Attached files

file filename
8-K - CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES - Veritex Holdings, Inc.a16-2719_18k.htm

Exhibit 99.1

 

Veritex Holdings, Inc. Reports Fourth Quarter and Year-End 2015 Results

 

Dallas, TX — January 26, 2016 —Veritex Holdings, Inc. (NASDAQ: VBTX), the holding company for Veritex Community Bank, announced the results today for the quarter and year ended December 31, 2015. The Company reported net income for the year ended December 31, 2015 of $8.8 million and $0.84 diluted earnings per common share, compared to net income of $5.2 million and $0.72 diluted earnings per common share for the year ended December 31, 2014, an increase of $3.6 million or 68.9% over the prior year. The Company also reported net income of $2.6 million and $0.23 diluted earnings per common share for the quarter ended December 31, 2015 compared to net income of $2.5 million and $0.23 diluted earnings per common share for the quarter ended September 30, 2015, an increase of $36,000 or 1.4%, over the prior quarter.

 

Malcolm Holland, the Company’s Chairman and Chief Executive Officer said, “I am excited to announce the results of another fantastic year. Earnings have increased each quarter since our IPO in October of 2014. I am pleased to see this trend continue throughout 2015.  Looking back on the year, I am proud of our many accomplishments. In addition to our record earnings trend, we saw a record level of loan originations, portfolio growth and improved returns on assets and equity.

 

Mr. Holland also said, “Our fourth quarter was really the capstone of the year.  Loan growth in this quarter exceeded our expectations and drove a substantial increase in pre-tax, pre-provision income by $668,000 over the prior quarter. This quarter’s positive momentum will give us a great start into 2016.”

 

Full Year 2015 Highlights

 

·                  Full year 2015 diluted earnings per common share increased to $0.84 or 16.7% compared to $0.72 for the full year 2014

·                  Net income was $8.8 million for 2015, an increase of $3.6 million or 68.9% compared to $5.2 million for the full year 2014

·                  Pre-tax, pre-provision income was $13.8 million for 2015, an increase of $4.4 million or 47.6% compared to $9.3 million for the full year 2014

·                  Average loan balances increased $151.4 million or 27.7% compared to the full year 2014

·                  Average noninterest deposits increased $36.7 million or 15.9% compared to the full year 2014

·                  Credit quality remained excellent with nonperforming assets to total assets at 0.1% and net charge-offs for the full year 2015 at  $77,000

·                  The acquisition of IBT Bancorp, Inc. (“IBT”) closed successfully on July 1, 2015 and was fully integrated into systems and operations on August 22, 2015

·                  No loans secured by oil and gas assets at December 31, 2015

 

2015 Fourth Quarter Highlights

 

·                  Pre-tax, pre-provision income was $4.5 million,  an increase of $668,000 or 17.5% compared to $3.8 million for the prior quarter

·                  Net interest income grew $396,000 or 4.6% compared to the prior quarter

·                  Noninterest income increased $164,000 or 15.7% compared to the prior quarter

·                  Noninterest expense declined $108,000 or 1.8% compared to the prior quarter

·                  Total loans increased $67.5 million or 8.9% to $823.4 million compared to the prior quarter

·                  Total deposits increased $25.8 million or 3.1% to $868.4 million compared to the prior quarter

·                  Hired an experienced commercial banking executive to lead larger, upper-end middle market efforts

·                  In November 2015, Veritex Bank was named in the list of  Dallas Morning News’ Top 100 Places to Work 2015

·                  Redeemed all 8,000 shares of the Company’s SBLF preferred stock at its liquidation value of $8 million plus accrued dividends of $18,000

 

1



 

Result of Operations for the Three Months Ended December 31, 2015

 

Net Interest Income

 

For the three months ended December 31, 2015, net interest income before provision for loan losses was $9.0 million and net interest margin was 3.78% compared to $8.6 million and 3.84%, respectively, for the three months ended September 30, 2015. Net interest income increased $396,000 primarily due to increased interest and fees on loans as average loan balances increased $35.3 million resulting from organic loan growth for the three months ended December 31, 2015 compared to the three months ended September 30, 2015. The net interest margin decreased 0.06% from the three months ended September 30, 2015. The average rate paid on interest-bearing liabilities increased 0.02% from 0.67% for the three months ended September 30, 2015. The increase in the rate is primarily due to an increase in premium rate money market accounts with an average rate of 0.70%. Average yield on loans decreased 0.01% from 4.84% for the three months ended September 30, 2015 to 4.83% for the quarter ended December 31, 2015. Competitive pricing pressure resulted in overall market yields for loan originations and renewals to be below the average yield of amortizing or paid-off loans.

