DALLAS, Oct. 25, 2022 (GLOBE NEWSWIRE) -- Veritex Holdings, Inc. ("Veritex", the "Company", "we" or "our") (NASDAQ:VBTX), the holding company for Veritex Community Bank, today announced the results for the quarter ended September 30, 2022.

"The third quarter of 2022 resulted in record dollar earnings for our Company in a resilient Texas market" said President and CEO, C. Malcolm C. Holland, III. "We reported historical financial metrics with 2.2% in pre-tax, pre-provision operating return, 1.5% in return on average assets, return on average tangible common equity of 18% and an efficiency ratio of 44% coupled with continuing improved credit metrics noted by a 14 bp decrease in nonperforming assets. We remain focused on this positive momentum and deposit growth but more importantly our customers, the strong markets we serve and our shareholders"

	Quarter to Date						Year to Date
*Financial Highlights*	Q3 2022			Q2 2022			Q3 2022			Q3 2021

	(Dollars in thousands, except per share data) (unaudited)
GAAP
Net income	$	43,322		$	29,626		$	106,418		$	98,078
Diluted EPS		0.79			0.54			1.98			1.95
Book value per common share		26.15			26.50			26.15			26.09
Return on average assets²		1.50	%		1.11	%		1.33	%		1.42	%
Efficiency ratio		44.71			50.76			49.05			49.79
Return on average equity²		11.82			8.21			10.02			10.43
Non-GAAP¹
Operating earnings	$	43,625		$	29,855		$	107,494		$	97,237
Diluted operating EPS		0.80			0.55			2.00			1.94
Tangible book value per common share		17.91			18.20			17.91			17.53
Pre-tax, pre-provision operating earnings		63,454			47,000			152,719			122,565
Pre-tax, pre-provision operating return on average assets²		2.20	%		1.76	%		1.90	%		1.78	%
Operating return on average assets²		1.51			1.12			1.34			1.41
Operating efficiency ratio		44.37			50.45			48.59			49.89
Return on average tangible common equity²		17.82			12.68			15.40			16.70
Operating return on average tangible common equity²		17.94			12.77			15.55			16.57

¹Refer 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.

²Annualized ratio.

Other Third Quarter Highlights

Pre-tax, pre-provision operating return on average assets increased 44 bps from the second quarter of 2022 to 2.20%;
Net interest margin increased to 3.77%, up 35 basis points from the second quarter of 2022;
Non-performing assets ("NPAs") to total assets decreased to 0.26%, or 14 bps from June 30, 2022 and 51 bps from September 30, 2021, respectively;
Net charge-offs to average loans outstanding was 3 basis points for the third quarter of 2022;
Total loans held for investment ("LHI"), excluding mortgage warehouse ("MW") and paycheck protection program ("PPP") loans, grew $594.6 million, or 30.0% annualized, during the three months ended September 30, 2022 from $8.5 billion at the end of the second quarter of 2022;
Total deposits grew $230.7 million, or 10.8% annualized, during the three months ended September 30, 2022 from $8.5 billion at the end of the second quarter of 2022; and
Declared quarterly cash dividend of $0.20 per share of outstanding common stock payable on November 25, 2022.

Results of Operations for the Three Months Ended September 30, 2022

Net Interest Income

For the three months ended September 30, 2022, net interest income before provision for credit losses was $101.0 million and net interest margin was 3.77% compared to $84.5 million and 3.42%, respectively, for the three months ended June 30, 2022. The $16.6 million increase in net interest income before provision for credit losses was primarily due to a $27.0 million increase in interest income on loans driven by an increase in average balances and loan yields during the three months ended September 30, 2022. Net interest margin increased 35 basis points compared to the three months ended June 30, 2022, primarily due to the increase in yields earned on loans during three months ended September 30, 2022, partially offset by an increase in funding costs.

Compared to the three months ended September 30, 2021, net interest income before provision for credit losses for the three months ended September 30, 2022 increased by $29.8 million, or 41.8%. The increase was primarily due to a $38.1 million increase in interest income on loans driven by an increase in average balances and loan yields. Net interest margin increased 51 basis points to 3.77% for the three months ended September 30, 2022 from 3.26% for the three months ended September 30, 2021. The increase was primarily due to the increase in average balances and loan yields during the three months ended September 30, 2022, partially offset by an increase in funding costs.

