Veritex Holdings, Inc. (“Veritex” or the “Company”) (Nasdaq:
VBTX), the holding company for Veritex Community Bank, today
announced the results for the quarter ended September 30,
2019. The Company reported net income of $27.4 million, or $0.51
diluted earnings per share (“EPS”), compared to $26.9 million, or
$0.49 diluted EPS, for the quarter ended June 30, 2019 and
$8.9 million, or $0.36 diluted EPS, for the quarter ended
September 30, 2018. Operating net income totaled $28.6
million, or $0.53 diluted operating EPS1, compared to $32.2
million, or $0.59 diluted operating EPS1, for the quarter ended
June 30, 2019 and $10.4 million, or $0.42 diluted operating
EPS1, for the quarter ended September 30, 2018.
C. Malcolm Holland, III, the Company’s Chairman
and Chief Executive Officer said: “I am excited about the 3rd
quarter and year-to-date financial results of Veritex. The
quarterly earnings power of the Company has been consistent
throughout the year. These results have been accomplished while
integrating and converting Green Bank and now much of the execution
risk is behind us. We are focused on rebuilding our growth
momentum, maintaining our asset quality and returning our excess
capital to our shareholders.”
Third Quarter 2019
Highlights:
• Diluted EPS was $0.51 and diluted operating
EPS1 was $0.53 for the third quarter of 2019, resulting in a 26.2%
increase in diluted operating EPS compared to the third quarter of
2018;
• Book value per common share was $23.02 and
tangible book value per common share1 was $14.61 for the third
quarter of 2019, reflecting operating net income, merger expenses,
dividends and share repurchase activity;
• Return on average assets was 1.36%, operating
return on average assets1 was 1.42% and pre-tax, pre-provision
operating return on average assets1 was 2.26% for the third quarter
of 2019;
• Efficiency ratio was 43.67% and operating
efficiency ratio1 was 42.36% for the third quarter of 2019,
reflecting three consecutive quarters of operating efficiency
ratio1 below 44%;
• Increased and extended previously announced
stock buyback program. In the third quarter of 2019, Veritex
repurchased 1,177,241 shares of its outstanding common stock under
its stock buyback program for an aggregate of $29.0 million
resulting in an aggregate of 2,349,103 shares as of
September 30, 2019;
• Declared quarterly cash dividend of $0.125 payable on
November 21, 2019; and
• Received American Banker’s “Best Banks to Work For” for the
sixth consecutive year.
Summary of Financial Data
|
|
QTD |
|
YTD |
|
|
Q3 2019 |
|
Q2 2019 |
|
Q3 2019 |
|
Q3 2018 |
|
|
(Dollars in thousands) |
GAAP |
|
|
|
|
|
|
|
|
Net income |
|
$ |
27,405 |
|
|
$ |
26,876 |
|
|
$ |
61,688 |
|
|
$ |
29,516 |
|
Diluted EPS |
|
0.51 |
|
|
0.49 |
|
|
1.13 |
|
|
1.20 |
|
Return on average assets2 |
|
1.36 |
% |
|
1.36 |
% |
|
1.04 |
% |
|
1.28 |
% |
Efficiency ratio |
|
43.67 |
|
|
51.49 |
|
|
59.42 |
|
|
55.15 |
|
Book value per common share |
|
$ |
23.02 |
|
|
$ |
22.55 |
|
|
$ |
23.02 |
|
|
$ |
21.38 |
|
Non-GAAP1 |
|
|
|
|
|
|
|
|
Operating net income |
|
$ |
28,629 |
|
|
$ |
32,234 |
|
|
$ |
93,542 |
|
|
$ |
33,794 |
|
Diluted operating EPS |
|
0.53 |
|
|
0.59 |
|
|
1.71 |
|
|
1.37 |
|
Pre-tax, pre-provision operating
return on average assets |
|
2.26 |
% |
|
2.22 |
% |
|
2.30 |
% |
|
2.05 |
% |
Operating return on average
assets2 |
|
1.42 |
|
|
1.63 |
|
|
1.58 |
|
|
1.46 |
|
Operating efficiency ratio |
|
42.36 |
|
|
43.66 |
|
|
43.19 |
|
|
49.45 |
|
Return on average tangible common
equity2 |
|
15.15 |
|
|
15.26 |
|
|
11.93 |
|
|
12.36 |
|
Operating return on average
tangible common equity2 |
|
15.78 |
|
|
18.09 |
|
|
17.57 |
|
|
14.09 |
|
Tangible book value per common
share |
|
$ |
14.61 |
|
|
$ |
14.27 |
|
|
$ |
14.61 |
|
|
$ |
14.27 |
|
1 Refer to the section titled “Reconciliation of Non-GAAP
Financial Measures” for a reconciliation of these non-GAAP
financial measures to their most directly comparable GAAP
measures.2 Annualized ratio.
Results of Operations for the Three Months Ended
September 30, 2019
Net Interest Income
For the three months ended September 30, 2019,
net interest income before provision for loan losses was $70.9
million and net interest margin was 3.90% compared to $71.4 million
and 4.00%, respectively, for the three months ended June 30,
2019. The $568 thousand decrease in net interest income was
primarily due to a $1.0 million decrease in interest income on
loans and a $894 thousand increase in interest expense on advances
from the Federal Home Loan Bank (“FHLB”), and was partially offset
by a $1.0 million decrease in interest expense on transaction and
savings deposits. Net interest margin decreased 10 basis points
from the three months ended June 30, 2019 primarily due to a
decrease in yields earned on loan balances and an increase in the
average rates paid on certificate and other time deposits,
partially offset by a decrease in the average rate paid on
interest-bearing demand and savings deposits during the three
months ended September 30, 2019. As a result, the average cost of
interest-bearing deposits was unchanged at 1.79% for the three
months ended September 30, 2019 and June 30, 2019.
Net interest income before provision for loan
losses increased by $41.6 million from $29.3 million to $70.9
million and net interest margin decreased by 9 basis points from
3.99% to 3.90% for the three months ended September 30, 2019 as
compared to the same period in 2018. The increase in net interest
income before provision for loan losses was primarily driven by
higher loan balances and interest income resulting from loans
acquired from Green Bancorp, Inc. (“Green”) and organic loan growth
during the three months ended September 30, 2019 compared to the
three months ended September 30, 2018. For the three months ended
September 30, 2019, average loan balance increased by $3.3 billion
compared to the three months ended September 30, 2018, which
contributed to a $57.7 million increase in interest income. This
was partially offset by an increase in the average rate paid on
interest-bearing liabilities, which resulted in a $12.9 million
increase in interest on deposit accounts. Net interest margin
decreased 9 basis points from the three months ended September 30,
2018 primarily due to an increase in the average rate paid on
interest-bearing liabilities for the three months ended September
30, 2019 compared to the three months ended September 30, 2018. As
a result, the average cost of interest-bearing deposits increased
to 1.79% for the three months ended September 30, 2019 from 1.59%
for the three months ended September 30, 2018.
Noninterest Income
Noninterest income for the three months ended
September 30, 2019 was $8.4 million, an increase of $2.4 million,
or 39.7%, compared to the three months ended June 30, 2019.
The increase was primarily due to a $594 thousand increase in
derivative income and a $245 thousand increase in service charges
and fees on deposit accounts earned during the three months ended
September 30, 2019. Further, the increase was due to a $642
thousand loss on sales of investment securities as a result of the
Company’s repositioning strategy and a $434 thousand decrease in
the value of investments in community development-oriented private
equity funds used for Community Reinvestment Act purposes recorded
for the three months ended June 30, 2019 with no corresponding
loss or decrease in value for the three months ended September 30,
2019.
Compared to the three months ended September 30,
2018, noninterest income for the three months ended September 30,
2019 grew by $6.0 million, or 250.1%. The increase was primarily
due to a $2.9 million increase in service charges and fees on
acquired deposit accounts resulting from our acquisition of Green
deposit accounts and the associated income from these accounts, a
$1.8 million increase in loan fees, a $723 thousand increase in the
gain on sale of Small Business Administration loans and a $578
thousand increase in derivative income earned during the three
months ended September 30, 2019.
Noninterest Expense
Noninterest expense was $34.6 million for the
three months ended September 30, 2019, compared to $39.9 million
for the three months ended June 30, 2019, a decrease of $5.3
million, or 13.2%. The decrease was primarily driven by a $4.8
million decrease in merger and acquisition expenses related to our
acquisition of Green, which were recorded in the second quarter of
2019. Merger and acquisition expenses recognized during the three
months ended September 30, 2019 were primarily related to continued
data processing expenses as a result of our system conversion,
which was completed in the second quarter of 2019, conversion of
our mobile banking platform and severance payments following our
acquisition of Green.
Compared to the three months ended September 30,
2018, noninterest expense for the three months ended September 30,
2019 increased by $16.4 million, or 89.8%. The increase was
primarily driven by a $10.1 million increase in salaries and
employee benefits due to the addition of new Green employees, and a
$1.9 million, $1.6 million, $1.2 million and $857 thousand
increase in amortization of intangibles, data processing and
software expenses, occupancy and equipment expenses and
professional fees, respectively, related to our acquisition of
Green.
Financial Condition
Total loans were $5.9 billion at
September 30, 2019, a decrease of $41.1 million, or 0.7%,
compared to June 30, 2019 due to normal loan activity and
paydowns.
Total deposits were $5.9 billion at
September 30, 2019, a decrease of $287.2 million, or 4.7%,
compared to June 30, 2019. The decrease was primarily the
result of a decrease of $165.8 million in certificates and other
time deposits, and decreases of $117.9 million and $3.5 million in
interest-bearing accounts and noninterest-bearing demand deposits,
respectively, due to normal course of business.
