DALLAS, Jan. 25, 2022 (GLOBE NEWSWIRE) -- Veritex Holdings, Inc. ("Veritex" or the "Company") (NASDAQ:VBTX), the holding company for Veritex Community Bank, today announced the results for the fourth quarter and full year of 2021.

"We reported strong fourth quarter and 2021 results as the Texas economy continues to improve and we remained focused on our organic growth strategy," said President and Chief Executive Officer, Malcolm C. Holland, III. "Deposit growth remained strong and loan balances increased for the sixth quarter in a row with loan balances, excluding our mortgage warehouse and PPP loans, growing approximately 16% during 2021."

"We remained laser focused and delivered on one of our main strategies as a company....be transformative and deliver top tier financial results. With our 49% investment in Thrive Mortgage, LLC ("Thrive"), which has contributed $6 million of increased noninterest income since July 2021, and our acquisition of North Avenue Capital, LLC ("NAC"), the nation's leader in USDA lending, which has contributed $1.3 million of increased noninterest income since November 1, 2021, we transformed, delivered and positioned Veritex to further diversify revenue streams as we continue to organically grow."

"Asset quality continues to improve, with loss rates driven by economic forecasts approaching pre-pandemic levels, leading to a release in credit reserves. Nonperforming assets ("NPAs") to total assets improved 26 basis points to 0.51% during the fourth quarter, the lowest level since December 31, 2019."

"Business momentum, continued organic growth, investment in talent, revenue diversification, improving credit metrics, a recovering economy, maintaining our strong culture and pursuit of opportunities to further scale have me excited for 2022 and the future of this Company."

*Financial Highlights*	Quarter to Date						Year to Date
	Q4 2021			Q3 2021				2021			2020
	(Dollars in thousands, except per share data) (unaudited)
GAAP
Net income	$	41,506		$	36,835		$	139,584		$	73,883
Diluted EPS		0.82			0.73			2.77			1.48
Book value per common share		26.64			26.09			26.64			24.39
Return on average assets²		1.68	%		1.56	%		1.49	%		0.87	%
Efficiency ratio		48.53			47.55			49.45			50.90
Return on average equity²		12.65			11.32			11.01			6.34
Non-GAAP¹
Operating earnings	$	42,410		$	35,072		$	139,647		$	77,980
Diluted operating EPS		0.84			0.70			2.77			1.56
Tangible book value per common share		17.49			17.53			17.49			15.70
Pre-tax, pre-provision operating earnings		48,640			43,858			171,205			162,447
Pre-tax, pre-provision operating return on average assets²		1.97	%		1.85	%		1.83	%		1.91	%
Operating return on average assets²		1.72			1.48			1.49			0.91
Operating efficiency ratio		47.64			48.51			49.27			47.69
Return on average tangible common equity²		20.06			17.72			17.57			11.16
Operating return on average tangible common equity²		20.48			16.92			17.58			11.72

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.

Other Fourth Quarter and 2021 Highlights:

Total loans held for investment ("LHI"), excluding Paycheck Protection Program ("PPP") and mortgage warehouse ("MW") loans, grew $150.1 million, from the third quarter of 2021, or 9.1% annualized, and grew $918.1 million, or 15.7%, year-over-year;
Total deposits grew $184.9 million for the fourth quarter of 2021, or 10.3% annualized, with the average cost of total deposits decreasing to 0.18% for the three months ended December 31, 2021 from 0.20% for the three months ended September 30, 2021. Total deposits grew $850.8 million, or 13.1%, year-over-year;
NPAs to total assets decreased to 0.51% , or 26 basis points from September 30, 2021, and decreased 48 basis points from December 31, 2020;
Announced the completion of the Company's 49% investment in Thrive during the third quarter of 2021 and recognized $5.8 million of equity method investment income, which includes $1.9 million of PPP loan forgiveness income;
Closed the acquisition of NAC on November 1, 2021; and
Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on February 25, 2022.

