Document


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): January 29, 2018
 
_________________________________________

 
VERITEX HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
 
_________________________________________

 
Texas
 
001-36682
 
27-0973566
(State or other jurisdiction of incorporation or organization)
 
(Commission File Number)
 
(I.R.S. Employer Identification Number)
 
8214 Westchester Drive, Suite 400
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:
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
_________________________________________



1



Item 2.02 Results of Operations and Financial Conditions
Item 7.01 Regulation FD Disclosure
 
On January 29, 2018, 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 fourth quarter and year ended December 31, 2017. A copy of the press release (the “Press Release”) is included as Exhibit 99.1 hereto and is incorporated herein by reference.
On Tuesday, January 30, 2018 at 8:30 a.m. Central Time, the Company will host an investor conference call and webcast to review their fourth quarter and year ended 2017 financial results. The webcast will include a slide presentation which consists of information regarding the Company’s operating and growth strategies and financial performance. The presentation materials will be posted on the Company’s website on January 30, 2018. The presentation materials are attached hereto as Exhibit 99.2, which is incorporated herein by reference.    
As provided in General Instructions B.2 to Form 8-K, the information furnished in Items 2.02, 7.01, Exhibit 99.1 and Exhibit 99.2 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
 
(d) Exhibits. The following is furnished as an exhibit to this Current Report on Form 8-K:
 
Exhibit Number
 
Description
 
 

 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Veritex Holdings, Inc.
 
 
 
 
 
By:
 
/s/ C. Malcolm Holland, III
 
 
C. Malcolm Holland, III
 
 
Chairman and Chief Executive Officer
Date:
 
January 29, 2018
 


2
Exhibit


Veritex Holdings, Inc. Reports Fourth Quarter and Record Year-End 2017 Results
Completes Transformative Acquisitions and More Than Doubles Its Asset Base
 
Dallas, TX — January 29, 2018Veritex Holdings, Inc. ("Veritex" or "the Company") (Nasdaq: VBTX), the holding company for Veritex Community Bank ("Veritex Bank"), today announced the year end results including record year over year earnings and growth. The Company ended the year with strong capital levels and is poised to further leverage its capital position. Net income available to common stockholders was $4.4 million for the fourth quarter of 2017, a decrease of $0.8 million from the third quarter of 2017, and an increase of $1.2 million from the fourth quarter of 2016. Net income available to common stockholders for the year ended December 31, 2017 was $16.2 million, up $3.7 million, or 29.2%, from the year ended December 31, 2016. Net income for the quarter and year ended December 31, 2017 were negatively impacted by a $1.9 million re-measurement of our deferred tax assets and deferred tax liabilities due to our new effective tax rate under the Tax Cuts and Jobs Act (the "Tax Act").
As part of how we measure our results, we use certain non-GAAP financial measures to ascertain performance. These non-GAAP financial measures are reconciled in the section labeled “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.
C. Malcolm Holland, the Company’s Chairman and Chief Executive Officer said, “I am delighted with our accomplishments this year. Our company has grown from $1.4 billion in assets at December 31, 2016 with 11 branches in the Dallas market to $3.0 billion in assets at December 31, 2017 with 21 continuing branches in the Dallas, Fort Worth and Houston markets."

Mr. Holland continued "The fourth quarter has been a particularly busy time for our company, even by Veritex standards. We completed the acquisition of Liberty Bancshares, Inc. and continued to manage cost savings by closing two redundant branches and we sold two Austin area branches on January 1, 2018, thus exiting that market. We continued to increase earnings per share, significantly grew the balance sheet, and were recognized once again as one of the best places to work."

Mr. Holland concluded, "I am excited about 2018 and the opportunities that are ahead of us. Our staff continues to be the reason why we stand apart from the competition. With continued focus on our employees and the Veritex culture, we will be able to achieve the goals we have set for ourselves in 2018."

2017 Fourth Quarter Highlights
Net income available for common stockholders for the quarter ended December 31, 2017 was $4.4 million, or $0.19 diluted earnings per share ("EPS"), compared to $5.1 million, or $0.25 diluted EPS, for the quarter ended September 30, 2017.
Core net income available for common stockholders totaled $5.4 million, or $0.23 core diluted EPS, for the quarter ended December 31, 2017, compared to $5.6 million, or $0.28 core diluted EPS, for the quarter ended September 30, 2017. The decrease in core net income available for common stockholders is primarily due to an increase in the provision for loan losses further discussed in the "Asset Quality" section of this release.
Net income available for common stockholders for the quarter ended December 31, 2017 was impacted by an income tax charge of $1.9 million related to the re-measurement of our deferred tax assets and deferred tax liabilities at our new expected tax rate due to the enactment of the Tax Act.
Net interest margin ("NIM") improved to 4.24% and core NIM improved to 3.75% for the quarter ended December 31, 2017, compared to a NIM of 3.78% and core NIM of 3.66% for the third quarter of 2017.
Total loans increased $352.3 million, or 18.5%, to $2.3 billion compared to the third quarter of 2017. Excluding acquired loans from the Liberty acquisition, loans grew $39.7 million, or 13.8% annualized.
Total deposits increased $357.3 million, or 18.0%, to $2.3 billion compared to the third quarter of 2017.
In November 2017, Veritex Bank was named in the list of The Dallas Morning News’ Top 100 Places to Work 2017.


1




Full Year 2017 Highlights 
Net income available for common stockholders for the year ended December 31, 2017 was $16.2 million, or $0.86 diluted EPS, compared to $12.6 million, or $1.13 diluted EPS, for the year ended December 31, 2016.
Core net income available for common stockholders totaled $17.9 million, or $0.95 core diluted EPS, for the year ended December 31, 2017, compared to $12.6 million, or $1.13 core diluted EPS, for the year ended December 31, 2016.
Total loans as of December 31, 2017 grew $1.3 billion, or 127.8%, compared to December 31, 2016. Excluding acquired loans from Sovereign and Liberty of $1.1 billion, loans grew $203.0 million, or 20.5% compared to December 31, 2016.
Noninterest-bearing deposits as of December 31, 2017, which includes branch deposits held for sale, increased $324.6 million, or 99.1%, compared to December 31, 2016.
Closed acquisitions with Sovereign Bancshares, Inc. ("Sovereign") on August 1, 2017 and Liberty Bancshares, Inc. ("Liberty") on December 1, 2017.
Completed a public offering of 2,285,050 shares of common stock with net proceeds of $56.7 million.
Received American Bankers' "Best Bank to Work For" for the fourth consecutive year.

