Veritex Holdings, Inc. [VBTX] Filings

10-Q 1 vbtx-20240630.htm 10-Q vbtx-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


			FORM			10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-36682


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


Texas		27-0973566
(State or other jurisdiction of		(I.R.S. employer
incorporation or organization)		identification no.)

8214 Westchester Drive, Suite 800
Dallas,	Texas	75225
(Address of principal executive offices)		(Zip code)


			(972)			349-6200
			(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01

VBTX

Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 1, 2024, there were 54,385,930 outstanding shares of the registrant’s common stock, par value $0.01 per share.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Page

PART I — FINANCIAL INFORMATION

Glossary of Acronyms, Abbreviations, and Terms

Item 1.

Financial Statements – Unaudited

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II — OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

Item 6.

Exhibits

SIGNATURES

Glossary of Acronyms, Abbreviations, and Terms

The acronyms, abbreviations, and terms listed below are used in various sections of this Form 10-Q, including “Part I, Item 1. Financial Statements” and “Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations."

ACL

Allowance for Credit Loss

Green

Green Bank

AFS

Available-For-Sale

HTM

Held-To-Maturity

AOCI

Accumulated Other Comprehensive Income

LHFS

Loans Held for Sale

APIC

Additional Paid-In Capital

LHI

Loans Held for Investment

ASC

Accounting Standards Codification

LIBOR

London Interbank Offered Rate

ASU

Accounting Standard Update

Lower

Lower Holding Company

BOLI

Bank-Owned Life Insurance

M&A

Mergers and acquisitions

Board

Board of Directors of Veritex Holdings, Inc.

MBS

Mortgage-backed Securities

bps

Basis Points

Mortgage Warehouse

BTFP

Bank Term Funding Program

NAC

North Avenue Capital, LLC

CBLR

Community Bank Leverage Ratio

NOOCRE

Non-owner Occupied CRE

Certificates of Deposit

OBS

Off-Balance Sheet

CECL

Current Expected Credit Losses

OOCRE

Owner Occupied CRE

CET1

Common Equity Tier 1

OREO

Other Real Estate Owned

CMO

Collateralized Mortgage Obligation

PCA

Prompt Corrective Action

CRA

Community Reinvestment Act

PCD

Purchased Credit Deteriorated

CRE

Commercial Real Estate

PSU

Performance-based Restricted stock units

DCF

Discounted Cash Flow

RBC

Risk-Based Capital

DFW

Dallas-Fort Worth

RSU

Restricted stock units

EPS

Earnings Per Share

RWA

Risk-Weighted Assets

Exchange Act

Securities Exchange Act of 1934, as amended

Sarbanes-Oxley Act

Sarbanes-Oxley Act of 2002

FASB

Financial Accounting Standards Board

SBA

U. S. Small Business Administration

FDIC

Federal Deposit Insurance Corporation

SEC

Securities and Exchange Commission

Federal Reserve

The Federal Reserve System

SOFR

Secured Overnight Financing Rate

FHLB

Federal Home Loan Bank

TDB

Texas Department of Banking

FRB

Federal Reserve Bank of Dallas

Thrive

Thrive Mortgage, LLC

GAAP

Generally Accepted Accounting Principles in the United States of America

USDA

United States Department of Agriculture

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

as of June 30, 2024 and December 31, 2023

(Dollars in thousands, except par value and share information)


	June 30,		December 31,
	2024		2023
	(Unaudited)
ASSETS
Cash and due from banks	$	53,462	$	58,914
Interest bearing deposits in other banks	598,375		570,149
Total cash and cash equivalents	651,837		629,063
Debt securities AFS, at fair value	1,172,122		1,076,639
Debt securities HTM (fair value of $153,686 and $160,021, at June 30, 2024 and December 31, 2023, respectively)	177,232		180,403
Equity securities	21,797		21,521

Investment in unconsolidated subsidiaries	1,018		1,018
FHLB Stock and FRB Stock	53,070		53,699
Total investments	1,425,239		1,333,280
LHFS	57,046		79,072

