Veritex Holdings, Inc. Reports Third Quarter 2024 Operating Results

Rhea-AI Summary

Veritex Holdings announced its Q3 2024 results, highlighting significant financial metrics. GAAP net income was $31M, up from $27.2M in Q2 2024, but down from $104.8M in Q3 2023. Diluted EPS reached $0.56, an increase from $0.50 in Q2 2024. Book value per share grew to $29.53. Net interest margin slightly increased to 3.30%, while nonperforming assets decreased to 0.52% of total assets. Total deposits rose by $311.2M, or 11.60% annualized. Operating earnings were $32.2M, up from $28.3M in Q2 2024. However, noninterest expense increased by $7M, primarily due to higher salaries and benefits. The company declared a quarterly cash dividend of $0.20 per share, payable on November 22, 2024. Net interest income before provision for credit losses was $100.1M, up from $96.2M in Q2 2024. Noninterest income rose by $2.5M, driven by higher OREO income and loan fees. Despite these gains, efficiency ratio worsened to 61.94% from 59.11% in Q2 2024.

Positive

• GAAP net income increased to $31M from $27.2M in Q2 2024.
• Diluted EPS grew to $0.56 from $0.50 in the previous quarter.
• Book value per share increased to $29.53.
• Total deposits rose by $311.2M, or 11.60% annualized.
• Operating earnings were $32.2M, up from $28.3M in Q2 2024.
• Net interest income before provision for credit losses was $100.1M, up from $96.2M in Q2 2024.
• Noninterest income increased by $2.5M, driven by higher OREO income and loan fees.

Negative

• GAAP net income decreased from $104.8M in Q3 2023.
• Efficiency ratio worsened to 61.94% from 59.11% in Q2 2024.
• Noninterest expense increased by $7M, primarily due to higher salaries and benefits.

Insights

Financial Analyst

Veritex Holdings reported solid Q3 2024 results, with notable improvements in key metrics. Net income increased to $31 million, up 14% from Q2. The diluted EPS rose to $0.56 from $0.50. The company's focus on balance sheet transformation is evident in the 11.60% annualized growth in total deposits, reaching $11.04 billion.

Importantly, the bank's asset quality improved, with nonperforming assets decreasing to 0.52% of total assets, down 13 basis points from Q2. The allowance for credit losses increased to 1.21% of total loans, indicating prudent risk management.

The net interest margin expanded slightly to 3.30%, showing resilience in a challenging rate environment. The efficiency ratio increased to 61.94%, suggesting some pressure on cost management. However, the tangible book value per share grew to $21.72, reflecting ongoing value creation for shareholders.

Overall, Veritex's Q3 results demonstrate progress in its strategic initiatives, particularly in deposit growth and balance sheet strength, positioning the bank well for future challenges and opportunities.

Risk Management Expert

Veritex's Q3 2024 results reveal a strong focus on risk management and capital adequacy. The common equity tier 1 capital ratio improved by 37 basis points to 10.86%, significantly enhancing the bank's capital buffer against potential losses.

The reduction in the loan-to-deposit ratio to 81.9% (excluding mortgage warehouse loans) from 85.9% in Q2 and 90.7% a year ago indicates a more conservative lending approach and improved liquidity position. This shift aligns with regulatory preferences and reduces reliance on wholesale funding.

The increase in the allowance for credit losses to 1.21% of total loans, up from 1.16% in Q2, suggests proactive provisioning. The decrease in nonperforming assets to 0.52% of total assets is a positive sign, but continued vigilance is necessary given economic uncertainties.

The bank's emphasis on "growing granular, attractively priced deposits" and "managing concentrations" demonstrates a strategic approach to risk mitigation. However, the rise in the efficiency ratio warrants attention to ensure cost management doesn't impact risk oversight capabilities.

DALLAS, Oct. 22, 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 September 30, 2024.

“We are pleased to announce both our third quarter results and updates on our balance sheet transformation over the past 2 years,” said C. Malcolm Holland, III, the Company’s Chairman and Chief Executive Officer. “My team has remained focused on growing granular, attractively priced deposits, increasing capital, managing concentrations and reducing credit risk exposure all while continuing to grow a fortress balance sheet through full relationship banking. I could not be more proud of our team of nearly 900 employees who embraced the challenges we set forth back in 2022 and each day going forward.”

		Quarter to Date								Year to Date
Financial Highlights		Q3 2024				Q2 2024				Q3 2024				Q3 2023
		(Dollars in thousands, except per share data) (unaudited)
GAAP
Net income		$	31,001			$	27,202			$	82,359			$	104,762
Diluted EPS			0.56				0.50				1.50				1.92
Book value per common share			29.53				28.49				29.53				27.46
Return on average assets1			0.96	%			0.87	%			0.87	%			1.14	%
Return on average equity1			7.79				7.10				7.08				9.35
Net interest margin			3.30				3.29				3.28				3.55
Efficiency ratio			61.94				59.11				61.15				50.88
Non-GAAP2
Operating earnings		$	32,181			$	28,310			$	89,628			$	110,489
Diluted operating EPS			0.59				0.52				1.63				2.02
Tangible book value per common share			21.72				20.62				21.72				19.44
Pre-tax, pre-provision operating earnings			44,555				44,420				132,631				174,523
Pre-tax, pre-provision operating return on average assets1			1.38	%			1.42	%			1.41	%			1.90	%
Pre-tax, pre-provision operating return on average loans1			1.83				1.83				1.83				2.43
Operating return on average assets1			1.00				0.91				0.95				1.20
Return on average tangible common equity1			11.33				10.54				10.48				13.95
Operating return on average tangible common equity1			11.74				10.94				11.34				14.68
Operating efficiency ratio			60.63				58.41				59.28				49.53

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 Third Quarter Financial, Credit and Company Highlights

• Return on average assets (“ROAA”) increased 9 bps compared to June 30, 2024;
• 7.2% linked quarter revenue growth;
• Nonperforming assets (“NPAs”) decreased 13 bps from the prior quarter to 0.52% of total assets;
• Total deposits grew $311.2 million, or 11.60% annualized, compared to June 30, 2024;
• Common equity tier 1 capital grew 37 bps from the prior quarter to 10.86%;
• Net interest margin (“NIM”) expanded to 3.30%;
• Loan to deposit ratio, excluding mortgage warehouse loans, decreased to 81.9% as of September 30, 2024, compared to 85.9% as of June 30, 2024 and 90.7% as of September 30, 2023;
• Tangible book value per common share increased to $21.72;
• Allowance for credit losses (“ACL”) to total loans held for investment (“LHI”) increased to 1.21%, compared to 1.16% as of June 30, 2024 and 1.14% as of September 30, 2023; and
• Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on November 22, 2024.