 

Compared to the three months ended December 31, 2014, net interest income before provision for loan losses increased by $2.2 million from $6.8 million to $9.0 million for the three months ended December 31, 2015. The increase in net interest income before provision for loan losses was primarily due to increased interest and fees as average loan balances increased $90.5 million from the acquisition of IBT, which closed in July 2015, and organic loan growth of $101.5 million compared to average loans for the three months ended December 31, 2014. Net interest margin improved 0.04% over 3.74% for the same three months in 2014. The rate paid on interest-bearing liabilities decreased from 0.73% for the three months ended December 31, 2014 to 0.69% for the three months ended December 31, 2015. The decrease was related to a change in the mix of deposits from premium money market accounts with an average rate of 0.65% and certificates of deposits with an average rate paid of 1.14% to money market accounts with average rate paid of 0.25%. Average yield on loans declined 0.02% from 4.85% for the three months ended December 31, 2014 to 4.83% for the quarter ended December 31, 2015. Competitive pricing pressure resulted in overall market yields for loan originations and renewals to be below the average yield of amortizing or paid-off loans.

 

Noninterest Income

 

Noninterest income for the three months ended December 31, 2015 was $1.2 million, an increase of $164,000 or 15.7% compared to the three months ended September 30, 2015. The increase was primarily a result of bi-annual dividends received on Federal Reserve Bank stock of $85,000, increased gains on sale of SBA loans of $49,000, and seasonal growth in service charges and fees on deposit accounts of $39,000.

 

Compared to the three months ended December 31, 2014, noninterest income grew $551,000 or 84.0%, primarily as a result of gains on sale of SBA loans and servicing fees totaling $345,000, increased deposit service charges and fees on deposit accounts of $127,000, and increased insurance income from the bank owned life insurance (BOLI) acquired in connection with the acquisition of IBT.

 

Noninterest Expense

 

Noninterest expense was $5.7 million for the three months ended December 31, 2015, compared to noninterest expense of $5.8 million for the three months ended September 30, 2015, a decrease of $108,000 or 1.8%. The decrease was primarily driven by a reduction in investment banker professional fees incurred in the three months ended September 30, 2015 related to the successful acquisition of IBT in July 2015.

 

Compared to the three months ended December 31, 2014, noninterest expense increased $1.1 million. This increase was in large part due to increases in salary and employee benefit expenses of $575,000 and occupancy and equipment expenses of $131,000 primarily related to the acquisition of IBT.   The IBT acquisition was also the primary driver of increases in data processing and software expense of $32,000, FDIC assessment fees of $26,000, telephone and communication expense of $23,000 and other non-interest expense of $150,000.

 

2



 

Income Taxes

 

Income tax expense for the three months ended December 31, 2015 totaled $1.3 million, an increase of $22,000 or 1.7% compared to the three months ended September 2015. The Company’s effective tax rate was approximately 33.6% for the three months ended December 31, 2015 and the three months ended September 30, 2015.

 

Compared to the three months ended December 31, 2014, income tax expense increased $510,000 or 64.3% for the three months ended December 31, 2015. The Company’s effective tax rate was approximately 33.6% for the three months ended December 31, 2015 compared to 31.9% for the three months ended December 31, 2014. The increase in effective tax rate was primarily the result of a net discrete tax benefit associated with recognition of deferred tax assets related to non-qualified stock options during the three months ended December 31, 2014.

 

Financial Condition

 

Loans (excluding loans held for sale and deferred loan fees) at December 31, 2015 were $820.6 million, an increase of $66.4 million or 8.8% compared to $754.2 million at September 30, 2015. The increase from September 30, 2015 was primarily the result of the continued execution and success of our organic growth strategy.

 

Loans (excluding loans held for sale and deferred loan fees) increased $217.3 million or 36.0% compared to $603.3 million at December 31, 2014. The acquisition of IBT represents approximately 41.5% of the increase from the prior year with the remainder of $127.1 million achieved through organic growth.

 

Deposits at December 31, 2015 were $868.4 million, an increase of $25.8 million or 3.1% compared to $842.6 million at September 30, 2015 due to growth in retail money market accounts and wholesale deposits.

 

Deposits increased $229.7 million or 36.0% compared to $638.7 million at September 30, 2014. The increase from December 31, 2014 was due to the acquisition of IBT’s deposits of approximately $98.3 million, customer deposit growth of approximately $55.6 million, and wholesale deposit growth of approximately $75.8 million.

 

Advances from the Federal Home Loan Bank were $28.4 million at December 31, 2015 compared to $18.5 million at September 30, 2015 and $40.0 million at December 31, 2014.

 

Asset Quality

 

Nonperforming assets totaled $1.1 million or 0.1% of total assets at December 31, 2015 compared to $921,000 or 0.09% at September 30, 2015.  Nonperforming  assets  were $541,000 or 0.07% of total assets at December 31, 2014.

