DALLAS, July 23, 2024 (GLOBE NEWSWIRE) -- 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 June 30, 2024. "We are pleased with the second quarter results, highlighted by improved credit quality, stabilized NIM and continued repositioning of our balance sheet," said C. Malcolm Holland, III, the Company's Chairman and Chief Executive Officer. "Our LDR, excluding mortgage warehouse, dropped below 86%, we built capital and continue to execute on our strategic plan."     Quarter to Date   Year to Date Financial Highlights   Q2 2024   Q1 2024   Q2 2024   Q2 2023     (Dollars in thousands, except per share data)(unaudited) GAAP                 Net income   $ 27,202     $ 24,156     $ 51,358     $ 72,141   Diluted EPS     0.50       0.44       0.94       1.32   Book value per common share     28.49       28.23       28.49       27.48   Return on average assets1     0.87 %     0.79 %     0.83 %     1.18 % Return on average equity1     7.10       6.33       6.72       9.74   Net interest margin     3.29       3.24       3.27       3.60   Efficiency ratio     59.11       62.45       60.72       49.17   Non-GAAP2                 Operating earnings   $ 28,310     $ 29,137     $ 57,447     $ 77,947   Diluted operating EPS     0.52       0.53       1.05       1.43   Tangible book value per common share     20.62       20.33       20.62       19.41   Pre-tax, pre-provision operating earnings     44,420       43,656       88,076       124,981   Pre-tax, pre-provision operating return on average assets1     1.42 %     1.42 %     1.42 %     2.05 % Pre-tax, pre-provision operating return on average loans1     1.83       1.84       1.83       2.63   Operating return on average assets1     0.91       0.95       0.93       1.28   Return on average tangible common equity1     10.54       9.52       10.03       14.55   Operating return on average tangible common equity1     10.94       11.34       11.14       15.66   Operating efficiency ratio     58.41       58.73       58.57       47.21   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 Second Quarter Financial, Credit and Company Highlights Pre-tax, pre-provision operating return on average assets was 1.42% as of June 30, 2024; Nonperforming assets ("NPAs") decreased 17 bps from the prior quarter to 0.65% of total assets; Net interest margin ("NIM") increased to 3.29%, a 5 bps improvement from the prior quarter; Common equity tier 1 capital grew 12 bps from the prior quarter to 10.49%; Total deposits grew $71.0 million, or 2.67% annualized, compared to March 31, 2024; Total loans grew $70.3 million, or 2.88% annualized, compared to March 31, 2024; Loan to deposit ratio, excluding mortgage warehouse loans, decreased to 85.9% as of June 30, 2024 compared to 86.9% as of March 31, 2024 and 100.4% as of June 30, 2023; Tangible book value per common share increased to $20.62; Allowance for credit losses ("ACL") to total loans held for investment ("LHI") increased to 1.16%, compared to 1.15% as of March 31, 2024 and 1.05% as of June 30, 2023; Named one of the "Best Companies to Work For", "Best in Banking" and "Best Companies in the South" by the 2024 - 2025 U.S. News & World Report which evaluates companies based on quality of pay, work/life balance, and opportunities for professional development and advancement; and Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on August 23, 2024. Results of Operations for the Three Months Ended June 30, 2024 Net Interest Income For the three months ended June 30, 2024, net interest income before provision for credit losses was $96.2 million and net interest margin was 3.29% compared to $92.8 million and 3.24%, respectively, for the three months ended March 31, 2024. The $3.4 million increase, or 3.7%, in net interest income before provision for credit losses was primarily due to a $5.0 million increase in interest income on loans driven by an increase in loan yields, a $1.7 million increase in interest income on debt securities and other investments and a $1.2 million decrease in interest expense on transaction and savings deposits. The increase in net interest income was partially offset by a $4.3 million increase in interest expense on certificates and other time deposits, during the three months ended June 30, 2024. NIM increased 5 bps compared to the three months ended March 31, 2024, primarily due to an increase in loan yields during the three months ended June 30, 2024, partially offset by an increase in rates on certificates and other time deposits. Compared to the three months ended June 30, 2023, net interest income before provision for credit losses for the three months ended June 30, 2024 decreased by $4.6 million, or 4.6%. The decrease was primarily due to a $16.7 million increase in interest expense on certificates and other time deposits and a $12.7 million increase in interest expense on transaction and savings deposits. The decrease was partially offset by a $16.1 million decrease in interest expense on advances from the Federal Home Loan Bank ("FHLB"), a $5.2 million increase in interest income on debt securities and a $3.3 million increase in interest income on loans driven by an increase in loan yields and average balances. NIM decreased 22 bps from 3.51% for the three months ended June 30, 2023. The decrease was primarily due to the increase in funding costs on deposits during the three months ended