DALLAS, Jan. 23, 2024 (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 fourth quarter and full year of 2023.

"Looking back at 2023, I am extremely proud of the ability of our team, in a volatile economic environment, to remain disciplined on our strategic plan and strengthen our balance sheet", said C. Malcolm Holland, III. "This team achieved deposit growth of $1.2 billion in 2023, increased CET1 to 10.3% and decreased our LDR below 94%. Market volatility brings many challenges and opportunities that this Company has navigated with great precision."

2023 Highlights:

Total deposits grew $141.7 million for the fourth quarter of 2023, or 5.6% annualized. Total deposits grew $1.2 billion, or 13.3%, year-over-year;
Loan to deposit ratio decreased to 93.6% as of December 31, 2023 compared to 104.4% as of December 31, 2022;
Common equity tier 1 capital increased 120 bps to 10.29% as of December 31, 2023 compared to 9.09% as of December 31, 2022;
Tangible book value per common share increased 8.4%, or $1.57, during 2023 compared to 2022, and including dividends increased 12.7%, or $2.37;
Allowance for credit losses ("ACL") to total loans increased to 1.14%, or 18 bps from 0.96% compared to December 31, 2022;
Non-owner office book decreased $78 million, or 12.1%, during 2023 and represents 5.8% of total assets;
Pre-tax, pre-provision operating return on average assets was 1.81% for 2023;
Total unfunded Acquisition, Development, and Construction ("ADC") decreased to $900.0 million, or approximately 57%, as of December 31, 2023 compared to $2.1 billion as of December 31, 2022, and risk-weighted assets decreased $612.2 million, or 5.1%, during 2023 compared to 2022;
Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on February 23, 2024;.and
Named one of the "Best Companies to Work For" by the 2023 Inaugural U.S. News & World Report which evaluates companies based on quality of pay, work/life balance, and opportunities for professional development and advancement.

*Financial Highlights*	Fourth Quarter 2023			Third Quarter 2023			Fourth Quarter 2022			Full Year 2023			Full Year 2022
	(Dollars in thousands, except per share data) (unaudited)
GAAP
Net income	$	3,499		$	32,621		$	39,897		$	108,261		$	146,315
Diluted EPS		0.06			0.60			0.73			1.98			2.71
Book value per common share		28.18			27.46			26.83			28.18			26.83
Return on average assets²		0.11	%		1.06	%		1.35	%		0.88	%		1.33	%
Efficiency ratio		77.49			54.49			47.63			55.82			48.64
Return on average equity²		0.92			8.58			11.03			7.21			10.28
Non-GAAP¹
Operating earnings	$	31,625		$	32,621		$	40,395		$	142,114		$	147,889
Diluted operating EPS		0.58			0.60			0.74			2.60			2.74
Tangible book value per common share		20.21			19.44			18.64			20.21			18.64
Pre-tax, pre-provision operating earnings		47,688			49,621			63,694			222,211			216,413
Pre-tax, pre-provision operating return on average assets²		1.54	%		1.61	%		2.15	%		1.81	%		1.97	%
Pre-tax, pre-provision operating return on average loans²		1.97			2.05			2.78			2.32			2.60
Operating return on average assets²		1.02			1.06			1.36			1.16			1.35
Operating efficiency ratio		55.50			54.49			47.11			50.94			48.16
Return on average tangible common equity²		2.00			12.80			16.75			10.91			15.78
Operating return on average tangible common equity²		12.37			12.80			16.95			14.09			15.94

¹Refer 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.

²Annualized ratio.