Results of Operations for the Three Months Ended September 30, 2024

Net Interest Income

For the three months ended September 30, 2024, net interest income before provision for credit losses was $100.1 million and NIM was 3.30% compared to $96.2 million and 3.29%, respectively, for the three months ended June 30, 2024. The approximately $3.8 million increase, or 4.0%, in net interest income before provision for credit losses was primarily due to a $4.8 million increase in interest income on deposits in financial institutions and fed funds sold, a $1.4 million decrease in interest expense on advances from the Federal Home Loan Bank (“FHLB”), a $422 thousand increase in interest income on debt securities and a $282 thousand increase in interest income on loans. The increase was partially offset by a $1.6 million increase in interest expense on transactions and savings deposits and a $1.4 million increase in interest expense on certificates and other time deposits, during the three months ended September 30, 2024. NIM increased 1 basis point compared to the three months ended June 30, 2024, primarily due to a decrease in funding costs on deposits during the three months ended September 30, 2024, partially offset by a decrease in loan yields and average balances.

Compared to the three months ended September 30, 2023, net interest income before provision for credit losses for the three months ended September 30, 2024 increased by $701 thousand, or 0.7%. The increase was primarily due to a $8.5 million decrease in interest expense on advances from the FHLB, a $5.4 million increase in interest income on deposits in financial institutions and fed funds sold and a $4.9 million increase in interest income on debt securities. The increase was partially offset by a $10.1 million increase in interest expense on certificates and other time deposits, a $7.3 million increase in interest expense on transaction and savings deposits and a $690 thousand decrease in interest income on equity securities and other investments. Compared to the three months ended September 30, 2023, NIM decreased 16 bps from 3.46% for the three months ended September 30, 2024. The decrease was primarily due to the increase in funding costs on deposits during the three months ended September 30, 2024, partially offset by an increase in loan yields and an increase in average balances and yields on debt securities.

Noninterest Income

Noninterest income for the three months ended September 30, 2024 was $13.1 million, an increase of $2.5 million, or 23.9%, compared to the three months ended June 30, 2024. The increase was primarily due to a $1.6 million increase in other income, driven by a $1.2 million increase in other real estate owned (“OREO”) income, a $1.1 million increase in loan fees and a $468 thousand increase in service charges and fees on deposits for the three months ended September 30, 2024. The increase was partially offset by a $540 thousand decrease in government guaranteed loan income.

Compared to the three months ended September 30, 2023, noninterest income for the three months ended September 30, 2024 increased by $3.4 million, or 35.5%. The increase was primarily due to a $2.2 million increase in other income, driven by a $1.2 million increase in OREO income, a $1.7 million increase in loan fees and a $283 thousand increase in service charges and fees on deposit accounts. The increase was partially offset by a $1.0 million decrease in government guaranteed loan income, primarily driven by a decrease in the Company’s USDA sales.

Noninterest Expense

Noninterest expense was $70.1 million for the three months ended September 30, 2024, compared to $63.1 million for the three months ended June 30, 2024, an increase of $7.0 million, or 11.0%. The increase was primarily due to a $4.6 million increase in salaries and employee benefits primarily due to an increase in incentive accruals to 80% of target payout, a $1.9 million increase in other noninterest expense primarily driven by OREO expenses, a $805 thousand increase in marketing expenses and a $204 thousand increase in occupancy and equipment expense. The increase is partially offset by a decrease of $714 thousand in professional and regulatory fees compared to the three months ended June 30, 2024.

Compared to the three months ended September 30, 2023, noninterest expense for the three months ended September 30, 2024 increased by $10.7 million, or 18.0%. The increase was primarily due to a $6.4 million increase in salaries and employee benefits primarily due to the increase in incentive accruals aforementioned, a $5.6 million increase in other noninterest expense, a $727 thousand increase data processing and software expense, and a $428 thousand increase in marketing expenses. The increase was partially offset by a $2.4 million decrease in professional and regulatory fees compared to the three months ended September 30, 2023.

Financial Condition

Total LHI was $9.03 billion at September 30, 2024, a decrease of $180.5 million compared to June 30, 2024.

Total deposits were $11.04 billion at September 30, 2024, an increase of $311.2 million, or 11.6% linked quarter annualized. The increase was primarily the result of an increase of $227.2 million in noninterest bearing deposits and an increase of $225.3 million in interest-bearing transaction and savings deposits. The increase was partially offset by a decrease of $118.7 million in certificates and other time deposits and a decrease of $22.6 million in correspondent money market accounts.

Credit Quality

NPAs totaled $67.3 million, or 0.52% of total assets, of which $58.3 million represents LHI and $9.0 million represents OREO at September 30, 2024, compared to $83.0 million, or 0.65% of total assets, at June 30, 2024. The Company had net charge-offs of $269 thousand for the three months ended September 30, 2024. Annualized net charge-offs to average loans outstanding were 1bp, for the three months ended September 30, 2024, compared to 28 bps and 8 bps for the three months ended June 30, 2024 and September 30, 2023, respectively.