Result of Operations for the Three Months Ended December 31, 2017
 
Net Interest Income

For the three months ended December 31, 2017, net interest income before provision for loan losses was $25.8 million and net interest margin was 4.24% compared to $19.1 million and 3.78%, respectively, for the three months ended September 30, 2017. The $6.7 million increase from the three months ended September 30, 2017 was primarily due to an increase in interest income on loans, which was driven by increased volume in all loan categories resulting from loans acquired from Liberty on December 1, 2017, and continued organic loan growth. Net interest margin increased 46 basis points from the three months ended September 30, 2017, primarily due to a change in mix of earnings assets resulting from increases in loans, which tend to yield greater interest rates than other interest earning assets. Average loan balances represented 84.3% of average interest-earning assets for the three months ended December 31, 2017 compared to 81.9% for the three months ended September 30, 2017.
 
Net interest income before provision for loan losses increased by $15.3 million from $10.5 million to $25.8 million for the three months ended December 31, 2017 compared to the same period during 2016. The increase in net interest income before provision for loan losses was primarily driven by higher loan balances resulting from loans acquired from Sovereign and Liberty and continued organic loan growth. For the three months ended December 31, 2017, average loan balances increased by $1.1 billion compared to the three months ended December 31, 2016, which resulted in a $16.5 million increase in interest income. Net interest margin increased 80 basis points from the three months ended December 31, 2016 primarily due to a change in mix of earnings assets resulting from increased loan balances as well as benefits of increases in the prime rates in new and renewed loans. Average loan balances represented 84.3% of average interest-earning assets for the three months ended December 31, 2017 compared to 79.9% for the three months ended December 31, 2016.
 
Noninterest Income
 
Noninterest income for the three months ended December 31, 2017 was $2.3 million, an increase of $321 thousand compared to the three months ended September 30, 2017. The net increase was primarily due to a $267 thousand gain on the sale of an other real estate owned property during the fourth quarter of 2017 with no corresponding sale in the third quarter of 2017. In addition, the increase was due to $138 thousand of rental income resulting from the purchase of our headquarter building on December 6, 2017 and an increase of $100 thousand in dividend income as a result of bi-annual Federal Reserve Bank stock dividends. This increase was partially offset by a $136 thousand decrease in gain on sale of SBA loans.

Compared to the three months ended December 31, 2016, noninterest income grew $474 thousand. The increase was primarily due to the $267 thousand gain on the sale of other real estate owned referenced above with no corresponding sale in the fourth quarter of 2016, a $232 thousand increase in service charges and fees on deposit accounts resulting from the additional acquired Sovereign and Liberty deposit accounts and the associated income from these accounts and $136 thousand of rental income resulting from the purchase of our headquarter building.
Noninterest Expense
 
Noninterest expense was $15.0 million for the three months ended December 31, 2017, compared to $12.5 million for the three months ended September 30, 2017, an increase of $2.5 million. The increase was primarily driven by a $1.4 million increase in salaries and employee benefits expense, primarily due to one month of additional salaries and employee benefit expenses related to the addition of full-time equivalent employees associated with the Liberty acquisition which closed on December 1, 2017 and one additional month of salaries and employee benefit expenses for employees associated with the Sovereign acquisition compared to the three months ended September 30, 2017. Due to the Sovereign acquisition closing on August 1, 2017, two months of salaries and employee benefit expense related to Sovereign employees were included for the three months ended September 30, 2017 compared to three months of expense related to Sovereign employees for the three months ended December 31, 2017.

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Compared to the three months ended December 31, 2016, noninterest expense for the three months ended December 31, 2017 increased $8.0 million. The increase was primarily driven by a $3.7 million increase in salaries and employee benefits expense related to the additional full-time equivalent employees as result of the Sovereign and Liberty acquisitions. Additionally, occupancy and equipment expense increased $1.0 million primarily due to the addition of eight owned buildings and eight property leases from the Sovereign and Liberty acquisitions and professional fees increased $770 thousand which were primarily a result of the use of legal and other professional services association with the Sovereign and Liberty acquisitions.

Financial Condition
 
Total loans were $2.3 billion at December 31, 2017, an increase of $352.3 million, or 18.5%, compared to the third quarter of 2017 and $1.3 billion, or 127.8%, compared to December 31, 2016. We acquired loans from Sovereign and Liberty with an acquisition date fair value of $752.5 million and $312.6 million, respectively. For the fourth quarter of 2017, excluding acquired loans from the Liberty acquisition, loans grew $39.7 million, or 13.8% annualized.
 
Total deposits were $2.3 billion at December 31, 2017, an increase of $357.3 million, or 18.0%, compared to the third quarter of 2017 and $1.2 billion, or 109.3%, compared the year ended December 31, 2016. We assumed deposits with an acquisition date fair value of $809.4 million and estimated $395.9 million in the Sovereign and Liberty acquisitions, respectively.

Asset Quality
    
Our allowance for loan losses as a percentage of loans was 0.57%, 0.55%, and 0.86% of total loans at December 31, 2017, September 30, 2017, and December 31, 2016, respectively. The allowance for loan losses as a percentage of total loans for each of the three quarters ended was determined by the qualitative factors around the nature, volume and mix of the loan portfolio. The decrease in the allowance for loan loss as a percentage of total loans from December 31, 2016 was attributable to the completion of the Sovereign acquisition on August 1, 2017 and the Liberty acquisition on December 1, 2017, as acquired loans are recorded at fair value.

