Veritex Holdings, Inc. Reports Third Quarter Operating Results

Rhea-AI Summary

Veritex Holdings reported record third-quarter earnings for 2022, achieving a GAAP net income of $43.3 million, up from $29.6 million in Q2. Key metrics include a 2.2% return on average assets and an efficiency ratio of 44%. Total loans surged by $594.6 million, reflecting a 30% annualized growth, while deposits grew by $230.7 million, a 10.8% increase. Additionally, non-performing assets dropped to 0.26% of total assets. The Board declared a quarterly cash dividend of $0.20 per share, payable on November 25, 2022.

Positive

• GAAP net income increased to $43.3 million in Q3 2022 from $29.6 million in Q2 2022.
• Total loans grew by $594.6 million, or 30.0% annualized, during the quarter.
• Total deposits increased by $230.7 million, or 10.8% annualized.
• Non-performing assets decreased to 0.26% of total assets, down 14 bps from Q2 2022.
• Declared a quarterly cash dividend of $0.20 per share.

Negative

• Noninterest expense increased by $2.8 million, or 5.9%, compared to Q2 2022.

DALLAS, Oct. 25, 2022 (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, 2022.

“The third quarter of 2022 resulted in record dollar earnings for our Company in a resilient Texas market” said President and CEO, C. Malcolm C. Holland, III. “We reported historical financial metrics with 2.2% in pre-tax, pre-provision operating return, 1.5% in return on average assets, return on average tangible common equity of 18% and an efficiency ratio of 44% coupled with continuing improved credit metrics noted by a 14 bp decrease in nonperforming assets. We remain focused on this positive momentum and deposit growth but more importantly our customers, the strong markets we serve and our shareholders”

		Quarter to Date								Year to Date
Financial Highlights		Q3 2022				Q2 2022				Q3 2022				Q3 2021
		(Dollars in thousands, except per share data) (unaudited)
GAAP
Net income		$	43,322			$	29,626			$	106,418			$	98,078
Diluted EPS			0.79				0.54				1.98				1.95
Book value per common share			26.15				26.50				26.15				26.09
Return on average assets2			1.50	%			1.11	%			1.33	%			1.42	%
Efficiency ratio			44.71				50.76				49.05				49.79
Return on average equity2			11.82				8.21				10.02				10.43
Non-GAAP1
Operating earnings		$	43,625			$	29,855			$	107,494			$	97,237
Diluted operating EPS			0.80				0.55				2.00				1.94
Tangible book value per common share			17.91				18.20				17.91				17.53
Pre-tax, pre-provision operating earnings			63,454				47,000				152,719				122,565
Pre-tax, pre-provision operating return on average assets2			2.20	%			1.76	%			1.90	%			1.78	%
Operating return on average assets2			1.51				1.12				1.34				1.41
Operating efficiency ratio			44.37				50.45				48.59				49.89
Return on average tangible common equity2			17.82				12.68				15.40				16.70
Operating return on average tangible common equity2			17.94				12.77				15.55				16.57

¹ Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of these non-generally accepted accounting principles (“”GAAP”) financial measures to their most directly comparable GAAP measures.
² Annualized ratio.

Other Third Quarter Highlights

• Pre-tax, pre-provision operating return on average assets increased 44 bps from the second quarter of 2022 to 2.20%;
• Net interest margin increased to 3.77%, up 35 basis points from the second quarter of 2022;
• Non-performing assets (“NPAs”) to total assets decreased to 0.26%, or 14 bps from June 30, 2022 and 51 bps from September 30, 2021, respectively;
• Net charge-offs to average loans outstanding was 3 basis points for the third quarter of 2022;
• Total loans held for investment (“LHI”), excluding mortgage warehouse (“MW”) and paycheck protection program (“PPP”) loans, grew $594.6 million, or 30.0% annualized, during the three months ended September 30, 2022 from $8.5 billion at the end of the second quarter of 2022;
• Total deposits grew $230.7 million, or 10.8% annualized, during the three months ended September 30, 2022 from $8.5 billion at the end of the second quarter of 2022; and
• Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on November 25, 2022.
  

Results of Operations for the Three Months Ended September 30, 2022

Net Interest Income

For the three months ended September 30, 2022, net interest income before provision for credit losses was $101.0 million and net interest margin was 3.77% compared to $84.5 million and 3.42%, respectively, for the three months ended June 30, 2022. The $16.6 million increase in net interest income before provision for credit losses was primarily due to a $27.0 million increase in interest income on loans driven by an increase in average balances and loan yields during the three months ended September 30, 2022. Net interest margin increased 35 basis points compared to the three months ended June 30, 2022, primarily due to the increase in yields earned on loans during three months ended September 30, 2022, partially offset by an increase in funding costs.

Compared to the three months ended September 30, 2021, net interest income before provision for credit losses for the three months ended September 30, 2022 increased by $29.8 million, or 41.8%. The increase was primarily due to a $38.1 million increase in interest income on loans driven by an increase in average balances and loan yields. Net interest margin increased 51 basis points to 3.77% for the three months ended September 30, 2022 from 3.26% for the three months ended September 30, 2021. The increase was primarily due to the increase in average balances and loan yields during the three months ended September 30, 2022, partially offset by an increase in funding costs.

Noninterest Income

Noninterest income for the three months ended September 30, 2022 was $13.0 million, an increase of $2.6 million, or 25.5%, compared to the three months ended June 30, 2022. The increase was primarily due to a $2.0 million increase in customer swap income and a $2.2 million increase in the fair value of the servicing asset, partially offset by a $2.0 million decrease in equity method investment income.

