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Veritex Holdings, Inc. Reports Second Quarter Operating Results
Источник: Nasdaq GlobeNewswire / 27 июл 2022 07:31:02 America/New_York
DALLAS, July 27, 2022 (GLOBE NEWSWIRE) -- Veritex Holdings, Inc. (“Veritex”, the “Company”, “we” or “our”) (Nasdaq: VBTX), the holding company for Veritex Community Bank, today announced the results for the quarter ended June 30, 2022.
“The second quarter of 2022 was another exceptional quarter for our Company, reporting 1.76% in PTPP operating return,” said President and CEO, C. Malcolm C. Holland, III. “We have remained and will remain focused on the positive momentum we have created by investing in talent and focus on scale in two of the strongest and most resilient markets in the U.S.”
Quarter to Date Year to Date Financial Highlights Q2 2022 Q1 2022 Q2 2022 Q2 2021 (Dollars in thousands, except per share data)
(unaudited)GAAP Net income $ 29,626 $ 33,470 $ 63,096 $ 61,243 Diluted EPS 0.54 0.65 1.19 1.22 Book value per common share 26.50 26.86 26.50 25.72 Return on average assets2 1.11 % 1.36 % 1.23 % 1.35 % Efficiency ratio 50.76 52.84 51.76 51.01 Return on average equity2 8.21 10.00 9.07 9.96 Non-GAAP1 Operating earnings $ 29,855 $ 34,014 $ 63,869 $ 62,165 Diluted operating EPS 0.55 0.66 1.20 1.24 Tangible book value per common share 18.20 18.51 18.20 17.16 Pre-tax, pre-provision operating earnings 47,000 42,265 89,265 78,707 Pre-tax, pre-provision operating return on average assets2 1.76 % 1.71 % 1.74 % 1.74 % Operating return on average assets2 1.12 1.38 1.24 1.37 Operating efficiency ratio 50.45 52.05 51.22 50.62 Return on average tangible common equity2 12.68 15.84 14.17 16.15 Operating return on average tangible common equity2 12.77 16.08 14.34 16.38 1 Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of these non-generally accepted accounting principles (“”GAAP”) financial measures to their most directly comparable GAAP measures.
2 Annualized ratio.Other Second Quarter Highlights
- Pre-tax, pre-provision operating return on average assets increased 5 bps from the first quarter of 2022 to 1.76%;
- Non-performing assets (“NPAs”) to total assets decreased to 0.40%, or 6 bps from March 31, 2022, and decreased to 0.40% or 45 bps from June 30, 2021, respectively;
- Net charge-offs to average loans outstanding of 1 basis point for the second quarter of 2022;
- Net interest margin increased to 3.42%, up 20 basis points from the first quarter of 2022;
- Total loans held for investment (“LHI”), excluding mortgage warehouse (“MW”) and paycheck protection program (“PPP”) loans, grew $790.4 million, or 44.4% annualized, during the three months ended June 30, 2022 from $7.1 billion at the end of the first quarter of 2022;
- Total deposits grew $628.1 million, or 31.8% annualized, during the three months ended June 30, 2022 from $7.9 billion at the end of the first quarter of 2022; and
- Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on August 26, 2022.
Results of Operations for the Three Months Ended June 30, 2022
Net Interest Income
For the three months ended June 30, 2022, net interest income before provision for credit losses was $84.5 million and net interest margin was 3.42% compared to $73.0 million and 3.22%, respectively, for the three months ended March 31, 2022. The $11.4 million increase in net interest income before provision for credit losses was primarily due to a $10.7 million increase in interest income on loans driven by an increase in average balances and loan yields during the three months ended June 30, 2022. Net interest margin increased 20 basis points compared to the three months ended March 31, 2022, primarily due to the increase in yields earned on loans during three months ended June 30, 2022.
Compared to the three months ended June 30, 2021, net interest income before provision for credit losses for the three months ended June 30, 2022 increased by $17.3 million, or 25.8%. The increase was primarily due to a $14.4 million increase in interest income on loans driven by an increase in average balances. The average cost of interest-bearing deposits increased 8 basis points to 0.43% for the three months ended June 30, 2022 from 0.35% for the three months ended June 30, 2021.
Noninterest Income
Noninterest income for the three months ended June 30, 2022 was $10.4 million, a decrease of $4.7 million, or 31.3%, compared to the three months ended March 31, 2022. The decrease was primarily due to a $4.1 million decrease in government guaranteed loan income, net.
Compared to the three months ended June 30, 2021, noninterest income for the three months ended June 30, 2022 decreased by $2.1 million, or 16.7%. The decrease was primarily due to a $2.7 million decrease in government guaranteed loan income, net.
Noninterest Expense
Noninterest expense was $48.2 million for the three months ended June 30, 2022, compared to $46.6 million for the three months ended March 31, 2022, an increase of $1.6 million, or 3.4%. This increase was primarily due to a $1.1 million increase in marketing expenses.
Compared to the three months ended June 30, 2021, noninterest expense for the three months ended June 30, 2022 increased by $6.4 million, or 15.4%. The increase was primarily driven by a $3.5 million increase in salaries and employee benefits as a result of a $3.3 million increase in salaries resulting from continued investment in talent.
Financial Condition
Total LHI, excluding MW and PPP loans, were $7.9 billion at June 30, 2022, an increase of $790.4 million, or 44.4% annualized, compared to March 31, 2022. The increase was the result of the continued execution, and success of our loan growth strategy, including our investment in talent.
Total deposits were $8.5 billion at June 30, 2022, an increase of $628.1 million, or 31.8% annualized, compared to March 31, 2022. The increase was primarily the result of an increase of $319.0 million in interest-bearing transaction and savings deposits, an increase of $181.9 million in noninterest-bearing demand deposits, and an increase of $127.2 million in certificates and other time deposits.