Asset Quality
Allowance for loan losses as a percentage of
loans held for investment, including mortgage warehouse, was 0.45%,
0.42% and 0.73% of total loans at September 30, 2019,
June 30, 2019 and September 30, 2018, respectively. The
allowance for loan losses as a percentage of total loans for each
of the three quarters was determined by evaluating the qualitative
factors around the nature, volume and mix of the loan
portfolio. The increase in the allowance for loan losses as a
percentage of loans held for investment from June 30, 2019 was
primarily attributable to the general provision required from an
increase of loans acquired from Green that were re-underwritten in
the third quarter of 2019. Once an acquired loan undergoes new
underwriting and meets the criteria for a new loan, any remaining
fair value adjustments become interest income and the loan becomes
fully subject to our allowance for loan loss methodology. The
decrease in the allowance for loan losses as a percentage of loans
held for investment from September 30, 2018 was attributable
to our acquisition of Green, as acquired loans are recorded at fair
value. Our allowance for loan losses and remaining purchase
discount on acquired loans as a percentage of loans held for
investment, including mortgage warehouse, was 1.44%, 1.77% and
1.28% of total loans at September 30, 2019, June 30, 2019
and September 30, 2018, respectively.
We recorded a provision for loan losses for the
three months ended September 30, 2019 of $9.7 million compared
to $3.3 million and $3.1 million for the three months ended
June 30, 2019 and September 30, 2018, respectively. The
increase in the recorded provision for loan losses for the three
months ended September 30, 2019 was primarily attributable to
a $6.1 million charge-off related to a commercial loan relationship
acquired from Sovereign Bancshares, Inc. in 2017. The acquired
commercial loan relationship consists of a $7.8 million loan to an
independent oil and gas exploration company that filed for
bankruptcy protection in 2018 and recently entered into a sales
process pursuant to Section 363 of the Bankruptcy Code.
Additionally, the increase in the recorded provision for loan
losses for the three months ended September 30, 2019 was
caused by a $937 thousand increase in specific reserves on certain
non-performing loans and an increase in acquired loans that were
re-underwritten (as discussed above) during the three months ended
September 30, 2019.
Nonperforming assets totaled $17.0 million, or
0.21%, of total assets at September 30, 2019 compared to $43.3
million, or 0.54%, of total assets at June 30, 2019 and $26.1
million, or 0.80%, of total assets at September 30, 2018. The
decrease of $26.3 million compared to June 30, 2019 was driven
by a $11.9 million and $11.7 million decrease in originated
accruing loans 90 days or more past due and acquired accruing loans
90 days or more past due, respectively, as well as $5.9 million
decrease in acquired nonaccrual loans primarily driven by the $6.1
million charge-off discussed above. This decrease was partially
offset by a $2.9 million increase in other real estate owned. For
the quarter ended September 30, 2019, no purchased credit
impaired loans were on non-accrual status.
Dividend Information
On October 21, 2019, Veritex’s Board of
Directors declared a quarterly cash dividend of $0.125 per share on
its outstanding shares of common stock. The dividend will be paid
on or after November 21, 2019 to stockholders of record as of
the close of business on November 7, 2019.
Non-GAAP Financial Measures
Veritex’s management uses certain non-GAAP
(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, tangible book value per common share, operating net income,
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.
Business Combinations Measurement
Period
The measurement period for the Company to
determine the fair values of acquired identifiable assets and
assumed liabilities for Green will end at the earlier of (i) twelve
months from the date of the acquisition or (ii) as soon as the
Company receives the information it was seeking about facts and
circumstances that existed as of the acquisition date or learns
that more information is not obtainable. Provisional estimates have
been recorded for the Green acquisition as independent valuations
have not been finalized. The Company does not expect any
significant differences from estimated values upon completion of
the valuations.
Conference Call
The Company will host an investor conference
call to review the results on Tuesday, October 22, 2019 at 8:30
a.m. Central Time. Participants may pre-register for the call by
visiting https://edge.media-server.com/mmc/p/9ewhfxdv and will
receive a unique PIN, which can be used when dialing in for the
call. This will allow attendees to enter the call immediately.
Alternatively, participants may call toll-free at (877)
703-9880.
The call and corresponding presentation slides
will be webcast live on the home page of the Company's website,
https://veritexholdingsinc.gcs-web.com. An audio replay will be
available one hour after the conclusion of the call at (855)
859-2056, Conference #3966936. This replay, as well as the webcast,
will be available until October 29, 2019.
About Veritex Holdings,
Inc.
Headquartered in Dallas, Texas, Veritex is a
bank holding company that conducts banking activities through its
wholly owned subsidiary, Veritex Community Bank, with locations
throughout the Dallas-Fort Worth metroplex and in the Houston
metropolitan area. Veritex Community Bank is a Texas state
chartered bank regulated by the Texas Department of Banking and the
Board of Governors of the Federal Reserve System. For more
information, visit www.veritexbank.com.
Media Contact:LaVonda
Renfro972-349-6200
Investor Relations:Susan
Caudle972-349-6132Forward-Looking Statements
This earnings release contains certain
“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 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 impact Veritex expects its
acquisition of Green to have on its operations, financial condition
and financial results and Veritex’s expectations about its ability
to successfully integrate the combined businesses of Veritex and
Green and the amount of cost savings and overall operational
efficiencies Veritex expects to realize as a result of the
acquisition of Green. The forward-looking statements in this
earnings release also include statements about the expected payment
date of Veritex’s quarterly cash dividend, 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,” “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. Further, certain factors that could affect
future results and cause actual results to differ materially from
those expressed in the forward-looking statements include, but are
not limited to, the possibility that the businesses of Veritex and
Green will not be integrated successfully, that the cost savings
and any synergies from the acquisition may not be fully realized or
may take longer to realize than expected, disruption from the
acquisition making it more difficult to maintain relationships with
employees, customers or other parties with whom Veritex has (or
Green had) business relationships, diversion of management time on
integration-related issues, the reaction to the acquisition by
Veritex’s and Green’s customers, employees and counterparties and
other factors, many of which are beyond the control of
Veritex. 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, 2018 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 update or
revise any forward-looking statements, whether as a result of new
information, future developments or otherwise. 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
SUBSIDIARYFinancial
Highlights(Unaudited)
|
|
For the Three Months Ended |
|
Nine Months Ended |
|
|
Sep 30, 2019 |
|
Jun 30, 2019 |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Sep 30, 2018 |
|
Sep 30, 2019 |
|
Sep 30, 2018 |
|
|
(Dollars and shares in thousands) |
|
|
|
|
Per Share Data (Common
Stock): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS |
|
$ |
0.52 |
|
|
$ |
0.50 |
|
|
$ |
0.14 |
|
|
$ |
0.41 |
|
|
$ |
0.37 |
|
|
$ |
1.15 |
|
|
$ |
1.22 |
|
Diluted EPS |
|
0.51 |
|
|
0.49 |
|
|
0.13 |
|
|
0.40 |
|
|
0.36 |
|
|
1.13 |
|
|
1.20 |
|
Book value per common share |
|
23.02 |
|
|
22.55 |
|
|
21.88 |
|
|
21.88 |
|
|
21.38 |
|
|
23.02 |
|
|
21.38 |
|
Tangible book value per common share1 |
|
14.61 |
|
|
14.27 |
|
|
13.76 |
|
|
14.74 |
|
|
14.21 |
|
|
14.61 |
|
|
14.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at period end |
|
52,373 |
|
|
53,457 |
|
|
54,236 |
|
|
24,254 |
|
|
24,192 |
|
|
52,373 |
|
|
24,192 |
|
Weighted average basic shares outstanding for the period |
|
52,915 |
|
|
53,969 |
|
|
54,293 |
|
|
24,224 |
|
|
24,176 |
|
|
53,721 |
|
|
24,151 |
|
Weighted average diluted shares outstanding for the period |
|
53,873 |
|
|
54,929 |
|
|
55,439 |
|
|
24,532 |
|
|
24,613 |
|
|
54,633 |
|
|
24,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Performance
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets2 |
|
1.36 |
% |
|
1.36 |
% |
|
0.38 |
% |
|
1.20 |
% |
|
1.10 |
% |
|
1.04 |
% |
|
1.28 |
% |
Return on average equity2 |
|
8.98 |
|
|
8.98 |
|
|
2.52 |
|
|
7.44 |
|
|
6.88 |
|
|
6.88 |
|
|
7.83 |
|
Return on average tangible common equity1, 2 |
|
15.15 |
|
|
15.26 |
|
|
5.09 |
|
|
11.52 |
|
|
10.79 |
|
|
11.93 |
|
|
12.36 |
|
Efficiency ratio |
|
43.67 |
|
|
51.49 |
|
|
82.30 |
|
|
54.27 |
|
|
57.58 |
|
|
59.42 |
|
|
55.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Performance
Metrics - Operating: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted operating EPS1 |
|
0.53 |
|
|
0.59 |
|
|
0.59 |
|
|
0.47 |
|
|
0.42 |
|
|
1.71 |
|
|
1.37 |
|
Pre-tax, pre-provision operating return on average assets1, 2 |
|
2.26 |
|
|
2.22 |
|
|
2.40 |
|
|
1.95 |
|
|
1.98 |
|
|
2.30 |
|
|
2.05 |
|
Operating return on average assets1, 2 |
|
1.42 |
% |
|
1.63 |
% |
|
1.69 |
% |
|
1.40 |
% |
|
1.28 |
% |
|
1.58 |
% |
|
1.46 |
% |
Operating return on average tangible common equity1, 2 |
|
15.78 |
|
|
18.09 |
|
|
18.81 |
|
|
13.37 |
|
|
12.49 |
|
|
17.57 |
|
|
14.09 |
|
Operating efficiency ratio1 |
|
42.36 |
|
|
43.66 |
|
|
43.54 |
|
|
50.65 |
|
|
49.09 |
|
|
43.19 |
|
|
49.45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Veritex Holdings, Inc.
