockholders’ equity | | 1,493,737 | | | 1,449,773 | | | 1,411,899 | | | 1,429,442 | | | 1,447,996 | |
Total liabilities and stockholders’ equity | | $ | 12,609,487 | | | $ | 12,154,361 | | | $ | 11,714,454 | | | $ | 11,304,811 | | | $ | 10,453,680 | |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended | | |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 | | | | |
| | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) | | | | |
Interest income: | | | | | | | | | | | | | | |
Loans, including fees | | $ | 151,707 | | | $ | 136,846 | | | $ | 109,199 | | | $ | 82,191 | | | $ | 71,443 | | | | | |
Debt securities | | 10,988 | | | 10,880 | | | 10,462 | | | 9,632 | | | 7,762 | | | | | |
Deposits in financial institutions and Fed Funds sold | | 5,534 | | | 3,401 | | | 1,898 | | | 714 | | | 262 | | | | | |
Equity securities and other investments | | 1,408 | | | 1,087 | | | 1,666 | | | 1,057 | | | 910 | | | | | |
Total interest income | | 169,637 | | | 152,214 | | | 123,225 | | | 93,594 | | | 80,377 | | | | | |
Interest expense: | | | | | | | | | | | | | | |
Transaction and savings deposits | | 29,857 | | | 24,043 | | | 12,897 | | | 4,094 | | | 1,751 | | | | | |
Certificates and other time deposits | | 20,967 | | | 8,543 | | | 3,919 | | | 1,465 | | | 1,380 | | | | | |
Advances from FHLB | | 12,358 | | | 10,577 | | | 2,543 | | | 834 | | | 1,547 | | | | | |
Subordinated debentures and subordinated notes | | 3,066 | | | 2,954 | | | 2,826 | | | 2,721 | | | 2,659 | | | | | |
Total interest expense | | 66,248 | | | 46,117 | | | 22,185 | | | 9,114 | | | 7,337 | | | | | |
Net interest income | | 103,389 | | | 106,097 | | | 101,040 | | | 84,480 | | | 73,040 | | | | | |
Provision (benefit) for credit losses1 | | 9,385 | | | 11,800 | | | 6,650 | | | 9,000 | | | (500) | | | | | |
Provision (benefit) for unfunded commitments | | 1,497 | | | (523) | | | 850 | | | — | | | 493 | | | | | |
Net interest income after provisions | | 92,507 | | | 94,820 | | | 93,540 | | | 75,480 | | | 73,047 | | | | | |
Noninterest income: | | | | | | | | | | | | | | |
Service charges and fees on deposit accounts | | 5,017 | | | 5,173 | | | 5,217 | | | 5,039 | | | 4,710 | | | | | |
Loan fees | | 2,064 | | | 2,477 | | | 2,786 | | | 2,385 | | | 2,794 | | | | | |
Loss on sales of investment securities | | (5,321) | | | — | | | — | | | — | | | — | | | | | |
Gain on sales of mortgage loans held for sale | | 6 | | | 4 | | | 16 | | | 223 | | | 307 | | | | | |
Government guaranteed loan income, net | | 9,688 | | | 7,808 | | | 572 | | | 789 | | | 4,891 | | | | | |
Equity method investment (loss) income | | (1,521) | | | (5,416) | | | (1,058) | | | 966 | | | 367 | | | | | |
Customer swap income | | 217 | | | 2,273 | | | 3,358 | | | 1,321 | | | 946 | | | | | |
Other income (loss) | | 3,381 | | | 2,007 | | | 2,130 | | | (345) | | | 1,082 | | | | | |
Total noninterest income | | 13,531 | | | 14,326 | | | 13,021 | | | 10,378 | | | 15,097 | | | | | |
Noninterest expense: | | | | | | | | | | | | | | |
Salaries and employee benefits | | 31,865 | | | 33,690 | | | 29,714 | | | 26,924 | | | 27,513 | | | | | |
Occupancy and equipment | | 4,973 | | | 5,116 | | | 4,615 | | | 4,496 | | | 4,517 | | | | | |
Professional and regulatory fees | | 4,389 | | | 4,401 | | | 3,718 | | | 2,865 | | | 3,158 | | | | | |
Data processing and software expense | | 4,720 | | | 4,197 | | | 3,509 | | | 3,386 | | | 2,921 | | | | | |
Marketing | | 1,779 | | | 1,841 | | | 1,845 | | | 2,306 | | | 1,187 | | | | | |
Amortization of intangibles | | 2,495 | | | 2,495 | | | 2,494 | | | 2,495 | | | 2,495 | | | | | |
Telephone and communications | | 478 | | | 358 | | | 389 | | | 352 | | | 385 | | | | | |
Merger and acquisition (“M&A”) expense | | — | | | — | | | 384 | | | 295 | | | 700 | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Other | | 5,916 | | | 5,261 | | | 4,323 | | | 5,034 | | | 3,696 | | | | | |
Total noninterest expense | | 56,615 | | | 57,359 | | | 50,991 | | | 48,153 | | | 46,572 | | | | | |
Income before income tax expense | | 49,423 | | | 51,787 | | | 55,570 | | | 37,705 | | | 41,572 | | | | | |
Income tax expense | | 11,012 | | | 11,890 | | | 12,248 | | | 8,079 | | | 8,102 | | | | | |
Net income | | $ | 38,411 | | | $ | 39,897 | | | $ | 43,322 | | | $ | 29,626 | | | $ | 33,470 | | | | | |
| | | | | | | | | | | | | | |
Net income available to common stockholders | | $ | 38,411 | | | $ | 39,897 | | | $ | 43,322 | | | $ | 29,626 | | | $ | 33,470 | | | | | |
| | | | | | | | | | | | | | |
Basic EPS | | $ | 0.71 | | | $ | 0.74 | | | $ | 0.80 | | | $ | 0.55 | | | $ | 0.66 | | | | | |
Diluted EPS | | $ | 0.70 | | | $ | 0.73 | | | $ | 0.79 | | | $ | 0.54 | | | $ | 0.65 | | | | | |
Weighted average basic shares outstanding | | 54,149 | | | 54,011 | | | 53,979 | | | 53,949 | | | 50,695 | | | | | |
Weighted average diluted shares outstanding | | 54,606 | | | 54,780 | | | 54,633 | | | 54,646 | | | 51,571 | | | | | |
1 Includes provision for credit losses on loans of $8.5 million and available for sale (“AFS”) securities of $885 thousand for the three months ended March 31, 2023.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended |
| | March 31, 2023 | | December 31, 2022 | | March 31, 2022 |
| | 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 |
| | (In thousands, except percentages) |
Assets | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | |
Loans1 | | $ | 9,141,137 | | | $ | 146,801 | | | 6.51 | % | | $ | 8,743,380 | | | $ | 131,823 | | | 5.98 | % | | $ | 6,904,278 | | | $ | 68,374 | | | 4.02 | % |
LHI, MW | | 360,172 | | | 4,906 | | | 5.52 | | | 383,080 | | | 5,024 | | | 5.20 | | | 421,680 | | | 3,069 | | | 2.95 | |
| | | | | | | | | | | | | | | | | | |
Debt securities | | 1,252,457 | | | 10,988 | | | 3.56 | | | 1,286,342 | | | 10,880 | | | 3.36 | | | 1,140,834 | | | 7,762 | | | 2.76 | |
Interest-bearing deposits in other banks | | 478,345 | | | 5,534 | | | 4.69 | | | 353,737 | | | 3,401 | | | 3.81 | | | 554,864 | | | 262 | | | 0.19 | |
Equity securities and other investments | | 124,985 | | | 1,408 | | | 4.57 | | | 119,054 | | | 1,087 | | | 3.62 | | | 190,002 | | | 910 | | | 1.94 | |
Total interest-earning assets | | 11,357,096 | | | 169,637 | | | 6.06 | | | 10,885,593 | | | 152,215 | | | 5.55 | | | 9,211,658 | | | 80,377 | | | 3.54 | |
ACL, loans | | (92,664) | | | | | | | (85,275) | | | | | | | (77,843) | | | | | |
Noninterest-earning assets | | 949,881 | | | | | | | 960,726 | | | | | | | 865,107 | | | | | |
Total assets | | $ | 12,214,313 | | | | | | | $ | 11,761,044 | | | | | | | $ | 9,998,922 | | | | | |
| | | | | | | | | | | | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
Interest-bearing demand and savings deposits | | $ | 4,150,995 | | | $ | 29,857 | | | 2.92 | % | | $ | 4,321,936 | | | $ | 24,043 | | | 2.21 | % | | $ | 3,471,645 | | | $ | 1,751 | | | 0.20 | % |
Certificates and other time deposits | | 2,588,728 | | | 20,967 | | | 3.28 | | | 1,785,152 | | | 8,543 | | | 1.90 | | | 1,501,852 | | | 1,380 | | | 0.37 | |
Advances from FHLB | | 1,122,683 | | | 12,358 | | | 4.46 | | | 1,073,049 | | | 10,577 | | | 3.91 | | | 777,538 | | | 1,547 | | | 0.81 | |
Subordinated debentures and subordinated notes | | 231,251 | | | 3,066 | | | 5.38 | | | 229,037 | | | 2,954 | | | 5.12 | | | 231,875 | | | 2,659 | | | 4.65 | |
Total interest-bearing liabilities | | 8,093,657 | | | 66,248 | | | 3.32 | | | 7,409,174 | | | 46,117 | | | 2.47 | | | 5,982,910 | | | 7,337 | | | 0.50 | |
| | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | 2,470,700 | | | | | | | 2,737,468 | | | | | | | 2,591,504 | | | | | |
Other liabilities | | 173,380 | | | | | | | 179,584 | | | | | | | 67,060 | | | | | |
Total liabilities | | 10,737,737 | | | | | | | 10,326,226 | | | | | | | 8,641,474 | | | | | |
Stockholders’ equity | | 1,476,576 | | | | | | | 1,434,818 | | | | | | | 1,357,448 | | | | | |
Total liabilities and stockholders’ equity | | $ | 12,214,313 | | | | | | | $ | 11,761,044 | | | | | | | $ | 9,998,922 | | | | | |
| | | | | | | | | | | | | | | | | | |
Net interest rate spread2 | | | | | | 2.74 | % | | | | | | 3.08 | % | | | | | | 3.04 | % |
Net interest income and margin3 | | | | $ | 103,389 | | | 3.69 | % | | | | $ | 106,098 | | | 3.87 | % | | | | $ | 73,040 | | | 3.22 | % |
1 Includes average outstanding balances of loans held for sale of $19,679, $15,296 and $12,769 for the three months ended March 31, 2023, December 31, 2022, and March 31, 2022, respectively, and average balances of LHI, excluding MW.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Yield Trend | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 |
Average yield on interest-earning assets: | | | | | | | | | | |
Loans1 | | 6.51 | % | | 5.98 | % | | 5.01 | % | | 4.16 | % | | 4.02 | % |
LHI, MW | | 5.52 | | | 5.20 | | | 4.11 | | | 3.29 | | | 2.95 | |
| | | | | | | | | | |
Debt securities | | 3.56 | | | 3.36 | | | 3.05 | | | 2.93 | | | 2.76 | |
Interest-bearing deposits in other banks | | 4.69 | | | 3.81 | | | 2.17 | | | 0.77 | | | 0.19 | |
Equity securities and other investments | | 4.57 | | | 3.62 | | | 3.25 | | | 2.53 | | | 1.94 | |
Total interest-earning assets | | 6.06 | % | | 5.55 | % | | 4.59 | % | | 3.79 | % | | 3.54 | % |
| | | | | | | | | | |
Average rate on interest-bearing liabilities: | | | | | | | | | | |
Interest-bearing demand and savings deposits | | 2.92 | % | | 2.21 | % | | 1.23 | % | | 0.44 | % | | 0.20 | % |
Certificates and other time deposits | | 3.28 | | | 1.90 | | | 0.94 | | | 0.40 | | | 0.37 | |
Advances from FHLB | | 4.46 | | | 3.91 | | | 1.12 | | | 0.40 | | | 0.81 | |
Subordinated debentures and subordinated notes | | 5.38 | | | 5.12 | | | 4.85 | | | 4.70 | | | 4.65 | |
Total interest-bearing liabilities | | 3.32 | % | | 2.47 | % | | 1.27 | % | | 0.58 | % | | 0.50 | % |
| | | | | | | | | | |
Net interest rate spread2 | | 2.74 | % | | 3.08 | % | | 3.32 | % | | 3.21 | % | | 3.04 | % |
Net interest margin3 | | 3.69 | % | | 3.87 | % | | 3.77 | % | | 3.42 | % | | 3.22 | % |
1Includes average outstanding balances of loans held for sale of $19,679, $15,296, $14,023, $12,112 and $12,769 for the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, respectively, and average balances of LHI, excluding MW.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.