Noninterest Income

Noninterest income for the three months ended September 30, 2022 was $13.0 million, an increase of $2.6 million, or 25.5%, compared to the three months ended June 30, 2022. The increase was primarily due to a $2.0 million increase in customer swap income and a $2.2 million increase in the fair value of the servicing asset, partially offset by a $2.0 million decrease in equity method investment income.

Compared to the three months ended September 30, 2021, noninterest income for the three months ended September 30, 2022 decreased by $2.6 million, or 16.7%. The decrease was primarily due to a $5.6 million decrease in equity method investment income, partially offset by a $2.3 million increase in customer swap income and a $1.0 million increase in loan fees.

Noninterest Expense

Noninterest expense was $51.0 million for the three months ended September 30, 2022, compared to $48.2 million for the three months ended June 30, 2022, an increase of $2.8 million, or 5.9%. This increase was primarily due to a $2.7 million increase in salaries and employee benefits from continued investment in talent.

Compared to the three months ended September 30, 2021, noninterest expense for the three months ended September 30, 2022 increased by $9.7 million, or 23.4%. The increase was primarily driven by a $6.8 million increase in salaries and employee benefits as a result of a $4.1 million increase in salaries and employee benefits from continued investment in talent.

Financial Condition

Total LHI, excluding MW and PPP loans, were $8.5 billion at September 30, 2022, an increase of $594.6 million, or 30.0% annualized, compared to June 30, 2022. The increase was the result of the continued execution, and success of our loan growth strategy, including our continued investment in talent.

Total deposits were $8.7 billion at September 30, 2022, an increase of $230.7 million, or 10.8% annualized, compared to June 30, 2022. The increase was primarily the result of an increase of $262.4 million in interest-bearing transaction and savings deposits and an increase of $104.7 million in certificates and other time deposits, partially offset by a $136.4 million decrease in non-interest bearing deposits.

Credit Quality

Nonperforming assets totaled $30.6 million, or 0.26% of total assets at September 30, 2022, compared to $45.0 million, or 0.40% of total assets, at June 30, 2022. The Company had net charge-offs of $2.2 million for the quarter, which were fully reserved against in prior quarters under our allowance for credit loss ("ACL") model.

The Company recorded a provision for credit losses of $6.7 million for the three months ended September 30, 2022, a $9.0 million provision for credit losses for the three months ended June 30, 2022 and no provision for credit losses for the three months ended September 30, 2021. The recorded provision for credit losses for the three months ended September 30, 2022, compared to the three months ended June 30, 2022, was primarily attributable to an increase in general reserves as a result of changes in economic factors and loan growth. For the three months ended September 30, 2022, we recorded an $850 thousand provision for unfunded commitments, which was attributable to changes in economic factors and an increase of unfunded balances. ACL as a percentage of LHI, excluding MW and PPP loans, was 1.00%, 1.02% and 1.42% at September 30, 2022, June 30, 2022 and September 30, 2021, respectively.

Dividend Information

After the close of the market on Tuesday, October 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 November 25, 2022 to stockholders of record as of the close of business on November 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 and webcast to review the results on Wednesday, October 26, 2022, at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/w5hrkf8v 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/BIcf08415eefb54948a6cdbc60349b8e55. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.

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

About Veritex Holdings, Inc.

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

Forward-Looking Statements

This earnings release includes "forward-looking statements", within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors, which change over time and are beyond our control, that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to 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; the effects of the COVID-19 pandemic and actions taken in response thereto; and Veritex's future financial performance, business and growth strategy, projected plans and objectives, as well as other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "seeks," "targets," "outlooks," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. We refer you to the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of Veritex's Annual Report on Form 10-K for the year ended December 31, 2021 and any updates to those risk factors set forth in Veritex's Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission ("SEC"), which are available on the SEC's website at www.sec.gov. If one or more events related to these or other risks or uncertainties materialize, or if Veritex's underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. Veritex does not undertake any obligation, and specifically declines any obligation, to supplement, update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, expressed or implied, included in this earnings release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Veritex or persons acting on Veritex's behalf may issue.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(Unaudited)

	For the Quarter Ended															For the Nine Months Ended
	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Sep 30, 2022			Sep 30, 2021

	(Dollars and shares in thousands)
Per Share Data (Common Stock):
Basic EPS	$	0.80		$	0.55		$	0.66		$	0.84		$	0.75		$	2.01		$	1.98
Diluted EPS		0.79			0.54			0.65			0.82			0.73			1.98			1.95
Book value per common share		26.15			26.50			26.86			26.64			26.09			26.15			26.09
Tangible book value per common share¹		17.91			18.20			18.51			17.49			17.53			17.91			17.53
Dividends paid per common share outstanding²		0.20			0.20			0.20			0.20			0.20			0.60			0.57

