vbtx-202404230001501570false00015015702024-04-232024-04-23
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 23, 2024
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 23, 2024, 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 first quarter and year ended March 31, 2024. 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 24, 2024, 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 23, 2024. 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 23, 2024, 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 24, 2024 to shareholders of record as of the close of business on May 10, 2024. The press release is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
Forward Looking Statement
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; turmoil in the banking industry, responsive measures to mitigate and manage such turmoil 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, 2023 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.
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. | | |
| | |
By: | | /s/ C. Malcolm Holland, III |
| | C. Malcolm Holland, III |
| | Chairman and Chief Executive Officer |
Date: | | April 23, 2024 |
DocumentVERITEX HOLDINGS, INC. REPORTS FIRST QUARTER 2024 OPERATING RESULTS
Dallas, TX — April 23, 2024 —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, 2024.
“I am encouraged with the start of 2024. We continue to execute on our strategic positioning of our balance sheet with growth in deposits, capital and loans”, said C. Malcolm Holland, III. “Credit metrics remain stable and show positive trends as we gain momentum moving into the second quarter.”
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| | Quarter to Date | | |
| | Q1 2024 | | Q4 2023 | | Q1 2023 | | | | |
| | (Dollars in thousands, except per share data) (unaudited) |
GAAP | | | | | | | | | | |
Net income | | $ | 24,156 | | | $ | 3,499 | | | $ | 38,411 | | | | | |
Diluted EPS | | 0.44 | | | 0.06 | | | 0.70 | | | | | |
Book value per common share | | 28.23 | | | 28.18 | | | 27.54 | | | | | |
Return on average assets1 | | 0.79 | % | | 0.11 | % | | 1.28 | % | | | | |
Return on average equity1 | | 6.33 | | | 0.92 | | | 10.55 | | | | | |
Efficiency ratio | | 62.45 | | | 77.49 | | | 48.42 | | | | | |
Non-GAAP2 | | | | | | | | | | |
Operating earnings | | $ | 29,137 | | | $ | 31,625 | | | $ | 43,274 | | | | | |
Diluted operating EPS | | 0.53 | | | 0.58 | | | 0.79 | | | | | |
Tangible book value per common share | | 20.33 | | | 20.21 | | | 19.43 | | | | | |
Pre-tax, pre-provision operating earnings | | 43,656 | | | 47,688 | | | 66,382 | | | | | |
Pre-tax, pre-provision operating return on average assets1 | | 1.42 | % | | 1.54 | % | | 2.20 | % | | | | |
Pre-tax, pre-provision operating return on average loans1 | | 1.84 | | | 1.97 | | | 2.83 | | | | | |
Operating return on average assets1 | | 0.95 | | | 1.02 | | | 1.44 | | | | | |
Return on average tangible common equity1 | | 9.52 | | | 2.00 | | | 15.81 | | | | | |
Operating return on average tangible common equity1 | | 11.34 | | | 12.37 | | | 17.72 | | | | | |
Operating efficiency ratio | | 58.73 | | | 55.50 | | | 45.63 | | | | | |
1 Annualized ratio.
2 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.
Other First Quarter Metrics and Company Highlights
•Total deposits grew $1.62 billion, or 18%, compared to March 31, 2023;
•Total loans grew $46.4 million, or 0.5%, compared to March 31, 2023;
•Loan to deposit ratio decreased to 91.7% as of March 31, 2024 compared to 93.6% as of December 31, 2023 and 107.7% as of March 31, 2023;
•Loan to deposit ratio, excluding mortgage warehouse loans, decreased to 86.9% as of March 31, 2024 compared to 89.1% as of December 31, 2023 and 102.4% as of March 31, 2023;
•Tangible book value per common share increased 0.6%, or $0.12, as of March 31, 2024 compared to December 31, 2023, and increased 4.63% or $0.90 as of March 31, 2023;
•Allowance for credit losses (“ACL”) to total loans increased to 1.15%, compared to 1.14% as of December 31, 2023 and 1.02% as of March 31, 2023;
•Pre-tax, pre-provision operating return on average assets was 1.42% as of March 31, 2024;
•Announced authorization of a stock buyback program on March 28, 2024 to purchase up to $50 million of outstanding common stock over the course of a year as the Company deems appropriate;
•Sold $120.1 million of lower-yielding available-for-sale (“AFS”) debt securities with a 3.11% average yield and reinvested the proceeds in higher yielding AFS securities with a 6.24% average yield; and
•Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on May 24, 2024.
Results of Operations for the Three Months Ended March 31, 2024
Net Interest Income
For the three months ended March 31, 2024, net interest income before provision for credit losses was $92.8 million and net interest margin was 3.24% compared to $95.5 million and 3.31%, respectively, for the three months ended December 31, 2023. The $2.7 million decrease, or 2.9%, in net interest income before provision for credit losses was primarily due to a $3.5 million decrease in interest income on loans driven by a decrease in loan yields, a $817 thousand decrease in interest income on equity securities and other investments and a $559 thousand increase in interest expense on transaction and savings deposits driven by an increase in funding costs on deposits. The decrease in net interest income was partially offset by a $1.4 million increase in interest income on debt securities and a $1.2 million decrease on advances from the Federal Home Loan Bank (“FHLB”), during the three months ended March 31, 2024. Net interest margin decreased 7 bps compared to the three months ended December 31, 2023, primarily due to the increase in funding costs on deposits during three months ended March 31, 2024, partially offset by an increase in debt securities.
Compared to the three months ended March 31, 2023, net interest income before provision for credit losses for the three months ended March 31, 2024 decreased by $10.6 million, or 10.2%. The decrease was primarily due to a $19.5 million increase in interest expense on certificates and other time deposits, a $16.9 million increase in interest expense on transaction and savings deposits and a $508 thousand decrease in interest income on equity securities and other investments. The decrease was partially offset by a $11.0 million decrease in advances from FHLB, a $10.2 million increase in interest income on loans driven by an increase in loan yields and average balances, a $2.7 million increase in interest income on debt securities and a $2.5 million increase in interest income on deposits in financial institutions and fed funds sold. Net interest margin decreased 45 bps from 3.69% for the three months ended March 31, 2023. The decrease was primarily due to the increase in funding costs on deposits during the three months ended March 31, 2024, partially offset by an increase in loan yields and debt securities.
Noninterest Income
Noninterest income for the three months ended March 31, 2024 was $6.7 million, an increase of $24.5 million, or 137.4%, compared to the three months ended December 31, 2023. The increase was primarily due to a $29.4 million loss in equity method investment income recorded in the three months ended December 31, 2023 related to a write down of our equity method investment in Thrive Mortgage, LLC ("Thrive") related to Thrive’s entry into a definitive agreement in December 2023 to be acquired by Lower Holding Company, which acquisition closed in March of 2024, with no corresponding or additional write down taken in the three months ended March 31, 2024. In addition, the increase was due to a $1.5 million increase in other income driven by a $1.3 million increase in BOLI income and a $1.3 million increase in loan fees. The increase was partially offset by a $6.3 million loss on sales of investment securities as a result of a strategic restructuring in which we sold $120.1 million of lower-yielding AFS securities, at amortized cost, with a 3.11% average yield, and reinvested the proceeds in higher yielding AFS securities with a 6.24% average yield.
Compared to the three months ended March 31, 2023, noninterest income for the three months ended March 31, 2024 decreased by $6.9 million, or 50.8%. The decrease was primarily due to a $7.1 million decrease in government guaranteed loan income, primarily driven by a decrease in the Company’s USDA sales, a $983 thousand decrease in loss on sales of investment securities and a $849 thousand decrease in other noninterest income.
Noninterest Expense
Noninterest expense was $62.1 million for the three months ended March 31, 2024, compared to $60.2 million for the three months ended December 31, 2023, an increase of $1.9 million, or 3.1%. The increase was primarily due to a $2.8 million increase in salaries and employee benefits and a $892 thousand increase in other noninterest expense. The increase is partially offset by a decrease of $1.6 million in professional and regulatory fees driven by FDIC insurance assessment expense, which includes a $768 thousand FDIC special assessment expense recorded in the fourth quarter 2023.
Compared to the three months ended March 31, 2023, noninterest expense for the three months ended March 31, 2024 increased by $5.5 million, or 9.7%. The increase was primarily due to a $3.0 million increase other noninterest expense, a $1.7 million increase in professional and regulatory fees driven by FDIC assessment fees that increased when the Company crossed $10 billion in total assets and a $1.5 million increase in salaries and employee benefits.
Financial Condition
Total loans held for investment (“LHI”) was $9.25 billion at March 31, 2024, an increase of $43.0 million, or 1.9% annualized, compared to December 31, 2023.
Total deposits were $10.65 billion at March 31, 2024, an increase of $315.6 million, or 12.2% annualized, compared to December 31, 2023. The increase was primarily the result of an increase of $295.1 million in certificates and other time deposits, an increase of $131.2 million in noninterest-bearing deposits and an increase of $17.7 million in correspondent money market account balances. The increase was partially offset by a decrease of $128.3 million in interest-bearing transaction and savings deposits.
Credit Quality
Nonperforming assets (“NPAs”) totaled $103.8 million, or 0.82% of total assets, at March 31, 2024, compared to $95.8 million, or 0.77% of total assets, at December 31, 2023. The Company had net charge-offs of $5.3 million for the three months ended March 31, 2024. Annualized net charge-offs to average loans outstanding were 22 bps for the three months ended March 31, 2024, compared to 40 bps and 4 bps for the three months ended December 31, 2023 and March 31, 2023, respectively.