LHI, MW	568,047		377,796
LHI, excluding MW	9,209,094		9,206,544
Less: ACL	(113,431)		(109,816)
Total LHI, net	9,663,710		9,474,524
BOLI	84,233		84,833
Premises and equipment, net	105,222		105,727
OREO	24,256		—
Intangible assets, net of accumulated amortization	35,817		41,753
Goodwill	404,452		404,452
Other assets	232,518		241,633
Total assets	$	12,684,330	$	12,394,337
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing deposits	$	2,416,727	$	2,218,036
Interest-bearing transaction and savings deposits	3,979,454		4,348,385
Certificates and other time deposits	3,744,596		3,191,737
Correspondent money market deposits	584,067		580,037
Total deposits	10,724,844		10,338,195
Accounts payable and other liabilities	180,585		195,036
Advances from FHLB	—		100,000
Subordinated debentures and subordinated notes	230,285		229,783

Total liabilities	11,135,714		10,863,014

Stockholders’ equity:
Common stock, $0.01 par value:
Authorized shares - 75,000,000
Issued shares - 61,164,132 and 60,976,462 at June 30, 2024 and December 31, 2023, respectively	612		610

APIC	1,321,995		1,317,516
Retained earnings	473,801		444,242
AOCI	(76,713)		(63,463)
Treasury stock, 6,813,782 and 6,638,094 shares, at cost, at June 30, 2024 and December 31, 2023, respectively	(171,079)		(167,582)
Total stockholders’ equity	1,548,616		1,531,323
Total liabilities and stockholders’ equity	$	12,684,330	$	12,394,337

See accompanying Notes to Consolidated Financial Statements.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

For the Three and Six Months Ended June 30, 2024 and 2023

(Dollars in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	166,979	$	163,727	$	328,921	$	315,434
Debt securities	15,408		10,166		29,103		21,154
Deposits in financial institutions and Federal Funds sold	7,722		7,507		15,772		13,041
Equity securities and other investments	1,138		1,118		2,038		2,526
Total interest and dividend income	191,247		182,518		375,834		352,155
INTEREST EXPENSE
Transaction and savings deposits	45,619		32,957		92,403		62,814
Certificates and other time deposits	44,811		28,100		85,303		49,067
Advances from FHLB	1,468		17,562		2,859		29,920
Subordinated debentures and subordinated notes	3,113		3,068		6,227		6,134
Total interest expense	95,011		81,687		186,792		147,935
NET INTEREST INCOME	96,236		100,831		189,042		204,220
Provision for credit losses	8,250		15,000		15,750		24,385
(Benefit) provision for credit losses on unfunded commitments	—		(1,129)		(1,541)		368
Net interest income after provision (benefit) for credit losses	87,986		86,960		174,833		179,467
NONINTEREST INCOME
Service charges and fees on deposit accounts	4,974		5,272		9,870		10,289
Loan fees	2,207		1,520		4,717		3,584
Loss on sales of debt securities	—		—		(6,304)		(5,321)
Government guaranteed loan income, net	1,320		4,144		3,934		13,832
Equity method investment income (loss)	—		485		—		(1,036)
Customer swap income	326		983		775		1,196
Other	1,751		1,288		4,248		4,679
Total noninterest income	10,578		13,692		17,240		27,223
NONINTEREST EXPENSE
Salaries and employee benefits	32,790		28,650		66,155		60,515
Occupancy and equipment	4,585		4,827		9,262		9,800
Professional and regulatory fees	5,617		6,868		11,670		11,257
Data processing and software expense	5,097		4,709		9,953		9,429
Marketing	1,976		2,627		3,522		4,406
Amortization of intangibles	2,438		2,468		4,876		4,963
Telephone and communications	365		355		626		833

Other	10,273		6,693		19,193		12,609
Total noninterest expense	63,141		57,197		125,257		113,812
Income before income tax expense	35,423		43,455		66,816		92,878
Provision for income taxes	8,221		9,725		15,458		20,737
NET INCOME	$	27,202	$	33,730	$	51,358	$	72,141


Basic EPS	$	0.50	$	0.62	$	0.94	$	1.33
Diluted EPS	$	0.50	$	0.62	$	0.94	$	1.32

See accompanying Notes to Consolidated Financial Statements.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

For the Three and Six Months Ended June 30, 2024 and 2023

(Dollars in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
NET INCOME	$	27,202	$	33,730	$	51,358	$	72,141
OTHER COMPREHENSIVE INCOME
Net unrealized (losses) gains on debt securities AFS:
Change in net unrealized losses on debt securities AFS during the period, net	(4,599)		(21,975)		(15,020)		(19,428)
(Accretion) amortization from transfer of debt securities from AFS to HTM	(163)		(165)		2,762		3,457
Reclassification adjustment for net losses included in net income	—		—		6,304		5,321
Net unrealized losses on debt securities AFS	(4,762)		(22,140)		(5,954)		(10,650)