June 30, 2024, partially offset by an increase in loan yields and debt securities. Noninterest Income Noninterest income for the three months ended June 30, 2024 was $10.6 million, an increase of $3.9 million, or 58.8%, compared to the three months ended March 31, 2024. The increase was primarily due to a $6.3 million loss on sales of investment securities in the prior quarter as a result of a strategic restructuring, in which we sold $120.1 million of lower-yielding available for sale ("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, which occurred in March of 2024, with no corresponding transaction in the three months ended June 30, 2024. The increase was partially offset by a $1.3 million decrease in government guaranteed loan income, primarily driven by a decrease in the Company's SBA and USDA sales, a $746 thousand decrease in other income and a $303 thousand decrease in loan fees. Compared to the three months ended June 30, 2023, noninterest income for the three months ended June 30, 2024 decreased by $3.1 million, or 22.7%. The decrease was primarily due to a $2.8 million decrease in government guaranteed loan income, primarily driven by a decrease in the Company's USDA sales, a $657 thousand decrease in customer swap income and a $485 thousand decrease in equity method investment income. Additionally, the decrease was related to a $298 thousand decrease in service charges and fees on deposit accounts. The decrease was partially offset by a $687 thousand increase in loan fees and a $463 thousand increase in other income. Noninterest Expense Noninterest expense was $63.1 million for the three months ended June 30, 2024, compared to $62.1 million for the three months ended March 31, 2024, an increase of $1.0 million, or 1.7%. The increase was primarily due to a $1.4 million increase in other noninterest expense, a $430 thousand increase in marketing expenses and a $241 thousand increase in data processing and software expense. The increase is partially offset by a $575 thousand decrease in salaries and employee benefits and a decrease of $436 thousand in professional and regulatory fees driven by FDIC insurance assessment expense, which decreased $203 thousand compared to the three months ended March 31, 2024. Compared to the three months ended June 30, 2023, noninterest expense for the three months ended June 30, 2024 increased by $5.9 million, or 10.4%. The increase was primarily due to a $4.1 million increase in salaries and employee benefits and a $3.6 million increase in other noninterest expense. The increase was partially offset by a $1.3 million decrease in professional and regulatory fees driven by FDIC insurance assessment expense, which decreased $937 thousand compared to the three months ended June 30, 2023 and a $651 thousand decrease in marketing expense. Financial Condition Total LHI was $9.21 billion at June 30, 2024, a decrease of $40.5 million, or 1.7% annualized, compared to March 31, 2024. Total deposits were $10.72 billion at June 30, 2024, an increase of $71.0 million, or 2.7% annualized, compared to March 31, 2024. The increase was primarily the result of an increase of $257.8 million in certificates and other time deposits and an increase of $67.5 million in noninterest-bearing deposits. The increase was partially offset by a decrease of $13.6 million in correspondent money market account balances and a decrease of $240.7 million in interest-bearing transaction and savings deposits. Credit Quality NPAs totaled $83.0 million, or 0.65% of total assets, of which $58.8 million represents LHI and $24.3 million represents other real estate owned ("OREO") at June 30, 2024, compared to $103.8 million, or 0.82% of total assets, at March 31, 2024. The Company had net charge-offs of $6.9 million for the three months ended June 30, 2024. Annualized net charge-offs to average loans outstanding were 28 bps, of which 16 bps were acquired credits, for the three months ended June 30, 2024, compared to 22 bps and 48 bps for the three months ended March 31, 2024 and June 30, 2023, respectively. ACL as a percentage of LHI was 1.16%, 1.15% and 1.05% at June 30, 2024, March 31, 2024 and June 30, 2023, respectively. The Company recorded a provision for credit losses of $8.3 million, $7.5 million and $15.0 million for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively. The recorded provision for credit losses for the three months ended June 30, 2024, compared to the three months ended March 31, 2024, was primarily attributable to an increase in general reserves as a result of changes in economic factors. As the balance for unfunded commitments for the three months ended June 30, 2024 remained stable compared to the three months ended March 31, 2024, the Company recorded no benefit or provision for unfunded commitments for the three months ended June 30, 2024. The Company recorded a $1.5 million and a $1.1 million benefit for unfunded commitments for the three months ended March 31, 2024, and June 30, 2023, respectively. Income Tax Income tax expense for the three months ended June 30, 2024 totaled $8.2 million, an increase of $1.0 million, or 13.6%, compared to the three months ended March 31, 2024. The Company's effective tax rate was approximately 23.2% for the three months ended June 30, 2024. The increase was primarily due to an one-time tax expense of $527 thousand, which is excluded from operating earnings, and a net discrete tax expense of $410 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, July 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 August 23, 2024 to stockholders of record as of the close of business on August 9, 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 of the Company; 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, July 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/kp9m28ir 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/BIc18141b3387848439444d3060b38d779. 