Asset Quality
Nonperforming assets totaled $45.0 million, or 0.40% of total assets at June 30, 2022, compared to $48.0 million, or 0.46% of total assets at March 31, 2022. The Company had net charge-offs of $909 thousand for the quarter, which were fully reserved against in prior quarters under our allowance for credit loss (“ACL”) model.
The Company recorded a provision for credit losses of $9.0 million for the three months ended June 30, 2022, a $500 thousand benefit for credit losses for the three months ended March 31, 2022 and no provision for credit losses for the three months ended June 30, 2021. The recorded provision for credit losses for the three months ended June 30, 2022, compared to the three months ended March 31, 2022, was primarily attributable to an increase in general reserves as a result of loan growth. For the three months ended June 30, 2022, we recorded no provision for unfunded commitments, which was attributable to stable unfunded balances. ACL as a percentage of LHI, excluding MW and PPP loans, was 1.02%, 1.02% and 1.59% at June 30, 2022, March 31, 2022 and June 30, 2021, respectively.
Dividend Information
On July 27, 2022, Veritex’s Board of Directors declared a quarterly cash dividend of $0.20 per share on its outstanding shares of common stock. The dividend will be paid on or after August 26, 2022 to stockholders of record as of the close of business on August 12, 2022.
Non-GAAP Financial Measures
Veritex’s management uses certain non-GAAP (U.S. generally accepted accounting principles) financial measures to evaluate its operating performance and provide information that is important to investors. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, Veritex’s reported results prepared in accordance with GAAP. Specifically, Veritex reviews and reports tangible book value per common share, operating earnings, tangible common equity to tangible assets, return on average tangible common equity, pre-tax, pre-provision operating earnings, pre-tax, pre-provision operating return on average assets, diluted operating earnings per share, operating return on average assets, operating return on average tangible common equity and operating efficiency ratio. Veritex has included in this earnings release information related to these non-GAAP financial measures for the applicable periods presented. Please refer to “Reconciliation of Non-GAAP Financial Measures” after the financial highlights at the end of this earnings release for a reconciliation of these non-GAAP financial measures.
Conference Call
The Company will host an investor conference call and webcast to review the results on Wednesday, July 27, 2022, at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/r7rx63qg and will receive a unique PIN, which can be used when dialing in for the call.
Participants may also register via teleconference at:
https://register.vevent.com/register/BI70101fb149e640b7a111c50ba9b1bef1. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.A replay will be available within approximately two hours after the completion of the call, and made accessible for one week. You may access the replay via webcast through the investor relations section of Veritex’s website.
About Veritex Holdings, Inc.
Headquartered in Dallas, Texas, Veritex is a bank holding company that conducts banking activities through its wholly owned subsidiary, Veritex Community Bank, with locations throughout the Dallas-Fort Worth metroplex and in the Houston metropolitan area. Veritex Community Bank is a Texas state chartered bank regulated by the Texas Department of Banking and the Board of Governors of the Federal Reserve System. For more information, visit www.veritexbank.com.
Forward-Looking Statements
This earnings release includes “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors, which change over time and are beyond our control, that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to Veritex Holdings, Inc.’s (“Veritex”) proposed acquisition of interLINK, including the expected timing of the completion of the acquisition, the ability to complete the acquisition, the ability to obtain any required regulatory or other approvals, authorizations or consents in connection with the acquisition, disruption from the acquisition making it more difficult to maintain relationships with employees, customers or other parties with whom Veritex or interLINK have business relationships, diversion of management time on acquisition-related issues, the reaction to the acquisition of the companies’ customers, employees and counterparties, any statements regarding the plans and objectives of management for future operations, products or services arising from the acquisition, including integration plans, and the treatment of certain deposits via interLINK as not being brokered deposits for any supervisory purpose; the expected payment date of Veritex’s quarterly cash dividend; the impact of certain changes in Veritex’s accounting policies, standards and interpretations; the effects of the COVID-19 