ACL as a percentage of LHI was 1.15%, 1.14% and 1.02% at March 31, 2024, December 31, 2023 and March 31, 2023, respectively. The Company recorded a provision for credit losses of $7.5 million, $9.5 million and $9.4 million for the three months ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively . The recorded provision for credit losses for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, was primarily attributable to an increase in general reserves as a result of changes in economic factors. The Company recorded a benefit for unfunded commitments of $1.5 million for the three months ended March 31, 2024, a $1.5 million benefit for unfunded commitments for the three months ended December 31, 2023, and a $1.5 million provision for unfunded commitments for the three months ended March 31, 2023. The recorded benefit for unfunded commitments for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, was attributable to a decrease in unfunded commitment balances partially offset by changes in economic factors.
Income Tax
Income tax expense for the three months ended March 31, 2024 totaled $7.2 million, an increase of $1.2 million, or 20.5%, compared to the three months ended December 31, 2023. The Company’s effective tax rate was approximately 23.1% for the three months ended March 31, 2024. The effective tax rate for the three months ended March 31, 2024 was primarily due to a net discrete tax expense of $384 thousand associated with the recognition of an excess tax expense realized on share-based payment awards.
Dividend Information
After the close of the market on Tuesday, April 23, 2024, 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 24, 2024 to stockholders of record as of the close of business on May 10, 2024.
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; 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 24, 2024, at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/tn7dvesw and will receive a unique PIN, which can be used when dialing in for the call.
Participants may also register via teleconference: https://register.vevent.com/register/BIc24bd6831f8f4f6ba885c40b9b8ffc95. 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; turmoil in the banking industry, responsive measures to mitigate and manage such turmoil 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, 2023 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, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 | | | | | | | | |
| | (Dollars and shares in thousands, except per share data) | | | | |
Per Share Data (Common Stock): | | | | | | | | | | | | | | | | | | |
Basic EPS | | $ | 0.44 | | | $ | 0.06 | | | $ | 0.60 | | | $ | 0.62 | | | $ | 0.71 | | | | | | | | | |
Diluted EPS | | 0.44 | | | 0.06 | | | 0.60 | | | 0.62 | | | 0.70 | | | | | | | | | |
Book value per common share | | 28.23 | | | 28.18 | | | 27.46 | | | 27.48 | | | 27.54 | | | | | | | | | |
Tangible book value per common share1 | | 20.33 | | | 20.21 | | | 19.44 | | | 19.41 | | | 19.43 | | | | | | | | | |
Dividends paid per common share outstanding2 | | 0.20 | | | 0.20 | | | 0.20 | | | 0.20 | | | 0.20 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Common Stock Data: | | | | | | | | | | | | | | | | | | |
Shares outstanding at period end | | 54,496 | | | 54,338 | | | 54,305 | | | 54,261 | | | 54,229 | | | | | | | | | |
Weighted average basic shares outstanding for the period | | 54,444 | | | 54,327 | | | 54,300 | | | 54,247 | | | 54,149 | | | | | | | | | |
Weighted average diluted shares outstanding for the period | | 54,842 | | | 54,691 | | | 54,597 | | | 54,486 | | | 54,606 | | | | | | | | | |
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Summary of Credit Ratios: | | | | | | | | | | | | | | | | | | |
ACL to total LHI | | 1.15 | % | | 1.14 | % | | 1.14 | % | | 1.05 | % | | 1.02 | % | | | | | | | | |
NPAs to total assets | | 0.82 | | | 0.77 | | | 0.65 | | | 0.55 | | | 0.35 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
NPAs to total loans and OREO | | 1.06 | | | 0.99 | | | 0.83 | | | 0.70 | | | 0.46 | | | | | | | | | |
Net charge-offs to average loans outstanding4 | | 0.22 | | | 0.40 | | | 0.08 | | | 0.48 | | | 0.04 | | | | | | | | | |
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Summary Performance Ratios: | | | | | | | | | | | | | | | | | | |
Return on average assets4 | | 0.79 | % | | 0.11 | % | | 1.06 | % | | 1.10 | % | | 1.28 | % | | | | | | | | |
Return on average equity4 | | 6.33 | | | 0.92 | | | 8.58 | | | 8.96 | | | 10.55 | | | | | | | | | |
Return on average tangible common equity1, 4 | | 9.52 | | | 2.00 | | | 12.80 | | | 13.35 | | | 15.81 | | | | | | | | | |
Efficiency ratio | | 62.45 | | | 77.49 | | | 54.49 | | | 49.94 | | | 48.42 | | | | | | | | | |
Net interest margin | | 3.24 | | | 3.31 | | | 3.46 | | | 3.51 | | | 3.69 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Selected Performance Metrics - Operating: | | | | | | | | | | | | | | | | | | |
Diluted operating EPS1 | | $ | 0.53 | | | $ | 0.58 | | | $ | 0.60 | | | $ | 0.64 | | | $ | 0.79 | | | | | | | | | |
Pre-tax, pre-provision operating return on average assets1, 4 | | 1.42 | % | | 1.54 | % | | 1.61 | % | | 1.90 | % | | 2.20 | % | | | | | | | | |
Pre-tax, pre-provision operating return on average loans1, 4 | | 1.84 | | | 1.97 | | | 2.05 | | | 2.43 | | | 2.83 | | | | | | | | | |
Operating return on average assets1,4 | | 0.95 | | | 1.02 | | | 1.06 | | | 1.13 | | | 1.44 | | | | | | | | | |
Operating return on average tangible common equity1,4 | | 11.34 | | | 12.37 | | | 12.80 | | | 13.70 | | | 17.72 | | | | | | | | | |
Operating efficiency ratio1 | | 58.73 | | | 55.50 | | | 54.49 | | | 48.90 | | | 45.63 | | | | | | | | | |
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Veritex Holdings, Inc. Capital Ratios: | | | | | | | | | | | | | | | | | | |
Average stockholders' equity to average total assets | | 12.43 | % | | 12.27 | % | | 12.30 | % | | 12.23 | % | | 12.09 | % | | | | | | | | |
Tangible common equity to tangible assets1 | | 9.02 | | | 9.18 | | | 8.86 | | | 8.76 | | | 8.66 | | | | | | | | | |
Tier 1 capital to average assets (leverage) | | 10.12 | | | 10.03 | | | 10.10 | | | 9.80 | | | 9.67 | | | | | | | | | |
Common equity tier 1 capital | | 10.37 | | | 10.29 | | | 10.11 | | | 9.76 | | | 9.32 | | | | | | | | | |
Tier 1 capital to risk-weighted assets | | 10.63 | | | 10.56 | | | 10.37 | | | 10.01 | | | 9.56 | | | | | | | | | |
Total capital to risk-weighted assets | | 13.33 | | | 13.18 | | | 12.95 | | | 12.51 | | | 11.99 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
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 ASC 326 Financial Instruments - Credit Losses 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, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 |
| | (unaudited) | | | | (unaudited) | | (unaudited) | | (unaudited) |
ASSETS | | | | | | | | | | |
Cash and cash equivalents | | $ | 740,769 | | | $ | 629,063 | | | $ | 713,408 | | | $ | 663,921 | | | $ | 808,395 | |
Debt securities, net | | 1,344,930 | | 1,257,042 | | 1,060,629 | | 1,144,020 | | 1,150,959 |
Other investments | | 76,788 | | | 76,238 | | | 80,869 | | | 138,894 | | | 137,621 | |
| | | | | | | | | | |
Loans held for sale (“LHFS”) | | 64,762 | | | 79,072 | | | 41,313 | | | 29,876 | | | 42,816 | |
LHI, mortgage warehouse (“MW”) | | 449,531 | | | 377,796 | | | 390,767 | | | 436,255 | | | 437,501 | |
LHI, excluding MW | | 9,249,551 | | | 9,206,544 | | | 9,237,447 | | | 9,257,183 | | | 9,237,159 | |
Total loans | | 9,763,844 | | | 9,663,412 | | | 9,669,527 | | | 9,723,314 | | | 9,717,476 | |
ACL | | (112,032) | | | (109,816) | | | (109,831) | | | (102,150) | | | (98,694) | |
Bank-owned life insurance | | 85,359 | | | 84,833 | | | 84,867 | | | 84,375 | | | 84,962 | |