Compared to the three months ended September 30, 2021, noninterest income for the three months ended September 30, 2022 decreased by $2.6 million, or 16.7%. The decrease was primarily due to a $5.6 million decrease in equity method investment income, partially offset by a $2.3 million increase in customer swap income and a $1.0 million increase in loan fees.

Noninterest Expense

Noninterest expense was $51.0 million for the three months ended September 30, 2022, compared to $48.2 million for the three months ended June 30, 2022, an increase of $2.8 million, or 5.9%. This increase was primarily due to a $2.7 million increase in salaries and employee benefits from continued investment in talent.

Compared to the three months ended September 30, 2021, noninterest expense for the three months ended September 30, 2022 increased by $9.7 million, or 23.4%. The increase was primarily driven by a $6.8 million increase in salaries and employee benefits as a result of a $4.1 million increase in salaries and employee benefits from continued investment in talent.

Financial Condition

Total LHI, excluding MW and PPP loans, were $8.5 billion at September 30, 2022, an increase of $594.6 million, or 30.0% annualized, compared to June 30, 2022. The increase was the result of the continued execution, and success of our loan growth strategy, including our continued investment in talent.

Total deposits were $8.7 billion at September 30, 2022, an increase of $230.7 million, or 10.8% annualized, compared to June 30, 2022. The increase was primarily the result of an increase of $262.4 million in interest-bearing transaction and savings deposits and an increase of $104.7 million in certificates and other time deposits, partially offset by a $136.4 million decrease in non-interest bearing deposits.

Credit Quality

Nonperforming assets totaled $30.6 million, or 0.26% of total assets at September 30, 2022, compared to $45.0 million, or 0.40% of total assets, at June 30, 2022. The Company had net charge-offs of $2.2 million for the quarter, which were fully reserved against in prior quarters under our allowance for credit loss (“ACL”) model.

The Company recorded a provision for credit losses of $6.7 million for the three months ended September 30, 2022, a $9.0 million provision for credit losses for the three months ended June 30, 2022 and no provision for credit losses for the three months ended September 30, 2021. The recorded provision for credit losses for the three months ended September 30, 2022, compared to the three months ended June 30, 2022, was primarily attributable to an increase in general reserves as a result of changes in economic factors and loan growth. For the three months ended September 30, 2022, we recorded an $850 thousand provision for unfunded commitments, which was attributable to changes in economic factors and an increase of unfunded balances. ACL as a percentage of LHI, excluding MW and PPP loans, was 1.00%, 1.02% and 1.42% at September 30, 2022, June 30, 2022 and September 30, 2021, respectively.

Dividend Information

After the close of the market on Tuesday, October 25, 2022, 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 25, 2022 to stockholders of record as of the close of business on November 11, 2022.

Non-GAAP Financial Measures

Veritex’s management uses certain non-GAAP (U.S. generally accepted accounting principles) financial measures to evaluate its operating performance and provide information that is important to investors. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, Veritex’s reported results prepared in accordance with GAAP. Specifically, Veritex reviews and reports tangible book value per common share, operating earnings, tangible common equity to tangible assets, return on average tangible common equity, pre-tax, pre-provision operating earnings, pre-tax, pre-provision operating return on average assets, 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 26, 2022, at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/w5hrkf8v and will receive a unique PIN, which can be used when dialing in for the call.

Participants may also register via teleconference at:
https://register.vevent.com/register/BIcf08415eefb54948a6cdbc60349b8e55. 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. 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; the effects of the COVID-19 pandemic and actions taken in response thereto; 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, 2021 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, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Sep 30, 2022				Sep 30, 2021
		(Dollars and shares in thousands)
Per Share Data (Common Stock):
Basic EPS		$	0.80			$	0.55			$	0.66			$	0.84			$	0.75			$	2.01			$	1.98
Diluted EPS			0.79				0.54				0.65				0.82				0.73				1.98				1.95
Book value per common share			26.15				26.50				26.86				26.64				26.09				26.15				26.09
Tangible book value per common share1			17.91				18.20				18.51				17.49				17.53				17.91				17.53
Dividends paid per common share outstanding2			0.20				0.20				0.20				0.20				0.20				0.60				0.57
Common Stock Data:
Shares outstanding at period end			53,988				53,951				53,907				49,372				49,229				53,988				49,229
Weighted average basic shares outstanding for the period			53,979				53,949				50,695				49,329				49,423				52,886				49,431
Weighted average diluted shares outstanding for the period			54,633				54,646				51,571				50,441				50,306				53,655				50,230
Summary of Credit Ratios:
ACL to total LHI, excluding MW and PPP loans			1.00	%			1.02	%			1.02	%			1.15	%			1.42	%			1.00	%			1.42	%
NPAs to total assets			0.26				0.40				0.46				0.51				0.77				0.26				0.77
Net charge-offs to average loans outstanding			0.03				0.01				0.07				0.19				0.09				0.10				0.18
Summary Performance Ratios:
Return on average assets3			1.50				1.11				1.36				1.68				1.56				1.33				1.42
Return on average equity3			11.82				8.21				10.00				12.65				11.32				10.02				10.43
Return on average tangible common equity1, 3			17.82				12.68				15.84				20.06				17.72				15.40				16.70
Efficiency ratio			44.71				50.76				52.84				48.53				47.55				49.05				49.79
Net interest margin			3.77				3.42				3.22				3.37				3.26				3.48				3.20
Selected Performance Metrics - Operating:
Diluted operating EPS1		$	0.80			$	0.55			$	0.66			$	0.84			$	0.70			$	2.00			$	1.94
Pre-tax, pre-provision operating return on average assets1, 2			2.20	%			1.76	%			1.71	%			1.97	%			1.85	%			1.90	%			1.78	%
Operating return on average assets1, 3			1.51				1.12				1.38				1.72				1.48				1.34				1.41
Operating return on average tangible common equity1, 3			17.94				12.77				16.08				20.48				16.92				15.55				16.57
Operating efficiency ratio1			44.37				50.45				52.05				47.64				48.51				48.59				49.89
Veritex Holdings, Inc. Capital Ratios:
Average stockholders' equity to average total assets			12.69	%			13.51	%			13.58	%			13.30	%			13.75	%			13.23	%			13.63	%
Tangible common equity to tangible assets1			8.58				9.04				9.98				9.28				9.43				8.58				9.43
Tier 1 capital to average assets (leverage)			9.79				10.14				10.66				9.05				9.54				9.79				9.54
Common equity tier 1 capital			9.09				9.25				9.84				8.58				8.75				9.09				8.75
Tier 1 capital to risk-weighted assets			9.35				9.52				10.14				8.89				9.06				9.35				9.06
Total capital to risk-weighted assets			11.68				11.95				12.73				11.60				12.31				11.68				12.31