The provision for loan losses for the three months ended December 31, 2017 totaled $2.5 million compared to $752 thousand and $440 thousand for three months ended September 30, 2017 and December 31, 2016, respectively. The increase in provision for loan losses compared to September 30, 2017 and December 31, 2016 was primarily due to the general provision required from an increase of loans acquired through the acquisitions of Sovereign and Liberty that were re-underwritten following completion of the respective acquisitions as well as an increase in organic loan growth. Once an acquired loan undergoes new underwriting and meets the criteria for a new loan, any remaining fair value adjustments are taken into interest income and the loan becomes fully subject to our allowance for loan loss methodology. In addition, a provision of $629 thousand was taken for an energy loan moved into nonperforming status discussed below.
Nonperforming assets totaled $14.4 million, or 0.49%, of total assets at December 31, 2017 compared to $2.6 million, or 0.11%, of total assets at September 30, 2017 and $2.4 million, or 0.17%, of total assets at December 31, 2016. The increase of $11.8 million in nonperforming assets compared to September 30, 2017 was primarily due to the addition of a $13.4 million energy loan resulting from a decline in collateral value and deteriorating performance of the borrower.
Non-GAAP Financial Measures
 
The Company’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, the Company reviews and reports core net interest income, core non-interest expense, core net income from operations, core net income, core net income available to common stockholders, core diluted earnings per share, core efficiency ratio, core net interest margin, tangible book value per common share and the tangible common equity to tangible assets ratio. The Company has included in this release information related to these non-GAAP financial measures for the applicable periods presented. Please refer to “Reconciliation of Non-GAAP Financial Measures” at the end of this release for a reconciliation of these non-GAAP financial measures.
 

3



Business Combinations Measurement Period
The measurement period for the Company to determine the fair values of acquired identifiable assets and assumed liabilities for Sovereign and Liberty will end at the earlier of (i) twelve months from the date of the acquisition or (ii) as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. Provisional estimates for bank premises, furniture and equipment, goodwill, intangible assets and deferred taxes have been recorded for the Sovereign acquisition and provisional estimates for loans, bank premises, furniture and equipment, goodwill, intangible assets, deferred taxes and deposits have been recorded for the Liberty acquisition as independent valuations have not been finalized. Changes to provisional estimates could potentially have an impact on the re-measurement of our deferred taxes.
Conference Call
The Company will also host an investor conference call to review the results on Tuesday, January 30, 2018 at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/m6/p/s7inoejd and will receive a unique pin number, which can be used when dialing in for the call. This will allow attendees to enter the call immediately. Alternatively, participants may call toll-free at (877) 703-9880.
The call and corresponding presentation slides will be webcast live on the home page of the Company's website, www.veritexbank.com. An audio replay will be available one hour after the conclusion of the call at (855) 859-2056, Conference #9875609. This replay, as well as the webcast, will be available until February 6, 2018.
About Veritex Holdings, Inc.
Headquartered in Dallas, Texas, Veritex Holdings, Inc. is a bank holding company that conducts banking activities through its wholly-owned subsidiary, Veritex Community Bank, with nineteen branch locations and a mortgage office throughout the Dallas/Fort Worth metropolitan area and one branch 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 Contact:
LaVonda Renfro
972-349-6200
lrenfro@veritexbank.com

Investor Relations:
Susan Caudle
972-349-6132
scaudle@veritexbank.com

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding Veritex’s future financial performance, business and growth strategy, projected plans and objectives, and related transactions, integration of the acquired businesses, ability to recognize anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about Veritex and its subsidiaries, any of which may change over time and some of which may be beyond Veritex’s control. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to whether Veritex can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions; continue to sustain internal growth rate; provide competitive products and services that appeal to its customers and target market; difficult market

4



conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which Veritex operates and in which its loans are concentrated, including the effects of declines in housing markets; an increase in unemployment levels and slowdowns in economic growth; Veritex's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of Veritex's investment securities portfolio; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in our loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of Veritex's operations including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; Veritex's ability to comply with applicable capital and liquidity requirements, including our ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations; the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and manmade disasters including terrorist attacks;; and achieve its performance goals. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Special Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Veritex’s Annual Report on Form 10-K filed with the SEC on March 10, 2017 and any updates to those risk factors set forth in Veritex’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. 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, and Veritex does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for us to predict those events or how they may affect us. In addition, Veritex cannot assess the impact of each factor on Veritex’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this communication 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. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.



5



VERITEX HOLDINGS, INC. AND SUBSIDIARY
Consolidated Financial Highlights - (Unaudited)
(Dollars in thousands)
 
 
At and For the Three Months Ended
 
 
December 31,
2017
 
September 30,
2017
 
June 30,
2017
 
March 31,
2017
 
December 31,
2016
Selected Financial Data:
 
 
 
 

 
 

 
 

 
 

Net income
 
$
4,368

 
$
5,182

 
$
3,615

 
$
3,098

 
$
3,190

Net income available to common stockholders
 
4,368

 
5,140

 
3,615

 
3,098

 
3,190

Total assets
 
2,946,693

 
2,494,861

 
1,508,589

 
1,522,015

 
1,408,507

Total loans(1)
 
2,259,831

 
1,907,509

 
1,122,468

 
1,020,970

 
991,897

Provision for loan losses
 
2,529

 
752

 
943

 
890

 
440

Allowance for loan losses
 
12,808

 
10,492

 
9,740

 
8,816

 
8,524

Noninterest-bearing deposits(2)
 
652,218

 
495,627

 
337,057

 
338,226

 
327,614

Total deposits(2)
 
2,342,912

 
1,985,658

 
1,211,107

 
1,221,696

 
1,119,630

Total stockholders’ equity
 
490,039

 
445,929

 
247,602

 
242,725

 
239,088

Summary Performance Ratios:
 
 
 
 
 
 

 
 

 
 

Return on average assets(3)
 
0.64
%
 
0.94
%
 
0.97
%
 
0.83
%
 
0.97
%
Return on average equity(3)
 
3.73

 
5.44

 
5.89

 
5.20

 
8.11

Net interest margin(4)
 