ACL as a percentage of LHI was 1.21%, 1.16% and 1.14% at September 30, 2024, June 30, 2024 and September 30, 2023, respectively. The Company recorded a provision for credit losses of $4.0 million, $8.3 million and $8.6 million for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively. The recorded provision for credit losses for the three months ended September 30, 2024, compared to the three months ended June 30, 2024, was primarily attributable to an increase in general reserves as a result of changes in economic factors which now represents 97% of the total ACL as a percentage of LHI. The balance for unfunded commitments for the three months ended September 30, 2024 remained relatively stable compared to the three months ended June 30, 2024 and recorded no benefit or provision for unfunded commitments for the three months ended September 30, 2024. The Company recorded no benefit or provision for unfunded commitments for the three months ended June 30, 2024 and a $909 thousand benefit for unfunded commitments for the three months ended September 30, 2023.

Income Tax

Income tax expense for the three months ended September 30, 2024 totaled $8.1 million, a decrease of $154 thousand, or 1.9%, compared to the three months ended June 30, 2024. The Company’s effective tax rate was approximately 20.6% for the three months ended September 30, 2024. The decrease was primarily due a $941 thousand change in the Company’s valuation allowance slightly offset by a return to provision of $224 thousand and a net discrete tax expense of $501 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, October 22, 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 November 22, 2024 to stockholders of record as of the close of business on November 8, 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, October 23, 2024, at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting http://edge.media-server.com/mmc/p/99msavdf 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/BI8a41df4f3f824d2888f9cf9a3e02c9b8. 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.

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)
		For the Quarter Ended																				For the Nine Months Ended
		Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Sep 30, 2024				Sep 30, 2023
		(Dollars and shares in thousands, except per share data)
Per Share Data (Common Stock):
Basic EPS		$	0.57			$	0.50			$	0.44			$	0.06			$	0.60			$	1.51			$	1.93
Diluted EPS			0.56				0.50				0.44				0.06				0.60				1.50				1.92
Book value per common share			29.53				28.49				28.23				28.18				27.46				29.53				27.46
Tangible book value per common share1			21.72				20.62				20.33				20.21				19.44				21.72				19.44
Dividends paid per common share outstanding2			0.20				0.20				0.20				0.20				0.20				0.60				0.60
Common Stock Data:
Shares outstanding at period end			54,446				54,350				54,496				54,338				54,305				54,446				54,305
Weighted average basic shares outstanding for the period			54,409				54,457				54,444				54,327				54,300				54,437				54,233
Weighted average diluted shares outstanding for the period			54,932				54,823				54,842				54,691				54,597				54,866				54,563
Summary of Credit Ratios:
ACL to total LHI			1.21	%			1.16	%			1.15	%			1.14	%			1.14	%			1.21	%			1.14	%
NPAs to total assets			0.52				0.65				0.82				0.77				0.65				0.52				0.65
NPAs to total loans and OREO			0.70				0.85				1.06				0.99				0.83				0.70				0.83
Net charge-offs to average loans outstanding3			0.01				0.28				0.22				0.39				0.08				0.17				0.20
Summary Performance Ratios:
Return on average assets3			0.96	%			0.87	%			0.79	%			0.11	%			1.06	%			0.87	%			1.14	%
Return on average equity3			7.79				7.10				6.33				0.92				8.58				7.08				9.35
Return on average tangible common equity1,3			11.33				10.54				9.52				2.00				12.80				10.48				13.95
Efficiency ratio			61.94				59.11				62.45				77.49				54.49				61.15				50.88
Net interest margin			3.30				3.29				3.24				3.31				3.46				3.28				3.55
Selected Performance Metrics - Operating:
Diluted operating EPS1		$	0.59			$	0.52			$	0.53			$	0.58			$	0.60			$	1.63			$	2.02
Pre-tax, pre-provision operating return on average assets1,3			1.38	%			1.42	%			1.42	%			1.54	%			1.61	%			1.41	%			1.90	%
Pre-tax, pre-provision operating return on average loans1,3			1.83				1.83				1.84				1.97				2.05				1.83				2.43
Operating return on average assets1,3			1.00				0.91				0.95				1.02				1.06				0.95				1.20
Operating return on average tangible common equity1,3			11.74				10.94				11.34				12.37				12.80				11.34				14.68
Operating efficiency ratio1			60.63				58.41				58.73				55.50				54.49				59.28				49.53
Veritex Holdings, Inc. Capital Ratios:
Average stockholders' equity to average total assets			12.31	%			12.26	%			12.43	%			12.27	%			12.30	%			12.33	%			12.21	%
Tangible common equity to tangible assets1			9.37				9.14				9.02				9.18				8.86				9.37				8.86
Tier 1 capital to average assets (leverage)			10.06				10.06				10.12				10.03				10.10				10.06				10.10
Common equity tier 1 capital			10.86				10.49				10.37				10.29				10.11				10.86				10.11
Tier 1 capital to risk-weighted assets			11.13				10.75				10.63				10.56				10.37				11.13				10.37
Total capital to risk-weighted assets			13.91				13.45				13.33				13.18				12.95				13.91				12.95
Risk weighted assets		$	11,290,800			$	11,450,997			$	11,407,446			$	11,387,825			$	11,617,229			$	11,290,800			$	11,617,229