Supplemental Yield Trend | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 |
Average cost of interest-bearing deposits | | 3.06 | % | | 2.12 | % | | 1.15 | % | | 0.43 | % | | 0.26 | % |
Average costs of total deposits, including noninterest-bearing | | 2.24 | | | 1.46 | | | 0.76 | | | 0.28 | | | 0.17 | |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
LHI and Deposit Portfolio Composition | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 |
| | (In thousands, except percentages) |
LHI1 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial | | $ | 2,895,957 | | 31.3 | % | | $ | 2,942,348 | | 32.4 | % | | $ | 2,743,769 | | 32.2 | % | | $ | 2,457,742 | | 31.0 | % | | $ | 2,144,412 | | 30.0 | % |
| | | | | | | | | | | | | | | | | | | | |
Real Estate: | | | | | | | | | | | | | | | | | | | | |
Owner occupied commercial (“OOCRE”) | | 631,563 | | 6.8 | | | 715,829 | | 7.9 | | | 677,705 | | 7.9 | | | 646,723 | | 8.1 | | | 633,615 | | 8.9 | |
Non-owner occupied commercial (“NOOCRE”) | | 2,505,344 | | 27.1 | | | 2,341,379 | | 25.9 | | | 2,273,305 | | 26.6 | | | 2,203,970 | | 27.8 | | | 2,145,826 | | 29.9 | |
Construction and land | | 1,831,349 | | 19.8 | | | 1,787,400 | | 19.7 | | | 1,673,997 | | 19.6 | | | 1,532,997 | | 19.3 | | | 1,297,338 | | 18.1 | |
Farmland | | 51,680 | | 0.6 | | | 43,500 | | 0.5 | | | 43,569 | | 0.5 | | | 47,319 | | 0.6 | | | 48,095 | | 0.7 | |
1-4 family residential | | 896,252 | | 9.7 | | | 894,456 | | 9.9 | | | 858,693 | | 10.1 | | | 765,260 | | 9.6 | | | 604,408 | | 8.4 | |
Multi-family residential | | 432,209 | | 4.6 | | | 322,679 | | 3.6 | | | 252,244 | | 3.0 | | | 276,632 | | 3.5 | | | 272,250 | | 3.8 | |
Consumer | | 8,316 | | 0.1 | | | 7,806 | | 0.1 | | | 7,465 | | 0.1 | | | 7,520 | | 0.1 | | | 9,533 | | 0.1 | |
Total LHI | | $ | 9,252,670 | | 100 | % | | $ | 9,055,397 | | 100 | % | | $ | 8,530,747 | | 100 | % | | $ | 7,938,163 | | 100 | % | | $ | 7,155,477 | | 100 | % |
| | | | | | | | | | | | | | | | | | | | |
MW | | 437,501 | | | | 446,227 | | | | 523,805 | | | | 629,291 | | | | 542,877 | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total LHI1 | | $ | 9,690,171 | | | | $ | 9,501,624 | | | | $ | 9,054,552 | | | | $ | 8,567,454 | | | | $ | 7,698,354 | | |
| | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing | | $ | 2,212,389 | | 24.5 | % | | $ | 2,640,617 | | 28.9 | % | | $ | 2,811,412 | | 32.1 | % | | $ | 2,947,830 | | 34.6 | % | | $ | 2,765,895 | | 35.1 | % |
Interest-bearing transaction | | 866,609 | | 9.6 | | | 622,814 | | 6.8 | | | 603,729 | | 6.9 | | | 660,557 | | 7.8 | | | 599,580 | | 7.6 | |
Money market | | 2,518,922 | | 27.9 | | | 2,773,622 | | 30.4 | | | 2,701,762 | | 30.9 | | | 2,443,748 | | 28.7 | | | 2,301,350 | | 29.2 | |
Savings | | 106,480 | | 1.2 | | | 118,293 | | 1.3 | | | 132,407 | | 1.5 | | | 129,498 | | 1.5 | | | 129,922 | | 1.6 | |
Certificates and other time deposits | | 2,896,870 | | 32.1 | | | 2,086,642 | | 22.9 | | | 1,667,364 | | 19.1 | | | 1,562,626 | | 18.3 | | | 1,435,409 | | 18.2 | |
Correspondent money market accounts | | 433,468 | | 4.8 | | | 881,246 | | 9.7 | | | 831,770 | | 9.5 | | | 773,447 | | 9.1 | | | 657,440 | | 8.3 | |
Total deposits | | $ | 9,034,738 | | 100 | % | | $ | 9,123,234 | | 100 | % | | $ | 8,748,444 | | 100 | % | | $ | 8,517,706 | | 100 | % | | $ | 7,889,596 | | 100 | % |
| | | | | | | | | | | | | | | | | | | | |
Loan to Deposit Ratio | | 107.3 | % | | | | 104.1 | % | | | | 103.5 | % | | | | 100.6 | % | | | | 97.6 | % | | |
| | | | | | | | | | | | | | | | | | | | |
Loan to Deposit Ratio, excluding MW | | 102.4 | % | | | | 99.3 | % | | | | 97.5 | % | | | | 93.2 | % | | | | 90.7 | % | | |
1 Total LHI does not include deferred fees of $15.5 million, $19.0 million, $17.5 million, $15.0 million and $11.5 million at March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, respectively.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Asset Quality | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| For the Quarter Ended | | |
| Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 | | | | |
| (In thousands, except percentages) | | | | |
NPAs: | | | | | | | | | | | | | |
Nonaccrual loans | $ | 31,452 | | $ | 30,364 | | $ | 30,592 | | $ | 42,242 | | $ | 46,680 | | | | |
Nonaccrual PCD loans1 | 12,784 | | 13,178 | | — | | — | | — | | | | |
Accruing loans 90 or more days past due2 | 296 | | 125 | | — | | 1,753 | | 264 | | | | |
Total nonperforming loans held for investment (“NPLs”) | 44,532 | | 43,667 | | 30,592 | | 43,995 | | 46,944 | | | | |
OREO | — | | — | | — | | 1,032 | | 1,062 | | | | |
Total NPAs | $ | 44,532 | | $ | 43,667 | | $ | 30,592 | | $ | 45,027 | | $ | 48,006 | | | | |
| | | | | | | | | | | | | |
Charge-offs: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
OOCRE | $ | (116) | | $ | — | | $ | (1,061) | | $ | (244) | | $ | (1,341) | | | | |
NOOCRE | — | | (1,019) | | (838) | | — | | (553) | | | | |
Commercial | (1,051) | | (5,449) | | (460) | | (528) | | (3,294) | | | | |
Consumer | (62) | | (41) | | (19) | | (1,091) | | (134) | | | | |
Total charge-offs | (1,229) | | (6,509) | | (2,378) | | (1,863) | | (5,322) | | | | |
| | | | | | | | | | | | | |
Recoveries: | | | | | | | | | | | | | |
1-4 family residential | 1 | | 24 | | 4 | | 3 | | — | | | | |
OOCRE | — | | 26 | | — | | 245 | | — | | | | |
NOOCRE | — | | 229 | | 3 | | 93 | | 400 | | | | |
Commercial | 364 | | 415 | | 177 | | 572 | | 144 | | | | |
Consumer | 6 | | 30 | | 5 | | 41 | | 9 | | | | |
Total recoveries | 371 | | 724 | | 189 | | 954 | | 553 | | | | |
| | | | | | | | | | | | | |
Net charge-offs | $ | (858) | | $ | (5,785) | | $ | (2,189) | | $ | (909) | | $ | (4,769) | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
ACL | $ | 98,694 | | $ | 91,052 | | $ | 85,037 | | $ | 80,576 | | $ | 72,485 | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Asset Quality Ratios: | | | | | | | | | | | | | |
NPAs to total assets | 0.35 | % | | 0.36 | % | | 0.26 | % | | 0.40 | % | | 0.46 | % | | | | |
NPAs, excluding nonaccrual PCD loans, to total assets | 0.25 | | | 0.25 | | | 0.26 | | | 0.40 | | | 0.46 | | | | | |
NPLs to total LHI, excluding MW | 0.49 | | | 0.50 | | | 0.37 | | | 0.55 | | | 0.66 | | | | | |
NPLs, excluding nonaccrual PCD loans, to total LHI, excluding MW | 0.34 | | | 0.34 | | | 0.36 | | | 0.55 | | | 0.66 | | | | | |
ACL to total LHI, excluding MW | 1.07 | | | 1.01 | | | 1.00 | | | 1.02 | | | 1.02 | | | | | |
Net charge-offs to average loans outstanding3 | 0.04 | | | 0.28 | | | 0.12 | | | 0.04 | | | 0.28 | | | | | |
1 Nonaccrual PCD loans consist of PCD loans that transitioned upon adoption of ASC 326 and were accounted for on a pooled basis that have subsequently been placed on nonaccrual status.
2 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.
3Annualized ratio for quarterly metrics.