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.
³Annualized ratio for quarterly metrics.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands)

		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021
		(unaudited)				(unaudited)				(unaudited)								(unaudited)
ASSETS
Cash and cash equivalents		$	433,897			$	410,716			$	551,573			$	379,784			$	229,712
Debt securities			1,303,004				1,354,403				1,244,514				1,052,494				1,103,745
Other investments			115,551				202,685				188,699				190,591				191,786
Loans held for sale			17,644				14,210				18,721				26,007				18,896
LHI, PPP loans, carried at fair value			2,821				7,339				18,512				53,369				135,842
LHI, MW			523,805				629,291				542,877				565,645				615,045
LHI, excluding MW and PPP			8,510,433				7,915,792				7,125,429				6,766,009				6,615,905
Total loans			9,054,703				8,566,632				7,705,539				7,411,030				7,385,688
ACL			(85,037	)			(80,576	)			(72,485	)			(77,754	)			(93,771	)
Bank-owned life insurance			84,030				84,097				83,641				83,194				83,781
Bank premises, furniture and equipment, net			108,720				108,769				109,138				109,271				116,063
Other real estate owned (“OREO”)			—				1,032				1,062				—				—
Intangible assets, net of accumulated amortization			56,238				59,011				63,986				66,017				54,682
Goodwill			404,452				404,452				404,452				403,771				370,840
Other assets			238,896				193,590				173,561				138,851				129,774
Total assets		$	11,714,454			$	11,304,811			$	10,453,680			$	9,757,249			$	9,572,300
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing deposits		$	2,811,412			$	2,947,830			$	2,765,895			$	2,510,723			$	2,302,925
Interest-bearing transaction and savings deposits			4,269,668				4,007,250				3,688,292				3,276,312				3,228,306
Certificates and other time deposits			1,667,364				1,562,626				1,435,409				1,576,580				1,647,521
Total deposits			8,748,444				8,517,706				7,889,596				7,363,615				7,178,752
Accounts payable and other liabilities			173,198				126,116				105,552				69,160				66,571
Advances from Federal Home Loan Bank (“FHLB”)			1,150,000				1,000,000				777,522				777,562				777,601
Subordinated debentures and subordinated notes			228,524				228,272				228,018				227,764				262,761
Securities sold under agreements to repurchase			2,389				3,275				4,996				4,069				2,455
Total liabilities			10,302,555				9,875,369				9,005,684				8,442,170				8,288,140
Commitments and contingencies
Stockholders’ equity:
Common stock			606				606				605				560				559
Additional paid-in capital			1,303,171				1,300,170				1,297,161				1,142,758				1,137,889
Retained earnings			350,195				317,664				298,830				275,273				243,633
Accumulated other comprehensive (loss) income			(74,491	)			(21,416	)			18,982				64,070				69,661
Treasury stock			(167,582	)			(167,582	)			(167,582	)			(167,582	)			(167,582	)
Total stockholders’ equity			1,411,899				1,429,442				1,447,996				1,315,079				1,284,160
Total liabilities and stockholders’ equity		$	11,714,454			$	11,304,811			$	10,453,680			$	9,757,249			$	9,572,300

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands, except per share data)