Results of Operations for the Three Months Ended December 31, 2023

Net Interest Income

For the three months ended December 31, 2023, net interest income before provision for credit losses was $95.5 million and net interest margin was 3.31%, compared to $99.4 million and 3.46%, respectively, for the three months ended September 30, 2023. The $3.8 million decrease, or 3.9%, in net interest income before provision for credit losses was primarily due to a $6.3 million increase in interest expense on transaction and savings deposits, a $4.0 million increase in interest expense on certificates and other time deposits and a $1.9 million decrease in interest income on loans primarily driven by interest reversals on loans placed on nonaccrual status during the three months ended December 31, 2023. The decrease was offset by a $5.9 million decrease in advances from the Federal Home Loan Bank ("FHLB"), a $1.4 million increase in interest income on debt securities and a $1.0 million increase in interest income on deposits in financial institutions and fed funds sold driven by an increase in average balances and rates during three months ended December 31, 2023. Net interest margin decreased 15 bps from the three months ended September 30, 2023, primarily due to the increase in funding costs on deposits during the three months ended December 31, 2023, partially offset by an increase in yields on debt securities and other investments.

Compared to the three months ended December 31, 2022, net interest income before provision for credit losses for the three months ended December 31, 2023 decreased by $10.6 million, or 10.0%. The decrease was primarily due to a $31.6 million increase in interest expense certificates and other time deposits and a $22.2 million increase in transaction and savings deposits driven by an increase in funding costs. The decrease in net interest income was partially offset by a $28.6 million increase in interest income on loans driven by an increase in loan yields and average balances, an $8.0 million decrease in interest expense on advances from FHLB, a $4.8 million increase in interest income in deposits in financial institutions and fed funds sold and a $1.4 million increase in interest income on debt securities. Net interest margin decreased 56 bps to 3.31% for the three months ended December 31, 2023 from 3.87% for the three months ended December 31, 2022. The decrease was primarily due to the increase in funding costs on deposits during the three months ended December 31, 2023, partially offset by an increase in loan yields and debt securities.

Noninterest (Loss) Income

Noninterest (loss) income for the three months ended December 31, 2023 was a loss of $17.8 million, a decrease of $27.5 million, or 283.9%, compared to noninterest income of $9.7 million for the three months ended September 30, 2023. The decrease in noninterest income was primarily due to a $29.3 million decrease in equity method investment income related to a write down of our equity method investment in Thrive Mortgage, LLC ("Thrive") related to Thrive's entry into a definitive agreement in December 2023 to be acquired by Lower Holding Company. The decrease was partially offset by a $665 thousand increase in government guaranteed loan income, primarily driven by an increase in U.S. Department of Agriculture ("USDA") loans sold through our wholly owned subsidiary North Avenue Capital, LLC ("NAC").

Compared to the three months ended December 31, 2022, noninterest income for the three months ended December 31, 2023 decreased $32.1 million, or 224.2%. The decrease was primarily due to a $24.0 million decrease in equity method investment income related to the write down of our equity method investment in Thrive. In addition, the decrease was partially due to $946 thousand increase in gain on sale of USDA loans through NAC, a $2.0 million decrease in customer swap income, a $1.3 million decrease in loan fees and a $1.0 million decrease in other income.

Noninterest Expense

Noninterest expense was $60.2 million for the three months ended December 31, 2023, compared to $59.4 million for the three months ended September 30, 2023, an increase of $824 thousand, or 1.4%. The increase was primarily driven by a $1.4 million increase in other expenses and a $768 thousand FDIC special assessment expense recorded in the fourth quarter 2023, partially offset by a decrease of $408 thousand in marketing expenses and a decrease of $343 thousand in salaries and employee benefits.

Noninterest expense was $60.2 million for the three months ended December 31, 2023, compared to $57.4 million for the three months ended December 31, 2022, an increase of $2.9 million, or 5.0%. The increase was primarily driven by a $3.2 million increase in professional and regulatory fees driven by FDIC insurance assessment expense, which includes the $768 thousand FDIC special assessment expense recorded in the fourth quarter 2023, and a $2.8 million increase in other expenses. The increase was partially offset by a $3.1 million decrease in salary and employee benefits.

Financial Condition

Total loans held for investment ("LHI") was $9.2 billion at December 31, 2023, a decrease of $30.9 million, compared to September 30, 2023, and an increase of $170.1 million, or 1.9%, compared to December 31, 2022.