4.24

 
3.78

 
3.53

 
3.21

 
3.44

Efficiency ratio(5)
 
53.60

 
59.33

 
55.03

 
58.26

 
57.39

Noninterest expense to average assets(3)
 
2.22

 
2.26

 
2.08

 
1.99

 
2.16

Summary Credit Quality Data:
 
 
 
 
 
 

 
 

 
 

Nonaccrual loans
 
$
13,905

 
$
1,856

 
$
1,514

 
$
1,686

 
$
941

Accruing loans 90 or more days past due(6)
 
18

 
54

 
15

 
212

 
835

Other real estate owned
 
449

 
738

 
493

 
998

 
662

Nonperforming assets to total assets
 
0.49
%
 
0.11
%
 
0.13
%
 
0.19
%
 
0.17
%
Nonperforming loans to total loans
 
0.62

 
0.10

 
0.14

 
0.19

 
0.18

Allowance for loan losses to total loans
 
0.57

 
0.55

 
0.87

 
0.86

 
0.86

Net charge-offs to average loans outstanding
 
0.01

 

 

 
0.06

 
0.03

Capital Ratios:
 
 
 
 
 
 

 
 

 
 

Total stockholders’ equity to total assets
 
16.63
%
 
17.87
%
 
16.41
%
 
15.95
%
 
16.97
%
Tangible common equity to tangible assets
 
11.06

 
12.76

 
14.77

 
14.31

 
15.23

Tier 1 capital to average assets
 
12.85

 
15.26

 
15.09

 
14.65

 
16.82

Tier 1 capital to risk-weighted assets
 
12.41

 
14.17

 
18.17

 
19.94

 
20.72

Common equity tier 1 (to risk weighted assets)
 
12.23

 
13.65

 
17.92

 
19.66

 
20.42

Total capital to risk-weighted assets
 
13.10

 
14.87

 
19.37

 
21.20

 
22.02

__________________________
(1)
Total loans does not include loans held for sale and deferred fees. Loans held for sale were $0.8 million at December 31, 2017, $2.2 million at September 30, 2017, $4.1 million at June 30, 2017, $1.9 million at March 31, 2017, and $5.2 million at December 31, 2016. Deferred fees were $28 thousand at December 31, 2017, $28 thousand at September 30, 2016, $40 thousand at June 30, 2017, $48 thousand at March 31, 2017, and $55 thousand at December 31, 2016. Total loans include branch assets held for sale of $26.3 million at December 31, 2017.
(2)
Total noninterest-bearings deposits and total deposits at December 31, 2017 include branch liabilities held for sale of $39.4 million and $64.3 million, respectively.
(3)
We calculate our average assets and average equity for a period by dividing the sum of our total assets or total stockholders’ equity, as the case may be, at the close of business on each day in the relevant period, by the number of days in the period. We have calculated our return on average assets and return on average equity for a period by dividing net income for that period by our average assets and average equity, as the case may be, for that period.
(4)
Net interest margin represents net interest income, annualized on a fully tax equivalent basis, divided by average interest-earning assets.
(5)
Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
(6)
Accruing loans 90 or more days past due excludes $3.3 million of PCI loans acquired from Sovereign as of December 31, 2017 and September 30, 2017. No PCI loans were considered non-performing loans as of December 31, 2017.


6



VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets - (Unaudited)
(In thousands)

 
 
December 31,
2017
 
September 30,
2017
 
June 30,
2017
 
March 31,
2017
 
December 31,
2016
ASSETS
 
 
 
 

 
 

 
 

 
 

Cash and due from banks
 
$
38,243

 
$
21,879

 
$
28,687

 
$
23,021

 
$
15,631

Interest bearing deposits in other banks
 
110,801

 
129,497

 
144,459

 
262,714

 
219,160

Total cash and cash equivalents
 
149,044

 
151,376

 
173,146

 
285,735

 
234,791

Investment securities
 
228,117

 
204,788

 
134,708

 
138,698

 
102,559

Loans held for sale
 
841

 
2,179

 
4,118

 
1,925

 
5,208

Loans, net
 
2,220,682

 
1,896,989

 
1,112,688

 
1,012,106

 
983,318

Accrued interest receivable
 
7,676

 
6,387

 
3,333

 
2,845

 
2,907

Bank-owned life insurance
 
21,476

 
20,517

 
20,369

 
20,224

 
20,077

Bank premises, furniture and equipment, net
 
75,251

 
40,129

 
17,978

 
17,521

 
17,413

Non-marketable equity securities
 
13,732

 
10,283

 
7,407

 
7,375

 
7,366

Investment in unconsolidated subsidiary
 
352

 
352

 
93

 
93

 
93

Other real estate owned
 
449

 
738

 
493

 
998

 
662

Intangible assets, net
 
20,441

 
10,531

 
2,171

 
2,161

 
2,181

Goodwill
 
162,265

 
135,832

 
26,865

 
26,865

 
26,865

Branch assets held for sale
 
33,552

 

 

 

 

Other assets
 
12,815

 
14,760

 
5,220

 
5,469

 
5,067

Total assets
 
$
2,946,693

 
$
2,494,861

 
$
1,508,589

 
$
1,522,015

 
$
1,408,507

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 

 
 

 
 

 
 
Deposits:
 
 
 
 

 
 

 
 

 
 
Noninterest-bearing
 
$
612,830

 
$
495,627

 
$
337,057

 
$
338,226

 
$
327,614

Interest-bearing
 
1,665,800

 
1,490,031

 
874,050

 
883,470

 
792,016

Total deposits
 
2,278,630

 
1,985,658

 
1,211,107

 
1,221,696

 
1,119,630

Accounts payable and accrued expenses
 
5,098

 
4,017

 
2,574

 
1,631

 
2,914

Accrued interest payable and other liabilities
 
5,446

 
4,368

 
1,032

 
9,655

 
534

Advances from Federal Home Loan Bank
 
71,164

 
38,200

 
38,235

 
38,271

 
38,306

Junior subordinated debentures
 
11,702

 
11,702

 
3,093

 
3,093

 
3,093

Subordinated notes
 
4,987

 
4,987

 
4,946

 
4,944

 
4,942

Branch liabilities held for sale
 
64,627

 