 

The allowance for loan losses was 0.83% of total loans at December 31, 2015 compared to 0.82% of total loans at September 30, 2015 and 0.99% of total loans at December 31, 2014. The increase in allowance for loan losses as a percentage of total loans compared to September 30, 2015 was minimal as credit quality remained strong.  The decrease in allowance for loan losses as a percentage of total loans compared to December 31, 2014 was primarily due to the recording of IBT acquired loans at an estimated fair value.

 

Other real estate owned totaled $493,000 at December 31, 2015 and September 30, 2015 compared to $105,000 at December 31, 2014. Nonaccrual loans were $593,000 at December 31, 2015 compared to $428,000 at September 30, 2015 and $436,000 at December 31, 2014.

 

The provision for loan losses for the three months ended December 31, 2015 totaled  $610,000 compared to  no provision for loan losses for three months ended September 30, 2015 and $326,000 for the three months ended December 31, 2014.  The increases were related to general provision requirements related to loan growth as credit quality remained strong.

 

3



 

Non-GAAP Financial Measures

 

The Company’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, the Company reviews and reports tangible book value per common share, the tangible common equity to tangible assets ratio and pre-tax, pre-provision income. The Company has included in this release information related to these non-GAAP financial measures for the applicable periods presented. Please refer to “Consolidated Financial Highlights” at the end of this release for a reconciliation of these non-GAAP financial measures.

 

About Veritex Holdings, Inc.

 

Headquartered in Dallas, Texas, Veritex Holdings, Inc. is a bank holding company that conducts banking activities through its wholly-owned subsidiary, Veritex Community Bank, with ten locations throughout the Dallas 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.

 

Acquisition of IBT Bancorp, Inc.

 

On July 1, 2015, the Company completed the acquisition of IBT, the parent holding company of Independent Bank, headquartered in Irving, Texas with two banking locations in the Dallas metropolitan area. Under the terms of the definitive agreement, the Company issued 1,185,067 shares of its common stock (with cash in lieu of fractional shares) and paid approximately $4.0 million in cash for the outstanding shares of IBT common stock in connection with the closing of the acquisition, which resulted in goodwill of $6.9 million as of July 1, 2015. Additionally, we recognized $1.1 million of core deposit intangibles as of July 1, 2015.  The fair values of loans purchased and goodwill are preliminary estimates as of December 31, 2015 as fair value adjustments are still being finalized as of the date of this press release.

 

For more information, visit www.veritexbank.com

 

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release may contain certain forward-looking statements within the meaning of the securities laws that are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about the Company and its subsidiaries. Forward-looking statements include information regarding the Company’s future financial performance, business and growth strategy, projected plans and objectives, expectations concerning the costs associated with the acquisition of IBT and related transactions, integration of the acquired business, ability to recognize  anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic 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. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to whether the Company can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions; continue to sustain internal growth rate; provide competitive products and services that appeal to its customers and target market; continue to have access to debt and equity capital markets; and achieve its performance goals.  Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); economic conditions, including currency rate fluctuations and interest rate fluctuations; and weather. These and various other factors are discussed in the Company’s Final Prospectus, dated October 10, 2014, filed pursuant to Rule 424(b)(4), the Company’s Annual Report on Form 10-K filed on March 27, 2015, and other reports and statements the Company has filed with the Securities and Exchange Commission. Copies of such filings are available for download free of charge from www.veritexbank.com under the Investor Relations tab.

 

4



 

VERITEX HOLDINGS, INC. AND SUBSIDIARY

Consolidated Financial Highlights - (Unaudited)

(In thousands, except share and per share data)

 

 

 

At and For the Three Months Ended

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

 

 

2015

 

2015

 

2015

 

2015

 

2014

 

Selected Financial Data:

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,573

 

$

2,537

 

$

1,856

 

$

1,824

 

$

1,690

 

Net income available to common stockholders

 

2,535

 

2,517

 

1,836

 

1,804

 

1,670

 

Total assets

 

1,039,600

 

1,009,539

 

827,140

 

808,906

 

802,286

 

Total loans(1)

 

820,605

 

754,199

 

644,938

 

615,495

 

603,310

 

Provision for loan losses

 

610

 

 

148

 

110

 

326

 

Allowance for loan losses

 

6,772

 

6,214

 

6,193

 

6,006

 

5,981

 

Noninterest-bearing deposits

 

301,367

 

299,864

 

240,919

 

241,732

 

251,124

 

Total deposits

 

868,410

 

842,607

 

673,106

 

668,255

 

638,743

 

Total stockholders’ equity

 

132,046

 

137,508

 

117,085

 

115,133

 

113,312

 

Summary Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

Return on average assets(2)

 

0.99

%

1.04

%

0.93

%

0.94

%

0.86

%

Return on average equity(2)

 

7.37

 