Total deposits were $10.34 billion at December 31, 2023, an increase of $141.7 million, or 5.5% annualized, compared to September 30, 2023, and an increase of $1.21 billion, or 13.3%, compared to December 31, 2022. The increase from September 30, 2023 was primarily the result of an increase of $412.3 million in interest-bearing transaction, money market and savings deposits accounts. The increase was partially offset by a decrease of $211.7 million in certificates and other time deposits and a decrease of $145.3 million of noninterest bearing deposits. The increase from December 31, 2022 was primarily the result of increases of $1.11 billion and $833.7 million in certificates and other time deposits and interest-bearing transaction, money market, and savings deposits, respectively. The increase was partially offset by a $422.6 million decrease in non-interest bearing deposits and a $301.2 million decrease in correspondent money market accounts.

Credit Quality

Nonperforming assets ("NPAs") increased to $95.8 million, or 0.77% of total assets, at December 31, 2023, compared to $79.9 million, or 0.65% of total assets, at September 30, 2023. The Company had net charge-offs of $9.5 million for the fourth quarter of 2023. Net charge-offs compared to average loans outstanding were 25 bps for the year ended December 31, 2023, compared to 16 bps for year ended December 31, 2022.

ACL as a percentage of LHI was 1.14%, 1.14%, and 0.96% at December 31, 2023, September 30, 2023, and December 31, 2022, respectively. The Company recorded a provision for credit losses of $9.5 million for the three months ended December 31, 2023, compared to a provision for credit losses of $8.6 million and $11.8 million for the three months ended September 30, 2023 and December 31, 2022, respectively. The recorded provision for credit losses reported for the three months ended December 31, 2023, compared to the three months ended December 31, 2022 was primarily attributable to an increase in general reserves as a result of changes in economic factors and individually analyzed loans receiving specific reserves. The Company recorded a benefit for unfunded commitments of $1.5 million, $909 thousand and $523 thousand during the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively. The increase in the recorded benefit for unfunded commitments during the three months ended December 31, 2023, compared to the three months ended September 30, 2023, was attributable to a decrease in unfunded commitment balances partially offset by changes in economic factors.

Income Tax

Income tax expense for the twelve months ended December 31, 2023 totaled $36.0 million, a decrease of $4.3 million, or 10.7%, compared to the twelve months ended December 31, 2022. The Company's effective tax rate was approximately 25.0% and 21.6% for the twelve months December 31, 2023 and December 31, 2022, respectively. The change in the effective tax rate for the twelve months ended December 31, 2023, compared to the twelve months ended December 31, 2022, was primarily due to a $4.2 million valuation allowance relating to our impairment on our investment in Thrive and its relative relation to less pre-tax income.

Dividend Information

On January 23, 2024, 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 February 23, 2024 to stockholders of record as of the close of business on February 9, 2024.

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, 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 to review the results on Wednesday, January 24, 2024 at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/9o9pd6vj/ 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/BI07dad5089afd439ebad10a33915b98b6. 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.

Media and Investor Relations:

investorrelations@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's quarterly cash dividend; expected loss on Veritex's current equity method investment in Thrive; the transaction between Thrive and Lower Holding Company, including the expected timing of the completion of such transaction, the ability of the parties thereto to complete such transaction, the ability of the parties thereto to obtain any required regulatory or other approvals, authorizations or consents in connection with such transaction, and diversion of management time on issues related to such transaction; the impact of certain changes in Veritex's accounting policies, standards and interpretations; a continuation of recent turmoil in the banking industry, responsive measures to mitigate and manage it 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, 2022 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 Year Ended
	Dec 31, 2023			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Dec 31, 2023			Dec 31, 2022
	(Dollars and shares in thousands, except per-share data)
Per Share Data (Common Stock):
Basic EPS	$	0.06		$	0.60		$	0.62		$	0.71		$	0.74		$	2.00		$	2.75
Diluted EPS		0.06			0.60			0.62			0.70			0.73			1.98			2.71
Book value per common share		28.18			27.46			27.48			27.54			26.83			28.18			26.83
Tangible book value per common share¹		20.21			19.44			19.41			19.43			18.64			20.21			18.64
Dividends paid per common share outstanding²		0.20			0.20			0.20			0.20			0.20			0.80			0.80