Capital Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average stockholders' equity to average total assets |
|
15.11 |
% |
|
15.13 |
% |
|
15.18 |
% |
|
16.14 |
% |
|
15.92 |
% |
|
15.13 |
% |
|
16.29 |
% |
Tier 1 capital to average assets (leverage) |
|
10.33 |
|
|
10.47 |
|
|
10.57 |
|
|
12.04 |
|
|
11.74 |
|
|
10.35 |
|
|
11.74 |
|
Common equity tier 1 capital |
|
10.82 |
|
|
11.32 |
|
|
11.07 |
|
|
11.80 |
|
|
12.02 |
|
|
10.83 |
|
|
12.02 |
|
Tier 1 capital to risk-weighted assets |
|
11.26 |
|
|
11.77 |
|
|
11.50 |
|
|
12.18 |
|
|
12.43 |
|
|
11.28 |
|
|
12.43 |
|
Total capital to risk-weighted assets |
|
12.26 |
|
|
12.80 |
|
|
12.45 |
|
|
12.98 |
|
|
13.22 |
|
|
12.28 |
|
|
13.22 |
|
Tangible common equity to tangible assets1 |
|
10.17 |
|
|
10.08 |
|
|
10.02 |
|
|
11.78 |
|
|
11.08 |
|
|
10.17 |
|
|
11.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Veritex Bank Capital
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital to average assets (leverage) |
|
10.64 |
% |
|
10.80 |
% |
|
10.65 |
% |
|
10.87 |
% |
|
10.53 |
% |
|
10.65 |
% |
|
10.53 |
% |
Common equity tier 1 capital |
|
11.61 |
% |
|
12.16 |
% |
|
11.61 |
% |
|
11.01 |
% |
|
11.13 |
% |
|
11.63 |
% |
|
11.13 |
% |
Tier 1 capital to risk-weighted assets |
|
11.61 |
% |
|
12.16 |
% |
|
11.61 |
% |
|
11.01 |
% |
|
11.13 |
% |
|
11.63 |
% |
|
11.13 |
% |
Total capital to risk-weighted assets |
|
12.00 |
% |
|
12.54 |
% |
|
11.93 |
% |
|
11.64 |
% |
|
11.75 |
% |
|
12.02 |
% |
|
11.75 |
% |
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.2Annualized ratio.
VERITEX HOLDINGS, INC. AND
SUBSIDIARYFinancial Highlights(In
thousands)
|
|
Sep 30, 2019 |
|
Jun 30, 2019 |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Sep 30, 2018 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
|
(unaudited) |
ASSETS |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
252,592 |
|
|
$ |
265,822 |
|
|
$ |
339,473 |
|
|
$ |
84,449 |
|
|
$ |
261,790 |
|
Securities |
|
1,023,393 |
|
|
1,020,279 |
|
|
950,671 |
|
|
262,695 |
|
|
256,237 |
|
Other investments |
|
89,795 |
|
|
81,088 |
|
|
75,920 |
|
|
23,174 |
|
|
27,769 |
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale |
|
10,715 |
|
|
7,524 |
|
|
8,002 |
|
|
1,258 |
|
|
1,425 |
|
Loans held for investment,
mortgage warehouse |
|
233,577 |
|
|
200,017 |
|
|
114,158 |
|
|
— |
|
|
— |
|
Loans held for investment |
|
5,654,027 |
|
|
5,731,833 |
|
|
5,663,721 |
|
|
2,555,494 |
|
|
2,444,499 |
|
Total loans |
|
5,898,319 |
|
|
5,939,374 |
|
|
5,785,881 |
|
|
2,556,752 |
|
|
2,445,924 |
|
Allowance for loan losses |
|
(26,243 |
) |
|
(24,712 |
) |
|
(21,603 |
) |
|
(19,255 |
) |
|
(17,909 |
) |
Bank-owned life insurance |
|
80,411 |
|
|
79,899 |
|
|
79,397 |
|
|
22,064 |
|
|
21,915 |
|
Bank premises, furniture and
equipment, net |
|
118,449 |
|
|
115,373 |
|
|
119,354 |
|
|
78,409 |
|
|
77,346 |
|
Other real estate owned |
|
4,625 |
|
|
1,748 |
|
|
151 |
|
|
— |
|
|
— |
|
Intangible assets, net |
|
75,363 |
|
|
78,347 |
|
|
81,245 |
|
|
15,896 |
|
|
16,603 |
|
Goodwill |
|
370,463 |
|
|
370,221 |
|
|
368,268 |
|
|
161,447 |
|
|
161,447 |
|
Other assets |
|
75,716 |
|
|
82,667 |
|
|
69,474 |
|
|
22,919 |
|
|
24,724 |
|
Branch assets held for
sale |
|
— |
|
|
— |
|
|
83,516 |
|
|
— |
|
|
— |
|
Total assets |
|
$ |
7,962,883 |
|
|
$ |
8,010,106 |
|
|
$ |
7,931,747 |
|
|
$ |
3,208,550 |
|
|
$ |
3,275,846 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
1,473,126 |
|
|
$ |
1,476,668 |
|
|
$ |
1,439,630 |
|
|
$ |
626,283 |
|
|
$ |
661,754 |
|
Interest-bearing |
|
2,528,293 |
|
|
2,646,154 |
|
|
2,617,117 |
|
|
1,313,161 |
|
|
1,346,264 |
|
Certificates and other time deposits |
|
1,876,427 |
|
|
2,042,266 |
|
|
2,240,968 |
|
|
682,984 |
|
|
648,236 |
|
Total deposits |
|
5,877,846 |
|
|
6,165,088 |
|
|
6,297,715 |
|
|
2,622,428 |
|
|
2,656,254 |
|
Accounts payable and accrued
expenses |
|
45,475 |
|
|
44,414 |
|
|
42,621 |
|
|
5,413 |
|
|
6,875 |
|
Accrued interest payable and
other liabilities |
|
6,054 |
|
|
7,069 |
|
|
6,846 |
|
|
5,361 |
|
|
5,759 |
|
Advances from FHLB |
|
752,907 |
|
|
512,945 |
|
|
252,982 |
|
|
28,019 |
|
|
73,055 |
|
Subordinated debentures and
subordinated notes |
|
72,284 |
|
|
72,486 |
|
|
72,719 |
|
|
16,691 |
|
|
16,691 |
|
Securities sold under
agreements to repurchase |
|
2,787 |
|
|
2,811 |
|
|
2,778 |
|
|
— |
|
|
— |
|
Branch liabilities held for
sale |
|
— |
|
|
— |
|
|
62,381 |
|
|
— |
|
|
— |
|
Total liabilities |
|
6,757,353 |
|
|
6,804,813 |
|
|
6,738,042 |
|
|
2,677,912 |
|
|
2,758,634 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
Common stock |
|
524 |
|
|
535 |
|
|
546 |
|
|
243 |
|
|
242 |
|
Additional paid-in capital |
|
1,114,659 |
|
|
1,112,238 |
|
|
1,109,386 |
|
|
449,427 |
|
|
448,117 |
|
Retained earnings |
|
125,344 |
|
|
104,652 |
|
|
84,559 |
|
|
83,968 |
|
|
74,143 |
|
Unallocated Employee Stock Ownership Plan shares |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(106 |
) |
Accumulated other comprehensive income (loss) |
|
23,837 |
|
|
17,741 |
|
|
7,016 |
|
|
(2,930 |
) |
|
(5,114 |
) |
Treasury stock |
|
(58,834 |
) |
|
(29,873 |
) |
|
(7,802 |
) |
|
(70 |
) |
|
(70 |
) |
Total stockholders’ equity |
|
1,205,530 |
|
|
1,205,293 |
|
|
1,193,705 |
|
|
530,638 |
|
|
517,212 |
|
Total liabilities and stockholders’ equity |
|
$ |
7,962,883 |
|
|
$ |
8,010,106 |
|
|
$ |
7,931,747 |
|
|
$ |
3,208,550 |
|
|
$ |
3,275,846 |
|
VERITEX HOLDINGS, INC. AND
SUBSIDIARYFinancial Highlights(In
thousands, except per share data)
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
Sep 30, 2019 |
|
Jun 30, 2019 |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Sep 30, 2018 |
|
Sep 30, 2019 |
|
Sep 30, 2018 |
Interest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
85,811 |
|
|
$ |
86,786 |
|
|
$ |
85,747 |
|
|
$ |
35,028 |
|
|
$ |
35,074 |
|
|
$ |
258,344 |
|
|
$ |
99,432 |
|
Securities |
|
7,687 |
|
|
7,397 |
|
|
7,232 |
|
|
1,908 |
|
|
1,722 |
|
|
22,316 |
|
|
4,697 |
|
Deposits in financial institutions and Fed Funds sold |
|
1,329 |
|
|
1,372 |
|
|
1,554 |
|
|
833 |
|
|
1,016 |
|
|
4,255 |
|
|
2,316 |
|
Other investments |
|
816 |
|
|
622 |
|
|
691 |
|
|
413 |
|
|
108 |
|
|
2,129 |
|
|
442 |
|
Total interest income |
|
95,643 |
|
|
96,177 |
|
|
95,224 |
|
|
38,182 |
|
|
37,920 |
|
|
287,044 |
|
|
106,887 |
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction and savings deposits |
|
10,381 |
|
|
11,405 |
|
|
10,366 |
|
|
5,412 |
|
|
4,694 |
|
|
32,152 |
|
|
12,187 |
|
Certificates and other time deposits |
|
10,283 |
|
|
10,145 |
|
|
8,792 |
|
|
3,394 |
|
|
3,068 |
|
|
29,220 |
|
|
6,320 |
|
Advances from FHLB |
|
3,081 |
|
|
2,187 |
|
|
2,055 |
|
|
377 |
|
|
630 |
|
|
7,323 |
|
|
1,324 |
|
Subordinated debentures and subordinated notes |
|
1,024 |
|
|
998 |
|
|
1,094 |
|
|
304 |
|
|
250 |
|
|
3,116 |
|
|
727 |
|
Total interest expense |
|
24,769 |
|
|
24,735 |
|
|
22,307 |
|
|
9,487 |
|
|
8,642 |
|
|
71,811 |
|
|
20,558 |
|
Net interest
income |
|
70,874 |
|
|
71,442 |
|
|
72,917 |
|
|
28,695 |
|
|
29,278 |
|
|
215,233 |
|
|