Bank premises, furniture and equipment, net | | 105,299 | | | 105,727 | | | 106,118 | | | 105,986 | | | 107,540 | |
Other real estate owned (“OREO”) | | 18,445 | | | — | | | — | | | — | | | — | |
Intangible assets, net of accumulated amortization | | 38,679 | | | 41,753 | | | 44,294 | | | 48,293 | | | 51,086 | |
Goodwill | | 404,452 | | | 404,452 | | | 404,452 | | | 404,452 | | | 404,452 | |
Other assets | | 241,863 | | | 241,633 | | | 291,998 | | | 259,263 | | | 245,690 | |
Total assets | | $ | 12,708,396 | | | $ | 12,394,337 | | | $ | 12,346,331 | | | $ | 12,470,368 | | | $ | 12,609,487 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | |
Deposits: | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 2,349,211 | | | $ | 2,218,036 | | | $ | 2,363,340 | | | $ | 2,234,109 | | | $ | 2,212,389 | |
Interest-bearing transaction and savings deposits | | 4,220,114 | | | 4,348,385 | | | 3,936,070 | | | 3,590,253 | | | 3,492,011 | |
Certificates and other time deposits | | 3,486,805 | | | 3,191,737 | | | 3,403,427 | | | 2,928,949 | | | 2,896,870 | |
Correspondent money market deposits | | 597,690 | | | 580,037 | | | 493,681 | | | 480,598 | | | 433,468 | |
Total deposits | | 10,653,820 | | | 10,338,195 | | | 10,196,518 | | | 9,233,909 | | | 9,034,738 | |
Accounts payable and other liabilities | | 186,027 | | | 195,036 | | | 229,116 | | | 190,900 | | | 171,985 | |
Advances from FHLB | | 100,000 | | | 100,000 | | | 200,000 | | | 1,325,000 | | | 1,680,000 | |
Subordinated debentures and subordinated notes | | 230,034 | | | 229,783 | | | 229,531 | | | 229,279 | | | 229,027 | |
| | | | | | | | | | |
Total liabilities | | 11,169,881 | | | 10,863,014 | | | 10,855,165 | | | 10,979,088 | | | 11,115,750 | |
Commitments and contingencies | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | |
Common stock | | 611 | | | 610 | | | 609 | | | 609 | | | 609 | |
Additional paid-in capital | | 1,319,144 | | | 1,317,516 | | | 1,314,459 | | | 1,311,687 | | | 1,308,345 | |
Retained earnings | | 457,499 | | | 444,242 | | | 451,513 | | | 429,753 | | | 406,873 | |
| | | | | | | | | | |
Accumulated other comprehensive loss | | (71,157) | | | (63,463) | | | (107,833) | | | (83,187) | | | (54,508) | |
Treasury stock | | (167,582) | | | (167,582) | | | (167,582) | | | (167,582) | | | (167,582) | |
Total stockholders’ equity | | 1,538,515 | | | 1,531,323 | | | 1,491,166 | | | 1,491,280 | | | 1,493,737 | |
Total liabilities and stockholders’ equity | | $ | 12,708,396 | | | $ | 12,394,337 | | | $ | 12,346,331 | | | $ | 12,470,368 | | | $ | 12,609,487 | |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended | | | | |
| | Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 | | | | | | | | |
| | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) | | | | | | | | |
Interest income: | | | | | | | | | | | | | | | | | | |
Loans, including fees | | $ | 161,942 | | | $ | 165,443 | | | $ | 167,368 | | | $ | 163,727 | | | $ | 151,707 | | | | | | | | | |
Debt securities | | 13,695 | | | 12,282 | | | 10,928 | | | 10,166 | | | 10,988 | | | | | | | | | |
Deposits in financial institutions and Fed Funds sold | | 8,050 | | | 8,162 | | | 7,128 | | | 7,507 | | | 5,534 | | | | | | | | | |
Equity securities and other investments | | 900 | | | 1,717 | | | 1,691 | | | 1,118 | | | 1,408 | | | | | | | | | |
Total interest income | | 184,587 | | | 187,604 | | | 187,115 | | | 182,518 | | | 169,637 | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | | | |
Transaction and savings deposits | | 46,784 | | | 46,225 | | | 39,936 | | | 32,957 | | | 29,857 | | | | | | | | | |
Certificates and other time deposits | | 40,492 | | | 40,165 | | | 36,177 | | | 28,100 | | | 20,967 | | | | | | | | | |
Advances from FHLB | | 1,391 | | | 2,581 | | | 8,523 | | | 17,562 | | | 12,358 | | | | | | | | | |
Subordinated debentures and subordinated notes | | 3,114 | | | 3,100 | | | 3,118 | | | 3,068 | | | 3,066 | | | | | | | | | |
Total interest expense | | 91,781 | | | 92,071 | | | 87,754 | | | 81,687 | | | 66,248 | | | | | | | | | |
Net interest income | | 92,806 | | | 95,533 | | | 99,361 | | | 100,831 | | | 103,389 | | | | | | | | | |
Provision for credit losses1 | | 7,500 | | | 9,500 | | | 8,627 | | | 15,000 | | | 9,385 | | | | | | | | | |
(Benefit) provision for unfunded commitments | | (1,541) | | | (1,500) | | | (909) | | | (1,129) | | | 1,497 | | | | | | | | | |
Net interest income after provisions | | 86,847 | | | 87,533 | | | 91,643 | | | 86,960 | | | 92,507 | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | | | |
Service charges and fees on deposit accounts | | 4,896 | | | 4,800 | | | 5,159 | | | 5,272 | | | 5,017 | | | | | | | | | |
Loan fees | | 2,510 | | | 1,200 | | | 1,564 | | | 1,520 | | | 2,064 | | | | | | | | | |
Loss on sales of debt securities | | (6,304) | | | — | | | — | | | — | | | (5,321) | | | | | | | | | |
Government guaranteed loan income, net | | 2,614 | | | 4,378 | | | 1,772 | | | 4,144 | | | 9,688 | | | | | | | | | |
Equity method investment (loss) income | | — | | | (29,417) | | | (136) | | | 485 | | | (1,521) | | | | | | | | | |
Customer swap income | | 408 | | | 238 | | | 202 | | | 961 | | | 217 | | | | | | | | | |
Other income | | 2,538 | | | 1,009 | | | 1,113 | | | 1,310 | | | 3,387 | | | | | | | | | |
Total noninterest income (loss) | | 6,662 | | | (17,792) | | | 9,674 | | | 13,692 | | | 13,531 | | | | | | | | | |
Noninterest expense: | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | 33,365 | | | 30,606 | | | 30,949 | | | 28,650 | | | 31,865 | | | | | | | | | |
Occupancy and equipment | | 4,677 | | | 4,670 | | | 4,881 | | | 4,827 | | | 4,973 | | | | | | | | | |
Professional and regulatory fees | | 6,053 | | | 7,626 | | | 7,283 | | | 6,868 | | | 4,389 | | | | | | | | | |
Data processing and software expense | | 4,856 | | | 4,569 | | | 4,541 | | | 4,709 | | | 4,720 | | | | | | | | | |
Marketing | | 1,546 | | | 1,945 | | | 2,353 | | | 2,627 | | | 1,779 | | | | | | | | | |
Amortization of intangibles | | 2,438 | | | 2,438 | | | 2,437 | | | 2,468 | | | 2,495 | | | | | | | | | |
Telephone and communications | | 261 | | | 356 | | | 362 | | | 355 | | | 478 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Other | | 8,920 | | | 8,028 | | | 6,608 | | | 6,693 | | | 5,916 | | | | | | | | | |
Total noninterest expense | | 62,116 | | | 60,238 | | | 59,414 | | | 57,197 | | | 56,615 | | | | | | | | | |
Income before income tax expense | | 31,393 | | | 9,503 | | | 41,903 | | | 43,455 | | | 49,423 | | | | | | | | | |
Income tax expense | | 7,237 | | | 6,004 | | | 9,282 | | | 9,725 | | | 11,012 | | | | | | | | | |
Net income | | $ | 24,156 | | | $ | 3,499 | | | $ | 32,621 | | | $ | 33,730 | | | $ | 38,411 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Basic EPS | | $ | 0.44 | | | $ | 0.06 | | | $ | 0.60 | | | $ | 0.62 | | | $ | 0.71 | | | | | | | | | |
Diluted EPS | | $ | 0.44 | | | $ | 0.06 | | | $ | 0.60 | | | $ | 0.62 | | | $ | 0.70 | | | | | | | | | |
Weighted average basic shares outstanding | | 54,444 | | | 54,327 | | | 54,300 | | | 54,247 | | | 54,149 | | | | | | | | | |
Weighted average diluted shares outstanding | | 54,842 | | | 54,691 | | | 54,597 | | | 54,486 | | | 54,606 | | | | | | | | | |
1 Includes provision for credit losses on 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, 2024 | | December 31, 2023 | | March 31, 2023 |
| | 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 |
| | (Dollars in thousands) |
Assets | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | |
Loans1 | | $ | 9,283,815 | | | $ | 157,585 | | | 6.83 | % | | $ | 9,280,439 | | | $ | 161,021 | | | 6.88 | % | | $ | 9,141,137 | | | $ | 146,801 | | | 6.51 | % |
LHI, MW | | 279,557 | | | 4,357 | | | 6.27 | | | 301,345 | | | 4,422 | | | 5.82 | | | 360,172 | | | 4,906 | | | 5.52 | |
| | | | | | | | | | | | | | | | | | |