7.38

 

6.39

 

6.45

 

6.21

 

Net interest margin(3)

 

3.78

 

3.84

 

3.77

 

3.82

 

3.74

 

Efficiency ratio(4)

 

56.11

 

60.48

 

61.75

 

66.67

 

62.49

 

Noninterest expense to average assets(2)

 

2.22

 

2.39

 

2.36

 

2.61

 

2.38

 

Summary Credit Quality Data:

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

593

 

$

428

 

$

312

 

$

323

 

$

436

 

Accruing loans 90 or more days past due

 

84

 

 

 

 

 

Other real estate owned

 

493

 

493

 

548

 

548

 

105

 

Nonperforming assets to total assets

 

0.10

%

0.09

%

0.10

%

0.12

%

0.07

%

Nonperforming loans to total loans

 

0.07

 

0.06

 

0.05

 

0.05

 

0.07

 

Allowance for loan losses to total loans

 

0.83

 

0.82

 

0.96

 

0.98

 

0.99

 

Net (recoveries) charge-offs to average loans outstanding

 

0.01

 

(0.00

)

(0.01

)

0.01

 

0.04

 

Capital Ratios:(6)

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity to total assets

 

12.70

%

13.62

%

14.16

%

14.23

%

14.11

%

Tangible common equity to tangible assets(5)

 

10.18

 

10.30

 

11.01

 

11.01

 

10.86

 

Tier 1 capital to average assets

 

10.83

 

12.02

 

12.82

 

12.78

 

12.66

 

Tier 1 capital to risk-weighted assets

 

12.93

 

14.73

 

14.87

 

15.43

 

15.45

 

Common equity tier 1 (to risk weighted assets)

 

12.56

 

13.29

 

13.23

 

13.70

 

n/a

 

Total capital to risk-weighted assets

 

14.34

 

16.18

 

16.52

 

17.16

 

17.21

 

 


(1)   Total loans does not include loans held for sale and deferred fees. Loans held for sale were $2.8 million at December 31, 2015, $1.8 million at September 30, 2015, $2.1 million at June 30, 2015, $2.5 million at March 31, 2015 and $8.9 million at December 31, 2014. Deferred fees were $61,000 at December 31, 2015, $55,000 at September 30, 2015, $49,000 at June 30, 2015, $50,000 at March 31, 2015 and $51,000 at December 31, 2014.

 

(2)  We calculate our average assets and average equity for a period by dividing the sum of our total assets or total stockholders’ equity, as the case may be, at the close of business on each day in the relevant period, by the number of days in the period. We have calculated our return on average assets and return on average equity for a period by dividing net income for that period by our average assets and average equity, as the case may be, for that period.

 

(3)  Net interest margin represents net interest income, annualized on a fully tax equivalent basis, divided by average interest-earning assets.

 

(4)  Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

 

(5)  We calculate tangible common equity as total stockholders’ equity less preferred stock, goodwill, core deposit intangibles and other intangible assets, net of accumulated amortization, and we calculate tangible assets as total assets less goodwill and core deposit intangibles and other intangible assets, net of accumulated amortization. Tangible common equity to tangible assets is a non-GAAP financial measure, and, as we calculate tangible common equity to tangible assets, the most directly comparable GAAP financial measure is total stockholders’ equity to total assets. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures in the table captioned “Reconciliation GAAP —NON-GAAP (Unaudited)”.

 

(6)  Decrease in capital ratios primarily driven by redemption of $8 million in SBLF preferred stock.

 

5



 

VERITEX HOLDINGS, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets - (Unaudited)

(In thousands, except share and per share data)

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

 

 

2015

 

2015

 

2015

 

2015

 

2014

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

 10,989

 

$

 10,478

 

$

 11,699

 

$

 9,338

 

$

 9,223

 

Interest bearing deposits in other banks

 

60,562

 

113,031

 

51,570

 

76,206

 

84,028

 

Total cash and cash equivalents

 

71,551

 

123,509

 

63,269

 

85,544

 

93,251

 

Investment securities

 

75,813

 

61,023

 

59,299

 

53,391

 

45,127

 

Loans held for sale

 

2,831

 

1,766

 

2,127

 

2,508

 

8,858

 

Loans, net

 

813,771

 

747,930

 

638,696

 

609,439

 

597,278

 

Accrued interest receivable

 

2,216

 

2,088

 

1,557

 

1,539

 

1,542

 

Bank-owned life insurance

 

19,459

 

19,299

 

18,115

 

17,969

 

17,822

 

Bank premises, furniture and equipment, net

 

17,449

 

17,585

 

12,107

 

11,526

 

11,150

 

Non-marketable equity securities

 

4,167

 

4,045

 

3,970

 

3,136

 

4,139

 

Investment in unconsolidated subsidiary

 

93

 