86,329 |
|
Provision for loan losses |
|
9,674 |
|
|
3,335 |
|
|
5,012 |
|
|
1,364 |
|
|
3,057 |
|
|
18,021 |
|
|
5,239 |
|
Net interest income after
provision for loan losses |
|
61,200 |
|
|
68,107 |
|
|
67,905 |
|
|
27,331 |
|
|
26,221 |
|
|
197,212 |
|
|
81,090 |
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges and fees on deposit accounts |
|
3,667 |
|
|
3,422 |
|
|
3,517 |
|
|
832 |
|
|
809 |
|
|
10,606 |
|
|
2,588 |
|
Loan fees |
|
2,252 |
|
|
1,932 |
|
|
1,677 |
|
|
387 |
|
|
410 |
|
|
5,861 |
|
|
945 |
|
Loss on sales of investment securities |
|
— |
|
|
(642 |
) |
|
(772 |
) |
|
(42 |
) |
|
(34 |
) |
|
(1,414 |
) |
|
(22 |
) |
Gain on sales of loans |
|
853 |
|
|
1,104 |
|
|
2,370 |
|
|
1,789 |
|
|
270 |
|
|
4,327 |
|
|
1,267 |
|
Rental income |
|
369 |
|
|
373 |
|
|
368 |
|
|
310 |
|
|
414 |
|
|
1,110 |
|
|
1,343 |
|
Other |
|
1,289 |
|
|
(155 |
) |
|
1,324 |
|
|
343 |
|
|
539 |
|
|
2,458 |
|
|
1,335 |
|
Total noninterest income |
|
8,430 |
|
|
6,034 |
|
|
8,484 |
|
|
3,619 |
|
|
2,408 |
|
|
22,948 |
|
|
7,456 |
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
17,530 |
|
|
17,459 |
|
|
18,885 |
|
|
8,278 |
|
|
7,394 |
|
|
53,874 |
|
|
22,981 |
|
Occupancy and equipment |
|
4,044 |
|
|
4,014 |
|
|
4,129 |
|
|
2,412 |
|
|
2,890 |
|
|
12,187 |
|
|
8,267 |
|
Professional and regulatory fees |
|
2,750 |
|
|
2,814 |
|
|
3,418 |
|
|
1,889 |
|
|
1,893 |
|
|
8,982 |
|
|
5,525 |
|
Data processing and software expense |
|
2,252 |
|
|
2,309 |
|
|
1,924 |
|
|
888 |
|
|
697 |
|
|
6,485 |
|
|
2,214 |
|
Marketing |
|
708 |
|
|
961 |
|
|
619 |
|
|
570 |
|
|
306 |
|
|
2,288 |
|
|
1,213 |
|
Amortization of intangibles |
|
2,712 |
|
|
2,719 |
|
|
2,760 |
|
|
835 |
|
|
798 |
|
|
8,191 |
|
|
2,632 |
|
Telephone and communications |
|
361 |
|
|
625 |
|
|
395 |
|
|
223 |
|
|
236 |
|
|
1,381 |
|
|
1,076 |
|
Merger and acquisition expense |
|
1,035 |
|
|
5,790 |
|
|
31,217 |
|
|
1,150 |
|
|
2,692 |
|
|
38,042 |
|
|
4,070 |
|
Other |
|
3,238 |
|
|
3,205 |
|
|
3,646 |
|
|
1,293 |
|
|
1,340 |
|
|
10,089 |
|
|
3,743 |
|
Total noninterest expense |
|
34,630 |
|
|
39,896 |
|
|
66,993 |
|
|
17,538 |
|
|
18,246 |
|
|
141,519 |
|
|
51,721 |
|
Net income from
operations |
|
35,000 |
|
|
34,245 |
|
|
9,396 |
|
|
13,412 |
|
|
10,383 |
|
|
78,641 |
|
|
36,825 |
|
Income tax expense |
|
7,595 |
|
|
7,369 |
|
|
1,989 |
|
|
3,587 |
|
|
1,448 |
|
|
16,953 |
|
|
7,309 |
|
Net income |
|
$ |
27,405 |
|
|
$ |
26,876 |
|
|
$ |
7,407 |
|
|
$ |
9,825 |
|
|
$ |
8,935 |
|
|
$ |
61,688 |
|
|
$ |
29,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS |
|
$ |
0.52 |
|
|
$ |
0.50 |
|
|
$ |
0.14 |
|
|
$ |
0.41 |
|
|
$ |
0.37 |
|
|
$ |
1.15 |
|
|
$ |
1.22 |
|
Diluted EPS |
|
$ |
0.51 |
|
|
$ |
0.49 |
|
|
$ |
0.13 |
|
|
$ |
0.40 |
|
|
$ |
0.36 |
|
|
$ |
1.13 |
|
|
$ |
1.20 |
|
Weighted average basic shares
outstanding |
|
52,915 |
|
|
53,969 |
|
|
54,293 |
|
|
24,224 |
|
|
24,176 |
|
|
53,721 |
|
|
24,151 |
|
Weighted average diluted shares
outstanding |
|
53,873 |
|
|
54,929 |
|
|
55,439 |
|
|
24,532 |
|
|
24,613 |
|
|
54,633 |
|
|
24,587 |
|
VERITEX HOLDINGS, INC. AND
SUBSIDIARYFinancial Highlights(In
thousands except percentages)
|
|
For the Three Months Ended |
|
|
September 30, 2019 |
|
June 30, 2019 |
|
September 30, 2018 |
|
|
AverageOutstandingBalance |
|
InterestEarned/InterestPaid |
|
AverageYield/Rate |
|
AverageOutstandingBalance |
|
InterestEarned/InterestPaid |
|
AverageYield/Rate |
|
AverageOutstandingBalance |
|
InterestEarned/InterestPaid |
|
AverageYield/Rate |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans1 |
|
$ |
5,702,696 |
|
|
$ |
84,022 |
|
|
5.85 |
% |
|
$ |
5,762,257 |
|
|
$ |
85,030 |
|
|
5.92 |
% |
|
$ |
2,432,095 |
|
|
$ |
35,074 |
|
|
5.72 |
% |
Loans held for investment, mortgage warehouse |
|
182,793 |
|
|
1,789 |
|
|
3.88 |
|
|
154,586 |
|
|
1,756 |
|
|
4.56 |
|
|
— |
|
|
— |
|
|
— |
|
Securities |
|
1,022,289 |
|
|
7,687 |
|
|
2.98 |
|
|
956,160 |
|
|
7,397 |
|
|
3.10 |
|
|
254,242 |
|
|
1,722 |
|
|
2.69 |
|
Interest-bearing deposits in other banks |
|
234,087 |
|
|
1,329 |
|
|
2.25 |
|
|
228,461 |
|
|
1,372 |
|
|
2.41 |
|
|
203,750 |
|
|
1,016 |
|
|
1.98 |
|
Other investments2 |
|
71,901 |
|
|
816 |
|
|
4.50 |
|
|
59,508 |
|
|
622 |
|
|
4.19 |
|
|
20,044 |
|
|
108 |
|
|
2.14 |
|
Total interest-earning assets |
|
7,213,766 |
|
|
95,643 |
|
|
5.26 |
|
|
7,160,972 |
|
|
96,177 |
|
|
5.39 |
|
|
2,910,131 |
|
|
37,920 |
|
|
5.17 |
|
Allowance for loan losses |
|
(22,539 |
) |
|
|
|
|
|
(23,891 |
) |
|
|
|
|
|
(16,160 |
) |
|
|
|
|
Noninterest-earning assets |
|
818,150 |
|
|
|
|
|
|
800,238 |
|
|
|
|
|
|
331,826 |
|
|
|
|
|
Total assets |
|
$ |
8,009,377 |
|
|
|
|
|
|
$ |
7,937,319 |
|
|
|
|
|
|
$ |
3,225,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand and savings deposits |
|
$ |
2,621,701 |
|
|
$ |
10,381 |
|
|
1.57 |
% |
|
$ |
2,713,735 |
|
|
$ |
11,405 |
|
|
1.69 |
% |
|
$ |
1,278,797 |
|
|
$ |
4,694 |
|
|
1.46 |
% |
Certificates and other time deposits |
|
1,953,084 |
|
|
10,283 |
|
|
2.09 |
|
|
2,107,567 |
|
|
10,145 |
|
|
1.93 |
|
|
655,035 |
|
|
3,068 |
|
|
1.86 |
|
Advances from FHLB |
|
632,754 |
|
|
3,081 |
|
|
1.93 |
|
|
334,926 |
|
|
2,187 |
|
|
2.62 |
|
|
120,114 |
|
|
630 |
|
|
2.08 |
|
Subordinated debentures and subordinated notes |
|
74,869 |
|
|
1,024 |
|
|
5.43 |
|
|
75,252 |
|
|
998 |
|
|
5.32 |
|
|
16,690 |
|
|
250 |
|
|
5.94 |
|
Total interest-bearing
liabilities |
|
5,282,408 |
|
|
24,769 |
|
|
1.86 |
|
|
5,231,480 |
|
|
24,735 |
|
|
1.90 |
|
|
2,070,636 |
|
|
8,642 |
|
|
1.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
1,467,127 |
|
|
|
|
|
|
1,456,538 |
|
|
|
|
|
|
635,952 |
|
|
|
|
|
Other liabilities |
|
49,695 |
|
|
|
|
|
|
48,669 |
|
|
|
|
|
|
11,750 |
|
|
|
|
|
Total liabilities |
|
6,799,230 |
|
|
|
|
|
|
6,736,687 |
|
|
|
|
|
|
2,718,338 |
|
|
|
|
|
Stockholders’ equity |
|
1,210,147 |
|
|
|
|
|
|
1,200,632 |
|
|
|
|
|
|
514,876 |
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
8,009,377 |
|
|
|
|
|
|
$ |
7,937,319 |
|
|
|
|
|
|
$ |
3,233,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread3 |
|
|
|
|
|
3.40 |
% |
|
|
|
|
|
3.49 |
% |
|
|
|
|
|
3.51 |
% |
Net interest income |
|
|
|
$ |
70,874 |
|
|
|
|
|
|
$ |
71,442 |
|
|
|
|
|
|
$ |
29,278 |
|
|
|
Net interest margin4 |
|
|
|
|
|
3.90 |
% |
|
|
|
|
|
4.00 |
% |
|
|
|
|
|
3.99 |
% |
1 Includes average outstanding balances of loans
held for sale of $8,525, $8,140 and $1,091 for the three months
ended September 30, 2019, June 30, 2019, and
September 30, 2018, respectively, and average balances of
loans held for investment, excluding mortgage warehouse.2 The
Company historically reported dividend income in other noninterest
income and has re-classed $102 of dividend income into other
investments as of September 30, 2018 in order to align with
industry peers for comparability purposes.3 Net interest rate
spread is the average yield on interest-earning assets minus the
average rate on interest-bearing liabilities.4 Net interest margin
is equal to net interest income divided by average interest-earning
assets.