Debt securities | | 1,294,994 | | | 13,695 | | | 4.25 | | | 1,188,776 | | | 12,282 | | | 4.10 | | | 1,252,457 | | | 10,988 | | | 3.56 | |
Interest-bearing deposits in other banks | | 584,593 | | | 8,050 | | | 5.54 | | | 587,929 | | | 8,162 | | | 5.51 | | | 478,345 | | | 5,534 | | | 4.69 | |
Equity securities and other investments | | 76,269 | | | 900 | | | 4.75 | | | 82,271 | | | 1,717 | | | 8.28 | | | 124,985 | | | 1,408 | | | 4.57 | |
Total interest-earning assets | | 11,519,228 | | | 184,587 | | | 6.44 | | | 11,440,760 | | | 187,604 | | | 6.51 | | | 11,357,096 | | | 169,637 | | | 6.06 | |
ACL | | (112,229) | | | | | | | (111,937) | | | | | | | (92,664) | | | | | |
Noninterest-earning assets | | 929,043 | | | | | | | 977,811 | | | | | | | 949,881 | | | | | |
Total assets | | $ | 12,336,042 | | | | | | | $ | 12,306,634 | | | | | | | $ | 12,214,313 | | | | | |
| | | | | | | | | | | | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
Interest-bearing demand and savings deposits | | $ | 4,639,445 | | | $ | 46,784 | | | 4.06 | % | | $ | 4,547,911 | | | $ | 46,225 | | | 4.03 | % | | $ | 4,150,995 | | | $ | 29,857 | | | 2.92 | % |
Certificates and other time deposits | | 3,283,735 | | | 40,492 | | | 4.96 | | | 3,285,164 | | | 40,165 | | | 4.85 | | | 2,588,728 | | | 20,967 | | | 3.28 | |
Advances from FHLB and Other | | 100,989 | | | 1,391 | | | 5.54 | | | 182,935 | | | 2,581 | | | 5.60 | | | 1,122,683 | | | 12,358 | | | 4.46 | |
Subordinated debentures and subordinated notes | | 229,881 | | | 3,114 | | | 5.45 | | | 229,648 | | | 3,100 | | | 5.36 | | | 231,251 | | | 3,066 | | | 5.38 | |
Total interest-bearing liabilities | | 8,254,050 | | | 91,781 | | | 4.47 | | | 8,245,658 | | | 92,071 | | | 4.43 | | | 8,093,657 | | | 66,248 | | | 3.32 | |
| | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | 2,355,315 | | | | | | | 2,322,555 | | | | | | | 2,470,700 | | | | | |
Other liabilities | | 192,809 | | | | | | | 228,135 | | | | | | | 173,380 | | | | | |
Total liabilities | | 10,802,174 | | | | | | | 10,796,348 | | | | | | | 10,737,737 | | | | | |
Stockholders’ equity | | 1,533,868 | | | | | | | 1,510,286 | | | | | | | 1,476,576 | | | | | |
Total liabilities and stockholders’ equity | | $ | 12,336,042 | | | | | | | $ | 12,306,634 | | | | | | | $ | 12,214,313 | | | | | |
| | | | | | | | | | | | | | | | | | |
Net interest rate spread2 | | | | | | 1.97 | % | | | | | | 2.08 | % | | | | | | 2.74 | % |
Net interest income and margin3 | | | | $ | 92,806 | | | 3.24 | % | | | | $ | 95,533 | | | 3.31 | % | | | | $ | 103,389 | | | 3.69 | % |
1 Includes average outstanding balances of LHFS of $53.9 million, $31.2 million and $19.7 million for the quarters ended March 31, 2024, December 31, 2023, and March 31, 2023, 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, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 | | | | |
Average yield on interest-earning assets: | | | | | | | | | | | | | | |
Loans1 | | 6.83 | % | | 6.88 | % | | 6.92 | % | | 6.85 | % | | 6.51 | % | | | | |
LHI, MW | | 6.27 | | | 5.82 | | | 6.38 | | | 5.44 | | | 5.52 | | | | | |
Total Loans | | 6.81 | | | 6.85 | | | 6.90 | | | 6.80 | | | 6.48 | | | | | |
Debt securities | | 4.25 | | | 4.10 | | | 3.87 | | | 3.60 | | | 3.56 | | | | | |
Interest-bearing deposits in other banks | | 5.54 | | | 5.51 | | | 5.43 | | | 5.16 | | | 4.69 | | | | | |
Equity securities and other investments | | 4.75 | | | 8.28 | | | 4.94 | | | 3.25 | | | 4.57 | | | | | |
Total interest-earning assets | | 6.44 | % | | 6.51 | % | | 6.51 | % | | 6.36 | % | | 6.06 | % | | | | |
| | | | | | | | | | | | | | |
Average rate on interest-bearing liabilities: | | | | | | | | | | | | | | |
Interest-bearing demand and savings deposits | | 4.06 | % | | 4.03 | % | | 3.80 | % | | 3.37 | % | | 2.92 | % | | | | |
Certificates and other time deposits | | 4.96 | | | 4.85 | | | 4.55 | | | 3.92 | | | 3.28 | | | | | |
Advances from FHLB | | 5.54 | | | 5.60 | | | 4.66 | | | 4.78 | | | 4.46 | | | | | |
Subordinated debentures and subordinated notes | | 5.45 | | | 5.36 | | | 5.39 | | | 5.37 | | | 5.38 | | | | | |
Total interest-bearing liabilities | | 4.47 | % | | 4.43 | % | | 4.21 | % | | 3.86 | % | | 3.32 | % | | | | |
| | | | | | | | | | | | | | |
Net interest rate spread2 | | 1.97 | % | | 2.08 | % | | 2.30 | % | | 2.50 | % | | 2.74 | % | | | | |
Net interest margin3 | | 3.24 | % | | 3.31 | % | | 3.46 | % | | 3.51 | % | | 3.69 | % | | | | |
1Includes average outstanding balances of LHFS of $53.9 million, $31.2 million, $28.3 million, $23.4 million and $19.7 million for the three months ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, 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, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 | | | | |
Average cost of interest-bearing deposits | | 4.43 | % | | 4.38 | % | | 4.12 | % | | 3.61 | % | | 3.06 | % | | | | |
Average costs of total deposits, including noninterest-bearing | | 3.42 | | | 3.37 | | | 3.15 | | | 2.73 | | | 2.24 | | | | | |
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
LHI and Deposit Portfolio Composition | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 |
| | (In thousands, except percentages) |
LHI1 | | | | | | | | | | | | | | | | | | | | |
Commercial and Industrial (“C&I”) | | $ | 2,785,987 | | 30.1 | % | | $ | 2,752,063 | | 29.9 | % | | $ | 2,841,024 | | 30.7 | % | | $ | 2,850,084 | | 30.7 | % | | $ | 2,895,957 | | 31.3 | % |
Real Estate: | | | | | | | | | | | | | | | | | | | | |
Owner occupied commercial (“OOCRE”) | | 788,376 | | 8.5 | | | 794,088 | | 8.6 | | | 697,299 | | 7.5 | | | 671,602 | | 7.2 | | | 631,563 | | 6.8 | |
Non-owner occupied commercial (“NOOCRE”) | | 2,352,993 | | 25.5 | | | 2,350,725 | | 25.5 | | | 2,398,060 | | 26.1 | | | 2,509,731 | | 27.1 | | | 2,505,344 | | 27.1 | |
Construction and land | | 1,568,257 | | 16.9 | | | 1,734,254 | | 18.8 | | | 1,705,053 | | 18.4 | | | 1,659,700 | | 17.9 | | | 1,831,349 | | 19.8 | |
Farmland | | 30,979 | | 0.3 | | | 31,114 | | 0.3 | | | 59,684 | | 0.6 | | | 51,663 | | 0.6 | | | 51,680 | | 0.6 | |
1-4 family residential | | 969,401 | | 10.5 | | | 937,119 | | 10.2 | | | 933,225 | | 10.1 | | | 923,442 | | 10.0 | | | 896,252 | | 9.7 | |
Multi-family residential | | 751,607 | | 8.1 | | | 605,817 | | 6.6 | | | 603,395 | | 6.5 | | | 592,473 | | 6.4 | | | 432,209 | | 4.6 | |
Consumer | | 8,882 | | 0.1 | | | 10,149 | | 0.1 | | | 9,845 | | 0.1 | | | 11,189 | | 0.1 | | | 8,316 | | 0.1 | |
Total LHI | | $ | 9,256,482 | | 100 | % | | $ | 9,215,329 | | 100 | % | | $ | 9,247,585 | | 100 | % | | $ | 9,269,884 | | 100 | % | | $ | 9,252,670 | | 100 | % |
| | | | | | | | | | | | | | | | | | | | |
MW | | 449,531 | | | | 377,796 | | | | 390,767 | | | | 436,255 | | | | 437,501 | | |
| | | | | | | | | | | | | | | | | | | | |
Total LHI1 | | $ | 9,706,013 | | | | $ | 9,593,125 | | | | $ | 9,638,352 | | | | $ | 9,706,139 | | | | $ | 9,690,171 | | |
| | | | | | | | | | | | | | | | | | | | |
Total LHFS | | 64,762 | | | | 79,072 | | | | 41,313 | | | | 29,876 | | | | 42,816 | | |
| | | | | | | | | | | | | | | | | | | | |
Total Loans | | $ | 9,770,775 | | | | $ | 9,672,197 | | | | $ | 9,679,665 | | | | $ | 9,736,015 | | | | $ | 9,732,987 | | |
| | | | | | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing | | $ | 2,349,211 | | 22.1 | % | | $ | 2,218,036 | | 21.5 | % | | $ | 2,363,340 | | 23.2 | % | | $ | 2,234,109 | | 24.2 | % | | $ | 2,212,389 | | 24.5 | % |
Interest-bearing transaction | | 724,171 | | 6.8 | | | 927,193 | | 8.9 | | | 739,098 | | 7.2 | | | 676,653 | | 7.3 | | | 866,609 | | 9.6 | |
Money market | | 3,326,742 | | 31.2 | | | 3,284,324 | | 31.8 | | | 3,096,498 | | 30.4 | | | 2,816,769 | | 30.5 | | | 2,518,922 | | 27.9 | |
Savings | | 169,201 | | 1.6 | | | 136,868 | | 1.3 | | | 100,474 | | 1.0 | | | 96,831 | | 1.0 | | | 106,480 | | 1.2 | |