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 |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 |
| | (Dollars in thousands, except per share data) |
Tangible Common Equity | | | | | | | | | | |
Total stockholders' equity | | $ | 1,493,737 | | | $ | 1,449,773 | | | $ | 1,411,899 | | | $ | 1,429,442 | | | $ | 1,447,996 | |
Adjustments: | | | | | | | | | | |
Goodwill | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | |
Core deposit intangibles | | (35,808) | | | (38,247) | | | (40,684) | | | (43,122) | | | (45,560) | |
Tangible common equity | | $ | 1,053,477 | | | $ | 1,007,074 | | | $ | 966,763 | | | $ | 981,868 | | | $ | 997,984 | |
Common shares outstanding | | 54,229 | | | 54,030 | | | 53,988 | | | 53,951 | | | 53,907 | |
| | | | | | | | | | |
Book value per common share | | $ | 27.54 | | | $ | 26.83 | | | $ | 26.15 | | | $ | 26.50 | | | $ | 26.86 | |
Tangible book value per common share | | $ | 19.43 | | | $ | 18.64 | | | $ | 17.91 | | | $ | 18.20 | | | $ | 18.51 | |
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 |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 |
| | (Dollars in thousands) |
Tangible Common Equity | | | | | | | | | | |
Total stockholders' equity | | $ | 1,493,737 | | | $ | 1,449,773 | | | $ | 1,411,899 | | | $ | 1,429,442 | | | $ | 1,447,996 | |
Adjustments: | | | | | | | | | | |
Goodwill | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | |
Core deposit intangibles | | (35,808) | | | (38,247) | | | (40,684) | | | (43,122) | | | (45,560) | |
Tangible common equity | | $ | 1,053,477 | | | $ | 1,007,074 | | | $ | 966,763 | | | $ | 981,868 | | | $ | 997,984 | |
Tangible Assets | | | | | | | | | | |
Total assets | | $ | 12,609,487 | | | $ | 12,154,361 | | | $ | 11,714,454 | | | $ | 11,304,811 | | | $ | 10,453,680 | |
Adjustments: | | | | | | | | | | |
Goodwill | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | |
Core deposit intangibles | | (35,808) | | | (38,247) | | | (40,684) | | | (43,122) | | | (45,560) | |
Tangible Assets | | $ | 12,169,227 | | | $ | 11,711,662 | | | $ | 11,269,318 | | | $ | 10,857,237 | | | $ | 10,003,668 | |
Tangible Common Equity to Tangible Assets | | 8.66 | % | | 8.60 | % | | 8.58 | % | | 9.04 | % | | 9.98 | % |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Return on Average Tangible Common Equity. Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) net income available for common stockholders adjusted for amortization of core deposit intangibles (which we refer to as “return”) as net income, plus amortization of core deposit intangibles, less tax benefit at the statutory rate; (b) average tangible common equity as total average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.
We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of core deposit intangibles. 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 Quarter Ended | | |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 | | | | |
| | (Dollars in thousands) | | | | |
Net income available for common stockholders adjusted for amortization of core deposit intangibles | | | | | | | | | | | | | | |
Net income | | $ | 38,411 | | | $ | 39,897 | | | $ | 43,322 | | | $ | 29,626 | | | $ | 33,470 | | | | | |
Adjustments: | | | | | | | | | | | | | | |
Plus: Amortization of core deposit intangibles | | 2,438 | | | 2,438 | | | 2,438 | | | 2,438 | | | 2,438 | | | | | |
Less: Tax benefit at the statutory rate | | 512 | | | 512 | | | 512 | | | 512 | | | 512 | | | | | |
Net income available for common stockholders adjusted for amortization of core deposit intangibles | | $ | 40,337 | | | $ | 41,823 | | | $ | 45,248 | | | $ | 31,552 | | | $ | 35,396 | | | | | |
| | | | | | | | | | | | | | |
Average Tangible Common Equity | | | | | | | | | | | | | | |
Total average stockholders' equity | | $ | 1,476,576 | | | $ | 1,434,818 | | | $ | 1,453,816 | | | $ | 1,447,377 | | | $ | 1,357,448 | | | | | |
Adjustments: | | | | | | | | | | | | | | |
Average goodwill | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | (404,014) | | | | | |
Average core deposit intangibles | | (37,361) | | | (39,792) | | | (42,230) | | | (44,720) | | | (47,158) | | | | | |
Average tangible common equity | | $ | 1,034,763 | | | $ | 990,574 | | | $ | 1,007,134 | | | $ | 998,205 | | | $ | 906,276 | | | | | |
Return on Average Tangible Common Equity (Annualized) | | 15.81 | % | | 16.75 | % | | 17.82 | % | | 12.68 | % | | 15.84 | % | | | | |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Loans, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings, pre-tax, pre-provision operating earnings and the performance metrics calculated using these metrics, listed below, are non-GAAP measures used by management to evaluate the Company’s financial performance. We calculate (a) operating earnings as net income plus severance payments, plus loss on sale of debt securities AFS, net, less tax impact of adjustments, plus nonrecurring tax adjustments. We calculate (b) diluted operating earnings per share as operating earnings as described in clause (a) divided by weighted average diluted shares outstanding. We calculate (c) pre-tax, pre-provision operating earnings as operating earnings as described in clause (a) plus provision for income taxes, plus provision (benefit) for credit losses and unfunded commitments. We calculate (d) pre-tax, pre-provision operating return on average assets as pre-tax, pre-provision operating earnings as described in clause (a) divided by total average assets. We calculate (e) operating return on average assets as operating earnings as described in clause (a) divided by total average assets. We calculate (f) operating return on average tangible common equity as operating earnings as described in clause (a), adjusted for the amortization of intangibles and tax benefit at the statutory rate, divided by total average tangible common equity (average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization). We calculate (g) operating efficiency ratio as noninterest expense plus adjustments to operating noninterest expense divided by noninterest income plus adjustments to operating noninterest income, plus net interest income.
We believe that these measures and the operating metrics calculated utilizing these measures are important to management and many investors in the marketplace who are interested in understanding the ongoing operating performance of the Company and provide meaningful comparisons to its peers.