Result of Operations for the Three Months Ended December 31, 2021

Net Interest Income

For the three months ended December 31, 2021, net interest income before provision for credit losses was $76.7 million and net interest margin was 3.37% compared to $71.3 million and 3.26%, respectively, for the three months ended September 30, 2021. The $5.4 million increase in net interest income before provision for credit losses was primarily due to a $3.0 million increase in interest income on loans driven by an increase in average balances and the recognition of $2.1 million of prepayment penalty income on debt securities during three months ended December 31, 2021. Net interest margin increased 11 basis points from the three months ended September 30, 2021 primarily due to the increase in yields earned on debt securities as a result of the recognition of $2.1 million of prepayment penalty income during three months ended December 31, 2021. The average cost of interest-bearing deposits decreased 4 basis points to 0.26% for the three months ended December 31, 2021 from 0.30% for the three months ended September 30, 2021.

Net interest income before provision for credit losses increased by $9.9 million from $66.8 million to $76.7 million and net interest margin increased 8 basis points from 3.29% to 3.37% for the three months ended December 31, 2021 as compared to the same period in 2020. The increase in net interest income before provision for credit losses was primarily due to a $4.6 million increase in interest income on loans driven by an increase in average balances, the recognition of $2.1 million of prepayment penalty income on debt securities and a $2.3 million decrease in interest expenses on certificates and other time deposits during the three months ended December 31, 2021 compared to the three months ended December 31, 2020. Net interest margin increased 8 basis points compared to the three months ended December 31, 2020 primarily due to an increase in yields earned on debt securities as a result of the recognition of $2.1 million of prepayment penalty income and decreases in the average rate paid on interest-bearing demand and savings deposits and certificates and other time deposits for the three months ended December 31, 2021. As a result, the average cost of interest-bearing deposits decreased to 0.26% for the three months ended December 31, 2021 from 0.55% for the three months ended December 31, 2020.

Noninterest Income

Noninterest income for the three months ended December 31, 2021 was $16.2 million, an increase of $523 thousand, or 3.3% compared to the three months ended September 30, 2021. The increase in noninterest income was primarily due to a $1.1 million increase in government guaranteed loan income, net, and a $951 thousand increase in loan fees. These increases were partially offset by a $3.2 million decrease in equity method investment income.

Compared to the three months ended December 31, 2020, noninterest income for the three months ended December 31, 2021 grew $7.1 million, or 79.2%. The increase was primarily due to a $3.0 million increase in government guaranteed loan income, a $2.0 million increase in loan fees, a $1.2 million increase in equity method investment income and a $811 thousand increase in service charges and fees on deposit accounts.

Noninterest Expense

Noninterest expense was $45.1 million for the three months ended December 31, 2021, compared to $41.3 million for the three months ended September 30, 2021, an increase of $3.8 million, or 9.1%. The increase was primarily driven by a $2.4 million increase in salaries and employee benefits and a $826 thousand increase in merger and acquisition expenses incurred as a result of the acquisition of NAC in November of 2021.

Noninterest expense was $45.1 million for the three months ended December 31, 2021, compared to $47.4 million for the three months ended December 31, 2020, a decrease of $2.3 million, or 4.8%. The decrease in noninterest expense was primarily due to debt extinguishment costs of $9.7 million incurred in the three months ended December 31, 2020 with no corresponding expense in the same period in 2021. The decrease was partially offset by an increase of $5.4 million in salaries and employee benefits, a $826 thousand increase in merger and acquisition expenses incurred related to the acquisition of NAC, a $498 thousand increase in marketing expense and a $359 thousand increase in data processing and software expense.

Financial Condition

Total LHI, excluding MW and PPP, were $6.8 billion at December 31, 2021, an increase of $150.1 million, or 9.1% annualized, compared to September 30, 2021, and an increase of $918.1 million, or 15.7%, compared to December 31, 2020. These increases were the result of the continued execution and success of our loan growth strategy.

Total deposits were $7.4 billion at December 31, 2021, an increase of $184.9 million, or 10.3% annualized, compared to September 30, 2021 and an increase of $850.8 million, or 13.1%, compared to December 31, 2020. The increase from September 30, 2021 was primarily the result of increase of $207.8 million in non-interest bearing demand deposits and an increase of $48.0 million in interest-bearing transaction and savings deposits accounts. The increase from December 31, 2020 was primarily the result of increases of $413.6 million, $317.9 million and $119.3 million in non-interest bearing demand deposits, interest-bearing transaction and savings deposits accounts and certificates and other time deposits, respectively.