Common Stock Data:
Shares outstanding at period end		54,338			54,305			54,261			54,229			54,030			54,338			54,030
Weighted average basic shares outstanding for the period		54,327			54,300			54,247			54,149			54,011			54,256			53,170
Weighted average diluted shares outstanding for the period		54,691			54,597			54,486			54,606			54,780			54,596			53,952

Summary of Credit Ratios:
ACL to total LHI		1.14	%		1.14	%		1.05	%		1.02	%		0.96	%		1.14	%		0.96	%
NPAs to total assets		0.77			0.65			0.55			0.35			0.36			0.77			0.36
NPAs, excluding nonaccrual purchase credit deteriorated ("PCD") loans, to total assets³		0.66			0.54			0.44			0.25			0.25			0.66			0.25
Net charge-offs to average loans outstanding⁴		0.40			0.08			0.48			0.04			0.24			0.25			0.16

Summary Performance Ratios:
Return on average assets⁴		0.11	%		1.06	%		1.10	%		1.28	%		1.35	%		0.88	%		1.33	%
Return on average equity⁴		0.92			8.58			8.96			10.55			11.03			7.21			10.28
Return on average tangible common equity^{1, 4}		2.00			12.80			13.35			15.81			16.75			10.91			15.78
Efficiency ratio		77.49			54.49			49.94			48.42			47.63			55.82			48.64
Net interest margin		3.31			3.46			3.51			3.69			3.87			3.49			3.59

Selected Performance Metrics - Operating:
Diluted operating EPS¹	$	0.58		$	0.60		$	0.64		$	0.79		$	0.74		$	2.60		$	2.74
Pre-tax, pre-provision operating return on average assets^{1, 2}		1.54	%		1.61	%		1.90	%		2.20	%		2.15	%		1.81	%		1.97	%
Pre-tax, pre-provision operating return on average loans^{1, 4}		1.97			2.05			2.43			2.83			2.78			2.32			2.60
Operating return on average assets^1,4		1.02			1.06			1.13			1.43			1.36			1.16			1.35
Operating return on average tangible common equity^1,3		12.37			12.80			13.70			17.68			16.95			14.09			15.94
Operating efficiency ratio¹		55.50			54.49			48.90			45.70			47.11			50.94			48.16

Veritex Holdings, Inc. Capital Ratios:
Average stockholders' equity to average total assets		12.27	%		12.30	%		12.23	%		12.09	%		12.20	%		12.22	%		12.96	%
Tangible common equity to tangible assets¹		9.18			8.86			8.76			8.66			8.60			9.18			8.60
Tier 1 capital to average assets (leverage)		10.03			10.10			9.80			9.67			9.82			10.03			9.82
Common equity tier 1 capital		10.29			10.11			9.76			9.32			9.09			10.29			9.09
Tier 1 capital to risk-weighted assets		10.56			10.37			10.01			9.56			9.34			10.56			9.34
Total capital to risk-weighted assets		13.18			12.95			12.51			11.99			11.63			13.18			11.63

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.

² Dividend amount represents dividend paid per common share subsequent to each respective quarter end.

³ Nonaccrual PCD loans consist of PCD loans that transitioned upon adoption of ASC 326 Financial Instruments-Credit Losses and were accounted for on a pooled basis that have subsequently been placed on nonaccrual status.

⁴Annualized ratio for quarterly metrics.

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

	Dec 31, 2023			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
ASSETS
Cash and cash equivalents	$	629,063		$	713,408		$	663,921		$	808,395		$	436,077
Debt securities, net		1,257,042			1,060,629			1,144,020			1,150,959			1,282,460
Other investments		76,238			80,869			138,894			137,621			122,450