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 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 SUBSIDIARIESFinancial Highlights(Unaudited)     For the Quarter Ended   For the Six Months Ended     Jun 30, 2024   Mar 31, 2024   Dec 31, 2023   Sep 30, 2023   Jun 30, 2023   Jun 30, 2024   Jun 30, 2023     (Dollars and shares in thousands, except per share data) Per Share Data (Common Stock):                             Basic EPS   $ 0.50     $ 0.44     $ 0.06     $ 0.60     $ 0.62     $ 0.94     $ 1.33   Diluted EPS     0.50       0.44       0.06       0.60       0.62       0.94       1.32   Book value per common share     28.49       28.23       28.18       27.46       27.48       28.49       27.48   Tangible book value per common share1     20.62       20.33       20.21       19.44       19.41       20.62       19.41   Dividends paid per common share outstanding2     0.20       0.20       0.20       0.20       0.20       0.40       0.40                                 Common Stock Data:                             Shares outstanding at period end     54,350       54,496       54,338       54,305       54,261       54,350       54,261   Weighted average basic shares outstanding for the period     54,457       54,444       54,327       54,300       54,247       54,451       54,199   Weighted average diluted shares outstanding for the period     54,823       54,842       54,691       54,597       54,486       54,832       54,546                                 Summary of Credit Ratios:                             ACL to total LHI     1.16 %     1.15 %     1.14 %     1.14 %     1.05 %     1.16 %     1.05 % NPAs to total assets     0.65       0.82       0.77       0.65       0.55       0.65       0.55   NPAs to total loans and OREO     0.85       1.06       0.99       0.83       0.70       0.85       0.70   Net charge-offs to average loans outstanding4     0.28       0.22       0.40       0.08       0.48       0.25       0.26                                 Summary Performance Ratios:                             Return on average assets4     0.87 %     0.79 %     0.11 %     1.06 %     1.10 %     0.83 %     1.18 % Return on average equity4     7.10       6.33       0.92       8.58       8.96       6.72       9.74   Return on average tangible common equity1, 4     10.54       9.52       2.00       12.80       13.35       10.03       14.55   Efficiency ratio     59.11       62.45       77.49       54.49       49.94       60.72       49.17   Net interest margin     3.29       3.24       3.31       3.46       3.51       3.27       3.60                                 Selected Performance Metrics - Operating:                             Diluted operating EPS1   $ 0.52     $ 0.53     $ 0.58     $ 0.60     $ 0.64     $ 1.05     $ 1.43   Pre-tax, pre-provision operating return on average assets1, 4     1.42 %     1.42 %     1.54 %     1.61 %     1.90 %     1.42 %     2.05 % Pre-tax, pre-provision operating return on average loans1, 4     1.83       1.84       1.97       2.05       2.43       1.83       2.63   Operating return on average assets1,4     0.91       0.95       1.02       1.06       1.13       0.93       1.28   Operating return on average tangible common equity1,4     10.94       11.34       12.37       12.80       13.70       11.14       15.66   Operating efficiency ratio1     58.41       58.73       55.50       54.49       48.90       58.57       47.21                                 Veritex Holdings, Inc. Capital Ratios:                             Average stockholders' equity to average total assets     12.26 %     12.43 %     12.27 %     12.30 %     12.23 %     12.34 %     12.16 % Tangible common equity to tangible assets1     9.14       9.02       9.18       8.86       8.76       9.14       8.76   Tier 1 capital to average assets (leverage)     10.06       10.12       10.03       10.10       9.80       10.06       9.80   Common equity tier 1 capital     10.49       10.37       10.29       10.11       9.76       10.49       9.76   Tier 1 capital to risk-weighted assets     10.75       10.63       10.56       10.37       10.01       10.75       10.01   Total capital to risk-weighted assets     13.45       13.33       13.18       12.95       12.51       13.45       12.51   Risk weighted assets   $ 11,450,997     $ 11,407,446     $ 11,387,825     $ 11,617,229     $ 11,742,321     $ 11,450,997     $ 11,742,321   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 SUBSIDIARIESFinancial Highlights(In thousands)     Jun 30, 2024   Mar 31, 2024   Dec 31, 2023   Sep 30, 2023   Jun 30, 2023     (unaudited)   (unaudited)       (unaudited)   (unaudited) ASSETS                     Cash and cash equivalents   $ 651,837     $ 740,769     $ 629,063     $ 713,408     $ 663,921   Debt securities, net     1,349,354       1,344,930       1,257,042       