pandemic and actions taken in response thereto; and Veritex’s future financial performance, business and growth strategy, projected plans and objectives, as well as other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “seeks,” “targets,” “outlooks,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. We refer you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Veritex’s Annual Report on Form 10-K for the year ended December 31, 2021 and any updates to those risk factors set forth in Veritex’s Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. If one or more events related to these or other risks or uncertainties materialize, or if Veritex’s underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. Veritex does not undertake any obligation, and specifically declines any obligation, to supplement, update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, expressed or implied, included in this earnings release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Veritex or persons acting on Veritex’s behalf may issue.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)For the Quarter Ended For the Six Months Ended Jun 30,
2022Mar 31,
2022Dec 31,
2021Sep 30,
2021Jun 30,
2021Jun 30,
2022Jun 30,
2021(Dollars and shares in thousands) Per Share Data (Common Stock): Basic EPS $ 0.55 $ 0.66 $ 0.84 $ 0.75 $ 0.60 $ 1.21 $ 1.24 Diluted EPS 0.54 0.65 0.82 0.73 0.59 1.19 1.22 Book value per common share 26.50 26.86 26.64 26.09 25.72 26.50 25.72 Tangible book value per common share1 18.20 18.51 17.49 17.53 17.16 18.20 17.16 Dividends paid per common share outstanding2 0.20 0.20 0.20 0.20 0.20 0.40 0.37 Common Stock Data: Shares outstanding at period end 53,951 53,907 49,372 49,229 49,498 53,951 49,498 Weighted average basic shares outstanding for the period 53,949 50,695 49,329 49,423 49,476 52,331 49,435 Weighted average diluted shares outstanding for the period 54,646 51,571 50,441 50,306 50,331 53,121 50,187 Summary of Credit Ratios: ACL to total LHI, excluding MW and PPP loans 1.02 % 1.02 % 1.15 % 1.42 % 1.59 % 1.02 % 1.59 % NPAs to total assets 0.40 0.46 0.51 0.77 0.85 0.40 0.85 Net charge-offs to average loans outstanding 0.01 0.07 0.19 0.09 0.09 0.08 0.09 Summary Performance Ratios: Return on average assets3 1.11 1.36 1.68 1.56 1.27 1.23 1.35 Return on average equity3 8.21 10.00 12.65 11.32 9.42 9.07 9.96 Return on average tangible common equity1, 3 12.68 15.84 20.06 17.72 15.18 14.17 16.15 Efficiency ratio 50.76 52.84 48.53 47.55 52.42 51.76 51.01 Net interest margin 3.42 3.22 3.37 3.26 3.11 3.32 3.16 Selected Performance Metrics - Operating: Diluted operating EPS1 $ 0.55 $ 0.66 $ 0.84 $ 0.70 $ 0.60 $ 1.20 $ 1.24 Pre-tax, pre-provision operating return on average assets1, 2 1.76 % 1.71 % 1.97 % 1.85 % 1.66 % 1.74 % 1.74 % Operating return on average assets1, 3 1.12 1.38 1.72 1.48 1.29 1.24 1.37 Operating return on average tangible common equity1, 3 12.77 16.08 20.48 16.92 15.42 14.34 16.38 Operating efficiency ratio1 50.45 52.05 47.64 48.51 51.63 51.22 50.62 Veritex Holdings, Inc. Capital Ratios: Average stockholders' equity to average total assets 13.51 % 13.58 % 13.30 % 13.75 % 13.46 % 13.54 % 13.57 % Tangible common equity to tangible assets1 9.04 9.98 9.28 9.43 9.51 9.04 9.51 Tier 1 capital to average assets (leverage) 10.14 10.66 9.05 9.54 9.38 10.14 9.38 Common equity tier 1 capital 9.25 9.84 8.58 8.75 9.03 9.25 9.03 Tier 1 capital to risk-weighted assets 9.52 10.14 8.89 9.06 9.36 9.52 9.36 Total capital to risk-weighted assets 11.95 12.73 11.60 12.31 12.86 11.95 12.86 1Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” after the financial highlights for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.
2Dividend amount represents dividend paid per common share subsequent to each respective quarter end.
3Annualized ratio for quarterly metrics.VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands)Jun 30,
2022Mar 31,
2022Dec 31,
2021Sep 30,
2021Jun 30,
2021(unaudited) (unaudited) (unaudited) (unaudited) ASSETS Cash and cash equivalents $ 410,716 $ 551,573 $ 379,784 $ 229,712 $ 390,027 Debt Securities 1,354,403 1,244,514 1,052,494 1,103,745 1,125,877 Other investments 202,685 188,699 190,591 191,786 87,558 Loans held for sale 14,210 18,721 26,007 18,896 12,065 LHI, PPP loans, carried at fair value 7,339 18,512 53,369 135,842 291,401 LHI, MW 629,291 542,877 565,645 615,045 559,939 LHI, excluding MW and PPP 7,915,792 7,125,429 6,766,009 6,615,905 6,272,087 Total loans 8,566,632 7,705,539 7,411,030 7,385,688 7,135,492 ACL (80,576 ) (72,485 ) (77,754 ) (93,771 ) (99,543 ) Bank-owned life insurance 84,097 83,641 83,194 83,781 83,304 Bank premises, furniture and equipment, net 108,769 109,138 109,271 116,063 123,504 Other real estate owned (“OREO”) 1,032 1,062 — — 2,467 Intangible assets, net of accumulated amortization 59,011 63,986 66,017 54,682 57,143 Goodwill 404,452 404,452 403,771 370,840 370,840 Other assets 193,590 173,561 138,851 129,774 72,856 Total assets $ 11,304,811 $ 10,453,680 $ 9,757,249 $ 9,572,300 $ 9,349,525 