The following tables reconcile, as of the dates set forth below, operating net income and pre-tax, pre-provision operating earnings and related metrics:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended | | |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 | | | | |
| | (Dollars in thousands, except per share data) |
Operating Earnings | | | | | | | | | | | | | | |
Net income | | $ | 38,411 | | | $ | 39,897 | | | $ | 43,322 | | | $ | 29,626 | | | $ | 33,470 | | | | | |
| | | | | | | | | | | | | | |
Plus: Severance payments1 | | 835 | | | 630 | | | — | | | — | | | — | | | | | |
Plus: Loss on sale of debt securities AFS, net | | 5,321 | | | — | | | — | | | — | | | — | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Plus: M&A expenses | | — | | | — | | | 384 | | | 295 | | | 700 | | | | | |
Operating pre-tax income | | 44,567 | | | 40,527 | | | 43,706 | | | 29,921 | | | 34,170 | | | | | |
Less: Tax impact of adjustments | | 1,293 | | | 132 | | | 81 | | | 66 | | | 156 | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Operating earnings | | $ | 43,274 | | | $ | 40,395 | | | $ | 43,625 | | | $ | 29,855 | | | $ | 34,014 | | | | | |
| | | | | | | | | | | | | | |
Weighted average diluted shares outstanding | | 54,606 | | | 54,780 | | | 54,633 | | | 54,646 | | | 51,571 | | | | | |
Diluted EPS | | $ | 0.70 | | | $ | 0.73 | | | $ | 0.79 | | | $ | 0.54 | | | $ | 0.65 | | | | | |
Diluted operating EPS | | $ | 0.79 | | | $ | 0.74 | | | $ | 0.80 | | | $ | 0.55 | | | $ | 0.66 | | | | | |
1 Severance payments relate to certain restructurings made during the periods disclosed.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended | | |
| | Mar 31, 2023 | | Dec 31, 2022 | | Sep 30, 2022 | | Jun 30, 2022 | | Mar 31, 2022 | | | | |
| | (Dollars in thousands) |
Pre-Tax, Pre-Provision Operating Earnings | | | | | | | | | | | | | | |
Net income | | $ | 38,411 | | | $ | 39,897 | | | $ | 43,322 | | | $ | 29,626 | | | $ | 33,470 | | | | | |
Plus: Provision for income taxes | | 11,012 | | | 11,890 | | | 12,248 | | | 8,079 | | | 8,102 | | | | | |
Plus: Provision (benefit) for credit losses and unfunded commitments | | 10,882 | | | 11,277 | | | 7,500 | | | 9,000 | | | (7) | | | | | |
Plus: Severance payments | | 835 | | | 630 | | | — | | | — | | | — | | | | | |
| | | | | | | | | | | | | | |
Plus: Loss on sale of debt securities AFS, net | | 5,321 | | | — | | | — | | | — | | | — | | | | | |
| | | | | | | | | | | | | | |
Plus: M&A expenses | | — | | | — | | | 384 | | | 295 | | | 700 | | | | | |
Pre-tax, pre-provision operating earnings | | $ | 66,461 | | | $ | 63,694 | | | $ | 63,454 | | | $ | 47,000 | | | $ | 42,265 | | | | | |
| | | | | | | | | | | | | | |
Average total assets | | $ | 12,214,313 | | | $ | 11,761,044 | | | $ | 11,460,857 | | | $ | 10,711,663 | | | $ | 9,998,922 | | | | | |
Pre-tax, pre-provision operating return on average assets1 | | 2.21 | % | | 2.15 | % | | 2.20 | % | | 1.76 | % | | 1.71 | % | | | | |
| | | | | | | | | | | | | | |
Average loans | | $ | 9,501,309 | | | $ | 9,103,552 | | | $ | 8,729,093 | | | $ | 8,038,153 | | | $ | 7,325,958 | | | | | |
Pre-tax, pre-provision operating return on average loans1 | | 2.84 | % | | 2.78 | % | | 2.88 | % | | 2.35 | % | | 2.34 | % | | | | |
| | | | | | | | | | | | | | |
Average total assets | | $ | 12,214,313 | | | $ | 11,761,044 | | | $ | 11,460,857 | | | $ | 10,711,663 | | | $ | 9,998,922 | | | | | |
Return on average assets1 | | 1.28 | % | | 1.35 | % | | 1.50 | % | | 1.11 | % | | 1.36 | % | | | | |
Operating return on average assets1 | | 1.44 | | | 1.36 | | | 1.51 | | | 1.12 | | | 1.38 | | | | | |
| | | | | | | | | | | | | | |
Operating earnings adjusted for amortization of core deposit intangibles | | | | | | | | | | | | | | |
Operating earnings | | $ | 43,274 | | | $ | 40,395 | | | $ | 43,625 | | | $ | 29,855 | | | $ | 34,014 | | | | | |
Adjustments: | | | | | | | | | | | | | | |
Plus: Amortization of core deposit intangibles | | 2,438 | | | 2,438 | | | 2,438 | | | 2,438 | | | 2,438 | | | | | |
Less: Tax benefit at the statutory rate | | 512 | | | 512 | | | 512 | | | 512 | | | 512 | | | | | |
Operating earnings adjusted for amortization of core deposit intangibles | | $ | 45,200 | | | $ | 42,321 | | | $ | 45,551 | | | $ | 31,781 | | | $ | 35,940 | | | | | |
| | | | | | | | | | | | | | |
Average Tangible Common Equity | | | | | | | | | | | | | | |
Total average stockholders' equity | | $ | 1,476,576 | | | $ | 1,434,818 | | | $ | 1,453,816 | | | $ | 1,447,377 | | | $ | 1,357,448 | | | | | |
Adjustments: | | | | | | | | | | | | | | |
Less: Average goodwill | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | (404,014) | | | | | |
Less: Average core deposit intangibles | | (37,361) | | | (39,792) | | | (42,230) | | | (44,720) | | | (47,158) | | | | | |
Average tangible common equity | | $ | 1,034,763 | | | $ | 990,574 | | | $ | 1,007,134 | | | $ | 998,205 | | | $ | 906,276 | | | | | |
Operating return on average tangible common equity1 | | 17.72 | % | | 16.95 | % | | 17.94 | % | | 12.77 | % | | 16.08 | % | | | | |
| | | | | | | | | | | | | | |
Efficiency ratio | | 48.42 | % | | 47.63 | % | | 44.71 | % | | 50.76 | % | | 52.84 | % | | | | |
| | | | | | | | | | | | | | |
Net interest income | | $ | 103,389 | | | $ | 106,097 | | | $ | 101,040 | | | $ | 84,480 | | | $ | 73,040 | | | | | |
Noninterest income | | 13,531 | | | 14,326 | | | 13,021 | | | 10,378 | | | 15,097 | | | | | |
Plus: Loss on sale of AFS securities, net | | 5,321 | | | — | | | — | | | — | | | — | | | | | |
| | | | | | | | | | | | | | |
Operating noninterest income | | 18,852 | | | 14,326 | | | 13,021 | | | 10,378 | | | 15,097 | | | | | |
Noninterest expense | | 56,615 | | | 57,359 | | | 50,991 | | | 48,153 | | | 46,572 | | | | | |
Less: Severance payments | | 835 | | | 630 | | | — | | | — | | | — | | | | | |
Less: M&A expenses | | — | | | — | | | 384 | | | 295 | | | 700 | | | | | |
Operating noninterest expense | | $ | 55,780 | | | $ | 56,729 | | | $ | 50,607 | | | $ | 47,858 | | | $ | 45,872 | | | | | |
Operating efficiency ratio | | 45.63 | % | | 47.11 | % | | 44.37 | % | | 50.45 | % | | 52.05 | % | | | | |
1 Annualized ratio for quarterly metrics.
a1q23investorpresentatio
4/25/2023 14/25/2023 1 TRUTH | INTEGRITY | TRANSPARENCY First Quarter Earnings Exhibit 99.2
2 Safe Harbor and Non-GAAP Measures Forward-looking statements This presentation includes “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors, which change over time and are beyond our control, that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to the expected payment of Veritex Holdings, Inc.’s (“Veritex”) quarterly cash dividend; the impact of certain changes in Veritex’s accounting policies, standards and interpretations; the effects of the COVID-19 pandemic and actions taken in response thereto; a continuation of recent turmoil in the banking industry, responsive measures to mitigate and manage it and related supervisory and regulatory actions and costs and Veritex’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,” “seeks,” “targets,” “outlooks,” “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 Veritex’s Annual Report on Form 10-K for the year ended December 31, 2022 and any updates to those risk factors set forth in Veritex’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 Veritex’s underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex 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. Veritex does not undertake any obligation, and specifically declines any obligation, to supplement, 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 presentation 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 Veritex or persons acting on Veritex’s behalf may issue. This presentation also includes industry and trade association data, forecasts and information that Veritex has prepared based, in part, upon data, forecasts and information obtained from independent trade associations, industry publications and surveys, government agencies and other information publicly available to Veritex, which information may be specific to particular markets or geographic locations. Some data is also based on Veritex's good faith estimates, which are derived from Veritex management's knowledge of the industry, markets and independent sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. Although Veritex believes these sources are reliable, Veritex has not independently verified the information contained therein. While Veritex is not aware of any misstatements regarding the industry data, forecasts and information included in this presentation, such data forecasts, and information and Veritex's estimates based thereon involve risks, assumptions and uncertainties and are subject to change based on various factors. Veritex does not undertake any obligation, and specifically declines any obligation, to supplement, update or revise such data forecasts, and information and Veritex's estimates based thereon, whether as a result of new information, future developments or otherwise, except as required by law. Non-GAAP Financial Measures This presentation contains certain non-GAAP (generally accepted accounting principles) financial measures, including tangible book value per common share (“TBVPS”), tangible common equity to tangible assets, return on average tangible common equity (“ROATCE”), operating earnings, pre-tax, pre-provision (“PTPP”) operating earnings, diluted operating earnings per shares (“EPS”), operating return on average assets (“ROAA”), PTPP operating ROAA, Operating ROATCE, operating efficiency ratio, operating noninterest income, operating noninterest expense and adjusted net interest margin (“NIM”). Veritex’s management uses these non-GAAP financial measures to evaluate its operating performance and provide information that is important to investors. The non-GAAP financial measures that Veritex discusses in this presentation should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Please see “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for reconciliations of non-GAAP measures to the most directly comparable financial measures calculated in accordance with GAAP.