VERITEX HOLDINGS, INC. AND
SUBSIDIARYFinancial Highlights(In
thousands except percentages)
|
|
For the Nine Months Ended |
|
|
September 30, 2019 |
|
September 30, 2018 |
|
|
AverageOutstandingBalance |
|
InterestEarned/InterestPaid |
|
AverageYield/Rate |
|
AverageOutstandingBalance |
|
InterestEarned/InterestPaid |
|
AverageYield/Rate |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans1 |
|
$ |
5,731,902 |
|
|
$ |
253,247 |
|
|
5.91 |
% |
|
$ |
2,342,797 |
|
|
$ |
99,432 |
|
|
5.67 |
% |
Loans held for investment, mortgage warehouse |
|
152,617 |
|
|
5,097 |
|
|
4.47 |
|
|
— |
|
|
— |
|
|
— |
|
Securities |
|
968,616 |
|
|
22,316 |
|
|
3.08 |
|
|
241,764 |
|
|
4,697 |
|
|
2.60 |
|
Interest-bearing deposits in other banks |
|
242,119 |
|
|
4,255 |
|
|
2.40 |
|
|
168,329 |
|
|
2,316 |
|
|
1.84 |
|
Other investments2 |
|
56,438 |
|
|
2,129 |
|
|
5.04 |
|
|
16,390 |
|
|
442 |
|
|
3.61 |
|
Total interest-earning assets |
|
7,151,692 |
|
|
287,044 |
|
|
5.37 |
|
|
2,769,280 |
|
|
106,887 |
|
|
5.16 |
|
Allowance for loan losses |
|
(22,173 |
) |
|
|
|
|
|
(14,309 |
) |
|
|
|
|
Noninterest-earning assets |
|
799,509 |
|
|
|
|
|
|
340,136 |
|
|
|
|
|
Total assets |
|
$ |
7,929,028 |
|
|
|
|
|
|
$ |
3,095,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand and savings deposits |
|
$ |
2,657,195 |
|
|
$ |
32,152 |
|
|
1.62 |
% |
|
$ |
1,256,726 |
|
|
$ |
12,187 |
|
|
1.30 |
% |
Certificates and other time deposits |
|
2,067,032 |
|
|
29,220 |
|
|
1.89 |
|
|
591,953 |
|
|
6,320 |
|
|
1.43 |
|
Advances from FHLB |
|
427,306 |
|
|
7,323 |
|
|
2.29 |
|
|
99,138 |
|
|
1,324 |
|
|
1.79 |
|
Subordinated debentures and subordinated notes |
|
75,298 |
|
|
3,116 |
|
|
5.53 |
|
|
16,768 |
|
|
727 |
|
|
5.80 |
|
Total interest-bearing
liabilities |
|
5,226,831 |
|
|
71,811 |
|
|
1.84 |
|
|
1,964,585 |
|
|
20,558 |
|
|
1.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
1,459,904 |
|
|
|
|
|
|
614,107 |
|
|
|
|
|
Other liabilities |
|
42,853 |
|
|
|
|
|
|
12,310 |
|
|
|
|
|
Total liabilities |
|
6,729,588 |
|
|
|
|
|
|
2,591,002 |
|
|
|
|
|
Stockholders’ equity |
|
1,199,440 |
|
|
|
|
|
|
504,105 |
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
7,929,028 |
|
|
|
|
|
|
$ |
3,095,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread3 |
|
|
|
|
|
3.53 |
% |
|
|
|
|
|
3.76 |
% |
Net interest income |
|
|
|
$ |
215,233 |
|
|
|
|
|
|
$ |
86,329 |
|
|
|
Net interest margin4 |
|
|
|
|
|
4.02 |
% |
|
|
|
|
|
4.17 |
% |
1 Includes average outstanding balances of loans
held for sale of $8,127 and $1,258 for the nine months ended
September 30, 2019 and September 30, 2018, respectively, and
average balances of loans held for investment, excluding mortgage
warehouse.2 The Company historically reported dividend income in
other noninterest income and has re-classed $427 of dividend income
into other investments as of September 30, 2018 in order to
align with industry peers for comparability purposes.3 Net interest
rate spread is the average yield on interest-earning assets minus
the average rate on interest-bearing liabilities.4 Net interest
margin is equal to net interest income divided by average
interest-earning assets.
VERITEX HOLDINGS, INC. AND
SUBSIDIARYFinancial Highlights
Yield Trend
|
|
For the Three Months Ended |
|
|
September 30, 2019 |
|
June 30, 2019 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
Average yield on interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
Loans1 |
|
5.85 |
% |
|
5.92 |
% |
|
5.96 |
% |
|
5.55 |
% |
|
5.72 |
% |
Loans held for investment,
mortgage warehouse |
|
3.88 |
|
|
4.56 |
|
|
5.26 |
|
|
— |
|
|
— |
|
Securities |
|
2.98 |
|
|
3.10 |
|
|
3.17 |
|
|
2.88 |
|
|
2.69 |
|
Interest-bearing deposits in
other banks |
|
2.25 |
|
|
2.41 |
|
|
2.39 |
|
|
2.41 |
|
|
1.98 |
|
Other investments |
|
4.50 |
|
|
4.19 |
|
|
4.92 |
|
|
6.36 |
|
|
2.14 |
|
Total interest-earning assets |
|
5.26 |
% |
|
5.39 |
% |
|
5.44 |
% |
|
5.17 |
% |
|
5.17 |
% |
|
|
|
|
|
|
|
|
|
|
|
Average rate on interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand and
savings deposits |
|
1.57 |
% |
|
1.69 |
% |
|
1.64 |
% |
|
1.60 |
% |
|
1.46 |
% |
Certificates and other time
deposits |
|
2.09 |
|
|
1.93 |
|
|
1.59 |
|
|
2.05 |
|
|
1.86 |
|
Advances from FHLB |
|
1.93 |
|
|
2.62 |
|
|
2.68 |
|
|
2.85 |
|
|
2.08 |
|
Subordinated debentures and
subordinated notes |
|
5.43 |
|
|
5.32 |
|
|
5.85 |
|
|
7.23 |
|
|
5.94 |
|
Total interest-bearing liabilities |
|
1.86 |
% |
|
1.90 |
% |
|
1.74 |
% |
|
1.82 |
% |
|
1.66 |
% |
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread2 |
|
3.40 |
% |
|
3.49 |
% |
|
3.70 |
% |
|
3.35 |
% |
|
3.51 |
% |
Net interest margin3 |
|
3.90 |
% |
|
4.00 |
% |
|
4.17 |
% |
|
3.89 |
% |
|
3.99 |
% |
1Includes average outstanding balances of
loans held for sale of $8,525, $8,140, $7,709, $1,019 and $1,091
for the three months ended September 30, 2019, June 30,
2019, March 31, 2019, December 31, 2018 and
September 30, 2018, respectively, and average balances of
loans held for investment, excluding mortgage warehouse. 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 Three Months Ended |
|
|
September 30, 2019 |
|
June 30, 2019 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
Average cost of interest-bearing deposits |
|
1.79 |
% |
|
1.79 |
% |
|
1.62 |
% |
|
1.75 |
% |
|
1.59 |
% |
Average costs of total deposits,
including noninterest-bearing |
|
1.36 |
|
|
1.38 |
|
|
1.25 |
|
|
1.32 |
|
|
1.20 |
|
VERITEX HOLDINGS, INC. AND
SUBSIDIARYFinancial Highlights(In
thousands except percentages)
Loans Held for Investment (“LHI”) and Deposit Portfolio
Composition
|
|
September 30, 2019 |
|
June 30, 2019 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
|
(Dollars in thousands) |
Loans Held for
Investment2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated
Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
1,027,433 |
|
|
33.4 |
% |
|
$ |
878,970 |
|
|
32.2 |
% |
|
$ |
836,792 |
|
|
33.3 |
% |
|
$ |
697,906 |
|
|
33.0 |
% |
|
$ |
646,978 |
|
|
33.3 |
% |
Real Estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner occupied commercial |
|
253,043 |
|
|
8.2 |
|
|
229,243 |
|
|
8.4 |
|
|
215,088 |
|
|
8.6 |
|
|
188,847 |
|
|
8.9 |
|
|
179,422 |
|
|
9.2 |
|
Commercial |
|
877,669 |
|
|
28.5 |
|
|
800,506 |
|
|
29.3 |
|
|
752,628 |
|
|
30.0 |
|
|
636,200 |
|
|
30.0 |
|
|
592,959 |
|
|
30.5 |
|
Construction and land |
|
490,389 |
|
|
15.9 |
|
|
405,323 |
|
|
14.8 |
|
|
364,812 |
|
|
14.5 |
|
|
303,315 |
|
|
14.3 |
|
|
254,258 |
|
|
13.1 |
|
Farmland |
|
7,986 |
|
|
0.3 |
|
|
15,944 |
|
|
0.6 |
|
|
8,247 |
|
|
0.3 |
|
|
7,898 |
|
|
0.4 |
|
|
8,181 |
|
|
0.5 |
|
1-4 family residential |
|
315,839 |
|
|
10.3 |
|
|
290,808 |
|
|
10.7 |
|
|
274,880 |
|
|
10.9 |
|
|
235,092 |
|
|
11.0 |
|
|
210,702 |
|
|
10.9 |
|
Multi-family residential |
|
95,258 |
|
|
3.1 |
|
|
101,973 |
|
|
3.7 |
|
|
48,777 |
|
|
1.9 |
|
|
47,371 |
|
|
2.2 |
|
|
46,240 |
|
|
2.3 |
|
Consumer |
|
8,471 |
|
|
0.2 |
|
|
7,714 |
|
|
0.3 |
|
|
8,587 |
|
|
0.3 |
|
|
4,304 |
|
|
0.2 |
|
|
3,123 |
|
|
0.2 |
|
Total originated LHI |
|
$ |
3,076,088 |
|
|
100 |
% |
|
$ |
2,730,481 |
|
|
100 |
% |
|
$ |
2,509,811 |
|
|
100 |
% |
|
$ |
2,120,933 |
|
|
100 |
% |
|
$ |
1,941,863 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired
Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
683,823 |
|
|
26.5 |
% |
|
$ |
909,074 |
|
|
30.3 |
% |
|
$ |
975,878 |
|
|
30.9 |
% |
|
$ |