93

 

93

 

93

 

93

 

Other real estate owned

 

493

 

493

 

548

 

548

 

105

 

Intangible assets

 

2,410

 

2,458

 

1,110

 

1,186

 

1,261

 

Goodwill

 

26,827

 

26,025

 

19,148

 

19,148

 

19,148

 

Other assets

 

3,131

 

3,225

 

7,101

 

2,879

 

2,512

 

Total assets

 

$

1,039,600

 

$

1,009,539

 

$

827,140

 

$

808,906

 

$

802,286

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

301,367

 

$

299,864

 

$

240,919

 

$

241,732

 

$

251,124

 

Interest-bearing

 

567,043

 

542,743

 

432,187

 

426,523

 

387,619

 

Total deposits

 

868,410

 

842,607

 

673,106

 

668,255

 

638,743

 

Accounts payable and accrued expenses

 

1,776

 

1,782

 

1,202

 

1,049

 

1,582

 

Accrued interest payable and other liabilities

 

848

 

1,089

 

672

 

1,395

 

575

 

Advances from Federal Home Loan Bank

 

28,444

 

18,478

 

27,000

 

15,000

 

40,000

 

Junior subordinated debentures

 

3,093

 

3,093

 

3,093

 

3,093

 

3,093

 

Subordinated notes

 

4,983

 

4,982

 

4,982

 

4,981

 

4,981

 

Total liabilities

 

907,554

 

872,031

 

710,055

 

693,773

 

688,974

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

8,000

 

8,000

 

8,000

 

8,000

 

Common stock

 

107

 

107

 

95

 

95

 

95

 

Additional paid-in capital

 

115,721

 

115,579

 

97,761

 

97,480

 

97,469

 

Retained earnings

 

16,739

 

14,204

 

11,687

 

9,851

 

8,047

 

Unallocated Employee Stock Ownership Plan shares

 

(309

)

(406

)

(406

)

(401

)

(401

)

Accumulated other comprehensive income

 

(142

)

94

 

18

 

178

 

172

 

Treasury stock, 10,000 shares at cost

 

(70

)

(70

)

(70

)

(70

)

(70

)

Total stockholders’ equity

 

132,046

 

137,508

 

117,085

 

115,133

 

113,312

 

Total liabilities and stockholders’ equity

 

$

1,039,600

 

$

1,009,539

 

$

827,140

 

$

808,906

 

$

802,286

 

 

6



 

VERITEX HOLDINGS, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Income - (Unaudited)

(In thousands, except share and per share data)

 

 

 

For the Year Ended

 

 

 

December 31,

 

December 31,

 

 

 

2015

 

2014

 

Interest income:

 

 

 

 

 

Interest and fees on loans

 

$

33,680

 

$

27,236

 

Interest on investment securities

 

997

 

839

 

Interest on deposits in other banks

 

241

 

182

 

Interest on other

 

2

 

2

 

Total interest income

 

34,920

 

28,259

 

Interest expense:

 

 

 

 

 

Interest on deposit accounts

 

2,918

 

2,421

 

Interest on borrowings

 

543

 

498

 

Total interest expense

 

3,461

 

2,919

 

Net interest income

 

31,459

 

25,340

 

Provision for loan losses

 

868

 

1,423

 

Net interest income after provision for loan losses

 

30,591

 

23,917

 

Noninterest income:

 

 

 

 

 

Service charges and fees on deposit accounts

 

1,326

 

1,099

 

Gain on sales of investment securities

 

7

 

34

 

Gain on sales of loans

 

1,254

 

641

 

Gain on sales of other assets owned

 

19

 

10

 

Bank-owned life insurance

 

747

 

427

 

Other

 

351

 

285

 

Total noninterest income

 

3,704

 

2,496

 

Noninterest expense:

 

 

 

 

 

Salaries and employee benefits

 

11,265

 

10,037

 

Occupancy and equipment

 

3,477

 

3,246

 

Professional fees

 

2,023

 

1,382

 

Data processing and software expense

 

1,216

 

1,041

 

FDIC assessment fees

 

448

 

421

 

Marketing

 

799

 

588

 

Other assets owned expenses and write-downs

 

53

 

211

 

Amortization of intangibles

 

338

 

295

 

Telephone and communications

 

263

 

226

 

Other

 

1,506

 

1,056

 

Total noninterest expense

 

21,388

 

18,503

 

Net income from operations

 

12,907

 

7,910

 

Income tax expense

 

4,117

 

2,705

 

Net income

 

$

8,790

 

$

5,205

 

Preferred stock dividends

 

$

98

 

$

80

 

Net income available to common stockholders

 

$

8,692

 

$

5,125

 

Basic earnings per share

 

$

0.86

 

$

0.73

 

Diluted earnings per share

 

$

0.84

 