Asset Quality

NPAs decreased to $50.1 million, or 0.51% of total assets, at December 31, 2021, compared to $74.0 million, or 0.77% of total assets, at September 30, 2021. The Company had net charge-offs of $12.7 million for the quarter, which were substantially reserved against in prior quarters under our allowance for credit loss model.

The Company recorded a benefit for credit losses of $3.3 million for the three months ended December 31, 2021, compared to no provision for credit losses for the three months ended September 30, 2021 and December 31, 2020. The benefit for credit losses reported for the three months ended December 31, 2021, compared to the three months ended September 30, 2021 and December 31, 2020, was attributable to improvement in the Texas economic forecasts used in the Current Expected Credit Losses ("CECL") model in the fourth quarter of 2021 to reflect the expected impact of the COVID-19 pandemic as of December 31, 2021, as compared to our Texas economic forecasts and expected impact of the COVID-19 pandemic as of September 30, 2021 and December 31, 2020. During the three months ended December 31, 2021, we recorded a $1.0 million benefit for unfunded commitments, which was also attributable to improvement in the Texas economic forecasts.

Allowance for credit losses ("ACL") as a percentage of LHI, excluding MW and PPP loans, was 1.15%, 1.42% and 1.80% at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

Dividend Information

On January 25, 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 February 25, 2022 to stockholders of record as of the close of business on February 11, 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 to review the results on Wednesday, January 26, 2021 at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/rcmgsdby and will receive a unique PIN number, which can be used when dialing in for the call. This will allow attendees to enter the call immediately. Alternatively, participants may call toll-free at (877) 703-9880.

The call and corresponding presentation slides will be webcast live on the home page of the Company's website, www.veritexbank.com. An audio replay will be available one hour after the conclusion of the call at (855) 859-2056, Conference #9296970. This replay, as well as the webcast, will be available until February 2, 2021.

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 contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to the 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, Veritex's future financial performance, business and growth strategy, projected plans and objectives, as well as other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain important factors could affect future results and cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, that the businesses of the Company and NAC will not be integrated successfully, that the cost savings and any synergies from the acquisition may not be fully realized or may take longer to realize than expected, disruption from the acquisition making it more difficult to maintain relationships with employees, customers or other parties with whom the Company or NAC have business relationships, diversion of management time on acquisition-related issues, the reaction to the transaction of the companies' customers, employees and counterparties and other factors, many of which are beyond the control of the Company and NAC. Further, certain important factors could affect future results and cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, that the businesses of the Company and NAC will not be integrated successfully, that the cost savings and any synergies from the acquisition may not be fully realized or may take longer to realize than expected, disruption from the acquisition making it more difficult to maintain relationships with employees, customers or other parties with whom the Company or NAC have business relationships, diversion of management time on acquisition-related issues, the reaction to the transaction of the companies' customers, employees and counterparties and other factors, many of which are beyond the control of the Company and NAC. 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, 2020 and any updates to those risk factors set forth in Veritex's Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission ("SEC"), which are available on the SEC's website at www.sec.gov. If one or more events related to these or other risks or uncertainties materialize, or if Veritex's underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. Veritex does not undertake any obligation, and specifically declines any obligation, to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, 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, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Dec 31, 2021			Dec 31, 2020
	(Dollars and shares in thousands, except per-share data)
Per Share Data (Common Stock):
Basic EPS	$	0.84		$	0.75		$	0.60		$	0.64		$	0.46		$	2.83		$	1.48
Diluted EPS		0.82			0.73			0.59			0.64			0.46			2.77			1.48
Book value per common share		26.64			26.09			25.72			24.96			24.39			26.64			24.39
Tangible book value per common share¹		17.49			17.53			17.16			16.34			15.70			17.49			15.70
Dividends paid per common share outstanding²		0.20			0.20			0.20			0.17			0.17			0.77			0.68

Common Stock Data:
Shares outstanding at period end		49,372			49,229			49,498			49,433			49,340			49,372			49,340
Weighted average basic shares outstanding for the period		49,329			49,423			49,476			49,394			49,571			49,405			49,884
Weighted average diluted shares outstanding for the period		50,441			50,306			50,331			49,998			49,837			50,352			50,036