Common Stock Data:
Shares outstanding at period end		53,988			53,951			53,907			49,372			49,229			53,988			49,229
Weighted average basic shares outstanding for the period		53,979			53,949			50,695			49,329			49,423			52,886			49,431
Weighted average diluted shares outstanding for the period		54,633			54,646			51,571			50,441			50,306			53,655			50,230

Summary of Credit Ratios:
ACL to total LHI, excluding MW and PPP loans		1.00	%		1.02	%		1.02	%		1.15	%		1.42	%		1.00	%		1.42	%
NPAs to total assets		0.26			0.40			0.46			0.51			0.77			0.26			0.77
Net charge-offs to average loans outstanding		0.03			0.01			0.07			0.19			0.09			0.10			0.18

Summary Performance Ratios:
Return on average assets³		1.50			1.11			1.36			1.68			1.56			1.33			1.42
Return on average equity³		11.82			8.21			10.00			12.65			11.32			10.02			10.43
Return on average tangible common equity^{1, 3}		17.82			12.68			15.84			20.06			17.72			15.40			16.70
Efficiency ratio		44.71			50.76			52.84			48.53			47.55			49.05			49.79
Net interest margin		3.77			3.42			3.22			3.37			3.26			3.48			3.20

Selected Performance Metrics - Operating:
Diluted operating EPS¹	$	0.80		$	0.55		$	0.66		$	0.84		$	0.70		$	2.00		$	1.94
Pre-tax, pre-provision operating return on average assets^{1, 2}		2.20	%		1.76	%		1.71	%		1.97	%		1.85	%		1.90	%		1.78	%
Operating return on average assets^{1, 3}		1.51			1.12			1.38			1.72			1.48			1.34			1.41
Operating return on average tangible common equity^{1, 3}		17.94			12.77			16.08			20.48			16.92			15.55			16.57
Operating efficiency ratio¹		44.37			50.45			52.05			47.64			48.51			48.59			49.89

Veritex Holdings, Inc. Capital Ratios:
Average stockholders' equity to average total assets		12.69	%		13.51	%		13.58	%		13.30	%		13.75	%		13.23	%		13.63	%
Tangible common equity to tangible assets¹		8.58			9.04			9.98			9.28			9.43			8.58			9.43
Tier 1 capital to average assets (leverage)		9.79			10.14			10.66			9.05			9.54			9.79			9.54
Common equity tier 1 capital		9.09			9.25			9.84			8.58			8.75			9.09			8.75
Tier 1 capital to risk-weighted assets		9.35			9.52			10.14			8.89			9.06			9.35			9.06
Total capital to risk-weighted assets		11.68			11.95			12.73			11.60			12.31			11.68			12.31

¹Refer to the section titled "Reconciliation of Non-GAAP Financial Measures" after the financial highlights for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.

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

³Annualized ratio for quarterly metrics.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(In thousands)

	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
	(unaudited)			(unaudited)			(unaudited)						(unaudited)
ASSETS
Cash and cash equivalents	$	433,897		$	410,716		$	551,573		$	379,784		$	229,712
Debt securities		1,303,004			1,354,403			1,244,514			1,052,494			1,103,745
Other investments		115,551			202,685			188,699			190,591			191,786