 

 

 

Other borrowings
 
15,000

 

 

 

 

Total liabilities
 
2,456,654

 
2,048,932

 
1,260,987

 
1,279,290

 
1,169,419

Commitments and contingencies
 
 
 
 
 
 

 
 

 
 
Stockholders’ equity:
 
 
 
 
 
 

 
 

 
 
Common stock
 
241

 
227

 
152

 
152

 
152

Additional paid-in capital
 
445,517

 
404,900

 
211,901

 
211,512

 
211,173

Retained earnings
 
45,510

 
41,143

 
36,003

 
32,388

 
29,290

Unallocated Employee Stock Ownership Plan shares
 
(106
)
 
(209
)
 
(209
)
 
(209
)
 
(209
)
Accumulated other comprehensive (loss)
 
(1,053
)
 
(62
)
 
(175
)
 
(1,048
)
 
(1,248
)
Treasury stock, 10,000 shares at cost
 
(70
)
 
(70
)
 
(70
)
 
(70
)
 
(70
)
Total stockholders’ equity
 
490,039

 
445,929

 
247,602

 
242,725

 
239,088

Total liabilities and stockholders’ equity
 
$
2,946,693

 
$
2,494,861

 
$
1,508,589

 
$
1,522,015

 
$
1,408,507




7


VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income - (Unaudited)
(In thousands, except per share data)

 
 
For the Year Ended
 
 
December 31, 2017
 
December 31, 2016
Interest income:
 
 

 
 

Interest and fees on loans
 
$
73,795

 
$
44,681

Interest on investment securities
 
3,462

 
1,409

Interest on deposits in other banks
 
2,287

 
503

Interest on other
 
8

 
2

Total interest income
 
79,552

 
46,595

Interest expense:
 
 
 
 
Interest on deposit accounts
 
9,878

 
4,988

Interest on borrowings
 
1,166

 
652

Total interest expense
 
11,044

 
5,640

Net interest income
 
68,508

 
40,955

Provision for loan losses
 
5,114

 
2,050

Net interest income after provision for loan losses
 
63,394

 
38,905

Noninterest income:
 
 
 
 
Service charges and fees on deposit accounts
 
2,502

 
1,846

Gain on sales of investment securities
 
222

 
15

Gain on sales of loans and other assets owned
 
3,141

 
3,288

Bank-owned life insurance
 
753

 
771

Other
 
958

 
583

Total noninterest income
 
7,576

 
6,503

Noninterest expense:
 
 
 
 
Salaries and employee benefits
 
20,828

 
14,332

Occupancy and equipment
 
5,618

 
3,667

Professional fees
 
5,672

 
2,804

Data processing and software expense
 
2,217

 
1,158

FDIC assessment fees
 
1,177

 
661

Marketing
 
1,293

 
983

Other assets owned expenses and write-downs
 
182

 
163

Amortization of intangibles
 
964

 
380

Telephone and communications
 
720

 
402

Other
 
4,118

 
1,840

Total noninterest expense
 
42,789

 
26,390

Net income from operations
 
28,181

 
19,018

Income tax expense
 
11,918

 
6,467

Net income
 
$
16,263

 
$
12,551

Preferred stock dividends
 
$
42

 
$

Net income available to common stockholders
 
$
16,221

 
$
12,551

Basic earnings per share
 
$
0.88

 
$
1.16

Diluted earnings per share
 
$
0.86

 
$
1.13

Weighted average basic shares outstanding
 
18,404

 
10,849

Weighted average diluted shares outstanding
 
18,810

 
11,153




8



VERITEX HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income - (Unaudited)
(In thousands, except per share data)

 
 
For the Three Months Ended
 
 
December 31,
2017
 
September 30,
2017
 
June 30,
2017
 
March 31,
2017
 
December 31,
2016
Interest income:
 
 
 
 

 
 

 
 

 
 

Interest and fees on loans
 
$
28,182

 
$
20,706

 
$
13,024

 
$
11,883

 
$
11,684

Interest on investment securities
 
1,211

 
941

 
735

 
575

 
396

Interest on deposits in other banks
 
500

 
629

 
548

 
610

 
200

Interest on other
 
4

 
3

 

 
1

 
1

Total interest income
 
29,897

 
22,279

 
14,307

 
13,069

 
12,281

Interest expense:
 
 
 
 
 
 

 
 

 
 

Interest on deposit accounts
 
3,677

 
2,812

 
1,742

 
1,647

 
1,600

Interest on borrowings
 
470

 
338

 
189

 
169

 
161

Total interest expense
 
4,147

 
3,150

 
1,931

 
1,816

 
1,761

Net interest income
 
25,750

 
19,129

 
12,376

 
11,253

 
10,520

Provision for loan losses
 
2,529

 
752

 
943

 
890

 
440

Net interest income after provision for loan losses
 
23,221

 
18,377

 
11,433

 
10,363

 
10,080

Noninterest income:
 
 
 
 
 
 

 
 

 
 

Service charges and fees on deposit accounts
 
769

 
669

 
555

 
509

 
537

Gain on sales of investment securities
 
17

 
205

 

 

 

Gain on sales of loans and other assets owned
 
882

 
705

 
807

 
747

 
970

Bank-owned life insurance
 
192

 
188

 
186

 
187

 
194

Other
 
438

 
210

 
218

 
92

 
123

Total noninterest income
 
2,298

 
1,977

 
1,766

 
1,535

 
1,824

Noninterest expense:
 
 
 
 
 
 

 
 

 
 