Summary of Credit Ratios:
ACL to total LHI, excluding MW and PPP loans		1.15	%		1.42	%		1.59	%		1.76	%		1.80	%		1.15	%		1.80	%
NPAs to total assets		0.51			0.77			0.85			0.92			0.99			0.51			0.99
Net charge-offs to average loans outstanding		0.19			0.09			0.09			—			0.28			0.38			0.36

Summary Performance Ratios:
Return on average assets³		1.68	%		1.56	%		1.27	%		1.44	%		1.04	%		1.49	%		0.87	%
Return on average equity³		12.65			11.32			9.42			10.53			7.58			11.01			6.34
Return on average tangible common equity^{1, 3}		20.06			17.72			15.18			17.17			12.84			17.57			11.16
Efficiency ratio		48.53			47.55			52.42			49.62			62.52			49.45			50.90
Net interest margin		3.37	%		3.26	%		3.11	%		3.22	%		3.29	%		3.24	%		3.39	%

Selected Performance Metrics - Operating:
Diluted operating EPS¹	$	0.84		$	0.70		$	0.60		$	0.64		$	0.60		$	2.77		$	1.56
Pre-tax, pre-provision operating return on average assets^{1, 2}		1.97	%		1.85	%		1.66	%		1.82	%		1.75	%		1.83	%		1.91	%
Operating return on average assets^{1, 3}		1.72			1.48			1.29			1.46			1.35			1.49			0.91
Operating return on average tangible common equity^{1, 3}		20.48			16.92			15.42			17.39			16.44			17.58			11.72
Operating efficiency ratio¹		47.64			48.51			51.63			49.62			49.49			49.27			47.69

Veritex Holdings, Inc. Capital Ratios:
Average stockholders' equity to average total assets		13.30	%		13.75	%		13.46	%		13.69	%		13.67	%		13.54	%		13.66	%
Tangible common equity to tangible assets¹		9.28			9.43			9.51			9.17			9.23			9.28			9.23
Tier 1 capital to average assets (leverage)		9.05			9.54			9.38			9.50			9.43			9.05			9.43
Common equity tier 1 capital		8.58			8.75			9.03			9.27			9.30			8.58			9.30
Tier 1 capital to risk-weighted assets		8.89			9.06			9.36			9.61			9.66			8.89			9.66
Total capital to risk-weighted assets		11.60			12.31			12.86			13.38			13.56			11.60			13.56

¹Refer to "Reconciliation of Non-GAAP Financial Measures" after the financial highlights for a reconciliation of this non-GAAP financial measure to its most directly comparable GAAP measure.

² Dividend 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)

	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
ASSETS
Cash and cash equivalents	$	379,784		$	229,712		$	390,027		$	468,029		$	230,825
Debt securities		1,052,494			1,103,745			1,125,877			1,077,860			1,055,201
Other investments		190,591			191,786			87,558			87,226			87,192

Loans held for sale		26,007			18,896			12,065			19,864			21,414
LHI PPP loans, carried at fair value		53,369			135,842			291,401			407,353			358,042
LHI, MW		565,645			615,045			559,939			599,001			577,594
LHI, excluding MW and PPP		6,766,009			6,615,905			6,272,087			5,963,493			5,847,862
Total loans		7,411,030			7,385,688			7,135,492			6,989,711			6,804,912
ACL		(77,754	)		(93,771	)		(99,543	)		(104,936	)		(105,084	)
Bank-owned life insurance		83,194			83,781			83,304			83,318			82,855
Bank premises, furniture and equipment, net		109,271			116,063			123,504			114,585			115,063
Other real estate owned ("OREO")		—			—			2,467			2,337			2,337
Intangible assets, net of accumulated amortization		66,017			54,682			57,143			59,236			61,733
Goodwill		403,771			370,840			370,840			370,840			370,840
Other assets		138,851			129,774			72,856			89,304			114,997
Total assets	$	9,757,249		$	9,572,300		$	9,349,525		$	9,237,510		$	8,820,871
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing deposits	$	2,510,723		$	2,302,925		$	2,388,068		$	2,171,719		$	2,097,099
Interest-bearing transaction and savings deposits		3,276,312			3,228,306			3,112,974			3,189,693			2,958,456
Certificates and other time deposits		1,576,580			1,647,521			1,477,860			1,543,158			1,457,291
Total deposits		7,363,615			7,178,752			6,978,902			6,904,570			6,512,846
Accounts payable and other liabilities		69,160			66,571			55,499			55,902			61,928
Advances from Federal Home Loan Bank ("FHLB")		777,562			777,601			777,640			777,679			777,718
Subordinated debentures and subordinated notes		227,764			262,761			262,766			262,774			262,778
Securities sold under agreements to repurchase		4,069			2,455			1,811			2,777			2,225
Total liabilities		8,442,170			8,288,140			8,076,618			8,003,702			7,617,495
Commitments and contingencies
Stockholders' equity:
Common stock		560			559			558			557			555
Additional paid-in capital		1,142,758			1,137,889			1,134,603			1,131,324			1,126,437
Retained earnings		275,273			243,633			216,704			195,661			172,232
Accumulated other comprehensive income		64,070			69,661			77,189			62,413			56,225
Treasury stock		(167,582	)		(167,582	)		(156,147	)		(156,147	)		(152,073	)
Total stockholders' equity		1,315,079			1,284,160			1,272,907			1,233,808			1,203,376
Total liabilities and stockholders' equity	$	9,757,249		$	9,572,300		$	9,349,525		$	9,237,510		$	8,820,871