$

0.72

 

Weighted average basic shares outstanding

 

10,061,015

 

6,991,585

 

Weighted average diluted shares outstanding

 

10,332,158

 

7,152,328

 

 

7



 

VERITEX HOLDINGS, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Income - (Unaudited)

(In thousands, except share and per share data)

 

 

 

For the Three Months Ended

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

 

 

2015

 

2015

 

2015

 

2015

 

2014

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

9,648

 

$

9,230

 

$

7,454

 

$

7,348

 

$

7,335

 

Interest on investment securities

 

285

 

247

 

252

 

212

 

209

 

Interest on deposits in other banks

 

73

 

60

 

55

 

54

 

63

 

Interest on other

 

1

 

1

 

 

 

 

Total interest income

 

10,007

 

9,538

 

7,761

 

7,614

 

7,607

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

Interest on deposit accounts

 

843

 

778

 

666

 

631

 

652

 

Interest on borrowings

 

151

 

143

 

123

 

126

 

123

 

Total interest expense

 

994

 

921

 

789

 

757

 

775

 

Net interest income

 

9,013

 

8,617

 

6,972

 

6,857

 

6,832

 

Provision for loan losses

 

610

 

 

148

 

110

 

326

 

Net interest income after provision for loan losses

 

8,403

 

8,617

 

6,824

 

6,747

 

6,506

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

Service charges and fees on deposit accounts

 

419

 

380

 

282

 

245

 

292

 

Gain on sales of investment securities

 

 

 

 

7

 

 

Gain on sales of loans

 

430

 

392

 

129

 

302

 

155

 

Gain (loss) on sales of other assets owned

 

 

21

 

 

(2

)

6

 

Bank-owned life insurance

 

195

 

194

 

179

 

178

 

111

 

Other

 

163

 

56

 

98

 

36

 

92

 

Total noninterest income

 

1,207

 

1,043

 

688

 

766

 

656

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

3,019

 

3,001

 

2,588

 

2,657

 

2,444

 

Occupancy and equipment

 

917

 

894

 

808

 

857

 

786

 

Professional fees

 

487

 

632

 

365

 

540

 

439

 

Data processing and software expense

 

313

 

368

 

272

 

263

 

281

 

FDIC assessment fees

 

131

 

121

 

96

 

100

 

105

 

Marketing

 

205

 

227

 

162

 

205

 

156

 

Other assets owned expenses and write-downs

 

24

 

(5

)

22

 

13

 

24

 

Amortization of intangibles

 

95

 

96

 

74

 

74

 

74

 

Telephone and communications

 

81

 

68

 

57

 

57

 

58

 

Other

 

462

 

440

 

286

 

316

 

312

 

Total noninterest expense

 

5,734

 

5,842

 

4,730

 

5,082

 

4,679

 

Net income from operations

 

3,876

 

3,818

 

2,782

 

2,431

 

2,483

 

Income tax expense

 

1,303

 

1,281

 

926

 

607

 

793

 

Net income

 

$

2,573

 

$

2,537

 

$

1,856

 

$

1,824

 

$

1,690

 

Preferred stock dividends

 

$

38

 

$

20

 

$

20

 

$

20

 

$

20

 

Net income available to common stockholders

 

$

2,535

 

$

2,517

 

$

1,836

 

$

1,804

 

$

1,670

 

Basic earnings per share

 

$

0.24

 

$

0.24

 

$

0.19

 

$

0.19

 

$

0.18

 

Diluted earnings per share

 

$

0.23

 

$

0.23

 

$

0.19

 

$

0.19

 

$

0.18

 

Weighted average basic shares outstanding

 

10,675,948

 

10,652,602

 

9,447,807

 

9,447,706

 

9,157,582

 

Weighted average diluted shares outstanding

 

10,954,920

 

10,940,427

 

9,708,673

 

9,743,576

 

9,405,168

 

 

8



 

VERITEX HOLDINGS, INC. AND SUBSIDIARY

Reconciliation GAAP — NON GAAP - (Unaudited)

(In thousands, except share and per share data)

 

The following table reconciles, at the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets:

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

 

 

2015

 

2015

 

2015

 

2015

 

2014

 

Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

$

132,046

 

$

137,508

 

$

117,085

 

$

115,133

 

$

113,312

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

(8,000

)

(8,000

)

(8,000

)

(8,000

)

Goodwill(3)

 

(26,827

)

(26,025

)

(19,148

)

(19,148

)

(19,148

)

Intangible assets

 

(2,410

)

(2,458

)

(1,110

)

(1,186

)

(1,261

)

Total tangible common equity

 

$

102,809

 

$

101,025

 

$

88,827

 

$

86,799

 

$

84,903

 

Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,039,600

 

$

1,009,539

 

$

827,140

 

$

808,906

 