3 Truth in Texas Banking Dallas / Ft. Worth Houston (31) Branches $12.6B Asset size (↑ $455.1 MM1) 1 Compared to December 31, 2022. Veritex Holdings, Inc. First Quarter 2023 Snapshot 2.21% PTPP ROAA1 (↑ 6 bps1) 12.7% 4-year CAGR TBV, including dividends 1Q23 TBV $19.43 (↑ 62%) Total deposits down less than 1% for 1Q23 $5.2B in available liquidity at 4/17/23 for ~150% uninsured deposit coverage 0.35% NPAs to Total Assets (↓ 1 bp from 4Q22/ ↓11 bps from 1Q22)
4 First Quarter Highlights First Quarter 2022 Fourth Quarter 2022 Operating First Quarter 20231First Quarter 2023Financial Highlights ($M) 73.0106.1103.4103.4Net Interest Income 15.114.318.9113.5Non-Interest Revenue 88.1120.4122.3116.9Total Revenue 46.557.355.8156.6Non-Interest Expense 41.663.166.560.3PTPP -11.310.910.9Provision for Credit Losses 8.111.912.211.0Income Tax Expense 33.539.943.438.4Net Income First Quarter 2022Fourth Quarter 2022First Quarter 2023Key Performance Metrics 0.650.730.70Diluted EPS 26.8626.8327.54BVPS ($) 1.361.351.28ROAA (%) 52.847.648.4Efficiency Ratio (%) 15.816.815.8ROATCE (%) First Quarter 2022Fourth Quarter 2022First Quarter 2023Key Operating Performance Metrics1 0.660.740.79Operating Diluted EPS 18.5118.6419.43TBVPS ($) 1.381.361.44Operating ROAA (%) 52.147.145.6Operating Efficiency Ratio (%) 16.116.917.7Operating ROATCE (%) 1 Excludes loss on sale of debt securities, AFS, net and severance payments. Please refer to the “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a description and reconciliation of these non-GAAP financial measures
5 Q1 Financial Metrics 1 Please refer to the “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a description and reconciliation of these non-GAAP financial measures PTPP Return on Average Assets1 $0.65 $0.54 $0.79 $0.73 $0.70 $0.66 $0.55 $0.80 $0.74 $0.79 1Q22 2Q22 3Q22 4Q22 1Q23 Diluted EPS Diluted Operating EPS Diluted Earnings Per Share1 52.8% 50.8% 44.7% 47.6% 48.4% 52.1% 50.5% 44.4% 47.1% 45.6% 1Q22 2Q22 3Q22 4Q22 1Q23 Reported Operating Efficiency Ratio1 $42.3 $47.0 $63.5 $63.7 $66.5 1.71% 1.76% 2.20% 2.15% 2.21% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 1Q22 2Q22 3Q22 4Q22 1Q23 PTPP Operating Earnings PTPP Operating ROAA $18.51 $18.20 $17.91 $18.64 $19.43 1Q22 2Q22 3Q22 4Q22 1Q23 TBVPS1
6 Healthy Liquidity & Funding Capacity 5 Core Deposits ($ in millions) 5 Non-Core Funding1 ($ in millions) re e sits 5 Cash and Borrowing Capacity ($ in millions) • Well positioned to weather current environment • Holding $791 million in Fed cash as of April 17th; normally hold approximately $300 million in Fed cash • No borrowings from Federal Reserve lending facilities in 2023 1 Includes CMMA, brokered deposits and FHLB borrowings $6,898 $7,046 $6,951 $6,826 $6,821 $6,915 $6,700 $6,750 $6,800 $6,850 $6,900 $6,950 $7,000 $7,050 $7,100 12/31/2022 3/8/2023 3/13/2023 3/28/2023 3/31/2023 4/17/2023 $3,364 $3,187 $3,914 $3,974 $3,870 $3,716 $2,500 $3,000 $3,500 $4,000 $4,500 12/31/2022 3/8/2023 3/13/2023 3/28/2023 3/31/2023 4/17/2023 $3,245 $3,775 $3, 42 $4,431 $4,191 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 12/31/2022 3/8/2023 3/13/2023 3/28/2023 3/31/2023 4/17/2023 $5.2B
7 ($ in billions) Deposit Detail 5 Deposit Composition $9.1 25% 42% 52% 63% 15% 27% 36% 46% Interest Bearing Deposits Total Deposits Cumulative change in deposit costs over cumulative change in average Fed Funds effective 5 Rate Hike Beta Trends Int. Bearing Rate Total Deposit Rate Average Fed Funds Effective 5 Rates and Average Fed Funds Effective 4.53% 3.06% 2.24% 0.76% 0.43% 0.28% Spot rate for total deposits as of March 31st was 2.58% $2.9 $2.3 $3.5 $9.0 $6.5 $7.4 $9.0 $0.4 $2.9 $2.2 $3.5 $0.4 $9.1 2020 2021 2022 1Q23 17-Apr Interest Bearing Noninterest bearing Correspondent Money Market Certificates & Time Deposits 31% 5% 25% 39% $1,345 $3,492 $2,766 $2,212 $882 $433 $2,897 $2,897 1Q22 1Q23 Interest Bearing Noninterest bearing Correspondent Money Market Certificates & Time Deposits $7.9 +15%
8 Veritex Average Account Balance: $132 Thousand1 Uninsured/Uncollateralized Deposits 5 FDIC Uninsured Percentage Total Deposits - $9.0 Billion (down 0.97% from 4Q22) 5 Average Client Balances 1 Excludes CMMA, public funds, reciprocal deposits and internal deposits. As of March 31, 2023. Veritex uninsured deposits as of April 17, 2023 $44 $182 $143 $213 Consumer NMD Deposits Consumer Term Deposits Commercial NMD Deposits Commercial Term Deposits 5 Coverage Ratio of Uninsured and Uncollateralized Deposits Total Deposits 9,134,877 Less: Insured and/or Collateralized Deposits 5,623,905 Total Deposits – Uninsured / Uncollateralized 3,510,972 Estimated Liquidity Available for Uninsured Deposits: Cash & Cash Equivalents 852,902 FHLB, Fed Discount Window and Fed BTFP Program Availability 4,149,503 Fed Funds Lines Availability 75,000 Unpledged Bonds 144,603 Estimated Liquidity Available for Uninsured Deposits 5,222,008 Coverage Ratio of Uninsured and Uncollateralized Deposits 149% As of April 17, 2023
9 Lending in Growing Texas Market Loan Growth ($B) CAGR 25% 27% 8% 32% 20% 10% 3% $6.0 $6.3 $6.6 $6.8 $7.1 $7.9 $8.5 $9.1 $9.3 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 NOOCRE OOCRE Commercial Construction 1-4 Fam Multi Fam Other (<1%) $ 1.3 $ 1.7 $ 1.7 $ 1.1 $ 0.3 $ 0.4 $ 0.4 $ 0.5 $ 0.4 $ 0.3 1Q22 2Q22 3Q22 4Q22 1Q23 Loan Production ($B) Loan Payoffs ($B) Loan Production and Loan Payoff Levels CRE ADC Construction LOC Current Unfunded (Non-Revolving) 1Q22 2Q22 3Q22 4Q22 1Q23 Quarterly Average Balances $1 .5 B ill io n $1 .8 B ill io n
10 1Q23 Loan Production % Production by Loan Type 43% 29% 10% 10% 5% 3% Commercial & Industrial Construction & Land NOOCRE 1-4 Family Residential OOCRE Multifamily Q1 Production Distribution