Net unrealized losses on derivative instruments designated as cash flow hedges	(2,228)		(15,033)		(10,723)		(7,955)

Other comprehensive loss, before tax	(6,990)		(37,173)		(16,677)		(18,605)
Income tax benefit	(1,434)		(8,494)		(3,427)		(4,821)
Other comprehensive loss, net of tax	(5,556)		(28,679)		(13,250)		(13,784)
COMPREHENSIVE INCOME	$	21,646	$	5,051	$	38,108	$	58,357

See accompanying Notes to Consolidated Financial Statements.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the Three and Six Months Ended June 30, 2024 and 2023

(Dollars in thousands, except share data)



Three Months Ended June 30, 2024
	Common Stock			Treasury Stock			APIC		Retained Earnings		AOCI		Total
	Shares	Amount		Shares	Amount
Balance at March 31, 2024	54,495,961	$	611	6,638,094	$	(167,582)	$	1,319,144	$	457,499	$	(71,157)	$	1,538,515
RSUs vested, net of 15,679 shares withheld to cover taxes	30,077	1		—	—		(316)		—		—		(315)

Stock buyback	(175,688)	—		175,688	(3,497)		—		—		—		(3,497)
Stock based compensation	—	—		—	—		3,167		—				3,167

Net income	—	—		—	—		—		27,202		—		27,202
Dividends paid	—	—		—	—		—		(10,900)		—		(10,900)
Other comprehensive loss	—	—		—	—		—		—		(5,556)		(5,556)
Balance at June 30, 2024	54,350,350	$	612	6,813,782	$	(171,079)	$	1,321,995	$	473,801	$	(76,713)	$	1,548,616


Three Months Ended June 30, 2023
	Common Stock			Treasury Stock			APIC		Retained Earnings		AOCI
	Shares	Amount		Shares	Amount								Total
Balance at March 31, 2023	54,229,033	$	609	6,638,094	$	(167,582)	$	1,308,345	$	406,873	$	(54,508)		$	1,493,737
RSUs vested, net of 2,960 shares withheld to cover taxes	18,425	—		—	—		(56)		—		—			(56)
Exercise of employee stock options, net of 2,343 shares withheld to cover exercise	13,334	—		—	—		231		—		—			231



Stock based compensation	—	—		—	—		3,167		—		—			3,167

Net income	—	—		—	—		—		33,730		—			33,730
Dividends paid	—	—		—	—		—		(10,850)		—			(10,850)

Other comprehensive loss	—	—		—	—		—		—		(28,679)			(28,679)
Balance at June 30, 2023	54,260,792	$	609	6,638,094	$	(167,582)	$	1,311,687	$	429,753	$	(83,187)		$	1,491,280

See accompanying Notes to Consolidated Financial Statements.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the Three and Six Months Ended June 30, 2024 and 2023

(Dollars in thousands, except share data)


Six Months Ended June 30, 2024
	Common Stock			Treasury Stock			APIC		Retained Earnings		AOCI
	Shares	Amount		Shares	Amount								Total
Balance at December 31, 2023	54,338,368	$	610	6,638,094	$	(167,582)	$	1,317,516	$	444,242	$	(63,463)		$	1,531,323


RSUs vested, net of 84,713 shares withheld to cover taxes	187,670	2		—	—		(1,577)		—		—			(1,575)


Stock buyback	(175,688)	—		175,688	(3,497)		—		—		—			(3,497)
Stock based compensation	—	—		—	—		6,056		—		—			6,056

Net income	—	—		—	—		—		51,358		—			51,358
Dividends paid	—	—		—	—		—		(21,799)		—			(21,799)

Other comprehensive loss	—	—		—	—		—		—		(13,250)			(13,250)
Balance at June 30, 2024	54,350,350	$	612	6,813,782	$	(171,079)	$	1,321,995	$	473,801	$	(76,713)		$	1,548,616


Six Months Ended June 30, 2023
	Common Stock			Treasury Stock			APIC		Retained Earnings		AOCI
	Shares	Amount		Shares	Amount								Total
Balance at December 31, 2022	54,029,955	$	607	6,638,094	$	(167,582)	$	1,306,852	$	379,299	$	(69,403)		$	1,449,773


RSUs vested, net of 74,425 shares withheld to cover taxes	179,506	2		—	—		(1,984)		—		—			(1,982)
Exercise of employee stock options, net of 121 and 9,729 shares withheld to cover taxes and exercise, respectively	51,331	—		—	—		765		—		—			765