Salaries and employee benefits
 
7,357

 
5,921

 
3,642

 
3,908

 
3,650

Occupancy and equipment
 
1,996

 
1,596

 
1,015

 
1,011

 
949

Professional fees
 
1,713

 
1,973

 
1,188

 
798

 
943

Data processing and software expense
 
766

 
719

 
372

 
360

 
308

FDIC assessment fees
 
116

 
410

 
393

 
258

 
213

Marketing
 
388

 
436

 
225

 
244

 
279

Other assets owned expenses and write-downs
 
73

 
71

 
13

 
25

 
24

Amortization of intangibles
 
551

 
223

 
95

 
95

 
95

Telephone and communications
 
282

 
230

 
106

 
102

 
107

Other
 
1,793

 
943

 
733

 
649

 
516

Total noninterest expense
 
15,035

 
12,522

 
7,782

 
7,450

 
7,084

Net income from operations
 
10,484

 
7,832

 
5,417

 
4,448

 
4,820

Income tax expense
 
6,116

 
2,650

 
1,802

 
1,350

 
1,630

Net income
 
$
4,368

 
$
5,182

 
$
3,615

 
$
3,098

 
$
3,190

Preferred stock dividends
 
$

 
$
42

 
$

 
$

 
$

Net income available to common stockholders
 
$
4,368

 
$
5,140

 
$
3,615

 
$
3,098

 
$
3,190

Basic earnings per share
 
$
0.19

 
$
0.26

 
$
0.24

 
$
0.20

 
$
0.28

Diluted earnings per share
 
$
0.19

 
$
0.25

 
$
0.23

 
$
0.20

 
$
0.27

Weighted average basic shares outstanding
 
23,124

 
19,976

 
15,211

 
15,200

 
11,299

Weighted average diluted shares outstanding
 
23,524

 
20,392

 
15,637

 
15,632

 
11,653


9



VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures - (Unaudited)
(In thousands, except per share data and percentages)
The following table reconciles, at the dates set forth below, GAAP net income available to common stockholders to core (non-GAAP) net income available to common stockholders, core diluted earnings per share, core efficiency ratio and core net interest margin:
 
 
For the Three Months Ended
 
 
December 31,
2017
 
September 30,
2017
 
June 30,
2017
 
March 31,
2017
 
December 31,
2016
Net interest income (as reported)
 
$
25,750

 
$
19,129

 
$
12,376

 
$
11,253

 
$
10,520

Adjustment:
 
 
 
 
 
 
 
 
 


Income recognized on acquired loans
 
2,955

 
637

 
135

 
55

 
61

Core net interest income
 
22,795

 
18,492

 
12,241

 
11,198

 
10,459

Provision for loan losses (as reported)
 
2,529

 
752

 
943

 
890

 
440

Noninterest income (as reported)
 
2,298

 
1,977

 
1,766

 
1,535

 
1,824

Noninterest expense (as reported)
 
15,035

 
12,522

 
7,782

 
7,450

 
7,084

Adjustment:
 
 
 
 
 
 
 
 
 
 
Merger and acquisition ("M&A") costs
 
(1,018
)
 
(1,391
)
 
(193
)
 
(89
)
 
(279
)
Core noninterest expense
 
14,017

 
11,131

 
7,589

 
7,361

 
6,805

Core net income from operations
 
8,547

 
8,586

 
5,475

 
4,482

 
5,038

Income tax expense (as reported)

 
6,116

 
2,650

 
1,802

 
1,350

 
1,630

Adjustments:
 
 
 
 
 
 
 
 
 
 
Tax impact of adjustments
 
(678
)
 
264

 
20

 
12

 
76

Tax Act re-measurement
 
(1,940
)
 

 

 

 

Other M&A discrete tax items
 
(398
)
 

 

 

 

Core income tax expense
 
3,100

 
2,914

 
1,822

 
1,362

 
1,706

Core net income
 
$
5,447

 
$
5,672

 
$
3,653

 
$
3,120

 
$
3,332

Preferred stock dividends (as reported)
 

 
42

 



 

Core net income available to common stockholders
 
$
5,447

 
$
5,630

 
$
3,653

 
$
3,120

 
$
3,332

 
 
 
 
 
 
 
 
 
 
 
Weighted average diluted shares outstanding

 
23,524

 
20,392

 
15,637

 
15,632

 
11,653

 
 
 
 
 
 
 
 
 
 
 
Diluted earnings per share (as reported)
 
0.19

 
0.25

 
0.23

 
0.20

 
0.27

Core diluted earnings per share(1)
 
0.23

 
0.28

 
0.23

 
0.20

 
0.29

 
 
 
 
 
 
 
 
 
 
 
Efficiency Ratio
 
 
 
 
 
 
 
 
 
 
Efficiency ratio (as reported)
 
53.60
%
 
59.33
%
 
55.03
%
 
58.26
%
 
57.39
%
Core efficiency ratio(2)
 
55.86
%
 
54.38
%
 
54.18
%
 
57.81
%
 
55.40
%
 
 
 
 
 
 
 
 
 
 
 
Net Interest Margin
 
 
 
 
 
 
 
 
 
 
Net interest margin (as reported)
 
4.24
%
 
3.78
%
 
3.53
%
 
3.21
%
 
3.44
%
Core net interest margin(3)
 
3.75
%
 
3.66
%
 
3.49
%
 
3.19
%
 
3.42
%
___________________________
(1)
Core diluted earnings per share is defined as core net income available to common stockholders divided by weighted average diluted shares outstanding. Excluded from net income available to common stockholders are income recognized on acquired loans, merger and acquisition costs, the tax impact of the adjustments to core net interest income and core noninterest expense, the re-measurement of our deferred tax asset as a result of the Tax Act and the tax impact of other M&A discrete tax items.

(2)
We calculate core efficiency ratio as core noninterest expense divided by the sum of core net interest income and noninterest income (as reported).

(3)
Core net interest margin is equal to core net interest income divided by average interest-earning assets.



