Veritex Holdings, Inc. Reports First Quarter 2025 Operating Results

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

DALLAS, April 22, 2025 (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 March 31, 2025.

"We continue to strengthen our balance sheet in support of our clients during a time of change and uncertainty,” said C. Malcolm Holland, III, the Company's Chairman and Chief Executive Officer. "Key operating financial and credit performance metrics continue to improve and we remain focused on producing previously communicated 2025 goals, including a ROAA that exceeds 1%. Our focus also remains on disciplined loan growth, which is an industry wide challenge in the current environment.”

¹ Annualized ratio.

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

Other First Quarter Financial, Credit and Company Highlights

• Net interest margin ("NIM”) increased by 11 bps to 3.31%;
• Criticized assets decreased approximately $17.7 million during the quarter;
• Redeemed $75.0 million in subordinated notes on February 18, 2025, the associated rate of which switched from fixed to floating, SOFR + 347 bps, on November 15, 2024;
• Total loan to deposit ratio declined to 88.9% as of March 31, 2025, compared to 89.3% as of December 31, 2024 and 91.7% as of March 31, 2024;
• Repurchased 377,346 shares of our common stock, for approximately $9.5 million, during the quarter, which amounts to 555,016 total shares repurchased, for approximately $13.1 million, under the current Stock Buyback Program;
• Announced the extension of the Stock Buyback Program through March 31, 2026;
• Book value per share increased $0.71 to $30.08 and tangible book value (non-GAAP) per share increased $0.72 to $22.33;
• Allowance for credit losses ("ACL”) to total loans held for investment ("LHI”) increased to 1.19%, compared to 1.18% as of December 31, 2024 and 1.15% as of March 31, 2024; and
• Declared and increased our quarterly cash dividend to $0.22 per share of outstanding common stock payable on May 22, 2025.

Results of Operations for the Three Months Ended March 31, 2025

Net Interest Income

For the three months ended March 31, 2025, net interest income before provision for credit losses was $95.4 million and NIM was 3.31% compared to $96.1 million and 3.20%, respectively, for the three months ended December 31, 2024. The approximately $700 thousand decrease, or 0.7%, in net interest income before provision for credit losses was primarily due to a $8.5 million decrease in interest income on loans and a $2.6 million decrease in interest income on deposits in financial institutions and fed funds sold partially offset by a $10.0 million decrease in interest expense on certificates and other time deposits during the three months ended March 31, 2025, compared to the three months ended December 31, 2024. NIM increased 11 bps compared to the three months ended December 31, 2024, primarily due to a decrease in funding costs on deposits and the redemption of $75.0 million of subordinated notes during the three months ended March 31, 2025, partially offset by a decrease in loan yields and average balances.

Compared to the three months ended March 31, 2024, net interest income before provision for credit losses for the three months ended March 31, 2025 increased by $2.6 million, or 2.8%. The increase was primarily due to decreases in interest expense including $10.2 million on certificates and other time deposits, $1.6 million on transaction and savings deposits and $1.4 million on advances from the Federal Home Loan Bank ("FHLB”), as well as increases in interest income of $1.2 million on deposits in financial institutions and fed funds sold and $3.4 million on debt securities. The increase was partially offset by a $15.4 million decrease in interest income on loans. NIM increased 7 bps from 3.24% for the three months ended March 31, 2024 to 3.31% for the three months ended March 31, 2025. The increase was primarily due to decreased funding costs on deposits and advances resulting from interest rate cuts for the year over year period, partially offset by the related declines in rates earned on interest-earnings assets, primarily loans and interest-bearing deposits in other banks.

Noninterest Income

Noninterest income for the three months ended March 31, 2025 was $14.3 million, an increase of $4.2 million, or 42.1%, compared to the three months ended December 31, 2024. The change was primarily due to the $4.4 million loss on sales of debt securities recognized in the three months ended December 31, 2024 with no corresponding loss recorded in the three months ended March 31, 2025. In addition, there was a $1.5 million increase in other noninterest income, driven by a $1.2 million increase in loan servicing income and a $492 thousand increase in equity securities income recognized during the three months ended March 31, 2025 compared to the three months ended December 31, 2024. The increase was partially offset by a $2.1 million decrease in government guaranteed loan income, net, as well as lower BOLI income during the period due to $517 thousand in charges on BOLI policies exchanged under a 1035 exchange which is tax-free under the Internal Revenue Code.

Compared to the three months ended March 31, 2024, noninterest income for the three months ended March 31, 2025 increased by $7.6 million, or 114.5%. The increase was primarily due to a $6.3 million loss on sales of debt securities recognized in the three months ended March 31, 2024 with no corresponding loss recorded in the three months ended March 31, 2025. In addition, there was a $715 thousand increase in service charge and fee income and a $687 thousand increase in government guaranteed loan income for the year over year period.

Noninterest Expense

Noninterest expense was $66.8 million for the three months ended March 31, 2025, compared to $71.2 million for the three months ended December 31, 2024, a decrease of $4.4 million, or 6.1%. The decrease was primarily due to an $822 thousand decrease in salaries and employee benefits primarily due to lower severance costs, offset by an increase in payroll taxes, which are historically higher in the first quarter, a $1.7 million decrease in other noninterest expense primarily driven by lower earnings credit rebates, a $864 thousand decrease in marketing expenses, a $633 thousand decrease in professional and regulatory fees and a $338 thousand decrease in data processing and software costs compared to the three months ended December 31, 2024.