¹ Refer 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.
² Dividend amount represents dividend paid per common share subsequent to each respective quarter end.
³ Annualized ratio for quarterly metrics.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (In thousands)
		Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023
		(unaudited)				(unaudited)				(unaudited)								(unaudited)
ASSETS
Cash and cash equivalents		$	1,100,790			$	651,837			$	740,769			$	629,063			$	713,408
Debt securities, net			1,423,610				1,349,354				1,344,930				1,257,042				1,060,629
Other investments			71,257				75,885				76,788				76,238				80,869
Loans held for sale (“LHFS”)			48,496				57,046				64,762				79,072				41,313
LHI, mortgage warehouse (“MW”)			630,650				568,047				449,531				377,796				390,767
LHI, excluding MW			9,028,575				9,209,094				9,249,551				9,206,544				9,237,447
Total loans			9,707,721				9,834,187				9,763,844				9,663,412				9,669,527
ACL			(117,162	)			(113,431	)			(112,032	)			(109,816	)			(109,831	)
Bank-owned life insurance			84,776				84,233				85,359				84,833				84,867
Bank premises, furniture and equipment, net			114,202				105,222				105,299				105,727				106,118
Other real estate owned (“OREO”)			9,034				24,256				18,445				—				—
Intangible assets, net of accumulated amortization			32,825				35,817				38,679				41,753				44,294
Goodwill			404,452				404,452				404,452				404,452				404,452
Other assets			211,471				232,518				241,863				241,633				291,998
Total assets		$	13,042,976			$	12,684,330			$	12,708,396			$	12,394,337			$	12,346,331
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing deposits		$	2,643,894			$	2,416,727			$	2,349,211			$	2,218,036			$	2,363,340
Interest-bearing transaction and savings deposits			4,204,708				3,979,454				4,220,114				4,348,385				3,936,070
Certificates and other time deposits			3,625,920				3,744,596				3,486,805				3,191,737				3,403,427
Correspondent money market deposits			561,489				584,067				597,690				580,037				493,681
Total deposits			11,036,011				10,724,844				10,653,820				10,338,195				10,196,518
Accounts payable and other liabilities			168,415				180,585				186,027				195,036				229,116
Advances from FHLB			—				—				100,000				100,000				200,000
Subordinated debentures and subordinated notes			230,536				230,285				230,034				229,783				229,531
Total liabilities			11,434,962				11,135,714				11,169,881				10,863,014				10,855,165
Commitments and contingencies
Stockholders’ equity:
Common stock			613				612				611				610				609
Additional paid-in capital			1,324,929				1,321,995				1,319,144				1,317,516				1,314,459
Retained earnings			493,921				473,801				457,499				444,242				451,513
Accumulated other comprehensive loss			(40,330	)			(76,713	)			(71,157	)			(63,463	)			(107,833	)
Treasury stock			(171,119	)			(171,079	)			(167,582	)			(167,582	)			(167,582	)
Total stockholders’ equity			1,608,014				1,548,616				1,538,515				1,531,323				1,491,166
Total liabilities and stockholders’ equity		$	13,042,976			$	12,684,330			$	12,708,396			$	12,394,337			$	12,346,331

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (In thousands, except per share data)
		For the Quarter Ended																		For the Nine Months Ended
		Sep 30, 2024			Jun 30, 2024			Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Sep 30, 2024				Sep 30, 2023
		(unaudited)			(unaudited)			(unaudited)				(unaudited)				(unaudited)				(unaudited)				(unaudited)
Interest income:
Loans, including fees		$	167,261		$	166,979		$	161,942			$	165,443			$	167,368			$	496,182			$	482,802
Debt securities			15,830			15,408			13,695				12,282				10,928				44,933				32,082
Deposits in financial institutions and Fed Funds sold			12,571			7,722			8,050				8,162				7,128				28,343				20,169
Equity securities and other investments			1,001			1,138			900				1,717				1,691				3,039				4,217
Total interest income			196,663			191,247			184,587				187,604				187,115				572,497				539,270
Interest expense:
Transaction and savings deposits			47,208			45,619			46,784				46,225				39,936				139,611				102,750
Certificates and other time deposits			46,230			44,811			40,492				40,165				36,177				131,533				85,244
Advances from FHLB			47			1,468			1,391				2,581				8,523				2,906				38,443
Subordinated debentures and subordinated notes			3,116			3,113			3,114				3,100				3,118				9,343				9,252
Total interest expense			96,601			95,011			91,781				92,071				87,754				283,393				235,689
Net interest income			100,062			96,236			92,806				95,533				99,361				289,104				303,581
Provision for credit losses			4,000			8,250			7,500				9,500				8,627				19,750				33,012
(Benefit) provision for unfunded commitments			—			—			(1,541	)			(1,500	)			(909	)			(1,541	)			(541	)
Net interest income after provisions			96,062			87,986			86,847				87,533				91,643				270,895				271,110
Noninterest income:
Service charges and fees on deposit accounts			5,442			4,974			4,896				4,800				5,159				15,312				15,448
Loan fees			3,278			2,207			2,510				1,200				1,564				7,995				5,148
Loss on sales of debt securities			—			—			(6,304	)			—				—				(6,304	)			(5,321	)
Government guaranteed loan income, net			780			1,320			2,614				4,378				1,772				4,714				15,604
Equity method investment (loss) income			—			—			—				(29,417	)			(136	)			—				(1,172	)
Customer swap income			271			326			449				258				202				1,046				1,380
Other income			3,335			1,751			2,497				989				1,113				7,583				5,810
Total noninterest income (loss)			13,106			10,578			6,662				(17,792	)			9,674				30,346				36,897
Noninterest expense:
Salaries and employee benefits			37,370			32,790			33,365				30,606				30,949				103,525				91,464
Occupancy and equipment			4,789			4,585			4,677				4,670				4,881				14,051				14,681
Professional and regulatory fees			4,903			5,617			6,053				7,626				7,283				16,573				18,540
Data processing and software expense			5,268			5,097			4,856				4,569				4,541				15,221				13,970
Marketing			2,781			1,976			1,546				1,945				2,353				6,303				6,759
Amortization of intangibles			2,438			2,438			2,438				2,438				2,438				7,314				7,401
Telephone and communications			335			365			261				356				362				961				1,195
Other			12,216			10,273			8,920				8,028				6,607				31,409				19,216
Total noninterest expense			70,100			63,141			62,116				60,238				59,414				195,357				173,226
Income before income tax expense			39,068			35,423			31,393				9,503				41,903				105,884				134,781
Income tax expense			8,067			8,221			7,237				6,004				9,282				23,525				30,019
Net income		$	31,001		$	27,202		$	24,156			$	3,499			$	32,621			$	82,359			$	104,762
Basic EPS		$	0.57		$	0.50		$	0.44			$	0.06			$	0.60			$	1.51			$	1.93
Diluted EPS		$	0.56		$	0.50		$	0.44			$	0.06			$	0.60			$	1.50			$	1.92
Weighted average basic shares outstanding			54,409			54,457			54,444				54,327				54,300				54,437				54,233
Weighted average diluted shares outstanding			54,932			54,823			54,842				54,691				54,597				54,866				54,563