Loans held for sale		17,644			14,210			18,721			26,007			18,896
LHI, PPP loans, carried at fair value		2,821			7,339			18,512			53,369			135,842
LHI, MW		523,805			629,291			542,877			565,645			615,045
LHI, excluding MW and PPP		8,510,433			7,915,792			7,125,429			6,766,009			6,615,905
Total loans		9,054,703			8,566,632			7,705,539			7,411,030			7,385,688
ACL		(85,037	)		(80,576	)		(72,485	)		(77,754	)		(93,771	)
Bank-owned life insurance		84,030			84,097			83,641			83,194			83,781
Bank premises, furniture and equipment, net		108,720			108,769			109,138			109,271			116,063
Other real estate owned ("OREO")		—			1,032			1,062			—			—
Intangible assets, net of accumulated amortization		56,238			59,011			63,986			66,017			54,682
Goodwill		404,452			404,452			404,452			403,771			370,840
Other assets		238,896			193,590			173,561			138,851			129,774
Total assets	$	11,714,454		$	11,304,811		$	10,453,680		$	9,757,249		$	9,572,300
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing deposits	$	2,811,412		$	2,947,830		$	2,765,895		$	2,510,723		$	2,302,925
Interest-bearing transaction and savings deposits		4,269,668			4,007,250			3,688,292			3,276,312			3,228,306
Certificates and other time deposits		1,667,364			1,562,626			1,435,409			1,576,580			1,647,521
Total deposits		8,748,444			8,517,706			7,889,596			7,363,615			7,178,752
Accounts payable and other liabilities		173,198			126,116			105,552			69,160			66,571
Advances from Federal Home Loan Bank ("FHLB")		1,150,000			1,000,000			777,522			777,562			777,601
Subordinated debentures and subordinated notes		228,524			228,272			228,018			227,764			262,761
Securities sold under agreements to repurchase		2,389			3,275			4,996			4,069			2,455
Total liabilities		10,302,555			9,875,369			9,005,684			8,442,170			8,288,140
Commitments and contingencies
Stockholders' equity:
Common stock		606			606			605			560			559
Additional paid-in capital		1,303,171			1,300,170			1,297,161			1,142,758			1,137,889
Retained earnings		350,195			317,664			298,830			275,273			243,633
Accumulated other comprehensive (loss) income		(74,491	)		(21,416	)		18,982			64,070			69,661
Treasury stock		(167,582	)		(167,582	)		(167,582	)		(167,582	)		(167,582	)
Total stockholders' equity		1,411,899			1,429,442			1,447,996			1,315,079			1,284,160
Total liabilities and stockholders' equity	$	11,714,454		$	11,304,811		$	10,453,680		$	9,757,249		$	9,572,300

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(In thousands, except per share data)

	For the Quarter Ended															For the Nine Months Ended
	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Sep 30, 2022		Sep 30, 2021
Interest income:
Loans, including fees	$	109,199		$	82,191		$	71,443		$	74,174		$	71,139		$	262,833	$	206,352
Debt securities		10,462			9,632			7,762			9,553			7,613			27,856		22,579
Deposits in financial institutions and Fed Funds sold		1,898			714			262			165			130			2,874		424
Equity securities and other investments		1,666			1,057			910			1,004			898			3,633		2,233
Total interest income		123,225			93,594			80,377			84,896			79,780			297,196		231,588
Interest expense:
Transaction and savings deposits		12,897			4,094			1,751			1,629			1,588			18,742		5,229
Certificates and other time deposits		3,919			1,465			1,380			1,661			1,934			6,764		7,418
Advances from FHLB		2,543			834			1,547			1,847			1,848			4,924		5,489
Subordinated debentures and subordinated notes		2,826			2,721			2,659			3,018			3,134			8,206		9,410
Total interest expense		22,185			9,114			7,337			8,155			8,504			38,636		27,546
Net interest income		101,040			84,480			73,040			76,741			71,276			258,560		204,042
Provision (benefit) for credit losses		6,650			9,000			(500	)		(3,349	)		—			15,150		—
Provision (benefit) for unfunded commitments		850			—			493			(1,040	)		(448	)		1,343		(441	)
Net interest income after provisions		93,540			75,480			73,047			81,130			71,724			242,067		204,483
Noninterest income:
Service charges and fees on deposit accounts		5,217			5,039			4,710			4,782			4,484			14,966		11,960
Loan fees		2,786			2,385			2,794			2,697			1,746			7,965		4,910
Loss on sales of investment securities		—			—			—			—			(188	)		—		(188	)
Gain on sales of mortgage loans held for sale		16			223			307			293			407			546		1,299
Government guaranteed loan income, net		572			789			4,891			3,423			2,341			6,252		12,337
Equity method investment (loss) income		(1,058	)		966			367			1,238			4,522			275		4,522
Customer swap income		3,358			1,321			946			796			1,093			5,625		1,694
Other income (loss)		2,130			(345	)		1,082			2,921			1,222			2,867		5,721
Total noninterest income		13,021			10,378			15,097			16,150			15,627			38,496		42,255
Noninterest expense:
Salaries and employee benefits		29,714			26,924			27,513			25,401			22,964			84,151		69,347
Occupancy and equipment		4,615			4,496			4,517			4,398			4,536			13,628		12,865
Professional and regulatory fees		3,718			2,865			3,158			3,017			3,401			9,741		9,928
Data processing and software expense		3,509			3,386			2,921			2,597			2,494			9,816		7,349
Marketing		1,845			2,306			1,187			1,443			1,151			5,338		3,901
Amortization of intangibles		2,494			2,495			2,495			2,494			2,509			7,484		7,563
Telephone and communications		389			352			385			380			380			1,126		1,054
Merger and acquisition ("M&A") expense		384			295			700			826			—			1,379		—
Other		4,323			5,034			3,696			4,521			3,886			13,053		10,628
Total noninterest expense		50,991			48,153			46,572			45,077			41,321			145,716		122,635
Income before income tax expense		55,570			37,705			41,572			52,203			46,030			134,847		124,103
Income tax expense		12,248			8,079			8,102			10,697			9,195			28,429		26,025
Net income	$	43,322		$	29,626		$	33,470		$	41,506		$	36,835		$	106,418	$	98,078
Net income available to common stockholders	$	43,322		$	29,626		$	33,470		$	41,506		$	36,835		$	106,418	$	98,078