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits: Noninterest-bearing deposits $ 2,947,830 $ 2,765,895 $ 2,510,723 $ 2,302,925 $ 2,388,068 Interest-bearing transaction and savings deposits 4,007,250 3,688,292 3,276,312 3,228,306 3,112,974 Certificates and other time deposits 1,562,626 1,435,409 1,576,580 1,647,521 1,477,860 Total deposits 8,517,706 7,889,596 7,363,615 7,178,752 6,978,902 Accounts payable and other liabilities 126,116 105,552 69,160 66,571 55,499 Advances from Federal Home Loan Bank (“FHLB”) 1,000,000 777,522 777,562 777,601 777,640 Subordinated debentures and subordinated notes 228,272 228,018 227,764 262,761 262,766 Securities sold under agreements to repurchase 3,275 4,996 4,069 2,455 1,811 Total liabilities 9,875,369 9,005,684 8,442,170 8,288,140 8,076,618 Commitments and contingencies Stockholders’ equity: Common stock 606 605 560 559 558 Additional paid-in capital 1,300,170 1,297,161 1,142,758 1,137,889 1,134,603 Retained earnings 317,664 298,830 275,273 243,633 216,704 Accumulated other comprehensive (loss) income (21,416 ) 18,982 64,070 69,661 77,189 Treasury stock (167,582 ) (167,582 ) (167,582 ) (167,582 ) (156,147 ) Total stockholders’ equity 1,429,442 1,447,996 1,315,079 1,284,160 1,272,907 Total liabilities and stockholders’ equity $ 11,304,811 $ 10,453,680 $ 9,757,249 $ 9,572,300 $ 9,349,525 VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands, except per share data)For the Quarter Ended For the Six Months Ended Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Jun 30, 2022 Jun 30, 2021 Interest income: Loans, including fees $ 82,191 $ 71,443 $ 74,174 $ 71,139 $ 67,814 $ 153,634 $ 135,213 Debt securities 9,632 7,762 9,553 7,613 7,529 17,394 14,966 Deposits in financial institutions and Fed Funds sold 714 262 165 130 167 976 294 Equity securities and other investments 1,057 910 1,004 898 672 1,967 1,335 Total interest income 93,594 80,377 84,896 79,780 76,182 173,971 151,808 Interest expense: Transaction and savings deposits 4,094 1,751 1,629 1,588 1,661 5,845 3,641 Certificates and other time deposits 1,465 1,380 1,661 1,934 2,423 2,845 5,484 Advances from FHLB 834 1,547 1,847 1,848 1,829 2,381 3,641 Subordinated debentures and subordinated notes 2,721 2,659 3,018 3,134 3,138 5,380 6,276 Total interest expense 9,114 7,337 8,155 8,504 9,051 16,451 19,042 Net interest income 84,480 73,040 76,741 71,276 67,131 157,520 132,766 Provision (benefit) for credit losses 9,000 (500 ) (3,349 ) — — 8,500 — Provision (benefit) for unfunded commitments — 493 (1,040 ) (448 ) 577 493 7 Net interest income after provisions 75,480 73,047 81,130 71,724 66,554 148,527 132,759 Noninterest income: Service charges and fees on deposit accounts 5,039 4,710 4,782 4,484 3,847 9,749 7,476 Loan fees 2,385 2,794 2,697 1,746 1,823 5,179 3,164 Loss on sales of investment securities — — — (188 ) — — — Gain on sales of mortgage loans held for sale 223 307 293 407 385 530 892 Government guaranteed loan income, net 789 4,891 3,423 2,341 3,448 5,680 9,996 Equity method investment income 966 367 1,238 4,522 — 1,333 — Other 976 2,028 3,717 2,315 2,953 3,004 5,100 Total noninterest income 10,378 15,097 16,150 15,627 12,456 25,475 26,628 Noninterest expense: Salaries and employee benefits 26,924 27,513 25,401 22,964 23,451 54,437 46,383 Occupancy and equipment 4,496 4,517 4,398 4,536 4,233 9,013 8,329 Professional and regulatory fees 2,865 3,158 3,017 3,401 3,086 6,023 6,527 Data processing and software expense 3,386 2,921 2,597 2,494 2,536 6,307 4,855 Marketing 2,306 1,187 1,443 1,151 1,841 3,493 2,750 Amortization of intangibles 2,495 2,495 2,494 2,509 2,517 4,990 5,054 Telephone and communications 352 385 380 380 337 737 674 Merger and acquisition (“M&A”) expense 295 700 826 — — 995 — Other 5,034 3,696 4,521 3,886 3,716 8,730 6,742 Total noninterest expense 48,153 46,572 45,077 41,321 41,717 94,725 81,314 Income before income tax expense 37,705 41,572 52,203 46,030 37,293 79,277 78,073 Income tax expense 8,079 8,102 10,697 9,195 7,837 16,181 16,830 Net income $ 29,626 $ 33,470 $ 41,506 $ 36,835 $ 29,456 $ 63,096 $ 61,243 Net income available to common stockholders $ 29,626 $ 33,470 $ 41,506 $ 36,835 $ 29,456 $ 63,096 $ 61,243 Basic EPS $ 0.55 $ 0.66 $ 0.84 $ 0.75 $ 0.60 $ 1.21 $ 1.24 Diluted EPS $ 0.54 $ 0.65 $ 0.82 $ 0.73 $ 0.59 $ 1.19 $ 1.22 Weighted average basic shares outstanding 53,949 50,695 49,329 49,423 49,476 52,331 49,435 Weighted average diluted shares outstanding 54,646 51,571 50,441 50,306 50,331 53,121 50,187 VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)For the Quarter Ended June 30, 2022 March 31, 2022 June 30, 2021 Average
Outstanding
BalanceInterest
Earned/
Interest
PaidAverage
Yield/
RateAverage
Outstanding
BalanceInterest
Earned/
Interest
PaidAverage
Yield/
RateAverage
Outstanding
BalanceInterest
Earned/
Interest
PaidAverage
Yield/