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (Unaudited)
		For the Quarter Ended
		September 30, 2024										June 30, 2024										September 30, 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		$	9,184,182			$	159,163		6.89	%		$	9,344,482			$	160,323		6.90	%		$	9,267,366			$	161,615		6.92	%
LHI, MW			477,592				8,098		6.75				420,946				6,656		6.36				357,639				5,753		6.38
Debt securities			1,384,835				15,830		4.55				1,352,293				15,408		4.58				1,121,716				10,928		3.87
Interest-bearing deposits in other banks			924,685				12,571		5.41				560,586				7,722		5.54				520,785				7,128		5.43
Equity securities and other investments			75,884				1,001		5.25				78,964				1,138		5.80				135,714				1,691		4.94
Total interest-earning assets			12,047,178				196,663		6.49				11,757,271				191,247		6.54				11,403,220				187,115		6.51
ACL			(115,510	)									(115,978	)									(105,320	)
Noninterest-earning assets			930,250										937,413										961,162
Total assets		$	12,861,918									$	12,578,706									$	12,259,062
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits		$	4,700,196			$	47,208		4.00	%		$	4,570,329			$	45,619		4.01	%		$	4,168,876			$	39,936		3.80	%
Certificates and other time deposits			3,678,718				46,230		5.00				3,591,035				44,811		5.02				3,151,704				36,177		4.55
Advances from FHLB and Other			3,261				47		5.73				106,648				1,468		5.54				725,543				8,523		4.66
Subordinated debentures and subordinated notes			230,393				3,116		5.38				230,141				3,113		5.44				229,389				3,118		5.39
Total interest-bearing liabilities			8,612,568				96,601		4.46				8,498,153				95,011		4.50				8,275,512				87,754		4.21
Noninterest-bearing liabilities:
Noninterest-bearing deposits			2,486,676										2,346,908										2,272,207
Other liabilities			179,273										192,036										203,173
Total liabilities			11,278,517										11,037,097										10,750,892
Stockholders’ equity			1,583,401										1,541,609										1,508,170
Total liabilities and stockholders’ equity		$	12,861,918									$	12,578,706									$	12,259,062
Net interest rate spread2									2.03	%									2.04	%									2.30	%
Net interest income and margin3						$	100,062		3.30	%						$	96,236		3.29	%						$	99,361		3.46	%

¹ Includes average outstanding balances of LHFS of $54.3 million, $58.5 million and $28.3 million for the quarters ended September 30, 2024, June 30, 2024, and September 30, 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 (In thousands, except percentages)
		For the Nine Months Ended
		September 30, 2024										September 30, 2023
		Average Outstanding Balance				Interest Earned/ Interest Paid			Average Yield/ Rate			Average Outstanding Balance				Interest Earned/ Interest Paid			Average Yield/ Rate
Assets
Interest-earning assets:
Loans1		$	9,270,510			$	477,071		6.87	%		$	9,231,814			$	467,101		6.76	%
LHI, MW			393,008				19,111		6.50				363,182				15,701		5.78
Debt securities			1,344,190				44,933		4.47				1,168,860				32,082		3.67
Interest-bearing deposits in other banks			692,434				28,343		5.47				527,805				20,169		5.11
Equity securities and other investments			77,035				3,039		5.27				132,895				4,217		4.24
Total interest-earning assets			11,777,177				572,497		6.49				11,424,556				539,270		6.31
ACL			(114,576	)									(100,228	)
Noninterest-earning assets			930,605										950,369
Total assets		$	12,593,206									$	12,274,697
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits		$	4,636,889			$	139,611		4.02	%		$	4,079,436			$	102,750		3.37	%
Certificates and other time deposits			3,518,417				131,533		4.99				2,873,388				85,244		3.97
Advances from FHLB and Other			70,055				2,906		5.54				1,105,592				38,443		4.65
Subordinated debentures and subordinated notes			230,139				9,343		5.42				229,923				9,252		5.38
Total interest-bearing liabilities			8,455,500				283,393		4.48				8,288,339				235,689		3.80
Noninterest-bearing liabilities:
Noninterest-bearing deposits			2,396,629										2,305,745
Other liabilities			188,007										182,040
Total liabilities			11,040,136										10,776,124
Stockholders’ equity			1,553,070										1,498,573
Total liabilities and stockholders’ equity		$	12,593,206									$	12,274,697
Net interest rate spread2									2.01	%									2.51	%
Net interest income and margin3						$	289,104		3.28	%						$	303,581		3.55	%

¹ Includes average outstanding balances of LHFS of $55.5 million and $23.8 million for the nine months ended September 30, 2024 and 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
		Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023
Average yield on interest-earning assets:
Loans1			6.89	%			6.90	%			6.83	%			6.88	%			6.92	%
LHI, MW			6.75				6.36				6.27				5.82				6.38
Total Loans			6.89				6.88				6.81				6.85				6.90
Debt securities			4.55				4.58				4.25				4.10				3.87
Interest-bearing deposits in other banks			5.41				5.54				5.54				5.51				5.43
Equity securities and other investments			5.25				5.80				4.75				8.28				4.94
Total interest-earning assets			6.49	%			6.54	%			6.44	%			6.51	%			6.51	%
Average rate on interest-bearing liabilities:
Interest-bearing demand and savings deposits			4.00	%			4.01	%			4.06	%			4.03	%			3.80	%
Certificates and other time deposits			5.00				5.02				4.96				4.85				4.55
Advances from FHLB			5.73				5.54				5.54				5.60				4.66
Subordinated debentures and subordinated notes			5.38				5.44				5.45				5.36				5.39
Total interest-bearing liabilities			4.46	%			4.50	%			4.47	%			4.43	%			4.21	%
Net interest rate spread2			2.03	%			2.04	%			1.97	%			2.08	%			2.30	%
Net interest margin3			3.30	%			3.29	%			3.24	%			3.31	%			3.46	%