Basic EPS	$	0.80		$	0.55		$	0.66		$	0.84		$	0.75		$	2.01	$	1.98
Diluted EPS	$	0.79		$	0.54		$	0.65		$	0.82		$	0.73		$	1.98	$	1.95
Weighted average basic shares outstanding		53,979			53,949			50,695			49,329			49,423			52,886		49,431
Weighted average diluted shares outstanding		54,633			54,646			51,571			50,441			50,306			53,655		50,230

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(Unaudited)

	For the Quarter Ended
	September 30, 2022							June 30, 2022							September 30, 2021
	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

	(In thousands, except percentages)
Assets
Interest-earning assets:
Loans¹	$	8,277,762		$	104,543	5.01	%	$	7,547,564		$	78,234	4.16	%	$	6,384,856		$	66,911	4.16	%
LHI, MW		448,556			4,649	4.11			479,187			3,929	3.29			465,945			3,697	3.15
PPP loans		2,775			7	1.00			11,402			28	1.00			210,092			531	1.00
Debt securities		1,362,365			10,462	3.05			1,318,502			9,632	2.93			1,119,952			7,613	2.70
Interest-bearing deposits in other banks		346,296			1,898	2.17			369,847			714	0.77			336,289			130	0.15
Equity securities and other investments		203,528			1,666	3.25			167,327			1,057	2.53			167,242			898	2.13
Total interest-earning assets		10,641,282			123,225	4.59			9,893,829			93,594	3.79			8,684,376			79,780	3.64
ACL		(81,888	)						(74,268	)						(99,482	)
Noninterest-earning assets		901,463							892,102							800,576
Total assets	$	11,460,857						$	10,711,663						$	9,385,470

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	4,164,164		$	12,897	1.23	%	$	3,770,098		$	4,094	0.44	%	$	3,201,409		$	1,588	0.20	%
Certificates and other time deposits		1,656,347			3,919	0.94			1,459,690			1,465	0.40			1,519,824			1,934	0.50
Advances from FHLB		904,065			2,543	1.12			828,769			834	0.40			777,617			1,848	0.94
Subordinated debentures and subordinated notes		231,012			2,826	4.85			232,043			2,721	4.70			264,714			3,134	4.70
Total interest-bearing liabilities		6,955,588			22,185	1.27			6,290,600			9,114	0.58			5,763,564			8,504	0.59

Noninterest-bearing liabilities:
Noninterest-bearing deposits		2,925,462							2,870,692							2,271,197
Other liabilities		125,991							102,994							60,181
Total liabilities		10,007,041							9,264,286							8,094,942
Stockholders' equity		1,453,816							1,447,377							1,290,528
Total liabilities and stockholders' equity	$	11,460,857						$	10,711,663						$	9,385,470

Net interest rate spread²						3.32	%						3.21	%						3.05	%
Net interest income and margin³					101,040	3.77	%					84,480	3.42	%					71,276	3.26	%

¹ Includes average outstanding balances of loans held for sale of $14,023, $12,112 and $8,542 for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively, and average balances of LHI, excluding MW and PPP loans.