$

802,286

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Goodwill(3)

 

(26,827

)

(26,025

)

(19,148

)

(19,148

)

(19,148

)

Intangible assets

 

(2,410

)

(2,458

)

(1,110

)

(1,186

)

(1,261

)

Total tangible assets

 

$

1,010,363

 

$

981,056

 

$

806,882

 

$

788,572

 

$

781,877

 

Tangible Common Equity to Tangible Assets

 

10.18

%

10.30

%

11.01

%

11.01

%

10.86

%

Common shares outstanding

 

10,712

 

10,700

 

9,494

 

9,485

 

9,471

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share(1)

 

$

12.33

 

$

12.10

 

$

11.49

 

$

11.29

 

$

11.12

 

Tangible book value per common share(2)

 

$

9.60

 

$

9.44

 

$

9.36

 

$

9.15

 

$

8.96

 

 


(1)                                 We calculate book value per common share as stockholders’ equity less preferred stock at the end of the relevant period divided by the outstanding number of shares of our common stock at the end of the relevant period.

 

(2)                                 We calculate tangible book value per common share as total stockholders’ equity less preferred stock, goodwill, and intangible assets, net of accumulated amortization at the end of the relevant period, divided by the outstanding number of shares of our common stock at the end of the relevant period. Tangible book value per common share is a non-GAAP financial measure, and, as we calculate tangible book value per common share, the most directly comparable GAAP financial measure is total stockholders’ equity per common share.

 

(3)                                 Goodwill reflects provisional estimates of fair value of assets and liabilities acquired in the IBT acquisition as of the date of this earnings release.

 

9



 

VERITEX HOLDINGS, INC. AND SUBSIDIARY

Reconciliation GAAP — NON GAAP - (Unaudited)

(In thousands)

 

The following table reconciles net income from operations to pre-tax, pre-provision income:

 

 

 

For the Three Months Ended

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

 

 

2015

 

2015

 

2015

 

2015

 

2014

 

Pre-Tax, Pre-Provision Income

 

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

610

 

 

148

 

110

 

326

 

Net Income from Operations

 

3,876

 

3,818

 

2,782

 

2,431

 

2,483

 

Total pre-tax, pre-provision income(1)

 

$

4,486

 

$

3,818

 

$

2,930

 

$

2,541

 

$

2,809

 

 


(1)              We calculate pre-tax, pre-provision income by adding the total provision for loan losses to net income from operations for the relevant period.

 

The following table reconciles net income from operations to pre-tax, pre-provision income:

 

 

 

For the Year Ended

 

 

 

December 31,

 

December 31,

 

 

 

2015

 

2014

 

Pre-Tax, Pre-Provision Income

 

 

 

 

 

Provision for loan losses

 

868

 

1,423

 

Net Income from Operations

 

12,907

 

7,910

 

Total pre-tax, pre-provision income(1)

 

$

13,775

 

$

9,333

 

 


(1)              We calculate pre-tax, pre-provision income by adding the total provision for loan losses to net income from operations for the relevant period.

 

10



 

VERITEX HOLDINGS, INC. AND SUBSIDIARY

Net Interest Margin - (Unaudited)

(In thousands)

 

 

 

For the Three Months Ended

 

 

 

December 31,  2015

 

September 30,  2015

 

December 31, 2014

 

 

 

 

 

Interest

 

 

 

 

 

Interest

 

 

 

 

 

Interest

 

 

 

 

 

Average

 

Earned/

 

Average

 

Average

 

Earned/

 

Average

 

Average

 

Earned/

 

Average

 

 

 

Outstanding

 

Interest

 

Yield/

 

Outstanding

 

Interest

 

Yield/

 

Outstanding

 

Interest

 

Yield/

 

 

 

Balance

 

Paid

 

Rate

 

Balance

 

Paid

 

Rate

 

Balance

 

Paid

 

Rate

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(1)

 

$

791,799

 

$

9,648

 

4.83

%

$

756,542

 

$

9,230

 

4.84

%

$

599,813

 

$

7,335

 

4.85

%

Securities available for sale

 

67,062

 

285

 

1.69

 

63,204

 

248

 

1.56

 

46,750

 

209

 

1.77

 

Investment in subsidiary

 

93

 

1

 

4.27

 

93

 

 

 

93

 

 

 

Interest-earning deposits in financial institutions

 

86,079

 

73

 

0.34

 

70,363

 

60

 

0.34

 

78,611

 

63

 

0.32

 

Total interest-earning assets

 

945,033

 

10,007

 

4.20

 

890,202

 

9,538

 

4.25

 

725,267

 

7,607

 

4.16

 

Allowance for loan losses

 

(6,436

)

 

 

 

 

(7,146

)

 

 

 

 

(5,906

)

 

 

 

 

Noninterest-earning assets

 