		For the Quarter Ended																				For the Nine Months Ended
		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Sep 30, 2022			Sep 30, 2021
Interest income:
Loans, including fees		$	109,199			$	82,191			$	71,443			$	74,174			$	71,139			$	262,833		$	206,352
Debt securities			10,462				9,632				7,762				9,553				7,613				27,856			22,579
Deposits in financial institutions and Fed Funds sold			1,898				714				262				165				130				2,874			424
Equity securities and other investments			1,666				1,057				910				1,004				898				3,633			2,233
Total interest income			123,225				93,594				80,377				84,896				79,780				297,196			231,588
Interest expense:
Transaction and savings deposits			12,897				4,094				1,751				1,629				1,588				18,742			5,229
Certificates and other time deposits			3,919				1,465				1,380				1,661				1,934				6,764			7,418
Advances from FHLB			2,543				834				1,547				1,847				1,848				4,924			5,489
Subordinated debentures and subordinated notes			2,826				2,721				2,659				3,018				3,134				8,206			9,410
Total interest expense			22,185				9,114				7,337				8,155				8,504				38,636			27,546
Net interest income			101,040				84,480				73,040				76,741				71,276				258,560			204,042
Provision (benefit) for credit losses			6,650				9,000				(500	)			(3,349	)			—				15,150			—
Provision (benefit) for unfunded commitments			850				—				493				(1,040	)			(448	)			1,343			(441	)
Net interest income after provisions			93,540				75,480				73,047				81,130				71,724				242,067			204,483
Noninterest income:
Service charges and fees on deposit accounts			5,217				5,039				4,710				4,782				4,484				14,966			11,960
Loan fees			2,786				2,385				2,794				2,697				1,746				7,965			4,910
Loss on sales of investment securities			—				—				—				—				(188	)			—			(188	)
Gain on sales of mortgage loans held for sale			16				223				307				293				407				546			1,299
Government guaranteed loan income, net			572				789				4,891				3,423				2,341				6,252			12,337
Equity method investment (loss) income			(1,058	)			966				367				1,238				4,522				275			4,522
Customer swap income			3,358				1,321				946				796				1,093				5,625			1,694
Other income (loss)			2,130				(345	)			1,082				2,921				1,222				2,867			5,721
Total noninterest income			13,021				10,378				15,097				16,150				15,627				38,496			42,255
Noninterest expense:
Salaries and employee benefits			29,714				26,924				27,513				25,401				22,964				84,151			69,347
Occupancy and equipment			4,615				4,496				4,517				4,398				4,536				13,628			12,865
Professional and regulatory fees			3,718				2,865				3,158				3,017				3,401				9,741			9,928
Data processing and software expense			3,509				3,386				2,921				2,597				2,494				9,816			7,349
Marketing			1,845				2,306				1,187				1,443				1,151				5,338			3,901
Amortization of intangibles			2,494				2,495				2,495				2,494				2,509				7,484			7,563
Telephone and communications			389				352				385				380				380				1,126			1,054
Merger and acquisition (“M&A”) expense			384				295				700				826				—				1,379			—
Other			4,323				5,034				3,696				4,521				3,886				13,053			10,628
Total noninterest expense			50,991				48,153				46,572				45,077				41,321				145,716			122,635
Income before income tax expense			55,570				37,705				41,572				52,203				46,030				134,847			124,103
Income tax expense			12,248				8,079				8,102				10,697				9,195				28,429			26,025
Net income		$	43,322			$	29,626			$	33,470			$	41,506			$	36,835			$	106,418		$	98,078
Net income available to common stockholders		$	43,322			$	29,626			$	33,470			$	41,506			$	36,835			$	106,418		$	98,078
Basic EPS		$	0.80			$	0.55			$	0.66			$	0.84			$	0.75			$	2.01		$	1.98
Diluted EPS		$	0.79			$	0.54			$	0.65			$	0.82			$	0.73			$	1.98		$	1.95
Weighted average basic shares outstanding			53,979				53,949				50,695				49,329				49,423				52,886			49,431
Weighted average diluted shares outstanding			54,633				54,646				51,571				50,441				50,306				53,655			50,230

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)

		For the Quarter Ended
		September 30, 2022										June 30, 2022										September 30, 2021
		Average Outstanding Balance				Interest Earned/ Interest Paid			Average Yield/ Rate			Average Outstanding Balance				Interest Earned/ Interest Paid			Average Yield/ Rate			Average Outstanding Balance				Interest Earned/ Interest Paid			Average Yield/ Rate
		(In thousands, except percentages)
Assets
Interest-earning assets:
Loans1		$	8,277,762			$	104,543		5.01	%		$	7,547,564			$	78,234		4.16	%		$	6,384,856			$	66,911		4.16	%
LHI, MW			448,556				4,649		4.11				479,187				3,929		3.29				465,945				3,697		3.15
PPP loans			2,775				7		1.00				11,402				28		1.00				210,092				531		1.00
Debt securities			1,362,365				10,462		3.05				1,318,502				9,632		2.93				1,119,952				7,613		2.70
Interest-bearing deposits in other banks			346,296				1,898		2.17				369,847				714		0.77				336,289				130		0.15
Equity securities and other investments			203,528				1,666		3.25				167,327				1,057		2.53				167,242				898		2.13
Total interest-earning assets			10,641,282				123,225		4.59				9,893,829				93,594		3.79				8,684,376				79,780		3.64
ACL			(81,888	)									(74,268	)									(99,482	)
Noninterest-earning assets			901,463										892,102										800,576
Total assets		$	11,460,857									$	10,711,663									$	9,385,470
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits		$	4,164,164			$	12,897		1.23	%		$	3,770,098			$	4,094		0.44	%		$	3,201,409			$	1,588		0.20	%
Certificates and other time deposits			1,656,347				3,919		0.94				1,459,690				1,465		0.40				1,519,824				1,934		0.50
Advances from FHLB			904,065				2,543		1.12				828,769				834		0.40				777,617				1,848		0.94
Subordinated debentures and subordinated notes			231,012				2,826		4.85				232,043				2,721		4.70				264,714				3,134		4.70
Total interest-bearing liabilities			6,955,588				22,185		1.27				6,290,600				9,114		0.58				5,763,564				8,504		0.59
Noninterest-bearing liabilities:
Noninterest-bearing deposits			2,925,462										2,870,692										2,271,197
Other liabilities			125,991										102,994										60,181
Total liabilities			10,007,041										9,264,286										8,094,942
Stockholders’ equity			1,453,816										1,447,377										1,290,528
Total liabilities and stockholders’ equity		$	11,460,857									$	10,711,663									$	9,385,470
Net interest rate spread2									3.32	%									3.21	%									3.05	%
Net interest income and margin3							101,040		3.77	%							84,480		3.42	%							71,276		3.26	%