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(in thousands, except per share data)

	For the Quarter Ended														For the Year Ended
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021		Mar 31, 2021			Dec 31, 2020			Dec 31, 2021			Dec 31, 2020
Interest income:
Loans, including fees	$	74,174		$	71,139		$	67,814	$	67,399		$	69,597		$	280,526		$	286,583
Debt securities		9,553			7,613			7,529		7,437			7,652			32,132			30,726
Deposits in financial institutions and Fed Funds sold		165			130			167		127			99			589			1,221
Equity securities and other investments		1,004			898			672		663			752			3,237			3,320
Total interest income		84,896			79,780			76,182		75,626			78,100			316,484			321,850
Interest expense:
Transaction and savings deposits		1,629			1,588			1,661		1,980			2,105			6,858			13,233
Certificates and other time deposits		1,661			1,934			2,423		3,061			3,919			9,079			23,678
Advances from FHLB		1,847			1,848			1,829		1,812			2,222			7,336			10,609
Subordinated debentures and subordinated notes		3,018			3,134			3,138		3,138			3,088			12,428			8,532
Total interest expense		8,155			8,504			9,051		9,991			11,334			35,701			56,052
Net interest income		76,741			71,276			67,131		65,635			66,766			280,783			265,798
(Benefit) provision for credit losses		(3,349	)		—			—		—			—			(3,349	)		56,640
(Benefit) provision for unfunded commitments		(1,040	)		(448	)		577		(570	)		902			(1,481	)		9,029
Net interest income after provisions		81,130			71,724			66,554		66,205			65,864			285,613			200,129
Noninterest income:
Service charges and fees on deposit accounts		4,782			4,484			3,847		3,629			3,971			16,742			13,703
Loan fees		2,697			1,746			1,823		1,341			684			7,607			4,556
(Loss) gain on sales of investment securities		—			(188	)		—		—			(256	)		(188	)		2,615
Gain on sales of mortgage loans held for sale		293			407			385		507			317			1,592			1,239
Government guaranteed loan income, net		3,423			2,341			3,448		6,548			448			15,760			14,150
Equity method investment income		1,238			4,522			—		—			—			5,760			—
Other		3,717			2,315			2,953		2,147			3,848			11,132			11,081
Total noninterest income		16,150			15,627			12,456		14,172			9,012			58,405			47,344
Noninterest expense:
Salaries and employee benefits		25,401			22,964			23,451		22,932			20,011			94,748			79,453
Occupancy and equipment		4,398			4,536			4,233		4,096			4,116			17,263			16,363
Professional and regulatory fees		3,017			3,401			3,086		3,441			3,578			12,945			11,729
Data processing and software expense		2,597			2,494			2,536		2,319			2,238			9,946			9,213
Marketing		1,443			1,151			1,841		909			945			5,344			3,651
Amortization of intangibles		2,494			2,509			2,517		2,537			2,558			10,057			10,790
Telephone and communications		380			380			337		337			340			1,434			1,312
Merger and acquisition expense		826			—			—		—			—			826			—
COVID expenses		—			—			—		—			—			—			1,377
Debt extinguishment costs		—			—			—		—			9,746			—			11,307
Other		4,521			3,886			3,716		3,026			3,841			15,149			14,192
Total noninterest expense		45,077			41,321			41,717		39,597			47,373			167,712			159,387
Income before income tax expense		52,203			46,030			37,293		40,780			27,503			176,306			88,086
Income tax expense		10,697			9,195			7,837		8,993			4,702			36,722			14,203
Net income	$	41,506		$	36,835		$	29,456	$	31,787		$	22,801		$	139,584		$	73,883