Stock based compensation	—	—		—	—		6,054		—		—			6,054

Net income	—	—		—	—		—		72,141		—			72,141
Dividends paid	—	—		—	—		—		(21,687)		—			(21,687)
Other comprehensive loss	—	—		—	—		—		—		(13,784)			(13,784)
Balance at June 30, 2023	54,260,792	$	609	6,638,094	$	(167,582)	$	1,311,687	$	429,753	$	(83,187)		$	1,491,280

See accompanying Notes to Consolidated Financial Statements.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

For the Six Months Ended June 30, 2024 and 2023

(Dollars in thousands)


	For the Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net income	$	51,358	$	72,141
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed assets and intangibles	9,525		10,041
Net (accretion) amortization of time deposit premium, debt discount and debt issuance costs	(1,685)		478
Provision for credit losses and unfunded commitments	14,209		24,753
Accretion of loan discount	(950)		(1,897)
Stock-based compensation expense	6,056		6,054

Excess tax expense from stock compensation	410		153
Net (accretion) amortization of premiums on debt securities	(482)		1,718
Unrealized loss on equity securities recognized in earnings	147		31
Change in cash surrender value and mortality rates of BOLI	600		121
Loss on sales of debt securities	6,304		5,321
Change in fair value of government guaranteed loans using fair value option	(638)		(616)
Gain on sales of mortgage LHFS	(47)		(46)
Gain on sales of government guaranteed loans	(4,612)		(15,598)


Servicing asset recoveries, net	(279)		(862)
Originations of LHFS	(24,103)		(39,877)
Proceeds from sales of LHFS	39,530		34,273



Equity method investment loss	—		1,036


Decrease (increase) in other assets	13,864		(6,527)
(Decrease) increase in accounts payable and other liabilities	(23,647)		7,620
Net cash provided by operating activities	85,560		98,317
Cash flows from investing activities:


Purchases of AFS debt securities	(415,605)		(189,668)
Proceeds from sales of AFS debt securities	113,794		109,793
Proceeds from maturities, calls and pay downs of AFS debt securities	195,263		197,634

Maturity, calls and paydowns of HTM debt securities	2,460		2,107
Proceeds (purchases) of other investments	206		(16,475)


Net loans originated	(238,191)		(291,810)
Proceeds from sale of government guaranteed loans	19,220		79,812
Net (disposals) additions to premises and equipment	(1,898)		337


Net cash used in investing activities	(324,751)		(108,270)
Cash flows from financing activities:
Net increase in deposits	388,836		110,701
Net (decrease) increase in advances from FHLB	(100,000)		150,000



Payments to tax authorities for stock-based compensation	(1,575)		(1,982)
Proceeds from exercise of employee stock options	—		765

Purchase of treasury stock	(3,497)		—
Dividends paid	(21,799)		(21,687)

Net cash provided by financing activities	261,965		237,797
Net increase in cash and cash equivalents	22,774		227,844
Cash and cash equivalents at beginning of period	629,063		436,077
Cash and cash equivalents at end of period	$	651,837

Veritex Holdings, Inc. [VBTX] Filings
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10-K	[2024-02-28]
10-Q	[2023-10-30]
10-Q	[2023-08-08]
10-Q	[2023-05-10]
10-K	[2023-02-28]
10-Q	[2022-11-04]
10-Q	[2022-08-05]
10-Q	[2022-05-10]
10-K	[2022-03-01]
10-Q	[2021-11-05]
10-Q	[2021-08-06]
10-Q	[2021-05-06]
10-K	[2021-02-26]
10-Q	[2020-11-04]
10-Q	[2020-08-05]
10-Q	[2020-05-07]
10-K	[2020-02-28]
10-Q	[2019-10-25]
10-Q	[2019-08-01]
10-Q	[2019-05-10]
10-K	[2019-02-27]
10-Q	[2018-10-25]
10-Q	[2018-07-27]
10-Q	[2018-04-27]
10-K	[2018-03-14]
10-Q	[2017-10-26]
10-Q	[2017-07-25]
10-Q	[2017-04-27]
10-K	[2017-03-10]
10-Q	[2016-10-27]
10-Q	[2016-07-28]
10-Q	[2016-04-28]
10-K	[2016-03-15]
10-Q	[2015-10-30]
10-Q	[2015-07-31]
10-Q	[2015-05-04]
10-K	[2015-03-27]
10-Q	[2014-11-07]
S-1	[2014-08-29]