¹ Includes average outstanding balances of loans held for sale of $14,023, $12,112 and $8,542 for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively, and average balances of LHI, excluding MW and PPP loans.
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 SUBSIDIARY
Financial Highlights
(In thousands except percentages)

		Nine Months Ended
		September 30, 2022										September 30, 2021
		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		$	7,558,825			$	255,630		4.52	%		$	6,118,880			$	193,040		4.22	%
LHI, WH			449,906				6,998		2.08				477,319				10,988		3.08
PPP loans			27,477				205		1.00				309,620				2,324		1.00
Debt securities			1,274,712				27,856		2.92				1,093,263				22,579		2.76
Interest-bearing deposits in other banks			422,905				2,874		0.91				408,601				424		0.14
Equity securities and other investments			187,002				3,633		2.60				114,237				2,233		2.61
Total interest-earning assets			9,920,827				297,196		4.01				8,521,920				231,588		3.63
ACL			(78,015	)									(103,478	)
Noninterest-earning assets			886,357										799,207
Total assets		$	10,729,169									$	9,217,649
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits		$	3,804,506			$	18,742		0.66	%		$	3,144,395			$	5,229		0.22	%
Certificates and other time deposits			1,539,861				6,764		0.59				1,514,954				7,418		0.65
Advances from FHLB			837,254				4,924		0.79				777,655				5,489		0.94
Subordinated debentures and subordinated notes			231,640				8,206		4.74				264,998				9,410		4.75
Total interest-bearing liabilities			6,413,261				38,636		0.81				5,702,002				27,546		0.65
Noninterest-bearing liabilities:
Noninterest-bearing deposits			2,797,110										2,198,551
Other liabilities			98,898										60,456
Total liabilities			9,309,269										7,961,009
Stockholders’ equity			1,419,900										1,256,640
Total liabilities and stockholders’ equity		$	10,729,169									$	9,217,649
Net interest rate spread2									3.20	%									2.98	%
Net interest income and margin3						$	258,560		3.48	%						$	204,042		3.20	%

¹ Includes average outstanding balances of loans held for sale of $12,973 and $13,140 for the nine months ended September 30, 2022 and 2021, respectively, and average balances of LHI, excluding MW and PPP loans.
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

Yield Trend

		For the Quarter Ended
		Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
Average yield on interest-earning assets:
Loans1		5.01	%		4.16	%		4.03	%		4.12	%		4.16	%
LHI, MW		4.11			3.29			2.95			2.98			3.15
PPP loans		1.00			1.00			1.00			1.00			1.00
Debt securities		3.05			2.93			2.76			3.47			2.70
Interest-bearing deposits in other banks		2.17			0.77			0.19			0.16			0.15
Equity securities and other investments		3.25			2.53			1.94			2.09			2.13
Total interest-earning assets		4.59	%		3.79	%		3.54	%		3.72	%		3.64	%
Average rate on interest-bearing liabilities:
Interest-bearing demand and savings deposits		1.23	%		0.44	%		0.20	%		0.19	%		0.20	%
Certificates and other time deposits		0.94			0.40			0.37			0.41			0.50
Advances from FHLB		1.12			0.40			0.81			0.94			0.94
Subordinated debentures and subordinated notes		4.85			4.70			4.65			4.62			4.70
Total interest-bearing liabilities		1.27	%		0.58	%		0.50	%		0.54	%		0.59	%
Net interest rate spread2		3.32	%		3.21	%		3.04	%		3.18	%		3.05	%
Net interest margin3		3.77	%		3.42	%		3.22	%		3.37	%		3.26	%

  
¹Includes average outstanding balances of loans held for sale of $14,023, $12,112, $12,769, $8,987 and $8,542 for the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively, and average balances of LHI, excluding MW and PPP loans.

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
		Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
Average cost of interest-bearing deposits		1.15	%		0.43	%		0.26	%		0.26	%		0.30	%
Average costs of total deposits, including noninterest-bearing		0.76			0.28			0.17			0.18			0.20

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)