¹Includes average outstanding balances of LHFS of $54.3 million, $58.5 million, $53.9 million, $31.2 million and $28.3 million for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 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															For the Nine Months Ended
		Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
Average cost of interest-bearing deposits		4.44	%		4.46	%		4.43	%		4.38	%		4.12	%		4.44	%		3.62	%
Average costs of total deposits, including noninterest-bearing		3.42			3.46			3.42			3.37			3.15			3.43			2.03

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (Unaudited)
LHI and Deposit Portfolio Composition
		Sep 30, 2024							Jun 30, 2024							Mar 31, 2024							Dec 31, 2023							Sep 30, 2023
		(Dollars in thousands)
LHI1
Commercial and Industrial (“C&I”)		$	2,728,544			30.2	%		$	2,798,260			30.4	%		$	2,785,987			30.1	%		$	2,752,063			29.9	%		$	2,841,024			30.7	%
Real Estate:
Owner occupied commercial (“OOCRE”)			807,223			8.9				806,285			8.7				788,376			8.5				794,088			8.6				697,299			7.5
Non-owner occupied commercial (“NOOCRE”)			2,338,094			25.9				2,369,848			25.7				2,352,993			25.5				2,350,725			25.5				2,398,060			26.1
Construction and land			1,436,540			15.8				1,536,580			16.7				1,568,257			16.9				1,734,254			18.8				1,705,053			18.4
Farmland			32,254			0.4				30,512			0.3				30,979			0.3				31,114			0.3				59,684			0.6
1-4 family residential			944,755			10.5				917,402			10.0				969,401			10.5				937,119			10.2				933,225			10.1
Multi-family residential			738,090			8.2				748,740			8.1				751,607			8.1				605,817			6.6				603,395			6.5
Consumer			11,292			0.1				9,245			0.1				8,882			0.1				10,149			0.1				9,845			0.1
Total LHI		$	9,036,792			100	%		$	9,216,872			100	%		$	9,256,482			100	%		$	9,215,329			100	%		$	9,247,585			100	%
MW			630,650							568,047							449,531							377,796							390,767
Total LHI1		$	9,667,442						$	9,784,919						$	9,706,013						$	9,593,125						$	9,638,352
Total LHFS			48,496							57,046							64,762							79,072							41,313
Total Loans		$	9,715,938						$	9,841,965						$	9,770,775						$	9,672,197						$	9,679,665
Deposits
Noninterest-bearing		$	2,643,894			24.0	%		$	2,416,727			22.5	%		$	2,349,211			22.1	%		$	2,218,036			21.5	%		$	2,363,340			23.2	%
Interest-bearing transaction			421,059			3.8				523,272			4.9				724,171			6.8				927,193			8.9				739,098			7.2
Money market			3,462,709			31.4				3,268,286			30.5				3,326,742			31.2				3,284,324			31.8				3,096,498			30.4
Savings			320,940			2.9				187,896			1.8				169,201			1.6				136,868			1.3				100,474			1.0
Certificates and other time deposits			3,625,920			32.8				3,744,596			34.9				3,486,805			32.7				3,191,737			30.9				3,403,427			33.4
Correspondent money market accounts			561,489			5.1				584,067			5.4				597,690			5.6				580,037			5.6				493,681			4.8
Total deposits		$	11,036,011			100	%		$	10,724,844			100	%		$	10,653,820			100	%		$	10,338,195			100	%		$	10,196,518			100	%
Total Loans to Deposits Ratio			88.0	%						91.8	%						91.7	%						93.6	%						94.9	%
Total Loans to Deposit Ratio, excluding MW loans and LHFS			81.9	%						85.9	%						86.9	%						89.1	%						90.7	%

¹ Total LHI does not include deferred fees of $8.2 million, $7.8 million, $6.9 million, $8.8 million and $10.1 million at September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (Unaudited)
Asset Quality
	For the Quarter Ended																				For the Nine Months Ended
	Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Sep 30, 2024				Sep 30, 2023
	(Dollars in thousands)
NPAs:
Nonaccrual loans	$	55,335			$	58,537			$	75,721			$	79,133			$	65,676			$	55,335			$	65,676
Nonaccrual PCD loans1		70				73				9,419				13,715				13,718				70				13,718
Accruing loans 90 or more days past due2		2,860				143				220				2,975				474				2,860				474
Total nonperforming loans held for investment (“NPLs”)		58,265				58,753				85,360				95,823				79,868				58,265				79,868
Other real estate owned		9,034				24,256				18,445				—				—				9,034				—
Total NPAs	$	67,299			$	83,009			$	103,805			$	95,823			$	79,868			$	67,299			$	79,868
Charge-offs:
1-4 family residential	$	—			$	(31	)		$	—			$	(21	)		$	—			$	(31	)		$	—
Multifamily		—				(198	)			—				(192	)			—				(198	)			—
OOCRE		—				—				(120	)			(364	)			(375	)			(120	)			(491	)
NOOCRE		—				(1,969	)			(4,293	)			(5,434	)			—				(6,262	)			(8,215	)
C&I		(2,259	)			(5,601	)			(946	)			(3,893	)			(1,929	)			(8,806	)			(6,520	)
Consumer		(54	)			(30	)			(71	)			(33	)			(49	)			(155	)			(203	)
Total charge-offs	$	(2,313	)		$	(7,829	)		$	(5,430	)		$	(9,937	)		$	(2,353	)		$	(15,572	)		$	(15,429	)
Recoveries:
1-4 family residential	$	3			$	—			$	1			$	1			$	—			$	4			$	2
OOCRE		—				120				—				—				—				120				—
NOOCRE		—				—				—				—				200				—				350
C&I		1,962				361				96				387				308				2,419				778
Mortgage Warehouse		46				—				—				—				—				46				—
Consumer		33				497				49				34				14				579				66
Total recoveries	$	2,044			$	978			$	146			$	422			$	522			$	3,168			$	1,196
Net charge-offs	$	(269	)		$	(6,851	)		$	(5,284	)		$	(9,515	)		$	(1,831	)		$	(12,404	)		$	(14,233	)
Provision for credit losses	$	4,000			$	8,250			$	7,500			$	9,500			$	8,627			$	19,750			$	33,012
ACL	$	117,162			$	113,431			$	112,032			$	109,816			$	109,831			$	117,162			$	109,831
Asset Quality Ratios:
NPAs to total assets		0.52	%			0.65	%			0.82	%			0.77	%			0.65	%			0.52	%			0.65	%
NPAs, excluding nonaccrual PCD loans, to total assets		0.52				0.65				0.74				0.66				0.44				0.52				0.54
NPAs to total loans and OREO		0.70				0.85				1.06				0.99				0.83				0.70				0.83
NPLs to total LHI		0.60				0.60				0.88				1.00				0.83				0.60				0.83
NPLs, excluding nonaccrual PCD loans, to total LHI		0.60				0.60				0.78				0.86				0.69				0.60				0.69
ACL to total LHI		1.21				1.16				1.15				1.14				1.14				1.21				1.14
ACL to total loans, excluding MW and LHFS		1.30				1.23				1.21				1.19				1.19				1.30				1.19
Net charge-offs to average loans outstanding3		0.01				0.28				0.22				0.39				0.08				0.17				0.20