Loans held for sale ("LHFS")		79,072			41,313			29,876			42,816			20,641
LHI, mortgage warehouse ("MW")		377,796			390,767			436,255			437,501			446,227
LHI, excluding MW		9,206,544			9,237,447			9,257,183			9,237,159			9,036,424
Total loans		9,663,412			9,669,527			9,723,314			9,717,476			9,503,292
ACL		(109,816	)		(109,831	)		(102,150	)		(98,694	)		(91,052	)
Bank-owned life insurance		84,833			84,867			84,375			84,962			84,496
Bank premises, furniture and equipment, net		105,727			106,118			105,986			107,540			108,824
Intangible assets, net of accumulated amortization		41,753			44,294			48,293			51,086			53,213
Goodwill		404,452			404,452			404,452			404,452			404,452
Other assets		241,633			291,998			259,263			245,690			250,149
Total assets	$	12,394,337		$	12,346,331		$	12,470,368		$	12,609,487		$	12,154,361
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing deposits	$	2,218,036		$	2,363,340		$	2,234,109		$	2,212,389		$	2,640,617
Interest-bearing transaction and savings deposits		4,348,385			3,936,070			3,590,253			3,492,011			3,514,729
Certificates and other time deposits		3,191,737			3,403,427			2,928,949			2,896,870			2,086,642
Correspondent money market deposits		580,037			493,681			480,598			433,468			881,246
Total deposits		10,338,195			10,196,518			9,233,909			9,034,738			9,123,234
Accounts payable and other liabilities		195,036			229,116			190,900			171,985			177,579
Advances from FHLB		100,000			200,000			1,325,000			1,680,000			1,175,000
Subordinated debentures and subordinated notes		229,783			229,531			229,279			229,027			228,775
Total liabilities		10,863,014			10,855,165			10,979,088			11,115,750			10,704,588
Commitments and contingencies
Stockholders' equity:
Common stock		610			609			609			609			607
Additional paid-in capital		1,317,516			1,314,459			1,311,687			1,308,345			1,306,852
Retained earnings		444,242			451,513			429,753			406,873			379,299
Accumulated other comprehensive loss		(63,463	)		(107,833	)		(83,187	)		(54,508	)		(69,403	)
Treasury stock		(167,582	)		(167,582	)		(167,582	)		(167,582	)		(167,582	)
Total stockholders' equity		1,531,323			1,491,166			1,491,280			1,493,737			1,449,773
Total liabilities and stockholders' equity	$	12,394,337		$	12,346,331		$	12,470,368		$	12,609,487		$	12,154,361