Certificates and other time deposits | | 3,486,805 | | 32.7 | | | 3,191,737 | | 30.9 | | | 3,403,427 | | 33.4 | | | 2,928,949 | | 31.7 | | | 2,896,870 | | 32.0 | |
Correspondent money market accounts | | 597,690 | | 5.6 | | | 580,037 | | 5.6 | | | 493,681 | | 4.8 | | | 480,598 | | 5.3 | | | 433,468 | | 4.8 | |
Total deposits | | $ | 10,653,820 | | 100 | % | | $ | 10,338,195 | | 100 | % | | $ | 10,196,518 | | 100 | % | | $ | 9,233,909 | | 100 | % | | $ | 9,034,738 | | 100 | % |
| | | | | | | | | | | | | | | | | | | | |
Total Loans to Deposits Ratio | | 91.7 | % | | | | 93.6 | % | | | | 94.9 | % | | | | 105.4 | % | | | | 107.7 | % | | |
| | | | | | | | | | | | | | | | | | | | |
LHI to Deposit Ratio, excluding MW loans | | 86.9 | % | | | | 89.1 | % | | | | 90.7 | % | | | | 100.4 | % | | | | 102.4 | % | | |
1 Total LHI does not include deferred fees of $6.9 million, $8.8 million, $10.1 million, $12.7 million and $15.5 million at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, respectively.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Asset Quality | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| For the Quarter Ended | | | | |
| Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 | | | | | | | | |
| (In thousands, except percentages) | | | | | | | | |
NPAs: | | | | | | | | | | | | | | | | | |
Nonaccrual loans | $ | 75,721 | | $ | 79,133 | | $ | 65,676 | | $ | 54,055 | | $ | 31,452 | | | | | | | | |
Nonaccrual PCD loans1 | 9,419 | | 13,715 | | 13,718 | | 13,721 | | 12,784 | | | | | | | | |
Accruing loans 90 or more days past due2 | 220 | | 2,975 | | 474 | | 528 | | 296 | | | | | | | | |
Total nonperforming loans held for investment (“NPLs”) | 85,360 | | 95,823 | | 79,868 | | 68,304 | | 44,532 | | | | | | | | |
Other real estate owned | 18,445 | | — | | — | | — | | — | | | | | | | | |
Total NPAs | $ | 103,805 | | $ | 95,823 | | $ | 79,868 | | $ | 68,304 | | $ | 44,532 | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Charge-offs: | | | | | | | | | | | | | | | | | |
1-4 family residential | $ | — | | $ | (21) | | $ | — | | $ | — | | $ | — | | | | | | | | |
Multifamily | | | (192) | | — | | — | | — | | | | | | | | |
OOCRE | (120) | | (364) | | (375) | | — | | (116) | | | | | | | | |
NOOCRE | (4,293) | | (5,434) | | — | | (8,215) | | — | | | | | | | | |
C&I | (946) | | (3,893) | | (1,929) | | (3,540) | | (1,051) | | | | | | | | |
Consumer | (71) | | (33) | | (49) | | (92) | | (62) | | | | | | | | |
Total charge-offs | (5,430) | | (9,937) | | (2,353) | | (11,847) | | (1,229) | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Recoveries: | | | | | | | | | | | | | | | | | |
1-4 family residential | 1 | | 1 | | — | | 1 | | 1 | | | | | | | | |
| | | | | | | | | | | | | | | | | |
NOOCRE | — | | — | | 200 | | 150 | | — | | | | | | | | |
C&I | 96 | | 387 | | 308 | | 106 | | 364 | | | | | | | | |
Consumer | 49 | | 34 | | 14 | | 46 | | 6 | | | | | | | | |
Total recoveries | 146 | | 422 | | 522 | | 303 | | 371 | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net charge-offs | $ | (5,284) | | $ | (9,515) | | $ | (1,831) | | $ | (11,544) | | $ | (858) | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Provision for credit losses | $ | 7,500 | | $ | 9,500 | | $ | 8,627 | | $ | 15,000 | | $ | 9,385 | | | | | | | | |
| | | | | | | | | | | | | | | | | |
ACL | $ | 112,032 | | $ | 109,816 | | $ | 109,831 | | $ | 102,150 | | $ | 98,694 | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Asset Quality Ratios: | | | | | | | | | | | | | | | | | |
NPAs to total assets | 0.82 | % | | 0.77 | % | | 0.65 | % | | 0.55 | % | | 0.35 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | |
NPAs to total loans and OREO | 1.06 | | | 0.99 | | | 0.83 | | | 0.70 | | | 0.46 | | | | | | | | | |
NPLs to total LHI | 0.88 | | | 1.00 | | | 0.83 | | | 0.70 | | | 0.46 | | | | | | | | | |
NPLs, excluding nonaccrual PCD loans, to total LHI | 0.78 | | | 0.86 | | | 0.69 | | | 0.56 | | | 0.33 | | | | | | | | | |
ACL to total LHI | 1.15 | | | 1.14 | | | 1.14 | | | 1.05 | | | 1.02 | | | | | | | | | |
Net charge-offs to average loans outstanding3 | 0.22 | | | 0.40 | | | 0.08 | | | 0.48 | | | 0.04 | | | | | | | | | |
1 Nonaccrual PCD loans consist of PCD loans that transitioned upon adoption of ASC 326 Financial Instruments - Credit Losses 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 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, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 |
| | (Dollars in thousands, except per share data) |
Tangible Common Equity | | | | | | | | | | |
Total stockholders' equity | | $ | 1,538,515 | | | $ | 1,531,323 | | | $ | 1,491,166 | | | $ | 1,491,280 | | | $ | 1,493,737 | |
Adjustments: | | | | | | | | | | |
Goodwill | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | |
Core deposit intangibles | | (26,057) | | | (28,495) | | | (30,933) | | | (33,371) | | | (35,808) | |
Tangible common equity | | $ | 1,108,006 | | | $ | 1,098,376 | | | $ | 1,055,781 | | | $ | 1,053,457 | | | $ | 1,053,477 | |
Common shares outstanding | | 54,496 | | | 54,338 | | | 54,305 | | | 54,261 | | | 54,229 | |
| | | | | | | | | | |
Book value per common share | | $ | 28.23 | | | $ | 28.18 | | | $ | 27.46 | | | $ | 27.48 | | | $ | 27.54 | |
Tangible book value per common share | | $ | 20.33 | | | $ | 20.21 | | | $ | 19.44 | | | $ | 19.41 | | | $ | 19.43 | |
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, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 |
| | (Dollars in thousands) |
Tangible Common Equity | | | | | | | | | | |
Total stockholders' equity | | $ | 1,538,515 | | | $ | 1,531,323 | | | $ | 1,491,166 | | | $ | 1,491,280 | | | $ | 1,493,737 | |
Adjustments: | | | | | | | | | | |
Goodwill | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | |
Core deposit intangibles | | (26,057) | | | (28,495) | | | (30,933) | | | (33,371) | | | (35,808) | |
Tangible common equity | | $ | 1,108,006 | | | $ | 1,098,376 | | | $ | 1,055,781 | | | $ | 1,053,457 | | | $ | 1,053,477 | |
Tangible Assets | | | | | | | | | | |
Total assets | | $ | 12,708,396 | | | $ | 12,394,337 | | | $ | 12,346,331 | | | $ | 12,470,368 | | | $ | 12,609,487 | |
Adjustments: | | | | | | | | | | |
Goodwill | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | |
Core deposit intangibles | | (26,057) | | | (28,495) | | | (30,933) | | | (33,371) | | | (35,808) | |
Tangible Assets | | $ | 12,277,887 | | | $ | 11,961,390 | | | $ | 11,910,946 | | | $ | 12,032,545 | | | $ | 12,169,227 | |
Tangible Common Equity to Tangible Assets | | 9.02 | % | | 9.18 | % | | 8.86 | % | | 8.76 | % | | 8.66 | % |
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, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 | | | | | | | | |
| | (Dollars in thousands) | | | | |
Net income available for common stockholders adjusted for amortization of core deposit intangibles | | | | | | | | | | | | | | | | | | |
Net income | | $ | 24,156 | | | $ | 3,499 | | | $ | 32,621 | | | $ | 33,730 | | | $ | 38,411 | | | | | | | | | |
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 | | $ | 26,082 | | | $ | 5,425 | | | $ | 34,547 | | | $ | 35,656 | | | $ | 40,337 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Average Tangible Common Equity | | | | | | | | | | | | | | | | | | |
Total average stockholders' equity | | $ | 1,533,868 | | | $ | 1,510,286 | | | $ | 1,508,170 | | | $ | 1,510,625 | | | $ | 1,476,576 | | | | | | | | | |
Adjustments: | | | | | | | | | | | | | | | | | | |
Average goodwill | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | | | | | | | |
Average core deposit intangibles | | (27,656) | | | (30,093) | | | (32,540) | | | (34,969) | | | (37,361) | | | | | | | | | |
Average tangible common equity | | $ | 1,101,760 | | | $ | 1,075,741 | | | $ | 1,071,178 | | | $ | 1,071,204 | | | $ | 1,034,763 | | | | | | | | | |