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.
³ Annualized 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
		Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023
		(Dollars in thousands, except per share data)
Tangible Common Equity
Total stockholders' equity		$	1,608,014			$	1,548,616			$	1,538,515			$	1,531,323			$	1,491,166
Adjustments:
Goodwill			(404,452	)			(404,452	)			(404,452	)			(404,452	)			(404,452	)
Core deposit intangibles			(21,182	)			(23,619	)			(26,057	)			(28,495	)			(30,933	)
Tangible common equity		$	1,182,380			$	1,120,545			$	1,108,006			$	1,098,376			$	1,055,781
Common shares outstanding			54,446				54,350				54,496				54,338				54,305
Book value per common share		$	29.53			$	28.49			$	28.23			$	28.18			$	27.46
Tangible book value per common share		$	21.72			$	20.62			$	20.33			$	20.21			$	19.44

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
		Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023
		(Dollars in thousands)
Tangible Common Equity
Total stockholders' equity		$	1,608,014			$	1,548,616			$	1,538,515			$	1,531,323			$	1,491,166
Adjustments:
Goodwill			(404,452	)			(404,452	)			(404,452	)			(404,452	)			(404,452	)
Core deposit intangibles			(21,182	)			(23,619	)			(26,057	)			(28,495	)			(30,933	)
Tangible common equity		$	1,182,380			$	1,120,545			$	1,108,006			$	1,098,376			$	1,055,781
Tangible Assets
Total assets		$	13,042,976			$	12,684,330			$	12,708,396			$	12,394,337			$	12,346,331
Adjustments:
Goodwill			(404,452	)			(404,452	)			(404,452	)			(404,452	)			(404,452	)
Core deposit intangibles			(21,182	)			(23,619	)			(26,057	)			(28,495	)			(30,933	)
Tangible Assets		$	12,617,342			$	12,256,259			$	12,277,887			$	11,961,390			$	11,910,946
Tangible Common Equity to Tangible Assets			9.37	%			9.14	%			9.02	%			9.18	%			8.86	%

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																				For the Nine Months Ended
		Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Sep 30, 2024				Sep 30, 2023
		(Dollars in thousands)
Net income available for common stockholders adjusted for amortization of core deposit intangibles
Net income		$	31,001			$	27,202			$	24,156			$	3,499			$	32,621			$	82,359			$	104,762
Adjustments:
Plus: Amortization of core deposit intangibles			2,438				2,438				2,438				2,438				2,438				7,314				7,314
Less: Tax benefit at the statutory rate			512				512				512				512				512				1,536				1,536
Net income available for common stockholders adjusted for amortization of core deposit intangibles		$	32,927			$	29,128			$	26,082			$	5,425			$	34,547			$	88,137			$	110,540
Average Tangible Common Equity
Total average stockholders' equity		$	1,583,401			$	1,541,609			$	1,533,868			$	1,510,286			$	1,508,170			$	1,553,070			$	1,498,573
Adjustments:
Average goodwill			(404,452	)			(404,452	)			(404,452	)			(404,452	)			(404,452	)			(404,452	)			(404,452	)
Average core deposit intangibles			(22,789	)			(25,218	)			(27,656	)			(30,093	)			(32,540	)			(25,212	)			(34,939	)
Average tangible common equity		$	1,156,160			$	1,111,939			$	1,101,760			$	1,075,741			$	1,071,178			$	1,123,406			$	1,059,182
Return on Average Tangible Common Equity (Annualized)			11.33	%			10.54	%			9.52	%			2.00	%			12.80	%			10.48	%			13.95	%

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																				For the Nine Months Ended
		Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Sep 30, 2024				Sep 30, 2023
		(Dollars in thousands, except per share data)
Operating Earnings
Net income		$	31,001			$	27,202			$	24,156			$	3,499			$	32,621			$	82,359			$	104,762
Plus: Severance payments1			1,487				613				—				—				—				2,100				1,950
Plus: Loss on sale of AFS securities, net			—				—				6,304				—				—				6,304				5,321
Plus: Equity method investment write-down			—				—				—				29,417				—				—				—
Plus: FDIC special assessment			—				134				—				768				—				134				—
Operating pre-tax income			32,488				27,949				30,460				33,684				32,621				90,897				112,033
Less: Tax impact of adjustments			307				166				1,323				2,059				—				1,796				1,544
Plus: Nonrecurring tax adjustments			—				527				—				—				—				527				—
Operating earnings		$	32,181			$	28,310			$	29,137			$	31,625			$	32,621			$	89,628			$	110,489
Weighted average diluted shares outstanding			54,932				54,823				54,842				54,691				54,597				54,866				54,563
Diluted EPS		$	0.56			$	0.50			$	0.44			$	0.06			$	0.60			$	1.50			$	1.92
Diluted operating EPS		$	0.59			$	0.52			$	0.53			$	0.58			$	0.60			$	1.63			$	2.02

¹ Severance payments relate to certain restructurings made during the periods disclosed.