Rate(In thousands, expect percentages) Assets Interest-earning assets: Loans1 $ 7,547,564 $ 78,234 4.16 % $ 6,872,943 $ 68,297 4.03 % $ 6,108,527 $ 63,427 4.16 % LHI, MW 479,187 3,929 3.29 421,680 3,069 2.95 455,334 3,476 3.06 PPP loans 11,402 28 1.00 31,335 77 1.00 364,020 911 1.00 Debt securities 1,318,502 9,632 2.93 1,140,834 7,762 2.76 1,095,678 7,529 2.76 Interest-bearing deposits in other banks 369,847 714 0.77 554,864 262 0.19 548,087 167 0.12 Equity securities and other investments 167,327 1,057 2.53 190,002 910 1.94 87,413 672 3.08 Total interest-earning assets 9,893,829 93,594 3.79 9,211,658 80,377 3.54 8,659,059 76,182 3.53 ACL (74,268 ) (77,843 ) (105,050 ) Noninterest-earning assets 892,102 865,107 767,270 Total assets $ 10,711,663 $ 9,998,922 $ 9,321,279 Liabilities and Stockholders’ Equity Interest-bearing liabilities: Interest-bearing demand and savings deposits $ 3,770,098 $ 4,094 0.44 % $ 3,471,645 $ 1,751 0.20 % $ 3,191,405 $ 1,661 0.21 % Certificates and other time deposits 1,459,690 1,465 0.40 1,501,852 1,380 0.37 1,515,092 2,423 0.64 Advances from FHLB 828,769 834 0.40 777,538 1,547 0.81 777,655 1,829 0.94 Subordinated debentures and subordinated notes 232,043 2,721 4.70 231,875 2,659 4.65 264,931 3,138 4.75 Total interest-bearing liabilities 6,290,600 9,114 0.58 5,982,910 7,337 0.50 5,749,083 9,051 0.63 Noninterest-bearing liabilities: Noninterest-bearing deposits 2,870,692 2,591,504 2,266,470 Other liabilities 102,994 67,060 51,355 Total liabilities 9,264,286 8,641,474 8,066,908 Stockholders’ equity 1,447,377 1,357,448 1,254,371 Total liabilities and stockholders’ equity $ 10,711,663 $ 9,998,922 $ 9,321,279 Net interest rate spread2 3.21 % 3.04 % 2.90 % Net interest income and margin3 84,480 3.42 % 73,040 3.22 % 67,131 3.11 % 1 Includes average outstanding balances of loans held for sale of $12,112, $12,769 and $14,364 for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively, and average balances of LHI, excluding MW and PPP loans.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(In thousands except percentages)Six Months Ended June 30, 2022 June 30, 2021 Average
Outstanding
BalanceInterest
Earned/
Interest
PaidAverage
Yield/
RateAverage
Outstanding
BalanceInterest
Earned/
Interest
PaidAverage
Yield/
RateAssets Interest-earning assets: Loans1 $ 7,205,954 $ 146,500 4.10 % $ 6,003,754 $ 126,128 4.24 % LHI, WH 450,592 6,998 3.13 482,853 7,292 3.05 PPP loans 27,477 136 1.00 360,209 1,793 1.00 Debt securities 1,230,159 17,394 2.85 1,079,697 14,966 2.80 Interest-bearing deposits in other banks 461,844 976 0.43 445,356 294 0.13 Equity securities and other investments 178,602 1,967 2.22 87,296 1,335 3.08 Total interest-earning assets 9,554,628 173,971 3.67 8,459,165 151,808 3.62 ACL (76,046 ) (105,509 ) Noninterest-earning assets 878,679 778,691 Total assets $ 10,357,261 $ 9,132,347 Liabilities and Stockholders’ Equity Interest-bearing liabilities: Interest-bearing demand and savings deposits $ 3,621,697 $ 5,845 0.33 % $ 3,115,417 $ 3,641 0.24 % Certificates and other time deposits 1,480,654 2,845 0.39 1,512,479 5,484 0.73 Advances from FHLB 803,295 2,381 0.60 777,675 3,641 0.94 Subordinated debentures and subordinated notes 231,959 5,380 4.68 265,142 6,276 4.77 Total interest-bearing liabilities 6,137,605 16,451 0.54 5,670,713 19,042 0.68 Noninterest-bearing liabilities: Noninterest-bearing deposits 2,731,869 2,168,396 Other liabilities 85,126 53,823 Total liabilities 8,954,600 7,892,932 Stockholders’ equity 1,402,661 1,239,415 Total liabilities and stockholders’ equity $ 10,357,261 $ 9,132,347 Net interest rate spread2 3.13 % 2.94 % Net interest income and margin3 $ 157,520 3.32 % $ 132,766 3.16 % 1 Includes average outstanding balances of loans held for sale of $12,440 and $15,476 for the six months ended June 30, 2022 and June 30, 2021, respectively, and average balances of LHI, excluding MW and PPP loans.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial HighlightsYield Trend
For the Quarter Ended Jun 30,
2022Mar 31,
2022Dec 31,
2021Sep 30,
2021Jun 30,
2021Average yield on interest-earning assets: Loans1 4.16 % 4.03 % 4.12 % 4.16 % 4.16 % LHI, MW 3.29 2.95 2.98 3.15 3.06 PPP loans 1.00 1.00 1.00 1.00 1.00 Debt securities 2.93 2.76 3.47 2.70 2.76 Interest-bearing deposits in other banks 0.77 0.19 0.16 0.15 0.12 Equity securities and other investments 2.53 1.94 2.09 2.13 3.08 Total interest-earning assets 3.79 % 3.54 % 3.72 % 3.64 % 3.53 % Average rate on interest-bearing liabilities: Interest-bearing demand and savings deposits 0.44 % 0.20 % 0.19 % 0.20 % 0.21 % Certificates and other time deposits 0.40 0.37 0.41 0.50 0.64 Advances from FHLB 0.40 0.81 0.94 0.94 0.94 Subordinated debentures and subordinated notes 4.70 4.65 4.62 4.70 4.75 Total interest-bearing liabilities 0.58 % 0.50 % 0.54 % 0.59 % 0.63 % Net interest rate spread2 3.21 % 3.04 % 3.18 % 3.05 % 2.90 % Net interest margin3 3.42 % 3.22 % 3.37 % 3.26 % 3.11 %
1Includes average outstanding balances of loans held for sale of $12,112, $12,769, $8,987, $8,542 and $14,364 for the three months ended June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021, respectively, and average balances of LHI, excluding MW and PPP loans.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.