Return on Average Tangible Common Equity (Annualized) | | 9.52 | % | | 2.00 | % | | 12.80 | % | | 13.35 | % | | 15.81 | % | | | | | | | | |
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, plus M&A expenses less tax impact of adjustments, plus nonrecurring tax adjustments. We calculate (b) diluted operating earnings per share as operating earnings as described in clause (a) divided by weighted average diluted shares outstanding. We calculate (c) pre-tax, pre-provision operating earnings as operating earnings as described in clause (a) plus provision for income taxes, plus provision (benefit) for credit losses and unfunded commitments. We calculate (d) pre-tax, pre-provision operating return on average assets as pre-tax, pre-provision operating earnings as described in clause (a) divided by total average assets. We calculate (e) operating return on average assets as operating earnings as described in clause (a) divided by total average assets. We calculate (f) operating return on average tangible common equity as operating earnings as described in clause (a), adjusted for the amortization of intangibles and tax benefit at the statutory rate, divided by total average tangible common equity (average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization). We calculate (g) operating efficiency ratio as 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, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 | | | | | | | | |
| | (Dollars in thousands, except per share data) |
Operating Earnings | | | | | | | | | | | | | | | | | | |
Net income | | $ | 24,156 | | | $ | 3,499 | | | $ | 32,621 | | | $ | 33,730 | | | $ | 38,411 | | | | | | | | | |
Plus: Severance payments1 | | — | | | — | | | — | | | 1,194 | | | 835 | | | | | | | | | |
Plus: Loss on sale of AFS securities, net | | 6,304 | | | — | | | — | | | — | | | 5,321 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Plus: Equity method investment write-down | | — | | | 29,417 | | | — | | | — | | | — | | | | | | | | | |
Plus: FDIC special assessment | | — | | | 768 | | | — | | | — | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Operating pre-tax income | | 30,460 | | | 33,684 | | | 32,621 | | | 34,924 | | | 44,567 | | | | | | | | | |
Less: Tax impact of adjustments | | 1,323 | | | 2,059 | | | — | | | 251 | | | 1,293 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Operating earnings | | $ | 29,137 | | | $ | 31,625 | | | $ | 32,621 | | | $ | 34,673 | | | $ | 43,274 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Weighted average diluted shares outstanding | | 54,842 | | | 54,691 | | | 54,597 | | | 54,486 | | | 54,606 | | | | | | | | | |
Diluted EPS | | $ | 0.44 | | | $ | 0.06 | | | $ | 0.60 | | | $ | 0.62 | | | $ | 0.70 | | | | | | | | | |
Diluted operating EPS | | $ | 0.53 | | | $ | 0.58 | | | $ | 0.60 | | | $ | 0.64 | | | $ | 0.79 | | | | | | | | | |
1 Severance payments relate to certain restructurings made during the periods disclosed.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended | | | | |
| | Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Mar 31, 2023 | | | | | | | | |
| | (Dollars in thousands) |
Pre-Tax, Pre-Provision Operating Earnings | | | | | | | | | | | | | | | | | | |
Net income | | $ | 24,156 | | | $ | 3,499 | | | $ | 32,621 | | | $ | 33,730 | | | $ | 38,411 | | | | | | | | | |
Plus: Provision for income taxes | | 7,237 | | | 6,004 | | | 9,282 | | | 9,725 | | | 11,012 | | | | | | | | | |
Plus: Provision for credit losses and unfunded commitments | | 5,959 | | | 8,000 | | | 7,718 | | | 13,871 | | | 10,882 | | | | | | | | | |
Plus: Severance payments | | — | | | — | | | — | | | 1,194 | | | 756 | | | | | | | | | |
Plus: Loss on sale of AFS securities, net | | 6,304 | | | — | | | — | | | — | | | 5,321 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Plus: Equity method investment write-down | | — | | | 29,417 | | | — | | | — | | | — | | | | | | | | | |
Plus: FDIC special assessment | | — | | | 768 | | | — | | | — | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Pre-tax, pre-provision operating earnings | | $ | 43,656 | | | $ | 47,688 | | | $ | 49,621 | | | $ | 58,520 | | | $ | 66,382 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Average total assets | | $ | 12,336,042 | | | $ | 12,306,634 | | | $ | 12,259,062 | | | $ | 12,350,223 | | | $ | 12,214,313 | | | | | | | | | |
Pre-tax, pre-provision operating return on average assets1 | | 1.42 | % | | 1.54 | % | | 1.61 | % | | 1.90 | % | | 2.20 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Average loans | | $ | 9,563,372 | | | $ | 9,581,784 | | | $ | 9,625,005 | | | $ | 9,657,313 | | | $ | 9,501,309 | | | | | | | | | |
Pre-tax, pre-provision operating return on average loans1 | | 1.84 | % | | 1.97 | % | | 2.05 | % | | 2.43 | % | | 2.83 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Average total assets | | $ | 12,336,042 | | | $ | 12,306,634 | | | $ | 12,259,062 | | | $ | 12,350,223 | | | $ | 12,214,313 | | | | | | | | | |
Return on average assets1 | | 0.79 | % | | 0.11 | % | | 1.06 | % | | 1.10 | % | | 1.28 | % | | | | | | | | |
Operating return on average assets1 | | 0.95 | | | 1.02 | | | 1.06 | | | 1.13 | | | 1.44 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Operating earnings adjusted for amortization of core deposit intangibles | | | | | | | | | | | | | | | | | | |
Operating earnings | | $ | 29,137 | | | $ | 31,625 | | | $ | 32,621 | | | $ | 34,673 | | | $ | 43,274 | | | | | | | | | |
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 | | $ | 31,063 | | | $ | 33,551 | | | $ | 34,547 | | | $ | 36,599 | | | $ | 45,200 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Average Tangible Common Equity | | | | | | | | | | | | | | | | | | |
Total average stockholders' equity | | $ | 1,533,868 | | | $ | 1,510,286 | | | $ | 1,508,170 | | | $ | 1,510,625 | | | $ | 1,476,576 | | | | | | | | | |
Adjustments: | | | | | | | | | | | | | | | | | | |
Less: Average goodwill | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | (404,452) | | | | | | | | | |
Less: Average core deposit intangibles | | (27,656) | | | (30,093) | | | (32,540) | | | (34,969) | | | (37,361) | | | | | | | | | |
Average tangible common equity | | $ | 1,101,760 | | | $ | 1,075,741 | | | $ | 1,071,178 | | | $ | 1,071,204 | | | $ | 1,034,763 | | | | | | | | | |
Operating return on average tangible common equity1 | | 11.34 | % | | 12.37 | % | | 12.80 | % | | 13.70 | % | | 17.72 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Efficiency ratio | | 62.45 | % | | 77.49 | % | | 54.49 | % | | 49.94 | % | | 48.42 | % | | | | | | | | |
Operating efficiency ratio | | | | | | | | | | | | | | | | | | |
Net interest income | | $ | 92,806 | | | $ | 95,533 | | | $ | 99,361 | | | $ | 100,831 | | | $ | 103,389 | | | | | | | | | |
Noninterest income | | 6,662 | | | (17,792) | | | 9,674 | | | 13,692 | | | 13,531 | | | | | | | | | |
Plus: Loss on sale of AFS securities, net | | 6,304 | | | — | | | — | | | — | | | 5,321 | | | | | | | | | |
Plus: Equity method investment write-down | | — | | | 29,417 | | | — | | | — | | | — | | | | | | | | | |
Operating noninterest income | | 12,966 | | | 11,625 | | | 9,674 | | | 13,692 | | | 18,852 | | | | | | | | | |
Noninterest expense | | 62,116 | | | 60,238 | | | 59,414 | | | 57,197 | | | 56,615 | | | | | | | | | |
Less: FDIC special assessment | | — | | | 768 | | | — | | | — | | | — | | | | | | | | | |
Less: Severance payments | | — | | | — | | | — | | | 1,194 | | | 756 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Operating noninterest expense | | $ | 62,116 | | | $ | 59,470 | | | $ | 59,414 | | | $ | 56,003 | | | $ | 55,859 | | | | | | | | | |
Operating efficiency ratio | | 58.73 | % | | 55.50 | % | | 54.49 | % | | 48.90 | % | | 45.63 | % | | | | | | | | |