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

	For the Quarter Ended															For the Year Ended
	Dec 31, 2023			Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Dec 31, 2023			Dec 31, 2022
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Interest income:
Loans, including fees	$	165,443		$	167,368		$	163,727		$	151,707		$	136,846		$	648,245		$	399,679
Debt securities		12,282			10,928			10,166			10,988			10,880			44,364			38,736
Deposits in financial institutions and Fed Funds sold		8,162			7,128			7,507			5,534			3,401			28,331			6,275
Equity securities and other investments		1,717			1,691			1,118			1,408			1,087			5,934			4,720
Total interest income		187,604			187,115			182,518			169,637			152,214			726,874			449,410
Interest expense:
Transaction and savings deposits		46,225			39,936			32,957			29,857			24,043			148,975			42,785
Certificates and other time deposits		40,165			36,177			28,100			20,967			8,543			125,409			15,307
Advances from FHLB		2,581			8,523			17,562			12,358			10,577			41,024			15,501
Subordinated debentures and subordinated notes		3,100			3,118			3,068			3,066			2,954			12,352			11,160
Total interest expense		92,071			87,754			81,687			66,248			46,117			327,760			84,753
Net interest income		95,533			99,361			100,831			103,389			106,097			399,114			364,657
Provision for credit losses¹		9,500			8,627			15,000			9,385			11,800			42,512			26,950
(Benefit) provision for unfunded commitments		(1,500	)		(909	)		(1,129	)		1,497			(523	)		(2,041	)		820
Net interest income after provisions		87,533			91,643			86,960			92,507			94,820			358,643			336,887
Noninterest income:
Service charges and fees on deposit accounts		4,800			5,159			5,272			5,017			5,173			20,248			20,139
Loan fees		1,200			1,564			1,520			2,064			2,477			6,348			10,442
Loss on sales of debt securities		—			—			—			(5,321	)		—			(5,321	)		—
Gain on sales of mortgage LHFS		10			21			40			6			4			77			550
U.S. Small Business Administration loan income		1,240			575			574			322			294			2,711			2,838
USDA loan income		3,138			1,197			3,570			9,366			7,514			17,271			11,222
Equity method investment (loss) income		(29,417	)		(136	)		485			(1,521	)		(5,416	)		(30,589	)		(5,141	)
Customer swap income		238			202			961			217			2,273			1,618			7,898
Other income		999			1,092			1,270			3,381			2,007			6,742			4,874
Total noninterest (loss) income		(17,792	)		9,674			13,692			13,531			14,326			19,105			52,822
Noninterest expense:
Salaries and employee benefits		30,606			30,949			28,650			31,865			33,690			122,070			117,841
Occupancy and equipment		4,670			4,881			4,827			4,973			5,116			19,351			18,744
Professional and regulatory fees		7,626			7,283			6,868			4,389			4,401			26,166			14,142
Data processing and software expense		4,569			4,541			4,709			4,720			4,197			18,539			14,013
Marketing		1,945			2,353			2,627			1,779			1,841			8,704			7,179
Amortization of intangibles		2,438			2,437			2,468			2,495			2,495			9,838			9,979
Telephone and communications		356			362			355			478			358			1,551			1,484
Merger and acquisition ("M&A") expense		—			—			—			—			—			—			1,379
Other		8,028			6,608			6,693			5,916			5,261			27,245			18,314
Total noninterest expense		60,238			59,414			57,197			56,615			57,359			233,464			203,075
Income before income tax expense		9,503			41,903			43,455			49,423			51,787			144,284			186,634
Income tax expense		6,004			9,282			9,725			11,012			11,890			36,023			40,319
Net income	$	3,499		$	32,621		$	33,730		$	38,411		$	39,897		$	108,261		$	146,315
Net income available to common stockholders	$	3,499		$	32,621		$	33,730		$	38,411		$	39,897		$	108,261		$	146,315

Basic EPS	$	0.06		$	0.60		$	0.62		$	0.71		$	0.74		$	2.00		$	2.75
Diluted EPS	$	0.06		$	0.60		$	0.62		$	0.70		$	0.73		$	1.98		$	2.71
Weighted average basic shares outstanding		54,327			54,300			54,247			54,149			54,011			54,256			53,170
Weighted average diluted shares outstanding		54,691			54,597			54,486			54,606			54,780			54,596			53,952

¹ Includes provision for credit losses on available for sale ("AFS") securities of $885 thousand for the three months ended March 31, 2023.

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

	For the Quarter Ended
	December 31, 2023							September 30, 2023							December 31, 2022
	Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate
	(Dollars in thousands)
Assets
Interest-earning assets:
Loans¹	$	9,280,439		$	161,021	6.88	%	$	9,267,366		$	161,615	6.92	%	$	8,743,380		$	131,823	5.98	%
LHI, MW		301,345			4,422	5.82			357,639			5,753	6.38			383,080			5,024	5.20
Debt securities		1,188,776			12,282	4.10			1,121,716			10,928	3.87			1,286,342			10,880	3.36
Interest-earning deposits in other banks		587,929			8,162	5.51			520,785			7,128	5.43			353,737			3,401	3.81
Equity securities and other investments		82,271			1,717	8.28			135,714			1,691	4.94			119,054			1,087	3.62
Total interest-earning assets		11,440,760			187,604	6.51			11,403,220			187,115	6.51			10,885,593			152,215	5.55
ACL		(111,937	)						(105,320	)						(85,275	)
Noninterest-earning assets		977,811							961,162							960,726
Total assets	$	12,306,634						$	12,259,062						$	11,761,044