Supplemental Yield TrendFor the Quarter Ended Jun 30,
2022Mar 31,
2022Dec 31,
2021Sep 30,
2021Jun 30,
2021Average cost of interest-bearing deposits 0.43 % 0.26 % 0.26 % 0.30 % 0.35 % Average costs of total deposits, including noninterest-bearing 0.28 0.17 0.18 0.20 0.23 VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)LHI and Deposit Portfolio Composition
Jun 30,
2022Mar 31,
2022Dec 31,
2021Sep 30,
2021Jun 30,
2021(In thousands, expect percentages) LHI1 Commercial $ 2,450,403 30.9 % $ 2,125,900 29.8 % $ 2,006,876 29.6 % $ 1,793,740 27.1 % $ 1,771,100 28.2 % Real Estate: Owner occupied commercial (“OOCRE”) 646,723 8.2 633,615 8.9 665,537 9.8 711,476 10.7 744,899 11.9 Non-owner occupied commercial (“NOOCRE”) 2,203,970 27.8 2,145,826 30.0 2,120,309 31.3 2,194,438 33.1 1,986,538 31.6 Construction and land 1,532,997 19.3 1,297,338 18.2 1,062,144 15.7 936,174 14.1 871,765 13.9 Farmland 47,319 0.6 48,095 0.7 55,827 0.8 73,550 1.1 13,661 0.2 1-4 family residential 765,260 9.6 604,408 8.5 542,566 8.0 543,518 8.2 513,635 8.2 Multi-family residential 276,632 3.5 272,250 3.8 310,241 4.6 356,885 5.4 367,445 5.9 Consumer 7,520 0.1 9,533 0.1 11,998 0.2 14,266 0.3 10,530 0.1 Total LHI $ 7,930,824 100 % $ 7,136,965 100 % $ 6,775,498 100 % $ 6,624,047 100 % $ 6,279,573 100 % MW 629,291 542,877 565,645 615,045 559,939 PPP loans 7,339 18,512 53,369 135,842 291,401 Total LHI1 $ 8,567,454 $ 7,698,354 $ 7,394,512 $ 7,374,934 $ 7,130,913 Deposits Noninterest-bearing $ 2,947,830 34.6 % $ 2,765,895 35.1 % $ 2,510,723 34.1 % $ 2,302,925 32.1 % $ 2,388,068 34.1 % Interest-bearing transaction 660,557 7.8 599,580 7.6 579,408 7.9 514,537 7.2 451,307 6.5 Money market 3,217,195 37.8 2,958,790 37.5 2,568,843 34.9 2,585,926 36.0 2,539,061 36.4 Savings 129,498 1.5 129,922 1.6 128,061 1.7 127,843 1.8 122,606 1.8 Certificates and other time deposits 1,562,626 18.3 1,435,409 18.2 1,576,580 21.4 1,647,521 22.9 1,477,860 21.2 Total deposits $ 8,517,706 100 % $ 7,889,596 100 % $ 7,363,615 100 % $ 7,178,752 100 % $ 6,978,902 100 % Loan to Deposit Ratio 100.6 % 97.6 % 100.4 % 102.7 % 102.2 % Loan to Deposit Ratio, excluding MW and PPP loans 93.1 % 90.5 % 92.0 % 92.3 % 90.0 % 1 Total LHI does not include deferred fees of $15.0 million, $11.5 million, $9.5 million, $8.1 million and $7.5 million at June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021, respectively.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Asset QualityFor the Quarter Ended For the Six Months Ended Jun 30,
2022Mar 31,
2022Dec 31,
2021Sep 30,
2021Jun 30,
2021Jun 30,
2022Jun 30,
2021(In thousands) NPAs: Nonaccrual loans $ 42,242 $ 46,680 $ 49,687 $ 72,317 $ 76,994 $ 42,242 $ 76,994 Accruing loans 90 or more days past due1 1,753 264 441 1,711 462 1,753 462 Total nonperforming loans held for investment (“NPLs”) 43,995 46,944 50,128 74,028 77,456 43,995 77,456 OREO 1,032 1,062 — — 2,467 1,032 2,467 Total NPAs $ 45,027 $ 48,006 $ 50,128 $ 74,028 $ 79,923 $ 45,027 $ 79,923 Charge-offs: 1-4 family residential $ — $ — $ — $ (64 ) $ (300 ) $ — $ (315 ) OOCRE (244 ) (1,341 ) (898 ) (813 ) (689 ) (1,585 ) (689 ) NOOCRE — (553 ) (7,936 ) — — (553 ) — Commercial (528 ) (3,294 ) (4,114 ) (5,508 ) (5,608 ) (3,822 ) (5,954 ) Consumer (1,091 ) (134 ) (44 ) (17 ) (20 ) (1,225 ) (38 ) Total charge-offs (1,863 ) (5,322 ) (12,992 ) (6,402 ) (6,617 ) (7,185 ) (6,996 ) Recoveries: 1-4 family residential 3 — 6 26 29 3 32 OOCRE 245 — — — 500 245 500 NOOCRE 93 400 — — — 493 — Commercial 572 144 61 596 659 716 885 Consumer 41 9 257 8 36 50 38 Total recoveries 954 553 324 630 1,224 1,507 1,455 Net charge-offs $ (909 ) $ (4,769 ) $ (12,668 ) $ (5,772 ) $ (5,393 ) $ (5,678 ) $ (5,541 ) ACL $ 80,576 $ 72,485 $ 77,754 $ 93,771 $ 99,543 $ 80,576 $ 99,543 Asset Quality Ratios: NPAs to total assets 0.40 % 0.46 % 0.51 % 0.77 % 0.85 % 0.40 % 0.85 % NPLs to total LHI, excluding MW and PPP loans 0.55 0.66 0.74 1.12 1.23 0.55 1.23 ACL to total LHI, excluding MW and PPP loans 1.02 1.02 1.15 1.42 1.59 1.02 1.59 Net charge-offs to average loans outstanding 0.01 0.07 0.19 0.09 0.09 0.08 0.09 1 Accruing loans greater than 90 days past due exclude purchase credit deteriorated loans greater than 90 days past due that are accounted for on a pooled basis.
VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)We identify certain financial measures discussed in this earnings release as being “non-GAAP financial measures.” In accordance with SEC rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles as in effect from time to time in the United States (“GAAP”), in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios calculated using exclusively either one or both of (i) financial measures calculated in accordance with GAAP and (ii) operating measures or other measures that are not non-GAAP financial measures.
The non-GAAP financial measures that we present in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we present in this earnings release may differ from that of other companies reporting measures with similar names. You should understand how such other financial institutions calculate their financial measures that appear to be similar or have similar names to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures.
Tangible Book Value Per Common Share. Tangible book value is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by number of common shares outstanding. For tangible book value per common share, the most directly comparable financial measure calculated in accordance with GAAP is book value per common share.
We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.
The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:
As of Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 (Dollars in thousands, except per share data) Tangible Common Equity Total stockholders' equity $ 1,429,442 $ 1,447,996 $ 1,315,079 $ 1,284,160 $ 1,272,907 Adjustments: Goodwill (404,452 ) (404,452 ) (403,771 ) (370,840 ) (370,840 ) Core deposit intangibles (43,122 ) (45,560 ) (47,998 ) (50,436 ) (52,873 ) Tangible common equity $ 981,868 $ 997,984 $ 863,310 $ 862,884 $ 849,194 Common shares outstanding 53,951 53,907 49,372 49,229 49,498 Book value per common share $ 26.50 $ 26.86 $ 26.64 $ 26.09 $ 25.72 Tangible book value per common share $ 18.20 $ 18.51 $ 17.49 $ 17.53 $ 17.16 VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity, less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For tangible common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total stockholders’ equity to total assets.