1 Annualized ratio for quarterly metrics.
a1q24veritexinvestorpres
A BETTER STATE OF BANKING Veritex Holdings, Inc. First Quarter 2024 Results Earnings Release April 24, 2024 NASDAQ: VBTX © 2024 Veritex Bank Member FDIC
2 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’s quarterly cash dividend; the impact of certain changes in Veritex’s accounting policies, standards and interpretations; turmoil in the banking industry, responsive measures to mitigate and manage such turmoil 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, 2023 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. 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. Use of Non-GAAP Financial Measures
3 (line chart represents ADC as a % of RBC) Total ACL (% ACL to Total Loans) Strengthening the Balance Sheet 107.7% 105.4% 94.9% 93.6% 91.7%102.4% 100.4% 90.7% 89.1% 86.9% 1Q23 2Q23 3Q23 4Q23 1Q24 Loan to Deposit Ratio 32.0% 29.2% 21.0% 20.4% 19.4% 1Q23 2Q23 3Q23 4Q23 1Q24 Reliance on Wholesale Funding1 ($ in millions) $98,694 $102,150 $109,831 $109,816 1Q23 2Q23 3Q23 4Q23 1Q24 9.32% 9.76% 10.11% 10.29% 10.37% 1Q23 2Q23 3Q23 4Q23 1Q24 CET1 / Total RWA $9,035 $9,234 $10,197 $10,338 $10,654 1Q23 2Q23 3Q23 4Q23 1Q24 Deposit Growth $112,032 1.02% 1.15% (line chart represents LDR, excluding MW loans) 333.7% 327.2% 317.0% 320.2% 318.8% 129.2% 115.2% 115.9% 118.7% 108.3% 300.00% 305.00% 310.00% 315.00% 320.00% 325.00% 330.00% 335.00% 340.00% $0.80 $1.30 1Q23 2Q23 3Q23 4Q23 1Q24 CRE Concentration as % of RBC 1 Reliance on wholesale funding % is calculated at the Veritex Community Bank level. ($ in thousands)
4 2024 First Quarter Highlights TotalBalance Sheet1 $9.8Total Loans $10.6Total Deposits 1 Total loans and deposits $ in billions as of March 31, 2024 2 Refer to the reconciliation of Non-GAAP financial measures at the end of this presentation 3 Net income $ in millions Key Highlights • Pre-tax Pre-provision = $43.7 Million • 1.42% PTPP Return on Average Assets • 1.84% PTPP Return on Average Loans • CET1 grew 8 bps to 10.37% • Deposits grew $1.6 Billion, or 18%, year over year • Loans grew $46.4 Million, or 0.5%, year over year • Announced authorization of a stock buyback program to purchase up to $50 million of outstanding common stock over the course of a year as deemed appropriate • Sold $120.1 million of lower-yielding AFS debt securities with a 3.11% average yield and reinvested the proceeds in higher yielding AFS securities with a 6.24% average yield • Unfunded commitments decreased $203.7 million quarter over quarter 1Q2421Q24 OperatingReportedKey Performance Metrics $29.1$24.2Net Income3 $0.53$0.44Diluted EPS 0.95%0.79%ROAA 11.34%9.52%ROATCE 58.7%62.5%Efficiency Ratio
5 Credit Quality Summary • 2024 annualized net charge-offs were 0.22% • Acquired work out credits made up 95% of annualized net charge-offs for 1Q24 • NPA / Total Assets remained relatively flat at 0.82% 1Q23 2Q23 3Q23 4Q23 1Q24 0.00% 0.10% 0.20% 0.30% 30-59 Past Due 60-89 Past Due 90+ Past Due 0.19% 0.36% 0.29% 0.16% 0.04% 0.21% 0.00% 0.00% 0.09% 0.00% 0.21% 0.01% 2019 2020 2021 2022 2023 1Q24 Acquired NCOs Originated NCOs $22,581$60,459$27,158$25,188$15,287Totals: Past Due Trend1 % of Total Loans2 Net Charge-off Lookback($ in millions) ($ in millions) $44.5 $68.3 $79.9 $95.8 $103.8 0.35% 0.55% 0.65% 0.77% 0.82% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% 1Q23 2Q23 3Q23 4Q23 1Q24 NPAs NPAs/Total Assets NPAs / Total Assets 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. 3 Net charge-offs are annualized for 1Q24. 0.22%0.25%0.16%0.38%0.36%0.19%NCOs3
6 Credit Quality Summary • Criticized loans = $524.4 million • Criticized loans remained relatively flat quarter over quarter ($ in millions, excluding PCD loans) Quarterly Criticized Loans $204.8 $287.1 $304.5 $293.4 $350.3 $227.2 $225.0 $223.4 $213.2 $174.1 1Q23 2Q23 3Q23 4Q23 1Q24 Special Mention Substandard (continued) Commercial Real Estate Criticized Loans Breakdown as of March 31, 2024 37% 25% 21% 11% 6% CRE Office CRE Retail CRE Hotel CRE Industrial CRE Other Total CRE Criticized $326.7 million, down 4.4% from 2023 $432.0 $512.1 $527.9 $506.6 $524.4
7 Allowance For Credit Losses Summary • General reserve reflects current economic outlook on economy and recessionary risk • 25% Baseline / 40% Scenario 2 / 25% Scenario 3 / 10% Scenario 4 of Moody’s forecast weighting utilized in the 1Q24 ACL calculation • General reserves have increased 15%, or 11 bps, year over year • Q-Factors represent 34 bps of the general reserve 1.15% Coverage // ACL increase of 13 bps from 1Q23 Loan balances subject to the ACL methodology remained relatively flat from March 2023 ACL / Total Loans up 12.7% from March 31, 2023 ACL / Total Loans, excluding MW = 1.21% 1. 02 % 0. 92 % 0. 93 % 1. 03 % 0. 79 % 0. 96 % 0. 92 % 0. 00 % 1. 22 % 0. 51 % 1. 14 % 1. 21 % 1. 19 % 0. 99 % 0. 79 % 1. 17 % 1. 00 % 0. 05 % 1. 29 % 0. 60 %1. 15 % 1. 30 % 1. 17 % 0. 99 % 0. 80 % 1. 20 % 1. 29 % 0. 05 % 1. 26 % 0. 59 % ACL / Total Loans Residential Construction Other Construction 1-4 Family Multifamily OOCRE NOOCRE Mortgage Warehouse C&I Other Loans 1Q23 4Q23 1Q24 ACL on Loans Held for Investment / Loan Balance by Loan Portfolio
8 Capital Summary • Announced stock buyback program in March 2024 for up to $50 million • CET1 increase primarily driven by earnings and a decrease in unfunded commitments • RWA down $624 million, or 5.2%, from 1Q23 • CET1, including the impact to AOCI, is 9.74% • TBV increased to $20.33 Capital Levels 1Q24 (includes AOCI) 1Q231Q24Capital Ratio 9.74%9.32%10.37%CET1 Capital 10.01%9.56%10.63%Tier 1 Capital 12.71%11.99%13.33%Total Capital Tangible Book Value Trend since IPO in 2014 $8.96 $9.59 $13.82 $12.75 $14.74 $14.73 $15.70 $17.49 $18.64 $20.21 $20.33 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q24 9.5%CAGR 11.5% CAGR adding back dividends1 1 Total dividends of $193.9 million included in the CAGR calculation. CET1 at 10.37%, up 105 bps year over year Risk Weighted Assets Trend $11,986 $11,742 $11,617 $11,387 $11,362 1Q23 2Q23 3Q23 4Q23 1Q24 ($ in Millions)
9 Quarter over Quarter Change in Deposits Deposits Summary • Total deposits increased $315.6 million during 1Q24, or 12.2% annualized • LDR decreased to 91.7%, from 107.7%, year over year • LDR, excluding MW loans, decreased to 86.9% from 102.4% year over year • Wholesale funding reliance at the Bank level is 19.5% • Uninsured and uncollateralized deposits was 31.9% on March 31, 2024 8 Quarter Term Funding Maturity Schedule $1,237,048 $960,758 $525,601 $654,490 $60,903 $21,776 $7,695 $5,822 5.11% 5.14% 5.14% 4.89% 4.90% 4.37% 3.78% 2.86% -1.80% -0.80% 0.20% 1.20% 2.20% 3.20% 4.20% 5.20% 6.20% 0.00%25978 851 56 1677 34 24103 12 .329890 468 4 52 2 0.63 0 75 78 805 58 8311 36 .96%7 141 0463692 1289 70 24 4 .4 2 30 49 58 551 6 .605 381 871 16 767494 84623 72 .92%49 502 0270 0 138 .25 6 37 4 408 5 18 831296 .567 742 6483 52 72909 30 80 . %6 18 96 3 0101 4 13 2 .205098 891 76 361 7 54 4443 32 .5269 10 6498 31220 6 76 4 .8 %72 2 998 0 4 003 878 85 56 .1634 2440 12 321 2 790 44 6 .80 4 55 6 2 4 632 0 75868 .80%58 861 36 961 145 046 592 .128 70 27 4 440 2 36 0 .49248 5818 6 601 385 87 16 .76%394 8492 72 924 506 04 2 .2000 0 1628 252 6 378 4 .401 18 83 196 56746 648 52 .72%220 30 84 06008 96 6 7.0312 4 138 2 203998 889 76 .3624 5 54 4441 32 5267 10 69 88 7. %51 6 74 87 2 90 8.002623778 849 56 165 34 24701 12 .327690 45 67 4 58 2 8.6 %2 3 0 758 8083 58 8909 36 .965 149 0461492 127 70 2301 4 .3 2 30 49 38 51 6 .60%43 389 869 16 765294 843221 72 .927 510 07 299 07 13 185 .25 63 34 40403 1 83 2909 .56%5 7 0 6481 5 725 7 31 83 09 .58987 94 651 0610 43 13 6 2 .206289 88 7 367 5 444 3 .52%11 69 7891818 67 73 4 45 .870 23 96 0 2 0092267 84 5 .163 24400 1 32591 45 69 . %78 47 51 4 252 630 03 7648 .8082 5 8420 3 961 3 046 39 .1271 231 4938 27 34 05 .4 %90283 544 6 6 6042 3 3 86 1 .7619 8452 7 92514 07 29 .98 07 146 4085 250 63 36 4 .40%702 1 82799 563 7 4 6479 5 .728 5 31 84 31 095 887 98 655.090 43 12 206 79 87 7 .36%5013 5 4439 3 525 11 6916895.1 67 74 45 86 23 90 6.00522 57 87 5 1673 3 2499 1 .32%3 5491 451 6947 540 256.65 2 03 738 808 5 85 7 3 .9633 1 7 045929 125 71 2611 49 . %5 27 36 05 48 183 57 6 .604 3 7 87 1 769309 84819 7 .925 5 518 071 2907 1922985 .2 %48 63 34 4 406000 1 8689 .565 7 8 647 5 721 31 83 09 .787 982 659 06208 43 14 2 .20%6069 86 7 3631 5 443 3 .5211 69 589964 67 742 