Basic EPS	$	0.84		$	0.75		$	0.60	$	0.64		$	0.46		$	2.83		$	1.48
Diluted EPS	$	0.82		$	0.73		$	0.59	$	0.64		$	0.46		$	2.77		$	1.48
Weighted average basic shares outstanding		49,329			49,423			49,476		49,394			49,571			49,405			49,884
Weighted average diluted shares outstanding		50,441			50,306			50,331		49,998			49,837			50,352			50,036

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(Unaudited)

	For the Quarter Ended
	December 31, 2021							September 30, 2021							December 31, 2020
	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	$	6,777,397		$	70,334	4.12	%	$	6,384,856		$	66,911	4.16	%	$	5,798,692		$	65,259	4.48	%
LHI, MW		483,850			3,629	2.98			465,945			3,697	3.15			446,027			3,355	2.99
PPP loans		83,553			211	1.00			210,092			531	1.00			390,509			983	1.00
Debt securities		1,092,089			9,553	3.47			1,119,952			7,613	2.70			1,076,031			7,652	2.83
Interest-earning deposits in other banks		417,266			165	0.16			336,289			130	0.15			258,687			99	0.15
Equity securities and other investments		191,031			1,004	2.09			167,242			898	2.13			95,706			752	3.13
Total interest-earning assets		9,045,186			84,896	3.72			8,684,376			79,780	3.64			8,065,652			78,100	3.85
ACL		(95,218	)						(99,482	)						(121,162	)
Noninterest-earning assets		838,703							800,576							805,651
Total assets	$	9,788,671						$	9,385,470						$	8,750,141

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	3,357,958			1,629	0.19	%	$	3,201,409		$	1,588	0.20	%	$	2,862,084			2,105	0.29	%
Certificates and other time deposits		1,615,066			1,661	0.41			1,519,824			1,934	0.50			1,467,250			3,919	1.06
Advances from FHLB		777,577			1,847	0.94			777,617			1,848	0.94			885,014			2,222	1.00
Subordinated debentures and subordinated notes		259,191			3,018	4.62			264,714			3,134	4.70			259,581			3,088	4.73
Total interest-bearing liabilities		6,009,792			8,155	0.54			5,763,564			8,504	0.59			5,473,929			11,334	0.82

Noninterest-bearing liabilities:
Noninterest-bearing deposits		2,413,443							2,271,197							2,011,995
Other liabilities		63,760							60,181							67,943
Total liabilities		8,486,995							8,094,942							7,553,867
Stockholders' equity		1,301,676							1,290,528							1,196,274
Total liabilities and stockholders' equity	$	9,788,671						$	9,385,470						$	8,750,141

Net interest rate spread²						3.18	%						3.05	%						3.03	%
Net interest income and margin³				$	76,741	3.37	%				$	71,276	3.26	%				$	66,766	3.29	%

¹Includes average outstanding balances of loans held for sale of $8,987, $8,542 and $11,938 for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, 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.