10



VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures - (Unaudited)
(In thousands, except per share data and percentages)
The following table reconciles, at the dates set forth below, GAAP net income available to common stockholders to core (non-GAAP) net income available to common stockholders, core diluted earnings per share, core efficiency ratio and core net interest margin:
 
 
For the Years Ended
 
 
December 31,
2017
 
December 31,
2016
Net interest income (as reported)
 
$
68,508

 
$
40,955

Adjustment:
 
 
 
 
Income recognized on acquired loans
 
3,782

 
425

Core net interest income
 
64,726

 
40,530

Provision for loan losses (as reported)
 
5,114

 
2,050

Noninterest income (as reported)
 
7,576

 
6,503

Noninterest expense (as reported)
 
42,789

 
26,390

Adjustment:
 
 
 
 
Merger and acquisition costs
 
(2,691
)
 
(472
)
Core noninterest expense
 
40,098

 
25,918

Core net income from operations
 
27,090

 
19,065

Income tax expense (as reported)

 
11,918

 
6,467

Adjustment:
 
 
 
 
Tax impact of adjustments
 
(382
)
 
16

Tax Act re-measurement
 
(1,940
)
 

Other M&A discrete tax items
 
(398
)


Core income tax expense
 
9,198

 
6,483

Core net income
 
$
17,892

 
$
12,582

Preferred stock dividends (as reported)
 
42

 

Core net income available to common stockholders
 
$
17,850

 
$
12,582

 
 
 
 
 
Weighted average diluted shares outstanding

 
18,810

 
11,153

 
 
 
 
 
Diluted earnings per share (as reported)
 
0.86

 
1.13

Core diluted earnings per share
 
0.95

 
1.13

 
 
 
 
 
Efficiency Ratio
 
 
 
 
Efficiency ratio (as reported)
 
56.24
%
 
55.61
%
Core efficiency ratio
 
55.46
%
 
55.11
%
 
 
 
 
 
Net Interest Margin
 
 
 
 
Net interest margin (as reported)
 
3.77
%
 
3.72
%
Core net interest margin
 
3.56
%
 
3.68
%









11



VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures - (Unaudited)
(In thousands, except per share data and percentages)
The following table reconciles, at the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and presents our book value per common share to our tangible book value per share:

 
 
December 31,
2017
 
September 30,
2017
 
June 30,
2017
 
March 31,
2017
 
December 31,
2016
Tangible Common Equity
 
 
 
 

 
 

 
 

 
 

Total stockholders’ equity
 
$
490,039

 
$
445,929

 
$
247,602

 
$
242,725

 
$
239,088

Adjustments:
 
 
 
 

 
 

 
 

 
 

Goodwill
 
(162,265
)
 
(135,832
)
 
(26,865
)
 
(26,865
)
 
(26,865
)
Intangible assets(1)
 
(22,165
)
 
(10,531
)
 
(2,171
)
 
(2,161
)
 
(2,181
)
Total tangible common equity
 
$
305,609

 
$
299,566

 
$
218,566

 
$
213,699

 
$
210,042

Tangible Assets
 
 
 
 

 
 

 
 

 
 

Total assets
 
$
2,946,693

 
$
2,494,861

 
$
1,508,589

 
$
1,522,015

 
$
1,408,507

Adjustments:
 
 
 
 

 
 

 
 

 
 

Goodwill
 
(162,265
)
 
(135,832
)
 
(26,865
)
 
(26,865
)
 
(26,865
)
Intangible assets(1)
 
(22,165
)
 
(10,531
)
 
(2,171
)
 
(2,161
)
 
(2,181
)
Total tangible assets
 
$
2,762,263

 
$
2,348,498

 
$
1,479,553

 
$
1,492,989

 
$
1,379,461

Tangible Common Equity to Tangible Assets(2)
 
11.06
%
 
12.76
%
 
14.77
%
 
14.31
%
 
15.23
%
Common shares outstanding
 
24,110

 
22,644

 
15,233

 
15,229

 
15,195

 
 
 
 
 
 
 
 
 
 
 
Book value per common share(3)
 
$
20.33

 
$
19.69

 
$
16.25

 
$
15.94

 
$
15.73

Tangible book value per common share(4)
 
$
12.68

 
$
13.23

 
$
14.35

 
$
14.03

 
$
13.82

___________________________
(1)
Intangible assets as of December 31, 2017 include branch intangible assets held for sale of $1.7 million.
(2)
We calculate tangible common equity as total stockholders’ equity less goodwill and other intangible assets, net of accumulated amortization, and we calculate tangible assets as total assets less goodwill and other intangible assets, net of accumulated amortization.
(3)
We calculate book value per common share as total stockholders’ equity at the end of the relevant period divided by the outstanding number of shares of our common stock at the end of the relevant period.
(4)
We calculate tangible book value per common share as total tangible common equity, divided by the outstanding number of shares of our common stock at the end of the relevant period.


 


12



VERITEX HOLDINGS, INC. AND SUBSIDIARY
Net Interest Margin - (Unaudited)
(In thousands, except percentages)

 
 
For the Three Months Ended
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
 
Average
Outstanding
Balance
 
Interest
Earned/
Interest
Paid
 
Average
Yield/
Rate
 
Average
Outstanding
Balance
 
Interest
Earned/
Interest
Paid
 
Average
Yield/
Rate
 
Average
Outstanding
Balance
 
Interest
Earned/
Interest
Paid
 
Average
Yield/
Rate
Assets
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Interest-earning assets:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Total loans(1)(4)
 
$
2,030,587

 
$
28,182

 
5.51
%
 
$
1,643,077

 
$
20,706

 
5.00
%
 
$
971,977

 
$
11,684

 
4.78
%
Securities available for sale
 
233,244

 
1,211

 
2.06

 
191,265

 
941

 
1.95

 
96,814

 
396

 
1.63

Interest-earning deposits in financial institutions
 
145,099

 
500

 
1.37

 
171,461

 
629

 
1.46

 
147,974

 
200

 
0.54

Investment in subsidiary
 
352

 
4

 
4.51

 
265

 
3

 
4.49

 
93

 
1

 
4.28

Total interest-earning assets
 
2,409,282

 
29,897

 
4.92

 
2,006,068

 
22,279

 
4.41

 
1,216,858

 
12,281

 
4.02

Allowance for loan losses
 
(10,658
)
 
 
 
 

 
(9,910
)
 
 

 
 

 
(8,353
)
 
 
 
 

Noninterest-earning assets(4)
 