LHI and Deposit Portfolio Composition

		Sep 30, 2022							Jun 30, 2022							Mar 31, 2022							Dec 31, 2021							Sep 30, 2021
		(In thousands, except percentages)
LHI1
Commercial		$	2,740,948			32.1	%		$	2,450,403			30.9	%		$	2,125,900			29.8	%		$	2,006,876			29.6	%		$	1,793,740			27.1	%
Real Estate:
Owner occupied commercial (“OOCRE”)			677,705			7.9				646,723			8.2				633,615			8.9				665,537			9.8				711,476			10.7
Non-owner occupied commercial (“NOOCRE”)			2,273,305			26.7				2,203,970			27.8				2,145,826			30.0				2,120,309			31.3				2,194,438			33.1
Construction and land			1,673,997			19.6				1,532,997			19.3				1,297,338			18.2				1,062,144			15.7				936,174			14.1
Farmland			43,569			0.5				47,319			0.6				48,095			0.7				55,827			0.8				73,550			1.1
1-4 family residential			858,693			10.1				765,260			9.6				604,408			8.5				542,566			8.0				543,518			8.2
Multi-family residential			252,244			3.0				276,632			3.5				272,250			3.8				310,241			4.6				356,885			5.4
Consumer			7,465			0.1				7,520			0.1				9,533			0.1				11,998			0.2				14,266			0.3
Total LHI		$	8,527,926			100	%		$	7,930,824			100	%		$	7,136,965			100	%		$	6,775,498			100	%		$	6,624,047			100	%
MW			523,805							629,291							542,877							565,645							615,045
PPP loans			2,821							7,339							18,512							53,369							135,842
Total LHI1		$	9,054,552						$	8,567,454						$	7,698,354						$	7,394,512						$	7,374,934
Deposits
Noninterest-bearing		$	2,811,412			32.1	%		$	2,947,830			34.6	%		$	2,765,895			35.1	%		$	2,510,723			34.1	%		$	2,302,925			32.1	%
Interest-bearing transaction			603,729			6.9				660,557			7.8				599,580			7.6				579,408			7.9				514,537			7.2
Money market			3,533,532			40.4				3,217,195			37.8				2,958,790			37.5				2,568,843			34.9				2,585,926			36.0
Savings			132,407			1.5				129,498			1.5				129,922			1.6				128,061			1.7				127,843			1.8
Certificates and other time deposits			1,667,364			19.1				1,562,626			18.3				1,435,409			18.2				1,576,580			21.4				1,647,521			22.9
Total deposits		$	8,748,444			100	%		$	8,517,706			100	%		$	7,889,596			100	%		$	7,363,615			100	%		$	7,178,752			100	%
Loan to Deposit Ratio			103.5	%						100.6	%						97.6	%						100.4	%						102.7	%
Loan to Deposit Ratio, excluding MW and PPP loans			97.5	%						93.1	%						90.5	%						92.0	%						92.3	%

¹ Total LHI does not include deferred fees of $17.5 million, $15.0 million, $11.5 million, $9.5 million and $8.1 million at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Asset Quality

	For the Quarter Ended																				For the Nine Months Ended
	Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Sep 30, 2022				Sep 30, 2021
	(In thousands, except percentages)
NPAs:
Nonaccrual loans	$	30,592			$	42,242			$	46,680			$	49,687			$	72,317			$	30,592			$	72,317
Accruing loans 90 or more days past due1		—				1,753				264				441				1,711				—				1,711
Total nonperforming loans held for investment (“NPLs”)		30,592				43,995				46,944				50,128				74,028				30,592				74,028
OREO		—				1,032				1,062				—				—				—				—
Total NPAs	$	30,592			$	45,027			$	48,006			$	50,128			$	74,028			$	30,592			$	74,028
Charge-offs:
1-4 family residential	$	—			$	—			$	—			$	—			$	(64	)		$	—			$	(379	)
OOCRE		(1,061	)			(244	)			(1,341	)			(898	)			(813	)			(2,646	)			(1,502	)
NOOCRE		(838	)			—				(553	)			(7,936	)			—				(1,391	)			—
Commercial		(460	)			(528	)			(3,294	)			(4,114	)			(5,508	)			(4,282	)			(11,462	)
Consumer		(19	)			(1,091	)			(134	)			(44	)			(17	)			(1,244	)			(55	)
Total charge-offs		(2,378	)			(1,863	)			(5,322	)			(12,992	)			(6,402	)			(9,563	)			(13,398	)
Recoveries:
1-4 family residential		4				3				—				6				26				7				58
OOCRE		—				245				—				—				—				245				500
NOOCRE		3				93				400				—				—				496				—
Commercial		177				572				144				61				596				893				1,481
Consumer		5				41				9				257				8				55				46
Total recoveries		189				954				553				324				630				1,696				2,085
Net charge-offs	$	(2,189	)		$	(909	)		$	(4,769	)		$	(12,668	)		$	(5,772	)		$	(7,867	)		$	(11,313	)
ACL	$	85,037			$	80,576			$	72,485			$	77,754			$	93,771			$	85,037			$	93,771
Asset Quality Ratios:
NPAs to total assets		0.26	%			0.40	%			0.46	%			0.51	%			0.77	%			0.26	%			0.77	%
NPLs to total LHI, excluding MW and PPP loans		0.36				0.55				0.66				0.74				1.12				0.36				1.12
ACL to total LHI, excluding MW and PPP loans		1.00				1.02				1.02				1.15				1.42				1.00				1.42
Net charge-offs to average loans outstanding		0.03				0.01				0.07				0.19				0.09				0.10				0.18

¹ 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.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

We identify certain financial measures discussed in this earnings release as being “non-GAAP financial measures.” In accordance with SEC rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles as in effect from time to time in the United States (“GAAP”), in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios calculated using exclusively either one or both of (i) financial measures calculated in accordance with GAAP and (ii) operating measures or other measures that are not non-GAAP financial measures.

The non-GAAP financial measures that we present in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we present in this earnings release may differ from that of other companies reporting measures with similar names. You should understand how such other financial institutions calculate their financial measures that appear to be similar or have similar names to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures.

Tangible Book Value Per Common Share. Tangible book value is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by number of common shares outstanding. For tangible book value per common share, the most directly comparable financial measure calculated in accordance with GAAP is book value per common share.