88,382

 

 

 

 

 

88,023

 

 

 

 

 

60,649

 

 

 

 

 

Total assets

 

$

1,026,979

 

 

 

 

 

$

971,079

 

 

 

 

 

$

780,010

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

540,311

 

$

843

 

0.62

%

$

520,806

 

$

778

 

0.59

%

$

396,438

 

$

652

 

0.65

%

Advances from FHLB

 

20,748

 

55

 

1.05

 

19,404

 

56

 

1.14

 

18,533

 

30

 

0.64

 

Other borrowings

 

11,272

 

96

 

3.38

 

9,077

 

87

 

3.80

 

8,073

 

93

 

4.57

 

Total interest-bearing liabilities

 

572,331

 

994

 

0.69

 

549,287

 

921

 

0.67

 

423,044

 

775

 

0.73

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

312,783

 

 

 

 

 

282,934

 

 

 

 

 

246,868

 

 

 

 

 

Other liabilities

 

3,419

 

 

 

 

 

2,403

 

 

 

 

 

2,171

 

 

 

 

 

Total noninterest-bearing liabilities

 

316,202

 

 

 

 

 

285,337

 

 

 

 

 

249,039

 

 

 

 

 

Stockholders’ equity

 

138,446

 

 

 

 

 

136,455

 

 

 

 

 

107,927

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

1,026,979

 

 

 

 

 

$

971,079

 

 

 

 

 

$

780,010

 

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

3.51

%

 

 

 

 

3.59

%

 

 

 

 

3.43

%

Net interest income

 

 

 

$

9,013

 

 

 

 

 

$

8,617

 

 

 

 

 

$

6,832

 

 

 

Net interest margin(3)

 

 

 

 

 

3.78

%

 

 

 

 

3.84

%

 

 

 

 

3.74

%

 


(1)                  Includes average outstanding balances of loans held for sale of $2,482, $4,215 and $5,173 for the three months ended December 31, 2015, September 30, 2015, and December 31, 2014, respectively.

 

(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.

 

11



 

VERITEX HOLDINGS, INC. AND SUBSIDIARY

Net Interest Margin - (Unaudited)

(In thousands)

 

 

 

For the Year Ended December 31,

 

 

 

2015

 

2014

 

 

 

 

 

Interest

 

 

 

 

 

Interest

 

 

 

 

 

Average

 

Earned/

 

Average

 

Average

 

Earned/

 

Average

 

 

 

Outstanding

 

Interest

 

Yield/

 

Outstanding

 

Interest

 

Yield/

 

 

 

Balance

 

Paid

 

Rate

 

Balance

 

Paid

 

Rate

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(1)

 

$

697,439

 

$

33,680

 

4.83

%

$

546,041

 

$

27,236

 

4.99

%

Securities available for sale

 

59,088

 

997

 

1.69

 

49,058

 

839

 

1.71

 

Investment in subsidiary

 

93

 

1

 

1.08

 

93

 

2

 

2.15

 

Interest-bearing deposits in other banks

 

70,630

 

242

 

0.34

 

63,176

 

182

 

0.29

 

Total interest-earning assets

 

827,250

 

34,920

 

4.22

 

658,368

 

28,259

 

4.29

 

Allowance for loan losses

 

(6,419

)

 

 

 

 

(5,498

)

 

 

 

 

Noninterest-earning assets

 

78,006

 

 

 

 

 

60,168

 

 

 

 

 

Total assets

 

$

898,837

 

 

 

 

 

$

713,038

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

475,034

 

$

2,918

 

0.61

%

$

374,074

 

$

2,421

 

0.65

%

Advances from FHLB

 

18,055

 

25

 

0.14

 

15,890

 

118

 

0.74

 

Other borrowings

 

9,212

 

518

 

5.62

 

8,073

 

380

 

4.71

 

Total interest-bearing liabilities

 

502,301

 

3,461

 

0.69

 

398,037

 

2,919

 

0.73

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

267,550

 

 

 

 

 

230,875

 

 

 

 

 

Other liabilities

 

2,408

 

 

 

 

 

1,783

 

 

 

 

 

Total noninterest-bearing liabilities

 

269,958

 

 

 

 

 

232,658

 

 

 

 

 

Stockholders’ equity

 

126,578

 

 

 

 

 

82,343

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

898,837

 

 

 

 

 

$

713,038

 

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

3.53

%

 

 

 

 

3.56

%

Net interest income

 

 

 

$

31,459

 

 

 

 

 

$

25,340

 

 

 

Net interest margin(3)

 

 

 

 

 

3.80

%

 

 

 

 

3.85

%

 


(1)                 Includes average outstanding balances of loans held for sale of $3,134 and $3,569 for the twelve months ended December 31, 2015 and December 31, 2014, respectively.

 

(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

 

12