		For the Quarter Ended																				For the Nine Months Ended
		Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Sep 30, 2024				Sep 30, 2023
		(Dollars in thousands)
Pre-Tax, Pre-Provision Operating Earnings
Net income		$	31,001			$	27,202			$	24,156			$	3,499			$	32,621			$	82,359			$	104,762
Plus: Provision for income taxes			8,067				8,221				7,237				6,004				9,282				23,525				30,019
Plus: Provision for credit losses and unfunded commitments			4,000				8,250				5,959				8,000				7,718				18,209				32,471
Plus: Severance payments			1,487				613				—				—				—				2,100				1,950
Plus: Loss on sale of AFS securities, net			—				—				6,304				—				—				6,304				5,321
Plus: Equity method investment write-down			—				—				—				29,417				—				—				—
Plus: FDIC special assessment			—				134				—				768				—				134				—
Pre-tax, pre-provision operating earnings		$	44,555			$	44,420			$	43,656			$	47,688			$	49,621			$	132,631			$	174,523
Average total assets		$	12,861,918			$	12,578,706			$	12,336,042			$	12,306,634			$	12,259,062			$	12,593,206			$	12,274,697
Pre-tax, pre-provision operating return on average assets1			1.38	%			1.42	%			1.42	%			1.54	%			1.61	%			1.41	%			1.90	%
Average loans		$	9,661,774			$	9,765,428			$	9,563,372			$	9,581,784			$	9,625,005			$	9,663,518			$	9,594,996
Pre-tax, pre-provision operating return on average loans1			1.83	%			1.83	%			1.84	%			1.97	%			2.05	%			1.83	%			2.43	%
Average total assets		$	12,861,918			$	12,578,706			$	12,336,042			$	12,306,634			$	12,259,062			$	12,593,206			$	12,274,697
Return on average assets1			0.96	%			0.87	%			0.79	%			0.11	%			1.06	%			0.87	%			1.14	%
Operating return on average assets1			1.00				0.91				0.95				1.02				1.06				0.95				1.20
Operating earnings adjusted for amortization of core deposit intangibles
Operating earnings		$	32,181			$	28,310			$	29,137			$	31,625			$	32,621			$	89,628			$	110,489
Adjustments:
Plus: Amortization of core deposit intangibles			2,438				2,438				2,438				2,438				2,438				7,314				7,314
Less: Tax benefit at the statutory rate			512				512				512				512				512				1,536				1,536
Operating earnings adjusted for amortization of core deposit intangibles		$	34,107			$	30,236			$	31,063			$	33,551			$	34,547			$	95,406			$	116,267
Average Tangible Common Equity
Total average stockholders' equity		$	1,583,401			$	1,541,609			$	1,533,868			$	1,510,286			$	1,508,170			$	1,553,070			$	1,498,573
Adjustments:
Less: Average goodwill			(404,452	)			(404,452	)			(404,452	)			(404,452	)			(404,452	)			(404,452	)			(404,452	)
Less: Average core deposit intangibles			(22,789	)			(25,218	)			(27,656	)			(30,093	)			(32,540	)			(25,212	)			(34,939	)
Average tangible common equity		$	1,156,160			$	1,111,939			$	1,101,760			$	1,075,741			$	1,071,178			$	1,123,406			$	1,059,182
Operating return on average tangible common equity1			11.74	%			10.94	%			11.34	%			12.37	%			12.80	%			11.34	%			14.68	%
Efficiency ratio			61.94	%			59.11	%			62.45	%			77.49	%			54.49	%			61.15	%			50.88	%
Operating efficiency ratio
Net interest income		$	100,062			$	96,236			$	92,806			$	95,533			$	99,361			$	289,104			$	303,581
Noninterest income			13,106				10,578				6,662				(17,792	)			9,674				30,346				36,897
Plus: Loss on sale of AFS securities, net			—				—				6,304				—				—				6,304				5,321
Plus: Equity method investment write-down			—				—				—				29,417				—				—				—
Operating noninterest income			13,106				10,578				12,966				11,625				9,674				36,650				42,218
Noninterest expense			70,100				63,141				62,116				60,238				59,414				195,357				173,226
Less: FDIC special assessment			—				134				—				768				—				134				—
Less: Severance payments			1,487				613				—				—				—				2,100				1,950
Operating noninterest expense		$	68,613			$	62,394			$	62,116			$	59,470			$	59,414			$	193,123			$	171,276
Operating efficiency ratio			60.63	%			58.41	%			58.73	%			55.50	%			54.49	%			59.28	%			49.53	%

¹ Annualized ratio for quarterly metrics.

FAQ

What were Veritex's Q3 2024 GAAP net income and EPS?

Veritex's Q3 2024 GAAP net income was $31M, and diluted EPS was $0.56.

How did Veritex's total deposits change in Q3 2024?

Total deposits increased by $311.2M, or 11.60% annualized, in Q3 2024.

What was Veritex's book value per share for Q3 2024?

Veritex's book value per share was $29.53 for Q3 2024.

What is the quarterly cash dividend declared by Veritex for Q3 2024?

Veritex declared a quarterly cash dividend of $0.20 per share, payable on November 22, 2024.

How did Veritex's noninterest expense change in Q3 2024?

Noninterest expense increased by $7M, primarily due to higher salaries and benefits, in Q3 2024.