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	4,547,911			46,225	4.03	%	$	4,168,876		$	39,936	3.80	%	$	4,321,936			24,043	2.21	%
Certificates and other time deposits		3,285,164			40,165	4.85			3,151,704			36,177	4.55			1,785,152			8,543	1.90
Advances from FHLB and Other		182,935			2,581	5.60			725,543			8,523	4.66			1,073,049			10,577	3.91
Subordinated debentures and subordinated notes		229,648			3,100	5.36			229,389			3,118	5.39			229,037			2,954	5.12
Total interest-bearing liabilities		8,245,658			92,071	4.43			8,275,512			87,754	4.21			7,409,174			46,117	2.47

Noninterest-bearing liabilities:
Noninterest-bearing deposits		2,322,555							2,272,207							2,737,468
Other liabilities		228,135							203,173							179,584
Total liabilities		10,796,348							10,750,892							10,326,226
Stockholders' equity		1,510,286							1,508,170							1,434,818
Total liabilities and stockholders' equity	$	12,306,634						$	12,259,062						$	11,761,044

Net interest rate spread²						2.08	%						2.30	%						3.08	%
Net interest income and margin³				$	95,533	3.31	%				$	99,361	3.46	%				$	106,097	3.87	%

¹Includes average outstanding balances of LHFS of $31,242, $28,284 and $15,296 for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and average balances of LHI, excluding MW.

² Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

³Net interest margin is equal to net interest income divided by average interest-earning assets.

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

	For the Year Ended December 31,
		2023							2022
	Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate
	(Dollars in thousands)
Assets
Interest-earning assets:
Loans¹	$	9,244,070		$	628,122	6.79	%	$	7,877,949		$	383,008	4.86	%
LHI, MW		347,596			20,123	5.79			433,062			16,671	3.85
Debt securities		1,173,880			44,364	3.78			1,277,643			38,736	3.03
Interest-earning deposits in other banks		542,959			28,331	5.22			405,471			6,275	1.55
Equity securities and other investments		120,135			5,934	4.94			169,875			4,720	2.78
Total interest-earning assets		11,428,640			726,874	6.36			10,164,000			449,410	4.42
ACL		(103,179	)						(79,845	)
Noninterest-earning assets		957,286							905,103
Total assets	$	12,282,747						$	10,989,258

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	4,197,517			148,975	3.55		$	3,934,926			42,785	1.09
Certificates and other time deposits		2,977,178			125,409	4.21			1,601,687			15,307	0.96
Advances from FHLB and Other		873,617			41,024	4.70			896,687			15,501	1.73
Subordinated debentures and subordinated notes		229,268			12,352	5.39			230,984			11,160	4.83
Total interest-bearing liabilities		8,277,580			327,760	3.96			6,664,284			84,753	1.27

Noninterest-bearing liabilities:
Noninterest-bearing deposits		2,309,983							2,782,077
Other liabilities		193,659							119,237
Total liabilities		10,781,222							9,565,598
Stockholders' equity		1,501,525							1,423,660
Total liabilities and stockholders' equity	$	12,282,747						$	10,989,258

Net interest rate spread²						2.40	%						3.15	%
Net interest income and margin³				$	399,114	3.49	%				$	364,657	3.59	%

¹Includes average outstanding balances of LHFS of $25,684 and $13,558 for the twelve months ended December 31, 2023 and 2022, respectively, and average balances of LHI, excluding MW.

² Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

³Net interest margin is equal to net interest income divided by average interest-earning assets.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(Unaudited)

Yield Trend

	For the Quarter Ended
	Dec 31, 2023		Sep 30, 2023		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022
Average yield on interest-earning assets:
Loans¹	6.88	%	6.92	%	6.85	%	6.51	%	5.98	%
LHI, MW	5.82		6.38		5.44		5.52		5.20
Debt securities	4.10		3.87		3.60		3.56		3.36
Interest-bearing deposits in other banks	5.51		5.43		5.16		4.69		3.81
Equity securities and other investments	8.28		4.94		3.25		4.57		3.62
Total interest-earning assets	6.51	%	6.51	%	6.36	%	6.06	%	5.55	%