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,
		2021							2020
	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	$	6,285,510		$	263,583	4.19	%	$	5,770,228		$	273,999	4.97	%
LHI, MW		468,001			14,219	3.04			318,657			9,672	3.04
PPP loans		272,770			2,724	1.00			290,851			2,912	1.00
Debt securities		1,092,967			32,132	2.94			1,083,633			30,726	2.84
Interest-earning deposits in other banks		410,785			589	0.14			276,970			1,221	0.44
Equity securities and other investments		133,594			3,237	2.42			100,556			3,320	3.30
Total interest-earning assets		8,663,627			316,484	3.65			7,840,895			321,850	4.10
ACL		(101,383	)						(98,527	)
Noninterest-earning assets		799,334							782,907
Total assets	$	9,361,578						$	8,525,275

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	3,198,225			6,858	0.21		$	2,726,462			13,233	0.49
Certificates and other time deposits		1,540,188			9,079	0.59			1,550,995			23,678	1.53
Advances from FHLB		777,635			7,336	0.94			1,024,142			10,609	1.04
Subordinated debentures and subordinated notes		263,535			12,428	4.72			172,594			8,532	4.94
Total interest-bearing liabilities		5,779,583			35,701	0.62			5,474,193			56,052	1.02

Noninterest-bearing liabilities:
Noninterest-bearing deposits		2,256,546							1,825,806
Other liabilities		57,457							60,303
Total liabilities		8,093,586							7,360,302
Stockholders' equity		1,267,992							1,164,973
Total liabilities and stockholders' equity	$	9,361,578						$	8,525,275

Net interest rate spread²						3.03	%						3.08	%
Net interest income and margin³				$	280,783	3.24	%				$	265,798	3.39	%

¹Includes average outstanding balances of loans held for sale of $12,093 and $15,315 for the twelve months ended December 31, 2021 and 2020, 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.

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, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		Dec 31, 2020
Average yield on interest-earning assets:
Loans¹	4.12	%	4.16	%	4.16	%	4.31	%	4.48	%
LHI, MW	2.98		3.15		3.06		3.03		2.99
PPP loans	1.00		1.00		1.00		1.00		1.00
Debt securities	3.47		2.70		2.76		2.84		2.83
Interest-bearing deposits in other banks	0.16		0.15		0.12		0.15		0.15
Equity securities and other investments	2.09		2.13		3.08		3.08		3.13
Total interest-earning assets	3.72	%	3.64	%	3.53	%	3.71	%	3.85	%

Average rate on interest-bearing liabilities:
Interest-bearing demand and savings deposits	0.19	%	0.20	%	0.21	%	0.26	%	0.29	%
Certificates and other time deposits	0.41		0.50		0.64		0.82		1.06
Advances from FHLB	0.94		0.94		0.94		0.94		1.00
Subordinated debentures and subordinated notes	4.62		4.70		4.75		4.80		4.73
Total interest-bearing liabilities	0.54	%	0.59	%	0.63	%	0.72	%	0.82	%

Net interest rate spread²	3.18	%	3.05	%	2.90	%	2.99	%	3.03	%
Net interest margin³	3.37	%	3.26	%	3.11	%	3.22	%	3.29	%

¹Includes average outstanding balances of loans held for sale of $8,987, $8,542, $14,364, $16,602 and $11,938 for the three months ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively, and average balances of LHI, excluding MW and PPP loans.

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, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021		Dec 31, 2020
Average cost of interest-bearing deposits	0.26	%	0.30	%	0.35	%	0.45	%	0.55	%
Average costs of total deposits, including noninterest-bearing	0.18		0.20		0.23		0.31		0.38

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(Unaudited)

LHI and Deposit Portfolio Composition

	Dec 31, 2021					Sep 30, 2021					Jun 30, 2021					Mar 31, 2021					Dec 31, 2020
	(Dollars in thousands)
LHI¹
Commercial	$	2,006,876		29.6	%	$	1,793,740		27.1	%	$	1,771,100		28.2	%	$	1,632,040		27.4	%	$	1,559,546		26.7	%
Real Estate:
Owner occupied commercial ("OOCRE")		665,537		9.8			711,476		10.7			744,899		11.9			733,310		12.3			717,472		12.3
Non-owner occupied commercial ("NOOCRE")		2,120,309		31.3			2,194,438		33.1			1,986,538		31.6			1,970,945		33.0			1,904,132		32.5
Construction and land		1,062,144		15.7			936,174		14.1			871,765		13.9			723,444		12.1			693,030		11.8
Farmland		55,827		0.8			73,550		1.1			13,661		0.2			14,751		0.2			13,844		0.2
1-4 family residential		542,566		8.0			543,518		8.2			513,635		8.2			492,609		8.3			524,344		9.0
Multi-family residential		310,241		4.6			356,885		5.4			367,445		5.9			386,844		6.5			424,962		7.3
Consumer		11,998		0.2			14,266		0.2			10,530		0.1			12,431		0.2			13,000		0.2
Total LHI	$	6,775,498		100	%	$	6,624,047		100	%	$	6,279,573		100	%	$	5,966,374		100	%	$	5,850,330		100	%