We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:

		As of
		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021
		(Dollars in thousands, except per share data)
Tangible Common Equity
Total stockholders' equity		$	1,411,899			$	1,429,442			$	1,447,996			$	1,315,079			$	1,284,160
Adjustments:
Goodwill			(404,452	)			(404,452	)			(404,452	)			(403,771	)			(370,840	)
Core deposit intangibles			(40,684	)			(43,122	)			(45,560	)			(47,998	)			(50,436	)
Tangible common equity		$	966,763			$	981,868			$	997,984			$	863,310			$	862,884
Common shares outstanding			53,988				53,951				53,907				49,372				49,229
Book value per common share		$	26.15			$	26.50			$	26.86			$	26.64			$	26.09
Tangible book value per common share		$	17.91			$	18.20			$	18.51			$	17.49			$	17.53

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity, less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For tangible common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total stockholders’ equity to total assets.

We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, in each case, exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing both total stockholders’ equity and assets while not increasing our tangible common equity or tangible assets.

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:

		As of
		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021
		(Dollars in thousands)
Tangible Common Equity
Total stockholders' equity		$	1,411,899			$	1,429,442			$	1,447,996			$	1,315,079			$	1,284,160
Adjustments:
Goodwill			(404,452	)			(404,452	)			(404,452	)			(403,771	)			(370,840	)
Core deposit intangibles			(40,684	)			(43,122	)			(45,560	)			(47,998	)			(50,436	)
Tangible common equity		$	966,763			$	981,868			$	997,984			$	863,310			$	862,884
Tangible Assets
Total assets		$	11,714,454			$	11,304,811			$	10,453,680			$	9,757,249			$	9,572,300
Adjustments:
Goodwill			(404,452	)			(404,452	)			(404,452	)			(403,771	)			(370,840	)
Core deposit intangibles			(40,684	)			(43,122	)			(45,560	)			(47,998	)			(50,436	)
Tangible Assets		$	11,269,318			$	10,857,237			$	10,003,668			$	9,305,480			$	9,151,024
Tangible Common Equity to Tangible Assets			8.58	%			9.04	%			9.98	%			9.28	%			9.43	%

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Return on Average Tangible Common Equity. Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) net income available for common stockholders adjusted for amortization of core deposit intangibles (which we refer to as “return”) as net income, plus amortization of core deposit intangibles, less tax benefit at the statutory rate; (b) average tangible common equity as total average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.

We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of core deposit intangibles. Goodwill and core deposit intangibles have the effect of increasing total stockholders’ equity while not increasing our tangible common equity. This measure is particularly relevant to acquisitive institutions that may have higher balances in goodwill and core deposit intangibles than non-acquisitive institutions.

The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income available for common stockholders adjusted for amortization of core deposit intangibles, net of taxes to net income and presents our return on average tangible common equity:

		For the Quarter Ended																				For the Nine Months Ended
		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Sep 30, 2022				Sep 30, 2021
		(Dollars in thousands)
Net income available for common stockholders adjusted for amortization of core deposit intangibles
Net income		$	43,322			$	29,626			$	33,470			$	41,506			$	36,835			$	106,418			$	98,078
Adjustments:
Plus: Amortization of core deposit intangibles			2,438				2,438				2,438				2,438				2,438				7,314				7,323
Less: Tax benefit at the statutory rate			512				512				512				512				512				1,536				1,538
Net income available for common stockholders adjusted for amortization of core deposit intangibles		$	45,248			$	31,552			$	35,396			$	43,432			$	38,761			$	112,196			$	103,863
Average Tangible Common Equity
Total average stockholders' equity		$	1,453,816			$	1,447,377			$	1,357,448			$	1,301,676			$	1,290,528			$	1,419,900			$	1,256,640
Adjustments:
Average goodwill			(404,452	)			(404,452	)			(404,014	)			(393,220	)			(370,840	)			(404,308	)			(370,840	)
Average core deposit intangibles			(42,230	)			(44,720	)			(47,158	)			(49,596	)			(52,043	)			(41,470	)			(54,458	)
Average tangible common equity		$	1,007,134			$	998,205			$	906,276			$	858,860			$	867,645			$	974,122			$	831,342
Return on Average Tangible Common Equity (Annualized)			17.82	%			12.68	%			15.84	%			20.06	%			17.72	%			15.40	%			16.70	%

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Assets, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings, pre-tax, pre-provision operating earnings and the performance metrics calculated using these metrics, listed below, are non-GAAP measures used by management to evaluate the Company’s financial performance. We calculate (a) operating earnings as net income plus severance payments, plus loss on sale of debt securities AFS, net, less Thrive PPP loan forgiveness income, 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, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021				Sep 30, 2021			Sep 30, 2022			Sep 30, 2021
		(Dollars in thousands, except per share data)
Operating Earnings
Net income		$	43,322		$	29,626		$	33,470		$	41,506			$	36,835		$	106,418		$	98,078
Plus: Severance payments1			—			—			—			—				—			—			627
Plus: Loss on sale of debt securities AFS, net			—			—			—			—				188			—			188
Less: Thrive PPP loan forgiveness income2			—			—			—			—				1,912			—			1,912
Plus: M&A expenses			384			295			700			826				—			1,379			—
Operating pre-tax income			43,706			29,921			34,170			42,332				35,111			107,797			96,981
Less: Tax impact of adjustments			81			66			156			(78	)			39			303			170
Plus: Nonrecurring tax adjustments3			—			—			—			—				—			—			426
Operating earnings		$	43,625		$	29,855		$	34,014		$	42,410			$	35,072		$	107,494		$	97,237
Weighted average diluted shares outstanding			54,633			54,646			51,571			50,441				50,306			53,655			50,230
Diluted EPS		$	0.79		$	0.54		$	0.65		$	0.82			$	0.73		$	1.98		$	1.95
Diluted operating EPS		$	0.80		$	0.55		$	0.66		$	0.84			$	0.70		$	2.00		$	1.94

¹ Severance payments relate to branch restructurings made during the three months ended June 30, 2021.
² During the third quarter of 2021, Thrive’s PPP loan with another bank was 100% forgiven by the Small Business Administration. As a result of our 49% investment in Thrive, the $1.9 million represents our portion of the PPP loan forgiveness. PPP fee income is not taxable and as such has no tax impact.
³ A nonrecurring tax adjustment of $426 thousand recorded in the first quarter of 2021 was due to a true-up of a deferred tax liability.