62,866 |
|
|
14.4 |
% |
|
$ |
76,162 |
|
|
15.3 |
% |
Real Estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner occupied commercial |
|
463,087 |
|
|
18.0 |
|
|
517,525 |
|
|
17.2 |
|
|
530,026 |
|
|
16.8 |
|
|
132,432 |
|
|
30.5 |
|
|
133,865 |
|
|
26.6 |
|
Commercial |
|
832,841 |
|
|
32.3 |
|
|
927,019 |
|
|
30.9 |
|
|
948,815 |
|
|
30.1 |
|
|
145,553 |
|
|
33.5 |
|
|
162,842 |
|
|
32.4 |
|
Construction and land |
|
133,233 |
|
|
5.2 |
|
|
138,527 |
|
|
4.6 |
|
|
149,897 |
|
|
4.8 |
|
|
21,548 |
|
|
5.0 |
|
|
39,885 |
|
|
7.9 |
|
Farmland |
|
— |
|
|
— |
|
|
1,528 |
|
|
0.1 |
|
|
1,781 |
|
|
0.1 |
|
|
2,630 |
|
|
0.6 |
|
|
2,672 |
|
|
0.5 |
|
1-4 family residential |
|
243,471 |
|
|
9.4 |
|
|
266,248 |
|
|
8.9 |
|
|
295,719 |
|
|
9.4 |
|
|
62,825 |
|
|
14.5 |
|
|
79,106 |
|
|
15.7 |
|
Multi-family residential |
|
211,708 |
|
|
8.2 |
|
|
228,904 |
|
|
7.6 |
|
|
238,936 |
|
|
7.6 |
|
|
3,914 |
|
|
0.9 |
|
|
4,077 |
|
|
0.8 |
|
Consumer |
|
9,642 |
|
|
0.4 |
|
|
12,848 |
|
|
0.4 |
|
|
13,180 |
|
|
0.4 |
|
|
2,808 |
|
|
0.6 |
|
|
4,043 |
|
|
0.8 |
|
Total acquired LHI |
|
$ |
2,577,805 |
|
|
100 |
% |
|
$ |
3,001,673 |
|
|
100 |
% |
|
$ |
3,154,232 |
|
|
100 |
% |
|
$ |
434,576 |
|
|
100 |
% |
|
$ |
502,652 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage warehouse |
|
233,577 |
|
|
|
|
200,017 |
|
|
|
|
114,157 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total LHI1 |
|
$ |
5,887,470 |
|
|
|
|
$ |
5,932,171 |
|
|
|
|
$ |
5,778,200 |
|
|
|
|
$ |
2,555,509 |
|
|
|
|
$ |
2,444,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
1,473,126 |
|
|
25.1 |
% |
|
$ |
1,476,668 |
|
|
24.0 |
% |
|
$ |
1,439,630 |
|
|
22.9 |
% |
|
$ |
626,283 |
|
|
23.8 |
% |
|
$ |
661,754 |
|
|
24.9 |
% |
Interest-bearing transaction |
|
373,997 |
|
|
6.4 |
|
|
373,982 |
|
|
6.1 |
|
|
334,868 |
|
|
5.3 |
|
|
146,969 |
|
|
5.6 |
|
|
144,328 |
|
|
5.4 |
|
Money market |
|
2,066,315 |
|
|
35.2 |
|
|
2,178,274 |
|
|
35.3 |
|
|
2,169,049 |
|
|
34.4 |
|
|
1,133,045 |
|
|
43.2 |
|
|
1,168,262 |
|
|
44.0 |
|
Savings |
|
87,981 |
|
|
1.5 |
|
|
93,898 |
|
|
1.5 |
|
|
113,200 |
|
|
1.8 |
|
|
33,147 |
|
|
1.3 |
|
|
33,674 |
|
|
1.3 |
|
Certificates and other time deposits |
|
1,876,427 |
|
|
31.8 |
|
|
2,042,266 |
|
|
33.1 |
|
|
2,240,968 |
|
|
35.6 |
|
|
682,984 |
|
|
26.1 |
|
|
648,236 |
|
|
24.4 |
|
Total deposits |
|
$ |
5,877,846 |
|
|
100 |
% |
|
$ |
6,165,088 |
|
|
100 |
% |
|
$ |
6,297,715 |
|
|
100 |
% |
|
$ |
2,622,428 |
|
|
100 |
% |
|
$ |
2,656,254 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan to Deposit Ratio |
|
100.2 |
% |
|
|
|
96.2 |
% |
|
|
|
91.8 |
% |
|
|
|
97.4 |
% |
|
|
|
92.0 |
% |
|
|
1 Total LHI does not include deferred (costs) fees of ($134
thousand) at September 30, 2019, $321 thousand at
June 30, 2019, $321 thousand at March 31, 2019, $15
thousand at December 31, 2018 and $16 thousand at
September 30, 2018.2 LHI and deposit portfolio composition
exclude assets and liabilities held for sale as of March 31,
2019.
VERITEX HOLDINGS, INC. AND
SUBSIDIARYFinancial Highlights(In
thousands except percentages)
Asset Quality
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
Sep 30, 2019 |
|
Jun 30, 2019 |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Sep 30, 2018 |
|
Sep 30, 2019 |
|
Sep 30, 2018 |
|
|
(Dollars in thousands) |
Nonperforming Assets
(“NPAs”): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated nonaccrual loans1 |
$ |
5,081 |
|
|
$ |
4,751 |
|
|
$ |
5,739 |
|
|
$ |
5,358 |
|
|
$ |
2,307 |
|
|
$ |
5,081 |
|
|
$ |
2,307 |
|
Acquired nonaccrual loans1 |
5,091 |
|
|
10,982 |
|
|
12,944 |
|
|
19,387 |
|
|
19,515 |
|
|
5,091 |
|
|
19,515 |
|
Originated accruing loans 90 or more days past due2 |
815 |
|
|
12,738 |
|
|
2,329 |
|
|
— |
|
|
4,302 |
|
|
815 |
|
|
4,302 |
|
Acquired accruing loans 90 or more days past due2 |
1,379 |
|
|
13,036 |
|
|
1,974 |
|
|
— |
|
|
— |
|
|
1,379 |
|
|
— |
|
Total nonperforming loans held for investment (“NPLs”) |
12,366 |
|
|
41,507 |
|
|
22,986 |
|
|
24,745 |
|
|
26,124 |
|
|
12,366 |
|
|
26,124 |
|
Other real estate owned |
4,625 |
|
|
1,748 |
|
|
151 |
|
|
— |
|
|
— |
|
|
4,625 |
|
|
— |
|
Total NPAs |
$ |
16,991 |
|
|
$ |
43,255 |
|
|
$ |
23,137 |
|
|
$ |
24,745 |
|
|
$ |
26,124 |
|
|
$ |
16,991 |
|
|
$ |
26,124 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge-offs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
$ |
— |
|
|
$ |
(157 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(157 |
) |
|
$ |
— |
|
Commercial |
(8,101 |
) |
|
(143 |
) |
|
(2,654 |
) |
|
(26 |
) |
|
— |
|
|
(10,898 |
) |
|
(149 |
) |
Consumer |
(113 |
) |
|
(30 |
) |
|
(74 |
) |
|
— |
|
|
— |
|
|
(217 |
) |
|
(22 |
) |
Total charge-offs |
(8,214 |
) |
|
(330 |
) |
|
(2,728 |
) |
|
(26 |
) |
|
— |
|
|
(11,272 |
) |
|
(171 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recoveries: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
— |
|
|
54 |
|
|
8 |
|
|
— |
|
|
— |
|
|
62 |
|
|
— |
|
Commercial |
71 |
|
|
10 |
|
|
10 |
|
|
7 |
|
|
10 |
|
|
91 |
|
|
34 |
|
Consumer |
— |
|
|
40 |
|
|
46 |
|
|
— |
|
|
— |
|
|
86 |
|
|
— |
|
Total recoveries |
71 |
|
|
104 |
|
|
64 |
|
|
7 |
|
|
10 |
|
|
239 |
|
|
34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs |
$ |
(8,143 |
) |
|
$ |
(226 |
) |
|
$ |
(2,664 |
) |
|
$ |
(19 |
) |
|
$ |
10 |
|
|
$ |
(11,033 |
) |
|
$ |
(137 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses
(“ALLL”) at end of period |
$ |
26,243 |
|
|
$ |
24,712 |
|
|
$ |
21,603 |
|
|
$ |
19,255 |
|
|
$ |
17,909 |
|
|
$ |
26,243 |
|
|
$ |
17,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining purchase discount
(“PD”) on acquired loans3 |
$ |
58,503 |
|
|
$ |
80,365 |
|
|
$ |
83,365 |
|
|
$ |
12,098 |
|
|
$ |
13,389 |
|
|
58,503 |
|
|
13,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
NPAs to total assets |
0.21 |
% |
|
0.54 |
% |
|
0.29 |
% |
|
0.77 |
% |
|
0.80 |
% |
|
0.21 |
% |
|
0.80 |
% |
NPLs to total LHI |
0.21 |
|
|
0.70 |
|
|
0.40 |
|
|
0.97 |
|
|
1.07 |
|
|
0.21 |
|
|
1.07 |
|
ALLL to total LHI |
0.45 |
|
|
0.42 |
|
|
0.37 |
|
|
0.75 |
|
|
0.73 |
|
|
0.45 |
|
|
0.73 |
|
ALLL and remaining PD on acquired loans to total LHI3 |
1.44 |
|
|
1.77 |
|
|
1.82 |
|
|
1.23 |
|
|
1.28 |
|
|
1.44 |
|
|
1.28 |
|
Net charge-offs to average loans outstanding |
0.14 |
|
|
— |
|
|
0.05 |
|
|
— |
|
|
— |
|
|
0.19 |
|
|
0.01 |
|
1 The Company historically reported in the acquired nonaccrual
loans line item in the table above only acquired purchased credit
impaired (“PCI”) loans that were deemed to be on nonaccrual status
subsequent to the respective acquisition date. The Company has
reclassed $3,158, $5,040 and $2,485 for the three months ended June
30, 2019, March 31, 2019 and December 31, 2018, respectively, and
$2,357 for the three and nine months ended September 30, 2018 of
acquired non-PCI loans deemed to be on nonaccrual status subsequent
to acquisition date from the originated nonaccrual line item into
the acquired nonaccrual loans line item. As a result, both acquired
PCI loans and acquired non-PCI loans are reflected in the acquired
nonaccrual loans line item in order to align with industry peers
for comparability purposes.2 Accruing loans greater than 90 days
past due exclude PCI loans greater than 90 days past due.3
Remaining PD on acquired loans includes non-accretable and
accretable purchase discount on purchased performing and purchased
credit impaired loans for each quarter presented in the table.