1,060,629       1,144,020   Other investments     75,885       76,788       76,238       80,869       138,894                         Loans held for sale ("LHFS")     57,046       64,762       79,072       41,313       29,876   LHI, mortgage warehouse ("MW")     568,047       449,531       377,796       390,767       436,255   LHI, excluding MW     9,209,094       9,249,551       9,206,544       9,237,447       9,257,183   Total loans     9,834,187       9,763,844       9,663,412       9,669,527       9,723,314   ACL     (113,431 )     (112,032 )     (109,816 )     (109,831 )     (102,150 ) Bank-owned life insurance     84,233       85,359       84,833       84,867       84,375   Bank premises, furniture and equipment, net     105,222       105,299       105,727       106,118       105,986   Other real estate owned ("OREO")     24,256       18,445       —       —       —   Intangible assets, net of accumulated amortization     35,817       38,679       41,753       44,294       48,293   Goodwill     404,452       404,452       404,452       404,452       404,452   Other assets     232,518       241,863       241,633       291,998       259,263   Total assets   $ 12,684,330     $ 12,708,396     $ 12,394,337     $ 12,346,331     $ 12,470,368   LIABILITIES AND STOCKHOLDERS' EQUITY                     Deposits:                     Noninterest-bearing deposits   $ 2,416,727     $ 2,349,211     $ 2,218,036     $ 2,363,340     $ 2,234,109   Interest-bearing transaction and savings deposits     3,979,454       4,220,114       4,348,385       3,936,070       3,590,253   Certificates and other time deposits     3,744,596       3,486,805       3,191,737       3,403,427       2,928,949   Correspondent money market deposits     584,067       597,690       580,037       493,681       480,598   Total deposits     10,724,844       10,653,820       10,338,195       10,196,518       9,233,909   Accounts payable and other liabilities     180,585       186,027       195,036       229,116       190,900   Advances from FHLB     —       100,000       100,000       200,000       1,325,000   Subordinated debentures and subordinated notes     230,285       230,034       229,783       229,531       229,279   Total liabilities     11,135,714       11,169,881       10,863,014       10,855,165       10,979,088   Commitments and contingencies                     Stockholders' equity:                     Common stock     612       611       610       609       609   Additional paid-in capital     1,321,995       1,319,144       1,317,516       1,314,459       1,311,687   Retained earnings     473,801       457,499       444,242       451,513       429,753   Accumulated other comprehensive loss     (76,713 )     (71,157 )     (63,463 )     (107,833 )     (83,187 ) Treasury stock     (171,079 )     (167,582 )     (167,582 )     (167,582 )     (167,582 ) Total stockholders' equity     1,548,616       1,538,515       1,531,323       1,491,166       1,491,280   Total liabilities and stockholders' equity   $ 12,684,330     $ 12,708,396     $ 12,394,337     $ 12,346,331     $ 12,470,368   VERITEX HOLDINGS, INC. AND SUBSIDIARIESFinancial Highlights(In thousands, except per share data)     For the Quarter Ended   For the Six Months Ended     Jun 30, 2024   Mar 31, 2024   Dec 31, 2023   Sep 30, 2023   Jun 30, 2023   Jun 30, 2024   Jun 30, 2023     (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited) Interest income:                             Loans, including fees   $ 166,979   $ 161,942     $ 165,443     $ 167,368     $ 163,727     $ 328,921     $ 315,434   Debt securities     15,408     13,695       12,282       10,928       10,166       29,103       21,154   Deposits in financial institutions and Fed Funds sold     7,722     8,050       8,162       7,128       7,507       15,772       13,041   Equity securities and other investments     1,138     900       1,717       1,691       1,118       2,038       2,526   Total interest income     191,247     184,587       187,604       187,115       182,518       375,834       352,155   Interest expense:                             Transaction and savings deposits     45,619     46,784       46,225       39,936       32,957       92,403       62,814   Certificates and other time deposits     44,811     40,492       40,165       36,177       28,100       85,303       49,067   Advances from FHLB     1,468     1,391       2,581       8,523       17,562       2,859       29,920   Subordinated debentures and subordinated notes     3,113     3,114       3,100       3,118       3,068       6,227       6,134   Total interest expense     95,011     91,781       92,071       87,754       81,687       186,792       147,935   Net interest income     96,236     92,806       95,533       99,361       100,831       189,042       204,220   Provision for credit losses1     8,250     7,500       9,500       8,627       15,000       15,750       24,385   (Benefit) provision for unfunded commitments     —     (1,541 )     (1,500 )     (909 )     (1,129 )     (1,541 )     368   Net interest income after provisions     87,986     86,847       87,533       91,643       86,960       174,833       179,467   Noninterest income:                             Service charges and fees on deposit accounts     4,974     4,896       4,800       5,159       5,272       9,870       10,289   Loan fees     2,207