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

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

VERITEX HOLDINGS, INC. AND SUBSIDIARY

Financial Highlights

(In thousands except percentages)

	Nine Months Ended
	September 30, 2022							September 30, 2021
	Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate
Assets
Interest-earning assets:
Loans¹	$	7,558,825		$	255,630	4.52	%	$	6,118,880		$	193,040	4.22	%
LHI, WH		449,906			6,998	2.08			477,319			10,988	3.08
PPP loans		27,477			205	1.00			309,620			2,324	1.00
Debt securities		1,274,712			27,856	2.92			1,093,263			22,579	2.76
Interest-bearing deposits in other banks		422,905			2,874	0.91			408,601			424	0.14
Equity securities and other investments		187,002			3,633	2.60			114,237			2,233	2.61
Total interest-earning assets		9,920,827			297,196	4.01			8,521,920			231,588	3.63
ACL		(78,015	)						(103,478	)
Noninterest-earning assets		886,357							799,207
Total assets	$	10,729,169						$	9,217,649

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	3,804,506		$	18,742	0.66	%	$	3,144,395		$	5,229	0.22	%
Certificates and other time deposits		1,539,861			6,764	0.59			1,514,954			7,418	0.65
Advances from FHLB		837,254			4,924	0.79			777,655			5,489	0.94
Subordinated debentures and subordinated notes		231,640			8,206	4.74			264,998			9,410	4.75
Total interest-bearing liabilities		6,413,261			38,636	0.81			5,702,002			27,546	0.65

Noninterest-bearing liabilities:
Noninterest-bearing deposits		2,797,110							2,198,551
Other liabilities		98,898							60,456
Total liabilities		9,309,269							7,961,009
Stockholders' equity		1,419,900							1,256,640
Total liabilities and stockholders' equity	$	10,729,169						$	9,217,649

Net interest rate spread²						3.20	%						2.98	%
Net interest income and margin³				$	258,560	3.48	%				$	204,042	3.20	%

¹ Includes average outstanding balances of loans held for sale of $12,973 and $13,140 for the nine months ended September 30, 2022 and 2021, respectively, and average balances of LHI, excluding MW and PPP loans.

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

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

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

Yield Trend

	For the Quarter Ended
	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021
Average yield on interest-earning assets:
Loans¹	5.01	%	4.16	%	4.03	%	4.12	%	4.16	%
LHI, MW	4.11		3.29		2.95		2.98		3.15
PPP loans	1.00		1.00		1.00		1.00		1.00
Debt securities	3.05		2.93		2.76		3.47		2.70
Interest-bearing deposits in other banks	2.17		0.77		0.19		0.16		0.15
Equity securities and other investments	3.25		2.53		1.94		2.09		2.13
Total interest-earning assets	4.59	%	3.79	%	3.54	%	3.72	%	3.64	%

Average rate on interest-bearing liabilities:
Interest-bearing demand and savings deposits	1.23	%	0.44	%	0.20	%	0.19	%	0.20	%
Certificates and other time deposits	0.94		0.40		0.37		0.41		0.50
Advances from FHLB	1.12		0.40		0.81		0.94		0.94
Subordinated debentures and subordinated notes	4.85		4.70		4.65		4.62		4.70
Total interest-bearing liabilities	1.27	%	0.58	%	0.50	%	0.54	%	0.59	%

Net interest rate spread²	3.32	%	3.21	%	3.04	%	3.18	%	3.05	%
Net interest margin³	3.77	%	3.42	%	3.22	%	3.37	%	3.26	%

¹Includes average outstanding balances of loans held for sale of $14,023, $12,112, $12,769, $8,987 and $8,542 for the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, 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
	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021
Average cost of interest-bearing deposits	1.15	%	0.43	%	0.26	%	0.26	%	0.30	%
Average costs of total deposits, including noninterest-bearing	0.76		0.28		0.17		0.18		0.20

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(Unaudited)