Compared to the three months ended March 31, 2024, noninterest expense for the three months ended March 31, 2025 increased by $4.7 million, or 7.6%. The increase was primarily due to a $3.3 million increase in salaries and employee benefits primarily due a $4.1 million increase in salaries expense and incentives accruals, offset by $1.4 million in higher deferred loan origination costs, which reduce salaries and employee benefit expenses. In addition, there was a $1.5 million increase in other noninterest expense, driven primarily by higher OREO expenses, a $547 thousand increase in data processing and software expense and a $486 thousand increase in marketing expenses. The increase was partially offset by a $1.1 million decrease in professional and regulatory fees compared to the three months ended March 31, 2024.

Income Tax

Income tax expense for the three months ended March 31, 2025 totaled $8.5 million, an increase of $304 thousand, or 3.7%, compared to the three months ended December 31, 2024. The Company's effective tax rate was approximately 22.7% for the three months ended March 31, 2025 and was due to the recognition of an excess tax expense realized on share-based payment awards.

Financial Condition

Total LHI was $8.83 billion at March 31, 2025, a decrease of $70.5 million compared to December 31, 2024.

Total deposits were $10.67 billion at March 31, 2025, a decrease of $87.5 million, or 3.3% linked quarter annualized. The decrease was primarily the result of decreases of $279.6 million in certificates and other time deposits and $54.4 million in correspondent money market accounts, partially offset by increases of $127.2 million in noninterest bearing deposits and $119.3 million in interest-bearing transaction and savings deposits.

Credit Quality

Nonperforming assets ("NPAs”) totaled $96.9 million, or 0.77% of total assets, of which $72.6 million represents LHI and $24.3 million represents OREO at March 31, 2025, compared to $79.2 million, or 0.62% of total assets, at December 31, 2024. The Company had net charge-offs of $4.0 million for the three months ended March 31, 2025. Annualized net charge-offs to average loans outstanding were 17 bps for the three months ended March 31, 2025, compared to 32 bps and 22 bps for the three months ended December 31, 2024 and March 31, 2024, respectively.

ACL as a percentage of LHI was 1.19%, 1.18% and 1.15% at March 31, 2025, December 31, 2024 and March 31, 2024, respectively. The Company recorded a provision for credit losses on loans of $4.0 million, $2.3 million and $7.5 million for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively. The recorded provision for credit losses for the three months ended March 31, 2025, compared to the three months ended December 31, 2024, was primarily attributable to an increase in general reserves as a result of changes in economic factors which now represents 95% of the total ACL. The balance for unfunded commitments increased to $7.4 million as of March 31, 2025, compared to $6.1 million at December 31, 2024 and we recorded a $1.3 million provision for unfunded commitments for the three months ended March 31, 2025, compared to a $401 thousand benefit for unfunded commitments for the three months ended December 31, 2024 and a $1.5 million benefit for unfunded commitments for the three months ended March 31, 2024.

Dividend Information

After the close of the market on Tuesday, April 22, 2025, Veritex's Board of Directors declared a quarterly cash dividend of $0.22 per share on its outstanding shares of common stock. The dividend will be paid on or after May 22, 2025 to stockholders of record as of the close of business on May 8, 2025.

Non-GAAP Financial Measures

Veritex's management uses certain non-GAAP (U.S. generally accepted accounting principles) financial measures to evaluate its operating performance and provide information that is important to investors. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, Veritex's reported results prepared in accordance with GAAP. Specifically, Veritex reviews and reports tangible book value per common share of the Company; operating earnings; tangible common equity to tangible assets; return on average tangible common equity; pre-tax, pre-provision operating earnings; pre-tax, pre-provision operating return on average assets; pre-tax, pre-provision operating return on average loans; diluted operating earnings per share; operating return on average assets; operating return on average tangible common equity; and operating efficiency ratio. Veritex has included in this earnings release information related to these non-GAAP financial measures for the applicable periods presented. Please refer to "Reconciliation of Non-GAAP Financial Measures” after the financial highlights at the end of this earnings release for a reconciliation of these non-GAAP financial measures.

Conference Call

The Company will host an investor conference call and webcast to review the results on Wednesday, April 23, 2025, at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/7qpcarsr/ and will receive a unique PIN, which can be used when dialing in for the call.

Participants may also register via teleconference: https://register-conf.media-server.com/register/BIcb9226ec9df94b1bbbc063029950af5d. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.

A replay will be available within approximately two hours after the completion of the call, and made accessible for one week thereafter. You may access the replay via webcast through the investor relations section of Veritex's website.

About Veritex Holdings, Inc.

Headquartered in Dallas, Texas, Veritex is a bank holding company that conducts banking activities through its wholly owned subsidiary, Veritex Community Bank, with locations throughout the Dallas-Fort Worth metroplex and in the Houston metropolitan area. Veritex Community Bank is a Texas state chartered bank regulated by the Texas Department of Banking and the Board of Governors of the Federal Reserve System. For more information, visit www.veritexbank.com.

Forward-Looking Statements

This earnings release includes "forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors, which change over time and are beyond our control, that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to the expected payment of Veritex Holdings, Inc.'s ("Veritex”) quarterly cash dividend; the impact of certain changes in Veritex's accounting policies, standards and interpretations; turmoil in the banking industry, responsive measures to mitigate and manage such turmoil and related supervisory and regulatory actions and costs; and Veritex's future financial performance, business and growth strategy, projected plans and objectives, as well as other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words "believes,” "expects,” "anticipates,” "intends,” "projects,” "estimates,” "seeks,” "targets,” "outlooks,” "plans” and similar expressions or future or conditional verbs such as "will,” "should,” "would,” "may” and "could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. We refer you to the "Risk Factors” and "Management's Discussion and Analysis of Financial Condition and Results of Operations” sections of Veritex's Annual Report on Form 10-K for the year ended December 31, 2024, 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.