MW		565,645					615,045					559,939					599,001					577,594
PPP loans		53,369					135,842					291,401					407,353					358,042

Total LHI¹	$	7,394,512				$	7,374,934				$	7,130,913				$	6,972,728				$	6,785,966

Deposits
Noninterest-bearing	$	2,510,723		34.1	%	$	2,302,925		32.1	%	$	2,388,068		34.3	%	$	2,171,719		31.6	%	$	2,097,099		32.2	%
Interest-bearing transaction		579,408		7.9			514,537		7.2			451,307		6.5			463,343		6.7			453,110		7.0
Money market		2,568,843		34.9			2,585,926		36.0			2,539,061		36.4			2,602,903		37.7			2,398,526		36.8
Savings		128,061		1.7			127,843		1.8			122,606		1.8			123,447		1.8			106,820		1.6
Certificates and other time deposits		1,576,580		21.4			1,647,521		22.9			1,477,860		21.2			1,543,158		22.2			1,457,291		22.4
Total deposits	$	7,363,615		100	%	$	7,178,752		100	%	$	6,978,902		100	%	$	6,904,570		100	%	$	6,512,846		100	%

Loan to Deposit Ratio		100.4	%				102.7	%				102.2	%				101.0	%				104.2	%
Loan to Deposit Ratio, excluding MW and PPP loans		92.0	%				92.3	%				90.0	%				86.4	%				89.8	%

¹ Total LHI does not include deferred fees of $8.1 million September 30, 2021 and deferred costs of $9.5 million, $7.5 million, $2.9 million and $2.5 million at December 31, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(Unaudited)

Asset Quality

	For the Quarter Ended															For the Year Ended
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Dec 31, 2021			Dec 31, 2020
	(Dollars in thousands)
NPAs:
Nonaccrual loans	$	49,687		$	72,317		$	76,994		$	73,594		$	81,096		$	49,687		$	81,096
Accruing loans 90 or more days past due¹		441			1,711			462			9,093			4,204			441			4,204
Total nonperforming loans held for investment ("NPLs")		50,128			74,028			77,456			82,687			85,300			50,128			85,300
OREO		—			—			2,467			2,337			2,337			—			2,337
Total NPAs	$	50,128		$	74,028		$	79,923		$	85,024		$	87,637		$	50,128		$	87,637

Charge-offs:
Residential	$	—		$	(64	)	$	(300	)	$	(15	)	$	(18	)	$	(379	)	$	(18	)
OOCRE		(898	)		(813	)		(689	)		—			—			(2,400	)		(2,421	)
NOOCRE		(7,936	)		—			—			—			(2,865	)		(7,936	)		(2,865	)
Commercial		(4,114	)		(5,508	)		(5,608	)		(346	)		(13,699	)		(15,576	)		(15,507	)
Consumer		(44	)		(17	)		(20	)		(18	)		(26	)		(99	)		(162	)
Total charge-offs		(12,992	)		(6,402	)		(6,617	)		(379	)		(16,608	)		(26,390	)		(20,973	)

Recoveries:
Residential		6			26			29			3			49			64			57
OOCRE		—			—			500			—			—			500			—
Commercial		61			596			659			226			52			1,542			102
Consumer		257			8			36			2			—			303			287
Total recoveries		324			630			1,224			231			101			2,409			446

Net charge-offs	$	(12,668	)	$	(5,772	)	$	(5,393	)	$	(148	)	$	(16,507	)	$	(23,981	)	$	(20,527	)

CECL transition adjustment	$	—		$	—		$	—		$	—		$	—		$	—		$	39,137

ACL at end of period	$	77,754		$	93,771		$	99,543		$	104,936		$	105,084		$	77,754		$	105,084

Asset Quality Ratios:
NPAs to total assets		0.51	%		0.77	%		0.85	%		0.92	%		0.99

Veritex Holdings, Inc. Reports Fourth Quarter and Year-End 2021 Operating Results