11 $84.5 $101.0 $106.1 $103.4 3.22% 3.42% 3.77% 3.87% 3.69% 1Q22 2Q22 3Q22 4Q22 1Q23 Net Interest Income ("NII") NIM $73.0 $9.9 $10.6 $10.9 1Q22 2Q22 3Q22 4Q22 1Q23 Average Earning Assets $9.2 $11.4 ($ in billions) ($ in millions) 4Q22 v 1Q23 $106,098Beginning Net Interest Income 14,088Impact of loan rate changes 2,009Impact of growth (15,350)Impact of deposit rate changes (2,298)Change due to day count (711)Impact of nonaccrual interest reversal (385)Change in earning asset mix and other (62)Impact of cash excess retained $103,389Ending Net Interest Income 23+% ($ in thousand) Average Earnings Assets Net Interest Income Rollforward Interest Rate Sensitivity1 Net Interest Income Quarter ending earning assets $11.8 1 Interest rate sensitivity is calculated using a static rate shock. Reflects market conditions, including deposit competition, and change in funding mix 1Q23 4Q22 1Q23 4Q22 Interest Rate Shock Scenario Percentage Change From Base Percentage Change From Base EVE Shock Scenario Percentage Change From Base Percentage Change From Base Up 200 bps 7.81% 8.87% Up 200 bps 1.49% 3.36% Up 100 bps 3.93% 4.47% Up 100 bps 0.95% 1.77% BASE CASE 0.00% 0.00% BASE CASE 0.00% 0.00% Down 100 bps -4.42% -4.71% Down 100 bps -1.53% -2.55% Down 200 bps -9.26% -10.01% Down 200 bps -3.69% -6.48%
12 5 Quarter Trend, exc. MW and PPP Debt Investment Yields Variable and Hybrid Loans by Index Interest Rate Components of Loans and Investments 2.76% 2.93% 3.05% 3.36% 3.56% 1Q22 2Q22 3Q22 4Q22 1Q23 4.02% 4.16% 5.01% 5.98% 6.51% 0.17% 0.28% 0.76% 1.46% 2.24% 1Q22 2Q22 3Q22 4Q22 1Q23 Average Loan Yield Average Cost of Total Deposits 5 quarter investment yield trend Average loan yield 7.56% during 1Q23, up 23 bps from 4Q22; 79% Floating rate loans1 Production Rates 0. 13 % 3. 62 % 0. 93 % 4. 36 % 2. 27 % 5. 69 % 3. 24 % 7. 33 % 3. 96 % 7. 56 % 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% Deposit Rate Loan Rate Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Variable and Hybrid Loans by Rate Index Amount (in millions) % of Variable and Hybrid Loans 1-Month LIBOR 698.7$ 9.5% 12-Month LIBOR 241.5$ 3.3% 1-Month SOFR 4,460.0$ 60.8% Overnight SOFR 109.2$ 1.5% Prime Rate 1,608.3$ 21.9% Other 215.3$ 2.9% Total Variable and Hybrid Loans 7,333.0$ 100.0% 1 Floating rate loans percentage excludes MW.
13 Investment Portfolio Total Debt Investment Portfolio - $1.15 Billion 5 Debt Investments as % of Total Assets 90.9% 9.1% Other Assets Investment Portfolio Total Assets: $12.6 Billion AFS: $966.1 Million HTM: $184.8 Million Total Mark to Market: $88.6 Million1 ACL Credit Mark: $885 Thousand2 • Investment portfolio represents 9% of Total Assets • 84.3% of the portfolio is available for sale • Effective duration is 4.01 years • Portfolio yield is 3.56% • Current mark to market represents less than 8.5% of Tangible Common Equity 1 Total mark to market is comprised of $70.2 million in AFS securities already included in tangible common equity and $18.4 in HTM securities. 2 Solely made up of credit marks on our corporate bond portfolio.
14 Operating Noninterest Income/Expense ◊ Government guaranteed loan income increased $1.9 million primarily due to increases in the gain on sale of USDA loans through our wholly owned subsidiary, North Avenue Capital, LLC. ◊ Customer swap income decreased $2.1 million primarily due to decreased trades executed during 1Q23 compared to 4Q22. ◊ Equity method investment (loss) income decreased by $3.9 million. We have a 49% equity method investment in Thrive Mortgage, LLC, and the decrease is a direct result of their focus on managing expenses and capitalizing on profitable products during the current rate environment throughout the first part of 2023. 1Q23 / 4Q22 Noninterest Income Comparison $18,852 Note: Excludes noninterest income line items in a loss position ◊ Salaries and employee benefits decreased $1.8 million, or 5.4%, from 4Q22 primarily due to a decrease in lender incentive as a result of slowed loan growth. ◊ Data processing and software expenses increase by $523 thousand, or 12.4%, from 4Q22 primarily due to upgrades in technology systems as we continue to grow and implement more user-friendly platforms for our customers. 58% 56% 11% 12% 9% 9% 7% 8% 8% 8% 4% 4%3% 3% 4Q22 1Q23 Salary and Employee Benefits Other Occupancy and Equip. Data Processing Prof. Fees Amort. Of Intang. Marketing $56,729 $55,780 1Q23 / 4Q22 Noninterest Expense Comparison Efficiency ratio 48.4%; Operating efficiency ratio 45.6% 36% 24% 10% 55% 48% 1% 14% 17% 4Q22 1Q23 Service Charges & Fees on Deposit Accounts Loan Fees Govt. Guaranteed Loan Income Customer Swap Income Other Gain on MLHFS 26% 13% 40% 10% $14,326 11%
15 ($ in millions) Gain on Sale % Total Volume $565 $627 $604 $414 $426 1Q22 2Q22 3Q22 4Q22 1Q23 3.31% 3.41% 2.81% 1.89% 2.95% 1Q22 2Q22 3Q22 4Q22 1Q23 ($ in millions) (Investment completed on July 19, 2021) Government Guaranteed and Thrive Thrive Mortgage, LLC 5 Government Guaranteed SBA Pipeline Quarter over Quarter $56.8 $7.1 $26.2 1Q23 Highlights - Loan units are up 7.3% compared to 4Q22 - Continued reduction in expenses across the organization - Long dated locks, which are no longer being entered into, represented 50% of the 1Q23 loss reported $137.1 $13.6 4Q22 1Q23 USDA Pipeline Quarter over Quarter $291.9 $418.1 $185.3 $427.7 $284.4 $123.2 4Q22 1Q23 1Q23 Gain on Sale was $9.4 million $835.3 Million$895.3 Million $90.1Million $150.7 Million ($5,416)Equity Method 49% Interest Q4 Loss 2,443Improved Gain on Sale 1,439Impact of Lower G&A Expenses 14Other ($1,520)Equity Method 49% Interest Q1 Loss