We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, in each case, exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing both total stockholders’ equity and assets while not increasing our tangible common equity or tangible assets.
The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:
As of Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 (Dollars in thousands) Tangible Common Equity Total stockholders' equity $ 1,429,442 $ 1,447,996 $ 1,315,079 $ 1,284,160 $ 1,272,907 Adjustments: Goodwill (404,452 ) (404,452 ) (403,771 ) (370,840 ) (370,840 ) Core deposit intangibles (43,122 ) (45,560 ) (47,998 ) (50,436 ) (52,873 ) Tangible common equity $ 981,868 $ 997,984 $ 863,310 $ 862,884 $ 849,194 Tangible Assets Total assets $ 11,304,811 $ 10,453,680 $ 9,757,249 $ 9,572,300 $ 9,349,525 Adjustments: Goodwill (404,452 ) (404,452 ) (403,771 ) (370,840 ) (370,840 ) Core deposit intangibles (43,122 ) (45,560 ) (47,998 ) (50,436 ) (52,873 ) Tangible Assets $ 10,857,237 $ 10,003,668 $ 9,305,480 $ 9,151,024 $ 8,925,812 Tangible Common Equity to Tangible Assets 9.04 % 9.98 % 9.28 % 9.43 % 9.51 % VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)Return on Average Tangible Common Equity. Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) net income available for common stockholders adjusted for amortization of core deposit intangibles (which we refer to as “return”) as net income, plus amortization of core deposit intangibles, less tax benefit at the statutory rate; (b) average tangible common equity as total average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.
We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of core deposit intangibles. Goodwill and core deposit intangibles have the effect of increasing total stockholders’ equity while not increasing our tangible common equity. This measure is particularly relevant to acquisitive institutions that may have higher balances in goodwill and core deposit intangibles than non-acquisitive institutions.
The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income available for common stockholders adjusted for amortization of core deposit intangibles, net of taxes to net income and presents our return on average tangible common equity:
For the Quarter Ended For the Six Months Ended June 30,
2022Mar 31,
2022Dec 31,
2021Sep 30,
2021Jun 30,
2021June 30,
2022June 30,
2021(Dollars in thousands) Net income available for common stockholders adjusted for amortization of core deposit intangibles Net income $ 29,626 $ 33,470 $ 41,506 $ 36,835 $ 29,456 $ 63,096 $ 61,243 Adjustments: Plus: Amortization of core deposit intangibles 2,438 2,438 2,438 2,438 2,438 4,876 4,885 Less: Tax benefit at the statutory rate 512 512 512 512 512 1,024 1,026 Net income available for common stockholders adjusted for amortization of core deposit intangibles $ 31,552 $ 35,396 $ 43,432 $ 38,761 $ 31,382 $ 66,948 $ 65,102 Average Tangible Common Equity Total average stockholders' equity $ 1,447,377 $ 1,357,448 $ 1,301,676 $ 1,290,528 $ 1,254,371 $ 1,402,661 $ 1,239,415 Adjustments: Average goodwill (404,452 ) (404,014 ) (393,220 ) (370,840 ) (370,840 ) (404,234 ) (370,840 ) Average core deposit intangibles (44,720 ) (47,158 ) (49,596 ) (52,043 ) (54,471 ) (45,932 ) (55,685 ) Average tangible common equity $ 998,205 $ 906,276 $ 858,860 $ 867,645 $ 829,060 $ 952,495 $ 812,890 Return on Average Tangible Common Equity (Annualized) 12.68 % 15.84 % 20.06 % 17.72 % 15.18 % 14.17 % 16.15 % VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Assets, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings, pre-tax, pre-provision operating earnings and the performance metrics calculated using these metrics, listed below, are non-GAAP measures used by management to evaluate the Company’s financial performance. We calculate (a) operating earnings as net income plus severance payments, plus loss on sale of debt securities AFS, net, less Thrive PPP loan forgiveness income, plus M&A expenses, less tax impact of adjustments, plus nonrecurring tax adjustments. We calculate (b) diluted operating earnings per share as operating earnings as described in clause (a) divided by weighted average diluted shares outstanding. We calculate (c) pre-tax, pre-provision operating earnings as operating earnings as described in clause (a) plus provision for income taxes, plus provision (benefit) for credit losses and unfunded commitments. We calculate (d) pre-tax, pre-provision operating return on average assets as pre-tax, pre-provision operating earnings as described in clause (a) divided by total average assets. We calculate (e) operating return on average assets as operating earnings as described in clause (a) divided by total average assets. We calculate (f) operating return on average tangible common equity as operating earnings as described in clause (a), adjusted for the amortization of intangibles and tax benefit at the statutory rate, divided by total average tangible common equity (average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization). We calculate (g) operating efficiency ratio as non interest expense plus adjustments to operating non interest expense divided by non interest income plus adjustments to operating non interest income, plus net interest income.
We believe that these measures and the operating metrics calculated utilizing these measures are important to management and many investors in the marketplace who are interested in understanding the ongoing operating performance of the Company and provide meaningful comparisons to its peers.