294,298

 
 
 
 

 
202,352

 
 

 
 

 
98,379

 
 
 
 

Total assets
 
$
2,692,922

 
 
 
 

 
$
2,198,510

 
 

 
 

 
$
1,306,884

 
 
 
 

Liabilities and Stockholders’ Equity
 
 
 
 
 
 

 
 

 
 

 
 

 
 
 
 
 
 

Interest-bearing liabilities:
 
 
 
 
 
 

 
 

 
 

 
 

 
 
 
 
 
 

Interest-bearing deposits(4)
 
$
1,571,573

 
3,677

 
0.93
%
 
$
1,294,187

 
$
2,812

 
0.86
%
 
$
784,778

 
1,600

 
0.81
%
Advances from FHLB
 
74,589

 
213

 
1.13

 
53,222

 
160

 
1.19

 
38,328

 
58

 
0.60

Other borrowings
 
25,398

 
257

 
4.01

 
13,793

 
178

 
5.12

 
8,078

 
103

 
5.07

Total interest-bearing liabilities
 
1,671,560

 
4,147

 
0.98

 
1,361,202

 
3,150

 
0.92

 
831,184

 
1,761

 
0.84

Noninterest-bearing liabilities:
 
 
 
 
 
 

 
 

 
 

 
 

 
 
 
 
 
 

Noninterest-bearing deposits(4)
 
542,918

 
 
 
 

 
452,426

 
 

 
 

 
315,988

 
 
 
 

Other liabilities(4)
 
13,819

 
 
 
 

 
6,898

 
 

 
 

 
3,153

 
 
 
 

Total noninterest-bearing liabilities
 
556,737

 
 
 
 

 
459,324

 
 

 
 

 
319,141

 
 
 
 

Stockholders’ equity
 
464,625

 
 
 
 

 
377,984

 
 

 
 

 
156,559

 
 
 
 

Total liabilities and stockholders’ equity
 
$
2,692,922

 
 
 
 

 
$
2,198,510

 
 

 
 

 
$
1,306,884

 
 
 
 

Net interest rate spread(2)
 
 
 
 
 
3.94
%
 
 

 
 

 
3.49
%
 
 
 
 
 
3.18
%
Net interest income
 
 
 
$
25,750

 
 

 
 

 
$
19,129

 
 

 
 
 
$
10,520

 
 

Net interest margin(3)
 
 
 
 
 
4.24
%
 
 

 
 

 
3.78
%
 
 
 
 
 
3.44
%
___________________________
(1)
Includes average outstanding balances of loans held for sale of $3,155, $1,553, and $5,517 for three months ended December 31, 2017, September 30, 2017, and December 31, 2016, respectively.

(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.
(4)
Includes average outstanding balances of branch assets and liabilities held for sale in total loans, noninterest-bearing assets, interest-bearing deposits, noninterest-bearing deposits and other liabilities.




13



VERITEX HOLDINGS, INC. AND SUBSIDIARY
Net Interest Margin - (Unaudited)
(In thousands, except percentages)

 
 
For the Year Ended December 31,
 
 
2017
 
2016
 
 
Average
Outstanding
Balance
 
Interest
Earned/
Interest
Paid
 
Average
Yield/
Rate
 
Average
Outstanding
Balance
 
Interest
Earned/
Interest
Paid
 
Average
Yield/
Rate
Assets
 
 

 
 

 
 

 
 

 
 

 
 

Interest-earning assets:
 
 

 
 

 
 

 
 

 
 

 
 

Total loans(1)(2)
 
$
1,441,295

 
$
73,795

 
5.12
%
 
$
924,465

 
$
44,681

 
4.83
%
Securities available for sale
 
170,253

 
3,462

 
2.03
%
 
84,558

 
1,409

 
1.67
%
Interest-earning deposits in financial institutions
 
202,314

 
2,287

 
1.13
%
 
93,199

 
503

 
0.54
%
Investment in subsidiary
 
202

 
8

 
3.96
%
 
93

 
2

 
2.15
%
Total interest-earning assets
 
1,814,064

 
79,552

 
4.39
%
 
1,102,315

 
46,595

 
4.23
%
Allowance for loan losses
 
(9,567
)
 
 
 
 
 
(7,743
)
 
 
 
 
Noninterest-earning assets(2)
 
176,883

 
 
 
 
 
94,199

 
 
 
 
Total assets
 
$
1,981,380

 
 
 
 
 
$
1,188,771

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits(2)
 
$
1,151,033

 
9,878

 
0.86
%
 
$
688,978

 
4,988

 
0.72
%
Advances from FHLB
 
51,196

 
531

 
1.04
%
 
43,649

 
260

 
0.60
%
Other borrowings
 
13,878

 
635

 
4.58
%
 
8,077

 
392

 
4.85
%
Total interest-bearing liabilities
 
1,216,107

 
11,044

 
0.91
%
 
740,704

 
5,640

 
0.76
%
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits(2)
 
425,124

 
 
 
 
 
302,548

 
 
 
 
Other liabilities(2)
 
6,802

 
 
 
 
 
2,937

 
 
 
 
Total noninterest-bearing liabilities
 
431,926

 
 
 
 
 
305,485

 
 
 
 
Stockholders’ equity
 
333,347

 
 
 
 
 
142,582

 
 
 
 
Total liabilities and stockholders’ equity
 
$
1,981,380

 
 
 
 
 
$
1,188,771

 
 
 
 
Net interest rate spread
 
 
 
 
 
3.48
%
 
 
 
 
 
3.47
%
Net interest income
 
 
 
$
68,508

 
 
 
 
 
$
40,955

 
 
Net interest margin
 
 
 
 
 
3.78
%
 
 
 
 
 
3.72
%
___________________________
(1)
Includes average outstanding balances of loans held for sale of $2,493 and $5,078 for the twelve months ended December 31, 2017 and 2016, respectively.

(2)
Includes average outstanding balances of branch assets and liabilities held for sale in total loans, noninterest-bearing assets, interest-bearing deposits, noninterest-bearing deposits and other liabilities.






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