16 Capital Capital Levels TBVPS 18.50% 14.50% 11.50% Total Capital Tier 1 Capital CET1 Capital 11.99% 9.56% 9.32% 11.42% 8.99% 8.74% $0.71 $0.17 $0.11 $0.04 $0.05 12/31/2022 Net Income AFS AOCI Hedge AOCI CDI Amort. SBC Expense Dividend RSU Vestings 3/31/2023 $18.64 $(0.20) $19.43 1 Please refer to the “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a description and reconciliation of these non-GAAP financial measures. Includes impact of AFS and HTM securities. $(0.09) Total Capital Comparison $1 ,4 38 $1 ,3 96 $1 ,2 76 VHI Total Capital 1Q23 4Q22 1Q22 $1 ,4 24 $1 ,3 68 $1 ,2 45 Bank Total Capital 1Q23 4Q22 1Q22 Low exposure to unrealized securities losses due to small portfolio size and moderate effective duration Minimum with conservation buffer Minimum with conservation buffer Minimum with conservation buffer Veritex, including AOCI Veritex, including AOCI Veritex, including AOCI Veritex, as reported Veritex, as reported Veritex, as reported
17 Current Expected Credit Losses Total Loan Balances1 up 2.2% from December 31, 2022 and ACL to Total Loans1 up 8.4% from December 31, 2022 1.07% reflects current outlook on economy and recessionary risk 1Q23 ACL - 40% Baseline and 60% downside Moody’s forecast scenarios Allowance for Credit Losses % of Loans Off-Balance Sheet Total At March 31, 2022 $ 72,485 1.02% 9,758$ 82,243$ Net Charge-offs (909) - - (909) 2Q22 Provision 9,000 - - 9,000 At June 30, 2022 80,576 1.02% 9,758 90,334 Net Charge-offs (2,189) - - (2,189) 3Q22 Provision 6,650 - 850 7,500 At September 30, 2022 85,037 1.00% 10,608 95,645 Net Charge-offs (5,785) - - (5,785) 4Q22 Provision 11,800 - (523) 11,277 At December 31, 2022 91,052 1.01% 10,085 101,137 Net Charge-offs (858) - - (858) 1Q23 Provision 8,500 - 1,497 9,997 At March 31, 2023 $ 98,694 1.07% $ 11,582 110,276$ 1 Total loans exclude MW loans.
18 1 Past due loans exclude purchased credit deteriorated loans that are accounted for on a pooled basis and non-accrual loans. 2 Total loans excludes Loans Held for Sale, MW and PPP loans. 1Q22 2Q22 3Q22 4Q22 1Q23 0.00% 0.10% 0.20% 0.30% 30-59 Past Due 60-89 Past Due 90+ Past Due 1Q22 2Q22 3Q22 4Q22 1Q23 Orig. $- $298 $62 $- $844 Acq. $4,769 $611 $2,127 $5,785 $14 4 bps ($ in thousands) (% to average loans outstanding and annualized for quarters) $15,287$21,468$5,352$7,373$16,921Totals: Asset Quality Past Due Trend1 % of Total Loans2 Net Charge-offs 28 bps 12 bps 28 bps 4 bps ($ in millions) ($ in millions) $48.0 $45.0 $30.6 $43.6 $44.5 0.46% 0.40% 0.26% 0.36% 0.35% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 1Q22 2Q22 3Q22 4Q22 1Q23 NPAs NPAs/Total Assets NPAs / Total Assets NPAs include $12.8 million of PCD loans at 1Q23 $340.9 $330.1 $312.0 $473.0 $432.0 1Q22 2Q22 3Q22 4Q22 1Q23 $100 $200 $300 $400 $500 Criticized Loans ($ in millions, excludes PCD loans) Quarterly Criticized Loans 90% of NCO’s during the presented periods have been acquired credits -9%
19 CRE In-depth Snapshot 1 Facts disclosed are based on a deep dive analysis of loans greater than $1 million per each deep dive CRE portfolio. 2 Percentage of construction for Office is tenant finished projects with leasing underway. CRE Segment Total Commitment Total Outstanding Average Loan Size1 # of Loans1 Average LTV1 % of Total Loans, exc. MW1 Industrial $1.7 B $1.1 B $6.8 MM 162 55% 11.9% Multifamily $1.7 B $1.0 B $14.4 MM 118 54% 10.1% Retail $894.6 MM $778.0 MM $4.9 MM 146 58% 8.0% Office $736.3 MM $645.3 MM $8.4 MM 67 56% 6.6% Hospitality $447.1 MM $405.4 MM $3.9 MM 105 57% 4.4% Totals $5.6 B $4.0 B $6.9 MM 598 Additional Information: CRE Segment Class1 Geographical Location1 Average DSCR1 % Construction1 Classifieds NPAs Industrial 88% A 8% B 4% C 38% DFW 21% Houston 14% Secondary TX 27% OOS 1.99x 48% $3.3 MM - Multifamily 78% A 11% B 11% C 24% DFW 43% Houston 20% Secondary TX 13% OOS 1.49x 65% $15.7 MM - Retail 57%A 35% B 8% C 24% DFW 33% Houston 18% Secondary TX 25% OOS 1.65x 15% $12.2 MM - Office 62% A 33% B 5% C 57% DFW 27% Houston 8% Secondary TX 8% OOS 1.67x 12%2 $68.7 MM $13.6 MM Hospitality 32% Upscale 31% Luxury 28% Midscale 9% Economy 38% DFW 6% Houston 25% Secondary TX 31% OOS 1.65x 4% $30.1 MM -
4/25/2023 204/25/2023 20 TRUTH | INTEGRITY | TRANSPARENCY Supplemental Information
21 Reconciliation of Non-GAAP Financial Measures
22 Reconciliation of Non-GAAP Financial Measures
23 Reconciliation of Non-GAAP Financial Measures
24 Reconciliation of Non-GAAP Financial Measures
25 Reconciliation of Non-GAAP Financial Measures
4/25/2023 264/25/2023 26 TRUTH | INTEGRITY | TRANSPARENCY First Quarter Exhibit 99.2
DocumentPRESS RELEASE
FOR IMMEDIATE RELEASE
Veritex Holdings, Inc. Declares Cash Dividend on Common Stock
Dallas, TX – April 25, 2023 – Veritex Holdings, Inc. (Nasdaq: VBTX) (“Veritex” or the “Company”), the parent holding company for Veritex Community Bank, today announced 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 May 25, 2023 to shareholders of record as of May 11, 2023.
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.
Forward Looking Statement
This press release includes “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements include statements regarding Veritex’s projected plans and objectives, including the expected payment date of its common stock dividend. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “seek,” “plan,” “outlook,” “continue,” “positions,” “prospects” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could” or “may”, or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time and are beyond Veritex’s control. Forward-looking statements speak only as of the date they are made and Veritex assumes no duty to supplement, update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
Source: Veritex Holdings, Inc.
Investor Relations:
972-349-6132
investorrelations@veritexbank.com