The following tables reconcile, as of the dates set forth below, operating net income and pre-tax, pre-provision operating earnings and related metrics:
For the Quarter Ended For the Six Months Ended June 30,
2022Mar 31,
2022Dec 31,
2021Sep 30,
2021Jun 30,
2021June 30,
2022June 30,
2021(Dollars in thousands) Operating Earnings Net income $ 29,626 $ 33,470 $ 41,506 $ 36,835 $ 29,456 $ 63,096 $ 61,243 Plus: Severance payments1 — — — — 627 — 627 Plus: Loss on sale of debt securities AFS, net — — — 188 — — — Less: Thrive PPP loan forgiveness income2 — — — 1,912 — — — Plus: M&A expenses 295 700 826 — — 995 — Operating pre-tax income 29,921 34,170 42,332 35,111 30,083 64,091 61,870 Less: Tax impact of adjustments 66 156 (78 ) 39 131 222 131 Plus: Nonrecurring tax adjustments3 — — — — — — 426 Operating earnings $ 29,855 $ 34,014 $ 42,410 $ 35,072 $ 29,952 $ 63,869 $ 62,165 Weighted average diluted shares outstanding 54,646 51,571 50,441 50,306 50,331 53,121 50,187 Diluted EPS $ 0.54 $ 0.65 $ 0.82 $ 0.73 $ 0.59 $ 1.19 $ 1.22 Diluted operating EPS $ 0.55 $ 0.66 $ 0.84 $ 0.70 $ 0.60 1.20 1.24 1 Severance payments relate to branch restructurings made during the three months ended June 30, 2021.
2 During the third quarter of 2021, Thrive’s PPP loan with another bank was 100% forgiven by the Small Business Administration. As a result of our 49% investment in Thrive, the $1.9 million represents our portion of the PPP loan forgiveness. PPP fee income is not taxable and as such has no tax impact.
3 A nonrecurring tax adjustment of $426 thousand recorded in the first quarter of 2021 was due to a true-up of a deferred tax liability.For the Quarter Ended For the Six Months Ended June 30,
2022Mar 31,
2022Dec 31,
2021Sep 30,
2021Jun 30,
2021June 30,
2022June 30,
2021(Dollars in thousands) Pre-Tax, Pre-Provision Operating Earnings Net income $ 29,626 $ 33,470 $ 41,506 $ 36,835 $ 29,456 $ 63,096 $ 61,243 Plus: Provision for income taxes 8,079 8,102 10,697 9,195 7,837 16,181 16,830 Plus: Provision (benefit) for credit losses and unfunded commitments 9,000 (7 ) (4,389 ) (448 ) 577 8,993 7 Plus: Severance payments — — — — 627 — 627 Plus: Loss on sale of AFS securities, net — — — 188 — — — Less: Thrive PPP loan forgiveness income — — — 1,912 — — Plus: M&A expenses 295 700 826 — — 995 — Pre-tax, pre-provision operating earnings $ 47,000 $ 42,265 $ 48,640 $ 43,858 $ 38,497 $ 89,265 $ 78,707 Average total assets $ 10,711,663 $ 9,998,922 $ 9,788,671 $ 9,385,470 $ 9,321,279 $ 10,357,261 $ 9,132,347 Pre-tax, pre-provision operating return on average assets1 1.76 % 1.71 % 1.97 % 1.85 % 1.66 % 1.74 % 1.74 % Average total assets $ 10,711,663 $ 9,998,922 $ 9,788,671 $ 9,385,470 $ 9,321,279 $ 10,357,261 $ 9,132,347 Return on average assets1 1.11 % 1.36 % 1.68 % 1.56 % 1.27 % 1.23 % 1.35 % Operating return on average assets1 1.12 1.38 1.72 1.48 1.29 1.24 1.37 Operating earnings adjusted for amortization of core deposit intangibles Operating earnings $ 29,855 $ 34,014 $ 42,410 $ 35,072 $ 29,952 $ 63,869 $ 62,165 Adjustments: Plus: Amortization of core deposit intangibles 2,438 2,438 2,438 2,438 2,438 4,876 4,885 Less: Tax benefit at the statutory rate 512 512 512 512 512 1,024 1,026 Operating earnings adjusted for amortization of core deposit intangibles $ 31,781 $ 35,940 $ 44,336 $ 36,998 $ 31,878 $ 67,721 $ 66,024 Average Tangible Common Equity Total average stockholders' equity $ 1,447,377 $ 1,357,448 $ 1,301,676 $ 1,290,528 $ 1,254,371 $ 1,402,661 $ 1,239,415 Adjustments: Less: Average goodwill (404,452 ) (404,014 ) (393,220 ) (370,840 ) (370,840 ) (404,234 ) (370,840 ) Less: Average core deposit intangibles (44,720 ) (47,158 ) (49,596 ) (52,043 ) (54,471 ) (45,932 ) (55,685 ) Average tangible common equity $ 998,205 $ 906,276 $ 858,860 $ 867,645 $ 829,060 $ 952,495 $ 812,890 Operating return on average tangible common equity1 12.77 % 16.08 % 20.48 % 16.92 % 15.42 % 14.34 % 16.38 % Efficiency ratio 50.76 % 52.84 % 48.53 % 47.55 % 52.42 % 51.76 % 51.01 % Net interest income $ 84,480 $ 73,040 $ 76,741 $ 71,276 $ 67,131 $ 157,520 $ 132,766 Noninterest income 10,378 15,097 16,150 15,627 12,456 25,475 26,628 Plus: Loss on sale of AFS securities, net — — — 188 — — — Less: Thrive PPP loan forgiveness income — — — 1,912 — — — Operating noninterest income 10,378 15,097 16,150 13,903 12,456 25,475 26,628 Noninterest expense 48,153 46,572 45,077 41,321 41,717 94,725 81,314 Less: Severance payments — — — — 627 — 627 Less: M&A expenses 295 700 826 — — 995 — Operating noninterest expense $ 47,858 $ 45,872 $ 44,251 $ 41,321 $ 41,090 $ 93,730 $ 80,687 Operating efficiency ratio 50.45 % 52.05 % 47.64 % 48.51 % 51.63 % 51.22 % 50.62 % 1 Annualized ratio for quarterly metrics.
Media and Investor Relations: investorrelations@veritexbank.com