Average rate on interest-bearing liabilities:
Interest-bearing demand and savings deposits	4.03	%	3.80	%	3.37	%	2.92	%	2.21	%
Certificates and other time deposits	4.85		4.55		3.92		3.28		1.90
Advances from FHLB and Other	5.60		4.66		4.78		4.46		3.91
Subordinated debentures and subordinated notes	5.36		5.39		5.37		5.38		5.12
Total interest-bearing liabilities	4.43	%	4.21	%	3.86	%	3.32	%	2.47	%

Net interest rate spread²	2.08	%	2.30	%	2.50	%	2.74	%	3.08	%
Net interest margin³	3.31	%	3.46	%	3.51	%	3.69	%	3.87	%

¹Includes average outstanding balances of LHFS of $31,242, $28,284, $23,374, $19,679 and $15,296 for the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively, and average balances of LHI, excluding MW.

²Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

³Net interest margin is equal to net interest income divided by average interest-earning assets.

Supplemental Yield Trend

	For the Quarter Ended
	Dec 31, 2023		Sep 30, 2023		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022
Average cost of interest-bearing deposits	4.38	%	4.12	%	3.61	%	3.06	%	2.12	%
Average costs of total deposits, including noninterest-bearing	3.37		3.15		2.73		2.24		1.46

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(Unaudited)

LHI and Deposit Portfolio Composition

	Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Mar 31, 2023				Dec 31, 2022
	(In thousands, except percentages)
LHI¹
Commercial and Industrial ("C&I")	$	2,752,063	29.9	%	$	2,841,024	30.7	%	$	2,850,084	30.7	%	$	2,895,957	31.3	%	$	2,942,348	32.4	%
Real Estate:
Owner occupied commercial ("OOCRE")		794,088	8.6			697,299	7.5			671,602	7.2			631,563	6.8			715,829	7.9
Non-owner occupied commercial ("NOOCRE")		2,350,725	25.5			2,398,060	26.1			2,509,731	27.1			2,505,344	27.1			2,341,379	25.9
Construction and land		1,734,254	18.8			1,705,053	18.4			1,659,700	17.9			1,831,349	19.8			1,787,400	19.7
Farmland		31,114	0.3			59,684	0.6			51,663	0.6			51,680	0.6			43,500	0.5
1-4 family residential		937,119	10.2			933,225	10.1			923,442	10.0			896,252	9.7			894,456	9.9
Multi-family residential		605,817	6.6			603,395	6.5			592,473	6.4			432,209	4.6			322,679	3.6
Consumer		10,149	0.1			9,845	0.1			11,189	0.1			8,316	0.1			7,806	0.1
Total LHI	$	9,215,329	100	%	$	9,247,585	100	%	$	9,269,884	100	%	$	9,252,670	100	%	$	9,055,397	100	%

MW		377,796				390,767				436,255				437,501				446,227

Total LHI¹	$	9,593,125			$	9,638,352			$	9,706,139			$	9,690,171			$	9,501,624

Total LHFS		79,072				41,313				29,876				42,816				20,641

Total Loans	$	9,672,197			$	9,679,665			$	9,736,015			$	9,732,987			$	9,522,265

Deposits
Noninterest-bearing	$	2,218,036	21.5	%	$	2,363,340	23.2	%	$	2,234,109	24.2	%	$	2,212,389	24.5	%	$	2,640,617	28.9	%
Interest-bearing transaction		347,156	3.4			739,098	7.2			676,653	7.3			866,609	9.6			622,814	6.8
Money market		3,864,361	37.3			3,096,498	30.4			2,816,769	30.5			2,518,922	27.9			2,773,622	30.4
Savings		136,868	1.3			100,474	1.0			96,831	1.0			106,480	1.2			118,293	1.3
Certificates and other time deposits		3,191,737	30.9			3,403,427	33.4			2,928,949	31.7			2,896,870	32.0			2,086,642	22.9
Correspondent money market account		580,037	5.6			493,681	4.8			480,598	5.3			433,468	4.8			881,246	9.7
Total deposits	$	10,338,195	100	%	$	10,196,518	100	%	$	9,233,909

Veritex Holdings, Inc. Reports Fourth Quarter And Full Year 2023 Results