LHI and Deposit Portfolio Composition

	Sep 30, 2022					Jun 30, 2022					Mar 31, 2022					Dec 31, 2021					Sep 30, 2021

	(In thousands, except percentages)
LHI¹
Commercial	$	2,740,948		32.1	%	$	2,450,403		30.9	%	$	2,125,900		29.8	%	$	2,006,876		29.6	%	$	1,793,740		27.1	%
Real Estate:
Owner occupied commercial ("OOCRE")		677,705		7.9			646,723		8.2			633,615		8.9			665,537		9.8			711,476		10.7
Non-owner occupied commercial ("NOOCRE")		2,273,305		26.7			2,203,970		27.8			2,145,826		30.0			2,120,309		31.3			2,194,438		33.1
Construction and land		1,673,997		19.6			1,532,997		19.3			1,297,338		18.2			1,062,144		15.7			936,174		14.1
Farmland		43,569		0.5			47,319		0.6			48,095		0.7			55,827		0.8			73,550		1.1
1-4 family residential		858,693		10.1			765,260		9.6			604,408		8.5			542,566		8.0			543,518		8.2
Multi-family residential		252,244		3.0			276,632		3.5			272,250		3.8			310,241		4.6			356,885		5.4
Consumer		7,465		0.1			7,520		0.1			9,533		0.1			11,998		0.2			14,266		0.3
Total LHI	$	8,527,926		100	%	$	7,930,824		100	%	$	7,136,965		100	%	$	6,775,498		100	%	$	6,624,047		100	%

MW		523,805					629,291					542,877					565,645					615,045
PPP loans		2,821					7,339					18,512					53,369					135,842

Total LHI¹	$	9,054,552				$	8,567,454				$	7,698,354				$	7,394,512				$	7,374,934

Deposits
Noninterest-bearing	$	2,811,412		32.1	%	$	2,947,830		34.6	%	$	2,765,895		35.1	%	$	2,510,723		34.1	%	$	2,302,925		32.1	%
Interest-bearing transaction		603,729		6.9			660,557		7.8			599,580		7.6			579,408		7.9			514,537		7.2
Money market		3,533,532		40.4			3,217,195		37.8			2,958,790		37.5			2,568,843		34.9			2,585,926		36.0
Savings		132,407		1.5			129,498		1.5			129,922		1.6			128,061		1.7			127,843		1.8
Certificates and other time deposits		1,667,364		19.1			1,562,626		18.3			1,435,409		18.2			1,576,580		21.4			1,647,521		22.9
Total deposits	$	8,748,444		100	%	$	8,517,706		100	%	$	7,889,596		100	%	$	7,363,615		100	%	$	7,178,752		100	%

Loan to Deposit Ratio		103.5	%				100.6	%				97.6	%				100.4	%				102.7	%

Loan to Deposit Ratio, excluding MW and PPP loans		97.5	%				93.1	%				90.5	%				92.0	%				92.3	%

¹ Total LHI does not include deferred fees of $17.5 million, $15.0 million, $11.5 million, $9.5 million and $8.1 million at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES

Financial Highlights

(Unaudited)

Asset Quality

	For the Quarter Ended															For the Nine Months Ended
	Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Sep 30, 2022			Sep 30, 2021

	(In thousands, except percentages)
NPAs:
Nonaccrual loans	$	30,592		$	42,242		$	46,680		$	49,687		$	72,317		$	30,592		$	72,317
Accruing loans 90 or more days past due¹		—			1,753			264			441			1,711			—			1,711
Total nonperforming loans held for investment ("NPLs")		30,592			43,995			46,944			50,128			74,028			30,592			74,028
OREO		—			1,032			1,062			—			—			—			—
Total NPAs	$	30,592		$	45,027		$	48,006		$	50,128		$	74,028		$	30,592		$	74,028

Charge-offs:
1-4 family residential	$	—		$	—		$	—		$	—		$	(64	)	$	—		$	(379	)
OOCRE		(1,061	)		(244	)		(1,341	)		(898	)		(813	)		(2,646	)		(1,502	)
NOOCRE		(838	)		—			(553	)		(7,936	)		—			(1,391	)		—
Commercial		(460	)		(528	)		(3,294	)		(4,114	)		(5,508	)		(4,282	)		(11,462	)
Consumer		(19	)		(1,091	)		(134	)		(44	)		(17	)		(1,244	)		(55	)
Total charge-offs		(2,378	)		(1,863	)		(5,322	)		(12,992	)		(6,402	)		(9,563	)		(13,398	)

Recoveries:
1-4 family residential		4			3			—			6			26			7			58
OOCRE		—			245			—			—			—			245			500
NOOCRE		3			93			400			—			—			496			—
Commercial		177			572			144			61			596			893			1,481
Consumer		5			41			9			257			8			55			46
Total recoveries		189			954			553			324			630			1,696			2,085

Net charge-offs	$	(2,189	)	$	(909	)	$	(4,769	)	$	(12,668	)	$	(5,772	)	$	(7,867	)	$	(11,313	)


ACL	$	85,037		$	80,576		$	72,485		$	77,754		$	93,771		$	85,037

Veritex Holdings, Inc. Reports Third Quarter Operating Results