VERITEX HOLDINGS, INC. AND
SUBSIDIARYReconciliation 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 andinvestment 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, 2019 |
|
Jun 30, 2019 |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Sep 30, 2018 |
|
|
(Dollars in thousands, except per share data) |
Tangible Common
Equity |
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
$ |
1,205,530 |
|
|
$ |
1,205,293 |
|
|
$ |
1,193,705 |
|
|
$ |
530,638 |
|
|
$ |
517,212 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
(370,463 |
) |
|
(370,221 |
) |
|
(368,268 |
) |
|
(161,447 |
) |
|
(161,447 |
) |
Core deposit intangibles |
|
(70,014 |
) |
|
(72,465 |
) |
|
(74,916 |
) |
|
(11,675 |
) |
|
(12,107 |
) |
Tangible common equity |
|
$ |
765,053 |
|
|
$ |
762,607 |
|
|
$ |
750,521 |
|
|
$ |
357,516 |
|
|
$ |
343,658 |
|
Common shares outstanding |
|
52,373 |
|
|
53,457 |
|
|
54,236 |
|
|
24,254 |
|
|
24,192 |
|
|
|
|
|
|
|
|
|
|
|
|
Book value per common share |
|
$ |
23.02 |
|
|
$ |
22.55 |
|
|
$ |
21.88 |
|
|
$ |
21.88 |
|
|
$ |
21.38 |
|
Tangible book value per common
share |
|
$ |
14.61 |
|
|
$ |
14.27 |
|
|
$ |
13.76 |
|
|
$ |
14.74 |
|
|
$ |
14.21 |
|
VERITEX HOLDINGS, INC. AND
SUBSIDIARYReconciliation 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, 2019 |
|
Jun 30, 2019 |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Sep 30, 2018 |
|
|
(Dollars in thousands) |
Tangible Common
Equity |
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
$ |
1,205,530 |
|
|
$ |
1,205,293 |
|
|
$ |
1,193,705 |
|
|
$ |
530,638 |
|
|
$ |
517,212 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
(370,463 |
) |
|
(370,221 |
) |
|
(368,268 |
) |
|
(161,447 |
) |
|
(161,447 |
) |
Core deposit intangibles |
|
(70,014 |
) |
|
(72,465 |
) |
|
(74,916 |
) |
|
(11,675 |
) |
|
(12,107 |
) |
Tangible common equity |
|
$ |
765,053 |
|
|
$ |
762,607 |
|
|
$ |
750,521 |
|
|
$ |
357,516 |
|
|
$ |
343,658 |
|
Tangible
Assets |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
7,962,883 |
|
|
$ |
8,010,106 |
|
|
$ |
7,931,747 |
|
|
$ |
3,208,550 |
|
|
$ |
3,275,846 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
(370,463 |
) |
|
(370,221 |
) |
|
(368,268 |
) |
|
(161,447 |
) |
|
(161,447 |
) |
Core deposit intangibles |
|
(70,014 |
) |
|
(72,465 |
) |
|
(74,916 |
) |
|
(11,675 |
) |
|
(12,107 |
) |
Tangible Assets |
|
$ |
7,522,406 |
|
|
$ |
7,567,420 |
|
|
$ |
7,488,563 |
|
|
$ |
3,035,428 |
|
|
$ |
3,102,292 |
|
Tangible Common Equity
to Tangible Assets |
|
10.17 |
% |
|
10.08 |
% |
|
10.02 |
% |
|
11.78 |
% |
|
11.08 |
% |
VERITEX HOLDINGS, INC. AND
SUBSIDIARYReconciliation 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) return as net income
available for common stockholders adjusted for amortization of core
deposit intangibles 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 Three Months Ended |
|
For the Nine Months Ended |
|
|
Sep 30, 2019 |
|
Jun 30, 2019 |
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
Sep 30, 2018 |
|
Sep 30, 2019 |
|
Sep 30, 2018 |
|
|
(Dollars in thousands) |
|
|
|
|
Net income available for
common stockholders adjusted for amortization of core deposit
intangibles |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
27,405 |
|
|
$ |
26,876 |
|
|
$ |
7,407 |
|
|
$ |
9,825 |
|
|
$ |
8,935 |
|
|
$ |
61,688 |
|
|
$ |
29,516 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus: Amortization of core deposit intangibles |
|
2,451 |
|
|
2,451 |
|
|
2,477 |
|
|
432 |
|
|
431 |
|
|
7,379 |
|
|
1,250 |
|
Less: Tax benefit at the statutory rate |
|
515 |
|
|
515 |
|
|
520 |
|
|
91 |
|
|
91 |
|
|
1,550 |
|
|
263 |
|
Net income available for common stockholders adjusted for
amortization of intangibles |
|
$ |
29,341 |
|
|
$ |
28,812 |
|
|
$ |
9,364 |
|
|
$ |
10,166 |
|
|
$ |
9,275 |
|
|
$ |
67,517 |
|
|
$ |
30,503 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Tangible Common
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average stockholders' equity |
|
$ |
1,210,147 |
|
|
$ |
1,200,632 |
|
|
$ |
1,190,266 |
|
|
$ |
523,590 |
|
|
$ |
514,876 |
|
|
$ |
1,199,440 |
|
|
$ |
504,105 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average goodwill |
|
(370,224 |
) |
|
(369,255 |
) |
|
(366,795 |
) |
|
(161,447 |
) |
|
(161,447 |
) |
|
(369,097 |
) |
|
(160,725 |
) |
Average core deposit intangibles |
|
(71,355 |
) |
|
(73,875 |
) |
|
(76,727 |
) |
|
(11,932 |
) |
|
(12,354 |
) |
|
(73,965 |
) |
|
(13,370 |
) |
Average tangible common equity |
|
$ |
768,568 |
|
|
$ |
757,502 |
|
|
$ |
746,744 |
|
|
$ |
350,211 |
|
|
$ |
341,075 |
|
|
$ |
756,378 |
|
|
$ |
330,010 |
|
Return on Average
Tangible Common Equity (Annualized) |
|
15.15 |
% |
|
15.26 |
% |
|
5.09 |
% |
|
11.52 |
% |
|
10.79 |
% |
|
11.93 |
% |
|
12.36 |
% |
VERITEX HOLDINGS, INC. AND
SUBSIDIARYReconciliation of Non-GAAP Financial
Measures(Unaudited)
Operating Net Income, Pre-tax, Pre-provision
Operating Earnings and performance metrics calculated using
Operating Earnings and Pre-tax, Pre-provision Operating Net Income,
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 and pre-tax,
pre-provision operating earnings are non-GAAP measures used by
management to evaluate the Company’s financial performance. We
calculate (a) operating net income as net income plus loss on sale
of securities available for sale, net, plus loss (gain) on sale of
disposed branch assets, plus lease exit costs, net, plus branch
closure expenses, plus one-time issuance of shares to all
employees, plus merger and acquisition expenses, less tax impact of
adjustments, plus re-measurement of deferred tax assets as a result
of the reduction in the corporate income tax rate under the Tax
Cuts and Jobs Act, plus other merger and acquisition discrete tax
items. We calculate (b) pre-tax, pre-provision operating earnings
as operating earnings as described in clause (a) plus provision for
income taxes, plus provision for loan losses. We calculate (c)
diluted operating earnings per share as operating earnings as
described in clause (a) divided by weighted average diluted shares
outstanding. We calculate (d) operating return on average tangible
common equity as operating earnings as described in clause (a)
divided by total average tangible common equity (average
stockholders' equity less average goodwill and average core deposit
intangibles, net of accumulated amortization.) We calculate (e)
operating efficiency ratio as non interest expense plus adjustments
to operating non interest expense divided by (i) non interest
income plus adjustments to operating non interest income plus (ii)
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 Three Months Ended |
|
|
|
For the Nine Months Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sep 30, 2019 |
|
|
Jun 30, 2019 |
|
|
Mar 31, 2019 |
|
|
Dec 31, 2018 |
|
|
Sep 30, 2018 |
|
|
Sep 30, 2019 |
|
|
Sep 30, 2018 |
|
|
|
|
(Dollars in thousands) |
Operating Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
27,405 |
|
|
$ |
26,876 |
|
|
$ |
7,407 |
|
|
$ |
9,825 |
|
|
$ |
8,935 |
|
|
$ |
61,688 |
|
|
$ |
29,516 |
|
Plus: Loss on sale of securities available for sale, net |
|
— |
|
|
642 |
|
|
772 |
|
|
42 |
|
|
— |
|
|
1,414 |
|
|
— |
|
Plus: Loss (gain) on sale of disposed branch assets1 |
|
— |
|
|
359 |
|
|
— |
|
|
— |
|
|
— |
|
|
359 |
|
|
(388 |
) |
Plus: Lease exit costs, net2 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,071 |