45 .868 23 94 020 005204 0 86 58 .16%7 36 249 14 3266 39 45 7 .4 5702 2 0 628 0 74282 .8080 60 88 6 38 966 3 161 045 194 .12%7 291 52 362 0 .48808 570 4 62 6040 401 86 18 .7691996 84117 74 923 5 2 069 3 . %5 0 1722 88 24 6 37 42 .409 20 83 798 5651 762 647 54 .72403 3 87 29 1568 98 6 3.0 %5 4 13 22 205 00 8578 .36611 56 447 7 34 5263 1 68949 3.7 5 6 74 4 82 99 024.00%81 380 87 58 1671 36 247 14 .3292329 449 75 4 5800 2 4.60 75 182 807 60 81 38 .96%31 165 047094 1283 7 28209 5 .5 2 36 0 4698 5312 62 .6038 405 84 18 7690896 8484 74 .92%4 5 6 06 30 152 78 .26 6 372 42 4098 20 886 4698 .5650 766 6454 7270 3 82 1 . %58 98 6 7 08 6 4 18 32 22 .2058 00 84478 36910 56 4434 .526 1 68 39 790 6 74 4 .8 %6 2 992 028 00118280 84 58 .1670 36 2414 32922 19 44 7 .4 530 2 8 66 0 752082 .80%78 60 84 4 38 969 30 169 045994 .1281 7 2507 53 2 359 0 .488 561 62 609 3 409 86 18 .76%8 796 847 5 74 9241 530 07 31 .93 09 1819687 29 65 37 4 .402 892 59 564 7 0 645 5 .72%10001 33 87 1153489 979 671.01 45 13 2 200 88 37 .361020 5 445 3 5261 13 672911. %313 69 739 47 825 99 0 2.00104 18 84 5 166 3 245 1 .32521093 47 7173 49 599 272.6 %106 05 75098 806 6 8702 3 .9628 1 3 04489 128 73 28 51 .10 3 29 35 07 4785 5910 6 .60%6 4 3 862 1 768869 8410 4 7 .921 4 534 0319 09 111 587 .265 370 4 406 2 8122249 .56%1 48 7 4 644 5 7230 33 811 .5 389 97 675 04 45 11 30 2 .201 6 0 88227 36508 5 444 3 .52%6 13 6191561 69 71 3 47 .81 25 990 0 6 007 608 842 5 .1668 3 244 1 32819993 41 5 71 . %1 71 49 597 276 6923 05 74 88 .806 8200 3 961 7 045 79 .121 79 73 21 5 5131 29 37 07 .4 %83685 5220 6 604 7 86 1 .761 59 8431 7 9239 538 05 31 .91 09 124 7487 243 65 36 4 .40%1 2 852 39 567 8 647 5 .7299 33 826 5 1151289 97 679.01 703 45 12 2 200 88 17 .36%8 5 442 3 3 5259 13 650919.1 911 69 77 47 863 25 98 040.00 Amount Wtd Avg Rate 12 Month Trend of Total Cost of Deposits $131.2 ($ in Millions) ($10.6) $42.4 $32.3 $17.7 2.47% 2.60% 2.74% 2.85% 2.95% 3.16% 3.33% 3.35% 3.41% 3.44% 3.40% 3.41% 3.42% Total Cost of Deposits ($43.6) $210.1 ($21.5)
10 Loans Summary • Loans grew 1.9% annualized in 1Q24 • 44% of 1Q24 payoffs were from the CRE portfolio • 70% decrease in CRE ADC Constructed unfunded commitments year over year • CRE ADC Construction Unfunded Balances decreased 61%, year over year, to $696 Million Quarterly Loan Commitment Production and Commitment Payoffs ($ in Millions) 1Q24 Change in the Loan Portfolio ($5.7) ($53.1) ($1.4) $33.9 $2.3 $32.3 $145.8 Commercial and Industrial (“C&I”) Owner occupied commercial (“OOCRE”) Non-owner occupied commercial (“NOOCRE”) Construction and land 1-4 family residential Multi-family residential MW Other ($166.0) $71.7 $267.6 $334.3 $317.0 $327.3 $282.3 $321.6 $557.2 $380.6 $490.0 $224.8 Quarterly Loan Production / Outstanding Balance Quarterly Loan Payoffs / Outstanding Balance $47,572 $52,372 $103,922 $95,544 $120,450 $43,225 $70,832 7.14% 5.29% 5.29% 4.39% 5.84% 4.70% 3.97% - 50,000 100,000 150,000 200,000 250,000 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 Outstanding Balance Average Note Rate CRE Fixed Rate Maturities $132,951 $225,980 $405,970 $278,826 $374,799 $302,526 $324,630 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 (40,000) 60,000 160,000 260,000 360,000 460,000 CRE Variable Rate Maturities ($ in Thousands)
11 CRE By Type TotalADCTerm 1,217,367465,760751,607Multifamily 1,117,252550,920566,332Whs/Industrial 700,59734,668665,929Retail 528,18613,634514,552Office 443,65739,999403,658Hotel 373,813373,813-SFR 307,397104,171203,226Commercial and Other 14,12814,128-Consumer 4,702,3971,597,0933,105,304Total Breakdown of CRE by Term and ADC % TotalOOS 3%137,544 7%318,802 4%179,544 1%32,465 2%85,625 -8,424 -22,797 -- 17%785,201 Out of State Term/ADC as % of Total CRE ($ in thousands) ($ in thousands)
12 Out of State Exposure Breakdown of Out of State % of Total$9,706,013Total Loans 12.7%$1,239,001National Businesses1 224,903Mortgage Warehouse 229,804Mortgage Servicing Rights 536,568Lender Finance 55,051Specialty Finance 192,675USDA and SBA 2.7%$257,486Mortgage 11.3%$1,101,580Out of State 8.1%785,201Texas CRE Developers 3.2%316,379 C&I / Shared National Credits ($ in thousands)
13 Net Interest Income Summary • 1Q24 NIM – 3.24% • 1Q24 Total Loans Yield – 6.81% • Average Cost of Total Deposits – 3.42% • Average earnings assets increased to $11.5 million as of 1Q24 $100.8 $99.4 $95.5 $92.8 3.69% 3.51% 3.46% 3.31% 3.24% 1Q23 2Q23 3Q23 4Q23 1Q24 Net Interest Income ("NII") NIM $106.1 NII / NIM Trend $95,5334Q23 Net Interest Income 901Impact of change in volume (1,258)Impact of deposit rate changes (1,011)Change in day count (486)Impact of loan rate changes (873)Change in earning asset mix and other $92,8061Q24 Net Interest Income ($ in thousand) Net Interest Income Rollforward Interest Rate Sensitivity1 1 Interest rate sensitivity is calculated using a static rate shock. ($ in Millions) 1Q24 1Q24 Interest Rate Scenario Percentage Change From Base EVE Shock Scenerio Percentage Change From Base Up 200 bps 9.12% Up 200 bps -3.77% Up 100 bps 4.67% Up 100 bps -1.33% BASE CASE 0.00% BASE CASE 0.00% Down 100 bps -5.89% Down 100 bps -1.51% Down 200 bps -10.32% Down 200 bps -3.98%
14 Interest Rates Summary • Average 1Q24 loan and deposit new production spread = 351 bps • Average debt securities yield at 4.25% • Average loan held for investment yield at 6.83% Variable and Hybrid Loans by Index 6.48% 6.80% 6.90% 6.85% 6.81% 2.24% 2.73% 3.15% 3.37% 3.42% 3.56% 3.60% 3.87% 4.10% 4.25% 1Q23 2Q23 3Q23 4Q23 1Q24 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% Average Total Loan Yield Average Cost of Total Deposits Average Investment Yield 5 Quarter Trend (Loans, Investments and Deposits) Variable and Hybrid Loans by Rate Index Amount (in millions) % of Variable and Hybrid Loans SOFR 5,772.2$ 78.7% Prime Rate 1,373.6$ 18.7% Other 192.8$ 2.6% Total Variable and Hybrid Loans 7,338.6$ 100.0%
15 Investments and Liquidity Summary • Represents 10.6% of total assets • 86.7% in AFS securities • Effective duration = 4.0 • 1Q24 portfolio yield = 4.25% 1Q24 Restructure • Sold $120.1 million in AFS securities with a 3.11% average yield • Reinvested a majority of the proceeds into higher yielding securities at a 6.26% average yield • Transaction will have a 1.8 years earn-back Debt Investments as % of Total Assets 89.4% 10.6% Other Assets Investment Portfolio Total Assets: $12.7 Billion 1Q24 Sources of Liquidity Current on-balance sheet: 740,769Cash and equivalents 139,050Unpledged AFS securities 879,819Total on-balance sheet 150,000Fed Funds borrowing capacity 2,212,563FHLB remaining borrowing capacity 2,968,439Federal Reserve discount window 142,977Brokered deposits available1 5,473,979Total available sources $6,353,798Total Liquidity 1 Brokered deposits available is driven by Company policy and not market availability.
16 Operating Noninterest Income Noninterest Income and Expense Summary • 1Q24 operating noninterest income = $13.0 Million • 1Q24 operating noninterest expense = $62.1 Million • Government guaranteed loan income decreased to $2.6 million from $4.4 million quarter over quarter $28.4 $45.6 $36.0 $- SBA USDA $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 4Q23 Production 1Q24 Prodcution SBA and USDA Quarter over Quarter Production ($ in millions) Operating Noninterest Expense 38% 19% 20% 3% 20% Service charges and fees on deposit accounts Loan fees Government guaranteed loan income, net Customer swap income Other income 54% 8% 10% 8% 2% 4% Salaries and employee benefits Occupancy and equipment Professional and regulatory fees Data processing and software expense Marketing Amortization of intangibles Telephone and communications Merger and acquisition (“M&A”) expense $62.1 Million $13.0 Million
A BETTER STATE OF BANKING © 2024 Veritex Bank Member FDIC Supplemental Information Veritex Holdings, Inc. First Quarter 2024 Results
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A BETTER STATE OF BANKING Veritex Holdings, Inc. First Quarter 2024 Results © 2024 Veritex Bank Member FDIC
DocumentPRESS RELEASE
FOR IMMEDIATE RELEASE
Veritex Holdings, Inc. Declares Cash Dividend on Common Stock
Dallas, TX – April 23, 2024 – 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 24, 2024 to shareholders of record as of May 10, 2024.
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:
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