		For the Quarter Ended																				For the Nine Months Ended
		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Sep 30, 2022				Sep 30, 2021
		(Dollars in thousands)
Pre-Tax, Pre-Provision Operating Earnings
Net income		$	43,322			$	29,626			$	33,470			$	41,506			$	36,835			$	106,418			$	98,078
Plus: Provision for income taxes			12,248				8,079				8,102				10,697				9,195				28,429				26,025
Plus: Provision (benefit) for credit losses and unfunded commitments			7,500				9,000				(7	)			(4,389	)			(448	)			16,493				(441	)
Plus: Severance payments			—				—				—				—				—				—				627
Plus: Loss on sale of debt securities AFS, net			—				—				—				—				188				—				188
Less: Thrive PPP loan forgiveness income			—				—				—				—				1,912								1,912
Plus: M&A expenses			384				295				700				826				—				1,379				—
Pre-tax, pre-provision operating earnings		$	63,454			$	47,000			$	42,265			$	48,640			$	43,858			$	152,719			$	122,565
Average total assets		$	11,460,857			$	10,711,663			$	9,998,922			$	9,788,671			$	9,385,470			$	10,729,169			$	9,217,649
Pre-tax, pre-provision operating return on average assets1			2.20	%			1.76	%			1.71	%			1.97	%			1.85	%			1.90	%			1.78	%
Average total assets		$	11,460,857			$	10,711,663			$	9,998,922			$	9,788,671			$	9,385,470			$	10,729,169			$	9,217,649
Return on average assets1			1.50	%			1.11	%			1.36	%			1.68	%			1.56	%			1.33	%			1.42	%
Operating return on average assets1			1.51				1.12				1.38				1.72				1.48				1.34				1.41
Operating earnings adjusted for amortization of core deposit intangibles
Operating earnings		$	43,625			$	29,855			$	34,014			$	42,410			$	35,072			$	107,494			$	97,237
Adjustments:
Plus: Amortization of core deposit intangibles			2,438				2,438				2,438				2,438				2,438				7,314				7,323
Less: Tax benefit at the statutory rate			512				512				512				512				512				1,536				1,538
Operating earnings adjusted for amortization of core deposit intangibles		$	45,551			$	31,781			$	35,940			$	44,336			$	36,998			$	113,272			$	103,022
Average Tangible Common Equity
Total average stockholders' equity		$	1,453,816			$	1,447,377			$	1,357,448			$	1,301,676			$	1,290,528			$	1,419,900			$	1,256,640
Adjustments:
Less: Average goodwill			(404,452	)			(404,452	)			(404,014	)			(393,220	)			(370,840	)			(404,308	)			(370,840	)
Less: Average core deposit intangibles			(42,230	)			(44,720	)			(47,158	)			(49,596	)			(52,043	)			(41,470	)			(54,458	)
Average tangible common equity		$	1,007,134			$	998,205			$	906,276			$	858,860			$	867,645			$	974,122			$	831,342
Operating return on average tangible common equity1			17.94	%			12.77	%			16.08	%			20.48	%			16.92	%			15.55	%			16.57	%
Efficiency ratio			44.71	%			50.76	%			52.84	%			48.53	%			47.55	%			49.05	%			49.79	%
Net interest income		$	101,040			$	84,480			$	73,040			$	76,741			$	71,276			$	258,560			$	204,042
Noninterest income			13,021				10,378				15,097				16,150				15,627				38,496				42,255
Plus: Loss on sale of AFS securities, net			—				—				—				—				188				—				188
Less: Thrive PPP loan forgiveness income			—				—				—				—				1,912				—				1,912
Operating noninterest income			13,021				10,378				15,097				16,150				13,903				38,496				40,531
Noninterest expense			50,991				48,153				46,572				45,077				41,321				145,716				122,635
Less: Severance payments			—				—				—				—				—				—				627
Less: M&A expenses			384				295				700				826				—				1,379				—
Operating noninterest expense		$	50,607			$	47,858			$	45,872			$	44,251			$	41,321			$	144,337			$	122,008
Operating efficiency ratio			44.37	%			50.45	%			52.05	%			47.64	%			48.51	%			48.59	%			49.89	%

¹ Annualized ratio for quarterly metrics.

FAQ

What were the financial results for Veritex Holdings in Q3 2022?

Veritex Holdings reported a GAAP net income of $43.3 million for Q3 2022, a significant increase from $29.6 million in Q2 2022.

What is the return on average assets for Veritex Holdings?

The return on average assets for Veritex Holdings was 1.50% for Q3 2022.

How much did Veritex Holdings grow its total loans in Q3 2022?

Total loans grew by $594.6 million, equivalent to a 30.0% annualized growth rate in Q3 2022.

When will Veritex Holdings' dividend be paid?

The dividend of $0.20 per share will be paid on November 25, 2022.

What was the efficiency ratio for Veritex Holdings in Q3 2022?

The efficiency ratio for Veritex Holdings in Q3 2022 was 44%.