|
Plus: Branch closure expenses |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
172 |
|
Plus: One-time issuance of shares to all employees |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
421 |
|
Plus: Merger and acquisition expenses |
|
1,035 |
|
|
5,431 |
|
|
31,217 |
|
|
1,150 |
|
|
2,692 |
|
|
37,683 |
|
|
4,070 |
|
Operating pre-tax income |
|
28,440 |
|
|
33,308 |
|
|
39,396 |
|
|
11,017 |
|
|
11,627 |
|
|
101,144 |
|
|
34,862 |
|
Less: Tax impact of adjustments3 |
|
217 |
|
|
1,351 |
|
|
6,717 |
|
|
(440 |
) |
|
538 |
|
|
8,285 |
|
|
1,073 |
|
Plus: Tax Act re-measurement |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(688 |
) |
|
— |
|
|
5 |
|
Plus: Other M&A tax items |
|
406 |
|
|
277 |
|
|
— |
|
|
— |
|
|
— |
|
|
683 |
|
|
— |
|
Operating net income |
|
$ |
28,629 |
|
|
$ |
32,234 |
|
|
$ |
32,679 |
|
|
$ |
11,457 |
|
|
$ |
10,401 |
|
|
$ |
93,542 |
|
|
$ |
33,794 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
shares outstanding |
|
53,873 |
|
|
54,929 |
|
|
55,439 |
|
|
24,532 |
|
|
24,613 |
|
|
54,633 |
|
|
24,587 |
|
Diluted EPS |
|
$ |
0.51 |
|
|
$ |
0.49 |
|
|
$ |
0.13 |
|
|
$ |
0.40 |
|
|
$ |
0.36 |
|
|
$ |
1.13 |
|
|
$ |
1.20 |
|
Diluted operating
EPS |
|
0.53 |
|
|
0.59 |
|
|
0.59 |
|
|
0.47 |
|
|
0.42 |
|
|
1.71 |
|
|
1.37 |
|
1 Loss on sale of disposed branch assets for the
nine months ended September 30, 2019 and for the three months ended
June 30, 2019 is included in merger and acquisition expense in the
condensed consolidated statements of income.2 Lease exit costs, net
for the nine months ended September 30, 2018 includes a $1.5
million consent fee and $240 thousand in professional services paid
in January 2018 to separately assign and sublease two of our branch
leases that we ceased using in 2017 offset by the reversal of the
corresponding assigned lease cease-use liability totaling $669
thousand.3 During the fourth quarter of 2018, we initiated a
transaction cost study, which through December 31, 2018 resulted in
$727 thousand of expenses paid that are non-deductible merger and
acquisition expenses. As such, the $727 thousand of non-deductible
expenses are reflected in the nine months ended September 30, 2018
tax impact of adjustments amounts reported. All other non-merger
related adjustments to operating net income are taxed at the
statutory rate.
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sep 30, 2019 |
|
Jun 30, 2019 |
|
|
Mar 31, 2019 |
|
Dec 31, 2018 |
|
|
Sep 30, 2018 |
|
|
Sep 30, 2019 |
|
|
Sep 30, 2018 |
|
|
|
|
(Dollars in thousands) |
Pre-Tax, Pre-Provision Operating Earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
27,405 |
|
|
$ |
26,876 |
|
|
$ |
7,407 |
|
|
$ |
9,825 |
|
|
$ |
8,935 |
|
|
$ |
61,688 |
|
|
$ |
29,516 |
|
Plus: Provision for income taxes |
|
7,595 |
|
|
7,369 |
|
|
1,989 |
|
|
3,587 |
|
|
1,448 |
|
|
16,953 |
|
|
7,309 |
|
Pus: Provision for loan losses |
|
9,674 |
|
|
3,335 |
|
|
5,012 |
|
|
1,364 |
|
|
3,057 |
|
|
18,021 |
|
|
5,239 |
|
Plus: Loss on sale of securities available for sale, net |
|
— |
|
|
642 |
|
|
772 |
|
|
42 |
|
|
— |
|
|
1,414 |
|
|
— |
|
Plus: Loss (gain) on sale of disposed branch assets1 |
|
— |
|
|
359 |
|
|
— |
|
|
— |
|
|
— |
|
|
359 |
|
|
(388 |
) |
Plus: Lease exit costs, net2 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,071 |
|
Plus: Branch closure expenses |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
172 |
|
Plus: One-time issuance of shares to all employees |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
421 |
|
Plus: Merger and acquisition expenses |
|
1,035 |
|
|
5,431 |
|
|
31,217 |
|
|
1,150 |
|
|
2,692 |
|
|
37,683 |
|
|
4,070 |
|
Pre-tax, pre-provision
operating earnings |
|
$ |
45,709 |
|
|
$ |
44,012 |
|
|
$ |
46,397 |
|
|
$ |
15,968 |
|
|
$ |
16,132 |
|
|
$ |
136,118 |
|
|
$ |
47,410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total
assets |
|
$ |
8,009,377 |
|
|
$ |
7,937,319 |
|
|
$ |
7,841,267 |
|
|
$ |
3,243,168 |
|
|
$ |
3,225,797 |
|
|
$ |
7,929,028 |
|
|
$ |
3,095,107 |
|
Pre-tax, pre-provision
operating return on average assets3 |
|
2.26 |
% |
|
2.22 |
% |
|
2.40 |
% |
|
1.95 |
% |
|
1.98 |
% |
|
2.30 |
% |
|
2.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total
assets |
|
$ |
8,009,377 |
|
|
$ |
7,937,319 |
|
|
$ |
7,841,267 |
|
|
$ |
3,243,168 |
|
|
$ |
3,225,797 |
|
|
$ |
7,929,028 |
|
|
$ |
3,095,107 |
|
Return on average assets3 |
|
1.36 |
% |
|
1.36 |
% |
|
0.38 |
% |
|
1.20 |
% |
|
1.10 |
% |
|
1.04 |
% |
|
1.28 |
% |
Operating return on average
assets3 |
|
1.42 |
|
|
1.63 |
|
|
1.69 |
|
|
1.40 |
|
|
1.28 |
|
|
1.58 |
|
|
1.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
adjusted for amortization of intangibles |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating net income |
|
$ |
28,629 |
|
|
$ |
32,234 |
|
|
$ |
32,679 |
|
|
$ |
11,457 |
|
|
$ |
10,401 |
|
|
$ |
93,542 |
|
|
$ |
33,794 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus: Amortization of core deposit intangibles |
|
2,451 |
|
|
2,451 |
|
|
2,477 |
|
|
432 |
|
|
431 |
|
|
7,379 |
|
|
1,250 |
|
Less: Tax benefit at the statutory rate |
|
515 |
|
|
515 |
|
|
520 |
|
|
91 |
|
|
91 |
|
|
1,550 |
|
|
263 |
|
Operating earnings
adjusted for amortization of intangibles |
|
$ |
30,565 |
|
|
$ |
34,170 |
|
|
$ |
34,636 |
|
|
$ |
11,798 |
|
|
$ |
10,741 |
|
|
$ |
99,371 |
|
|
$ |
34,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Tangible Common
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average stockholders' equity |
|
$ |
1,210,147 |
|
|
$ |
1,200,632 |
|
|
$ |
1,190,266 |
|
|
$ |
523,590 |
|
|
$ |
514,876 |
|
|
$ |
1,199,440 |
|
|
$ |
504,105 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Average goodwill |
|
(370,224 |
) |
|
(369,255 |
) |
|
(366,795 |
) |
|
(161,447 |
) |
|
(161,447 |
) |
|
(369,097 |
) |
|
(160,725 |
) |
Less: Average core deposit intangibles |
|
(71,355 |
) |
|
(73,875 |
) |
|
(76,727 |
) |
|
(11,932 |
) |
|
(12,354 |
) |
|
(73,965 |
) |
|
(13,370 |
) |
Average tangible common equity |
|
$ |
768,568 |
|
|
$ |
757,502 |
|
|
$ |
746,744 |
|
|
$ |
350,211 |
|
|
$ |
341,075 |
|
|
$ |
756,378 |
|
|
$ |
330,010 |
|
Operating return on
average tangible common equity3 |
|
15.78 |
% |
|
18.09 |
% |
|
18.81 |
% |
|
13.37 |
% |
|
12.49 |
% |
|
17.57 |
% |
|
14.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio |
|
43.67 |
% |
|
51.49 |
% |
|
82.30 |
% |
|
54.27 |
% |
|
57.58 |
% |
|
59.42 |
% |
|
55.15 |
% |
Operating efficiency
ratio |
|
42.36 |
% |
|
43.66 |
% |
|
43.54 |
% |
|
50.65 |
% |
|
49.09 |
% |
|
43.19 |
% |
|
49.45 |
% |
1 Loss on sale of disposed branch assets for the
nine months ended September 30, 2019 and for the three months ended
June 30, 2019 is included in merger and acquisition expense in the
condensed consolidated statements of income.2 Lease exit costs, net
for the nine months ended September 30, 2018 includes a $1.5
million consent fee and $240 thousand in professional services paid
in January 2018 to separately assign and sublease two of our branch
leases that we ceased using in 2017 offset by the reversal of the
corresponding assigned lease cease-use liability totaling $669
thousand.3 Annualized ratio.
lrenfro@veritexbank.com
scaudle@veritexbank.com
Veritex (NASDAQ:VBTX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Veritex (NASDAQ:VBTX)
Historical Stock Chart
From Apr 2023 to Apr 2024